. this is "nightly business reports sto tumble to start the month after the new u report on the economy about the ime tra w. iths the economy. why now through the end of the year could determine who wins the white house in 20>. ome sweet home. a growing number of millennials are ready to buy homes and it could heat up an otherwise cool housingket. those stories and much more sstonight on "nightly busi good evening and welcome. well, september is living up to its reputatios being a rough month. we're only one day in and today was pmptty the trading day started with new

tariffs on u.s. and chinese goods, mark iing the latest elation in the long running twad war between the two largest economies. that and investor sentiment. then came a weak repor on manufacturing. its weakest read in three years, raising fears of a lowipwn and thatd sentiment further. investors loaded up on gold and u.s.ri trea. by the close, the dow jones industrial average fell 285 points to 26,118. nasdaq down 88 and s&p,20. seema starts us off from the nen york stock ex. >> wall street started on a down note as p sident trump had a new setf tariffs.ve ors are losing faith a deal will b b reach ed ed befor the end of the year. this as ofs yet to confirm a launcher round of trade ill

talks. stocks continue to decline after the index contracted frs the time in three years. due in part to t tariffs and th brr global slowdown. the dow jones dropped 240 points. industrials, many, led the indices lower as did energy and technology stocks like apple and amazon. september isistorically a bad month wall street. they're worried this september could be especialtough and worrr the federal reserve wil cut inrest rate tomorrow, investors will be epepg a close eye on the manufacturing data released from a number of countries and a speech from robert kaplin. >> trade was a majoroverhang on wall street todays it has been escalating tensions are gting trickier for businesses to navigate.

kayla has that story in washington. >> many m products leaving port in china and the u.s.he over weekend just got more expensive. u.s. charging 15% on footwear, clothes and certain tech products. china slapping te inng tariffs billion of goods. the truce u short lived as the two economic powers are back to tbattling over trade wit holiday season around the corner. >> he promised us now for a year short-term thing and we've gone along with it, not happen lyric but he keeps increasing. he's increased so much nown almost every product that consumer rs gng to feel it. in fact, businesses already feel it. >> the hit could have been worse. three sources say president trump wanted to double existing tariffs after learning of treasury secretary and the u.s. trade representatives enlisted ceo ts tok trump o of it. days later, secretary mnuchin

acknowledged trump wanted more. >> only secondse thought was mae he shod raise them many >> he said on twitter he'd be muchougher on china after the re-election. chamber of commercet saidng back to the negotiating table would be thr effective. >> i think it would have bn much better doing that than continue tog ratchet up ofet whs got the bigge available at the time. all going to be paid by american companies andsumerican crs between now and the enof f tof year. we should do better! a cndl between u.s. chinese officials slaed thursday did not produce any relief. the two sides had been discussing in person negotiations, b no date has been set. >> by the way,ater in the program, we're going to take you

roughly half the world's makes christmas lights and ornaments. we're going to see how things have been charged there by the trade war. when investors are not concerned about trade, they are worried about the federal forwr interest r res and that concyn will likuild ahead of its policyng mee later this month. steve liesman takes a look at what might lie ahead for the fed. >> the breeze investors feel is a global downdowft in interest blow that's expted t harder this month. on september 12th, the european and b onank meets september 18th, the federal reserve meets. both are expected to rreduce in rates or provide monetary policy easing. that could boost the japanese yen pressuring the bank of japan to cut and mark carney is holdingis fire before he knows how the u.k. is going to exit the european union. in an inteiew in jackson hole, he talked about the impact of

brexit and trade >> business investment is actually running 25 percentage ints below itstrend. business in the u.k. and quite reasonably said wait a minute, i'm goingo wait until if they have any exposure to eurr e, upstreamwnstredo, they decided to wait and see what are the new rules going on f that's partat's hpening worldwide. well, okay, i've gotur expos to chy these supply chain. let me see where this goes. >> there's a wide spread in global interest ratete china's central benchmark rate is at 4.35. u.s. at 2.13. pek. at just three quarters of a pe ent while eu is at zero and japan is nigh news 0.11. up 37 looked at by threuters, a net 14 cuts in august. that's the most in a decade. and that's up from eight nul cuts in and the seventh

