two year sales comps there is underlying strengths here. >> they had a tough quarter in the second quarter the safety sectors still a bit higher and flat, utility and stables, watch that into the close. thank you for watching "power lunch." >> have a great weekend, we'll see you next week. welcome to "closing bell," i'm courtney reagan. >> we have breaking news, president trump meeting with the chinese vice premier let's have a look at stocks rallying sharply today on hopes there is a trade deal in the works. the dow up 1. 8%, the accident happen -- the s&p up 1.7%. we've been at or near those levels most of the afternoon let's get an update from the white house with the latest

developments. >> reporter: reporters are staged just outside the oval office now ready to go into the oval whenever the president invites them in for his discussion obviously a much anticipated moment at the white house. do they have a deal? do they not have a deal? do they have something in between that might be an interim step along the way to a deal we don't know as we stand here right now. a lot of rumors swirling around washington and wall street but the chinese delegation is here, they're in the oval office now. we expect to see the president at some point we just don't know exactly what they're going to stay stephen mnuchin came to the briefing room a short time ago, i asked him for an update on the talks and whether or not it's possible we get to the end of the day today without an announcement of any developments at all we declined to answer the question he said the talks so far have been productive and that time of

the day they were going in to brief the president but no specific indication from mnuchin that anything at all had been agreed to. obviously with the president in the room, he's the decider, the person who can set up the agreement or knock it down we'll see what happens. >> what have we heard from the president today? i know most of the tweets on this topic were earlier in the day. but the word "deal" has appeared in some of those tweets? >> reporter: right the president's framing on that has been elusive what we've heard from the president so far is that the china deal is a good deal. he's referred to it as a specific noun, but he hasn't said it's been signed or agreed to so the phraseology, there have been a lot of. marians looking over the phrase olg of the president's tweets today right now no specifics >> when this meeting ends, what happens next do we know is the entire delegation going home could they

be staying over? >> reporter: we don't know what we think might happen, a likely thing, would be to given some sense of when the next series of talks would be that would be a legitimate thing to expect this afternoon we just don't know they've been close to the vest throughout the day today kayla has been in the oval offense and wi office and will try to get some questions to the president. >> stay close, we'll be back with you throughout the show we are high by 1.8% on the do you today. for the week as a whole, about 1.2, 1.3% for the s&p and the dow. today erasing the losses we've seen for the week. joining us is lindsay. great to see you >> great to be here. >> what do you think the market is tying in here, the tariffs?

>> this is very optimistic reaction that we're seeing in the market today i think the best we're going to get is the october 15th date to increase tariffs on $250 billion from 25 to 30% gets pushed off and maybe just maybe we get the december tariffs pushed out further as well, which would be a great positive for the market of course. i think today's lift is being supported by what we're hearing from brexit, the consumer sentiment data is good so i think there's a lot out there to be happy about. >> which led to a huge move in the tenure, 174 we're trading at >> i think it also goes back to the fact that i think the ten year and 30 year, these notes got really -- they got the -- the yield got too low. so you're seeing the market correct here. >> we get more, potentially a rollback of the october 15th tariffs or the delay of the december, you think there's more room to run here >> i think the market action

you're seeing today is telling us that. look at the action you're seeing, the tech sector, the russell, you're seeing positive sentiment across the board in some of the places we've seen weakness. >> thank you lindsay is going to stick with us the dow is on pace for the best performance on june. some of the trade sensitive names on the move. >> only 1.5% on the new high new breakouts today. retailers have been good, terrific the last several months a small group breaking out, walmart, new high there, ross stores, new high, tjx new high, target another new high. these have been outperformers along with costco in the retail space. housing is doing excellent we hired the residential doing well, equity residential, home depot new high

pulte new high sher win-williams new high fastenal, core industrial, great guidance, goodnumbers. good for those concerned that industrial would be low. we're starting on a good foot for the earnings base case there is a truce, no more tariffs if they eliminate tariffs in existence, that could lead to a rally going into the close >> up 466 points on the dow with 54 minutes left. chip stocks also getting a boost. let's get to josh lipton >> if chip stocks move on trade headlines and for good reason, china is a good end market for these companies. they get roughly 40 to 60% of their revenues in china.

now on track for its best year in a decade. the trump administration also reportedly planning to allow the sale of some supplies to huawei, that could be a big deal too analysts estimate that huawei spent $10 billion alone on semiconductor components mitch steve says if a trade deal gets done, the semisector could surge 10%. we have about 53 minutes left to go in today's trading session. stocks are high erand they've been that way most of the session here, sitting close to session highs for the dow, hi higher by 472 points we've seen a high of 500 points for the dow at one point during the session. joining us is james lucer. we've seen a nice couple days of a rally, largely on the trade headlines, potentially positive news around brexit and actions from the fed can we trust this rally? we don't know what's going on for sure in washington yet

>> i think you need to wake me up when it's over. it will be nice to see a planned break in the escalation or rather a break in planned escalation but there's nothing but substance coming out in the deal the brexit news is good. consumer news is good. nice to have positive indicators going into the market. but the market trades on china for no reason. the market moves irrationally, every dig tick drives stock trading even if there's nothing behind the noise. >> if we get confirmation let's say tariffs were removed, would it be rational for the markets to move higher and by how much >> i think so. if you saw tariffs come off, that would show that the u.s. is confident in getting structural changes. the u.s. wants to see changes in the way that china works, less

predatory behavior directored against the u.s. the point of the tariffs is not to decouple the u.s. i think for stalling tariffs going in had effect october 15th, even fore stalling the december tariffs is good news. that means both sides want to back off and cool down it doesn't change the fundamental reality. it's the big risk on day but don't make big fundamental bets on the news. you have a lot of negotiation left to go with china. >> it seems like any given day we can pick our favorite data points, whether it's for arguing for strength or weakening, and the investor survey is pessimistic but you don't think we should be too concerned, why not? >> it's usually a contrary indicator we're seeing the

bulliness is below where it's been and the bearishness is above the historical average also. you're seeing investors aren't feeling too good about the market and usually that's a point you can enter the market. >> what about earning season next week? are you confident we've seen expectations come down enough? >> we're looking for a decline of 4.2% on third quarter earnings this is the thirds quarter in a row we're going in thinking we're going to see profits decline. i think you'll see flat to positive growth in the third quarter. the question is what's the outlook. with management teams going into the reporting period not knowing what's going on with tariffs in october and december, i have to imagine they're going to be somewhat pessimistic. >> james, thanks for joining us. >> thank you we are all over today's massive market rally and the china trade meeting currently under way at the white house after the break we'll look at

the market's range and whether today's surge is just the start of a push to new highs. >> later chamber of commerce executive myron brilliant has been critical of the trade development plans. and a check on our data tracker, an upside surprise with the tracker coming in at 96 versus estimates of 92 the best reads since july. stay with us "closing bell" will be right back.

welcome back to "closing bell." we've seen a dramatic market move off new brexit headlines. wolf hatz the latest what's going on? >> sterling has surged 4% in 48 hours as hopes of a brexit deal have improved uk and european risk assets love the news. especially the domestic focus and the irish market having seen hopes for uk prime minister boris johnson's deal lower on monday after reports of a sour phone call with angela merkel we saw a turn around in

sentiment yesterday following an upbeat between johnson and leo varamka, which was further cemented today at the eu level so what next well, the eu and the uk need to finalize a deal ahead of next week's eu summit boris johnson needs his north ern irish partners and the erg to back him until then and then crucially back him in a parliamentary vote on the deal he could probably survive losing a handful of voters in those groups but not have he lost support of the entire group. the move in sterling to a three month high shows the market is hopeful and there's no comments to destroy the hope today. though we're a long way from confirming it. >> there are several key dates coming up, what is the likelihood they'll get the

progress on any or all of those? >> i think there are lots of hurdles so you have to expect there's the chance of slippage market three month high. i spoke to a number of strategists today all say if they saw a deal go through we jump to above 135. 126 you're seeing the jump from the lows a week ago 120, we're not fully there to be pricing in a deal but it's dramatically improved in the course of this week. >> pretty major moves in the market. >> royal bank of scotland up 10%. you've seen some big moves so it shows the assets that could go up. >> we have about 44 minutes left of trade let's send it to mike san tonally. he has today's market dash board.

