Its the first time anyone ever said that to me. I said who is this guy hes the governor of iowa. He just said dont say bad about china. So i had to rip up about half of my speech. Right . I said why he said we do a lot of business. Ive been dealing with china for 35 years with corn and Different Things he told me a story that was amazing. 35 years ago when i started, i met a man named xi he wasnt president it then. He was a young man and the governor came back he told his wife, he said this is 35 years ago and its documented. He said, i just met the future president of china and nobody thought much about it you know what . 28 years later, you turned out to be right. And you have been an incredible ambassador and they like each other so much so when it came time to pick the important position of ambassador, i said havent you had enough after 24 years being governor of iowa he said if you want me to do that, and its been a great youve been a great help thank you very much, ambassador. I appreciate it. Great job. Nobody could have done that job better i think i can go on the opposite side of the spectrum, perhaps, from the governor. Our trade adviser peter navarro. Right, peter hes a little different. We have all types. Deputy chief of staff chris l lidell has been with us a long time and has done a fantastic job. Had a great business career. Legend on wall street, wilbur ross where is wilbur . Wilbur, thank you. A man who knows agriculture as well as anybody in the world we were looking for an agricultural person. We wanted to go political and we were looking for somebody that would fit perfectly. And sonny came in and it was over i learned more in that half hour in agriculture, right, than i ever could have learned possibly sonny purdue has been wonderful and were taking care of our farmers. That, i can tell you thank you. Thank you, sonny and a woman, transportation is going very well. Were getting approvals down now from 21 years to two years it may get rejected for environmental or other reasons lindsay, we have it down to two years, a highway that would have taken 19 to 20 years to get approval we have it down to two we want to get it down to one. If it doesnt work, were going to say build it. But were not going to wait 22 years to find out you cant build the highway. She has been fantastic, secretary of transportation, elaine chao. Thank you, elaine. Thank you. So we have tremendous numbers of people here. And im saying do i introduce th them i think i should this is a big celebration. By the way, some of the congressmen may have a vote, and i dont its on the impeachment hoax so if you want to go out and vote its not going to matter because its gone very well but i would rather have you voting than sitting here, introducing me to introduce you. They have a hoax going on over there. Lets take care of it. Where is Kevin Mccarthy . The great Kevin Mccarthy okay, good im glad can i be honest . Im glad i like it much better that way and the house folks, 1950 and we got three democrats and one of them actually left the democratic party, came over republican and what a job youve done i just want to thank you all really tough i love that. So we have some incredible people in the audience i would like to introduce a few. Two very good friends of mine, shelden adelson, miriam adelson, thank you for coming theyve been tremendous supporters of us and the Republican Party theyre great people a man who always like immediate, because hes smart, so smart the great lou dobbs. At first, he said hes the best since reagan then he got to know me more and more and he said hes even better than reagan then a few weeks ago, somebody told me and i watch all the time he has a very important show, actually tremendous audience. Very everybody in this room watches. Lou dobbs, hes the greatestof them all i said, does that include washington and lincoln and he said yes. Now, i dont know if he was for real, but that the great lou dobbs. Thank you very much. [ applause ] thank you great show, lou. And a man who everybody knows. He knows more than probably everybody in this room put together he has seen it all and he made a statement to jared jared came in and said, you know, Henry Kissinger told me, how did the president ever pull this off i said, can i quote henry on that henry is outstanding and when henry is impressed with something, im impressed henry, were impressed with you. Thank you very much for being here thank you, henry thank you. [ applause ] and michael and susan pilsner, thank you very much youve been saying some fantastic things about china and about us we have a Good Partnership this is going to be something thats going to be very special. Well talk about it in a second. A friend of mine, Steve Schwartzman is here. I know, steve, you have no interest in this deal at all im surprised youre not sitting on the ledge of the stage. Very good job, very Good Relationship with china and very Good Relationship with us. Nelson peltz is here very good friend of mine hi, nelson what are you doing, sitting all the way back there, nelson how is General Electric doing now . Hell straighten it out. Youll vaten it out. He came in nice and late he didnt get in too early, thats for sure. Hank greenberg is here hank if they took care of hank, they wouldnt have had the problems that they had. Where is hank . Hi, greenberg. O hank if hank stayed there, like he should have, you wouldnt have the problem that you ended up having with our economy, but its great to have you, hank thank you so much. We have some tremendous senators here and some really incredible peop people i just want to say if i miss your name, stand up. I will promise to say t a lot of people wanted to be here a senator who has been new to the game, and he took it up so quickly and so easily. And he ran a race that was undoable the person he ran against was unbeatable nice woman, heidi, but unbeatable and then kevin kramer said i can beat her i think you only won by 12 points, right . He said hes the only man in north dakota that can win. And i said well do it i him in my office three times kevin, you have to do it i said hes doing it he turned me down. Then he came back again. This time i know hes doing it he called me