Transcripts For FBC Varney Company 20240714

Heres the jargon, the yield curve inversion. This is fed day and a very big day. In advance of the official word on rates, stocks have been all over the place this morning, up and down, moment to moment. Right now we are looking like a loss of maybe 112 points for the dow and down 45 on the nasdaq. This is whats hitting the market, china. China says it will impose 5 to 10 tariffs on 75 billion worth of u. S. Goods. That is obviously a negative for china trade. Its escalation and therefore, bad for the market. Elsewhere, later today, the president leaves for france for the g7 summit. Interest rates and trade will surely come up there. They are gearing up for more big protests in hong kong. Were on it. And just wait until you hear what larry kudlow says about tax cuts. Lets get going. Varney company is about to begin. Weve negotiated with them, weve tried to move the football. They have backed away and we have taken measures through all of that time, weve had a very strong economy, weve had a very strong stock market because the market looks at the data and understands that even though this relationship is very important to get right, the actual amount of money thats being tariffed is not material in terms of macro growth. Stuart all right. That was obviously Peter Navarro on this network earlier. I think he was downplaying this mornings imposition or threat of imposition of tariffs by china. The market did react to that. Stocks went down right after chinas announcement. We are still down about 100 points for the dow with 28 minutes to go before the market opens. Market watcher Rebecca Walser is with us. This is tariff confrontation, right, its an escalation in the trade fight and thats why the markets down. Have i got it right . Absolutely right. Obviously busy morning before the market even opens. This should have been expected. We knew china was not happy with trump escalating on the last 300 billion obviously before september, then december, now pulling stuff back, so this is a retaliatory, you know, play pure and simple. Stuart look, i was hoping for a shortterm intermediate modest deal but i dont think we are going to get it. Instead we have confrontation and the market is down. Stay there. More from you in just a moment. I want to get to hong kong, where the protests continue. They are ongoing as we speak. Susan li joins us by phone. Susan, tell us about what we are seeing on the screen, a human chain of freedom. Susan its incredible. Yes, this human chain with p protesters literally arm in arm across a huge territory of hong kong. Think about all the thousands of lakefront or harbor front there, also here on the central side as well where the buildings are, the downtown portion of the city and all the way up to the new territories. They climbed up lion rock, a popular climbing destination. They call it the hong kong way. Here in hong kong, they are targeting just over 20 miles. They hit that mark 40 minutes ago and more people are continuing to join. They were expected to end the movement at around 9 00 p. M. But i dont see anyone going away any time soon. They are still chanting here looking for their freedom. They are asking for the freedoms we all enjoy in the u. S. Stuart susan li in the middle of it with some extraordinary scenes ongoing in hong kong. The human chain of freedom. That may be clear here, that is not affecting our stock market at this point. It is a backdrop to our market and a backdrop to the g7 meeting thats coming up. Yes, were down, but were down because of largely chinas imposition of tariffs september 1st. They have threatened to do that. The really big financial story of the day is frankly fed chair powell, speaking in about an hour. Back to Rebecca Walser. Heres what i think, for what its worth. I think the feds going to cut rates sharply and fast. Now, my question is, if that does not happen, what do you think happens to the market . Well, obviously the market is down. We were hoping to snap our little losing streak there for a little bit and thats not going to happen with this announcement this morning. So we are looking now even more closely at powells sentiments at 10 00 a. M. From jackson hole and we want to see that i am frankly looking to see is he finally going to be more dovish instead of being so cryptic. I think hes had a lot of cryptic messages and is not very clear and we need clarity, like you said earlier. We absolutely do. We are looking for the fed to back up President Trumps trade war with china because this is a war we must win. Stuart so you think that maybe powell will be influenced a little by the imposition of tariffs by china which they have just threatened to do . Yes. Stuart you think this latest tariff imposition, you think that will affect jay powells speech today . Its a little bit the last minute so hes going to have to adjust some sentiment but i think he is just facing mounting pressure. Obviously a lot of pressure from the administration and the trade war does have an effect. Even though we do see from the minutes that got released this week disagreements and breaks in between the Federal Reserve governors themselves, this is actually something that he just cant avoid. So we are looking for him. You say you are expecting him to be very decisive and show that he will be supportive of the Trump Administration and these policies so lets see. Lets hope that happens. Stuart lets not get carried away. Fed chairs are rarely decisive. You have to read the tea leaves. Quickly, the president just tweeted this. I will show it to you. Now the fed can show their stuff. Okay. Very short, sharp, to the point. In other words ashley one last message. Stuart one last message to mr. Powell, thats right. Back to you, rebecca. The president just tweeted that. Hes applying heavy pressure to the fed. I got it. Well see if the fed bends to that pressure or acknowledges it. Heres what im expecting as well, as maybe rate cuts. Im expecting that the market will be, the computers, the algorithms will kick in as they go through his speech and look at key words. I think the market will gyrate as to how those algorithms interpret those key words. What do you say . I think you are exactly right. We just have to keep in mind this speech was prewritten before this announcement came out this morning, so its not going to have the ability to be adjusted completely for this mornings events, so lets hope that we dont have an overreaction by the market, if its not going to get the dovish were really looking for indications that hes going to be supportive of future rate cuts and helping the administration continue on this mission. Stuart rebecca, thanks very much for taking time out on a very busy day. We appreciate it. Thank you, stu. Stuart staying on the economy. Listen to what larry kudlow said on this network yesterday about more tax cuts. Roll it. So to clarify again on the tax question, theres no reason why we shouldnt be and in fact, we are, developing again tax cuts 2. 0, we are Touching Base with all the key people in the administration who would drive additional tax relief and create additional tax incentives for middle class folks, for blue collar workers, for small businesses. Additional incentives. Additional tax cuts. And you might see that during the campaign. Stuart okay. Additional tax cuts, maybe surfacing during the campaign primarily for the middle class. Jason johnson is with us, former adviser to ted cruzs president ial campaign. Why are we talking about tax cuts when the economy at this moment is doing pretty well . You bet, stuart. Thanks for having me. Very simple. Political context. As we know, the number one threat to the president s reelection is a recession, and its not so much that one may occur. Any time something happens, voters understand things are going to happen, including recession. The question is who do the voters blame. We know democrats right now are cheering for a recession. We know that with regard to the last tax cuts, democrats have claimed all of those benefits went only to the top 1 . Payroll taxes are a very different matter. This could be a very, very good strategic move for the president going into a reelection, putting nancy pelosi and the democrats in a box, forcing them to say no to payroll tax cuts which without question disproportionately impact working class blue collar voters in this country. If they say no, which they likely will, because remember, they want a recession simply so that they can beat the president , then hes able to shift the terms of the debate and place some of the blame at the feet of the democrats. Stuart you expressed yourself in a very succinct, clear fashion. We appreciate that. Thanks for coming by. We do appreciate your input. Thank you. Thank you, sir. Stuart next case. Massive fires burning right now in the amazon rain forest. Getting political. Frances president macron calling on countries around the world to respond. You can bet hes going to talk to President Trump about that when they meet in europe this weekend. Climate will come up. The far left crying foul after the Democrat National committee kills plans for a primary debate just on Climate Change. Theyre not going to do it. The left does not like that. Were on it. We are less than an hour until Jerome Powells big speech. That will hit the market, it will affect the market, it will move it, guaranteed. Where is the market right now . Down 119 points for the dow industrials, down about 50 for the nasdaq. We will report this for you. David koch has died. He was a billionaire and a big republican donor. Koch stepped down from his post at Koch Industries last year, citing health issues. David koch was 79 years old. Do, 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. Content on their endless quest, to nowhere. S, run hopelessly in their cage. But perhaps this year, a more exhilarating endeavor awaits. Defy the laws of human nature,at the summer of audi sales event. Get exceptional offers now. Stuart not that far away from the big speech by Federal Reserve chair powell. That will affect the market. Whats hitting the market right now is chinas announcement that they will impose tariffs 5 to 10 on 75 billion worth of u. S. Goods come september 1st. That hurts the market. Wheres that yield curve . Is it inverted or not . Im squinting. The twoyear is 1. 596 and the tenyear is 1. 594 . Therefore there is a very slight inversion. That doesnt help the market either. Couple retailers reporting, lower profit, lower sales at foot locker. They are taking it on the chin, down 10 . Sales falling short of these expectations at the gap and they are down 5. 5 . Now this. Nationwide effort to crack down on robocalls. Dont you love it . Is it going to work . Ashley we heard this before. You nearly threw your phone away yesterday when you had a robocall in the middle of the show. They never stop. What they are going to try and do, not only is the Large Telecom companies, but also the state attorneys general in every state to try and stop these calls getting on to the network in the first place. Not an easy thing to do. They are going to try and do it, promising to work to prevent these things from happening. Theres a big fly in the ointment. It does not include internetbased telecom carriers. A lot of these calls are now being generated through the internet. So its just a giant game of whackamole. Every time you think you linked this call to this area over here, you whack it, it comes back up over here. They are working on it, trying to do it. Whether to perhaps hold the carriers accountable, start fining them, but finding the source of these robocalls is extremely difficult. Theyre working. Theyre trying. Stuart we are very glad to hear that. Lets hope they can do it this time. I wont throw my phone away. Something very, very important. He plays for the boston celtics. Hes a forward. Enis cantor, a Turkish National who has been publicly critical of Prime Minister erdogan. Hes not allowed to visit his home country. Theres even an International Arrest warrant out for him. He joins us now in new york. Welcome to the program. Whats your problem with Prime Minister erdogan . I think, you know, turkey could have been the bridge of modernism and the west. Just because of the regime is in power to abuse human rights and theres no democracy and theres no freedom, freedom of speech, in turkey. Stuart you just said this publicly. You are publicly critical of turkeys leader, therefore, you cant go home . I cannot go home. They revoked my passport. People are asking me where are you from . I dont know what to say to them. Because i dont know where im from. They dont want me to be in my country. Last time i was in my country was 2015. Stuart all those years ago. It was really hard to come here with my family now because they pressure my family in turkey. Stuart you cant go to canada . I cannot leave america because they put my name on he put my name on interpol. Thats why if i leave america, outside of america, i can be arrested. Stuart your youth clinic was shut down because of threats . Because of Turkish Embassy came to the mosque and literally bullied American Mosque and said if you guys do a basketball camp with me, you guys are not allowed in turkey. Stuart President Trump often steps in to help people like you who are frozen out of society because of your complaints about human rights. Have you appealed to the president . Or the administration . If hes watching, i would love to meet him. I think people are asking what can be done. Im meeting with a lot of senators and congressmen and i think if america puts sanctions in turkey because erdogan is taking turkey in a very difficult direction. I think if america put sanctions in turkey, i think this is going to solve the problem. Stuart have you done well in america . Im trying to. Im trying to. I play for the boston celtics. Im trying to. Stuart look, we really appreciate you being on the program today. I appreciate it. Stuart we hope that something can be done for you. I will just pray for my country. Thank you so much. Stuart thank you very much. Appreciate it. Look at futures, please. The market is affected by china announcing an increasing tariff on 75 billion worth of our goods. Jerome powell speaks at the top of the coming hour. Thats whats going on in finance. Back in a moment. Theres a company thats talked to even more real people than me jd power. 448,134 to be exact. They answered 410 questions in 8 categories about vehicle quality. And when they were done, chevy earned more j. D. Power quality awards across cars, trucks and suvs than any other brand over the last four years. So on behalf of chevrolet, i want to say thank you, real people. Youre welcome. Were gonna need a bigger room. 2,000 fence posts. 900 acres. 48 bales. All before lunch, which we caught last saturday. We earn our scars. We wear our work ethic. We work until the works done. And when it is, a few hours of shuteye to rest up for tomorrow, the day well finally get something done. the day well finally from the 5am wakers, to the 6am sleepers. Everyone uses their phone differently and in different places. Thats why Xfinity Mobile created a Wireless Network that auto connects you to millions of secure wifi hot spots. And the best lte everywhere else. Xfinity mobile is a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Click, call or visit a store today. Stuart the share price of overstock. Com, look at it, up 8 yesterday after the chief executive Patrick Byrne resigned. He stepped down after disclosing a romance with an accused russian agent, maria butina. Byrne said former fbi agent peter strzok directed him to continue the relationship and share information with the department of justice. Byrne said he left because he does not want to be a distraction to the company. Premarket this morning, down 2 . Back to that news we told you about at the top of the hour. David koch has passed away at the age of 79. Jackie deangelis with us now. You have some statements from his family . Jackie good morning. Thats right, stuart. He was 79, advanced prostate cancer. He had a grim diagnosis. His brother, charles, issued a statement. I will read you part of that, quote, while this is a very sad day for us all, i want you to know david was proud of the extraordinary work you have all done to make Koch Industries the Successful Company that it is today. He will be greatly missed but never forgotten. He is leaving behind his wife, julia, three children. Julia also issued a statement. While we mourn the loss of our hero, we remember his iconic laughter, insatiable curiosity and gentle heart, his story of childhood adventures enlivened our family dinners, his sensitive heart had him shed a tear at the beauty of his daughters ballet and beam with pride when his son beat him at chess. We will miss the fifth link in our family. Stuart he was extremely wealthy. Jackie very wealthy man. Stuart i always thought libertarian causes. Jackie he had flphilanthropy causes but was a political activist as well. His views seem to shift as the years went on. He definitely made sure that he shared his wealth in that regard. Stuart thank you, appreciate it. Thank you. Back to the markets. Heres how we are going to open in about 4 50. Down about 122 points. Remember, this is fed day. The market right now is reacting not to the fed but to china. It may be imposing additional tariffs on American Products. Thats a negative. Dow is down 100. Back in a moment. Hey, who are you . Oh, hey jeff, im a car thief. What . im here to steal your car because, well, thats my job. What . What . . What . laughing what . . What . what . [crash] what . haha, it happens. And if youve got cutrate car insurance, paying for this could feel like getting robbed twice. So get allstate. And be better protected from mayhem. Like me. Who used expedia to book the Vacation Rental that led to the ride which took them to the place where they discovered that sometimes a little down time can lift you right up. Flights, hotels, cars, activities, Vacation Rentals. Expedia. Everything you need to go. Stuart as we head towards the opening of the stock market, the yield curve, whether its inverted or not, is a big deal. As of right now, it is not inverted. It is not flashing a recession signal. The yield on the tenyear, 1. 