2,000 lawsuits against their company for up to $12 billion. this, of course, comes a day after an oklahoma judge ordered johnson & johnson to pay $572 million for the opioid epidemic. we're going to pass it on to ashley webster in for liz, and ashley, i'm sure you'll be looking further into this. ashley: we will, indeed. but let's begin with this, it appears a case of crossed wires has the market perhaps a little confused. president trump arriving back at the white house last night after saying china trade talks are back on while he was at the group of seven summit in france. the president meeting with fellow world leaders over the weekend, but it was his optimistic comments about china trade talks that sent the markets higher yesterday. today the chinese refused to confirm any recent trade conversations. we'll have more on that. and edward lawrence is live in our studio to sort through all the rhetoric. good luck with that, edward. former u.s. ambassador to the european union anthony gardner

will grade the president's performance. and american apparel and footwear association president tells us how his industry is preparing for more tariffs that are now just five days away. on wall street the dow sliding steadily after popping 154 points higher earlier in the session. smuckers and smokes holding back the bulls. the s&p 500 down just slightly, the nasdaq also up about a tenth of a percent, the dow off 43 points. plus another big story, two of the biggest tobacco names talking about reuniting. why altria and philip morris could soon be breaking out cigars. i'm ashley webster in for liz claman, let's begin "the claman countdown." ♪ ♪ ashley: we have breaking news for you, actress lori loughlin

and her husband are right now in boston federal court as they try to settle the dispute over their choice of lawyers in that massive college admissions bribery case. the court will determine whether they can continue using a law firm that represented the university of southern california which is where their two daughters attended. the couple is accused of paying half a million dollars to get them into usc. they have pleaded not guilty. we'll continue to follow that for you. over in markets, stocks right now as we said off session lows, but firmly in the red as trade hopes dim. it changes with each passing minute, it appears, and also the yield curve moving deeper into inversion. the spread on the two and ten-year yields widening to levels last seen in 2007, the ten-year hovering around 1.48% as you can see, yield curves typically are precursors to recession. the two-year yield up at 1.52.

that is not how it should be. all right. the top story of the day, philip morris and altria are in advance talks to merge, and that deal would create a $250 billion plus mega firm. the companies have been dealing with declining cigarette sales and a rise in popularity for e-cig e relates. altria shares rising, but down nearly 4% as the all-stock deal would have no premium. philip morris which lost ground initially is now even more in the red, off more than 7%. but philip morris would control about 59% of that combined company. altria, by the way, owns a 35% stake in e-cig maker juul and has partnered with philip morris op their own cigarette alternative. we'll have more on this story, especially the legal challenge faced by juul devices. meantime, jm smucker, shares are in a jam -- i apologize -- [laughter]

facing the biggest one-day fall in two years. i didn't write it. after missing wall street estimates for first quarter revenue and profit, smucker blames the drop on weak demand for pet food, coffee and retail consumer foods. the company is the biggest laggard on the s&p 500 is, down 7.5%. johnson & johnson is the top winner on the dow as the legal judgment against the company could have been a lot worse. an oklahoma judge ordered j&j to pay $572 million to the state for its part in fueling an opioid epidemic. the state, by the way, had asked for more than $17 billion. all right, let's get to the trade war. president trump says china has made calls to renew negotiations, but beijing disputing that version of events, and that has created some confusion for the markets. meantime, the administration is reportedly closer to eliminating one huge potential trade war weapon. reports claim the pentagon is in talks with australia to host a facility that would process rare earth minerals.

that would make the u.s. less dependent on chinese materials that are used in the making of military equipment and other high-tech products. china is the world's largest processer and producer of these minerals. it controls 97% of the production, and the u.s. gets 80% of its minerals from china since it has just one rare earth mine in operation. this is a big deal. guess who's here? fox business' edward lawrence, he's not on the white house lawn. no, for a change he joins us live in the studio, living and breathing and in person. edward, welcome. so much to go at. of course, the g7 created so many headlines, but let's get first to the china trade issue. >> first that rare earth -- ashley: you want to get to that? >> you mentioned that, that's a huge lion's share, 80% of the materials you mentioned we get those from china right now, so those are everything from in your cell phones, radios, ipads, also military equipment. if china uses that as a weapon

