Transcripts For FBC Cavuto Coast To Coast 20240714

Advance, if its a very good month if it stays like this, the best june sinceey 40. We keep an eye on that. I remember that one well. Like just yesterday we were covering. A. That we have socalled bond king, jeffrey gundlach. He has turned markedly bearish. That the Federal Reserve doesnt know what he is doing and politicians flummoxed about the debt, whether they want to address it. He has been buying gold. He is optimistic on gold. His read on things a little later in the show. Edward lawrence on what the fed decision could reveal today. The white house want to see rates cut like now, right . Reporter the president made his observations clear. He would like to see that rate cut happen. It is widely expected the fed will keep the federal funds rate, 2. 25, 2. 50. Recent studies say that number goes up at the next meeting to 82 . Were looking for changes in the language of the statement. If the Federal Reserve says they will be patient for future adjustments. How the data changed and longer term projections. We may see Federal Reserve take note of slower growth. Bureau of labor statistics said we grew 3. 2 . But the Second Quarter will be just 2. 2 growth. Well see if language changes related to tariffs and International Economic slow down. Over the past month, key figures in the Federal Reserve, fed chairman, vice chairman hinted there could be a rate cut if trade winds or International Conditions cause problems. Also big changeses in economic numbers here. Consumer spending is strong. Manufacturing softened a little bit. Job gains slowed a little bit. The fed is trying to balance this with their need to get the federal funds rate higher to use that as a tool to help the next slowdown. Against a backdrop of the president calling for Federal Reserve to lower Interest Rates. He said or hinted to the fact he could demote the Federal Reserve chairman, white house Economic Advisor larry kudlow. He says theyre not considering that at this moment. But the president said right before he left, lets see what he does. Back to you, neil. Neil i dont think he is technically able to demote him or fire him at this stage but he is exploring all avenues. Edward lawrence, thank you very much. So the Federal Reserve is target of president s wrath for a while, help him and rescue the president . If you buy polls across key states where he is trailing, again very early on in the process he can use all the help he can get. Making money host, Charles Payne, wall street journal James Freeman and fox businesss susan li. All in the wording and language. Not expected we see a cut. But you never know. You never know. Neil expectations are he lays ground work for one next month. Federal reserve under powell, yellen, theyre good playing options. Leave options open in case you need to cut Interest Rates. I watch for word patience to be removed. Jerome powell earlier on, skyrocketed markets, saying well act as appropriate in reaction to tariffs and effect on economy. All options are on the table. Neil taking patient out . Left the door wide open to say lets cut Interest Rates at some point. Some say will happen next month. Neil that would be the inference, right . Great sense of urgency. Lets not forget may, even though the mexico tariffs were responsible it began on may 1st, when powell threw a different term in there, transitory. That allows patience. Were in a circumstance we cant explain but shortlived or will be. The market plunged that day. So this is a chance for him to take the language out, saying okay, well not be patient, well be ready. His conundrum this is a different Federal Reserve. Theyre talking about perhaps cutting rates but not because the economy is in dire straits. That makes this so intriguing. Neil normally when the Federal Reserve is even talking about cutting rates people say, what do they see, that i dont . Normally panic associated with it. We had oddity yesterday, degree today, stocks running up on prospects of Interest Rates coming down on a trade deal being scored which would mitigate that need to cut Interest Rates. It is weird. I think the fed has room to cut based on criteria that he use. I dont agree with that criteria. There is no argument to cut rates. You scratch your head. Even more so now. This is not a bad economy. Neil you make a preemptive trade strike . Historically we often had fed fund rate over several decades many times much higher than the rate of inflation. This is not a high federal funds rate. Interest rates are low. Do you hear Small Businesses saying we cant find credit or were paying too much . I dont see the argument that this economy needs a rate cut. Neil arguement there is not a lot of arrows in the quiver as we to from 2 1 2 to 2. 25 range you dont have a lot further down to get back to zero. We had 10 rate hikes. Four last year. Neil four last year. There isnt much to dial back. There is not a lot of dry powder. There are two mandates. A lot of people are scratching their heads. Bank of america, Goldman Sachs are not on board well get a cut at some point. You dont need it when inflation isnt there. Those are two mandates inflation and employment. Youre at full employment, best jobs market in 50 years. Neil youre argument is there no inflation. You have more than enough wiggle room. More than that if you listen to jay powell, he is so proud of the ped Federal Reserve saving economy since the great recession. He is so proud of that my theory he never wants to see a recession on his watch if that means being a little early, what is the fed helping okay economy, instead of being a fireman putting out fire, never starts in the first place. That is what i hear when we listen to lot of speeches, when we talk about dual mandate, we talk about different mandate, keep expansion going at all costs period. Neil do you think he thinks about the president , always mouthing him. Maybe i cant fire him. Maybe make him chief bottle washer. Give him a smaller office. Neil right, right. I wonder whether that weighs on him . Were all grown ups. You argue it doesnt. If i were to constantly hear that, it would weigh on me. Weighs on him less than you might think because neil he damned if he does, damned if he doesnt. In the sense that the dials he looks at the criteria he has said are important allow him to cut now. I dont necessarily agree with criteria. Neil the president criticized him. Thats right. Theyre not really in conflict. I think, unfortunately, he has a view which i was hoping we would kind of get away from in this era versus the obama era, you get the sense powell thinks it is his job to offset bad policy decisions by the congress, by the president , if he is looking to offset tariffs, i dont think that is the role of the fed. I think it should be price stability. They get into trouble neil all this started, remember we were still with trade tension with mexico. I think this is a bone for the market. Does he want to be the fed chairman that knuckles under the presidency . If President Trump comes to criticize you . Neil it wouldnt be that. I think the Public Perception would be that he is knuckled because he was being pressured by the white house. I dont know if he want that tag. Neil furthermore, the president now is right in retrospect. He did overdo it. The last thing he wants to do, cede to him, for the world to see, i have to do it because yeah. But he has ceded to him. Neil youre right. He defacto agreed maybe that last hike was too much. Maybe that was the time he made a stand. This isnt the first time. Remember when janet yellen raised rates for the first time . That was in late december. That january, first two weeks, were the worst first two weeks in the history of the stock market. It wasnt the president pushing back. President trump tweets and vocal about, usually wall street beating the fed up, trying to bully the fed. They usually respond. Neil wouldnt you want at any level, youre a great reader of market, bond, stocks, you name it, wouldnt you worry at some level into this strong recovery, to jims point, all of a sudden the fed is cutting rate . I think that just simpleton in me says, all right, that alarms me . The reason im not worried, my theory from everything im studying, im no expert, i look, read, listen to a lot of this, my theory this is not the traditional fed playbook. Neil youre not worried about Wage Inflation. Not me. The fed made it clear he is not worried about Wage Inflation so he has a little more flexibility. In january powell said Wage Inflation is not price inflation. That paved the way. He has been greasing the skids. Neil you say he will do everything to avoid recession on his watch . Right. Neil not if we retired the concept we could have recession . No, we havent. Australia i think in year 27, 28 without recession. It is not inconceivable they could go neil they dont have no ozone. It is population. If you listen to powell i think he can engineer some kind of an economy that never dips into recession. Neil what if his language is a bit more hawkish though . You were saying likely 82 for next month. Next month. 