All that and more on making money. Charles the markets essentially flat. All eye what is happens next, in the first phase of this u. S. China trade truce. Both sides say there is more work to be done. President trump says in fact he could sign a deal with President Trump summit in chile. Treasury secretary Steve Mnuchin says there is deal in principle and what is coming in store for next couple weeks. There will be deputy level calls this week. There will be principal level calls next week with ambassador lighthizer and myself and the vice premier. Those things are planned. I wouldnt be surprised if there are deputy level meetings in person. Our expectation well meet with the vice premier before the president s meet in chile to finalize any issues. We need more inperson meetings done obviously well do that. Charles coming collapse of china author, gordon chang. First your initial assessment of the agreement we saw on friday . I dont think there is really an agreement, charles. What the United States senate would do, not increase tariffs scheduled to go into Effect Tomorrow from 25 to 30 . You know, that is a real big concession. What we got in return is a promise of a deal with china. The terms of that promise are not yet defined. One thing china really got out of this, charles, people are not talking about. When everyone knew there would be some sort of a positive announcement as people think. Retailers started placing their big orders for next season with china. Those orders would have gone elsewhere except for the good news. Beijing has gotten everything it wants. Charles you mean from friday to today . No. Actually before friday. Wednesday and thursday, retailers started placing their orders. That means, beijing has harvested everything it could get out of this. So it will be difficult dealing with them between now and chile. Charles the administration mentioned ip. Financial companies doing more business in china. There is obviously the big soybean purchases, perhaps, scaling up over the next year or so up to 50 billion annually. What do you think those . Are those okay in your mind . Are those positive steps towards a potential deal . Of course if all of those actually come true, if the chinese actually honor their obligations, that will be great. What people are focusing now are the ag purchases. President trump talked about a 40, 50 billiondollar purchase. Didnt specify a time frame. That is lets say in a year. Thats great. The problem is chinas news agency immediately after President Trumps announcement came out that is official beijing by the way, said well buy, but only buy according to our national needs. So they said, look the details have to be worked out which is chinese speak for no deal. Charles the next move though, do you feel both sides are trying to move needle, particularly, seems like both sides would like to meet fenn, perhaps principles getting together in beijing or in chile perhaps before a potential meeting between the two president s . I think both sides would do a deal the both sides would like one. Imports, export as few hours ago were disasterous. The most important thing, imports were down 8. 5 Something Like that. Which is beyond anyones expectations this shows very weak domestic demand. The chinese economy is going lowers than ours. Charles ability for their consumer. They want to make a transition to consumer led economy. That is not happening. Real quick, editor of the global times, he put out a tweet that i think kind of helped the market a little bit today, saying that the china trade talks may break through last week. That the two sides have the strong will to reach a final agreement. The initial statement from china you referred to is moderate, yes, but that is a chinese habit. It doesnt mean chinas real attitude is not positive. Most people say this is a source direct to beijing. When this is a source speaking for xi. If that is the case, how should we read that . I think that is positive. If you want a trade deal. I dont, but if you want one that is positive. Global times is controlled by peoples daily. The peoples daily is the most authoritative publication in china. Global times is not official. It is the nationalist tabloid. That is where beijing tried to float things if theyre trying to float positive outcomes, that is where beijing is going. Charles dont go on vacation. Well need you around here. Thanks, charles. Charles stocks up changed in mostly mixed session. Optimism is more or less fading. Wall street to a degree changing their perspective looking ahead. I want to bring . Jeff saut. No one is saying it is, President Trump calls it a deal. But i think probably the better way to say it, potential agreement. For me i think it shift as narrative towards maybe getting to a deal which i think is the best wall street could have hoped for coming into the last week. Yeah. I wouldnt disagree with that, charles. I think you have the right word. Its a truce. There is not huge deescalation as of yet. Gordon pretty much nailed it on the head for his comments right before my hit. I think its a step in the right direction. I agree with him. I think trade negotiations are far from being completed. Charles from an investors point of view, how do you handicap this now . In other words, how do you, what adjustment do you make or have you made, just based on what we do know . Well, i still think were in a secular bull market. I think earnings will come in better than people think. I would be surprised if earnings are down 4 . I think theyre more likely to be flat, to up 1 . And i think earnings are going to strengthen as we get into the back half