Showed that chinas trade exports contracted for the month of august largely because entirely because of the trade war with china and the United States well hear more about that from eunice yoon in a moment. Look at whats happening with the european markets that are open and actively trading a in the point. Right now most of these markets are in the green ftse is the exception down by a quarter of a percentage point. Also f you check out the treasury market here in the United States, youll see the yields that we have been watching oh so closely as we get ready for fed next week and ecb this year, ten year under 1. 6 , 30 at 2. 07 . Some news out this morning saudi arabia now confirming it has removed its Energy Minister from the position over the weekend replacing him with the kings son and that move breaking with long time tradition and convention that members of the royal family are not appointed to that position and comes just days after al falih was removed from his role after chairman of saudi aram aramco we had conversations about what wethought was this move coming i had made the suggestion i dont think it was about separating somehow the head thof ipo the Energy Minister from saudi aramco as some internal division among who was in favor and who was not. I think that this probably suggests now that thats whats really going on. Separately and bigger news in terms of whats going on here on wall street, saudi aramco expected to give a lead role to its ipo to jp morgan according to report from cnbc. That said that Morgan Stanley ice bid for the top role was hurt by its handling of the uber ipo. Goldman sachs of course tried to get that top role. Aramco preparing to sell up to a 5 stake in the worlds biggest ipo. The saudis are going to fast track a local listing. Dont expect this to come to the new york or London Stock Exchange any time soon it would first happen there on their local Stock Exchange and then likely a year after they would try to do it on an International Exchange afterwards. Why do that is it because of requirements . I think theres the Biggest Issue about the saudi aramco ipo always has been the disclosure issues. Are they really disclosing what do people know. Theres lots of issues around how theyll deal with this back in the country this at least allows them to run the experiment a little bit and still control it. It can be a controlled experiment where as without if they went straight to the new york Stock Exchange and didnt trade well initially there could become problems very quickly. This way you can at least sort of manage it. None of the big banks are saying im out of this because of what happened to that journalist to khashoggi . Yeah. I thought about that a lot. None of them are saying, you know, not for nothing but were just not going to do this. Were going to take a stand here. A number of a lot of are you surprised a lot of kpeexecutives are gg back to its just proving the point well, i dont know what it proves it proves that none of these they may have written that beautiful business round table statement and youre proving that youre suggesting this proves this is all virtue signaling, is that the suggestion when push comes to shove we know what motivates these guys and what and what theyre going to come down with. Are you going back to the desert because you know how much were looking for an updated shot. Im not going this year. Youre definitely not, no no. Im not going this year. What is it, a matter of time . Thats a really interesting question sit a matter of time i understood why the executives didnt want to go in the immediate aftermath because both from a you could argue as a marketing perspective or whatnot they didnt want to be seen but i think they were trying to suggest they didnt think it was appropriate at that time the question is how much time. Does time heal . Do you wait to see them take other types of steps that might make you feel better about it . They havent asked anyone else in the time between when it happened. They have not. Its a fair and valid question. Its a little cynical viewpoint which i try to bring up many times. You also wonder you know theyre tripping over themselves. Oh, prince look, if you remember, years ago citi group got out of the saudi arabia after 9 11 and within several years they thought it was one of the greatest mistakes of the banks history and turned around and spent the last ten years going to the desert, kissing rings, trying to get back into the country and eventually by the way just recently got a license. Probably literally kissing rings. Perhaps. The other thing you have to realize is you have to weigh what we have spoken with tom freedman about some of these issues and his point has been is look, he has in other areas kind of opened things up, made it easier for women to do a lot of things you have to weigh all of this. Do you do business with regimes that you dont agree with all or any of their decisions or none President Trump said about selling arms to saudi arabia should it be us or russia or china . Someone is selling. Speaking more plainly than most people would in situations like that. Im not even criticizing that im just pointing it out that when that this is not surprising, that they want to be in on the aramco thats what theyre in business for. What this means on cutting back on some of the harshest and most dyed in the wool fanatics in terms of religion he hoped he would loosen that up. Everybody is hoping its a journey its a long journey with different steps and different set backs. And advancements. You had to rsvp on when youre