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Hillary Clinton Ekes Out Narrow Victory in Iowa; Trump Loses to Cruz in Iowa; Japanese Military on High Alert as North Korea Apparently Prepares



in Iowa; Japanese Military on High Alert as North Korea Apparently Prepares

Missile Test; Futures Flat; Fuse Of The Machines; North Korea Launch Plan;

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Congress; Economy; Elections; Government; Pharmaceuticals; Politics; Polls;

Iowa; New Hampshire; Hillary Clinton; Wall Street; Chipotle; CDC>

BARTIROMO: They need --

JEANNERET: -- electric meters, watch that happening. Under Armour's deal for My Fitness Pal. You know, the internet of things, wearable devices, connectivity, creating greater connectivity to the consumer using the internet as a way to partner. So I think you see a lot there.

BARTIROMO: How much of this is activists, I mean, you know, when you talk about like 100-year-old companies like a DuPont, I mean, you know, Nelson Peltz pushing that deal?

JEANNERET: Well, you know, we saw a 20 percent uptick in the number of deals initiated by activists last year. And let's face it, those companies traded up better. At the end of the day, companies that were underperforming in the activists' intervention, their stocks improved dramatically after that.

So I think there's still opportunity for the activists. They're approaching it differently today. They're coming in around operational issues, because the one giving activists have done, if you want to debate how they're there, they forced a proactive approach by corporate America to deal with their portfolio.

UNIDENTIFIED MALE: What percentage of these deals are tax inversions or being done to avoid US taxes?

JEANNERET: Little. I mean, there's --


JEANNERET: -- a lot of talk about M&A.

UNIDENTIFIED MALE: Way less than people think.

JEANNERET: There are thousands of M&A.


UNIDENTIFIED MALE: We had bigger deals.

JEANNERET: Ten thousand. Sometimes. Sometimes. But they're in a very -- the volumes are very small. They've been concentrated in one industry. It's arguably the U.S.'s most competitive industry, life sciences, against a global set of competitors who are dealing with a much lower tax key.

So they sweeten -- they sweeten the evaluation. There rarely done for just inversion reasons.

BARTIROMO: You would -- you would think. But I mean when you've got any a 14 percent tax rate and Ireland and a 35 percent tax rate here, it makes sense.


UNIDENTIFIED MALE: Well, the argument is that it's cheaper for foreign companies to invest in the United States than the United States companies to invest in the United States, and that's the main argument for Pfizer- Allergan deal that they're coming out with.

JEANNERET: And price their products, too.


JEANNERET: They have a whole different cost structure. So at the end of the day, it is very strategic. It's largely in one industry, and is a handful of deals.

UNIDENTIFIED MALE: But is the healthcare space kind of blocked off in the life sciences like you said, because of the -ersion overhang?

JEANNERET: No, I think you're going to continue to see activity. I mean, you know, inversion is not the primary reason driving the sciences. You know, this focus on being number one or number two in market around patient therapeutics, that's driving activity there.

The biotechs can't get the market, as he talked about. No IPOs. Expect them to be a bigger place this year. Expect more consolidation with them as well. There's a lot of room to go in healthcare as well, as we converge around the patient.

BARTIROMO: That makes a lot of sense. Plus, and then when there's not a lot of growth, you acquire growth.

JEANNERET: You acquire growth, and the market's saying we're going to we're going to reward you for doing that.


JEANNERET: There is a lot of synergy to be gained. There's a lot of scale play and a lot of these deals that are getting done, particularly in the slower growth industry. You've seen a couple of deals in ag right now.

You know, there's a global recession right now. The companies that were driving that industry, lots of inventory's been built up. They're not buying as much. So what are you do to grow? You combine. You drive out costs.


JEANNERET: You get accretive outcomes.

BARTIROMO: Yes, makes sense. Rich, good stuff. Thanks so much.


BARTIROMO: We'll see you soon. Rich Jeanneret, EY.

Up next, she might not be the halftime show, the Lady Gaga will certainly entertain fans at Super Bowl L with her rendition of the National Anthe. We have a sneak peek of one very expensive Super Bowl commercial.


