 Welcome back to Kavuto Coast to Coast. I'm Charles Payne in for Neal Kavuta, and we've got another very busy hour coming up We just had an amazing jobs report and missed the estimates But the details are phenomenal including revisions to May and June that more than made up for the headline Edward Lawrence is at the Labor Department with more Oh Charles the White House is actually saying that they're happy with this report They're highlighting the positives that are in this report like manufacturing jobs increasing in fact manufacturing created 37,000 jobs in July that number on pace with what the June number was so for the past two months Manufacturing in that sector has created 73,000 jobs now add in another 19,000 jobs from construction And that could indicate that there's investment from companies going forward No economic advisor Larry Kudlow says that he's happy with the job numbers and the forecast from the Atlanta Federal Reserve That the third quarter growth will be five percent I actually thought it was a pretty strong report Because the headline number was a little below estimate, but look the back revisions were gigantic 59,000 so really you got to add that in that gives you really two 15 for the month of July And Kudlow ended up saying that you need to look at the trend over the last three months In fact, this economy over the past three months has created 224,000 jobs per month there now economists say that this report could also be good for the Federal Reserve to keep to their path of Forecasting two more rate hikes this year my sources in the Fed say they're really looking at the average hourly wages And that number was 2.7 percent again this month for the 12 months preceding this now if that number stays around the 2.7 percent level inside the Fed they believe that inflation pressures will be lower So the bottom line this jobs report good for the White House good for the Federal Reserve Charles Thank you very much Edward now the steady jobs gain lower and unemployment One of the questions is why why don't we see wages picking up and it could that actually happen real soon? Want to go to real clear editor John Tammany the pain capital management president Ryan pain and stocks who's founder Melissa Armo? Let me start with you John It's it was it was a great report in my mind when I started looking at some of the details particularly of some of some sectors For instance the u6 number going to seven and a half from seven point eight That to me reflects a wider breadth of people who were out of this job market who was struggling and doing much better But are you concerned about any element particularly wages? No, no for one you never look a scans at three point nine percent But for two it's at some point We've got to just throw out the ridiculous models happened upon by economists and just use common sense Think about it The u.s. Has the most valuable companies in the world by far at the high level the mid level the low level Can you name any company in history that got that way without adding the best talent possible and paying that talent? Well, is it really consistent with the market valuations placed on u.s. Companies that somehow those businesses could routinely build workers at all levels it defies basic common sense Americans are paid very well. Who cares that economic statistics don't reveal what's obvious Melissa, what are your thoughts the jobs report? We're up almost a hundred points on a Dow S&P is up for the fifth week in a row will finish higher And and you know NASDAQ 100 just a couple days ago We were talking about a breaking under the 50-day moving average now it could be back to a double top real soon Well, you know what people live and die by these numbers, which I think is ridiculous. This was a good number It wasn't as expected. It's not the end of the world and you know how I can figure that out the market had no negative reaction today We gapped up and opened up today. We had a huge rally yesterday. Apple came out their earnings were spectacular made all the brand new All-time highs there's no reason to you know have a pity party because we didn't hit these exact numbers these estimates sometimes They I think they over shoot what these estimates are want to be but this is a still a good solid solid number And you were talking about early this morning and you were saying, you know what if this was too big then the Fed might say oh And then raise rates another extra time. So I mean, I think it's good Goldilocks Goldilocks. No, I think we have to remember is I mean it yeah Goldilocks action way it is because we have modest inflation And you know, we're seeing the economy grow. We're seeing you know unemployment go up It's moderate and that's all the things you want to see to keep this economy cooking because yeah This is one of the slowest economic recoveries. We've ever had it all time. We're not going to go to zero to 60 overnight So say that again. I said this is one of the slowest economic recoveries We've ever had well, you mean over the ten year that we've had expansion in the economy, right? But more recently it has picked up a tremendous amount of steam. Yeah, GDP was great for last quarter But I mean you can't expect wages to just go skyrocketing overnight. I think that's going to take a while What about the overall economy though? Can we can we expect it's 3% reasonable? I think it's very realistic I mean you have capital expenditures coming back in corporations You have you know people are spending money again the government spending money this this economy is heating up This incorporations aren't going to pay more unless they're forced to I mean if you if you want a company You run a company, you know, you want you're trying to save I mean that's the biggest expense that companies have is payroll They're not going to pay more unless they absolutely have to right of course That's one of the things that was big on Janet Yellen's dashboard the quits part of the of the jolts report And that's starting to edge up and not a lot now John I know you're not a big fan of tariffs, but the battle is joined if you will China announcing 60 billion and retaliatory tariffs But I thought the more important news this morning was China taking measures to sort of slow the decline in their currency Which many people were saying what that was going to be there they're ace in a hole What do you make of it all? Well, I think we overrate this idea that you