MARIA-03
South Carolina Governor Nikki Haley Endorses Marco Rubio; Apple Pledges to
Fight a Court Order Requiring it to Hack into a Phone which was Used by One
of the San Bernardino Shooters; White House Announces President Obama will
not Attend Justice Scalia's Funeral; President Obama to Announce Visit to
Cuba; CBS News Poll Released has Trump at 35 Percent in Nationwide Polls;
Wal-Mart Posts Mixed Fourth Quarter Results, Sending Shares Down about 3.5
Percent; Hackers Take Over a Los Angeles Hospital's Computer Network; Oil
Trades Back Above $31 a Barrel; Pope Francis Attracts Enormous Crowd at
U.S.-Mexico Border; Jobless Numbers In; Monopoly to Introduce Ultimate
Banking Version; Chicago Cub Kyle Schwarber Pays to Fix Windshield He
Broke; Apple Supporters Protest Government Efforts to Compel iPhone Breach;
John Ashcroft Comments on Scalia; Oil Price Rises - Part 1>
Ling Kent, Adam Shapiro>
Twitter; Celebrity; Facebook; Animals; Snow; Protests; Privacy; Terrorism;
Violence; Murders; Safety; Telecommunications; Mobile Phones; Apple;
Supreme Court Justice; Patriotism; Hillary Clinton; Donald Trump; Nikki
Haley; Apple; FBI; Obama; Cuba; CBS News; Wal-Mart; Hackers; Hollywood
Presbyterian Hospital; Oil; Pope Francis>
MARIA BARTIROMO, HOST, MORNINGS WITH MARIA: Candidates in a new poll. This coming -- brand new Quinnipiac head-to-head poll shows bad news for Hillary Clinton.
The former first lady coming out on top only in a match up with Donald Trump. Senator Bernie Sanders meanwhile beat all of the remaining Republican candidates in a new poll.
This coming as Senator Marco Rubio snagged a key endorsement from South Carolina Governor Nikki Haley last night.
This before voters head to the polls in the state's primary. Governor Haley explained her decision to Fox News' Greta Van Susteren last night.
The battle over encryption between Washington and Silicon Valley is heating up this morning.
Apple is pledging to fight a court order requiring the company to hack into a phone which was used by one of the San Bernardino shooters.
Both sides are gearing up for a legal fight that could eventually go up to the Supreme Court.
Later this hour, I will get former U.S. Attorney General John Ashcroft's stake on the debate between protecting privacy and our national security.
That's coming up at 8:30 a.m. Eastern this morning. A supreme snub from President Obama.
The White House announcing the President will not attend the funeral of Supreme Court Justice Antonin Scalia, but the President will meet with leaders of Black Lives Matter later today.
Meanwhile, we are expecting an announcement today that President Obama will visit Cuba next month.
It would be the first time in 80 years a sitting U.S. president will visit Cuba. The insults were flying as GOP candidates scramble ahead of South Carolina's primary vote Saturday.
Blake Burman is in Washington with a look at where they stand on the campaign trail. Blake, good morning to you.
BLAKE BURMAN, FOX BUSINESS: Hi there, Maria, good morning to you as well.
One of the questions this morning is, is it an outlier or the start of a trend as a new poll from "Nbc News" and the "Wall Street Journal" shows a new national leader.
Ted Cruz topping Donald Trump in that measure 28 to 26 among Republican voters nationwide.
However, "Cbs News" has also released a national poll of its own this morning showing Trump still in control just about doubling up Cruz's 35 to 18, something to watch there going forward.
For now though, what matters is South Carolina. The first in the south primary is Saturday.
The polling there shows Trump holds a commanding lead but Marco Rubio scored a victory last night when he landed the endorsement of the highly popular Republican Governor Nikki Haley.
(BEGIN VIDEO CLIP)
GOV. NIKKI HALEY (R), SOUTH CAROLINA: More than anything, I want a president that's going to fight back on the last eight years that we've had to deal with.
And also going to make sure they hold a conscience to every Republican to make sure they're doing what Republicans were meant to do.
Which is balance our budgets, reduce our debt and grow our reserves, and I think Marco Rubio is the man to do that.
