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tv   Making Money With Charles Payne  FOX Business  February 12, 2019 2:00pm-3:00pm EST

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people seeing both sides are unhappy with the final creation, seeing that the final creation will be the ultimate one approved. we'll see. we'll see later on today. charles payne through the next hour. charles: neil, i'm so excited. we have music up in here, we're breaking major resistance points now. this could be the beginning of a next major leg higher. good to see you. i'm charles payne. this is "making money." coming up there tentative deal to avert another government shut down. we'll hear from mitch mcconnell and chuck schumer on the next steps shortly. president trump saying he is unhappy with the deal. wall street is assuming he will ultimately sign it that news put as spark in the markets early, right? we open higher, shifting wall street to the next major headline, potential trade deal with china. their horribled economy could actually be a problem with beijing delivering on any promises they make. meanwhile the market cheering news that 7.3 million jobs are
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open in america right now. we're open for business. bill gates going after democrats, their tax plan that is. the plans that alexandria ocasio-cortez and others have proposed. he says, well, the most generous man in history, he says he has a problem with them. let's just leave it at that. a major rally going on right now. wall street trading higher, near 400 points on the upside. this as congress has reached a tentative deal. president trump saying seems unlike there would be another shutdown. he is always sort of iffy with these things. you can see the market is pretty excited. the deal for the most part will include 1.4 billion to build 55 miles of border wall, full funding for i.c.e., no caps on internal enforcements. one potential headwind we can check off. investors are however awaiting anxious the big headline, that is the headwind of negotiations out of china. president trump saying a short time ago there is a big team in
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china frying to make a big trade deal. >> china wants to make a deal very badly. i want it to be a real deal. not just a deal that makes,s cosmetically looks good for a year. we have a chance to make a real deal with china. we've never been in this position before. we've always been the lame duck and we're not the lame duck anymore. we've gone up tremendously in value as a country, in economic value. charles: hear the way kpmg chief economist, constance hunter, bellpointe chief strategist david nelson as well as ubs jim lecamp. we brought in the heavy hitters. constance, been a long time. >> great to be back. charles: the markets knew you would be coming back. we're up almost 400 points in the dow. the dow saying something we don't want to take for granted that the shutdown has been
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signed, sealed, delivered, because it hasn't. market zeroing in on china and feeling pretty good about that. >> as you said, trump says one things, does another thing. he seems to be leaning in the direction of more conciliatory language. so things like i could be flexible on the march 1 deadline, right? saying things like, i really want a real deal. i don't want to paper this over. we're in a position we can push our strength. china's economy is in a weak position. they're being hurt by this a little more than we are. let's make sure we get a real deal out of it. let's make markets think we're happy to hear about it. if he raises tariffs 25% on midnight march 2nd, that is not what the markets want to hear. so it is the right mix of tone and language. charles: right tone. let's face it, now president trump is going into re-election mode anyway, david and he does like to win. i said from the very beginning president trump would win this
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china trade deal. it would depends what he would accept as victory. feels like we'll maybe get something. everyone's excited. you have got lighthizer, you've got mnuchin over there, those are the folks over there negotiating this. they don't want navarro and some of the others. wall street feels pretty good something will happen. not ultimate deal, enough we don't avert to constance's points that we avert hike in tariffs and we keep the ball rolling. >> i think your point, what does victory look like and clearly both sides need a deal. president wants one going into 2020. president needs one to constance's point, china is slowing down here. they're in economic contraction on their manufacturing deal, excuse me their manufacturing sector. i think president xi is willing to do, he is willing to spend as much as a trillion dollars over the next 10 years to close or eliminate the trade deficit but what will they do on intellectual property? that is an area where i think
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the president really has to stand firm. i can't cross that line. he has to do that, even if it means economic pain for us here at home. charles: jim, economic pain is one thing. stock market pain is another. listen, let's be quite honest with you, that last government shutdown, if you took the worst-case scenario, cbo 11 billion-dollar number, only three billion was permanent, that is proverbial drop in the bucket for a 20, 21 billion-dollar economy. but when you take the other parts of this, public relations part, sagging stock market that is a lot of pressure on the white house to get these deals done. >> it is. we had a lot of fear about policymakers. if you look at the selloff in the fourth quarter in the stock market it was about policy or policymakers. it was about the federal reserve board which is off the front page or about the trade deals with china, may be softening, may be improving. maybe we'll get a deal.
