numbers. they've got a great base in the permian and they're a better stock to own than exxon. >> i see as well, mr. weiss. >> just because you don't like stock doesn't mean there aren't opportunities. ibm has their meeting tomorrow at 10:00 ibm. >> okay. cintas >> thanks for watching "the exchange" starts now. thank you, scott, hi, everybody. the stages of fed grief from acceptance to panic and now to euphoria a look at the markmarket's roll coaster reaction to the rate cut and what tomorrow's job report could mean and the battle of the fake burgers just got more intense. the impossible burger is going national we'll talk to the ceo about his plan to take on beyond meat. and facebook's next move they dominate your small screen. now it wants to own your tv. we'll tell you how we begin with today's big rally

out of nowhere bob pisani is at the new york stock exchange >> we're back to where we started just before the fed meeting yesterday. you go and explain that. oh, i'm supposed to. the july ism number was almost perfect for the markets. still showing growth, but just weak enough to keep the belief that additional rate cuts from the fed could be coming. that's what i mean when i say perfect. stocks rose on that report after 10:00 a.m. eastern time. the dollar dropped bond yields have been generally lower. dow and s&p 500 just off their highs for the day. semiconductors and consumer staples have been leading. crude is down 3% and there's particular weakness in oil and gas exploration stocks as cansho gave weaker guidance the whole group is lower today good news and bad news for august the setup is kind of difficult august is the worst month for the dow going back to 1987 according to the stock trader's almanac. and stocks aren't cheap. the s&p is up 20% but earnings

are flat that means it's expensive. clarity on global growth and tariffs in trade are still elusive. and future rate cuts from the fed. that's clearly not a guarantee but plenty of bulls say u.s. data is strong the rates are still low and despite powell's reluctance to endorse rate cuts, central banks are certainly in easing mode and everybody should remember that, kelly. >> it wasn't just the stock market, bob, thank you good run-through big moves in the dollar and in rates, especially but in some head-scratching ways, including in today's session. let's check in on all of it. rick santelli is at the cme. help us wrap our heads around all of this. >> it really is very confusing when the fed starts easing they view it as a cycle based on some history as you look at an intraday ten, we're down a half a dozen basis points sitting right at 195. that was the low the cycle low on july 3rd as you

see on that chart. if you zoom back to the november of 2016, you can see that's the last time. here's the interesting fact. if you looked at the big move which happens so fast from 3 25 down to that 195 zone and you try to do some technical analysis in various fashions, 207 keeps coming up. even though we violated it since july 3rd that's been the average yield. so today's valuation again could have big significance, kelly >> in a nutshell is it fair to say that markets are going back to their -- and bob mentioned this the ism data lends credibility to this idea that the economy might need more support. are they just saying, hey, we're back to where we started the fed cut once but it will cut again and that's why we're seeing the reactions this afternoon that are contrary to the reactions 24 hours ago >> well, i don't want to comment on when and if there's another easing coming, but i will say this bob is right, and ism, even though barely positive comped

back quite a ways. but it's manufacturing and trade issues everybody knows they'll be a bit squeamish. but there's a lot of general economic fundamental data that's come out about the broader economy and service sector that's still holding up relatively well. >> absolutely. rick, thank you. rick santelli, good to see you >> is it clear sailing for the stock market or does the fed need to keep cutting rates from here let's bring in the chief investment strategist at mariner wealth and kenneth monn from hennion and walsh. what do you think is the message now as everybody has had the chance to digest yesterday's rate cut at first the markets seemed upset there wasn't more. today they seem to be saying, well, we think there still is going to be more in terms of easing what do you say? >> yesterday's cut was a takeback of the controversial hike that took place in december and essentially the economy didn't need an interest rate cut at this point in time. we've had four consecutive

months of increases in consumer spending four consecutive months. retail sales well above expectations in june and, in particular, online commerce was up 8.7% year over year the strongest month thus far this year. it's the consumer that's going to continue to drive the economy forward. >> you're in the camp that thinks -- looks relatively bullish out there. didn't need this in the first place. now that it's happened, does it make you sort of -- is it status quo for you on stocks? you said, do you pick the parts of the economy that are strong like the consumer and just stick with that? >> it's part of that the theme of slowing but growing continues. the economic foundation is stable but it's certainly slowing so you have to identify quality companies both on the equity side and the fixed income side stick to investment grade. stick to the u.s., we believe, on fixed income. equies, companies with strong balance sheets, history of earnings and -- >> at least they still give you a yield. >> when the 10-year is yielding, what, 2% >> right on that point, what is your

