Good morning, good afternoon, good evening and welcome from wherever in the world you may be watching. Im Brian Sullivan thanks for joining us. Youre coming off a 767point drop for the dow yesterday that was the biggest drp of the yea year at one point the markets were down nearly 1,000 points we came back a bit futures are slightly higher. At one point down 950. The currency manipulator tag that trump threw on china last night could rattle the markets again. China making a move this morning to firm up its falling dollar setting a peg to keep it from dropping more. Which has futures bouncing back a bit. We are up right now 73 points. S p and nasdaq, i get it, cold comfort. We lost 760, were up 66 still we are in the green, at least at this hour were not seeing a sell followthrough in the markets. Heres what were coming off of yesterday. Every dow stock fell the average decline of a dow stock, 2. 7 . 12 of the dow 30 fell more than 3 the dow is now 6 off its july highs. The thing driving selling yesterday was that big drop in chinas currency below that key 71 level to the u. S. Dollar china responding overnight their central bank setting the currency mid point at a stronger level than many expected we are seeing this is key the yuan back above 71. Right now at 7. 03. En liunlike our u. S. Dollar, chn tries to control how much their currency swerves the next few days will be key. If china can press the biggest banks to support the currency, the markets here could stabilize. If china doesnt t could signal a broader poll sicy shift by the Chinese Government the costs to borrow should come down Global Investors are rushing into u. S. Government bonds, which despite what everybody thought have become one of the best performing Asset Classes of the year tenyear note at 1. 76 the upshot, if you dont trade bonds or currencies, mortgage rates, they are coming down and they should keep coming down if that number continues to come down there you go now we are watching the action around the world this morning. As always, in the worldwide leader in business new, we have full Team Coverage for you matt taylor is in singapore. Joumanna bercetche is in london. Matt, lets start with you and the asian market reaction. Hi, brian it was a rough day for asian markets. We saw markets across the board and down, but a number well and truly off the lows of the session. It was staggering. We had the yuan at a low, but then we saw the currency strengthen throughout the course of the day shanghai composite at its lowest level since february but off the lows of the session. We were down by 2 , 3 during the lows of the day. Japan was interesting today. 2 intraday improvement for the nikkei 225 at the close we were down about 0. 6 we also saw the currency there having a role, a weakening japanese yen as we saw money moving out of the currency, out of that safety trade helping to shore up equities. The markets ending down by just about 0. 6 the loser today was australia. Off almost 2. 5 . S banks held the Interest Rate steady at 1 the policy meeting we got today, it said it was willing to ease further if the australian economy needed more stimulus market didnt react well to that aussie market at the close down by 2. 44 curiously, the Australian Dollar went up despite the rba flagged further easing that was the picture in asia yes, we were weaker but well and truly off the lows of the day. Matt taylor, thank you very much lets get the pulse of europe. Joumanna bercetche, i know you come in as early as we do over there, i assume there were a lot of nerves after the United States, but like asia things have stabilized a bit. Thats it yes. So we came in this morning, a lot of nervousness and cautiousness after the price action in asian equities as things stabilized there, we started to see more green on the screenment behind menand behin almost all of these indices have improved we are trading firmer today, but again not having fully recovered from yesterdays losses. I want to point out the ftse 100, its the only index, the uk index, trading in the red. Down 0. 10 its down 5 for the month yesterday was the worst performing index it is not just about riskoff environment here the politics, thats something to watch the deal or nodeal brexit, thats the big question for the markets. I want to take you to the european sectors actually today were seeing a bounce back in all of the sectors that got impacted yesterday. Technology up 0. 