60 . The yield on the twoyear, 1. 58 . Thats the way it ought to be. The yield on the tenyear above the yield on the twoyear. Have we all got that straight. At the top of the show i promised not to use any jargon and here i am rattling on. Ashley so much for that. Stuart thank you very much. As of now, as of right now at 9 29. 47, we are not inverted. We will probably open lower. Here we go. This is going to be a big day, folks. Watch this very very carefully. In three, two, one. Bang, the market opens this friday morning. Its fed day, its china trade day as well. Lets not forget that. That, because of china trade, thats why we open down 121 points, with a lot of red on the lefthand side of the screen. Essentially, this is an escalation in the trade fight and the market does not like it. Down 124, nearly a half percentage point. How about the s p . Whats the reaction there . Exactly the same. Were down almost a half percentage point, 13 points lower. The nasdaq, down just over a half percentage point. So we are down across the board and this is largely on china trade. Dont know what the feds going to say just yet. Joining us, david dietze, jonathan hoenig, ashley webster. Ive got to start with fed chair powell. David, heres what im going to say. I think we are going to get rate cuts, rapid rate cuts. I think were going to do that. What happens if we dont do that . If the markets not going to take kindly to that, i think you will have bigger risk of inversion of the yield curve, thats going to produce more recession talk. Thats not the direction you want to take. The key thing for Jerome Powell of course is to make the case for future rate cuts without trashing the strength thats currently the case in the u. S. Economy. The consumer is going strong, we are seeing Additional Data on that from retailers coming out with blowout numbers. Thats the key balance he has to have today. Stuart okay. Jonathan thats really the frustration. Thats the irony, that lower rates, 0 Interest Rates technically historically have been the indicator of a weak economy. So the fed as they told us during their minutes, essentially making it up as they go along. Japan have had 0 Interest Rates for two decades, has not spurred economic growth. It has spurred mal investment. I think thats one of the factors confronting stock investors this morning. We have to keep up. Thats the whole point. Ashley the dollar has become so strong which is a real disadvantage in global trade. You have to, despite what we think the economy is doing, which it is humming along quite nicely, i think in order to keep up with the rest of the world we have to cut rates. Stuart mr. Powell will have to take account of this tariff threat from the chinese. To me, thats another reason to cut rates aggressively as of now. Well see what happens. We will let you know first. Lets talk this china trade. They have announced the intention to raise tariffs 5 to 10 on 75 billion worth of u. S. Goods. David, this fight is not ending any time soon. That is escalation. Yeah, absolutely. Of course, it raises the question what is it they import from the United States. Putting that aside, this takes the trade war to another step. As ashley was saying, i think it does make Jerome Powells job a little easier. One of the key reasons to potentially cut rates is trade wars and obviously this is front and center. Stuart we have opened and are down 138 points in the first three minutes of business. Let me get to tax cuts, very much in the news these days as well as the fed and china trade. Ive got to say im confused. On day one, the president said cut taxes. Day two, he reverses that and says no, were not going to cut taxes. Day three, larry kudlow tells fox business that were going to think about cutting taxes during the Election Campaign running up to 2020. Do we need a tax cut right now . I dont think we do. I think it runs the risk of further exacerbating the rise in the u. S. Dollar because that will just make our economy go into hyperoverdrive and bring even more money here. Of course, the other thing is tax cuts wont really address this potential inversion of the yield curve which the Federal Reserve focused on. Stuart the tax cut proposals are way down the road here. We are talking 15, 16, 17 months from now if they are even possible. Thats right but the consumer may start spending before that. Stuart jonathan . Quickly, to your point, the president is unfortunately, his team are creating this uncertainty, not unlike during the obama administration, every day there was ideas for new stimulus programs and investors had to react. Unfortunately, we are experiencing very much the same thing. One day being told one story, the next day just the other. One idea and the wall street journal floated this earlier this week, would be a tax cut by getting rid of the tariffs, ending the trade war, it would be a tax benefit for American Companies which has paid 6 billion in tariffs just last month. Stuart doesnt look like it at the moment. Let me summarize this. We have an escalation in the trade fight. Thats a negative. Weve got an escalation in the trade fight which means we are probably not going to get a quick agreement. Weve got talk of a tax cut but way down the road. And fed chair powell, he speaks literally in 26 minutes and lets see what hes got to say on Interest Rates. All that factored into the market. Right now we are down 108 points for the Dow Jones Industrial average. Okay. Got that. There you have it. Down 117. We have been holding at that level since the market opened, down almost a half percentage point. Couple of individual stocks that are making news. Hewlettpackard, now known as hp, gave a not so rosy forecast. Its down 7 . Same story at red robin. That is, well, thats up 3 . Go figure. Sales force gave an upbeat forecast, thank heavens theyre up. Boeing was up last session after reports of an upbeat Production Forecast and its up a bit more today, 6, 7 higher, nearly 2 up. On fed day, quick check of gold. Its up six bucks. Quick check of bitcoin. I think its still around ten grand. It is. 10,200. The price of oil, look at that one, that is going down. Ashley dropped below 53. Stuart i think thats on the strength of a strong dollar. I think thats whats going on there. Okay. That means oil at 54 a barrel. I think gas continues to fall. Its still 2. 60 a Gallon National average but i think 54 a barrel oil, im hoping and praying we come down some more on gasoline. Big week for Retail Stocks that reported earnings and we have more of them coming, came after the bell last night and some this morning. Look at them there. Gaps down, ross stores down, foot locker, they are all down today. But its the consumer thats keeping this economy going. Thats the key question. What can we draw from the strong reports. The larger the company reporting, walmart, target, lowes, home depot, you can draw the strong inference. Some of the smaller players, i think expectations were so low that anything was better than complete disaster and stock investors rushed back in. Theres been a potentially whittling of retail, separating the wheat from the chaff. Lot of people said amazon would be the complete category killer but we saw this week target, a new 52week high. Some of the names are breaking out. To davids point, whether its kohls, macys, Dillard Department stores, those who havent invested, havent taken on amazon, have seen their stocks get crushed. Stuart fair point, well made. Look at the share price of the theme park chain six flags. Right out of left center field, here comes jonathan saying, suggesting that apple or netflix could buy it. Okay. Before we go any further, do you own six flags stock . No. Stuart okay. No, i dont. I dont own the stock but im always looking for sectors of the market that are doing well without a lot of obvious explanation, looking for the trends as they start to emerge. A lot of these theme park operators like Ticker Symbol fun, six flags or sea world, those are doing well even during this time of market uncertainty. With all this talk about the entertainment giants battling it out, what does, for example, disney have that netflix or apple do not . They have the theme park presence where people can actually go, step into the movies. Its a harebrained idea. I dont own the stock. Stuart did you say harebrained . What on earth would netflix do with six flags . They are an entertainment company. An entertainment extends far beyond simply the box in which we watch all these shows, the screens on which we watch all these shows. Disney makes a lot of money in their theme parks and a market cap of six flags is only 5 billion. It would be a rounding error for a lot of big cap media companies. Stuart your idea is on the table. Im sure it will be discussed. Now we will move on. Look, first it was twitter. Then facebook. Now google shutting down, what is it, 200 Youtube Channels because they were doing something about covering hong kong. Lauren simonetti, tell me the story. Lauren this is the disinformation about hong kong. 210 channels were in a coordinated manner posting videos about hong kong that were not friendly to the protest movement there. Alphabet has taken those videos down. Why is this important. Remember what russia did when they intervened trying to influence our 2016 election . Is this a trial run for china perhaps doing the same thing for 2020, perhaps trying to get a democrat elected to beat President Trump. Its a very important move that alphabet, twitter and facebook are taking these posts down that are linked to beijing but it also goes to show you that the social Media Internet space is very vast and very difficult to do. Stuart very hard to police. Lauren theyre trying. Stuart i dont know how they do it. Lauren china is getting sophisticated. Stuart whatever you say. Thank you very much indeed. Its 9 40 eastern time. I have to say thank you very much to jonathan and david and lauren. Thanks very much, one and all. Show me that big board. I think we are in a state of pause at this moment. We opened the market ten minutes ago and we have been down 110, 120 points for that entire period. We are waiting for fed chair powell to speak. He speaks promptly at 10 00. So are investors. Before he speaks, before we can find out what hes going to say about Interest Rates, you can expect the market to be pretty much on hold. Its just digesting the bad news on china trade. 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There are new Cyber Threats out there everyday, so protecting yourself isnt a one time job, its an ongoing need. Now is the time to make sure that you have the right plan in place. Dont wait. [announcer] norton 360 with lifelock. Use promo code get25 to save 25 off your first year and get a free shredder with annual membership. Call now to start your membership or visit lifelock. Com tv stuart this is fed day. If you really want to see the market move, wait until 10 00 eastern time. Thats when the fed chair speaks. That should probably move the market. Right now we are down 93. A few minutes ago we were down 140. The g7 meeting starts tomorrow and frances president macron wants World Leaders to put the fires in the amazon rain forest at the top of the agenda. We have seen a lot of coverage of this recently. Those fires are ongoing. Joining us, Climate Depot founder. The fires are getting political. I see a clash coming at the g7 between especially the europeans who are dead set against Climate Change and President Trump. Theres politics coming up here. There is. The first thing you got to understand, they are punishing brazils leadership for threatening to pull out of the u. N. Paris agreement, for not accepting the scientific consensus, and they have actually distorted the fires here. Nasa just came out and said historically, the fires in the amazon are not unprecedented, they are only up a huge amount from last year but they are historically low and only the biggest since 2013. Brazil is being punished because of these fires because of their stance on Climate Change. President trump, the same way they punished President Trump. Hes going to this meeting and hes been vilified for years for the same exact issue. Of course, trump doesnt help himself by, you know, his demeanor with some of the World Leaders. But in the case, you know, in the case of brazil and trump, they will sort of be on the outs at this g7 summit by all the other leaders, particularly macron. Stuart guaranteed. Now, im sure you saw it. Bernie sanders submits his green plan, his Climate Change plan. 16 trillion worth of cost right there. Then we heard that the Democrat National committee is not going to have a single issue debate. They were going to have a single debate on Climate Change. Now theyre not going to do it. Seems to me that the party, the democrats, dont want an intense discussion of Climate Change because the countrys not behind it. What say you . Absolutely, yeah. The climate candidate, governor inslee, just dropped out. He was at. 2 at the latest iowa poll. The day after he drops out, the dnc not only do they not have a debate, but bidens campaign is quoted as saying a climate debate specifically focused on that is quote, dangerous territory for the democrats. This goes on the heels of even msnbc saying that climate is a ratings killer, whenever they cover the issue. So the democrats are terrified of being seen as the climateonly party and bernie is just stepping up to the plate and trying to out aoc, aoc on the green new deal, coming up with an even more expensive and ambitious plan. Stuart is it 16 trillion . That was for bernies plan. 16. 3 trillion or something. Yes. Stuart over a tenyear period, i think. Yes. He also has magical thinking. 3 of our energy comes from solar and wind. By 2030 he wants it to be 100 of our electricity. This is fantasy thinking. He also wants to punish fossil fuel companies, start prosecuting them for the damage they have caused allegedly. He also is going to give 200 billion to the u. N. Green climate fund. This is a wish list of all the climate activists and political left and its really designed just to pressure the Democratic Party and particularly joe biden to kowtow to the Democratic Party climate interests. Stuart i think its a bad political strategy. Even the activists in the party who run the primaries, i dont see them going for a 16 trillion climate plan and 31 trillion medicare for all plan. I just dont see that. I think they have gone so far out of line with the rest of the party that i dont think they are going to win on this one. No. And i think its pretty transparent. Theres a whole bunch of nonclimate stuff in bernies plan, as there was aoc. This has nothing to do with the climate. This is using the climate scare to get this radical agenda across. I think its even scaring the quote from the biden campaign, not only was it dangerous territory but its dangerous territory for middle america, for expanding the Democratic Party base, and the mainstream democrats, the establishment, they are terrified of bernie. They are terrified of this issue and the way the hardcore activists want to exploit this into a wholesale change of the American Economy which by the way, would have no impact on the climate even if they are right on the science which theyre not, using the epas own model. There would be no impact on temperatures 100 years from now under bernies or aocs plan. Stuart even on fed day we have time for Climate Change. Thank you very much for joining us, marc. Next case, the trade war with china is projected to cost us billions in lost tourism dollars. Tell me . Ashley 11 billion from last year and this year is the estimate. Last year, tourism from china down nearly 6 , the first drop in 14 years. The strong dollar also not hurting. But the chinese tourist spends more than any other country visiting the u. S. , an average of 5,800 per visit. Lets not forget in june the Chinese Government put out a travel warning for people traveling to the United States about harassment in this country, shootings, robberies and thefts. Didnt have an allout ban but put out that travel warning. Clearly that didnt help either. Stuart did not know the Chinese Tourists spend more than others. Ashley any other nationality. Yeah. Stuart didnt know that. Lets check the big board again and the dow 30, please. Its a sea of red. Got to tell you that. But that is 11 minutes in advance of fed chairman powell speaking top of the hour. Okay. We didnt believe it when President Trump floated the idea of buying greenland. I thought it was a joke. The Mainstream Media mocked him. But it might not be as crazy an idea of some people think. Greenland has a lot of strategic importance. We will tell you about it in our next hour. Got it. Heres a commercial break. Back in a moment. