tv Making Money With Charles Payne FOX Business May 7, 2019 2:00pm-3:00pm EDT
across the board major issues are taking it on the chin. apparel makers, technology stocks, semiconductors stocks, those with ample exposure to china or the fear that they're exposed to china, they're all getting caught up in the same way. charles payne, right now. charles: neil we have heavy lifting to do, good afternoon, i'm charles payne this is making money. neil laid it out. renewed trade tensions continue to drag on investor sentiment. as the united states and china are scheduled to resume talks later in the week. we'll go live to google's conference as the tech giant reveals new products and promises for companies harder to track you on line but will this lead to new regulations. president's approval rating ticking up to a new high, 46%. economy and jobs are on fire. the markets are not right now. all that and much more on
"making money". ♪ charles: u.s. trade representative robert lighthizer says china is backtracking on trade talks but insist as trade deal is still possible. lighthizer said the chinese delegation including their top negotiator are still expected in washington on thursday for further talks. edward lawrence is at the white house live for us with the latest. edward? reporter: charles, u.s. trade representative's office, you mentioned robert lighthizer, anytime this afternoon filed official registry notice to raise tariffs on $200 billion of chinese goods to 25%. those tariffs go into effect at 12:01 friday morning. soon his office will start the process to additional 25% on additional what the president calls $325 billion of chinese goods, about everything that china imports into the united states. so far republicans on capitol hill applauding the president's action. >> it will hurt the economy
here. it will hurt the economy in china. i don't know how you get china to stop cheating unless somebody stands up to them. i'm all for getting a good deal. they have been cheating for decades now. this is the last best chance in my lifetime to get china to change their business practices. reporter: china steals about $200 billion the intellectual property each year. the u.s. trying to get them to stop doing that to protect the intellectual property. now the trade frictions led to increase nationalism within china. in fact the state-run media approved a commentary today run in the state-run newspaper showing no appetite for concessions to the united states that article says, quote, things that are unfavorable to us, no matter how you ask, we will not take any step back. don't even think about it. a spokesman for the chinese foreign ministry says more tariffs are not the way to solve more trade issues. >> translator: we always believed that mutual respect, equality, and mutual benefit are
the premise and basis for reaching an agreement. adding tariffs will not solve any problems. what i need to clarify here is that the negotiation itself is a process of discussion and it is normal for the two sides to have differences. reporter: according to the u.s. trade representative's office it is more than just differences the chinese rolled back concessions they made agreed to in multiple sections of this trade agreement. he says he is not willing to go back and reopen documents as he calls it that have been closed already. the chinese vice premier will be here on thursday and friday. he is the top negotiator for china. he is the guy that could make a deal if we come to one. back to you, charles. charles: edward, thank you very much. and now, as president trump prepares to raise tariffs on chinese imports, they start on friday, former white house chief strategist steve bannon tells fox business that the president stepping up his threats on china signifies quote, the most important day of this presidency. >> this is an economic war.
we're going to have fundamental structural change in the state capitalism that china has. china has a system is of state capitalism. we're going to get changes on forced technology transfers, subsidies to state-owned industry, intellectual property. these are deep issues. charles: let's bring in kyle bass now for a fox business exclusive. kyle, thanks for joining us. >> you're welcome, charles. charles: you spent a lot of time with steve bannon, particularly recently talking about the issue what is at stake here, with respect to what is going on with china. most of wall street, they hate this kind of stuff, hence the selloff. you as really significant player on wall street though, are you so different? why are you in a different camp than the let's of the street? >> on your show a few minutes ago you interviewed lindsey graham and lindsey was saying this is about getting a better deal for the united states for the future. by the way, this isn't a partisan issue.
