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tv   Maria Bartiromos Wall Street  FOX Business  April 28, 2018 9:00am-9:30am EDT

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be sure to send me your questions or property stories at i'm bob massi. i'll see you next week. [ woman vocalizing ] weekdays at 4:00. maria: happy weekend. welcome to the program that amizes the week that w and helps position you for the weak ahead. coming up, blackstone group chairman and cofounder stephen schwartzman is my special guest this weekend. but first, christine is standing by in the fox newsroom with the big head lines affecting everything from wall street to main street. >> thank, maria. this week saw strong quarterly results but the main focus for investors was a selloff in the bond market. with the treasury yield hit 3% at one point. the prospects of yields going
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higher will continue to sway the markets. investors got some positive news, the economy growing 2.3% last quarter. some were concerned about a pullback in consumer spending. by week's end, all three major indices finishing in the red. amazon reporting impressive first quarter margins. saw the profits double and revenues accelerate. that made the investors happy with the stock hitting an all-time high. consumer weren't as cheerful with amazon announcing it would raise the price of the prime membership $20 to 119 dplars $ y testimony ended on thursday as the d objection j plans to block the $85 million deal. the government says that they
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will highway higher prices for the consumers. back to you. maria: thank you. my next guest is one of the giants in the world of finance, blackstone cofounder and ceo stephen schwartzman, exofounding the blackstone group in 1985 has turned the firm into the leading alternative investment firm. the blackstone group is a business leader across classics, private equity, hedge fund solutions and the largest property owner in the world, real estate. in addition to blackstone, he's a leader in philanthropy with a long history of giving back, supporting education, schools, health care and the list goes on. it's my honor to have steve as my guest this weekend. i want to start in china. you've done so much in china from your scholars and investing.
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this weekend we have the president's key economic team going to china to meet with their counter part, stephen mnuchin is going with larry kudlow and mr. lighthouser. what can they accomplish? from they're starting a process. it's important to keep the expectations under realistic control. there is a lot of stuff that needs to be adjusted between the two countries. china has very high tariffs. basically makes it difficult for foreigners, including the united states, to export into china. they have restricted ability to invest in a lot of industries in china. they have difficult regulation standards and customs. they have some difficulties for us with protecting intellectual
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property. and so all of these are big issues and they're unbalanced. and they tend to be in favor strongly of china. and the u.s. government just wants to level the playing field so that companies can compete fairly. what's normal for a developing county is to have a number of these issues in place to allow them to grow. china has reached the point where they're much more mature, they're about 14% of the world's economy and they're growing double the rate of the u.s. at least. and so it's time to make these adjustments. maria: so do you think we'll see a change? i mean right now, what are there, ten industry in china that are deemed off limit to
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foreigners. and if you were to get a foothold in china, you would own 49% of a joint venture. do you want to see the same kind of controls here? is that something that donald trump would do in terms of foreign ownership or do you think they'll ease the restrictions in terms of getting a foothold in china and selling to the 1.3 billion person population. >> i think china will change over time. and given where we are with the announcements on tariffs and other problems being created between the two countries, i think there's a good faith effort on both sides to try and avoid those types of, you would call it a trade war. that doesn't help anybody. what helps both countries is to reset the economic relationship to allow for your competition. i think the chinese are open to
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that. nothing just happens in a day. this will take some hard work between the two countries. maria: so talk to me about what has taken place in north korea this weekend. they are talking about an end to the korean war, north and south. do you believe it? >> well, i think it's in the interest of north korea to protect its country and protect its government. on the path they were on, by threatening nuclear war against the united states, having the united states react to that, which anybody would, organizing a sanctions regime which was very tough, and getting the support, the wider support of the world. and the chinese have done a terrific job in terms of limiting goods and services that
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can go to korea. that's their major way in for korea to live, whether it's with oil or other things. and as the chinese tighten this noose along with the americans, it's very difficult to imagine what you would do on the korean side, north korea side particularly with potential for military action from the united states. so if you were sitting in the kim jonkim jong-il position witf those negative things happening, you would want to find some way out of this. and i happen to be in china in the same compound when he was showing up on his train. maria: wow. >> and i said to the person next to me, i said, this is somebody who has never been to beijing in six years, just never been. maria: right. >> and you know, there's not a wonderful relationship particularly with the chinese and the north koreans, unlike
