markets priced in another 25 to 50%. we will see if that happens next. if that happens, things calm down a bit. >> it is ugly. >> recession fears plaguing wall street, and strayed uncertainty. the dow taking another leg lower there at the close. and ending down. better than 800 points. lowest close in two months. obviously the low of the session. i'm melissa francis and i blame you. >> i'm connell mcshane, somebody has to take the blame. the nasdaq and the s & p 500

ending lower. we have a lot of time to throw the blame around. edward lawrence is at the white house. deirdre, you get to go first with perspective for us. dierdre: 800 points down, we closed as you just said, at session lows. a wipe-out day. no other way to say it. if you look at the dow jones industrial average. the financials fell hard, goldman sachs, jpmorgan action. we have been talking about the inverted yield curve. it's showing brass tacks take away. investors are more optimistic on

the near term than the long term. that drove a lot of the selling and activity we saw in the bond market including buying so much into the 30 years that we saw the yields at never before. it showed up in financials, as we just covered on the dow. if you take a look at the other sectors, macy's as well. you have been covering this from an earnings angle. this year will be a disappointment to investors. i heard melissa say she is on pace. if you look at some of the other sectors we have been following. tech has held up this market for two years. you had oil down more than 3%. that data coming from china and the eurozone making investors

question how stable asia and europe are as completely economic reasons. connell: here with us, jonas, do you want to take a first step at this? i don't think melissa is right to blame me. the president is blaming the feds. many are blaming the trade policies of the administration. >> the rate is down and that's scaring people, that the yield curve is a perfect predictor of the future and it's scary because it's scary. that's why the fed had to lower the short-term rates to get the

curve. that's behind the anxiety and a terror tantrum going on. it was okay to have a trade war when things were great, but now not so great. connell: what does the federal reserve do with this? does it act sooner than some expect in between meetings? tomorrow. who knows. do you expect something soon from the feds? >> one of the things we talked about before the fed took over currency. that's going to be a drag on corporate earnings if our currency is very, very strong relative to other countries. i think the fed is looking at a lot of things in the rubik's cube. >> that was one of the president's tweets with all the

money flowing into the united states and that is partially a result of all that. todd, give us your take on the day. >> i think yikes is a good word for it. but it isn't a surprise. we are reversing back and forth in you a wide trading range. however, if we are down again tomorrow, i would say we are look at the end of the week. when you look at it, you have got to remember when you have manipulating markets, that's a problem. melissa: joining us on the phone, liz ann, we are talking about the inverted yield curve. but other subjects on our plates, chinese industrial production down to a 17-year low and german gdp contracting in

the second yardr quarter. -- in the second quarter. >> it's the continuing story of weakening in global growth. trade is part of the problem. not just in the case of china, but world trade volumes have come down quite a bit. that affects everybody even if they are not embroiled in the u.s. china trade war. trade is a component of it, but demographics is the secular reason behind it. we are seen as the elixir to what alls the economies they are learning the hard way that it didn't actually pull the economy out of those deflation air yea head winds and in turn it's done incredible damage to the banking system as well as insurance companies and pension companies, and that has further slowed global growth.

it's quite a cocktail of reasons why we are in the situation we are in right now. >> the. melissa: if you add into that's cocktail. this idea we see the market dough down tomorrow. you look at the pattern. it's two negative days in a row. do you think it federal reserve moves quickly? >> the honest answer is i don't know. i don't think at least from the surface that two big down days in a row is an automatic trigger to consider that. we are not all that far away. as recently as yesterday, things could turn on a dime in the opposite direction. i would be surprised if such a short-term move in the markets would cause the fed to step in. there is lit the question. i think it calculus will shift.

