There are concerns over lower Interest Rates, that did dampen profits, but that certainly helped markets overall trade up. Joining me now to look back and ahead is the founder of pointview Wealth Management and the president , david dietz with 400 million in assets under management. Its great to have you. This week i feel like it was a lot about the Federal Reserve. On friday you had the president of the new york fed saying, what did he say, lets prevent an ounce of prevention is better than getting behind. So he was advocating a 50 basis point cut in the rate from the fed in two weeks. Whats your take on what went on this week . Well, certainly, i think the fed is the number one story, of course, despite it was the start of earnings week, and the question is will they or wont they next week in terms of a rate cut, and if they do, how much. Were kind of getting baked in for a quarter point cut, but then, you know, williams came out yesterday and talked about when you have very little gun powder, use it off quickly. Shock and awe or a pound of prevention can help immune nice us from whats going on overseas. The 50point basis cut is in the market, and markets are responding positively. Maria i know. But then the new york fed tried to walk back the comments, oh, he wasnt talking about july 30, but theres a chance now. Certainly those chances have raised considerably. Obviously, some people are upset he kind of frontrun the meeting, so we really dont know, but it does set a positive tone as we ended this market week. Maria yeah. But, david, i feel like if the fed cuts 50 basis points, you have to say to yourself what do you know that i dont know. Here we are talking about an economy with very strong numbers, better than 3 growth in the First Quarter, unemployment at a 51year low. If they cut by that much, will that concern you . Of course its going to concern us. I think its all about the messaging, and i think theyre going to have to walk a fine line saying the u. S. Consumer is holding up the rest of the world. Unemployment rates very, very low, retail spending is great. We may actually see some good manufacturing numbers, but we dont know about is what ails the rest of the world, and were seeing very sluggish economy, will that wash ashore here and why not cut rates now so as to immunize us. Maria lets zero in on earnings. By the way, youve got the fed meeting on the 30th and 31st, next week youve got ten dow components reporting earnings, and in addition to the fed meeting, thats also the date of the pmis, the purchasing managers indexes. And thats where we first figured out there was a weakness in manufacturing. Microsoft is the stock that you mentioned before we came on the air. Was this reflective of microsoft and leadership, or was this reflective of an Earnings Period thats not as bad as all the doomsayers predicted . I think its both. When you have the Largest Company by market cap on the planet coming out with doubledigit re knew increase, profits, thats got to set a positive tone because they cant do it without a lot of demand out there. On the other hand, i tip my hat, he has positioned microsoft so theyre breathing down the backs of amazon in terms of the cloud offering, going gang busters, theyre also pioneering and making money hand over fist with converting people from buying onetime, perpetual licensure software to converting it into software as a service, theyre coining money as far as the eye can see. That cheers investors and finally, of course, theyve got that monopoly in office 365. Theyre skillful in terms of the way their positioning is, no one in congress is beating them up, and its a sticky product, so that bodes well. Maria sort of been there, done that, right . They were the target of antitrust and everybody else in Government Back in the 90s. Look, you didnt see the kind of performance at sap, you didnt see the kind of performance elsewhere, maybe oracle. Microsoft really did well, thats the story. But what i like about any della is hes no drama, hes not making provocative acquisitions like food stores that are outside their traditional business, you know . Hes not going out and trying to come up with brand new currencies which are raising the ire of regulators. Hes staying focused, and i think that bolds well for microsoft and should be a good example for the rest of the companies out there. Maria so look ahead to next week, the ten dow components. You mentioned starbucks is another one in the upcoming week, but give me your sense of the Second Quarter earnings season. I know its only week one, but going into this period a lot of doomsday sayiers saying earnings are going to be down for the s p 500. Are they beating the lowered estimates . Yes, they are. You know, we were coming into this earnings season with basically flatline expectations, and now those are starting to creep up. And i think theres several themes out there. One of the themes which was reflected well when the large banks reported is if you are consumerfocused, you are doing well. The u. S. Consumer have jobs, theyre optimistic about their economic life, and, you know, the mortgages and the credit card business doing well. But to extent that youre focused or exposed to the global economy, there is more volatility. Trading revenues was down. So i think