MARIA-03
by Refusing to Endorse Trump; European Central Bank Leaves Interest Rates
Unchanged; Data Compiled by Bloomberg Shows that Goldman Sachs, JPMorgan
Chase and Morgan Stanley Banks Reduced the Amount of Money they Set Aside
for Employee Pay in the First and Second Quarters by a Total of 17 Percent;
Facebook Celebrates a Milestone Status of its Messenger App; Pokemon Go
Gets a Dating Site; ECB Leaves Rates Unchanged; Defiant Ted Cruz Refuses to
Endorse Donald Trump after being Booed during Convention Speech; Columbus
Circle Standoff Ends with Suspect Removed on Stretcher; A Group of Business
Leaders Out with a Public Letter Calling for Companies to Affect how
Publicly-Traded Companies are Run - Part 1>
Anthony Scaramucci >
Cortes; Robert Wolf, Steve King>
Finance; Economy; Pokemon Go; ECB; Ted Cruz; RNC; Business >
MARIA BARTIROMO, HOST, MORNINGS WITH MARIA: Wall Street is cutting paychecks -- the bomb squad is on the scene.
Wall Street is cutting paychecks, why big banks are hurting employees where it hurts -- their wallets, we will tell you about it.
And Facebook celebrating the status of its messenger app. The major milestone for Mark Zuckerberg and company. A new site wants you to catch more than Pokemon.
The dating service embracing the success of the popular game. Markets this morning are searching for direction.
This after the Dow Industrials closed at a record high for seven straight sessions, we had an all-time close yesterday.
We're watching earnings today, that's driving the action. We've got big names like General Motors which beat on both the top and bottom line.
Qualcomm is up 8 percent right now, Mattel higher by 4 percent, all on earnings.
In Europe, meanwhile, stocks are lower, investors are reacting to the European Central Bank's decision to leave interest rates unchanged.
We are awaiting comments from ECB President Mario Draghi, he is expected to speak in about 30 minutes, we will bring it to you.
In Asia overnight, stocks mostly higher, led by Japan. The Nikkei Average up about three quarters of 1 percent.
Joining me to break it all down this morning, former McDonald's USA CEO Ed Rensi with us.
The co-host of "WALL STREET WEEK" on the Fox Business Network Anthony Scaramucci as well.
We want to kick this hour off right now with a can't-miss lineup this morning.
We will be speaking with WL Ross & Company Chairman and Chief Strategy Officer Wilbur Ross coming up.
Fox Business Network's Stuart Varney will weigh in, and former Republican presidential candidate and former governor of Texas Rick Perry to join us.
You don't want to miss a moment of it, so do stay with us as we cover all that is happening.
Meanwhile, Senator Ted Cruz stopping short of an endorsement last night at the Republican National Convention.
Shortly after former House Speaker Newt Gingrich addressed the crowd and that lack of support.
(BEGIN VIDEO CLIP)
SEN. TED CRUZ (R), TEXAS: Stand and speak and vote your conscience, vote for candidates up and down the ticket, who you trust to defend our freedom and to be faithful to the constitution.
NEWT GINGRICH, FORMER SPEAKER, UNITED STATES HOUSE OF REPRESENTATIVES: I think you misunderstood one paragraph that Ted Cruz who is a superb orator said.
And I just want to point it out to you, Ted Cruz said you can vote your conscience for anyone who will uphold the constitution.
In this election, there is only one candidate who will uphold the constitution.
(END VIDEO CLIP)
BARTIROMO: Joining us right now is Congressman Steve King and outside adviser to President Obama Robert Wolf joins us.
Good to see you, gentlemen, thank you so much for joining us.
ROBERT WOLF, CHIEF EXECUTIVE OFFICER, 32 ADVISORS: Great to see you, Maria --
REP. STEVE KING (R), IOWA: Thanks, Maria --
BARTIROMO: Lots to talk about right now. Congressman, let me kick it off with you, your reaction to Ted Cruz last night.
