tv The Claman Countdown FOX Business August 23, 2019 3:00pm-4:00pm EDT
that could get things turned around. at the end of the day, i think there's underlying strong fundamentals that investors can rest assured with that the market will rebound. we will have some volatility here in august. charles: fundamentals always, even in these hectic times. thank you both very much. we are off 540 points as i hand it o to cheryl casone. cheryl: thank you very much. we continue to follow the breaking news on fox business. the self-proclaimed chosen one has sent the markets into a tailspin today after ripping off a set of tweets in reaction to china's latest retaliation to new tariffs, set to go into effect eight days from today. president trump laid down the law, outright ordering american businesses to find production alternatives outside of china, saying quote, we don't need them, and quote, we are better off without them. well, the president reportedly holed up in the white house right now meeting with his trade team. also, he did say he's going to
be responding to china tariffs this afternoon. what that means, we don't know. we are watching the white house closely for any movement. if we see the president, yes, we will take his comments live. as you're looking at these red numbers across the screen, market watchers began the day mostly worried about what fed chair jay powell was going to have to say. in a speech today in jackson hole, wyoming. but markets didn't really react to those comments as they gave no clarity to any possible rate moves. we will talk about those comments, though. he did talk about trade. when the president fired off those tweets on china, that is when the dow started to plummet. right now as you can see on the screen, the dow is down 552, barely off the session lows. the dow down 584. the markets at this point are looking to close the week in the negative and that would snap a three-week losing streak. again, all negative for the week right now, as you can see. the s&p 500 down 31. the nasdaq down 120 points.
again, we are all over the markets and a lot can change, big-time change in the next 59 minutes. the market's extending losses right now. again, session lows hit just moments ago as charles payne was showing you. we are also watching the two-year and the ten-year. we have been watching this a lot, the yields inverted. this is the third day in a row we have seen the yield invert. has yet to close down. remember when you see that, that has traders concerned, especially the bond market. the bond market is telling you they're worried about the possibility of a recession. we know what that means, folks. we have also got the oil contracts we're watching right now. there's the two and ten-year spread. 2.13%, lower for the week. the china tariff retaliation announcement, including a levy on crude, does increase worries about demand prospects and impact on the global economy. we will watch the oil names sell off today. but there's oil down more than
2%, down about 1% for the week. oil had actually been stronger earlier based on production numbers we got on wednesday. now, the drillers, this has been interesting, the gas drillers are sinking. closely watching sea drill, trans-ocean, diamond offshore, valaris and noble corporation. the number of u.s. active oil drillers dropped to the lowest levels we have seen since january of 2018. again, a lot of red across the screen because of that china news. again, the retaliation of the chinese hitting this one and big cap consumer tech names slipping, second day in a row. you got to look at apple. iphone production in china, folks, the biggest lager lagger. we have also got amazon, facebook falling. you have a tech selloff on your hands. amazon down 3%.
take a look at netflix, microsoft, google, all those stocks are falling. alphabet, parent of google, down more than 3% right now. also a look at another china story and this is chip stocks slipping. int intel, nvidia, microchip technology, broadcom falling in late trade right now. broadcomthe biggest loser in that group. now for that flight to safety. where are people going with their money. they are pouring it into gold. look a 2% gain on the gold contract. that erases losses for the contract for the week. fed chairman jerome powell sounding accommodative and will do what is appropriate when it comes to monetary policy, lower interest rates obviously would be bullish for gold and of course, the dollar's movement impacts that contract as well. the move in the gold contract is pushing the gold mining stocks higher. let's take a look.
all the gold stocks actually hitting new highs today. as you can see, big old jump, more than 9.25% right now on yamana. stocks extending losses this hour after the president ordered, well, ordered in a tweet, u.s. companies to look for alternatives to china. this was after china's latest retaliation. it was a big one this morning. they say they will slap 5% to 10% tariffs on around $75 billion worth of u.s. goods. that's eight days from today. this is september 1st they are going to hit us with tariffs when we will be hitting them with tariffs. take a look at some of the key items china is going to be using with those tariffs. you have toothpaste, peanut butter, fresh fruit, these are very small fraction of the items that we pulled from a very lengthy list. we have fox business's hillary vaughn inside the white house where the president, as we just reported, behind closed doors. we hear steve mnuchin was called
in from vacation. have you gotten any word on what is happening inside the white house behind you? reporter: we are really waiting for what the president teased earlier today which is a response to china's retaliatory tariffs, expected sometime this afternoon. again, president trump's trade team meeting earlier, followed his tweet that said there would be a response to china's retaliatory tariffs. we did have white house trade adviser peter navarro on fox business earlier this morning who reacted to the news of china issuing another round of tariffs against u.s. imports. he says china continues to pay the price of the trade war and is hemorrhaging cash. >> if we get that china relation right, if we get them to behave like other actors in the world economy and stop stealing our stuff, that's the next leg of global growth. i think for investors, be assured of this. negotiations will continue as they have been. they will be done behind closed doors.
