ash, deirdre, good to have you. quick note, during the news conference we played a sound effect over president macron t was a technical error. we apologize to our viewers and to president macron. our time is up. connell in for neil today. connell: has been very interesting today. welcome everybody to "cavuto: coast to coast," i'm connell mcshane filling in once again for neil. president trump said the chinese were sincere coming to table but can we really trust the chinese? president trump said he would under the right circumstances would be willing to meet iran. what would those circumstances look like as well? there is hong kong. the government warning after great danger following the weekend protests and a violent turn that was taken there. we'll have the latest where that

standoff stands. a busy market rally with stocks jumping on the president's comments saying china wants to get back to the table on trade. we'll see where we go. from here, we go to blake burman, with the latest on all the back and forth at the white house. hi, blake? reporter: we heard from president trump for a while, he feels china wants to make a deal. they need to make a deal very badly. he reiterated that earlier today. the market swung earlier today when the president said that china called over the weekend and said they wanted to get back to the negotiating table. here's the issue with that. when china's foreign minister was asked about these calls that were made. they disputed the notion there were any sort of calls being made. when, at least over the weekend. when the treasury secretary steve mnuchin was asked about it earlier today, sitting alongside the president he jumped in said there had been quote

communication through intermediaries. president trump was asked about that at that press conference just a little while ago, what exactly is the status of these calls? did they happen, between who and et cetera? this was the response from the president with the treasury secretary steve mnuchin jumping in at one point. watch here. >> the vice chairman made the statement he wants to make a deal. want a calm atmosphere, wants it to map. i don't have -- you folks reporting we can't find any phone call. he released a statement. i didn't release it. he released a statement. reporter: there were phone calls? >> numerous calls. reporter: iran nuclear deal became subject. french president emmanuel macron inviting foreign minister zarif in advance.

president trump did not meet with zarif. he noted that would be a level beneath the presidency. the president says he thinks he could meet with rue hahn hassan any and do so rather -- rouhani. i tell you one thing. he is great negotiator. i think he want to meet. iran wants this straightened out s that based on fact or based on gut? that is based on gust. reporter: g7 will be held in miami at his property in the doral area of miami, just a little west of the airport there the president faced obvious questions whether or not he would stand to profit personally and trump organization off the g7. the president said he feels president cost him in the air of 3 to $5 billion.

connell. connell: blake burman live at the white house. a lot to go through. let's focus on china for the time-being, a phone call, was it a phone call? what about the idea of china feeling enough pain to come back to the negotiating table in a serious way? gordon chang, who we talk about all the time with these issues, china might be sending a signal to do what, gordon? what do you think is happening here? >> certainly we'll see the talks in washington next month. 13th round of negotiations. there was doubt they would go through. what we heard from the vice premier, the lead trade negotiator they are unnerved by what they heard from the president and seen since then. i think right now xi xinping is in a world of hurt. connell: how do you know they want to do versus what liu he basically said, we want things to be calm?

he said things like that in the past during the negotiations. not like he hasn't said things like that before. what is different now? >> what is different, hong kong is unraveling. china has lost control. the chinese economy is much worse shape than it has been in a very, very long time. there are signs of political discord there is nothing that we can say with certainty but things are happening in beijing that normally wouldn't happen in a period of stability. connell: in the mainland, not just hong kong? >> the mainland itself. when you put all of that together, there is a sense, i think, that the chinese really do believe they have got to calm the situation with the united states. they have got all these multiple crises. i this xi xinping is believing he can can't deal with them at the same time. he wants to shuffle the united states off to the side for a moment and sort of deal with the other things he has got to deal with. connell: timing can be a real tricky thing. we talk to you about your hard time, coming collapse of china was written in 2001.

a million good points in that book. all of them would come to fruition we're coming to 2019, china has not collapsed, you know what i mean? >> true. connell: they are having trouble, even the chinese they they are having trouble in the economy, whether they will collapse tomorrow, people doubt that. >> i predicted they would fail by 23011. i am obviously wrong. the 2018 downturn i didn't see which strengthened chinese economy. connell: they could wait out it to 2020 if he he innocent with to, it wouldn't be great but they could do it. >> they can't wait out to 2020 because you would have a lot of businesses leaving. businesses can price in tariffs but not price uncertainty. leaving it until the end of next year, means a lot of businesses, a lot of factories would be leaving. i don't think they can do that

right now, the problem for them they have got a political system that really can't come to terms with the united states on terms would be anywhere near acceptable to us. connell: right. >> and the political system, you're right, connell, it has a lot of internal strength to it. but right now, it is being, facing challenges that it has not seen in 3, 4 decades. so right now, i do think that they are at risk. xi xinping understands that. connell: now, what do you think is going on in the financial markets today? i mean, it seems like you would argue there is some sense of weakness from the chinese, that investors maybe are picking up on. i might say, or my observation would be, you know, the market was set up to have a big selloff, following up 600 points down on friday. futures opened up down 300. it was really president trump who mavensed that, given the markets a little bit of a goose here with these comments overnight, that said, you know what? maybe we're going to have a talk with china, maybe they're willing to give. it was his comment that really kind of propped things up a

little bit for the time being. >> sure. but his comment were really in reaction what the chinese were saying to him and steve mnuchin, the treasury secretary. we're not driving this people may look at president trump, he started trade war. no he didn't, the chinese did a long time ago. the chinese right now are driving developments. president trump even on good days, bad days, he is reacting to what beijing is doing. connell: right. >> president trump would not have said the words today, had not liu he said we want to calm the negotiations. basically signaling that the china's position is basically weak. connell: do you think it's a good idea for president trump to meet iran? do you think that will actually happen? >> i don't think it will happen for a little bit of time. connell: all right. >> takes a long time, president clinton, everybody else has tried to meet with senior iranian leaders especially right now where you have got the political system there, the economy in trouble t will take a long time to set up.

connell: gordon, good to see you as always. >> thank you. connell: gordon chang. we say the markets are higher, up 236 on the dow. can change quickly as one tweet. that is the way we reacting quite some time, certainly on friday after the jay powell comments and president trump comment,down we go. dave maney is with us now. what do you think is going on? gordon and i are going back and fourth on it. my sense is president trump sensed that we were off a pretty big selloff the way things opened up in asia and things in the futures market. you saw from his tone there he knew he was speaking while markets were open. he certainly knew when he made the comment earlier that markets were set to open lower. what do you think is going on? >> i think you're right, connell. i think you're fundamentally right. but i don't think it is good. connell: yeah.

