tv Maria Bartiromos Wall Street FOX Business July 12, 2019 9:00pm-9:30pm EDT
watch me every weekday at 5:00 p.m. eastern time and i host a show called bol "bulls & bears" and we have a lot of fun and you will too if you watch. have a wonderful weekend. wall street begins right now. from the fox studio in new york studio. >> havhappy we can. weekend. coming up in a few moments, mike murphy is with us. to look at what a week it was and rick rader is here and he will join me too talk interest rates that brought our economy after huge week. first bad news and good news on wall street this week. the market saw a record broadly after federal reserve chairman interest rate cut could be coming soon to the growing
concern about the economy and manufacturing and housing. the dow and s&p hit all-time highs this week and the dow industrials cracking the 27000 mark for the first time and staying there. joining me now is mike murphy. >> happy to be here. >> the first of the week we had a little said in ecb, give me your take away from the week. >> i think people are really helping that the fed will be accommodated. but the backdrop or is the market right now can support higher level without the fed. but if the fed comes in and gives us a rate cut on top of the economy that we have. you can call it was to the stock market and some people would say. it will give us new highs in the market. if we hit a rate cut in the market reacts negatively because maybe it looks like the federal reserve know something with that we don't.
were out of 50 when you're low on a payment per wave growth of 3.1% certainly in the first corner. here we are on the doorstep of the second quarter earnings. not expected to be great, expected to be down actually. but why cut rates now we have such a great performance in the economy. >> 's i don't know. i don't think we need a rate cut. there's nothing out there that tells me we need a rate cut. in a big macro picture, you want to have the president for the trade war with china. he wants to have the arrow in his quiver to be able to compete at the negotiating table with china. that is the one thing i would say. if you are judging it based on the economy on its own there is no reason for rate cut. >> things are going well. we'll see what happens with the international market. that is one thing the chairman said, jay powell, we are seeing weakness in global market and housing and manufacturing. yet you still have a very good performance. do you think markets react negatively if we see a rate cut?
the next meeting is the end of this month in july. >> the markets will not only act negatively they will ask very positively. lower rates are going to be good for the market. if you can get that on a broader picture where things are not that negative here in the u.s. and you have a rate cut. it gives you new highs in the market. >> you're a venture capital investor, finding great growth across economy. >> we are seeing growth across all sectors. syntax, consumer tech and it really goes back to where people are brilliant young people starting businesses in this country today because they see in opportunity to change the way they seaweed the parade make our lives for the better. that is happening in their getting funded and then you see ipos coming in warmer evil making money from it. it's a great time to be in this country and investing. >> you been investing for a long time. i know in terms of a space, is that in terms where you see money going to artificial meats?
>> if you look at a bigger picture wellness, one thing you can say for certain, today in 2019 people see working out and eating healthy and living healthy and living longer, that is not a fad, that is not something that the jane's honda days, we are never going back there. people want to be healthy for their bodies and if there's a healthy way to have a meat substitute that is healthier for you that can be replicated without having to kill animals, that is really right is a canadian with people in 2019. >> there is so much growth happy. and that is what the federal reserve is talking about. any thoughts on what we heard in terms of more stimulus coming to europe? europe has been hard-pressed to generate any growth. >> when i was at europe i look at it from a standpoint of europe versus the united states. if you look at her growth picture from the u.s. under president trump versus the european growth picture. it is night and day.
i think you can argue, they do need stimulants and they need something to provide them with growth. but when you compare with the u.s. is doing in a global soda with the u.s. economy has been able to do, i would ask the question, what if they get it right in europe. what if they turn around and because it starts to grow. what does that do for us in the united states when you have a growing global macro picture? europe needs it, they've a lot that they need to figure out from brexit to getting -- they need stimulus to get them going. but the united states, when you look at it versus europe what makes us look that much better. >> is a harder argument in the united states. the next meeting is at the end of july. we are going to get the purchasing manager index at the end of july. that is when we first started understanding that we have weakness in the economy. that is going to be something
that will likely move market as the pni. >> when you drill down, you can find strengths and weaknesses. but not that long ago we talked about never getting back to 3% gdp growth in the united states. and we talked about when jobs are being created under the trump presidency and you talk about wages were not increasing fast enough. now were getting wage growth. we can always find -- it's not going to be perfect at all times but when you look at the u.s. economy from a standpoint of jobs and wages people are in a better position today than they have been in a really long time. >> mike great to see you.
