Transcripts For CNBC Closing Bell 20240713

Something i know its something we didnt see as an ideal tool in our institutional context. And i think, you know, different Central Banks around the world did Different Things and we can observe how those things work, but i dont think we regard that as a firstorder tool or something we would be likely to use. There are other things that we need to look at. And i would say yield curve control, sort of shortterm yield curve control is something thats worth looking at. Not at all something that we havent looked at it, but it will be something that we look at when the time comes and the last thing ill say is, you know, i think our tool kit, well use it aggressively to the extent we need to. Yeah. To achieve our mandate. So one of the questions i got from someone today, who knew i was going to be asking you questions, was, is there an unintended consequence of in a reasonable growth, low employment near the target rate inflation rate, is there an unintended consequence of easing into that environment . Does it actually signal a riskoff environment to participants or consumers, et cetera, and does it actually almost become a selffulfilling prophesy i dont think we see that in the data in theory, its possible i dont think we see it in the data i do look at this as akin to the two instances in the 1990s, when the fed cut and then cut again and then cut a third time. In those cases, that happened to be they thought that was the right thing to do. So provided some support for the economy and the economy took that accommodation onboard and gathered steam again and the expansion continued. So thats the spirit in which were doing this i dont see any evidence that Monetary Policy is reducing Consumer Confidence or Business Confidence, which seems to be focused more on other issues one of the dynamics over the years, especially following the gfc was policy coordination amongst to global Central Banks, the boj, theex cb, the bank of england, the fed, even to some extent the pboc. And what are your thoughts on policy coordination Going Forward. What systems are in place . In a crisis situation, there needs to be, obviously, a lot of deep knowledge about whats going in economies around the world and coordination where its important on i think of the dollar swap lines were clearly a key in keeping dollar funding markets working. In peacetime, in times like today, where were not in crisis, we do keep in very close touch with Central Banks around the world and i think thats a very healthy thing coordination the first step is transparency and we all try to be very transparent so our moves are well understood. Coordination, i think, really arises in the state of crisis. And so we dont actively coordinate now, but we try to explain ourselves to the public and hence to each other. All right one of the so the negative of having an Electronic Device that people can upvote questions is that theres a question thats getting upvoted about how Monetary Policy and Climate Change inform one another. Maybe ill read the question directly but any question any thoughts on that . Sure. So Climate Change is a very important issue in my way of thinking for countries and governments to deal with around the world, to as i say, its an absolute firstorder issue, as far as im concerned. Less obvious, its a first order business for Central Banks the main responsibility for dealing with Climate Change now resides with legislatures and particular agencies that are focused on the economy however, i think wlaerng the arg that Financial Markets and Financial Institutions that are important transition into the economy of policies of sorts, and Central Banks around the world are starting to think more about how and whether Central Banks should play a direct role in Climate Change. I would say, were not there yet. Were not in a place where we would conduct Monetary Policy in order to deal with Climate Changetype issues but theres a lot of forward thinking and analysis going on we already have Bank Institutions in areas that are subject to severe weather. Weapon already require them to have plans to deal with severe weather, redundancies, and, you know, resilience to what can happen in a, for example, a hurricane. So in that sense, its already indodgeous to our supervision work but its an important work a lot of questions about the repo market, as youre probably not surprised to hear. And essentially, the question that is percolating through this room and the Financial Markets is what is the repo market telling us why are the banks in what were seeing in terms of the spikes in the repo markets, the need to do some intervention from the Federal Reserve . And is the fed almost coming back into qe, or would you describe this intervention as Something Different . Lets start there this is not qe in no sense is this qe this is nothing like it at all so ill come back to that point, but i really wanted to make sure no, thats why i asked it so if you go back, the quantity of reserves in the Banking System peak at about 2. 8 trillion at the end of 2014 when we finished doing quantitative easing. And then due to increases in other reserves and also just to increases in nonreserve liabilities, really, declined, declined, and declined, while we held a Balance Sheet, reserves were shrinking down to 2. 4 trillion, where under chair yellen, we began normalizing, actually shrinking t ing thing sheet, letting assets run off very, very gradually that went on, and in march of this year, we tapered that and in, i guess, july of this year, we stopped and i think through all of that, we are moving quite gradually and we were carefully talking to the banks and doing surveys and trying to assess what would be their lowest comfortable levels of reserves, add all of that and put a big buffer on top of it. And i think doing that work, checking it twice. And also watching the markets led us to think that we were probably still away from the minimum levels of reserves let me define what that is weve committed to is a system of ample reserves. And that means well be able to conduct Monetary Policy, keep the federal funds rate in its range without resorting to open Market Operations all the time so i think it looked it very much looked like we were still a bit above that until september when we found that we probably werent. And so we found that out and so there are a number of explanations it can be that reserves are just kind of less flexible. The quantity of reserves are less fluid, less flexible in the markets than we anticipated. In any case, there are a number of possible splapexplanations aa plan to get us to our goal will need to take all of those onboard over time. So were working on just such a plan and as i mentioned, well announce it soon, when its ready. Its not ready yet, but were very much making great progress on that. And the idea will be to add enough reserves back in so that reserves will of course move up and down during the course of the year and theyll also go up over time as the Balance Sheet expands. But reserves move around quite a bit during the course of a year. They have to be at a level so their lowest level during the course of the year will not be below the level thats needed to allow us to operate in an ample reserve regime and we think that level might be at or a bit above where we were in Early September of this year. We think that. All of this is, though, uncertain. So well be adding reserves back in when we announce our plan to get back to Something Like that level. Of course, well continue to use open Market Operations as long as we need to. The main thing is, this is very important for the Financial Markets and we will do what we have to do to secure the transmission of Monetary Policy. It doesnt actually as long as we do that, it actually doesnt have much implications for the economy, for Financial Conditions, or for the people we serve. Wonderful, great. And i think that theyre taking cards. Is that right . Okay if folks have cards. But not qe. Did i mention that you did mention that. So i will ask you the same question i asked you a year ago which is, your thoughts on the yield curve. We were starting to see the yield flatten a year ago stod it is an inverted curve and what are your thoughts at this point on what the yield curve is telling us . You know, so the yield curve is one of a number of a large number of Financial Conditions that we actively monitor its not there is no single Financial Condition that really dominates all the others, but thats one that we certainly do monitor. And i guess we know why we kind of know why what short rates are doing. Short rates are really reflecting what they think the fed is going to do really, the question is, what are longer rates saying. And theyre saying a lot of Different Things theres a term premium there, which is about riskon, risk off, that moves up and down in different states of market sentiment. Theres also some sort of an assessment in there, though, about what the neutral rate is in the longer run. And so we look carefully at that and if we think the market is above the neutral rate, we think the market is tight. So when the curve is inverted, we focus very carefully on that. And its not something that you need to deal with immediately, but it is something that wouldnt be comfortable to be in that state of affairs for an extended period of time, of course but again, its one of many conditions i hope thats what i said last year, by the way i think so, i think so. So the fed has consistently characterized inflation as two too low. Given that core cpi is at the highest level since 2008 and the feds preferred measure, core pce, the sixmonth annualized rate is above 2 , do you anticipate changing your assessment of inflation . I would like to change my assessment of inflation. I would like to see it move symmetrically around 2 . In core pce terms, it still hasnt done that weve seen it take core pce, which is a better indicator of future inflation than regular pce, although regular pce is, of course, our goal so you take core inflation, sst moved up and just kind of touched 2 and then moved back down to well below th2 in th First Quarter of this year and is now moving back up. The real question is, why do we care its essentially it appears to be centered a few tenth bls s below 2 the reason we care, the issue is more the broader context we want Inflation Expectations to be centered right at 2 and really hammer that point and make sure that they are. Because we look around the world and see disinflationary forces in japan and western europe, where you see inflation moving down, expectations moves down, inflation moves down, and its been very, very hard for economies to get off that road once theyre on. We dont want to get on that road we dont think were going to be exempt to these disinflationary pressures over time. We have an aging population, as others do. Some of the same characteristics to our economy so for that reason, we want to keep inflation at 2 . Its not easy to explain it to the general public who dont really care whether inflation is 1. 