>> what seems to be now, you have got a guy who is fundamentally trying to manage the markets with his comment. that he is not, that he is not doing, just understanding that he has an elliptical effect on the markets, but that he is actually sort of mouthing words that are actually designed to do something specific. you know, you have that theory from the nixon era, about the madman theory of international relations which is, be unpredictable, make them think you're capable of anything. connell: right. >> i think that the president is becoming predictable. you can see, i'm not happy with how things are going so i'm going to say some things that seem, you know, off the spool. and then as soon as it goes too far i will come back say something else. that pattern happens so many times it seems to me to be losing its effect. connell: that seems logical, right but then i would say, why are we up today? why wouldn't investors just

ignore if the president was predictable and losings credibility win investors? but we react tick by tick comment, tweet by tweet, there is reaction in markets. will that always the be the case? what do you think? >> you're right on top of it, no, it is not happening yet but not like it lost its power yet but it strikes me it is losing its power. the stuff friday, companies are hereby ordered, that kind of stuff is just, that's a little bit beyond the pale. when you do that, for effect, which is what i increasingly think and i think the markets are starting to think is what it is for, it starts to lose its effect. it will be interesting to see going forward, if it, you know, if it becomes a very weak sauce. connell: it just hasn't happened yet. if it had, you know that down 300 -- >> not all the way. connell: last night would have continued as opposed to turning around. quick thought on the technology companies. there is back and forth on the digital tax in france that was

discussed at the news conference along with everything else. i guess the main point from the emmanuel macron, the president of france they will work something out with the oecd international body and they will come up with a new system and then if we need or if france needs to refund american companies after that is worked out, no timetable when it will be, we'll give the money back. what did you make of all that, what it means for these companies? >> look, we're dealing with a radically different -- it is an economic revolution. that is what i have written bull at time. the rules and the structures that existed to deal with industrial era revolution don't work for this one. like saying you know, what's the law of the sea? gosh before christopher columbus or magellan, we didn't need a law of the sea because nobody went to sea. now we're dealing with this transnational, there are no borders thing and companies and countries are trying to work in the old framework and it doesn't

work. i think you will see the death throes of that part of the international order that will go on for the next decade or more. connell: this whole oecd thing could take who knows how long. >> exactly. connell: thanks for the analysis, dave maney. in a moment, another thing we're waiting for today on top of all the politics and geopolitics a big court ruling a landmark opioid case against johnson & johnson. how it can mean huge payouts from other companies as well. we're going to talk about that. don't miss us on "after the bell," 4:00 p.m. eastern, that is when the rule something supposed to come down on the johnson & johnson case. we'll have more on china trade and all the rest. market rally continues for today. we're up 240 on the dow. coming right back. ♪

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connell: market rally down four weeks in a row on the stock market. you see some of the numbers on the screen. jackie deangelis joins us from the nyse. we're looking up for now. reporter: for now, connell. the dow is up 223 points t gained some momentum as president trump was speaking at the g7. look at some of the leaders because this is a broad-based rally. you will have stocks with china exposure that will do better. apple seeing a nice gain, goldman sachs, nike, with china exposure trading to the upside today. i want to talk about a deal in the drug space because amgen is buying celgene, that psoriasis drug, that they say was a hefty price tag for that, $13.4 billion. the deal is to pave the way for

the bristol myers and celgene. it will move forward with the 74 billion-dollar deal. bristol-myers and celgene trading higher. talk about disney today, it was another dow leader, last time i checked it was top five. they are teaming up with target. they are opening up 25 business any stores in conjunction with target stores. ceo brian cornell says this is a great synergy with the two companies. the chairman of disney saying there is 90% overlap between the customer categories here. disney has the own stores, 300 of them globally. this will give more exposure starting to october. you have to think if the shops are successful in the target stores, perhaps they will do expand and do more, connell. connell: jackie deangelis at nyse. we have a half a day of trade optimism for the markets but certainly months of uncertainty for businesses.

moody's managing director is here with how companies plan for the future of the environment. good to see you, ann. >> thanks for having me. connell: what we talk about more than anything else, what ceos tell us, analysts tell us, we don't know what's next so -- >> right. the market is giving as you lot of different signals in reaction to policy statements. it is hard to know what to make of all that. it creates a the love uncertainty for businesses, starting to come through in some of the numbers, industrial side, manufacturing numbers are a little bit lower. factory orders a little lower. market trying to absorb a shift in sentiment, a trade war is behind a lot of that. connell: sometimes you're uncertain you stay on your hands. i don't know what to invest. depends on your political point of view, everything depends on that you can talk yourself into a recession or can the president

tweet or talk himself into a recession of his own doing? is that what is really going on here? the fundamentals are pretty strong, we're talking ourselves down? >> i think there is a little bit of sentiment shift started to feed into those business decisions you talked about. if company's sentiment is weaker, they start to invest in a little bit less. they start to hold back on big purchases, big investments. they hold back on hiring decisions. that starts to feed through employment and that in off itself, feeds through to consumer confidence. so that becomes a bit of a vicious sidel. connell: why the consumer held up so far? we haven't gotten to that point? >> the consumer holding up so far. the consumer strength is strong. consumer strength is big part of the economy. connell: can we continue in this environment? certainly we can indefinitely i wouldn't think but we always catch things in election cycles. we're heading into november of

2020. it seems to be a thought out there, we were talking about it earlier, does china want to wait out the president or we get past that? can we continue into the economic environment through then? how do you guys look at things? >> we expect a slowdown and that slowdown is a little bit of a time in the making. connell: yeah. >> we had a cyclical upturn in 2018. we talked about synchronized global growth, things were humming along nicely. 2019, the trade war started to pick up but also don't forget the fiscal stimulus effect started to wane. connell: right. >> there is stimulus aspect and trade tensions particularly between the u.s. and china that will dampen growth a bit. we're seeing a slowdown in the u.s. we're expecting, we've seen a slowdown in china quite some time. connell: yes. >> some of the major economies are slowing. global growth is fragile. connell: slowing down but no recession in the u.s., seems to be the thought for you guys? >> you're right.

we don't expect a recession in the u.s. connell: what about china? >> for china things are going to start to slow a little bit more significantly. so for this year, they will register about 6% growth. next year it will be a little bit lower, around 5.7. connell: we're trying to say, we would kill for 5.7% growth. it is difference where you're growing off of. china that is the debate, willing to give in a trade fight, they can't continue to keep it going. their economy will be growing even if it is slower. sounds to me if they could, at least hang in there, even if things are painful for a while? >> sure. inchina will start to feel effects of some of the more restrictive policy stance towards the shadow banking sector which was a big source of growth. they will feel effects of the trade war. they have impact happening on businesses, households that is happening at a little bit of a sharper rate than the u.s. so they're a little further along

in the slowdown but they have a lot of policy tools and measures they can take to offset some of that slowdown. connell: currency? >> they can wait out some of these trade tensions. i think they can wait, play the long game in terms of trade tensions this latest announcement today, it's a question of, how real is this? will this really create a window for some kind of a meaningful trade agreement? we don't think that is the case. that has been illusive for quite a long time. the tensions between the u.s. and china run deep. they run beyond trade. they stretch into finance, security. technology for sure. connell: yes. a lot of people agree with you. ann, good to see you, from moody's. in a moment more politics. all of this plays into same story. elizabeth warren is playing into her progressive plans. the old joke, a plan a day. she is playing to huge crowds. joe biden what it means for

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connell: market rally if anything strengthening. we were up almost 294 on the dow jones industrial average. nasdaq percentagewise up most of the major three, big three we follow, s&p is up 31. it's a good day. a flash on the atlanta fed which is known for its, sometimes interesting economic forecasts. seemed like they were fairly optimistic about growth. that may have helped a little bit. we were up 200. then it was 300. that's where we stand right now. we will get back to that rally. meantime a little poll ticks for you. elizabeth warren drawing a crowd of 15,000 cheering on her wealth tax proposal. take a listen. >> it is time for a wealth tax in america. [cheers and applause] oh, yeah. okay.

