Transcripts For FBC Varney Company 20240713

Maybe 50 odd points today. Its a down day, at least at the opening bell. Caution, tomorrow we get the big report on the Service Sector and friday, the big jobs report. If either confirms the manufacturing slowdown, im going to say watch out below. And this, too, may be a negative for stocks. The hong kong shooting tuesday night, an 18yearold High School Student goes down. It is urban warfare. No other name for it. More protests are planned for right now. Dont ignore this. The National Day Military Parade in beijing on display, a series of very modern weapons including carrier killers. That is missiles capable of knocking out an American Carrier battle group. That would change the military balance in the pacific. Thats the asian backdrop to the trade talks, not that encouraging. We are invested in you and we will take you through what may be a nailbiting day. Varney company is about to begin. Stuart this market is likely to open this morning on the downside after a fair sized drop yesterday. As we said, its lackluster manufacturing data that was the culprit that began the selloff. Economist john lonski is with us. All right, john, you have consistently said that you dont see a recession on the horizon. Are you saying the same thing this morning after that manufacturing data . Yes, i am. You know, weve had two relatively weak readings on manufacturing, the months of august and september. Yet if i go to 20152016, we had five consecutive reads that were comparable to what we saw yesterday, and yet there was no recession. My sense is that we are going to pull out of this slowdown by business sales, profits growth will return by enough to assure that hiring activity is great enough to prevent a rise by the Unemployment Rate. If we start to see a rising Unemployment Rate, thats when we begin to become very concerned about a recession. Stuart i dont mean to interrupt you but i have to get straight to the point here. You see no recession on the horizon, on the immediate horizon . Correct. I dont see it. Stuart for the next year . I think for the next year, provided that Interest Rates behave accordingly. Stuart you know whats coming tomorrow, weve got the big reading on the Service Sector. On friday, the big reading on jobs. If either of those two is really weak and confirms the weakness in manufacturing, will you change your mind and say maybe we could see a recession . I think perhaps theres a higher risk of recession but i still have to see that Unemployment Rate hit a definitive bottom, begin to turn higher for a couple months, then i know were in trouble. I would say right now, it behooves the fed to go ahead and cut rates by at least 25 basis points at its next meeting, the end of october, and maybe not be shy about cutting by half a percentage point on october 30th if we do have an especially weak reading from on jobs or payrolls. Stuart we got the adp report. 135,000 private sector jobs created last month. Is that weak or what . Well, its not great. Its lackluster. But it doesnt imply that we are beginning to see a rise by the Unemployment Rate that in the past has been very damaging to Consumer Spending and the overall economy. Let me add we also got good news in mortgage applications, they were up for both refinancings as well as the purchase of a home. Housing appears to be turning a corner. Its picking up momentum. That could be a major positive for u. S. Consumer spending going into 2020. Stuart all right. Nice piece of handholding from you at the opening of the show. T appreciate it. Equity market may be down from its latest highs but it is still up by 24 from where it closed on december 24th, 2018, Christmas Eve. Stuart really . From Christmas Eve to now . So we have had these moments of panic, you know, in the equity market, about a possible recession, yet that recession is yet to arrive. Stuart excellent handholding. Thank you very much, john lonski. All rit. Moving on regrettably the violence in hong kong. We are about to show you a video again and it is graphic in nature. Roll it, please. Lets bring in susan li as we look at what happened. Okay. Let me paraphrase this. A group of demonstrators surround and isolate a Police Officer. The Police Officer is beaten on the ground with metal rods. Another Police Officer comes over to help him. At that point, hes attacked by a protester and the Police Officer shoots him at pointblank range. Blood on the streets. Susan, i would assume that the people of hong kong are mad as hell about what happened. Susan absolutely. This really they say is a point of no return because after this, violence only gets worse from here in these 18 weeks of protests. In that video, you didnt see it but the Police Officer, his hand was actually hit by a metal rod. Thats why he accidentally fired at pointblank range at that 18yearold High School Student who is now in stable condition. Stuart accidentally . Susan it wasnt on purpose. Hong kong is a very peaceful place. This doesnt happen. Stuart he approached him with his gun drawn. Susan that was in warning, though. He didnt mean to actually fire live ammunition into the chest of an 18yearold high schooler. However, look, this has happened. The Hong Kong Police say the Police Officer involved acted legally, responsibly. You heard that from the beijing government as well. And basically, this says that from here on, who knows how long this will last for. It feels like its galvanized people of hong kong, you had hundreds of protesters sitting outside the high school where this 18yearold actually attended, and this as reports of his condition. Stuart i cant describe that as anything other than urban warfare. One sides got the guns and the other, the metal rods. Susan one of the ten largest markets in the world, Financial Capital. Stuart cant forget the trade talks, either. I dont know how you get a trade deal with that going on in hong kong. I dont know. Okay. We will discuss it throughout the show. Lets move on. Futures still now show a drop, bottom righthand corner of the screen. Now about 160 points after the 340point drop yesterday. Look at that number on your screen. Thats how much Bernie Sanders has raised, largely from small donors in the Third Quarter of the year. 25. 3 million. Liz peek is with us. You know what struck me about that number . The biggest donor group in terms of who they are was teachers. Well, im not at all surprised. Look, Bernie Sanders has led the charge for the teachers unions, been very supportive of their causes and looking to them for grassroots organizing which is kind of the secret behind bernies continued and surprising durability in this election. Also, we had other people who earn minimum wage voting for Bernie Sanders and we have to remember, Bernie Sanders in 2016 really began the whole conversation about the fight for 15, medicare for all, all the programs that hes running on now, he really put those on the map. Hes not going to be the candidate because basically, Elizabeth Warren is leapfrogging him on all those issues and others. She has a much more complete portfolio of issues that shes put out policy papers on. But hes doing very well. Interestingly, in may, there was this survey showing that the least informed voters were the ones supporting Bernie Sanders, and this is not by a right wing group. This is like nbc or something. But they remembered him from 2016. They applauded him. By the way, he earned very high marks for honesty and the fact that he is consistent, he never wavers. Kamala harris embraces medicare for all one minute, then in the next starts looking at it saying i dont like that. He has never wavered and gets high marks for that. Stuart we dont yet know how much Elizabeth Warren raised in the Third Quarter. It will be interesting to see. Stuart we do know President Trump raised 125 million. 100 million more than Bernie Sanders. A staggering number. It was trump and the rnc. One thing i would just call your attention to, in the 48 hours after nancy pelosi called for an inquiry on impeachment he raised eight million bucks from small donors, thats in 48 hours. Thats a pretty good sign that the base is with him, people are furious about this attack on what they consider to be a duly elected president and thats going to help him in 2020. Stuart thank you very much. Let me move on to an item of news about facebook. Remember the libra currency, im going to call it that, they want to come out with . Their partners, facebooks partners in libra are getting cold feet. Ashley cracks are now forming. We had Big Companies saying were on board but apparently, they are having second thoughts. The journal says its because they are concerned about the backlash from u. S. And european regulators. Lets not forget the fed chairman Jerome Powell told law makers he has serious concerns about libra, about privacy, about money laundering, and the journal says that in private, u. S. Regulators have been leaning very hard on the bankers, visa and mastercard. Maybe it doesnt have the support it once had. Stuart hard to say if thats actually directly hurting facebooks stock, because facebooks stock is down in a generally down market so its hard to isolate that one. Look at futures. We have dropped a little more, not that much. We are now going to be down about 170 points for the dow industrials. That is about. 66 but a bigger loss in percentage terms for the nasdaq. Thene have Forbes Magazine coming out with their annual list of the richest people in the country. We will tell you who came out on top. Heres one thing i will leak for you. America from these numbers is still a meritocracy. Actor chaz palminteri, started as a oneman show in the bronx tale and is in demand as a top hollywood actor. He will join us in the studio. Hes a success and he will tell us how he did it. Again, urban warfare in hong kong. Can xi jinping make a deal with President Trump when theres blood on the street . Thats next. 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. imagine a world where nothing gets in the way of doing great work. Where an American Icon uses the latest hr tools to stay true to the family recipe. Where a music studio spends less time on hr and payroll, and more time crafting that perfect sound. Where the nations Biggest Party store can staff up quickly as soon as its time for fun. This is the world of adp. Hr, talent, time, benefits and payroll. Designed for people. Should always be working harder. Thats why your cash automatically goes into a Money Market Fund when you open a new account. Just another reminder of the value youll find at fidelity. Open an account today. Stuart one of the very few big name stocks to go up yesterday was apple. It went up just a fraction. Premarket trading this morning, its actually down 1. 84 but apple is right there at 222, just as we go to the opening of the market. How about boeing . The New York Times reports that a Senior Engineer filed an ethics complaint, saying that during the development of the 737 max jet, the Company Rejected a Safety System to minimize costs. Boeing is back to 370 a share. Google ramping up privacy and security with some new features. Lauren simonetti, look at the stock, down 15 bucks, tell me, what are they doing . Lauren i tried some of the new features this morning. One is this password checkup thats built into chrome. Do you know we have an average of 27 passwords . How do you remember that . Stuart i believe it. Lauren when youre on the site it told me you used this password on three different sites, this password is weak and then it will let you know if the password is compromised. Three other things they are doing. You can use their Voice Assistant and say hey, google, delete what i just said, if you are in trouble, you can do that. On youtube, you can auto delete what you just watched. Finally, incognito mode, extending to maps. So we wont know where you go. So you can have more control over your presence online. I think this shows that google is not tonedeaf to the fact we say we are concerned about our privacy even if were really not. Stuart they are trying to deal with it. Lauren, thank you. Lets go back to the hong kong violence. I called it urban warfare and its relationship to trade. The trade talks. Curtis ellis is with us, former trump trade adviser. Curtis, obvious question. How can we make any kind of trade deal with china when theres blood on the streets of hong kong . Well, stuart, you raise a very good point. If there is more blood on the streets in hong kong, we are back to 1992. That is the year following Tiananmen Square when bill Clinton Campaign ed against the butchers of beijing and criticized george h. W. Bush for coddling the butchers of beijing. It will be impossible politically for anyone to make a deal with china if they get even more violent in hong kong. Look at all the statements that came out on both sides of the aisle on the 70th anniversary of the communist party. Senator mcconnell, toomey, people who have actually been kind of pushing for a deal with china, criticizing the totalitarian regime there. So it will be and ill tell you what. The dems, the democrats would try to outflank President Trump if he were to make some kind of deal with a brutal crackdown regime in beijing, and President Trump will not let the dems outflank him on such a situation. It would be very difficult. Stuart to sum it all up, this really looks like a big negative for china trade talks. What happened in hong kong and lets not forget that military parade in beijing with the carrier killer missiles. All negative, isnt it . It reminds everyone that the premise for opening up trade and investment in china, that would make it a more friendly democratic nonmilitaristic, nontoe ttalitarian regime was abject failure, a 40year experiment that has failed. This, whats happening in hong kong and as you point out, the huge military parade yesterday underscores the fact that we have been on the wrong path with china for a long time. Stuart curtis ellis, thank you very much for being with us. See you again soon. Thank you. Stuart take another look at futures, because it is a down day on wall street. It certainly will be in 12 minutes time. We are looking at a loss of about 173 points. I find this fascinating, actually. Having lived in america for 45 years, this blew me away. More people are taking out sevenyear loans on new cars. Back in my day, it was three years and youre off. But now its seven years plus. We will explore that one after this. Ive been a caregiver for 20 years. No two patients are the same. Predicting the next step for them can be challenging. Today were using the ibm cloud to run new analytics tools that help us better predict and plan a patients recovery. Ultimately, its helping thousands of patients return home. 