of the year, the first part of next year. I think the secular bull market is alive and well. I think it has years to run. Charles what are the key underpinnings for your bull market theses . I think the trade tensions will ease eventually. I think earnings are going to reassert themselves. I think the economy will pick up. I think there will be no recession. I think people have been running around crying for recession past two years are going to be just wrong again. I think people are still scared to death. That is not the way bull markets end. Charles speak of which on friday, the Consumer Sentiment report was remarkable for many reasons. Not that it rebounded and beat the street. If you look at nuances, jeff. The American Consumer smart, they know all the issues. They talk about trade, impeachment, even General Motors strike. They know all the issues. But feels like wages, job security, is really the underpinning here to everything . I agree with that. If you notice that wayne growth has been improving over the past 2 1 2, three years. I think that put as smile on consumers faces. Now if you will have a good christmas selling season. Charles where do you think now, with these earnings . Bank earnings are out tomorrow. I looked at goldman, jpmorgan, citi, wells fargo beat last time out. A week later all stocks were lowered on first day of trading. Many people say financials have to play a key role. They have not. They have not lived up to the hype a long time. Large cap banks and regional banks are up the same . Up same amount as s p 500. You saw a steepening into the yield curve last couple weeks. That is move for the financials. As i said, my father used to tell me, good things happen to cheap stocks. Neil okay. Where are the cheap stocks. A majority of my market guests jeff, tell me the market is expensive. I dont think it is expensive here. I think forward pe at 23 is expensive not under 17. I agree with that. A fair market multiple in this Interest Rate environment is 19 times earnings. If you want to take ed yardenis earnings next year, 177, 178, run a 19 multiple on the number youre talking substantially higher on s p 500 by the end of next year. Charles circle back to where we started for investors watching, concerned about how china may play into their portfolios, dont make any real changes youre saying . I think you should be pretty much fully invested. Charles jeff saut, always appreciate it. Youre one of the best. Thank you, charles. Charles later in the hour, the question is the financial medias displeasure with President Trump so intense theyre scaring individual investors out of the market . Wait until you hear the numbers. Bernie sanders trying to out socialist Elizabeth Warren by naming her as capitalist. That is fighting words. How far can the democrats go. Herman cain has a few thoughts on this. You know wont be holding back. Well be right back. Banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. They all lead here. Cme group how the world advances. Its been reported that theres a cyberattack on business every 39 seconds. Ouch. I dont even want to think about it. Comcast business has a solution. We go beyond fast with a cloudbased Security System that automatically updates, so you always have the latest protection. Phishing. Malware. Risky sites. It can help block all of that. Its one less thing for us to worry about. Comcast business securityedge automatically protects all the devices on your network. Call 18005016000 today. The lexus es. Every curve, every innovation, every feeling. A product of mastery. Lease the 2019 es 350 for 379 month for 36 months. Experience amazing at your lexus dealer. Now you can, with shipsticks. Com no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. Sending your own clubs ahead with shipsticks. Com makes it fast easy to get to your golf destination. With just a few clicks or a phone call, well pick up and deliver your clubs ontime, guaranteed, for as low as 39. 99. Shipsticks. Com saves you time and money. Make it simple. Make it ship sticks. Charles it is becoming the battle for the far left of the democratic party. This as senator Bernie Sanders comes out swinging. He is returned to the campaign trail following his recent heart attack. He unveiled a new plan underscoring his socialist views, including raising Corporate Tax rate back to 35 . Then there is a billionaires tax, could say, look at this chart, folks. The top rate could be 97 . Here is the kicker, he is calling out Elizabeth Warren for the first time saying she is not socialist enough. Well, not a label. Elizabeth considers herself if i got the quote correctly to be a capitalist to her bones. I dont. The reason i am not, i will not tolerate for one second the kind of greed and corruption and income and wealth inequality and so much suffering going on in this country today which sun necessary. Charles we got a capitalist to talk about this. We have the best. Herman cain joins us. Herman thank you. Good to be with you charles. Charles did you think you would see the moment saying its a different qualification to be president of the United States because youre a capitalist . I never thought i would see it in my lifetime. The thing about bernie and his accusations they are all false. He talks about suffering and inequality. It is not as bad as he makes it out to sound. You have people who have not applied themselves, who may have not taken risks. That is what the wealthy has done. About Bernie Sanders. Elizabeth warren is more of a capitalist than he is, he is dead wrong. Every time each of them says the word free, that is a tax increase. And heres the