Making money. Charles stocks lower on Global Growth and trade concerns. Deirdre bolton at the New York Stock Exchange exactly what the inverted yield curve means. Why the market is selling off. Deirdre . Charles. A lot a cover here. We are off the session lows. If you look at dow. One putting pressure on dow, jpm, walgreens, goldman sachs. We know in the inverted yield curve position the banks have a tougher time making money through their lending business. So that is why we are seeing financials pressured overall as well. S p 500 not a surprise, charles at these levels. Higher interest, more money for having lent it for longer period of time. That is the logic of the bond market. That is how it works. At this point we saw inversion and essentially shows that investors, well, theyre just anxious about the future. Theyre anxious about the underlying fundamentals of the economy. Now of course these moves can come and go. But today it is about selling and it is about larger economic anxiety. So we are seeing that basically showing up across the board, if you look at fed funds futures what investors are waiting, expecting the fed to do, we had 100 chance after 25 basis point cut in september and 20 chance of a 50 basis point cut in september, charles. Charles i thought it would be higher than that. Thank you very much for helping us understand that more. Folks with the spread between the two year and 10year yields turning negative this morning it is to deirdres point First Time Since 2007, sending a potential alarm for recession. Reagan economist art laffer. Typically on average the stock market peaks 18 months after inversion. Economy peaks 22 months after invery. Not necessarily recession after the corner. Some are saying not necessarily will be recession at all this time . I dont see any reason for recession right now unless something in the future that develops quite material like a trade war or Something Like that. Right now, i dont see any change in policies. The tax bill is working nicely. Monetary policy a little slow catching up. They should drop the rate couple, half a percent or so if you look at all of this. Let me say, trade issues are extremely important to the market, and market is extremely important to the future of the economy. Just the drop weve seen from the peak to right now, charles is a loss in u. S. Wealth of about 1. 7 trillion. Which is a huge amount of money. It puts into perspective all of, that is only 30 billion. We lost 1. 7 trillion in wealth because of i believe fear about the trading market, what is going on in china. So when i look at this world, i dont think were in a recession. I dont think were going into one but if the trade thing were to come around to be food, i think we could pull out of this very quickly. Connell are you saying 30 billion justifies 1. 7 trillion in losses . Well that is what the numbers are. Extra 10 on 300 billion in trade with china. Unless i did my math wrong. Charles that is that a legitimate fear, correlation though . I think about 1 1 2 trillion. Charles right is. I look at wilshire 5000 every day. I do the math myself. Im Say Something that legitimate correlation, art . Should it be down that much or is this an overreaction . I dont know depends what happens in the the future with the trade deal. If the trade deal comes through it is way overreacting. If the trade deal doesnt come through and there is trade war, may be overreacting. You look what happened with the smoothawley. I dont mean to talk about smoothawley. The market fell 90 . When i was in white house 1970 to 1972, devaluation of dollar, 10 import surcharge, Job Development credit, excluded foreign aid, we had protectionist administration, the stock market fell by 50 . When you look at it historically trade has a huge, huge net effect, way beyond what you would expect given the size of how much trade there is. It is really very important to markets. One of your previous guests said, it has been a long time for the boom to occur, that is not what causes recessions. Recessions are caused by policy actions. They can occur in taxes, occur in spending. Occur in regulations. They can incur because of trade policy. That is only thing i see we have a big issue about right now. Were with china. I would love to see a great free trade deal done with china that would boost the market by well over 5,000 point, this morning we were greeted with really poor Economic Data out of germany, poor Economic Data out of china. Socalled global recession. That is not playing a role at all . Every time we get numbers out of china, it sent our bond yields diving lower as money continues to come from around the world, pouring into our 10year bond, which might be skewing historical reference that we use. Maybe this time is somewhat different. Weve never been in a world, art, with 17 trillion with a t, of negative yielding rates and all these global economies going down at same time except america. The rest of the world is in recession, theyre in very bad shape. That does impact us, charles. Youre completely correct. Weve been fighting against it because weve been doing very good policies while they have not been doing