BARTIROMO: Super Bowl Sunday, one of the only days were people do not fast-forward through the commercial, so it's no surprise some companies are paying as much as $5 million for a 30-second spot. Our next guest guarantees its ad will be money well spent. Take a look.


UNIDENTIFIED MALE: Do you know where my beige socks are?

UNIDENTIFIED FEMALE: Check the walk-in closet.


CHRISTOPHER WALKEN: There are two types of people in the world. Those who are content to blend in. These people walk through life like beige socks. And there are those who expect more. The exciting. They have pizazz. Eventually, the beige sock people get devoured by the ones who stand out. Do you want to be devoured?



BARTIROMO: Michael Sprague is with us. He is the Chief Operating Officer for Kia Motors of America. Michael, good to see you.


BARTIROMO: Thank you so much. I want to ask you about business, but first, we've breaking news on General Motors, Anthony Scaramucci.

SCARAMUCCI: Yes, just quickly on GM. They beat estimates handsomely, 139 versus 120. But the real thing about this, Maria, is that it's another sign that there will be no recession in the United States in 2016.

BARTIROMO: So we got good numbers from GM. How would you characterize business right now? And I then I want to ask you about the Super Bowl ad.

SPRAGUE: Sure, for us, the business has been great.


SPRAGUE: We had a record year in 2015. Sold over 600,000 vehicles. The first time ever, we beat the industry. So we're really excited about 2016.

BARTIROMO: That's like one of the -- one of the few areas of the economy that's doing really well --


BARTIROMO: -- is the auto sector. What's behind that?

SPRAGUE: Well, obviously gasoline prices being low. There's a lot of pent up demand for vehicles as well, and just it's an exciting category to be in.

UNIDENTIFIED MALE: SUVs, right? People are moving in that direction.

SPRAGUE: Yes, definitely. There is a transformational shift from cars to SUVs and CUVs and pickup trucks, and that's because the technology from a fuel economy standpoint has improved massively over the last couple of years --

BARTIROMO: I like --

SPRAGUE: -- so people are moving into that.

BARTIROMO: -- I like the commercial. Why is the Super Bowl so important for you?

SPRAGUE: Well, for us, it definitely -- it's paid off. This is the seventh year that we're in the Super Bowl. The metrics are there. We see people shopping on our websites coming in or going into third-party automotive search sites as well and then coming into our dealerships and by our cars.

BARTIROMO: I'm deeply obsessed with Christopher Walken. Who picked him? Who cast him? Whose idea? Who takes credit?

UNIDENTIFIED MALE: That was my question.


SPRAGUE: Our agency came up with the phenomenal idea, and there was only one person obviously that could fit that role, and that was Christopher Walken and the whole walk-in closet. So he's phenomenal. He's iconic. He's so cool. And it really kind of portrays how we want to position ourselves as a brand as well.

BARTIROMO: And earlier I asked you what's the -- you know, give me the fail stick.

UNIDENTIFIED MALE: Did you see the car though? It looks like he couldn't fit in one of your cars.

SPRAGUE: Oh, absolutely.

BARTIROMO: Why buy a Kia? Tell me how you would answer it.

UNIDENTIFIED MALE: You've got -- you've got the Sorrento.

SPRAGUE: Sure, we've got -- we've got 12 different vehicles. He's actually helping us could pitch the Optima, which is our best-selling midsize sedan, which is basically kind of a boring segment. We really are standing out, and he's helping a showcase that.

BARTIROMO: It looks gorgeous, Michael. We'll be watching the commercials on the Super Bowl. Thanks so much for being here.



BARTIROMO: Good luck with it.

SPRAGUE: Thank you.

BARTIROMO: Michael Sprague there. We'll be right back.


BARTIROMO: Welcome back. Good morning. I'm Maria Bartiromo. It is Wednesday, February 3rd. With me this morning, Fox Business Network's Dagen McDowell, Recon Capital's Kevin Kelly and SkyBridge Capital Founder, Anthony Scaramucci.

