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tv   Power Lunch  CNBC  July 30, 2019 2:00pm-3:00pm EDT

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>> it's a service where you can put technological information just online. but it appears she was just shopping it around and letting people know she had it >> all right very interesting i'm sure you'll be following it for us we appreciate it kate fazzini, we appreciate it that will do it for "the exchange." i'm going to join melissa on "power lunch." >> we'll see you soon. i'm melissa lee. here's what's new at 2:00 on "power lunch." we're officially 24 hours away from what could be the first rate cuck in more than a decade, but will fed chair jerome powell deliver? >> plus, apple earnings on deck. the tech giant getting ready toreport after the bell. we'll tell you the three most important things to watch for. and we're about halfway through the season with about 75% of the kamps beating the street "power lunch" starts right now >> taking a check of the markets. they are climbing back after the
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dow fell about 150 points as president trump says this morning there's no trade deal with china just yet. shares of p&g, procter & gamble, up 4% after its earnings report. this is a record high for this stock. we'll have much hoar on that later on >> thank you very much with the dow just above 27,000, the president this morning saying we would be 10,000 points higher at 37,000 on the dow if not for the fed's actions. so with 24 hours to go until the fed decision, we know the president would give jay powell an f for his performance as fed chair, but how did chair powell do in the cnbc fed survey? mr. liesman knows. steve. >> yeah, i'm not doing the grading. our panelists. about 40 or so economists and fund mangers in the survey, giving powell a b-minus. you can see how this compares with the final grade of yellen, a b-plus, and bernanke at a straight b and you know what, powell had to
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navigate hikingerates and then going to hold and then going to what looks like a cutting modality here, mode for the federal reserve. let's look at where they think he's good and bad. here are the best grades that he got. regulatory expertise, market knowledge, and transparency, of course, powell gave us the press conference at every meeting. but here are places where he's not seen as quite as good. economic expertise communication, and economic forecasting are the worst ones he has the fed's communication overall, not getting the best marks take a look here 46%, the biggest one so much confusing. 13% say very confusing put it all together, do the math, 59% say somewhat or very confusing, just 41% say it's very clear here's some of the commentary though the chief economist at fact and opinion economics says he likes that powell's new focus on inflation looks like powell is out of the head lights and starting to take control of
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things i hope to continue like that john writing he doesn't see the rationale for the rate cuts as the fed has boxed itself into a corner by feeding market expectations for a rate cut and is now forced to follow through. however, the rationale for the cut is unconvincing. a quick reminder of what the overall out look is for tomorrow 98% say they're going to cut rates. 95% say 25 basis points. looking for two cuts this year in 2019, and the next cut after tomorrow, 38% say that's most likely in september. tyler. >> thank you very much, steve liesman. so what will powell actually do tomorrow? steve is chief u.s. economist. he said the fed should not cut rates at all, and joe is also global chief economist, he said the fed should cut by 50 basis points great to have you both, and it looks like both of you could be disappointed if market consensus has its way. steve, i don't know if you're part of steve liesman's suri, but based on just the disparity of what you think the fed should do and what the fed is expected
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to do, what is your grade of jerome powell? >> my view towards the chairman and towards the fed in general is much lower than what you have out there. i put them in the c category, and i think a big part of it has to do with the fact that we're dealing with sort of an open-mouth policy amongst people in the committee and i think they all have their own opinions, and they're too forceful in expressing those opinions as opposed to sticking to the party line that comes out as a result of post-meeting policy statements and the f-1-c meetings >> do you feel like the policy speak we heard coming up to the meeting today has been discordant, not been sort of unified in any way >> what you have is the very, very vocal people who want a rate cut have been very much out there. other people who may be sitting on the fence have been less vocal in that environment. and i think the net result is the markets have gone all to one side and i think they have skewed themselves i on the other hand am at the 2% in your survey that doesn't
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expect them to cut rates i do think they will be accommodative by going to quantitative easing. >> react to what steve says, particularly with the fact of there being too many voices speaking for the fed, and also, to the merits of rate cut or no rate cut and how big a cut would you like to see. >> well, i think for the first point, i think steve is on point to some extent i think if my feedback to the federal reserve, even as a nugz and a group and a committee, they speak explicitly about the financial conditions too much. and that has a risk of hamstringing you in terms of what the market prices in and hence what you may have to fall on our baseline reluctantly is 25 basis points it's not because of the consumer it's not because of the labor market i think, however, the odds are higher that they actually go 50 for the only reason that you would attempt to drive up inflation expectations, which is