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you could throw in policy. and mueller deal throw in and there is good news out of the senate today. treasury yield is down 2.7%. all of sudden stocks are not looking so bad. beyond that, charles, earnings expectations are so low that if you get these headwinds out of the way, there is room to upgrade these earnings expectations. worried about 6%. rest of street at 5%. swab is close to 0%. you have room start feeling better about things. businesses can make decisions now they know a little bit more. the devil we know now. not all the devils we didn't know. charles: constance, on that note, we've all see, buy on rumor, sell on the news kind of thing. as we become more and more confident of these things happening, they start to get priced into the market, you know, maybe the actual news won't have that sort of impact
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that we thought? maybe we won't go parabolic. maybe we won't see big time investors selling on the news, that maybe buy on the news is that possible? >> that is good way to look at it. let's not forget china is in a challenging economic situation. they used debt to grow the economy. at end of the day, if the proceeds of that debt are not put to productive use, you still have debt to pay back, right? 22% of their gdp is going to repay corporate debt. that is extremely significant drag on what they're able to do growthwise, right? and there is only three ways out of that debt. you either inflate your way out, grow your way out, or restructure or default. if you look at what the bank of china has said to chinese banks, that you can have perpetual bonds that to me looks awful like rolling loan gathers no loss. charles: right. also brings up the question,
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david, could they live up, trillion over ten years, i think they promised a trillion to 2024. could they even economically, forget about the feasibility of them significantly curtailing their ambitions, find they're ambitious. don't do it on the back of american know how, right? what about being able to pay for all of the promises that they're going to make to get a deal done, can we even expect that to happen? >> i don't know that we can. maybe they can't but they will certainly try. in the end they will cheat on this and we'll be back at the negotiating table again. our challenges in this country are really not right here, it is overseas. the real challenge is the slowing global growth in china, europe, other parts of the world. europe is rolling revolution at this point. they're slowing down dramatically. countries are looking toe get out of eu. charles: right. >> right now we're doing pretty good. last week the earnings expectations for 2019 actually ticked up. first time i've seen that since -- charles: i'm not surprised after what we've seen in the first
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half of earnings season. the beats have been so significant, maybe those knee-jerk reactions, ratchet them down, went too far. we all knew that. jim you alluded to it as much, they were so low you could skip at them. where are you looking, jim in this market, considering a lot of things happening fundamentally, technically, if you're a chartist? there are a lot of things that suggest we could be on the cusp of a major leg higher even from here? >> technically we still have couple issues. the market peaked above the 200-day moving average in the s&p in november and december. we're just peeking our head above it now. the nasdaq is still below it. we're still try to get out of no-man's land here. the breath is really looking strong. technology, artificial intelligence, cybersecurity, health care a little bit and looking at some beaten down industrials that are maybe turning the corner who.
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charles: right. >> i think you can be a stock picker in this market. if you look at s&p 500 expectations for the year, it is hard to get too terribly bullish from here. remember we're already up 8% right now. charles: all right. >> so if you're calling for 10% that only leaves 2% but i think there will be plenty of room for stock stock stock picking being in the right industries in the market here. charles: wall street will have to sharpen the pencils real soon. i'm getting a wrap, constance, haven't seen you so long, what will you see for the rest of the year? seeing any changes? >> this pause from the fed is another important thing underpinning in market. we have low inflation, right? we have a strong jobs situation in the u.s. as long as that low inflation can prevail the fed can keep on pause which will be supportive. charles: by the way, we might be rewriting history books with the job market this strong for this long and no real inflation. we'll have to see. great seeing you.
