game-changing moment in the fomc, where they started realizing maybe this isn't a negotiation and a longer fight. maria: fantastic conversation. gentlemen, i wish you a wonderful weekend. thank you for the excitement. you got it all here. have a fabulous weekend, everybody. see you next time. stuart: good morning, maria. good morning, everyone. i'm here, okay. on this program, we're always trying to offer clarity. we want you to know exactly what's going on. so we use plain language, no jargon. that's not easy when you are dealing with the federal reserve but that's our job today, explain in everyday terms what jay powell is going to do with interest rates. one hour from now, we'll know. so will you. will rates come down? by how much? and when? will mr. powell respond to the rate cutting pressure from the president? will he have to match the huge rate cuts of europe and japan? does he feel the need to reverse the recession indicator?

heres' the jargon, the yield curve inversion. this is fed day and a very big day. in advance of the official word on rates, stocks have been all over the place this morning, up and down, moment to moment. right now we are looking like a loss of maybe 112 points for the dow and down 45 on the nasdaq. this is what's hitting the market, china. china says it will impose 5% to 10% tariffs on $75 billion worth of u.s. goods. that is obviously a negative for china trade. it's escalation and therefore, bad for the market. elsewhere, later today, the president leaves for france for the g7 summit. interest rates and trade will surely come up there. they are gearing up for more big protests in hong kong. we're on it. and just wait until you hear what larry kudlow says about tax cuts. let's get going. "varney & company" is about to begin.

we've negotiated with them, we've tried to move the football. they have backed away and we have taken measures through all of that time, we've had a very strong economy, we've had a very strong stock market because the market looks at the data and understands that even though this relationship is very important to get right, the actual amount of money that's being tariffed is not material in terms of macro growth. stuart: all right. that was obviously peter navarro on this network earlier. i think he was downplaying this morning's imposition or threat of imposition of tariffs by china. the market did react to that. stocks went down right after china's announcement. we are still down about 100 points for the dow with 28 minutes to go before the market opens. market watcher rebecca walser is

with us. this is tariff confrontation, right, it's an escalation in the trade fight and that's why the market's down. have i got it right? >> absolutely right. obviously busy morning before the market even opens. this should have been expected. we knew china was not happy with trump escalating on the last $300 billion obviously before september, then december, now pulling stuff back, so this is a retaliatory, you know, play pure and simple. stuart: look, i was hoping for a short-term intermediate modest deal but i don't think we are going to get it. instead we have confrontation and the market is down. stay there. more from you in just a moment. i want to get to hong kong, where the protests continue. they are ongoing as we speak. susan li joins us by phone. susan, tell us about what we are seeing on the screen, a human chain of freedom. susan: it's incredible. yes, this human chain with p

protesters literally arm in arm across a huge territory of hong kong. think about all the thousands of lakefront or harbor front there, also here on the central side as well where the buildings are, the downtown portion of the city and all the way up to the new territories. they climbed up lion rock, a popular climbing destination. they call it the hong kong way. here in hong kong, they are targeting just over 20 miles. they hit that mark 40 minutes ago and more people are continuing to join. they were expected to end the movement at around 9:00 p.m. but i don't see anyone going away any time soon. they are still chanting here looking for their freedom.

they are asking for the freedoms we all enjoy in the u.s. stuart: susan li in the middle of it with some extraordinary scenes ongoing in hong kong. the human chain of freedom. that may be clear here, that is not affecting our stock market at this point. it is a backdrop to our market and a backdrop to the g7 meeting that's coming up. yes, we're down, but we're down because of largely china's imposition of tariffs september 1st. they have threatened to do that. the really big financial story of the day is frankly fed chair powell, speaking in about an hour. back to rebecca walser. here's what i think, for what it's worth. i think the fed's going to cut rates sharply and fast. now, my question is, if that does not happen, what do you think happens to the market? >> well, obviously the market is down. we were hoping to snap our little losing streak there for a little bit and that's not going to happen with this announcement this morning. so we are looking now even more

closely at powell's sentiments at 10:00 a.m. from jackson hole and we want to see that -- i am frankly looking to see is he finally going to be more dovish instead of being so cryptic. i think he's had a lot of cryptic messages and is not very clear and we need clarity, like you said earlier. we absolutely do. we are looking for the fed to back up president trump's trade war with china because this is a war we must win. stuart: so you think that maybe powell will be influenced a little by the imposition of tariffs by china which they have just threatened to do? >> yes. stuart: you think this latest tariff imposition, you think that will affect jay powell's speech today? >> it's a little bit the last minute so he's going to have to adjust some sentiment but i think he is just facing mounting pressure. obviously a lot of pressure from the administration and the trade war does have an effect. even though we do see from the minutes that got released this week disagreements and breaks in between the federal reserve

governors themselves, this is actually something that he just can't avoid. so we are looking for him. you say you are expecting him to be very decisive and show that he will be supportive of the trump administration and these policies so let's see. let's hope that happens. stuart: let's not get carried away. fed chairs are rarely decisive. you have to read the tea leaves. quickly, the president just tweeted this. i will show it to you. now the fed can show their stuff. okay. very short, sharp, to the point. in other words -- ashley: one last message. stuart: one last message to mr. powell, that's right. back to you, rebecca. the president just tweeted that. he's applying heavy pressure to the fed. i got it. we'll see if the fed bends to that pressure or acknowledges it. here's what i'm expecting as well, as maybe rate cuts. i'm expecting that the market will be, the computers, the algorithms will kick in as they go through his speech and look at key words. i think the market will gyrate as to how those algorithms

interpret those key words. what do you say? >> i think you are exactly right. we just have to keep in mind this speech was prewritten before this announcement came out this morning, so it's not going to have the ability to be adjusted completely for this morning's events, so let's hope that we don't have an overreaction by the market, if it's not going to get the dovish -- we're really looking for indications that he's going to be supportive of future rate cuts and helping the administration continue on this mission. stuart: rebecca, thanks very much for taking time out on a very busy day. we appreciate it. >> thank you, stu. stuart: staying on the economy. listen to what larry kudlow said on this network yesterday about more tax cuts. roll it. >> so to clarify again on the tax question, there's no reason why we shouldn't be and in fact, we are, developing again tax cuts 2.0, we are touching base with all the key people in the administration who would drive

additional tax relief and create additional tax incentives for middle class folks, for blue collar workers, for small businesses. additional incentives. additional tax cuts. and you might see that during the campaign. stuart: okay. additional tax cuts, maybe surfacing during the campaign primarily for the middle class. jason johnson is with us, former adviser to ted cruz's presidential campaign. why are we talking about tax cuts when the economy at this moment is doing pretty well? >> you bet, stuart. thanks for having me. very simple. political context. as we know, the number one threat to the president's re-election is a recession, and it's not so much that one may occur. any time something happens, voters understand things are going to happen, including recession. the question is who do the voters blame. we know democrats right now are cheering for a recession. we know that with regard to the last tax cuts, democrats have

claimed all of those benefits went only to the top 1%. payroll taxes are a very different matter. this could be a very, very good strategic move for the president going into a re-election, putting nancy pelosi and the democrats in a box, forcing them to say no to payroll tax cuts which without question disproportionately impact working class blue collar voters in this country. if they say no, which they likely will, because remember, they want a recession simply so that they can beat the president, then he's able to shift the terms of the debate and place some of the blame at the feet of the democrats. stuart: you expressed yourself in a very succinct, clear fashion. we appreciate that. thanks for coming by. we do appreciate your input. thank you. >> thank you, sir. stuart: next case. massive fires burning right now in the amazon rain forest. getting political.

france's president macron calling on countries around the world to respond. you can bet he's going to talk to president trump about that when they meet in europe this weekend. climate will come up. the far left crying foul after the democrat national committee kills plans for a primary debate just on climate change. they're not going to do it. the left does not like that. we're on it. we are less than an hour until jerome powell's big speech. that will hit the market, it will affect the market, it will move it, guaranteed. where is the market right now? down 119 points for the dow industrials, down about 50 for the nasdaq. we will report this for you. david koch has died. he was a billionaire and a big republican donor. koch stepped down from his post at koch industries last year, citing health issues. david koch was 79 years old. do, read earnings reports, looked at chart patterns.

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stuart: not that far away from

the big speech by federal reserve chair powell. that will affect the market. what's hitting the market right now is china's announcement that they will impose tariffs 5% to 10% on $75 billion worth of u.s. goods come september 1st. that hurts the market. where's that yield curve? is it inverted or not? i'm squinting. the two-year is 1.596% and the ten-year is 1.594%. therefore there is a very slight inversion. that doesn't help the market either. couple retailers reporting, lower profit, lower sales at foot locker. they are taking it on the chin, down 10%. sales falling short of these expectations at the gap and they are down 5.5%. now this. nationwide effort to crack down on robocalls. don't you love it? is it going to work? ashley: we heard this before. you nearly threw your phone away yesterday when you had a robocall in the middle of the show. they never stop. what they are going to try and do, not only is the large telecom companies, but also the state attorneys general in every

state to try and stop these calls getting on to the network in the first place. not an easy thing to do. they are going to try and do it, promising to work to prevent these things from happening. there's a big fly in the ointment. it does not include internet-based telecom carriers. a lot of these calls are now being generated through the internet. so it's just a giant game of whack-a-mole. every time you think you linked this call to this area over here, you whack it, it comes back up over here. they are working on it, trying to do it. whether to perhaps hold the carriers accountable, start fining them, but finding the source of these robocalls is extremely difficult. they're working. they're trying. stuart: we are very glad to hear that. let's hope they can do it this time. i won't throw my phone away. something very, very important. he plays for the boston celtics. he's a forward. enis cantor, a turkish national who has been publicly critical of prime minister erdogan. he's not allowed to visit his

home country. there's even an international arrest warrant out for him. he joins us now in new york. welcome to the program. what's your problem with prime minister erdogan? >> i think, you know, turkey could have been the bridge of modernism and the west. just because of the regime is in power to abuse human rights and there's no democracy and there's no freedom, freedom of speech, in turkey. stuart: you just said this publicly. you are publicly critical of turkey's leader, therefore, you can't go home? >> i cannot go home. they revoked my passport. people are asking me where are you from? i don't know what to say to them. because i don't know where i'm from. they don't want me to be in my country. last time i was in my country was 2015. stuart: all those years ago. >> it was really hard to come here with my family now because they pressure my family in turkey. stuart: you can't go to canada? >> i cannot leave america because they put my name on --

he put my name on interpol. that's why if i leave america, outside of america, i can be arrested. stuart: your youth clinic was shut down because of threats? >> because of turkish embassy came to the mosque and literally bullied american mosque and said if you guys do a basketball camp with me, you guys are not allowed in turkey. stuart: president trump often steps in to help people like you who are frozen out of society because of your complaints about human rights. have you appealed to the president? or the administration? >> if he's watching, i would love to meet him. i think people are asking what can be done. i'm meeting with a lot of senators and congressmen and i think if america puts sanctions in turkey because erdogan is taking turkey in a very difficult direction. i think if america put sanctions

in turkey, i think this is going to solve the problem. stuart: have you done well in america? >> i'm trying to. i'm trying to. i play for the boston celtics. i'm trying to. stuart: look, we really appreciate you being on the program today. >> i appreciate it. stuart: we hope that something can be done for you. >> i will just pray for my country. thank you so much. stuart: thank you very much. appreciate it. look at futures, please. the market is affected by china announcing an increasing tariff on $75 billion worth of our goods. jerome powell speaks at the top of the coming hour. that's what's going on in finance. back in a moment. there's a company that's talked to even more real people than me: jd power. 448,134 to be exact. they answered 410 questions in 8 categories about vehicle quality. and when they were done,

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stuart: the share price of overstock.com, look at it, up 8% yesterday after the chief executive patrick byrne resigned. he stepped down after disclosing a romance with an accused russian agent, maria butina. byrne said former fbi agent peter strzok directed him to continue the relationship and share information with the department of justice. byrne said he left because he does not want to be a distraction to the company. premarket this morning, down 2%. back to that news we told you about at the top of the hour. david koch has passed away at the age of 79.

jackie deangelis with us now. you have some statements from his family? jackie: good morning. that's right, stuart. he was 79, advanced prostate cancer. he had a grim diagnosis. his brother, charles, issued a statement. i will read you part of that, quote, while this is a very sad day for us all, i want you to know david was proud of the extraordinary work you have all done to make koch industries the successful company that it is today. he will be greatly missed but never forgotten. he is leaving behind his wife, julia, three children. julia also issued a statement. while we mourn the loss of our hero, we remember his iconic laughter, insatiable curiosity and gentle heart, his story of childhood adventures enlivened our family dinners, his sensitive heart had him shed a tear at the beauty of his daughter's ballet and beam with pride when his son beat him at chess. we will miss the fifth link in our family. stuart: he was extremely wealthy. jackie: very wealthy man.

stuart: i always thought libertarian causes. jackie: he had flphilanthropy causes but was a political activist as well. his views seem to shift as the years went on. he definitely made sure that he shared his wealth in that regard. stuart: thank you, appreciate it. thank you. back to the markets. here's how we are going to open in about 4:50. down about 122 points. remember, this is fed day. the market right now is reacting not to the fed but to china. it may be imposing additional tariffs on american products. that's a negative. dow is down 100. back in a moment. hey, who are you? oh, hey jeff, i'm a car thief... what?! i'm here to steal your car because, well, that's my job.

