Welcome, good to have you with us. Our Investment Committee at the table, joe terranova, stephanie link, and one of forbes top 100 Financial Advisers the dip for stocks this hour, the g20 getting closer and closer that meeting between President Trump and president xi also marking the end of the first half of the year, all with the backdrop of a fed that could be poised to cut Interest Rates in a matter of weeks, a central bank in europe that seems ready to act dramatically as well. Jim, this is your moment youve been looking towards trade and talking about it for months now youre going to have this dinner meeting inosaka is it okay for me to say im a little nervous im fully invested, i do have a little bit of cash, scott, but im nervous even though im invested its an important moment what are we looking for, what do you want you have to know what youre looking for, okay . The specific thing im looking for is a pumpback on tshback on tariffs. Theres no way in heck that were getting a deal in the next week, forget that, thats not going to happen. Youll probably get some nice words, maybe a twice tweet, but youre not going to get a nice substance other than push the tariffs off, because ive got to say, those are making me nervous. If you start putting those tariffs on, companies will start having to worry about cost of goods sold, they dont know where to expand their supply chain. Its going to affect Corporate Governance were talking about racheting down earnings expectations we need to turn that around. It wont happen if you dont push back tariffs. Steph, jim is not the only one who feels that way, based on conversations ive had with some big time investors lets make a case, if we could, for a midsummer meltup, okay you get through this weekend and heres what you have you get no more tariffs. The economy holds in rather than, you know, goes off the cliff like some are suggesting it might the fed cuts rates and then you get more qe, perhaps, or at least more easing from the ecb that would be nice. Is that a case for a midsummer meltup . Because thats what im being told you have to have. It would be nice. I think it would be very positive for sure. But i think we have a couple of things to get through. Its not just g20, right i mean, we get some big earnings this week, scott well hear about guidance in the second half of the year. I think thats going to be very important. This is micron this is nike this is fedex, this week alone it may not be good once you get through g20 then you have earnings on the other side of this, so we have to get what theyre saying. Your case might be the positive for sure im not so convinced were going to get good guidance by the way, we need rates to stabilize. Were sub 2 on the tenyear. We wont stabilize on rates with a Consumer Confidence number we got this morning which was horrific the lowest since 2017. Not good from june, it goes from 121 1 2 to 131 jamie dimon makes some comments too, you have the consumer issue, the business issue. He says youve seen Business Investment drop, people are worried about the supply lines, and that may be hampering the economy. I almost wish we would not report Consumer Confidence anymore, its so backward looking. The present situation thats right, present situation. That fell ten points. Here is what the Conference Board said quote, the escalation in trade and tariff tensions earlier this month appears to have shaken Consumer Confidence. As long as you have those issues out there, if you come away from the g20 with more hostilities, maybe more tariffs, thats not going to do anything to help Consumer Confidence. Its not going to do anything to help Business Confidence i would agree but i would also borrow the Federal Reserves word of transitory. Maybe present indicators are transitory in nature because to jimmys point, were going to get something thats going to appear to push out further the imposition of further tariffs. We are, to your point, going to get a rate cut in july and to stephs point, were probably potentially going to see better earnings than expected so thats your recipe for a shift from a market right now that is playing this incredibly defensive, to a market that wants when you say incredibly defensive, hes talking, rob, about staples doing well, people going into bonds, people going into gold, and god forbid bitcoin is a safe haven now, according to suome. Its been a move to hide out in a whole bunch of Asset Classes in the short run i dont think its about earnings, i dont think its about sentiment. Last week it was about the fed, fed, fed this week, and i think for the foreseeable future, its going to be all about trade. Theres a couple of interesting undercurrents. Number one, as we go into the g20, i agree with jim, i dont think theres going to be a deal i think we need to see a path to a deal if theres not that, i think we could experience some problems what if you take, again, this case for a midsummer meltup that we made, that i want you to look at on the wall. Thats the calling for a deal. Thats just calling off more tariffs. Inertia yeah. The fed, the backdrop on that, what i think is pretty interesting, this has been an untrusted rally, right so the backdrop is this, and ill give you some statistics. The city panic euphoria models in panic territory, and you look at the skew of the ai, bull bear, again, indicating cautiousness bank of america, Merrill Lynch has this sentiment reading among pms, 42 of Fund Managers were overweight cash. The 98th percentile since 2001 our own keith parker says equity positioning is 1. 