The white house are President Trump and the australian Prime Minister in town for an official state visit. That expected any moment now. Thats where we find eamon javers with what we can expect today. Reporter we are in the east room waiting on the two leaders. They have had some formal pomp and circumstance so far this morning. The president has had an opportunity to make news in the oval office announcing that the United States has placed sanctions on the central bank of iran, the u. S. Accusing of funding the two organizations that the United States say engage in terrorism around the world. The president saying this is the highest level of sanctions ever put in place against a foreign country. Well wait for more comments. As we watch the press conference, we are expecting the traditional two questions from the u. S. Press and the australian press. This is a president of the United States who is in Alliance Building mode here in advance of any action that he might feel he needs to take in iran. The Prime Minister of australia specifically mentioned the straits of hormus saying the United States and australia stand side by side. Well wait and see what the president has to say in terms of any plans he has on iran going forward. A lot to watch here in the east room. There is also the issue of the whistleblower controversy. You would expect the president to be likely asked about it depending who he picks to ask the questions. The president is dealing with a Foreign Policy crisis oversees and an unfolding domestic potential scandal here in terms of his relationship with the ukraine. What did he promise or not promise to the ukrainian leadership in terms of information on joe biden and his son hunter, biden. He was dismissive of the story in the oval office saying that the press has had a very bad week and the press shouldnt keep digging into this. Anything with any foreign leader the president insisted was entirely appropriate. You might expect he will get another opportunity to address that one. The Inspector General for the Intelligence Community thought it was serious enough to take incredible in his words to take it to the next step of urgent concern is apparently what the Inspector General had determined at the time. Reporter thats right. Democrats on capitol hill eager to find out what the substance of that report actually is. At this point, we just dont know what someone is in the Intelligence Community thought was so concerning that they needed to go to the Intelligence Community insector general to flag. What we do know is that the topic was ukraine and that it involved the president. A number of news organizations have indicated that there were more than one act by the president that was at the focus of the complaint. This is an unusual scandal in the sense that there is the potential for a scandal here, but nobody knows what the actual heart of the matter is. What we know is that there is this report that the Inspector General would like to transmit to congress and congress would like to receive. What we dont know is whether he will be allowed to transmit it or not because of the legal wrangling involving the department of justice and the white house. At some point, we may or may not discover what the actual complaint is thats at the heart of this. There is a lot of diplomatic, political and legal wrangling. We appreciate it. The News Conference expected between the president of the United States, the Prime Minister of australia. We will take you to the white house live when we see those two leaders emerge. Lets get to the market. The s p is up four Straight Days on track for a fourth straight week of gains. The gang is all here. Tom lee joined us. You are pretty optimistic about where you think the stock market can go. I think we have been in a nowhere market for the last 20 months. I think people think thats a sign of risk and top. Historically, thats a precursor to a big upside breakout. We looked at 120 years of market history, where the market has been20 months flat within three percent of the high. The average gain is 51 . Its kind of like s p 4,500 in two years. Cramer earlier today is worried about the transports, looking at the charts wondering about a double top, needing to see a breakout to feel better about the market. Is that fair the evidence is on anybody who is cyclicly bullish to prove the markets. I was meeting with a client this morning pointing out like japanese cyclicles have been really strong. When you look at europe it has been a cyclical trade. There is growing evidence. When cyclicals lead, i cant see it as a defensive trade. Welcome back. What do you think about the tom lee call i would hope so, but im skeptical. Long term leading indicators, the yield curve, real residential investment has been declining. And i do think we can get a short acceleration here from fiscal easing and chinese stimulus thats already in the pipeline. I think it falls short of the 2015, 2016. I think were in a little bit of ratrap. As you get cyclical acceleration then Central Banks take their foot off the gas in terms of easing. You get yields going up. And then you worry about all the debt out there. It makes the discount rate higher. So people get worried. We have been in this cyclical little bit of momentum and then it stalls and then people get worried. And the change in sentiment just has been so radical. I think were still in that environment. The rally. Do you trust it as tom lee has suggested . Or is it a trap . Im more in tom lees camp. The fundamentals need to be determined. Im thinking about what caused us to come off the august lows. First the agreement to meet. Both sides easing off a little bit on tariffs. If were going to break out cyclicly and get out of the trap, in my opinion it has to be because the china u. S. Situation meaningfully resolves. The sentiment that youre talking about both corporate skm consumer continues. What drives it higher cap x is the short answer. Heres the answer, though. Its my opinion that we would have had the cap x a year and a half ago on the basis of the tax cut act which gave 100 depreciation up front. That was a good jolt to get cap x going. Six months five months after that was enacted you have tariffs