every day she had to put her body armor on. she was amazing warrior. to your point, president trump said she made the job glamorous again. a lot of pressure whoever fills those shoes. neil cavuto, we give you a little bit of a rally. neil: we're following the nicki haley developments. people are stunned at news and taking it at face value. they are be looking at housing market and housing-related stocks back up in rates. first on the nikki haley fallout, what happens now. blake burman at the white house with. reporter: seems every friday afternoon a departure would come at the white house come via tweet or some breaking news, in some other form. the white house moved to the press releases that were rolled out. today instead the u.s. ambassador to the united

nations, nikki haley, came to the white house, sat in the oval office, two of them alongside each other, laying out haley's thinking and the administration thinking now why this is the appropriate time for her to step aside. u.n. ambassador to the united nations simply put believes in term limits. she has been in government, in very high-profile positions for quite some time. six years as a governor the state of south carolina and nearly two years as the top diplomat at the united nations. unprompted in her remarks haley made it a point to say that this is not, so she can step aside and run against this president in 2020. watch here. >> for all of you that are going to ask about 2020, no i'm not running for 2020. i can rom miss you what i will be doing is campaigning for this one. i look forward to campaigning for the president in the next election. reporter: the two had hard things to say about each other

in 2016 during the campaign but the president could not be more complimentary of haley during the gathering inside the oval office. president said she elevated the position at the united nation. >> i think it has become a more glamorous position two years ago. i wonder why but it is. she made it a very glamorous position. she made it a more importantly, more importantly a more important position. so we have i can say many people want to do it, and they're very good people. reporter: president said he will name haley's successor next two or three weeks. haley stays on the job until the end of the year. not like her responsibilities are over with at united nations. however the president nominates needs to be senate cop firmed. no one knows what the makeup of the senate will be like next year, how that will play into that calculus. neil? neil: blake, this had been on

the backburner. she raised this with the president sometime ago. today is the day it became official. why is that? >> she had said or the president had said, rather, that she had made this known to him about six months ago that she wanted to do this. why did she chose today, choose today? not necessarily sure though when you look at the timing of it all the brett kavanaugh ceremonies and votes took place over the weekend into last night so that news cycle had sort of, i don't want to say ended but was on the downward trend i guess. nikki haley announcing this today, clearly picked it up from there. neil: thank you very much. blake burman at the white house. get the read from john hannah, former advisor to vice president dick cheney, foundation for democracies. john, what do you make of the timing of all this? >> the timing was clearly a surprise to everybody, neil but i've got to say a two-year mark is not atypical point for senior

administration official to leave an administration. so i take it largely at face value. she felt with a successful second u.n. general assembly under her belt a couple weeks ago, this was a good time to make the announcement and move on. neil: now the question becomes who is in her place. we have a little bit of time until the end of the year. take at face value, what she was saying, the president was saying. would there be a short list of people considered? would it be a bump up from already somebody serving in the administration? >> i think it could be any of those things. we're all speculating at this point in time. these are very big shoes to fill. she was incredibly effective in a very, very tough and challenging job. she did make it very high-profile and she was certainly the highest profile woman in this administration. so whether the president would like to replace her with somebody like adena powell people hear about, who worked for his administration, somebody

he and his family trust, it is certainly possible. there are a long list of senators and former senators who might want to take their hand at this as well. neil: you know i'm just wondering after the kavanaugh hearings and the precedent that was set going pack to whatever you were doing in high school whether you find many people volunteering for this as you would have? >> yeah, well, i think anybody who is going to be nominated to this kind of job is going to have to be thinking twice, particularly after the nastiness of the kavanaugh nomination fight, but i think there are still plenty of senior people out there with the cree endings dids who are more than -- credentials more than willing to serve. ambassador haley said the greatest honor of her life to go into the viper's nest of the united nations and explain the policies of the united states of america to the world. neil: john, watches made she

sometimes had act acrimonious relations with rex tillerson former secretary of state, less sew with mike pompeo. there might be some chafing in the back as u.n. ambassador, i'm not saying you're second fiddle to the secretary of state post or foreign policy post to the administration, you do have great public exposure et cetera, whether that came into play here, whether it was having to tow the line with the likes of a john bolton or a mike pompeo or this more in your face, aggressive foreign policy stance of this administration or that suited her to a t? >> i really don't think this was so much about be is stance. it is true that it was an extraordinarily unique first year of the administration which you had a secretary of state take such incredibly low profile that our u.n. ambassador, ambassador haley essentially became the voice of u.s. foreign policy to the world. neil: right. >> which is something clearly is

no longer the case as secretary pompeo has firmly taken the reins at the state department. neil: well-said, john hannah, thank you very, very much, my friend. we we get to our next guest i do want to take a peek at wall and broad. when the news first started going to the markets she was on her way out and leaving, there was a knee-jerk pop and things stablized a bit but i must stress there has been no real gyrations or force on stocks right now up about 33 and 3/4. the bigger issue what happens and impact weeks from now when the midterm election is full on. could this hurt the president with women voters? or does it help his case if he choose as woman to replace her? go to olympic media manager katy freitas, what do you think? >> i really don't think this will hurt the president at all, neil. we don't often see members of his cabinet, of his

administration go out in such flowery cheerful manner as ambassador haley is doing. that means there will not be a huge sway with voters, because she put in when she leaves two years of phenomenal work. she has done such an impeccable job at the united nations as a ferocious, articulate defender of america and has been amazing inspiration for young women across the country. to see her choose to leave, she said she will campaign for him, that she is not running in 2020 and they left the door open for potential administration roles later on. so you couldn't ask for a better exit for her. i don't really think women will look at this, but a woman who put her heart and soul into this for two years and she wants a little bit of a break. neil: i know you get asked this a great deal, post the kavanaugh phenomenon and nastiness on both sides, democrats are seizing on

the notion that women voters are furious and they will take it out on republicans. you could easily argue a lot of those woman voters are mops who have sons and might not take it out on republicans. >> right. neil: but this idea that it is automatically going to be anita hill all over again, i'm not so sure that is the case. what about you? >> i'm not sure either. i think one of the things that the left is perhaps forgetting is that women are not some amorphous voting bloc that all think the same, act the same, behave the same. women are vary and different. we have different experiences, we think different things whether left, center or right but i don't think it will play out the way they want in the polls. there are plenty of women who supported justice kavanaugh and believe he is innocent of dr. ford's allegations and they seem to not perhaps want to believe that or are ignoring it. neil: is it your sense, i know all the polls, tracking surveys

show narrowing of the gap between democrats and republicans sentiment who should run capitol hill narrowed considerably, i know it is volatile and moves a great deal, why we don't put too much stock in it, but is it your sense this battle four weeks from today will be a lot closer than earlier thought? >> i think it will be very close. traditionally, historically, when you have the my terms the party not in power does see a resurgence. at the same time you do also have the republican base very engaged because of kavanaugh's confirmmation process. at the same time you don't usually stay really fired up when you win and we'll have to see if we do get republican voter turnout because of this. statement, democrats are very mad. we've seen this. so maybe that will pure them to come out in larger numbers for midterm votes. we'll have to wait and see. these polls, neil, can be very, very fickle. neil: back to the latest departure, the planned departure

