MARIA-00
$400 Million to Iran; A Plane Crash-Lands at an Airport in Dubai and Bursts
into Flames; Rio Olympic Traffic Lanes Causes 74 Miles of Traffic; Time
Warner's Second Quarter Profits Beat Analysts' Expectations; Pharma Sector
Examined; Polaroid Takes on Internet Giants; Trump Vows to Spend $500
Billion on Infrastructure - Part 2>
Stadlen, Richard Madigan>
Politics; Elections; Donald Trump; Polaroid; Investments; Google; Wall
Street Journal; U.S.; Iran; Emirates Airlines; Rio; Time Warner; Barack
Obama; Newt Gingrich; Samsung; Airbnb; Aviation; Finance; Pharmaceuticals;
Infrastructure>
(BEGIN VIDEO CLIP)
BARACK OBAMA, UNITED STATES PRESIDENT: The question I think that they have to ask themselves is if you were repeatedly having to say in very strong terms that what he has said is unacceptable, why are you still endorsing it?
DONALD TRUMP, REPUBLICAN PRESIDENTIAL NOMINEE: We have people that don't know what they're doing. Hillary Clinton will be worse. She's not tough. She's not tough. I know tough people.
(END VIDEO CLIP)
BARTIROMO: The latest from the campaign trail coming up. And the deal buzzes on Wall Street this morning in the pharma sector, Biogen reportedly the latest takeover target. A couple of companies voicing their interest in acquiring Biogen, that's how we got it. The stock this morning is trading down despite that. Using the cell to innovate and draw in new customers, how Polaroid is taking on social media giants like Facebook and Twitter, all of that coming up this morning.
We kick it off right now with markets though. Earnings season in full swing even though a number of big corporations have reported better than expected quarterly results. Overall earnings expected to be down 2.5 percent. "The Wall Street Journal" reporting that S&P 500 companies will post a decline of 2.6 percent in aggregate earnings from the same period a year ago, highlighting shrinking business investments and revenue amid global economic uncertainty.
Joining me right now is J.P. Morgan's private bank chief investment officer Richard Madigan, overseeing more than $1 trillion in client assets. Richard, good to see you.
RICHARD MADIGAN, J.P. MORGAN CHIEF INVESTMENT OFFICER: AS well.
BARTIROMO: Thank you so much for joining us.
MADIGAN: Thank you.
BARTIROMO: So, earnings are going to be down 2.6 percent. We know that the business sector is not investing very much. How would you characterize the backdrop for investing today?
MADIGAN: It's when I wrote a note to our advisors last week and I said one word can make such a difference. Better than expected and remember six months ago we were talking about better cheered (ph). That shift from expectations positively to fear negative. I think it's literally was helping the markets a little bit.
So, it's a wail (ph), which we know, as we're running (ph) off. It's the dollar which is stabilizing. We may get a kick over the next six to 12 months of 3 to 4 percent earnings growth just with dollar stability and the market likes that.
BARTIROMO: All right, so dollar stability has been one thing really or lack of that's been driving this market in the last six months. You think that continues?
MADIGAN: I do, I mean central banks -- you and I were talking a little bit about this ahead of time. Central banks are so divergent in their policies still but I think the biggest shift that you're watching in central banks is less proactive and more not reactive but at least passive. They're preserving optionality because they were running out of bullets. People are pushing on that, not liking what's following through from it. I actually think that's very constructive for the macro background.
BARTIROMO: So, when you see something like the Bank of Japan, which initially the (inaudible) have gone against, a lot of people who were expecting the dollar to be up and the Japanese yen to be down.
MADIGAN: The dollar trade I think is probably been one of the most painful trades for anyone this year but the expectation that we had overshot to such dollar strength, there needs to be some mean (ph) reversion on this. Dudley was out yesterday talking for the first time directly from the Fed putting the dollar center stage is one of the inputs for the Fed so the dollar matters.
BARTIROMO: Let me ask you about policy and how that phase into everything. Will that matter? I mean, so far the presidential election has been a real unknown for investors, right. Going into November 8th, how does this play out you think?
