It is time for a wealth tax in america ive heard there are some billionaires who doesnt support this plan. Theville ville ification of billionaires makes no sense to me she probably thinks more about cataclysmic change to the Economic System as opposed to tinkering. Lloyd blankfein responded on twitter. I can watch that over and over again where were you when you first saw that i was kind of brushing my teeth in the morning where i normally watch the channel i was surprised and flattered to think that i could play such an Important Role in the president ial campaign. Were you angry . No, i wasnt angry. Im a little bit staggered that it gotten to this point of kind of name calling. How provocative was my statement that i would tinker with the Financial System and i wouldnt explode it and that becomes in this kind of polarized world, thats a very radical statement to say you wouldnt blow up the best financial and Economic System in the world. Let me read from your tweet, if i may you say you were surprised in the tweet. You go on to say, not my candidate but we alike on many issue, vilification of people may be good for her peopcam bait the country. Maybe tribalism isnt the answer. Thats a comment toward her native american claim. I work for the worlds financial institutions, i have name recognition my political position is known i used to be a kind of a moderate democrat and now without having moved anything, ive become like a in their eyes kind of a right winger because i dont want to blow up the Financial System its an odd time where were shifting a bit from populism where you are want to represent underrepresented people, people that feel they didnt have a voice and they want to appeal to them to a kind of demagoguery where in addition to trying to help underrepresented people, youre labelling people as villains who may or may not have a role in the problem just to vilify them in order to improve your prospects so the migration from populism to demagoguery is a bit of a dangerous moment i just fear for the political process in the United States, thats all but guess what, well survive this and well get through it. Theres a cycle to it. You do say in the tweet youre aligned on several issues, on many issues, the word you used on what issues are you aligned with senator warren on i believe strongly that the Economic System should be fair, that people shouldnt be underrepresented in receiving the fruits of Wealth Creation. So im for progressive tax, im for most of the social issues that shed be for, lgbt issues, other friender righ gender righ. But at the end of the day i recognize the Great Success of the Wealth Creation machine and less somebodify successful parte weather distribution machine we shouldnt have unworkable, demotivating kinds of taxes that will achieve equality by reducing everybodys level of wealth im wondering what you mack of so make of the general tone of warren versus wall street. I dont know if you saw the interview Lee Cooperman did on my show where he literally broke down in tears thinking to himself im somebody who spent the better part of my adult life trying to give back, ive taken the buffett giving pledge, ive sent 500 kids to college you know what im getting at yeah, i have a thicker skin i dont want to speak for lee. Hes a great guy, a very philanthropic guy, all the things he says he is, a very rasal gra rational guy, he was responsible for research at Goldman Sachs. He put out a very reasoned paper, is he hard to know but it wasnt Somebody Just taunted him and made fun of him and thats the environment that were in so it becomes a symbol. Very hard to at this moment to just somebody says youre a bad guy and you go back and say im not such a bad guy thats not an argument that people win so, you know, im not dying to be here. I could be here. It not bothering me. Given my choice, id just, you know, if i could i would just bury the match et a hatchet ad move on. Whats your take on the wealth tax i can understand where the wealth tax is coming from. Its a very good way to share the rewards, share the fruits, which you can achieve on an aggressive tax system. An estate tax at the end of death would accomplish the same thing. I understand where its coming from, i understand the goals the problem with it is is its completely unworkable. Forget about the constitutionality. Where its been attempted, its hard to settle an estate often can take many years to settle an estate how do you mark to market your entire wealth every year, farmers who own farms, people who own homes. Its not just fancy people with tens of millions of art collections, it anybody with a farm or a home would have to establish what that home was worth every year youd spend years fighting about it and next year youd have to do it again. Did you think about whether you were going to respond to the warren ad or was it a spur of the moment thing i asked the question in the context of and i asked lee coop areman this as well as to whether you all think youre playing right into her hands by responding and giving her more material to play around with im not living to respond to Elizabeth Warren or anybody. My whole response consisted of 280 characters in a tweet, most of which wasnt addressing anything that she was saying so this is not a big moment in my life and i dont know frankly, i dont know what it means. I started off the conversation by saying i was a little bit in a weird kind of way, its a little bit flattering. I didnt think given my noncombatant retired state, i didnt think i could be that important for her to label me that way if i were to ask you, are you surprised that theres this still lingering animosity in certain corners of the political sphere towards wall street, that you guys are the ones who caused the crisis, not you and goldman, but you guys collectively, you