BRILLIANT.
APPRECIATE YOUR INSIGHT.
DAVID: BRILLIANT IS THE WORD.
MEANWHILE WE WANT TO SHIFT GEARS
A LITTLE BIT.
THE MARKET SELLOFF COMING 26
DAYS BEFORE THE MIDTERM
ELECTIONS, WHAT IMPACT WILL IT
HAVE IF ANY ON THE ELECTIONS?
LET'S BRING BACK OUR PANEL.
PETER, THE MAIN QUESTION, THIS
MARKET CORRECTION, IF WE CALL IT
THAT, IT MAY BE A LITTLE SHORT
OF A CORRECTION WITH SOME
INDEXES IS IT THAT GOING TO
SPILL OVER AS LIZ ANN SONDERS
WAS SUGGESTING IT MIGHT INTO THE
ECONOMY?
>> ONLY IF WE KEEP TUMBLING
DOWN.
IF WE LEVEL OFF AND START TO
RECOVER I DON'T THINK IT WILL
HAVE MUCH CONSEQUENCE.
THE ECONOMY IS NOT DOING THE
REPUBLICANS MUCH GOOD.
THEY HAVE NOT HAD GOOD MESSAGING
ON THIS AND THIS ELECTION --
DAVID: I DON'T KNOW, I'VE BEEN
TO THOSE, I'VE SEEN THOSE
RALLIES THAT THE PRESIDENT IS
ALWAYS TOUTING THE ECONOMY.
FRANKLY HE GETS INVOLVED IN TOO
MANY OTHER THINGS.
OTHER INVESTIGATIONS BUT HE DOES
TOUT ECONOMY AT ALL OF THEM.
>> IF YOU COLLECT MY STUDENTS
TOGETHER AND THEY WILL TELL YOU
I'M BRILLIANT.
BARACK OBAMA DID IT.
DAVID: YOU ARE BRILLIANT.
YOUR STUDENTS ARE RIGHT.
GO AHEAD.
>> BARACK OBAMA DID IT.
DONALD TRUMP DOES IT.
THEY LIKE TO SPEAK TO GYMNASIUMS
FULL OF TRUE BELIEVERS.
THE BIG QUESTION DOES IT
INFLUENCE SWING VOTERS.
DAVID: THIS IS 2016.
>> THIS IS NOT 2016.
THIS IS THIS 2018 THIS IS FOUGHT
OUT IN SUBURBS OF PENNSYLVANIA,
NEW YORK, CALIFORNIA.
THEY'RE IN TROUBLE IN THE HOUSE,
SUBURBAN DISTRICTS WHERE A LOT
WOMEN SHIFT TO THE DEMOCRATIC
SIDE.
SOCIAL ISSUES MATTER.
ABORTION, HEALTH CARE IS REALLY
BIG ISSUE.
THE DEMOCRATS ARE OUTSPENDING
HEALTH CARE TWO TO ONE ON ADS
BECAUSE IT HAS TRACTION.
DAVID: ADAM, THEY'RE NOT TALKING
A LOT ABOUT THE ECONOMY, THEY
HAVEN'T BEEN, DEMOCRATS UP UNTIL
NOW BECAUSE THEY KNEW THE
ECONOMIC FUNDAMENTALS WERE VERY
STRONG.
OTHER THAN MEDICAL CARE, OTHER
THAN GETTING BACK TO THE OLD
OBAMACARE ARGUMENTS, THEY HAVE
BEEN AVOIDING THE ECONOMY.
I'M WONDERING NOW, BECAUSE OF
WHAT'S HAPPENING WITH THE MARKET
THEY MAY GET INTO IT?
>> DEMOCRATS WERE TRYING HARD TO
TALK ABOUT TARIFFS, WORSEN WITH
CHINA --
DAVID: FRANKLY A LOT OF
DEMOCRATS WERE WITH THE
PRESIDENT ON TARIFF ISSUE.
>> SOME, I AGREE.
I'M HAPPY FOR THIS OPPORTUNITY
TO SAY I AGREE 100% WHAT PETER
SAID.
DAVID: I THOUGHT YOU MIGHT.
>> A MOMENT AGO.
HE IS RIGHT ABOUT THIS.
THE ECONOMY WAS IN A MULTIYEAR
EXPANSION IN 2016 AND IT DIDN'T
MATTER.
I DON'T THINK THE SWING TRUMP
VOTERS ARE THAT TUNED INTO THE
STOCK MARKET ANYMORE THEY WERE
DUE TO THE FACT WE HAD LOW
UNEMPLOYMENT AT END OF THE OBAMA
ADMINISTRATION.
THEY'RE FOCUSED ON OTHER ISSUES,
NOT THE STOCK MARKET.
DAVID: THE FACT IS, KEITH, AS
PRESIDENT POINTED OUT MANY
TIMES, ECONOMISTS CERTAINLY
HAVE, WE WERE IN STABLE STATE
THE GROWTH THAT WAS UNDER 2% FOR
A LOT OF THE YEARS, IT REALLY
WASN'T GETTING -- THERE IS OLD
EXPRESSION IN ECONOMICS, IF
YOU'RE COASTING YOU'RE GOING
DOWNHILL.
