iconic property to lower the rent. they would rather a third of the building be empty. stuart: financial story of the day is the rebound or otherwise from yesterday's big selloff from wall street. modest rebound at the moment. we're up 100. neil, it is yours, stuart, thank you very much. for now a gain is a gain, of the sectors, they're not all participating robustly, but they are up. we have most of the dow stocks looks like about 20 of them on the upside. but again the trade concerns are continuing to weigh on these markets. farmers might be bemoaning their situation, because they're not getting any break. guaranties on the part of the chinese, they're not planning to buy any goods from them anytime soon. meanwhile recession signs are peeking amid the investor yield you hear about, gap between shorter and longer-term rates, pronounced as it was before the

2018 financial crisis. are there parallels or is that way overdone? we're on top of all of that. let's get going. welcome, everybody, i'm neil cavuto. edward lawrence at the white house now with the back and forth on the trade front. increasing you're hearing from firms like goldman sachs, we might not get a deal before the 2020 election, if after that? reporter: looks that way. both sides digging in. negotiations with china could start but not over trade but over currency. the treasury department labeling the china a currency manipulator. treasury secretary steve mnuchin will work with the international monetary fund to level the competitive or unfair advantage, level the playing field there the treasury, imf acts an intermediary, a forum for the exchange of these conversations between china and the united states. the treasury department has a number of suggestions already for china. first they want to lower the trade imbalance with the u.s.

second be more transparent how the exchange raid moved. also transparency for china's reserve management operations. china may not be as responsive to this. the chinese central bank saying they do not fit the guidelines, u.s. guidelines for currency manipulators. the bank in a statement saying they insist the currency is quote, determined by market supply and demand and there is mo problem of currency manipulation. the statement says this designation could create chaos in the global financial markets. the administration standing firm saying china needs to stop their shenanigans right now. >> if they're willing to stop it, i'm sure we can find ways to bring them more fully into the international system. if they're not willing to stop, they keep stealing from us and others they will have to face the penalty. that is what president trump made clear. reporter: president donald trump on twitter said there could be help for farmers on the horizon

if china continues to refuse to pie u.s. agriculture. the tweet outlines how the president stood by farmers. hints there could be another bailout next year if things get bad. neil? neil: thank you, my friend. the corner of wall and broad. we to to jackie deangelis at new york stock exchange. good afternoon to you. reporter: good afternoon, to you neil. a mod upturn after we turned negative. one of the traders i walked in this morning, buckle up, it will be a volatile day. these kinds of corrections don't happen overnight where the market gets so worried yesterday. today everything is okay. now china did take some measures to calm the market saying it won't use currency depreciation to be competitive. this was after it was labeled as a currency manipulate tore as edward said. that was in the wake of yesterday's move. investors traders, they understand it is not really in china's best interests to allow the yuan to get too weak and

it's a delicate balance but at the same time they don't want to be at china's mercy what our market does. look at consumer discretionary names, nike, mcdonald's, disney. of course technology got hammered yesterday. you're seeing some names trade modestly higher. microsoft, apple, cisco trading higher as well. after yesterday's losses not surprising there would be bargain hunting, but it is not as pronounced of a dip. larry kudlow said this, he said the talks in shanghai did not go well. they resume in washington next month. the market takes this as more waiting uncertainty, who knows what will happen in between. the dow hit its most recent record of 27,359. that was july 15th, not that long ago, neil. some are saying a selloff was warranted for reasons other than china. maybe we moved too far too fast.

a lot of folks are already thinking about rate cuts in september. they're talking about december as well. so there is a lot of what ifs in the marketplace right now. neil: indeed. thank you very much, jackie, to jackie's point here, goldman is not only saying it doesn't see a trade deal before the 2020 election but it sees because of that trade quagmire at least three rate cuts now. i assume they're talking about the one we already had and two more to come, whether it comes before the september meeting and the other one scheduled six week after that. there does seem to be a building consensus view whether that is the case. let's explore this with real markets editor john tamny and heather heath manning. markets predict being no deal before the 2020 election. do you agree with that? >> the currency manipulation

designation doesn't sound encouraging when it comes to furthering trade talks with china. in a perfect world, neil, we wouldn't have designation like this, wouldn't have mini complex issues and tariffs and that would be presuming in a perfect world everyone could be acting with good faith. the chinese have not been doing that this is more about trade. it is about national security. this is confluence of factors the united states has to consider making this a difficult trade deal to come to. neil: you know, john tamny, the chinese do not like being a trade, currency manipulator. they do manipulate their currency. the very fact they sent out a message they were stablizing it, tells you all you need to know about that. leaving that aside, these kind of revelations or charges don't advance the talk process, do they? >> they don't but also ignore the basic truth china does what

realistically every country in the world does implicitly or explicitly. the dollar is the world's currency and because it is because it factors into about every global transaction it is economic suicide for other countries to not peg their currencies in some ways to the dollar. so to designate the chinese as manipulators is economically bankrupt. it ignores the fact that the biggest problem the u.s. has not maintain ad stable dollar for decades. because it hasn't, it forces countries to do this. it is only way to maintain trade between countries is have a fixed relationship among the currencies. neil: today, hadley, we had four former federal reserve chiefs, ben bernanke, alan greenspan, janet yellen, paul volcker all saying that this pressure on the federal reserve, they're clearly targeting the president without mentioning his name is not constructive. that we have an independent fed for a reason.

and they bemoan that. that that is being called into question. what did you think of that? >> well, certainly everything that is going on with the fed and everything going on with trade policy, these are headwinds that we're seeing reflected in the market but i will say from a 30,000-foot view the white house the president trump and his administration along with congress via the tax-cut package, they have been pursuing a domestic economic policy that put us in a strong position as americans. the bureau of economic analysis last week releasing wage data, updates to wage data, personal savings have increased, business investment is going in the right direction. this is encouraging. it sort of suggests now is the time for us to as a country to be facing some of these hard things, whether renegotiating our trade deals, managing our interest rates, so president trump deserves some credit for putting our domestic economy in a strong position through deregulation and through tax cuts. these other factors are things

we'll have to continue to face no matter what shape our economy is in. neil: back to whatever they're saying about the pressure, it is not invited the fact of the matter, john, the markets proven, even critics of the fed way beyond the president they overstepped their bounds, they raised too much too soon they're unwinding that. the proof is in the pudding. nevertheless they're saying that the president needn't make it so publicly obvious, what do you think of that? >> i think they overstate it by a mile. first thing i would say president trump insults his own economic policies when he presumes the fed can somehow influence the economy one way or the other. basically central planning failed in the 20th century but to pretend the fed has not always been politicized for bernanke et.al. to say that, it is naive and untrue. the fed is always somewhat of a tool to washington. to pretend otherwise just isn't serious. the main thing the fed can't

improve a economy weakening and cannot weaken the economy growing. both sides vastly overstate the fed's power. neil: thank you very much. as they have been speaking here, they helped stablize things. we're up 109 points on the dow. keep in mind we lost about 767 points yesterday, the single biggest one-day hit of the year after had been the worst week of the year just before. so we're keeping a good look on this i'm noticing that some of those trade sensitive issues are coming back, not all of them. for example, caterpillar is still having some difficulties. jpmorgan chase, most have not rebounded but most have come back. we'll have more after this.