100 for the year. Neil what brings it down under 50 . I think you would see a market selloff. There is press conference 30 minutes after the decision. I think the press conference is more important than the statement. It will be a humdinger. Yes it will be. Well see what type of adlibs he takes in that. Neil charles is just like this really shouldnt be the measure. I dont want stocks to go down but that is not what you want the fed responding to. It is not their job neil the fed says he doesnt focus on every move in the market. Everything i have seen in the past it is responding to every move in the market. Wall street is very loud. The president like all president s wants lower Interest Rates. It is harder to make a case this economy is in need of lower Interest Rates. What about volcker back in the 1990s . He didnt listen to bush when he didnt want to have tightening cycle continue. This time around neil tightening rate when jimmy carter first appointed, one full percentage point at a time. The fed changed under Alan Greenspan lets face it. This is just a continuation of that, if you want to call it a metamorphosis or evolution, whatever. James is right to a degree, you know, before the fed was 1000 independent. Someone like volcker said i will make you go through certain amount of pain. You will love me afterward but hate me while youre going through it. Neil or hate you after you go through it. Thank you, were up 21 points here a lot of sectors that would benefit, finance, utilities from a rate environment, like one theyre envisioning are doing well. Not so well. Volume running 2 3 of what it was yesterday at this time. You can tell to susans earlier point, a lot of people are waiting this out to see what happens. Keefe watching. Youre watching fox business. I switched to liberty mutual, because they let me customize my insurance. And as a fitness junkie, i customize everything, like my bike, and my calves. Liberty mutual customizes your car insurance, so you only pay for what you need. Liberty. Liberty. Liberty. Liberty. Heannouncer more details incoming involving volkswagen and the growing scandal. Dissatisfied customers filing complaints against the german auto maker. Because a vision softly creeping left its seeds while i was sleeping and the vision that was planted in my brain still remains within the sound of silence in restless dreams i walked alone narrow streets of cobblestone when my eyes were stabbed by the flash of a neon light that split the night and touched the sound of silence we like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. Neil what do you think of this thousand trip commitment . You know im for less troops in the middle east. I think its a mistake to keep ramping things up. One of the things i liked about President Trump he said iraq war was mistake. I think iran war would be even bigger mistake with the iraq war. We lost over 4,000 soldiers over. There we dont need to get involved in another war. Neil nothing new there that rand paul is skeptical getting deeper committo the middle east here. Were sending 1000 additional more troops. Were not getting signs iranians backing down certainly on their bellicose talk. Fox newss Hillary Vaughn has latest. Reporter republicans are not on the same page how to handle escalating tensions with iran. Rand paul said any military action against iran would be a serious mistake. Senator Lindsay Graham earlier today telling fox that he think thinks all options should be on the table. President trumps defining moment will be how he handles aggression, but attack naval vessels and Oil Refineries of iran on the target list. Theyre trying to drive up price of oil creating chaos in the straits of hormuz. The price to that you lose refining capability. Reporter a group of republican and democrat senators have questions about ramp up in troops in iran in response to the rising tensions. Democrats and independent senator Bernie Sanders joining other Democratic Senators and republican senators including senator mike lee and senator rand paul warning white house that more troops could trigger a military conflict. Also reminding the Administration Congress has not signed off on any military action which is their right to do. I talked to senator blumenthal who say china and russia need to be part of the conversation, that the president s rhetoric needs to be more diplomatic. The strategy has to be to maintain economic and diplomatic steps but also work through our allies, partners who have at least as big of a stake in the straits of hormuz as we do. All were getting right now from the administration is more threats, more heated rhetoric, that will lead us to miscalculation. Reporter neil a select group of senators on the hill will be getting briefed behind closed doors by the Trump Administration and representative from the state department on these rising tensions and what the administration plans to do about it. Neil . Neil thank you very much. Hillary vaughn. How would you like to be Army Secretary mark esper . He will soon be the third person to take on the Top Defense Department postif he goes through the confirmation process. Right now he is dealing with a lot of folks who are saying we have to up the ante in the middle east particularly with regards to iran. To retired Brigadier General anthony tata on all of this. We plan to do something with the soldiers. There is a notion, general there will be a reminder that were very serious about this. Serious about what . What do we intend do you think to do . Neil, good to be with you. We dont ever send soldiers somewhere just to be a reminder what. These soldiers will specifically collect intelligence, analyze intelligence, set up Communications System to analyze that intelligence. They are part of a flexible deterrent option and holistically what were doing is trying to protect our vital interests in the persian gulf which is the free flow of oil and commerce which has always been, you know, it fuels the World Economy and so goes the persian gulf, so goes the World Economy in many respects. So we have a real vital interest there. This is a very small footprint of soldiers, sailors, airmen, marines going over there to do a very specific task of intelligence collection, which we need in a big way over there, because it is hard to pep trait into the iranian regime. Neil you know, when i was talking to rand paul, general, he was of the view, first of all, being very careful getting deep in Something Like that. It could be another iraq war kind of a deal. Make sure, whatever you do, you have support and others who agree with you. Others have mentioned to that point the arab league, almost universally critical of iran, then do something about it, what do you think . I have a world of respect for senator paul. You know, his view, he is not an interventionist, neither is President Trump. Were not on an interventionist path here. What we are is, defending our interests and our personnel and our property over there and so i dont see any correlation between any the buildup for the iraq war which was led by a bunch of neocons which really wanted to sharpen their knives, to after hussein and the iraqi regime, in the wake of 9 11 and the two were not even remotely related. Here, what you have got is a president that is very focused on protecting u. S. Vital interests. We have a National Security strategy that lays out vital interests. The persian gulf is mentioned in there. He is executing his National Security strategy and i just dont see any kind of relationship between, you know, a nominal deployment of troops, i wouldnt even call it a buildup to the persian gulf and 150,000, 200,000 troops we put into iraq. There is just no relationship. Neil all right, general, good talking to you, thank you. Thank you. Neil meanwhile just in case, apple is investigated the possibility of taking maybe a third of its apple iphone production out of china. So that means even if we get a deal, that theyre 1 3 out the door already. After this. Nwood tree, is where people first gathered to form the Stock Exchange which brought people together to invest in all the things that move us forward. Every day, invesco combines ideas with technology, data with inspiration, investors with solutions. Because the possibilities of life and investing are greater when we come together. Will transform not just the automobile, but mobility itself. An autonomousthinking vehicle protecting those inside and out. And its the mercedesbenz of today that will help us get there. The 2019 eclass, with innovations that will change the way we drive from this day forward. Visit your local mercedesbenz dealer for exceptional lease and financing offers. Mercedesbenz. The best or nothing. Who used expedia to book the Vacation Rental which led to the discovery that sometimes a little down time can lift you right up. Expedia. Everything you need to go. Expedia. But how do i know if im im getting a good deal . I tell truecar my zip and which car i want and truecar shows the range of prices people in my area actually paid for the same car so i know if im getting a great price. This is how car buying was always meant to be. This is truecar. Neil both sides, if you think about it, china and ourselves were talking about hope for a successful trade negotiations. That means negotiations actually resuming. For all the good talk they have formally not. Fox business after the bell cohost connell mcshane, reporting this time in beijing. What is the mood there . How are they feeling . Well i just spoke a little bit earlier today, neil, with a official in Chinas Ministry of commerce. The mood is basically, as you described. The chinese in his words at least are actively preparing for the meeting next week at g20 between President Trump and president xi xinping. The definition of what a successful gettogether would be in the chinese point of view, restart of negotiations and agreement to keep talking possibly meet again. In terms of whether china is ready to move quickly to get some sort of a largescale deal signed, we did not get that impression. Take a listen. Translator that refers to the red line issue that involves chinas sovereignty. Well give no ground on that. We will not accept mandatory purchase requirements. We hope the agreements will serve as stable framework for bilateral trade, economic ties, rather than having a agreement in place while at the same time having retaliation at anytime possible. So still some work to do, you get that impression. Red line issues, the issues china will not give in on under any circumstances. One thing he did say there is a possibility china might be open to changing some of its laws. He used the terms rules and regulations. I asked him whether he would rule out a law change as part of a trade agreement. He didnt rule it out. That is news to people following the negotiations. He didnt deny china backtracked around on some agreements they made, that is why the talks called off. That kind of thing sometimes happens in negotiations. His example that he turned to was that president up at least from the chinese view had backtracked on tpp, remember the transpacific partnership. He says the u. S. Was to be a party to that. It was agreed under a previous administration, but he then says they backed out of it. So that was the example. Hey these types of things happened. We talked a little bit about politics. There is a theory out there that the chinese are waiting out President Trump, get beyond the to 20 election. Deal with a different u. S. President. I asked him if that was true. Here is the answer. Translator as for who will be elected, that is your domestic politics which has nothing to do with us. Who would be the person negotiating with though . Would you rather see a different person in the white house . Translator i think we should developu. S. Relations based on our common interests, not based on who is in the white house. Not really taking the bait there, neil, the bottom line, when you talk to chinese officials, they as im sure american officials are saying similar things, looking forward