other part that you alluded to in the opening, they want to add an additional tax on wealth, not just a taxes that you are entitled to pay under the current Internal Revenue code but they want to add an additional tax on wealth. The other thing that they fail to realize, both of these socialists, and only difference between the two is the degree. But theyre both socialists. Neither one of them are anywhere near being a capitalist. They failed to understand and underscores the fact that there isnt enough tax on wealth to pay for all of their free stuff. Period. Charles i get the sense they probably both know that. To sell it for public consumption, it is so much easier to point fingers as those evil rich soandsos, who wont share the wealth. Politics of envy itself hasnt been new. I dont know if in my lifetime i seen it to this degree. This is class warfare at its highest. Every time one of them proposes a plan, the other one proposes a plan with a higher rate. It is class warfare at its highest. Now the good news is, most of the American People that have a thinking brain are not going to buy this. They know there is no such thing as a free lunch. Theyre not buying all this malarkey. Here is one other piece of good news. Neither of them have gotten the democrat nomination yet. I doubt if either one of them is going to get it. You have to president to try to force these lunatic ideas down the throats of the American People and neither one of them is even close to becoming president yet. Charles i want to ask you about a piece in the New York Times from mark benioff, saying we need a new capitalism. He is a very successful businessman. Ceo of salesforce. Com. He is suggesting, these kind of articles lend credence to the notion there is something wrong in the system, even when someone like him can succeed and become so wealthy . Well, there is no such thing as capitalism light. Thats what he is proposing. Capitalism light does not exist and even though he has made his billions he is now coming up with all of his ideas about how government, not the private sector, can now impact giving us capitalism light. It does not work. I believe in capitalism. All you have to do is watch my documentary from poor to ceo and you will see how somebody like me came from a poor situation. The other thing that he is proposing is that corporations need to be more compassionate to all of the stakeholders. I got the news for him. I served on six corporate boards. Whirlpool, hallmark, true value, from the inside. They all are concerned about all of their stakeholders. There is no such thing as no compassion because corporate ceos and executive management teams realize they have to be compassionate about all of their stakeholders or they will not succeed. The myth that they are not concerned about all stakeholders is just that, a myth. Charles herman i did a little work, maybe it is feeling guilty. The company has 14 billiondollar market cap. 35,000 employees. General motors has 173,000 employees and their market cap isnt that much bigger. Maybe he is feeling guilty he is so rich. But i hope he doesnt take it out on us. Right, right. If he wants to give his employees more money, go ahead. We will not object. Charles we wont. Herman, always a pleasure. Thank you very much. Appreciate it. Thank you, charles. Charles later Elizabeth Warren is not only duking it out with Bernie Sanders, details on her upping the battle with facebook ceo Mark Zuckerberg. Just who is going to win that one . One fed president says he is sick of wall street whining. He doesnt sop there. He slams the bankers with their hubris and stupidity. Is wall street full of entitled bullies . Thats next. 2,000 fence posts. 900 acres. 48 bales. All before lunch, which we caught last saturday. We earn our scars. We wear our work ethic. We work until the works done. And when it is, a few hours of shuteye to rest up for tomorrow, the day well finally get something done. and i. Was. Take shocked. Test. Well finally get something done. Im from cameroon, congo, and. The bantu people. New features. Greater details. Richer stories. Get your dna kit today at ancestry. Com. Oh, wow. You two are going to have such a great trip. Thanks to you, we will. This is why voya helps reach todays goals. All while helping you to and through retirement. Can you help with these . Were more of the plan, invest and protect kind of help. Voya. Helping you to and through retirement. Charles minneapolis fed president Neel Kashkari is tired of wall street whining. In an interview with axios his impatience with wall street bankers that i had the whining and that traders are to blame for the liquidity crunch. Kashkari goes on to say banks are supposed to plan for their own liquidity needs. They did not do that adequately. Now they are complaining because they failed to plan. I want to bring in monica mehta with me. Is it fair to say wall street has become too, that the Federal Reserve has become too much of a crutch to wall street. Maybe there should have been more planning on wall street . Not to defend the greedy bankers too much, were going through unusual times. Just between january of 2018 to august of 2019, the fed pulled out 650 billion from the system. This is in response to putting trillions of dollars in from quantitative easing. So, you know, what were seeing in the market now might suggest that that movement happened too fast and they do need this liquidity to make the system more smooth. Charles i dont disagree with you on that but you can certainly argue who is dr. Frankenstein and who is the monster here . Those are fighting word from kashkari. Charles they