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neil: the president says he is still standing by u.s. farmers as china all but stops buying agricultural goods all together. there is very little way to quantify or qualify what the chinese are doing here outside of saying they're upping the agricultural ante. the department of agricultural advisor is with us right now on these threats and whether they're going to actually, you know, prove to be a real impediment here. tom, good to see you. >> thank you, neil. neil: the latest wrinkle of this, besides the currency devaluation talk, is what china wants to do on the agricultural front. stop it all together. >> which is a complete opposite to what xi told trump at g20 in osaka. neil: that is a big 180. so what do you make of that threat and boomerang for farmers who are hurting on this even with getting money back? >> as you and i talked off-line before we came to my appearance, something happened, something happened between the end of june

and lighthizer and mnuchin going to shanghai. they seemed to be straight armed when they met with they're counterparts, xi's deputies in shanghai. neil: we know this, you know this far better than i, when they came back to report, the president was so frustrated with the fact that the chinese reportedly didn't budge on a lot of issues, he said to hell with it and the next day implemented -- >> there was quite a bit of a buzz on the internet and media when lighthizer and mnuchin did come back, they had a high-level trade meeting in the white house, only navarro sided with the president. neil: right, right. we know who has the influence here. >> well look, the president hired peter navarro to be his advisor on china. i met navarro coincidentally right after the election in the executive office building. that is his forte. if trump was not going to listen to him maybe navarro wouldn't have the position.

everybody else was pretty hostile to the navarro's stance. neil: so was lighthizer for a moment there. so now, i'm wondering -- >> lighthizer sided with navarro briefly. neil: right. i'm wondering if they all hardened positions now? you have to tout the president's line, not you, but officially the line that matters and he seems to be the mind-set, i'm not budging the, i'm not giving in. goldman sachs among the firms, we'll not see a deal before the election, play that out, then what happens? >> well the president has got to walk a tightrope now. i said this yesterday on "bulls & bears," this is his base. the ag community, they're very strong red states, but how long can they stand, sustain being hit in the pocketbook? they bought in for a while as long as there was 28 billion going out to them but they will burn through that pretty quickly. neil: even the credits they're getting from -- >> i don't think it is going to be enough. no it is not going to be enough. there are soybeans at the docks waiting to be shipped.

neil: when you talk to the guys, are they getting angry? are they -- >> they are getting irritated. they are frustrated. well look the president of the national farm bureau, when they talk about the farm lobby, that is the gang, they represent all the farmers, he came out yesterday on the internet and in a statement saying we're not happy. this is the first time pub lechly i've seen at that this gentleman came out. i was head, not the head, i was a member of local farm bureau on long island, they're not happy. neil: neither are a lot of business groups. the american chamber. >> garmin industry is upset. they're all upset. neil: they're all upset the president dealt with their ajita in the past. you know the mind-set of chinese where they're coming from, that whole eastern culture we don't i think appreciate. they feel -- >> eastern mind, i have traveled there considerably. in one of my trips into japan with one of my suppliers said

you have more of an eastern mind. i took that as a compliment. they look much longer range than we do. they look generationally. the chinese are still smarting what happened with the brits, when the brits took over hong kong over 100 years ago. they have determined now not to let themselves be embarrassed by any western cultures or western nations. i think this is some of what we're seeing. the, saving face and saving his reputation is probably more important than xi or as important as what happens society alley in the japanese, the chinese economy. somebody, one of the guests on "bulls & bears" yesterday, tossed it up to me, well the consumer in china, i said the consumer in china, they don't have multiple tv networks, they don't have multiple newspapers, they don't have free internet, they get what the chinese communist party spoon foods to them. neil: we look like a bully. hence the buying of huawei

equipment as patriotism. >> exactly, if that accelerates the president is of the view last week he thinks some in china might be waiting him out, thinking he could lose and deal with another stiff. he was referring to joe biden. what do you make of that? >> that is an interesting take. it is a real political take. but i think, look, if i was xi, i would rather deal with joe biden than donald trump absolutely. but, so trump's got, look trump has got an election in 2020. the only thing xi has got coming is his reputation. by the way, the 70th anniversary he is celebrating communist party in china. that is important to him but not like the 2020 elections in donald trump. neil: he might have been wrong to say china needs this more than we do. china might in fact may need this more than we do. pride is a important thing. >> very, very big thing. neil: why can't we do, one brokerage firm talked about the possibility of a mini deal? >> that is what i said to liz claman, when i was on her

show in a knew weeks ago. it sounds -- neil: sounds like you make some of your bigger pronouncements for other shows? >> i wish that was the case. we see a lot of mini deals. neil: we still will though? >> i hope so. i think the farm beam do. look there is a lot on the internet about hog prices the merck, the chicago commodity exchange. tyson saw a big day yesterday but they were one of the few pork producers that did. one of the few commodity companies in the ag sector that did. chinese consume a lot of pork. they have swine flu, they have problems. now they can go elsewhere but i read some things in the past 24 hours, if they to to europe for their swine or pig or pig products, they will wipe everything out and those countries will come to us. neil: then we'll threaten those country. >> don't say that that. neil: i think final thing, one

thing the president follows more than that is the stock market. loves to mention it when it is up, not so much when it is down, that is fine. yesterday was a aberration i think we both can agree but if the markets are telling him, wait a minute, you're going in the wrong direction, that generally compels a change in behavior on his part i've seen. >> he is a new york city guy. he grew up right across the street from here. his offices you can walk to there, not get wet in the rain. so i think he is very tuned into it. he touted the strong market. neil: if this were to sell off, either one blinking? >> if china blinked today a little bit. the central bank, i think whatever his name is, he came out and said they were not doing to drop, they were not devaluing the renminbi anymore. they are propping up bonds that are due, some securities, 30 billion in rnbs they will

buy back. neil: they don't screw around with their currency. >> they're not currency manipulators. neil: tom kehoe, great read. >> thanks for having me on. neil: apparently he let views be known on other shows. tom is a great guest. we all take advantage of that insight. thank you. >> appreciate it. neil: we have the dow up 86 points. a lot of agricultural items are calling for respect today. those include trading in cattle, pork, barley and soybeans, still having a bumpy day, well below their highs a little more than a year ago but they're trying. more after this. read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect.

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white house with some of the plans. reporter: neil, the president will head to both those sites tomorrow as he has often done after one mass shooting after the next we have seen across this country over last couple years. the president will be heading to el paso, texas, and to dayton, ohio, to console the victims, speak with victims, first-responders and the like. i believe he will be traveling with the first lady as well. the president has been dealing with the shootings over the last couple days, so too has this white house been dealing with a much different issue, that of course being the economy. earlier today, the some of the president's foremost advisors were out front in front of the television cameras to talk up the strength of the economy as they see it, but also to call for so much much-needed action in several different spots. for example, peter navarro giving an interview to our friends at fox news, that

congress needs to pass the usmca over the summer and called repeatedly for a while, for even more action from the federal reserve. watch. >> the federal reserve before the end of the year has to lower interest rates by at least another 75 basis points or 100 basis points to bring interest rates here in america in line with the rest of the world. we have just too big of a spread between our rates and that costs us jobs. reporter: speaking with reporters on the north lawn as well, larry kudlow said the market has been fabulous as he put it. he said days like yesterday just come and go. he pointed to the u.s. being the strongest economy in the world. >> the u.s. economy is very strong. the rest of the world is not. the last couple months we're seeing cap-ex, durable goods pick up at a five or 6% annual rate. so that just shows you how strong our economy is, and the

jobs keep rolling in, and the unemployment is low. reporter: once again, neil, you have this dynamic of folks here at the white house, those closest to the president on his economic team continuing to talk up the strength of the economy. but then as well, calling for some pretty drastic measures from the federal reserve to help it out. two different things that the president's top advisors continue to call for over here in the wake of yesterday's market sly as well. neil? neil: real quickly, blake, have you heard of any reaction from anyone in the white house former fed head, ben bernanke, alan greenspan, paul volcker, janet yellen bemoaning the strong-arming the white house, without naming the president? has he or anybody else had to say about it? reporter: peter navarro was read a portion of their comment from interview this morning, i believe the clip i played for you the fed to still cut rates

