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to pay taxes. david: you like airline hawaii. >> a good stock and second honeymoon. david: e-mack. >> i would never invest in an airline. david: e monday, good night from new york. >> fox business headquarters new york city, new "wall street journal" week. >> welcome to "wall street week." i am maria bartiromo. coming up, our special guest this weekend, leon panetta, held titles of defense secretary, cia director and white house chief of staff, we have a lot to discuss with mr. panetta. do stay with us. but first what a week on wall street, some big headlines, impacting efs from wall street to main street, dow jones breaking through 22,000 mark on wednesday. dow now up better than 20% since election day, markets overall remember mixed for the week, a
big driver bedo yo behind the ds apple, stock hit all-time high after beating expectations. apple said it sold more iphones than expected and hinted there could be a new model on the way in 4th quarter. then tesla shares, they had a good week, company reporting better than expected results, consider consider musk expressing confidence in company's ability to meet product deshand fo demand for me tesla. >> then jobs report out on friday morning, economy job adds beating most expectations. in washington, this week, a high level white house staffer, was shown the door. anthony scaramucci was removed by new chief of staff john kelly, this move days after scaramucci spoke on record to a new yorker reporter about former
chief of staff reince priebus and white house chief strag igit bannon with colorful language. >> president trump on the road this week, speaking in west virginia, a rally, where the governor of west virginia announced he would become a republican. >> stock market reached another all-time in history, all-time high today. >> trump rally or earnings rally. joe amado is joining me to talk about this market, earnings for first quarter were up 15%, second quarter expectations growth 11%. what is driving this. is that a reasons to own equity? >> i think it is. in that you see macro economic support from underlying bottom
up fundamentals that companies are showing, you see a continued accommodative environment with interests remaining low. and a path to higher rates but still rates will likely stay low for a long period of time, that stimulates the economy. you had companies who continue to work hard to improve their margins and you had top line growth to help operating leverage in the companies. >> i guess federal reserve is a bit of a question mark. because we know that fed started raising interest rates, but is there a expectation that we'll get further interest rate hikes? the economy is good, but it is not gangbusters, you worry that some people worry that the federal reserve will smash an economic recovery that is just getting started, gaining tracktion with the string the interest rate hikes. >> the the fed is a big question mark, it is two pieces one is rate path a aas of now market ae expecting december to not is a
rate hike but given strong implement numbers that kay -- a employment numbers you may see a rate hike. and then balance sheet, a lot of focus will bees balance sheets roll off, the pace of that and how that affects forecasts for you know where rates go. >> a huge balance sheet 4.5 trillion they want to unwind it, will they be able to do that without disruption. >> they have been clear in terms of pace, which is modest, they would describe that autopilot, but not just feds, have you seen over 8 ears, central banks, major central banks balloons bae sheets to 13 or 14 trillion from 5, we see a peek in central bank balance sheets early 2018, then you will see recede, then none of us understand what the full implications are, we have never seen that before.
never seen central banks increase their balance sheet to what they have, or roll off effect. >> unprecedented, talk about investing today. and allocating capital. you have backed off a lit large cap equities. >> well, in our asset allocation process we look at return of u.s. equity markets, and large caps did particularly well, and meaningful out performing small caps. we still maintain constructive view on small caps, and small caps have a benefit of any policy changes particularly in taxes, small cap companies pay higher tax rates, that upside we would see in small caps. >> do you think they get tax reform done? how much is priced in at-this-point, we have been talking about strong earns driving things, how much is tax reform getting done priced in to the market. >> i think very little. given policy failures over course of the last 6 or sive
month sive months you on of washington reduced particulars of market that gone will get done. ironically i think that failure of healthcare increasing likelielikelihood of tax reform. they have a lot of pressure to get something done, and tax reform unlike healthcare is more about math than around the emotional issues that can surround something like healthcare reform, we think a modest proposal in tax reductions will occur. not really a reform. that will add to a boost in earnings growth, if you get rates in 20s, you can see 5 to $10 per share in s&p earning increase looking forward 2018. >> >> thank you. >> thank you. >> joe amato. when "wall street week" continues secretary leon panetta will join us. stay with us.
