The moves weve seen markets everywhere were rattled by this news look at the treasury market. The tepyenyear went all the w down to 1. 89 . This morning the yield is lower, 1. 847 this is happening as you look at yields rolling back to levels we have not seen since november of 2016 the 30year is yielding 2. 377 the twoyear is at 1. 70 the five year at 1. 648 overnight in asia, stock theres took it hard you will see that the nikkei was down 2. 1 . The hang sens off by 2. 35 the shanghai was down by 1. 4 . In europe this morning, there are red arrows there as well with significant losses. The cac is down by 2. 75 the dax is off by 2. 6 the ftse off by 1. 9 so around the world all of this, people are watching closely to see what this means for the economy. Maybe no better market to see that in than the move in crude oil prices yesterday wti was off by more than 4. A decline of 7. 9 . Thats the worst single day performance since february of 2015 concerns about what this all will mean for the Global Economy. This morning wti rebounding a bit. Up 2 . It said slapped in the teleprompter slapped you slap a tariff you are used to slapping it on the schiffhips so i can refinance my mortgage i can fill my tank cheaper and the stock market is down. My comcast anything you want to buy as a consumer will be more expensive. Lets show you what happened yesterday exactly. Schumer is happy. You should be happy. I know schumer is happy the tweets that sparked the selloff. The president said nergs thougo thought they had a deal with china three months ago he said china had not followed through on promises to buy u. S. Agricultural products and stop the sale of fentanyl to the United States. He said during trade talks the u. S. Would put a small additional tariff of 10 on the remaining 3 300 billion of good and products coming from china into our country the president spoke about his tariffs threat at a rally last night in ohio. Weve been losing hundreds of billions of dollars a year to china. It has to stop they understand that president xi is a good man hes a friend of mine. He understands it. Until such time as there is a deal, we will be taxing the hell out of china thats all there is. With friends like these, right . Earlier we showed you the reaction in blue chip stocks retail names were the hardest hit. Check out some of the names that you need to watch including best buy. It fell 10 on the tariff news, office depot, kohls as well breaking overnight we want to show you and get over to china china did respond to President Trumps new tariff threat. Eunice yoon has more on that thank you very much here in china people are using a popular chinese saying to explain President Trumps decision they say that President Trump changes his mind faster than flipping pages on a book so chinese officials not as generous Chinas Commerce Ministry said that the move was a serious violation of the consensus at the g20. The countrys top diplomat called it a move that was neither constructive nor correct. And the foreign Ministry Said that beijing would be forced to take countermeasures its that last point that has been really worrying a lot of american businesses here in china. The u. S. China Business council said their members are most concerned about increase regulatory scrutiny, delays in licenses and approvals and discrimination in Government Procurement tenders. Retailers say that American Consumers will be hit hard but chinese manufacturers are wor worried about their bottom line. System of them say the 10 tariff, even though its not as bad as what could happen with 25 , it is still a blow to their business one in particular that makes goods for Christmas Gifts for American Consumers said theyre thinking theyll have to pull out of the u. S. Market altogether in terms of the trade deal itself, theres a lot of reports in the stayed media, particularly the global times, which said at this point the new tariffs would only lower the prospects of a trade deal and that beijing will hunker down instead for a prolonged trade war. One more point id make, i spoke with one academic who closely watches the trade talks on the chinese side, he said that what hes most worried about is the chinese negotiating team Wont Take Part in this september meeting that is supposed to happen in the u. S. , between the u. S. And china on the trade deal if these tariffs go through. Eunice, was this a situation reading it from the sidelines, it looked like there was no progress made in the talks, the president President Trump hinted that, look, theyll wait until the election an see what happens i guess maybe this is inevitable if you are looking at a situation where things were freezing up any way. Well, i mean, what is interesting here is that theres been a lot of talk about how beijing is probably going to wait things out at this point. That there wasnt a whole lot of progress made. That experts say china wasnt going to make dramatic changes to its economy and the way it runs at the end of the day, you know, in state media today there were stories will pow americabout hon consumers will be hurt the worst. Beijing is watching this so theres a sense beijing has more time on its side and would be better off to wait things out. Well talk about it quite a bit. Well have different guests on there will be fred kemp is coming on. He says that he thinks its sort of the opposite view. The u. S. Can fair this better than china if you are going to wait, its still a year and a half away try this on for size, this 10 on 300 billion see how that feels hes trying to make it not an option to weight for now more on the president s tariff announcement and chinas response, lets bring in Leland Miller