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tv   Worldwide Exchange  CNBC  August 30, 2019 5:00am-6:00am EDT

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it is 5:00 a.m. and here's your top 5 at 5:00 finishing strong the end of the morally set to roll on but what is behind the sudden resurgence. do you want to make money? a not so sexy bond market has been making some investors serious coin some of the red hot ways people are profiting. meantime, the clock is ticking new rounds of u.s. and chinese tariffs set to take effect on sunday all of this has tension in hong kong rising with a big story and development overnight. florida preparing for the worst. hurricane dorian getting stronger and heading for the coast. and the chicken wars raging on as popeyes may have to go to
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court because some guy got stiffed over a sandwich. it's a relationshal story and i happening on this friday, august 30th as worldwide exchange, a free range show, begins right now. stock futures are higher we'll show that to you in a second but look at this, if you're keeping score at home, these are your three topper forming sectors for the month of august. it's the final trading day after all. these are also the only three set to end the month in the green unless we get a super rally today which hey, we could. dow futures are upright now. utilities, real estate and consumer staples the worst performers, every month. it's energy. energy again not a good run this week but it
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had a terrible run at the beginning of the month and energy financials and materials look like they will end the month lower although, i guess we get 3.5 point run but probably not. as we get ready for the final day of august, trading day of august, let's see if this mini rally that we're in can hold all major indexes three of the last four sessions and we're actually on pace for our next pace since june. bond yields is the story the last couple of months of course. they do remain low the ten year at 1-5-2 but yes we are still inverted by one basis point between the two and the tens we're going to have to go to the books. when and if this reverses, is it a deinversion? an uninversion i don't know anyway, we're going to find out. let's go worldwide in asia, a bunch of economic
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data there a string of economic data points overnight. july retail sales fell far weaker than expected it's actually the first drop since 2017 on the flip side, industrial production in july coming better than expected. the markets focussing on that. the nikkei rising over 1% and in the european markets they are open on monday they don't have a holiday there. we are seeing gains. the german dax is up 1%. all the markets are in the green on this friday morning in the meantime, dramatic new developments in hong kong as key demonstrations have been banned by the government over the weekend and several important figures in the movement have been arrested. chris is live on the scene in hong kong with more on this developing story chris. >> yeah, that's right, brian hong kong has been shaken by violence and now authorities here are responding by arresting several key figures in the protest movement and banning a very highly anticipated protest
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schedule here over the weekend now that comes after a escalation in violence that we witnessed at the previous round of protests. we saw them hurling bricks and even cocktails at police for their part police have taken to using a water cannon to firing a warning shot in the air and even pointing their weapons directly at protestors now this is something that is simply unheard of in hong kong, a city that prides itself on stability. in fact, it's unheard of across all of china the last time china witnessed a challenge of this nature to its authority was in 1989. that was during the protests an how they ended in protest. how will these protests end? when will beijing decide enough is enough and will they end things peacefully or otherwise >> yeah, chris, it's a situation
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where we don't know which way it's going to go with the arrest of these key figures is there any indication that some of the protestors are going to go ahead and march? they're going to go ahead and meet despite the fact that the government effectively has said, you can't? >> they said they couldn't stop the protestors that they know from going out if they wanted to this is a largely leaderless movement in fact, the police are preparing for them to turn out regardless and they said they will respond with proportionate force. what constitutes violence in the eyes of police in their words that could be as much as occupying a street or blocking traffic because in order to do that sometimes protestors vandalized those areas. so police told us that they are
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preparing for more violence and protestors are telling us the same >> they are concerned that people might try to go in. thank you very much. let's get back to the financial markets. let's help you make some money and find some new ideas, shall we by now you know that interest rates have collapsed you may have heard that on this network. but as rates go down, bond prices have gone up. they are inversely related and a lot of so-called boring investments have been hot lately look at the returns on these common bond based etfs keep in mind these are just august returns ticker ubt up 25% this month 25 plus year zero coupon u.s. treasury up 10%. the very widely owned tlt and
