Transcripts For CNBC Squawk Alley 20240713

Listening to him say i dont watch the stock market seems fanciful given that he tends to be firmer on his trade rhetoric when the market is close to alltime highs when he frames things these way i wait for the moment he stands up in an arena like alabama and says all those Treasury Bonds the chinese hold, how did they get it . They stole it. Thats where hes headed if hes around another four years, thats where its headed. Youve raised that point before it seems a natural conclusion and it would be totally in character. Not paying you back. Threatening not to pay back totally, right . Treasury. Remember this conversation because when he says it in front of one of his crowds, theyll cheer. Theyll cheer. Markets wont no, they wont. Brings up the mindset of President Trump where he looks at the stock market at record highs and says we can afford Something Like this today because were doing well thanks. Congratulations on paper back. Michael lewis. Good Tuesday Morning welcome to squawk alley. Im Carl Quintanilla we are in the midst of a selloff today all the major averages are lower by at least 1 dow is down 1. 5 jons exclusive with andy jassy in just a moment lets start with the markets the dow down 450 stocks down, bonds up. The Economic Data this week has not been all that great. The ism is underwhelming yesterday. Fidelity investment director of global macro and with us barkleys global head of u. S. Equity research. Good to see you. Good morning. Hi. Losing 3,100 has people thinking to themselves how much did we really pile on to fundamentals we thought phase one was going to get signed. Yeah, certainly the roller coaster of tariffs and trades are not phase one deals. The market did have a nice breakout out of a 21monthlong Holding Pattern. And at this point the top of that Holding Pattern is around 3,000 and change were pretty close to that well retest that. With a market that over the last ten years has gone up 17 per year and even since the valuation peak in 2018 has gone up, we need to take that in stride and accept that ups and downs are going to happen. In terms of the ism, it was weaker this week generally speaking once the ism has peaked and youre a year and a half later, the forward returns and the batting average start to really pick up as the market starts to discount a recovery i remain constructive the next 6 to 12 months how about you especially given that folks looking for Global Stabilization particularly in europe did sort of pin that to at least the lack of an escalation in trade rhetoric, right . Absolutely. So i think one of the reasons that we had this rally is the hopes of the resolution of the trade war. I would point out that if you look under the hood leaving aside the s p index, at the actual stocks that are more directly impacted. Investors are taking a wait and see approach 60 or 70 names directly impacted by the trade war that has not gone back to the april highs that we saw earlier in the year. Investors were taking a waitandsee approach that has been born out by recent developments so, maneesh, to dig into that further then, on a day like today its risk off. Treasury yields falling, gold up, you see utilities and real estate the best performers or the only that are green within the s p right now, are you saying that those are the types investors should park their money . I think were taking a mixed approach as you said the risk of recession the last few weeks has actually gone down cyclicals have outperformed. Its too early to switch to cyclicals. So we think the recession risks have gone down but were not out of the woods were taking a balanced approach we are long health care. Its good to take a bar bell approach and not completely swing for the cyclicals right now. Jurrien, the president says he pays more attention to the job market than the stock market and we are going to get a look at jobs later in the week. We know the run rate is down by a quarter from a year ago. Whats your outlook on that and into 2020 as well . It does come all down to jobs weve been in a global trade recession for over a year, a year and a half. Pmis did fall below 50 and some are starting to bounce our ism did not as was expected as you mentioned earlier ultimately the transmission mechanism from a trade or a manufacturing recession to an actual jobs recession would be when Profit Margins continue to erode because you have late cycle pressures on wages, et cetera, and that slowdown in profits juxtaposed by rising wages ends up forcing companies to lay off people. Thats how you get a general recession. Everyone is looking at the jobless claims those come out on thursday as they do every week and those numbers have been strong that is the latest indicator everyone will be watching. And as soon as it starts to tick up everyone will start to proclaim the recession i dont really expect it i think the consumer side remains strong and the feds three rate cuts along with pretty rapid expansion of its balance sheet, i think, give the market a justifiable sense that we are past