7 yesterday we had chipmakers in europe getting hit today theyre rebounding household goods, so luxuries, here im talking about kering, lvmh, burberry, all of those names with exposure to the Chinese Consumer that got hit yesterday, today somewhat of a stabilization. Then media, an idiosyncratic thing going on here. Tencent is saying theyre buying a 10 stake in vivendi french and media company. Thats boosting that basket. Something to keep an eye on, especially in the light of u. S. china discussions sentiment is more positive today in europe. A lot of green on the screen. Maybe a big surprise glad to see it thank you very much. Also important to note, the markets are still having a pretty good year you have to keep that in mind. The nasdaq up about 15 , even with yesterdays drop. So lets get color and context into everything going on with rob morgan cio of fedi financial. Thank you for joining us im not trying to say yesterday didnt matter. It did it was scary, everything fell. The market internals were grim however its a drop inside of what has been a relatively strong market. How do you read it where do we go from here brian, i think you hit the nail on the head any time you have the worst day in equity markets in a year you have to maintain some perspective. You hit on a couple of things. This was probably the best first seven months for equity markets in the u. S. In some time we came off record highs from a week ago i ask myself has anything structurally changed here or is this just kind of taking some cream off the top because of the trade war event . I dont think anything has structurally changed Earnings Growth, some are projecting that it will accelerate in 2020 from a tepid earnings year this year. And essentially if you look at the jobs number that came out friday, the job Growth Continues to remain strong, which will be the underpinning there i think i still feel confident going forward. Ill push back a bit. I feel like its kids at the playground at recess, eventually one kid pushes the other kid now you have a problem i wonder if the structural change is that were seeing the trade war ratchet up a bit its not cooling off its heating up. You talked about the 71 ratio at the top of the show we hope that that holds. However however, it would be unfair to say theres not some cost to the chinese here in manipulating their currency its interesting its kind of like the policemen in casablanca saying im shocked theres gambling going on here theyve been currency manipulators for years they always devalue their currency so we buy more of their goods. Theres a cost to that by doing that the chinese are essentially eating our tariffs so that our buyers of their goods dont have to. If weak currencies were a panacea for everything, everybody would be weakening their currencies the chinese have to buy oil in u. S. Dollars so weakening the currency is not some kind of a great outcome its a big problem for them as well it is its a huge problem. In fact, because now, of course, were starting to see could there be some resolution to this trade war . I think the chinese need a deal far more than the u. S. Does. As you just pointed out, you know, where theyre hurt and purchases they have to make, the stock market has suffered more than ours. So, you know, is trump winning the trade war . I dont think i would go that far. But china is being hurt more by this than the u. S. Is. No structural change yet, but it feels like every time we get close to resolution, it heats up, it doesnt cool off. Rob morgan, thank you. Thanks. When we come back, strong words from chinas state media as the u. S. Designates china a currency manipulator, using that designation for the First Time Since the Clinton Administration well take you live to beijing with what theyre saying next. And stocks not the only sector getting hammered yesterday. Oil and oil names also taking it on the chin. How low can oil go the three key factors you need to watch when Worldwide Exchange comes back you should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. So, every day, we put our latest technology and unrivaled network to work. The United States Postal Service makes more ecommerce deliveries to homes than anyone else in the country. With sofi, get your credit cards right by consolidating your Credit Card Debt into one monthly payment. And get your Interest Rate right. So you can save big. Get a nofee personal loan up to 100k. Mno kidding. Rd. 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This as countrys central bank looks to strabli istabilize then after yesterdays big drop eunice yoon has more reporter thank you very much i want to take a moment to show you some of the days papers in the state papers today, the global times as well as the china daily, all have been trying to message to the chinese public that everything will be okay and the move in the markets is normal. The global times says the renminbi remains stable the very authoritative peoples daily had a couple of words for the Trump Administration and they were not as kind. They say the u. S. Is destroying International Order. The central bank slams the u. S. s decision to label china a currency manipulator they were defending the currency policy here in china and saying that the move was unilateral protectionist behavior which violates international rules. The bank also pointed out that china does not meet the u. S. s own criteria for currency manipulator. The u. S. Treasury department has three criteria, which china says they do not meet this after the Treasury Department designated china a currency manipulator Steve Mnuchin had said that at this point they would be consulting with the International Monetary fund as part of the process to eliminate the unfair competitive advantage of chinas actions the chinese had something to say about that as well the central bank