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About neulasta onpro. Pay no more than 5 per dose with copay card. Sometand with theall screen Xfinity Stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. Download your dvrd shows and movies on the fly. Even record from right where you are. Keep what you watch with you. Download the Xfinity Stream app today and get ready for Xfinity Stream tv week. Watch shows like south park and the walking dead october 7th through 13th. Stuart hey, how about ford motor companys stock. Its at 8. 88, down a little this morning. Why . Their sales fell 4. 9 in the Third Quarter. Thats compared to a year ago. Down 4. 9 . The stock is down just two cents. But that puts it at 8 a share. Heres what i call something of a red flag economically. Sevenyear car loans. Okay. Thats 84 months to pay off your car. Whats going on . Because i ask the question because back in our day, if i can put it like that, it was three or four years. Ashley in the days of horse and buggies. Stuart it was three or four years. Now seven or eight. Why . Ashley because the middle class wants new cars but wages have not kept up with the cost of new cars that have all these newfangled devices, all the nice screens and all that, they tend to be more expensive. Average price of a new car, 32,000 or thereabouts. What happens is those loan periods get stretched out. There are reports, 1 of those loans, are eight to nine years. The average loan is more than six years, a little bit longer than six years. So your loan payment goes down but you stretch far out. The problem being with this, of course, is you are paying this amount every month for that long time. Eventually you are upside down because the car is not worth how much you owe on it. If you try and trade it in and buy another one, what youre left owing goes on to the new loan in theory, then you get into this big debt spiral. Its very difficult to get out of. A third of u. S. Auto loans right now in the first half of 2019 had terms longer than six years. Stuart a third. Susan just lease a car. Stuart why not lease . Susan especially when you lose half the price on depreciation off the lot. Stuart yes, you do. This is your story. Weworks debt downgraded. Its now junk status. Susan further into junk status. Heres the thing. Its junk but it yields more than 11 . You can stomach the risk, i wouldnt, because i cant stomach much risk, but its not surprising given they aborted that 3 billion ipo. They are in an intense cash burn. They need money. They are burning 700 million a quarter. They lost 1. 6 billion last year. They need money to unlock 6 billion in loans and 15year leases across the city and across the country, really, as well. They need to pay up at some point. Stuart looks really grim. I would not take the risk even though the reward is 11 . I personally would not take that risk. When you get to double digits. Okay. 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He gave away a quarter of his fortune to mackenzie bezos, who joins the list. Stuart gave away . Susan well, i would say all right. I contest that, too. Youre right. I apologize for that misuse of language. That was i guess that was lawfully obligated so she did help found the company all those years ago. She only got a quarter. Bezos still has 12 so hes worth 114 billion and to make the list stuart she should get a new lawyer. Susan to make it, you have to have over 2 billion in wealth this year. Stuart okay. Coming up at 11 00, we have someone fro forbes who will tell us where President Trump stands on the list. By the way, we are going to show you that america is still a meritocracy. That is extremely important. Sos this. 9 30 eastern time on wednesday morning and this market is now open. We opened straight to the downside, off 150 points right from the getgo. If you look for radio listeners on the lefthand side of our screen, its a sea of red. I can only see one stock that is up among the dow 30. All right. So the dow is off. 66 . The s p, i suspect its got a similar loss, a bit less, down about a half percentage point. As for the nasdaq, that was down over 60 points yesterday. Its opened with a 58point loss this morning. Big loss there, down. 75 . I want to check the price of oil because its down at 53 a barrel. Breaking news on saudi aramco, Charlie Gasparino reports from sources that saudi aramco is telling underwriters that drone strikes on oil fields will not prevent its massive ipo. Nonetheless, price of oil is down this morning. We have with us today shah gilani on remote, not sitting next to me but i will bring him into the conversation. Liz peek here, susan li, Ashley Webster all together now. All right. It was 23 hours ago, 23 and a half hours ago, roughly speaking, we got the bad news on manufacturing and that started all of the selling. Shah, tell us, are we back to worrying about a recession . Yes . Yes, we are. I think that data certainly spurred investors to do some selling, take some profits off the table. Since were so close to the alltime highs once again. Another issue that the markets are facing is we havent gotten to the new highs yet and if we dont get there, will investors take more off the table. Yeah, the manufacturing nrs yesterday portend the potential for recession. That scared investors. Profit taking then pushed markets lower. I think we are seeing continuation of that this morning. Stuart im going to continue with you for a moment here. In the past you have often said that in these big selloffs, it is a buying opportunity, because prices come down, you canbargai. Are you saying that now . Is this a buying opportunity . This isnt a significant selloff at all, stuart. This is just a minor blip on the radar in terms of the markets. Again, we are still very close to the alltime high so to me, a significant drop would be 10 , 15 , 20 , time to load up the truck once again. But were not anywhere near there yet but this is just a blip on the radar. This is nothing. This could pass very easily and we could see alltime highs possibly by the end of this week or next week. Stuart okay. Well, theres an interesting forecast, with the dow down 188 points in the very early going. Okay. First, Charles Schwab announced its eliminating trading commissions on stocks, etfs options. Now Td Ameritrade fires back by doing the same thing. You have extensive experience on wall street. Is this the end of all commissions on all stock and bond trades . Its been heading in that direction for an awfully long time but this is a pretty dramatic change. Stocks are down in that sector as a result of that because yes, i dont know, its like grub hub eliminating its delivery fees. What else have they got, right . I think this is sort of a dangerous game theyre playing but as i say, its sort of a continuation of an ongoing trend. Stuart great for us but not for the brokerages. Susan the cfo said the zero Fee Structure would impact revenues by 15 to 16 . Compare that to Charles Schwab who said that maybe they will have an impact of 3 to 4 by going to zero. But wouldnt you say that will also increase the amount of assets under management, because Charles Schwab thats what theyre trying, i mean, its like they are giving away something free in order to get something on which they can earn more money. Stuart they make money out of the big pile. Absolutely. Susan last time schwab did that they almost doubled their assets from 2017. Stuart but the stock is still down in the dumps. If i may chime in . Stuart go ahead. This is also a reaction to the likes of acorn and robin hood, who provide services for free. They have to react to that kind of marketing. Stuart got it. Moving on. Look at Johnson Johnson, please. Remember that is a dow component. It has settled with two ohio counties for 20 million. The stock is up this morning. What else we got . Ashley this is, they are trying to get ahead of this but lets not forget they still face hundreds and hundreds more lawsuits. This lawsuit against them in two ohio counties that include the cities of cleveland and akron, they settled for 20. 4 million. This is kind of looked at as a bellwether for all the other lawsuits out there. If you think this is just kind of getting a hand on it, theyre not. There are many many more lawsuits to be settled. 20 million for just two counties in ohio. Its one of the few stocks thats up. Obviously people thought that was a better outcome. Stuart you get the dollar number, you know what youre dealing with. Exactly right. Stuart look at this. Dow industrials down 220 points. Add it up and in the last, what, 24 hours, we have lost approximately 500 points. Pretty close. I thought there was no math on this program but there is. Netflix is down. The stock is down at 263. Watch out, red bull and monster beverage. Cocacola is out with its new energy drink but its not helping the stock. Only down a fraction, 38 cents less on cocacola. Bitcoin, where is that on a huge selloff in stocks . 8,250 a coin. Wheres gold in a big selloff on stocks . Where is it . 1503 per ounce. Where is exxon with Oil Prices Going down . It expects Weaker Crude Oil prices to hit its Third Quarter earnings. It will hit them between 400 million and 700 million. Exxon down at 68. As for the tenyear treasury, the money, yes, is pouring into america because we offer a yield, 1. 62 is the yield on americas tenyear treasury. Yes, it is week three of the General Motors strike. The union has rejected the companys new offer. The strike forcing 6,000 layoffs in mexico. Shah, the stock is down to 34 a share. No end in sight for this strike. I think the economy might be hurting because of it. What say you . Its certainly impacting the stock. However, its still not a bad buy down here, yielding about 4. 25 in terms of its dividend. But still, theres a lot more to go. Thats why it could go on for a long time. According to some of the numbers, gm is losing between 50 and 100 million a day from the strike. Stuart susan . Susan that impacts the pmi number yesterday, manufacturing, with the idle plants. Believe it or not, ubs actually raised their price target on gm this morning to 47, up from 46. Because you think about it, they are saving money if they are cutting jobs. Right . Stuart i suppose so. But at 34 a share, it was at 37 and change when the strike began. Now its 34. 93 in week three. What have you got . As we look at this market sink, it is now down over 200 points, shah was talking about this being a blip. Its true, but it has been ignited by this pmi number which i think was impacted by the gm strike. We have to remember rgs manufacturing is only 12 of the company. Tomorrow we are going to get the services pmi number. Much more important. That was just barely in expansion mode last month. If it goes into contraction mode, then i think we have something more to talk about. Ashley it contracted in august and got even worse in september. Thats the concern. Susan we have seen this trend in 2015 as well, when we had the contracting pmi numbers. Could we see a recession . No. Stuart but the market took a hit. It might tomorrow. Im not going to forecast anything. Shah, are you buying anything today . You brought up ford earlier. Sales were down but i like ford. Ford is the place where i put my money when im sidelined in terms of not wanting to go deep into the market because i think theres perhaps further downside to go. But at about 7 at any ti. 25 di yield, fords a great place to put my money. The stock has held up really well. Thats where i put my money thats sidelined. Stuart shah used to be the king of high tech. Now hes going for ford motor company. Interesting. All right. Its that time. Thanks very much. Good to see you again. Liz, we appreciate it always. Thanks, everyone. We are down 253. Thats where we are. 272. 273. A 1 loss on top of a huge loss yesterday. We have a fox business exclusive for you. Edward lawrence sat down with the richmond fed president to talk about the threat of recession. Edward joins us now. What did he say about recession . Reporter yeah, im in small town america, harrisonburg, virginia, very close to west virginia. Tom barkin, president of the richmond Federal Reserve, says he does not see a recession in the next year. He says that Consumer Spending is strong and that spending will continue through 2019 because more people have jobs and they have more money. Those jobs, he says, are reaching small town america here but hes concerned that the crosswinds, the uncertainty is weighing heavily. Listen. I do think its a real headwind, particularly these days on the business side. If you are a business person and trying to make a decision about whether to grow your business, whether to build a plant, you really like the conditions to be stable. You like to make a decision and know what the rules of the game are. Today, you dont know whether you should move your operation out of china or even mexico, or whether you should keep it. That uncertainty is very frustrating to most businesses. Reporter now, he would not say if manufacturing is in a recession but he says if some of that uncertainty clears up like usmca is ratified or we get a trade deal with the European Union or china, then businesses will start spending again, that side of the economy starts going. Stuart right in the middle of it, edward lawrence. Thank you very much. Apecia it. Is there still a lot of money to be made from flipping homes . Thats a pretty good question. New report says its getting much less profitable. Well, the star of flip or flop is on the show. I will put it to him. Personal trainer tony little, you know him from that machine, you know him from those Fitness Equipment infoe mmercia. What does he think of peloton . Is it here to stay or just an expensive fad . Hes the best person to ask that question. Hes on the show. We will ask him. But next, we have a Business Leader who helped make chickfila one of the most popular and profitable chains in the fast food business. She says a strong Corporate Culture is the key to succeeding in business. We are all about success. Limu emu doug hour 36 in the stakeout. As soon as the homeowners arrive, well inform them that Liberty Mutual customizes home insurance, so theyll only pay for what they need. Your turn to keep watch, limu. Wake me up if you see anything. [ snoring ] [ loud squawking and siren blaring ] only pay for what you need. Liberty. Liberty. Liberty. Liberty. Youre smart,eat you already knew that. But its also great for finding the perfect used car. Youll see what a fair price is and you can connect with a truecar certified dealer. Now youre even smarter. This is truecar. Should always be working harder. Thats why your cash automatically goes into a Money Market Fund when you open a new account. Just another reminder of the value youll find at fidelity. Open an account today. Stuart low of the morning. Now were down 298 points on the dow industrials, and the financial stocks, just look at them go down. 29 of the dow 30, clearly in the red. Breaking news on sawed arud aramcos ipo. Charlie gasparino, are they going through with it . Banking sources are telling us aramco is telling the underwriters they are, in fact, Going Forward with the ipo despite the drone strikes. I think what the deal is here is timing. We are going to find out in the next day or maybe week, weeks, on the exact timing of this thing but theyre still shooting for the end of the year. So as Oil Production ramps up, returns back to normal, it looks like this thing is going to happen and it could happen by the end of the year. The other interesting aspect of this whole thing, as you know, this is the oneyear anniversary of the murder of khashoggi. Theres an Investment Conference in saudi arabia and it shows you all these corporations run around talking about Good Governance and things of that nature. They are all sending representatives to that conference. Stuart good stuff. Thanks very much for joining us. The price of oil is down. Chickfila, Third Largest restaurant chain in america, its closed on sundays, i got that. Joining us, someone who helped make it a big success, the author of bet on talent , how to create a remarkable culture and win the hearts of customers. Former chickfila executive deann turner. Thank you for being here. You spent, what, 30 years at chickfila . 