whether steve bannon or nancy pelosi you hear the same thing coming out of both of them with regard to how we should treat our relationship with china. china, as you just said steals 200 to $300 billion worth of intellectual property a year. they run state-sponsored programs to put a lot of our industries out of business because they can. and they have done this for decades. we've just recently won't up to the fact that we need a reset in our relationship with china, that chinese individual just giving the peoples daily speech said our relationship should be based on mutual respect. i don't know if you steal a couple hundred billion dollars of goods from someone each year how that is respecting our relationship. so, for the chinese to backtrack, say that intellectual property theft is off the table. or unilateral enforcement of a trade agreement is off the table, we should walk away from the agreement. i know in the near term everyone that owns stocks including myself, will suffer near term
pain but in the long run, we can't let our industry be hollowed out by the chinese economist party. charles: that is interesting because you started off saying we, america we had epiphany, new knowledge with respect to what is at stake what is stolen but we doesn't always incorporate all the experts. it down incorporate businesses. something that you retweeted recently about the u.s. trade representatives office, united states businesses didn't want them to do anything, take any strong actions against china, knowingly participating in this. even now they pushed back through major organizations somehow this is dangerous. china cannot be beat. we should accept the status quo? >> what is interesting is the chinese use one of our, let's say attributes against us, right? they use capitalism against us to the best of their ability, i.e., they basically bribe u.s. ceo's and corporations by giving them special access to various
markets, while not giving access to the rest of the u.s. corporations. then they use those ceo's to lobby the president, to leave china alone. they, they're so coercive, good at what they do, again we're just figuring this out. unfortunately some of china's best lobbyists, are the ceos of u.s. multinational corporations. hopefully, from what we're seeing, what i see when i meet with a number of these people is the people in, the legislators, people in the administration, even academics are starting to wake up to see that corporate america is lobbying for the chinese. and that the chinese hire many lobbyists in d.c. to do their bidding. time to call a spade a spade and push back like we're pushing back. i'm thankful we are pushing back. our kids will be thankful we reset this relationship and disallow hollowing out of u.s.
industry. charles: what do you say that china doesn't have elections. president xi xinping is set is for life and that they can wait this out, playing unusual quote, unquote long game? what do you say to people that say we cannot beat china? >> when hu jintao was here for state dinner of president bush 43, president bush 43 got him alone for the first time ever in his administration's history and they had a talk on what their most worried about. president bush was most choreographed about another terrorist attack on u.s. soil. what hu was said to president bush was, the thing i'm worried about creating 25 million jobs a year. if i don't do that, we may have uprising or regime change. president xi might believe he is there for life. but i think it is very important to understand they are the on the shakiest economic ground they have ever been on today. they're desperately short of u.s. dollars. they're running out of reserves. they run a fiscal deficit and current account deficit
secularly from now on. so they are in desperate need of dollars. xi is in a really difficult position. any pushback we give him right now will go a long way to, let's say upsetting his political founddation which will be difficult for him. charles: before i let you go, there was an article in march of last year, investor who won big betting on housing collapse lost on china bet. they say don't bet with kyle bass and he is is talking his book. >> let's be clear about something as we speak today, as i sit here in front of you we carry no chinese positions. china is the most important thing to me, let's just say as far as national security in the united states. whether or not we win or lose in our invests has nothing to do with the seven or eight years of me studying china's financial system as a werner. i think myself and my firm we
know it as well as anyone can. whether or not you listen to me i truly don't care. i think from my perspective we're going to put as many facts out there as we can, try to influence policy as much as we can going forward. charles: kyle, i appreciate you coming on. i appreciate what you've done and hopefully we'll have you back real soon. thanks a lot. >> thank you. have a good one. charles: markets are slightly off the session lows. listen, we're getting hammer here on the china trade uncertainty. we want clear advisors jim awad and bellpointe chief strategist david nelson. jim, i haven't seen you in a while. >> yeah. charles: we were moseying along there, taking out new highs on the s&p, taking out new highs on the nasdaq. it was sort of idyllic. we had the wind at our backs and everything was great and all of sudden the tweet went out sunday afternoon and the whole world has changed of the has the whole world changed? >> we don't know. this is tricky time. the other risks receded. the fed as a risk receded.