takeaway from the fed policy moves here are you upset they didn't do more like kevin? do you think they've already done too much? >> we think that actually what they've done is just about right. you know, i think the idea of being data dependent and after they started talking about perhaps cutting, going back a couple months ago, we've just gotten some better than feared, btf is like the new acronym that everyone uses. better than feared data. and it doesn't support doing more than that and i think they would paint themselves in a corner if they promised you can't promise. this is a data dependent industry i think what they did is just right. i think the economy is moderating it's not moving to recession it's not so robust that we have to be worried about runaway inflation and rising rates that kill cycles like this. so we feel pretty good about this >> so i guess you'd keep powell

in his job if you had the power. >> i would >> you have a couple of stocks i want to mention. you like best buy. micron in the technology space fedex in the industrial space. are you not worried about the signals from manufacturing which, while they haven't been disastrous, are slowing. that's the weakest, most vulnerable part of the u.s. economy. especially if we get another front in the china trade war >> so, you know, when we parsed through the manufacturing data, which is where you might have most caution, even caterpillar talked about strength in north america. so we also have exposure to domestic, you know, trucking companies where we feel very good about things. on the semiconductor front, we feel very confident because they've been priced for recession. expectations are so low, what they are saying is, we're seeing a very slight cyclical uptick and some of these semiconductor

companies that we own also are leveraged to secular growth plays. federal express is just one example of company specific things they've done to become more productive, upgrade their fleet and e-commerce is a secular growth story >> and i think it's interesting because it goes against the grain for some of the typical market narratives we're hearing around these stocks. it's also an area you see strength i don't know if you can get specific, but how would you be buying >> there's a lot of different companies that stand to benefit from the growth in e-commerce. also the amazonification of the economy. also industrial reits. some of the delivery companies fedex or u.p.s. or xbo logistics and other online merchant and providers. there's a lot of up side potential there, but i think you also have to look for those companies and securities that offer income potential as well, even including municipal bonds or municipal bond --

>> nice here justification other than fed rate cuts for holding some of these stocks thank you both really appreciate it kevin and jeff now to china trade talks are wrapping up in shanghai with no deal in sight has this been china's goal all along like "the wall street journal" suggests. here's gary cohn saying i think the trade war with the u.s. was a convenient excuse for the chinese to slow down their economy and prurcesident trump provided that excuse he said it was going to slow down with or without a trade war. could another round of tariffs still be coming? let's bring in the chief strategist at silvercrest asset management and patrick, all of a sudden, especially with the president's tweets earlier this week, it seems like it's not all good news on the u.s./china front should we expect more tariffs to be coming if these talks really fall apart >> it's not a surprise that not much progress has been achieved. you know, there was a cease-fire at the last g20.

but both sides are testing each other right now. they believe -- each side believes they have more leverage, that the other side is economically or politically more vulnerable and the only y to test out that assumption i through pain and the good news, though, is that it doesn't look like either side is eager to escalate, to dramatically escalate that pain. so for the moment, i think that may be why the market right now, the stock market is ignoring the fact that there isn't positive news >> you're right. i would have thought they'd have a much bigger reaction to this idea that it's not the outcome we'd had a month or two ago. when they're not eager to escalate, even president trump seemed to indicate if he went another round in this trade war, it would be after the next election is that because he's maybe more aware now having seen the damage to parts of the u.s. manufacturing? >> so there's a big outcry you see it even in the ism surveys from a number of

different sectors about how they're affected by u.s. sectors. how they're affected by the existing tariffs s and also the prospect of new tariffs. in the previous guest, they said it's the consumer driving the u.s. economy and consumer goods is a good place to be. well, i saw a barclays study just about a month ago which suggested that actually consumer sector is one of the most exposed to escalation of a trade war with china in terms of the hit to earnings. so from the u.s. side, that's why i think, even though the president likes to talk about all the bad things he can do to china, we haven't actually seen him pull the trigger >> we have those rounds of tariffs in place if he's signaling, i'm going to hold off on this until my re-election, markets are still going to price that in if they think, okay, now we'll have that final expansion of tariffs to the rest of the imports from china. >> that's been something hanging

