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Clinton Focusing on Swing States; Fed Chair Janet Yellen Faces House
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Stock Markets; Shimon Peres; Hillary Clinton; Donald Trump; James Comey;
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KELLY: Yes; it was her debate to lose, right, because she had been doing one on one debates against a formidable foe, Bernie Sanders, who kept hitting her home on the Wall Street transcripts. So she should have been prepared for this. So it was hers to lose. So that's why I don't think it's a big victory and showing in the polls.
I think the strongest thing Donald Trump said was that she's been doing this for 30 years and if she wanted to do the change then, why didn't she do it then. But I'm disappointed in Donald Trump. He didn't hitter on Libya --
BARTIROMO: Yes.
KELLY: -- when he was talking about ISIS. I mean, there were so many opportunities that you see him do it at rallies and talks about it and doesn't hit home on it.
MCDOWELL: One thing too though, about her, that lit a fire under her and you see more of a real person. She's energized and you saw that on the campaign trail. That works to her advantage because she struggles with who the heck is she in front of American people, and in front of the public; and if she showed a little bit of genuine enthusiasm, which she did yesterday, that helps her.
KELLY: Well he needs to hit key points, like bleach (inaudible). Why did people use hammers? He needs to start bringing up these things, that she is part of the establishment, that she does feel entitled -
BARTIROMO: Yes.
KELLY: -- and that didn't come across.
BARTIROMO: You know what? Yesterday Wilbur Ross said something interesting, I want to get your take. He basically said, look, the strategy was for Donald Trump to go in there and just called her secretary, not be bombastic and we accomplished that. That's what their strategy was.
KELLY: Each camp -
BROWN: I agree.
KELLY: Sorry, Senator; go ahead.
BROWN: No; Maria, I agree with that. His role was to go in there and be presidential, look presidential, act presidential. Show some deference, but also show that he's feisty and he's not just going to be a pushover. To think that Hillary Clinton's going out there and she's all exuberant about her performance, once again, with all due respect, she barely squeaked by.
She's basically doing that same kind of political double-speak that she's been doing forever. She wasn't asked a tough question. She wasn't pressed on the e-mail scandal. She wasn't pressed on Benghazi. She wasn't pressed on raising taxes, out of sight, out of control and really crushing businesses. So, listen, I think it was a draw, with the edge to her; balls and strikes, no homeruns, no mistakes -
BARTIROMO: Yes.
BROWN: -- and I think the next two debates are really critical.
BARTIROMO: Did everybody see what Howard Dean said about Donald Trump?
KELLY: Yes.
MCDOWELL: I did.
BROWN: Yes, absolutely.
BARTIROMO: Shameful.
BROWN: Maria, can I comment on that, real quick?
MCDOWELL: He said - he all -- he accused Donald Trump of having a cocaine problem --
BARTIROMO: That's right.
MCDOWELL: -- and then didn't back off of it.
BARTIROMO: Look at this. Look at this tweet that he sent, "Notice Trump sniffling all of the time. Coke user?"
BROWN: Maria, listen. I have to comment on that; I'm sorry to interrupt, but, you know, Howard Dean - I'm going to try to be nice. Howard Dean is a jerk and to actually -- he will go down in history, as you remember, as the guy yelling and screaming, you know, uncontrollably after a big speech and no one really alleged that he was drunk or using drugs at that point.
Donald Trump has the right to breathe, has the right to be a little nervous. To have someone who is a physician and who is a leader in the Democratic Party belittle and demean our Nominee and allege that he's on drugs is completely and totally inappropriate -
BARTIROMO: Yes.
BROWN: -- and he should be held accountable for that.
BARTIROMO: It was pretty low. It was pretty low. Senator, good to see you; thank you so much.
BROWN: Good to see you all.
BARTIROMO: Scott Brown joining us there. We will talk to you soon, sir.