to the meeting next week, not getting anybodys hopes up, but successful g20 would be just that, a agreement to maybe have more meetings. Neil that is the way it is looking thus far, connell. Great job. Continued success obviously. Connell mcshane very closely following china. First remember the hong kong disturbances are with were going on trade. Speaking of which china is facing longterm effects even if a trade deal is scored. Were getting reports that apple is seriously exploring a possibility, making good chunk of its phones maybe up to a third, out of china up to other locales. No matter what happens on the trade front. We have Stanford Business School Lecturer dave dotson on that. Professor this, follows other companies considering the exact same thing. What do you make of it . Well, i think if apple moves 1 3 of their jobs, a third of chinese jobs out of china and manufactures them in vietnam and india, to china will be one big, who cares. Here is the thing, neil. China will likely trade a few low skilled manufacturing jobs for apples phones in return for winning Smartphone Market in asia. Apple employs 3 Million People directly or indirectly in china. That sounds like a lot. If the workforce is 776 Million People. If half a million jobs move offshore away from china, that is nothing for china terms of their workforce population. Sorry about that. But what is interesting is this, during this whole time huawei is winning the Smartphone Market in china. They have now unseated apple as number two provider of smartphones in china. Thats the big news. That is a structural change is not likely to change. Why china is certainly willing to trade a few low skilled manufacturing jobs to win the Smartphone Market in asia. They will win it for a long time and heres why. First of all, as a result of the trade war, nationalistic tendencies in china, especially the way the United States talked about huawei, the shift from apple or android phones to huawei phones is semipermanent. People dont go back and forth between phones they use. Here is the second thing, the thing potentially a home run for huawei and what will her apple in the long run, huawei will develop their own operating system. Once they have their own operating system, they dont need google. That is the price well pay in the long run. Neil i wonder if other Companies Follow what apple is doing . Many companies predate apple. They have moved locations to cheaper locales, taiwan, one distributor moved to mexico just as those tariffs were being mentioned, leaving that aside, they dont want what is drip, drip, to turn into a flood exodus, do they . No of course. These are unintended consequences after longterm trade war. We were hoping for are a shortterm trade war, we could tweak some tariffs at china. They would come to the table, we would make changes it would be fine. What is happening were seeing throughout the whole globe trading patterns changing. Not just in apple iphones. It is in soybean markets. Across how our automobile manufacturers are supplying their steel and aluminum. Were seeing a whole reset in Global Supply chains. Global supply chains are like intricate neural networks. If you change one piece of it, it ripples through the whole supply change. They will take years to change. They will be permanent changes. There is no way apple will have the same dependency on one country Going Forward just like china is not being dependent on u. S. Soybean producers the way they have. Neil im going a little over time here, but china has been a beacon for a lot of businesses, cheap labor. It is not as cheap now. As it grows, becomes a economic powerhouse it has it is lose out to cheaper production rivals around their neighborhood. Whatever happens on trade front, does china have to worry about posttrade issues that are bigger than trade, much more than we do . I think the part that were miss something that china is moving from being a low cost supplier of Manufacturing Products to a consumer. A finished product is really, that is the prize. It is not individual component. That is why im saying china will certainly trade low skilled manufacturing jobs as a result of this trade war. What is really going to happen, what we need to focus on what is going to happen to finished goods products in china. Im talking about things like huawei in terms of their finished Product Sales to china. Neil dave dotson, i cannot imagine being one of your students. That must be a very fun class in the history and enthusiasm you show. He is stanford lecturer. President is about to meet with fundraisers in florida. He is still there, in miami. Ignore the polls, look at the crowds. Does he have a point. Not hurting raising money. The goal was 7 million bucks by end of the month. Apparently three times that when said and done. So chantix can help you quit slow turkey. Rkey. 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. When you try to quit smoking, with or without chantix, you may have nicotine withdrawal symptoms. Stop chantix and get help right away if you have changes in behavior or thinking, aggression, hostility, depressed mood, suicidal thoughts or actions, seizures, new or worse heart or blood vessel problems, sleepwalking, or lifethreatening allergic and skin reactions. Decrease alcohol use. Use caution driving or operating machinery. Tell your doctor if youve had Mental Health problems. The most common side effect is nausea. Quit smoking slow turkey. Talk to your doctor about chantix. Neil all right the president right now is holding a fundraising event as his Campaign Raises over 24 million in 24 hours. That blows past any of the other numbers similar Democratic Candidates have raised in the first 24 hours. I believe it was a little more than six million in case of joe biden, Bernie Sanders. That is four times the amount in the first 24 hours. Charlie gasparino what is happening on fundraising front for joe biden and wall street heavyweights backing him. I dont think joe biden will have problems given what is going on in new york city. That doesnt he will match trump dollar for dollar now. There is one republican president ial candidate. There is 23 or 24 democrats but joe biden is making massive inroad with the money crowd in new york city. Here is it what we know. He continues to meet with donors in new york. He meets with jim chanos the Hedge Fund Manager monday might night. He raised 500,000 last night. He held a major fundraiser with eric who runs eden park. Not numbers you saw at trump. Chipping away, showing he has base of donors are wellheeled and can bundle. People at the carlyle that he put on, robert rubin, former treasury secretary, former Goldman Sachs. Roger altman, former deputy secretary for clinton. Ran his own evercore partners. Created his own wall street firm. These are people, when rubber meets road can raise a lot of money. One of the interesting things that came out of these fund raisers before we open this up, make this point, biden is pushing a very centrist appeal, telling the guys. I know youre rich. I know it is unfaxable to be hanging out with the rich. Guess what . You want to do the right thing i believe. I am not going to destroy the economy to just prove a class warfare point. So clearly is pushing back against the aocs, the Bernie Sanderss, elizabeth warren. Neil who will push back at him. Absolutely. Neil Noelle Nikpour into the mix, very close to the republican financial community, socalled bundlers. Good to see you. Good to see you. Neil it is interesting, with the president s money total first 24 hours he eclipsed joe biden who raised 6. 3 million in his first 24 hours. Beto orourke, 6. 1 million. Charlies point there is one republican of note running. Governor bill weld is, serious running. So thats a big haul if youre getting four times that amount. Its a big haul. It is recordbreaking. You have to realize i think i talked to you about it offcamara couple times, trump did something very, very smart as president. He appointed self ambassadors that are major bundlers in the republican johnson. Woody johnson in the uk. He has whos who bundlers that have ambassadorships. They are appointed, howard on the holocaust board. Can raise money, howard. These people will not go against trump. They will bundle for him. It is going to be a very, very expensive race. Now on the flipside i think biden is the only person that is going to be able to pull donors, some of the people that still dont like trump, there is michael hernandez, there are some bundlers that still dont like him. Those types would be attracted to the biden campaign. They are never going to do a warren or never going to do a Bernie Sanders. That is good. But it would appeal. I would say this, look who was at chanos house on monday night t wasnt just democrats. Bruce mosler, republican. I believe he was there. I saw him at the inaugural. Neil when theyre there are they giving money . Some are, some are not. John catsimatidis was there. Showed up. Neil he didnt give money. Al damato gave money. He was at the carlyle. Neil do they do give to both . They do. Some have to. Look at walmart. Look at some of these stores that you know neil founders and prescription pills can do whatever they want. Lets be real clear. You have to differentiate. Wall street firms will generally give to both. Depending who is winning polls, side one more than the other. Just so you know that is the firms. Hedge fund executives, talking about the major money players here in new york city, take out small donations, Hedge Fund Players generally stick to one person. John catsimatidis doesnt have to play both ends. He is what he is. He is trump supporter. I think it is fascinating showed up for the second one. That shows you something is going on in his head. Al damato longtime lobbiest. Maybe has to give to both but again neil do money guys get nervous, maybe you know the republican side, early on when donald trump was saying when he first ran four years ago, i dont need any money. Im not kowtowing to them. Im my own guy. Now he does obviously running for reelection. How much of that, likelihood of winning comes into these guys giving money . If they look at polls now, it is still early, he is not doing that well. In battleground states that could change, but that affect clearly not in first 20 hours . These donors are n theyre in for the long haul because you have to look at the fact that everything that donald trump promise he had delivered on. A lot of donors are like, like his personality or not. Neil what of once giving to biden saying he has best chances in the polls does that entertain . If he doesnt win the democratic nomination, i believe all the names i mentioned will not give money to Bernie Sanders. I agree. However if he does win, you watch, he will pick off republicans, depending how far, how much centrist he goes republicans dont like trump. Like i said. There are lots of them. No. No there is not a lot. Not a lot of bundlers. Trump has done something very smart wilbur ross. Neil personal issues with him well put that aside. Of course it is about winning. Wilbur ross was never a major bundler. Wilbur ross is a fortune he runs company. He is pretty large fundraiser. Neil big party for chris christie. They werent major bundlers. Im saying but they have the potential to give and stroke a check to superpac of unlimited amounts. Neil unlimited. When was last time Steve Schwarzman did that . For a superpac . I dont know. I have to look at the records. I cant answer that right now. Neil i want to thank you very, very much. There is a lot we dont know. When it comes to raising money, say what you will of president , despite having polls he has no problem on that front. We have lot coming up, including the travails among Mark Zuckerberg. His rank among ceos is plummeting. What is more telling for zuckerberg his status is tumbling with workers at facebook. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Hey i live on my own now ive got xfinity, because i like to live life in the fast lane. Unlike my parents. You rambling about xfinity again . Youre so cute when you get excited. Anyways. Ive got their app right here, i can troubleshoot. I can schedule a time for them to call me back, its great you have our number programmed in . Ya i dont even know your phone anymore. Excuse me . what . I dont know your phone number. Aw well. He doesnt know our phone number you have our fax number, obviously. Todays xfinity service. Simple. Easy. Awesome. Ill pass. Its a revolution in sleep. The sleep number 360 smart bed now from 899. Senses your movement and automatically adjusts on each side to keep you both comfortable. And snoring . How smart is that . Smarter sleep. So you can come out swinging, maintain your inner focus, and wake up rested and ready for anything. Only at a sleep number store, dont miss the queen sleep number 360 c2 smart bed, now only 899. Plus, 0 interest for 48 months on most beds. Ends wednesday. Welcome back to cavuto coast to coast. Im gerri willis live from the floor of the new york Stock Exchange. In a unusual direct listening tomorrow well follow all the basics here is what we know so far. Valuation on that Company Expected to 16 to 17 billion. Well get a Reference Price later tonight. They are in the red hot category of Cloud Software email killers. Two companies came in the category, patriot, up 48 since the ipo. Zoom up 53 . The company has 10 million daily active users. People inside Companies Using the software at work but dig into the numbers, that is what we did with their s1. The company has 500,000 users who are getting it for free. Called a premium. Only 88,000 pay for the service. Of those, 575 are paying 100,000 or more for service. Think back to company like microsoft sells enterprise software. You see comparisons there. Revenue growth slowing. That is what wall street journal says today on its story on slack, reporting at 400. 6 million for fiscal 2019. That was actually up on annualized basis 82 but down for the quarter in terms of growth. They lost 138. 9 million for the period. So well be watching this closely. Slack could face some bumps along the way. Well be watching all of the twists and turns as this Company Becomes public in direct listing. Last time this happened, neil, spotify in april of last year did very well at the beginning but not so great later on. Back to you. Neil that will be one to watch as you say, thank you very much, gerri willis. Meanwhile there are surveys on ceos, most respected all of that, there is one that interests me, how do workers feel about their boss . When it comes to that, when it comes to Mark Zuckerberg he has taken a tumble here and a lot of people are reading into that, if your own workers are not that enthused what youre doing or saying or both, maybe the company has issues to address . Deep digital chairman dave maney on that. Youve been talking for a long time, david, about this metamorphosis, not in a good which with facebook with the privacy issues, the strongarming issues, maybe misrepresenting himself in Committee Hearing issues. It is coming home to roost. I dont know to a damaging degree but it is happening, what do you make of it . Definitely happening, neil, and you know, it was interesting, i was on last night on fbn to talk about the new Cryptocurrency Initiative and whats happening is that it makes it when your company is not liked it makes very hard for all your constituencies to want to do more things for you. Just as it is hard i think hard for them to convince people to trust them with their money, for their crypto product, i think it is similar, in effect employees are trusting you with their career. I got to tell you, im in Silicon Valley pretty much every month, it is still a really, really hot job market. When your employees say, boy, i dont know about the direction of the company, i dont know how much i think of that ceo anymore, it makes it hard for them to get talent and accomplish things they want to do as a business so not good. Neil it hasnt really damaged the stock. Maybe with its own cryptocurrency plans and all of that. What do you make of that disconnect on that front . Yeah, i think there is. Look, i find that theres a, in the circles i travel in and, im in a pretty big group of friends on facebook, im on there quite a bit myself, whenever you probe there is underlying similar sentiment which is, i still like the product kind of, but theyre screwing around with me too much on the way that the product interfaces with me and i dont really, you know, im not enthusiastic about it. Im not enthusiastic about the company. That to me is a bad sign. That means when you offer me something new, not as likely to go get it. If i have to use you, like i have to use my electric utility or my Table Company or my mobile phone provider, i will use it, but if you ask me to buy more, if you want me to do something more with you than what i have to have, no thanks. Thats a really corrosive, longterm trend for any company. Neil well watch it, day, thank you very much. Dave maney on all of that. When we come back he is one of the richest investors, certainly the most successful on earth. He has the uncanny distinction of having predicted almost to the day and the detail the housing crisis. And now he is talking aabout the economy and the possibility were going into a recession. This you have to hear because he doesnt talk a whole lot. He is talking to us now. The man they call the bond king, jeffrey gundlach, after this. Metastatic Breast Cancer is relentless, but i was relentless first. Relentless about learning the first song we ever danced to. About teaching him to put others first. About helping her raise her first child. And when i was first diagnosed, my choice was everyday verzenio. Its the only one of its kind that can be taken every day. It gives us more time without cancer progressing. Verzenio is the only cdk4 6 inhibitor approved with hormonal therapy that can be taken every day for postmenopausal women with hr , her2 mbc. Diarrhea is common, may be severe, or cause dehydration or infection. Before taking verzenio, tell your doctor if you have fever, chills, or other signs of infection. Verzenio may cause low white blood cell counts, which may cause serious infection that can lead to death. Serious liver problems can occur. Symptoms include tiredness, appetite loss, stomach pain, and bleeding or bruising. Blood clots that can lead to death have occurred. Tell your doctor if you have pain or swelling in your arms or legs, shortness of breath, chest pain, rapid breathing or heart rate, or if you are pregnant, nursing, or plan to be pregnant. Common side effects include nausea, infections, low blood cells and platelets, decreased appetite, headache, abdominal pain, tiredness, vomiting, and hair thinning or loss. My relentless reason its them. My choice with my doctor its verzenio. Ask your doctor if everyday verzenio is right for your first treatment. 4 out of 5 people who have a stroke, their first symptom. Is a stroke. 80 percent of all strokes and Heart Disease . Preventable. And 149 dollars is all it takes to get screened and help take control of your health. Were life line screening. And if youre over 50. Call this number, to schedule an appointment. For five painless screenings that go beyond regular checkups. We use Ultrasound Technology to literally look inside your arteries. For plaque which builds up as you age and increases your risk for stroke and cardiovascular disease. And by getting them through this package, youre saving over 50 . So call today and consider these numbers for just 149 youll receive five screenings that could reveal what your body isnt telling you. Im gonna tell you that was the best 150 i ever spent in my life. Life line screening. The power of prevention. Call now to learn more. Neil all right. Were about an hour away from knowing what the Federal Reserve is going to do or signal what its going to do. Very few think it will move on cutting the overnight bank lending rate, known as the federal funds rate, today. Its a possibility there are about a quarter of folks polled on this who think it could happen today. More likely, the Federal Reserve will signal it will do just that a little bit over a month from now, near the end of july. Then set in motion an additional cut, some would tell you maybe a third cut. We will get the read right now from mike murphy, also boston Wealth Management ceo rebecca walser. Rebecca, play it out. What do you think we will hear in an hour . I think that we will hear not a rate cut, obviously not a rate cut, but they are going to be a little bit timid and shy and i think they will set the tone for whats going to come in july for downward revised guidance. Neil you know what i worry about, i dont see the need to lower rates. I agree, neil. I think if you look at the overall picture, the fed has gotten in trouble a few times. I think if they just stuck with we are going to be data dependent. We are going to look at what the data is giving us and they are trying to be extra transparent, but they are making mistakes because i think they are being too transparent in certain areas, not transparent enough on others. If we know exactly what they are looking at, if they are going to come out and tell us we know exactly what they are looking at, we will have a better picture. Im with you, theres nothing right now that tells me we need a rate cut. Neil if you want to be ahead of the curve, one of the things they say, look at that latest employment report, look at the weaker than expected 75,000 jobs. You could also argue that the Monthly Average is still well below 150,000. I might want a couple more reports under my belt before moving. What are your thoughts . I totally agree with you and i agree with mike. This is the problem. When you lower the rate now, you are really in an untenable position of having a federal funds rate of 2 to 2. 