Energy, you name it, and it happenedn a relatively quiet day that saw the bond market continue to flash a recession signal, an unusual phenomenon we have been telli youbout. Today investors brushed it off so here are the closingth numbe. Dow jones industrial average added 258 points to close back above 26,000. The nasdaq gaine 29 and the s p 500 was up 1. But what will it take for the bullo stay in charge . Bob pisani put together a checklist. Reporter bulls cant wait to get out of august. Theyre hopeful for more stanl Global Economic data, more help from central bank easing, most importantly no radical downward revisions for the earnings estimates in third a fourth quarter. Earnings are the key, and so far other than notable downward revision in energy and materiars, flattish for the s p 500 remains the buzz word for 2019. Thats good enough for the market. But the bears have plenty of. Ammuniti trade wars are hurting growth and those earnings, and now lower yields have emerged as the new big worry forey traders. E fretting it is a sign of even more global slowing. This. S the problem with how can you worry about lower yields and at the same time home reCentral Banks going to lower yields even more . Out . O you figure that Central Banks may not be the help the markets thought they would be. Finally, even on an up day theres a growing list of new lows down here, including industrial and material names like 3m and fedex and caterpillar, shreveport mac brand. All of these companies, what do they have in common . Heyre all tied to the global economy. For nightly Business Report, im bob pisani at theexew york stocange. A Federal Reserve official said today that the central bank is monitoring the impact of last months Interest Rate cut. Richmond fed president tomno barton gav clues about the future path of rates but he said theomestic economy appears to be strong but International Economies are weaker and uncertainty ised elev especially when it comes to trade. And today more than 200 Footwear Companies urged President Trump to cancel the proposed higher tariffs on chinese imports which te effect next month. The Industry Trade group said theariffs act as a hidden tax that will hike consumer prices. While duties on some chinese imports were delayed until december, the majority of footwear lin face an additional 15 tariff on september 1st. Chinese Telecom Company teawei remains at the center of the trade dis between the u. S. And china. As you know, there are restrictions on u. S. Companies when it comes to doing business withhuawei, which the white house says is due to National Security risks. Well, today w were reminded once again of its importance. Eunice yoon is in beijing for us tonight. Reporter 130. Thats the number of applications the u. S. Commerc department has reportedly received by American Companies looking toontinue to sel to huawei. Sources tell reuters that theis trump admation has not yet decided on whether to grant the licenses with progress on the trade deal so uncertain. Huawei wont comment on the report except to say that the compan t hopes u. S. Would take it off the black list and end what huawei describ as unjust treatment. Meanwhile, beijing is indicating it doesnt want to pvoke the white house with its currency. A central bank setf the value the yuan stronger than expected for the second day in a row, suggesting it wants to keep it stable. Separately, theres been an Interesting Development on the political side that could verff wellt the trade talks. Just in the past couple of days ee state media h has started using a title for president xi jinping we normally dontit see. Suggests that the person has iritual authority b combining pope and president into one. People here are seeing this bad sign for a trade deal, because with this new title how can president xi jinping be seen making concessions to the u. S. . For nitly Business Report, im eunice yoon in beijing. British Prime MinisterBoris Johnson today moved to shut down parliament for several weeks. This is in an effort to push through the uks exit from the European Union, even without an agreement in place. A socalled hard brexit is what economists are concerned about, saying it could disrupt the global economy. And in italy its political parea struck a to form a new government that sidelines that haearightr. This could mean that italy adheres to the trade blocs strict fiscales r as you might know, italys debt load is one of the largest in the rozone. Back here in the u. S. , the consumer has been holding up pretty we, helping power the economy. But a closer look now shows that the wealthy a consumers actually starting to spend less and it is creating an economic split. Robert frank has details. Reporter for most of the pa decade the wealthy consumer was strongest and the working class lagged now the economy has flipped. The highend segments of real este, art and cars are now the weakest and the walmart economy is the main driver of u. S. Growth. Luxury real estate is having its worst year since the financial crisis. Sales ofri homes it at 1. 