Coming up, Wells Fargo's phony account scandal is taking a hit on CEO John Stumpf's own bank account now. The bank claw's back $41 million from the CEO amid backlash over the bank's practices; that's next. Back in a moment.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. A night of protests in a San Diego suburb after police shot and killed a black man at a busy strip mall. Cheryl Casone with the details; Cheryl?
CASONE: Yes, Maria. (HEADLINES) And then testifying before that same committee tomorrow, Wells Fargo CEO John Stumpf. Wells Fargo announced yesterday it's going to claw back $41 million from Stumpf over the banks fake account scandal, that's where customer accounts were breached and money went missing in some instances. The bank under fire for pressuring employees to meet unrealistic sales goals resulting in as many as two million accounts opened without customers' consent. Maria, Wells Fargo is going to launch its own independent investigation. We should also add (Inaudible) is also giving back about $19 million.
BARTIROMO: All right, we will be watching that. Thank you, Cheryl.
MCDOWELL: Of the $100 some dollars that she was -
BARTIROMO: She walks away with what?
MCDOWELL: I think it was 121 million roughly.
KELLY: In this - this is unvested stock so far. So it's the only thing they can actually claw back.
BARTIROMO: They have to do something.
KELLY: It's not cash.
BARTIROMO: There was real calls for John Stumpf's head.
KELLY: Yes. Right.
BARTIROMO: So, we'll see if those quiet down after this claw back, but we don't know.
Coming up, shares of Deutsche Bank this morning getting a boost. Some relief after sharp selloff, a bailout might be out of the question however. What the German bank struggles could mean for the health of the banks here at home. We're going to take a look at the impact of Deutsche Bank's issues. And, your next move could be, well, to Mars. How Elon Musk wants to make living on the Red Planet a reality with a new plan to send humans to Mars within just ten years. We will check out the viability of that. You're watching "Mornings with Maria." Back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. Deutsche Bank getting a break this morning. The stock is rebounding just a bit from all-time lows hit yesterday. The bank CEO saying in interview that the bank does not a need capital increase or government assistance. However, there's news breaking right now that we want to get to and my next guest says the uncertainty over the bank remains a risk for the broader market.
Joining us right now is Will McGough, Stadion Money Management Portfolio Manager. Good to see you; thanks so much for joining us, Will.
WILL MCGOUGH, PORTFOLIO MANAGER, STADION MONEY MANAGEMENT: Thanks very having me, Maria.
BARTIROMO: So, yes; that's the worry, right; that this company has a huge derivatives portfolio. If they go down because they have all of these costs that they have to undertake, they're going to have to sell the portfolio and that's going to impact the broader market?
MCGOUGH: Correct. That's the systemic risk that everybody's worried about right now in the market, is the counterparty risk. If Deutsche goes down, who is behind it. The same thing happened with Lehman, in 2008, but that was a bad market environment. We are in a pretty good market environment right now, near all-time highs; so the market might be able to absorb it better now than it would have in 2008.
BARTIROMO: What do you think, Kevin?
KELLY: Yes, I think one of the biggest issues we have is that if people would start pulling assets away and then that'll be systematic throughout and reverberate throughout, not only -- it's not just a Deutsche Bank issue. It's the entire European Central Banking issue. Deutsche Bank has their hand in shipping, oil, you name it. So the minute that market locks up, and the financing market locks up, no business activity is happening. So you'll see it come in through the manufacturing numbers. You'll see it come in through the investor confidence. I mean, it would be very bad. They have $2 trillion in assets.
BARTIROMO: Dagen, you have breaking news?
MCDOWELL: Yes; Deutsche Bank, essentially a few things going on. Acknowledging the severity of its situation; selling its Avi Life Insurance unit to Phoenix for about $1.2 billion, that will help boost capital position but by very little. Then, there was a report out earlier that Germany, the government, was working on a contingency plan for Deutsche Bank as it's selling assets and the German Finance Ministry has since denied that report.
KELLY: Here's one of the -
MCDOWELL: Wait; let me finish.