MADIGAN: So the election in the U.S. is a coin toss right now and I would like to see any normal election cycle. Politics would be something that I would be watching but not really focused on. I care an awful lot more about the policy follow-through post election. I think this one watching Brexit and being so surprised by the twist, we just don't know where we're going.
BARTIROMO: Right.
MADIGAN: And probably less aggressive in risk positioning and portfolios. A little bit more cautious because of it but staying invested.
BARTIROMO: So stay invested but you want to raise cash until you know what's going on with the election.
MADIGAN: So we have cash. I think we're probably neutral like in equities and not overreaching. Ironically, even with our discussion in the U.S. being the bias on politics right now, I'm over with U.S because I actually think it's the safe harbor and the quality trade to navigate the next three to four months here.
BARTIROMO: This is important. So, you over rate the U.S.
MADIGAN: Yes.
BARTIROMO: When you look at where the growth is in the world, you're over rating the U.S. but what about valuation? Ho does -- where the market is priced play into that?
MADIGAN: So, the bifurcation in the valuation is so distorted. It's the procyclical, high dividend paying quality dynamic that's expensive. Cyclical component and traditional value stocks are still relatively cheap. So, what you hope is the rotation goes from stability of expensive to bootstrap up the cheap.
BARTIROMO: I see.
MADIGAN: What does that translate to? Energy has done well but it falls out. It's under pressure a little bit. Financials at some point will fight back but the Fed needs to move.
BARTIROMO: Right.
MADIGAN: Consumer discretion in healthcare as well.
BARTIROMO: Has the discussion or the way over a recession, is that now past? Is that in the rearview mirror or are we so potentially looking at a recession in `17?
MADIGAN: I was going to say are we potentially looking at it, yes, `17 I'm not sure. And the longer the expansion goes on the closer we get to a recession. I'm not being (inaudible). People I think over sensationalize the recession is around the corner. They're not marked by time. They're marked by cycle. This is a slower cycle. There's lower inflation. This could go on easily for another 18 to 24 months.
BARTIROMO: And then there's Europe where, you know, the U.K. votes to leave the E.U. You've got terrorism happening, what, three attacks in France in just a month and a half. Europe tourism way down, what do you do with Europe?
MADIGAN: We're underweight (ph) Europe but I think it was much more a reaction to Brexit. I did not expect Brexit to go the way it did. I don't think most people did. It was fascinating to watch how markets reacted to it though because they tried to make it an event to move through. It's not. It's going to be a very protracted process. I think it weighs on growth. I think it weighs on earnings and I think it holds down multiples.
BARTIROMO: How would the market react to a Donald Trump presidency?
MADIGAN: Unfair question. You tell me. I actually don't know. We've been talking about it in my investment committee and I get a lot of challenge (ph) with the...
BARTIROMO: You have to take a look at it.
MADIGAN: You have to but you don't know. The election is a coin toss right now. The expectation is the market trades down. That's not obvious to me. We don't really know what Trump is offering. There is a chameleon-like appearance to what we hear. I don't know what the follow-through is and I don't know what the end of the day what happens in the broader house. So, Congress is going to matter a lot, and the Senate, even more so.
BARTIROMO: Yeah, and that's a great point because you've got corporate tax plan to look at and then you've got trade policy look at. How does that all match up? Richard, always a pleasure to see you.
MADIGAN: Pleasure. Great. Thank you.
BARTIROMO: Thank you so much. Richard Madigan is with us straight from Morgan. Don't forget to tune in to our special coverage of the July jobs report this Friday. "Jobs in America" kicks off at 8:00 a.m. eastern ahead of the important government number for the month of July.