so -- connell: maybe trouble for joe biden? what does it mean for china? want to talk about all that with "the daily caller" news foundation, editor-in-chief, chris bedford. the first thing you wonder, chris, whether we learned there was a lesson in 2016, the size of a rally, enthusiasm of supporters really does mean something. did i had then, does it now for liz warren and as it did for president trump? >> absolutely. not following the polls, looking excitement of voters, who is generating excitement led a lot of people astray in 2016. a lot of folks were caught surprised. joe biden should be worried. as peter doocy asked him last week, are you worried that elizabeth warren is drawing twice as many people than you are? he denied it. she is drawing massive crowds, he is unable to. joe biden rally is 50, 100 people. 15,000, that has to be something seriously worried in the campaign. connell: there had been a lot of enthusiasm for bernie sanders as well. seems like elizabeth warren

passing senator sanders. does he give it up at some point? do all his supporters go over to her? do you see this eventually coming down one-on-one biden versus warren? >> sanders and warren is going back and forth who is popular where. they cannibalize each other followers than joe biden. joe biden is powerful in southern states like south carolina and nevada. i don't think joe will be out of this too early. he has numbers and experience and he is winning in every single one of these states but the lead is getting smaller and smaller. i would certainly not count out bernie sanders. the excitement i see at his rallies is unbelievable. connell: maybe he could make a comeback? >> maybe. connell: chris, i want to ask you about trade, interesting on democratic side, uncertainty last few days with president trump and back and forth, with china, i wonder how the chinese see it, what their calculus is? conventional wisdom, they will

think, president trump alluded to this, they might get a better dealing with biden. senator warren might be absolute opposite, right? her plans come out, they might be tougher on china? >> warren and couple other candidates would push the tariffs. basically said they would do a lot of things president trump is doing. they wouldn't do it the way president trump does. they criticize him with twitter and other platforms getting message to china. china would have a much easier foe with any of those candidates. one of the things absolute constant of donald trump's public life, since the '70s, '80s, '90s, america is getting a raw deal on trade. americans back him two to one. that is not changing. that is in his bones. connell: you're right. he talked about it forever. i'm sure they are watching democratic race closely even though it is early on. thank you, chris bedford.

>> thank you. connell: in a moment, president trump signaling out russian president vladmir putin could get a invite to the g7. is the g8 making a comeback? how is that going over with u.s. allies? we'll talk about when we come back. we trust usaa more than any other company out there. they give us excellent customer service, every time. our 18 year old was in an accident. 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.

connell: to hong kong where the protests really escalated over the weekend. tear gas, water cannons. a police officer even firing a warning shot.

fox news correspondent kitty logan joins with us the latest. reporter: yeah, police using live fire for the first time in three months of pro-democracy protests. it was just one gunshot. nobody was hurt but this is a sign that things are escalating. woe also saw police pointing guns at protesters as violence begins to spiral really on both sides now. it's a sign that police in hong kong appear to be ready to take a tougher response to the protesters but the protesters also hardened in recent weeks. they are fighting back against police. today the hong kong police said the use of live weapons was a necessary response. >> we have seen an increase in the intensity and extent of violence used by protesters. they are radical acts intensified with more dangerous and sometimes weapons used including bricks, metal posts, long sticks and petrol bombs.

reporter: over 80 people were arrested during a series of protest this is weekend. police also using tear gas and water cannon to break up crowds of demonstrators. government officials have defended police tactics saying the protesters were blocking roads and also attacking officers. a number of police officers were also injured in those clashes. authorities say the increased violence could become dangerous for hong kong. but protesters are blaming the police for the escalation. they say they will not back down until their demands are met. they want greater democracy in hong kong. so far they say, their peaceful protests aren't worked. the concern is the worse the violence becomes the more tempting it might be for china to intervene and to crack down even harder on those protests. back to you. connell: all right. kitty logan with the latest on hong kong for us. president trump weighing in potentially meeting with the president of iran.

take a listen. >> if the circumstances were correct or right i would certainly agree to that but in the meantime they have to be good players. you understand what that means. and they can't do what they were saying they were going to do because if they do that they will met with very violent force. we have no choice. connell: a former national security advisor to vice president dick cheney. what did you think of this idea, john, of president trump meeting with rouhani brought up by the french president macron? >> yeah, thanks, connell. listen, the president has been on the record for several months now saying he is willing into enter negotiations with the iranians. it is worth pointing out rouhani is really a functionary in the iranian system. he is not the decisionmaker like president trump is. president trump's real equal is in fact the iranian supreme

leader. the important thing i picked up in the president's individual press conference was not only that he said he might be willing under the right circumstances to meet with rouhani, he talked about possibly meeting iranian demand, providing some kind of a temporary letter of credit with iranian oil as the collateral for that letter of credit. in essence, some sanctions relief to get iran back to the table. if that happens, that is a really terrible mistake. that will simply allow the iranians to buy time, wait out the trump administration by easing the tremendous economic pressure they're under. connell: you think now the time to double down, if anything, get tougher? >> i think absolutely. actually i would take this very personally, connell because i don't know if your listeners are aware, this very weekend while president trump was in france iranian foreign ministry authorized the iranian security services to take any action they

thought necessary to punish my institution, the foundation for defense of democracies and our ceo. so i think we need to drive a very, very hard bargain, letting the iranians know that unless they fly right, their economy is going to continue to be crushed by these economic sanctions. connell: all right. fair enough. john, let me ask you about russia a little bit before you go today, because, that came up at the news conference with a signal from president trump as he talked about before he would be willing to invite russian president vladmir putin back in or be at the g7 summit hosted in the united states next year. let's listen to that piece of that. >> i would invite him, i would certainly invite him. whether or not he could come psychologically to do. you have a g8, now it is g7, you invite the person thrown out by president obama. connell: that was idea of

inviting putin as an outsider to come participate like iranian foreign minister like the g7 next year in the united states. but what about inviting putin as well other russia to rejoin this group which president trump has also talked about? >> listen on one hand i think, connell, russia the largest nuclear power on the face of the planet. talking to them is both necessary and good thing. on other hand inviting them back into the world's leading club of free market democracies, which russia is neither democratic or free market, makes no sense to me at all unless they change the behavior that they got kicked out of the club. connell: the annexation of crimea. there has been no movement? >> there is absolutely zero movement. if we want to talk to russia multly laterally we have lots of settings. next month the u.n.-ga general

assembly. the g20 russia is part of. there are lots of ways we can talk russia. the g7, making it the g8 again is not one of them. connell: john hannah, thank you for coming on. >> it's a pleasure, connell. connell: whether or not we'll have a middle class or any kind of a tax cut in 2020, does he need to do something on that, on those grounds, on taxes before the election. we'll talk about that when we come back. ! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call, we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99. shipsticks.com saves you time and money.

