tv Maria Bartiromos Wall Street FOX Business August 11, 2018 3:00am-3:31am EDT
thanks so much for watching "strange inheritance," and remember -- you can't take it with you. from the fox studios in new york city, this is maria bartiromo's wall street. maria: happy weekend. welcome to the program that analyzes the week that was and positions you for the week ahead. thanks so much for joining us. coming up in a few moments, rogers capital ce oh and semi conductor founder t.j. rogers is my special guest. but first, we're in the fox business newsroom with the big headlines this week impacting everything from wall street to main street. >> hi. the trump administration putting pressure on turkey on friday. the president authorizing a doubling of tariffs on steel and aluminum from the nato ally. sending the turkish into a
downward spiral. and it's usually the president that drops big news via twitter but this week it was tesla's elon musk tweeting out, quote, i'm considering taking tesla private at $420, funding secured. u.s. regulators are looking into the tesla ceo's tweets, whether he us honest about s securing funding and why he chose to do it in twitter. disney, disappointing the streets but it reported strong results in its studio and parks unit. growing 20% year of year after the box office performances of marvels avengers. the third quarter earnings come as the entertainment giant is in the process of acquiring 21st century fox the dow, nasdaq and s&p closing mixed for the week chris collins charged with
insider trading and lying to agents on wednesday. he's accused of receiving inside information about a company sale drug test, information he passed on to his son who sold out 1.4 million in that company stock. back to you. maria: thanks so much. the consumer price index used as a measure of inflation up two tenths of a per september in july. meeting expectations. the report out on friday. looking ahead, another big week for the economy. retail sales, consumer sentiments, industrial production due out this week. each one of those an important gauge of the strength of the economy under president trump. we saw friday morning unexpected global events like currency crisis, a currency crisis in turkey can jult the u.s. markets as well. let me bring in chief economist and managing director at chase, anthony chan. give me your take on what's taking place on turkey. friday we had a lot of volatility because of the
turkish lira plunging. do you expect that to have an impact on other markets and the u.s.? >> well so far it's contained. but obviously if it gets out of control, then it could spill over through other emerging markets. but so far there are a lot of emerging markets doing quite well. we're seeing in fact the emerging markets in asia still doing quite well in general. we see some possibility that brazil is going to recover. so i don't think at this stage we can really complain or worry too much about it but certainly we hope the situation gets resolved soon. maria: how would you characterize the backdrop for investing. tell us what you see in terms of the big takeaways on the economy toe. >> well the big takeaways is the concern that you've mentioned is lowering ten-year yields to some extent, flattening the u curve a little bit. but corporate profits are come
in so strong. we're going to see 22% corporate profit growth for this year. consumers just came off a 4% growth rate. we're going to get retail sales as you mentioned next -- this coming week and retail sales are strong. car sales were a little weaker. but if you look at the component that tells you what's happening with consumer spending, i look for a robust 5% or 6% jump which is the number that directly feeds into consumer spending. so consumer spend in the third quarter is going to get a jump start with the retail sales numbers. and we're seeing the excitement with consumers. they're still pretty confident. i expect another pretty good number on consumer sentiment. that's already at high levels and industrial production. we saw that the manufacturing workweek and of course manufacturing employment doing very very well. so i look for industrial production to go up at least four tenths of a percent and
possibly more in the latest month. good numbers coming up this week. maria: we had a good gdp number, 4.1%. do you see that continuing ? what's your take on the overall grow growth? the president this week said he would see 5% economic growth in one of the upcoming quarters. are you buying it? >> well, i think that right now the numbers are going to be stronger than trend. i'm looking for the third quarter to give you a number that's 3% or maybe even a little better. we know that inventoriry subtracted in the second quarter by close to 1% and we know that with such robust consumer spending it's going to have to add at least 1% or more in the third quarter. that's a really good tai tailwid for the economy in the third quarter and consumers are pretty optimistic. i see no reason why we can't see another 3% or more growth rate in the third quarter. maria: would you put new money
to work in the stock market right here? you look at apple, a trillion dollar valuation. what's gone in terms of the technology being the leadership. knowing things will slow down. issues around social media. we're wondering about valuations. do you like this market? >> yes. we'll see bumps and corrections along the way. but when peek talk about peak earnings, 22% growth is here, we're looking at 7.5% to 8% growth next year for the corporate profit grot. maria: anthony, good to see you. thanks so much. don't 0 go nair, witdon't go na. elon musk telling everyone via twitter he's thinking about taking tesla private. but did he hit the gas too soon on this shocking news? >> tesla is not a mature enough company yet to be a public company. company. >> tj rogers weighs in next.