>> we have a pennant formation that's a hopeful interpretation of the index charts. playing hurt, that's what one large health care company is doing now, people say maybe that's going to turn for the better in need of relief, one area of the capital markets that maybe is looking wobbly. we'll look there and then boos from the crowd what does presidential popularity or unpopularity have to do historically with how the stock market does. looking at a two year chart of the s&p 500. making a nice move today, back to a three week high what's interesting is what has come before. i'm not a technician, i don't pretend to be and something like that is known as a triangle formation. you have higher lows along this period even though you're not making a new high. if you can break above this down trend level people are going to take that as a positive thing. the big message is, the market

has taken on uncertainty, anxious news items, concern about recession. a lot of things that were excuses that could have pulled back more and so far in august, september, october has not done so the s&p 500 against the total bond market index, all bonds s&p 500 in white you see this big outperformance over very sections of the year by bonds now a rapid coming together of the two. that obviously would mean more of a risk on tone. we're vernging in that direction that means bond prices are falling. >> to your first chart, if we break out of that particular down trend we've seen, does that take us to new highs all together or just out of the -- still within the 18-month trading range that we've seen? >> the new highs are so close. it's less than 2% away you would think that would probably be the impetus for a run at those highs then it's a matter of deciding

exactly what -- how much energy is behind it keep in mind, go back 20 months and you've had brief periods you got to the new high levels and it pulled back >> so you have a faint uptrend but one that has not gone off to the races once we touch new highs. we have to see if that pattern changes or not. >> what do you make of mike's analysis of the technicals, we've been in such a tight trading range. >> it's important to look at the technicals i'm not a technician either but it's nice to know what they're thinking seeing, because history does sometimes repeat itself what was interesting to me was the chart of the six month bond and the stock market performance, they've performed the same because of the uncertainty, there's something for everybody in the market. the bond market, they're benefitting from the low yields around the world but the stock market is also benefitting from the low yields here and around

the world, too so it's a little more volatile >> it's the paula abdul song "two steps forward, three steps back". the dow is higher by 477 points. the s&p higher by almost 51. we're still awaiting headlines from the meeting between president trump and china's vice premier. we'll bring you the latest ahead. roku outperforming a fresh upgrade from rbc what that analyst says to buy after a 300% run this year. the uaw strike against gm nearing the one month mark but are the two sides closer to a deal we'll discuss the latest updates anthd e costs to gm and its suppliers.

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adviser 100 list >> we're heavy in technology and we also own a fair amount of the financials. >> i have a lot of high net worth clients. they're comfortable having cash reserves i say our short term investments are high. >> we continue to plan accordingly as if if we're heading into a recession welcome back to the "closing bell." it's time to get the word on the street morgan stanley out with retail, calling it peak volumes, and prices that could lead to a structural decline they remain under wait on gap, maisys, kohl's >> apparently in america people buy 65 pieces of clothes per annum. >> yes >> i don't buy 65. >> i don't either. >> a pair of dueling notes on

square upgrading the stock maintaining a $77 price tag. however initiating square as reduce or the firm's sell equivalent with a $49 price target optimistic on increased reinvestment nomura says the stock is overvalued. roku going from $1.57 to $1.05 a share. roku, the stock is up 4.5% joining us now the analyst behind the call. thank you for joining us >> hello >> you had a buy, went back down to neutral and now you're back to buy talk us through those steps, why you downgraded and why you're back up to buy. >> mostly valuation calls both of these ways. this was a rocketship in the

first half of the year got adds high as $170 and pulled back to $100, that's an enormous amount of volatility. but you see that sometimes we liked the story fundamentally for some time and there's a great theme here we're entering streaming wars. we know that when we think about the disney launch and the apple launch and time warner launch, et cetera. i like netflix, the stocks hasn't worked well, but i like the stock. roku they're going to get advertising revenue as these streaming platforms try to market themselves. if you sign up for a streaming network via roku, roku gets a revenue share for that and anything that leads from the diversification away from the big three is positive for roku we like the story fundamentally we had a pull back we upgrade. >> talk us about the evaluation

compared to netflix which has pulled back because of valuation fears. >> net netflix pulled because of the streaming war. it's the streaming wars that caused people to be nervous about netflix. and they missed sub numbers. we think that created a compelling buying opportunity. roku is a different matter we haven't had any misses here we think numbers are reasonably set, a modest upside but again this is one of the best derivatives you can get you want to be the switzerland during the streaming wars. they are switzerland and the wars are occurring around them they should be paid by a lot of these arms dealers if i didn't ruin the analogy, that's what i meant to say. >> we understand what you were saying what do you make of roku here? >> it's a valuation call they have great things going for them, they're the switzerland like mark said, this is where

you want to be when you are in the streaming wars they're taking share, the revenue is growing hand over fist it's an amazing company. >> i know everyone mentions and you've alluded to it, they are agnostic to which is the most successful but they have the roku channel, is that a thing that you don't want to see be too successful and grow too strongly because then the rivals might think we don't want our apps and content available on roku's platform any more. >> yeah, i guess i haven't thought about it that way. you reminded me, though, there's one other new element to the story, which is roku has been an entirely north american, u.s. phenomenon to date they've announced they're going to launch into europe. i don't see any reason why they can't be successful as a device vender into smart tvs in europe

and the rest of the world but also as a streaming platform so there's new market play here that should help numbers, not any time soon, but next year in terms of the roku channel to date that's been nothing but goodness for the story because that revenue -- there's no revenue share, no ad revenue share they have to give off of that so it's been a nice tailwind to the story. i see your point but i don't think that's a real concern unless that were something like 50% of the streaming via roku and i don't think that will happen. >> shares of roku rose more than 5% 30 minutes to go and the three things driving the risk for action hope for progress on a trade deal with china as we wait for the president to reveal the details from the white house and brexit hope.

and sentiment over consumer data it is time for a cnbc news update sue has it for us. >> here's what's happening at this hour. u.s. troops in syria have returned to the area they vacated just days ago to monitor combat operations. five armored u.s. vehicles conducted a patrol bernie sanders says he believes president trump should be impeached he made that comment to reporters this afternoon, adding that senate majority leader mitch mcconnell should hold a trial if the house passes articles of impeachment. >> let me say today to mitch mcconnell, and that is if trump is impeached, and i believe he will be and should be, and when that trial comes to the united states senate, i hope mitch mcconnell will do the right thing for the american people. >> alexei leonov who became the

first person to walk in space has died he was a household name in russia he was 85 years old. you are up to date that's the news update this hour courtney, i'll send it back to you. >> the bravery to go into space ever, but particularly in 1965. >> it was amazing. everyone was rifted to it. >> i can only imagine, very cool let's send it to mike. he has his second dash board i get the theme, it's baseball, right? >> it is baseball. the championship series. it's been a week or so since i did a baseball theme playing hurt, that's what johnson & johnson has been doing so far we got an argument that the litigation might be overprized

you had few buy ratings, fewer than half back here towards the highs. now you're down here, people are getting warm to it, 61% or so have a buy rating. we have the gap between the stock and target price wall street is saying, maybe take a shot and partially i'm sure because that's the kind of stock you thought would have worked in this environment, long term record, stable, a lot of defensive stocks have done great. look at the valuation which is extraordinary for this company in particular trading at this kind of discount, trading below the market multiple. how much below it's never been this cheap relative to the market in the last five years, beyond that as well clearly they have fighting litigation wars on multiple fronts that's not gone away but the market itself has applied a good discount. if you like health care, in general, johnson & johnson should be a big piece of

deciding whether that's the way to play it. >> to what extent do you think there's political risk adequately priced in to this sector and stock. >> you look at j&j, the valuation numbers are stunning that's a 2.9% dividend yield this is the type of stock that people run to in uncertain environments like this, especially with the trade headlines we're seeing swinging each way every other day so this is a stock in a sector, health care that usually does well during uncertain times. so this is something i think you can get into at these levels the biggest knock against it is, like you said, the heightened political environment as we go into 2020 they have the big pharmaceutical business and the politicians are going to be focussed on cutting drugcosts going into that election period. but they're more diversified from some of the other pharmaceuticals with the medical device business. >> an $8 billion fine is no

joke that's the first litigation. they're still fighting many other trials as well. >> as long as they maintain that dividend, that's the key to the stock. >> we have 27 minutes left of trade. higher by 460 points on the dow. we're awaiting any news out of that meeting in the oval office between the chinese and president trump. coming up next we'll have your last chance trade. it's been a record day for apple as the stock hits new highs on the back of trade optimism and the bullish wall street call. as we head to break, here's a check on bonds treasury yields getting a boost, the ten year yield trading above 1.7% "closing bell" will be right back

