Transcripts For FBC Mornings With Maria Bartiromo 20240714

James freeman. Much made of the inversion of the yield curve between twoyear yield on the treasury and the 10year, but what do you make of the markets right now . Well, we had really a trifecta, the poor numbers out of china with Industrial Production worst numbers in 17 years. We had a poor number for germany, gdp negative, second time in four quarters, fourth largest economy, the Worlds Largest economy in europe, of course, the inversion of the 2s to 10s that weve all been waiting on. We have seen other parts invert. This is the one recognized being symbolic for, predictor of possible recession and i think that most of the reaction was about. But as we look at the numbers and relative, mixed Economic Data, unemployment is still low, wage gains are still there, i think yesterday was reaction to a lot of scary data that came in, but we are still positive about the markets and we think that weve got some runway head here. Dagen lindsey to that point, the 10year yield closed 1. 596 . I want to point out i think that the 30year did dip below 2 in the overnight trading session which a lot of people have been expecting to see. The s p dividend yield is 2 , s p gives you more income than quite not quite safe as treasury but more income than the 10year treasury and actually right now the 30year treasury. Absolutely, for that reason it makes stocks look attractive in this environment. Of course, the situation changes if we are going into a global slowdown and recession. I want to point out two things, cutting rates ahead of the inversion, okay, that happens at the end of july when 2s and 10s were positive and usually the yield curve inverts because the short end goes higher than 10year because the fed is pushing it higher, this time if the 10year came down, different dichotomies and speaks to how europe and the rest of the world and Interest Rates across the pond are really impacting us here in the u. S. Dagen money is flowing into the United States because we are the strongest weak person in the room, so to speak. Not that weak but certainly stronger than the rest to have developed world, do you think before i move onto james, and theres much to cover about the history of inverted yield curve, does it predict recessions or not, it has proceeded every recession since world war ii, however, there have been inversions since 1980 which you were tweeting about yesterday where it inverted and didnt wind out in immediate recession. In terms of what Federal Reserve does given whats happening along the Treasury Curve that it does cut one half percentage point . I think they need to consider that, when they started late cutting cycle, they were able to get ahead of the curve, ahead of the market on what the expectations were and stabilize the market and continue to move higher and avoid a recession, so i think that we will need to see cut 50 basis points to get ahead of the market right here. Dagen right now probability was 20 , it was 4 of 50 basis point cut on tuesday, before i get to you, speaking of the Federal Reserve, President Trump was tweeting about the fed yesterday, we are winning bigtime against china, companies and jobs are fleeing, prices to us have not gone up and in some cases have come down, china is not our problem, the hong kong is not helping, problem is with the fed, raise too much and too fast and now too slow to cut, spread is too much as other countries say thank you to clueless jay powell, we should easily be reaping rewardeds rewards and gains, we will win, exclamation point. James, if you want to weigh in on that, the underlying message is this is a problem in the markets and even in the economy driven by the Federal Reserves policy mistake not by our policy and how we decided to take on china. Yeah, this is the trade fight, this is not the Federal Reserve, youve got inflation coming up. Its hard to make a case that Interest Rates are too high, they historally very historically relatively to any measure you can think of, the problems since start of 2018 and we see it every day in the markets, theres good news on trade and we think we will have more of it, fewer tariffs, stocks go up. Youre seeing hurting china, its hurting us, we are not winning when we have executives reluctant to invest in the United States given huge wins the got on lowering taxes and cutting tape. So this is the cost of the trade fight. Dagen i want to point out as evidence of that that what happens china does impact u. S. Businesses, what happens around the globe, thats why you would see a stock market selloff like that that the u. S. Cant go it alone, you saw cisco reported the earnings, if you want to take a look at the stock, weakness in part coming out of china. Yeah, look, hats off to the president dagen the stock is down 8 and a half percent in premarket trading. If he actually persuades xi jinping that china should stop stealing intellectual property, great, we have to recognize this is the cost, its not about the Federal Reserve, this is slowing growth around the world, reluctance to invest and big cost when you add taxes to trade. Well, the cost, by the way, increases the longer you kick the can down the road, i know that the trump is trying to wait until next year ahead of the election to solve this trade issue, but imagine if you were able to solve the trade issue now, Economic Growth around the globe would improve, capital expending in the u. S. , you would see the stock market then take off, i mean, every president wins on positive Economic Data, so i think it can bode well for them. David, how do you read threat from china about retaliation if we go ahead with new tariffs on september the first, some of them delayed until december, middecember as admission that the tariffs hurt consumers and that we need to get out of the way for santa claus in december, but nevertheless, what do you make, how do you read this china threat at this point . Well, when we look at the Economic Data thats coming in the thing that we always come back to is twothirds of the u. S. Economy is the consumer and thats really what has saved us and saved us compared to the rest of the world, these new tariffs that are coming on top of tariffs that are there a lot of them stand to impact the consumer and thats where we start to have a more Significant Impact on what effects our u. S. Economy. Tariffs are important and part of the reason we got the reprieve, delay on the tariffs for a little bit longer. Dagen one other possible impact and we heard this over and over again from manufacturing companies, the indecision on this trade fight, the indecision creates uncertainty, ultimately thats the enemy for businesses, we dont know what the roads 6 months to a year looks like. And for the markets. Market uncertainty. Dagen we need to watch not just what happens in Consumer Prices in demand but also in jobs, thats going to be the critical thing, anything coming up, we are getting retail sales out later this morning, walmarts earnings come out in about an hour, these are going to be telling signs but it is ultimately about the job market, is it not . Jobless claims this morning too. Most recent jolts report has amazing stock market, more than 7 million open positions, you do have to wonder if you dont have optimistic ceos and expanding reason and looking for a reason antonio vest, are they going to keep hiring, this is this is the gamble of the trumptrade policy. Dagen speaking of trumptrade policy the oped torial board out with oped titled this the navarro recession part 2. Onlian of the future and not destiny, the key is to avoiding the worse, restore calm and confidence, stop the trade threats by tweet, someone should tell mr. Trump that incumbent president s that reside within 2 years of an election rarely get second term. James, to your point its not just via tweet the blaming of the fed, but you have Peter Navarro who on this program basically called the wall street journal the china the china daily, the communist countrys the communist newspaper, but again, its not just policy mistakes, its how you message it. We understand that the president , the United States is the leader of this country and the free world but you have all the other people particularly Peter Navarro and talking about the fed to blame, the fed to blame, that can cause more problems than help. Yeah, to underline what lindsey and david were saying, the destiny, message from Interest Rates its not that we are doom today a recession here but it is a big warning signal about the economy and i think he should know better than anyone, you look at polls, the economy is his main argument for reelection. He has positive ratings there, he has essentially negative ratings on everything else. He has to win on the economy. Dagen well said and speaking of polls we have a new fox news poll on the president s Approval Rating, we will save that, but we will keep following this breaking news, china threatening retaliation at after u. S. Implements september 1st, we have 91point loss on dow futures at the moment after 800 point decline yesterday, and then we tell you about this, a tense Police Standoff in philadelphia. Give me s. W. A. T. Asap. Long gun asap. [shots fired] dagen shooter opening fire on police injuring 6 officers, holding them hostage for 7 hours. 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Flea flicker. Yes howd you know . Studying my playbook . Yeah, actually. Dagen following breaking news, china threatening retaliation if tariffs take effect september 1st, checking futures, losses across the board, 84point dow lose after 800point decline yesterday, chinese minister saying United States additional tariffs on 300 billion of chinese goods imported to the country would violate the trade consensus reached by both countries. Hong kongs financial secretary expect today revise fullyear gdp forecast to one tenth of a percent, you can take a look at asian markets closed for trading, nikkei only loser there down more than 1 , but we will be following this action, but, again, what does this mean, its just a headline, we will try to find out. Meantime moving onto philadelphia, 6 Philadelphia Police officers releed from the hospital after being shot from tense standoff yesterday, fox news jillian mele live in philadelphia with the very latest, hey, good morning. Good morning, dagen, yeah, this was a terrible day here yesterday, terrible 8 to 9 hours that unfolded about a block where im standing right now, lets take a look at the newest video that we have into our news room and that shows this suspect identified as maurice walking out of hospital, we have that video as well, the Moment Police fired the teargas shortly before midnight last night, so between the teargas and a 4person Negotiation Team the alleged suspect came out of the house with hands in the air, we have that video to show you as well, reportedly police said that they were going to give him until 11 45 last night to surrender and thats exactly what he did, take a listen to an attorney that was involved in Negotiation Team who has had previous relationship with the suspect. The kind of relationship that weve had over the years, although we have an attorneyclient relationship, that is how we communicate with one another. Im no Hostage Negotiator, never been but i know how to talk to people especially those that had certain kind of relationship. He said hes not a Hostage Negotiator but he was certain one of the people on the call yesterday, this began 4 30 p. M. When narcotics officer were serving warrant, one graze wound to the head and two others and 3 other innocent people were actually barricaded inside this home for hours yesterday as this alleged gunman continue today fire shots time after time for hours, everyone was eventually brought out of the house unharmed 5 hours later, thats thanks to great tactical work by police, now, we do want to tell you that all of the 6 officers injured in this yesterday all released from the hospital, waking up this morning home with family, loved one, dagen, as you know this could have been a much different story on your screen right now you are seeing one of the officers as he left the hospital, so no loss of life here on a really rough night in philadelphia, i will send it back to you. Dagen jillian, thank you for the reporting, incredible, you know the city well, hometown. Julie i grew up. Dagen jillian, thank you so much, incredible so much, jillian mele from philadelphia, breaking news, china threatening retaliation if the u. S. Puts into effect tariffs for september 1st, we will watch reaction from the president possibly on twitter and we try to break down what this means but we know what it means for the stock market right now, 124point loss on the dow futures, the selling picking up steam coming off the worst day of the year for the blue chips, take a look at the 30year treasury and see whats happening there, if money is pouring into it as we fly to safety, we will be watching that. Again, the yield there dipping below 2 overnight. And as european markets we look for some stability, we have heavy losses, heavy selling there as well, the dax down more than 1. 6 at the moment. We wait. Retail earnings, heavyhitter, the biggie, walmart will report at the top of the next hour, more on that straight ahead. Flights, hotels, cars, activities, vacation rentals. Expedia. 