Coming up, Donald Trump says he will spend double what Hillary Clinton will to fix our nation's infrastructure. Stuart Varney spoke to the Republican nominee about his plan -- he'll on us next. Then Google given the green light to take flight. What the government's approval means for the future of the drone delivery business. Back in a moment.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. We're about 35 minutes away from the opening bell for a Wednesday. We're expecting a lower opening to the broader averages although market is off of the lows this morning. It was taking a handful of stocks on the move today. Time Warner shares up on the earnings news. The media giant's second-quarter results were mixed. Profits beat expectations but revenue missed expectations. The company also announcing it's taking a 10 percent stake in Hulu as a part of a joint venture that includes the parent company of this network, 21st Century Fox, which reports after the close tonight.
Google shares are under pressure this morning. The technology giant's drone program is taking flight. Alphabet, Google's parent company getting permission from the White House to begin testing drone delivery in the United States. Google's drone test will be the largest commercial drone test to date in the U.S.
We're watching shares of Biogen today. This is a company up for grabs as the stock spiked yesterday on a "Wall Street Journal" report that Allergan and Merck have expressed interest in acquiring Biogen, but now there's a separate report this morning that Allergan is unlikely to pursue a deal, and that has the stock under pressure this morning, as you can see, that opened lower this morning on Biogen.
Donald Trump vowing to spend more than $500 billion to rebuild U.S. infrastructure. The Republican presidential nominee told our own Stuart Varney yesterday he wants to spend at least twice as much at his Democratic opponent, Hillary Clinton. Stuart is with us right now with his take, good morning Stuart.
STUART VARNEY, FOX NEWS VARNEY & CO. SHOW HOST: Good morning, Maria.
BARTIROMO: What happened?
VARNEY: What happened? If you scan the political headline this morning, what you see is all about Trump versus the world. The president condemns Donald Trump, not fit for the oval office. Trump said war with fellow Republicans. Meg Whitman ditches Donald Trump and the Republicans and goes for Hillary Clinton. If you look at the political headlines, that's what you see -- division and, I mean strong, harsh division. But that's ignoring what Donald Trump said yesterday.
He came up with a plan to rebuild the nation's infrastructure at least twice the size of Hillary Clinton's plan and finance by private enterprise -- by you and I. He went back to like World War II. You get this huge fund together. You sell bonds to the public, which finance the rebirth -- the remaking of America's infrastructure. That's just like World War II. I thought that was a major plan, a real breakthrough and as the economy winds down, I think it's a very important part of his economic program, which we've not heard much about.
BARTIROMO: Yeah.
VARNEY: And we're not hearing much about it because we're all into the politics of the election.
BARTIROMO: Right, well, we know about his corporate tax plan of 15 percent and we know that he's -- he wants to reduce some of these trade deals, but I've got to get Dagen in on this because Dagen has been saying it for years or for a long time for the whole year that we've been talking about infrastructure for how long and so far where is the, you know, shovel ready jobs?
DAGEN MCDOWELL, FOX BUSINESS NETWORK ANCHOR: We're a little more than $100 billion on this trillion dollars stimulus package after the recession in 2009, was spent on infrastructure as more than $800 billion. There's a $300 billion infrastructure package signed in the last year, Stuart. The only thing is ultimately this comes down to who makes the best decisions with your money. Does the government or do you, and if it's infrastructures spending, it ultimately is in the hands of politicians.
VARNEY: Well, another part of Trump's plan is that he would renegotiate the contracts under which you rebuild the infrastructure. The current system is the government does everything. All the contracts, they're all negotiated with unions, et cetera you know. It's the old way of doing it, very expensive and frankly rather inefficient.
Trump's way is private enterprise. It's you, it's my money going into this thing. We get a rate of return. We buy bonds for the rebuilding of infrastructure and they re-negotiate these contracts as to how our infrastructure is rebuilt.
BARTIROMO: Now that is -- that is a real...
VARNEY: It sounds a really dynamic (ph) plan.
BARTIROMO: And by the way, if I'm going to trust anybody with infrastructure, I would trust Donald Trump given the fact that he's a builder.
VARNEY: Well, that's his point.
MCDOWELL: And it's still government borrowing. It's still -- you know, I'm loaning Uncle Sam money when I buy treasury bills. I mean, it's up to Uncle Sam how that money get spent, but it's still debt at the end of the day and we fuss about the nearly $20 trillion in debt that we're now sitting on which doubled under president Obama.
