tv Maria Bartiromos Wall Street FOX Business July 27, 2019 9:00am-9:31am EDT
"strange inheritance." thanks so much for watching. and remember -- you can't take it with you. great weekend. you can catch me every week night that 5 pm eastern hosting my own show, it is called "bulls and bears". we have a lot of fun, tune in right here on fox business. 5 pm eastern time every weekday. have a great weekend everybody! maria bartiromo wall street week begins right now. maria: happy weekend everybody welcome to the program that analyzes the week that was. and helps position you for the week ahead i maria bartiromo. a big week coming up and coming up in a few moments at ups ceo david abney is my special guest this weekend.we talk about his business and what it means about the economy and and vesting. at first the u.s. economy is slowed slightly in the second quarter.we have the gdp out
on friday the economy grew 2.1 percent. it still beat expectations as higher consumer spending offset a decline in business investments. the gdp did so from a 3.1 percent gain in the first three months of the year however. and we did see an impasse on markets. during our talk about that is the ceo of thornburg investment management, jason brady with $44 billion in assets under management. great to have you. >> it is great to be here. maria: let me get your take on the second quarter. this is the advanced number and meaning we will get two or three more revisions but still 2.1 percent was lower than the first quarter. >> it was but i still think it is above the potential growth rate as we have an older population is productivity has been really challenged it's a pretty good number so we get revisions but it is solid.
maria: a solid number. right before the federal reserve meets and we are going to expect to see a rate cut this upcoming week. the fed is meeting on the 30th and 31st. and what is it, 90 percent chance according to the fed funds futures that will see a 25 basis point cut is that what you're looking for? >> yes i think a signal that before the quiet. they were all hands on deck it will be 25, some folks have expected 50 there was some discussion from williams, about this is a hypothetical situation but they pulled it back, 25 is what we should get. maria: john williams says it's better to get front of a disaster. let's make it big and significant. they did walk that back. does the economy need it? here we'll talk about 3.1 percent growth in the first quarter. 2.1 percent growth in the second quarter.now with the numbers and it would cut interest rates. >> right, the reason for that i think or what the rationale is, inflation is low and so let's make sure we can get ahead any potential challenge. the slowing of business investment. also out of the release was 1.8 percent core pc that's of the fed looks at for inflation. below the two percent target but not much below and it's only been rising.
i think the real question is what is 25 business points going to do for me, the economy does not need more credit creation. the fed is pushing here. maria: a lot of comments about what this means. does the fed no more than we do? you know are things about to collapse? but then there's another stream of thought that's basically the fed has to keep up with the international central banks. you have europe stimulating asian, central banks to britain because of the effect on the dollar the fed has to keep pace with the other international central banks, do by that? >> i think certainly the dollars being affected. a lot of folks look for a weaker dollar it's been stronger. as we see the fed in relation to the bank is not true strikes at the fed really does not need to be pushed around by international markets per year really the u.s. is leading, that's where a lot of growth in the globe is. maria: you are right!
>> i'm sure that's in the thinking and the slowing in europe for example israel. but i'm not sure is really the biggest input for them. maria: do you invest in europe? let's talk europe for a second. we had rick reeder on he said do not underestimate christine taking over at the ecb because she's a politician not economist patient no wiggle room. she will not be able to cut interest rates so what will she do? she will by european equities. would you by european equities? >> i would as an investor. evaluation is pretty good. if you look over the last several years, pretty long time period europe is gone pretty much nowhere as the u.s. has gone up. maria: the economy cannot grow there. >> the economy has been challenging for you look at global corporations based there, shell is a great example.you know in international oil companies a good valuation. but should the central bank by stocks is a different question. we are buying them because
there are a great valuation. federal banks by things not for an economic outcome they are not buying bombs to make money thereby two affect the economy. that is the playbook and would caution folks to look at how did it work out in japan? are we really able to create growth in that way? these unconventional tools are distorting markets and it's making it harder place to navigate. maria: how do you want to allocate capitol then? next we have the federal reserve. the other thing next week is the global pmi. purchasing managers index. that is where he first figured out where there is weakening any economy. manufacturing. we see more week manufacturing data?and what does it mean allocating capitol? >> sure, i think it's i think to look up. what we've seen here is some diversion in the regional surveys. he saw some do pretty well but other continues to slow. looking at europe, some of the early numbers coming in there are terrible, germany in particular. as we get those rolling through
it's a forward look. i think what we'll see is continued slowing. it's all hands on deck on stimulus so how do navigate that i think just look at earnings, look at the fundamentals, focus on that. i do not know that we will get recession but unitary can handle more volatility. maria: thank you for being here. jason brady, ceo of thornburg. stay with us, the ups ceo will join you when we return. stay with us. -and...that's your basic three-point turn. -[ scoffs ] if you say so. ♪ -i'm sorry?