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the primary concern, and i think the only thing you can really materially point to to justify a fed cut at this present time >> so joe, when you say there's greater value in stocks and value stocks today than there has been in years, is that predicated at all on the fed coming through with this 50 basis point cut or even if they just did 25 as expected, would you say the same in other words, is that statement predicated on the interest rate environment right now? >> i think less so we certainly see froth in just parts of the financial markets, the growth stocks in particular. u.s. equities have been on a tear this year it's well beyond where we would have expected at the beginning of the year. so although we're not expecting a recession, you know, i don't think the markets are going to react as positively if we see a 25-basis point move. and so in that sense, the market is already looking through this. which i come back to the 50 basis points if this whole purpose is to provide risk management, some
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assurance, some potential volatility, i don't understand an incremental approach. i would go more than expected and convey the risk to the economy in the fundamentals is balance. that would get you out of the financial vortex with the public markets. >> in my notes, it said something about you're looking at what has happened historically at prior times when the fed has cut rates at analogous moments in the business cycle explain what you found >> basically, what they have done every time they tried to take out these insurance policies is they have fed the fires of the financial disequal ebrheem that started to grow in the economy. they did this into the 1990s, the 2000s, and again in 2007, run up to the 2007 period. all they do is exacerbate the situation where people begin to shift to shorter and shorter duration borrowing and taking more and more risk and then when it all blows up, everyone points the finger at the fed and says, oh, you did
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it by the same token, it's also the market that wants them to do it. my solution for them to get out of the box that they're in, and joe agrees they're in a box, is very simple. say they'll do whatever is necessary, don't cut rates and go out and do $500 billion to a trillion dollars worth of quantitative easing. you say why? because remember, quantitative easing is designed to hedge against deflation. the biggest global risk out there is global deflation. we have pulled back on the balance sheet significantly. we have seen disrupgs as a result of that go back and put the balance sheet where it was, and you will eliminate all the deflationary concerns and you have immunized the economy appropriately. >> there have been how many cycles that start off with a 50-basis point cut >> under the modern period, very few. >> joe, it sounds like you both want the fed to get out of their box by doing what the market is not expecting. so steve here is saying don't do anything you're saying 50 is that a fair characterization, that you think that because the
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market is expecting a 25-basis point cut, the fed should do more >> yeah, because i think it's all around inflation psychology, which then gets to psychological warfare, to do what is expected is not going to change psychology we can debate whether or not they should or should not, but globally and in the u.s., expectations continue to fall, which was a growing concern among central banks since the start of the year, and so that is my rationale why i think at least it will be entertained, the risks are higher in the market that you cut 50, but i would pair that with a balanced risk assistmeessment and see ho economy plays out. the irony would be you drive up inflation expectations and 12 months from now, you're removing the insurance you provided >> we're going to leave it there. thank you, joe and steve coming up, tomorrow's fed decision not the only big event we're counting down to about two hours away from apple's earnings report tonight. everything you need to know to get ready for apple.
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and we're about halfway through earnings season right now. how are things going so far and what do we need to watch for as we head into the second half in. give me a quality fund that helps me get clients closer to their goals. 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.
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so come ask, shop, discover at your xfinity store today. all right. welcome back apple is set to report its earnings after the bell. the stock is up more than 30% even as the tech giant pivots from a focus on hardware to software joining us now is andy hargreaves, equity research analyst at key bank capital
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markets, and josh lipton josh, let's start with you we talked last hour about what to watch for let's reprise that and continue the conversation josh >> tyler, apple heading into this report, the stock up more than 30% this year it's up more than 40% from its low in early january still about 10% off its all-time high we'll look for q3 eps of 210 on revenue of 53.4 billion. with iphone revenue about $26 billion. the street not expecting much there. remember, a year ago, it was closer to $30 billion in revenue. ceo tim cook has talked about levers he can pull regarding that franchise he talked in the past about the trade-in program we'll see what kind of impact it's having on the iphone franchise. a big focus on the faster growing higher margin services business analysts think that's going to jump about 15% to $11.7 billion, and focus on the september guidance, remember, apple does typically ship new phones at the end of september guys, back to you.