33. Yes. Stuart what made chickfila the success that it is . What i really believe is that chickfila started by creating a remarkable culture. The very foundation of what chickfila was, a company with a purpose that knew where they were going, they had a Challenging Mission to accomplish and they stuck to their core values. Stuart the core values being christianity . No. Not at all. While that was certainly representati representative, what the core values of chickfila are is we are here to serve, we are better together, we are purposedriven and we pursue whats next. Stuart the success is that you got your employees to get on board with the key message of chickfila. They are very nice to customers. The reason that is, is the selection of the people who actually lead the restaurants and they brought their team members in, taught them the principles of going above and beyond and exceeding Customer Expectations and thats how they have won the hearts of customers. Stuart you transferred that to other businesses, and thats how other businesses should succeed. Yes. I think thats improving the whole marketplace. I talk about that about a number of other organizations that do just that. Stuart what does bet on talent, what is that . In the tv news business, talent means people who appear on camera. Thats not true of the fast food business. Well, it is true, because they are talented. Let me explain the difference. We bet on talent at chickfila and the reason why of all the strategies you choose to invest in, what chickfila decided is to win the hearts of customers, the differentiator is talent. Theres a difference between selecting talent and hiring people. Hiring people is just filling your shift. Its just a warm body. But talent, they are very carefully selected for abilities that fit the role you have. Stuart is that what chickfila did . Select talent. Not just hire people. Stuart must be difficult, though. A fully employed economy, and it isou want to bring people in and you are going to select them . Thats a difficult road to hoe, isnt it . It is very hard. Thats why its so important, in my 33year career, i have seen this cycle, this full employment cycle three times. This is the worst ever. But what you have to do is prepare your culture ahead of time. You have to have that foundation of culture so some of these chickfila operators actually have people waiting to work for them because they built those relationships over time and people know what a great culture they have and they want to be part of it. Stuart i want to be part of chickfila. I want to own stock in it. Its private. Stuart you will never go public . I cant answer for chickfila because im not there anymore but thats what theyve said. Stuart when you were there when i was there, that was the commitment they made. Stuart you never want to cash out . Take your money and run . I cant answer for them. I will tell you what used to be said. He said because i own the business, it allows me to do the things i want to do and one of them was to build this remarkable culture. He did things for his employees that stockholders would never let you do. Thats one of the reasons he wanted to stay private. Stuart you know when chickfila opened its first outfit in new york city, the mayor of new york called for a boycott. The next morning there were lines around the block. Its just up the street from where we are. I believe thats because chickfila operators are focused on winning the hearts of customers. Thats what theyre doing even here in new york. Stuart it was a pleasure having you on the show. We love success. Theres no question that chickfila is a major league success. Thanks for being with us. Bet on talent. Interesting use of the word talent there. Thats right. Its the greatest misnomer in television, by the way. Thank you so much. Stuart thank you very much indeed. Check the dow 30, lefthand side of the screen. 29 of the 30 are in the red, theyre down. The dow industrials are down 266 points. There is a new player in the hard seltzer game. The guy who created buy healthy soft drinks launching a new line of sugarfree alcoholic sodas. Did they miss out by not launching in time for the summer beach season . Good question. Hes on the show. This is the age of expression. Everyone has something to say. But in a world full of talking, shouldnt somebody be listening . So. Lets talk. We are edward jones. With one Financial Advisor per office, were built for hearing whats important to you. One to one. Edward jones. Its time for investing to feel individual. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. 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Use promo code get25 to save 25 off your first year and get a free shredder with annual membership. Call now to start your membership or visit lifelock. Com tv stuart look at this. Now were down 308, down 343 yesterday, down 307, 308 now. Youre looking at a 650 point loss in 24 hours. That is a big loss. All the major indicators are on the downside. All the major market groups are on the downside. Right now, were off, look at that, bottom righthand corner of your screen, thats 1. 1 . This is a selloff. Maybe the markets considering the big numbers that were coming out with tomorrow which look at the Service Sector. If that follows the demise or the decline in manufacturing ashley another leg down. Stuart bad news. Ashley what happens if we get a tweet from the white house saying good news, things are changing on the china trade negotiations . Its still very much headlinedriven but the data is not looking as good as it has been for some time on the economy. Susan the German Research institute lowered their outlook for the German Economy and you know who has actually been impacted the most from these the china u. S. Trade war . German firms. You know the globalized world, germany is not spending as much, that means, you know, other countries and companies are not getting as many orders as well. Stuart all right. We are down 322. Im moving on to a totally different subject. I thought our next guest was about hard seltser. I was wrong. Hes not. He has a new line of drinks that are called, what is it . Spiked sodas. Stuart the gentleman on the screen, his name is ben weiss. Spiked soda. Explain it to me. Well, crook marker as a brand is an alternative to beer. So we see a fullon bevolution thats brewing, pun intended, in the alcohol space. Its coming at the expense of beer and there is an opportunity to redefine hydration within alcohol. Stuart wait a second. You drink these drinks in front of you here. Thats spiked soda. Are they colas . They are. You have classic flavors, cola, root beer, lemonlime and ginger ale. Stuart this appeals to millenials,imil millenials, genxers. Stuart they are trying to move away from beer because of calories and all that kind of stuff. You are moving into this. Is this low carb, low calorie . It is, low carb and low calorie with bold flavor. I do distinguish it from a seltzer. There is no compromise here. Ure not drinking bland. You are drinking full flavor but with zero sugar and no ficial sweeteners. Stuart zero sugar, no artificial sweeteners. An organic based brew. Stuart okay. All right. That went right over my head. But you are the guy who introduced bai, bai, soft drinks . Correct. I mentioned the bevolution thats brewing here it started in the nonalcs space. Bai and others have shaped millenials taste buds, if you will. Now they are aging into alcohol and they refuse to drink their carbs. 1. 2 billion in retail sales have gone away and you are seeing hard seltzer really accept the volume. Stuart i find it fascinating. In my generation it was beer. Now its not. Ben weiss, thank you for joining us. We appreciate it. We like success. You, sir, are a success. Good stuff. Thank you. Look at walmart. Why not. Its following cvs and pulling zantac from store shelves. Concerns about the presence of a carcinogen. Stock down just a fraction. Hong kong protests took a violent turn yesterday. A protester shot by police. Police officers beaten by protesters. All this makes it very difficult, i think, to make a trade deal with beijing. My take on that, coming up. Plus, Canopy Growth. The ceo is on our show in the next hour. I want to know, is the vaping problem hurting his business . I imagine it is. We are certainly going to ask him. More varney after this. We are watching that market, of course. We are down 320 right now. Stay with us, please. 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. stuart with a bad report on manufacturing. In the last 24 hours, the dow industrials have lost about 650 points. That is better than 2 . Now this. Lets call it what it is. Urban warfare in hong kong. We cant sugar coat this. You can see the video. A group of protesters isolate a Police Officer, force him to the ground, beat him with metal rods. Another Police Officer runs to help he is attacked by a protest er. Officer shooting him at pointblank range. He is 18yearold High School Student. That is blood on the streets and urban warfare. After that shooting there is a clearcut fight. Hong kong, this is beijing, neither side will back off. Xi xinping was celebrating Chinas National Day and the celebration was a display of military might, marching down the street, 15,000 troops and a series of new, deadly weapons, including hypersonic missiles and brand new carrier killers, longrange missiles capable of rendering a Carrier Battle Group obsolete. That changes the military balance in the pacific. That is a big deal. If there is a bloodbath in hong kong, it will be very difficult to conclude a trade deal with china. It will be hard to get the World Economy going again when the worlds second largest economy is mired in political turmoil. It will be hard to get serious growth here, when the china trade standoff makes everyone nervous. We cant look away. Asia is on the other side of the world. But what is going on over there is having a profound effect on the world and it is not over. I want to bring in susan li. Look at that market please, were down 346. That is the low of the day. Lets deal with hong kong. Susan you know the situation well. Seems to me things are escalating there. Susan point of no return it is called because everyone is entrenched on their own sides. Look at video posted on twitter overnight. Look at violence surrounding police force from the protesters as well. Theyre saying the protesters are trying to kill us. Of course we have to be prepared, we have to be armed. The 18yearold being shot yesterday with a live round of ammunition, first time in 18 weeks that happened in hong kong. The protesters are also digging in as well. We had hundreds sitting in, outside of the high school where the 18yearold is in stable condition, is still in the hospital where he actually went to school. Theyre prepared for hundreds of sitins across the rest of the city as well. Xi xinping cannot be happy with what he saw in hong kong. His national day in beijing was spoiled. Susan it was overshadowed. A loss in face. Celebrating 70th anniversary of founding of economist china if you want to call it with pomp ceremony coming down the road capitals in the city. Instead what was International Media focused on, what is happening in hong kong instead. Look at defiance, all the people in the Financial Capital for many, many years we dont want to be ruled by china and mainland china. Stuart i cant assess this but i would assume what youre seeing from hong kong and from china is a negative for our stock market. I cant make that case in dollars and cent terms and points on the dow terms but i believe that is a negative. Susan i would agree. Stuart lets get to your money. This is indeed the low of the day, markets showing a loss for dow industrials, 346. I want to bring in david dietze, point view wealth management. Numbers on manufacturing, bad numbers, worst performance in manufacturing for 10 years. Tomorrow we get numbers on the Service Sector. Friday it is the job numbers. In your opinion are we heading towards a recession . Well, stuart in this business for my, my clients better to prepare than predict but i dont think were heading to recession and i will give you two great reasons. First our consumer is strong. Joblessness is 38year low. Wages are rising. Hours worked are going up. Consumer sentiment ran, that is 2 3 of the economy second thing the Federal Reserve. Remember the old saying, dont fight the fed . Weve seen two rate cuts in as many months. Rate cuts going on around the world. Just yesterday australia cut their rates. Cheaper money is a tailwind for the economy. Stuart it is nail biting time, isnt it . We dont know what the Federal Reserve is going to do. We dont know whether the consumer will continue to spend money he or she has. We dont know all this were getting indicator in the services sector. A lot of people are worried. Were down 300 points here. T a lot of uncertainty. Were up doubledigit percentages. You remember the old saw the stock market called 10 of the last five recessions. Worst things look now, think if youre working for the Federal Reserve, more likely to cut rates this month. 