[♪] >> announcer: this show has never been solely about investments. we talk about anything that affected people and their money. from fox business headquarters in new york city, the new "wall street week." gary: welcome to "wall street week." liz: i'm liz claman. anthony scaramucci will be back next week. it appears we are on track for

the fourth straight square of declining profits for corporations. gary: companies are still make money, just less than they were before. the question is can the markets keep climbing while corporate earnings keep falling. joining us is bob doll and troy gayeski. i think we have a lot to talk about. bob, why does it feel to me a little bit like 1999 or 2007 where we know stroks going up and the market is going up, but we worry this le end ugly? >> i think there are two differences. interest rates then were here. down as low levels which allows valuations to be higher. back to your earnings comments.

we cannot get a higher stock market unless earnings do better. the quarter we are just about finished reporting will be uh again. will it be enough? it would the market can't go up. liz: the bar was so low. if they are just scaling slightly above it, troy, don't you think that's interesting? every bull market needs continued catalysts. what are the catalysts. >> in the short term it's been central bang policies. global yields are so low. there are expectations the fed is not hiking anytime soon. but to bob's point, unless you see earnings fall through the next several quarters, that's where this mini bubble could get corrected because markets are dependent on the earnings per

quarter. gary: we are in a different interest rate environment than we were in 2007. but the fact that interest rates are so low. if we don't get earnings and see growth in the economy, what happens then? we'll not get the multiple expansion with rates the way they are. or will we? >> we just had the interest rate structure of the world went down another notch enabling p.e.s to gym another notch. i think that ballgame is in extra innings. we need the earnings. without the earnings the market can't go up. we had an earnings recession, it's over. we'll get modestly better earnings going forward. liz: brexit has only been mentioned in 40% of the conference calls for earnings. they are not really talking too much or blaming it.

does that mean we got delight or does it mean we haven't fully seen the long part of this tail of what could be a hidden negative? >> the biggest negative from brexit over the longer term is the potential for the dissolution of the eurozone. that was a big issue in 2011-2012. once you have one country leave, if they leave successfully, then places like spain and italy start saying maybe we should get out of this as well, but market are ignoring that, because they are seeing hyper loose monetary policy. there is no place else to go. so in general over the next several years how the eurozone resolves itself politically will be very important. >> we did not have armageddon with brexit. but we don't know what it means. the companies aren't seeing the impact yet because the economy hasn't seen the impact.

but you had a warning flag. stock prices go up. liz: bob said twice in the last couple minute we are through the earnings recession. tell us why you say that? >> there are two reasons earnings went down. oil prices down and the dollar up. liz: oil is still down. >> it's not careening lower with the bang balance sheets to worry about. if we resume the acceleration we would have to have another consideration. we weren't from 30-50 pretty quickly. i think oil will be between 30-60 for years to come. after oil fold, base building process is at a low level. oil will come and go but i don't think it's the issue. >> you see the correlation. you think there has been an impact in term of what the polls are saying with the elect and what the market shared with us.

>> if you look at the head-to-head polls. when hillary clinton moves up in the polls, the market goes up. when trump moves up in the polls, the mark the goes down. the market is saying we may or may not like hillary clinton but we know who she is. we don't like uncertainty. with donald trump there is so much uncertainty. is he really going to do a trade war with mexico and china? if he will get his act together and define what he will do, maybe the market are reflect differently. gary: they would rather have higher taxes -- >> markets don't like uncertainty. >> a known versus an unknown. with hillary you know you will get 1% to 2% growth as far as the eye can see. with trump we could get 3% growth.

liz: we should end by saying one of the top economists said this week on fox business that the economy isn't that bad. so who knows. he's a reagan democrat. gary: "wall street week" back in a moment. >> announcer: two of the smartest money mind lay out what they are buying right no

liz: welcome back to "wall street week." we are joined by bob doll and troy gayeski. you two have found ways to make money in good markets and bad. bob, what are the best ideas. >> as a u.s. equity guy, free cash flow is king. when a slow growth world companies have free cash flow, they can reinvest in their

business, raise dividends. without it i have one hand tide behind my back. number two, i want companies generating unit growth. pricing power. tough to come by if a slow-growth world. and geography, focus on companies that get most of their earnings growth in the u.s. we have been mediocre, but the rest of the world is less than mediocre. gary: how do investors know? >> you have got to do a little work to look at the income statement and add back depreciation. and there are services that do that. the sectors that general trait free trash with what? >> number one with no close second is technology. big-time free cash flow. liz: you don't think the runup has been too strong? >> these stocks are not expensive.

i prefer older, cheaper technology to new apple computers if i can call that an old tech company. qualcomm, cisco, these names still have fire power. gary: in your role at sky bridge you are looking at fund. it's been a difficult year for helping fund. but you are finding opportunities. >> we also think cash flow is king. but the difference is what we are investing in are asset backed by the housing market or commercial real estate market. so you see strong fundamentals and high yields. cash flows don't lie. as long as the housing market and commercial real estate doesn't collapse. the technical picture clarifies itself. one thing we talk about is what's driven the efficiency is

the massive regulatory reform that booted banks out of the business. there are complex rules that make it harder for them toker on the securities. helping funds are stepping into provide financing to the broader economy and giving investors a return. liz: real estate and commercial because they have long leases that can be counted upon? >> commercial has more upside given the prices and operating income growth. the problem is they are on the expensive end of the range. two or three months ago it was much cheaper. gary: explain why it's been so difficult and what does it mean going forward. how can they read through that saying the smartest guys will be the smartest guys again. >> the biggest problem has been

the event space due to the debacle in healthcare. that caused a lot of pain for the hedge fund industry. but since the crisis. anything you short has been a disaster. think about how much the stock market is up. when the stock market is up over 200% you are not going to make money on shorts. due to central bank policy, hyper loose monetary policy, you had higher correlations between securities that make it harder to add alpha and it's been challenging. liz: you like equities. wall street is littered with people who since 2009 have said we are going to crash again, and their bets have been the wrong way. >> the amount of negativism in cash -- it's uncertain. people just don't know what to do.