reporter: the president not behind closed doors, firing off publicly fresh reaction to china's retaliatory tariffs, publicly lashing out on twitter saying the u.s. does not need one of its top trading partners, writing this, quote, we don't need china and frankly would be far better off without them. so the president is ordering u.s. companies to get out of china, move operations and start manufacturing products in the u.s. instead, writing quote, our great american companies are hereby ordered to immediately start looking for an alternative to china. trump is also demanding that shipping carriers stop any deliveries of fentanyl from china, saying this. i am ordering all carriers including fed ex, amazon, ups and the post office, to search for and refuse all deliveries of fentanyl. fed ex and ups issued statements in response to this saying they follow all protocols and mandated security measures to make sure they are not shipping illicit goods through their carrier supply chains. the u.s. chamber of commerce also chiming in, reacting to the
president's tweets today, saying that they share the president's frustration but they urge him to continue constructive conversations with china, saying time is of the essence and they hope that a deal is reached soon between the two countries. the national retail federation also reacting, saying it's completely unrealistic for the president to push private companies to pick up and move out of china, saying it would not only be costly but it would also take years. moments ago, the president continued to comment on what has been a drop in the dow in response to this ongoing back-and-forth, saying it's not his comments that are driving the dow down, writing this, quote, the dow is down 573 points perhaps on the news that representative seth moulton, whoever that may be, has dropped out of the 2020 presidential race. so whether in jest or being serious, the president is not taking credit for the dow's drop today. cheryl: we are watching the markets drop and know he really does look to the markets as a
sign of, well, the success of his presidency. hillary, thank you very much. we are down 529 right now on the dow. we will continue to watch these numbers. aside from ordering, ordering u.s. companies to find alternatives to china, the president also went after the federal reserve and again, he went after chairman jerome powell. here's a tweet from earlier today. as usual, the fed did nothing. it is incredible that they can speak without knowing or asking what i am doing, which will be announced shortly. we have a very strong dollar and a very weak fed. i will work brilliantly with both and the u.s. will do great. my only question is who is our bigger enemy, jay powell or chairman xi, referring to xi jinping. with the president's tweets turning the market lower, who or what is the biggest enemy of the economy? to the floor show. a lot to talk about now. john, first to you. is jay powell really the enemy of the market today? >> we really can't tell from our standpoint here if he's an
enemy. i would think he's working hard and trying to make the best decisions for the country. but there's also many other things going on that may affect what he's trying to do. cheryl: larry, it's about trade, it's about the trade war with china and jay powell spoke about that today. obviously they are ready to act but he also was very clear from jackson hole that unless he sees data coming in, unless there's a reason to push rates lower, quarter point, half a point, president called earlier this week for a hundred basis point cut, those were tepid comments from jay powell. that accommodative stance, it was kind of a neutral day at jackson hole, really. >> yeah. actually, it started off with a dovish tilt to it but then as you said, it went kind of neutral, where he did acknowledge the risks that are surrounding us, not just with the trade war which is an
enormous deal but also the slowdown in germany, hong kong, japan, korea, et cetera. there's a lot of moving pieces. i thought powell did the right thing. the markets were expecting a miracle and he has produced miracles in the past. at this point with our data being decent, if not better than decent, it's hard for him to take on anything more than 90 style, there market want more than that. that's why data will become a lot more important. next week we have capital goods, consumer confidence, starting to get a glimpse into fourth quarter with gdp struggling at 2%. cheryl: you're right. we are going to get that new read on gdp for q2. right now, 2.1%. if there's a revision downward on second quarter gdp, you're right, that might be the biggest data point i know i will be watching next week. phil flynn, definitely watching oil right now.
