MARIA-03
McDowell, Cheryl Casone>
Rick Scott; Haiti; Donald Trump; Hillary Clinton; Pound Sterling; Juan
Manuel Santos; SnapChat; Jobs; Economy>
MARIA BARTIROMO, HOST, MORNINGS WITH MARIA: Good Friday morning everybody, welcome back, I'm Maria Bartiromo. It is Friday, October 7th, here are your top stories 8:00 a.m. on the East Coast.
The September jobs report due out in about 30 minutes right now, we will bring it to you live, and talk about the health of the labor market and what we are seeing for jobs in the month of September.
Then Matthew's mayhem. The category 3 hurricane now battering Florida's East Coast. Its eyewall is within miles of the coast, millions of residents under evacuation orders. Florida Governor Rick Scott warning that the hurricane is extremely dangerous -- watch.
(BEGIN VIDEO CLIP)
GOV. RICK SCOTT (R), FLORIDA: There is no reason to take a chance. It just doesn't make any sense. This storm is a monster. Again, protecting life is our number one priority.
(END VIDEO CLIP)
BARTIROMO: The death toll has risen to 478 in Haiti. The latest on Hurricane Matthew's catastrophic impact and path coming up.
Donald Trump and Hillary Clinton meanwhile taking time off the campaign trail today to prep for Sunday's big presidential debate, that's the second debate. Yesterday, the candidates sent their thoughts to those affected by Matthew.
But Clinton is now facing some criticism this morning after her campaign planned to buy ads on the weather channel in Florida, which they have since canceled. A major story in markets today, the British pound shaken by a flash crash.
The British pound plunging 9 percent in chaotic trading earlier. Though it has since bounced back and recovered a bit, it is still down though about 3 percent, real volatility in currencies this morning.
Broader markets around the world mostly lower, Futures indicating a fractionally lower opening for the broader averages. But of course, we are waiting on the jobs number and that will be released at the tone in 30 minutes.
In Europe, markets are mixed. Take a look at what's happening, the British pound affecting stocks in London. In Britain, the FT 100 up almost 1 percent on that weaker pound.
Meanwhile, the other major averages lower this morning. In Asia overnight, it was mostly to the downside as you see there, fractional losses.
On the majors, the holiday continues in China this week. All those stories coming up this hour, and here with me to talk about it, Fox Business Network's Dagen McDowell, Recon Capital Chief Investment Officer Kevin Kelly.
Barron's online editor Jack Otter and "MAKING MONEY WITH CHARLES PAYNE" host Charles Payne, good to see you, Charles.
CHARLES PAYNE, FOX BUSINESS: Yes, it's good --
KEVIN KELLY, CHIEF INVESTMENT OFFICER, RECON CAPITAL: Yes --
PAYNE: To be here, how're you doing?
BARTIROMO: Great. We -- well, we want to get your thoughts on jobs as well as the impact of the hurricane --
PAYNE: Yes --
BARTIROMO: What are you thinking about this morning --
PAYNE: Jobs, I'm seeing north of 200,000 --
BARTIROMO: Wow, really?
PAYNE: Yes --
BARTIROMO: That's better than the most optimist --
PAYNE: Here's the thing. It's all anecdotal, but let's go with the JOLTS report, 5.9 million job openings. Listen, the ADP report yesterday was so- so, but professional businesses were high.
This -- the thing I really -- I think swayed me a lot though was the ISM non-manufacturing service economy. That surge in jobs was just absolutely amazing.
(INAUDIBLE), huge demand, and they're talking about new rolls being added, which gets to some of the skills gaps that we talk about all the time, but increased volume.
We've got three months in a row where businesses are actually spending money -- and your durable goods. When you look at, you know -- with our -- with our aircraft, core business spending is up.
So, I do think though, of course, mining is going to be a disappointing -- I think construction comes in better than expected, and manufacturing --
BARTIROMO: Manufacturing --
PAYNE: Is going to be just flat at best perhaps.
BARTIROMO: All right, we've got lots to come, and we're going to be talking about the sectors getting impacted and where the jobs growth really is happening in this economy.