in the trade war, it could have an immediate effect. the u.s. wants to find other sources. ashley, right now we're looking at another high-level phone conversation between the heads of trade teams. two weeks ago u.s. trade representative robert lighthizer, treasury secretary steven mnuchin, the chinese vice premier and commerce minister spoke setting up a second call. this call will organize a face to face meeting, and there have been calls -- their calls have been at the center of many debates this past weekend. i think it's important the timeline of the communication here. the vice premier and u.s. trade representative spoke on august 13th. over the weekend the president claims there were several calls. now, a person, a spokesperson for the chinese foreign ministry pushing back saying they are not aware of any calls, saying or adding theariffs are not constructive and serves no one's interests. the president, donald trump,

praising the relationship he has with president xi. just last week though he called him an enemy to the u.s. all of this has the markets doing a whiplash over the past week, and the head of the retail trade federation concerned. >> we've done tax reform, we've done regular that la story reform -- regulatory reform, let's not jeopardize it by imposing more tariffs on these goods and on consumers and businesses. >> he would like the president to stop the tariff campaign, the administration saying that's the only thing that has brought china to the table and created the situation where we can have a deal. ashley: a lot of talk, but we need action and progress, and that's been frustrating. >> both sides are really dug in. president xi has the hard-liners he has to hold off in china and president trump, obviously, wanting a deal for the farmers, he wants a deal to show his strength, and he needs to protect that intellectual property -- ashley: and u.s. tariffs up in, what, five days? >> yeah, september 1st. ashley: edward, great to have

you here in new york. let's get back to markets. s&p 500 earnings estimates also in view because despite expectations of a contraction, u.s. earnings growth has come in at 3% so far in the second quarter. but that trend is not expected for the current period. estimates are for a dip of nearly 2%. the so-called experts say that, we shall see. let's get right to floor show, traders at the new york stock exchange and the cme group. let's get down to matt cheslock down at the nyse. you know, matt, a strange day. to be honest with you, i was surprised to see the market higher this morning given some confusion of where the china trade talks are and and the fact that i hate to get all wonky, but the ten and the two-year yields have been inverted pretty much for the entire session. >> well, i mean, certainly is, i guess, a bit wonky, but if you're going to look at where you're going to want to invest, maybe in the u.s., it may e be in dow stocks. when they're going to give you a

much better yield than u.s. government can or any foreign entity, you know, europe's in negative rates, why wouldn't you invest it in the stock market? i think that's what you're starting to see, smart money gave gotten into this trade a lot earlier, maybe they're now getting out of bonds, maybe they're now selling utilities. so we're starting to see some of the sectors that have performed pretty well. maybe they're, you know, at a time when maybe we should be selling, and maybe we should be buying some of these down names at this bit of a discount. ashley: yeah, phil flynn, there does seem to be nestness because it is so -- nervousness always it is so headline-driven these days. >> it really is. and, you know, i think one of the things that i look at when we look at these earnings, everybody was rooting, you know, the anti-trumpers were rooting for bad earnings, you know? they said, oh, you know, the earnings recession is coming, and people have been rooting for a recession. but what we find time and time again that the u.s. economy continues to confound the

critics, continues to defy expectations. i was very excited to look at the consumer confidence numbers today, everybody thought it was going to be doom and gloom, everybody was going to be worried about a recession. it seems like the only people that are calling for a recession are some of these pundits on wall street. and so far they don't look like they're going to be right. ashley: well, that's a good point, scott shellady, and we talk a lot about this on "varney & company," the fact that if you look at the u.s. economy -- and to phil's point, the latest consumer reading, okay, it fell a little bit, but it's still very, very strong. i mean, to me, this economy is very rnt,nd if w can get a deal with china -- and that's a big if -- we're off to the races. >> right. as far as the economy being resilient, it's really the consumer that's been very resilient, and there's a lot of thing going the consumer's way. so rial what we have to worry about is we're stuck between a rock and a hard base, right? we're trying to get something done with china, trying to make sure our economy doesn't fall