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stuart: as we head towards the opening of the stock market, the yield curve, whether it's inverted or not, is a big deal. as of right now, it is not inverted. it is not flashing a recession signal. the yield on the ten-year, 1.60%. the yield on the two-year, 1.58%. that's the way it ought to be. the yield on the ten-year above the yield on the two-year. have we all got that straight. at the top of the show i promised not to use any jargon and here i am rattling on. ashley: so much for that. stuart: thank you very much.

as of now, as of right now at 9:29.47, we are not inverted. we will probably open lower. here we go. this is going to be a big day, folks. watch this very very carefully. in three, two, one. bang, the market opens this friday morning. it's fed day, it's china trade day as well. let's not forget that. that, because of china trade, that's why we open down 121 points, with a lot of red on the left-hand side of the screen. essentially, this is an escalation in the trade fight and the market does not like it. down 124, nearly a half percentage point. how about the s&p? what's the reaction there? exactly the same. we're down almost a half percentage point, 13 points lower. the nasdaq, down just over a half percentage point. so we are down across the board and this is largely on china trade. don't know what the fed's going to say just yet. joining us, david dietze, jonathan hoenig, ashley webster.

i've got to start with fed chair powell. david, here's what i'm going to say. i think we are going to get rate cuts, rapid rate cuts. i think we're going to do that. what happens if we don't do that? >> if the market's not going to take kindly to that, i think you will have bigger risk of inversion of the yield curve, that's going to produce more recession talk. that's not the direction you want to take. the key thing for jerome powell of course is to make the case for future rate cuts without trashing the strength that's currently the case in the u.s. economy. the consumer is going strong, we are seeing additional data on that from retailers coming out with blowout numbers. that's the key balance he has to have today. stuart: okay. jonathan -- >> that's really the frustration. that's the irony, that lower rates, 0% interest rates technically historically have been the indicator of a weak economy. so the fed as they told us during their minutes, essentially making it up as they go along. japan have had 0% interest rates for two decades, has not spurred

economic growth. it has spurred mal investment. i think that's one of the factors confronting stock investors this morning. >> we have to keep up. that's the whole point. ashley: the dollar has become so strong which is a real disadvantage in global trade. you have to, despite what we think the economy is doing, which it is humming along quite nicely, i think in order to keep up with the rest of the world we have to cut rates. stuart: mr. powell will have to take account of this tariff threat from the chinese. to me, that's another reason to cut rates aggressively as of now. we'll see what happens. we will let you know first. let's talk this china trade. they have announced the intention to raise tariffs 5% to 10% on $75 billion worth of u.s. goods. david, this fight is not ending any time soon. that is escalation. >> yeah, absolutely. of course, it raises the question what is it they import from the united states. putting that aside, this takes

the trade war to another step. as ashley was saying, i think it does make jerome powell's job a little easier. one of the key reasons to potentially cut rates is trade wars and obviously this is front and center. stuart: we have opened and are down 138 points in the first three minutes of business. let me get to tax cuts, very much in the news these days as well as the fed and china trade. i've got to say i'm confused. on day one, the president said cut taxes. day two, he reverses that and says no, we're not going to cut taxes. day three, larry kudlow tells fox business that we're going to think about cutting taxes during the election campaign running up to 2020. do we need a tax cut right now? >> i don't think we do. i think it runs the risk of further exacerbating the rise in the u.s. dollar because that will just make our economy go into hyper-overdrive and bring even more money here. of course, the other thing is tax cuts won't really address this potential inversion of the yield curve which the federal reserve focused on. stuart: the tax cut proposals are way down the road here. we are talking 15, 16, 17 months

from now if they are even possible. >> that's right but the consumer may start spending before that. stuart: jonathan? >> quickly, to your point, the president is unfortunately, his team are creating this uncertainty, not unlike during the obama administration, every day there was ideas for new stimulus programs and investors had to react. unfortunately, we are experiencing very much the same thing. one day being told one story, the next day just the other. one idea and the "wall street journal" floated this earlier this week, would be a tax cut by getting rid of the tariffs, ending the trade war, it would be a tax benefit for american companies which has paid $6 billion in tariffs just last month. stuart: doesn't look like it at the moment. let me summarize this. we have an escalation in the trade fight. that's a negative. we've got an escalation in the trade fight which means we are probably not going to get a quick agreement. we've got talk of a tax cut but way down the road. and fed chair powell, he speaks literally in 26 minutes and let's see what he's got to say

on interest rates. all that factored into the market. right now we are down 108 points for the dow jones industrial average. okay. got that. there you have it. down 117. we have been holding at that level since the market opened, down almost a half percentage point. couple of individual stocks that are making news. hewlett-packard, now known as hp, gave a not so rosy forecast. it's down 7%. same story at red robin. that is, well, that's up 3%. go figure. sales force gave an upbeat forecast, thank heavens they're up. boeing was up last session after reports of an upbeat production forecast and it's up a bit more today, $6, $7 higher, nearly 2% up. on fed day, quick check of gold. it's up six bucks. quick check of bitcoin. i think it's still around ten grand. it is. $10,200. the price of oil, look at that one, that is going down. ashley: dropped below $53. stuart: i think that's on the

strength of a strong dollar. i think that's what's going on there. okay. that means oil at $54 a barrel. i think gas continues to fall. it's still $2.60 a gallon national average but i think $54 a barrel oil, i'm hoping and praying we come down some more on gasoline. big week for retail stocks that reported earnings and we have more of them coming, came after the bell last night and some this morning. look at them there. gap's down, ross stores down, foot locker, they are all down today. but it's the consumer that's keeping this economy going. >> that's the key question. what can we draw from the strong reports. the larger the company reporting, walmart, target, lowe's, home depot, you can draw the strong inference. some of the smaller players, i think expectations were so low that anything was better than complete disaster and stock investors rushed back in. >> there's been a potentially

whittling of retail, separating the wheat from the chaff. lot of people said amazon would be the complete category killer but we saw this week target, a new 52-week high. some of the names are breaking out. to david's point, whether it's kohl's, macy's, dillard department stores, those who haven't invested, haven't taken on amazon, have seen their stocks get crushed. stuart: fair point, well made. look at the share price of the theme park chain six flags. right out of left center field, here comes jonathan saying, suggesting that apple or netflix could buy it. okay. before we go any further, do you own six flags stock? >> no. stuart: okay. >> no, i don't. i don't own the stock but i'm always looking for sectors of the market that are doing well without a lot of obvious explanation, looking for the trends as they start to emerge. a lot of these theme park operators like ticker symbol fun, six flags or sea world, those are doing well even during this time of market uncertainty. with all this talk about the

entertainment giants battling it out, what does, for example, disney have that netflix or apple do not? they have the theme park presence where people can actually go, step into the movies. it's a hare-brained idea. i don't own the stock. stuart: did you say hare-brained? what on earth would netflix do with six flags? >> they are an entertainment company. an entertainment extends far beyond simply the box in which we watch all these shows, the screens on which we watch all these shows. disney makes a lot of money in their theme parks and a market cap of six flags is only $5 billion. it would be a rounding error for a lot of big cap media companies. stuart: your idea is on the table. i'm sure it will be discussed. now we will move on. look, first it was twitter. then facebook. now google shutting down, what is it, 200 youtube channels

because they were doing something about covering hong kong. lauren simonetti, tell me the story. lauren: this is the disinformation about hong kong. 210 channels were in a coordinated manner posting videos about hong kong that were not friendly to the protest movement there. alphabet has taken those videos down. why is this important. remember what russia did when they intervened trying to influence our 2016 election? is this a trial run for china perhaps doing the same thing for 2020, perhaps trying to get a democrat elected to beat president trump. it's a very important move that alphabet, twitter and facebook are taking these posts down that are linked to beijing but it also goes to show you that the social media internet space is very vast and very difficult to do. stuart: very hard to police. lauren: they're trying. stuart: i don't know how they do it. lauren: china is getting sophisticated. stuart: whatever you say. thank you very much indeed. it's 9:40 eastern time.

i have to say thank you very much to jonathan and david and lauren. thanks very much, one and all. show me that big board. i think we are in a state of pause at this moment. we opened the market ten minutes ago and we have been down 110, 120 points for that entire period. we are waiting for fed chair powell to speak. he speaks promptly at 10:00. so are investors. before he speaks, before we can find out what he's going to say about interest rates, you can expect the market to be pretty much on hold. it's just digesting the bad news on china trade. now then, hasbro are rolling out a new socialist version of the classic board game monopoly. you know it's lighting up social media. nou th you know that? it is. the game offers the chance to contribute to community projects instead of buying properties. actually, you have the chance of taking it out of the community

as well. you can be a capitalist as well. believe me, you can. you have probably seen this video of carli lloyd kicking a 55-yard field goal at the philadelphia eagles practice. in our 11:00 hour, we will ask former nfl punter sean lan d landetta if he thinks a woman will ever make it to the nfl and what it will do to the image. president trump heads to europe for the g7, expected to go after the europeans to pay their share to nato. more "varney" after this. imagine traveling hassle-free with your golf clubs.

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if you really want to see the market move, wait until 10:00 eastern time. that's when the fed chair speaks. that should probably move the market. right now we are down 93. a few minutes ago we were down 140. the g7 meeting starts tomorrow and france's president macron wants world leaders to put the fires in the amazon rain forest at the top of the agenda. we have seen a lot of coverage of this recently. those fires are ongoing. joining us, climate depot founder. the fires are getting political. i see a clash coming at the g7 between especially the europeans who are dead set against climate change and president trump. there's politics coming up here. >> there is. the first thing you got to understand, they are punishing brazil's leadership for threatening to pull out of the u.n. paris agreement, for not accepting the scientific consensus, and they have actually distorted the fires here. nasa just came out and said historically, the fires in the amazon are not unprecedented, they are only up a huge amount from last year but they are

historically low and only the biggest since 2013. brazil is being punished because of these fires because of their stance on climate change. president trump, the same way they punished president trump. he's going to this meeting and he's been vilified for years for the same exact issue. of course, trump doesn't help himself by, you know, his demeanor with some of the world leaders. but in the case, you know, in the case of brazil and trump, they will sort of be on the outs at this g7 summit by all the other leaders, particularly macron. stuart: guaranteed. now, i'm sure you saw it. bernie sanders submits his green plan, his climate change plan. $16 trillion worth of cost right there. then we heard that the democrat national committee is not going to have a single issue debate. they were going to have a single debate on climate change. now they're not going to do it. seems to me that the party, the democrats, don't want an intense discussion of climate change because the country's not behind it. what say you?

>> absolutely, yeah. the climate candidate, governor inslee, just dropped out. he was at .2% at the latest iowa poll. the day after he drops out, the dnc not only do they not have a debate, but biden's campaign is quoted as saying a climate debate specifically focused on that is quote, dangerous territory for the democrats. this goes on the heels of even msnbc saying that climate is a ratings killer, whenever they cover the issue. so the democrats are terrified of being seen as the climate-only party and bernie is just stepping up to the plate and trying to out aoc, aoc on the green new deal, coming up with an even more expensive and ambitious plan. stuart: is it $16 trillion? that was for bernie's plan. >> $16.3 trillion or something. yes. stuart: over a ten-year period, i think. >> yes. he also has magical thinking. 3% of our energy comes from solar and wind. by 2030 he wants it to be 100% of our electricity. this is fantasy thinking.

he also wants to punish fossil fuel companies, start prosecuting them for the damage they have caused allegedly. he also is going to give $200 billion to the u.n. green climate fund. this is a wish list of all the climate activists and political left and it's really designed just to pressure the democratic party and particularly joe biden to kow-tow to the democratic party climate interests. stuart: i think it's a bad political strategy. even the activists in the party who run the primaries, i don't see them going for a $16 trillion climate plan and $31 trillion medicare for all plan. i just don't see that. i think they have gone so far out of line with the rest of the party that i don't think they are going to win on this one. >> no. and i think it's pretty transparent. there's a whole bunch of non-climate stuff in bernie's plan, as there was aoc. this has nothing to do with the climate. this is using the climate scare to get this radical agenda across. i think it's even scaring the

quote from the biden campaign, not only was it dangerous territory but it's dangerous territory for middle america, for expanding the democratic party base, and the mainstream democrats, the establishment, they are terrified of bernie. they are terrified of this issue and the way the hardcore activists want to exploit this into a wholesale change of the american economy which by the way, would have no impact on the climate even if they are right on the science which they're not, using the epa's own model. there would be no impact on temperatures 100 years from now under bernie's or aoc's plan. stuart: even on fed day we have time for climate change. thank you very much for joining us, marc. next case, the trade war with china is projected to cost us billions in lost tourism dollars. tell me? ashley: $11 billion from last year and this year is the estimate. last year, tourism from china down nearly 6%, the first drop in 14 years. the strong dollar also not hurting.

but the chinese tourist spends more than any other country visiting the u.s., an average of $5,800 per visit. let's not forget in june the chinese government put out a travel warning for people traveling to the united states about harassment in this country, shootings, robberies and thefts. didn't have an all-out ban but put out that travel warning. clearly that didn't help either. stuart: did not know the chinese tourists spend more than others. ashley: any other nationality. yeah. stuart: didn't know that. let's check the big board again and the dow 30, please. it's a sea of red. got to tell you that. but that is 11 minutes in advance of fed chairman powell speaking top of the hour. okay. we didn't believe it when president trump floated the idea of buying greenland. i thought it was a joke. the mainstream media mocked him. but it might not be as crazy an idea of some people think. greenland has a lot of strategic importance. we will tell you about it in our next hour. got it. here's a commercial break.

