Final Debate Reviewed; Markets Examined - Part 5



McDowell Lenore Hawkins, Kat Timpf, Tom Mark Lehmann >

If you listen to Trump's speeches, he always includes a portion in the speech where he says you know election day is everything, I don't care if you're sick, I don't care if you're on your death bed, you've got to get up and vote in this -- in this.

They're trying to steal this election, it's kind of an incentive that Trump is putting out for his own voters.

MCDOWELL: Got you.

TIMPF: Is it an incentive or is he concerned about losing? You know, that does make sense to me that talking point that I keep hearing does make sense.

YORK: Oh, well, it's certainly a rationale for losing and he can say afterwards that it was rigged. But you know, the one thing he said in the speech in Ohio yesterday was that of course I will accept the results of a clear-cut election.

And you know if the polls are correct, and he loses by 7 points, no way to claim that it's rigged. Rigged only --

TIMPF: I think --

YORK: Works in a close election.

TIMPF: I think his supporters still might though.

YORK: Well, look, there have been a lot of Republicans who believe that Democrats were practicing voter fraud over the years. Certainly in 2000 and 2004, you had a lot of Democrats suggesting that Republicans had rigged the election.

There were some Democrats who claim that Karl Rove had personally hacked the electorate voting machines in Ohio in 2004.

So, you get -- you've gotten in a lot of talk on both sides about that. But it really I think will disappear if the election vote is really quite clear-cut.

BARTIROMO: But go through some of these down-ballot races, because look, there is a worry that Republicans will lose the Senate. What action do they need to take to maintain control of the Senate?

You know, the last couple of weeks, we saw a huge market sell-off because investors were afraid that this would be a sweep --

YORK: Yes --

BARTIROMO: President house and Senate on the Dems side.

YORK: Yes, well, first of all, the Republicans now have 54 votes in the Senate. So, if Democrats win 4 seats, pick up 4 seats and it's 50-50, and Hillary Clinton wins, then they would effectively control the Senate because the vice president in this case Tim Kaine would cast the tie- breaking vote for Democrats.

We actually had that situation for a few months in 2001, it was a mess. It was a power-sharing agreement between Republicans Senate was split 50-50. It was resolved when one Republican defected to the Democratic side, gave them a 51 vote majority.

So, Democrats would much rather pick up five. A lot of Republicans are -- think that they probably lost two seats already, Mark Kirk in Illinois, Ron Johnson in Wisconsin.

Those other ones, the endangered seats, Kelly Ayotte in New Hampshire, Toomey as we talked about in Pennsylvania, Burr in North Carolina, those are really tough seats for Republicans to defend. If they lose them all, they'd lose the Senate.

BARTIROMO: Wow, all right, Byron, great analysis as always, good to see you.

YORK: Thank you, Maria.

BARTIROMO: Thank you so much, Byron York joining us there. By the way, you can relive all of the excitements from the third and final debate this weekend.

Fox Business Network is re-airing the final presidential show-down Saturday and Sunday night at 8:00 p.m. Eastern. So, join us once again as we re-run that special broadcast.

Coming up, has the Affordable Care Act become unaffordable? Many people would say yes. One of the architects behind Obamacare will weigh in on how their Healthcare Act is doing and how to heal it.

Then next, the world's most expensive potato chips, we'll take a serious bite out of your wallet. Why the new snack from a Swedish brewery cost $11 per chip -- what?!



BARTIROMO: Welcome back, some sad news to report. The operation to retake Mosul in Iraq has claimed the life of an American. Cheryl Casone has the details here, Cheryl.

CHERYL CASONE, FOX BUSINESS: Yes, Maria, officials say U.S. service member embedded with Kurdish forces in Iraq was killed when his vehicle ran over a bomb north of Mosul.

He was the fourth service member to die in combat, fighting ISIS in Iraq this week. And this also mark the third combat death for the U.S. military for the month of October.

There are about 300 special operations forces embedded with Iraqi and Kurdish troops in the fight to take back Mosul. In all, around 5,000 American troops are currently stationed in Iraq.

Well, Harold Martin, the former NSA contractor accused of stealing 500 million pages of classified information is going to face espionage charges. That's according to a Justice Department court filing.

Martin was arrested back in August, but the case was kept under seal until earlier this month. Federal prosecutors say that Martin spent decades stealing the records which include top secret information about military operations.

Martin is due in court today for a hearing in that case. Well, a raffle of Nike's back to the future shoes raised $6.8 million for Parkinson's research.

