tv Mornings With Maria Bartiromo FOX Business May 29, 2019 6:00am-9:00am EDT
it's all about capacity and intent. that is what do they have the ability to do and what do they seek to do? we're concerned on both fronts. maria: we'll have more with secretary pompeo this morning, including china's consideration of curbing rare earth exports into the united states. trade fears hit markets yesterday. there's a selloff at the start of trading, down in the triple digits, after finishing yesterday at session lows. huawei is taking the fight all the way to court. the chinese technology giant challenging the constitutionality of the united states limiting sales of its equipment in the country. the severe weather continues this morning, devastating tornadoes touching down in kansas. flooding and thunderstorms hitting the midwest and northeast. teenage phone use, now a new survey finds phone use doesn't
end at bedtime. plus, a look at the latest pokemon app. "mornings with maria" begins right now. ♪ turn it up, it's your favorite song. ♪ turn it up, keep it on repeat. ♪ we're all chained to the rhythm, to the rhythm, to the rhythm. ♪ turn it up. maria: markets are selling off this morning. take a look at futures, indicating a decline of 170 points on the dow jones industrial average this morning, the nasdaq futures lower by 64 points, almost 1% on top of the selloff yesterday, ending at the lows of the day at 4:00 yesterday, fueled by fears of a trade deal between the united states and china hitting a stalemate at this point. this is going to be a long march
as the president of china said recently. reuters is reporting china is ready to use rare earth exports as a bargaining chip in the ongoing dispute. they are threatening not to export these any longer to the united states. these are needed for certain chemicals. it comes as china's latest round of tariffs on $60 billion worth of u.s. goods is set to go into effect this saturday, june 1. the treasury department also declined to label china a currency manipulator. the trump administration says it will keep them on a list of countries whose trade surpluses are closely tracked. china technology company huawei now is looking for a quick overturn of the new law that restricts the company from doing business in the u.s. i sat down for an interview with the secretary of state, mike pompeo, yesterday. we covered it all and more. watch. what are the implications of no trade deal with china? do the two largest economies have to have a partnership? >> you know, we may or may not
get a deal. i couldn't tell you the answer to that. much will turn on whether china is prepared to do what president trump asked them to do it's pretty simple. fair, reciprocal, a set of trading rules that apply to both countries. president trump is perfectly prepared to allow american companies to compete against chinese companies. he's not prepared to allow them to continue to steal our intellectual property, force american businesses to transfer their technology. he's not prepared to allow them to put tariffs on american goods when there aren't any tariffs on their goods coming into our country. i hope there's a deal. i hope there's an arrange plant that will work to the benefit of each our our countries. if there's not, i'm convinced the american economy will continue to grow. maria: should we be worried about them lashing out at the united states? we know that china is considering u.s. rare earth export curbs, the rare earth that are 17 chemical elements used in high tech consumer equipment, there was a story recently the chinese have taken all their panda bears.
this is sort of opening up into consumerism and where people can understand what this means, that china may stop the exporting of important chemicals that the u.s. needs. >> when i hear these concerns, these worries, i'm always reminded that the american people have lost and suffered for decades under the current rules. so there's this idea that president trump's decision to push back against china caused problems for the american economy, when in fact the challenges have been the fact that the chinese were in a trade war with us a long time a ago. we're simply trying to get back to fair, to reasonable, to reciprocal, to transparent. maria: the fight with huawei is getting worse. the chairman of huawei over the weekend gave an interview, basically saying i'm not going to take the president's call if he calls me. we don't need the united states. there's real espionage that's going on, isn't there?
>> huawei is an instrument of the chinese government. they're deeply connected. it's something that's hard for americans to understand. companieses cooperate with the united states government, that is, they comply with laws but no president directs an american private company. that's very different in china. they operate under a different set of rules. maria: can you talk us through the massive risks that today in terms of china and the u.s.'s national security? >> when you think about risk, from a military perspective, it's all about capacity and intent. that is, what do they have the ability to do and what is it they seek to do. and we're concerned on both fronts. we've watched president xi make commitments that said he wouldn't go to the south china sea and build out militarily. yet he's done so. watched them engage in a significant arms build-up, in the quantity of arms, in their capability and their capacity. it's something we need to make
sure we do all we can to make sure we sunny a posture where he -- we stay in a posture where we can deter this threat so we don't have to send our people to a war. i can't imagine this happening against these super powers. it's our job to make sure we don't put america in that position. maria: more of my exclusive interview with mike pompeo, beginning at 7:00 a.m. eastern. tune in on friday when i sit down exclusively with the vice president, mike pence, talk more about china as well as usmca, canada and mexico. u.s. crude stockpiles climbing at the quickest pace since 2016, fueling fresh volatility in the oil market this morning. dagen mcdowell is on that this morning. dagen: good morning. rising inventories of crude oil, despite concerns about production coming out of venezuela. the tensions with iran, rising inventories have powered an 11% drop in crude oil prices since they hit a nearly six month high
in late april. u.s. stockpiles are up 8% in the first four and-a-half months of this year many you mentioned 2016, how stockpiles are climbing at the quickest pace since going back to that date. well, back then there was such a build in supplies of oil, the cost of crude dippedde dipped ba barrel. now it closed near $59 a barrel. we don't expect that kind of a price decline. this is good news for drivers. if you look at gasoline prices in the united states, $2.82 a gallon is the national average. that's lower than a year ago. it was close to $3. don't expect much more of a drop in gasoline prices. one of the problems is, there's a buildup in crude supplies because the pipelines are in the united states, getting the crude to the refineries, it's backed up. we don't have enough pipeline
supply. you will see a drop in crude, maybe not such a decline as we've seen in gasoline prices. maria: we'll watch that. dagen, thank you. kansas is declaring a tornado emergency this morning. cheryl casone with headlines on that right now. cheryl, good morning. cheryl: good morning. it's been quite a night there. a large tornado touched down near kansas city, kansas. it's injured at least a dozen people. president trump approved a disaster declaration in kansas following that tornado as well as major flooding throughout the state. dozens of homes east of lawrence, kansas, have been damaged. kansas city international airport temporarily closed due to debris from the storm and passengers had to be moved to shelters from there. well, a network outage causing flight cancellations and delays at air canada. the airline says systems are starting to come back online following these problems, which began last night. air canada planning to add more flights to handle the backlog of
passengers that are stranded. boeing 737 max could remain grounded for another two months, maybe longer. the airline industry's largest trade group, the international air transport association, says airlines are bracing for 10 to 12 more weeks of delays before the plane can resume commercial service. boeing's been working to fix the flight control flaw that was implicated in two deadly crashes but they haven't submitted a formal submission to the faa and the process for approval through the faa considering what transpired between boeing and the faa is going to be where the delay could real kic really kic. maria: markets are selling off this morning, investors are watching potential recession risks as bonds dip lower, yields continue to fall. fiat chrysler's proposal to merge with renault presented to nissan. what that means for the japanese automaker coming up. markets are down in the trip l he'ltripledigits.
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maria: welcome back. big show this morning, coming up my interview with secretary of state mike pompeo as we take a look at the national security issues around the china story. anheuser-busch north america ceo is here, talking about the impact on business. great america pac chairman joins us this morning, along with judge andrew napolitano. also with us is dr. mi dr. mike. a possible auto merger, fiat chrysler's proposal to merge with renault was presented to nissan today in japan. the possible tie-up stoking fears that nissan, they could weaken their position in their
alliance with renault. former chrysler ceo bob nardelli is here in the studio, along with tom bevin. dagen, great to see you this morning. and thank you for joining us, everybody. i ant to get your take on the multiyear low for bond yields. bob, your reaction in terms of the potential deal with fiat and now renault. >> it's interesting, you know, the fiat tie-up with chrysler has really been somewhat of a disaster for all the things that they projected would happen are not. the small cars never did sell here. chrysler had to buy emissions credits from tesla a few months ago to be able to sell fiat into the european market. so tying up with renault, the one advantage would be i saw where the government's going to back down and take away voting rights. that's always an issue in france from my experience. they're going to have to create
a manufacturing counsel as carlos did with nissan and renault where you can bundle the procurement side to get the volume leverage. i'm a little jaundice on the thing. you're going to have to deal with dealers, how do you get the renault back into the u.s. dealership market. so i think -- the other thing i was disappointed to read where maybe mike manly would be pushed out of the ceo position. he's a great young man, doing a great job. if you think about chrysler jeep and the dodge ram, it's 80% of the operating profits today. so i'm not sure a tie-up with renault is that good a deal. maria: the dodge ram is really the jewel of the business. >> the jeep is number one suv around the world. i mean, it's an ey iconic brand. people love it. they're proud of it. between that and the ram 1 a 5 m 1500, that's generating most of the profits. i'm not sure if chrysler didn't bail fiat out, where they would
be today. maria: what does it mean for nissan? nissan is part of the alliance with renault and with mitsubishi and nissan was already facing serious upset and weakening positions. according to carlos ghosn, who told me after he was released from prison that the reason that they took him out in this coup to take him out was because they were afraid he was going to cut jobs, cut his underling and that's why they were upset about carlos ghosn being in charge, is because nissan was so weak is what carlos ghosn said. >> i think nissan is slightly better positioned than renault in that they have dealerships here, they have a good brand, a good quality brand established. i think the consolidation certainly would help legitimately on the technology side that we talk about as we go to e.v. and some of the other advanced technologies, the autonomous car. so any time you can bundle the research -- right now, everybody is doing their own. you pull that together, you get favorable leverage. you get productivity.
