tv Countdown to the Closing Bell With Liz Claman FOX Business January 17, 2019 3:00pm-4:00pm EST
we're also seeing major gyrations. you have shown that crude has closed lower. it has just reversed, jumping from losses to gains on this breaking news that you just brought us, markets coming alive in the last few minutes as those trade headlines hit the tape. is the treasury department ready to drop, yes, drop tariffs on china, just to get a deal done? >> well it hasn't been confirmed. it has been denied but team trump according to "wall street journal" is debating lifting chinese tariffs to speed up trade talks. markets absolutely love it. the dow had been down a couple pints. it spiked up 260 points. right now it is up 129. so it is coming back down on the denial from the government that anybody is even talking about dropping tariffs but the tape tells the story here, folks. look at s&p up 16. nasdaq better by 39. we're looking at pretty big move here. good news coming as the
government shut down drags on. that is the bad us into. president trump blasting democratic leaders saying the party has been hijacked for those opposed to plans for a border wall. what we've got is blake burman live at the white house on latest breaking news on trade and we have top, both sides of the aisle discussion on this. overseas british prime minister virtually begging the opposition party to come to the negotiating table, now calling on labour leader jeremy corbyn, cut it out, end this red line brexit demand. sir peter westmacott was uk ambassador to the smites. he is here in a fox news exclusive. he will articulate how the ugly divorce could affect american business and trade. plus we were supposed to get housing starts numbers this morning. not so fast. what does that do to nobel prize-winning economists whose housing reports are eager awaited each month?
we have got him. yale professor robert schiller. he says we're in a gigantic housing boom. does he know when and if it is going to bust? robert schiller. is here. good-bye to a wall street pioneer, a guy who really cared about your money. we're less than an hour from the closing bell. let as start the countdown. ♪ liz: oh, my gosh, we have investors spinning the turn styles at this hour on breaking news after a kind of a ho-hum session where stocks were middling. we got news on potential, i stress potential of a breakthrough on china trade talks. we're off session highs. you see the spike where i want to say 267 points at the high of the session? total reversal? "wall street journal" head a headline on the tape, that said
treasury secretary steve mnuchin, ambassador to trade robert lighthizer are maybe, one or the other or both considering dropping tariffs just to get the trade talks moving along with china. well both have now in the last couple of minutes denied making any recommendations but "the wall street journal" doesn't pull this stuff out of nowhere. what is going to happen? initially the dow jones reported that the u.s. is weighing lifting the china trade tariffs as potential new gambit that could very well break the trade stalemate between the two countries. pictures speak louder than words. there you go with the dow intraday. flip it over to the nasdaq and s&p, you will see almost the exact same picture here. here is the nasdaq at its high, folks. nasdaq jumped 79 points. we moderated but well above the lows of the session up 28 whereas earlier we were down on the nasdaq by 31. you're looking at a 51 point swing.
market watchers are specifically looking at the 50 day moving average, it moved above that level on the news. that is certainly a bullish sign. here is a three-month chart. we're looking at the s&p below the 3-month high. still up 10 points. dollar suddenly weakened on the report. you can see the uk pound is stronger. that has a lot to do with extraneous headlines regarding brexit. look the dollar is something that, when you have u.s. multinationals looking at it, they would like to see a weaker dollar. that certainly helped stocks. pg&e stocks is flickering. first surging in early trading. doing opposite of the rest of the broader market reversing course. one prominent hedge fund and shareholder, blue mountain capital, is urging the california utility to fight accusation and subsequent bankruptcy that pg&e was responsible for wildfires in northern california.