are. Listen, Neel Kashkari was part of the architect of the bailout. He has been there. He understands. The fed, for instance, paying banks not to lend money. Things like that. It is easy to get used to that if youre a bank. But again, why, why does wall street always come to the front of the line . You know they sell all this junk. The world is on fire. And the fed creates all of these programs in addition to printing all this money. This is all noise. What you saw in the repo market no way this would be one off event. How responsible for a bank to see money market rates jump from 2 to 5 , equivalent lending rate, for them not want to hold back a little bit to make sure they have sufficient reserves . Even what we require of banks has changed. They have to keep more money on their balance sheets. A lot of things are changing. What weve seen over the past decade with the fed, with quantitative easing this is not business as usual. Up winding this will not be perfectly seamless. Charles when i watch the markets, a lot said about President Trumps tweets, visavis jay powell. I watched the markets in my career, push around the Federal Reserve. Most recent example, janet yellen raised rates after zero rates. Raised them 25 basis points. Late december. Following two weeks were the worst january in history. Sometimes wall street is, even if we blow this whole thing up, we make sure you never do that to us fenn. She didnt. She waited until after the election of President Trump. It has to happen at some point. We added from 2011 to 2014 we added 2 trillion to the balance sheet. You have to undo that, or create a larger simmic problem. Could you argue, wall street, crazy moves, going into fed meetings, overreaction, particularly the day the announcement is made. That it is designed there specifically to do, they argued yeah, it is probably over exaggeration. It is probably wall street having fits, you know, but serve as greater purpose . It feels like everything is getting politicized. Every corner of every aspect of life is politicized, included what is happening with the fed. Having lower Interest Rates will benefit stocks. Of course they will fight for that. He aint taking it. Neel is pushing back. He is pushing back and got fighting words. Charles serious fighting words, thank you, monica. A knew Group Targeting voters uneasiness about the impeachment and the economy. How concerned should democrats be concern about this . They should. President warren flipping the script on facebook using the social Media Companies rules to diss its own ceo Mark Zuckerberg. Wait until you hear those details right after the break. I wanted more thats why ive got the power of 1 2 3 medicines with trelegy. The only fdaapproved 3in1 copd treatment. Trelegy. The power of 123. Trelegy 123 trelegy. With trelegy and the power of 1 2 3, im breathing better. 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Battle royale between zuckerberg and Elizabeth Warren intensifying after facebook to look at it. Mark zuckerberg and facebook just enforced donald trump for reelection. If you click in, actually she says no that is not true. But what zuckerberg has done given donald trump free rein to lie on his platform and fay facebook gobs of money to push out their lies to the American Voters this stems from 2016 where facebook was accused of spreading miss information and some say swayed the 2016 votes. Saying facebook believes political speech should be protected. If senator warren want to say things she knows to be untrue. We believe facebook should not be in the position of censoring that speech. On twitter it intensified, we know elizabeth pointed to the ad that president Donald Trumps campaign pushed out on several networks, being refused on Nbc Universal and cnn in the ad, President Trump campaign made claims or disclaims on bidens h betweencially with ukraine. Facebook. This ad aired 1000 times on other broadcast stations across the country, nearly 1000 times as required by law. Were abuying by the fcc. Elizabeth warren says it is up to you whether you take money to promote lies. Warren facebook has grown louder with warren wanting to break up big tech. After leaked audio from facebook, that it would suck if the government and Elizabeth Warren would break us up but we think we would prevail in the end. Charles this is a battle royale. Thanks very much, susan. Joining me, rick ungar, from the daily caller, stephanie hamel. Stephanie, i have to start with you. Right after Mark Zuckerberg made comments about Elizabeth Warren and the suck thing he did make a statement a couple days later, no one deserves to be billionaire. It wasnt hard to argue that wasnt a brilliant move at her part . I dont necessarily disagree with Elizabeth Warren about breaking up tech giants but pretty rich coming from senator warren who cant tell the truth about her own past, nativeamerican heritage, why she was fired from a job because she was pregnant. She fact checked herself with a vintage video. Also facebook isnt known for being very kind to conservatives. There was a lot of evidence to suggest that the facebook platform was censoring conservatives. They said some of the gore algorithms had been tinkered with going against conservatives. They want free speech and dont want to interfee and i totally understand that. If you dig through any sort of political ads you can find a exaggeration, maybe even a lie on both sides. Charles that is true. Political ads, a whole lot of other things associated with the game. I love with Elizabeth Warren did. I thought it was funny. Television stations and radio stations have been running political ads