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Click, call or visit a store today. Dagen we are following breaking news, china threatening retaliation if new tariffs take effect on september the first, tariff that is the u. S. Will put on imported goods from china, we should point out, though, that some of those products, the tariffs are delayed, remember, that was what caused this rally a couple of days ago in u. S. Stock, delay until december the 15th, smartphones, toys and the like, nevertheless china is making a threat and thats taking u. S. Futures lower this morning, european markets also heading to the downside, you can take a look, losses across the board, all north of 1 , cmc markets uk market analyst, Michael Houston, what do you make of the threat from china to retailuate on the retailuate on the u. S. You can see that it has, im struggling to understand the rationale china made announcement after President Trump made announcement earlier this month, this isnt a surprise but given liquidity conditions in august trading, anything negative will tip markets over. Inversion of yield curve is making investors nervous. Dagen lets look at 30year yield, this is the long bond, this is the one that might be best indicater of what the future looks like in terms of Economic Growth, here, there and everywhere, really, below 2 , fell below 2 overnight and thats exactly where it is, so another flight to safety and you also had a good interesting point about why is so much money going into u. S. Treasuries because theres a negative yield on so much debt around the globe. Yeah, we are looking tat 10year and 30year here and how low yields are going, this is alltime low for the 30year bond, the u. S. 30year treasury falling below 2 , earlier this week, we had debt around the world exceeding 15 trillion in negative yield debt, last night, above 16 trillion because debt around the world, so much debt around the world has negative yield, so even our bonds, 1. 98 , thats still very attractive for investors abroad to buy sovereign debt in the u. S. , we can see the 30year and 10year fall further and still be attractive compared to negative yields abroad. Dagen what do you make of that, michael . Yeah, i think theres a perception that the its high relative to low end. Thats why the president has been calling to cut rates, if you look at the two sides, theyre very close together when it comes to yield. I think trying to stable the yield curve n. In the absence of any further action from the fed itll get worse. Dagen what would retaliation from china look like and, again, why is this important because this is one of the big things dragging down growth in china particularly and the knockon effects, weve had factory activity slowing in the last 4 months here in the United States, but what does retaliation potentially look like not really knowing what the Chinese Government is talking about. Yeah, we would hope for no retaliation, sounds like a potentially productive phone call among u. S. And chinese officials this week that that led the president to hold off on our tariffs but could be reduced purchases, could be tariffs, more harassment of u. S. Business in china which is a problem. Dagen thats what ive been trying to point out to people, we have a great deal of u. S. Exposure in china, whether its a General Motors or a tesla automakers, but, again, cisco lowering in part and thats hard to ascertain, whats going on the ground for u. S. Businesses other than what ceos are telling us. That would not be good to china, another reason to move to vietnam, india or somewhere else if they ramp up pressure. Dagen which is whats happening, it hasnt narrowed a whole lot since trade fight started in january of last year. Thats right. Dagen thank you, michael, great to talk to you, michael in london for us. Breaking news this morning, china threatening retaliation if the u. S. Implement tariffs set for september 1st, futures pointing to lower open, 145point loss on dow futures right now plus 2020 vision, President Trumps Approval Rating falling, the future of John Hickenloopers campaign to the white house, we talk about that and so much more, stay with us, breaking news. Mothat a handle is just a is jushandle. Ir. Or that you cant be both inside and outside. Most people havent driven a lincoln. Discover the lincoln approach to craftsmanship at the lincoln summer invitation. Right now, get 0 apr on all 2019 lincoln vehicles plus no payments for up to 90 days. 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Goes through with additional tariffs on september 1st, the move sparking selloff, markets were already on edge, investors on edge, futures erasing all early gains, 141point loss on dow futures on the heels of the 800point loss yesterday but Michael Houston out of london made a really good point that after the original threat of tariffs on september the first, china has already said it would retaliate so maybe this is just a reiteration of that, we look for details but right now its a headline, its a threat, but it is weighing on markets, the dow seeing worst date of the year yesterday, losses across the board, losses of nearly 3 on the s p 500, nasdaq composite lower by 3 as well. Checking on Global Market action, europe is in the red across the board, losses north of 1 there in trading today. In asia overnight it was mixed market action, news of china retaliation coming after the markets there closed, the state of the u. S. Consumer and trade disputes, the impact, walmart set to report its Quarterly Earnings in about half an hour, we will bring you the numbers and analysis as soon as they hit and cisco warning, now more than 9 , offered weak guidance for the Current Quarter because of sharp decline in Telecom Spending and its business and you guessed it, china, we follow the breaking news with china threatening retaliation if u. S. Tariffs go into effect september 1st this as President Trumps approval rate asking dropping, new fox news poll show the president has a 56 disApproval Rating, just 1 off the alltime low from october 2017, the poll finding record numbers of men and independents disapprove of the president s performance, meantime in the 2020 race John Hickenlooper to end president ial campaign today, beto orourke is planning another reset, Campaign Speech but another reset of his campaign, i stop keeping count after the second one. Joining us now young republican for Liberty Research analyst, how do i tax thee, kristin tate, lets talk about the president s approval rate. They come after political moment after two Mass Shootings so i cant say im too surprised, dagen, the president is in a tough position right now, the same fox news poll found that the majority of americans want stricter gun laws but on the other hand the president s real core base most passionate supporters would probably be infuriated if the president would take side and conservative voters have valid concerns, red flag gun laws claim to keep guns out of potentially unstable or violent individuals, that sounds pretty reasonable, the problem is that defining unstable or potentially violent could be subjective, the terms can be poorly defined and i noticed the fact that red flag gun hearings could be adjudicated based on the claim of one individual, so all it takes one person, it could be mad exspouse or disgruntle neighbor to make the case that youre dangerous and you find yourself losing the property and right to defend yourself, real reasons for concern here, the president is in a tough position, if he does nothing, he could lose the support of moderates but if he throws his support behind any gun control he could lose support of core base. Dagen story in wall street journal that advisers within the white house are trying to go lightly and be cautious with moving forward with any of these gun proposals, one of the things talked about is certainly the background checks and ensuring that their background checks made by unlicensed gun dealers that remains to be seen what happens with that particularly with congress not on the job this month. I want to ask james about this in terms of the president s Approval Rating, so it did dip, theres an article in the journal today that iowa farmers are sticking with President Trump despite trade war, now, the white house, the president have been very careful to provide aid to these farmers, theyre hurt by the retaliation by china and have had real impact on the farmers but the journal reporting that based on their on the ground work these individuals, these farmers are sticking by the president. Its true in iowa and across the midwest, Perdue University does poll of farm belt sentiment on a lot of the questions and what youve seen is some obvious economic pain for farmers but a fairly strong conviction that that china does need to be addressed, that the terms of trade need to be renegotiated and so question of how long people stay patient, but, yeah, i think he has support on that, i find the larger polling results, you mentioned head scratcher because i thought that on the shooting of the monday remarks after ward, i thought the president did a nice job with those and it seems like from the polling hes getting majority support on the idea that we ought to have ways to deal with the mentally ill and keeping them away from guns, but his overall rating goes down, maybe as kristin mentioned its the question of some of the people who agree with them on that issue maybe against them for other reasons and maybe people disagree with them are peeling away because of that. Dagen kristin, we are look target fox news poll results that deserve what deserves great deal of blames of Mass Shootings, access to guns and mentally ill is in line with that. The mentally ill portion of this is critical but, again, if trump throws support behind any measure that is will restrict access to guns i believe supporters will see it as big gun grab, the good news for trump despite of poll numbers, dagen, theres a lot of time between now and 2020 and in the trump era of politics, the news cycle moves so fast that i think youll have a chance to, you know, up his Approval Rating with future actions and then you have the democrats who i think will also help trumps Approval Rating because they are being so extreme that the more vocal and visible they are, the more itll likely help trump. Dagen right, for example, 180 Million People will lose private Health Insurance and have to go on a government plan, thats one of the most extreme things but really quickly, kristin, what would you like to see and what do you think would help in terms of policy and messaging out of the white house on the trade negotiations and on the back and forth threats . Well, i think that trump is in a tough position here because, you know, he doesnt want to anger china so he needs to thread lightly but im glad that he has sort of stepped back from his tariffs because we all know tariffs are essentially a tax on american consumers, i havent favored them from the beginning so im hoping that we will see him pull back more on the tariffs. Dagen thank you, kristin. Kristin tate. Thank you, dagen. Dagen Cheryl Casone has more details, cheryl. Cheryl epsteins autopsy revealing that he had broken bones in his neck and the specific injury in people who have been strangled, the new york medical Examiners Office is not examining as the cause of death, meanwhile New York Post is reporting that epstein claiming last words were, quote, i will see you sunday. Well, maybe some more problems for some members to have socalled squad, Prime Minister Benjamin Netanyahu considering barring congresswoman omar and tlaib from israel, scheduled to meet by private trip by palestinian lawmaker, the Israeli Government told Democratic Leaders that it would deny entries to omar and tlaib, final decision is still pending. And we are going to be getting numbers from walmart, the latest Earnings Report coming up in the next hour, earnings per share to 5 from a year ago, slightly higher revenue, investors listening for updates on u. S. Tariffs on chinese import will be affecting sales at the company and concerns about the u. S. China trade war getting cisco. Walmart was higher earlier, now negative, cisco, they projected disappointing growth for the quarter because of weakness again the issue with china, dagen, chinese firms are no longer projects which are attribute to go current trade dispute, you said in last dagen, its china, china, so many things china similar is impacting right now. Dagen this is the earnings, earnings outlook for s p 500 companies is starting to look bleak, adding concerns including the trade dispute to these numbers we will dig into that when we come back from break and also keeping an eye on the markets, futures are extending losses after chinas threat of tariff retaliation, if the u. S. Implements these tariffs set to go into effect september the first, some of them wont, some of them are delayed until december the 15th, but what we have seen happen is if Chinese Government stops buying agricultural, one thing thats already begun happening, we will wait for more detail on what this really means, markets were already on edge after the major drop yesterday, we have the yield on the 30year bond now below 2 . That is a record low. That is a flight to safety and shows you how concerned investors are about Global Growth and the state of the world economy. And retail on tat, what about the u. S. And the world, tapestry reporting moments from now as we report from walmarts Quarterly Earnings at the top of the hour. From fidelity. A visual snapshot 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. But how do i know if im im getting a good deal . 