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Facebook, Apple, Amazon, And Microsoft All Reporting Earnings This Week; Apple’s FaceTime Bug; PG&E Files For Bankruptcy; Huawei Criminal

January 30, 2019



<Date: January 29, 2019>

<Time: 06:00:00>

<Tran: 012901cb.231>

<Type: SHOW>

<Head: Facebook, Apple, Amazon, And Microsoft All Reporting Earnings This

Week; Apple’s FaceTime Bug; PG&E Files For Bankruptcy; Huawei Criminal

Charges; Nvidia Issues Warning; Senator Kamala Harris Backs Medicare For

All Plan; 2020 Presidential Run; Artic Temps On The Way; Effects of the

Shutdown; California Tax Debate; U.K. Weighs Exit Amendments; Colorado

Farmers Renting Water; Test For 911 in Milpitas; Progress Toward Peace - Part 3>

<Sect: News>

<Byline: Maria Bartiromo, Dagen McDowell, Cheryl Casone, Janice Dean, Jack


<Guest: Grover Norquist, Jon Hilsenrath, Matt Schlapp, Phil Orlando>

<Spec: Facebook; Apple; WhatsApp; Earnings; PG&E; Bankruptcy; Huawei;

Nvidia; Howard Schultz; Michael Bloomberg; Steven Mnuchin; Larry Kudlow;

Burger King; CBO; Federal Reserve; T.J. Rodgers; Cypress; European Union;

Theresa May; Super Bowl; Chicago Tribune; Sears; Eddie Lampert; Colorado;

Boulder County; Farmers; Taliban; Afghanistan; American Troops; Pakistan;

ISIS; al-Qaeda; John Bolton; Venezuela>

And number three, the American people when it comes to immigration, he is on the right side of this policy argument. And Democrats who are against border security, they’re going to be sorry for this eventually.


MCDOWELL: No. But you know what. You better be --

BARTIROMO: Yes, go ahead -- Dagen.

MCDOWELL: -- but you better be careful about what you do and this goes to all politicians because I was flying on Friday and that was an utter nightmare. If you want to anger everybody in the electorate, you pull another fast one like that where people are grounded and you’ve got an hour and-a-half plane flight where you’re at 8,000 feet.

BARTIROMO: But who are you blaming?


BARTIROMO: They were blaming (INAUDIBLE) and blaming the Democrats because --

MCDOWELL: They were blaming everybody.

BARTIROMO: -- Nancy Pelosi dug in.

MCDOWELL: They were blaming everybody. But TSA agents down in Raleigh, Durham were going to food banks because they were spending what little money they had on gas trying to get to and from work. So again, I don’t care who is responsible for it. They’re all responsible.

BARTIROMO: Well, businesses did start, you know, putting the uncertainty out there, sitting on cash, making decisions later. We know. I mean the SEC closed, can’t get any IPOs through. FDA closed, got to worry about obvious food shortages or food issues.

So we were beginning to see some real impact. And Dagen saw it firsthand at the airport.

SCHLAPP: That’s true. But if you’re a federal employee in this town, let’s face it, you make a little bit of a bargain. Yes, every year you might have to go through a shutdown with your salary.

But you know, the other thing, Maria, that we don’t talk about, it’s almost impossible to fire a federal employee. There’s some pretty cushy gigs --

BARTIROMO: Good point.

SCHLAPP: -- in THIS town where you basically have an insurance policy against ever getting fired unless you do something just awful.


SCHLAPP: And you can read all the GAO reports that’s backed that up.

BARTIROMO: We’re talking about all of that this morning.

MCDOWELL: But there are people barely making ends meet who are trying to drive to work, and spending all their money on gasoline and going to food banks who were working for the TSA and not getting paid.

And when the Republicans stop thinking about them and start talking about the workers who aren’t needed, the ones who are furloughed you have really missed the boat.

BARTIROMO: Well, maybe. But how about the fact that we’ve got a border wall in Nancy Pelosi’s state?

SCHLAPP: That’s right.