pg&e face a deluge of suits from the wildfires that. blue mountain says pg&e has ample liquidity to keep lights on. investors turned it around and lights are going dimmer. down 5.25% for pg&e. let me get to the white house because these china trade headlines lit a fire under stocks in the last few minutes. you have to figure the bears were all excited today, seeing a middling market slightly lower. dow popping up nearly 270 points. we're seeing that slide back now a bit of a the treasury department has poured some cold water on the report. now we're up only 75. blake, get to it. what are you hearing? reporter: liz, i tell you what i think is noticeable here, the fact that you mentioned that the treasury department has come out and decided to put forward a statement and that statement is full throttle as it gets denying "wall street journal" report that the treasury secretary
pulling back sanctions or pulling back tariffs. the statement reads in full, quote neither secretary mnuchin or ambassador lighthizer made any recommendations to anyone with respect to tariffs or other parts of negotiation with china. this is an ongoing process with the chinese that is nowhere near completion. "the wall street journal" article also says that this was made during internal deliberations and discussions. there are ongoing deliberations and discussions at the white house for a long time. there are opposing views within the president's trade team how this should be, how this should be processed going forward and how the chinese should be dealt with going forward. the president likes that, both sides of the debate but as we also said here for months, liz, at the end of the day this is going to come down to the president, president trump and what he decide to do with president xi. we saw that in argentina. the big question going into the
dinner there, what could come forward? what could come forth. turns out it was a lot because you got the president and president xi in the room together. so when you put all of this together, internal deliberations in which some people familiar with it, saying the treasury secretary recommended pulling back tariffs. the treasury department says that is not the case at all, it seems like it is just a lot of the talks that are ongoing. remember, this 90-day window ends march first. we're still a full month away from that. again i think it is pretty noticeable the treasury department came forward with a statement to pour cold water on. >> that was pretty significant, blake. this is hitting the tape, chinese ambassador to canada, to can today, he believes there will be repercussions if canada bans huawei equipment from its networks. for those who are just landing on planet business earth, we
have to tell you that huawei is the chinese networking cell phone giant where the u.s. has asked canada, canada complied, basically arresting one of the top executives in china who had stopped by in vancouver. they arrested her. she is still facing litigation here. and now, if canada bans the equipment, worrying that perhaps china using it as backdoor to spy on other countries which is concern here for years now, now china is getting upset, saying there will be repercussions. we had the good news and now we have the questionable news when it comes to any kind of deal with the chinese. as we watch this, let's bring in the floor show traders. guys, i'm sure you have guys have a little bit of whiplash. i was sitting there looking at markets, we're down three points for the dow. how do i get this excited. it spiked 260 points on the
floor, sarge. >> my al goes kicked in, headlines kicked in, market up to 2644 on s&p. that is 50% retracement of october through dieseloff. when they came in, 2628. that is 50 day moving average. we're lasered in on algos, guys. we got them. get on e-trade, ameritrade, account, they're watching 13-year-olds crack up on skateboards on youtube. we're working. humans can beat the algos today. we got them. liz: that is fascinating perspective, some people feel, sarge, the algos, high-speed trading operations are pressing a button and retrail trader can get squashed. as we look at s&p. russell up nine points, oil turned around. gold started to go down. i think it is very interesting you say retail investor can win here, sarge? >> we can beat them.
have to be something you focus on all day. can't do something else for living then you're investor, can't be a trader. if you're a trader, sometimes you see the algos behave, the 2628 level, we're point above it holds, it goes higher. it can turn into pivot. we could go significantly lower. you have to spit it out one side or other. one thing focus focus on-line far new year, february 5th. this would be seen by china fees people a tremendous overture by that date. liz: i like your thinking. larry shover, it is the year of the pig on wall street. the expression on wall street pigs get slaughtered. you don't want to be too greedy. larry, who is buying what at this moment? >> it has a chasey feel to it if that is a word. a lot of people, upset they didn't buy the market when we hit the low at 2350, 2360 area.