good policies. Why we are performing well and they are not performing well. They are drag us down, they are drag us down with Interest Rates. When you have negative Interest Rate yields around the world, how can u. S. Yields be higher than rest of the world. Our policies made us very resilient. Charles art, thank you very much. We always bring you in. Charles, youre great. It is my birthday today. Didnt wish me happy birthday. Look amazing for 38. Im going into my 80th year. Can you believe it. Charles youre for real. Youre a great guest. You give us straight with experience goes along with knowledge. Thanks, art. Thank you, charles. Charles folks, want to bring in more experience and knowledge to break down what is happening for market. Danny hughes, cofounder and chief investment officer. Danny, you heard art. There are a lot of factors going into this. People are looking from historical perspective. Although there are some unique aspects to what is happening right now with this inverted yield curve. Absolutely it unique. Weve been in artificial rate environment for many, many years, starting back in 2008 when we had the when we had the global catastrophe, we have not been able to recover from that particular standpoint. Globally things have been in a slowdown for some time, we have been in extra innings for number of years. Charles experts are saying late cycle for couple years now. You wonder how long the late cycle lasts . Its a super late cycle. It helped everybody who is invested in the stock market. People are believing this can never really end. Days like this or weeks like this i should say have been a long time coming. Will probably be in tune for much more. I think real impetus of this has truly been the trade, what turned into like a trade war, rattling of sabres. Im not going to do this, but im going to do that, Junior High School make up, break up between the u. S. And china. That has put a lot of issues on edge. It put a lot of companies on edge. Youre hearing it in forwardlooking guidance, with Companies Like macys. Charles right. Because of all these worries and concerns were marking everything down. Charles i dont know i want to use macys as an economic indicator. Absolutely not. Came out today. Charles they have been going down a long time. Well follow up later in the show. Weve seen maybe a slowdown in business investment, although some people referred to the Third Quarter of last year. That was a monster quarter. Well not repeat that too often, but what about the consumer side of this . 2 3 of the economy so far looking extremely strong, does not at this point appear to be slowing down . Right. I think the odds of u. S. Inflation recession, even where we sit today, still seems pretty low. You have got a very strong consumer. Very strong labor market. Wages are good. Oil prices, Energy Prices are low. Interest rates are low. So i think, not surprisingly Consumer Confidence is pretty high. When they start to see headlines about the stock market, when they start to see headlines about trade uncertainty, sure that will shake things a little bit but not necessarily send consumers into their basements. Charles on that point, i worry more about the selffulfilling aspect of this. I think in december we came very close to recession in part because the media really, really pushed the narrative for many reasons, including political. You have to wonder, people start to read papers, start to look at their smart phones, see what is the market is doing. How much that could curb the consumer. Weigh that against these strong wages that are going up the best they have well over a decade. Job security. And the fact that consumers are sitting on 8. 1 savings. They have cash. They can service the household debt, danny. What would it take in your mind for them to sort of start to panic . Theyre at full employment pretty much. Charles right. It become as selffulfilling prove if i, you hear on the news, should i be concerned and you open up your 401 k , im down considerably from last month, what is happening. Maybe i need to tighten my belt. What is adding to the consumer wealth, borrowing like there is no tomorrow. There are different ways that consumers can borrow today, pushes it out on its own yield curve. When they hear inverted curve they dont know what it means but it worries them. Charles real quickly, i want jack for the last word. Are you making changes in your portfolio. No, were taking advantages of today. Charles youre mostly a buyer . Were a buyer. Charles jack, what changes to turn this thing around . Well have to turn this around. I agree retired fed chair yellen this is more technical. I dont necessarily think this is economic indicator. What art laffer said when you have trillions and trillions of dollars of negative bond overseas, of course foreign buyers are washing up on the shores buying our treasurys. This has to be resolved. This by itself is not indication were sliding in recession. Charles this seems counterintuitive to people, money coming into the United States would trigger this kind of problem. Danny, jack, thanks for helping audience. Thanks. Charles dont go with us or anywhere. Ongoing