but operationally, pulling a all that together -- don't forget, we didn't mention mitsubishi also. it really becomes -- they're talking about being the third largest car manufacturer, production-wise. but i think you ought to focus on productivity and profitability. maria: yeah. i would say so. boy the way, there's -- by the way, there's also cuts to report at general electric, g.e. cutting jobs, announcing a plan to cut 1,000 jobs in france. the french finance minister said he will fight the move. the stock is down almost 1% this morning. >> the proof positive comment about tying one the french. they cut a deal where their guaranteed jobs. there was a penalty for not creating jobs, a penalty for eliminating job. i don't think larry has an option here. eggs got to continue to re-size general electric towards profitability. he announced at the last
conference he's about $100 billion of debt. he still has an unfunded pension, close to $30 billion. so he's got to continue to shrink, to be able to generate cash, to be able to keep the company alive. they're burning about $2 billion just on the power system side. maria: it's an environment where the global story seems to be slowing down, at least that's what yields might be telling us this morning, dagen. once again, we see record lows for bond yields across the world. no, sir just the u.s. dagen: let's look at germany, just yesterday the 10 year german bond fell into further negative territory on the yield. we have to think about it in terms of this. you have to pay germany to loan it money. you don't get paid for loaning germany money. that's how crazy the world is. lowest closing level on the german bond yield since ju julyf 2016, that weakening further this morning. u.s. treasury yields on the 10 year closing yesterday at 2.268. again, a further drop in those
yields overnight to 2.24%. that's significant. we'll see where it trades during the day as trading opens up here. but again, that takes the 10 year yield below where the fed funds rate is, between two and a quarter and two and-a-half percent many it's already trading below the three month yield here in the united states. that was further weakening yesterday. the three month treasury bill. but again, this is sending the signal, it's the trade war with china but it's also some weak economic data a that we've gotten in the last few weeks in the united states whether it was retail sales, factory output, the durable goods orders for nondefense capital equipment were down almost 1%, nine-tenths of a percent last week. across the board, people are, -- again, it's what was going on at the end of the year last year. people are questioning whether the incredible economic run we've had might be coming to an
end. maria: we had the gdp in the first quarter up 3.2%. we'll get another revision this thursday when twee get the gdp number bette -- when we get thep number out. we will get the window into whether or not things have slowed from the three and a quarter percent growth. dagen: in the first quarter, if you looked at the earnings reports, the capital spending that we found out from major u.s. corporations only grew at 3%. it was still growing. that was off a 20% growth rate a year ago. there's a lot that's piling up that's causing concern and it's showing up in the bond yields. >> i think you're starting to see a separation, consumer confidence was still strong but dagen is correct, i think my colleagues are starting to get a little bit concerned and a pullback on capital. >> i mean, it definitely seems like some of the data we've seen, the headwinds are building. i look at the stuff through the lens of politics, in the middle of a presidential campaign, that is not necessarily good news for donald trump. dagen: expect president trump to call on the federal reserve
to cut interest rates. the bond market is telling the fed it might be time to cut. maria: that's why larry kudlow has been saying it for a couple months now, he wants a cut in rates. john bolton is calling out tehran this morning, what he's saying today. then, saving very early for college, babies born today in vermont getting a boost, the story when we come back. stay with us. my body is truly powerful. i have the power to lower my blood sugar and a1c. because i can still make my own insulin. and trulicity activates my body to release it like it's supposed to. trulicity is for people with type 2 diabetes. it's not insulin. i take it once a week. it starts acting in my body from the first dose. trulicity isn't for people with type 1 diabetes or diabetic ketoacidosis. don't take trulicity if you're allergic to it, you or your family have medullary thyroid cancer, or have multiple endocrine neoplasia syndrome type 2.
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maria: welcome back. markets are lower this morning. take a look at the futures, indicating a decline at the start of trading of 158 points on the dow jones industrial average, two-thirds of 1%. s&p futures down 17 and nasdaq futures lower by 61. worries about the u.s. and china and the stalemate right now, the next meeting that could happen is at the g-20 between the
president and president xi-jinping. we've got mike pompeo coming up, talking more about that. headlines across america this morning, the boston globe reports wynn resorts will not appeal gaming commission's $35 million fine, wynn resorts said it won't fight the massachusetts gaming commission decision to fine the gambling giant, while it disagrees with the finding. the l.a. times writes lakers story gets crazier, with new details on hard to sell to free agents, gaping cracks to the lakers foundation prompting questions about the organization's credibility and changing the conversation about who wants to play for the franchise. internal problems apparently expected to haunt the team during the upcoming free agent season. the reformer says battle boro memorial hospital will participate in 529 days, some lucky babies born today at the hospital will receive $100 deposits into vermont 529
college savings accounts to jump start the path to higher education. good idea. who wouldn't want the money into the 529 account when you're born. dagen: start saving young. >> how muchs is college going to cost when they turn 18? maria: good point. when we come back, treasury yields are declining this morning, investors are watching bonds as recession fears are creeping in. the yield on the 1 of year down to -- 10 year down to 2.23% this morning. the pac impact coming up. netflix is offering enough content to keep you on the couch for years. wait until you hear about their content. stock is down this morning going into the day. back in a minute. ♪ we're burning down the highway skyline. ♪ on the back of a hurricane. ♪ that started turning when you were young. ♪
thanks so much for joining us. i'm maria bartiromo. it is wednesday, may 29th. your top stories right now. u.s.-china trade turmoil impacting markets. china is now threatening to cut off rare earth minerals going into the united states. i sat down yesterday an interview with mike pompeo to talk about a possible trade deal. >> i hope there's a deal. i hope there's an arrangement that will work to the benefit of each of our two countries. if there's not, i'm convinced the american economy will continue to grow. maria: he said that huawei is an instrument of the chinese government as the technology giant files new legal action to block the u.s. ban. don't miss my full interview coming up in the next hour, right here. trade fears are hitting futures. we've got a market expected to open down in the triple digits dow futures down two-thirds of 1%, s&p futures down 16, nasdaq lower by almost 1%.
we had a pretty good rally early in the day yesterday. the markets gave up all of the early gains and ended the day lower by 237 points. that was 1%. s&p was down 24 points, and the nasdaq was down 30 points, that's a third of a percent. in europe this morning, similar story. take a look. fq100 is down 1 and a quarter percent, 94 points, the cac in paris is down 8 84. dax index is lower by 138 points, better than 1%. in asia overnight, take a look at the markets, japan was down one and a quarter percent, as was korea, as you can see. those two hit the hardest on the heels of the selloff on wall street. the iran scries si crisis now, s claiming iran was behind the recent attacks on the oil tankers, as facebook and twitter remove accounts associated with iran misinformation. jack keane said, yes, ran was behind that upset. twitter in chief, the social media giant is looking for
somebody to be the face of its platform. the stock is down this morning by three-quarters of a percent. teenage phone use, a startling new survey during the middle of the night, plus pokemon is turning sleep into a game. we have all those stories coming up. markets are in focus, government bond yields dipping near multiyear lowings yesterday due in part to growing concerns about slowing economic growth. bonds from the u.s., all the way to germany, are dropping like a rock. joining us right now -- the 10 year is at 2.24%. joining us now is senior portfolio manager, kevin divney. thank you for joining us. are you worried about the drop in yields? what's your take on the interest rate movements. >> the interest rates are reflecting global deceleration, a flight to quality a and a lot of capital is moving out of the european markets and there's fear in asia. the u.s. is looking pretty strong. i think there's technical measures where bond yields don't reflect everything they used to
because of flows and money going into there. there's a bit of a rotation trade, people taking money out of equities. we don't see inflationary pressures on the other side of the coin and the market's pricing in a 50/50 remarks the d is going to do this year. maria: you said the u.s. is hanging on and doing well. dagen reported about some of the day a take points that have come in weaker than expected. it was cap ex that was troublesome, 3% from 20%. dagen: factory output has been in decline this year, has been weak. it's capital spending, it is also retail sales, some of the retail earnings last week were not good and people like to attribute that to the -- overall retail sales were weak in the most recent month as well. consumer dens-- consumer confide liest level since october. money flow intuss into treasury because usually people are
looking for a haven from turmoil. it's the reason behind the flows that's concerning. >> when you look at the macroeconomic data, when you deconstruct it, it's because of exposure to europe and china. the stocks are behaving that way as well. stocks with u.s. exposure primarily, service companies without as much chinese exposure are doing well. the deceleration in some of the macro kay data, i don't think ia trend yet. the manufacturing data in europe is worse than what's going on here. consumer confidence is still very high. in the retail sector, it's a little tough. there's a lot of creative destruction going on. at the same time, we've had great retail run fundamentally for the past six or eight months. i don't hear ceos being concerned about their consumer. you see average tickets going up and you still see spend. there's also -- there's cap ex in that area and there's a reformulation of the business model. omni channel marketing and things like that when you go from stores to internet there's the cap ex piece that's going on there. cap ex and depreciation is at a
low. i don't think it's cause for concern that business is slowing. it's adjusting to not as rapid growth after the tax cuts. maria: you want to put new money to work in stocks right here? >> we're looking at the rotating. we took some money off the p the table, places like tech. we're not getting too defensive. it's trying to be down the middle. you have barbell macroeconomic things. the chinese thing is out there. we think it's three phases. the short-term is volatility. this administration does everything out in the open. there's not a collective meeting and an anti-climax with a press conference. this is every moment, every degree of negotiation is out there and the market is pricing that in. phase two, if it comes down to negative outcome, it's supply chain adjustment. ceos say they'll adjust their supply chain, they can do that. china was already not becoming the best source of cheap labor. the third phase, the long-term phase, where we think is an
opportunity if you hold pat, is that if the negotiations go where this ad medicine strayings wants, the chinese -- administration wants, the chinese market is a larger addressable market. in tech, healthcare n. could be a market leader. >> the clip that maria played at the top of the segment, mike pompeo says he believes the u.s. economy will continue to grow even if there's no deal with china. do you agree with that. >> yes, i think we can. i think there will be an adjustment. there's a disruption. companies will adapt. ceos say they will change their supply chain. listening at investor conferences, people have asked me, the tariffs and the trade is about 5% of the conversation. it's more about how are we going to spend, how are we going to grow, where are our customers. >> the tariffs on the imports are not as significant as the media makes them. i think it's the certainty of
uncertainty that's creating the trough out there. wouldn't you agree? the consumer confidence is up. i do think the ceos are a little more watchful, a little more of a jaundice eye. they don't want to over-capacitize with heavy cap ex. the survey said they're not as concerned of major recession but they are more corve more cautio. >> one concern is finding good people. that stays at the top of surveys. transportation is the biggest exporter to china, agriculture and tech. the market is pricing this all across. it's 3% of gdp is the trade with china. imports and exports. and then you have localized sectors. it tends to spread across the whole market. what you were saying is also why guidance was so depressed going into last quarter. you know having sat in the chair, you don't want to disappoint. you want to exceed expectations.
