Job. Thats a big if, frankly the fed should be cutting. I would say they should say at a minimum 100 basis points. Over a period of time. Not at one time but over a period of time well, im not talking about doing anything at this moment, but indexing is something that a lot of people have liked for a long time. And its something that would be very easy to do. A lot of people have been talking about indexing for many years. And its something that i am certainly thinking about i can say a majority of people they like indexing its something im thinking about. Payroll taxes ive been thinking about payroll taxes for a long time whether or not we do it now or not is its not being done because of recession were legitimately, if we had a cut in Interest Rates by the fed, if they would do their job properly and do a meaningful cut, because they raised toovz, you would see growth like youve never seen in this country if you go from the election, the great november 8th day, if you go from november 9th to present, you are talking about almost a 60 increase in the stock market unemployment numbers that are lowest in history. And overall almost the lowest ever in the history of our country. I think it was 1969 and were set to surpass that number our country is doing very well when i spoke to the president , we were just walking in and he said congratulations on the Great Success of your economy and your country i appreciated that but our country is looking very well. Its something well talk about. It was the g8 for a long time and now its the g7. A lot of time we talk about russia were talking about russia because ive gone to numerous g7 meetings, and i guess president obama because putin outsmarted him, president obama thought it wasnt a good thing to have russia in. So he wanted russia out. I think its more appropriate to have russia in it should be the g8. A lot of things we talk about have to do with russia i could see it being the g8 again. If somebody would make that motion, i would be disposed to think about it favorably as you know, for most of the time, it was the g8 and included russia president obama didnt want russia in because he got outsmarted well, thats not the way it really should work [ inaudible question ] yeah. [ inaudible question ] a lot of time on it we spent a lot of time discussing it already. Our countries have been discussing it and were going to were taking it up today in an important meeting after this do you like the idea its something were thinking about. Reporter has the white house contacted m contacted maduro regime . Were talking to various representatives of venezuela were helping as much as we can. Were staying out of it but were helping it it needs a lot of help its an incredible tribute to something bad happening. And something bad is socialism its amazing because 15 years ago, it was one of the wealthiest countries and now one of the poorest it has oil reserves, it has a lot of things going but its a sad thing what happened. They dont have water or food. Were helping a lot. Were talking to the representatives at Different Levels of venezuela, yes i dont want to say who but were talking at a high level. A deal with Boris Johnson i spoke with Boris Johnson, i think hes going to be a great Prime Minister i think hell do a fantastic job. Ive known him a lot of people know we have a good relationship. I think hell be far superior. Hell do something that will be a very i think hes going to be important for the uk. I think hes going to be very important. Dealing with the European Union, i hate to say this to you, but dealing with the European Union is difficult they drive a hard bargain. Theyre represented by jean claude who is is a friend of mine but hes a tough man. A great negotiator we have all the cards in this country. All we have to do is tax their cars and they would give us anything we wanted because they sent millions of mercedes over they send millions of bmws over. But were talking to the European Union were going it see if we can work something out i will say this, dealing with the uk, they have not treated the uk very well thats a very tough bargain theyre striving driving i think the uk has the right man in charge now. The right person in charge in the form of boris. Reporter what is your current thinking on pulling out well were talking to the government of afghanistan. Were talking to the taliban were talking to others. Were looking at Different Things weve been there for 18 years. Its ridiculous. We have taken it down a notch. Were at about 13,000 people right now. 13,000 americans nato has some troops there, too, by the way and were having good discussions. Well see what happens well see what happens its 18 years. When im really fighting, were almost more of a police force over there its been so many years. But were like a police force. Were not supposed to be a police force as ive said, and ill say it any number of times that this is not using nuclear. We could win that war in a week, if we wanted to fight it but im not looking to kill 10 Million People im not looking to kill 10 million afghans because thats what would have to happen. Im not looking to do that but its a war that has been going on for almost 19 years now. Frankly, its ridiculous, but with that being said, its a dangerous place and we have to always keep an eye on it i like to look at various alternatives i dont know how the plan will be acceptable to me, maybe its not going to be acceptable to them but were talking. We have good talks going well see what happens its more than other president s have done. We have brought it down. Were bringing some of our troops back. But we have to have a presence, yes. Could you clarify your position on enhanced background checks after el paso and dayton, you seem to be in fully support of enhanced measures. When you were leaving bedminster you seemed to suggest we have strong background laws which a lot of people read youre dialing back. Im not doing it to be cute we have very strong background checks now, but we have sort of missing areas. Areas that dont complete the whole circle were looking at Different Things i have to tell you its a mental problem and ive said it a hundred times. Its not the gun that pulls the trigger. Its the person that pulls the trigger. These are sick people and its also that kind of a problem. Were looking at mental institutions, which we used to have, like, for example, where i come from in new york. They closed up almost all of their mental institutions. There are many of them those people went on to the streets and did it for budgetary reasons. Well, new york is not unique theyve done it in many places reporter have you supported either of the house bills . Im not going to get into that, but were in meaningful discussions with the democrats and i think the republicans are unified. Were strong in our Second Amendment, the democrats are not strong at all in the Second Amendment. I would say theyre weak on the Second Amendment and we have to be careful of that the democrats would, i believe, i think they would give up the Second Amendment and the people that a lot of people that put me where i am are strong believers in the Second Amendment and i am, also we have to be careful about that you know, they call it the slippery slope and all of a sudden everything gets taken away. Were not going to let that happen [ inaudible question ] i hope so we have good results and i want so share those with President Trump. What is your question reporter i was asking [ inaudible question ] so nice to have a question about romania. [ inaudible question ] i think this is a man that can solve the corruption problem in romania hes made big strides, from what i heard. I havent been there recently. I think hes the man that can solve the corruption problem theres a number of terrific countries like romania but they have a tremendous corruption problem. And ive heard you made tremendous progress. We did, yeah. Reporter do you support cutting were looking at and were looking at it in different ways and talking to republicans and democrats about it and certain things we can say but certain things it probably could be, you know, a penny wise maybe its a penny wise. Well see. Were looking at it. We have some things that are on the table, very much well let you know over the next, probably, sooner than a week reporter mr. President , youre [ inaudible question ] i just got an award and endorsement yesterday from the exact group. The group you saw that. They gave me the endorsement yesterday and i was very honored to log cabin but honored to receive it ive done very well with that community. Some of my biggest supporters are of that community, and i think they i talked to them a lot about it i think ive done very well with that community as you know, peter thatiel are with me all the way. I just got a big endorsement from the log cabin group, yeah [ inaudible question ] let me tell you something number one, were doing very well somebody had to take china off you know, i read and i see so much and i read so much and ill see these economists saying, oh, give up. Give up on china give up. China has been ripping this country off for 25 years for longer than that, its about time whether its good for our country or bad for our country, short term longterm its imperative that somebody does this because our country cannot continue to pay china 500 billion a year because stupid people are running it. So i dont mind this question. Weather its good or bad short term is irrelevant we have to solve the problem with china because theyre taking out 500 billion a year plus it doesnt include intellectual