david w: coming up, honeywell bux trade tensions. the company -- honeywell bucks trade tensions.ts solid revenue earnings. more next. this is bloomberg. ♪ david w: it's time now for the bottom line, we relook at three companies worth watching this morning. first up, netflix came out with earnings after the bell yesterday, and disappointed, particularly on lack of growth. they lost subscribers in the united states. they are down 11% almost in the premarket. which you"the crown," love, is apparently going to save them. i'm watching blackstone, their ing estimates. they had $41.5 billion in the second quarter. that is really putting it on page for the goals for the year. that is so much money. we just saw yesterday $11 billion raised for a secondary fund as well. the third company we are watching today is honeywell. for more, we are joined by brooke sutherland. the numbers look good, particularly in the space, but your skeptical? brooke: i am little bit. raised earnings guidance, but not as much as anticipated. when you look at their third quarter guidance, they are calling for 2% t

yesterday bloomberg's story about safety honeywell down five. now it comes back.? it's incredible. as the call goes on, boom, it takes off. let's be aware it's the call that control, not the headlines. but most people don't want to wait >> netflix, we'll touch base on that one obviously one of the worst performers in the s&p. down 10% reid hastings did talk about the degree to which they're poised to face competition later in the year and next year take a listen to that. >> a lot of new competitors enter over the next year i think our position is excellent. we're building amazing capacity for content. our product's never been in better shape our rate of investment is extremely high if investors believe in internet television, which i think is an easy one to get there, then our position in that market is very strong >> so now when you see analyst calls on netflix, there are literally tables of every show they have slated for the coming quarters it's all going to pivot around that >> i don't like it how long did it take bob iger to convince people you should buy on

the ceo was explaining how honeywell's aerospace business is stronger than expected.ee times larger than safety and productivity segment, bingo. that's how you get a fabulous snap back and the stock closes up 3%. what can i say if you try to trade stocks on the headlines, the market will make a fool out of you it's humans writing stupid headlines. sometimes it's pure pen action amd remains my absolute favorite it caught a rare downgrade from mizuho that downgrade gave sellers ammo to wreck the whole group as a result, lrcx my fave equipment maker not a semi company, but equipment maker got slammed. big mistake. why? another semiconductor named asml made a bold call in europe the bottom is in for this segment of the industry boom lam came right back up, the stock gaining 3.4% one of the biggest changes from down to up i've seen in ages anyone who sold the stock off amd downgrade, you're an idiot, a chowder head >> chowder head. >> i don't know how many different ways i can say this. don't mess around with premarket trading, sparky. don't buy or sell based on earnings u

you mentioned honeywell, ibm, look at philip morris, this is a stock that is still yielding 5% tradinge s&p 500. they are moving into things like e-cigarettes right now which are a new growth initiative for them. it's a cheap stock, reports good earnings and the stock rallied 9% yesterday. why spend your time in a stock like netflix when you can get a good quality company paying a great dividend at a discount to the market and you see what's happened with a name like that and a name like honeywell. charles: when it's a company or stock that's not so obviously overvalued or that's not so high beta, such a volatile stock, and it still gets hit, yesterday ibm was down before it turned higher. there are a lot of names like that. how does an investor, people watching this show, how do they grapple with that? >> yeah. you got to remember, charles, there's a lot of different time frames and you know, motives for people, why they're buying certain stocks in this market. i think as an investor, a long-term investor, you have to be that, not a trader. at the end of the day, you have to look for

first we go to jack in new york and ask whether he should hold honeywell. >> he should as i am as well number one industrial, incredibly disciplined company they understand valuations are rich right now. they'll do buy backs, take a spin. >> josh wants your opinion on slack. >> i own the schrotock, it had a huge first day, a direct listing, no underwriters pushing it, it was just pure demand. stock has a very, very high val valuation, however there are other companies in the same space with high ervaluations in terms of price to sales. i like the name i think they're going to do well i think the first earnings report will be interesting and determine whether i get a chance to add some at a lower price which is what i'm hoping for. >>> donald in las vegas, should i hold off on buying boeing until the 737 max is back in the air. >> i expect at some point those babies will be flying into the airport. bottom line, my actions speak louder than my words i bought about a month ago at 341, i think you should do. the market anticipates things. so by then it's too late recognize this is one part