unrest in hong kong is spooking markets. New satellite images show what appear to be chinese Armored Vehicles near the hong kong border. The question now, is this situation about to hit its boiling point . My body is truly powerful. I have the power to lower my blood sugar and a1c. Because i can still make my own insulin. And trulicity activates my body to release it like its supposed to. Trulicity is for people with type 2 diabetes. Its not insulin. I take it once a week. It starts acting in my body from the first dose. Trulicity isnt for people with type 1 diabetes or diabetic ketoacidosis. Dont take trulicity if youre allergic to it, you or your family have medullary thyroid cancer, or have multiple endocrine neoplasia syndrome type 2. Stop trulicity and call your doctor right away if you have an allergic reaction, a lump or swelling in your neck, or severe stomach pain. Serious side effects may include pancreatitis. 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Massive protests on hong kong, taking a significant effect. That is where well find our very own susan li. She is live on the ground in hong kong. I want to go to her now. Susan, give us an update. Susan so we are looking at the fight being taken to the streets once again. Yesterday we saw the clashes at hong kong airport because the Hong Kong Airport Authority received a Court Injunction which bars pretty much everybody except for the press and those with actual flight tickets. A lot of protesters couldnt get in the hong kong terminal today. In kowloon district in a suburban area hundreds of protesters were amassing. Hong kong police attending as well. More tear gas being lobbed as some of protesters reportedly began shining laser beams at hong kong police. That has simmered down, were about 2 00 a. M. At hong kong time. For the economic artery, the transport artery, the 8th business airport in the world back up and running after two days being shut down. The hong kong terminal receiving departures and also arrivals as well. We have a state Department Warning issuing increased caution for travelers here to the city of hong kong. People are able to get out of the city as well. We still have a few dozen protesters camping out in hong kong terminal. Doing what they have been doing, which is planting their flags. Putting their posters down. Saying were fighting for rights, freedom and democracy. Charms. Charles susan, before we let you go. You mentioned neighborhoods and districts. This feels like more extraordinary with protests breaking out in hong kong. Is there some significance of that . I just think that it is basically spreading out across the city. Weve seen protests taking place in the Main Financial districts of admiralty and central. These are pretty much where the tall skyscrapers are placed. Weve seen in more suburban areas and northern parts of the city. It is pretty much dotting across the Hong Kong City at this point. Charles susan, be careful. Well come to you as often as possible. Thank you very much. Folks i want to hear help us break down political ramifications of the protests, particularly for our country, bring in former National Security council chief of staff fred fleitz. Everyone is saying the world is watching. Were in the midst of a trade war with china. China is in the midst of trying to spread its own form of diplomacy throughout the world through debt financing. The world stage is on edge but how much . Well, charles, good to be here. What were seeing in hong kong is inspiring but very ominous. We see people risking their lives for freedom. But it is a categorical rejection of the communist system. Basically affirmation communism only exists in china because it has been force on the people. They would get rid of it if they had the right to do so. Im very worried what is going to happen. The Trump Administration has to find a way to get both sides to stand down, and honor the 1997 agreement that says, one nation, two systems in hong kong. Charles on that note when china is, when hong kong and carrie lam, the woman in charge of hong kong, not elected by the people, decided, yeah well accept this sort of extradition treaty, allow china to cherrypick hong kong citizens at their whim, bring them to hong kong or china for justice that was certainly a breach of the agreement. Certainly, you know, the sort of a shot heard round the world and heard in hong kong as well . There have been many breaches of the agreement. It is getting worse and worse. We have to make it clear to the government of beijing if they crack down in hong kong, the consequences will be grave both for trade with the United States, for its relationship around the world, for chinas ability to do anything. And it is going to devastate the chinese economy if this happens. I hope behind the scenes were making that case to chinese officials. Charles what about in front of the scenes . The Trump Administration is getting some criticism listen, everyone admits its a fine line. We have some issues in this country. We wouldnt want chinese ships to come off our coast. Probably would not want them to interfere very much but we have a beacon of hope around the