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Shooting Scene; Two Hundred and Eleven Thousand Jobs were Added to the U.S.
Economy in November; Employment Report Released - Part 5>
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Bernardino; U.S. Economy>
BARTIROMO: right.
BUCCHI: Try to find anybody else involved and deal with it.
KELLY: Agreed. Even Timothy McVeigh was characterized as a terrorist, right? So why can`t we label these people as terrorists?
BARTIROMO: It`s horrible. It doesn`t fit into the narrative, I guess, that the President has been selling. Steve, thank you. Appreciate your time this morning; Steve Bucchi.
I want to move on to markets right now, because Futures are indicating a higher opening for the broader averages. There was real disappointment yesterday after the ECB decision for more stimulus. Markets just felt the ECB did not create enough stimulus; it was just not enough. So we had a large selloff across the world, but we`re seeing strength ahead of the jobs report; that is the November jobs report due out at 8:30 a.m. Eastern this morning. Employers are expected to have 200,000 jobs added to the economy and the unemployment rate is expected to hold steady at 5-percent. 200,000 jobs is the number we`re expecting.
Joanie Courtney, let`s talk there, in terms where the jobs are. What is your take on this report?
JOANIE COURTNEY, SVP, MARKET DEVELOPMENT, MONSTER WORLDWIDE: Well, I think this is actually going to be one of the most important reports of the whole year because we`ve had a lot of volatility through the year and ups and down. It`s kind of evened out, that we`ve had about 200,000 jobs being actually created on a monthly basis; but, the jobs, when you look at where the jobs are being created in 2015, almost half of the two million jobs that we`ve added to the U.S. have been in professional and business services and in health care. those are the two hottest fields right now and I would expect that we`ll see strong numbers in those areas as well as retail jobs being created today. But again, we`ve had very slow job growth in manufacturing, construction. Trade and transportation has been a little bit better but the opportunities are really in the tech sector, health care.
You know what`s interesting is, when you look at the top jobs that are out there today, there really are skilled positions. we`ve lost those kind of middle jobs that could have been maybe less of a skill. you really need a degree and skilled experience to have one of these jobs.
BARTIROMO: The professional services, you`re talking about legal work, talking about consulting work that is the professional services jobs you`re talking about?
COURTNEY: Yes, information technology, engineering even.
BARTIROMO: And that makes a lot of sense.
KELLY: Yes, it does make a lot of sense. I mean, we are a services economy right now, and we`re seeing that. I mean, manufacturing is going to have an overhang for a while, especially as the dollar stronger even though we`ve gotten some reprieve yesterday, just due to the market action but we`re looking at services PMI numbers. They`re still above 50, right. So it came at 55 yesterday that actually came out 55.9.
BARTIROMO: And we look at these because manufacturing is area of weakness. That is where you`re seeing the industrial complex collapse show up mostly.
KELLY: Yes.
MCDOWELL: The ISM contracted last month.
KELLY: Yes, the ISM contracted; of course it did, because the dollar got stronger.
BARTIROMO: Are you saying the PMI number above 50 is a positive?
KELLY: Yes, it`s 55.9 in November. It was 59.1 in October. We even saw Market came out yesterday with their own PMI on the Services side: 56.1. Those are healthy numbers. Maybe you want to touch base on Jolts numbers that come out, because there are a lot of great job openings.
COURTNEY: There are a great job and we saw movement of the Jolts number actually did bump up to 5.5 million job openings; but, again, if you look at where all the job openings are, and I was looking at job titles, which - what`s the strongest job titles out there? Out of that 5.5 million, number one: registered nurses, physical therapists. What is interesting, drivers shows up; and I know Uber has really driven that, and Lyft, and other that - it`s one of top then jobs in the United States.
MCDOWELL: It`s actually helped bring people book into the workforce.
BARTIROMO: Interesting.
MCDOWELL: Because people can drive for a living if they couldn`t find employment elsewhere. And then the one word of the day, wages. I want those wages to grow.
BARTIROMO: Absolutely. I don`t think -- are there expectations that we`re really see a movement for November?
