tv Maria Bartiromos Wall Street FOX Business September 3, 2018 7:00am-7:31am EDT
>> announcer: from the fox studios in new york city, this is maria bartiromo's "wall street." dierdrestreet. reporter: welcome to "wall street." former reagan advisor david stockman is our spellings guest. deirdre bolton is standing by. dierdre: the u.s. economy looked strong, the commerce department released its revised second quarter gdp number thursday.
it rose to a 4.2% annual rate, higher than the original number of 4.1%. it will be the strongest in four years. trade agreements will be a big part of the future economic growth. the u.s. reached a deal with mexico earlier this week. it's trying to find similar terms with canada. in the past president trump has called nafta a rip-off and threatened to leave canada on the sidelines if an agreement can't be reached. president trump may impose a 25% tariff on $200 billion in chinese goods. both countries have imposed tariffs on each other's goods. president trump also pushing
europe in trade. he wants tariffs on all industries dropped to zero. the e.u. agreed to drop auto tariffs but the president says it's not enough. a strong read on consumer confidence helped the market finish higher for the week. it was a seller august for the indices all finishing in the green. president trump is warning google to tread carefully. on twitter the president accused google of rigging its search engine to favor left-leaning media outlets. he says he believes going the mistreats conservative ice and silences quote a very large part of this country. google denies the charges. dareporter: the gdp was revisedp
to 4.2% from 4.1%. the atlanta federal reserve. joining us is for under and chain of investment officer of the bonson group, david bonson. >> earnings growth is coming from the tax reform bill that pushed up capital expenditures. there is an increase in productivity. we were probably near the 7th or 8th inning of this bull market. tax reform brought us to the 5th or 6th inning driving corporate profits.
reporter: can you find any reason not to buy stocks? >> 2018 has seen a pickup in volatility. some of it is self induced out of this trade and tariff issue which i think was a policy mistake out of the trump administration. but volatility is normal in the market. that would be the one argument against owning u.s. stocks. fundamentally, profits drive markets. and the economic strength we are getting is very, very investable. dagen: is there anything on the horizon that you worry about. i noticed in the last week that disposable personal income in this country is up 2.9% year
over year. >> those are the metrics i'm not sure drive profits as much as we think. i would still argue that that stuff gets priced into markets. markets are discounting mechanisms. i look at the things i think are under priced in terms of their ability to go forward. the energy sector is deeply undervalued. much of the financial sector is undervalued. with some aspects under priced. we probably would not buy the full index right now. i believe there is some rich valuations out there, everybody talks about that. and i talked about it for a long time. i have been wrong in the sense it continues to go higher. dagen: in terms of apple, you look at the run apple had.
it was one all-time high after another. >> apple isn't sentencive it's extremely reasonable. apple mass the times of metrics you want. i'm treefg the amazons, netflix and facebook. you have to say it's priced richly. dagen: we have some details about the product announcement. would you buy apple ahead of the product announcement, sometime in the second? >> we wouldn't hold a stock we weren't willing to buy. we would be buying apple at these levels. but i don't know that the product cycle is the driver there. the market has an incredible way of discounting those things ahead of time.
apple is a good idea for a value stock relative to the balance sheet and free cash flow. dagen: david, good to see you. don't go anywhere. much more after this. >> announcer: let's make a deal. the u.s. and mexico striking a blockbuster trade deal. >> this whole thing about nafta >> this whole thing about nafta is much
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the market for the most of part had been impervious to all the tensions as they have been rising going into this year. >> i think the market has its head in the sand in terms of the overall thrust of protectionism coming from trump. on the other hand, this whole thing about nafta is much ado about nothing. there wasn't anything wrong with nafta, and what's going on now is negotiations because trump wants to have some kind of big p.r. stunt. the fact is what we have on the table will help mexican workers get $16 an hour. it will bring some jobs from china to mexico to make auto parts to send north. we'll raised the cost of you a toes and cars to american consumers and will be a real windfall for what i call the trade nanny in washington who will be businessing look at
30,000 auto parts for cars and ballistics and glass to see if 45% was made at $16 an hour or more and 75% was maid in north america. dagen: many people will argue it needed to be modernized baits was old going back to the 1990s and it does do things to open up markets potentially for american farmers. it provides intellectual property protections. even the "wall street journal" that was negative on the mexican slice of the negotiations. they go into things like extension of protection or gentlemen nictally noddified drugs. >> it's technical stuff down in the weeds that doesn't matter.
we import $600 billion a year and export $520 billion. there is a gap of $80 billion. it's not the end of the world compared to our real trade problems with china. dagen: let's call it what it is, these are deals being made by this administration with mexico. mexico held out as trump hates mexico and everything in the nation, not true. earlier in the week he said i love mexico and i love canada. my issue is we can repair relationships with these important allies, canada and mexico, even with europe. europe the trade minister for the e.u. saying we'll drop all auto tariffs. >> trump said i don't like that. we didn't have a problem with canada and mexico until trump started attacking them for stupid reasons.
canada. he's constantly going after the dairy program there. i agree it's a terrible government subsidized thing. but it's $6 billion a year industry. it means nothing to the american economy. dagen: but president trump is a politician and it means something to the people who voted for him. he ran on reapproving these trade deals. none of you guys in d.c. would have jobs if you didn't have great politicians winning these races. my point is, i talk to people who want better -- there was a woman on maria's show in the past week who sells cheese. she sells string cheese flavored with fruit, and she wants to be able to sell into canada more easily. >> that's fine. we have a 180% tariff on peanuts and tobacco.