welcome back some new headlines on the trade meeting. we have the details. >> reporter: reporters are still gathered just outside the oval office waiting to go into that

china meeting we don't have detail on what's going on in the meeting now. they've been holding for over 45 minutes and given the lateness of the hour it's possible we don't get the china news until after the market closes. they could go in at any second so we don't know for sure one way or the other but it's possible that an event we thought was going to happen 45 minutes ago doesn't happen until after the market close that's one thing to bear in mind a couple of things from kayla who's on the colony. she points out to us a couple things on the white house release of who's in the meeting, including wilbur ross, kayla has one source that said wilbur was in australia as recently as yesterday and returned to the united states for this meeting another thing she points out, that the chinese premier has a slightly different title in this

meeting than he has had in recent meeting saying he is a special envoy that is a title he held earlier in the year and had been removed from him, and now the white house release on this indicates he's being billed as a special envoy again which means he has more negotiating power and heft in terms of deal-making ability. that's interesting to watch, has his role changed here going into the oval office meeting. we don't know and there's always the possibility that the white house press staff cut and pasted an old list with old titles, which occasionally happens so we're reduced to reading tea leaves on this meeting which we expected would begin at 2:45, and may have begun but we don't know anything. >> we're getting news that they're going in as we speak more information to come any minute now stick around i'm sure we'll be

back to you soon. >> we have 22 minutes left to go before the market closes we have news on ebay >> ebay has become the second major company in a week to drop out of facebook's labor association. paypal bowed out a week ago. it's a critical meeting of the association down to 26 members now. in a statement ebay we highly respect the vision of the libra association however they made the decision not to move forward as a founding member we're focussed on rolling out ebay's managed payment on this record we have yet to hear -- >> apologizes. let's get back to more headlines rolling out of the oval office what can you tell us >> reporter: kayla is in the oval, reporting a substantial

phase one deal, i'm seeing it for the first time, will be written over the next three weeks, hope to conclude before a trip to chili. saying there are 40 to 50 billion in total ag purchases here mentioned in the oval office that's the detail we have right now. this is apparently what the president has just said as the reporters were being ushered in the room they went in about 3:36, it's 3:40 in the first two or three minutes the president has put out a couple details we'll wait for more as we get it. >> thanks so much. let's discuss this, we are at session highs, 514 points was the high we're hovering around that 1.9% just the other flash to come out, the president says we have come to a substantial phase one deal with china. going back to our earlier discussion, whatever the precise sub text of that deal is, a deal

is big progress, is it not >> yeah, look. the market is going to like that headline, no question about it remember, the president had insisted what he wanted was a big deal, a substantial deal he did not want the small deal the way this is being described is a substantial phase one deal. is that what was otherwise billed as a small deal or not? we'll have to wait for more nuance i'm looking at this as you're looking at it, and we don't have any additional facts right now but a substantial phase one deal seems to be an effort to do something in the interim without going as far as the full deal that the president had talked about at the outset of the trade war. >> thank you very much i know you're waiting for a tariff roll back or delay, but if secretary ross is back and he holds the key to the huawei licenses, does that give you any

more hope for getting a little more closer to something substantial? >> i mean, that's a big ask. >> okay. >> i think it's -- there's just still so much uncertainty here, even the announcement you saw the market pop on the news but it's come back to where it was before the substantial phase one headline came out here i think it's because we don't know what's going to happen. as we know things can change rapidly over the weekend that we have to go through and into next week i'm hopeful we're moving forward. but as far as getting answers to the problems that started this whole conversation, which is ip theft and benefits to state owned companies and things like that, i don't see us getting there, at least near term. >> just to dive into more of the details we've got. kayla, who's in the oval office at the moment saying president trump said we came to a substantial phase one deal subject to getting written so phase one deal, as opposed to

total deal, and it still needs to be written. kayla adds that will likely take around three weeks to write and will conclude around the chili trip happening in mid november we are 500 points on the dow, the market welcoming the news as it has all day, 1.8% higher on the s&p. every sector is higher on the s&p 500. industrials, materials, energy, and tech all up more than 2% themselves of course, those are cyclical sectors with significant exposure to china. let's see if we get any more headlines rolling out as we speak. kayla, who's in the room saying phase 2 will start almost immediately after phase one is signed no further details on what is separated out into phase one and phase two, but clearly ongoing progress mike has just joined us on set the market has been higher all

day, this is an extra sweetener to it, we've gotten confirmation that we've waited for all day. >> confirmation that's a deal, what you can characterize as a substantial phase one deal is a wide range of things but if there are now dollar values on ag purchases it means most likely tariffs are rolled back that's what the market wanted, the market wanted z deescalation, the market didn't want this fight in the first place. so we're not going to get to the end point that the administration sought, no big deal we've been living under this cloud of will we, in fact, have anything come out of the trade talks in october. >> are you surprised we haven't moved more we went above 500, now sliding back a little bit. is it because it's not a resolution clearly >> i don't know if that's what

it is. because there is a wide range of possible terms that could be reflected in that description of a substantial deal plus, i mean, i don't think it changes the overall economic picture. i don't think it was just trade holding this thing back. up 7% from the lows in the august, a percent and a half from all time highs. it's not as if the market has been truly pounded down and depressed going into this. it makes sense we're lifting from the pressured levels of august and september but i wouldn't get into the semantics of how many points for how many words. >> we have slipped a little bit, not to be too focussed on the market, we're at 1.6%, 430 points on the dow, the high about 520 points waiting any further headlines that do come out of this particular oval office meeting to what extent do you think the

president would not have been announcing the word deal to suggest that a phase one deal is complete unless he was confident it would be done or is this par for the course he's happy to backtrack if necessary >> reporter: this is a president with an element of showmanship to the presidency and likes announcements and likes the stock market and wants it to be higher so all of those give you the sense the president has a lot of incentive here to demonstrate that he is -- he has been successful we're getting just squibbs from kayla in the oval office who's suggesting they'll negotiate phase two part of the deal after phase one part of the deal she's saying both elements will have some tech transfer elements to them. and there may be a phase three if they can't get everything done in phase two. also saying that secretary mnuchin is discussing a currency pledge and says, quote, an

almost complete agreement on currency and financial services. so an almost complete agreement from secretary mnuchin, who's saying there is an agreement around transparency in foreign exchange again, all this coming from kayla, who's in the room and communicating with us. so we don't have the specifics until those are rolled out by the white house and the treasury department it seems like what the president is indicating here, he's going to take several bites at the apple, a phase one deal, phase two deal, phase three deal, somebody something on currency early, exchange early. so it sounds like what the president is suggesting here is they have an agreement to at least start agreeing on some things so we'll see where it goes from there and wait more details and wait the playback of the president saying everything that he's saying right now. >> one wonders what bargaining power is remaining if phase one and two are done, if you can get

much in phase three. we slipped about 130 points from the high of 519 points on the dow, which was five or six minutes ago. down below, now back above gains 400 points or so still a healthy gain, 1.5, 1.4% on the markets we're joined by the head of asia groups, who has been with us in the past michael, thanks for joining us, what's your take on what's dripping out of the meeting? >> so far i think this meets expectations in terms of what we know and it's not much yestert the broad outlines seem as expected and the real question is how much momentum will there be to get to phase two and three. >> from what you heard from the headlines, we know they're bare bones at this point, do you feel the u.s. has had to make any major concessions, or is it china that did that?

where are we based on the little information we know? >> it's a great question i don't think either side has really made deep concessions for the chinese side it's probably most one of pride the currency agreement is probably less than meets the eye. both sides have an interest in maintaining the basic stability of the currency. this reduces the tail risk around the currency and the tension in the area. but i don't view this as a fundamental break through. >> michael, kayla is letting us know that steven mnuchin confirmed the tariff hike on the 15th of october will not go forward. is that more or less than what you're expecting >> that's the bare minimum on what the chinese would have demanded as part of the concessions they're making it's interesting there's been no mention yet of the tariff hike on december 15th which shows how much

determination there is on the u.s. side to use tariffs to maintain leverage over beijing and have them implement the commitmentments they're making or hold their feet to the fire on subsequent negotiations. >> what's your take in terms of where we're settling, 410 points on the dow >> the idea there's a phase two, we haven't heard about december tariffs. we're still on the same treadmill. the market wanted to not have to worry about the next bit of progress so if we're going to get something short term -- if this looks like the may deal we walked away from when the s&p was at 2940, here we are at 2978, not clear why we should get overly excited about where we're headed if, in fact, those are the elements of what we're agreeing to right now. >> let's get back to amen. >> i want to spotlight something kayla is reporting from inside the oval office. reporting that the president has said this is a substantial phase one deal subject to getting it

written, and the president saying it'll take about three weeks to write this deal, and it will conclude around that trip to chili in mid november also have some headlines crossing here from dow jones treasury secretary mnuchin saying discussions are almost complete the president saying good progress on technology transfer discussions with china progress made on currency and foreign exchange so you have them saying things are almost complete, it's getting there, encouraging, here are the elements we're discussing but we don't have a written deal and won't for three weeks. so the president suggesting they have come to a substantial phase one deal but the deal has to be written still. we need to bear that in mind as we sort through what we know >> the market up 400 points or so, s&p up 1.4%.

