REWARD-00
Quarterly Sales Drop Since 2003; Stocks Poised To Shave Almost 50 Points
Off Dow Tomorrow; Former Apprentice Contestants Speak Out Against Trump;
Trump Attacks Kasich; Chipotle Reports First-Ever Loss; Apple and Twitter
Report Also; Primary Preview - Part 1>
Lonegan, Geraldo Rivera, Tom Coleman, Jo Ling Kent, Antonio Sabato Jr.>
Hollywood; Electronics>
DEIRDRE BOLTON, RISK AND REWARD SHOW HOST: Apple's stock right now down around 7 percent in this after-hour session. So we posted it's first-ever decline in iPhone sales. This is Risk and Reward. I'm Deirdre Bolton.
Tech giant Apple, these earnings out moments ago, posting the first quarterly sales drop since 2003. The stocks have poised to shave almost 50 points off the dow tomorrow. With me now an Apple bull and Apple bear. The bull, Jason Rotman and Apple bear Gary Kaltbaum.
Glad to have you both here. So I feel like I should start with the bullish side so we're contrarian. Jason, what do you make of the numbers?
JASON ROTMAN, LIDO ISLE ADVISOR: Listen, first of all, Deirdre, contrarian is relative. I mean, if I'm a contrarian in a 24 hour period because Apple is down, but in multi-decade period I think I'm with the trend here. Keep in mind from 1991 to 1997, Apple lost 80 percent and then in the next 18 years, its market cap went up 27,000 percent.
So this is to be expected. This is not a surprise, okay? The market is overbought in general. I think if you own Apple, you should not sell it. I think that would be foolish. Apple has iPhone 7 coming out in the fall. 200 million users have not upgraded to a bigger screen.
There are so many reasons to be a bull over the long haul for Apple, not in the next week but next several years it is a hold.
BOLTON: All right. I hear what you're saying and Jason, I also take your point on it not being a surprise. Tim Cook actually told the Wall Street Journal, we're in the middle of a challenging quarter. So Gary, I want to bring you in though as the bear. Are apple's best days behind it?
GARY KALTBAUM, FOUNDER AND OWNER OF KALTBAUM CAPITAL MANAGEMENT: It really depends if they come out with some great category killer. They've been fantastic at that in the past, it ain't happening right now. And here are my big, big issues. Number one, they lowered guidance throughout the quarter and couldn't even beat the lowered guidance they missed.
And if anything Apple has been great at, is beating lowered guidance throughout the last few years. The other part of the equation is guidance. Guidance is worse than this previous quarter. So I'm just not so sure that's going to drive things. I think only thing the stock has going for it right now, it is trading at about 11 or 12 times earnings.
But when earnings are dropping 15 percent, that is why you get a cheap stock. And I think maybe -- I don't know if it is going to you know, tank big-time, but I do believe you probably see low 90's, mid80's, something like that and if market getting in trouble again, maybe a little bit worse, I just think the growth days of Apple are over right now.
BOLTON: All right. Jason, I want to bring you back in. You just heard Gary say the growth days are over. And I want to ask you about area where Apple had seen phenomenal success and that was China.
I'm just going to look at my notes here because iPhone sales were booming, but sales to Greater China which includes Hong Kong and Taiwan down 26 percent to $12.5 Billion. And that was really tough come because that was down 71 percent growth. So to what extent is Apple's fate hinging on the Chinese consumer?
ROTMAN: Very good question, and especially relevant because Tim Cook has now I guess infamously like really played up Apple's presence in china. So how I would really like to respond to that is, first and foremost, Apple's services are now its game-changer really.
Apple music is poised to possibly beat Spotify and other services as the world's number one digital streaming music service. Apple's music growth has completely Trump the pace that of Spotify's. Furthermore, there is 26 percent increase in the services revenue in Q1. So all that Apple naysayers that's saying Apple's hardware days are over, I think apple is being smart by focusing on more of their services. It is a buy.
BOLTON: It's a buy. All right, Jason, we hear it. Gary, I don't want to let you go without letting you at least defend the sell position. I heard -- what do you think about the pricing? If it goes to the 80's, and the 90's, is that enough of a bargain? I know you don't think best days are in front of it but is it still a bargain?