by nikki haley, much is made of the fact there has been great turnover in the administration, indeed there has been, what is clear to me, you keep track of this better than i, that dramatically slowed down. it was running at a frenetic pace certainly in the first year and slower and slower since. i'm wondering whether that gets as much attention? we think of it, sort of like, getting out of dodge and siege mentality and folks like bob woodwards and others when it might not be the case. >> you're absolutely correct, it was a very, very bumpy, turbulent ride for a while. people were coming in, leaving left and right. based on that, when we see someone leave, there is a lot of people who want to immediately jump on it being a negative thing this clearly does not seem to be that. it is amicable of the president makes it very known on twitter, if he is not happy with someone. that is not the case with ambassador haley. i think in this instance she is

simply choosing to leave on her own terms. she has done a fantastic job. he recognized that and is happy for her to go. neil: the evenly one who he made very clear is not really fond of is jeff sessions, the attorney general. >> right. neil: we have an egg timer there. katy, thank you very, very much. >> thank you. neil: much is said in corporate america when you have a staff change, it changes dynamic as little bit. maybe the president is getting more comfortable with the team that remains or the team that can come in. whatever the case, if wall street were worried about this it does have a funny way of showing it. i should hasten to add this is not industry and all 11 s&p 500 sectors wide. when you talk about housing and housing-related stocks, having nothing to do with nikki haley they're officially in a bear market. i like to follow some of the etfs or some of these special funds married to the housing industry. whether you talk about the i-shares home construction exchange or spyders that mimic

the s&p homebuilders they are both down in excess of 20%, which would be a bear market. that is then in the face of higher interest rates. more on that after this.

neil: there is a rule of thumb, not good for cyclical industries that dominate the dow, when dow feels particularly when auto stocks are getting hammered, predictably homebuilder stocks, anything having to do anything with that. looking at i-shares, trade weighted fund, that is down in excess of 20% this year, well into bear market territory. spyders on home building etf, down about 22% year-to-date. again, that shows you what was building as interest rates went up and became more difficult norfolks to afford a home, even though the rates are still historically low, the effect was real. we've seen it in auto and auto related stocks as well, that whole sector, not to this

degree. what to make of that, first real tangible effect of backup in interest rates. keith, what do you think of going on in housing and that arena, does that presage trouble in the market or is it and a anomaly? >> i don't think it is an anomaly, neil and here is why. they have interest rate pressure and these things have raw input costs, cost of wood, all the materials go into it, homebuilders traditionally have not been able to do a lot of margin protection. they're pretty much at the whim of the consumer, if the consumer is not buying it is one way ride south. neil: if it is riding south, you could make the argument it will continue to ride south, federal reserve will continue hiking rates, we're behind the curve, we have a long way to go for neutrality, put it more succinctly. if it is inhospitable now for

housing stocks, it will get more so, right? >> depends what you think happens with the 10-year treasury yield. remember, neil in 2004 to 2006, the federal reserve raised rates 17 times. we had a bump up and reality the economy is doing very well. this doesn't mean we'll keep going up. even if the fed raises rates we could see the 10-year-year-old back down. we could see a bigger issue we had 0% interest rates forever. what does ma mean? picked up bond prices, stock price, collectible cars and real estate values, to a point people said i don't want to buy at that price. at the same time we haven't seen prices come back down to where demand is. millenials haven't made enough money where they could afford a new home. so we have all these forces that just suggest some price adjustment need to be made. it suggests that it may be a

while. i do think that the cost of input is big deal as well. these forces stagnate the housing market. housing market had a great year last year. neil: you're right. >> reality the industry is lagging and has been lagging all year. i think more adjustment need to be made. i don't think it suggests we'll have a long-term bear market. neil: jim, thanks for reminding folks a 10-year note. that is not a rate where federal reserve can peg. they can peg short-term rates and overnight lending rate which affects one year bill and two year note, what have you, it has virtually know control what the market perceives of inflation are or lack thereof. accepting that at face value, we could see a yield curve longer-term rates despite puncturing to seven year highs could sort of settle it a little

bit, not move as aggressively what is happening on the shortened, and that could portend a slowdown, do you agree with that? >> i do, i do, absolutely neil. not to get all wonky but to put it in very simple terms the yield curve is like a seesaw. the 10-year is kind of a pivot point. when you have a market this way or that i with doesn't really matter. it is flattening out. that is means it will be normal function of trading and rate assessments. neil: i know what its happening with reverse, longer-term rates is almost recessionary or will be, when it is flattening though, at worst it can portend just sort of like a flat economic environment to mimic the curve itself, right? >> well, it can but don't forget, as long as the earnings continue to be good we're seeing things we simply haven't seen in a generation. that tells me there is still more money coming in and rising

tide races all boats even if there is not a lot of wave activity. why you want to be invested in the best companies as opposed to worst once right now. neil: an argument, jim, raised in "the wall street journal" or financial times picked up this theme a few weeks ago a rising rate environment can affect multiples on market and those earnings end up not being as good as they would normally be. in other words it changes the equation a bit. are you worried about it changing the equation to the point that it dramatically affects earnings maybe not in the quarter just completed but in the quarters to come? >> it does change things. a lot of earnings come from share buybacks and mergers and acquisitions and as interest rates rise, impacts what you can do. you can't borrow money cheaply for the share buybacks. cds rising a little bit. the on the fence investor may buy a few cds first time in

years. i doubt that will be a big thing. i think the big issue, neil, the economy is growing faster. the gdp is growing faster than level of interest rates. corporate earnings are growing faster than the market is growing. the economy is very strong. look at ism, service and manufacturing side, combine the things for last week, had the strongest reading in years. so the economy is still doing very well. wages are growing and this is another reason why i'm not calling for the death of the housing market. people are working, wages are growing, they're spending a little more money. i think the housing market may eventually be okay, may have some short-term pressure but beyond that i think the rising long-term yields do have an impact. i don't think they overrule the entire set of tailwinds that the market had with earnings, with economic growth, with employment trends very strong. neil: gentlemen, thank you both very, very much. good read what is we're seeing right now and remember rates are

rising to both these gentlemen's fine points because the economy is picking up steam. invariably the federal reserve can overshoot the market trying to address that kill that which is one of the reasons the president complained hey, hey, go slow, go slow. the federal reserve isn't changing anything so we'll see what happens, after this.

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>> i'm not leaving until the end of the year. my goal is we make sure everything is in a good place and for the next ambassador to come in but it's a great day in the united states and i'm proud to have been part of the team. neil: all right, as you have heard nikki haley is leaving her post as our ambassador to the united nations. she has been there two years, which is about the shelf life, longer than the shelf life of a lot of cabinet positions. she is leaving on her own terms. she let the president know about this months back. the president choosing today to make it all official.

