j. powell in the hot seat cast doubt on rate cuts this month.he trading week ahead it's monday, july 8th, 2019. "squawk box" begins right now. >> announcer: live from new york, where business never sleeps, this is "squawk box. >>> good morning. very warm welcome to "squawk box" here on cnbc live from the nasdaq market site in times square i'm wilfred frost and mike santoli joe, becky and andrew are all off today. our guest post, peter, and cnbc contributor. let's check in on the futures this morning coming off the back of a full percent or so for the selling in asia, less than that in europe, down .2%. but we're down 95 points on the dow this morning of course, coming off the back of a very strong week last week, the s&p 500 as a whole up 1.6% led by communication services. ten were higher energy the only decliner last week was down about a percent or so. asia overnight as

j. powell has plenty ammo to justify cutting interest rates. if the president rolls out new tariffs on chinese import, 300 billion, one rate cut will not be enough. here's the bottom line, people arksz i've been saying, we have two economies in the country the manufacturing economy and consumer economy for the moment they are very out of step with each other. the former doing badly the latter doing well. this industrial weakness is a serious problem. it will not go away unless the fed steps on the accelerator only offset the weakness, along with the air pollution from china. >>> jeffrey in washington, jeffrey. >> caller: bouye i can't from seattle, jim home of jwn. >> that's right, i forgot, that was on the 52 week low i have to get a new address. what's up? >> caller: internet sales opened in new york at the end of the year, dividend over 5% now do i need to buy this thing or hold onto it >> look, my charitable trust owns kohl's and that is -- >> the house of pain >> and you are talking about a complete housing complex of pain i'm going to say

j powell said exactly that when he testified on capitol hill this month.one of the big things the fed is worried about is the impactñrñr the trade war on the u.s. economy. that the incident rate cuts for that reason. there's global growth slowdowns as stephanie mentioned in europe and asia and the fed wants to isolate from that fallout. but you don't have to look very far to see the impact. you look at the second quarter gross domestic product. it isn't terrible. it's fine. but business investment dropped. with all the consumer driving growth in the second quarter. you look at any measure of manufacturing, in the industrial midwest. it is in recession right now and that's partly due to trump's trade war and people are unsure about what future policy will look like of the not building new factories. not hiring as many workers as before. in a way, trump is getting what he wants from the fed. at leaf part of it. not as much as he wants but he's getting it because the policies are bad for the economy. >> there's also a disconnect. even if you're seeing new fac

j. powell saying, quote, what the market wanted to hear from j. powell and federal reserve was this was the beginning of an aggressive rate cutting ti cut cycle that would keep pace at usual powell let us down. no inflation we are winning anyway but i'm certainly not getting much help from the federal reserve that's the president of the united states. the federal reserve cutting rates for the first time since 2008 today, bringing the rate it controls for overnight lending among banks down by 1/4 percentage point, the new range between 2% and 2.25% in a press conference powell appeared to dial back market expectations for future rate cuts >> the committee is really thinking of this as a way of adjusting policy to a somewhat more accommodative stance to furg further the three ontoives i mention, to ensure against inside risks shall to provide support to the economy that those factors are -- were -- where factors are pushing down on economic growth, and then to support inflation. so we do think it will serve all of those goals, but, again, we are thin

j. powell on capitol hill.raders have beenrethinking their expectations for a rate cut this month following last week's strong u.s. jobs report. stocks were mixed yesterday, the dow falling for a third straight session. >>> at&t will start blocking robo calls following an fcc rulings. characters can block calls by default without requiring customers to apt in. at&t will out services now. it will block telemarketers as suspected spam and lets you keep a list of specifically blocked numbers. >>> fast food chains are looking to use technology to recognize customer's license plates in the drive-thru lane to hopefully speed up orders. starbucks tested a system in south korea last year with people who prereger is their cars and technology could identify repeat customers allowing restaurants to link a car with your credit card and order history. you wouldn't have to pull out your phone to y. marcus and kris, back to you. >> that is interesting. you're here for your frosty? no, it's monday not friday. >> i need wings t