i think most of the mart money, some institutional money is thinking that the last 300 points the market just was in reset mode. the next 100 points going forward it will be tougher, but most people do believe that the s&p 500 based on earnings, should see 2700 in the near term but not going to be easy to get there. so there is buying. it is methodical buying. smart money is doing that right now based on earnings projections. liz: well, speaking of earnings, phil, we got to talk about banks here. morgan stanley reported, it was a disappointment. they're having a little bit of a struggle, sort of wrapping their arms around volatility of the previous quarter here and you do have morgan stanley going lower at the moment. it has been a real checker board i believe for earnings so far. jpmorgan, goldman sachs, killed it. and you know, then you got bank of america, citi, all of these names. this checker board has people wondering do we go into
financials? >> i think you do. i mean at the end of the day the banks that have embraced new volatility did very well. the other ones got caught flat handed on it, didn't adjust to it didn't do very well as to morgan stanley. if you look at the amount of money banks are making right now it is incredible and i think that is going to continue. even though you have one bad quarter of trading and volatility i think banks as sector really look solid. if you're in this environment right now, it is the best of both worlds. you have potentially interest rates that are off the lows. they may not go higher as aggressive as people thought. you have got trading volatility if done right can really enhance the earnings. but as a sector, the sector is going to kill it. liz: listen, i love you guys, thank you on a day where we're seeing whipping fast movement in the markets. everybody stay with us. gentlemen, stay with us. one of the most frustrating
things is get punished for something you didn't even do. that is what home depot is experiencing in this final hour. we do have the 48 minutes before the closing bell rings. there it is at the very bottom, even with the market turning around and higher, jpmorgan comes out and says the home improvement chain is one of the best retail stories out there, but then, jpmorgan cut its price target on home depot to $5 to 203 bucks, because paint giant sherwin-williams warned it might miss on sales estimates. so you have home depot moving down 2.83 cents, to $174 and change. speaking of hopes, one of the most respected voices on home prices coming up. nobel prize-winning yale economist robert schiller is here exclusively whether the gigantic housing boom is about to go bust. if so and when. we'll get him on the market moves right now. we're some monning the wizards along with
"harry potter." sir peter westcot thinks it will take more than a queen, king or wizard if hard brexit comes to pass. it will take total magic to complete a trade deal between the uk and the u.s. our exclusive interview with the former uk trade ambassador is next. the dow up 94 still. ♪ liberty mutual customizes your car insurance so you only pay for what you need. great news for anyone wh- uh uh - i'm the one who delivers the news around here. ♪ liberty mutual has just announced that they can customize your car insurance so that you only pay for what you need. this is phoebe buckley, on location. uh... thanks, phoebe. ♪ only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪
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liz: by the way, we should tell you that the ten-year treasury yield hit session highs, actually hit three-week highs, the minute that news about the possibility which has been denied by treasury, but that stephen mnuchin, treasury secretary, is considering dropping tariffs or lowering them on china to get a deal done. as soon as that news hit the tape, you saw three-week highs for this yield which now stands for the ten-year at 2.74%. folks, let me just reset the button here. there are two different hourglasses right now. one ticking down on the china trade deal, actually it's a truce right now, come march it's over and the president says he will put in new tariffs. then you have the one regarding brexit. there's a new deadline there but we need to know what our viewers are most concerned about and how both dramas might impact their investments which leads us to our next guest. the former british ambassador to
the u.s. who has dealt with trade on many different levels. we welcome sir peter westmacott in a fox business exclusive. to the breaking news and the implications at the moment, treasury's denying it. they say no, we are not considering dropping tariffs on china just to calm markets and hasten a trade deal, but "wall street journal" doesn't pull this out of the air. there is a possibility that could be happening behind the scenes? >> well, this is a story on which i haven't got inside information but it would not surprise me because the way in which the president slapped the additional tariffs on china took a lot of people by surprise, and because of the dependence of a lot in the industry, especially the automobile industry, on imported steel, it has tended to make a lot of u.s. manufactured goods less competitive. in order to de-dramatize the deal with china, china does not want a trade deal with the
united states and is itself looking for ways to improve imports to the united states, it seems to me not impossible. of course, we have to wait and see whether this story is confirmed. it's not surprising to see the markets rally a little on the back of that, because frankly, nobody has an interest in a trade war between the united states and china. liz: let's talk about trade and sort of shift this a little bit, if we can pivot to the uk and the situation going on there. you still have markets in europe down because we don't have clarity on what's going on with brexit. i will say this, and you've got 40 years of diplomacy under your belt so i'm really interested in hearing your perspective on this, as the world watches, theresa may, the prime minister, is saying she's now going to go for brexit plan b. we don't know what that's going to look like but already, many different parties including labour and the northern ireland party, not to mention scotland, say we won't even go to the table unless you take hard brexit off the table. is that likely? because you would have to change the law to do that, right?