property theft and other things. Also, national security. So i am doing this, whether its good or bad for your statement about will we fall into a recession for two months okay the fact is, somebody had to take china on. My life would be easier if i didnt take china on i like doing it because i have to do it were getting great results. China had the worst year theyve had in 27 years. I dont that to happen but it puts us in a good negotiating position, doesnt it china wants to make a deal, and thats good. But they have to make a deal that is fair to us it cant be a deal that is not fair to us you should be happy im fighting this and fighting this battle. Because somebody had to do it. We couldnt let this go. I dont thinks sustainable to let go on what was happening they were stealing all of our intellectual property, ideas, the theft was incredible they call it intellectual property theft and they value it at 300 billion a year who knows how they value it . I know how they value dollars. I dont know how to value intellectual property theft but they have experts where they say its at least 300 billion a year obama should have done bush should have done it clinton should have done it. They all should have done it nobody did it. Im doing it so what do you say oh, my trade deals of course my trade deals arent causing a problem this is something that had to be done the only difference is im doing it i could be sitting here right now with a stock market that would be up 10,000 points higher if i didnt want to do it. But i think we have no choice but to do it a lot of people that really know, people that love our country, theyre saying thank you very much for taking it on and were winning. Because theyre having the worst year theyve had in decades. And its only going to get worse. China lost 2 million jobs in the last month and a half. Because theyre moving the people the companies are moving to nontariffed countries. Theyve lost over 2 million jobs in a short period of time. Theyre going to lose a lot more jobs if i didnt help certain companies, American Companies like apple, for a short period of time, i may help them only they do what they have to do which is probably move from china. This would be short term if i didnt help them, they would be, i mean, they would be they would have a big problem. Here is the thing. Somebody had to take on what china was doing to the United States economically. Were winning big. I took it on and it should have been done by previous president s but i took it on. And im happy to do it because it had to be done. And the smart people say thank you very much. And the dumb people have no idea then you have the political people and they go with the wind but they all know. Even senator schumer said trump is doing a great job with china. I couldnt believe that schumer thinks im doing the right thing. Hes doing the right thing by saying it. He knows china was a big economic threat and they were taking all of that money they were making from us and they were building planes and ships and lots of other things we cant let that happen reporter theres a new study out of australia that suggested the current Chinese Military posture in South China Sea and the Pacific Region could wipe out most u. S. Bases within a number of hours. Is that something that keeps you up at night . Well, nothing keeps me up at night. I could tell you, we could wipe out anything we want we have the most powerful in the world and when i came in two and a half years, we were in a bad position now were in a strong position we have 700 billion, 716 billion and 738 billion we have the Strongest Military in the world now were getting close to finishing that weve rebuilt the military right now theres nobody that is even close to us militarily. Not even close zblb. Reporter it doesnt concern you . No. They would pay a price they wouldnt want to pay [ inaudible question ] somebody that is being put up to russia. Yeah. Very respected. Well, i know mike pompeo likes it very much and hes very respected. He could be. Theyre doing that. Romania is doing that. The taliban is looking to the u. S. If the u. S. Were to draw down and the taliban went on the offensive, would the u. S. Come and well the taliban does not respect the government the afghan government. They have no respect for the afghan government. I understand that and i know that and they havent been exactly getting a long for a long period of time. Weve been a peace keeper there in a way for 19 years. At a certain point, you have to say thats long enough i see young men that step on a bomb and they lose their legs and arms and in some case they lose both and their face on top of it and theyre living again, we could win that but, you know, i dont want to do what we would have to do to win it i think most people agree with me on that right now were doing negotiating with the government and were negotiating with the taliban and well see what happens from it. What is coming from it i will say this, the taliban would like to stop fighting us they would like to stop fighting us theyve lost a lot but well see what happens remember, its a tough place the soviet union became russia because of afghanistan thats what happened very simple. They became russia because of afghanistan. Somebody would say, oh, well, would they go in if they want to let them i think they tried that before, however. It didnt work out too well. Nobody can be trusted this world, i think nobody can be trusted reporter could we be back to where we were pre9 11 with the taliban . We have to watch. Well have intelligence and somebody there but you can say that about a lot of places, john. It does seem to be the Harvard University of Tropical Storm terrorism. Well always have somebody there. If the taliban were really right in what theyre saying, they would stop that from happening they could stop that from happening very easily well, theyve been having these talks for hundreds of years. This is kashmir and kashmir is a complicated place. You have the hindus and the muslims and i wouldnt say they get along so great thats what you have right now you have millions of people that want to be ruled by others and maybe on both sides. And you have two countries that havent gotten along well for a long time. Frankly, its a explosive situation. I spoke toPrime Minister cahn. I spoke with yesterday, also, Prime Minister modi. Great people great friends of mine. Theyre great people and they love their countries theyre in a tough situation kashmir is a very tough situation. And, you know, were talking about this has been going on for decades and decades. Shooting i dont mean shooting like shooting a rifle im talking about major shooting of heavy arms. And its been going on for a long period of time, but i get along well with both of them, as you know Prime Minister cahn was here just recently. I was with im going to be with Prime Minister modi ill be with him over the weekend in france. So, you know, i think were helping the situation, but theres tremendous problems between those two countries, as you know and i will do the best i can to mediate or do something. Great relationship with both of them theyre not exactly friends at this moment. Complicated situation. A lot has to do with religion. Religion is a complicated subject. Reporter said that the United States should rethink its policy of aid toward israel after she and congresswoman denied entry congressman talib allowed to come in but decided not to should there be any change to israel no. You should see the horrible things that lean said about israel aocplus 3. Thats what i call it. And you should see the things that the four of them have said about israel over the last couple of years. I mean, omar is a disaster for jewish people. I cant imagine if she has any jewish people in her district that could possibly vote for her. But what omar has said what talib has said. And i noticed yesterday for the first time, talib with the tears. All of a sudden she starts with tears. Tears. I dont buy it i dont buy it i dont buy it for a second. Because ive seen her in a vicious mood and Campaign Rallies. My Campaign Rallies before she was a congresswoman. I said who is that and i saw a woman that was violent and vicious and out of control. And all of a sudden i see this person who is crying because she cant see her grandmother. She could see her grandmother. They gave her permission to see her grandmother but she grand standing and didnt want to do it thats a decision of israel. A lot of people are saying it was my decision. Thats a decision of israel. They can let them in, if they want i dont think they want to when you read the things theyve said about israel. If you look at their itinerary before they found out. It was all going to be a propaganda toward israel i dont blame israel for doing what they did. I having nothing to do with it i dont blame them i think it would have been bad to let them in including the four im talking about all four but these two. Omar and talib and i think it would be a bad thing for israel but israel has to do what they want to do but i would not cut off aid to israel. And i cant even believe that were having this conversation five years ago, the concept of even talking about this, even three years ago, of cutting off aid to israel because of two people that hate israel and hate jewish people. I cant believe were having this conversation. Where is the Democratic Party gone where have they gone where theyre defending these two people over the state of israel . I think any jewish people that vote for a democrat, i think it shows a total lack of knowledge or great disloyalty. Thank