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tv   Maria Bartiromos Wall Street  FOX Business  December 15, 2018 9:00am-9:31am EST

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and check out our website at i'm bob massi. i'll see you next week. [ woman vocalizing ] >> 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 helps position you for the week ahead. i'm maria bartiromo, thanks for joining us. coming up, i'll be speaking with the chairman and ceo of motorola solutions. greg brown is my special guest this weekend to talk china. but first, deirdre bolton is standing by in the fox business newsroom with all the big headlines. door deere thanks, maria. it was another rocky week for markets, volatility reigned supreme. in the end, all three markets finished in the red, down for the second straight weeks. two major factors in the markets this week, there is mixed news
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on the trade tensions between the u.s. and china. on the plus side, can china said it will halt its 25% tariff on cars starting on january 1st. separately, on friday, chinese economic data came in weaker than expected. the other factor adding sol felt to the markets, brexit. on tuesday u.k. prime minister theresa may scrapped parliament's brexit vote when it became clear it wouldn't pass. conservatives held a vote of no confidence, which may survived. officials say they will not renegotiate any of the terms. also this week uber and list made it official they plan -- lyft, they plan to go public, plan to list in 2019. uber's valuation could be close to $120 billion. maria, back to you. maria: thank you, deirdre. and as you just said, it was another big week of swings on wall street where volatility continues to move markets in all directions. what is fueling this movement,
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and how do investors make sense of it all as interest rates continue to move? blackrock's global chief investment officer of fixed income joins me now, rick reider. it is great to see you. thanks so much for joining us. and i've got to say, a great call. you said the federal reserve's not going to be able to raise interest rates as much as people think and that you want to be buying the front end. all of that has come true. the fed has signaled now that it's just going to watch the data. three rate hikes is not cooked into the books. we are expecting a rate hike, though, next week. what are the chances? >> i think it's high, unless for whatever reason markets really come off in the next couple of days. e think they'd like to go in december. but then i think it's a whole new ball game. then i think they're going to say we're data-sent trick, and i think it's going to be similar metic. maybe they get another hike in next year. but listen, the data's slowing. more than anything else, inflation is not increasing. in fact, it's coming off of it. listen, people say, my god,
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there's so many jobs we're through full employment. what's the difference? is put more people to work. i don't think you need to go much further. maria: is the market just trying to digest a new era of, you know, growth slowing down? what's going on with rates and jobs? >> yeah. so i think a lot of it is, you know, we've been in some pretty significant growth, and now it's coming off. and, you know, one of the things people have to worry about is the global growth. outside the u.s. it is slowing significantly. that is one, the uncertainty around trade and and what it means for inflation, that is significant. and three, you have the dynamic of all the other risks in the world, in geopolitics, etc. , and that's creating some risk in the system. i think the fed, i think we're going to lift one of the very big ones when we see the fed is not going to be that aggressive going forward. listen, i think into the new year people are going to look at, gosh, i can start to put some money to work again, the
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economy's going to be fine, and think you'll stabilize. maria: you know, the federal reserve may back off raising rates too many times because the economy is slowing. so how much of a worry is that to you that we saw 4.2% economic growth in the second quarter, 3.5 in the third quarter, and what are we talking about for the fourth quarter? alan green stan told me this week -- greenspan told me 2, 2.5%. does it worry you that people are talking about a recession in 2020? >> i think they're wrong. when you take the demographic we're operating in today, it's not like the '80 and '90s, we had this booming demographic, and you you could grow at much higher rates. if we grow in the low 2s, it's fine. by the way, you look at retail sales numbers, they came out pretty good. manufacturing data, pretty good. unemployment, i think we're going to hit 3%. and by the way, i don't think we're going to hit it and it's going to move up, it's going to be -- i don't think there's enough workers for the jobs in