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stuart: we're working up to it. we're minutes away from fed chair powell's comments on the economy. while we're waiting, i want you to just take a look at what i said about the fed in the year

2011, eight years ago, when we were first starting the program. oh, dear. look what i said. i try to stay out of the weeds on television. jargon is the kiss of death. the second you start talking about the federal reserve and qe3, you've lost your audience. how many people really know what the federal reserve is and does? far fewer people know what qe3 is. that's why you'll never hear me say the yield on the ten-year bond is x or y percent. i suppose i have to eat my words. ashley: i think you do. stuart: because i used the ten-year treasury yield at least five times a day. ashley: i would say every other hour, if not twice an hour. stuart: i think today we have to suspend my personal -- ashley: you have to. stuart: you just have to. we are going to try for clarity. that's our pitch to you. we are going to try for clarity. i want you to know exactly what jay powell has said. okay? that's my job. joining us on the phone, ron

paul, who is a huge critic of the fed. ron, you've got 60 seconds. tell me what you think about jay powell's presentation today. go, sir. >> well, he has a hopeless task. he doesn't have the answers because he shouldn't be in existence. nobody should be dictating interest rates. that is our problem. that is price of money. the whole reason socialism always fails is they ruin the pricing structure. they don't know supply and demand and you do the same thing in money when you have a federal reserve fixing interest rates, causing imbalances and then they think oh, we can solve these trade wars with just manipulation of the interest rates. so it's an artificial situation created by the fed and i think it's delightful because more and more people are saying hey, do we really need a fed? no, it's all mischief. besides, socialized interest rates, socialized prices, and you can't do it, the only group

that benefits is anybody who has a reserve currency. that's why we have done pretty well. i think, stuart, it's safe to say now that we can declare that we are truly in a trade war, and that of course is bad and it will go on until both sides get exhausted. stuart: ron paul, thank you very much for joining us on the day when you go right up against the fed chair. thanks, ron. appreciate it. literally, three minutes away. we are going to hear from fed chairman powell. as of now, the dow jones average is down 127 points. that's now. he speaks in less than -- about three minutes. that market position could change. stay with us, please. you are going to see it all right here. hmm. exactly. liberty mutual customizes your car insurance, so you only pay for what you need. nice. but, uh... what's up with your... partner? not again. limu that's your reflection. only pay for what you need. ♪ liberty, liberty, liberty, liberty ♪

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stuart: ladies and gentlemen, we're literally 20 seconds away from fed chairman powell outlining what he will do with interest rates. he will speak on the economy.

he is beginning to speak literally in a few seconds time. make note please, the dow jones industrial average because as of right now, slightly in advance of the speech the dow is down 90 points. here we go. it is now 10:00. we know, edward lawrence with us. he is in jackson hole. what is he going to say? reporter: stuart i can tell you that the federal reserve chairman is about to speak. here is the speech. it is 12 pages long. he will work to, the speech is basically the cards being held close to the vest. there is no clear-cut call for a rate cut in the federal reserve chairman's speech today, happening right now. now powell does open the door to a rate cut. he talks about the shocks, specifically the shocks around the globe with germany having slowed, economic slowdown, china's economic slowdown, "brexit," hong kong.

he opens the door there, possibly for a rate cut but again says we're close to the 2% inflation objective as we're going through this year. we have low unemployment. no clear-cut call on this for a rate cut. he does say that business manufacturing, that business investment is slowing this year. he says though that consumer spending, wages are growing, how unemployment and consumer spending is driving this economy. the headline here, they will sustain the expansion and act as appropriate but again no clear-cut call for rate cuts. stu? stuart: edward lawrence, on top of it. thank you very much indeed, right there with the news as it is happening. i want to bring in danielle dimartino booth, former fed advisor. danielle, spell it out, you just heard edward lawrence, you spell it out in plain english what is chairman powell telling us? >> i can't do plain english, but i can tell you said the word

eventful, stu. he said the last three weeks, since the fed met have been eventful for markets. he specifically cited chinese tariffs. hawkish rhetoric from the likes of boston fed president rosengren that the fed has done enough to address. the trade war with china seemed to be slightly retaliated by what powell said in this speech. on the other hand of course he mentioned unemployment still being very strong. so he is, he is speaking, in a very balanced way. but again he is made note what, how much transpired in the markets over these past few weeks. i think that is friendly. stuart: we all have to read the tea leaves here. we have to interpret what he is saying. here is my interpretation. i think he is teeing up-rate cuts without actually saying it. he is opening the door, he is saying look, germany is slowing, china is slowing. you have the brexit problem. you have the hong kong problem. business and manufacturing are slowing. he seems to be teeing up the

possibility of rate cuts down the road. would you agree with that? because the market has come back. we were down 100. now we're down 15. >> absolutely. look, stewart, everything right now is extremely orchestrated. if jay powell didn't get a message from the rest of the world, i can tell you chinese officials were not up at 6:00 this morning on a saturday morning putting out press releases about fresh tariffs on u.s. goods in an uncalculated way. it is if they're saying, can you hear me? even coming from overseas. so this is, everything we've seen seems to be, as you're saying cueing up september the 18th for at least one more rate cut. if not maybe, the 50 basis points, half a percentage point that markets wanted but he is certainly saying that door is wide open. stuart: danielle, hold on a second. back to edward lawrence, please. after the initial rush of bullet points, what can you add? >> stuart, talking about this debate about trade. one of the big things that

played in the speech here, jerome powell said they're having trouble integrating uncertainty in trade over trade into monetary policy there is a big part of the speech talking about how that integration works. there is no precedent for it in the past. that is trade uncertainty. it seems weighing on federal reserve. to your point he does open the door to possibility of a rate cut. he allows al other members to come in, vote their mind on that. lays out the facts. the speech does give a little more policy, less after history lesson which he has done in the past. a little more meat to this speech on both sides, for a rate cut and against a rate cut. sort of saying what is the flavor of the committee? stuart: edward, thank you very much. back to danielle. i'm intrigued that you say that the chairman powell paid attention to china's statement this morning. the foreign minister came out said, they are going to retaliate. the u.s. will feel pain. they will impose five, 10%

tariffs on september the 1st. you think that was deliberate on the chinese part, teeing up, saying hey, this is us? >> you tell me, stuart. the release came out 6:00 in the morning in china on a saturday. of course there is a message there and that is why powell can be as strong as he is in saying quote, unquote, there is no playbook to this trade war. you never know where the lobby is going to come from, you never know when the next bullet is going to fly or hour 1/2 before the stock market opens and two hours before my speech is set to hit the wires. very calculated. he is right, they have to absolutely pay attention to it. the kansas city fed survey that came out yesterday, was absolutely terrible. 55% of those surveyed, where he is in jackson hole, 55% of the surveyed this trade war is hurting us, our ability to do business. he sounded the industrial group

at the carlisle. he speaks to business people all the time. he has to be cognizant of the fact that this is very wearing and tearing on their ability to conduct business. stuart: okay. danielle, hold on a second. turn your attention to the market please. because we just turned positive. right before -- >> there you go. stuart: right before jay powell started to speak the dow was down 95 points, that was the precise moment, down 95. we're up six points and beginning to climb. my colleague charles payne joins us. my interpretation at a distance what he is saying is, that he is teeing up-rate cuts in the future. going to argue with that? >> i won't argue with that. i think that is universally believed. 93% of the street felt that way coming into today at least for september. the argument how much more after that, how measured are they going to be. how reliant will they be on data. this is the greatest fear for anyone in the market, historically the fed is always behind the curve. when you hear about dissenters,

esther george we'll wait for data, sometimes data hits you like a brick wall. jay powell is saying they will act appropriately to sustain the expansion this has been underlying thing -- if there is such a thing as a powell doctrine i thought this was it. unveering commitment to never allow recession to creep into our country because he is always spoken so proudly about the role the fed played in getting yous out of the great recession. he owns that. he thinks the fed owns that. he doesn't think any president, either one, obama or trump owns that. he thinks the fed owns that. he admits they are challenged now to sustain this expansion. stuart: yes, he did say, pointed out, clearly, germany is slowing down. they have just contracted their economy, latest quarter. china clearly slowing down. brexit poses some dreadful problem for the europeans there is trouble in hong kong. those are all negatives. then he goes on to say, business and manufacturing slowing down.

all that suggests get in there and do something about rates in the future. hold on a second. ashley: i want to ask, charles, is this statement strong enough? because it seems to me look, we have inflation close to 2%, full employment, that is what the fed is supposed to do, we got your back basically what he is saying. if the trade develops in a wrong way but to me i'm not sure this is stronger statement the market, certainly the president was looking for? >> you bring up a great point because even as he mentioned those negatives that stu talked about on the scale is the u.s. consumer, job wages, spending, but this can change easily, right? this part of the u.s. part can change, not for economic reasons but psychological reasons. so the stock market in retreat changes consumer confidence. so it mitigates the impact of those higher wages and strong jobs that we have. ashley: right. >> he has got to see that. what they're saying that risk management is a part of the job. i think this is something really

compelling because he is admitting he has got to be able to mitigate risk, not react to it. this is where some of the other fed officials have muddied the waters. to be quite frank with you, mid-cycle adjustment comment muddied the wars as well. if you take into account risk management, that means being preemptive, acting to make sure worst case scenarios don't develop. stuart: teeing up-rate cuts. >> i agree. stuart: danielle dimartino, come back, i see the market as in the dow, down 20 points. we were down 95 when we started. looks like we've got almost a neutral response from the stock market to this big event. what do you say? >> you know what? i think that is exactly what jay powell wants. there were unsubstantiated, uncorroborated reports that he put a gag order out on everybody in washington, d.c., guess what, randy quarles had an appearance on tuesday night that was canceled. we haven't heard a peep out of a closest confidants on the fed.

he wanted, calculated neutral reaction to this speech but i want to go back to something that charles just said. dallas fed president robert kaplan has been on the wires. he has been the least hawkish of all fed presidents who have been interviewed, he basically said we're unemployment report a way from this great consumer narrative crumbling. and i think that is where powell's thinking is. we had a survey come out yesterday morning from market on the surface side of the economy, 80% of the economy said that employment growth slowed to a 10-year low. so charles's point if he is going to be preemptive he will have to broadcast he is standing ready to get in front of data, not behind the curve as the fed so notoriously has been in prior cycles. stuart: he did say he wants to sustain the expansion, and as charles said he does not want to be responsible and allow our economy to go into recession.