if it shifts 25 or 50 basis points. and the 3-month 10 year the fed would have to raise by more than 25 basis points in order to fund that portion of the yield curve. melissa: what is the number one signal you are looking for. >> there is no number one signal. there just isn't. i look at every variety of technical sentiment earnings indicator. and this not going to be one. one thing that tells you what direction. we are dealing with twit errant other traditional fundamentals that drive markets in the short term. melissa: liz ann sonders, thank you very much. cisco reporting fourth quarter results. dierdre: welcome good news.

is co-beating the bottom line. and if you look at revenue, the company posting $13.43 billion. some very positive news for cisco. we are hoping tomorrow it carries over to some of their competitors, hewlett packard, ibm. is co-reports basically three main categories. during the last quarter of the earnings season, the ceo said he didn't expect to take too many hits from the slowdown between us and china. so we'll just go with the numbers. a clear beat on the top and bottom line. connell: stocks are getting hit 5.5% after hours.

macy's leading the retailers in the red following its earnings and especially its weak outlook. jackie? reporter: macy's underscoring the fears the market has about retail stocks. also not necessarily a positive sign for this basket of stocks. there were company-specific issues when it came to mails who macy's. there is also the rental clothing competition they are dealing with. but pressure the threat of the new tariffs, that's an issue, too. the tariffs came in round because of the types of items it hit. treasury has delayed implementation on those items until mid-december. it still has everyone wondering what is happening with the

consumer? consumer spending accounts for 70% of u.s. economic activity. there is a concern, if china passes tariffs and they pass it on to consumers, that will compound any recession the u.s. is facing. but so far the con same are has -- the consumer has been holding up. consumer confidence was at its best since november. but still as i said, not just macy's today, a basket of stocks taking it to the down side, nike, nordstrom, best buy, it's all because there is a question mark about what happens next. connell: on that question to our panel, all the retail stocks get hit. and mitch you can take this. i don't know if macy's is the one we look at. walmart tomorrow morning might

be an interesting one to look at in terms of how we expect the future to look for the consumer. we know the stories out there holding up so far. >> the basic consumer is fundamentally strong. the -- the sentiment index was strong. a big buildup in inventory they couldn't move. that's something that's trade-related. we'll look to see if they built up their inventory. connell: you try to plan for all this. meaning the trade back and forth. if your company -- at one point you are trying to get ahead of the deadline. so the idea that there is some sort of certainty added seems ludicrous. if anything it's more uncertain. i don't know what that means for these companies going forward. but their stocks got hit today.

>> the only certainty is the president is going to back drown quickly in the trade war. i don't think business owners have to worry he'll drive the economy into a depression. his downside limit is pretty low. what's more disturbing. the stock market kept going down. ultimately what business owners are looking at is the consumer. the retailers and how they shop. this economy is strong. people should be driving the truck up and buying stuff with leverage. whether it's cars, leases, home loans. but one thing to look at. do people go out and buy a lot of houses and borrow 30-year mortgages at these supper slow rates that kicked in. that's what you are going to

see. in a scaredycat you won't see that. you will see refinance and you won't see new debt coming into play. connell: do you think we'll see that? >> i'm on the other side of that trade. it's hard to get that cheap money. as much as they advertise it. mortgages are down to x, but they are not where they should be where we are going with the feds. many people already getting these lower rates. are you going to refinance for a half percent or quarter percent. too much square footage. amazon, walmart will benefit at the end of the day. dierdre: let's go to phil clinton. is this a cause of what we saw in the stock market or an effect? >> i think it's more of an

effect of what we saw in the stock market. we got inventory data that showed it increased more than expected. but when you mix it in with the rest of the report. we saw u.s. energy demand is at an all-time high. what we are sphreeght consumer we are seeing in this report. but it's hard to ignore the stock market when it's falling down around you. a slowing demand in china because of the data overnight there. the potential is raising those demand fears that haven't materialized as much as the headlines would have you believe. we look at the market, we get a lot of data. the new york fed, industrial production. if those numbers come out relatively strong, the rebound bid in that market. this activity, a rock 'n roll market.