KELLY: Yes.
MCDOWELL: -- that the German government is not working on a bank rescue plan, according to the Finance Ministry.
BARTIROMO: And we know that Angela Merkel, earlier this week, said, we are not going to help -- no aid.
KELLY: Why? Because they raised contingency bonds. They are trading at 73 cents on the dollar; that can automatically convert to equity. That's why Deutsche Bank and everybody is saying we don't need to raise money.
BARTIROMO: How significant is this, Will?
MCGOUGH: It could be very significant, and that's really the systemic risk that could come into play. It's just, what's going to happen? What's the fallout from it? How far are they going to push it, like they did with Lehman? Nobody thought after (inaudible) they would let Lehman go under, but they let Lehman go under. So, this could be the first domino to fall. We don't know. We are just going to have to watch and see what happens.
BARTIROMO: Then the capital issue is really the one. I mean, do they have enough capital to deal with $14 billion that they owe the Department of Justice, for example?
MCGOUGH: It's hard to tell. With reporting only being quarterly, it's really hard to get transparency into what's going on at these banks.
BARTIROMO: Yes.
MCDOWELL: But the fact that they went out and sold another unit, this insurance unit, Avi, and raising not that much money --
MCGOUGH: Following the Alex Brown sales as well.
MCDOWELL: Exactly.
KELLY: So investors stay here in the U.S.; right? Is that where people should position in these type of news --
MCGOUGH: Yes; I mean, one of the interesting things about Europeans is they have very low equity exposure. I think the average European has, like, a 20-percent equity exposure, where here in the U.S. we have a much higher equity exposure. So more the risk is potentially smaller towards investors in Europe just because of that behavioral bias they have. So more assets should flock to the U.S. We are near all-time highs, so it's a good market environment. It's just a matter of how the market absorbs it.
BARTIROMO: Real quick, $3.6 billion in assets under management. How are you allocating that money?
MCGOUGH: So right now we're pretty much geared toward equities. You know, we're at or near all-time highs. We're very positive that the NASDAQ, and technology, is leading. They've made new highs, where the S&P is still underneath the highs that we made a few months ago and, you know, small caps are also doing well. So the speculation is there, it's just a matter of getting the S&P in gear with the NASDAQ and then we could be off to the races.
BARTIROMO: Does the election matter to markets?
MCGOUGH: The election, as we get closer, could raise volatility, and it certainly does. I mean, you could watch the Hillary-Trump spread and that's, you know, drive markets up or down, and the Mexican Peso is another thing. So when people start keying in on these drivers of markets and they change from time to time, that's how markets move and trends follow and people make investment for whatever the market could do.
BARTIROMO: Right; so bottom line is, if Trump wins, what does the market do? If Hillary wins, what does the market do?
MCGOUGH: It's a tough call.
BARTIROMO: I know it is, that's why - but you're here.
MCDOWELL: You saw in the debate that futures popped when it looked like Hillary was winning -
BARTIROMO: It's because of stability.
MCDOWELL: -- and the betting markets gave her, I think, a 4-point additional edge over Trump.
MCGOUGH: The market wants Hillary Clinton to win, obviously, because of the risk on environment during the debate and with the peso, but, you know, with that said, the market also thought the Fed was going to hike and they didn't so it's, you know, --
[Cross Talk]
KELLY: People say the market is going to go down because of Donald Trump, because of the uncertainty of some of his policies; they don't know how it would play out.
BARTIROMO: Yes.
KELLY: They know that Hillary Clinton is a crony capitalist and she'll continue the policies of the last administration and that's just the fact of the matter.
BARTIROMO: Yes, but at some point the 15-percent corporate tax rate has to be positive.
KELLY: Of course.
MCDOWELL: And higher capital gains taxes rates have to be negative, which is what she wants.
[Laughter]
KELLY: Also ten-percent repatriation. I mean, that will bring a flow of money back.