the read about this from charlie gasparino of all this. >> she is like 500 mooches. anthony scaramucci. neil: she is set the standard. he was 10 days or 10 hours. >> you need someone that needs to understand how to read body language with the hand motion, she was nervous or hiding something. neil: who are we to judge hand motions? >> yeah. my guess she just wanted out. she did two years. did a pretty good job in two years most people said. she is leaving at a time when you can say the administration -- donald trump is doing a decent job lately. i mean he hasn't had a fight with lebron james in how long? months or weeks, right? he hasn't really had a twitter battle. he laid off rosenstein. he is focusing on the economy. he got through kavanaugh. he seemed incredibly presidential pushing through

kavanaugh. i watched him last night t was pretty moving and i thought it was appropriate the way he apologized. neil: despite all the talk about turnover in the administration it is dramatically slowed this year. >> it slowed. everybody thought kelly was going to leave. he hasn't left. i think he is like, he got his groove. he is not -- neil: got his team. >> yeah. if you noticed the crazies are kind of gone. there is no scaramucci. scaramucci was crazy from a personal aesthetic standpoint. he is out. bannon is not. there you don't hear much about, miller, stephen miller anymore. neil: i think changed too, the whole kavanaugh nomination, you and i got into this, it united the old republican status for a lack of a better term and the trump revolution, and they were united, joined at the hip, the mistreatment of kavanaugh what they felt was unfair treatment

period and they're now singing from the same choir book. >> it is interesting, he is never going to get the never trumps, bill kristols, all of them, just hate him but there were people that were sort of sometimes trumpers. neil: right. >> were kind of like straddling, they're conservative, they deplore the left, the progressive left and insanity, the mob rule of that, which by the way carries on every day on college campuses. we saw it front and center with kavanaugh. neil: you're right. >> they kind of came back into the fold. trump gave them something in return, acting normal for a period of time. neil: here is time where his stubborn streak can turn to his advantage. i was thinking of prior presidents. would they have stood by nominee let alone the heated accusations? i think good many, not all of them, i think a bum rap what

you're getting but get out of dodge. >> that is what is freight about donald trump if he is for you, he is 100% for you. i don't think i have a problem, or you have a problem with his stubborn streak but his crazy town. we don't have to live the last two years. neil: do you think he can tame the crazy town? >> he has been for last couple months. the republicans are shot preventing blue wave. neil: what is the latest you're hearing? >> all the republican activists feel energized by this they don't think it will be quite a blue wave. it will be hard to keep the house but they do think -- neil: if they do, i could be very wrong, burn this tape whatever we call it now, i think they will hang on, they will lose seats, not lose 23. >> if they hang on to that, thank donald trump and kavanaugh. because that is and the insanity, what was fascinating about this whole thing, neil, is the insanity of the left. these aren't -- this isn't like

bill clinton, this isn't really joe biden, jfk. this, these are dyed-in-the-wool progressive socialists who will do anything to get their way, including destroy some guy based on very little evidence. neil: a lot of them don't see it. i watch all the news, all the business -- you get a different view of the world depending who you watch. they can make a cogent argument, this will really hurt republicans with female voters forgetting you and i were old enough to remember the clarence thomas hearings, next year that so many women ran and won. i don't think it isnal gus. i just that argument fits today. >> anita hill's charges were pretty stark. she remembered everything. neil: only a few years prior. so this we're going back, whatever you think of this, we're going back almost 40 years. it was night and day. i just think to hear them, the

assumption that this monolithic group of females will vote one way misses the point. >> some, women have sons you know, worry about, will some sort of charge that pops out of nowhere 35 years later affects my kid if he is in a position of semipower? and plus the way it was carried out. the avenatti nonsense. just stuff kept coming out that made no sense. neil: he might have handed the president his victory with his client, you could making a an argument. >> i hate to break it to him, look on paper what went down, stormy daniels was a lot more credible that this other woman he is representing based on facts and what you know and common sense. neil: what also hurt the democrats who rallied around all of these women -- >> treat them all alike. neil: there was a huge distinction between dr. ford and deborah ramirez and finally miss swetnick. it is what it is. i find when consensus builds

around something like that be careful. >> remember the democrats have structural advantages. neil: i readily acknowledge that when i say this. >> burn this tape, if i'm wrong but keep it turns out i'm right. do you talk to anyone who says this keeps up republicans have a problem on their hands or reflection after good economy or good thing? >> most of my trading sources or investing sources are worried about marginal higher interest rates. what they worry about is this, that the tax cuts do not work as prescribed. you did a massive corporate tax cut. you basically took, i mean you, kept most of the loopholes in there and took the rate down from 35 to 20. so it is very, have he low for most corporations. that tax cut should create a supply side stimulus that puts people to work and keeps, keeps gdp -- neil: will it work in four weeks

to republicans advantage or do you need more time? >> as long as we don't dip below three, they can run on the improving economy. my point for further outthere, if the economy doesn't grow and continue to grow, this tax cut didn't work, then the republicans have two problems. they have two problems, lack of growth, lack of wage growth and will have ballooning deficit -- neil: you keep saying that, they have growth, wage growth. >> no it is not. 2.7%. neil: it has been average, it has been averaging -- averaging 2% under barack obama. >> last two years. neil: no, no. i have to catch you always lie. you always lie. >> no. liar, liar, pant on fire. >> you are comparing first two years. neil: you just make a general statement and expect -- >> obama was hand ad recession. neil: understood. i'm saying average growth around two. average growth closer to three. >> how many years trump been in

office? neil: he has been in year-and-a-half. >> take last two years of obama? neil: you could slice it any way -- >> that is logic. his last from years beats the last two years. two years. neil: i'm not saying apologies for anybody. you are, you are damning a recovery even you would have to admit is remarkable. >> i like it because it keeps going. that is what is good bit. you are basically saying that george bush's recession he handed obama he gets blamed for that. neil: no. i'm going for the numbers under each president. >> we had a deep recession. neil: average for all the caveats you mentioned i'm not taking sides. his average is lower. this guy has lot less time in office. >> reason barack obama got reelected in 2014 the economy was improving. wages were improving. they're right where they are now. neil: in 2012 when he got reelected, 2014 was improving economy. they still end up losing seats

the fact of the matter this growth is more substantial than the growth that barack obama was experiencing. >> no, the last three years, the last three years. neil: can base it on recession. >> last three years are the same. neil: you're incredible. >> i looked at chart five seconds ago. neil: i have a chart for you. >> put up wage growth. neil: we showed this chart. you know what? i'm going to show your wages. why do we do this? >> i touched something. one of those safe words, wages. neil: did the president flip over me? does the president flip over me? does the president flip owe me? no. does the president nip over you in no. >> he mentions everybody around here but me, feel the love. this incredible economic juggernaut continues -- >> wage growth, wage growth. we'll look at that, a lot more after this.

nah. not gonna happen.

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>> we are very well-prepared. fema is ready. we're already. i spoke with governor scott, spoke to everybody you have to speak to, hopefully we'll get lucky, maybe that won't happen but we're prepared. neil: and so is florida right now. 35 florida counties, for example, under what they call a state of emergency. this affects better than 300 miles of the coastline that are facing these hurricane warnings. adam klotz has the latest following this monster storm. it seems to get bigger by the minute. >> yeah it is not done growing yet, neil. it is category 2. it takes 111 mile-an-hour winds to be category 3. we'll get up to the category 3 status by the time it makes landfall. no surprise we have hurricane

warnings up and down the west coast of florida big bend and these conditions will be worse, covering larger areas with heavy rains and winds over the course of the next 18 to 24 hours. here is the path. you go from category 2, jumps up to category 3. approaching landfall early wednesday morning, making lan fall into early afternoon hours once the gets on to land it will weaken and bring all the rain and wind and storm surge as it approaches that direction. here is the hour by hour future radar. center of circulation. we're knocking on the door of landfall at 1:00 tomorrow afternoon. that is wednesday afternoon. right outside of panama city beach. everything on eastern half of the storm where the worst weather is. clear off to the western side. strongest wind are here to the center. heavy rains to the east.

that storm surge driving all that water. that will be off to the eastern side of this storm as well. again here is the motion. everything in this larger circle, those are tropical force wind, tropical storm force wind. which means 35, 45 miles an hour. that is enough to do damage. you get closer to the heart of this, that is when you get the hurricane force winds and getting up to 100 mile-an-hour winds right in that area, east of panama city beach. that is the current forecast. with all the wind, neil, we talk about storm surge really being a problem. typically is a little worse in the gulf. spots getting up to eight to 12 feet. that is one of the lasting things as the storm hits and moves on. this is not florence, it will not sit there for days and dump rain. and it will be wind and rain and that will be it, neil. neil: where is the storm been pretty erratic hurricane season but what is next.