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demand for next day deliver driving ups second quarter earnings the companies largest shipping company putting a b for earnings. gentlemen of the chairman and ceo of ups, david abney. great to have you this weekend. >> glad to be here. maria: thank you for joining us. i know you also launched a seven day delivery, these are really important things for the customer and it really resonated. >> we have some very exciting announcements for sure. as far as the quarter, ups is 112 years old. for the most profitable quarter we've have ever had was this quarter. it is big news, no doubt about it. our international and supply chain had the best second quarter but what's important is the u.s. operation. we had positive operating
leverage where we grew revenue faster than we grew -- a really got the attention of the market. just as importantly, we talked about the rest of the year and we felt very confident, reaffirmed our guidance and things are going well but sunday deliver that you mentioned, is something our consumers absolutely want to see. especially the younger generation. they don't treat sunday any different than monday through friday and so we have had to adjust as a company and were implementing this no later than january 1 of this year. we're going to utilize our own operations.will utilize these access points that involve cvs and advanced automotive and michael's. we are also going to extend our sure post-offering which is with usps and will collaborate
with them for sunday delivery too. we are very excited what we can offer our customer. maria: congratulations. i want to ask about the access point because i think that's an important part of the story. at first, you mentioned a moment ago you reiterated the guidance for the year. this is important because investors were not sure after the first quarter. tell me what change in terms of the backdrop. do you see a better backdrop in terms of the economy? is that also part of this? >> the economy especially us doing well. the biggest difference is, since we were able to share more of our story and our innovative solutions, i think now investors are starting to believe us when we said the second half of the year was going to be stronger. it's because of the five or six initiatives that we have implemented. trade dynamics have not gotten better. i mean there are some tailwinds but there are a lot of headwinds too. we were able to talk about them and we feel very confident that
we have gotten to turn the page and the second quarter was a good reflection the rest of the year will be too. maria: he said this order was a pivot. let me ask you about the backdrop international. we also heard from the european central bank. the left rates unchanged but they said a rate cut is coming. i don't know where they will cut rates they are already negative. but some on a program last week we had rick reeder from blackrock and he said the ecb will start buying equities and no other wiggle room. but the point is what is the backdrop in europe from your standpoint compared to china. >> there are two very key points to be monitored closely. with europe we think the biggest thing is uncertainty of brexit. that brings uncertainty into the uk but also brings it into europe as a whole. we are advocating and doing
everything we can to talk about the importance of brexit. we have so much going on between the uk and the european union. that if you had a hard brexit and you had a lotta borders put up and when i see borders and talk about from clearing goods, it can cause a lot of complexity spirit where the worlds largest broker. we can help customers deal with any situation. we just think that it's much smoother trade if that happens. maria: you also by the way, made it cheaper and easier to do cross-border packaging. >> that's right. maria: tell me what you have done. >> we just start of the service, it is worldwide economy, we announced it this week. the uk, china, hong kong and canada are the first countries that it will expand before that. it's really focused on small
shippers that are taking advantage of the e-commerce and this is a deferred service with a lower cost and to help them participate in this rapidly growing market we have seen a lot of demand for it since we've announced. maria: what would you say in terms of your outlook going forward? whether it is the us, europe or asia?had he things playing out in the next year? >> domestically, it is driven by the consumer. we feel very good about the us. the unemployment rate is low, as you know. it seems to be under control. it is just a lot of good things going. there are some trade point pressures and we talk about brexit in europe, it's one of those dynamics we are glad is being addressed next week in
shanghai made is that there will be progress these are two powerful economies. there are ways to increase trade in both directions. if this is done right and we encourage governments on each side to do that. maria: let's take a short break. when we come back want to ask you about technology. you've been investing on technology, drawings etc. and access points. we will get into that when we come back and then of course, in the next couple of months you are going to be thinking about a big hiring spree. around the holidays as well. we will talk about that. when we come back, more david abney from ups. i'm really into this car,
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i'm back with chairman and ceo of ups. david abney. ups is at the epicenter trade. it's interesting to know how things are going because you have your fingers in a lot of countries. and it gives us an idea of what's going on in the world. >> we do, we are in 220 countries and territories and on any given day, we moved three percent of the world gdp. in the u.s. remove six percent of the u.s. gdp. so we are really a present day barometer. we are not really a leading indicator but a present day barometer. so we have a good feel about what is going on today. maria: how do you continue growing but also keeping a clamp on expenses. you've been very good at this now.