back, sir, not going to do it i never give up, do i . Instead of being a congressman, hes a senator youve been great. Thank you very much. Kevin cramer mike krepo, a friend of mine these are all warriors thank you very much, mike. What a job you do. Mike is one of those guys that goes unsung, but behind the scenes theres nobody sharper, smarter. We all respect you and love you, every one of these people. Thank you very much, mike. Appreciate it. Steve, same thing i can say for my steve they have a hell of a Football Team how did they do this year . Are they going to be back . They won it again . They have a good team. They have a good team. Joni earnst, you got ethanol so you cant be complaining, right . Steve, thats good for you, too. You know, joni would call me, along with chuck grassley. They would call as a tandem. You cant beat the two of them all they want to know about is ethanol, ethanol we got it done deb fisher, same boat. You want that ethanol for nebraska a friend of mine, Lindsey Graham he has become a great friend of mine outstanding man. He loves our country he really does love our country. He works like hell do you do anything other than politics he likes golf, too he likes golf, too much better golfer than people would understand he likes golf. Hes a great guy you get it done. He brings people together. Chuck grassley where wheres chuck . Stand up for a second. This guy is the toughest guy he can Say Something in a nice manner and everybody is afraid right . He made comechoke during a hearing. He said did you leak anything to the press . What, what, what comey choked like a dog. And he was being nice when he said it. Chuck is outstanding, unbeatable between you and the governor, those are two pretty good ones, right . Unbeatable under any circumstance he makes the rounds like virtually any night. I think you have never still missed a vote. Have you ever missed a vote . Huh . 93. He was in my office a month ago. I thought it was very rude he said, sir, im sorry, i have to leave i was right in the middle of the meeting. He said why . He said because i have to vote and ive never missed a vote how many years he said 1993 thats a long time i said you know what go leave thats a good record to keep hes a solid, reliable, unbelievable person and hes a friend of mine so, thank you very much, chuck and let them know also about that ethanol, chuck. We brought home the ethanol, man. When you have those two calling. They were not nice about it, jerry moran. I want to tell you they were not nice about the ethanol, i want to say that. And with what he did, working very closely together with the vets its incredible whats happened with what we approved on choice. Its made a whole big difference you dont hear complaints about the va anymore do you notice . They go out and see a doctor if they have to wait two months or two days, they go out and see a doctor jerry moran, folks he did a fantastic job rob portman, great friend of ours from ohio rob, fantastic job i just left ohio they love you. They love you there. Youve done a fantastic job. And you are my friend. Rob portman. Thanks, rob. Pat roberts, a man from kansas, who is going to be leaving us. I cannot believe that youre not run ining again you have at least, at least another 12 good solid years in the senate if you wanted them. You have to do it. Youre sure, right okay he has made that decision. Pat, thank you very much this is very important to pat and to mike rounds, because whats happened here, if you look, its so much about everything you stand for, especially the farmers and the farmers are going to be so happy. Where is mike rounds mike, mike, stand up, mike hes another one he was brutal to me. He would call, ive got to get this done. Youve got to get it done. Right . Thank you very much, mike. Fantastic job. And dan sullivan from the great state of alaska. I stop there every time i can, right . And i won by a lot they like me in alaska, right . But they like you, too, dan. Thank you very much. Kevin mccarthy, as you know, left for the hoax. Well, we have to do that otherwise it becomes a more serious hoax and mark meadows, a friend of mine, right from the beginning thank you, mark, very much special guy, special friend. Great wife, too. His wife supported me long before him, but he thinks i dont know that. She went on women for trump when it wasnt so fashionable, like in the worst day of my life, she was doing women for trump tours with 50 women on buses all over the great state of North Carolina shes fantastic. Buchanan, thanky much great job youve done. Mike conaway thanks, mike thank you, mike. And, by the way, christy, thank you for being here i didnt know you were going to be here. Thank you. Stand up were going to do a big fireworks display, right mt. Rushmore i think im going to try to be there july 4th the governor called. She ran a great race tough race that was a tough competitor you had, right a big star and but she was a bigger star, it turned out, lindsay do you think we can get fireworks back at mt. Rushmore they havent been there 12 years i said why environmental reasons. You mean you cant have fire works because of the environment . Yeah, environmental reasons. I said what can burn its stone its stone nobody knew why. They just said environmental reasons. I called up our people and within about 15 minutes we got it approved and youre going to have your first big fireworks display at mt. Rushmore, and ill try to get out there if i can, okay . Right . That will be great thank you very much for being here thanks, christy. Mike kelly, wheres mike mike, thank you very much, mike. What a friend. Drew ferguson, what a friend these are great people, im telling you. Darren lahood. Darren, thank you very much, darren great job. Michael mccaul, you did a phenomenal job with your speech on the floor that was incredible. Very inspiring patrick mchenry, number one hes a great guy. Number two, he has the best name in politics. If i had that name i would have won 20 years ago patrick mchenry. A man who has got such courage, honestly, he deserves a medal. Hell probably get one we still have to win to get medals, right . We cant get medals if we dont win. This guy has never lost in his life he is so