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Theres a company thats talked than me jd power. People 448,134 to be exact. They answered 410 questions in 8 categories about vehicle quality. And when they were done, chevy earned more j. D. Power quality awards across cars, trucks and suvs than any other brand over the last four years. So on behalf of chevrolet, i want to say thank you, real people. Youre welcome. Were gonna need a bigger room. To the wait did frowe just winners. Prouders everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy a new samsung note. Click, call or visit a store today. Stuart were working up to it. Were minutes away from fed chair powells comments on the economy. While were waiting, i want you to just take a look at what i said about the fed in the year 2011, eight years ago, when we were first starting the program. Oh, dear. Look what i said. I try to stay out of the weeds on television. Jargon is the kiss of death. The second you Start Talking about the Federal Reserve and qe3, youve lost your audience. How many people really know what the Federal Reserve is and does . Far fewer people know what qe3 is. Thats why youll never hear me say the yield on the tenyear bond is x or y percent. I suppose i have to eat my words. Ashley i think you do. Stuart because i used the tenyear treasury yield at least five times a day. Ashley i would say every other hour, if not twice an hour. Stuart i think today we have to suspend my personal ashley you have to. Stuart you just have to. We are going to try for clarity. Thats our pitch to you. We are going to try for clarity. I want you to know exactly what jay powell has said. Okay . Thats my job. Joining us on the phone, ron paul, who is a huge critic of the fed. Ron, youve got 60 seconds. Tell me what you think about jay powells presentation today. Go, sir. Well, he has a hopeless task. He doesnt have the answers because he shouldnt be in existence. Nobody should be dictating Interest Rates. That is our problem. That is price of money. The whole reason socialism always fails is they ruin the pricing structure. They dont know supply and demand and you do the same thing in money when you have a Federal Reserve fixing Interest Rates, causing imbalances and then they think oh, we can solve these trade wars with just manipulation of the Interest Rates. So its an artificial situation created by the fed and i think its delightful because more and more people are saying hey, do we really need a fed . No, its all mischief. Besides, socialized Interest Rates, socialized prices, and you cant do it, the only group that benefits is anybody who has a reserve currency. Thats why we have done pretty well. I think, stuart, its safe to say now that we can declare that we are truly in a trade war, and that of course is bad and it will go on until both sides get exhausted. Stuart ron paul, thank you very much for joining us on the day when you go right up against the fed chair. Thanks, ron. Appreciate it. Literally, three minutes away. We are going to hear from fed chairman powell. As of now, the dow jones average is down 127 points. Thats now. He speaks in less than about three minutes. That market position could change. Stay with us, please. You are going to see it all right here. Hmm. Exactly. Liberty mutual customizes your car insurance, so you only pay for what you need. Nice. But, uh. Whats up with your. Partner . Not again. Limu thats your reflection. Only pay for what you need. Liberty, liberty, liberty, liberty why accept it frompt an incompyour allergy pills . E else. Flonase sensimist. Nothing stronger. Nothing gentler. Nothing lasts longer. It never questions the tasks at hand. But this year, theres a more thrilling path to follow. father kids. Change of plans vo defy the laws of human nature. At the summer of audi sales event get exceptional offers now 2,000 fence posts. 900 acres. 48 bales. All before lunch, which we caught last saturday. We earn our scars. We wear our work ethic. We work until the works done. And when it is, a few hours of shuteye to rest up for tomorrow, the day well finally get something done. stuart ladies and gentlemen, were literally 20 seconds away from fed chairman powell outlining what he will do with Interest Rates. He will speak on the economy. He is beginning to speak literally in a few seconds time. Make note please, the Dow Jones Industrial average because as of right now, slightly in advance of the speech the dow is down 90 points. Here we go. It is now 10 00. We know, Edward Lawrence with us. He is in jackson hole. What is he going to say . Reporter stuart i can tell you that the Federal Reserve chairman is about to speak. Here is the speech. It is 12 pages long. He will work to, the speech is basically the cards being held close to the vest. There is no clearcut call for a rate cut in the Federal Reserve chairmans speech today, happening right now. Now powell does open the door to a rate cut. He talks about the shocks, specifically the shocks around the globe with germany having slowed, economic slowdown, chinas economic slowdown, brexit, hong kong. He opens the door there, possibly for a rate cut but again says were close to the 2 inflation objective as were going through this year. We have low unemployment. No clearcut call on this for a rate cut. He does say that business manufacturing, that Business Investment is slowing this year. He says though that Consumer Spending, wages are growing, how unemployment and Consumer Spending is driving this economy. The headline here, they will sustain the expansion and act as appropriate but again no clearcut call for rate cuts. Stu . Stuart Edward Lawrence, on top of it. Thank you very much indeed, right there with the news as it is happening. I want to bring in Danielle Dimartino booth, former fed advisor. Danielle, spell it out, you just heard Edward Lawrence, you spell it out in plain english what is chairman powell telling us . I cant do plain english, but i can tell you said the word eventful, stu. He said the last three weeks, since the fed met have been eventful for markets. He specifically cited chinese tariffs. Hawkish rhetoric from the likes of boston fed president rosengren that the fed has done enough to address. The trade war with china seemed to be slightly retaliated by what powell said in this speech. On the other hand of course he mentioned unemployment still being very strong. So he is, he is speaking, in a very balanced way. But again he is made note what, how much transpired in the markets over these past few weeks. I think that is friendly. Stuart we all have to read the tea leaves here. We have to interpret what he is saying. Here is my interpretation. I think he is teeing uprate cuts without actually saying it. He is opening the door, he is saying look, germany is slowing, china is slowing. You have the brexit problem. You have the hong kong problem. Business and manufacturing are slowing. He seems to be teeing up the possibility of rate cuts down the road. Would you agree with that . Because the market has come back. We were down 100. Now were down 15. Absolutely. Look, stewart, everything right now is extremely orchestrated. If jay powell didnt get a message from the rest of the world, i can tell you chinese officials were not up at 6 00 this morning on a saturday morning putting out press releases about fresh tariffs on u. S. Goods in an uncalculated way. It is if theyre saying, can you hear me . Even coming from overseas. So this is, everything weve seen seems to be, as youre saying cueing up september the 18th for at least one more rate cut. If not maybe, the 50 basis points, half a percentage point that markets wanted but he is certainly saying that door is wide open. Stuart danielle, hold on a second. Back to Edward Lawrence, please. After the initial rush of bullet points, what can you add . Stuart, talking about this debate about trade. One of the big things that played in the speech here, Jerome Powell said theyre having trouble integrating uncertainty in trade over trade into Monetary Policy there is a big part of the speech talking about how that integration works. There is no precedent for it in the past. That is trade uncertainty. It seems weighing on Federal Reserve. To your point he does open the door to possibility of a rate cut. He allows al other members to come in, vote their mind on that. Lays out the facts. The speech does give a little more policy, less after History Lesson which he has done in the past. A little more meat to this speech on both sides, for a rate cut and against a rate cut. Sort of saying what is the flavor of the committee . Stuart edward, thank you very much. Back to danielle. Im intrigued that you say that the chairman powell paid attention to chinas statement this morning. The foreign minister came out said, they are going to retaliate. The u. S. Will feel pain. They will impose five, 10 tariffs on september the 1st. You think that was deliberate on the chinese part, teeing up, saying hey, this is us . You tell me, stuart. The release came out 6 00 in the morning in china on a saturday. Of course there is a message there and that is why powell can be as strong as he is in saying quote, unquote, there is no playbook to this trade war. You never know where the lobby is going to come from, you never know when the next bullet is going to fly or hour 1 2 before the stock market opens and two hours before my speech is set to hit the wires. Very calculated. He is right, they have to absolutely Pay Attention to it. The Kansas City Fed survey that came out yesterday, was absolutely terrible. 55 of those surveyed, where he is in jackson hole, 55 of the surveyed this trade war is hurting us, our ability to do business. He sounded the Industrial Group at the carlisle. He speaks to Business People all the time. He has to be cognizant of the fact that this is very wearing and tearing on their ability to conduct business. Stuart okay. Danielle, hold on a second. Turn your attention to the market please. Because we just turned positive. Right before there you go. Stuart right before jay powell started to speak the dow was down 95 points, that was the precise moment, down 95. Were up six points and beginning to climb. My colleague Charles Payne joins us. My interpretation at a distance what he is saying is, that he is teeing uprate cuts in the future. Going to argue with that . I wont argue with that. I think that is universally believed. 93 of the street felt that way coming into today at least for september. The argument how much more after that, how measured are they going to be. How reliant will they be on data. This is the greatest fear for anyone in the market, historically the fed is always behind the curve. When you hear about dissenters, Esther George well wait for data, sometimes data hits you like a brick wall. Jay powell is saying they will act appropriately to sustain the expansion this has been underlying thing if there is such a thing as a powell doctrine i thought this was it. Unveering commitment to never allow recession to creep into our country because he is always spoken so proudly about the role the fed played in getting yous out of the great recession. He owns that. He thinks the fed owns that. He doesnt think any president , either one, obama or trump owns that. He thinks the fed owns that. He admits they are challenged now to sustain this expansion. Stuart yes, he did say, pointed out, clearly, germany is slowing down. They have just contracted their economy, latest quarter. China clearly slowing down. Brexit poses some dreadful problem for the europeans there is trouble in hong kong. Those are all negatives. Then he goes on to say, business and manufacturing slowing down. All that suggests get in there and do something about rates in the future. Hold on a second. Ashley i want to ask, charles, is this statement Strong Enough . Because it seems to me look, we have inflation close to 2 , full employment, that is what the fed is supposed to do, we got your back basically what he is saying. If the trade develops in a wrong way but to me im not sure this is stronger statement the market, certainly the president was looking for . You bring up a great point because even as he mentioned those negatives that stu talked about on the scale is the u. S. Consumer, job wages, spending, but this can change easily, right . This part of the u. S. Part can change, not for economic reasons but psychological reasons. So the stock market in retreat changes consumer confidence. So it mitigates the impact of those higher wages and strong jobs that we have. Ashley right. He has got to see that. What theyre saying that Risk Management is a part of the job. I think this is something really compelling because he is admitting he has got to be able to mitigate risk, not react to it. This is where some of the other fed officials have muddied the waters. To be quite frank with you, midcycle adjustment comment muddied the wars as well. If you take into account Risk Management, that means being preemptive, acting to make sure worst Case Scenarios dont develop. Stuart teeing uprate cuts. I agree. Stuart Danielle Dimartino, come back, i see the market as in the dow, down 20 points. We were down 95 when we started. Looks like weve got almost a neutral response from the stock market to this big event. What do you say . You know what . I think that is exactly what jay powell wants. There were unsubstantiated, uncorroborated reports that he put a gag order out on everybody in washington, d. C. , guess what, Randy Quarles had an appearance on tuesday night that was canceled. We havent heard a peep out of a closest confidants on the fed. He wanted, calculated neutral reaction to this speech but i want to go back to something that charles just said. Dallas fed president Robert Kaplan has been on the wires. He has been the least hawkish of all fed president s who have been interviewed, he basically said were unemployment report a way from this great consumer narrative crumbling. And i think that is where powells thinking is. We had a survey come out yesterday morning from market on the surface side of the economy, 80 of the economy said that employment growth slowed to a 10year low. So charless point if he is going to be preemptive he will have to broadcast he is standing ready to get in front of data, not behind the curve as the fed so notoriously has been in prior cycles. Stuart he did say he wants to sustain the expansion, and as charles said he does not want to be responsible and allow our economy to go into recession. Ash raised the question, was it a Strong Enough statement of intent down the road . Since we raised those issues, now the dow industrials are down 107 points. You will expect this. You can expect a yoyo up and down. Danielle, you got to say i would expect a lot of algorithm trading. When they scan the speech, they look at key words. Some words are sell, some are just buy. I think that happened, because we went from a dead flat market to minus 100 in 30 seconds. I have to believe that is algorithm trading. Is it danielle . You bring up a funny point because the funniest tweet ive seen all morning long, somebody commented theyre actually more human beings waiting for powells speech than algorithms. That is how much focus weve had as a street on this but youre exactly right. Right now the computers are slicing, dicing, parsing every syllable of this. And again stuart hold on a second, danielle, right at top of 10 00 we got numbers on new home sales. They were very bad, very negative. Ashley in july. Stuart down 12. 