so we have a couple s&p sectors in the red now, real estate and ul utilities. in terms of the market performance today, whether 400 or 500 points, the gist is the same, which is this week has ended better than it started. >> it has. >> on the topic of trade and investors have responded. >> trade being a huge piece of it, but not the only one you had the relaxation of markets across the world the lift in yields was something that took another worry point off the table. we have the 10 year at 1.75% it seems as if we've stepped back from the deep slow down fears we were in, exacerbated by the trade fight. we're heading into season. i think investor sentiments and expectations have been reset lower during the worry phase that tells you have the makings for the relief balance. >> we know the fourth quarter is

a strong quarter for the year. earning season is getting ready to start, we're focussing on the trade headlines. can you play fundamentals or do you have to focus on the macro headlines first? >> you can play fundamentals but of course you have trade in these macro headlines swinging the market one way or the other as we get through the fourth quarter until there is a resolution on the point of earnings i would say if these tariff increases or implementation in december is completely removed, that secures 2020 numbers much more we're looking for 10% growth in 2020 so that's what investors are worried about at this time in the game. >> is this enough to unleash a big wave of business investment or we need more? >> we need more. we need much more certainty on the topic of trade what are tariffs going forward, what is our relationship with china going forward? what are the rules of engagement

with china going forward >> if you want to look at one teaser for what earnings look like, huge move in the stock, up 16% because they beat expectation by a couple percent. if you go back to expectations for this quarter in june, they missed so i think the dynamic is in play, beat down expectations low enough for companies to beat them and it can come as a relief because stocks in cyclical sectors have come down. >> square is an example of that. the last quarter they missed, cut numbers and it's in a much better position now. >> as we hear these headlines coming out that it'll take three weeks to write the deal, what should we be understanding as far as risks to get that deal written as we understand it here today? >> well, there still could be some brinksmanship that would be in keeping with the pattern so far but since we're not talking about very, i think, deep

concessions on these issues, i think the real watch point here is what the two sides are saying about phase two. in other words, does some solid commitment on the part of china to discuss the more difficult issues is that conditional to getting to the end of phase one? that's what i would be watching rather than the details for example on agricultural purchases which i think are easy politically for both sides to agree on >> michael, thanks for joining us appreciate it as always. let's get to bob who has reaction to what we're learning out of the oval office. >> notice we are off the highs, i think the reason that' happening is because we basically got the base case that the markets were expecting, no move -- no increase in the tariffs next week. that was the base case everyone was expecting. what i didn't hear anything about -- i heard a lot of discussions about potential

future deals but no timetable for removing existing tariffs. at least i don't believe i heard that,that would have moved the markets. we haven't got that and i think that's why you're getting a little bit of a sell on the news i think the question posing in the last 24 hours, would something like this deal get us through christmas? get us to the end of the year? and the question is, of course, whether or not it really does end the trade wars i don't think it does yet. i think they're very alive we saw senator rubio on our air this week, very clearly indicating they're going to continue to attack the chinese on a number of issues, including auditing issues that the u.s. government has with chinese regulators over there. and about whether or not the u.s. government should allow pension funds to invest in chinese firms that don't share our values he made it clear he's going to continue regardless of the trade wars, regardless of any trade deal that these issues are just

as important and they are separate from a trade deal remember, this is not necessarily going away with that said we had a great week overall, all the big movers, caterpillar probably up 7% for the week right now. we had big retailers hitting new highs, wal-mart is up about 4%, home depot hitting a new high. the home categories doing well some of the residential reeds out there, like equity residential eqr new high we have defensive names pulling back on the week, consistent with optimism on trade for example, coca-cola is down about 2%, proctor and gamble are weaker merk and most of the drug companies. so the market's trend this year has been consistent with what's going on with the trade optimism back to you. let's get to amon who has

more coming out of the oval office. >> this coming from the prince pool reporter who is in the oval office at the same time. a couple of points here, one she's quoting secretary mnuchin saying no increase to tariffs to 30% on china also a direct quote from the president saying i don't think it should be a problem getting it papered we were discussing the idea this has not been in writing yet and the president said it might take up to three weeks to get it in writing and the president is saying it shouldn't be a problem getting it papered so expressing confidence they will get to a written deal they'll meet again in chili. the u.s. trade representative saying that huawei is not part of this deal there's been a lot of speculation about whether huawei was a bargaining chip here the indication so far huawei was not part of the deal the president also saying he

didn't discuss joe biden during the negotiations remember the president suggested that he believes that the chinese should investigate joe biden in terms of any wrong doing that he or his son, hunter, may have committed in china. there were questions about whether that was being conflated with the trade negotiations. now the president saying he did not discuss joe biden at all during these negotiations. so a couple of new elements there. the huawei one may be the most significant and the president expressing the optimism he doesn't think it'll be a problem getting the deal papered >> thanks very much. we are only up 1.25% or 330 points, the high was 519 points on the dow and we have just 30 seconds left of trade. key things you're watching into the close, we're slipping but healthy gains nonetheless. >> the market is fine at these levels some air came out of it because the agreement seems more contingent remember in may it was in the document writing process that

the deal fell apart. >> we should point out that none of the sectors are up more than 3% industrial still leads we're up at the close. if you're just joining us, welcome to the "closing bell." >> along with us mike santoli, stock staging a big rally but closing off the highs of the day after the u.s. and china announced a partial trade deal we're still getting the details and we'll bring them to you. >> as you can see a healthy open, we rallied at the highs of the session about 20 minutes ago to 519 points higher we were well more than 400 points higher for a lot of the afternoon but we did slip into

the close as the market was clearly fractionally underwhemed by some aspects of the trade deal we had the president announce from the oval office. the s&p up 1.1%. the nasdaq 1.3%. industrials, material, energy led the charge in terms of sectors, utilities real estate and consumer staples fell into the red, the only three sectors in the red the last five minutes of trade we'll have more in a moment but first let's get to amon. >> reporter: we're getting more from reporters in the room, this is significant from lighthizer, the u.s. trade representative in terms of what has been agreed to or not agreed to on tariffs. the president has not made a decision on tariffs about to go into effect. only the tariffs scheduled to rise on tuesday have been suspended. so a little bit more detail around that point from the u.s. trade representatives.

only the tariffs scheduled to go into place on tuesday have been suspended. treasury secretary mnuchin telling reporters in the room, we have a fundamental understanding of the key issues but there is more work to do so treasury secretary mnuchin calling this a fundamental understanding of issues but also suggesting that there is more work to do here as they proceed with this negotiation, which is apparently o in several phases, according to the president what he's been saying just now mnuchin also saying we will be evaluating, whether to rescind the currency designation on china. just a discussion of a currency manipulation designation on china. it appears this is a fairly substantial and lengthy discussion on camera we should see that once it wraps

up. >> thank you we appreciate you bringing us those headlines. until we get the full comments joining us to talk about the market rally or the fade going into the close, lindsay bell and joining us is megan shue morgan he joins us on the phone stephon i'm going to go to you first. i know we have partial headlines and information at this point but what do you make about these three phases that are to be papered and what the president is calling a substantial deal? >> i'm not sure it's substantial. it certainly isn't the complete and comprehensive deal that was being talked about if i'm not surprised by where we ended up in fact, i saved this yesterday in my comments with you all on "power lunch." the question is the timing and the likelihood of making real progress into phase two and phase three, which i continue to

believe is going to be highly problematic and as a result of that, the overhang on the market is not going to go away. and we're going to be living in a period of uncertainty until we see how those two phases play out. >> mike, what's your take as to how the market settled here, significant gains you have the risk on move in yields, which held decent move in the dollar as well. >> the broad set up was positive but you had six hours of presumably people buying more than they were selling on the hopes of a confirmation of a trade deal once it came into the minimally acceptable terms, meaning next week's tariffs don't go into effect, nothing on december. and we're still living with this, right out ahead of it the need to get further agreement. i think we're sold on the news, also it's a friday, we live in a fast moving news tape right now. i don't know that anybody making money this week felt they wanted to go into the weekend maximum

