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tv   Worldwide Exchange  CNBC  September 3, 2019 5:00am-6:00am EDT

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it's 5:00 a.m. here in new york here's your top 5 at 5:00. after the best week for stocks in a month, futures are falling right now. new tariffs over the weekend is currency falling? as britain faces what could be it's third election in less than five years a possible state of emergency after a weekend of violent clashes. all of this ahead of what may become the biggest ipo in the history of the world. >> tragedy in the bahamas.
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hurricane dorian is still pummeling the islands as coastal states prepare for the worst it's tuesday, september 3rd and worldwide exchange begins right now. good morning, good afternoon, good evening and welcome from wherefore in the world you may be watching. thanks for tuning in to worldwide exchange live on your screen right now it's hurricane dorian, the monster storm will not move. it's sitting over the bahamas doing incredible damage over the weekend. all of this as they all declared states of emergency. we'll give you more coming up in a few minutes. here's how your money and global markets are setting up tuesday coming off one of the best weeks of the year last week. a very different story today
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down 189 points. all of this as the latest round is taking place over the weekend and beijing filing a complaint with the world trade organization as futures fall, bond yields are down fractionally begin. a benchmark yield. that is a negative real yield effectively. if you get this income and you factor in the rate of inflation you'll be paid less than zero given inflations impact on that income pretty incredible stuff in the bond market. we will be on trade the other big market story this morning coming out of the united kingdom where a political crisis is quickly turning into a currency crisis the pound below $1.20. that's the lowest level in three years. boris johnson wants to pass
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legislation this week to try to force it and seek a three month delay to the u.k.'s planned exit from the european union. >> i think to be a money manager today, just go out and find good investments for your clients you almost have to be a geopolitical strategist. what are you most focused on with your team there at commerce street >> well, safety is the first thing that we are trying to focus on we like a return of money in this environment but there's still plenty of great places to invest you just have to be picky and wary and a little bit understanding of where you think the market might go this fall. >> where do you think it will go this fall? >> it's going to have a sideways and downward bias. we have pressure coming from the u.k. there's nothing positive
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it's going to come out from brexit and the market hates uncertainty and we know that it's going to get more uncertain through october. china, the same way. we have had over 1,100 people arrested so far in hong kong and that situation is going to get worse before it gets better. the trade situation is going to get worse before it gets better. so that's going to be downward as well and we seem to have negative numbers coming on the economy as far as global uncertainty, manufacturing is down, gdp is down, slight inversion of the yield curve we have a cut on rates there's enough downward buys to see if you can pick and choose where you want to be hiding out right now. i think right now blue chip stocks with the yield is a better place to be than probably the bond market. >> you know, jim cramer said so we were in hong kong a couple of weeks ago. we understand the tariff story a direct impact on the u.s.
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consumer do you believe the unrest, the disturbing images coming from hong kong are emotions pacting the u.s. markets in some way >> i don't think the hong kong factor has been factored in yet. that's been very underrated and that's going to play into trump's hands. that's going to make it very difficult for people like nike and companies to pressure trump. he's going to say, go change your supply line this is a communist country and they have a human rights issue this is also going to play into world sentiment on our side as well and make it very difficult for political opposition against trump. all of this is playing into his favor and should workout good. >> we'll talk about gold later on in the show are you one of the people buying gold as a relative safe haven? maybe buying treasuries with a yield at 1.48% somebody is buying chlts go.