ash raised the question, was it a strong enough statement of intent down the road? since we raised those issues, now the dow industrials are down 107 points. you will expect this. you can expect a yo-yo up and down. danielle, you got to say i would expect a lot of algorithm trading. when they scan the speech, they look at key words. some words are sell, some are just buy. i think that happened, because we went from a dead flat market to minus 100 in 30 seconds. i have to believe that is algorithm trading. is it danielle? >> you bring up a funny point because the funniest tweet i've seen all morning long, somebody commented they're actually more human beings waiting for powell's speech than algorithms. that is how much focus we've had as a street on this but you're exactly right. right now the computers are

slicing, dicing, parsing every syllable of this. and again -- stuart: hold on a second, danielle, right at top of 10:00 we got numbers on new home sales. they were very bad, very negative. ashley: in july. stuart: down 12.8% month over month, okay, that is a significant drop. we are selling new homes at a rate of 635,000 per year. i would call that a negative for the housing market. charles -- ashley: average sales price was also down. stuart: average sales price down. ashley: from a year ago, 312,000. >> that's big news. stuart: you're right, danielle. that is another reason why we now have a dip for the dow industrials. am i right? >> dovetails into the deflationary argument. stuart: hold on a second, charles, finish. >> this dovetails into the deflationary argument powell was making. powell was setting up a great excuse for himself to go ahead to be more preemptive with the strong consumer by focusing on

low inflation. you know his comment this morning about low inflation, more or less part of this era, maybe makes it feel like not as much your again system we heard from home depot, lowe's, deflation in lumber prices. there is deflation in manufacturing prices. we see home prices starting to come down even last week. we saw spike in applications for new homes, one of the key elements week over week the prices dropped 5,000 bucks. stuart: i have to say the negative news on new home sales, the negative news on china trade that we, all of which we had this morning, just moments ago, all of those are reasons why jay powell appears to be teeing up-rate cuts in the future. >> that is why he should be teeing them up. maybe he didn't articulate that as much as wall street was hoping. stuart: exactly. edward lawrence, watching the speech in person, what do you have to add? >> i can tell but home sales i think that number may be skewed

a little. you have to look at perspective. a lot of buyers for new homes were looking at fomc meeting, which was july 31st, last day of july, as rate cut. people may have been waiting for rate cuts to cycle through on mortgages. you might see a stronger number this month because the fomc meeting was not at the last day of the month. you maybe put numbers in perspective. stuart: maybe algorithms responded to new home sales. ashley: probably. stuart: that is what happened. we went down 100 points. it is like a yo-yo. we're up and down. that is to be expected. >> very tight trading range. limited percentage moves. stuart: good point. it is good. we have been down 170, i think was the low, 140, 150, and we've actually been couple points positive. that is not a big trading range. >> we've been range-bound since august 5th. stuart: of course you have to digest headlines as you go you

there the day, headlines, algorithms, all rest of it. danielle, it is a narrow trading range. we're not wild swings like we're used to, what do you say? >> no. and you know, it could be that the markets are going to now be in a holding pattern. stuart: you know, problem with live television is that sometimes it goes dead. that is just what happened. danielle -- steve: time's up. stuart: satellite feed. that went down. i'm sorry she was interrupted in mid flow, that happens in television. what you have to do if you're anchoring that kind of show, you smile, no matter what. besides the market come back nicely. there you go, we're down 140. now we're down 35. what did you say, justin? ashley: not my fault. stuart: justin in my ears, not my fault. no. satellite people did this let's enjoy it. we're only down 43 points on a

day we've got negative china -- ashley: 10-year yield dropped from 1.60 to 1.59. two year at 1.57. so no inverse. stuart: no inversion. thank you very much indeed. >> glad you brought that up. news from the fed created slight inversions. fomc statement was wishy-washy admittedly after the inversion. we had more fed talk, if you will. all the members who are hawkish, one of the things really frustrated with jay powell, he is not articulating a powell doctrine well enough. he doesn't seem to be able to build consensus. i was going through last night, i didn't finish it, i got tired. i was looking at all dissents historically. stuart: you read that in bed before you go to sleep? >> it makes me sleepy. i'm trying to get a handle on the last time the members, fomc members were this defiant against the chairman. i don't have a grip on it, but it is interesting, that you had two people who want a 50 basis

point cut. two who didn't want any cuts at all. that's a wide range. i don't think people understand the gulf there. there is usually not that big of a range of thinking. almost like when the olympics skater and russian judge is off, everyone else that is 10. u.s. skater? that is a six. last time you see something like that. stuart: very good analogy. i use that. top of the show, 9:00 eastern time this morning we promised clarity. i do believe that is our job. we don't like dealing with fed speak because it's not clean cut and it is hard to know precisely what is going on. so here is our interpretation of what jay powell has said and the market reaction. i think, this is my interpretation, here is my bid for clarity, i think jay powell has teed up-rate cuts in the future. he went to great length to say there is weakness in the germany, there is weakness in china, there is weakness about brexit. there is the hong kong situation. our business life is slowing a

little here in america. manufacture something slowing a little in america. and then you've got the china trade news that came in this morning, apparently took account of that. then you had new home sales at the top of the 10:00 hour. that is another negative. you weigh it all up. here is what we're offering, clarity. i believe jay powell is teeing up-rate cuts in the future. having said that, i don't know what president trump's response will be. ashley: waiting for the tweet. stuart: waiting for the tweet. i am waiting for the tweet, mr. president. let's see if we get something. are we taking a commercial break? i'm being told to ad-lib to the break. we always do. we don't the have scripts here. you can't use a script talking about the federal reserve. you get bogged down real fast. here it is. we're down 19 points on dow industrials, very narrow trading range despite enormous news. we'll be back with more after this. ashley: nice ad-lib.

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stuart: going to deal with mildly positive news on this yield curve inversion. it is not inverted as we speak. 1.593, 10-year. 1.576, the two-year. ashley: yep. stuart: not inverted. no signal of recession at this moment but it changes fast. the dow industrials down 26. new this morning, china announcing plans to impose five to 10% tariffs on $75 billion worth of american-made products. trade advisor peter navarro, he was on with maria bartiromo on this channel this morning. that's when the news broke. listen to this. >> we know that china steals massively from us. we know they're killing americans with fentanyl. we know they manipulate their currency. so, when americans understand

that, then when china tries to bully us, that only strengthens our resolve but in terms of macro impacts, in terms of pure macro impacts it is not large. stuart: former governor of arkansas mike huckabee with us now. governor, this is a late development. it seems like it is escalation of the trade war. seems to be saying we'll not get a quick next here. in fact it will drag on for longer. what's your reading on this? >> well i think china is testing the will of president trump and the american people. why not? they have got nothing to lose by pushing back. they have got everything to lose if they just surrender quickly. but the u.s. position is a simple one. we either fight or surrender to the chinese, let them continue to bully us. let them continue to cheat on us. let them to continue to destroy manufacturing in this country. those are the options. those aren't good options. most people who look at this from a big picture, long term realize what the president is doing is the right thing.

paneful for a while, not unlike going to the doctor. he says this medicine it doesn't taste food. it will not be pleasant but you it may save your life. stuart: can holed the bipartisan support he has now if the president continues the hard-line? >> let's hope so. we have very weak knead republicans some of whom are globalists. some of whom are interested in making sure their pals make money in the globalist mentality, instead of protecting american jobs, american workers, the american economy but interestingly there are some democrats who side with the president on this like chuck schumer, who recognizes you can't let china keep rolling over us. yes it is not going to be easy but this is no time as margaret thatcher famously said to president george w. bush, h.w. bush, 41, don't go wobbly. i think that is what we need to say to the republicans in congress. don't go wobbly.

stand with this president. he is standing for this country and its workers. stuart: another one for you, governor, we seem to be getting confused about cutting taxes. one day the president says cut them. the next day he reverses says, no, we're not going to do that. the next day larry kudlow comes on our air, says we're thinking about cutting taxes. talking about cutting taxes in 2020 campaign. why do we need tax cut if the economy is doing so well, governor? >> well i think tax cuts are a good economic policy whether the economy is doing great or not. it is ultimately recognition that the money in a tax cut returning it to people who earned it in the first place. people talking about tax cut, they act where the government is giving away the government's money. where did they get the money? they got it from people who earned it. they took it from them voluntarily. if there is opportunity to give it to the people that went out

to work for it, that is the answer. stuart: with all the news, we appreciate you being with us. by the way there is not that much movement on the stock market despite all this news. the dow industrials down 44 points. that is virtually nothing on a 26,200 index. next one, when president trump suggested buying greenland a lot of people laughed. maybe there was something there. greenland has strategic importance. it is not just a chunk of ice. no it's not. we got the story. gun traffickers now using snapchat to sell illegal weapons. details on that one as well. dow industrials down 40. we'll be back. ♪ (indistinguishable muttering)

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♪ ♪ i am the egg man stuart: lauren simonetti sitting next to me. you never heard this. >> no, i'm sorry. stuart: you never heard the walrus? "i am the walrus"? >> indeed i do. stuart: i would love this. 50 years ago, still revolutionary. >> i will have a beatles party over the weekend. stuart: i'm coming. watch out. let's get serious, dow industrial in very narrow traying range. all kinds of news from the fed chairman. we have china trade news. we have very weak new home sales figures. all the way down 40 points. that is virtually, very narrow trading range as we speak. so let's digress, shall we? we'll bring in something really interesting. greenland, when we heard the president was interested in buying it, we thought it was a

joke. the mainstream media mocked him. turns out it wasn't as crazy an idea as people thought. tammy bruce will tell us why it is not a crazy idea. go. >> president is always underestimated but there is method what some may say is madness. this goes back several years. in january of last year china was visited by greenlandic leadership. they wanted more infrastructure spending. they went to the kingdom of denmark, denmark said, we don't have the money. then they went to beijing. when you don't do that unless denmark is okay with it. effectively they're self-governing, they're like a colony of denmark. so they go to beijing, says, yes, if we can control everything. it is our construction people, we manage it. it would be like a loan. now neither greenland relies on denmark for money. they would default on that loan. china would effectively own

greenland. this goes on several months. we find out about it, we go to denmark, wait, this is unacceptable this is a north american island with incredible resources, including rare earth minerals, things we need we rely on china for. in addition to uranium, gold, a whole host of other things. we go to denmark, we say that is unacceptable. through the negotiations of of course the trump's "art of the deal," denmark finally says okay. so we eliminate that threat but only until last june did china finally say, all right, we're going to back off. so the timing of the president saying, gee, look likes maybe greenland needs to be bought. there is a reason for this, just a few months after china officially retreated from their effort to do the airport. they have been looking trying to move into greenland for years prior to this. obviously, even the foreign ministry describes it as a weak,

effectively vulnerable country. you know, there was, belt and road system. and look, if we don't do it, denmark, doesn't have the money for it. the peel of greenland by the way are suffering. high unemployment. high suicide rate. high alcoholism, because greenland doesn't allow really much industry at all because do their, we're environmental warrior stuff. look how beautiful greenland is, meanwhile people's lives are being destroyed. stuart: denmark spends 540 million euros on greenland every year. ashley: yeah. stuart: there is only 56,000 people. ashley: 700 million u.s. dollars. stuart: every year. they don't know what to do with it. >> those lives are fenn, there is nothing to do. there is canadian company that does some gold mining there. but they really keep any industry out because they want to show it off as some wonderful

environmental colony but the royal family made some interesting comments, that they thought that maybe the people of greenland should vote on this. that this is, would be up to them. they love greenland but look, it really is a drain. the president knows what he is doing. there is both a national security interest and, look, somebody needs to make greenland great again. if anybody can do it would be donald trump. and frankly it would take a major load off of the kingdom of denmark as well. stuart: bring back the vikings, buy them. why not? tammy, thank you. >> there is always diversion. stuart: diversion from jay powell. >> china is looking around. we're taking care of business. stuart: make greenland great again. >> mgga. stuart: trying to work that out. do we need a green hat. >> great idea. stuart: where do you get this stuff from? >> happy friday. stuart: thanks for bailing me out. >> my pleasure.

stuart: big news of the day of course fed chair powell and interest rates. of course it is latest on china trade. yes, those miserable new home sales figures. the dow industrials are only down five points. very narrow range. so we need to take a break from this intense fed stuff, financial stuff and i have a perfect story for you. uc berkeley. ashley: where else? stuart: offering a new class on how to be an adult. lauren simonetti has the story. what do you learn in this class? >> we need to make college great again. you learn how to be an adult. it is called adulting. it's a thing these days. you get credit, write reflection paper how to be an adult. what do you learn? the well, serious stuff in my opinion. you learn how to budget your money. you learn how to file your taxes. do the laundry, change a tire. stuart: berkeley going to change you that. >> isn't your parents job to teach you that?

it is partly student-run, but you get credit. stuart: how to do the laundry? >> how do be an adult. things required, tasks required to be an adult. stuart: got to be joking. >> totally serious. through the decal program. it is pass-fail game. you have a mid semester paper how to achieve a goal. they have a psych expert or how -- stuart: spare me, a psych professor from berkeley telling me how to be an adult. spare me please. >> i agree 100% with you. i talked to charles payne in the hallway. he thought it was good idea. i talked to some of the people on your show about this. they think it's a great idea. stuart: fire them all. >> i'm with you on this. have to learn how to be an adult. i want my money back. stuart: i have a bunch of producers in my ear shouting loudly, don't make me deaf. the market turned around. we were down a few points.