of chinas beige book international. The president said the deal they almost came to, there were 30 things they didnt do. They also said they would start buying grain immediately havent bought any he also got a promise for fentanyl, that president xi would do something for fentanyl. President trump says theres been no progress in that area. Its still flooding in and people are dying is it possible that all along weve seen this for quite awhile, youre a china expert, theyll nod and say, yeah, well do these things when they have no intention perhaps of doing any of these things and theyre on a mission to get where they want to get by 2025, and by hook or crook theyll get there is that whats happening here . Look, the chinese would love nothing more than to talk and do nothing. I think theres another dynamic at play. If you have a timeline not rushed, so the chinese dont see no elections, president xi is fine nothing coming up you dont have politics on the chinese side, but you also dont have a deadline to end talks they didnt think there was a new tariff deadline hitting, so youre about to take a multimonth hiatus off from the talks because of the chinese holiday in october so they were never going to do anything in september or october any ways but of how politically sensitive that holiday is. So the chinese looked at this and said were not getting into the hard negotiations, even if there is a deal, until november or december. Why are we talking about the text right now lets go some ag buys to buy off the president , get some concessions on huawei and depending on what happens so youre saying he saw that move for what it was and said okay, take another 10 on another 300 billion . I think the chinese didnt play the game well instead of having some sort of pretend move, the chinese sat down and they didnt want to talk about anything except agricultural buys and huawei theres no acknowledgement of going back to the old text lighthizer i think returned from the meetings and said this is propaganda we looked at the pictures of them all standing together, and it basically looked like all of them thinking, okay, how will i go back and report this . Dont you think that you will play the long game against china, you will lose maybe we have much more threshold for pain is the thing. Thats the thing. I think their economy can get hurt more than ours, but in general theyre ready to play the long game more we definitely have shortterm considerations over here no question thats been the problem from the beginning. Theres a new Deputy Sheriff are in town, his name is the fed the fed by Jerome Powells own explicit words has back stopped President Trumps trade agenda you could argue this is a good thing or a bad thing, but hes told the president if you make things bad enough well step in and back you Going Forward so this is completely changed the president s trajectory in terms of how much brinksmanship he can do. You dont think this is a coincidence that this happened after chairman powell not at all. I think if there was a 50 basis point hike, he would have delayed this more. Really . Yeah. I dont understand that these guys came back and told him i think he got p. O. d when it was after 11 30 yesterday it seems like it was impulsive. They met, lighthizer and mnuchin, i think they delivered the tweet was uncharacteristically muted in terms of what he was saying mnuchin wanted to say we need to alert the chinese were doing this trump said no well just come out and do it. The olive branch was there he may not put these on if he if china comes around seems like he laid out a path for china to avoid this. Start buying some of these agricultural goods, do something on fentanyl, then we can save face the falks wetalks were not constructive and the fed did not listen to the president. When theed if markets reacted t fed announcement, the president was happy to lay it on, lets get a bigger market hit and ill get my 50 basis points cut in september. You have the beijing view which is just let this roll through the election and trump also seems to think that he should let this roll through the election who is right i think why do they both think the same thing its a very strange situation. It is its different from a few months ago. The chinese economy has strengthened since the end of 2018 2018 it was a mess they spent a lot of time, effort and resources to build it up what President Trump is looking at now is hes looking at the democratic field hes saying to himself if im going against sanders or warren or one of these protectionists, i have to be the protectionist on that stage. I cant get outflanked hes trying to position himself in a way where he has flexibility on a deal if joe biden is the candidate we had people come here and say if this deal happens after the election and trump is still in office, its worse for china. Is that right or wrong i think if this thing is stretched down the road, the president doesnt need the ag buys the need for the president to demand big purchases before an election goes away theres probably a need for more substance. Structural reform wasnt on the table now or before. It wont be on the table in the future this goes to the question what do they want from a trade deal if the president is happy with getting agricultural purchases, a push back against the trade deficit, in the shortterm he can get himself a deal if he thinks hes changing chinese behave yr ior on s. O. E. , thats not going to happen thank you coming up, well get you ready for todays jobs report. You thought the news was over for this week . Its not well tell you what the jobs report could mean and how it could complicate the feds moves for the rest of the year. And coming up well talk to former white house chief strategist steve bannon. Thats coming up at 8 00 a. M. Eastern time as we head to break, a look at the premart kket winners and los in the dow chevron is leading the way along with exxonmobil, rebounding from yesterdays losses were changing whats possible every single day. , and if you run a business, that means a lot. We create Financing Options for your customers. 