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tv   Varney Company  FOX Business  August 5, 2019 9:00am-12:00pm EDT

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willing to work across the aisle right now, especially in an election year. i'm concerned. dagen: on both sides of the aisle, demonization comes first. that's a problem because again, you alienate those people you need to come together with you. thank you so much, lee, jack, mitch. mr. varney, take it away. stuart: thank you, dagen. good morning to you. good morning, everyone. financial turmoil worldwide as china starts a currency war. overnight, china dropped the value of its currency to an 11-year low. that is their counter to the president's tariff threat. it is an escalation. it is financial confrontation. president trump calling it currency manipulation. do not underestimate the impact of the continuing problems in hong kong and chaos in hong kong. the place was virtually shut down over the weekend. this is president xi's backyard. the instability poses a threat to his authority in the rest of china. it's part of the trade talks. now look at this. a selloff on wall street this monday morning, big-time.
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without getting technical, the shift in interest rates has raised the risk of recession. bad news for investors. the dow is going to be down 370 points. that means we are down about 1,000 points from the middle of last week. the s&p 500 down maybe 45, 1.5%, and the nasdaq, that's on track for its longest losing streak in three years, down big-time across the board. look at this. talk about a flight to safety. money pouring into u.s. treasury bonds and yields are tumbling. the ten-year, the benchmark interest rate, now yields just 1.78%. if there's any silver lining here, it's the likelihood of even lower mortgage rates in the immediate future. the price of gold, that is a six-year high. that is also part of the flight to safety. bitcoin, bitcoin, money is flowing in there, too. it's back to $11,800 per coin, up more than 20% in the last
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week. here's what we have to start the new week. a currency war, a prolonged trade fight probably, a stock market selloff big-time and a universal flight to something, anything, that is considered safe. "varney & company" is about to begin. lot of things are in the works, lot of good things. we have done much more than most administrations and it's not really talked about very much but we've done actually a lot, but perhaps more has to be done. but this is also a mental illness problem. if you look at both of these cases, this is mental illness. these are really people that are very very seriously mentally ill. stuart: that was the president addressing the deadly shootings over the weekend. he will be making a statement in our next hour and we will take
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you there live, guaranteed. now, china answering president trump's tariff threat by devaluing the yuan, its currency. what's happening over there is affecting stocks here. look at this. stocks are going to open sharply lower across the board, down nearly 400 on the dow. we have a tweet from the president. here it is. china dropped the price of their currency to an almost historic low. it's called currency manipulation. are you listening, federal reserve? this is a major violation which will greatly weaken china over time. market watcher, i should say china watcher michael pillsbury joins us now. this surely signals a long, drawn-out trade war. what do you say? >> i don't want to exaggerate how long and drawn-out the trade war will be, stuart. i think this is pretty normal negotiating tactics. it began back in early may when the chinese reneged on a 150-page agreement that i was very optimistic about. it covered everything, the agreement covered structural
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issues, china's purchasing more of our stuff. so some hard liners came in in late april and wanted to redo and test president trump. he's simply pushing back and saying no, let's get back to our original, very very detailed agreement in early may. so i don't see this as the end of the world at all. stuart: not the end of the world, but there's no real chance of a significant breakthrough in the immediate future, is there? i mean, who's going to blink? both sides would lose credibility if they blink. >> no, i think the blinking part of it implies a huge concession. when the two sides were so close together, just as recently as three months ago, it's not like a huge move is needed by either side. the problem in washington is president trump is under pressure from the democrats to be tougher. this all began when chuck schumer, senator schumer, did a tweet back in march saying president trump should raise the tariffs all the way to 25% on
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all chinese exports to america. nancy pelosi has been similarly critical that the president is not tough enough and actually, it's almost funny, bernie sanders said if i were your president, i would declare china a currency manipulator on day one of my presidency, as president trump originally promised to do during the campaign. so you've got this pressure from the democrats, you've got these hard liners in beijing who are tested trump at the last minute here to see what will happen and frankly, what's at stake to some degree is relatively minor. it's the taxes or the tariffs on christmas toys and things that will be coming due in november-december. don't forget, these tariffs are september 1st so the president can still take them off during the month of august. we're still in the kind of bargaining situation right now. stuart: what role does hong kong play in all of this? because you've got unrest continuing over the weekend. what role does that unrest play?
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>> it plays a big role. i think the chinese are looking at president trump's long-term intentions. does he see china as an enemy, is he out to strangle them and really cause great damage to china that you can't trust him which i think is wrong, but some americans say that and there's a letter sent out a month ago, 180 china scholars claim he's treating china as an enemy. if you look at the real words of the president, he's not cracking down on the -- he's not treating china as an enemy. he didn't encourage the demonstrators in hong kong. there's a lot of things he's not done, as what you might call them anti-china nature, so i still see trump as a friend of china who is trying to get to a much more high level trade and investment world between the two sides, and a lot of this noise in between from trump's critics, whether they're democrats or the china experts who signed the letter, this is confusing everybody and making people think the situation's worse than it is, which i'm still
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relatively optimistic. stuart: we will leave it at that. it's not the end of the world, calming some fears. thank you very much. >> we need to have some trust in president trump's negotiating skills. they're pretty good. stuart: okay. got it. thank you very much. more on china. losing its position as top trading partner with america. tell me more. susan: that's right. in fact, they are looking at the smallest share of the u.s. market since 2008. imports down 12%, exports, u.s. exports to china also down 19% and as you know, beijing vowing to retaliate on those tariffs as well. this is a big deal for a big trading nation like china because the u.s. is their biggest market. so i would say that this probably hurts china more. also, when we talk about the trade deficit over and over again, economists say it doesn't really affect the u.s. economy, it actually does according to "wall street journal" analysis. it's actually impacted gdp 3 of the past 4 quarters. stuart: they are no longer our principal trading partner.
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interesting development. very interesting. let's get back to your money. forgive my language but all hell's breaking lose this morning. want to bring in dennis gartman. dennis, this is my opinion. it's going to be a long, drawn-out trade war and i think that's a negative for the stock markets. what do you say? >> it's clearly a negative for the stock market. it's been a negative for the stock market for the past several weeks. it has become a more serious negative for the stock market and shall continue to be so. we have two gentlemen, president xi and president trump, both of whom are strong individuals, both of whom are now losing face, both of whom are trying to get the other to lose even more face. i'm afraid this could be protracted and go on for a period of time. i wish otherwise. the gentleman from the hudson institute, i hope is properly optimistic but i fear that he's improperly so. i think this is serious and could continue for weeks, if not months. we don't have a scheduled meeting until september. stuart: okay. now turn to interest rates. you have seen this, dennis.
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the yield on the ten-year treasury is 1.78%, i think it is. yeah. 1.78%. is this a dangerous race to the bottom? >> well, first of all, let's understand 1.78%, we are still several hundred basis points above that which you do not earn when you put money to work in germany, for example. i think it's negative interest rates are 40 basis points on the ten-year there so you are still getting, what, 210 basis points more for investment in the united states. yes, it is a race to the bottom and this is going to continue for awhile. as long as there are $13 trillion to $14 trillion worth of negative interest rates out there from the industrialized countries, we are still the dominant country, we are still the highest interest rate to be earned and still the safest place to put your money, so money comes here. today it's a different story. today, the japanese yen is getting extremely strong, as i like to say as mr. and mrs. watanabe get fearful and take their money back to japan. but this is a race to the bottom as far as interest rates are
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concerned. there's more to be done. stuart: we shall hear about that later. thanks very much. talk to you soon. back to the market. look at this. we are down, what, 380 points on the dow industrials. that's the best part of a 400-point drop. coming on top of last week's decline, this is a sharp spiraling down. ashley: look at the nasdaq, down 2%. stuart: yes. not good. nasdaq down 2%. that's a drop and a half. 160 points down for the dow industrials. take a look at this. the white house. president trump is expected to make a statement on the weekend's mass shootings. that will be at 10:00 eastern time. you will see it live right here. the "wall street journal" reporting that president trump could be revealing his health care plan next month. dr. siegel is on the show. i want to know, he's a doctor, what's the one thing a doctor would like to see from the president's health care plan? boeing reportedly reworking the entire flight control system of the max jet. boeing's hoping to have the fix in place by the end of next
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month. the stock, though, way down this morning. next, we have a man who knows more about retail than almost anybody. he's going to tell us how the trade war with china and another possible round of tariffs could affect the industry. the retailers. more "varney" after this. know w. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪
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there's a company that's talked than me: jd power.people 448,134 to be exact. they answered 410 questions in 8 categories about vehicle quality. and when they were done, chevy earned more j.d. power quality awards across cars, trucks and suvs than any other brand over the last four years. so on behalf of chevrolet, i want to say "thank you, real people." you're welcome. we're gonna need a bigger room.
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stuart: 16 minutes to go before we open the market and believe me, this monday morning it's going to be a huge downside move right at the opening bell. the dow is off way over 300 but the nasdaq, that's the one taking it on the chin. technology down, down 2% on the nasdaq, 16 minutes before the open of trading. never mind the white house's restrictions on huawei. sales of huawei products getting a boost inside china. is that what you might call patriotic purchases? susan: i would call it patriotic buying spree. huawei of course on the u.s. trade blacklist and virtually brought to its knees if indeed
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those parts are not being able to be supplied to huawei in the future. huawei sales in china rocketed up a third in the second quarter and their market share is sitting at a record of 38%. if huawei overtook apple last year as the world's second smartphone shipper in the world, and this is a quarter by the way where apple is struggling. apple saw its sales fall in the quarter. the fact that more chinese nationals are thinking basically they are being bullied by the u.s., we are going to go buy huawei phones. this rhetoric has also hurt u.s. brands in the past. remember in july 2016, with the south china sea dispute and mcdonald's, kfc saw their sales fall 1% in china. so this tension, this global tension impacts western brands in the chinese market. stuart: everybody retreats into their own club, buys within their own club. got it. thank you. let's stay on china, talk about the impact on retail here in the united states. jerry storch is with us, a man who has run countless retail
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operations, including toys "r" us. how is this going to affect me and consumers? am i going to be paying more for back-to-school items, for christmas and holiday items? >> no one could argue this is a good thing, but i do believe that the pain to consumers has been greatly exaggerated. this really is not catastrophic. mostly because retailers will take action. the first thing they will do is go back to suppliers and renegotiate their prices. that will not be a difficult conversation, particularly given the devaluation of the yuan because then they can afford to charge less for the product. secondly, if they can't do that, will retailers raise prices. you are dealing with $300 billion worth of goods with this 10% tariffs. consumers' pain in the u.s. is around $14 trillion so the net effect to any individual consumer would be a few tenths of 1% at most, if anything at all. i think there's been a little bit of hysteria about this.
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not saying it's good but i think the effect is exaggerated. stuart: let me try to work this out. if you have a product valued -- china sends us a product valued at, say, $100, when it arrives at a port in america it's valued at $100 but they just devalued so it's not worth $100. it's discounted. we then impose a tariff on it that puts it back up to the $100 price. so it's a wash. is it possible to say this is a wash? >> that's why they're devaluing the currency. the way the math works, say it's a $100 product like you posited here. if the devaluation will take that down to $91, so 9% devaluation, then it goes in basically at 91 cents, you add the 10% tariff you are back to $100. that's assuming exactly those ratios and that math. that's also assuming you haven't renegotiated and the other things the retailers are going to do.