BARTIROMO: Is that immoral, the wall that separates Tijuana from San Diego --

MCDOWELL: No. But --

BARTIROMO: -- is that immoral? I don’t think so.

MCDOWELL: They need to start asking all of these Democrats who think that the wall is immoral or don’t want to fund it, ok, let’s take down the walls that are there.

BARTIROMO: Yes. That’s right.

MCDOWELL: That’s how you put --


BARTIROMO: Will the three million people in Tijuana assimilate with the three million people in San Diego if that wall is torn down? I think so. And we’re going to talk about that this morning.

We’ve got a big show this morning from D.C., live. Coming up Treasury Secretary Steven Mnuchin is here, live. National Economic Council Director Larry Kudlow has a thing or two to say about the CBO protections about what exactly the impact is on the economy from that shutdown.

House Minority Leader and California Congressman Kevin McCarthy will walk us through what these next three weeks look like with his colleagues in terms of this negotiating on border wall funding.

Michigan Congresswoman Debbie Dingell is here.

Along with AFL-CIO president Richard Trumka.

Don’t miss a moment of it. A big two hours coming up.

And we kick it off this hour right now with markets. Futures are pointing to a flat opening this morning amid all of this uncertainty over China trade, earnings. It’s an enormous week this week.

This after stocks finished to the downside yesterday on the China growth fears, the weak guidance from Nvidia and Caterpillar as well, and of course these worries about what happens with China and the U.S. There’s conversations happening tomorrow.

Joining us right now is the founder, CEO and chief investment strategist at Mainstay Capital Management David Kudla. David -- good to see you this morning. Thanks so much for being here.


BARTIROMO: So we’ve been talking about what a week this is with the fourth quarter earnings coming out. That’s been pretty much driving the story. We have a jobs report coming out at the end of the week on Friday. Brexit discussions, the vote today. U.S./China discussions tomorrow. A fourth quarter GDP number. How do you want to invest with all of this?

KUDLA: I think investors should be looking at stocks right now that they want to own. We’ve been invested through -- the past month has been very good for stock investors. 13 percent rise through Friday from the lows of December 24th. And that’s in both growth stocks and value stocks, so a broad market advance.

We’re going to see some give and take here now after this nice advance of last month but investors should be picking, you know, their points here, have their list out on stocks they want to own. We look for a good 2019 for stock investors.

BARTIROMO: Is it good news, Jon Hilsenrath, that the Fed gave us a pivot that we know that the Fed is on pause right now and that we know that they’re even ready to consider slowing down the unwind of the bond portfolio?

HILSENRATH: Right. I don’t think it’s good news.


HILSENRATH: I think it shows that the Fed is becoming less confident about how strong and sustainable the economy is. I mean it is a sign that inflation isn’t picking up and that’s good news. But you see some real trepidation coming out of the Fed right now with the global economy slowing, with markets being unstable and volatile.

I think the Fed is a little worried about the outlook and that shouldn’t really give us a lot of encouragement.


BARTIROMO: What about that, David? I mean the economy’s slowing.

KUDLA: But Jon this -- yes.


KUDLA: But John -- the important thing here is what happened in the fourth quarter is we had mixed messages out of fed chair Jerome Powell. We had on October 3rd we were far away from neutral. Then by November we were close to neutral rates. Then on the 16th in the Fed meeting they were going to do what’s right no matter what.

Then he came in on January 4th and finally said we’re going to be considerate of market and economic conditions and now we’re seeing a more consistent and accommodative message out of the Fed. And that’s very important for the markets.

That’s music to the market’s ears and that’s why we’ve now seen a sustained advance. So the markets and investors are now looking at a Fed that seems as though they are going to be considerate of or accommodative or take into account what’s happening with the markets, with the economy, and not just normalize rates for the sake of normalizing rates.

They won’t have $50 billion rolling off the balance sheet on auto pilot and they won’t raise rates just to raise rates to get to a normalized rate structure.



BARTIROMO: And that was the worry in the fourth quarter.

KUDLA: -- in pause like in 2016 if the market and economy warrants it. That’s important.

BARTIROMO: Yes. That was they worry in the fourth quarter -- that they were on auto pilot-- Jon.