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>> thanks very much. let's bringen andy hargreaves. andy, what are you looking for, and talk to us a little bit in detail about what you expect out of china i guess that is one of the numbers that iphone wise that everybody will be looking at >> yeah, to be honest, i'm expecting a fairly boring quarter relative to the firew k fireworks in december. we seem to have stabilized here, and china is going to be really important. that was sort of the start of the problem, and we want to see signs that we have seen some stabilization in demand there. >> so let's continue there and the refresh cycle is another thing that people are focused on people are holding on to their phones longer, whether it's in china or elsewhere what do you see there, and what will it take to energize that refresh cycle? is everybody going to wait for 5g phones? if so, they may be from apple waiting quite a while.
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>> yeah, i mean, i think that's the inherent challenge of a device that has become essentially just a screen to the internet, right? once it's all screen, you can't do a whole lot to make it better 5g, i'm fairly skeptical of, hone honestly, from a consumer perspective, i don't think it brings a ton for consumers to run over what you need is a design change and we don't see that real soon. >> a lot of analysts recently, the notes that have gotten more bullish have cited 5g and the believe it would be offered across more than just the high end phone but also the lower end phone, which theoretically, could make the lower end phones more competitive with the lower cost android phone >> yeah, so it's interesting, melissa. you talk to any number of bulls who come on the network, and you talk to them why they're optimistic they don't really talk about the iphone muted expectations to say the least for iphone sales and units. they're just not expecting a lot of bells and whistles for this
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cycle. to your point, yeah, i think there's more excitement perhaps about 2020 and 5g enabled iphones coming then. also interesting to think even longer term, apple just did make that pretty consequential purchase of intel's mo modem business for $1 billion. it's a rounding error for apple, but the idea they would make that play, cook picking up here potentially the patents, the licenses, the talent to build out a 5g modem business in years ahead. it will be interesting to see whatcolo calls he gets from the street on that >> you have a sector weight on the stock and you sound pretty conservative in your expectations for the next refresh cycle, including the 5g phone that a lot of people are getting hyped up about >> yeah, yeah. i mean, so i look at the business as a whole and just look at a very, very slow growing business and you don't typically see those trading sort of into the double digits on ebitda. if you want to say it's a services business, i'm fine doing that to a certain extent
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but even when we do that, it looks like the services business is trading at a premium to google and facebook, similar to similar types of businesses. yeah, that seems at the high end of the range that it should trade at >> near term risk/reward appears mediocre that's real faint praise, andy >> yeah. i try to be explosive in my commentary that was what i could come up with >> well, all right, my friend. thank you very much. andy hargreaves of key bank capital markets, we appreciate it josh lipton, thank you as well >> we have pretty big earnings movers today procter & gamble leading the dow, but under armour and beyond meat are getting crushed what we have learned so far about earnings -- about the specifically, and if you lost something, let it go, but would you give up guardianship of your y o dren to make it easier t pafor college? that unbelievable story coming up on "power lunch."