But first, let's get the latest on Hurricane Matthew, it's barreling down on Florida right now. The monster storm, that is what it is been referred to just miles off of the coast and it will make landfall this morning.
The damage in the area already mounting, Adam Shapiro is live for us this morning in Daytona Beach, Adam, good morning to you.
ADAM SHAPIRO, FOX BUSINESS: And a good morning, Maria, I want to show you because this is it. The storm is now -- the eye of the storm about 40 miles due east of where we are.
And this is minor damage. I don't know if you can see that the Chevy Impala, there was a light pole that came crashing down, smashed through the back of that car, and then the other car got hit as well.
But what you can't see -- we showed you last half hour, the roof tiles that were flopping up, where a lot of the roof tiles are now flying off of the roof, entering the back of the hotel, the structure where we are basing for our reports.
The wind gusts have become very strong. The rain -- I can feel the rain hitting me as it pounds and moves south. Due north is behind me, south is that way and this storm is moving north.
But now that it is just off the coast of Daytona and Port Orange, the strongest winds are now hitting this area. Wind gusts anywhere about 80 miles per hour according to forecasters.
The sustained winds at the eye are 120 miles per hour, but for lack of a better term, people here breathing a sigh of relief that the eye stayed off of land.
The eye of the hurricane is about 40 miles out to sea which the forecasters say is a good thing. There are several hundred thousand people now without electricity in Florida, here in Volusia County.
It's about 150,000, we are essentially in this part of Daytona and Port Orange, we've got electricity all around as the power is out. But this hotel fortunately does have electricity.
But the storm is going to be here for a couple of more hours, it's only slowly moving north, it's expected to be in the Jacksonville area, the Georgia border with Florida by about 8:00 p.m. tonight.
But for the next two to three hours, the worst of what this area is going to sustain, that's what they can expect for two to three hours with a tidal surge again of 7 to 11 feet, Maria.
BARTIROMO: All right, Adam, thank you, we'll check back as it develops, Adam Shapiro there on the ground.
The jobs report is due out in less than 30 minutes. This one could help decide the November election. Economists are looking for 175,000 jobs to have been added to the economy in the month of September.
The unemployment rate held is expected to hold steady at 4.9 percent. Joining us now is Trump economic adviser, Steve Moore. Steve, it's good to talk with you, thanks for joining the conversation --
STEVE MOORE, ECONOMIST: Hi, Maria --
BARTIROMO: And of course, this is an important report, this is the last economic report before the debate on Sunday night.
You have to believe that if this is a big number, good or bad, it's going to be one of the big topics of discussion Sunday night.
MOORE: Yes, that's for sure, and I think we get one more look at the GDP number before the election. So, these are the couple of big economic reports that come out.
You were asking what sectors of the economy that I am looking at. I'm going to be looking at Maria, construction jobs, manufacturing jobs, and business services jobs.
Because you know when I talk to people out, I've been all over this campaign trail with Donald Trump. And when you talk to people in middle America, you know what they're saying is yes, you know, unemployment rate is low.
But all those jobs are Wal-Mart jobs and Burger King jobs, it's a retail jobs. And so, we need to get more jobs in the -- in the middle class, working class area where you can raise middle class families. So, I will be very curious to see not just the total number of jobs, but what industries they're in.
BARTIROMO: How do you do that? How do you get more jobs, Steve?
MOORE: Well, when you think we have package of, you know, reductions in taxes and reductions in regulation, it really is sort of as simple as that.
I think if you get rid of this, the sort of view of Washington when I've been traveling with Mr. Trump and we talked to business men and women.
What they say is they're just afraid, Maria, of Washington. What's the next shoe going to come down? You know, they've lived through Obamacare, they've lived through a regulatory onslaught.
They just want Washington to leave them alone for a while, so they can expand their business and invest. And as we've talked about so much -- many times on your show, Maria --
BARTIROMO: Right --
MOORE: Look, businesses are profitable, you know what they're not doing? The link has broken down, is businesses reinvesting not money in the business --
BARTIROMO: That's right --
MOORE: And expanding a new -- yes --
BARTIROMO: Yes, that's part of the area that's been really dead, the businesses are not investing, Kevin.