apart. i would say jay powell has the world's worst job for the next 18 months trying to balance those two things. keep an eye on what he has to say. also, look, negative rates are the real reason in a rate cut environment that we've got this inverted yield curve. i've said it before, the inverted yield curve's a perverted yield curve. [laughter] forget about it. it's not something we have to worry about. negative debt in europe. look, we still need to find a way to truly grow. why aren't negative rates helping europe get out of their do demise? that's the real thing that powell's got to worry about, and i think all eyes should be on him. ash all right. very well put. thank you so much scott, phil and math, thank you for joining us this afternoon with the closing bell less than an hour away. front and center in the 5g race, verizon -- one of the dow 30's biggest winners intraday --

after oppenheimer upgraded shares to a buy. verizon also confirming plans to up its fight against robocalls by auto-enrolling all customers in its free filtering service, as of today it's available to apple ios users for free as well. verizon's shares up 1.5%. all right, well, new brexit fireworks breaking this hour. boris johnson fanning the flames saying a hard irish border is a must for any deal to be made between britain and the european union. but the e.u., will they be willing to back down on its backstop demand? that's the big question. up next, former u.s. ambassador to e.u. anthony gardner standing by in london with the latest developments. "countdown" is coming right back. ♪

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ashley: breaking news, just moments ago. prime minister boris johnson reportedly had a, quote, positive and substantive conversation with european commission president joan paul junker -- jean paul junker, unless the agreement was reopened and the irish backstop abolish ed, there is no brexit deal. meanwhile, yes, the u.k. is still due to leave the european union on october 31st. johnson has promised to stick to that date even if he cannot get a deal with brussels. our next guest was the former u.s. ambassador to the your mean kind yoon -- european union, he knows a thing or two about brexit and the impacts it could have. ambassador anthony gardner joins us exclusively live from london. thank you for being here. all the rhetoric up to this point with boris johnson suggests that he doesn't

really -- unless the e.u. gets rid of that irish backstop, he doesn't want to deal. and if that's the case, surely the prospects of a no-deal brexit are getting larger and larger. >> absolutely right. i think the markets are underestimating the risk of a no-deal, hard brexit. but it's worth reminding the audience why we are here, why we're in this situation. the prime minister may, before boris johnson, set forth some red lines. the u.k. will leave the customs union, and that necessitates the e.u. to have border checks at the external border between northern ireland and the republic of ireland. and that is because the single market and customs union are absolutely core to what the e.u. is. the backstop was a way to kind of square the circle, if you wish, and that is to say, look, if you're quick to be leaving both -- if you're going to be

leaving both, one option is for northern ireland to stay in this arrangement, the us toms union parts of the singles market, and boris johnson said no. the chances of stripping the backstop out of the withdrawal agreement, i think, are nil. so right now i believe that boris johnson is setting up for a blame game. ashley: well, that's interesting because, listen, he -- we know that theresa may tried tree times to -- three times to get a deal through and failed three times. the question now becomes if boris johnson tries to run out the clock, just count it down to october 31st and before you know it the strike of midnight, boom, the u.k. are out, and trying to come up with ways to stop him. can he be stopped? >> well, there are two ways. you're right, the default option is that if nothing happens, they're out on october 31st. one of the ways, which is a vote of no confidence, seems to be less likely today than it was even a few days ago. but the other way, which is the legislative option of seizing control of the legislative

calendar of the house of commons, seems to be more likely today. six opposition parties seem to agree. they've agreed on a pact to ask the commons speaker to set aside some time on the legislative calendar to have an emergency debate and introduce legislation that would force the prime minister, boris johnson, to request an extension. now, here we're getting to very murky waters. it's not clear what'll happen if the speaker allows this to happen, and it's happened once in the past, what would occur? because the government could actually ignore such a bill. that would potentially precipitate a constitutional crisis. ashley: right. >> and simply say we'll wait out the clock and the u.k. leaves. ashley: very quickly, ambassador, do you believe the u.k. will leave with no deal in place? is that becoming more likely in your mind, very quickly? >> i think it's highly likely the u.k. will leave with no deal. ashley: wow.

you heard it here first. ambassador anthony gardner in london, thank you for taking the time to talk with us. we do appreciate it. >> thank you. ashley: all right. let's check the big board for you. we're about 40 minutes away from the closing bell. the dow off, down 71, 72 points at this hour. investors harvesting zinger todahe maker of farm bill and other popular mobile games added to webbush's best ideas list. znga up 47% this year. today up another 2%. also adding electronic arts and act vision blizzard to its list, all three gamers rising on that news today, rising with the tide. coming up next, two tobacco powerhouses on the verge of a merge. christina parts never las will be here to tell us if the remarriage after a decade will hear wedding bells or it could all go up in smoke.

