MARIA-01
$14 billion From Apple in Illegal Tax Benefits; Latest Poll Shows Clinton
with 49 Percent Support; Tension Between U.S. and Iran Rising; Kaepnerick
Controversy Continues; Remembering Gene Wilder - Part 1>
Colin Kaepnerick; Advertising; Consumers; Crime; Death; Discrimination;
Economy; Elections; Employment and Unemployment; Entertainment; Europe;
Lawsuits; Mergers and Acquisitions; Movie Industry; Pharmaceuticals;
Policies; Politics; Polls; Products; Storms; Taxes; Technology; Apple;
Ireland>
MARIA BARTIROMO, FBN ANCHOR: (HEADLINES) (MARKET HEADLINES). All those stories coming up this Tuesday morning.
Joining me to talk about it all, FOX Business Network's Dagen McDowell; the King's College Professor of Business and Economics, Brian Brenberg; and, Pollster Lee Carter. Good morning. Great to see everybody.
LEE CARTER, POLLSTER AND PARTNER, MASLANSKY AND PARTNERS: Good morning.
BRIAN BRENBERG, PROFESSOR OF BUSINESS AND ECONOMICS, THE KING'S COLLEGE: Great to be here.
DAGEN MCDOWELL, FBN CORRESPONDENT: Great to see you.
BARTIROMO: Great week? I missed you.
MCDOWELL: No, I missed you so much. You deserve take time off.
[Laughter]
MCDOWELL: You deserve to take time off because you work six days a week, but I missed you a lot.
BARTIROMO: I was watching a little, and then when I got in yesterday I said, oh, Dagen's out. I've been thinking about --
MCDOWELL: Thank you for the Ella Bella photo on National Dog Day though; they made my entire weekend.
BARTIROMO: I had Charlie. I was looking at yours as well. It was a great day. So we have a lot of stories today.
I've got to check in with you on what these polls are saying, Lee. I'm looking forward to that; and Brian, you're here to bring your insights.
BRENBERG: All ways.
BARTIROMO: So thank you so much.
BRENBERG: Good to be here.
BARTIROMO: We've got a big show ahead: retired Four-Star General and FOX News Military Analyst, General Jack Keane is with us today; former Presidential Candidate and Texas Governor, Rick Perry will be with us; and Charles Schwab Chief Investment Strategist, Liz Ann Sonders stops by as well. You don't want to miss a moment of it, so do stay with us.
We kick it off right now with the breaking news at the moment, and that is the E.U. Antitrust Regulators have ordered Ireland to recover over $14 billion from Apple in illegal tax benefits. Regulators say the amounts could be cut if other countries, including the U.S., order Apple to pay more taxes. This seems like a big story, Brian. Do we have a precedent on this? What's your take away?
BRENBERG: This is going to play out over time. Apple doesn't believe that they owe this money. The U.S. Treasury has actually said now this really isn't a fair ruling.
Look, it's no secret that the E.U. is not a fan of Ireland's tax policies. For a long time, they've criticized how Ireland's had lower taxes than the rest of the E.U. So, again, this doesn't surprise me.
In the dynamic of the E.U., Ireland is not a big hit because their taxes are so much lower. Look, Apple saying this is money that we earned abroad. We bring it back to the U.S. we'll pay taxes on it, but we're not doing that yet. So there's nothing here to talk about.
MCDOWELL: The problem is that the E.U. is unfairly targeting U.S. companies; period. They're going after deals that individual companies cut with individual countries over there and it puts in jeopardy any kind of deal that a corporation brokers to bring jobs to any of these nations.
It's a statement about the socialist state. they are in dire need of money to fund the social programs throughout the whole of Europe and this is how they're going to do it, and they will make enemy business and it's foolish.
BARTIROMO: The E.U. looks at the competitive environment based on companies. They don't come to their decisions based on what's the best for the customer.
BRENBERG: Yes.
BARTIROMO: It's all about if this is anti-competitive for another competitor of Apple, then, well, they have to pay the money. That's why they always block deals. They are looking at the corporate landscape.
