Trump’s tariff policy is working, market expert says

LAUREN: THE WORD ON WALL STREET, TOP INVESTORS WATCHING YOUR MONEY. SENIOR PORTFOLIO MANAGER THOMAS MARTIN, JOSH SCHAEFER AND JOSH, LET ME START WITH YOU. THERE IS A LOT OF OPTIMISM ON THE ECONOMY AND STOCK MARKETS AT OR NEAR RECORD HIGHS. CAN THIS KEEP GOING? JOSH:IT CAN KEEP GOING AND THE REASON IS EARNINGS. IF YOU LOOK AT NOT JUST THE LAST QUARTER OF EARNINGS, IT HAS BEEN GREAT FOR THE SECOND QUARTER OF EARNINGS BUT NORMALLY 2026 EARNINGS ESTIMATES GOING BACK TO 2000 WOULD BE DOWN 7%. SAME IN 2027. 2027 EARNINGS ESTIMATES THROUGHOUT THE YEAR UP 14%. YOU ARE GETTING THE CHASE HAPPENING IN TERMS OF ESTIMATES. AS LONG AS YOU HAVE THE CHASE ON AND A MARKET THAT'S RELATIVELY FAIRLY VALUED, YOU HAVE ROOM FOR MULTIPLE EXPANSION, ROOM FOR THINGS GET CRAZIER. THIS HAS BEEN AN EARNINGS DRIVEN RALLY. IF YOU WANT A BUBBLE, YOU CAN SEE MORE OF A RALLY AND SOLID ECONOMIC DATA. LAUREN: THE WALL STREET T JOURL HAD A PIECE THAT THESE TARIFF REFUND CHECKS ARE HELPING THE BIGGEST COMPANIES IN THE WORLD, APPLE $2.2 BILLION, FEDEX, BRINGING IN ALL THIS EXTRA MONEY IN THE FORM OF THE REFUND CHECKS. >> WHAT YOU SHOULD HAVE TO FOLLOW, FOCUS ON THE PRESIDENTIAL AUTHORITY, QUITE UNDERREPORTED, THE PRESIDENT HAD A HUGE WIN WHEN IT CAME TO THE WAY THE COURT OF INTERNATIONAL TRADE, IN PLACE FOR THE RIGHT REASON AND YOU CAN GET TARIFF REFUNDS BACK. AN AMAZING WIN FOR THE PRESIDENT. A LOT OF THINGS HAPPENING ON TARIFFS BUT THE PRESIDENT'S POLICIES ARE WORKING. LAUREN: REDIT SHARES ARE DOUBLE-DIGIT PERCENTAGE WISE IN THE FREE MARKET, THE COMPANY IS SET TO JOIN THE S&P 500 ON TUESDAY, UP $20 FOR REDIT REPLACING AVALON BAY COMMUNITIES. JOSH:IT WAS A BARREN'S PICK. THE BENCHMARK INDEX, NICE BUMP OUT OF THAT. THE KEY STORY IS ITS LESS OF A SOCIAL MEDIA INTERNET COMPANY AND MORE OF A DATA COMPANY. THEY ARE IN NEGOTIATIONS FOR A DEAL WITH GOOGLE, TRYING TO RE-SIGN A NEW DEAL, THEY ARE FEEDING THEIR DATA INTO THE GEMINI PRODUCT BUT WE THINK REDIT IS A WINNER IN THE AI DATA SPACE, BEING ABLE TO LEVERAGE THEIR DATA TO SELL TO LARGE LANGUAGE MODELS. MORE OF A SECULAR GROWTH STORY. LAUREN: THEY ARE UP TODAY. THERE WAS A MAJOR BOND AUCTION. CLEARLY INVESTORS WANT COMPENSATION AS THEY FINANCE US DEBT, THE 10 YEAR UP 4. 6%. WHAT DOES THE FED DO WITH COOLER INFLATION READINGS WE'VE BEEN GETTING AS ENERGY PRICES BUBBLE UP AND STAY HIGH? IF YOU LOOK AT PRICING IN OF A POTENTIAL RATE HIKE IT IS AROUND 32% TO 34%. %. 