i think the revisions going down with ultra conservative. as a ceo, you have unknown things at either end. why not be a little conservative. i would expect earnings will beat expectations more going into the rest of the year. we saw companies that were beating were getting rewarded more after q1 earnings. >> it was quite a mix. if you over-commit and under-deliver you get whacked. if you pull back and a little more conservative, you get whacked. i think it's a horse apiece. on the last earnings call, we saw some companies pull back on the retail side to be a little more cautious. >> the top line is still looking robust. that's not decelerated as earnings did. the big story, the most important story, we still are looking at double digit margins. there was not guidance down on that for the s&p 500. they're double what they were 15 years ago. we're at the secular trend for margins. part of that is economic mix, part is tech. that would be the warning sign if there's big guidance.
the other stuff is adjusting and competitive pressure. maria: even as labor costs are going up? >> the three things we're looking at is, i heard this from ceos talking about this in the consumer staple sector. you see wages and input prices going up. looking at productivity, there's signs that productivity is going up. if you're paying more, getting more out of it, that's a good equation. a lot of companies are talking about pricing power in basic commoditized sectors, they're not as promotional. this feels like a mid-cycle area when it comes to that. if you have pricing power, that can offset some of this wage pressure. maria: they better because they're probably going to have to pay more because of the tarifftariffs. >> most of the ceos said they could handle a 10% through price increase, through negotiations with the supplier, and productivity. but i think you get to 20, 25%, they get a little more nervous. it's not as easy as it's been
said that you just move your supply chain. particularly in the high tech stuff. dagen: i've been saying that. when people come on tv with all due respect and say companies will just move their supply chain i'm like maybe if this goes on for another five years. >.maria: it's not so easy to go from china -- dagen: there's expertise in china, a manufacturing expertise in a lot of these areas that they can't find in india or vietnam or other southeast asian nations. >> let's understand how we got there. right? we were not competitive as a nation when you think about taxes and everything else. so we had to move offshore. it wasn't an outsourcing. it was a global competitive strategy. >> the supply chain, when the panic comes on and volatility goes to 25 and we're down 400 points, there is an adaptive mechanism. it is long-term. that's why we're looking at supply chain as a medium term, two to five year. when a company commits to that,
they're moving to that. and then it becomes a permanent capital base as we've had with china. there are options. dagen: i talked to a lot of small business owners who are getting their businesss in the united states off the ground and they make their products or source a lot of their supplies from china, and they are getting -- right now and they're very upset about it. maria: we've got both sides digging in. kevin, we will watch this market. you're still a believer in the u.s. >> yes, i am. >> stay strong, kevin. maria: thank you so much. we want to turn to the escalating iran crisis. the national security advisor accusing iran of sabotaging saudi oil tankers. cheryl casone has the details this morning. cheryl: that's right. national security advisor john bolton is claiming that the recent sabotage off the coast of the united arab emirates came from naval mines that are placed, quote, almost certainly by iran.
bolton made the charge in buddhu dhabi. facebook and twitter are saying they removed iran linked accounts a that were spreading misinformation, pro-iranian information, basically, throughout the united states. and let's stay with twitter. there's a job open. you might be interested. tweeter in chief, according to the job posting the person would be in charge of promoting the social network on its own platform. this requires setting editorial direction for the site and leading the community managers. they say they're flexible about where the tweeter in chief wants to be located. anyway. and then there's one more, this is a good story. couch potatoes that have netflix get real comfortable right now. it could take you nearly four years, nonstop, to binge watch all of the content that netflix has on its site.
netflix has 32,600 hours of movies and television shows. the closest competitor in second is amazon prime video. that's clocking in more than 22,000 hours. should i retire now and never leave my apartment? maybe i should. maria: when i hear that story, i think peak. that's it. does it get any better than this in terms of content? dagen: ask yourself about disney and hulu. there's a bunch more coming. maria: there's so much content out there. i'm wondering if we could all actually watch all of this content. that's why i'm saying peak. dagen: you don't want to because it's garbage. maria: a lot of it is. dagen: most of the stuff on netflix is garbage. maria: really? dagen: yes. maria: you've been able to pick out the jewels. dagen: yes. ozark, narcos, those are two great shows. a lot of it is just ghastly. >> dagen is sophisticated. dagen: no, i'm as down-home as
it gets. nobody has time for garbage content anymore. and netflix has an abundance of it. >> the competition is great, to your point. amazon is coming. maria: disney's coming. >> they're buying their content back from netflix. marvel, all of the shows. maria: it's about to get real competitive for netflix. are they going to be able to keep raising prices. dagen: better get the interface too. the interface on hulu is horrible. it's about how easy can you use it. let me find what i'm looking for. maria: investigating the investigators, carter page detailing content with an fbi informant, saying it was more extensive than previously reported. plus, a troubling trend, a startling new study on teens checking their phones in the middle of the night just like their parents. the eye-opening numbers, we are ad indicted to these -- addicted
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the investigation. i asked him about the declass finingdeclassification of the fa warrant. they want the president to declassify this so we can know what was in the ph fisa warrant. how did they get a warrant to wire tap you? >> look, i think i talked to george papadopoulos maybe a couple of times. i can't even remember. we had a big team of foreign policy experts. we were working with. to the extent under the many pages they have stuff related to these crazy things that they were pulling with him and others, if all these black lines relate to that stuff, it is just the ultimate scandal. i had basically no interaction with him. maria: meanwhile, him being former british spy christopher steele. he reportedly will not talk to the prosecutor assigned to examine the origins of the russia investigation, that's
john durham. christopher steele said he's not going to talk to him. joining us right now is editor siraj hashmi. why won't christopher steele talk to john durham, do you think? he he's going to get to the bottom of why they got warrants to wiretap carter page and george papadopoulos. george papadopoulos told us about informants that were thrown at him, fbi informants from australia, london, the u.k., as well as the u.s. >> the answer seems pretty simple here. christopher steele probably would fall into, say, a perjury trap or obstruction of justice trap if he speaks to the doj. because a lot of information within the steele dossier was uncorroborated and fabricated an there's a lot of information that he probably will say that will probably put him in legal jeopardy. maria: do you think we'll see accountability here? >> that's a very good question,
maria. because there's been a lot of heavy lifting from former obama administration officials, a lot of house and senate democrats, to push this narrative that the trump campaign colluded with the crush sahn governmen -- russian. we're seeing investigations from the house judiciary committee, the house intelligence committee, looking at where the trump campaign stood on all of this. at the same time, the doj looking into how the trump campaign collusion with russia started, it's all about where -- it's two different americas we're living in right now. maria: how far up the chain do you think this goes? do you think president obama directed all of this. >> it's tough to say. it's possible there was deniability here. democrats seem to want to get down to t the bottom of it but they're not telling the whole story. maria: thank you so much. coming up, go to sleep, teens. back in a minute. ♪ limu emu & doug
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maria: welcome back. so we no that teens can't put their phones down but many adults cannot either. a new survey finds smartphone use extends far past bed bedtim. lauren: do as i say, not as i do is the message from parents to teenagers. we found that people who with their pounds, 29% of teenagers, parents, not so bad, only 12%. for those that wake up in they middle of the night to check their devices, a quarter of parents, over a third of teenagers, this is a major problems when you have buzz words like digital well-being, is enough being done if we're interrupting the healthy sleeping habit by waking up when you should be resting, to check
your phone, particularly if it's for social media. some researchers are making a link between sleep depre deprevn as a cause of depression for teenagers. it could be causing depression. maria: that's why they say you shouldn't sleep with your phone next to you. lauren: can you believe that many people are doing it. maria: put it in another room. laurenroom.dagen: i wake up ine of the night and look at my phone. maria: you do. dagen: to check the time. i'm worried about over-sleeping because of the 2:00 a.m. wake-up call. it's the anxiety. lauren: do as i say, not as i do. >> i think most people -- i certainly do this, this is my alarm clock too. maria: that's another thing, it's the alarm clock. >> it's one thing to use it as an alarm. it's another thing where you
check it throughout the night. i have a wife that does that. lauren: do you see the light. >> yes, yes. maria: of course. lauren: pokemon go is coming up with pokemon sleep and you sleep with the device on your pillow. maria: my exclusive interview with mike pompeo, secretary of state, coming up right here next hour, "mornings with maria." stay with us. ..