7 or 2 . But in our case, we think to serve them better, we need to anchor inflation at 2 sob that it doesnt begin that inexorable slide down so when you come into the Office Every Day or as you travel through your daytoday life, i am curious what your dashboard looks like what are you looking at on your dashboard to give you an indication of where your ship is or your plane is heading are you looking at you mentioned industrial production, you mentioned productivity, inflatio inflation. Are there external factors like rest of world growth indicators. What are the things that are your touchstones that are most important on your dashboard . You know, theres a lot of things on my dashboard, i would say. We i try to do a deep dive on the economy, mostly every weekend. Ill spend a whole day reading everything i havent been able to read during the week about whats going on in the u. S. Economy. And that means reading the data releases and the analysis of the data releases, by many of you here in this room and also around the world, also globally. Following data and markets thats the kind of thing you can do on a long, quiet day when you dont have meetings all day long thats a big part of it. I also think that right now, the broader sort of geopolitical risks are important right now and you have to be watching those carefully and try to assess the implications of those. I watch markets very carefully i have a screen in my office where i dont sit there watching it all day, but you check in several times a day to look at whats happening in all the various markets that we all probably follow. So its essentially, i look at everything in a way. And as i manage many of us do. So the feds role is not a social welfare role, but many would argue that the fall in the Unemployment Rate, the reengagement of many people within the labor market who are out on the edges, that what were seeing over the last couple of years has been extremely positive for the u. S. Economy and the u. S. Population. Is that something that is taken into consideration, that if we continue to run the economy a little bit hot, that it could be quite a positive so i would say that i see that aspect of the Current Situation as a very positive one. I think i would question the aspect of running the economy hot. I think we can learn that the Unemployment Rate can just be lower than we anticipated, even five or six or ten years ago its significantly lower and yet we dont see wages rising in a way that is out of keeping with productivity and inflation. We do see businesses saying that they see workers are scarce. We see workers saying that they believe jobs are plentiful those are good things. We see prime Age Labor Force Participation going up we talk to people in those low and income communities and they say this is the best economy theyve seen in their lifetimes. I would say, i put a very high priority on wanting to continue that i really do. But i guess i do a little bit balk at the idea that were running the economy hot. This feels very sustainable. There is no aspect of the economy that is just booming you have a solid Consumer Sector where people are wages are going up, was going up right at the level of productivity plus inflation. Job creation is healthy. Theres no one sector that is like a housing bubble, nothing like that. Its a fairly sustainable economy. There are concerns around Business Investment and manufacturing and trade, of course, but, yeah, i would say, we dont get to see the 11th year of an expansion very often, and theres a lot to like about it, particularly for people at the low end of the wage scale that are now getting the highest increases and it would be great to see it continue so if we look at the markets, we see that the purchasing of insurance to hedge insurance risks is at alltime lows or extremely benign, but at the same time, were in the midst of starting to increase tariffs on china. Were seeing several rounds that are going to come through. As that starts to show up in the cpi prints, et cetera, how does the fed respond to those i think the basic approach to that for me would be, an increase in tariffs, fif it flow through to the consumer is perhaps a onetime increase in prices, which is a different thing from inflation as long as onetime increases in prices dont carry through into Inflation Expectations, we dont have an increase in inflation. If you look back, some of those shocks can get were a long way from that it feels like the problem of this era is to keep inflation from moving down and trying to keep it at 2 . Of course, if that changes, well know it pretty quickly and know what to do. Great well, chair powell thank you very much. We really appreciate it. Thank you [ applause ] good afternoon welcome to the closing bell, everyone chair powell just finishing up, as you heard lets break down the key headlines. The fed will begin asset purchases again, though chair powell saying, quote, this is not qe in no sense at all. He said it was directed at solving recent technical issues related to the repo market rather than materially affecting the stance of Monetary Policy. He said they will act as appropriate to support continued growth, a strong jobs market, inflation moving back to our symmetric 2 objective and the result of all of this has been a steepening of the yield curve. Earlier today, it had been flattening we now see on the day, the tenyear and 30year yields higher the rest of the yield curve slightly lower and that supported equity markets, as well, which came off of their lows. The low of the session was down over 300 points on the dow we got up to 60 points before the market took a turn south on news from the state department that they would be introducing a visa waiver on certain chinese citizens as we stand, we are down 0. 6 on the dow. And lets get over to kayla tausche. She does have more on these china visa headlines that did hit the market and moved it while chair powell was speaking. We got an announcement from the state department that it is placing advisoing visa restrictn certain chinese officials and communist party officials, that the state Department Finds responsible for or complicit in the detention or abuse of certain muslim minorities that have been detained in northwestern china the state departments human rights report has estimated, there could be more than 2 million of these chinese in internment camps in that area. China, meanwhile, has defended that policy and has said its received remarkable results there and done nothing wrong the state department announcement does not say when these visa restrictions will go into effect or which officials they will apply to it does say this policy is a compliment from the announcement we got yesterday from the Commerce Department, that for these human rights abuses, that certain technology companies, eight tech giants, 20 security bureaus in china will be placed on a business blacklist. They cant buy parts from u. S. Companies without securing a license at the Commerce Departments discretion. That is because the Commerce Department alleges that a lot of those companies were using their technology to surveil or assist in the detention of some of those muslim minorities. Interesting multipronged approach and effort as these tensions rise in the days leading up to these trade talks. Ich i was just talking to a source and says that the discussions are described as tense you probably could have imagined that, considering all of the various back and forth that weve seen between the u. S. And china, just this week alone. But certainly well set a very crowded table for the principles when they meet later this week thank you very much, kayla. A lot going on in the world, especially as it pertains to the United States and china. And there will be more to come this week. Joining us for the hour is josh brown, hell help us break it all down and what it means for the market first, lets get over to Steve Liesman for more on what we heard from chairman powell hi, there, steve yeah, courtney. It was an interesting speech he used a lot of stock phrases hes being using, the fed will act as appropriate, he said. He didnt use the phrase accod dependent, which was in the speech seven times the question becomes, is the Federal Reserve chairman telegrasping to us that theres more uncertainty or less uncertainty about whether or not the fed will cut rates the market took it as less, bidding up the probability of a rate cut to 79 . It was in the low 70s for october. And i hadnt checked, it was in the low 40s or upper 30s when it came to the possibility of it for december its 40 right now and he mentioned a few things about this quantitative easing thing. He wants to increase the reserves in the system to get rid of the problems that led to the repo market, but a very modest amount. They want to bring it back up. He said, this is not quantitative easing. And as a joke later on, he said, did i mention its not quantitative easing . So to be clear here, what hes doing is in order to affect technicalities in the repo market, not to affect Monetary Policy but steve, its also not quantitative tightening. Oh, yeah, theres no doubt that theyve reversed that in a big way. If your point was that they were headed to a smaller Balance Sheet. I think every investor on the street, they got it wrong. They misunderestimated the amount of reserves that were required in the Banking System to keep the fed funds rate where they wanted it to be they needed to put more liquidity into the system and now theyre trying to figure out how much they did announce today that they will be putting that money in the system. Steve, thanks so much for that josh, i guess its a great snapshot of two competing forces on the market. You get a positive, more dovish tone out of the fed, but also offset it with something that worsens the trade atmosphere at the same time. Potentially but those do seem to be the two poles and were oscillating back and forth between them on nip given day of the week. Something interesting to point out, the dow is now flat over the last 1, 2, 6, 12, and 18 months has gone absolutely nothing. My friend at baycrest points out, as of today, we are right smack in between the 50day moving average and the 200day and what that means for the average investor and for professionals alike is that extreme opinions in one direction or the other are not being rewarded and if youre acting on extreme opinions, at the top of this