at foxnews.com/propertyman. i'm bob massi. i'll see you next week. [ woman vocalizing ] have a great weekend. >> announcer: from the fox studios in new york city, this is maria bartiromo's "wall street." dierdrestreet. reporter: welcome to "wall street." former reagan advisor david stockman is our spellings guest. deirdre bolton is standing by. dierdre: the u.s. economy looked strong, the commerce department released its revised second quarter gdp number thursday.

it rose to a 4.2% annual rate, higher than the original number of 4.1%. it will be the strongest in four years. trade agreements will be a big part of the future economic growth. the u.s. reached a deal with mexico earlier this week. it's trying to find similar terms with canada. in the past president trump has called nafta a rip-off and threatened to leave canada on the sidelines if an agreement can't be reached. president trump may impose a 25% tariff on $200 billion in chinese goods. both countries have imposed tariffs on each other's goods. president trump also pushing

europe in trade. he wants tariffs on all industries dropped to zero. the e.u. agreed to drop auto tariffs but the president says it's not enough. a strong read on consumer confidence helped the market finish higher for the week. it was a seller august for the indices all finishing in the green. president trump is warning google to tread carefully. on twitter the president accused google of rigging its search engine to favor left-leaning media outlets. he says he believes going the mistreats conservative ice and silences quote a very large part of this country. google denies the charges. dareporter: the gdp was revisedp

to 4.2% from 4.1%. the atlanta federal reserve. joining us is for under and chain of investment officer of the bonson group, david bonson. >> earnings growth is coming from the tax reform bill that pushed up capital expenditures. there is an increase in productivity. we were probably near the 7th or 8th inning of this bull market. tax reform brought us to the 5th or 6th inning driving corporate profits.

reporter: can you find any reason not to buy stocks? >> 2018 has seen a pickup in volatility. some of it is self induced out of this trade and tariff issue which i think was a policy mistake out of the trump administration. but volatility is normal in the market. that would be the one argument against owning u.s. stocks. fundamentally, profits drive markets. and the economic strength we are getting is very, very investable. dagen: is there anything on the horizon that you worry about. i noticed in the last week that disposable personal income in this country is up 2.9% year over year.

>> those are the metrics i'm not sure drive profits as much as we think. i would still argue that that stuff gets priced into markets. markets are discounting mechanisms. i look at the things i think are under priced in terms of their ability to go forward. the energy sector is deeply undervalued. much of the financial sector is undervalued. with some aspects under priced. we probably would not buy the full index right now. i believe there is some rich valuations out there, everybody talks about that. and i talked about it for a long time. i have been wrong in the sense it continues to go higher. dagen: in terms of apple, you look at the run apple had.

it was one all-time high after another. >> apple isn't sentencive it's extremely reasonable. apple mass the times of metrics you want. i'm treefg the amazons, netflix and facebook. you have to say it's priced richly. dagen: we have some details about the product announcement. would you buy apple ahead of the product announcement, sometime in the second? >> we wouldn't hold a stock we weren't willing to buy. we would be buying apple at these levels. but i don't know that the product cycle is the driver there. the market has an incredible way of discounting those things ahead of time. apple is a good idea for a value

stock relative to the balance sheet and free cash flow. dagen: david, good to see you. don't go anywhere. much more after this. >> announcer: let's make a deal. the u.s. and mexico striking a blockbuster trade deal. >> this whole thing about nafta >> this whole thing about nafta is much so you just walk around telling people geico could help them save money on car insurance? yea,that and homeowners, renters, motorcycle and boat insurance. huh.that's nice. what happens when you catch a fish? gecko: whoa. geico. more than just car insurance. see how much you could save at geico.com. i'm ok!

a hotel can make or break a trip. and at expedia, we don't think you should be rushed into booking one. that's why we created expedia's add-on advantage. now after booking your flight, you unlock discounts on select hotels right until the day you leave. ♪ add-on advantage. discounted hotel rates when you add on to your trip. only when you book with expedia. you may have gum disease and could be on a journey to much worse. try parodontax toothpaste. it's three times more effective at removing plaque, the main cause of bleeding gums. leave bleeding gums behind with parodontax toothpaste.

dagen: the trump administration looking to make deals with our most of critical trading partners. stocks moving higher when deals look likely, lower when it looks like tensions are escalating. joining me, advisor to president reagan, david stockman. the market for the most of part

had been impervious to all the tensions as they have been rising going into this year. >> i think the market has its head in the sand in terms of the overall thrust of protectionism coming from trump. on the other hand, this whole thing about nafta is much ado about nothing. there wasn't anything wrong with nafta, and what's going on now is negotiations because trump wants to have some kind of big p.r. stunt. the fact is what we have on the table will help mexican workers get $16 an hour. it will bring some jobs from china to mexico to make auto parts to send north. we'll raised the cost of you a toes and cars to american consumers and will be a real windfall for what i call the trade nanny in washington who will be businessing look at