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welcome back to "power lunch. i'm mike santoli at the new york stock exchange ge powering to its earnings tomorrow the stock surging more than 40% in 2019 on the way to its first
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positive year in three and its best potential gain in two decades. so can the ge turnaround be trusted? katie stockton and nancy tangler of butcher joseph asset management are your trading nation team today. katie, ge had this very eventful ride over the last few years although in recent months, the stock has kind of settled down, gone pretty much sideways, looking at the chart, can you give the edge either to the bulls or bears here? >> i think it's too early to call it a bullish long-term turnaround obviously, there's been a loss of long-term downside momentum relative to 2017 and 2018, but it's really fallen short of breaking out and solidifying the bullish reversal maybe the earnings report will do that. the resistance level i'm watching is about 1070,o a breakout that's confirmed, meaning you spend a couple weeks above that level that would really solidify a turn around for ge in my eyes which has been range bound and somewhat neutral in terms of momentum on the downside, in watching
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minor support around 975, i would like to see that level remain in tact, at least the preserve the neutral bias of the record, but we need the breakout to get excited about it. >> amazing we're talking about ge in that range, about 20 cents down from the breakout point of 1070 a lot of ways to try to analyze ge could be some of the parts, could be cost cutting story or just a reversion to the mean of how it used to be valued how would you go about it? >> this is a tough one i think the market has given the company and the stock price the benefit of the doubt on the turnaround 44% move is impressive but from here, we need to see sustainable earnings and free cash flow growth and i think you want to watch the cash burn in the call and the guidance regarding cash. because they probably will beat on the cash issue, but i think long term, the only way you can look at this company is some of the parts. there's no meaningful dividends
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to give you any indication of what management thinks long term sustainable earnings power is, ie raising the dividend from here so i'm on the sidelines. i have owned the stock on and off for decades, and it's just from here, it's a turnaround story, and you have to sum of the parts it >> and seems like i guess no necessary hurry to buy it ahead of getting the confirmation. thank you, katie and nancy for more trading nation, head to our website or follow us on twitt twitter. @tradingnation >> thank you very much, mike ahead on "power lunch," we're halfway through earnings season. we're almost halfway through this hour, with 75% of companies beating estimates. so how do you profit from the second half of earnings season plus, the second democratic debate airs tonight. we will tell you three key issues that could impact your money and how they'll talk about it >> and a loophole that got families more college financial aid. you won't believe how far dozens
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of parents went to grab it we'll explain when "power lunch" returns. >> and now the latest from tradingnation.cnbc.com and a word from our sponsor. >> many people say don't fight the fed. that doesn't mean you have to fear the fed if you're a long-term investor, don't let a fed announcement derail your long-term investing plan however, if you're a short-term trader, you may want to consider waiting until after a fed announcement before taking on any new positions. i'm randy frederick, and schwab is the better place for traders. here, it all starts with a simple...
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hello! -hi! how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today.
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hello, everyone. i'm sue herera here's your cnbc news updateat this hour. president trump touring the jamestown, virginia, colony. a bit later, he spoke at the 400th anniversary of the first representative legislative assembly, calling it a truly momentous occasion >> to every virginian and every legislator with us today, congratulations on four incredible centuries of history, heritage, and commitment to the righteous cause of american
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self-government. >> pakistani police say a roadside bomb struck a security vehicle in southwestern pakistan, killing at least four people and wounding 26 more. no one immediately claimed responsibility for that attack an italian prosecutors held a news conference where they spoke for the first time following the death of an italian police officer. police say that officer was unarmed when he was stabbed to death with a seven-inch-long knife. two american teens are being held in that attack. you're up to date. that's the news update this hour back to you. >> thank you, sue herera let's get a market check the dow turning positive briefly as president trump said he spoke to china's president xi recently the dow just about at the flat line s&p off fractionally, nasdaq composite off by 3.5%. housing stocks, dr horton jumping 5% after announcing a billion dollar share buyback, plus pending home sales rose
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more than expected for the month of june, so we have green arrows across the board the oil market closing for the day. let's get to dom chu >> continuing what has been a near term trend higher west texas intermediate up brent crude up 1.5%. $64.70 geopolitical risks in the middle east, uncertainty over u.s./china trades still are there, although that meeting between president trump and president xi earlier on, setting the stage perhaps for a little bit of a rise, and the last couple weeks has been focusing on a lot of central bank policy, the european central bank tilting more toward easing the fed likely to do the same tomorrow as well lower rates and a lower dollar supportive of those commodity prices like oil. a couple of energy specific catalysts to watch you have weekly u.s. inventory data from the american petroleum institute today, and the official energy department data tomorrow morning at 10:30 a.m.,
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two inventory reports could drive the trade. back over to you >> thank you very much this week is the busiest week of earnings for the quarter, putting us roughly in the middle of the reporting season. bob pisani looks at the trend so far and what we still need to watch. hi, robert >> no collapse here in earnings yet. there's good news and bad news on thurnings front, tyler. the good news is this, at the halfway mark, not a lot of surprises. earnings for the second quarter are essentially flat compared to the second quarter of last year. that's up .09% more good news, guidance for the second half, the third quarter and fourth quarter, is not collapsing as many had feared a couple months ago. overall, 2019 earnings can best be described flattish, let's call it. now, while there is no earnings collapse, the trade wars and slower global growth is clearly having an impact on earnings look at these numbers. companies with significant revenue exposure outside the united states, more than 50% of the revenues outside of the united states, are seeing earnings declines on average of about 13%.
