Transcripts For FBC Countdown To The Closing Bell With Liz C

But its a phone call with chinas president that has tons wagging. What was said about north korea and its Nuclear Ambitions . Weve got adam shapiro following all the action at the United Nations and National Security experts john hanna and larry korb on the big signal that u. S. Defense Company Stocks are giving that show fear about north korea is real and palpable. Plus, cisco, it turns out screamed out the warning but qibble fax didnt follow ciscos lead. It was cisco that discovered a major security flaw, ended up exposing telling equifax and then equifax not showing and exposing the details of 143 million americans. Cisco executive chairman john chambers, well talk to him about that, Online Security, Silicon Valley, and why hes walking away from the company that has been his home for decades. Yes, that announced just today. And on wall street, its a new week and the bulls are back. The hat trick once again in range. New intraday records for the dow, s p 500, and the nasdaq. But can we close there . Were less than an hour to the closing bell. Lets start the countdown. Liz breaking news. We are just getting news before we get to the markets that the Spanish Government has just told the north Korean Ambassador leave the country by the end of the month. So hes got about two weeks. Interesting. With all the United Nations numbers and all of the news, the markets are record substituted and quickly we do see that the markets might be losing a little bit of momentum. The nasdaq turned negative but now up about two points. The s p better by 2. 5 points. Dow jones industrials up 67. Any gain for either the s p or dow is a new record. Now, its merger monday on wall street, and this involves a major defense matchup. Northrup, one step closer to positioning itself for the new military battleground space. The defense giant saying it has reached an agreement to buy rocket and missile maker orbital atk for 7. 8 billion in cash. Look at orbital. Skyrocketing on that news up 20 . Northrup gunnum better by three and a quarter percent. Share hollering will receive 134. 50 per share. The 22 premium to the friday close. But look at it now. Orbital at 132. 75 and gaining. The largest in the Defense Sector in two years. And as you see with northrup, it is jumping about 8. 55. Orbital atk is certainly flexing its muscle, and this could be the biggest grinch of the holiday season. Toys r us saying it could file for bankruptcy as soon as in a few weeks. Folks, this is just a very big deal because the toy giant has about 5 billion in debt and more than 1,600 stores worldwide. The news weighing on toy suppliers such as hasbro. Hitting new lows today. We do have hasbro down one and a third percent. Let us get to the United Nations. Can we do that . Because a dark cloud is casting a shadow over todays events at the un as the Nuclear Situation escalates by the minute. President trump meeting with israeli Prime Minister Benjamin Netanyahu in just the last few hours. They focused on the Iran Nuclear Deal seeking support for tougher measures against north korea while addressing the need to combat terrorism on the heels of the latest attack in london. To adam shapiro with an up to the minute. Hes supposed to meet with macron. Are they behind closed doors now . They will be meeting at about 3 15 liz. They will be talking, we believe about terrorism of course, france has been on the receiving end of terrorist attacks but also about the role of iran and destabilizing the middle east and, of course, the Iranian Nuclear deal, which the United States has to determine in compliance with the deal by october or the United States could pull out of the deal. Now, that was also a topic of discussion earlier this afternoon with the Prime Minister from israel. Benjamin netanyahu who met with President Trump. They were also talking not only about the Iranian Nuclear deal but also about mideast peace and the prospects for mideast peace. Heres what President Trump said about that. Peace between the palestinians and israel will be a fantastic achievement. And we are giving it an absolute go. I really think we have the chance. I think israel would like to see it, and i think the palestinians would like to see it, and i can tell you that the Trump Administration would like to see it. But the middle easts isnt the only hot spot in the world. Of course, asia and north korea. We expect president to address north korea when he addresses the United Nations General Assembly tomorrow morning, and we know that the un ambassador from the United States nikki haley has put the un as well as north korea on notice saying that if north korea keeps on with its reckless behavior, the United States has to defend itself going on to say north korea will be destroyed, and we know that and none of us want that. None of us want war. So this is a key issue that we expect the president to deal with when he speaks to the un General Assembly tomorrow. But its something everyone is talking about, liz. Right now. Liz doesnt it amaze you how resilient the markets are with so many headlines coming at them, adam . It does. Its really weve got the were not going to talk about it, but the Federal Reserve meeting tomorrow. I mean, theres so much that could cause these markets to go down, but they resist. Liz what a segue. We are going to talk about the fed because as you watch all of these headlines from north korea, iran, isis, we are looking at something extraordinarily important to the greater part of the investor audience. Markets kicking