69% CHANCE THE FED HOLDS STEADY WHEN POLICYMAKERS MEET NEXT MONTH. WE GOT THE PPI REPORT, PRICES FLAT FROM JUNE AND THEY DID EASE TO A RATE OF 4. 7% FROM A YEAR AGO BUT THEN YOU HAVE THE US NATIONAL DEBT NEARING $40 TRILLION, THE US IS POISED TO HIT THE DEBT LIMIT THREATENING A DEFAULT AND ANOTHER LIKELY INCREASE FROM CONGRESS. WHAT WORRIES YOU THE MOST? TOM:THE GAP LEVEL IS HIGH AND RISING AND KEEPS RISING. WHAT WE SAW WITH AUCTION IS IT CAME OFF 5. 22%. VERY HIGH INTEREST RATE. THE INTEREST COSTS ARE AT A POINT THEY ARE CROWDING OUT OTHER TYPES OF INVESTMENT. WE HAVE TO BE CONCERNED ABOUT DEBT AND THE LEVEL OF DEBT IS HARD TO SERVICE BUT THE CIRCLE THAT CAN CONTINUE TO RISE RATES. WE HAVE SEEN RATES ARE RISING A LITTLE BIT BECAUSE OF INFLATION BUT REAL RATES ARE RISING AND THAT IS A PROBLEM FOR THE ECONOMY. EVERYTHING ELSE THAT GOES INTO THE RAIDERS HOPES AND FEARS AND EVERYTHING THAT MAKES UNCERTAINTY HAPPEN. THAT DEBT LEVEL IS PART OF IT. CHERYL: THE 5-YEAR HIGH, DO YOU THINK THE BOND MARKET IS CALLING THE SHOTS? SOME YEAR:REMAINS TO BE SEEN. AS LONG AS COMPANIES CONTINUE TO EXPAND THEY WILL MAKE THESE BOND OFFERINGS TO THE PUBLIC MARKETS AND AMERICA WILL WANT TO SUPPORT THEM. I AM BULLISH ON IT. JOSH:AT THIS POINT THE BOND MARKET DOESN'T SEEM LIKE IT'S WILL BE CALLING THE SHOTS. I WOULD HAVE THOUGHT A 10 YEAR CLOSE TO 4-7 WOULD IMPACT THE EQUITY MARKET A LITTLE MORE. I'M SURPRISED IT HASN'T. LAUREN: IF RETAIL SALES COME IN STRONGER-THAN-EXPECTED THE CONSUMER KEEP SPENDING MONEY. WHAT ARE YOUR THOUGHTS AN HOUR AND 15 MINUTES FROM NOW? JOSH:THE CONSUMER IS STRONG AND SPENDING ON EXPERIENCES MORE THAN ANYTHING ELSE. THE IMPORTANT THING IS THEY HAVE JOBS. AS LONG AS THE EMPLOYMENT SITUATION HOLDS UP AND THEY CAN GROW WAGES FASTER THAN INFLATION THEY WILL SPEND AND WE'VE BEEN SURPRISED EVER SINCE COVID AT THE RESILIENCE OF THE CONSUMER, THE ECONOMY, THE WORLD ECONOMY IN THE FACE OF IRAN AND THE STRAIT OF HORMUZ. A LOT OF POSITIVE THINGS, THE ECONOMY KEEPS CHUGGING ALONG. LAUREN: YOU SAID LIVE ENTERTAINMENT. I WILL IMPRESS EVERYBODY HERE. A I PROBABLY CAN'T ANNIHILATE THE LIVE SPORTS MARKET AND ONE OF THE REASONS THE LAKERS GOT SO MUCH MONEY FOR THEIR FRANCHISE, HOW DO YOU LIKE THAT? JOSH:I COULDN'T BELIEVE IT, 6 BILLION. SHARE MACULAR LIKE MY COLLEGE ROOMMATE, WE FIGHT ALL THE TIME