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but companies with a more domestic focus are seeing modest increases there. you see up 3%. that's a sign the global slowdown and trade wars are having some impact on earnings there's three warning signs i see out there for investors. first, stocks are very pricey right now. very little room for a misstep, particularly on global trade secondly, the clarity on global growth, including tariffs and trades, is very elusive right now, and finally, maybe most importantly, markets are becoming more dependent on dovish central banks to provide a break from slower global growth but it's not clear that will automatically materialize. if it doesn't, earnings guidance will certainly come down dramatically melissa, back to you >> thank you for more on the earnings trends. our next guest is a leader in middle market lending with more than $30 billion in capital under management the index has shown a high correlation with the s&p 500 as well as gdp. joining us to discuss how to profit from the second half of earnings season, lawrence gallp,
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the ceo of the company great to speak with you. >> nice to be here >> we usually get to talk to you prior to earning season to get a preview. here we are speaking to you in the smack middle of the heart of earnings season, the busiest week of earnings so far in the season have you seen any surprises so far? >> not really. things tracking very closely to the data we had in advance if you're a business selling to u.s. customers, you're doing great. and if you're not, you're not. >> so basically, you're seeing what bob sort of alluded to and that is that the companies with more exposure to sales overseas are seeing a less robust earning season, less robust growth than domestically orgented companies. >> in our index, revenue is up 10% from the same quarter last year these are among the strongest numbers in the history of the index. they're as strong in terms of growth as last year. we expect gdp to beat. gdp did beat
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didn't beat by as much as our data would have said on its own because of just the effect you described, that whether it's farming sector or trade or sales overseas, those sectors are a little weaker. a much better time to be a franchise of car washes in the u.s. than to be daimler. >> why is business investment down or not up? >> i think there is a factor that has been underrecognized or underreported so far sure, trade uncertainty, foreign policy uncertainties, any kind of uncertainty creates a drag, but i think we're hearing from the democratic party presidential primary nominees such anti-business rhetoric, such advocacy of increased regulation, increased taxes, that that's got to be a factor that's got to play into business's decision about investment decisions they're going to make today that are only going to earn profits after the next presidential election
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>> very interesting. and you're right not many people have pointed to that, but the rhetoric, not to mention the break-up talk and the -- and the sometimes not so veiled discussion of socialism has got to be playing in the background somewhere >> look, you can have whatever political point of view you want, but if you're a business decision maker, you have to take into account that if some of these are implemented, profits will be lower. if profits are lower, you invest less >> we're talking a lot about the fed and hot the fed should or should not do, what the fed will do tomorrow. if the fed does cut by 25 basis points as the market expects, do you think that will spur lending at all will that make businesses even more inclined or is this sort of, you know what, we might as well just cut? >> i don't think it will have any impact on investment or spending i think the fed is risking repeating the mistake it made in december of 1966, when based on
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stock market weakness, it cut rates in the face of rising inflation. we see a little bit of strengthening inflation right now. the only good reason to cut rates right now is just because the differential between u.s. rates and foreign rates are so big. but the fed can't pull up global economic growth. the fed can only help the united states the domestic economy is doing really, really well. >> and remind us what happened in 1967 following that mistake, lawrence >> you had a big, big pickup in inflation that lasts for years triggering a lot of sadness in the u.s. economy >> all right we hope it doesn't come to that, that's for sure. thank you. great to see you >> thank you >> and to the bond market we go with rick santelli who is following the action at the cme. hi, rick >> hi, tyler there's been a lot of investment grade deals, phil lebeau, of course, has referenced boeing. a lot of things going on, but one thing that isn't going on, wild ranges in treasury. as a matter of fact, we have a parallel shift, all maturities
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are down one basis point on the first day of this two-day fed meeting. look at the intra day of tens. we came back from lower yields might have been the data it was very good this morning, especially consumer confidence if you look at a july 1st start, notice early july, the low close. but we're not hovering much above that even though we're consolidating. that goes back to november of 2016 finally, one week of the dollar index. today, it touched 98.20, the highest level in six months is 98.25 on a closing basis melissa lee, back to you >> rick santelli, thank you. >> the second set of democratic presidential debates kicking off tonight, so what are the key issues that could affect the markets and yourmoney? >> plus, the fallout from the big capital one data breach. it's costing the stock 7% today. could it cost the company much more "power lunch" will be right back