europe is a little better shape. the other risks we're looking at all improved become less of a risk. one risk always out there the market priced in and expected a china deal. if it unraveled at the last moment it could create enough uncertainty in the financial markets and business spending and consumer spending to erase much of the gains this year. for the moment that looks like it is happening. but all depends what happens over the next week. do they go to the brink and settle the issues which case the market makes new highs? does this drag on in which case uncertainty will bring some damage here? charles: almost all the experts said there could be a last second issue like this. china is notorious in fact for negotiating this way. we saw late last week where there were reports in the media that the trump administration was going to drop a few things, like insistence on ip protections. maybe china planted stories. president trump saw them and he
has drawn a firm line in the sand, david. >> this is adversary in every sense of the word. whether or not we get a deal, like kyle said, likely to go on for decade. they clearly have a mandate. almost in their dna i fully expect to be back here at some point in time, because they will cheat, no matter what they come up with today somewhere down the road they will go back to their ways. if you think back a couple years ago, trump was one of the few out there that would call the chinese out on this interesting trade dynamic that we have. suddenly it is almost bipartisan. almost conventional wisdom at this point we have to do something about china. even chuck schumer came out an and applauded president. saying hang tough on this. charles: we have two issues, the stork market, where it goes, particularly near term after this big runup and a bigger issue that steve bannon covered in an op-ed, this is a fight for the next is century. this is the fight for not necessarily global dominance but
certainly type of global influence we enjoyed with the world's reserve currency, that we should not give up without fighting. >> absolutely. i buy into and believe the case this is an existential long term threat to the united states. we have to confront it. the point is, do you confront it by having a series of truces like you do between the israelis and gaza, manage the process or do we go to the brink where you don't know what the other side is going to do? if he feels he is at risk, he could do something geopolitically that is dangerous. so the key here is to push hard enough without letting things slip out of control on the other side. so you push somebody as far as you can push them. then you give them a little breathing room. you create a truce. you go on for a few years. then you renegotiate. but if you push them over the edge, that can create a unpredictable -- charles: do you think we're pushing china over the edge? >> i think that is a risk. it may or may not be worth it long term but what i'm saying for right now it could create a
turbulent period if you give this guy no outs. you push him until he can't breathe. let him take a breath. charles: we talk about art of the war, "the art of the deal." in the art of war, sun sue sun u says you leave our enemy a way out. >> different administration, a level, a better playing field for him. i think the president is calling him on that. he is not going to let it happen. charles: if i heard what joe biden said last week, frankly front-runner, hey, if biden gets there we're okay. he says we're not a threat. >> maybe the only democrat that doesn't see a threat. charles: maybe only one. contrarian thing is working for him in the polls. from an investment point of view, when do you start to make adjustments? do you wait until friday? you see where this thing goes? >> you know what? i don't think you can make an intelligent investment judgment based on a series of events that might occur in the next week
that you can't predictyou stick to your long-term gain plan and if there is big change in stocks versus bonds and then you rebalance. if stocks go down a lot and bonds go up, interest rates go down because people are afraid of a weak economy, that would force you into buying more stocks and rebalancing. >> we're hanging tough for the moment. we're grinning and bearing it. jim an david, hold on if you can. for more i would like to go down to the new york stock exchange and gerri willis. she is on the floor of the nyse. gerri, what is it like down there? reporter: tell you a lot of concern down here. a lot of talk a lot of speculation. i'll get to that. look at numbers, down 2% for the dow. the dow on pace for the biggest one-day drop since january 3rd. it's a flight to safety. treasury yields coming in here, tumbling. what is going on? big movers, apple, boeing,
goldman sachs, dupont, home depot responsible for half the dow's losses. what is it about? china, china. what you have been talking about since you started the show. the idea we may not get a china trade deal in short order, if ever. there is the speculation i'm hearing, what if the worst of all worlds, hike in tariff 25% on china goods coming into the u.s. and no trade deal? that is the kind of talk on the floor of the exchange as people try to figure out what to do next. you should know s&p 500 sectors not one is positive. tech is down 2.58%. industrials down 2.4%. health care down 2.15%. all of this coming in negative. i want to share with you what is going on with boeing. because it is leading the dow lower here. barclays, downgraded the stock to equal weight from overweight. cut the price target. they're saying that a new survey of flyers they will avoid 737 max planes for an extended