This after people paid $10 for a ticket hoping to win one of the eighty six pairs of the Nike Mag shoes with of course those futuristic self-lacing systems on them.

Nike donating the money it raised from the raffle to the Michael J. Fox Foundation for Parkinson's research. And finally this, and this is a very pricey chip.

Check this one out. A Swedish bakery -- brewery, excuse me, cooked up the most expensive potato chip in the world, $56 for a set of just five. That's a little more than 11 bucks for each chip.

St. Eriks Brewery says it wanted to have a first-class snack to go with its first-class beer. The chips are made with potatoes which are harvested by hand.

They come in five flavors, mushroom, truffle, seaweed and India pale ale. Maria, so far, only a 100 boxes of the sets have been sold. The proceeds all of course going to charity.

And they got a little bit of PR out of it of course.

BARTIROMO: Unbelievable, $11 for a potato chip --

TIMPF: Yes, charity is good --


TIMPF: For $11 --

BARTIROMO: Going to charity --

TIMPF: For a chip --

BARTIROMO: All right, thank you, Cheryl. Coming up next, merger-mania from big tobacco to cable giants. More companies aiming to join forces, what's next and what's behind a flurry of deal proposals we've seen recently.

Also ahead, a bloated Democrat in the battle for Florida. A judge denying a push to verify voters, how the move could sway the election, back in a minute.



BARTIROMO: Well, it looks like merger-mania is in. British American Tobacco offers $47 billion to acquire the remaining stake of Reynolds American that it doesn't already own.

And there is also a deal being talked about between AT&T and Time Warner this morning as well as Qualcomm and NXP. Want to break it all down right now with Rich Peterson, and he is senior director at S&P Global Market Intelligence.

Rich, it's good to see you.


BARTIROMO: So, characterize what you're seeing in deal flow right now. What's your take? Is this -- where are we in terms of --



This is the fourth consecutive year which has been over $1 trillion in announced U.S. M&A activity. Though, we're down year-over-year, a year-to- date we're about 1.2 trillion.

A year ago this time about 1.7 trillion. We are taking into my -- last year was a record year, $2 trillion in announced deal activity. The fact is, mentioned about the possible BAT, buying remainder of Reynolds.

That would represent of the top four deals this year. Each of those deals have been (INAUDIBLE) acquisitions of U.S. companies, so, that's an issue that has not even been discussed.

BARTIROMO: So, what's driving that? Is that a currency story driving that or is it specific to each deal that you're talking about.

PETERSON: Well, I think specific to each deal. Because the biggest one is I'll say Bayer, Germany's Bayer buying Monsanto.

But then you also have Canada's Enbridge buying properties here in the United States, in the energy distribution sector.

BARTIROMO: Yes, I'm glad you mentioned that. This story in the journal saying Morgan Stanley stands to collect $120 million if the Bayer deal for Monsanto closes, $57 billion. So "Wall Street" is also really benefiting - -

PETERSON: Well, that segue turns earnings because, you know, financials are the best performing sector in terms of third quarter earnings results, up about 12 percent so far, be the great beat by American Express, the best beat.

I think it's about 7 or 8 years, now that has come true by, you know, buy- backs, through cost-cuts as well as some organic growth. But shows good management over there at AMNEX.

But then also the investment banks have done well, especially Morgan Stanley in terms of fixed income trading, now as we talk about deal activity is helping, you know, fee activity.


HAWKINS: How much of the fixed income activity at the banks do you think - - if maybe there's still one-off event that became right after the Brexit vote where everybody had to --


HAWKINS: Readjust their portfolios, and that may just be a onetime blip.

PETERSON: Yes, that's a good question. I think, you know, when Morgan Stanley -- and they've had a lot of cut-backs, they can be more efficient and more -- and more rigorous in quest discipline.

I think, you know, Brexit, you know, dropped a lot of opportunity I think if rates go higher in 2017, that may, you know, drive more opportunity.

MCDOWELL: In terms of the overall earnings picture, you've had a large percentage of companies that had beat, and it looks like at least right -- not including this morning, right? That we're going to snap that --


MCDOWELL: Four quarters --

PETERSON: Quarters, right, sure --

MCDOWELL: Of declines in earnings --


MCDOWELL: Every year --

PETERSON: Yes, the good news is that this is going to be a positive quarter earnings right now. The capital IQ estimates are 0.2 percent, that's the bad news, it's very anemic.

But then you have to exercise energy, energy is a 70 percent negative drag. So if energy -- the improvement, but it's still a modest increase and looking into the fourth quarter of 2016 expectations are 6 percent and the hope is, you know, 2017, as I maybe alluded to earlier.