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long-term treasury etf i feel like these are 1970s bands, they're all up more than 10% and if you're one of the few that saw this coming and you had the confidence and the mojo to triple down on bonds, the direction, three times bond bull etf is up 38% just this month. these are literally etfs with the exception of the tlt that i am not sure that we have ever mentioned on this show before but they have been red hot let's talk more about the markets. bill, were you one of the few that was able to spot these moves and buy some of these etfs which is fair to say were fairly here to for unknown. >> no, that's not what we do
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but everything in bonds, everything has been fantastic for bonds but looking forward it's much more about preserving capital and all financial assets rather than making a ton of money. >> so you think it's the preservation of capital but not necessarily the return on capital. so what do we do >> well, i think you were clearly late cycle and you want to stick to your late cycle play book which means stay away from aggressively financed investments but be careful not to overpay for quality that's a real danger right now. >> what is quality to you right now, bill? >> well, i'm involved in the high yield bond market and the spaces where investors traditionally go to move up in quality but the space is very expensive right now. >> yeah and is it -- that's one of the reasons that i showed these etfs ahead of you because you're a credit guy. you're more in the high yield
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pa space but if it's to find high yield investments and you're saying they're basically overpriced or a little risky, what are you doing >> well, there's some reasonable ideas out there. right now what you don't own is probably more important than what you do own and we're sticking with our top ten ideas much more than our 90th. we're fairly concentrated. we're not invested at all. we're focused on our top ten. >> can we read between the lines. >> i agree with that it gives you great optionalty if assets reprice which i expect they will. >> do you expect this? there's a view in the equity market you talk about it i'm sure too which is at some point you're going to see a rerotation out of bonds back into stocks because
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bonds, many of them as we just showed may be a little too hot. >> well that will be the case at some point but we need to have dramatically different trade policies to get there. as long as tariffs are escalating rather than being walked back it could be difficult for risk assets. >> so what happens to the bond and the macro markets in and when, bill, it's a big if, i guess, we do get a resolution to the trade deal what then? >> well, i think that would be very beneficial to risk assets and it would cause the yield curve to steepen and move higher so it would be difficult for high grade bond. >> ohio state is kicking off their season, another year at the top. thank you for joining us very much we appreciate it we'll see you soon have a good labor day weekend. >> you too, thanks. >> all right now let's move back to stocks and tracking another top stock that's mentioned all the time in
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the trade war and that is tesla. tesla forced to make some big changes as china's currency continues to fall against the dollar mr. frank holland is joining us now. good morning tesla adjusted prices in china several times this year in response to the u.s.-china trade war. the company currently imports all the cars it sales in china earlier this month, beijing allowed the yuan to decrease against the dollar that prompted the trump administration to label china as a currency manipulator tesla is building the first overseas factory in shanghai scheduled to start production later this year. the company expects to be able to build 3,000 model 3s a week it's estimated it sold more than
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23,000 cars in china through july back to you. >> thank you very much when we come back, the real world tariff impact. while one small business index is tanking and companies of all sizes are growing more concerned. plus there's good, there's bad, and there's just plain ugly. ulta beauty slashing it's outlook. shares are in need of a makeover you have your stocks to watch coming up. that stock is down 25% right now and the interest rate impact on home buying. will this rate route help the housing market a lot more still to do 5:12 on a friday morning and we're back after this. as a principal i can tell you this. when one student gets left behind, we all get left behind. this is a problem that affects each and every one of us. together with ibm, we created a whole new kind of school called p-tech. within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job.
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let's start with the good because it's friday. dell beating forecasts on a higher demand for desktop computers. the company is seeing lower demand in china amid the trade war but that's offset by focussing on higher margin deals in the country as well i'm sure fortnite is helping everybody needs processing power. the bad is mavell technologies not the movie, but the semi-conductor company
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topping estimates on sales of network equipment. marvell is down under 7% and this is certainly ugly for its investors. ulta beauty one of the hottest stocks of the last decade is down 25% right now second quarter results with on forecast the cosmetic retailer also cutting it's profit outlook and warns that sales will slow this year ulta citing a drop in sales of color cosmetics that account for half of the annual sales the shoppers spend more on skin care and other products. ultra beau ulta beauty is the disaster. recession fears? more like recession certainty if these two things hold true
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well tell you what they are. a live report from florida as they brace for the worst storm in 30 years. dorian is serious. we have the latest right after this i had a few good tricks to help hide my bladder leak pad. like the old "tunic tug".
