Washington examist anderson and benchmark managing partner, look at him, kevin kelly, looking good because you have the light. I love it. Dagen whats it called by diva light. I go by divos. No divas or divos just common sense. Fox news contributor adviser and founder former economic adviser robert wolf, shape of the race for the democratic nomination for the presidency, we will talk to him at length, fox news senior judicial analyst judge andrew napolitano, Services Committee member sean and the now ceo herman cain and dr. Mikhail varshavski, dr. Mike, you dont want to miss any of the gentlemen, to the future this morning, 159 point loss after stocks soared yesterday after President Trump delayed tariff on certain chinese goods until december 15th delays include goods like smart phones, laptops, video games, the president commenting on the move some of the tariffs will have impact. [inaudible] the only impact that weve corrected almost [inaudible] dagen china feeling the impacts of the trade dispute posting weak economic numbers with its jobless rate reaching the highest on record, you also have other indicators, factory production, Property Investment much lower than expected. Try to answer my question earlier, so theres a trade delay on the tariffs on some goods, theres another meeting scheduled for is it next month in washington on the trade negotiations but is the World Economy slowing so much that our move with china dont matter at this point . Theyre very much is that danger right now and the reason the market is off today because of bad Economic News from china, the troubling news from germany, weve had negative Interest Rates in effect for quite a while in europe and yet the German Economy is contracting, thats scary. Dagen what do you make of this move, yesterday, i was talking to rachel, our producer this morning, oh, okay, delay in tariffs is now the is the new Interest Rate cut by the Federal Reserve, what do you make to have market now and maybe in the next 6 months to a year. Kevin we are heading to volatile stock, september and october tend to be choppy, the market is trying to get footing, outsize moves even in august as precursor, its important to know that germany has been slowing for 4 months, thats a troubling trend and especially with china coming out with the slowest growth in Industrial Production in 17 years, we have the Worlds Largest economies are slowing, even look at our gdp compared to last year, so i think the market right now has shown you where you need to be and thats in treasures, Asset Classes over the past 6 weeks, 8 weeks during the troubling time. Dagen can we take a look at 30year yield, i think, and i want to ask you this, kevin, you would still buy the 30year yield, i think that might be record of 30year yield. Would you still buy treasuries . Definitely, i think we will have the 30year yield go under 2 fairly soon and set new low for 10year treasury, thats heading to range to 1 and a quarter percent given the recent troubling news. You know whats interesting about the 30year yield, thats a 30year bond, the fed funds rate is overnight rate, fed fund is 3. 2 , thats telling me you have a lot of rate cuts in the pipeline. Dagen so essentially the federal government, they have to pay more you have to pay more to borrow on the very short, you have to pay to borrow for 30 years. And treasury bond market is making it loud and clear to Federal Reserve policymakers that its high time to begin cutting rates with aggressiveness. Kevin i had meeting with Institutional Investor yesterday and thats always been looks at the market, nobrainer trade, getting into the shorterend of the curve actually, hes not being compensated for that and thats the biggest problem, right, if we look at our 30year, you look at germanys 30year, the clear choice to be in the u. S. Treasury market. I will add something, as Federal Reserve cuts Interest Rates it becomes more attractive for Foreign Investors to put their money in u. S. Treasuries because as the fed cuts rate, cost of removing, Exchange Rate risk into particular move to dollar treasuries is lower. Dagen i saw this yesterday, broke while the protests were breaking out in hong kong, americans views of china are changing, new survey found that 60 have unfavorable opinion on china compare that to 47 last year. Dramatic increase there and its just its a number of Different Things and the unfavorable view has gone up, what do you make of this and politically as well . Well, i think its driven by a mix of Economic Security and cultural forces, hey, weve been getting a bad deal for them and began to resinate for folks that may not think about trade issues that often. Security issues and people begin to go think more about asia and the security in the region being in news more often, understanding increasingly among voters that china has to play a role and want to resolve the situation and finally things that we are seeing in hong kong, what we are seeing with the leaders in china, story about the Chinese Government not treating their people very well because does not sit with people as well. Dagen can i ask you a question about china and americans overwhelmingly agree in Pew Research Poll that chinas military expansion is a negative development for the u. S. , but where do voters sit and the American People sit, would they side with President Trump even in the economy weakness and i only point that the twoyear on the yield inverted and that historically, i think every recession since world war ii at least proceeded by inversion, again, that means 2year rates are higher, the yield is higher than tenyear, its been that way for 2 months, spring for the most part, before we move onto discussion of inversion, where do americans sit in terms of the tug of war between doing the right thing with china but also an economy that looks certainly slowing here in the u. S. Well, i think limits to the amount of shortterm paying pain people are willing to take on and longterm gain the president promises might be there. Typically if you ask the job that the president is doing, he does about 10 points better on the question of how do you think is handling of the economy versus handling to have job overall, so its starting to wonder what were the hypothetical situation look like where lets say the economy was doing worse, not doing as well where people do not give the president as much credit for the economy, overall job approval would be in the low 30s, similarly if you scale back on some of the things like the tweets, the things that swing voters dont love as much with an economy like this at the moment could job approval be higher, its interesting hypothetical. Dagen what do you make to have inversion . Yeah, i think its actually signaling worldwide problems and growth overseas, i mean, if you look at the u. S. Economy, Consumer Confidence is still elevated because look at the jobs market. Dagen focus on the positive. Right, 70 of Services Economy and people feel good, i think, one of the reasons the