75 basis points, 100 basis points, if it didn't come in that exchange but definitely came in that interview. there is still thinking that the fed hasn't done enough and they feel that the fed has taken an incorrect action, as peter navarro also said in the interview the president speaks up, speaks his mind, he will continue to do that as it relates to the fed. neil: blake, thank you very, very much. blake burman on all of these developments here. we always talk about the president, he does like to focus on the markets. they are trying to claw their way back, after a big drubbing, for average folks, you might think i don't know, is today more realistic interpretation what is going on in the markets or yesterday? or the aggressive runup before yesterday? charles payne will be coming back here to just sort of help you out, sort of step way, way back to look at these markets, rather than get caught up in the minute by minute movements. more after this.

neil: all right. oil prices, still all over the map. if you're expecting a big rebound on concerns of a global slowdown it, has not materialized yet. grady trimble, joined by market watcher phil flynn. gentlemen, welcome. reporter: neil, we got new information from the energy information administration. update from the crude oil out put. >> we're seeing breaking news,

u.s. crude out put will only rise 1.28 million barrels, to 12.27 million barrels per day. that sounds like great news. the problem is, the eia previously forecast the supply would rise by 1.4 million barrels. definitely a undowngrade on u.s. production. reporter: talk about bigger picture with the trade war. crazy yesterday but a little more flat today. >> a lot of mixed emotions here today. a lot of differences of opinion what the trade war means and what it will do to energy demand. does this situation nobody will ever drive cars and shut down factories or the other side of it, hey, maybe this is a great buying opportunity. we'll find out more when we see things today. reporter: people are still putting their money into gold. they're looking for that for safety. neil. neil: that is a sign of something. gentlemen, thank you both very, very much. obviously folks, maybe yourself included, get nervous when you

see everything hitting the fan like this. no more calming individual than someone who steps way, way back of this until he steps right out of the room, my buddy of many decades, charles payne, to break it down, "making money," best-selling author. you urge in times of euphoria, and panic, just keep a level head. hard for people to do after what they experienced yesterday. so what do you tell them? >> i learned that lesson myself the hard way. that is why i tell them that. i was a broker for maybe a year, year-and-a-half. i was just getting a book together. i was doing really well. starting to lead the office in new accounts, then came 1987, the crash. halfway through, i think around 12, i saw my lifelong dreams up in smoke. i saw everything i wanted, everything i thought i would do for my family gone. went to the bar. had a few drinks, came back as the market was closing. it was carnage. down 22% in one day. neil: we forget that.

>> yeah. i thought my career was over. so of course i'm calling clients that night, the next day. it wasn't as bad as i thought. of course later on it turned out that was an amazing opportunity to buy. so you know, when you live through a few of these things it, gives you a little bit thicker skin. i think the modern investor lived through a lot of these. unfortunately the volatility, is something, calm, it is calm, when it gets volatile like this it does. the good news, you have to, because there are some self-directed investors, they take this upon themselves, i feel they are better educated, what they own a lot more than they did, five, 10, certainly 20 years ago. if you know what you own, you can have confidence to the weather the storm. in other words, if i have a company that posted great earnings, they beat on the top line, through pricing power, raised price as little bit, didn't hurt volume. their margins are expanding, making market share. this is not the first time, management has a great track record, they guided rest of the

year, i know what they will do, the news probably, typically will not be hurting their business. i will not sell that stock. people would go a step further, those are the ones you want to buy on a dip. so that is essentially, when you have so many machines involved in this, etfs, passive investing, so many things that exaggerate up moves and down moves right now, you better know what you own if you're going to make it through with sanity and profits. neil: this '87 experience, whatever happened to you after that? >> i lost it after that. [laughter] neil: you said, it is interesting we've had a lot of punctuating moment, investors do automatically, automatically add to their account. people have gotten in, generally don't go out en masse, what do you think of that strategy, i will get through this and wait it out? >> i think it's a phenomenal strategy. i do realize a lot of people are saying as the mutual fund

industry ages they are not necessarily getting what they thought they would get. 25 years ago if you started put money 401(k), not where you thought you would be right now. one of the problems, neil, everyone is buying the same thing. i look at portfolios, all the time, almost every day i get some portfolios from different subscribers, they may own six funds. i like to do, i look at top 10 holds of each. out of six funds the top 10 holds, potentially 60 different stocks, they may own 17. neil: is that right? >> i don't care the name of the fund. new zenith fund, horizon fund, moon fund, emerging growth fund, take it easy and slow fund, bang for your buck fund, they own the same thing because all the large firms -- neil: bang for your buck fund is not good. >> told you mcdonald's was in it. neil: i am loving that. it is interesting, eventually the hold them and fold 'em strategy works both ways. interesting piece in the journal

today or yesterday, those on the verge of retirement, retiring right at these, close to market peaks, were going to be surprised. what are you, how do you advise them? >> i think what i'm finding, almost like the job market, right? where the only group of people who are coming back into the labor force in a big way are the 55 and older crowd. i find that people are throwing away the old strategies. there was old formula, take your age and divide from 100, get holdings for bonds and stocks. neil: older you get more conservative? >> right. for whatever reason older investors are a lot more aggressive than a generation ago. neil: is that good or bad? >> i think it is good if they're paying attention. people should take control of what they own. they should not, just writing a check automatically and not knowing where it goes is obviously something that people don't want to do. we're living longer, in general. we're more active than we were in general. so, it is, for someone 55, they

may not do what their father or mother did with respect to investing. that is okay in this day and age. neil: the president and these markets, he follows them very closely. so do you think he anticipated the response response to all of the china stuff we got yesterday? >> i'm not sure. someone on his team had to say this is a possibility. you and i talked already, we saw the yuan was weakening already. president trump already called them out as being a currency manipulator. to be honest every president has. i was doing research. mitt romney running on idea, i wonder why no one had the guts to call them a currency manipulator, goldman and others say we might not get a deal before the election. what then? >> his supporters are fighting for the right deal. everyone knows president trump could take a deal, about political expediency.

he could cut a deal, be done with it. might include more soybeans and look the other way as they steal intellectual property. neil: or mini deal? >> or something like that. i thought we would have bite-sized, little bite-sized movements towards the bigger issues, right? we were only 10% away from the ultimate package, right? i thought we would see bite-sized agreements towards that and then as they worked out those really tougher issues over the course of maybe years in fact. but i think the core voting base for president trump, if they know, they feel in their hearts he is still fighting for the right deal, they went into the fight for a reason, listen, it was a reason it was never done before. no one thought it would be easy. president trump has said it would be easy. i don't think anyone who watched this simmer and develop over multidecade thought it could be resolved right away. neil: we get used to things differently. thank you very, very much, charles payne. charles was saying about october 1987, perspective we

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neil: we're trying to claw our way back here, the dow up 101 1/2 points but what if no trade deal ultimately is scored, then what? goldman, others echoed this on this very show, the possibility increasing. we see no trade agreement before the 2020 election, how does that cut it? "daily caller" editorial director vince coglianese, jessica tarlov. in the event we don't get a deal, vince, then what? >> depends when we don't get a deal and whether or not either side acts if it is completely over. it is a lot of will they, won't they with china. including last week as u.s. negotiators sat down in shanghai, seemed to be hammering

out something, they returned early. the whole thing is blown up. we have currency manipulation this week from china. i kind of think that suggests that the china is panicking. they are feeling pain of a trade war. they might fell open to a percentage of a deal the president wants. i think it seems a little early to say there is a death knell to this negotiation and at the moment, the president's approval rating among rural voters, the people really matter in the trade war in united states, is 10 point higher than it is nationally. they're sticking with him at least for now. neil: but if they don't get a deal, something to ameliorate their pain, that might not less but, jessica, i notice democratic presidential candidate almost to a man or woman, minus kamala harris, have stayed off this subject. she referred to the fact that the fed cut interest rates to deal with this and the fact that the president is screwing it up and cutting to the chase, why is that? do you see them getting more vociferious as it drags on.

