Brian sullivan is reporting live for us from hong kong today. He will join us in a few moments. Behind me you can see the dows action from yesterday shedding more than 800 points for its fourth worst point drop on record, closing down by 3 or so after yesterdays historic move, here is how your money and the Global Markets are setting their day up today stock futures indicating the dow will open higher some stability brought to the markets. Interest rates are a huge part of that market story the dow jones up by 136 points we lost 0800 yesterday. Yesterday we saw the socalled inversion of the yield curve the twoyear treasury note and the tenyear treasury note yields, this means shortterm bond rates are now paying more than longterm bonds, historically this is considered a possible recession warning sign and new overnight, the yield on the 30year treasury, the long bond in the United States, dropped below 2 for the first time ever. You can see right now currently 2. 016 that move lower, all the way here to a historic level we have breaking news from hong kong and Brian Sullivan is all over it. He joins us now with that news brian . Yeah, dom, thank you very much this is unexpected this is breaking right now it came out of the Hong Kong Development and the Chinese Government theyre implementing wideranging and sizable economic stimulus measures to try to undo some of the damage caused by the trade war, by the unrest they also name brexit in here as well some of the issues that are in the middle east. Either way, breaking news right now. Well see if this impacts our markets. Its 5 00 p. M. Here. The hong kong markets are closed its a long document this just crossing from the government of china. As part of the economic stimulus measures, theyre going to be doing things like cutting individual salary tax level, basically taxes on individuals will be cut. Theyll provide Social Security allowances, free rent for lower income residents free kindergarten. The possibility of a Public Works Program as well. Cutting 27 different fees and taxes on various Government Programs they estimate this will be a multibillion dollar stimulus package as well. Heres what theyre saying the hong kong economy faced significant downward pressure in the Second Quarter the situation has turned more austere in recent months Global Economic outlook is darkened by high uncertainties including the escalation of china u. S. Tensions, imminent risk of brexit, geo tensions in the middle east. As part of the rational for the stimulus theyre cutting the growth forecast to 0 to 0. 5 for the remainder of the year. For the First Quarter the hong kong economy came in at 0. 5 it was 3. 5 in recent years. The hong kong authorities are suggesting that hong kongs economy may grow at zero, the goose egg, for the rest of the year thus theyre implementing wideranging stimulus measures the markets here are closed. We dont have a way to see if it helps here it might help our futures it could also be done the futures are dropping right now from what i understand this could also be done not just purely as an economic measure, but also perhaps to placate some of the protesters. The protesters have been wanting a number of Different Things freedom and guarantees on that 50year plan going out to the year 2047. Thats their primary demand. They had a press conference earlier today, the protesters did, in english, where they referenced the economy and some of the slowdowns outside of the unrest caused by the protests and how its impacting everyday hong kongers so this may be done to play say the placate some of those protesters it is 5 00 p. M. Here well see if it impacts our market wide ranging economic stimulus from tax cuts to free rent to free kindergarten and a possible infrastructure plan to boost jobs as hong kong authorities have cut their growth forecast to zero spent growth hong kong, only 3 of the chinese economy, as you well know, its the keyhole to the western Financial Markets. Certainly punches above the weight economically. Well have more as the day goes on for you and the night goes on for us in hong kong. The government building over our shoulder Brian Sullivan, thank you very much for that well hear from you all morning. We want to call your attention to whats happening. As brian pointed out weve seen a deterioration in the futures market in the United States. Now the news out of hong kong probably plays a little bit into that among multiple factors. When we walked in early this morning we saw the dow jones implied open to be just up about 120 to 160 points in that range. And now were implied to open up by just around maybe 30 points or 40 points we did dip negative at one point as well. Well keep a close eye on the futures. There was a move lower, fairly sharply over the course of the past five or six minutes well keep a close eye on that well have Team Coverage from around the world this morning as we look to cover the biggest stories having an impact on your money. Joumanna bercetche is watching the early trading action from europe shes live in london matt taylor is tracking the overnight aslan mian market act. Matt, we start with you. Thank you very much for that. A number of markets are ending the session firmer here in asia. As we saw u. S. Futures rebound you were just telling us about the story now with futures winding back a bit i want to focus on the japanese bond market. Were talking about what happened in the u. S. Bond markets. Safe haven flows into jgbs pushing yield theres to multiyear lows, the 10 and 20year jgbs yielding the weakest level since july of 2016 the japanese market, one market closing in negative territory, off by 1 . Safe haven money going into the yen. Thats always negative for the japanese market. Look