world. Many are saying the administration has not done enough to convey that to people of hong kong and citizens of a free world . You know it is easy for people who dont sit in the oval office to criticize how the president handles situations like this. What President Trump has to do is to stand with the protesters without appearing that the United States is egging them on. Charles is that really standing with them, fred . How do you do that . How do you pull that one off . We see folks in the streets of hong kong with the american flag. We inspired them to a degree. So how do we stand with them without tipping at that delicate balance . It is hard. It is hard. We cant lay down ultimatums we wont keep. The Obama Administration did that over and over again. We have to walk a fine line to express our support for protesters and urge both sides to back down. Since were not sending in troops to stop this, our ability to influence the situation is limited. Charles right. We have to press the Chinese Government to back down. Charles china needs to know the world is watching, and judging them and judging them harshly. Fred, thank you very much. Good to be here. Charles global recession triggering fierce into u. S. Bonds. That if history repeats itself we do get a recession within two years, the big question, the political question, what does that mean for President Trumps reelection chances . Well dive into the 2020 election next. Plus is the fed about to have a no choice but to intervene . Im talking before the next scheduled meeting. So stay with us. 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Learn more about aarp Medicare Supplement plan options and rates to fit your needs. Oh, and happy birthday. Or retirement. In advance. Charles so the inverted yield curve raising a lot of red flags of potential recession being on the horizon. It of course puts President Trumps strongest suit for reelection, the economy, it could put that in serious jeopardy if indeed it happens. History would not be on his side if we were indeed to have a recession. To debate this, Deneen Borelli and democratic strategist david brown. Recession within two years of president ial race, last time the party in power was reelected was 1928. Since then they lost, 32, 60, 76, 1992 and 2008. Are you concerned about what reelection could do to reelection chances . Not concerned. Recession is part of the business cycle. You will see ebbs and flows within the economy and market. Would i argue there would be more after concern if there were a democrat president that was, that would go into office because it would be pushing socialist policies, that would be long term, whereas the recession, would be a short term issue. Charles david . James carville said famously in 1992 when bill clinton was running for president , it is economy stupid. He said the economy, stupid. I think that mantra holds true today. You laid out historical reality for president s running for reelection at times of recession. It is not good. The fundamental question for voters is, am i better off today than i was four years ago . If the answer is no, then it is not a very strong endorsement to keep the guy in office. Charles conversely, conversely, david, if the answer is yes, it has been for last couple years, it has been remarkable for average american, the greatest wage gains on the bottom rung of the economic ladder, if that were to sustain itself then it would be exact opposite, wouldnt it . I glad you brought this up. Debate gets interesting. Smart candidates need to know where to go. Real wayne growth decline last month. I agree with you, it is inched up, it has been largely stagnant. So if you think about the extraordinary gains in gdp, people talked about this in iowa this weekend, youre seeing Massive Gains in the gdp over the past couple years, yet, Life Expectancy of americans declining. And folk house are middle class, folks who are working class, part is fundamental question of optimism. Do they feel better . Do they feel like the economy is working for them. Donald trump cant answer that in the affirmative he wont get reelected. Right now the answer would be absolutely. Last july, Consumer Sentiment number was through the roof. Absolutely through the roof. Blew away everyone. It was driven by 2 3 lower income housing, household incomes. It feels like those people who really feel good about this when they look at a market down 700. They see that more as something perhaps that doesnt impact their lives as much of the fact they do have a job now, theyre going to keep a job and their wages are up . Yeah were seeing higher wages, record low unemployment numbers, charles. Also the president has this grassroots, grassroots support where you have 61 of his donors are small donor donations coming in under 200. He has support and ear of his followers, his supporters. They are looking at how he is trying to keep the economy going and positive and looking out for the forgotten men and women, which is what he campaigned on. Charles david, two or three weeks ago Elizabeth Warren talked about recession. I thought it was smart on her part. You never know. I think recession is what