HILSENRATH: Right. Yes, I make two points.

KUDLA: That drove volatility in the fourth quarter, the Fed. .

HILSENRATH: David makes a really important point, you know. So this has been Jerome Powell’s first year at the Fed. He’s had a bit of a honeymoon with the market. And then what the market has discovered in the last month or two is that Mr. Powell, you know, he kind of prides himself on being a plain-spoken communicator but his communication has confused a lot of people in the market. And he’s really had to do a lot of corrections over the last few weeks --


HILSENRATH: -- so that raised some questions about him.

But the other thing about -- you know, the market wants to see the Fed on an easier path. Ok. But the underlying message there is that this economy can’t sustain very high rates.

So it doesn’t send a really encouraging message about economic growth and the economic outlook when we see that the Fed is starting to recognize it just can’t sustain a tighter monetary policy.

BARTIROMO: Yes. But look, we’re getting the news from the companies themselves with the fourth quarter numbers coming out. Verizon just reported mixed earnings. They beat on earnings, but they missed on revenue.

HILSENRATH: Caterpillar.

BARTIROMO: Technology reporting late today, Apple. And we heard from Apple already. Facebook, Amazon -- all reporting this week, Microsoft. It’s going to be a big week for technology. And of course you mentioned Caterpillar. That was the big kahuna yesterday that really set the tone for the markets because Caterpillar is a great indicator of economic activity across the world, in particular China.

So stay on earnings for a second, David. Give me your take on technology. Because you’ve got Apple, Facebook, Amazon and Microsoft coming out this week.

KUDLA: Well, you know, tech stocks got beat up very bad in the fourth quarter. They’ve come back in this rally and we think that tech stocks have further to go.

Look, we think that investors should stay with tech stocks. We have an opportunity here to add value stocks to the portfolio. Cyclicals came into 2019 at their lowest valuation relative to the S&P 500 ever.

So investors now can diversify their portfolio in an opportunistic way, holding both growth stocks. Those tech stocks that we think still have some rebound and some further runway ahead of them, and by adding value stocks that are very opportunistic.

BARTIROMO: David -- it’s good to see you this morning. Thanks so much.

KUDLA: Thank you.

BARTIROMO: Still bullish on this market. David Kudla joining us there.

Coming up, the State of the Union is back on, Speaker of the House Nancy Pelosi extended officially the invitation to President Trump to do the State of the Union in the House Chamber. He accepted the offer.

Plus we’re taking a look at the enormous cost of the shutdown, what exactly is the number? A lot of people say it wasn’t very much at all.

Then, Snapchat’s unthinkable change, how the photo sharing app is attempting to compete with Instagram by changing a key feature.

Back in a moment.


BARTIROMO: Welcome back.

New revelations in the sexual misconduct claims against the former CEO of Wynn Resorts.

Cheryl Casone with headlines now in New York -- Cheryl.

CHERYL CASONE, FOX BUSINESS NETWORK CORRESPONDENT: Yes, Maria. The “Wall Street Journal” is reporting that executives at Wynn Resort ignored allegations of sexual misconduct by Steve Wynn over more than a decade. According to a regulator’s report Wynn was accused of sexually assaulting or harassing salon workers, cocktail servers and flight attendants who worked for his company.

Under a proposed settlement, the Nevada Gaming Control Board won’t try to revoke Wynn’s regulatory licenses but Wynn is going to pay a fine. Steve Wynn has denied any claims of misconduct. There’s a one year chart of Wynn’s in front of you right there.

Well, Snapchat has named Lara Sweet as its interim CFO. This is another shift in leadership at Snap as the company has lost several high profile employees over the last year. Meanwhile Snap is reportedly considering allowing longer lasting or even permanent videos on Snapchat. It will apply the Snap shared publicly on this story’s features. Snap is down 52 percent from one year ago. There’s that chart for you.