jillian: good morning, thanks for joining us, it is wednesday, may 29th. your top stories at 7:00 :00 am, us turmoil trading markets around the world, we are looking at a selloff on trade fears. china threatening to cut off rare-earth minerals, huawei filed legal action to block the us ban. i said down for an interview with the secretary of state, mike pompeo and asked about the threat posed by the chinese
technology giant huawei. >> huawei is an instrument of the chinese government. they are deeply connected. hard for americans to understand. companies cooperate with the united states government but as they comply with our laws, no president directs an american private company. that is very different in china. they operate under a different set of rules. jillian: what does that mean? don't miss my interview coming up in moments. the morning is not good for markets, look at futures indicating a selloff, dow futures down 130 points, s&p futures down 13 and aspect futures down 50 points. the market had been up early in the day but reversed course entirely finishing down 238 points. the nasdaq down 29 points.
arrows down across the board, the s&p down 6 points, 11/3%, and the dax index lower by 130 points. japan and korea took the hardest hit done it following the selloff on wall street. joining me is dagan mcdowell, and bob nardelli and cofounder and president tom bevan. we have a story escalating, tensions between the us and china, holding firm in trade negotiations with military risks as important as the economic ones. mike pompeo laid it out on what is at stake in an exclusive interview yesterday. >> we talked about economic issues between china and the us. i want to focus on the military and the risks that have to do
with national security. can you talk us through the massive risks that exist today in terms of china and the us's national security? >> think about risk, it is about capacity and intent, the ability to do and what is it they seek to do. we are concerned on both fronts. he would not go to the south china sea and bill that militarily and he has done so. we watched them engage in significant arms buildup not only in the quantity of arms, but their capability and capacity on both fronts, to make sure we stay in a posture to deter this thread so we don't have to send soldiers, sailors and marines to a war. can't imagine it happening again. it is our job to make sure we never put america in that position.
maria: there is speculation the chinese of not only stolen intellectual property from our companies costing them tens of billions of dollars every year but the permit of defense, speculation that there is for example a buildup in stealth technology which they stole from the united states. submarine secrets they have stolen. can you characterize that? >> can't say a lot other than a case that we worry about every day. the threat of commercial intellectual property and military, we are doing our best. we look at these systems and see similarities that suggest that they may not have created some scratch. >> the japanese had to alert and scramble their own fighters, 628 days last year. that would be twice a day to react to coalition in the
waters. give us your sense of this gray zone operation. intimidating and coalition, in the south china sea. >> the indo pacific strategy, many components, there is a commercial component, a diplomatic component and a military component. to make sure we guarantee for america that these ceilings remain open. your point about chinese sailing in places they haven't before, chinese aircraft flying with more frequent we pushing boundaries up against places where they would normally fisa very real risk and something that the permit of defense has pushed back against, increase frequency of activities in those places to ensure that us commercial traffic can continue
to have access to those feelings, important for our economy and america's economic growth. maria: this is operating below the level of conflict and gaining dominance in the region. do you believe the us has a comprehensive government strategy to fight this? >> yes i do. they need to execute it with great vigor. the great news is this isn't a partisan issue. i have spoken to nearly every member of the united states senate about these issues, democrats and republicans alike understand these concerns, express willingness to support america's efforts to push back against it and i am convinced we will be successful. maria: i was reading a piece called america begins to see the consequences of the past policy errors. >> this is a good point. we are late to the game. we watch this happening like when you put the frog in the pot and turn the heat on, you didn't see the temperature rising as quickly as we should
have. that is true for the whole world. the whole world is waking up to these concerns. we spend a lot of time making sure we have the right strategy and resourced it properly but also sharing with our allies in the region, singapore, vietnam, east asia and southeast asia, ensuring they understand these risks so we can be part of the alliance that pushes back against the chinese threat. maria: should we be breaking formally against past and ministrations in maintaining this neutrality when it comes to china? >> it is complicated. we have big commercial relationships, and it is the case. and fair reciprocal trade, and chinese technology. and behind where we should have
been, the team was recognizing these challenge and we are determined not it put in place all the resources needed to push back again. maria: admiral davidson in the indo pacific command commander and chairman dunford testified in front of the senate armed services committee that we would not win in a war against china? >> i would always -- i hope it never comes to that. i can't imagine that it will. maria: they have the largest military in the world. >> america is very capable. i don't want to spend a lot of time on this. i was a former soldier. i know the greatness of america's fighting men and women. there is no power in the world americans if required handle in a way that would protect america's interest throughout the world. maria: what are the applications of no trade deals china? do the largest economies have
to have a partnership? >> we may or may not get a deal. i couldn't tell you the answer. much will turn on whether china is prepared to deal with donald trump. it is pretty simple. fair, reciprocal, trading rules that apply to both countries, donald trump is prepared to allow american companies to compete against chinese companies but not prepared to allow them to continue to steal our intellectual property, force american businesses to transfer their technology, not prepared to allow them to put tariffs on american goods when there aren't tariffs on their goods coming into the country. i hope there is an arrangement that will work to the benefit of each of our country's but if there is not i'm very convinced the american economy will continue to grow. maria: should we worry about them lashing out at the united states? china is considering us rare export curves, 17 element used in high-tech consumer
equipment. there was a story the chinese have taken their panda bears. this is opening up into consumerism where people can understand what this means, the exporting of important chemicals the us needs. >> when i hear these concerns i'm always reminded the american people have lost and suffered for decades under the current rules. somehow this idea that donald trump's decision to push back against china caused problems for the american economy when the challenges have been the chinese trade war with a long time ago, we are trying to get back to fair and reasonable and transparent. that is the president's mission. i can't predict what the chinese will do, how they will make their decisions and put counter tariffs on one donald trump put his tariffs on.
china had an unfair trade relationship with the united states for a long time and donald trump's focus is to push back against it. maria: part two of my interview with the secretary of state, weighing in on huawei, intellectual property theft, right after this break. mark selling off this money, investors looking at potential rescission risks as bond yields go lower. technology stocks take a hard-hit. we will show you a list is futures indicate a decline of 140 at the start of trading. back in a moment right here. ♪ -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.
causing concern. part 2 of my concern my interview with mike pompeo. >> what do people need to understand about huawei? the site with huawei is getting worse? the chairman of huawei over the weekend gave an interview basically saying i am not going to take the president's call if he calls me, we don't need the united states. there is real espionage going on, isn't there? >> huawei is an instrument of the chinese government. something hard for americans to understand. companies cooperate with the united states government, they comply with our laws but no president directs an american private company. that is very different in china. they operate under a different set of rules, that's the most fundamental thing people need to try to get her head around. if it is the case the chinese communist party wanted to get information from technology in the position of huawei almost certainly the case that huawei
would provide the deep connectivity inside the way their political economy operates, it is different from the united states. that is the threat donald trump sees from huawei. maria: what about limiting the growth of 5g in the united states. the article says the administration aimed at stopping huawei limited the growth of 5g in the united states. >> i found the economy credibly robust and dynamic. when obstacles break up or business falls where someone steps in to fill those shoes, the dynamism and competitive nature of the united states economy. it might slow down for a while but i'm convinced american ingenuity, european and western democracies will move to fill whatever gap there is so these technologies will advance to
provide world-class services at affordable prices to american consumers. maria: what do we need to know about artificial intelligence? is the chinese ahead of us on ai? they are certainly using it to track your citizens but should we be worried if the chinese are ahead of us on ai? >> we should always think the technology leaders across the world, hallmark of american economy, we need to do everything we can to make sure our educational institutions, to build out systems so we are the world's leader in technology. china made progress and certainly places where they are ahead of us. the democratic system, almost always drive out state run institutions from the competitive landscape. i have no doubt they will do so here. maria: what are you hearing about the dismantling the
huawei infrastructure. have they changed their mind or still pushing back? >> they are becoming educated as well. it is not a critique. we were slow to see us. it is important to share information. there will be places they have better information than we do. we are to share the information about those risks. we are interdependent in terms of communications, western-based rules with privacy focused systems we engage in. that is what technology needs to look like in the next 10, 20, 30 years, they need western values embedded in the system. maria: is the president planning to do a similar tpp type arrangement that others in asia to combat china? there is speculation we should have stayed in tpp. >> you saw the president
talking about trade agreement. a multilateral agreement, or series -- the president will make that decision. >> anything i may have missed that is important to understand about the chinese threat? >> only this. there is enormous -- it is not economic and if you're sense but humanitarian concerns. they are into vertical to what you and i understand about how human beings are to be treated. we focused on these terrible situations and one of the provinces is broader and bigger than that. the absence of political freedom, something the american people need to watch and see because it has an impact on our economic relations as well.