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>> gold has been a trade for me. in case everything gets bad, the problem is how do you get out and do with it i'm not seeing a lot of inflation. >> would you buy stocks ahead of an expected fed rate cut in september? >> absolutely. a lot of these do very well. their numbers have come out really well. they're pushing a really nice yield 6% they reduced their debt from $180 billion, $169 billion they're on target for $150 billion. their new content coming out this spring, the acquisition is going well they have exposure to china. nice company i feel good about walmart and target those are momentum plays and they're not cheap. and i still love the banks right
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here really good yields and you can move into the regionals. bank looks really good you can move into pack west which has a 7% yield nice there it's a nice yield and forward earnings multiples. >> we like it. we'll see you soon thank you very much. >> have a good day. >> now to the story moving markets. one we just talked about the continued unrest at hong kong over the weekend, the most violent protests and police response the world has yet seen. this as city officials weigh declaring state of emergency for the island joining us now live from hong kong chris. >> we are now in week 13 of the antigovernment protests here in hong kong and they only appear to be getting more violent we witnessed battles between police that banned major
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demonstrations here and protestors that defied those and turns out by the 10s of thousands. things got ugly. some of them threw bricks and bars police responded with a volley of tear gas and a water cannon it's something that we haven't seen before, it's blue dye in the water in order to identify protestors afterwards. things got uglier when they chased a group of protestors down into a subway car and hit them with pepper spray and clubs and some were innocent bystanders according to amnesty international looking into this right now. all of this with a message coming out of beijing from the state media organization there saying that, quote, the end is near for these protests. however they didn't say exactly how these protests are going to come to an end now everyone here is hoping that doesn't mean china is about to resort to drastic measures meanwhile, protestors are still
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out on the streets by the thousands right now in front of the central government of hong kong. >> when you're there, can you get around there were some metro stops that were stopped by protests and by the police response. they were attempted to shutdown at the airport is it possible to do, i hate to use the term business as usual, but could you get to work during the day? >> it's more complicated than it used to be and that's the plan on the part of the protestors. to make life more difficult. that's their goal to get the attention here in hong kong and to get the government of hong kong to pay less attention to pressure coming out of beijing brian. >> chris, we appreciate it thank you very much. >> when we come back here on worldwide exchange, the latest on the slow moving hurricane dorian as it continues to pummel
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the bahamas. now a live report is next. crisis in the u.k., boris johnson issuing a brexit ultimatum and a major shake up at saudi aramco as the king's son instills a top ally at the top of the cpaomny a very busy hour still ahead as worldwide exchange returns so, every day, we put our latest technology and unrivaled network to work. the united states postal service makes more e-commerce deliveries to homes than anyone else in the country. i can. the two words whispered at the start of every race. every new job. and attempt to parallel park. (electrical current buzzing) each new draft of every novel. (typing clicks) the finishing touch on every masterpiece.
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(newborn cries) it is humanity's official two-word war cry. words that move us all forward. the same two words that capital group believes have the power to improve lives. and that, for over 85 years, have inspired us to help people achieve their financial goals. talk to your advisor or consultant for investment risks and information.
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five states are under a state of emergency as hurricane dorian continues to batter the bahamas. jay gray joins us with more on what is an incredibly powerful and slow moving storm, jay. >> yeah, and the slow moving part is what is frustrating a lot of people now. you have to feel for the bahamas and the people there suffering through this for more than a day at this point. we are in savannah right in the middle of the forecast cone. what we're looking at is the storm just not moving at this point. so it's just slowly inching but we'll take aim at the u.s. coast at some point. now the latest advisory says that will happen a bit later this morning when it should begin to be a bit more in earnest. it will basically shadow the
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coast, florida already feeling some of the effects will get more intense and then if it continues on this current path, we should see the storm sometime late wednesday into thursday morning just off the coast here. some areas will still see hurricane force winds. also they will get some of that storm surge and of course the rain that will combine because some flooding along the coast. right now it looks like the storm is going to continue to inch along could make landfall in north carolina at some point late in the week that's not very clear either it's just been such an unpredictable storm and right now it's just not moving. >> just over the weekend, jay, some states had set both lanes of an interstate going out of town the police said there's no going in to some of these places we're going to open up all the interstates to one directional traffic. are you seeing people leaving the area where you are