obviously the tariffs is a big story for the oil contracts and traders like yourself. give us the high points right now or the low points, i guess you could say. >> it depends what time the tweets come out. essentially, yeah, it's kind of funny, i looked at oil and the 5% tariff was announced by china. oil prices tanked a little bit. but even with 5% tariff on u.s. oil, it's still cheaper than the other oil that they're buying. if you look at the cost of brent crude at 5%, you are putting the price at equilibrium. the bigger concern obviously for oil traders as you know is the fear that this is going to push us into a recession. but you know, at the end of the day, i think it's too early to freak out about this. because we don't really know how this is going to play out and going back to jerome powell, i think the most significant thing he said today was hey, you know, the trade war is new territory
for us. there's no rules. we may act aggressively and we don't know it. that was kind of his mario draghi do whatever it takes moment. he didn't come out and say hey, we will be rl aggressively cutting but he did say that this is going to be an unusual situation so in other words, all option ars are on the table. cheryl: that accommodative stance, if we need to act, we will, we're here, we're watching. we are watching the market sell off during this segment, down 591. new low for the dow, just hit. a lot could happen in the next 46 minutes. like to thank all my guys for the floor show this afternoon. big board, we are down 585. 25,665. we have kind of had a quiet week until this. you are seeing session lows on your screen. we're on it. i'm here. nike stumbling this hour due to tariff tensions. the red arrow coming despite
guggenheim naming the athletic apparel maker as best idea. they say it's among the best positioned retailers to swoosh past trade risk, get a strong result and trying for levity here today. they have a robust product pipeline they say but shares are down more than, well, almost 4% right now. we will come right back and talk about that and of course, we are on the market. stay with us. this was me six years ago... and this is me now! i got liberty mutual. they customized my car insurance, so i only pay for what i need. then i won the lottery, got hair plugs, and starterking out. and so can you! only pay for what you need.
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take your business beyond. cheryl: all right. as cargo ships from china race to make it to the u.s. before new tariffs go into effect just eight days from now, america's ports are preparing for a potential surge ahead of the tariffs delayed until december. the 2018 was a record year for many american ports including the port of long beach,
california. port of long beach executive mario cordera joins us now. the question is it looks like we have seen a little bit of a slide in traffic in recent weeks. do you think that you are going to get a surge in the next eight days ahead of that september 1st tariff deadline? >> good afternoon, cheryl. i think it will mirror what happened in 2018, particularly in the fourth quarter. we saw a surge in the fourth quarter which accounted for a record year for the port of long beach so i would not be surprised in light of what we had before, we will see a surge again. cheryl: let's talk about what the customers there are telling you. some of the items obviously, it is retail items, it is components, it is electronics. what are the customers, the actual importers, telling you about the effects of tariffs? >> well, i think we are starting to see an impact particularly as you know, we are moving forward to the impact on consumer goods so i think it's fair to represent there's a lot of
concern and certainly, from a business perspective, there's uncertainty in the environment and i think as you noted here in your program, certainly the markets are reacting to that. cheryl: because you're processing the paperwork, the tariff paperwork. you are seeing that paperwork. that's a piece of these giant container ships arriving in your ports. you are really on the ground and getting the first glimpse of how this is affecting american companies and ultimately that consumer, correct? >> exactly. like for southern california, we are ground zero for china commerce. asia commerce overall. so we are seeing that impact and so i think what you have indicated is correct. cheryl: what kind of changes do you think might come if this tariff war and these tariffs go into effect december 15th, september 1st? will that have a negative effect on you? >> it has that potential, having a negative impact.
i think what we are seeing now is the movement of outsourcing from china to other asia countries such as indonesia and vietnam. we are starting to see that metric moving into a positive percentile for other southeast asia countries. i think it's going to be a long-terminals in terms of how much that moves but certainly on the short term you are seeing a lot of companies who have a strategy now of china plus one which means china plus another region in terms of potential outsourcing. cheryl: real quick, not to put you on the spot, can you give me a percentage of how much change you are seeing from ships coming in from china versus ships that are coming in from you mentioned vietnam which we know some companies are now moving production to. >> what i can tell you at least in the last six months or first six months of this year, there's been a change of 22% reduction from the china origin of the cargo as opposed to if you look to countries like vietnam,
almost now at 46% in terms of increase. i'm talking about year to year. cheryl: no kidding. those are substantial numbers. that really does paint a picture of how things have changed in the last year during this trade spat, trade war. you're front and center. mario, thank you very much for being here. >> thank you so much. a pleasure. cheryl: port of long beach, a crucial part of american commerce. let's talk about boeing. they are trying to buck the trend today. there is actually a green arrow on the board. i know, right? the only one in the dow 30, flying into possibly their best week since june as we head into the close. we will see if they can hang on. new production hopes fueling their ascent but new regulations may bring them back to earth. new details on the safety clouds standing in the 737 max's way. and if that fleet will ever make it off the ground and into the
cheryl: we are watching, of course, the dow selloff. we are down 559 right now. but boeing is actually in the green. as you can see here, since tuesday, up 7.6%. surrounded by a sea of red on the dow 30 after these reports that it's getting ready to ramp up production of the troubled 737 max, plans call to increase production from 42 aircraft to 52 a month by the end of 2019, this year. they are telling the suppliers they believe the jet will be ungrounded by october, that's early q4, which they have said before but it looks like that's still on track and the faa says they will begin testing the 737 max in the next four to six weeks. all of this has elevated boeing to the top of the dow 30 for the past two days, again, a nearly 6% gain since tuesday's close. let's head to chicago.
