RICK, THANK YOU VERY, VERY MUCH,
RICK REICHMUTH.
SO BAD, COULD GET WORSE THE
WE'LL KEEP AN EYE ON THE STORM.
KEEPING AN EYE ON WHAT COULD BE
A POLITICAL ECONOMIC STORM.
JOHN ROBERTS, WHITE HOUSE
THE GREEN LIGHT TO GO AHEAD WITH
SANCTIONS ON ADDITIONAL
$200 BILLION WORTH OF CHINESE
GOODS.
THIS WAS TELEGRAPHED FOR SOME
TIME.
BLOOMBERG MENTIONED THIS REPORT,
THAT THE ADMINISTRATION
SERIOUSLY CONSIDERING IT.
WORD IT COULD BE IMMINENT.
WE JUST DON'T KNOW WHEN IT WILL
HAPPEN.
THE EFFECT ON THE MARKET WAS
QUITE CLEAR.
WE WERE UP.
NOW WE'RE DOWN 50 POINTS.
WE WERE UP 70 POINTS.
NUVEEN ASSET MANAGEMENT CHIEF
EQUITY STRATEGIST BOB DOLL.
HEADLINES OR FLASHES BEFORE WE
HAD THINGS LIKE FLASHES LIKE
THIS BUT IS IT YOUR SENSE IF THE
PRESIDENT WERE TO IMPOSE
ADDITIONAL TARIFFS ON THE
CHINESE, THIS COULD HINT OF A
PROLONGED TRADE BATTLE, AND THAT
THE MARKET WAS NOT LIKE?
>> EXACTLY RIGHT.
LIKE, NEIL.
LOOKS LIKE MEXICO IN PRINCIPLE,
MAYBE CANADA AGREEMENT IN
PRINCIPLE, EUROPE.
THE PRESIDENT CALLS PRESIDENT
XI, OKAY IT IS YOUR TURN.
WE'LL SEE.
THIS COULD BE PROLONGED.
IT IS PRETTY CLEAR THE CHINESE
DON'T WANT TO COME TO THE TABLE
IN ANY SERIOUS WAY PRIOR TO THE
ELECTION.
AFTER THAT WE'LL SEE.
BUT THIS IS GOING TO LAST FOR A
WHILE, NEIL, AND MARKETS DON'T
DAYS AGO THE PRESIDENT SOME SAID
BLINKED ON THIS, YOU KNOW, I
WANT TO REINITIATE, START THE
DIDN'T COMMIT NECESSARILY TO A
TIME AND A PLACE.
THEN LO AND BEHOLD THIS MOVE.
WHAT IS GOING ON, DO YOU KNOW?
>> HARD TO SAY.
THERE ARE SOME CROSSCURRENTS.
AS YOU WELL KNOW, NEIL,
DIFFERENT WORDS ARE COMING FROM
DIFFERENT PEOPLE IN THE
ADMINISTRATION.
NEIL: RIGHT, RIGHT.
>> THEREFORE IT IS VERY
DIFFICULT TO FERRET ALL OF THIS
ADMINISTRATION WOULD LIKE TO
HAVE A CONVERSATION WITH CHINA,
AND PROBABLY VICE VERSA, BUT IF
THE CROSSCURRENTS ARE, I WILL
TODAY.
THANK GOODNESS WE HAVE THESE
PHENOMENAL EARNINGS THAT ARE
KEEPING THE MARKET FROM GOING
DOWN BECAUSE OF THIS TRADE AND
TARIFF PROBLEM.
NEIL: YOU KNOW YOU AND I
DISCUSSED THIS BEFORE, BOB, ONE
OF MY MANY CRACKPOT THEORIES ON
TRADE BACK AND FORTH, THE
WILL PREVAIL AND WE WON'T GET
INTO A FULL-BLOWN TRADE WAR THAT
COULD DISRUPT MORE THAN MARKETS,
WHAT DO YOU MAKE OF THAT?
>> I DON'T THINK THAT IS SUCH A
CRACKPOT THEORY.
I THINK THAT'S REASONABLE.
TRIED OVER THE YEARS AND SO FAR
DIFFERENT.
WE CAN LIKE IT, WE CAN DISLIKE
IT BUT HE IS ALSO A MAN THAT
DOESN'T WANT TO SINK THE ECONOMY
AND SINK HIS POLITICAL WILL AND
THEREFORE I THINK COOLER HEADS
WILL PREVAIL BUT MAKE NO MISTAKE
ABOUT IT, HE IS SERIOUS ABOUT
TO STOP STEALING IT FROM US.
NEIL: LET'S TALK A LITTLE BIT
ABOUT THE MARKETS, WHERE THEY
STAND RIGHT NOW.
YOU KNOW, THEY'RE UNDENIABLY
STRONG.
FEELING SEEMS TO BE ABSENT A
TRADE WAR, THEY WILL GET EVEN
STRONGER, THAT THEY'RE NOT
NECESSARILY VERY RICH, IF YOU
LOOK AT THE LOWER TAX RATES AND
EVERYTHING ELSE?
WHERE DO YOU STAND ON THAT WHOLE
THING?
>> LOOK, THE BULL MARKET IS NOT
OVER.
THAT IS CLEAR BECAUSE THE
MORE TO GO BUT EASY MONEY IS
STILL IN THE REAR VIEW MIRROR
NEIL.
I THINK PE, VALUATION OF THE
STOCK MARKET PEAKED IN JANUARY.
NOW IT IS ALL ABOUT EARNINGS.
IF WE HAVE GOOD EARNINGS, STOCKS
CAN GO UP.
BUT PROBABLY NOT AS MUCH AS
EARNINGS.
THINK ABOUT IT THIS YEAR.
EARNINGS UP 25%.
STOCK MARKET IS UP 10%.
THEREFORE PEs ARE DOWN 15%.
NEIL: THAT IS AN INTERESTING WAY
ON THE STRENGTH OF THIS MARKET
AND INTEREST RATES IN THE FACE
WE'VE SEEN SOME INFLATION DATA
BOTH ON THE RETAIL AND THE
WHOLESALE SIDE THAT HAS BEEN
>> IT COULD.
LOOK, NEIL, WE'RE THIS FAR INTO
THE ECONOMIC CYCLE.
NEIL: YEAH.
>> THE ECONOMIC GROWTH IS AS
STRONG AS IT IS, AND WE HAVE NOT
MUCH INFLATION IS A MIRACLE.
IT IS REALLY GOOD NEWS.
INFLATION IS PICKING UP BUT AT A
FED WILL TAKE ITS TIME.
NEIL: IT'S A WILD CARD, MY FINAL
QUESTION, EVEN THOUGH I SAID
THAT LAST ONE IS FINAL QUESTION,
THE MUELLER INVESTIGATION WHERE
WITH THE GOVERNMENT, IS THAT
JUST A OUTSIDE DEVELOPMENT?
YOU CAN'T MAKE OUT HOW IT IS
GOING TO GO BUT IT'S A BIG
UNCERTAINTY, RIGHT?
>> IT'S A BIG UNCERTAINTY.
LOOK, I HATE TO MAKE WASHINGTON,
D.C. UNIMPORTANT BUT AS LONG AS
THE ECONOMY CON AND EARNINGS ARE
GOOD, WASHINGTON, D.C., IS DOWN
IN THE TERMS OF IMPORTANCE.
WE'LL WATCH IT.
IT WILL GET A LOT OF HEADLINES.
MARKETS MIGHT NOT LIKE IT A
MINUTE OR TWO IF SOMETHING
UNTOWARD DEVELOPS BUT EARNINGS