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that's why everyone is upset about devaluation. countries do that when they want to become more competitive in exporting. that's what's going on with china here. stuart: true to say this is a currency war? >> well, there is certainly the beginnings of a currency war. i'm not worried about what's happened so far. i'm worried about what happens down the line, what further complications may be if people get into a firing war and keep escalating the battle. right now, again, this has been exaggerated, in terms of the impact on consumers, using words like pain and things like that. you saw retail stocks decline 10% last week on this. the math doesn't remotely approach anything like those numbers. i think this is a little bit of an exaggeration. but if there are further actions down the line and this gets kind of crazy out of hand, just like any war, you never know what can happen. stuart: i want to ask you about the flagship stores closing in new york and chicago. you know, i see all kinds of high end stores just closing their doors and shuttering up even on fifth avenue, new york. what's going on? >> hey, look, the u.s. probably
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has two to three times as much retail square footage as we need. meanwhile, sales are shifting out of bricks and mortar on to the internet. that double whammy is causing a dramatic decrease in the number of shopping locations. that's just going to increase. apparently if we were to get tough, right now with consumers on fire, it would only accelerate. as for the flagships, many of these were built as branding locations. they never did make any money. particularly if you charge them a true cost of capital or if you brought some of these legacy rates up to market values, then you would see you were basically losing money on these shops. so as retail has gotten tougher, smart managers are closing their stores. i think a lot more of that is going to continue. stuart: ouch. good stuff. thanks very much for joining us. we appreciate it. >> thank you. stuart: now the market will open in about ten minutes' time. we are going to open sharply lower. look at that, especially the nasdaq, technology stocks really taking it on the chin. i'm going to pause now for a
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stuart: the parent company of this network is buying a majority stake in credible labs. credible is a marketplace for information about consumer lending, mortgages, school loans, that kind of thing. now look at the futures market. we've got five minutes to go before the market starts up. we're looking at a huge selloff in stocks. i put it to you, ashley and susan, huge selloff in stocks and a huge flight to the safety of american treasury securities gold and even bitcoin. susan, get me running. susan: i think it's a big deal china is devaluing its currency with the $10 trillion economy, second large nest the worst in . ashley: look at the effect it's having in europe and around the world. i don't know whether this portends a recession. we are going lower on rates because we have to, because we have to follow suit with
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everyone else. i'm not convinced it's a recessionary sign but we'll see. stuart: okay. four minutes to go. we will open this market. what a way to start a monday, down, down, down. we'll follow it for you. back after this.
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stuart: it's going to get ugly.
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we are about 15 seconds away from the start of trading this monday morning and we confidently predict a sharp downside move for all three indicators. dow, s&p and nasdaq. it's a sea of red. that's what you are going to see. here we go. three seconds until the actual start of trading and we're off, we're running. i do expect to see a great deal of red ink expressed on the left-hand side of your screen and the right-hand side, too. right from the get-go, we are down 327 points. that is 1.25%. as i said, i can see only one of the dow 30 that's up. coca-cola coca-cola. the s&p 500 down 1.5%. that's a 45-point drop. this one's taking it on the chin. technology, down 2.25%. that's 179 points down. ouch. the ten-year treasury yield as of right now, 1.78%. the price of gold, six-year high, $1,475 an ounce. the price of oil, despite the
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seizure of another tanker in the gulf, the price of oil down to $55 per barrel. big tech, right from the start, way down. apple is down 3%. alphabet, 2%. amazon, 3% down. it's at $1766. 3% down on microsoft at $132. ouch. trade sensitive stocks right from the start, boeing, look at that, down $7. $332 on boeing. caterpillar down, 3m down, united technologies. you can be pretty sure of saying it's down all across the board. we need help on a day like this. we've got it. jeff sica is here. john lonski is here, susan li, ashley webster all together. looks like, jeff, to you first, looks to me like we're in for a long drawn-out trade war and i think that's bad for stocks. what say you? >> it is going to be a long drawn-out trade war. it is bad for stocks. the reason why is because there
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was -- it was the curse of high expectations. people expected we would have an agreement, they expected we would move forward. now we're not, then you throw the currency manipulation into the mix and you throw in the fact the consumer has been not overly affected as of yet when the consumer gets affected -- stuart: we are down 402 points as we speak. long drawn-out trade fight bad for stocks. susan: let's keep things in perspective. we were just probably 1% off the record highs we saw just recently. we have been looking at this demarcation for the yuan for 10, 11 years. it's psychological important. when you devalue a currency, especially for the second largest economy in the world, that affects assets all around the world, stocks, property and even as you see with the u.s. treasury -- stuart: all around the world. susan: big impact. stuart: long drawn-out trade fight if that's what we're looking at, bad news for stocks.
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what do you say? >> the fact is as the equity market sells off, there will be increased pressure on policy makers in the united states and china to come to some sort of resolution or at least a truce to end the selloff of equities. ashley: i agree with john. look, this is the bazooka reply from china. okay, you are going to go ahead and september 1st, threatening to put extra tariffs on, this is china's response. how the president reacts is going to be very interesting. does this ultimately bring them to the table and say all right, enough's enough, what can we agree on? stuart: all we have seen from the president thus far is he called it currency manipulation. i think there's some discussion going on right now about how to respond to this. ashley: exactly. stuart: let's get to interest rates. the yield on the ten-year treasury all the way down to 1.76%. look at that. that's money flowing into america, pushing the price up for treasury bonds and the yield is down. 1.76%. john, you are the economist around this table. is that a dangerous race to the bottom?
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>> i don't think so. i think there's a silver lining here. this latest drop on treasury yields, 30-year mortgage yield will be 3.5%. the past four weeks applications for mortgage refinancings were higher by nearly 85% year over year. it's not a bad thing. speaking about treasury yields, let's not forget with the chinese currency going lower, that makes it more difficult for chinese companies that borrowed more than $100 billion worth of dollar denominated debt in the first half of this year to repay that debt. so china is going to be careful about not allowing their currency to sink through the floor. stuart: one silver lining, you and i, the three of us are going to report is it wednesday at 10:00 or thursday? mortgage rates. you're thinking 3.5%? >> 3.5%, 1.75% ten-year treasury yield. stuart: let's hope. that's one form of a flight to safety, into u.s. treasury bonds. the other is the price of gold moving higher. i believe that's a six-year
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high, $1,474 per ounce. that's classic flight to safety. >> it is. keep in mind the one thing that people love about gold and what i love about gold is the less confidence that investors have in the currency in central banks, the more confidence they have in gold. when you see people running to gold, it means they are protesting against the governments that control currency. it's good for gold and it's a good hedge right now. i think people should think seriously about it. stuart: now talk about bitcoin, because that's up. i question, is that a flight to safety, john? >> i don't consider that to be a safe investment. that's a highly speculative investment. if you are rushing to bitcoin to avoid volatility in the equity market, you better rethink your strategy. stuart: if you are losing faith in the value of currencies, you go to the cryptocurrency. that's a sort of flight to safety. >> well, that's really a
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stretch, because of the underlying volatility. stuart: i shouldn't use the word safety. i guess. >> i like bitcoin. i said i liked it at $5,000. now it's up over 11,000. i think what people have to understand is not only are people -- it is -- you can't say it's safe. it's not safe. it's a very volatile investment. but people are looking at the fact that governments that get in trouble with currency have a tendency to invade their banks. that's what people are worried about. >> right now the u.s. dollar is getting stronger. susan: right. that's what it is. bitcoin diversification, they usually have these moves after the weekend, there's always a lot of rotation in during the weekend play, but with bitcoin, we are not up to the $14,000 level but the lack of faith in currency, lack of faith in government policy, is why people buy into bitcoin. stuart: will the small investor, the individual investor, sell this monday morning because of what they think is the threat in the future? we are down 484 points.
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>> you have the individual investor that's been piling into stocks because they are afraid of missing the next move. those people have to really consider that maybe now is the time, this is a very small decline, to take some money off the table and protect themselves for the greater decline. susan: diversification as well. because there have only been a certain number of stocks have gotten most of the money this year. maybe it's time to diversify play. stuart: for the benefit of those listening on the radio, let me tell you this. we are now down 477 points, 1.8%. that's the dow. the nasdaq is down 2.3%. that is 186 points. that is a whopping great decline. it's all across the board today. quickly, individual stocks making news. meat processor tyson reports higher profits. they have received a grand jury subpoena from the justice department looking for documents and information related to price fixing in the chicken industry. the stock is hitting an all-time high this morning.
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who cares about the subpoenas, i guess. $84, 6% up. viacom and cbs worked out a deal where viacom's chief robert bakish could lead the combined company if they reach a merger deal. both stocks down in a down market. where's oil? that's interesting. despite the seizure of a tanker in the gulf by the iranians, lots of goings-on there, despite all of that, $54 per barrel for the price of oil this morning. how about that. gas keeps on coming down. not a lot, but the average now is $2.71. i keep reminding people, we have had gas buddy forecasting 50 cents a gallon less by the end of the year. fed ex and ups, they are going to pay their sunday drivers less than weekday drivers. that's the report. why would they be doing that? you are the economist. >> that is strange. maybe they can get away with it because people do this as a
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part-time job or something? so you get an increased supply of drivers on weekends as opposed to during the week. ashley: that makes sense, right? stuart: it does. ashley: if you are going to go seven days a week, try to save with lower paid drivers on sundays. stuart: owhat are the drivers wo make less on the weekends going to say? ashley: they agreed to a two-tier wage system and you had those who may be doing part-time, they are cheaper, they don't earn as much as the express delivery guys. stuart: look at boeing, please. way down again today. i think the level is actually down to about $331, on boeing. that's down 2.5%. they are going to redesign entirely the flight control deck on the max jet. they can't catch a break. all those people who bought boeing at $360, $370, expecting the bounce-back, they didn't get it. >> no, they didn't get it. also, they are affecting the airlines. i think they have a big public relations problem that they have to get over. i think the fact they haven't
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handled it correctly is hurting them and will continue to hurt them as time goes on. stuart: all right. it's 9:40 eastern time. that means we say good-bye to jeff and john. thank you, gentlemen, for coming with us on a very difficult day. look at this. we are now down 460 odd points. that's a huge drop. 1.7%. look at the white house, too. president trump's going to make a statement, address the nation about the weekend's mass shootings. that will be at the top of the 10:00 hour. you will see it. one hong kong based company not deterred by the chaos over there. amtd international, an investment bank, they are going public today. on the new york stock exchange. we are going to speak to the ceo in our next hour. what a way to choose. what a day to choose, i should say. this could be a medical breakthrough. researchers say they discovered a new blood test for alzheimer's. can detect the disease or the condition, i should say, much earlier than a brain scan.