grady trimble is on the ground. what are you hearing from boeing and more importantly, from the faa? reporter: well, it's pretty remarkable, when you see all the other stocks going down, down, down and boeing is hanging right in there. there are a couple factors at play here. one of them, as you mentioned the faa. they are now working with boeing to come up with a plan to test the 737 max planes so that they can get them back in the air. hoorps here's a statement from the faa. as part of the overall testing and validation a cross-section of line pilots from carriers that operate the aircraft around the world will be invited to participate in simulator testing. the faa hasn't specified how many hours of experience behind the controls of the max aircraft pilots will need. they just have to have flown that plane before. there's also no firm schedule as to when this testing will happen. but the fact the plan is pretty specific, that indicates testing could start happening sooner rather than later. then for its part, boeing says it's hoping to ramp up production of the max planes in
the first part of next year. there is also more good news for the company that came out this week. you might have missed it but it's helping lift the stock. the company landed a big contract with the u.s. air force worth nearly $1 billion. boeing will provide new wings for the a-10 thunderbolt aircraft. i spoke to an analyst who says for investors, the most important thing obviously is getting that 737 max plane back into the air. this week's developments add confidence that it could happen at least come fall, which is kind of what we have been hearing for awhile now. although we did reach out to boeing to see if they would confirm that date, that october date for us, but they are still not commenting at this point. cheryl? cheryl: up more than two bucks right now, a gain of more than half a percent. we will take it on a day like today. grady trimble out of chicago. thank you. we are watching the dow sell off and we got to point out we are likely to see losses for the week for the dow, the s&p and nasdaq. let's go through some of the numbers. as you can see, the dow is down
577, a loss of more than 2%. the s&p is down more than 2% and the nasdaq is down almost 3%. there's a couple of things we're watching here. let's move to peppa pig, about to take a top spot in the family of hasbro. the toy and game giant are buying the parent entertainment one. it's an all cash deal. investors seemingly unhappy with this $4 billion roll of the dice. the stock is on track for its worst close since july 5th. there's hasbro. i was trying to find something bright. it's actually down almost 9% right now. the selloff is not taxing intuit shares. this is the maker of quickbooks, turbo tax, surging to the top of the nasdaq and s&p. they posted a narrower than expected loss in the last three months, it's a beat on revenue also helping to lift the financial software giant's guidance. shares hitting a new record high
intraday, currently 1.5%, $279 and change. from the top, let's head on the bottom. sneaker vendor foot locker falling after reporting 32% drop in profits year over year, and missing on sales estimates for the second quarter. biggest lagger hitting its lowest point over a year, foot locker trading down almost 19% on your screen. on track for its lowest close since november 2017. we are looking now at basically session lows right now. 585, 595. we have seen all of it. we are on this market selloff on this friday. there is nothing quiet about this august friday. "the claman countdown" going to come right back. your business is up and running, but is it going beyond fast?
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cheryl: during the commercial break, want to let you know we are covering this breaking news on this friday afternoon selloff. we are going to blow out our breaks. no more commercials. we will take you right to the close of trading at 4:00 p.m. eastern time. we are just off of session lows moments ago while we were in our last commercial that we're taking. the dow is down more than 600 points. s&p is down 71 and change. that's a loss of nearly 2.5%. the nasdaq again, really the pressure is heavily on the nasdaq. a lot of the tech companies, think about apple, think about all the chip makers, china is the story. the president ordered, quote, ordered u.s. companies to abandon china. the fed chairman jerome powell said the fed would act appropriately to sustain the economy. he warned about global growth concerns, he warned about, yes, trade uncertainty this morning. here's a look at the fed funds futures right now. this is the bet, if you will, traders are making, whether or
not we are going to get a rate cut. maybe it's a quarter point, maybe it's a half point. right now charnnce of a rate cu for the september meeting, a quarter point, 100% chance. 100% chance we will get a cut for the september meeting. all of this depends on what the fed decides to do. they are always data dependent. want to show you the yield curve. we have been watching this. the inversion of the yield curve which is the two and ten-year, if you see this happening and hear this happening, it means there's a feeling in the bond market that there's a recession coming. it's an indicator, it's a warning. it's not a guarantee. but it's certainly something you want to kind of watch, obviously. let's bring in the former international monetary fund chief economist maurice oxfeld live from jackson hole, wyoming. we also have andy brenner. gentlemen, great to have you both here. maurice, you're on the ground. i do want to ask you, how were the president's tweets, in
