Candidates Make Final Push for Votes in New Hampshire; Chipotle Restaurants
Across the U.S. to be Closed for a Company-Wide Food Safety Meeting; More
Winter Weather Braces for the East Coast; Peyton Manning Help Lead the
Broncos to a Super Bowl 50 Victory; U.N. Security Council Condemns North
Korea's Long Range Rocket Launch; Obama's Administration Ask Congress for
More than $1.8 Billion in Emergency Funding to Prepare for and Respond to
the Zika Virus; China Celebrates Year of the Monkey New Year - Part 5>
Petallides, Blake Burman, Phil Flynn>
Chipotle; Stock Market; Weather; Denver Broncos; U.N.; North Korea; Obama;
Congress; Zika Virus; China >
MCDOWELL: And I kind of like the glitter eye makeup too. That's what women remember from the Super Bowl. I'm just joking. I'm just joking. The game was great. The ads were okay. There you go.
[Cheers and Applause]
BARTIROMO: Beautiful. Beautiful.
MCDOWELL: I always tear up. I always tear up, but I always tear up at the National Anthem. I sing it in at the shower and I'll cry. So --
BARTIROMO: It was just beautiful. All right, markets this morning really getting crushed. We have two major things to talk about that we've got to get your take on, Matt, and that is Janet Yellen going to the Hill this week. She's going to be speaking with House Financial Services on Wednesday and the Senate Banking Committee on Thursday; and we have to retail sales numbers out on Friday. Why do you think the market is so weak, Matt?
MURRAY: Because I think that nobody knows exactly what's going to cause it to do better. I mean, the signals are blinking yellow or even red in most cases. What is there to get excited about? China is slumping. Europe is slumping. We can see it reflected in the yields. There's a flight to safety. The dollar is strong.
As we reported this morning, a lot of companies are very shaky on capital spending and the retail sales, which I've heard you talk about on the weekend too, you know, that'll give us some sign where the consumers are at but I just don't think anybody knows quite what's going to propel us out of this funk right now.
BARTIROMO: They haven't been much in terms of spending money. We'll talk more about it. Coming up, could winter weather wreak havoc on New Hampshire primary? The forecast before voters' head to the polls, coming up in a next; back in a moment.
BARTIROMO: Welcome back; the Northeast bracing for another massive winter storm. A blizzard warning in effect for parts of New England right now. Fox Meteorologist Maria Molina in the Weather Center. Maria?
MARIA MOLINA, FOX METEOROLOGIST: Hi; good morning, Maria. That's right, we are tracking a massive winter storm that's going to be impacting areas across eastern New England. That's really the area that's looking at some of the more significant impacts and that's due to the storm track that this particular storm is taking, and you can see that snow already moving into areas like the Cape and extreme eastern parts of Long Island. It's going to be coming down throughout the day today. We are expecting over a foot of snowfall accumulation across eastern parts of New England and then some lessor amounts where we have winter storm warnings in effect across Massachusetts, Rhode Island, eastern parts of Connecticut and Long Island. That's - those areas are expecting as much as 4-8-inches of snowfall throughout the day today, as that storm system continues to impact the area; but the entire region could be looking at some snowfall accumulation anywhere from parts of Maine all the way down to New York City, as the storm system continues to hit our area, with some strong gusty winds and also some heavy snow.
Meanwhile that system exits later today and then our next one is already on the move, impacting parts of the Mid-Atlantic throughout the day tomorrow. It could bring several inches of snowfall accumulation. So that's going to be something to watch very closely. We'll have more on that later but everyone is watching New Hampshire, what the impact could be at the polls. It looks like through Tuesday we could see some snow accumulation with heavier totals on southern parts of the state of New Hampshire. Let's head over to you.
BARTIROMO: All right, Maria. Thank you so much, Maria Molina. We'll keep checking back.
Up next, the world on high alert after another widely condemned rocket launch in North Korea. We've got the details. Stay with us.
BARTIROMO: Welcome back; massive fallout erupting after North Korea conducted a long-range rocket launch yesterday. Nicole Petallides with the details on this and the other headlines right now. Nicole, good morning to you.
NICOLE PETALLIDES, FBN CORRESPONDENT: Good morning, Maria. Good morning, everybody. (HEADLINES)
BARTIROMO: Nicole, thanks; we'll be watching that. Don't miss my interview, coming up, with the President of Moe's Southwest Grill later this hour; how his chain is capitalizing on the missteps at Chipotle's, why customers are safe there from the illness. We will talk to Bruce Schroeder coming up.