at the australian market. It was the worst performer around the region today. Having its worst day in three years strong jobs numbers there perhaps dashing hopes of a nearterm Interest Rate cut from the central bank in that country. China markets is where all the action was the shanghai composite closing higher the fix on the yuan was above the 7 handle relative calm restored to the china market the hang seng was up by close to 1 back to you. Thank you very much for that. Joumanna bercetche now tracking the price action in european trading joumanna, we have seen a bit of negativity there now whats happening thats correct. Its happened in the last ten minutes or so. Some headlines flashing that china are considering counter responses to the u. S. If they do go ahead with those tariffs in december that has actually sent all of these indices lower, just in the last ten minutes or so earlier the theme was one of stabilization. We were trading around the flat line things have turned negative in the last few minutes ftse 100 down 0. 8 this is an index that is oil and gas heavy. Some of the major underperforming names are in that basket. Xetra dax down 0. 6 . A lot of focus yesterday on that weak gdp number. We saw the contraction for the Second Quarter gdp as well as some weakness in some banks because of the move in fixed income also worth mentioning the spanish index is down 0. 6 the italian index is closed for holiday. That gives you an idea for system of the pressure on periphery indices. Lets go to the yield action similar to the u. S. , all the focus was on what was happening with european fixed income the german bund, minus 67 now. This is another new record low anyone watching this, if you track the european banks index versus the tenyear bunds, you will see the two are closely correlated the more this Interest Rate moves lower, the more you see the european Banking Sector get hit. Also worth bearing in mind, we have the gilts at the end at 44 basis points we talked about u. S. Yield curve inversion. The uk market is also inverted, twos and tens is at minus 3 basis points some other things to think about. Spain is within 14 basis points of turn noing into negative territory. The bid for fixed income in europe continues to persist as we see negative sentiment take over equities. Back to you guys Joumanna Bercetche live in london, thank you for that. Lets bring in gina sanchez, a cnbc contributor, and bill zox from diamond Hill Capital Management gina, hong kong has cut its growth forecast. Its taking stimulus measures. Now were getting headlines saying there could be Counter Measures to counter the u. S. Trade tariffs of 10 on chinese goods coming out is this an environment still where you want to be long u. S. Stocks and buying dips as they occur . If you look at how this market has been setting up, a lot of people have compared the selloff to december. A lot of things are different. The tax stimulus has not only happened but it is fading into the distance second you have valuations that even though theyve come off obviously in the last couple of days, theyre still high relative to where they should be you have a fed that essentially with this mid cycle correction has communicated to the world that the recovery wasnt Strong Enough to even get higher than 275. None of that stacks up for it being positive its hard to bring momentum back into the market and get positive now, do we think theres a recession happening . Probably not i think its hard to continue to buy this market right now. Bill, if a recession is not happening, then there should be a reason that we can continue to see risk assets go higher. One thing weve been noticing now throughout the turmoil over the past few days is that high yield fixed income markets have held up well compared to other parts of the market. Is that a sign credit markets dont fear as much as the stock markets do you do have this divergence between what the Government Bond markets are telling us and what risk assets like stock and highyield bonds are telling us. My concern is that that divergence will be resolved in favor of the Government Bond markets which are saying theres an elevated risk of recession over the next 12, 18 months. Bill, to follow up on that, is there anything that you see there that indicates any kind of a duration or perhaps how long it will take for that recession to actually play out given the view on the fixed income the markets and rates . Typically you need to see this inversion the twos to tens i think is the right place on the yield curve to focus you need to see that inverted for about three months gina, if the risk of recession is elevated, you dont think it will happen, but if it does what should you be doing to position for that . Its very rich in the Government Bond market right now. Were already seeing the haven trades play out in gold. Are there places within the equity markets or emerging markets or elsewhere that seem to be attractive to buy on sale . You know whats been fascinating about a lot of this and while i do say that were not expecting a recession there are catalysts out there that could cause a recession dont want to underplay those. There are things that could happen the trade war certainly among them quite frankly a crisis of confidence in the dollar is another. When you take that sort of where do you hide . We have seen gold get bid up we have seen, you know, crazy places like bitcoin getting bid up thats the ultimate bid against currency however, you know, we actually i want to start first on the riskiest parts of the market i think highyield has some resolution that needs to happen. Thats very risky. One place that you can potentially hide in these markets oddly is going to be value. It is so undervalued