First though, your top stories at 8 a.m. on the East Coast.


(Copy: Content and Programming Copyright 2016 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2016 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.)

(Show: MORNINGS WITH MARIA) (Date: February 3, 2016) (Time: 08:00:00) (Tran: 020303cb.231) (Type: Show) (Head: Defense Secretary Proposes $582 Billion Budget; Luxembourg Hoping to Mine Asteroids; 13 Million People Admit Cheating on Their Spouse Financially; Rand Paul Suspends Campaign; Health Officials in Texas Say the Zika Virus Contracted in the U.S. was through Sex; Yahoo Report Abysmal Fourth Quarter Results; Fallout from Iowa Continues for Candidates as Candidates Shift Focus to New Hampshire; Martin Shkreli to Appear in Court for Securities Fraud Charges; Florida Health Department Confirm Two Cases of Zika Virus in Lee County; Cosmonauts Conduct Spacewalk; Former Senator Scott Brown Endorses Donald Trump for President) (Sect: News; Financial)

(Byline: Maria Bartiromo, Dagen McDowell, Gerri Willis, Cheryl Casone, Nicole Petallides, Adam Shapiro)

(Guest: Michael Berland, Anthony Scaramucci, Kevin Kelly, Scott Brown, Donald Rumsfeld, Joe Arpaio)

(Spec: Trade; Business; Politics; Election; Technology; Zika Virus; Stock Market; Yahoo; GOP; Democrats; New Hampshire; Martin Shkreli; Lee County; Cosmonauts; Scott Brown)

MARIA BARTIROMO, HOST, MORNINGS WITH MARIA: Welcome back, good morning, I'm Maria Bartiromo, it is Wednesday, February 3rd.

With me this morning, Fox Business Network's Dagen McDowell, Recon Capital's Kevin Kelly and SkyBridge Capital founder Anthony Scaramucci.

First though, your top stories at 8:00 a.m. on the East Coast, the presidential field storming New Hampshire.

The fallout from the Iowa caucuses forcing some candidates to shift their tone ahead of the nation's first presidential primaries.


SEN. TED CRUZ (R), TEXAS: Marco made the decision that conscious deliberate decision, not only not to lead the fight against amnesty, but to go and stand with Barack Obama and Chuck Schumer and Harry Reid.

HILLARY CLINTON, FORMER SECRETARY OF STATE: Senator Sanders has a different approach. He shares my goal of universal coverage, but he wants us to start all over.

I think that would be a terrible mistake to throw our country into a contentious debate over healthcare again?


BARTIROMO: The latest on the race for the White House coming up, then the first known case of the Zika virus transmitted in the U.S. has been reported.

Health officials in Texas say the virus was likely contracted through sex, not a mosquito bite.

The Centers for Disease Control confirming this is the first case in someone who had not traveled to a country affected by the outbreak.

Turning to markets this morning, Futures searching for some direction following yesterday's sharp selloff.

They've been moving between positive and negative territories throughout the program today.

And now, it looks like the Dow will open down a fraction. The stock to watch in today's session is Yahoo.

The company reporting abysmal fourth quarter results after the close last night. Yahoo said it will cut 15 percent of its workforce.

It is exploring strategic alternatives for its web business, and that includes a sale.

First though, our top story. The fallout from Iowa continues for candidates as their focus now shifts to New Hampshire.

Joining us now is former Hillary Clinton strategic adviser and Edelman Berland CEO Mike Berland, good to see you, Mike.



BERLAND: So, if we look back at the analytics of what happened in Iowa, we see the Trump wall fall.

And I couldn't believe it, going into it, we saw he had plenty of strength. But if I look at the analytics of Friday, Saturday, Sunday and Monday.

We see that Trump actually made this closing argument of why he didn't go into the debate. And so he entered the campaign early and Cruz and Rubio took over.

So, you know politics is a momentum game. And look at the analytics. We see that Rubio actually crested(ph) managing expectations that he was going to come in third.

We saw that Cruz came on strong and Trump disappeared. Why? Because what else could he say?