the weakest part of the Economic Cycle and markets discount, this is why we see the p e go up to 18 times earnings though earnings are slowing because this is how markets work and i think this is what the markets are pricing in for next year it may not be a robust recovery but i do expect some recovery and that the jobs picture even though it will slow in terms of growth will remain intact. Maneesh, i know theres a lot of focus on 2020 given the fact were into december. I think back to last december it was so volatile. We saw that steep plunge in the major averages on christmas eve. Historically december is a pretty solid month we are two days into the month and were down more than 2 . Is there reason to be concerned that volatility is picking up again, that we could see something play out the way we did last december . I think the big difference, of course, is the reaction function of the fed. So back in september or last fall the fed was in a hiking mode and that is what scared the market at this stage now were seeing the fed is clearly in an easing mode or easing watch and so that risk is certainly not there. Now having said that if the trade war was completely to flair up again, then of course that would be a source with the risk we saw last december is not there. Its been interesting even as rates have gone up and down, im talking about the ten year, markets have held up quite well. The fed is alive and well meaning that if the data worsens then rates go down and if data is better equity market is again okay with that essentially the rate market is sort of holding the equity market up. One thing i would note this is fine as it is but as we are seeing in the past when the recession hits it gets knocked out. You still get a significant drop on the equity. That risk is there but thats not our best case for december gentlemen, thank you. Helpful with all the news in the last 48 hours. Lets head back out to las vegas on jon fortt who sat down with jassy earlier morgan, as you know amazon is the leader in the cloud and this in vegas aws reinvent is their big cloud event of the year. Andy jassy, the ceo of aws, is also the founder in essence of Amazon Web Services which really kicked off this cloud revolution we talked about a lot over 40 minutes. About amazons focus on helping big Enterprise Companies transition into the cloud, increasing cloud performance expect to hear jassy talk more about that in his keynote taking place right now. We talked about chinese equipment in networks and then just security in general because he doesnt see this as just a chinese equipment problem. We also talked about that jedi contract that the dod, the department of defense, awarded to microsoft about five weeks ago and that amazon is now contesting in court. He had some very sharp and specific things to say about that his first comments well get to in a bit and then theres the question of structure. Is aws ever going to be a completely separate company from amazon take a listen. Now i ask you this every year and you give me the same answer but i have to ask. Is amazon going to spin out aws in 2020 . No. I would be shocked if that was the case what i tell you every year is that i would never say never about anything having been at amazon for almost 23 years and been a part of so many things i would have never predicted. Ill never say never but there just isnt much need or incentive to do so companies spin out units if they dont want them on their Financial Statements or need the money to fund the growth of the new unit and neither are the case for aws i also think that customers shouldnt want to us spin out aws because what customers really want from us is they want more features, more capabilities, more services, things that allow them to move their Customer Experiences forward as opposed to if we spun out doing analyst calls and building a new hr system and things like that all sound very lovely i think its more investors, though, who would salivate at the thought of aws being valued on its own and the currency for buying other things is there any value in that were pretty famous for being willing to be misunderstood for long periods of time were trying to build value for our customers. A business that outlives all of us here. We think about how we build the company and how we evolve the company over many decades over any one quarter or a year. Pencils down. No need to adjust those models for a spinout, folks when it comes to the cloud itself and hybrid a year ago amazon, aws, announce this had concept called outpost, amazon equipment in data centers or corporate locations updated by amazon a hybrid approach. He talked about the importance of that. Listen these are Companies Like volkswagen and Lockheed Martin we believe a large number will use this to bridge the existing work loads that have to remain on premises and the data center for a while with the rest of what theyre doing lots of technology talking here as well as just the big shifts happening in economies around the world Lockheed Martin i heard him mention, really speaking to the