(END VIDEO CLIP)
BURMAN: That was an endorsement, Maria, that Jeb Bush had been coveting, Bush said he was "disappointed". Back to you.
BARTIROMO: All right, Blake, thank you very much. Blake Burman --
BURMAN: Bye --
BARTIROMO: From conflict on the GOP side to confusion in the Democratic race. Controversy over super delegates within the party picking up steam.
Even though Hillary Clinton lost by double digits in New Hampshire and narrowly won in Iowa, super delegates continue to support Hillary Clinton giving her a wide lead over Bernie Sanders ahead of the Democratic National Convention.
Joining us right now is California Democratic super delegate Christine Pelosi. Christine, nice to have you on the program, welcome.
CHRISTINE PELOSI, DEMOCRATIC STRATEGIST: Thank you, Maria, good morning.
BARTIROMO: Can you explain how you became a super delegate, what being a super delegate means and how it impacts this race?
PELOSI: Absolutely. Well, the Democratic Party has pledged delegates to go to the convention.
That's the majority of the delegates, 85 percent and they are selected at the caucus level and a precinct level after a primary or a caucus.
In addition, there are 15 percent of us who are either members of Congress, senators, former presidents and presidential nominees, or in my case, elected members of the Democratic National Committee.
We run every four years I'm at right now for a term that will end in 2020, and we got elected by our states.
So, in California, we have 20 people that get elected, 10 men and 10 women. And we vote our conscience, can pledge as early as we want for a delegate.
And I've been part of something for eight years that actually the activists call the Pelosi club.
Because my mother Nancy Pelosi and I are super delegates, and we've also said that when all is said and done, after the primaries are over, rip your heart out for who you want.
But when the primaries are over, the super delegates ought to go with where the public voted and vote with the majority of the pledged delegates for nominee for president --
BARTIROMO: That's interesting. So, that's the point. You can change your mind, you can change your vote.
PELOSI: That's absolutely true. We are free to change our votes at any time. I look at it as, if you want to have a -- give a candidate a head- start and go out and campaign essentially as a -- as a delegate surrogate, we are free to do that.
I'm doing that right now for Hillary Clinton. But I also think that once the process is over in June, the party really needs to come together, and we all need to unite behind the person who went there, played by the rules, got the most pledged delegates at the local level.
BARTIROMO: Right --
PELOSI: And that will be the time for all of us to come together in June, so that in July, we're nominating somebody who has not only the majority support of the pledged delegates, but also of we super delegate party leaders as well.
BARTIROMO: Right, and you've been a supporter for a long time, obviously, you and your mom, your mother Nancy Pelosi. Dagen, go ahead.
DAGEN MCDOWELL, FOX BUSINESS: Christine, do you ever speak to the other super delegates who have already pledged their votes to Hillary Clinton and say what are you doing?
Like you need to represent the members of the party, and is there pressure put on super delegates to do what you're doing and back the Democratic voter at the end of the day?
PELOSI: Well, I hope there will be. I mean, eight years ago, we went through this, really almost to today, eight years ago where I gave an interview with "Huffington Post".
And said, look, in that case, I had not picked a candidate to vote for yet in the California primary.
But I said, regardless of who I pick in the primary, I'm going to be for the person who has the most pledged delegates.
And so when Barack Obama -- he originally -- his campaign was trying to have inroads with the super delegates, so they liked what I had to say, the Clinton people not so much.
But towards the end when it looked like Barack Obama was going to win, I had a lot of pressure from the Obama camp saying may -- to change my mind and back him because it looked like he was going to be the winner.
I said, no, I'm sticking with what I said, and in June, I'll help put you over the top, and that's what I did.
So, right now, there may be some pressure from people, either for Bernie or for Hillary, saying we want you to vote a certain way.
BARTIROMO: Right --
PELOSI: Now, and you know, I think, look, this is a democracy. I get my vote, I'm going to cast it for Hillary, quite proudly so, and when Hillary is the nominee, I hope everybody in the party coalesces around her.
And for some reason I'm wrong and Bernie is the nominee, I'm going to be first in line saying, let's bring everybody together behind the nominee of the party and make sure that we win in November.