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the other coastal areas near you? >> yeah. absolutely we have seen people leaving, moving to higher ground. that's been the case here as well the evacuations will continue today. everything is pretty much shutdown everyone cooperating except dorian. >> jay, we appreciate you being there. stay safe. thank you very much. >> thanks, brian on deck, a brexit show down. will the u.k. have the third election in under five years prime minister boris johnson digging in $2.9 trillion. the u.s. government says that's how much insured property is vulnerable to a hurricane in new york florida, the same as hurricane dorian sets it's slow moving eye on the southeast 'rba rhtft ts. 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,
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we just showed you dow futures, they are down 168 points right now in the meantime, both sides are digging in politically in the u.k. the casualty, maybe the economy and the currency more on a situation that at times could see more fiction
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than fact. >> what we're seeing at the moment is more pressure on the brexit center here more and more polarization essentially what's happened over the last few days is members of boris johnson's conservative party is they're prepared to vote against the government and what they would like to vote through is legislation today that would try to block the possibility of a no deal brexit. now boris johnson as the new prime minister said that having that as a credible threat is the only way he sees his negotiating team in brussels getting a better deal at the european j e union ordeal he or parliament could be happy with. it's goingto be very difficult for him to remain as prime
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minister this legislation today, the government is saying if you vote against it, if we lose on this legislation, we'll treat that as a confidence vote meaning they'll be preparing for elections potentially as soon as mid october. >> boris johnson is playing with political fire because i seem to remember not too long agatha calling an election did not turn out well for the incumbent your memory spans at least two years. >> she didn't do well too. she lost her majority and based on the polls we're seeing right now, it shows the conservatives with just 33%. they lost support to the one issue that sprang up earlier this year and as they went to the polls, one of the concerns would be to stave off that threat from the right. the opposition parties, and the two largest parties here and
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although boris johnson is struggling with a single person majority inside the building behind me, it could get worse were he to call an election or not succeed in that vote >> we appreciate it. >> thank you very much. >> all right on deck, china fears rattling markets. futures down 181 bond yields falling again as well maybe forget stocks for a moment why your next guest says gold's winning streak may be only the beginning. coming up right after this servicenow put our workflows in the cloud. this changes everything. you're right sir... everything. no not everything, i mean you're still blatantly sucking up to me gary. brilliantly observed, sir. always three steps ahead. six steps ahead. sixteen. so many steps. you done? a million steps ahead.
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all right. welcome back more on the terrible tragedy up the coast as more victims have been found in the diving boat fire over the weekend. more on that with francis rivera in new york. >> good morning to you we start with panic overnight at newark liberty airport in new jersey between 150 and 200 passengers fled terminal a after they were told to evacuate by airline attendants a flight attendant became alarmed after speaking with two men at a gate. the airport sent out a tweet saying there was no threat travelers were able to return to
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begin searching for their luggage. the two men are being questioned as well as the flight attendant that triggered the alarm. >> tragedy striking in northe california dozens of people are feared dead following a dive boat fire 8 bodies have been located but the death toll could climb to 34 33 passengers and one crew were trapped below death. five crew members on the upper deck jumped overboard to escape the flames and used a dingy to reach another boat for help. >> now, the us. open with the reigning singles champs on the men's and women side have been eliminated after novak djokovic's bad shoulder put him out and naomi osaka couldn't overcome a hurt knee those are your headlines for this tuesday. >> thank you very much trade tensions and hong kong
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violence set to hit stock. futures are down 180 right now we'll have a live report on the economic impact of the trade war live from china coming up and then are we going to talk ourselves into a recession in an other wide pretty healthy economy? we might and later, a huge shake up at the world's biggest economy and the king's son has an ally to top saudi aramco do you have concerns about mild memory loss related to aging?
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it's tuesday september 3rd and you're watching worldwide exchange here on cnbc. welcome back welcome to september thanks for being with us on cnbc we had a pretty good week for stocks last week one of the best in months. one of the best in years but not looking like the forward momentum is going to carry over.
