Market might dry up on them. Semiconductor issues, financial issues, could way on them could expand, global slowdown. Get consumer durables involved in that. Those sensitive to the economy involved in that. All of sudden, before you know it, katybarthedoor. The psychological indicator, the vix, that is flashpoint how people are feeling. That is jumping in excess up 33 earlier. Up 23 right now. Were keeping an eye on that as sentiment, what people are feeling about the market. They are feeling a little nervous. Numbers out of the Services Sector slid to a threeyear low. The reason i mentioned even the Services Sector, it at least is following in this report, a fourth straight month, downward trend, still expanding but at a slower rate. That is happening with the manufacturing sector. Twin sluggishness is weighing on these markets. Typically would pounce on negative news, being good for Interest Rates coming down. That is indeed happening. 10year note 1. 75 . Normally that would be a salve to the markets. Not much today. The idea maybe this will portend something more substantial, a slowdown the likes of which Federal Reserve cuts arent going to be able to handle. Jpmorgan jpmorgan in the middle of all this saying you buy own the dip. Theyre couching that a little bit to say what exactly is a dip, whether you pounce in right away with Something Like this. Always in the eye of the beholder. Were looking at a sluggish start, to put it mildly the start of the third quarter. Some say this might have started with the president expanding chinese goods subject to tariffs. The chinese responding very, very quickly by devaluing their currency. Theyre saying well not by any agricultural items from the United States. Theyre not saying that. The word got out to member firms to do just that they dont own up to much there. What is the latest . Fox Business NetworksEdward Lawrence on the latest development. Edward . Reporter a lot going on. President donald trump on twitter calling out china as a currency manipulator. Officially the Treasury Department has them on the monitor list. Nothing has changed related to that officially but again the president calling them out as a currency manipulator. A spokesman for the Central Bank Governor in china, said the reason it dropped because of trade protectionism and imposition of tariff increases on china. Translator at present the overall situation of macroEconomic Policy to insure improvement of the stability of the Macro Economy through effective control system. Reporter add this to the reports that Chinese Government told stateowned companies to stop buying u. S. Ing a culture a Chinese Government official pushed back on the report. They made purchases loaded in september but held off on buying more because the price of american agriculture is 30 higher than other countries. Chinese trade sources telling us that during the last facetoface meeting china refused to put back in the concessions u. S. Says china cut out of the trade deal. They told the delegation that china would not change any of their laws to satisfy the United States. There is a move in the beijing to reliance on coupling with the United States. The tone has changed with the trade talks. Seems were inching towards the trade dispute becoming a trade war. Neil thank you my friend. Well go back to Edward Lawrence at white house. If conditions will warrant. I have feeling on day like this conditions will warrant repeatedly. Look where the dow is right now. That is a big point loss. 605 points. In percentage terms 2. 25. To put that in some perspective when we had the big drop on october 19th, 1987, a little more than 508 point that represented about a quarter of the dows value. In this case, 600 plus falloff 2. 25 . That doesnt make it any easier to take. Just putting it in perspective. The s p 500 meanwhile has dropped from 5 from highs reached on the 26th of july. Well keep track of that. Keeping track of countertrends, gold is finding buyers. Bitcoin is finding buyers. For a while oil was finding buyers. People are looking for a safe place to keep money in the time being. None more so what is happening within the treasury markets even getting a paltry 1. 75 on your money, beats getting nothing on your money, or losing money. Well follow that. Jackie deangelis is following sectors all getting hit on the chin. The only differentiator is how hard they are hit. Right . Reporter exactly, neil. The dow is close to the session lows we hit earlier this morning. Down 605 point right now. This comes back on the news of china retaliation. Last round of tariffs by the president , china came back with currency devaluation. The president calling china a currency manipulator in one of his tweets. The dow is a sea of red. Cocacola is slightly in the black but now not green. Apple, ibm, intel, were the ones down the most. Top losers on a percentage basis. Well get back to tech in a minute. Industrial names, boeing, 3m, caterpillar, they are having a rough day because of china concerns as well. The tech stocks you mentioned, chips are getting slammed, techs led the rally. Techs highly correlated to china. Why names like amd. Micron, microchip,a are lower today. All the uncertainty contributing to the wider yield curve conversion, the wideest since 2007. The flight to safety, has the 10year yield falling even lower than the 3month shortterm yield. With the cut behind us, the Market Pricing in another one for 100 for the quarter in september. It makes sense. Market thinking the fed will be a backstop what could be very volatile august, neil. Right now caution investors are coping with uncertainty, figuring out how to reposition. You