period of time. lots going on down here. not a lot of positive sentiment though. back to you. charles: gerry, thank you very much. certainly the bears are winning today with the stock market in a broad decline, again led by trade sensitive stocks. industrials the biggest loser so far. i want to bring in bubba trading founder, chief investment strategist todd horowitz. i know you're a chart person. i know you're a trader. the 50 day moving average for the dow is and we've cut through that like hot butter. it is my experience when we cut through the 50-day, we have to start looking at the 200 day as perhaps the next level of support. where is the near term worst-case scenario? >> well, charles, good afternoon. i don't see, i see a lot more issues here. i think we could go significantly lower from here. i think one big key we looked at, we broke yesterday's lows on overnight trade. we broke 8350 on the s&p. to me it looks we can go down to
2860 on the s&p. i think that may go through there as well. i think the big thing we're missing a key reversal last wednesday on the fed meeting. even though we had a rally friday. we still had a basic key reversal. there looks to be a lot of pressure on the markets. the china deal was already priced into the markets f it falls it could create a little more selling pressure. selling begets selling and there will be panic. charles: doesn't -- is there some irony if you will maybe we had sort of a reversal in the bias based on jay powell and non-commitment to further rate cuts if indeed this trading situation goes further and we start to adjust gdp numbers, other growth numbers, lower, that would auger for perhaps a rate cut? >> i could understand a rate cut, charles. we'll get inflation. everybody thinks that wage inflation is great. it is great for employees to make more none any. you don't think the companies
will not pass the wage increases on to the consumer? they're not going to pay for them. they're going to race the price of goods and services. that is what, i think that is the point we're missing. charles: i hear that with the chinese tariffs. i hear that -- 400 companies have reported, barely half made revenue. what company is passing on price increases? what company out there -- is there any product todd you would not buy tomorrow if the price was 25% higher? i don't see where they pass on price increases, they would have to eat it, eat in margins and case for lower markets i would agree with that but i don't know about them passing on price increases to consumers? >> i think they pass on labor costs. they may not pass on the tariff cost but certainly will pass on labor costs. they will not eat that. their margins are slimming down. though earnings have been beating, they're beating lowered expectation to begin with. i would beg to differ. i think there is a lot more issues here than anybody cares
to admit. of course the fed continuing to try to keep pressure on bonds, keep pressure on u.s. dollar. well the u.s. dollar is going higher. no matter what we think, u.s. dollar is on the way back to par. there will be issues. that will create problems. charles: if this issue is somehow resolved or there are not additional tariffs, in other words cooler heads prevail, right signals are sent friday, and market rebounds would that be some sort of a buying event for you? obviously a lot of great stocks are down today, with the bad ones as well? >> charles, i'm right now in the position, if we close here lower i'm going to be sell the rally mode. i've been long all the way through. been waiting. i called top in the market last week. i have to wait until i get confirmation. if we close before yesterday's lows. to me that is confirmmation. i will be a seller of rallies until further notice. charles: thank you very much. always appreciate it. >> thank you, charles. >> well have much more throughout the hour. pivotal indicators let's be quite honest that must hold or
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charles: google's biggest conference in a year underway right now. the tech giant rolling out new hardware, putting a focus on privacy. robert gray live from mountain view, california with the big take wais. robert? >> that's right, charles. it is ongoing right now. it should be winding down momentarily. unveiling new pixel 3 phones. looking to control the narrative if you will. particularly given the last week and last year google has had, when you think about revenue disappointment last week with the quarterly report. you would almost say a plethora
of privacy issues, whether lawmakers, lawsuits against the company, both here and internationally as well. looking to address all of that. ceo sundar pichai saying near the top of the keynote that the company aims to create products based on a foundation of privacy. he launched into the product side and it was half hour before he bottom back into the privacy details. here is what he had to say. >> today you can already find all your privacy and security settings in one place, in your google account. here you can view and manage our recent activity, and you can isly change your privacy settings. reporter: really trying to bring them to the fore so most users can find them very easily. giving more control over the location and search history. google saying that you can auto delete how long you want your search history to be saved, charles. looks like google will hang on
to the data themselves. with that, send it back to you. charles: robert gray. thank you very much. google's stock continues to drag as the conference is underway. lawmakers on both sides of the aisle warn facebook after possible 5 billion-dollar fine. hey, you know what? that's a bargain. some are considering a tax to make this company, all the other companies big tech change their models all together. national republican lawyers association board member harmeet dhillon. just fascinating every single day both sides of the aisle are saying these are bad actors. somehow we have to curb what they're doing. i thought it was amazing senator richard blumenthal, senator josh hawley, a, someone on the right, someone on the left, both signing the same document saying they want privacy fine, think it is too low, not enough to change facebook's behavior. your thoughts? >> with these companies, google, facebook, others approaching trillion dollar market caps in