>> no, you wouldn't have to change the law to do that. what they are saying is that hard brexit is such a terrible option because it disrupts economy, life, travel, society, energy supplies, flights, driving license, taking your pet dog across the channel, a whole lot of stuff. it's terribly disrupted if we have a hard brexit and markets i think at that point would go sharply down. so the other political leaders whom theresa may is trying to reach out to at the moment to see if there's some sort of conciliation that can be achieved between different parties on some form of brexit deal, they are saying let's remove that really hard option. now, there are different mechanisms that you can use to remove it. on the one hand, you can say politically the government won't go along with it, but of course, as the experts know, the default position if there is no agreement on another deal is that we do crash out with no deal on brexit on the 29th of march. so there's a number of different
things that can be done and there is one particular motion which has been tabled by a couple conservative mps which would have the practical effect of ensuring we could not crash out, because it would mean that we would withdraw from the article 50 process. in the event there wasn't an agreement on something else. liz: may i ask you this, sir peter, because looking toward our viewers and their interests, there seems to be real interest on behalf of brexiteers and certainly here in the united states for a bilateral uk/u.s. trade deal. but if they are beholden, if the united kingdom is beholden to the european union in some way, shape or form and there's a brexit with a deal for the eu to be happy, does that impede the chances of a clear bilateral trade deal between the uk and the u.s.? >> absolutely it does. because it is only if you crash out as we say, and you sever all your trading links with the european union which exists at the moment, the single market
customs union, only if that goes is the united kingdom free to negotiate its own free trade agreements with other countries so that would be a problem. on the other hand, i would say this is something which has been dressed up as being a huge shiny objective which sounds great, but in practice, it would not be the answer to all of our prayers. we already have more business and investment with the united states than any other country in the world, and if we were left to negotiate a free trade agreement all by ourselves, it would take a very long time and there would be a lot of very difficult things like financial services and agriculture and beef hormones and all that kind of stuff which would be very difficult to negotiate. in practice, our trading links, our investment links with the united states are probably better served by the united kingdom staying inside the eu and being part of the european union negotiating bloc which does a free trade agreement with the united states. that's what we were trying to negotiate a couple years back. liz: well, we are all waiting and watching, because we know that these headlines have tended to move our markets. sir peter, thank you very much for joining us.
>> you are very welcome. liz: all right. when we come back, we are going to continue to watch these markets which are moving like a freight train at the moment. now, they slowed down just a bit but we are coming right back with new news on the former ceo of cbs and charlie gasparino. don't go away. this is huntsville, alabama. aka, rocket city, usa. this is a very difficult job. failure is not an option. more than half of employees across the country bring financial stress to work. if you're stressed out financially at home, you're going to be too worried to be able to do a good job. i want to be able to offer all of the benefits that keep them satisfied. it is the people that is really the only asset that you have. put your employees on a path to financial wellness with prudential. bring your challenges.
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liz: okay. charlie gasparino is not here today. but his reporting vapor trail is. in a move that charlie foreshadowed weeks ago, disgraced former cbs chief les moonves is officially fighting back against the cbs board and its decision to deny his $120 million golden parachute. lawyers for moonves calling the board's actions quote, without merit. the former cbs chief continues to deny multiple allegations of sexual misconduct.
the board nixed the long-time ceo's multi million dollar severance package last month after an investigation by two law firms concluded moonves not only willfully misled both cbs and investigators but violated multiple company policies, putting him in breach of contract. so the two sides are now headed for arbitration. investors don't seem to be worried about the outcome here. stock is up nearly 2% right now. meanwhile, wall street is waiting on netflix. earnings expected after the bell following news this week that it's upping its subscription prices. goldman and guggenheim both boosting the price target by $20 and $30 respectively. but you know what, these guys are cheerleading just as the entire media world appears to be pivoting to compete with netflix's streaming model and clearly, somebody might get it right. reporter: that is exactly right. netflix does have a first mover advantage in streaming but more competitors, to your exact point, are coming online so amazon, disney, apple, hulu, at
& t, they already either have a streaming division or activity or will soon be streaming their own content. basically, netflix is going to have more competition in the future versus less. now, as for this subscription price hike, there's a group of analysts who say it proves that netflix pricing power is there, no one is really going to cry about $2 extra a month. then there are analysts that say with more competitors on the way, netflix has to watch its step. if we look ahead, here's what analysts are forecasting for the company. 24 cents per share in earnings, if netflix does report that, that's going to be a drop of 42% from a year ago. as for revenue, $4.21 billion, a 28% jump if that's what comes in. wall street's attention, though, is really going to be on subscriber growth. i think you can just say this is the key metric. in october, netflix said it would add a total of 9.4 million new streaming subscribers so 1.8
