it is 5:00 a.m. at cnbc global headquaters and here is your 5 at 5:00 rally ahead, u.s. futures searching for some direction as the dow and the s&p 500 look to break three week losing streaks. a retail rebound the consumer sector coming off it's best day in nearly two weeks. but it's not all sunshine and lollipops. the bond markets once again flashing that ominous recession warning signal could the fed have done too little too late to stave off an

economic slow down then there's china upping the ante in the on going trade war out with a new warning for president trump, aka the chosen one. those details coming up next and the president targeting an american business yet again. this time taking on big auto it is thursday, august 22nd and worldwide exchange begins right now. good morning and welcome stock futures indicating the dow will post maybe just some fractional losses and slight losses right at the opening bell if you see here we're positive just by about though 8 points overall. the s&p again up by 1 point and the nasdaq down by 6 if these futures moves were to hold into the regular cash equities trading session. to the bond market now, flashing again, that recession warning

signal, the 10 year briefly dipped below the 2 year yield. you can see here following the release of the latest federal reserve meeting minutes yesterday. investors on edge fearing the central bank will not act aggressively enough to stave off a possible recession as things stand right now, just about 1.58% there for that particular move on the ten year two year spread. you can see one basis point separates them at this point let's go worldwide now in asia the nikkei is about flat but the hang seng off a full per cent there. the shanghai composite up .1 as well in the european trading, that carried there as well. the german dax about flat. we had manufacturing and services data coming out there off one quarter of 1% and the ftse 100 off .5. >> china's commerce ministry is

out with a new statement as the u.s. prepares to levey new tariffs on september 1st china saying in part it will have to retaliate if the u.s. persists on the current course and despite delayed tariffs from the u.s. any new tariff measures will lead to an escalation this is as president trump made his own personal mission to m hahh -- hammer out a deal with china. >> somebody had to do it i am the chosen one. somebody had to do it. so i'm taking on china i'm taking on china on trade and you know what, we're winning. >> investors also may be suffering from a bit of whiplash as well as president trump flip flops on his commitment to economic stimulus. specifically a possible payroll tax cut and adjusting the capital gains tax. here are his comments just over the course of the past few days.

>> payroll tax is something that we think about. >> we don't need it. we have a strong economy. >> a lot of people have been talking about indexes for many years and it's something that i am certainly thinking about. >> i'm not looking at doing indexing and i haven't been seriously looking at it but it's an option if i wanted to. >> the tariffs are working and they're eating the tariffs by the way, there's no price increase just in case they have impact. >> joining me now, art hogan portfolio manager at washington crossing advisers. so, art, we have been speaking so much about whether or not the economy is strong, whether or not we are drifting toward a recession, whether we're overdue for one. the president has made a number of comments going a little bit back and forth where do we stand in the markets? should we be fearing a recession coming

>> i don't think the current fear is a recession. certainly in the corporate sector there's a lot of uncertainty. i think the biggest concern is the rhetoric on u.s.-china trade. i'm not the most concerned about that now let's say the uncertainty in corporate america has a lot to do with it let's say the slow down on the global economy has a lot to do with it and we escalate and don't find a way any time soon and that's the biggest concern if we escalate on everything that's left out there, that $300,000,000,025%, i think that's enough to slow both the global economy and the u.s. economy into a recession so that's it we just don't know one day we'll hear, hey, this is going to last probably up to the election he just said that two days ago and then trump comes out and says we'll probably make a deal. >> so it's fair to say there will be a proximate cause or

catalyst or harder data that will suggest that we should be drifting toward a recession. there's been a notion floated around that we could be talking ourselves into recession indicating that sentiment might be the reason why we get there ceos pull back on spending and hiring that sort of thing does the u.s. economy, can the global economy go into a recession because we talk ourselves into one or will there be real underlying signs of it? >> this will be real underlying signs of it. it has a lot to do with confidence and in corporate america we have seen a lack of capital expenditures that hasn't manifested itself in a lack of hiring but it's a larger decision that we haven't seen as it relates to the larger part of the u.s. economy which is a consumer, that's a resilient