right now if you look at the value side granted it will still get hit and it will still hurt, in the equity trade we have not seen the kind of divergence weve seen growth to value in a very long time. I think theres a lot of unlocked value in the value side of the market. Bill, before we let you go, what happens to tenyear note yields do we continue to see down side . If so, how far could it go i think over a long period of time the tenyear offers no value. In the nearterm, until the trade issues are resolved to some extent, i think the most likely move is for the tenyear yield to keep coming down. Thank you very much for those market thoughts. Appreciate them. When we come back, much more ahead on the markets and your money, stocks look to recover from the worst day of the year we dig into the forgotten sector, some consider it the life blood of the u. S. Economy plus well head to hong kong and Brian Sullivan yeah, we have some big breaking news here the Hong Kong Government basically saying there will be no growth in its economy this year and they are ins tutituting masv economic stimulus. The futures dropped on that output cut will those stimulus measures, once the market has a chance to dig in, will that turn things around well give you up to date notice on what those measures are, what they hope to accomplish and maybe a change of tone from President Trump about what is happening here in hong kong with regard to the trade war. A lot happening on this side of the pacific ocean. Well bring it to you as Worldwide Exchange retns ghafr isur dear tech, lets talk. We have a pretty good relationship. Youve done a lot of good for the world. But i feel like you have the potential to do so much more. Can we build ai without bias . How do we bake security into everything we do . We need tech that helps people understand each other. That understands my business. Weve got some work to do. And we need your help. We need your support. Lets expect more from technology. Lets put smart to work. Welcome back in. Good morning heres how you and your money are shaping up stock futures now pointing to modest gains nasdaq futures briefly turning negative on that news out of hong kong and headlines regarding china and possible retaliation for u. S. Tariffs right now the dow jones would open up about 28 points. Lets go to Frank Holland with a closer look at one beaten down Industry Group and ask what the transportation stocks tell us about the Global Economy and the Global Markets at large. We know the trucking stocks in general have been feeling the pinch of the trade showdown with china. Yesterday facing more uncertainty as a proposal for new federal regulations for truckers was released. Jb hunt having the worst day of the sector falling more than 3. 5 land star, old dominion also underperforming. Schneider fell 2 . They have lored fu lowered full earnings guidance. Norfolk southern seeing the biggest impact during the selloff, down more than 3. 5 all 20 of the dow transports finishing in the red, including fedex, down 3. 75 . Avis having the worst day, down 7 back to the trucks and the rails. These companies will be looking to the Holiday Shipping rush to boost volumes and rates. Since january rates for truckers have fallen nearly 7 for contract hauls, nearly 8 in the spot market. Deep declines there. A true indicator of the economy and whats going on right now. Still on the deck for the show, President Trump looking to link china trade talks with the unrest in hong kong. Brian sullivan reports live from the region coming up next. First, as we head to break, check out the worst performing sectors yesterday. Financials, energy, materials, Consumer Discretionary well be right back. Take prilosec otc and take control of heartburn. So you dont have to stash antacids here. Here. Or, here. Kick your antacid habit with prilosec otc. One pill a day, 24 hours, zero heartburn. Think you need to pay prestige prices for better skin results . Try Olay Regenerist. The rich, hydrating cream is formulated with vitamin b3 and peptides to plump skin cells, brighten, and visibly smooth wrinkles. In fact, just 1 jar has the hydrating power of 5 jars of the prestige cream. For visible results without prestige prices, try Olay Regenerist with a money back guarantee. And complete your routine with the olay eye collection. Brand power. Helping you buy better. Welcome back to Worldwide Exchange. We want to call your attention to a developing set of stories coming out of the east asia region futures now are indicating modest gains the dow jones would open up by 23 points if these gains hold into cash trading. The reason why is they were up about 150 to 160 points at the top of this 5 00 a. M. Eastern time hour until a pair of headlines came out one, that china has vowed necessary countermeasures to the u. S. Tariffs on 3 300 billion worth of chinese goods that go into effect september 1st. And also, as Brian Sullivan pointed out, that hong kong has now lowered its Economic Growth targets for the rest of the year both of those headlines causing that decline on the righthand side of the chart on your futures screen still to come, buckle up why our next guest says yesterdays dramatic move lower is just the start of more pain to come. But that does not mean there are not bright spots flashing a buy signal hell name names that you need to watch coming up next. First, check out this big number 481. Thats the dowses da daily ave range this month its double the average range logged in the rest of 2019 Worldwide Exchange will be back after this. [beep] you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. But youre not mad, because you have e trade which isnt complicated. Their tools make trading quicker and simpler. So you can take