30,000 auto parts for cars and ballistics and glass to see if 45% was made at $16 an hour or more and 75% was maid in north america. dagen: many people will argue it needed to be modernized baits was old going back to the 1990s and it does do things to open up markets potentially for american farmers. it provides intellectual property protections. even the "wall street journal" that was negative on the mexican slice of the negotiations. they go into things like extension of protection or gentlemen nictally noddified drugs. >> it's technical stuff down in the weeds that doesn't matter.

we import $600 billion a year and export $520 billion. there is a gap of $80 billion. it's not the end of the world compared to our real trade problems with china. dagen: let's call it what it is, these are deals being made by this administration with mexico. mexico held out as trump hates mexico and everything in the nation, not true. earlier in the week he said i love mexico and i love canada. my issue is we can repair relationships with these important allies, canada and mexico, even with europe. europe the trade minister for the e.u. saying we'll drop all auto tariffs. >> trump said i don't like that. we didn't have a problem with canada and mexico until trump started attacking them for stupid reasons.

canada. he's constantly going after the dairy program there. i agree it's a terrible government subsidized thing. but it's $6 billion a year industry. it means nothing to the american economy. dagen: but president trump is a politician and it means something to the people who voted for him. he ran on reapproving these trade deals. none of you guys in d.c. would have jobs if you didn't have great politicians winning these races. my point is, i talk to people who want better -- there was a woman on maria's show in the past week who sells cheese. she sells string cheese flavored with fruit, and she wants to be able to sell into canada more easily. >> that's fine. we have a 180% tariff on peanuts and tobacco.

we have a few of those agriculture protection thing too. but in the big scheme of things the, irrelevant political maneuver that isn't going to make jobs in america. the thing about mexico, of course they like the deal. trump is saying you have to raise wages to $16 an hour in mexico. that's good for mexican workers. he's saying 75% content. dagen: it puts us potentially on a level playing field with mexico. >> it's not even close. the uaw is $30 to $60 an hour. dagen: how is it not good. when you saw the release of the mexico deal the market cheered it. >> the market is delusional. trump is a clear and present danger to this economy with his massive deficits. dagen: we are going to get to

that. becauser indicator i looked at, you can't find one that's bad. so we'll talk about that with david when we come back. we'll be right back. >> announcer: stocks are soaring and corporate profits are booming but david stockman says it won't last. says it won't last. more david stockman

♪ hawaii is in the middle of the pacific ocean. we're the most isolated population on the planet. ♪ hawaii is the first state in the u.s. to have 100% renewable energy goal. we're a very small electric utility. but, if we don't make this move we're going to have changes in our environment, and have a negative impact to hawaii's economy. ♪

verizon provided us a solution using smart sensors on their network that lets us collect near real time data on our power grid. (colton) this technology is helping us integrate rooftop solar, which is a very important element of getting us to our renewable energy goals. ♪ (shelee) if we can create our own energy, we can take care of this beautiful place that i grew up in. ♪

dagen: corporate profits booming in the second quarter, rising 16.1% fueled by tax cuts, strong economic growth. those are the largest year over year gains in 6 years. back with me, david stockman.

is this sustainable? going to break i said you cannot find one negative thing to say about the economy. >> the profit boom is an illusion. it doesn't take intogether the one-time impact of a tax cut after four quarters and the rebound from the profit recession we had in 2016. if you go back to 2015, they dropped by 18% the next four or five quarters. now think rebound back and they would be $117 a share for the quarter. so that's 3.5% profit growth the last four years. when you put it in context it's not close to wait appears to be. and we are 10 years into a business cycle. at some point a recession is coming and profits will drop. dagen: we had a guest on

"mornings with maria" saying because this expansion didn't experience the corporate investment boom or learning boom or a real housing boom in most of of the country, that means this could go on longer. when i say i have looked at the quarterly growth numbers. current estimates for this quarter. wages growing, consumer optimism at an 18-year high. the average grob growth this year for the first 7 moist faster than it was last year. i will put it to you. tell me something bad that's going on right now. you worry about 8 months from now. >> whatever is going on isn't due to trump, it's just the momentum of the economy that's in a business economy. the 4.2% was a total aberration. you had soy bien so i -- you ha.