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ashley:al try ya and philip morris both seeing red at this hour despite those shares, well, they were high e at the open today, but maybe this news has kind of sunk in. the two tobacco giants confirming they are in talks regarding a potential all-stock merger deal that would reunite the two companies who, by the way, split up 11 years ago and created dominating tag team in the e-cigarette marketplace. if completed, the company would have a market value of over $200 billion. kristina partsinevelos in the newsroom covering this story, what is the likelihood this deal goes through? >> reporter: i think you said it, if completed. the fact that these are two major players possibly remerging, it would have to pass

regulatory hurdles. this is not going to happen overnight. but why would they join forces when they separated only a decade ago? the fact that there's some different avenues to get away from cigarettes like juul, you have altria that has a 35% stake in juul. you also have philip morris that has created a product, a qos device. it doesn't burn tobacco, it heats it up, so there's no smoke or vapor that comes out, gaining in popularity around the globe. a lot of growth opportunities here in the united states. and going back to altria, another avenue too is they recently brought swiss maker of nicotine pouches. not patches. like you mentioned, ashley, you've seen the stock prices down, so why did that happen? the companies called it a merger of equals, but i think investor are starting to realize that's not going to be the case. philip morris will get 59% of altria. just look at that graph over there. if we look at the one-year, both of those companies you can see

philip morris has been doing a little better than altria, so some are saying, if anything, altria will weigh down on philip morris' valuation especially when it comes to regulatory hurdles involved with jul and other e-cigarette companies. and since we're talking about vaping, let's look at the stats. in 2018 -- and this is coargd euro monitor -- just in terms of sales, smoking, tobacco-related products $107 billion. all of those other non-vaping, the e-cigs, that comes out to about $15 billion, and it's growing every single year. but the problem though is regulatory risk. off a lot of state-level -- north carolina even just within the past 24 hours, they said they want juul and other e-cigarette companies to stop selling their products because they're marketing towards children. and then overall you have the drop of people not smoking as much, so tobacco shipments decreasing.

to bring it back to you, ashley, this could potentially take years. ashley: it could. [laughter] >> reporter: it could. maybe it'll happen within the next year, we don't know. ashley: indeed. it's been a pun-cringing show so far. christinakristina partsineveloss terrific. thank you for that story, we appreciate it. $200 billion company. all right, let's take a look at the markets for you, all of the major markets down just slightly, the dow, s&p and nasdaq down about a quarter or a third of a percent. all right, coming up, costco in china is helping to send shares to new record highs. "the claman countdown" is coming right back. ♪ ♪ ♪ ♪♪ ♪♪

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call unitedhealthcare and ask for your free decision guide. learn more about aarp medicare supplement plan options and rates to fit your needs oh, and happy birthday... or retirement... in advance. ashley: we have some breaking news for you, american airlines, an executive at the airline says the carrier is confident of getting the boeing 737 max up in the air this year in time for the holidays. that's a good development if that's true, certainly, for boeing and american. both stocks moving lower at this hour. let's get to gerri willis at the new york stock exchange for today's fox business brief. >> reporter: hey there, ashley. costco stampede being after entering china's shop, large crowd shutting down the big box retailer's first-ever mainland china store. on its opening day, thousands of shoppers flocking to the retail

giant's new outpost causing traffic jams in the surrounding neighborhoods. costco shares hitting a new all-time high on its door-busting debuted today. up 4.7%. and papa john's investors eating up the appointment of new ceo rob lynch. lynch joining the papa john's family from the arkansas -- arby's suite. struggling sales in the wake of controversy surrounding the former ceo's exit from the company in 207. that stock's up 8.8%. and rumors of barney's act acquisition, well, farfetched, the platform denying a new york post report that it would be filing bankruptcy. the post sources saying talks between far fetch and barney's were heating up. the story was, quote, incorrect. shares nibblely higher on the denial, now trading marginally

lower. and markets churning on the confusion of trade talks. coming up, what retail's biggest brands are saying right now. that's next on "the claman countdown." ♪ ♪