risk given what's going on. >> megan i think you're exercising more patience tell us what you make of the headlines and how you're positioning yourself going into the weekend on a friday. >> we've been hesitant to trade the trade headlines. when you think about where we were earlier this week and where we are today, we've basically come full circle in terms of trade sentiment. i think today is definitely a positive, certainly for the markets. i think what we would like to see is we would have preferred to see some sign of tariffs coming off we know they have weighed on manufacturing and starting to see signs they're bleeding into the labor market and services here as well in the u.s. and we know the impact has been significant globally for our part we have been neutral across our equity position as well as neutral to sectors. because we just see these binary risks around trade headlines as swinging sector positioning and

sector favorability. within those we've been trying to pick spots that could do well in a protectionist environment, such as things within -- sectors within industrial, such as defense contractors, off price retail, as well as more longer-term sector growth stories like cloud computing and things geared towards the 5g infrastructure buildout. so looking for areas of the market that can continue to do well if we oscillate within the trade environment. today is a good day. next week we could get more news that's negative. >> do you agree with that that we are literally still continuing this day-to-day focus on trade headlines or based on what we heard there, can we wait three weeks to see when this next phase one is written and we can focus on the earnings next week >> i think we'll focus on trade first and foremost but it'll be

nice to get the earnings from what cfos and ceos are seeing on the ground in real time and what they're expecting as the fourth quarter unfolds. when you think about the market you have to go to the bedrock of the economy which is the consumer, the consumer has been strong with an unemployment rate at a 50 year growth, wages growing in this bull market. the consumer is feeling better and they have a cash cushion of savings. thinking about that going forward, as long as they continue to spend, even if the economic environment slows down because of a massive slow down in china, i think the consumer can save us. >> do you feel good enough about the consumer to look at discretionary stocks >> exactly you can't just pick the consumer discretionary sector offall. you have to get more particular. i think the value retailers are where the consumer is going to continue to shop

the consumer is spending money on experiences, spending money on houses now that mortgage rates have come down so there are positive areas within consumer discretion but there are negatives like auto, some of the department stores. >> mike, a lot of improvement we saw in the yield outlook did hold into the close. >> it did. >> in a way some of the equities didn't which is important as we look ahead to next week. but also highlights how much of an impact the brexit improvement had. >> yes. >> as well as the china -- >> it's a global move. i think if you wanted to dial back beyond what's been happening with trade and today's particular market move, if you can be comfortable that bond yields have bottomed in august say the bottom is going to hold and they're going to trend higher the stock outsources to the bond market if the bond market is worried about slow down, that's an offset that we have to clear hurdles on trade to me the big threat was hard

landing in china not so much cost of imports or tariffs or effects on individual companies. so if you can say the recent uptick in global economic indicators is somewhat sustainable, i think the market can get comfortable where we're set up right now. >> whether it's improvement in china headline or brexit headline, the best performance is the dax up 4.2% which we know is linked to all of those trade issues meghan, are you considering buying any international equities at the moment >> i think if we get convincing signs that trade is moving in the other direction, i would point out that i don't think we should expect a grand deal that is solving all the u.s./china trade issues in one shot we took the steps on the way up so to speak, so to expect to take the elevator on the way

down and clear them all out is unrealistic. if we get signs we're moving in the other direction, areas in the market have the highest beta to global growth and trade so we would expect europe, japan to probably outperform and they are undervalued right now. or trading cheaper, at least relative to u.s. large cap u.s. small cap is another area that's gotten beaten down. so we would be looking to take baby steps perhaps into these areas of the market. but a lot of it does depend on the direction of the economic data over there. and it's been i would say mixed at best, which is maybe an improvement from all negative but still tenuous signs of stabilization there. i would like to see more convincing evidence that we are not going to have a broader slow down into services and the consumer in europe >> another headline coming out of the oval office president trump says the fed should cut rates despite this deal

whether it's the deal itself or the move we've seen in the yield curve today, the chances of the fed acting have fallen a little bit. >> yes the market has pulled in those probabilities a little bit for october. still seems like it's more likely than not at this stage there's a rate cut hard to see how much between now and october 30th when they meet is going to change in the economic data. but huh slight uptick in the economic data. i don't know that it'ssomethin the market is on pins and needles about. i'm not surprised that's going to be the tone that just because we got a trade deal that all of a sudden the fed can sit back. >> dow ended higher by 1.2% but we were considerably higher, we shed about 200 points in the last several minutes with the headlines out of the oval office we're going to continue to monitor and talk about the situation. in the meantime we'll bring in bob, he has more on the market

action and reaction that we saw in the final minutes >> that's the key point there there. we lost 200 points in the last half hour. the reason that happened is because the base case happened the base case was there wasn't going to be much more than a truce, an announcement there would be no more tariffs that's what the market wanted more than anything else. what would have moved the market forward into a rally position would be an announcement, a timetable, that the existing tariffs would be removed, but we don't hear that. we haven't heard anything more on that, it may be part of some future negotiations there. but there's nothing concrete and that's why the market sold off going into the close the question is now do any of these phase one or two negotiations include that. we're trying to figure out the growth picture in 2020 and does that change the fact that it's the trade war still exists, this isn't going to make it go away there are other things going, senator rubio was on our air

talking about it this week we had great moves up in most of the industrials, cat pillar up 7% apple hit a high, up about 4%. material stocks were strong. dow which has not been a big mover at all up about 5% and as the yields moved up three days in a row, goldman sachs moved up >> we're going to get to bertha in the nasdaq in a moment but first back to amon at the white house who has more. >> reporter: more from the reporting team to pass along here on hong kong which is a flash point in u.s./china negotiations the president saying we've discussed hong kong, things have toned down there, he thinks that's going to take care of itself but saying he did talk to the chinese delegation about hong kong. the u.s. trade representatives

says, according to reporters in the room, this deal should be a good one for hong kong interesting he mentions hong kong in a positive vain while sitting in the room with a chinese delegation which is sensitive to any discussions of hong kong of being any potential threat to their sovereignty. separately kayla reporting that huawei issues will be dealt with separately from the agreement. the president says they'll be talking about it and lighthizer also saying there's lots of time to deal with the december 15th tariffs, which is over the horizon. so they're talking about holding off on the round next week but plenty of time to talk about the december 15th round. the president saying it's not hard to get it done from this point. >> saying, quote, these issues are not overly complex >> it will be hard to see more of huawei given their

international allies have come around and had a harder position on huawei in the last couple weeks. a couple more nuggets from kayla, the president was asked what has changed and the president said that this deal is bigger, but why have me say this because kayla has just stepped out of the oval office and can sum up everything going on for us herself what can you tell us what's your main take aways? >> reporter: the takeaway is that the president is branding this as a major win. he is calling this a substantial phase one deal, saying that there will be at least two phases but this one needs to get written over the next few weeks that he and president xi are expecting to sign this deal when they meet for the apex summit in about a month's time he said it won't be too hard to get it across the finish line, at least phase one when i asked him what changed because the last time the vice premier was sitting across from

him in that setting in april he said at that time a deal was four weeks away. the president said a lot has happened in the intervening months and this deal is bigger he talked about the currency pledge that the two sides have agreed to in the wake of treasury branding china a currency manipulator i asked the vice premier to answer that question as well and president trump continued talking for a very long time and other reporters tried to get questions in i repeated the question over again and the vice premier said what changed is cooperation. you can read into that what you will we know there have been many phone calls between the two leaders and the negotiating teams as well as negotiating rounds, some productive, some less productive in the months that transpired. but certainly president trump is saying this is a big deal. it will help farmers, investors and the american economy so despite it not dealing with the intellectual property laws

being changed in china, which is the hard line that many of his advisers were taking from the beginning. president trump is branding this as a major win for the economy >> what was the tone like between the president, his team, but more importantly his chinese counterpart, was it better than past examples of this sort of gathering? >> it was not tense. it was deferenceable the vice premier waiting his turn when president trump was speaking there was less pomp and sir couple stance this time. in the past the vice premier has read letters from president xi and made grand pronouncements that were coming from beijing. he handed him an envelope at one point during the exchange but left it at that. the president's advisers were sitting there and interjected when they were called upon but certainly it was a more casual and -- a more casual tone and i could sense some relief in