VARNEY: Yes, but it's my money that goes into this voluntarily. It's not like tax money which is wrenched out of my wallet and given to the government.
BARTIROMO: That's the big difference.
MCDOWELL: It's still borrowing them.
UNIDENTIFIED MALE: But Stuart, would you want to get it at this low interest rate environment? Do you want to plug up, you know, your money oat 1.5 percent?
BARTIROMO: Yeah, who's wan to do that at 1.5 percent?
VARNEY: That's something that Donald Trump did not answer. I said to him, look, you got to offer a decent rate of return if you want me to buy these bonds and he didn't answer that question so, that's something to be thought about a year from now if he's president.
BARTIROMO: All right Stuart. See you in about 15 minutes.
VARNEY: OK.
BARTIROMO: Thank you so much. "Varney & Company" begins at the top of the hour right after "Mornings with Maria." Join Stuart in about 10 minutes. As we take a break people, a look on stocks. Futures are indicating a lower opening. The ADP employment report coming in better than expected, 179,000 new jobs were added to the economy last month. Plus, major tech investors betting big on the nostalgic Polaroid brand. Their plan to take on the likes of Vine and Boomerang. Back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Well, Polaroid, the iconic instant photography brand is now going digital with a new app. Polaroid swing is an iPhone app allowing users to capture one second moments, basically pictures with movement. The app is backed by several big technology names including Twitter co-founder Biz Stone. Joining me right now is the co-founder of Polaroid Swing, Tommy Stadlen. Tommy, good to see you. Thanks so much for joining us.
TOMMY STADLEN, POLAROID SWING CO-FOUNDER: Good to be here.
BARTIROMO: Tell us how it works.
STADLEN: So, this is about combining the iconic heritage of Polaroid with cutting edge technology and as you said, it allows you to create moving photos. So, what you do, it's an iPhone app, you hit just one button, just like the old Polaroid and what you get back is this living, breathing photograph. You can reach into it and you can make it move by touching it or you can swing your phone back and forward.
BARTIROMO: I've seen this on people's photo stream where the picture moves.
STADLEN: Yeah, that's right. So, there have been a lot of proofs of concept in this area. You get gifts. You get a lot of people exploring the space between photos and videos, and we thought the Polaroid was the right brand to really own this new media.
BARTIROMO: So, it's not actually an out now (ph) video, but you can play around with it and move the content of the picture.
STADLEN: That's right. It's incredibly tactile. So you know the old feeling you got when you had a Polaroid picture and you'd be able to sort of touch it and feel it. We wanted to bring that sense of tactility back to smartphone photography. And so you can reach in, you can make it move and you can just play with it.
BARTIROMO: So, there's nothing here in terms of printing it out though?
STADLEN: Watch the space.
BARTIROMO: OK, because that was the beauty of Polaroid, that you have it instantly.
STADLEN: We have a hardware lab in San Francisco with an amazing former (ph) team of Apple engineers working on the tech side and we're working on something in hardware so watch the space.
BARTIROMO: Yeah, that's really interesting because, you know, you have to move quickly in your space. I mean, back in the day we all thought Kodak was this gigantic, fantastic, you know, can't lose business, and look, they lost it all with the entrance of digital.
STADLEN: So, I'm biased when I think Polaroid is the most iconic brand in the world. And we think there's such a connection -- Polaroid has this emotional connection with literally billions of people around the world and we felt if we could reconnect with those people with a very kind of democratic product, we could get out into the world. And it's free to download so you know, it will be very, very widely distributed.
BARTIROMO: So, do you see your biggest competitor as Vine?
STADLEN: I think our biggest competitor, you know, in a way, we want to create a world where there are photos, videos and then Polaroid pictures. And that starts in an app because that's the easiest way to get this new vision of medium out, but it's also going to be, you know, the digital world, all over the web and eventually the physical world too.