come out and incorporations say we are not doing anything until we figure out what the supply chains look like. What specific Industries Need more you just had china emerge which created a huge amount of capacity globally. Now china is slowing. Where is that demand coming from i think you have to remember there was a heck of a lot of channel stuff in the traditional cyclical sector. Think about the Fourth Quarter how Semi Conductor chips got pulled forward and hit the first half of this year. Youre starting to see that tentatively come out. Im going to move it on. We have more than two people. Shann shannon, what do you see i see the argument that we can continue to see upside here. I think we start to see this shift to cyclicals dh i think is one of the things we have been looking to to support the Overall Health higher. However, i also see slowing in some of the economic factors that we have experienced. If you look at it from the perspective of the fed being able to do as much as it can possibly do from a monetary perspective, im concerned that we see a slowing of the economy next year, and that we need fiscal stimulus to pull us out of a recession. Therefore, i feel like were in a position that you cannot, you know, discount the fact that we have seen slowing in the manufacturing side of the economy. That could pour over to the consumer y. Do think, however, that we are probably poised for additional upside given the fact that that is what we would see in a typical market cycle. You have your 50 basis points, 25 on july 31. You have another 25 a couple days ago. You have intensification in the rhetoric between the chinese and the u. S. We had an event surrounding saudi arabia. It goes back to the earnings. I look at a company like netflix which is down 26 this quarter. I look at facebook which is d n down. We have apple, alphabet which are about ten percent higher. A lot of quality names like mcdonalds, like microsoft, like american express, they found their peak in july. Its been a very exhausting process since then. I dont know that you get a particular welldefined direction until what until you hear earning are reported in a couple weeks. What role does the fed play in the way youre thinking about the market you have a fairly divided fed. Even in the fed commentary that we got today, youve got bull rd. He wanted 50 basis points. You had rosen grand. The situation develops continuous the way it is now, you are likely to have the internal battle going on inside the Federal Reserve. I think the fed tries to sort of focus on data dependency and economic fundamentals. Its often in conflict with market where the market is especially the curve. A month ago, we thought 75 basis points was needed to really fix the stress of markets. We got 25. I think rates have moved up. It looks like the fed is closer to not only being done. I think they become a lot more market friendly. You cant fight the fed. I think at this point, paying attention to what the Federal Reserve is going to do in terms of giving us another 25 basis points, i dont think thats productive. I think he is spot on. I think its about qe light and the potential to grow the fed balance sheet. When you have securities that have been maturing and the fed is allowing them to mature. Doesnt that guy to the dont fight the fed idea you have a little bit of an indication. I didnt think it was as hawkish a message the other day. Got a little bit of that. Are they giving us what we want . Youre helping to make tom lees point. 25 basis points is not going to get it done. What the Federal Reserve has to do, maturing securities, we are going to reinvest the securities. We are going to take the bank reserves. Were going to allow that to grow a little bit. Got a hint of it the other day. You didnt really get clarity that thats going to happen. Tom said the markets need 75 bits. You didnt say the economy needs 75 bits. The interesting thing is investors are with you. Im with you. You cant fight the fed. If the fed is only propping up the market and not the economy, what are we doing here at some point, its not going to work. I think the descent that we are seeing is a clear result of the fact that the fed doesnt actually know what they are supposed to be focussing on right now. And they are shifting their emphasis. We are looking at things like what are the expectations for the economy . What are the exogenous factors influencing that. The fed has a much more difficult job in that they are much more transparent. They have created the problem for themselves. I feel like the descent is going to pick up because each of the fed participants knows that they have a changing mandate over the course of the next couple of years. We talk about potential risk events, trade is the obvious. Trade policy, the 2020 election is not all that far away. Many headlines made yesterday at delivering alpha, including one from Lee Cooperman. I want you to listen to what he said about the election risk. Right now the market is assuming donald trump is reelected. If it looks like Elizabeth Warren is a credible opponent to trump, the market will not be higher. It will be lower. I think it would be a bare market. They go down 25 . Are you dismissive of the political risks that are out there . Lees comments were eye opening. I think markets know the current president. Theyre comfortable with his approach. Businesses have confidence from that. I think a change in leadership would be uncertainty. I think its down side. I will reverse the logic a bit. I think that the equity markets at the moment are telling us that trump is going to win reelection. I think if westart to see markets really weaken i think its really giving us the calculus saying that its a democrat. I think lee is absolutely right. Its not just the left wing. Its not just the progressive party. You are seeing donald trump throw things out there that are antimarkets. Think about how subdued the sectors have been over the past few months. Thats because trump is threatening to put price controls out there. He is shifting towards a more controlled environment. That bodes ill for the markets overall. So far it is just localized. Watch out if he tilts more to be competitive. You dont feel confident in buying stocks these days certain stocks, not all stocks. There is still opportunity out there. What kind of stocks are you looking at were looking at automation companies. We look at every decade there is a shift in leadership. In 1980s six of the Top Ten Companies were energy. In 2000, obviously tech telecom. In 2010 we were back into the super cycle. Now everybody is wrapped up in f. A. A. N. G. There will be leaders in the next decade. How about the idea . The stocks have been squirrely since you hit the high in july. You look at the performance since then and its a real mixed bag. You know i have stayed away from them. In others, it has not. I think the near term direction of what you want to do in terms of identifying new equities to go into unfortunately has a lot to do with where rates are going to go. I think we have witnessed that over the next three weeks when you went to 1. 