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the second set of democratic presidential debates kicking off tonight. we will going deeper if to the key issues that could affect the markets coming up. first, let's get to kayla tausche in detroit, michigan kayla. >> hey, melissa. the stakes are high to create
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one of those big moments this week because about half of the candidates will see this week be their last time appearing on a debate stage this cycle. while it's still early in the sighal, it's more about performance than policy, but even so, candidates are trying to flesh out some of their proposals to give them more talking points tonight and tomorrow elizabeth warren wanting to revamp the way the u.s. negotiates trade deals kamala harris putting her spin on medicare for all, and pete buttigieg wobbling to double union membership by including workers in the gig economy voters have high expectations for the candidates that are already the front-runners. joe biden, the former environment, is the one who is currently expected to have the best performance here in detroit. followed by kamala harris and then elizabeth warren and bernie sanders. and that is even though kamala harris' boost in the polls from the last debate has already faded. now, harris, biden, and cory booker will be joined by seven
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other candidates tomorrow night. tonight, elizabeth warren and bernie sanders will not only share the spotlight but they will also find themselves at the center of attacks by other candidates who describe themselves as more centrist democrats, as capitalist in nature, and they want to take direct aim at some of the proposals they see at the far left end of the party's agenda >> thank you very much from detroit today >> several market moving themes we expect to be discussed in detroit tonight, and we have the top three in our power run-down. to run through the issues, let's bring in brian gardener, managing director of washington research brian, let's kick off with trade policy obviously, china trade talks resume today, but there's also the usmca that still needs to pass congress. it didn't get discussed very much in the first debate do you expect it will tonight? do you expect that these candidates are going to be asked what they would do about the
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usmca? >> i do think it's going to come up i think it has an impact on the outcome for usmca back in congress, tyler. if the candidates come out full bore and really attack it and gain some traction, especially with the audience in attacking usmca, it's going to make it very difficult for house members, democratic house members, to vote for the package. and the president is going to need some bipartisan support in order to get the bill through. so i'm going to be looking closely to see how that candidates handle it, what the crowd reaction is, and what the feeling is within the democratic party based on tonight's performance. >> the cliche about senator elizabeth warren is she's got a plan for that. and now she has a plan for trade. and as i read some of the headlines in her plan for trade, it creates a lot of stipulations about how she would do trade deals with individual nations, including that they subscribe to certain labor standards, that
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they would eliminate all domestic fossil fuel subsidies that they would fulfill commitments under the paris climate accord and that they would not be on the treasury department's monitoring list for manipulative currency practices how realistic is this? is this a legislative agenda or a trade agenda >> i think it's a purely political agenda i mean, some of the itemsia just ticked off, tyler, they're not practical. countries that we monitor for currency manipulation, well, there are lots of developed countries with whom we have good trade relations, good international relshz relations, but we couldn't do a trade deal with it makes no sense. it's interesting there's so much overlap between the trump trade agenda and the democratic trade agenda, at least for many candidates warren goes further than anybody, but it is one of those unique areas where there is actually some common ground. >> all right next, some new proposals from
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the candidates targeting wall street and the banks what's going on there? kamala harris yesterday releasing a funding plan for medicare for all that would put a transaction tax that she says would raise several trillion dollars on stock and bond and other kinds of securities trades >> well, you know, it's interesting. the financial sector really escaped the last debate unscathed. didn't come up much. i think it's going to be back in the spotlight tonight. you just mentioned senator harris' proposal for a financial transaction tax. it's been floated around the world, especially in europe, but it's never gotten any traction the europeans punted on it when they had a chance to adopt it. i don't think it has much traction in the u.s., but the anti-wall street rhetoric does so i think i'm looking past what she's doing on policy and seeing how the attacks on wall street, senator warren the same. she's going to go back at wall street again how much traction that gets.