maria: the chinese of rounded up muslims, do buttons, put them into these and they are guarded by machine guns. >> that is right. they are indoctrinating them with chinese thinking in ways the west wouldn't do. it is historic and important. maria: thank you. thanks to mike pompeo. tune in on friday for an exclusive interview with the vice president, mike pence and also us and ca, he has an important meeting with canada so we will talk about that. rising tensions with china taking a toll on corporate america. how the company is planning for the future. facebook under fire, mark zuckerberg could be held in contempt of canadian product after snubbing the country. we are back in a minute. ♪
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maria: futures indicate a selloff, dow futures done 160 points. nasdaq futures down 57. we are waiting on a couple earnings, dick's sporting goods and abercrombie and fitch report numbers shortly and we will show you how the stocks are impacted as well but it is us china trade impacting everything. mike pompeo telling me the us may or may not get a deal done
with china. pessimism is said to be growing among economists and corporate america. joining me is paul him. thank you for joining us. what has been a reaction in terms of corporate america due to uncertainty about china? >> there hasn't been much reaction at all. this is very temporary. they are moving forward with their plans. it is a very resilient markets, listening to those skills. maria: some people think the markets are underestimating the threat. the markets, we have seen a pretty good selloff and you mentioned apple is down 11%. we have seen specific situations, the markets are expecting something to get done and this is all noise and negotiating. >> exactly right. most people see this as temporary and something will
happen and people realize china and the us have to be stable and predictable trading partners and they believe those largest economies in the world will bark that out. >> we saw divestitures at an all-time high. your surveys suggest that will continue this year, next year and beyond. a couple things. is that the result of activists going after these companies to divest, get cash? i would love to see it go into technology and r&d versus stock buyback and/or private equity has so much money, the multiples are so high, corporations say now is the time to the best, getting 20, 12, 14% multiples. >> a great points and all through. we have companies we know from our survey, two thirds review the portfolio and that a significant. portfolio reviews no longer an event but strategic allocation of capital within an
organization. and activists are out there, certainly driving certain activity. that is not expected to go away. we know private equities, a record of power. over $800 billion. they have the capital to put to work and we know from our survey as well companies turnaround over 60% of them turn around and invest your point in technology when they have proceeds from investment. dagen: in the most basic layman's terms are ceos under pressure to look like they are doing something? if they can't grow the business organically, i can think of some companies with new ceos who go in and start making moves, divestitures being one, just to look like they know what they are doing when they don't? >> there is always some of that and that is case-by-case, you have to look at each specific organization and what someone might be looking to do.
dagen: i'm not asking you to name names. >> and i wouldn't. you have to look at that. portfolio reviews are no longer an event. there is something companies see that helps them allocate their capital strategically and freeing up that capital through divestitures is a way to do that when you have businesses that are no longer core. >> your seeing ceos buying earnings-per-share and to your .6% invest in technology. to get through core growth, product innovation. that is an important thing as we go forward. >> i agree. the other thing. a lot of companies are struggling with i have to adapt to consumer taste. how do i do that? how do i even off my business model? how do i invest in technology? a lot of companies are choosing to free up their capital and buy versus build the technology they need. >> is this a short-term thing?
do you see this as a trend that will continue for the long-term? >> the trend will continue. survey goes through 2021. if i look at our pipeline, how market dynamics of changed over the course of the last 10 years. >> walmart buying jet.com, and remark upon how the strategically important move. >> it allowed them to compete with amazon. >> in the past conglomerates were in favor. and premier, to take advantage of different industries. conglomerates are falling out
of favor. is that a trend happening out there? >> we have seen the star bursting phenomenon going back to 2011. it continues today. there are a lot of studies that will show conglomerates, 5%-15%, that is significant. some of the pieces are worth more than the whole. dagen: one person putting this conglomerate together and that individual is the only one who knows how to run it. otto von bismarck, and the political structure and relationships around the world that only he could manage. >> takes a special person to run a conglomerate like jack welch.
it is great to have you. we have breaking news. abercrombie and fitch reported moments ago, ashley webster with the numbers. >> let's begin with top numbers. earnings-per-share at $.62, the estimate was 58, beaten by $0.04 on earnings but dick's sporting goods, revenue coming in at $1.92 billion, the estimate was $1.9 billion, justice should just a hair over the be on the a revenue. the numbers are actually raising their full year, 2019, earnings-per-share guidance, 320-340. you can look at this and premarket up 6%, consolidated same-store sales for the first quarter were flat. we were warned about that by dick's sporting good saying they expected no growth until the second quarter and same-store sales were flat but
guidance being raised on the top and bottom line, by more than 6%. maria: stock is on fire. ashley webster, keep watching those on the heels of better-than-expected numbers. facebook under fire. and sheryl sandberg could be held in contempt after ignoring a subpoena from canada. the fallout coming out. can't escape alexa. the amazon device, and ear on all your conversations. alarming details as alexa is always listening. ♪
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earnings and raised guidance. abercrombie and fitch out with a double beat. the comedy plans to close 3 additional flagship location. abercrombie and fitch losing money although less than the market expected, the stock is down 10% on abercrombie and the sporting goods up. us china trade turmoil working its way through the rest of the market, market selling off across the world on trade fears, china for running to cut off rare-earth minerals. exported to the united states. huawei filing new legal action to block the ban against that. i sat down for an interview with mike pompeo. he calls huawei an intimate of the chinese government. >> the threat of theft, not only commercial individual property but military technology is real and we are doing our best to prevent that from happening. maria: mike pompeo telling me
he sees hope for china deal but we may or may not get one. and 165 points, s&p is down 16 and the nasdaq futures lower by 57 on top of the laws yesterday, the market was up early in the day but reversed course entirely and then some. down dusters are down 230 points. and the nasdaq is down 30 points. in europe, the selloff continues. the s&p down 90 points. the cac quarante and personal 93 points. the dax index in germany done 160 points. japan and korea the hardest hit. as you can see, there was a new swine fever outbreak in china. legal trouble for facebook, found in contempt.
after snubbing canada. amazon is always listening. how you could lose more privacy with alexa taking everything you say in the near future. amazon shares lower. all those stories coming up but first our top story this half-hour is facebook under fire. mark zuckerberg could be held in contempt of canadian parliament for ignoring requests to testify before canadian lawmakers. canada issuing a summons for zuckerberg and sheryl sandberg. judge and napolitano, good to see you. judge napolitano: you would know better the impact the legal impact is really nil. this is not the kind of summons for which he would be extradited even though we haven't extradition treaty with canada. the linchpin of extradition is an allegation of criminal behavior, not failure to show up at a legislative hearing. i don't know what is in his
head. my advice would be to negotiate with parliament's lawyers to come to some common ground but this is going to escalate. >> will have to go at some point? >> i don't think canadian parliament would interfere with facebook's activities in canada. as an instrument to induce these two executives to come. it is in hours but the long answer is at some point it will have to go. and to negotiate the terms, the time, the duration, subject matter and get it over with. maria: the different approaches people have taken, for example europe, european countries have been hard on social media companies with breach of
privacy in the power they commanded, not as much in the united states. judge napolitano: the eu has far more control not under each individual country but the eu itself in brussels has more control over what facebook does in the european union than the federal government does here in the canadian government does up north. how this happens, i don't know. is there another means to get this information out? do i want to listen to someone whose truthfulness is on the question because they want to bloodied the nose in public? a better way to get the information. and the subject of the negotiations. maria: we will see. >> the basis in front of parliament is what? >> the same issue being debated in the united states whether the house of representatives can summon the president's tax advisers whatever parliaments can legislate it can investigate.
they provide services and requires information from them, it surely can. therefore parliament can interrogate its chief executive officers about the same subject. >> seems to be more of a pr issue than a legal issue. facebook and mark zuckerberg in particular displaying this arrogance and feeds into this idea he has too much power, what about the idea legal and political implications, the movement to break up facebook? is that a possibility? judge napolitano: it is a possibility. there is strong movement to break up facebook. it exists among many seeking the democratic nomination for president. it certainly exists with the regulators. a lot more to fear from regulators in the eu. there willing to exercise it more than congress does. it is a pr thing right now.
does mark zuckerberg come off better saying i'm going to protect my customers and not into the government's questions about my customers or saying we do business in canada, happy to chat with you? i think the latter is better pr for him but i'm not his advisor. maria: sheryl sandberg's coo, not cfo. i want to correct that. we haven't seen her or zuckerberg discussing -- judge napolitano: haven't seen them since that very unhappy confrontation in congress. maria: the opioid crisis, johnson & johnson on trial in oklahoma charged with helping to fuel this epidemic. can you make that statement that j and j is hoping to fuel this epidemic? judge napolitano: this is a shakedown in my opinion. i have respect for the state government and respect for its duty to respect the health and welfare and morality of the
people who live there but $270 million from purdue pharma, what do they do with that money could you distribute to sick people? they built 3 buildings on the campus of the university of oklahoma. they got $85 million over the weekend, haven't even announced what they are going to do. j&j's defense is we can't put anything in the marketplace without the approval of the fda. we can't put anything in our advertising without the approval of the fda. we can't put anything in our instructions to the ultimate user or the intermediary, the physician who prescribes this, without approval by the fda. we followed the fda to a t. this about in court. maria: say the maker of an opioid is encouraging the epidemic. should they have not made opioid drugs? judge napolitano: i don't know the answer to that. maria: if doctors are prescribing the drugs what is lost in all this is personal responsibility which nobody discusses and the damage all this is doing to people who need these drugs to alleviate cancer pain.
judge napolitano: the chief justice of the united states, william rehnquist, served 20 years ago, went to his home in virginia, get stopped for dwi. he had back surgery and had overtaken an opioid-based painkiller. the police thought he was drunk. he wasn't. the charges were dismissed. the point dagan makes, one of personal responsibility, there's no way a manufacturer can be held liable for lack of personal responsibly on the part of the chief justice or anybody else. maria: really good points. we will watch that. thanks so much, judge andrew napolitano. donald trump just tweeted on alabama. republicans cannot allow themselves to again lose the senate seat in the great state of alabama. this time it will be for 6 years, not just two. i have nothing against roy moore and unlike many other republican leaders wanted him to win but he didn't and probably won't.
of alabama does not select a republican to the senate many federal gains we have made during my presidency may be lost including our pro-life victories. roy moore cannot win and the consequences will be devastating, judges and supreme court justices. judge napolitano: we go again. maria: any man who has to pull out his gun to prove how strong.