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new tariffs taking hold and that's taking a hit at stock futures and dow futures. they're off 210 points and as stocks sell bonds get bought we have a negative real yield on the ten year note. look at that, the yield at 1.48% about the level of inflation so what that means is as you get that income 1.5% you're getting wiped out by inflation and in other words, zero real return on your bond investment money we'll get back to the markets and your money this morning but the other big story this morning is coming out of the united kingdom. we're watching the pound fall as the brexit johnson continues it's the lowest level against the dollar since october they want to pass legislation this week to force him to seek a three month delay in the planned exit from the eu, but if that happens, johnson has said he would take steps to hold an early election another one. it could be the third
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presidential election effectively in the u.k. in five years. can you imagine if that happened more on that story coming up let's talk about the issue that's moving markets and trade. the latest round of u.s. and chinese imposed tariffs over the weekend. also issuing an official complaint against the united states with the world trade organization eunice has a look at the impacts that this trade war is having. >> thank you so much well, i'm coming to you from a town where there is christmas 365 days of the year this is a northeastern chinese city and roughly half of the world's christmas decorations and crafts are made and shipped out from this town so of the people here, they have a saying that they have a concern about the tariffs. it's created a lot of uncertainty and they tell me
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that the christmas industry has been spared but what they are worried about are the orders from next year because the tariffs kicked in over the weekend and they're eyeing the tariffs coming in place in december as well from what i gather here the orders for the most part they say for this christmas were down about 2 to 3%. next year they're anticipating the orders could be down at least by 10% and this is a low margin business in the christmas industry they have to find other ways in order to survive but the way they're surviving might not be what you would expect. because unlike what we have been hearing a lot of the manufactures hearsay it's not an option for them to move production outside of the country that the infrastructure is not there yet but a lot of the raw materials. so for the most part they're moving inland they might have to start moving some of their
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facilities to places in inner more rural areas within china that could be about even as much as a tenth of the cost from what they see here. another option that they have been eyeing for the most part, brian is selling to other customers. they said that they're looking at the middle east as well as pakistan, southeast asia, places that don't traditionally always celebrate christmas but they're looking for customers trying to offset the losses they anticipate from the united states. >> i wouldn't necessarily think of those as christmas markets necessarily. that said are these manufacturers able to reduce their costs by 90% .1 the cost by moving in, i have to imagine that the conditions from those factories from a human perspective would probably not be ideal. >> well, they were telling me that when they looked just at
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the land alone, when you compare in this town which is actually a wealthier part of china compared to some of the parts of china where the place is a little bit more rural, they said they could for the most part cut their cost by a tenth just based on the land and if you look at labor, it's also significantly less and that's where they're looking for the short-term they're concerned about how they're going to workout some of the tariffs with their customers in the united states because one of them that we spoke to said that walmart is a major customer for them and they're looking to try to workout how much of the tariff they can eat. some of the manufacturers said they could eat three to fi5% of the tariff and they said that a lot of their customers understand that so because of that they're talking about passing the cost
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on to the u.s. customer instead. >> well, it is very interesting to see where a lot of our christmas ornaments come from. when i think of christmas i think of china, let me say merry christmas to you it's september 3rd, it's fair game talk soon. those tariffs expected to hit american retailers and shoppers as well because this round jumps taxes on consumer goods. the stuff that you and i buy every day. especially back to school and yes christmas and holiday time joining us now is the president and ceo of the american and apparel and footwear association. even the low cost manufacturers are rying trying to get lower s is that going to mitigate the impact at the store? or are we going to be paying for the stuff we buy in the next days, weeks or months. >> you're correct. christmas has come early this year but not necessarily in a
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good way saturday night at midnight we had the kick in of what we call the cinderella tax our beautiful clothes for the holiday season have turned into rags we are very upset with the administration and we have talked to them at length and we have begged them on our hands and knees, please stay away from the american consumer. you want to have an issue with china, you want to have discussion and transfer of technology, that's great but stay away from the american consumer we have testified. i have personally testified twice. they're not listening. the president is shall we say on the band wagon and he is hell bent on putting tariffs on us. >> do you think there's a feeling in congress and i know that you can't speak for everybody in congress but do you think there's a feeling that either a, the impact won't be as serious at some retailers or b
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the american economy and consumer is strong enough to wi withstand any kind of a price impact >> congress has been a little too low profile on this. we think they should speak louder congress has the power however they out sourced it to the administration and the administration has been wealding it as sword against us it's quite painful for us and do you know what the killer in this is we're now looking at tariffs on $550 billion worth of goods coming in from china a million dollar a minute, going to be tariff at 25% or 15% and you think the american consumer is not going to notice.