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stuart: this is a selloff and a half. moments ago we broke below the 26,000 level for the dow industrials. that means we're down way more than 1,000 points in the last week. we're actually close to a 500-point loss as of this morning. now, we are going to go through some of the big name stocks for you. if you own them, check them out on the screen. we will show them to you. first, big tech. look at that, apple is down $7. alphabet is down $30. amazon is down $51. facebook, down $4. microsoft down $4. that is a selloff across the board as the dow drops 500 points as we speak. the chip makers are really caught up in this trade fight
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and that's the reason for this downside move. it's a trade fight escalation. china has devalued its currency. we are in a currency war. down go the chip makers even more in percentage terms. we are down 5% on nvidia. i remember when that stock was flying high above $200. applied materials, same story. qualcomm, way down today. lam research, down 3%. susan and ash, look, seems to me our viewers, individual investors, there's a real crunch for them here. ashley: decision time. stuart: decision time. do you want to get out, having made so much money in stocks, you want to get out now because you think maybe this trade fight will be a long-term deal? that's the question. do you get out now? susan: you made 20% on the s&p so you have lost maybe 1% to 2% in the past week. that's still a lot of gains to cap. some people look for bargains, maybe not the china plays because those are getting hurt the most, especially when a
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currency devalues, that means the profit you bring back to u.s. dollars is much smaller. people are avoiding those u.s./china names but maybe more domestic plays like microsoft is a bargain. ashley: it takes a strong stomach to dive in now. but to susan and jeff sica's comment, if you dive back in, there are some deals to be had here. stuart: yes. if you think microsoft is cheap at $132 a share, you have a strong stomach. susan: especially if you think the federal reserve is backstopping some of this trade policy as well, because the markets are fully pricing in another rate cut next week or next month, pardon me, in september, and two more for -- before the end of this year. the federal reserve has your back and has the market's back, these levels might look cheap. warren buffett has said if the federal reserve continues to cut, these might be cheaper levels. stuart: one small kav ycaveat. we are posing a question, will the small investor sell or not. there's a question about if you have owned those stocks inside
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your 401(k) or inside your i.r.a. you don't pay any capital gains tax if you sell. there's no tax, no capital gains tax if you sell within your pension money. so that opens up, i mean, people, you don't want to pay the 20% tax or whatever the tax is but if it's inside your pension plan, you might be more willing to sell now. ashley: lot of brokers on the phone having this conversation with the individual investors. stuart: we are having the conversation for them because make no mistake about it, we are down sharply this monday morning. down nearly 500 points for the dow. we just dropped a fraction below 26,000 moments ago. that nasdaq, 2.5% down. that's the biggest one-day drop i can remember in quite some time. do we have to take a commercial break? is that correct? no, we don't. okay. okay. put up some more stocks. i want to see big tech again.
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sorry, i interrupted you. susan: that's okay. we are just coming off the worst week since december for the s&p and also the nasdaq as well but don't forget, these benchmarks are the ones that have lifted up most of this year so it's just a bit of rotation money coming out of the markets, maybe holding cash in these uncertain trade times. stuart: big tech led this market. they led the whole thing. susan: that's right. ashley: the ten-year is now down to 1.76%. 1.767%. susan: it hit 1.74 this weekend. we are up a few basis points. ashley: went up, now it's coming back down again. stuart: for the benefit of viewers who are just joining us, here's what's going on. we have a currency war on our hands. china has devalued its currency in response to president trump's threat to impose more tariffs. we haven't heard anything from the white house yet except the president saying this is currency manipulation. so that set this thing off. what we've got now is a massive selloff in stocks all round the
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world, by the way, not just the united states. asia, europe, america, all stocks way down. there is at the same time a flight to safety. you are going straight into u.s. treasury securities, as ash just reported, the yield is now 1.76%. that happens when money flows in, price goes up, yield comes down. that's what's happening there. price of gold, six-year high as we keep telling you. the surprise here is bitcoin, which has gone way above the $11,000 per coin level. susan: diversification. diversification. stuart: not a flight to safety. it's a speculative currency, the bitcoin. but that's what's happening. stocks down, flight to safety, currency war. believe me, we will have a lot more about this, after this.
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stuart: selloff monday morning, and i mean big-time. look at that, down 500 points for the dow. down 56 for the s&p. down 200 points, 2.5% for the nasdaq. big tech is really way down this morning. let's get to hong kong. more violence over the weekend. in fact, the whole place was virtually shut down. a general strike monday which affected flights and trains. as i said, the central district
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of hong kong was largely shut down and the demonstrations spread to other areas of hong kong, not just the central district. walid phares is with us. does the chaos in hong kong strengthen our hand in these -- in this trade fight with china? >> what is happening, first of all, is very important between china and hong kong. this is basically the moment of change since the agreement of 1999 where there was sort of an agreement with china will maintain its -- and hong kong will be free market. what happened is china acquired a lot of capital, a lot of assets through hong kong. the only thing is china did not change its political regime. it's still communist. and hong kong doesn't want to change its regime which is liberal democracy. that was a clash that was due to lap. what we are seeing now in hong kong is a signal for the future.
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it may not just be hong kong. it may go i don't think. stuart: that means capital flight. money in china would like to get out, if you devalue your currency and you've got a big fight going on in elsewhere, that's capital flight and that's a big negative for china. >> what you have announced now to the audience that china is devaluing is a signal that is very important. my concern would be beijing would think of putting troops in hong kong and shutting down in a military way. that would create a much, much bigger crisis and the chinese themselves don't know what the reaction would be to their own capital. stuart: what a situation. now, how about iran? we've got to talk about that here because the iranians have seized another tanker in the gulf, yet the price of oil has dropped to $54 a barrel. do you see any end game in the gulf in the near future? >> it's so interesting that the price of oil is going down because of the measures we, the united states, our arab allies
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and others have been taking in terms of world market, yet iranians are putting all these moves to intimidate us. they will continue to capture those and seize those tankers until something happens. i don't know if anything is going to happen. i don't know if the europeans are going to be, you know, helping them against the united states. the last i heard, the europeans may be deploying in the gulf along our side, not along the side of iran. stuart: if you look around the world, i don't see president trump backing off or in any way backing down from the hard line that it established with europe, with asia, with china, with iran. there's no backing down that i have seen at all thus far. >> i agree with you. with regard to iran it's very simple. we have established this system around iran to isolate them. it's working. we have the arabs with us, most of them, at least, and we had hesitations in europe, not just the governments. companies. companies in europe that have business with iran ought to make a choice. iran's economy or america's economy. little by little, you can see
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the results on the ground. the uk may be sending ships, battleships to support or to protect their tankers in the gulf. that's very meaningful. stuart: what a way. walid phares, thank you for being here. we appreciate it. got to check that market. we are holding at a loss of roughly 500 points for the dow industrials and roughly 200 points down for the nasdaq. moments from now, president trump scheduled to speak about the mass shootings in texas and ohio over the weekend. that will be 10:00 eastern time. we are almost there. he says, the president says more has to be done to stop these tragedies. you are going to see what he has to say right here, the second hour of "varney & company" is up next.
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stuart: happening moments from now, president trump will address the nation after the weekend's mass shootings. here's what we know, el paso, texas the gunman killed 20 people in a crowded walmart
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saturday. according to authorities the shooting appears to be racially motivated. prosecutors are treating the crime as quote, an act of domestic terrorism. the suspect is in police custody. hours after that shooting was reported in texas another shooter opened fire at a popular nightclub district in dayton, ohio. nine dead, including the shooter's sister. police responded very quickly, killing the suspect at the scene. according to reports he had a history of violent tendencies. as we await the president's remarks we pose this question, following the weekend's events has public opinion shifted on gun control? we'll take you to the president as soon as he starts to speak. first to your money, check that big board, look at that, the dow industrials down 468 points. why the big selloff? china trade dispute. we opened up a currency war. china devalued its currency
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overnight. tech stocks hit particularly hard. apple, facebook, google, microsoft, amazon, all sharply, sharply lower. nasdaq is down 2 1/2%, on track for the worst losing streak in about three years. ash and susan, i have not yet seen any bounceback buying. you know, normally you have a half hour of intense selling, you might see some people jumping in thinking that is a bargain, that's a bargain, have you seen any of that at all this morning? ashley: not at all. we got economic data, non-manufacturing sector in july, coming in under consensus. weaker than expected. i wonder if bad news is good news with regard to the fed, this china trade war overcomes everything else. susan: there is not a lot of
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diversification in the rally this year. certain stocks have gotten most of the money, microsoft, mastercard, paypal, a lot of money not going to comparatively cheaper stocks. when you see a selloff, the tech names in particular take brunt of the selling, that is what happens in the overbought stocks. this year, it is interesting, there has been a overlap in the top 50 stock holdings between mutual funds, hedge funds. these investors operating differently, right? one wants very big return quickly. the other is a long-term play. the top 50 holdings have been very similar so far. ashley: analysts at jpmorgan say this is a buying opportunity, get in there. they're overweight on u.s. equities. europe is going nowhere, japan, they say this is opportunity. they see no recession, certainly not in the near term. stuart: i now see we're down a bit more. 513 points.
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511. that is 1.9%, you know, get close to a 2% selloff in a major stock -- ashley: gets your attention. stuart: gets your attention. ashley: volume. we're in the dog days of summer now. that is interesting too. stuart: no bounceback as of this point. we're 30 men's, 33 minutes into the trading session. as you know we're waiting for the president to give us some remarks on mass shootings over the weekend. i want to bring in jason johnson, advisor to senator ted cruz. you're a texas guy, sir. >> yes, sir. stuart: i want you to respond to what i think is a shift in public opinion. i believe the events over the weekend, traumatic in the extreme, i think that has shifted public opinion on gun control. what say you? >> maybe it has, stuart. i'm not sure. i think it's a little early to conclude that. i know this, i'm still next to being stunned and certainly was over the weekend, i was in the
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grocery store as i was learning about this and you know, couldn't help but look over my shoulder, get home, hug my kids, hug my wife. everyone is hurting. no one more than the victims families but i think there is something more important, stu, this is not to suggest that there aren't, there isn't something we can do from a legislative perspective, but every time this happens we look up to the federal government, we look at someone else, as opposed to just stopping and taking a look at our own lives, making sure we're being good parents to our own children. that we're being good neighbors because regardless of what legislative solutions may exist, we have to stop and accept, be honest about the fact this is evil, we have a sickness in our culture and in our society. i don't know what the legislative solution to that is. stuart: okay.
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>> but we have to have that conversation. stuart: 100% i'm with you on that one. look at this headline, the front page actually of the "new york post," it blairs right at you this morning. remember the "new york post," i would call them a relatively conservative organization. tend to support president trump, look at that headline, ban weapons of war. that is why i said, jay. maybe we're shifting public opinion with, a headline like that from a conservative operation, maybe opinion is shifting what to do legislatively. last word to you? >> yes, sir. very well may be. it is natural for people to look for something like that, but stuart, unfortunately if congress acts, does something more on gun control we know this will happen again. stuart: stay with me, please. i want to bring in greg valliere. i know the president is about to speak and we'll take you there as soon as he does speak, greg valliere is with us. do you have any idea what the president might say or advice what he should say?