straight mon of cuts from these banks. the fed is expected to cut rates in september and again in that could prompt another downdraft in interest rates. the question is if the economy of lower rate, enough said. the head winds from slower growth of a trade war. i'm steve liesman. zblncht there was some positive new us on the economy today. construction spending tked high er in july after falling more than 2% this year. acco t to the commerce dertment, government spending on schools, suers and the w ter supply picked up as did construction for single family >>homes. a key vote in the u.k. parliament tonight and a popontial major blow to the new prime minist. law mmakers mooued to take contl of parliament. a will held tomorrow whicd prevent the withdraw from the european union without a deal at the end of october. a so-calledreardt is something economi have viewed as a risk to the global economy.

slow trade, onomy, the fed, they conti to weigh on stocks as we begin september. what's it going to bring f investors? we have two market pros with posing views withus. barry, head of equity strategy at steeping. he sees tough month ahead for stocks. christina hooper thinks thema mas going to hold up well. chief global market strategist ato. invesc thanks for joining . ris christin christin epic volatility in august. if i'm reading your notes right, gou see thingsn settling d a bit? what do you see happening in september? >> well, i expect morevolatil volatility, but we could see a silat a lot of negative news flow. a lot of fluctuations in the stoct ultimately, finish the moh in fairly good standing. with stocks holding their own eossiblyng out gains.

>> barry, you think it is going to be a rough septber. we just detailed what's going on in theu.k. with brexit. that's anotherly in the oint in terms of global tensions out there. out and what role will the fed play? >> well to me, it looks like a game of two chickens, right? on the one hand, you've gotd t fed e d ade policy in the white house going head o each other and neither one wants to turn their car. so it's like a game ofchicken. the other hand, when you look at the market, it's a chicken with an egg problem in that eggs are going to have t break before the fede turns chicken enough t start whack iing those rates. the fed took rates up at the end of l 2.4% in a world with zero rates. it was just too tight f the rest of the world. and so many effect, the rest of ue world has sloweded dow.

we're probably going to see an the industrial secs weaker than we expected. it looks tough until we can convince the fed to really c those rates aggressively, whi they need to do. they're the biggest problem right u no. keeping thoseve rates a 2% onn th short end, which is way above the ten-year yield right now. >> barry,hat areou expegting this month? are you among those who would like to see 350 basis points cut in september? >> absolutely. i thino they need at least move towards what the futures expect. the market's job is to riot. until the fed adapts to what the rket expects. when you think b about ait, th fed fundsxpected by the futures market to be 1% at the end of 2020. they're at 2.1 now and not talking about anything like thar kind oe cut. so they need to movey fast. >> christina, you thiedou the can probably be positive for the stk market if indeed they do

cut rates, but what about for the economy. >> well i e cure fy. what' aili the economy. the only thing that can stop that is a resolutio to the trade war. but the fed does have in its arsenal, monetary policy toolsl that can be ver supportive of risk assets. look back to the global financial crisis a how wel stocks and other risk assets did. we could see a replay of that again where accommodative, monetary nepolicy, fed rate cut enable stocks to not only hold their but make some gains. so i'll ask you the same question. how much do you think the fed will cut rates this month? >> i expect fed will cut rates by 25 basis points.wi >> and wha the market's response be to that do you think? >> i think markets will accept it and we could see stocks move slightly higher. as long as the messaging remains

dubbish. that's really what's critical in septber. >> would you agree with that? it's the messaging, not the move? >> the messaging obviously and chairman powell's press conference would be very important when they have the september meeting, but the arter point i think would not be enough. i think the market would be disappointed. the other thing to consider is that all this talk otre war, the u.s. economy whahas called the domestic gdp is holing up well. the unemployment exceptionally low. the real problem is the sp international. a lot of the global companies in l index, they're f sufferin it. so that's why it's important. >> we must move along, but a co you. thank you.rr and steve with invesco. thsks for joining u tonight. >> thank you. it time to take a look at some of today's upgrades and downgrades.