>> on i think they will get more aggressive at the independence of the fed, glom on to op-ed came out from former fed chairs, but trade is extremely perilous topic for republicans an democrat. people were surprised when voters had attitudes they did have, it can really split what was thought of a monolithic base on that issue. you have more democratic populists popping up. sherrod brown with that level of popularity. joe biden is skewing more towards that language than a more traditional democrat. i think people will continue to be cautious about this, but to vince's point, i'm not sure actually timing of this matters all that much. when you look at latest polling on economy, that is the only area which president trump isn't under water, he is best-suited to handle that. if the dow continues to sink, every day you wake up, you see hundreds of points going down on the stock market, that will inform your decision when you go to the polls in 2020.

neil: if it maintains itself. >> yeah. neil: vince, let me get your take back to whether all of this means you have to get a deal if you're the president because there is hell to pay if you don't. many market hand analysts say a no deal is better than a bad deal. what do you make of that? >> honestly if the negotiations stretch on without a deal the markets will shift anyway. we're already seeing that happening. manufacturing is beginning to shift to vietnam. last week trump announced that the mexico is the biggest trading commerce partner supplanting china. these things are moving whether china moves or not. i think the president realizes that. remember, what are the alternatives? you basically suggested, looks these democrats are not speaking up loudly about this trade war because they know the president is right. china is manipulating currency, it is stealing intellectual property, it is doing forced technology transfers, it is

subsidizing industries. it is not playing fair and anybody that comes out and pretends like it is is not fit to be president of the united states. neil: if the bottom comes out all bets are off. we'll see. sorry for truncated time. we're following something closely in the markets here generally not get the attention maybe it should, this expanding yield curve here. i know it sounds a little arcane, but to some, to some, it is heralding something we haven't seen right before the meltdown. we're on it after this. from the couldn't be prouders

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neil: my producers always get worried when we mention the yield curve. of course it was their idea today, don't blame me. it is flashing recession signs. in other words the gap between shorter three-month bill and fed

funds, overnight bank lending rate, 10-year, more money holding on your money for a day or up to three month, than 10 years. sometimes, not all the time, can prescient a slowdown. some worried about recession. some are taking steepness of this curve to levels we haven't seen since 2007, which is before the meltdown. charlie bass student of history as well. >> if you want to get me going, talk tarp. tarp and qe. neil: troubled asset relief program. everyone is going back to that time saying hey, this happened right before that. >> i don't see it. neil: yeah. >> listen, this could be a precursor -- there were interesting sets of circumstances leading up to the financial crisis, namely not just a recession or economic slow down, banks were slow laid with debt, that was under water, that was being marked to market down, this was housing debt. because they underwrote so many mortgage bonds, they couldn't

sell them fast enough. buyers backed up, didn't want to buy it. the banks carried bonds on balance sheet t was perfect storm, they had to mark those down to market, that was a new law. americans every bank became insolvent. we are not there right now. neil: it is dangerous to say, it is different this time, but the circumstances are different. so we have not outlawed meltdowns. i don't believe we outlaweds recessions. that is always inevitable. >> when i say banks are i will solvent what does that mean? banks don't lend to small businesses an economy declines extremely fast. you have a recession, not just recession but near depression. neil: people are saying, low interest rates and bonds could be bubble. >> that could be it. do the banks hold those things? do the banks hold these. neil: banks and financial

institutions are always center of things. are they doing anything capricious now? >> no. yes, netflix can go to market to borrow whatever it wants. theoretically you could say, netflix, losing money, with negative cash flow is out there the in market borrowing that will not affect -- neil: flip it around to you. one of the ideas the market itself doesn't deserve the multiple it enjoys. >> that is whole other thing. what happens you can have the markets correct, violently, say it goes down to 20,000. the question, how much wealth does that wipe out of the economy? does that precipitate how big of a recession. that is always a question. when markets go down, banks recede. neil: what if markets are dis.ed, goldman proves right and we don't get a trade deal before the 2020 election? >> sigh the market goes down, it is 25, we lost 5000 points for

the dow, what does that mean for economy? that would signal we're not getting two% growth. if we don't get 2% growth, that would be problem for donald trump's re-election chances t may signal if everything starts contracting, markets go down, businesses pull back, it feeds on itself. then the fed to be honest with you doesn't have a lot of room to lower rates. why the whole thing about putting pressure on jerome powell at rates at this level becomes problematic in the future. so that is a scenario that could happen. i'm not predicting that is going to happen. i'm telling you it is not out of the question but neil, that is not 2018, 2007. that was banks -- neil: it is not a meltdown. charlie gasparino, thank you for that perspective. i didn't know you were that old. >> by the way, have you straightened your stuff out with the president? neil: please leave. >> you really do. neil: we're up about 80 points. i'm speechless. more after this.

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neil: all right. after the worst hit of the year, the dow trying to claw its way back. we are about one-tenth of the way back from the loss yesterday so a long way to go. we will talk to bob doll on where he thinks investors should be putting their money and where he's putting his. if you are stressed, you might be using the wrong app to calm down or something like that. and problems are piling up. those exposed for this, those ready for this and those who have the cash for this. you will be surprised, the number who do not. we get rolling right now. neil: all right. well, the bad news is it doesn't look like a trade deal is at all inevitable. the good news is that the federal reserve might keep

cutting interest rates sooner and more often than expected as a result. so the wall street community is trying to wrestle with that and see which wins out. jackie deangelis is at the new york stock exchange, what she's hearing and what they are buying and/or selling. jackie: the bad news you mentioned, which is the fact that a trade deal isn't right around the corner, is what the market seems to be focusing on right now. after a day where we saw a session low more than 900 points lower on the dow, we are looking at a dow that's up 86 points right now. hardly a recovery by any sense of the word. overnight, the chinese central bank trying to stabilize the currency a little bit, adding some calmness, if you will, back to the market which is why we're not down again today. traders here are really worried that it's going to continue to be volatile and what the strike back from the u.s. will be if there is any before those trade talks resume in september. it's uncertainty, it's not knowing, it's wondering how you should be positioned right now

and movement around a bunch of different asset classes. now, people are also wondering, the good news, will we get those rate cuts. 100% probability we would get one at least according to the market in september, and now the odds are rising that we will get another one in december. that's a lot for the market to hang on. it's not necessarily sure that jerome powell is set to deliver on those measures. today, we are seeing some bright spots. the industrials creeping up a little bit, tech got hit hard yesterday. that's coming back a little bit. but nothing that's so impressive that anybody here on the floor is saying you know, i feel comfortable, i'm ready to really buy into this market again. meantime, st. louis federal president jims buames bullard s was premature to decide on rate cuts. that's why there's stkittishnes as well. neil: the president says we are the ones in the stronger position and china needs a deal much more than we do. that's in the eye of the beholder. susan li is with us with john

