Futures up by 253 points this comes after the dow was up yesterday by 230 points. The s p up by 27 points and then the nasdaq up by 92. The gains we saw yesterday were happening even though you continued to see pressure on yields in the treasury market. See how your Energy Prices and that did move stocks in the Energy Sector higher yesterday but again the idea that china is now basically confirming what President Trump was saying, things seem to sound better than they did last week for sure. Hearing both sides come out and make the arguments have been helping the futures this morning. They kind of said were not going to immediately match the new additional tariffs that he was right. So actually we would like existing tariffs to be going down. But both sides are willing to compromise and negotiate and thats a pretty significant deal. But it was their initial matching of the ones that he did. Yeah. Even though they really cant unless they raise the number they cant really match it anymore. Theyre running out of goods. Theyre running out of goods so it kind of makes sense but they said were not going to do but theres all kinds of other things they can do but whats important i think is that both sides seem to be trying to make some sort of effort to say we will try to negotiate. They can do other things. Thats different than what we heard a week ago. We can do other things too. Theres an internet cable layed down we never said no to one of these things but suddenly security concerns. Its already down its already down. Its 8,000 miles and its almost like complete. They got it all the way down to Faster Internet Service to hong kong and Everything Else the Financial Center and now theyre saying were not so sure i was already thinking that its supposedly a National Security concern but i could see it being part of the overall completely. And then its either a security thing or its a trade thing. Its always together i understand its all together and i understand why you would use them all its hard to stand on your principles if people can very obviously see you have been mixing them where it can make sense. Nobody lives in this world where things arent done that way. I always thought of us as being above the fray we do things differently because were the world leaders. But everything is probably on the table when youre trying to. You would put some enforcement language in there too to make it look like you alayed the National Security concerns. I understand the National Security concerns. Theyre both part of the overall. Thats part of what were trying to accomplish with china anyway is to try to lesson the National Security race which are economics. Yesterday from the Obama Administration, it is ramping up with good reason and youre going to see more concerns about intellectual property theft, both whats happening internally and whats happening from other countries. When we try to separate the economy or markets from National Security and then you realize how if we lose ground economically, thats a National Security threat as well. Its all wrapped into one, isnt it real issues with china because theyre not capitalists because they can wake up one morning and say we want to dominate x industry. So there are real issues that have to be overcome and certainly, this latest piece of rhetoric out of china is quite calming to markets and it should be. Hes the head of Investment Strategy and hes going to be with us for awhile too lets tell you what happened overnight in asia. Take a quick look at the charts and youll see the nikkei ended flat and hang seng is up by a third of a percent and then in europe you see active trading already taking place at this hour and youll see green arrows across the board a lot of the same sort of sentiment. These markets trading after the asian markets closed on the idea that the trade war could be moving toward a point where were trying to work things out for this week. Things can change on a dime. Thats good news if that were to happen and also the rest of the globe. An extended trade war between the United States and china. Treasury yields continue to ceeloer yields yesterday the 10 year at 1. 496 . It fell to 1. 905 these comments from china came less than a day after the Trump Administration made the next two rounds of the tariffs we were talking about official a election of 15 tariffs will begin at 12 01 00 a. M. Theyll be slapped on. A portion of goods did we decide it was slapped yes because you actually slap them on the cargo as it came in. Thats covering 125 billion of chinese products. That includes smart watches and bluetooth head phones and it will take effect for the remainder of the list and in this case it includes cell phones, laptops, clothes and its spoken out against the tariffs and including the official from that group later this hour. Treasury secretary says that the administration is considering ultra long u. S. Bonds. He said the United States would consider taking advantage of longterm borrowing if they were right. The idea of a 50 year or 100 year bond has been considered a treasury for a decade. It was seriously studying that proposal he also said theres no plan to intervene in the currency market to weaken the u. S. Dollar at least for now. Yields, the equity markets and all things investing here on set, head of Investment Strategy and hes already had some comments. So ill start with you, the rebound we have seen from the sell offs last week once again has it within striking distance of new highs again if youre an investor, do you keep what you have and add to it or do you use this opportunity maybe to lighten up some people are derisking because of escalations in the trade front what would you do . Were staying put with our allocations. We acknowledge