million domestic, 7.6 million international. analysts, a little bit less optimistic, i have to say. anticipating 9.2 million new streaming subscribers, 1.74 domestic, 7.44 million international. that metric is going to get a lot of attention if there's any variation either upside or downside. i think we will see a lot of volatility in the after-hours trade. cash burn, something else to pay attention to. netflix has $3 billion of negative free cash flow, up from $2 billion in 2017. so creating big content, well, it costs big money. now, for netflix, bird box, black mirror, very successful, probably are actually even going to add to the figures we will get in just about a half hour's time. probably even get a shout-out on the earnings call. but longer term, more investors just want to see how a company is going to handle its debt and its cash flow. again, any deviation to that number, any hint of it, is going to bring a certain amount of volatility. in the meantime, though, as you
know well, that stock has outperformed over the past 52 weeks, something like 60% better than the s&p 500 so people who have owned the stock for more than 12 months not complaining too much. liz: i know, but you want to look forward and you have comcast and disney, and everybody coming in saying we are going to stream. reporter: crowded field. liz: indeed. thank you. keep it right here on fox business. at the top of the hour, when netflix earnings report comes out, connell and melissa will take you immediately inside the numbers. just as important, the reaction after hours in the stock. d.c. taking it on the chin. with the closing bell now ringing about 28 minutes from now, it's not just the nation's capital that's hurting from the government shutdown. the closure is now hitting businesses dependent on certain government agencies. congressman dan kildee, democrat from michigan, and republican congressman lloyd smucker of pennsylvania. they are standing together and we will ask them together how their constituents are feeling
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liz: all right. we are now getting the white house response to the breaking news we brought you at the top of the hour that has really punched up our markets. the white house spokesperson lindsey walters is now saying quote, no new tariff decisions have been made. okay, watch the markets right now, because okay, s&p is up 18. i'm just going to mark it there. no new promises have been made. we are focused on the current 90-day period and the expected high level visit by china vice premier at the end of the month. dow still up 145 points, s&p still up 18. the breaking news, in case you're just joining us, is the
"journal" reported that maybe steve mnuchin has been considering dropping the tariffs on china in order to speed up, hasten this trade deal discussion with china and calm the markets. well, the markets liked it even though everybody is denying it. let us bring in both sides of the aisle here on this republican pennsylvania congressman lloyd smucker joining us along with michigan democrat dan kildee. before we get to what we wanted to talk to you about which is what's going on with the government shutdown, let me get your response as you both come from districts that are affected by tariffs on this. congressman kildee, you first, being from michigan, it's obviously a big rural area with some commodities that have been affected. what do you think? would you like to see maybe tariffs dropped? >> actually, lloyd and i were talking about this during the break. we have a lot in common when it comes to these issues. we are trade-sensitive states and we benefit from more open opportunities particularly to
sell into markets where we see trade barriers. i would like to see a rational approach to bringing those tariffs down. i had a meeting today with mr. lighthizer at the ways and means committee and i saw no indication of anything such as what was recently reported. if there's going to be a change it would seem to me it would be in a more methodical fashion which i think makes more sense. liz: okay. that's interesting. you met with lighthizer and he didn't tip a hand in any way, shape or form there. congressman smucker, tell me what you would like to see as it pertains to these tariffs on china. we know china likes to save face so maybe if you are trying to read your opponents, you have got lighthizer and mnuchin thinking let's give them a bump. >> my district is a big ag area as well as manufacturers. they have been very pleased with what the administration has been doing in resetting our trade agreements that we have with other countries. you know, i was just in a meeting with peter navarro
yesterday. his belief and the president's belief is that we have been in a trade war for a long time, we just had things stacked against us. big dairy in my area is very, very happy with the new negotiated agreement with canada, which removes some of the tariffs they had been placing on our dairy products. it's very very important to the farmers in my district. you know, this is news that we will hear more about, i'm sure, in the next few days, but the goal is the same there. we want an agreement, the administration wants an agreement with china that is working for the american manufacturers and the american workers. liz: okay. now let us get to what's going on with the government shutdown. there is a sense among the millions like us in the american public that republicans and democrats do not talk to each other anymore. congressman kildee, is that true, or is there communication behind closed doors, across the aisle about how to get over this impasse and open the doors of the government, get 800,000 people back on the job? >> well, generally speaking, there is a lot more across the aisle conversation than i think often gets reported.