caused the near destruction of the Financial System and here we are today and people cant forget about that . I think people who are responsible at the center of the Financial System going back to the financial crisis, going back to the depression, going back to throughout the history of mercantilism have always find their moment of vilification because people who build things, you can see it, but the people who are responsible to make sure the right things get built in the right time and the right money is spent for it and when mistakes are made and the wrong things are built to repossess those assets and recycle the capital, theyre not always loved. So people at the center of the Financial System play a very, very Important Role in allocation capital and allocating capital, allocating risk but not only is their work not always appreciated, but the people who find themselves on the wrong side of that allocation have a lot of disdain for the people at the center of that process would we be here today had some gone to jail as a result of what happened during the crisis . Is that part of this lingering animosity . I dont know no. I think if we never had a financial i seem to recall that before the financial crisis hi to respond to these kind of questions as well. So there is always, again, some kind of some kind of resentment in the worst time, lack of appreciation in the better times, for what the people who are at the center of the al occasion process of the Financial System again, risk, capital, people again, when you have the role that i had in my old firm, you have people who have capital to invest and people who need capital for their businesses the people who dont get the capital resent your decision not to give it to them and the people who have the capital to invest may not like it if after the fact it didnt go to the best place possible. This whole thing has really spurred a conversation about capitalism in and of itself. Were discussing it more i think recently than we have in the most recent past is the system broken does capitalism need a fix no, its not. Look, were sitting here theres a lot of unusual aspects to this moment in time where the passions and the the passions are the greatest at a moment when things arent in really the greatest distress weve ever faced in our lives i think the two parts of the capitalism kind of, if you will, socialism debate are really how do you allocate the benefits and the product of side, what youve pro tuesdayed oduced out of thei think thats very, very fair game for conversation. The other part is socialism versus capitalism is how much of the Economic System should be run by the government. There its almost hard for me to believe only people without experience in this matter could think what we really need is to have the government run a much bigger section of the economy because i know i really want the Transportation System to be like amtrak all the way through or housing to be like the new york city housing authority, which is governmentrun housing you know, there are great people who work for the veterans administration, some people get great care there but i dont know that everybody wants their Health Care System to be run and waiting on for weeks for an appointment like some of our veterans do with the v. A. System for me having our government run more and more of the economy is not a way anybody would go who ever experienced the government running a bigger part of the economy. This isnt necessarily a conversation of capitalism versus socialism its the likes of a ray dalio or marc benioff suggest that capitalism itself could be tweaked, maybe my word more than theirs of course everything can be tweaked. These are nails. I tried to break it down into the allocation the allocation or reallocation of wealth on the one hand or house of representatives of the system should be run by the government is two bifurcated things the label is distracting i think thats what the debate is about should there be private health care or the government administered system . On paper it looks like the government system would be effective but its that profit motive that makes sure you get the best people in the jobs, people work hard, longer hours than they should, you get rid of incompetent people, you reward people who work especially hard or are especially good, you shut down things that dont work, even if its in some congressmans district the private sector can behave in ways that people in government cannot so no shade on the people in the government my dad worked for the post office but again, look at the post office so how do you think about the issue of incoming equality people say its the preeminent issue of our time. Its certainly one of the principle ris bks to the market inequality, wed have to have less of it lower Interest Rates, people who have assets get richer, people who dont have asset arent benefit federal deficit from the asset prices uber comes along and officially every driver never has an empty car. Theyre driving around so maybe you need 30,000 making this number up but maybe you need 30,000 fewer taxis in new york city than you had before well, that value goes to the shareholders and the initial venture capitalists who created uber they get richer. Meanwhile 30,000 cab drivers lose their job so theres a migration of wealth from labor to capital. So that gets repeated because of Technology People who create the Technology Get the wealth that comes from needing fewer people to do the job and so there are fewer people employed. Now, ill tell you whats happening at the same time other industries are being created, there are more services and we have low employment in this country and over time low unemployment means that new ideas come along and they have to bid up the wages of other workers to pry them from their