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welcome back many of you are watching from florida and every county in your state is under a state of emergency right now. you have to prepare for the
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strongest hurricane to hit florida in nearly 30 years nbc's jay gray is joining us now from coco beach, florida with the very latest. jay. >> good morning. conditions are calm right now. officials and first responders are urging residents to use this down time to get ready make sure that they're prepared as conditions are going to take a turn for the worst starting this weekend we have seen people lining up outside of food stores and gas stations and home improvement stores making sure that they have the supplies, the food, the water, the medicines necessary to sustain them, officials are saying for 7 days or more. this storm is going to pack quite a punch as it makes landfall we know what it is, a major hurricane. we know why, it's being fuelled by the warm waters in the atlantic what we don't know is when and where. the entire forecast swallowing
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the peninsula of florida and right now, every really county in this state is under an emergency order. it's been very unpredictable what we do know is that folks need to be ready right now and we'll see some evacuation orders as this thing gets closer to the shoreline. but those officials don't want people to wait they want people packing up now and prepared to move as soon as we get a clearer picture of what this storm is going to do. >> jay, what exactly is the time line of dorian and the expected path we showed a graphic and saw it hitting where you are and taking a turn to the northwest. sort of toward the tampa area. what is the time line? >> that's the thing. most of the models are converging that it's going to hit somewherenear this area of the state and make that northward jump it looks like we just got the
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latest from the national hurricane center, that will be sometime late monday evening into early tuesday morning so it will be overnight. a time when people shouldn't be out getting anything done at that point they need to be where they're going to be. >> so it's clear this storm could impact florida not just over the weekend when it starts to come in but through midweek it's a very slow moving monster. >> yeah, that's the concern. this thing is going to slow down, especially once it makes landfall and it's going to continue to pound this area with water. flooding is going to be a major area it's a time right now along the coast where we're dealing with the biggest disparity between high and low tides about 4 feet that's going to contribute to the storm surge as well. it's going to be a mess for quite sometime in fact, a day in, once this thing makes landfall, the hurricane center still says it will be a category 1 hurricane
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>> wow that's a big one a little calm there. don't be a hero. be safe out there. you and the crew be safe. >> thank you. >> that is a big storm. >> all right coming up, well, august has been anything but quite for the bond market the yield of the 30 year seeing the biggest drop since the euro debt crisis in 2011. more on what that means for your money, stocks and the bond market where it all goes for here your big number of the day is $2.57. that's the average price that you're going to pay at the gas pump when you hit the road this weekend according to aaa it's down from last year. by the way, it's actually the cheapest gas has been nationwide on labor day in three years. crude oil is down nearly 4% this month. so a little break at the pump. chgeig alddeith more worwi exan rhtfter this. e you feeling? on a scale of one to five? one to five? it's more like five million.
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we're down 1% right now but up from where we were to begin the weekend and just keep in mind those new 15% additional
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tariffs go into effect on billions of dollars of products. there's a lot more still to do on worldwide exchange. dow futures up 162 we're back after this.