♪ ♪ ashley: the five-day forecast showing, well, shows rising tariffs, 15% tariffs kicking in sunday on hundreds of products from china. and get this stat, 92% of all apparel and 53% of all footwear imported from china will get hit with those tariffs. and by december 15th when the second round of new tariffs kick in, $51 billion worth of apparel, footwear and home textile products will, indeed, be subject to extra duties. our next guest represents hundreds of companies struggling to adapt to an ever-changing trade environment including iconic names like abercrombie & fitch, bloomingdale's and dillard's.

he is american apparel foot we're association ceo, rick shelfen bind joining us now. thank you for being with us, five days ticking down now before the next round of tariffs, up to 15%. what impact will this have on the retailers? >> well, ashley, as you said, we are five days from retail armageddon. the good will meet the bad. you know, i know a lot of the administration watches your show and, seriously, i hope they pull back on this september 1 event because if we get hit with these tariffs, this is a one-way ticket to retail ugly. and it will be very difficult to pull back. you know, china for many reasons is the largest supplier of apparel and footwear to america, and, you know, it's going to have -- [laughter] most of the a aa peril is going to get hit, and about half the footwear is going to get hit.

and this is our selling season. we know the president loves christmas. we know it. and we hope he doesn't want his administration to be the grinch. we don't make that much money, and 15% is going to take away the profits of retail ors, it's going to hurt us. we don't want to talk about that r-word because the r-word, the recession word, is not a great -- ashley: link, let me just jump in, if i can. how much of that extra cost is going to be passed on to the consumer, or are you going to try and absorb it? >> we're all going to try and work around it, but at a certain point, ashley, you have to pass it on. and think about this, all these goods are pre-ticketed, so they're going to come in at one price, and you're going to probably have to sell them at that price and leaves no margin for the retailers. we're in a really tough situation. you know, the other day the president talked about enacting ieepa is and, you know, telling

us to leave china. fine. you know, tariffs tell us to leave china. we get the message. but you know how long an exit would take? you're talking about maybe four or five years to get out. in the interim are, what's that going to do to the economy? so we're begging them, please, please, don't hit us for the holiday season. you know, there was all this talk about the phone call that -- phone call doesn't matter, who cares about the phone call? let's find out when there's a meeting scheduled, let's talk, let's everybody get back to the table and, you know, get this job done. ashley: well, rick, you know, the president has said that china, you know, to his point, has been essentially, you know, robbing the united states through all sorts of means -- intellectual property theft, forced transfer, you name it, they've been doing it, and the only way to even up the trade between our two countries is to hold their feet to the fire.

and short-term pain will eventually lead to long-term gain. >> well, the president is a master salesman, and he has done a fabulous job in terms of bringing china to the table. now let's move on, let's get something done. you know, the theft of intellectual property, the chinese have been working on that. the transfer of technology, we've been aware of that. none of this stuff is a surprise. and, you know, we want this resolved. the president could walk out of this being a major hero but only if it gets resolved. if it doesn't get resolved, by folks can't pay for it, and the american consumer can't pay for it. this is really a bad deal. you know, we talk about making a sacrifice to do a deal. i made a sacrifice when i served in the military. i don't want to sacrifice by ira. that's not what i was planning on. so let's, please, please, have calmer heads prevail, and let's

get this done. you know, we look at the retail index constantly, the srt index is now below where it was in december. that's the index on retail stocks. so retail is already under enormous pressure. ashley: just very quickly, rick, you know, the consumer confidence numbers -- which is so critical to this economy e -- continue to be very high. >> they were about flat in the last recording, which is great except for one thing, you know, people are working, and everybody wants to spend money, but the tariffs haven't hit the consumer, and they will on september 1. and that's the message we're trying to get to the administration. ashley: all right. >> pull back. give us more time. work this out. [laughter] ashley: we have heard your message. thank you, rick, so much for joining us today. we appreciate your time. all right, let's check that big board for you. less than 20 minutes to go before we wrap up the session. the dow still off 77 points at

25821 on the dow. from the c suite with love? charlie gasparino with new exclusive details on patrick burn' claims of intimate involvement with a russian spy and the federal probe that put her behind bars. this is a good story, don't miss it. charlie will break it next on "the claman countdown." ♪ ♪ i'm really into this car,