youre going to see that going forward, those companies which are consumeroriented like starbucks are bound to do well. Csx, for example, which are exposed to the vagaries of the global economy, they missed expectations last week because of concerns over the trade with china. You know, need to be cautious about those names. Maria so you think the consumers getting stronger right here . Yeah, i do. Because i think that theres still more people coming into the work force coming off the bench who actually werent looking for a job. Inflations staying low, so theyre not facing higher prices, gas prices are stay thing low, so i think thats a positive. Maria great to have you on the program. David dietz joining us. Dont go anywhere, my interview with sam zell is next. More wall street coming up. The economy keeps chugging along, but is the inevitable slowdown around the corner . The real estate titan sam zell doesnt seem to think so. All i know is i keep looking for problems and having trouble finding them. He lays it out when wall street returns. Award winning interface. Award winning design. 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Salonpas lidocaine patch blocks pain receptors for effective, nonaddictive relief. Salonpas lidocaine. Patch, rollon or cream. Hisamitsu. But some give their clients cookie cutter portfolios. Fisher investments tailors portfolios to your goals and needs. Some only call when they have something to sell. Fisher calls regularly so you stay informed. And while some advisors are happy to earn commissions whether you do well or not. Fisher investments fees are structured so we do better when you do better. Maybe thats why most of our clients come from other money managers. Fisher investments. Clearly better money management. Maria welcome back. With the u. S. Experiencing its longest economic expansion in history, some investors are starting to fear that we could be due for a slowdown just because its more than ten years. Real estate is one key area that investors and the Federal Reserve pay close attention to. Joining me right now is a titan in the industry, one of the most respected real estate tycoons in the world, sam zell. Its great to have you. Thank you so much for being here this weekend, and i want you to give us your 30,000feet assessment of the economy. Here we are talking about a Federal Reserve thats going to cut rates in two weeks, and yet things feel pretty good. Yeah. You know, they say that the stock market goes up on a wall of worry. Everybodys worried about ten years. I thought it was the interesting to think about the fact that maybe its not ten years, maybe its only five years. If you look at the real estate business, march of 09 was the bottom of the stock market, but march of 09 was not the bottom of the Real Estate Market. That didnt happen til four or five years later. So i dont know when it began and i dont know when it ended. All i know is i keep looking for problems and having trouble finding them. Maria but you have been an incredible, i dont know, i dont know if you mean to be a timer of cycles, but you really call cycles. I mean, when you made that huge sale at the top selling to steve shah wartzman, people thought this guys brilliant. He knew exactly when things were about to turn. If i really knew, id be rich. [laughter] maria so you dont see signs that were about to slow down in a considerable way. Just the opposite. I mean, i want to see signs because my logic says it should be time. But i think that the overall change in the environment since 2016, i think, has changed how we value or evaluate the system. I had a conversation the other day with someone in a very regulated industry, and i said, you know, how is the world different . And he said for eight years we spent all of our time talking to regulator about how much the fine was going to be. Since that time we spend all of our time talking with the regulator on how to avoid a fine. Thats enormous change emotionally in the Decision Making process of executives in the business community. If they dont think that theyre the target anymore or the only target, they have a very different perception of risk. Maria this is a really important point that youre making because we have a president right now that is a business president and somebody whos definitely focused on the markets. So a lot of times i say to some of the market people that come on youre not really worried, are you, because you think President Trumps going to do everything he can to keep the economy up and the stock market up. Thats what a business president does. Under president obama we had all these rules and regulations, companies sat on cash. Sure. Well, the bottom line i think is that the Obama Administration was about redistribution. Maria right. The Trump Administration is about growth. I think after eight years we learned that redistribution doesnt work and that our system is not built to deal with redistribution. Its built to deal with growth. And i think that the change from redistribution of growth is whats really going on in the markets. Maria this is such an important point. And i want to get more into this later on in our interview when we talk a little bit about whats going on in terms of the politics, because i dont know that certain congresswomen and congressmen