range weve been in or at the bottom, likely youre chopping yourself up and not doing yourself any favors. That has been the story going back to january february, period of 18 since the onset of the trade war and that rhetoric really being dild aled up and t subsequent tariffs that has not changed, i hope it changes. But what is interesting is, while thats happening, youve got very large, very liquid s p 100, s p 500 names making new alltime highs im thinking about apple, nike, chipotle, hershey. These are companies where people are saying one of two things, wilfred. Theyre either saying, things are not as bad as people are starting to feel and these companies will navigate whats to come better than other companies. And i think choose your own adventure as far as which side of that youre on. There are some things looking really good in the chips i want to quickly spottily some chip equipment these stocks are making new alltime highs thats not an accident theres something good happening in various parts of the market the market has been oscillating today. At the top of the performance, down 340 at the low. Were basically bang in the middle of that at the moment lets get more analysis of chair powells comments with former federal Commission Board governor thanks so much for joining us. Whats your take on this announcement do you take a more strong, dovish hint from that announcement i think this is an absolutely a technical matter the fed has decided that they want to run policy with a large amount of reserves in the system, so you dont have these kind of spikes in Interest Rates and they did make a mistake, but its easily correctable that they thought they could have a smaller Balance Sheet to do it and theyll get it back up to where they need to and do it a little bit with experimentation. Its purely a technical issue. And really from that viewpoint, its one that they can easily solve. Its going to take it a little while to get it exactly right. From the point of view of the economy, its a minor issue. As you listened to his speech and the q a, anything give you a hint about what his action may be, and he did note that the economy feels sustainable, the consumer is solid, he says theres healthy job creation, but the fed fund futures are moving a little higher, thinking theres going to be another cut here soon. I think there are a lot of forces moving in Different Directions the labor market is very strong. Unemployment rates are at the lowest level weve seen close to 50 years this is really good news and on the other hand, manufacturing has been very weak and all of this is related to whats happening in terms of trade. We also see these trade problems are hitting not only manufacturing in the u. S. , but is certainly hitting exporters in the rest of the world and from that viewpoint, thats something the fed is very worried about. And i think its one of the key reasons the fed has actually lowered Interest Rates already what would you do if you were voting i tend to have a different view on the way monitory policy should be conducted right now. I actually would be in the camp of, i think that rates should not have been lowered yet, and the reason is, we really dont have any information that the economy is going south and it is true that the inflation rate is a little bit on the low side, but not clear its not where we want it to be or will be in the near future. So from that viewpoint, i would rather the fed take the following stance, which is that right now, the information is not in, because every day, we get a different view thats why the stock market reacts one way one day, when they think things will get better, and reacts very differently on another day, when they think that things are going south. From that viewpoint, what i think is much more important is, that the markets have confidence that the fed will be very aggressive and do it in what i call a very nonlinear fashion in other words, if bad news starts to come in. Better to wait until you do have bad news i dont mean bad news. It can be that something really bad has happened on the trade front that indicates theres no way we can avoid a trade war, for example. From that viewpoint, i think that the better way for the fed to operate right now is to communicate better, how it will react to future data its not particularly helpful when a chairman says, well act as appropriate that to me says absolutely nothing. Much better would be for the markets to understand how the fed will react to data as it comes in and to economic events as they come in. And thats not something that jay powell or the fed has been willing to do and i think thats too bad. Frederick mishkin, thanks for joining us we are down 0. 9 on the s p 500. 28 minutes left of trade still ahead, china front and center, as trade concerns flare and Companies Face fallout over the hong kong protests former hp ceo Carly Fiorina will weigh in ahead treasury yields ticking lower once again the tenyear yield sitting firmly below 1. 6 , sitting at 1. 52 stick with us, closing bell will be right ckba is the monolithic view of emerging markets obsolete . At pgim, we see alpha in the trends driving specific sectors of outperformance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Every day, our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Snchts le. Less than 25 minutes to go the white house has expanded its blacklist of Chinese Companies, ratcheting up tensions as tariff negotiations continue in washington theres also another report that the administration is moving ahead wefrts to limit capital flows to china and just a few minutes ago, the state department announcing its imposing visa restrictions on chinese officials. Time for a cnbc news update with sue herrera hi, sue. Hello, wilf Senate Minority leader Chuck Schumer pushing for a nationwide ban on flavored ecigarettes its part of his plan to curb vaping among young people. At the federal level, ban the flavors that aim these cigarettes at kids in high school, middle school, even younger. Ban it and the good news is we have Bipartisan Legislation this is not a partisan issue some new options are coming to the a. C. T. College admissions test beginning in september of 2020, a. C. T. Will introduce individual section retesting, online testing on National Test days, and super score calculations the three new options will enable students to improve their testtaking experience and also increase their chances for getting into college and available scholarships speaking of which, Oprah Winfrey visiting Morehouse College in atlanta on monday to honor the 30th anniversary of her scholarship program. She previously donated 12 million to that scholarship, but she surprised everyone today with an additional 13 million, making the total investment 25 million. You are up to date thats the news update this hour courtney, ill send it back downtown to you. I feel like oprah surprises are the best kind of surprises they always are you get a scholarship you get a scholarship. I love it. Thank you, sue you got it. Lets send it over to mike santoli for todays first market dashboard. Hi. One of the bright spots in todays market, mostly down. But microsoft has been pretty firm it did get an upgrade from an analyst with a price target of about 160 a share that turns the wall street consensus on microsoft stock almost universally positive. So heres the distribution of overweight or buy ratings, hold ratings, no more sell or underweight ratings right now. So that shows you just about everybody says, buy this stock now, the difference between the current stock price and the consensus price target, really not that high. Its only about 8 , maybe because this is already a 1 trillion Market Cap Company and people recognize its had a great run already. But look at a very longterm chart of microsofts valuation because it has rebuilt this valuation. This, of course, coming right off the tech bubble. Thats when it was worth 600 billion, briefly a much bigger part of the overall market than it is right now. Then you had this long, stagnant period now its rebuilt back up to about a 25 times pri pricetoearnings multiple it seems like a premium valuation. But arguably, its justified people want stability and they want a great Balance Sheet the big question is, what yet is undiscovered about the microsoft story that people have not yet recognized, therefore what will be the source of much further upside from here thats what well have to see, guys mike, i love this, and we did this with apple yesterday. What is the median average price target for all of those its either 157 or 158 right now. So it really is not that aggressive, but thats really because the stock has kind of caught up to some degree to those price targets. But its sort of those a lot of buys, but people sort of sitting on the fence they havent had an impetus to raise the targets very aggressively the big takeaway from me is that Steve Ballmers legacy should be revisited. He took this company over at a 60 multiple. He had no shot to make this stock go up. And actually, earnings, i think doubled while he was the ceo he just had the unluckiness of getting the reigns from bill gaetz in 1999. And he did his job and he obviously missed some big things like social media. But he did a good job. There was just no chance for shareholders to make money with that starting valuation. If youre watching this, the takeaway is not how good or bad is the company, but its what starti ining evaluation are you coming at. You can sit for a decade and a half before it makes you money again. You also have to give nadella some credit, too of course, theyre both great. Bill gaetz is a smart ggatest guy too. We are currently down 241 points during fed Jerome Powells speech, we got down to only 59 points, but we are selling again as we approach the close coming up next, well do your last chance trade. Dont go anywhere. Wow, what a beautiful wedding as your second cousin and number one broker. Youre welcome. Remember, carl, we havent been investing with you for a while. Hmmm . Because schwab makes planning for things like this easier. Yeah, with schwab we get automated investing and integrated planning help. For a low Monthly Subscription price. Why would schwab do that . They help you plan for the things that matter. Subscription pricing. Schwab introducing subscription pricing with oneonone guidance. Schwab intelligent portfolios premium, a modern approach to wealth management. Im off to college. Im worried about my parents retirement. Dont worry. Voya helps them to and through retirement. Dealing with todays expenses. While helping plan, invest and protect for the future. So theyll be okay . I think theyll be fine. Voya. Helping you to and through retirement. You