you been able to keep expenses in check but that is one of the worries in terms of analysts. they want to make sure that your costs stay in line even as you invest in things like drones, new access centers, access points rather and technology. tell us what you're doing. >> one thing we've learned is you have to focus on some key areas. for us it is small businesses, e-commerce, healthcare and life sciences and international growth markets. and so, our strategies and announcements we made last week about new services were all focused on those four key strategies. if you do that and we implement technology to make sure that we can be the most efficient and that we can continue to bend the cost curve down at the same time we are investing in new opportunities. maria: one of the ideas there in terms of small business, which is a big portion of our audience by the way,
entrepreneur, small business managers. the fact that you are encouraging or making it easier for business to consumer versus business-to-business. tell me about that because you have greater access points where hb when you're delivering a business to consumer, you're delivering the one package. sonos another package across town or in another city whatever. but now you come up with access points we can deliver a host of packages to one place and that is also b to c, not b to b. >> a lot of b to c it can also be b to b from one small business to another. what we have done is we've given people, now we've added 12,000 new locations throughout the u.s. and it is cvs, michael's and advance auto parts.but that gives us 21,000 total. so 90 percent of the population is within five minutes from one of these access points. and so yes, from the economics
we are able to deliver many more packages.maria: a big cost saving. >> the customer, you have to worry about a notice being left on your door. and you can tell us in advance which access point you want to go to. as you're on your way home to the cleaners or whatever you can drop by and pick up your packages. so it is a real win-win situation. maria: holy did you get a package overnight, you can get a package the next day, it is new to a lot of people but amazon change the game with that.they put in this expectation that i can get whatever i want next day, right? how did that change the way you operate? >> we have certainly seen amazon and other large retailers that are taking advantage of the urgency that the consumer wants. the consumer today wants whatever they order to, whichever mode, it doesn't matter. but at the time that they want. so they have much more control over it and a lot of these
large -- have led the way but something anticipated and we've ordered 44 additional aircraft over the five-year period to make sure we have the capacity. maria: the story of the transformation of ups. it has been real positive.you have been overseeing that. where are you in that process? >> we are right in line with where we wanted to be. we decided a few years ago and this is not the first time ups has had to transform. we started as a messenger service in 1907 in seattle then the -- we've done it for five times. we've had such a good career and we are so proud of our legacy. but we knew that to have continued success like we have
had in the past, we have to be willing to change with the times and so this transformation doesn't have a beginning, it doesn't have an end. it's a continuous transformation and it is a mindset change. i know people have really jumped on board and we are making good progress. maria: should we expect that the wave and allocating capital, and talk about the dividend right now.in the future. >> absolutely. the way we manage the capitol structure, first we invest in the business. we have the highest -- in industry we get a good return. but then we know how important the dividend is to our investors and we have been growing the dividend and then of course, we do buybacks and we will continue to do that too. but our real focus is taking advantage of the offerings in the market. and making sure that we invest and get the returns we need. maria: great to have you on the program thank you so much. david abney, ceo and chairman at ups. don't go anywhere, more wall street after this. of savings and service.
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and while some advisors are happy to earn commissions whether you do well or not. fisher investments fees are structured so we do better when you do better. maybe that's why most of our clients come from other money managers. fisher investments. clearly better money management. maria: welcome back. next week another program, a big show next week, the home depot founder along with ceo of nyu langone health, doctor bob grossman. we talk about the state of healthcare in america. after he donated $100 million to nyu medical. we will talk next weekend on that. this weekend "sunday morning futures" on the fox news channel. a big program this weekend.
devin nunes and john radcliffe, my special guests right after the mueller testimony. they were among the questioners. ararararararararararararararara 10 i am live on fox news. start smart right here every week 6:00 a.m. to 9:00 a.m. easter with mornings with maria on the fox business network. start smart every morning with us. have a great rest of the weekend everybody. thank you for joining us. i will see you next time. >> hello and welcome to the wall street journal at large. so much for fiscal restraint. congressional leaders and the president facing a september deadline to increase the countries debt limit, struck a major agreement this week. maybe for members of the house and senate
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