BARTIROMO: Will, good to see you, my friend; come back soon. Will McGough there. Still to come, a battleground brawl brewing between Donald Trump and Hillary Clinton; the fight for swing states in the aftermath of the fiery debate. That's next. Then, Amazon lays the groundwork to compete with FedEx and UPS by planning its own delivery operations; more on the delivery wars, coming up. Stay with us.
(COMMERCIAL BREAK)
BARTIROMO: Good Wednesday morning, everybody. Welcome back. I'm Maria Bartiromo. It is Wednesday, September 28th. Your top stories right now at 6:30 a.m. on the east coast.
Battleground blitz, Donald Trump and Hillary Clinton focusing on key swing states this week as they used their performances at the first debate to rally up new support.
(BEGIN VIDEO CLIP)
HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I got a chance to say a few things about what I want to do if I'm so fortunate enough to be elected as your president. You have this old-fashion idea that if I'm asking for your vote I should tell you what I want to do.
DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Her only experience has been a failure. Look at everything she has touched has been failure, one failure after another after another. She bragged about how she travelled all over the world and you know where it got us, nothing.
(END VIDEO CLIP)
BARTIROMO: The very latest on the race for the White House.
Dubai's airport grounds flights over a drone, yes, we have to tell you the details on this one coming up.
A wild fire in Northern California meanwhile grows at a fast pace. More residents evacuated. The blaze is threatening hundreds of structures now. We will bring you there.
The government at risk of a shutdown over funding for Flint, Michigan. Lawmakers are looking for a compromise, these before the federal government runs out of money.
Amazon looks to take on FedEx and UPS now. That's next in the company's crosshairs, the online retail giant moving into shipping.
Futures this morning pulling back after a pretty good rally yesterday. As you will see, it's really a flat situation. So this may very well change and we'll see an extension of the games yesterday. Right now, the Dow Industrials poised to open down about 6 points.
In Europe, markets are higher across the board. One of the reasons is Deutsche Bank is rebounding today after a tough couple of weeks. The DAX Index in Germany up almost 1 percent as Deutsche Bank leave the financials off.
In Asia overnight, mix performances, the Nikkei average in Japan down better than 1 percent. As you can the others fractionally moving.
Elon Musk going to Mars. The entrepreneur laying out his vision to send people to the red planet in the next years. Will you be buying a ticket? We've got the details on that coming up.
It is a battleground (inaudible) meanwhile, both Donald Trump and Hillary Clinton pushing hard for voters in the swing states. The latest swing state poll shows that the candidates are neck and neck in Pennsylvania and Colorado.
Democratic strategist, Tom Baer is with us right now to talk more about that. Tom, it is good to see you. Both candidates hitting the trail today. Trump will be in Iowa, Clinton in New Hampshire. What do you see as really striking you, is the campaigning in battleground states really crucial now as we --
TOM BAER, DEMOCRATIC STRATEGIST: It's more crucial to -- it's more crucial to Donald than it is to Hillary. The reason is that the Democrat goes into this election with 242 electoral votes. These are the 17 states that nobody is really talking about --
BARTIROMO: So Hillary goes in with 242. She needs 270.
BAER: There are seven battleground states, Florida, North Carolina, Ohio, Colorado, New Hampshire, Iowa and Nevada. She has to get -- she's doing pretty well in Pennsylvania that's not on the list and I think she's going to win in Pennsylvania.
BARTIROMO: They're close in Pennsylvania.
BAER: I'm telling you I think she --
BARTIROMO: Fine.
BAER: I think she's going to win. So Donald has to get Mr. Trump. Donald has to get -- he has to get these of six to seven states because of the deficit he has going in. So Hillary needs -- is going to need Pennsylvania about 10, 12 electoral votes.
And so she can get it from Colorado and New Hampshire or Nevada or Florida or just Florida and she wins. So, yes, they are very important and they're very significant and it's a big struggle and she's going to give her all in every state.