BARTIROMO: People love movement. And you've said that Taylor Swift had an impact on the creation of Polaroid Swing. How did she impact your work?
STADLEN: Well, there is this funny moment when we're, you know, right at the beginning of this project, Taylor Swift released her album "1989" and the front cover was a Polaroid picture. I didn't say Polaroid anywhere, but you knew that iconic white border. People knew and that I think really reconnected a new generation with the Polaroid medium.
And I think when you use Polaroid, it says something about you. You can connect with your fans if you're someone like Taylor Swift in a very raw and authentic way, and we wanted to recapture that magic and put that magic into a small frame.
BARTIROMO: So, do you have -- you have to keep the border one (ph) like that because that's iconic Polaroid.
STADLEN: Absolutely so. The border is in there -- that sort of -- that iconic white border is there. And, you know, all the branding elements. We wanted to pay tribute to the heritage -- the amazing design heritage that Polaroid has and have and put that into the digital era.
BARTIROMO: Do you try to get, you know, the buy-in of the millennial, the younger audience? Are you trying to get the volume of that person out there who remembers Polaroid and perhaps grew up with Polaroid?
STADLEN: This product is for everyone. But what we see initially, you know, beta testing phase and then just now as we've launched, it is a younger audience. It's that youthful audience.
BARTIROMO: Yes, who wants the pictures.
STADLEN: Connecting with Polaroid, who want the pictures and who wants something different, you know. We felt that memories move and photos should move too. So, we felt that this is an innovation in smartphone photography which in some ways hasn't changed too much since the introduction of the filter.
BARTIROMO: That is really cool stuff Tommy. Thank you so much.
STADLEN: Thanks very much.
BARTIROMO: Tommy Stadlen joining us there. Polaroid Swing currently available for download in the iTunes app store. We'll take a short break and final thoughts from our all-star panel this morning. Back after this short break.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back while I get final thoughts from our all-star panel, Morgan Ortagus.
MORGAN ORTAGUS, MAVERICK PAC NATIONAL CO-CHAIR: So there's a new Reuters poll out today that has Clinton at 33, Trump at 35 and 9 percent for the independent. What's interesting about this poll is I looked at 1992 and what the final numbers where there, Bill Clinton, of course Hillary's husband, was at 43, same thing that she's at today. George H.W. Bush was at 37 percent (inaudible) was at 19. So, I think the really, really interesting parallel which is now 1992, just looking at the numbers.
UNIDENTIFIED FEMALE: So, it's a long 98 days.
BARTIROMO: Long 98 days, Kelly.
KELLY: Yeah, I'm looking at the market we're seeing in the action last week, the bulk of earnings came out from a lot of the majors including tech acted (ph) very well. People are rotating out of some of the expensive sectors in the market including utilities. So, going forward, the market is going to trade on a lot macro concerns right now especially because we do have 98 days left until the election and we're seeing corporations certainly going to hold on to the cash more.
MCDOWELL: Yeah, maybe this year is like '92 except we don't have Ross Perot talking about how much the debt is going on.
BARTIROMO: I'm all ears.
BARTIROMO: The sense of what we were talking about earlier with the head of New York Presbyterian Hospital, that is really disturbing. You know, when Obamacare was constructed, many conspiracy theorists, although now very smart looking people, said it is designed to fail. It is so flawed in its structure it's going to fail and lead to a public auction and eventually single-payer which is Medicare for all because it doesn't work.
And doesn't it look like with the president talking about a public option, with Hillary Clinton talking about a public opting, that we're going down that road. And the danger lies when you have government controlling health insurance in this country, then ultimately politicians make decisions about who gets to live and how long, and I don't think that's a propostion...
BARTIROMO: This was what they were worried about.
KELLY: Right. It is ironic in name, especially because it's the Affordable Care Act, but you get less coverage, you get worse benefits and it costs more.
BARTIROMO: It's not affordable.
KELLY: They do government...
BARTIROMO: All right, Dagen McDowell, Kevin Kelley, Morgan Ortegus, great to see you.