a lot of people don't like to invest. but these are the types of markets where gold doesn't perform very well. connell: the federal reserve is being blamed for the drop we saw in the market. reporter: there has been no progress in the trade talks and that might be fueling the sell-off. we know the phone call that happened a few days ago between the two trade delegations. according to peter navarro, the delay in the partr next round of tariffs he said had nothing do with the phone call. he said the delay had everything to do with the holiday shopping season. he said he didn't want the tariffs to impact consumer prices. >> the whole premise of what we are trying to do is pain on them, not pain on us.

the last remaining part of that $300 billion, if we simply put the tariffs on september 1, that would be more pain on us rather than pain on them. that's just silly. reporter: the list of delays 21 panels long. it includes cell phones, laptop computers and back-to-school items like kid' coats and girls suit coats. the head of the retail federation, they says they don't want to see any tariffs delayed or not because it would impact consumers. >> some of these costs are being eaten by the retailers. some of these costs are showing up in the form of lower margins on other products. some of the costs will be passed on to the suppliers. it's not like they are without cost or impact. >> we'll see $300 billion of chinese imports. some of that will be delayed

until december 15 for that. with the tariffs it will be no inflation pressure we have seen so far. president trump tweeting about the federal reserve. he goes on to caught federal reserve chairman jerome powell clueless. powell said the fed is moving to be more accommodative. he said they will continue to react as the data is coming in. it seems that today the market is moving a little bit faster than the fed. but the fed said it wrote react as the new data comes in. and this is new data. melissa: the panel is back to sort through all of that. jonas, the retailers talking about the hits from the tariffs or trade wars. do you think the president is going to back down? >> the only way to hit china is

if the prices go up and we buy less juk from china for christmas. if we don't buy less stuff they won't fire people on the factory floors in china. ultimately i think it was hurting the stock market is that i don't think we are taking into consideration the troubles in china related to us starting this trade war. we pay the tariffs, but they are the ones getting the firing. if you are consuming less stuff they will lay off people and it will cause a recession. then there is the knock-on effects. borrowing money and building factories outside of shanghai. who are they going to sell the cars to because we won't stop the trade war we started. i think there is a lot of

unforeseen potential dominoes scaring investors globally. in some way success in the trade war. melissa: he says it's not going to work unless they are feeling the pain in china. they are already feeling the pain if you look at their industrial production fall together lowest in 17 years. >> it's not just china because all the economics are links. we saw germany's gdp slide 1.7% negative. one of their big buyers is china. if china's economy is slowing they are buying from germany so germany's production slows down. it's all interconnected. it's not just u.s. overnight headlines we have to pay attention to. melissa: so many companies came out and blamed the trade wars it

remind me of when gas prices go up. they blame energy costs and they blame the hurricane and they blame the weather. you have a trade deal in place in north america. you have deals getting ready to go in japan. all you have to doyles avoid stuff in china. is it that bad for american consumers and is it as bad as companies are trying to use it as their excuse. >> it's a crock, melissa. they will raise their price if they have to. those prices will never come down again. they are going to use this to their advantage, so they are preparing us for a bad quarter of rising prices. to me it's a whole big nothing. i wish trump wouldn't come back like he did yesterday. i would like to see him put china away. but we have too much other things going on. we are worried about the dollar

and worried about the fed. melissa: stick with us. protesters in hong kong are standing their ground. police firing tear gas into the crowd today. satellite images appear to show chinese military vehicles mobilizing near the hong kong border. susan li is live for us in hong kong. >> we have thanked markets down since the protests began in early june. we had protesters back on the streets after a court injunction received by the airport authority that pretty much banned protesters from entering the hong kong terminal. plates were take to land and take off. that pretty important for a financial capital like hong dong. the protesters are placed in a rural part of hong kong, and