group. this group remained in positiver the to-- positive territory. so in a sense it's a much more a case of the longest duration how long does this uncertainty last. >> you have used the word tariffs quite a bit. does that mean that that's the thing that's front and center in your mind for what's going to drive the market what's going to drive the economy and all the activity that we're seeing globally with regard to market activity? so you're not that worried about this inverted yield curve? >> when the german ten year yields less than minus 50 or 60 basis points, then you have to start thinking, of course it's

there. you also have to remember the number inverted was a 5. we haven't had the inverted yield curve where it's 1.4, or 1.5 and trying to make sense out of that. so that's the least of my concerns a nasty break up with brexit italy not getting along with brussels we don't talk about that enough because we're so locked in but number one on the list has to be u.s.-china trade tensions. >> given that, how should one be positioned are there certain other areas in the overall assets that you'd look toward because of the area that we're at right now? >> that's always the case. if you're a long-term investor

and getting concerned call your financial adviser and say how would i look in a recession? what does my portfolio plan look like if this volatility is keeping you up at night it's a good idea to say maybe i'm overexposed to equities and going to raise some cash i'd be more comfortable saying i'm going to move to cash to the time being as opposed to saying i can put my money in gold which has had a big move i can put my money in utilities which are very expensive and dividend yields are historically low. if you want to get defensive, maybe look at health care versus some of the traditional dividend darlings as a way to go or just raise your level of cash when i think of the near term, there's a lot of volatility but we're not ending up anywhere else >> thank you very much >> great to see you. >> president trump taking on american business this time

attacking the auto sector. frank holland joins us with that good morning. >> good morning. the president stepping up a series of attacks on the auto industry for not backing the administration's plan to roll back standards from the obama era. they all reached fuel efficiency rules designed by climate change general motors has not signed on the california rules are looser than the obama regulations but still stricter than what the trump administration has proposed the president targeting ford in particular on twitter. he says the founders of ford motor company and general motors are rolling over at the weakness of current car company executives willing to spend more money on a car that is not as safe or good and cost $3,000 more ford is focused on acting to protect the environment while also protecting the affordability of cars and trucks experts say there's no evidence that current fuel economy standards impact vehicle performances environmental groups also

challenged the notion that trump administration rules would make drivers safer or reduce costs. back to you. coming up, why president trump says tim cook is a quote unquote great executive while others are not. >> plus new plans from the european union to crack down on facial recognition technology and later on why recession fears may be overblown a very busy hour ahead when worldwide exchange returns right after this break stop struggling to clean tough messes with sprays. try new clean freak! it has three times the cleaning power to dissolve kitchen grease on contact.

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welcome back to the show and good morning here's how your money and investments are shaping up today. stock futures pointing to a flat open today the s&p flat and the nasdaq down by 12 if the futures moves hold into regular trading president trump says apple ceo tim cook is a great executive, at least in part because cook calls him on the phone. >> the only one that calls me is tim cook whenever there's a problem, he'll call now the problem was samsung a

competitor wouldn't be paying tariffs and tim cook would i have to help him out short-term with that problem it's a great american company. samsung is in south korea. not fair >> so the chief executive of america talking regularly to the chief executive of apple joining me now is elizabeth live in london. so elizabeth, this is not -- this is the latest in a string of meetings that the president has had with tim cook the ceo of apple. they have had a very close relationship. >> they have this is an important business relationship because of apple's stake between the u.s. and china. we know how much they rely on china and we know the latest round of tariffs announced on august 1st goes into effect some analysts said that iphone prices could increase by as much as 10% if apple chose not to absorb the

cost themselves. so tim cook has a lot at steak in what's happening in the daily negotiations between the u.s. and china. they had dinner at the president's golf course in new jersey and the president left that conversation feeling sympathy for apple and saying that tariffs could set it back in the competition between it's south korean rifle samsuval sam. we're seeing this dynamic play out and i will say that the effect so far has also shown up in apple's stock just since those tariffs were announced august first and since the delay on some of the electronics, specifically that would have effected apple has been, you know, in place until