level of security that aws has in place as well jon, were looking forward to the rest of the interview coming up later on in the hour. We do have more from aws Ceo Andy Jassy what hes going to say about the pentagons jedi. First, though, after the break its the navys largest ship building contract in its history. The ceo of Huntington Ingalls on that deal next and more. Stay with us ugh, another electronic signature. You have to print, walk, sign, scan, recycle, walk, email yourself. Really . More walking, try again, waiting, recycle, walk, email yourself, then get back to your day. Or not. This isnt working. Introducing samsung paperless workflow solutions. With the galaxy tab s6, you can sign Digital Documents onscreen, with a finger or your s pen. Samsung business solutions. Welcome back to squawk alley am the navy awarding the largest ship building contract in its history, a 22 billion deal with Huntington Ingalls to build nine virginia class submarines for the navy over the next decade. Ceo and president mike petters joins us now in a cnbc exclusive from Corporate Headquarters in newport news, virginia i know were sitting down to talk about the new Aircraft Carrier getting christened this news of the day, the fact you did just receive with General Dynamics this award for more virginia class submarines how will that impact the company . What does that mean . First of all, thanks for having me again today, morgan. Its great to be with you all. The contract last night establishes the rhythm for submarine production and helps us balance the Virginia Class Program with a startup of the Columbia Program and since theres significant overlap in our supply chain between the submarines and Aircraft Carriers, it goes well with two Aircraft Carrier contract we got back at the beginning of this year all of that pushes our backlog up to 50 billion. Wow and speaking of that Aircraft Carrier, the kennedy, its scheduled to be christened late they are week. The first in six years its a 13 billion ship. Lets talk about the significance of this milestone and what this class of Aircraft Carrier is going to bring to the navy that previous ones havent. As you know this is the second ship of the ford class. The ford class is a redesign of the Aircraft Carrier ship after 40 years of executing design if you think about all the things in your life that have changed over the last 40 years, weve been able to incorporate most of those into the daily activity of this ship. Things like using electricity for heating spaces instead of steam. All of that leads to reducing the Maintenance Cost of the ship, the manning on the ship. Weve been able to take advantage of technologies to make the ship more lethal in terms of sortie rate and all of that comes to bear with a 40year gap in design. Whats significant about the kennedy is we are now moving from the ford which was the first of the class into production and what that means is the first ship is as the lead ship its not just a Production Unit its a prototype where youre testing out your design, your training plans and labor plans and your supply chains and youre doing all of those things and on the kennedy weve been able to move past the prototype phase and into production which then led the success weve had on kennedy in terms of efficiencies, encouraged the navy to move ahead with another two ships after the kennedy. Were excited where this puts the program and it puts our business and helps put the navy on good footing for the next decade and that is getting a lot of attention earlier in the year as well to dig in more, mike, first in class, the uss ford the subject of fierce criticism, delays, ballooning costs, to be the source of the, quote, large cost overruns referenced by President Trump in his tweets about the former now former Navy Secretary Richard Spencer when he was fired last week as well how are you getting your arms around some of those issues and what does that mean in terms of production for these future ships . Well, in our discussion with the navy, we were pretty clear that the very first ship of the class is, as i said before, a prototype and youre testing out all of the things you think will work but then you have to adjust as you discover Going Forward what did work and what didnt work what we did then is based on the things we saw in the first ship production in the building of the first ship we made significant Capital Investments to reduce the cost of the ship and allow us to put it together more efficiently were very happy with the returns were getting on that and then we had a discussion with the navy and secretary spencer led the effort to move how do you build it better his leadership drove the issue to get the two carrier buy done. Its been a step process from prototype to buy it smarter and i think thats why were where we are today. In focus with President Trump and other leaders meeting in london right now, increase defense spending from allies has been a growth driver for a number of defense contractors. How are you thinking about the opportunity. Defense, i understand