If you get some sort of bargain to repatriate some of the cash abroad that could be sent for CAPEX and for -- you know, hiring that can help earnings even more.

BARTIROMO: So, go through the sectors, what's doing best this quarter?

PETERSON: Well, you know, financials is about 12 percent, technology about 5 percent, material is 8 percent, the laggards are, I'll say energy, real estate which is the newly reclassified sector of the S&P 500.

Because that may be in fact helping the financials value. You took out all the REIT and property developers, and now you have a more streamlined financial sector.

HAWKINS: And how much of this do you think is because of the financial engineering of all those share buy-back. I mean, it's kind of -- the (INAUDIBLE) and the push-up bra of the financial world where you reduce the number of shares outstanding with these share buy-back.

And so, your earnings per share look a lot better, but it's only because you're dividing by a smaller number.


BARTIROMO: By the way, GE raised its buy-back today by $4 billion.

PETERSON: Yes, well, I mean, that's the world we live in. The world we live in is sort of a like a tripod, it isn't just purely organic activity. You know, it's the buy-backs, it's of course containment and also is the growth organically.

BARTIROMO: So, what are you looking at in the fourth quarter? Now, you have a new report out looking at M&A in the fourth quarter.


BARTIROMO: Any expectations after the election past? --

PETERSON: Well, I think, there's a lot of uncertainty, and so far going into, you know, we're all in -- not even in one-third of the way through the fourth quarter of this year.

It's not even about 60 billion in announced deals. I think as we get the resolution --

BARTIROMO: Eighteen days away --

PETERSON: Eighteen days away --

BARTIROMO: And counting --

PETERSON: And after November 9th --


PETERSON: We should see maybe more big deals in technology. I think healthcare could be very interesting because if there's more regulation in 2017.

Some potential buyers may look to make deals now before any changes occur in the next commercial session.

BARTIROMO: That is a good -- that's a good point because if they expect Hillary is going to win and then we see drug -- you know, price caps on --


BARTIROMO: On drugs, they may be forced to do deals.

PETERSON: And one area like -- even though M&A as mentioned is down year- over-year, one segment's leverage buyer of private equity.

I think, you know, modest active compared to prior years has been about $70-plus billion in LBOs year-to-date compared to about $60 billion a year ago.

So, that's a good sign.

BARTIROMO: So, more private equity deals then sort of standard company over company.

PETERSON: Well, I mean, we had the one a few days ago where, you know, Canada's Onex bought a Midwest growth restore chain, saved a lot.

I think also you have another deal with Vista Equity Partners, fair and active buyer in technology properties.

BARTIROMO: Good stuff, Rich, thank you so much.

PETERSON: Great to be here --

BARTIROMO: Good to see you --

MCDOWELL: Good to see you, Rich --

BARTIROMO: Rich Peterson joining us there. Coming up next, is there a prescription to fix Obamacare? One of the architects of the Affordable Care Act is with us this morning.

And then McDonald's gets a big boost from all-day breakfast earlier this year, but are investors still loving it. We're breaking down the fast-food chain's third quarter numbers and they were better-than-expected, stock is up.

As we take a break, take a look at these pictures in the international space station, three new crew members just coming on board, they include two Russians and one American.

They join three other space station members who have been on the space station since July and are due to return to earth next week, back in a minute.



MARIA BARTIROMO, MORNINGS WITH MARIA HOST: Good Friday morning, everybody. Welcome back. I'm Maria Bartiromo. It's Friday, October 21st. Your top stories right now, 8:30 AM on the East Coast, the final push for the oval office underway, Vice President Joe Biden hitting the trail for Hillary Clinton. Well, the man that hopes to take his job, Governor Mike Pence defended his running mate.


JOE BIDEN, U.S. VICE PRESIDENT: The things that Donald Trump is saying and doing is generally a threat to the Democratic process, which is based on trust. Think about what it's no Democratic process can be sustained without a sense of trust.

MIKE PENCE, VICE PRESIDENTIAL CANDIDATE: Of course, we will accept a clear election result. But we also reserve the right to contest or file a legal challenge in the case of questionable results.