particular the last one, aimed directly at jay powell, saying he's an enemy of the country, the market, how is that perceived there? >> well, you know, i can give you my reaction. there are a number of issues in the world economy now but the biggest factor depressing growth evywhe is the president's trade war. i think the president is eager to juice the economy going into the election. the trade war is working in the other direction so he's lining up a range of scapegoats including the fed most prominently but also china, europe, you in the media. cheryl: yeah. well, we have a lot to cover, obviously, and the chinese certainly took a huge swipe at the united states this morning, but jay powell's in a tough spot here. he's got criticism coming from the president. that's one thing he's got to deal with. also, he's got to make this a data-dependent cut in the meeting in september. what i thought was interesting, here's the quote, there are
however no recent precedents to guide any policy response to the current situation. what do you make of that particular line from powell this morning? >> well, we have never had this kind of situation before where trade is so prominently affecting the global, the world's economies. i think, though, that this kind of helped powell today because he's already said he's looking to do what is appropriate and he's aware of significant risks on the horizon, yet he's got all kinds of fed bank governors who have said they don't want to ease at all. now all of a sudden, you've got stocks down 600 points, s&p down 71, real fear out there because of what china did this morning. we think china was trying to send the president a message going into the g7, but it's had more of an effect than that and it's actually helped powell because i think it's going to enable him to get the fed governors who really do not want to ease at all, get them in sync
for a 25 basis point cut in november. cheryl: similar comments from neil kashkari earlier this week. that kind of moves the needle forward for a bigger rate cut. how likely is it we get a half a point? i ask you that, i think the numbers matter, because at some point the bank's not going to leave itself enough room in case we have a real global recession and there is talk about these central banks around the world making these steep cuts. you have negative rates in europe. you can only go so far. >> yeah. i think that encapsulates the conflict within the federal open market committee. there are those who would like a strong preemptive cut to avoid getting too close to the zero interest rate point. there are others who would prefer to wait until they see the whites of a slowdown's eyes. chair powell and his speech, he
referred to a number of risk factors they are monitoring. the closely related factors of muted inflation, trade war and slow global growth and also referred to risk management by the fed. i think he's leaving the door wide open to more cuts this year, perhaps a front-loaded cut in september, and certainly if the kind of turbulence we are seeing today continues, we will see it in the economic numbers and that will justify something aggressive. cheryl: we are going to be getting a revision on q2 gdp, that will actually be next week, next thursday, i believe. if we see more pressure on growth, and again, if you see employment and inflation which of course are the fed's actual mandates, not reacting to politics or trade, that could really be a game changer, not just for the committee but for the markets. >> yeah. the way i see it is there's no recession on the horizon for the u.s. economy. consumer growth continues to be
very strong. it's 70% of gdp so we're not going into a recession. europe, on the other hand, is already in crisis and with these tweets today going back and forth, i'm just afraid about what the ecb is going to do on september 12th and what we may do to follow them on september 18th. it could really be an ugly september. cheryl: you know what, maurice, he brings up a really good point. g7 is this weekend. the president is getting on a plane about 10:00 p.m. eastern time heading over there. this is going to make for an interesting 48 hours. it could be really a critical 48 hours for the markets, not just what's happening in the g7 but also what's happening in hong kong. we are now at 11 straight weeks of protests there. >> well, look, there's hong kong, there's the possibility of a no-deal brexit and that will be something discussed at the g7. there's the trade conflict people aren't focusing on between korea and japan which is regionally quite important. there's a lot in the mix here. and you know, these g20, g7
meetings have been featuring a lot of discord in the past. look, we kind of have focused on china here in terms of the trade conflict but don't forget, the president has threatened other tariffs on european cars. so that could come up also. i think it would add to the kind of terror we are seeing out in the market. cheryl: maurice, you look nice and relaxed. looks like a beautiful day. we appreciate you taking the time out to talk to us. >> thank you. cheryl: all right. maurice, andy, guys, thank you to both of you. we certainly appreciate it. looks like a nice summer day in jackson hole. closing bell going to ring. we have 20 minutes to go. just 10 minutes ago, we announce we had are no longer taking commercial breaks. we are on the markets. as you can see, the dow is pushing session lows again, 600, we were down about 609 if memory serves a few moments ago. s&p as you can see is down 38 points. nasdaq is down 131. this will be the fourth week of
losses. let's bring in gerri willis live on the floor of the new york stock exchange. you have winners and losers for the week? gerri: yeah. a week overshadowed by today and by good retail earnings at the front of the week. the weekly leaders include home depot which had great earnings and also boeing, as you remember. the faa saying they are going to test the 737 max jets which would sort of start to end the whole issue boeing has had with that plane, the tragic issue with that plane. merck also a leader here. when you look at the laggers, united health, american express, united health down 14.8%. a very big move indeed. moving to the s&p, weekly leaders, here's where you see retail playing out. we had some really great numbers in retail. three of the companies actually posting those good numbers. target, nordstrom and lowe's.