KING: Well, I'm sitting in a group of Cruz supporters with the Texans behind me, and we stood the whole time, and when it got to that part of the speech about vote your conscience, vote for candidates up and down the ticket.
The Cruz people said that's what we all needed to hear, and the Trump people said, we're not hearing what we want to hear.
BARTIROMO: Yes, I mean, and Trump knew it, right? Anthony Scaramucci, he knew what was coming --
ANTHONY SCARAMUCCI, FOUNDER & CO-MANAGING PARTNER, SKYBRIDGE CAPITAL: Yes, he knew it, he was OK with it.
Listen, I mean, part of leadership is that you've got to still knit a coalition.
President Trump is going to need some help from Senator Cruz next year with his agenda.
And so, he was out there, I didn't agree with it, I don't think it was the right thing to do particularly on that stage last night.
It's not sportsmanlike, it wasn't great team play, but I give the candidate a lot of credit for letting it happen.
BARTIROMO: So, did he lose support as a result of that, Congressman?
KING: Well, I think we'll have to look back on this from some weeks to know --
BARTIROMO: OK, we don't know yet --
KING: But as a -- if I were -- if I'm waking up this morning thinking about this is, first, I wish it hadn't happened, I wish it had been a way that Ted Cruz could have been able to flow through the speech that he had.
Because he was calling us to a higher standard, and he was laying out a future for us, and that again, the theme of freedom.
A lot of that was lost in all of the confusion in the last, say, three minutes of his speech or so.
And so, I wish -- I wish it hadn't happened, I wish we could have heard his speech clearly and cleanly in a way it was designed to be delivered --
BARTIROMO: Yes --
KING: I think we would have felt better about it.
SCARAMUCCI: Why do you think he did that, sir? If you don't mind me asking.
KING: That he did what? --
SCARAMUCCI: That why didn't he --
BARTIROMO: Why would Ted Cruz do that? --
SCARAMUCCI: Why didn't he not just endorse?
KING: Well, I think that -- and I don't want to -- I don't want to open this up again and make a big issue out of this because we do need unity.
But you know, I'm standing there with Ted Cruz throughout a lot of this fight from Mid-November, all of December, all of January.
I saw and heard the things that came down on him, and he is a father and wife and daughters that all took some pretty heavy insults through all of that.
It'll be awfully hard to -- I'd say this that if Ted Cruz let the campaign know -- the Trump campaign know that he was not going to do a full endorsement --
BARTIROMO: Right --
KING: They went forward with the speech anyway, and they knew that.
BARTIROMO: And that's credit to Donald Trump by the way. Total credit --
KING: Well, it is --
BARTIROMO: Robert Wolf, you've been watching all of the excitement from --
WOLF: I have --
BARTIROMO: New York, you're headed to the Democratic National Convention next week as you're a supporter of Hillary Clinton --
WOLF: And I'll be with you guys all week --
BARTIROMO: Yes, we will --
WOLF: I look forward to it.
BARTIROMO: We're looking forward to that. So, what's your takeaway from - -
WOLF: My takeaway --
BARTIROMO: Watching all of this from afar? --
WOLF: Is those three words, vote your conscience is the anti-Trump movement's three favorite words.
So, as a Hillary supporter, I am shocked that that was what resonated last night.
I also think they totally overshadowed Pence's speech. If you look at every paper today, the headline news is Cruz, not Pence.
And so, I think it was a very tough night for the Trump group, and you know, I would agree with Steve King that when we probably don't agree on too many things.
But I would agree that, you know, he took a lot of shots at Cruz over the months.
And, you know, what's surprising to me is that it was supposed to be a unity week and three of the top six nominees are not supporting Trump, Kasich, Bush and Cruz.
So, I would not call --
BARTIROMO: Yes --
WOLF: That unity. I would say that the goal of the RNC Convention is to unify and broaden, and that did not happen this week.