BARTIROMO: We have the very latest on the race to the White House coming up this half an hour. The president, meanwhile, making a final push for Obamacare, why he's calling for a public option even after hedging against it years ago. Earnings driving the action on Wall Street today, McDonald's reporting third quarter earnings earlier this hour, beating expectations on revenue and earnings, the stock jumping on the news as you he see there. It's going to open higher. General Electric a different story, that stock under pressure. That's weighing on the broader averages today. G.E. reported earnings that were better-than-expected, but the revenue missed expectations with revenue 29.27 billion, as a result market under pressure. The Dow Jones Industrial average expected to open down 60 points that's a third of a percent, the S&P and the NASDAQ also under selling pressure right now.

The FT 100 in London, is up quarter of a percent, but the averages in the Eurozone relatively flat this morning. In Asia, overnight, stocks were mixed. A typhoon in Hong Kong caused the closing of the stock market there, Hang Seng Index closed due to that typhoon. Turn to a key issue for Americans, access to health care, President Obama speaking in Miami about the Affordable Care Act yesterday, slamming Republicans for criticizing a public option plan that he considers to model after George W. Bush's legislation, watch.


BARACK OBAMA, U.S. PRESIDENT: If you are in some remote areas or you're in some small towns, it may be that the economics of it just don't work unless the government is providing an option. If the private insurance are competing for business, then you don't have to trigger a public option. This is not a radical idea, this idea is model on something the Republicans championed under George Bush, for the Medicare part B drug benefit program. It was fine when it was their idea.


BARTIROMO: Joining me right now is Oak HC/FT venture partner and chairman of medical ethics and health policy at the University of Pennsylvania, Dr. Ezekiel Emanuel. Dr. Emanuel, good to see you, thanks so much for joining us.


BARTIROMO: So, you're one of the architects of Obamacare. Is the president's public option plan really that similar to President Bush's?

EMANUEL: Well, it's similar in that, there are going to be some areas in the country where it's hard to get insurance companies and enough of that to compete. But the real issue here is the fact that we're going to have nearly 14 million people sign up in this open enrollment period. We still have about 10.5 million people who are eligible but haven't signed up, and we have to get to them. Twenty percent of them don't even know that they have to get insurance or understand the exchange, and so that's a big number, 2 million people that could be easily be drawn in with subsidies. And I think we need a big push to get them in, despite all the advertising a lot of people still don't know that they can get subsidies, they can get help with their insurance.

BARTIROMO: Well, getting more people insured is certainly one of the positives of this story, but largely this story has been a negative, I mean we speak with business managers all the time, small business in particular, they're getting strangled by the cost of Obamacare. Individuals are just getting -- going bankrupt because it's costing them so much. I mean, is it fair to say the Affordable Care Act at this point is a failure?

EMANUEL: Absolutely totally not. That is a mistake. Go back to 2009, before the Affordable Care Act was passed, 50 million Americans uninsured, 20 million of them now have insurance because of the Affordable Care Act. The Affordable Care Act has helped bring down health care costs on a per capita basis to lower than it's ever been. Negative growth on per person basis in Medicaid and Medicare, and lower commercial rates than we've had during the Bush administration. Both on -- getting more people enrolled and on getting costs under control, it's been a success, and it's come in way under budget.


EMANUEL: It's estimated that it's $400 billion under budget by 2019. So, it is not a matter of a failure, it's actually a success. As President Obama clearly said, look, after six years we've seen some unintended consequences, we've seen some problems with the legislation, no one from day one said it was perfect. And what we actually need to do is to make tweaks. It's interesting, conservatives and Republicans health policy people, when they're not in front of the TV cameras agree on about 70 or 80 percent of the solutions.


EMANUEL: If we just had some bipartisan collaboration, we could actually solve most of this problem.

BARTIROMO: Well, it's interesting you say conservatives and Republicans, Ezekiel, but -- let's talk about one leading Democrat said just recently, you've got -- I'd love to hear your answer to this. Listen to this, watch.


BILL CLINTON, FORMER U.S. PRESIDENT: So, you've got this crazy system where all of a sudden 25 million more people have health care. And then the people are out there busting, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half, it's the craziest thing in the world.


EMANUEL: Well, I think.

BARTIROMO: Bill Clinton.

EMANUEL: Yes. Bill Clinton is one of the sharpest people on policy, including health care policy.

BARTIROMO: So you're agreeing with what he said.

EMANUEL: Wait a second.


EMANUEL: I this if you listen to the full thing that he said, I think he has a point, which is that for Americans between 250 percent of the poverty line and a 400 percent of the poverty line, roughly $50,000 to $100,000, we need to bolster the subsidies in the individual market. But I would also emphasize, for most of those people they get their insurance through their employer, and employers have actually seen a slowdown in health care costs, compared to what the health care cost under George Bush, and that has been a good thing. Unfortunately, what a lot of employers have done has transferred more of the costs of health care on to their employees.