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major developments in hong
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kong police getting more aggressive one demonstration cancelled but others say they may defy the order. and betting on bonds, weare tracking some of the hottest investments that you probably never heard of but they're making some investors a lot of money right now. it's friday august 30th and you're watching world wild exchange on cnbc good morning at exactly 5:30 welcome back and thanks for being with us on cnbc. here's how your money and investments look as we're halfway through the 5:00 a.m. hour in new york city. last trading day of the month and we're not open on monday for the labor day holiday so could see repositioning today. and i know the month of august
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overall has been pretty weak it's been good we're on pace for our best weekly gain for the major averages all the way back since june bonds of course have also been the story. we're seeing a little bit of buying in bonds. yields there at 1.53% and yes we are still inverted by one basis point. all right. you're big business story this week, this month, this year, trade. the latest round of tariffs are set to go into effect. we did have at least it appeared yesterday a little bit of an olive branch maybe extending to u.s. trade representatives. >> i don't know, brian i think it's all still up in the air. but i don't know i don't know i didn't read it that way but i think people are hopeful which is always a good thing and they are still talking which is also -- >> that's the olive branch
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you can't extend something to somebody who's not there it's friday. i'm trying to find the positive. >> but if you keep talking it doesn't mean you'll end up with a trade deal that you want. >> yes it does i'm america's 17th most trusted news anchor. i made that up. >> okay. that sounds good that sounds good but today, i mean this weekend you mentioned the tariffs so in two days the new tariffs are going to kick in and on sunday a little bit after midnight, eastern standard time $125 billion worth of chinese goods are going to be hit with a 15% u.s. tariff. china is going to impose tariffs on the first trench of $75 billion of u.s. goods. this is going to be in a range of 5 to 10%. there's about 1,700 items on the list including products like soybeans now china has been urging the u.s. to lift the tariffs and today the foreign ministry hoped
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the u.s. would show it's sincerity with real action which is being interpreted to mean please lift the tariffs. now the foreign ministry also said that the two sides of trade teams are having effective communication though no word on whether or not they got a response from the united states but separate to that, another interesting story that brian brought up was the yuan because the chinese currency is headed for the biggest monthly decline since 1994 and this is despite the fact that the central bank had set the yuan, the fix for the yuan higher, stronger than most people expected for a fourth day in a row and also, brian, there's some signs now that the authorities here could have some trouble with the weaker one. regulators are started to put restrictions on certain banks
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for currency conversion to, you know, from the yuan to other currencies and also that there have been reports of real estate developers having blocked access to foreign currency bonds. so that's, they're in a delicate balancing act where they might want to have a weaker yuan for the exporters but at the same time don't want to trigger capital flight like in 2015 and 2016. >> i have a feeling that it may be one of the biggest stories of the year by the end of this year eunice in beijing. by the way, as we go into the break, you always -- you are a legend in this building. it's when you said to me, every time i see your face, i laugh. >> it's true, though i'm sorry. >> it's okay. >> i'm sorry it's not the way you look. you're very handsome.
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>> digging out. >> every time i look at your face, i'm sorry, i just sort of laugh. >> i think this was the greatest last appearance ever on worldwide exchange for you thank you very much. eunice sending hugs across the pacific. we'll see you in a bit thank you very much. who says trade can't be fun? well, business is. guess what, it's not just investors. businesses large and small, medium, on edge as a new round of tariffs kicks in. that's likely to mean higher prices for you more uncertainty for businesses and maybe more head winds for growth joining us to cover both sides of the story is bill who is the ceo of a firm that tracks the financials of 30 billion small businesses in america. that's a lot so right now, what are small businesses seeing? what are they doing? and what are you advising them
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to do in the face of trade war uncertainty and recession fear >> they're not seeing things that they like the lights went off january first this year. we had boom times in 2018 and right now we see small businesses hunker down, really the numbers have not looked good we saw a double digit increase in june. >> in lending or borrowing >> 14% negative year over year and that means that they just don't see the opportunity to buy more goods, put more people to work, make acquisitions and they're just not confident right now. >> are they not confident because of the trade war or are they not confident because we have a ten year expansion and business owners are smart and they know that eventually all good things must not come to an end maybe but rollover and slow down at some point
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>> yeah but you know, expansions don't die from old age, right? so we don't see that as the driver choose your poison today there's enough things to cause small business to hunker down. there's certainly the trade issue. there's certainly uncertainties for a lot of businesses and, you know, the confidence can evaporate so quickly for small companies and that's what we have seen. so the lights went out in january and they haven't come back on. they're kind of just putting a little bit of money to work and that really kind of put in going all in like they were in 2018 and that confidence can evaporate so quickly that we just think that it's, you know, we have to win that back with some policies and some trade capabilities for these small businesses. >> you're on the front lines your clients, your companies, they ship stuff around the world. they're right in the front of it what are you advising these companies to do? >> advising to invest now. >> invest in what? >> investing in themselves and innovate that's very important to keep up with china the trade war is in place for two reasons.