45 to 1. 90. I dont want to sit here and have a phd in where Interest Rates are going to go. You are going to lift above two percent for a ten year. You have zuckerburg on the hill yesterday. We have the focus tlmpt is tim cook. What is wrong with netflix . Its competition. I completely agree with your point. You have to know where long term yields are going. We are going to get the little acceleration. Long term drivers of growth, demographics or pent up demand, debt, all of those things point to a Slower Growth world. Again, the main driver of growth for the past 15 years was china. Whats going to replace that as the big growth driver for global gdp growth they added 10 trillion to the Global Economy. And now debt levels are high everywhere. So that leads you to a low slow growth world and low Interest Rates and where both Companies Still work might be different growth companies. Netflix down 16. 5 since the high at the end of july. Just cant get out of its own way. Facebook is down 4. 5 since then. Apple is up 7. Amazon is down eight. You are going to need that participation once again from the f. A. A. N. G. Names. I identified earlier this week. Do you need it . These stocks have squirrelled. You have that cyclical peak in january of 2018. Then you had the f. A. A. N. G. Peak in september of 2018. Now in july of 2019, you have a growth peak. One of those peaks is going to have to be exceeded for us in the s p 500 to accelerate once again higher. Or you can but i think you have exhausted that possibility. Market breadth has improved a lot, though. I think the internles are telling us there is a much broader participation. Its interesting. I dont know where the next sort of leadership comes from, but my guess is it will be a cyclical trade. It will be inclined that rates have to go up. We mentioned the fact that maybe feeling better about the trade situation with china has driven stocks to the door step of new highs. Is that false hope what headlines have proven to move the ball forward . We have been talking about this for over a year. I have to go with rational outcomes. Its in both sides interest to get to a deal sometimes around year end. If it happens, we saw where value start today outperform basic cyclicals, the industrials, cats of the world, energy stocks, materials. If you get a china trade deal, youre going to see Infrastructure Spending around the world. Youll get Infrastructure Spending here in the u. S. Thats going to propel the cyclicals. How are we going to do that here in the United States given where we are from a fiscal perspective . You have zero cost of money. Are you kidding me money is free right now for the federal government. 1. 77 is free. Big bipartisan infrastructure bill thats a problem. Thats a big problem. Thats the biggest problem. Both sides want an infrastructure deal. So the only Thing Holding it up is maybe Chuck Schumer doesnt want to give donald trump something he can throw about. Both sides have been calling for infrastructure. There is the president of the United States, the Prime Minister of australia, that News Conference in the white house beginning now. Lets listen. We had a spectacular morning, and its an honor being with the Prime Minister and mrs. Morrison. Thank you very much. Australia is a fantastic country and a brilliant ally. We just spent a lot of time together with our representatives, and they get along very well. And were doing a lot of deals. We talk to military. We talked trade and about everything you can talk about. We came to the same conclusion, i think, in every case. I just want to say its an honor having both of you here. Thank you very much. You have a truly great country. I dont think we have ever had a better relationship than we have right now. Tonight we will have something very special in the rose garden. And based on all of that money we spent on all of that weather predicting equipment, theyre saying no chance of rain. Lets see if thats right. If it is, well run right back into this room. We will have a great first evening. Thank you very much. Its not going to rain. Its going to be a beautiful evening. Great job. Thank you. Please. We thank you for the warm and generous welcome that we have had here in washington in this great home of the american presidency and indeed your home. One of the many things that the president and i share in common is a passion for jobs. And the Job Performance here in the United States, the jobs created in australia, the jobs that change peoples lives you know when people get a job, they have choices. Australia and the United States, we are committed to creating jobs whether its in trade or looking in the future and where the jobs will come from, we want our people to have those economic opportunities. I commend the president on the great work he has done on creating jobs here in the United States. Were doing the same thing in australia. This partnership is a big part of that. Thats why we are pleasedto come together here. We share objectives in so many areas. We share common values, beliefs and a kufrl century together. Now we will have another Great Century together. Thank you, mr. President , and thank you for the opportunity for the discussions we have had today. We are very much looking forward to the state dinner this evening. Mrs. Trump, you are doing Something