MCDOWELL: Last month we had 2 1/2-percent average hourly earnings growth, year-over-year. It was the strongest since `09. That was good.
COURTNEY: Yes, that was the best month we`ve had. So important report today, all eyes are on it.
BARTIROMO: All right, we are as well. Don`t miss our special coverage of November Jobs Report. It all starts at 8:00 a.m. Eastern this morning. We will have special coverage on where the jobs are and what that report says for month of November and what it may tell us about 2016. Coming up, more on Uber; the company further separating itself from the pack as the most valuable technology startup. We`ve got the details on this latest rising valuation; back in a moment.
(COMMERCIAL BREAK) (Playing of Katie Perry`s "Roar")
BARTIROMO: Welcome back. Breaking news: at least 16 people are dead this morning in an attack on a nightclub in Cairo, Egypt. Cheryl Casone with the story now; Cheryl.
CHERYL CASONE, FBN CORRESPONDENT: That`s right; good morning, Maria, and good morning, everyone. Well, at least 16 people are dead, five more injured in an attack on a nightclub in Cairo. According to Egyptian media, three men on a motorcycle threw several Molotov cocktails into the club and then they fled the scene. Early reports suggest that one attacker may be a disgruntled ex-employee. `
Tragic news in the music world.
(VIDEO CLIP of STONE TEMPLE PILOTS PLAYS)
CASONE: Scott Weiland, former lead singer of the Stone Temple Pilots, they were huge in the `90s, also Velvet Revolver, died in his sleep last night while he was out on tour. He was 48 years old. Comments from band members and friends suggest that drugs or alcohol were involved. In his untimely passing he had struggled with substance abuse issues for years.
Finally this, there`s another milestone for Uber this morning to tell you about. The ride-hailing service completing a new round of funding that values the company as high as, get this, stand by, $64.6 billion; that`s s according to "The Wall Street Journal." Okay, Uber`s - Lyft, which is their big competitor, is just valued at $4 billion, and Lyft is getting together with some of the other competitors to kind of start to link their apps to compete with Uber because Uber is just blowing off the charts.
BARTIROMO: Unbelievable; and it`s interesting that you say that Lyft is only $4 billion valuation. What a difference. Kevin, does do you think about this? Does this tell you anything about the broad market valuations? Are we getting --
KELLY: Well the interesting part about this can be seen on read-through what happened with Square, right? So they can get these high valuations but those last investors in get a ratchet down provision. So should there be a situation where they do come public, and less it`s less than that, they get more shares to compensate for that. So it`s really just bidding up the value of those shares, especially to trade them in the secondary market, to get some liquidity for some of the people that invested on the earlier rounds because they need that liquidity, because they`ve been it for so long for return to shareholders.
BARTIROMO: But how do you justify this number, Dagen, relative to the others? I mean, look at those valuations that we were just looking at in the private market. It blows away everybody.
MCDOWELL: As I - well I want to point out that Snapchat`s valuation, remember, it was lowered by Fidelity. They basically lowered the valuation that was on their books of their Snapchat shares. So Uber is going in a different direction than some of these privately-held companies. I question that valuation given my own personal experiences with Uber recently. This was the floorboard of an Uber I was in two days ago. It was a brand new Suburban. Look, it`s covered in newspaper. The driver had taken newspapers and crumpled them up and they were literally about eight inches deep in the back. So, as you grow as a company, you have to control, basically, the experience of the user.
BARTIROMO: Of course.
MCDOWELL: And it becomes more and more difficult for them to do that. That was comical. I was like, what are you doing, dude?
BARTIROMO: I`m glad you took picture.
CASONE: I know.
MCDOWELL: Because I`m a loser, and I`m a nut, and I`m alone and I have nothing going on so I take pictures of --
BARTIROMO: I bet you posed with it, too. Did you pose with it?
MCDOWELL: I did.
BARTIROMO: I knew it. I knew it.
KELLY: You wouldn`t give them five stars then, right?