the international piece. For ship building its different. Countries want to build their own ships. Theyre happy to talk with our designs and leadership skills, they want to have the place they build ships in country the international piece of our business is very, very small its not in ship building. Its over in our services piece where we do a little bit of work there internationally. Its not a significant part of who we are as a company. We got more comments from President Trump regarding china and ip theft in the midst of this trade deal trying to be worked out right now i know this is a topic we have discussed this idea. Its been what happens most significant significantly documented where defense is concerned how do you think about that . How big of an issue is it and would you expect some sort of trade deal to change that Security Threat . Thats a really good question and i think the jury is out. Im not sure the trade negotiations go handinhand with the cyber issues that weve been dealing with from a security standpoint. We have to work really hard to protect our designs from any sort of intrusions and then where we have to move to is be able to protect our suppliers as well. To our way of thinking thats a whole separate issue from any sort of trade agreement that we might be making with the chinese. We know weve been under attack from multiple sources for many years. Companies have gotten better at this weve gotten better at this. That threat changes every day. And so we continue to step into it and try to stay in front of it mike petters, thank you for joining us the ceo of Huntington Ingalls. Congratulations on the kennedys christening floating city, 4,660 personnel, 75 aircraft. It will be absolutely massive. Looking forward to it. Thank you. Thanks for having us. We continue to watch the selloff, the dow down 405 the worst twoday slide since early october and on pace for the worst week in about four nths hi, my name is sam davis and im going to tell you about exciting plans available to anyone with medicare. Many plans provide broad coverage and still may save you money on monthly premiums and Prescription Drugs. With original medicare, youre covered for hospital stays and Doctor Office visits, but you have to meet a deductible for each and then youre still responsible for 20 of the cost. Next, lets look at a Medicare Supplement plan. As you can see, they cover the same things as original medicare and they also cover your medicare deductibles and coinsurance. But they often have higher monthly premiums and no Prescription Drug coverage. Now, lets take a look at humanas Medicare Advantage plans. With a humana medicare plan, hospital stays, Doctor Office visits and medicare deductibles are covered. And, of course, most humana Medicare Advantage plans include Prescription Drug coverage. In fact, in 2018, humana Medicare Advantage Prescription Drug plan members saved an estimated 7400, on average, on their prescription costs. Most humana Medicare Advantage plans help you stay active and keep fit by including a Silver Sneakers Fitness Program at no extra cost. And, you may be able to save on dental and vision expenses, because coverage is now included with most humana Medicare Advantage plans. You get all this coverage for as low as a zero dollar monthly plan premium in many areas. And your doctor and hospital may already be a part of humanas large network. If you want the facts, call right now for the free decision guide from humana. There is no obligation, so call the number on your screen right now to see if your doctor is in our network; to find out if you can save on your prescriptions and to get our free decision guide. Licensed humana sales agents are standing by, so call now. European markets will close in a couple minutes here seema has the reaction overseas. European stocks looking to avoid their first backtoback drop the steel mining stocks that are highly volatile. Trump administration latest salvo towards france is weighing on their biggest luxury and cosmetics companies, lvmh, hermes down 2 and 3 . Loreal also down. They make up the benchmark index and contributed roughly 18 billion in combined u. S. Sales last year. The Strong Demand in china has lifted shares this year. Both headed for their best years since 2011 a sign the luxury market is holding up in the face of ongoing macroeconomic concerns the onset though, comes at a crucial time in october the u. S. Imposed tariffs on 7. 5 million of goods including whiskey and cheese this could be just the start lighthizer saying they are exploring taxes in australia, italy and turkey back to you. Seema, thank you. Time now for a news update sue herera has that. Indeed i do. Thank you, morgan. Good morning, everyone here is whats happening this hour the early numbers are in on cyber monday and shoppers spent an estimated 9. 