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constance. jim a long time. david, i see you every week. folks u.s. steel announcing plans to restart construction on a manufacturing facility in alabama. that's right, they're giving credit to president trump. the company says trump quote, his strong trade actions along with improving market conditions and union support are responsible for the resumption of work in birmingham. i had a uncle who used to work down there. work scheduled to resume immediately. u.s. steel will update other equipment and add 150 full-time workers. let's go to washington, d.c. and senator mitch mcconnell. >> good afternoon, everyone. i brought with me chairman shelby to make a statement about the agreement that has been reached. let me say first of all, however, i noted with great interest the green new deal and we're going to be voting on that in the senate. we'll give everybody an opportunity to go on record and
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see how they feel about the green new deal. secondly, with regard to the matter that is before us now, i think chairman shelby and democrats on a bipartisan basis have done a good job, from a republican point of view, there is money in there for new barrier fencing. and there is no cap on interior enforcement. not everything that the president hoped to get but i think it is a good step in the right direction. i hope he will decide to sign it. we're all quite interested in that as you can imagine. but with regard to the details let me turn it over to chairman shelby who as i said done a really terrific job. >> thank you. good afternoon. of course any negotiated settlement, nothing's perfect, nothing's, you don't get
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everything you want. i didn't get everything i wanted out of this but i think overall, considering that we're dealing with a republican senate, republican president and a democratic house, this is a down payment on where the president wants to go and where we want to go with him. that is to secure the borders of the united states. we made some concessions but we got some too. and we believe the caucus will support this. i believe the house will support it, and we hope the president will support it. as we release more and more of the details, we're putting seven bills together, not just homeland security which has been the linchpin here, holding up, but the other six bills too and we hope to file them maybe late tomorrow night or wednesday,
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anyway, go from. there you will have a lot of details then. meantime we reached agreement as i say on the principles. we will look at the language we agreed on with the house conferees and the senate conferees and go from there. i hope to speak with the president later today. last talked with him last thursday when we had a candid, i thought a very reasonable discussion about where we wanted to go. he told me then that he thought the best way we could do is open the government to work this out the best we could and i tell you, i tell the president, this is down payment. we'll build structures, we'll bring technology, we'll bring the people and we're going to secure america. thank you. any questions? john? >> all right. well, as the chairman described it, this is a down payment but it is a --
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charles: there you have it. first senator mcconnell starting off, saying that there will be a vote on the green new deal. he wants to see where everybody stands. senator shelby saying paraphrasing the rolling stones, you can't always get what you want. he thinks president trump will like this. we'll take a quick commercial break. we'll be right back. more than half of employees across the country bring financial stress to work. if you're stressed out financially at home, you're going to be too worried to be able to do a good job. i want to be able to offer all of the benefits that keep them satisfied. it is the people that is really the only asset that you have. put your employees on a path to financial wellness with prudential. bring your challenges.
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and our shirts from custom ink help bring us together. we just upload our logo, and if we have any questions, customer service is there to help. - [male] custom ink has hundreds of products to help you look and feel like a team. get started today at customink.com. charles: americans feeling more optimistic today about their personal finances than they have in a long time. in fact over 16 years. according to a new poll by gallup. check this out. you know those millenials who had the reputation for being broke and sad all the time? those in their 30s, 62% of them say they are better off today than they were a year ago. they think things will get better. perhaps because of the jobs market. it is plentiful to say the
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least. according to a new report, the jolts report out, total employment rate for prime age workers 80% in january. that is the highest since the financial crisis. jolts report sees 7.3 million new jobs. helping me to break it down, deroy murdoch and tee anna lowe. i will start with you, this "gallup poll" jumped out at me, under 30, 62% say things are better. under 25 say things are worse. that is constituency -- >> that is massive issue of student loans whether or not that will become a bubble. right now it is pretty insular. it is not having a reverb a tiff effect in the economy. they are benefiting from the gig economy. many of them who wouldn't want to admit are benefiting from the trump administration deregulation.
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latent effects are less pronounced. we obviously have an extremely tight labor market and the highest labor force participation rate in decades. charles: deroy, it is, it is just, it is absolutely remarkable. it is, i think two things for me is that how long it has been going on, you know. i talk to economists all the time and they have been talking late cycle for two years and employment number will peak and should have peaked. instead 300,000 jobs created in december, january, rather. 7.3 million jobs are open at this moment. >> absolutely. i boil it down in two words, trumpnomics works. we were promised about a year ago when the jobs, tax cut and jobs act was passed, signed christmas of '17, this would lead to economic stimulus and economic growth as well as the deregulation we heard about a moment ago and also the pro-business tone. being told your businessman, businesswoman, that's great, keep up good work. create jobs, rather than you didn't build that, you're bad, evil, 1%.