BRENBERG: Yes; we've seen this with the lawsuits against Google. I mean, they really are - they are sort of defining markets in very narrow ways and they are forgetting about customers. You look at what's going on in Ireland and, look, this is a pretty beneficial deal for Apple. It's a good deal for Ireland. It's a good deal for production. It just - it seems to be a little bit more vindictive than it does to have a real policy precedent here.
BARTIROMO: No surprise that companies want to go and headquarter in Ireland. Look what just happened with Pfizer and Allergan; right, because the corporate tax rate is so much lower in Ireland.
MCDOWELL: And it's an argument for corporate tax reform here in this country, which is really the centerpiece, which you talk about repeatedly, of Donald Trump's tax proposals, in addition to that he wants to do on the individual income tax side.
Also it just speaks to Ireland understands how to bring jobs to the country and how to bring in, even if it's a low tax rate, bring in revenue and the rest of Europe kind of doesn't get that.
BARTIROMO: That's why this will resonate with voters in the U.S. as well. Tax reform is so important.
CARTER: I think is a great example. So people are going to start learning a little bit more about why it's so beneficial to have different corporate tax rates. It does bring jobs. It does bring business back. I think that's something we need to have here in the States.
BARTIROMO: We're going to talk more about this this morning. This is going to be the business story of the moment, that's for sure.
We want to turn to the White House as well, and the race. The new poll this morning shows Donald Trump is cutting into Hillary Clinton's lead. The latest Monmouth poll shows, in a head-to-head matchup, Hillary Clinton has 49-percent support among likely voters, to Donald Trump's 42-percent. Earlier this month, Clinton held a 13-point lead among likely voters. Can Donald Trump continue to close this gap?
I want to bring in Ed Goeas, pollster, former Senior Adviser to Governor Scott Walker and Mitt Romney's Presidential Campaigns. Ed, it's good to see you again. Thanks so much for joining us.
ED GOEAS, POLLSTER AND FORMER SENIOR ADVISOR, GOVERNORS SCOTT WALKER AND MITT ROMNEY: Good to see you; thank you.
BARTIROMO: Your takeaway this morning, as Donald Trump seems to be narrowing the gap?
Well, if you look at the average of all the polls, I think the race has settled into about a five or six-point race. The Monmouth Poll had it at seven points. There are a couple things internally in the Monmouth Poll, it's about three or four points more Republican than they should be. The demographic split on gender is 50/50; it should be 48-52. Both of those favor Trump, so it would give him a little bit better numbers than what you're seeing on the average of all the polls.
Basically, this race after the -- two weeks after the Democratic Convention, that was not good for Donald Trump, has, I think, settled down to where it is. If you look at Hillary Clinton, she's about to point about two points off her high water mark, over the last year. Trump is about 3.5 points off his high water mark. So I think that's a natural center of the race.
BARTIROMO: Lee Carter, you've been in touch with voters. You are watching this in real-time. how do you see it?
CARTER: The way that I see it, I think that Donald Trump has done a great job of stepping back over the last couple of we -- stop taking the bait. He's really focused on the issues. What we've seen is a flip-flop here. So Hillary is out there attacking, saying crazy things about Donald Trump and he's stepped back. He's doing these policy speeches, which are really effective for voters.
He's going to be out there talking about - he's going to be out there talking about immigration tomorrow. It's going to be a really big day for him and I think that we're going to continue to see this gap closed as long as he continues to show this discipline and focus and stops with the crazy, outlandish statements that I think people are really having trouble with.
MCDOWELL: Ed, if you look at the state polls in critical swing states, there are states in play for Hillary Clinton that were not won by Barack Obama. If you look at, say, Missouri or Georgia, she's got potentially a shot in this states. Isn't that worrisome?
GOEAS: Yes; I mean, Trump is actually doing better in some of the Blue States, like Pennsylvania, very much in play still, in some of the polling. Clearly, if you look at the Electoral College map, Clinton has an advantage because she is not only cutting into some of those Red States, but she's moved some of those traditional tossup states into the Democratic column at this point, but it is still very early on that. What you see in the individual states is that's where they're running the advertising. That's where you'll see the advertising wars between the two campaigns and there's still a lot of play left in those.