nordstrom, especially significant because it's an old-fashioned department store retailer. they did very well even so. the losers on the s&p, three here, dow, ge and l brands. l brands, one of those retailers that did not have a good earnings report. so lots of interesting ties going on with these stocks today. we are coming in close to the closing bell, 614 points down on the dow, 2.34%, it has been a brutal day here as we talk china trade and the federal reserve. a lot going on. cheryl: and tweets. gerri: and tweets. yes. cheryl: one tweet changes everything. gerri: i'll say. cheryl: well, the dow is plummeting, trade worries, fed fears. some investors are really questioning if it could be time for the trump economic adviser and china hawk peter navarro and fed chairman jerome powell maybe to call it quits. let's bring in charlie gasparino. you always have your ear to the
ground with the big money managers here. >> i would say top of the list is navarro, if you want to appease wall street. jerome powell deserves some shade, so to speak. clearly in december when he was tightening, he didn't see the numbers coming that showed he shouldn't be tightening. the trade stuff was starting to impact gdp back then in december. it obviously came out i guess in the fourth quarter gdp numbers and we saw like a slowdown to 2.1%. but he should have seen that and he didn't. so when you are the ceo of the economy which he kind of is chairman, he's the president and ceo in many ways, the fed chief, you screw up like that, you got so people are saying that you know, particularly given the fact the president has no confidence in the guy, he might be a good guy to go. but the other guy i think when you talk about leaving and to straighten out policy is peter
navarro. here's why. let's be real clear here. everybody knows china's a bad actor. peter deserves credit for being an academic that called attention to china very early on. but the way to combat china most people in markets and most mainstream -- by the way, larry kudlow would say this. he won't say it now, working for tru trump, but he and mnuchin would say the way to do it is not through tweets, going after this guy or that guy, going after trading partners that don't pose the sort of existential threat to our national security that china does, is to focus yourself. if you focus on china through trade agreements, through the trans-pacific partnership, through multilateral agreements with other countries where we can isolate them, we don't have that now. so part of the reason why the market's trading off, the market could trade up easily 619 points the way this thing is going, if president trump tweeted tomorrow
that everything is fine, we are going to have a deal. just remember that, when you get too crazy on the negative, remember the positive could be -- cheryl: but we are getting farther away from a deal. i think that's why -- that's the problem. >> you never know. cheryl: he's got meetings coming up in september, but -- >> the thing about president trump, he could do a 180. just knowing him, he has advisers in there telling him not to listen to peter navarro. trust me on this. he could turn around and say okay, you know, i made my point, time to move on. he could do that. it's totally within his sort of, if you know anything about donald trump, i have covered donald trump the businessman, not just the presidential -- the president -- cheryl: does he listen? >> well, he may. when he sees the markets, when he sees economic numbers coming out and here's the thing, though. again, jerome powell deserves to be -- deserves to be criticized. no doubt. he probably should go. but the reason why navarro should go now, right now, jerome
powell is playing catchup. he's not raising rates anymore. the trade war's still lingering and the markets are freaking out. and it's not just stocks. let me tell you something. stock market is very reactive off headlines and everything. it's not the best indicator. i can tell you the stock market was at all-time highs right before the financial crisis in late 2007. the bigger indicator as you know is the bond market. when bond investors are very savvy. when yield curve starts to flatten, it's clearly saying that people are buying the long end, thus they buy the bond, the price goes up, the interest rate goes down. thus it flattens the curve between short and long flattens and that's an indication, when you put money into long term bonds, when you're buying them, there's going to be -- cheryl: you're worried. let me ask you something. the president's tweets this morning, this is where things kind of went off the rails, if you will. obviously the china move started all of this today before the bell. but he's ordering u.s. companies to get out of china. it is not that easy.