2 3 likelihood well see a cut in october. Stuart david, i have interrupt you. This is live shot from hong kong. Bricks being thrown through store windows. This is 10 00 at night at hong kong. When nightal that is when protesters turn out, that is it when the violenc starts, it is starting right now. David, i have to believe what were seeing on our screens is negative for the stock market. I cant quantity spy it. Am i right . Its a negative . No violence is ever helpful to the stock market a couple things to remember, we hit highs last summer when yes lojackket were getting fights in paris. Stuart so what . This is the Asian Financial hub. It is and urban warfare situation. It is linked to the china trade talks. Come on. One other Silver Lining the chinese dont want to look like theyre too brutal on the world stage. To the extent theyre not looking good here more likely to be reasonable in the trade talks. Stuart you hope. Would you advise selling anything, any Stock Holding of any of our viewers would you sell now . Not in response to these headlines today. Stuart in response to anything today, would you sell anything today . Were not selling today. Were looking for opportunities and industrials and financials. They have already been beaten down. It is tale of two markets. Large caps have done well. Smaller caps should be more insulated from the problems on the world stage. They are off 10 . There are opportunity there, stuart. Stuart im looking for them. David, thank you very much. We do appreciate it. Well keep this on the screens. This is live action from the urban warfare zone i would call it that of hong kong. Chucking bricks through glass windows. Protesters are in black, got it. Atms smashed. That is what youre looking at right now. That is hong kong at 10 07 p. M. There. Dow industrials down 300 points. Well keep that on the screen, bring our next guest talking about impeachment and its impact on congress. A lot of us are saying impeachment, as it goes through Congress Holds everything up. You cant get anything done. But our next guest says thats wrong. Phil wegmann is real clear Politics White House reporter and he joins us now. Youre saying, if im not mistaken, phil, youre saying that the impeachment process actually makes usmca more likely to pass. Make your case, please. After my conversation with Senior Senate aides in both parties, impeachment if it has any effect whatsoever on the trade deal paradoxically it could actually get the trade deal to the finish line. Their thinking here incentives overlap between republicans and democrats. Republicans clearly want this trade agreement. They wanted it for a long time and democrats, particularly House Speaker nancy pelosi needs to be able to show the American Public going into november of 2020 that she can chew impeachment gum and also Pass International trade deals at the same time. So there is a good chance that this is the thing that both parties turn to which could be not politically toxic, during an impeachment era, actually get something done. Stuart but nothing else . Usmca you think has a good shot but what about Prescription Drug price legislation or infrastructure packages, are they out . What we know about impeachment it is sort of allconsuming vortex. Were not ready to Say Something is in or out just yet because so much time between now and november, but if you look back at history there, is some precedent when it comes to trade deals and impeachment. If you look at 1974, nixon was pushing for a new trade agreement even though under investigation mid watergate. Democratic house and Democratic Senate actually gave him the victory. Other analysts see something similar with new nafta. Stuart youre a white house reporter. Youre in middle of this, have you ever seen, i will use the word toxic,ave you ever seen a such a toxic political atmosphere in all your life . It is interesting we were talking about this trade deal and the other day you had ambassador lighthizer came out even during the sort of partisan uproar he still thinks usmca has a good chance. When you think about it, this is a big winner for the economy. It is not red or blue dollars. It is just green dollars. If you look what is the analysis says about billions of dollars in growth if this does pass. Now democrats have concerns over questions about labor enforcement. But it is possible that that could be smoothed out between now and next november. Stuart phil wegmann, tell you this. Investors would just love to see usmca pass in good time. That would really be a nice thing for the economy and the market. Phil, thank you very much for joining us today. We appreciate it. Thank you, sir. Stuart well watch hong kong for you. It is on your screen. Meantime, leave that on the screen for you. Meantime breaking news about airbus. The World Trade Organization issuing a decision on an american request to slap billions of dollars of tariffs on airbus. Whats the latest . Susan 7. 5 billion. That is what the wto says the u. S. Is entitled to levy tariffs on airbus. Stuart really . Susan because of what they called illegal subsidies coming from the European Union. Airbus overtook boeing as the Worlds Largest plane maker this year because of the problems of the 737 max. Apparently the u. S. Side were i can looking for tariffs up to 11. 2 billion. 7 billion is little less than they asked for. The eu countersued as well against the u. S. For their subsidies for boeing. This ruling could come in the first half of next year. So you know, looks like there has been a new front potentially opening in the trump administrations global trade fight. Stuart all right. Meanwhile, righthand side of your screen theyre smashing windows and smashing atms in hong kong where it is 11 minutes past 10 at night. Darkness has fallen there. As usual, as often happens, pecially after yesterday, violence has begun again. We have not yet seen a Police Response to what youre looking at on your screens. We understand protests have been organized around hong kong, around the city. Susan i would say this is pretty subdued. Were not looking at tear gas yet. We havent seen bricks thrown. Stuart through shop windows. Susan and atms, i will look closely which part of the city. This is taking place among the city districts to. Stuart this is how people of hong kong react to the shooting of 18yearold High School Student this is their response, theyre not backing off bit looks of it. Certainly not demonstrators. Youre right, susan at this point i have not yet seen water cannon and tear gas. Certainly have not seen Police Officers with guns drawn. Meanwhile on the market, i keep asking this question, because i just dont know, what impact of this violence from hong kong on our stock market . Ashley doesnt help but i dont think it has a huge impact at this point. Weve seen this 17 on plus weeks. Stuart true. Ashley well see how main land china reacts. Stuart i think there is a point of no return. Susan increasing in probability that it would be renot for beijing to declare martial law and roll in the tanks. Given what we saw over the weekend, first live round of ammunition, the 18yearold being hurt some say the probability has increased a little bit. Stuart well keep this on your screen. This is live action from hong kong. Well continue with the rest of our programing. I want to bring in gentleman from Canopy Growth, a marijuana, marijuana grower. We bring him in because of problems with the vaping industry, when vaping is a part of the marijuana business. I believe were up to 16 vapingrelated deaths. And countless injuries because of vaping. Mark is the Canopy Growth ceo. Mark, vape something a part of your business. Is it hurting your business . Good morning. So vaping is soon to be a part of our business is i think the fairway to put it. So in canada we will be launching Vape Products into the market in december but i do think it is important to take a step back to look at the Canadian Market and the u. S. Market. What were hearing in u. S. Media on vaping is tragic and i think it is compounded by the fact there is a lot of unknowns still. We heard is it illicit market . Is it vitamin e . Is it people tampering with the products . There is a lot of unknowns were trying to figure out. Stuart vape something relatively new. I think a product of the last 7 or eight years. We dont know at this point putting vape poor in your lungs of any kind, what type of risk that poses. We assembly dont know at this point. Youre going ahead with a vaping product in the future, right . I want to speak in the canadian context, i think there is three points. The first one youre hitting on there. I think we have to be transparent. There are unknowns and risks associated with vaping. We want to be transparent about that. We want as a company to do Research Going into the future to understand better. It is, if you look at canadian context, well be producing products in a regulated environment. Products we produce. What with you put in them where we sell them, there are rules how that will happen. On top of it you have a company like canopy were not taking random product from china, asking somebody else to fill it with something, putting our brand on it. This situation were controlling every element. Weve been Building Products for two years. Even before this particular story consumer features and consumer safety have been top of mind. These are products that will be tamperresistant. Thats products will be serialized. If something goes wrong we can track it back and understand these are products with ul certification to make certain the heating element dont overheat and we control the products that go in them and. Stuart i understand you just bought a majority stake in a Company Called boisteel Sports Nutrition. Will you make a cannabis infused sports drink . When i say cannabis infused, im not talking cbd but thc . Certainly in the Canadian Market will be launching thcinfused beverages. Excited to talk about that. Biosteel makes Sports Nutrition products including beverages that are used by people like wayne gretsky, brook henderson, ezekiel elliot, all kinds of professional athletes rely on the product for part of their wellness regime. For us as a company were excited to take that established product, that natural product, introduce cbd in it as offering as well to bring it into market. We think well see exponential increase in sales for those products. Stuart interesting stuff. Mark, Canopy Growth guy. Mark, thanks for join us this day on a busy show. Mark zekulin. Dow down 300 points. The and there is this. A federal judge rejected claims that Harvard University intentionally discriminated against asianamerican applicants. Judge napolitano with the case details coming up. Later this hour a reformed socialist. Were asking him what he makes of Bernie Sanderss fundraising haul. Bernie raised 25 million in the last three months. Do his donors know what theyre doing . More varney after this. Of course were watching the markets and hong kong. Adp helps airtech automotive streamline payroll and hr, so welby torres can achieve what hes working for. And now for their service to the community, we present limu emu doug with this key to the city. [ applause ] its an honor to tell you that Liberty Mutual customizes your Car Insurance so you only pay for what you need. And now we need to get back to work. [ applause and band playing ] only pay for what you need. Liberty. Liberty. Liberty. Liberty. 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. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Call, click, or visit a store today. Stuart were going to keep following two big stories for you. Right there on your screens, more violence happening in hong kong. That is happening right now. It is what, 10 20 at night in hong kong and the violence has begun again. Were down approximately 600 points in the last 24 hours. There is this, keep that on the screen, lets consider this. A federal judge ruled in favor of harvard. This case claimed that harvards admissions process discriminated against asianamericans. The judge said, no, it doesnt. Joining us judge andrew napolitano, host of fox nations the liberty file. I just said something that might be incorrect. They did not discriminate . They do discriminate against asianamericans. Stuart they do . The discrimination of this judge is lawful based on two Supreme Court opinions who say you can take race into account if your purpose is to produce a diverse student body. Race cant be the sole factor. It canting the dominant factor but it can be a factor. Now harvard is private institution. Stuart yep. The last year of records showing federal assistance to harvard since 2014. 608 million bucks. Every time they get a portion of 608 million, person receiving it, some University Officials signs an oath saying we will comply with federal civil rights laws as if we were a public institution. So even though harvard is private, this case with the princeton, yale, chicago, almost all major of thes that receive federal aid, they have the same burden imposed if they were owned by the government. Since the government cant discriminate on the basis of race can harvard . The Supreme Court says yes. Stuart let me put this in lehmans terms, can i . Since youre a lehman, yes. Stuart i am indeed. Asian student are real good at s. A. T. S. Yes. Stuart but it its okay we cant have that many in here we would have too many, you can discriminate against these people . That is not harvards argument. Harvards argument would not be too many asia shuns. There would be too few others, there is finite number of people they can put in the freshman class according to others. There are two few others disadvantaged whose presence we want to produce diversity. This argument that diversity can trump race neutrality was accepted by the Supreme Court in two cases solving the university of texas, a school owned by the government and federal judge in boston followed that. I think she did the right thing, following the law. Whether it is moral or not is another question. My view it is not moral. In my view, the government in my view making a decision based on race. Any immutable characterization at birth is profoundly immoral. The courts allow it in deference to diversity which the Supreme Court says is a noble goal. Stuart what we really need is a University System that has no contact with the government whatsoever. That would be wonderful. Where is this going to go . This will go to the Supreme Court because the author of the two opinions saying, diversity is a noble goal. It is not on the courtney more. Anthony kennedy replaced by somebody, Brett Kavanaugh has a different attitude on this we havent seen the end of this, stuart. Stuart we have not. Judge. Do they take race into account at London School of economics . Stuart no. Based on a interview, a level examinations. Thats it. Why cant it always be that way . Stuart judge, the dow is down 337. That is pretty close to the low of the day. Forbes out with a rich list. Jeff bezos still on top despite his divorce. He lost a quarter of all to his wife. Well take you through the list. Well tell you where President Trump landed on it. White castle is on the show. I will ask them why theyre getting into the beer business. They are, you know. Were watching the market and what is going on in hong kong. Dynamic show. First of all the market, we have a selloff. Were down 340 yesterday. Were down 348 as we speak today. Similar losses on nasdaq, down close to 100. The s p down close to 40 points. The selloff continues. In the last 48 hours we have gone down. In hong kong, well keep a camera on that, there is violence in hong kong. Dont know which area of hong kong is getting it. Weve not yet seen a Police Response. Protesters are smashing windows, smashing atms. This is in response to yets shooting. That is what were following for you. Check the big board. At precisely 10 30, well find out how much oil we have been using that might affect the price on your screen. 