the case of alphabet, 5 billion-dollar fine is simply like a tax. it's a cup of coffee to them. earlier this year i think in january france fined google $57 million for violating its brand new privacy law, the gdpr. so they will pay that and move on. so i agree. josh hawley has come off of being the attorney general in his state where he actually pursued these companies not just for privacy, also talked about antitrust prosecutions as well. that is a theme that elizabeth warren sound as well. they talk about it a lot, a few of them do. many more are taking money from big tech in the form of pac money and donations. that is frankly really deterred any innovations from happening here. we're way behind other jurisdictions in protecting our consumers on these issues. charles: harmeet, elizabeth warren says she wants to break the companies up. she talked about increased taxes
and regulations. a former member of the obama administration saying taxes are the wrong way to go. they should put levees against the companies, particularly facebook and google to change their business models. how likely is that? how should big government go after big tech? >> i don't like that. i think government gets it wrong, with rent and best way to free consumers here, give consumers the right to go into court to seek relief from these companies as well as the department of justice using existing antitrust regulations to actually begin breaking up these monopolies or duopolies in the advertising space. for example, facebook and google are a due open -- duopoly. that would be one way to go. president could take actions with executive orders that control the united states government and who they do business with, requiring certain minimum criteria for private sir, openness,
non-discrimination. that could be a way to go as well. charles: meantime, this whole censorship issue gaining even more momentum. aoc parody account was taken off twitter today although we know those things exist for republicans and conservatives. always appreciate your expertise. >> thanks, charles, bye. charles: coming up i will go in depth why i think big business is being disingenuous when it comes to use tariffs as a weapon to fight back. next the american people on president trump's side when it comes to the economy as his approval rating hits a new high. our political panel will weigh in right after the break. ♪
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close eye on the situation of china. otherwise we see sharp rise in tariffs. there are really no safe areas right now. we'll have more on the markets coming up. anadarko petroleum will reverse course in favor of a bid by occidental. occidental's latest bid to take over $57 billion. compared to 50 billion from chevron. anadarko will have to pay chevron a billion dollars to back out of the deal. president trump delivering when it comes to the economy and the american people are noticing. two new polls have trump hitting highest approval rating of his presidency, 46%. when it comes to the economy, more than half of the public gives him a thumb's up. it is easy to see why. wages up more than 3%. in trump country, jobs are now growing at the fastest rate, much faster than urban areas. so how do you run against
prosperity? for more, want to bring in fox news contributors deroy murdoch and leslie marshall and from the "washington examiner," tom rogan. leslie, everything is firing on all cylinders, yet i hear the leading democrat joe biden saying that the economy isn't working? >> well, because you're looking at money with just money. if you look at the my term elections had tsunami in the house gaining 40 seats, one of the reasons they did that was health care which sunday the umbrella of the economy. it's a very big issue. the data shows in the exit polling data, to americans. that is not just with democrats but with republicans as well. so the president might have two good polls this week but the polls go up and down. charles, you know, if you want to know how valid those polls are, just ask hillary clinton. i believe she is not president. charles: no, she is not. but i will say this, deroy, if hillary clinton had these numbers to run on blue-collar wages up nine months in a row, more than 3%, asian unemployment
went from 3.1, to 2.2%. are you kidding me? these numbers are mind boggling. >> these are spectacular figures. the lowest in almost 50 years. the last time it was this low, beat test were still together. ways in kin garten. wage growth up year-over-year basis. those benefits are flowing more towards people with lower incomes than higher next. what you're seeing believe it or the not under donald j. trump, income inequality is shrinking. who would have thought that would happen under a republican president. charles: tom, let's face it, people who aren't, i know people making more than they ever made but they are dissatisfied with the fact others are making significantly more than they are. that card worked politically many times? >> well it has but the economic reality in terms of not simply
declining unemployment rates, in terms of relative stability in the metrics, in terms of inflation, those are matched up with really good growth in terms of both hours, working and hourly wages but also in the political sphere, this debate will be fought and won by either trump or democratic nominee on basis of who has the better moral narrative. if president cannot trump as he can articulate now, if you're a minority what you're seeing, if you're a middle class, look what you're seeing and democrats are suggesting very expansive social programs that would be appear to cost a lot of money, there is an ability there to i think persuade independent voters because at the margin, the moral interests would seem to fall into trump's favor. charles: meantime, leslie, it is really interesting though, since biden joined, become an official candidate we are seeing within the democratic party where more