MCDOWELL: You have to be careful though. You can`t, -- you can not say anything to the driver, at all, because they rate you too.
BARTIROMO: Yes, that`s right.
MCDOWELL: And if you have a bad rating, a below, like, a 4 1/2 star rating as customer they won`t pick you up.
COURTNEY: Yeah, and they really -- they have actually signed up more than a million drivers worldwide and they`re continuing, as we talked about before, with jobs, I mean, driving is one of the hottest things. But they, they absolutely have some challenges on how they are going to manage, not only safety issues, but then also quality control, customer experience. It`s going to impact this number, this valuation.
BARTIROMO: But I love the fact that it`s about jobs too. This is a total jobs story.
MCDOWELL: They actually advertise it that way in lot of communities. Like, get back to work. Make extra money. There are billboards are everywhere.
BARTIROMO: Absolutely.
KELLY: The important thing is why do they keep raising money? That`s because of the government overreach and the overhang and legal expenses that they have to do to go into certain markets. I mean, they`re fighting municipalities and cab companies all the time. So they need to consistently raise capital.
BARTIROMO: That`s a great point. That`s a great point. All right, Cheryl thanks for bringing that up. We`ll be right back; stay with us. We got an ECB meeting and an OPEC meeting. We`ll talk about it next.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. Well, Donald Trump invoking several Jewish stereotypes while joking with the Republican Jewish Coalition in a meeting yesterday. Listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP: So we get a traitor, we can give them back. Do you want to renegotiate deals? Some of us renegotiate deals. I would say 99. -- is there anybody that doesn`t renegotiate deals in this room? This room negotiates. I want reneg -- [Laughter]. Perhaps more than any room I`ve before spoken.
[Laughter].
(END VIDEO CLIP)
BARTIROMO: Trump went on to joke that the Coalition only liked him because his daughter converted to Judaism and that he can never seem to reach her on Saturdays because of observance of the Sabbath. Dagen your thoughts on Trump`s --?
MCDOWELL: I just wish I could see the expression on the faces of the audience because it would be something probably like this. It`s just old man joke. You know what? I`m hard on Donald Trump about some things, but it comes across as like, old man joking. He thinks he is being funny --
BARTIROMO: Right.
MCDOWELL: -- he doesn`t understand that the comments might be insensitive. You`ve heard Harry Reid do the same thing when he was speaking once in front of a group of Asian-Americans. It`s the same type of thing that they think that they`re being funny and it`s just that they`re out of touch with how people think these days.
KELLY: He was playing to the crowd, right? He kind of wants to come off to have this Bill Clinton charisma, right?
BARTIROMO: Yeah, maybe that`s it. I guess.
KELLY: He plays to a room, so maybe he is trying to do that, but it`s playing to the crowd. You heard some chuckles so I think he just needs to be more conscientious of what he says. You know, it wasn`t to the general population or to a giant group. He was there. They invited him.
COURTNEY: And you, you never know what will come out of his mouth.
BARTIROMO: No.
COURTNEY: And you would think that maybe he would get a little more cautious about what he`s going to
KELLY: And that`s why you go see him.
COURTNEY: Yeah, but - you know, people do. They want to know, okay, well, what is he going to say next?
BARTIROMO: Well he is getting criticized on social media.
COURTNEY: He does need to be careful.
MCDOWELL: He`s gone after how many people? You`re disabled, any kind of group he is has gone after and it hasn`t hurt him.
BARTIROMO: I think disabled thing was too much.
MCDOWELL: Yeah. We feel differently but it doesn`t show up among his supporters.
KELLY: What comes across is he didn`t say this out of malice, right?
BARTIROMO: Right. Yeah. I know.
KELLY: At least this is coming across, where you don`t see he`s meaning any ill intent on them.