honeywell is a much better run company at this point. some issues but i think it is a good company >> let's get to the uk decision on the next prime minister let's see what we are going to find out here. this is the announcement is imminent >> the total number of ballot papers rejected was 509. the total number of votes given to each candidate was as follows. jeremy hunt, 46,656. boris johnson, 92,153. there for, i give notice that boris johnson is elected as the leader of the conservative and unionist party [ applause ] >> thank you, very much. thank you, very much thank you, very much good morning, everybody. thank you. [ applause ] thank you, everybody thank you, gerald. okay, everybody. okay, good morning thank you, so much thank you, sara. thank you, charles thank you for a fantastic well-organized campaign give a lot of credit to our party and our values and our ideals i want to begin by thanking my opponent jeremy. absolutely for midable campaigner, great leader and great politicians. in the course of 20 hasting style events it wa

i'm in honeywell and copart. i'm mining for industrial names all the time i can't. >> there's a scarcity. we know that >> i'd love to buy -- 3m >> it's so hard. this time he talked about the earnings the groundwater issue was addressed very well. i thought he did a good job. >> as always, there have been stocks that have continued with momentum after, and there have been stocks that ran into the earnings, facebook among them, 3m another, they run to the earnings, post up a nice premarket move and it's gone there are a bunch of software stocks today that are getting slapped, even though they have put up good numbers. >> yes >> mostly the sector has been very strong. >> the story of positioning this quarter it seems >> yes, and for whatever reason. the people running the large portfolios are hitting sell buttons on those as soon as they get that, even a stock that we'll talk about later, mylan. great news on several fronts stock popped as much as 27%, 28% in the pre, and then whack, they took it away like that if y

there wasn't anybody -- last week the best quarter that was reported was honeywell and they just acknowledged, listen, if it weren't for aerospace, there's a slowdown everywhere. aerospace is bailing everybody out except for boeing because of the max. but there's really a definitive belief among housing executives, among retail executives, bankers, that that last quarter point should be retracted. they have got to do that the president hurts his own case can't he just focus on mueller and fake news? does he have to intrude? he's such a broken record. >> he's paying attention >> but he's going to get -- he used to love getting a 10 on "the pprentice." this is like an 8. not even winning the night with that you've got to win the night, president trump. >> energy has been july's worst sector, but could move up today in the rankings on this jump in crude oil prices following the ramped-up tensions in the middle east over the weekend as you know iran released some video over that british ship seized by the revolutionary guard. the government is expected to announce its next steps in a speech to pa

story remains the same for other seminductors and industrial names including manufacturing giant honeywell chip maker taiwan semiconductor. both will report results on thursday. for "nightly business report", i'm bob pisani at the new york stoc> exchange. il prices fell today after president trump signalled progress with iran and said that he was not looking foran regime in that country during a meeting of his cabet at the white house. secretary of state mike pompeo said that tehran was ppared to negotiate on its missile program, and those comments poind to an easing of tensions which then sent oil prices down by about 3% in today's session. >>> and time n to take look at some of day's upgrades and downgrades. dow comnent home depot downgraded from hold to buy at cabelli.na thest cites the stock's valuation and the firm notes the current stock price reflects above market growth. the stock fell a fractio to 217.26. parker hanna fin was downgraded from sell t neutral at goldman sachs. wn innalyst sites a slow the industrial sector. the price target is $150. now, despite the downgrade the sto