december apple share price has gained back all the losses from the initial announcement so some of these conversations are working. >> but tim cook made statements ability the relationship with president trump as well. it appears that tim cook is not quite as critical of the president as other ceos have been. >> it's a good point and part of that again goes back to how important this current environment is for the outlook for his company. he has been a little bit more outspoken on some of the social issues, things like immigration, for example. and the environment but on the day-to-day business side of things we have seen tim cook take this more accommodating stance toward the president and it's something that's

interesting to play out is just how closely those two are communicating and whether other tech companies, for example, the google ceo who has also been at the white house recently might want to take queues when it comes to the effect that it could have on reprieve from tariffs or any other effects on business here. >> all right so i want to follow up here quickly. facial recognition technology is being explored more for use in airports all across the u.s. and in europe. there is though an effort by brussels now to limit the use of facial recognition technology, can you tell us a little bit about how that's developing there? >> this is a story playing out as we have seen them try to take a stance on data collection and artificial intelligence. after facial recognition data was being collected at public places like kings cross, the regulator here launched an investigation saying this is deeply concerning. we need to be looking more

closely to concern of all of us. how we're getting our data through biometrics and the eu is taking some queues from the data regulators and saying maybe in how we're assessing artificial intelligence, they have this whole review of artificial intelligence happening now eu, maybe they'll make the facial recognition aspect a clear part of the regulations going forward and this would have a big impact not just on law enforcement but on a lot of companies relying on this technology more and more. >> some airlines are testing it for online boarding passes and more thank you for that update. still on deck for the show, first walmart and then target and now another set of retailers is set to surge at the opening bell and later on, handle with car. apple out with new stipulations for its titanium credit card that fancy apple card. when worldwide exchange tus rern

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♪ ♪ applebee's handcrafted burgers now starting at $7.99. now that's eatin' good in the neighborhood let's get a check on the big stock moves of the day so far. we have nordstrom reporting better than expected second quarter profits even as sales missed analyst estimates the upscale retailer was able to clear cost and clear out more inventory. nordstrom invested in e-commerce platforms. weaker sales at its full price

department stores and off price nordstrom rack divisions drag down total revenues. none the less, the shares after being hammers all year are up 11% premarket. l. brands second quarter profits fell hit by a one time charge and continued weakness at victoria's secret. adjusted earnings beat forecasts but same store sales slip by 1%. sales dropping 7%. that was worse than expected but still those shares after being hit up 2% premarket. and then pure storage reporting second quarter results that topped estimates but for the second straight quarter the company is cutting it's guidance for the full year. it also announced its cfo will be stepping down this fall among all of that news those shares are still up 3%. when we come back on the show, the field is shrinking as yet another democratic presidential hopeful bows out of th20 cee 20 those details coming up next guy a promotion.

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welcome back let's get a check on this morning's other top headlines and nbc's francis rivera live in the nbc newsroom with the latest >> good morning, we start with police in california that say a warning from a hotel employee prevented what could have been a mass shooting. he is accused of telling a co-worker that he planned to shoot hotel guests and employees. when police searched his home

they found several weapons and ammunition he is charged with making a criminal threat and violating gun laws another democrat is dropping out of the race for the white house. washington governor jay inslee is ending his bid for the 2020 democratic nomination. he made climate change the central theme of his campaign. he says on that issue it was a success. had he plans to run for a third term as governor an ohio man's dangerous way of doing yard work started this fire investigators are investigating the cause of the blaze after reports say it was sparked by a man burning weeds with a blow torch. a official cause is yet to be determined no injuries were reported from the fire that involved three homes and two cars those are your headlines. >> thank you for that update when we come back on the show here, a worldwide exchange exclusive with former cke restaurant ceo andy puzder his take on the economy, the consumer and why the bond