8 month over month, okay, that is a significant drop. We are selling new homes at a rate of 635,000 per year. I would call that a negative for the housing market. Charles ashley average sales price was also down. Stuart average sales price down. Ashley from a year ago, 312,000. Thats big news. Stuart youre right, danielle. That is another reason why we now have a dip for the dow industrials. Am i right . Dovetails into the deflationary argument. Stuart hold on a second, charles, finish. This dovetails into the deflationary argument powell was making. Powell was setting up a great excuse for himself to go ahead to be more preemptive with the strong consumer by focusing on low inflation. You know his comment this morning about low inflation, more or less part of this era, maybe makes it feel like not as much your again system we heard from home depot, lowes, deflation in lumber prices. There is deflation in manufacturing prices. We see home prices starting to come down even last week. We saw spike in applications for new homes, one of the key elements week over week the prices dropped 5,000 bucks. Stuart i have to say the negative news on new home sales, the negative news on china trade that we, all of which we had this morning, just moments ago, all of those are reasons why jay powell appears to be teeing uprate cuts in the future. That is why he should be teeing them up. Maybe he didnt articulate that as much as wall street was hoping. Stuart exactly. Edward lawrence, watching the speech in person, what do you have to add . I can tell but home sales i think that number may be skewed a little. You have to look at perspective. A lot of buyers for new homes were looking at fomc meeting, which was july 31st, last day of july, as rate cut. People may have been waiting for rate cuts to cycle through on mortgages. You might see a stronger number this month because the fomc meeting was not at the last day of the month. You maybe put numbers in perspective. Stuart maybe algorithms responded to new home sales. Ashley probably. Stuart that is what happened. We went down 100 points. It is like a yoyo. Were up and down. That is to be expected. Very tight trading range. Limited percentage moves. Stuart good point. It is good. We have been down 170, i think was the low, 140, 150, and weve actually been couple points positive. That is not a big trading range. Weve been rangebound since august 5th. Stuart of course you have to digest headlines as you go you there the day, headlines, algorithms, all rest of it. Danielle, it is a narrow trading range. Were not wild swings like were used to, what do you say . No. And you know, it could be that the markets are going to now be in a holding pattern. Stuart you know, problem with Live Television is that sometimes it goes dead. That is just what happened. Danielle steve times up. Stuart satellite feed. That went down. Im sorry she was interrupted in mid flow, that happens in television. What you have to do if youre anchoring that kind of show, you smile, no matter what. Besides the market come back nicely. There you go, were down 140. Now were down 35. What did you say, justin . Ashley not my fault. Stuart justin in my ears, not my fault. No. Satellite people did this lets enjoy it. Were only down 43 points on a day weve got negative china ashley 10year yield dropped from 1. 60 to 1. 59. Two year at 1. 57. So no inverse. Stuart no inversion. Thank you very much indeed. Glad you brought that up. News from the fed created slight inversions. Fomc statement was wishywashy admittedly after the inversion. We had more fed talk, if you will. All the members who are hawkish, one of the things really frustrated with jay powell, he is not articulating a powell doctrine well enough. He doesnt seem to be able to build consensus. I was going through last night, i didnt finish it, i got tired. I was looking at all dissents historically. Stuart you read that in bed before you go to sleep . It makes me sleepy. Im trying to get a handle on the last time the members, fomc members were this defiant against the chairman. I dont have a grip on it, but it is interesting, that you had two people who want a 50 basis point cut. Two who didnt want any cuts at all. Thats a wide range. I dont think people understand the gulf there. There is usually not that big of a range of thinking. Almost like when the olympics skater and russian judge is off, everyone else that is 10. U. S. Skater . That is a six. Last time you see Something Like that. Stuart very good analogy. I use that. Top of the show, 9 00 eastern time this morning we promised clarity. I do believe that is our job. We dont like dealing with fed speak because its not clean cut and it is hard to know precisely what is going on. So here is our interpretation of what jay powell has said and the market reaction. I think, this is my interpretation, here is my bid for clarity, i think jay powell has teed uprate cuts in the future. He went to great length to say there is weakness in the germany, there is weakness in china, there is weakness about brexit. There is the hong kong situation. Our Business Life is slowing a little here in america. Manufacture something slowing a little in america. And then youve got the china trade news that came in this morning, apparently took account of that. Then you had new home sales at the top of the 10 00 hour. That is another negative. You weigh it all up. Here is what were offering, clarity. I believe jay powell is teeing uprate cuts in the future. Having said that, i dont know what President Trumps response will be. Ashley waiting for the tweet. Stuart waiting for the tweet. I am waiting for the tweet, mr. President. Lets see if we get something. Are we taking a commercial break . Im being told to adlib to the break. We always do. We dont the have scripts here. You cant use a script talking about the Federal Reserve. You get bogged down real fast. Here it is. Were down 19 points on dow industrials, very narrow trading range despite enormous news. Well be back with more after this. Ashley nice adlib. Theres a company thats talked to even more real people than me jd power. 448,134 to be exact. They answered 410 questions in 8 categories about vehicle quality. And when they were done, chevy earned more j. D. Power quality awards across cars, trucks and suvs than any other brand over the last four years. So on behalf of chevrolet, i want to say thank you, real people. Youre welcome. Were gonna need a bigger room. Why accept it frompt an incompyour allergy pills . E else. Flonase sensimist. Nothing stronger. Nothing gentler. Nothing lasts longer. Flonase sensimist. 24 hour nondrowsy allergy relief hey, who are you . Oh, hey jeff, im a car thief. What . im here to steal your car because, well, thats my job. What . What . . What . laughing what . . What . what . [crash] what . haha, it happens. And if youve got cutrate car insurance, paying for this could feel like getting robbed twice. So get allstate. And be better protected from mayhem. Like me. Stuart going to deal with mildly positive news on this yield curve inversion. It is not inverted as we speak. 1. 593, 10year. 1. 576, the twoyear. Ashley yep. Stuart not inverted. No signal of recession at this moment but it changes fast. The dow industrials down 26. New this morning, china announcing plans to impose five to 10 tariffs on 75 billion worth of americanmade products. Trade advisor Peter Navarro, he was on with Maria Bartiromo on this channel this morning. Thats when the news broke. Listen to this. We know that china steals massively from us. We know theyre killing americans with fentanyl. We know they manipulate their currency. So, when americans understand that, then when china tries to bully us, that only strengthens our resolve but in terms of macro impacts, in terms of pure macro impacts it is not large. Stuart former governor of arkansas Mike Huckabee with us now. Governor, this is a late development. It seems like it is escalation of the trade war. Seems to be saying well not get a quick next here. In fact it will drag on for longer. Whats your reading on this . Well i think china is testing the will of President Trump and the american people. Why not . They have got nothing to lose by pushing back. They have got everything to lose if they just surrender quickly. But the u. S. Position is a simple one. We either fight or surrender to the chinese, let them continue to bully us. Let them continue to cheat on us. Let them to continue to destroy manufacturing in this country. Those are the options. Those arent good options. Most people who look at this from a big picture, long term realize what the president is doing is the right thing. Paneful for a while, not unlike going to the doctor. He says this medicine it doesnt taste food. It will not be pleasant but you it may save your life. Stuart can holed the bipartisan support he has now if the president continues the hardline . Lets hope so. We have very weak knead republicans some of whom are globalists. Some of whom are interested in making sure their pals make money in the globalist mentality, instead of protecting american jobs, american workers, the American Economy but interestingly there are some democrats who side with the president on this like chuck schumer, who recognizes you cant let china keep rolling over us. Yes it is not going to be easy but this is no time as Margaret Thatcher famously said to president george w. Bush, h. W. Bush, 41, dont go wobbly. I think that is what we need to say to the republicans in congress. Dont go wobbly. Stand with this president. He is standing for this country and its workers. Stuart another one for you, governor, we seem to be getting confused about cutting taxes. One day the president says cut them. The next day he reverses says, no, were not going to do that. The next day larry kudlow comes on our air, says were thinking about cutting taxes. Talking about cutting taxes in 2020 campaign. Why do we need tax cut if the economy is doing so well, governor . Well i think tax cuts are a good Economic Policy whether the economy is doing great or not. It is ultimately recognition that the money in a tax cut returning it to people who earned it in the first place. People talking about tax cut, they act where the government is giving away the governments money. Where did they get the money . They got it from people who earned it. They took it from them voluntarily. If there is opportunity to give it to the people that went out to work for it, that is the answer. Stuart with all the news, we appreciate you being with us. By the way there is not that Much Movement on the stock market despite all this news. The dow industrials down 44 points. That is virtually nothing on a 26,200 index. Next one, when President Trump suggested buying greenland a lot of people laughed. Maybe there was something there. Greenland has strategic importance. It is not just a chunk of ice. No its not. We got the story. Gun traffickers now using snapchat to sell illegal weapons. Details on that one as well. Dow industrials down 40. Well be back. indistinguishable muttering that was awful. Why are you so good at this . Had a coach in high school. Really helped me up my game. I had a coach. Math. Ooh. So, why dont traders have coaches . Who says they dont . Coach mcadoo you know, at td ameritrade, we offer free access to coaches and a full education curriculum just to help you improve your skills. Boom mad skills. Education to take your trading to the next level. Only with td ameritrade. I am the egg man Stuart Lauren simonetti sitting next to me. You never heard this. No, im sorry. Stuart you never heard the walrus . I am the walrus . Indeed i do. Stuart i would love this. 50 years ago, still revolutionary. I will have a Beatles Party over the weekend. Stuart im coming. Watch out. Lets get serious, dow industrial in very narrow traying range. All kinds of news from the fed chairman. We have china trade news. We have very weak new home sales figures. All the way down 40 points. That is virtually, very narrow trading range as we speak. So lets digress, shall we . Well bring in something really interesting. Greenland, when we heard the president was interested in buying it, we thought it was a joke. The Mainstream Media mocked him. Turns out it wasnt as crazy an idea as people thought. Tammy bruce will tell us why it is not a crazy idea. Go. President is always underestimated but there is method what some may say is madness. This goes back several years. In january of last year china was visited by greenlandic leadership. They wanted more infrastructure spending. They went to the kingdom of denmark, denmark said, we dont have the money. Then they went to beijing. When you dont do that unless denmark is okay with it. Effectively theyre selfgoverning, theyre like a colony of denmark. So they go to beijing, says, yes, if we can control everything. It is our construction people, we manage it. It would be like a loan. Now neither greenland relies on denmark for money. They would default on that loan. China would effectively own greenland. This goes on several months. We find out about it, we go to denmark, wait, this is unacceptable this is a north American Island with incredible resources, including rare earth minerals, things we need we rely on china for. In addition to uranium, gold, a whole host of other things. We go to denmark, we say that is unacceptable. Through the negotiations of of course the trumps art of the deal, denmark finally says okay. So we eliminate that threat but only until last june did china finally say, all right, were going to back off. So the timing of the president saying, gee, look likes maybe greenland needs to be bought. There is a reason for this, just a few months after china officially retreated from their effort to do the airport. They have been looking trying to move into greenland for years prior to this. Obviously, even the Foreign Ministry describes it as a weak, effectively vulnerable country. You know, there was, belt and road system. And look, if we dont do it, denmark, doesnt have the money for it. The peel of greenland by the way are suffering. High unemployment. High suicide rate. High alcoholism, because greenland doesnt allow really much industry at all because do their, were environmental warrior stuff. Look how beautiful greenland is, meanwhile peoples lives are being destroyed. Stuart denmark spends 540 Million Euros on greenland every year. Ashley yeah. Stuart there is only 56,000 people. Ashley 700 million u. S. Dollars. Stuart every year. They dont know what to do with it. Those lives are fenn, there is nothing to do. There is Canadian Company that does some gold mining there. But they really keep any industry out because they want to show it off as some wonderful environmental colony but the royal family made some interesting comments, that they thought that maybe the people of greenland should vote on this. That this is, would be up to them. They love greenland but look, it really is a drain. The president knows what he is doing. There is both a National Security interest and, look, somebody needs to make greenland great again. If anybody can do it would be donald trump. And frankly it would take a major load off of the kingdom of denmark as well. Stuart bring back the vikings, buy them. Why not . Tammy, thank you. There is always diversion. Stuart diversion from jay powell. China is looking around. Were taking care of business. Stuart make greenland great again. Mgga. Stuart trying to work that out. Do we need a green hat. Great idea. Stuart where do you get this stuff from . Happy friday. Stuart thanks for bailing me out. My pleasure. Stuart big news of the day of course fed chair powell and Interest Rates. Of course it is latest on china trade. Yes, those miserable new home sales figures. The dow industrials are only down five points. Very narrow range. So we need to take a break from this intense fed stuff, financial stuff and i have a perfect story for you. Uc berkeley. Ashley where else . Stuart offering a new class on how to be an adult. Lauren simonetti has the story. What do you learn in this class . We need to make College Great again. You learn how to be an adult. It is called adulting. Its a thing these days. You get credit, write reflection paper how to be an adult. What do you learn . The well, serious stuff in my opinion. You learn how to budget your money. You learn how to file your taxes. Do the laundry, change a tire. Stuart berkeley going to change you that. Isnt your parents job to teach you that . It is partly studentrun, but you get credit. Stuart how to do the laundry . How do be an adult. Things required, Tasks Required to be an adult. Stuart got to be joking. Totally serious. Through the decal program. It is passfail game. You have a mid semester paper how to achieve a goal. They have a psych expert or how stuart spare me, a psych professor from berkeley telling me how to be an adult. Spare me please. I agree 100 with you. I talked to Charles Payne in the hallway. He thought it was good idea. I talked to some of the people on your show about this. They think its a great idea. Stuart fire them all. Im with you on this. Have to learn how to be an adult. I want my money back. Stuart i have a bunch of producers in my ear shouting loudly, dont make me deaf. The market turned around. We were down a few points. Now were up seven points. Extremely narrow trading range. You see what greenland and u. S. Berkeley lightened it up. Stuart producer, where are we going now . Will i tease this . Oh, the snapchats. Here we go. New investigations in california show gun traffickers are using snapchat to sell weapons. Ashley. Ashley not a big