his oil minister has already signed multibillion dollar deals with international companies such as honeywell eggs on and shell unfortunately because of those who were delayed and that's why really the guys and us who was lagging behind. we are concentrating on this and the possible use to burn more 50 per cent 2 years to 3 years ago well. 55. $45.00 i want to be realistic or the 5 years will be i would say there are big. and this of course will lead to many advantages one of course a whiting gods for power generation that will definitely make. energy independent who don't need to import and of course. you know all that. maintaining a gas field under $46.00 degrees is anything but easy but these iraqis are making sure that they continue to pump the gas which helps run their country besides the gas needed for electricity these gas fields also produce other types for domestic use and export 75 percent of the. l.p.g. come from this. the facility which is more than 25 years old. is being renovated it's electric instruments. to do these upgrades requires major investment rox government says despit

his oil minister has already signed multibillion dollar deals with international companies such as honeywell eggs on and shell unfortunately because of those who were delayed and that's why really the guys and us who was lagging behind. we are concentrating on this and the possible use to burn more than 50 per cent for 2 years to 3 years ago we are now at that i think about $55.00. $45.00 i want to be realistic for the 5 years that will be i would be there to say there would be. those of use you know ok and this of course will lead to many advantages one of course a white in gaza for about a generation that will definitely make. energy independent we don't need to import and of course and instead of burdening we can make you know i've been you know that with. maintaining a gas field under $46.00 degrees is anything but easy but these iraqis are making sure that they continue to pump the gas which helps run their country besides the gas needed for electricity these gas fields also produce other types for domestic use and export 75 percent of it they provide petroleum gas or l.p.g. come from t

honeywell concerns about global supply chains your all >> and uptown to bertha coombs for a look up thereness in chips and software names faang names were fair any floot. an interesting mix considering that you had both facebook and google getting grilled on the hill investors didn't seem to notice that apple took a tech lower when the president talked about chinese tariffs. but we still had a number of stocks at all time highs and a number of different types of sectors. roku all-time high casella waste also back to you. >>> still to come, the most valuable gold coin right in front of this building we'll head outside for a look at this gold coin >>> and u.s. stocks taking a bigger slice of the pie. what that means for investors. that's what happens in golf nothiand in life.ily. i'm very fortunate i can lean on people, and that for me is what teamwork is all about. you can't do everything yourself. you need someone to guide you and help you make those tough decisions, that's morgan stanley. they're industry leaders, but the most important thing is they want to do it the right way. i'm real

his oil minister has already signed multibillion dollar deals with international companies such as honeywell eggs on and shell unfortunately because of those who want to delay it and that's why really the guys and us who was lagging behind. we are concentrating on this and the possible use to burn more about 50 per cent for 2 years 2 or 3 years ago where now we did i think about 55. $45.00 i want to be realistic or to 5 years that will be i would dare to say there would become.

>> take a look at honeywell. big dow component. they came in, beat light revenues guidance for the second half of the year, raised the full end. that stock is trading to the upside elsewhere, if auto business is in trouble globally here, genuine auto parts way below expectations, auto retailers, advanced auto. o'reilly they're all trading to the downside tough situation for them do you know how complicated the situation is look at ppg. coatings, airlines, all sorts of things, boats all over the world. solid growth in aerospace and marine but sluggish in automotive higher ra material costs, selling costs are higher this is a very tricky earning season back to you. >> thank you, bob. shares of philip-morris surging before the bell. hi, frank. >> hey, guys philip morris on pace for its best day since 2008 after it beat on eps and revenues, raising full-year guidance for its heated tobacco product expected to compete with e-cigarettes fda approved eikos, nicotine cigarettes with fewer toxins core business globally, those fell by 3.6% v

into your local bodega or your bank and see a camera in the corner and it's labeled panasonic or honeywelltually, it's a chinese disguise. a further complicating factor is federal agencies don't have the software to see what kind of devices are connected to the network's, how many there are or what type they are. they will have to remove them manually one by one. paul: the trump administration has been clamping down on chinese technology companies like huawei as well. why video surveillance firms in particular? it was because of this growing -- the fact that china is being seen as this growing threat economically, politically, and technologically. initially, it was huawei and huawei powers the chips behind a lot of these cameras, 50% of video surveillance cameras worldwide, so these companies have been throwing in with huawei at the same time. operatives could be identified as someone watching federal agencies, for example. right, tech reporter olivia carville, thanks for that. of next, we will speak with cisco's vp and global innovation officer about a recent acquisition and push into 5g.