Special there tonight. We dont know if it is the first ever, but the president said perhaps the firstever. That is part of the wonderful visit. Thank you very much. Great honor. Go ahead, please. Mr. President , you have been negotiating with the chinese and seems to be a possibility in terms of a china trade deal that they might offer agricultural purchases. Is that enough for you to get a deal done. No. What do you need to see to get the deal past the finish line. Were looking for a complete deal. China has been starting to buy our agricultural product over the last week and actually some very big purchases. Thats not what im looking for. Weerp rr looking for the big deal. We have taken it to this level. We are taking in billions of dollars of tariffs. China has devalued the currency and putting a lot of money into their economy. They have a very bad economy right now. I dont want them to have a bad economy. Its the worst they say in 57 years. Its only going to get worse. Their supply chain is being broken up badly and companies are leaving because they cant pay the 25 to 30 tariff. We have 30 on 250 billion. We have another tariff that is slightly smaller number as you know on other on about 300 billion worth of goods and products. So they would like to do something. As you know, were talking a little bit this week, talking a lot next week. And then top people will be speaking the week following. Abut im not looki ing for a partial deal. I dont think i need it before the election. I think people know that we are doing a great job. I have rebuilt the military. We have scott and i were talking about that. We spent 1. 5 trillion. Our military was depleted. We didnt have ammunition. But our military was in very bad shape. We have rebuilt the military. We got one of the strongest economies. Mike pence actually got some he was talking yesterday and he called me and said these consumer numbers are incredible. The retail numbers were really just incredible numbers. You know that very well. Thats your world. And some other numbers. Our economy is very strong. China is being affected very badly. Were taking in many billions of dollars. China is eating that. China is eating the tariffs because of the devaluation. That doesnt happen with all countries. China is china. They know what theyre doing as well as anybody. My relationship with president xi is a very amazing one, very good one. We have right now a little spat. I think weere doing very well. Our country is doing well. You look at all of the regulation cutting that allows us to do what we did. Look at what happened three days ago when you have an attack like that and takes out a chunk of oil and the price goes up 4 and now it is heading down. That tells you that would have happened years ago, it would have gone up 50. It would have doubled. This was a blip. So its been really amazing what we have been able to do. I think the voters understand that. I dont think it has any impact on the election. If something happened i think it would be positive for the election. Thats okay. I think assigning usmca on a bipartisan basis with nancy pelosi and Chuck Schumer very bipartisan. I think thats very important for our country. And i would certainly be willing to say thats a bipartisan deal. I think thats very important for our manufacturers, farmers, even for unions they want that deal done. So hopefully thats going to be put up to a vote very soon. There will be very little conjoeling of the democrats because most democrats wanted to. The usmca is ready to be voted on. Mexico has taken the final votes. Canada is willing to do that. Theyre all set to go. We need that for all of the we need that for our country. Its a great deal. Thank you. For the Prime Minister, sir, your economy is to some degree caught in the cross krunts. What did you say to the president about what your idea outcome is obviously, were are keen to see the United States and china be able to come to an agreement. What is always necessary is deals are fair and good deals and sustainable deals. I think one of the things we have seen australia has benefitted greatly from the Economic Growth of china. We have a comprehensive Strategic Partnership with china. They have grown and become substantive economy of the world. Once you get to the level you have to play to the same rules as the other developed nations. I think this is the new generation of deals i think we will see china do. He has been working on it for some time. We wish him well in that process. There are real serious issues that need to be addressed in the deal. Its a big issue. It needs to be addressed. We look forward to them achieving it and providing the broader certainty and stability to the Global Economy which all nations will benefit from. We can do a very big deal with china. It can go very quickly, as you know. It wouldnt be the appropriate deal. We have to do it right. Its a very complicated deal with intellectual property protection. I can leave lots out and have a deal very quickly. We want to do it right. I assume andrew is a nice person. The best. Thank you very much for hosting us. What do you say to Australian Businesses and to australian people who say that your trade war with president xi threatens their prosperity and to the Prime Minister, a linked question. Do you think that australians are going to be Collateral Damage in President Trumps tariff war with china . Well, first of all, i look at numbers. I love numbers. And the numbers of australia are doing incredibly well. Youre doing unbelievely well. When we have a deal with china or not, but when we have a deal with china, because they want to make it perhaps more than i want to make it. I actually love all the billions of dollars thats pouring into our treasury. We have never seen that before from china. It has always been the other way. Im taking care of our farmers out of that. Were helping our farmers. Our farmers were targeted. And they were targeted for 16 billion we paid them the 16 billi billion. I will say that australia is doing very well. If we end up doing a deal, australia will do even better. Australia will be one of the big beneficiaries of a deal. In the meantime, as you know, i did tariff relief with respect to