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>> well the reports in the last hour, stuart, are that he wants to try to tie him migration reform to gun reform. i think that is a nonstarter. instead of having one issue people agree on we combine it with another issue people disagree on. if that is going to be his proposal i don't think it will get a great reception. let me quickly say, i heard the previous speaker i agree there is evil, how long will the congress and the president defy the will of the public. the polls are overwhelming, i agree with the "new york post." the polls are overwhelming the country wants something done. the fail to act further could jeopardize trump's re-election. stuart: i agree the polls are overwhelming. the public wants something done, but we don't know what to do, do we? >> no. we don't know what will succeed. i do agree with your previous speaker on that point. i think to do nothing would be abdication. you need to have some kind of
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congress is willing to think a little bit outside of the box, try some different approaches. again i think the "new york post" headline was great. stuart: you know, ban the weapons of war. that that's, what does that mean? >> it means you don't need an ak-47 to kill bambi. you don't need an ak-47 to protect your house. it means there has to be some common sense. stuart: you ban that. still probably, what, five or six million ak-47s out there in america? there is 300 million plus guns out there in america. >> you got to start somewhere. i agree. there is still a glut of guns. you would be naive to argue otherwise but i think you have to start somewhere. stuart: okay, you think, that the talk in the last few minutes has been that the president will tie him my graduation reform to gun control reform? really? tying those two issues, together. >> that has been the trial
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balloon for the last hour or so. he has got to say something. stuart: i'm interrupting you. here is the president of the united states. >> good morning. my fellow americans, this morning our nation is overcome with shock, horror and sorrow. this weekend more than 80 people were killed or wounded in two evil attacks. one in saturday morning in el paso, texas a wicked man went to a walmart store where families were shopping with their loved ones. he shot and murdered 20 people and injured 26 others, including precious little children. then in the early hours of sunday morning, dayton, ohio, another twisted monster opened fire on a crowded downtown street. he murdered nine people,
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including his own sister and injured 27 others. the first lady and i join all-americans in praying and grieving for the victims, their families, and the survivors. we will stand by their side forever. we will never forget. these barbaric slaughters are an assault upon our communities, and an attack upon our nation, and a crime against all of humanity. we are outraged and sickened by this monstrous evil, the cruelty, the hatred, the malice, the bloodshed, and the terror. our hearts are shattered for every family whose parent, children, husbands, and wives were ripped from their arms and their lives. america weeps for the fallen. we're a loving nation, and our
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children are entitled to grow up in a just, peaceful and loving society. together, we lock arms, to shoulder the grief. we ask god in heaven to ease the anguish of those who suffer and we vow to act with urgent resolve. i want to thank the many law enforcement personnel who responded to these atrocities, with the extraordinary grace and courage of american heroes. i have spoken with texas governor greg abbott and ohio governor mike dewine. as well as mayor demargo of el paso, texas, and mayor nan whaley of dayton, ohio, to express our profound sadness and unfailing support. today we also send the condolences of our nation to president obrador of mexico and
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all the people of mexico for the loss of their citizens in the el paso shooting. terrible, terrible thing. i have also been in close contact with attorney general barr and fbi director wray. federal authorities are on the ground and i have directed them to provide any and all assistance required, whatever is needed. the shooter in el paso posted a manifesto online consumed by racist hate. in one voice our nation must condemn racism, bigotry, and white supremacy. these sinister ideologies must be defeated. hate has no place in america. hatred warps the mind, ravages the heart, and devours the soul. we have asked the fbi to identify all further resources
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they need to investigate and disrupt hate crimes and domestic terrorism, whatever they need. we must recognize that the internet has provided a dangerous avenue to radicalize tis dished mines and -- disturbed mines and perform demented acts. we must shed light on the dark recesses of the internet and stop mass murders before they start. the internet likewise is used for human trafficking, illegal drug distribution and so many other heinous crimes the perils of the internet and social media cannot be ignored and they will not be ignored. in the two decades since columbine our nation watched with rising horror and dread as one mass shooting has followed another overand and over again,
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decade after decade. we cannot allow ourselves to feel powerless. we can and will stop this evil contagion and that task, we must honor the sacred memory of those we have lost by acting as one people. open wounds cannot heal if we are divided. we must seek real bipartisan solutions. we have to do that in a bipartisan manner, that will truly make america safer and better for all. first we must do a better job of identifying and acting on early warning signs. i am directing the department of justice to work in partnership with local, state and federal agencies as well as social media companies to develop tools that can detect mass shooters before they strike. as an example, the monster in the parkland high school in
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florida, had many red flags against him and yet nobody took decisive action. nobody did anything. why not? second, we must stop the glorification of violence in our society. this includes the gruesome and grisly videogames that are now commonplace. too easy today for troubled youth, to surround themselves with a culture that celebrates violence. we must stop or substantially reduce this and it has to begin immediately. cultural change is hard. but each of us can choose to build a culture that celebrates the inherent worth and dignity of every human life. that is what we have to do. third, we must reform our mental health laws to better identify mentally-disturbed individuals who may commit acts of violence and make sure those people, not only get treatment, but when
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necessary involuntary confinement. mental illness and hatred pulls the trigger, not the gun. fourth, we must make sure that those judged to pose a grave risk to public safety do not have access to firearms and that if they do, those firearms can be taken through rapid due process. that is why i have called for red flag laws, also known as extreme risk protection orders. today i am also directing the department of justice to propose legislation insuring that those who commit hate crimes and mass murders face the death penalty and that this capital punishment be delivered quickly, decisively and without years of needless delay. these are just a few of the areas of cooperation that we can
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pursue. i am open and ready to listen and discuss all ideas that will actual work and make a very big difference. republicans and democrats have proven that we can join together in a bipartisan fashion to address this plague. last year we enacted the stop school violence and fix nix acts into call providing grants to school safety and strengthening critical background checks for firearm purchases. at my direction, the department of justice banned bump stocks last year. we prosecuted a record number of firearms offenses. but there is so much more that we have to do. now is the time to set destructive, partisanship aside. so destructive. and find the courage to answer hatred with unity, devotion and
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love. our future is in our control. america will rise to the challenge. we will always have and we always will win. the choice is ours and ours alone. it is not up to mentally ill monsters. it is up to us. that we are able to pass great legislation after all of these years. we will insure that those who were attacked will not have died in vain. may god bless the memory of those who perished in toledo, and god protect them. may god protect all of those from texas to ohio. may god bless the victims and their families. may god bless america. thank you very much. thank you. [reporters shouting questions] stuart: as you can tell there, the president has finished his
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statement. he was not answering any questions that were thrown at him by the media who were in front of him. let me go through the bullet points that the president just laid out there. number one, want to act on early warning signs. number two, stop glorifying violence in our society. number three, reform mental health which would include some involuntary confinement of those judged at risk. number four, those judged at risk cannot have guns, would have those guns taken off them very quickly. number five, the death penalty for hate crimes done quickly and effectively, what he means by that, get on with it, i think you could say that. ashley: yeah. stuart: i don't think i missed anything else. we were expecting, greg valliere is still with us. no mention there of tying in any form of gun control to immigration control, none whatsoever. this was just about the shootings. >> yeah.
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some constructive ideas, stuart but it is important to remember, congress is on vacation for five weeks. they're not back until the second week of september. sadly i don't see any quick action. stuart: what do you make of his statement? it was compassionate. he talked about bar bear rake slaughter, condemned racism, hate, white supremacy, he used that word, used that expression. that es different. what do you make of that? >> i thought that was very important for him to say. i thought he delivered the speech kind of shakily, his vows sounded shaky, the people that died in dayton, not in toledo, as he said. a few things to be critical of. it is a start. which have a long way to go to get bipartisanship on this issue. stuart: greg valliere, thank you for being with us. very important you're here. we appreciate it. thank you, greg. >> you bet. stuart: now we have a downside move in the market big time. we have protests in hong kong continuing. tear gas, rubber about bullets. how about this, a
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hong kong-based company going public today on the new york exchange. we have the ceo for you next. what a day to go public. we'll be back. we all feel, we all love, we all cry. it's part of being human. sonoma county declared a homeless emergency in 2018. you have to know the individuals you're serving to understand their needs. working with ibm watson we can bring together data spread across dozens of departments. that gives us a fuller view of the people we serve. dear tech, dear tech, we need to look after everyone in our community. and we want to help our fellow human beings. ♪ ♪
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stuart: we keep looking for any bounceback or bargain hunting. we have not seen it this morning. we're down 533 points in the dow and similar losses on the s&p and also on the nasdaq. here is something interesting, amtd international, that is a hong kong-based investment firm which is going public today on the new york stock exchange. it is open for trading. it is up 12%, $9 a share. calvin choi with us, the ceo of
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amtd. any second thoughts going public in new york today when you're a hong kong-based company and all that is going on over there? >> absolutely not. this is the first day of the company. we're thinking about how to go global. we are an investment bank. we're the largest independent investment bank in asia. i think investment bank really about connecting capital flow, network resources. this is the first day we're thinking about new york as our first destination to list. stuart: do you think that you should be a little worried about capital flow is? what is going on in hong kong, i'm told there is a great deal of concern about capital flight, money going out of hong kong, out of china, you're right in the middle of that? >> hong kong, they have one country two system, the hong kong fiscal system is very strong. they have reserves of over 1.83 trillion u.s. dollars. i think something, that one of
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the most centers in the world. financial entutions while we do see there are society problems but i think for the last capital markets, and as a financial center we're not concerned about it. i think for us coming here as a hong kong company we have global ambition we would not be the only one. you will see more hong kong companies, more companies connecting east and the west. stuart: last one, you obviously see some kind of resolution to the hong kong crisis fairly soon, do you? >> i think we have confident about, you know, the way that the hong kong government and also the chinese government in terms of how they, the country, the city, this is not something we have particular concern and as a hong kong company we are fully confident about hong kong. stuart: calvin choi, thank you very much for taking time out to be with us today.
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>> thank you. stuart: could be a interesting day for but the stock is up. calvin choi,. >> thank you. stuart: we talk a lot about the tax exodus in this program, people living high-taxed states, new york, new jersey, going for low-taxed states, florida, texas. our next guest says that could end up being bad for, republicans. -driverless cars... -all ground personnel... ...or trips to mars. $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.
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stuart: we're down 530 points. that means no sign after one hour's worth of business, no sign of anyone coming in looking for bargains, pushing that index back up a little bit. not at all. we've been down 500 for most of the session thus far. we have the s&p down 60 point. that is better than 2% drop. on the nasdaq, i think we get
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that up for you, the nasdaq is way down there, 2.6%. lower, 7793. that is a selloff and a half. 10-year treasury yield, 1.76% as we speak. negative interest rates extended in europe. actually, germany, the negative yield has gone to a new low, which is really extraordinary stuff. greg valliere still with us. look, greg, it seems to me like it's a race to the bottom for interest rates and that i think could be deflationary, right? >> it could be. i guess if you're looking for some sliver of good news this morning, stuart, it is that rates being this low could spur more refinancing, good for housing and auto industries, blah, blah, all the usual beneficiaries, but rates getting this low has to be troubling not just here but as you say in western europe as well. stuart: i don't know where the endgame is here.