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i think it's a powerful talking point for democratic candidates. >> what are the specific proposals that we know of so far, brian, that you think could gain traction. warren, for instance, is proposing reinstating a modern day glass-steagall what should we look for? >> i want to see how, what the reaction is after the debate, at the very end of the debate, how the centrists react to this. because there was some pushback at the first debate. an overall tone of a real move to the left by most of the candidates you had a couple centrists, john delaney. senator mike bennett from colorado, who tried to push back, and keep the party in the center and so is this wave of left-wing populism just so powerful that it's going to run everybody in the power over and is then the democratic party so far to the left that there's no chance of them kind of, you know, working with republicans anymore on a policy side, then where
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does wall street go? there are populists in the republican party, populists in the democratic party it winds up being a tough place for wall street. we saw in the last -- in the past congress, congress passed a bank deregulatory bill there was nothing in there for the biggest banks. so wall street is in a tough spot right now they don't have a lot of friends on capitol hill, in congress so i want to see, you know, can the centrists get any kind of traction in trying to keep the democratic party from moving left and causing more problems for wall street. >> you mentioned earlier there is at least some overlap observable between the democrats and the white house on trade another area where there's at least some bipartisan agreement is big pharma and drug prices. everybody wants them lower >> yeah, i mean, i cover mostly financial policy we're here at our community bank conference, so this is my bread and butter but just looking at pharma, as
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you mentioned, tyler, that's an area where there is common ground between the white house and democratic candidates. i think the democrats are going to come full out, the merger that was announced the other day with pfizer and mylan, it's going to be a great attack point for a number of the candidates so i think pharma could take it on the chin in the debate. you know, so far, we have seen that the trump administration hasn't been able to move its agenda so i'm not sure how much traction all of this gets in washington going into 2021, but it's an area where the candidates are going to focus and try to score political points >> brian, thank you very much. we appreciate your time. >> thanks, tyler coming up on the tasting menu, real friends take eggs and bare legs. stay with us at fidelityde, it's just $4.95 per online u.s. equity trade.
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- stand up if you are first generat(crowd cheering)ent. stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. the world in which we live equally distributes talent, but it doesn't equally distribute opportunity, and paths are not always the same. - i'm so proud of you dad. - [man] i will tell you this, southern new hampshire university can change the whole trajectory of your life. (uplifting music)
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welcome back 100 million americans may have been affected by a huge data breach involving capital one aditi roy has got the details. >> it's a staggering figure and capital one shares are taking a hit from the breach down about 7.5% right now, in addition to the 100 million u.s. customers affected, the breach also
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impacted 6 million canadian customers. 140,000 social security numbers, and 80,000 linked bank accounts were compromised along with personal information cyber security is a top concern in the financial services sector a recent ibm report showed finance and insurance was the most frequently targeted industry back in 2018 accounting for nearly 1/5 of the cyber attacks it tracked last year the reason, customer bank account information can be monetized quickly according to the study. a deloitte report shows the average cyber -- is $2,300 ahead. that would translate to about $750 million annually for hsbc and 600 million for b of a and citigroup based on their 2018 head counts. jpmorgan chase has reported it spends $600 million every year on cyber defenses. tyler, jamie dimon has told us that the risk of a cyber attack
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may be the single greatest danger to the u.s. financial system. >> thank you very much, aditi roy in san francisco time now for our tasting menu. a look at system of the stories we are watching today, snapchat taking a shot at instagram the company launching a campaign today which stages a #takeover on facebook owned instagram. the ads were posted on highly followed pages featuring the #realfriends and and #friendshipquotes. there it is. >> i feel like this is a psa of our modern times remember that there are real friends out there, not just the ill lugusion of friends that yo create on snapchat or instagram. it's sad. >> i have no opinion here. >> okay. >> okay. >> i'm sure you have an opinion on this next one. >> eventually, okay. >> i'm sure. >> oh, i'm supposed to read this one? from real friends to fake eggs, tim horton's taking a crack at fake eggs for its big breakfast