actually propelled barack obama into the white house, not his antiwar stance he began his campaign with. Which candidate, we only have minute, which candidate would be the one to say, hey, you know what, capitalism didnt work, lets go with socialism . Come on, charles. Would that work. Would it, who would benefit most on the democratic side . Charles that is ridiculous premise. Nobody maybe other than Bernie SandersElizabeth Warren talks about capitalism and wants the system to work for folks. That is the animating core thesis for people like joe biden, Elizabeth Warren, others. Capitalism, which everybody beliefs in, despite best efforts they want it to work for the middle class. Doesnt seem like it demonizing wall street. There is a reason that the president is underwater in job Approval Rating in michigan and wisconsin right now. That should be flashing red alarms everywhere in trump central. Charles no one in democratic leadership is getting ready to celebrate polls right now. Deneen, david. Thanks, charles. Charles stocks are sliding right now. This amid a recession fears. So the fed, weve got to talk about them. The question, are they about to be backed into a corner, have no choice but to intervene before next meeting, if they do, what does it mean . Later in the show, macys shares are sinking after big earnings miss. What they said about tariffs, what Everyone Needs to hear. Well be right back. Driverless cars. All ground personnel. Or trips to mars. 4. 95. Delivery drones or the latest phones. 4. 95. No matter what you trade, at fidelity its just 4. 95 per online u. S. Equity trade. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Charles stocks remain under serious pressure now. Dow more than 700 points, this amid recession talk yet former fed chair janet yellen exclusively telling fbns wsj at large, she is doubtful it will happen. Are we going into recession . So i think the answer is most likely no. I think that the u. S. Economy has enough strength to avoid that but the odds have clearly risen and theyre higher than im frankly comfortable with. Charles however will the Federal Reserve now have no choice but to intervene and im talking before the september meeting . Here to weigh in Patrice Lee Onwuka and Fox News Contributor gary kaltbaum. Seems like yellen would be prepared to take action here. Do you think, powell, rather. I always do that. Do you think, do you think powell is prepared to take action before the september meeting . I think so and i hope so. Certainly we saw in his comments in july that, you know, he is like, okay, this is maybe kind of a midcycle adjustment. So suggesting that we shouldnt expect anything different. Or any further rate reductions, but you know, there are a lot of things that are coming up against him. I mean, really nudging the idea of continuing to decrease these rates. We look at the trade issues. We look at the turmoil in hong kong. Then well have a slew of Economic Indicators coming out this week, charles, tomorrow and friday from Consumer Confidence to manufacturing output. So i think based on a lot of what those factors point to can really continue to nudge him really say okay, i cant wait until september. We shouldnt wait until september. Lets do something now. Charles gary i think that midcycle adjustment thing was unnecessary. I think it roiled the markets. Going back to may, 1st, he said low inflation was transitory. October last year he said they were a long way towards neutrality, hinting at many. I think chipping away at fed credibility. I think theyre many months behind curve, charles . Let me be clear, it is 100 certainty they will not rate until the end of december to cut rates if the markets continue down and real rates continue lower. They are 2. 25 right now. The 10year is 1. 58. Just to catch up with the market they have to lower rates a half a percent. But i have to add the president needs to stop jawboning them. I really think the fed is in discussions right now to make a move and they possibly do it today or tomorrow but they wont do it because they will look political if they do it while the president is yapping away at them. So if he takes a couple of days off, im pretty sure another 500 points down in the market, that they are going to come out say, here is some insurance. I think that would be a good move on his part. I said a couple weeks ago i would like to see President Trump not tweet about the fed. Real quick, gary, i want to go back to you on this, is it worrisome that the fed may be making policy decisions based on animosity or to show President Trump that theyre not weak rather than their overall, i dont know, whatever the mandates are because they have multiplied over the years . My bigger worry is when they say theyre data dependent. He says wait until something happens before they make a move . Markets are a lot smarter than they are. When youre seeing negative rates around the globe, when you are seeing, amazing, 1. 