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this country. pretty powerful stuff. people say we're going to be in a recession, there's so many influences that suggest that's not right for at least '19 and maybe into '20. martha: the last time you talked about putting money in the two-year, the three-year, is that still where you want to be? you're getting 3%. >> in a world where there's a lot of uncertainty, you know, 3 and i'll worry about it in a few months doesn't hurt. but i, for the first time in a while, now you have a fed that's not on autopilot, can i buy some longer-term interest rates, particularly if i own equities or other assets. you know, ten-year interest rates sitting around 3% with a fed that's not moving with inflation, you know, i think inflation is moving down. you're going to see headline inflation, look what's happened to oil prices and gasolineful we're going to see inflation at probably close to 1.5% down from 2. boy, if i have longer term interest rates, i'm not that
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worried about them. i like shifting a bit more into longer term interest rates, municipals work pretty well. you don't have to just sit in the two-year anymore. i think it's a different environment. by the way, given valuations now in equities, i still think having some exposure to equities makes sense. and the last thing i would say is now because you could buy other interest rates, they actually help you as a hedge against your equity holdings. that's a really big deal because you didn't have that in '18 or '17. maria: is the stock market overreacting? i mean, the wild swings have been -- >> i think the volatility, i mean, the one thing that people, it's hard to see underneath the surface. the liquidity in the world, when the fed drains liquidity and the treasury issues so much debt, you drain liquidity from the debt. what happens is volatility goes up, and then you have players that have to get out of assets. you're seeing a big, big deal relative to that today. it's one of those things that
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happens underneath the surface that professionally you see liquidity being drained, and people have to sell assets, and you see outflows in terms of financial assets, and that's a big deal. i think the markets are overreacting, like you say, but it's because the liquidity is lower. maria: rick reider, blackrock ceo of fixed income. stay with us, more "wall street" right after this. >> motorola was one of the very first companies to go into china, so just how worried is the communications giant about our current trade war? our current trade war? ceo greg brown once i started looking for it was a no-brainer. i switched to geico and saved hundreds. that's a win. but it's not the only reason i switched. the geico app makes it easy to manage my policy. i can pay my bill, add a new driver, or even file a claim. woo, hey now! that's a win-win.
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♪ ♪ maria: welcome back. now this special interview. over the past decade, greg brown has helped to transform motorola solutions into a worldwide leader for providing telecom commitment for public safety, government and commercial enterprises. motorola solutions currently serves more than 100,000 public
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safety and commercial customers, it is in more than 100 countries. total shareholder returns, get this, eclipsed 300%. greg brown joins us this weekend as our special guest and, greg, congratulations. >> thanks, maria. great to be here. maria: it is great to see you again. as interesting as all that is, and i want to talk about the financial performance of this country because i know you've had eight straight corners of organic growth, let's talk about china, because your story in china is so interesting. and it's been a week of trying to understand where the u.s. is with the china relationship. you were one of the first companies, certainly, in china back in the day. tell me about that. >> we were. historically, you can go back to 1972 when president nixon first arrived in china. he spoke on a motorola-provided satellite phone following the kissinger talks. you fast forward, and in 1986 bob galvin led a delegation there, and in '87 motorola invested and had a manufacturing and r&d footprint.