surprise. They have been doing this quite a long time, using facebook, twitter instagram. Unfortunately for california they have strict gun laws. Nevada next door doesnt. You can buy guns youre not allowed to look at in california. Nevada dont require background check or even recordkeeping for private party sales. What do people do. Go to nevada. They load up on guns. Illegally transport them into california. Start advertising sale on snapchat, whatever social media platform. Its a huge problem. A lot of guns end up in hands of convicted felons who shouldnt be allowed to have a gun. Used in murders, robberies, god knows what else. Often the weapons are not ever found again. Its a very difficult problem. They have done undercover operations to bust some gun rings. Bottom line, when you have states right next door, it is pretty hard to stop inflow of illegal weapons. Stuart see what you did . Dow industrials are now up 34 points. Ashley youre welcome, america. What im here for. Stuart what a guy. Now were up 29 points. Story really is, its a very narrow trading range, despite the very Important News that were being carrying for you all day long. Look at this. I have a robocall. Ashley answer it on air. Stuart on second of the show, three hour show. Unbelievable. No, never answer it. No. Stuart serious stuff. Iran has a unveiled a new longrange missile system. Should we be worry worried about this . Well ask a National Security expert on show. President trump has close relationship with apples chief tim cook, seems to work in apples favor. Should other tech ceos dot seam . Well ask that question. Back in a moment. This is the couple who wanted to get away who used expedia to book the Vacation Rental that led to the ride which took them to the place where they discovered that sometimes a little down time can lift you right up. Flights, hotels, cars, activities, Vacation Rentals. Expedia. Everything you need to go. Expedia. They give us excellent customer otservice, every time. E. Our 18 year old was in an accident. Usaa took care of her car rental, and getting her car towed. All i had to take care of was making sure that my daughter was ok. If i met another veteran, and they were with another insurance company, i would tell them, you need to join usaa because they have better rates, and better service. Were the gomez family. Were the rivera family. Were the kirby family, and we are usaa members for life. Get your Auto Insurance quote today. Stuart got a little bit more on china trade news for you. China says they will impose tariffs. They will impose tariffs on american cars being exported to china and car parts. I dont think that is a very big deal because we dont export many cars over there. General motors makes them over there. But we dont export them to there. I, the significance of that is not too extreme. Meanwhile the dow industrials are up 50 points. This is fed day and were up just 50 points, very narrow trading day. Well bring you President Trumps tweet on what, the fed in just a moment when we got it ready for you, but suffice it to say the market is up 40 points. That is what weve got. Here we go, this is what the president has just said via tweet, here we go, as usual the fed did nothing. It is incredible that they can speak without knowing or asking what i am doing which will be announced shortly. We have a very strong dollar and a very weak fed. I will work, quote, unquote, brilliantly with both and the u. S. Will do great. My only question is, who is our bigger enemy, jay powell or chairman xi . That will be the leader of china. That is pretty strong stuff, i got to say. Ashley very strong. Stuart no impact on the market. The tweet just went out. Were just digesting it, the dow is up 50, to up 34. Im simply not going to say that is any kind of Significant Movement bearing in mind, that was a very ashley calling xi an enemy. Stuart yes. Ashley in that statement. Stuart who is the greater enemy, chairman powell or xi xinping . Strong stuff. You expect it from the president. He came out with it right there. No impact on the market. Got that. I want to get back real fast, do it quickly, to the iranians, showing off this new longrange missile. They say it can detect a target 190 miles away. Guy snodgrass is back with us, former speechwriter for defense secretary mathis. Guy, we also have news, a report i should say, that north korea is militarizing nuclear bombs. They often work with iranians. The iranians have a longrange missile. I think we should be worried what do you say . I talked about last time i was on your program about the increasing instability around the world, getting back to what you started with, irans new missile system. They claim it can go it 190 miles, it can possibly intercept, possibly destroy a aircraft 125 miles away from the system. Is that impressive increase on capabilities what they already have . It is. Is it a gamechanger for iran in the gulf . Its not. Stuart its not. What youre saying rests upon their claims. They are claiming 190mile distance. We dont know that for a fact . We dont know that for a fact. Well see what we can determine about that system. Reason why i say it is not a gamechanger for iran in the region, in 2003, 2004, i was combat pilot over iraq, we were flying missions from the gulf. We new iran already had Missile Systems can reach out and touch us at those ranges. This is not true gamechanger. This is increase of capabilities. Something we should keep account of. Stuart what do you think of the g7 summit . President trump will fly over there tonight. Europeans wont spend money to defend themself. It will be a tense weaken in france . I agree with you. I know youre right. I was there with with nato, President Trump consistently, throughout the administration asked for nato allies, allies, partners, europe, asia specific to increase defense spending n this case what President Trump is referring to is a 2014 agreement, called the wales pledge. Where all nato nations pledged to increase their spending for defense up to a minimum threshold of 2 of gdp. So for a lot of nations they need to raise that up as you referenced. Stuart why dont they do it . Why dont they do this . Why dont they defend themselves . I think they do defend themselves. There is argument to be made certainly over the last two or even three decades as the United States has exerted primacy around the world it is the easy button. You can rely on the United States military to be there when you need them. That allows them to potentially use funding or monies to use for defense put them on domestic programs. Stuart look, guy, people over here are getting a little annoyed about this. We spent heaven knows how much defending them, they hate us. They hate our president. They dont like america, american culture. They wont defend themselves, they wont ante up the money they agreed to pay four or five years ago. You can understand President Trump laying down the law to tease people, cant you . On the delegations where i would be in brussels, be in talking to our allies and partners i would not say they hate us. This longstanding alliance, partnerships with the United States forged after world war ii has served our country very well. It is our in our best interest to have strong allies and partners. As you talked about the program today, china, iran, north korea, there is a whole multitude of nations causing instability out there. You want those allies, you want those partners working closely with us, and us with them. Stuart we certainly do. Guy snodgrass. Thanks for joining us, well see you real soon. Thanks, stuart. Stuart we have a guest coming up who says joe bidens views on china are stuck in the 90s. What does he mean by that . Were getting him to make his case and that will be next. Plus amazon rainforest, burning for days. Big parts of it at least. The smoke is so thick it can be seen from space. Nasa released pictures of it. What is brazils government going to do about that . Were on it. Seminole. Introducing the allnew chevy silverado. With fifty industryfirsts. Its the strongest, most advanced silverado ever. Liberty mutual customizes your car insurance, so you only pay for what you need. I wish i could shake your hand. Granted. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. Stuart one surprise of the morning, this very narrow range of dow industrials. Expecting a movement up and down, as market digested comment from jay powell. It digested comments. Were up 30 points. That is where we are now. That is where weve been for some time. Look at the gap, plies. Sales fell way down, off 2 from last year. The stock is virtually unchanged, up 6 cents. Now this, our next guest has studied former Vice President s joe bidens history with china. He is a writing fellow at uc berkeley, and he joins us now. Zed, you studied this. Your conclusion please . The reality joe biden argued for decades that a rising china would be positive for the United States, positive for the rest of the world. He consistently downplayed the economic rivalry that china would have with the United States. When they had the big trade vote at the turn of the century, joe biden said he didnt expect a collapse in the Manufacturing Sector of the United States. He didnt expect china, which he said had an economy the size of the netherlands ever being a Major Economic rival of the United States. We looking back can say all that was wrong. Stuart he got it wrong. Was this consistent all across the board, whenever he spoke about china he got it wrong . At certain points in the 1990s he raised human righting issues. He was on the Senate Foreign relations committee. He was critical after tianamen square. He argued consist 10ly more trade with china would create more social and Political Freedom in the country. China is shuffling off people to concentration camp if they happen to be muslim. They have most sophisticated Surveillance Technology in the world. Basically every measure joe biden has gotten the story wrong on china. Stuart i dont mean to be facetious, im surprised someone uc berkeley is critical of a democrat, any democrat. Dont get me wrong here, im not being nasty. Im surprised youre coming out so strongly against joe biden and his history of policy in china bearing this mind where youre from. You want to make comment on that . Personally im politically independent. The center i work for is nonpartisan. I should emphasize that. This is the issue. I think china is coming under fire from both sides now. I think folks on the right like josh hawley, missouri republican, folks on the left, tammy baldwin, bernie sanders, Elizabeth Warren saying we had 20, 25 years of bipartisan failure on the issue and joe biden is no exception. Stuart are we near to a cold war situation, america and china . Well i hope we wouldnt have the sort of Nuclear Arms Race we had, sort of cold war, sort of proxy conflict of vietnam or latin america. We have a economic rivalry with the country. We should look at ways to weaken the government that really right now is the worlds most powerful totalitarian state. Stuart that is fascinating. Zed, thank you very much for sharing your research with us. It is appreciated. Thank you, sir. Good stuff. Thank you. Stuart bernie sanders, well he unveiled his latest climate plan. It comes with 16 trilliondollar price tag. Sanders says it is expensive. The cost of doing nothing will be far more. Does he have a point . We asked a man who is considered a reasonable environmentalist. Well ask him the questions. Thousand of protesters in hong kong laid hands to create a human chain across the entire city. It was largely peaceful as a protest. Any developments there in hong kong, well bring them to you real fast. Ed rensi, the former mcdonalds chief, he says capitalism as we know it is at risk. That is strong stuff whats that all about . He will make his case next hour. 2,000 fence posts. 900 acres. 48 bales. All before lunch, which we caught last saturday. We earn our scars. We wear our work ethic. We work until the works done. And when it is, a few hours of shuteye to rest up for tomorrow, the day well finally get something done. stuart it is almost 11 00 here on the east coast and were going to reset all thats been going on for you today. First of all, the Federal Reserve. Jay powell says, hes the chair, he says the fed will act appropriately to sustain the economy. He did warn about Global Growth concerns and trade uncertainty. In my opinion, he seemed to tee up rate cuts in the future. President trump is not happy. Heres the tweet. As usual, the fed did nothing. It is incredible that they can speak without knowing or asking what i am doing which will be announced shortly. We have a very strong dollar and a very weak fed. I will work brilliantly with both and the u. S. Will do great. My only question is, who is our bigger enemy, jay powell or chairman xi . Strong stuff indeed. More on that in a moment. Speaking of china, they say, the chinese say they will slap 5 to 10 tariffs on around 75 billion worth of American Goods starting september 1st. Thats the latest development in the ongoing trade dispute with china. Now, Peter Navarro was on fox business this morning as that news broke, and heres what he said. Roll it. We know that china steals massively from us. We know theyre killing americans with fentanyl. We know they manipulate their currency so when americans understand that and then when china tries to bully us, that only strengthens our resolve but in terms of macro impacts, in terms of pure macro impact, its not large. Stuart okay. I want to break off from that because weve got a trump tweet and it is really hurt the market. Here it is. The latest, im reading this right now. Our country has lost stupidly trillions of dollars with china over many years. They have stolen our intellectual property at a rate of hundreds of billions of dollars a year and they want to continue. I wont let that happen. We dont need china and frankly, would be far better off without them. The vast amounts of money made and stolen by china from the United States year after year for decades will and must stop. Our great American Companies are hereby ordered to immediately start looking for an alternative to china, including bringing your Companies Home and making your products in the usa. I will be responding to chinas tariffs this afternoon. This is a great opportunity for the United States. Also, i am ordering all carriers including fed ex, amazon, ups, the post office, to search for and refuse all deliveries of fentanyl from china or anywhere else. Fentanyl kills 100,000 americans a year. President xi said this would stop, it didnt. Our economy because of our gains in the last two and a half years is much larger than that of china. We will keep it that way. My goodness me. The Immediate Impact, i know youre reading it on the screens, the Immediate Impact is a selloff on wall street. Look at this. We are down 207 points. We are down 185 points. This drop, this 200 point drop occurred immediately as the trump tweet came out. There you have it. Look at the nasdaq, down almost 1 . The s p down almost 1 . The dow off about 200 points. Sven hendrix joins us, north man trader and founder. I know you just saw this from the president. I read this as negative news on china trade. I read this as an escalation in the trade dispute. How do you see it . The trade war just got real, right . Theres slow piece of escalation here where you dont know where its going to end up. Obviously markets have been pricing in part of the trade wars but have also been ignoring them throughout the year because we always had the fed put and the markets so far this year have been running on multiple expansion and based on expected rate cuts and more liquidity from central banks. But as we found out in july and august, this trade war is racheting up and its very difficult to price in for the fed as well in terms of their risk assessment. Stuart hold on a second. For our viewers, we are putting this trump tweet up on our screens again so we can get a good look at it. It is long and it is intense. Im reading just part of it right now. Your company, im ordering, basically hes ordering our Companies Home and making your products in the usa. Hes telling American Companies you come back home, you bring your product, you make them here. I will be responding to chinas tariffs this afternoon. So hes suggesting theres more action to come. He says all deliveries of fentanyl from china or anywhere else must stop. Fentanyl kills 100,000 americans a year. President xi said this would stop, it didnt. Our economy, much of our gains of the last two and a half years, much larger than that of china. We will keep it that way. So you know, i keep going back to it because it is so strong. This is a line in the sand right there. There is no retreat whatsoever and it comes after china said that they would impose tariffs on our stuff a couple of hours ago. This is real escalation, right . Oh, absolutely. Thats why markets are reacting and its adding to the uncertainty, right. The global slowdown in growth