tough and so smart, devin nunes. Stand up, devin. Everybody knows him. What they put him through. What these phony people, what these dirty cops and all the others put you through and, man, you survived it better than ever, and everyone respects you. Even meadows respects you, and he respects very few people. So, thank you, devin, very much. Great job. Adrian smith thank you, adrian. Thank you very much. And dont feel again, you guys are all set i introduced you youre going to hear some great things about china and also youre going to hear some great things now becausewe have a whos who of the world of business with us today david apney of u. P. S where are you, david you can stand up anybody wants to, if you dont want to. If your company is not doing well, you may not want to stand up uncht p. S. Is doing very well. There will be a couple that will sort of slink back into their chair, pretend theyre not here. Great job youve done, david darius adamchick of honeywell. Great equipment. I have a lot of it i use a lot of it. The country uses a lot of it a. J. Of mastercard thank you, a. J josh bolton, business round table. Thank you, josh. Great job. David calhoun. He has a very easy company to run. He just took over boeing where is david stand up, david. Not his fault. He just got there. Youll straighten it out quickly, please . I have no doubt. Its a Great Company les daniels. Dan damico, weve been fighting for years, i want to say 30 but 25, 30 years took a little change at the top, didnt it . Youve been a warrior for g getting really taken advantage of as a country and youve been a warrior, i appreciate it dan and i, it was a fight of two people against the world tom don hue, u. S. Chamber of commerce where is tom thank you, tom great job. Brian duperalt of aig. You know that company, hank . Have you ever heard of aig, Hank Greenberg . Thank you very much. Appreciate it, brian mary erdos, jp morgan chase. They Just Announced earnings and they were incredible where are you . They were very substantial will you say thank you, mr. President , at least . Huh . I made a lot of bankers look very good, but youre doing a great job. Say hello to jamie i think were seeing him tomorrow nancy falatico of ford nancy, where are you hi, nancy. So young so young thats very impressive thank you very much. Youre doing a good job. Jim fitterling, dow chemical Incredible Company jim . Thank you, jim jack fusco, shanier. Great. Meg gentle congratulations. Ken griffin, citadel what a guy he is where are you, ken where the hell is he trying to hide with some of his money. Look, he doesnt want to stand up where the hell is ken . Steve, youll stand and hes very quiet about it. Hes here some place he just doesnt want to stand. Harold ham he puts a straw into the ground and oil pours out. Its true. Other guys spend billions and billions of dollars and cant find oil this guy takes a straw, goes like this, and oil pops harold, my friend, he has been with me from the beginning, right, harold . He was with me the day i came down the escalator with our first lady by the way, do i see john thune in this audience how the hell do i not introduce john they didnt have your name down. I dont believe it will you stand up . What a great guy he is i also see kevin brady thanks, kevin. Great job on the tax cuts. Al kelly, visa al kelly al kelly, thank you. Ryan lance, conoco phillips. Ryan, great. Youre doing fantastically well. Youre doing fantastically well, thank you, mr. President dont worry about it dont feel guilty. Alan mcdonald, Citi Bank Citi bank. You brought that back so far i remember seven, eight years ago. Citi bank is doing fantastically well raymond mcdaniel, moodys. Good are you guvg us good ratings, please okay were doing pretty good, right sanjay marada of micron. Incredible job youre doing. Thank you, sanjay, very much Steve Mellenkopf qualcomm they had a merger. I said they should let that go by i called up president xi they rejected it, remember they accept ed it. By that time you were off to another deal you didnt even want it. Nobody else could have done that, right . But you could have had it. Jim morrison of jeep what a great brand jeep is what a job theyve done. That say great brand and congratulations. Larry nichols, devon energy. Larry, thank you, larry. Great job. These are great people jason oxman iti. Great job youre doing scott shenkle, ebay. I sign things the next night, i see them on ebay, theyre sold for a lot of money sir, could i have you will you sign my sneaker . Yes. Then two nights later i see it on ebay selling for 5,000 i say, what kind of people are these, lindsay sometimes its the senators and the congressmen that do it gary shapiro, cta. Great job, gary. Greg smith of boeing also and greg, get that going work together. Get it going you know, boeing makes a tremendous portion of our gdp. I had no idea it was such a big company. I mean, i knew it was big but it can have up to half a point of g gdp, some people say more. Weve got to get that one moving fast and its going to be better than ever, i think mike somers, api mike, thank you, mike. Paul taylor of fitch thats another good ratings group. Are we doing okay at fitch good otherwise i wouldnt have introduced you Robert Thornson newscorp where is rupert . Is he not here i cant believe it is he the greatest, though, or what he was going to get 40 billion for his thing. He sold all the stuff he didnt want he sold it to some group that doesnt like trump as much thats the only problem. But he was going to get 40 billion and said, i dont know, they keep bidding this thing up. They ended up paying, what, 75 billion . And he kept the best stuff ruperts doing right, yeah rupert is fantastic. Thats family is a great family. Say hello, robert. John thornton. Where is john . Wheres john john is great. Good job, john thank you for all the help, too. Great job, john. Jay timmons. Thank you very much. Thanks, jay. Steven vaughn, king and spaulgd spalding i could use some good legal advice i just have to suffer through it the way i have all my life somewhere along the line, they must be pretty good, right jonathan ward, Atlas Organization jonathan, thank you. Great job youve done. Kevin walsh. Kevin. Wheres kevin . I