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jay powell and company heading to wyoming today for what could be the most important central bank gathering in recent memory the big recession warning sign or not why some are not worried about the so-called yield curve

inversion. and plus, is it a bird or a bunny? the internet is obsessed with this question right now. we'll tell you why and viewers can see it right now that's why it's august 22nd. you're watching worldwide exchange right here on cnbc. ♪ >> welcome back to the show. here's how your money and investments are looking now. the dow and the s&p look to break three week losing streaks. to the bond market side of things, flashing that recession warning sign yet again briefly with a ten year yield that briefly dropped below that of the 2-year yield that condition called an inversion. you'll hear that term talked about a lot. the two year ten year spread is currently about one basis point

wide, 100th of a percent let's check on the asian markets as well. the notable one was probably the hang seng and hong kong. you can see they're off by about one full percent on the european side of things we got european manufacturing and services data out earlier. that's leading to relatively flat markets there the german dax was off and the ftse 100 off by three quarters of 1%. let's break down the major headlines set to impact your markets. first it's trade what else. china's commerce ministry out with new comments saying new tariffs imposed by the u.s. will lead to escalation this as president trump calls himself the chosen one in a fight to broker a deal with china. then there's the fed and chairman jay powell under increasing pressure as the bond market flashes that recession warning sign yet again investors are fearing the central bank will not act fast or aggressively enough to fight off the possible recession and the president backtracking on possible economic stimulus among them a payroll tax cut

here's what president trump has said over the course of the past 72 hours >> payroll tax is something that we think about and a lot of people would like to see that. >> i'm not looking at a tax cut now. we don't need it we have a strong economy. >> a lot of people have been talking about indexing for many years and it's something that i am certainly thinking about. >> i'm not looking at doing indexing and i haven't been seriously looking at it but certainly it's an option if i wanted to. >> the tariffs are working and they're eating the tariffs, by the way, there's no price increase. >> just in case some of the tariffs would have an impacts. >> when it comes to the economy, look no further than cnbc and against we'll have wall to wall coverage i'm looking at that wall graphic right now. and kicking off coverage by sitting down with the kansas

city fed president you can see that conversation at 7:30 a.m. eastern time as well a big day of coverage, a couple of days of coverage. well, to the markets, more retail names on the markets today after target's big, huge win yesterday. and l. brands you can see nordstrom up 11% l. brands up 2%. i will point out both of those stocks have been lagging a lot over the past year will that be enough to keep the good times rolling and support the rally and economy. joining me now is brian and chad, thank you for joining us this morning and brian, perhaps we'll start with you. >> okay. >> you heard president trump over the course of the past few days and then few weeks talking about maybe the waivering between what he is seeing in terms of how he wants to tackle policy the american consumer is still

strong we have seen all signs of that is that -- can we say that the economy can be supported by the consumer strength at these levels and will it continue? >> i think right now, yeah i think all the indications that we get are that retail spending is strong and for the first time we're starting to see an up tick in the percentage of consumers that want to spend more in the u.s. the recovery has been governed by more. you always watch a little bit is from a consumer sentiment point of view, when people feel really good about today but less good about tomorrow, americans, most people would say americans tend to spend like sailors on leave so the problem that you have right now is that's kind of the consumer sentiment thing that you're getting so we're a little worried. >> is it fair to say that the forward or the anticipated outlook by consumers is maybe tailing off a little bit and is that something to really worry about?

>> it's just at the gap between where they see today and where they see tomorrow is getting bigger and that's mostly caused by people feeling better about today. >> are you feeling that chad as you look at the markets the way that you do? do you feel as though the consumer is maybe showing signs of -- fatigue is maybe not the right word but are they pausing given what we have seen in the economy and the uncertainty around u.s.-china trade? >> it depends on what you're classifying as the pause housing is slowing down. morgan credit seems to be decelerating modestly. those are the major big ticket items as well as auto sales is stuck in the mud but you could see consumption patterns for the big box retailers has been quite robust hence the reason why is full employment and modest increase in salaries and whatnot. most of the concern that we see is external factors coming from china as well as the european union and we are seeing, though, a deceleration of economic growth here. >> where is that playing out more marketedly in the markets