conservative thinking seems to be emerging right? or maybe it was always there but it was quiet. pushing back against some of the left-leaning ideas dominated headlines. will the ultimate candidate for the democratic party have to be more in the middle particularly when it comes to fiscal things? >> there is couple things there, charles charles, that is accurate. majority of democrats, not just politicians we see in the house and the senate and in states gubernatorial and state legislatures but also voters are more center. we have seen historically the democrats have been more successful in some races, aoc is obviously exempt from that. moving to the center and not to the left. even though they may be louder and have more followers on social media, the far left democratic socialist version if you will of democrats, a faction of democrats, a wing of democrats is not the majority of democrats. so what joe biden is speaking to, not just the majority of his base and echoing the sentiment
of majority of politicians of democrats in washington but he is also speaking to republicans who may not be happy with what's happened to their party. people who voted for trump, may not be happy. those independents like tom just said, rightfully so, who are on the edge, don't have any, any love for one party or another. but it is an individual. if i can just say one more thing, all the numbers we talk about, unemployment can be low. it is how people feel. they're not going to look at the stats. they don't live in the world that we do. most of them aren't -- charles: i know that, leslie. how they feel. charles: people know the difference between i had a job this year and i didn't have a job two years ago. they do make that distinction. this is something i think republicans have to understand, or at least think about, last month 490,000 people dropped out of the labor force. month before that, a quarter of a million. that speaks to something odd, right? 7.5 million jobs are open. so we have people leaving the
labor force. there is pocket in this country detached from all the freight economic news. >> it is. i'm not sure why the people are disappearing. we have 6 million people looking for work, 7.5 million jobs. more jobs open than people looking for them. hopefully that number will go down and participation rate will improve. i think as more and more months go on if we see them, those people will probably come back into the job market. one thing on health care, i think number is two million people have private health care who didn't before, because they're working and employers are providing health care. that is one place where the booming trump economy is making health care situation better. charles: tom, obviously the republicans lost seats in the house, not as many as first term under obama. i think even clinton but 2020, you know, the economic, the economy being the main topic at hand, what, the trump, the voters for trump, we just got a report from brookings institute, the growth in red states and red
counties, job growth is surpassed, has surpassed urban areas, blue states, blue counties by a mile. it is first time that happened in seven years. feels like at very least he has solidified that voting base? >> he has and i think one of the evolving narratives here that will be more in president trump's favor is the ability to point to or to suggest why some of the growth is happening at marginal gain rate in terms of red states. if we look at areas like texas and florida, it could be a good narrative, deregulation, lower taxes, more incentives for investment, lower cost of living. i think one further thing that will help president trump, if we talk about for example, the difference between the u.s. economy and french economy, look at divergence in terms of youth unemployment rates. look at comparison between what french governments provide and what democratic candidates are suggesting in terms of greater government role in the economy.
trump can make that case i think. charles: macron now is trying to push through a tax cut. deroy, leslie, tom, thank you very. appreciate it. >> thank you. >> thank you. charles: it doesn't look to be a repeat of yesterday. stocks are not rebounding. they're hanging on for dear life. we'll go through the markets more coming up. also next, a new study shows one of the socialist policies on the left is pushing, they're pushing on this election cycle, simply doesn't work. another case study in universal basic income. we'll be right back. at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster.
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♪ charles: united states and china rapidly approach friday's showdown, big business rushing in to tip the scales, towards china. everyone from the "wall street journal" to the chamber of commerce working hard to warn american consumers that they will pay for tariffs and american farmers are the only losers in trump's trade war. not only is this disingenuous, but it masks the fact big businesses don't want to take any hits in this long overdue battle. ironically interesting tariffs have not crushed economy. the a start of earnings season many issues cited as negative
impacts for results but tariffs are way down on the list. speaking of corporate financial results, it is clear no company has the ability to pass on 25% of hikes for any product. that means big businesses have to take near term hits. maybe pass on a buy program or live slightly with lower profit margins for a quarter or two. meanwhile headlines from the past year underscore the stakes and why we must all fight. how chinese spies got nsa's hacking tools. this was yesterday, used them against us. one in five corporations say china has stolen the ip within the last year. china twice attacked u.s. navy contractors and stole data on submarine warfare. of ex-coca-cola engineer charged with stealing secrets for a chinese firm? u.s. uncovers bonuses for stolen data. the list goes on and on. bottom line we must fight back, including big business. we must protect the farmers.