other jobs thats whats happening. So wages are starting to ride. Do i wish it had converged sooner yes. Should we wait for that to happen no, im for tinkering with the system do you think ceos make too much money do you think television reporters make too much money . I do yeah . Yeah. I dont know if television reporters are making such a great amount of money and those at the bottom of the television arent making ceos are the wealth of ceos is going up at an amazingly high rate relative to the rank and file. Im just guessing that if you that someone must have decided that you in this seat draws more viewers than if you and your cameraman switch places and therefore you command a higher wage for the job you do, even though when i chatted with the fellow back there, he seemed i liked him a hell of a lot and probably works hard. But the spread between what i make andy makes is probably way small compared to what you make compared to the rank and file or what any ceo makes compared to the rank and file, no . Its widespread somebody must have the misapprehension that somebody in that job do you think its out whack, though out of whack from what . Im asking what jamie diamond was asked by leslie stahl. If you film a movie and get the number one Box Office Star to be in that movie and you think what is that movie worth with the number one Box Office Star in it versus the new 40 Box Office Star . If someone thinks they can make an extra 50 million by having the number one guy in it, whats that guy worth as a difference over the other guy every industry has its own market mechanisms. I dont think anybody should apologize where they end up in that process and then you can ask them what they do with the money, whether theyre good citizens, whether they give back to society, whether it serves an important social purpose or its counterproductive. Im not criticizing you for asking the question, although maybe you shouldnt ask it ten different times. Well, i think it sort of gets to the heart of why were having the conversation about income inequality why people like Elizabeth Warren put people on wall street i dont think the whole Economic System hinges on whether taylor swift or the nfl quarterback versus the lineman, what the relative proportion i think its an important thing if youre talking on the side about that particular industry or what it can afford but i think the real issue for the overall economy in a macro sense what should be the government percent of participation, whether the government should take over health care and housing and then the distribution question is one of calibration and degree and where i am on that spectrum, which was the observation that made was that i may be in the middle im not an extreme eastbound of that spectrum i grew up in Public Housing in new york city, my dad worked nights at the post office. I might surprise you in that i never behaved in my life to maximize my income over other conversations. So i might find myself kind of as a directionally on line with people who would like to see a more equally calibrated kind of distribution of the system but i dont want to do anything to impede the Wealth Creation of the system thats a little bit what the debate about wealth should be for me youre not supporting Elizabeth Warren who do you support rockefeller i have nom complaints about meep has not criticized me lately if he did, you would probably have a tweet about it. Seriously, who are you supporting im a militant moderate and also not just for not just on the outcomes but im also for that because i like the stability of a state you know, everybody today, you know, in the last administration produced somebody who just the first day in office wanted to just undo everything that was done if the government changes in the next election cycle, the first thing theyre going to do, executive orders are going to fly and just undo Everything Else were going to go back from one extreme to another the other good thing about moderation is that it creates a more it creates a more stable environment going forward. So, radical comment that i made that invited that negative comment was i would tinker with the system but i wouldnt blow up the Economic System and if i had to say over again, i would just add i wouldnt blow up the Economic System that is generating that is really in fact the most successful and has the most growth it very ra its very rare that the biggest is the most nimble and most flexible and fast growing, but the United States economy is all of those things among developed countries so i would take pride in it while recognizing there are flaws that we should correct. Again, were in a very, very political moment and again, at the juncture between populism and demagoguery when i say dangerous, i dont want to produce another reaction, im just saying i wish people would call out that kind of thing i mean, the only thing the odd thing in that commercial, im used to wall street getting pelted, im used to firms being named but going after specific individuals who really didnt raise their hand, are not really that engaged in the process like my friend Lee Cooperman and, you know, it just seems to me its taken a new direction, is that really good, should we applaud and clap for that . Im not so sure. Youre an equal tunopportuni target between warren, sanders and trump. Im glad i could play my role in unifying the country. How do you think President Trumps done listen, im sure there are villages in the amazon that havent seen electricity where theyre sitting around a table talking about President Trump every day. This is a very welltrod territory here i would say that on economic issues, if you look where things are, i think hes done pretty well and it crazy not to acknowledge that, even if you clearly dont likeless temperament and the burdens hes