BARTIROMO: Now, are we going to see that kind of division next week? I know, there's a lot of Bernie Sanders voters out there --
WOLF: I think we'll go to --
(CROSSTALK)
BARTIROMO: Who are not voting Hillary Clinton, Robert --
WOLF: All together, well, we'll see next week, I hope that doesn't happen. I can't forecast --
SCARAMUCCI: You don't even know the lyrics to that song, Robert, by --
(LAUGHTER)
WOLF: I don't, I have to admit that, I've never been to that type of camp, but I wouldn't even know how to sell it, but you know, whatever.
BARTIROMO: So, Hillary Clinton, Robert, has been the focus of attacks certainly --
WOLF: Yes --
BARTIROMO: All week, and certainly last night where Governor Pence sympathized with Clinton on needing a new title.
Listen to this.
(BEGIN VIDEO CLIP)
GOV. MIKE PENCE (R), INDIANA: You know, Hillary Clinton wants a better title, and I would too if I was already America's secretary of the status quo.
GINGRICH: In contrast to Donald Trump, our national security and foreign policy elites led by Hillary Clinton are incapable of speaking with such honesty while they lie about the threats, we need to tell the truth about the danger.
ERIC TRUMP, SON OF DONALD TRUMP: Vote for the candidate who can't be brought, sold, purchased, bribed, coerced, intimidated or steered from the past that is right and just and true.
(END VIDEO CLIP)
WOLF: Well, I'll be happy to have --
BARTIROMO: Go ahead, Robert --
WOLF: A debate on the status quo, as you mentioned this morning, the markets are at an all-time high and President Obama's ratings is now higher than President Reagan at the same point in their campaigns.
So, you know --
BARTIROMO: They're calling it the Trump rally, Robert --
WOLF: Yes --
BARTIROMO: They're calling it --
WOLF: Yes --
BARTIROMO: The Trump rally --
WOLF: Maybe only those 20,000 people sitting in that stadium, I haven't heard that.
But I think -- listen, I think the secretary is -- has to tell her -- tell everyone what her policies are going to be.
And I think, you know, we had a night that's called "Make America Work Again" and no one talked about the economy.
I think 19 of the first 25 speeches were anti-Hillary as opposed to saying anything about Trump.
So, like I said, I don't really understand how you broaden the appeal of your base, but certainly you threw a lot of red meat to the crowd.
KING: Well, Robert, and we'll say you do look pretty happy this morning, and I understand if you look at the Dow and makes anybody happy, poor, those statistics.
But what I didn't hear in the convention was nearly enough about our national security and foreign policy.
And I wanted to see -- I wanted to hear some strategic approach on how to defeat the ideology of radical Islamic Jihad.
And so up with that up on the table for tonight, I'm hopeful that Donald Trump will lay that out with details on how to defeat the ideology.
That's the most important thing out there that faces our national security, and we haven't been strong enough on that throughout this convention so far.
BARTIROMO: What's Hillary's plan on that, Robert?
WOLF: You know, Congressman, I would agree with you. I think that, we are -- we're getting away from the two most important issues because of a lot of the populist rhetoric by all sides.
And I would agree, foreign policy and the economy is still the most important things.
There's still the book ends that will drive voters, that's where the independents are going to make their decision on.
It's not going to be on, you know, who yells something anti-who? It's going to be who's pro something.
I think we've learned from the Kerry-Bush campaign in that, and anti-Bush campaign doesn't win, but a pro Bush does win.
I think that same win with Obama, you know, versus Romney. So, today, we have to really be clear on what the policies are to make us safe, both, you know, within our country as well as helping our allies.
I thought the words from Trump on not helping our allies in NATO were incredibly surprising today.
I'm surprised that didn't get a lot more airtime, and so, I would agree, I think it's important to hear what Trump has to say tonight.
I've heard that he's back tracking actually on that "New York Times" interview on NATO. But you know, I think we all agree that we have to stand strong with our allies.
SCARAMUCCI: Robert, you've got real wages down despite the president's approval ratings --
WOLF: Real what? --
SCARAMUCCI: Real wages for -- real wages for middle America, down about 9.2 percent, over the last eight to ten years. So, what's the plan, Robert, to make that better?
