Service sector, employment rose slightly and it was slowed by worker shortages, Household Spending was solid. Agricultural conditions across the country deteriorated some of the detail we were talking about in terms of around the country. Boston said signs of slowing were more widespread than they had been in the past chicago said manufacturing declined with a slight increase in growth overall. Kansas city had a slight expansion. New york reported a subdued pace of growth. And dallas a moderate expansion. Tariff guys were mentioned 24 times versus 24. Its been elevated as you know, for the past 1e6r8 months. Steve, thank you, sir steve liesman. Markets digesting the beige book lets go to bob pisani basically flat response here, with the s p down 8 bank stocks still slightly to the down side. The key is to watch the Global Growth commentary. Remember what happened yesterday . The imf lowered its outlook for Global Growth to 3 from 3. 2 back in july this is the lowest growth weve seen since the financial crisis. Also lowered china, europe and the United States. I think that weight on there, i heard steve mention concerns about Global Growth there. This plays in with the whole retail story we had today. We got a puzzling retail sales report for september even onlining sales were down. Some people are describe this as an outlier theres a lot of discussion about recession in september or recession in 2020 Consumer Confidence was a little weaker than expected maybe thats playing into the mix right now. I think the key is, watch the Global Growth outlook. Kelly, back to you thank you, bob. Lits get some more reaction, shall we to the beige book and what it means for the markets and the economy. Chief u. S. Strategist with cross mark global investments. This beige book sounds really pretty beige it does and we anticipated that we would hear the same thing we heard from the last beige book slowing Global Growth, trade and tariffs continuing to be the same issue we heard that after the last fomc meeting we expected we would hear it from this. The oath difference that we were looking for was in the housing sector in the last beige book the talked about having constrained housing sales, weve seen that pick up. I havent read the details yet of the report, im not sure how theyre categorizing housing at this point in time we see that as an area with a lot of up side potential going forward. And weve seen that. Especially with the report coming out this morning. Thats an area where i would look more into as an economist, where overall do you see u. S. Growth trending for this year is it at 2 , even though the First Quarter was higher than 3 which would suggest then that maybe this Fourth Quarter is going to be well below 2 . Where do you see that sweet spot number i think thats a good question i think theory ailty is, its going to be somewhere between 2 and 2 and a quarter there will be a little deceleration as the year goes on youll see that evident as we go through the entire Third Quarter numbers and get those out in more detail. Well see a little bit more in the Fourth Quarter i think the Fourth Quarter will end own a stroeng stronger note into 2020. Lets talk about corporate profits and what were seeing so far. They seem to be beating estimates, at least what weve seen mildly beating estimates what are you looking forward to in this corporate reporting season and what do you see for 2020 expectations are expecting a doubledigit year over year growth in 2020 we just had our Investment Policy Committee and were debating this, and what our outlook was we expect to see things trend higher were note going to expect to see the doubledigit growth in 2020 we are so far, with a couple days of heavy hittingenings coming in. We are doing better than expected we can see sentiments start to change a little bitp that can drive the economy, that drives peoples spending habits. We can see Companies Start to generate numbers go up a little bit. I think a ten or 11 growth rate for 2020 may be a little high. Quickly,s before the others jump in here you dont think this is going to be doubledigit. Why do you expect them to be that good if the economy is slower than that what is is it comps that are going to be better or what im not sure that its just coming down to comps but we have to look at where we sit in the economy we see things slowing, the consumer is really strong. Were starting to see troughs in a lot of areas ee merging markets steam to be having a trough at this point. And starting to come out of that in the math orlt of those areas. If we start to see Global Growth turn around with a trade. We dont have a big deal but a small deal in trade. Well start to see more positive numbers come out and start to see things turn around i think well see check takings turn higher. Not just the consumer, but the overall economy will start to be better how do you feel about the consumer at this point and within the beige book, we have Household Spending remain solid. We heard from the major banks saying the consumer has been strong where do you fall . Are there shadows of doubt on the consumer at this point in your view . No, i dont think there are any shadows of doubt i think the consumer is responding to 3 year over year wage growth. And with a lot of consumers living paycheck to paycheck, which is not an ideal situation. 