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Taking trulicity with a sulfonylurea or insulin increases low blood sugar risk. Side effects include nausea, diarrhea, vomiting, belly pain and decreased appetite, which lead to dehydration and may worsen kidney problems. I have it within me to lower my a1c. Ask your doctor about trulicity. Dagen futures extending losses after chinas threat of retaliation if u. S. Implements tariffs to go into effect september 1st, 180point loss from futures, adding concern to a market that was already very much on edge after the 800point loss on the dow yesterday, these were losses of roughly 3 in the United States and you have bad bad forecast out of cisco overnight, the stock down over 10 in premarket trading and again part of the problem is weakness in china, so weakness in china is translating to weakness in u. S. Earnings, in the u. S. Economy in some ways and certainly in the market, the flight to safety, the 30year yield is now at a record low, below 2 , we want to look at this country and headlines across america this morning, the Detroit Free Press reports ford recalls 108,000 cars, seat belts may not hold in crash, more than 108,000 midsize cars being called thank fix the problem, recall covering ford fusion and mkz automobiles from 2015, the model year, the company says heat buildup can compromise the seat, the cars Front Seat Belt cables, owners will be now notified starting next month. Chicago tribune, illinois to require insurers to cover epipens for kids, law takes effect january 1st, but questions about whether it would lead to lower cost, more popular brand that deliver shots in response to severe allergic reactions, and the San Diego Union tribune says more than 2 of san diego homes had Price Reductions in june, san diego ranking sixth in the nation according to zelle, real estate made it tougher for buyers. Really quickly, a story in wall street journal, s p 500 Companies Looking bleak, i dont know if youve had time to look at it but we are starting to see projections of even negative earnings despite these earnings coming in much better than expected, negative earnings for 2019 as a whole. Yeah, im looking at consensus estimates, we are still looking for 1. 2 growth in 2019, Third Quarter has come down sharply, the real question is 2020, 11 positive growth, i think, the most risk is there, depending on what happens with trade because about 45 of sales from the s p 500 come its more than 55 for technology companies, david, really quickly, what do you make with the earnings outcobbing outlook coming down . We are seeing recession this year, we see improvement going next year, a lot depend on how this trade war continues to play out. Dagen thats whats pulling down futures this morning, again, certainly with the threat from china of retaliating on our tariff that is go into effect september 1st, the trade war, no end in sight, not this morning and stocks are falling 195point loss don the dow futures, more up when we come back. Theres a company thats talked to even more real people than me jd power. 448,134 to be exact. 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Implement tariffs on september first, cisco biggest loser there, losses across the board in Major Technology names, cisco came out with earnings, had the strongest revenue in since 2013, the largest revenue increase since 2013 but cisco forecasting disappointing growth this quarter on lower spending from Telecom Companies and weakness in china, you take a look, we want to talk about a flight to safety, people running out of stocks in the futures and running toward u. S. Treasuries, the yield on the 30year long bond below 2 , it was it hit a record low in overnight trading but, again, this speaks to guys, the strength of the u. S. Economy, james, and i keep asking this, do we have any sense of what china might do because they stopped import of Agricultural Products in the United States, aid to farmers as china has retaliated during the course of this trade which started early last year, what does the u. S. Need to do with china here if youre looking to give some sort of stability to the economy and the markets . I think the u. S. Should focus on the theft of intellectual property, i think thats a legitimate issue. I dont think that setting amounts of stuff that they should buy from us or that we should buy from them is the job of government. We should get away from that but as far as how china might retaliate, i think you mentioned cisco and the message from cisco i think could be relevant here saying they are not being invited to bid on projects in china that they were at one point. Now, this is a different approach, you could say in the u. S. Trump says we will tax at 25 , maybe answer for u. S. Products over there in many cases, we will not buy it at all. Dagen thank you, james, we are watching the futures erasing gains from earlier, the futures were up earlier in the session, with china reiterating the threat of retaliation against the u. S. And we wait on walmarts earnings, they are out moments from now, we break it down, looking for some green good news from the largest retailer, next hour mornings with maria. father kids. Change of plans vo defy the laws of human nature. At the summer of audi sales event get exceptional offers now . By consolidating your Credit Card Debt into one monthly payment. And get your Interest Rate right. So you can save big. Get a nofee personal loan up to 100k. Dear tech, lets talk. We have a pretty good relationship. Youve done a lot of good for the world. But i feel like you have the potential to do so much more. Can we build ai without bias . How do we bake security into everything we do . We need tech that helps people understand each other. That understands my business. Weve got some work to do. And we need your help. We need your support. Lets expect more from technology. Lets put smart to work. [ scoffs ] if you say so. Im sorry . What teach here isnt telling you is that snapshot rewards safe drivers with discounts on car insurance. What . Or maybe he didnt know. [ chuckles ] im done with this class. Youre not even enrolled in this class. I know. Im supposed to be in ceramics. Do you know room 303. Oh. Thank you. Yeah. Good luck, everybody. Dexperience thrillingn operformance. O now at the lexus golden opportunity sales event. Get 0. 9 apr for 60 months on all 2019 models. Experience amazing at your lexus dealer. Dagen good morning. Im Dagen Mcdowell. Breaking news on the american consumer. Walmart is set to report its Quarterly Earnings moments from now. We have the numbers and a full analysis. One of the best pictures of the state of americans, are they financially healthy, are they out there shopping. We will break it down. Breaking news out of china in the last hour, beijing threatening retaliation if the u. S. Goes through with additional tariffs on september 1st. That news sparking a major selloff. The dow futures are off the lows of the session but still down 146 points at the moment. And money has flooded into u. S. Treasuries overnight. The yield on the 30year bond falling below 2 for the very first time. This after markets closed at the lows of the day yesterday. The dow seeing the worst day of the year, losing 800 points, losses of about 3 across the board on all three major market gauges in the us. Checking Global Market action in europe, markets in selloff mode as well. We have losses in england, france and germany of more than 1 . In asia overnight, it was mixed market action. The nikkei the only loser there, down more than 1 . Trouble in hong kong, the country cutting its growth forecast and announcing 2. 4 billion in stimulus an then the 2020 race for the presidency, one democrat is said to be dropping out. Another about to reset his campaign again. He details ahead. And a massive data breach, prosecutors think the capital one hacker suspect may have infiltrated more than 30 other organizations. Walmart is Lauren Simonetti standing by . Well introduce the panel in a second. The numbers are crossing right now. What do you know right now . Lauren we have the numbers from walmart. The earnings per share, 1. 27, that was better than the estimate by a nickel. The estimate was 1. 22. Revenue also stronger, 130. 4 billion in the quarter, versus 130. 1 billion as the estimate. Let me get you two more numbers. We see as positive stock reaction, stock is gaining 1. 6 . Same store sales, better than expected, 2. 8 growth. Ecommerce sales, theyre putting a lot of money into those operation as they compete with amazon, that too better, a gain of 37 . Dagen, back to you. Dagen we have an earnings beat on earnings per share. We also have a beat on revenue and walmart has raised its full year Earnings Guidance and then u. S. Same store sales, they came in, lindsey, better than expected, correct . I was just looking for that number. The expectation was around 2. 4 as well. Im guessing they probably did come in better than expected, given what the overall comp is. But i think dagen excluding fuel, they were up 2. 6 , so thats u. S. Comp store sales, same store sales. So this is i think the market the early Market Reaction tells you whats going on. We have a gain of 2 on walmart shares right now. Walmart being a dow component. Take a look at the overall u. S. Futures here to see the reaction in futures. This is give has given the bluea little bit of a lift off the lows. I want to bring inthis morning, just to introduce everybody. We have david kudlow, lindsey bell and James Freeman and aaron sykes. Good to see you. What do you make of the walmart numbers . I expected walmart to actually beat. Really, first of all, we had amazon prime day. Amazon prime day is actually a benefit for walmart more than anyone else because people start the crossshop and compare numbers. Walmart has a strong base. Despite the shootings and all the unfortunate events, it really has stayed true to the core message. It was founded by sam walton who was a hunter. Theyre best able to handle the tariffs. Even if china retaliates and we have all of these head winds, walmart, amazon will stay strong. Thats a good point. With walmart, twothirds of their goods are sourced domestically, mostly because the grocery business is the largest part of their business. Only a third comes from other countries, including china. What do you expect management to say on the call about tariffs . We heard from macys yesterday that 10 tariffs the consumer can absorb but there really isnt an appetite for more than that. The problem with macys, the fundamental strategy is broken and has been for a long time. Tariffs can be a death blow to macys where it may be a hiccup to walmart. They can handle it, they can roll it in and still keep low prices because they have so much quantity. Theyre probably encouraged by ecommerce sales being up 37 , being very competitive. Thats another beat. It was expected to be up 35 . It was 48 last quarter. That is driven by grocery a as well. David was talking earlier about the health of the u. S. Consumer pulling the economy along. Should we view these results as kind of an affirmation of the larger macro data weve seen about i guess employed, wellpaid, happy consumers generally. People are still spending. Its where theyre spending their money. The traditional Shopping Mall model that is dying. That is not an indicator of Retail Health overall anymore. Its more amazon, walmart, stitch fix, more hip omni channel retailers. For people who have gotten into the amazon habit, maybe theres a concern theyre getting too powerful, is walmart a complete competitor online or is it certain segments where theyre competitive with amazon but not so much the broad offerings. Their online is definitely driven by grocery. That has been what has driven that. 48 , that 37 growth this quarter, so they have more bandwidth to move up in their dotcom sales as well. Dagen i want to bring you uptodate. U. S. Comp sales were up 2point 2. 