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hearing positive tone out of washington, d.c., pro-business, pro-market policies leading to growth weave seen. human happiness, not just people paying bills, people happier more than a year ago or certainly more than two years ago. charles: if people are so happy, optimism is so high, jobs so plentiful why is there so much support for a new green deal to upend all of this? do you think mcconnell is being clever like a fox, we'll put it up for a vote? >> absolutely. we're living in a renaissance of political whips and machinery. if we look at the idea of this green new deal, at least the initial investment would be probably more than $10 trillion just to replace all that infrastructure and every single building in the country. so it is, i think there is a sense of overconfidence really right now. as one of my colleagues put it, it is socialist christmas list. there is not much that will reduce -- charles: that is different
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story. yeah. i got to tell you, it is so interesting, because the same folks who said listen the wall is kind of a nut at this idea in part because of eminent domain, all the families living along the texas border, many are libertarians. now we'll take everyone's house and buildings reredo it for them. let's go to mitch mcconnell. he is on right now. >> move money around. pot of money is only so big. some he have those monies would be put towards the dhs priorities move around from defense or disaster aide, could that create a problem? >> well, first of all i hope he signs the bill? second he ought to feel free to use whatever tools he can legally use to enhance his effort to secure the border. so no, i would not be troubled by that. reporter: any assurances the president would sign this deal? >> i would ask for that.
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one of the thing that happens around here, you reach an agreement, then the deal has to actually be put on paper. and frequently there is a lot of elbowing back and forth after the agreement is reached. i told the president i thought he as well as all of us ought to wait until we actually read the final deal. i have recommended that if it becomes what we think it is, i do recommend he sign it. reporter: would the president been better off accepting the deal that the senate negotiated before the shutdown? >> i think, i think he has got a pretty good deal here, you know. the speaker said there wouldn't be a dollar for a wall. i guess we'll have an argument now what's a wall but barriers. and they want ad cap on detention apprehensions. i think, he think he has done just fine. i hope he will conclude that because he has got to sign the bill. reporter: would you consider overriding the president's veto
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if he -- >> look, that is way on down the road. i'm hoping that he will find this agreement acceptable and he signs the bill. reporter: if he adds to this deal, is there any wiggle room here? are you open to negotiating with the white house or is this agreement a done deal? >> as chairman shelby pointed out. they reached an agreement they have to put it on paper. we'll have to see if that reflects the principals and we're hopeful the president once he does that, once we do that we'll conclude it's a good idea to sign it. reporter: [inaudible] charles: senator mitch mcconnell taking a few questions there. when we came in it was pretty clear someone was asking about whether or not president trump should even consider a, the perhaps, using a national emergency. he talked about president trump using all tools he could to enhance border security.
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saying he would recommend president trump sign the deal. coming up one of facebook's earlier investors blowing the lid off the social media giant. roger mcnamee on his book "zucked" next. ♪ state of the art technologyt makes it brilliant. the visionary lexus nx. lease the 2019 nx 300 for $359 a month for 36 months.
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>> great job on the conference committee. now we have a bipartisan agreement. as in all bipartisan agreements everybody had to give something. we are urging the president to sign it. the president should not make the same mistake he made a couple of months ago when there was a bipartisan agreement and he wouldn't sign it and caused the shutdown. please, mr. president, no one got everything they wanted in this bill but sign it and don't cause a shutdown. the leaders of the conference committee have found an agreement in principle to keep the government open. the details are still being
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hammered out. but the tentative agreement represents a welcome path forward for our country and a way from the dreaded government shutdown. hopefully this means the country will be spared from another nightmare of furloughed federal employees, snarled airports, economic hardship. hopefully this means no more farmers will have to go without assistance. no small business will be able to apply, will be unable to apply for loans and no americans will have their tax refunds delayed by another unnecessary shutdown. hopefully this means that it will not only pass the dhs appropriations bill but the six others, already done in a bipartisan way that have been caught up in the tangle of these negotiations since last year. each of these bills contain support for programs to help the american people. money for infrastructure,