the room specifically when ambassador lighthizer jumped in to talk about the december 15th tariffs. reporters were asking about the tariffs because that was left off the bullet points that the president read off and treasury secretary mnuchin was the one who said october 15th would not go into place and when asked about december 15th, which would be the most painful for the american consumer, you could sense the ambassador had some heart burn about the tariffs expressing relief by saying there is a lot of time to work that out saying essentially if certain advisers have their way, the tariffs would not go into play to hear that from the ambassador who's been a proponent in the lion's share of the tariffs up to that point i thought was a striking reaction. >> is the implication the december tariffs do not go in place decided there's ink on the

paper in three week's time on phase one of the deal? >> correct that's the right way to read this. >> mike, in terms of market reaction and the sell off into close, the last 18 minutes the markets haven't been open, the market got a grasp of what kayla summarized for us? >> i think so. there was always the possibility that there was going to be a reflex sell on the news response we got the good news we've been anticipating here then again we have further steps on the way to get something final. we're not free of it and not free of the general economic issues that this was not necessarily the cause of makes sense that you would have pulled back. by the way, the market, the s&p pulled back almost to where it opened we opened with a strong pop in the premarket that all that buying today was unwound. >> thanks to kayla who no doubt will be back with us with more great reporting. let's bring in myron brilliant

who has spoken with both delegations and met with the chinese premier. what's your take, how significant a step is this to see the october tariffs removed or certainly delayed the december tariffs still potentially due to come in >> we've had nothing but bad news since talks broke down in april. so let's recognize that these last two days we've seen something constructive, pragmatic from both governments a sign, willingness to get something done this is something i heard from the vice premier, who i spent 75 minutes with this week and from the u.s. delegation as well. this is a first step it's an incremental but important first step the tariffs not going into effect on october 15th, that's a good sign. and i think what you're going to hear over the course of the next few days is progress made --

>> apologizes, going to interrupt. here's president trump speaking moments ago. >> we have great respect for them and great friendship with him. and we've come to a very substantial phase one deal and i'll go through some of the points and then i'll ask the vice premier to say a few words, and any comments that he may have we've come to a deal, pretty much, subject to getting it written. it'll take probably three weeks, four weeks or five weeks as you know we're going to be in chili together, at the big summit and maybe it'll be then or maybe it'll be sometime around then. but we've come to a deal on intellectual property, financial services, a tremendous deal for the farmers. a purchase from 40 to

$50 billion worth of agricultural products. to show you how big that is, that would be 2.5, 3 times what china had purchased at its highest point thus far so they were purchasing 16 or 17 billion at the highest point, and that will be brought up to 40 billion to 50 billion so i suggest the farmers have to go and immediately buy more land and get bigger tractors. they will be available at john deere and other great distributors we're taking the purchase of agriculture products from 40 to 50 billion meaning in that neighborhood, from 40 to 50 approximately billion. what they've been doing now is i believe about 8 billion, right right now it's 8 the other thing i will say is over the last two weeks, a lot of purchases have started going back to our farmers.

and you've been doing a lot of business with us, which we appreciate very much but it real started a few weeks ago. but they intend to go up ultimately once the agreement is signed from 40 to 50 billion and that really from -- that was from a base of probably 16 billion and right now it's 8 billion. and the 8 billion was lower than 8 billion, they got up to 8 billion because they've been purchasing quite a bit over the last couple of weeks so we also have the agricultural structural issues. we have incredible progress on the structure and structural issues and bob perhaps you could discuss that please on agriculture and explain the importance of the strurk shl issues. >> i think as important is we corrected sanitary issues, bio

technology issues and it will be easier now for american farmers to be able to ship to china. and we've made some corrections on our side too that will help the chinese side >> and that's been completed and pretty much done >> that's correct. >> another big issue that we've come to conclusion on is currency, foreign exchange, and steve, do you want to explain that, please >> we've had good discussions with the head of the people's bank of china, their central bank we had extensive discussions on financial services opening up their markets to our financial services firm so we have pretty much almost a complete agreement on both of those issues and as you know, mr. president, currency has been a big concern of yours since the campaign. and we've -- we have an agreement around transparency into the foreign exchange markets and free markets

so we're very pleased with that. >> we've also made very good progress on technology transfer and will put some of technology transfer in phase one. phase two will start negotiations almost immediately after we've concluded phase one and papered it and i think phase one should happen pretty quickly. so you have intellectual property we have an agreement on intellectual property. financial services the banks and all of the financial services companies will be very, very happy with what we've been able to get. and i think china is going to be very happy because they'll be served well by these great institutions being able to go into china it's going to be a tremendous thing for banks and for financial service companies. agriculture agricultustructural,

very good for the farmers going from 8 billion to 16 billion, which was their all-time high, to 40 to 50 billion. so we're going to be up to 40 to $50 billion of agriculture purchases. which means the farmers have to work a lot of overtime to produce that much. that's the largest order in the history of agriculture by far by two and a half times and technology transfer we'll have some technology transfer in the agreement. but technology transfer will largely be done here and also in phase two. so we're going to start negotiating phase two after phase one is completed and signed and then there may be a phase three or we may get it done in phase two. so you'll either have two phases or three phases. we are very happy with it. we have great respect for china,

great respect for president xi i watched the 70th anniversary in great detail and it was an incredible event congratulations on the 70th. that was something amazing to watch. mr. lighthizer has done a tremendous job, all of my team has done a fantastic job the vice premier i want to thank you for beg being hear with your team you're a tough negotiator but it's something we realized was very important not only for china, not only for the u.s., but for the world. every time there was bad news the market would go down incredibly, every time there was good news, the market would go up incredibly. yet other news that was big the market didn't care they just seemed to care about the deal with the usa and china. and that's okay with me.

so we've had a tremendous, really, negotiation, a very complex negotiation but something that's going to be great for both countries mr. vice premier, would you like to say something >> translator: firstly, on behalf of the chinese government we would like to extend our thanks to president trump for the congratulatory message for the 70th anniversary founding of the people's republic of china. we very much agree to get the

china/u.s. economic relationship right is something that is good for china, for the united states and for the whole world, and we are making a lot of progress towards a positive direction of the recent days, i have had very good communication with both ambassador lighthizer and secretary mnuchin and mr. president as you just mentioned we have made substantial progress in many fields, we are happy about it we will continue to make efforts. and thank you for this opportunity for me to speak up and all my colleagues are happy

about it. >> thank you very much it's a great honor i think that the currency foreign exchange agreement that we made will be a tremendous benefit both in terms of the magnitude of it and the terms of the simplicity of what we're able to do it'll make a complicated process much simpler, i think that in and of itself i see is something we've all been working for yes, please. [ inaudible question ] >> thank you, could i see that >> of course >> thank you that's very nice thank you very much. >> yes

nice that's this is for guys like john that aren't good with chinese. they have that magnified so fast your head will spin. that's a tremendous message, and thank you very much. i read this and i appreciate it very much. this is from president xi. >> yes >> and we knew that we were going to have a very successful phase one. it took us a long time to get here but it's something that's going to be great for china and great for the usa. we appreciate it very much please congratulate president xi thank you very much. >> thank you >> mr. president, i want to clarify on the tariffs. >> please. >> the vice premier has requested and the president has approved while we go through a

process of documenting this we will not implement the increase of tariffs scheduled to go in place from 25 to 30% >> they were supposed to go in place tuesday next week? >> that's correct. >> including the other ones. >> mr. president are we any closer to a complete end >> yeah, i think we're very close. i think this is a very important phase. a lot of things here -- agriculture will be completed when we bring it up to $50 billion, i project is going to be the number i don't know if there's a question as to whether or not our farmers can produce that much i think they can but they're literally -- i said it jokingly, i think i mean it, they're going to have to buy more land, which is okay be a good time to own land in iowa, nebraska and a lot of other great states they're very happy about it. but we're taking it from 8

billion, which it is now, it was about 2 or 3 billion, they got down pretty low. but if you take the highest it ever was was 16 billion and we're bringing that to 50 billion, so we're going from 16 to 50. so anywhere between 40 and 50. and that'll start very soon. they've actually already started purchasing you started purchasing a lot from the farmers we just got messages from the midwest. 20 billion >> 20 million tons. >> oh, 20 million tons tremendous amount of soybeans that was over the last couple of weeks. we got word of that. you know, we got word. we notice it, it goes quickly because we see a price go up a little bit, right? it's incredible the way the market works yes. that's right that's right

