YESTERDAY WHEN WE LOST ABOUT
300 POINTS.
WHAT IS THE PRESIDENT SAYING?
FIRST TO WHAT THE PRESIDENT IS
SAYING AND EFFECT ON THE
MARKETS, "WALL STREET JOURNAL"
ASSOCIATE EDITOR JOE BUSSEY,
MARKET WATCHER AND FOX
BUSINESS' DEIRDRE BOLTON.
JOE, TO YOU AND YOUR SENSE OF
WHAT YOU'RE SEEING FROM THE
PRESIDENT THAT, I'M NOT
BLINKING ON THIS, I'M NOT
GIVING GROUND ON, THIS IT'S UP
TO THE CHINESE.
AND HE SEEMS TO BELIEVE HE'S
COMING FROM A POSITION OF
STRENGTH, AND THAT IT'S GOING
TO GO HIS WAY.
WHAT'S YOUR SENSE OF THIS?
>> I THINK THESE ARE
NEGOTIATION TACTICS.
I'D RATHER FOCUS ON WHAT AREAS
IS GOING TO HELP IF THERE ARE
TARIFFS.
SPECIFICALLY AS A MARKET
WATCHER, SEEING IT IN SMALL
CAPS AND THE RUSSELL 2000.
NEIL: THEY ARE NOT AS
VULNERABLE.
>> DOMESTIC COMPANIES ARE NOT
AS VULNERABLE TO TARIFF TALK.
NUMBER TWO, ACCELERATED
EARNINGS NOT AFFECTED BY THE
STRONG DOLLAR AND THE BENEFIT
OF THE CORPORATE TAX CUTS WHICH
WILL TAKE A FEW QUARTERS TO
KICK IN, YOU WILL SEE IT IN THE
STRENGTH OF THE RUSSELL 2000
VERSUS THE CASE OF THE S&P IF
THE TARIFFS GO THROUGH.
NEIL: THERE IS A WEIRD,
CONSISTENT PATTERN TO THIS,
ISN'T THERE, DEIRDRE, THE
MARKETS LOOK LIKE THEY'RE
UPPING THE ANTE, THEY TANK.
IT'S A SHORT-LIVED TANK.
NOT SURE WHAT IT WILL BE IN
THREE HOURS HERE.
ONE DAY IT HIT, SOMETIMES TWO
DAYS, THE ASIAN MARKETS PLAY
OUT THE SAME, MORE MAGNIFIED.
WHAT DO YOU MAKE OF THAT?
THE MARKETS TRUST COOLER HEADS
PREVAIL OR THINK THE PRESIDENT
IS RIGHT OR WHAT?
>> I DO THINK I'M GOING TO
AGREE WITH JOE.
THAT'S CERTAINLY WHAT WE HEARD
FROM LLOYD BLANKFEIN AND
GOLDMAN SACHS, ALL OF THE
MUSCLE IS PART OF THE
NEGOTIATION TACTIC.
COMPARED WHAT HAPPENED WITH
TRADE TO NORTH KOREA WITH
PRESIDENT TRUMP SAYING IT'S A
LOT OF BLUSTER.
IT'S PART OF HIS PROCESS.
NEIL: IT WASN'T ENDORSEING.
>> HE WAS NOT ENDORSING.
NEIL: IT'S PART OF THE PROCESS.
>> HE SEEMS TO BE A LITTLE MORE
PHILOSOPHICAL, DAVID SOLOMON
ALSO OF GOLDMAN SAYING IT'S
FINE, AT SOME POINT, THE TRADE
TENSIONS AFFECT CLIENTS BOTH IN
CHINA AND THE U.S.
THEY AFFECT INVESTMENTS, AND SO
AT SOME POINT THERE WILL BE A
LONGER TERM EFFECT, BUT FOR THE
MOMENT, A LOT OF THESE COOLER
HEADS THINK WE'RE NOT THERE YET
AND SEEM TO ACCEPT THIS IS PART
OF THE PROCESS, BUT THAT
DOESN'T MEAN WE'RE GOING TO SEE
THE 300-POINT SELL-OFFS IN THE
DOW WHEN PRESIDENT TRUMP
INSTEAD OF TALKING ABOUT $50
BILLION WORTH OF TARIFFS TALKED
ABOUT 200 BILLION.
THE MARKETS SOLD OFF.
>> AND ANOTHER 200 BILLION,
JOHN, IF THE CHINESE THINK
ABOUT MATCHING THAT 200
BILLION.
BUT WHERE DO YOU SEE THIS
GOING?