bain capital managing director, author of upside of inequality ed connor. thanks for joining me. no one likes tariffs. we're not talking about tariffs as economic policy but a tool to fight back. my grandfather used to have a rifle in the living room. it had dust on it. he used to it hunt for food. no one touched it when the crops failed he had to grab the rife fill to get food. >> we have to inflict more damage on them than they're inflicting on us if we want them to come back into line in the long run. we have to get the president room to negotiate. he needs to take steps in the short run. most of the market recognizes that. they now fear there will be probably by the end of the week terrorists potentially imposed. charles: right. and of course, after that, we'll see what happens. maybe that will create a sense of urgency on both sides. it seemed to have started to drift a little bit, intensity of
the negotiations, seemed like okay, meeting here, meeting there, congregation there. it felt like a rudderless ship to a degree. maybe that creates a sense of urgency? >> i think the chinese negotiating strategy is backtrack at the end of the negotiations. right at this point in time when you really do have to inflict penalties if you want to keep them at the negotiating table. not doing what they have done historically in every negotiation, backtrack at the end if you let them. charles: i want to talk about another issue fired me up and gain traction in the 2020 democratic primary, universal basic income. you give everyone regular, unconditional cash payments and it doesn't work. this particular study found no evidence of lasting improvements in well being or equality, yet it keeps getting tossed out there. we have presidential candidates saying yeah, universal basic income.
>> it would have devastating effects on the u.s. economy and u.s. society. you're basically paying people not to work. you're paying about as much as we pay for social security and medicare, for example. how many people on social security and medicare work? none. if you look at obama care, for example, the congressional budget office did that analysis. it said would reduce full-time employment by two million workers. instead giving people $12,000 a year not to work? 24,000 for a couple without children? i think you're heading into a place where you do permanent damage to the country. you never recover or takes a long time to recover from that damage. charles: the program is presented as caring, as democrats caring and republicans not caring. but do we really care and respect people, if we tell them we'll pay you never, never to take the gifts, that you have been given, everyone of us i think have been given god-given gifts, find away to explore and grow them? we're essentially saying to these folks, we don't think you
have got what it takes but we'll pay to you sit on the sidelines? >> we're trying to help people with single mothers with children. they need help, difficult to work and raise children at the same time. charles: that is different than what they're talking about, paying a whole swath of people cash not to do anything. they are saying it is cam passionate. i think it is exact opposite. >> the reason they want to describe it as compassionate, we take the single mother, she earnings more money we take her benefits away, so her real tax rate is very, very high. makes it difficult to climb out as a result. the logic, give everybody a base income. as they earn more. they can earn more and more. the problem it cost as fortune to give everybody a base income. in order to afford it, if you don't increase taxes exponentially, you end up taking away benefits. charles: some people they say they lose incentives to work. >> no doubt. >> thanks a lot. looking at markets right now, the dow off 600 points. as we get close to the new line drawn in the sand. i want to go back to
gerri willis on floor of the new york stock exchange. gerri, it has gotten worse since we spoke earlier in the show? >> sure has gotten worse. i'm talking to traders what is going on. why do we keep going down? a lot of this move is on light volume. buyers are on strike. they're not around. as it drifts lower no one can catch the falling knife. it continues to fall. volatility index is highest since january 23rd. dow and s&p on pace for their biggest drop since january 23rd of this year. interestingly here i think, charles, jpmorgan, bank of america, two big cap bank stocks down and down hard. bank of america down 2.1%. what is going on here? people are really worried about china, china, china and it is starting to affect all sectors, pardon me. no s&p sector in the positive here. you can see all the bank stocks right there, all down all the
s&p 500 sectors lower. tech got hit earlier today and hard. we saw the soxx index, semiconductor is, chip index it has been weak, anemic. we're seeing reversal of sent in. you will have to see on friday if we get a stable says out there. charles: gerri, thank you very much. david horowitz and kristina partsinevelos is here. >> david weighing in, monday you saw emotional selloff. a lot of traders on the floor i spoke to yesterday, just in general thought the president was bluffing as part of his negotiation tactic going forward. they're realizing china may not come to agree to all the stipulations in the deal. now there is hesitation. the reason i say this, because for too long the market has been