for year, that lie. All of this is being shoveled on Mark Zuckerberg. Charles Elizabeth Warren seems to have an out for him personally. What is that all about . I dont know. I dont know if it is just discussed over the ads they were running and interference with taking place on facebook during the last president ial election. I wish they would do a better job over at facebook at the same time i wish tv stations and other stations do a better job from preventing politicians from either side lying. It would be funny if Mark Zuckerberg endorsed President Trump. I dont think that will happen. Charles you never know. More hearings held at the House Democrats continue impeachment inquiry. You know what, there are many sides. It featured swing voters. Axios put it together. Nine of the 11 participants were outraged over impeachment. They called it a distraction. Well, listen, what do you think, rick . It is interesting. Charles it is interesting. I read about the thing in ohio. In my hometown of youngstown, i know it was accurate. Charles good americans. Thats who they are. It was very interesting. It makes you wonder what to think about the polls. The polls are telling us a very different story, including the fox poll. Charles polls, theyre weighted certain ways. Questions are asked a certain way. They are. Charles i think it is better, you know, you know nancy pelosi has been concerned about this very kind of thing happening. She has been concerned about it, particularly with swing voters. I think there is another interesting question we need to confront quickly, that is, will they continue . Nancy pelosi continue to limit this to ukraine or is she going to unwind it. Charles stephanie, they have may have to widened to something feels like wheels of this thing is falling off. I cant keep track of all of it. I see a lot of people not necessarily political, not apolitical not as steeped in politics as we are, think maybe it is a distraction. It is absolutely a distraction from the issues Americans Care about. This ohio survey of swing voters should definitely concern the democrats. Im sure it does concern the democrats, hence, House Speaker nancy pelosi still hasnt taken the impeachment effort for a full house vote. That says it all. This impeachment effort is complete sham. It is fundamentally flawed. It is unprecedented. We have never seen tradition broken like this ever before. This is not an issue that should be taken lightly. Were talking about impeaching the president of the United States. This whole process should be transparent. American voters should know exactly what is going on. Charles stephanie, i could put you down as a no . A huge no. A huge no. Charles stephanie, rick, thank you both very much. Appreciate it. Thanks, charles. Charles disturbing data showing individual investors are fleeing this market. How come the same people who are brilliant consumers are so unsure as investors . One of the best in the industry will explain the disconnect. What she is telling her clients next. Its been reported that theres a cyberattack on business every 39 seconds. Ouch. I dont even want to think about it. Comcast business has a solution. We go beyond fast with a cloudbased Security System that automatically updates, so you always have the latest protection. Phishing. Malware. Risky sites. It can help block all of that. Its one less thing for us to worry about. Comcast business securityedge automatically protects all the devices on your network. Call 18005016000 today. Imagine a world where nothing gets in the way of doing great work. Where an American Icon uses the latest hr tools to stay true to the family recipe. Where a music studio spends less time on hr and payroll, and more time crafting that perfect sound. Where the nations Biggest Party store can staff up quickly as soon as its time for fun. This is the world of adp. Hr, talent, time, benefits and payroll. Designed for people. Charles recent drastic dumping of etfs and mutual funds seems to lack of knowledge about the market. Or lack of confidence about the stock market system itself. Bearishness triggering massive selling. Individual investors dumped 40 billion of funds. We have Edward Jones Investment strategist, kneel richardson. Your firm has a great reputation with individual investors. When i see this it breaks my heart. I think a lot of these people, the majority will regret this not not too long down the road. Why does it happen . Investing for the long term is very simple but it aint easy, right . It requires you stay invested through the market up and down. What our advisors, 18,000 advisors tell our 7 million clients, stay invested first and foremost. Make sure you have enough bonds and fixed income in your portfolio to lead you through natural volatility in the market. That is charles so you have people hedge ad certain way. Quasiinsurance policy are something to help you sleep at night when the stock portion diversification, having high caught across the spectrum class. Charles obviously a lot of people are not listening to that advice. Investor confidence. Lack thereof. We saw a big spike in bearishness. We saw from vanguard, their s p 500 fund, saw second largest withdrawal in the history of the fund. Something else is going on here. Im a little concerned when i read stories there is last week, for instance, leading up to the china is scuttlebutt by the trade deal. Market making 3 or 400 point swings. Often news that didnt materialize. If i have a smartphone, i look to see how china will not stay for the meeting. I see the dow down 300. I may sell. How do you fight against all the exogenous things that way