>> nothing lined up. a numbers of gain only, we see a big drop-off by the end of october. neil: thank you my friend, adam klotz. brett kavanaugh first full day on the bench. taking up a number of cases watched very, very closely by the left and the right and timing of today's nikki haley announcement is stepping down, did it have anything to do with the brett kavanaugh fight and he is now on the bench, ruling from the bench, she has time to say well, i'm going to the bench? after this.

neil: markets are selling off right now, we don't know what the particular catalyst is. often time it is nothing. these are small gyrations within the big scheme of things here. the fact interest rates and housing etfs, home building etfs, i-shares are in bear market territory. we're reminding they're in bear market territory isn't helping anything. auto sector feeling close to bear market pinch, in other words falling 20% more from our highs. in a case of a lot of auto giants they are well into correction territory, more than 10 percent from the highs. realization is weighing on folks here. the 10-year note is 3.20%.

it had gotten up to 3.25%. something to watch. brett kavanaugh's first official day on the high court. edward lawrence with very latest how it is going thus far. edward? reporter: when he walked in the chamber, he looked toward his family in the audience, his kid and his wife. justice anthony kennedy is also in the audience here today. chief justice john roberts introduced and welcomed kavanaugh to the bench. they listened intently to the argument, the case, early this morning, 20 minutes into the first case that kavanaugh asked the first question. the case was what definition of violent force is. kavanaugh wanted to know, if you tap someone on the shoulder is that considered violent force. there was a bit of lefty. justice sotomayor turned to justice kneel gorsuch, pinched him, surprising neil gorsuch and asked if that would be considered violent force under the definition?

kavanaugh asked four questions. one to the petitioner, three of the department of justice attorneys here. now there were small group of protesters outside. nobody protested inside this event. the police inside reminding folks in there to be quiet. it is a federal crime to protest inside of the supreme court. there were protesters outside. first in the back. then they came around front the supreme court, before the police shushed them away. officers set up barricade expecting a large crowd which didn't materialize. the barricades were up so you couldn't get close to the front door of the supreme court. kavanaugh's tenure is off and running. neil: thank you very much, edward. former law clerk to justice samuel alito, barbara smith. barbara very good to have you. >> thanks for having me. nothing like baptism by fire, get into the first case among many. certainly distractions judges deal with prior.

how do you think he is going to fit in with the other eight justices? >> well, of course justice kavanaugh has been a judge for 12 years. he knows quite well how to participate actively in oral argument asking helpful questions. of course the supreme court is one of the few branches of government thinks long and hard, respectfully about important legal questions. he will fit right in with that tradition. well-reknowned scholar. he is respectful, thoughtful jurist. i suspect he will have easy time transitioning to first street. neil: he is one to pepper with questions, versus a clarence thomas who stays largely client? >> he is relatively active on the court of appeals, he tends to ask questions that move the ball forward and doesn't talk for the sake of hearing himself talk. he asks helpful questions that go to the heart of the case. i expect him to participate actively in oral argument going forward. neil: much is the made the fact

he is a conservative vote, to make capper on conservative majority. you reminded me when we last chatted doesn't always work out that way. there are very few 5-4 decisions on supreme court. >> that's true. neil: doesn't line up with political viewpoints? >> in criminal cases so-called conservative justices may vote one way that fracture the court. justice alito may vote one way or justice thomas may vote another. they are not partisan. they think long and hard about the legal questions before them. whether or not they agree with the legal out come, their goal is to reach the outcome the law requires. neil: is there pressure after contentious nomination that was brett kavanaugh's he is very aware of those on the left who are leery of him? leery of those on the right think he is a rock star?

so he wants to rebel from being typecast that way? how does that work? >> i certainly hope not. i think one of the great things about our independent judiciary is the fact that justices are insulated from those sort of political considerations. why we give them life tenure. we make it very hard to remove judges and justices. neil: i'm sorry, i wasn't clear. that is my fault, not yours. david david souter ended up being different than what george bush thought he was? >> people are sensitive to know what they're wanting to get out of justices. with justice kavanaugh and 12 year record on the bench and many years of public service you know what you're getting with him. expect him to be the type of man, type of judge he is in the past. neil: this is outside of your purview, you can ignore this, timing of nikki haley's resignation as our u.n. ambassador, after the whole kavanaugh thing was settled,

what did you make of that or is there a connection? >> certainly says to me the senate judiciary committee's work never ends. i'm sure they turn shortly to the nomination and confirmmation process whoever will replace her of the political process chugs along. neil: indeed it does. that was well-put. >> thank you. neil: first full day on the bench for judge kavanaugh, justice kavanaugh. we'll monitor that. also monitoring a 60-point selloff in the dow. cyclical stocks affected by trade, higher interest rates, are ones taking it on the chin, albeit mildly so for for the time-being. more after this. y? is he always a fiduciary? a good place to start is with an independent registered investment advisor. as fiduciaries, they live by a simple rule: always act in the best interests of their clients. that's why charles schwab is proud to support more independent financial advisors

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nikki haley, ambassador to the united nations, has been very special to me. she's done an incredible job. she's a fantastic person, very importantly, but she also is somebody that gets it. >> i want to thank you for that. i'm most excited, look at what's happened in two years with the united states on foreign policy. now the united states is respected. neil: all right. nikki haley is stepping down as our ambassador to the united nations. think of the difference how this was handled than, say, rex tillerson, when he found out he was losing lhis job, the presidential tweet. i'm so convinced that would happen to me.

where's neil? he was tweeted out of a job. anyway, what are we to make of that? the truth of the matter is, despite the drama associated with this and the momentary hiccup in the markets as a result of this, the firing and sort of dislocation at the white house has slowed remarkably over the last year. let's get the read from the "wall street journal" editorial board member. we also have moody's capital markets chief economist john lonski and deirdre bolton. it says something about nikki haley that there was this moment to say good-bye, something rarely afforded a lot of people who step down or -- >> right. even quinnipiac poll, something like 63% approve and this was sort of done between democrats and republicans of the job she has done there at the u.n. i think something like 17% disappro disapprove. this is as good and gracious a leaving as i think we have seen for this entire administration. neil: what is your impression of

turnover at the white house? much has been said about it, it's like a revolving door and it's bedlam and craziness, just nuts. might not be that way at all, or at least it's changed. >> it's my impression things have calmed down significantly. john kelly seems to be set, rod rosenstein, the president has made a commitment to him, and nikki haley, she's done something nobody does anymore. she's quit at the top of her game. everybody in business, politics, even media, stay too long. neil: overstay their welcome. >> nikki haley's status among the republican party and conservatives could not be higher than it is right now. i think she's got her foreign policy credentials and the great mentioner, she will be on the list for 2024. >> because she did have to say to your point, for those who are about to ask, i am not going to run in 2020. because she's done a good job, it seems. >> she will be available if another big position comes over, you never know what's going to

happen. it's a long four years. neil: absolutely. >> she's riding high right now. neil: we talk about four years. let's talk about four weeks, the midterms from this day. is it your sense this moves the needlon way or the other ahead of that? >> i don't think it does. i think brett kavanaugh, the controversy probably helped the republicans on balance, got them energized at least among those that supported kavanaugh. this isn't an event of any great importance. maybe whoever he appoints to this post might have some effect. we have to wait and see. neil: i always think far more important to the markets is the interest rates, that has a tangible impact right away. would it be an impact in the midterm? the interest rates backing up? >> yeah, it might. the interest rates are obviously going up like this are going to,