5 standard deviations below average even in this rally, investors are offside. If you get positive news you get some of this stuff out of the way thats correct. Then you go back to making it pretty simple, and that is fed easing, ecb easing, no more tariffs, economy does well enough, earnings do well enough. You want to be negative against that backdrop . Who wants to be negative against that backdrop . Im going to preface my comments by saying im about 7 cash, okay but i like to look at the risks the way any nautical person does, youre sailing along, you look at whats on the horizon. You ask, scotty, how do you paint the negative picture there are things out there that trouble me the situation with iran, yes, we didnt bomb them last week, a little surprised by that, but nonetheless, clearly that is racheting up you also have brexit that continues to go nowhere and could have a crash landing thats coming up, what, in october . We have to prepare for that. We have vitriol in washington, d. C. That seems to pick up in more and more of an anticapitalistic way, whether its medicare for all, whether its pushing on higher debt, whether its Judicial Branch pushing back on a lot of m a activity i say the two greatest forces, if you will. Trade and the fed trade and the fed all those other things are little sideshows here and there. The two greatest things you have to focus on as an investor are tariffs and Central Banks. The feds on your side. You put those on your scale were going to show you the scale. And youre going to have to decide which is going to have more weight on where the rally goes from here youve got to have the meeting come out good enough and you know that the Central Banks are going to be dovish moving forward right if theres not a path to a deal, i think that this inertia period is also going to cause problems for the economic which is why the feds ultimately going to cut. The fed is ultimately going to cut, so the Federal Reserve buffers any potential decline . No question i dont know about that unless the economy tails off. And then a fed cut in an even more slowing economy is a potential problem. I dont think were going to know that. In the last two fed cuts, 01 to 07, led to significant declines most companies took actions in the first part of the tariffs. If we dont push out the tariffs this last piece, drops earnings another 10 . Thats why im worried about earnings and i want to hear what these companies have to say this week eamon javers is standing by at the white house with new information on the president s schedule eamon . Reporter scott, thats right. Theyve briefed us on exactly what to expect at the g20. There will be the traditional rigmarole, the family photo with all the World Leaders in one place at one time. There are going to be the Breakout Sessions that you talk about on individual topics including trade particularly, but also theyll be talking about things like ai this time and what that means for jobs around the world theyll also be talking about the womens workforce participation and the environment. All of those are topics that theyre going to have Breakout Sessions on. The president will be able to attend any of those. What weve seen is that the president can sort of pick and choose his moments the official agenda is probably less important here than the unofficial agenda, those moments when the president gets to connect with other World Leaders and actually hash some things out. The president will attend or drop in on those sessions but then there are also the meetings with World Leaders, abe of japan, merkel of germany, putin of russia. And the big one were all looking forward to is the meeting between trump and xi jinping. The most likely day for that to happen is saturday, later in the week, they might get together. Well see when thats officially announced and pinned down. That is the set piece that everyone is looking forward to at the g20 because there is the opportunity for a break through in the trade relationship between the two countries. Theyve met before, havent been able to hammer out these details. Everyone involved says if there is going to be a breakthrough, it has to come with those two men sitting at a table, working it out themselves. It cant come really on a staff level, eamon, we appreciate it, eamon javers at the white house. If they come back and say no additional tariffs for the time being and were going to keep talking, market happy with that . He thinks, because of what i just said, most companies have already put things in place to offset the tariffs but they didnt for this last set if this last set gets pushed out, at least you dont have to lower the guide again. And maybe the guide for the second half of the year could be better than what we think. Barkleys recipe for a meltup, they call it key question is whether stocks can rally substantially further this year, okay . They say the scenario is possible like we just said on the desk. You need trade tensions to decrease substantially the fed eases aggressively currently industrial slowdown remains a without morphing into a recession. The question is how much of that do you get, right i think the big indicator is the Federal Reserve, to stephanies point. The u. S. Dollar relative to the errors of the world. You need to see a lower dollar and thats going to come from the Federal Reserve easing i dont think its a stretch that you could get all three of those. You could get tensions decreasing at least in the near term they can reignite with a tweet, though. You really need a path towards a decision the whole thing, though, is yes, you can get a tweet, as long as you can get the tariffs. Who cares about the tweet . Noise. You cant say who cares about the tweet. I mean, markets care about the tweet. If the market comes away from this weekend knowing its not getting additional tariffs, that will be a positive unambiguously it has to be now. Were running out of time. You used the word transitory, mimicking jay powell were talking about Consumer Confidence, its been awful across the board you can say its one month, but that is a key indicator of corporate confidence that is not going to get better if you dont get these tariffs pushed off you know what hasnt been all that great either is housing on that note, diane a olick is d. C. With a market flash lennar looks like its heading for its worst day since december, after they reported better than expected earnings, then dropped sharply during the earnings call. It appears on comments about tariffs and Construction Costs by lennar president jonathan jaffe. He said first it was the 10 tariff on chinese goods that took place last september, then another 15 now. That meant about 500 more per home he said theyre in constant communication with the manufacturing partners, trying to offset the impact but he also said the severity of the labor shortage in the Construction Industry is the strongest headwind theyre facing now labor costs 43 of their direct spend, up 2. 