>> mr. president, how will this deal be enforced >> we're working enforcement right now. that's been largely agreed to, that's one of the things in the agreement, we have an enforcement provision. they're working out the final aspects of that enforcement position and that's something -- bob, do you want to say something about that >> sure. we're going to have an elaborate consultation process we have an escalation in various area ares so difficulties can be resolved both parties have allocated -- or have assigned various people, created a structure under it and we're down to the final details of what will happen if there's not a resolution, and that's kind of the final issue we're putting together but both sides agree it has to have a workable settlement mechanism and we're very close to that. >> with the u.s./china relations

right now, do you see that the u.s. and china can work together still? >> yes they're great. the relationship in certain ways may be better than it's been we've been through a tough negotiation. there's never been a negotiation like this. in all fairness, i give china tremendous credit because for 25 or 30 years they've done very well with the u.s. and now we're doing something jointly. we're doing it in a fair manner. i give china credit for what they've done over the last 30 years. tremendous credit. i don't blame china. i blame the people representing our country. now we have a deal that i think ultimately is going to be fantastic for china and fantastic for the united states. >> can you clarify is this a deal or progress towards a deal? >> it's subject to getting everything papered we've agreed in principle to just about everything i

mentioned, the different points and now we're getting it papered. i don't think it should be a problem getting it papered i think china wants it badly, we want it also, and we should be able to get that done over the next four weeks. we'll be in chili in five weeks we'll see in terms of signing when it happens. we'll do a formal signing with president xi and myself. but this is just something that's very exciting i'm very excited, actually, we cover a lot more territory than agriculture but i'm excited for the farmer because there's never been a deal of this magnitude for the farmer bob, do you want to talk about huawei >> the question is in this agreement we're not dealing specifically with huawei it's not part of the agreement that's a separate process. >> mr. president -- business

dealings with hunter biden >> we're going to discuss -- where is hunter? we're going to discuss where's hunter when i get out because i'll stop at the helicopter. right now in respect to china and to the vice premier we're going to only ask questions -- >> mr. president -- >> mr. president, how can you -- >> john? >> on that point, can you assure the american people you did not bring up joe biden in these negotiations you have not brought up that -- >> i have not brought up joe biden. china can do whatever they want with respect to the bidens, with respect to $1.5 billion going to somebody, that's up to china but we do have to look into corruption but no, it has not been brought up. >> the deal over the next three, four, five weeks won't fall apart as it's being papered? >> anything can happen that can happen.

i don't think it will. we know each other well, we've been negotiating this for a long time maybe it's a possibility there's something unable to get papered. i've been doing it for a long time, the vice premier has been doing it for a long time, many deals for many years both of us. his people are great professionals, and so am i i think the likelihood of it falling apart is not so good steve, what would you say? >> we have a fundamental understanding on the key issues. we've gone through a significant amount of paper, but there is more work to do and we will not sign an agreement unless we get and can tell the president this is on paper. i know the vice premier needs to go back and do work with his team but we've made a lot of progress over the last two days. >> and most of this is also known by the people in china, by president xi he's been following it very closely.

>> working together for over a year and a half now, can you comment on the progress of both sides? >> are you from china? >> yes >> i think the people of china have to be very proud of your team they are unrelenting i say that in a positive way but they're unrelenting. they're tough, they're smart, and they have negotiated a great deal but i think the people of china should be very proud of this team, starting with the vice premier, he's an extraordinary man. we've gotten to know each other well and everybody on my team respects your team i think they've handled themselves really well >> the december are they also suspended. >> the increase from 25% to 30% that will be suspended we'll be paying 25 but we're not increasing it to 30. and then you might want to

mention the additional tariff -- >> the additional tariffs, as many of you know, the second half, in december, that is scheduled into effect on december 15th and the president has not made a final decision on that, but there's plenty of time to make that decision and that is certainly part of the process that the chinese are working their way through. so the first one has been suspended. the second one is subject to the president making a final decision, but the way this timing works out, that will be well in advance of that date >> say it? [ inaudible question ] >> students? >> yes >> no, no, no. we're going to be very good to chinese students no i've heard this question many times before including from our own security people we want all the people that want to come over from china, we have

the greatest university system in the world and we're going to keep it that way one of the reasons it's great is we have a lot of students from china. we're not going to make it tough. we'll make it like for everybody else okay we'll make it -- i think that's important. i think -- steve, i think it's very important, bob, our universities are available, the world comes in, they use our universities, we have the greatest system in the world and china is not going to be treated any differently. i think it's important for you to say that to the people of china. our system is open, people get in based on merit. we have incredible talent coming in from china. they occupy a big space in our universities and we want to keep it that way. okay because there was -- there was a false -- there was false rumors going on that we were going to close the schools to china that is so false it's just false.

we've already exchanged, yes [ inaudible question ] >> one second. >> i think you've been very clear in your directive all along through the trade negotiations in your views on the universities >> are you going to do anything to assure the students >> yeah, i give them my word we want the greatest talent in the world coming to our great universities, harvard, law, princeton, the great wharton school of finance, all these great schools we want them coming here. there have been discussions about that, not by me. i end those discussions very quickly. >> rescinding the currency manipulation designation >> we'll be making a decision on that and evaluating it, although i would comment that assuming we

close the agreement and we have the assurances, that will be a big step in the right direction for our evaluation >> mr. president -- >> mr. president -- >> what about chinese business, do you still welcome chinese business >> we do we're doing a lot of business with chinese companies we have to be security companies and certain companies we have to be careful with and pay very close attention but we're doing tremendous business with china and chinese businesses we've tailed it off, we've purposefully tailed it off, but that will build up very quickly again. we expect that to build up to a bigger extent i think than even before >> when you talk about a big trade deal with china, is this what you envisioned? >> this is phase one, and it's a big part of it the farmers, the intellectual property, a lot of areas are covered here that, frankly, are

in great shape intellectual property, financial services is going to be a massive movement to the banks and credit card companies and all of these companies, including ownership interests. before you had to do certain things that made it very difficult for banks and institutions to go into china. china has really been opened up now for the first time to financial services, to the big banks and credit card companies and other types of financial services that's a tremendous thing. i think we have complete agreement on that. intellectual property, a lot of agreement, but we'll have some of that included in phase two. agriculture should be done i don't think the farmers can handle more than what they're getting. don't forget we signed a big deal with japan, that was a very big deal and a lot of that had to do with agriculture also. so the farmers are doing well. currency, foreign exchange we're

set. not only simplification but the importance of it technology transfer. so we're going to have some technology transfer here and some will be in phase two. we think we'll probably be able to conclude it with phase two but it may be phase two, phase three. okay you. >> the idea of doing a phase one, you've been saying as recently as early this week you wanted one big deal. >> because it's such a big deal and covers so much territory that doing it in sections and phases is, i think, really better we're talking about very big don't forget we covered fully agriculture. even in terms of structure issues and in terms of $50 billion of agriculture. so that will be covered in its entirety currency, foreign exchange will be covered in entirety financial services i think will

be covered pretty much in its entirety so the banks and lending institutions, all institutions are governed some technology transfer a large part of intellectual property will be covered so i think it works out to be a neat package and now we can focus on phase two. >> went to four, five, six weeks -- >> whatever it is. >> at what point would you raise tariffs again? >> we'll see only good faith and bad faith. i think we have a lot of good faith right now going on >> so no new tariffs in the foreseeable future >> we're going to start right away in getting this papered right now it's partially papered. much has been pretty much completed from the standpoint of paper. we think it'll take four weeks, five weeks, something like that. we happen to be together in chili, so that could be a point or not

president xi will be there and i'll be there. >> the last time the vice premier was in the office, you said a deal was about four weeks away i would like to hear how this time is different? >> i think we got to know each other a lot better there's been a lot of back and forth since that happened. we thought we had a deal and perhaps they didn't. it didn't work out that way. this is a bigger deal than the last deal relatively speaking, we're talking about big parts of it with financial services and agriculture. we talk about $50 billion in agriculture we never had that in mind the first deal we were thinking 20. now we're talking about $50 billion. so this is a bigger deal it's a big chunk of it but a much bigger deal we had in mind, certainly in terms of i would say financial services is bigger and more complete, intellectual property will be in both phases of the deal.