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>> how much of that is going to be eaten by us versus the retailer itself maybe versus the supplier in china? because if you share the pain, it does mitigate at least at every level, no? >> this morning, it hit i think it was 7.18. and we're all good americans and we're all going to try to do the right thing but we can't with stand this the american consumer will pay for it and when they pay for it prices go up, sales go down, jobs get lost and that's why we worry about the r word slipping in. >> recession we'll have a guest coming on in a few minutes that thinks we can talk ourselves into a recession. you mentioned congress, do you think there's a possibility that congress could rest this power away from the president and reverse these tariffs on its own if it really wanted to do that
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does it have the power to do that >> if they dig deep enough they have the power i have talked to many members of congress i think on steel and aluminum they would be willing to do something. on tariffs such as these, i don't think the will is there. i wish it was there. >> but if things got too bad, congress could, potentially, jump >> we would hope they would jump in we have seen no activity in that direction. >> pleasure to have you on thank you very much. all right. let's turn now our attention to something entirely different investors, they continue to buy up what they perceive as safe havens amid rising global risks. it is trading just off six year highs coming off a fourth straight positive month. it's up more than 7% in august 22% in just 90 days. bringing down the executive
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director of precious metals research i'm not going to ask you about tariffs. who is buying gold where is this strength coming from >> exchange traded products so equity fact or debt fact and etf flows have risen to levels shy of the all time highs we saw at the back end of 2012 so we saw investors coming into the space and not everyone has invested in gold just yet. >> why are they buying gold? we have been here before will it have a happier ending this time? >> we see fear factors driving the gold momentum so far and safe haven appeal has come back into play. for much of last year it wasn't enough to get investors interested in gold again but this year it's become a much broader issue. the concerns of recession have
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interests and of course the growing negative yield and debt on a global basis. >> is that the big deal here the 15 or 16 trillion in negative yield we have a negative real yield on our ten year note now. the income is below the cost of inflation and the money you get is going to be worth less than zero how much is that impacting not just gold but platinum and silver and other metals. >> it's the key factor behind the rally. it's perhaps a reason why the gold rally has more legs this time as well not only are there a vast array of factors but it's expanding the investors coming back into the space. >> how long do you think gold can maintain this. is there a long-term trade >> of course the prices have rallied but central banks still
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remain supported we expect the fed to cut by 25 basis points in september and again in december and that's going to keep investors turning back to gold but in the meantime we'd expect them to consolidate. at least that would be healthy for the rally. >> a little bit of a pull back >> might be just in crypto currencies and it's a real asset. that investor hasn't changed but you could see some of the interests turning away from gold. >> long-term optimistic. could have a little pull back but that's still bullish on gold that's your view. >> that's right. >> thank you appreciate it. coming up, major changes at the world's biggest oil company. maybe at world's biggest company period period expert insight as the start of. always
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every new job. and attempt to parallel park. (electrical current buzzing) each new draft of every novel. (typing clicks) the finishing touch on every masterpiece. (newborn cries) it is humanity's official two-word war cry. words that move us all forward. the same two words that capital group believes have the power to improve lives. and that, for over 85 years, have inspired us to help people achieve their financial goals. talk to your advisor or consultant for investment risks and information. so, every day, we put our latest technology and unrivaled network to work. the united states postal service makes more e-commerce deliveries to homes
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than anyone else in the country. e-commerce deliveries to homes larry you're coming in through the sewer. you have your snorkel? got it. janet, i hope you're not afraid of heights. what's going on in here? my it staff is planning to overthrow me. they're tired of working weekends to maintain our aging infrastructure. at cdw we get the pain of outdated technology. that's why we'd assess your needs then design a secure infrastructure to make you more agile and efficient. hey guys. oh hey, boss. no more weekends. no more weekends? let's do this! mutiny's off ted. what? for infrastructure solutions you need it orchestration by cdw. 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. you know what's going up today? my poster. today, there are more than a hundred thousand p-tech students around the world.