over the market since, well, it played a role in the sell-off in the fourth quarter of last year. the idea that there were going to be these dramatic new tariffs on china the good news, it hasn't materialized the other thing that's going on, and you referred to gary cohn mentioning this is that china is slowing. but the main reason china is slowing, the trade war doesn't help but the main reason they're slowing is because of issues that were already embedded in the chinese economy. overreliance on credit expansion, overinvestment. the mounting bad debt in the economy. so they are coping with those things and those are things a trade deal won't solve for china that's why i don't think they're in a big hurry they are focused on trying to contain those issues and as opposed to satisfying a trade -- trump's trade demands which don't seem to be accelerating at this moment because of the vulnerability of the u.s. economy >> patrick, thank you very much. coming up on "the

exchange" -- burger king announcing its impossible whopper will launch nationwide we're going to talk to the ceo of impossible foods about the partnership, about its push into supermarkets as well, and how they generally plan to keep up with beyond meat also, facebook is looking for growth and thinks it can find it in your tv "the exchange" is back in two. dear tech, let's talk. we have a pretty good relationship. you've done a lot of good for the world. but i feel like you have the potential to do so much more. can we build ai without bias? how do we bake security into everything we do? we need tech that helps people understand each other. that understands my business. we've got some work to do. and we need your help. we need your support. let's expect more from technology. let's put smart to work.

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welcome back beyond meat is falling more than 11% today following news of its secondary stock offering it was 3.25 million shares the offering coming in at a steep discount of $160 per share. the equity today trading around $174 now even the 160 was more than six times the price of its $25 ipo. the shares are up 600% since then now all this is happening as one of beyond meat's biggest competitors is launching its biggest partnership yet. the impossible burger will soon be sold nationwide at burger king let's get straight out to san francisco where aditi roy is with the ceo of impossible foods, pat brown aditi? >> thanks so much, kelly pat, great to have you with us you are launching in burger kings nationwide with the impossible whopper starting next

week >> right >> you've had supply constraints in the past. what gives you the confidence that this time you'll be ready >> well, we had -- i would say impossible to predict huge surge in demand earlier this year. we had been planning for growth but nothing that big as soon as we realized that demand was outpacing our supply, we scrambled to scale up production at our site in oakland. we have increased production out of oakland more than threefold in the past two or three months. we've doubled the staffing there. and we just announced a partnership with osi, one of the biggest food manufacturers in the world that will again increase our capacity and our ability to scale massively so i think we figured out a solution to the problem.

we have caught up with the demand, i think, our restaurant customers can have confidence that we'll be able to supply them from now on without a break. >> that being said, burger king is your top partner and partnerships drive top line growth there's been a land grab of sorts between you and beyond meat over these partnerships should the supply constraints come up again, how do you prioritize burger king over some of your other partnerships >> well, the whole idea here is we never want to have to face that question. so we are extremely confident that we'll be able to supply all the demand that burger king has and the growing number of other restaurants. >> kelly evans has a question. >> pat, it's great to see you. i was just going to say, you guys were all the rage until the beyond meat ipo. they've kind of stolen the limelight now. do you believe you have the better product, and if so, how do you get the limelight back?

>> well, i think we have the best product of any kind the best burger of any kind on the market, but it's really for consumers to make that call and the competition that we're focused on is not any other plant-based meat producer, but the animal-based meat production system and that's a very high bar and that's what keeps us innovating >> is it much more challenging for you when you're competing now with beyond meat with all of the capital they've been able to raise thanks to the public markets? >> to be honest, it's really not a big issue for us i think to put it in perspective, between impossible foods and beyond meat, we share less than 1% of the u.s. market for ground beef. the other 99% is still out

there. and it would be crazy for us to focus on beyond meat as the competition. we're focused on the other 99% and there's huge potential for growth there and we have no shortage of demand >> when you are watching beyond meat's stock just skyrocket, you're a private venture-backed company. investors include bill gates, google, katy perry and jay-z, what kind of conversations are you having with executives about going public or even a possible sale do you feel any pressure or that the window has closed? >> first of all, we've never had any intention to sell the company. i think that you can pretty much rule that out. as far as going public, of course it comes up frequently. we've been very lucky to have great investors. no shortage of great investors when we need money to support our growth so from a financial standpoint, there's no urgency to go public.