beyond fundamentals . Headlines are everywhere. Investors want to act like a boxer. They want to bob and weave to avoid the punch. What really works, what is it really important to remember is fundamentals. When you still have a solid, growing economy. You have earnings growth, you can expect to see returns around 10 on average year. That is what history tells us. That is what we remind our clients to look past the headlines to fundamentals what really drives return. Charles volatility is picking up. Volatility is back to normal. That is another thing crucial about todays market. We were lulled into the calmness because 2017 and 2018 up until december was really, really calm in the market. It was charles market was up almost every day. Everything was going charles things are record. Exactly. Were back to normal. It feels be a normal. This is really what investing feels like. It is time to have broader perspective. Investing entails risk. That is the bottom line. Charles people should stay the course even if were back to normal, even if it gets more abnormal in a sense, even if we do have increased volatility somewhere down the line, it is worth it. Let me put it in dollars and cents for you, charles. If you pull out of the last two years after bull market youre likely to miss 25 year on year returns each year. So that is enough of a reason. Dont want to miss the good days avoiding bad days. Charles big banks failed to meet the earns hype. Many wonder if the quarter changes things. Uber announcing major shakeup at the selfdriving departments. We have major breaking details. Anna, do you yes those plans . I just wanted to show you something ive been wor. James r. And associates. Anna speaking. James r. And associates. Anna. [phone ringing] baker architects. This is anna baker. At northwestern mutual, this is what our version of Financial Planning looks like. Tomorrow is important, but youre ready to bet on yourself today. Find an advisor at northwesternmutual. Com. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of wireless network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Charles market has been back and forth over unchanged line all day today. This as traders continue to react to the prospects of a trade truce. Liz claman with preview next hour. Liz . What are we doing here . Like were jumping off of a pancake and climbing back on. Very tiny moves, charles. A lot of that may circle around the fact what happened on friday, where the president came out and said we have phase one of a deal, really trumpeted it, not quite square with months and months of promises of a really big deal. We have the trop trade visor, Michael Michael pillsbury. Specifically china trade. He has the president s ear. What should investors think about this . No more pulling the wool over everybodys eyes. That is how the markets are behaving if they dont believe it. Mark zuckerberg watched yet another company say it does not want to be a member of its crypto club. This is the libra currency project. Mark zuckerberg has watched this friday, mastercard, visa, now what do you see, priceline, parent of priceline, booking, kayak, priceline, theyre saying we dont want to be part of this either. So we have the ceo, founder of coin list. He will be with us. You have to see that. He is believer in libra. He is talking crypto and trade and all things dramatic or exciting as we fed into the final hour of trade, charles, it is not how it opens, it is how it closes. Charles it always did. These days has been a pretty wild close. Make sure to tune into the claman countdown 3 00 p. M. On fox business. What are traders saying as we head into the final hour of trade . I want to go to Kristina Partsinevelos on floor of the New York Stock Exchange with more. Kristina . A lot going on the floor. Earnings coming out, a lot of major markets are 2 away from the highs. A big question how are people going to make money. All the earnings are coming out. Investors generally applauding a type of moderate beat. These are things theyre mulling over. Obviously liz talked about with your guests on the show. The china trade deal whether that formalizes into a deal is a topic of conversation. Charles, im not sure, if throughout the show you did talk about the uninversion of the three month to the 10year . That sent a positive signal to the markets. That can with hold, that uninversion. Its a good sign maybe things are improving. But overall people are parsing over data, figuring out how to make money going into earnings season, especially with lower expectations. Charles i like lower expectations. Kristina. Set the bar low. Charles thank you very much, kristina. Well see you soon. Well have more on the markets when we come back, investors are gearing up for a slew of earnings. Well focus on big banks. The question will they finally live up to the hype . My body is truly powerful. I have the power to lower my blood sugar and a1c. Because i can still make my own insulin. And trulicity activates my body to release it like its supposed to. Trulicity is for people with type 2 diabetes. Its not insulin. I take it once a week. It starts acting in my body from the first dose. Trulicity isnt for people with type 1 diabetes or diabetic ketoacidosis. 