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>> welcome back it was a big week for stocks. while the market loves the news of the rate cut coming up. what could the long-term effects of a copy on wall street in the market. joining me now is blackrock global chief investment officer for income and beyond rick reeder is here. he is also leeper polio manager for global allocation and strategic income funds. he oversees $2.1 trillion of assets under management. the largest asset manager and we are honored to have you on the phone. >> thank you very much. >> take is to much for joining us and congrats on more work. >> first assess the week for us. we heard a little jay powell, the fed, the minutes there.
what was your reaction ? >> it was a huge week. i think the last two weeks were pretty big. he think about after the trade agreement, after that then you had powell, the ecd and the christine the gardners is a very big piece of news. atticus would be more aggressive going forward and markets have started to react to that. by the way the cpi report, we don't think inflation is moving a higher but it's nice to see that now there is a bit of pricing power that companies for the equity market have a bit more inflation. the fed is going to keep moving because they're worried about global growth. companies have pricing power in nursing used cars are bit better, apparel is a bit better. it is pretty good news. if you take the last two weeks, pretty good develop for the market. >> it really has been. let me take one by one. the christine news, coming from the ims, the presence of the ecb, how is she going to differ
from very you groggy. christine has been very clear about the ecb and it needs to be aggressive of making sure rates a lower if not lower and uses many tools as possible to do. i think the ecb is going to be doing christine will guard from the iec. and they talk about this. i think you will see -- the world thanks you're gonna cut rates, rates early negative. this is good statistics that negative rates are going were negative does not create more of a loss. what are the other tools that use. i think you'll see new tools like how you make equity investment partnering with regional government to get investment in the right places and also you can get growth in aggregate demand. maria: you think the ebc is going to buy equity ?
>> ideal i think it's a bigger deal. a bunch of the big companies and equity of six, seven, 8% are borrowing at 0 or negative. i have never seen anything like that. this is a big regional populist and economy. now what can you do to try to normalize that it's a bus i took the pressure of the banks and let rates move a little bit higher and make equity investment to create aggregate demand. if you think about how china is going if you talk about how china i it creates aggregate demand. in all this and you get pricing power in the economy starts to go. if you do not do that then europe becomes a sluggish number graphically challenged economy.. maria: as it is right now.
two years, when everybody was talking about the higher interest rate, no, no, the fed are going to be cutting interest rates. the first person to say that, let's talk to them for second period you expect a rate cut in two weeks ? >> yes. the odds are 90 to 95%. >> i thought the economy is doing so well. >> the economy is doing really well. i think people underestimate prejob u.s. economy that grew in the first quarter of a traffic growth paradigm. we still haven't seen over two for the balance issue. you can have a lower equilibrium rate and interest rates. he said yesterday maybe we were a little tight. we thought we were washed her. and he made a very important. growth does not mean inflation. it is really important. it does not necessarily in a new economy where you talk about trace paternity and amazon because you grow faster, it does not lead to greater pricing power. so you can operate, you have to
operate in a global economy. he keeps talking about global growth is slow. let's say he said we will not cut rates, the u.s. dollar would appreciate if you put pressure on emerging markets and the rest of the world in the u.s., if you dropped interest rates 25, i think you can go 50 basis point and i don't think that is out of the question in a couple of weeks. what happens is you keep the dollar contained which is hugely important for the u.s. economy. i think it's a really big dprk . by the way there is no pressure on inflation prayed if you get a little bit for the first time this week. >> we will have to watch. >> we are so far below two. let's say we rented to incorporate who cares. as long as you have economy operating well it is a tumor world, we talk about on your show a lot prayed when you have a manufacturing economy, goods,
chemicals, energy. increase inflation and then you have to break that. when you have an economy with technology driving it, you don't create the inflation. the fed does not need to be worried, drop the equilibrium rate and let the economy thrive. >> i want to ask you about investing. let's take a short break. we come back we have more backlash. he will talk to us about the big trends in the second half of the year end how to invest what you just heard. stick with us >> what would a trade deal mean for the u.s. economy. >> it's a big deal. more with maria's one-on-one with rick reeder when wall street returns. ♪