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A new round of tariffs on china sent markets tumbling, and todays jobs number could further complicate the feds plans for Interest Rates joining us is Jim Osullivan and matt toms. Matt, i want to start with you, your assessment of where the market stands, where valuations stand. Do you think the market was correct in its assessment of valuations on wednesday before we heard from the trump tweets, before we heard from Jerome Powell do you think the markets assessment is correct today . More correct before the tweets we think the fed will do whats necessary. The market was bouncing become ahead of those tweets, its now overreacting to trade rhetoric that will stoke from time to time and fall away we dont think that will get overly heated. We think this is a overreaction to trade fears and a buying opportunity. You think its an overreaction because 10 tariffs are not a big deal for the u. S. Economy or the Global Economy or those 10 tariffs never happen they may happen its more likely they dont. The dominant strategy by the u. S. Administration is to elongate this battle we dont think a victory is needed ahead of the election better to have an enemy that you can poke atascaderan tit time a. Most people thought President Trump would like to see a victory on this sooner rather than later, so things dont rise up and rattle markets and the economy between now and his election you dont think thats the case . We dont. Its easy to stand back and say you dont like how were fighting the battle, but who else will do it. Its a strong strategy lets talk about the fed and the position jay powell and company are in now they told us they would be watching to see what happened with the trade talks they would be watching to make sure things didnt get worse if they get worse, are they obligated to step in and cut rates once more . Theres no question that yesterdays news increases the likelihood theyll be going ban in september this is in context of whats happening on the numbers front the fed is easing, but not dramatically easing. They view those trade tensions as a drag on the economy the economy is clearly slowing on the other side the prod econobroa economy has held up reasonably well every number that comes in, is it showing the broad economy weakening a bit or not with trade tensions intensifying, the likelihood of them going in september is even more the next piece of data is the jobs report in about two hours time what number do you expect . What would be a number that changes the equation of course monthly numbers are volatile well get another employment report in Early September before the next meeting last month employment was much stronger than expected we had 224,000 on payrolls i dont think the trend is that strong there is some slowing here if anything were due for a belowtrend number. We have 140, its a bit below consensus. The one thing to watch for, we could start to get hiring for the 2020 census, which could be temporary hiring and boost the number people should look at that numb number matt, the stocks under the most remember sure yesterday were energy stocks, concerns about the broader economy there an trade sensitive stocks, smuktesmuk e smu smu semiconductors and retail. Things that are tied to commercial real estate, things like housing related, they have a tailwind from this low rate structure and the pinch lower i rates to offset the volatility but the Pressure Points and selloffs, you have retailers down more than 10 Oil Prices Dropping dramatically you wouldnt be willing to step into those areas even though weve seen the biggest pullbacks there . I think there will be opportunities. This has a bit more to run it will create opportunities were not courageous enough to go to that front end, any weaker in stronger assets is a good opportunity. Thank you both. Coming up, activists in the cloud, well break down the latest investment from carl icahn and show you how the stock is reacting. Thats next. Time for the executive edge. And weve got a stock mover. We dont have stock movers to tell you about toyota, the automaker reporting profit rose 4 in the First Quarter. Sales improved but they did fall in north America Toyota lowering its forecast blaming Unfavorable Exchange rates. We have activist news to tell you about carl icahn disclosed a 12 stake in cloudera. Cloudera was founded by engineers from google, facebook and oracle and yahoo but they have struggled to shift to the cloud. They are 10 on the news, but they have come off the highs they are less than half of what they were back in march. This is still the executive edge were still there i thought i got to do the executive edge no, you get to i get to do one part . Yes i dont get to do this part this is my good luck. Comcast announcing a new universal theme park in orlando, florida its called epic universe its the largest investment comcast has made in the theme park business. It will be located on a 750 acre plot of land its across the street from where the existing campus is to find that much land that close to your existing park is kind of phenomenal what do we know . We know how many workers, but what is epic universe . What does that mean . Its epic going to be an empic park do