And let me also tell you that the other advantage that she has other than the arithmetic advantage is this ground-game advantage. That's really a pretty simple concept.
BARTIROMO: Tony, can he do it?
TONY SAYEGH, REPUBLICAN STRATEGIST: I think Tom's structural premise is right. Generically every Democrat goes into the Electoral College math with a mathematical advantage. I would argue this is probably the one election year in which kind of conventional wisdom is being turned on its head.
Donald Trump this week pulled ahead in some key battleground states including the one we talk about the most, Ohio. Looks the same way in Florida, North Carolina, and Nevada. He's now --
DAGEN MCDOWELL, FOX BUSINESS: In Nevada --
SAYEGH: Now he's actually pulled ahead. He's now competitive in Maine and New Hampshire. So now he's hitting the northeast, traditionally not very good terrain and what really is troublesome for Hillary is this campaign now is moving to those states that you don't have on your list because they're not usually that competitive but are now, Pennsylvania, Michigan, Wisconsin.
All within 3 points, so while I agree with the generic argument, I think it's really getting changed with the dynamic created by Donald Trump's candidacy.
MCDOWELL: On a state by state basis, how much would a debate performance impact that? Is it more about their presence and the presence of their surrogates and the presence of the grassroots operatives in those states versus a national televised performance like that?
SAYEGH: I think it will have very marginal impact and you even see Democrats now conceding that the first debate performance even if they think Hillary Clinton won might not actually move numbers on the ground. Think about who Donald Trump, though, spoke to in his debate.
He specifically mentioned Pennsylvania, Michigan, he's talking to that blue-collar worker, who feels completely left out of this economy, who thinks trade deals have been working against their interest. And if you see some of the kind of anecdotal focus groups, those are the people responding most to that debate.
MCDOWELL: I talked to a major Democrat who is an elected officials and one of these critical battleground states, one of the swing states and the reaction after that debate was Hillary Clinton talks down to us. That was the reaction. It's just -- that was their demeanor.
BAER: There's only one of me here and let me respond by saying, that it's crystal-ball gazing as to what is going to happen in these states at this point and with respect to the argument about the points that Hillary got out of the debate, remember what we are looking for here.
She needs a solid 2 to 3 points, which will come from her people or our people and people who are leaning towards her and then she wins. She's never going to convince Trump people.
So I believe that whatever you say about what some Democrats say to you which I credit that it's our people, two or three points and she wins.
KEVIN KELLY, RECON CAPITAL PARTNERS CIO: I think an important question too is in the battleground states how does a third-party play a role, whether it's Jill Stein, Gary Johnson because you see a lot of millennials not coming over? Do you think they will have impact in a Nevada or Florida to tilt the game one way and who did it impact?
BAER: We don't need all seven. We only need 10 or 12 points. The answer is there are problems and I think there is some turmoil going on in Gary's campaign. You may have heard some things that I've heard. I'm not sure that it's going to finish the way it started.
BARTIROMO: What are you hearing?
MCDOWELL: The fact that he won on the debate stage which we asked him yesterday is going to hurt him.
BAER: I think there are differences of opinion in the ticket.
SAYEGH: The fact that she's outspent -- we would like you to stay. The fact that she's outspent him 8 to 1 in a lot of these battleground states and yet he either is tying her or leading her, number one. Number two, enthusiasm. You had her in North Carolina with 1,500 people, you had him in Florida with about 10,000 people with another 6,000 waiting outside. How much does the spending and the enthusiasm concern you?
BAER: His numbers based upon spending are astonishing is the word and the reason is that the people who support him are not substantive, they don't really care about debate points.
BARTIROMO: You're saying they're deplorable?
MCDOWELL: But when somebody is not substantive --
BAER: I didn't finish the statement. The statement is there is one element of substance that is the primary element and that is up the system. Donald Trump does not represent change, he is the change. And that's -- that's a literal fact and that's what they want and there are a lot of them and that's what this election about.