5 target range. What do you do with that if we actually have some massive problem this year, later this year, next year . That is just a rate with which the fed has no power. I think powell is in a really tight spot and will really have to work hard to justify a rate cut because right now, one jobs report thats a little bit off and the numbers that we have with unemployment are still great. We still have great fundamentals. Its a really tough situation but the market priced it in. Thats the problem. Neil right. You know whats interesting, too, normally when the Federal Reserve begins cutting process, whether expected, telegraphed or not, its not good for the markets, because obviously, they read into it that a slowdown is coming or worse, et cetera. Here, its the opposite, going into this. What do you make of that . Is good bad or is bad good. I dont know. I think where we are right now is the reason why we are 2 off our alltime highs in the market is we have arguably a still strong economy, and a fed thats going to be extremely accommodative. If you put the two of those together, you would argument that that would call for higher market prices. I think for investors, im not going to say goldilocks but for investors, you are in a good position if you are long this market. Neil i have looked at the anomaly, maybe the weirdity, if theres such a word, of having stocks doing very, very well, bonds doing very, very well for distinctly different reasons. The stock market up on the prospect of maybe a trade deal sooner than we think with china, the bond market on lower rates if we dont get that deal with china. Its just weird. Its very weird. Its like the day the jobs report came out and the market actually went up. We are seeing unusual things happening. When the job report misses we usually have a very down day, yet that was seen as a great sign the fed would cut rates. Neil im sorry, what would happen if we do get a trade deal with china . People would obviously celebrate that. We have this uncertainty now moved aside but they might say wait a minute, maybe we are less likely to get a rate cut. We really, really wanted a rate cut. I know. Its just weird, being pulled in two different directions. Its complete chaos from the standpoint of normalcy. Neil i like that. What do you tell investors in this environment . You were bullish in the middle of the downdraft in december and everyone was losing their minds and their shirts. We stormed back from there, the average in the case of the s p, percent of alltime high from march, so they are not worried. If you are an investor watching at home, the most important thing that you have to avoid is trying to sell everything because you heard this from the fed, then buy everything because you saw a tweet there, or because you are guaranteed to not get that right. You are going to make mistakes that way. Right now, i still see an economy that, to President Trumps point, where its the strongest u. S. Economy we have seen in a very long time so if you are an investor, you want to stay invested. You take any massive pullbacks like we have seen recently, twice in the last eight months, look at those as opportunities to invest more, to put more money to work, but other than that, stay invested for the longer term because right now, you can argue neil whats the longer term . You can look out, you wouldnt be trying to trade for tomorrow. I think the mistakes people are making are trying to, say, trade for what the feds going to do or what chinas going to do when none of us know that. Stay invested. Neil you are both young people. Longer term to me is lunch. Rebecca, i just want to get your sense of this right now about if the Federal Reserve signals something a little bit more hawkish, maybe not an imminent cut or more data dependent, to michaels point we need more data, then what . Well, the market will react negatively because they priced in more cuts than that, but i agree, if they take that stance, im 100 in agreement because if we do ultimately not get a trade deal and the market does go back down, the fed is going to need to help us then. We dont need a federal funds rate that is basically weak and anemic. Neil all right. Well said. I must mention the president tweeting out this past weekend, rebecca, your first crack at it, if im not reelected we will have a market crash. What did you think of that . Well, you know, i dont know exactly if i agree but i will tell you that i do agree with President Trumps economy. I would much rather live and manage money in a trump economy than an obama economy. Just look at the gdp growth year to year, quarter to quarter, and the number of Jobs Creation and the unemployment numbers. Its just no comparison. Yes, i would rather be under President Trump than any President Biden or sanders or warren, certainly not warren with the wealth tax, no. Sanders with socialism, absolutely no. Im a tax lawyer. At the end of the day, socialism is a tax problem for this country. We need President Trump with the economy absolutely. Neil are there a lot of people like her, i dont know, feel the same way. The president is right, we do have a crash right after the election if that will happen. I will agree with President Trump on this because hes done so much, remember where we were when he came into office. Hes done so much for the small u. S. Businesses, for u. S. Focused companies, just probusiness. Yes, im with President Trump, reelection market, new highs. Neil thank you both very, very much. They call him the bond king probably because he owns more bonds than anyone else maybe save the United States government. He has a knack for telegraphing recessions just like he did the housing crisis more than ten years ago, almost to the day. Jeff gundlach and what he sees now, after this. In my line of work, i come facetoface with a lot of behinds. So i know theres a big need for new gasx maximum strength. It relieves pressure, bloating and discomfort fast. So no one needs to know youve got gas. Gasx. So nothe latest to inisnt just a store. Ty its a save more with a new kind of Wireless Network store. Its a look what your wifi can do now store. A get your questions answered by awesome experts store. Its a now theres one store that connects your life like never before store. The xfinity store is here. And its simple, easy, awesome. Neil all right. A lot of lawmakers, this time from both sides of the aisle, are calling for hearings over facebooks crypto currency that just sort of came out of left field here, and its getting a lot of buzz, not to mention lifting the valuations of anyone who has anything to do with this technology. Deirdre bolton picking it apart right now. This has really given them, not as if facebook needed it, but its a whole new business. Deirdre i think its a really successful pivot for the company. There are those who are based in Silicon Valley who politely disagree with me. But i actually think this is a really strong perspective, a really strong pivot for the company. They needed to do something. For two years we have been talking about whether its data breach or misuse of data, just p. R. Problem after p. R. Problem. This is positive. They are saying for the 1. 7 billion people in the world who do not have access to a bank account, we are going to make it easier for you to do trade with merchants or with each other. However you want to do it. I think this is a very smart setup. They also have this kind of digital wallet system functioning, its an association. Right now they have more than two Dozen Companies signed on but they are names we all know like visa, mastercard, they even have some Tech Companies involved, spotify, uber. Im assuming the longterm plan is that you and i can eventually pay for uber rides with our facebook currency called libra. Neil how does that differ, lets say, lot of people associate bitcoin with sort of the big name in this business. Deirdre bitcoin is peertopeer. You and i decide on what we are going to value, that we are going to give it, so this is actually different. Facebooks libra is backed by hard assets. That i see as a huge advantage to people using that, because it is backed by shortterm government securities, it is backed by real bank accounts. You have to have a government i. D. To sign up for this. Bitcoin neil this cant be something that the mob could nefariously take advantage of. Deirdre its critics say its still possible, just much, much harder. Maxine waters, who is not alone on the House Financial Services committee, is saying this should be halted, the entire development should be halted until congress and regulators have had time to look into it. Sheryl sandberg speaking this morning from france, c. O. O. Of facebook, says we need to speak with a lot of people. She emphasized this kind of Collaborative Movement which again, i do think is very strong on their part to be looking for 100 partners. That part of the business is going to be based in switzerland, a subsidiary, it is not owned by facebook. Neil concerned of facebook potentially abusing prooivacy privileges, wouldnt that be on steroids . Deirdre i think so. We have heard Mark Zuckerberg say we will not be using any transaction data at all to try to sell you a targeted ad, if we see i actually think that is facebooks biggest achilles heel right now, the trust factor in that company has been so eroded over the past two years and theres very few topics that are more emotional for people than money. I think facebook does have a p. R. Issue to address and i think thats why they keep talking about the fact this is a subsidiary and thats the system upon which their Digital Currency libra lives on and in theory you will be able to save kind of a digital wallet with that, you will be able to spend whether its at stores or neil i cant fathom it. Its all over my head. What i want to know is where is the underlying