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europe has $14 trillion worth of bonds with no interest whatsoever and they keep wanting to you invest with them. >> rate cuts are not doing the truck but we might have to talk about the third quantitative easing. i think the third quantitative easing in the u.s. had a mixed success. there are not easy answers. stuart: what the fed is almost having to do, they have got to match these cuts in europe. otherwise the dollar goes through the roof, disrupts trade and our economy? >> absolutely. if i could add one other piece to this narrative that's troubling, you have to worry that beijing may be thinking about crushing this insurrection in hong kong. i mean that could get very ugly over the next few weeks. i wouldn't rule it out. stuart: hold on a second. i have this breaking news. it is on hong kong. i will read it to you. the chinese foreign ministry is urging the united states to stop interfering. >> wow. stuart: hold on a second, greg. interfering in hong kong or interfering in the currency markets or what?
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susan: we don't have anymore expansion on this. we have the china foreign ministry as well saying it firmly stands behind the one country two systems. they will be safeguarding hong kong stability. but stable is not the way to describe the pictures you've seen over the nine weeks of protests, five straight days of protests. in fact a big one that we saw on sunday. you saw the stock market fall 3% in hong kong, reaction to this. the transport system was interrupted. 150 flights were canceled. subway doors, subway trains were blocked from closing. main artery, main road in hong kong, called harcourt road up to the government offices, blocked as well. there is obviously a lot of congestion, a lot of shall we say instability. stuart: greg, back to you, it looks like a prolonged trade fight with china. it is very hard to see either side blinking, backing down. >> i think you have got to say regrettably, stuart, chances we
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won't get any deal between now and the election increased dramatically. stuart: what does that do to our economy? china is hurting. what about us? >> people have to pay more for christmas presents, cell phones, all sorts of things that go into the mix of things that cost a lot more. i think especially in the midwest where farmers are uncertain. where businesses rely on things for their supply chain, going up in price. i think it adds to a dramatic sense of uncertainty maybe for month and months to come. stuart: do you think it is time to get out of the stock market? >> i still think we're going to grow. maybe i'm naive, i still think with the unemployment rate at 3.6, 3.7? with fundamentals still looking good that could be premature. this is a tonous period that may last for a while. stuart: ouch! greg, very important day. we're glad you're here. >> thank you, you bet. stuart: sales of huawei
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smartphones getting a big boost in china. what does that mean? susan: a a lot anti-u.s. sentiment in china. huawei is on the blacklist. they have problems getting access to suppliers, google, other chip makers in silicon valley. huawei sales reached a record in the second quarter, 38% market share. we saw apple sales falling in china? why? because the chinese, because consumers are flocking to huawei because they feel they are being bullied by the u.s. government and president trump. stuart: patriotic buying i see. susan: that's right. stuart: it happens a lot. entirely understandable. susan: kfc, mcdonald's sales fall. the political plays into the consumer. stuart: a headline for you, "the hill," kind of a newspaper. quote, why the trump tax cuts could turn into a problem for the republicans. that's a very interesting headline.
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so why don't we bring in the author of that headline, kristin tate, columnist for "the hill." kristin, i'm not sure how i understand this because, explain it to me. why is it bad for republicans? >> as we talk about on the show all the time, stuart, the tax bill did have a clear, positive impact on families and economic growth. 82% of middle income earners received a break last year. however the tax bill also had unintended consequence because it sparked this major exodus from blue states to red states. this demographic shift is so significant that it could pose significant challenges to republicans in future elections. high earners in high-taxed states like new york, new jersey, california, they can't deduct their state and local taxes anymore. so these folks are more incentivized than ever to pack up and relocate to conservative states with low taxes. and that is exactly what they're doing, stuart. last year new york's population loss was the steepest in the
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country while at the same time the top 10 states in the country to gain population were all low-tax states. all 10 of these low-tax states saw significant swings to the left in the 2018 midterm elections. so the data suggestions that at least some of the people moving from blue states to red states continue voting for democrats once they get to their new home. stuart: you take your politics with you, wouldn't you? >> exactly. stuart: you leave new jersey, you leave new york, you leave california, you don't like those taxes and your tax situation but you don't change your politics. you're still liberal. you have money, you simply go to nevada, texas. didn't this happen in new hampshire? new hampshire has no sales tax. >> my home state. stuart: this is years ago. this is not because of salt. because there are very low taxes in new hampshire. got a lot of massachusetts people going to new hampshire. they were liberals. they turned new hampshire's politics a little to the left. have i got that right? >> yes. i'm from new hampshire and the
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changes we've seen in that state over the last two decades are incredible. there is talk now of implementing an income tax because all of these people moved from massachusetts to new hampshire. then they vote for the same policies they fled. this is a nationwide trend that has been going on for some time but the removal of the salt deductions has really kind of sped this up. on one hands these trends are very good for republicans because they prove that people flock to places with conservative policy, fiscal restraint and low taxes but on the other hand, gopers really need to explain to their new residents that these states have flourished in the past because of the low taxes. because of the favorable corporate environment. if they're unable to convey that, then, you know, it is just going to turn these places into failed blue states. stuart: you just can't win, can you? you just, very hard to win these things. kristin, thank you very much for joining us. that is a great story, great
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headline. thankthank you for bringing it . >> thank you, stuart. stuart: now this, iran reportedly seized another oil tanker. the iranians say this thing was smuggling fuel? ashley: yes. bound for some arab countries. they say it was iraqi ship. that is interesting because iraq's oil ministry say they have no connection to the seized vessel. this is the third time. there was two times last month a panamanian flagged ship was seized. a uk, british flagged vessel in the strait of hormuz also last month. there is, tensions are running very high. they also seized seven sailors today. not sure what nationality they are. also just learned that the uk is now going to join a u.s.-led maritime security mission in the gulf to help safe passage of these vessels. stuart: that is good news. check the market. we've taken another slip south, a little notch further down. now we're down 571 points for the dow. that is better than 2%.
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the s&p is down 2.25%. the nasdaq composite is down -- getting on close to 3% down. huge selloff across the board. more "varney" after this. audrey thinks she's doing all she can to manage her type 2 diabetes and heart disease, but is her treatment doing enough to lower her heart risk? maybe not. jardiance can reduce the risk of cardiovascular death for adults who also have known heart disease. so it could help save your life from a heart attack or stroke. and it lowers a1c. jardiance can cause serious side effects including dehydration, genital yeast or urinary tract infections, and sudden kidney problems. ketoacidosis is a serious side effect that may be fatal. a rare, but life-threatening bacterial infection... ...in the skin of the perineum could occur. stop taking jardiance and call your doctor right away if you have symptoms of this bacterial infection,... ...ketoacidosis, or an allergic reaction. do not take jardiance if you are on dialysis
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stuart: look at that. now we're down nearly 600 points on the dow industrials. i have said in the last few minutes. we're looking for a buyback. is anybody jumping in to get a bargain here? the answer is no. ashley: they have stopped buying. stuart: we haven't seen anything like that at all. in fact we had a continue all drop south. we're down 589. that is the low of the day just about. how about the s&p 500? exactly the same story. we're down 2.3%. no evidence of anybody buying bargains, none whatsoever. it keeps on going gradually south. nasdaq? that is the big loser of the day, down three%. obviously the tech stocks are
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taking it on the chin. all of them way, way down. look at that apple down 4%. alphabet down. i can go through this. amazon is down. facebook, microsoft back to 132. that is a selloff. look at the chip-makers, they're directly in the middle of the trade fight with china, they're sharply lower. nvidia down 10 bucks at 150. applied materials, lam reserve, all of them way, way down. >> semiconductors getting killed. stuart: absolutely getting creamed there. retailers, if we impose extra tariffs will that raise prices? will that mean retailers sell less, hurting profits? susan: they're talk about that. there has been no inflation. the trade war is going on more than a year. it has not resulted in higher prices for consumers. that is the reason the fed had to cut interest rates. the people talk about higher prices for consumers, we haven't
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seen it yet. stuart: what do you have, ash? ashley: on what the president said, videogame makers taking a big hit. activision, blizzard down 5%. stuart: the president mentioned video games. ashley: electronic arts, take-two interactive, taking a hit. stuart: stop glorification of violence. mentioned video games. the game-makers. taking it right on the chin. we're down 600. susan: headlines from walmart. walmart unfortunately being location of el paso shooting. walmart says there is no change in company policy on firearm sales after el paso. stuart: they don't sell assault weapons. those they don't sell. they're not changing the policy on those they sell. susan: they have issued no directives to stores around the country of their firearms sales policy. stuart: good stuff. let's get clear here. we have a selloff and a half. we're down 600 points on the dow industrials. joining us on the phone, brian
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wesbury. brian, you're always a positive kind of guy on the economy and the markets. do you remain that way with what is going on now? >> yes, stuart, i still do. look, china, devaluing their currency, i guess you could argue is a way to fight back against tariffs but if you look from inauguration day to today the yuan has only been devalued by 4.4%. so at that doesn't even come close to offsetting the cost of tariffs. stuart: wait a second, brian, come on. look, they dropped around below the seven level, which is an absolute key level. they have not dropped below that in 11 years. they are declaring a currency war. there is a selloff all over the place. it looks like, this is going to be a long, drawn-out trade war, doesn't isn't. >> think about what, okay, when you drop the value of your
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currency, what you're really doing you're hurting your own consumers. in other words, what they produce is worth less on world markets. their purchasing power on world markets goes down. and so you're actually hurting your own economy. so this, i think this is an overreaction by u.s. stock markets and, on top of it, the tariffs on china are literally driving dozens and dozens and dozen dozen dozens of companies out of china. sony, rico, asic announced they are moving supply chains to taiwan, taipei and vietnam. china is losing, if you want to call this a currency war, or a trade war, they're losing this war. they don't have -- stuart: i understand. you're putting balanced picture out here, i like that, the other
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side of the coin. talk to me about interest rates because we have the yield on the 10-year treasury coming all the way down, 1.75, 1.76 at this moment. >> right. stuart: looks like a race to the bottom. it looks like a race to me towards deflation and there is nothing good about that. >> at least that's what people in a sense think. i think they're wrong about that. you know one of the interesting things -- so if you devalue the yuan, what we do, what the chinese do is they use u.s. bonds to back their currency. so if the, if it takes more yuan to buy a dollar, they need fewer u.s. bonds to purchase, to back their currency. in other words, china has to buy fewer u.s. bonds. and the bond traders that i know all tell me if the chinese stop buying u.s. bonds, yields will go up, not down. so this is a very weird reaction
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by the bond market to take this -- and what it is trying to say i think, is that this trade war will lead to slower global growth and higher consumer, or worse economy in the u.s., partly because costs will go up to u.s. consumers but what's fascinating is, if i move my production from china to vietnam, i get away from those tariffs, and it doesn't increase costs for u.s. consumers. so i think there whole idea of, that the u.s. economy is going to weaken so far that we get to deflation, i think it is an overreaction. stuart: okay. i hear you. i hear you, brian. you have calmed us down on the stock market. you have calmed us down on interest rates, deflation and the bond market. we thank you very much indeed for that. i have got to tell you, i have not yet seen any buying of stocks this morning. they keep on heading south. >> right. stuart: brian, i have to run.