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connell: latest from president trump on taxes he would approve a major, middle class tax cut if the republicans win in 2020. meaning if he is reelected as president? is that enough? charlie gasparino has been on this, plenty of other stories. >> a lot of ifs there. connell: a lot of angles on

taxes. >> a lot of ifs there. by the way, if he loses forget it. i hate to say it, there is a good chance he is going to lose, right? the polls say that. connell: we were talking about before, what i think is interesting, as we look at all the china trade stuff, all the rest of it, not only polls of democrat versus republicans, but intra-party democratic polls. i wonder what chinese make of liz warren surging whether they would be better off with joe biden versus trump? >> probably think it is better with biden. biden is a return at least on trade policy, to much more of the obama, george w. bush, clinton model. much more, sort of free trade with china integration with china, maybe, maybe, sort of backing off the intellectual property stuff. making sure that they comply with rules. this is sort of war of words, tit-for-tat tariff stuff will be out the window. connell: whereas warren --

>> she might call for it too. she is bad for the economy and markets. if you look at the markets, any democrat, you take biden out, any democrat is going to be bad for the markets in my view. they will be calling for much higher taxes, much more regulation. they would have to appease the left base. they would have to go hard on tariffs and trade. you get all of the bad parts of the trump trade economic agenda and none of the god parts. -- good parts. if biden, you he may cut the, raise taxes on corporations a little bit to pay down the deficit. there is a different dynamic going on with biden. much more open trade. that is, be much more stuff the market was use. let's be real clear here. there is debate over trade. the debate is, should we be biting the bullet now, taking it on the chin in the market because we have to deal with china as an aggressive player in global markets and intellectual property theft and other issues or should we be, should we be

doing it differently? that is really where it comes down to. should we be channeling peter navarro or should we be channeling the man i used to know, larry kudlow? connell: who will decide it? will it be one of those actual people or will financial markets end up deciding at the end of the day and force the president's hand? we're up today? >> we're up today, because he said something mildly positive. connell: i agree. gordon chang was in here earlier. we were talking about, is there a sense of weakness on the chinese side. no, there was market would open a lot lower, if you look at futures in asia, the president made comments. now we're up. >> on top of the fact if i'm playing this market i would be real careful. you're running into two things. you're running into lodge kick would say you cut a deal and just declare victory if you're trump. you deal with trump who is anything but logical. on top of that he has to appease his base which is getting tough on china. connell: it takes two. he has to have china agree to

whatever deal it is. this idea, maybe you think, i just wonder whether -- can trump make a deal tomorrow and china agrees? >> i think he can because they're hurting. i don't know if he will. i think in the end though, when it comes down to it, if you look at the next gdp print, if the next gdp print shows real weakness on investment and it shows gdp going down from 2% it is now? the market selloff, larry kudlow will walk into his office, i have not spoken with larry about this, this is just the man i know, and say, mr. president, you are blowing the election, here's why. let's do something. connell: that is the idea of markets forcing his hand. but if the opposite happens, growth holds up, the markets holds up, that bides him tons of time? >> you still have crazy markets and semiweak gdp growth. this trade stuff will factor into gdp.

it has to. it is law, it is mathematics, numbers. connell: there is that. we'll talk to you again soon. charlie, thank you, sir. we've been talking a lot about the g7 and leaders there agreed actually to try to do something about these rainforest fires in the amazon. we'll talk about what they're pledging on that, when we come back. ♪ ♪ ♪

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connell: here is a story outside of president trump, china, or anything like that. oklahoma is asking for $17.2 billion in a landmark opioid case. this is a case against johnson & johnson and a judge is set to rule on whether or not the company should be held liable for fueling the opioid epidemic. that is coming later today that ruling from the nyu school of

medicine, our good friend, dr. devi is here on this, as always, what could be a big ruling against this company or set a precedent the other way, for a lot of people hit hard by the opioid crisis. what do you think about it? >> i agree. when we think about the tobacco industry, what is coming forward with processed foods and obesity. the case comes down whether j&j is responsible for the opioid epidemic or they profited on a epidemic that was already happening a crisis that was already there the people's frustration has to do with the fact that this company marketed its product as being safe, not necessarily causing addiction, but safe for treating pain. it is taking us into how is the drug industry operating? what are its practices right? so for example, not specifically j&j, but another company, purdue pharma which already settled, there is evidence they targeted certain groups like veterans,

right? connell: right. >> if you look at models of addiction there is evidence in the lab, certain mice and certain animals are predisposed to addiction when underhigh stress environment. when we think about alcohol, everything is going well, they can have a drink socially, no problem, if they are under a lot of stress, they drink, that drink could be much more dangerous, right? connell: in the marketing materials the company sent out, they look at risks, no full well what the risks are, but minimize them. you don't know how it comes down legally. to someone in medicine, have you seen that over the years, something makes you feel uncomfortable the way things are talked about? >> sure. you look at certain scientific studies and rely on those for your decisions, but even if you people at home watch a commercial, if you see 300 side-effects you don't take as much notice of all of them if you saw three side-effects and pay attention to those, right? connell: that is interesting.

>> exactly. so you know, people's attention and awareness is also affected. on top of that i think people are frustrated, for example, you're getting sold this medication that is supposed to help you with all these side-effects. then the company makes money on all the medications used to treat the side-effect as well. connell: right. >> for example, we're talking about the opioid manufacturers, but even the antidote, naloxone, the generic name, prices have gone up by some of the manufacturers by 500% past few years by the opioid crisis. both the opioids are fueling the crisis. people are profiting off, again people's misery treating the crisis. >> what is a sensible solution in your mind? a lot of people compared this to what happened to the tobacco companies years ago? the situation is different in many ways also, because in that case you have people choosing to smoke cigarettes. obviously years ago they didn't know it was such a bad thing for them this is a choice they're making.

in this case you do have painkillers, drugs, if they're used properly right, they are quite necessary for someone who went through surgery. what is the balance we need to strike here? >> that is the hardest part. with tobacco we can really say there are no health benefits, right? connell: right. >> for medications what is the benefit of having a verdict against j&j? maybe the perhaps won't produce the drugs, maybe postoperative pain, people rely on the medications, you doesn't have them available. same with medications with serious side effects. how much is the company responsible for, personal responsibility or versus doctors, health care providers. connell: the ruling from the judge could affect a lot of other cases. dr. devi, thank you. we believe it will be at 4:00 p.m. eastern. market rallies over growing optimism for a trade deal. that is what we say when stocks are down. it's a different story when they

are down. next hour we talk about farmers, how long they can keep supporting president trump's trade policy. [ barking ] ♪ what about him? let's do it. ♪ come on. this summer, add a new member to the family.

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connell: president trump has continued to push forward on china. european leaders seem to be pushing back on some of his strategy there so can we really count on our allies? we will talk about that. plus businesses not spooked by recession fears. the new evidence showing that companies continue to thrive. and david stockman is coming in. he says jay powell is the enemy but not for the same reason that president trump has said the same thing. should be an interesting hour. it's hour number two starting right now. connell: good to be with you. market rally monday for the time being. i'm connell mcshane filling in

for neil, who is back tomorrow. stocks popping on trade optimism we got from president trump and his comments, saying china wants to get back to the table and in his view, is sincere about wanting a trade deal. this hour we start with hillary vaughn at the white house with the latest. reporter: connell, seems like the president is also too very optimistic that china really wants to make a deal, and treasury secretary steve mnuchin saying today that talks will begin very soon between the two countries. >> can't make a 50/50 deal. this has to be a deal that's better for us. and if it's not better, let's not do business together. we have to balance our trading relationship at least to an extent. and they were unwilling to do that. and we'll never have a deal if that happens. reporter: trump seemingly thrilled that china's vice premier signaled that they want to quote, calmly reach a

resolution, telling -- the president telling fox news' john roberts today that he does think china is sincere because they are feeling the squeeze economically through job losses and also paying the price of these tariffs. this follows president trump's announcement on friday to hike tariffs on china by 5% on about $550 billion worth of chinese imports but he did hint today that it might be possible to delay those tariffs that are set to begin on september 1st. the president says this is the first time he thinks that china is really serious about making a deal and he thinks that at least they're indicating they are ready to start having serious discussions. connell? connell: hillary, thanks. hillary vaughn at the white house. will investors keep listening to everything the president says or tweets or does it ever just become background noise? our panel for the hour, former jpmorgan chase chief economist anthony chan is here and david dietze is also here. jackie deangelis will join the discussion in a moment from the