KALTBAUM: I'm a growth guy and my worry is I know they have music and other things, but their big driver is the iPhone and the iPhone is not what it used to be. And something Tim Cook said was that, we're in the early innings of the iPhone.
I'm sorry that is a wrong statement. We already have tons and zillions of smartphones out there. We're not early innings. They're going to have to come up with something new. They started with the iPod, then the phone and then the iPad, iWatch isn't working. They'll going to need something else, or else.
And by the way, one other thing, they are a victim of their own greatness. Once you become so gargantuan, it is very tough to continue to beat your growth rate. And I think they're in the realm now of like the Wal-Mart's and Intel's that got so big, you just can't grow the business anymore. You end up being value in dormant stock.
BOLTON: All right. Although to those other two examples, those are more companies and types of companies that have been disrupted by leaner, meaner, and different models. We're going to talk about Apple another day. In the meantime, I thank you both very much, points well-argued. Jason Rotman, our Apple bull, and Gary Kaltbaum our Apple bear.
We want to turn your attention to politics because tonight is huge night. Candidates making last minute pitches before the five state primaries in northeast in focus. So from Connecticut to Delaware to Maryland to Rhode Island to Pennsylvania.
(BEGIN VIDEO CLIP)
BERNIE SANDERS, U.S. PRESIDENTIAL CANDIDATE: How many of you are registered to vote? How many of you are coming out to vote tomorrow?
HILLARY CLINTON, U.S. PRESIDENTIAL CANDIDATE: If you vote for me tomorrow, I will stand up and fight for you and for our future through this campaign into the Whitehouse. Let's go seize the future together.
JOHN KASICH, U.S. PRESIDENTIAL CANDIDATE: I'm not going to take the low road to the highest office in the land. I said it all along and I'm not changing. So that's it. That is as far as it goes.
TED CRUZ, U.S. PRESIDENTIAL CANDIDATE: This is the only campaign that can and will beat Donald Trump and Hillary Clinton.
DONALD TRUMP, U.S. PRESIDENTIAL CANDIDATE: I promise you 100 percent, we will make America great again. We will make it better than ever before.
(END VIDEO CLIP)
BOLTON: The polls close in less than three hours. We have reporters in key states for you. We have you covered here at Fox Business all night. So up for grabs, 118 delegates on the GOP side, 384 for the democrats. And tonight could be a turning point for both party's front-runners, so Donald Trump and Hillary Clinton in leaving their competitors behind.
We take you now to the Trump Tower in New York City. My colleague Connell McShane is there. So Connell, trump is the only GOP candidate who actually can mathematically get to 1,237 but he is still needs to sweep states tonight, right? He can't just marginally win?
CONNELL MCSHANE, FOX BUSINESS REPORTER: Yes. He would love to. I mean, I don't know if a sweep is required but it certainly would help. I mean more delegates, the better. Indiana will obviously be a big one but that's for next week.
In terms of tonight, yes, it's not whether Trump will have big night. Most people expect he will but how big will that night be? I know Deirdre, you and I were speaking of this time yesterday and you might remember I showed you that flyer out in Pennsylvania where Trump was handing to supporters telling them which delegates to vote for there because of the strange delegate allocation rules in that state.
That is just an example of that, that he knows now but it's a little too late in terms of organization remains to be seen. But he knows now that every delegate matters. He even talked about that himself a little bit at later rally. Didn't seem so thrilled by the process but he said this, here's trump.
(BEGIN VIDEO CLIP)
TRUMP: We have a rigged system. We have a corrupt system. This whole thing with the delegates is ridiculous, and you have to go out and you have to get your beautiful delegate card and you have to vote for your delegates, the delegates, it's crazy.
(END VIDEO CLIP)
MCSHANE: There you go. So as Trump gets set to watch these returns come in, I guess he'll have the delegates on his mind. He has also done as his part for the course, a little bit of tweeting today including some more commentary on agreement between Governor John Kasich and Senator Ted Cruz.