dont know, kevin. I could have used you a little bit here why werent you more forceful when you wanted that job why werent you more forceful, kevin . Youre a forceful person in fact, i thought you were too forceful maybe for the job and i would have been very happy with you but kevin, thank you for being here you understand that very well. Right . Bothers me when germany and other countries are getting paid to borrow money. This is one i dont know where that all leads but we have to pay were the number one in the world, by far, and we have to pay for our money. Our Interest Rates are set high by the fed our dollar is very high and relatively speaking, but when other countries get literally theyre under, they have negative rates, meaning theyre under, they get paid i love this. This concept is incredible again, you dont know where the hell it leads, but you borrow money. When you have to pay it back, they pay you this is one that i like very much im going to talk to you about that, lou dobbs. So were set at two. Tell me why are we paying and other countrys are getting money when they get paid back . I really want to know who are the people who buy this stuff . Who puts money into something when they say this is a guaranteed loss . Its a whole Different Group of people that i know glenn yonkin of carlisle great group. So for decades well dip out of the east room of the white house. We do expect the signing of the historic phase one trade deal in a matter of moments. As you can see, the president has spent the better part of the last half hour introducing the folks in the room, a collection of ceos, members of wall street as well that all of you are familiar with, kevin griffin, nelson peltz among them. The president calling phase one a momentous step in the future of fair and reciprocal trade together we are righting the wrongs of the past the dow topping 29,000, looking for its first close above that historic level today, another day where all three of the major averages have hit record highs the Investment Committee is in front of me. Stephanie link and joe teranova. Pete, give me your broad thoughts, a day when well do the signing, we expect, in a matter of moments. Well take you back to the east room when, in fact, liu he and the president are sitting at the table. The bulk of the tariffs will remain thats very important, too thats part of this whole thing, scott, that stands out for me. Youve got to keep the pressure on just because youre signing a deal doesnt mean everybody is going to play by the rules this is something that keeps people in check. Thats kind of the takeaway. You know, if we bounce back for just a second, the earnings going in today were interesting. The market was relatively flat, some up, some down United Health is unbelievable. Looking aat what theyre talking about here and seeing the people all in that room right now, thats amazing you mentioned a few names but this is wall street. This is the top 100 Companies Generally are there, listening to the president as hes making this announcement. Thats how important this is. Mollenkopf of qualcomm. Steven schwartzman david calhoun. The new ceo of boeing. Joe, you want to weigh in on what were about to see and what you think it means for the markets Going Forward . Plus its a deal thats been called by many transactional youre dealing with the promise of 200 billion in manufacturing products, cars and planes manufactured here in the United States and maybe some of the more important substance seems to be kicked down the road to phase two. A step in the right direction. Thats what i would categorize this as. If were able to transition from phase one to phase two, i think this is an opportunity from an investment perspective for names like caterpillar and fedex who have significantly underperformed theyre down from their january highs. In the case of fedex, nearly 16 , caterpillar, 18 . The Revenue Growth has slowed significantly. Its about momentum going into phase two. I found the comment toward kevin walsh to be very interesting, in particular on a day that the dows fed chairman Robert Kaplan talked about the size, the expansion of the federal reserves Balance Sheet. That is a risk to the market its something thats going to certainly irk the president if they are going to temper that growth of the Balance Sheet as we move forward. I thought that comment to kevin worsh was very interesting. Quote, unquote, the job the job he was talking about, of course, is the fact of fed chairman who knows what a new term from the president will bring in terms of who sits in that chair Going Forward. Why your thoughts today . One unknown it should lead to better confidence i think it will have positive implications for the economy and for earnings will it lead to capex increasing, more Business Investment that remains to be seen. I do think this is very good i think the earnings story will be better this year than last year i think the First Quarter is going to be the trough i think youll see improvement and get better guidance as we move through the end of the year. Larry kudlow earlier with the gang on squawk on the street said this will add half a percentage point at least in 2020 and 2021. Not all of mr. Kudlowes predictions have come true, we know that. True and not all of mine come to fruition either, scott. What im looking for here is for this signing to free up a lot of that buying power out of china, because they basically had taken down reserve requirements, scott. They had taken down Interest Rates. They had done everything they could to prop up their economy against what was obviously a big pushback from the United States. Now you free that up with the signing of this. Perhaps not 100 , but you free up an awful lot of that. Thats going to impact australia first. Thats their biggest trading partner. Its going to affect the United States in a very big way obviously, we are a huge trading partner with them. And then europe. A lot of that, you and i have spoken of this before. When you have Central Banks around the world that have taken Interest Rates down, when theyve made money easy to get, i think thats the sort of thing that gets freed up in this agreement. What happens with intellectual