new york stock exchange. david, i will start with you. i said last hour, you may have a different view, gordon chang was here and disagreed, but it seems after what we saw on friday that it's simple. president trump looked at things last night and said you know what, i don't need a huge selloff on a monday in the stock market. made the comments he made. what's going on? >> it's a very tough day on friday. china started, then of course president trump talked about bringing our companies home and then there was after the market close, another racheting up of the tariffs. but i think the saving grace for investors, why we are advising our clients to buy in the dips is president trump sees the stock market as one of his key report cards. i think ultimately when he sees that big selloff, that is a signal to him to dial it down a bit. i think that gives us some comfort. connell: investors keep listening, that was the opening question, no matter what it is, a tweet on the downside we saw friday with the series of tweets, next thing you know we are down 600 or 700 points,

closed down 600 plus, or today, you know, the idea that maybe after all we will get a deal and up we go, 268. >> well, floor traders are listening to every single word, every single tweet, every single headline. that's why you have seen so much market volatility. as soon as the announcement was made by the president on twitter friday afternoon just around 5:00, that he was going to raise tariffs, i started making calls and sending texts to people saying what are you expecting for monday. they said buckle up, it's going to be a rough ride. futures were down over 300 points before we started getting some better news. i think the president looks at this whole situation and said we are on a slippery slope here, you know. there needs to be some calm and order restored to the market and you are seeing that in the optimism today. connell: anthony? >> i think it's clear. i agree with david, the president views the equity market as his report card but it goes beyond that. i think that right now, there was a real risk that the chinese could have escalated this to another level and by saying the chinese are sincere, we are ready to make a deal, i think

that takes some of the pressure off the possibility that the chinese will again raise the stakes and maybe do something else. connell: even if that first part, we don't know, not necessarily true? the disputes about whether china really called anyone or didn't and all the rest, that was asked at the news conference and the president claims his conversations were going on, china says no, there weren't any calls. >> you have all those things and then the president said i don't want to really talk about the conversation so we don't know whether there was a text or call or instagram posting, but it doesn't matter. the fact is, the president is trying to lower the temperature of these negotiations and that is very positive for the market. that's why the market's going up. i don't think the market really cares whether there was a call or not. the fact that both sides seem to be moving closer towards lowering the temperature 100%. connell: clearly. if you ask most investors they would say probably wasn't a call. to your point, maybe it doesn't matter if there was a call. what did you make of this g7 conversation on this particular issue because i was watching some of the comments over the weekend from many of the leaders

there, and you know, you don't hear the same type of thing from them on china. not like they are all lining up behind president trump. if anything, oh, we don't like tariffs and wonder if we are all on the same team. >> it's very disappointing, almost the way they share into their responsibilities for defense and so forth. they are hanging back, not showing any leadership and frankly, their companies have the same issues our companies have in china. of course, to the extent they have other issues they are focused on like climate change, for example, why wouldn't they want to take a hard line with china on this issue and get support from the u.s. on, for example, climate change? connell: you can tell there was frustration on the u.s. side. there have been reports on this and some of them have been public, others have been reported on the way that agenda was put forward that there wasn't enough talk about economic growth and there was maybe too much talk about climate change and other issues at the g7. >> yeah. i think the expectation as president trump was going into this was to get something out of china. we got some of those headlines. i think as far as traders,

investors, the stock market is concerned, they want to hear about once we are past the china hurdle, what's going to happen to stimulate economic growth globally. remember, that's sort of the problem that started this volatility in the last few weeks anyway. that's why so much money has been pouring into the united states, because even with 2% growth, we are still the best house in what seems like a bad neighborhood. connell: the biggest question to me at least now is, is there a deal to be made, charlie and i talked about it last hour a little bit, and there's been the conventional way of thinking that if president trump wants to make a deal with china, i think this was true, i'm wondering, i'm asking if it's still true, there is a deal to be made but after friday, after some of the tough talk, if he were to go to the chinese today and say all right, you know what, i'm in on x, y and z and let's get this done, is china still willing to deal or do you think they look at things differently? >> i think right now, both sides are willing to talk. they are willing to make a real deal that is lasting. i think that it's too early. one day the president says we are ready, the next day he says

i'm really not ready to make a deal, china wants to make a deal. of course, we are now in a situation where both sides have to save face. remember the chinese have a big celebration in october to celebrate their anniversary. the leader does not want to go into that big celebration appearing to make huge concessions. so i think that for now, the market and i think both leaders are going to be happy with some sort of truce or cease-fire but not necessarily a deal in the short run. connell: that's a good point for the markets and there have been others that have said exactly what anthony said, maybe investors should realize that the upside here is not a deal, the upside at least in the next however many months is just things not getting worse, some sort of cease-fire. >> i think there are several reasons why china will ultimately agree the a truce. one of course, their economy is sliding. they don't want unemployed people in shanghai. of course, they export more to the united states than we export to them so tariffs are a bigger deal to them.

finally, the hong kong situation. they want to look reasonable to the people in hong kong and they can get there if they start laying reasonable terms. connell: before i get back to jackie, anthony, quick comment from you. i believe in looking at the bond market that we have another inversion here on this two and ten-year note. should we be watching that minute by minute, second by second? does it really matter that much? >> you've got to remember that for the inversion to actually signal there's some sort of recession, it's got to take place for about three months on a consistent basis. connell: what happens now is it goes back and forth. it has to be consistent. >> i actually developed an indicator that looks at the inversion of the yield curve for a quarter and also three consecutive declines in the leading economic indicators. when both those things happen as far as the data goes by, that 100% accurate in terms of forecasting recession. connell: not there yet? >> not there yet. we saw the index of leading economic indicators very far from three consecutive months and the twos and tens is basically going in and out

playing peekaboo. it's still not giving you the solid signal of a recession. connell: i want to take a slightly different tack as to why we shouldn't say recession is at hand. money is rushing into the united states and buying the ten-year not because the united states is in recession but because there's no yield back in the host country and finally, that inversion could be changed quickly if the fed takes the right action, lowers short-term rates, you will reinvert. connell: that's the thing. jackie, quick word on what you are seeing in the bond market, relationship with stocks as well? >> i agree with the gentlemen on the panel. what i'm hearing on the floor is that the inverted yield curve as it keeps going back and forth, it's basically a flat yield curve. it really needs to give traders some positive recession really is on hand, it really needs to stay inverted for a prolonged period of time. right now, the issue here is trade, trade, trade. i did have a few people say to me look, maybe when he imposed those tariffs on twitter, hiked

them up and racheted it up, maybe he did bring the chinese to its knees. you have to give him a little credit perhaps in his negotiating tactics because they weren't saying we want to put a peaceful deal together before friday. connell: that was the gordon chang point. he does sense weakness on the chinese side. time will tell, right? wanted to talk to you guys about iran for a moment. the president also today said that he would be open to a meeting with the president of iran under quote, the right circumstances. anthony, your take on this? make sense? >> i think first of all, he was blindsided by the fact that -- connell: emanuel macron of france invited him. >> right now he's got to make a comment and that was a positive comment but again, there's a huge black box in what the right circumstances mean. that to me really doesn't give us a lot of information at this juncture. connell: it leaves you open to, you know, interpreting, if you are the president, you can make

up what those circumstances are. >> certainly he was a little bit blindsided i think here. of course, the other thing is i think after all the turmoil on friday, he wanted to have a smoother g7 meeting. i think he wanted to be a little conciliatory to basically the europeans arranging for this meeting. connell: the other thing i want to talk about coming up is tech, because speaking of emanuel macron, the president of france, he says a very good deal was found on the french digital tax. the details of what we know about that deal are coming up. catch us "after the bell" at 4:00 p.m. eastern to break down the late oest on the china trad talks and much more. we'll be right back. ♪ all right brad, once again i have revolutionized the songwriting process. oh, here we go. i know i can't play an instrument, but this... this is my forte. obviously, for auto insurance, we've got the wheel route. obviously. retirement,