BARTIROMO: Yes, you make a really good point because -- how divided is the party that so many of them are going for Bernie Sanders right now?
PELOSI: Well, it's a contest. And as you can tell, it's very -- it's very nip and tuck depending on which poll you look at in Nevada, part of poll for a caucus state exactly.
But there's a lot of enthusiasm there, and then you look at the next ten states and it looks like Hillary's got a commanding lead.
But as well as all of these polls, until people actually come out of their homes and caucus or vote, you really don't know. It's up in the air and it's --
BARTIROMO: Yes --
PELOSI: It's an issue of turn out, and that's what's so exciting about it. I am for one wanting a longer primary because I think the longer the process, the more people are paying attention to Democrats and --
BARTIROMO: Yes --
PELOSI: Debating Democratic ideas. The better and stronger our nominee is going to be in the end as happened in 2008.
BARTIROMO: Yes, real quick, let's get Lenore Hawkins in here. Lenore.
LENORE HAWKINS, MERITAS ADVISORS: Christine, you're talking about how your vote needs to count.
And I know that the concern with disenfranchisement has been a big thing for the Democrat party.
But what we're seeing right now is that voters have a sense of potentially feeling disenfranchised where the super delegates can override the wishes of the voters.
How do you think that's going to pan out with the Democrat Party and having their own people not feel frustrated by that?
PELOSI: Well, I think the Democratic Party is going to come together around the nominee.
I wish all super delegates which is join the Pelosi club and then those concerns would be automatically allayed.
But let's also be real. I am from California, I'm talking to you from San Francisco where we are the ATM of American politics, and the volunteer vault.
We don't think that our vote much matters in the Fall because we're a true blue state, we're happy to be a Democratic state.
But let's be real. There's only about 12 states that are going to matter really in the Fall.
So, there're a lot of Americans who feel that if you really wanted to have a truly Democratic process, you would have a national primary on both sides.
You could do it in stages, make sure that you adapt and see voting at those caucuses. And come the Fall, you had a national fair vote --
BARTIROMO: Right --
PELOSI: Where every vote counted equally in every state rather than just focusing on the undemocratic electoral college.
I think that would help more Democrats and more of the Republicans be interested in politics and voting, knowing that their vote was really going to matter.
BARTIROMO: Exciting times, Christine, thanks so much for joining us this morning.
PELOSI: Thank you, my pleasure.
BARTIROMO: We'll see you soon, Christine Pelosi there. We've got an earnings below for you.
Shares of retail giant Wal-Mart falling to a three-week low this morning after reporting fourth quarter earnings that missed Wall Street expectations.
Jo Ling Kent with the details now, Jo.
JO LING KENT, FOX BUSINESS: Hey, I'm going through all of it right now. Wal-Mart posting mixed results in the fourth quarter, sending shares down about 3.5 percent right now in the pre-market.
And it's poised to shave about 16 points off the Dow at the opening bell. And here are the numbers.
Profits were a $1.49 a share, three times above consensus estimates, but it was revenue that was light, coming in at just $129.7 billion.
Now com store sales here in the U.S. were actually up for the sixth straight quarter, .6 percent, but that missed analysts expectations of 1 percent.
And the retailers also cutting sales guidance for the year. It will be essentially flat compared to the 3 percent to 4 percent they were looking for.
And a lot of that has to do with the stronger dollar and an economic softness, that's what the executives are telling me, in China and Brazil.
So, we're watching that. Plus, we also want to of course track global e- commerce sales and how those are doing.
Those jumped 8 percent in the fourth quarter with nearly half of customers using their cellphone to buy stuff online for the holiday season.
We also saw that Wal-Mart is raising its dividend by 2 percent to hit that $2 mark. So, good news for investors there.
And some other interesting trends to come out of this earnings report -- we're watching what has happened with customers.
They said they took advantage of lowered gas prices. Though Wal-Mart executives said that was offset by deflation and meat -- excuse me, and dairy.
Wal-Mart also said their sales were hurt by warmer weather. So, they're blaming the weather here at the beginning of the fourth quarter.