Futures getting slammed this morning. We are expecting a much sharply -- much weaker opening this morning, once again. The continuing selling is persisting, Dow Industrials down 200 points.
As we head to a break, here's one of our favorite commercials from last night's big game.
(Doritos Commercial Played)
BARTIROMO: Hi, everybody; happy Monday. Good morning, I'm Maria Bartiromo; it is Monday, February 8th. With me this morning, Fox Business Network's Dagen McDowell and "The Wall Street Journal's" Matt Murray. Your top stories right now, at 6:30 a.m. on the East Coast: (HEADLINES)
Phil Flynn with CME Group with what is driving the downside on oil. And Phil, that is setting the tone for global markets this morning.
PHIL FLYNN, PRICE FUTURES GROUP: It really is. What is leading what? Is it the oil leading the market lower or is it that markets leading oil lower? And that is a big concern. It's all about demand right now and demand expectations.
When you are seeing the confidence in Europe right now it's hitting the lowest level we have seen in 10 months, it really is raising those concerns about a global recession.
On top of that, you had a big meeting this weekend between Venezuela and Saudi Arabia. They talked about stabilizing oil prices, but they really didn't come up with a plan so that is diminishing hopes that we is going to see an OPEC production cut anytime soon.
Now the other part of this factor right in here when we look at the price of oil is it's really becoming a barometer for economic growth.
When the stock market is weak, we are having a hard time rallying. We have a record amount of speculators in the market right now.
More people buying and selling oil right now and it is a battle right now to see which way we will go. We are trying to hold $30. Back to you.
BARTIROMO: All right, Phil, we will be watching that. Thank you so much, Phil Flynn.
Let's look at equities here. The major averages poised to extend the selloff on Friday. Joining us right now is Highland Capital co-founder and chief investment officer, Mark Okada.
Also with us on set is JPMorgan Private Bank head of equity strategy, Steven Reese. Gentlemen, good to see you. Thanks so much for joining us.
Let me kick off this with you, Steven. You got Janet Yellen on the Hill Wednesday and Thursday, and then the retail sales number out on Friday. To what do you attribute the weakness this morning?
STEVEN REESE, JPMORGAN PRIVATE BANK: I think it's more at the same. Markets are right now in a risk with concerns in China and oil has not been a bottom yet. In the earnings picture, there is nothing to get excited about.
The overall sentiment coming out of the corporate is, I would say, neutral at best. You know, we are seeing some strength in places like health care consumer. But take a look at industrial, energy, material, all down significantly year-over-year.
BARTIROMO: Look, people forget, markets do go down, right? Mark Okada, how are you positioned here?
MARK OKADA, HIGHLAND CAPITAL CO-FOUNDER AND CIO: Well, we are defensive. Defense wins Super Bowls and it also wins markets like 2016. We thought the market would a hit a top last year and roll over certainly is doing that.
You mention earnings in here and we are seeing probably the third quarter in a row where we've seen earnings down for four quarters in a row. Markets will struggle to go up in a market like this.
And so you got to stay defensive and raise some cash and look for opportunity, though. I'm not telling people at Highland that we really should just sell the entire market. I think there are things to do.
BARTIROMO: I mean, is there any catalyst on the horizon that you can identify with the view that would change the sentiment of this market? I mean, one idea is the election, but that's all the way in November.
REESE: I think more quantitative easing out of Europe. Don't lose sight of the second half should be better from an earnings perspective just as you start to roll over those dollar comparisons and assuming that oil can find a bottom. I think that is really what can get us going again.
OKADA: Well, I'm not sure that is what the idea that I'm looking for, Maria. The setup here is really something that is going to last for a while. Because of that, we are not looking for some sort of bounce. I don't see the markets doing much of anything from here for a while. So it's going to be much more of a trading sort of market as opposed to looking for some sort of balance.
BARTIROMO: Matt, Dagen, what do you think?
MATT MURRAY, "WALL STREET JOURNAL": I agree with that. I think it's hard to see the catalyst that comes out. My question for them is do you see the consumer at any point coming more to life.
Oil coming down and down. Waiting for the consumer dividend and spinning to break through. Even that hasn't really come through yet. I just don't know if there's a moment where that turns.
REESE: The consumers been really mixed. The earnings picture is quite strong. We are seeing roughly 8 percent to 9 percent growth in that sector. If you don't have an online presence, you are seeing weak trend as well.
So it's something we are watching closely. Our economists are still quite bullish that the U.S. can still grow this year. We don't see the spill over fact, but it's something that we are watching very closely.