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macron says the u.s. and france have found an agreement on the digital tax we have been talking so much about. digital trends editor in chief jeremy capler joins the panel alongside deirdre bolton. there's deirdre. this idea of the digital tax, we got a lot of back-and-forth on it. now i believe what macron said today, they will work something out internationally and who knows how long that takes but depending on what it looks like, american companies may get some money back. what was your take-away? >> yeah. if a deal is worked out with europe rather than directly with france, think about it, why france, right? some guy sitting on his couch in paris watching netflix and france will get a share of the profits for some reason? doesn't make sense. if it is just france, all of a sudden it opens up for the uk, germany, italy, every other country to drive exactly the

same deal. there is definitely a need for international tax law to be rewritten. you think about what happened with apple where we had tens of billions of dollars being parked overseas, that felt weird, too. there is definitely some room for new laws but not just directly with france. connell: if you watched everything that happened today, like you said, we don't know exactly how this is going to play out but if you are apple, google, facebook, you look at this, should you be happy about what you heard? the stocks are up today. or should you say well, at the end of the day we are going to end up paying higher taxes across europe and in many areas outside of the united states as everybody kind of quote unquote, figures out the internet so many years later. >> yeah. i think on a lot of different levels, america's big technology companies are realizing there's going to be some change, there's going to be some legal ramifications to what's been going on because they have had years and years of unbridled success. a lot of people are looking at this going what's going on. so i think they are probably okay with some sort of deal happening. the real issue to me, if you look at this deal, there is a deal coming out with the eu and

we don't have all the details yet, my concern is it sounds like the eu will take a portion of that money to start facilitating the growth of european companies to compete with american technology companies. all of a sudden that feels really really weird. like why are u.s. companies fueling the growth of french companies to then compete with u.s. companies? that's weird to me. connell: that is weird. let's open this up a little. deirdre, you covered this a lot. you can jump in. what do you make of that, the idea that maybe that's the real goal of it? to help european companies? >> i do think that's true, first of all. okay, fine, it's weird but that's the way it is. i think -- connell: true of so many topics. >> i think the reason you are seeing a lot of tech stocks move higher is first of all, there was the bloodbath last week. markets in general will go higher today. but i also think that by paying this 3% tax or whatever it ends up being, i think these companies, the american companies, are avoiding the calls with pitchforks and fires to break them up which is

exactly what happened to microsoft in 1999. thanks to the eu, remember the eu cannot have a bragging creation right story about these companies. they were invented on u.s. soil, they were grown here, they are churning out billions no matter what parts we want to pick apart. in their own right, they are very successful. i think for the companies, if you are a shareholder you think you know what, 3% tax, it's annoying and goes against my principle of free market but i would rather have that than the eu breathing down my back to break me up. we have lawmakers in the u.s. calling these companies monopolies and wanting to break them up. connell: that makes sense. you agree? >> i agree. the other big point is that by having this so-called european type of tax, you also eliminate the risk that every single country is going to come at you with pitchforks. so if you get this number, it really gives some information out there and investors are

saying less uncertainty. same with the opioid crisis. if we get a settlement, stocks go up. connell: how important is this issue investor-wise for these companies, david, as you look at them? >> i think they are kind of priced in. we knew this was coming. as much as i don't like taxes, particularly taxing american ingenuity in the way this is done, on the other hand, the tech companies, a lot of multinationals have played fast and loose and to where profits are being generated. they are generating sales but allocating the profits to a place like luxembourg. that's getting them in trouble. connell: last word? it's weird but this is the way it's going to be. >> weird remains a good word for it. filling in a lot of the details, too. if they are -- i agree with deirdre, if it's 3% and locked in and that's it, the companies avoid a huge problem down the road. what are the terms here? is it permanent? that would be great for these companies because i feel like technology companies will be a

lot more per vvasivepervasive, be more coming down the road so maybe 3% is a windfall at the end of the day. connell: good to see you. thanks for coming in. david wants one more word on this. >> 3% still sounds pretty good relative to 10%, 15%, 30% in terms of tariffs we are applying on chinese goods. connell: there is that as well. everything is relative. in a moment, the panel stays with us and we will talk about farmers and what they are actually saying and we have had different viewpoints in this community, as you would expect as things get more volatile. what they are saying about president trump's back and forth with china. the latest one. up 236 on the dow. ♪

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scott is an iowa farmer and we said before the last break, i have been saying this for months, it's very interesting to talk to somebody in this community because we don't always get the same answer. in other words, i will go to iowa to a farm a couple times last year, expecting almost, say you know what, enough of this, i'm sick of these tariffs and get the opposite, say no, we support president trump even if it's hurting us individually. but are things changing? what do you sense right now in how you feel about the whole situation? >> i do think that things are starting to change. there seems to be maybe more strained support for the president as farm incomes continue to decline and what seems to be no end in sight with the tariff situation, with china, i think that farmers are beginning to just ask the question, you know, when is this going to end. we thought this was going to be something that could be done quickly and done in a way that wouldn't have such a negative

impact and i think they are beginning to really question that now. connell: they had these bailouts and by the way, our panel is also here. anthony, david and deirdre, they will ask you questions in a moment. i will get one more in to you before they jump in. these bailouts that have been given out to the farming community have not been enough in terms of your profit and loss? >> i think that farmers are appreciative of the mfp payments we have received. i think there are two problems, though, with it. one, it's just like you said, it's viewed as a bailout. there is such a negative connotation to that that ultimately, does that hurt our position when we have to fight for other programs and different things that have real impacts on us as well going forward, and ultimately, it does show that the president appreciates what we do but we are being paid to sit on the sidelines. we want to be in the game, participating in trade, using our largest trading partner in asia for our soybeans and our

pork and other goods, and it's just frustrating to feel like you're being paid to sit out of the game right now. >> i was in south korea last week and there's a large investor there that has a soybean farm in brazil. they are jumping up and down. one of the things they said is they do fwhoonot want to see th. and china make a deal. as long as tensions are high, soybeans will be sold left and right out of brazil. they also said something interesting. that is that once the trade deal or some sort of trade truce occurs, that the supply chains that china has now created with brazil are going to continue. so in the long run, yes, u.s. farmers will be able to sell soybeans back to china but perhaps not as many as before. is that the view of the farming community today, or is that an isolated view of some farmers in brazil? >> no, that's the biggest concern that i have personally in this whole trade situation is we get reports now that china

has had its largest investments into brazil as of 2017. they are building ports on the northeast side of brazil, and so i think that ultimately, where does the grain flow when the trade situation ultimately gets wrapped up. the u.s. is losing its position of strength in this relationship and it's only going to lower the cost ultimately for a brazilian producer of soybeans to serve china rather than us american farmers here at home. connell: that's the biggest point, anthony brings it up and scott agrees, is it all worth it has always been the question. at the end of the day, does the business that's being fought for actually come back. did you want to make one last point? >> following up, president trump has said when this is all done, ultimately the soybean farmers can be big winners. is there any other scenarios you can identify where maybe they don't lose half the business to brazil, maybe we have lower transportation costs, something like that?