property remains to be seen until we actually see the deal, scott. Its one advantage that we have over the news reading, maybe we dont have an advantage over them but at least were not disadvantaged. Whats in this deal isnt distributed to the news reading algos right now. Everybody will have to break it down and loos re and there to see exactly what is in this deal when it does get released. The best we know at this point, at least and im interested in your take one tarr to be remaining. Youll have a reduction in some. Others are going to remain you always talk about the prospects for more capex and some of this uncertainty that the ceos, many of whom in the room listening to the remarks today had to deal with. They had to keep them on to hold their feet to the fire for sure that is a good thing i think we will get better results as a result. In terms of where we go from here on capex, it is really a wild card. But to the extent i go back to confidence you listen to jamie dimon yesterday. He sounded confident about a trade deal and what it means for the economy. To the extent we get the confidence back, its going to be a slow build in capex i do think its going to come back eventually. Havent had a chance to talk much about how this is playing in china, at least during this hour president xi is not in the room tod today. Most of you know that by now but i want to read you a tweet from the editor in chief of the global times in china. Often thats looked as a proxy of what the thought is in china. Im watching live streaming. Im happy for phase one trade deal there will be people in both china and the u. S. Criticizing this deal. They are either shallow or criticize it out of political reasons. People out of the two countries as well as Global Markets will support it that from the editor in chief in the global times, chinese and english editions this person correct about the market reaction, at least today. Dow looking for its first close above 29,000 ever. Major averages have hit record highs also Richard Fisher was u. S. Deputy trade representative from 1997 to 2001. Richard, your reaction as youre watching this today . Well, you know, i also was a member of the team that jimmy carter sent in 1979 to settle our differences and open up the ability to trade with china. Ive been around for a long time i would only say this about what the president is saying right now. Were the only people not in that room. He has introduced everybody in america. Yes. Absolutely remarkable here is what i think first of all, my experience with china, going back to 79, doing the wto protocols, working with charlene barcheski, they always give you something when you push them a good package on oil and gas, natural gas exports, lng and also some statement, apparently, about opening up their Financial System to our institutions makes sense, because their Financial Institutions dont work well but lets not get overexcited about this a, we havent seen the exact document and, b, it is very unlikely that weve made the kind of progress we need to succeed as a competitor against their subsidizing intellectual property theft, 5g and ai and all these complex matters protecting our companies when they operate in china. So, you know, i think we have to be very careful here not to be too optimistic it is a step forward i think the president actually has been firm with china in our administration, Clinton Administration i served in for four years, we let them get away with a little bit too much each successive administration has let them get away with with a little bit too much. Now were calling their card its the beginning of a process. Its not the final answer. And i would be very cautious here as to the markets let me stop you for a second. How can the news get any better than this right now its something we created, got so excited about its a partial solution. Thats a step forward but thats already discounted in my view. One last comment on the fed. Markets oriented, former vice chair goldman sachs. Up above 4. 1 trillion. That is an issue theyre worried abou about. I know kaplan is very worried about what theyve created and how they bring it to an end. I want to stick to the deal firs first. I want to stick to the deal for the time being the last two years, in your estimation, are you saying were worth it now that theyre operating in large important, slightly more Market Driven economy. We believe in a certain way of operating to the way they operate in china and vice versa. And as far as capitalism is concerned, we realize the threat that they present. We realize how they violate the norms of commerce and were not going to put up with it anymore. Thats a big step forward. How do you square that with our osteopathic entrepreneurial system in the United States . Which is proven to be the greatest lubricant of our success and how do we deal with each other in Global Markets competing for market share that is the big question i dont see how you square this corner very easily they have a different way of operating. Theyre control freaks they want to have control of their production function but also their people. We operate in a different mode europe operates in a different road india operates in a different mode this will be a constant battle in conflict. I dont think weve come up with the right answer thus far. Im not sure there is an answer. I will say this. Its a step forward. Do you think the chinese will follow through on the promises theyre making today and well get the details when we see the fine print. Youre talking about an awful lot in terms of commitments. I think, and i believe in this agreement its a twoyear Purchase Program for ag, lng, et cetera probably no doubt some aircraft and search well have to see if they actually follow through. Usually they do follow through with commitments in terms of purchases. But they rarely follow through with what they commit to legally in terms of operating within the wto or International Forum so well have to see i have a high respect for the Chinese People i have a high respect for the liberalization taking place. I have a great fear of whats happened since xi jinping has become the leader of china and the way he has undone a lot of the liberalization