i know people that are ceos in the fashion industry that say my entire production supply chain is coming out of china. i can't just move to vietnam. >> you are making an excellent point. again, talk to ceos, talk to people in the markets that have money, real skin in the game. not some dopey day trader. when you talk to them, they will tell you if a president is coming out and saying, making quasi-executive orders through tweets, that does not, that affects fiscal policy. cheryl: telling fed ex and ups make sure you're not letting fentanyl into the country. what are they supposed to do? open up packages? >> fentanyl is an illegal substance. they are not doing it on purpose. i get that. it's more than that. he doesn't understand that -- it seems that fiscal policy, particularly involving trade, is done so haphazardly, you lose confidence. again, i would tell the average investor that's watching these swings, be real careful here. knowing him, and i know him a little bit, he could turn
around, do a 180, say larry kudlow, lighthizer, you go out there and you basically cut the deal, let's declare victory and go home. it is very possible. whether that happens or not, i can't tell you. the problem, though, is that peter navarro is there and i tell you, if he fired peter navarro tomorrow, the market would go up 1,000 points probably. cheryl: the president did say he was going to be commenting at some point today. we haven't seen him yet. but you're right, cocohe could change the story in the next 12 minutes. >> it will reverse that. cheryl: i agree with you. we will stand by. all right. charlie gasparino, who has always got the big money guys talk to you. thank you. obviously we will continue on this china story. this tariff retaliation that came from the chinese, ripped apparel stocks today. i was just talking about a good friend who runs a fashion company. companies like under armour, of course, right -- >> my friends would never run a
fashion company. cheryl: that's where i get my clothes from. under armour, pvh, calvin klein, a huge part of what americans wear. ralph lauren, capri holdings. >> americans wear versace? cheryl: not anymore. the national retail federation responded to president trump's tweet, demanding that u.s. companies look for alternatives to china. that was his ask. they say it's unrealistic for american retailers to move out of china, the world's second largest economy. what do you think trump's demands mean not just for retailers, companies that have established factories and supply chains in china, is that going to hurt the global economy? let's bring back our floor show traders and federated portfolio manager. i have a ceo of a fashion company that says she cannot
move her production out of china. doesn't work that way. >> yeah. i mean, absolutely not. it's nice to be able to tweet what you want to have happen but reality hits the road, i just think this is the way these guys are negotiating. they are negotiating over tweets and over, you know, tariffs. the tariffs coming back from the chinese this morning, honestly, could you really be surprised they did that? also, secondly, it's not surprising they did it with a week left in august as we are heading into the long weekend. the timing on this was no accident. cheryl: well steve, i want to bring you in. same question to you. ordering a u.s. company to just get out of china or make their goods back here in the united states, it just isn't that simple. >> well, it certainly doesn't occur over a tweet. but it does occur over a trade war. i think that's been part of what we've had happen over the course of the last year.
the president views the trade dispute with china as probably the single most economic political, geopolitical and national security issue of our time and he's pursuing it aggressively. now, that certainly roils markets from time to time but i think if there's an expectation of a quick deal or turnaround, i don't think that's going to happen. you've got to take a breath, look at this market and ask are we headed into recession. if the answer is yes you need to be bearish. if the answer is no, you need to look at these as buying opportunities. cheryl: what about all the data? that's the issue. we don't have all the data. i want to point out that we've got the dow down 660. we are hitting brand new session lows. this is now going to be -- we were on track to maybe have a positive week and that's off the table because of what china did this morning and obviously the president's reaction and the reaction from the administration. we would like to hear from the president. we haven't seen or heard from him yet. maybe it would be helpful for him to come out and talk to us. the dow at this point only needed to lose 366 to be negative for the week.
we are down 669. phil, obviously this is -- i know we were listening to jay powell this morning, watching the dollar, got the g7 coming up this weekend, so there might be a volatile weekend for traders. it's like keep your phone close by. >> it really is. you're not going to get a lot of sleep if you are nervous about the market. we are seeing, i'm standing here now, we are seeing another slew of sell orders coming into the s&p pit right now. doesn't look like the selling is ending as we get closer to the close. yeah, for traders, if you are position traders it's going to be a nervewracking weekend because we don't know what donald trump is going to do. how hard is he going to be on u.s. companies. but i do think there's obviously a lot of companies in the supply chain, they can't leave overnight. i will tell you this, if you are thinking about investing, you think you want to invest in china any time soon until this gets solved? there are companies that will start looking for alternatives. we have already seen that to a certain extent. i think what president trump is trying to say is hey, we will
put even more pressure, isolate you economically, if you think tariffs are one thing, we are going to take this to a whole new level. but at the end of the day, this is just more open negotiation and what president trump comes out with today could have a major effect. now, when you get to the g7, is everybody going to be yelling at him like what the heck are you doing here, you are going to kill the global economy, but i think he's used to taking this kind of pressure and like charlie said, he could change on a dime. we could come up with a deal over the weekend, he could say i called president xi, we are going to play golf and all of a sudden the market -- cheryl: i don't know. i'm not as optimistic as you. i wish i could be. at the same time as i'm seeing the dow down almost 700 points to the downside now and we have had weeks of volatility, had the worst selloff last week we have seen since the beginning of the year. i want you to stay with me until the close. chris, you talk about u.s. companies, i wanted to mention like look at even bmw or
mercedes-benz, look at ford, look at gm. these are all auto makers that by china's moves this morning, they are going to be hit by this. we have production that's actually done in this country that is sent to china and the auto industry, that's jobs, that's the economy. there's always a consequence to this. >> there is. it's like dropping a brick into a pool. there are unintended consequences. you are going to see that. i will say this. if you look at the overall market, you have 600 points not fun to see when it's on the downside but we are trading levels right now. okay? that's one of the things people at home, watch for the 10% level. if that 10% level which is about 24,700 in the dow, that's going to be a big number and everybody's going to come in. you will have people come in and either buy it or sell it. right now, we are still holding above that. we are about 6.5% off the high. so we are still holding up surprisingly well. i always look at the glass half full. what phil said is right.