you very much. President trump taking questions on a wide range of issues there in the white house. Hes sitting by the president of romania talking about the economy, about china welcome to closing bell. Im sara eisen the president said the u. S. Is far from a recession but the fed should be proactive and cut Interest Rates and saying stock market could be higher if he wasnt waging this war with china but someone got to do it a pretty strong defense, actually, going after them for intellectual property and going after them for bad former behavior even though it may be causing this. Yeah. And saying the economy is doing fantastically, he said even despite whatever head winds from the trade war lets bring in ayman jabbers for a little more color on what was a wide ranging conversation there. Yeah. Reporter i think you guys are exactly right to spotlight this question of the president s response on the china trade deal i thought it was emotional i mean, the president was determined in his language and mocked the idea of his critics who suggest you might have a twomonth recession as a result of this. Minimizing the idea there are negative economic consequences here as the possibility of a two month recession and suggesting hes willing to tolerate that in order to get at what he views is an absolute priority for his administration the president , i think, hammered home just how important this issue is to him with the emotional response that we saw him give and the issue of the payroll tax cut, you know, the Washington Post reported this yesterday. The white house responded through smacking that down saying its not something that is under consideration at this time well, it turns out the words at this time were doing a lot of work in the denial the president here suggesting the payroll tax is something hes looking at. Something he would like to perhaps move forward on. I asked the white house official about the discrepancy between the white houses denial yesterday and the president s comments here on tape. The white house official saying theres a difference between wanting to implement something and considering it and thats why they denied it yesterday. And i said but it looks like, you know, the president really likes this idea. The white house official telling me the president likes a lot of ideas. So thats where we are following thebouncing ball on the payrol tax cut. Another idea that came up eamon. He would like to reduce Capital Gains taxes. Reporter i know there was a meeting yesterday with larry kudlow talking to the president and they discussed a number of tax cut ideas. That seems to be one of them but the question is, the president there asserting it seemed to me that we have to go back and listen to the tape. It seemed the president was asserting he could index Capital Gains unilaterally i have to figure out if thats the case it seems like almost all tax legislation has to come up the hill it doesnt seem like he doesnt have any chance of getting anything done in an Election Year i dont know where the idea is coming from but theyre discussing a number of tax cutting ideas behind the scenes and looking for things that the president can do unilaterally, if they can. They wont be able to work with democrats on the hill. Yeah. Unilaterally and proactively you know, if you have the premise the economy is okay now, looking to forestall any weakness down the road thank you. Well talk to you soon for more on this, well bring in peter from the Blakely Advisory Group and neil from renaissance. We also have steve here from Stewart Franklin neil, well start with you the president s comments come into this very thriving debate about whether were on the crest of a recession obviously the bond market is throwing hints in that direction but the current data in the usa probably not yet how do you come down well, i think if you look at the economic data, i think the near term odds of recession are low. Six, nine, 12 months out, it gets more difficult the further out you go but, you know, typically you dont see new home sales rising 15 a year before a recession. You dont see refinancing activity surging a classic recession indicator, in my view, is looking at aggregate weekly payroll thats basically the sum product of jobs, hours, and earnings against headline inflation and we know that headline inflation is slowing basically below 2 all year and the aggregate income series is running about 4. 5 it means a reasonable baseline for Consumer Spending over the next year is around 2. 5 thats even before you talk about the increased cash flow from refinancing and the fact the savings rate is el evaluated. So as i mentioned, the Housing Market is picking up and thats going to provide some follow through into, you know, into construction activity. I mean, i remember talking with sara a few minutes ago about cap x as a point of fact as we deal in the fact world here capital goods orders up about 6. 5 so far this year. This cap x is falling off a cliff. Thats what the fed chairman is telling us. Is there a reason . Hes saying that could happen but if you want to talk about aggregate investment, look at something more than equipment and boeing orders, sara. Inventories are quite we had pretty strong private domestic demand in the Second Quarter so as i mentioned, if you look at classic leadtype indicators we look at, forget the bond market for a moment. It doesnt really point to a recession imminent, at least this year. All right we got to get another side in here peter joins us to push back on all of that. Including our make up chair cap x debate well, since world war ii, about 60 of the recessions Consumer Spending was positive you dont need a decline in that in order to have one we can argue the manufacturing side, the trade side is already in or around a recession certainly globally and possible in the u. S then that begs the question of what is the consumer do from here this is an evolving situation. You look at the july payroll number in manufacturing, hours worked, et. Cetera thats the first sign that employers are responding to the slow down by limiting worker hours. Now were beginning to see that spilling over into the Services Side the Services Index at three year low. Take transportation, for example, transportation is slowing because manufacturers are making less goods. Thats the first sign its beginning to show up on the Services Side. Where it goes from here on the Services Side, in terms of hiring and hours worked, were going to have to see but confident these tariffs dont come off if on december 15th we get all of chinese imports being tariffed at the full rate, then that will tip us over into a recession. One last thing, i always argue that in the assetpriced dependent economy were in, where the stock market goes from here could be the deciding factor when we go into recession. Because after the Fourth Quarter stocks, retail sales in the First Quarter was pretty pumped. If you get a sharp decline in the stock market, that will tip over the consumer and send us into recession, if the stock market does not immediately have us rebound and one more thing, i dont expect the fed rate cuts to help us in any way to cushion the blow from weakness overseas and tariffled weakness in manufacturing. Steve, theres a lot of room between the economys firing on all sicylinders and were in a recession. A 2 economy, weve had it for awhile the market trying to figure out which way it tips. To take both sides, it sounded like the consumer is in good shape it sounds like the housing sector is ramping back up again. And to peters point, you can have a Manufacturing Industrial recession and the consumer can be okay. Which we had in 2015 and 2016. If the consumer is still okay, here is the problem, you cant have a recession were going to be leading into a recession because when you just come out of a recession, youre leading into another recession but most of the stock markets gains or 10 of them, can be before the recession takes place. If the consumer is okay, employment data, or unemployment data is tame, you probably stay. In the market. In the market you can have the volatility weve seen you can see, to peters point, also, the market can be pushing back and forth, but thats on trade. That is on the rates discussion. And i agree with the president if the trade discussion wasnt on the forefront, the market would be dramatically higher. He said 10,000 points. Well, the president likes to throw out points and a lot of us talking heads like to throw out points if we fact check us, were probably all wrong, a certain amount of time i dont know how many. You cant prove the counter factual either way it doesnt matter. He said the market is up 60 since the election dow up 43. And Interest Rates are yeah. And you dont know where he started. It could have been before the election it could have been the night of the election it could have been the dip prior to it. Peter, here is my question of someone who thinks were going into recession do you think the fed can prevent it, if they take these kind of proactive measures of the president wants, the market seems to be craving, and that the fed is already started doing, essentially cutting and stopping their tightening well, the reason i dont think it will help is because the cost of money is not a bind constraint on anything if youre looking to buy a house, the bond market eased policy by a hundred basis points its only helped refies. New home sales and existing home sales are up modestly. You would think it would have been gotten more of a kick on the corporate side, well, net debt to ebb data ratios are near record