8 , better than expectations. U. S. Ecommerce sales were up 37 . To your point. And theyve also raised their guidance for the year, full year Earnings Guidance. So this is and also raising expectations for fiscal 2020 u. S. Comp sales. Operating income and eps as well. Walmart is knocking it out of the park in this report. Absolutely. One thing to highlight, you named the names, where the consumer is going and where theyre shopping is value oriented stores. They are price conscious right now. I think thats really important. That goes to show that probably part of why walmart raised their guidance for the full year, because they know the consumers, especially if we get into a rocky period with Economic Data, theyll continue to come to the store. This this the face of wages rising over 3 for the last 10 months for the consumer. So how important is it for walmart to continue to invest in price and value for their consumer . I think its extraordinarily important. Now, as a occurrenc consumer, we ability to price compare very easily on the spot. They need to keep prices down in order to really compete with amazon. Its those two players and the pricing big battle and you also have softer players like target and ross and kohls but theyre not going to really work through these tariffs as easily as walmart and amazon would. Dagen were taking a look at walmart stock premarket trading. Again, really positive comments and positive results across the board, what the last quarter looked like and what the rest of the year looks like, more than 5 andahalf percent gain. Take a look at the dow futures, walmart shares are contributing to the plus side. You see the reversal in the dow few churkfutures, only down 73 , walmart stock is contributing 39 points to the plus side on whats going on in futures trading at the moment. Were waiting on retail sales for the entire month of july due out in an hour. The expectation is for an increase of 3 10 of 1 . Erin, what should we be watching for when these numbers come out . I think well have either on target or slightly on retail i think because of amazon, because of walmart, because we had all those fun ipos with revolve and stitch fix and or excuse me, revolve and the real real, so i think theres some interesting things happening in retail. Weve had a lot of kind of negative nellies out there with retail in general but i think that we consistently see quarter after quarter that retail is still strong. Dagen david, i want to get you in here. If you watch these futures, again, selling off because of the kind of nondescript, nonspecific threat from china, but when the rubber meets the road and we look at actual numbers and good results on the u. S. Consumer, you have people whose fears are eased. We have these macro factors and factors from abroad that people are concerned about. But theres an important point here. The u. S. Has never imported a aa recession and when we bring it back to these numbers, with walmart, with retail sales, we talk about the consumer, twothirds of our economy is a consumer. And numbers coming through like this is encouraging and tells us that when we look at our economy and if our economy is still on track, we dont have as much to fear about a recession as some might lead us to believe. Dagen we have lower oil prices, lower gasoline prices and because of the real collapse in longer term Interest Rates, weve had incredible refinancing activity and all of that puts more money in the pockets of u. S. Consumers. Yeah. Ceos are nervous, concerned, worried about global issues. The people who work for them are not. They seem to be spending. Theyre happy their wages are rising. Eventually, it seems like somethings got to give, either the lack of investment by the ceos is going to be a problem or maybe these hardy consumers start persuading executives that the economy is better than they think. Dagen . Dagen final word befor. Im excited to hear the retail numbers and im excited for the rest of the year and into 2020, i think well continue to see a lot of strong activity. Dagen businesses and consumer breathing a sigh of relief knowing some of the tariffs on thingpeople will be shopping for the holidays wont be hit with additional costs, although i suspect the retailers have already bought ahead, number one, and number two, they would eat it. Thats not good for stocks but good for consumers. Good to see you, erin. Thank you so much. Breaking news, China Threatens retaliation over u. S. Planned tariffs set to take effect september 1st. We dig into that, how its impacting markets. Look at the reversal in these futures, this is volatility. Volatility has really come back in force in the month of august. The volume in the stock market has been relatively light and youve seen volatility across the board in a whole host of asset classes. Weve got a 43 point loss on the dow futures right now. Walmart really pulling those futures off the lows. Hong kong unrest to tell you about, the chinas People Armed Police could be brought into the city to end ongoing demonstrations. The concerns, next. All right brad, once again i have revolutionized the songwriting process. Oh, here we go. I know i cant play an instrument, but this. This is my forte. Obviously, for Auto Insurance, weve got the wheel route. Obviously. Retirement, were going with a longterm play. Makes sense. Pet insurance, wait, let me guess. Flea flicker. Yes howd you know . Studying my playbook . Yeah, actually. Mothat a handle is just a is jushandle. Ir. Or that you cant be both inside and outside. Most people havent driven a lincoln. Discover the lincoln approach to craftsmanship at the lincoln summer invitation. Right now, get 0 apr on all 2019 lincoln vehicles plus no payments for up to 90 days. Only at your lincoln dealer. Dagen futures are pointing to a lower open. The picture is a lot prettier than it was just literally 20 minutes ago. The futures off the lows of the morning, a 57 point loss, 60 point loss on the dow futures. But after one thing driving futures lower was china threatening to retaliate against proposed u. S. Tariffs. We already know chinas retaliating quite frankly because china decided to stop importing all u. S. Agricultural goods. That happened earlier this month. But walmart is the big bright spot thats brought the futures off the lows. Better than expected earnings, raising its better than expected sales, raising its Sales Guidance, raising its Earnings Guidance and we also got numbers from alibaba, which was a beat on the top line and the bottom line as well, so you have a Chinese Company and the biggest u. S. Retailer both reporting better than expected results and thats really given the markets a lift. So this is a tale of actual numbers and results versus headlines, nonspecific threats over the trade fight. Meantime, Chinese Military spotted near the border. Cheryl its being called a clear warning to prodemocracy supporters. Satellite images show the chinese Paramilitary Forces are holding exercises at a sports stadium. Hundreds of soldiers were seen marching in the stadium with 100 paramilitary vehicles parked outside. There are concerns the soldier coughs bscould be used to end demonstrations in hong kong. Huawei employees reportedly helped african governments spy on political opponents, leading to several arrests. They reportedly helped then intercepteintercept encrypted m. Amazon having a change of heart over unsold merchandise. Starting next month they will donate unwanted products from third party seller, instead of tossing them into the trash. The products will be sent to nonprofits in the u. S. And charities in the u. K. As well. Amazon sent 300,000 products a garbage dump over a nine month timeline. Theres amazon in the premarket. As you can see, a little bit of pressure o amazon this morning. Dagen im reading through the walmart comments, cheryl. It was a great quarter for them. Cheryl yeah. Dagen they said weather was disruptive in parts of the u. S. , that negatively impacted comp sales early on. They saw a significant improvement as the quarter moved on. Cheryl by 2020 theyll have Online Presence Delivery Available to 90 of the country. Thats pretty good. Dagen absolutely. The consumer environment is in relatively good shape. Well take that. A look at the stock, up 5 andahalf percent. Coming up, the capital one hacker more ambitious than originally thought, targeting other banks as well. We take a look at that story. Plus, 2020s richest, where the hopefuls land on a list of the wealthiest candidates. And its not joe biden. Stay with us. 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. Taking trulicity with a sulfonylurea or insulin increases low blood sugar risk. Side effects include nausea, diarrhea, vomiting, belly pain and decreased appetite, which lead to dehydration and may worsen kidney problems. I have it within me to lower my a1c. Ask your doctor about trulicity. Liberty mutual customizes your car insurance, so you only pay for what you need. I wish i could shake your hand. Granted. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. Dagen welcome back. 20102010 focus, two democratic hopefuls ready to make announcements today, this as President Trumps Approval Rating dips in a new fox news poll. Grady trumbull is covering the story for us. Reporter the crowded democratic field could get just a little bit thinner today, a source says that John Hickenlooper, the governor of colorado, is expected to drop out of the race. He struggled lately with polling as well as raising enough money, just tough to get on that debate stage with so many candidates. This likely wont be the end of politics for him, though. Advisors say he could jump into another crowded race, the Democratic Senate primary in the hopes of unseated gop cep tore cory guard senator cory gardner. It would thin out a little bit the large number of candidates running for president on the democratic side. Others are still facing pressure, though, to follow suit. Beto orourke for one, hes not going anywhere. Hes hoping to hit the reset button on his campaign after suspending it for two weeks following the mass shooting in his hometown of el paso. Hes expected to give a speech there today. And then on the republican side, you mentioned that new fox news poll. It Shows Approval of President Trump has slipped quite a bit, a 56 of voters polled say they disapprove of his job performance. Thats up 5 from just last month. And only 1 point away from his low in october of 2017. The president is hoping to regain support or at least show that his most enthusiastic supporters are still behind him. He has a rally tonight in manchester, new hampshire, obviously a very important state. Dagen indeed. Thank you so much. Turning to the wealth of the 2020 candidates, forbes out with the definitive wealth ranking, topping out the list, President Trump, 3. 1 billion his net worth, more than all the candidates combined. Hes followed by tom steyer, john delaney, Michael Bennett and elizabeth warren. Coming in at the bottom Tulsi Gabbard and mayor Pete Buttigieg with a net worth of less than 100,000. Joining us now, dan alexander. What to make of this . Each one of these people has their own story. You can learn a lot by looking at how somebody made his money. Beto orourke, most of it came from his family. John delaney, he made a lot of money in the business world. Each of them tells their own thing. Dagen james . Well, i am always disturbed by how many people seem to get very wealthy in politics and also we see elizabeth warren, she and her husband are harvard professors, net worth, 12 million. You think about all the tax benefits this institution gets. You think about all the kids piling up debt to go to these schools. It makes you shake your head. 12 million. Thats the net worth for a few professors . I think that that was surprising, to see her up there toward the top of the list. One of the other things that was surprising, especially the bottom of the list, is how valuable government pensions are. You can stay in government for years and just become a millionaire based on that. So that doesnt happen in most other careers that you might enter but in government it can. Dagen go ahead, lindsey. What i found interesting about this report is you have a transparency score for each of these candidates and you note that not one of them has answered every one of your questions. So who was the most transparent . Who was the least transparent with you with regards to if you put at the top of the class, the people who did the basic things, so thats elizabeth warren, Pete Buttigieg, joe biden, these are people that released their tax returns, filed financial disclosures, that sort of thing. In every one of those cases, we came back and said theres this major question. For buttigieg, how much student debt do you have, thats a big thing democrats talking about what theyll do with student debt. This could affect his personal fortune. He wouldnt answer it. Elizabeth warren, on her disclosure she lists the three largest assets as a Million Dollars plus, she wouldnt specify how many millions of dollars they are. When we started i thought that in order to contrast themselves from trump, a lot of the candidates would try to be as open as possible. At the end of it, we found they were more transparent than trump about finances but none of them were totally open books. Dagen if youre running of n a socialist platform, you cant appear to be the capitalist that you are. Again, it was like bernie sanders, he finally makes a buck in his life and he runs out and buys what is it a lake house that was worth well into the six figures. Ill just point that out. Whats i think bothersome, not just bernies capitalism hip considecapitalism,hypocrisy n he delaney started two public companies, by far the wealthiest, 200 million of net worth, compared to some others those look like honest dollars that hes earned but that also suggests he might be able to stay around for a while, unlike some others who are bumping around with low poll ratings, because hes got the ability to selffund. You see that already. If you look at the amount of money that hes raised and the percentages put in personally, far higher than the rest of the candidates and donald trump hasnt put in anything. Hes using his money to put in real money to support his candidacy in ways nobody else really is. Well see tom steyer, when his numbers come out i put delaney at the top. But steyer now entering the race is wealthier. Dagen part of it is their message kind of carefully crafted as if you have a lot of money youre somehowievill some, because maybe it looks bad if you made money in your life, whether a government job or capitalist endeavors. The evil rich are the ones who are going to pay for all these programs. You cant have it both ways. Please keeps us uptodate. Will you. Dagen as the race wears on. Were following the market action. Futures well off their lows of the morning. They had been down because of china threatening retaliation against the u. S. , threatening again over the next round of tariffs, but lets talk about walwalmart instead. Walmart lifting futures from their worst levels. The stocks up more than 5 , better than expected Second Quarter earnings, better than expected quarterly revenue, raising its Sales Guidance, raising its Earnings Guidance. The consumer looks relatively good. We have more ahead. At synchrony, were changing whats possible every single day. 