MARIA-00
Fox poll: Clinton leads; Italy hit by two earthquakes; Tackling
Infrastructure; Hoodies Made In America - Part 2>
Hilsenrath, Wilbur Ross, Bayard Winthrop>
Products; American Giant>
Shocking images this morning out of Boston, a smoke-filled train putting passengers in a panic, highlighting the problems with (inaudible) crumbling infrastructure. We are talking about Donald Trump and Hillary Clinton's infrastructure plans this morning.
Plus Hollywood walk of shame, the details after a vandal destroyed Donald Trump's star on Hollywood Boulevard.
Major earnings out this morning including Twitter from job cuts to a possible sale of the company. The social media sites surrounded by rumors in recent weeks. We will break down what you need to watch for and the report. The stock this morning looking fractionally higher on the session.
Broader markets not so much. Futures indicating a lower -- look at what has happened in the last 10 minutes. Complete reversal here. It is all about earnings this morning. This week is the busiest week in terms of earnings so far. One-third of the S&P 500 will report.
As you see money has now reversed course and we are looking for a higher opening for the broader averages. Dow Industrials now is having a gain of 18 points at the open.
In Europe this morning, stocks trading near the flat line, as you see it there. Here too we saw a bit of a rally, we are looking at these averages off of the lows.
Some good news out of U.K. this morning. The economy grew at a faster rate than expected. The first GDP reading since the vote to leave the European Union was better than expected.
In Asia markets mostly lower. Disappointing economic data out of China weighed on markets there. Mostly lower although fractional moves.
The burger war is getting scary, the prank that one Burger King played on rival McDonalds just in time for Halloween. We will tell you about it.
The Cubs gets closer to ending the curse. They even the World Series last night, getting interesting here. It is time to rebuild America although Donald Trump and Hillary Clinton do not agree on most issues. They both believe America's crumbling infrastructure must be fixed.
Trump spoke about the infrastructure plan he has to a crowd in Charlotte, North Carolina. Watch.
(BEGIN VIDEO CLIP)
TRUMP: I will further empower cities and states to seek a federal disaster designation for blighted communities in order to initiate the rebuilding of vital infrastructure, the demolition of abandoned properties and the increase presence of law enforcement so we have safety in our community, we need that. We need that.
(END VIDEO CLIP)
BARTIROMO: Proving Trump's point regarding safety yesterday. During rush hour, dozens of commuters in Boston were forced to smash through windows to escape a smoke-filled subway train when the doors didn't open.
According to the Massachusetts Bay Transportation Authority, the smoke was from an overheated motor. The affected train was taken out of service immediately, but concerns remain over subways slow spending on repairs. Who will fix America's crumbling infrastructure, Trump or Clinton?
Joining us right now a first on Fox interview is W.L. Ross chairman -- and Company chairman and the Trump campaign economic adviser, Wilbur Ross. Wilbur, good to see you.
WILBUR ROSS, W.L.ROSS AND COMPANY: Good to see you, Maria.
BARTIROMO: Thank you so much for joining us. So what is Trump's plan regarding infrastructure. This is an issue that Dagen has brought up a lot because when you look at these plans, it's all about more spending?
ROSS: Well, it is about more spending. Infrastructure is spending, but the question is how do you finance it? Trump's plan is to do it in the private sector with tax credits for the equity.
So we are assuming that one sixth of the capital would have to be put up by equity, five to one leverage from private sector lenders to encourage that much equity coming in, we would give them an 82 percent tax credit.
This would have several consequences. One, it lowers the total amount that has to be financed because you don't need to finance the tax credit part.
Two, the equity part is the most expensive one to do so it has a double whammy. It probably reduces the cost of the project 18 percent to 20 percent and makes a lot of capital available.
We think over the next ten years that could generate a trillion dollars' worth of capital from this program.
BARTIROMO: It is a job creator, Dagen.
DAGEN MCDOWELL, FOX BUSINESS: But Wilbur, it's still government borrowing. It's still with government borrowing -- if the government is spending the money, who is doing the borrowing then? Who is the borrower?
ROSS: The borrower would be private sector by having put up large the 16.7 percent amount of equity and the way the tax credits would be repaid, infrastructures are very labor intensive activity, around 44 percent of the cost of infrastructure is labor.
Taxing that income at 28 percent gives you most of the money back from the tax credit. You get the rest of the money back out of the corporate profits from the contractor charging them the 15 percent from the Trump tax bill. So totally revenue neutral.
KEVIN KELLY, RECON CAPITAL PARTNERS CIO: Have you looked at the amount of jobs, we are talking about the labor pretty significant. Has there been indication of the amount of jobs created and what it would look like?