WE WERE COASTING AND POLITICALLY
THAT WAS DOWNHILL.
THAT IS ONE REASON WHY THE
PRESIDENT WAS GETTING SO MUCH
JUICE BECAUSE OF THE ECONOMY,
BECAUSE OF HIS BUSINESS APPROACH
TO THE ECONOMY, WHICH WE HADN'T
BEEN SEEING FROM THE OBAMA
ADMINISTRATION.
>> WELL, I THINK YOU'RE SPOT ON.
PEOPLE HISTORICALLY VOTED NOT
BECAUSE OF THEIR WALLET BUT
BECAUSE OF PERCEIVED IMPACT OF
THE ELECTION ON THEIR WALLET.
IT IS A SUBTLE DIFFERENCE I
THINK TIME AROUND IN 2018 WILL
PLAY SIGNIFICANT ROLE.
PARTICULARLY WITH UNEMPLOYMENT
AND JOB SITUATION AND
COMPOSITION WHO IS WORKING
CHANGING WAY IT IS.
I THINK IT WILL HAVE MATERIAL
IMPACT HOW THE ELECTION PLAYS
OUT.
DAVID: VERONICA, ON OTHER HAND,
MARKETS ARE GREAT PREDICTORS OF
THE FUTURE, UNLESS THIS IS A
BLIP, THIS MAY A BLIP OVER A
LONG-TERM, HARDLY NOTICED AS WE
NOTE THE CHART GOING UP AND UP.
FIT IS MORE THAN A BLIP.
IF IT'S A PREDICTOR OF SOMETHING
THAT WILL SPILL OVER THE ECONOMY
WILL IT HAPPEN BEFORE THE
ELECTIONS?
>> THAT'S A A GOOD QUESTION.
I WISH I KNEW THE ANSWER TO
THAT.
WHAT I DO KNOW PRETTY SURE WE'LL
SEE MORE VOLATILITY INTO THE
ELECTION.
THAT IS ONE THING EVERYONE CAN
AGREE ON, MIDTERMS, UNCERTAINTY
IT BRINGS COULD BRING MORE
UNCERTAINTY IN THE MARKET, MORE
UPS AND DOWNS, ESPECIALLY, THAT
TIME LEADING UP IS PRETTY
VOLATILE TIME.
THAT IS NOTHING NEW.
WE'VE SEEN THAT BEFORE.
DAVID: PETER, ONE THING VOTERS
ARE SEEING, FOLKS WITH 401(k)
ARE SEEING VALUE OF THEIR
401(k) GO DOWN RATHER
DRAMATICALLY THIS WEEK BUT, FOR
EXAMPLE, WILL THERE BE SOME JOB
SPILLOVER AS A RESULT OF WHAT WE
ARE SEEING IN THE MARKET BEFORE
THE ELECTION?
>> NO, I DON'T THINK SO.
WE CONTINUE TO CREATE JOBS AND
MORE IMPORTANTLY BUSINESSES ARE
DEVOTING A LOT OF THEIR TAX CUT
MONEY TO TRAINING.
THAT IS HOW WE'RE GETTING THE
KIND OF PRODUCTIVITY GROWTH
WE'RE GETTING.
ECONOMY WILL ADVANCE 3% A YEAR
WHICH IS APPRECIABLY BETTER THAN
MR. OBAMA ACCOMPLISHED.
THAT'S WONDERFUL, HOWEVER,
FAIRNESS ISSUE THAT NO ONE
MENTIONED.
WATCH THE DEMOCRATS SHIFT TO THE
FAIRNESS ISSUE IN THE FINAL
WEEKS OF THE CAMPAIGN.
THAT IS WHERE THEY BEGAN.
THAT IS WHERE THEY WILL END.
DAVID: EXACTLY.
KEITH, THE BOTTOM LINE THOUGH,
IS CORPORATE PROFITS THAT
AFFECTS MARKETS MORE THAN
ANYTHING ELSE.
ARE WE SEEING A DISAPPOINTMENT
ON THE CORPORATE PROFITS FRONT
WHEN EARNINGS BEGIN TO COME IN?
>> I DON'T THINK WE'RE GOING TO.
I THINK NUMBERS I'M PROJECTING
18 1/2, 19 1/2%.
I THINK THAT CONSOLIDATES AS WE
GET SOME OF THE EARNINGS.
TELL YOU WHAT, GOD HELP ANY
COMPANY THAT DOESN'T MEET OR
LOWER GUIDANCE.
MARKET WILL SEPARATE.
WE'LL SEE COMPANIES THAT MATTER
AND COMPANIES DON'T.
ANYBODY WHO DIDN'T --
DAVID: ADAM, DO YOU AGREE ON
TECH FRONT THERE.
>> SURE.
THESE ARE HIGHLY VALUED COMPANY