BARTIROMO: Let me move on to this State Department issue, because a federal judge ruled yesterday, Ed, that the State Department must hand over any nonexempt documents concerning long-time Hillary Clinton aide Huma Abedin before election day. Now are headlines like this impacting Clinton's trustworthiness numbers and the campaign in general?
GOEAS: No; the most recent polls kind of show them at about the same, quite frankly, on trustworthiness and honesty. Their numbers are so baked in, in terms of their negatives. Hillary, on the average of all polls, right now, is at 53-percent; she started at 55. Trump has come down from recent weeks, but he still at 60-percent; he started at 55-percent.
I'm finding in the polling that there's as much question about Trump and his taxes as there is on Hillary and the e-mails. I think barring some new revelation, all of this is is kind of white noise that's already been out there and into the numbers.
BARTIROMO: Brian?
BRENBERG: So it's interesting you talk about these views being baked into the numbers. What does it take to get out off of these negatives, Ed, because it seems like they are stuck there and for somebody to really pull ahead they're going to have to get off some of these negatives? So what do you think happens to make that happen?
GOEAS: Well, I mean, that's the tough thing of this campaign is that traditionally there's 30-percent that like both candidates; that's down to about 3-percent of the electorate. Normally there's only 10-percent that dislike candidates; that's up around 30-percent. So it is very much a focus, right now, in looking at the numbers, of those voters who dislike both candidates driving which one do they dislike more, in terms of moving the numbers. That's where the campaign plays have been at this point.
BARTIROMO: Ed, real quick, any thought on the immigration speech we're expecting from Trump this week? What will we hear?
GOEAS: I think tone and tenor is extremely important. I think what we need to understand is that having the right tone and tenor on immigration only gets us a seat at the table with the Hispanic vote. Right now -- we did the Univision Poll and he was only getting 19-percent of the Hispanic vote. We need to see that up towards 30-percent so we have a group of voters we can go after in turn out for the Republican Nominee.
BARTIROMO: Can he do that? Can he do that; what do you think?
GOEAS: I don't know that he can. I mean, his unfavorable rating with Hispanics right now is running in the high 70s. He certainly has to change it. I think the key on the Hispanic vote is we've always gotten 90-percent of our Hispanic vote for middle-class Hispanics; that's who he's talking to and we have to have that tomorrow night.
MCDOWELL: Just one quick thing: his appeal to Hispanics and Blacks in this country is a lot about appealing to Republicans who are uncomfortable with him and he wants them to get on board. He needs to tone it down, not just to woo Latinos, for example, but also to woo the people who aren't sold yet.
BARTIROMO: Yes, on his side; right.
MCDOWELL: Traditional Republicans.
BARTIROMO: Exactly; Ed, good to see you. Thanks so much.
GOEAS: Good to see you, Maria; thank you.
BARTIROMO: Ed Goeas joining us there. The U.S. Gulf Coast bracing to get drenched with several inches of rain in the next couple days. How states are preparing for this tropical storm, next. Then, a midair arrest after an Alaska Airlines flight - after an unruly passenger tries to open one of the planes doors. We've got the details next; back in a moment.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. Two tropical depressions gaining strength off the East Coast, forecast to make landfall this week. Dagen's on headlines this morning; Dagen?
MCDOWELL: Good morning, Maria. Residents in North Carolina and Florida are preparing for tropical depressions that a forecast to become storms before making landfall. Tropical Depression 8 is off the coast of North Carolina and expected to reach Tropical Storm status today. Forecasters have issued a Tropical Storm Warning for North Carolina's Outer Banks.
In Florida, residents are preparing for heavy downpours and flooding from Tropical Depression 9, now in the Gulf of Mexico. Forecasters say that Depression is expected to strengthen slightly in the next 24 hours and could reach tropical storm strength as early as today.