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it's a game changer. others are surprised given the new chairman has none. >> i don't think it's surprising given the fact that he wants saudi aramco on an expedited time line and it's about funding the public investment funds. and given the broader vision
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now this chairman doesn't have any experience which is leaving some people to scratch their heads. it's about taking control of aramco and really prepping it for ipo on a very fast time line. >> so the functional operational head of aramco still remains but we know that these types of moves at the very highest level in the kingdom in saudi arabia don't come without some kind of reason. >> it's also part of a broader shake up and we have a number over the weekend we have a new head of the royal court which is also closer to the crowned spriprince they split up the energy industry they basically split that up into two separate ministries so it's part of a full scale reorganization but again i think it's about getting the ipo done quickly. they want people that are very supportive of this process and
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the question now will be where do you list it >> well, i mean, if we get it. this ipo when you say quickly, i mean, this has been the ipo gift that keeps on giving because it was supposed to happen last year and the year before. do you think it actually does happen this time >> there's now a sense of urgency and the fact that the bond issuance went better than expected it's giving them a sense that they can do it this time they're looking to do a local listing in 2020 and international listing in 2021 but the real question is where are they going to list it. >> some on their own exchange i would imagine. >> yeah. >> and then there's been reports that tokyo could be in the running. >> yeah. >> is new york off the table >> it's hard. >> a lot of political reasons here. >> it's hard with the 9/11 bill and the legislation floating around congress. we have been told that the crowned prince would like to do a new york listing
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certainly president trump tweeted he wants aramco listed in the united states. >> but that opens them up. >> people don't take track in the summer the 9/11 build would open it from lawsuits from 9/11 victims surviving families attaching the assets on a new u.s. listed equity. >> that's been the big road block in the united states and they then thought about doing a london listing but london may no longer be in the running that is hong kong and the problems in hong kong lead to concerns about it. >> what you're doing is what you do better than anybody out there. all of these things that we talk about. think about this though from aramco's perspective all of this is tied together u.k. doesn't look that good. new york has its issues. suddenly you're running out. we just listed the top stock markets in the world you're running out of big important places to list your
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stock for what may be the biggest ipo in history. >> big in japan. >> you are big in japan as well. how does this ultimately play out for aramco they go public -- >> what does it mean for saudi's broader diversity play >> beijing 2030. >> the public investment fund, their goal is to create the largest sovereign wealth fund in the world. they're looking to have 2 trillion assets by 2030. >> to go. >> is this an overstatement to go from a country that is oil based effectively to a country that is -- >> investment based. >> investment based with an oil banking. >> they're essentially trying to do abu dhabi on steroids. >> why couldn't i come up with that line. you said it.
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that was -- you buried the lead. really interesting stuff >> thank you very much on deck, british prime minister boris johnson welcoming a new furry friend to 10 downing street this weekend but is he in the dog house himself with his own parliament we'll give you the latest twists and turns. plus the top ten s&p 500 companies rewaeighted a couple o days ago and something happened that's never happened before and it has to do with oil and gas. we'll have that for you coming up so servicenow put your workflows in the cloud, huh? mm-hm. your employees must love you. thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you.