tariffs were delayed because latest round of tariffs actually hit the consumer side of the ledger. The first round of tariffs were more on enterprise, this would have hit the Christmas Shopping season, the Holiday Shopping season, goods would have been impacted. That would have hit Consumer Confidence because all prices gone up. Thats why you saw the delay. Dagen President Trump said essentially the washington editorial page call it trade wars arent free to consumers despite the messaging thats coming out. He loves them. Dagen right, i always point to that, trade wars are easy to win which is proving what i said earlier, we are not helpless in the treasury yield curve inversion, shortterm Interest Rates are too high, and the Federal Reserve can simply go ahead cut rates and get rid of that yield curve inversion quickly. How did did that in 1998 it worked. There was no recession. They took their tie, they tolerated, the longer they tolerate the inverted treasury yield curve, the risk of recession, we have an economic downturn. I will point out that was during Longterm Management collapse, also during the impeachment proceedings against bill clinton between between july and september, the s p fell over 19 and recovered and then some by the end of the year. Rate cuts were in the context of real gdp growth in excess of 4 . Dagen do you think the fed cuts 50 basis points in september . I think they might very well cut 50 basis points if we get troubling news, disappointed on jobs for september or august, that gives them strong reason to cut half percentage point. Dagen does it rescue the economy . Reduces recession risk, would it continue with economic recovery, thats problematic. You cant escape recessions, its only a matter of time. Dagen do you think we go to recession . Within the 18 months. Dagen just in time with people going to the polls, kristin, we will discuss, more on the chaos in hong kong, china denying u. S. Navy visit to port as President Trump urges calm. Giant in online streaming, details next. With sofi, get your credit cards right by consolidating your Credit Card Debt into one monthly payment. And get your Interest Rate right. So you can save big. Get a nofee personal loan up to 100k. Managingaudreys on it. S . Eating right . On it staying active . On it. Audrey thinks shes doing all she can to manage her type 2 diabetes and Heart Disease but is her treatment doing enough to lower her heart risk . [sfx crash of Football Players colliding offcamera. ] maybe not. Jardiance is the number 1 prescribed pill in its class. Jardiance can reduce the risk of cardiovascular death for adults who also have known Heart Disease. That means jardiance can help save your life from a heart attack or stroke. Plus, jardiance lowers a1c and it could help you lose some weight. 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Retirement, were going with a longterm play. Makes sense. Pet insurance, wait, let me guess. Flea flicker. Yes howd you know . Studying my playbook . Yeah, actually. Dagen shakeup with Jeffrey Epstein died, Cheryl Casone. Cheryl warden has been on leave, checking on epstein every 30 minutes and maybe they were not. Guards fell asleep on the job as well. Fbi agents conducting sweep of the jail, thats today. Investigating office shooting, several shots fired at the building in san antonio, as you can see agents believe the gunman knew exactly where to aim, there had been at least four antiice attacks across the country in justless than a month you viacomm and cbs shows, an attempt to take on netflix and huracanes hulu, joining forces with mission impossible, that should help the company take on the marvel, dagen, the question here theres so much competition with netflix, and thats the question this morning. Dagen thats okay, you call me disney dagen. 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Dagen breaking news right now, the yield on the 2year treasury and 10year treasury yield, that part of the yield curve inverted for the First Time Since 2007, so what does that mean, it means that the twoyear yield is higher than the 10year yield, that turns the world of banking upside down and also historically since world war ii, its been a pretty good indicater of recession, this happening this part of the yield curve inverting for the First Time Since 2007, that was right before the financial collapse. Thats taking the Broader Market down with it, joining us Global Investment chief market strategist, victoria fernandez, victoria, what do you make of this . We knew it was probably coming, but im not sure its a recession signal at this point in time, i know historically it has been but we are, what, a basis point inverted at this point in time, lets see if we get more relief coming, cpi numbers higher than expected, if you look at the trending cpi, 2. 8 annualized on the number, maybe that push it is longerend up a little bit going forward, i wouldnt make a recession call but definitely something the press will be watching. We talk about the Federal Reserve needs to act, needs to take funds rate 2, 2 ant and a quarter, 1. 6 , with the consumer crisis going up yesterday for the second straight month, thats the strongest 2month gain in more than a decade, so is the fed in a bind or not . I dont think people are worried about Price Inflation at this point in time, Inflation Expectations very well contained, if you look at treasury bond market, expected rate of inflation over the next year is running at about 1. 5, 1. 6 , this recent gain, i think its going to be a brief jump by the cpi is not going to prevent the fed from responding to increase risk of recession, thats on the front burner inflation way off in burner in some place. You know whats interesting in inflation side, healthcare inflation actually went up and thats a broad concern because we actually have an aging pop ulation we see housing go up in rate of inflation, i keep my eyes wide open with whats going on, not only the inverted yield curve but also copper has been exceptionally, coil has been exceptionally weak, would all the things in aggregate, i say, okay, i need to get more defensive, data centers, cell phone towers, Distribution Centers, thats how ive positioned portfolio, victoria, i dont know where you think investors should be, given the concerns, thats where i want to be. Dagen we will get macys earnings, walmart sales tomorrow, with that is the backdrop to kevins question, how are you allocating . Sure, consumer has been the key the whole year and we have been talking about that and obviously Department Stores are in trouble, talking to clients, they are saying lets find opportunities in the market, whether its a global dividend, whether using options to take advantage of volatility in the market, we are longerterm investors, dont trade on the headlines, longerterm outlook, put some more value, core positions in equity portfolio, i wouldnt go full on defensive because as we know it only takes one tweet, it takes one event to have market shift. Dagen this is somethin