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because there's security issues, we are worried about intellectual property but also there's a big issue with china being so much ahead of the curve in terms of robots, a.i. technology. >> so they're not just a low cost manufacturer. >> yes. >> we can't look at them as a place where labor is cheaper and they can make t-shirts for the united states. >> exactly we miss that we have missed the evolution of china. they have invested so much in them they're high quality they're high-technology. high-tech, very innovative and they are very good in position developments so now look at the car industry. the car industry suffering across the globe not only the u.s. but germany. germany was the driver, the big developer of good cars now china is developing e-cars go into shanghai and you have e buses in the biggest city in china. e-buses everywhere look at other big cities
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the german capital, they have a pilot. >> you keep coming back to germany for some reason. one would think you might be german. >> one would think. >> let me ask you a difficult question you're german-american you're german by birth and you live in america. can america compete in manufacturing? >> we're falling behind. that's an amazing question what we see and i travel the world, you're so great yes, it's friday. >> welcome back any time. >> it's friday we are falling behind. look at what we're doing, e cars, good example look at what is happening in the silicon valley there's an erosion of talent people go to southern china, that's where a lot of development is happening and people will lose people here -- we lose talent because it's more exciting and more creativity in other countries, especially in china. >> but what i see, brian is these small businesses are a great source of economic engine
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for the economy and what we find is that when this confidence erodes and when they're not borrowing money to invest, we find that they actually capital drives up and we just figure out a way to keep the capital flowing. >> so there's a huge -- you hear politicians on both parties by the way say this, they say that small business is the job creator in america that's false new businesses are the job creator in america and new businesses by nature are inherently small you don't start with 100 people. you start small. are you seeing new business creation because that's the real driver >> that is exactly right, brian. that's a great point what we find is that business creation dried up and post recession and has never really quite recovered. partly because the capital is not there. the capital is not available for the start up companies and the issue is we have to figure out a way to make the capital flow and that's what we do for them. >> real good discussion. real world impact on businesses.
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thank you both very much have a good weekend. >> thank you. >> coming up, it's not just falling rates. your next guest says there's another factor contributing to the sudden surge in refinancings of homes not just rates, really we'll ask mark fleming about that plus more battle lines being drawn in the fast food chicken war. some dude wanted a sandwich. didn't get it and now he is suing. it's a real story. it's from tennessee. you got to -- if anything, just stay tuned for this story. we're back after this. do you have concerns about mild memory loss related to aging? prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.
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>> it's the rate you have on your home now versus the prevailing rate. there's about 7 or 8 million homeowners that already have rates below 4.5 or 4%. so if you have a rate at 3.9 people are saying that's not low enough how low does it have to go to really incent that ability to refinance. >> how low does it have to go? answer your own point. if you're not insented at 3.6 or 3.5, what is somebody going to be incented by. >> we have flirted with the very, very low level but every time that we get down to the low level everybody who is in the money goes and refinances so each time you flirt with it it gets harder and harder because there's fewer that are still going to benefit can we go below 3.4? maybe then we'd see it but it's one of those things. the other thing is, luckily,
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everyone has tons of housing equity so it's not just about rates. it's also about the equity in your home that really drives a surge in refinancing. >> we've been here before. are you seeing a lot of people -- refiing is one thing taking out $200,000 of home equity to buy a boat is a different thing. are we seeing people be more responsible now? >> that's hard to say. yes we do see cash out equity being used to drive home improvement. one of the most obvious things you would do is take some of that money out instead of moving because we talk about home sales being muted. instead of moving, take that equity and use it to renovate. not a lot on the buying boats and cars that might be an issue with the fact that if you're worrying about a potential recession in a couple of years you're not going to do that. >> mark fleming, rates 3.4, 3.5,