ROSS: It would be huge because each percentage point in GDP is around a million plus jobs, and if you did 180 billion would be exactly 1 percent of GDP, so that would be a million or so jobs. The important thing about it is since manufacturing has been in such a big decline, this is the kind of job that people with limited education could get and yet make a decent pay.
KATHERINE TIMPF, "NATIONAL REVIEW": On a very simple level, though, when you talk about spending, normally talking about cutting spending and when you hear about this kind of spending, conservative like me, the words like that are turned off and I'm sure a lot of people do --
ROSS: Well, listen more carefully because it's not --
TIMPF: I'm just talking about the way it sounds when you talk about it.
ROSS: But it's revenue neutral to the federal government.
BARTIROMO: This is important.
ROSS: Revenue neutral.
BARTIROMO: OK, so you do believe this is revenue neutral?
KELLY: How does it compare to her plan in comparison to her plan, though? So this is revenue neutral. It's going to employ a lot of people so in comparison to her plan --
BARTIROMO: She needs to raise taxes in order --
ROSS: Hillary's plan is to raise $275 billion more corporate tax, more business tax.
KELLY: Job killer.
ROSS: Job killer for sure and then of the 275, she wants government directly to lend 250. But guess who will be the borrowers under that administration.
MCDOWELL: Let me ask you this, though, we haven't raised national gas tax since mid-90's, but then more than 20 years, why aren't people using the road paying for their repair?
ROSS: Well, that's a whole different question.
MCDOWELL: Yes, that's a different question.
(CROSSTALK)
MCDOWELL: That's the reason Democrats won't raise it and Republicans aren't in favor of raising any taxes for the most part, but that's a central issue that the gas tax because we are getting more miles from the cars that we are driving on the road. It's a declining source of revenue in particular and we haven't raised it at all.
ROSS: But this is intended to take care of other kinds of infrastructure problems. You've got water systems that are failing. The $65 billion of gallon a day get through leaky water pipes. That's enough to take top 10 cities for a couple of weeks. You have safety problems with bridges, you've got all kinds of things that need to be financed.
BARTIROMO: So while he wants to spend or -- or have a revenue neutral plan on infrastructure build-up, he's also wanting to roll back regulations as part of his economic plan. So Donald Trump yesterday called for a 21st Century version of the 1933 Glass-Steagal law that required the separation of commercial and investment banking.
Talk to us about this because we all know what Dodd-Frank has done to the financial services sector and lending has become tougher. That's been one of the issues for this economy. Tell me about this 21st Century version of Glass-Steagall.
ROSS: Well, our feeling is that banks, it's isn't so that they are too big. It's that they're too complex.
BARTIROMO: Too connected.
ROSS: Too connected and too complex internally. When you think about what you have to know to run a big bank, you have to have every geography in the world, every kind of obscure, complicated product in the world in the derivative markets. That's an awful big menu for anybody to absorb.
We think it might be better for the banks to stick to lending instead of making more restrictions on lending, make it easier for them to make loans. Think about it. When you're suing banks everybody for the loans that they made before, it's not the way to encouraging them to make new loans. They are making banks gun shy.
BARTIROMO: Are you saying there should be more of a separation?
ROSS: I think the more important thing is sensible regulation rather than just regulation for the sake of regulation. When you think about it with all the fines of subprime lending, can you name a single person who has ever dispossessed from a house that didn't actually have a mortgage, wasn't delinquent on it and deserved to be foreclosed? There's one case that's been proven. It's punitive regulation. It's punitive law enforcement rather than anything very sensible.
BARTIROMO: Yes, and it's one of the reasons small businesses are all in for Donald Trump because they are getting killed by regulation. We know that. Wilbur, good to see you. Thank you so much. We will be watching the developments. Wilbur Ross there.
Coming up, Trump's star in the Hollywood Walk of Fame no longer shining after being vandalized, the brazen act caught on camera. We will tell you about it.
Plus a costume fit for a king, how one Burger King is using its Halloween spirit in fast-food feud with McDonalds. Back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. Earnings still driving the story. Plus deals, just a minute ago, we learned that QUALCOM is acquiring NXP, that's final and that has helped the markets as you can see there. QUALCOM announcing that it is going to buy NXP, a semiconductor company, for $110 a share. That's a total price tag of $47 billion. We will probably see money moving into the semiconductor space. They are calling this the semiconductor engine for the connected world.
And as a result, we are looking at markets trading higher this morning. A couple of the names on the move we are watching, keep an eye on the shares of Microsoft. The company unveiling its first ever desktop PC called the surface studio.