4 billion in online sales thats a record high boosted by late night shoppers spending almost 3 billion between 10 00 p. M. And 2 00 a. M. Russian president Vladimir Putin is criticizing natos continued expansion. He says it is pointless given the absence of a threat from moscow following the collapse of the soviet union in 1991 putin was speaking at a meeting of Russian Military leaders while President Trump was meeting with nato Member States in london. Backtoback snowstorms wreaking havoc on the northeast. The Winter Weather blamed for at least eight deaths, 240 flight cancellations, and 1,300 delays in the u. S residents are clearing as much as two feet of snow from their cars, their homes and their walkways and Tokyo Olympic organizers unveiled a replica of a satellite, a Tiny Satellite that will orbit the earth during the 2020 summer games. It includes miniature animation characters as well that you see right there. Pretty cool. That is the news update this hour carl, back down to you when we come back Amazon Web Services Ceo Andy Jassy, a lot more from jons exclusive with the number two at amazon and of course were all over the selloff session low down about 450 were not too far away from that turn on my tv and boom, its got all my favorite shows right there. I wish my Trading Platform worked like that. Well have you tried thinkorswim . This is totally customizable, so you focus only on what you want. Okay, its got screeners and watchlists. And you can even see how your predictions might affect the value of the stocks youre interested in. Now this is what im talking about. Yeah, itll free up more time for your. Uh, true crime shows . British baking competitions. Hm. Didnt peg you for a crumpet guy. Focus on what matters to you with thinkorswim. Welcome back to squawk alley. Bob pisani on the floor with the biggest movers amid todays push to the down side bob . Reporter tariff threats on two fronts, french goods and maybe not a deal this year so you can see a very predictable reaction these are the big ones here, nvidia they move on trade news. Transportation on the weakside as well. Fedex and ryder, caterpillar, all down this is all very predictable on negative news on the trade front. Big move in tenyear yields here 10, 11 basis points. All the banks are down here including the big regional banks. They have all had a great year so far a little bit of rockiness today. European luxury stocks lvmh, richemont, hermes on the weakside a little bit of a bounce off the lows but an issue. A lot of new lows. Oil is up 20 . Apache, whiting, some of the smaller energy names all hitting 52 week lows today so remember whats moving the market the fed is not tightening. Thats a big mover the trade war, we dont know how to characterize this, is it an uneasy truce will the markets be satisfied with no new tariffs on december 15th, keeping the existing tariffs, and no deal going into the new year the market is struggling with the concept now. If tariffs, additional tariffs are on december 15th, that is not priced into the market that would be an additional negative the Global Economy, a great note out this morning a faint pulse. Thats what you mean when you say, okay, were bottoming but are we really rebounding its possible you could get an lshaped recovery and not a ushaped recovery. Two things were grappling with. Finally on the steel stocks, a big deal announced Cleveland Cliffs buying ak steel. It makes sense different parts of the steel business but can you see the steel stocks have essentially become small cap stocks. Its just like many of the retailers, slowly but surely declined into small cap territory. Cleveland cliffs is a 2 billion company. Ak steel is below a billion dollars. Allegheny 2 billion u. S. Steel, 2 billion u. S. Steel, the only stock in the s p 500 thats a steel stock is nucor and it has a substantial market cap thats like at the low end of a big cap stock. Yes, we keep talking about these companies. Many of the retailers have devolume fd and dont have a big impact on those indexes that we follow very carefully. Back to you. Lets get back out to vegas and check in with jon fortt who sat down with andy jassy earlier at the 2019 reinvent conference hi, jon. Hey, carl weve been talking about the cloud a lot on squawk alley and a big part of whats going on now is big game hunting these Companies Going after logos. Not only to get them into the cloud but more deeply engaged in the cloud. No bigger than the department of defense, that jedi cloud contract that people thought was amazons to lose and they lost it they lost it to microsoft. They are taking it to court and i asked andy jassy about that to see how specific he would get about what he thinks is wrong with the process he got pretty specific, listen we dont believe it was adjudicated fairly anybody who does a detailed apples to apples comparison of the platforms dont come out in the same spot that procurement did and most of our tus mers tell us were a couple years ahead. There was significant political interference when you have a president , it makes it difficult for Government Agencies to make objective decisions without fear of reprisal. Thats dangerous and risky for our country. So is your position that its impossible that microsoft won this fair and square or there are real questions