UNIDENTIFIED FEMALE: Thank you.
BARTIROMO: Have a great day. We'll see you back here tomorrow, same time, and same place. But first "Varney & Co." begins right now. Stuart, over to you.
END
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(Show: MORNINGS WITH MARIA) (Date: August 3, 2016) (Time: 07:00:00) (Tran: 080302cb.231) (Type: SHOW) (Head: Ransom Payment to Iran?; New HRC Ad Slams Trump; Trump vs. Clinton; Facebook Live Video Ads; Banking Sector Concerns; New Boston Police Community Outreach Plan; Cat Adoption Program in Conjunction with Olympics) (Sect: News; International)
(Byline: Maria Bartiromo, Dagen McDowell, Jared Max)
(Guest: Kevin Kelly, Morgan Ortagus, Kellyanne Conway, Rick Callicutt, William Evans, Beth Stern)
(Spec: Boston; Police; Animals; Media; Television; Stock Markets; Middle East; Media; Politics; Advertising; Technology; Banks; Safety)
MARIA BARTIROMO, FBN ANCHOR: Meanwhile a bombshell report on the release of detained Americans in Iran. The "Wall Street Journal" is reporting this morning that the U.S. sent $400 million in cold cash to Iran. Some are calling it a ransom payment. Donald Trump's take -- ahead.
Outrage over plans for the place where Osama bin Laden was killed. Wait until you hear what the government wants to do with this compound and it involves children.
One of the most dreaded questions when you go to the dentist meanwhile, have you been flossing, turns out you may not have to feel guilty about it anymore. We will tell you about it.
Starbucks is recalling stainless steel straws due to their risks to children -- details coming up.
Broader markets this morning, futures indicating a lower open for the broader averages and for the stock market. The Dow Industrials expected to open down about 35 points. Stocks are looking to extend a losing streak -- now the longest in nearly a year. We will get a first look at the jobs market this morning ahead of Friday's government report. The ADP report is due out today at 8:15 a.m. Eastern.
In Europe we are looking at weakness once again, take a look, fractional losses there across the board.
And in Asia overnight, markets are mostly lower there as well with the Nikkei average in Japan down 1.8 percent and the Hang Seng index in Hong Kong down 1.7 percent.
A tense moment at the Reds game last night. Reds first baseman, Joey Votto, getting into a confrontation with a fan -- details on his mea culpa coming up.
All those stories coming up this morning.
And joining me to break it all down: Fox Business Network's Dagen McDowell; Recon Capital chief investment officer Kevin Kelly; and Maverick PAC national co-chair Morgan Ortagus. A lot of interesting stories this morning, you guys.
(CROSSTALK)
DAGEN MCDOWELL, FBN HOST: I'm embarrassed by my stack of newspapers and articles but that is how much is going on in this world.
BARTIROMO: Yes. And the Iran story, this plane load of cash for Iran is quite extraordinary.
KEVIN KELLY, RECON CAPITAL: Unbelievable.
MCDOWELL: You know, the question -- you raised this issue. Why now? Why are we finding out about this now -- because of the "Wall Street Journal". This is the "Wall Street Journal's" reporting.
KELLY: Yes.
BARTIROMO: Yes.
MCDOWELL: Incredible investigative reporting -- I want to give them shout out for them.
BARTIROMO: You're absolutely right. And it was all foreign-currency, x number umber in euros, x number in Swiss francs.
KELLY: Yes. And we have (inaudible) literally the federal government couldn't give this ransom.
MCDOWELL: It's against our law to do business with Iran in dollars.
BARTIROMO: So we go around --
MCDOWELL: And they had been -- the Obama administration had been questioned by Congress on this very issue. And it was a total of $1.7 billion deal that they cut with Iran and all the Obama administration would say is we didn't pay the money in dollars. That is all they said until this article came out.
MORGAN ORTAGUS, MAVERICK PAC: The biggest problem with this payment is that for years during the height of the Iraq war, Iran was sending troops and fighters and weapons to kill our men and women in Iraq. To kill them.