Well, Porsche is speeding past Tesla in a fast charging race. The car maker says it new Porsche Taycan is going to be able to add more than 60 miles of charge in just four minutes. That will be the fastest available today, exceeding Tesla’s super charging stations which needs about 30 minutes to charge a vehicle’s battery to at least 80 percent. Charging times are a key selling point obviously for these car makers and now Porsche is giving Taycan owners three years of free charging.

And obviously we’re going to be hearing from Tesla this week, Maria. Earnings are coming out from Elon Musk and company.

Back to you.

BARTIROMO: All right. Cheryl -- thank you so much.

Coming up next, House Speaker Nancy Pelosi challenged over her words describing a border wall as immoral. We will break it down when we come back.

Then support on the links, fans rallying around a pro golfer whose two shot penalty was deemed unfair. More on that.

Back in a minute.


BARTIROMO: Welcome back.

Keeping America safe, the government is back open but the focus now is whether President Trump can make a deal with Democratic leadership on funding for the border wall.

House Speaker Nancy Pelosi has called it immoral, any wall is immoral. But her home state of California protects the southern border in some places with an actual wall -- the wall separating Tijuana and San Diego.

Joining me right now is Michigan Congresswoman Debbie Dingell. And the last time you were on you said you wanted to look at this again. Congresswoman -- it’s good to see you.

REP. DEBBIE DINGELL (D), MICHIGAN: It’s good to see you. Welcome to Washington.

BARTIROMO: Thank you so much.

What’s your take on this? I mean can Nancy Pelosi really get away with calling a wall immoral when she has a wall in her own state, separating Tijuana from San Diego?

DINGELL: Here is what I think is going to happen. You’ve got strong countries (ph), both sides of the aisle, both houses. They’re going to go into that room and they want to cut a deal that’s going to keep our nation safe. I don’t think anybody wants to see what we just went through for 35 days.

It hurt the economy. It hurt -- and I do believe -- this is going to sound corny but I don’t -- you know, why do we point -- why do we need to have a Trump win, a Pelosi win. We need an American win.

So I’m hoping they’re going to go in that room. I’ve talked to my colleagues on both sides. I’ve talked to Roy Blunt. I’ve talked to all my Democratic colleagues in the House. They want to win.


DINGELL: They want to go in and put together a package that’s going to keep --


BARTIROMO: So how do you win? What’s the position in terms of wall funding? Because they may very well -- your colleagues may very well come back and say ok, here’s $5 billion towards border security, not a dime toward a wall.

DINGELL: I don’t know -- if people are really working together, that may not happen. You know, there may be money, if there are appropriate places for a wall or fence or --

BARTIROMO: Is there a movement within your party, do you think, among your colleagues that they feel that, yes, some money should go for an actual barrier?

DINGELL: I think what I hear among my colleagues is let’s go into a room and do something that makes sense. Let’s come up with -- we need to -- I’ve said this to you a million times.


DINGELL: We need to strengthen our borders at both sides. Everybody talks about the southern border. I’ve got this northern border too which just had a huge human trafficking problem again in the last few --


BARTIROMO: But there are areas of the southern border that are very dense. In other words like when you just look at the wall in Nancy’s state and that is three million people on one side in Tijuana, three million people on the other side in San Diego. If you tear that wall down -- I mean isn’t it obvious many of the people on the Tijuana side will assimilate into the United States?

DINGELL: Then let me ask you this question. Build a wall, tear down a wall -- are there structures that are working that are in place?


DINGELL: So that’s -- what I do think we need drones. We need to fill the 3,000 open patrol --

BARTIROMO: And that’s common ground, both sides believe in that.

DINGELL: Both agree --

BARTIROMO: Technology and drones -- definitely.

DINGELL: We need technology. We need to make these ports safer.

BARTIROMO: Specifically in a dense area, like Tijuana/San Diego, drones wouldn’t work. I mean maybe you want that in addition to a wall. When you have such a dense area, where there’s three million people on one side of the wall and three m million on the other, don’t you need an actual barrier?

DINGELL: But they are going to go in this room. There are people that know what they’re doing. They’re people -- they’re senior people that have been on homeland security, people from the areas that are impacted --

BARTIROMO: So you think they’re going to deal? We won’t shut down the government again?