is at least partially driven by the fact that theres a lot of planning uncertainty on the side of companies, so they are holding back on capx investment, Business Investment and so forth, and you have to be concerned in general, when you have eight, nine major global economies either in recession or at the verge of recession, when you get news like this, whether this is going to accelerate the downward momentum on the Global Growth curve. Stuart thank you very much for instant analysis. Sorry i just chucked that right at you. Nobody was expecting this and you handled it very well. Sven, thanks for joining us. I want to move on to apple. The president in that tweet says hey, you people who are producing product, you are hereby ordered to bring it back and make stuff in america. Now, look at apple. Apples stock is down four bucks on that tweet. Gene munster, luke ventures guy, joins us now. Your reaction to the trump tweet which im sure you just heard moments ago. Stuart, its strong language, clearly, and my reaction is similar to your reaction. This is a step up in this dispute, this war, if you will. As far as what it means is its going to stoke what i would consider idle speculation over the months to come. I think that its important in these times to take a step back and have clearheaded thinking, that these disputes are going to take a long time to sort out. Lets call it a year or two years, potentially. At the end of the day, i think there are going to be two central takeaways. Like it or not, the u. S. Will remain the worlds strongest economy and separately, china is also going to be a formidable economy, second largest in the world, slightly behind where the u. S. Is at. I think what is most important is to try to fastforward a couple years from now and start to think about how we can get some resolution to this and which companies will benefit the most. Stuart thats a long time in the future. I have to make this observation. One week ago, last friday night, President Trump had dinner with tim cook and they seemed to emerge from that dinner with a decent relationship. In fact, the president said he can understand that apple is facing intense competition from samsung. They dont pay tariffs. Apple products do. So whatever happened to that working relationship . It looks like the president s just overrode it completely. I see it a little bit different. I think that overall it was a fruitful interaction for apple. I think tim cooks done a great job of kind of staying in generally the good graces with the administration and keep in mind that apple is in my opinion the worlds greatest company. I think that this is a symbol of American Business strength and i think Trump Realizes that. And i do believe that the probability that apple actually does get tariffed, there is disputes around what the chances are. I think it actually is very low that the u. S. Would tariff an apple product coming in. As im thinking about this recent tweet that came out a few minutes ago, i dont think it changes any of that probability. There is a call for more manufacturing which we can talk about in the u. S. Stuart hes demanding, the president is demanding that. The president is flat out demanding you start producing here. Now, whats apples position on that . Yeah. So maybe just quickly talking about apple specifically, apple manufactures, assembles the vast majority, 95 of their products, in china. There is a large infrastructure, over a Million People buildout. Its unrealistic to think apple can call this manufacturing back home. If they were going to go to different markets or bring it back to the u. S. , Something Like that would probably take in the order of five to ten years to do. This is a huge undertaking. So ultimately thats one thing to consider. Something else to consider is that there are economies of scale in manufacturing outside of the u. S. So the u. S. Consumer needs to get more comfortable if you do want to keep buying these u. S. Products, whether its apple or a maytag washing machine if they are manufactured in the u. S. , likely the cost of those will go up. Stuart gene, thanks very much for joining us. Thank you. Stuart i hate to throw that right at you because it happened the moment you appeared on camera. We appreciate it. Thank you very much indeed. Thank you, stuart. Stuart before we go to our next guest, look at the market. Straight down. We are off at the moment 370 points for the Dow Jones Industrial average, down 44 ashley big question there, can a president order what private companies should be doing . Probably not. Stuart he cant. But he can really put heavy duty pressure on. Deirdre the burden for these companies, i just was thinking of fed ex, they dont how are they going to screen which packages stuart maybe they have to. Wait a second. We just asked the question, can the president order that American Companies produce in america. Can he order that and make it stick. You are shaking your head. Christian whiton is with us, former u. S. State department guy. Christian, can the president order American Companies to produce in america and not china . In a way, yes. He can order them to not produce in china under the provisions of the amendment to the trading with the enemies act, in a time of National Crisis the president can regulate essentially all International Trade between that adversary and the United States. So perhaps you couldnt say you need to move your plant from shenzhen to oshkosh, wisconsin, but he can say you cannot import goods from china, if he really wants to go the full length. Now, i suspect that this is probably at least a first attempt at using the power of the oval office in a way that perhaps president roosevelt or president kennedy did to try and convince business to do what he thinks is the right thing but if necessary, he actually can, without any additional legislation from congress, use very considerable powers. Its unclear if hes going to do that, though. Stuart are you surprised at the i would call it harsh language, i would call it direct, forthright, straight at china . You surprised at that in this stage in whatever negotiations are going on . You know, i thought Something Like this might be coming. We have tariffs on the second half of chinese imports coming, a portion of those, on september 1st, a portion of those delayed but certainly now going on december 15th. I think what this may be is a reaction, you know, the chinese think they can wait out donald trump. They think they are going to get a better deal if trump is defeated in next years election. We can debate whether or not the president is likely to get reelected. I think he is. But theres been a sea change in washington. I dont think chinas going to get what it wants from a different political outcome. But the fact is i think the president realizes they are trying to slowwalk this. They are not negotiating candidly. There have been Conference Calls going on, there will be meetings, supposedly, they may cancel that after today, taking place between the u. S. And china, the next round of formal negotiations on trade, next month. I think he thinks the chinese are doing what they often do, slowwalking and proceeding without candor in those negotiations and we have this lingering problem thats been made clear by hong kong. A reminder that china breaks almost everything it signs its name to. At least this government does. All the international agreements, the ones it got into the wto by making, the ones that made hong kong in terms of the handover, the ones that made the president obama on cyberattacks and on militarizing the south china sea, china has broken all of those. I think this might be a manifestation, a sort of final product of frustration. Stuart Christian Whiton, thank you for joining us on short notice. Always appreciate it. I have to tell you, tell our viewers, this china trade tweet, i think there were three of them, long tweets from the president , has completely upstaged jay powell and the Federal Reserve and what hes going to do with Interest Rates. Ashley theres more to come. Dont forget, he said youll find out later this afternoon my response to the latest response from china and their added tariffs. Theres more to come. Stuart teeing up more to come. The market, the dow down 339 points as we speak. Thats about 1. 25 . Similar or bigger losses on the s p and nasdaq composite. Keith fitz joins us on the phone right now. Keith, ive got to say i was a little surprised the harshness of the language the president used but clearly, hes staking out a very hard line, taking it right up to the brink here, no backing off whatever. He is, stuart. Ive got to tell you, im quite surprised. Im not entirely caught unawares, however, because the chinese are pursuing classic chinese negotiating tactics and i think the president is responding accordingly. Whether or not the United States markets can withstand that or are prepared to deal with the fact hes taking this action is a different question. Stuart it was an immediate response. At 6 00 eastern time this morning, the chinese Foreign Ministry issued that statement saying that the u. S. Will feel pain because they are going to retaliate. Shortly after that, we got news that they would impose these 5 to 10 tariffs on just 75 billion worth of our products. Then couple of hours later, the president comes out with a very strongly worded tweet saying hey, youre not going to get away with this, were going to pull back production out of china, bring it back here and by the way, you fed ex, ups, post office, you dont let any fentanyl into this country from china or anyplace else. Its a Progressive Movement of move, countermove and escalation. Why is it so bad for the market, keith . Well, the markets are based on future profit potential and what traders are reacting to so correctly and so viscerally is the fact that they cannot see their way out of this. Thats where the markets come down. The president clearly thinks he sees an exit. China clearly thinks they see an exit but traders who are caught in the middle of this have to place bets with trillions of dollars of real money right now and right now what theyre doing is taking it off the table because they dont like what they see. Stuart let me turn this around and link jay powell to china trade. In his speech this morning, jay powell went out of his way to point out that the china trade situation was, i dont know how to say this but slowing us down, affecting us. Its a head wind, as he put it. Then right after he speaks, we get this escalation. So there is a tiein between what jay powell said, i think he was teeing up future rate cuts, and the china trade tweets. Keith, i have to say, doesnt this make rate cuts from the fed more likely . I believe that it does. Now, you know, as much, as harsh as i am on the fed, i think that he was appropriately teeing that up. But also, i think, it was a remark designed to make him appear relevant. I think the fed is clearly caught in the middle. They are out to lunch right now and the battle is clearly between president xi and President Trump. Stuart are you buying anything right now . No, stuart. Im hanging back. This is one of those days where i dont like what i see. Sentiment is running against the market so no matter how much i feel that many of these companies are going to be good buys, i dont think today is the day to do it. Stuart thank you for joining us on short notice. We appreciate your input indeed. I will bring you up to speed. You can see it on the lefthand side of the screen. Most stocks are down. The dow industrials are down 300 points. S p and nasdaq, down about 1. 25 . Ashley the u. S. Dollar hit a twoweek high now against the chinese yuan. Stuart i do believe this pushes jay powell more and more towards rate cuts. Ashley yes. Stuart you see the dollar going up, china trade escalating badly, hes promised to take care of this. Surely that means rate cuts are coming. Deirdre i think youre right. The president is pushing, right, pushing this right exactly to the edge. But i also can see our guests point of view, this would be a huge burden to change your entire manufacturing chain . That is a 12 to 18month process at best. This puts an enormous burden on u. S. Corporations which is why we are seeing the market selloff. Stuart good one, deirdre. Christian whiton is still with us. I have Brian Wesbury lined up. Let me bring back christian, because i raise this issue. The president leaves for the g7 meeting tonight. Before he left, hes got these very harsh tweets about the fed and even harsher about china trade. This is going to be an extremely contentious g7 meeting, isnt it . I think it will. This is a power play the president is doing with the fed chairman. Personally, i and others like me who believe in a strong executive and that the constitution means what it says, i think the president can actually fire the fed chairman. The constitution is very explicit that the president of the United States can supervise the executive branch and you cant possibly do that without the ability to dismiss people who dont perform. I think that might be coming. We dont know. Maybe he wont be chairman. Its unclear. But going into the g7, you know, its funny if you look at what the bureaucrats are saying, they dont want trump to blow up the g7. Its sort of odd to want to have a summit but have it not be relevant. I think its important that trump actually goes and raises these issues. What is europe doing to help the free world in its struggle with china. Thats a big deal. Whats it doing to help with iran. The brits are helping. Some of our gulf allies are helping. Japan is helping. So yes, it will be contentious but my view is that a contentious summit is better than one where you just have a bunch of bland talks about Climate Change and sustainability, put out a joint statement no one will ever read, then its over. This is a chance for the g7 to do what it was meant to do, governments that can actually accomplish things because of their resources coming together. Stuart dream on, Christian Whiton. Thats just my personal opinion. Im sorry. Its a talkfest. Thats all it will ever be. Thank you very much. Appreciate it. Ashley gold up 26. Theres a big jump into gold. Fear factor. Oil has now dropped to 53. 84 a barrel. Stuart 53. 84. Ashley down 2. 66 . Stuart tell me the tenyear. What about the yield curve inversion . Ashley tenyear, 1. 57 . Twoyear, 1. 55 . No inversion. Stuart thats interesting. At 1. 57 , that means money has poured into america in the last hour or two because we were at 1. 60. Now were at 1. 57. That means people are buying treasuries, rush to safety. Price up, yield down. No inversion, however. Ashley no. Stuart fascinating. Brian wes billibury on the phon us now. Brian, you are an economist. Real fast, get straight at it, if you will, what are the economic consequences of china imposing these tariffs and us getting real strong on bring your production back home . Yeah. I personally truly believe this, that within a year or two, we could remove ourselves from trade with china. It would hurt china way more than the United States. Stuart whoa, whoa. That is dramatic stuff. We are the worlds two largest traders together. More trade between the two of us than almost anyplace else. We actually trade more with mexico and canada than we do with china. The United States is the Worlds Largest trader. We actually trade more in total, imports plus exports, than china does. Stuart are you returning to the argument that they need us more than we need them . Absolutely. The reason, if you think about it, in 1980, this goes back 39 years now, china was a nation of one billion impoverished people. What they did, they were using oxen to plow their fields. Now theyre using john deere tractors with air conditioning and gps satellite service. And they have a cell phone system. They never had a copper phone system. They have grown in wealth because they imported technology from the west. They learned that this allowed them to grow. They freed up their economy a little bit and they imported this technology. Now they are stealing it because they got addicted to technology. But it doesnt work when youre stealing, when you are a communist country, you cant grow at 10 rates forever. And theyre running out of juice. Stuart hold on. And President Trump is putting pressure on them at the right time. Stuart hold on for one second, please. We have viewers who may be joining us fresh off the bat who dont know whats going on. They want to talk about or they are thinking we are going to be talking about jay powell and the Federal Reserve. Well, that news story has been upstaged by some tweets from President Trump on china trade that came across the transom im guessing 20 minutes ago. Can we get them on the screen . I think this is worth reading again. The language is so strong. I want to read those tweets so that all of our viewers can know exactly what we are talking about here. Its quite extraordinary stuff. Hold on. I will tell you its harsh. Ashley im just saying the crux of this is the president said before we get this tweet up, u. S. Companies are hereby ordered immediately to start looking for an alternative to china. Stuart leave china. Go some place else. Ashley including bringing your Companies Back home to the u. S. Stuart have we got the tweets . Okay, good. Our country has lost stupidly trillions of dollars with china over many years. They have stolen our intellectual property at a rate of hundreds of billions of dollars a year and they want to continue. I wont let that happen. We dont need china and frankly, would be far better off without them. The vast amounts of money made and stolen by china from the United States year after year for decades will and must stop. Our great American Companies are hereby ordered to immediately start looking for an alternative to china, including bringing your Companies Home and making your products in the usa. I will be responding to chinas tariffs this afternoon. This is a great opportunity for the United States, also i am ordering all carriers including fed ex, amazon, ups and the post office, to search for and refuse all deliveries of fentanyl from china or anywhere else. Fentanyl kills 100,000 americans a year. President xi said it would stop. It didnt. Our economy, because of our gains in the last two and a half years, is much larger than that of china. We will keep it that way. As the president said, theres more to come on china trade this afternoon. That has pushed the market way down. We are off 350 points. At one stage we were down 400. Now we are down 350. Thats 1. 