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thanks for being with us, good stuff. now then the travel industry, that is starting to feel pain from the very strong u.s. dollar. fewer foreigners are coming here, too expensive for them. we have a big drop in the tourist traffic of foreigners coming here. we'll tell you how big the drop is in a moment. my insurance rates are probably gonna double.
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stuart: still no buying. it is all selling. down 580 on the dow. down 230 on the nasdaq. better that than 2% losses all across the board. i will show you the trade sensitive stocks again, because this is a trade fight decline we're seeing on wall street. look at boeing down eight bucks. 3m 2%. united technologies, 2.8%. now, the biggest losers on the dow, there are 30 stocks in the dow. which ones are the biggest losers? i will show them to you. apple, intel, visa, nike, goldman. huge names, huge losses all across the board. how about the biggest losers on the sap 500. obviously there are 500 stocks in that index? those are the losers. i'm not sure i know what they all do but those are the big losers. how about your nasdaq losers?
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probably it is going to be the technology companies. yes it is. discovery, kla-tencor, mylan labs, dish network, taking it on the chin big time. let's change the subject. ashley: please. stuart: please. the u.s. travel association says the u.s. will continue to lose foreign travelers through the year 2022 because of the strong dollar, trade tensions and overseas competition. roger dow is with us, u.s. travel association president and ceo. roger, so there are fewer foreigners. i am by the way an american citizen, despite the voice. fewer foreigners coming to america. can we put numbers on this? >> well, yes, stuart, first of all we're thrilled to have you here in the united states. but what's happening actually is the share of long haul travel is going down. we're up about 2%. the rest of the world is growing much faster.
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they're up 6 to 8%. five years ago we had a 13, 14% share. we now have 11.7% share. proprojected to go down to 10.9. we're losing share. so that is very costly. stuart: i assume chinese tourists coming here, that number is way down, is that accurate to say that? >> well you look at china, china has been up tenfold in the past 10 years. it was 3.2 million travelers. last year, it dipped to 3 million. china is down 5.7% first quarter. so we could be looking at that, as part of this trade tension. stuart: i think we are, actually. how about the europeans? is that a straightforward currency play, america with a strong dollar is very expensive for them with a weak euro and a weak british pound? >> you hit the nail right on the head. the biggest challenge we have in the lost share is the strength of the dollar. that is really happening not only in europe but of course with the u.n. change, that will
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happen a little bit in china. it is getting more expensive to come to the u.s. stuart: not much you guys can do about this, is there? >> there is a lot that can be done about it. we have something in the united states called brand usa. it is brilliant it is no taxpayer money and the travel industry fund promoting to come to the u.s. most other countries, like china spends 160, to 200 million of their own money. this brand usa needs to be reauthorized. reauthorize through 2020. both congress and senate have to vote to reauthorize it again. we have to get that done. otherwise it gets a lot worse. this is a simple fix to help. other things we can do, improve number of visa waiver countries. people coming in the visa waiver program. it's a huge plus. stuart: meantime we're stuck in the middle of a currency war. roger, thank you for being here. >> thank you. stuart: look at the market. we're down almost 600 points for the dow industrials.
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(avo) call 1-800-miracle to start your 30 day risk-free trial and schedule your free hearing evaluation today. stuart: this is financial warfare. the trade fight has become a currency fight. overnight, china deliberately dropped the value of its currency. it makes chinese products cheaper here, canceling out any new tariffs president trump may impose. this is escalation, and the consequences are profound. first, money is pouring into america because we are safe. this is not entirely good news. i hate to get technical, but the flow of money shifts interest rates, and that shift raises the risk of recession. second, this escalation makes it more difficult for either side to back down. who would be the first to blink? both president trump and president xi would lose credibility if they walk away from their hard line.
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nobody wins a long, drawn-out trade fight between the world's two biggest economies. serious consequences. third, don't underestimate the impact of developments in hong kong. the place was brought to a virtual standstill over the weekend. xi jinping has to take care of it. he's in no position to retreat in the trade fight while his own backyard is in chaos. he's got to worry about his politburo which is not keen on concessio concessions. there is no quick end to this fight. financial warfare is not pretty and it's not going to be over any time soon. let's get right at it. here we go. the markets way, way down. now, we have come back just a tiny fraction. we were down 600 on the dow. now we're down 550 but still a loss of over 2%. same story with the s&p 500. hasn't come back very much at all. still down just over 2%. same story with the nasdaq. that's now down 2.7%. we've got a major selloff all
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across the board. take a look at interest rates. this is key. the yield on the ten-year treasury is now 1.76%. for some perspective on this, let's bring in market watcher ryan payne, payne capital management kind of guy. you are usually optimistic about the markets and the economy going forward. does this give you, you know, pause for thought? you think it's time to sell a little now? >> absolutely not. stuart: no? not at all? >> i'm offended you even brought that up. stuart: i could make the case, this is going to be a long, drawn-out trade fight with china. the world's second largest economy. we have a race to the bottom on interest rates and threats of deflation. that's not a very good environment in which to be buying stocks, is it? >> let's look at this. nothing has really, really changed that much. okay, we have some additional tariffs that might be added and now we are up to $138 billion all said with tariffs but remember, our economy is like $20 trillion.
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we are not talking about big dollar amounts in the scheme of things. stuart: understood. >> furthermore, a lot of the tariff news really covered up like the really good news on friday. we saw jobless -- or the job numbers came in better or right on track, 164,000 jobs created. we had wages go up again. we are still 50 years on the unemployment number, so all things equal right now, it's pretty much nothing's really changed the last week. stuart: would you -- i don't mean to interrupt you, but someone like you, this could be a real buying opportunity. bargain basement prices on some of the biggest names. >> yes, exactly right. if you look, the only real buying opportunity we had this year was april into june. we have had a pretty much uninterrupted bull market. we know there's $8 trillion in cash, we talked about that you are getting a gift from the godz here. stuart: would you do it? >> absolutely. stuart: would you advise your clients, today, not tomorrow, today, right now, to buy some stock? would you do that?
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>> absolutely. you don't get these many opportunities to buy. the market doesn't sell off that often. right now this trade war has gone for a long time. we haven't had many dips. stuart: takes a strong stomach. if you are watching this program, you see red arrows all over the place and ryan payne says absolutely, buying opportunity, get out there and buy. whoa. >> when you see something on sale, do you walk away or do you buy? same with the stock market. you got to take advantage of the lower prices. you don't get them that often. stuart: talk about flights to safety. looks like we've got this flight to gold, six-year high in the price there. looks like we've got something of a flight to safety with bitcoin as well. what do you make of this? >> i think gold, yeah, very viable place. you have $14 trillion worth of negative securities around the world. governments have to park their money somewhere. central banks are buying more gold than they have in like 50 years, if you look over the last year, russia bought more gold this year than they have in a long time. that's definitely pushing the price of gold up. i would warn you, gold is still a lousy long-term investment. very volatile. it doesn't grow as much as even
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bonds grow over time. it pays no dividend. i wouldn't say it's the best place for your money. stuart: understood. an unruffled ryan payne. you're not ruffled by all this. >> even on monday morning, stuart, come on. i always come in hot or try to. stuart: come in hot? whatever you say, son. whatever you say. ryan, thank you very much indeed. good stuff. now, i'm going to stay on the markets and china, protests in hong kong. they flared up again over the weekend. hundreds of flights in and out of the city flat out canceled. our next guest was in hong kong, made it at the last minute on his flight to tokyo. got out just in time. i guess that's the way you put it. christian whiton, former state department guy, frequent guest on the program. christian, i want you to act as our reporter, if you will. what was it like, what did you see in hong kong right before you left? >> well, it was the lead-up to a very big day. there was basically a general
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strike on monday in hong kong. just demonstrating really how broad this protest movement is, that it's not just a small group of young students, but actually a movement that at least for the time being enjoys very broad support, support from groups like civil servants, bankers that are usually pretty hesitant to stick their necks out in hong kong. i was there over the weekend, you see a lot of pictures dominated by the more active elements, you know, you have some violence, frankly, but that's really just a small part. during the daytime when these protests are the largest, it's everyday people, it's skewed towards the young in hong kong and it's non-confrontational with police. that tends to change a little as the night comes. that's the main element of what's going on. stuart: carrie lam, the chief executive of hong kong, she says this is seriously undermined law and order. and there has been some feeling
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that maybe china's about to -- gearing up to really intervene and crack down good and hard. did you get that feeling that that was coming, that people were expecting that and worried about it? >> well, there is that concern, but what's sort of being forecast of a potential invasion by the peoples liberation army, the pla, probably not going to happen. could be some sort of hybrid attack, if you will, or just an invasion by a cadre of civilian police forces from the mainland that comes in and picks up a whole lot of people. but for the army to come in, all of these protesters will disperse back into their places of work and home and then the question is you have soldiers sitting around, they have essentially ruined hong kong at that point. the u.s. would likely retaliate -- not retaliate but take action by removing hong kong from its distinct status as a separate customs entity than the mainland, that would have
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consequences. another thing carrie lam said, these protesters are putting at risk one country, two systems. that's one of the most orwellian acts of double-speak because of course, it is beijing that undermined the concept of one country, two systems where hong kong has autonomy and gets to keep the rule of law and relative freedom it enjoyed under british rule before its handover 20 years ago. stuart: bottom line, i don't see any solution to this in the immediate near term. i don't think you do either, do you? >> no. beijing probably thinks it can just blow past this, as it did with the umbrella movement in 2014 that eventually people will get tired of protesters and it will peter down. this is so broad, it really presents beijing with a crisis and puts xi jinping under a lot of political pressure. he's already under that because of the trade war, and because of the slowing economy in china, because this is not something that's going to go away and even if there is a big effort by china to suppress this, there probably will be something, it's going to be hard for them to make that happen. of course, everything that goes
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on here is being followed despite censorship on the mainland. stuart: terrible thing. used to live in hong kong. love the place and i'm sad to see this happening. thanks for joining us. we do appreciate it. real fast, put the big board up. we have come back a little bit. you're looking at big technology companies. look, we are now down 520. about 15 minutes ago we were down 605. i'm going to call that a modest comeback. maybe some people are jumping in, buying what they consider to be bargains. maybe that's the case. we have come back a little bit. now, again, the big tech names, please. all of them down, all of them down sharply. apple, google, amazon, facebook, microsoft on the downside. boeing, let's see if that's moved at all. last time we checked it was 331. it's still 331, way down there. they are developing a fix for the max jet. they are starting from scratch, rebuilding the plans -- the plane's flight software, trying to improve reliability. they are going to test next month and hope to be back in the air with it by october.
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we shall see. the stock, though, thoroughly depressed at $331. the meat processer tyson reports higher profits. okay. they've got a grand jury subpoena for documents and information related to chicken industry price fixing. no difference to the stock whatsoever. in fact, it's gone up on the profit basis, pai8.6%. breaking news from the white house. president trump's canceling a trip to the villages retirement community in florida because of the mass shooting. he was supposed to go down on wednesday to speak about medicare. the president addressed the mass shootings this morning. he condemned white supremacy, called for reform to mental health laws and criticized violent video games, among other things. that was the story. walmart under increasing pressure to stop selling guns following the shooting at one of its stores in el paso. hear how the company is responding to those calls. one of the world's busiest airports bracing for major delays as workers call for a
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24-hour walkout tomorrow. we will tell you which airport. "varney & company" just getting started.