The device has 28-inch touch screen. It comes with the hefty price tag, it starts at $2,999. The surface studio expected to be ready in time for the holidays but limited quantity there.
Watching Groupon shares this morning, the deal site agreeing to acquire rival LivingSocial for an undisclosed amount. Investors were not impressed. Stock falling nearly 10 percent in after-hours trading last night.
It was also hit with the company earnings report. They reported another quarterly loss in the third quarter. Groupon shares are up nearly 70 percent year-to-date and it's only at $5.26 a share at this point looking lower this morning.
Police body cam video shows the initial encounter between police officers and the New Jersey-New York bombing suspect. Here is Cheryl with the details there.
CHERYL CASONE, FOX BUSINESS: Yes, Maria, this video shows an officer asking questions to Ahmad Rahimi in front of a bar in Lyndon, New Jersey before that shootout. Watch.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: What's your name? What's your last name? You got an ID on you or no?
UNIDENTIFIED MALE: No. No, ID.
UNIDENTIFIED MALE: Where do you live?
UNIDENTIFIED MALE: I'm homeless.
(END VIDEO CLIP)
CASONE: Then the shootout ensued. Rahimi is charged with five counts of attempted murder of a police officer for the shootout during his capture. He's also accused of detonating a bomb in Manhattan and that bomb injured more than 30 people.
Plus, there's this, you hear it, you're watching it. It's Donald Trump's star on the Hollywood Walk of Fame being destroyed by a pick ax. A man dressed as a construction worker demolished Trump's star in hopes of auctioning off the broken pieces to raise money for the women accusing Trump of sexual assault.
Hollywood Chamber of Commerce has started repairs on the star, that's already begun. This is the second time this year. The star has been defaced. Trump was inducted into the walk of fame back in 2007 in honor of its hosting gig on "The Apprentice."
There's news about autonomous cars to tell you about this is morning. Google parent, Alphabet, is turning itself-driving car project from its Research Lab X into a standalone business.
The "Wall Street Journal" says this marks a major step in the vehicles pass to commercial operations. The head of the research lab says the car group will likely be expected to start generating revenue pretty soon but not necessarily a profit in the early going.
Kevin, you said you look pranks, you like them, right? Burger King here in New York took advantage of Halloween to pull a prank on another McDonalds. The entire restaurants in Queens is covered by a sheet like a ghost that has the word, "McDonald's" spray painted on it.
On top of that there is a sign that says, quote, "Just kidding, we still flame grill our burgers." Of course, McDonalds fries their hamburgers, a little, you know, McDonald's and Burger King rivalry happened just here in New York. Back to you.
BARTIROMO: Is that a good prank for you?
KELLY: It is, but where the real money is going is shake shack delicious.
BARTIROMO: I know. Coming up, investing in Americans by manufacturing hoodies, well, how Americans giants live up to that name. Back in a minute. Stay with us.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. Disrupting the hoody one stitch at a time, that's American Giant. It manufacturers all of its sweatshirts and goods in the United States with cotton sourced from the Carolinas.
I want to bring in Bayard Winthrop, he is the founder and CEO of American Giant. It's great to have you on the program. Thank you so much. So you have a Wall Street background. Tell us about the company? What prompted you to enter the apparel industry with this company?
BAYARD WINTHROP, AMERICAN GIANT FOUNDER AND CEO: I left finance a long time ago and felt that there was a an opportunity to do a great business again that was making great product and priced fairly and so we started 5 years ago.
BARTIROMO: How do you do that? I mean, I think a lot of American companies would like to be able to do everything in America, but the fact is you have high labor costs in the U.S., higher than Mexico, for example. It makes it more attractive to manufacture in places like China or Mexico. So tell us how do you do it and actually making money on it?
WINTHROP: Two things, one, greatest country in the world, right?
BARTIROMO: Yes.
WINTHROP: Backed on innovation, spirit of can do. A commitment to something and then believing that you can find a way and doing it. The other thing is that e-commerce has unlocked a lot of things from a cost stack standpoint. I think when you look at e-commerce in new ways and build a new business that way, it makes the American manufacturing component more competitive than you think.
BARTIROMO: Wow. So technology has really enabled this.
WINTHROP: In a big way, both on the front end of the business and on the manufacturing side. Both has been a big factor for us.
BARTIROMO: Do you think that's why you are as successful as you are and have this incredible following? People wanting things that are made in the USA.
WINTHROP: I think it was partly that. I also think that we've tried to kind of reclaim a lot of the great American things, which are great quality and great value together. Plus, you know, timing and all the other things. But I think when you put a great product in the market and price it fairly, people respond to that.