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it's an unbelievable story i'm sure that you'll be busy in the housing market. >> thanks, you too. >> let's find out what else you'll be talk about today besides the low rates. it's time for your top trending stories. this popeyes story has we worked up. >> we reached a new low with that walmart is opening up a new health clinic in georgia called walmart health it's in a separate building right next door to give patients more privacy this will be the start of offering mental health services and they could expand the concept if the georgia location is successful. if lacing your sneakers is too much hassle, nike has you covered. they're self-lacing and when you pair them with an iphone you can ask siri to lace and unlace them it also allows people to change the colors of the led lights
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along the sole update in the chicken wars it's a customer facing off with popeyes. a man in tennessee filed a civil lawsuit against popeyes for false advertising and deceptive business practices he cited multiple trips to the restaurant only to be told they were sold out of the new chicken sandwiches this man is seeking $5,000 in damages. >> 5 grand in damages. he wants a sandwich. so he's suing. you're wasting time. just get sandwiches. if that's what you want, don't sue for money but from what i understand on the story, there was apparently a craigslist ad, one of the workers suggested that like they were stashing sandwiches and if you came in on the sly and paid them a little bit more cash they would get it. >> did you hear what you just said, they're stashing chicken sandwiches, plenty is abundant there's plenty of it i know this sandwich is supposedly special but you have to pay extra to buy a fast food sandwich
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>> that's the point. people are suing. >> it's ridiculous. >> it's just a sandwich. >> so he should sue if he's going to sue, for a sandwich. >> what are the damages here >> that's my point you're supposed to -- what do you want he's claiming injury due to no sandwich, so if he wins, get a sandwich case closed. >> 5 grand in sandwiches. >> court is over. >> judge sullivan is ruling. >> on deck, an update, an important one on hong kong, new developments overnight that could make for a very hot and charged and potentially dangerous weekend there. plus, will investors be facing more uncertainty will things cool off we have experts to tell you where to look for opportunities coming up next betting big on bonds, we'll break down the unbelievable returns of funds you probably never ever heard about stuff you're only getting here on worlddewi exchange. we're back right after this. rse♪
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all right. all the headlines you need in 60 seconds. multiple leaders of the hong kong protests have been arrested it's a clear sign between the people's liberation army and pro democracy demonstrators. it's unclear if we'll see more violence this weekend because some protestors say they'll go forward anyway there's been millions of people in the streets at some times after a blockbuster report detailing how amazon lost some control of its platform selling unsafe, banned, or counterfeit goods. a number of people have taken notice they're demanding an investigation into what is being sold on the site.
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>> the story keeps going saudi aramco is considering a plan to split what would be the world's largest ipo into two separate stages. that's according to the wall street journal it offers some shares on the saudi exchange and then an international offering in tokyo or hong kong, 2020 or 2021 now let's help you make some money and find some new ideas on a friday by now, you know that interest rates have collapsed but as rates go down it means other things like bond prices have gop up and a lot of what they call boring investments have been sexy lately. these are just for august. the pro shares ultra 20 plus year treasury. the ticker ubt is up 25% this month. it's acting like a penny stock 25 plus year zero coupon u.s., zeros is the ticker. up 20% van guard, the tlt, and the spider long-term treasury etf, tlo, all up more than 10% and if
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you're one of the few people out there that saw this coming even though all of you will say that you didn't, and you have the confidence and the mojo to triple down on this movement of rates, the direction, three times bond-bull etf is at 38% this month these are bond funds monthly returns. stock futures up 174 right now joining us is the market strategist of capital wealth planning and chief strategist silver crest asset management. jeff, first off, i hope you guys are safe down in florida so here's the thing, if i would have told you a month agatha we would have these kinds of returns for the bond market and bond funds, you probably would have laughed openly on the air what do you make of it is it sustainable or are we going to see a rotation back into equities? >> i think it's probably sustainable in the short run due to demographics.