should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. Welcome back weve got 16 minutes left to trade. Over a percent for the other major indices and we are softening as we approach the close. Time for the last chance trade josh, what are you going for i would like to discuss nvidia today i think this is im long the stock as an investor, but i think theres a trade coming up here as the stock breaks back above 190 year ago, a started a 56 decline from an alltime high, all the way down to that low theres a huge gap in the chart. The stock has spent the entire year working its way back up now above 185, 190, you really dont have any resistance. Theres a clear shot up to 230 if it can break above that level. Youll want to use the bottom of that big gap down, which is 170. Youre risking 10 to potentially make 20 yesterday, big upgrade for nvidia, talking about their two key markets turning the quarter. Gaming is very important to the economy, but also, the Enterprise Cloud and that looks like its bottomed and its going to start to turn upward in the fourth quarter. Did you get this idea my watch can go closing bell yesterday from dan nathan . No, i love dan nathan whatd he say . He called for it. Shout to dan. I like the stock ive been in the stock for four years ago now. But i like the stock as both an investment, but from a shortterm trading perspective, youll know youre wrong at 170. You could stay along for a long time if we dont see those levels i mentioned some other chips that look good in the show this is a sector thats very important to the market. I like to see the action in this stock specifically and the group in general got to get more of those impressions later on today that was my best one. Very good stick around for 5 00 p. M fast money with dan nathan, later today. This is the last commercial we are going to take before the close. Well take you inside thmaete rk zone, thats when closing bell returns. Will it feel like the end of a journey . Or the beginning of something even better . When you prepare for retirement with pacific life, you can create a lifelong income. So you have the freedom to keep doing whatever is most meaningful to you. A reliable income that lets you retire, without retiring from life. Thats the power of pacific. Ask your financial professional about pacific life today. Owning and running the biggesta Small Business is finding the right people. In hiring our first recruiter, we decided to post a job on linkedin. They had to have worked. At a recruiter firm and be bilingual. When we saw ana marias profile. She had a ton of experience in hr. The interview went really well. And she seemed like someone who could really sell mckenzie to perspective employees. We found the best person to find the best person for us. Post a job today at linkedin. Com grow you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. But youre not mad, because you have e trade which isnt complicated. Their tools make trading quicker and simpler. So you can take on the markets with confidence. Dont get mad. Get e trade and start trading today. Weve got just over ten minutes left in this trading day. And were now in the closing bell market zone. This is commercialfree coverage of all of the action going into the close. Cnbc senior markets commentator mike santoli is here to break down the crucial moments of the trading day and today, we have jeff brown as well fed chair Jerome Powell speaking at the annual National Association for Business Economic meetings earlier today about the feds Balance Sheet. Growth of our Balance Sheet for reserve management purposes should, in no way, be confused with the largescale asset pc s purchase programs we diploid after the financial crisis nor the technical issues should materially alter the stance of Monetary Policy. Mike, were down 1. 4 on the s p 500 again today, quite near the session lows originally, when he announced that, the market got a lift and then we lost steam i think the market kind of liked general message of flexibility. Clearly wide open to further easing moves and having something more permanent to make sure this overnight funding stress in the bank system does not get out of control i think that was all to the positive, but obviously we got these new headlines on the visa restrictions, on chinese officials. And i think that kind of just sets in this sense that its a cold war of sorts with china and lets forget about looking for some big deal. And josh, you liked what thoed she had to say about that yield curve. What was his exact comment . They were going to look into whether they can more directly try to influence the yield curve. And i know theres a camp of people that would say, its manipulation, but thats all the fed does is manipulate its in their job description. Its not against the people for them to be trying to manage various parts of the economy with Monetary Policy rather than play games and jawbone it, doing something more direct could be a change of pace and potentially work in shortterm situations. So the yield curve did invert in the Second Quarter of this year. We are technically on the clock. Historically youve had somewhere between a year to a year and a half. The longest period of time youve had is 21 months. If the fed is looking at Something Like that, its not that the yield curve is causal when it inverts, but i think its interesting that theyre pursuing some of these avenues to look at various aspects of Monetary Policy. And we did see yields move lower as he was speaking chinese stocks are under pressure after the state department announced theyre imposing visa restrictions bob pisani is at the alibaba post a lot of headlines earlier in the day. And none of them are really very good heres alibaba a lot of good volume 14 million shares, thats good were near the lowest of the day, down about 3. 5 . The old high was about 190 or so so were well off the 52week highs. Elsewhere, if we look at other sectors, we see, what else would be down here, jb. Com thats had a pretty good year, up about 30 but it too has been down in the last several days. Baidu, a big internet search company. Search has not been good in china. That stock is probably down about 30 on the year. Youve got sanctions on big Chinese Companies, visa restrictions on chinese officials. Youve got, considering limiting investments in china by government pension funds, not a lot of good headlines for trade. A sign today that Monetary Policy cant fully offset the trade war . Certainly i dont think we had the premise that it could fully offset the trade war, be between that and the ongoing debate that kind of rumbles underneath this entire market, which is, is this a soft landing or a soft patch in the economy, i think thats the backdrop within that, its just a trading range. The stock market has been just kind of knocking around, chopping for two months or more, trying to sort this stuff out. And remaining supportive, but not make any headwinds the dow is just off session lows, the s p is at session lows and down 1. 4 . Chip stocks getting hit hard in todays session. Josh lipton the in San Francisco wither many. Josh some semis slipping today check out the smh, the etf that tracks the chips, still up some 35 this year. Notable underperformers today would include seagate, western digital, nvidia, qualcomm, and micron chip investors concerned about those trade talks, specifically, the u. S. Government now adding those 28 entities to a trade blacklist, including some of chinas biggest ai firms now rbcs Mitch Steeves tells me he still likes amd and a fan of vindya, as well, betting both take more share. Were going to move to biotech stocks because those, too, are getting crushed today. A major move lower for Diagnostics Company is weighing postoperative entire space missed wall street estimates zmounds its ceo is leaving for the quarter, they cited weaker than expected developments in china, which may be part of the reason youre also seeing chaser of ill lumina sinking. Guys, back over to you meg, thanks very much were down 1. 4 on the s p five minutes left. Lets get to shares of dominos. A volatile day for them. Kate rogers has more dominos missing across the board as the Company Continues to face pressure from Third Party Delivery aggregators and dominos cut its longterm outlook range into a two to three year window, saying it was more relevant for investors in this uncertain market. Still, the ceo maintaining there is a shake out coming in the industry, defending the companys strategy of fortressing, looking to carry out for growth and keep delivery in house the stock turned positive as he spoke about the new guidance structure on the call. Its up by more than 4. 5 today. Allison will be a guest on mad money with jim cramer so be sure to tune in for that and much more. Josh, where do you stand on this one im not eating it, by time a Company Comes out with what at first blush seems like its going to be bad news and reverses this hard in the middle of the day, i think you really have toic that the buyer seriously here they are accumulating this name, we used the weakness usually a stock gaps up or down and finishes in that general direction. If youre not in the name and looking for a company thats under accumulation, clearly, this is something to look into weve got about three and a half minutes left. Every single sector is lower mike, youve been looking at all of the internals and how it breaks down. Lets first look at the up down volume it has been pretty decidedly to the downside 70 or so declining volume in the New York Stock Exchange. That pretty much befits where we are right now in terms of the index is down 300, losing some ground there also, the average stock, the rsp, the equalweighted s p 500 has been lagging the main s p all day and that also shows that the main index down is suffering a little bit today we are under some pretty comprehensive pressure interms of the sector performance, financials are at the bottom got some reprieve when the yield picked up for that brief half an hour during chair powell and the yields have influenced the overall market low conviction. That has been the story. And meg mentioned some of those big medical device names they have been leading the list on the downside as well. And so some consumer stuff in tech is holding it up. The russell once again underperforming down 1. 6 welcome 1. 