asset. Right . Thats always been the thing with the crypto currencies. Theres no there, there. I always wonder for the dollar, the euro, for all these traditional currencies, does Something Like this rattle the whole financial world . Deirdre so i do think there has to be buyin. As we know in the Financial Services world its one of the most heavily regulated of any global industry. Neil how do you regulate Something Like that . Deirdre there are a lot more questions left to be desired. Do they charge some sort of transaction fee. So far, from what we are hearing, no, but i think this is still at least a year away. Even facebook has said 2020 for even the most basic of function. I think this is a multiyear kind of rollout. But in theory, it will actually be pegged to hard currency and that makes it completely different in my view than bitcoin. If you buy bitcoin and you get hacked, you cannot cry to anybody. Thats it. Its gone. This is different. Neil thank you very, very much. You explained it so even i can understand it. I still think its, i dont know, the whole worlds going this way but give me something i can hold. Meantime, we got Texas Governor greg abbott on how his state is dealing with the crisis at the border and promises from the mexicans. Stay with us. Where people firsd to form the Stock Exchange which brought people together to invest in all the things that move us forward. Every day, invesco combines ideas with technology, data with inspiration, investors with solutions. Because the possibilities of life and investing are greater when we come together. Can we talk . We used to play so beautifully together. Now we can barely play anything. Even cards with the girls. If you have bent fingers, and cant lay your hand flat, talk to your doctor. It may be dupuytrens contracture. Your hand is talking. Isnt it time you listened . There are nonsurgical options. Take the first step. And learn more about dupuytrens. At factsonhand. Com neil all right. The polls might be all over the map but not the amount of money the president can raise. Within the first 24 hours of starting his second Term Campaign kickoff, 24 million. Not too shabby. More than three times, actually four times what joe biden raised in his first 24 hours, similar gaping gaps between the president s haul and what other Democratic Candidates have raised. Blake burman with more on all of that. Hey, blake. Reporter hey, neil. Lot of benefits to being the president of the United States, being the incumbent, when you run for president again. This is very clearly one of them. As the president has had a massive fundraising haul in just the first day of the official launch of his second term in office. You just threw the number there up on the screen, some 24. 8 million that he raised in the first 24 hours. A Campaign Official telling me that they kind of break this down into two different pots. On the one hand, 14 million and change going directly into the campaign, then another 10 million and change going to what is known as trump victory, the organizational setup that sends money to the campaign, money to the rnc, money to other state organizations as well. The end goal here, of course, being to elect the president. Bottom line here, just about 25 million raised in the first day. When you look at how that compares against democrats, the top three democratic hauls on day one in this election cycle, joe biden at 6. 3 million, beto orourke pulled in just north of 6 million in his first day, Bernie Sanders, just a shade under 6 million at 5. 9. Add that up, a little over 18 million. You could make the argument there is some 20 plus Democratic Candidates in the field so 6 million here and there, 5 million there, whatever the other 17 raise, you can put it all in one pot and its a substantial amount, too. But no doubt about it, the president pulling in nearly 25 million on his first day gives his campaign some headlines, some talking points, some ammunition Going Forward saying done worry about the polls, this shows the enthusiasm is out there for the president. Neil . Neil huge, huge. All right, thank you very much. Blake burman at the white house. By the way, little bit more than 40 minutes or so from hearing what the Federal Reserve is going to do. Everyone on tinterhooks about that except my next guest. A frequent critic of the Federal Reserve, jeffrey gundlach, he has about 150 billion under management. He had said not to long ago the fed predicted totally different policy than where they are now. How can they predict 2020 policy with a straight face. Jeffrey gundlach with us now. Good to have you. Good to be with you. Neil so you are not a fan, certainly, of the feds predictive abilities but what if it moves to a cut in rates next month, what do you think . I think theyre not going to cut rates today. I do think they are going to change their rhetoric again, talk about a lack of progress on inflation, which is kind of funny because when i was a kid, progress on inflation meant you were getting it down. Now progress on inflation is getting it higher. Its kind of weird. But the fed needs to change its rhetoric to get in line with what the markets are saying. Some people say the feds being harangued by the president , but its really being harangued by the bond market. The bond market has been saying that the feds policy is too tight by a very large amount for the past several weeks, if not few months. Neil do you think the fed simply cannot ignore that. They need to give some respect to what the bond market is talking about. So they will talk about failure to make progress on inflation, and they will probably talk about the reason the past forecasts werent so great was because the tariffs have gotten to be more of a problem than they anticipated. So thats the way they are going to find cover for talking about a future rate cut, probably in the not too distant future. They might even set the table for july, but certainly september. Neil a lot of people say it would be a mistake to cut in this environment because theres no reason to cut. Leaving that aside, you still, before any of this, we are talking about a 40 to 50 chance of recession in six months. Why . Why do you see that . Well, we have developed an awful lot of indicators that give us a little bit of a forward look on whether the economy might be weakening. For about 18 months ago, they were all superstrong. There was no sign of any economic weakness whatsoever. But one by one, its not a clean sweep by any means right now, but one by one, certain indicators have started to weaken. In particular, the Consumer Confidence in the president is very high but the Consumer Confidence in the future is very poor. Usually that relationship, when it gets to how its looking right now, starts to sense a recession coming within six to 12 months. Similarly, the most important indicator that the new york fed also uses in its recession model is the shape of the u. S. Treasury yield curve. People have been talking about this appropriately for a long time. But the threemonth bill yield compared to the tenyear treasury yield has every bit the look of a recession coming within 12 months and maybe within six months, because that rate is inverted. What would really kind of put the icing on the cake for that would actually be the fed easing, ironically. Lot of people think if the fed eases it will be an insurance policy against recession, but if past patterns are prologue, if we actually start steepening out the yield curve from an inversion, three months to ten years, thats actually a highly coincidental with the coming recession. So theres a number of things that are deteriorating. Also, economic data, citibank has an index that compares current data releases to their 12 month moving average and all over the world, those are steeply in negative territory and have been all year and in the euro zone, even for the last full year, not just year to date. So theres plenty of indicators the recession might be coming. Also, Consumer Spending, i believe, is at risk because of the tariff fears. We have already put significant tariffs on some chinese goods. If we end up putting tariffs on more chinese goods and do that coincident with the president talking about well, we will make a deal to remove the tariffs, that will absolutely put a halt to imports from china, because if you were going to buy something from china with a 25 tariff on it, and you suddenly started to get rhetoric that the tariffs might go away in, say, three or four months, you are going to stop that buying decision. So maybe the president is really as die boclever as some of his conspiracy theorists say and hes trying to get the economy weak now so Consumer Spending can rebound sharply in 2020 just in time for the president ial election. Neil who knows. Let me ask you about that. You mentioned the president. He has tweeted out the other day that if hes not reelected the markets going to crash. What do you think of that . Well, i think that i dont know about crash. Hes always fond of hyperbole. One thing that really is interesting is a lot of the current polls that have come out, i know its very, very early for 2020 president ial polls, but a lot of candidates in the democratic field are polling substantially stronger than the president is right now, and at some point i think if those polls start to become more believable, the market is going to have to start pricing in the fact that the Corporate Tax cut that buoyed the stock market obviously would go away. Many of the Democratic Candidates are vilifying Corporate America and obviously, as part of that, eliminating the tax cut would be a prime policy idea. So i think the stock market would drop if there was more confidence in a democratic neil i know its a tough statement at this point but do you think the president will get reelected . It depends on the economy. Im not even sure hes going to really run. If the economy goes into recession and he cant pull it out by removing the tariffs, theres very little for him to run on. Neil lets say hes running. He started yesterday. You think in that case he might pull out . Well, Lyndon Johnson ran for awhile, too. Then he pulled out because of the war problems. Neil youre right. Things can change. The base case is the economy does not slip, the president will win reelection. I think the fact that the market is hovering near its highs in spite of the fact these democrats are polling, some of them ten points higher in some of the polls than President Trump, suggests the market simply doesnt believe these polls, at least at this juncture. Neil you have been worried about our debt more than anything else, and you have been worried about this bubble that we ignore and all of that. Knowing that you saw the housing crisis coming well before the meltdown, do you see anything like that happening again . I think the next recession wont be a thing like the housing crisis. I think it will be a corporate debt problem. Interest rate manipulation solution. Because i think given the fact that last year, 2018, the National Debt grew by over 6 of gdp while nominal gdp grew by 5. 