given the president s comments and arguably interference . I think if you look at the details of it which i obviously know the details of it a little bit differently than other people, but its just hard to very difficult to look at the comparison objectively and come out the way the dod did. What kind of details are you talking about . Im pretty aware of the respective components and features and capabilities and what the requirements were and so i think its quite difficult to end up making that decision that they did in a fair and objective way. Now tell me and tell the viewers, i think this is important, big picture why this matters when it comes to a country like the United States, a process like military contracts, why is this fundamentally important . I think that the security of the United States, the National Security of the United States, is quite important not just to the u. S. But to the world as a whole when you have to make when you have to do work to modernize your Technology Capabilities as the dod does you need the best possible Technology Platform to build what you need to build on top of i think not just for the National Security of the country but also if you think about the thousands of decisions that we have to make across our government that are important for our country, those decisions have to be made on objective criteria and be free of political interference were not going to make the right decisions for the country. Did you know as soon as this decision came down that you were going to take this to court . Not the second we heard the decision you have to look at the details and you have to understand what the rationale was, and there was a lot of data that in any one of these procurements you get after the decision was made. After we looked at the data carefully there was little question i think we have to shine a light on what happens here how much is he a part of the project because he was a central part of the issue, it seems, as far as the president was concerned in talking about amazon and the possibility that really did influence this process. Like everything at amazon jeff is aware of whats going on and has a say in whats going on and is supportive of the decision we make andy jassy there not tiptoeing around it. President trumps interference, he says, is the central issue why they have a problem with how the jedi contract was awarded. Those four videos they submitted certainly part of the evidence theyve put together on this jeff bezos did weigh in and agree with the rest of the teams decision to take this to court. Hes saying its not just a matter of National Security but a matter of Global Security based on the United States important position we also talked about a lot more including the Chinese Technology in networks. Amazon deals with a lot of Different Companies all over the world, so i asked him about that specifically he said its not just a matter of china, its vetting systems to make sure they are secured. Listen companies have to be very thoughtful about what software they use and what equipment they use everywhere and, by the way, its not just china. There are lots of places you have to be thoughtful about it we dont use chinese equipment or software. Why is that over time almost all the software that we use weve built ourselves. Even in the network we work with some players like cisco, but we have also built a number of our own routers. Over time for scale and cost reasons weve had to develop a lot of our own equipment we design our own hardware, our own chips and build our own chips. But i would also say that, as i mentioned earlier, anything we bring into facilities regardless of which country it comes from we have a very rigorous and detailed and careful process to inspect and you have to do all kinds of testing to make sure that what youre getting is what you think youre getting so much of this conversation around chinese equipment and Chinese Technology, i think, and i think you alluded to this, you need to protect against everything and everyone and shouldnt there be a way, an objective way of Testing Technology and testing equipment to make sure its safe otherwise if were just looking at one particular country deciding theyre the problem, there are a couple countries over there that maybe could slip something bad into the network when youre not looking. Its Like Software testing. Any quality testing there are loots of standard ways you can test there are lots to guard against. Its not one set of ten tests you can run and say youre good. You have to have a very full and row best set youre running all the time on your software and hardware i think there are certain countries where you see more of this espionage type of behavior and you have to be thoughtful if youre going to consume products or parts from those countries. If you have the right set of tests and are diligent you feel confident you are doing that on the amazon side, yes we also talked about Lessons Learned from hq2, the search in new york and the d. C. Area for new facilities of course new york backed out