>> i think ultimately, it's out of our control. instability in brazil and a poor performing economy in brazil will allow for us to maintain our position in that, but i would rather focus on things that i can control rather than trust that somebody else will screw up enough that i can succeed. connell: scott henry, thank you for coming on. good luck with everything. >> thank you. connell: in a moment, david stockman is coming in, which is never boring. put it that way. he says jay powell is the enemy. i heard that from somebody else. we'll be right back.

connell: we know that on friday, president trump really lashed out at, well, a number of people. one of them was the fed chairman he appointed, jay powell. referred to him as an enemy. the former reagan budget director david stockman is with us now. i said before the break that you also think jay powell is the enemy, but i believe it's not for the same reasons that president trump thinks that he's a quote, enemy. tell us. >> yes. for the opposite reason. the fed and powell is the enemy of prosperity, is the enemy of honest price discovery in the financial markets. these things are totally rigged with these repressed interest rates and the constant support of the stock market. the fed is the enemy of savers

and retirees. you know, they have been sav agd in terms of any return at all. the fed is the enemy of the wage earner. this ridiculous 2% inflation target basically eats away the metered gains wage earners have been making. most importantly, the idea that for ten years, now, this is really important, for ten years, the federal funds rate, the overnight money rate, has been below the 2% inflation rate which means we have had negative real money costs for ten years. that's mother's milk for stock market speculators and traders on wall street. it's done nothing for main street and it's putting us in a position where, you know, nobody in washington cares about borrowing or the deficit. we're going to have a $1.1 trillion deficit next year. in the 11th year of a business recovery, the longest in history. this is absurd. we are going to have a recession in a year or two, surely.

they haven't been abolished. we will have a $2 trillion annual deficit and the debt is out of control. connell: i'm going to get our panel involved in a moment because anthony used to be the chief economist at jpmorgan. i wonder if he has a different view. before i do that, you are one of the few, the proud, right, to talk about the debt and deficit all the time. as you observe, we know you think it's a huge problem and we kind of know your views what you think needs to be done. what do you think it's going to take for someone to act on it? because conventional wisdom had always been the market would have to force it with higher interest rates. we are nowhere close to that. what do you think it's going to take? >> i think it's going to take a thundering financial crisis in the bond market and we're not that far away. we are in the mother of all bond bubbles in world history. there is $16 trillion trading at

subzero. even last friday, the u.s. yield curve all the way up to 30 went under 2% which means it's under inflation. it was the only bond in the world that even had a positive number in front of the yield. this is not because there's too much savings in the world as these ridiculous people at the fed say, or because we got a weak economy coming. it's speculation. people are chasing prices higher and higher in the bond market when they're supposed to be earning a yield for safety. let me just give you one final example that shows you how absurd this situation is and it's been driven by the central bank. austria issued a hundred year bond with a 2% coupon. that bond is now trading at 210% of par. it's ridiculous. these people are buying it because the price is going up. connell: let me ask for anthony to respond or talk about this. david will jump back in.

we have a guy who said there is a bubble in the bond market. what do you say? >> the answer is right now given the economic growth we are doing, a little bit over 2%, it's very hard to justify these kind of bond yields. obviously the yield curves are being somewhat influenced. i don't want to use the word manipulated by central bank here in the united states, certainly central banks overseas, because those low rates certainly increase demand for our bonds. connell: you agree on the risks of all this? >> i think there are serious risks. the one point i want to make to david is you feel interest rates by the fed are too low. the federal reserve, the administration feels they are too high. whenever i hear criticism on both sides, it almost leads to the temptation of thinking that maybe they are just right. sort of like my kids, one says i'm being too harsh, the wife says i'm being too lenient, i'm thinking i'm okay. connell: what do you think, david? >> well, we got 12 people

sitting on the open market committee which is a monetary politburo looking at the world sticking their finger in the air and we need 2.2% overnight money and that rolls through the entire yield curve. they have no idea what they're doing. they have no idea of the right rate. what's wrong with the free market? just get the damn fed out of there. tell the fomc to retire, get off the playing field and i don't know whether the interest rate will be higher or lower, but it will be an honest one. we don't have honest capitalism in america anymore. the free market on wall street is dead. everybody is simply trading the last word and the last clue that comes from the fed and other central banks and the thing is a real mess. they are destroying prosperity and setting us up for a massive crisis that will make 2008 look like a sunday school picnic. >> seems to me a little dangerous to assume nobody should be in control because you

feel 12 people have no clue or are clueless. just a little dangerous. >> yeah. sure. no one should be in control. what's wrong with the free market? thousands and tens of thousands of traders and investors and speculators taking all sides of the market and all points of view? that's who should be determining the interest rate. not these fools on the fed open market committee. >> one question for you. what does it do to the value of the u.s. dollar, to the economy, and how might that affect the elections in 2020? >> well, if we had an honest interest rate, honest free market and the fed weren't in there, interest rates would probably be higher, the economy would grow -- go into recession. we haven't learned any lessons since the last crisis. we have raised a total debt on the u.s. economy from $52 trillion to $72 trillion. we can't support this. we need a cleansing of this whole mess and if we allow this to happen, trump would be hounded out of office in more

disrepute than herbert hoover. connell: i have a feel, i want to get in the break so brian wesbury can get his two cents in. i'm sure he's listening. we will get to him in a moment. david stockman, always great to have you on. thanks for coming on. after the break, brian will join us. we will talk about businesses that continue to thrive despite all the recession talks around the world, maybe reaction to what david stockman had to say as well. in the stock market today, we are up about 230 on the dow. we'll be right back. the songwriting process. oh, here we go. i know i can't play an instrument, but this... this is my forte. obviously, for auto insurance, we've got the wheel route. obviously. retirement, we're going with a long-term play. makes sense. pet insurance, wait, let me guess... flea flicker. yes! how'd you know? studying my playbook? yeah, actually.