and i believe that he is going to be a thorn or a burr under our saddle for the longest possible time. There are many predictions around town today, richard, on what this trade deal is going to mean for the Global Trading environment, for what it means to global growth, for what it means to gdp here in the United States larry kudlow made a prediction on this network saying it will add, at least, in his words, half a percent of growth this year and next. Do you think that can be achieved is that realistic . It will be hard to tell whether this adds to our growth or, as it was pointed out earlier on the show, better sense of confidence leads to a little bit more capex. Well have to see. Ive known larry kudlow since we were in our 20s. Kudly is what we call him today. Doesnt seem as cuddly today as he was back then i have a high respect for larry. I think he has done a very good job in informing and sometimes restraining the president. Hes paid to be optimistic here. Well have to see whether that big of a hit to gdp will occur the fed studies have been done as to the cost of the trade restrictions that trump imposed would verify the kind of number that larry is talking about. The question is, over what time . The fed studies have shown, and this has been announced publicly, that it set gdp growth back by half a percentage point. If thats the case, if thats the case, then relieving this tension should add to gdp growth well see. If youre sitting in the room with jay powell today and you have this news and you see where the stock market is, as i mentioned earlier, the dow is going for its firstever close above 29,000 after getting above that historic level last week. What are they thinking today well, i think they are seriously thinking about the effect of the expanding of the ballot sheet and its direct correlation with the s p 500 look at the nasdaq, whats happened since october i mean, these are ferocious runups. And will that create some problems can they be a force of instability . How do you rein that in without creating a total market cavein, that could impact the economy . I believe this is very much on their mind right now. The term irrational exuberance, obviously, was made famous by alan greenspan. Yeah. Are you feeling any of that today as you look at the market, and do you think jay powell may be when alan retired i had a ranch and gave him petting rights to the bull the bulls name we changed to irrational exuberance. He sent me a letter with a picture of him and the bull and said richard, irrational exuberance is really a lot of bull i believe we are richly priced right here im not a market expert or timeer if you look at it, unless we get the kind of earnings growth, which we hope we get, one could argue its certainly fully priced if not richly priced. We all remember the market after those words of alan greenspan, went up another four years. It got even more irrationally exuberant. I have the gang in front of me, as you know. I would like to get their thoughts on what you said less on the trade side but more on the market side, that the market is too rich. What do you think . Its exuberant. It may not be irrabble exuberance but its exuberant. Youre right to cite the federal reserves Balance Sheet if you look at the prior 18 years, leading asset class, three consecutive years, 13, 14, 15 we took the size of the Balance Sheet from 2. 7 to 4. 5 trillion. The concern as an investor is what is that moment and what will be the impact not only on equities but credit markets when we temper the Balance Sheet and put a pause to it . I would pause it. This is me personally speaking not necessarily a barclays point of view or anybody else. The market is determining Interest Rates the fed has lost control of the yield curve. They dont really have much impact some would say further than three years out, some would say more than a year out if you look at the amount of ten years that are held, for example, versus whats out there, trading in the marketplace, i would argue that that tenyear rate in the world is determined by the markets so, i dont know what kind of impact it would have on the credit markets and i do know that there is a direct correlation, 100 correlation if you just look at whats happened with the s p and the nasdaq since the bottom in october with the expansion of the Balance Sheet. Taking it up to a little over 4. 1 trillion from 3. 8 plus so i note that correlation its got to be driving the markets. Certainly the markets the people that i speak to that operate in the market are hopeful that the fed doesnt start reducing or at least tapering off the growth in the Balance Sheet, start reducing it or holding it steady that money is flowing in to equities it flows into equities when yields are less attractive, which they are now theyre still very low its a selffulfilling prophecy here i just worry about what would happen, what would happen if the fed tapers this off a little bit. And i think thats what Robert Kaplan is concerned about and also wary of it can lead to further problems down the road if you keep expanding the Balance Sheet as they have done as they announce this whole repo facility program. As a central banker, do you worry about a new paradigm where tariffs become the norm in the future yes. And trade wars become the norm and how you as central bankers model into the Economic Forecasting . I was raised on remember, ill be 71 in march. I happen to be a free trader i worked for bill clinton on that he was a free trader george h. W. Bush we set a lot of this stuff in place, was a free trader im not a big fan of tariffs but on the other hand, if somebody violates the system so obtuseely has as china has done, somebody had to do something to make them realize theyre being detected in terms of their misbehavior in the marketplace in trading goods i understand this having happened im not fully against it i just dont want it to become the norm. Hasnt it already, though the well, well see. Its not just with china. I agree were talking about it with europe we have the european trade commissioner as we speak he has been here the last couple of days. We see it happening global ly everywhere we are the principle proponent, the United States, the