BARTIROMO: All right, we want to want to talk about jobs this morning. We are just about two hours away from the final jobs report of the year. Of course, this is before the Fed meeting. What impact will this number have on Janet Yellen and her likeliness to raise interest rates at the December Federal Reserve meeting? December 16th is that meeting. We`ll preview it next.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back, good morning. I`m Maria Bartiromo; happy Friday. It is Friday, December 4th. With me this morning is Fox Business Network`s, Dagen McDowell; Recon Capital`s, Kevin Kelly; and, Monster`s Worldwide, Joanie Courtney. Your top stories right now, at 6:30 a.m. on the East Coast.
We`re following the very latest developments out of San Bernardino. Law Officials exploring links to terrorism. We still, though, do not have a motive. A search of the suspect`s home uncovered a dozen bombs, bombs making material, thousands of rounds of ammunition. This coming as we learned the names of the 14 victims who were killed. Thousands of people attended the candlelight vigil last night in San Bernardino.
The top story for markets today, meanwhile. The November jobs report, one day after a pretty good disappointing about Mario Draghi, and the European central bank, the day we looked at 200,000 jobs added in the economy for the month of November, and the unemployment rate stays steady at 5 percent. Checking markets ahead of the number we know yesterday that markets were disappointed by not enough stimulus from the European Central Bank. Today, pretty good bounce back, now, Industrials right now looking to open up 60 points. Then you have weakness this morning, however in Europe, the loss there are extending after yesterday`s big sell-off, as you can see, the FTSE 100 down a fraction, but the CAC and Dax index in Germany down 1/2 percent of Phi.
Overnight in Asia, sharp losses on the heels of the big sell-off in U.S. stocks yesterday, check out the Nikkei average in japan down, better than 2 percent, to shanghai in china down 1-2/3 percent, they were hit the hardest in Asia.
We`re also watching oil prices this morning. OPEC is meeting today. There`s been a real debate among members of the cartel, whether they will cut production in the recent decline in crude oil. We now at $41 a barrel, that`s up 1 to 2/3 percent. We take you live, to the CB group in Chicago, for a report on oil. But first, our top story this morning, the November jobs report due out in about 2 hours, 8:30 AM Eastern. The economy is expected to create 200,000 new jobs. That`s non-farm payroll jobs. The unemployment rate is expected to hold steady at 5 percent. Investors will also be watching for any change in the labor force participation rate, currently at its lowest level since October, 1977. And of course wage growth, big story as well, we will talk about that as well. Whether or not, we`ll going to see actually any change in wages. We want to bring in the Wall Street Journal, chief economics correspondence, right now, Jon Hilsenrath. Also joining the conversation is Michele Meyer, she`s deputy head of economics at Bank of America Merrill Lynch, happy to see you, Michelle.
MICHELLE MEYER, BANK OF AMERICA MERRILL LYNCH DEPUTY HEAD OF ECONOMICS: Good to be here.
BARTIROMO: Thanks so much for joining us. Jon, we`ll kick this up with you, your expectations to the jobs report, and how important it is ahead of the Fed meeting.
JON HILSENRATH, WALL STREET JOURNAL CHIEF ECONOMIC CORRESPONDENCE: Well, you know, actually, I don`t think it`s that important. Because, I think we`re taking a huge disappointment at this point, to stop the Fed from raising rates next week. Janet Yellen is been signaling all week that they are in fact to do it. You know, I think if we get a report, which is along the line that you just laid out, 200,000 payroll gains and a 5 percent unemployment rate, then they go in a week and half.
BARTIROMO: Yeah, that`s a good point. That means, sort of baked in the cake at this point. Michelle, you are actually below us estimates.
MEYER: We are modestly below 180,000, in terms of job creation. Because we`re going to see probably a payback from the exceptional job creation we have on the last month, at 271,000. But the trend is going to be quiet robust, and I very much agree with Jon. I think it`s going to be hard for the jobs numbers this morning to stop the Fed from hiking interest rates.
(CROSSTALK)
DAGEN MCDOWELL, MORNINGS WITH MARIA HOST: How bad would it have to be?
(CROSSTALK)
HILENRATH: Dagen let me lay out some numbers for you. If we look to get 50,000 on payrolls, three month average payroll, even with a 50,000 number today, is still over a 150 - around 150,000. So, that`s a pretty bad numbers. And as Janet Yellen said yesterday, some number above 100,000 is actually enough to keep the unemployment rate coming down.