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housing, combat the opioid crisis and more. one thing i know for sure, these months of shutdown politics must come to an end. the president should sign this bill. we have a bipartisan proposal to accomplish goals. we haven't seen the fine print yet. the parameters are good. and so -- charles: senator chuck schumer urging president trump to sign this bill. i want to switch gears here. my next guest is someone who knows a thing or go about technology, especially facebook. roger mcthat me is earlier investor in the company and long-time mentor to mark zuckerberg. his book "zucked," he undertakes a scathing examination of the social media giant what he calls the dire consequences of its unchecked power. roger, thanks for coming on, this book has shaken up silicon
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valley. it is shaking up the country. waking up to the facebook catastrophe what is that? >> charles, i'm a person who spent the last 36 years investing in silicon valley. i'm a true believer technology is one of the driving constructive forces in our economy. the issue in this book, i was a mentor to mark zuckerberg from 2006, to 2009. i helped to bring sheryl sandberg into the company. i was immensely proud of it. i started seeing things going on a couple years ago made me realize something was wrong, something happened unintentionally, the business model and algorithms in facebook were allowing bad people to harm innocent people. i reached out to mark and cheryl in 2016. something is wrong here. whatever the reason, maybe the time was not right, they were not prepared to hear the message i spent three months quietly trying to facebook to take it seriously. reality not just facebook but
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facebook, whatsapp, instagram and google, youtube, internet platforms whose business models are basically based on manipulating our attention, pay more attention to ads. in that manipulation, the way they are constructed they leave us vulnerable to manipulation of our ideas and our time. charles: roger, i saw one interview where, because in america a lot of people think about this as perhaps extending divisiveness in america, perpetuating incidence of bullying, crisis we have of bullying. >> really. charles: you go much deeper. you talked about ethnic cleansing in myanmar and facebook's role in something like that. that's deep. >> charles the thing that is so difficult about this, i know these people. and i believe they're really good people. i think what happened here they got so focused on the mission of connecting the whole world, they were in such a hurry to do it, they didn't take the steps necessary to make sure that the unintended consequences wouldn't
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hurt people. and so we've seen in emerging countries like myanmar, like nigeria, like sri lanka, because people in facebook didn't have people in the countries spoke the native languages were not familiar with the culture, taking countries with very limited infrastructure and no media directly to facebook would allow hate speech to do great harm. i don't think anybody did this on purpose. i don't think facebook wanted people to get hurt. i think the problem simply is the business got so big, so rapidly, that the steps necessary to protect the people who use the product weren't taken. it is not just true at facebook. it is just as true with a lot of other companies. charles: roger, we had a lot of breaking news. we have to cut it shorter. >> that is quite all right, charles. the book helps people understand what they can do to protect themselves, protect their children, really protect the whole society. thanks for having me on. charles: i look forward to
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having you back on. it is fantast book. >> thank you. charles: republican senator marco rubio is aligned with democratic lawmakers. we'll dive into the plan to limit stock buybacks. will other republicans endorse it. more importantly, what does it mean for your portfolio? ♪ i can't tell you who i am or what i witnessed, but i can tell you liberty mutual customized my car insurance so i only pay for what i need. oh no, no, no, no, no, no, no... only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ metastatic breast cancer is relentless, but i'm relentless too. mbc doesn't take a day off, and neither will i. i treat my mbc with everyday verzenio, the only one of its kind that can be taken every day. verzenio is the only cdk4 & 6 inhibitor approved with hormonal therapy that can be taken every day
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woi felt completely helpless. trashed online, my entire career and business were in jeopardy.
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i called reputation defender. they were able to restore my good name. if you're under attack, i recommend calling reputation defender. and consider joining their groundbreaking campaign to give every american the right to remove old, inaccurate search results by going to righttobeforgotten.org. vo: if you have search results that are wrong or unfair, call reputation defender at 1-877-492-6705. charles: the debate over stock buybacks, already a hot issue with democrats including bernie sanders and chuck schumer who recently proposed limiting companies buying back their own stock, there is a new person involved, senator marco rubio, who is jumping into this game, pushing a new proposal that would eliminate preferential tax treatment of capital gains as a way to discourage corporations from doing buybacks. we have jim awad, david nelson is back with us.