connell: here's another story we should be paying attention to. the fcc warning elderly consumers will medicare card scams. our fox news correspondent joins us with the details on that. reporter: the fcc put out the warning about two hours ago after noticing an increased number of consumers coming forward with claims of potential medicare fraud. officials are warning the elderly to pay attention to any phone calls involving the word

medicare, if they ask for your card number or other personal information, it's likely a scam. scammers calling from all over the united states and the world using spoofing techniques. it's when a foreign number is masked or spoofed to look like a local number or even a local hospital number. unsuspecting victims answer the phone and many times give the person on the other end of the phone important information. last year medicare patients began receiving cards with unique numbers in place of social security numbers. spoofers are now calling for the new numbers on the card. i sat down with ajit pai this morning in washington and he said spoofers are finding methods that are becoming more sophisticated and are more convincing than ever before. >> they start with conversational questions to make it seem as if this is a person they can trust, especially when talking about things many elderly people might relate to, for example, oh, yes we understand you just got a new medicare card, can we see your number just to confirm it. reporter: this new warning is

just a small piece of a larger puzzle with robocalls in general. pai says his team fined robocallers $250 million in just the last two years. that do not call list that you know about only applies to legitimate telemarketers, those overseas often don't comply, making the calls even more frequent and frustrating. i know i signed up for it a few times. i get those calls multiple times a day on my dproecell phone. connell: you're right about that. thanks, david. there's a new study out from citizens bank showing that u.s. businesses are strong. sfiet t despite the inverted yield curve and all the rest. brian wesbury joins us now. we always have brian on to say it's not as bad as you think. i thought of you right away with david stockman on. any time anyone mentions bond market bubble, i thought wesbury was just telling me about that. did you hear what he said? what do you make of it? >> i agree with half of what david said, not the other half. i believe the bond market is in

a bubble. one of the things that we have to recognize is that the inverted yield curve today, i get it, when you say it's different this time, people laugh but in 2008, the federal reserve changed the way they manage monetary policy. typically, when the fed would get tight, they would take reserves out of the system, they would make reserves scarce. today, we have 1.3 trillion in excess reserves that's coming from quantitative easing in the system. there is no way that this inverted yield curve is anything like your father's inverted yield curve. having said that, david believes quantitative easing created this bubble in the stock market and we will blow up and be worse than 2008. i totally disagree with that. if you look at the s&p 500, it's about a 19p.e. ratio. that's a little bit above

long-term averages. but there is no evidence we have created a massive bubble in the stock market, none whatsoever. i totally disagree with david's end of the world forecast. i do agree that interest rates are way too low relative to inflation or growth. connell: okay. let me ask you about another -- well, they are all related, all these topics are always it seems like interrelated to each other but the idea with what happened friday, the jay powell speech, the president's tweets, the market decline, then what happened over the weekend in the last night and then this morning where it looked like we would go down again, the president comes out with other comments, maybe things are a little better with china and we bounce back, what's really going on here? this idea we could kind of talk or tweet ourselves into an economic downturn, next thing you know we're back. what's your observation what's really happening? >> first of all, i do not know of a recession in history that

was caused by emotion. that was brought on by fear of reporting or calls for -- i don't know of one. recessions happen when the fed tightens too much. this fed is clearly not tightening. second thing is as far as china goes, i think people are overreacting. number one trading partner of the u.s. is mexico. number two is canada. number three is china. number four is japan. we have signed free trade deals with mexico, canada and japan. if you combine all of their trade with the u.s., it's way bigger than china. now, i get it, apples in china, but the bottom line is i think people are overreacting to this. the deal that we are talking about with china can make up -- china is going to lose its supply chains and people shouldn't forget this. china is a communist country.

i don't care whether they play chess, checkers, whether they think in a thousand years, a million years, a hundred years, it doesn't matter. they are communist. it can't last. because communism has never worked in the history of mankind. connell: just about timing at the end of the day on some of this stuff. definitely get your point. always good to talk to you, brian. brian wesbury on those issues. we will come back with the panel, talk more about g7. i know they had a pledge on the rain forest fires in the amazon. believe it or not, some people were calling on jeff bezos to pitch in. that is not a joke. that's coming up, along with maybe some reaction to what brian had to say. we'll be right back. there's a company that's talked to even more real people than me: jd power.

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connell: one of the things that came out of this g7 meeting is

the leaders had an agreement on a $22 million aid package to fight the amazon rain forest fires. this comes against growing calls from the internet, apparently, that jeff bezos, deirdre bolton should step up and talk about this. >> yeah, because as we know, the company, amazon, named for the river, right, so they are saying okay, jeff bezos, you are one of the world's wealthiest men at $136 billion, you could chuck in a little bit to stop these fires. 74,000 fires this year, up from 40,000 in 2018. so really burning and the brazilian president, not seemingly too concerned about it at all. in fact, really had no plan from what i can tell to make it stop. at the g7, french president macron is actually hiring, they pooled together some money -- connell: doesn't sound like a ton of money. >> it's not a ton of money to handle this. jeff bezos to my knowledge has not responded. i did send a quick note to see if they have a comment. no comment as of yet. listen, you had private money,

billionaires getting involved in the reconstruction of notre dame in paris. you had the head of lbmh, you had a few business heads donating a few hundred million dollars so it's not out of the realm that private enterprise get involved. connell: yeah. we will follow it. boy, this has been some story to follow, whether jeff bezos gets involved or not. we have a couple minutes left. in the meantime, the kind of overriding discussion we have had for the whole hour, i always like different views and it was interesting to listen to david stockman and brian wesbury back-to-back on things. brian agrees with about half of what david is saying. anthony, pick up on this point about basically interest rates and growth and where we are all going from here, what you really think is happening. >> i think there's no question if you are able to sustain 2% economic growth with these interest rates, that the interest rates are justified. however, the federal reserve also has a good point and that is if we are bringing in extra additional trade uncertainty, which clearly if you look at the

business sentiment survey suggests that that's been the main precedent for business investment, there is some room for the federal reserve to attempt to boost sentiment. however, even jay powell has admitted that monetary policy is not the best tool to boost business sentiment or even deal with trade uncertainty. connell: that's it. that's the other thing that was interesting about powell on friday, david. so many things happened friday that, you know, we talked about it but still -- >> we forgot about powell because president trump grabbed the mic. connell: 100%. he did say basically in so many words, said this whole trade thing is like we have never kind of dealt with this before, i'm not sure if i know what to do about it is basically what i read into what jay powell said. >> very sympathetic about that. in fact, he did what he could in july, cut a quarter point. that was followed of course by racheting up of all the trade concerns that made his job that much more difficult. i do think there's a strong case to cut rates and i think for two reasons. one is, you have to have your rates somewhat in sync with what's going on overseas. when you have like negative 75 basis points in german ten-year

money, that just causes it to come into the united states, raises the value of the dollar, that puts a head wind on exporters and that's not good for the economy. finally, of course, you know, it's the market that's bringing down that ten-year treasury, i do think they should get that yield curve back in the right direction. connell: got to run to get this wrapped up on time so we don't all get in trouble. this was a good hour and terrific panel. deirdre, thank you for pitching in. david, anthony, good to see you as always. disney gearing up for its face-off with netflix. hundreds signing up for its new streaming service at what they call the d-23 convention. disney plus. we'll be right back. val, vern... i'm off to college and i'm not gonna be around... i'm worried about my parents' retirement. oh, don't worry. voya helps them to and through retirement... ...dealing with today's expenses... ...like college... ...while helping plan, invest and protect for the future. so they'll be okay... without me? um... and when we knock out this wall imagine the closet space? yes! oh hey, son.

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eastern on "after the bell." we'll see how the market closes up as we do every day. it is one of those situations, now things look all right especially after we saw what happened on friday as we hand things over to charles payne. charles: the operative word is calm. connell: calm. charles: i'm charles payne. this is "making money." at this moment president trump on his way back from the g7 summit after meeting with world leaders for the past few days. trade was brought iran in focus. as stocks breathing a sigh of relief, trade talks and cooler heads are prevailing after weekend of serious sabre-rattling. at one point the dow futures were off 1000 points. obviously not going on right now. new survey shows american values shifted dramatically. you won't believe what matters most, what values are falling on the list. how this could determine who wins the white house in 2020. all this and so much more on "making money." ♪