DAGEN MCDOWELL, FOX BUSINESS: Front page of "The Wall Street Journal." You are not helping the market today because it is the core article above the fold that big companies are pulling back after a rough quarter.
That half a dozen big companies have announced 14,000 layoffs just in the last couple of weeks, that there is no breath in the economic growth. It's all on the consumer. The consumer has been the sole strong point.
And it totally if you talk to people out there, more and more you get the question, is this economy really heading the wrong direction? Is it going to tank? What do I need to know? You start building on itself and look at below.
BARTIROMO: It is true. Mark, we knew that, right? When we saw the (inaudible) last week it was down 5.1 percent. That is a clear signal that businesses are not investing in their businesses and plants and equipment.
OKADA: Hold on. I think investors are more distress than the investment themselves. If we think about what's going on with the U.S. economy, we are still adding a lot of jobs. You look at the unemployment rate down below 5 percent last week.
I'm not in the can where I think the U.S. economy is falling off a cliff. Companies are doing the right thing at this moment. They are challenged by a higher dollar from a financial standpoint and from a market standpoint, there are a lot of challenges.
But let's not confuse that with what is happening with the overall economy in the U.S. Yes, we are entering into a soft (inaudible) from an economy standpoint.
Yes, global PMIs are rolling over. Durable goods are rolling over per se, but I don't think we are into some sort of recession from an economic standpoint.
Certainly from the financials standpoint, the investments are going to be challenged for a while.
BARTIROMO: OK, so if not, then what's bothering markets?
OKADA: What's bothering markets is the fact that we have had a strong dollar, which is showing up in earnings. We have a question around global growth, which is why really oil is a better barometer of what's happening from a growth standpoint.
As that growth is something that getting much more challenging, what you are seeing in the market is a rotation. A lot of the stocks that were leading this market are more growth type of stocks or momentum stocks.
They are rolling over and you are seeing that in the overall averages and that's why the markets are down. As that growth comes out of the market, it will go somewhere. We think values start to get a bit in there, which is what we saw last week.
BARTIROMO: Interesting. OK, so what Mark is saying, Stephen is that this is really more of an evaluation issue than an economic issue for the U.S.?
REESE: I think it's more of an earnings issue. I mean, valuations look pretty reasonable across the world. There is no pocket that we are worried about.
But for now, we are focusing on staying a bit more defensive with dividend- paying stocks in the health care consumer areas. We also like parts of technology and we're underway avoiding energy, industrials and materials.
MURRAY: Look, what we see right now and what will take away for companies is not that they are really hurting, but they are really short-term focus. They've gotten very good at managing inventories really tightly and managing their employees really, really tightly.
A lot of companies are thinking right now I'm going to be in something of a crutch where I see opportunity, I'll go for it. Again, what propels them out of that mind-set that is what is unclear right now, but that doesn't mean they are in terrible shape. It just means that they are cautious.
MCDOWELL: I think that is how the election plays into what is happening in our economy. What kind of investments do you make ahead of what could be a very different environment in Washington in less than a year?
BARTIROMO: That's a really good point. Look, by the way, you also have a situation where when it does turn, you have a really good situation because balance sheets are very strong. Even individual balance sheets, the savings rate up to 5.6 percent again and obviously the cash on balance sheets at corporates are also --
REESE: The dividend yield of the market is 2.2 percent today higher than the 10-year treasury and there is also a better yield (inaudible). So I think we need to focus on the positives.
BARTIROMO: Right, really good stuff. Mark Okada, good to see you, sir. Thanks so much. Steven Reese, always a pleasure. Thank you very much, Gentlemen. We'll see you soon.
Larry David feeling the Bern on "Saturday Night Live" over the weekend. Did you watch it? More on his take on the Democratic presidential candidate, Bernie Sanders, straight ahead?
Chipotle's E. coli woes putting the competition on high alert. We'll talk to Mo Southwest Grill president, Bruce Schroeder on how he's taking advantage of Chipotle's recent food troubles. Back in a minute.
BARTIROMO: Welcome back. CEO of Twitter running damage control over reported changes to the site. Nicole Petallides on that story and the headlines right now. Good morning, Nicole.
NICOLE PETALLIDES, FOX BUSINESS: Good morning, Maria. Twitter users upset following a "Buzzfeed" report that said the site would soon adopt an algorithm-based timeline. So you would see tweets that Twitter thinks you would like rather than the current reverse chronological order similar to how posts on Facebook timelines are organized. CEO Jack Dorsey tweeting, "We are always listening," and claimed, quote, "We never plan to reorder timelines."