WOLF: You know, I think that, Anthony, you've been in business a long time. First, we had to pick up the slack, the average hour work week went down to 33-something.
We had to pick that up. You know, we had a lot of these companies made huge productivity and efficiency gains and we have this whole new technological revolution where bricks and mortars companies just are struggling.
Also the transferability of people because housing was down, was tough. I think right now, we have to really focus on making sure we start building in America, you know, obviously, I am for free trade.
I think it's incredibly important that we trade with all of the countries and we don't have barriers around that country.
I'm for smart and good free trade with right labor laws and right environmental laws.
But I think that the more we talk this incredibly protectionist tone, it does not help our manufacturing.
OK, we are at the lowest --
BARTIROMO: Yes --
WOLF: Exports as a part of GDP of all the developed countries. And we only have exports about 11 percent. I mean, Germany is up at 50 percent.
So, we have to make sure we get our hard workers and our hard laborers back again. And that will be the way wages pick up.
BARTIROMO: Yes, Robert, real quick, who do you think Hillary's VP is?
WOLF: You know, I think it's going to be either Senator Kaine or Governor Hickenlooper.
I don't think she will pick a senator that if -- that has a governor that's a Republican because we'll lose that seat in the Senate.
So, I think that -- I know a lot of people are talking about Warren(ph) and Sherrod Brown, but I don't think that she will pick someone in a government-run state.
So, I think it's going to be Kaine --
BARTIROMO: All right --
WOLF: Or maybe Hickenlooper.
BARTIROMO: We will leave it there, Steve King, good to see you, Congressman --
WOLF: Thanks for having me --
BARTIROMO: Thank you, Robert Wolf, always a pleasure, we'll see you --
WOLF: Nice seeing you all --
BARTIROMO: Next week, Robert, thank you --
WOLF: I look forward to it, take care, Anthony.
BARTIROMO: OK, us too --
WOLF: Hi, Robert --
BARTIROMO: Don't miss our live prime time coverage tonight of the convention.
It's the biggest night of the convention including Donald Trump's speech.
It all kicks off at 6:00 p.m. Eastern, join me, as we kick off the prime time schedule tonight live from the arena right here on the Fox Business Network.
Coming up, major pick ups coming to Wall Street. Why some of the biggest banks are hitting their employees where it hurts -- their wallets.
And then forget Tinder or Match.com, there's brand new enemy, your significant other.
We will tell you about a dating website that's taking Pokemon Go fans by storm. Back in a minute.
(MUSIC)
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. Breaking news, a six-hour standoff between New York City police and a suspect now over.
Here's Cheryl Casone with the details.
CHERYL CASONE, FOX BUSINESS: Yes, Maria, good morning. This just ending about within the last 15 minutes or so.
We just got this tweet from the NYPD's special operations division.
Here it is, it says "Breaking Columbus Circle. Hashtag ESU placed man in the SUV into custody without incident.
Great job by all and no injuries." Now police say that they believe the suspect threw a suspicious package described as a fake bomb in a police car near Times Square late last night.
The six-hour standoff caused the closure of several streets in and around the New York's Columbus Circle here in Mid-town Manhattan, also and halting subway service in the area.
Well, Goldman Sachs, JPMorgan, Morgan Stanley have cut their first half compensation pools for employees by the most and at least four years.
Data compiled by "Bloomberg" showing that the three banks reduced the amount of money they set aside for employee pay in the first and the second quarters by a total of 17 percent, $19 billion.
The reason for the cuts to boost profits at the banks. Well, some milestone at Facebook to tell you about.
Messenger now crossing the $1 billion user mark if you like that service.
And then Facebook also saying, there's been 1.2 billion games of basketball and 250 million games of soccer played in that same app.
Users also sent 300 million flower stickers on Mother's Day.
Facebook, another investment platform house WhatsApp has crossed the 1 billion threshold earlier this year as well.
Those are some big news at Facebook. And finally this, Maria, the search for true love, courtesy of Pokemon Go.
Runaway hit game inspiring the world's first Pokemon Go dating service.