i think in this instance, though, there is some disagreement, there's no two ways about it. my own personal preference would be that we move ahead with the country and the government where we agree, open up those aspects of the government, and where we disagree, continue to have that debate in a robust fashion. this is one of those times where there is i think some disagreement as to what form border security should take. we ought to have a robust debate. it's just my view that we should never use the threat to the economy that a shutdown brings in order to use that in leverage in one of these debates. liz: how, congressman, do we get over these barriers and on top of it, it becomes very serious for districts like yours and congressman kildee's, where moody's is estimating that some $2 billion in small business association loans are just not getting to small businesses. i would imagine there's some in your district as well. >> i agree this is no way to do business in congress in the
greatest country in the world. we were all sent here to do what we thought was right for the people and that did not include 800,000 government workers not getting paid but i will tell you this. i was in a meeting at the white house yesterday, the president invited a small group of both democrats and republicans to talk about the shutdown and to talk about border security, and i got to tell you that the president continues to be committed to the security and safety of the american people. he continues to be committed to gaining operational control of the border, but at the same time, he's ready to negotiate. he has a variety of proposals out there, including technology, including more resources for our border security agents, changes to the laws that are being taken advantage of and he believes a physical barrier is important, as do i in some areas. but he is ready to talk. no one is proposing a border from -- or a wall from coast to coast. we need to get these negotiations going. liz: congressman kildee, before we go, notwithstanding the fact
the president very clearly said that he would have no problem owning this shutdown, democrats calling the wall immoral and then you have steny hoyer coming out, a democrat, saying i don't think the world immoral is really right. there are democrats who want border security and yet the narrative is being controlled by people who say that you don't. which is it? >> well, we clearly want border security. we are american citizens. we want to make sure our borders are safe. i think there can be an honest disagreement as to what form that takes but i think the more important point is that we ought not shut down government in order to get what we can't get through the normal legislative process. liz: great to see both of you. thank you. congressman dan kildee and congressman lloyd smucker. democrat, republican, we like to see you guys stand together. we will invite you back. thank you. >> absolutely. >> thank you. liz: assessing the damage. the closing bell 17 minutes away. not damage with the markets. we do have the dow up 127 still. but the trump administration doubling down just two days ago,
putting a tenth of a percentage point price tag on growth per week due to the partial shutdown. but is the white house undershooting or is it overstating the economic consequences of this d.c. battle royale? the man who will tell us, we hope. nobel prize winner, yale's rock star economist robert shiller standing by with the real cost analysis and much more. i wanna keep doing what i love, that's the retirement plan. with my annuity, i know there is a guarantee. it's for my family, its for my self, its for my future. annuities can provide protected income for life. learn more at retire your risk dot org.
vanguard group died in bryn mawr, pennsylvania last night. he was born the year of the great crash and depression, 1929. i was honored to know john for 20 years. he cared deeply about his customers at vanguard. bogle fought bitterly and often and hard against high fees and he was the king of index investing, where people could have exposure to the markets but didn't have to pay so much for it. john bogle was 89 years old and he will be missed. joining us now in a fox business exclusive, nobel prize winning yale economics professor robert shiller, also co-creator of one of s&p's national home price index. i know you were a compatriot of jack bogle's. must be a tough day for you. >> i admired him. integrity is, he was living proof that integrity is a long
run good strategy. it goes way back to his undergraduate days at princeton. he wrote an essay about mutual funds and are they serving the public. all through his life, he was working to make them a better service to the public. ultimately, it paid off. liz: he had integrity, he was that honest guy on wall street. i'm glad i wasn't overstating it. he was just one of the greatest. let me turn and shift to what's going on right now, and we want to pick your brain a bit first on the economic effects of the shutdown, partial shutdown of the government. the trump administration had to rejigger its initial estimates, and now it is pretty much double what they had thought would be the attack on the gdp. it's now going to be, they say, .13% each week that the shutdown goes on. that is knocked off gdp. is that what your research and models are showing you? i'm interested to know, higher,