33 . A bigger loss for the s p, 1. 5 . Big loss on the nasdaq, 1. 6 . Ashley amazing. Gold now up 27. Stuart oil all the way down to 53, is it . Ashley yes. 53. 84. Apple is off 6. 3 down now. Stuart yeah. When you Order Companies to get out of china, stop producing there, thats directly aimed at china to hurt them. Lets see how that works out. Ed renzi is with us, the former mcdonalds ceo. Ed, welcome back to the show. I really want to talk to you about this china trade and what we have been hearing here. Were you expecting language like that from our president . Because its kind of harsh, very combative, isnt it . Well, it is. But lets be realistic. The rest of the world, the g7 is playing checkers and hes playing chess. He made a bold statement because hes serious about this and he wants the g7 to wake up to the fact they better join him. Lets make no mistake about this. China is a communist country. You see what theyre doing in hong kong. They are unrelenting. Their work conditions in places that are not americansupervised are horrible. I think trumps doing exactly the right thing in exactly the right way. Is it going to cause us pain . You bet. Apples got a problem they are going to have to get solved because they are making those apple phones over there. They need to find another place to start making those phones and create competition. I think trump did exactly the right thing. Stuart do you think mcdonalds will have a problem in china . After all, its quite possible there will be a nationalist backlash in china against American Products and companies. Very well could be except that all the restaurants in china are owned by the chinese. The suppliers are chinese companies. Mcdonalds franchises our organization, they set up local supply chains. I think if theres they are going to hurt themselves. I think mcdonalds will be just fine. Stuart big picture here, are we winning this . If this is a flat out economic fight, are we winning it in the sense we are doing better than china . Well, the reality of it is theres a difference between strategy and tactics. This is a very strategic move on trumps part. In the short term, its going to cause us pain. Tactically i think its brilliant. We have got to make these folks understand we are serious about this. The theft of our intellectual property has been going on since i visited the Research Triangle in North Carolina in the early 80s. Theres nothing new about this. Trump has been the first president to stand up and say enough is enough. Do it yourself from here on in. I think its bold, i think its going to be difficult in the short term but they need us a hell of a lot more than we need them. Stuart does he carry the country . Does he keep a bipartisan agreement in the United States that china must be confronted in this fashion . Its really kind of interesting. Trumps not the typical kind of politician president. Hes a deal maker. His mind is a constant stream of consciousness through twitter. You get an indication of where hes going, what hes thinking, all the time. I think at the end of the day, he really truly wants to make America Great again and i dont think at the end of the day that he really cares so much about the electorate as he cares about the country and its longterm strategic future. Stuart ed rensi, thanks very much indeed. I want to thank all of our guests for stepping into the breach, so to speak, offering instant analysis on a major news development. Good stuff. Thank you very much indeed. Gordon chang on the phone. Another china expert who knows what hes talking about. Gordon, your take, please, on the long trump tweet about china. Go. I think its a very good thing, stuart. Because people have got to recognize that chinas been stealing u. S. Intellectual property and this is a grievous move. We americans of course focus on the problems that the tariffs cause for American Consumers and big box retailers, but thats really nothing in comparison to what the chinese are doing to the Long Term Health of the u. S. Economy. Stuart as i look at the situation as it stands now, after these tweets, it sure doesnt look like any kind of shortterm modest agreement is possible in the near term and it really looks like this is a trade fight that will drag on for a very long time and may become increasingly bitter. Is that the way you see it . Of course, stuart. I dont see a comprehensive agreement with china largely because the chinese political system now i think is frozen for various reasons. Xi jinping, the chinese ruler, doesnt want an agreement because if he were to make any sort of compromise, it would jeopardize his political position. As the president says, we dont need china nearly as much as they need us. So this is a trade fight that we can win as long as we have the political will. I do believe there will be a consensus that we see today will actually china is the malign actor and going forward, the people are going to realize whats at stake here and will get behind our president. Stuart just a few moments ago, economist Brian Wesbury suggested that we could freeze out china from our trading relationships. In other words, we can do without them entirely. What do you say to that . I think that except in certain sectors, thats probably true. Im concerned about our dependence on pharmaceuticals from china and there are a few other areas where we will be dependent for quite some time. It will take, for instance, apple at least two or three years to shift its supply chain to india and perhaps to mexico, maybe even bring back some of it into the u. S. But clearly manufacturing is leaving china and we are going to see disengagement. I dont think it will be 100 but its going to be such that china will not be an important factor in american trade. Stuart it is a confrontation and a half. It blew up about an hour ago. Gordon, hold on a second. I might have more for you in just a second. I want to go through whats been happening here. Deirdre i was going to say, looking at the nasdaq, i want to make this point of tech before the g20. Keep in mind the europeans are buying gear from china. They are willing to be spied on in exchange for cheap gear from huawei and zte, even though some of the competitors, the infrastructure tech competitors like nokia are based in europe. I just think this ups the ante for the g7 conversation as well. Because basically, the uk and germany have said you know what, we know that china is spying on us. We dont care. We are monitoring it. We know what they are taking. We have already factored that in. Whereas President Trump as we know has taken a much harder line on these Tech Infrastructure equipment makers saying we dont want it here. This just changes the conversation this weekend as well in france. Stuart sure does. Thats like a miniature explosive device. My colleague david asman is with us. Before i ask you a question, im going to make a statement. Look david i will respond to it. Stuart okay. Jay powell this morning in his speech referred to the china trade situation. He saw that as a head wind. He wants to do something about it. He wants to sustain americas expansion. Now, i dont care whether you think that lowering Interest Rates is good or bad news. Im simply saying now youve got this latest China Trade Development which is harsh indeed, extraordinary confrontation. Doesnt that put added pressure on jay powell to get on with it and lower rates . David absolutely. Absolutely is the answer to that. Theres just no question about it. Its interesting that powell did mention china in his notes and perhaps that had something to do with what the president was saying about china. He realized that since powell has said hes got to do something with china, hes raising the stakes. This is by a factor of, gordon chang would give it a better number, but i would say a factor of five, this ups the racheting. To demand that u. S. Companies come home is extraordinary. The one place where i began to hear that this was going to be happening was from the state department. We have a head of the state department right now who has been talking very tough about what china is doing, not just economically but what its doing militarily around the world, so there is a joint effort not only economic but also with regard to the state department to really force china to pull back its imperial strings from the stuff they have been stealing, from u. S. Companies, european companies, the whole world, to their imperialist tactics in the south china sea. Earlier this week we heard the secretary of the department of state talking about how china was literally invading certain countries. It is now buzzing Fishing Vessels in vietnam, well within the vietnam limits, well within their territorial limits. So you have the state department putting pressure on diplomatically, suggesting that militarily chinas going way beyond the bounds, and now you have the president saying that economically, we are in a state of war economically, when hes demanding that u. S. Companies come back from china. To make a demand like that, Christian Whiton you had on earlier suggested there may be some statutes that give him the power to demand that u. S. Companies come home but this rachets up dramatically our trade disputes. Stuart thats a racheting up bigtime. It surely is. Lefthand side of the screen, you are looking at our own fed chair, jay powell, and with him, mark carney, governor of the bank of england. I have no idea what they are talking about. I think thats a live picture, is it . I think thats live. Coming to us from jackson hole. They have walked out of the auditorium where jay powell made that speech. It seems like old news now. He made the speech at 10 00 this morning. The market reacted to it. We thought that was the beall and endall story of the day. No, its not. Within literally an hour later, that would be about 35, 40 minutes ago, President Trump came out with these extraordinary tweets, taking on ashley both barrels. Stuart well said. No retreat at all. The confrontation has been escalated and the market has sold off. When jay powell after he finished his speech, we were positive. The dow was up a couple points. Within seconds of the president making those tweets, we were down 100, now down 200, now down 380. At one point we were down 400. To some degree, theres Algorithmic Trading here. The Computers Read every statement from key officials. Where President Trump tweets, the Computers Read it and if there are certain words involved, certain words mean buy, certain words mean sell, and when the president came out with that tweet this morning it was overwhelmingly sell it. It happened within a matter of seconds. We are still down, still going down some more. We will be down 400 any second. Down 399. Ashley flight to safety. Gold now up 28 at 1536. Stuart whats the yield on the tenyear . Ashley still not inverted, coming in at 1. 57. The twoyear at 1. 55. David what you cant see from the number alone is the dramatic spike after the trump tweets on china. Thats what spiked the gold market. Nothing else. Stuart absolutely. Again, we have to repeat this, money is flowing to safety. Gold, yes, up 27 an ounce. Ashley 27, 28. Stuart far more important, in my opinion, money going into United States treasury securities which are regarded as safe. You will get your money back. Thats why the yield has gone down from 1. 60 to 1. 57 . Doesnt sound like much. I know it doesnt. It sounds like peanuts. But in fact, thats the movement of hundreds of billions of dollars because the u. S. Treasury market is the biggest, most liquid in the world. Thats whats happening. Ashley one of the few places you can actually get a yield. In germany, every bond germany issues is in negative territory. Deirdre you are paying for the privilege of lending money which is unusual. I think we have talked about this question of relevance as well in the sense that we are not talking about jay powell at this moment. We are talking about President Trumps tweets and the markets reaction to those tweets. David overshadowed everything. Brian wesbury, i have known him for 25 years, been a free trader his whole life. For him to say we have to learn to live without china, completely isolate china from our trading system, thats dramatic stuff. Again, hes one man, one economist but if other economists, hes a free trader but if he says this, other economists probably will follow suit. Stuart this is rock and roll. Ashley lets not forget the president said theres going to be more to come this afternoon. David great point. Ashley hes going to announce another countermeasure to what the chinese put out earlier about tariffs. That also depending on the timing will have a negative impact on the market. Deirdre you can understand why stocks are selling off even if every single Business Leader in this country agreed with what the president is doing which we dont know, but im just saying even if thats the case, they are really going to have to make some very serious adjustments. 