now we're up seven points. extremely narrow trading range. you see what greenland and u.s. berkeley -- >> lightened it up. stuart: producer, where are we going now? will i tease this? oh, the snapchats. here we go. new investigations in california show gun traffickers are using snapchat to sell weapons. ashley. ashley: not a big surprise. they have been doing this quite a long time, using facebook, twitter instagram. unfortunately for california they have strict gun laws. nevada next door doesn't. you can buy guns you're not allowed to look at in california. nevada don't require background check or even record-keeping for private party sales. what do people do. go to nevada. they load up on guns. illegally transport them into california. start advertising sale on snapchat, whatever social media platform. it's a huge problem. a lot of guns end up in hands of

convicted felons who shouldn't be allowed to have a gun. used in murders, robberies, god knows what else. often the weapons are not ever found again. it's a very difficult problem. they have done undercover operations to bust some gun rings. bottom line, when you have states right next door, it is pretty hard to stop inflow of illegal weapons. stuart: see what you did? dow industrials are now up 34 points. ashley: you're welcome, america. what i'm here for. stuart: what a guy. now we're up 29 points. story really is, it's a very narrow trading range, despite the very important news that we're being carrying for you all day long. look at this. i have a robocall. ashley: answer it on air. stuart: on second of the show, three hour show. unbelievable. no, never answer it. >> no. stuart: serious stuff. iran has a unveiled a new long-range missile system. should we be worry worried about this? we'll ask a national security

expert on show. president trump has close relationship with apple's chief tim cook, seems to work in apple's favor. should other tech ceos dot seam? we'll ask that question. back in a moment. ♪ this is the couple who wanted to get away

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usaa took care of her car rental, and getting her car towed. all i had to take care of was making sure that my daughter was ok. if i met another veteran, and they were with another insurance company, i would tell them, you need to join usaa because they have better rates, and better service. we're the gomez family... we're the rivera family... we're the kirby family, and we are usaa members for life. get your auto insurance quote today. stuart: got a little bit more on china trade news for you. china says they will impose tariffs. they will impose tariffs on american cars being exported to china and car parts. i don't think that is a very big deal because we don't export many cars over there. general motors makes them over there. but we don't export them to there. i, the significance of that is not too extreme. meanwhile the dow industrials are up 50 points. this is fed day and we're up just 50 points, very narrow

trading day. we'll bring you president trump's tweet on what, the fed in just a moment when we got it ready for you, but suffice it to say the market is up 40 points. that is what we've got. here we go, this is what the president has just said via tweet, here we go, as usual the fed did nothing. it is incredible that they can speak without knowing or asking what i am doing which will be announced shortly. we have a very strong dollar and a very weak fed. i will work, quote, unquote, brilliantly with both and the u.s. will do great. my only question is, who is our bigger enemy, jay powell or chairman xi? that will be the leader of china. that is pretty strong stuff, i got to say. ashley: very strong. stuart: no impact on the market. the tweet just went out. we're just digesting it, the dow is up 50, to up 34. i'm simply not going to say that is any kind of significant

movement bearing in mind, that was a very -- ashley: calling xi an enemy. stuart: yes. ashley: in that statement. stuart: who is the greater enemy, chairman powell or xi xinping? strong stuff. you expect it from the president. he came out with it right there. no impact on the market. got that. i want to get back real fast, do it quickly, to the iranians, showing off this new long-range missile. they say it can detect a target 190 miles away. guy snodgrass is back with us, former speechwriter for defense secretary mathis. guy, we also have news, a report i should say, that north korea is militarizing nuclear bombs. they often work with iranians. the iranians have a long-range missile. i think we should be worried what do you say? >> i talked about last time i was on your program about the increasing instability around

the world, getting back to what you started with, iran's new missile system. they claim it can go it 190 miles, it can possibly intercept, possibly destroy a aircraft 125 miles away from the system. is that impressive increase on capabilities what they already have? it is. is it a game-changer for iran in the gulf? it's not. stuart: it's not. what you're saying rests upon their claims. they are claiming 190-mile distance. we don't know that for a fact? >> we don't know that for a fact. we'll see what we can determine about that system. reason why i say it is not a game-changer for iran in the region, in 2003, 2004, i was combat pilot over iraq, we were flying missions from the gulf. we new iran already had missile systems can reach out and touch us at those ranges. this is not true game-changer. this is increase of capabilities. something we should keep account

of. stuart: what do you think of the g7 summit? president trump will fly over there tonight. europeans won't spend money to defend themself. it will be a tense weaken in france? >> i agree with you. i know you're right. i was there with with nato, president trump consistently, throughout the administration asked for nato allies, allies, partners, europe, asia specific to increase defense spending n this case what president trump is referring to is a 2014 agreement, called the wales pledge. where all nato nations pledged to increase their spending for defense up to a minimum threshold of 2% of gdp. so for a lot of nations they need to raise that up as you referenced. stuart: why don't they do it? why don't they do this? why don't they defend themselves? >> i think they do defend themselves. there is argument to be made certainly over the last two or even three decades as the united

states has exerted primacy around the world it is the easy button. you can rely on the united states military to be there when you need them. that allows them to potentially use funding or monies to use for defense put them on domestic programs. stuart: look, guy, people over here are getting a little annoyed about this. we spent heaven knows how much defending them, they hate us. they hate our president. they don't like america, american culture. they won't defend themselves, they won't ante up the money they agreed to pay four or five years ago. you can understand president trump laying down the law to tease people, can't you? >> on the delegations where i would be in brussels, be in talking to our allies and partners i would not say they hate us. this longstanding alliance, partnerships with the united states forged after world war ii has served our country very well. it is our in our best interest to have strong allies and partners. as you talked about the program today, china, iran, north korea, there is a whole multitude of

nations causing instability out there. you want those allies, you want those partners working closely with us, and us with them. stuart: we certainly do. guy snodgrass. thanks for joining us, we'll see you real soon. >> thanks, stuart. stuart: we have a guest coming up who says joe biden's views on china are stuck in the '90s. what does he mean by that? we're getting him to make his case and that will be next. plus amazon rainforest, burning for days. big parts of it at least. the smoke is so thick it can be seen from space. nasa released pictures of it. what is brazil's government going to do about that? we're on it. ♪ seminole. ♪

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stuart: one surprise of the morning, this very narrow range of dow industrials. expecting a movement up and down, as market digested comment from jay powell. it digested comments. we're up 30 points. that is where we are now. that is where we've been for some time. look at the gap, plies.

sales fell way down, off 2% from last year. the stock is virtually unchanged, up 6 cents. now this, our next guest has studied former vice president's joe biden's history with china. he is a writing fellow at uc berkeley, and he joins us now. zed, you studied this. your conclusion please? >> the reality joe biden argued for decades that a rising china would be positive for the united states, positive for the rest of the world. he consistently downplayed the economic rivalry that china would have with the united states. when they had the big trade vote at the turn of the century, joe biden said he didn't expect a collapse in the manufacturing sector of the united states. he didn't expect china, which he said had an economy the size of the netherlands ever being a major economic rival of the united states. we looking back can say all that was wrong. stuart: he got it wrong. was this consistent all across the board, whenever he spoke

about china he got it wrong? >> at certain points in the 1990s he raised human righting issues. he was on the senate foreign relations committee. he was critical after tianamen square. he argued consist 10ly more trade with china would create more social and political freedom in the country. china is shuffling off people to concentration camp if they happen to be muslim. they have most sophisticated surveillance technology in the world. basically every measure joe biden has gotten the story wrong on china. stuart: i don't mean to be facetious, i'm surprised someone uc berkeley is critical of a democrat, any democrat. don't get me wrong here, i'm not being nasty. i'm surprised you're coming out so strongly against joe biden and his history of policy in china bearing this mind where you're from. you want to make comment on that? >> personally i'm politically independent. the center i work for is

non-partisan. i should emphasize that. this is the issue. i think china is coming under fire from both sides now. i think folks on the right like josh hawley, missouri republican, folks on the left, tammy baldwin, bernie sanders, elizabeth warren saying we had 20, 25 years of bipartisan failure on the issue and joe biden is no exception. stuart: are we near to a cold war situation, america and china? >> well i hope we wouldn't have the sort of nuclear arms race we had, sort of cold war, sort of proxy conflict of vietnam or latin america. we have a economic rivalry with the country. we should look at ways to weaken the government that really right now is the world's most powerful totalitarian state. stuart: that is fascinating. zed, thank you very much for sharing your research with us. it is appreciated. thank you, sir. good stuff. >> thank you. stuart: bernie sanders, well he unveiled his latest climate plan. it comes with 16 trillion-dollar

price tag. sanders says it is expensive. the cost of doing nothing will be far more. does he have a point? we asked a man who is considered a reasonable environmentalist. we'll ask him the questions. thousand of protesters in hong kong laid hands to create a human chain across the entire city. it was largely peaceful as a protest. any developments there in hong kong, we'll bring them to you real fast. ed rensi, the former mcdonald's chief, he says capitalism as we know it is at risk. that is strong stuff what's that all about? he will make his case next hour. ♪

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stuart: it is almost 11:00 here on the east coast and we're

going to reset all that's been going on for you today. first of all, the federal reserve. jay powell says, he's the chair, he says the fed will act appropriately to sustain the economy. he did warn about global growth concerns and trade uncertainty. in my opinion, he seemed to tee up rate cuts in the future. president trump is not happy. here's the tweet. as usual, the fed did nothing. it is incredible that they can speak without knowing or asking what i am doing which will be announced shortly. we have a very strong dollar and a very weak fed. i will work brilliantly with both and the u.s. will do great. my only question is, who is our bigger enemy, jay powell or chairman xi? strong stuff indeed. more on that in a moment. speaking of china, they say, the chinese say they will slap 5% to 10% tariffs on around $75 billion worth of american goods

starting september 1st. that's the latest development in the ongoing trade dispute with china. now, peter navarro was on fox business this morning as that news broke, and here's what he said. roll it. >> we know that china steals massively from us. we know they're killing americans with fentanyl. we know they manipulate their currency so when americans understand that and then when china tries to bully us, that only strengthens our resolve but in terms of macro impacts, in terms of pure macro impact, it's not large. stuart: okay. i want to break off from that because we've got a trump tweet and it is really hurt the market. here it is. the latest, i'm reading this right now. our country has lost stupidly trillions of dollars with china over many years. they have stolen our intellectual property at a rate of hundreds of billions of dollars a year and they want to continue. i won't let that happen. we don't need china and frankly,

would be far better off without them. the vast amounts of money made and stolen by china from the united states year after year for decades will and must stop. our great american companies are hereby ordered to immediately start looking for an alternative to china, including bringing your companies home and making your products in the usa. i will be responding to china's tariffs this afternoon. this is a great opportunity for the united states. also, i am ordering all carriers including fed ex, amazon, ups, the post office, to search for and refuse all deliveries of fentanyl from china or anywhere else. fentanyl kills 100,000 americans a year. president xi said this would stop, it didn't. our economy because of our gains in the last two and a half years is much larger than that of china. we will keep it that way.

my goodness me. the immediate impact, i know you're reading it on the screens, the immediate impact is a sell-off on wall street. look at this. we are down 207 points. we are down 185 points. this drop, this 200 point drop occurred immediately as the trump tweet came out. there you have it. look at the nasdaq, down almost 1%. the s&p down almost 1%. the dow off about 200 points. sven hendrix joins us, north man trader and founder. i know you just saw this from the president. i read this as negative news on china trade. i read this as an escalation in the trade dispute. how do you see it? >> the trade war just got real, right? there's slow piece of escalation here where you don't know where it's going to end up. obviously markets have been pricing in part of the trade wars but have also been ignoring

them throughout the year because we always had the fed put and the markets so far this year have been running on multiple expansion and based on expected rate cuts and more liquidity from central banks. but as we found out in july and august, this trade war is racheting up and it's very difficult to price in for the fed as well in terms of their risk assessment. stuart: hold on a second. for our viewers, we are putting this trump tweet up on our screens again so we can get a good look at it. it is long and it is intense. i'm reading just part of it right now. your company, i'm ordering, basically he's ordering our companies home and making your products in the usa. he's telling american companies you come back home, you bring your product, you make them here. i will be responding to china's tariffs this afternoon. so he's suggesting there's more action to come. he says all deliveries of fentanyl from china or anywhere else must stop.

fentanyl kills 100,000 americans a year. president xi said this would stop, it didn't. our economy, much of our gains of the last two and a half years, much larger than that of china. we will keep it that way. so you know, i keep going back to it because it is so strong. this is a line in the sand right there. there is no retreat whatsoever and it comes after china said that they would impose tariffs on our stuff a couple of hours ago. this is real escalation, right? >> oh, absolutely. that's why markets are reacting and it's adding to the uncertainty, right. the global slowdown in growth is at least partially driven by the fact that there's a lot of planning uncertainty on the side of companies, so they are holding back on capx investment, business investment and so forth, and you have to be concerned in general, when you have eight, nine major global economies either in recession or at the verge of recession, when you get news like this, whether

this is going to accelerate the downward momentum on the global growth curve. stuart: thank you very much for instant analysis. sorry i just chucked that right at you. nobody was expecting this and you handled it very well. sven, thanks for joining us. i want to move on to apple. the president in that tweet says hey, you people who are producing product, you are hereby ordered to bring it back and make stuff in america. now, look at apple. apple's stock is down four bucks on that tweet. gene munster, luke ventures guy, joins us now. your reaction to the trump tweet which i'm sure you just heard moments ago. >> stuart, it's strong language, clearly, and my reaction is similar to your reaction. this is a step up in this dispute, this war, if you will. as far as what it means is it's going to stoke what i would consider idle speculation over the months to come.