0 , i mean, it suggests the entire Economic Growth of 2018, in essence, was increasing the National Debt, it was debtbased. In the next recession, you would probably see an enormous increase in the National Debt, perhaps as high as 10 of gdp, which would under Natural Market forces, lead to higher longterm Interest Rates, exacerbating the recession. So what might end up happening is the Federal Reserve might have to come in and emulate the boj and start pegging the Interest Rate down to the level its low enough that we dont have this compounding problem with the debt. I see that as fundamental to the problem of the next recession. Neil or they would just start buying everything up in sight like quantitative easing that thats what i mean. Thats what manipulation is. Neil you are afraid that would happen again . I think this concept of modern monetary theory that you need Interest Rates lower than Economic Growth is already in the mindset of our central bankers. Look whats happening in europe. They are talking about going more negative, even more negative Interest Rates, yet we have a system of Corporate Finance where theres many Fragile Companies that should be gone, but they are being kept going as Zombie Companies because of the Interest Rate situation that were in. So jim grant writes a great letter and i got mine in the mail yesterday, and he talked about how weird it is that low and negative Interest Rates in europe are causing Zombie Companies to go on and they dont want Zombie Companies to disappear, so they need even lower Interest Rates, but its the negative Interest Rates that cause the fragility. They are in a circular logic where negative Interest Rates are causing fragileity but they think the answer is even lower Interest Rates. This is going to be a very big issue in the next downturn. Yes, i was very concerned about the Housing Market back in late 2006, but im much more worried today about the Corporate Bond market than i am about things like housing in the financial system. Neil especially those corporations with the not pristine debt, right . They are exposed to this, right . Well, take a look at Deutsche Bank. Deutsche bank is down 95 from 2009, its down Something Like 65 the last three years, and the stock is trading at around seven. I guess it has strong support, seven points lower, but the situation with the negative Interest Rates makes it impossible for them to really get out of this situation of endless price declines, so we have a Systemic Risk in the european Banking System and Deutsche Bank is emblematic of that fragility. Neil i talk to people who heard, and they respect you as do i, when you say 40 chance of recession or we are in a bear market when technically we dont have the drop but you have these other things that telegraph that we are, they say cash levels are at their highest in a decade so theres enough concern or caution or cynicism out there not for the markets to run away with themselves, that its not like the giddy 19992000 period, theres a lot more sober reality there. What do you make of that . There is always massive amounts of cash on the sidelines. The last refuge is oh, theres all this cash waiting to pounce into the market. There was a lot of cash on the sidelines in 2000, too. There was a lot of cash on the sidelines in 07. I dont think people hold cash waiting to go into a rising stock market. I think they hold cash for a variety of other reasons. I have never found that to be a convincing argument. By the way, the stock market is in a bear market. It dropped over 20 in the fourth quarter. The new york Stock Exchange composite is well off its highs and the global stock market is so far from its peak that its really an anomaly that the United States is hovering near its highs. Neil let me ask you a little bit about politics again and joe biden. He is the democratic frontrunner, the one who leads in all these states against the president. That could change but you did note that hes flipflopped playing to conservatives, playing to liberals. You think he will end up being the nominee . No, i dont. I think joe biden is kind of like, you know, a place holder type of candidate. Joe biden has been running for president for 32 years. In those 32 years, he ran two official campaigns and he did a couple trial balloons and chose not to run. But in those 32 years, hes amassed exactly zero delegates. Its almost hilarious that hes called this electable candidate because he dropped out in 1998 on a scandal and then he made it to iowa in 2008 and got less than 1 of the vote. I think joes time has passed. I have a nickname for him, j jurassic joe, a reference to the fact hes a politician from a different era. The Progressive Movement left in the party is going to be problematic. I have been reading recently that the mainstream of the party, the old establishment, is now starting to warm up a little more to a little bit left leaning but not so socialist candidate like elizabeth warren. I think she has a better chance than joe biden. I also think buttigieg has a reasonable chance, too. Neil interesting. You are referring to his first run, joe bidens 1998 run when he was charged 88. 88. Neil let me get your final sense of where the whole market is right now. You know this president pays a great deal of attention to it. Its often conflated with the economy. If youre right on this market, that its going to head into something worse, that cant be good for the economy, so whoever wins in 2020, theyve got a mess on their hands. Yes. If the market does drop, it would probably be quite consistent with that recession coming before the election. When the next recession comes, theres going to be a really big problem, as i said earlier, with the National Debt. They are going to have to go into some sort of extraordinary situation of basically money printing, i think, to combat the next recession. Universal basic income which some democrats are already running on. I think that sort of thing has to become a reality in the next recession. So you are absolutely right. In the next recession, the people in power across the developed world are going to have a lot of difficulty on their hands. So unfortunately, thats the consequence of a debtbased Economic System we have had in place for over 35 years. Neil youre at the mercy of it. Finally, a personal question. I have long respected your smarts and coming from nowhere to be a billionaire investor you are, but you like the buffalo bills. I know there is loyalty to the home, but its the buffalo bills. Could you explain that . Look, i grew up in buffalo. In buffalo, in the wintertime, once you go into december, theres really nothing to do. Other than watch the bills or go bowling. Back in the bowling craze when i was a kid. So im a big bills fan. I think actually, the bills are on the right track for once. Neil i hear that every year. I hear it every year. No, no, not from me. Not from me. Not from me. Not from me. They finally got rid of their ridiculous cap situation. Last season they had 53 million in dead cap. They were playing with 53 million less than other teams. Thats all gone. Go, bills. Neil all right. We will bet some chicken wings on that. Jeffrey gundlach, very good seeing you. Very good read on things. A lot more on this and if hes right, if hes talking about a slowdown or worse coming, are we prepared for that . Especially minutes away from the Federal Reserve announcement. Stay with us. Of your investments. Key portfolio events. All in one place. Because when its decision time. You need decision tech. Only from fidelity. You need decision tech. The Doctors Office might mejust for a shot. O but why go back there when you can stay home with neulasta® onpro . Strong chemo can put you at risk of serious infection. In a key study neulasta® reduced the risk of infection from 17 to 1 a 94 decrease. Neulasta® onpro is designed to deliver neulasta® the day after chemo and is used by most patients today. Neulasta® is for certain Cancer Patients receiving strong chemotherapy. Do not take neulasta® if youre allergic to it or Neupogen Filgrastim . An incomplete dose could increase infection risk. Ruptured spleen, sometimes fatal as well as serious lung problems allergic reactions, kidney injuries and capillary leak syndrome have occurred. Report abdominal or shoulder tip pain, trouble breathing or allergic reactions to your doctor right away. In patients with sickle cell disorders, serious, sometimes fatal crises can occur. The most common side effect is bone and muscle ache. If youd rather be home ask your doctor about neulasta® onpro. Pay no more than 5 per dose with copay card. Neil new york congresswoman alexandria ocasiocortez is under a whole lot of fire for remarks comparing the situation along the border and how i. C. E. Is treating folks with concentration camps. Texas Governor Greg Abbott is in charge of a border state and pledging 1 billion to help in this crisis. Governor, i havent had the chance to get your take on what she said so this is my chance. What do you think of what she said . First of all, what she said is completely offensive but that point aside, its endemic of what we are seeing from the democrats in washington, d. C. All they want to do is talk about this. They dont want to fix it. The problem on the border is not going to be fixed until democrats in the house step up and author and pass bills that fund border security, that fix a broken immigration system, that fix the broken asylum system. They need to stop talking and start voting and passing legislation. Neil so when she compares how they are treated in your state along the border to concentration camps, shes referring maybe with hyperbole here that theyre not treated well. You have been telling a lot of folks thats just bogus and the proof is you invite camera crews to see how they are doing and all that, but thats the perception. How do you counter that . Well, listen, people like aoc would be complaining if they were in the ritzcarlton. The bottom line is we have people coming crews oacross our illegally from around the entire globe