EMANUEL: And that is why employees are feeling bad, not because health care costs are going up so fast, but because employers have said, you know, we're going to make our employees pay more, they keep making huge profits and transfer more of the costs of life on to their employees, that is the unfairness.

BARTIROMO: Small business is saying, you know what, I'm not going to hire anybody, anybody more than 49 employees, I can't afford it because I'm going to be forced to offer health care, so.


BARTIROMO: . from an economic standpoint, seriously, from an economic standpoint, this is one of the issues that managers sites as the reason that we're seeing economic growth of 1.2 percent, sir.

EMANUEL: Maria, that is a canard, a lot of studies have shown that it's not health care costs that determine how many employees you hire. And, look, I agree, the fact of the matter is we cannot be too vigilant on health care costs. We constantly have to do things to bring them down. And the fact is, Obamacare has actually allowed Medicare to do a lot of innovative things to keep health care costs under control, introducing new payment models to move away from fee for service. That is going to be the key method for keeping health care costs under control.

BARTIROMO: I'm getting tweets as you're speaking, and one is just coming in, public auction always the goal, force rates up, we cannot afford it. I pay $11,000 a year, with $15,000 deductible, fewer doctors in Florida take Obamacare. What do you say to that? How come fewer and fewer doctors are accepting Obamacare. I mean, look what happened with United Health, look what happened with this insurance company, Aetna, they are bowing out. They're losing a billion dollars on the plan.

EMANUEL: Well, first of all, when you go into a new market every business expects to lose some money at the start. That's the first point. The second point is that the business became a lot more uncertain because of Republicans in particular, Marco Rubio, eliminating some of the risk corridors and the protections for the insurance companies when they went into the new market. Those risk corridors, those protections are exactly the ones that George Bush put in under Part D, the drug benefit.

BARTIROMO: So, are you claiming the Republicans for the Affordable Care Act now, Zek?

EMANUEL: Not for the Affordable Care Act, but for taking away some of the protections that made it work better. Yes, it is the Republicans' fault for taking away those risk corridors.

BARTIROMO: That sounds very creative to me. That sounds very creative to me.

EMANUEL: No, it's just the fact.

BARTIROMO: It's not a fact. Look, we're speaking to businesses all the time, they're blaming the Affordable Care Act on the fact that they can't hire employees, they can't afford it, they're going bankrupt, you've seen all the major insurance companies say, I'm not going to be in the program anymore.

EMANUEL: First of all, that's not true, it's not all the major insurance company.


EMANUEL: . second of all.

BARTIROMO: . United Health and Humana, OK.

EMANUEL: Second of all, it's also is easy to blame Obamacare for business decisions they want to make. That is a very easy thing to do, because Obamacare, as you know, is not popular despite the fact that it's done so much good for the country. It's been bad P.R., but not bad on the substance. And it's easy for insurance companies to blame someone else than for their own business decisions.

BARTIROMO: So a new study finds the Affordable Care Act exchanges only offer one coverage option to 31 percent of the United States counties next year. Another 31 percent may only have two options. What are costs related to offsetting the lack of coverage with Obama's public option?

EMANUEL: Not sure I understand the question. But, Maria, when you talk about it in terms of counties, if you include rural counties that's actually is a much smaller number in terms of population. Most of the American public will have -- 80 percent of the public will have choices, and we do need to give people choices. That's very important, the president has been committed to that. That's one of the reasons to consider the public option if you don't have enough insurance companies in those markets.

BARTIROMO: Yeah. Well, look, I've got a lot of people writing on Twitter as you're talking, Wayne Perry, he is wrong, almost every business in America has a double-digit increase, why are we even talking about this, it is obvious, unbelievable costs have only gone up, the business decisions were known quantity. Let me ask you this, we know that if Donald Trump wins the election, he's going to repeal and replace. We know that Hillary Clinton is probably going to make changes as well. Even as she's talking about building on Obamacare, we've just hear what her husband said. What's the most important change that needs to be made to the Affordable Care Act?

EMANUEL: Well, we need to change in three areas, on the Medicaid side we need all the states to expand Medicaid to get all those people in. States that have expanded Medicaid, they're hospitals are doing better, their budgets are doing better. So we need the states to do that. On the exchanges, there are 3 or 4 major changes we need to have the risk corridors brought back for the insurance companies. We need to enforce the -- the penalties and modify the way that people come into the system. We need to increase the subsidies for people between 250 percent and 400 percent of the poverty line.