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Get exceptional offers now. We all feel, we all love, we all cry. Its part of being human. Sonoma county declared a homeless emergency in 2018. You have to know the individuals youre serving to understand their needs. Working with ibm watson we can bring together data spread across dozens of departments. That gives us a fuller view of the people we serve. Dear tech, dear tech, we need to look after everyone in our community. And we want to help our fellow human beings. 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. Dagen welcome back. Im Dagen Mcdowell, it is thursday, august 15th. Walmart rideing to the rescue for the broader market. The retail giant reporting better than expected Second Quarter results, raising its guidance for the year on sales and on earnings. Again, this is something you can quantify. These results, and this forecast look great and the stock is showing it, up 6 in premarket trading. Cisco warning of a rough road ahead. That stock sliding but off its lows of the morning, its down more than 8 . It was off more than 10 in early premarket trading amid a sharp decline in its business in china. Meantime, china threatening retaliation if the u. S. Goes through with additional tariffs on september 1st. The futures are well off their lows of the morning. The dow futures are now in positive territory. Is that accurate . Okay. Now theyre in positive territory. They were down steep declines earlier in this session. Checking on the yield on treasuries right now, take a look at the 30year yield. This is the yield curve, the two and the 10year, not inverted, the two year yield lower than the 10year. But it was buying of the 30year overnight that got all the attention. The 30year fresh youly, the long bond, that yield dipping below 2 for the first time as there was a rush to safety. Market closed at the lows of the day yesterday, we had an 800 point loss on the dow futures, on the dow industrials yesterday. It was the biggest loss of the year. Check on the Global Market action. In europe we have markets lower across the board. Again, off their lows. And in asia overnight, we had mixed action, gains except for the nikkei, a loss of 1 there. News of the china retaliation coming after markets closed. Breaking news this morning, its been a wild ride for the markets. We now have the futures in positive territory. We had good news out of walmart, period, and walmart really riding to the rescue of whats happening in futures trading. Joining us now, what to make of it is all, Wells Fargo Investment Institute president darryl cronk and Portfolio Manager of fixed income advisors, bryce do the ty. Darryl to you first. Ive explained it, this is hard core numbers versus a threat from china. Walmart, despite the trade fight, because of the health of the u. S. Consumer, is still able to put up solid numbers, give us a solid forecast for the rest of the year. Is this indicative of whats going on in the broad economy and does it make for a higher stock march he get potentially, not just today, but in the weeks and months to come . Its a good point, dagen. Obviously, looking backwards at Second Quarter earnings that ended june 30th, is a long time ago and a lot has happened in july and august since then. I was most encouraged by walmarts forward guidance. I think that makes the most important sign or signal that theyre seeing good things in the economy. Well get retail sales here in a few moments. Amazon had its prime day last month. It should be around 15 of total retail sales which should be robust. Be a nice piece of data. Whats important for people with the markets and the futures, were 28, 45 right now which coming off one of the worst days or the worst day of 2019, we were lower last week. We were at 28, 22 last week on the s p. So even though yesterday felt pretty acute and bad, were really kind of treading water at this 5, 6 , 7 number which is pretty standard for a correction, especially after the great first half of the year. Dagen i want to point something out, though, in terms of because youre talking about the wild ride in the market. Stock market volume is lower than normal right now. It is. August, i wrote a piece the other night called the cold wind of august, right, which is you normally have low volume, low market depth and high volatility in the month of august. But this ones even been unusual for august by comparison. We actually think, though, you can hold we need to hold 27, 90 on the s p 500. Yesterday didnt look like a washout day. Decliners to advancers were 16 to one. It wasnt the high volume day you need to really put a good bottom in. So we probably tread water and maybe drift a little lower, in our opinion. Dagen bryce, to you on whats going on in the fixed income markets specifically and the treasury market with money rushing into longer term treasuries yesterday, the twoyear yield for a short time was higher than the 10year yield. Thats a phenomenon, an inversion which in the past has predicted recessions. I think lindsey pointed out that the yield curve since 1980 has flattened or inverted seven times. Fed cut rates each time, four of those inversions led to a recession. On that note, what is is this just a problem from that we are seeing in our treasuries from the rest of the world or is it indicative of a u. S. Economy thats in a precarious state . Its really difficult to tell because as you mentioned, theres just not enough data points, not enough instances of inversions to really make a concrete conclusion because each of them comes about in a different way. This inversion has been very unique with a lot of the dough hthedomestic Economic Data being pretty strong but the Global Economy with tariffs is creating a unique environment. I have to tell you, when i was in yesterday and i saw that twos to tens spread being the same as the seven, it had a Chilling Effect on me. It brought back all these flashbacks and so i think it had a very emotional impact on the march hthemarkets, it probably t by everyday americans. Theyre probably feeling good about the economy. It is important, though, those emotional events are important and youre right. I wish id seen the stock market really just maybe this morning just really get pounded early and take out a bunch of stop loss orders and get the jitters out of the way and have it rebound up. Seems like until we have that moment, youre going to have the dark cloud hanging over us through the rest of august. But i think on treasuries, its still amazing that the 30year yield is below 2 . There could be something out there that im not seeing, like a recession. I just dont see all the factors that you normally see lead up to a recession. So then i go back to oh, it must be europeans rates that are distorting our 30year and things like that more so than recession fears. With that uncertainty, with the dark clouds, what are you doing in your portfolio . Are you putting some hedges in place . Weve had a lot of analysts, a lot of people talking about adding gold to their portfolio as a hedge. Gold has a negative correlation to u. S. Stocks. Its had a very good return over the last few months. As a total return to portfolios and gives us that nice hedge on down days. When we had the big down day for stocks yesterday and we had gold, whether its gld or iau up 1 , gold miners up as well, are you looking at hedges like that that dont necessarily hurt you return but gives you that negative correlation with stocks during these uncertain times. Weve actually had a fair amount of interest from clients about how to diversify their risk and even though were in bond portfolios, like what are ways that you can insulate lets say high yield from the equity beta thats in there and try to take advantage of that. So were doing a little bit of a barbell. So well have long treasuries for kind of a safety net, if you will, if things really go down. And then on the other end, picking up yield by adding to credit and then when theres dislocation like this, a lot of volatility, theres inefficient parts of the market, closed end bond funds are very inefficient because youll see panic widen out the discount, the actual market price versus nav. Dagen how are you allocating capital right now you. Actually, we think this is a good buying opportunity for things like consumer discretionary, consumer remains strong, technology, so some of the more cyclicals. We arent chasing the defensives at this point because we think theyre relatively rich. I would just note, and david you raise a good point, what people dont realize is a 30year bond has returned 18 yeartodate. Its the single highest returning asset across the board in the Capital Market structure today. Dagen can that continue . Will that appreciation continue . I think rates probably stabilize from here. The most frequent question i got yesterday was are we just going to zero or negative rates like the rest of the world. My in box lit up with that question. I would say no. We just disagree with that. We dont think the American Economy is in that bad of shape of. Yield curve inversions are an outcome. Theyre a symptom. They are not the driver unto themselves. The driver is slower Global Growth, policy, trade tariffs, and issues with basically earnings concerns and the fed behind the curve. Dagen which is something lindsey pointed out. Historically, youve had the fed raising shortterm Interest Rates that caused the inversion and this is the reverse of that. That gives you some solace here. It seems like the markets driving the yields are driving the fed, how does the fed right the ship. Economic data in the u. S. Is very good. Even if its worse overseas, its not nothing is falling off a cliff yet. Fed funds are two and a quarter. Forward Inflation Expectations are 150. You do the math. That tells you the market tells you the fed is 75 basis points or three cuts or maybe two, if they use 50 basis points, too high. In the simple math terminology. The market thinks rates should be 75 basis points below where they are in fed funds and fed funds is the highest global rate on the board right now. Dagen i always say this. Think about it. It costs more to borrow overnight than it does for the federal government to borrow annually over 30 years. Thats how you know that well. Thats a large banking org. Any. Dagen organization. Dagen it turns the world upside down. The bank is saying youve got to lower the shortterm rates. Are you going to get excited about negative rates . Am i going to get excited . Are you getting excited about negative rates coming. I dont think negative rates are coming onshore to the us. What we have to Pay Attention to is the u. S. Dollar. As money flows here it pushes the dollar higher, puts a a head wind into corporate profits. Dagen thank you, darryl. Good to see you. Bryce, thank you both. Coming up, markets turning positive this morning. Walmart rides to the rescue. We take a look, more ahead. Fun fact 1 in 4 of us millennials have debt we might die with. And most of that debt is actually from credit cards. Its just not right. But with sofi, you can get your credit cards right by consolidating your Credit Card Debt into one monthly payment. You can get your Interest Rate right by locking in a fixed low rate today. And you can get your money right. With sofi. Check your rate in 2 minutes or less. Get a nofee personal loan up to 100k. Cheryl welcome back. Retailers walmart, alibaba posted better than expected earnings this hour, that has supported a recovery in the broader markets, walmart up more than 6 , al alibaba up almost 3 andahalf percent, futures taking a big turnaround, in big part thanks to walmart and strong earnings this morning. There is more trouble for dow component boeing, this involves the triple 7x. Boeing is delaying delivery of the ultra long version of the triple 7x plane due to engine issues, pushing the first flight to next year. This comes as the 737 max remains grounded. Boeing reported the biggest ever quarterly loss last month due to soaring costs to fix problems toonthe 737 max. Boeing up more than half a percent. The hacker accused of breaching capital one was apparently on a hacking spree when she was caught. Prosecutors say Paige Thompson also stole data from more than 30 other companies and organizations. Thompson was arrested last month for allegedly accessing more than 100 million credit card applications from capital one, one of the largest data thefts from a Financial Services firm ever. And hard seltzer now so popular, more Companies Want a piece ofs this financial pie. Pabst blue ribbon, four loco, Natural Light introducing versions of the drink. Theyve had a 193 year over year sales growth, just in april of this year. Pretty amazing. Thats according to forbes. Weve got a lot more coming up this morning. Lower Mortgage Rates making a difference. Who is benefiting . Thats ahead. Its time for the biggest sale of the year on the sleep number 360 smart bed. Can it help keep us asleep . Yes, it senses your movements and automatically adjusts to keep you both comfortable. Save 50 on the sleep number 360 limited Edition Smart bed. Plus 0 interest for 24 months on all beds. Only for a limited time. Dagen the slide in Interest Rates driving down Mortgage Rates, dipping 15 points in just the last two weeks. As a result, were seeing increases in both Mortgage Applications and the volume of refinancings. Joining us now, dolly linds and managing director of dolly lind rate, jimmy linds. How is the market for housing changed as Mortgage Rates have continued to fall . Well, the refinances are terrific. People have lots more money in their pockets and walmart is proof. Theyre spending the money that theyre saving on all their refinances. It makes a huge difference in peoples confidence in the general marketplace. Refinances are up 37 from last week and 81 from a year ago at this time which shows that people who bought a home want to lower their mortgage payments and people who want to buy a new home, Mortgage Rates Mortgage Origination is up 21. 