At least four people including an 8-year-old girl have been rescued in Taiwan today from the rubble of a high-rise apartment building. Officials there say more than 100 people are still believed to be under the debris. Two days after the powerful earthquake toppled the 17-story building. Thirty seven people are confirmed dead so far.
Larry David hosted "Saturday Night Live" this weekend and it had to happen. David has been appearing on the show and playing Bernie Sanders. They look incredibly alike. Saturday night, Bernie Sanders took a break from campaigning and actually showed up on "Saturday Night Live" with Larry David.
(BEGIN VIDEO CLIP)
BERNIE SANDERS (D), PRESIDENTIAL CANDIDATE: Enough is enough. We need to unite and work together if we are all going to get through this.
UNIDENTIFIED MALE: Sounds like socialism to me.
(END VIDEO CLIP)
PETALLIDES: Well, Sanders answer to that was Democratic socialism. Back to you.
BARTIROMO: That was really funny, Nic. Thanks so much.
Meanwhile, Chipotle shutting down nearly all of its restaurants across North America today at prime lunch hours for a companywide best practices meeting. The closure coming after the Mexican food chain was hit by different food borne illnesses across the country.
Joining us right now is the president of a company hoping to capitalize on any Chipotle closing. Moe's Southwest Grill President Bruce Schroeder. Bruce, good to see you. Thank you for joining us. Have you seen a benefit to what's going with Chipotle?
BRUCE SCHROEDER, MOE'S SOUTHWEST GRILL PRESIDENT: I think one of the benefits is food safety is not a new issue for our industry and anytime something like this happens especially at this magnitude it reminds us all to stay vigilant. That has certainly helped us all.
BARTIROMO: What do you think was behind the food problems at Chipotle? I mean, we still don't know.
SCHROEDER: Yes, we don't know. I can't really comment or don't understand what that is. You'd have to find out from them.
MURRAY: It sends a chill down your back. Your competitor, you see opportunity I'm sure. Everybody in the industry is talking about this and worried about what happened here
SCHROEDER: Sure, the retail business is a 24/7 business. So some nights you lay awake and worry about things like that, but what you do is to put industry standards in place and set yourself up to make sure you've done everything you possibly can to avert anything like that.
BARTIROMO: So have you made changes to prevent a situation like they are dealing with in any way?
SCHROEDER: Not really as a result of this. We observe the highest industry standards. We actually go beyond them in some cases. We have third-party auditors come in, for example. We are always looking for new technology that might help us be more effective in food safety.
I think the dynamic right now is the consumer has changed their view of quality recently. In the last five years because they are more informed and they are looking for higher quality.
We've redefined quality to mean things like local, hormone free, antibiotic free, GMOs, all those things come into play. We have to make sure as an industry is that our support structure can support those new initiatives.
MCDOWELL: Who is your biggest competitor? Is it Chipotle or is there some up and coming restaurant chain that we don't even know about. Is that how you run your business? They have this menu item or they are this popular.
SCHROEDER: It is all share of stomach. We are fortunately in the hottest place in the hottest category, namely Mexican within fast casual. So fast casual has enjoyed a lot of growth because people are trading up to higher quality or trading down to better value.
So because of that, there's been a lot of new entrants in the category and after the economy recovered everybody got back into the development game. So now there's a whole lot more seats than there are butts so we have to compete against everybody.
BARTIROMO: Let me ask you about that because we've been talking for a long time on this program about people not spending that money that they are saving at the gas pump. It keeps coming up they are saving in some ways and they go to dinner, restaurants. Is that what you are seeing? Characterize business for us right now.
SCHROEDER: We definitely watch gas prices because it's all about discretionary income and the more discretionary income, people will have more they are likely to spend with us. People spend more money eating out than they do at the grocery store.
So that happen probably six or eight years ago. Now it's just a matter of making sure you offer the values so that you can snatch them when they have that extra cash.
BARTIROMO: So are you seeing a spike in business right now? How would you compare it today to a year ago?
SCHROEDER: Well, fortunately, at most we've enjoyed a lot of success recently. We have had consistent positive (inaudible) despite the industry being fairly flat when it comes to traffic so we are happy about that.
Franchisees are at a great stage. Moe's is a franchise business. Our franchisees are at an inflection point. They've grown up with us. We are 15 years old and now they've got to be pretty sophisticated operators and they're ready to grow again.
BARTIROMO: By the way, Moe is not a guy, right. What is Moe stands for?