it is ge, honeywell, 3m, john deere. we were talking about siemens in germany because of the poor german factory orders. some concern about the economy, which does not square up given the good jobs number. i guess that is what makes markets. all over the place today. david: thanks so much to taylor riggs. coming up, is good jobs news bad news for democrats trying to unseat president trump? we talk with a senior economic adviser to president clinton and president obama. that is next and this is bloomberg. ♪ david: this is "balance of power" on bloomberg television. i'm david westin. we turn to riddick a group to for first word news. >> payrolls rebounded in june and be all estimates from economist. employers added 224,000 jobs in june after downwardly resolved 72,000 the month before. .1% tomployment rose 3.7%. nato says russia is showing no sign of respecting a major cold war era missile treaty. in february, washington began the six-month process of withdrawing from the 1987 intermediate range nuclear forces pact, blamin

honeywell, which makes the screens, says it is unaware of any issues.g says it has not seen any issues on aircraft. that is frightening. genetic counseling could be key to good health. several commercial labs already offer genome sequencing for sick patients. a new trend is focusing on health. boston's brigham and women's hospital opened its own genetic clinic to catch conditions early while they are treatable or to prevent conditions from ever developing in the first place. bloomberg spoke with a genetic s counselor about her role in the latest edition of bloomberg's next job series. >> from the moment we are conceived, our genes encode in us every instruction our bodies will ever need. these genes build our organs, our muscles, our brains. they help us grow and keep us healthy. but the tiniest deviations often -- also make us sick. many of us are carrying these deviations without ever knowing it. and this woman wants to find those problems early, before it becomes too late. out.y name is kerry blo i am a preventive genetic counselor. s, in the early 2

among the companies mentioned for a possible left list, -- raytheonneywell and honeywell. business flash. nejra: thank you so much. jay powell last week left it all but certain that the fed will reduced interest rates this month for the first time in a decade. chicago fed president charles evans said friday a couple of rate cuts may be needed to bring inflation above the 2% goal. jordan rochester from number a -- from the mora -- from nomura and david riley from bluebay asset management are with us. is it time to take some profit on the longer end, say 10 years and further out? is some do think there potential for further steepening because i think the u.s. economy is in a pretty strong state. i think some of the fed speak we've been getting, and we get , are goinghis week to start pushback on the amount of fed rate cuts priced into the market. they are going to deliver july, as you alluded to. i think another 25 basis point cut is then fairly likely, but i do think they will then try to pause and see how the data evolves from that point onward. the market is still pressin

but interestingly if you look back about ten days ago, honeywell, large industrial conglomerate reportedsappointing outlook but the shares still went up 3%. i think it's a reasonable assumption the market has priced in slightly less optimistic forecast at this point. >> indeed. i was looking at some of the numbers here, the biggest epsb come from tech yet again that sector, that industry continues to bring in the numbers. and despite widespread skepticism about the numbers that the tech, the big tech can come out with and a whole slew of regulatory issues the numbers are still there. do you think that the tech sector can continue to grow in this environment where, you know, people are talking about a slow down in the economic growth backdrop >> i think we're in a golden age of technology innovation in the u.s. as american corporations are under a lot of pressure to streamline their operation, boost efficiencies and to deliver better earnings for shareholders so from what we can see from cfo surveys, the intention to continue investing heavily in technology is still there and there are so