7 from last year. Dagen is the lending there . Are the refinancings there. Are the banks stepping up . They are stepping up. You still have to have good credit. Theyre trying to find ways to get you the loan. How have you seen the 30 year mortgages move . We see what it does in the market but at banks, how is that . Has it moved significantly down with the 30 year bond or it has. It has. And the good news is, banks are also theyre doing their usual offers, not necessarily fixed. And people dont stay in homes 30 years. So i dont know the 30year is really the benchmark. I think people stay in home seven years average. So if we get a 10 year loan, thats great. Meaning 30 year payment, but a 10 year rate, thats good enough for most people. For people who get nervous hearing about a wave of refinancing, thinking about the prefinancial crisis, much less cash being taken out versus pre2008. Is that because the banks are a little more careful about making sure people maintain a lot of equity in the home . I think the banks are more careful. I think the consumers are more careful. A lot of consumers got burned. This new offering that perhaps will get loans at 3. 5 down, i think is amazing. I hope that all comes through. Especially for first time home buyers who need to buy and and they dont have enough money. They dont have money saved. Dagen this is a proposal by the ben carson, the fha, which i think is the best news i heard all week because we have so many buyers that just dont have the money. Theyre millennials, right. They have a lot of student loan debt. And they really need that extra help from the government to be able to buy a home. Dagen which of the housing markets look the most l solid right now, dolly . Firsttime home buyers, oddly. Theyre the ones anxious to get in. They are all chomping at the bit to buy something. Any new listings, anything new, thats the strongest part of the market, oddly. What about manhattan . There was a report that came out that rents jumped 6. 5 . How do millennials or those just entering the workforce starting new jobs in new york city, how do they afford that . Well, they have a lot of trouble or they have a roommate or they have a parent. Dagen or jenny, you buy. Jenny bought. I did. I did. But its true. Were really struggling right now. Rents are up. In the rent, buy analysis, it makes sense mostly to rent. That pushes rental prices up which means we cant afford anything and we have to live with three people, to an apartment. Dagen its the influx of jobs, despite amazon which is trying to figure out where its going to locate, its Companies Moving more people into new york city. Good to see you, dolly and jamie. Thank you so much. Walmart rides to the rescue, walmart adding more than 40 points to the dow futures. We have gone from negative 200 to 122 point gain on the dow futures, really incredible. More on china retail, ahead. Of. Key portfolio events. All in one place. Because when its decision time. You need decision tech. Only from fidelity. 2,000 fence posts. 900 acres. 48 bales. All before lunch, which we caught last saturday. We earn our scars. We wear our work ethic. We work until the works done. And when it is, a few hours of shuteye to rest up for tomorrow, the day well finally get something done. corey is living with metastatic Breast Cancer, which is Breast Cancer that has spread to other parts of her body. Shes also taking ibrance with an aromatase inhibitor, which is for postmenopausal women or for men with hr her2 metastatic Breast Cancer as the first hormonal based therapy. Ibrance plus letrozole was significantly more effective at delaying disease progression versus letrozole. 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Southern company [ soft piano music playing ] mm, uh, what do you do for fun . Not this. Oh, what am i into . Mostly progressives name your price tool. Helps people find Coverage Options based on their budget. Flo has it, i want it, its a whole thing, and shes right there. Yeah, shes my ride. This dates lame. He has pics of you on his phone. Theyre very tasteful. Dagen good morning, im Dagen Mcdowell in for maria bartiromo, its thursday august 15th, your top stories at 8 00 a. M. Eastern. Walmart rides to the rescue of these markets, walmart coming coming out with better expected quarter results, we have 6 and a half percent gain on walmart shares, walmart stock, it is a dow component, adding 45 thereabouts to the dow, jcpenney, also rising premarket after posting a loss than expected, you talk about the u. S. Versus china, how about the u. S. And china, good news from alibaba also moving higher after beat on top line and bottom line numbers, later this hour we get july retail sales thats at the bottom of the hour, walmart helping reverse these futures out of the red, futures down luckily 200 points earlier in the session after but now look at them go, again, walmart shares adding 45 points to the dow futures, 146 point gain on the blue chips tat moment, china threatening retaliation at if u. S. Goes through with tariffs on september 1st, thats whats caused disruption and the cooler heads prevailing, again, a amorphous threat from china, another one versus hardreal numbers from the biggest retailer and private employer in the country. Checking on treasury yields, look at the 2year versus 10year, the 2year is lower, the yield curve is not inverted, flight to the safety of the 30year bond overnight in long bonds, the yield there falling below 2 , really, the lowest its ever seen. The dow seeing yesterday biggest loss of the year so far down 800 points but reversal this morning, somewhat of a reversal, in Europe Markets are lower but they are bouncing off the off the lows, the ftse 100 in england and dax in germany still down but again cac quarante in positive territory, they were down almost 1 earlier, reversal there and reversal here, asia overnight, green across the board except for loss on nikkei down more than 1 . And here to break it all down with me, Mainstay Capital Management cfo david, cfr strategist lindsey bell and assistant Editorial Page Editor James Freeman, i give you first crack this hour, whats on your mind . Well, i think if the larger retail sales report nears the good news we got from walmart, we have to say weve got the concerns, weve got worries, weve got tension about trade, but we still have a pretty good economy and i would say not one that needs to be rescued by our Federal Reserve following the rest of the world to negative rates. Its remind theyre the economic environment here in the u. S. Is on solid footing, its very strong, the Economic Data so far this week better than expected, cpi data showing upward prices earlier this week, Small Business confidence very strong, i expect that to continue when we get retail Sales Numbers. I got an email from Edward Lawrence, fox Business Reporter down in washington, again, this is somewhat of a headline driven market, could explain some of the bounceback in u. S. Futures, up 221 points, china wants to, quote, work out a mutually acceptable solution through equal footed dialogue and consultation with mutual respect, this is from Chinas Foreign Ministry spokesperson, this is from Edward Lawrence from Fox Business Network but, again, this is a this rhetoric is certainly more soothing than we will bunch back and retaliation to tariffs coming september 1st, david, before we go to dierdre on the floor of the exchange, what do you say . How bad it was yesterday and how good its becoming today, so the headline is now with fundamental news thats coming through on one stock in particular, we will see what the retail Sales Numbers look like, but, you know, the economy is still on good footing, probably most than people think and as we look forward over the next few months, we are still constructive on stocks, we still think that investors need those hedges in portfolios but should be continuing to look forward to positive market environment. More to discuss as the hour wears on. Stocks appear headed for a real rebound, look at the futures, 174 point gain on u. S. Futures right now, Dierdre Bolton on the floor at new york stock exchange, dierdre. Good morning, a lot of traders early to set up for trading day, i caught up with john, one of our good sources down here, i talked to him, he does think that the rebound should be able to hold today, cooler heads will prevail especially after the selling that we saw yesterday and in response to chinas implication that it would in fact, be retaliating against the u. S. latest match up in the tariff, the trade war, he said, you know, the question really is how much a muscle does china does have and i think this kind of pushpull sentiment is all about how u. S. Corporations are managing this trade situation with china, so we saw with walmart and dagen, you have been covering this, beating on the top and bottom line raising guidance and then walmart specifically saying what i think is why we are seeing the stock moving higher so much premarket, its overhauling supply chain, it is buying merchandise in advance, so walmart is showing you at least one big American Company that is essentially managing its relationship with china, thats part of the reason why you have a lot of optimism there on the downside as much pessimism for cisco which is showing its not really managing relationship with suppliers and manufacturers in china and it is being affected, we heard from cisco after the close last evening, guidance for Current Quarter extremely disappointing, dagen. Dagen thank you so much Dierdre Bolton in new york stock exchange, joining me now chief of staff to the Vice President of the United States mike pence, marc short. Initially threat that china would retaliate against the u. S. Tariffs set to take effect on september 1st but now we are hearing the china Foreign Ministry spokesperson that china wants to work out mutually acceptable solution through equally footed dialogue and consultation with mutual respect, unquote, where does the u. S. Stand with negotiations with china and are cooler heads prevailing . Well, dagen, i think that secretary mnuchin and lighthizer continue to have communications with china and hopeful additional talks this fall but i think the administration has been pretty consistent in needing to change the past, i think that for years theres been an assumption that once you have trade with china all sorts of other reforms will take place, that hasnt happened and what we have seen is, again, china continue to abuse the deal that weve had by stealing intellectual property, forcing transfer of ownership, manipulating currency and a lot of things that the administration is looking to reset. I think to the origin of your question, i think obviously theres also a lot needs to inversion of the yield curve that you mentioned and as you mentioned in your last hour, that is predicted 7 in the last 4 recessions, so, you know, its not necessarily the factor, even though there was inversion in yield curve and we posted 3 gdp number in quarter, its hard to imagine scenario when you are 3. 7 unemployment, alltime lows for hispanics, alltime lows for africanamericans, its up 500,000 per household, hard to see scenario in that environment when the economy is doing as well as it is right now. Dagen i want to point out that the 2year yield being higher than the 10year we havent seen that actually seen 2007 and thats what really triggered worries yesterday in the markets, we had seen it between the 3 months and the 10year, but not that kind of 2 and 10year, i wanted to point that out. But President Trump has been concerned about fed policy going back to last year as the fed was still hiking Interest Rate going into tend of the year and he went all in on Federal Reserve and jay powell on twitter yesterday, some of what the president said, we were winning bigtime against china, companies and jobs are fleeing prices to us, have not gone up and in some cases have gone down, china is not a problem, hong kong is not helping, problems with the fed raised too much, other countries say thank you to clueless jay powell and the Federal Reserve, germany and many others playing the game, crazy inverted yield curve and we should be reaping rewards and gains but the fed is holding us back, we would win exclamation point. Marc, has the president spoken with jay powell . The president has had communication with jay powell throughout the tenure but i think that, you know, the frustration of the Administration Since 1970s the fed has followed this this notion of the code as enemployment increases necessarily inflation must follow and accept theres a correlation, but doesnt mean its alternative, what we have seen in the environment in the last couple of years, employment has increased greatly and more americans employed than ever before but inflation is not necessarily followed, so what we hope the fed stays focus on is inflation and right now because america is doing in many ways so well, one of the reasons the Interest Rates are low is because as people are struggling elsewhere the foreign currencies, investments are coming into the United States to buy treasuries because thats a safe haven because people know that america is the safest place to invest, that drives up bond prices and drives down the yield and so right now we are not seeing inflation. Dagen we did get ncpi, we got 3 tenths of a 1 gain two months in a row for core cpi and that was the strongest twomonth gain in over a decade. There has been a little bubble of inflation there and businesses, look at cisco, cisco reducing its forecast for the quarter because of business in china, so our trade fight with china regardless of whether people believe this is what need to be done or doesnt, it is having an impact on businesses and maybe inflation in this country. Dagen, im not sure that two months of. 3 cpi increases a trigger inflation, weve enjoyed the fact that real disposable income and wages have increased 3. 