as a result cash has accumulated. when i go to retail broker and offices. what's the cash flow? 22, 26. there is cash everywhere. i don't think we have a recession coming anytime soon. maybe stocks don't go up, but i don't see a down side. gary: a lot of that, the stars of 2008. >> the last 17 years. so if somebody is watching right now and sitting with 35% cash, they are one of those clients. they say i have got to do something. what do you say to them to give them the confidence? >> the beauty of this business is not black and white, it's gray. let's get that 35 down to 30. take 1% of the cash and put it in the equity market. you have got a little more invested. you still have a very conservative portfolio.

>> this show is about how to create and preserve wealth. how do you make 10, 20%? if the goal is to make 10-20 percent in the next few years. there are now inefficiencies in markets that were here even a year ago mainly due to regulatory reforms, and that gives people a chance to make a reasonable return without getting demolished in the next bear market. we all know stocks will get hammered. >> when we have the next recession sure we are going to go down. it happens all the time. liz: troy gayeski and bob doll, thank you very much. more "wall street week" straight ahead. >> announcer: donald trump

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>> we are going to build our infrastructure. her numbers is a fraction of what we are talking about. we need much more money than that to rebuild our infrastructure. i would say at least double her numbers. we have bridges falling down. gary: that was donald trump on varney and company touting his infrastructure plan. he wants to spend at least $500 billion on infrastructure. that's almost double what

hillary clinton is proposing. charlie: his plan is -- it's all in his head. going to the market and borrowing $500 billion and putting the country into massive debt. president obama tried it in 2009 and unemployment got worse after he did the. it did nothing to create jobs. this reminds me of lehman brothers it's kinds of a lehman brothers moment for donald trump. i'm not saying he's imploding. he has real issues with his campaign. as lehman brothers was imploding as donald is having issues. they through a lot of stuff on the wall. they did all this dopey stuff to

stop the flood from coming and it never works. i don't think out liberalling liberal hillary clinton will help donald trump. >> as recently as thursday he didn't have the infrastructure plan that he threw out there on fox business on his website. trish: he read some of larry summers op-ed it sounds like something you would hear out of the left. folks get nervous when we hear about big spending by the government. because many of us do not trust the government to quite get it right. if he tweaked it a little bit, without a doubt we need improvement to infrastructure. but i don't know that it want the government selling bonds and taking on that kind of debt. perhaps we should look at

privatization of some of these bridges and roads and have corporations putting money on the line. gary: states go out there and sell muni bonds to build roads and bridges. there is the port authority of new jersey. for chris christie, the former brief him well on the use of municipal bonds. other thing is, and this is something republicans have to worry about with donald trump. his reflex as he's getting into trouble, some of his remarks about the gold star family members. his campaign is in trouble. what is his reflex to do? his reflex is go left, far left. >> this is the realignment of the porty. in many ways some of the policies he's talking about come from the left. you think about his views on globalization and free trade.

that's not a typical conservative view. that said, it will resonate with a lot of americans because of the state we are in. charlie: do you think infrastructure spending and massive amounts of debt, borrowing more is gog to resonate with americans? i would say no. liz: hillary clinton has her infrastructure spending plan. she wants to raise taxes on bigger business, high frequency trading tariffs. charlie: the trade-off is absurd. if you want to do an infrastructure thing like that, you have to pay for it. how do you pay for it? liz: entitlement spending. charlie: donald wants to increase entitlement spending. liz: preserve social security. gary: jeffrey lion said trump is

a man who is comfortable with debt. he has lived his entire business life having tremendous amounts of debt. and so i'm not agreeing with there is, charlie, but the other side of this is what's wrong with putting on -- trish: the debt. charlie: donald trump may like debt, but i can make a good case that donald trump does not understand. he said one of the most outrageous things i have ever heard from a major american politician. he said we can renegotiate the amount of money we pay our borrowers. we can renegotiated the terms of our national debt. that's called default. that's what he said. gary: bob doll says he believes in the last six weeks the stock market has done better with hillary clinton leading in the polls and has done worse with donald trump.

trish: i don't seat correlation at all. we have a global economy right now. and everything is interrelated. if brazil is bad within and china is weak, we still have trouble. trish: do not get what happened in the u.k. recently with the brexit. all the polls were one way. but people threw in the towel. you have an american public that is so frustrated with their government and so sick of all the shenanigans. they are saying i don't care. i don't care. at least -- charlie: the polls were pretty even. it was the betters who couldn't believe they pulled the plug on that. liz: it's a fox business * team. garygar.gary: we'll see you nex.

liz: bye.

good evening, everybody. i'm lou dobbs. the battle between hillary clinton and the mainstream media against donald trump and our middle class is escalating. tonight it's clearer than ever that the republican nominee is caught in a bitter battle against not only hillary but the establishment, the mainstream liberal media, the radical left, the globalist establishment, foreign gofs and radical islamists as well. nearly all of them however are in a panic about the possibility donald trump will become president of the united states. so president obama chose to