still no relief. maybe not as dramatic as the scenes in hong kong airport yesterday. but police started firing tear gas after the protesters were aiming directly at the police. looking at the satellite images. it looks like hong kong and the troops, and tanks and artillery is being amassed near the hong kong borders. we heard that from president trump. intelligence sources are telling him it looks like to has been a build-up of chinese troops near the city. but right now since we are close to 5:00 a.m. here in hong kong, things are relatively calm and less dramatic of a scene today compared to what we saw aired on 24-hour news channels around the

world. connell: the vice president of research from the koch institute. will, you first on this thought and this question about what happens if the chinese military does actually move in hong kong? >> that would be pretty scary. hopefully both sides can engage in a bit more caution so we don't have a situation that leads to something like tienanmen square. that would be a terrible outcome. caution is in order. i have a great amount of sympathy for the people of hong kong who are trying to protect their special system within china and protect their greater independent earns they have under the basic law. but they don't want to push so hard we get into a situation where we escalate on both sides and get a situation that's terrible for all. connell: people are looking for

war we normally call off-ramps. then what, what are other possible moves being talked about here? >> i think martial law that others say is highly unlikely. the other is to let the protests peter out. and you would have to remove cary lamb. and most of people suggest the removal of the chief executive who a lot of people blame for introduction that controversial extradition bill that ignited these protests. she needs to go. and you need to arrest some of the protest leaders like we saw in 2014-2015 in the umbrella movement.

it's been a technical move for these protesters not to have leaderedship, at least publicly. connell: how does this all play into the conversation about global markets. some argue not too much and others say it might be a very big deal. what's your take? >> it's impacted if you have think there is a potential for the chinese economy l economy to collapse. and the trade war-related? i know it was trigger. did they -- to me they have got what they wanted sort of back. i don't understand why this not product in mainland, china where only the hint of those loss of freedoms caused this. to me it's liked a world trade

organization protest of the past. people didn't want to break stuff. it stopped having a basis. there is a concern that china is a super economy that has been growing and driving demand for several years is in trouble and may or may not be because of the tariffs. shane very when i was in hong kong and china in june, we were asking people, are you concerned about this spreading? i guilt was not a legitimate concern being expressed. perhaps it has changed. do you think it might ever? that would be a threat to xi jinping. >> there is something special about hong kong that's different from the mainland. hong kong has long bern one of the most of free places on the planet when it comes to the economy. they are used to more freedom

of. they are pushing back because they don't want to lose that. i think it would be a terrible thing for china. hong kong is a golden goose. it's important to the chinese economy. hopefully that have some constraints on what they do. if hong kong has to turn into the rest of china, it's not good for china, the rest of the world, and not good for the united states. it means the united states has limited ochtions. we want to engage d limited options. there will be reluctance to do much more than give well wishes to the people of hong kong. i want to wrap it to get to breaking news. is co-significance tems earnings report. deirdre is back from the stock exchange. we saw the stock going down more. dierdre: even those company did

exceed on the top of and bottom line for its fiscal fourth quarter, you began to see the guidance. so for the fiscal first quarter for cisco, the company says it will earn western 80 and 83 cents a share. the company is saying it will be dwenl a zero -- it will be between a zero and 2%. so this just what we have seem today, a huge tech sell-off. this will be extraordinarily unhelpful. in tomorrow's special, cisco has three main branches. ibm is a competitor. so all of those are likely to get caught up in this as well. i'm waiting for comments from the ceo. the ceo said well we are tbhot not seeing too -- we are not

seeing too much of a slowdown. i have not heard or seem anything from him on that front. postmark the you are seeing is co-down close to 7%. liz: the dow suffering its biggest loss of the year. joining me on the phone, first trust advisor. too volatility continues. today was a bigger day than we have seen in a long time. but i'm not overly worried about it. i think the stock market is still undervalued. earnings are going up. the inserted yield curve is different than your father's inserted yield curve. ever since the feds started doing quantitative easing, they changed the way they've manage monetary policy. so this inversion is not like it

