spring, that was a mistake you will see the mark correct that, that's my final trade. >> josh brown. >> lucid comments, jim i want to mention j.p. morgan. if you look at where it bounced, 102, 103 that was the july low, exactly where the buyers did >> thank you, everyone have a great weekend we'll send you over to "power lunch. no deal with china a fed hike in december, is this going to be a powerful friday fade in that's all on the menu, plus, a bruised apple, trades down sharply lower. is the potential bombed? a slow down in china, giving out unit sales for our phones and tablets. they pounded florida's elections and your bottom line, "power lunch" starts right now. and welcome, everybody, to "power lunch." i'll tyler mathieson, glad you

could join us on this friday afternoon. stocks are slumping right now. session lows or tlabts, the dow down more than 63, more than 1%. s&p off more than a third% or 35 points, larry cut low on halftime, moments ago, putting cold water over the possibility of a trade deal with china and the nasdaq is getting hit the hardest, down one and two-thirds percent. apple is a major drag on the marks. as we have been telling you all day, the stock is on pace for its worst day now since early 2014 but starbucks as they were talking there at halftime a caffeinated ray of sunshine, that stock heating up this hour a 52-week high on the back of its latest profit numbers, we have more on this and more ahead. >> i'm steve leishman. we have team coverage of all the big stories, eamon javers alive in washington on china and trade and comments from larry kudlow,

jackie deangelis is on energy and stocks domenic chu with a wild look at wall street and the three big take aways beginning in washington withee mon yafrs. >> thanks. we saw larry kudlow the national counsel and director on cnbc with scott walker and the halftime gang. scott began by asking larry kudlow about a report overnight that suggested the president was asking his aids to draft some language related with a deal with china on trade. he asked him, did the president actually direct his cabinet secretaries to draw up that language there's how scott answered scott's question >> there is no massive movement to deal with trade we have already put out asks to china with respect to trade. we can do through that technology and add tariffs and so forth and so on

i spoke with the ambassador this morning. we are doing a normal routine run through of thing that we have already put together and normal preparation okay there is no mass movement. there is no huge thing we're not on the cusp of a deal. >> is normal preparations says larry kudlow, nothing imminent here >> that squares with what my sources have been saying i said it and three senior administration officials saying the same thing no indication there is a deal with china imminently. but this president does want a deal he very much wants a deal with china and mexico as a positive and big win for the u.s. administration and the economy he'd like to do something similar. the time horizon, though, not clear. we are definitely talking about a longer-term project for this administration >>ee is there some wiggle room, can the president have told somebody to drop a plan and

larry is right, there is nothing imminent are these contradictory ideas? is this only one >> reporter: scott asked ludlow. larry said, no, not specifically no, not specifically so did he ask them generally to do it? that leaves the window open there is preparations behind the scenes we have been asking cabinet agencies for indications they have for a china deal we're getting the same answer back from those folks, which is that there are always general preparations there is always language being drafted, there is always option and scenarios being considered but there is no increase in tempo. there is nothing to indicate something is coming. you are right, there is nuance, i think it's important to pay attention to that. they got over in terms of the futures in thinking there was some kashion that something was coming sooner than it perhaps is reports of no imminent trade

deal with china. that was aiding the friday fade on wall street let's go to bob pisani, the numbers are melting ail way a bit in >> so once again, the two issues that move the market we are dealing with today the fed and trade, what would help the mark in the rest of 2018? number one, it's nice that the fed gives some indication they will not hike as aggressively? how do you do that you have wage growth the fed has to keep hiking in that the bulls need to break through on something how about better global growth eh, we're not getting it the numbers weren't there for europe or china. and that leaves the wild card the trade break through. that's why we keep moving on this trade break through story >> that might make a difference with the market. look at the overnight, 2:00 a.m. in the morning futures move 20 points on a bloomberg story that perhaps there was some movement on the trade talks with china of course, eamon in the morning saying no trade deals are

imminent ludlow said we saw a slower leg down its trade that's the longer movement of the mark, along with issues with the fed. finally the last thing, i call the big cap mega-cap tech problem. these five stocks you are looking at, nasdaq 100 are if lag-- the lagers when these guys aren't doing anything, the rest of the tech market generally has a problem right now with apple down 7%, 13 in the market. nasdaq 100 can't possibly go area guys, back to you. >> thanks very much. let's turn out a jobs report a very strong jobs report. much weak inside to be seen anywhere in it did he get a snap back from hurricane florence in the weakness in september and can this strong in a moment item continue here are the numbers 250 on the top line there. we're looking for 188. quite a bit stronger than expectedful average wages up the story is year over year. i will get to that in a minute

labor force participation. here's the average hourly wage up 3.1%. that's not whether we're looking for there. it's there not sure why it is you are looking at the payroll totals of 250 the primary narrative with respect to labor market dynamics over the next year will be wage growth and the ability of firms to manage a historically strong labor market now, i can read you the numbers of where the jobs were, if are you on the radio, you can't see it it shows a lot of jobs in a lot of different places. we call that a high diffusion. that's good. so you don't have all the jobs coming from one place, leisure hospitality, good will >> that might have been a snap back the manufacturing is strong at 32 transportation warehousing at 25,000, oxford economics saying these encouraging readings have very little slack left in the labor market that's very important.

it will be of concern for the fed. how low does it let the unemployment rate go before it has a serious lean back against the momentum i wish the administration would not talk about trade so i can understand what is the market relevant acting to -- reacting to is it reacting to the trade or a hot jobs market? i can't run an experiment when two things are going on at once. >> i want your comments to larry's non-expansion. we have prices to the consumer by various companies >> i think larry is right to this point i think that right now we've had modest inflation of 2%, a little bit more, dpthd upon how you measure it, which gain you use it's been relatively quiesence you might have expected more growth and inflation i expect this could be right >> does that mean the fed could be dovish after raising in

december >> i this i that the fed wants to get to neutral. to me, the bigger question is what i asked there is does the fed need to lean against this let me read you the probabilities here 76% chance of a hike in december this is according to reuters icon a first hike it comes in march the second hike now, this is new now we're over the 50% mark for any second hike in 2019. 51 percent so that's too baked in we don't have the futures really looking out into for that third hike that's where we are right now. i'd expect that because we have such a strong economy right now. and i'm going to bring in right now. it says right here the chief economist with steefl. did i miss something was there a weakness you would point to that says i'm not so hard on the details in >> i think there are details,

impressive on the headline number, a two month high remember, this is coming after the lower number in a year in payrolls we are talking about the trend pace well over 200,000 in the past weeks wage growth did push back higher this is a talking point and the fed will look at this as further justification for a potential rate increase at the end of the year but we've also seen these one off data points, pushing off 3% or near 3%, then falk back down. when we look at historical cycles, wage growth has maintained a very positive trend well above 12% go back to the 90s, wages above 4% on a sustained basis. so i'd like to see wages maintained a prolonged positive trend as opposed to getting excited off one data point here and there. >> right you got to start somewhere all the indicators right? >> you do have to start somewhere. it's nine years into the