18 months minimum to move a factory to lets even say from china to vietnam, for example. Thats minimum. One of your guests just said three years in apples case. And the burden. David why does this always drop on friday . Imagine the sweating that traders will go through over the weekend wondering if deirdre thats their job. David if they sold or bought when they shouldnt have. Its going to be a hell of a weekend. Stuart we are a news show and i absolutely adore having news break as we speak. Our producers are really good at this. They lined up a whole series of experts who know what theyre talking about. At the top of the show, 9 00 this morning, we insisted that our job was to give you clarity, that we would tell you precisely what was going on. We are not giving you jargon. We dont get mixed up with fedspeak. No. We will tell going on. Heres whats going on. Fed chair powell this morning intimated, suggested, hinted at rate cuts in the future. A half hour later, President Trump tweets on china trade and its dramatic stuff. Upping the whole confrontation with china after they had said they were going to impose tariffs september the 1st on us. Thats what you have. Two major stories. Are rate cuts coming from the fed and theres a definite confrontation with china on trade. Is curtis ellis on the phone . Yes, he is. Are you there . I certainly am. Stuart okay. Do you agree with my analysis that this is a dramatic escalation in the confrontation on trade with china . Lows of the day on the market, down 421. Go ahead, curtis. This is clarity. We are now seeing exactly whats at stake here. Up until now, we have been involved in discussions of the price of everything and the value of nothing. This is not about 5 tariffs, 10 tariffs. This is about the future of our country and the future of the Free Enterprise system. You cannot have a Free Enterprise system if one of your Major Trading partners is using statesubsidized, Stateowned Enterprises to bankrupt the Free Enterprise company competitors. Thats whats happening here. Stuart speculate for me, curtis, because im in the dark on this, in one of the tweets, President Trump said we will find out more this afternoon about what hes going to do with china. What do you think he might announce . I realize this is pure speculation but we are all intrigued here because somethings coming and we would like to know what it is. The president does have a taste for the dramatic. I remember Melania Trump during the convention saying when Donald Trumps involved, there will be drama. So look, we now see the president ordering companies to find a new supplier, find a new place to locate their supply chains. No responsible businessman relies on one supplier. Too many of these companies have made china their sole source supplier for everything. That is bad business. It is not the job of the United States government to backstop bad business decisions. They made a bad investment. It was called investing in the Chinese Communist party. They may have to pay a small price for that, but in the long run, we will be so much better off when we are not dependent on the Chinese Communist party for our wellbeing because guess what . They dont care about our wellbeing, whether you are a wall street trader or american worker. Stuart curtis, we are facetoface. The confrontation is ongoing. I dont think President Trump will back off. This is not a president who backs away from anything. No, he will not back off. Absolutely not. Stuart will xi jinping . Who backs off first . China has so much more to lose in this. They depend on our market for the influx of dollars they use to prop up their house of cards economy. We have chinese banks on the verge of collapsing because theyve got bad loans just far up the chain. Weve got a situation where china has so much more to lose than we do. These tariffs we saw today that the chinese imposed are on the last 75 billion worth of goods that they import from us. Stuart wait a second. If xi jinping backs off, he loses face. Thats something you cannot do if you are running the communist party of china. You cant do that. You lose face at home, you are probably out of a job. If he doesnt back off, he loses support within the politburo because all of those communist Party Officials are basically they are gangsters. They are invested in all these companies that are now losing money because they are not selling into the u. S. What if the president were to, im just speculating here, not saying hes going to do this, but something thats been talked about widely is what if we were to revoke visas for all of the Chinese Students going to harvard and yale . All of the children of the politburo officials are sending their kids to america. If they no longer can go, they will eject xi jinping in a heartbeat. Stuart i do want to reinforce the view that that, curtis, is pure speculation. Pure speculation. What is not speculation is we have a lot more cards to play in this hand than they do. Stuart okay. Understood. Okay. Ashley wow. Stuart you have to take a breath here, david. Ashley its a morning of strong statements. Forgotten in all of this is the statement from the president in another tweet who is our bigger enemy, powell or chinese president xi. Stuart thats right. The earlier tweet, before we did the china trade tweet, the president went after jay powell bigtime after his statement, and the president said i think ashley he said the Federal Reserve did nothing. Stuart and who is the greater enemy, jay powell or xi jinping. David you nailed it, powell alluded to china in his notes. He cannot ignore the way the market is responding and presumably the way the economy, because the market precedes the Economic Development so the market is predicting that what is happening now with china is going to cause dramatic economic consequences to the downside. So jay powell is going to have to respond to this. Because he said he would if china affects the economy. Stuart thats right. We are waiting imminently for some kind of response. Not sure we will get it today. That would be a rather fast response. We will certainly get something more from the president. Phil yin is with us. Joining us on the phone, hes a former cctv America Business anchor. Phil, i have one question here. This is a direct confrontation now between xi jinping and President Trump. I dont think President Trump blinks or backs off. Will xi jinping blink or back off in any way . Good to be with you. I had a conversation the other day with a couple real strong industry folks and the conversation went Something Like this. Which country can take on more pain and suffering. Now, we love america, of course we do. Thats why were talking about this. But im going to reiterate, i would not underestimate the chinese ability to take on significant amounts of pain for a significant period of time and i have to say if you put up a group of americans and a group of chinese, whos going to take on more suffering, i think we know the answer to that and i dont want to find out the answer to that either. Stuart in other words, neither side blinks, in other words, this goes on and escalates for a long time to come. No deal in the offing at all. You agree with that, phil . Oh, we have been talking about this forever. Theres no incentive for the chinese to really make a true deal because they cant. They cant actually give the white house what they want. As for the white house, i tell you, talking to people who are familiar with the situation, they are kind of enjoying it. Yes, the traders dont really like it that much. Theres a little volatility. But this is kind of, they are having some fun with this. Because democrats and republicans can unite and say look, we can blame china for the problems in the u. S. Economy or for the past couple of decades, there isnt any pushback on them. They dont hear it on your show, we dont hear on it the other channels. There is a weird amount of unity between the democrats and republicans on this particular subject. And trump can put his hat on that. Stuart extraordinary stuff. Phil, thank you very much indeed for joining us. Now let me update a couple of news items here. Later on today, after President Trump has said something more about china trade and he has promised to say more this afternoon, after that, gets on air force one and flies to the south of france for the g7 meeting. In advance of that meeting, we are all thinking theres going to be an enormous confrontation between President Trump and the climate warriors in the g7. Especially french president macron, who really wants to make a point of Climate Change and trumps doing nothing about it. I wonder if that confrontation is now going to be overridden by conflicts on trade and the dollar, the value of the dollar. Bjorn lundberg is with us, president of the copiy enhagen consensus center. We always think of him as a reasonable environmentalist and thats what he is. Hes with us now. Look, to me, this latest news on china trade and the earlier news on the value of the dollar and Interest Rates in america, thats going to completely overshadow all this Climate Change talk, isnt it . Well, it certainly seems that way. Just listening to your show, clearly this is much more important and in some ways, it really shows you what is the problem with when you talk about Climate Change that mostly people care about many many other things that are much closer to home. Climate change is sort of a hundred year thing, its hard to get people to focus on. And certainly, its hard to get them to focus on it in the right way. Stuart your point has always been the solutions to Climate Change which are now being offered wont work and weve got to think of Something Else that will work to make it politically attractive. Thats your point, isnt it . Well, exactly. Look, everybody got together back in paris in 2015 and promised we were going to save the world from Climate Change. And the reality is that its going to shave off about 1 of what we need to do in order to get to our target. That is if everybody does what they promised and they wont. Most countries are not living up to their paris promises. So we have a situation where people are promising lots of money to do almost no good for climate. Clearly we need a better approach. The better approach is to focus on innovation. This has been the american solution always. If you get better technology, that is if you get cheaper green energy, everyone will switch. If you dont get that, you cant really get everybody to support ineffective Green Energy Sources in the long run. Stuart you are exactly right. What a shame that that point, your very good point, may be completely overridden at the g7 meeting by all this talk of china trade and the dollar. Im sorry to cut it short. This is a huge news day. We thank you very much for being on the show today. I appreciate it. Thank you very much. Max baucus with us on the phone, the former American Ambassador to china. Mr. Ambassador, welcome back. We like your words of wisdom. We have been saying all morning that this is an escalation of the trade fight, an escalation to the point where neither side can back off, an escalation to the point where were not going to get any kind of deal, at least in the foreseeable future. Would you agree with that, sir . I do. I think its clearly retaliation to trumps tariffs that he imposed even though the two sides agreed earlier not to impose new tariffs. Unfortunately, we did impose a new tariff and xi said okay, i will impose some as well. Im very worried. The chinese in my judgment are very tough, very strong, they understand strength better than do any other people. They smell weakness better than do any other people. They are going to hang tough on this and frankly, they are going to wait until they think President Trump is going to cry uncle. Stuart this may be a technical question but President Trump has ordered American Companies to get out of china and produce elsewhere. Can an american president order a private company to do that . No, he cannot. But that sends the shivers down the spine of any ceo that might be ordered to move. That ceo is going to be thinking about gee, maybe somethings coming down the road where discretion is the better part of valor and maybe i should leave after all. No, a president cant order that. Stuart mr. Ambassador, thank you very much for joining us, sir. You bet. Stuart you jumped right in at the perfect time. We really appreciate it. Max baucus. Thank you very much indeed, sir. Okay. We are down 419 points on the dow industrials. That is not the low of the day. We had been down i think around 430, 440. Thats a way down move, 1. 5 down for the dow, nearly 1. 68 down on the s p. Look at that. The nasdaq ashley what a day. It began as fed day. Stuart yes, it did. Ashley quickly turned to china day. Just like that. David by the way, ambassador baucus brought up a terrific point which is that just by saying what he has said, that can move not only markets, as we have seen, but it can also move companies. Remember when the president first became president , right after his inauguration, he began to turn on businesses that had left the United States. He put the pressure on them. He wasnt saying that im going to throw you in jail, but putting dramatic pressure on these businesses brought a lot of those businesses back to the United States. Just by saying what he has said today, might put pressure on businesses to begin to leave china. Those who were thinking about how they were going to change their supply chain to avoid china may be happening more frequently now than it did before. Ashley i think that was the key point, apart from the tone which is very important from the president. But that point, ordering American Companies get out. David it worked a year and a half ago. It could work again. Stuart just by saying it. David just by saying it. Stuart its not so much the imposition of tariffs that will hurt American Business. I dont think it will hurt almost at all, frankly. Ashley right. Stuart but being ordered out, change the supply chain, thats what hurts the business. Thats why in part the dow industrials are down 420 points. To recap, first thing this morning we went on the air, we promised clarity and i hope we have delivered it. We like to tell you exactly whats going on. 10 00 this morning, let me backtrack. 6 00 this morning, the chinese Foreign Ministry says we are going to put 5 or 10 tariffs on some American Products. That was an escalation. Shortly thereafter, jay powell appeared before a symposium in wyoming and he says he implied hes teeing up future rate cuts, included in his statement was the idea that maybe china trade is worsening. Thats a headwind. Thats another reason why you might want to cut rates. Within 45 minutes of jay powells statement, we completely moved track on our News Business and have gone to the president s tweets, which were harsh indeed. A standoff, a confrontation in which the president actually ordered American Companies to get out of china, stop producing there, bring your production back to the United States. By the way, he also told fed ex, ups and the postal service, he said you aint moving fentanyl from anywhere to here. I dont care whether its from china or anyplace else. You knock it off. No more fentanyl comes in. Very strong statement. As of right now, well, we are waiting for the next shoe to drop. The president said he would be detailing more action later on this afternoon. We are trying for clarity. We are trying to cut through the jargon and with the great help of my friend david asman, whats your name again . David asman and deirdre and ashley, i think weve got it straightened out. We may be stressing the confrontation a little bit much. I may be going david not when the market is down 440 points. Stuart thank you, david. I may be suggesting too strongly that jay powell was teeing up future rate cuts but thats whats going on. Ashley i think jay powells message this morning failed miserably as far as the president is concerned in its tone. It was too neutral. He wanted jay powell to come out and just be incredibly, you know, lets we are going to have to keep up with the rest of the world. Deirdre the president grabbed the mic. Right . He grabbed the mic from jay powell. Stuart exactly what he did. Well, look whos stuart we have wall street journal associate editorial editor. To regional manager. Stuart i was going to give you a battlefield promotion. Todays the day. Stuart am i right, just go through this. Am i right appearing that jay powell appeared to tee up future rate cuts . Am i right in saying that President Trump grabbed the mic, dominated the news cycle with this confrontation with china over trade . Speak. I think thats a fair point. I think even based on what powell said though there is no case for a rate cut. He said we have low and stable inflation. Youre hearing that from other members of the fed board. Stuart okay. What is the case here . The economy is good. Consumers are spending. Worried about corporate investment. Trade uncertainty is on the horizon. Its a headwind i think you said. Stuart yes. There is always policy uncertainty in washington. This is an excuse you could use anytime anywhere to raise or lift Interest Rates. The fundamentals say there is no big need for a cut. I think the trump, wait a second, so, jay powell did not in your opinion tee up rapid, deep, future rate cuts . Im not saying he is not going to. Im saying i dont understand by what he is acknowledging how he does it. He acknowledged the economy is strong. Job market is good. We have low, stable inflation. Stuart okay. Thats a good thing, right . Stuart that is another reason why the dow is down almost low of the day, 400 and whats that . Ashley fresh session low. It is interesting, on news of the china tariffs on china from the United States it didnt respond much. It has responded i think to the president saying, im going to respond now. I think it getting into what you covered a lot, it hurts them more than it hurts us but that doesnt mean it wont hurt us. That this is the question, if were digging for a long fight, how long does it go, and how costly does it. Stuart i think we all agree were digging in for a long fight. I cant see either side completely turning on a dime, sing kumbayah. The market understands that. Market was down 60, 70 point. It was positive until the president came in with the china tweets. That is when it began to tank. Stuart james you dont know what the president will said on china trade this afternoon. That is what were waiting for. Ashley reports he is meeting with the trade team right now. Theyre formulating we heard the team was Getting Better signals out of china but he this will be fun. Stuart okay. Here is what we got. The jay powell statement, president ial tweets on china trade. He leaves this afternoon for the g7. Were waiting for the other shoe to drop. What will we say this afternoon. Times up for me. Connell mcshane, its yours. Connell what a friday, stuart, what a friday. It is not over yet. We wait for more news to come. Welcome to cavuto coast to coast. Im Connell Mcshane filling in once again for neil. We have a selloff in wall street, as President Trump lashes out at twitter and china, the fed chairman who he appointed fed chairman. Hillary vaughn live at the white house today. Hillary . Reporter connell, President Trump promising to respond to chinas retaliatory tariffs this afternoon. We dont know if that is reaction from the president , or include some action from the president in response to this we do have new reaction from him on twitter though. In a flurry of tweets in the last