58 on the 10year, that is speaking, that is not just speaking, that is bullhorn, yelling and screaming somethings up. We have recessions, if germanys in recession the rest of europe pretty much is. Asia is contracting. Charles right. I think thats what markets are saying. The fed needs to act sooner than later. I dont like easy money fed but when youre behind the curve youre behind the curve. Charles the reason i keep saying bernanke, he wrote a piece in 2002, i encourage everyone to read. He emphasized prevention of deflation, rather than trying to cure it. That being said, what do you think the market was panic in the fed intervened before the next meeting with a 50 basis point cut . How do you think the market would react to that . I actually think it would bring stability to the volatile market right now. I think it is suggesting, indicating that the Federal Reserve recognizes there are some alarm bells. You know. And that, if you want to see the economy continue to be strong, and wade through the tumultuous period this is way to do it. I think that would stablize markets at least in the short term. Charles patrice, gary, thank you both very much. Thank you, charles. Charles this morning macys reported a real huge miss pushing that stock lower, Retail Sector going along for the ride. 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That point you highlighted from the ceo call the fact that he said consumers do not want to see an increase in prices is a sign were not ready for any type of tariffs being passed on to us. He said with the 10 , potential hike, with 300 billion worth of goods he will not increase prices. However in may, when we saw the other tariffs increase he increased slightly houseware and luggage. Charles he found out people they didnt like it. Obviously we dont like higher prices. We have not seen that passed on to consumers just yet. This is a sign, a retailer on its own has not been doing well. That is separate. Athletic miss sales, didnt do well with private label. Too much inventory. They did another talking about viewing economy as a whole, talked about International Tourism which is concerning that is weakening. Stronger dollar hurting. That is why income to the big Flagship Store in new york. When dollar was weak, people were coming to new york with empty suitcases, because the trip was free. Now with the dollar so strong, which is another issue perhaps for the fed to consider, when it comes to. Macys was down 35 before they reported earnings. That is yeartodate. One of the worst performers on s p 500. Charles walmart is the one everyone is looking at. I want to point out to people walmart is on a roll. Four quarters in a row with samestore sales, comp sales up more than 3 . They have had had pricing power, this is proxy, isnt it . Samestore sales are higher, however, the expectation is that they may not hit that 3 mark with this upcoming quarter. Well look at ecommerce. They smashed it out of the park last quarter, up almost, 37 in one quarter compared to last year. So theyre doing really well. Theyre focusing on more stylish clothes. Theyre joining forces with designers. Ellen degeneres is first person i think off top of my head. Charles i think that is a good fit. That is a great fit. Her denim line. Walmart, target, theyre ramping up style, houseware and clothes. Theyre stealing market share away from department stores, clearly example with macys, they couldnt get it right with the athletic label, private lable, shows they have still work to do. Is it too late . I spoke to one trader quickly, he is expecting more consolidation in this space. It is almost too late for the likes of macys nordstrom, youre seeing also down. Kohls, kohls just a few months ago will join forces with amazon. They need the help. Charles then after that they reported Earnings Report that was unmitigated disaster. We get that. We get retail sales. It will be important what they say though, right . On this call from walmart what they say about pass on prices. They hinted passing some. It wouldnt be 10 or 25 . In this kind of environment, the point you made these Large Companies are doing it right, ultimately will pick up more share. Right. You told me this in the office onset. Walmart is economic report. Charles almost a proxy. So many people, when i was covering hurricanes, walmart was only one open. A lot of people, myself, i love going there. They have everything. No, i dont own any walmart stock. No im not press for them, but i do think it will be concerning what they say on the call. Will they pass it on . Macys, we havent seen it across the board but, yeah, youre right. Charles overall, talk to some of your traders today, any other comments on this overall market . The dow is off, 767 points . One very recently just within the past hour or so, talking about algorithms momentum it, could be overblown. Tariff problem now looks like will be a much longer term problem. Yesterday we saw a little bit of an uptick. They were so close. Now theyre so far from getting a deal. I think that is a big concern. Charles felt like the market though, before the latest threat was okay with this being a longterm issue. 