10 30 the number, please . Susan we dont have it yet. Were looking for a build of 1 1 2 million. Stuart i want the number. We havent got it yet. When we get it ill tell you. Price of oil, 53 a barrel. Frankly i think that is a oblem for investors. Ashley up 3. 1 . Susan there we go. Stuart we build 3. 1 million barrels. That is a build. So were using less oil. Putting more of it into storage. That is why the price is down. That is not good news for the stock market. Imply as slowing economy. A10ous indicator. I think that is what implies. Susan right. Stuart there is not that much demand, a signal of ashley swimming in it. Stuart slightly slowing economy. Just like indicator on manufacturing. Susan oil prices at two month lows. Weve seen six Straight Days of selling. The build is almost twice what we had anticipated. Stuart look at that the market is taking this as a negative. Were down almost 400 points as we speak and i have to believe what we just saw in the oil market has something to do with what we are seeing in the stock market. And what were seeing in hong kong. Right, there you have it. Were down 400 points. Bottom righthand corner of your screen. We just dropped 400 points that means in 24, 25 hours, we have dropped, lets see 400, 740 points. Ashley yep. Stuart that is a loss and a half. Were talking about close to, close to a 3 drop. This is a selloff. Word of caution here. There are big numbers coming out tomorrow on the Service Sector of the economy. If that Service Sector report confirms the downturn we saw in manufacturing, watch out, because that will be taken as a negative for the market. Point number two, friday morning, we get a big jobs report. If that is really disappointing, and there is not much new jobs created, that is another confirmation of a slowing economy. Market will not take that kindly. Right now, were down, falling more. Down 413 points. Righthand corner of your screen, what is going on in hong kong . Riots continue. I do not know whether that is a significant influence on our stock market. I would speculate that it is, on the grounds it is very difficult to get a trade deal with xi xinping of china if you have got that kind of rioting and a bloody crackdown going on in hong kong. Now then i want to turn to Td Ameritrade. Check them please, following Charles Schwabs lead they dropped their commissions on stocks, etf, and options trades. Going down to zero. It is free trading. Gerri willis at the exchange, what can you add to that, please . Reporter slashing conditions to zero, right . The share price is getting slashed as you can see. Your question how will they make money . Two things going on here. They get paid for order flow. So when you order microsoft stock they may sell that to a third party. They get money for that. That is how they make money these days. Companies like schwab is getting out of commoditized trading deemphasizing, towards Cash Management and advice. Theyre making money in other ways. Loo at proportion of revenue, amount of revenue these companies rely on from commissions it has been declining. Schwab just 7 of revenue from commissions. Etrade 16 . Ameritrade 25 . You see that the share prices and how much they went down over the last say 18 hours, the ones who rely more on commissions, they got hung up more. Ameritrade, the biggest fault. Remember commissions were deregulated some 44 years ago. This is the logical endgame of that. Vanguard, fidelity have already been cutting commissions fees, that is on etfs, for example to zero. Tough business to be in. You see the these companies are having a tough time today. Were seeing that target prices are getting cut for ameritrade and schwab. Stuart gerri, thank you very much. I have to point out to our audience the market keeps on falling. Were down 420 points on the dow industrials. The slide started frankly at opening of trading. The slide picked up a little steam four minutes ago, we got news there is more oil in storage that might be distant and irrelevant indicator. Ashley once you hit the sell, go below 100 day moving average, those computers start kicking in. It feeds upon itself. Susan following oil prices. Hits oil majors, 10 to 12 of majors on s p. Stuart that is a good point. When they go down a problem on the s p. Keith fitzgerald is on the phone. We often bring keith in for market commentary especially when there is something to do with asia. Keith, i have this longstanding question here. Were seeing violence in hong kong and after street battles and shooting yesterday. Is that having to do with anything of our market selloff here in america . It does, stuart, not immediately today at this moment in time. Traders are watching that. Im personally terrified well have Tianamen Square 2. 0. Hong kong is very important to the chinese. The technicals are duking it out. This is order flow at its extreme. Investors unfortunately need to sit down, sit on their hands, resist hitting the sell button unless they have to get out and let this stuff do its thing. Stuart is this about the possible recession threat . Im on this because 10 00 yesterday we got the bad news on manufacturing, performance at 10year low. Tomorrow the Service Sector is coming out. These are pointing rather negatively at this moment s that the main cause of this selloff, keith . It is, stuart. People fear the unknown. And to the extent that they program these algorithms that they think theyre smarter than computers they oen are proved wrong. This is a very important point. When you talk about amazon, cloud computing, big data, growing by 45 . All of this will grow recession or not, so Companies Move ahead even if the headlines get bad. Takes a lot of guts to wade through a day like that. That is important for people to remember. Growth will slow down but it wont stop. Stuart is there anything that youre buying today, keith . Im looking very seriously at amazon. Im looking very seriously at google. Im looking very seriously at apple. Im looking very seriously at raytheon and boeing today. Stuart okay. Keith, thank you very much indeed for weighing in as they say. I want to turn to ashley and susan here, buried in their computers finding out what is going on. Ashley it is interesting. Stuart summarize, down 430 on the dow. Some big techs, look at it go down. Google is down 24 bucks. I see apple down about 4. Amazon is down 22. Face took, only down a fraction. That is interesting. They have trouble with libra. Ashley right. Stuart theyre only down 74cent according to my indicator right here. Susan visa, mastercards are having a rethink on libra. Doesnt mean theyre pulling out of the project just yet. According to sources being quoted by the wall street journal, there will be a meeting on libra next week in d. C. You know october has traditionally been a pretty strong month for u. S. Stocks. Stuart you dont think that because the big crashes come. Susan thats right. Typically weve seen doubledigit almost pretty strong gains. Stuart were down 427, 428 point at this moment. There you have it. Down one 1. 6 down right now. Scott shellady is on the phone. Scott, spell it out. What is the main reason for this decline . Weve been talking about alltime record highs on the stock market, stuart. At the same time weve been trying to sell the country on rate cuts. You cant have both. Either the economy is slowing and we need to cut rates or things are just fine, away we go. When you Say Something has to give, baby. Seems though it will end up being stocks. We are starting, slowly but surely could catch a cold europe already has got. Things are slowing around the world and slowing a lot faster than were growing. How long can jay powell and rest of the u. S. Stick out in front of everybody stay he will think when all this stuff is happening. This is adjustment with the rest of the world. Especially headlines, you have had on the show about hong kong. What is a person get her or his teeth into today . Well have to retrench. You cant have your cake and eat it too. Cant be at alltime record highs and need to cut rates. Stuart real fast, scott. The president blames the Federal Reserve. He says they missed the boat. They should have been cutting rates big time some time ago. Is he right . They got out, they were too aggressive the first time around and they werent aggressive enough to take back the mistake, number one. But number two, we have got cera bankers all over the world, stuart, still doing the same thing every day hoping for a different outcome. Theyre still cutting rates every day, hoping for a different outcome. That is insanity. What were doing around the world, around the globe is not working, it is not producing the growth we need. We need to take a closer look how that is going to change because right now nothing new is out there. All the central bankers are doing, all the quantitative easing, whatever that may be to everybody out there, negative Interest Rates or universal basic income, these are all placeholders because the Federal Reserve bank here and Central Banks around the world dont really know what to do next. Theyre hoping for some growth to come around the corner. These are placeholders. Stuart the europeans will never learn the lesson of growth which is to cut taxes. When they start cutting taxes my goodness me i will start buying stocks again. Scott, thank you very much indeed, sir. All right. Stuart were watching lefthand side of the screen the stock market and bottom righthand corner too. The market is down today. Follow as big selloff yesterday. Top righthand corner of the screen, hong kong, more violence. Vandalism is right there. Were following all stories for you. Were invested in you. Well be right back. Und when you open a new account. Just another reminder of the value youll find at fidelity. Open an account today. With Medicare Advantage plans that offer Health Coaching and fitness memberships. Plus hospital, medical and Prescription Drug coverage in one simple plan. With monthly plan premiums starting at 0. And wide provider networks, including doctors and hospitals you know and trust. Aetna Medicare Advantage plans call today. Well send you a 10 visa reward card with no obligation to enroll. Or visit us online at aetnamedicare. Com tv. Stuart well follow the market selloff for you. Dow industrials close to low of the day, down 1. 6 . That is 450 points. S p down 1. 6 . That is 47 points down. A huge loss for the nasdaq. 1 1 2 lower. That is a loss of 117 points. Now some stocks really moving today, include the Big Technology companies on your screens. Apple is down four bucks. It was the only winner yesterday. It is down today. Facebook, interesting, only a fractional loss, tencent down. 17 points down. 176. Big loss at microsoft. They are down over 3 per share. Here is an interesting indicate for you. I will go to oil, 52 a barrel. Well go to the ten year treasury. 1. 06 . That is the 10year treasury yield. That implies money is pouring into american treasurys as a safe haven. That is what that is all about. As the money comes in, the price of the bond goes up, and the yield goes down, 1. 6 on the 10year. Now here is oil. This is a negative for the stock market. Were down to 52 a barrel, despite all that is going on in the middle east. Were not using as much oil as we were expected to use in the united states. We got a build in the inventories as it is called. More oil in storage, were using less of it. Oil is at 52 bucks a barrel. That hurts the overall market. What have you got, susan . Susan divergence in the oil markets. American Petroleum Institute looked at a drawdown of 5. 9 million. That is getting commentary on the social spheres. Stuart i dont get it. A drawdown implies were using it. That is projected . Susan reality. Depends who you look at it, api or eia you trust. Stuart im lost, nonetheless oil is at 52 a barrel. That aint good for. Energy stocks all of them on the downside. James awad has joined us. We specifically asked for jim to come on board, because jim in the past during the market selloffs is always a good hand holder. He is the man that says hold on, be relaxed you dont want to dive out of the market. So what is he saying today . Jim, youre on the phone, what are you saying . Absolutely the same thing. This is precisely when you want to buy stocks, when all the news is bad. When valuations become more attractive, when people are panicking. You have softening in economic activity. You have the problems in washington. You have a worry that the problems in washington will induce the chinese not to come to the table. You worry about all the, the impeachment talk affecting consumer business psychology. You have Computer Trading kicking in. All give you a chance to buy stocks materially cheaper than a few days ago. Examples, apples of the world, companies delivering on the fundamentals, that have a good long term future with good balance sheets, excess cash flow generation. This is a gift to you. You have to be prepared, it is not necessarily going to turn around tomorrow, if youre willing to look 12 months. You buy when there is blood on the streets. There is blood on the streets yesterday and today. Stuart tell us, tell us all, what are you buying . If this is a buying opportunity and were way down today and yesterday, what are you buying . I dont buy the shift into value. I dont think, youre not getting acceleration in the economy that makes the rotation into value sustainable. You buy Sustainable Growth at, at a reasonable price. So growth at reasonable price is a sector in the market you find a lot of that in technology. The Health Care Stocks have gotten killed on the political worries. So a lot of those represent longterm opportunity. Consumer nondoubles. You dont buy low quality, you dont buy cyclical, you dont buy small cap but Large Cap Companies that have a sensible valuation. Stuart nice piece of handholding if i ever saw one. Thanks for joining us on short notice. We appreciate it. Breaking in on jim awad, i have breaking news for you, Bernie Sanders, president ial Campaign Says that the senator was hospitalized after experiencing chest pains. He underwent surgery after he was found to have heart blockage. He is recovering. The Campaign Says, all events have been canceled. We wish well of course. Ashley the campaign released a statement. Ashley this was out of las vegas. During a Campaign Event yesterday the 78yearold candidate experienced melodies comfort. He was found to have a blockage one artery, and two stents were inserted. He is resting in good it is. Resting up over next few days. The Campaign Says were canceling events and appearances until further notice. We will continue to provide appropriate updes. Stuart that is a blow and shock to the campaign. If you have to suspend activity the for several days, you have got your candidate in the hospital with a heart problem, that i do believe affects the campaign, your campaign and perhaps the campaign of other president ial candidates. What impact im not going to speculate. Ashley no. Stuart but that news just in to us. Ben bernanke a heart blockage, surgery, he is doing okay. We wish him well. Markets new low, down 480 points for the dow. That is 1. 