5 million or more falling by 5 in the second quarter. There is now a threeyear supply of mansions and luxury homesn aspen, the hamptons andmi m retailers to the 1 are falling behind walmart, costco and target. Barnys filing for bankruptcy earlier this month. Nordstrom posting three straight arters of declines, and Neiman Marcus seeing its first sales drop in sev years. Art auctions are down between 10 and 20 this year, and at the annual pebble beach car auct mn this monthe than half of the cars priced over 1 million failed to sell, while cars priced under 75,000 sold for far morehan their estimates. Spending by the ultra wealthy is now below 2017 levels, and the share of National Spending by the top some is actually highincome consumers pull back further on their spending it will be a significant threat to the economic expansion. Other economists are less worried about the falloff, saying it is typical for thege late s of an economic cycle. At the beginning of the cycle it is great for the wealthy. You haveuge profit gains. You have a roaring stock market. Collectibles go up in price dramatically late in the cycle, joe sixpack gets money. You get rising wages. The Unemployment Rate for minorities and low lowed ated people goes down more than for other people. So the economys in a natural rotation. Reporter either way, spending by the wealthy isen dr by confidence and certainty. Theyre not finding much of either in todays globa economy. For nightly Business Report, im robt frank. So there has been a lot of talk in the past few weeks about recession warning, whether it is record low Interest Rates or that yield curve invasion, and noecline in spending by wealthy consumers as robert just mentioned. How reliable are the indicators . A recession on theorizon or not . We have bill lee joining us, chief economistt the milken institute. He says he does not belve it coming. David coming with cora advisors says he sees a recession later this year. Bill, im going to start with you. You see the yield curve inversion as a bullish sign. How so . Everyim the yield curve has inverted in the past it is because the fed has been drivino up rates try to slow the economy down. This time the yield curve isve ing because a lot of money from around the world is coming to the United States because the united stes is where the highest returns are because capital can be used most productively here. Ay bullish sign everybs coming here because this is where the growth is, this is where the profits are, and this is where all of the returns will be. David, what s what are you looking at that says maybe a recession next year bill, two quick points. One, we have not solved the Business Cycle. We will get recessions. Second, i believe in the curve. And when you look at it the way i do, shortterm rates, fed fd rates, 2. 1 . The tenyear treasury at 1. 5 . Yes, the tenyear treasury has come down, but fed funds have gone up from the zero level. We have had the equivalent with higher fed funds and fed reducing its Balance Sheet by anywhere from 300 to 350 basis point hiken the underlying fed funds rate from the blow point, includhe Balance Sheet reduction. Inverted yield curve, nine o of tenimes it has a great batting average, it gives us a recession. We simply dont know exactly when, but think it is within a year to a year and a half. Bill, ove to you now you know, the Economic Data does in general look strong, but we ar seein slowing in the manufacturing sector. Some say that manufacturing is in a recession. As robert frank just reported, the wealthier consumer is starting to kind of pull back a lidnle bit. Wo that slow the economy . Absolutely. In fact, we have a global wowdown going on. The question il this translate into a metastasized slowdod in the unitates. Right now the thing that holds it back is the consumer. Roberts report is showi that even the consumer is starting to feel what is called the weah effect. The stock market volatility is causing wealthy individuals to say iay n be as wealthy as i thought and i better start saving more. Will tha then translate into labor markets where Companies Start to layoff people . They start to cut back on hours. If that happens, truly you will get a slowdown in the United States and possibly a recessiono but far we have not seen any evidence that the regular man, the working stiff who is going to work every day is going to have a layoff ahead of him in the next six months to a year. David, we shod point out youre not talking about a financial crisis like we saw ten years ago. Heavensno. Whatind of recession would you see this time around . Well, im a Portfolio Manager first and foremost. People never forecast dire recessions, as we saw in 2008, bill. Scale e on a one to t it is about a six, where you get worried is in the corporate sector. I think debt levels started to get too high. At the public secr level, even higher than that. The consumer is in very good shape. Ery umer Free Cash Flow is healthy. At the end of the day it is about a mild to average recession with the key being we never know exactly what r thek is thats going to create one. But i think we havent saw the Business Cycle and we are going to get gee. Lemen, we will leave it there and see what the fed comes upcoming in september. Ha this discussion onceagain. Thank you. Thank you. David saurby with cora advisers. Time to look at todays upgrades and down grades. Papa john was upgraded from buy to hold. The analyst t cited new ceo hich we told you abo yesterday. Price target now 60. The stock rose 5 today to 50. 40. Auto desk was downgraded to under perform fro neutral at bank of America Merrill lynch. The analyst cited the software companys disappointing outlook. Price target, 127. That stock dropped more than 6. 5 today to40. 08. Monster beverage was name add t pick. The analyst cites the new product called rain. The firm has an out perform rating on theit stock. Gained more than 2 . Jet blue was named a catalystca , meaning it is a short Term Investment idea. The analyst says the 15 pull back in the stock over the past three weeks provides an attractive entry point. The firm noteset blue has a good Balance Sheet and solid market positive since. It the sto gained 1 to 16. 