right now? >> on the fixed income side, you can see that the yield curve, a lot of that behavior is coming from external factors. concerns about the european growth in deflationary pressures overseas here in the united states, we are growing. it's not robust. a 2% handle and we believe next year you can see a continuation of the deceleration. >> so growing is the key operative word there the u.s. economy is growing and it's better than many other places around the world right now. two reports this week, home depot and lowe's both of them showing signs of strength chad brings up housing in the past the american consumer used the house and home equity as a piggy bank and have gone out and spent to improve and do everything else are we seeing that play out more do you think the consumer is going to be tapping that piggy bank in home equity to go out and continue the economy >> to some degree. it's important to remember the majority of americans don't own their own home so it's important

to frame it with that. i do think with home depot and lowe's, if you look at the businesses historically they tend to move more in parallel rather than in inversion to each other. performance overtime they seem to get impacted by factors they're very economically sensitive. home depot has more exposure but lowe's called it out as an area of growth. if their outlook is cloudy and lowe's is less cloudy that may indicate to chad's point that you might see uncertainty in the housing market rather than the consumer side of the housing market so if you interpreted that data, you could say that, wow, the consumer is feeling pretty good but, you know, home building may not be as accelerated as quickly. >> so chad, you're a portfolio manager. where are the opportunities and where do you stay away from given the outlook to the consumer and the u.s. economy? >> we would be overweight consumer discretionary and only certain companies on that side in regard to the fixed income

market we would invest in high quality bonds. we would underweight low quality bonds like high yield and take on the risk and we'd stay more dollar scentric with our asset allocations. underweight emerging markets. >> all right thank you very much for that conversation on the consumer and u.s. economy we appreciate it all right. back to the broader markets, the bond market once again flashing that ominous recession warning sign the ten year note yield and the two year note yield briefly inverted late yesterday following the release of the fed minutes. sparking fears that the fed may not act aggressively enough to st stave off a possible recession but in a wall street journal editorial, our next guest said recession fears are overblown and the yield curve is no longer as reliable an indicator for recession as it once was >> john:i joining us now is the former cke restaurant ceo andy puzder

thank you for joining us we appreciate it you may have just heard this conversation that we have had with reforward to the health of the consumer if we do have a series right now where the yield curve is inverting, should we be as worried about it >> no, you shouldn't be. number one as your guest basically stated the underlying fundamentals of the economy are strong we have 2.1% gdp growth in second quarter the atlanta fed is projecting 2.2 in second quarter and we're nowhere near having a negative quarter let alone two consecutive negative quarters of gdp growth plus you have outside influences that resktieffecting the long-t yields and short-term yields long-term yields you have easing and the fed is holding long-term bonds and reduces supply and drives up demand which allows them to lower the interest rate. you also have $16 trillion of

negative interest rates, sovereign rate debt out there and that may be closer to 17 i know yesterday germany sold almost a billion dollars worth of negative interest rate funbo. that's obviously going to put a lot of pressure onlonger term u.s. bonds so that drives the top down at the bottom, the federal government right now, treasury is funding our debt through short-term securities that increases the supply of short-term securities meaning that you have to raise interest rates to sell them so you have pressure driving interest rates up at the bottom and driving them down at the top that have nothing to do with the strength of the underlying economy. so i agree this is not a sign of impending recession. >> it's been brought to our attention that in past yield curve inversions where the

longer term rates drop below shorter term ones that it's been driven by the fed being a little bit more aggressive with regard to raising short-term rates. it appears that most of the activity is the long end but there's not just central banks there's a genuine worry that there could be a slow economic transition for the global markets. if that's the reason, shouldn't we be worried about the recession indicator? >> there's good reason to be worried about global markets and less good reason to be worried about the markets in the u.s we're not seeing the growth we saw last year at least in the second quarter we'll see where q-3 comes in our economy remains the strongest in the world you'd have to go to negative gdp

growth retail sales are up and july numbers come in far more positive than anybody thought. we also have worker productive we're seeing increases through the first half of this year that we haven't seen in decades which means that employers can continue to raise wages without having to raise prices and we had it far more positive with respect to home sales than anybody thought it would be and 1.3 million more and there's no reason this growth shouldn't continue in the united states. it would be better if the global economy was doing better i hope our trading partners and people in other parts of the world do well as well but we're fine we're not seeing signs of a recession we're seeing at best signs of a slow down. >> let's talk about the labor market you were at one point a nominee for labor secretary. the conditions in the united states are supportive right now.