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stuart: the story of the day is money and how much you may be losing, because the markets all across the board are way, way down. make no mistake, this is about the china trade fight. your 401(k) is taking a hit. come on in, david. look, one of the selling points in the president in 2020 was the strength of the economy and what the stock market had done for your 401(k). is he going to take a hit? is this going to hurt him if you get to 2020 and your 401(k) is losing money? >> this economy is still
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roaring. we are going -- we can't know what's going to happen in a year, but most of the fundamentals are still in place of this economy. economists far smarter than me will tell you growth continues on a good pace, employment continues on a good pace, consumer spending continues on a good pace, wage growth continues to go up. all good indicators for the president. stuart: you think americans are prepared to sacrifice whether it's on the stock market, the 401(k) or sacrifice the growth rate of the economy, will they accept sacrifice in the name of keeping a hard line on china? >> absolutely. stuart: you think they will? >> we have known for some time of the unfair trade practices that china has been taking on, that our economy could be doing stronger if we had even better trade policies. though now may be the time for the president to shift and put a full focus on usmca and making sure the mexico canada agreement
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gets in place and start looking to see where else can trade deals be put into place that keeps our economy going. certainly we want to deal with china at some point but they have to be a willing negotiator. stuart: i'm sure you saw this. our viewers certainly did. within the last hour, president trump spoke about the mass shootings over the weekend. i want you to listen to just part of what he had to say. roll tape, please. >> in one voice, our nation must condemn racism, bigotry, and white supremacy. these sinister ideologies must be defeated. hate has no place in america. hatred warps the mind, ravages the heart and devours the soul. stuart: i'm not going to call it a breakthrough but that's the first time i can remember that the president condemned flat out white supremacy and used those words. >> the overall tone of the speech was very much like president bush after 9/11, that we as a country have to start breaking down silos and federal,
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state and local governments need to start working together, we need to take an approach that looks at all violence towards americans and how we address those. the development in the last 24 hours that needs to come, the dnc needs to ban beto o'rourke from the democratic debate given his ugly hatred rhetoric that he's used the last two days. everything from his profane language to his comments about the u.s. and the third reich. just disgusting language. stuart: but he's trying to make a name for himself in a very crowded field. >> beto o'rourke, if i put my name on the ballot i would have as many points as beto o'rourke right now. this is a failed fledgeling campaign trying to get attention and the dnc needs to ban him from the next debate. stuart: i don't want to go off too much on guns. but it would seem to me public opinion has shifted just in this past weekend. the public wants something done. now, the president addressed that. you think he's gone far enough? >> what americans want is safety
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and security, and the question long term is how much will the courts allow government and big data to work together to be able to predict such tragedies, to be able to use information points to say can we stop this in advance and will the courts allow that big data and big government to work together as they try to -- stuart: that is what the president was suggesting. that's a fact. thank you very much for joining us on a busy day. appreciate it. thank you. now, better check the stock of walmart. they are facing some social media pressure to stop selling guns all together, because of course, one of their stores was involved in the el paso shooting. it was in that store. deirdre, see if i've got this right now. walmart sells guns. they don't sell assault rifles. deirdre: they stopped that in 2015. stuart: they are not going to change their policy on selling guns? deirdre: they are not going to change their policy because in some ways they are already stricter than average. no assault rifles, they stopped selling those in 2015.
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last year after that parkland shooting at that high school in florida, they actually raised the minimum wage so legally, you can purchase a gun at 18. walmart says nope, for us you have to be 21. they do do background checks and also stopped selling toys that look like guns. there were obviously some misunderstandings between younger kids, unfortunately, and police where the younger kids ended up getting shot. right now, they are saying no changes in policy because we are already stricter than average, but they say obviously that their goal is to keep their customers safe. unfortunately for those poor people in texas, some of them were doing back-to-school shopping. they acknowledged all of this and they acknowledged 20 people of course dying as you referenced, in their store. last week, two employees died in a walmart store in mississippi. stuart: okay. deirdre, thank you. let me check the big board for you. i keep saying this. we have come back a little bit. maybe there's some bargain hunting, not sure. we were down 605, 606 a few
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minutes ago. now we're down 514. how about this one for you. let me change the subject. why not. this is a good idea. ed sheeran now has the highest grossing tour of all time. the current one has brought in nearly $740 million. that beat out the previous record held by u2. he will add to these earnings. he has more shows scheduled through the end of the month. $740 million. ashley: one-man show. stuart: i do like the guy. ups and fed ex wrapping up sunday deliveries, trying to compete with amazon, of course. they're not going to pay their drivers extra for working on sundays. they will be paid at a lower rate. interesting story. we've got it for you, promise.
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2,000 fence posts. 900 acres. 48 bales. all before lunch, which we caught last saturday. we earn our scars. we wear our work ethic. we work until the work's done. and when it is, a few hours of shuteye to rest up for tomorrow, the day we'll finally get something done. ( ♪ )
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stuart: breaking news from dayton, ohio. authorities there are holding a news conference on the mass shooting. the police chief has just said there is no evidence yet that race was the motive in the shooting. any more developments from that news conference, we will bring them to you real fast. check that big board. we are still down over 500 points. that's about 2%.
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that 2% drop extends all across the board. a planned union strike at london's very, very busy heathrow airport was called off last night. flights are still feeling a little pain, however. what's to come? ashley: too little, too late. the airlines already planned and canceled a lot of flights. british airways tried to reinstate some today but the end result has been chaos. the union workers want more money. we are talking about security guards, firefighters, engineers, they have been offered, we are told, a more than 7% raise over the next two and a half years. they say no, unacceptable, and they are upset with the pay gap between the ceo of heathrow who earns five million u.s. a year and they say it takes him two days to earn what we earn in a year. the point deirdre bolton made earlier, he's the ceo of heathrow, the busiest airport in europe. it's a big job. but they don't like the pay gap. stuart: the income inequality
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story. ashley: they could be on strike tomorrow if they don't figure this out. more chaos. stuart: that's disruption. how do you know whether or not you have a flight? ashley: make sure you call ahead. stuart: see if you can get through. check the big board. now we're down 550 points. triple digit loss. the worries about china trade. here's a question for you. how does either side back off in this trade war? doesn't it mean it's going to last for a long time? we will ask the question, see what answer we get. iran seizing another oil tanker in the gulf. it's the third incident in just the last few weeks. will secretary of state pompeo meet with the iranians? our guest says it could happen sooner rather than later. how about that?
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stuart: we thought we had seen a little buying since the dow was down a mere 490 a few minutes ago. now we are back down 550. i want to bring in michael o'keefe. i want to ask the question, are you buying? is this a buying opportunity?
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prices are depressed, for heaven's sake. you buying? >> short answer is yes. stuart: you are? >> here's the thing. when we have clients that have money to put to work, we always do a little at a time. in an environment like this, the next step we want to take, we are moving it forward. stuart: that takes a strong stomach, doesn't it? yeah, you got a lot of money, put it into a risky stock. >> that's right. well, it is, but again, i think at the end of the day, we think this is a little bit overdone. market's reacting. it's emotional. stuart: look, you have been on the program very frequently. i'm glad you hustled in today in a civilian outfit. hate to take you away from the beach. nonetheless, have you always been steadily bullish -- >> yes. stuart: the last two years i have known you, you said it's going up, going up, you think we are going to go up some more eventually? >> at the end of the day the foundation of the market is strong. as i said last time i was on, we thought of it as a breakout move, one direction or the
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other. this is a little bit of a leg down and it is because of the caution or nervousness about trade. stuart: it doesn't last? >> no. fundamentals of the economy and the market are there. over the medium to long term, stocks are going up. stuart: you are a tough guy. interest rates spiraling down. we've got the yield on the ten-year treasury down to 1.77% as of right now. >> yes. stuart: i think that could be deflationary. deflation ain't no good. >> not good. that's right. yeah, i mean, i think from our side, the view is that this is more of a short-term trading phenomenon. basically, i think you said earlier today, people are looking to take some risk off the table, go to safety. so it's more of a short-term driven move. our view has been even from 2%, we thought the ten year's going higher. the way i like to think about it is is the fed acted just last week, we need to give that time to work its way into the system. stuart: i see one silver lining to a treasury yield of 1.75% or
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whatever it is. that is sharply lower mortgage rates are coming. >> yes. that's right. i think they were 3.75% last week. so 25 basis points down from there, you can definitely see that. stuart: now, is that enough to reinvigorate the housing market? because you know, housing's a big chunk of the economy. get that going again, it would be good for everybody. >> here's the interesting thing. i think the key to a lot of this is slow growth. the idea of i wouldn't say get it going strongly but supporting it, and seeing just measured growth over time. think about it, you earn a 7% to 8% return on investment year in and year out, up and down but on average, you compound that over time, that's a very good sort of accumulation of wealth. stuart: well, let's leave it at this. you came back in off your vacation to appear with us today. you are advising clients who have got some money on the side, buy it today, buy it now.