In Hawaii the Central Pacific Hurricane Center has issued a hurricane watch for the Big Island of Hawaii as Hurricane Madeline closes in. The storm should be near or over the Big Island by Wednesday. (HEADLINES)
And Movie fans, just Americans, people around the world are mourning the death of Gene Wilder. Wilder's big break came in 1968 when he was cast in Mel Brooks, "The Producers". Wilder received an Oscar nomination for his movie and his role as Leo Bloom. He later went on to star as Willie Wonka in the iconic movie, the 1971 film "Willie Wonka and the Chocolate Factory."
Wilder went on to convince Mel Brooks to direct a film that he came up with himself, it was "Young Frankenstein." The black-and-white slapstick comedy was a smash hit, and shortly followed by another, "Blazing Saddles."
Hollywood stars are remembering Wilder on social media, including Steve Martin. Steven Martin tweeted, "Goodbye, Gene Wilder. You were one of the great screen comedians. Original and surprising every time." Billy Crystal had this to say: "Gene Wilder was a giant of comedy. His legacy of films is inspiring. a true genius."
Wilder's nephew said that the comedy legend died late Sunday of complications from Alzheimer's disease. He was the devoted husband to Gilda Radner who passed away from cancer years ago. Gene Wilder, 83 years of age.
BARTIROMO: An outpouring of love.
MCDOWELL: So funny. I read a line that said he filmed comedy in anxiety and that was the genius of his portrayal. I read a letter that he wrote to the director of "Willy Wonka and the Chocolate Factory" and he had one request, that when Willy Wonka first makes his appearance, he wanted to walk with the cane. Remember the scene?
BRENBERG: Yes.
MCDOWELL: Walk with the cane, as if he's crippled, and the cane sticks and he keeps walking and then he does a roll because he wanted the audience to never know whether he was lying or telling the truth, that the truth is always in doubt.
BARTIROMO: I love that story.
MCDOWELL: I knew you'd like that. I saw "Young Frankenstein" at a drive- in; that's how old I am.
[Laughter]
BARTIROMO: Married to the late Gilda Radner.
MCDOWELL: Yes; that was a partnership for the ages.
BARTIROMO: Do you have a favorite Gene Wilder film?
CARTER: I think it's got to be Willy Wonka, but there's so many great ones. I mean, there's so many.
MCDOWELL: You know, he was in "Bonnie and Clyde"; do you remember that? He had a small role in "Bonnie and Clyde".
BRENBERG: Wow!
BARTIROMO: I forgot that.
MCDOWELL: I remember that.
BARTIROMO: We're going to take a short break. When we come right back, investors looking at the job report and the Federal Reserve. My next guest says there is still a sweet spot in the markets. How your portfolio can benefit from some of the biggest names in technology; next.
Then, hackers targeting the ballot box now. The FBI issues a scary warning that Russian hackers targeted state voter registration systems. What it could mean for the presidential race, next.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. Stocks posting modest gains so far this year. Among the standouts? Certainly technology; the sector is one of the best performers in 2016, up more than 9-percent this year. What names should you look to put your money in and what happens next with the markets and economy?
My next guest says stick with the winners that you've been seeing. Joining us right now is Mark Lehmann. He is the President of JMP Securities; good to see you, Mark.
MARK LEHMANN, PRESIDENT, JMP SECURITIES: Thanks, Maria.
BARTIROMO: Thanks so much for joining us. So, okay; we have a lot to talk about in business this morning, a lot of headlines; but let's start there, in terms of investing. How do you allocate capital?
LEHMANN: I think the market has, obviously, hit new highs, but very quiet and unemotional high. It's been low volatility, not a lot of volume. We have been very - at JMP, very busy with some of the tech companies that we've been involved with over the last few months, and quarters.
I think you're going to want to stick with the winners. We've been talking about that for a while. You have Apple and Facebook and other ones like that who have done extremely well. You haven't seen a slowdown in business and one thing - one theme we keep talking about at JMP is internet economics really leads to monopolies and it's really kind of interesting to watch what's happening with these companies. As they've gotten bigger, actually they've gotten stronger. Their business has accelerated and I think that trend has not decelerating. You want to stick with those names.