lower? >> well, i would say i'd like to suggest a longer term. the .13% you described is short-term. it's inconvenient. i'm a little bit annoyed. i'm leaving for the world economic forum next week. i don't know if i'll get there with the possible tsa problems. i probably will. it's at that kind of level of annoyance, the short run impact. but the longer run impact is a loss of trust and a sense of polarization that i think inhibits really good business dealing. that's hard to put a number on. but ultimately, one thing that's great about america is that for centuries, we have trusted each other and we have stayed within the rules and we play honestly. that ultimately is damaged by
the kind of discord we see at this present time. liz: so, you know, i deal in numbers here, i'm interested because if this goes on for a quarter, suddenly gdp goes from what people hoped would be at least 2.75% to 0? >> i don't know. that sounds high to me. but it depends, we'll watch and see. right now, it hasn't affected except for the government employees, it hasn't affected most of us very much. i really think we have to think long-term and that's one thing bogle i think, you mentioned before, was advocating. in the long run, we have to stay the course, and stay true to our principles. liz: all right. let's talk about the principles of the housing market. you called the current boom in housing gigantic. what do you see, though, because the housing boom for this modern era seems to be slowing just a little bit here, as interest
rates tick higher. are we going to see some type of bubble burst on a smaller scale certainly from the financial crisis, but if so, when and what would trigger it? >> i figure just looking at the magnitude of home price increases, we are going through the third largest boom in home prices since 1890. there was a -- 1942 to '47 boom, then there was a 1997 to 2006 boom which were both bigger. this is a pretty big boom. i think to me, it makes the outlook uncertain. if you look at a plot, it looks very reasonable to suppose that home prices would fall, you know, substantially in the next few years. i think that's a possibility. on the other hand, these things are hard to forecast, and home prices are still in real inflation-corrected terms overall not even back to the level they had in 2006. liz: okay. well, we certainly don't want to
see that kind of froth, but thank you so much for joining us. you know, are you worried at all about anything, anything keeping you up at night? is it student debt? >> student debt is a significant problem for a fraction of the population. you know, in terms of predicting the housing market, it's a factor but it's not a huge factor. the total student debt is about $1.5 trillion at this time which is dwarfed by the size of the housing market. it does affect starter homes and young people's decisions. in some cases, heavily. liz: thank you. >> it's a concern. liz: it is, i know it. professor shiller, thank you for joining us. we'll be right back. it's absolute confidence
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china to get a deal going. burke financial strategies. just on the headline. the dow moved more than 350 points. swinging, we still see gains right now of 144. but how do you work that in making decisions for your clients? >> what is crazy, if you look what happened with third quarter earnings, which were announced, three months ago, we had the earnings growth of 26%, and then what happened in the fourth quarter? stocks went down 1%. why? china. so certainly what has happened here is that's become more important in earnings. why? because it drives earnings. look what tim cook said at apple what happened to them in china. what we're trying to do now is read through the ceo's comments. and even now, you know, a lot boeing on. i remember seeing comments from ceo of citigroup, who said that it looks like people are causing their own, talking their way into recession. then yesterday larry fink said,
2019 feels good to me. so contradictions. liz: so you like, knowing what you know, state treat, amex, comcast? >> yes. so we like bargains. so we'll talk to two different bargains with comcast and state street. comcast is it just, hasn't gone anywhere while earnings have gone up. that creates a bargain a little bit because of the netflix effect. they have a lot of other things besides cable. you have state street down almost 40% still after 11% rise this year, despite great earnings and great revenue growth. liz: amex a member of the dow. netflix, of course, you know comcast is jumping into to be a streaming competitor. netflix reporting after the bell. we'll put the picks up on lizclaman.com. all your social media. >> great to see you,.
liz: liz: great to have john burke. it has been a volatile final hour. treasury yields three week highs during the session. [closing bell rings] that will do it for "the claman countdown." "after the bell" will pick up all the headlines and more. connell: a lot going on. final hours of trading following that report the u.s. is considering easing up on china tariffs. the dow certainly finishes i here. up 163 points. third straight day of gains. s&p 500 and nasdaq both ending in the green as well. that is a three-day winning streak across the board for the markets but that was then this is now. a lot to do. welcome to the show. i'm connell mcshane. melissa: i'm melissa francis this is "after the bell." we're seconds away from netflix earnings, results that could move markets tomorrow but here's what is new right now. grounded, president trump firing back at nancy pelosi canceling thing how