7 the russell moves with the transports even though theres no real reason for that, theres just Risk Appetite and cyclical indicators is transport is down almost 2 here. Two minutes left to go lets send this over to Rick Santelli for a check on the bond market weve been talking about it a lot this hour. Hi, rick we have, buying tbills is not qe i had fonder that overnight. Look at a 24hour chart. After jay powell spoke, they made new, fresh lows theyre now down about four basis points 149 is the cyclelow close oneweek of tenyear, you can see we are drifting right above the cyclelow close at 146 finally, theres the dollar index. This chart starts on the 30th. The day we had the high close. Only about a quarter president away from it lots of thin ice going into the close at nasdaq. We did see apple really rise a bit on those Powell Comments now down near the lows of the session on the worries about those new visas against some chinese officials. One of the worst performers today are really the small and midcaps and weighed down by East West Bancorp and the regional banks Raymond James downgrade iing thm meantime, smile direct club got better news from analysts. In fact, it sent out a press release saying, hey, we got great analyst cred but the stock today cratering. About a half a dozen of these Health Care Ipos hitting new lows today over to bob. And a lot of rough china headlines making it sound like a china deal is not imminent cyclicals like industrials had a very tough day, bertha boeing had a very rough start, but around 11 00, they did get q3 deliveries reported the good news was that they booked their first 737 max orders since april, but also reported cancellations for dreamliners. A nice little rally. Bank stocks moved down, j. Pmorga moved down along with goldman and we saw weakness in some of the other industrial names like cart pill car caterpillar. It have announcement on visa restrictions on chinese officials hit about an hour ago. Dow closing the day down around 320 points good afternoon. Welcome to the closing bell. Im wifflfred frost. You can see the days action on the right side of your screen with the stories still coming up on the tabs at the bottom of your screen. Lets check in on where we close. Right at the session lows for the s p 500. That was down 1. 6 the dow also close to its session lows nasdaq and russell, lagged the group both down 1. 7 every single sector from the s p was lower. Financials down a full 2 . Also just wanted to pick out tenyear treasury note, as you can see those bearish tone, a brief reprieve as chair powell struck a fairly dovish tone at times and falling towards the close with that china visa restriction headline and ending lower on the day quite a bit of moves there for the yields, as we were listening to powell and getting those headlines out of china or about china. Lets take a look at shares of walmart. This is the one lone gainer in the dow. This was higher for almost the entire session if you think about it, this could also be one of these more safe plays we talked a lot about walmart and have they have this dispersed way of dealing with their supply chain when it comes to possible trade implications and Mission Strategies therein its a staple name and sometimes there is safety to be found there, which is perhaps what we found today. We also did see its competitor, target, getting an upgrade from Raymond James to a strong buy. Joining us today to talk about this market day, josh brown, hes still with us, along with scott wren, senior Global Equities strategist at Wells Fargo Investment Institute and of course, we have mike santoli. We saw things fade down into the close. A lot of different headlines coming out of both powell and what the United States is going to do restricting visas. Is that what this is all about fear that we are so much further away from any kind of a deal this week or in coming weeks it does seem like it was a little bit of a give up i dont think we came into this week thinking we were going to get any kind of tidy agreement but it does seem as if right now its not even as if the scene is being set for a truce or for progress and besides that, with you think its kind of this noisy environment where treasury yields have not been able to get any lift the overnight news was not great in terms of brexit kind of creating another little hitch in things i think all of it together, were now back down. We gave up fridays pop after the jobs report. The thursday morning low in the market was about 1 below where we closed today. Were still kind of fighting out these levels here. Pretty close to where we were for most of august scott, whats your take on some of the key levels out there at the moment . Wilfred, if youre a technici technician, this is not a great close. And mike mentioned these various china tensions and does it increase the possibility of a deal does it not . Any of these negatives weigh on the market, but certainly, we finished right at or slightly below the trend line off the june low i would argue if we break this and ran a lot of stops last week, but you have to look at that june low down at 2840 you have to look down a 2800, and below there, about 2740. Were in what i would call a zone of support here but certainly the pressure is to the downside and we need to hear some good news or at least some happy talk coming out of these meetings in washington on thursday Credit Suisse was out with a bullish note this morning heading into q3 earnings season, saying epps projections are likely end to in positive territory. This comes as several wall street firms are starting to raise red flags about earnings in 2020. Goldman, morgan, bank of america all warning that corporate earnings will come under pressure due to a higher cost of goods. Josh, where do you stand on this and whether earnings expectations have come down enough that when we get q3, q4 earnings, we could see some positive surprises i think thats the good news. Earnings estimates have been coming down all year for this quarter specifically, when we began the year, the consensus was looking for Something Like 44 for the s p andnow its more like 40. If we can come in at 41 or 42, theyll rally. Because markets dont care about good or bad. They care about, are things better than what was expected or worse than what was expected so of course, i prefer to go top into a quarter with a backdrop of a lower bar for earnings and hopefully that will be the case if you combine that with an easier n easier nonthreatening fed and this will we or wont we get a china deal, lets hope we never open that box. Having that carried out in front of us, that might be enough for a u. N. Rally theres still a tremendous amount of risk in this u. N. Market youre up 17 to 18 on the s p 500 this year. A lot of active managers arent and youre going to see the betterperforming names, in my opinion, get bought up, as people start to sniff out the fact that we have less than 90 days left. I think there are enough factors in our favor we all know what the negatives are. Im not going to get into them again. There are enough positive potential factors in our favor that this market holds up into year end and possibly rallies. I reserve the right to change my opinion based on the next tweet. We can take a pause here. We have an earnings alert on lele levi levi is reporting 1. 45 billion in revenue which came in higher than expected 31 cents on its bottom line versus the estimate of 28 cents. And you are seeing the stock move higher near extended trade, although its been all over the place, right now up 2 after losing 4 in todays regular trading session. Strong growth in directtoconsumer business, it saw growth in asia and europe, but america saw a net revenue decline 3 due to a decline in its wholesale business levi also mentioning the negative impact of the dollar. Stock up about 1. 4 . Back to you. You can see the stock oscillating this america is ael ra important segment. I dont think a lot of expectations built into this stock at this point, for this quarter, the next couple of quarter quarters not really something thats going to be. Speaking of expectation. This company got acid washed the stock gapped down hard i think it fell Something Like 30 from peak to trough. But since august, actually, its been making this nice series of higher lows. Technically, this one looks better than it did a year ago and its definitely something everyone can relate. This will be one of the names that works its way higher. Technically, i like it i would have to do more work fundamentally to say whether or not its cheap or expensive here theyre working on growing their tops business. I play this game of counting how many levi tshirts i see do you wear levis jeans . Wilfred i wear a lot of gap adrianna goldschmidt. Sorry i dont shop for myself. Did he just make that up . He did not just make that up. Ag. Come on, mike. Weve got to get mike some jeans. Scott scott, were not going to ask you what kind of jeans you wear i wear levis cool, youre in with me on this one im old school. Lets bring you back to the markets. We were talking about the expectations for the earnings season, which is important but you have to also be looking at Business Investments and what businesses are planning for the longterm. Theres so much uncertainty. That has to be a key part of what youre watching for earnings season . It absolutely is. Really, courtney, for us, were expecting a slightly positive number, a couple of percent, Something Like that. Nothing dramatic the consensus is calling for a little bit of a negative but thats the situation what we really want to see is an increase in Business Corporate spending its been okay, but not growing at a very good rate at all going back to the trade situation, you need some Business Confidence here some kind of u. S. china trade deal would help that it will take some time to play out, but for us, as we look ahead, i think youre still going to be in a very modest growth and thats not going to change unless we get some positive trade news. Well leave it there. Josh, scott, thanks very much for joining us financials are one of the biggest laggards today up next, well look how to play that sector. Keep it here were back in 90 seconds man how can i deliver superior longterm results . It begins with a distinctive approach to managing money. That for over 85 years has focused on keeping confidence up when markets are down. An approach where Portfolio Managers work well independently. And even better together. Who dont just invest, but are personally invested. Can i find a proven approach designed to deliver results . With capital group, i can. Talk to your advisor or consultant for investment risks and information. Financials were hit hard today, finishing the session down 2 . The worstperforming sector in the s p 500. For more, lets bring in liz young, director of Market Strategy at bny mellon investment a investment thanks very much for joining us. Liz, is this a buying opportunity for the banks . I do think financials are worth a little bit of a bite here you have to think about whats causing them to be down. As we pile on to trade and pile on to these international headlines, youll continue to see the yield