BARTIROMO: Well, I want to know why it's the best hoodie ever, but I'll get to that question. You source the cotton in the southeast?
WINTHROP: Primarily southeast in the belter region and then the rest of the supply comes predominantly through the Carolinas.
BARTIROMO: So how does that impact the suppliers?
WINTHROP: It's been great for the suppliers obviously, from the cotton growers, to the ginners and the yarners, all the way through the chains. It's been great for us too because it allows us to stay really close to our supply chain.
BARTIROMO: Look, we talk a lot about manufacturing -- and jobs and manufacturing, federal regulators fall proportionally on manufacturers, right, especially small manufacturers with 12 days before the election, do you have a feeling on which candidate would be better for manufacturing jobs?
WINTHROP: I don't really other than to say I think that Washington in general needs to get out of the way of smaller businesses and allow innovation to thrive. I wish both candidates were a little bit more in tune with the reality of what's happening in the manufacturing sector on the ground than just the narrative of Trump's ties or the challenge that U.S. manufacturers are facing.
BARTIROMO: Talk to us about that. The fact that small business is getting killed by things like Obamacare and all these regulations, Dodd-Frank making lending environment harder. You're feeling this every day?
WINTHROP: Yes, we've got 300 or so sewers in the Carolinas that work directly with American Giant and I think that we are conscious of that and really wishing that we were in a regulatory environment that was more concerned about liberating the small business sector than it was about figuring ways to regulate it. So it's an active conversation inside American Giant.
BARTIROMO: All right, we all want to know why is this the best hoodie ever?
WINTHROP: It's the ingredients, Maria, right. I think you put in great fabrics, great (inaudible), great stitch and you price it fairly and I think people respond to that. It's not that complicated. We try to do things really, really well and keep it simple and keep it in the U.S.
BARTIROMO: And it's really comfortable. Bayard, good to see you. Thank you so much for joining us. Bayard Winthrop there.
Coming up, we are moments away from Ford's earnings report. We will to the CEO of Ford. Mark Fields is with me in the next hour of MORNINGS WITH MARIA. We are going to sense manufacturing in the U.S. versus Mexico from our field as well. Back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Good Thursday morning, everybody. Welcome back. I'm Maria Bartiromo. It is Thursday, October 27th. Your top stories right now at 7 a.m. on the east coast.
The presidential nominee is moving on in the swing state push. Donald Trump headed to the buckeye state while Hillary Clinton is focused on North Carolina. This as brand new Fox News polls out this morning show Clinton's lead has been cut down to now just three points.
(BEGIN VIDEO CLIP)
CLINTON: Listening to Donald Trump's campaign, I truly doubt that he has ever read the Constitution or if he did back in school, he certainly doesn't remember it and he doesn't understand.
TRUMP: She makes a speech for 15 minutes. She goes home, goes to bed. Honestly, she has less --
END
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(Show: MORNINGS WITH MARIA) (Date: October 27, 2016) (Time: 07:00:00) (Tran: 102702cb.231) (Type: SHOW) (Head: Ford Tops Estimates; Bonus Repayments Halted; Twitter Q3 Earnings Released; $4 Billion IPO Plan for Snapchat; Race Tightens; Twitter Tops Estimates; Moore: Why Trump Will Win; Trump And Blue-Collar Voters; World Series Game 2) (Sect: News; Domestic)
(Byline: Maria Bartiromo, Dagen McDowell, Katherine Timpf, Jared Max )
(Guest: Kevin Kelly, Mark Fields, David Kemper, Mitch Roschelle )
(Spec: Automotive Industry; Business; Military; Technology; Internet; Politics; Labor; Elections; Polls; IOP; Stock Markets; Donald Trump; Sports; Economy)
(BEGIN VIDEO CLIP)
HILLARY CLINTON (D), PRESIDENTIAL NOMINEE: Listening to Donald Trump's campaign I truly doubt that he has ever read the constitution. Or if he did back in school he certainly doesn't remember it and he doesn't understand.
DONALD TRUMP (R), PRESIDENTIAL NOMINEE: She makes a speech for 15 minutes. She goes home and goes to bed. Honestly, she has less energy than Jeb Bush.
(END VIDEO CLIP)
MARIA BARTIROMO, FBN: Plus, a Michael Moore video goes viral. How this new anti-Trump documentary is actually rallying Trump supporters. It looks like it is for Trump.
The Defense Department finally taking action over making soldiers pay back reenlistment bonuses. But what will be done with the millions already returned? We will tell you -- coming up.
And Twitter set to report earnings momentarily. Investors are waiting for an update on the cost-cutting plan. What happens if there is in fact no bidder and take over of this company? Right now the stock is looking higher.