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♪ ♪ ashley: more than a few bombshells in former overstock ceo patrick burns' memoir. charlie gasparino joins us now with new lurid details. >> you asked me if this was the

weirdest story -- ashley: i did. you said not even close. >> i did some crazy ones back in the day. i don't even want to go into them. they're not appropriate. ashley: we'll get into this one, which is very appropriate. >> patrick byrne put out a draft memo explaining about, essentially, why he resigned from overstock. he says he was a government informant, and he was involved directly in the russian election meddling investigation. ashley: correct. >> and a previous investigation that involved she man gans on wall street, but more recently e this russian meddling investigation into the 206 election. and -- 2016 election. and his affair with one of the, an alleged spy that was part of that thing that's in jail -- ashley: put in jail, yeah. >> now in jail and his relationship. it's interesting, because this second memo adds a little more -- listen, here's the thing, i'm going to tell you this, people that are shorting the stock, betting it's going down say this is all smoke

screen, that overstock -- ashley: yeah, you said. >> -- and patrick in trouble because there are sec investigations, and it's heating up. ashley: this is a strange way -- >> i've looked at some of the filings. the investigation appears to be -- [inaudible conversations] doesn't mean they're being charged, and it doesn't mean this is wrong, but clearly, there is some smoke to the fire that there's an sec information of overstock and its cryptocurrency division that patrick started about two years ago. however, he's putting out this stuff, and he's saying this is why i resign. and it's fascinating. it's very cryptic at times, it's flamboyantly written. so here's the second memo, i'll just -- by the way, go to deep capture, my twitter page, you can get the whole thing. again, we had the rough draft earlier today when i was on cavuto. says he talks about his work as a government informant. he says he alerted the feds to a possible maria/donald trump jr.

meeting, and they basically said, you know, stay away, you know? let it happen, you know? ashley: okay. >> so they stayed away -- they told him to back off. he also says butina met with someone in hillary's circle before focusing her attention whenhe was, like, working on bribes, theoretically on the russians, on cruz, rubio and trump. he also says butina offered him a meeting with vladimir putin at one point -- ashley: wow. >> -- and the feds told him not to meet with putin because it was too dangerous, you know? [laughter] >> very james bond, isn't it? >> and then he says at the end, because, you know, he apparently broke up -- he had some affair with her and broke up. they were attracted through, you know, if you read the piece, it seems like they were attracted to, like, each other through mutual affection of milton friedman, you know? [laughter] you've got to read -- ashley: well, who hasn't been?

>> that's why i love you. a. ashley: thank you, charlie. [laughter] >> at some point they broke up, and the feds asked him to rekindle his relationship with maria butina, and they went full force into the russian probe in summer of 2016, right before the election. ashley: right. >> we do have an fbi statement here on patrick byrne. there are many things we don't comment on -- [laughter] this is one of them. ashley: big surprise. >> not planning to release a statement. i mean, just so you know -- [laughter] the fbi rarely gives you more than no comment. if you rea the other stuff, he happens to know a little bit about some of these investigations over the years. he says, you know, he helped out in the senate committees investigating wall street's shenanigans. he said one of his, he says one of the fbi agent as he had contact with, he said that's the guy that basically told them that his stuff has resonated

with the agency and that they've been able to, like, i guess get arrests out of it. that was the same guy that arrested raj rajaratnam -- ashley: oh, yeah, of course. >> i know who that age is that he's talking about, i'm not going to use his name -- ashley: no, of course. >> there's no way to confirm it -- ashley: give the agent a call and ask him. >> so he basically identifies that agent. now, it doesn't take lots to figure out who it is, i'm just not going to use names here. here's the thing i would say, there's two things going on here if you're an investor in overstk. should you care about this? please let me finish this. i don't think you should. you should worry about the company's finances -- ashley: because he's out. >> he's out, and this is just a side show at this point. you should worry about the company's finances, also this sec investigation and how -- and a lot of it involves the new crypto business that they started and public statements. it appears to be widening, that

doesn't mean it is going to widen. ashley: right. >> that doesn't mean -- they walk away from widen investigations. patrick tells me he did not receive a wells note about the files or something. so if you believe him, they're not about to file a case. so just those are the existential threats to your stock, not this. ashley: good point to make though. good stuff, charlie. >> it's interesting. ashley: we'll get together over some friedman later on, if you don't mind. the closing ebell rings in about nine minutes, how could umbrella ares on a sunny day and sunglasses in the rain help your portfolio? opposites attract and could lead to big profits. that's next on "the claman countdown." ♪ ♪ can i get some help. watch his head. ♪

i'm so happy. ♪ whatever they went through, they went through together. welcome guys. w. .