a certain product in particular coming out of australia. Thats something that we wouldnt do for anybody else. This has been a truly great ally. We work very well together. Your numbers are absolutely fantastic. Your economy is strong like ours. I think we are two real examples of two countries doing extremely well. Europe is not doing well. Asia is not doing well. Large parts of asia is not doing well. China is not doing well. Australia is in Economic Growth. We will continue to grow. Australia is used to dealing with a complex and changing world. Six years ago, when our government came to office and 27 of trade was covered by agreements that is now 70 . We will take that to 90 . Thats important. Thats opening up opportunities. There are ebbs and flows in the Global Economy. Australia has built up a resilience in the broad based nature. Australia has never got rich selling things to itself. We have always had an outward looking perspective when it comes to engaging our economic opportunities. A big part pof what we have been discussing here are the big opportunities. We will deal with those as they come. The arrangement with china will be one that will set a new bar in terms of how chinas economy then deals with a lot of these complicated issues in the future with developed economies like australia. So we look on with interest. I think ultimately, when we arrive at that point, its going to put global trade on a stronger footing. Australia has been so focussed on the economy. They do minerals. They have incredible wealth in minerals and coal. They are really at the leading edge of coal technology. Clean coal we call it. Its also great for the workers. And things that would happen because it was very dangerous years ago and very bad for a lot of people. And youve rectified that 100 . I looked at your statistics and coal miners are very, very safe in australia. Its incredible what youve done. In fact, were looking at what youve done. We can do a deal. Well make a deal. Go ahead, please. Thank you. In the midst of these escalating tensions you have named a new National Security adviser. What is he recommending to you in terms of dealing with the latest strikes on saudi arabia and you announced new sanctions on iran. Secretary mnuchin said this affects the last available funds for that regime. Have we now exhausted sanctions in regards to iran these are the strongest sanctions ever put on a country. We are at a level of sanction that is far greater than ever before with respect to iran. Today, we did central bank, as you know. Well see. Well see. Theyre having a lot of problems not only with us. Theyre having problems within their own country. I think they have a lot of selfmade problems. We are by far the Strongest Military in the world. Going into iran would be a very easy decision as i said before. It would be the easiest thing. Most people thought i would go in within two seconds. Plenty of time. In the meantime, they have a lot of problems within iran. Iran could be a great country, could be a rich country. They are choosing to go a different way. There will be a point at which they will be very sorry for the choice. I think we are showing great restraint. Some people say you should go in immediately. Other people are so thrilled at what im doing. I dont do it for anybody. I do it for whats good for the United States, whats good for our allieallies. Its working out really very well. As far as robert is concerned, maybe you can stand up. Robert obrien has done a fantastic job for us with hostage negotiations. I think we can say that there has never been anybody thats done better than you and i as a combination. We brought many people home. And we brought them home quickly. Speed is a very important thing i niend with hostages. Its really something. I had dinner the other night with the family, an incredible family. The family and friends. We had 25 people over on saturday night. And we did that dinner in ottos honor. It was a beautiful thing. It was a beautiful thing. First lady and i, it was very touching and really very beautiful. We talked about otto. I will tell you that people should have moved faster. And robert and i were talking about that. Should have moved faster. He was there for a long time. With hostages, you have to move fast. All of a sudden it gets very hard for the other side to do anything. Sometimes its just too late. In the case of otto it was too late. We got him home, but he was in horrible condition. What happened to him was actually incredible, just horrible. But you have to move fast. Robert and i have been really successful. The reason i know him so well, i actually work hard on hostages, i think most president s wouldnt do that, but i do. I guess in almost all cases, american lives, we help other people, also. We have also helped other countries with their hostage situation. These are great people. And we get them home. We got them home from north korea, as you know. And we got them home from a lot of different locations, egypt. We got them home from many different locations. Preside our great pastor who everyone in this room knows and loves. We have had tremendous success. What surprised me, i didnt know too many people knew robert. When it came time to pick somebody for the position, its a very critical time, i had so many people i shouldnt say this in front of robert. I had so many people that called me and they recommended robert obrien. So i think he is going to do a great job. And he was here, he started about 12 minutes after he was chosen. He sat in with us. Hes very much involved now in what we do. One quick followup in regards to iran. If sanctions dont work and they continue their activity, are there any other measures outside of a military option that can be taken . I dont want to talk about that. I want to say i think the sanctions work, and the military would work, but thats a very severe form orf winning. Nobody can beat us mill tarl. What we have done for our military in the last three years is incredible. All made in the usa, by the way. Its really incredible. Our nuclear was getting very tired. They hadnt spent the money on it. Now we have it in tippy top shape. We have new, and we have renovat renovated. And its