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>> that's right. stuart: brave guy. that's all i can say. brave guy. all right. michael, thank you very much. >> you're very welcome. stuart: to china trade. come on in, james carafano, heritage foundation guy. i think this trade fight is going to drag on for a long time. i say that because i don't see how either side could back off. how can either side blink? they would lose credibility if they did, right? >> i got nothing for you. i agree, look, i agree with you but here's why. i think the chinese have done their calculation and they have decided that donald trump is going to get re-elected and why that's significant is now if they make a deal with him, they know they have to live with it. and what they found is he wants a real deal so he's made it hard for them. so they are kind of caught there. it's like if they make a deal, they have to make a real deal and then the guy will stick around to enforce it. so i do think there's still a
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fear in the headlines exactly how to deal with this. as long as the economy continues to grow relatively strong and trump can't get hammered with oh, you tubed the economy because of the chinese trade thing, americans want him to be tough on china so yeah, i think this could drag on. stuart: okay. drag on until the election, 2020? >> it's going to drag on in 2021. stuart: 2021? well, i can't see how that's really good news for america's economy. i think it's bad news for the global economy. isn't it? >> well, at some point, after trump gets re-elected, if he gets re-elected and the economy is still going well, what really incentivizes him to back off the trade fight, and then the chinese have to make a difficult decision, make a real deal they have to live with, you know, this is really crunch time for
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the chinese and think about it. when was the last time they faced kind of a decision that was almost existential since their rise. the answer is they haven't. this is the first time they have really bumped up against a wall. i think they are struggling on how to deal with that. stuart: they just confronted america over currencies because they've got to take time out to deal with hong kong. they've got to get that dealt with. >> well, look, i'm a little more sanguine on hong kong. the hong kong police are certainly capable of keeping control. if pro-democracy spread to other cities and rioting, then i think the chinese might get a little upset. but really, what do they have to lose. the hong kong police can keep a handle on this. i think the chinese would actually prefer if hong kong were knocked down a notch and business flowed to other chinese cities and they get it all in 2047 anyway. i think they can afford to take
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a bit of a long view right now on hong kong. but i do think they are just trying to figure out what's the magic button for dealing with trump. i don't think they found it yet. stuart: last one. if you were an investor, i don't know whether you are or are not, would you be buying at bargain prices today? >> well, i think this administration -- i do policy, not politics. i certainly don't do this. but this administration, i think this administration is making a bet that the fundamentals of the economy are strong and they are going to continue strong through the election, and this administration is not going to do anything to dramatically upset that. stuart: james carafano, frequent guest, that was pretty good. that's called a straddle, i do declare, in financial terms. james, thank you, sir. see you again soon, promise. fed ex and ups. they are both offering sunday delivery. but it's coming at a cost to their drivers. deirdre bolton explains. deirdre: it sure is. ups has a two-tiered wage system and the sunday deliveries are
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actually just a hassle for them. if you are looking at profitability. if you order a toaster, i order a teeshirt, they have to drive for one stupid package between your house and mine. that's a pain in the neck. it hurts their profitability. they are saying okay, the drivers that we are going to use on sundays are going to be in that second tier, that lower tier, take it or leave it, drivers who want that extra day. the big picture writ large for me here is they are both competing with amazon like crazy. that's the big take-away from this. everybody needs to keep up with amazon. they are just relentless. they have their own supply chain, their own delivery, sometimes they contract out, sometimes they don't. the point is whatever you order will be at your place in 24 hours. that's hard to compete with. stuart: in real estate it's location, location, location. in selling these days, it's delivery, delivery, delivery. and fast, please. deirdre: exactly. stuart: check verizon. they have unveiled a new cheaper mix and match pricing -- mix and
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max pricing model for their smartphones. what's that all about? ashley: it's all about listen, you can have the family, you, your spouse and kids could all have different plans. you can pick and choose. they start at $70 a month for a single line, they have all these unlimited, do more unlimited, play more unlimited, get more unlimited, you get the feeling. all these different plans. you can add 5g for an extra $10 a month. but of course, you have to have a compatible device and you have to be able to get 5g where you live. deirdre: stand out on your porch like this. ashley: with tinfoil on the roof, you're good to go. stuart: i'm really dying to use a 5g device. just to see how quick it is. what does it do for me. because i really don't know. deirdre: i think it's going to take awhile. it's supposed to be seven times faster than average but it's really limited. you really have to stand in a very specific spot on your property. stuart: you do? thank you, deirdre. i'm warned. check the dow industrials. we have had a couple guests on
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the show say maybe this is a good time to buy at lower prices. not many people are doing that. down 570 for the dow, down 226 on the nasdaq. that's close to 3%. how about the retailers? all the talk of tariffs and import duties, as you might call them. all the retailers are down today, including walmart. some pressure there for them to change their gun policy, they say they're not going to do it. look at the video game makers. they are taking a big hit because earlier this morning, president trump said violent video games play a role in radicalizing mass shooters. down they go, all of them, in strong percentage terms. activision blizzard down 5.5%. president trump's expected to unveil his new health care plan next month. new polls show health care remains a liability for this president. how can he turn it around to a winning issue? we will ask the question. it's not just the president's moving -- i'm sorry,
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residents moving from high tax blue states to places like florida. some financial firms are leaving new york, boston, they are heading south as well. we will tell you where they are relocating after the break. so ...how are you feeling? on a scale of one to five? one to five? it's more like five million. there's everything from happy to extremely happy. there's also angry. i'm really angry clive! actually, really angry. thank you. but what if your business could understand what your customers are feeling... and then do something about it. turn problems into opportunities. thanks drone. customers into fanatics change the whole experience. alright who wants to go again? i do! i do! i have a really good feeling about this.
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stuart: if there has been any bargain hunting, it's not apparent. the dow is heading further south as we speak. we are down 575. again, the nasdaq, biggest loser amongst those indicators, is down 2.8%. 229 points. we've got another high tax exodus story for you. financial firms from the northeast, high tax, heading south to low tax. where are they going? ashley: let me tell you where they are coming from, first. new york, boston and greenwict, connecticut, getting out of
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these high tax areas and heading to palm beach county. they have 40 billionaires and 71,000 millionaires within that area so the money goes where the money goes to. also, because of the tax. the corporate tax rate is 5.5% there. individual income tax, zero. they are putting their domicile there in order to take advantage of the tax rate. let's not forget the 10% cap, the salt, has absolutely killed these businesses and individu s individuals. we are talking about hedge funds, you know, private equity firms, 70 have moved to palm beach in the last three years, 15 more are in the process of doing it. it's a real exodus. stuart: think of all that money that's no longer being paid into stores and services and businesses in the northeast, going to palm beach county. ashley: so many that palm beach county has created its own department to handle the influx.
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stuart: good lord. okay. i think we got the idea. thank you very much. next case, health care. we have seen what the 2020 democrats are putting on the table. mostly it's medicare for all. the "wall street journal" says president trump will unveil his plan next month. this could be rather tricky for the president. a recent fox poll shows only 38% approve of how he's handled health care. another poll shows half of us think democrats will do a better job on health care. matt schlapp is with us, american conservative union chair. matt, how can the republicans make health care a winning issue? >> well, i think they have to talk to middle class voters. that's what's really lost in all this. most of the gains of insurance coverage under obamacare went to just putting people on medicaid and you know this, that's not the form of health insurance people really want. that was obviously a health insurance program that came up for the very poor, and the middle class folks that got
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pushed on medicaid, they are actually not that happy with their health insurance. so we have to look at making health care more affordable. my rates went from about $2,000 a month pre-obamacare to about $4,000 a month post-obamacare, and a lot -- look, i've got a lot of blessings but there's a lot of middle class people who just couldn't afford it. so they actually chose not to get insurance. we have to really make these premiums affordable to middle class voters. everything the democrats want to do, everything, makes it more expensive for those voters. stuart: it's an uphill struggle because at the end of the day, you've really got to tell americans we are going to lower the cost of health care. not so much the insurance side of it, lower the cost of health care. nobody has been able to do that yet. >> you know the number one thing on that is this whole idea of legal reform. stuart: yes. oh, yes. thank you. thank you. >> the lawyers in the process are huge. isn't it funny when you talk
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about health care, nobody is bringing it up because they assume it can't get through congress. it would still be the number one impact on getting health care costs down. stuart: you take the lawyers out of this, and you cut the cost flat out. that's what happens. >> that's right. stuart: i do want to save time to get your reaction to what the president said last hour about the mass shootings. he condemned explicitly racism, hate and white supremacy. matt, it's the first time i can remember he's used that expression, white supremacy, and condemned it. >> good for him. i think these were appropriate remarks. i think it's repugnant that people are making politics over these terrible tragedies and it's really not about politics. by the way, it's not donald trump's fault. it was good for him to step up, get on offense, try to heal the country, call out hate and stuart, we are never going to get a handle on these mass shootings, we are never going to have a real instant background process until we have the ability to track these people who have publicly said that they want to kill, rape and torture
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and destroy people. until we track those people who are even saying it publicly on facebook and everywhere else, and through the school systems, we will never -- but most of these people are young men who express violence and have a history of, you know, tendency towards violence and until we do something about tracking them and barring them from preventing -- from buying guns, we will never get a handle on this. stuart: matt schlapp, you've got it right. thanks for joining us. appreciate it. see you soon. big selloff still going on in the markets. stocks down across the board. is this a buying opportunity? so far, not many people are buying but a couple of our guests have said yeah, i'm going to put some fresh money in there right now. bargain prices. we will summon the market watchers for their opinion after this.
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stuart: sad news from el paso, texas. police say another shooting victim has died in the hospital. that brings the total number of people killed in that shooting to 21. right now, we are dealing with a market selloff of significant proportions. just seems to be no comeback.
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we are down 560 points. better than 2%. that's true, i keep saying it, all across the board, down. the parent company of this network buying a majority stake in credible labs. now, credible is a marketplace for information about consumer lending, like mortgages, school loans, that kind of thing. we've just bought or about to buy a majority stake in it. got it. check cable stocks. for years, they have been promising to cut back on the number of commercials that they run, saying they will compete better with streaming services. now we find that's not right. they are raising the number of commercials? deirdre: yeah, they can either raise prices to keep profitability, run more commercials or both. as it turns out, for all of last year and the first half of this year, they are doing both. so if you are watching tv and you feel like you see more commercials, you are not imagining it. viacom is actually the worst offender, if you like, according to these analysts, they were the ones who did all the research,
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14 minutes' per hour of commercial time. fox, our employer, is the best, the only one to have cut. they actually lowered their ads last quarter. they are saying less ads by 2% but the volume for all of last year, first half of this year, up, up, up. people aren't imagining it. stuart: i'm glad fox is the standout. good stuff. back to the markets. scott martin joining us on the phone. have you bought anything today, scott? >> i have been thinking about it but not yet, and i'll tell you why. i actually, this is going to sound crazy but i like days like this because these are days when the tide goes out, stocks get overdone, as you talked about with brian westbury earlier. there's times when value is really created on days like this and you see what people are wearing when they go in the water. i will tell you, if you are sitting home pondering that very question which you asked so astutely, there's going to be
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clues to when it's time to buy. i have a couple written down here. one is when interest rates stop dropping or say plummeting, dropping is probably not the right description. plummeting is one word that comes to mind, where if you start to see interest rates stabilize, on say our government paper, that's an idea that maybe some of this elg s selling is go stop. the dollar has to stabilize and basically stop going up as it has been with this new currency war environment that we're in. then also, another area that we have liked a lot, we have talked about this on the shows every week, gold. gold's got to stop going up because that's another fear trade that shows you it hasn't totally dried up yet, hasn't left the market yet. those things start to happen where gold especially starts to say stop rising at this alarming rate, that's another area where you can look at for some clues as to at least some sort of bottom in stocks happening. stuart: okay. watch this show. that's the kind of stuff that we tell you, the price of gold, the price of bitcoin, interest rates and yes, the stock market. scott, thanks for joining us. see you again real soon. all right. don't have much time left on the program but what time we've got, we will use usefully.
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after this. . .
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stuart: attention london travelers. we told but the planned strike at london's heathrow airport. the union says it is not happening tomorrow either. ashley: god bless them. thank you so much. >> all the people waiting for their flights. stuart: people didn't like the confusion. atmd a investment firm based in hong kong, despite all the chaos over there, they went public on the new york stock exchange. the stock is up nicely from the offering price. there is one check i want to make, bitcoin.
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up $1300. they arrived as a source of safety? ashley: it is becoming more and more of a viable alternative. a lot of people don't like it but hey. >> goes up when our markets go down. stuart: gold, flight to safety, even bitcoin. neil, it is yours. neil: even bitcoin. thank you very, very much, stuart. let's follow what is going on, stuart. peek at the dow 30. 29 of the 30 were down. it had been all 30 but coca-cola turned up. all 11 s&p 500 sectors that we monitor closely, are down. and some of them down appreciably on fears here, this will extend a while. it was really interesting when i started going inside of the numbers, how far and widespread this is. those of course sensitive to what is going on i

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