theres quite a bit of risk out there. You mention trade, the yield curve, but as long as the consumer can stay steady that the u. S. Economy will stay strong it will be a supportive environment for stocks. Do you i was reading about Boris Johnson and the queen and Everything Else and this makes it less likely that theres any type of deal maybe there will still be one. Maybe its a way to force the issue but what if theres a no deal brexit on october 31st . Do you add in that to what could potentially cause some derisking . Theres a lot of uncertainty out there and the tweets are moving the market. The bigger concern adds to the uncertainty. It could be a drag for the u. K. Because were more concerned about whats going on with the tariffs. You saw today how the market moved with just some rhetoric out there that things are improving with the tariffs coming online this sunday the consumer could be effected and you see whats happening on the manufacturing side when the tariffs started back, we seed 15 straight months of declines in the global pmi thats the longest streak in history. Now youre seeing economies that have a heavier manufacturing tilt actually have negative gdp numbers. We saw that in germany and so the concern is that the Manufacturing Sector has been decimated. You have seen the first time that the manufacturing pmi went negative here. And so if this starts up on the consumer side, the consumer has been the lynch pin for holding up the market. And even though the direct numbers arent big in terms of our effect on the economy, its more about how the sentiment is effecting the consumer and are they going to stop spending and are we going to see companies do less hiring and then that translates into less spending for the consumer so thats a concern. Thats been out there a long time dr. Evil. Okay. Ill take that this morning. People dismiss the good retail Sales Numbers because they said they were kind of before the trade wars really heightened up and tensions really ramped up but we have very, very strong Consumer Confidence and that was already for august which reflected some of this so theres a lot of strength out there i think the on tupty is frankly to dial risk up a little bit number one, since the beginning of may when these started up, the s p is only off one and those are the two pieces that have been the best beneficiary of fed easing cycles so id put a little bit more risk on the table. Youre in charge, arent you . Well, we follow indices but im in charge of communicating how they all function. Thats right. People need to do what you say so youre saying, for what should i do . Am i adding . Am i buying . Youre adding a little bit to the risky side of the equity markets. Thats not derisking. No, i wouldnt derisk in this environment. Where would you derisk to . In the bond markets we have an inverted yield curve which i dont think says that much about the economy because of the qe but youre not being rewarded for risk in the treasury market. Even on the bond side i would tilt away from treasuries and toward corporates. The corporate curves are not inverted at all. Theres almost 250 basis points. Do you take advantage of the yield in the s p now or growth lea leads, if were setting new highs theyre leading the way. The yield thing is funny. Everybody forgets that 15 years ago we cut the tax rate on dividends. So that sort of long run picture of yields is a little clouded but specifically to your point, i would stay center of the style box. Kind of quality plus growth kind of strategies that dont tilt too far away into either corner because value could be a value trap particularly europe as an example. Not only do we have the Brexit Issues but very weak data out of germany but the extreme growth side could be acceptable if theres any disappointment. Both sides. Write down everything thats positive and everything that is negative. A lot are negative but theres so many things we actually had a payroll tax cut. It could happen. But there is no alternative and at this point, we cant see any Interest Rates are so slow. Where do you put your money. Unemployment. Do you see that the middle class is doing so much better supposedly than the top 1 strong middle class. Thank you when we return, we have news out of hong kong overnight china bringing new troops and blocking a weekend protest march. Plus federal officials rating the home of the president of the United Auto Workers union. More details next. Right now a look at the biggest premarket winners and losers in the dow. Devices are like doorways that could allow hackers into your home. And like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. Just days before protestors had called or planned a march ca calling, a protest calling for democracy, police will ban that march citing safety concerns. Federal agents from the fbi and irs raided the home of gary jones. Hes the president of the United Auto Workers union agents began searching the property yesterday around 8 30 a. M. And continued throughout the day its part of a multiyear corruption probe of the top ranks that already lead to convictions of five people affiliated with the uaw and three executives from christler. The search warrants werent necessary and it has cooperated and will continue to cooperate with the investigation tesla says its launching insurance for its cars in california the company says the service is designed to give drivers lower rates because of safety features on its electric cars tesla said its rates were as much as 20 lower than rivals but it did not provide comparisons. Ceo elon musk said insurance rates should plummet but teslas cars typically rank among the most expensive vehicles to ensure because of the high repair costs for components and equipment