can see why stocks are down. Neil certainly can. Jackie deangelis here. Get a read on the tariff war that expanded. The president , many say, expanding all the tariffs to 300 billion worth, on september 1, got the ball rolling on this. Too soon to say the implications. What happens now, our next guest is concerned, American Apparel ceo. What do you think of this and whether that spur ad lot of selloff in activity or at least concern among your members . My members are very concerned. Ill tell you, neil what is most interesting, people dont get, 550 billion, you have a you have to do is do the math, divided by number of days, number of hours, comes up to a Million Dollars a minute coming across into the United States. Then youre going to tariff that at 25 or 10 . And you honestly think that the consumers is not going to notice . Come on. The market is reacting to that. Im surprised, quite frankly it hasnt reacted with greater ferocity. Theyre reacting to the fact margins will get squeezed, prices will go up. The idea that, that very idea that the fed will cut and Interest Rates are going down, it doesnt add up. You put your money in the bank. You will get less money and pay more for goods. The math isnt there. And everybody is starting to realize it. I certainly hope that the president is getting good advice because this neil he is overruling it, we do know that a lot of his closest aides urged against him extending tariffs to the remaining items. He ignored that he also has been saying again and again that consumers are not paying this thanks to japan, im sorry, chinas devaluation, it buffetted effect to American Consumers. Your argument is, even if that were the case it wont be long, right. No. We know for a fact that importers are hiking the bill. They have to, they have to pay for this. They have no choice. Because of that theyre out there borrowing money to do this, having to lay off people. It is a crazy situation. And we dont see any end in sight. Many of our companies are, are public companies. They know that the analysts want to know their exposure to china. So they look around and they say, okay, well, we can go to vietnam, the president has threatened vietnam. We can go to india. The president threatened india. We can go to indonesia, or bangladesh. Every place we go we say we can ride it out f we ride it out, we have bigger problems. We have to raise prices. We have to raise tariffs. It is an ugly situation. We asked the Administration Time and time again, please, please, stay away from the consumer. You know on one hand, were proud of the president for taking this on and saying okay, lets resolve it, but then Peter Navarro comes out talking about the seven sins of china. It put our industry in five stages of mourning. We cant deal with this we have no way to deal with this. We feel like were pawns in an International Chess game. Were going to get it hurt, it will hurt the economy. It is showing up in the market. We hope that the president will see the light of day and stay away from the consumer because he is heading in our direction. Neil maybe they will score a deal well see what happens. Rick, thank you very, very much. As rick and i were speaking here the president has been putting out a couple tweets on these development, based on historic currency manipulation by china, it is now even more obvious to everyone, americans are not being paid by americans. U. S. Is taking tens of billions of dollars. China always used currency manipulation to steal our factories, your our jobs, harm our farmers, not anymore. Enter liz peek, fox news consume contributor. What do you think . Its a mess. Neil technical terms . You have to have phd level to get there look, i think both sides are dug in. I think one question for the Trump Administration, and to your point, an awful lot of people in that white house want this solved. Larry kudlow and mnuchin, all these people are working hard to make sense of this trade skirmish. The problem is, i think china is dug in pretty hard too right now. The hong kong situation cannot come at a worse time because president xi xinping cannot look weak there and also weak in dealing with the United States. The United States becomes a very attractive, excuse for what is going on in hong kong. Theyre using the United States, saying were fomenting revolution there or fomenting dissent and so, all of a sudden this has become a much bigger conflict i think. Look, i think that the Trump Administration is totally right to go after china. They have cheated for years. I have written about this for years. It is appalling to me that american manufacturers did not stand up, did not demand better treatment from china 20 years ago. But here we are, we are in fact seeing now all this, this skirmishing really begin to deflate our growth and it is not just in manufacturing. It is pretty much across the board. Neil do you think the president , too early to tell, a lot of times worried about the trade spat, something happens, someone blinks, maybe not blinks pivot a little bit, but the latest move to include tariffs on these additional items obviously was meant to sort of push the chinese along. It is not working. It doesnt seem to be working. They have, in the beginning, six months ago they were making various concessions about Agricultural Products and allowing different Financial Companies into china for the first time. The sorts of things gave you hope we were getting somewhere. Now the reason i think the market is reacting so badly, okay, there is no sign of progress. In fact it seems like lines have hardened. In may as you know, as your viewers know, everything stopped. They kind