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(basketball game and crowd sounds) ♪ if you talkin' they will ♪ every single time... we're getting killed. yeah, well, kyle's not here. how come? kicked off the team. didn't tim tell you? kyle and some other kids got caught drinking beer in the park a couple of nights ago. really? yeah. zero tolerance-he's out for the season. c'mon, it's a first offense, right? that we know of. but why should that matter? he knew not to drink. i've made it clear to matt that's what we expect from him. what have you said to tim? um... nothing, really. you know, a lot of kids try it at this age, so- yeah, well, a lot of kids don't try it, too. i'm not saying that matt's going to be this perfect kid, but if i don't tell him what we expect and why he shouldn't drink, how's he gonna know? you think kids that age really listen? they'd never admit it, bill, but they hear more than you think.
(announcer) talk. they hear you. for more information about talking with kids about underage drinking, visit underagedrinking.samhsa.gov. maria: general john kelly has been moving fast in his new role as chief of staff in white house. leon panetta has been secretary of defense, cia director and chief of staff under president bill clinton, i spoke with him about the job that kelly has ahead of him, and many other issues vital to the country. >> i like john kelly a lot. he was my military aid for two years when i was secretary at defense department. best thing to know about john kelly, he is first and foremost a marine. he is dedicate his life to public service, committed to whoever is commander in chief. and he somebody who believes deeply in discipline.
in a strong chain of command. and orderly process for decision making. does not tolerate chaos very easily. so, i think he is right guy to be able to try to get the white house back in order, i think that question will be, whether or not the president gives him the room to makes changes that will be necessary to improve the operations to the white house. maria: what would you advise him to do at-this-point, that is what i was about to say, this a different president. this say different approach. president trump goes directly to the american people with his tweeting. he is sometimes saying thins that perhaps you know are not scripted. he sort of you know, not as the discipline that you would think of when you think of a general, like john kelly. >> well, you know, i think john has to first and foremost focus on the staff operation in the
white house. he has to be the chief of staff. which means you cannot have a bunch of people who are also chiefs of staff running around the white house, and having access on oval office, my sense is he is beginning to impose that discipline. and establish a strong chain of command, people are responsible to others and supervised that have clear responsibilities, then create a orderly process for decision makes in the white house. now you know, i know that president. he will continue to tweet, that is something he has been doing, he will continue to do that but in the very least, if he will tweet, policy, it will be result of a decision making process. in which people have been able to present their views, and information to the president before he does that. so, i hope that john kelly will at least be able to impose that. maria: one thing he said, this
week was, any information that gets in front of the president needs to come in front of me first, we don't just want willy-nilly, president looking at different information some of that information may be bad, we need president making good stations based on good, strong accurate information. >> that is john kelly. it is important. the president has to deal with a number of crisis and problems, he has a national security process that involving deputy meeting and principle meeting to move forward on recommendation to president, he should follow that. he should do the same thing with economic policy. and to dom o domestic policy, to create an orderly process where information is provide, option are viewed and then presented to the president, when i was chief of staff to bill clinton before
any briefing went to president it had to come to me, in the chief of staff's office at the white house. house. i think that is the right way to do business. maria: that makes sense. meanwhile the crises that administration is dealing with are the leaks. calling them damaging, they are ramping up attention on leaks, they will prosecute the leakers. what do you think about all this? secretary, how do you stop the leaking? >> you know, interestly enough, i think that a lot of that will relate to john kelly's ability to be a strong chief of staff and be able to make that staff there feel like they are part of a team. you know, i don't think that these leaks are helpful in anyway. they are dangerous. particularly when it investing classified information. you can refer to the fbi, you can refer to justice department,
and where it involves classified information it should be investigated. but the key to preventing leaks is to create a sense of team work went the white house. within the staff, so they feel loyalty to the president of the united states they have to feel loyalty, feel like they are part of a time, these leaks happen, because people are disgruntled they don't feel their voice is being heard, they are related to a particular faction in the white house that is opposed to another facttio faction, they ae shooting at one another there in white house. the best way to control leaks to make them part of a team, make them loyal, not only to the chief of staff but in particular to president of united states. maria: much more with leon panetta when "wall street week" welcomes right back, stay with us. >> forget, russia, north korea and isis, could our biggest
maria: welcome back more now with my interview with leon panetta. it feels that north korea situation has become dangerous in last few months. what is your take on this latest provocation where you have north korea launching first intercontinental ballistic missile hidden from spy satellites and came aimed to sp. >> maria, there are a number of