fed chair j powell in a speech tuesday continued to tout a rate cut coming fro the fed as did chicago president evans. in interview he said he was concerned about slowing growth, the trade war and finflation below the fed's 2% growth target. >> i would say more accommodation would be more helpful for ensuring weco idently get to and above 2%. i think 2.25 or a littl more would be appropriate for our economy and monetary policy. at this point into the nick cycle we are ten years into an expansion, a and if we going to be above 2% above this cycle, about right.uld be >> consumers enjoyed strong job growth and recent wage growth and are likely to get a cut from the fed. it doesn't seem like the party, that is the economic expansion, is ending any time soon. for "nightly business report", i'm steve liesman in chicago. >>> so what happens when consumer spending is strong and business spending starts to soften? the chief economist at moody's analytics. mark, thanks for being with us thisho evening. do you explain the strong disconnect between consumer and business spending? >> well, busines

. >> we think that the economy is slowing, right we heard that from j powell, right? we heard that the economy is slowing, so i'm not really sure what in the earnings is going to shock us that's why i said i don't think it could hurt at this point. i think it can only help because that's why he's cutting rates. so if the economy is getting worse, that only bolsters the rate cut >> on why he is doing what he is doing, i think the fed has lost a tremendous amount of credibility. i know guy is going to say this fed also, you know, throw it on the heap, but the reasons why he is saying he is cutting rates are not the reasons why, you know -- we just don't get it he got bullied into it. >> he said the reasons months ago. >> look at the data we saw this week in general. >> i don't think there's a surprise about where the economy is and the macros, everybody knows that go to a name like fedex up over 3.5% today, transports up 2.5% today, that tells you that people are reassessing a little bit about their positioning on these names. i'm not telling you that anything will be t

j. powell's testimony and as we head to a break. take a look at u.s. equity futures.er of a% would put it over 3,000. the dow up 93 at the moment nasdaq looking to add to yesterday record foes up 22 points, we'll be right back. y. but we're also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you. >>> still to come on "squawk box," the powell rally, we will discuss and preview what he will say with david purdue. plus, the u.s. and france, taxes on u.s. companies that lead to tariffs. >>> is netflix winning the war with legacy media? some argue, yes. eeieill talk with rich grnfld, "squawk box" will be right back right back [ music playing ] ♪ when you have nausea, heartburn, ♪ ♪ indigestion, upset stomach, diarrhea ♪ try new pepto liquics for fast relief and ultra-coating. ♪ nausea, heartburn, indigestion, upset stomach, diarrhea ♪ get powerful relief with new pepto bismol liquicaps.

j. powell testifying next week.gainst that is tendency in july for the volatility index to go to sleep see where it was last summer even back in april back to 12. there's this push pull in volatility going into the weekend a slight increase bid in there because we now have a little bit of a back and forth debate on the next fed move and what powell may say next week. let's see what the nasdaq has to say. >> we're coming off all time highs ahead of the holiday today the small caps outperformed fractionally. for the week they are the l laggards those software names have been on fire. you heard from meg about president trump's comments impacting biotech having a good week coming in today we gave up the week's gains and those are amongst the biggest losers the issue is whether he'll do international pricing as a reference or push for that lowest international price >> you can argue the fed was thrown a curve ball with that better than expected jobs report we have come off the lows. the dow closed down 54 points. s&p 500

j. powell will do that is because inflation running below the fed's target is it not uncharacteristic to have infligs below a target and gold soaring here? >> well, i think yes, it is but i think what we see now is we see negative real interest rates. we see a substantial amount of money that's paying a negative return and what we're hearing in the last few weeks from our connections in europe, the gold funds are getting inflows. it starts there and they understand gold and understand risks and we're in a period now where gold blossoms. when you have low real interest rates and negative gold does well and then the inability of the industry to respond to a higher gold price is i think the key to get it going forward. we also have a situation now where we've been grinding for six years. we've built the base it's broke through that technical resistance at 1360, it's starting from a higher base it will hit the all-time highs of 1900 to 2,000 because we're starting from a higher base than we did back in the late '90s. >> dead right on this. a lot of people doubted you when you came on, not me