now. This isnt just from mexico and central america. Its from congo and other places across the entire globe. The reason why we have thousands of people coming across the border is because of ocasiocortez and her peers in the u. S. House of representatives not passing laws to fix it. If they dont like it, they are the ones with the authority under the constitution to step up and pass laws. So it doesnt do any good for them to complain. They are the ones with the power to pass a law. If she doesnt like it or democrats dont like it, pass a law and fix our broken immigration system. As you pointed out earlier, the state of texas is having to come out of pocket almost 1 billion of our state taxpayer money to secure the border, to do the job that ocasiocortez is supposed to be doing herself. Neil the mexicans are promising to beef up and already are along their southern border, particularly guatemala. Are you hopeful between that and the commitment to be a third party, third country of designation, rather than the United States for a lot of these migrants, that that will lead to at least, you know, less of a groundswell of migrants going to your state, crossing through the border . You know, it is a very positive step in the right direction to see this meaningful cooperation by mexico, because it will lead, hopefully will lead the a reduction in the number of people coming across the border illegally. This is a good structure for us to work with, because the asylum laws that we have in the u. S. Are broken, that requires the u. S. To have to house people who come across here, so if there are these methods working in collaboration with mexico that will reduce the flow of migrants across mexico, that will reduce the number of people coming from mexico into the u. S. , that should lead to beneficial effects with regard to reducing the number of people coming into texas illegally. That said, this problem is not going to be fully solved unless and until Congress Steps up and starts using the power of the constitution given only to them to start passing laws that fix a broken antiquated immigration system. Neil governor, we ran out of time. I do want to talk about some of the help you are hoping to provide texans on the real estate taxes front. Maybe in a followup interview. Meantime, thank you. Very good seeing you. Thank you, neil. Neil meanwhile, we got stocks sort of on tinterhooks waiting to hear what we will hear from the Federal Reserve. Stay with us. Thanks for coming. No problem. Youre welcome. This is the durabed of the all new chevy silverado. It looks real sturdy. The bed is huge. It has available led cargo area lighting. Lights up the entire bed. It even offers a built in 120 volt outlet. Wow. Plug that in for me. Whoa holy smokes oh wow and the all new silverado has more trim levels than any other pickup. Whoa oh wow very cool. Theres something for all of us. Absolutely. Its time to upgrade. laughter at comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. The fed needs to change its rhetoric to get in line with what the markets are saying. Some people say that the feds being harangued by the president , but its really being harangued by the bond market. I mean, the bond market has been saying that the feds policy is too tight by a very large amount for the past several weeks, if not few months. Neil do you think that . And the fed simply cannot ignore that. They need to give some respect to what the bond market is talking about. Neil all right. Just a few minutes ago with jeffrey gundlach, the socalled bond king, holds more bonds under management than anyone save the u. S. Government. Saying he sees a recession, a slowdown coming, and whatever Jerome Powell is going to indicate in a few minutes isnt going to change that prospect. Former Jpmorgan Chase chief economist on all of that. Good to see you, my friend. Good to be here. Neil what hes saying is here comes the slowdown, no matter what you hear today. The reality is that the economy is slowing down. The real issue is, is it slowing down enough to put us on the brink of a recession or is it just slowing down. I think that so far, the economy is just slowing down. Were not going to grow at the 2. 9 or 3 depending on how you measure it of real gdp growth we did last year, but we certainly are going to grow probably a little bit in excess of 2 , which by the way, is still nothing close to a recession. Yes, we are seeing some indicators that suggest the economy is slowing, the new york pmi as a case in point. Neil Morgan Stanley survey. All those things. But the labor market is still strong, Consumer Confidence is still strong enough. So all those things suggest to me that the economy will hang in there certainly at least one more year. Plus, you generally dont see recessions in the third year of a president ial cycle. I dont care if theres a democrat in the white house or a republican. It just rarely happens. Neil all right. What he seems to be saying, though, is the market is kind of whistling past the graveyard, that its beneath us and they are looking for the technical definition of a bear market when in fact, you heard this, the relative majority s p 500 stocks were already in a bear market, 20 or more from their highs and the confluence of data is going south fast. People will argue that with him, as did i, but what do you make of that, that he says this is it, you have had your market rally, you have had your boom, its over . I dont think its over yet. I think there are still ways to tinker with the overall economy, just make it a last a little longer. That doesnt mean we conquer the business cycle. We have not. It doesnt mean we cant neil what does the Federal Reserve have to do . Word is they are going to cut next month. Well see. Will that be enough to keep it going . I think that right now, giving a shot in the arm to extend it a little bit longer, i think one of the things the Federal Reserve does not want to be is a spoiler. They certainly try to be neutral. If somehow they dont do everything they can to prolong the economic expansion, then at the can fall into that camp where they get blamed. Neil you are the expert. I play one on tv. I see no reason to cut rates right now. It would be one enter something really deep, bad and problematic but were not. This talk all started during the height of the mexico trade issue, where the Federal Reserve i think was signaling we got your back if everything hits the fan. Thats solved. Now its looking increasingly like something will be done with china. So no need to press. At this point, we had two trade tensions. We had the mexican and of course, we have the asian or the chinese. The mexican one as you correctly point out has been solved, at least temporarily. Thats always a big question. But the chinese one, we are at least moving in that direction. Neil what if we get a china deal . Do we even need to talk about a rate cut . I think if we get a china deal, we get the mexican usmca passed, i think that buys the Federal Reserve even more time. However, the neil the markets now are so, they want this so badly. They are going to have a hissy fit of historic proportion. Because one of the things chair powell can talk about today is well, lets look at all the damage that was caused to the economy because of all this trade uncertainty. Even if we resolve everything, sufficient damage was done that we may need at least a token cut to sort of get the economy a boost in the arm. Neil normally you do that, its not a good thing for the markets, though. Because historically, when you do that, you do that a little bit too late. If you do it preemptively as you correctly point out, the economy doesnt really, really need it, you do it preemptively and the market understands that we get a free pass. Neil always good seeing you, my friend. We have known each other for decades. Covered many a bull and bear market, recession, meltdown, all that. We still talk to each other. In the meantime, investors are awaiting that fed decision. More to anthonys point how Jerome Powell is going to explain it. That is really the crucial point. We are on that, after this. The lexus es. Every curve, every innovation, every feeling. A product of mastery. Lease the 2019 es 350 for 379 month for 36 months. Experience amazing at your lexus dealer. You can earn 100 off your deductiblee, for every year of safe driving . Sing that. Vanishing deductible, you can. Earn 100. Earn 100 off. Off your deductible. Deductible. For every year of safe driving. For every for every for every year of safe driving. What are you what key are you in . E. No, no, go to g. G will be too high. Not for me. Vanishing deductible. Oh, gosh. Sweet, sweet. Neil all right. We are not budging, folks. Stock market is barely moving looking at one of the best unions going all the way back to 1940. Bond market is tight and quiet. Currency market is same way. Waiting to hear from the Federal Reserve which could be a correction course even if they dont make the cut announcement some expect, that will happen next month. They will signal that. Everyone pays attention to the signal and words Charles Payne to take you through that and much more as only he can. Charles this is the most exciting fed day in a long time. We have it covered. Good afternoon, im Charles Payne this is making money. Breaking now, i cant tell you how big the moments are. Few minutes away Federal Reserve decision will come out. It is followed these days by the press conference, chairman jay powell. That begins at 2 30. The central bank are not expected to cut rates today, eninvestors are anticipating that the fed will signal rate cuts are on the horizon, possibly as soon as next month. Now the proking scrutiny on the fed has elements of modern entertainment with pushes for modern Monetary Policy and objectives, for ways to invest in them. This is under jay powell. President trump even as he criticizes the European Central bank for doing the same thing. Beyond the political inkrieg fed has to counterbalance the markets. Edward lawrence at fed rael reserve right now. Edward. Reporter charles, no rate cut forecasted this year. Maintains federal funds rate 2. 25 to 2. 50. Voting members were one member away from a rate cut this year. Two members away from two rate cuts this year. Seems like a sharply divided fed from the fomc statement as well as data coming in. St. Louis president James Bullard was vote against maintaining rates. Bullard wanted to cut the benchmark rate 25 basis points. For next year the fed pen pencils in one rate cut. Fomc drops the patient language and adds that the fed will