KELLY: Yes, businesses are not reinvesting, but I think one of the biggest things that's hampering which could hamper the job market further is automation, right?
And so, I'm wondering what Steve's thoughts are on that because we're starting to see that we're reaching full employment right now, and that the Federal Reserve can't move the needle and push businesses anymore to reinvest in their businesses let alone hire more --
MOORE: Yes --
KELLY: Because they're focused on margin and expansion. And part of that margin and expansion is reducing their labor and focusing on automation --
MOORE: Yes --
KELLY: Not necessarily going overseas and looking to outsource jobs. So, Steve, I'm wondering what your take is on automation in the labor force.
MOORE: You know, it's a great question and it's something that's worrying a lot of Americans, there's no question. I'll just give you one example of what you're talking about.
I went out about a month ago and spent a day at Ford in Michigan, and as you know, they're moving very quickly forward with the automated cars.
Well, think about what that's going to mean for not just taxi cab drivers and Uber drivers, but also for truckers.
You know, you're going to in 10 years or so, you know, you're going to have substantial reduction number of who people who do trucking, because these trucks will be driven in an automated way.
People are worried about robotics, changing their jobs on the factory floors and so on. So, it's a major concern of American workers. But I don't think it's right upon us, I think it's still, you know, a couple of years away.
JACK OTTER, ONLINE EDITOR, BARRON'S: One interesting data point is that in 2016, we are actually making more stuff than we've ever made before. We're --
MOORE: Yes --
OTTER: All-time high in --
MOORE: Yes --
OTTER: Terms of manufacturing output --
MOORE: Great point --
OTTER: But there are fewer people doing it.
MOORE: Yes, by the way, one of the things that's really contributed to that renaissance on manufacturing that's happened in the United States has been low energy prices.
You know, I compare energy prices within the U.S. versus Asia versus Europe. And because we're using our fossil fuels, our natural gas and our coal, you know our prices of energy are much lower than they are in Asia and Europe.
And that's actually, Maria, brought some manufacturing jobs back to the United States. You know, we have a very different view of energy than Hillary Clinton does.
She wants to keep it in the ground and use solar energy which is way more expensive. We want to use the cheapest energy we have, which is coal and natural gas.
DAGEN MCDOWELL, FOX BUSINESS: Hey, you, Steve, it's Dagen McDowell. But in terms of --
MOORE: Hi, Dagen --
MCDOWELL: Election, people have already made up their minds about what the economy feels like to them. They probably did that --
MOORE: I --
MCDOWELL: Six to nine --
MOORE: Yes --
MCDOWELL: Months ago, right?
MOORE: I think so. I think that's generally true. But look, if people -- look, my take on this election is pretty simple. I think that people go into the election booth on -- what is the date? November 7th.
And they think --
BARTIROMO: November 8th --
MOORE: Going --
BARTIROMO: November 8th.
MOORE: November 8th --
BARTIROMO: Yes --
MOORE: November 8th, if they say, you know what? Things are going pretty well in America, we can -- we can live with what we've got, then I think Hillary will win. If people feel --
BARTIROMO: Yes --
MOORE: Like the country is going in the wrong direction, and we can't afford four more years of this, Trump will win --
BARTIROMO: Yes --
MOORE: And that's reflected by the way in every poll. The thing that I think has to be worrisome for Hillary is every poll, and this hasn't changed much. Two out of three Americans say things are going in the wrong direction --
BARTIROMO: Yes --
MOORE: She's just --
BARTIROMO: Charles Payne jump in here for a second --
MOORE: Yes --
BARTIROMO: You're absolutely right --
MOORE: Yes --
BARTIROMO: And I agree with Dagen, who hasn't made up their mind at this point? I mean, is the jobs number that important to swing this stuff, Charles?
PAYNE: It is that important because it's not who's made up their mind that's going to decide the election.
BARTIROMO: So, who hasn't?