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friday, tesla building a factory to produce the model 3. some analysts say the chinese version could cost $10,000 less than imported versions. shares of tesla down 40% this year. the nfl players union warning members to save their money. maurice smith sent a letter to nfl agents to advise their clients to prepare for job action. the owners lockout could last a year. the collective bargaining agreement expires after the 2020 season but discussions are underway for a new deal. the new way to catch a thrill, visit line from the second story of the eiffel tower, raises 2600 feet, speed up to 55 miles an hour. and the 130th anniversary of the eiffel, they are chosen
through june 11th. the right is not permanent. i wish it was because it looks fun. maria: they want to make it temporary. it looks so good. maria: i would not do it. i know you. dagen: on over anything. maria: alexa is listening, the alexa device could have any right every conversation you are having, startling details you need to know when we come back. ♪
a new patent could mean the amazon device is always on whether users want it on or not. kurt joins us from los angeles. i'm not surprised alexa is always listening. like your iphone 10 phone, the camera is always on. >> this is proof that amazon is at least thinking about going in this direction. patents reveal so much about what a comedy might do with their product and this is very revealing. they are going to record all the things around it, and after 30 seconds, they do a thing called backtracking and they will delete those snippets. they have proven they don't do that and we've done stories where amazon employees send around interesting recordings of their customers to one
another to entertain themselves and also to learn how we say things on alexa to better understand us. maria: the washington post looks at what your phone is doing without your input in the report reveals 5000 hidden apps trackers using data in a single week. those apps are listening in on you. >> very good experiment by the washington post, 5400 trackers that appear go of one month were able to send personal data from the phone and tracked it with software application sifting out what is coming and going from your phone. that is an alarming amount of data. not only that but for the average plan on at&t, half of your data plan being used for this. a lot of this sounds like this is terrible but a lot of the data going out is useful data.
the kind of stuff that is sort of like uber or lift can figure out where you are and apps developers use the technology to better understand where your phone is and there is concern about it, that you and i don't know who is doing this or when. this outlines the fact we have 0 concern over our privacy and, and we should be in control of the fossil who comes and goes with our own data. maria: is another story on the daily mail that says your iphone harvests your personal data while you sleep. popular apps using hidden fracas to collect email, ip addresses and sensitive information. >> how do you get rid of trackers? you don't want to get rid of trackers but what you want to do is to know which trackers
wednesday, may 29 your top stories 8:00 a.m. on the east coast u.s.-china today turmoil hit market this morning across the world looking at sell-off again, on no deal fears china threatening to cut off rare earth material into united states i sat could you please for exclusive one-on-one interview with secretary of state mike pompeo to talk china. >> when you think about risk from military perspective it is all about capacity and intent but what do they have ability to do what they seek to do we are concerned on both fronts. >> secretary pompeo telling me
ip theft is a threat to military technology, as chinese telecom giant huawei files new legal action to block u.s. ban on products trade fears hitting futures lows of the morning dow futures decline of 185 points this morning s&p futures down 17, nasdaq futures current lower almost 60 points more than 3 kwaertss lower, on top of losses markets rallied in the day give a it up by close, the dow industrials down at lows of the day 4:00 on wall street, down 237 points, almost 1%, s&p gave up 23 points in nasdaq was down almost 30 points a third of a percent, today selling continues in europe, european indices lower across the board here too, was lows of the morning right now, ft 100 down 00 points 1 1/3% cac quarante down 98 almost 2% lower on cac, dax dax down one and a half percent in asia overnight japan, korea hit hardest following sell-off, pork ready
to soar on a new app -- swine fever outbreak in china, we are looking at the price of pork and several meats going up as a result of that swine flu in china. retailers in focus dick's sporting goods reported better-than-expected earnings raised fullier guidance the stock up 4 1/4% look at abercrombie & fitch, out, this morning, with more losses even though it was better than market was expecting, the company also said the second quarter comps sales were flat stock down 16 1/2%, on aandf abercrombie & fitch having a tough morning 2020 race on democratic rarity raising bar second round of daeshts candidates must raise from at least 130,000 donors in 20 states shell at least 2% support, in polls to take part in any debate, on the democratic side, stories coming up this wednesday morning joining me to break it down fox business network dagen mcdowell, former home depot ceo former chrysler ceo
bob nardelli realclearpolitics fourn. >> thank you so much jay debate in the fall doesn't apply to original debates the first democratic debate i think in miami let's -- it is june going to be humid in miami again -- did not work for nixon did it i can't wait. >> i can't wait. i am going to be there both nights came out said so they are doing a lot of -- there is chance, republicans sort of had adult table kitty table democrats aren't doing that you could have heavy hitters onstage in separate nights biden one night bernie other night along with candidates pulling % or less. >> do they good biden do you think is he darkest for all other candidates. >> looks like that maria: do i think they will start getting into biden face-to-face take him to task on some he has a long record to account for so far he hasn't been touched on it i
think when they start getting there -- >> there are reports a report about his -- his plans in china you said china wasn't as competitor apparently took son on air force 2 go to china son got one and half billion dollars from clooinz government private equity funds. >> son dealing with ukraine all this stuff, talk about crime bill he has to answer for trump has been hitting him hard on crime bill, a whole host of other things, that joe biden is going to have to account for and or atone for if he wants to make it through primary. >> yet getting all the money. >> he has been money he raiser in democratic party commanding the lead big time. >> he is, certainly the favorite, in the polls, also among name recognition has a lot that are fighting for immediate oxygen debates subscribed that stand onstage toe-to-toe with joe biden make
a name in a race this wide open this many people would change the game. >> going to be important covering that this morning as well our top story right now this hour, u.s.-china trade tensions, reaching a new level with china making new threats this morning blake burman with the latest at the white house good morning to you. reporter: good morning to you as well president trump some within administration making the argument u.s. has the leverage on china in trade war, because the u.s. can place more tariffs on products, however, chinese state media is starting rth to hint at possibility that it could be adding to its argues natural by potentially curbing exports of rare earth, now era erth 17 different chemical elements that make up a host of goods at least used to make up goods electronics for example, smartphones, the u.s. relies heavily on china for its supply of rare earth 80% u.s. supply, is dependent on china. there was a secretary of state mike pompeo earlier this
morning, on that possibility. >> i can't predict what chinese will ultimately do how they make decisions will they attempt to on into? they did he they put some counter tariffs on when president trump tr initially but tariffs on i am sure will take actions in response earn people should know china has had unfair trade relationship with united states an awful long time president trump singular focus to you are push back against. >> it seevenlgly wrapped into trade dynamic at least under umbrella what is going on with u.s. and china is the issue of huawei, in a new motion, huawei asked federal judge in texas to quickly rule in its favor, to overturn what essentially amounts to export ban, the secretary of state continues to identify huawei as a security risk, saying that company is directly connected to the chinese government. >> if that is the case -- that the chinese communist party wants to get information, from the technology, that was in the possession of huawei almost certainly the case
huawei would provide that to them deep connectivity exists inside the way their political economy operates that is very different than united states, that is the threat, that -- president trump sees, from huawei. >>, by the way, if he treasuring department submitted its report to congress stopped short of labeling china a currency plirpr n ma up later china an mofrpting list. >> stay with us i will speak with vice president mike pence this week on friday, 6:00 a.m. eastern right here join me for exclusive interview right after his important meeting in canada with prime minister trudeau, beer in u.s. an highs other busch, first on fox michelle great to have you on the program thanks for joining us. >> thank you. >> right now your focus on
north america but for a long time you lived in china, you were running the asian business i want to ask you about that you lived in china seven years. >> seven yooerps as to tell me about your experiences there, what your reaction is, to all of this upset over china's behaviors practices when it comes to the u.s. >> so there was an intoing sign was time of anheuser us about busch growing business great opportunity. the biggest market globally for -- china we had time there when i think about the sanctions they use today i think goes more to the politics, and positions politicians i am sure will find a good way to get out of that things will settle. maria: you were able to terrorism the volume of budweiser in china over a couple of years, tloo -- three
years or something tell me about chinese love of brands what you saw, as you saw as you you saw budweiser expand so much in china. >> budweiser is the super premium brand in china, it is growing very fast we actually tripled twice because like six times growth in seven years. >> incredible. >> all related to premiumization, strong trend in china budweiser has this great position of being a super premium brand very close to local traditions but still imported in terms of credentials with china sell in china people see brand as international. and the brand is very well positioned in the premium you mean. >> you have norms stake in latin america obviously, one of your important very important markets, when you look a u.s. mca the canada and mexico situation, where we are
waiting on a vote for this, to go into law, what is your reaction to that? and how will that impact business? >> is it a that is, of course, we welcome the decision, because every time that we have tariffs and costs that impact the final product in a way and other consumers and thing extra cost for that for companies lose a little bit of their economics of scale and productivity, as things settle that is going to be great, of course, what we are looking forward and trying to see real impact going to be in midwest proom that was a real fact midwest he premium up big time last two years, now everybody looking forward expecting that these will affect prices. >> much of impact have you seen, at the company, as a result of the tariffs? >> whether it is china, or even -- we had tariffs on aluminum and steel until they were lifted a few days ago in mexico and canada. >> yeah. there is a lot of numbers out
there. but people talk about the impact on that being between few cents to 10 cents. because you have costs over costs. >> is there aluminum cans. >> exactly, exactly, all cans, for local produced very interesting the back is only when you are producing in u.s.. that is why, of course, the that is all this -- this talk around how important it is to apply -- the right thing to be done the company itself will keep finding ways to mitigate this impact trying not to carrier this other to consumers but things happen in mexico and canada already very good thing for us. >> so you had norms pricing power, you have been able to have pricing power you've got about terrific margins are you expecting to raise prices again as a result of the tariffs? >> i think that -- brands they
might have some power to command prices we didn't frees our prices based on on tariffs we have very stable environment in terms of price what it costs not only the tariffs it is aluminum there is a lot of pressure coming from commodities there is inflation in community, so all the prices are moving according to inflation on long-term -- >> so come back to the u.s. you are running enormous business, tell me about the backdrop, we talk every day, about the strength of the economy, we had one percent in first quarter rather 3.2% growth. is that the he sustainable the rest of the year are what are you seeing in terms of consumer spending habitats, and broad economy. >> yeah, that is interesting, because it is one of the first time that we see consumer power and growth coming to the economy, but translation not impacting in a very strong way