SCHROEDER: It stands for musicians, outlaws, and entertainers. And we are executing the outlaw side a little bit this week.
SCHROEDER: Just in terms of getting out there, making sure that people understand the difference. The Moe's offers are honestly awesome food. We have a lot of variety and not only 20 fresh flavorful ingredients. We have a number of different platforms, whether you want to roll it in burrito, tossing into salad, melt it, fold it --
BARTIROMO: You are an outlaw. Musicians, outlaws, and entertainers, Moe's. Go check it out. Bruce, good to see you. Thank you so much. Bruce Schroeder there.
Coming up, the Super Bowl is just as much an ad extravaganza as it is a football. We grade this year's commercials on the other side of this break.
But if it is one performance that truly aced it, it was Lady Gaga's knockout rendition of the national anthem that kicked the whole night off.
BARTIROMO: That was Mountain Dew kickstarts at puppy, monkey, baby, one of the most talked about commercials from last night's Super Bowl 50. So the game was last night, many of the commercials that aired were available much earlier than that on YouTube.
Joining us right now is the Association of Independent Commercial Producers CEO Matt Miller. Matt, good to see you. How does this work? They can release the ads before the Super Bowl on YouTube?
MATT MILLER, ASSOCIATION OF INDEPENDENT COMMERCIAL PRODUCERS COE: Actually, this year two thirds of the ads are released ahead of time, which is a total reversal from the way we've kept it secret for so long.
I think what people realizes, the investment is so big, chattering is so big and what they are trying to do these days is not get your attention for 30 seconds.
But have an integrated campaign where they lead up to with either teasers, pre-releases, premieres on morning shows, however they can get it out there and get the initial attention.
What they are really doing is saying we have this massive audience and people watching the Super Bowl ads. If we can get 10 million people seeing this, which would be a homeland, we have actually have ambassadors in the room.
There is a big party of 30 people and someone says they've seen this before. Everyone be quiet. This is really funny and they actually pull people in that way. People who are out there hawking their idea, hopefully for good.
MCDOWELL: I have a question. If you're going to run an ad and launched it before hand, before the Super Bowl, then why do we have record rates for these ads that are airing during the Super Bowl? Just say it's a Super Bowl ad they don't pay the $5 million which will be 5.5 --
MILLER: It's audience size. Look, I mean, the idea of live television and having that many viewers. Last year, we had over 114 million viewers, the largest TV audience we basically ever had. It is so unique.
Right now only 10 full events, the Super Bowl, the Olympics, some of the award shows are the only ones drawing those live conversations amongst people at the same time with DVRs time shifting and everything else.
It is becoming more and more valuable. The launch and the utilization of the platform and in the interest in the platform has gotten to be so much more integrated on so many levels that they are rolling out teasers.
They are doing a lot of PR around it. They are doing a lot of follow up and hopefully it's got a long tail at the end based on social media and people grabbing it and gravitating and sharing it with their friends.
BARTIROMO: How's advertising going today?
MILLER: Well, it's changing. It's influx. I think there are massive opportunities because they are working off of many different platforms. Talking specifically about television, it is most certainly influx.
But the way people are viewing even your television show, it is much different. They are watching it on their time, in their way. Sometimes they are skipping commercials.
The ones that pull you in and actually entertain you are the one that actually get watched again and shared within people's networks. That is the ultimate goal. Entertainment and really engaging people in this cultural movements.
BARTIROMO: All right, really good stuff, Matt. Good to see you. Thanks so much.
Next hour, former U.S. ambassador to the United Nations will be with us, Bill Richardson on what North Korea is really up to with this latest rocket launch.
Markets in selloff mode again. We will give it a list of things that could be catalysts for this market this weekend this month. Back in a minute.
BARTIROMO: Welcome back. Good Monday morning, everybody. I am Maria Bartiromo. It is Monday, February 8th. With me this morning, Fox Business Network's Dagen McDowell and "Wall Street Journal's" Matt Murray.
First though your top stories at 7:00 a.m. on the east coast, shaping up to be a rough day at the office this morning. Wall Street looking very weak. Futures down about 200 points on the Dow Jones Industrial Average.
Plenty of things to watch this week. Federal Reserve Chair Janet Yellen headed to Capitol Hill.
Plus readings on retail sales and consumer sentiment. All of the above being talked about coming up.
Checking the action overseas, sharp loses in Europe. We've got the FT 100 down 1.75 percent. The DAX Index in Germany down 2.5 percent. The CAC Quarante in Paris down --
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