2 without the correlating increase in Consumer Prices, so we are very pleased with the current environment, we think that inflation remains low and part of that as well is the fed is looking in a relative basis and as you see rates go negative, more reason for pressure of increase rate in the last couple of years. Marc, clearly the president is unhappy with what the Federal Reserve has been doing, has there been any discussion of trying to remove jay powell of the fed chief . Im not aware of any discussion along those lines, dagen. Dagen i want to move onto gun control, 90 of americans when asked are in favor of required background checks, i know that theres an article in the wall street journal today that advises to the president a weary as the president considers gun proposals, what is on the table here and what could we expect to come out of the white house in terms of anything the president would get behind in terms of restrictions on how you buy a gun or gun ownership . Well, dagen, chief of staff Mick Mulvaney and the policy team inside the white house is having a process, multiple different proposals, meanwhile head of legislative affairs has been talking to people on the hill to figure out whats possible and whats not possible, but theyll be conversations with the president in the coming days and i think the president will indicate that before Congress Comes back likely the direction that we are headed but, you know, one one oe elements of this is less attention is speech that attorney general barr gave a few days ago, how can we move forward with expedited process, in many cases tim mcvay, before Capital Punishment applied to him, we feel that needs to be part of the discussion. Dagen is there a date set for trade talks between u. S. And china . Right now im not aware of a date set but as i said the conversations have been ongoing between secretary mnuchin and counterparts there. Dagen marc, thank you, good to see you this morning. We covered a lot. Marc short. Look at reversal of u. S. Futures, 6 00 a. M. , its been a gigantic turnaround, now up 123 points, walmarts earnings beating expectations, sales beating, sales coming higher than expected, forecast better than expected, the u. S. Consumer looks relatively good here and the markets do too. Walmart shares adding north of 40 points to the dow futures. And crisis in hong kong, we take you there live with susan li for the latest as the peoples army from china could be brought into the city to end the unrest. Stay with us. Mothat a handle is just a is jushandle. Ir. Or that you cant be both inside and outside. Most people havent driven a lincoln. Discover the lincoln approach to craftsmanship at the lincoln summer invitation. Right now, get 0 apr on all 2019 lincoln vehicles plus no payments for up to 90 days. Only at your lincoln dealer. Tensions driving in hong kong, Chinese Military moving closer to the border, susan li in hong kong on the ground there with the very latest, good morning or good evening, susan. Good morning, to you, dagen, but lets start with the Foreign Ministry statement that we got on trade because that does bring back the situation here in hong kong and as you just heard, lets put up the board, we hope that the u. S. Can work to implement the two president consensus reached to work out mutually acceptable solution, equal footed dialogue with mutual respect, speaking of dialogue we heard from President Trump talking about possible meeting with president xi and trump tweeting saying that i know president xi very well, hes a great leader who very much has respect of the people, hes good man and tough business, i have in doubt that if president xi wants to humanely solve the hong kong problem he can do it, personal meeting, perhaps, thats a question mark at tend of it. As you mentioned we do have concerning bills up, just 4 miles away in hong kong in chinas college, just across the waterways here and weve had some concerning satellite imagery, also video now of thousands of Chinese Military troops, theyve been holding these military exercises, buildup of tanks and artillery in stadium and Chinese State media has made references to the exercises, but, you know, they were going take place in the 11th week of protest here in hong kong, so i think the timing is a bit suspicious and we have heard from President Trump tweeting that u. S. Intelligence suggest that theres a Chinese Military buildup and possibly, possibly, i dont want to overstate the matter but could and they do have the right by the way to enter hong kong if they so wish to do. As for hong kong, we just heard from the economy minister today saying that they expect almost zero growth, dagen. Dagen susan, thank you for the report. Susan li on the ground in hong kong, incredible reporting, coming up markets wild ride, breaking news out of china sparked earlymorning selloff, threats of retaliation against the u. S. For september 1st tariffs going into effect, but then, boom, walmart rides to the rescue, completely erasing the losses and futures, positive statement out of the Foreign Ministry and china as well, walmart, we look at cisco, we look at everything driving the markets as soon as we come back, stay with us. Theres a company thats talked to even more real people than me jd power. 448,134 to be exact. They answered 410 questions in 8 categories about vehicle quality. And when they were done, chevy earned more j. D. Power quality awards across cars, trucks and suvs than any other brand over the last four years. So on behalf of chevrolet, i want to say thank you, real people. Youre welcome. Were gonna need a bigger room. From the 5am wakers, to the 6am sleepers. 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Cheryl yeah, dagen, the suspect surrendered at midnight eastern time, 7 hours after the shooting, police diving for cover, barricaded himself in building with hostages, all started when officers try today serve search warrant for drugs and met with gunfire. Shots fired. We need s. W. A. T. Asap, long gun asap. [shots fired] cheryl well, none of the hostages luckily were harmed, all 6 officers recovering this morning at home. Well, the accounting expert who helped expose is raising questions about general electric, harry claims the situation is much worse than what is in the companys regulatory findings according to report in the journal this morning, ge needs to increase reserve by more than 18 billion and also taking issue with how ge accounts, thats oil and gas business, ge stands mind behind financials. British airways to take some of the anxiety out of flying with virtual reality, the airline is testing the head set on flights from jfk through end, you can watch 2d, 3d, 360degree videos on head sets as well as guided meditation, they also partnered with airlines last year on Video Program envisioning a world, we will be walking with big things in the head and not talk to each other anymore. Dagen dont talk to me if youre sitting next to me on the airplane. [laughter] cheryl ly get you the head set. Dagen benadryl and scotch. Wild day in wall street tripledigit loss to tripledigit gain, great numbers out of walmart, strong guidance, but, again, worries out of cisco about retaliation by china that was the headline we are already seeing, retail sales in a moment. Yeah, actually. Content on their endless quest, to nowhere. S, run hopelessly in their cage. But perhaps this year, a more exhilarating endeavor awaits. Defy the laws of human nature,at the summer of audi sales event. Get exceptional offers now. Dagen welcome back, im Dagen Mcdowell in for maria bartiromo, thursday august 15th, breaking news on the consumer, we are wait if. E tail Sales Numbers to come out right now, economists expect a gain of 3 tenths of 1 , four tenths of 1 , we also get week jobless claims out. Retail sales for july up fifth month in a row, better than expected number of. 7 for the month of july. Think about it. You had the heat wave, a lot of people go to store to cool off or spend money on utilities and the like and you had amazon prime day and the associated sales. So those were two things that likely boosted this much better than expected number, again, the consumer still strong as indicated in the july retail sales report gains for 5 months in a row. Dagen. Dagen do we have the core number . Lauren the auto number is gain of 1 , so that too better than expected. Dagen say that again, somebody was talking to me in my ear . Lauren 1 . Dagen wow. Lauren better than expected. Dagen thank you so much, lauren, i appreciate that, but, again, this is a great this is great retail sales number regardless of how you cut it. Wall street economic editor jon hilsenrath, speaks to strong consumer, jon. It certainly does and we should expect that in the kind of environment we are in, you know, we have very low unemployment, we have households that have been doing a lot of saving over the last couple of years compared to 2000s, we should expect consumer to do pretty well, i think what the market has been concerned about lately and why you saw such a big 3 drop yesterday was because there was concern about the business sector, our corporate profits, business profits under pressure, are Companies Going to continue to invest and most importantly continue to hire, thats the uncertainty on the horizon right now. Dagen you have been we talked about it earlier, you have been going through the commentary from ceos and the like looking for their discussion about any potential recession and just one thing that i wanted to point out, walmart is extremely strong but cisco cut guidance for the quarter and it was in part related to business in china, but business in china, although, a small part of ciscos overall business, dropped and its very important when we talk about the headlines about china retaliation, cisco has sold its products for years to large carriers in china and stateowned enterprises, cisco has not been invite today participate in bids which the ceo says is not surprising given the current situation. Theres the tug of war. Jon you know, one way to describe this, i think, think about two economies in the United States, theres the real economy, you know, consumers and and businesses at home and everything that we see happening around us and then theres the corporate economy, the multinationals that have set up supply networks all over the world, you know, the real economy in the u. S. Is island, we are not dependent on exports, most of what drives the economy here in the United States is Consumer Spending here but american multinationals, the corporate economy has tentacles all over the world, if theres going to be hit from all trade conflicts itll be through the corporate side of the economy, thats the channel through which it trades through which is why we have to look at the Earnings Reports to see if businesses are being affected by what happened to them overseas, the domestic economy, the corporate economy is very connected to the rest of the world. I hope that makes sense. [laughter] lindsey bell here, the consumer like you said really has been the engine to have economy here but what makes the consumer blink . Right now the sentiment is very strong, theyve been spending, you saw in secondquarter numbers today in retail Sales Numbers, what makes them lose confidence, whats the risk to the economy . Well, i mean, id say there are two channels that hit consumers, one is the the portfolios, the investment portfolios so, you know, if stocks take a big hit theres something, you know, as well as anybody, wealth, i dont think thats necessarily a big factor, i think the big and presiding factor right now is the job market which is why we have to watch every, you know, first friday of every month here on fox business, 8 30 in the morning, whats happening to the job market, you know, as long as unemployment is very low, i think consumers keep spending money and they feel pretty good. If Companies Stop hiring because they are word about their own global portfolios, then i think that start to affect consumers, thats like a second or third order effect, we dont see that for several months down the road, if things settle down and Companies Keep hiring and we are in good shape, if businesses keep worrying about profits, then we could see it filter through to jobs. Dagen that raises the issue on what does the Federal Reserve do, you sat down with former fed chair janet yellen. Jon