off the week with a slow fresh records. But is the fed about to blow it all . Janet yellen and company will dip into uncharted water when the fed kicks off its twoday policy meeting tomorrow with trillions of dollars at stake on the feds Balance Sheet, is the Federal Reserve expected to take the historic leap to start unwinding that massive portfolio . Well, whats expected and what should the fed do if it throws some type of massive curveball to investors into something completely off the wall come to pass . Bring in the floor show and our traders at the New York Stock Exchange and the cme. Hey, gentlemen. I really want to ask you. What is the worst thing that the fed could do right now . Ill begin with you, john. Some people say dont raise any more this year. Others say dont even telegraph that were going to start unwinding a Balance Sheet or not. What do you think . I think if you look back at the end of 2016 when the fed kind of laid out of their plan what this year was going to be, i think investors like to see a plan and like to see the fed follow that plan. I think the worst thing they could do at this point is not raise rates. I think many people are expecting that based off of the blueprint that weve seen. And if the fed deviates away from what they said, the markets get jittery, investors get jittery. Its all about transparency. Whether we agree with the plan or not, if you know what the plan is, youre able to trade and position yourself accordingly. So i think the fed really needs to stick onto what theyve been saying. They say that theyre data dependent. The data that weve seen clearly helps and supports that our economy is Getting Better with and we can sustain an additional rate hike at this point. Yes, were in the middle of december. Two and a half, three more months to go in the year, there are other opportunities. But i think we really have to get to a point where everyone feels comfortable that the fed is really grasping this and moving everything in the right direction. Liz you say that the fed could do this, and it could handle that the economys looking good. But allen, inflation isnt there. It is persistently low, and this in spite of the fact that we have a very strong labor market, unemployment is down at 4. 3 at the height of the financial crisis, it was at 10 . But yet, were not seeing wage increases. What are called wage pressures. So does the fed have to wait for that . I dont think so. I think the worst thing they could do is actually raise rates. So theres a possibility maybe 50 50 chance that it happens in december. But you dont get a 75 chance all the way out until june of 2018. I think the unwinding of the bond portfolio is a way to effectively raise rates. So that should happen. But weve been spoon fed for this for how long now . So theyve telegraphed to every single move and gotten exact performance they want. Guess what we have today . You just said. New all time forever highs once again. Liz luke, some of what has been very low in the gap for gasoline prices, it looks like both Hurricane Irma and harvey have skewed and gyrated any numbers that people are trying to anticipate here one minute the crude, we see a build in crude and the next we see a draw in gasoline, and it makes it over once the refiners start cooking. Yeah. But i mean, weve been saying this for a couple of years now, liz. Theres just limited Refining Capacity and a lot of crude. And a lot of Oil Producers and Oil Company Heads have said that they see peak oil usage in 2024. So if you think that it takes you four or five years to bring on a refinery, youre going to be smacked right in front of that year, so youre not going to make that investment, therefore, capacity is still going to be strained where it is right now. So theres a lot of crude but not a lot of refining space, if demand goes up. And, by the way, with the fed, i mean, how many times are they going to fool us . Theyve said that theyre data dependent. But that data, that target keeps moving for six years now. Six, seven years were going to raise rates. Oh, if this happens, if that doesnt happen. I mean, its theyre not going to do anything, and even if they raise it by 25 basis points, so what. Liz yeah, we still have kind of measly growth. 2, 3 . Great to see you, gentlemen. Thank you so much. John, allen, luke. Always a pleasure. And we do have that closing bell ringing in 49 minutes. Dow jones industrials up 66. Were just up 71. This is a big run for the dow. Decent for the s p. The nasdaq clinging to gains of one and twothirds points. Yes, youve heard this number, and you may be one of them. 143million americans got their top secret information. Social security, birth date, addresses, credit card numbers, compromised in that huge i can facts hack. But now, we have more detail on what kind of warning they got and had they just listened to cisco researchers who discovered the security flaw months ago and issued a patch, they might not be in this position today. John chambers, the long time executive chairman of cisco, he tells us the Silicon Valley Corporate America are doing enough to protect your personal information. Oh, and he has big personal news too. The fox business exclusive interview straight ahead on countdown. Dont go away to folks everywhere whose diabetic. Nerve pain shoots and burns its way into your day. I hear you. When that pain makes simple errands simply unbearable. I hear you. I hear you because my dad struggled with this pain. Make sure your doctor hears you too. So folks, dont wait. Step on up. And talk to your doctor. Because