highs so lowering the cost of country is not necessarily going to encourage corporations to lever more peter, what happens if the cost of capital were in a Global Economy now a global market. If the rest of the world is racing toward zero, you kind of cant stay where you are now what does that do . Its sort of akin to no inflation because were in a Global Economy how can you stick with rates here if the rest of the world is lowering the ecob have destroyed their Banking System it will not necessarily generate faster Economic Growth if you kill the profitnability in the banks. I argue well be better off by not going down that path and having a patz of our own that has positive Interest Rates on a nominal basis and not just go back to zero because its the thing to do and its something weve done in the past we were at zero for seven years. We had multiple rounds of qe and the economy barely growth north of 2 . So lowering rates doesnt equate to a faster economic story as weve seen clear evidence of that. You take the other side of that, neil well, i think i would agree that the fed is, you know, sort of the one institution that has the most pressure on it to do something and they are far, you know, relatively weak ammunition i think the attention needs to be put on the fiscal and transagain of the germans. If you look at europe, you know, the looser fiscal policy is in the interest of germany because they have a much weaker economy now. And thats also the interest of the whole of europe. Again, i mean, if were looking at the data as it stands at the moment, and even projecting out a few months, i would say that the risk of recession is low i agree that if we went full bore on the tariffs, that would be very bad going into 2020 but, you know, its still very much in the realm of forecasting. What about the idea the fed can steepen the yield curve again and ward it off . Typically from a recession, sara, you see a bear flattening of the yield curve right now you have a bull flattening if its about the yield curve, the fed can easily undo this in the short run. The fed cant do anything about the longer run Interest Rates. Why the rates are coming down in the long run, but if its about the yu the yield curve, the fed can do that. Theyre going to try. Theyre going to try neil and peter, thank you very much steve, stick around for a little bit. We have about 21 minutes left before the bell here is where we stand the s p 500 down a little more than half a the dow down 97. Low for the day about 123. Nasdaq down about. 4 and the russell down half a percent. Up next, the lastchance trade with steve Peter Navarro praising the former toys r us ceo. Im going to recommend that your viewers find a guy named jerry storch who was on tv today on a financial lose network who gave, i think, the most elegant and eloquent view of why these tariffs wont be passed on to consumers. We did track him down and next hour jerry storch will join us live. To talk about tariffs, react to the comments from navarro and give us his latest thoughts on longel w csi blill be right back do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. 18 minutes until the close slight declines here the dow down 100 shares of medtronic higher seeing higher demand for the minimally invazive therapies business raising the full year profit forecast the stock up 3 . Shares of sarepta plunging today. The fda citing safety concern including the risk of infection. So the stock is hurting today. Down 16. 5 several big retailers are reporting earnings today discussing how tariffs are impacting their business Courtney Reagan has all the details. Hi. Hi. Home depot estimates the total tariff exposure around 2 billion. The cfo told me she thinks it could end up being lower than that she told me its manageable for our scale and size and merchants are merchants are negotiating with vendors, finding other ways to mitigate higher costs, moving production, and making careful decisions on which items we increase prices on home depot is worried about the Broader Consumer impact. Factoring it into the lower Sales Forecast what happens to consumer more broadly with tariffs if consumers slow down spending, it could have an impact on gdp. Koels has been working on similar mitigation strategies. The cfo said it would be sound and surgical on decisions around the pricing to protect the customer and market share. All of that factored into coals outlook. Tjx the majority of the goods are excess inventory it hasnt committed to most of its Fourth Quarter goods and the ceo said short term we probably get a little advantage, strangely enough in this situation. Probably washes out over the midterm, and i would say longterm we could see benefit again. Possibly back over to you guys. Courtney, thank you the market kind of give the benefit of the doubt to home depot and tjx. About 15 minutes to go. A good lead in. It sort of sounded bullish, to me, on the Home Builders or the housing complex. Lennar is name ive been following for awhile its at the 50 price range. So this is the make or break price. So if you buy it now, use that 50 as your bull bear barometer. What we hear from home depot lumber deflation thats bullish the rates are going which way . Lower. Bullish for the builders, as well the last couple of days we talked about a recession but yet the Home Builders enter green on the screen stayed long in the complex. Do you need rates to keep going down no you dont. I think the set up fundament they have been did pressed the builders even with lennarup 30 its been a conception depression i believe the stocks can rally aggressively. I believe its at a new high today. Obviously theyre working. Youre talking about about a 2 cushion to that 50 point of lennar i want you to weigh in on ge since you picked it. Obviously allegations out there the stock has struck weve had, i mean, ge is a expensive option so when you look at the other allegations exactly this is always going to be susceptible to huge price swings im still long on it how about mac, sara . Yeah. It goes up a lot. Yeah. In the winter. Because of tinder yeah. And 18 revenue increase Second Quarter over the year. If you look at this one, does trade have anything to do with match . Do you see people rushing into it sometimes itll sell off with the overall market but thats a buying opportunity i dont know if they can go much higher from here. Its hard to make the tariffs from tinder argument. Yeah. Thats been the case. Seems like something you wouldnt necessarily want to skimp on. I agree we got about 13 minutes left to go. The markets down about 100 points in the dow. A little less than that s p down around half a percent. Nasdaq down 32 points and russell 2,000 down half a percent. Still to come the fallout from the Opioid Crisis two details on two drug makers after the bell, earnings from Toll Brothers and Urban Outfitters shares of urban down nearly 40 . In the human brain, billions of neurons play in harmony. For people with parkinsons, some neurons change their tune, causing uncontrollable tremors. Now, abbott technology can target those exact neurons. Restoring control and harmony, once thought to belost forever. The most personal technology is technology with the power to change your life. [spokesman] if youve tried colleg group cheering shed, snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu 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. Welcome back to closing bell. Weve got a little under nine minutes to go in the trading session. We have to pull back and most groups are lower, as you can see. Consumer discretionary is a standout everybody else is in the red financial financia financials, materials and staples hardist hit. You have treasuries rising today. It hasnt been good. Yeah. Thats been the pattern. Gravitational pull on yields drug makers endo and allergain is trying to avoid going to trial. Well start with endo the company said it reached a potential settlement of 10 million in a set of two opioid cases with ohio counties without admitting any wrong doing. Thats because these are only two cases of thousands that endo and other companies are facing they seek to hold industries accountable for the Opioid Epidemic they isswere selected as the fit to go to trial if other settlements are reached, those trials will start october 21st endo is not the only company named. Reuters is reporting that aller gains reach a potential 5 million in the same ohio counties so its not the end of opioid litigation for endo but provides a way for wall street to calculate the total potential liabilities. It nearly extrapolates to 1. 8 billion nationally. Its less than the 4 billion it estimated. Thank you we have about seven minutes left in tlad she trade. 468 S P Companies reported 75 meet estimates 8 met 19 missed estimates well get a preview of toll. Hi. So expected to post lower profit and revenue. The eps estimate is down 34 from a year ago. The revenue estimate is down 11 . Last quarter the company pointed to bad weather in North Carolina as one of the reasons. So well learn about the impact of the weather tomorrow. During the Conference Call two things investors will be watching any signs lower rates have helped stabilize Luxury Real Estate market. That said, Home Building stocks outperformed so far in 2019. Up more than 30 and Toll Brothers trading, last time i checked, about 1. 5 . There you go. Thank you. Retailer Urban Outfitters are coming out after the bell. Courtn Courtney Reagan has a look. Under pressure since it reported in may. Down about 22 in the three months the street isnt hopeful for a Strong Quarter here either looking for total comparable sales to fall about 2 followed by anthropology, free people estimated to gain 1. 