honeywell delivers yet again. the company posting solid sales growth.e ecb rethinks inflation goals. the central bank will study a ,evamp of its inflation targets bemoaning the limits of monetary policy. welcome to "bloomberg daybreak" on this thursday, july 18. lonely here in new york. david westin ditched me at nbc. [laughter] david: there's this fascinating report you flagged about the ecb reportedly rethinking its inflation target us morning. alix: you some money flooding into european debt. you saw a little

honeywell and ingersoll-rand nobody is excited about this group. steel stocks acted better before the tariffs that are supposed to protect them for heaven's sake. today's lack of enthusiasm for the trade true sure didn't help. the papers and chemicals, they have become some of the worst performers i have seen in my trading career all right, how about the once red-hot aerospace sector if you're hanging in there, boeing is a dog. oil is a group you can't give away take, bp please had to here's a company that had a tremendous quarter, good growth, solid. 5.9% yield, yet the stock seems cemented at had 42, except when it falls to 41 the oils are unbearable to own this group, my late mother, would say is -- from hunger! airlines hit or miss sure, the rails are acting better, because they're all becoming better operators. not because the businesses have suddenly decided to be revalued as commerce place. how about eps. these former market leaders have turned into losers tariffs. are we too bullish about the auto industry? come on. have you seen these valu

plus we'll hear from key companies next week like jp more began, netflix and honeywell will earnings keep the valrallyn track? and a double downgrade for one stock. the "halftime report" begins right now. >>> welcome, good to have you with us. we have our investment committee at the table we begin with the markets, stocks higher following two days of system by jay powell who laid the ground work for a rate cut later this month the attention now turning to earnings which begin on monday i feel like we've got this halo effect from the fed that will last a while >> you sure do and it is interesting the market is taking a bit of a cyclical shift if you look at what is leading the market so far, it is energy, communication services, technology, consumer discretionary. so the defensive bochbd approximabond approximate is city m proxy mentality has moved away if the expectation is so low, everyone including myself saying, well, okay, here comes earnings it will probably be better than we expect and all the other perceived head winds we've pushed out of the way. it would be remarkable if ear

we've got honeywell that will be reporting, jpmorgan, netflix.nk in terms of the catalyst, that's going to be our near term catalyst to see what they say. they are expecting a decline of 1.8% in earnings. the bar is pretty low. i think if people can come out and forecast something a little bit better than expected, that could give us that next leg up. i would be pretty happy to see if we can close above 3,000 on the s&p today. charles: scott, i got to tell you, the pe ratios are nowhere near where they normally are when the market's at all time highs. does that give you some confidence we can go substantially higher if indeed earnings come in better than expected? >> it does. tell you what else might be interesting and some fuel for the fire that rob kind of lit there, is let's watch what happens with bonds, guys. the news is out on bonds. we talked about this in the first segment early glier in th hour. the bond market's led the fed down this primrose path if you want to call it that of cutting rates or being more dovish. now that that news is o

looks like the consensus is wrong, we've had some good ones for the show, stocks like chipotle, honeywellamd, just to name the recent winners but it's a fraught process and i know it. we have whiffed on footlockers how about kohl's how poorly we did? they thought too much, it's below where i thought i liked it he didn't believe anadarko was as bad as it was we got bailed out by a bidding war. you can't count on luck to rescue you from your bad decisions. so with that in mind, let me give you some time-honored rules to help you handle earnings season, now that it is just kicking in first you need to understand there are 12 weeks a year with a flood of information, earnings season, so much information that you simply can't do a decent job of analyzing companies on the fly. i always tell my wife, lisa, make no plans for earnings season we even had to wait on our honeymoon because of earnings season it wasn't as bad for business trading and block of alcoa while my daughter was born or trading union carbide options the day my mother died. in the words of joey brown, nobody's perfect it is not