snap, the parent comf snapchat was upgraded to up outperform. the analyst citeshe company's move into gaming. price target is $20.e it r 15.93. sq re wasupgraded to buy from hold, but the investor points the card readers to attract new customers. target is $80. the stock fell 1% to 61.13. boston beer was u downgrade erperform from hold as jefferies today. th cited competition in he hot seltzer market. ock fell 6% to 411.10.'s amazrice target was raised to $2600 from 2250 by rbc capital markets. shipping shinitiative.e one day the firm has an outperform rating on the stock and amazon rose a fraction to 1789.84.

coming up, open house. some millennials are jumping into the real estate mrkt a sar itwing up in h google may be the next target. according to the "washington post," m the nation's attney general cou announce an investition next week. many states have been critical of google for its handling o user's personal information and its searches. over the summer, the department of justi t announced its own broad review int big tech. >> walmart is scaling back its

firearms sales. world's larnlest retailer said today it's going t stop selling handguns and certain types of ammunition and it will no longer allow customers to ope ly carry firearms in its stores while they shop. doug mcmill p said the shift was aesponse to the fatal shootings in two of his stars last month and he admitted walmart will likely lower its market sre from 20% to 6%. shares of walmart rose slightly in today's session. the shares of gun makers and firearm retailers fell in there are reports tt new delays could keep boeing's 7 max grounded into the holiday travel season. according to "the walltreet journal," a tense meeting last month between boeing and internationalegators has pushed out the jet's return. as we reported, united pushed back the max's return into december and american made a similar announcement over boeing was the biggest drag on the dow index today falling more

than 2.5%. home prices h been cooling off much of the year, but that demand is rising again.. especially among one segment of millennial buyers. diana oleic explains>> hey may have waited longer than other generations, but older millennials a finally buying homes and at a faster clip, more than a quarter said they want to find a home by next year. that may be reigniti ther firee unome prices. home price gainsinad been shrioverad the year, but gains turned higher again this summer. home prices were 3.6%igher in july comparedul with 2018. that is wider than the 3.4% gain in june. core logic is is now pdicting a larger p 5.4% annuce gain by july of 2020.

there is though a massive imbalance between supply and demand. especir end of the market where demand is stronges that's where supply is leanest. sales on t low end fell ju10% in because there was so little for salele sales surged higher in the move up market where there are more listings. likely comes would on the market in early fall before the winter freeze, but given the strong demand, it is unlikely to be renough. "nightly business report", i'm diana oleic in owashington. ks a new leasing deal withn with ameripower. that's where we begin tonit's market focus. the m leasing deal streamlines wireless distribution at the u.s. sites. it will also help at&t's deployment of 5g and other next generation technology across the country. american tower shares ros more th 3% to 237.84. at&t shares were up to 35.38. khan's saw a boost in new store

offerings favorable credit performance. that helped the company top expectations. they also plan to expd their presence with more locations in the next fiscal year. the sck rose more than 18%. 23.85. bio pharma firm the medicine company said late stage trial of an experimental drug showed lowering level of bad cholesterol. the dru which is used twice a year was tested against the placebo in patients witheart disease. shares of thee medicompany rose more than 10% to 46.3 therapeutics and roche have extended the $4 billion offer for the gene therapy firm asulatory reviews coinue. that extension hundreds until october 31 after the onbell, t foods said it is lowering its full year guidance due to a number of factors including marketli vola, a boef processing plant fire and slower expected operationa

proouchlts in its chick ben brand. shares dropd this evening, but they csed the regular93ession up a9. and hedge fund star board value says it's going to bes taking a more than 7%take in cloud service provider x. they call the shares understood valued. gest makes it the second l shares rose in initial after hours trading on that news and closed the regular session at.8 as the calendar turns to omptember, so does the focus on politics because say what happens to the economy between now and the end of the year could determine the outcome of we're joined frohington by ion. mark avalon, president of potomac economic advisers and john harwood. mark, what does history tell us about how important th economic