Trump tweeted earlier the Cruz-Kasich pact is under great strain. This joke of a deal is falling apart, not being honored, almost dead, very dumb says Donald Trump. Now, one piece of Trump related news tomorrow. You might remember that he had this big foreign policy speech planned in Washington D.C.
It has a time and venue, noon eastern tomorrow at the Mayflower Hotel. We expect it to be more formal, teleprompter and the whole thing. Not at national press club. The campaign says the demand was overwhelming, so they need bigger venue. And finally as we get set, Deirdre to head inside Trump Tower and hear from the candidate themselves sometime around 9:00 P.M. we're told.
Let me show you a picture of one of Trump's biggest supporters spotted here on Fifth Avenue, entering building moments ago, the governor of New Jersey, Chris Christie, so at an early arrival for Governor Christie, apparently held to be one of VIP's on hand for his good friend Donald Trump.
So it should be celebratory mood if all goes as expected tonight but to your point, it's the right one, Deirdre. It's not how many states he wins, it's how many delegates he can pick up.
BOLTON: How many delegates? You and I will be here all night. Connell McShane in the meantime right there in front of Trump Tower in Manhattan. Well, looking on the other side of the aisle, Hillary Clinton poised to extend her lead and hoping to celebrate a strong showing this evening.
Senator Sanders does have hope though of claiming a win in Rhode Island. Blake Burman with me now from Philadelphia. And of course, Blake, we were just talking about how Pennsylvania is really unique out of the 50 states. You are there. You're covering the democratic side. What are your sources telling you?
BLAKE BURMAN, FOX BUSINESS REPORTER: Hi there, Deirdre. Well, I hear at least here on democratic side, things have broken down proportionally. So Bernie Sanders does have a chance here and the other four states as well because of that proportional allotment you mentioned.
Rhode Island, one of the reasons why the Sanders campaign feels best there is because those unaffiliated voters are allowed to vote in Rhode Island whereas the other four states today are closed primaries. And Sanders, if history says anything, doesn't really do as well in closed primaries as he does in open primaries.
It tells you a lot where candidates spent election night. Bernie Sanders was here in Philadelphia earlier today but has left for West Virginia. Hillary Clinton was in Indiana earlier today and then she will come here to Pennsylvania later tonight.
Speaking of Clinton in Indiana, she didn't mention Bernie Sanders by name at a stop in far northwestern part of the state a little while ago, of course, Indiana being the next state on the schedule. This probably a little bit of a pivot as things start to take shape for Hillary Clinton as she gets closer to the magic number of 2,083 delegates.
But for Sanders though, Deirdre, he has -- had to tamp down all day questions about whether or not he might drop out of the race. He said -- he called it an absurd question today. And just a while ago, his top strategist, Tad Devine said and I'm quoting here.
He said, "There is no reassessment of his candidacy speaking of Sanders. After the results today we will determine if we can continue on the path to win more pledged delegates than Hillary Clinton. We believe we can." They think they can. The results might potentially tell a different story tonight, though Deirdre?
BOLTON: Blake, thank you very much. We'll be talking later. Blake Burman in the meantime there with us from Philadelphia. So in just three hours, the polls will close for five northeastern states. We're going to have the first exit polls coming out this hour, in the next 40 minutes.
So stay tuned to see which candidates are taking early leads. Also later tonight, Fox Business wall-to-wall coverage. Super Tuesday 3, Neil Cavuto, Lou Dobbs, myself, rest of the teams, we will be here. We will bring you all relevant information starting at 7:00 P.M. eastern time.
Well, Governor Kasich said people don't really understand what he said about Indiana. We're going to put some context around it for you. Former presidential candidate Mike Huckabee will help us out.
(BEGIN VIDEO CLIP)
KASICH: I have not told anybody to not vote for me. I'm just not there campaigning. And you know what? When you don't campaign in certain areas in any kind of a race, guess what? Your turnout goes down.
(COMMERCIAL BREAK)
UNIDENTIFIED MALE: The people in Indiana who are watching this program right now, your message come primary day there is to vote for?
KASICH: I don't tell my voters what to do. First of all, I don't have voters.