lonski and deion, let me get your sense of where we see this going. the president is more or less saying, not commenting on goldman sachs' prediction, we don't get a deal at all before the 2020 election but he can wait it out and if it comes to that, fine. what do you think? >> it's not just goldman sachs. goldman sachs was the latest to say this but you have s&p saying this a couple weeks ago, you had i believe moody's said this as well. you've got a number of investment managers, ratings agencies, all kinds of market watchers, saying we don't think there will be a deal this year. there might not be a deal before the election in 2020. people have seemed to come around to this reality we are locked in for a trade war. that really seems like what china is saying. they look to have locked in and said you know what, we would rather just wait this guy out, we think if he crashes the economy, then people are going to vote him out and we will have a new person to deal with and maybe they will be amenable to what we want to do. neil: they did kind of blink overnight, the chinese, they take great offense to being

called a currency manipulator but they manipulate enough to say we're not going too far in this. what do you interpret? >> we are looking at the weakest pegs we have seen in 2008 still at this point. neil: between our dollar and theirs. >> our dollar and the yuan. that is still close to an 11-year low. but let me ask you this. because in an economy that's growing at its slowest in 27 years, shouldn't you have a weaker currency? isn't it more manipulative and also manipulation and intervention if you keep the currency stronger than it actually should be? given the weakness -- neil: it might not be manipulative on their part, might be a reflection of the reality? >> that's what i think. how much longer do you defend the currency? >> you want to keep depending on exports to drive the economy higher, obviously they are probably having problems with the domestic spending in china. let's not forget about the chinese currency, however. since the u.s. markets hit a record high on july 26, the chinese currency is off by only 2.5% to 3%. that's not saying much.

i think you have to have china's currency go up to about 7.5rmb per dollar to really become a problem in the u.s. economy. however, then the chinese have a problem. the chinese have about $740 billion outstanding in terms of dollar denominated debt. as their currency weakens, that automatically implies the cost of servicing this debt in terms of their own currency goes higher. almost like an automatic interest rate hike. >> but that $740 billion is nothing. china's got trillions of dollars in debt. most of it is denominated in the yuan. they are one of the few emerging market countries that borrow mostly in their own currency. [ speaking simultaneously ] >> let me add, they have a lot of low rated high yield companies with this outstanding debt. they have problems making good on these repayments. they could be pushed to the brink of bankruptcy. neil: do you really think china would ever be pushed to that point? >> well, i'm talking about this

is private sector borrowers. some tell me this is not going to happen. however, where i work at moody's, i'm not about to tell people it's a high yield rating but because it's from china, don't worry about it. >> we should say, private sector borrowers. a lot of these companies are backed by the, if not -- >> okay. okay. there's a difference. >> by the implicit understanding the government will step in and back them up. >> if they are backed by the government, they have an investment grade rating. if they are not backed by state and local governments, you have plenty of those issuers. neil: they have these problems. the other issue, i want to get into this, is hong kong. it's a wild card development almost every day, they are saying some threatening things, you like to protest, we get that, you got to cool it. it gets even more violent and even more long-term. what then? >> well, you know, i have to say, i was actually encouraged by some of the statements overnight. yes, they said they would arrest

any of the protesters, those that get into violent acts but also, the hong kong affairs office of china says basically the hong kong authorities, they've got this. the pla, yes, we adhere to chinese law but it sounds like they are saying this is a domestic issue, the peoples liberation army, which is officially how, if they were to roll in the tanks, some people have said they might like tiananmen square, those are the people that would go in. why would they need to? they are accomplishing everything they want to accomplish without having to do this publicly on 24 hour news cable channels. why roll in the tanks and basically slam a stock market and international based capital for china when they don't need to? neil: logic would tell you it would be stupid to do that but they do have a history of receding back to the military power they are than the economic power they prefer to be. >> this is where china has to be careful because if they want to remain an attractive

manufacturing base for companies based out of china, they have to proceed very cautiously with these political issues. as it stands right now, a lot of these u.s. companies that manufacture in china have a very strong incentive to diversify manufacturing globally. so china's got to approach this -- >> i really want to get rid of this myth, though, that china is still a manufacturing base. >> it is. >> well, actually, more than half of the economy is now services based. it's still developing at this point. but yes, i would say it's transformed into something a little more high end. >> china versus japan, name me a global multinational corporations that are chinese. >> alibaba. alibaba is worth more than every japanese company. list one that's bigger than alibaba in market cap. >> you have toyota, you have nissan, you have all -- [ speaking simultaneously ]

>> you are telling me nissan, that's $80 billion, maybe $40 billion? >> i don't care. that's not a global brand. how many people do they employ? >> probably 80,000. >> okay. [ speaking simultaneously ] neil: it is very, very clear that both sides, the u.s. and china, are stuck in their positions, they are not going to change that, and there are hints that maybe this is what the chinese have been saying about the currency and all might be the first sign they are open to do something. maybe not. but if it does drag on indefinitely, the political impact for the president, i could imagine, would not be good because that would continue to punch the economy. wouldn't it? >> yeah, it absolutely would. one thing i think has gotten a bit lost in this discussion right now is farmers. trump has already produced two of these farm aid bills, aka farm aid, essentially corporate welfare for farmers, writing $12 billion and $16 billion checks to farmers who now can't sell

their goods overseas. what the chinese said yesterday is we are stopping all purchases of u.s. agriculture, not some, not just soybeans, but all. neil: all that money they have been getting will be dwarfed by the money they're not getting. >> exactly. if president trump wants to keep these farmers happy, a big part of his base, he's going to have to keep writing more checks and at some point, congress is going to have to get involved in writing those checks and i don't think they are going to be all that excited to do it. especially a democrat-controlled house of representatives. neil: what do you think? >> i think what's going to happen quite frankly is if the economy begins to suffer visibly, materially from these problems with china, the market goes down another 15%, there's going to be a deal done quickly. i don't care what other people are saying. i don't think trump's going to allow this to linger. this does more damage to the chinese economy. they have a strong incentive to resolve this issue as soon as possible. neil: wouldn't markets see through that? it would look like he capitulated? >> i'm looking at the economic and corporate numbers as well. only 11% to 14% of s&p company

revenues come from china. so is it that big of a component for u.s. corporates? does it have that big of a market impact for companies that don't sell that much really into the chinese market? >> it's not just about selling into the chinese market, though, because again, this trade war and the tariffs are a two-way street. whenever the u.s. does something, china does something back. you've got in addition to companies doing business with china, this also affects how china does business with europe. china does business with japan. and the u.s. and all those relationships, the u.s. businesses and chinese businesses are weakening. that's weakening growth around the globe. you see that in the manufacturing numbers. we are starting to see it in the services numbers from the u.s., the one we got just yesterday, weakening to the lowest since august of 2016. so this is slowing, still above contraction growth, but again, we are seeing this already happening in the global economy. we are seeing it in the u.s. economy. and traders i think folks on wall street, they don't necessarily care if trump capitulates. they don't want a trade war victory.

they want a trade war stoppage. things were going pretty well. neil: they don't like uncertainty. >> they don't like the uncertainty. neil: we will watch that. we will take a quick break so john can continue criticizing everyone. a lot of people find it offensive the president is so focused on these markets or that might prompt his next decision. what if it's the federal reserve that's doing that? is that even worse? following the markets for good or ill, after this. lessly march. carrying up to 50 times its body weight. it never questions the tasks at hand. but this year, there's a more thrilling path to follow. (father) kids... ...change of plans! (vo) defy the laws of human nature... ...at the summer of audi sales event get exceptional offers now! on a scale of one to five? one to five? it's more like five million.