He explained why he didn't go in the debate. He had nothing to say all weekend, he lost a momentum --


BERLAND: He lost Iowa, it's all in the analytics.

BARTIROMO: So, what happens now in New Hampshire?

BERLAND: Well, I think he's got to get the momentum back, he's got to put Iowa really behind him. Look, I was in Iowa in 2008.

It's hard to caucus. Trump's got to just put it behind and go forward, and he can't talk about it anymore.

Because, look, when we look at the winners and losers coming out of Iowa, we see Hillary winner, Sanders huge winner, Cruz winner, but not going to be important next week.

Rubio, he's got to make his point. So, now, we've got to -- we really got a Rubio versus Trump to see if Rubio can take that Trump wall down again.


ANTHONY SCARAMUCCI, FOUNDER & CO-MANAGING PARTNER, SKYBRIDGE CAPITAL: Let me be the Trump advocate for a second, that was an evangelical state, unlikely for him to do much better than he actually did.

We can debate that for a second. But he is crushing the competition in New Hampshire. And so, why not like these other candidates less focus on Iowa, now moving into New Hampshire.

He's got a 22-point lead.

BERLAND: Fine. In 2008, you know, I was working for Hillary, Obama had won Iowa, he had a 10-point lead in New Hampshire and we won.

The game starts all over again, and Trump -- look, Trump has run a master ball --


SCARAMUCCI: With the 22-point lead in New Hampshire? He's vulnerable --


Election only a couple of days away.

BERLAND: He's vulnerable to come down. Trump has got to get his momentum back, he's got to go talk about winning and he's got to forget that Iowa happened.

Because Rubio has got the momentum and politics is momentum game. Look at Hillary and Obama in 2008, New Hampshire makes up its mind fresh.



KELLY: New Hampshire, Chris Christie has bet his entire campaign pretty much on New Hampshire.

But I was looking at that info graphic you just had up, and he was in a different category with Rand Paul, what was that?

BERLAND: Well, what I did -- they're so low that they didn't really come up. I mean, Christie and Kasich all, you know, didn't even participate.

They're going to come into New Hampshire, but I think it's right now with Christie -- and with Christie, with Kasich, they're going to move up, I think they eat into Trump's lead.

It's a new game, guys, and we've got to really see what happens.


BERLAND: We've got to move forward.

DAGEN MCDOWELL, FOX BUSINESS: But his first response on Twitter was to whine about the media and say I didn't get enough credit for my -- well, it was a loss, he lost.

You were number one in the polls bragging about that incessantly, and then he was whining about his -- the media treatment.

BERLAND: He raised --

BARTIROMO: But he raised money for vets is what he's saying.

MCDOWELL: Right, but they're -- he said literally, I didn't get enough credit from the media for my historic second place finish in Iowa.

That was like one of the tweets.

BERLAND: Trump, that's what Trump should be saying. I came in second in a state where I had no chance.

I got a 30-point lead, a 20-point lead in --


BERLAND: New Hampshire, I'm going to dominate. He's not doing that, he's got to get on his game.


SCARAMUCCI: First time politician to be in that position in Iowa and then ramping into New Hampshire speaks a lot about his talent as a politician.

BERLAND: Look, I -- again, first time politician made a rookie mistake of not closing the -- of not closing the campaign the right way, closed it too soon, got beat by two --

SCARAMUCCI: Or could it be this is an adaptable guy, I think he's going to come out --

MCDOWELL: I have a question on that. Is he -- does he need to run more traditional TV ads in New Hampshire --


MCDOWELL: Because it's -- OK --

BERLAND: Trump needs to be -- Trump needs to be Trump, but Trump needs to get back to Trump.

And then he's got to -- he's not -- he's got to not have the state engulfed -- they say forget the -- forget the last shot.

He's got to forget the last --


BERLAND: Election.

BARTIROMO: I've got to move on to the -- to the Dems here because of the coin toss is really being talked about right now.

How is it possible that six coin tosses in a row, Hillary won.