It's called Poke Dates, you sign up on the website, answer some questions about what you're looking for in a partner, and then you indicate when you're free to start playing Pokemon.
Poke Dates will then find you a match and send both players a time and location to meet up.
Actually, Poke Date isn't a brand new venture, it's built on an existing dating site called Project Fixer, Maria.
But let's just tie to Pokemon, and call it Pokemon dating. There you go, those are your headlines --
(CROSSTALK)
BARTIROMO: It's very funny --
CASONE: I don't know, back to you.
BARTIROMO: Thank you, Cheryl, thank you. Coming up, business tycoons coming together for the greater good of the economy.
The details on their proposed changes and what it means for your money.
We're talking corporate governance right now in a letter, CEO sent to the top leaders in business.
Then, will he act presidential? That is the big question as Donald Trump takes center stage tonight for his big speech and acceptance of the nomination.
Billionaire investor Wilbur Ross will join us with a preview of the big moment, we're live at the Republican National Convention in Cleveland.
Keep it right here, MORNINGS WITH MARIA continues.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back, seeking change in corporate America starting at the top.
One group of business leaders out with a public letter calling for companies to affect how publicly-traded companies are run.
Among the heavy rates in the group, Warren Buffett, Larry Fink, head of BlackRock, Mary Barra, head of GM.
Jeffrey Immelt, head of GE and Jamie Dimon, head of JPMorgan.
My next guest also saw in the letter and she oversees $2.3 trillion in client assets.
Joining me right now is JPMorgan Asset Management CEO Mary Callahan Erdoes. Mary, great to see you, thanks so much for joining us.
MARY CALLAHAN ERDOES, CHIEF EXECUTIVE OFFICER, JPMORGAN ASSET MANAGEMENT: Happy to be here, good morning, Maria.
BARTIROMO: So, we're looking at this letter in the "Wall Street Journal", the "New York Times", a number of other newspapers where you and your colleagues outline a number of things that you'd like companies to adopt in order to change corporate governance.
What are you trying to achieve?
ERDOES: You know, this all started with the heightened debate around short-termism.
And short-termism really goes against the grain of what all Americans are looking for when they think about investing their profits, their savings for the future so that they can have a proper next day for retirement.
And when you think about short-termism, that goes against everything that they are -- they are seeking to achieve, which is long-term growth in the stock market where they invest.
And so, trying to think about how to get the dialogue back to corporate governance that gears everyone towards the right long-term goals was the -- was the goal for this.
And very importantly, it's the goal for America. You know, there are 28 million companies in America.
But there's only 5,000 public companies you can invest in. But those 5,000 public companies, they represent a third of private-sector hiring and they represent half of the Capex in the United States of America.
And so, to get that, to be geared towards long-term growth is really the goal.
And so we brought a group of people together, starting with the real asset managers that govern and invest in these companies: Vanguard, BlackRock, T- Roll(ph), Capital Group, JPMorgan Asset Management, State Street.
And then we gathered together some leading CEOs that we also thought were very important for the dialogue who run great companies.
So, General Electric, General Motors, Verizon --
BARTIROMO: Right --
ERDOES: And then, of course, two of who the people we think are the greatest thought leaders in the United States, Warren Buffett and Jamie Dimon.
And together we had a dialogue around what it means to be good long-term governance for both companies, the boards that oversee the companies and the shareholders --
BARTIROMO: Right --
ERDOES: That the boards report to. And so what are --
BARTIROMO: Yes --
ERDOES: Those kinds of things? Yes --
BARTIROMO: So, and I'm glad you mentioned the asset managers really as the starting point because you are the owners of the companies, the owners is on you, in fact, to sort of dictate change and help CEOs through this.
Tell us about the changes that you're calling for, Mary?
ERDOES: Yes, well, it's not so much changes, it's just clarifying the things that we think are most important in corporate governance.
So, what's the role of the board? The role of the board is to oversee the company and not be beholden to the CEO.