recovery this is a latestarting point >> but we only right now have this 3.7 unemployment rate i will say i averaged the last month 180. if it was 180 i would have said that's a strong jobs market. remember, the country is the creating work force at 70,000 a month. so what does that 19 it means we are making jobs that are more than double the entrance to the work force, which means we are soaking up slack. let's move it over to that thing. how much tolerance is the federal reserve going to have here for decline and slack in the job mark the way it's coming >> think of the unemployment rate, it's well bow low the designation of full employment since march of last year so we've seen this time of very low levels in terms of unemployment but it hasn't translated, bo positively correlated to significant wages. i don't think we can see this morning's report gets improved in wages if we look at metrics, third

quarter gdp. what disa deflator do? so i don't think there is a lot of inflation ken for the fed they're watching it. but the inflation drag-in doesn't seem to be lurking around the corner such as the fed need to be worrying about the accelerating for rate path increases. >> what do you make of how the market is reacting about this news of trade into us from is that an i don't have riding concern here, even more so than the fed? >> reporter: i think it is a concern, when we look at the implementation of tariffs and the retaliator tariffs from beijing, we are shaveing off about two to .3 of baseline gdp forecast if we continue down to an ugly all out trade war with the president slapping on duties of the remaining balance of the tune of $257 billion, if we anticipate retaliatory reaction from china, we could talk about shaveing off .6 from baseline

gdp? wow, that's a big number >> now we're talking big figures which coupled with a couple increases from the fed force the economy into recession sooner than later now we talk about the "r" word rapidly in 2020. here on set on the road ahead, the chief u.s. strategist at citi. you hear the foregoing conversations. what are your reaction to buys in. >> i have too many >> let's talk inflation first and particularly wage costs. wages are an input cost. >> they're 60% of corporate costs. so it's not an input cost. they are the most important one. so there has been this constant refrain, why haven't we seen wages grow faster, consistent? what i would tell you is take a look at the differential, i'm giving you a technical, u 6 and u 3 is the 3.7% we all know.

u 6 is something i don't understand for why they call it marginal attached workers. temporary workers that can work full team. companies have been ash travelletrave-- arbitrageed. it's something the previous speaker didn't discussion 3.1% ready. over time, that is one of the highest core lated things you can look at. it's been there since we had all of this technology coming in, last 17 years, what u.s. the it suggest? leading indicators, we will be talking 3.5, 3.6 wage increase in the first quarter. >> that's steep. >> that's something the market has to address and the feds have to addressf. >> i appreciate everybody saying >> it's a way for saying as slack goes down, wages go up >> but the way you look at the lack is, this has been the question, why haven't we seen

wages. >> in the temporary work >> so they've gone there as opposed to hiring. so let's talk about something else and that is the idea, we began this year with sort of a consensus. the phrase was synchronized global growth. i'm not hearing that so much anywhere >> no, actually i rested to that with investors as the kind of dream-like scenario this year, the sun is shining, the bird are chirping everybody is helping we got to 12% earnings growth on a pre-tax basis the reason i say pre-tax, i don't want to get confused on the tax cuts and how you dealt with overseas issues or tariffs it get very kind of won ky so in this wonderful world you described of synchronized global recovery, we got 12% pre-tax 23 are not going to get another

tax cut benefiting us next year. 12% seems high in emerging marks, some against europe, stronger dollar, higher interests spends that treat us and are too high to come down. to a certain degree what we started hearing from a number of companies during the third quarter is, yeah, estimates are too high we're guiding down, the market reacted, because etch was way too complacent about this. our indicators in september were showing we have a panicky model was in the euphorias the last time we saw it was january. we are worried, guys, there is some stuff out here, we have to worry about. >> volatility in terms of the euphoria level in the market in. >> so we're back in neutral territory. we're not in fear. i have been seeing investors two years straight almost. what i will say is people are asking me questions like, oh, at what price to you buy? what sector do i buy

i don't see fear orca pitlation. our models are saying the same thing. qualitatively, we're seeing the cob rakes if you like. they're shell shocked. i talked to one guy, he was up 17% three weeks ago. he is down 3% on his portfolio that's painful you mentioned a number of names in tech line i think people owe way too much tech still every rally will be an opportunity to go lower. i don't know if it's downside, there is lack of this wonderful ramp back up into feeling all good and wealthy i think that will take a little bit more time to build up that confidence >> all right guys, thank you. coming up, apple decides no longer to report apple sales numbers. is that a good or bad sign the three things sending apple shares lower today a mixed quarter for ali baba is the trade war and slow growth in coin having an impact?

bucking today's down trend, they come as crude oil hits its lowest level in april. we will drill down on that sector.

apple shares sliding more than 7% right now. key take aways from that earnings out last night, apple fell short on iphone shipment

estimates. the company offered below guidance for the debris holiday quarter. apple announces a major change going forward, they will no longer report how many iphone, and mac units they sell each quarter. walter, great to have with you us >> thanks mellissa >> what did you make of the whole thing? >> look, the quarter was fine the outlook for next quarter was not so great the revenue was light in terms of what people are looking for it's probably a unit issue given how strong it was for this quarter. iphones and macs were not so great. especially ipads they had a new refresh earlier this week. the iphone or macs can help next year few look at this past year, top line growth was 15% driven, 16% driven by the iphone >> that should probably subside, now you will have other products fill in the gap. i don't have all, revenue should moderate in the next year.

>> let's get right to the change in reporting apple will be doing starting next quarter. this current quarter, i should say. some people say apple is hiding something. as an analyst, walter, does this give you much less clarity in the sales, which is a vast ma joerlt of the revenues as a company, but also to how robust the services part of the equation is, balls you don't get a sense of what the installed base is and how it's growing or fought growing every quarter >> i think what they're trying to do as many people have talked about, get investment people focused on the services business the services business is 13, 14, now 15% of revenue, go him to 16%. it's still a small portion of the i don't have all business. i've argued the phone business is itself a recurring revenue business because your examiner base or your users are so loyal they're coming back every two or three years and upgrading the phone. but, look, without this additional information in terms of units and now asps, it will be harder for people to

forecast >> that injects additional uncertainty into understanding the future growth of the company. typically, when there is more uncertainty in stocks, they get a lower valuation. >> walter, the idea that they're not going to give you unit count remind me of sort of apple's general philosophy >> that is that we will give you what we know you need, not necessarily what you want. we will give you what we think you need be that as it may, i thought there was another version of the iphone that was just coming out a 10xr or something. >> that is notas high priced a the highest model is at a lower price point. the value proposition sound very good in other words, it does what the super expensive one does at a lower price and that that could goose unit sales, number one, and maybe appeal in countries like china and india, where the disposable income isn't so great. we can talk about that and also wearables, which i gather was a

bright spot. >> i think that's an interesting theory it was a theory last year when the phone aphone 10 was announced, people wouldn't want the high price the legacy products would sell more in terms of the unitings. you got this large diversification and the 10 sold exceptionally well and the 10 x max are selling well the 10r could provide some unifying. the bigger issue in terms of unit volume is people have been holding on to their phones longer than they have before long before the iphone was launched you had this peak year when iphone 6 and 6 s were launched it's been down ever since. so it's not new we are facing no growth in terms of unitles that's what's been the case for the past three years so to not report those units, to provide better relevancy or to get people focused on what you want, it hasn't been a problem for the stock in the fast the years. if anything, analysts can figure

out in terms of the asp and the direction it's going which products might be selling better or worse it's how we are forecasting the growth for the company >> so, walter, on the one hand you say apple deserves some discount for providing investor unity. on the other hand, off have the tim dock buy back programs in placements which one wins out, is there going to be givinging less information out in. >> it's that sharing purchase activity that couple years ago turned no growth into earnings growth now i think it will turn next year's 7% or so revenue growth into 15% earnings growth so that's earnings ultimately can drive the stock and the sharing purchase will help that. as far as providing a floor in the stock, apple trades a lot of shares a day they will buy whatever it is, $20 billion a quarter. that's certainly helpful but the bigger impact as far as the stock is concerned, it drives faster earnings growth.