can devalue your way to prosperity if that were true Then Zimbabwe would be the richest country on earth in Argentina would be number two When you devalue your currency you weaken your workers and you repel the very investment that drives corporate and job creation Look at Japan Japan had some of its best years of economic growth when the yen was soaring against the dollar And so what's crucial is that the Chinese maintain that peg to the dollar? Let's never forget the only reason we're working is because we want to get things more than the Chinese get up and go to work every day We Americans get a raise furthermore China represents an increasingly large market for US companies Apple's the most valuable company in the world. Where does it get one quarter of its revenues from sales in China? Let's not mess up what's great for both countries, of course Melissa I think that's one of the issues we're trying to resolve even greater access and into China And the ability to do business there without giving up too much or giving up intellectual property or straight secrets Right and that's what Trump is coming out doing all this and again It just goes about a hundred percent conviction look at the market today We came out with this all this tower of stuff came out this morning before we opened and we didn't have any negative reaction I was surprised the market is holding tough. It's hanging tough. It's trying to hang in there The market really likes Trump a lot. It's trying to struggle off this tariff is whenever it comes out I think you got it. You got to give it a shot. You got to give him time It could be a couple of months till all this gets straightened out, but China's fighting back They're fighting back hard. Well, you know my thing Ryan is and I talked about it last time on my show I think this ultimately is the combination of art of the deal and art of war All right, if you read art of the deal, you know why President Trump is fighting this fight in the first place If you read the art the art of war right and there's some key components in there Like when you're victorious you don't crush the opponent you leave them at exit in other words We I think we're gonna find a place where we're gonna have to President Trump We'll have to find a place to declare victory because there will be an inflection point there could be yeah, absolutely I mean, let's face it at the end of the day. We import so much more from China than they import from us So I mean we definitely have the upper hand here plus China's economy is slowing our economy is really strong here So this is just a negotiating ploy and we'll probably win that battle or you know that you whatever you want to call it John what's what's worrying you the most of all the things in this economy including debt Which you know what we're sort of remiss because we don't talk about it a lot and we used to Well debt rises when an economy is growing and we know that for obvious reasons No one's going to lend to a person or a business or even a country if they feel that that debt's not going to be paid back So that's something I've been making with some of my relatives, but go ahead To some degree that takes care of itself what worries me is the trade stuff. Let's be clear I I don't buy into this notion that we have we have a strong hand versus China again Apple gets a quarter of its revenues from sales in China GM sold more cars in China in the first quarter than it sold in North America Nike's number two market is China Boeing sells one quarter of its planes in China They're double the number of Starbucks and Shanghai and they're in New York City Why on earth would we get in a war with a country that is still very poor? Imagine what a huge market they'll be for our world-leading companies once China actually gets rich Let's not mess with what's good, right? But we do want access at that market because we've already got the access do we Look at look at the numbers. Why would that? Why does Apple get a quarter of its revenues from sales in China number five? Smartphone maker in China and part because of some some things I mean anyone who does real business in China will tell you there are a lot of obstacles against American companies and American products So that number could be even better if they would level the playing field to the same degree that we level it for their companies Yeah, I know No, go ahead. No, I agree with that I mean, I think that that's the point here is we definitely have room to negotiate and I think you're gonna see that I think we're actually gonna win this conflict. I mean, it could be a win-win listen That's the whole thing China obviously says that they would like to do more rely less on exports and more on the domestic economy You know, they have a huge amount of middle-class that's grown over the years and and they're not gonna always have this Manufacturing, you know advantage not they certainly won't have it against the neighboring country Nike does more Manufacturing of their sneakers in Vietnam now that they do and in China So they want that they want domestic prices to be low I would think but it's just about freer or fairer sort of markets Right that and also the intellectual property thing is a bugaboo and so that is a problem for Trump as well You know when when you look at them a whole let's just say this all works out to America's advantage Trump keeps saying America first Let's just say it all works out You know what the other countries of the world are gonna look at Trump differently because they've had issue with him doing this To them as well and China's been the biggest one that's been trying to stand up to Trump with the with the tariffs If other countries are gonna respect us more if this works out with China Well, we're close to something with you we may get something over the weekend on that and we'll all see hey Thank you all very much for the smart passionate commentary. Have a great weekend in the meantime Sticking with Apple they continue to climb now more than a trillion dollar market cap So what does Tim Cook need to do to really keep up the pace because when you're winter people expect even more from you And of course be sure to tune into my show tonight making money at 6 p.m We're gonna talk about a whole lot of things not just Apple last night. I told you about smuckers It's up eight bucks today. There's a lot of ways to make money in this market. We'll go over it tonight 6 p.m