(END VIDEO CLIP)
BOLTON: Governor Kasich sent mixed messages to Indiana voters but one thing is clear, he did not dedicate any money to campaigning in the Hoosier state. Former republican Governor, former presidential candidate Mike Huckabee is with me now.
Governor, welcome back. We love to have you here to make sense of what is going on. How do you see Kasich's? "I'm in the pact with Cruz, I'm not in the pact with Cruz, OK, voters, do what you want" kind of stance?
MIKE HUCKABEE, FORMER GOVERNOR, FORMER PRESIDENTIAL CANDIDATE: I think John Kasich is really regretting that any kind of a deal was made. The reason John Kasich is not campaigning in Indiana right now because he doesn't have enough money to campaign there and some other states.
You know, the fact that this whole deal, between the campaigns went public, I think has really hurt both Cruz and Kasich and neither one of them could afford a bruise right now, much less a major bleeding. But it looks like the act of candidates who are desperately not trying to win but just trying to stop Donald Trump from winning, and all the talk about I can win, I can win and this sort of says, I really can't.
BOLTON: Yes because Donald Trump tweeted out and my colleague Connell McShane whom you know well, tweeted or rather quoted Donald Trump's tweet talking about it being a joke deal. I mean that is blunt language but it does seem to be the case?
HUCKABEE: Well it is not much of a deal that is helping either one of them. Look, there is nothing illegal about it. There is nothing really even unethical for that matter. And I know Trump has sort of tried to make it as if this was scandalous.
It is rawest form of politics, and in politics, you do what you can to win. But in this case, it really isn't going to help Cruz. I heard his press conference the other day and you know, one of thing that is hurting Cruz is not that Donald Trump has, you know large crowds, is that Cruz hasn't been able to change anything in his message.
He sounds robotic. If you listen to his answers, he didn't respond to a question. He gave very stock, very well-rehearsed, off repeated phrases and he talked about how the conservatives are coalescing around his campaign. You scratch your head and say, "Well not really."
You're losing states right now, or that I'm only one that can beat Hillary and you're thinking, "Well not really." That hasn't been told and I think that if Cruz wants to continue to be a player in this, he's going to have to show some spontaneity. He's going to show he's not so theatrical, so very programmed and I think that is hurting him more than Donald Trump is right now.
BOLTON: OK, well that's an interesting point. You mentioned Hillary Clinton. So I want to ask you this. So she says that women would make up half of her cabinet. Here's her comment.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Canada has a new prime minister, Justin Trudeau. He promised when he took office that he would have a cabinet that was 50 percent women.
CLINTON: Right.
UNIDENTIFIED FEMALE: And then he did it. He made good on his promise. Would you make that same pledge?
CLINTON: Well, I am going to have a cabinet that looks like America and 50 percent of the America is women, right?
UNIDENTIFIED FEMALE: So that's a yes?
(END VIDEO CLIP)
BOLTON: So governor, I have nothing against women for very obvious reasons but when you choose a cabinet, you just want the best people, right, and then everything else falls after that?
HUCKABEE: I think this is an insult to women to say, "I'm going to pick you because of your gender." I think better thing is to say, "I'm going to pick the very best people I can possibly fine and when I do that, it's most likely that I'm going to find at least half who will be women."
As a governor who had more women appointees in my cabinet than Bill Clinton did, I can tell you, I didn't go out and say, "Let's make sure we had a quota." We didn't have one. We looked for good people and we acted regardless of their gender.
I think it is an insult to a person's gender when you say, "Well, the reason you got the job is because you know, biologically you fit the profile we needed."
BOLTON: You know, I agree because I mean that it hurts that person's credibility and her ability to do the job actually.
HUCKABEE: Absolutely. By the way, when I hear Hillary and some of those speeches, the one you played just a moment ago, I got to tell you, it reminds me of a lady in my neighborhood growing up that we kind of considered the neighborhood scold that would scream at us.
And honestly, it is -- she just needs to learn, get a speech coach, take it down a notch because it is very grating on the nerves when she raises that pitch way up there, just a little speech counseling for her but oh my goodness.
BOLTON: Just a little speech -- All right, but governor, how many baseballs did you hit through your neighbors windows? That is what we need to know. No, I'm just teasing.