used to be. it's not because the fed has overnight tned. there -- has over-tightened. i would argue the bond market is in a massive bubble. let me come pair this. 97, 98, 99, the stock market is going through the roof, but earnings were going down and everybody said we would never have a recession again. today economic growth is relatively strong in the u.s. inflation is 2% plus. there is no way you should have a 1.5% 10-year treasury yield. i think it's a bubble like the stock market was a bubble in '99. and everybody was saying we are going to have a recession. i think they are wrong. i think this is a massive bubble

in the bond market that has no justification in the fundamentals. >> does that bubble burst? what are the implications? >> i think eventually the bubble will burst. there is probably no doubt the fed will cut interest rates again. the political pressure on them is intense. we live in a political world today. people can't stand pain even if it's only a day or two. jerome powell twisted himself into a pretzel to justify rate cuts. so what this means is interest rates will stay down. by the way, that's positive for the stock market. it's not negative. low discount rates are good for the market and they are positive for the economy as well. i am just worried down the road you will end up with more inflation and eventually this bubble in the bond market will

pop and that's when we start to have worries. but i don't see anything in the near term where that becomes a problem. melissa: what do you think about the trade war and chinese industrial production and contraction in germany then? >> there is a bunch of things going on. the u.s., by cutting corporate tax rates. germany has a 30% corporate tax rate. back in 20134 the u.s. had -- back in 2013, the u.s. had a 40% tax rate. now we have a 27% tax rate which is lower than germany. so we are no longer subsidizing their growth. and going after china and their

intellectual property. and communism doesn't work. i hope they don't go after hong kong. it's the opposite of what they should be doing. they should be opening up their economy toward more freedom, not closing it down. that worries me because in the end communism always fails. i think a command and control economy doesn't work. so right now the u.s. is the one place that's growing. we are pick up growth from china and europe. and this idea that the federal reserve need to cut interest rates to avoid a recession, i don't agree with it at all. melissa: very interesting perspective. basically saying the opposite of everybody that came before you in this show. thank you for coming on. connell: we move out to the

preparation some companies are making for an check in downturn. u.s. automakers are sowjtd the alarm. reporter: those automakers are by no means immune to trade tensions and the possibility and fears of a recession. they are probably directly affected by them. you see their stocks, taking a look at ford and general motors. they are down today just as all the stocks were across the board. and that was driven by these trade -- or these recession fears. now we know these companies ford and gm in particular are planning for the possibility of a recession. they are stashing away cash in the event of a downturn. putting away $20 billion in cash as a buffer.

gm $17 billion. the gm ceo said it's something we keep watching for in a recession to make sure we are set for when the downturn does come. >> it's inevitable. it's coming. when it will be, that's the big question. sales for both of these companies have been slipping. gm down 1.5% in the second quarter compared to the same time last year. industrywide car sales are down. they dropped 3.5% since the peak in 2015. these companies have obviously been through a recession before. gm benefited from the bailouts from the government. they changed the way they do business in a substantial way so they hopefully won't need that.

and they have this cash start away. so they are preparing for a recession. connell: here we are covering the dow's worst day of the year. what can we expect tomorrow? only teddy wiseberg knows. and he's not willing to tell anybody else. so this is a crazy environment obviously. it's up one day, down the next. what do you make of these arguments we are having not so much about the stock market, but about the economy. >> the good cop-bad cop scenario. the worst day of the year. the volatility takes your breath away. i think only the liars say they are making money in these markets. because these markets are impossible.