putting on our institutions and the stresses in the fabric of the country and the poor role model in a lot of ways hes setting in the country you were supportive somewhat of his tariffs you said i dont think hes wrong here, tariffs might be an effective negotiating tool china relies more on trade and loses more im a registered democrat, i was a Hillary Clinton supporter, but i would always i would look at what works and go along with it. On the issue of tariffs, you know, again, people its put a burden on certain people in america, thats for sure but i give him credit, i give the president credit for taking on this issue of how to get china to confirm to standards of International Behavior in the trade arena. Hes taken that on other people have just punted on this if those people have better ideas for how to do it, lets hear them. It very easy to stand on the side and say, well, americans are getting hurt in the process. Of course americans are getting hurt in the process. The observations i make about these sings lets relate it we just had a strike at gm lets relate it to a labor strike the Union Strikes gm does the Union Leadership know that workers are going to get hurt by that strike . Of course. Theyre going to forego wages. Is gm going to get hurt . Of course gm is going to get hurt why does labor do it if they know their people will get hurt . Gm thinks its in a more powerful position. Labor thinks it more powerful. How do you get a market to stabilize so they can get to a point where you can have a marketclearing settlement clearly in a labor strike, the worker will lose wages in order to get the other side to move towards its side for a compromise thats whats going on here. Theres pain that were going through in order to inflict the kind of pain on to china that will make them compromise and get closer to our position it hurt the manufacturing economy undoubtedly. Its hurt manufacturers, its hurt farmers we should nationalize that pain, which i think has been sought here when you give subsidies and pains for farmers to compensate for some of their farmers, youre nationalizing but nevertheless, i cant see any other way of bringing our negotiating adversary here, china, to the table or closer to our position unless we convince them that they have more to lose by recalcitrants than they do from operation. Theres a political ramification from the president , too, as we get closer to the election everything has political wram if ramifications. They have to be digested your former colleague suggested the president will lose credibility with the chinese if he rolls those back im not speaking for the president or the chinese im saying i understand why having to go down the road of even suffering some losses on yourself and some burdens on yourself are necessary and again, we dont often get into trade wars but we often get into labor strife so im making the analogy. So i see the analogy let me ask you about the fed. Obviously jay powell has endured a tax from the president who is now arguing that he be fined with negative Interest Rates how do you think jay powell has done do you think theyve been right in cutting rates the way they have in what do you make of the president s attacks on the fed i would say from a different perspective, i wish the president wouldnt attack an institution whose credibility is part of its is an important part of its influential when we want an influence, respected fed for all sorts of reasons that are clear. Kornd, if a weird way, it gives jay powell a way to resist that and come out of that with the institution holding up its independence im not suggesting that its good or desirable, but so far jay powell has handled himself very, very well, his temperament has been fine and i think his responses have generally been good should he in hindsight have forgone the last years income rate rise, could we have been some people would not want to one more rate increase more or less isnt going to determine whether hes doing a good job as long as he respond to the data and as long as he keeps himself insulated from the political pressures. I wish the political precious werent there but i commend him for resisting it and although the institutions are being attacked, the institutions are holding up let me ask you about the company you use to run, Goldman Sacks. How do you think david solmomon is doing im not going to comment. Im a good leaver. By the way, i will say i know who played the biggest role in putting him in that job and that was me so ill take credit for that but im not going to comment on what hes doing after i left let me ask you this way then. Theres a new article, i dont know if you saw it in fortune magazine, knocking down walls at Goldman Sachs. The implication is goldmans growth had slowed goldmans growth had slowed what do you make about the way that its framed, that solom solomons job was to get it growing . Its very market reactive the market like stable income. We were the most recent private partnership. You can make money one year and not the next year and then in five years make a ton of money and everybodys happy. This was started the march into consumer businesses and it was started over the last couple of years. And, you know, we were good partners in that and now hes doing that on his own. Our business, again, needs to evolve and always does i commend the efforts to grow revenue. Thats always our job. Let me ask you about this quote from mike mayo Goldman Sacks was a sachs was a its own success. Thats an unusually flattering comment from mike mayo i think he has goldman stock on an outperform at the current time thank you, mike look, everybody is always a victim of your success things work and then you dont have the same motivation to correct or change things we stayed in tact during the financial crisis there was one