Getting hit. Hi, eamon. Yeah, as of this moment, the feel iing in the building is th they are still tracking and expecting some kind of response from the president to the chinese tariff escalation of this morning which happen nd the premarket hours. Now aides are telling me they dont know what the president is going to do here they dont know when hes going to do it and they dont know what the format is going to be are we going to get a tweet from the president this afternoon see him behind a lectern here at the white house . A piece of paper from the press office no real planning for what thats going to look like but the expectation a is that the president is going to respond. We know the meeting with the president s team has wrapped up now and you can take a look at policy advisers who were in the room with the president as they talked about all this. Mnuchin, larry kudlow then Robert Lighthizer and Peter Navarro on the trade team specifically all in the room with the president for a considerable amount of time earlier today. As they work through what policy options are here so presumably, well hear something from the president , but been taking to twitter throughout the day today to make the point ultimately that he wants American Companies to pull their supply chains out of china. In fact, he used the term order American Companies to take their supply chains out of china he says i hereby, american xaeps are hereby ordered to start looking for an alternative to china and hes going to offer a response to those this afternoon. Were waiting for what that might be where does the power to order that process reside . I mean it doesnt right . There is no Legal Authority for the president to simply tweet that American Companies have to do one thing or the other. I mean there are a couple really exotic options that the president could use. I mean in theory, he could try to move the tariffs to 100 on chinese goods and that could remoove move the supply chains y default. Thats an extremely unlikely thing. In world r war 2, there were nationalizations of American Industries cant see that happening here in any realistic sscenario, so legally, he doesnt have this authority unless he goes to something exotic which is unlikely there are so many question marks as to what the president could do another tweet that sparks a speculation. He tweeted something to the effect of we have a strong dollar in this weak fed and hes going to deal brilliantly with both which raises the prospect of currency and intervention recognizes the fact the administration has changed its mind say on a number of different niche tiinitiatives. Whats the latest on where it stands with any effort when it comes to the currency market just reading between lineses, my assessment is that mulling over a variety of options. We dont know what was considered or what theyre going to land on here. Some kind of currency effort in the cards, who knows the president tweeted he didnt like a strong dollar which is up like anything weve seen other president s say publicly before. Larry kudlow last night here on the driveway told me no, no, its not that the president wants a weaker dollar. Its that the president wants other countries to stop manipulating their currency, but the president did tweet hes not a fan of the strong doll already. Are you are. The president wants american exporters to be able to export and a weaker dollar would help that is he prepared to take steps its risky, but this president seems to be willing to roll the dice and sort of take a risk what is the likelihood at least speculatively, that the trade discussions that are slated for Early September in washington will still take place . As of last night, i asked larry kudlow that also he said they expect the chy these delegation is coming here in september, but did not give a date for that b and its not clear the chinese have accepted that and are committed to sending a delegation kudlow saying there are news conversations back and forth at a lower level so therefore, they are continuing to expect the principles are going to be able to engage in september, but we dont know, we wont know that until we know. Right. All right, thanks very much from the north lawn of the white house. Markets now where the seema is taking a look at the stocks getting hit its worth noting we are off the lows of session. The dow dropping more than 500 points after President Trump ordered u. S. Companies to look for alternatives to to china in response to unveiling a new round of tariffs President Trump specifically telling shippers to look r for alternatives and thats weighing on shares of fedex multinationals with heavy china exposure apple, caterpillar and deere remember, these take aim at a number of agricultural goods those is to bes weighing on dow and retailers like best buy which warned in may that more tariffs could cause them to raise prices also a number of hong kong, italy, to a hard brexit which suggests the fed is keeping a clees eye on these, but powell did stop short of given a clear signal that a rate cut is coming now we look to the twoday meeting on september 17th. Tyler, right now, down 492 on the dow. Back to you. Thank you so much lets get now some more reaction to chairman powells speech and mr. Trumps comments on china and the fed an chair and what it means for your money michael farr is a cnbc cnbc contributor. Jack is with crescent wealth and ron, an analyst and Senior Adviser to schroeders na. Welcome to you ron, let me begin you. It has been a week where you kind of scratch your head and say what is going on here . We began with zdiscussions of purchasing greenland yes, were doing to do that, maybe we wont now a trade fight. There seems to be a real messaging issue in the white house. Zpling it goes way past messa messaging. There are no tactics this