j. powell the last several days on capitol hill that we are going to get this interest rate cut. is that something that almost gives us a little bit too much more security. >> i agree it's more likely that we do get 25 basis points now given that growth or the payrolls figure was etter. that's going to be important it focuses more on low inflation as a justification for cutting rates well that's actually quite benign so either way we do get the 25 basis point cut the implications for the market are going to depend much more on the language. >> a lot of cross currents the fed is watching and we are too thank you for being here and helping us watch those today >> well, let the bitcoin bashing begin. here we go. >> a lot of people are going to have reaction to this. >> it's a big one. >> it's a big one. the president took to twitter in a series of posts to say he's not a fan of bitcoin and other cryptocurrencies he says they're not money and their value is highly volatile and based on thin air and they can result in unlawful behavior. also taking aim at facebook's libra saying it wi

j powell our dovish fed chief made it clear he wants to cut interest rates lower rates bolster the economyefits companies like parker they look at the weakness as long as they are confident that the fed will take action that means all these analysts who downgrade the stock are fighting the fed they are fighting the fed. i've told you you can't do that and they are fighting the tape and that's a fight you cannot win. not unless the fed changes course which seems unlikely given there is real weakness in the business side of the economy. it is the consumer doing just fine with bank of america but that's not the only thing they are going for. the industrials, we don't talk enough about them. in particular, they get an additional boost because there are so few publicly traded manufacturers. we have a real shortage of this stock since many of them have monster buy backs and we rarely get industrial ipos. between the shortages, these analyst downgrade. parker is like the unsinkable molly brown. the social light who survived the titanic sort of like the kim kardashian of her day. we're seeing the

j. powell declared he was done tightening and the stock market snapped right back and fed exwent with it now, for a while it looked like fedex had its mojo back. but by mid april the stock had rebounded to $199, okay, even though the company actually cut its full year forecast again when it reported in march. and then may happened. it's may, it's may, the brutal month of may as the trade negotiations with china fall apart and president trump decides to start escalating again, fedex's stock rolled over. hey, makes sense anything that inhibits trade is bad news for this company, right? it's a shipping company. then it became apparent that there was more to it than just tariff and slow down in commerce at the end of the day reuters reported the fedex had drawn the ire, perhaps the wrath of huawei, the big chinese telecom company. 100 billion in sales that's the equipment maker that trump partially blacklisted. what happened? well, they apparently -- apparently diverted two packages addressed to huawei in asia. huawei is one of the largest companies in china and has a lot of sway with the co

now, that said, our central bank and many others are going to say as j powell said hey wait a second not so fast, we have something to say about that. i think it will take a long time for facebook to get this thing going with that kind of reasonable opposition. >> yeah, facebook's announcement wasn't like hey i'm pregnant. it was more like hey let's wait until the bit of a baby. -- birth of a baby. it's more like a birthing announcement. it takes some time. i think that virtual, digital currency, whatever it is is inevitable. i think most millennials are okay with the concept, if you will, of paying people around the world, but having said that, facebook with all of these major partners investing in this idea, this currency, it might have pretty quick and fast adoption and that might also, if the system doesn't work, it could cause a worldwide crash of the financial system. so we're in very murky waters here, but the countries, switzerland, japan, and the states, wyoming who are supporting innovation are seeing money come into their territories. we have to support innovation. >> yeah

j. powell, plus, elon musk telling investors tesla will break even this quarter and be profitable in thearter. we will talk about the future of the car maker shortly. check out the futures at this hour it looks like the dow is indicated up by 42 points. yesterday the dow was down the s&p 500 and nasdaq closed up the third session in a row the nasdaq off by almost 13 points ths&e p down by 1.5. "squawk box" will be right back. >>> ♪ >>> let's get at it. dom chu with this morning's market movers. >> we will start with what's happening with southwest airlines, because the shares are down by about at this point 4.5% or so more than 3,000, 4,000 shares of pre-market volume, america's fourth biggest airline came in with mixed results, better profits, it says it expects higher costs in the second half of the year and unit measures in the third quarter as well, southwest is the biggest user of the boeing 737 max jet that grounding cause it to cease flying in the new york area, consolidate its operations and those headlines not helping matters much we are watching shares of bristol meyers squid,