4 . The earnings expected to fall more than 31 over last year to 58 cents on a slight increase of revenues apparel has been a tough spot for many retailers lately. With upcoming tariffs the pressure continues both kohls and tjx pointed to strength never know weve got five minutes left in todays session time for the closing countdown. Kevin joins us kevin, notable that home depot is the biggest winner now in the s p. Lows is a big executor is the third biggest winner what does it tell you about how the market is absorbing earn sngs. Well number one, with home depot and lows. Its a great comparison. Lows up 3 today. Theres so many comparisons between the two companies with Marvin Ellison the exemployee at home depot taking over lows well see if theyre closing the gap or home depot is dominant in that space i think that will be the great comparison we make tomorrow morning, for sure. Were sinking here. A little toward the new lows for the day. Dow down 152 s p down around the 2900 level what do you make of the action today . A backsliding after we got a strong bounce . You know, i think after a threeth threeday rally, i love the news on the investigations of big tech it took all the oxygen not only of some of the faang stocks but bled into the overall market that being said, and the bond rally i thought put pressure on the financials and if you look at the russell, the regional banks got hit hard based on that number thats why the russell was small. I think this market after three day rally lost its energy there. I mean, no question were watching the bond market and yields are lower which is taking down stocks map breaks that pattern . Well, i think, you know, as we get to tomorrow, fed minutes, thatll be a big event remember this is a week for any big economic data. The fed minutes tomorrow and then all about anybody going to make headlines commenting on a jansen hole on Interest Rates. Kevin, thank you very much. Well, lets get a sharper view of what is going on in the bond market. It gives you all you need to know down seven on the day. Hovering one basis point below the cycle low close at 153 the shocks two year in europe, interday minus 91 basis points finally the euro had a up day and probably because the dollar took rest but also expecting some stimulus. No numbers on it its all global. Its getting a bit excited one thing that wasnt excited today other than 11 00, the green and the nasdaq, bertha. Popped into positive territory for just a second and, boy, its failing adds were heading toward the low of the day. Apple is the last megacap standings. It held up well off the highs. If it holds up here, it will be the Third Straight up day. I cant say that for the rest of the megacap complex. Among those that are bucking the trend today, the chinese Search Engine equivalent of google posted better than expected earns. Were seeing gamers looking strong here. Among the new lows we had just as many new lows as new highs and tillray among those. That stock about 200 plus stock about a year ago it has come well off the highs, bob. Stocks struggle thats what happened today for example, we saw banks weak, Oil Service Stocks weak, transportation weak, particularly airlines, materials were weaker today. Interestingly, consumer naimes n doubt were weaker. We saw declines in United Health with , coke, Johnson Johnson. Consumers stocks are notedly weaker construction stocks looked very good it b52 week high there. Good enough results. Lets call it that for home depot. You heard lows is coming up. Toll brothers will be reporting after the bell important thing here today the bulls have been making a case in the last few days that were going it see numbers coming out of the european pmi that might be weaker than expected on thursday theres some hopes it would lead to the ecb getting more aggressive rate cuts well have mr. Powell giving the speech on friday a lot of people have realistic expectations that perhaps theyll signal even more aggressive rate cuts most traders expecting two rate cuts for the rest of the year. Two 25rate basis point cuts [ closing bell ] welcome to closing bell im mike san tolly. Im sara eisen. Well get a negative close near session lows here special shutdooutout to university of denver dow down 170 points. And took a spill in the last few moments of trade there watching those higher bond prices, lower treasury yields been a drag lately financials finished worse of the day. The s p 500 losing. 8. Nasdaq down. 7 no major catalyst cited, mike, but this does come off two back to back up 1 days and pretty strong three days. Yeah. For most of the day the market tried to resist the treasury yields dragging lower. It seemed right at the end of the day the ten year got below 155 and the market didnt have a lot of energy left in it it was a pretty heavy market on close to sell. I adopt think it was news driven necessarily. But the big teches did not save the market today perhaps because of a lot of that antitrust talk. Regulation talk. Not necessarily something that could bail out the rest. Joining us to talk about the market day is phil from jpmorgan welcome to everyone. So what is your general take here on whether were seeing short term balances and moves or anything fundamentally changed that would lead to the next move in the market . Everyone is mutter the rword the president said were not supposed to bring up the rword. Recession. I think its everyone i had lunch with a ceo who was saying, you know, we see some problems ahead. Were stocking up and putting cash in reserves here. Theyre changing. What is that . I dont want to say but, you know, theyre worried about a recession. Theyre worried about am i going to have to close stores . Is it going to cost me severance . Theyre starting to plan for it. Thats how it begins thats how it happens all the time and, by the way, its not that of normal. Its okay. Its okay for things to close. Where we havent done it in 121 months or something. Yeah. Last hour President Trump was speaking at a bilateral meeting with the Prime Minister of romania. He addressed the u. S. Economy and rate cuts. Listen i think the word recession is a word that is inappropriate its just a word that the certain people in the media are trying to build up because they would love to see a recession. Were far from a recession in fact, if the fed would do its job, i think it would have a tremendous spurt of growth tremendous spurt the fed is psychologically very important. Less so, actually, but very thats a big if, frankly the fed should be cutting. Minimum 100 basis points. Over a period of time. Not at one time but over a period of time well, im not talking about the reason were talking about recession, the rword not because of political motivations. Because the yield curve inverted seven out of the last recessions we saw a precure or so youre talking to ceos that are worried about recession. We dont want a recession. But people are talking. Recessions suck theyre the worst. And theyre the worst for those who dont have the money its actually not the ceo that im worried about. Its the person who cant pay their medical bills, cant afford to pay the tuition check. Yeah. Thats what the government policy is meant to help to ensure we have the right safety net for when that does happen. Obviously what is interesting is whether were heading for a recession or not, the final phase over the last year for the last six months or two years we have the question. Is the cycle over and here is the thing,is it impossible but one of the things we look at is at citi we maintain a bear market checklist we look at 18 different criteria the yield curve being one of them but also looking at sentiment, looking at leverage on corporate balance societies, looking at evaluation, and out of those 18 factors, only 4 are flashing red right now and to put that in context, in 2000, it was 17. 5 out of 18. And then in 2007, it was 13 out of 18. So what thats telling us is not the immediate direction of markets its whether we should buy the dips and were confidently buying the dips when we see the pullbacks. Other confusing thing out of this is even if we are going into recession, theres no telling what the timing is theres no telling what the stock market will do after the yield curve inverts, the stock market could go up for several months. Yeah. Its the question were trying to figure out what is the bond market at 1. 