i think, stocks are in for a rough ride. it's not going to affect the real economy. the real economy can hardly be stronger than it is right now. that's not going to change. but with interest rates here going up, interest rates in europe going up, i think all that money, the quantitative easing pushed into risk-based assets, that will probably start coming down. if people feel the stock market -- donald trump always cites it as the primary metric, it would have an effect at the margin. >> we differ on one point. unit home sales peaked back in the final quarter of 2017, they're down. there's an index of housing sector share prices for year to date that's down 19.5%. today, that index is down by more than 1%. when home sales peak, the ten-year treasury yield final quarter of 2017 averaged 2.4%. this afternoon it's 3.2%. higher mortgage yields are hurting i think those first-time

home buyers that are having a great deal of difficulty coming up with sizeable down payments. neil: isn't it a reflection, higher rates a reflection of a good economy? what's happening to auto stocks, that's very real. but that's a sign of the strength of the economy. >> it is a sign of the strength, but i do think there's an argument to be made that if all borrowing gets more expensive, to your point, mortgage borrowing, i want a car loan or i want any kind of loan, i'm going to pay more on my credit cards, if i'm a consumer i will feel that. we also talked about oil prices. they had a big move, something like a 10% move in the past month. people pay more at the pump. that's yet another point. the fed, we have to assume, is going to keep tightening. i know you like to point out the context that if you have been alive for awhile and been a home buyer for a long time, these rates are still low but for millenials trying to get in, they are annoyed, they vote, plus we have kind of unforeseen

consequences or maybe none, we don't know yet, of the tariffs. this $200 billion that we put against chinese goods has yet to really be felt. maybe it will never be felt. neil: well, for auto makers and their parts it's being felt. >> the economy is strong, the unemployment rate is only 3.7%. but the last time we had an unemployment rate less than 4% in 2000, wage and salary income, the aggregate is growing by roughly 8% year over year. that measure right now is growing by less than 5%. so we're really not seeing that type of growth in income that we ordinarily associate with this very low rate of unemployment, something to consider. >> the ten-year treasury yield went up something like 40 basis points really quickly. that caught a lot of people out. >> the markets overshoot. neil: that is becoming an issue we didn't appreciate before. >> no, i don't know that the market's overshooting.

it's up so high, there's going to be a trip back down. these are all intangibles. the nfib, the small business federation, its measure of confidence among small businesses has never been higher. most americans work for small businesses which means you go to work every day, your business is good, business is strong. it's got to be a good feeling. >> the tax structure. >> how all this adds up and people's feelings about the state of the economy, the state of the united states going into the november elections, is an open question. most of the winds are at the people's back. neil: let me switch it around, then. this is a political question but if the consensus is wrong as it had been wrong on the markets, as it was wrong about donald trump getting elected in the first place, is it wrong about assuming republicans lose control of the house? if they were to keep the house, actually build their numbers in the senate, i would imagine that would be a surprise for the markets and since this is largely a conservative crowd, not across the board, a welcome one. >> here's what i see happening.

if that's the case, equities go higher but so will treasury yields and we can only hope that treasury yields don't rise so quickly that that cuts off the likely equity rally if the republicans -- neil: that's trump's biggest concern. that jerome powell overdoes it. >> inflation is well under control. inflation expectations were 2% when the unemployment rate was 8% back in 2012. they are 2% today, according to the tips market. neil: this is a more political question, but is there a sense that post the kavanaugh thing, strange bedfellows of the republican party that weren't talking to each other? i call it for want of a better term the bush status swing and the renegade trump ring. now maybe because of the fight they shared and the passions they shared on kavanaugh and his

perceived mistreatment, i'm not saying they're best buds, but they're singing from the same choir book? >> i would agree with that to a great extent, they are because the battle shifted away from him. extraordinary how in the past four weeks donald trump has more or less receded into the background and it's been more or less about brett kavanaugh. brett kavanaugh is part of the legal generation that succeeded robert bork. they were all aware of what happened to robert bork and his nomination process and whether it was brett kavanaugh, they were all part of that generation which most republicans and most conservatives support and agree on. those are the kinds of people they wanted on the supreme court. when it became a death struggle over brett kavanaugh i think you're right, a lot of the conservatives and republicans came together and saw this is, we are all in the same boat on this. by and large i think that's going to hold going forward. not in every case, but on domestic politics, there's an understanding it is the democratic party, the democratic

left that is trying to push the republicans and conservatives off the table. neil: we were reporting yesterday, george bush was the last president calling all these senators on the fence, and i don't think he's a big fan personally of the president. that's sort of uniting of forces. >> it is uniting of forces and i think before kavanaugh was confirmed, i think there was at least in my mind a little bit more of an open question as to what happens in november. now i do actually think the gop can hold on to what it has. neil: what do you think? >> i think you're right. i think this was an important event with kavanaugh. it brought the republican party together in a manner that democrats are usually solidly together. of course, there's probably no conservative democrats left but that's been the case for some time. >> republicans holding the house would be an astounding event if that were to happen. the question would be, would the

democrats decide they have to reboot their strategy, because they thought they had the house locked up. neil: yeah. might not happen. all right. guys, thank you all very, very much. again, most of the movement seems to be centered with what's happening with the ten-year note and with stocks as a result. perspective is everything. but i can remember when my wife and i paid per day for our mortgage. some of you are tired of that analogy and i'm old so i don't care. more after this. this place isn't for me. that last place was pretty nice. i don't like this whole thing. i think we can do better.

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for all of you that are going to ask about 2020, no, i'm not running for 2020. i can promise you what i'll be doing is campaigning for this one so i look forward to supporting the president in the next election. neil: i don't know if anyone was going to ask her about 2020 but she got it out there she's not interested. nikki haley is stepping down as ambassador to the united nations by the end of the year, giving the president plenty of time to find a replacement. he hopes to have one within the next couple weeks. she's still a gop star, no denying that. the timing of this announcement today uncanny given the whole

kavanaugh dust-up, the #metoo movement, trying not to compete with any of that and the president did know about this some months back. to the daily caller editorial director. vince, her future seems to be going. she's thought of very, very highly by republicans and democrats. you could make the argument the president could use her in a number of capacities but what does it look like? >> yeah, she's kind of straddled the line really well. more so than almost any other republican among establishment republicans and the trump populists and she has been a successful champion of the president's foreign policy agenda in the united nations. as for her future, it's really hard to tell. in washington, everyone is cynical. i hate to admit, you watch an event like today i keep thinking what's really going on here, why is she stepping away at this time, what's the thing leading her to do this. i will say one of the benefits we have in assessing this subject is the president of the united states doesn't have much of a poker face. so for him to sit there and to have very warm feelings for

nikki haley and for her to extend those back suggests that what we saw was a fairly genuine event, that the two of them are leaving on good terms, that he said he wants to have her back, and for now, that seems to be where we are. her future remains a mystery but i can't imagine she's going to stay out of the public limelight for very long. neil: nor did she simply just tell whatever the administration line, i mean, she had a very tough-minded sort of foreign policy view as well. she and the president, before he was president, had a somewhat acrimonious relationship when he was campaigning, then obviously they settled the differences, as did many with the president by the time he assumed office. but what always impressed me about her is that she would speak her mind, i think it was larry kudlow sometime back who didn't run some stuff by her and she took great offense to that and made it very, very well known. she wouldn't suffer those who might just do the normal inside politics and not say anything. she did. i'm just wondering what happens