>> walter, we will leave it there. all righty, coming up, baba under pressure under pressure shares lower, a closer look at what is fueling that phase next. '. they don't back down. they don't settle. and they don't quit... except for cable. cable? oh you can quit cable. because we are cougars and we don't quit!! unless what?!?!?! [team in unison] unless it's cable! quit cable and switch to directv and get the most live sports in4k more for your thing. that's our thing. 1-800-directv

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but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. ron! soh really? going on at schwab. thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms...again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? they will buy whatever it is, what is fueling that phase next. .

well col back to requested power lunch" shares of ali baba lower. what's the matter with them? >> reporter: steve, the china economic slow down is catching up with the company. the treat missed guidance and macro concerns these are front and center and a prospect of an escalating trade war with the u.s. popped on the head wednesday for many investors, ali baba and big chinese companies are effectively a proxy for the chinese economy, which is slowing. and amid trade tensions, they have been punished and this week they have been rebounding. what is real is the country's growing middle class and whether consumers are getting worried. ali baba's chairman touched on this earlier today

>> we think the consumers are fundamentally healthy. because they have of the last years, they have a lot of savings. there is real rage i wage growth then there is one point that is important to know is household debt is relatively low in china, it's 49% as opposed to 77% in the united states. >> he's optimistic ally baba's first quarter will be crucial it includes the biggest shopping event of the year in china mem lisa back to you >> deidre thank you in vancouver. coming up, help wanted construction workers in high demand but hard to find. what the industry is dng to oi fill the skills gap. that's next. here.

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hello, everyone, i'm sue herrera. here's your cnbc news update at this hour the trump administration announcing the reimposition of all u.s. sanctions on iran that had been lifted under the 2015 nuclear deal those sanctions cover iran's shipping, financial and energy

sectors. the florida man accused of sending pipe bombs to prominent democrats was back in court this morning. caesar sayoc waived his court hearing around agreed to face criminal charges in new york no word on when he will be extra dielted. a memorial service for saudi journalist jamal khashoggi was held in washington today family, friend and journalists gathered to remember the washington post contributor who was killed after entering the saudi consulate in istanbul a month ago. and usain bolt's bid to become a hockey mayer ended, after he failed to agree on a contract belmont had been practicing with the mariners and the team. you are up to date that's the news update at this hour, mellissa back to you. let's take a look at the session. we are holding on to a dow down by .9 of a percent

s&p 500 is good for a loss of more than 1% 2700 exactly was our inter-day low on the s&p and the nasdaq seeing a decline of 1.3% today experts say construction spending is expected to reach an all time high this year about $1.3 million the industry was a driver in today's report but those projects need workers, kate rogers has this story roll hi, that's right the industry had some 30,000 jobs and 330,000 over the past 84 experts say some 500,000 jobs remain opened as the sector battles a tightening labor market that these big numbers mean huge opportunities. after completing a local program called project just start that trains and places baltimore residents in construction jobs, he works in a job he enjoys that pays well. >> it gives you job skills and training that you can start

getting paid at a higher level so my pay is, i get paid a good enough number to whereas i can provide for my family and still have a little pock change you know to run around >> reporter: the industry is attempting to find more workers like eugene, letting candidates with and without college degrees know work is available and benefits like high starting pay, on-the-job training and health insurance. >> you come into our industry, the beautiful thing is we will teach you the trade that you want to learn and we will pay you while you do that. when you graduate from that competency base or time-based apprenticeship program, you will be making a great living. >> reporter: eugene says he's two years in and has an eye toward his future. >> i think i'd like to be a superintendent i think i like running the sites. >> reporter: >> reporter: project jump start is unique. 75% of the people have been in the correction system. others like joaoers are looking

for a new opportunity the sectors are recruiting across the board, including those previously incarcerated, veterans, women and very much more >> the data from the housing market has been lousy the data on construction employment has been good. >> yeah. >> i'm confused. are these guys out there not building houses? >> no, they're saying basically they're getting cut by the economy in two ways, people have more money to spend at different establishments, maybe investing in upgrading their businesses, so they have more work to do, but they've had a backlog of workers they needed for years. it started years ago it's been exacerbated by the market they are doing all kind of things to recruit people the last jobs report before the mid-terms coming in better than expected 250,000 jobs joined since october. the president and ceo of the national urban leak and former mayor of negotiate also, joe watkins, former white house aid under president george h.w. bush.

i will ask a couple political questions before i ask an economic one maybe i'll ask joe, the, i'm not hearing the economy play such a big role in this mid-term. we've done all surveys people are really optimistic but i'm not hearing it be a major issue on the campaign trail. am i missing something >> no, you are not, steevenl normal steve, normally it would benefit republicanles. in this calls, it's not necessarily happening as such. you got a very motivated voters around the country, of 20 million voters have cashed their ballots early, that is for candidates around the company. that's a big number. almost twice as many in the last election cycle then what you got, you got the president has made an issue of border security, of course then a lot of americans are concerned about health care and so that's driving the picture.

i mean, democrats right now are poised to take back the house, all the polling data i have seen shows that they have almost a better than 80% chance of rewinning, regaining control of the house of relationships on the senate side, it will be a lot tougher, democrats would have to have a perfect storm they have a few places where they are expected to win so it's tougher on the senate side. >> we've seen 80% chances before, joe. right? >> we have >> we have >> we have seen that let me just ask you to critique, then the president's approach to make immigration and border security the driving issue that he has focused on when he's got such a good economic story to tell is that tactically an error if the result is going to be an 80% chance that the democrats take the house? >> well, it's not -- the house picture is not all on the

president, of course clearly, the president is very strategic. he's looking at those border states look at all those important elections going on in arizona, texas, in the south. there are a lot of important elections going on for the u.s. senate and the president is looking to drive hig i his base out to vote. he wants them to be revved up and at the polls, when they do so, it means republicans are likely to win. >> mark, these are good number, right? -- numbers, right? the under lying rate between 70 and 100,000. we are doing double that bringing people in from the side lines. is there anything in this data the check data that you see that might give the natural democratic constituency pause in coming out in the polls for democrats? >> well, if you look at the entire economic picture, of course, inconumber one, the job groelt is growth is a continuation of what was happening under obama. a continuation of a trend of

improvement. number two, the tax cut has not benefitted the average american. the benefits were skewed to the top 10%, therefore, income and equality continues to get worse. why? even though there's wage growth, it's not as fast as if you will price increases and inflation increases. so for the average american, that pocketbook is still under stress and, indeetd, under pressure >> currently, mark, do the numbers say that >> we are doing better than inflation, i would point out >> not the long-term trend, though >> agreed in they may catch up you are playing catch up >> people don't care who is spin i think at least they know that this guy is not messing it up. right? that - >> yeah. >> one seize says it's all him the other says it's the other guy. people don't care about that >> people have factored that in. this election is more about gut. it's more about the direction of the country.