said the imf believes that the Renminbi Exchange rate is in line with fundamentals theres been some level of confidence in the people here that throughout this process, at the end of the day, china will prove to be the winner now, you would think that this late effort currency manipulator level would raise tensions between the u. S. And china i spoke to somebody who closely consults with the chinese negotiating team he said that the prospects for the trade deal look dimmer but at the end of the day the negotiators and china still want to have a trade deal theres a lot of tough rhetoric, but in terms of action it will be moderate. A lot of rhetoric out there and it depends on the paper you read based on what you hear. Eunice yoon, thank you very much joining us now is miranda carr all right. The u. S. Calling china a currency manipulator, a valid point or more of a political move definitely a political move the chinese currency has been defended theyve been trying to keep it above 7 for basically all through the trade talks. So this is almost giving up defending the currency above 7 and letting it go where the Market Forces would take it. We think there will be longterm depreciation pressures if you let the currency go completely, then it would see a much bigger depreciation if they just stopped defending it at current levels labeling it a manipulator, its when they stop manipulating that it goes through 7. You think if theres manipulati manipulation, the manipulation is on the other side, theyre trying to keep it higher because the market wants to take it lower . Yeah. You have pressures on the currency you have lower trade surplus, lower inward investment. The only thing propping up money going into china at the moment is the Capital Market going into equities and bond markets. So the pboc has taken action to limit capital outflows, keep the currency stable. Its been signaling for months that maybe seven is not a big issue. It will push through this has been flagged for a number of months now theyre taking it below 7. The trade war hots up, theyll probably stabilize it where we are now just to make sure theres no more sort of market fallout. Yesterday on cnbc we had andrew kyle bass, a vocal china critic he said he thought if chinas currency was allowed to float no pegs or mid points, it would drop 30 to 40 . Where do you think it would end up if it floated freely . You would have, if they let all of the controls go, you would have a shock quite a large scale depreciation 30 , 40 has been talked about, but people talk about 10 , 15 would be where you would normalize it so keeping it steady, keeping it at this level is bizarrely manipulating it the other way rather than what theyre being accused of miranda carr, pleasure have you on interesting point of view, the manipulation may be on the other side thank you very much for joining us on deck, oil and Oil Stocks Hit badly again. Is this just the trade war or something larger well dig into an industry facing a triple threat. Plus President Trump keeping jay powells feet to the fire over fed action. Some very familiar fames coming to the feds defense an oped taking aim at trump that you have to hear next ahh. Your teeth hurt . Sensitivity. Gotta do something about it. New crest gum and sensitivity starts treating sensitivity immediately, at the gum line, for relief within days and wraps your teeth in sensitivity protection. Ohh. Your teeth . No, its brain freeze crest. Did you know that feeling sluggish or weighed down could be signs that your digestive system isnt working at its best . Taking metamucil every day can help. Metamucil supports your daily Digestive Health using a special plantbased fiber called psyllium. Psyllium works by forming a gel in your digestive system to trap and remove the waste that weighs you down. Metamucils gelling action also helps to lower cholesterol and slows sugar absorption to promote healthy blood sugar levels. So, start feeling lighter and more energetic by taking metamucil every day. Stock futures are k s ars ag a bit. The sellthrough yesterday, were not following through on the sell right now Energy Stocks were already down coming into yesterday. But they really tanked on monday on renewed trade war worries the s p oil and gas exploration, the xop, hitting the lowest level since early 2016 this as crude oil prices now sit 30 below their highs that were hit back in october. The big question now is how low can oil go there are three chief concerns in focus now in these markets. Number one, the u. S. Dollar strength the greenback touching the highest level against the yuan since 2010 the value of the dollar goes up, oil often goes down because oil globally is primarily priced in dollars. As the dollar gets stronger, you simply need fewer dollars to buy the same oil number two, global oversupply concerns just last month the International Energy agency published a report warning of another oversupplied market next year on top of that reports showing china and other nations have been taking in more iranian oil than prove yospreviously foreca. In many cases that oil is waiting in reserve and has not hit the market