mean that they shouldn't listen to advice from their elders >> trump and kudlow both in their 70s, j powell in his 60s bob, as a market participant what do your clients make of president trump just hammering powell over and over again, but then larry kudlow coming out today and saying he's safe >> let's start with the kudlow comments i think that larry said it right. there are checks and balances in our system the fed is appointed by the president but then they report to congress. i love that listen to your elders you could reads it different ways i listen to my elders, they have wisdom from time to time sometimes they have wisdom, sometimes they don't i think that's how the fed would proceed. meanwhile the president loves to bash the drum on the feds as often as they can. i hope they stay independent in their minds. >> do you think they are independent. >> no. i would say every day it gets worse. he would have to be inhuman not to feel the effects of what's going on inside him. the president made it clear, he's jealous of countries that can press the button on monetary policies >> the pres

j. powell and i meet weekly and we talked about this extensively. there are these discussions going on they will continue to go on. again, to the extent that facebook can do this correctly and can have a payment system, you know, correctly with proper aml, that's fine they've got a lot of work to do to convince us to get to that place. >> so, more gone, the treasury secretary there saying facebook has a lot of work to do. the bar here in terms of regulation is very high. there's been a lot of speculation the past hour. why was treasury secretary mnuchin doing this today what it was it about this day that brought him to the briefing room and what i'm told, in talking to some people around the white house, this is the treasury secretary very much responding to what the president wants here in terms of facebook this is not necessarily -- shouldn't necessarily be read as a response to regulatory agent azizirad around the world who are also making moves on cryptocurrency this is very much the treasury secretary and the president of the united states bein

--hleen: another tough j tough day for jay powell.to start your press conference seeing stocks plummet, but as mark just said, the markets were expecting an aggressive fed statement. but we got from jay powell is out,they are ready to take or have taken out a rate cut that is an insurance against downside risk. a lot of the recent data on spending in the u.s. with consumers and jobs has still held up. he did not say it was the start of a long easing cycle. he made it pretty definite to say that this is not necessarily one and done. let's listen to jay powell at the press conference earlier. chair powell: it is not the beginning of a long series of rate cuts. i did not say it was just one or anything like that. when you think about rate cutting cycles, they go on for a long time, and the committee is not seeing that. the fed, in some ways, is in uncharted territory. how often have banks like the federal reserve had to have policy impacted by a global trade war that the united states is one of the two big parties in ? this is putting a

powell and next week, folks, the focus will be on earnings. that's where the rubber meets the road there are some of the titans we'll be reporting from citi, j&jrgan stanley, black rock, ebay and others, that will be a big part of what we cover next week as the market digests those earnings reports >> i'll be looking for that netflix report. >> yeah. >> i mean, it's a little early to see if they're going to be hit by competitive pressure now, but they have a lot coming at them. >> indeed. >> folks -- >> we're going to finish off these tie dye -- >> 100% sugar drink from starbucks. >> thanks for watching "power lunch." >> get yourself a tie dye cream frappuccino. "closing bell" starts now. >> good afternoon. welcome to the "closing bell." i'm wilfred frost. goldman sachs, that stock up nearly 3%, one of the big leaders on the dow that crossed 27,000, on pace for a closing high 59 minutes of trade left and everything you need to know as an investor is coming you. >> welcome i'm sara eisen to what's driving the action higher today health care stocks rallying after president trump's reversal on drug rebates. fed members this afternoon, williams an

j, united health out what they modest beat. -- with a modest beat. ♪ ♪ tom: this morning, yields roll over. an inflation experiment fails. tom porcelli on chairman powell'sds and tories will do what it takes to keep parliament running. prime minister johnson placed his levers. the president speaks to the converted and says the congresswoman should go back to mogadishu, north dakota state, or maybe the swath called the university of minnesota. this is bloomberg "surveillance," tom keene in new york, nejra cehic in london. this is a huge deal, the politics and polarity of your united kingdom and america, it is extraordinary. nejra: it is sending the pound on the move in the u.k. boris johnson saying that theresa may did's brexit -- dead brexit deal needs to be junked. the pound moved higher. so many being -- conflicting messages. tom: buried in the news flow as well is the idea of a $1 trillion deficit. this is the g7 meetings in france. who do we have? is maria there? nejra: yes, and we just caught up with belmar now -- bill morneau. conversation, our maria tadeo with some good questions to bruno le maire yesterday. in japan wherert 23 people are believed