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tesla ceo elon musk putting out a tweet that he is considering taking tesla private. igniting a firestorm of speculation of how he can pull it out and legal questions on the accuracy of his claim that funding was secured. he said considering taking tesla private at $420 a share, funding secured. i spoke with the former chairman of the securities and exchange commission harvey pitt about this on mornings with maria. here's what he told me. >> the entire announcement was highly problematic and unprecedented. and it's important to realize it's not the medium but it's the message. going private transactions are usually announced in advance of the market opening or after the market closing.
they're not announced in the middle of the day. mr. musk tweeted in the middle of the day. in addition, it's not the ceo who announces this but it's the board. it's the company that makes this announcement. but here it was the ceo. what's more important is he stressed that he already had funding to pay $420 a share. but no ert efforts have yet been done to find out whether it's in the shareholders' best interest to take the company private and if so at what price. so all of this raises two fundamental questions. first, was he trying to artificially influence the price of the stock. if he was, that would be manipulation. second, does he really have the money in hand and is it a binding commitment that would give him almost $70 billion in what would be the largest going
private transaction in u.s. history. that would be fraud if those things were not true. maria: okay. so the sec needs to better understand what he was referring to when he said $420 and funding secured. where would that money come from? >> well it could come from either a co consortium of banksn investor. the company did receive a big cash infusion from saudi arabia the day that earnings were announced this past week. maria: joining me right now to react on that and a lot of other things, rodgers capital ceo, founder of cypress semi conductor, t.j. rodgers. cypress produced the chips that ran the control panel for the original model s tesla. your thaights on what took place in terms of tesla this past week.
>> well, i think tesla is not a mature enough company yet to be a public company. the prior guest, th indicated t. and i think going private might be good for them so they can get their company more mature before they're dealing with the public. maria: i mean taking a company private at $420 a share, where it is now, you're talking about $70 billion. we'll see if he has the funding. he said he has the funding. the board on friday said we haven't seen a plan. so this is sort of out there. and we know that "the wall street journal" did report that the securities and exchange commission is in fact looking into this. we'll keep watching that. t.j., i want to ask you broader commentary, get your broader commentary on where we are in terms of growth within technology. where do you see the growth? >> the internet of things is a big deal.
i currently have a company, a little company in san jose that we've dubbed their technology as the internet of plants. and that is we're hooking fields of plants up to the internet of things and then having the oit control the valves for their water. if you count how many plants or fields there are in the world, the internet of things is going to grow exponentially when things like that get added to it. it's a big deal. maria: china wants to own a lot of these entries, they want to own ai and block chain. we're in a dispute with china right now. what are you thoughts on the tariffs and the pushback that president trump has made against china? >> well, first of all, china is a great place to make stuff. they're efficient. their quality is picking up. so average american gets a better deal by being able to buy goods from china. having said that, they're
setting conditions for making and exporting things to us that are unfair and unreasonable. for example, if you have a technology and you want to sell it to china, you have to make it in china and you have to give your ip to the factory that makes it. okay. you have to give up your technology in order to sell to china. that's unreasonable, unfair and we're pushing back on that hard. and i think that's a good move. maria: yeah. because they've been stealing intellectual property for decades. we know that. they forced the transfer of technology to chinese companies from american companies as you noted. is cypress in china? tell me how you've dealt with this issue. >> you have to be very careful with your ip. you have to work with -- this is a company by company thing. it's not a country wide cabal. so you have to work with companies that have high integrity. you have to encrypt things. you have to have contracts that show you transferred ip.