when it does, oil is likely to be more oversupplied and thirdly, fears ofa global slowdown investors are increasingly worried at the trade war and Natural Forces brexit, you name it. That may further slow down Global Growth cushing demand from the United States and china. Oil had its worst day in three years last week when President Trump announced 10 additional tariffs on china joining us more to talk about this is john kilduff i know currencies matter they matter with oil is the supply demand imbalance really the big issue here or is it currencies in china its really the three things. Its remarkable if you think about it that Oil Prices Continue to go down. Even in the face of spectacular efforts by saudi arabia. Opec production is at a multiyear low no one cares. Yep irans foreign minister is on the wires every day talking up, jawboning, threatening, undertaking actions, the country is, to upset the oil market and threaten supplies. Nothing. It is the prospect of the oversupply next year that the iea talked about and this Dollar Strength and the trade war, front and center oil has taken it the hardest of all the Asset Classes because of the fallout. Not just in china but across asia whats amazing f we ju, if wt focus on stocks, on almost every metric many of the oil names are trading on valuations lower than when oil was at 30 a barrel the market has given up on oil stocks less than 5 of the s p 500 lowest ever used to be 20 or something. The sector is looking uninvestable to me almost. On top of it, the permian players, they are hearing the footsteps of wall street in terms of wanting their pay day which they have not gotten in years. Its probably better for another segment, another day, but concho and whiting, to m midsized producing, they had less than expected well results. Its more stock specific, i know, but the point is there is all this its a whirlpool around oil. They cant get out of their own way. Recent earnings from exxon disappointment chevron, disappointment. The best play in the group is bp because thats the one with the lowest pe ratio, high dividend yield, and for now for now where do you see oil headed trading on 2020, a lot of concerns do you think it will continue to drop i think well head down to 50 a barrel all right, john bad news maybe for more Equity Investors who have been wiped out in oil and gas thanks for joining us. Outside of the big headlines, there is other stuff going on today lets look at the stock stories you need to know about air china suspending service between bay sieijing and honolut the end of the month the number of Chinese Tourists visiting the states fell for the first time in 15 years last year air china shares down 3 . Intercontinental hotels says profit rose 14 in the first half of the year but room revenue up just marginally its china related fewer business travelers from china and hong kong leading to demand drop in china. And vivendi is in talks to sell a 10 talk in Universal Music Group to tencent vivendi says the deal would give universal music a value of 33 billion. Universal music is the home to the likes of taylor swift and lady gaga. The s p suffering its worst day of the year falling 3 over the past six days alone. The s p 500 has given up 35 of the years gains but its a new day have we seen the worst of the trade war or just the beginning . Worldwide exchange is back after this yesterday we said if you dont like red, go back to re. It was down at 950 at one point, ended at down 767. Dow futures up right now about 100 points s p and nasdaq are in the green as well. On deck, trump labeling china a currency manipulator, but what does that mean is there any hope of a resolution before the election a lot of questions answers are ahead. Wild ride. What aho 24 hours for investors. Global stocks plunge the dow down 90 at o 950 at onet and then the u. S. Labels china a currency manipulator after hours. Futures are up 100, trying to recover, and were still four hours away from tuesdays opening bell its august 6, 2019. Youre watching Worldwide Exchange on cnbc. Welcome back its 5 35 in the morning it feels like 10 00 a. M. Already, we already had that much news. The dow drop yesterday, 767point drop the seventh worst point drop of all time stock futures right now, they are trying to thats not stock futures, thats yesterday. Theres the stock futures. We like this one better. Thats green dow futures, were not up 700, but were up 100 at least the selling pressure has not engaged and followed through yet. Dow futures, nasdaq and s p futures higher for some reason, if you were under a rock and missed what happened yesterday, heres a recap. Every single dow stock fell monday the average decline was 2. 7 drop 12 dow stocks fell more than 3 . Apple fell 5 yesterday. The dow is 6 off the july high. In less than a month weve fallen 6 . The thing driving selling yesterday was the big drop in chinas currency below that key 71 to the dollar mark china responding overnight their central bank trying to firm up their yuan setting a peg just above that. Thats where we are now. The u. S. china yuan rate, 7. 