The china trade fight is clearly escalated. The president s holding on to a very strong line. Any resolution, it seems to me, pushed down the road. More on that coming up. If you combine the jobs report with the china story, heres how the market opens today. I thought we would be down about 100 points but we are coming back. We are down about 20 points for the dow. That will be 29 minutes from now. Maybe the markets taken the Financial News to mean that the fed can lower rates in the future. 600 points down the last two days, down about nine at the open this morning. The s p down about four, nasdaq down about 44. Tempering the losses. Heres another really big financial story which i dont think gets the right exposure. Interest rates. The tenyear treasury yield all the way down to 1. 88 . Money is pouring into america. Why not . Interest rates in germany today hit a record low. You want interest on a bond, you got to come to america for that and thats exactly whats happening. What a day. Varney company is about to begin. For the last 20 years, chinas taken hundreds and hundreds of billions of dollars out of our country and now were stopping the theft of american jobs. They want to wait until they get d oh, theyre praying, theyre praying. They would like to see a new president in a year and a half so they can continue to rip off the United States like theyve been doing for the last 25 years. They would love to see a guy like sleepy joe biden, who has no clue what the hell hes doing. Stuart let me interrupt the political news for a moment. You show me the futures, for heavens sake. When i went on the air at 9 00 this morning, we were going to be down 20 points. A few minutes later, literally two minutes later, futures have completely turned around and now we are going to be up about 100. We are searching desperately to find out what on earth has just happened. Bring it to you as soon as we know. Outrageous. Thats the dow, not the nasdaq. Stuart okay. Could be boeingrelated news. Stuart could be. We will find out. Let me get back to china. As you heard the president last night, that was the president really taking some shots at china at the cincinnati rally. Now, overnight, we heard chinas response to this threat of tariffs. Ashley its a threat. It hasnt happened. It will begin september 1st, says the president. Yeah, china, as you can imagine, not too thrilled with this. Lets put up bullet points, if we can. Basically they said we will not be blackmailed. You can imagine that was straight out of the blocks. They say they will take the necessary countermeasures, tariffs, even perhaps ban on rare earth exports which is so vital to the making of products here in this country. Also, they say penalties against u. S. Companies in china, they say theyre not going to give up an inch on major principles. They say the u. S. Should give up its illusions. We must have Mutual Respect and equality. This is simply not constructive for talks. Stuart thank you, ashley. I do want to point out we are no longer going to be up 100, as we were a minute ago. Now we are going to be up 37. Look, were scrambling. We want to know exactly why the futures markets all over the place. We dont yet know. We will tell you conclusively as soon as we know. Promise. Lets bring in curtis ellis, former Trump Campaign trade and jobs adviser. Weve got to talk china trade. This latest threat of tariffs seems to me to mean youre not going to get an immediate deal in the immediate future. This is going to drag on for months. Oh, it certainly will. China has made all the noises as ashley was saying, they are in no rush to make a deal. They are waiting for 2020. They really do believe they can get a better deal from a democratic president and you look at the interesting that Kamala Harris signaled on more than one occasion that she would get rid of the tariffs. She talks about the trump trade tax, the trump trade tax on families. She put it in her closing statement. She is sending a clear signal to the u. S. Chamber of commerce and perhaps to the chinese politburo that if im in charge, no tariffs. Stuart i have to raise this. Im hearing speculation from various points that xi jinping, chinas leader, will impose martial law on hong kong on sunday. Its speculation. You heard it, im sure. This is huge. We hear it from the same source that was telling us that china is doing everything it can to interfere in our elections for 2020, to get a democrat elected. If china were to do this, it would be devastating to these trade talks. You would see unanimous opinion across the board in america that you cannot make a deal with the butchers of beijing. Whats it going to do to the Business People flying in and out of hong kong . Stuart absolutely killing. Hong kong is the most important Financial Center in asia. I think it is, at least. It would not be, in the event of martial law, it would just disappear entirely. You wouldnt want to go there with a u. S. Passport. Stuart we should say it is speculation. Thats it. Speculation. It would be a dramatic move if it happened. I dont think its expected to happen. The chinese have proven to be very unpredictable. Stuart my goodness me. Curtis, the news is flowing thick and fast. Glad youre here to cover it. Thank you very much. Good stuff. The other truly big story this morning, the tenyear treasury yield, way below 2 . The europeans have lowered Interest Rates all over again. Ashley race to the bottom. Stuart a race to the bottom, in germany a new alltime historic low for the tenyear treasury yield sorry, in germany. David dietze is with us. I have never seen anything like this before. Its not being reported properly. Its extraordinary. The tariffs shocked the markets but i think the bond market has taken it way beyond what is an appropriate response to the news on tariffs, and i think the only way i can understand it is things are getting so bad in europe and Interest Rates, for example, on the 30year german sovereign for the First Time Ever is now below zero. It was on the tenyear. Now the 30year blelow zero. Money is flowing in here looking for a safe harbor not because of tariff concerns but because everything is so bad in europe and elsewhere outside the United States. Stuart i did the calculation. Again, i will repeat this because its dramatic. If you are a money manager in berlin, youve got 1 billion, you put it into a german bond, after one year you dont get 1 billion back, you get 995 million back. They keep 4. 