8 . Nasdaq down 130 points. 1. 6 . Were watching hong kong. Watching market. More varney after this. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of Wireless Network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Stuart it is a selloff. Ladies and gentlemen, its a big selloff. Right now were down 453 points. That is the dow industrials. S p down 25 points. 1 1 2 . The s p is down 48 points. That is a big loss any way you slice it. What are the factors here . Point number one, we had some very bad news on manufacturing 24 hours ago. That started the selloff. Now the question is, will the selloff continue tomorrow when weve got the numbers on the Service Sector . Ashley if theyre bad, yes. I would imagine so. Stuart right. Ashley why continue to add to the doom and gloom that the con minute is indeed slowi down. Private sector hiring coming in at 185,000,adp. Okay, but hiring is lowing down. Susan includes out look for previous month as well. Outlook for Interest Rate cut next month in october, 72 . Up from 53 a week ago. More people are stuart got it. Mike murphy on the phone. We bring in the allstars when things like this happen, mike what is the principle reason for the stock market selloff this morning . I think you guys just hit the nail on the head, stuart. Ism came in yesterd lower than people is looking for. A lot of concerns coming out today about the strength of this economy. I believe the giveandtake from investor standpoint, will an accommodatived t fed is going to come in, the fed is going cut rates next month. When think do, will that be enough to appease people, put money back in the market . My answer is yes. You dont like, weve given up 1000 points in two days, now. Stuart would you be selling anything today, mike . I wouldnt. Stuart, when you look at this, i wouldnt ever, you have known my a long time, i dont sell into Something Like this. Im looking for opportunities to buy. I still think the economy, i dont think you run somewhere bury your head in the sand. Quality names, talk about microsoft a lot. We talk about a lot of other quality names out there. If they come down to a buy price, buy them. Well get it worked out. The fed will come in and help. Stuart i have to move on. Mike murphy, thanks for joining us. All good stuff. The dow is down 120 points as we speak. Down big. My take on that coming up next. Especially those in retirement, i think its worth talking about so, aag is introducing a new jumbo reverse Mortgage Loan so you can now access as much as 4 Million Dollars in cash, tax free, from your homes equity. Aags new jumbo reverse Mortgage Loan can give you more taxfree cash than ever before find out more in your free aag jumbo guide. Call the new aag advantage jumbo gives you another way to effectively manage your Retirement Income sources. Tell me something, what other asset can give you that kind of taxfree cash right now . And the sooner you call, the sooner youll know if a jumbo reverse Mortgage Loan can improve your retirement portfolios performance. 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This selloff began exactly 25 hours ago, 10 00 eastern tuesday. The slowdown in manufacturing was confirmed. Manufacturing is still a big part of the economy, it reported its worst performance in a decade. Immediately, the word recession came back and the bigme selling began. This didnt help, either. Blood on the streets of hong kong. It was urban warfare and while that was unfolding, china was showing off its military strength in beijing. Investors want to know if america can do any kind of trade deal with a repressive communist dictatorship. We dont know but high anxiety over china trade is not good for stocks. Then theres the impeachment drive. This is a negative for the stock market. How can we get a new nafta trade deal or anything else through a democrat house that wants to remove our president from office . Hes the negotiator in chief. You cant forget politics. Wall street pays very close attention. Elizabeth warren is surging and that rightly has every investor worried. You can hear it now. Warren may get the nomination. Just as a precaution, sell. Heres what i call a sleeper issue thats bad for stocks. Energy. The price of oil has tumbled and since america is now one of, if not the biggest oil producer, Energy Related stocks are hurting. Add it all up and you can see why investors are nervous. Nobody knows how far this selloff goes. Nobody. But a couple of indicators are worth looking at. Tomorrow, a report on the Service Sector. If it confirms the manufacturing slowdown, watch out. On friday, the jobs report again, if its weak, watch out. Weve got to get more on this. Lets bring in jason katz, here to react to what i have been saying and react to this downside market. In your opinion, jason, whats the principal reason we are going down so much . Well, i think what youre seeing is this is all coming back to the consumer. The manufacturing numbers really translate into what happens as far as jobs, which in turn affects the consumer. Fortunately, 70 of the economy is consumerdriven. As far as manufacturing stuart i thought the consumer was strong. You look at the Housing Starts and the building permits, 12yea highs back in august. Up until now, they have been strong. We are going to see the job numbers on friday that will either corroborate these manufacturing numbers or not. Stuart but i dont get it. You said it all comes back to the consumer. The consumer is strong and spending money and earning good money. Wheres the problem . The problem lies in that business decision makers, which i have said before on your program, have largely been sitting on their hands until theres clarity on trade. The more angst about trade, the stronger the dollar, the weaker the manufacturing numbers, perhaps that starts to adversely affect hiring which in turn hampers the market. Stuart do you think the events in hong kong have anything to do with the stock market selloff . Because theres a connection, surely, to china trade. To some extent, it does. Look, china has to flex their authoritarian muscle. So if they are strong on the issue with hong kong, perhaps they could compromise a bit on trade, but i think the markets perception is theyre going to try to be strong on both issues. I think to some extent, it is factoring into the selloff of nearly 1,000 points in the last two days. Stuart now, oil, back to, what, 52 a barrel. Im listing that as another negative. Am i right . I dont know if that plays into the mosaic today as much but i am frankly a bit surprised that subsequent to the aramco attacks that we have sold off. I think theres complacency there. I think that the Oil Facilities both there and in the u. S. , for that matter, could be vulnerable so oil probably should get a little more of a bid than its had. Stuart is impeachment and the process of impeachment, is that a negative for stocks . On the margin, it has been but really shouldnt be. We counsel our clients, express your views politically at the booth, dont make a trade for trades sake because on balance, the impeachment issue is not going to ultimately dictate the direction of the market. I think that the odds of it happening, coming to fruition, are very low and even if it were to come to fruition, a Pence Administration would largely be along the same conservative lines. Stuart okay. Now, look at all our viewers out there. Most of them small investors, theyre in the market. Now, should any of them be doing any selling today . Absolutely not. That being said, ubs conducts an annual surve of our global family offices. Uberwealthy families. 55 have said they expect increased vol and a garden variety correction in 2020. In fact, 42 have said they raised their cash reserves. As far as the money that i oversee in the last month, we have preemptively raised a little cash, derisked and shifted risk but if a client were to ask me today should i derisk, should i take money off the table without equivocation, you do not want to sell into a vix thats been spiking to 20 and a 1,000 point drop in two days. Stuart let me express this in plain english, see if ive got this right from what youre saying. Some of your clients, wealthy people, have been lightening up, that means theyve gotten out of stocks a little bit, not entirely, but a little bit . A little bit. Frankly, its been more my behest and the suggestion of our firm by modestly taking down equity exposure, albeit remaining a little bit overweight u. S. , so its been at our behest that they do that. Theyre not as concerned, were just trying to get a little bit ahead of the curve given the binary outcome that could happen here with trade. Stuart do you expect a significant Interest Rate cut from the Federal Reserve . I mean, look, based on the ism numbers, the manufacturing numbers that have weakened, it certainly bolsters the case and the fed funds futures corroborate that we are probably going to get a cut of another quarter point come october. Stuart you dont see the market on the cusp or at the beginning of a 10 or 15 correction, do you . No. We really dont. The last two major corrections were doozies and everyone has this muscle memory that every correction has to morph into something ominous. If we do, in fact, get a slowdown or correction, why couldnt it be garden variety, especially when you have strong balance sheets, you have reasonable valuations, you have a very strong consumer, record low unemployment, wages on the rise, Mortgage Rates at lows, so if we get a pullback after a tenyear economic expansion and a decadelong run in equities, its not the worst thing in the world. Stuart the thing is, a lot of people are retired. Theyve got their money, a chunk of their money in stocks, theyre retired, they dont want risk, they will be tempted to sell today or tomorrow, or they were tempted yesterday. Its tempting, isnt it, when you are of a certain age. Its definitely a challenge. The unintended or perhaps the intended consequence of all these low rates has been forcing the hand of investors to go more toward risk assets. The dividend yield on the s p is greater than you can get in a tenyear treasury so by definition, people are overweight equities. They have had nothing but the wind to their back. They look at their statements or look online and they say a 3 , 4 drop over two days, it could get them anxious. Stuart if their money is in stocks, and those stocks are in their pension plans, whether its the 401 k or i. R. A. , you can sell, you dont pay any Capital Gains tax on your profits there, and you can put it into cas and sleep well at night in retirement. That is a fairly attractive option. Not necessarily for the megarich but for ordinary Middle America . Look, doing those types of transactions, whether it be your 401 k or i. R. A. Clearly you are avoiding the Capital Gains. Raising a little cash is not the worst idea. We like to say cash isnt trash. Over the long run, you dont want to do that. But you look at the yield on a threemonth tbill versus what you can get on longer term paper, and temporarily having a little bit of money to be tactical and sleeping at night could empower you to not make a really bad decision should a real spike in volatility or drawdown occur. Stuart you have done a great job of Holding Hands and calming us all down. We appreciate that. Kumbaya. Stuart not quite there yet. Thank you, sir, appreciate it. Look at the brokerage names, please. Td ameritrade is following Charles Schwabs lead, getting rid of commission on stock trades. You buy or sell stocks or bonds, no commission. Td ameritrade used to be about 7 per trade. Now its nothing. We are in the midst of a major selloff. We are all over it. More varney after this. Be working harder. Thats why your cash automatically goes into a Money Market Fund when you open a new account. Just another reminder of the value youll find at fidelity. Open an account today. When youre looking for answers, its good to have help. Because the right information, at the right time, may make all the difference. At humana, we know thats especially true when youre looking for a Medicare Supplement insurance plan. Thats why were offering seven things every Medicare Supplement should have. Its yours free just for calling the number on your screen. And when you call, a knowledgeable licensed agentproducer can answer any questions you have, and help you choose the plan thats right for you. The call is free, and theres no obligation. You see, medicare covers only about 80 percent of your part b medical expenses. The rest is up to you. 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Its just one of the ways that humana is making healthcare simpler. And when you call, a knowledgeable licensed agentproducer can answer any questions you have, and help you chose the plan thats right for you. The call is free and theres no obligation. You know medicare wont cover all your medical costs, so call now and see why a Medicare Supplement plan from a company like humana, just might be the answer. Stuart this is breaking as we speak. Speaker pelosi has just said that she sees progress, progress has been made on usmca. Thats the trade agreement, the new nafta, with mexico and canada. She says progress is being made. She hopes that mr. Trump can work with congress on this. I see that as a positive on trade. Im surprised that its had no impact on the market which is still down 440 points, the best part of 1. 