HUCKABEE: Well you know what, truthfully, Deirdre, not enough because I earned every baseball I hit through her window hearing that voice.
BOLTON: All right, governor, that's good, we'll be looking for film of that, you know that right, governor? Governor Huckabee with me there. Thank you, sir.
Well, in three hours, the polls are closing in five northeastern states. We're going to have first exit polls for this hour in the next 40 minutes. Stay with us. We're going to let you know which candidates are tracking early success.
Also all night we're here, wall-to-wall, Super Tuesday 3. Neil Cavuto, Lou Dobbs, myself, the rest of the team, we start for you 7 P.M. eastern time.
Take a look right now at Apple stock. It is lower by almost lower by 8 percent, a big drop for Apple. This is the after-hours session of course but the dow may lose around 50 points at tomorrow's open just based on the waiting of Apple alone.
Apple reported first decline ever in iPhone sales. Twitter stock down as well, in fact even more so, down around 12 percent right now in this after- hours session, so a major revenue miss.
Social media company reporting mixed results but sales really disappointed Wall Street forecasting as well, the stock down more than 20 percent this year. Lingering concerns about exactly how to get money out of users.
Well, deal or no deal, Cruz is telling people not to vote for Kasich in a radio interview today. We'll play the sound for you. And Trump University is in trouble, a judge declared the racketeering lawsuit will go to trial, a Cruz supporter with his take after this.
(BEGIN VIDEO CLIP)
TRUMP: We're going to have professors and adjunct professors that are absolutely terrific, terrific people, terrific brains, successful.
(END VIDEO CLIP)
(COMMERCIAL CLIP)
(BEGIN VIDEO CLIP)
CRUZ: So if you don't want to hand the election to Hillary Clinton, do not vote, I ask you, for Donald Trump. But if you want to beat Donald Trump, don't vote for John Kasich either because if you vote for John Kasich, as Mitt Romney said a couple weeks ago, a vote for John Kasich is a vote for Donald Trump.
(END VIDEO CLIP)
BOLTON: Senator Cruz and Governor Kasich made a pact to stop Trump. Senator Cruz says don't vote for John Kasich though. With me now, Cruz's New Jersey Campaign Chairman Steve Lonegan. Steve, glad you are here.
What do you make of this pact, because it seems like both candidates, your candidate and Governor Kasich have gone back and forth about exactly what this means?
STEVE LONEGAN, CRUZ'S NEW JERSEY CAMPAIGN CHAIRMAN: Well, it's about good husbandry of resources. You know, Deirdre, what's important in politics is coalition building and Donald Trump uses the word collusion. What you're seeing here is a coalition that -- to deliver best candidate to beat Hillary Clinton come to fall and Donald Trump just doesn't know how to deal with this.
BOLTON: Steve, let me ask you something though, did it somehow make both candidates Cruz and Kasich look weaker?
LONEGAN: I don't think so. I think what happened here Ted Cruz came out winner here. He is clearly best at the art of the deal and Donald Trump is frustrated by that. He's supposed to be the great deal maker, he isn't being able to make any of these.
BOLTON: You mean because of the ground game Cruz has.
LONEGAN: Because of the ground game, his management of the ground game, his ability to go across the country. You know, over the weekend while Donald Trump was complaining, Ted Cruz was picking up all the delegates in Maine. No one reported on that.
That's after Utah, Wyoming, Wisconsin, Colorado, North Dakota, Carolina, Georgia. Ted Cruz has been like a one-man delegate harvesting combine and this is really shaking up Donald Trump. Now look, Donald Trump is going to have a good night tonight in the northeast, everybody expected that. But then he has really big problem, Deirdre, huge problem.
BOLTON: And is that Indiana?
LONEGAN: He as to -- no, not Indiana. He has to go to California and he has to explain to the voters of California why he donated tens of thousands of dollars most far left liberal state attorney, attorney general in the state, Camilla Harris, who is the queen of sanctuary cities, who's leading the effort to indict and to sue those who exposed planned parenthood with their great video exposes. He's paid for her campaign.
She is going to be running millions of dollars of ads going into the primary because she wants to be a U.S. Senator and Donald Trump, republican is one of her biggest supporters.