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guys, we did a segment on this three or four weeks ago. we kind of saw this coming but on the heels of that op-ed, they got so much traction, jim, it is really amazing because this is sort of the green light now for all democrats, maybe even more republicans to get on this bandwagon. >> yeah. charles: what are they thinking? what are they thinking by curtailing or limiting or restricting buybacks? what does it do for the broader economy. >> the independent intellectual logic for rubio's proposal, i'm not say i agree with it, increase capital gains rates, people who own stock have less incentive to sell it back to companies when they buy it back, increase writeoffs for companies when they make new investments put in on temporary basis in the last tax act. rubio wants to make them permanent. basically what he is trying to do incentive companies -- charles: that is rubio angle. >> that is rubio' angle. >> democratic angle is
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completely different. it goes far beyond this, david, before you buy back stock you must hire or give raises to x-amount of employees? >> i'm not on board with that. i will be on board with anything that changes this dime knack i can. why companies buy back stock, neither side is right here. reason they buy back stock, most of it it is sinister, for ceo and management to get their bonuses. >> you think that is nefarious? >> that nefarious. charles: really? >> does absolutely nothing for income. does absolutely nothing for sales. increases bottom line lowering share count. charles: investing toe 101, only go ways company return shareholders through dividends and buybacks. buybacks makes the pie smaller, slice -- >> forgetting stock dilution from stock options and stock based compensation. ibm is the poster-child for
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this. they bought back $13 billion worth of stock for decade. what do they get for it? declining sales and not investing in plants. charles: not say they overpaid red hat. paid 10 billion more than they would have two years ago. >> companies have mixed record of success buying back stock. you can make a intellectual case they want shareholders, their employees to own stock, issue options and dilution with the buybacks. charles: with about this? i think this is bigger political issue for capitalism, for the large corporations. these companies like the idea -- ibms of the world in the midst of doing these things fire people? general motors bought back a lot of their own stock last year. when the average person out there starts to learn about buying back stock, either to borrowing money or cash, wherever you get it from, to bolster the bottom line for the shareholder class, whether it just be ceo or shareholder class, while you throw out workers who have been working for the company, 20, 30 years
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that section explosive. we're sitting on a keg of dynamite. >> that is a fair point but the company can't do it for that reason. if they expand the company and build a better business that can hire more people in the future, then you solve the problem. growth solve as lot of problems. these companies are not investing in their future. ibm is a case in point. cisco bought back billions of dollars worth of stock at higher prices just to offset the stock dilution. charles: let me point this out though. over the last decade investors for the most part shunned u.s. stocks. if i'm have a straight business going on but no one is buying u.s. stocks and my stock is drifting, not reflecting true value, why don't i buy it? why don't i put my money where my mouth is? nobody else boying a stock, shouldn't it behoove the company to step you toe the plate? >> if the company has excess capital, paid dividend, still has excess cash flow you can make that case but politically with the income inequality we have in this country, with this going to be a major political debate between now and the next
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election it's a target. charles: no doubt about it. gentlemen, love having the discussion. it will come up again real soon. thanks a lot. make sure you watch senator marco rubio tonight. trish regan, amazing guest at the right time, prime time, 8:00 p.m., i will be watching with you. bill gates, he is blasting the tax proposal of the radical left. he calls them extreme and misfocussed but maybe not for the reasons you think. by the way republicans don't get off easy either. we'll be right back. (indistinguishable muttering) that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo!
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charles: one of the billionaires the liberals actually seem to like, bill gates is firing back at their extreme tax proposals. in an interview with the verge, the philanthropist supports more progressive taxes but he thinks one from congresswoman alexandria ocasio-cortez which calls for a 70% marginal tax rate is missing the picture. he says what is really crazy, our mounting debt that will eventually bite us. joining us to discuss, democratic strategist, kristin hahn and deroy murdoch.
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he is all for progressive taxes but this focus on income and 70% rate the democrats are missing it here. >> i think he is right. i think a lot of members of the democratic party, particularly in the house would agree and do not agree the 70% rate is the right way to go. there is obviously, devil is in the details, things have to be worked out legislatively in committee, but there are a fair number of democrats who don't agree with that. i would point to a recent op-ed that ran on cnn.com by members of the blue dog coalition. they talked about just that, the debt and deficit is something we need to look at more. we have neglected over the past several years. charles: real quick, senator mcconnell calling for a vote on the green new deal. was that a brilliant idea on his part to flesh out who is actually for this, who is not? >> nobody is accusing mitch mcconnell not being a master legislator. so don't underestimate him but i think, you know with the green
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new deal there is a lot in there. there are not many details. i think it is significant it was introduced as a resolution in the house, so it is non-binding. there is clearly political play on his part. charles: deroy, it is interesting with this interview, the whole, democrats being misfocussed i thought would be the key. then he was asked about, idea that a lot of people are saying don't worry about deficits, quote, he says, now that is some crazy talk. he is worried about deficits and debt in a way i had not known before. he is warning that this is a big problem for this country? >> deficits are a big problem and we need to get some control of spending. i and other 130 free market leaders in the country signed an open letter for the president, number of things, war on waste, 5% reduction in spending. spearheaded by a group on american transparency whose advisory board i serve. so many examples of absurd government waste, duplication, overpayments. charles: waste, fraud, abuse,
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tips off politician's lips but when we get in we never hear about that. >> we have mick mulvaney a free marketeer. president of the united states is great on taxes and deregulation, could do better cutting spending. he said to the cabinet, find 5% reductions to the agencies. hold them to that. reward bureaucrats who find savings in their own agencies. charles: less than a minute ago? what do you think about that? pox on both houses? >> definitely a pox on both houses. a lot more difficult than going through finding line items in your budget. discretionary spending line items to cut. that will take tough decisions. people don't do it. entitlement reform. tax reform. you have to look at all of the above. charles: all right. hey, kristen, great seeing you. first time you've been on. great job, you quote ad network we don't quote very often.