companies that basically said guidance was okay in the second half of the year ebay and novartis and honeywell. that was a surprise. those are pretty good companies. i think the market is fine right now. i'm just worried about whether global growth slips a little more in the second half. >> we're still waiting, nancy, on a lot of numbers. earnings season is just in its infancy. but tonight there's not only a big company out there, but there's a big company that you own that's releasing numbers and that is microsoft. does microsoft, a, is it a good value for your clients and their money and, b, does it really have the power to maybe move the macro market >> yeah, good to be with you, brian. and hello to bob listen, the stock is still relatively attractive on our valuation metrics, but sales growth has been faster than price appreciation so you have a stock that is still attractive it's all azure all the time. growth has been about 70-plus percent year over year we expect them to come in, in the mid-70s this quarter i don't think -- i think the company beat on earnings and revenues i don't think

industrial names with exposure to china that are leading the dow higher, 3m, southern, norfolk southern, honeywell all higher by nearly 1%. president trump also surprising the market with awayway concession and that's lifting shares of chipmakers that have ties with the chinese company and looking for companies like alibaba moving to the upside but it's worth noting we have certainly seen this story before in december 2018 when the s&p 500 rallied on top of a truce but quickly reversed course due to a lack of real progress dow currently up 77. kelly, back to you. >> seema, thanks >>> let's get more on the stocks surging on the trade truce, but there's still plenty left to work out before there might be a deal we were there for the g20 and back in washington kayla, how much progress is there? >> the open-ended nature of the road ahead is something to be considered the white house has some big hurdles to clear first it needs to sell official washington on what was brokered in osaka, particularly democrats have criticized the president's relaxing scrutiny on huawei but republicans too have said we do

i would argue that honeywell probably belongs in the bucket too.rporate america who is adopting this technology and maybe getting it right and who isn't? >> jpmorgan, bank of america international services in health care and in manufacturing, 3m. caterpillar, shell baker hughes is huge in digtization of oil and gas worldwide. so - >> you mentioned jpmorgan, what about goldman sachs? david solomon has said that it isn't valued like a tech company but maybe it should be. >> i have to talk with david about this, but you can't count goldman out. they understand technology i would be amazed if they're not at the leading edge of this trend. >> another company, a great ship, which is ibm they have been trying to complete this transformation for many, many years first it was ai and watson, now they're shifting to the hybrid cloud -- not kind of, but they're shifting to the hybrid cloud. are they doing it right? are they able to complete this transformation >> candidly, i think there's reason to be concerned about ibm. ibm is a great national treasure they

his oil minister has already signed multibillion dollar deals with international companies such as honeywell eggs on and shell unfortunately because of those who were delayed and that's why really the guys and us who was lagging behind. we are concentrating on this and the possible use to burn more about 50 per cent 2 years to 3 years ago well now we're through i think about 55. $45.00 i want to be realistic or the 5 years that it will be i would dare to say there are big. flows that use you know ok and this of course will lead to many advantages one of course a whiting gods for power generation that will definitely make. energy independent who don't need to import and of course and instead of burdening will make you know that. maintaining a gas field under $46.00 degrees is anything but easy but these iraqis are making sure that they continue to pump the gas which helps run their country besides the gas needed for electricity these gas fields also produce other types for domestic use and export 75 percent of the provide petroleum gas or l.p.g. come from this but it is the facility which is

. >> honeywell, this is an industrial company. >> j.d.ause of the shopping fe festival they created. >>> before we go, i want to take you back to hong kong. live pictures there. thing as peer to be a bit more calm but an hour ago you saw riot police clashing with protesters there. things seem -- the violence seems to pick up a little bit. we will continue the follow the story. i know "the exchange" and kelly will and that show begins right now. >>> thank you, scott hi, everybody, and yes, here's what's ahead we're closely following the breaking events in hong kong police clashing with protesters. how much does this complicate china's deal making with the u.s. and do stocks get too excited about the trade truce at the g20? we'll ask. >>> and new reports suggesting the doj is seeking documents on other boeing production issues, this time involving the 787 dreamliner we'll have those details >>> plus out of tune a shake-up in the music business has a major star crying fo