going. When is it . You know for sure that youre not. I dont think im going its in late october, i think. Do another shout out in the hamptons. Maybe well do a shout out im not known for that shot. You should go were not talking about me. I dont go i would never go, but you went you got that great shot without shoes, by the way. I love how we air all our dirty laundry on the air talk right through. What happened to my iraq . Youre done you talked through it. Lets talk about the new trade data that came out of china over the weekend. Lets go to eunice yoon in beijing with the latest oen the trade war. Eunice, good to see you. Thanks so much, becky well the data showed that the tariff dispute with the United States continues to take its toll the exports unexpectedly fell for august a lot of economists had expected a rise thinking that manufacturers were going to front load or rush orders ahead of President Trumps september tariff deadline. Instead the experts dropped by 1 imports shrank less than expected but it was still down for the fourth nont a row. So this weaker data is really fueling expectations that the government here is going to continue to roll out more stimulus measures. Last week we saw the state council announce it was going to move forward a 2020 date for a local government to issue more bonds to boost Infrastructure Spending also on friday, the Central Bank Cut the now say its going to cut the triple r, the amount of money that banks have to have in reserve by 50 bases points for all banks and then another 100 bases points for some of tsmall city banks now they think the central bank is going to cut Interest Rates more broadly sometime in the fall not so clear as to the time. Theyre also seeing and eyeing a political event on october 1st, the 70th anniversary of the founding of the peoples republic of china and the expectation is that the authorities are going to want to make sure that growth is very steady and that it doesnt appear that policymakers are moving too aggressively on stimulus just to make sure that president xi jinping looks very confident as he goes up on the stage and has a speech on that day. Guys eunice, thank you very much eunice yoon. In hong kong more clashes between police and protesters over the weekend chery kang joins us from hong kong. Reporter good morning, joe certainly looks like business as usual near the u. S. Consulate area of hong kong. But, of course, it was a completely different scene yesterday tens of thousands actually rallied to this area. Why the u. S. Consulate really the idea is trying to go beyond the Hong Kong Government and the Chinese Government because a lot of antigovernment, prodemocracy protesters here in hong kong feel like the Hong Kong Government is not really listening because many of their demands have not been met yet. And really if you take a look at some of the slogans, the signs that they held up, its really calling on u. S. President donald trump to, quote, liberate hong kong and theyre also calling on u. S. Lawmakers to pass this legislative act called hong kong human rights and democracy act now, this is something that im going to be watching out for very much closely for weeks to come as the u. S. Lawmakers come back from their recess this week and there have been some buzzes about whether, this is going to get some real traction in washington, d. C. Really the idea is the u. S. Annually assessing hong kongs special status its really about the trading privileges that hong kong is enjoying the United States now, its a negative, of course, for the hong kong economy. Its image and reputation and status as a financial hub, but the protesters are actually wanting, calling on the u. S. Lawmaker to pass this particular act. Why . Because this is going to hurt hong kong status which in turn will hurt Mainland China as well so it really goes to show why the hong kong protesters yesterday called on u. S. President trump for his attention and also Singing National anthem of the United States, waving u. S. Flags. Guys, back to you. Yep thats happening theyre trying to you know, you dont have to do much to draw President Trump into some nationalistic theoretically natchistic conformation of what theyre doing. Theyre appealing to the u. S. Like sort of overtly, playing the national anthem, et cetera any way, chery thank you coming up, a lot more on squawk box this morning. Markets on the move and the dow and s p are just 2. 5 away from their alltime highs were going to talk strategy after the break. As we head to the break, look at biggest premarket winners and losers in the dow. Were back in a moment at fidelity, we believe your money should always be working harder. Thats why, your cash automatically goes into a Money Market Fund when you open a new account. And fidelitys rate is higher than etrades, Td Ameritrades, even 10 times more than schwabs. Plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. Just another reminder of the value youll only find at fidelity. Open an account today. Kmeef u. S. Economist at Deutsche Bank and john lynch executive Vice President , chief investment strategist at lpl financial. Matthew, in just para phrasing what i think your thoughts are, were at low rates the fed did change its viewpoint to some extent, but the tightening was already evident and at this point, they may be behind the curve in terms of where the rest of the world is and where the yield curve is, is that basically right i think thats fair we expect the economy to continue to slow the jobs report on friday showed that were seeing a continuation in the trend in