incredible. And we all should pray that we never have to use it. We should never have to use it. And our military itself is in phenomenal shape. We have a great gentleman, as you know, going to be taking over, joint chief of staff. He has been fantastic. He is a great man and a friend of mine. But general is going to be taking over. It we will have a bit of a celebration, both for joe and for everybody. As you know, our secretary of defense has just come in. Hes been here for a short period of time. But he has tremendous energy. He knows thats what he has been doing for a long period of time. From the day he graduated or from the day he started at west point where he was a top, top scholar, et cetera. So we have incredible people. Steve mnuchin is here. We did the sanctions today. I think they are probably the strongest that have ever been put on a country. We will certainly never do that to australia, i promise you. One for the Prime Minister, if i may. Mr. Prime minister, you have been very tough on huawei even under pressure. You have been very consistent with the ban even though you said you had a good working relationship with china. Do you plan to continue to support the United States and the tough stance on china . Can you give more specifics on what you told the president you would do to reach a fair trade deal first of all, we had the most perfect of relationships with the United States. It goes back a century and more as the president was we have a comprehensive Strategic Partnership with china. This is the part of the world in which we live. Managing that relationship is important to australias National Interest. One thing i can always assure, we will always act in the National Interest of the countries. And that means engaging countries in our own region, not just economically. We have a lot of operations we do together right across the world mill tarl and will continue to do those. But the focus i think at the end of the day has to be whats best for our people. That means a Stable Secure region and the presence of the United States where they have been for a very long time is a stabilizing force in the region. What does that mean . It means countries can trade with each other. People come out of poverty. United states has had a positive presence in our region. And thats why we always work together, because we share objectives. It isnt a matter of the United States saying to us we need you to do this or australia saying to the United States, we need you to do this. Its about us having shared objectives and looking throu ine world through a similar lens. We love jobs, the president and i. We like jobs here and we like jobs everywhere. When people have jobs, they tend to focus a bit more on the things going on in their lives every day. One thing thats important i think is during our meeting, we discussed what percentage of your military do you buy from us the answer was, we work it together or its about 100 . And we make the best equipment. He understands that. Its a real relationship. They buy 100 percent of their military. Its a massive purchase and has gotten bigger since world war ii. Two percent of gdp next year from the lowest level of defense spending. So its a 200 billion investment. That has been built in australia and built in partnership with the United States. Its an important part of what were doing. I think david crow from australia is next. On the questions on iran you have praised the australian commitment today to deal with iran and the persian gulf. In your talks today with mr. Morrison, did you discuss further military action in order to keep pressure on iran what might those military actions be and what could australia contribute to that mr. Morrison, on that same hold on one second. Youll get a shot at your Prime Minister. We didnt discuss too much iran. We discussed more trade, more china. We discussed afghanistan where australias helping us. We are slowly reducing in afghanistan as people now. We have been very effective in afghanistan. If we wanted to do a certain method of war, we would win that very quickly. Many, many, tens of millions of people would be killed. And we think its unnecessary. Australia has been a great help to us in afghanistan. Were reducing in afghanistan. Weerp rr reducing in syria where we had, you know, we have taken over 100 of the caliphate. We have 100 . When i came in it was smaller, but it was a mess. Now its in a position. I dont want to repeat what i said before with the prisoners. We have thousands of isis fighters from our work in capturing 100 of the caliphate. And were asking the countries from where they came whether germany or france to take those people back, put them on trial, do what they have to do with them. The United States will not keep thousands and thousands of people for the next possibly 50 years or whatever it may be. Its going to be up to those countries. We did them a big favor. We went in. We took them down. The isis fighters in the end werent very good fighters against the United States. But we have thousands of them. And we want them to be taken over by germany, france and all of those countries from where they came. Thank you. Mr. Morrison, on the same issue of iran, are you open to further military action against iran or is the australian commitment solely contained to a freedom of navigation as the president said, there are no further activities planned or requested for assistance from australia. The question to that extent is moot. I want to commend the president who is demonstrating as he said in the earlier press conference in the oval office, restraint. There are other measures that he and the secretary have announced today. And they are pursuing those channels. So the calibrated, i think, very measured response that the United States is taking has been a matter for them. And obviously at any time when issues arise with us as an ally, we consider them on their merits. So i think thats where thats heading. Thank you very much. Jennifer, thank you very much. First lady, thank you. I hope you will be able to see tonight to the media. It will be a great evening. Thank you very much. Thank you. The president of the United States there with the Prime Minister of australia asked right