DINGELL: I pray to God, we never shut down the government. Not only do I pray to God that doesn’t come out of conference but you’re going to see Republicans and Democrats working together. We’ll get --

BARTIROMO: This whole wall issue, Congresswoman, sort of underscores what’s going on I think in both parties. Now you’ve got former Starbucks CEO Howard Schultz seeing an opening as a result of the radicalness on both sides.

He’s facing backlash on his first stop for his book tour last night. It was his first public appearance after announcing a possible Independent presidential run. It did not go smoothly. Watch this.


UNIDENTIFIED MALE: Don’t help elect Trump, you egotistical billionaire (EXPLETIVE DELETED). Go back to (INAUDIBLE) on Twitter. Go back to Davos with the other billionaire elites who think they know how to run the world. That’s not what the country needs.


BARTIROMO: Wow. You know, I give you a lot of credit just being in politics, by the way.

Schultz is also being criticized by former New York City Mayor Michael Bloomberg, billionaire. He tweeted this, “In 2020 the great likelihood is that an Independent would just split the anti-Trump vote and end up reelecting the President. That’s a risk. I refused to run in 2016 and we can’t afford it right now.

Congresswoman -- do you think an Independent run is viable? Do you think an Independent run from Schultz would hurt the Democrats?

DINGELL: I think it’s viable. He has the money to spend it. But I think he would hurt the Democrats. I’m fearful that I am -- I’m trying to step back. I’m not getting any candidate I want to see who is going to emerge, who’s got people skills.

But this is dangerous. And as you know, told you two years ago, Donald Trump could become president. Nobody believed me. You all thought I was crazy. You may not have but most people did.

And I still think he could get reelected. And if we do not run a strong campaign and we don’t have somebody like that that pulls votes off --

BARTIROMO: One of the issues is the messaging of what the platform is. So what do you think the Democratic candidate for 2020 should have as their platform? What’s most important?

DINGELL: You know what we didn’t do and one of the reasons I believe firmly that President Trump became President Trump. One, people are tired of partisan bickering. They’re tired of seeing things not get done in Washington.

There are a lot of people that are hurting in this country, just working men and women who want to know that we actually care about them. They’re scared about healthcare. They’re scared about escalating drug costs. There’s -- look at our --

BARTIROMO: So healthcare should be the platform?

DINGELL: it’s one piece of it. Infrastructure, let’s create jobs. What are we going to do about education? Trade?

Now, the President -- you want to know why he won Michigan? Trade. They’re tired of bad trade deals that ship jobs overseas. We don’t have a level playing field. The President’s trade policy is all over the place.

It’s not consistent.

BARTIROMO: Are you going to vote for the ratification of USMCA?

DINGELL: I don’t call it USMC. I call it NAFTA 2.0.

BARTIROMO: Are you going to vote for ratification.

DINGELL: I haven’t decided yet.

BARTIROMO: This is on your plate now in the next month.

DINGELL: Very much on my plate. And talk to Lighthizer about it all the time. But I’m not voting for any bill that doesn’t have and acting legislation that keeps more manufacturing from going to Mexico.

BARTIROMO: Wasn’t that one of the key things of this new law?

DINGELL: But Blazer still went to --

BARTIROMO: Keeping jobs here.

DINGELL: Blazers went to Mexico in July. I’m not seeing any more American cars go to Mexico and get built for $1.50 to $3.50 and then gets shipped back.

BARTIROMO: So you want a change before you vote for it?

DINGELL: He knows how I feel. I’m not -- one of the more likely people to vote for it but I’m not voting for it in the form that it’s in right now.

BARTIROMO: All right. We’ll leave it there.

Congresswoman -- it’s good to see you.

DINGELL: Thank you.

BARTIROMO: Thanks so much. Congresswoman Debbie Dingell joining us here.

Coming up, the longest government shutdown in American history is over. But another shutdown threat is on the horizon. We will talk about the next three weeks, what it looks like with House Minority Leader, Kevin McCarthy. He’s up next.

Then you’ve got a friend again. The new teaser trailer for “Toy Story 4” drops with a big surprise.