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menu the canadian coffee chain just testing just egg, a plant-based scrambled egg alternative named from the mean protein. >> i can tell your opinion is forming right now. >> canola oil, onion puree and turmeric are the restaurants already use the mung bean egg product. >> can you imagine -- >> go ahead. >> -- having a mung bean protein a egg protein sausage breakfast sandwich, and imagine the impact you'll feel later on in the day consuming all of that legume protein. just putting that out there. >> i'm with you. i'm with you. what would your boss say if you came into work wearing shorts some men in london are opting to wear this untraditional clothing item to their jobs during the recent heat wave temperatures in the city neared
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record highs during july an accountant even noted that he was surprised to get compliments on his lovely shorts >> i guess i'm okay with that. >> really? >> it's hot. >> you could wear shorts and then change into trousers at work. >> change into trousers in the nice air conditioned place, sure. >> decorum >> all right, well we have a bonus tasting. >> we do >> all of you have been so good. whether you like it or not, lil nas x's hit "old town roads" is the billboard's number one song running ever previous record holders were "one sweet day" featuring boys ii men. >> i think it's a pretty good song i like this song it's mesmerizing. >> is it like the best song ever though >> i don't know about that look at that
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>> i saw him driving in there, i thought it was like clevon little in "blazing saddles" remember that movie? it was a great movie i love it. i like this. >> play us to break. >> all right, up next, the college story we've been telling you about, the details of a crazy way to get financial aid that some aracale tuly using play the music, i like it. ♪
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a crazy story about the lengths some people will go to
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help their kids pay for college including giving them up robert frank here to explain >> tyler, another example of gaming the system here the u.s. education department investigating a legal loophole that has allowed affluent families to receive financial aid for their children's college. now propublica and the wall street journal both reporting on a strategy where parents give up legal guardianship of their kids to a friend or relative. the children can then declare themselves financially independent reporting only their own income and therefore qualifying for federal, state, and university financial aid critics say they're benefitting at the expense of truly needy families, but the lawyers consultants involved in guardianship say it's perfectly legal and it's in the best interests of the children. the journal found that most families who sought financial aid for their kids in suburban illinois lived in homes valued at a half million or more with several over a million dollars the education department considering new language requiring students under
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guardianship who still receive support from their parents to be declared dependents. >> it really just sounds wrong to do this i know it's legal. i get it, but that's just not the spirit of the way it ought to work. >> and there was an example in there where there was awealthy woman, they say we make more than $250,000 a year we have a million dollar house, but we put several of our kids through college at a cost of more than $600,000, so we couldn't afford the last kid, so we had to do this. college costs have gotten so crazy -- >> well, that's true. >> -- that you can make over 250 a year, have a million dollars house and still can't afford it. that's what's crazy. >> this is all legal though unlike the other college admissions scandal can there be anything done about this really? >> the education department is going to try to change the language that says, look, if we find any evidence that you're getting your cell phone bill paid, your rent paid, anything paid by your parents, you cannot be declared a dependent.
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>> financially independent person. >> that's right. exactly. they may change that. >> fascinating story, the lengths parent wills go to that's crazy. >> for their kids. >> thanks robert, and thank you for watching "power lunch." >> and "closing bell" starts right now. good afternoon, welcome to the "closing bell. the under armour today, that stock getting slammed down 12% more about that move coming up we've got everything you need to know about the broader markets which are at session highs as we enter this, the final hour of trade. >> welcome, everyone i am sara eisen. let's look what's driving the action slightly lower, the market trading ahead of tomorrow's key interest rate decision from the federal reserve. >> procter & gamble leaves the dow after strong earnings, and coming up in just a few minutes, a big exclusive interview fo

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