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the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing, so you can count on a deep soaking experience. are you seeing this? the kohler walk-in bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath. yes. yes you do. a kohler walk-in bath provides independence with peace of mind. call... to save $500 off bath walls with your walk in bath. or visit kohlerwalkinbath.com for more info. neil: all right. st. louis fed president bullard talking about the uncertainty that could be in the market potentially for years to come and that the fed can't react to daily give and take between major trading partners like the u.s. and china. having said that, though, he does say the monetary policy is

considerably looser today than late last year, to which the financial markets are saying duh. bob doll is going to be joining our panel right now. bob, what he's essentially saying is we're there and we're ready. do you think we're there and we're ready means we will continue cutting interest rates and maybe the next one before even the next meeting, as some have been hoping? what do you think? >> i think it's going to take much more rioting in the markets in order to have the fed move before the next meeting. remember, the fed is having a news conference after every meeting and chair powell said why did we cut rates, international issues, trade issues, so keep your eye focused there. arguably, those two things got a notch or two worse in the last week so that the markets would jump to the conclusion the fed's going to do it again. that's an easy logic to follow. neil: you know what i worry about, though, and maybe because of this letter in the "journal"

from greenspan, yellen, voelker, who bemoan the strong-arming from the white house without naming the president. i thought of voelker who did not follow the market. he would raise rates one full point at a time, if memory serves me. i see quite a different strategy today where the markets do seem certainly to lead the federal reserve and i don't know if that's such a good thing. what do you think? >> well, i think i come back to when the fed tells you what they're watching and what they're watching gets worse, what is the market to conclude but they're going to do it again. we could debate about the pace and as you know, some people were disappointed that we didn't do 50 basis points. my guess is had the fed known what the president was going to do the next day, they might have gone 50. but maybe the president went because they didn't go 50. this goes back and forth. neil: what do you think of that? >> let me ask you, bob, because

there's this notion jerome powell and the federal reserve is now the trade war enabler, meaning that they are giving president trump the firepower to say i can negotiate tougher with china. you think that's kind of what the image they want to give off to the market, is we've got your back? >> i don't think that's the message he's trying to send. i think he's basically said look, i'm trying to be dispassionate, trying to watch all the tea leaves and when i look at the u.s. domestic consumer, i see things that are okay but when i look outside our borders, i look at manufacturing, look at trade, look at the relationship with china, i don't see good things. therefore, i need to provide some liquidity for the system. of course, we know other central banks are doing similar things where they can. so i don't think they are trying to be any kind of shill for the president. just trying to be proactive or reactive. neil: you were mentioning during

the break this idea that we might have our own problems, some maybe having to do with the china trade thing, maybe apart from it, but our economic data is showing a slowing. not a reversing, but a slowing from earlier growth levels, whether you are talking about what's happening on the services front, the manufacturing front, retail sales front. you know, month after month, the numbers turning a little bit lower. i'm wondering if that is having a part in what we're seeing. >> it has to, because obviously, this is something the fed looks at. as bob pointed out, the market is very attuned to what the fed is watching because the fed has been one of the big things propelling this market higher over the past year. so the fed, they are watching this and they are being very communicative, saying look at this pmi data we just saw. we saw this number come down -- neil: it doesn't look good. it's slowing down. >> yeah. the manufacturing sector has been in recession basically the entire year. there are lots of things to point to, but lots of positives

which is what puts the fed and jerome powell in this box, where they are having to kind of be reactive as opposed to -- or have to be proactive as opposed to reactive. the fed has a two-part mandate, maintain price stability and full employment. they are not supposed to stand up to the president. the fed's job is not to make sure the market is responding accordingly so when things are getting worse, whether it's because of president trump or factors outside the u.s., the fed's job is to make sure the u.s. has price stability and full employment and that a lot of times can mean cutting rates even when it's not a popular decision. >> bob still with us? i have a question for you. i'm wondering whether or not you can go ahead and square this differing opinion on the outlook for 2020. economists expect a slowdown by growth, both real gdp, nominal gdp, while at the same time i see that the consensus view of equity analysts is that we have a return of double digit percentage growth for profitability, the s&p 500.

>> yeah. i will square it by saying the profit numbers and guesses are wrong. no way we glwill get a slowdownn the economy and going to get a double digit gain in the process. >> i think that's going to be good enough to keep the recovery going, to have another year of economic expansion. what i worry about is an outright contraction. when that happens, i think this economic recovery is toast. >> whatever you thought the probability of recession was say a week ago, i think you have to argue it's higher than it was as a result of the tariff situation, because that's part of what's aggravating things. it's easy to talk about non-u.s. and u.s. as if they're not related. they are obviously very related. when you get domestic ceos seeing the uncertainty, what do they do? they pull back on their decisions and that creates its own set of weakness.

i think we are in a precarious situation. we can't let this go too far. otherwise we will wake up into a recession. neil: what do you tell your clients who looked at yesterday and are very, very nervous. a lot of people are automatic investors, those who do invest, so it's sort of like pavlovian thing, that's how they handle regular investments if they have them, and that doesn't change. there are others who say no, no, i got to pull out now because i'm going to my gains. what do you tell them? >> my view, i'm going to put some prices on this. above 2950, i was very nervous. last i was on your show, you heard my caution. 2850, where we are fooling around now, there, maybe a little lower, i get more interested, maybe call it neutral. give me under 2750, i will get

more excited. i don't think you should chase stocks given the slowdown in the economy, the fact that earnings are too high for next year, but i wouldn't be gone because i don't think the cycle's over yet. it's getting tougher. the bull market has treated us all so well but the last year and a half, stocks have gone nowhere. stocks are actually lower than they were in january 2018. we could be making a long big saucer top here. neil: by the way, that is exactly when this trade war began. more after this. hi i'm joan lunden.

today's senior living communities have never been better, with amazing amenities like movie theaters, exercise rooms and swimming pools, public cafes, bars and bistros even pet care services. and there's never been an easier way to get great advice. a place for mom is a free service that pairs you with a local advisor to help you sort through your options and find a perfect place. a place for mom. you know your family we know senior living. together we'll make the right choice. neil: lot of people talk about retiring when they see markets like this or just sick of working like this so imagine you leave the work force now, at or near market highs, even with the gyration of late. that could be a good or bad thing. scott martin is in chicago, where they are facing this very very issue. hey, scott. how do they handle that? >> not well so far.

they asked for more money and promise better returns and that they will do better next time. i tell you, the numbers speak for themselves. the unfunded liabilities, the broken promises are piling up and i think one thing that's worrisome as we have seen from this space and some of the returns that have come out, as they get publicized, is that it continues to be this doldrum of returns and doldrum of delivering on the promises they promised to keep. as long as that continues on, i think we've got major changes in the future in the sense of lower benefits payouts or certainly lower expectations when it comes to what people can get from these funds. neil: if they all retire now en masse, it would be tough to pay them out. >> yes. that's one thing that's interesting that's been proposed, and i think another, it's really another dangerous game to play with the pension funds because what they have tried to do over the course of the next three or four years is realizing maybe their backs were

against the wall, hey, we will give you a buyout or folks can retire early or have some other structured payout. but the reality is they're not prepared for like you said, that rush for the door. so that too could present a problem if folks say you know what, we are going to take what we can before the losses mount up even further. neil: this is where i like being older than you. you are the one on the shorter end of that stick. >> unfunded liabilities scare the heck out of me. look at the numbers. 4.4 trillion in assets going to federal reserve for state and local pension funds, unfunded liabilities, 4.2 trillion. we are never going to retire. you know that, scott, right? forget that. we are working until we're 80. >> thank you, susan, for looping me into your age group. i appreciate that. i'm telling you, i'm scared for the folks that have -- don't forget, a lot of government workers have done their pension fund contributions or have saved what they thought they had or