of retrenched or backtracked on agreements that seemed to be in place and we have not made any forward progress since then. Neil i dont care where people come politically from the president , that tariffs are a good thing, wonderful thing, that American Consumers are not, it is American Distributors and a lot of american multinationals have the tough time seeing crunched margins, passing some or all of that along. Yeah. Neil they are the ones affected. China yes, this will be a detriment but the fact of the matter i think he is getting the cart before the horse and giving americans false hope. Interestingly american businesses are scrambling to diversify, to change their supply chains to get around tariffs as best they cans. Frankly i think they have done a pretty bangup job of that they talk about it in earnings releases. Earnings are good. Companies are doing very well. Neil they have been able to absorb that. Maybe a lot thanks to the currency manipulation to absorb some of that. The idea that american consume remembers immune to this theyre not immune. By the way neither is china immune. China is hurting. Neil isnt in their interest to strike a deal . It is in everybodys interest to strike a deal. Neil i wonder if they wait donald trump out . That may be their thinking. They may connect the dots between trump running on an Strong Economy, their intransigence leading to less Strong Economy, increasing odds he is not reelected. I think it is important for him to go into the 2020 election cycle with a Strong Economy. Doesnt have to be growing 3 . Probably wont be, certainly will grow 2, 2 1 2 . Or else his argument in favor of lower regulations and tax breaks for corporations ring hollow. That is so disappointing. All the things he took office made ceos optimistic. He saw Business Investment climb. Neil right. Productivity increased for the first time in a decade. Now were kind of losing. Were losing some momentum. Neil are you surprised with much lower Interest Rates on 10year note, 1. 75. That might provide and still might provide a floor for stocks but it is not. The two things i think this is overreaction to this one piece of news but i think maybe the market was ready for some correction anyway. Look, this has been a heck of a market year on top of another great year last year. That doesnt always happen without some hiccups along the way. Neil liz, thank you very, very much. We talk about the momentum of american corporations whether theyre keeping up with this, to lizs point she aptly pointed out its a mess. I think shes right. Earnings are running 2. 7 over last year. That is down from the 6 plus level we were a little more than week ago. Expected when all numbers come in, these experts have been wrong, down a little bit, contract a little bit, down half a percent. Were not there yet. That tells but the sentiment and mentality changing as the latest wave of numbers came in to show things are slowing down for latest Companies Reporting not as robust yet the china situation some of the biggest premier names, caterpillar, deeres, Goldman Sachs and others have been signaling some concerns and you can understand how that panic mentality just sort of steamrolls right through all the other markets. Then there is hong kong, this concern china doesnt want to see an 11th weekend in a row of protests. How they dealt with the past weekend is illustrated theyre growing impatient. After this. [shouting] 4. 95. Delivery drones or the latest phones. 4. 95. No matter what you trade, at fidelity its just 4. 95 per online u. S. Equity trade. No matter what you trade, at fidelity theres a company thats talked than me jd power. People 448,134 to be exact. They answered 410 questions in 8 categories about vehicle quality. And when they were done, chevy earned more j. D. Power quality awards across cars, trucks and suvs than any other brand over the last four years. So on behalf of chevrolet, i want to say thank you, real people. Youre welcome. Were gonna need a bigger room. Neil President Trump overruling worried advisors when it came to extend the tariffs as he extended it to remaining 300 billion worth of goods. The advisors were saying were making progress, this is bad time to do this. Secondly the notion the latest wave of goods is more consumer oriented would hit you at retail level, retailers themselves. That is why they disproportionately set it off. Even those tariffs were on pay for much higher. Former bush 43 speechwriter and a former Clinton Campaign finance member, blake rutherford. Thanks forting the time. If that is the case, it is possible that donald trump, maybe with the best of intentions, got this crisis rolling . Yes. He is planning to campaign on a Strong Economy and yet this new tariff is going to have exactly the opposite intention what his Campaign Promise to reduce the trade deficit. It will hit exactly the constituency that supports him. Neil blake, democrats in the race, only one who has spoken out strongly against this approach of president has taken is kamala harris. That is why the Federal Reserve came to the rescue. Sure enough the Federal Reserve cuts rate. Ensuing selloff signaled is not enough. She is worried that donald trump started this and he might rue the day he did. Neil, pretty clear donald trump started it. Donald trump has it in his head he can get credit for putting out the fire he started. I dont think that is right. Democrats ought to talk about this one of sure prying things we saw in the debates, this didnt get any attention. Only time tariffs were mentioned in response to question about tpp i think senator harris is right to be talking about this i think other candidat