3 wage growth gives you 1. 75 contribution to gdp. And the next thing you know, youre running at 2, 2 1 4 . Which is where we expected to run. The more important thing is the downward pressure were experiencing on inflation. Thats going to continue to be an issue goingforward i think that reduces nominal gdp growth as we go into 2020 until the end of this year, those are the factors that will wind up causing people to downgrade earnings expectations and make the doubledigit numbers that victoria was talking about a less and less realistic as we go forward here its going to be harder and harder with less and less Pricing Power to drive those kind of earnings steve, thank you much victoria, always great to see you both President Trump speaking a short time ago, while meeting with the president of italy. Eamon javers has all the details. The president stood alongside the president of italy, talking about tariffs against the eu, in a week in which the wto has formally authorized the United States to go forward with tariffs against the eu, in a dispute over airbus. The eye tal yang president said he thought tariffs between the two trading blocks, the United States and the eu would be counter productive for everybody. The president then stepped in and said this. In a war of tariffs with the european union, the trade imbalance is so great that we cant lose that. Because they do much more business than we do. Its a very tough situation for us for many years, but now its a tough situation for them because i can remedy the situation very easily. And there really is not any financial counterattack. Hopefully i dont have to do that with all of that being said, we are talking. So the president s argument there is because of the trade deficit between the United States and the eu, the United States has more product to tax than the eu does, vice versa therefore, the United States is in an advantageous position. Thats the same argument he and his top aides made on the china trade war as that was getting started. What weve seen in that indication, the chinese have responded outside of tariffs they responded by cutting back their purchases of u. S. Agricultural products. There are other ways for these other economic entities to respond to tariffs being imposed. The president there saying, ulgt m ultimately, if it comes to a tariff war, the United States simply cant lose. Thank you, eamon javers. Coming up a drop in retail sales, are they starting to show cracks are the semis getting ahead of themselves . Welcome back to power lunch. Retail sales dropping for the first time in seven months, led primarily by auto and online sales declines we saw some strength until clothing its been a mixed bag for Retail Stocks this Year Department and Clothing Stores have been put on the clearance rack liz dunn ladies, welcome to you both. What happened with these retail Sales Numbers otto was clearly the weakness, and i think the consumer is fine, theyre in great shape. There are sectors that are underperforming quite a bit. Department stores continue to underperform, and really most of them all the consumer is getting mixed messages, what do you mean i think right now, we have a little political chaos going on, theres a lot of activity based on tweets on both sides. The consumer is kind of mixing up that politics with the true fundamentals of where the economy is and how strong we actually are do you really think that theyre paying that close attention to the political noise . And that is affecting what theyre doing, whether theyre going to the malt . Yeah. Its chilling them somehow . Its not affecting them a the mall in particular it is but if the Clothing Stores and the typical what we think of as retail, thats not affecting them too much. The bigger purchases with auto, et cetera, thats where they might shutter back a little bit. Everyone is fully employed best employment pretty much in our lifetimes and theyre still spending, its really a strong situation, i do think that people have become almost addicted to chaos. In terms of the stock performances, though, weve seen some stocks richly rewarded for executing well walmart and target for instance. And others who are absolutely punished you Say Department stores are uninvestable in terms of the walmarts, the targets of the world, many would argue their valuations are rich. Theyre full at this point do they deserve a higher valuation from here . Yeah, i think the valuations are full if we look forward and think about whats happening on the manufacturing front and the baijs book, i just heard the last segment discuss all the cracks in the economy. You know, its not a foregone conclusion that the consumer continues to be strong there are concerns with valuations where they are, i think you have to be cautious. I think there are names that are