everything that is cbg, and goods people buy every day so there is tailwinds pushing the economy. we see in some pockets there is growth accelerating in some other pockets because u.s. too big for us to see as average you see regions market not moving of a fast which you think about beer, beer overall has been stable to small growth in revenues, and we think that this will continue to happen because on top of the economy, we have also very strong for premization. >> tell me about growth industry changing you had investments in upscale products, even health and wellness. you've grown so much, in the last five, 10 years, where does the growths come from, at this point in the next 10 years for anheuser us abobhi. u. >> we look to megatrends three that we are exited about we think that we can play a very
important role, one is premiumization, so beer compare with categories, has very low premiumization, today consumers are looking for different experiences, different products, and they love o innovation, there is innovateing more than ever before very posture role for us in terms of growth the second is idea of health-conscious consumers, and products that can fit the lifestyle so when you think about the success of michelob -- low carbs for position this is few that we continue to explore we believe there is a lot to come from that, the third point brands, so been doing a lot of initiatives brands for example stellar, all the support, for the water and the water in africa
raising full year guidance stock is up 6% in premarket gerri willis on floor of the new york stock exchange that and broader markets good morning. >> that is right a double beat for dick's sporting goods. eps 62 cents a share versus 58, up 4.5%, as you can see, the higher full year guidance for 2019 per diluted share range 3.20 from range 3.15 to 3.35 expect to open 20 stores 2019 on fire this morning flip side of this abercrombie & fitch, with a double beat, and eps loss 29 cents a share versus expectations of 43 cents a share, however,
same-store sales flat, reports that brand closing flagship store in nyc slowing demand, we are seeing shares down principled might loo an week guidance same-store sales to single digital growth goldman sachs era accelerating from neutral for general mills take a look at this down 3.5% they say this is goldman sachs saying the company entering next chapter of mounting deceleration up 3 % this year on acquisition i believe the integration of blue buffalo pet food also period of out performances in core business goldman sachs say that is the over benefits peaking maria, back to you maria: thank you so much, on the floor this morning, coming up trade sanctions escalating more my exclusive sit-down with secretary of state mike pompeo zeros in on national security risks around china and military threat then sharp
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and quarter% rough one month on apple tesla better than 1% as well yields continue to drop 10-year treasury yield at lowest point, in 20 months 2.23%, joining us right now chief investment officer nancy davis good to have you thanks so much for joining us. >> thanks for having me. >> reaction to what is going on in terms of of china and u.s. impact on markets? >> we think a really exciting opportunity because we have so much asymmetry could have a trade deal markets would rally tremendously or no deal markets could fall we think generally market is misplacing dried deal or a geopolitical events we think specifically fixed income he volatility is very attractive equity increased fixed income generationalal lows. >> but are you seeing investors react to uncertainty
at your firm? are they pulling money back? >> um we are not seeing a lot of people looking for hedges they are looking for diversification right now definitely seems much more euphoria in risk assets for people running into whether private investments or equities, credit products i think there is a lot of misconception about exploiting rate loans people running there they want protection from higher interest rates that is big much credit risk in those products so i think, investors don't have kind of choices which is why we are so excited to have recently launched our first etf lose investors to have exposure to fixed income volatility to inflation expectations the market next dade placing in deflation current inflation 5% five year break even 1.59 right now market saying there is going to be no inflation
the neat thing about it we can do well from back end yields moving higher would be stagflation inflation, trade wars, whatever makes prices move higher, and then in the front end we can make money from yields falling typically happens in a recession when fed cuts rates so it is a really neat kind of risk off and risk on at the same time. and it giving sovereign bond yield as well. >> most of us hate volatility right? we see the reaction in marketplace today your new product seems to thrive on volatility. who how do you explain to investors what has been take number new product. >> great question most people hear volatility think bad for my portfolio for majority of portfolios it is bad but when you have a portfolio like ours etf owns volatility we buy options when you buy opposites
doesn't matter if call or put specifically fixed income volatility, you own it, so increases you profit from the increase in volatility, so it is a good time, as value investor to look at volatility as asset class specifically fixed income when is much lower price than equity volatility which is much higher. maria: go ahead. >> are you making a bet on rates do you think rates are going to continue to fall. >> so the neat thing about our product is that trades difference between two points in yield curve so not making a bet on directional rates what we want is steepening of the yielded curb did yield curb difference wen two swear swaps and 10 year swaps 6 bays points incredibly flat if you think about all the uncertainty whether monetary policy, fiscal spending, what is how we are going to finance the deficit we still have a
3.9 trillion-dollar balance sheet so it is a trillion -- i think incredible opportunity to say the market is not pricing anything it is sort of priced for central bank perfection more same next decade we think creates greet opportunity for us steepening is which we derail because long optionality. dagen: what happens if it inverts further we've got a three month and 10 year inversion right now not yet on the two to 10 what happens to portfolio when that happens. >> nice thing about owning options to have that view if you do it in a delta one format a swap or in a future, you have to one neutral your exposure you need more on front end versus the back end, so you can lose quite a bit of money when yield curve inverts if you just have it in linear instruments, with openings, you have the asemmet trix
payoff steepening environment a wildly asymmetric pay out if it inveterans we don't know how long it will stay inverted you have a lot more staying power -- when you buy option almost like a debiting card you fully pay for it spend premium you already had stop loss, the beginning so it gives you more staying power, to with stand if yield curve does invert. >> we have inversion right now rite dagen last time inveteransed march. dagen: back in march. >> what do you think about what is going on right now in rates dagen you studied this. dagen: i think if you look at 2.23%, that that is a 10-year yield telling you the market is kind of telling federal reserve it needs to cut interest rates, the fed funds rate 2 1/4, so fed funds rate based on on this higher 2 and a quarter to 2 1/2 higher than you get paid to lend money to the federal government 10-year
period watch two and 10 invertdz five days month of march so far month of may inverted more days on three month than 10 year, i think that if you see a lasting inversion lasts for weeks this is what guests have told of you he maybe it becomes a recession indicator. >> so, so far you know there is worry that inversion typically means recession is on the way. you are not believing that yet? i know it didn't happen in march. >> not quite not quite. >>. dagen: this is worsened i think economic outlook. >> thing neither about the product if we do have a recession and yield curve inverts you would expect volatility to increase. because of the recession also the fed even though two cuts are actually priced into market right now, if the fed actually does cut rates that will be another way to steepen the yield curve so it is a really asymmetric time in terms of what is going on in
market what market prices are interesting value play to own and look at diversifying to benefit from pickup in volatility or recession or if times are good we actually have what the fe is trying to achieve which is inflation. >> we will watch that nancy davis joins us, down 200 points mike pence on his way to meet justin trudeau this week to talk about usmca the passage of that, and my exclusive interview with the secretary mike pompeo, he will zero in on national security risks from china the rising risks of vaping what experts are saying flyover of e-cigarettes poses a serious health threat we look at that when we come back. stay with us. ♪ will make you -- you never going out of style ♪
maria: good wednesday morning. i'm maria bartiromo. it is wednesday, may 29 top stories 8:34 a.m. east u.s.-china today turmoil working through markets looking at stock sell-off across did world on trade fears china threatening to cut off rare earth materials into united states, i sat down yesterday for exclusive one-on-one with secretary of state mike pompeo to talk about the trade deal and national security risks around china. >> i hope that there is a deal i hope arrangement that will work to the benefit of each two countries, but if there is not i am very -- xhern economy will continue to grow. >> secretary pompeo telling me huawei is instrument of the chinese government, as technology giant is now filing a new legal action, to block the u.s. ban, that is in effect trade fears hitting futures following late day sell-off dow industrials down
1899 points s&p futures down 18 nasdaq futures lower 60 points caterpillar boeing taking a hit premarket, this as boeing ceo says public confidence has been dented by the max crashes boeing shares down almost % caterpillar down almost % apple weaker companies doing business in china among most sensitive. >> european indices down across the board f 00 one and a half percent lower cac quarante in paris down almost 2%, 04 points lower dax in c germany down 18 points one and 1/2% in about asia overnight japan, korea hardest sell-off on wall street, pork prices are set to soar, on a new african swine fever outsbreak in china a warning for e-cigarette users study shows flavors could be bad for heart 2020 race glakt party he raising bar second round of debates candidates must raise
from at least 130,000 donors in 20 states show at least 2% support in all polls to take part. >> all stories coming up top story this half an hour that is that u.s.-china tension secretary of state mike pompeo laying out military risks from china, during our exclusive with you talk through massive risks that exist in terms of china and u.s. national security. >> when you there i risk from military sprest it is about capacity intent, what do we have ability to to do what is it they seek to do. and we are concerned on both fronts we have watched, president xi make commitments said he wouldn't go to south china sea billed out militarily yet has done so we've watched him, engage in the -- very significant arms bill not only in the quantity of arms but in lettingality capability capacity, and so on both fronts something that america needs to make sure we do all we can, to sflur that
we stay in a posture where we can deter a this so we don't ever have to send soldiers sailors marines to a war. i can't imagine that happening amongst two super powers it is our job state department to make sure we never put america in that position. >> joining me great a america pac chaichl with former assistant to president ronald reagan ed rollins how is china fight affecting things for president trump in terms of the 2020 campaign, in terms of his support. >> key thing the farmers midwest how do they feel about this important part to any republican candidate, is to, you know i think if it gets resolved, and they feel pretty good about things, they -- production, normal prices, it is fine if they have a real serious recession hurt by president -- trying to bail them out can have impact. >>. dagen: looking aig headed to 2020 election, ed again the economy is 10 years into this
economic run, and we have this fight with china, that -- there comes a potential albatross. >> what i worry about strongest economy we have had 50 years president trump getting no credit for it in polls, indicate that, that is is already my big worry if i was running his campaign obviously, i am not that is all would i talk about here us how he we got this economy moving again we had to undo all the stuff biden obama had done, special orders -- this is what stimulated movement going to continue to move forward in the future. dagen: why isn't he getting credit. >> i think tum subjects he talks about never same story same day it is -- and he is not a disciplined messenger i think he has been -- amazing ability to lead but at the end of the day not a communication strategy that worked. and i think to a certain extent, fact that again he had -- we have strongest xh i in world people sort of assuming it happened as opposed to him making it happen.