i think that it's important in these times to take a step back and have clear-headed thinking, that these disputes are going to take a long time to sort out. let's call it a year or two years, potentially. at the end of the day, i think there are going to be two central take-aways. like it or not, the u.s. will remain the world's strongest economy and separately, china is also going to be a formidable economy, second largest in the world, slightly behind where the u.s. is at. i think what is most important is to try to fast-forward a couple years from now and start to think about how we can get some resolution to this and which companies will benefit the most. stuart: that's a long time in the future. i have to make this observation. one week ago, last friday night, president trump had dinner with tim cook and they seemed to emerge from that dinner with a decent relationship. in fact, the president said he can understand that apple is facing intense competition from

samsung. they don't pay tariffs. apple products do. so whatever happened to that working relationship? it looks like the president's just overrode it completely. >> i see it a little bit different. i think that overall it was a fruitful interaction for apple. i think tim cook's done a great job of kind of staying in generally the good graces with the administration and keep in mind that apple is in my opinion the world's greatest company. i think that this is a symbol of american business strength and i think trump realizes that. and i do believe that the probability that apple actually does get tariffed, there is disputes around what the chances are. i think it actually is very low that the u.s. would tariff an apple product coming in. as i'm thinking about this recent tweet that came out a few minutes ago, i don't think it changes any of that probability. there is a call for more manufacturing which we can talk about in the u.s. -- stuart: he's demanding, the

president is demanding that. the president is flat out demanding you start producing here. now, what's apple's position on that? >> yeah. so maybe just quickly talking about apple specifically, apple manufactures, assembles the vast majority, 95% of their products, in china. there is a large infrastructure, over a million people buildout. it's unrealistic to think apple can call this manufacturing back home. if they were going to go to different markets or bring it back to the u.s., something like that would probably take in the order of five to ten years to do. this is a huge undertaking. so ultimately that's one thing to consider. something else to consider is that there are economies of scale in manufacturing outside of the u.s. so the u.s. consumer needs to get more comfortable if you do want to keep buying these u.s. products, whether it's apple or a maytag washing machine if they are manufactured in the u.s., likely the cost of those will go up. stuart: gene, thanks very much for joining us. >> thank you. stuart: i hate to throw that

right at you because it happened the moment you appeared on camera. we appreciate it. thank you very much indeed. >> thank you, stuart. stuart: before we go to our next guest, look at the market. straight down. we are off at the moment 370 points for the dow jones industrial average, down 44 -- ashley: big question there, can a president order what private companies should be doing? probably not. stuart: he can't. but he can really put heavy duty pressure on. deirdre: the burden for these companies, i just was thinking of fed ex, they don't -- how are they going to screen which packages -- stuart: maybe they have to. wait a second. we just asked the question, can the president order that american companies produce in america. can he order that and make it stick. you are shaking your head. christian whiton is with us, former u.s. state department guy. christian, can the president order american companies to produce in america and not china? >> in a way, yes. he can order them to not produce

in china under the provisions of the amendment to the trading with the enemies act, in a time of national crisis the president can regulate essentially all international trade between that adversary and the united states. so perhaps you couldn't say you need to move your plant from shenzhen to oshkosh, wisconsin, but he can say you cannot import goods from china, if he really wants to go the full length. now, i suspect that this is probably at least a first attempt at using the power of the oval office in a way that perhaps president roosevelt or president kennedy did to try and convince business to do what he thinks is the right thing but if necessary, he actually can, without any additional legislation from congress, use very considerable powers. it's unclear if he's going to do that, though. stuart: are you surprised at the i would call it harsh language, i would call it direct, forthright, straight at china? you surprised at that in this

stage in whatever negotiations are going on? >> you know, i thought something like this might be coming. we have tariffs on the second half of chinese imports coming, a portion of those, on september 1st, a portion of those delayed but certainly now going on december 15th. i think what this may be is a reaction, you know, the chinese think they can wait out donald trump. they think they are going to get a better deal if trump is defeated in next year's election. we can debate whether or not the president is likely to get re-elected. i think he is. but there's been a sea change in washington. i don't think china's going to get what it wants from a different political outcome. but the fact is i think the president realizes they are trying to slow-walk this. they are not negotiating candidly. there have been conference calls going on, there will be meetings, supposedly, they may cancel that after today, taking place between the u.s. and china, the next round of formal negotiations on trade, next month. i think he thinks the chinese are doing what they often do, slow-walking and proceeding

without candor in those negotiations and we have this lingering problem that's been made clear by hong kong. a reminder that china breaks almost everything it signs its name to. at least this government does. all the international agreements, the ones it got into the wto by making, the ones that made hong kong in terms of the handover, the ones that made the president obama on cyberattacks and on militarizing the south china sea, china has broken all of those. i think this might be a manifestation, a sort of final product of frustration. stuart: christian whiton, thank you for joining us on short notice. always appreciate it. i have to tell you, tell our viewers, this china trade tweet, i think there were three of them, long tweets from the president, has completely upstaged jay powell and the federal reserve and what he's going to do with interest rates. ashley: there's more to come. don't forget, he said you'll find out later this afternoon my response to the latest response from china and their added tariffs. there's more to come.

stuart: teeing up more to come. the market, the dow down 339 points as we speak. that's about 1.25%. similar or bigger losses on the s&p and nasdaq composite. keith fitz joins us on the phone right now. keith, i've got to say i was a little surprised the harshness of the language the president used but clearly, he's staking out a very hard line, taking it right up to the brink here, no backing off whatever. >> he is, stuart. i've got to tell you, i'm quite surprised. i'm not entirely caught unawares, however, because the chinese are pursuing classic chinese negotiating tactics and i think the president is responding accordingly. whether or not the united states markets can withstand that or are prepared to deal with the fact he's taking this action is a different question. stuart: it was an immediate response. at 6:00 eastern time this morning, the chinese foreign ministry issued that statement saying that the u.s. will feel pain because they are going to

retaliate. shortly after that, we got news that they would impose these 5% to 10% tariffs on just $75 billion worth of our products. then couple of hours later, the president comes out with a very strongly worded tweet saying hey, you're not going to get away with this, we're going to pull back production out of china, bring it back here and by the way, you fed ex, ups, post office, you don't let any fentanyl into this country from china or anyplace else. it's a progressive movement of move, countermove and escalation. why is it so bad for the market, keith? >> well, the markets are based on future profit potential and what traders are reacting to so correctly and so viscerally is the fact that they cannot see their way out of this. that's where the markets come down. the president clearly thinks he sees an exit. china clearly thinks they see an exit but traders who are caught in the middle of this have to place bets with trillions of

dollars of real money right now and right now what they're doing is taking it off the table because they don't like what they see. stuart: let me turn this around and link jay powell to china trade. in his speech this morning, jay powell went out of his way to point out that the china trade situation was, i don't know how to say this but slowing us down, affecting us. it's a head wind, as he put it. then right after he speaks, we get this escalation. so there is a tie-in between what jay powell said, i think he was teeing up future rate cuts, and the china trade tweets. keith, i have to say, doesn't this make rate cuts from the fed more likely? >> i believe that it does. now, you know, as much, as harsh as i am on the fed, i think that he was appropriately teeing that up. but also, i think, it was a remark designed to make him appear relevant. i think the fed is clearly caught in the middle. they are out to lunch right now

and the battle is clearly between president xi and president trump. stuart: are you buying anything right now? >> no, stuart. i'm hanging back. this is one of those days where i don't like what i see. sentiment is running against the market so no matter how much i feel that many of these companies are going to be good buys, i don't think today is the day to do it. stuart: thank you for joining us on short notice. we appreciate your input indeed. i will bring you up to speed. you can see it on the left-hand side of the screen. most stocks are down. the dow industrials are down 300 points. s&p and nasdaq, down about 1.25%. ashley: the u.s. dollar hit a two-week high now against the chinese yuan. stuart: i do believe this pushes jay powell more and more towards rate cuts. ashley: yes. stuart: you see the dollar going up, china trade escalating badly, he's promised to take care of this. surely that means rate cuts are coming. deirdre: i think you're right. the president is pushing, right,

pushing this right exactly to the edge. but i also can see our guests' point of view, this would be a huge burden to change your entire manufacturing chain? that is a 12 to 18-month process at best. this puts an enormous burden on u.s. corporations which is why we are seeing the market selloff. stuart: good one, deirdre. christian whiton is still with us. i have brian wesbury lined up. let me bring back christian, because i raise this issue. the president leaves for the g7 meeting tonight. before he left, he's got these very harsh tweets about the fed and even harsher about china trade. this is going to be an extremely contentious g7 meeting, isn't it? >> i think it will. this is a power play the president is doing with the fed chairman. personally, i and others like me who believe in a strong executive and that the constitution means what it says, i think the president can actually fire the fed chairman. the constitution is very explicit that the president of

the united states can supervise the executive branch and you can't possibly do that without the ability to dismiss people who don't perform. i think that might be coming. we don't know. maybe he won't be chairman. it's unclear. but going into the g7, you know, it's funny if you look at what the bureaucrats are saying, they don't want trump to blow up the g7. it's sort of odd to want to have a summit but have it not be relevant. i think it's important that trump actually goes and raises these issues. what is europe doing to help the free world in its struggle with china. that's a big deal. what's it doing to help with iran. the brits are helping. some of our gulf allies are helping. japan is helping. so yes, it will be contentious but my view is that a contentious summit is better than one where you just have a bunch of bland talks about climate change and sustainability, put out a joint statement no one will ever read, then it's over. this is a chance for the g7 to do what it was meant to do, governments that can actually accomplish things because of their resources coming together. stuart: dream on, christian whiton.

that's just my personal opinion. i'm sorry. it's a talkfest. that's all it will ever be. thank you very much. appreciate it. ashley: gold up $26. there's a big jump into gold. fear factor. oil has now dropped to $53.84 a barrel. stuart: $53.84. ashley: down 2.66%. stuart: tell me the ten-year. what about the yield curve inversion? ashley: ten-year, 1.57%. two-year, 1.55%. no inversion. stuart: that's interesting. at 1.57%, that means money has poured into america in the last hour or two because we were at 1.60. now we're at 1.57. that means people are buying treasuries, rush to safety. price up, yield down. no inversion, however. ashley: no. stuart: fascinating. brian wes billibury on the phon us now. brian, you are an economist.

real fast, get straight at it, if you will, what are the economic consequences of china imposing these tariffs and us getting real strong on bring your production back home? >> yeah. i personally truly believe this, that within a year or two, we could remove ourselves from trade with china. it would hurt china way more than the united states. stuart: whoa, whoa. that is dramatic stuff. we are the world's two largest traders together. more trade between the two of us than almost anyplace else. >> we actually trade more with mexico and canada than we do with china. the united states is the world's largest trader. we actually trade more in total, imports plus exports, than china does. stuart: are you returning to the argument that they need us more

than we need them? >> absolutely. the reason, if you think about it, in 1980, this goes back 39 years now, china was a nation of one billion impoverished people. what they did, they were using oxen to plow their fields. now they're using john deere tractors with air conditioning and gps satellite service. and they have a cell phone system. they never had a copper phone system. they have grown in wealth because they imported technology from the west. they learned that this allowed them to grow. they freed up their economy a little bit and they imported this technology. now they are stealing it because they got addicted to technology. but it doesn't work when you're

stealing, when you are a communist country, you can't grow at 10% rates forever. and they're running out of juice. stuart: hold on. >> and president trump is putting pressure on them at the right time. stuart: hold on for one second, please. we have viewers who may be joining us fresh off the bat who don't know what's going on. they want to talk about or they are thinking we are going to be talking about jay powell and the federal reserve. well, that news story has been upstaged by some tweets from president trump on china trade that came across the transom i'm guessing 20 minutes ago. can we get them on the screen? i think this is worth reading again. the language is so strong. i want to read those tweets so that all of our viewers can know exactly what we are talking about here. it's quite extraordinary stuff. hold on. i will tell you it's harsh. ashley: i'm just saying the crux of this is the president said before we get this tweet up, u.s. companies are hereby ordered immediately to start

looking for an alternative to china. stuart: leave china. go some place else. ashley: including bringing your companies back home to the u.s. stuart: have we got the tweets? okay, good. our country has lost stupidly trillions of dollars with china over many years. they have stolen our intellectual property at a rate of hundreds of billions of dollars a year and they want to continue. i won't let that happen. we don't need china and frankly, would be far better off without them. the vast amounts of money made and stolen by china from the united states year after year for decades will and must stop. our great american companies are hereby ordered to immediately start looking for an alternative to china, including bringing your companies home and making your products in the usa. i will be responding to china's tariffs this afternoon. this is a great opportunity for the united states, also i am

ordering all carriers including fed ex, amazon, ups and the post office, to search for and refuse all deliveries of fentanyl from china or anywhere else. fentanyl kills 100,000 americans a year. president xi said it would stop. it didn't. our economy, because of our gains in the last two and a half years, is much larger than that of china. we will keep it that way. as the president said, there's more to come on china trade this afternoon. that has pushed the market way down. we are off 350 points. at one stage we were down 400. now we are down 350. that's 1.33%. a bigger loss for the s&p, 1.5%. big loss on the nasdaq, 1.6%. ashley: amazing. gold now up $27. stuart: oil all the way down to $53, is it? ashley: yes. $53.84. apple is off $6. 3% down now. stuart: yeah.