of that amazon backed away from new york after encountering trouble with the local community. We talked about his outlook on the Global Economy given the fact hes investing in sales and marketing, talked about that on the Earnings Call and whether that is a call on how the Global Economy will look in a year or two you can see the entire interview on line. Andy jassy clearly has a lot to say, guys. Great stuff, jon. Certainly making a lot of news today especially for those of us that have been following all of this jedi contracting controversy for months on end now. Appreciate it. Jon fortt out in las vegas stocks losing ground in todays session with the dow near session lows. Down over 400 points a few moments ago. More on todays selloff straight ahead nice rock. Its time to drop gold. Go digital. Go grayscale. I wouldnt be here if i thought reverse mortgages, took advantage of any american senior, or worse, that it was some way to take your home. Learn how homeowners are strategically using a reverse Mortgage Loan to cover expenses, pay for healthcare, preserve your portfolio and so much more. A reverse Mortgage Loan isnt some kind of trick to take your home. Its a loan, like any other. Big difference is how you pay it back. Find out how reverse mortgages really work with aags free, noobligation reverse mortgage guide. With a reverse mortgage, you can pay whatever you can, when it works for you, or, you can wait, and pay it off in one lump sum when you leave your home. Discover the option thats best for you. Call today and find out more. Im proud to be a part of aag, i trust em, i think you can too. Im scott wapner top of the hour today december off to a rocky start President Trump signaling he may not do a trade deal with china before next years election. So is that a game changer for your money well debate that plus what is the future of the fang trade stocks too low and too high and just right one of the biggest battleground stocks in this market, tesla someone says its a must own why isnt anyone on the Investment Committee own it . That and more at noon. Morgan, were ten away see you in a few looking forward to it, scott, thanks over to Rick Santelli and the santelli exchange. Reporter thank you i look up at the board and see 169. Were down 13 basis points the notes starting october 1st weve been talking how heavy it looks and how we failed at the 190 level. This is the november 1st start that looks heavy its about the tweets and not signing phase one. I get it and theres no doubt the machines just love it. We call this day trading and markets were volatile then, too. Traders like that. Certainly weve gone to risk on and off and part is because of trade, the president and tweets. We couldnt get rates up a lot why . We had a chart last week, all the flows, took etfs and mutual funds since the end of october youd find an exodus of a trillion dollars plus. 100 billion. What does that mean . The markets will act like theyre acting with the baton from risk on to off i personally think that much of that was actually data driven think ism. Might not be the biggest number but the market thinks its an important number and globally its an important number once that handoff occurred it shouldnt be shocking the markets can be pushed easier a lot less neglect testify rates ahead anyway you know, this morning the ecb representative for italy was out there talking about how horrible negative rates are pimco has always been on it like i have, like many have negative rates they put it quite succinctly squeeze profitability. They depress market returns and they create hardships for the likes of those who need to accumulate and match longterm assets to liabilities like Pension Funds and insurers were in a place where theyll be buying securities i dont know where europe will find them all. Germany, you realize that in 2018 germany had debt to gdp their economy is slowing anybody who doesnt think theyre going to be running bigger deficits and adding stimulus thats where a lot of bonds will be coming from. Carl, back to you. Rick santelli a market flash here on semis dom chu has that semiconductors one of the worst within the s p 500 so far today. Its the last couple weeks we see a move to the down side. The etf that tracks the big stocks is a record high lef. Back in november, so to keep that in mind thats the context here some of the names moving the markets to the down side, take a look at the ones we all know micron off 3. 