so almost exclusively geared toward advisory work and Capital Market activity as opposed to commercial lending and deposit taking, which is generally more stable, safer activities we werent even in those businesses so clearly there has been a need to evolve certain other things in different parts of the kind of cycle that are goingto benefit one business over another. Im proud of our firm, im proud of the great people that we have working there. We still attract and retain the best talent. I feel very good about it but theres always a need to improve things and to move on and to always, always grow revenue and resources and opportunity. On that note, how do you relate to that anything on my watch is part of my legacy theres 50 things that happened. This is a big one, though weve had a lot of things that go on it will work its way through it still in the process of we had a bad egg out there. Then the question for the instituti institution and everybody from time to time will have a bad egg. We have tens of thousands of people we hope that everybody is pure of heart, it doesnt always work out. And then the institutional test is do we have the right processes and procedures, compliance and culture that should have, even though it slipped through the cracks this time, how much at fault were we in allowing this to happen and thats what goes on and that is what plays out here. You know, i have confidence in our institution, i think we are on the right side of those culture and kaescharacteristic d compliance things and you look for flaws and well move on. I can tell you the crisis we dont have enough time left to enumerate all these things Goldman Sachs is big enough and influential enough, theres hardly anything that can go wrong in the world where were not influenced by it, involved in it, often very, very involved in it. To be in my seat and my successor occupies means you have to work through these things and that means you have to make the changes and responses to minimize the chances that bad outcomes happen again. I know you have to run to the airport. Markets are at record highs and were setting new highs almost every day it seems whats your view of the market are you comfortable with where stocks are oh, god, i dont think ive been comfortable since 37 years ago when i went over to finance. Im looking around every corner, always waiting for it and i wont hear the one that is, although after it happens, 80 of the people out there will think i knew in advance and the other 20 will think we caused it so the fact of the matter is but if you look at it and you ask me what is my best sense, low Interest Rates, relatively high growth, no demand to raise those Interest Rates and so id say theres a very, very good macro backdrop now, the big risk is you talked about low Interest Rates well, clearly if you have a commodity and attach a zero price to it, how does that get allocated efficiently and safely and so is capital going into wrong places are there bubbles being formed i dont see them but you never do until after the fact when everybody in hindsight remembers having seen them could it be credit but that doesnt feel that way maybe real estate. Thats kind of come down other kinds of asset prices, ipos, tech, high prices with no revenue, thats kind of deflated corrected itself somewhat so whats going to happen thats going to burst the bubble and create a huge explosion . I dont see it but that doesnt mean it not there. Impeachment you know, i save even that process, i think statistically its very likely that there is a favorable or positive vote on impeachment and very, very unlikely that theres a vote on removal. So i dont think the Financial Markets are really getting set if that formulation changes, then over time that risk will accrete into the market and the market will slowly adjust. The only time you get a real burst and an explosion is a sudden surprise and a sudden change in the that wasnt anticipated for which the adjustment wasnt made ill give you an example of that recently was when donald trump got elected when everybody thought Hillary Clinton was going to get elected and so then going into that election, nobody saw everybody was thinking higher taxes, possibly more regulation and all of a sudden overnight lower taxes, less regulation and that adjustment was kind of a radical regulation some people like that because stocks went up not down on that but the reverse of that could happen that kind of surprise. Thank you for being so generous with your time today. Its nice to spend this time with you straight ahead on the half, terry duffy is the cme groups chairman, the host of this event down here. Halftime is back in two minutes. 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. Im bill griffeth. Boeing 737 max just got another boost at the dubai air show today. It was an order from kazakhstans newly launched Budget Airline theyll purchase 30 of those jets with a list price of 3. 6 million. In hong kong, the standoff is not over yet police say about 100 protesters are still inside about 600 protesters walked out earlier in the day police allowed those over the age of 18 to go home after they were questioned. And netanyahu does not consider israeli is thesettlemeo be a violation of international law. And a career performance last night, doncic becomes the second youngest player in nba history to report a 40points trip tripledouble, 163 days younger than when lebron did it back in 2005 by the way, the boss called, scott, he thinks youre overpaid i knew that was coming, bill. I knew it. Im sure theres many more things being said on twitter as well our next guest is the host of the Leadership Group thanks for being here. I appreciate it very much you have a wonderful Cross Section of people from many Different Industries how are people feeling about the