performance is in this latter rt of the year as it ptains the election? >> well that's certainly as we to be the issue.20, it's going the kitchen table blpic. that filies talk b about and the unemployment rate anndwage growthhe outlook on thy i going biggest driver. that's why there's so much pressure right now on the trump administration to reach a deal with tariffs because as w heard, that's the issue driving the fear in the markets and that's what'srklowing global growth. >> of coursehere's been talk of maybe a tax cut of some kind. a payroll tax cut. the president has said the things that remember rosspe perot used the call the free candy that politic to hand out at certain time of the year. is there anything the administration can do to balance the slowdown in the econy if that happens because of the hetrade war? i thiig e thing the administration could do to help itself economically would be to 'rll a cessation to the trade

war. in a very dangerous point for the trump white house. because americans perceptce of where the economy is may be changing right now. we've had the backdrop of the entirerump presidency, the idea that markets were rising,s the economy owing in a robust rate. wages were rising. especially for people at the bottom. but we saw a poll last week at showed for the first time in a long time, a plurality ofeople likely to get worse in the next year than better. and if all of a sudden, the backdropor the trump re-election campaign is a slowing economy or worse yet, one that's in recession, all bets are o t becausen the culture wars diminish inn nognificance and the e becomes a driving factoto his detriment. >> manufacturing contracting sharply and you also make the point, not just the tariffs and tr china, but whatever admdmtratio says europe in terms of ade.

so it's a two front. is is it not? >> yeah, and that's what's co me at least in terms o why not align with our allies against china. that would make a clearap land for an early resolution. the china trade war is trickling in e emerging economies, creating a global slowdown and while we're not the manufacturing onomy, it is a growing importance. it was thring early in the first year or two of the trump administration, so we'reeeg everything being suppressed now. whether it's emerging countries growth. developed europe growth. some pogts at home and i think johnntade a good p as the year turns closer to th t election, how people feel about the economy is going to be just e timportant if not more >> gentlemen, thank you very mu much.

>> good b to be here. christmas village is trying to stay jolly during the trade war. zblnchs in the. in the news tonight, hurr tane dorian it' already affecting a number of businesses. airlines have canceled 1400 flights. n shut rrts have b down lines could see a t reduction of five creents cer she beccellations

and ubs says the hurricane could cost insurers about $25 billion. but share of those did move higher due to the stors changing path off the coast. members of the united auto workers union granted union during contract negotiations s.th the big three automakut the union said about 96% of members support the action. gm will lead the negotiations which come amid union corruption, which we told you about last week. the industrs also grapplg with slowing demand and rising trade tension. finally tonight, if you own christmas lights or ornament, chances are they were made in a small town inchina. it's known as christmas village. but u thi year with the on .oing trade war, there n't a lot of holiday c >> it's5 christmas 36 days a

year. this eastern coastal city makes roughly u half of the world's christmas decorationdecorations. buyers come from all over the world to meet t manufacturers here and aome for everything from artificial trees to dancing santasas they say orders have been priced and shipped for this year with new tariffs, they're scared about orders for christmas next year. some estimate they could drop by 10%. the christmas industry is sa a alow margin busines the factories believe that the confrontation with the u.s. will last for another year orwo seao they're lng for ways to survive and have more flexibility than you might think. some are thinking of moving production to lessural parts of china where land can be b a tenth of a cost and labor 40% cheaper. they're also looki for to expand businesses in markets outside the u.s., europe, latin america, the middle east and southeast asia. for many year, the u.s. only

makes upto 25% of their sales. in the short-term, they're look working out with theiro customs going to eat the riffs. some of the manufactures say they'r a orbing 3 3 p to5%. they say the b cost will shared with american retailers and consumer here's another look at final mbers from wall street. nasdaq down88 s&p 500 down 20. that's "nightly business report" for tonight. thanks for swrojoining us. >> have a great b evening. we'll see you tomorrow.

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