5 . Nvidia, Applied Materials all up or down about 2 to 3 a real move down lower on those trade headlines. I would point this out, carl, if youre looking for one of the Underperforming Industries today, check out the peripheral makers like apple, western digital, sea gate, hewlettpackard. A lot taking it on the chin off between 1 and 3 . Big moves in computer, software and chip stocks. Back to you. Apple sill up 63 the dow down 407 back in three minutes. Hi, my name is sam davis and im going to tell you about exciting plans available to anyone with medicare. Many plans provide broad coverage and still may save you money on monthly premiums and Prescription Drugs. With original medicare, youre covered for hospital stays and Doctor Office visits, but you have to meet a deductible for each and then youre still responsible for 20 of the cost. Next, lets look at a Medicare Supplement plan. As you can see, they cover the same things as original medicare and they also cover your medicare deductibles and coinsurance. But they often have higher monthly premiums and no Prescription Drug coverage. Now, lets take a look at humanas Medicare Advantage plans. With a humana medicare plan, hospital stays, Doctor Office visits and medicare deductibles are covered. And, of course, most humana Medicare Advantage plans include Prescription Drug coverage. In fact, in 2018, humana Medicare Advantage Prescription Drug plan members saved an estimated 7400, on average, on their prescription costs. Most humana Medicare Advantage plans help you stay active and keep fit by including a Silver Sneakers Fitness Program at no extra cost. And, you may be able to save on dental and vision expenses, because coverage is now included with most humana Medicare Advantage plans. You get all this coverage for as low as a zero dollar monthly plan premium in many areas. And your doctor and hospital may already be a part of humanas large network. If you want the facts, call right now for the free decision guide from humana. There is no obligation, so call the number on your screen right now to see if your doctor is in our network; to find out if you can save on your prescriptions and to get our free decision guide. Licensed humana sales agents are standing by, so call now. We call it the mother standard of care. Its how we care for our patients like job. His team at ctca treated his cancer and side effects. So job can stay strong for his family. Cancer Treatment Centers of america. Appointments available now. The president directly addressing the selloff today while in london this morning take a listen. Let me tell you, we took it up about 16,000 or 15,000 and now its almost to 30,000. Its going to be at 30,000 no, i have to tell you if its not going to be a good deal, im not signing a deal its peanuts compared to what we have picked up record numbers in our stock markets, so thats okay thats the way i feel. I have to make the right deal. Hes now on his way to tea with the prince of wales and the duchess of cornwall. We are joined ahead of that meeting. Steve, ive seen some figures that say he spoke to the press for a total of like 123 minutes today alone. Reporter yes, the president has talked about a whole host of issues not just nato as well his host is amidst a general election campaign. We have a very key election for the country and for brexit next thursday one thing the president has been very clear about is not getting involved in a whole conversation about who he believes should be number 10 downing street off that as well and of course the National Health service and where the u. S. Pharmaceutical companies will get involved trying to purchase he has avoided that in the 123 minutes. He have talked about nato. There are a whole host of rivalries from president erdogan and mr. Macron and the row the president has had about the organization being brain dead. So far the president being incredibly diplomatic though he has been taking credit for the big increase in spending weve seen in nato countries since he took over as president he was talking about 130 billion so far 400 million more to come. Back to you. Kayla, the s p is down 1 and it is trade, trade, trade. Thats dominating. Its not just the china trade headlines, its things like potential punitive duties on france for those Digital Services tax, too, right right its safe to say President Trump resets the agenda at multilateral summits like these instead of security stuff as we were expecting and as we were briefed on the headlines that came out of most of these bilateral, the usmca, the Digital Services tax and, of course, comments about the stock market where he said thats okay that its down and he doesnt want to make a bad deal with china. Of course we have the tariffs on 160 billion in chinese goods coming in a couple weeks time the clock is ticking on that one, carl. Our thanks to Steve Sedgwick as well. After the bell we will switch to Corporate News as we look for work day and sales force, get an update on whats happening with the cloud coming off dream force last week. A lot to watch and the judge will handle some important questions, too lets get to the half. Appreciate it, carl. Im scott wapner did the president s trade turn just kill a yearend rally for stocks it is noon and this is the Halftime Report. Stocks tanking again with the markets up more than 20 this year, should you take the money and run . Five questions about f. A. N. G. , what they reveal about valuat n valuations, growth, and one stock to own in the group. A new call on tesla naming it a must own stock well debate this battleground stock in our call of the day the Investment Committee is ready to go. The Halftime Report starts right now