been promised these things, they haven't maybe kept up some of their other investment strategies because they thought they would have the pension. that's another crisis you have unfolding where the pensions don't step up and oh, by the way, they don't have any backup for it because they were promised all these goals and all these realizations they are not going to get. >> another problem here is where are these governments going to get money for discretionary spending on infrastructure? that would worry me. looking ahead, they have to have so much more money committed to fulfilling these pension obligations, health insurance obligations, that this will limit their financial flexibility. this is going to be a big problem for the overall economy. i think according to the census estimate looking ahead at the next ten years, the number of americans aged 65 and older growing by 1.8 million per year. those 16 to 64 -- neil: why are you looking at me? >> aren't you there already? and the other group again growing by 300,000. that's an imbalance that's going

to create a lot of problems for the u.s. economy. neil: your problems are just starting. thank you very, very much. >> go easy on him. neil: exactly. i'm not eating my oatmeal enough. scott, thank you very, very much. there is some clarification from st. louis fed president bullard about this steepening yield curve. you can pick and choose your shorter security to your longer security. without getting arcane, this intrigued me that the gap between the ten-year and what's been happening, for example, with the two-year, isn't nearly as pronounced as what you have been seeing on the three-month to the ten-year. i think you are grasping at straws when you start to cling to that. but nevertheless, his comments have been a little more bullish than thought and since he's a voting member of the federal open market committee, i think he is, he carries some clout here, so that seems to presage the federal reserve not only open to a cut but to say the continual cutting campaign will

take care of that yield curve. that might be clawing here but just passing that on. >> that's not what the market's rising on. neil: that's a dangerous thing to rise on. technology is coming back a little bit. that could explain what's happening there. we will get to apple and the other names after this. at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary.

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neil: up about 170 points. apple disproportionately weighed

on the dow yesterday, the huge selloff of 767 points for which apple accounted for about a fifth of that. that was yesterday. different environment today. market watch tech editor jeremy owe owens. a lot of people felt a lot of tech stocks that were bludgeoned yesterday were overdone, fundamentals are still sound, bumpy relationship with china or no. what do you think of that? >> especially for apple, you are talking about a company with such high profit and revenue, it will be really hard for these tariffs to make a big difference. so there's a chance that people are seeing that decline over the last two trading sessions and jumping back in. there's also a chance apple, which has billions sitting around for stock repurchases saw the two days of declines and jumped in. i would love to know how much of the buying is coming from them today. but it does look like people are getting more of a rational sense of what these tariffs mean for apple. neil: i have my panel here, and they are free to ask you questions as well. one of the things i have noticed is that china is rallying a lot

of political support, pro-country support, and that's helping huawei where it's almost patriotic to buy from huawei, not from apple. if you're apple, are you worried about that building phenomena? because no deal or whether you get a deal, i don't see that dynamic changing. >> well, in the second quarter, you saw a record market share for huawei on this patriotic buying, the chinese thinking that this company is being bullied overseas by the u.s. so i'm going to be very patriotic to my country and buy a huawei phone because we saw apple sales actually falling over those same three months. if i was apple, would i be concerned about this? i would be concerned about the fundamentals for my own company at this point, maybe not nationalist fervor, whatever it is, because right now it's hard for them to make the case that you need to buy a four-figure phone in a country that's still developing and the average per capita gdp is at 10,000.

neil: you are the only guy i know that would fork out that kind of money. >> that's a fine joke you just made. i think the bigger dynamic with apple, i wrote about this a few weeks ago in the newsletter, is just that their phone is not seen as innovative or a must-have product the way it is in the u.s. in china or in europe. they are losing market share. >> from the chinese perspective, it is seen as a luxury item, meaning you can afford again, a four-figure phone, that's what you want. it's a status symbol. >> there are other new chinese-made four figure phones. you have huawei putting out a very expensive next level phone. >> huawei phones are cheaper than apple. >> they are cheaper here. >> they are cheaper in china as well. also lenovo. >> certainly. they are cheaper. no one is -- the huawei phones, a number of these chinese made companies are increasing their quality, increasing the price of these phones, and now that's a luxury made item you can buy and also still buy into this sort of

nationalistic fervor. >> quality yes, price no. >> and also have a luxury phone. some of these phones these companies are making are not the cheap phones they are selling over here. but they are selling there and selling them to companies in europe as well or to consumers in europe as well, and they are buying them up, too. i would actually be interested to ask jeremy if he's still with us, how important do you think the market is in china for apple, because the way i see it, they are losing share in china and that to me tells me they are losing their share of the new big, you know, exciting markets because it seems to me china is really where you need to be at if you are an innovator. >> well, yeah, china is great to be in but there are other places where the growth potential is greater, right. if they could get into india, then oh, so much growth potential. how many indians can afford these $1,000 iphones, right? china does have people that can afford the phones and have the growth potential. that's where it becomes this nexus where apple really wants to be. there is growth potential elsewhere. it will just be really hard for apple to grow there with the prices they charge.

neil: you know what i discovered, say what you will about authoritarian government, if it puts out the word we don't think it's a good idea for you to buy apple products, they don't. we don't think it's a good idea for you to buy american real estate, they stop. that's it. interesting kind of trend. under no strong-arming, just, you know, do you feel loyalty here or not, are you with me or not. >> this is a new risk factor for a globalized economy, especially when it's the largest in the world. the government gives marching orders to buy such product or not to invest in new york city real estate, my goodness, that could lead to wide swings in demand, unforeseen swings in demand. neil: what do you make of that? >> that's also one of the strengths of the chinese economy as well, because they can pull the lever, whether it's stimulus, let's go spend, let's cut interest rates, it's authoritarian, it's a one party system, and in some ways, it kind of benefits them if they need to stimulate the economy. >> but that's also a weakness.

a centrally planned economy has always suffered from problems when it comes to innovation, providing new products, coming up with major technological breakthroughs. neil: real quick on that, your take on american technology in general surviving this, even if no deal is scored by the 2020 election. what do you think? >> well, i think american technology in terms of the huge tech companies will certainly survive. the problem is the smaller tech companies. we are already seeing fitbit get slammed. we will see if go pro gets hurt. the larger companies, apple, google, they will be fine. they will get through this. it's the smaller companies and will they get slammed and will they lose china as a market, and also have to charge more in america for the tariffs and really get hurt that way. >> i think there is something else of importance here. that is that these very large tech companies, google and whatnot, they are under pressure to perhaps break up antitrust

efforts that would frown upon these tech giants like google buying some of these tech upstarts. that increases the risk for the smaller high technology companies that aren't quite making money yet. neil: guys, i want to thank you all. jeremy, thank you as always for stopping by and making sense of this very confusing technology world. apple and again, those that mimic the performance of high tech names like the nasdaq 100, having a much better day than it did yesterday. more wire reports out of st. louis fed head bullard, voting member of the federal reserve, saying we are midcycle through whatever we're going through, and because we are midcycle, this is why i like the noti nomenclature of midcycle. whatever we are going through shows a midcycle, not end of cycle development. >> if we are midcycle, the recovery is ten years old so we have another ten years to go?

we are going to challenge australia. neil: worried about whether or not we are keeping pace. we are up 186 points here. more after this. when i walked through a snowstorm for a cigarette, that's when i knew i had to quit. for real this time. that's why i'm using nicorette. only nicorette gum has patented dual-coated technology for great taste. plus intense craving relief. every great why, needs a great how. your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity. you need decision tech. a cockroach can survive heresubmerged ttle guy. underwater for 30 minutes.