And the deal of the day on Wall Street -- Qualcomm acquires NXP Semiconductors in a deal that values NXP at $47 billion. NXP shares up better than 2 percent on the news right now. We will likely see that part of the market, semiconductor companies, trade up.
Broader markets looking like this. We have some volatility earlier but now we're at the highs of the morning. The Dow Jones Industrial Average expected to open up about 25 points today. Nasdaq, S&P 500 also in positive territory.
In Europe, stocks are trading very much near the flat line, not too far from where they ended yesterday. Some good news out of the U.K. -- the economy grew at a faster rate than expected. You have the first GDP reading there since the vote to exit the European Union. And it was better than expected; nonetheless, the market there, fractionally lower this morning.
In Asia, markets mostly lower. Disappointing economic data overnight out of China -- that weighed on markets. The Shanghai Composite in China down a fraction.
Arby's expanding beyond roast beef -- the chain now rolling out a venison sandwich. We will tell you where you can find that and bring you the details.
All those stories coming up this morning. And joining me to talk about it: Fox Business Network's Dagen McDowell; Recon Capital chief investment officer Kevin Kelly; and National Review reporter and Fox News contributor Kat Timpf.
DAGEN MCDOWELL, FBN HOST: Those American giant sweatshirts -- I'm an owner.
BARTIROMO: You love it.
MCDOWELL: A proud owner. They are exquisitely made sweatshirts and they rock my world.
BARTIROMO: Wow.
KATHERINE TIMPF, FOX NEWS CONTRIBUTOR: Originally made --
MCDOWELL: They're just -- it's just so great -- it's just one of those things you buy -- you're like, man, that's a great sweatshirt.
KEVIN KELLY, RECON CAPITAL, CIO: I don't know. I mean he could've brought some for us to wear. I could use one.
MCDOWELL: Maybe you need to go buy one.
KELLY: OK.
BARTIROMO: You made the right point. A hoody company and --
(CROSSTALK)
KELLY: -- I thought he would be rocking it out.
We have breaking news on Ford just coming out in the tape, you guys. Ford Motors reporting on earnings moments ago. The auto maker reported revenue of $33.3 billion with an adjusted earnings of 26 cents a share -- that was above expectations.
Joining me right now is Ford CEO Mark Fields in a "First on Fox Business Interview". Mark -- good to see you. Thank you so much for joining us.
MARK FIELDS, FORD MOTORS CEO: Good to see you.
BARTIROMO: Can you characterize the quarter for us. What were the highlights?
FIELDS: Well, the highlights for the quarter, we earned pre-tax of $1.4 billion. It was down from last year but it was as expected. In North America we had some unique items. We were launching our super duty. We had a large recall that we announced during the quarter on a door latch. And we had some F-150 stock changes because of the launch that we had the previous year.
But importantly we had improved -- significantly improve the earnings in Europe, record earnings in Asia Pacific and another strong quarter from our Ford credit operations.
BARTIROMO: Yes. Let me ask you about some of the items in the quarter. I want to ask you about credit. But first the production because we know that you have already announced trimming production in North America. I made a concern about cooling demand. What can you tell us in terms of demand out there and where the production stands, particularly with the Ford F-150?
FIELDS: Well, when you look at the overall market. The overall market -- car industry market still is relatively strong. But we are seeing some weakness in the retail end of the market. We did take some production adjustments during the quarter and that's very consistent with our strategy of matching production to demand.
And in terms of our F series, our F series demand is still very strong. We saw a number of our competitors get very aggressive during the quarter in terms of incentives. But our share in that segment is actually up year- over-year and we spend the least of all the major automakers in terms of incentives. So that brand and those sales are quite strong on our F series.
BARTIROMO: And you were among the first quarters ago -- several quarters ago to talk to the market about how things were looking weaker to you. Have things changed on terms of the broad demand story out there -- Mark? Can you go through the U.S., Europe -- what you're seeing throughout the world in terms of how it feels to you?
FIELDS: Well, it hasn't changed much since what we signaled in our second quarter earnings goal. In the U.S. here, again, the labor market still is growing. The economic fundamentals are still healthy.
The overall auto industry sales level is healthy but what we are seeing is retail softening. We're seeing a tougher pricing environment. But overall we're taking -- matching our strategy. We're matching production to demand and make sure our inventories don't grow.
In Europe, we're continuing to see moderate growth across the continent there. In the U.K. we've actually seen the industry not be too impacted by Brexit; but ourselves as well as others have started to price based on the weakness of the sterling and that will impact the market going forward.