Plus delays in some early tax refund checks from the IRS, they said that, that hurt Wal-Mart sales as well. Maria.
BARTIROMO: All right Jo, thank you so much Jo Ling Kent. Anastasia Amoroso looking at markets this morning.
We had the Fed minutes out yesterday and what some of the analysts this morning in their morning note to writing about is the word recession was absent from the Fed minutes yesterday.
Which I thought was interesting that the Wal-Mart note, the price of oil this morning. What's the most important to you this morning as we await the open in an hour and a half away.
ANASTASIA AMOROSO, GLOBAL MARKET STRATEGIST, JPMORGAN ASSET MANAGEMENT: Yes, I think when we talk about the minutes, one thing that really stood out in the minutes to me is that the Fed is really carefully assessing the balance of risk right now.
So, what I am focusing on is, we do -- we need to see the market stabilize here. Not just the equity markets.
We really need to see the credit spreads to come in. Because one of the biggest distortions going on in the markets right now is, if you look at high-yield credit spread, they're in 900 basis points.
If you look at the yield, it's 10 percent. And if you think about what has fueled this market, it has been buy-back, there has been dividend increases.
And if you don't have the credit conditions that are conducive to all those things, that just takes some steam out of the equation.
So, we really need to see the risk sentiment stabilize here, oil helped. But you know, there's a report that Iran may support the decision to freeze output.
But whose decision, right? Will they actually freeze their own output, that's still the biggest question mark out there.
BARTIROMO: Certainly helping oil this morning, Dagen, it's up 3 percent on crude right now.
MCDOWELL: Absolutely, just really quickly on Wal-Mart, a couple of things. Wal-Mart stock was up, the return of it was up almost 8 percent so far this year --
HAWKINS: Yes --
(CROSSTALK)
BARTIROMO: Two winners in the Dow --
MCDOWELL: Right, exactly. So, all your broad markets are still nicely lower in the year.
It was up, it pulled back here and part of the problem with that revenue forecast is Wal-Mart is closing all 102 of its Wal-Mart express stores.
That's another major reason, currency --
BARTIROMO: Yes --
MCDOWELL: And the close --
HAWKINS: Yes --
MCDOWELL: Of those stores of that revenue forecast --
(CROSSTALK)
BARTIROMO: Lenore also mentioned higher wages.
HAWKINS: Yes, they have -- well, higher wage cuts, it's going to take about 30 cents off of every dollar of earnings.
And I thought it was also interesting that they didn't supersize their stock buyback.
Which seems to be the thing that everyone is doing in these days. By not doing that, are they telling the markets that they don't really believe.
BARTIROMO: Wow --
MCDOWELL: Well, they're spending money on the wages, higher wages and revamping the stores and building out e-commerce.
We're talking about 5 billion or more on just that this year.
BARTIROMO: Up next, it is something out of a movie, hackers taking over a Los Angeles hospital's computer network, demanding ransom for the release.
Could this be just the beginning of these types of cyber crimes? We'll look at it next.
Then the conflict between Apple and the FBI heats up. Former U.S. Attorney General John Ashcroft on the story next.
(MUSIC)
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. A California hospital paying a ransom to get its computer systems back up. Amazing story from Cheryl Casone right now, Cheryl.
CHERYL CASONE, FOX BUSINESS: It really is, Maria. The chief executive of Hollywood Presbyterian Medical Center in Los Angeles paid the equivalent of about $17,000 in bitcoins to hackers who use malware to disable the facility's computer network.
It's a practice that's called ransomware. And the CEO there Allen Stefanek said in a statement that paying the ransom was the fastest way to regain control of the hospital's systems.
No patient records were stolen thus far, but the FBI is further investigating this entire cyber attack.
Well, President Obama plans to announce today that he will travel to Cuba next month. This will be the first time in nearly 80 years that a U.S. president has visited the communist island.
Senators Marco Rubio and Ted Cruz criticizing the President's planned trip, saying that he should not make the visit until the country is "free".
And I want to stay on President Obama here, Maria, he will not be attending the funeral of the late Justice Antonin Scalia on Saturday.