ashley: welcome back, everybody. lori laughlin and her husband exiting a federal courthouse in boston. this has to do with the bribery scandal getting their kids into

school. we're continuing to follow that story. meanwhile, closing bell five minutes from now. the dow gaining downward momentum. the dow off 106 points. tencent music stock hitting a sour note, one more pun, on reports after antitrust probe which is a streaming service which is controlled by social media giant tencent. gerri willis on the fox on the floor, on the floor of the new york stock exchange with the details. take it away, gerri. reporter: that's right, ash. this is a fascinating story. tencent shares are down more than 10%. why? antitrust regulators are probing the company's deal with top record labels like sony, warner, universal, giving exclusive rights to lots of their music. as a matter of fact, tencent has had a 31% surge in revenues as a result. and, remember, sony and

universal own a stake in tencent. they a public offering last fall. tencent is in talks to buy a 10% stake in universal. a lot of crossties. regulators in china are taking a look what exactly does this mean? meanwhile i want to talk about anthony levandoski, former google alphabet employee, charged with 33 counts of trade theft, stealing info from google to bring it to uber. each change, each charge that is, carries a maximum sentence of 10 years a fine of $250,000. a lot going on there. anthony obviously charged with 33 counts of trade secrets. that is an important story there. back to you. ashley: yes it is. gerri willis, thank you so much. financials are getting cooked in the august heat.

citigroup, bank of america, goldman sachs, experiencing double-digit loss this is month, despite all the red on the screen, today's "countdown" closer still seeing green in the big banks. we're joined by leo kelly. thank you for joining us in the interest rate environment, why are banks going down because they are getting less back on their loans? >> when you look at markets we have to get out of the trading mentality. we're playing same music, but much higher volume. people reacting so viciously to every market news bite. you have to buy sunglasses in rainstorms and umbrellas when the sun's out. what we're seeing is value. it is not just financials which is bakes, across the landscape there is value in the market. you just have to have the patience and the diligence and discipline to put capital where capital is scarce. ashley: and the intestinal

fortitude because when we drops like 620 points last friday, very difficult in such a volatile environment for investors to put that aside, pick out the stocks they will provide that resiliency and reliability? >> take a step back. not just stocks but, discipline in an entire asset allocation process. sticking to a plan. it is not a 2, 3, 4-day plan, it is a multiyear plan, stay disciplined. one comment on 600 point drop. ashley: yeah. >> that was vicious in 2018 when we're at 9 the thousand. today we're at 26,000, the point number gets a lot of headlines, increases a lot of angst, but those are not record high drops. i think for us we're constantly trying to tell our clients, be calm. ashley: we have a screen, what leo is looking at. democratic field to narrow, brexit, yay or nay.

central banks this september, fed will have a cut. third quarter earnings season and intervention in the dollar. is the bond market screaming to the fed right now, cut rates? >> the bond market is screaming to the fed, probably screaming a little louder than trump is about cutting rates. the fed really doesn't have a choice it is not about an inverted yield curve. ashley: yeah. >> what is it about a massive influx of capital over the last 10 years across the world from the central bank systems that totally distorted the yield market. as we go into the inversion, we see negative rates all over the world, the fed has no choice. they can't be aggressive. they have to start to pull back. ashley: we're already out of time. goes too quickly, leo. the market, the dow off about 100 points. that is going to do it for the "claman countdown." as we head toward the bell ringing. connell mcshane.

deirdre bolton will pick up "after the bell". deirdre: recession fears weighing on wall street. investors monitoring the ongoing trade negotiations between the u.s. and china. the dow ending down as you see on your screens lower there, 126 points. at one point up pretty high actually session but closing lower. s&p 500 and nasdaq ending in negative territory. i'm deirdre bolton in for melissa francis. connell: i'm connell mcshane. this is "after the bell." we'll have more on the big market movers. here is what is new at this hour lori laughlin, there she is, back in court this afternoon. the actress and her fashi