from a mission standpoint, we want to make sure that we are in a position where we can continue to do the innovation we need to do and everything we need to do to scale our growth to completely replace animals in the food system by 2035. and right now i think it's not the right time for us to go public we'll definitely -- you'll be one of the first to know >> i hope so part of beyond meat's success has been these partnerships with chains like dunkin donuts, tim horton's, mcdonald's ceo has indicated they're watching this space closely. have you been talking to mcdonald's or does your partnership with burger king, is that exclusive and prohibit that >> well, i wish i could answer that question, but i think that's kind of sensitive information that we have commitments to the counterparties not to talk about

publicly are you able to covet mcdonald's >> we -- we have talked to pretty much everyone who is, you know, selling meat products commercially or, you know, at retail or in food service. and, you know, at some point when you think about it, if we're going to completely replace animals in the food system by 2035, it follows that ultimately all those guys are going to be our customers. >> another chain's ceo of chipolte said he wouldn't be alterna alternative foods ontheir menu because it's too processed for their menu how do you respond to that >> i think it's crazy because people think of processed foods as like salty junk foods made from -- made by food manufacturers that really don't care that much about the health of the consumers we're incredibly conscienceuous

about the health of our consumers. it's processed in the same way a loaf of bread is process where you deliberately choose a set of ingredients. you grind the wheat. you mix it with yeast and water and salt and then bake it every food in your diet involves some processing. ours is really no more processed than something you'd buy in a fancy restaurant >> pat brown, ceo of impossible foods, thank you so much for joining us kelly, back to you >> thank you aditi roy. impossible foods is number 27 on this year's disrupter 50 list. maryland is helping students pay down their debt if they buy a home maryland's governor joins us with how that works and how successful and costly it's been. more and more couples are taking out loans to finance their weddings good idea or is it not the right way to sta ortff your union?

that's ahead in "rapid fire. "the exchange" is back in two.

welcome back to the exchange the stocks broadly are still rallying we're a little off session highs right now. the dow is still up about 250 points that's nearly a 1% gain for the dow and s&p. look at the nasdaq, up 106 that's a 1.3% gain here are some of the individual movers this hour semiconductor stocks are in rally mode led by shares of western digital.

despite missing revenue expectations, their guidance was much better than analysts feared it's giving a lift to the whole sector restoration hardware also moving higher it's off session highs a double upgrade at bank of america to buy and they raise the price targ toets $165 from $85. rh trading at $142 today bank of america saying they have strong product momentum, can raise prices and they see less macro risk shares of kellogg are also soaring today. in fact, they are leading the s&p. kelloggs is up nearly 9% they reported organic growth revenue grew more than analysts expected helped by sales in its snacks business. so there you have it kellogg up more than 8%. over to sue herera for a cnbc news update >> hello, kelly. here's what's happening at this hour by a 67-28 vote, the senate passed a budget bill and a debt bill permitting the government to resume borrowing to pay all of its bills

the legislation now goes to president trump for his signature. rwanda closed its border with congo today because of the deadly ebola outbreak. at least two cases have been confirmed in goma. that congo city sits along the border with rwanda one person has already died there. american rapper asap rocky testifying at his assault trial in sweden saying he did everything possible to avoid conflict with two men that he said persistently followed his entourage in stockholm he claims one of them picked a fight with one of his bodyguards and jeff bezos and his ex-wife mckenzie have completed their divorce. in a government filing late wednesday, amazon disclosed that jeff bezos' stake was cut to about 12% worth $110 billion mckenzie bezos has a 4% stake worth more than $37 billion and she plans to give at least half to charity you're up to date. that's the news update this hour back to you. >> sue herera, thanks very much.

qualcomm gets chipped at huawei weighs on results fitbit ain't looking so fit and hedge funds to be more transparent. wldnde n versus machine in th ador a the machines are winning. it's all in rapid fire stick around - stand up if you are first generation college student. stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. i will tell you this, southern new hampshire university can change the whole trajectory of your life.