like target for instance, throwing up the best numbers theyve had in a decade. And still relatively reasonably valued walmart might be a little stretched. You have to be selective if we continue to see a deterioration in in the economy, you have to worry about a correction what about the Holiday Season people wonder, is everybody going to emerge from it . The weak players especially. Is this a do or die moment for them it is a very darwinistic type of situation in general in retail, that will shake up even more come Holiday Season q3 numbers in retail its not that we dont Pay Attention to them. Its nottive our strongest quarter. Come into q4, it is make it or break it does that mean . Im thinking through this, are they doing discounting how is that going to ripple through the sector, whoever some of the teen brands, forever 21 just filed for bankruptcy. As each of these players try to hang on, what impact is that going to have on everyone else i think the traffic is down its not even sometimes theyre offering discounts sometimes theyre playing to the dollar and people are still not frequenting them in their spaces theyre going automatically to amazon, to walmart, to target, to the big players that are wing in this this type of situation theyre starting to shop more on instagram and all these other new mediums. Its not that people are shopping around at macys, bloomingdales, et cetera, theyre sort of foesh getting about them if you had 5,000 to put into these companies, which two would you choose gosh, i wish i had 5,000 dont we all. I think target. Even though lululemon has had a run, you could probably still chase it im intrigued by some of the newer Business Models. I like stitchfix a little more cautious on Something Like a real real. Sospreading my 5,000 pretty thin there. Amazon has become a cult favorite for people to discover fashion items. The cheapest fashion items. Super cheap, yeah absolutely, that 29 dress, i have to admit i did buy two of them now i have less than 5,000. But yeah, there was this fashion dress this summer that bloggers were talking about that was 29. And discovered on amazon so i think slowly its happening, but for the most part, people arent going there for true fashion, there will be one offs at is this point. Its really rempl replenishmentf things theyre already buying. One off fashion items. For the most part, discovery of true fashion is happening away from amazon still. Theres a bank of America Merrill lynch downgrade earlier this week, one of their key points is that people they dont want to pay 400 for a new coach handbag. Theyd rather pay 4 400 for a used luxury brand. Is all this a part youre willing to spend the money for high ticket quality things but not willing to spend the money and go to amazon and buy the bloggers dress. Transparency is becoming more and more clear to the consumer you can shop around easier, you can use amazon to search at other retailers. Theres a camera icon, you take a picture. Say youre tjmaxx or marshalls you take a picture of that tag and it am tell you if its cheaper on amazon or if its even carried on amazon i didnt even know that its super. It allows the consumer to be savvy and make good decisions. Maybe you can get that Louis Vuitton cheaper than a coach bag. Go for it. Thank you thanks for having us. Gm shares are popping as they may have a deal to end the month long strike to end the union there. Youve also got 90 minutes to buy netflix before its Earnings Report is out. Should you check out shares of nvidia which are up 8 in a week. How should you play the chips from here . 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Pick up the phone and call americas gold authority and well get you started securing your financial future today. Us money reserve is one of the most dependable gold distributors in america. Welcome back to power lunch. Semis swinging lower today after mixed earnings from asml a day after hitting all time highs. Is it time to cash in on the chips . Or can they resume their run your trading nation team today theyve been leadership for this market for a little bit of a stretch now, do you think that can continue right here or is it time to take some profits . I think it has been the leadership its also been a sign of the trade for the market. Even if you get a little short term pull back in the Semiconductor Stocks here. Id be a buyer of it youre above a rising 50 and 200 day average. You start looking at some of the best performing names, the five largest names represent 40 of this index, and those are all charts that look like buys i would be buying any pull backs in the Semiconductor Stocks. When you think about it, the semis have managed to perform very well. Despite a lot of the noise around exposure to the chinese trade situation. As well as maybe slowdown in Cloud Computing architecture things like that i agree thatablied dips for the semiconductors i wouldnt chase the rally we saw last week. Lets not forget the index is up about 45 since the december 2018 low the group has performed quite strongly the long term thesis of the