tesla plans to extend the insurance offering to other states in the future they come in and really undercut their rivals talking about solarcity. Exactly. Look, i would just say they have findings behind them. If they charge you higher rates geico is pretty good at figuring out. A lot of these companies. Theres not usually a cheaper place you can get a 20 insurance one. If you offer much lower rates as an insurance company, big catastrophe comes and other things happen you can get washed out. I dont know that right. They do so much at that company in terms of what theyre trying to get their arms around. This is another incredibly complex industry. Thinking back on the story i just heard about china they say were going to cancel this because of safety concerns because many of you might get hurt rnlt th arent they sayingthis were cancelling this if you see the peaceful nature of the protest. In one case they were peacefully moved out of the way and came through. Were worried that you might get hurt bad if you isnt that yeah. Thats the way it works over there. Thats the whole point. Coming up, big changes in the retail world there are some well talk to the ceo behind the move next. Want to freshen your home without using heavy, overwhelming scents . Introducing febreze one. It eliminates odors with no heavy perfumes, so you can feel good about using it in your home. For a light, naturalsmelling freshness, try new febreze one. The latest deal shaking things up between hudsons bay, lord and taylor and le tote. They agreed to buy the Iconic Department store for 100 million. Joining us to talk about it is the co founder and ceo of l le tote. Thanks for having me. Youre making a bold move moving into an area where most people are trying to figure out a way to get out what do you see in terms of value and why do you think you can make it work were going where the customers are going. Were going where the customers are asking us to go. Our customers have been asking us for pop up locations for stores where they could come, touch, feel. People are tactile theyre not Single Channel shoppers they want to go out into the real world and touch and feel and make the decision to purchase potentially online. Who are your customers that have asking for a mall based retailer. I wouldnt call it a mall based retailer what theyre saying is we want to be able to do more things than just rent from you online we want to be able to touchfeel these products and thats why we wanted to do more stores part of why we made this deal with lord and taylor was because we said this gives us ability to get to scale fast. Theres a big overlap with our Customer Base and their Customer Base it gives our customers access to a lot more brands and a lot more variety than we would be able to get otherwise. Thats why i ask though if theres a lot of overlap between their customer and yours who is your customer . Our customer 28 to 50yearold professional females living in major metros or suburban areas close to major metros a big portion of our Customer Base is in the northeast and new york state is our single largest concentration of customers which is where, you know, lord and taylor has a really strong foothold so this gives our customers specifically in the northeast access to stores and being able to do things beyond just renting online. I keep coming back to the mall and i understand your need to get stores out there and have your customers touch and feel things but then i look at somebody like forever 21 which was a pretty hot retailer and is now looking at bankruptcy because mall traffic dropped so significantly. How do you fight that trend and make sure that people do show up at your stores in the mall were thinking about the retailer of the future and saying what does that look like . That doesnt look like 150,000 square feet Stores Across the us theyre going to be much more focused with a much more focused footprint. Today were going to have about 120,000 square feet stores on average. 38. 38. And Going Forward the plan is to roll out 100 Stores Across the u. S. But not to exceed 25,000 square feet. So theyre going to be much more focused in the selections, much more personalized to each location. Why not just start new and put your stores in the premiere locations and premiere malls because lord and taylor, i have been to the stores, i find things that i like in there but its not in the top level malls always some of the ones i think of are not the malls that are thriving now. You have to be the very top tier malls to be able to draw in the traffic and get people coming through. We talked about doing this ourselves and the time it would take for us to get to the scale, to get the learnings would take longer we like the brand. We think its really iconic so what we are trying to do is merge tradition with technology. Its the oldest mall chain retailer chain in the u. S. It has a lot of Brand Awareness that we think will help our traditional rental business and we think marrying tradition with technology why is hudsons bay willing to let this go they havent been there for all that long and they have put resources into it too. Their focus has always been on saks and off fifth and continues to be on luxury as a segment. So this was i would say the stepchild of that hudson bay company. Were going to say were going to revitalize it and inject technology a lot of the pools that we built for our business. Does low debt financing, does low Interest Rates have anything to do with your decision to make some of these things absolutely. The market is great for debt and rates are affordable and we thought it made a ton of sense to finance with this debt. Thank you for coming in we appreciate your time today. We hope youll come back and give