>> FASTEN YOUR SEAT BELTS.
WE'RE AT BEGINNING OF THIS AND
THE GAUNTLET TOSSED DOWN.
HE'S TALKING ABOUT 10% OF 400
BILLION IN CHINESE EXPORTS.
NEIL: VIRTUALLY THE ENTIRE
SURPLUS, RIGHT?
>> THAT'S RIGHT.
A LITTLE MORE THAN.
SO I THINK AT THE BEGINNING OF
THIS, THERE ARE NO TALK GOING
ON.
IT'S NOT AS IF THERE ARE TALKS
TO SOLVE THESE ISSUES, YOU
KNOW, UNDER WAY.
THERE'S POSITIONING.
LIKE TWO SUMO WRESTLERS AT THIS
POINT IN THE RING TRYING TO GET
ADVANTAGE ON THE NEXT.
THAT COULD HAVE UNTOLD EFFECTS
ON MARKETS.
WE JUST DON'T KNOW YET.
IF CHINA DOES IN FACT CRIMP
BACK IMPORTS OF WHATEVER
PRODUCT YOU WANT TO CHOOSE,
AGRICULTURAL OR INDUSTRIAL, WE
DON'T KNOW, THAT WILL BE THE
PRODUCER.
AND WE DON'T KNOW THE
STANDPOINT OF DECISIONS BEING
MADE NOT JUST ON TARIFFS.
MIND YOU, THE PRESIDENT IS
LISTENING TO HARD-LINERS IN THE
ADMINISTRATION.
PETER NAVARRO AND OTHERS, JUNE
30th THE OTHER ISSUE THAT U.S.
WILL ANNOUNCE RULES IN CHINESE
TECHNOLOGY IN THE CHINESE
TECHNOLOGY ZONE BECAUSE WE FEEL
THEY ARE STEALING OUR TECH.
NEIL: IS THERE A SENSE THAT HE
IS MAKING PROGRESS IN THIS
REGARD.
I'M SWITCHING TO EUROPE AND
PROMISE ON THE PART OF SOME OF
THE GERMAN AUTO MANUFACTURERS
TO DRAMATICALLY CUT TARIFFS FOR
AMERICAN CARS THAT COME.
IN A NUMBER OF HOPES THAT GO
THROUGH APPROVAL IN GERMANY,
APPROVAL THROUGH THE EUROPEAN
UNION, BUT THEY'RE ALREADY, I
WOULDN'T SAY BLINKING BUT
SHIFTING.
>> YEAH, PART OF THE
NEGOTIATION DECK.
JOHN MAY BE RIGHT, THIS COULD
BE JUST THE BEGINNING, I ALWAYS
MARKET'S REACTION TO THE NEWS.
THERE'S A LOT OF HEADLINES
WHERE THERE IS A QUICK
KNEE-JERK REACTION.
THAT'S THE MARKETS FOR NOW
TELLING YOU THIS MAY NOT BE
THAT BIG OF A DEAL.
AT THE END OF THE DAY, EARNINGS
AND INTEREST RATES CONTROL THE
MARKETS.
INTEREST RATES ARE LOW AND
EARNINGS ARE ACCELERATEING.
>> HERE'S A REASON IT IS, A
SLIGHTER BIGGER DEAL WITH CHINA
AS OPPOSED TO EUROPE BECAUSE IN
CHINA WHAT THEY WANT IS
SYSTEMIC CHANGE IN THE MANNER
IN WHICH CHINA CONDUCTS ITSELF
IN THE INTERNATIONAL TRADING
DEPARTMENT.
LOWER SUBSIDIES OR NO SUBSIDIES
FROM THE GOVERNMENT.
NOT SWIPING THROUGH
CYBERESPIONAGE SECRETS.
NO FORCE TRANSFER OF U.S.
TECHNOLOGY TO AS THE TICKET END
OF THE GAME OF CHINA.
THOSE ARE BIG DECISIONS THEY'RE
ASKING OF CHINA.
NOT JUST SAYING LOWER TARIFFS,
THEY'RE SAYING CHANGE YOUR
ECONOMY.
NEIL: THEY WOULD BE GRATEFUL IF
THEY GOT A FRACTION OF THAT,
DON'T YOU THINK?
>> IF YOU LISTEN TO PETER
NAVARRO AND OTHERS, THEY'RE
SAYING IT'S BEEN A LONG TIME
COMING AND WE'RE IN THIS FOR
THE LONG GAME IS THEIR
ARGUMENT.
NEIL: BATTLE THROUGH THE END,