there is a skills gap that's playing out. there are a lot more job openings and people to fill them how could the u.s. remedy that >> it's important to engage in the programs that the administration is engaging in. more internships and more apprenticeships. encouraging people training in a particular job skill would be more helpful so i have to tell you, this increase in the number of job openings over the number of people unemployed is having a tremendous effect on american workers. salaries are going up and more people are working than ever worked in the history of the company and there's fewer people unemployed than in 20 years and 20 years ago there were 20 million fewer people to be unemployed so we're seeing pressure to increase wages

it's hard to get contractors in to get the work done because they can't find employees which is beneficial to american workers and employee ease and it's something that was missing during the obama years but now we have it under president trump and we're going to see that for quite sometime to come. >> while we have you here we'd like your take on another headline president trump is targeting another american business leader here this time this is the ford and general motors chief executives and executive teams over their emissions deal with california saying the founders of each company would be rolling in their graves as he praises another american company and it's ceo, tim cook can you take us through that relationship trump's relationship with ceos the president is confrontational with some. how do they deal with a

president like trump in the situations that they're in right now? >> i should say i own stock in ford and i have a son that works at ford so i'm in a bad position commenting on the situation with ford but in general the president will attack individual that disagree with his policies and he'll be supportive of people that support him and we're seeing with the problems with ford we're seeing a company that is going against what the president would like to do on environmental regulations with respect to automobiles and with respect to tim cook he's been very supportive of the president in many respects bringing a lot of dollars back to the united states it would help chinese owned manufacturers and hurt

apple so it depends upon policies you can't look at it as overall he's going to be positive or negative people that support his policies they'll support and people that don't, he'll call out and explain why he disagrees with them. >> we live in interesting times for sure coming up on the show, what's in your wallet? if you're the owner of the new apple credit card, you might want to think twice about where you store it the weird instructions for that fancy apple card coming up next. plus, think you can tell the difference between a bird and a bunny? the viral video that will make you think twice. it's kind of like blue and gold all over again and your stat of the day. 45 billion of so-called sub prime mortgages were originated in 2018. by the way that's the highest level in more than a decade.

and the number are set to rise in 2019. we're back after this. so, every day, we put our latest technology and unrivaled network to work. the united states postal service makes more e-commerce deliveries to homes than anyone else in the country. e-commerce deliveries to homes dear tech, let's talk. we have a pretty good relationship. you've done a lot of good for the world. but i feel like you have the potential to do so much more. can we build ai without bias?

how do we bake security into everything we do? we need tech that helps people understand each other. that understands my business. we've got some work to do. and we need your help. we need your support. let's expect more from technology. let's put smart to work. ♪ ♪

let's find out what else you'll be talking about today in time for today's top trending stories and frank holland is back with those. the apple credit card, i'm debating about whether to get this. >> it's a status symbol. i don't know if you want to call it a credit card it's more of just a way to represent the status that you are in the world a lot of people are getting their brand new apple credit cards and detailed instruction for their care they're coated in a matte finish and can be permanently discolored by leather or denim. >> or wallets or jeans they can also be scratched by keys or your chains. apple also cautions car users should avoid household cleaners

and solvants instead they're instructed to clean them there's also a digital option. >> they want you to activate it on your phone so that you use apple pay at a nfc device and put your thumbprint on there or whatever it is and pay for it. >> the best parallel here is if you buy a sparkling white range rover, are you going to take it off road >> no. >> you're going to let it sit in your garage. >> there you go. internet is in an up roar over this october cillusion is it a bunny or a bird. >> it's not even a question. please go on. >> you're outraged about this. it's a bird. we all know. it's just a subjectively creative camera angle that has people arguing that like to argue. like to go on the internet and debate something. >> the white tips are definitely

part of a beak. >> if it was arab b rabbit, the are at a weird angle. >> you can't see whiskers or a nose or a mouth. >> it's not hopping. >> it's a bird. >> we have defeated the internet. >> hopefully it doesn't go viral more than it has frank holland thank you for the updates on trending stories. coming up, apple ceo tim cook might be the president's favorite executive and it's all about communication. those details coming up next plus our expert guest weighs in on the yield curve should you be worried about a recession? worldwide exchange is back after this ♪ ♪ ♪ applebee's handcrafted burgers now with endless fries starting at $7.99.