PAYNE: Right, and I've done --
MOORE: Yes --
PAYNE: A lot of work on this, I've got a 10-page report, you don't mind I'll tout it --
BARTIROMO: Do it --
PAYNE: To my website, wstreet.com --
(LAUGHTER)
No, because I did a lot of work on this --
MOORE: Yes, sure --
PAYNE: You know, we --
MOORE: Yes --
PAYNE: Talked about like GDP growth not being 3 percent. Well, what I've noticed is that as long as GDP is better than it was in the prior year.
In 90 days before the election, how the market is doing. Those kind of things -- people kind of -- they think about the news, you know, so believe me.
MOORE: Yes --
PAYNE: Don't forget when Jack Walsh lost his mind, I think it was October 5th, 2012 when that jobs report came out and it was amazing. Absolutely amazing.
It was the October surprise and he felt at the time that that would put Barack Obama over the finish line, it would help him out. And --
BARTIROMO: Wow --
PAYNE: You know, a lot of conspiracy theorists believe that because the people who are undecided now are going to read the paper tomorrow, and it says another great jobs report they may lean closer to Hillary --
BARTIROMO: Even if -- because you said growth. So, even if growth is at 1.4 percent --
PAYNE: If we were --
BARTIROMO: This is 1.3 --
PAYNE: If we were --
BARTIROMO: If we have .3 percent last year and we were 1.5 percent this year, people might feel like things are getting better. Again, we're not talking about the masses, but just those who are sort of -- but it is -- maybe --
MCDOWELL: I disagree with you --
PAYNE: Yes --
MCDOWELL: I will disagree with you --
PAYNE: Yes, you know, I mean --
MCDOWELL: I think people are --
PAYNE: Coincidence, but I'm saying I went back to 1980, and on the one year, it didn't happen, and that was when Ross Perot ran.
KELLY: I'm glad you brought the 1980, I did though, because we look -- we look at the middle class right now, it's at a 30-year low and they're feeling it out there. So, when you're talking about --
PAYNE: Right --
KELLY: Undecided voters, they need to figure out who is going to be the agent of change --
PAYNE: Let me just tell you real quick. I know we're getting to -- but real quick on that -- on that by the way. And that middle class being shrunken, more people went to the upper class than the lower class.
But between the middle and lower, you do have 70 percent of the population who wonders why those 30 percent. Why that train is leaving without them - -
BARTIROMO: Yes --
PAYNE: And a lot of them are deciding maybe I need to find a different train, a Trump train to catch up with them.
BARTIROMO: Yes, all right, everybody stick around, we got to get your thoughts because you're disagreeing, Dagen. Coming up, SnapChat's next move could make it one of the most high profile IPOs.
More on the messaging company's reported plans to go public $25 billion evaluation is what they're talking about.
Then the Colombian president becoming the recipient of the Nobel Peace Prize this morning. We've got the breaking news coming up.
We are less than 15 minutes away from the September jobs report, that's going to move markets, back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. Hurricane Matthew causing trouble for flyers this morning. Cheryl Casone with that angle, Cheryl.
CHERYL CASONE, FOX BUSINESS: It's really just beginning, Maria. You think about all of the flights across the country that are going to be affected through the weekend.
But right now, nearly 2,000 flights have been canceled for today, and then more than 3,000 flights have been delayed. That's according to the latest numbers we're getting from Flightaware.com.
Some airports in Florida are opening, but there are currently no flights going in and out of them. The situation expected to improve at least later today later this morning when Fort Lauderdale-Hollywood International is scheduled to reopen at 11:00 a.m. Eastern Time.
So, we'll keep you posted of course on travel throughout the country. Now, Hurricane Matthew also forcing some big tourist destinations to close the day. The list includes Walt Disney World Universal Studios, even SeaWorld.
In business headlines this morning, following news on SnapChat. SnapChat's parent Snap reportedly working on an initial public offering that could value the company at at least $25 billion.
It could be the biggest IPO since Alibaba debuted at $168 billion, that evaluation hitting of course back in 2014. A SnapChat has about 150 million active daily users.
And then finally, the Colombian President Juan Manuel Santos winning the Nobel Peace Prize for his efforts to end the conflict with left wing rebels. The Nobel committee in Norway praising him for his peace agreement with those FARC rebels.