and it also is interesting that the president is focusing on attacking immigrants, dividing the country. pushing a continued message of somehow that there's a great big threat on the border as his primary message. what itself the effect of that does it animate his base it also drives out the democratic base. it also stimulates turnout in open session to that agenda. so in to some extent, that message may be neg gaiting any advantage. this is not 2016 this is 2018 and there are a lot of voters out there with buyer's remorse. they don't like the country. they don't like the red rick they don't like the position they eggs picture the leadingosis to lead in a different way. what does that have to do? that isa factor even in local races. i have been across the country of the last few weeks. i can tell you, the driving

issue is what kind of division it's driven by health care theests to repeal and senate leadership on the republican side saying, yes, we will try again to repeal the affordable care act >> i don't >> this is all having a real effect on i think what voters will do next tuesday >> joe, i want to pick up on tyler's skepticism on the polls a and the 80% and ask you this question if we come on wednesday, come in the office on wednesday and the democrats haven't taken of the house or the senate, are we going to say we didn't factor in the economy here enough? >> well, i guess then we can say for sure we didn't factor in the economy. we didn't consider how much people cared about their pocketbooks. because right now, all the fundamentals in the economy are strong so there is no reason for people to vote for change but again, all politics are local. we have to understand that, too. so locally, it really depends on how people feel. but i hope you are right i hope, steve, on wednesday, ki come and say, guess what, the

polling data was wrong and we still got control of both the house and the senate >> i think we will leave it there. i feel i need to give mark a chance to respond. >> i will say this >> a closing argument. >> i will say this, very importantly st lots of early votes. my understanding is there is a substantial advantage in a number of early votes to the knob of women who are voting women are motivating in this election it will be interesting to see what that means, when the results come in. >> a big gender gap. joe watkins, thank you for joining us let's go to the bond market. rick santelli is tracking the action at the cme. >> reporter: tiler if you look up, you think maybe treasuries would be fussing exactly the option they are surging ahead two year is up 8 basis points, one week of ten year, it's up a dozen basis points of the year and it is three basis points away from a fresh seven high

yield close. 30-year bonds, i put an inter-day. that's a fresh 51-month high going back to july of 2014 usurping the 240 high we currently had and finally the dollar index you know, in the early part of the week, we have a surging dollar index on tuesday and wednesday. they've put up above 97, closes two back-to-back so one would think it's having a rough week well, it is off the highs, but as it sits right around 9650ish. it's up on the day and it's up about a third of a cent on the week melissa. back to you. >> rick, thank you rick santelli. coming up, wall street's wild week, key take aways how they are setting up for next week and the mid-term elections.

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2% for the week, even though it doesn't feel that way. dom physical chu is here with three key take aways domenic. >> we're in the process right now. some of the things we are looking for in terms of the key take aways in this market revolve around sentiment indicators or parts of the markets that could show how the broader markets will fair in the coming days and weeks, given i elections, trade and everything else one thing we are looking at right now is the crane shares csi china internet etf the particular is kweb you can see today, we started off with healthy moves to the upside on those positive trade comments we've drifted lower all day we are now down by one and a quarter percent. if you look at the course of the last year or so, we are still down for that crane shares etf about 35% from its highs of the course of the past 52 weeks. this chart here shows the gap in

difference as bad as the u.s. internet stocks have had it the chinese internet ones have had it much worst that divergence, that's a sign. one other one i want to watch is the semi conductor stocks. we did see green they have drifted lower with the rest of the market we have been using this as a sentiment indicator. if you look over the course of the past year, from the highs around here, we're down currently at 16% in that range so that's another sentiment indicator, then one last place to watch, a real beneficiary since president trump's has been a defense contractors. those are holding on to gains, so far today, they're well off their best levels. one this inc. to keep an eye on the fact that we've had an uptrend in place and we are down 10% from the highs not too long ago, this is an indicator over president trump and his administration as we get into the mid-term

elections, those three sectors are many traders are watching for the future of where markets will be. from thank you, dom chu. a look ahead to next week, let's bring in steve grasso, great to see you. >> see you you said we could be testing february lows in the s&p 500, 2532 is the level. how are you feeling after the rallies we've been able to string together? >> there's a couple tail winds you would expect trade, softer fed, and midterm election closure obviously we got the softer trade headlines. so we'll see where that leads us i would like to weave that test in the next couple of days i don't know if we'll get it, though. >> do you think mid-terms will be a catalyst for the stocks >> well, the closure will be so i don't know how -- let me tell you, if we keep or the republicans keep the house and the senate i think that's a major tail wind for the economy. >> and if consensus comes

throughings whi through, democrats take the house and republicans keep the senate, then what? >> that's closure. either way we move higher. if the republicans keep the house i think we move higher aggressively if we can get a trade deal done and softer headline wes move aggressively higher if the fed gets softer, aggressively higher. >> in terms of the tech leaderships steve, with apple having guided lower for fourth-quarter revenue, do you think we lose the leadership for good >> apple is a huge problem more important, facebook on wednesday we chatted about this, was it the facebook affect or month end why the stock market was rallying it looks to me it was more of the month end induced rally versus a tech rally which doesn't bode well for the entire space. >> steve, thanks good to see you, steve grasso,

stuart frankl. exxon about chevron out with earnings and crude oil hits the lowest level sincepr ail your energy beat check coming up next

okay energy on the move today chevron and exxon both higher on the backs of their earnings. lets get to jekky jackie deangs exxon and chevron numbers were both good and both dow components moved higher and certainly not enough to outweigh the negativity we saw from apple. exxon's income was boosted by oil and gas drilling operations and fuel refining. chevron doubled the quarterly profit and the output hit a new record but the earnings, remember, are backward looking and third quarter's average oil price for west, texas intermediate was around $70 a barrel. there's no doubt that contributed to exxon and chevron's better performance since the fourth quarter started 15,% decline in oil prices if a decline in these prices continues into the winter, the coming quarter will look different. what's interesting to note is that most industry thought prices were stabilizing and this supply-and-demand were rebalancing. right now it seems market is

oversupplied then, of course, there's the iran threat. that does seem to be not a threat anymore at this time. analysts might have just jumped the gun with the estimates on how much oil would come off the market and how quickly that would happen with the deadline for the sanction this is weekend, the oil market isn't showing much concern, tyler. >> we shall see, jackie d. still to come, another jam packed hour of "power lunch. recode's kara swisher. fascinating podcast with tesla's elon musk. he had a lot to say. and shares of starbucks piping hot today you'll hear what the ceo this is about his business in china. all that, plus we are all over the market decline, down 220 right now. you want to stick around we'll be here. come back and join us.