BARTIROMO: Shouldn't they want that? I mean, look at their situation. They haven't seen incomes move. You know, they feel like they haven't had a shot. The economy is at a crawl. Shouldn't agencies and governments are politicized?
MCDOWELL: When she says she's going to be a champion of small business, I about fell over. She is the ruling political class and they have done jack-all for small business in the decades they've been in power.
BARTIROMO: (Inaudible), Tom?
BAER: Dagen, they're all out of knee slapping and head slapping moments, and that maybe one of them, but the greatest one of the debate is I have a great temperament. I think it's a question of what you see as oppose today what's said. You cannot talk about your character, it's what people observe. So I think there have been knee-slappers on both sides. These campaigns have not been the greatest --
SAYEGH: Not been boring.
BAER: They've been not the greatest in the world and the candidates are flawed in large measure, but in the end the choice is going to be about whether you want a Trump type or you want a Hillary type, prototypically. And I think at this point after this debate which was pretty substantial --
BARTIROMO: It wasn't substantial in terms of content. We didn't learn anything? What did we learn from the debate?
SAYEGH: The vice presidential debate will be a lot more policy oriented.
BARTIROMO: How important is the vice presidential debate that's Tuesday night?
BAER: Not very. The answer is by comparison not very.
MCDOWELL: No, no, it's going to be exciting. It's going to be exciting, Kevin.
BAER: Have you ever seen anybody buttoned up than Mr. Pence? I mean, seriously.
BARTIROMO: I can't get this out of my mind. Believe me. I can't get the "believe me" out of my mind from the convention from Tim Kaine.
KELLY: Maybe we will have real answers so we get a peek at that --
BAER: Pence certainly is.
BARTIROMO: Tom, good to see you. Thank you so much.
BAER: Nice to see you. Thanks, guys. The enemy arrives.
BARTIROMO: Coming up, (inaudible) Capitol Hill is scrambling. They are scrambling to avert a government shutdown. The clock ticking as Congress startles to come together to include funding to help Flint residents deal with lead-poisoned water.
And then sending humans to Mars is rocket science. Inside of Elon Musk's plan to send a manned mission to the red planet in the next decade. Back in a moment.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. Let's check futures. We had a pretty good rally yesterday. As you can see mixed market this is morning. The Dow Industrial had been up and down throughout positive-negative terrorist. We are just looking at fractional moves right now.
A couple of names we are watching that are on the move shares of Nike, the company reporting better than expected earnings for the fiscal first quarter. Results were helped by a jolt in sales from the Olympic Games in Rio. Investors are concerned over slowing demand for the brand. Futures orders missed expectations and as a result the stock is going to be down today as you will see there.
Watching Microsoft today, Bloomberg reporting that Russia plans to drop the company's program as President Vladimir Putin calls for self-sufficiency. The government will start by replacing by Microsoft's outlook on nearly 6,000 computers in Moscow.
A drone causing major flight delays at one of the world's most busiest airports. Here's Cheryl with the story and headlines now. Cheryl, over to you.
CHERYL CASONE, FOX BUSINESS: Maria, so this is interesting. Dubai International Airport closed for about half hour after a drone flew into its air space. It's not the first time, though, that drones have delayed flights in that airport. Back in June, a similar incident caused the airport to close for more than an hour.
OK, back here at home, House leaders have reached an agreement to allow a boat on funding for Flint, Michigan's water crisis. It's part of an effort to head-off a government shutdown this week.
This agreement worked out between Speaker Paul Ryan and House Minority Leader Nancy Pelosi will address Flint's needs in a separate piece of legislation. The House is going to vote today on an amendment to provide up to 170 million in emergency relief towards Flint's toxic water problems which continue.
Let's head out west. A fast moving wild fire destroying at least four homes in Petaluma, California. The flames also damaging about ten others. The fire starting in a grass area near Highway 101 yesterday. Authorities have evacuated about 20 homes. Cause of fire is still under investigation.