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welcome back to some dramatic breaking news on tariffs. eamon javers with more what's happening >> a tweet thread that gives us the most detailed read-out of the negotiations between the u.s. side and chinese negotiators in shanghai that wrapped up this week the president suggesting that those talks were constructive as the white house statement said yesterday. but expressing more disappointment here overall in china suggesting that they had agreed to buy agricultural product in large quantities but did not do so. he also says my friend president xi said he'd stop the sale of fentanyl to the united states. the talks are continuing and then he also says there are some new tariffs coming he says on september 1st, the u.s. is going to be putting a small additional tariff of 10% on the remaining $300 billion of goods and products coming from

china into our country this does not include, he says, the $250 billion already tariffed at 25%. the president saying we look forward to continuing our positive dialogue with china o a comprehensive trade deal and feel that the future between our two countries will be a very bright one so the president of the united states here slapping additional tariffs on china at a lower rate a 10% rate, lower than that 25% rate he referenced but also expressing frustration and disappointment in the way these talks are going. so that sets up a dramatic scene in september when we have learned that the chinese delegation will be coming to washington, d.c., for a continuation of these talks with the president ramping up now the tariff and rhetorical pressure on china, guys. >> eamon, thank you. we'll have more on this as we follow it over the next few minutes. want to get initial thoughts contessa brewer, leslie picker and bill griffeth with me. the market is taking this in

stride the nasdaq still up 0.7% this was not -- not anticipated. this is a big deal to extend it to the rest of the imports >> this is exactly the kind of headline that would have sent the market lower in any other time we're still in sort of the fed after glow right now but i'm finding it very interesting that we are not dropping appreciably with this kind of a headline we are up only 50 points now we were up over 100. it's coming off. this is the kind of thing that would send it down 100 points immediately. >> there are companies who have now formulated strategies for tariffs for the next half a year or beyond because the uncertainty is certain >> but you wonder because the companies that were already affected were ones they had first been hit by 10%, then 25 now a whole set of companies that maybe some for the first

time are going, here we go now we have to come up with a plan, too. >> i didn't think there was a lot of optimism they'd be able to come up with a deal to avoid it >> when you hear that tweet, there's not that much in the way of details other than 10% september 1st. oftentimes the market is kind of wait and see and wait for more information. wait to see what solidifies. maybe something can happen >> and 10% is less than 25%. >> and i was premature we are heading into negative territory now. >> the president himself downplaying this move. he called this a small additional tariff of 10% remember, it was the 25% level that really kind of spiraled the markets earlier this year. the 10% had been in place for almost a year now. >> as we've been saying, you know, the market already priced in disapointment or i should say they'd already priced in the possibility that we were going to get something down the road. what would disappoint the market is if you saw a stop backwards and this is a step backwards

>> absolutely. >> obviously, shanghai didn't go well this week they called it constructive but that's trade talk. >> that's what they always call it >> the nasdaq hanging on to about 0.3% gain. we'll have much more on this let's hit a couple of related stories. qualcomm already falling today after missing the street's expectations on revenue and guidance the ceo was pointing a finger at huawei saying the chinese tech firm's growing smartphone share in china would create headwinds for them the next couple of quarters also u.s. consumers being in pause mode ahead of the 5g launch >> this is a kitchen sink full of excuses from qualcomm as far as i can tell. trade issues, the headwinds there, the reduced royalty payments from huawei because they are in a patent dispute with them like they have been with apple for all these years and that transition from 4g to 5g means slower demand for 4g products right now what am i missing? was the weather bad, too >> that's why at least according