the bottom line is this good cop-bad cop. good news-bad news. every day it seems to change between hong kong and the tariffs. the federal reserve overshadowed the earnings picture. it kree airports so much uncertainty, and the markets can deal with just about anything. they can deal with good news and bad news. but the day to day good cop-bad cop' drives the markets crazy. i think -- who knows what tomorrow brings. maybe we are up 500 tomorrow. but it just dependers on what the news cycle is going to be overnight. this lack of visibility creates lack of confidence, creates all the uncertainty, and the markets can't cope with it. connell: we got the is co-report. but to your point, when peter

navarro, the u.s. trade advisor was on, it's almost laughable that what the president did yesterday in putting off the starr tar rivers makes things more d -- putting off the tariffs makes things more certain, something could come from overseas. do is there anything you would like to see, a statement from somebody, the federal reserve. somebody comes out and says something and it gives you have peace of mind? >> it's clearly the tariffs. it has dragged on for months. they are on again, they are talking, they are not talking. we are going to have a deal, we are not going to have a deal. it's a credibility issue in i am not sure anybody thinks there

will be a deal. and we stirred the'for what? and in the end what will we have accomplished? it's a high stakes poker game. these guys are all playing hardball and we are spectators. it's fund amount alley draining. as far as the stock market is concerned, as far as the markets are concerned, this uncertainty is a big problem for the market. the overall economy seems to be final. but at some point the tariff stuff will weigh on the complete so all the good numbers might not be so good in two months or three months. who knows. connell: the fun of being a spectator. teddy, thank you, sir. melissa: market volatility, the

ongoing trade war and fears of a recession. you heard how it can impact your wallet p. how will it pay off in 2020? our panel is back with us. our panel is with us. gianno, we'll start with you, whose hand is this playing into? >> obviously president trump, the economy is the number one factor that will -- fit goes well and all predictions are correct, he'll stay in office by way of the economy. the volatility we are seeing in the marketplace that are beginning to bubble, not necessarily at the consumer level, but the business level has become a bit problematic for him. thankfully we haven't seen as much of a reaction at the consumer level. but business leaders are absolutely concerned and they are not able to make predictions or decisions on buying their

goods because they are not sure what's going to happen. so something needs to change. i understand what the president is doing. he's doing what the president elected him to do. melissa: it seems like he's leaning on the fed to give him the room to fight the other battles. it seems like he used that room to instantly hit china. do you think that's what's going on? and do you think that maybe he lays off at this point in order to help himself into the election. >> if you want to go with the president's playing checkers theory it's possible he couldn't talk the fed into lowering rates so he's manufacturing an economic crisis through tariffs and will generate lower rates that he can earned at his will before the election leaving us

with an economy that's pretty strong. it will cause a massive economic boom. real estate if you want to play that game, you could say the current slide is the. billthed the bill maher slide. the recession becomes a self-fulfilling prophecy with the new administration. therefore we don't want a recession before the next election. so people get nervous when it slides. the previous guest said plan for the recession. it's going to happen by the nature of the behaviors they take in so planning. melissa: that was a good analysis. everything joan as said there made a lot of sense. >> one of the things to bring this back to business when we were doing the segment earlier.

you have know how much cash they have on their balance sheets in if there is a sign of come any not in trouble, this is not 2008 all over again. talk us into a recession could potentially happen if we pull out our whichy board -- our weed make it hatch. melissa: todd, couple that with what jonas said. he says he could keep this going until second he needs it and then let everything explode into the election. let the market go higher, let the economy stand. just back off the whole china thing if it is of his making. >> he could do that. we can see the power he carries with one simple tweet or a

couple of words. obviously he has a tremendous amount of power. we are in the early stairnls of a recession. we look at consumer connell if i dense, 2001 and 2008 they are the same they are now. ism not saying it will collapse the market but the overall economy is starting to show warning signs. i do believe president trump will be ready to address those at the end of the election in 2020. >> china wants to see a recession. chain a wants to see a recession. >> chien is in a recession. >> they want to see a recession in the united states of america. we imported $540 billion in goods and exported $120 billion. they own a percentage of our