8 sequentially in the Second Quarter and up 7. 7 year over year then he says the shift to entry level homes, meaning a lower average sale price, will squeeze margins. Theyre seeing greater than expected incentives, that was at the slowdown late last year. Home sales number released at 10 00 a. M. , we should have seen a butmp up in home sales becaus of the big drop in mortgage rates, but we did not, theyre down year over year. Thats also because of the affordability issues kb home is lower priced than lennar but again, they cant make the margins on these lower priced homes back to you. Good stuff, diana, thanks thats having an impact across the state. Jamie dimon, in case you missed it the first time i read it, what hes seeing is Business Confidence drop, Business Investment drop, people worried about the supply lines and nk that may be hampering the economy. It just depends to what degree and for how long. Consumer is super important its a much bigger part of the economy, and housing plays right into that. Lennar was up 30 before today, year to date its had a heck of a run but it is disappointing, obviously. You want to sort of revisit your the consumer is doing great call i believe that the consumer remains strong i believe that the consumer is beginning to trend slightly lower, given the circumstances that we are seeing as it relates to trade, the concerns there i think housing is a struggle. Do i think housing enters a recessionary environment for housing itself i dont see that and you heard comments from lennar executives talking specifically about that. I think thats incredibly important, because you have the production deficit as they have cited. So yes, you are pulling back , e the consumer statistics are pulling back because of the rhetoric and concerns. Theyre not just pulling back today. Theyre not just pulling back on the most recent read of Consumer Confidence everything wasnt great until this number came out, was it, steph . No. I think youre definitely seeing a softening. I do think there are winners and losers, weve talked about that. There are the nikes of the world but then theres the tfoot lockers of the world that are struggling, or macys or kohls that are struggling. I think theyre okay because jobs and wages are okay, right theyre still very good. But i worry, and i have worried, that the market is such a big component for the consumer and if that rolls over, then all of a sudden you see confidence roll over. And thats when you see a pullback in general. The market is important the market is important to the average consumer the way it wasnt 25 years ago. This is a far more diversified investor class they see whats going on the market has hung in there i dont necessarily agree with that. I think it is a job story, its a rate story, its an access to capital story. And with this, i would be buying consumer stocks right now. Period, the end. Because you believe on the other side of this, its a transitory circumstance and were going to get a favorable outcome. Scott is right, ive been arguing the consumer is incredibly strong. Youre seeing softening numbers. I think the way youre arguing it is the market is not as strong as consumers say like walmart hitting a new high and mcdonalds hitting a new 52week high as we speak isnt a referendum on the i mean, i guess it is a referendum, in some cases, on the strength of the consumer okay, but were looking through the prism of select retailers, yes, im going to be able to find those are pretty big ones absolutely. Im going to be able to find some big consumer equity names if were looking at it in terms of economic numbers, Consumer Spending is still tracking somewhere between 2. 7, 2. 8 , which is higher from where it was in 2018. Im saying yes, scott. Scott, you are right in the last four to six weeks, there is evidence that the consumer statistics are beginning to recede. Were seeing a little bit of a slowing down i think that moderates and i think we see a liftoff again i agree because the fed is going to come to the rescue with rates, and we all believe were going to see something from osaka thats going to suggest, okay, no more tariffs on what, the most important thing, 300 billion mostly of consumer goods. Your two stocks, walmart and mcdonalds, very specific catalyzers happening withinthe that have created the out performance, right mcdonalds modernizing all those stores, walmart having real success in ecommerce. I think that is not indicative of a lower end Consumer Shopping at those places. Consumer staples, too theyre at their alltime highs. Theyre a factor somethings got to give, right . If youre going to have a fundamentals are strong somethings got to give if you have a midsummer meltup, bonds outperforming. Can you . Scott, your initial question to start the show is the right one, is this the make or break moment lets keep it simple, sailor ive heard that keep it simple, stupid . It comes down to this weekend. If you dont get those tariffs pushed back, it will be ugly you mentioned tail hedges, your utilities, your gold, your bonds. Theres a lot of people going in this weekend that have barbell port