curve get pressured, especially on the long end thats obviously going to affect financials, but its not necessarily that trade and International Tensions are going to be financials as the target so i still think financials will hold up here and if we get a little bit of a deescalation, youll see them come back. Jeff, is this a lot about when you look at trade, i cant seem to think that when im looking at financials and trade, that the two of those go together is financials a place maybe i could stay safe . I know theyre connected, of course, to whats going on with yields, so that in effect, has a lot to do with trade well, one of the good things skb and one of the bad things about financials is that banks are a proxy for economic growth, because they provide the capital that drives economic growth. Trade in and of itself may not be crucial, but to the fact it impacts Global Economic growth, that plays right into the banks. And were seeing them fall in and out of vogue week to week depending on what narcotic expe the market falls in. So it would seem to me theyre getting back to that oversold position with the downturn today. But the trick is, right now, in this space, you have to have a macro call if you think were going to get a trade and things will be okay economically, financials are buys if you think were not going to get a trade deal and were walking into a recession, you want to stay away from the space. What do you think about earnings session, jeff, about to kick off du do you think that could be a catalyst to turn these stocks around from where theyre at now, i think its going to be a good earnings season relative to some of the expectations, specifically the Capital Markets information weve got now, which has looked a little better than i think people were thinking but the big key is going to be, whats the forward outlook what are ceos expecting and seeing in their businesses and im not sure theyre going to have a whole lot more insight than we do on the outside. So i think the outlook will be constructive, but maybe a little short of the really positive outlook that would really boost the bank stocks up again as the fed looks at potentially considering rolling back some of these regulations from dodd frank that may help some of the smaller orregional banks, is that something that you might find attractive as an Investment Opportunity it could definitely help. Earnings season will be more positive than its been earlier in the year, but as long as theres pressure on the yield curve, were still going to probably get some cautious guidance, especially out of financials the regional banks are really more a proxy for the consumer and as long as the consumer is strong, you can look at banks, but if Consumer Sentiment gets pressured, regardless of some of those regulation changes, i dont know that i expect anything as a huge pop to the regional banks anytime soon. I agree as an economic proxy, financials are something you still want to be in. They end up being a necessary evil, but the financials in the u. S. Are the most attractive ones if you want to hold some financials, youll want to hold u. S. Financials. Liz, jeff, thank you both for joining us thank you well, still ahead, former hewlettpackard ceo Carly Fiorina weighs in on how businesses should handle rising tensions with trade partners and were joined by the ceo of teledoc were back in a couple of minutes. When you invest your cash. You can get a satisfaction guarantee. You can also wonder why our competitors dont offer that. Schwab, a modern approach to wealth management. Welcome back to the closing bell. Lets send it back to mike santoli. Taking a look at the Asset Management stocks. The Asset Management subsector of the s p 500 this was about 300 at the index level. Were down 20 in less than two years with these very large Asset Management stocks, as a time were still in a bull market when the overall market is still within a few percent of alltime highs. Obviously, the market is telling you, these are no longer the highly profitable growth businesses look at the p\e multiples of several leading traditional Asset Managers right now and see the compression thats happened this is invesco. Big, huge, global asset manager. Its down to about a six p\e. What this is basically telling you, trading at big discounts to the market is the market is saying theyre being disintermediated there was an initiative today at bmo. They were saying, if you could buy the private equity guys, the alternative Asset Managers, like apollo, but not these traditional guys who pay who basically get paid to try to beat the market for the most part and thats increasingly an area of overcapacity and not one that essentially they feel like you can get out of this disruption trap. Blackrocks p\e stands out still, but it has a lot of ins indexing a lot more diversity, yes mike, thank you health care under increasing scrutiny as president ial candidates and companies grapple with the challenges of an aging population Teledoc Health is the oldest and largest virtual care company in the United States, serving remote medical care to over 23 million members worldwide. Listing on the New York Stock Exchange in 2015, it was the First Virtual Health Care Company to go public and currently serves more than 40 of fortune 500 employers joining us now is their ceo, Jason Gorevick thank you so much for joining us good to see you so this is face timing your doctor for an appointment as opposed to going and immediating to visit them in the flesh we do video visits, chat, telephonic interactions all around the world and will do that about 4 million times this year how simple is it to initiate those types of appointment for example, can a doctor sign up for an hour, for an afternoon to do some appointments in the same way that someone who owns a car can do to do to be an uber driver they can come on for a single visit if they have a cancellation in their own schedu schedules. The cost of delivering care virtually is significantly lower, probably about a third of what it costs to deliver care in an office. How do you assure patients that its sort of safe and private . I can imagine face timing with a doctor, perhaps, i have never met before about a personal medical issue might be a bit of a hurdle for some people to get over initially were not using face time, were using our own proprietary application that is highly secure and confidential for the consumer more to the point, we use tremendous Quality Control efforts to make sure that the medicine thats being delivered is being delivered by excellent physicians in a way thats highly consistent with the best practices. You see some reports of the likes of amazon planning to launch rival products, amazon care do you see that as a significant threat or something that vindicates our business model. I think its a tremendous validation amazon is a client of ours they launched virtual care as an addition to their clinic strategy for their own employees. And i think that just underscores the value that they see for virtual care for their employee base. There have to be obvious limits when youre doing virtual care theres only so much you can do without being in the actual presence of a physician. How do you understand as a patient or educate the patients on what this could be used for and when its just not an appropriate tool of course, were not suturing a laceration or setting a broken bone virtually, but patients are pretty good at understanding whats appropriate and whats not appropriate. About 92 of their users actually get their issue resolved the first time without needing to get followup care in person you just came out with your Mental Health survey main takeaway for you along the lines of how many people have these issues but dont talk about them we engaged in a tremendous Global Research study, really it wasnt to identify the global Mental Health crisis, i think thats pretty well accepted at this point, but it was to understand the role in the workforce and the workplace relative to Mental Healthcare. Consistent with the overall data about one in four people, adults worldwide has a Mental Health issue, but the issue is even more extreme than we thought where 82 of people globally who have a Mental Health issue were afraid to talk about it at work. Is that something that your platform can help . Can you do sort of psychological visits over your platform . Definitely, we have a tremendous and rapidly growing Mental Health business and Mental Health delivered virtually really helps to break down the stigma. Which is the Biggest Issue that people in the workforce said was a barrier to them talking to somebody at work they said, overwhelming, they were afraid that it would be a, quote, careerlimiting discussion Jason Gorevick, thank you for joining us to talk about your company and virtual care this is certainly not the end of the discussion lets get to a quick market flash on fire. Seema mody has those details were looking at the Cybersecurity Firm here, out with preliminary guidance. Fire eye says revenue for Third Quarter to be at or above the high end of the companys Prior Guidance range of 217 to 221 million. You can see the stock up nicely here in extended trade, by nearly 4 . But keep in mind, the big picture, stock is down about 10 in 2019. Back to you, wilf. Seema, thanks very much higher by about 3 in afterhours. Coming up next, Carly Fiorina talks about how the trade war could affect the tech sector and well hear from the companys head of Public Policy and Public Affairs coming up on closing bell. Quadrupled their money by 2012 . And even now many experts predict the next gold rush is just beginning. So dont wait another day. Physical coins are easy to buy and sell and one of the best ways to protect your life savings from the next financial meltdown. [narrator] today, the u. S. Money reserve announces the Immediate Release of u. S. Governmentissued solid gold coins for the incredible price on your screen. These Gold American eagles are official gold coins of the United States and are being sold for the price on your screen. Pick up the phone and call americas gold authority, u. S. Money reserve. With nearly two decades in business, over a billion dollars in transactions, and more than a half a million clients worldwide, u. S. Money reserve is one of the most dependable gold distributors in america. [narrator] today the u. S. Money reserve is releasing official Gold American eagle coins at cost for the incredible price on your screen. These governmentissued gold coins are official u. S. Legal tender made from solid gold mined here in america and fully backed by the United States government for their gold weight, purity, and content. Do not delay, call now to purchase your Gold American eagles for