BARTIROMO: We were going to wait to talk about Apple but that is one of your Recommendations, so let's go right there. What is your take on this E.U. charge?
LEHMANN: It this is an easy target. I think this is not hard to predict, different jurisdictions are going to look for tax revenue where they can. Apple is not exactly a sympathetic target. People are seeing them and seeing where they domicile, making sure they get their fair share. If I were an Apple investor I'd be a little worried, but at the end of August, for a little headline, I'm not sure I'm that worried. I'd be more worried about the Apple 7 launch, which is coming next month.
BARTIROMO: Apple says is going to appeal this, but doesn't this remind you of a d‚j… vu? When Microsoft got bigger and bigger and bigger, they were the target of the E.U. You get bigger, you're in the eyes and the crosshairs of the E.U.
MCDOWELL: Absolutely, and what other companies are at risk for the E.U. going after them and is it a business risk? Apple, huge amount of cash; really untouchable. But what about other tech companies that would be in the crosshairs?
LEHMANN: If you see one, you're probably going to see more; right? You rarely do we see one of these, as it relates to any topic. I think you're going to find that tech companies, and healthcare companies, frankly, that have domiciled over there where the lowest tax rates are, but Ireland wants these companies there. Ireland, clearly, for years - Apple and Ireland have had a long history. They employ a lot of people. So I would expect more and more jurisdictions to find targets, but these companies are very well prepared for this and I don't expect this to be a big theme.
BRENBERG: And do you see Apple pushing back very hard? Obviously they've been in the news, pushing back on different government regulations. Is this another case where they take a stand?
LEHMANN: I think it is. I mean, Tim Cook has already told you that's what he wants to do, and they're well prepared for this, as is Ireland. I - again, I expect for this to take a long time. It's probably going to be settled for a far smaller amount, and I think this is going to be noise that we're not going to be paying attention to very shortly.
BARTIROMO: Well - by the way, let's not forget how the U.S. got in the middle of the Pfizer-Allergan deal.
LEHMANN: Oh, yes.
BARTIROMO: Same reason, because taxes are so much lower in Ireland, and they blocked the deal.
LEHMANN: Well, this is -- every company we're going to talk about is a global company, and more and more global, and more percentage of their revenue is coming --
BARTIROMO: And why wouldn't you want to go have your corporate taxes at 15-percent, or 13-percent?
LEHMANN: It's a theme we're going to talk about for a while, and this theme we're going to talk about, certainly in this election cycle as well. You're going to find - we have to get our fair share for the companies where they are domiciling; clearly want these companies to be based there because they are getting major advantages. Ireland has gotten Apple employees there for a long, long time. That is not going to change.
BARTIROMO: So stay on M&A for a second because technology has been the space where we're seeing consolidation. Who do you think is next?
LEHMANN: I think you're going to see more and more in the software space. We've seen over a dozen deals in that space. This group was hit by about 50-percent in February. You saw over 13 deals which is (inaudible), which is a topic we've talked about a lot here, a sector that is very, very ripe for consolidation, less so now because we've had a couple successful IPO's recently in that space and the valuations have corrected a great deal. A perfect example of that is what we saw with LinkedIn.
There is a catfight for that stock. Even Salesforce, which Marc Benioff wrote a personal letter to the Chairman of LinkedIn and said we're a better fit than Microsoft is, and it turned out in hindsight LinkedIn did not choose Salesforce. Marc Benioff was willing to bet a lot of his market capital and a lot of his cash to go after that company. It tells you those kind of jewels are getting huge, huge valuations and LinkedIn, which, at one time this year, was really not a darling. The market got taken over for a huge premium.
BARTIROMO: If Salesforce was ready to pay up for LinkedIn, is it now in the market, looking for another deal?
LEHMANN: I think so. I mean, I think they're going to have to play catchup --
BARTIROMO: So what's a similar deal as LinkedIn?
LEHMANN: That's a great question. I'm not sure there is one.
BARTIROMO: Okay.