8 million. If you put that billion dollars into an american tenyear treasury, you get 18. 8 million interest. That gives such a tail wind to this economy. People have to buy our currency, they will either buy our bonds and a lot will slip into the stock market. Stuart it means our Interest Rates will come down to match what theyre doing over there. Thats what it looks like. Of course, i think they are anticipating more cuts from the Federal Reserve, believe it or not. Stuart tell me what you make of this mornings jobs report. I thought it was good. I mean, we really want good news here. It wasnt so good as to cause the fed to, you know, one and done, but the only weakness there, of course, wage growth is much slower than its been in previous cycles with a low unemployment but i think that also reflects inflation. Stuart okay. So look at that. The futures have come back to unchanged. I got to find out, i dont know yet. David, thank you very much indeed. Later this hour, got to tell you National EconomicCouncil Director larry kudlow joins us. Hes going to talk jobs, china trade and a whole lot more. That will be around 9 30, 9 35 this morning. Two dow components reported profits earlier today. First off, chevron, profits up, revenue fell short. The stock dead flat. Better profit at exxonmobil. That stock is up this morning, not much, but 64 cents higher, 73 a share. Sprint, they lost 128,000 cell phone subscribers last quarter but because that is fewer than expected, it doesnt have a bad impact on the stock which is dead flat, unchanged. Let me go back to futures for a second. Heres how the markets likely to open this morning, down about ten points on the dow. Whatever happened five minutes ago when suddenly we spiked to up 100, i simply do not know. Ashley it was in a matter of minutes. Stuart no idea what happened. Just dont know. We are going to be down a fraction at the opening bell. New this morning, the u. S. Formally withdrawing from a cold war era Nuclear Treaty with russia. The treaty limited the development of missiles, groundbased missiles. Secretary pompeo blamed russia, saying it failed to comply with the terms of the deal. Heres some good news for drivers. Gas prices have been heading down a little bit lately. We have an analyst who says they will drop 50 cents a gallon before the end of the year and possibly more. Thats because of the trade war with china. The fbi busting a major theft ring involving millions of dollars worth of stolen goods and couple of amazon drivers. Theres a story for you. Were on it. Varney company friday morning getting started. I dont know whats going on. Ive done all sorts of research, read earnings reports, looked at chart patterns. Ive even built my own historic trading model. And youre still not sure if you want to make the trade . Exactly. Sounds like a case of analysis paralysis. Is there a cure . Td ameritrades trade desk. They can help gut check your strategies and answer all your toughest questions. Sounds perfect. See, your stress level was here and i got you down to here, ive done my job. Call for a strategy gut check with td ameritrade. A cockroach can survive heresubmerged ttle guy. Underwater for 30 minutes. Wow. Yeah. Not getting in today. Terminix. Defenders of home. Stuart we figured it out, literally 9 01, futures spiked, showing a gain of 100 points, then came all the way back down to where they were before. We are down 22 points at the open. Why did they spike . Well, there is an unconfirmed report from one other network which said President Trump could delay or halt the tariffs if china takes positive action. That has not been confirmed and futures dropped all the way back down again as soon as there was no confirmation. Got that. Sorted it out. Look at pinterest, please. They came out with a rosy forecast for the future. Up 14 there. How about u. S. Steel . Better profit, better sale, but the stock is down. Maybe thats got something to do with the trade talks. The stock is down just 17 cents but its at 14 a share. Come in, kelly sadler, former special assistant to President Trump. Ive got to say that after that tariff tweet yesterday, stocks sold off. Now, the president , hes been out there saying campaigning, essentially, on the strong economy. This china trade fight will hurt our economy in the second half of the year. How are you going to handle that . Well, first off, lets look at the state of our economy. Wages have increased 42 over the last two years President Trump has been in control versus the last two years president obama was in control. We have seen the effect of our tax cut plans. We had pfizer announce they were going to take their Dutch Company mylan and build their plant here in america which will create more jobs, more Economic Growth. Stuart i got it. I do understand the state of the economy. I know youve got to put that out there but look, you are facing a slowdown. We face a slowdown right now in job growth. That was evident in todays jobs report. If these china tariffs are imposed, it will hit consumers. It will hurt our economy. You have to tell me how you are going to address that. I know the economy is doing well. Youve got to tell me what youre going to say about the second half. The point is that our economy is booming and chinas is not. We are in a position of strength. China lost five million jobs, two million jobs, because of President Trumps tariffs. They have the slowest Economic Growth since 1982. They are in a much worse position than we are. They are stealing our i. P. , they have trade theft, they are cheaters on the world stage violating