the amazing price on your screen. Gold is now on sale at prices unseen in years and this year could be one of the greatest goldbuying opportunities of all time call now while vault inventory remains. As one of the largest u. S. Gold coin distributors in the country, the u. S. Money reserve has proudly served hundreds of thousands of clients worldwide. Dont wait another minute, call now to purchase your American Eagle coins at cost for the amazing price on your screen. Welcome back to the closing bell. Its now time for a cnbc news update with sue herrera. Heres whats happening at this hour. Moments ago, founder of a food and Beverage Packaging Company and his wife were sentenced top one month in prison for their role in the College Admissions scandal. Gregory and Marcia Abbott had pleaded guilty to paying 125,000 to improve their daughters test scores the Trump Administration reporting a steep decline in apprehensions at the southwest border this after a year of recordbreaking migrant arrivals the head of customs and Border Protection crediting the administrations immigration policies we have essentially ended catch and release. If you come to our borders now with a child, its no long an immediate passport into the interior of the United States. Dallas Officials Say they now know who killed the key witness in the amber guyger trial and they need your help to locate them. They say three men are responsible for the death of joshua brown 20yearold jacarismitchell, 22yearold thaddeus green, and 32yearold Michael Mitchell they say it was a drug deal gone bad. You are up to date thats the news update this hour wilf, ill send it back downtown to you sue, thank you very much. Stocks selling off after the u. S. Imposed visa restrictions and some chinese officials for the repression of Muslim Minority groups. Bob pisani is having a closer look at the market fallout and some of that china exposure. Bob . And a trio of china headlines really weighed on chinese stocks all day. Alibaba, the biggest of them all, good volume, 16 million shares down about 4 . Although, overall, the e ecommerce has been strong this year in china. Down the last month. Same thing with its rival, jd. Com, another ecommerce site up about 30 but on the descent in the last month. Baidu, overall, search has not done that well down about 30 this year and its been on the descent in the last few days. You add sanctions on big u. S. Companies, visa restrictions and considering limiting investments in china made by u. S. Government pension funds, doesnt feel like a trade deal is imminent or at least thats the way the markets interpreted the news today guys, back to you. Its been quite a day lets get reaction now from Carly Fiorina, the chair of Carly Fiorina enterprises and the former ceo at hewlettpackard. You obviously know an awful lot about tech and you certainly ran for president , so looked at our relationship between the United States and china do you think these measures are step too far well, i think theyre not going to be affected first, i applaud the Trump Administration for deciding that we needed to deal with china once and for all theres no question that they had been violating the commitments they made to the wto when they joined its also true, and the nba issue reminds us that although they have a very large market, they are not a market economy. This is an economy controlled by the government, as are their companies. And so if youre going to play this game with china, you need to take a very long view that china will not the chinese will not respond to threats. Ive been doing business in china for a very long time if were going to get anywhere with china, we need to have a very disciplined, thoughtful, strategic game plan. We need to be patient. We need to pay the long game because that is what the chinese will dop and threats will not work. There are ways to pressure them but theyre going to play a very long game. My worry is i dont think we have a strategic, thoughtful game plan. I think were throwing a bunch of stuff on the wall to see what works. If we go back to the beginning, carly, you say, theres no doubt that china has violated the rules and stolen an ipo or whatever it may be. But go back 10, 20 years, how much responsibility did the ceos of the companies have to take that essentially allowed their ip to be stolen on their watch whether that was rule breaking from china, shouldnt the companies have been aware it was happening and stopped it in the first place. Its almost like they traded Revenue Growth in the shortterm for longterm damage to their nations ip. To a certain extent, yes. But consider this. Consider the Chinese Market opens up, there are literally billions of consumers. The only way to reach those consumers is to form a partnership with companies that the Chinese Government points to and controls the only way to form those relationships is to have an agreement where the chinese gain something and you gain something. The problem is that the chinese never lived up to those agreements as a ceo who led a large tech company, we made plenty of agreements i can remember sitting with chinese officials and pointing them to chapter and verse of the stealing of our intellectual property and we would get some response, some of the time but was that tradeoff worth it for you in the long run, no it was not worth it. But that was hard to see in the short run. I think what youre seeing now is company after company whether its google or facebook or the nba or ibm or hewlett parked, now backing up and saying, or the financial companies, or the Insurance Companies saying, you know, we committed to a longterm relationship in china, but we have got no profit in return we havent gotten the market share that we expected in return and meanwhile, we have built up competitors that are threatening us in other markets. Its always easy to look back, but i do think, do companies bear some of the responsibility . Yes. But this is a place where the government has to be involved, because, again, the Chinese Market is not a market economy it is a big economy, controlled by the government. And it is a big economy, and if you were the nba, what would you tell him about how to thread this needle . He want s access to those consumers, but he also wants to make sure that he allows his officials to be able to speak their mind as it pertains to our u. S. Laws . To your previous point, i think there does come a point where you say, i cant do this anymore. There came a point in time in hewlettpackard where it says, we can do business in china in the way you want us to around printers, for example. And i think the nba may be coming right up against the limits of what their brand stands for in the rest of the world. They shouldnt be surprised, by the way. They shouldnt be surprised that when they make a comment like that, that the Chinese Government, through their companies, is going to react in the way they did their comment, the Chinese Governments comment was quite interesting. We dont think freedom of speech applies if it impacts social stability and national serenity. Wow. But to that point exactly, and the particular debate between the nba and china, and i dont want to trivialize the protests in hong kong, but freedom of speech doesnt exist in china we already know that should the companys responsibility be revenue trading off with ip that weve just discussed, or does democracy and the rights of that come into it we know that china is an autocracy, so should we be surprised by these pushbacks my point exactly. No, we shouldnt be surprised. And i think what youre seeing in hong kong, and it is a great regret of mine that this administration will not provide even the smallest verbal support to what is going on in Hong Kong Hong kong is a thriving financial center, less so every day. The people of hong kong are standing up, trying to say, wait a second, were still a special territory now, less so, now. But no, the nba should not be surprised that the chinese push back on this commentary and i think as was said this morning by the nba, we export values as well as a game and its important that we stand up for our values i think theyre right. You say that pressure tactics and threats and tariffs, perhaps, are not the way to get anything done. If you were to inherent this policy or somebody is going to inherit this set of policies, whats the way out of it first of all, lets think about what is in the chinese selfinterest. So obviously, a continually growing economy is in their selfinterest. The one thing that the Trump Administration has done that i think is very smart is they are petiti petitioning the World Trade Organization to stop the designation of china as a developing economy thats very smart. Because if youre a developing economy, you get to play by a different set of rules theyre clearly not developing anymore. They are developed thats a good thing. I think, secondly, and i have said this for many years, what we ought to have been saying to china for some time now, and saying now and Going Forward is, the rules that you ask us to play by in your market are the rules that you will have to play by in our market so for example, if we can to the list American Companies on your Stock Exchange, you cannot list Chinese Companies on our Stock Exchange if you prevent us from buying majorities of companies in chinese, then you are allowed to buy majorities of companies in this country and we know the chinese has bought plenty of companies in this country, lock, stock, and barrel and they List Companies on our Stock Exchanges and finally, to your earlier question, we now have to have the full power of the federal government behind companies when they say, we cannot enter into these intellectual property deals, because theres no question that china wants to become the high tech leader of the world and they cannot become that high tech leader without some help from high tech companies. Carly, switching focus now, you do a lot of works in terms of trying to increase diversity on boards. Where are we in that how much progress has been made . How much response do the companies see in their performance when they do increase the diversity first of all, the facts are pretty clear now when you have a more diverse board, you get better results. When you have a more diverse team, you get better results and i mean better results as tracked by revenue, profit, stock price. However, we have also made very little progress. When i became the ceo of hewlettpackard, i was one of very, very few today, there are more ceos named james than there are women today, we have 16 of Corporate Board members who are women in corporate america. Over 50 of the boards in america have no women at all, much less women of color so you would think that we