understand the narrative of growth versus redistribution. But let me stay on the Real Estate Market and Interest Rates, because in two weeks were expecting the fed to cut rates as high as 50 basis points. What is that going to mean to the Reality Market and the economy, in your view, when we see rates coming down . Already were talking about rock bottom rates. Yeah. I think that rates coming down is likely to have minimal effect. I dont know, im not a big fan of very cheap Interest Rates. And, frankly, i think that a perpetual period of Interest Rates that are suppressed below the inflation rate are, frankly, very dangerous. Dangerous from an inflationary point of view because if you suppress it, it comes back. But theyre dangerous also from extracting from the economy a sense of urgency. We need a sense of urgency. We need a reason to make decisions. We need a reason to take risks. The lower the rate, the lower the reason to create that sense of urgency. And thats not healthy for our economy. Maria lets take a short break. When we come back, sams going to give us his outlook for the second half of the year. Weve got a lot more to discuss after this quick break. Stay with us. Sam zells investments have made him billions, so wheres his next billion coming from . As an investor, youre fact is, every Insurance Company hopes you drive safely. But allstate actually helps you drive safely. With drivewise. It lets you know when you go too fast. And brake too hard. With feedback to help you drive safer. Giving you the power to actually lower your cost. Unfortunately, it cant do anything about that. Now that you know the truth. Are you in good hands . carrying up to 50 times its tbody weight. Essly marches on. It never questions the tasks at hand. But this year, theres a more thrilling path to follow. father kids. Change of plans vo defy the laws of human nature. At the summer of audi sales event get exceptional offers now while managing your type 2 diabetes why think about your heart . Lower a1c helps, but type 2 diabetes still increases my risk of a fatal cardiovascular event. And thats why theres jardiance the first type 2 diabetes pill that offers a lifesaving cardiovascular benefit for adults who also have known heart disease. It can significantly reduce my risk of dying from a cardiovascular event. And it lowers my a1c, with diet and exercise. Jardiance can cause serious side effects including dehydration, genital yeast or urinary tract infections, and sudden kidney problems. Ketoacidosis is a serious side effect that may be fatal. A rare, but lifethreatening bacterial infection in the skin of the perineum could occur. Stop taking jardiance and call your doctor right away if you have symptoms of this bacterial infection, ketoacidosis, or an allergic reaction. Do not take jardiance if you are on dialysis or have severe kidney problems. Taking jardiance with a sulfonylurea or insulin may cause low blood sugar. So, now what do you think . While my a1c is important, theres so much more to think about. Ask your doctor about jardiance today. Theres so much more 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. Maria welcome back. We continue my conversation now with real estate tycoon sam zell. And sam is the founder and chairman of equity group investments, real estate billionaire investor and has been for so long, and thats why really i want to get your take on what youre expecting for the second half of the year, sam. I know you have not been an investor in europe before. Tell me about that, why. Would you look at europe . What about the u. S. Right now. Yeah. Weve never been weve never found europe very attractive. As an invest ifer investor, your focus by definition is where is the demand. You look at the 30 some odd countries of europe, over half of them are demographically negative; less people at the end of the year than the beginning. By definition, to me anyway, that means theres less demand. So that plus the fact that i think europe has been a welfare state for so long that i dont think they know how to not be one. Maria yeah. And so i think its a place where i want to go to eat food and wine, castles [laughter] ride my motorcycle. Maria not putting much money there. Yeah, because europe has had a really hard time generating any growth. Here in the u. S. We got 3 in the First Quarter and, i dont know, second half of the year looks okay. What about the u. S. . I think the, you know, ive been, you know, ive been worried about the u. S. Just by virtue of the fact that its been a long time of positive numbers maria and were all talking ourselves into it. On the other hand [laughter] you know, as i said before, you know, the stock market goes up on a wall of worry. So everybodys worried, and its very rare that we have a crisis when everybodys worried. We only have crisis when everybody isnt worried, and we get blindsided. I think the u. S. Is better than conventional wisdom suggests. Its not burning up. I think the real estate segment, commercial real estate continues to be benign. Moving more supply on the opposite side e that i would be concerned about and i think probably, you know, we still have not were a long way from any resolution on retail. Maria you have also invested in waste, waste companies. Yes. Maria whens the attraction