(CROSSTALK)
KEVIN KELLY, RECON CAPITAL PARTNERS CIO: It is foregone conclusion that they are going to raise rates, because job numbers aren`t the only numbers that are looking at. But what the jobs number will do will impact the pace and rate of they think increased rate. I mean, look at the last time the Fed raised interest rates, from 2004-2006, they did it every single meeting for 17 meetings straight, right.
(CROSSTALK)
KELLY: They went from 1 percent up to over 5 percent, right, so 5.2 to 5 percent.
BARTIROMO: So, in a two year period they raised rates 17 times. KELLY: And this gets back to what happened with the ECB, yesterday. I mean, they`re looking at the stronger dough. They`re looking at a lot of things that are happening in the market. So, what they`re going to see is a bad number, they may raise rates at a slower pace.
CHERYL CASONE, MORNINGS WITH MARIA HOST: I think it`s so much more than just that top line number too. I mean, we talked about that, but Janet Yellen, have said throughout the whole year they are really looking at wages and labor participation rate, and that is going to be a big thing when this report comes out. Did we see more people enter back into the work force? Are they feeling optimistic about the, you know, the opportunity to participate. Will we see any movements there Michelle.
MEYER: And I think that`s something that Yellen actually talked little about yesterday, the idea that she still believes there is hidden slack in the labor market looking at these broader measures, the unemployment rate ease 6 measures, marginally attached workers to labor force. So, it`s been discouraging the fact that the participation rate has remained stubbornly low, but I think there`s still hope out there that at a minimum it could stop falling, and could start to stabilize. And that`s another reason that you want to keep policy a little bit more accommodating. If you believe there is capacity out there for people to join the labor market, you want to keep the economy growing as strong as it can, as long as it can.
HILSENRATH: But the only way to do that is actually for the Federal government to come in and actually start -- stop having growth tampering initiatives like the affordable care act, like all this overreach of regulation, right. That`s how you removed slack.
(CROSSTALK)
CASONE: You know what, that could really have a negative impact in 2016. Because it will be -- the Obamacare will be fully implemented and that means that employers will be, you know, impacted by having all of these additional costs for medical. We are seeing small businesses, even midsize business, and now it`s going to be larger employers that won`t be able to afford the health care.
(CROSSTALK)
MCDOWELL: What is the benefit though? Because getting ready for that tax.
HILSENRATH: One point on the Federal government side. We could talk all day long about the impact of regulations, and there`s a lot of talk about how that has affected the willingness of people of businesses to hire. But it is also the case that the head winds coming from fiscal spending having reseeded a little bit, and we actually could get a little bit more out of that in the next year. In other words a little more growth into this, for instance, from this highway spending bill.
BARTIROMO: Jon, let me ask you about the ECB. Did the ECB miss the mark yesterday? What a reaction. They were really -- markets were really disappointed.
HILSENRATH: Mario Draghi has developed this habit of telegraphing what it`s going to do next. And the last time he moved in January, he over delivered, so I think markets were expecting him to be fairly aggressive and they didn`t get it. You know, the ECB is another reason why we were talking earlier about how the Fed is going to be moving slowly in this whole process. You know, with the ECB in easing moves, the Fed is very reluctant to tighten very aggressively. You know, I think we`re going to have the same conversation that we had in 2015, all over again in 2016. But when are they going to do it next? Not this meeting, not that meeting, not the next meeting. It`s going to be a long wait, I think, for the second move.
BARTIROMO: That`s where they are, because he constantly comes out and says everything is on the table. We`ll do whatever it takes.
(CROSSTALK)
MCDOWELL: I actually find that irritating, that investors are so dependent on the extremely loose money and extremely cheap money. They already have negative deposit rates, negative deposit rates in an environment that is not crisis. Suck it up.
(CROSSTALK)
CASONE: I don`t know.