BOLTON: Steve, I'm just -- I'm playing devil's advocate here. I mean, all he's going to say is listen, "As businessman, I supported candidates on both sides of the aisle. That is the part of my deal-making ability." That's going to be the answer.
LONEGAN: An attorney general in California? That is deal-making ability? He can't cut a deal for delegates. But then here's another deal he made. He has to come to New Jersey also on the 7th, and has to explain why all tea party leaders and pro-lifers and pro-gun people have been shoved off the delegate slate and replaced with bunch of left -- of liberal lobbyist delegates.
A big story just broke two days ago. An army of lobbyists that are manning his New Jersey delegate slate. He is establishment candidate. Ted Cruz is the true outsider and that's why Ted Cruz eventually will win on second ballot.
BOLTON: In New Jersey though, how much is it going to hurt your candidate, Senator Cruz, that the governor Chris Christie has very clearly backed Donald Trump?
LONEGAN: The Governor has right to his opinion. I don't think his popularity numbers in New Jersey are very good now. But the big question is what is this trial we've learned about, it's called the racketeering trial on the Trump University for and what's that going to mean in New Jersey coming in general election?
BOLTON: Well, it's true that as you mentioned this is going to trial. Of course Donald Trump says, he assured he will prevail. The university will be cleared but I agree that going to trial is clearly a black eye.
LONEGAN: in the middle of a general election, this would go to be the centerpiece that we have candidate on the Republican Party? Look, I think it was Bill O'Reilly that said there would be a hell to pay.
BOLTON: He did indeed.
LONEGAN: Well, I'll tell you what the real hell to pay is that's a minor price to pay after the convention. The real hell to pay is.
BOLTON: How to pay as if Trump has denied the delegates.
LONEGON: In the general election when -- no, the real hell to pay is if Trump becomes nominee and we're going through general election with Hillary Clinton and he leads the republican party to cataclysmic failure.
BOLTON: There are people who are worried about them. I know you are one of them.
LONEGAN: I'm absolutely one of them.
BOLTON: Thank you very much.
LONEGAN: Thank you.
BOLTON: He is Cruz's New Jersey Campaign Chairman Steve Lonegan with me there. Just three hours to go until polls close in five states. In case you can't wait, we have the first exit polls coming out this hour.
So stay tuned to see how the candidates are going in these very, very early moments. Former Apprentice contestants are speaking out against Donald Trump. We will tell you why. Our own Apprentice finalist, Geraldo Rivera, is with me next.
(COMMERCIAL BREAK)
KWAME JACKSON, FORMER APPRENTICE CONTESTANT: Donald Trump has said many racist things that, you know, I think really are out there in the media already. There's a preponderance of comments, whether it's what he said about Mexicans being rapists, whether he said about the Black Lives Matter music -- Black Lives Matter movement.
(END VIDEO CLIP)
BOLTON: Jackson, one of several former Apprentice contestants who are against Trump saying that quote he appeals to the lowest common denominator of fear, racism, and divisiveness. Former Apprentice finalist, Fox News correspondent Geraldo Rivera is with me now. It is good to see you, Sir.
GERALDO RIVERA, FORMER APPRENTICE SPECIALIST: Thank you, Deirdre. You didn't mention my dance moves.
BOLTON: I know.
(LAUGHTER)
BOLTON: I ran out of time, you've done so much.
(LAUGHTER)
BOLTON: So, first and foremost, full disclosure, we've also had Apprentice stars on who think the world of Donald Trump. So there is clearly a range as there would be with anybody, but when you participated, how did you think it went?
RIVERA: I certainly don't agree with Kwame. I don't believe that Donald Trump has a racist bone in his body. I think he's done some very clumsy things. The David Duke, you know, delay was, I think, the most egregious. The fact that, you know, Trump protesters slugged a black guy and then, you know, went -- you know, lauded by Donald Trump instead of criticized, or whatever. I think he's made missteps, but I think he will correct those, and I totally disagree. I think Trump is a family man, a good man, a patriot, and I have a different view of him having spent every day for six weeks with him during Celebrity Apprentice.