off the bat by our own White House Correspondent eamon javers for an update. The president saying ag rr purchases will not be enough. He says he is looking for a complete deal. The big deal, doesnt need one before the election, and china reiterating the stance that he has had that china is eating the tariffs. On iran, the sanctions are working as he announces new sanctions. Eamon javers in the room. Nice to see you get that right to the heart of the matter for us and our viewers. Reporter thats right. The question i was trying to get at with the president is where is his offramp in terms of negotiations going on . What the president said was agricultural purchases by the Chinese Government is not enough for him to get to a deal. I also asked the australian Prime Minister s ultimately. He is somebody whose economy is buffetted by the chinese and u. S. What did he say to the president . He didnt tell us what he told the president of the china trade negotiations behind closed doors. He reiterated the idea of australian National Interest. He said i will always do what is right for australia. We have to have a relationship with the chinese because they are right in our backyard. We didnt get a glimpse into trade negotiations. What we did purchases by the che not enough to bring this to a close right now. He wants a deal and he wants a big deal i asked him whether he needs to get it before the election in 2020, and he said, no. He seems to be in no rush, at least publicly and rhetorically. You teed us up well, eamon. We appreciate it eamon javers inside the room at the white house there for us ill bring the conversation back to the desk. You said they need a deal, both sides need a deal, president needs a deal before the election the president says, i dont. Well, the elections a long way away i think we ought to look in a shorter time frame, scott. One thing to bear in mind is october 1st is the 70th anniversary of the communist party in china the chances of anything meaningful happening in the next two weeks are very, very slim. China just wants to take care of that anniversary in october theyre going to start meeting for real october is where you need to see some traction. But i think in order for both economies to stay healthy, youve got to see real resolution by the end of this year. Yeah, the major issue seems to continue to be the tariffs. We do have time. Lets listen to Lee Cooperman again and what he told us yesterday. He looks at the market, he sees, you know, what the Biggest Issue is facing the stock market and more generally the economy the weakness in the economy, in my opinion, is directly attributable to the president s dialogue on tariffs. What were doing with china i understand makes sense, but threatening mexico, threatening canada, threatening europe makes no sense this has created great uncertainty in the business community. They dont know where to put their supply lines or build plants, so theyre cutting back on capex that is the weakness in the economy. Thecentral issue you guys discussed at the top of the show, an issue that doesnt appear to be going away any time soon. Okay, so, the dialogue is the problem that Lee Cooperman has, and its the problem, the messaging that ive communicated to you that i have through the month of august. If the president is at a point where has exhausted utilizing increasing the tariffs as a negotiating tool didnt sound like it from the president s own words today. If the president is, then the market will be able to wait for a deal, whatever that deal might look like. If the president is going to continue to use increasing tariffs as a negotiating weapon, then the market is going to find volatility in that usage i disagree. I think if the october 15th tariffs go in effect, i think people are now expecting a truce. Weve beentold that were goin get this mini truce and were going to put all the tariffs on hold if the october 15th tariffs go into place and the december 15th tariffs go into place, this markets going down. Thats sensible. You dont disagree with that, do you i think it would be viewed as an escalation. So, i think it would introduce some volatility, but i didnt get the sense from his press conference that a mini deal is off the table, either. He said he wanted the big one, so he said he doesnt want a mini deal. It could not be off the table, i agree, but thats what he said. Exactly how many things have to go right for your market prediction to come true . Fed needs to stay, have the markets back, right thats a big question mark. Correct. You cant have an escalation in the trade war thats a big question mark, as more tariffs are looming the u. S. Economy has to stay on track. The consumer has to remain strong throughout all of this. Thats a question mark building a wall here for you, tom. Sure. Youre a hiker. Youre going to have to struggle maybe to get over it. I guess i like steep mountains to climb, right . I would say of the third thing, i probably have more confidence about being midcycle than consensus, and i know theres been talk about capex. You have to remember, Corporate Capital spendings only a third of private business spending u. S. Consumers purchases of homes and durables really is what drives the investment cycle in the u. S. , and theyve been cautious weve got a huge demographic tailwind i dont think its a headwind because millennials are that cohort is actually causie ining number of adults in america to actually surge at the highest rate since the early 70s. So, we have something that would normally look like a reflationary cycle taking place in the u. S. And i think the center of gravity of growth is shifting back to the u. S. Youre not worried about the consumer at all . No. Why i think the consumer feels pretty good about their conditions today i mean, weve seen it in Consumer Confidence in the stock market as much as our current president s quite controversial, i think America First is actually beneficial to the u. S. Consumer because i think they feel protected and so, i think this is sort of were still fighting that bubble of pessimism and belief that the u. S. Economys fragile because of what happened in 08, but i think the bubble is the bubble fear. Investors are negative, so i