03 . As we learned yesterday, its the imaginary line theres 7. If this goes above that. Stocks may go down if this goes below that, its an inverse chart, stocks may firm up if you thought currencies were important, you are right so again, watch that 71 level if all these numbers, i know, bond numbers, whatever 71 on the chinese yuan as we learned yesterday, very important. If china can press its biggest banks to support the yuan, the markets could stabilize. If china doesnt or cant, it could signal a broader policy shift by the Chinese Government and perhaps the start of global currency war the president very concerned about the u. S. Dollar as well. Chinas efforts to stabilize that currency overnight helping asian markets recover. The asian markets begin trading 8 00 p. M. , 9 00 p. M. Our time. So all of us at cnbc were looking at how those markets opened when they opened they fell 2 , 3 once china ordered that currency peg at 6. 96, above 71, things stabilized some buyers returned to the markets. The asian markets were down, but japan dropped 0. 6 , after being down 3 at one point shanghai got hit south korea got hit. But these numbers, not that bad given what we saw when the markets opened up. The european markets are following our futures. Scary open there as well, but mostly green on the screen not soaring but stabilizing. This trade war quickly turning in to a currency war the u. S. Treasury department after the close last night naming china a currency manipulator. That is something that we have not seen or heard frin 25 years. But what does it mean . Is it valid . Kayla tausche has the story. Its something treasury refrained from doing for 2 1 2 years, but secretary Steve Mnuchin says hes making this declaration under the auspices of President Trump that china is using its currency to gain an unfair competitive advantage a Statement Last night said treasury will work with the International Monetary fund to eliminate that advantage but first the u. S. Must get the imf to agree kelly ann counselor defended the mon move to eamon javers last night. This is a reaction to what china did. Currency being designated a currency manipulator, thats in direct response to their actions. Without naming mondays yuan slide in particular, mnuchin said china is renegotiaging on g20 agreements Chinas Ministry of commerce confirms it wont buy u. S. Agricultural products and may add charges to products it bought in recent days. But they open the two leaders agreements can be executed economic aides are working to understand how to response to this quickly developing situation. If we could print or show that email chain among all of us last night going through currency manipulator and what that entails, but what can we expect from the next round of negotiations of trade with this in the books given how much could happen in a 24hour period, the next three weeks will feel like an eternity perhaps the next several months are key here some are not sure how the story ends President Trump sees his window for a deal closing in the next few months he wants to ramp up pressure on china for a deal, and to craft a narrative of a win on trade with china before the 2020 election china says domestic politics will preclude president xi from making a deal. So its unclear to see where things go from here. Theres still a question on whether the chinese delegation even comes in september if tensions are this high. Lets bring in jane foley head of fx strategy, thats Foreign Exchange at rabo bank. Nothing to discuss in your world. Heres the thing is the currency manipulator label valid or do you believe it is purely a political move by the Trump Administration to increase pressure on china i think at this point its probably mostly a political maneuver if we ask the International Monetary fund, they deem china did not tick enough boxes to be a manipulator at this stage. Ahead of the u. S. Election theres a lot of reason why trump may want to take a tough stance against china that said, if we look more deeply what we see in china is a country which has seen a lot of pressure, economically weve seen a slowing china this year weve also seen an economy in china where theres been monetary stimulus if we go back to our textbooks, that would suggest that you would naturally see a weakening of the exchange rates. Theres a big debate here to be said, has china not allowed its currency to deprecate . Theres been no devaluation . I would argue there is the grounds for just a depreciation here is it possible china is, jane, a currency manipulator but theyre manipulating on the other side theyre keeping their currency higher because it appears the market would like to take it lower . Thats the case thats been the case for years the peopling bank of china, it does intervene to create some levels of instability around its base rate. So we do get the intervention from the pboc every single day if china would allow its currency to be a freely froeilog exchange rate, which its not, that currency would be weaker. Yes, they do intervene every day and they intervene to keep it stronger where would it be if they were to step away and allow capital outflows to come out, youre looking at who knows, pin the tail on the donkey, 9, 10 . Certainly way above the sorts of levels that we are considering today. 