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i didn't see it coming, brian. i would point out that this is not your father's typical inverted yield curve typically the fed pushes up short rates over long rates. what's happening right now it's international capital flows are pushing long rates down below short rates. i talked to insurance companies below europe and they have nowhere else to go but here so they're buying our interest rate conflicts and that's what is giving the inverted yeield curve it's a mistake to interpret this as a recession sign. >> how is this going to end? just with the bond markets staying where it is? fizzling out or having a violent roll back over >> well, right now, the interesting thing is everybody is toward a recession here the problem is that yes, if you invested in bonds, you're getting this big boost but the return that you're getting is very small because people are paying a premium for safe harbors right now and ironically, come what may, even if you're concerned about recession risk, reality is that
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being exposed to equity risk will pay long-term returns the equity risk premium is wider than it's been, it's pretty wide throughout the entire recovery, but it's wider than it's been for a long time and that actually means that you're being rewarded for risk and you're seeking safe harbor is very very expensive. >> but you said safe harbor now twice, patrick so i guess with these kinds of moves, the point we just showed our viewer is those kinds of gains in that period of time >> well, i mean, the view is that bonds will display less volatility that's why people around the world are willing to accept negative rates in many cases because they feel that they will be insulated from whatever economic shock is coming but, you know, you got to weigh how much do you give up in exchange for that?
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especially people are not perfect. >> they're not >> no and what happens is that people -- you got to play it perfectly both on the top of the -- the end of the cycle and in the beginning of the new one in order to, you know, the risk is that you go into a safe harbor and you stay under a rock for two years and you miss two, maybe even three years of very powerful returns either at the end of the cycle or the beginning of the cycle. >> and what's amazing is that not only as we just found out people aren't perfect in market timing so breaking news right there, we'll run the risk. but it's that bonds and stocks have had a goodye year. where is all of this money coming from? who are the buyers here? >> well, there's still a ton of cash on the sidelines. both on the individual investor and believe it or not on the institutional side we identified it well on august 5th. we said that that was low.
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we have been constructing on stocks since then. you had 3, 90% down side days meaning 90% of the total volume trade came in on the down side over this time frame you had two 90% upside phases. that's the way bottoms are made. if we can get through 29-40 and 29-50 i think we'll make all time highs. >> why so optimistic on equities >> earnings are going to continue to come in better than people think we have been hearing that earnings are going to soften we have come in a little bit here and we think they're going to restrengthen as is the economy. pessimism on the 623 downturn friday on the dow, you had more money going into reverse etfs betting on a big move to the down side than i can recall in the history of the etf market and that -- brian, you have known me 25 years, that's the way bottoms are made. >> it's that sort of extreme pessimism on the other side.
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patrick, where, if anywhere, are you seeing value in stocks right now? >> well, one thing is you want to be diversified at this point. >> what does that mean >> diversified internationally everyone is concerned about recession risks and they're concerned about slow down risks. you want to be exposed to three different kinds of risks and that means seeking out risks in some cases seeking out different kinds of risks that are not correlated with the risks. >> thank you, very good discussion jeff be safe down there in florida. be careful big storm coming time for your morning rbi. the most random and interesting thing you'll hear all day. new tariffs take effect on sunday the additional 15%, the question is this, will the china tariffs result in manufacturing and manufacturing jobs coming back to the united states that's what the president says he wants what do you think? we asked you on twitter. and the poll results were clear.
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74% of you said no no they will not 26% said yes they will. we know the president watches cnbc we'll see if he agrees with that most of you saying, no, tariffs are not going to work bringing jobs back to america random but hopefully interesting. having a great long weekend everybody. be safe out there. we'll see you tuesday. squawk box begins right now. >> good morning. stocks set to surge again on the final trading day of the month but with yields at record lows should wall street be bracing for pain ahead. it's pretty attractive the clock is ticking new rounds of tariffs set to take effect this sunday as tensions in hong kong continue to rise. we have a live report from there and from beijing and bracing for dorian we're getting a better idea of the storm's projected path it's now expected to hit the florida coast as possibly a category 4 return. it's friday, august 30th, 2019 and squawk box begins right now.
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♪ >> live from new york, where business never sleeps, this is squawk box good morning, welcome to squawk box here on cnbc. we're live at the nasdaq market site in times square i'm melissa lee along with joe our guest host for this hour, jim o'sullivan great to have you with us. let's take a check on u.s. equity futures a higher open across the board here third straight day of gains. the dow looking to add 200 points almost. s&p 500 higher by 22 points and the nasdaq down about 61 overnight in asia, the nikkei was a real stand out in asia 1.2% there hang seng had been higher but turned

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