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president trump called apple

ceo tim cook a great executive not because of apple's size of success. the president praised cook for calling him permsonally when there's a problem. most recently cook joined the president for dinner at his new jersey golf club resulting in 10% iphone tariffs getting pushed back from september to december the trump administration is appealing a court ruling that struck down it's plan to force pharmaceutical companies to discuss pricing in their ads they filed a notice of appeal yesterday though the ruling stated only congress had the authority to make such a rule. and the european commission is planning regulation to get eu citizens rights over their facial recognition data. brussels is looking to place strict limits on surveillance use of the technology. your headlines there back to the markets now, futures pointing to what should be a relatively flattish open if the futures move right now into the opening bell the dow would be down to a whopping 28 points and the

nasdaq down by 24. let's bring in the chief investment specialist at jp morgan private bank and this morning there's been so much talk about the yield curve inverting again but we have heard a number of people say that it is not a reliable recession indicator. should we be worried about a recession? >> we should always be worried about a recession in the sense that we are late cycle now and certain indicators were always going to get lighter we're not going to have 17 or 18 million cars sold a year that's going to get lighter and the economy is slowing we were at almost 3% last year 2.2% u.s. growth this year there are signs of slowing but are we going into a recession? no, that's not our base case at all. we're just trending toward growth i think when people look at the yield curve, we're all guilty of

giving it sort of a religious significance now in the sense that even the high priests of monetary policy are basing their policies on keeping a positive curve. i think that's important but i think we really have to look at the hard data as well of course there's international influences and political influences but the core of the u.s. economy still seems to be healthy. >> that's also the american consumer like you pointed out there. is it still going to be a situation where the consumer can power the economy? we already know consumer spending makes up about 70% of u.s. gdp. >> well, you know, i think that the consumer can power certain sectors of the economy

so we'll have certain sectors that are perhaps going to do better than others so i think i mentioned earlier, autos, that's going to be getting lighter. that's not where consumers are putting their money but one of the really good things about the consumer right now is we're still seeing job growth and wage growth in the bottom fourth tile of the population of the u.s. and that's why we're seeing the staple sellers and the supermarkets that are doing well on basic goods we are also seeing that in home improvement sellers. maybe we won't be selling as many yachts and luxury cars but i think that basic consumer, which is going to help in terms of income inequality in the u.s., that's a really good sign and that's why i think we see consumer confidence still showing very healthy levels. >> just a couple of seconds left what's the thing you'll be watching for jackson hole? >> i think the thing that we should be watching for jackson hole is how powell tackles the future of monetary policy and

one of the things that's really difficult about monetary policy, no secret, has been qe and negative rates and i think i'd like to see them talk about the behavioral influences. >> thank you for joining us. that does it for worldwide exchange this morning. squawk box picks things upright now. >> good morning, futures off to a slow start they're up earlier but 2 year to 10 year, a couple of basis points from inverting. but watch out, we also have earnings, economic data, fed speak all on the way, that could move the markets in today's session. president trump, always on this list of things, isn't he sounding off on a wide range of topics for the business world from taxes to the fed and the economy to auto makers, the trade war and the kind of ceo he likes best plus the return of sub prime we have new numbers on the billions of dollars of risky loans in the housing market.

it's thursday, august 22nd, 2019 and squawk box begins right ow good morning and welcome to squawk box on cnbc i'm becky quick along with joe and andrew we have been watching the u.s. equity futures and they have given back the gains we have seen earlier yesterday you looked at the market and the dow was up 1% and then the nasdaq was up by .9%. it was happening as we were getting good news about the consumer from companies like target and lowe's that were out there. this morning, you do see a little bit of a pull back and part of is because of what we have been watching with the yield curve.