to a goldman sachs report in the first quarter, qualcomm on a value basis was the most shorted stock. >> wow >> by hedge funds. it's because you see all of this overhang with regard to litigation with regard to supply chain. and then, of course, throw some demand aspects around 5g and you have a whole cornucopia of issues >> especially when they got positive settlement with apple perhaps priced too much to perfection >> they are expecting these headwinds in china for the next two fiscal quarters. it makes me wonder what they see beyond two fiscal quarters that might change those conditions in china. >> and he talks about the sales of the huawei smart phones this is where you start to look at the nationalization, if you will, taking place, right? when china starts to say chinese products are going to win in this market. when the u.s. says u.s. products are going to win in our markets. we talk about macau and the company is trying to figure out, do we still have a long-term business here or not >> what's really interesting is

the number of companies that do not want to talk about the trade uncertainty related to their business and those casinos in macau are among them not only do they have to deal with what it does to the chinese economy, who it affects in terms of the glamblers coming in but they don't want to undermine the renewals for concession renewal. >> is that what you were pointing out >> 189 on the ten-year note? >> we started out this morning at 1.05% or thereabouts. >> dropped to 95, which was going to be a low we hadn't seen in months but now at 1.89? >> and watch the 1.95 level if we break below that. well, all it took was this news which you can see. the president said an additional 10% tariff on china on those additional $300 billion worth goofeds will be going into effect september 1 the markets have turned lower. bill, you're right that's a massive move. >> that's huge >> for what's already been --

>> tear up the charts. get out the new ones if there's a silver lining, it's that mortgages are going to get even a little bit cheaper. >> like the housing market needs the help >> exactly a couple other things to mention and then we'll continue to roll the tariff news into it. activist hedge funds have caused a lot of headaches for corporate boards they have pushed out board members. agitating for changes to cut cost, return money to shareholders institutional investors are doing agitating of their own they are pushing activists for increased transparency and lower fees and this had been a great year for hedge funds. obviously it's been a great year for the stock market how much pressure is now coming to bear on some of these funds >> a great year for hedge funds. those that invest in equities. and activism seems to be the most so prime to benefit from this. what you're talking about is a reuters article that came out this week that looked at special purpose vehicles where they are

essentially single stock funds that allow managers of these funds, well-known names, nelson peltz, corvex, keith meister, dan plants they are able to invest in one stock idea share that with lps. oftentimes they are existing lps in their other fund. and then that way they're able to have more of a give and take with their lps in order to make changes at that company and get their lps on board before they . that said, it's not all, you know, a free lunch for these lps either they are locked in they are still paying fees oftentimes with these special purpose vehicles, they are super liquid stocks like proctor & gamble with nelson pelt z that was based on an spv and investors in that spv were locked in for some time, two to three years. >> you have to play by the same rules we make everybody else play by. >> you may pay slightly lower fees and know about the idea

before it gets into it, but still locked up and you are still paying fees at the end of the day. >> this is kind of an interesting one. jpmorgan hired a firm that creates artificial intelligence generated ads. after a pilot promotion created by a computer received 2 to 5 times the response of ones created by human copyrighters. let's show you a couple of these. the machine-created ad you'll see on the right generated nearly five times the unique clicks of the human written one on the left. so on the right-hand side of the screen, this is by the machine regarding your card. it seems like it would be totally boring the one on the left the humans wrote. hurry, ends december 31. the one on the right, guys, revenue, you know, ai-generated unique clicks, 24% what does it mean that the machines can do this better than humans can >> they say it has a 41% conversion uplift here more than 250 top companies have signed on to this. expedia, staples, stubhub among

others but -- here's the thing. one, if your computer writes better copy it mean ourselves advertising departments across this country are not doing a very good job teaching how to write creative, compelling copy. two, the machines will take over once they realize that the humans are inefficient and these are algorithms designed to destroy inefficiencies, there we go what's the biggest inefficiency in copywriting humans president trump saying an additional 10% tariff on china will go into effect on september 1 on the remaining $300 billion worth of goods that had not yet been tariffed. the markets with the exception of the nasdaq have turned negative on this the dow up more than 300 points at the highs patrick, we were just speaking about whether a move like this was likely what do you make of it