welcome back to the last hour of "power" for a very turbulent, tumultuous week welcome, everybody, i'm tyler mathisen, jobs, jobs and more jobs we are creating lots of them wages are rising at the fastest rate since the great recession but is today's good news bad news for the market? sometimes it plays out that way, and we'll explain why. plus, taking a bite out of apple.

the stock slammed on an underwhelming outlook and news apple will no longer report iphone sales unit numbers. is that a worrying sign for investors? and elon on everything tesla's ceo weighs in on stocks, short sellers, going private, saudi arabia is he still thinking about going private? we'll find out "power lunch" hour two right now. welcome to "power lunch," i'm melissa lee. stocks wiping out their earlier gains. dow has been down triple digits, still down triple digits right now. 218 is the loss. it had been as high as up 200 points the s&p 500 is off the lows as well the low was 2700 we're now off by almost 30 points, or 1%. the nasdaq is down by 1.3% three major averages, by the way, will be down for the first time in four years if they finish lower but despite today's down day, it's one of the best weeks for the s&p 500 in six months.

apple one of the main drags on the dow. the stock is on pace for its worst day since 2014 it's down by more than 7%. much more on that story straight ahead. and crude oil is little its best someday since late april. steve? >> i'm steve liesman we're watching the three ms this hour -- markets, musks and midterms it's a friday fade, bob pisani joins us from the floor of the new york stock exchange. bob, is this all tariffs is there some jobs being too hot in there, too? >> the market moves on two issues, fed and tariffs. fed numbers, look, the jobs report was excellent but 3.1% wage growth, the fed's got to move, maybe several more times next year and that's an issue. but tariffs is 2the complete mover of the market. 2:00 in the morning we had a big

blo bloomberg article saying possibly the president was preparing for detailed negotiations with china. eamon javers put a hole in that around 8:00 and you can see how the market moves kudlow said no deal imminent that's the marginal mover. initially we have another problem. we have what i call the megacap technology problem remember, when there was no growth in the world, there were five companies growing fast. there you see them, they were willing to pay anything for the growth in those stories. now when you get slower growth stories from an amazon, a facebook, an apple, it's a problem. these megacap companies dominate the tech indices five companies, 50% of the nasdaq that's getting deflated. that's an issue. i want to note, interesting, you heard about copper, we're getting movement in metal stocks today so aluminum, steel companies are moving and we're getting heavy volume and this is unusual in commodity etfs. these normally show up on the

bottom of the list but oil, agriculture, oil and gas exploration notably heavy volume today. back to you guys. >> thanks, bob pisani. as he mentioned, the markets took a leg lower following comments from president trump's top economic adviser larry kudlow eamon javers joins us. >> scott wapner asked kudlow if the chinese have brought anything new to the table in terms of proposals or concessions in this trade negligence here's how larry kudlow answered that question. >> no. we haven't seen anything from the chinese yet. nothing. and as i said, our asks have been very clear to just to run through it ip theft, right? the issue of forced technology transfers. the issue of ownership and, of course, the issue of tariffs and non-tariff barriers for agriculture, industrial supplies

and what not. >> we've never had a response from china and we don't have one today after yesterday's good phone call. >> so melissa, that's the normal talk you have between the two sides discussing a range of operations but nothing imminent in terms of a deal he said we're not on the cusp of a deal that seems to be definitive. the big question is will they be able to get a deal by the g20 at the end of november? we expect president trump and xi jinping will meet face to face at that session, that they will discuss trade, but will they ink a deal that's anybody's guess. >> steve, back to you. >> eamon, i want to ask you a quick question larry talked in general terms, the asks we've had for a long time, ip this. is there a specific list from this administration that is asking china to do exactly y, y, and z?

is there a set of goals and plans that they have laid out that china could say, okay, we're good on this, let's make a deal >> well, what kudlow and others say is they've asked specifically behind the scenes we haven't seen anything publicly, like a piece of paper or document that would say what those asks are and the challenge in this, steve, is that the u.s. side is ultimately asking the chinese side to do is prove a negative prove you're not stealing our technology and if you're stealing technology you're doing in the secret that's how you operate if you're stealing things, although the united states has caught the chinese inflagrante several times. it's very hard for the chinese to offer up anything and specific to show they're no longer stealing u.s. ip. so one of the troubles they have here is figuring out what the mechanism is for the chinese to prove they're not stealing.

>> let's bring in the chief investment officer with cbbc private wealth management and the chairman and chief investment officer with hugh johnson advisers hugh, i'm going to start with you. tariffs or fed which is troubling you more this morning? this afternoon. >> i'm not too worried about the fed. we've got it pretty much understand that the fed is going to raise rates in december and likely to raise rates three more times so we'll be facing higher interest rates through 2019. and rates are not going to reach a level i think many my judgment and i think the market knows this it's going to overwhelm the growth rate of earnings until we get to late 2019 and 2020. that's when interest rates will become a problem so i can't put that at the top of the list. and i don't really want to put tariffs at the -- trade at the top of the list. i think we've got that pretty well understood. if we had a global trade war,

quite frankly, steve, we're talking about instead of growth, global growth of 3.5%. it might be as low as 2.5%, too. not much more than that. so all of these things are well understood it's exogenous. >> are you in the don't worry, be happy and buy stocks camp >> yeah, i am. you have to make the case for recession and i have a hard time doing that when i look at things like leading economic indicators that have been up 28 months in a row when i look at the quantification of a probability of a recession, that's 14% and rising but that's a low number i can't make the case for a recession, i can't make the case for a bear market. >> do either of these things trouble you? the fed raising rates too far or the tariff wars or skirmishes or

battles and what have you that we're in right now >> i think there are two symptoms of a trend that the market is processing over the last four or five weeks. i would add a stronger dollar and obviously the path of interest rates and slower global growth what's the common thread they pose more of a challenge to earnings growth in 2019. so i think all that's been happening is that there's a downward appraisal of earnings potential for 2019 the consensus has been for 10% earnings growth next year after a monster year for earnings this year that's probably not attainable half that rate might be realist ic. >> if earnings growth should be half of what the market is expecting, don't we need a downward revision in terms of expectations for stock market returns? >> well, i think that's what's been happening over the last four or five weeks a level setting building that in but i agree with hugh in the sense that what you really worry about if you're thinking about a

bear market share in owe is a recession and at a 3.7% unemployment rate and with the feds inflation -- key inflation number at 1.6% and real fed funds rate around 0, we don't have a recession around the corner so we're in a churn environment here, more volatility it's uncomfortable but we think over the next year stocks are likely to outperform bonds and be up at least a moderate amount. >> you and hugh agree on the likelihood of a recession. we were talking offline about how hard it has been for an investor with a 60/40 portfolio of stocks and bonds. let's say you're just indexed to make money this year with the stock market up 1% and bonds down hugh, do you think next year will be an easier investing environment, an easier way to make money this year >> well, as i crunch the numbers it says the market right now