economies and the markets . You just had lloyd on and i think you did a really nice job, not on on cnbc but yesterday with a constituent of our clients. I think for the most part people are feel overall good. Were seeing volumes dip initially which tells me theres a lot of people on the sidelines. Im a big fan of your show and watch it a lot and youve got traders that have been talking a different position, than they have over the last several years. So thats a lot about where i think the markets at right now and thats where youre hearing a lot of septemberment from different places in the Asset Classes. Theres a suggestion some of that money will come into the market by the end of the year and push things even higher. Do you buy that . Its not for me to predict whether money will come into the market i look at prices and flows when you look at the amount of volume coming in, its a lot less than it should be when youre having these enough record highs set every time or record lows and interest youre seeing volumes dip off, which means one thing, they got to come back in eventually the other thing you watch closely is volatility. I do. Which is almost nonexistenont some of prices are not reflecting nonexistent, even though the daily volatility we were watching has seemed to taper quite a bit over the last month or so. Do you think that comes back . I do. I just think theres too many unknowns in the world. It almost impossible for volatility not to come back into the equation you have uncertainty in britain, you have an election next year it couldnt be more polarizing on which way the markets could go because of the direction of who is going to sit in the oval office so thats going to create uncertainty. I think 2020 could be a very volatile year for a whole host of reasons ill play off another thing since youre referencing it, maybe all of those risks are mitigated by one thing and thats central bank easing, not on here but everywhere else and maybe thats, pardon the pun, the trump card that supersedes everything you know, ive heard you and your colleagues talk about the fed quite a bit. And from where i sit i think how much lower can they go and how much of an effect can they have at the overall marketplace i think right now they have zero effect i dont think the u. S. Is going to regular tiff rate and i dont think theyre going to raise any time soon. What role is the fed going to play in the United States . Theres 14 trillion getting negative rates globally today. So theyre going to look for different Asset Classes to participate in wouldnt you in some respects go out further on the risk curve if you knew you had a, quote unquote, insurance policy in your back pocket of the fed if. I dont think its an insurance policy i just have a ditch view of it any time you buy insurance, you normally know what it for. If youre telling me the fed is going to bail me out and take the equities higher, i dont believe believe that here we are with rate cuts over the last two sessions. The market has said we dont care what the fed does where do you think the rates are going ten year its hard to say. Im here to manage the risk but it is interesting that its hard to believe theyre going to continue to stay inverted and i have a hard time thinking rates are going to stay this low forevereverybodys watching the influence number we it doesnt mean people dont have great exposure. Cred dr we are 46 trillion in mortgages. People need to manage that risk. Even though the rates may not be going anywhere in the near term, you and i dont get fed Fund Borrowing rates. Leap year making into bit coin even further opgs starting next year . Im a big believer that options help the credibility of any futures contract to build that ecosystem of futures and options together we have now listed the futures for a year its become somewhat attractive to people. So the options of a natural thing next to do it doesnt mean were going to go into other cryptos. So i said from day one i will walk, not run into this. I dont want people who have never traded futures. Terry, thanks for having us thats terry duffy, chairman of the cme group down here at his conference in naples, florida. And coming up, Michael Harris will weigh in. And i hate to say im giving you a raise. I need a raise that was pay per view tv i just want to say fabulous interview. So there, thanks ill send you a check. Its in the mail tech stocks on pace for their best year in a decade but theres one indicateor that could signal trouble ahead and his agency is taking the lead on regulating crypto currencies and boeings latest headache could lead to the redesign of thousands of its planes. Thats all ahead on the exchange. The Halftime Report is back after this ugh on these roads ugh on these roads shhh, sorry, i didnt catch that. I said ask how soon they can be here right now . Whats now . He says theyre surveying our property now theyre probably at the wrong house i dont see any hovering his name is hovering . Look up . 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As weve heard from several of the other guests today and frankly a lot of people at this conference, we have two macro themes coming to a head. I think theres a lot of people who have had a good year and its very possible theyve got their finger on the cell button and they may take some profits if we see a spike in volatility in december. Are you positioned for that we have several defensive trades on. Were short energy, long Precious Metals like gold and silver were also short a basket of emerging market currencies versus the dollar. We continue to be long Global Equities but some of our faster, longer, shorterterm models could get us back in trade youre a Quantitative Hedge Fund you have about 3. 