That's according to White House Press Secretary Josh Earnest. Instead, the President is going to be paying his respect today earlier while Scalia lays in repose in the court's great hall.
And the Vice President Biden will attend the funeral in his place, Maria. But a lot of controversy as far as the President -- he's getting criticized for not being more respectable -- respective of the death of the justice.
BARTIROMO: All right, thank you so much Cheryl. Wal-Mart stocks set to open at a three-week low this morning after missing on top and bottom lines for the fourth quarter results.
The company is lowering its outlook for the year, also oil prices are positive in today's trading session above $31 a barrel on the hills of the big OPEC meeting with Iran.
We'll take you live to Chicago in the CME Group next, back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Crude oil, one of the big stories of the morning surging up 2 and two-thirds percent right now, trading back above $31 a barrel.
Iran is cautiously welcoming the deal backed by Saudi Arabia and Russia. The deal is to freeze oil output by the world's largest producers without committing themselves.
Phil Flynn is at the CME Group this morning. And Phil, they're off of the highest levels of the morning, but nonetheless, pretty good rally for oil today.
PHIL FLYNN, CHICAGO MERCANTILE EXCHANGE GROUP: A very explosive rally the last couple of days.
And let's face it. This is a historic possibility that we can get OPEC and non-OPEC to agree to anything for the last 15 years.
And the market is taking that seriously. A lot of the skeptics of this deal said Iran will never let this happen.
There's no way they're going to walk out of that meeting. Well, they didn't really come to an agreement, but they didn't walk out.
So, there's definitely negotiations going on, the market is taking that as positive.
The other reason we're up today is inventory. The American Petroleum Institute really shocked traders yesterday.
They were looking for an increase of oil inventories of 3 million barrels, it actually fell by over 3 million.
So, that's a 6 million barrel swing and it's another reason why we're positive. Back to you.
BARTIROMO: Yes, interesting how everything is connected. Phil, thank you. Phil Flynn in Chicago. Anastasia Amoroso, we are all connected and we got the oil market up, and that's putting a bit under equities today.
AMOROSO: Yes, it is. I mean, everything has hinged upon the oil market recently.
And the reason is because we're realizing it's not just about lower gasoline prices, but it's also about the wealth destruction that has been put in place to, you know, to follow the wealth accumulation.
Because you are seeing credit commitments being pulled back by banks. You are seeing market caps of energy companies, and now other companies suffering.
You're seeing deaccumulation of foreign exchange reserves and -- wealth funds. So, you aggregate all of that and that's why, you know, the oil market is so key to the overall markets.
Because it's otherwise sending cracks throughout the system.
BARTIROMO: Yes --
HAWKINS: Yes, you got about 4 percent to 5 percent of all sovereign wealth funds come from oil-producing nations.
So, to say that the price of oil doesn't matter, but saying -- and then a very large cohort of buyers of securities.
They don't matter. Well, those countries, they're all really suffering, and so they're having to sell what little assets --
AMOROSO: Yes --
HAWKINS: They do have. Because most of their assets are long term a liquid. So, they're going to have to sell those --
BARTIROMO: Yes --
HAWKINS: Stocks and bonds that they can't sell today, they're plugs the holes in their budget.
BARTIROMO: Well, the banks have definitely been impacted by the oil story. Because people are worried that the banks and private equity firms as you made the comments earlier, Dagen, that they've made these loans to the shale companies.
But yesterday the banks were under pressure I think because of the Fed minutes.
MCDOWELL: Right --
BARTIROMO: They lacked the market because we're still in an uncertain Fed and interest rate move.
MCDOWELL: Right, and they need an improved net and just imagine if they want to make money. But I don't -- I'm not at this point with the consumer looking very shaky.
And I think the rhetoric off the campaign trail is shaking investors. Because you have Bernie Sanders --
BARTIROMO: Yes --
MCDOWELL: And Donald Trump, you don't know what their economic policies will look like.
And what we've heard so far, it's very unorthodox, what they're talking about in terms of a Democrat versus a Republican.
You add all that up, I don't want much higher gas prices for the American people. Not for the next six to eight months, because they're already a little shaky.