debt. but when it comes to what they prefer to do, they prefer to keep dominating this economy. connell: coverage continues here. on a day the dow is down 800. whether a recession is coming. what the president should do and the fed, what have you. you i know you have a different and unique perspective. what's the peter schiff take on this? >> everything the federal reserve has done since the 2008 financial crisis was a mistake. all they did was succeed in making all the problems that make that crisis worse. theyed it up by inflating an even bigger bubble than the one hat popped in '08. by trying to shrink their balance sheet they pricked that bubble. now we'll complete economic

crisis they interrupted in tweet. in -- in 2008. but the back half will be worse. we are head for a recession. it will be worse than '08, the fed is going back to zero. they are going to do qe again. but it's not going to work. all the inflation is going to the super markets and the gas station. it won't go into the stock market. the dollar will go through the floor, it will take the bond market with it. the next crisis is not stubb prime mort ages, it will in the treasury market. this will be inflationary where there is no way out. the recession will start before he finishes his term which means he won't have a second term. but the worst part of the recession will take place on the watch of the next president.

>> is this bill maher? connell: how do we get there from here? if there are so many problems around the world which we know there are. and the capital is flowing into the united states for the time being. that supports our currency. so how does that all -- what happens? >> that capital is going to flee. people made the mistake. initially everybody believed fed was going to normal size rates. i knew they couldn't do that. the feds finally aborted the process. the market still believe we somehow have a better economy and our rates will be higher and we'll avoid recession but when they realize that's not true. when the fed slashes rates, they will flee from the dollar. especially when inflation continues to rise.

as we move into this recession, consumer prices will rise even faster. even if the dollar starts to fall, it will push prices up even more. connell: how do you explain the fact that we haven't seen what we would by now have seen actual inflation, more than what we have sooner in government data, that it hasn't been more that than it is. >> yesterday we got the first back-to-back first 3-point gain. since 2001. but a lot of the inflation the fed created showed up in asset prices, stocks, he'll estate bonds. but that inflation is going to move from assets prices to goods prices as confidence in the dollar and u.s. economy is lost and when the markets price in a trump loss. right now everybody thinks a

trump victory is a sure thing. just like everybody those couldn't win in 2016, everybody thinks he can't lose in 2020. connell: you think there is an investment bet on the election. >> i remember nobody thought he could win in reality. people thought it was crazy. i was one of the few people who came on television and said i think he can win. now i think he's going to lose. i think the recession is going to start before the end of his term and it will be blamed on him. george bush was able to get re-elected. the fed bought bush a second term after the dot com bubble burst. we elected obama. now the fed won't be able to inflate another bubble to save trump. it will blow up on his first

term and the democrats who follows him will be a socialist and will be much worse for the economy than obama. connell: your point is the market will try to price that in, if you are right. we'll see. one thing you are right about, the timing of these political events. his father would have loved better timing before the '92 election. we have to run with everything going on. but we appreciate the perspective. mortgage debt surpassed the level of the '08 crisis. sam, good to see you again. last seen when i was in miami and we were talking about real estate in that area at the time. this is obviously more broad. what's going on here? is this a red line or warning

signal? >> i think everyone need to take a step back and reax. we try to compare to 2008. mortgage rates all day long. we were seeing 6% for a 30-year fix. we were getting 3.6. a year ago it was 4.6. in 2008, every one and their mother was getting a mortgage. you can't have a job, great. we'll aprowf and you will get that home. now, you basically have to give away your first born to get a mortgage. you have to have money, credit, a job. they are not giving it away. i don't see a problem with that. you should only have a home if you can afford it. if you have an ability to pay your mortgage every month.