biggest economy, the greatest economy in the world, of pushing this as a tool and i think we ought to be careful it doesnt get out of control. I just want to alert everybody that the vice premier of china, liu he, is speaking. Well take you back to the east room when we get closer to the signing. Before i let you run, it certainly wasnt lost on me for a moment joe brought it up. From the moment i saw kevin worsh in the room today in the great leadup to this event and i was wondering what all of that meant. And to me, it could only mean one thing. Do you think he is going to be the next fed chair he thought he was going to be governor of the bank of england just two or three weeks ago, whenever that was. I think kevin is a talented young man. He is young. His first meetings with the president on the last go round, the president was surprised and actually commented how terribly young he was this much i believe. And that is that when jay powell comes up for reappointment in 2022, he will not be reappointed. I think thats pretty clear. By then kevin will have matured a great deal more. I think its a possibility but hes not going to get that until the current fed chairman, jerome powell, jay powell, finishes his term. And i dont see any other outcome. I hope that kevin has matured since we served together on the board of governors i think hes immensely talented and well have to see. Its remarkable in and of itself, is it not, richard, that we could literally be dealing with a time of amazingly historically low Interest Rates and historically high stock markets and a wellperforming economy and were going to change the chairman of the federal reserve. We know that the president doesnt feel confident about the current chairman of the federal reserve. Knowing jay powell as i do, and i know him well, he has a job to do he wants to get it done hes not the kind of ambitious guy who wants to hang around forever. He has a perfect resume, in my view, and has done a lot for this country i think he will serve his term out and get it done and well see had an happens next. Kevin is ambitious, but lets remember, hes also talented well have to see whether or not that manifests itself in coming chairman of the fed. How do you think the markets one last thing. Remember, he and schwarzman, et al, they were all on that first team that the president put together to advise him on the economy. That group is in the room. I think thats why i wouldnt read too much into who is in the room other than the fact that these were the people originally on that committee and it got disbanded later on. Understood. Noted, nonetheless richard, we appreciate it, as always we look forward to talking to you again soon. All right. Richard fisher, former dallas fed president. As we talk about how to look forward and how to trade all this, its not all at 30,000 feet, if you will. Jim cramer put together a list of his, quote, unquote, trade deal picks some will seem obvious, perhaps, to some and some maybe not if you start in the financials, because those stocks have been most in focus lately given the fact they kicked off earning season does it make sense to you . Specific financials, i think. Theres a lot of them on that list. There are. Citi, mastercard. Sometimes you have to make some choices in there, too, scott. The idea that citi is still inexpensive, yet theyre buying back their stock and some of the things going on with citi are interesting. You look at American Express look what thats trading at at a pe, versus a visa, thats tradg at i think its a no plainer those do make a lot of sense to me when you look at the Technology Side of what jim is talking about, wow, he certainly is looking towards 5g thats certainly what his focus is because hes talking about apple and all these various chip names and everything else. That makes a lot of sense to me because that is what were looking forward to as we look into 2020. I also want to be clear, its not like jim has put together this list for us and said, go buy all these stocks now lets be clear about that. Because in the last couple of days hes talked about apple if you dont own apple dont go out and buy it now, wait for earnings to see if it justifies what the stock has done and you could make the case in a lot of these names on this particular list that theyve had great runs, like the banks, like some of the techs, like nvidia which is on this list, which is apple, this is simply a big picture look step at the kinds of stocks that could work directly related to this, some toy stocks, hasbro and mattel, interesting to note today given what we got from target and the Holiday Season toys were weak, weaker than expected some of the transports, fedex, one of your stocks i disagree with that one. I still think fedex has too many problems im in ups, i bought calls today as well. Im in the stock, he i actually own calls, its a double long position for me, but the difference right now between what fedex has done and what ups has done in terms of how theyve delivered, how theyve come through on earnings and everything else, scott, theyre different companies, one of them is more focused on ground. So because theyre so different i think that ups right now continues to signal that they are the better of the two. Okay. I will let all of yall go through those names and maybe we will be able to tweet them out for you. I dont want to end this show without doing a dive into target a stock that you recommend all the time. Yes. You own it, youre friendly with the ceo. Why he. You have to be shocked with what happened in the Holiday Season, Brian Cornell sure as hell was. Where was the weakness . Electronics. And toys. Toys were flat to down a little bit. Its the holidays, man. They have five other categories that they did well on and theyre stealing some market share, people are focused on the right thing, this he did screw up i did have an opportunity to talk to Brian Cornell today, they screwed up in the electronics. They needed to do a better job, didnt execute well enough, it was down 6 , but they also came out and said, hey, look, but Going Forward our earnings were not adjusting anything so there is a lot to be said for the other aspects of whats going on right