>> well, we were the good news is there wasn't an escalation and that the president held off in large effect -- in large part because of the pushback from business and from the markets whenever he proposed doing something like this >> right >> so this is something that markets and businesses across the united states have been worried about happening for some time >> so the interesting thing is the president even describes this as a, quote, small additional tariff of 10% when the first 10% tariff went in about a year ago, there was not a massive response it was when that tariff was ratcheted up that we saw the market reaction. we're seeing the market reaction today but can the president be right this is just a small move? can the companies absorb this and shake it off or are we going to see another spiraling of uncertainty show up in the u.s. data >> no, it's not a small move and the reason why is because the initial tariffs were targeted to goods that would not

have -- have a minimal impact on the u.s. economy easily replaceable easily sourced from elsewhere. when you broaden that out to almost all chinese goods then the impact on the consumer, even if it's just 10% and 25%, it becomes a lot harder for companies to avoid you either have to absorb it or they have to pass it on. and so, yes, it's not as bad as their paying 25% tariff as he sometimes proposed but it's something that definitely hit a broader range of industries and have a bigger economic impact than those narrower tariff >> want to get back to eamo eamon javers at the white house with more news on how we got to this point this afternoon. >> just been talking to a white house official here inside the west wing getting context on how the day has unfolded for the president. remember those talks broke up in shanghai yesterday the president had a meeting i'm told by a white house official at 11:30 this morning with secretary mnuchin and robert lighthizer to discuss how the talks went obviously, this tweet comes after that meeting

so you can presume that the report to the president was the talks did not go quite as well as they ophoped and they needed stiffening of the spine on the u.s. side to show the chinese they do mean business going into that september negotiating session. interesting, though, as you've been flagging, this is just a 10% tariff as opposed to the 25% number that we've been talking about for the past number of months it may be and we're moving into the realm of speculation on my part it may be the president considered a range of tariff rates and settled on 10% as not as fully provocative as the 25% tariff would be. but nonetheless, intending to send a message here to the chinese side that they are serious about these negotiations and this gives a little bit more edge or bite to those negotiations that are coming up in september here in washington. >> it certainly does also stay with us if you can rick santelli is monitoring the action we were just discussing in bond yields and other asset classes in reaction to this.

rick, if the president wanted a weaker dollar, he finally got it >> well, i'll tell you what, kelly. everything has moved a whole lot more actually than the dollar. it's just a bit below unchanged but point taken. the real brunt of this actually has been taken by two-year note yields they were down 16 basis points at 1.71. now 1.73 only 14 basis points the irony here is we're getting some curve steepening back because this latest drop in two-years really was much bigger than the long end. looking at intra day 10 down 13 basis points at 1.87 it's coming back just a little bit. as you see going back to november of '16, kelly, we have room before we change that november comp because back in november '16, we ended up in the 1.70s. and 30-year bonds down 9, now down 8 going back to october of 2016 we wereingi earlier about

how 1.95 was significant boy, did you ever see it the minute it traded through, lots of stops. a lot of activity occurred but the yield curve has steepened just a little bit. right now it's sitting around 16, 17 yesterday at its worst levels around 12. last night and this morning hovering at 14 so we want to keep an eye on all the moving parts and, yes, the dollar is down by one-tenth of a cent but down to levels still up on the week. >> it's just astonishing 1.87%. want to make sure everybody caught that. that's the low in the 10-year u.s. treasury yield moments ago. >> let's recall yesterday's news conference with jerome powell where trade came up and he said trade is unusual they are sort of taking it as it comes. finding their way through this process and now with an additional 10%, the fed meets again next month and you wonder what the possibilities are now. >> you said it well earlier. if this hadn't come in the halo effect market reaction from the

fed yesterday, you wonder how much worse it would have felt. the dow down 131 points. almost 500-point swing from the highs earlier today. bob pisani has more on the floor of the nyse. >> we had such a nice narrative going this morning the ism was a little weaker than expected but still showing expansion. everyone said, hey, this is perfect because this increases the chance the fed might cut, and we were up nicely 25 basis points 25 points in the s&p and then we get this and the problem, i think the market has, is august is a really tough backdrop. big setup here we know it's a weak month. traditionally the weakest month. september is not very good either we know stocks are pricey. the s&p is up 20%. earnings are flat. the market is pricey right now so the risk is to the down side. we know there's a lot of uncertainty on the global economy, independent of tariffs and trade already. we've seen some weak numbers out of europe in the last couple of