seems to be an entirely seat of the pants style. Way of governance in which whatever strikes the president in any given moment, gep, the chinese suggest theyll retaliate. We dont know what hes going to come back with today the notion that you can order American Companies to stop doing business inchina and kis ru disrupt a Global Supply charn chain with a tweet ar argues the president doesnt understand the economic implications of what hes saying. Those things taken together seem to indicate that policy is entirely unmoored. It is unusual to say the least, michael farr, for a u. S. President to describe a person as early described as his good friend, president xi, and the fed chairman of the United States as especially mys weve seen some remarkable comment frs this president i think from a markets point of view, we can get bogged down many the parsing of what he tweeted today and a lot of it leaves us really scratching our heads chlg i think as investor, we have to step back and say wait a minute, we have been seeing this since President Trump really took office he has a unique style of governing and negotiating in public whether you look at his comments that he was going to put a tariff on everything out of mexico or you fill in the blank from the last half dozen tweets. Markets react quickly. They go down quickly then somehow over the next week or two, things getten outside and tends to go on weve seen a change here, right . Weve seen a change in the trade gone from trade rhetoric to china to china let iting curraey drop to saying theyre not going to buy anymore imports and this now has gone from the name calling stage in the playground of the sticks and stoeps stage in the playground. Its not a good thing, but going back to chairman powell, i thought he did a great job and the rest, boy, investors have to take a deep breath i think prozac sales must be surging. In interpretterms of the vol, the rubber hits the road many september, typically, ceos make decisions about whether or not theyre spending or how much with the backdrop of this volatility, do we run the risk that these ceos pull back . I want to remind people of the comment, we can talk ourselves into a recession at this point in fact, its already happened if you look at last quarters gdp, we lost one percentage point on annualized growth because business spending just didnt really happen and so any uncertainty is going to make Business Leaders you know hesitate from taking out their checkbooks you know, ron, before we get too deep into this lets remember, over the past week, the s p is down 1 the dow is down a half a percent. The nasdaq is down 1. 5 . So through all of this, thats where we are were about 6 off the highs in a months time thats a correction. Sure. But it feels speech, his behavi behavior, his tweets at some point theres going to be a straw that breaks this cam camels back then he decides to put tariffs, japan and south korea, just pulled back its intelligence just remind us of the set up. In terms of were ramping up for the trade tensions increa increasingly a year in 1995, the fed raised rates for that, you had the peso crisis, the bankruptcy of Orange County in a major Market Company that broke the buck. In the asian currency crisis, bo both and what we worry about is, maybe not in this country, but the fact that weve been able to print roughly 13 trillion of paper globally and buy bonds without much could potentially i am curious as to what lowering for a Business Community that does seem to want to invest. That the impediment to investment the price o money so i think you just answered your own question. The important hing, wethe consumer spenlding has sustained us thats been keeping this bull market going Consumer Sentiment has started to drop. If that consumer spends starts to trend lower, then youre going to see i think our Economic Future get even murkier. This is a difficult time and im sorry, mr. President , your tweets arent helping today. Confidence is a fragile thing. Retailers that are doing well, that comes at the end of a cycle and at the bottom. Not when were starting on the uptick so i think some people may be misinterpreting the strength of the earnings weve gotten from retailers like target an walmart and others who arent on the highend of the pricing spectrum all right have a good weekend. I think im here for a while. I think youre coming back. Michael, thanks very much. You u didnt even mention joh johnson johnson. Jack, we appreciate it as well. Doing great, doing great. I was going to ask you what to do with your money but i know the answer johnson johnson. Thanks, guys weve got a news alert on a Small Business reaction to the trade war. Lets go to kate the group of Small Business councils, president and ceo out with a statement to b cnbc that reads in part the trade war with china was slowly chipping away at Small Business confidence and these unprecedented actions tweeted by President Trump will only accelerate the downturn in Business Investment and confidence it will then hurt Consumer Sentiment. She went on to say china continues to goose the president with the retaliatory actions an words an sometimes their bark is stronger than the bite a more sober response would show whos in charge. So Small Business group here saying this will take confidence down a leg lower if this continues. Thank you coming up, meet sneaker stocks getting kicked while theyre down today first foot locker missing on easte earnings weve got that story and all the moves covered for you. Stay with us on piano. Welcome back the trade war hitting every pocket shares of foot locker are taking today after disappointing earnings they arent the only smeeker Company Feeling the pain sketchers, under armour, nike, adidas all in the red. Should investors steer clear of these names . Joining us now