now at target and if you want to focus on just the negative, look at apparel, essential beauty im not focused on just the negative, im focused on two key areas for the holiday which were a colossal disappointment. Thats focusing on two categories that arguably matter more than any other in the Holiday Season and they fell short. They did, no doubt about it he admitted it, i look at it and say this is a mistake. They got beat up by best buy and some of the others, probably amazon and whomever else in the electronics world. They got beat. They didnt do what they needed to do, but as much as they might have lost in that this might have created a little bit of an opportunity for those who have missed this stock on about a 7 pull back right now. I still wouldnt be buying it. I think electronics was disappointing, i think toys you can explain because last year they blew it away because toys r us went out of business. That im not as concerned about. I think really this is positioning. The stock was up 88 last year, went interest 14 times to 17 times. And two giant jumps off earnings calls where it was up significantly. It was priced to perfection, they had to execute, beat and raise and they didnt. Cramer says he thinks they lost share. I disagree with that. This is proof that they lost share. I totally disagree. What was the popular must have electronic item in the Holiday Season it was missing in 2019 it wasnt like it was in 2018. It was apple. Air buds. Yeah. Thats what every kid wanted. Yes. It wasnt a toy, it was, you know, 180 air buds, joe, thats what they wanted and they bought them from apple. Thats not an iphone x, thats not a 5g iphone thats a different price point. Different price point that you dont really go to target to buy. It could have also been iphone wait until apple reports. You sold some of your walmart today. I did. Why you know, well, its trading at 23 times forward, you know, it was up 20 last year. I just kind of feel like some of the problems with target are target specific, but i dont think its all target specific, so i worry a little bit, you know, about the results and the expectations are pretty high into it so i trimmed it. Still overweight but i trimmed it. Scott, i would add best buy to jims list and the reason is that a lot of these retailers have eaten the pass through from china, you know, from these tariffs and so forth we know that they havent all rolled off, you spent 45 minutes talking about it, we have and the president has, that they havent all rolled off, but these guys are positioned to really take advantage of that because thats one of the places that target and other retailers lost out in was electronics and thats best buy. Im glad you went there joe, you sold best buy today. Thats the exact reason why i bought best buy. I bought best buy on november 26 at 80 on the reasoning we were going to roll back some of the tariffs 60 of the goods sold at best buy they are produced in china. So if youre telling me we are not going to be rolling those back, best buy looks pricey to me at 90, yesterday i got out of it. I dont disagree, its got fundamental momentum but from a valuation standpoint keeping those tariffs in place to me that means its a little bit rich in valuation. Okay. We are keeping our eye on the east room, i promise we will take you back there when the actual signing takes place we will take a quick break and come back. Were going to do final trades thats a live shot at the east room of the white house. Halftime report is back after this who says our bank isnt tech enough . Everyone, look at your phones. The design thinking, the digital engineering, security, blockchain, and we will be first to market yes. When we do we launch . Unfortunately, in 2 or 3, hours. Why the delay . Cognizant is helping banks use Digital Technologies at scale to advance speed to market. Now you can, with shipsticks. Com no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. Sending your own clubs ahead with shipsticks. Com makes it fast easy to get to your golf destination. With just a few clicks or a phone call, well pick up and deliver your clubs ontime, guaranteed, for as low as 39. 99. Shipsticks. Com saves you time and money. Make it simple. Make it ship sticks. East room of the white house, the china vicepremiere is still making his remarks, you see the president flanked by Vice President mike pence, treasury secretary, all waiting for the official signing ceremony for phase one of the trade deal we will take you back there as soon as we see both of those gentlemen sit down at their tables with the respective books. In the meantime, lets do final trades pete. In the short term were seeing calls being bought in best buy, joe just got out of it, but this is the options i dont mind buying into these things, theyre inexpensive for upside they expire january 31 like them. Dr. J. Ebay, just bought a pair of President Trump signed sneakers on ebay, i figured why not paid almost 5 grand for them now hes recommending stocks and youre buying what he recommends. Exactly. Oh, my goodness cisco, down 17 from its high, 15 times forward, yield is almost 3 . You have to believe Enterprise Spending a coming back, i think it will be a better enterprise spend year this year versus last. Joe. Zoom video Ticker Symbol zm Revenue Growth over the coming three quarters, 80 , Free Cash Flow generation strong. Again, another day the dow is above 29,000, its at 29,044, it is going for its first ever close above that historic level. Investors continue to take in the events in washington and thats where we end. The exchange begins now. I am Brian Sullivan a milestone moment for the administration, the president and maybe the nation phase one trade deal agreed to on december 13th about to be signed trade of course has been a cornerstone of his economic agenda and the centerpiece of his campaign all of this coming on the same day that the house will send articles of impeachment to the senate we have not seen the text of the deal yet, but we know that it addresses ip protection, forced technology transfer, ag buying as well as manufacturing purchases, Financial Services and dispute resolution joining us now are derek scissors, economist at the american ent