days and finally, we have mr. powell saying, well, we're not sure whether it's going to be additional rate cuts or not. so the backdrop is very, very tough for the markets overall here if you look at the standard trade names, we saw the usual mess occur about 15minutes ago nike is a good example of a global trade stock nike dropped more than $1, if you put that up. that was in the '80s straight down right there. and the other usual suspects, any of the global industrials, caterpillar i saw just go by was 1. 1.28 132.33 before that you can see the usual suspects all down about 3% on average kelly? >> bob, thank you very much. mr. santelli, we'll give you the final word on all these moves. >> fed fund futures are roaring to the up side euro/dollar futures roaring to the up side. the more they rally, the more easing the market sees ahead so it's something to pay attention to is the response to

tariffs is swift in those markets. >> what does it say on september, rick? >> oh, i don't look at percentages, but september contract right now is up about four ticks and i look at more of the direction than the static that the than the snapshot of percentages. >> that's how you put the whole landscape together >> they do it 25 basis points in september. it's going up again. >> even higher from there. guys, thank you all. rial appreciate it n isto aadryhe stay with us (gentle music)

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president trump shocking the markets less than a half hour ago by announce iing he'll impoe 10% tariffs on $10 billion worth of imports from china. that included a lot of products. the dow has given that back then some we're down 180 points. about two third of o a percent the nasdaq which is up about 1.6% today is down nearly half a percent or 35 points we're watching interest rates closely. the ten-year yield plunged on

this so have yields across the rest of the curve 1.9% there it is 1.883 and finally some individual equity names most exposed, this new round, the lack of progress, caterpillar, walmart is down nearly 3% of the session. walmart has also reversed lower. there you can see it down a half a percent. coming up, we're going to speak with the governor of maryland. ♪♪ ♪♪ ♪♪

welcome back to the exchange dow's down about 170 points late in the session i'm joined by the governor of maryland larry hogan is is onset with me. the incoming chair of the national association of governors. man, we have a front row seat to the latest from the president this afternoon holy cow >> so i'm sitting in the green room getting ready the come in and talk about other things. crazy. >> it's not like you guys are particularly exposed, but for the governors in general, we talk b about the how the u.s. economy, parts are directly trade and tariff ela related what's the advice?

>> first of all, i think obviously the mashlgt's reacting quickly. it's been dropping like a rock since this tweet about 10% tariffs, but this has been in the discussion for a while now i can tell you just last week when i assumed control as chairman, we had five or six countries that kim and met was and they're kind of reaching out at a sub national level to say all of your states are impacted. your economies affect jobs in your states and we're concerned about washington and a we want to start developing those relationships with the governors of the states >> it makes sense. especially you've got some republicans and democratic ones. do you generally support his approach by using tariffs as a l tool to try to change china's behavior or hold them accountable? >> i think we need to get tough x fair deals with china and i'm not an expert on trade policy, but we've got to be careful and i understand the logic of kind of setting the expectations

before the negotiations take place. but look at the market reaction because of a tweet we got to be careful about how we message things. >> we were here talk iing about you guys have done some interesting stuff trying to help young people in their state pay off their, basically get money, thinking gee, if this thing keeps plunging, it might help people with affordability. >> student debt is huge in america. 1.6 trillion in debt it just surpassed credit card debt second only to mortgage debt those younger people are going to average of about $26,000 of student debt have a difficulty buying their first home so we came up with a program called smart buy where you're able the to roll in that student debt into the purchase of a first home we have foreclosed homes we're trying to do something with. you buy $200,000 home. that we're selling through the

maryland mortgage program that we're trying to get back on the market give people an opportunity up to 15% of the value of the home can be used to pay off. so you could pay off 30,000 in student loans. >> almost like you don't want it toob too successful. >> we've sold out of everything and have now expanded the program. it was a pilot, but it's working well >> thank you for joining me. thank you for commenting on the news thishogan that does it for the change. "power lunch" will take things over starting now. thank you very much and never, never a dull day. we begin this hour with breaking news a new shot fired in the trade war. president trump saying there will be an additional 10% of tariff on $300 billion of goods from china starting september 1. eamon javers has the latest. eamon. >> tyler, i'm told the president's recent tweet here announcing this increase in tariffs on china came in the wa