BERLAND: You know, Maria, there's no coin toss, Hillary won --


No, according to Hillary. I think look, she needed to get through Iowa, this is a big test --

BARTIROMO: No, I want to ask you --

BERLAND: She's not going to go --

BARTIROMO: Specifically about the coin toss.


BARTIROMO: I mean, it's -- could it be that it was set up?

BERLAND: No, what? --

BARTIROMO: No, you think six coin tosses in a row, it went in Hillary's favor. I mean, Bernie Sanders wants an investigation.

BERLAND: He should investigate, but again, the same thing for Hillary, she's moving strongly to New Hampshire, it just doesn't matter.

SCARAMUCCI: I am so glad you're not a U.S. attorney --


You're grilling him away where I don't even know if I can defend him at this point, you know --

BERLAND: But me, I have a question for you, let's move on.

BARTIROMO: Go ahead --

BERLAND: I mean, we should --

BARTIROMO: All right, sure I'll moved on.


SCARAMUCCI: Both sides are unfair. Both sides do --

BARTIROMO: You don't want to talk about the coin toss --

SCARAMUCCI: It to each other --


BARTIROMO: And was it a --


Two-headed coin?


Two heads on the coin --

BERLAND: Who was watching Iowa --

SCARAMUCCI: Be honest about it --

BERLAND: Closer than anyone. Who really won Iowa?

BARTIROMO: Fox News --

BERLAND: Mike Bloomberg.


BERLAND: Mike Bloomberg --

SCARAMUCCI: Mike Bloomberg won Iowa --

BERLAND: Mike Bloomberg won Iowa, because remember the Bloomberg operation --


SCARAMUCCI: Always wins girl, don't ever --

KELLY: Yes --

SCARAMUCCI: Forget that --

BERLAND: Remember the --

KELLY: Yes --

BERLAND: Bloomberg equation, the Bloomberg equation was Sanders plus Cruz equals Mike Bloomberg.

What do we get in Iowa? We got Sanders plus Cruz equals --

KELLY: Wasn't it supposed to be Sanders-Trump equals --

BERLAND: Right --

KELLY: Bloomberg? I thought that was --

BERLAND: No, it's Cruz, he's happy for Cruz. So, I think -- look, what this really means is we got through Iowa.

As I've said the whole time, Iowa is not predictive. New Hampshire is a little bit more predictive --


BERLAND: It's a little bit more predictive, let's see what happens -- we still -- this game is going to be decided on super Tuesday.

And so, we've got to just wait to get there.

BARTIROMO: And that's March, so we'll know --

BERLAND: We've got a couple more weeks to go through it --




MCDOWELL: Ted Cruz sounds like Ross Perot all of a sudden on the radio, he needs to work on that.

BERLAND: I don't know what's going to happen, I think that Ted Cruz is going to disappear.

He's not in New Hampshire. And he's probably -- he's already down in South Carolina.

BARTIROMO: Wow, well, saving -- get me one of those coins, will you? I'd like that.


Mike -- joining us.

A day -- OK, one day --

SCARAMUCCI: That's good --


BARTIROMO: After telling me in an exclusive interview that he's innocent. Alleged fraudster Martin Shkreli is doing Brooklyn federal court with his new attorney later this morning.

Adam Shapiro is there right now with the very latest. Adam, good morning to you.

ADAM SHAPIRO, FOX BUSINESS: And a good morning to you, Maria. Your exclusive interview with Shkreli has really made some headlines.

And of course it's that statement he made about the securities fraud charges which he faces in criminal court.

He says they're meritless and they're baseless. In fact, here is what he told you yesterday.


MARTIN SHKRELI, FORMER CHIEF EXECUTIVE OFFICER, TURING PHARMACEUTICALS: You know, obviously I think that I'm innocent, not guilty and so forth. The government alleges a Ponzi scheme, so-called Ponzi scheme.

Despite that, all of my investors were very successful -- and our funds, and usually in Ponzi schemes, someone loses money, and the government can't find that -- that part of the so-called scheme.

So, we think their charges are baseless and meritless and we'll be victorious.