when you order companies to get out of china, stop producing there, that's directly aimed at china to hurt them. let's see how that works out. ed renzi is with us, the former mcdonald's ceo. ed, welcome back to the show. i really want to talk to you about this china trade and what we have been hearing here. were you expecting language like that from our president? because it's kind of harsh, very combative, isn't it? >> well, it is. but let's be realistic. the rest of the world, the g7 is playing checkers and he's playing chess. he made a bold statement because he's serious about this and he wants the g7 to wake up to the fact they better join him. let's make no mistake about this. china is a communist country. you see what they're doing in hong kong. they are unrelenting. their work conditions in places that are not american-supervised are horrible. i think trump's doing exactly

the right thing in exactly the right way. is it going to cause us pain? you bet. apple's got a problem they are going to have to get solved because they are making those apple phones over there. they need to find another place to start making those phones and create competition. i think trump did exactly the right thing. stuart: do you think mcdonald's will have a problem in china? after all, it's quite possible there will be a nationalist backlash in china against american products and companies. >> very well could be except that all the restaurants in china are owned by the chinese. the suppliers are chinese companies. mcdonald's franchises our organization, they set up local supply chains. i think if there's -- they are going to hurt themselves. i think mcdonald's will be just fine. stuart: big picture here, are we winning this? if this is a flat out economic fight, are we winning it in the sense we are doing better than

china? >> well, the reality of it is there's a difference between strategy and tactics. this is a very strategic move on trump's part. in the short term, it's going to cause us pain. tactically i think it's brilliant. we have got to make these folks understand we are serious about this. the theft of our intellectual property has been going on since i visited the research triangle in north carolina in the early '80s. there's nothing new about this. trump has been the first president to stand up and say enough is enough. do it yourself from here on in. i think it's bold, i think it's going to be difficult in the short term but they need us a hell of a lot more than we need them. stuart: does he carry the country? does he keep a bipartisan agreement in the united states that china must be confronted in this fashion? >> it's really kind of interesting. trump's not the typical kind of politician president. he's a deal maker. his mind is a constant stream of

consciousness through twitter. you get an indication of where he's going, what he's thinking, all the time. i think at the end of the day, he really truly wants to make america great again and i don't think at the end of the day that he really cares so much about the electorate as he cares about the country and its long-term strategic future. stuart: ed rensi, thanks very much indeed. i want to thank all of our guests for stepping into the breach, so to speak, offering instant analysis on a major news development. good stuff. thank you very much indeed. gordon chang on the phone. another china expert who knows what he's talking about. gordon, your take, please, on the long trump tweet about china. go. >> i think it's a very good thing, stuart. because people have got to recognize that china's been stealing u.s. intellectual property and this is a grievous move. we americans of course focus on the problems that the tariffs cause for american consumers and

big box retailers, but that's really nothing in comparison to what the chinese are doing to the long term health of the u.s. economy. stuart: as i look at the situation as it stands now, after these tweets, it sure doesn't look like any kind of short-term modest agreement is possible in the near term and it really looks like this is a trade fight that will drag on for a very long time and may become increasingly bitter. is that the way you see it? >> of course, stuart. i don't see a comprehensive agreement with china largely because the chinese political system now i think is frozen for various reasons. xi jinping, the chinese ruler, doesn't want an agreement because if he were to make any sort of compromise, it would jeopardize his political position. as the president says, we don't need china nearly as much as they need us. so this is a trade fight that we can win as long as we have the political will. i do believe there will be a consensus that we see today will

actually -- china is the malign actor and going forward, the people are going to realize what's at stake here and will get behind our president. stuart: just a few moments ago, economist brian wesbury suggested that we could freeze out china from our trading relationships. in other words, we can do without them entirely. what do you say to that? >> i think that except in certain sectors, that's probably true. i'm concerned about our dependence on pharmaceuticals from china and there are a few other areas where we will be dependent for quite some time. it will take, for instance, apple at least two or three years to shift its supply chain to india and perhaps to mexico, maybe even bring back some of it into the u.s. but clearly manufacturing is leaving china and we are going to see disengagement. i don't think it will be 100% but it's going to be such that china will not be an important factor in american trade.

stuart: it is a confrontation and a half. it blew up about an hour ago. gordon, hold on a second. i might have more for you in just a second. i want to go through what's been happening here. deirdre: i was going to say, looking at the nasdaq, i want to make this point of tech before the g20. keep in mind the europeans are buying gear from china. they are willing to be spied on in exchange for cheap gear from huawei and zte, even though some of the competitors, the infrastructure tech competitors like nokia are based in europe. i just think this ups the ante for the g7 conversation as well. because basically, the uk and germany have said you know what, we know that china is spying on us. we don't care. we are monitoring it. we know what they are taking. we have already factored that in. whereas president trump as we know has taken a much harder line on these tech infrastructure equipment makers saying we don't want it here. this just changes the conversation this weekend as well in france. stuart: sure does. that's like a miniature explosive device.

my colleague david asman is with us. before i ask you a question, i'm going to make a statement. look -- david: i will respond to it. stuart: okay. jay powell this morning in his speech referred to the china trade situation. he saw that as a head wind. he wants to do something about it. he wants to sustain america's expansion. now, i don't care whether you think that lowering interest rates is good or bad news. i'm simply saying now you've got this latest china trade development which is harsh indeed, extraordinary confrontation. doesn't that put added pressure on jay powell to get on with it and lower rates? david: absolutely. absolutely is the answer to that. there's just no question about it. it's interesting that powell did mention china in his notes and perhaps that had something to do with what the president was saying about china. he realized that since powell has said he's got to do something with china, he's raising the stakes. this is by a factor of, gordon

chang would give it a better number, but i would say a factor of five, this ups the racheting. to demand that u.s. companies come home is extraordinary. the one place where i began to hear that this was going to be happening was from the state department. we have a head of the state department right now who has been talking very tough about what china is doing, not just economically but what it's doing militarily around the world, so there is a joint effort not only economic but also with regard to the state department to really force china to pull back its imperial strings from the stuff they have been stealing, from u.s. companies, european companies, the whole world, to their imperialist tactics in the south china sea. earlier this week we heard the secretary of the department of state talking about how china was literally invading certain countries. it is now buzzing fishing vessels in vietnam, well within the vietnam limits, well within

their territorial limits. so you have the state department putting pressure on diplomatically, suggesting that militarily china's going way beyond the bounds, and now you have the president saying that economically, we are in a state of war economically, when he's demanding that u.s. companies come back from china. to make a demand like that, christian whiton you had on earlier suggested there may be some statutes that give him the power to demand that u.s. companies come home but this rachets up dramatically our trade disputes. stuart: that's a racheting up big-time. it surely is. left-hand side of the screen, you are looking at our own fed chair, jay powell, and with him, mark carney, governor of the bank of england. i have no idea what they are talking about. i think that's a live picture, is it? i think that's live. coming to us from jackson hole. they have walked out of the auditorium where jay powell made that speech. it seems like old news now. he made the speech at 10:00 this

morning. the market reacted to it. we thought that was the be-all and end-all story of the day. no, it's not. within literally an hour later, that would be about 35, 40 minutes ago, president trump came out with these extraordinary tweets, taking on -- ashley: both barrels. stuart: well said. no retreat at all. the confrontation has been escalated and the market has sold off. when jay powell after he finished his speech, we were positive. the dow was up a couple points. within seconds of the president making those tweets, we were down 100, now down 200, now down 380. at one point we were down 400. to some degree, there's algorithmic trading here. the computers read every statement from key officials. where president trump tweets, the computers read it and if there are certain words involved, certain words mean buy, certain words mean sell,

and when the president came out with that tweet this morning it was overwhelmingly sell it. it happened within a matter of seconds. we are still down, still going down some more. we will be down 400 any second. down 399. ashley: flight to safety. gold now up $28 at $1536. stuart: what's the yield on the ten-year? ashley: still not inverted, coming in at 1.57. the two-year at 1.55. david: what you can't see from the number alone is the dramatic spike after the trump tweets on china. that's what spiked the gold market. nothing else. stuart: absolutely. again, we have to repeat this, money is flowing to safety. gold, yes, up $27 an ounce. ashley: $27, $28. stuart: far more important, in my opinion, money going into united states treasury securities which are regarded as safe. you will get your money back. that's why the yield has gone down from 1.60 to 1.57%.

doesn't sound like much. i know it doesn't. it sounds like peanuts. but in fact, that's the movement of hundreds of billions of dollars because the u.s. treasury market is the biggest, most liquid in the world. that's what's happening. ashley: one of the few places you can actually get a yield. in germany, every bond germany issues is in negative territory. deirdre: you are paying for the privilege of lending money which is unusual. i think we have talked about this question of relevance as well in the sense that we are not talking about jay powell at this moment. we are talking about president trump's tweets and the market's reaction to those tweets. david: overshadowed everything. brian wesbury, i have known him for 25 years, been a free trader his whole life. for him to say we have to learn to live without china, completely isolate china from our trading system, that's dramatic stuff. again, he's one man, one economist but if other economists, he's a free trader but if he says this, other

economists probably will follow suit. stuart: this is rock and roll. ashley: let's not forget the president said there's going to be more to come this afternoon. david: great point. ashley: he's going to announce another counter-measure to what the chinese put out earlier about tariffs. that also depending on the timing will have a negative impact on the market. deirdre: you can understand why stocks are selling off even if every single business leader in this country agreed with what the president is doing which we don't know, but i'm just saying even if that's the case, they are really going to have to make some very serious adjustments. 18 months minimum to move a factory to let's even say from china to vietnam, for example. that's minimum. one of your guests just said three years in apple's case. and the burden. david: why does this always drop on friday? imagine the sweating that traders will go through over the weekend wondering if -- deirdre: that's their job. david: if they sold or bought when they shouldn't have. it's going to be a hell of a weekend. stuart: we are a news show and i

absolutely adore having news break as we speak. our producers are really good at this. they lined up a whole series of experts who know what they're talking about. at the top of the show, 9:00 this morning, we insisted that our job was to give you clarity, that we would tell you precisely what was going on. we are not giving you jargon. we don't get mixed up with fed-speak. no. we will tell going on. here's what's going on. fed chair powell this morning intimated, suggested, hinted at rate cuts in the future. a half hour later, president trump tweets on china trade and it's dramatic stuff. upping the whole confrontation with china after they had said they were going to impose tariffs september the 1st on us. that's what you have. two major stories. are rate cuts coming from the fed and there's a definite confrontation with china on trade. is curtis ellis on the phone? yes, he is. are you there? >> i certainly am.