because of the decline we've seen is got to a level of 5% under the value that i think it should be at for the current quarter. and i think the upside potential between now and the end of 2019 is about 10% so the answer to the question is yes. i think you're going to -- as dave has suggested, you'll make more money have stocks than bonds. the return from stocks 10,%. from bonds 2%. so you'll have to be patient. >> to your point, the reset is helpful to that end. we have to leave it there, guys. >> you bet. >> thank you for joining us. have a great weekend. apple on pace for its worst day in more than two years the three big take aways from yesterday's report, a lackluster holiday outlook, it services business, now $10 billion and 15% of revenue and the big attention grabber, apple no longer going provide iphone,

ipad, i mack unit sales numbers. should be a red flag for investors a a sign apple is becoming more than just a phone company? typically when companies restrict guidance it's not a good sign. do you agree >> it depends which data points you're looking at. i happen to cover netflix which if you look five or six years ago netflix removed their churn disclosure and that sent a lot of investors running for the hills. that ended up being not a real issue at all there was no canary in a coal mine in fact, netflix was doing just the same thing saying look, we have tens of millions of users at the time and having a small change in every quarter doesn't make much of a difference. >> isn't that not comparable

would at no time more comparable scenario be if netflix said we're not going to give you subscriber numbers >> in this case i would say apple has approximately a billion and a half active customers isthat would be the number we would like to get that they haven't disclosed other than periodically they've given us a billion users back in january of '16 and $1.3 billion earlier this year. and i think the key take away there is just that what we're focused on is trying to ensure we have an increase in the services revenue and higher attach rate over the next few years. >> let's talk about their forward guy lance into the fourth quarter how troubling is that or is this a case of -- well, amazon did the same thing but is this apple trying to be overly cautious and maybe sandbag it a little bit? >> it's probably too early in

the quarter to say how conservative the guidance is but one thing to take note of is is if you look at the last two quarters, revenue guidance has come in -- revenue results, i should say, have come in at the high end of the guidance or above. so this could be a case where that plays out again if it does play out again, the revenue apple would report for this quarter would be higher than where the street was going into it last night so to the degree there is the same conservatism level, that would be the case. >> the stock is up 20% for the year so far. do you have a buy on this stock? what's your rating do you have one? >> we have an overweight rating and a 250 billion price target. >> mike olson, thanks. >> thank you. elon musk opens up tesla's ceo speaking with kara swisher on a host of hot topics, including the big mess about going private. kara swisher will join us on her

big is interview plus, check out this mystery chart up almost 50% in the past six months we'll speak to the ceo and no mystery about this chart, the etf that tracks china's big cap stocks on pace for its fourth straight day of gains up 6%. is it time to t geback into into is it time to t geback into into china and the emerging markets and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird. betty called me at she thought it was a fire. it was worse. a sinkhole opened up under our museum.

eight priceless corvettes had plunged into it. chubb was there within hours. they helped make sure it was safe. we had everyone we needed to get our museum back up and running, and we opened the next day.

another couple of hours of trade left to go and we are accelerating our losses into the

close here the dow is now off by almost 300 points a decline of 1.2%. s&p 5002705. >> 2700 was our intraday low keep an eye on information technology as we go into the close at 4. starbucks bucking today's down trend shares soaring 10% on its earnings beat. 52-week high the coffee giant posting record sales thanks to higher prices and new store openings kevin johnson appeared earlier on cnbc and talked about the results and its partnership with alibaba and growth plans in china. >> our alibaba partnership is just getting started in fact, we launched a delivery in beijing and shanghai at the end of september and by the end of this calendar year we'll be in 2000 stores doing delivery and partnership with alibaba in

over 30 cities we continue to expand in terms of new stores in terms of offerings of customers and new cities throughout china. >> starbucks will offer fewer retail items at lower prices and six holiday beverages to encourage more customers to shop in its cafes. >> tesla shares are rebounding since october 24 when the company reported a surprise profit it has been a volatile year for the company due to controversial tweets from ceo elon musk. recode's kara swisher sat down for an interview and asked about plans to go private. >> i think we will be cash low positive for all quarters going forwa forward. >> do you need to go private are you still contemplating? >> we don't need to.

i think we could execute better if we were private. >> swisher asked him if he would redo anything this year. >> if you had to redo anything, what would it be it's fair to say i would not have tweeted things i've tweeted and probably not gotten into the online fights i got into i probably shouldn't have attacked journalists. >> speaking of tech journalists, let's bring in kara swisher, recode editor at large and a cnbc contributor great to have you with us. what an interview this was this was such a stark contrast to the interview he did with joe rogan where he did more damage than good. he seemed to give investors what they wanted to hear and also to the die hard tesla fans. would you agree? >> i've known ylan for decades i've done a lot of interviews so that is why he was more

comfortab comfortable. he's moved beyond what was happening to him i don't happen to smoke pot so i didn't have any so i wanted to have a serious discussion about his products, what happened to him this year and where he's going and i thought he did a good job i think he was obstreperous in parts and at parts he was informative about where the road map for tesla and spacex and the boring company and elon musk is going. >> he showed regret. it was only up until recently where he tweeted he would do it all over again and people are thinking hasn't he learned his lesson. maybe something finally sunk in. >> he and i e-mail quite a bit and we talk about those things and i wanted him to be reflective about what happened and he did things that weren't great for shareholders what is interesting about elon musk is he's not making

software he's doing cars and rocket, all kinds of vehicles. he's doing a giant tunnel digger this is substantive stuff that's difficult to do and i want to show that part which is inventive and future looking and talk about his responsibility as a leader and ceo so he rose to the occasion he apologized and showed regrets. i hope it sticks he was obviously exhausted over the last year working on the model 3 which got great reviews and also they've done rather well from a financial point of view. >> he was more contrite in the interview. tell where you say we can find the podcast, but he was more contrite with respect to journalists but he does seem to have a chip on his shoulder on that one of the fascinating areas is where you questioned him about saudi arabia because the saudis were supposedly going to be the suppliers of money into his go

private effort and you asked him pointed questions about how he feels about the leadership and the nation and the money that flows from there into silicon valley talk to me. >> i'm having trouble with a lot of the silicon valley people taking money from a government that murdered a journalist and did so blatantly and so this money is that is coming to silicon valley is billions and billions of dollars from saudi arabia and so they had bought into tesla publicly and they may or may not still own it. he was looking at money for them like a lot of people that's not unusual and i wanted them to reflect on it i want all of silicon valley leadership to reflect on it and think about where their investment money is coming in. what i liked about elon, the

same thing he wouldn't take their money. soy appreciate that in a person if they're being honest. you can see him working it through and i like that part of the interview. >> i agree with that. >> getting back to how hard it's been for tesla he said he thinks he's doing well right now it's not staring death in the face which seems to applied the been on the brink. >> he's almost religious about i it he thinks he has moved forward and i agree that the development of electric cars by a factor of 20 years all the others are in it because of him he's not being an egomaniac

saying that so a lot of the things he's doing is space exploration but he was funny our whole exchange about scooters i think i look fantastic, he said i looked undignified. he didn't want to make a scooter, he wants to make a pickup truck that nobody wants to buy there was a lot of fun parts of it. >> it's a great interview. thank you so much for joining us kara swisher with recode. >> do you think stocks had a good week? check out the big etfs that track china. the fxi up more than 4%. the k web china internet fund soaring 9% is it time to get ck ibanto china and the emerging markets find out next.