5 telling or no telling. The vors racity caused us to pu back a little. However, if you want to Say Something is sinister, you have to believe three things. The fed wont be effective in the mid cycle adjustment two, you have to believe there is political will for a trade war. Thats not clear the biggest thing. You have to take the other side of the u. S. Consumer and you have talked about it a lot over the past couple of days has been nothing but resilient in june and july you put those together every president in history has wanted lower rates. President trump is just saying it if hes pulling for 100. We got 25. Well probably get 75 and were almost there if he would stop saying it maybe it would be easier for the fed to do it. What is fascinating, rob, it seems like even since jay powell said this is is a mid cycle adjustment weve been in the fix of the market doesnt necessarily want the fed to treat it as this. Just a technical adjustment. Were going to fix the yield curve. Its not because the economy is at risk. They want a sense of urgency, seemingly b seemingly from the fed chair were not getting that. No. The number of flashing amber signs. Even the ceo the phantom ceo wasnt this concerned, like, that were seeing samestore sales drop or suppliers. Its just some point it will happen its ban long time theres concern when it happens itll be worse because its been so long. It isnt always the case last year if you look at 10 years or something early 2000 recession outside of the stock market effect was not that dramatic. It wasnt that bad. You have to remember the definition of a recession. Two quarters of negative growth. I think our most recent memory is 2018 why is why everyone is panicked the other thing we talk about the yield curve inversion, we have to look at global bond yields right now you have 50 of global bond yields negative, and then 80 xcuf less than 1 . Treasuries are attractive. There was going to be continued pressure. Yeah. Its a great point and you should be worried about saying this time is different. Weve never had invert with 17 million negative weve in heavier two you said one of the concerns should be the fed would not be effective. It starts to make you wonder if were going into negative Interest Rate territory in this country, is the fed the fed had a tremendous effect on the stock market this week they went from tightening in december to easing in zwrul. And that was tremendous. You think the fed is effective. Why not the all in on stocks on expectations theyll start the cycle . Interest rates dropped the most this month at any point in the last four and a half years you have to Pay Attention to that we need a stabilization in rates. A case to be made on the talk of recession hopes to inoculate. Were bracing for itted in adv. Or talking into it. Dont blame the media, though. Thank you. Thank you up next, former toys r us ceo jerry storch and awaiting readings on Toll Brothers. Well get the results and how to trade them coming up. Back in 90 seconds volatile day on wall street. Looking at the big movers. Bertha at the nasdaq. We lost about 80 points going into the close in the last few minutes. Much due to weakness in consumer staples. It was a big Leadership Group in the last month we had decliners of United Health, pfizer, cocacola, Johnson Johnson going into the close. Throughout the day, yields are down throughout the day. Typically saw stocks weak. We saw banks down, oil service were weak, transports, particularly some of the airlines well call it good enough from home deport. Toll will be reporting here momently after the bell. Toll up about 1 . Bob, thank you. The nasdaq lower for the first time in three days. The nasdaq breaking that twoday winning streak apple, i mentioned earlier, was the last man standing to just literally eked out a third day of gains by just a penny very unusual last time it did it was about a year ago this time i guess an august thing. Meantime, the other big cap teches under pressure. All coming back today. Theres more regulatory spe speculation might happen with the companies. Bio tech, though, was the worst performing sector. Down about 1 . Sarepta a big drive there. Back to you guys. Thank you we have an earnings alert now on Urban Outfitters courtney has the results good to see you. Hi. So here is a mixed report for urbans Second Quarter earnings coming in at 61 cents thats three cents better than the street had been looking for. Revenues are lighter at 952 million. The street had been looking for upwards of 980 million comparable sales down 3 slightly worse than expected on the street the Urban Outfitters brand down 5 free people up 6 and anthropology down 3 Important Note from the ceo who said that third quarter, to date, comparable sales are positive across all three brands and that appears to be what is lifting the stock here now by almost 4 . They have some increased mark downs from underperforming womens apparel. Digitally on anthropology, and Urban Outfitters they know that fall apparel is starting to perform a little better than it was earlier on in the year. Thats a good signal. Thank you. Yes we got Quarterly Results from big retail names today like home depot, tjx. They missed on revenues but they painted different pictures about the broader economy. Here is the home depot cfo earlier. Consumer is facing the effect of impact of tariffs consumer demand could be impacted. Meantime tjx sounding a little more positive on tariffs and trade. Ernie herman saying were phenomenal Product Availability across wide spread category the and major brands some we believe is related to tariffs. Joining us now for more is jerry storch former of ceo of toys r us and hudson bay and hero to Peter Navarro. Who said you get it when it comes to these Consumer Impact on tariffs what is exactly is your position ive never met peter but he sounds like an interesting guy the comments hes referring to i made them in the context of trumps original announcement of the 10 tariffs in a market crash. I was saying its too much of an overreaction i believe that then and now. Because companies will take action they will work to mitigate the impact of the tariffs. Theyll negotiate lower prices we hear a lot of this today. You heard it from others who work to renegotiate prices and work to move production to other countries, shift their product a mix. Only then raise prices and then if they do, we look at the math of this and now its evenless less. It will pitch the consumer but wont be the pain that some people talked about. My calculations are it would be a few fractions, a few decimal points of 1 price increase across the consumer basket the 14 trillion of consumer purchases. It will be for digital companies. Yeah. But it sounds like a lot of frictional costs absorbed by the industry. And timing issues i would say that the big winners will be the Big Companies diverse product mix and can have a lot of negotiating like walmart, target, people like costco amazon who is sleshlly marketplace. They can shift it out rapidly. Theyll do well. The people i watch who will be more impacted by this would be people heavy into apparel. Theres already, you know, a big move out of Department Stores in the mall and on to the internet. What does it sound like . A Department Store like jc penney, macys, kohls. You have to get worried. Look across the consumer spectrum, at 10 , again, keeping in mind if it gets higher, i dont believe its a huge impact on the consumer. Theres also a sort of wide spread debate what is happening with our economy and whether the u. S. Consumer is Strong Enough to prevent any sort of wider economic downturn. What is your sense i dont see anything in the numbers so far, if you look retrospective that would suggest theres any weakening at all the numbers for july retail spending was way up. It was an accelerating pattern in the numbers you saw in everything else, you see every one of these Earnings Report is consistent is with the patterns going on for several years. The winners are the ones you expect to win. Look at home depot, walmart. Theyve been weak for a long time we see nothing on the horizon that changes that picture. I wonder about this from an i investment perspective is it immune to contrary thinking and Value Investing and looking at what is cheap and what can come back if i sit here and say gap Stores Trading five or six times. All of these changes with a ton of physical Square Footage and not a lot of options. I know you understand this but the u. S. Probably is three triple to four times as much retail Square Footage of brick and mortar as we need today. Particularly in the malls. A huge amount of overstory taking place there youre swimming way up stream. I think its better to find someone. Look at t. J. Max one of my heros. Numbers were a little light. Thats my point here is a company with 62. 5 million market cap. Yeah. Theres nothing left in Department Stores. They killed Department Stores. Not the internet and the internet is finishing off the job. T. J. Max very Strong Company only 2 comp stock started down but ended up flat for the day but still, to me, thats a winner for the longterm because they represent the kind of value the consumer is looking for. Be when you say they killed Department Stores, i mean, do you actually think that these r are uninvestable stocks and none have turn around plans that are merchandise light at the end of the tunnel. The best of the best nordstrom and macys is doing a great job. Its not enough. The trends are simply too devastating. Is there room at the bottom . Maybe. Kohls is kind of in the middle theyre good because its a great value place to shop. You get a bargain. It means as traffic shifts to the internet, they have a huge profitability problem. As low ticket items, when you ship them on the internet with the cost of the shipping it eats up the margin on the lowticket item its difficult to sell on the internet t. J. Max basically theyre not counting it on the results its brick and mortar. Private equity has been absent right. They see this. Because every time they buy one these companies, they leverage it up thats the last thing that will work in this environment. Another way this is a different sight l than weve seen in the past thank you. Thank you up next break down the charts to see whether falling stock buy back volumes could be a head wind for the market later, the latest on the fallout from Big Tech Companies. Stand up if you are First Generation College student. Stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. I will tell you this, Southern New Hampshire university can change the whole trajectory of your life. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Fox closed the day lower after a pause of a three day rally and got a little spill losing steam into the 3 points meantime, Urban Outfitters shares surging after hours Toll Brothers results due out any minute well hit it as soon as it happens. Over to mike s. This is a quarterly rate of stock buyback volume you see it rolled over from very high levels. The previous peak last cycle 2006 this was a bigger proportion of the total stock market value in 2006 than buybacks have ever been this segment. So for all the credit or blame that buybacks get for where stocks trade now, i think its probably been overstated keep in mind, that buybacks have generally been flat on a quarterly basis during periods when the market was very strong. I mean, this is 2017 market going up strongly and buybacks were not responsible for it. I would say this is a factor that has been in the background. Its been providing a bid for stocks but hasnt been driving things so for people to point to buybacks as the only source of buying, the math doesnt work out. We trade i dont know yeah. A trillion dollars a week or day in stocks. It cant account for all of it its something to keep in mind so i think if this goes steeply lower, it will Say Something. Thats what i was wondering whether buy backs have been good tells about cycles turning or kind of curvy it depends. It tells you credit market is open it tells you they have excess cash flows but doesnt tell you what the markets have. Were awaiting earnings from Toll Brothers and bring you the numbers. Whos dog is this . Its my special friend, antonio. His luxurious fur calms my nerves when im worried about moving into our new apartment. Why dont we just ask geico for help with renters insurance . I didnt know geico helps with renters insurance. Yeah, and we could save a bunch too. Antonio fetch computer antonio . Ill get it. Get to know geico and see how much you could save on renters insurance. Hello. Heres whats happening at this hour migrants celebrate to reach the italian shore jumping off a rescue boat trying to swim to the coast. An Italian Coast Guard boat hovering near the migrants the crew and the coast guard brought some swimmers aboard short while ago an italian prosecutor ordered the see accident occ seizure of the rescue ship a joint u. S. israeli drill they witnessed six attacks on oil tankers in the past few weeks. Crate and barrel is recalling about 1500 toddler walkers. They can expose sharp points and small parts that can potentially pose a choking. Crews have begun to break ground for the field of dreams in iowa. It will host the yankees and the white sox game next year the design of the field will pay homage to kaminski park. I bet mike will be there. Oh its an away game and a cute idea theyre building it. And then the teams will come. Absolutely. All right kind of a fun thing. You got it. H 20. Ai is an Artificial Intelligence company with wells fargo, booking. Com, intel, and macys. They secured more than 73 million in the latest funding. The cofounder and ceo of h2,0. Ai is here. Excited to be here. What does it mean to be ab open source provider of Artificial Intelligence software or tools well, its about freedom. It gives customers freedom to own their own ai and they tried to make our customers to make it faster, cheaper, and easier for customers to do ai today its far too expensive to do an experiment in ai and deploy it. We want to reduce the cost of it so customers can in this competitive market take it to production and deploy it and change everything they do about their business so open source about freedom for the customer and empowers the customers to be an ai company. You work with a variety of sectors and companies. What do you do with macys 10,000 products go on sale for Labor Day Weekend and you want to know how to price and change them and permisonalize sales for the consumers. You want to place them correctly and the supply chain and optimizing supply chains you liquidity and want it with the right pricing. Its also a competitive model here i think the whole thing to make it simple and easy for customers. You mentioned corporate bonds. It reminds me Something Like when algorithm trading first came to wall street stocks there would be these firms that had the off the shelf algorithms saying you can use ours and pay us and later on, i guess, each firm would have wanted the ability to create their own and learn on their own is that Something Like what youre doing allowing the customer to create this Smart Program yes its like a generation where allowing customers to the complexity of building a model and the features you need to pull out of the data its simple to they get it and thats what were going. Try to make your own ai. I think the companies they work with are looking to become ai super powers. So, i mean, are you competing with the big guys . Microsoft, ibm everybody else has been claimed to build it and asking it to come to their cloud. Weve seen what happened with that in the social world we want to democratize it. Help the little guys we want the democratic way to build things so our vision is to empower a state farm or capital one or wells fargo or goldman sachs, in this case, and go against the larger in the tech world. Going to go public . Its been a hot ipo market ai is just starting. Thank you toll brother earnings are out. We have the numbers. Hi. For eps for the luxury home builder a dollar versus the estimate of 83 cents the estimate was down more than 34. 5 a year ago revenue is coming in at 1. 77 billion the estimate was 1. 7 billion the ceo saying that Mortgage Rates talk about a lot limited supply of new and existing homes and strong employment picture are providing tail winds Toll Brothers up 3. 7 . Back to you. All right thank you. A nice 3. 7 . It seems theres some in the recent years it seems like, you know, this push from lower rates a pent up demand is working. Well bring in ken jenner ken, your first reaction here to the numbers. Certainly is a nice beat. They did commit to high end and vie call guidance and beat their gross margin guidance. I think the orders did better than the seasonal trends we would have expected. So that bodes well for their forward, you know, revenues versus our expectations. And what can we say about, i guess, this egg segment of the market versus other parts of Home Building. Toll is occupying some of the higher end. Sure. I think toll does occupy the high end these order rates specifically are good for them given the drag theyve had coming from california southern california, specifically our macro call really is flight to quality with that means the builders benefit measure the Building Product companies from lower Interest Rates as it spurs new home sales thats where you see the most Interest Rate sensitivity. The fact toll is doing well, it fits in with our macro call. Yeah within i was going to ask about the group in general whether its going to continue the nice run weve had and how much is predicated on rates staying low or moving lower well, not necessarily moving lower. The ten year is at 3. 2 in november it has come down a quite a bit theres always a lag in Interest Rates. It affects new home buyers the most i think its a bit more lag defect for the Building Product companies is really tied to high home price changes we have a 3r7b9 appreciation now. I think that will be a bit of a drive for the Building Product companies. Versus the Home Builders and names like toll, kbh have been doing well and showing progressive signs of order demands. All right thank you very much for checking in. Thank you still ahead, will lowes lower because of tariff fears . Here are the big winner on the s p 500. These folks, they dont have time to go to the post office they have businesses to grow customers to care for lives to get home to they use stamps. Com print discounted postage for any letter any package any time right from your computer all the Amazing Services of the post office only cheaper get our special tv offer a 4week trial plus postage and a digital scale go to stamps. Com tv and never go to the post office again this looks like a good one. It has bearing on the whole debate where we are on the Economic Cycle whether we can pick up growth from here. Just to explain, this orange line is what is called u. S. Economic policy indicator. Its basically the stimulus effect of fiscal spending, fiscal deficits, plus lower Interest Rates its pushed forward by one year. Its meant to be a leading indicator of the second line which is gdp growth. And the argument here is this line moved up. Were running larger deficits. We have lower bond yields. Money and supply liquidity is moving in the positive direction so jims point is without the fed necessarily doing anything more, because of the leads and lags and how it operates, we should, in theory, have u. S. Economic growth pick up again up toward that 3 level so just using this indicator it would seem theres a little more juice kind of coming into this system that might be able to give some relief for the growth leaders. Well see. Its also, i think its also an argument for people who say stimulus still works not just pushing on a string our economy traditionally responds pretty well. Exactly keep in mind that the tightening from 2017 and 2018 got us to this position of people saying the economy has been restrained too much by the fed if, in fact, thats your case you have the lag times how that goes through this would be something you turn in the positive growth. Yeah. Because payroll taxes. Yeah. Anything on top of it, too. Up next, big tech under fire looks like a group about to turn up the heat on technology companies. What the extra layer of scrutiny could mean