stuart: okay. do you agree with my analysis that this is a dramatic escalation in the confrontation on trade with china? lows of the day on the market, down 421. go ahead, curtis. >> this is clarity. we are now seeing exactly what's at stake here. up until now, we have been involved in discussions of the price of everything and the value of nothing. this is not about 5% tariffs, 10% tariffs. this is about the future of our country and the future of the free enterprise system. you cannot have a free enterprise system if one of your major trading partners is using state-subsidized, state-owned enterprises to bankrupt the free enterprise company competitors. that's what's happening here. stuart: speculate for me, curtis, because i'm in the dark on this, in one of the tweets, president trump said we will find out more this afternoon

about what he's going to do with china. what do you think he might announce? i realize this is pure speculation but we are all intrigued here because something's coming and we would like to know what it is. >> the president does have a taste for the dramatic. i remember melania trump during the convention saying when donald trump's involved, there will be drama. so look, we now see the president ordering companies to find a new supplier, find a new place to locate their supply chains. no responsible businessman relies on one supplier. too many of these companies have made china their sole source supplier for everything. that is bad business. it is not the job of the united states government to backstop bad business decisions. they made a bad investment. it was called investing in the chinese communist party. they may have to pay a small price for that, but in the long run, we will be so much better off when we are not dependent on the chinese communist party for

our wellbeing because guess what? they don't care about our wellbeing, whether you are a wall street trader or american worker. stuart: curtis, we are face-to-face. the confrontation is ongoing. i don't think president trump will back off. this is not a president who backs away from anything. >> no, he will not back off. absolutely not. stuart: will xi jinping? who backs off first? >> china has so much more to lose in this. they depend on our market for the influx of dollars they use to prop up their house of cards economy. we have chinese banks on the verge of collapsing because they've got bad loans just far up the chain. we've got a situation where china has so much more to lose than we do. these tariffs we saw today that the chinese imposed are on the last $75 billion worth of goods that they import from us. stuart: wait a second. if xi jinping backs off, he

loses face. that's something you cannot do if you are running the communist party of china. you can't do that. you lose face at home, you are probably out of a job. >> if he doesn't back off, he loses support within the politburo because all of those communist party officials are -- basically they are gangsters. they are invested in all these companies that are now losing money because they are not selling into the u.s. what if the president were to, i'm just speculating here, not saying he's going to do this, but something that's been talked about widely is what if we were to revoke visas for all of the chinese students going to harvard and yale? all of the children of the politburo officials are sending their kids to america. if they no longer can go, they will eject xi jinping in a heartbeat. stuart: i do want to reinforce the view that that, curtis, is pure speculation. >> pure speculation.

what is not speculation is we have a lot more cards to play in this hand than they do. stuart: okay. understood. okay. ashley: wow. stuart: you have to take a breath here, david. ashley: it's a morning of strong statements. forgotten in all of this is the statement from the president in another tweet who is our bigger enemy, powell or chinese president xi. stuart: that's right. the earlier tweet, before we did the china trade tweet, the president went after jay powell big-time after his statement, and the president said i think -- ashley: he said the federal reserve did nothing. stuart: and who is the greater enemy, jay powell or xi jinping. david: you nailed it, powell alluded to china in his notes. he cannot ignore the way the market is responding and presumably the way the economy, because the market precedes the economic development so the market is predicting that what is happening now with china is going to cause dramatic economic

consequences to the downside. so jay powell is going to have to respond to this. because he said he would if china affects the economy. stuart: that's right. we are waiting imminently for some kind of response. not sure we will get it today. that would be a rather fast response. we will certainly get something more from the president. phil yin is with us. joining us on the phone, he's a former cctv america business anchor. phil, i have one question here. this is a direct confrontation now between xi jinping and president trump. i don't think president trump blinks or backs off. will xi jinping blink or back off in any way? >> good to be with you. i had a conversation the other day with a couple real strong industry folks and the conversation went something like this. which country can take on more pain and suffering. now, we love america, of course we do. that's why we're talking about this. but i'm going to reiterate, i

would not underestimate the chinese ability to take on significant amounts of pain for a significant period of time and i have to say if you put up a group of americans and a group of chinese, who's going to take on more suffering, i think we know the answer to that and i don't want to find out the answer to that either. stuart: in other words, neither side blinks, in other words, this goes on and escalates for a long time to come. no deal in the offing at all. you agree with that, phil? >> oh, we have been talking about this forever. there's no incentive for the chinese to really make a true deal because they can't. they can't actually give the white house what they want. as for the white house, i tell you, talking to people who are familiar with the situation, they are kind of enjoying it. yes, the traders don't really like it that much. there's a little volatility. but this is kind of, they are having some fun with this.

because democrats and republicans can unite and say look, we can blame china for the problems in the u.s. economy or for the past couple of decades, there isn't any pushback on them. they don't hear it on your show, we don't hear on it the other channels. there is a weird amount of unity between the democrats and republicans on this particular subject. and trump can put his hat on that. stuart: extraordinary stuff. phil, thank you very much indeed for joining us. now let me update a couple of news items here. later on today, after president trump has said something more about china trade and he has promised to say more this afternoon, after that, gets on air force one and flies to the south of france for the g7 meeting. in advance of that meeting, we are all thinking there's going to be an enormous confrontation between president trump and the climate warriors in the g7. especially french president macron, who really wants to make a point of climate change and trump's doing nothing about it. i wonder if that confrontation

is now going to be overridden by conflicts on trade and the dollar, the value of the dollar. bjorn lundberg is with us, president of the copiy enhagen consensus center. we always think of him as a reasonable environmentalist and that's what he is. he's with us now. look, to me, this latest news on china trade and the earlier news on the value of the dollar and interest rates in america, that's going to completely overshadow all this climate change talk, isn't it? >> well, it certainly seems that way. just listening to your show, clearly this is much more important and in some ways, it really shows you what is the problem with -- when you talk about climate change that mostly people care about many many other things that are much closer to home. climate change is sort of a hundred year thing, it's hard to get people to focus on. and certainly, it's hard to get them to focus on it in the right way. stuart: your point has always

been the solutions to climate change which are now being offered won't work and we've got to think of something else that will work to make it politically attractive. that's your point, isn't it? >> well, exactly. look, everybody got together back in paris in 2015 and promised we were going to save the world from climate change. and the reality is that it's going to shave off about 1% of what we need to do in order to get to our target. that is if everybody does what they promised and they won't. most countries are not living up to their paris promises. so we have a situation where people are promising lots of money to do almost no good for climate. clearly we need a better approach. the better approach is to focus on innovation. this has been the american solution always. if you get better technology, that is if you get cheaper green energy, everyone will switch. if you don't get that, you can't really get everybody to support ineffective green energy sources in the long run. stuart: you are exactly right.

what a shame that that point, your very good point, may be completely overridden at the g7 meeting by all this talk of china trade and the dollar. i'm sorry to cut it short. this is a huge news day. we thank you very much for being on the show today. i appreciate it. thank you very much. max baucus with us on the phone, the former american ambassador to china. mr. ambassador, welcome back. we like your words of wisdom. we have been saying all morning that this is an escalation of the trade fight, an escalation to the point where neither side can back off, an escalation to the point where we're not going to get any kind of deal, at least in the foreseeable future. would you agree with that, sir? >> i do. i think it's clearly retaliation to trump's tariffs that he imposed even though the two sides agreed earlier not to impose new tariffs. unfortunately, we did impose a new tariff and xi said okay, i

will impose some as well. i'm very worried. the chinese in my judgment are very tough, very strong, they understand strength better than do any other people. they smell weakness better than do any other people. they are going to hang tough on this and frankly, they are going to wait until they think president trump is going to cry uncle. stuart: this may be a technical question but president trump has ordered american companies to get out of china and produce elsewhere. can an american president order a private company to do that? >> no, he cannot. but that sends the shivers down the spine of any ceo that might be ordered to move. that ceo is going to be thinking about gee, maybe something's coming down the road where discretion is the better part of valor and maybe i should leave after all. no, a president can't order that. stuart: mr. ambassador, thank you very much for joining us, sir. >> you bet. stuart: you jumped right in at the perfect time.

we really appreciate it. max baucus. thank you very much indeed, sir. okay. we are down 419 points on the dow industrials. that is not the low of the day. we had been down i think around 430, 440. that's a way down move, 1.5% down for the dow, nearly 1.68% down on the s&p. look at that. the nasdaq -- ashley: what a day. it began as fed day. stuart: yes, it did. ashley: quickly turned to china day. just like that. david: by the way, ambassador baucus brought up a terrific point which is that just by saying what he has said, that can move not only markets, as we have seen, but it can also move companies. remember when the president first became president, right after his inauguration, he began to turn on businesses that had left the united states. he put the pressure on them. he wasn't saying that i'm going to throw you in jail, but putting dramatic pressure on these businesses brought a lot of those businesses back to the united states. just by saying what he has said

today, might put pressure on businesses to begin to leave china. those who were thinking about how they were going to change their supply chain to avoid china may be happening more frequently now than it did before. ashley: i think that was the key point, apart from the tone which is very important from the president. but that point, ordering american companies get out. david: it worked a year and a half ago. it could work again. stuart: just by saying it. david: just by saying it. stuart: it's not so much the imposition of tariffs that will hurt american business. i don't think it will hurt almost at all, frankly. ashley: right. stuart: but being ordered out, change the supply chain, that's what hurts the business. that's why in part the dow industrials are down 420 points. to recap, first thing this morning we went on the air, we promised clarity and i hope we have delivered it. we like to tell you exactly what's going on. 10:00 this morning, let me backtrack. 6:00 this morning, the chinese foreign ministry says we are going to put 5% or 10% tariffs

on some american products. that was an escalation. shortly thereafter, jay powell appeared before a symposium in wyoming and he says -- he implied he's teeing up future rate cuts, included in his statement was the idea that maybe china trade is worsening. that's a headwind. that's another reason why you might want to cut rates. within 45 minutes of jay powell's statement, we completely moved track on our news business and have gone to the president's tweets, which were harsh indeed. a standoff, a confrontation in which the president actually ordered american companies to get out of china, stop producing there, bring your production back to the united states. by the way, he also told fed ex, ups and the postal service, he said you ain't moving fentanyl from anywhere to here. i don't care whether it's from china or anyplace else. you knock it off.

no more fentanyl comes in. very strong statement. as of right now, well, we are waiting for the next shoe to drop. the president said he would be detailing more action later on this afternoon. we are trying for clarity. we are trying to cut through the jargon and with the great help of my friend david asman, what's your name again? david asman and deirdre and ashley, i think we've got it straightened out. we may be stressing the confrontation a little bit much. i may be going -- david: not when the market is down 440 points. stuart: thank you, david. i may be suggesting too strongly that jay powell was teeing up future rate cuts but that's what's going on. ashley: i think jay powell's message this morning failed miserably as far as the president is concerned in its tone. it was too neutral. he wanted jay powell to come out and just be incredibly, you know, let's -- we are going to have to keep up with the rest of

the world. deirdre: the president grabbed the mic. right? he grabbed the mic from jay powell. stuart: exactly what he did. well, look who's stuart: we have "wall street journal" associate editorial editor. >> to regional manager. stuart: i was going to give you a battlefield promotion. >> today's the day. stuart: am i right,, just go through this. am i right appearing that jay powell appeared to tee up future rate cuts? am i right in saying that president trump grabbed the mic, dominated the news cycle with this confrontation with china over trade? speak. >> i think that's a fair point. i think even based on what powell said though there is no case for a rate cut. he said we have low and stable inflation. you're hearing that from other members of the fed board. stuart: okay. >> what is the case here? the economy is good. consumers are spending. worried about corporate investment. trade uncertainty is on the

horizon. it's a headwind i think you said. stuart: yes. >> there is always policy uncertainty in washington. this is an excuse you could use anytime anywhere to raise or lift interest rates. the fundamentals say there is no big need for a cut. i think the trump, wait a second, so, jay powell did not in your opinion tee up rapid, deep, future rate cuts? >> i'm not saying he is not going to. i'm saying i don't understand by what he is acknowledging how he does it. he acknowledged the economy is strong. job market is good. we have low, stable inflation. stuart: okay. >> that's a good thing, right? stuart: that is another reason why the dow is down almost low of the day, 400 and what's that? ashley: fresh session low. >> it is interesting, on news of the china tariffs on china from the united states it didn't respond much. it has responded i think to the president saying, i'm going to

respond now. i think it getting into what you covered a lot, it hurts them more than it hurts us but that doesn't mean it won't hurt us. that this is the question, if we're digging for a long fight, how long does it go, and how costly does it. stuart: i think we all agree we're digging in for a long fight. i can't see either side completely turning on a dime, sing kumbayah. >> the market understands that. market was down 60, 70 point. it was positive until the president came in with the china tweets. that is when it began to tank. stuart: james you don't know what the president will said on china trade this afternoon. that is what we're waiting for. ashley: reports he is meeting with the trade team right now. they're formulating -- >> we heard the team was getting better signals out of china but he -- >> this will be fun.

stuart: okay. here is what we got. the jay powell statement, presidential tweets on china trade. he leaves this afternoon for the g7. we're waiting for the other shoe to drop. what will we say this afternoon. time's up for me. connell mcshane, it's yours. connell: what a friday, stuart, what a friday. it is not over yet. we wait for more news to come. welcome to "cavuto: coast to coast." i'm connell mcshane filling in once again for neil. we have a selloff in wall street, as president trump lashes out at twitter and china, the fed chairman who he appointed fed chairman. hillary vaughn live at the white house today. hillary? reporter: connell, president trump promising to respond to china's retaliatory tariffs this afternoon. we don't know if that is reaction from the president, or include some action from the president in response to this we do have new reaction from him on twitter though. in a flurry of tweets in the last