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maria: and we are back with rick reeder. $1 trillion in amm, you are overseeing this money. you just told me about the fed and the ecb. tell me about income inequity and what you want to do for the rest of there. >> it is something really important. i don't think you will make a lot of money of interest rates for the balance of this year. i think that will still cut rates. but when you build a balance to extend your percolate. the two-year treasury getting it close to 2% in a balanced portfolio? you can now at 2.15 on a tenure. it's not bad with negative rates. it helps you within the broad portfolio. quite wrinkly i think equities
will go higher and i think you have a dynamic that shipping what drives equities higher? i think the world focuses too much accordingly earnings and by the way i think people have into negative and there will be bad reports. it is the risk-free rate of treasures. they will be stable. and then the multiple, the p multiple -- if interest rates -- you will not realize there is not enough income in the world today, the demographic paradigm in the world today is not like the 80s and 90s were accreting so much income human asian population and asian economy predict to get financial assets when all the interest rates go away you need equities. that's why you see people -- why
does somebody save stocks and whether they do so well. people need the income. it will push the market higher. maria: you're not worried earnings might just be okay. and it's a negative showing for us. and for the second quarter in the third quarter is even supposed to be black but the fourth quarter is apostasy strength. what about that. the earning. is this upcoming week. major thanks reporting. can you tell us what you're expecting customer. >> the most impor important this watching margins. industrials top-ranked revenue is really hard to grow. the main infection industry which i think people overstate what is a pmi report going to come operate the economy is 70% services today. the industrials are going to have a tougher go and what is happening to margins in the input cost, i will watch the
industrial. maria: those of the companies that will get impacted by trade war and tariffs. >> recently you've had to pull back if you're not sure what you dynamic will look like in supply chain will look like. that data will be interesting, broader, healthcare, technology, some financial services, how will those businesses operate. in my sense is the world has written down a lot of what could be negative surprised in the earning cycle. i think you will see decent numbers. and one thing in terms of investing markets. whenever buddy gets negative on something it's only time used was to be putting money in the market. people are negative about it. maria: do you care, will it have a big impact if the u.s. does not do a deal with china? >> i think it's a biggie. if you laid out one of the biggest bills in geopolitical, trade, china is close to 40% global lot and global trade. it's really big there. in supply chains. huawei news is usually importa
important. technology supply chains. it is a very, very big to. and as long as there is some form of reasonable operating agreement and your seen some of that today. i think it is very, very important. >> that will be enough for marcus prayed you talked about cash flow and income in the future. in european equity and global monitoring. let's talk inflation prayed that is another issue for your top issue of the second half of the year. >> after this week, he of a better inflation report and there's always a group of people, every time you get a sign of inflation prayed here comes, get ready prayed member in the 80s and 90s what happened in the main fracture economy. if they're looking to buy insurance, sell it to them. you can have tips and breakeven, by the way in the five-year area it is only 16, one seventh of rate. that is not bad to put some in the portfolio. but i think people scare you,
ready here is inflation we're starting to see, they will say every year within the last five years. you cannot have it when you have an industry. all the innovation and entrepreneurialism in the world today is geared towards of what we used to do at a cheaper price. that is how commerce runs in the world today off of fnc's and take out the middle name and some of the inefficiencies and bring price down. that is completely different culture of anything we have experience. we haven't asian graphic. it will be okay if it's not that strong. maria: thank you so much for joining us. rick reeder. don't go anywhere or wall street right after this. uh-oh, looks like someone's
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business start smart enjoining six to nine eastern with monday mornings with maria. i will see you again next time. ♪ hello and welcome to the wall street journal at large. it keeps rolling on. when they just stuck it to seal it hit record heights. jay powell the chairman of the federal reserve all confirmed what the central bank has been hittinhitting at. later this month after two and half years of steady increases. congress mr. powell used usual coded language to signal the change. >> in the june