plus we'll hear from key companies next week like jp more began, netflix and honeywell will earning

honeywell raised the full year earnings forecast as well.ares of philip morris international they came in with better than profit sales and boosted the four-year forecast the heated tobacco products internationally. a strong part of philip morris business back over to you guys. >>> netflix reported quarterly results missing on revenue and subscriber ads the stock down over 10% him tom rogers, former ceo and executive chairman is also of course a cnbc contributor, good morning what do you think really happened this quarter? is it just a blip or does this say something much larger than the streaming wars >> that is the question. this is a management credibility forecasting issue or is this a fundamental business model issue? i think it's the former. and the team doubled down on projections. they said, look, we are going to beat last year's total subscriber ad, meaning there is still for the year going to add 30 million subscribers or so just to put that in context. in the united states, it took hbo 30 years to get to 30 million and they're sti

and try to support that, again, is that space and rocket center, space camp, and space academy, honeywell and other aerospace companies send it pay for teachers to come to space camp. i make a special room on my calendar to go out and talk to those teachers when they come in . my goodness, they are so enthusiastic about the space program. the neat thing about a teacher, yeah, we can teach a young person at space camp and space academy, and they will have all this knowledge, but if you teach a teacher, my goodness, you think of the hundreds and thousands of students that they then are able to pass this knowledge along and the enthusiasm for the space program. we must never forget our teachers. god bless them all. >> thanks. >> thank you. >> senator gardner. >> thank you, thank you for hosting this hearing. this is a pretty incredible panel for a kid who grew up on the eastern plains of colorado and who wanted to be an astronaut. i failed miserably at that. but i will never forget the letters that i wrote to nasa in the pictures i got back from nasa. there's a reason people wrote to ask abo

there were reports that the likes of honeywell and raytheon could find their products boycotted becauseat taiwan arms deal. alix: not only that, but the broader push from the government to have companies use local manufacturers. basically, some of the lower end anducts from deere caterpillar are coming from inside of china. same thing with chipmakers. you are sourcing it internally. that is the thing. david: buy american has a counterpart, buy china. david: it is a real threat --brooke: it is a real threat to fedex and ups. alix: denise chisholm of fidelity is still with us. how do you look at this? denise: the fundamental data has been quite poor and a fundamental driver of the weight on the stoxx over the last year -- on the stocks over the last year. investors, asfor much as this seems to be the time when you don't want to own them, this is the opportunity. these are the quartiles of these fundamentals where you actually have 70% odds of outperformance, in conjunction with the fact that we are seeing easing industrials as a sector and transports are one of the key beneficiaries. alix

energy on some new opec output data industrials, though, 3m, caterpillar and honeywell not holding up well. back to you. >> we've got just 51 minutes left of trade. stocks just lower. we're down bio.15% on the s&p. nasdaq down 0.1% briefly flirted with the flat line but not quite going positive any positive close for those would be record all time closing high let's bring in head of suntrust advisory service and vice president and director of economic studies at the brookings institution. very good afternoon to both. michael, you don't think there will be a rate cut in july >> i think it's a little too early to talk about rate cuts in july particularly since we didn't get the inflation data that's been mentioned here in the last few minutes it's just a little early for that >> your base case is no action for the rest of the year at all or just not necessarily this month? >> not necessarily in july we need to get a little bit more data the fed really is data dependent but that data dependency >> stephanie, where do you fall within this rate debate? >> i think i agree you know, the repo