7 is a psychologically important level, but this country is supporting its currency right now. We had kyle bass on the other day. He suggested the chinese currency could fall 30 , 40 if it were out of government hands. It sounds like you agree with that i think many currency strategists really would the pressure would be for capital to float out of china. Most would agree with that its difficult to know where it would fall this would be an unprecedented situation. Certainly we would be looking at a significant move after all, if china could have a freely floated exchange raet rite n rate right now, it would china does not want its currency to fall through the floor. Yes, you know, you can take trumps argument and say that would be great for exports, but a lot of companies in china have dollar denominated debt. Theres reasons china doesnt want inflation as well so it doesnt want that to happen but certainly theres an argument to be made that a weakening economy deserves or needs a weakening exchange rate. Thats what were viewing. That easternny theirony there manipulation is on the upside not the down side. Thank you very much. Coming up, President Trump turning up the pressure on the Federal Reserve as the trade war takes another turn now some familiar names are coming to Jerome Powells defense. Its an oped by every living member of the fed and you have to hear it thats coming up next. Fun fact 1 in 4 of us millennials have debt we might die with. And most of that debt is actually from credit cards. Its just not right. But with sofi, you can get your credit cards right by consolidating your Credit Card Debt into one monthly payment. You can get your Interest Rate right by locking in a fixed low rate today. And you can get your money right. With sofi. Check your rate in 2 minutes or less. Get a nofee personal loan up to 100k. You mighyour joints. Ng for your heart. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally discovered in jellyfish, prevagen has been shown in Clinical Trials to improve shortterm memory. Prevagen. Healthier brain. Better life. Theres a must read in the wall street journal. The last four fed chairs teaming up to write an oped titled America Needs an independent fed. Paul volcker, alan greenspan, they write we are united in the conviction nthat the fed and its chair must be permitted to act independently and free of the shortterm political pressures and without the threat of removal and demotion of fed leaders for political reasons. I know we have some investment and investable ideas from you, i want to get to those but also four fed chairs teaming up to go after the Trump Administration in a hit there what are your thoughts on that op oped . This is a big deal. This is enough of the enough of the criticism. Think of the former fed chairs that came out and spoke and signed this article. These are the four horsemen. These are the four horsemen of Central Banks who have come in defense of Jerome Powell you may not agree with what he did with the recent cut, but hes not lashed back or retaliated to any comments i think all this criticism put forth towards fed powell and an interesting moment in time, i think its unwarranted therefore he has his back being covered by former chairs the whole article was talking about we dont need to be checked by the president of the United States. We need to be checked by congress the fed chair should and only be checked by congress. Lets talk about this market yesterday. A 767 point drop were off the lows were down 950 at one point. Volatility spiking the vix is not at 50 what do you make of yesterdays action, the start of something worrisome or a semi healthy correction weve become so conditioned as to what is a normal pullback. We talk a lot about the velocity of moves we saw velocity in the tenyear note the movement we saw, the pressure, the selling of equities, it was normal. It was taken in stride yes, we saw a technical trade. As soon as that 50day moving average was violated, we broke down to the 200day moving average. This currency war, weve seen the gloves be taken off. Now theres full blown jabs and roundhouses being thrown this is part of the negotiation this is healthy. It doesnt feel healthy when you see apple down 5 , but this is healthy, this is part of the process which gets us closer to a resolution i know you still like the xlu and tft, those are fancy etfs for utilities and u. S. Treasury bonds. Youre hiding in a bunker, jeff. Is that the best place for viewers money . Ever since we saw vol tellity come out in q4 2018, xlu and tf it was highlighted yes. This is a time to own it not just because of the moving parts of the fed but because of how the tenyear note lined up across the universe. When you see that german bund, we have 13 million, 14 million in negative yield. I do Like Technology weve owned tech sectors, if you look at the xlk, theres reason to add here if you look at microsoft or lets look at xlk, the broad swath technology etf that had a rough day yesterday, were up nearly 28 yeartodate i think you have