think that is what you have going for you, and i agree that the consumers okay, but the consumers a much bigger part of the economy than it isnt the market and i think those are the two Different Things if youre an economist, yes, definitely focus on the consumer, but if youre an investor, you have to focus on the market, and the market is consumer earnings are actually relatively small. Lets do this lets sort of wrap that part of the conversation and move to a stock thats on the move today it plays right into one of our panelists, and thats roku, okay we made it our call of the day we dont have, you know, as much time as we otherwise might because of the breaking news it was moved to a sell today, okay a 60 price target by Pivotal Research what do you tell people to do with this . As a counter point, i think oppenheimer upgraded it today, so theres a lot of question marks about what is the right value for this company i got out of it on wednesday, all right . This was my third roundtrip in it right now the stock is going down youve got to stay out because it is a momentum play and the momentum is clearly to the down side but this is a Great Company you sold on wednesday i dont want to gloss over that. Yeah. Whyd you sell it on wednesday . Because the momentum had clearly shifted to the down side, and this is a momentum stock like none i have ever seen when it gets going on the up side, ill probably be back in it again when will that happen is the question i dont think theres anything fundamental thats going to drive it higher until you get to earnings, which are six weeks away now, it did ask our producers to put up the chart from the last earnings call, where it shows just how fast there it is look at how fast these guys are growing and everybody else is dead in the water. I mean, that is a Fabulous Business right now always there is the threat of competition, but amazons in there. Theyre flat that was the worry a year ago. Earlier this week, comcast was a worry. Theyre not doing anything roku is far and away leading the pack the problem is that 13 times this years sales, thats a hard price to buy, so wait for it to bottom im out. Youre playing a really tough game, my man i mean but ive made money three times, though. I know that, you have, but it doesnt get any easier from here so stay out of it. This game of trying to get in, trying to get out, trying to get in, trying to get out. Im curious why you continue to wrestle with Something Like that im not wrestling im out. Yeah, youre out, but youre urging our viewers in some respects to, well, hey, look for the next bigotry point and then you get out and know when to get out. This is a highly volatile stock. I have tweeted every time i get in and every time i get out, every time, so that my if people watching want to follow me on twitter, thats where im telling you. And i come on here and you know this, im integrity im not suggesting youre not, im just saying its a difficult game youre playing. It is im out. Im out. Can ispeak any more clearly about what you should do with the stock . Im not fighting with you, scott. Im just trying to be crystal clear, im out of the stock. But youre still looking for that chance. You said it yourself, id get back in. I watch a lot of stocks we all should watch stocks yeah, but you have a love affair with this one. Because its been great its been great. We talked about i wasnt questioning your integrity in any way no, thats not what if it came across that way, i apologize. No, thats not what were doing. I just want to make sure im clear about my position on it. We talked about this on wednesday. It approached the 50day moving average at about 128. Its just getting to the 100day moving average, to your point right now. Its a highly volatile stock 100day moving average, sits at 109 needham defended the fundamental bullish story, talked about hardware sales are only 5 of the revenue model for roku so youve got some analysts that are coming in and defending this story. To me, if you see facebook portal tv begin to gain traction, then this competition story i think really is something that you need to Pay Attention to i go back to akamai. Streaming, less volatility, akamai. Im glad youre transparent. Scott, i wasnt coming at you, brother. Its all good. Okay. Lets do some final trades. I know you dont have a final trade. Leave us with a quick final thought. You know, i just think you should just trust markets longterm. Okay, thats fair amy raskin, nice to see you again. What do you have impinge the tickers pi. Its a 750 million market cap company. Ultimatery High Frequency rfid, really interesting technology. Stocks done really well this year so far, but theres a lot more to go i like it a lot. Jen. Cme group well have bitcoin on the cme and i feel exchanges are a great way to play the Financial Sector theyre cutting edge and theyre thinking about whats going to be a hit the next 12 to 18 months. You want to comment, mr. Bitcoin . I think cmes going to be an important sort of pathway back towards institutions getting bitcoin, so it could be quite a big deal. 100,000, is that what you said for bitcoin i dont actually have any more price levels for bitcoin, but but you had 100,000, didnt you . 25 last year. 25,000 . Yeah. I think bitcoin can make a new high, yes. All right good seeing you again, tom lee. Were coming to the end of the quarter. Keep in mind that the u. S. Dollar is 2. 5 higher in this quarter. Okay. I think that will be important for the next quarter. Weve got to go. Marathon petroleum mpc. Thanks, everyone. Have a great weekend the exchange begins now. Hi, everybody. Thanks, scott. Im dominic chu in for kelly evans today. Heres whats ahead. One fed president says theres a big risk out there that investors may be avoiding that could contribute to the next big downturn well tell you what it is and if hes right big tech is a big target for washington these days, and lawmakers, while they are up in arms, do consumers really feel the same, or is that big tech backlash just contained to the circles in washington, d. C. . And it was a rough week for retail well take a look at those who were poised for a comeback and who may be on their way out as well but we begin, as always, with