every wto rule and agreement there is. If we dont take them on right now, when we are in a position of strength, then when will we take them on . Stuart okay, look, your position will be that the trump hard line and the effect on the economy is worth it, and its the right thing to do . That will be your line . It is worth it in the long term. China is our biggest geopolitical threat and this administration is standing up to them. Now, they promised, china promised to buy agricultural goods from us. The president has not seen that. We have not seen that come in. They need to take steps to address the problematic systems in the communist system and treat us fairly. Trade should be fair and reciprocal and it is not. This president is the first president to actually take them on and he needs to stick with it and go through it and make good on his promise to the americans. Stuart heres something youll like from the cleveland rally last night. The president pointing out that democrats are attacking president obama at the debate. Roll that. I was watching the socalled debate last night and i also watched the night before. That was long, long television. And the democrats spent more time attacking barack obama than they did attacking me practically. Stuart okay. 20 seconds to tell me that is indeed music to your ears. Well, you know, i dont want to give help to the democrats right now but they are attacking a president who has a 90 plus popularity within their own party. Now listen, a lot of republicans and a lot of independents thought that barack obama was too extreme, he strangled businesses, strangled the economy through his regulations and executive orders. Now you have the new democrats saying he didnt go far enough, they want to get more extreme. I say to the democrats keep doing what youre doing. Stuart we hear you. Kelly sadler. Thanks for joining us this morning. Thank you, stuart. Stuart question. Is the u. S. Getting ready to pull out of afghanistan . We are getting ready to pull thousands of troops out of there. Is it over . Ashley its about a deal with the taliban. They are going to do what they want to do is withdraw troops, not all of them, its important we have about 14,000 troops in afghanistan. We could pull that down to about 8,000 or 9,000 troops if the taliban agrees to a ceasefire and renunciation of al qaeda. Thats a big ask. This has been going on, troops in afghanistan now for nearly 18 years. The problem is, of course, they want the taliban to negotiate a larger peace treaty with the afghan government. You cant trust the taliban. Its well known. Also, how do you verify they are going to do what they say they will do . We going to pull some of our troops back. Stuart thats the news. Thank you, ashley. Look at futures again, please. Down just a little at the opening bell. Thats in 11 minutes time. Now this. The pentagon delaying the award of a 10 billion Cloud Computing contract that was expected to go to either amazon or microsoft. Why amazon is facing accusations of unfairness. Later this hour, larry kudlow joins us. We are talking jobs, Interest Rates, china trade and a whole lot more. Very important. He could move the market this morning. Dont miss it, please. [ dogs barking ] what about him . Lets do it. [ sniffing ] come on. This summer, add a new member to the family. Hurry into the mercedesbenz summer event today for exceptional offers. Lease the glc 300 suv for just 419 a month at the mercedesbenz summer event. Going on now. You may have gingivitis. When you brush, and the clock could be ticking towards bad breath, receding gums, and possibly. Tooth loss. Help turn back the clock on gingivitis with parodontax. Leave bleeding gums behind. Parodontax. Stuart were bringing you this, because that is hong kong right now, 9 30 in the evening. Protesters gathering again. This is serious business. As you may know, there is widespread speculation about what china will do this sunday, this weekend, if you get more of those demonstrations. The speculation runs all the way to a possible speculative, this is all it is, declaration of martial law. That would be a dramatic move if it were to happen. We will keep an eye on it for you. Next one, the pentagon delaying a 10 billion Cloud Computing contract. Whats the reason . Ashley they want the new defense secretary, mike esper, to review the whole matter. There have been accusations, basically this contract is down to amazon and microsoft, who gets this 10 billion contract. Its a biggy. Lets not forget amazon already handles the cias Cloud Computing program. They were seen as a shoein but there are accusations amazon has been conspiring in the background to try and win some sort of monopoly. Oracle and ibm were thrown out at the beginning of this process, they are not advanced as others in Cloud Computing. Now do we go back to the beginning with a new defense secretary to find out who gets this contract. There have been accusations against amazon. Stuart ive got another amazon story. The fbi says two amazon drivers, delivery guys, were involved in a theft ring. Ashley huge theft ring. This is what happened. These two drivers would go to the seattle airport and pick up items that were being returned to the company. They were supposed to then take them to the warehouse as part of the process. Instead, they took them to a business posing as a pawnshop. These things were then restiek wi recycled and resold on amazon. Two storefront businesses were posing as pawnshops. These two drivers, one made like 100 worth of property in a threemonth period stuart a hundred . Ashley 100,000, forgive me if i didnt make that clear. They work for Logistics Company jw, a contractor for amazon. Quite an operation. Stuart ill say. Look at this. The market opens in 5 10. We will be down, not a lot. We were down 600 points on the dow in the last two trading sessions, down maybe 20 at the opening bell. Well be right back. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. 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