to interpret and embrace the noise but remember the economy is in great shape. Earnings season. Are we still in earnings season . Were having some beats. Theres reason to be positive. Theres so much emotion. You have to find a way to mute it it is because all the political headlines are trade war, currency war, the gloves are off. Jeff, thank you very much. On deck, dow futures are recovering, up 126 points right now. Have we got the beginning of the trade fight or the beginning of a currency war were back with analysis and ideas next its show time. Lets cowboy up exhilarating speed. Woo precision control. Woo maximum reliability. Access denied. [ repeats ] access denied. If its not xfinity xfi, its not good enough. For wifi with super powers, get xfinity xfi. And go see, fast furious presents, hobbs shaw. Now playing. Dow futures up 115 points ig right now. Lets dig in to big single stock stories. Pershing square exited its stakes in adp and United Technologies the firm said it built a new position in a company it will disclose at a later date marriotts Second Quarter earnings were in line with estimates but the chain cutting its fullyear outlook for rev participant. Revenue per available room the stock down 2. 3 . And just this morning, moments ago, Morgan Stanley upgrading ford to overweight its on the back of a significant increase in the firms earnings estimates for ford Morgan Stanley says it is encouraged by fords restructuring move and more focused product strategy theyre raising their price target on ford to 12. All right. Lets get back to the markets and your money stock futures are recovering a bit. Dow futures are up 114 points. Were joined by michael tyler, cio of Eastern Bank Wealth Management michael, i guess the only question that matters now is this, yesterday the internals were terrible. Market fell 767 points bonds, bitcoin and gold rallied. Oneday wonder or the start of something a little more worrisome . How about neither or that the market has some potential to continue to weaken. This is really just shortterm moves. One of the early commentators suggested markets go up and down were only down 5 from the high, i dont see a disaster on hand if you look at Earnings Growth slowing down, trade war breaking out, theres risk in the markets now that there went a few weeks ago. Right after this in our rbi well show viewers these kinds of moves are not that abnormal weve been doing this for a long time we know market declines are healthy. I think why people got spooked and its different this time is we not only have a trade war but yesterday i guess the specter of a currency war theres no easy exit from that once you get started thats why theres more risk the articles im reading about how many people we sent to china for the last round of talks, how serious the negotiationers aror. It sounds like the gloves are off as opposed to normal daytoday negotiating thats more worrisome to markets. Thats why i think equities are at some risk and were flat earnings this year, we had a lot of beats, that just means were not down the Earnings Growth is not fantastic. Markets flat for the rest of the year i think flat is good. We have some tough earnings comparisons. If we can get out of the year around 3,000 or higher than that for the s p. Well be in good shape michael tyler, appreciate it. Thank you very much. As we noted, its time for the morning rbi. With mondays big drop the s p 500 is down 5 from its july highs. But how worried do you have to be about the drop . You heard michael say dont, its kind of normal. That point size was scary. We dont see a lot of drops like this sixth biggest point drop of all time as our friends note, this is scary but not that rare. This is the second 5 pullback of the year and the 31st of this bull market. Going back to 2009, these are the number of 5 declines in the market with yesterday we had two. Last year we had five market declines of 5 or more we didnt have any in 2017, 2011 we had seven not that unusual just something to Pay Attention to well see you tomorrow on Worldwide Exchange. Squawk box begins right now. From monday meltdown to maybe tuesday turnaround u. S. Stock futures are pointing to a higher open a day after china escalated the trade war and the u. S. Labeling china a currency manipulator china saying the u. S. Is deliberately putting International Order in disarray. And how the market turmoil could complicate the picture for the Federal Reserve. We have that story and the stories that matter most to your money straight ahead its tuesday, august 6, 2019 squawk box begins right now. Live from new york where business never sleeps, this is squawk box. Good morning welcome to squawk box on cnbc. Were live at the Nasdaq Market site im melissa lee along with Andrew Ross Sorkin joe and becky are off. We have two guest hosts sitting in tom farley current chairman and ceo of fire point and we have shark tanks kevin oleary the dow coming off a 767 point drop yesterday it was the seventh worth point drop of all time last night President Trumps Administration Responded with the treasury departmen
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