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Fidelity now has zero commissions for online u. S. Equity trades and etfs. And fidelity also offers zero account fees for brokerage accounts, plus zero minimums to open an account. And only fidelity offers four zero Expense Ratio index funds directly to investors. With all of those zeros, there are zero reasons to invest anywhere else. Fidelity. So maybe ill win saved by zero charles the markets are moving sideways as we head into final hour of trading. The china trade war truce thats sort of grabbing headlines but also theres some anxiety as we head into Third Quarter earnings. Netflix reports on wednesday. Jonas ferris is joining us right now. What do you think will move these markets most this week . Will it be earnings . I think earnings are going to come in a little better than expectations so it should help the markets, but i dont think it is going to take away this investor fear that you see with the mutual fund flows, for example. Theres not going to be anything in the earnings that will make you know definitively whether were going into a recession. Im watching the financials coming out this week. I think they will do better than people expect because i think their Net Interest Margin is still good. I see them paying les on money that they take in and yet making loans at very high rates still, credit card Interest Rates arent going down. Mortgage rates are not falling as fast as Interest Rates. Im also looking for the trouble they are getting into in the tech sector with the overvaluation. I want to see what jpmorgan did, we works, money before their ipo and spending it lavishly. Ipos that are falling apart. Im more concerned about the exposure to tech than actual core business which is the regular loans to ordinary people. Charles what about the big banks, so important how well they trade quarter to quarter . Even in the most volatile periods in the last few years i havent seen banks capitalize on that. They are supposed to be the smartest folks out there. We have been pretty volatile here of late. Can that help them at all . I think they are sitting in a very strong position for anything but a very bad recession. Theyre more capitalized than they were they have their Business Models very tight. They are not taking a whole lot of risk again outside of the new tech that they might have overexposed themselves to. I think that will not be the area to avoid in the next recession even though typically financials are a place you want to avoid. Not a whole lot of rise in defaults yet except for some questionable loans, some credit cards, but it is not the jpmorgan and goldman, again, they are not growing very fast either so there are other longer term issues but their valuations relative to where were going to go are probably good. We will probably see some upside this week. Charles last quarter Goldman Sachs beat by 19 , up almost 2 a week later up less than 1 . Jpmorgan popped 11 . Unchanged a week later. Citi bank was up a percent and down 2 percent a week later. They cant hold the gains. I want to switch gears a little bit because it feels like the company that everyone is talking about for the week is netflix. Thats a hard one to figure out quarter to quarter, but the last lot more pressure on them now than ever before. Yeah, i dont think it necessarily represents the whole tech space because they are more in direct competition situation with competitors that make hardware, frankly, now apple, google, i just dont know how and yet their costs of making content which is all they have to have now to keep people from switching or paying for other services is very expensive. I dont see how they will ever be an extremely high Margin Company given that background, and i think investors are starting to get concerned about that there will never be profit margin to support this level of valuation. They show anything weak this week, it is going to be pretty negative for the stock which hasnt been doing that well either. But again i dont think that represents overall tech because their situation is kind of very specific to content creation and internet streaming. Charles although, you could see strange, you know, today Raymond James i think i saw like five firms lowered the target. Still up 3 1 2 last week. It is up today. Could it be one of these names that theres so much pessimism out there that if they do beat, you know, we could see a monster short squeeze take the stock significantly higher . We have seen it trade in big chunks before. It could. Its a very it was a very hot stock to trade too. Very volatile, done very well obviously from the launch, but i think theres enough fear about their future that even if they are good right now, theres going to be issues because they are only just starting to face new competition in some of these in online tv. Again, i think people will pay if they keep the content. If the content costs rise faster than they can charge consumers they will have longterm issues as well like a lot of Tech Companies with margins. Charles i feel like the idea there can only be one winner that space is probably false. I wouldnt be surprised whoever the winners are netflix will be among them. Jonas, thank you very much, always appreciate it. Thanks. Charles the dow essentially unchanged as i hand it over to my colleague liz claman. Liz thank you, charles. Tiny advances, minuscule declines indicate that perhaps the markets arent quite buying President Trumps declaration friday that the u. S. Has struck phase one of a trade deal with china. As you see, markets are mixed, but mostly to the red here, indecisive and toggling vaguely between red and green perhaps because what was announced on friday looks very little like what the president had said one week ago after the bell. That his inclination was to get a, quote, big deal out of china. Well, now the partial deal could mean between 40 to 50 billion dollars in ag purchases, but many of the other
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