The 50-year-old civil war has killed -- get this, more than 200,000 people in that country, more than 6 million have been displaced. He spoke about that very passionately and eloquently this morning, Maria.
The decision coming after Colombians though did vote no to the agreement that he signed with the rebels who has got more work to do, but a big honor for him, back to you.
BARTIROMO: For sure, Cheryl, thank you. Coming up, we are minutes away from the September jobs report, want to get those numbers as soon as they hit the tape.
A 175,000 jobs in September is what economists are expecting. We'll bring you the numbers live as well as take you back to the coast to check on Hurricane Matthew, back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. We're on countdown for the jobs report, we're about nine minutes away from the September jobs report.
Estimates call for 175,000 jobs to have been added to the economy last month with the unemployment rate expected to hold steady at 4.9 percent.
Joining the conversation right now, Brewer Group CEO and Ambassador Jack Brewer. Jack, we've got Charles Payne here who is really optimistic, north of 200,000 is what he's looking for in terms of jobs.
When you're out there, talking to businesses, talking to people, where do you see the growth, Jack?
JACK BREWER, CHIEF EXECUTIVE OFFICER, BREWER GROUP: Well, I'm not that optimistic, I think we'll have a number coming in around 160, 165. But you know, it's been a -- it's been up and down market, obviously you see had a lot of volatility.
We had -- you know, he was pushing in June and July, and now I think you will continue to see similarities to what we've had in August this month.
BARTIROMO: Jack Otter --
OTTER: Yes --
BARTIROMO: Weigh in here, you haven't weighed in in terms of the jobs numbers. You've got an article on --
OTTER: I'm going to ask you --
BARTIROMO: Obviously, you're going to be talking about at "Barron's" --
OTTER: Charles, on the ISM number --
BARTIROMO: Yes --
OTTER: Which was --
BARTIROMO: Which is what Charles Payne --
OTTER: Really strong. We quoted an analyst, I think they called it a textbook example of what a great economic report looks like, that economic number.
So, I'll go with 190, that's what Goldman Sachs is predicting. You know, and we should remember Stephanie Pomboy's point, which is that the margin of error and this thing is about 115,000 --
BARTIROMO: Yes --
(LAUGHTER)
OTTER: So, you really got to look at the three-month moving average to make any sense of that --
BARTIROMO: Yes, but the other point Stephanie was making, Dagen, was business profits. She said profits are in a recession --
MCDOWELL: Right --
BARTIROMO: When you look at the profit part of the story, it's not good.
MCDOWELL: No, and that there is only one instance in modern history where you haven't had an actual economic recession when there was a profit recession.
And I think that goes to the point Charles says that -- I want to push back on what you're saying. I don't believe that people open the newspaper and see headlines and think that even if it's a really spectacular number, I think it's based on their own personal situation.
PAYNE: Well, I mean, if the number is spectacular in my reflexes --
BARTIROMO: You don't think is going to change that both --
PAYNE: Somebody thinks --
MCDOWELL: I do not think that it sways --
PAYNE: Yes --
MCDOWELL: Their vote. I think that a bad debate for Hillary Clinton or Donald Trump will sway their vote more than an economic number.
I think people feel however their personal situation has been quite frankly, lousy for much of America.
PAYNE: Well, you know, I know that we like to speak for all of America, but if the number let's say is 250,000, and that might reflect 250,000 people who feel different this month and they did --
(CROSSTALK)
BARTIROMO: That's off the charts, 250.
PAYNE: I'm just saying -- I was just making an example --
BARTIROMO: OK --
PAYNE: If it's 190,000, it's 190,000. People who might feel a little different now that they have a job this month and they felt last month --
MCDOWELL: But it depends on --
PAYNE: That's all I'm saying.
MCDOWELL: Yes, but it depends on the type of job, doesn't it, Charles? It depends on whether it's temporary work or not?