is erin murphy. Great to have you with us. Thanks for having me on whats the reality of the exposure of these companies to tariffs . I think it varies by company. From our perspective, the wups best protected are Companies Like a nike where when you look at what theyre importing into the u. S. , its under 10 to china directly vietnam is a much bigger market for them from a sourcing perspective. So they kind of stand out as an out liar the companies that have more Immediate Impact foot locker has a decent private label business we believe a decent portion is sourced from china directly then as you look across outside of athletic footwear, its Companies Like steve madden and g 3 which have f a disproportionate amount of production 63 in china lets talk foot locker. Earnings were disappointing, but its another leg lower based on the trade wars and im wondering how much of this is the terrible quarter. How much of this is the trade war and is this is this warranted . 17 decline in one day sure. So i do think the majority of their decline today is much more on some of the structural challenges of their business when you look at whats happen ng the ath lletic market overal its really healthy market just r more and more of the trend rs happening and the transactions are happening on dtc. So vendors like nike that have f really strong correct and so have strong online businesses i think at the core, thats whats driving the majority of the decline. Also the teariffs dont help chi think thats 4 incremental risk numbers. Youve got a hold on this cut the price target down to 33. Now trading at 34. 86 why not put a sell on it is. Its agood question the stock is really coming in quite a bit. I think were waiting to see if they can have any momentum in the near term from a product perspective. On the conference call, they were positive the Third Quarter, they maintained their guidance, up for the Third Quarter based on what theyre seeing down the pipeline were going to track to see how consumers are respond, but our longer term bias is cautious at this point in your model, your estimates for foot locker, do you take out, what is the impact of that private label business in china and if they have to pay tariffs and what happens to that sure. So we took the number for next year, which youll see more of the impact for to 478. Our perspective is that if we move to 10 , if they cant mitigate that, its probably about 4 decline from earnings from there so thats still to come. The its not in our estimates nor in their model your top stock . Top stock, nike and via those are the two names we look at for safety. Zpl thanks for your time thank you so much stocks getting slammed on a major es calation in the trade war between the United States and china. The dow down 508 points caught in the middle are automakers targeted by china. What it could mean for those stocks its not really positive coming up on power lunch. Gm and ford in the danger zone as the trade war escalates again today. Those stocks tumbling after china announced it would resume a tariff on autos in december. Lets bring in bill and steve. U. S. Automakers, concerns about where we are in the auto cycle and exposure to trade flows in general. How udoh you see the stock set up right now theres too much uncertainty around the auto sector to call any of these stocks a buy, but lets look at gm now you have a trend line higher going back from august of 2015 and this could bring good value down to 32, but as well, theres an interesting way to look at it take a look at the etf rxi that gives you way the diversif without risk and ford and gm are 2 of the etf. That has a good support line coming in at u 11 112 as the chart woul show. So i think thats a good place to look to get some exposure in autos down at 112. It seems to point out that the auto sector is is not necessarily benefitting, at least the stocks are not benefitting from a very strong u. S. Consumer and very low Interest Rates and the way you might expect from previous cycle, the stocks look cheap base ed on current earnings. Youve got to be effective, both housing and autos are doing less well than you would think given loan unemployment, strong wage growth and low rates. When you think about the tariff issue, the announcement isnt a big deal the bulling of the business was done in the United States. The bigger deal might be what comes this afternoon because theyre implementing a lot of goods. Steel, aluminum, its the import tariffs that are really hurting this group of course we had the president extorting u. S. Companies to kind of disengage from chind theyre very much entrench there had so we have to see how that plays out thank you very much. For more trading nation, head to our website or follow us on twitter. Kelly, back to you thanks. Coming up, the carnage continues. Take a look at the 11 s p sectors all lower as stocks sell off amid trade escalation with china today. The tech sector is the days biggest laggard and its led down by the chip stocks which are caught in the middle of this trade war. Amd, nvidia, broad com sinking were tracking that turmoil right here on power lunch. Stay with us welcome back im sue herera heres your cnbc news update a victory for supporters of the keystone xl pipeline the Nebraska Supreme Court affirming the arolle regulators approved the route almost two years ago but lawsuits over permits an Environmental Concerns have held up the project the worlds First Floating Nuclear Power Plant built by russia setting sail today in transit to the arctic coast pt it sits on a platform that carries two Nuclear Reactors its coming under fire by environmentalists who say it is unsafe and they call it a floating cher nobonobyl. Nasa images picking up a number of amazon rain forest fires. World leaders are expected to take up the issue and urge bra