if you have all of that set up, and you have the already already slow interest rates that keep on going down. that's a big story we covered today. if these rates are so low, the comind -- the underlying economy, the consumer is fairly strong. for the next however many months. people should be taking on more debt buying homes. do you think we'll see that? >> the stock market has been up, it's been down. trade trade wars. we can go on and on about all of that. people are fearful of spending. but the real estate market as a whole, are the prices higher in many markets? 100%. some people are staying home and they are refinancing. that doesn't mean they are fearful of anything, that could mean we have inventory issues, so maybe they can't find a home to buy, maybe they are watching

too much hgtv and they want to stay home and renovate. we can't always just ar assume the airporty and putting fear into people. connell: with the interest rate environment and strong consumer you would think they would be more aggressive in the next near or so than many people expect. >> prices are still high in many, many cities. so are you have motivated to buy a home when you might be paying top dollar? you might want to sit back and think more about what to do. at the end of the day if you need to rent, that's okay. you should be saving your money and make sure you can afford your mortgage payment and not just spending and buying a home because want a home. it's market where people think a little bit more before they spend. connell: what about the market in florida? last time it were on we did talk

about it. more people moving into until largely because of taxes. >> 100%. we have tons of new yorkers. 50% of mire clients are from new york, i have chicago, i have california. i have so many people here. it's a beautiful thing for me. i don't know if it's a beautiful thing for you. it's also a lot of lookers. 2020 will and big year where we'll see that's more people moving down south to south florida, buying more real estate and taking advantage of not having the state tax. connell: there are a few people we could get rid of here. thank you, sam. melissa: walmart set to report second quarter earnings tomorrow

ahead of the bell. the panel is back. okay, jonas. since you are into the double secret overthinking of the 3-d chess game. in the second quarter walmart sits there and they raise their guidance for the next square. that's what we could see tomorrow. if they don't raise their guidance, then does the market take that as a sign things have gotten worse in the past week or two and they chinged out on doing what some had been thinking they might do? what do you think about that theory? >> i think this tom company is so not relevant in this tech space. there is a lot of fear that that part of the market, walmart failed in online commerce. but the companies really not

working with the kind of consumer we care about and the kind of dollars flying around in the tech world where it's like revenues for facebook spending money on service and online storage from this company. i wouldn't expect much from this company. if they got side sales because there is a big sale at amazon is not a good story. >> i disagree with jonas 92%. ordinarily i think the market would look at the earnings report and the guidance as a proxy on the company. right now the questions about the consumer and our economy, i think the market will look at him as a proxy on the consumer which drives the economy. melissa: todd, everybody mentioned walmart when you talk about the trade war and the

impact it would have on prices for the consumer. they have always use the what about the cheap t-shirt you get at walmart from china. if you think people are going to look at this before the bell to see if we see another down dane day wore if we turn this around:walmart investors have priced in the fact they will be shaky on earnings. it's more than a dollar in the same time period. walmart is a great bellwether. and they are so big they can get by the excess expenses we've may or may not see from them. i expect them to have a good report, better than expected and i expect the stocks to go higher. but i think walmart will be just fine. i think they are one of the greatest companies in the united states.

melissa: gianno -- he's not there -- well, i was going to let him predict what the president was going to tweet on walmart. if he's listening eye and thinking why did they cut my mic. i want to do that. but i think it president will tweet one way or the other. jonas you can have the last word. >> they have a low margin and they can't afford to eat the tariffs like nike or apple. walmart has a very thin profit margin. if there was a substantial price inkrielts would have to be across all their prices. they couldn't eat it forever. nell * thanks for being with us -- melissa: thanks for being with us. it was a bloodbath in the markets today. the dow down 800 points. the. retail numbers out of macy's.

if this means there is more to come to the down side. shane require was good to get different takes. we may see you back here tomorrow for a 1,000-point rally. david: the u.s. state department issues a new travel warning. we're on the ground in hong kong coming up. but first, to our top story, wall street walloped. the dow plunging 800 points today at the close. the fourth largest point drop in history as fears of a global slowdown intensify. it is the worst day of the year, with stocks, for all three major averages ending down about 3%. this is a key indicator that we haven't seen in more than 12 years, rings the alarm that a recession could be on the way. welcome, everybody. i'm david asman. this is bulls &