we have a few of those agriculture protection thing too. but in the big scheme of things the, irrelevant political maneuver that isn't going to make jobs in america. the thing about mexico, of course they like the deal. trump is saying you have to raise wages to $16 an hour in mexico. that's good for mexican workers. he's saying 75% content. dagen: it puts us potentially on a level playing field with mexico. >> it's not even close. the uaw is $30 to $60 an hour. dagen: how is it not good. when you saw the release of the mexico deal the market cheered it. >> the market is delusional. trump is a clear and present danger to this economy with his massive deficits. dagen: we are going to get to
that. becauser indicator i looked at, you can't find one that's bad. so we'll talk about that with david when we come back. we'll be right back. >> announcer: stocks are soaring and corporate profits are booming but david stockman says it won't last. says it won't last. more david stockman says it won't last. more david stockman you're still here? we're voya! we stay with you to and through retirement. i get that voya is with me through retirement, i'm just surprised it means in my kitchen. so, that means no breakfast? voya. helping you to and through retirement. sleep number 360 smart bed. it senses your movement and automatically adjusts to keep you both comfortable. and now, all beds are on sale. it's the last chance to save 50% on the new
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is this sustainable? going to break i said you cannot find one negative thing to say about the economy. >> the profit boom is an illusion. it doesn't take intogether the one-time impact of a tax cut after four quarters and the rebound from the profit recession we had in 2016. if you go back to 2015, they dropped by 18% the next four or five quarters. now think rebound back and they would be $117 a share for the quarter. so that's 3.5% profit growth the last four years. when you put it in context it's not close to wait appears to be. and we are 10 years into a business cycle. at some point a recession is coming and profits will drop. dagen: we had a guest on
"mornings with maria" saying because this expansion didn't experience the corporate investment boom or learning boom or a real housing boom in most of of the country, that means this could go on longer. when i say i have looked at the quarterly growth numbers. current estimates for this quarter. wages growing, consumer optimism at an 18-year high. the average grob growth this year for the first 7 moist faster than it was last year. i will put it to you. tell me something bad that's going on right now. you worry about 8 months from now. >> whatever is going on isn't due to trump, it's just the momentum of the economy that's in a business economy. the 4.2% was a total aberration. you had soy bien so i -- you ha.
and uncle sam borrowed the money and gave the consumers a tax cut. dagen: there has been an acceleration in economic growth. >> it's one quarter. dagen: the 7-month average this year is 215,000 jobs. >> they keep revising the jobs data. the first six quarters under trump, and he had nothing to do with it. gdp growth was 2.6%. in the last seven quarters of obama, and he had nothing to do with it, it was 2.5%. there is no acceleration in the economy. we have an economy freighted down with debt. we have an economy that hasn't invested because the fed encouraged corporations to use
their cash flow on their balance sheet to buy back stock. dagen: investors aren't worried about the level of debt right now. they are worrywarts. they are paid to worry. and they are not because you still got yield on the 10-year treasury in the last week that was deep below 3%. >> in europe. .4. the french point 8. but the point is all the central banks of the world pivoted to qt. they are shrinking their balance sheets. they will be dropping $600 billion a year worth of bond into the market, not buying. dagen: i take issue when individual in this country, your average working folks, man and
woman who are feeling good, plenty of jobs out there, they are optimistic, they are going out to stores, spending money, their disposable income is growing and adjusting for inflation and people can't say anything good about it. >> i don't want to say anything good. you know why? we are burying ourselves in debt. washington is out of control. 10 years into the recovery we'll have a $1.2 trillion deficit. they are little entitlements run. they raised defense spending for no purpose. dagen: the president wants to freeze the automatic pay increases for civilian workers. >> i'm all for that. dagen: you just said trump is doing something good i'm all for it. >> i am all for that. but if you look at how much money he borrowed. the huge tax cut he didn't make
any evident to offset. he can't give the pentagon enough money to waste. and we are borrowing at this rate so late in the cycle. you know what happens when we get the next recession? we'll be borrowing $2 trillion a year. dagen: can you let me and my people enjoy the growth while it's happening. >> you have a few months. dagen: i'll say it's more than a few months. but i'm not going to argue it's a long weekend. more "wall street" after this. alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.
employment report. initial jobless claims and factory orders. friday we end the week with the latest jobs report. be sure to tune in to "mornings with maria" friday at 6:00 a.m. for our jobs in america special. it's a busy week on capitol hill. senate confirmation hearings for supreme court nominee brett kavanaugh next week. and we are expecting executives from google, facebook and twitter to talk about election interference. next week, wayne gretzky and bernardo hees. tune in weekdays on fox business
at 6:00 a.m. eastern. maria along with me and a whole bunch of people. we are always fired up. thanks for watching. we'll see you next time. >> i'm bob massi. for 35 years, i've been practicing law and living in las vegas, ground zero for the american real-estate crisis. but it wasn't just vegas that was hit hard. lives were destroyed from coast to coast as the economy tanked. now, it's a different story. the american dream is back. and nowhere is that more clear than the grand canyon state of arizona. so we headed from the strip to the desert to show you how to explore the new landscape and live the american dream. i'm gonna help real people who are facing some major problems, explain the bold plans that are changing how americans live, and take you behind the gates of properties you have to see to believe.