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earlier reports. what should investors make of this move today? as you see there, we have michael bappas and mark newton with newton advisers newton advisers must be named after you? newton, right? >> very good, tyler, that's correct. >> just wanted to -- i'm thinking here. not isaac newton you're saying a bottoming process is at work here. what leads you, mark, to say that and are we at a point where these chinese stocks may turn north. >> i think that's right, tyler when you look at charts of fxi going back over the last couple years, we've had a severe pullback we've given back about 60% of what we gained from 2016 to 2018 the bottoming process began a couple weeks ago we've seen a very sharp move off the lows this week up about 10% to be exact. daily charts of the fxi shows

this to be a down trend. 42 is important, also 43 based on different trend lines so momentum is stabilizing and that's key so for those looking for a good risk-reward opportunity in a volatile market, this makes a lot of sense many people would opine the fundamentals are still very attractive on these names, they've gotten hard-hit and many are stabilizing so i like this for intermediate term and really i'd be a buyer on any sort of pullback we see over the next week or two. so i feel it's very attractive. >> very interesting. let's -- mr. bappas, let me get your reaction to that. the president says one thing, larry kudlow says another, the market moves up on one, down on another. where do we go next. >> the markets are super fragile on anything anybody ever they were fluctuating by 2% on the etf today. we focus odd fundamentals,

china's growth will continue to grow for a long time it's gotten hammered by 60%, as mr. newton said, so we're long china, we're long that etf it may be volatile in the meantime but we're moving forward. >> gentlemen, hopeful thoughts from both of you and clear ones, thank you. have a great weekend for more trading nation, head to our web site or follow us on twitter @tradingnation. we have cut our losses dramatically on all three major averages it was president trump making comments on his way to a chopper. he said he'll have dinner with president xi at the g20.

so those are the headlines we're going to continue to monitor this but you can see the market reaction very clearly the dow is down by 150 points, almost cut in half, the s&p bouncing off the lows we saw earlier. we're down by 22 points or 0.8%. >> i guess you're the most powerful man in the world when you can schedule a dinner and move the market 150 points. >> yeah. shares of royal caribbean down 2% today and 11% for the year the company is making a big bet on miami our seema mody live with more. >> steve, that's right as more baby boomers retire, the cruise industry is expected to take off a record 17 new ships slated to debut and next year. the problem is there isn't enough capacity at the ports royal caribbean taking matters into its own hands, launching its own terminal

the first cruise line to build and operate its own terminal in port miami expects bookings to raise from 750,000 to $1.8 million over the course of the next year but a critical component of this success is international passengers that's why richard fain is watching trade politics very closely. >> i'm a free traded a vat and anything that creates tension. >> another stellar employment report wages wage on s on the rise factory orders are up, too but none of that matters today

investors are worried about the uncertainty of the trade war between the u.s. and china president trump making comments moments ago that move the markets. how traders are positioning themselves straight ahead. now the latest from tradingnation.cnbc.com and a word from our sponsor.

90 minutes to go until the closing bell rings the dow significantly pe lly pas losses s&p is down by three quarters of a percent. the move on the markets, on the back of some comments being made by president trump he said lots of progress has been made on trade with china. let's get to elon mui with the details. you were just saying on the anchor desk how it seems to contradict larry kudlow who told scott wapner on the half time report. >> president trump seeming optimistic in these comments he made to eamon javers as the president was leaving for a campaign rally in west virginia.

president trump said he thinks there will be a good deal with china. doesn't say exactly when that will happen. he says he will have dinner with president xi and that progress has been made so far so what we're seeing here is a thawing of the relationship, perhaps progress ahead of this meeting and optimism on those talks. >> maybe there is progress, maybe there isn't. larry kudlow seemed to suggest all of our asks have been -- gotten a non-responsive response from china i wontder what is going on with respect to the tariffs that are going to go from 10% now to 25% in a little more than eight weeks. >> that could perhaps be one of

the negotiating tools that the president and trade officials use in discussing the details in any agreement. my sense from talking to administration officials is that the best hope of an outcome out of the g20 is that there is sort of a green light amongst the principles for more detailed talks to go on with the staff. one of the things china has complained about is they're not sure who speaks for the president so if they can get the green light between the top two top leaders of these countries, perhaps that mean mrs. progress can be made in talks down the road and then with those tariffs as well seeing if they indeed jump to 25% in january. >> elon, could the two of them have dinner and solve this

thing. we need to give the chinese the comfort level in continuing the negotiations over what is likely to be many hundreds of pages of an actual trade agreement. >> do we have to doubt -- i mean, i guess it's always been the case -- >> larry >> do we have to doubt larry >> is larry a rock we can rely upon to tell us what the administration is thinking or this just part of the -- for lack of a better word cacophony of the administration? >> who speaks the president? i think the president speaks for the president. >> i agree. >> and that's why we have to sit down and have that conversation. that's why they want to have the conversation and so i think that's why it's important you hear the president saying it's not just a pull-aside, they're having a dinner together at the g20. that seems significant and that is just the start of deeper conversations going

forward. clearly there are competing factions within the administration who feel different ways about how much ground the u.s. should give ahead of that type of meet iing. >> if we can stop the domino impact, the existing tariffs from going up, the new round of tariffs from going into effect which would be -- which would have a public comment period and go into effect to time out with the lunar new year which would be important for china and damaging, if you could stop that domino of tariffs that would be a positive for the markets. >> i'm more concerned, melissa that there isn't an economic adviser who can speak in a time of crisis for the president. i don't know if that's the case right now. and i don't know that it matters

right now with this trade stuff like it does with the financial crisis but if it did i would have concern. let's get over to the-- elon, thank you very much. excellent reporting, by the way. let's get to trader reaction to the market moves. we have the founder and ceo of kkm. jeff, do i sell stocks on the bloomberg report at 2:00, buy them back on the jobs report, sell them again on larry kudlow and buy them back on dinner with trump and xi >> unbelievable, steve we just saw stocks repair the losses cut in half but look at the vix, the vix didn't drop under 20 october kicked off the whole anxiety party or volatility part

y par party. we have found out the countries got dispensation but there's a lot coming down the market to grapple with but i think we're doing okay as we're above 500 on the s&p. >> so we need to hold that level? >> i do. you saw a tremendous bounceback. we tested 2600 just about five trading sessions ago. >> it's important to remember, melissa, we have so conditioned

post-crisis. we see assets reprice over quarters this is a process, chairman powell understand this is process so there may be more pain to come this pain will present opportunities and that's why i go back to finding sectors that should be hit on these themes in 2019. >> jeff, thanks very much. we were cool for a while, we went to 310 and now it's 320. the oil market is closing for the day and jackie deangelis has the numbers at the commodities desk. >> good afternoon, tyler maybe you put oil on the list of things to worry about. the session low 6263 that says it all a breach shows a test and momentum down t-to-the down side

meanwhile, aaa says the national average is down 11 cents in a month ahead of the midterms. back to you. >> jackie, thank you jackie deangelis stocks are cutting their losses following comments by president trump about a potential china trade deal he is set to speak any moment he is set to speak any moment and we'l luckily security analysts and watson are on his side. spotting threats faster and protecting his data with the most securely encrypted main frame in the world. stay tuned sweet, oblivious peace.