BARTIROMO: Yes, I don't think you're going to get it, but you know, this move in oil has really shown you that we're seeing an impact to the broad economy and it's indicative of this global slowdown.
MCDOWELL: Yes --
BARTIROMO: Decouple itself, but it's not happening.
AMOROSO: If we can see some stability in oil, I think that will go a really long way.
I mean, no, it's not going to alleviate a wave of default that we're likely to see in energy companies.
But at least it will alleviate the need for the banks to provision more and more. And you know, for sovereign wealth funds to sell more and more assets.
But I just want to make one quick point is that, I agree with you that, you know, sovereign wealth funds selling has contributed to this markets.
But I don't think it's the only thing out --
BARTIROMO: No, oh, God, no --
AMOROSO: Just one of their so many points of instability and to getting oil to stabilize will be at least one thing. We've got political instability, we've got commodity price instability.
Some things got to --
(CROSSTALK)
BARTIROMO: What else --
HAWKINS: Yes --
BARTIROMO: Is it?
AMOROSO: It's also -- people that frankly are just sitting on the sidelines right now.
If you look at the percentage of people who say their outlook is bearish for the next six months, it's 49 percent.
It's the highest that has been and in quite some time. So, we are seeing a buyer strike.
But if we see a stabilization in oil, I think that could be the catalyst.
BARTIROMO: All right, well, that's why -- I've been looking for a catalyst all morning.
That's good. Take a short break, the clash between Apple and the government revving up after the FBI asked for Apple's help investigating the San Bernardino terrorist attack.
Is it an isolated case or setting a dangerous precedent? We'll get former U.S. Attorney General's take, John Ashcroft coming up.
But first, take a look at this video. Pope Francis attracting enormous crowd at the U.S.-Mexico border.
He's wrapping up a six-day trip to Mexico by saying mass to a town near El Paso, Texas, back in a minute.
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(COMMERCIAL BREAK)
BARTIROMO: Welcome back. Jobless claims coming out any second here. The expectation 262,000 on jobless claims. That is the -- the estimate was 275,000, and now we got the number, 262,000 jobless claims for the week.
Futures this morning are looking higher. As you can see, we are well off the highs of the morning. Walmart, part of the issue, weighing on the DOW this morning.
It is probably going to shave that 15 points off the blue-chip index. It's down to 4 percent right now after the world's largest retailer reported fourth quarter results that missed analyst expectations, 262,000 jobless claims?
HAWKINS: Yeah, it's slightly better than expectations. And it's also just below prior week, so at least we're not seeing a continuous pickup of jobless claims.
So, for know, that's a positive development.
BARTIROMO: It's a positive development there. Still a market that is really -- very much tied to oil. Oil is up today, and also very much tied to the DOW component, Walmart, which is down 4 percent.
The economy, of course, has been struggling globally. Many investors are looking for somewhere to allocate capital. Our next guest sees opportunities in the emerging markets, but which ones? Ruchir Sharma is with us. He is Morgan Stanley's Head of Emerging Markets and author of "Breakout Nations." Good to see you, Ruchir. Thank you so much for joining us.
RUCHIR SHARMA, MORGAN STANLEY HEAD OF EMERGING MARKETS: Good to be back, thanks.
BARTIROMO: So, we're all waiting for the emerging markets to break out. It hasn't happened in a long time. What's the problem?
SHARMA: Well, the problem is China. That the Chinese economy has been slowing down continuously since really 2011. It's really like a ping-pong ball bouncing down the stairs which is that it's been bouncing down, it hasn't crashed or something but it's been bouncing down.
But if you step back, the Chinese economy has already had a hard landing. This economy was growing in nominal terms at about 15 percent in 2010 and 2011. And that rate is now down to 5 percent.
That's a huge slowdown that's happening in China. And China has been the single largest contributor to global growth this decade. So I think that's what's really been troubling the emerging world, and I would say the entire world now because China is the world's second largest economy and it hasn't been a while since we have seen another economy but the U.S. dominate the global economy the way China has done over the last decade.
SMITH: You said something really interesting. It's that China already had a hard landing because there is all this talk about whether they are going to or not but you're saying the economy did. My question for you is, did the Chinese currency have the hard landing already?