overly optimistic that a trade deal would be 100%. this was seen with a lot of stocks that have exposure to china out of the world index. maybe this is time for repricing or correction. charles: i surprises that people think that president trump is bluffing? >> didn't the markets tell you yesterday, that this is negotiation tactic. charles: not necessarily. all the news was good news. this is the first bad news in months. all the headlines, things are going well and swimmingly. i said it on the show, first and foremost i think the administration should never let anyone talk about this directly involved. we had too many talking heads weighing in all the time. i love larry kudlow, trade deal is going well. you're not even in the negotiations, right? if it wasn't or mnuchin >> the body language pointed to a deal. all of a sudden we are coming to the reality that we are literally at war with an
adversary in every sense of the word. i expect that to continue. we are going to hear the talking heads talk about it. you were talking to a really important point before about ceos not doing their part. i think the rank and file get it but when you have $60 million on the line on an earnings number, you are willing to accept the status quo. that's unfortunately what a lot of businesses have already done. charles: steve bannon put this piece out today. one of the things he pointed out i thought was pretty interesting is the leaders of china who are making so much money off of the status quo, it kind of reminds me of venezuela where you have maduro and the generals making a bunch of money and this is what happens in all of these sort of regimes, if you will, and forget about the saving face part. they might lose cash if you make that more of a true free market economy. >> charles, it always comes down to money, no matter where you're at. of course, we have seen it in russia, we have seen it now in venezuela. of course, they don't want to give up the billions of dollars that they rake in from these
lousy deals. it's the same as the lobbyists here that want to make these bad deals because they want the money. they're not concerned about what happens here. they want to get the cash that they grab. i think that's the same as the chinese. they want to get those billions of dollars rolling in so they can be the richest in the world. charles: one thing, i try not -- listen, for 30 years people have paid me to help them navigate the markets. i can't lose people money, particularly when there's panic. i'm looking at all the red like you said, everything is -- >> broad-based. charles: mind-boggling numbers. tech up 26%, consumer services up 20%, consumer discretionary up 21%, financials up 17%. industrials up 21%. there's room to give some of this back without panicking is what i'm suggesting. >> yeah. we have been talking about high valuations for some time. some people say there's a spot for correction but i'm wondering is the president really good at chess because could this be a move to push the fed to cut
rates? charles: quadruple level -- >> i'm trying to think of a different angle. he pushes the fed, the fed cuts the rates, the economy continues growing, boom, he soars at the polls. >> we will give up 1,000 points so we can get a rate cut? >> i'm trying to think of creative ideas. charles: let's talk about yesterday, there was a big buy on the dip move. did you buy anything yesterday? >> i came in fully invested. usually what i do with something like that, i'm kind of moving money around. today, at the close, i will be doing something at the close. charles: you will buy something at the close? >> i will buy but also sell something at the close. charles: you have to sell something to get the money to buy something. >> right. >> you're just covering? charles: he's changing positions. >> i'm changing positions. it's an opportunity to upgrade the portfolio, stock you have been wanting to get, you prune out some of the bad. charles: we have this, i came into the week 20% in cash with my subscribers and i'm licking my chops. i know earnings season, i know what companies are taking market
share. i know what companies are expanding margins. i know which companies are killing it. if they all have to go down, in a way it's kind of weird to say, but it's not a bad thing if you're looking for something to buy. i know that you are going to be saving these rallies, right? >> you have to remember, as a trader, i'm a seller at these rallies. as an investor, i'm not getting out. i own in my i.r.a. all my retirement money is long the market. i'm long 100%. as a trader i bought yesterday in that dip and today i'm selling. at the end of the day, investors should be very calm. if they are in good companies, why bother trying to rotate or get out? use that extra cash when you have it and go ahead and buy back in the market on pullbacks. i have no problem with it. i still think investors should stand pat. charles: the fed came out with their second stability report. it warned on risk assets and also warned on corporate debt. we didn't get a chance to go through that, maybe tomorrow, because right now the dow is off
555 points. about five minutes ago we were down 600 points. i will give you the credit for that 50 point reversal. guys, thank you all very much. really appreciate it on this very important day. lauren simonetti in for liz claman. lu have a crazy last hour of trading for sure. lauren: this is the hour of the day. breaking news. as you have noticed, stocks are on sale. deep discount at this hour as china trade worries hit the markets for a second straight day. but this is different than yesterday. it doesn't feel like, it doesn't look like a late day rebound is in store for investors. the dow is off session lows. having said that, the low is down 607 points. right now it's down 552. the s&p 500 is down 2%. the nasdaq is down 2.3%. we are watching trade-sensitive stocks and sectors like technology with exposure to china leading the selloff as