To be independent, to meet away from the CEO when you have board meetings. To be able to make sure that the right things are happening in the company.
To know management, to have independent thought on the board, to have diversity of thinking, background experience. Those things are super important for our proper and well-functioning board.
What are the right things for the shareholders? The companies like us that oversee the mutual funds that hold these assets?
The most important thing is that we're active, that we're there, that we're prodding, that we're poking, that we're making sure that we know that the right things are happening in the company.
And very importantly that we're actively voting on those issues. All right, JPMorgan Asset --
BARTIROMO: Yes --
ERDOES: Management, we own 10,000 companies around the world.
We vote on a hundred thousand ballot items a year. We meet with about ten different company management teams or boards of directors on a daily basis.
And every time we do that, we're looking for, are you thinking about the shareholder? Are you investing for the long-term? Are the right checks and balances in place?
So that those at the companies that are people who want to invest for the future for their retirement are getting the most out of what they can when they put their money to work.
BARTIROMO: Yes, you make a great point, no board should beholden to the CEO, and they should have meetings regularly without the CEO present, you're right.
Diverse boards make that decision, so make sure the board has complementary, diverse skills, backgrounds and experiences. And you say companies should not feel obligated to provide earnings guidance.
That really speaks to the short-term as some -- and should only be so if they believe that providing such guidance is beneficial to shareholders.
All of these things make a lot of sense. Do you need all of the companies to follow it or are you doing some of this yourself already at JPMorgan?
ERDOES: I mean, it very much follows what many of us already do on a daily basis. But if we thought it was important that we shared our collective thoughts.
When we got together, we had lots of discussion, we had lots of debate, we generally agreed on most things.
Some things we had small differences on and the findings are something we thought was important to publish. Publish for those who wanted to see what some of us who we spend a lot of time doing this.
This is our -- this is our life quest is to get this right for the people that invest and trust us to put their money to work.
And so we thought it was best that we share it. They're not -- they're not principles that other people have to share. There are best practices. There are things that we think should engender a debate.
The companies should read that, the boards of directors, people who act as directors on any kind of board should read it, and should just think about, are these the kinds of questions I'm asking?
When I'm sitting at the board, does our board function like this? Are there things we could --
BARTIROMO: Yes --
ERDOES: Be doing to make it better?
BARTIROMO: You make great points, Mary. Let me ask you this, because I was having a discussion earlier with Ed Rensi; former CEO of McDonald's USA.
And he said, look, if you want to affect growth, and it sounds like this is one of the ultimate goals growth, you also have to deal with regulation, something about Dodd-Frank reform.
I know this is sort of apples and oranges, it's not exactly in the letter.
But how do you feel about regulatory reform, and is that needed in order to move the needle on growth, Mary?
ERDOES: Well, regulatory reform hits all companies across America and across the world.
It just depends on what jurisdiction you're in, and regulations are there to try and make a fair level playing field for people to operate and protect all the constituents as best they can.
And so, the most important thing is to work within those regulations and to find a way to make sure that the products and services that you're delivering out to the end client are the ones that are the best for the client.
And the regulators try and help to do that. I think the challenge comes when different regulators have competing issues and/or they conflict with one another and/or if you're dealing with international markets where you might have local regulations that don't necessarily match with your home country regulations.
And so those -- that's where things can become challenging and you work through them.
And I think that, you know, regulations can get to a point where if they're not well thought through they can stymie growth.
And so, you don't want that, you want very smart regulators to sit with very smart CEOs and think about how do we make good products, good services and grow.
So that we can help the economy to continue to flourish and not to slow down or to move backwards.
BARTIROMO: Mary, before we go, let me ask you a couple of questions on what's happening in the world today.
Obviously Britain leaving the EU, are you expecting to make major changes or any changes in terms of moving people out of London and into the continental European area?
ERDOES: Right, you know, it's very early days on Brexit and what that means for European issues, passporting of how money is managed and flows of funds.
And so, that's very important. From a markets perspective, I think it's -- I think it's just a very important to recognize, number one, it wasn't traumatic on the markets.