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>> we are waiting the taped play back of the president. he talked about getting a trade deal done with china this comes days after we are away from the midterm elections. let's bring in sara fagan and ben white, a cnbc contributor and chief economic correspondent with politico. sara, let me begin with you. in the last hour we have been

trying to untangle what appeared to be two opposite points of view, one from the chief economic adviser to to president larry kudlow and one from the president just moments ago mr. kudlow suggesting that there isn't much progress with china the president suggesting that indeed the conversation have been extremely positive and helpful. we're going to have dinner, mr. xi and i, when we meet at the g20. is this typical in a white house. did this happen when you worked with president bush? >> well, it's not typical in a white house but this isn't a typical white house. we know the president speaks to himself. the president's view of events can sometimes be different than his advisers' view and in many cases they're not -- neither of them are wrong. if you think about it, what larry said is factually correct. the president said -- in the president's view he's optimistic he's going to get this deal done at dinner.

so journalists and others -- >> so kudlow is talking fact and the president is talking hope and perception >> well, these things from the president's perspective, he's going to break bread and come up with an agreement. then it has to get papered and larry's job in part is to worry about the paper and make sure the staff is in agreement and the trade reps are in agreement. there's a lot of work that goes underneath a hand shake and the president is going to get a handshake and larry has to figure it about. >> to your question, it's very different than previous white houses these comments would be very carefully orchestrated but that's not the reality we live in right now. >> we will bring ben white into the conversation in a moment we're under the two-minute warning on this tape play back

and i believe eamon javers was at the white house and part of the pool with the president. lead us into the this tape, eamon. >> i had the opportunity to ask the president a series of questions on marine one. he came back to me and said i want to make it clear, even if we don't make a deal things are going really well for us both indicating there is progress being made and also signaling that not getting a deal wouldn't be a particularly bad thing in the united states >> you heard what larry said and you just heard firsthand what the president said >> right >> do the two square or at odds

here >> well, they are a square circle >> three senior administration officials told me there's no eminent deal with china and no intensification of talks, nothing particular that's not going on on any normal day so there's nothing right around the horizon. >> i think the president is expressing hopefulness and negotiating very much. his audience is not just us journalists but also the chinese government and leadership. >> all right let's listen to the tape play back and listen to president trump. >> thank you very much it will be a very exciting five days we are taking numerous trips to great places i hear we are doing well we'll let you know on tuesday night. you'll know before i will i

suspect. i will say we have tremendous job numbers. it is new jobs created in the month of october that was shocking for a lot of people it was a tremendous number by any standards. it is despite the hurricanes the hurricanes normally have a big impact the hurricanes were massive. they had a big impact. the 250,000 new jobs was an incredible number. we also had a wage increase of 3.1% it is like a perfect increase. it is an incredible number but perfect increase the country is doing maybe i think better than it has ever done we have a lot of new companies moving into the united states. we are letting them in based on

merit. 250,000 jobs, 3.7% and a 3.1% or so wage increase it's like really unbelievable numbers. so that just came out. >> mr. president, when you work -- [ inaudible question ] >> sure. >> reporter: are you really okay with the u.s. military firing on the caravan people >> they won't have to fire i don't want people throwing rocks. it was just announced by homeland security you have in certain areas over 300 people they know are trouble. what they did to the mexican military is a disgrace they hit him with rocks. some were very seriously injured. they were throwing rocks in their face they do that with us they will be arrested. there will be problems

>> yes >> i didn't say that but they do that with us they will be arrested far long time >> who is going to arrest them >> ice and border patrol there with the military. >> reporter: [ inaudible question ] >> which are you talking about who? >> reporter: [ inaudible question ] >> you know who will determine that the supreme court of the united states the supreme court will determine that >> the supreme court is going to determine that many many people feel that >> reporter: [ inaudible question ] >> we have had very good discussions with china we are getting much closer to doing something. they very much want to make a deal as you you know, their economy went way down since we have been

doing this i spoke with him yesterday i think we'll make a deal with china and it will be a great deal for everybody it won't be a good deal for the united states. >> mr. president >> reporter: [ inaudible question ] >> we are going to meet and have dinner and be discussing it. they want to make it very badly. we want to make a deal if we can. a lot of progress has been made. >> do you feel -- >> and they understand that if a deal isn't made we are doing very well the way we are doing it right now $250 billion at 25% and it could be elevated by another

$267 billion at 25% or more. i know they want to make a deal. the economy has been very very bad. i will say this, if we can make the right deal for this country and also make the right dean for them it should have been done yearsing but it wasn't china very much wants to make a deal >> reporter: wallalec baldwin punched somebody out during a parking dispute. anything comment >> i wish him luck >> reporter: [ inaudible question ] >> no no no.

our border patrol will be arresting those people it doesn't mean shoot them we will arrest them quickly and far long period of time. >> reporter: [ inaudible question ] >> everything we are doing is totally legal. we take them in and we have to bring them through a court system it is the most ridiculous system in the world it is obsolete but that's not the problem. the problem is it's a stupid system it doesn't work and democrats and republicans could change it immediately. we could do it in one day. we could have a it fixed democrats are playing politics i think social security very bad because the people of this country know what's going on

better than they do. we can fix our immigration system in one day. they don't want to do it because they want open border and open borders, they want those people coming up by the thousands you know, honestly, they always have come up they want them to pour into our country. in the group -- an you just saw the report that came out you have a lot of bad people you people that are criminals, with records we could fix this system so quickly and so easily. we need some or vote all republicans. if we had four republicans it would be fixed immediately >> can you guarantee --

>> reporter: [ inaudible question ] >> sanctions are starting on iran iran is making a very big hit. the country is not the same country as when i started almost two years ago. iran is a much different country since they terminated that deal. it was one of the most ridiculous deals ever made by any country at any time, the iran nuclear deal. sanctions very much are elevated >> so can you guarantee he is not going fire on civilians?

>> reporter: [ inaudible question ] >> you've got to get rid of the migration and visa lottery ask them if they agreed. they never agreed. >> reporter: can you promise the military will not fire on foreign civilians. >> i hope they won't we are not going to stand for people doing what they did to the mexican military and to the mexican police what they did to those people, they were very badly hurt and badly injured. what they did with rocks being thrown in their faces, not happening with our soldiers. >> reporter: [ inaudible question ] >> no. no you're creating violence by your question you are creating it. a lot of reporters are creates violence by not writing the trooet