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neil: all right. businesses have long been known to hike the minimum wage. it's come home to roost here and in new york they are saying the same thing. reporter: workers are making more money but for business owners, there are negative side effects we are just starting to see, about eight months or so after the $15 minimum wage went into effect here in new york city. some other states have passed that $15 minimum wage legislation, including massachusetts, california, maryland, illinois, new jersey, connecticut. some tough decisions for business owners who have had to cut staff, eliminate work shifts, crack down on overtime in some cases, raise prices,

just to make sure they can pay their workers. in june, new york city's unemployment rate was 4.3% compared to the state's of 3.4% according to the new york state department of labor. both numbers have remained relatively steady during this past year but how much longer will that be the case and will business owners be able to sustain paying their employees at this rate. the congressional budget office recently put out a study that said raising the federal minimum wage to $15 an hour by 2025 would increase the pay of at least 17 million people but also put about 1.3 million workers out of work. the current federally mandated minimum wage, just to remind you, is $7.25 an hour. i spoke with a small business owner here in new york city. he said it has been very difficult to adjust to this new minimum wage, given the fact that there have been three minimum wage increases within the last three years.

then you factor in high rents and also the cost of just doing business so it has been very difficult for a lot of these business owners. neil: tracy, thank you very, very much. a lot more on that as we will. barneys apparently considering shutting down, filing for bankruptcy. we don't know exactly where dion is going to be going to dress himself up in the very smart way that he does. but the implications, because this is just the latest sign. there will probably be others. after this. welcome to the place where people go to learn about

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like to travel? this kind of plan goes with you anywhere you travel in the country. so go ahead, spend winter somewhere warm. if you're turning 65 soon or over 65 and planning to retire, find out more about the plans that live up to their name. thumbs up to that! remember, the time to prepare is before you go on medicare! don't wait. get started today. call unitedhealthcare and ask for your free decision guide. learn more about aarp medicare supplement plan options and rates to fit your needs. oh, and happy birthday... or retirement... in advance. neil: all right. no matter the markets, these are seminal events that you step back and say i will miss that. barneys, the largely men's

retailer, filing for bankruptcy. doesn't mean it's totally down and out. many firms emerge from this. but it's looking tough. susan li back with us, john lons lonsk lonski. dion, you know we always see anecdotal evidence of this, the million dollar penthouses not going for what they were, the buzzsaw that some of the higher end retailers experience, cartier comes to mind, some others, but this is a different type of event. what are we to glean from it? >> as a prominent member of the rent is too damn high party, i'm really glad you asked me about this because the rent is too damn high, neil. but look, here's the other thing. retail buying is just slowing down. you are seeing it move much more from brick and mortar to online but we are even seeing online retail slow down. the space is shifting away from places like barneys to more places, like you have things like amazon big-time warehouses,

places like gyms, things like that that aren't these generic retailers, even a place like barneys is having trouble surviving. this really to me is more a sign of the times are changing and places like barneys, places like that are having a lot of trouble keeping up. neil: part of the edge they had, they measured suits and all that. now you can actually do that online. >> i never shopped in a men's department, but you know, from the women's department, i would say that i think barneys had its own endemic problems as well. it was a much smaller player than saks or neiman marcus, they only had nine stores, 13 warehouses. just the amount of apparel or type of merchandise they had in store, it wasn't compelling to a lot of buyers. it didn't have a digital footprint either. i don't even think they have -- well, maybe they do have an online store but they don't have an app and that's a problem. neil: where do you go to get your clothes, though? >> i'm not going to tell you.

[ speaking simultaneously ] neil: barneys was the wall street uniform. >> quite frankly, he's talking about a slowdown in jobs growth and as employment growth slows there will be less money spent on apparel. you are picking that up right now. in addition, the aging of the u.s. population, as the population gets older, style matters less and guys like myself, we will wear the same suit for 10 or 15 years. neil: my dad never threw away a suit. he would have lapels you could park the shuttle on. at times like this he would say whatever goes out of style would come back in style. unfortunately, he was never in the moment where it happened. >> now i know where you got your suit from. neil: yeah, exactly. we were just talking, too, about this phenomenon the segment before with the minimum wage and the impact it's having. i don't know if that was the case with barneys but another

reminder, there's only so far you can push it. what did you think? >> i thought it was really interesting how the employers are saying they are having to make these changes, then you throw up the statistics, 4.3% unemployment in the city of new york, 4% statewide. we instituted this now, companies have been dealing with it, businesses have been dealing with it for six, seven months now. the layoffs don't seem to be happening. so you hear a lot of bellyaching from businesses when they do have to spend more money on employees, when they do have to spend more -- neil: they do have to rejigger, right? >> at the end of the day they generally do it and figure out a way to make it work. >> seattle is probably the biggest example of a city that's gone to $15, it's been instituted for many years now and washington state did a study and they said the cost to benefit was actually three to one to getting the minimum wage up to $15 an hour. that's because you make it so expensive that you basically erase and kill the entry level of employment. that's what happens. >> susan's right. that's what worries me. when they increase the minimum wage, you are taking away

opportunity for very young people to get into the work force, develop skills. >> i don't care about it. not even a little bit. neil: you know, smartphone games are coming back to deal with market crises and all this but they are more of an allure, apparently, than are some of these mindfulness and mind peace apps that are supposed to calm you down. >> the meditation apps. neil: what did you think of it? >> okay. i have tried some of these meditation apps and maybe it's because my mind goes in circles and i just can't sit still for awhile, but it doesn't work for me. i do love candy crush. i completely understand why games on smartphones -- neil: i don't understand the fixation with candy crush. >> might be more meditativmedit. what do you think? >> i'm more a traditionalist. when i see the market tanking, i see the market going down, i don't need a smartphone. i look down, then look up to the heavens and say a prayer and simply yell help!

neil: do you use any of that stuff? >> no, i don't. i read e-mail in transit. neil: all right, guys, thank you very much. real quick read on the markets. what do you think, do they rebound? >> i think they come back as long as we grow profits, with interest rates remaining low, new record highs for profits that i think are going to happen, will be accompanied by new record highs. neil: what if we don't get any trade deal, then what? >> i think investors come in, buy the dips, it's been a successful strategy for the past ten years. if we don't get anything on the trade front, people start to get worried but you do have the fed expectation they are going to cut rates and you do also have, you know, some other tail winds. so i think investors remain confident but i think the fundamentals start to catch up at some point. neil: you do have the apps to calm you down. we have a lot more coming up after this. the dow up about 200 points. whatever happens, do not blame this panel. more after this. something. can the past help you write the future? . .

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(past them because she didn't sknow they were talking to her.g and she would just walk right (deborah) i just could not hear. i was hesitant to get the hearing aids because of my short hair, but nobody even sees them. (avo) our nearly invisible hearing aids are just one reason we've been the brand leader for over 70 years. (deborah) when i finally could hear for the first time, i started crying. i could hear everything. (avo) call 1-800-miracle to start your 30 day risk-free trial and schedule your free hearing evaluation today. neil: all right. up 192 point on the dow.

key dow component, mostly emulated one, maybe save apple is disney. it reports numbers after the bell, which is a name of a hit show on this very they work to get into all of that. charles payne with his own hit show beginning right now. hey, charles. charles: good afternoon, everyone, i'm charles payne. this is "making money." breaking right now the stock market rebound gets hit by a dove. market turned lower after word from st. louis fed president actually spooked investors. buyers as you can see are beginning to reemerge. we're all over the markets, with the fight over china's currency. china warning hong kong protesters they're playing with fire. the strength they're showing is not weakness s this situation about to get a whole lot worse? all living fed chairs banning together to support jay powell, calling out the importance of the central bank's independence.