would have made a lot more progress than we have made. The reason we havent made progress, i think, is not because people are bad its because people are most comfortable with people they know its because people are most comfortable with people like them and most importantly, its because people still belief that diversity is a nice to do. Yes, we have to be respectful and have lots of people at the table. But they dont think yet that its a business imperative but if you look at results over the longer term, not just a quarter, not just a year, diversity actually is a business imperative you get better decisions when you have people who are willing to challenge one another and we know that if people are all the same, they quit challenging each other and start finishing each others sentence and thats called group think and we have that on boards, too. Do you think a female president would change the game for Corporate Boards i dont know if it would. I think what has to change the game for Corporate Boards is for Corporate Board members be willing to is accept the perceived risk of adding someone that they dont know, adding someone who is different, and in particular, adding someone who will ask the challenging question instead of just going along to get along, which explains how a lot of boards, honestly, have sort of fallen asleep at the switch, while the performance of their company deteriorates over the long haul. Carly, thanks so much for joining us great discussion youre welcome. Carlie fee riorina there [leaf blower] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. But youre not mad, because you have e trade which isnt complicated. Their tools make trading quicker and simpler. So you can take on the markets with confidence. Dont get mad. Get e trade and start trading today. Get e trade and start trading today. That could allow hackers devices into your home. Ys and like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. The United Auto Workers strike against General Motors is now on its 23rd day with talks reportedly turning to focus on wages and pay increases for its members. One Company Supporting uaw workers during the strike is ai airbnb during the campaign, airbnb will give uaw members an extra night of income for hosting stays between now and december 16th. For more, lets bring in chris lehane thanks so much for being here. We understand you did this previously during the Government Shutdown how does it work and why does it make sense for airbnb from a financial point of view . This is really about our hosts. Air bnb doesnt exist except fo the millions of hosts around the world. In 2008, people were needing to find ways to make extra income 40 of all americans are about 40 away from facing a really difficult financial situation. So when these types of situations come about, we look for ways to be able to work with our Host Community in the midwest, where a lot of these uaw workers are based, we have 15,000 hosts in michigan, 11,000 hosts in ohio and so the goal of this program really is to give a little bit of a helding hand to those folks who have actually helped make this company we dont exist but for them. And think about whats happening over the next couple of weeks. Some really big, big 10 football games. And we know we get big spikes in guests traveling to these games. East lansing michigan in two weeks has the Michigan State penn state game. This upcoming weekend is the notre dame michigan game, 107,000 people coming to ann arbor. And if some of those people can go stay in some uaw houses and get a little bit of extra money into their hands, i think thats a great thing. But this is really about us trying to do the right thing for our hosts, because they really are the core of what our business is about. But what about, in other situations, where you see people lose their jobs or other union strikes, other companies, perhaps, going into trouble. Why dont you help them, as well we did start this program as you guys alluded to at the beginning of this conversation earlier this year when there was the federal Government Shutdown. And it really dawned on us that there were a bunch of our hosts out there who were federal Government Employees who had lost their paychecks and it was an opportunity for us to be table to step in, which we did at this time thats where the program was really created this is sort of the next opportunity that we saw that came before us and its certainly something that were going to continue to look at and to be able to do, in places where we can step in. Now, historically, we have used a platform in a variety of interesting ways we have something called the open homes program, where our hosts open up their homes for those people who may have lost their housing, because of a Natural Disaster or some other type of disruption im sitting here in Northern California last year during the terrible fires, we opened thousands and thousands of homes for people who just didnt have a place to live. So we do really want to use this platform and im sure as youre aware, this is a peopletopeople platform airbnb doesnt exist but for hosts. That whole social contract is really critical to how our business runs and how our community works. So when there are moments like this, we really do want to step in and i want to be clear, were not the solution to these larger issues were trying to give a little bit of help here in a particularly challenging situation here and we certainly hope that management and labor are actually able tocome to a resolution and everyone can move forward. Chris, are you increasingly nervous about the prospect of a potential ipo when you see the troubles of some companies of late well, again, for us, you know, its really about focusing on our fundamentals. You know, i come out of politics originally, and people always used to talk about polls going up or down and i always yooused talk about, keep your eye on the ball and stick to the fundamentals i talked about how our business works and our model works. Ultimately, if were delivering for our hosts, well donacontint grow hosts make up 97 of the money they list their homes for. Theyve made 80 billion over the course of this platform. Unique quality, local experiences. Over half a billion of those folks have traveled on the platform and driving real economics into the communities theyre going into over 100 billion in direct Economic Activity in our top 30 markets that our guests have generated from their spending. If we continue to focus on that, everywhere else will take care of itself. So, we do know that as the days and the years grow longer, that the Airbnb Community grows stronger and thats a result of how that whole social contract works on our platform. Chris, thanks for joining us. Thanks for having me. Its always a pleasure skbltill to come, the fed in focus minutes set to hit the tape tomorrow. Were back in a couple of minutes. Growth in manufacturing jobs in the us. Its a competition for the talent. Employees need more than just a paycheck. You definitely want to take advantage of all the benefits you can get. 2 3 of employees said that the workplace is an important source for personal savings and protection solutions. The workplace should be a source of financial security. Keeping your people happy is what keeps your people. Thats Financial Wellness. Put your employees on a path to Financial Wellness with prudential. Itso chantix can help you quitd slow turkey. Along with support, chantix is proven to help you quit. With chantix you can keep smoking at first and ease into quitting. Chantix reduces the urge so when the day arrives, youll be more ready to kiss cigarettes goodbye. 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This is the not spread but the yields they are close to record lows because treasurys are so cheap, low in yield and also because credit spreads in this level are very, very tolerant of richk right now. I do think thats comforting because this is the credit profile, much more in tune with the s p 500 companies in aggregate rep represent. I would say the market is more discerning, a little bit more intolerant of the worst credit but definitely on the whole holding together. Mike, thank you as always something important to keep watching. Up next key things every investor needs tkno ow heading to the new trading day, when closing bell comes back. But when a recall happens, perfectly good food goes to waste. Now, weve got away around that. Looks good. Were on target. Blockchain on the ibm cloud helps pinpoint a problem anywhere from farm to shelf. Its used by some of the biggest retailers everywhere. A nice wedge. So more food ends up on your table, is that daddys lettuce . Yeah. 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We are looking for more discussion of how worried the fed was about the volatility in repo markets will there be more clue base the plan talked about today to add to supply the reserves the chairman sounded upbeat on the economy this afternoon saying the expansion feels very sustainable. How much of that september meeting was spent on those uncertaintities to the outlook that eventually convinced the fed to cut rates now we know the committee is divided right now. The minutes could give a better window into how powell holds the members together back to you. Ylan, thanks for that mike thats the key, the division and seeing how that played out whether or not he is able to deliver an extra cut if thats what he wants. Right you see how the debate was characterized. What kind of movement you might see. Now, the economic numbers have on balanced softened since the meeting. If people said look we have to see evidence things are worsening before another cut then you are closer to the point right now. I think, look, the right now is market is confident. We are getting one this month. The debate rolls forward. What about the sentiment into tomorrow after today and accelerating the losses. A little bit off balance. I dont know what the market is waiting for except it wants this round of trade talks out of the way. Quit worrying about handy capping. And then well see were still in the anxious range weve been in since august or so. We close down 1. 5 on the s p fiechd ut out of time that does it for closing bell. Fast money begins right now. Live fl the Nasdaq Market site over looking times square this is fast money. Our traders on the desk. Tonight on fast, forget disney buy why tobagole could be the biggest threat to netflix. Well explain plus a trader says this stock could set up for a breakout process we bring you the name but a double whammy for the markets. Stocks finishes in the red as the u. S. Turned up heat on china. The s p 500 losing more than 1. 5 on the day. Eamon javers with us from the white house we are kic