68 . So we are following what Speaker Pelosi has to say but so far, no impact on the market. We are still way down. Then we have this news. It broke just, what, 15, 20 minutes ago. Bernie sanders, his president ial Campaign Says he has been hospitalized, he experienced chest pains. He underwent surgery. He was found to have a heart blockage. He is recovering. You tell me what the Campaign Said. Ashley this is a statement from the sanders campaign, saying that as you say, he experienced some chest discomfort following medical evaluation. He was found to have a blockage in one artery and two stents were successfully inserted. Senator sanders conversing and in good spirits, says the campaign. He will be resting up over the next few days. We are canceling all events and appearances until further notice and we will continue to provide appropriate updates. All began with chest pains and thats where we are. Stuart we wish him well. Ashley yes. Stuart lets bring in kennedy from the fox business network. Great network. Stuart yes, it is. Well said. I think the news from Bernie Sanders, i hate to be ghoulish about this, but its a plus for Elizabeth Warren, isnt it . It is october. Absolutely its a plus for Elizabeth Warren because shes been doing very well in a number of polls that are no longer considered outliers, and she has overtaken bernie and really built a lead with quite a bit of distance between them. Even in new hampshire, which is odd. So its interesting that his Campaign Said all events are canceled until further notice, and its almost as though theyre giving themselves room to really think about what the direction of the campaign and the movement are for senator sanders. Stuart again, look, i do not wish to be ghoulish about this, but Bernie Sanders is, what, 78 years old, i believe. Hes got heart problems. Hes running a Vigorous Campaign for the presidency. Thats a very tough road to hoe and hes canceled until further notice. Thats not good news for his campaign. Also, if youre trying to reassure people who might vote for you, you would say hes going to be back on the stump, hes just fine, hes feeling better than ever already, because normally, politicians and the people around them spin and lie as much as they can but theyre really saying no, everything is canceled until we let you know. Stuart i want to stay on politics because i have not heard a word from joe biden. He was not on the weekend t shows despite the ukraine call breaking all over the place. I have not seen him doing much monday and tuesday. Its now wednesday. I have not heard from the man. Hes almost disappeared. No, but you heard Elizabeth Warren talk a lot about impeachment because she knows that conversation, as much as she can talk about ukraine and about the president , its also keeping the story alive and the longer that story is going, joe biden will have a tough time explaining some of the new facts that keep emerging about him and his son. Stuart its hard to keep track of this. But youre on it. We appreciate that. Kennedy, thanks for being with us. Lovely to be with you. Stuart come back soon. Okay. Got it. Lets get back to this market selloff. Its still in progress. You can see there, bottom righthand corner of your screen, down 460 points. It stayed at that low for some time now. Liz macdonald is with us now, host of the evening edit on the fox business network. Liz, whats your interpretation of this big selloff . Liz its shaky, it feels rocky. I have been at business journalism almost as long as you have so i have seen the october 1987 crash and yes, i had to get in there stuart im much older than you are. Liz you are dating yourself. You should be allowed to date whoever you want. Heres what im looking at. I love watching the data, i love watching trends in data. That manufacturing factory number was not pretty. It was bad, right. But stuart, wait. It broke down to the same level in 2016. We didnt have recession then. When you start trending toward a 43 read on that manufacturing number, thats when it gets scary. Manufacturing not yet in recession. The question is, can President Trump pull off a china trade deal, because now hes vulnerable. Beijing knows hes on his back heels right now. Stuart heres the question i have been asking all day and i want you to answer it. The events in hong kong, weve got more vandalism today or tonight over there, its still in progress, its getting ugly. Can you have that happening in hong kong and still pull off a trade deal with china with mr. Trump . Liz thats a great point. In other words, what we have now is President Trump under duress, under fire, his position with china has been weakened. Certainly china is not in a powerful position either. The question is, can they do it, will they do it, will they get it done, will democrats step up and do whats right for the country and get a trade deal done. Those are all questions that need to be answered. I will point out this. A market panic attack like weve seen is not uncommon. Weve had more than five dozen of them over the last decade trending down 4 , 5 . So this is normal, especially in the month of october. Notoriously volatile. Stuart right now, in the last 26 hours, we have gone down on the dow 463 plus 243 makes 343. Liz 3 , 4 off the high. Stuart 800 points down in 26 hours. Liz right. But im talking off the high. Stuart understood. But we are way down. Its a big selloff. Deirdre, anything to add to this . Deirdre i want to pick up on something liz said about the next catalyst i see as a positive catalyst is this meeting between u. S. And china in d. C. At the end of next week. For the past 18 months, investors have really been on tinterhooks between these macro headlines, can the u. S. And china, the worlds two largest economies, just figure out some kind of trading framework that doesnt punish in many cases American Business owners who may not even be fortune 500 but who are trying to figure out what to do with their factories. This has been an overhang. I think we also got that weaker than expected manufacturing data yesterday, so there is just a little bit more anxiety being baked in and of course, the other big catalyst that could be positive or negative is this friday jobs report. Ashley Federal Reserve president s like to talk almost every day. Today we have headlines from john williams, new york fed lead. He says look, theres a lot of uncertainties and risks ahead to navigate, there are a number of crosscurrents leading to slower growth. Frankly the outlook for the u. S. Economy is a mixed picture. Does this hint more and more of another rate cut at the end of this month . Maybe. You would hope. Stuart thats the kind of hi hint all right. Anything else . Liz the fed says 2. 25 gdp growth this year. Decent but slowing down toward stall speed. Thats the issue. Stuart if the fed really cuts rates dramatically its because the europeans and the japanese are cutting rates vigorously. Ashley every german bond is negative yielding. From the oneyear all the way out to the 30year, its minus. Negative. Deirdre you are paying forhe right to loan your money. Stuart yes. Which is extraordinary. All right. We are down 450 points. Yes, it is another selloff. Ive got a winner. Johnson johnson. Yes, they have agreed to settle some opioid lawsuits against two counties in ohio, by the way. They are settling for 20 million. They are Johnson Johnson is up two bucks at 132. We are talking to short seller, the occasional short seller, andrew left. His firm just made a big bet against another opioidrelated company. I want his take, though, on j j. More varney after this. Ive been through two tours of duty, and luckily, i came home with my health. 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The decline in manufacturing, events in hong kong, the very low price of oil and oil stocks therefore, and the president has just tweeted with this. All of this impeachment nonsense which is going nowhere is driving the stock market and your 401 k s down but that is exactly what the democrats want to do. They are willing to hurt the country with only the 2020 election in mind so a whole variety of reasons for this selloff and the president adds one more. The impeachment. Lets get a check on bitcoin because it often goes straight up when youve got a selloff like this. You know, its considered a flight to safety. By some. Not today. Its down a hundred bucks. 8221 a coin. Gold also a flight to safety, up 15 an ounce there, 1 . So a modest flight to safety there. The real, if i can say it again, flight to safety is this. The tenyear treasury. Money is pouring into treasuries. That raises the price and that lowers the yield. You are down to 1. 60 . The dow industrials, lefthand side of your screen, still down 437 points. The nasdaq is down 118. Thats a selloff. The s p is down 46. Forbes out with their rich list. The richest 400 americans. Who made the top five spots . Heres a hint. Its not ashley or i. We will run through the list, thats a promise. Where did President Trump fall in the forbes list this year . We have the answer for you. Check that big board again. Still down, 450 points. Back in a moment. The world is built for you. So why isnt it all about you when it comes to your money . So. Whats on your mind . We are a 97yearold firm built for right now. Edward jones. Its time for investing to feel individual. Stuart look, there is still no letup in the selling. In fact, i think this is really close to the low of the day. Were down to 26,096, a loss of about 480 points. When you Start Talking in percentage terms, you know youve got a selloff. Were down 1. 8 on the dow. Here we are, 11 30, breaking news from the ftc. Theyve Just Announced a 150 million settlement with advocare, a former Multilevel Marketing Company specializing in dietary supplements. It was an alleged pyramid scheme. They falsely promised their sellers of a lifechanging Financial Solution and that they could earn quote, unlimited income. The ftc says the majority of sellers actually lost money. 150 million settlement. I want to check on the stock price of mche cansskeckesson, a distributor. A new report called them a public nuisance and said they are complicit in fueling the Opioid Crisis. Andrew left joins us now. You trying to put these guys right out of business . Oh, no. Everything but out of business. Mckesson is a large company. They were a big factor in contributing to the Opioid Crisis. If they pay a major fine and their stock went down 20, 30 and it helped rebuild these communities that they helped destroy, then it is what it is. Its collateral damage. Stuart what about Johnson Johnson . They settled with two ohio counties over opioids, they settled for 20 million. Is the Opioid Crisis now off Johnson Johnsons back . Absolutely not. They are appealing the ruling in oklahoma. There are so many more rulings that have to come out there, lawsuits. They are a small part of the opioid, they are going to try to say they were just the manufacturer, not as much the distributor and where the blame is to be placed. Its a major problem. Its probably going to be the most complex litigation we have ever had in the united states. J j is a smaller part. Mckesson, not only are they facing headwinds of the lawsuits, we also see it with drug pricing going lower, no matter whos in office, i think both sides, everyone agrees drug pricing will go lower in the next ten years, five years. If mck chlesson is the largest g distributor in the u. S. , what happens to their process . Stuart interesting. I apologize for kuth thcutting short, but the dow industrials are down almost 500 points. To be precise, 506 points. I dont know what has just pushed the market a little bit lower. It could be that Speaker Pelosi and adam schiff, Intel Committee chair in the house, they have been speaking about impeachment. Is that why we have taken another leg down . Liz yeah, because again, it has to do i think with the president s position in the china trade deal because the u. S. Exports in that manufacturing number hit a recession low. That was in recession. In other words, the level of u. S. Exports going out of the country is in recessionary mode. So the president needs to be in a strong position to deal with china. We also have stuart wait, wait, wait. He needs to be in a strong position to deal with china. But his position vis a vis impeachment is dragging down his position with china. Is that what youre saying . Liz that is correct. Stuart thats why we are taking this trip down. Adam schiff is saying that obstruction can be grounds for impeachment. Okay. I dont think hes talking about obstruction of justice as in the firing of james comey. Ashley right. Stuart i think hes talking about obstruction in the president not allowing some people to testify before congress. Liz its general stonewalling, also accusing pompeo of obstruction. Stuart obstruction in that sense is not grounds for impeachment. Its high crimes and misdemeanors and other crimes. Liz heres the issue. The fact nancy pelosi did not put this to a house vote meant minority republicans couldnt subpoena witnesses, couldnt do their own document deep dive, they couldnt do their own investigation. So nancy pelosi broke precedent as well, not putting it to an a house vote on an impeachment inquiry as they did with nixon and clinton. Stuart now we added another negative for the market. First it was the decline in manufacturing reported 10 00 eastern yesterday. Second, maybe it was the goingson in hong kong, more violence today. How do you conduct a trade agreement with xi jinping when hes cracking down in a bloody fashion in hong kong. Thirdly, weve got the price of oil dropping way down to about 52 a barrel. Im squinting here. Ashley 52. 30. Stuart down 1. 30. That takes all the oil stocks down. That takes the dow down and certainly the s p. Deirdre also the inventory on that oil, part of the reason we are seeing this price change is because the inventories were double what most Energy Analysts had expected so it just means or implies that there could be this kind of macro slowdown. That is another layer that is making investors anxious. Stuart the word recession has entered the lexicon again, especially after that manufacturing thing yesterday. I do want to tell our viewers that tomorrow, weve got the numbers on the Service Sector. Now, the Service Sector is the big chunk of the economy, about 70 of the economy. Deirdre its been 115 straight months going up. Liz manufacturing prior to that bad read was 35 months straight up. Im just putting it in perspective for you because we wonder if wall street is saying hey, we will buy on the dip right now. Stuart if we get a negative reading, bad reading tomorrow liz thats a bigger part of the u. S. Economy. Stuart what about friday morning . Weve got the jobs report. Deirdre that we were discussing earlier, for the fed that is going to be key. Right . Whatever that print comes in at is going to be really telling about the next fed rate decision. Stuart forgive me, ladies and gentlemen, but im going to segue away from the 500 point loss on the dow industrials and bring in the forbes rich list. I find it fascinating, quite frankly. Im going to handle it speedily. Assistant managing editor of wealth at forbes joins us. Im sorry this is such a busy day. Im going to pound at this. Who is the most, wealthiest person in america . Jeff bezos, down 46 billion because he gave his exwife a quarter of his shares, but hes still the richest at 114 billion. Stuart he only gave a quarter to his exwife . Yes. Stuart she needs a better lawyer. Now there were people who said that. Stuart im sure. I just said it. 66 of the billionaires on the list selfmade . Completely selfmade. Stuart extraordinary. It is extraordinary. But the thing we did this year which was really fascinating is that 63 started their own businesses and what we found is that more than 80 started this business by the age 40. Even if it wasnt the business they made their money in, these are entrepreneurial people that have succeeded. Stuart i love it. Because that is a meritocracy. Exactly. Stuart did the same thing in europe, a bunch of people inherited their wealth. Here you make it yourself. Last one. Im sorry to cut this short. Where is President Trump on the list . Hes down 16 ranks to 295 but still worth 3. 