LEHMANN: LinkedIn had such a huge market share, obviously, at what they do and there have been some competitors that have tried. You know, Marc Benioff is a great acquirer and I would expect him to continue to be on that path of leading in software.
BARTIROMO: Mark, great to see you.
LEHMANN: Thanks, Maria.
BARTIROMO: Thank you so much; Mark Lehmann joining us there. Coming up, President Obama celebrates the arrival of the 10,000th Syrian refugee into the U.S. as national security concerns remain but the Administration is not stopping there. We will tell you what they're expecting to do; details next.
Then, Colin Kaepernick getting more political after protesting the American National Anthem. More on the 49er's Quarterback's latest targets; back in a moment.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back to Tuesday morning, everybody. I'm Maria Bartiromo, and it is Tuesday, August 30. Here are your top stories, 6:30 a.m. on the East Coast. The election at risk at the hands of hackers. The details on a new report this morning that shows foreign groups penetrated state systems when it comes to voting.
The tensions between the U.S. and Iran rising at an alarming pace, doubling in the first half of the year compared to a year ago. And a controversial milestone -- the 10,000th Syrian refugee arriving in the United States yesterday. State Department spokesperson, John Kirby, addressing the news in a briefing.
(BEGIN VIDEO CLIP)
JOHN KIRBY, SPOKESPERSON, U.S. STATE DEPARTMENT: Resettlement is one option, but it is not the ideal option. It's not the best option.
The president set a pretty high bar with the 10,000, and again, we are proud that we brought them in, but we are equally as dedicated to our efforts to end the civil war in Syria so that people don't have to flee, so that when this is over, they'll have a home to go back to.
(END VIDEO CLIP)
BARTIROMO: We are looking at the major geopolitical risks coming up in the progrma. Check your refrigerator, meanwhile. Country Fresh recalling 30,000 cases of packaged vegetables. Listeria concern is the problem. We will tell you which products specifically are being affected.
Freebies at Chipotle. What the chain is doing to draw in customers. And futures this morning searching for direction. Check markets right here. We are expecting a weaker opening for the broader averages, but it is early and it is just fractional move right now. We've got a lot of economic data out this week.
In Europe, we're seeing gains across the board. Take a look. Best performer there, the Dax Index in Germany, up almost one percent. And in Asia, mixed performances overnight. As you see, the best performer was the Hang Seng Index in Hong Kong, up better than one percent.
Well, the outraging is growing this morning as San Francisco 49ers quarterback Colin Kaepernick slammed Donald Trump and Hillary Clinton. He's also vowing to keep sitting during the national anthem.
Music star Taylor Swift, just like us. Why she had to skip the MTV VMA Awards coming up.
First, though, right now, the FBI issuing an alert earlier this month indicating hackers outside the U.S. had broken into two state election database systems. Those hacks targeting Arizona and Illinois believe to have come from Russia. Fox News Military Analyst General Jack Keane joins me right now. This hack follows last month's attempted DNC hack as well. General, good to see you.
GEN. JACK KEANE, FOX NEWS MILITARY ANALYST: Good to see you, Maria.
BARTIROMO: Thank you so much for joining us. What's your reaction? How concerned should we be about now this new attempt to try to influence the election?
KEANE: Well, we have got to be concerned, and we should be alarmed by it. And obviously you've already mentioned it. There's been a pattern here. Two intelligence agencies have penetrated the DNC. One is a military intelligence agency and the other is the equivalent to our CIA.
And what's underreported in the United States is that the Russians have had a history of penetrating elections in Eastern Europe. Also underreported here is that they tried to influence the Brexit vote. So they clearly use their cyber offensive capability to achieve their geopolitical objectives.
BARTIROMO: But what's on the other side? How is our cyber forces? Do we have the capability to get behind this and stop this and make sure that they don't penetrate?
KEANE: On the offense, our capability is unparallel in the world. The Russians are second. However, our defenses are not anywhere near what they should be. The only thing that's truly protected in this country is military networks and certain classified aspects of the government. The government itself is not and our critical infrastructure in the United States, banking industry, finance industry, utilities, transportation, those things, are defenseless.