and uncle sam borrowed the money and gave the consumers a tax cut. dagen: there has been an acceleration in economic growth. >> it's one quarter. dagen: the 7-month average this year is 215,000 jobs. >> they keep revising the jobs data. the first six quarters under trump, and he had nothing to do with it. gdp growth was 2.6%. in the last seven quarters of obama, and he had nothing to do with it, it was 2.5%. there is no acceleration in the economy. we have an economy freighted down with debt. we have an economy that hasn't invested because the fed encouraged corporations to use

their cash flow on their balance sheet to buy back stock. dagen: investors aren't worried about the level of debt right now. they are worrywarts. they are paid to worry. and they are not because you still got yield on the 10-year treasury in the last week that was deep below 3%. >> in europe. .4. the french point 8. but the point is all the central banks of the world pivoted to qt. they are shrinking their balance sheets. they will be dropping $600 billion a year worth of bond into the market, not buying. dagen: i take issue when individual in this country, your average working folks, man and woman who are feeling good,

plenty of jobs out there, they are optimistic, they are going out to stores, spending money, their disposable income is growing and adjusting for inflation and people can't say anything good about it. >> i don't want to say anything good. you know why? we are burying ourselves in debt. washington is out of control. 10 years into the recovery we'll have a $1.2 trillion deficit. they are little entitlements run. they raised defense spending for no purpose. dagen: the president wants to freeze the automatic pay increases for civilian workers. >> i'm all for that. dagen: you just said trump is doing something good i'm all for it. >> i am all for that. but if you look at how much money he borrowed. the huge tax cut he didn't make any evident to offset.

he can't give the pentagon enough money to waste. and we are borrowing at this rate so late in the cycle. you know what happens when we get the next recession? we'll be borrowing $2 trillion a year. dagen: can you let me and my people enjoy the growth while it's happening. >> you have a few months. dagen: i'll say it's more than a few months. but i'm not going to argue it's a long weekend. more "wall street" after this. -i've seen lots of homes helping new customers bundle and save big, but now it's time to find my dream abode. -right away, i could tell his priorities were a little unorthodox. -keep going. stop. a little bit down. stop. back up again. is this adequate sunlight for a komodo dragon? -yeah. -sure, i want that discount on car insurance just for owning a home, but i'm not compromising. -you're taking a shower? -water pressure's crucial, scott!

it's like they say -- location, location, koi pond. -they don't say that. is the fact that it's very, very tough on bacteria, yet it's very gentle on the denture itself. polident consists of 4 powerful ingredients that work together to deep clean your denture in hard to reach places. >> this is fox news special

coverage of the funeral of john mccain. war hero, former presidential nominee and longtime senator from arizona. good morning, i am bret baier in washington. martha: i am martha maccallum we are here in washington where family and friends and two former presidents are getting ready to pay tribute to the man that they call the maverick. during a funeral service and washington national cathedral. everybody has been gathered and watching all the comings and goings. this is clearly a who's who and all of the people that supported and admired john mccain over the course of his many, many years. in military service and on capitol hill. bret: key members of the senate, the house, foreign-policy, dignitaries, the administration. we saw the presidents daughter and son-in-law, ivanka trump and jared kushner and cabinet members as well.as the hearse pulls up there was a stop briefly at the vietnam veterans memorial. where senator mccain placed a

wreath there in honor of all those that died in vietnam. her husband, of his spending five and half years in captivity as a prisoner of war. martha: these services, and life john mccain was always rushing around, this is about 15 minutes early, the arrival of the hearse at the national cathedral. everything is better than on time. as they like to do things in the military. we're going to get ready for the beginning of this service. as chris wallace was saying earlier on our fox news coverage, this is going to be an extraordinary service. the music, the speakers, megan mccain. we will hear from early on in the course of this service, she has been very emotional throughout the course of the last few days. very close to her father. i remember one of the first times i met senator mccain, he pulled his phone out to show me

her picture is graduation from columbia. she just graduated and told me how incredibly proud he was of his daughter. and basically what a rock star she was going to be. she has been very successful obviously at fox news and she is at the view. she will speak of our father this morning. we'll see from former president barack obama and george w. bush paid the two men that beat john mccain. bret: chris, your thoughts? chris: i'm sure some people are looking at these pictures of people milling about inside of the grant national cathedral. and saying it does not look much like a funeral. and having been to a couple of state funerals, i can tell you, it is absolutely no disrespect to the person who is going to be honored today. that an event like this will come as something of a networking event. before the casket is brought

in. there are a lot of people here. they have not seen each other, want to exchange pleasantries, want to do some business. i promise you, john mccain did the same thing when he attended these. you will see there, is that ivanka trump and sitting there talking, there is john bolton, the presidents national security advisor. and they are talking about whatever is on their mind. whether it is social, business, at a certain point as we get closer to the actual funeral, this is the way it is in washington. which is people are talking to each other and either doing business or catching up and probably sharing in a sense, of a wake, sharing some good stories, sometimes war stories of what it was like to deal with john mccain. oh