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now, for years china was great, and the motorola story was great, and revenue boomed, investment boomed, collaboration boomed. but then china joins the wto, things pivot a little bit. the chinese market matures. they move toward -- they, china -- indigenous standards. so they had, at the time, there were cellular standards called cdma, tdma that went to gsm -- maria: yeah, i remember that. >> china had their own. we in the united states had wi-fi. they had their own. and in policing china implemented an indigenous standard called pdt, police digital trunking, that in essence said, motorola, if you want to play here, you have to offer up the ipr associated with that, and china became less and less attractive. now, we had a lot of firsts historically. first mobile phone with chinese
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characters, first mobile phone with global positioning with gps. at the time motorola built the largest contiguous cellular network in china. all that's great. maria: yeah. but then after the wto, they said you've got to transfer your technology -- >> that's right. maria: -- to a chinese competitor which, ultimately, will come back and have those products to compete with you, and they're stealing ip. and you know for a fact that they stole ip for you. >> we do. maria: through washington way. >> -- huawei. >> historically, we had litigation with huawei, that was settled. we sued them in 2010. that was settled in '11. but as we sit hered to the, we have a lawsuit ongoing right now with a chinese company. they've done three things; patent infringement, trade secret misappropriation and copyright infringement. pretty egregious, vast multi-year campaignful we've
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sued them in the northern district court of illinois, germany -- where we won boast cases, by the way -- australia, pending. and most importantly, in the itc where we just won a final determination that, in fact, the company took ipr and infringed our patents. manufacture more wow. >> so we are awaiting the implementation of an import ban in january. maria: look, i think that china has been very clear in terms of wanting to be number one in a.i.. in their 2025 program, they want to be number one in a.i., number one in block chain technology. the u.s. wants to be number one as well. and so the stakes have gotten higher. you just mentioned all of these products and sort of the programs that were used. now we're into 5g. as everybody marches toward 5g, they have gotten more competitive, and they want to win. >> they do. well, and you've seen recently
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australia say they're concerned about huawei 5g gear. new zealand has made that determination. and britain, the u.k. just announced a few days ago that way about want to pull out huawg out of their core. i get the high stakes and the two juggernauts competing. we are all for, all for competition. robust, let the customer win, everybody brings their best game to the party. but when it's not a level playing $3 billion in revenue and 15,000 people. today we're about $170 million of revenue and 170 people. maria: wow. >> so what we are is the western leader and alternative in
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mission-critical communications, command center software, video surveillance and analytics. so in the u.k. we have 350,000 users for that mission-critical system for all of the u.k. that motorola runs and operates. we did it through an acquisition. we did another acquisition very similar in form in chile. maria: i want to ask you about the acquisitions and about the growth, because you just put out stunning numbers in terms of the number of employees 15 years ago and the number of employees today, the amount of revenue. let's take a short break. when we come back, we've got more with motorola solutions chairman and ceo greg brown. we're going to talk about growth and the company in particular. stay with us. >> market volatility has investors rattled and fearful a slowdown is coming. motorola solutions' ceo greg brown isn't buying it. he tells maria why
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♪ ♪ maria: and we are back with motorola solutions chairman and ceo greg brown. greg, we were talking about china. your main customers are the u.s. government and fortune 500 companies, yes? >> yes. maria: there's this narrative that we're going to see a growth slowdown in the coming two or three years. are you seeing that based on your book going forward? >> we're not. we are not seeing any slowdown at this point. we're about 75% government public safety, 25% fortune 500. if you with unpack the commercial customers or the enterprise customers further, where we shine and emphasize is in the critical infrastructure. oil, gas, utilities, power grid. that need the industrial secure encrypted systems that we sell
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whether it's communications or video. and we do not see a slowdown, maria. maria: has anything changed given the dropoff in the price of oil? i don't know if oil is an indicator or telling us the global economy is slowing or if it's just about oversupply. i know you're so much in the energy business, so i'm just wondering. >> so we haven't seen it at this point. where i think it may impact is potentially in the middle east, because it is, in my view, the price of oil per barrel declines some of those middle east countries may think differently about investment. but again, we kind of bubble to the top because we are a need-to-have, not a nice-to-have. so in the middle east whether it's border security, counterterrorism, secure modernized communications, up-to-date, secure video surveillance, even though oil may impact procurement in some countries, i don't think it's going to affect us. maria: as the president tries to get this $5 billion for his