if he has one phone call, this could be fixed in a matter of really a snap like that because all you have to do is say we won, it's over, and we're right back into, you know, a good rally. cheryl: you know what, you reminded me, too, guys, you just reminded me as well, chris, that larry kudlow was on fox business last night and said we are meeting face-to-face with the chinese. so we are hopeful but right now, we're not because we're now down more than 700 points. i want to bring in eric shownstein, and william lee. guys, thank you for joining us as we watch this major selloff on a summer friday. bill, i want to ask this to you, bill lee. are we talking ourselves into recession? i know that's basic question. but i think it bears attention right now. are we basically pushing ourselves into recession? >> yes, we are. absolutely. here's why. because all this obsession about the inversion of the yield curve is overlooking the fact it's a
bullish inversion because people are coming to the united states because the united states is a productive place to put capital. one of the things that we have not had from chairman powell is this kind of draghi moment tha says we're there to backstop the u.s. economy, whatever happens to growth, we will do whatever it takes to ensure growth stays there. he came close to it this morning by saying we will do what's appropriate. he doesn't give the impression of a guy who is truly in charge of the monetary policy process. why? because the fomc is going all over the place and he doesn't have the kind of control that previous chairs have. i think that's what scares me and the markets more than anything else. president trump can do all he wants to look tough with china, but powell's job is to make sure that the ceos are confident that there's policy cheryl: eric, what do you make of all this? we're down 716 right now. >> you look whether this is short term or long term, right. we're talking about whether this is talking ourselves into recession. the consumer very strong
component. 70% of spending and gdp comes from them. they're still in good shape. is this something more structural or something more temporary? even inversion in yield curve is not necessarily automatic signal of recession. the question investors need to think about, what does it mean for my risk profile. if i want to take more risk, what kind of companies should i look at? if i want to take less risk, with companies should i look at? take that view in context of tariffs, trades and tweets. cheryl: you know what, steve? at the end of the day we'll get more economic data this week. it could be good. i can't help but wonder ceos running trade sensitive companies and stocks we're looking at, at what point do i stop forecasting growth or hiring, training, pulling back on employees. that is the employment story we don't want to see?
>> so far that is not happening. hiring is occurring. wages are rising. consumer strong. as long as that is in place you have to be constructive federated we took rate from 3% to 2%, you don't have confidence in the 2020 number. it is because of the fed. what is going on with trade. we should not be freaking out. when you look at indicators out there, they do not point out to recession. we'll be patient. how things break coming next week. cheryl: chris, we want to be safe but they're looking to retire soon, they're not up for the volatility anymore what do they do? bill, i'm sorry. >> retirees are in a hurt position, portfolios are eight at this%, 90% ex-equity they are in trouble. they shouldn't been. consumers need to be strong.
we need healthy stock market to keep the wealth effect up. one of the thing that is important, that the president can't allow market volatility to tank market long period of time. he knows that xi xinping needs a political victory. he will try to make sure they make some attempted deal between now and october when xi xinping has to face the chinese people say, we have a victory in hand. cheryl: you're a great economist. phil flynn, economist of all things in energy. final word to you, phil? >> i'm looking here late friday selling. probably margin call selling. like i said, if you're worried about inverted yield curve, think about last couple tames yield curve inverted. stocks soared. don't sell because just of that. bets on inverted yield curve came off on weekly fund manager. before today they were backing off the bets that the yield curve would stay inflated.
cheryl: that's why i love you. bill, eric, steve, chris, guys, thank you to all of you. [closing bell rings] we have 10 seconds to go. the dow is closing down more than 600 points to the downside. it is about trade. that is it for me. over to "after the bell." connell: what a day. we had final hour, we're watching it. gotten down to session lows. cheryl came off them in the last few minutes. still down 600 points. all three major averages ending firmly in the red. big escalation in the trade tensions. president trump ordering companies looking to alternatives than china. the market ending 620 to the downside. funny to say 620 down. >> not the lows. connell: 682 there. the we'll see how we settle in off lows of the session. awl
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