have you seen that >> i haven't >> 42 down there david, the growth here in aerospace is the same as honeywelle is an article about how everyone is being hurt by boeing, an article that is an ever green piece the companies that are involved are not. i want to hear what lockheed martin says about turkey i'm more concerned about turkey than i am about -- >> yes risk to the f-35 after turkey bought that russian air defense system >> how did turkey become so integral >> big customer. >> jim, overall, got five big players raising guidance for the year i assume you do not want jay powell to hear any of this. >> in, jay has to turn this off. >> mute the tv. >> well, jay's got -- >> otherwise the rate cut is a risk what do we do then >> it is all about harley, jay it is all about harley. >> fastenal. >> basf. >> the job, everybody -- if you go and talk to greg hayes, every single thing is down a little bit. >> it is >> yes >> but -- >> he just needs to listen to the carrier business, a little weaker, versus last year and otis and he'll feel great he has to x out aerospace, put a little asterisk there

it's been a big underperformer so far for the year. 3m, xli top holdings including boeing, honeywell,nited technologies the dow is down about 100 points. >> when we come back, as we said, fed chair powell goes to the hill what his testimony might signal to investors and the big banks we'll talk with both the former ceos of wells fargo and fitzgerald moonl have the informati torrow 10:00 eastern time on "squawk on the street. don't go anywhere. is where people first gathered to form the stock exchangeee, which brought people together to invest in all the things that move us forward. every day, invesco combines ideas with technology, data with inspiration, investors with solutions. because the possibilities of life and investing are greater when we come together. ♪ has been excellent. they really appreciate the military family and it really shows. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. it was funny because when we would cal

serious to be taken more seriously here, having been a f fairly long term hold, a big supporter of honeywelle -- >> far exceeded what lobe wanted >> do you -- do you think the united technologies deal has -- is in any way threatened by opposition it does require a shareholder -- >> it does as opposed to the an abbvie dea. >> i don't think this will be in trouble for the same reason why it was such a coup for harris to merge with l3. that's because you merge rate -- you try to get leverage over the defense department i do believe, i do believe a lot of the good -- rockwell collins, remember the old good rich -- landing gear united technologies is all those. what it really lacks to me is a something away from commercial aircraft that is in defense. and raytheon does that raytheon is underperformed for three straight quarters because they're having trouble making missiles >> right >> that goes away. also by the way, the classified for raytheon is much lower margins than classified for harris l3. remember, we don't know what that black box is, but it is hurting raytheon greg hayes, ceo of united

the chinese are mixing economic and foreign policy that could affect honeywell which are selling arms to taiwan. >> in order to safeguard national interest, china ill impose sanctions on sales to taiwan. i don't have any details at moment but be sure that the chinese are true to our word. reporter: there is call to boycott the non-defense arms of these companies that includes, for example, the china is the third largest market for the gulf stream private jet. that is a general dynamics subsidiary. the loss of that market could affect their bottom line. all this is mixing into the trade talks, blake. it has come in what huawei added to the trade talks back and forth. back to you. blake: edward, talking about potential layoffs with huawei as well. edward lawrence at white house for us. thanks. to market watcher, brian wesbury. he says china needs a trade deal more than we do. hey, brian. >> hey, blake. blake: you do i believe that? just looking at the numbers here? >> china thinks in 100 years, they think in 1000 years we can't do that, therefore they're going to win. but companies don'

honeywell is very much involved. lucky is very much involved. there are thousands of small businesses involved across the country could i don't think people realize that, but nasa is made up of tons of private contractors, thousands of them. companies with 40,000 people to companies with six people. there have always been private companies involved. that is bobby in columbia, maryland. here is marcia. good morning. i am calling on the line for all others because i have a somewhat unusual, completely neutral position on watching the moon landing, and that is entirely circumstantial. that evening, i was 23 years old. i had just been married for two years. had just bought our first house, and moved in less than a month before that. we had furniture store in my parents house. parents'rniture in his house. we were moving back and forth by hand with a little travel trailer. that was a saturday night. i was a church organist. i did not even consider putting in our 10 inch, black and white tv to try to watch on saturday night because i had to get up ear