10 tariffs were absorbed well. The economy is growing, that last tweet, tweet from President Trump about the september 1st tariffs threw everything into confusion. Then the idea that we have a Federal Reserve that just, for whatever reason, not reading tea leaves like the market is reading them. The concern from chinas front they will pull back even more. They would agree to tern things. Agricultural aspect of buying goods has not really shown up. The president highlighted that. Im concerned, this is the comment from this one particular trader about momentum, china may even start taking all of its offerings off the table. Then that can wreak havoc in the market. Charles ultimate pyric victory, their economy is in trouble. Every single day we saw july numbers members. Charles jobless numbers in their major cities at alltime low. This is remarkable. The idea was hey, urbanize the country, get all the rural folks come to the city. They get off bicycles, get in cars. Get in mercedesbenz, if you wreck that, i know xi is considered a dictator. Hard for me to believe he can stay in this position. We watched last five years watch dictators get run out of town or worse. If he cant keep the economy going, the promise after new china, wealth and prosperity going i think he could go. What about fiscal stimulus, if they keep propping up the market . Charles that is another market for pboc they cant stimulate economy and fight currency thing at the same time. They have done a lot. Kristina, thank you very much. Appreciate it. Thank you. Charles the market down 700 points. Recession fears are a new worry now. Want to go down to the floor of New York Stock Exchange with an update. Deirdre. If you look at the s p 500, all 11 major Industry Groups are lower. You have energy, you have tech, you have consumer, really three biggest weights on the broader markets. Ii want to take you through a fw different sectors if you dont mind. I focused on financials. Inverted yield curve affects, really shrinks margins for the banks and lending business. Take a look at bank of america, citigroup, ai if. On that s p 500 financials index these are the three biggest weights there. I mentioned energy. Were following the price of oil which is down more than 3 . Of course part of this started earlier in the day. Youve been covering this as well, charles, with your guests. Those disappointing economic headlines coming through, both from asia, china particular. That surprised Industrial Outlook coming in at 17year low. When we look at ecb, the eurozone region, we saw growth in the region really not remarkable at all, at all, for the second quarter. So all of this is contributing to this idea of a Worldwide Global slowdown. That of course is pressuring oil prices. Not surprisingly were seeing that show up in the stock markets well. Looking at stocks falling the most in this group. Devon energy, marathon, apache, lower across the board. Among the tech, amd, activision, electronic arts, down, down. A snapshot into sentiment as well. Fed funds futures showing 100 of a 25 basis point in september. Most people assuming that fed chairman jay powell is going to see risks that he alluded to last time around, even if were not feeling them here in underpinnings in the u. S. , with asia, europe, making decisions. Only 20 , charles, if you look at fed funds futures for 50 basis point cut in september. After todays selling it could be higher. Im not shocked it is not higher. Im not surprised it is at 50 . Before i left i did see where real estate and Consumer Staples holding up there a little bit. Do you sense this sort of flight into wouldbe safe havens right now . Yeah. I think part of, what is interesting about those two groups, those are not exactly as exposed as some other groups we mentioned to international trade, to tariffs. I mean, you can make an argument especially with those that i have noticed utilities as well, is the least least amount of being down the way we have to phrase it. Obviously a huge defensive play. When you were talking aabout different parts of the bond market with the guests earlier, there is defensive sentiment. We see it with the 30 year yield with levels unprecedented. Underlying fear investors v theyre clearly looking for possible safest place socalled perceived safe haven assets. 30 year u. S. Treasury, sort of you know, equivalent of a gold bar. If that goes, we have much bigger problems, charles. Charles i think alltime low yield, 2. 02. Shocking. Charles thank you very, very much. Really appreciate it. Folks we know the markets right now deep into the red as we head into the final hour of trading, ever plus capital director jason roth man. I think it is pretty clear were in trading range. We could not take out key resistance points to the upside. People should know this really matters. There is a lot of technicians. Though think we have to test certain levels to bounce from there. For the dow 25,440. Nasdaq, 7702. How many are we rangebound right now, one or other, if support holds, like resistence fell yesterday and today it is bad . Right, so im with you on that. That resistance definitely did not hold. You know the s p just poked its head above 2900. Are we back . Are we going to 3,000 . No. Wrong. Maybe next time the dow is down 700. I dont think we were in a trading range. If we were in a range, would i say were not going to test the