5 billion under management, is that right . Correct the trend feels higher for equities, does it not . Absolutely. Some of our longerterm momentum strategies are going to be following equities higher. You blend quantitative macro models, you blend shorter term strategies to help you be more nimble when markets tend to turn youve mentioned in your show already central bankiesin easin. Were long in bond markets, short the currency we dont have that trade on here in the u. S. , though. We believe the fed will continue to stay on hold and be data dependent. It entirely possible we see more easing next year but next to the chagrin of President Trump, we will probably not see an easing by year end the fed needs to become more engaged, its going to get more gauged engaged i think all Central Banks will get more engaged if we see a pick up in decline thats why its so important to see if things are Getting Better or where is. The chinese may decide they want to negotiate with a new president or the same president after the 2020 elections you say youre looking for a return of volatility but youre not looking for a return of the kind of december we had last year, are you . I dont think its going to be as dramatic as we saw last december there are a lot of people who have made a good amount of money last year and its entirely possible theyll take profits and lock in the gains. And theres the likelihood or at least the possibility i should say of a chase, a performance chase that counters some of the profit taking but well see. Good to see you again. You as well mike harris, the president of wners ll and Company Joining u do he. Well take a quick break and talk to the traders in our headquarters straight ahead. Even if sometimes were not. Sundown vitamins. All clean. All the time. Is that pgim, we see alpha emerging in the trendsete . Driving specific sectors of outperformance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Every day, our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. More exciting than than getting a lexus. Giving one. This is unbelievable it really is. The lexus december to rembember sales event lease the 2020 rx 350 all wheel drive for 419 a month for 27 months. Experience amazing at your lexus dealer. Welcome back to the conference here in naples, florida. The Investment Committee is standing by. Guys, its a retail kind of a day. Depot is under pressure, macys, kohls home depot wasnt as bad and kohls was way worse heem home depot was at its alltime high it had to be a perfect print and it want. Underneath the surface, the 36 comp, they actually did 4. 8 in a comp thats pretty good it was very close to expectations the implied guidance is at 5 comp its not down enough for me to buy or add to it but its something ill watch and look to buy if it continues to fall. I think kohls is a mess, amazon, private label, the loyalty card, it just not driving traffic. Thats a real problem for them im having flashbacks, steph, to you talking about say a mcdonalds or a disney and looking at the runs that those stocks had and lightening up your positions, in fact selling out of mcdonalds altogether, wondering whether you wish you would have done the same thing with a home depot after what you mentioned was a run to an alltime high. I think the duopoly is unique to them. 22 times is not cheap. Youre absolutely spot on but i dont want to give up on it. Housing, the numbers were quite good thats a theme i still like. Doc, whats catching your eye on a day where the dow is down the 90 or so t. J. Maxx, new 52week high ross stores is just way from a 52week high and im looking chewy in the pet space they are buying the 22 1 2 calls, big nuls there, really big. And the stock is moving up its a surrogate, id probably be that about a month, scott that was your unusual activity for the day thank you for squeezing that in. We appreciate that how about you, joe market bounces back once again after home depots earnings if there was a reason for the market to go down, home depot gave it to them this morning im out of masco thats an area of concern. Tjx, i purchased that today. Consumers fine, especially if youre looking a the off price the market is enjoying growth and value and of Course Technology once again. So critical to the comments of the last few days, i think the chase for performance and the higher move continues. Jimmy, let me ask you your reaction about this expectation of a return of volatility between now and the end of the year when frankly weve been talking about whether its a chase for performance or the trend feels like it higher how do those counteract one another. What do you see . Conceptually what theyre seeing makes sense but empirically the markets are behaving really well despite the fact that weve gotten wobbly on trade and this should be the catalyst for volatility and it isnt. I think you got to take the easiest, most simple explanation, which is that low volatility will continue through the end of the year. Thats the path of least resistance, higher markets, lower volatility. Well, well see thats what makes a market, different points of view lets do final trades before we go steph, start us off today. Stanley black and decker, the stock is down in sympathy and its a great opportunity theyve done enormous restructuring, almost 1. 80 in restructuring and i like the m a strategy as well dr. Jay scorpio tankers, a lot of up buying yesterday and today scott tjx is there, master card and paypal growth is coming back jim cvv contins continues to do l despite political pressures. That does it for us here in naples, florida. The exchange begins right now. Thanks, scott welcome to the exchange. Im Andrew Sorkin in for kelly evans. Technicals say we are way overbought is a bubble forming . The consumer may be strong but that doesnt mean everyone benefits a look at the haves and have t nots but we
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