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deroy, you good job as well. >> thanks, guys. ♪ offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. it was funny because when we would call another insurance company, hey would say "oh we can't beat usaa" we're the webber family. we're the tenney's we're the hayles, and we're usaa members for life. ♪ get your usaa auto insurance quote today.
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charles: markets continuing to rally into the final hour of trading, the shutdown part might be behind us. investors looking forward to, perhaps, the china part. and then, of course, we're still in the midst of earnings s&p. jim awad is back with us to discuss where this market goes from here because, jim, i do some technical work, and for me, you know, my numbers -- let me find my numbers. s&p, 2744. nasdaq, 7402. and dow, 25,411. if we close above those numbers in my mind, from a technical point of view, we could actually have the next leg up to retest the all-time high. >> and you're getting the fundamental factors supporting that, assuming we do get this budget deal and it's signed, sealed and delivered, if they come back with china with an
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agreement that they're going to postpone the march 1st deadline and keep talking. and then you've pretty much got a free runway until -- charles: brexit is the end of march. >> and earnings season, of course, begins early april. so between now and the end of march, we could have a good runway here for the markets. charles: i guess the wildcard might be the federal reserve could come back into this. you know, chairman powell spoke today, and he's been focused more recently on income inequality, the slippery slope of upward mobility not what it used to be, so we haven't -- he's stayed away from policy, but if things continue as good as they are, because you got to believe if they didn't talk about the it that much, these headwinds, shutdown, china trade played a role in fed's abrupt reversal, right in. >> yeah. charles: and maybe they start, if they start to come back and
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say, well, things are getting better -- >> they would lose complete credibility if they changed that fast due to -- it would say that they're a slave to the asset prices in the stock market. now, they're still on record as saying that they want to increase again maybe towards the end of the year. so they should do nothing and see how the economy actually evolves. you're going to have negative earnings growth in the first quarter, so we have to see what the second quarter looks like and whether it looks like we're going to resume earnings growth in the second quarter. what the fed should do is nothing minimally til june. charles: vis-a-vis year-over-year. >> right. charles: last year was one hell of a year for earnings. it was a milestone year. >> right. charles: every quarter in the high 20s. we see earnings beats, the pace was just remarkable. so we're kind of okay with that. does that actually make it even easier for investors? >> well, the real key is the
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second quarter. if for some reason, earnings estimates kept coming down so they went negative for the second quarter, then it would be hard for the fed to be too optimistic, but the expectation is we will turn potts again in terms of -- positive again in terms of earnings and the second quarter should be reasonable building toward the third quarter. then the fed, over the summer, if they want to make an adjustment -- charles: the jobs report number came up, used to be on janet yellen's dashboard. i'm not sure how prominently it figures on jay powell's, but for her, it would have had a yellen fed considering rate hikes. >> yeah. i think he is more market oriented than yellen was, and i think the action of the football markets is as important as the labor markets. and i think what he's expecting is that the labor markets will remain tight, so i don't think this report changed his thinking in a major way.
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charles: that's why it's good to have somebody from the carlyle group in there. hey, jim awad, thank you very much. all right, folks, we're up 366 points, dow was up 400 at the peak. still over those key levels, liz, maybe break us out even further. liz: how about that? that's how everybody has to seamlessly go from charles to liz. sounds good. thank you, my friend. breaking news, the potential deal may not be fully written yet. in fact, is there even one word on paper in not yet, but wall street sees it as an eventuality. wall street rallying on word of an agreement in principle on the budget battle over the border. tech and industrials are leading this rally, the dow up 364, s&p better by 34, the nasdaq up nearly 100 points. moments ago the leaders of the senate speak after their party luncheons. senate majority leader mitch mcconnell said he hopes the president signs what he calls a,

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