did you like that little feed . Dagen that will keep me smiling and you sat down with janet yellen former Federal Reserve chief in exclusive interview, it really made big headlines yesterday and here is what she said about the risk of recession and the inversion of the yield curve, listen to this. Jon are we going into a recession . So i think the answer is most likely no, i think that the u. S. Economy has experience to avoid that but the odds have clearly risen and hire than im frankly comfortable with. Historically its been a pretty good signal of recession and i think thats when markets Pay Attention to it but i would really urge that on this occasion it may be less good signal and the reason for that is that there are a number of factors other than Market Expectations about the future path of Interest Rates that are pushing down longterm yields. Dagen jon, what were your take aways from that interview . Jon a couple of things, as we were talking right here a moment ago, i think the former fed chair sees a strong domestic economy, consumers in pretty good shape and i think her belief is that that will carry the economy forward and help us avoid a recession right now, but she said the risk is rising and if she was running the fed right now and she almost was, President Trump considered her pretty strongly she would be cutting Interest Rates, so what i take from that expect more Interest Rate cuts, you know, this thing about the yield curve is interesting and complicated development, what happened yesterday was, you know, a lot of different pieces to have yield curve, the treasury issues securities at different maturities, one important part of the yield curve, the relationship between twoyear Interest Rates and 10year flips so the 2year rates were higher than 10year rates and in the past that has been a sign of recession, what cherry allen said, maybe this time is different, maybe thats not a sign of recession right now for a lot of technical reasons, inflation is very low, Central Banks all over the world had been buying Treasury Bonds themselves which are influencing those rates in distorted ways, a lot of Investment Companies like Insurance Companies and Pension Funds have been buying a lot of longterm bonds, technical factors why shes not too worried about the yield curve inversion but i said to her, i said theres words that every economists we greats and this time is different and she kind of agreed with that, you know, maybe this time isnt different and the yield curve is telling us something that Everybody Needs to worry about. And actually Alan Greenspan said that in late 2005 yeah. Hes like, im imitating him, of course, he said that the yield curve inversion was not not the indicater that it once was, James Freeman jon by the way, greenspan said theres no such thing as National Housing bubble. Got it wrong also. Even though shes saying i cut rates, given that she and her colleagues remain Monetary Policy for years after the crisis, this seemed like for her upbeat reading i would say. Well, you know, shes shes a pragmatist but also a dove, so she said she would cut rates because, you know, she was always the one in the room at the fed saying, you know, we have to be on guard against recession, we have to be working hard to make sure that the job market is strong, we dont need to be too worried about inflation and i think thats why, that kind of guarded doveishness and guarding indicated why she would be cutting rates, shes plead a lot of good calls on the economy, i did a story years ago analyzing every fed official speeches and seeing who made the best forecast and she won it. So i think we need to Pay Attention if janet yellen is saying the economy is probably not heading to a recession we should be encouraged about that, yeah. Dagen guess what, jon hilsenrath, people can watch your entire interview with janet yellen former fed chief, tomorrow 9 30 p. M. Eastern on the Fox Business Network, great to see you, my friend. Thank you. Dagen walmart to the rescue, futures reversing course after retail giants earnings beat completely erases Early Morning losses by chinas threat of retaliation against the u. S. Crisis in hong kong as the peoples army might be brought in to the city to end the unrest. Stay with us. We trust usaa more than any other company out there. They give us excellent customer service, every time. Our 18 year old was in an accident. Usaa took care of her car rental, and getting her car towed. All i had to take care of was making sure that my daughter was ok. If i met another veteran, and they were with another insurance company, i would tell them, you need to join usaa because they have better rates, and better service. Were the gomez family. Were the rivera family. Were the kirby family, and we are usaa members for life. Get your Auto Insurance quote today. My body is truly powerful. I have the power to lower my blood sugar and a1c. Because i can still make my own insulin. 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Youll see what a fair price is and you can connect with a truecar certified dealer. Now youre even smarter. This is truecar. Dagen protests rocking hong kong, china apparently looking for ways to clamp down on demonstrators, the host of varney company, stuart varney, stuart, i know that this is an issue thats near and dear to your heart for a number of reasons. Stuart it is the hong kong authorities are not going make any political con decisions to the demonstrators, they just made a huge financial concession to the demonstrators, i think it amounts to an attempted buyout, Just Announced a series of what they call stimulus measures which, in fact, are giving money to the people of hong kong. They will be tax cuts, income tax tax cuts for a lot of people, cuts in the businesses have to pay, a lot of businesses, one month free rent for Public Housing operations and a lot of people live in Public Housing in hong kong and then theres going to be a boost, i dont know one time or not but its a boost in Social Security payments, in other words, theres a vast amount of money going to be flowing out to the people of hong kong and i think its attempt to buy them off. After all, one to have complaints of the protestors and they voiced this this morning in press conference delivered in english, one of their complaints is the slowdown in the hong kong economy and income inequality, income with Massive Stimulus Program and attempt today buy off the demonstrators, whether it works or not, dont know, a little early, quarter to 9 00 in hong kong, the protests take place in the evening, we will see if this works, odds are it wont but it is an attempt at buying them off. Thats the way i read it, dagen. Dagen and if the situation there calms down that makes for certainly a better environment as the u. S. And china try to resolve this trade dispute. Dagen as the president said, President Trump suggested that, look, deal with and addressing xi jinping, deal with hong kong humanely and here is xi jinping dealing with in a humanly way, maybe we will meet half way, china and the u. S. Thats one of the big reasons why futures are up this morning, dagen. Dagen u. S. Consumer that looks great. Dagen sure does, consumers are strong at the moment, look at walmart, look at retail sales, you know, this is a Strong Economy right now. I think that negates some of the opinion in this inverted yield curve scenario that would get a recession 18 months down the road. Dagen a lot more for everybody coming up at the top of the hour. Stuart yes, we do. Dagen 9 00 a. M. , stuart varney, varney company, markets wild ride, reversing course following earnings beat and erasing headline of china retaliating and cooler statement from the Foreign Ministry about trade and talks, we are less than 45 minutes away from the opening bell, stay with us. Fun fact 1 in 4 of us millennials have debt we might die with. And most of that debt is actually from credit cards. Its just not right. But with sofi, you can get your credit cards right by consolidating your Credit Card Debt into one monthly payment. You can get your Interest Rate right by locking in a fixed low rate today. And you can get your money right. With sofi. Check your rate in 2 minutes or less. Get a nofee personal loan up to 100k. To the wait did frowe just winners. Prouders everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. 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I spoke with a few analysts that are covering, they say, listen, the company has been overhauling supply chain and didnt happen overnight, they have been working on this for months and they also say they have figured out other kinds of suppliers, buying merchandise in advance, in other words, they are navigating where they need to navigate, so thats a sign of corporate strength obviously, their strategy, their decision, secondarily one trader on the floor is telling me that the within reason walmart is carry so far, consumer, kind of giving a boost or reminding everybody how strong u. S. Consumers are. You guys were covering the breaking news of the retail sales for the month of july, the biggest gain, right, in four months, so anyones march straight month of gain and, again, underlying the strength of the u. S. Consumer which reminds investors that the u. S. Economy is in pretty good trend. Futures indicating a higher open, very welcome reprieve after yesterdays worst day ever for the dow, 800point drop, dagen. Dagen thank you so much dierdre, yeah, worst of the year, is that the biggest point drop in dow history . It was the 307th fourth largest point drop. Percentage wise we lost quarter of the value of the dow in crash of 87. It was up 23 that day. S p 500 even with the selloff yesterday was still up 13 year to date, so good year for the markets. Its been a very good year for the market, i think that investors need to remember that we go through these corrections a couple of times per year and we had a 19 correction in the fourth quarter, we had a 6. 7 correction back in may or 6. 7 pullback in may, 5 pullback here recently, we will go through the starts and we suffer from this kind of headline risk, we suffer from a new term we have now and tweet risk that comes from our president , and that one one of those tweets can mean a lot to the market and investors, we say we need to look to the other side and look at fundamentals, we have these things, these historical factors like this yield curve and sometimes dissect that, whats affecting the yield curve right now, the fed pins the short end of the curve and they are pinning quite high right now but they are cutting rates, sovereign debt around the world is negative, 30year bond is negative in or very low in other countries, 10year bond pulling that part down but we know that retail sales are strong, investors need to look at that and look at fundamentals and realize that we still have a good economy and solid fundamentals for the stock market. Dagen we are doing that right now. Keeping an eye on the futures, on all the markets, final thoughts from the allstars when we come back. And youre saving money, because you bundled home and auto. Sarah, get in the house. Were all here for you. All all day, all night. dramatic music great job speaking calmly and clearly everyone. Thats how you put a customer at ease. Hey, did anyone else hear weird voices while they were in the corn . No. No. Me either. Whispering voice jamie. What . 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 can the past help you write the future . Can you feel calm in the eye of a storm . Can you do more with less . Can you raise the bar while reducing your footprint . For our 100 years weve been answering the questions of today to meet the energy needs of tomorrow. Southern company dagen a turbulent day on wall street so far, and the day actually hasnt even started. We have the opening bell in 30 minutes. Final thoughts from this allstar panel. David, you first. For investors, ignore the headlines. Look at the fundamentals. And look over your portfolio. Look at what volatility youre going to be comfortable with in your portfolio as we work through these rocky markets. Weve got more ahead with the trade wars creating volatility, but as we look forward, we think that the stock market has further to go and as we saw retail Sales Numbers, the economy is doing better than many think. Dagen yeah. I would just reiterate the fundamentals are really strong here but if you feel like you are on an emotional roller coaster, like i do, youre not alone. Stay the course. We are talking about tweet risk related to the president but i would like to praise the president for tweeting to xi jinping to resolve the hong kong issue humanely. Dont send troops in. Dont break your promises to the people of hong kong. Respect their freedom. Dagen thank you so much. Incredible morning. Right now, it is varney company. Stuart, take it away. Stuart good morning, dagen. Good morning, everyone. Fastmoving situation here involving china trade, hong kong and Interest Rates. I will start with trade. Early this morning, we heard that china would take quote, necessary countermeasures for the tariffs that will take effect september 1st. That meant retaliation and stocks went down. Then came a report that china would like to meet america halfway in the trade talks. Stocks went up. Lets deal with hong kong. Thats related. Which the president has linked to trade talks. He suggested china settle the hong kong chaos humanely and then deal with the trade situation. Well, this morning the authorities in hong kong