low of, within the past few weeks, that well balance out here. I think right now, the 747 has taken off, the 747 of this correction has taken off. It is 10, 20, 30,000 feet. Not like it will stop midair and go the other way. I would bet were actually going to head to the recent lows. Were actually going to break them. At that point, we might see an emergency rate cut. Honestly i think they will wait until next meeting. I think that would scare the market if they did the emergency cut. Charles gary, something to be said for Cool Hand Luke approach to rate policy but ive always side, sometimes when youre in a crazy, hectic, emergency situation, it is okay to act like it. There is nothing Cool Hand Luke about this central bank. They have been reacting to markets for a very long time. You saw what they did in december. You saw in the 10 correction they pivoted again. Im sure they will lower rates if this continues. I would say the next 500 to 1000 point. Im surprised theyre not lowering today. That is how far i am with this. Just so you know. It doesnt change anything. The market already down at 1. 58 on the 10year. Can only affect markets right now. They cannot affect the economy. Im not so sure they can affect the markets at this juncture, i have to tell you, we talk about the dow and s p, small and midcaps are bearish as can be. Transports are. Oil and retail in bear markets. Big financials rolling over badly. Regionals in a bear market underneath the surface there is some pretty ugly out there. Just a matter of the big four catching up. The reason they hold together, the market goes defensive, they buy defensive as you said, buying real estate, muni bond funds so i think you got to be real careful right now no matter what the fed does. Charles i want to bring in jackie deangelis. Shes with us as well. Im listening to commentary and have been watching the markets closely. I dont think the fed will step in with an emergency rate cut. You see how kneejerk the reactions are. The markets are concerned about china and trade. They are worried about the inverted yield curve and worried about a potential recession coming down the line. Thats what they are focused on right now. The Federal Reserve were to come in with an emergency rate cut, i think it would add to the pandemonium. You already see swings of 900, 600. Charles Cool Hand Luke thing. Stay with the Cool Hand Luke approach. They still have two more opportunities where they can do something. Everyone thinks they will do something in september. I think if Jerome Powell acts like hes panicking, that really sends a bad message to a market that is already spooked. Right now, its worried about uncertainty and it actually needs something that would calm it down. Charles you know, jason, one thing we do know, if history were to play out perfectly with this inverted yield curve, you know, before or as a harbinger of a recession, it would take another 18 months, the ral market would rally higher for another 18 months and it would be 20 to 22 months before the recession hit. Having said that, would you be a baier buyer on the dips because it sounds like youre stepping away from it all right now. Just like any other point in stock market history, there are going to be sectors, there are going to be individual names slash companies that thrive in times of sideways consolidation. Do i think we could go another 5 to 10 lower from here, yes. Keep in mind this is at the end of the longest bull market in history. A recession is not the end of the world. I agree with jackie, i was the first person to say i dont think we need to cut rates initially or excuse me, immediately. But listen, when theres a recession after the longest bull market in history its not the worst thing in the world. The market can be shortsighted and emotional. People are freaking out today. They dont necessarily need to. Charles fact of the matter is, lot of people think recession, they think great recession. Th they are not all like that. It doesnt have to be that way. Tenyear bull run has been pretty strong. Sometimes we see cycles that go longer, its certainly possible, but theres nothing wrong with a pullback in the market. The market has gotten used to new record, new record, higher, higher. May i remind you of the big worry that through the last ten years, we now have 250 trillion of global debt, we have 22 trillion here and i can go on about the leverage in the system. Charles pretty soon it will be real money. Thank you all very much. Liz claman, dow is off 735 points. We are buckling up. The last hour will be pretty wild. Liz it already is. We are at the top of the hour. I dont know if you heard, we are going entirely commercialfree because we are looking at panic buying of bonds and frantic selling of stocks as we head into the final hour of trade. With the dow losing 730 points right now, we have just seen the odds of a more aggressive 50 basis point cut move. They were higher, this is interesting, they were at about 24 , 25 . They are now at 21. 2 . It literally just changed. A quarter of a point cut is already in play. Thats already fully expected. But the Federal Reserve meets next month and as