right now. she chafed a little with rex tillerson, got along better, we're told, with mike pompeo. typically the u.n. ambassador serves not at their behest, but they generally are second fiddle to them. she did change that dynamic a little bit but what is your sense of whoever replaces her? >> yeah, she did have a rather big presence here and one more thing on the theatrics of this. the actual timing, they had this since the 3rd of this month, october 3rd, so they wanted to get this out as quickly as possible after the kavanaugh process was over because the last thing the white house needs is a festering sort of nikki haley will be part of the resistance and run against trump palace intrigue story. they wanted to get this out. that's why you saw the oval office meeting today and why she explicitly mentioned 2020, and she's not running. as to next steps, who will be the person who replaces her, guesses in washington are running wild. rick grinell is a name, he's

very conservative, very pro-trump, very much on the trump agenda. his name has been floated. even jared kushner is one of those guys whose names has been floated here, especially as you heard her today speak so well of jared kushner, sort of in a coy way mentioning out loud he's been a very successful for foreign policy for trump. neil: it must say something for her within the white house that normally when the president says good-bye to somebody, it's done via tweet. rex tillerson comes to mind. not in her case. what did you make of that? >> i made of it two things. i think she's well-liked among republicans broadly. i think the white house wants to keep her close. the other is, the president is not looking for any unforced errors here. think about how much energy republicans have right now, again, coming out of the kavanaugh process. they are thinking to themselves this is the type of energy they can sustain it, they can ride through election day. their job right now, the president's job right now is to make it seem like democrats are the ones who are completely out of control. if things are out of control

inside his own administration in the next few weeks, that's going to undermine his message and that's the last thing he wants to do. neil: thank you, vince. good chatting again. retired four-star navy admiral robert natter on what this means for foreign policy. if you think about it, admiral, they were on all the same page as far as how to react to the russians, deal with the chinese, deal with iran. ultimately everyone got together. very different from the tillerson days when people spoke out at different ends of their mouth. obviously the administration has to find a like-minded person at the u.n., or is that not a given? >> no, i think that that's an appropriate assumption. there's no doubt that she was very strong with respect to north korea, too, i would add. look, she's a great, strong leader as governor of south carolina. she's been, as you suggest, somewhat of an independent but very strong personality at the united nations, and i think like

you suggest also, she's admired by many in both parties. neil: you know, admiral, i always look at the chinese not only as a great military interest but obviously with this trade war going on, great economic interest. she walked that line very proficiently. by the way, as does mike pompeo. that's the new dynamic in the china relationship, isn't it, that it's both an economic and military threat. >> it is, and i might suggest also that the congress in bipartisan fashion just passed the guild act increasing up to $60 billion for international assistance to counter some of what the chinese are doing, which is essentially international loan sharking. neil: you know, this goes right to your expertise, the militarization that china has all these island that didn't

belong to the chinese, nikki haley was the first to speak out about that and do so consistently. i don't know what our response is going to be that we wouldn't countenance and i don't know what we would do if they continue doing so. i don't think they added to that but it was a worry and a concern throughout the south china sea and beyond that it's one after another that they have used sort of like it's military command centers. what does the future look like for that? >> well, neil, i spent almost my entire career out in the asia, south china sea. i was seventh fleet commander. those weren't islands they seized. those were atolls and reefs they created islands from. the fact that they are claiming these reefs and turning them into islands is ludicrous. on an international scale, this is just the biggest violation of international law you can imagine. neil: but they have done it, right? >> no doubt. it's going to be tough to undo

an island that's been built. you can hope for a big typhoon, but that's not guaranteed. neil: with china going forward, they are linked, i would think, you know better than i, on the trade issue and how to use that to negotiate something with north korea. do you see them as linked or distinct different matters that we pursue? >> well, they are linked to the north korean solution, no doubt about that. i would suggest that they've got a vested interest in having the peninsula nuclear-free also, because they are a little too close to that should it become a target. and they have no interest in other nations in the region and i won't name them, but friends and allies of ours also saying well, we should develop a nuclear capability. neil: finally, admiral, is it your sense now, the president

likes to talk about we are respected again in many places, we are feared again, which is a good thing, will that posture, do you want to see that posture continuing, because everyone ultimately, including nikki haley, they were singing from the proverbial choir book and obviously, whoever replaces her i would assume has to do the same, right? >> well, i think i like speaking softly but wielding and carrying a big stick. i would suggest that we are being more forceful and letting people know that we have a stick, and that stick is necessary at times. fortunately, we have been able to avoid using that stick and i hope we can in the future. but we've got to stand up for what we know is right, and stand up for the international law and international order. neil: all right. well put. admiral, thank you, and for your incredible service to this country as well. >> thank you, neil.

neil: let's take a look at the markets. down just a little bit here. the fact of the matter is, behind this, we have an interesting development in the housing sector, indirectly in the auto sector. two key areas that are affected by higher interest rates. housing in a bear market, autos following close. the fact is, there are over ninety-six

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now that you know the truth, are you in good hands? neil: all right. starbucks, the stock is surging now, little more than 3% on word about the takeover artist has disclosed a stake in the company. you know what that means. as soon as people hear about that, they say whoa, whoa, whoa, and start buying it. so starbucks up on indications he's taken a stake in that company. all right. we are still talking about interest rates, though, and stocks like starbucks notwithstanding, the concern is they go higher, stocks go lower and this has been the trend that has not been of late the market trend.

to to jonathan hoenig and gerri willis. the fear is this is going to accelerate. if you sell this market short based on what happens over day two or three, you pay for that dearly. will investors now selling out be paying for that? >> neil, something has changed here. we haven't seen this really for the better part of ten years now, a sustained move higher in interest rates. as you said, the velocity of this, the speed at which interest rates have begun to shoot up, we haven't seen this in quite some time. i'm looking at the 52-week low today, it is littered with bond etfs and that's one of the reasons why i think you have to be concerned. i'm seeing almost 180 new 52-week lows, only about 52 new 52-week highs. this says that now is the time to be very cautious in this market. neil: what are you hearing? >> look, one of the sectors that's getting really killed here is housing, right?

neil: absolutely. >> why? because people have to take out loans and mortgage rates matter to people out there. i got to tell you, this goes to a point you have been making all day long. there was a period between 1979 and 1990 where the average mortgage rate was over 10%. so it's not the end of the world for housing if interest rates do rise. look, there's more than one price that people are considering when they go to buy a house. yes, interest rates are important but also the price of the home. so that's what changes and we are already starting to see that as of september 16th the previous month, we had seen price cuts on 25% of the homes that were listed. we are already seeing that happen in the marketplace. people are making adjustments because of rising rates. neil: we have been leading that as the united states, the global market here. we have been a safe haven when you talk about the developing world and the problems there and emerging markets and the problems they're having and of course, in asia what was happening.