75. Still ahead, tariff squeeze. Why tariffs are making wlis his makers tipsy. Brown foreman reported t bettn expected earnings for the ninth straight quarter. Thats the good news. The bad news is that revenue missed estimates, reflecting the impact of tariffs which the company says weighed on its in ma it is not just the big spirit makers that are caught in the middle of the tiff war, b smaller ones as well. Frank holland has more. Reporter american whiskey, like ing iconic brand jack daniels and jim beam is on the front line of the trade war. Tsu. S. Expor falling about 20 since the European Union placed a 25 tariff on the spirit in june of 2018. Nearly 60 of u. S. Whiskey exports are sold there. These duties part of a retaliation to u. S. Steel and aluminum. The tariffs are the biggest thinec affng us. We ants mate ticipate bottom li beffected throu q2. Reporter the ceo, the owner of the jack daniels brand, emphasizing the impact during ale european tariffs costs them more than 125 million. G it is havn impact on investment here in the u. S. It is havingn impact on Great American brand. Reporter the trade group for the u. S. Distilleray san escalation of the trade dispute could impact as many as 78,000 jobs. It is ending a 20year whiskey boom for u. S. Producers. Since 1997, 1998, the u. S. And europe has really enjoyed free trade with distilled spirits, prompting 300 growth for american whiskey to europe. Reporter scott harris, owner of a distillery, was banking on the row bost marketbohen he ht labels and bottles to meet eu regulations. They cant be used domestically and he says it is impossible to replace the 11 of sales he m in europe. The tariffs in 2018 pretty much decimated that we ended up with zero. Reporter he is rethinking a Million Dollar investment in new equipment as part ofxpansion plans. For now he is trying to hold on to the few customers he still has in europe. For the past year weve been slashing prices and payg the riffs ourselves to try to, you know, sort of maintain whatever market share we have over there. But thats a very expensive prospect, essentially we are losing money on all europe sales we might have. Reporter it is money lost w, but possibl customers lost forever as they find new bottles to make their old fhion. For nightly Business Report, im frank holland. Tiffany sales are mixed, and thats where w begin tonights market focus with the luxury jeweller seeing a d doubleit increase in spending in mainland china. Overales were not as strong as expected as protests in hong kong disrupted business and tourists in the u. S. Spent less money as well. Hong kong, by the way, is tiffanys fourth largest market. Shares rose 3 today to 85. 17. Cosmetics maker cody raised itnnl forecast citing turn caround plan including cos and increased advertising. The Company Reported a wider than expected lo. They wer hurt by a 3 billion write down in the value of the companys consumer beauty brands. The shares rote 6 to 9. 33. Retailer movato faced what it said were a slew of challenges in the past quarter including a volatile global environment, currency headwinds and the impact of the china tariffs. That caused the company to miss earnings and revenue estates an cut its fullyear forecast as a result. Shares tumbled about 15 today to 21. 22. Toyota will beeaming up and forming a Capital Alliance with fellow japanese automer suzuki. The two companies hope the pairing will help speed up development of new technologies such as autonomous cars. Toyota shares were down a fraction to 130. 29. Hershey brand plans to buy one brands in a deal worth 400 n dollars. The chocolate maker says this acquisitionst wilngthen its foothold in the snack business. It was up a fraction to 160. 48. After the bill williamssonoma reported better than expected erjs and revenue thanks to its increased sales in west elm and retailers. N the shares were volatile in after hours trading. They clo rd theular session up a fraction at 68. 78. Ag mor rates rose slightly last week for the first time sincat midjuly. Caused refinancing applications to drop off, but right now homeowners areti actually s on a record amount of equity that they could tap through ana rence, forpl ex diana olick breaks down the numbers for us. Reporter you dont need to live on a farm to be sitting on a cash cow. Homeowners today have a collective 6. 3 trillion dollars worth of capital equity. Thats theld amount they c pull out of their homes in a cashout refinance while still remaining 20 equity, and thats record according to black knight. Tapable equity grew by more than 335 billion during the secondr quarf this year thanks to rising home prices. Roughly5 million mortgage holders have it and half of them have Mortgage Rates higher than 4. 25 , making a refinance not only possible but attractive at todays lower rates. While low Mortgage Rates haveed ca refinances to rise this year, a lower share of borrowers are pulling cash out. S so theyre simply gun shy from the big recession when home priceslunged and millions of borrowers went under water on mortgages, owing more than their homes were worth. Otrs say it is due todays relatively strong economy. Av savings increased significantly since before the great recession, and so the household Balance Sheet isn a better position and perhaps the need to tap that equy is a little lower and theres more discipline among consumers. Reporter borrowers may be eyeing home ices, which while still growing are doing so at about half the pace t y were laar. For those that bought homes in the last five years when prices were red hot, the risk of pulling equity out is higher and may not be worth the extra cash in hand. For nightly Business Report, im diana olick inn. Washing coming up, game changer. Meet the man who created a Video Game Company unlike any you hav