you to have chinese patents. because of pressure they're starting to enforce pa patents. but you to do a lot of work in china to make sure you don't get ripped off. maria: so you think china blinks first on this in. >> i do. it's simple. our trade going to them is this big, their trade coming to us is that big. and basically if you cripple both arrows, the big arrow is going to get crippled more, more dollars and they're going to have to blink. you know, president trump said it's easy to win a trade war. we'll see. but that's the reason for it. the asymmetry of trade. maria: i want to take a short break and come back and ask you about other policies out of this administration and where you're seeing the growth in the environment right now. t.j. stay with us. we have a lot more to talk about with you after this short break. stay with us. more t.j. rodgers and wall street when we come back. the tech regulatory fight is
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candidate kennedy ran against nixon said the eisenhower administration which had a 92% marginal tax rate was harming the economy and kennedy cut taxes and we had a boom. and kennedy was an economic hero. ronald reagan came in and did the same thing, he cut taxes, the top bracket went to 28% which is a record. he got down to three brackets and then there was a boom that transcended reagan's presidency in the presidents following all the way through clinton. we now have a tax cut and for the third time in my life the economy is a booming. now the difference here is that reagan's first tax cut paid a lot for itself because the increased volume of the economy caused more transactions to be taxed at a lower rate. i'm very concerned about deficits. but right now i think getting the economy revved up is number one and we're going to have to take a hard look at deficits pretty quickly. maria: trillion dollar deficit
from here on out is something we're going to have to contend with. a lot of people feel its not due to the tax cuts but it's due to too much spending, t.j. >> it's too much spending. and the democrats and republicans are fighting and the compromise is we'll give you everything you want and we'll give them everything they want and they both want to take care of their constituents with the extra spending. so we're going to have to have some sort of measure that puts a lid on spending. in my lifetime i've never seen it. maria: do you worry about new regulations cutting into margins if are the technology sector? obviously these companies -- i'm talking specifically about social media right now. these companies have become bigger than anybody expected and much more influential. and nowier now you're seeing a censorship going on of certain conversations. a couple of weeks ago you could google gop in california and the search list that came out to describe the gop in california, one of the words was naziism.
there are owe things that are shadow banning that devin nunes and kevin mccarthy are talking about. they want to get the ceos in to testify. that's going to happen in september. what's your take in terms of the potential of more regulation, heavier hand of government on tech cutting into margins. >> first of all, you used the example of the social media. but in general the trump administration has been a windfall to the administrative nightmare of the obama administration. regulations are falling. it's getting easier to do business, cheaper to do business. maria: that's right. >> in every sector and that's part of the boom. now social media is kind of a different thing. we're in new ground and we're trying to ask ourselves what should we do. and there's some things that are happened, you know, russian influence on the election, shadow russian players inciting different constituencies in different ways.
to me there's one principle. whenever you get in a place like this you look back at the constitution. and the first amendment says congress shall make no law abridging the right of free speech. end of discussion. that you got to keep. that's what america is. the rest of it we're kind of groping around trying to figure out what to do. maria: i think that's a great point. but are social media companies right now cutting down free speech? you can say that but you're seeing an argument or pushback on the part of lawmakers that maybe there are situations where free speech is being impacted, not by them, though. >> this is where i think it's important to have -- a conservative court is not realle conservative to be follow the constitution as written, conservative court is a good thing here. in the future it may be somebody wants to communicate and he gets censored by facebook, whatever, that point in time somebody is
going to sue facebook for censorship and then we're going to have the court decide how the first amendment rules here. right now censoring is kind of a joke if you look at it. basically whatever zuckerberg thinks in the morning, he zaps this or that, you're looking at a lack of a rule of law in an area that's brand new. you expect that. it's not like they're doing anything wrong. but we can't have companies deciding who can say what. eventually that's got to get worked at. maria: i agree with that. great to see you. thanks so much. don't be a stranger. don't go anywhere. more "wall street" after this. you're headed down the highway when the guy in front slams on his brakes out of nowhere. you do, too, but not in time. hey, no big deal. you've got a good record and liberty mutual won't hold a grudge by raising your rates over one mistake. you hear that, karen?
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tuesday we get the nfib survey and import prices plus home depot will report earnings. that's an important market driver. home depot will influence others in the sector. on wednesday retail sales are out. that's a market mover. productivity and cost. and the nhbe survey. macy's reports quarterly results. cisco, the technology company is also a market mover. watch that one. thursday initial jobless claims, along with housing starts. big day for retail earnings, nordstrom, jc penny, walmart out on thursday. friday, consumer sentiment will be out as well as earnings from john deere. we're be watching all of the above certainly on "mornings with maria" this week. that will do it for us. thanks for joining me. see you on sunday morning fn "sunday morning futures." chairman of the intel committee devin nunes my guest.
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