for the faang stocks. Up next preview what to expect from louwes earning report and tony dwyer will weigh in well be right back. Stand up if you are First Generation College student. crowd cheering stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. The world in which we live equally distributes talent, but it doesnt equally distribute opportunity, and paths are not always the same. Im so proud of you dad. [man] i will tell you this, Southern New Hampshire university can change the whole trajectory of your life. uplifting music through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From finding out whats selling best. To managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Alert on walmart suing tesla. We have that at headquarters. Hi. Two big names here walmart is suing tesla clorg to a claim that the solar panels caught fire allegedly. The suit is alleging breach of contract, gross negligence, and failure to live up to industry standards. Walmart would like tesla to remove solar panels for all 241 stores and pay damages related to the fires that walmart said tesla caused we reached out to both companies and havent heard back walmart is suing tesla claiming the solar panels caught fire asking them to pay damages and remove the solar panels from all 240 locations where they have been installed back to you. Thank you very much you know, this is only likely to stoke criticism for tesla. It dates back to when tesla acquired solarcity in 2016 2. 6 billion there was controversy even then. Yeah. And of course a company that controls solarcity. Yeah. A little bit of an inside deal not a growth edge within tesla. Apparently the Second Quarter of 2019 tesla installed 29 megawatts of solar, a record low in the megawatts in the single quarter. It seems like a venue dispute that has spilled into the courts with walmart other tech news, a group of states preparing to move forward with an investigation of Big Tech Companies ylan mui has more on that. Reporter mike, this is being coordinated across at least a dozen states it is expected to be bipartisan and im told states attorneys general have discussed it with the department of justice during a meeting here in d. C. In july remember, the doj is conducting its own review of market power among the big tech platforms today the departments top antitrust official told our colleague Brian Sullivan they all intend to cooperate. I think it is safe to say that were all in the same place, having had conversations with the state attorneys generals at the federal level and the state ags, i dont think, you know, theyre at different stages of the investigation. He would not give any timeline for a formal announcement or action, but there are reports, guys, the states could go public early next month back over to you ylan, is there a sense here i mean obviously it seems it is being done in coordination with the department of justice, but that it is just a matter of bringing to bear, you know, the states investigative powers on all of this im trying to figure out what it would mean different for the Tech Companies themselves to have the states involved if, in fact, the federal government was already scrutinizing them. Reporter thats a very good question one of the issues in this type of investigation is where do you draw the line, who is regulating and who is overseeing what you know, rahim said they intend to Work Together but as we saw with the sprint and tmobile case, you know, the doepartment of justice came to one conclusion, that that deal could go forward, but states are challenging the deal and saying they do not believe the merger should occur there are definitely instances where states and the fed can be at logger heads, and well have to see as these investigations develop whether or not it happens in this case ylan, thank you a lot of people pointing to microsoft, 20 states joining the Justice Department in suing in the late 90s and how it was key to building sort of public support and just political ammunition against the company. I think it underscores the fact these companies dont really have friends out there in terms of a lot of government constituencies. Theyre piling up on the other side. Onl obviously what the states feel is that it is a winner to go after the companies on a Public Relations business. Up next, your wall street look ahead key things every investor needs to watch as we head into a new trading day when closing bell comes right back 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. Stocks took a bit of a slide into the close, pretty much finishing at the lows of the day. The dow down about twothirds of 1 , giving back a chunk of almost a threeday rally bouncing off last weeks lows and the 800 point loss of last wednesday. To your wall street look ahead, the fed minutes are out tomorrow and retail earnings will keep on coming lets start with a preview of the fed minutes. Tomorrow we will get minutes from last months meeting when the fed cut Interest Rates for the first time in more than a decade it will be very interesting. Look for any insight into the decision, including the dissent. Remember, two key members voted against it as well as any clues about future rate cuts do they talk about mid cycle adjustment and what does it mean that, of course, comes ahead of the feds annual symposium in jackson hole, we ohmy and we will hear from Robert Kaplan thursday at 3 00 p. M. On closing bell the big speech is jay powell on friday and whether he will build on the guidance he gave at his last News Conference after the rate cut, suggesting maybe theyre drinkithinking about mo aggressive rate talks because the recession talk heated up, the bond market action, the stock market volatility. Thats certainly what the market is hoping for. Important to point out the dissents because in the press conference the chairman has to kind of reflect the feeling in the room, right . When he is talking about the outlook, you have to give a nod to the fact the entire committee did not want to cut rates last time even. Including in boston who has spoken out recently, yesterday on the wires did not sound like he was there yet in terms of a rate cut. Thats right. So may dissent again. And how will powell sort of handle that, and how is that discussion inside the fed . How worried were certain members about the outlook . Three days of lots of heavy fed content coming up. Lowes meanwhile one of the top performers in the s p today after strong results from rival home depot this morning. Joining us to discuss what to expect from lowes tomorrow morning, from research at gabelli and company, thanks for joining us what should we be looking at from lowes numbers to tell us about the consumer and how lowes is executing right now . Absolutely. I think a few things to think about sick lar to home depot, what kind of impression the lumbar deflation will have on results. Some conversation around a softer first half and what the expectations are for the second half and what that means for their samestore sales as well as eps finally, we will be looking at gross margin, given the miss in the First Quarter and lo expectations going into Second Quarter, see if theyre able to bounceback given the issues theyre having in their pricing ecosystem. What about the guidance cut from home depot . How do you think that warning about potential Consumer Impact on of course the lumber deflation problem . How is lowes going to deal with all of that . Sure. So i think the guidance cut was largely anticipated. I think what was a positive surprise was the reiteration of the fullyear eps guide which shows there are some bottom line levers to drive eps despite a softer top line. I would say that 80 basis points of that cut is related to lumber deflation with a little bit regarding some uncertainty around tariffs, and surely tariffs and what it does to pricing and what kind of an impact that has on the consumer does create some uncertainty going into the second half and maybe even beyond. Lowes as a stock has obviously underperformed home depot, like 17 off its high trade. Pretty persistently at a valuation discount any thought that maybe that gap can be closed . I think so. Youve got a new Management Team in place you have a clear operating strategy that should lead to Better Capital decisions, better operating efficiency theyve exited Underperforming Stores i do think the changes theyre driving should support a small mid teens Earnings Growth over the next two years and the stock trades at about 15 times my 2020 earnings that compares to close to 19 times home depots 2020 earnings i think theres upside, especially if you take a one to twoyear outlook. Alvarello, thank you for joining us. Thank you quickly, what are you watching in the market were still watching the bond market we had the comments from the president saying it is ridiculous to talk about recession, but we have a persistent the idea the bond market is trying to handicap a global slowdown and the market hasnt escaped that story totally. I think they have to stop going down as an initial step and well see. Were in scary territory. A little bit. That does it for closing bell. Fast money begins right now. Live from the Nasdaq Market site overlooking new york citys times square, this is foim im melissa lee. Traders are tim seymour, cavkar finerman and guy adami why one market pro says we are in a tactical no mans land ahead of this speech from jay powell in jackson hole we are keeping an eye on shares. The homebuilder reporting the move after the results later the big beef over chicken. Wendys, popeyes and
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