there, sam whats the attraction there, sam . Well, first of all, everything i do is oriented towards supply and demand. So were the largest owner of a Company Called covanta, waste Energy Facilities in the world. What were doing is were burning garbage and creating electricity. Were also replacing landfills that are being eliminated worldwide because they figured out theyre economically ine sane. Maria fascinating. And last time i checked, there wasnt going to be a shortage of waste. So that, from our perspective, made sense. And we also invested in the collections side, because thats an area where theres a rollup going on, and were getting bigger and Bigger Companies as opposed to ma and pa that in the old days dominated the industry. Maria so does the market feel like its trading the way it should be given the backdrop . I mean, youve seen this weekend very bullish on an economy that keeps on growing, that we keep seeing opportunity even if we are going to see a rate cut which seems to be in the bag, is the market justified where it is, in your view, or do you think were in for a pretty good selloff here . Well, the answer is i dont know. Maria i know. I wish i knew. Maria whats your gut . My gut says that the market is more bifurcated than capable of being described as remarkable. The pricing of a lot of these hightech things, im not smart enough to understand, and i dont understand what multiple you put on a company thats losing 4 billion a year. I just dont understand it. I guess i have to go back to school [laughter] and somebody has to teach me. Matt ices again. Mathematics again. On the other side, we have Numerous Companies that are trading at what i think are very attractive prices that are the in, quoteunquote, out of favor industries. So as a result, i end up investing in out of favor industries. I mean, like right now i think that almost all discretionary capital other than from the Big Companies has disappeared from the [inaudible] and weve gone from enormous oversupply of capital to an enormous shortage of capital. Which is creating some very interesting opportunities that werent there two years ago. Maria are these the Energy Producers, or are these the Service Companies . These are the Energy Producers who have spent an awful lot of money over the last, you know, ten years developing, you know, sites and now dont have the money to complete those sites because, basically, the oil industry has not been returning its cost in capital. Now, theres only one other industry in history that i know of that over a very long period of time has not produced its cost to capital, and thats the airline industry. And, you know, i think the oil industry, oil, gas, etc. , has to adjust to reflect the cost of capital justification. Maria would you look at the large ones . Well, the big ones have the independent bank network and Balance Sheet where theyre not short of capital. Its the independents and the smaller ones that have literally been shut off. Maria really great advice, sam, as always. Great to talk with you. Great, my pleasure. Thank you, maria. Maria great to see you. Sam zell. Dont go anywhere, more wall street right after this. Choosing my Car Insurance was the easiest decision ever. I switched to geico and saved hundreds. Thats a win. But its not the only reason i switched. Geicos a company i can trust, with over 75 years of great savings and service. Now thats a winwin. Switch to geico. Its a winwin. Is it to carry cargo or to carry on a legacy . . Its show of strength or its sign of intelligence . In crossing harsh terrain or breaking new ground . This is the time to get an exceptional offer on the mercedes of your midsummer dreams at the mercedesbenz summer event, going on now. Lease the gla 250 suv for just 329 a month at the mercedesbenz summer event. Mercedesbenz. The best or nothing. When crabe stronger. Strong, with new nicorette coated ice mint. Layered with flavor. Its the first and only coated nicotine lozenge. For an amazing taste. That outlasts your craving. New nicorette ice mint. Maria welcome back. Coming up next weekend on the program, home depot cofounder and billionaire philanthropist ken land gone is my potential guest. Well also talk with the president of nyulangone. Next weekend right here. Ill see you sunday morning on the Fox News Channel for sunday morning futures. My special guest, the bank of america Ceo Brian Moynihan along with white house trade adviser peter navarro, dont miss it sunday, live, fox news, 10 a. M. Eastern. Plus, right here on fox business, tune in weekdays from 69 a. M. Eastern for mornings with maria right here on fox business. We hope youll start your day thatll do it for us for this weekend. Thanks so much for joining me, ill see you again next time. Have a great weekend, everybody. Gerry hello and welcome to wall street journal at large. Well, no issue in americas long history as fraught with tension as the issue of race. From slavery to civil war and reconstruction, jim crow and segregation, to Civil Rights Era and today, race has run through americas story like a complex thread. This week, of course, this great fault line in americas identity opened up again after President Trump used twitter to blast several Democratic Congress well of
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