1 billion. So stuart 3. 1 billion but down a bit. Yes. Other people did better than he did. Stuart will he contest your valuation . He has been very mum since hes taken office. Stuart okay. You knew we were short on time and you went through all the good stuff very rapidly. I really want to thank you. Thank you. Stuart youve got tv talent. Anybody can wrap it up. Thank you again. Stuart we appreciate that. Gary kaltbaum on the phone with us now. All right, gary. What should we be doing . Weve got an audience of investors. What should they do right now . Tell us. Oh, right this second . Stuart yes. Not just today. In general. Should people be selling . Look, i hear a lot of people saying dont sell. I say use your own sleep indicator. If you cant sleep at night, that means you probably own too much stock. Simple as that. Ive always said that since day one. Its all about an individual thing. For me, the market is definitively under pressure here. I believe its going lower. Im not sure how much. You have a few Different Things happening at once but for me, the most important thing is Earnings Guidance is now coming down across wall street because of the ism number, the manufacturing, the chicago pmi number, and a few other numbers that have been coming out lately. If earnings are coming down, markets are coming down. Stuart thats valuable information. Because the bottom line for stock prices is the amount of profit that a companys going to make in the future, and youre telling us that because of this decline in manufacturing, the analysts, very important people, dont completely like them, but theyre saying less profit in the future. Is that the way to wrap it up . Yes. And more importantly, the markets saying it right now. To what extent, i dont know just yet. But im seeing it in realtime, estimates coming down for the coming quarter or two. So the market gets knocked down a little bit. I will tell you this, it guarantees a rate cut in the next meeting, maybe another one after that, maybe that helps. But its never good news when you have a deceleration of earnings and more than likely, sales also, and by the way, youve had internal weakness over the last few weeks anyhow. Youre seeing it in the ipo market, where these ipos are getting crushed. Youre seeing it in transports and small and midcaps as well as foreign markets. So y are getting more of a pullback here. Im just not sure how much. Probably in the high Single Digits and if it heads into the teens, i must tell you, its normal. We have seen it a hundred times before. Throughout the last hundred years. Corrections are a part of the game, unfortunately. You have to deal with it and live through them. Stuart yes, you do. We lived through quite a few. Gary kaltbaum, thanks for jumping in at late notice. We do appreciate it. By the way, adam schiff has been talking about impeachment along with Speaker Pelosi. He is saying that the impeachment drive is accelerating. We had a tweet from President Trump saying this impeachment nonsense is part of the stock market decline. He weighed in on that one. Other factors are the decline in manufacturing, the events in hong kong, the very low price of oil and move down the line. We are down 494. Next up, we have jack hough from barrons magazine. Coming up with us, whats going on with this selloff . All kinds of information coming your way. We are invested in you. Back in a moment. Aetna takes a total approach to your health and wellness with Medicare Advantage plans designed for the whole you. And monthly premiums starting at 0. Plus hospital, medical and Prescription Drug coverage in one simple plan. And Health Coaching and fitness memberships to help you age actively. So you can be ready for what matters most. Call today. Well send you a 10 visa reward card with no obligation to enroll. Or visit us online at aetnamedicare. 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Under her plan, groups between that spend between half a million and a million lobbying every year would have to pay 35 on those expenditures. Get this, the rate would increase to 60 between 1 million and 5 million, topping out at 75 for those that spend more than 5 million a year lobbying. This would hit some of the biggest companies, boeing, microsoft, walmart, exxon. Elizabeth warren picked out the u. S. Chamber of commerce, saying that if we had these taxes in place, they would have owed 770 million in taxes in a tenyear period. Stuart how joyful we must be. Did she include the teachers union, for example . Ashley i dont think she does, actually. Stuart the lawyers, the trial lawyers, would they taxed . Ashley where does the money go. It would create a lobbying defense trust fund. Stuart this is liz there would be more carveouts and waivers for favorite Interest Groups than under obamacare. The criticism of Elizabeth Warren, she wants to put the u. S. Economy inside her teachers faculty lounge, never before tested in real world ideas, she has never convinced the mannamen people, her higher tax schemes, they just make government bigger. Stuart im going to speculate here that Elizabeth Warren has just gotten a shot in the arm, so to speak, in her campaign because senator Bernie Sanders is in the hospital. He had chest pains. They took him to the hospital. He had two stents inserted into him. He had surgery. Hes awake, hes in the hospital, hes conversing and his Campaign Said hes out of action. Ashley out of action, all events and Campaign Events and whathave you being canceled until further notice. Stuart until further notice. So theres no time frame on this. Hes out. Meanwhile, Elizabeth Warren is surging, coming up with endless tax questions and taxing everybody. Okay. Let me ask you this. What happens to the stock market if Elizabeth Warren gets the nomination . Not becomes the president , but gets the nomination from the democrats. Deirdre i think this may actually be part of the question here. She is seen as very unfriendly to business. We have a million examples. And i actually do think, you made the point, she was going up in the polls even before senator sanders went in hospital she is gaining ground. Love her or hate her, she is gaining ground. We talked yesterday about the fact that she wants to break up big tech. You had the ceo of facebook, mark zuckerberg, saying i dont really want to go to war with my government, i like my government but if we have to open a legal case against t u. S. Government, we will. Liz heres the danger with Elizabeth Warren. She sees taxes as a big quiver in her moral crusade, but she never answers questions about whether she has to tax the middle class, shes always dodging. Watch this. Americans according to the bureau of labor statistics spend more on taxes than food, clothing and health care combined. Ashley wow. Liz the question is, she will have to tax the middle class with her plan. She wont answer that question. Stuart no, she wont. She scares wall street to death. Liz the stock market will not open if shes elected. Stuart i think warrens surge is a factor in todays stock market decline. I may be wrong about that. Im speculating but thats my position. The market way, way down. Jack hough from barrons magazine coming up after this. Stay with us. Sometimes your small screen is your big screen. And with the Xfinity Stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. Download your dvrd shows and movies on the fly. Even record from right where you are. Keep what you watch with you. Download the Xfinity Stream app today and get ready for Xfinity Stream tv week. Watch shows like south park and the walking dead october 7th through 13th. Stuart the combined loss today and yesterday is now 850 points. The dow is off 507 at this moment. Losses all across the board. Jack hough, Senior Editor at barrons magazine with us now. I want you to give advice to our viewers, most of whom are longterm investors with money in this market. Advice, please. They have heard a thousand times, dont panic, just wait it out. Stocks go higher over the long term. I tell people if youre someone who might panic, better to panic earlier rather than later, when everyone is scrambling to get out. Look, we are ten years into a very long expansion. We dont know that recession is right around the corner, but we know that these Economic Indicators are weakening. The manufacturing numbers we got yesterday were not good at all. Were looking for cracks in the jobs numbers which is whats really making investors nervous here. Eventually bull markets come to an end and if youre thinking that you have too much in stocks right now because they have done so well and you want to raise a little cash, raise a little cash. Dont go crazy. Dont get totally out of stocks. Raise a little cash. Stuart we have this big indicator coming tomorrow on the Service Sector. On friday we have jobs. I mean, are we looking towards maybe a recession on the horizon, if those two reports are negative . You know, the feds yield curve model shows a 38 chance of recession inside the next year. Ill buy that number. Thats also a better chance than not we avoid recession over the next year. We cant say short term the direction of the market. The question is not is this economy weakening, its can we do something about it. I have been arguing the fed put it kaput. We dont revive it magically by lowering Interest Rates. They are already low. We are deficit spending and stimulating like crazy. Stuart i want to bring up the subject of Bernie Sanders and Elizabeth Warren. Around the table, we have been discussing whats going on here. First of all, Bernie Sanders has he canceled all events for the foreseeable future. Ashley until further notice. Stuart until further notice. Thank you. Hes had heart problems, hes been in the hospital. Hes still in the hospital. Hes conversing but hes had two stents put in him. Okay. In my opinion, jack, that enhances the prospect of warren, Elizabeth Warren, getting the democrat nomination. I think thats part of whats really worrying wall street. Yes, and im not quite there with you. Im not going to pin this decline today on Elizabeth Warren. Stuart nor am i. Its part of this. However, she is obviously riding high in the polls right now and we have heard a lot about her plans to tax the rich to pay for some of these plans. What i would like to hear more of from her is how that wont hurt the economy. How important growth is to her, how were not going to, if we are chasing the very rich with our pitchforks when we have chased away all the rich, how were not going to turn the pitchforks on the upper middle class, how we are not going to become very antibig company. I happen to make my living from a big company, thank you very much. Stuart she is looking good. She is looking good. Shes looking pretty good now. Stuart we heard nothing from joe biden. Hes been dead quiet. Now we have Bernie Sanders in the hospital. Whos left among the democrats . Last i heard from joe biden he was going on about record players or some other thing. It was not inspiring, to say the least. I think when you look at this field right now, Elizabeth Warren is the name that stands out. Stuart impeachment, hong kong, declining manufacturing sector, numbers coming up tomorrow on services, friday on jobs. Add it all up and throw in Elizabeth Warren as a possible nominee for the democrats, and you got a 500 point decline. Am i missing something here . Liz earnings, too. Stuart earnings. Gary kaltbaum just said earnings are the baseline, the baseline for stock prices and because of that decline in manufacturing, the analysts are lowering their profit forecasts in the future. You are following this. Earnings are terrible, too. But, but stuart thats a big deal. But they are going to start to get a little bit better probably in the Fourth Quarter because the comparisons will get easier. In the Fourth Quarter, going into next year, we might get 5 profit growth. I dont know if that makes you want to jump up and sing and dance but we might get 5 Earnings Growth next year. It could give the stock market another leg from here. Stuart what a day. What a day. I promise you, ladies and gentlemen, we are following all thats happening that affects you and your money and there will be more varney after this. Hi, my name is sam davis and im going to tell you about exciting plans available to anyone with medicare. Many plans provide broad coverage and still may save you money on monthly premiums and Prescription Drugs. 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Blood on the streets in hong kong. That is how we started this morning at 9 00 eastern time. 9 30 the market opened. It opened sharply lower. A follow on from yesterdays selloff. Yesterdays selloff was largely as a result of decline in manufacturing, reported, what, 26 hours ago. Thats it. Were down close to 850 points. After that we got news that Bernie Sanders had had heart trouble. Was in the hospital. He had surgery. A couple of stents put into the man. He is talking and conversing, he canceled all events for the foreseeable future that seeped to be a boost for Elizabeth Warrens campaign. She is the other arch leftist among the democrat crew. She is now enhancing our position because Bernie Sanders is out for the foreseeable. Future. Wall street does not like Elizabeth Warren. She comes out with plans to tax wall street and that is negative for the stock market. Speaker pelosi and adam schiff talking about impeachment. They want to acceler the impeachment process. How do we get things done in congress with that as a background. That is what we got a mammoth selloff. Right now were down 478. Neil, it is yours. Neil i can leave now. That wraps it up. Uite right the selloff is on. Bigtime, the dow already off about 5 . Close to 5 from the highs. A little less than that from now. 10 would be correction. 20 bringings you a bear market. Unthinkable what happens in the last few days,e start out in the Fourth Quarter, wiping out all gains we had in the Third Quarter. There are a lot of reasons for this stuart nicely outlined some of them. There is maybe a growing fear the economy is at a point not growing but reversing. Were seeing