currency, foreign exchange we didn't discuss that much in the last deal now we're including it in this deal because a lot of things have happened in the course of the last year. so i think this is actually when you add it up going to be a more important deal, a bigger deal. and more precise >> it was agreed last spring as well -- >> now we have currency. the currency foreign exchange is included the foreign exchange aspect of it is much more complete now than it would have been under the other system and don't forget a lot of things have happened with currency and foreign exchange that we weren't talking about a year ago yes, from china? >> when and where would you like -- >> we're going to find that out. that'll be up to the vice premier and to president xi. so we'll find that out >> do you think this is a win-win where --

>> well, the united states has been doing very well china i think will -- i think this will be tremendously positive -- this is going to be a tremendous thing for china we've been doing well and i think we'll do better. we've been doing really well we've been leading the world in many aspects of what we're talking about. i think we'll do even better and i think china will do tremendously well with this deal this is a great deal for china, a great deal for us. >> $50 billion, is that an annual figure? >> do you want to define that, please >> it will scale up to an annual figure, yes. >> annual figure of 40, $50 billion. >> within the second year. >> over the -- less than two years. >> hong kong a big issue, or is that -- >> we discussed hong kong, i think great progress has been made by china and hong kong. i've been watching and i told the vice premier, it really has

toned down a lot from the initial days of a number of months ago when i saw a lot of people and i see far fewer now we were discussing it and i think that's going to take care of itself. i actually think this deal is a great deal for the people of hong kong to see what happened thing for hong kong. but it really has -- it's -- the escalation it has deescalated a lot from the beginning and we were discussing that >> on the list of chinese companies -- >> we'll be looking at the blacklist and making a determination as to which companies would be on that list. >> mr. president, if this deal goes forward, economic growth and et cetera. do you still think the federal reserve neetsds needs to cut rates. >> i do. i think the federal reserve should cut rates regardless of the deal because we are higher

than other nations germany is loaning when it has to be paid back they get paid. it's ridiculous. and i think that the federal reserve should cut rates regardless of how good this is, we have a great economy. but we have a federal reserve that's not in step with the rest of the world so i think they ought to get in step and if they were in step we would regardless of the china deal, the china deal is more important than the interest rates. but because this has to do with more than trade. this has to do with world peace. this has to do with getting along, the rest of the world this isn't just a deal on trade. this has to do with a lot of friction, bad things happening in the world so this is far more important than the federal reserve and interest rates but the federal reserve should cut interest rates absolutely. >> can you tell us about the impeachment process or how it

attacks deal. >> yesterday we had the biggest crewed we breck the record in minnesota. nobody has seen anything like that and you saw it and understand it too. abmy poll numbers are going i way up to the impeachment -- it's a hoax we didn't discuss it but i would tell them it's a hoax it's a hoax done by people that are losing and they want to try and use it to win an election and i don't think it's going to happen and i don't think china believes it's going to happen because if they did they'd rather deal with a sleepingy joe biden who is failing badly. he is not making it anyway but whoever does emerge on the other side, they'd be better off maybe waiting. but they also know that when i win the deal gets tougher. it gets even tougher and they expect that i'm going to win otherwise they wouldn't sign the deal it's very simple next >> putting tariffs out. >> i do like tariffs. >> what's your inclination then

did december. >> i think we'll have a deal that's a great deal that's beyond tariffs this is a deal that's a very important deal for china very important for the world very important deal for the united states. i think this is a deal that's beyond tariffs i really mean that i think that world peace -- you know there was a lot of friction between the united states and china. and now it's a love fest that's a good thing. but that's good for china and it's good for us but it's good for the world. the vice premier said the same thing and better than anybody could have said it he said this is a great thing for the world. he didn't say china or us. he said this a great thing for the world. and he is absolutely right perhaps you'd like to comment on that >> it's good for the whole world. >> the whole world is watching. >> yes, whole world is watching. >> and it's amazing. >> not only trade deal it provide peace and prosperity pan

development for the whole world. it's very, very important. >> he said peace and prosperity for the whole world. so it's beyond a trade deal tp it really is talk was getting tough rhetoric was getting tough. we have ships and they have ships. and we have planes and they have planes and you know bad things could happen stupid things can happen but this is great -- a great thing that's taking place. we have a very good bond pd relationship and i have very little doubt that we'll be able to get this thing finalized. it's not overly complex. and then they'll start phase two. but this was a very important deal for a lot of reasons. thank you very much. i hear a helicopter. i hear a helicopter i'm going down to louisiana. we have a totally soldout crowd in louisiana and hopefully the governor of louisiana who is not doing good job in louisiana.

hopefully he won't get the 50% we'll have a run off and you have a nice new republican governor of louisiana. i hope a lot of you are joining us are you joining us, john joining us to louisiana? did you watch last night did you enjoy it. >> you know. >> a lot of people enjoyed it john have a good time. >> president trump in the oval office the october tariffs on china will not be going into place though the december tariffs could still potentially be going into place phase one of the deal has been agreed albeit only verbally it will be papered and inked in the coming weeks expected to take about three weeks and large some large agricultural purchase. the market closed higher by 319 points on the dow. the hype of the session was 519 points we did slip a couple hundred points into the close. let's get back to kayla tausche in the room with the president outside the white house with all the latest, hi, careful kayla.

>> the president hailing it as a substantial phase one deal a first part of a potential three-phase deal that he says delivers on all his trade promises with china. a currency pledge on transparency a deal to have up to $50 billion in purchases of agriculture. the opening of china's market to u.s. financial services companies. and other foreign-owned financial services companies without chinese investors. he says the deal is not yet written and that certain other issues will be dealt with separately one of them being the licenses for huawei, another being treasury's previous designation of china as a currency manipulator. the president said it was better in phases because it dealt with such big issues. he is confident this time around it's different, that the deal will get written he and president xi he says while anything can happy feels good about the prospect for a signing in a few weeks time.

that's one of the reasons among many wilfred you saw the market rise on this news today. >> kayla, thanks so much outstanding reporting throughout the day. a couple much other points to note huawei not included in the deal the president saying the fed should cut rates regardless and the currency manipulation designation could be possibly removed that headline from secretary mnuchin during the comments in the oval office. let's bring in derek corpus christisers, the american enterprise institute focuseding on relations with asia derek, gauge for us what you think was achieved today, how secure it is and what's left to be done. >> well i do think something was achieved today, because if we didn't do this we were on course for tariff hikes and retaliation. you have to walk before you run. we only took a few steps they couldn't get to the deal that postpones the 12/15

are still on step one of phase one happened today. >> we listened to some of the comments as it was translated he said we had had good communication substantial progress seemed defer epgs what can you read further what he had to say about the deal went down on bap behalf of chinese. >> on the chinese side they were vrp alarmed by the president -- the president left osaka sounding like today. we have a huge deal it's beyond trade to world peace then he got angry at agriculture purchases and they were looking to avoid that that's lei huh's primary goal. take the tariffs off the table the chinese can survive a election year in the u.s. but don't want to be hit again the way president trump hit them in july and august. >> derek, what do you expect can be achieved after phase one is inked, assuming that it is, once that's done, is bargaining power out of the window from the u.s.

side. >> well, there will still be the tariffs list one, two, three, $250 billion possibly the first list for part of list four which was september 1st. the u.s. still has bargaining power. however i don't think you get trade deals done in election years. i think -- the democratic nominee will be attacking the president. the congress will be tense about china relations. i do think they'll finish phase one and talk about phase two but trade in an election year is tough for everyone at all times. and i think this is probably going to be it derek scissors thanks for joining us just under a minute left to. reflect on the market move sigh saw us open 300 points higher go for the 500 still a healthy 320 point gain >> healthy when viewed since sunday o wednesday's lows picked up well. and sell off did not compromise that i think the market wants to look on the bright side and say set the issue aside no longer a

threat next we can for tariffs if it settled on status quo for tariffs. i think it's okay for the market perspective. >> thank you your joining us courtney all week. >> chicago marathon sunday. >> thank you. >> check out the twitter page make sure you donate outstanding close. that's it for "closing bell." >> "fast money" begins right now. live from the nasdaq market site overlooking new york city times square this is "fast money. i'm melissa lee. trade esper tim seymour. steve grasso guy adami and jeff mills chief investment officer at brid more trust beginning with the story of the day stocks surge as president trump says we reached a substantial phase one deal with china but the market closing well off highs as the news came out. a tariffs will not go into effect on tuesday. huawei will be dealt with separately and the deal is not yet writtenups agreed upon in principle. let's get to kayla tausche live at the white house with all the details. kayla. >> melissa, the president saysis it's the first of a potentiall