>> this was gone on over and over again trying to sell tax cut legislation, ed people deniability understand that every income level got tax tax cut accountant understand they doubled standard deduction communication out of this administration -- >> biggest failure of call they have got 50 people in white house working on communications including some of our friends you have got to tell the story over and over and over again. there is three things this president has to talk about one is strong national leadership international leadership he certainly has provided, second is security of the border, third most important of all the economy. what the economy didn't happen by accident why do you want to go back to a guy like joe biden part of the obama administration, and why do you want to keep moving forward -- those are three things. >>. dagen: despite the massive national stimulus from federal government from federal reserve we never got wage growth 3% in this country, during that to. maria: not a word said about it. >> story, that is that is what
you should use a campaign for, and again, if you can win on three things, country regains confidence you can lose that economic stimulus, economic success by going backwards, that is what biden o someone like that would be. >> biden now is in a war of words, the former vice president, over comments made by the president, overseas biden deputy campaign manager issued a statement saying this to be on foreign soil on memorial day and to side repeatedly with measuredous dictator against fellow american former vice president speaks for advertises trump campaign communications director responded saying that is riches coming from joe biden who bashed president trump standing on foreign soil, earlier this year in germany but unlike obama-biden administration, failed to make any progress with north korea, president trump increased pressure got them to negotiatingings table air fromak war to russia reset joe biden has been wrong on virtually every foreign policy call in the last four decades,
the democratic national committee making it more difficult for candidates to intersect round will of debates this fall what is your reaction to what here in doing on the other side. >> going to raise a lot of money at least a lot of -- contributors to get the into that not easy task you main do through direct mail something like that so my sense is problem, telling good friend here story yesterday about mt. everest premise tomb people climbing not enough good ones i think to certain extent too many candidates in this race problem guy like by hissen basically not a great candidate never been a great candidate never no one gets one-on-one at this point in time i think the fact bernie sanders is second candidate, kind of a contrast you've got very serious woman senators very series other players when field of 23, it is too big has to do get nader in. >>away in quick. >> i was going to ask ed biden
clearly fronted runner at this point part of that name iddetsets like alleged payer jeans folks know and like how wild open do you they the race how ripe for big upset. >> last three people didn't expect him to be president including george w. >> i am danny -- >> australian open champion osaka number one play in the world narrowly lowe swoid shock upset at roland garros, first match osaka, 6 n love firstset by ana, slovakia, 09th ranked player in the world to win twice against osaka before ultimately losing in three sets. >> this is the most nervous i have ever been entire life during a match. today was weird usually nerves go away but kind of stayed the entire match then i just felt like there was a fight of will
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why do we have such sharply falling interest rates? i mean look at this 2.22%, on 10-year treasury? way, way down i think that is something like a two-year low so why that low? well the two answers here, number one maybe we are headed towards recession, a real slowdown in the global economy, doesn't look likely for the u.s. economy though even though we have short-term interest rates higher than longer term interest rates supposedly a sign of recession i don't see one on the horizon for america to me future i think it is a flight to safety, with lots of uncertainty around the world, and various areas people want to put money into a place which is safe and secure, and that is the united states treasurer securities, so i think that prices i'm sorry that yields are fallings case of this flight to safety. there may be oat factor 10 trillion dollars bombs owing
around the world have a negative interest rate bonds -- i am not sure what consequences are maybe a flight to the safety of american bonds, because they are safe and not subject to negative interest, we will have to sort it out bottom line stocks are falling as rates fall.. >> one thing i didn't hear you say rates are indicative of a recession on the way. >> well, i don't think it is. >> i don't think so either i don't think the message we will see we need more data. >> i guess so we always need more data. maria: i know you have a lot more see you 10 minutes "varney & company" begins top of the hour every day 9:00 a.m. eastern after mofrns mofrns first rising risk of vaping large research this morning says e-cigarette flavors may pose a serious health delete what you need to know back in a minute. the latest innovation from xfinity
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maria: welcome back so esmashths healthy alternative to regular cigarettes now medical study says vaping could pose a very different threat and dangerous joining us family medicine doctor varshavski aka dr. "mik" speculation uncertainty around this. >> the public has misconception that vaping is a safe alternative compared to cigarettes is it are there less cancer causing substances yes classification as to what is going on study took cells that are found within the blood vessels within our heart tested them with flavorings inside vaping devices and they found it caused inflammation early dysfunction going to cause problems down the line. now we haven't seen this occur in animal models human models vaping is relatively new trend it is worrisome we need to
write off vaping as safe alternative to smoking. it is not safe. >> how do we convince someone to stop vaping? >> i need to know that. >> a lot of us need to know that. >> question for personal life. >> yes to a tell me about it. >> my son. >> okay how do i coincidence h -- convince him not good. >> better than smoking. >> a lot of people do how do we convince them it is not dr. "mik." >> first step convinceing anybody point of viewfying out why it is happening there is some other reason number one thing to figure out once you have that figured out you can better target your argument. >> becomes a habit just used to doing it keeps doing. >> it used to doing it per pressure nicotine highly addictive important to figure out what caused this to start addressing that right on then we can make progress.
>> i think there is vaping thing is i see kids now, they got the phone in one hand and carry that vape thing 24-7. >> true. >> absolutely. >> you don't smoke cigarette after cigarette the way overdraw up. >> exactly the rise of vaping among high schoolers middle schoolers large gone through public health decades long thing about smoking got rid of that here comes vaping behind it now kids even younger getting hooked. >> my job is to bring out this break down perpetration that vaping is safe because it comes in fruity flavor means not as bad, actually flavors make it much more unthat real-time as we see with study on you are you cardiovascular
cells. >> stop smokes cigarettes a valid use. >> research has been weak to say the the least when we have proper research who should use vaping to top smoking how long success rate does that hold five years down the line once we have that research i he will happily use vaping to get patients off cigarettes. >> not until then. >> dr. "mik" good to see you. keep smoking cigarettes. >> absolutely not. >> how can the patch? >>. dagen: there is that. >> medication -- >> we will be right back. dear tech, you've been making headlines. smart tech is everywhere. but is that enough? i need tech that understands my business. i need tech that works at scale. dear tech, dear tech,
dear tech, we're using ibm blockchain to help make sure food stays fresh. we're exploring quantum to develop next generation energy. we're using ai to help create more accessible health care. we're using iot to create new kinds of digital wallets. let's see some more headlines about that. let's expect more from technology. let's put smart to work.
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a.m. for that. great show this morning, guys. >> thank you very much. >> thank you. >> great being with you. maria: have a great day. markets are down about 200 points right now. we will keep following this uncertainty around the trade deal with china and markets' reaction. "varney & company" takes it now. stuart, over to you. stuart: good to see you again, maria. good morning everyone. why are interest rates down so much? that's a good question. it's confounded wall street. let there be no doubt, the sharp fall in the cost of borrowing money has had a profound influence on stocks. let's start with this. the yield on the ten-year treasury, look at that, 2.23%, lowest in a couple years. is this a flight to safety? that is investors buying safe treasuries, pushing yields down, or is it a signal of slowing economies around the world and maybe even a recession in the future? now look at this. the profound effect on the markets. there's a selloff coming in a