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millions of people along the southeastern coast of the united states are now bracing for the storm. many have evacuated. the british pound dropping to the lowest level in three years amid political uncertainty that a no deal brexit, opponents of prime minister boris johnson want to seek a delay for the u.k. from the eu but if that happens he would take steps to hold an early election 737 max airplanes could be out of service until december due to friction with the company and international regulators a meeting with the company and regulators was cut short when boeing did not provide technical details or answer questions about flight control computers as a result, boeing has to resubmit documents about proposed software changes. all right. let's get back to the markets and your money stock futures, they are down, triple digits down about 200
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points more than that. down about 236 right now so the losses have accelerated a bit as the futures traders start to come into their desk here on an early tuesday morning and chief financial economists a lot of talk about the r word, recession. >> yeah. the economy is still pretty good. >> do you think we can talk ourselves into a recession >> it's always possible. i remember the last recession. >> i tell you almost everyone is extremely worried. it's not just recession. it's what is the bond market telling you and very afraid that negative rates have hit europe, japan, is it coming here to the united states? that's a question that i get a lot. >> well, the other question i think is there's really just one
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question in the bond market. it's 1.5% and an inversion was that signaling it? a lot of people are interested in buying treasuries and it's not this great recession indicator like it has been in the past. >> it's possible i mean, don't forget, a lot of money in coming in from lower yielding bond countries and coming here in the u.s. and if they're overseas they have foreign exchange risk. that's always the issue. i don't know how much a flood of money is coming in but remember on august 15th, stock market drops 800 points. trump is tweeting crazy inverted yield curve. it stopped inverting back there and then august 15th all last week the curve was
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inverted and what did you hear a peep maybe a couple of hours last week the curve is inverted again. how come we're not screaming about recession? >> because we never had this level of negative yielding debt so the buying is technical rather than simply a recession indicator but isn't it true, and i think this is an important point, just because the yield curve is inverted doesn't mean -- isn't it more important how long it's inverted rather than the fact that it's now been inverted by one or two basis points for a couple of weeks. >> you have to wonder about it the last signal that we got, three month bills to bonds before the 2007-2009 recession when did the signal indicate recession? 16 months in advance i mean, is that an indicator you have a year and a half to get your affairs in order so what is really important with
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the inversion is is credit still being supplied to the economy. >> banks will stop lending and right now banks have not stopped lending. >> no, they haven't and americans haven't stopped borrowing and we're seeing refinancing is up and, you know, our audience, cnbc, we have the wealthiest audience in the world, right so we have financial professionals watching this program all day long and we love you for it by the way but i wonder if out there in the united states, and i get out there as much as anybody else, i think. if anybody is saying hey, don't buy those jeans, don't buy that car, because the yield curve is inverted i don't think anybody is saying that and i wonder if all the stuff that we're seeing in the bond market is not going to trickle down to the u.s. consumer, yet, if ever. >> those tariffs don't get completely on.
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the real drag on the economy is if the tariffs go to 540 billion and by the way it's running 479 billion and we have cut back on our imports. and maybe you have an issue for the economy where there's a substantial drag on growth that's a good 6 months away. >> i'm not minimizing it but flat panel tvs, they were $2,000 three years ago. you're still cheaper than what you were >> that's the other shoe to drop is it going to bring about a recession. >> chris, thank you very much. time now for your morning rbi and the most random interesting thing today is an incredible stat that never happened before. for the first time, exxon mobil is no longer a top ten s&p 500
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company. they updated the rankings this weekend in terms of market weight in the index. exxon mobil is now 12th. bumped out by visa deflated energy 4.5% of the exxon mobil. random and hopefully interesting. have a great day we'll see you tomorrow squawk box begins right now. >> good morning, futures are plunging after the latest round of u.s. and china tariffs took effect over the long holiday weekend. we're down anyway and there's a live report from china the pound falling to its lowest level in three years ahead of a brexit slow down and hurricane dorian stalling over the bahamas as several u.s. states prepare for the worst but hope for the best we'll take you live to look at the proposed path of the storm 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 right here on cnbc. we're live at the nasdaq market site in times square becky is off our guest host for the hour is here she is the head of u.s. equity at b of a meryl lynch. a lot going on today is like the beginning. there's a lot of beginnings. tariffs today also but beginning like a sprint, a marathon. >> to the end of the day. >> everybody is back to school this week and everything else. let's show you the u.s. equity futures at this hour looking at the dow down about 260 points. s&p 500 off 31 points. let's show you treasury yields at this hour a lot of peopl

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