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border wall funding, a lot of people are saying, well, you know, maybe we need more stuff like that, surveillance, more technology around the border. and maybe a wall too, but if we could up the investment there. are you seeing that? is that what you're getting from government? >> yes. and so i don't think the debate of the wall versus the non-wall -- maria: we need it all. >> it's more metaphorical. do i think we collectively need additional border security? absolutely. so do a number of other countries. to your point, maria, i think there's a variety of technologies that could be used to do that. video surveillance being one, the deployment of drones being two, up-to-date geofencing, mission-critical communications. there's a lot of technology alternatives that can supplement a physical wall. i think we need to get to comprehensive immigration reform. but as a fundamental requirement to that is additional border security. maria: you have been able to create this niche in this business of land radio and
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security that you have been able to create and become the leader in. how have you done it? you've had eight straight quarters of strong growth, of organic growth -- >> right. maria: -- and you've done it through acquisitions as well. give us your plan to keep this growth number up for the next couple years. >> the beautiful thing is we're in an ideal spot both from state and local public safety and commercial customers. the u.s. federal market as well as international emea-centric kind of countries. they want mission-critical communications, they need it. maria: of course. >> while we're doing well into growing organically -- and i growing organically, we're a very small part of the addressable market. the in video surveillance and analytics -- by the way, without china. maria: safe point. >> against an addressable market of 12 billion and growing. half of our employees are new in the last three years --
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maria: yeah, i thought that was really interesting. >> we've invested in organic research and development, continually refreshing the patent portfolio, driving organic innovation but also surgically looking for acquisitions that can supplement and strengthen our strategy. maria: where are the acquisition potentials? are there areas in the business that you'd like to create more scale? >> sure. i think video is one opportunity for. that we've invested a series of acquisitions in command center software. i think we're set for that right now. we have the pieces. now it's about integration, creating a compelling suite, thinking about the user experience to make it compelling. and i think services is another opportunity. we acquired airwave in the u.k. we acquired interexport in chile. so think services and software and video, and i think that there's some nice opportunities that will avail -- maria: and there's an appetite for business managers to put new money to work in these kinds of
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services, you think? >> absolutely. maria: when you look at drones and you look at security, this is basically topic a in the c suite, isn't it? >> exactly. so everybody whether -- no matter where you are, you're thinking additional security. it could be physical, it could be virtual, it could be video, it can be cyber. and the assortment of solutions that we bring to the table always has us at the table for a conversation. maria: and allocation of capital, are you going to keep buying back stock? you had a great buyback, what, at $58? >> yeah. so we over the last several years spent $12.5 billion for an average price of 58 and change, i'm very proud of that. maria: look where the stock is right now. >> we spent over $3 billion acquiring. i think the company's positioned well for durable earnings and cash flow. that cash flow, we're not cap-ex intensive, so a lot of that cash flow will be available to either return to the shareholder, invest in the core or continue acquisitions. maria: what a great story. greg, it's good to see you.
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>> thank you. maria: greg brown, chairman and ceo of motorola solutions. great story there. don't go anywhere, more "wall street" right after this. ♪ ♪ when my hot water heater failed, she was pregnant, in-laws were coming, a little bit of water, it really- it rocked our world. i had no idea the amount of damage that water could do. we called usaa. and they greeted me as they always do. sergeant baker, how are you? they were on it. it was unbelievable. having insurance is something everyone needs, but having usaa- now that's a privilege. we're the baker's and we're usaa members for life. usaa. get your insurance quote today. whoa!
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maria." do join us every day during the week. be sure to follow this program on facebook, on twitter, on instagram, get the latest videos and pictures from the show and, please, tell us what you want to hear and see on this program. have a great weekend, eveveveve. thanks so much for watching. elle see you again -- i'll see you again next time. ♪ >> hello, and welcome to "wall street journal" at large with me, gerry baker. this week we're going to take a deeper look at the astronaut of the u.s. economy. -- at the state of the u.s. economy. next year the current expansion, which began after the global financial crisis in 2009, will be ten years old. that will make it one of the longest periods of sustained growth in u.s. history. expansions don't die of old age, but after such a long period of growth, strains typically do start to show. in the last few weeks, financial


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