Back in a moment.


BARTIROMO: Welcome back. Good Tuesday morning, everybody. Thanks so much for joining us. I’m Maria Bartiromo. And it is Tuesday, January 29th. Your top stories right now at 7:30 a.m. on the East Coast.

Earnings season in full swing this morning for the fourth quarter. Several Dow components reporting their fourth quarter this morning. Verizon reported a mixed quarter earlier this hour. Pfizer and 3M also under pressure this morning as you can see. 3M up three percent, although Pfizer and Verizon down better than one percent.

Rising tensions with China continuing, the U.S. bringing charges against Chinese telecom company Huawei as trade talks are set to resume tomorrow morning between the two nations. Treasury Secretary Steven Mnuchin will be joining me as my special guest this morning at the top of the hour, 8:00 a.m. Eastern. Join us for that talk on China and the economy as we break it all down with the Treasury secretary.

Markets this morning are hovering around the flat line. Take a look. Dow Industrials up 20 points right now, 26 higher. The S&P 500 is down by almost one point and the NASDAQ down about three points.

All this after the major indices finished lower yesterday across the board at 04:00 on Wall Street. Dow industrials were down 208 points and then actually was off of the lows of the -- of the day, down almost one percent at the close. S&P 500 gave up 21 points, that was three-quarters of one percent. And the NASDAQ was down 79 points, better than one percent lower.

In Europe this morning, a mixed story, actually mostly higher. FT-100 at the high of the morning right here, up 1-1/4 percent, 83 points higher, ahead of the British vote on the U.K. leaving the E.U. The CAC Quarante in Paris is up 42 points, almost one percent higher and the DAX Index in Germany higher by 25, quarter of a percent higher there.

Asian markets mostly quiet overnight. Take a look, as you can see, it was pretty much across the board.

$100,000 penalty, how one misstep cost a professional golfer big time. The outcry, coming up.

And Woody and Buzz Lightyear are back, the new teaser trailer for “Toy Story 4” is out and it marks the return of one character after 20 years. We will bring it to you.

All those stories coming up this Tuesday morning. But first, our top story this half an hour, shutdown showdown, the government open for business again after the last -- at least for the next three weeks, rather. But the main issue, funding the wall has not been resolved and the White House is not letting it go.


SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: What I do know is that if they don’t come back with a deal, that means Democrats get virtually nothing. That will make the president and force him to have to take executive action that does not give Democrats the things that they want.


BARTIROMO: Joining me right now is the House Minority leader, Congressman Kevin McCarthy. Congressman, it’s always a pleasure to see you.


BARTIROMO: Thank you so much for joining us. So, what do the next three weeks look like? Take us through these negotiating. Do you expect any money for the wall?

MCCARTHY: I expect us to solve this problem in the end. What’s interesting here is the whole time speaker Pelosi said I couldn’t negotiate anything until you open up government. The president put the public first and said OK, let’s go through, I’ll give you three weeks.

Now Wednesday, we’ll have the conference committee, the senators and the congressional members’ appropriation sit down and we’ll see if they’re serious about it, if they’re willing to do something. Because I believe Nancy Pelosi is out of step with her own party. If you look at her number two, Steny Hoyer. He said of course, that walls are not immoral, and that he believes some fencing involved. From her Agricultural secretary to her Agricultural chair to our Armed Services chair, they both believe in a wall too. Her Agriculture chairman said give Trump the money.

BARTIROMO: Yes, and she continues to say that it’s immoral which I find incredible given the fact she has a wall in her own state.

MCCARTHY: As my state too. You know what I find --

BARTIROMO: And your state too, exactly. California.

MCCARTHY: You know what I find immoral? When you really talk about this, this is about stopping human trafficking. In 2016, they stopped more than 2,000 individuals involved in that. I think it’s immoral that you would allow that to continue. I don’t believe anybody in America that says they support border security believes that there is no such thing as some barrier.

And the president said, he does not a -- he does not want a wall from sea to shining sea.


MCCARTHY: He just believes in the area you need some form of barrier and he’s correct.

Update hourly