BARTIROMO: Yes --
PAYNE: No, but I haven't been -- but if I've been out of work, and if I desperately needed a job, I would be thrilled to get one initially. Now, it might start to get a little antsy after I've been on the job for a couple of weeks --
(LAUGHTER)
But initially, I mean --
(CROSSTALK)
KELLY: Talking about -- we all need to talk about what's really important in this jobs number and that's wages. We're talking about the actual jobs number --
BARTIROMO: So --
KELLY: Wages is what matters, and so, I'm sure we'll touch base on that one after this --
BARTIROMO: Hey, Steve, more real quick here, we're waiting on the number, do you think we're going get a very strong number the way Charles is? Is there anything about seasonality? --
(CROSSTALK)
PAYNE: Real quick though, waiting for -- I don't think 200,000 is strong. I just think --
MOORE: Yes, that's good --
PAYNE: It's better than --
BARTIROMO: OK --
PAYNE: OK --
MOORE: That's just what I was --
BARTIROMO: Good point --
MOORE: Going to say is we just -- but we haven't seen in three or four years is the blockbuster number. I'm talking 400, 500,000 -- look, Charles may be right, the difference between 150 and 200,000 is not that gigantic.
But you know, when I talk to people, they think that this economy is built on sand. They feel -- they believe it's built on cheap money and debt, and that can't continue. So, they're worried about recession around the corner.
BARTIROMO: All right, we'll leave it there, we got Jack Brewer, Steve Moore, Charles Payne, Jack Otter, Kevin Kelly, Dagen McDowell, you don't want to miss a moment of it, we got a crucial jobs report out in less than five minutes, stay with us.
(COMMERCIAL BREAK)
BARTIROMO: Good Friday morning everybody, welcome back, I'm Maria Bartiromo, it is Friday, October 7th, your top stories just before 8:30 a.m. on the East Coast right now.
We're moments away from the September jobs report, as soon as that number hits the tape, we are going to bring it to you live. Plus, chaotic trade in the British pound plummeting after a mysterious flash crash.
The British pound nose-diving 9 percent overnight briefly than recovering. It is still down, but well off the lows. It's down about 3 percent right now. Markets ahead of the report look like this, we're expecting a lower opening for the broader averages.
But we're a minute away from the jobs report and this number has improved in the last 30 minutes. We are off of the lows in terms of stock prices, still looking at a decline of about 20 points.
European markets look like this, mixed performances there, the FT 100 is higher on that plunge in the British pound, the others are lower. And in Asia overnight, lower across the board.
Hurricane Matthew barrels down. The eye of the hurricane is hugging the coast of Florida right now, bringing a dangerous surge and destructive winds, millions of East Coast residents under evacuation orders.
We are setting you up right now for the jobs number, and the expectations, Charles Payne in terms of the economist out there?
PAYNE: One-seventy five coming into the week after ADP, some say 170.
BARTIROMO: You're looking at wages.
KELLY: Yes, I'm looking at wages, wages have to tick up, and so, they better be at that 2.7 percent pace, otherwise it's alarming.
BARTIROMO: Let's get right to Peter Barnes, he's at the Labor Department, he's got the numbers right now, Peter.
PETER BARNES, FOX BUSINESS NETWORK: One hundred and fifty six thousand new jobs in September, Maria, 156,000, new nonfarm payroll jobs last month, slightly less than expected. The unemployment rate rose to 5.0 percent up from 4.9 percent in August. First time it's been at 5 percent since April, as more people came back into the labor force, but not all of them found jobs. The labor force participation rate ticking up 1/10 of a point to 62.9, the highest level since March. And the weak August jobs number was revised up as expected by 16,000 jobs to 167,000 new jobs in August. July was revised down, however, by 23,000, to 252, so net revisions for the two months combined were net minus 7,000, not much of a change. Average hourly earnings rose 0.2 percent to $25.79 an hour, there up 2.6 percent, year over year. Average work week also ticked up to 34.4 hours. Looking at sectors that added jobs, once again, professional business services up 67,000, health and education up 29,000, retail up 22,000, leisure and hospitality up 15,000, and construction had a nice pop up 23,000. We could see that up again next month because of Hurricane Matthew. Sectors losing jobs, manufacturing up -- down 13,000, transportation and warehousing down 9,000, government down 11,000, mainly as local governments cut jobs. Maria.