dangerous flash points in the world that confronting our country. challenging our national security. probably most dangerous right now is north korea. because they are developing an icbm, they are continuing to try to develop a miniaturize nuclear weapon, they have nuclear weapons, they are trying to develop a delivery system for those. it obvious they do have potential to be able to reach not only pacific region but reach even the united states that is a direct threat to national security of the united states for that reason it is important that we have to develop a comprehensive strategy to deal with north korea. but principle strategy has to be containment and deterrents, this involves military and diplomatic effort, on tilltar military side
have to strengthen our present in region, work with south korea and japan, and other country in region we have to make sure that either or overtly or covertly we have the capability to take down those missiles even when they are testing them, take them down. in addition to that, we. need diplomacy to try to push china to put pressure on north korea to come to negotiating table. all this is what couldn' constia firm strategy in dealing with north korea. maria: meanwhile, there are other hot spots in the world, president last week signed a bill approving new sanctions against russia. was that the right move? >> i think that president did the right thing, i think last thing you want to do is show russia or the world that we're not unified with regards to policy dealing with russia, dealing with iran and with north korea. so i'm glad that president did
sign it, i would have preferred that president and congress would have worked together. and come to an agreement as to what steps should have been taken. but for whatever reason that did not happen. so i'm glad that congress acted, i am glad they moved, and i am glad that president sign that bill. maria: have you seen an environment quite like this one, you don't have any conversation between the two parties, secretary? you were running defense department, and running cia there was a very different relationship between the republican and democrats. and republicans will say, look, we don't have any participation from democrats, not on healthcare not on tax reform. maybe they will be there on truck 46. hoinfrastructure.how does the ce forward with such divisiveness. >> i think you touched on one of the fundamental problems that we're facing in our democracy. if you ask about national security, i think one big threat to national security is the
disfunction in washington. the inability of democrats and republicans to sit down and work together on issues, and inability of president and leadership of congress to work together. on issues. and result is very frankly we're operating by crisis. i tell students, that in this country, in a democracy, you operate either by leadership or by crisis. if leadership is there, willing to takes risk associated with leadership, sit down, and work together to find solutions to problems it takes risk, i understand that. but it is leadership that is what we elect, to the congress and to the white house, we hopefuly elect people who are leaders. but if that does not happen we operate by crisis, right now, almost on every front we're dialing with things by crisis. and the problem is when you do,
that you lose the trust of the american people in our system of governing that is dangerous. maria: it is dangerous, and unfortunate, we're having a debate about healthcare, that is a fight that within on in washington. and now, they are talking about tax reform. you were president bill clinton a chief of staff, bill clinton was a moderate, he wanted to take the country forward, he was not afraid to move across the ale anaisle. it feels like democratic party has been hijacked by extreme left, barack obama, warren and sanders. >> i think both parties have been hijacks by extremes. this -- that has been the problem in terms of inability of parties to work together. is you know extremes have taken control of what is called party base. and so as a result, of that, in -- they feel to survive, they have to cater to their extremes.
as opposed to working to solve problems. when i was in congress, and i often said, i have sean seen washington at its best and worst. when i was there republicans and democrats, on both sides, were working it on issues with the president of united states. when president reagan was in white house tip o'neal worked together with the president to acomplexer acomearkansas comp a great deal we not a lot done, we were table to get things done. and that was good. that is what -- that is why you are elected. today, they -- i think they are not sure whether governing is good politics. let me tell you, governs is good politics, american people want their elected representatives to solve the problems facing this country. period. that is what they should do.
>> our thanks to secretary leon pan eta don't go any where, more "wall street week" right after this. liberty mutual stood with me when this guy got a flat tire in the middle of the night, so he got home safe. yeah, my dad says our insurance doesn't have that. what?! you can leave worry behind when liberty stands with you™. liberty mutual insurance.
♪i hope some day you'll join us♪ ♪and the world will live as one♪ maria: welcome back, looking at market events coming up this week that will impact your money. inflation will be focus with the produce price index and consumer price index released at end of the week. a busy week for earnings, dow companies disney and coca-cola will be reporting their second quarter, along with a slew of retailers like j.c. penney. and fox is reporting, this week, coming up next week on "wall street week," join my, a key player behind tax reform on capitol hill, house ways and
means committee chairman will be my gift. hope you join me on "sunday morning futures," 10:00 a.m. with orrin >> lou: good evening, everybody. president trump focusing on those who voted for & economic and terrorism and legislation. and the president addressed all of those issues with rational reform of our immigration system. the two senators want it based on merit and skills instead of family connections. >> it great to be here and