you have places to go. And people who cant wait for you to get there. If you have diabetes and burning, shooting pain in your feet or hands. Step on up and talk to your doctor today. Liz the outcry over that Equifax Breach has gotten more disastrous. Reporting that ciscos systems sounded the alarm back in march raising red flags about an Online Security flaw. And then on the same day distributed an emergency patch imploring all users to fix the problem stat. But despite ciscos urgent warning, equifax revealed a week and a half ago that hackers did indeed access the personal data of 143 million americans. As the company somehow continued using a flawed software. No doubt cisco researchers who warned equifax who are shaking their heads today as the number of cases have climbed to 50. John chambers who, by the way, is stepping down as executive chairman of the company he ran for 20 years. John, notice i didnt say retire. Youre not retiring. Its amazing; right . All of these years. Its been a lot of fun, liz. Ive been on your show many times. And i will stay as executive chairman until december when our next session is with our shareholders for review. But its been an exciting run, you know . We change the world. We change the way you work, live, learn, and play. We really created a culture in one of the most admired companies in the world. Liz john, let me interrupt you here. We have a live picture meeting with President Trump Emmanuel Macron, the president. And as they come together, im quite sure that they probably would be talking about things like terrorism and certainly the European Union, the paris climate accord. But what do you hope they crystallize in their conversations . Well, liz, its amazing. Emmanuel macron is a great leader. I know him very well. Hes been to my house for dinner with startups here in Silicon Valley. Weve taught mba courses together in france. Weve been in front of the press about a digital france and how france could be a startup nation for the future. We said the next biggest thing in europe would be france two and a half years ago. It would become the startup nation. It has. So what i would hope that youre about might surprise Many Americans is i think we need to become the startup nation again across our entire country. So i think watching what is occurring in israel, watching whats occurring in france and india, there are many things we can also focus on here in the states in terms of a startup nation because thats where all the job creation will occur. Thats where the income increases will be for american households. Thats my personal passion as well, liz. Liz well, they just shook hands, and theyve been thanking everybody and the president has shown admiration going to france to be with Emmanuel Macron a banker, i should add. So he is indeed quite the businessman. Want to get to this equifax story front page news in the wall street journal that is titled weve been breached inside the equifax hack. Your guys found the flaw and they notified everybody who used this system to patch the vulnerability immediately and somehow the equifax guys either ignored it or couldnt pull it off. Now half a American Adults are compromised. Speaking broadly and generally, how does Something Like this happen . Well, liz, when you think about the broad approach to Cyber Security, youre going to see organized crime, rogue nation states, et cetera, focus on every individual and every company in the world. And thats why security has to be such a key part of every companys strategy, and its why cisco is focused as security as our number one strategy five years ago. So when you think about a Digital World where 500 billion devices get connected very shortly, security has to be able to protect you from all those different aspects. So were the number one player in Enterprise Security and todays events just point again how important it is to every company around the worl w. Liz speaking of every company, is it possible that equifax is just the tip of the iceberg and other Companies May have to reveal they were hacked as well . Liz, i think youre going to see security and Cyber Security issues continue to be front and center. When i talk to board of directors around the world and talk to them about digitization and how thats the next big frontier for them as every Company Becomes digital, security must be a part of that solution. It cant be an afterthought. The average company has about 45 to 60 security vendors. If you dont tie those products together in an architecture, all the bad guys do is find the weakest point. Thats why cisco is so focused on this area and hopefully the network will be the center of how you prevent these types of attacks in the future. Liz you must have done something right in your 20 years because your researchers caught it, dealt with it back in march. And i mean, they sent out the warnings, which is just brilliant; right . Well, youre being very kind, liz. And the last 20 years, we probably more than any other company have reinvented ourselves multiple times. We dont tend to focus on products. We focus on market transitions. The internet change and the way you live, learn, and play. The importance of acquisitions to invasions, and weve done 200 of them. We took the company from 70 million in sales to 50 billion. When i joined the company, 400 people. Its now 75,000. And if theres one thing weve done well is getting market transitions right, being very tight with our customers, and integrate in this transitions and products to solve their innovation problems. And thats what architectures a