SHAPIRO: And of course, what Mr. Shkreli didn't tell you is that the government had been investigating him starting back in 2014, essentially over the transfer of assets from a different pharmaceutical company at which he was the CEO to investors in a hedge fund.

In fact, there's an e-mail in which he discusses this transfer with his attorney, that's sure to all come out when this -- if this goes to trial.

His new attorney as you found out yesterday, another headline from your interview. Ben Brafman who has defended in the past people like Sean P Diddy Combs, 1999 on illegal weapons charges and bribery charges acquitted.

Plaxico Burress, he pled guilty two counts of criminal possessions of weapons, and then it was Dominique Strauss-Kahn, who can forget DSK, charges were dropped.

That is part of Ben Brafman's record. They're due here in court at 10:00 a.m., back to you, Maria.

BARTIROMO: You know, we're here on set, Adam, and Kevin just said, one of the things that he wants -- say that, Kevin, what were you saying?

KELLY: Yes, I think Martin just wants to be in the company of the people that we just had on screen with Jay Z, Michael Jackson and all the other --


KELLY: Celebrities that were out there. I think that's all he really wants and that's why he retained it.

BARTIROMO: The attention --

KELLY: Yes, of course --

SHAPIRO: Well, as you pointed out in the interview yesterday, Maria, he's got this ongoing battle with Ghostface Killah, the popular rap artist.

And people say that Shkreli is one of the most hated people in the country. There's a huge following of people on YouTube who do not hate Martin Shkreli.

And just some statistics about him, he's worth about $45 million and he's only 32 years old. That figure comes from the disclosure forms filed to the court.

BARTIROMO: All right, Adam, thank you. We'll check back as news develops, Adam Shapiro live in the court house tonight -- this morning.

Up next, live pictures from outer space. Astronauts about to embark on a routine space walk.

There is nothing routine about these pictures, back in a minute.



BARTIROMO: Welcome back. More cases of the Zika virus turning up in Florida. Cheryl Casone with the story and the check of the other headlines, Cheryl.

CHERYL CASONE, FOX BUSINESS: We just keep getting more numbers, Maria. The Florida Health Department confirming two cases of the Zika virus in Lee County.

And this brings the state's total number of infections up to nine. It is still unclear where the New County residents contracted the virus.

In a related development though, Texas health officials now identifying a sexually transmitted case of the virus in one of its residents.

Report say that the patient was infected after having sexual contact with a sick person who had returned home from Venezuela.

OK, check out this video. A passenger on a Daallo Airlines flight in a -- getting sucked out of a plane at 14,000 feet in the air after a suspected bomb blasted a hole through the side of the fuselage, just five minutes after takeoff.

Airline officials claiming that two people were also hurt in that blast. Somalia officials say there's no evidence so far that suggests criminal activity, but the investigation is ongoing.

And finally, I want to show you these live pictures out of space. You are looking at the -- right now, this is NASA television.

Two cosmonauts conducting a spacewalk. This is happening live right now, they're installing experiments on the outside of the international space station.

This is expected to take a little more than five hours. And now, you're looking at pictures of Yuri Malenchenko and Sergei Volkov, of course commander Scott Kelly also is up in space with them.

As well as another American astronaut and a European astronaut as well. So, we're going to be watching these live pictures for you.

And then finally, one more Super Bowl 50 piece of news for you. They've added another big name to the entertainment roster.

The NFL just announcing that Lady Gaga is going to be singing the national anthem during the pre-game festivities.

Her performance is going to be broadcast right before the kickoff of the game. Again, Denver Broncos, the Carolina Panthers on Sunday.

It should be a really great game, Maria, I don't know if you love football as much as I do, there's no cowboys this year, but I'm thinking Carolina is going to do pretty good.

BARTIROMO: Well, you're going, Anthony, right?

SCARAMUCCI: I can't wait.

BARTIROMO: Cheryl, you're going to be --


Reporting live from the side of Super Bowl 50 all day Friday, that's going to be great because I know you have lots of -- lots of great guests.