slowing job growth we see the fed cutting rates four more times this year. Four more times in total. Three more times this year one Time Next Year in q1 and i think the bigger question is with intensifying trade tensions and we saw the china trade tensions its not just impacting the u. S. Its hitting china. The ism Manufacturing Index is sending pretty dire signals about manufacturing and cap x. So we see the fed taking some insurance against that. Are there three or four med meetings left this year . We have september, october and december. Only three. You think theyll cut every single time and then have to cut at the beginning of next year. Next year a different they have this policy review on going. Theyre looking to change their inflation mandate potentially. There we think they move to average inflation targeting regime one which theyre trying to get inflation above 2 . Do you think theres any chance the fed actually sees that themselves that they would try to get ahead of things by cutting by 50 bases points sooner rather than later i think its possible and you have seen a bit of a dovish shift in the hawkish member Eric Rosengren seems more open to a cut jim bullard is arguing the data hasnt slowed enough to get consensus on the committee for 50 bases points in december. Mostly cap x. Whats hurting cap x. Trade uncertainty is a trade driver the leading indicators there, export orders have plunged they have been very good indicator for cap x. A world where you have this consistent and persistent trade uncertainty, i think its difficult to see firms being willing to do big cap x. How can you see President Trump allowing the gdp to fall to one and three quarters because of something hes doing himself . You dont think he can connect the dots between the trade war and one and three quarters and his reelection . I think he can. So i think he will eventually back off. Too late . The question is it too late and how fast could growth actually snap back as a result of that. I think there is something more persistent here. I think you need to have a Firm Resolution for businesses to be willing to invest and spend again. John, that doesnt make you get out of the markets youre still looking for some levels above where we are right now in the s p, are you not . Thats right, joe good morning and i agree with your other guest. I think the cap x is really key. Weve got this trade uncertainty going on, but we still have immediate expensing of 100 . The repatriated assets a third still need to be invested in cap x it would appear. I still think from an industrial standpoint where we still maintain an overweight, get some clarity on trade i dont think youll see it any time soon. Youll have the 70th anniversary of the Peoples Congress party coming up next month its probably early 2020 to your point about th president and trying to position for reelection and position for stronger economy, i think we need clarity by the First Quarter of 2020. Got to do it by then. We got see what happens in october, right so, you dont see much in terms of the multiple stays where it is and then youre basing things on where s p earnings come in . Thats exactly right. I think its important i think all too often investors get hung up on a 16. 5 or 17 historical p. E i think the p. E. Needs to be looked at on a relative bay is to the ten year treasury or inflation. You look at the tenyear treasury yield 675 since world war ii going to use the same Historical Data going back on multiple you need to do that on rates and inflation. So, since were so dramatically low relative to market Interest Rates and inflation, we think an 18 quarter p. E. On a number approaching 175 in operating earnings for the s p next year which is still 8 or 9 below the street we are still relatively conservative compared to bottom up consensus. For the e part but for the multiple part you might be above. That brings you to 3150 to 3,200 at some point in 2020. It will be weird when were in 2020 because it will be so easy to say what year it is 2020, like 20 20 vision. Is it not . Well say 2020 a lot election of the 2020 thats a good good fodder for you. Yeah. We have to enjoy that year. Well get to enjoy your jokes. Today is 9 9. 9 9 19. Always using your noggin. To bring value. We were going to i wanted after you did the teasing, i want to without comment have that picture of you in the desert and it didnt happen. By extending the conversation you give them more chances to do it. There now i wasnt trying to do that i was not who is that handsome man. That is part of squawk box. Its a cologne advertisement. How many are we charging for that cologne not enough. Not enough. The more you charge i think thats the way it works. Premium pricing and people say why pay less thank you all. Thank you. Thank you. Coming up, fall out from the trade war Contessa Brewer is in maine covering a tariff target really, what do you have coming up, contessa joe, these maine districters made Big Investments to open up the Chinese Market to Maine Lobster, then the retaliatory tariffs hit. Now these guys need to find new homes and the distributors are hoping to claw back some of that trade. Ive got it all ahead on squawk box. I got that vibe, got that vibe got that vibe, yeah, i aint petty, looking fly, looking fly, looking fly, yeah, they aint ready. I can shine, i can shine, i can shine. Imma do what im made to do. Imma do what im made to do. Built for excellence. You start from the foundation up. The excellence is reaching dreams and chasing them at the same time. 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