(CROSSTALK)
KELLY: Emerging expectations for investors and that what we saw yesterday. Draghi over promised and under delivered, but he doesn`t have that much ammo to use in his arsenal. I mean how many bonds he can buy? There is lack of liquidity in bonds for him to actually purchase. So he hasn`t affected deposit rate, which is already negative.
MEYER: A lot of it comes to the communications, has open mouth operations. One of the key ways that policy works is through guidance. So, for Draghi and for other central bankers, it is not only what they actually deliver or what they are promising about what is coming. And so I think that is what he was attempting to do, we are putting additional accommodation and we promise we`re going to remain accommodative if the economy warrants it.
BARTIROMO: Real quick with the U.S. economy, Michelle, 2016 do you expect we could go into a recession? That`s the debate arriving every day, because we know that`s caught on in the industrial side of the economy.
MEYER: You`re right. You`re right, and we listen to our analysts covering industrials. They`re so downbeat, but we are not in a recession camp. We still think that there`s room for further expansion. You know, you`re talking about low to mid 2 percent growth, it`s not a spectacular performance in the economy. But we don`t think were at the point where the business cycle is turning. There`s still room to recover.
KELLY: And the service economy is doing well.
MEYER: The services economy is doing well. The housing market has room to recover. We first finally starting to see fingers crossed, recovery wages and that`s going to be a stronger consumer spending. So there are still a lot of positive stories that you can tell outside of the weakness of the industrial sector.
BARTIROMO: Alright Michelle, good to see you.
MEYER: Good to see you.
BARTIROMO: Thanks so much, Michelle Meyer and Jon Hilsenrath, always a pleasure, we will see you soon sir.
HILSENRATH: Thanks a lot.
BARTIROMO: Thank you, 2015 officially the biggest year ever for mergers and acquisitions. We`re could be on the way, Nicole Petallides on that story this morning, next.
NICOLE PETALLIDES, FOX BUSINESS NETWORK: That`s right. Good morning Maria, good morning everybody. The Wall Street Journal reporting this year, is the biggest ever for mergers and acquisitions. There was a series of 112 small deals announced this week, that push the year into the record books of a total of just over a $4.3 trillion in global M&A volume. This is struggling beauty products company, Avon, it`s getting closer to selling its North American business to private equity firms Cerberus Capital. The Wall Street Journal reporting the deal will help to strengthen the company`s balance sheet and allows servers to become Avon`s biggest shareholder. That deal is expected to close sometime this month. And of course, some of the big deals would be Pfizer-Allergan, Dell-EMC, SABMiller and of course Anheuser-Busch InBev, those and other, Maria.
BARTIROMO: Yeah, a lot of deals, particularly in health care as well. I know that is one of the most important sectors, Nic, thank you. Don`t forget to start your day, every day with Nicole on FBN:AM, catch it right here on the Fox Business Network, each weekday 5:00 AM Eastern, right before Mornings With Maria. Up next, an arsenal of bombs and weapons found in the home of the San Bernardino shooters, as the Pakistani born wife potential terror ties our probe. We will have more about the wife, coming next. Then HBO, dropping hints about the next season of Games of Thrones, including the possible return of one beloved series regular.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. The headliner of the Super Bowl halftime show has been announced, Cheryl Casone has it and any other stories right now, Cheryl.
CHERYL CASONE, MORNINGS WITH MARIA HOST: That`s right, good morning Maria. Well, the NFL announcing that Cold Play will lead the halftime show at Super Bowl 50, in February. The band has sold more than 80 million records worldwide. Super Bowl 50, set to take place February 7, in Santa Clara, California. A familiar face will grace the front cover of Playboy`s final nude issue. Pamela Anderson is going to be featured for a record thirteenth time, after the magazine announced in October, it will no longer show pictures of naked women. The magazine hits newsstands a week from today. She`s 48 years old, by the way. And finally, the first of Game of Thrones, teaser trailer for season 6 is here. And if you are not caught up, turn away from your television, but if you want to see this, go ahead and watch. (BEGIN VIDEO CLIP)