is that now in question? >> i don't think so, neil. listen, there are concerns about the emerging markets, the debt levels in italy, argentina, south africa and so on, but the money continues to come in. i just want to say wait a minute, perspective. since 1958, the average yield on the ten-year is 6%. when i moved to this country in 1982, got a mortgage with a 16% rate on it. no, it wasn't that my credit was so bad, that was the given rate at that time. all keep perspective as okay, we are about 3.25%, 3.2% right now on the ten-year. i think the thing that spooks the market is how quickly it suddenly jumped up. what it is fleereflecting is th strength of the economy, where we are right now. >> i got to take the other side of this. to say that well, the bloodbath, i think you are understating it. this has been a bloodbath in emerging markets and high yield, tesla at a 52-week low. these have been the stalwarts

that have powered this economy forward. neil: what do you see unfolding before you? >> well, look at the new 52-week low list. it's alcoa, international paper, general motors and ford. these are all the companies that are supposed to be helped by the president's tariffs, aluminum and steel, which are still in place. something is rotten with this economy and it belies the very good economic news that's been reported for quite some time. neil: gerri, what do you think? part of the argument is that we are still not settling anything with china so tariffs and all these other things remain in effect. walmart has been concerned about it. ford is concerned about it, gm is concerned about it. what do you think? >> i think it's been overstated and here's why. when you talk about christmas, for example, lot of people out there saying christmas is going to be lousy because prices are going to be so high because of tariffs. but what these people aren't taking into consideration, what my sources in retail tell me, is that look, those prices don't move as quickly as you think. most of that buying was done last summer.

possibly even earlier than usual with an eye to these tariffs to lock in lower prices. so will consumers, for example, ultimately feel these higher prices from tariffs, yes, they will. will it happen immediately, no. neil: ashley, everyone always says cooler heads prevail. that doesn't always work out that way. but that's the hope. what do you think? >> well, that's very true. how do we know where this thing is going. i think the market is telling you that it believes eventually, something will get sorted out but i do think we will see some price rises. we did get a loud warning from walmart. i was looking at some of the items they say could be higher this christmas and it spells bad news for the cavuto household. things like karaoke machines, jack daniels, coors light, black & decker power tools. these are the kind of stuff the cavuto household probably relies on, could bust the budget this year. neil: as long as they leave processed meats and cheeses alone. jonathan, it's interesting, you have been looking at this

phenomenon about certain issues off their 52-week lows. we talked about what's happening with housing and autos. is there ever a time when that bounced down, we have seen a couple other key inflection points, then it works itself out and the buyers return, people who have been concerned by a few days of downdraft are richly rewarded for staying in. are you saying those who do are making a mistake? >> neil, it has for the better part of ten years, right? any element is bad news -- i think the difference now in my opinion, i'm just trying to be a realist, you always say not right or left, just follow the money, it's green, it's what we're about here. the fact the news is good, for the better part of eight, nine, ten years, the news was terrible and the market was strong. now the news is strong and the market is starting to weaken. i take the advice from warren buffett, be greedy when others are fearful, fearful when others are greedy. the fact the market's weak and

the news is so good warrants caution right now. neil: all right. gerri, the argument is just sort of easing up a little bit, where are people going to ease up? you can argue that then it might be just more conservative investments but it's not as if they turn their back on wall street, right? >> well, we don't know, but that's never my vote. i think you have to stay and play all the time, right. i do worry about the -- look, it's a cost of doing business whether you are a household, a small business or a big company, the cost of money matters because we all borrow at the end of the day. so that's important to me going forward. i will almost be looking at that as much as i look at trade, i think, as an indication of where this market is going. neil: you know, this has been a very long, record long bull market, ashley. is this the stuff that undoes it? because invariably when we circle around and reassess it after the fact, we miss what was the catalyst. could this be the catalyst? >> that is true, neil. you get the sense, almost the psyche that someone has been looking, the market's looking

for a reason to sell off. charles payne always calls it the most hated bull market of all time. i think he's right. just ask jonathan. jonathan, you are so negative today. what happens if corporate earnings in this next season turn out to be great? what happens if we do strike a deal with china? could that be the next step? >> i can bring you back to ten years ago to the day, the bull market preceded the financial crisis at its peak. there was quite good news back then as well. my fear is we were seeing essentially the canary in the coal mine and all the hot issues that led the market like housing, emerging markets, high yield bonds, they are falling away. i'm also ready to eat my words if i'm wrong, given how good the news is. the news is good, you have to be somewhat cautious. >> canary is chirping quite happily. neil: that expression always confused me. i think it meant you were surprised to see a canary in the coal mine.

what's going on. all right, guys, thank you all very much. i appreciate it. the dow down about 53 points. more on that and who are the winners and losers, as we continue after this. (roger) being a good father is important to me so being diagnosed with advanced non-small cell lung cancer made me think of all the things that i wanted to teach my kids. (avo) another tru story with keytruda. (roger) my doctor said i could start on keytruda so i did. with each scan things just got better. (avo) in a clinical study, keytruda offered patients

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neil: all right. want to take you outside the white house here, where we are expect toiing to hear from secry of state mike pompeo who had lunch with the president today. he might update us with what's going on with north korea and china. he's back from asia. and of course, the news that nikki haley is stepping down as our ambassador to the united nations. meantime, getting the latest on hurricane michael, now expected to move soon into a category 3 storm when it hits the florida panhandle. joe, what are we looking at here? >> we are looking at the worst hurricane to hit panama city probably in their records there. a very, very bad hurricane.

now, this is a little bit opposite of florence here. as florence was approaching the coast, even though it was a monster storm and a strong storm, it was off its peak. this is going to reach its peak tomorrow as it's reaching the coast in the afternoon or evening, as a strong category 3, perhaps even a category 4 hurricane right around panama city. this is a very, very bad situation. on the bright side of things, i think the major cities of pensacola and mobile are going to escape. as far as tallahassee goes, they probably get 70 to 90 mile an hour winds there. the track, at the end game of the track it's very similar to hurricane kate in 1985. for those of you who lived in florida then, kate was a freak storm, a category 3 hurricane in the gulf of mexico mid-november. unbelievable. but it weakened to a 2 coming to the coast. this, of course, is october. michael is going to intensify.

this was a textbook case, folks, a lot of fake attribution out there by people who say how did this happen. you could see this storm coming three weeks ago. in fact, last monday, i was in san diego speaking to insurance adjusters and some lawyers and saying look for a hurricane to come into the gulf of mexico this week, and probably impact the southeast part of the united states, because this pattern is rolling along like this. so don't be surprised. the good news is i think this is going to be the last one. in the carolinas, this is going to move very quickly but unfortunately, it's going to dump three to six, locally 12 inches of rain in the areas that were impacted and devastated by florence, and that's a problem. so it's going to move rapidly northeast in the classic fashion, exiting between cape hatteras and norfolk probably saturday morning, out to sea south of new england probably friday and saturday. neil: all right, buddy, thank you very, very much. following michael very, very

closely. meantime, we are following another michael, mike pompeo, the secretary of state who is going to be addressing reporters. when he steps outside the west wing entrance, the north side of the white house, where he has just wrapped up or will soon wrap up a meeting with the president of the united states. of course, interesting to see how he weighs in on nikki thatlythat ly haley's departure. that's why capital one is building something completely different. capital one cafés. welcoming places with people here to help you, not sell you. with savings and checking accounts with no fees or minimums. that are easy to open from right here or anywhere in 5 minutes. no smoke. no mirrors. this is banking reimagined. what's in your wallet?

neil: all right. we are waiting to hear from secretary of state mike pompeo. he has been meeting with the president of the united states. he's going to come out and we are told talk to reporters afterwards. no doubt responding to the latest developments of nikki haley, our ambassador to the united nations, is stepping down. it's one of the best-kept secrets i have seen on capitol hill, in any hill, in any washington suburbs or thereabouts. charles payne is with me now. what he makes of all of this. they kept it a surprise, the timing of this is important. what do you think? >> i think the key was that it seemed very amicable. that was a great press conferen conference. it's interesting, too, that her staff only learned this morning so maybe that's why there were no leaks. the whole thing is so crazy that someone would have to keep that

from their staff until the very moment it's announced. neil: the president knew about it for awhile, right? six months, that's a long time. >> it's not uncommon in that job. she already became a supernova in my mind. her political stature has surged to the point where, you know, i think from here on out, the law of diminishing returns with respect to what else could be done. she elevated the position back to the level it hasn't been for a very long time and she always stayed herself. this is the key. she had a lot of disagreements with president trump. neil: absolutely. she spoke her mind. >> she spoke her mind. neil: she did not let larry kudlow go. >> i think she will be an asset on the campaign trail. neil: she wanted to volunteer this was not a 2020 move, but she does have a bright future, you would think.

she's universally loved by republicans and a good many, majority of democrats which is unusual. >> very unusual. tough shoes to fill. she's obviously looking at 2024. you know, this move was a 2024 move, so it's to bolster the resume, i think. she's a political star. what happens from here, all kinds of guessing games and speculation out there but she's not going to be off the national stage between now and 2024. neil: we talk about turnover in the trump white house and that's been the most incredible of any president. that's true. but it has slowed down dramatically this year. >> it's slowed down in the nature of the turnovers. it feels like president trump arrived in d.c. and a lot of people said hey, you got to go with some of these establishment types. you have never been down here. we know you want to drain the swamp but at least have someone as a tour guide. he picked a whole bunch of people. they did the politically correct thing to do which is not what got him there in the first place. he's slowly but surely found people he's comfortable with,

people who were comfortable with his vision and that's who he has been bringing in. they have been doing extraordinary. mike pompeo, bolton, they have done an extraordinary job. you know, there's some folks out there, mattis does his thing. you don't hear a lot from him but he does his thing. neil: his name comes up as another one who might go. i'm wondering if that would be a big loss there. >> it would be, although you know, he's been there for awhile now. you don't hear the sort of any kind of acrimony. i think they are on the same page. it feels like everyone in the white house at this point is on the same page. there were some folks you knew would be temporary like gary cohn, wanted to get there, get a few things done, help corporate america, help wall street, tax cuts most important to him. mnuchin is something of a wild card, i think, especially since it feels like navarro and lighthizer have taken the lead within the administration on some of these things like trade policy and things like that. but even then, it wouldn't be

sort of the sort of, you know, high stakes drama laden kind of event if it did happen. you know, nikki haley really did herself and this country a great job while she was at the u.n. neil: absolutely. no denying that. i'm interested in your view on this backup in rates and the effect it has. what do you make of that? we've got a lot of housing etfs already well into bear market territory. what do you think? >> when we were talking about this in february, as we approached 3%, we weren't even there, i mean 3% on the ten-year yield, we were both kind of scratching our heads. again, the first sign was february 2nd when the january jobs report, 2.9% jump in wages year over year, that was a red flag. we immediately had that down day, 666 dow points. another two sessions over 1,000 points on the down side, two biggest point losses in the history of the dow jones industrial average. it was a head scratcher then. you can argue, i heard you last

segment, you know, the velocity of this, how rapidly it's happening, but 3%, i just don't see killing -- neil: i don't, either. people like jonathan hoenig focused on the higher accelerating number of 52-week lows. do you, as someone who crunches numbers, look at that and say well, maybe? >> there's no doubt the s&p 500 over 200 of these names are down for the year. in fact, 20% are down more than 20%. you know, so it has been one of these years -- neil: does that presage when it gets to that level, it gets worse? >> it suggests at some point the big money which has come out of big techs have to decide whether they want to move it to the sidelines or somewhere else. now, one of the areas i thought was value is materials. they get hammered today, right, because you had the pp & g warning so that's the worst performer today when you might see money generally rotating and seeking value in that area. there are some odd things going on. there's definitely, it has not been a stock -- not been a dart

throwing market. you can't just buy any stock. lot of people, you know, if you are happy with your portfolio for the year, that's not uncommon right now. so the surface does belie the fact after you get away from the gigantic winners, it's been a struggle. neil: not a struggle for you, looking forward to next week. you will be on right after this show, 2:00 p.m. eastern time. your whole thing is about making people money. your whole thing is the market. you are an encyclopedia with it. your timing is impeccable next week. what will you do differently, or will you? >> well, the show now at 6:00 is different in the sense everything is in the can. i love to feed off the movement. i love watching the markets, i love watching intraday lows, intraday highs. i like the patterns. i like to see what's happening. like today, materials. no one is talking about that. that's a big story. why is the worst performing sector in the market getting hammered again today and what does it mean for the economy? neil: a day like today, you would be leading with materials? >> i may not lead with it but i have to share that with the

audience because it has broad economic implications. it does touch everyone's lives even if you are not in the market. you know what, you probably bought sherwin-williams paints. i want to connect these dots and go a little bit deeper. everyone is connected to the market even if they don't realize it. neil: a pity you're not before me so i can pretty much copy you. don't you do the same with me. all right. beginning on monday, 2:00 p.m. eastern time, right after this show. one of the hardest working guys i know in news or business news, will be working still harder. more after this. we perform over 50,000 operations a year in places like this. for the past 15 years, chubb has identified ways that we can strengthen our safety measures. and today, our hospitals have some of the best patient safety records in the country. now, we're constructing new buildings that will define the future of piedmont and chubb is here, insuring our expansion.

two million patients a year depend on us. and we depend on chubb. i get it all the time. "have you lost weight?" of course i have- ever since i started renting from national. because national lets me lose the wait at the counter... ...and choose any car in the aisle. and i don't wait when i return, thanks to drop & go. at national, i can lose the wait...and keep it off. looking good, patrick. . . . >> we will in short order talk about when the president will get a chance to meet with him at the second summit. the second thing i wanted to say, i wanted to thank ambassador haley for the good work she has done. she has been a great partner for now five months she and i have

been working together. i want to wish her very well whatever comes next for her. thank you. only time for questions. thank you all. >> did you know she was resigning? neil: didn't didn't see that one coming. thought he would take questions. that is mike pompeo, secretary of state, saying good things about nicki haley whom he had a nice relationship, versus his predecessor previous relationship, rex tillerson. haley stepping down at end the year giving president enough time to find a replacement. hard to say exactly who is on the short list. whether it is important he have a woman in the position or have someone echo rather conservative foreign policy views like secretary of state mike pompeo or john bolton. we know secretary of state pompeo coming back from asia

where he had a tense meeting with chinese leadership, how it accelerated with north korean thing. a more promising relationship with north korean leader kim jong-un. they are trying to cobble together another meet, a second sum think. only details where that would be. president is big fan having in washington. that might not be in the offing or even new york. could be europe or asia or last one was in singapore. we'll have to see about that no big shockwaves on the markets and those developments, what the secretary of state had to say. the phenomenon continues from yesterday, albeit slight backup in interest rates. more stocks entering 52-week low territory and more stocks in general in bear market territory.

sometimes that gets worse before it gets better or sometimes leads to an even worse market. the history of this long record-setting bull market, cooler heads prevail and bounce in and start buying. we'll see if it continues. to cheryl? cheryl: it was the cavuto effects. neil cavuto, thank you very much. neal was talking about it, great number, great market. we're down only 20. we'll take that. investors digesting political -- turmoil in washington. secretary of state mike pompeo made a brief trip to the microphone at the white house. nikki haley is announcing she is resigning as u.n. ambassador