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what most people think. and the fact that he showed up, i thought, was because he wanted to make some kind of deal because the pressures are just terrible. maria: you're scholars, talking about a fourth graduating class right now. four years. >> forth we're admitting. second is graduating. maria: why was this so important to you, steve, to raise money for students from all around the world to go to china and to be part of this program? >> because i looked at china probably about seven years ago and you could see it growing so rapidly and you could see in the teeth of the financial crisis the difficulty that the developed world was having. and i looked at it and i said, well, if the western democracies are having economic problems and we're in a repressive regulatory environment and we're not
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extending credit, we're going to have high unemployment, we're going to have people with, you know, less jobs, less opportunity. they're going to have to use their savings to survive and they're going to be angry. and once people get angry, it's called populism, they get angry at somebody local or somebody in another party or somebody somewhere domestically and it doesn't solve their problem. so they continue to have the same problem, which leads to more anger. and i figured eventually they're going to get to china and because they're the winner of the game. they're growing at that point 7% to 8%. they're hiring 10 million people a year. their wealth is going up rapidly. and people will find somebody who's doing well and try and take them down. so i was pretty sure they were
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going to get to china. i didn't know they would get ther this quickly. but what i wanted to do was get in the way of the hostility directed against what is the greatest power in the world other than the united states don't go anywhere. more of maria's exclusive sitdown with steve schwartzman is coming up when wall street returns. everyone is talking about our trade talks with china but could our neighbors be more important? >> i think if we didn't make that deal, it would have political ramifications. >> stephen schwartzman chimes there was an idea. to bring together a group of remarkable people. to help save the universe... from paying too much on their car insurance. hey, there's cake in the breakroom... what are you doing? um...nothing? marvel studios' avengers: infinity war, in theaters april 27th.
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now...where were we?
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. and now back to maria bartiromo's exclusive sitdown interview with blackstone ceo stephen schwarzman. maria: do you think we'll get a deal done with canada and mexico perhaps before the elections this summer, july 1, and is that one of the reasons that the
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markets have been so volatile, some of the uncertainty around trade? >> yeah. with nafta, which is the agreement with those two countries and the united states, they've spent sort of a long tough year of working on this. and i think they are -- they've resolved the economic issues to reduce the deficit principally from mexico. and with canada sometimes we're in complete balance. depends on where their currency is. sometimes we're in surplus with canada. it's not a big arithmetic issue. it's a legal type issue. maria: so you think you're close? >> we're close. there are one or two issues.
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for example, the u.s. wants a five-year blowup, if you will, and everybody has to recommit to it. neither of the two countries really like that. and it's pretty unprecedented. that's probably the biggest issue. and you know, some people want a review, some people want a blowup and a reaffirmation to go on. that's probably the biggest thing. if the mexicans and the canadians can compromise on those -- that point and one other one, which is judicial, then you'll have a deal. if for some reason, you know, that's too hard for them to swallow, you wouldn't. but the consequences of not going nafta for the united states are very severe, actually. we sell $130 billion of goods to
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china. we sell about $550 billion to canada and mexico. so in terms of importance for the u.s. economy, people producing goods and services for mexico and china are much more -- mexico and can that da arcanada aremuch for important . the deficit is big wer china because they sell us about $510 billion and we sell them 130. but in terms of the workings of the u.s. economy, canada and mexico are very very consequential. and i think if we didn't make that deal it would also have political ramifications. that there will be a lot of unhappy republicans. and the reason for that is that a lot of the exports that come from the united states happen to come from republican states.
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ag businesses and other things. maria: right. >> and that ends up potentially impacting the house races and other types of things. so i think economically nafta has fixed up and improved. it's a very good thing. maria: yeah. >> more from maria's exclusive sitdown with stephen schwarzman is coming up when wall street returns where is black stone focusing on next? >> finance is a funny business. it has no patent protection. >> steve schwarzman
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me tell you -- let me ask you about growth there. the last time we spoke you said you're entering a new phase here in terms of growth picking up. you're now in the insurance business, in the retail business, not just the largest alternative investment manager in the world. tell me about where things are going in terms of your own firm. >> well our firm, we're in the business of, you know, sort of innovation. finance is a funny business. you know, it has no patent protection. and so anything that you think you're doing, that's pioneering, could be replicated by somebody else very very quickly. there are no barriers for entry in effect. and so to be a successful financial services business, you have to be in the intellectual capital invention business. and that's what we've always
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done at blackstone and that's how we've become so much larger than, you know, anybody else who is in our business. so we're constantly looking for interesting investment classes, areas, parts of the world, different parts of capital structures. and so what we did is we started with the highest performing products in the world and we did a pretty good job at that, both in performance and growing our business. and then we found out there was an appetite for returns that didn't have to be 18 to 20. they could be sort of 12 to 14. some people are pretty happy. maria: i'll take it. >> 12 to 14 looks easy if you've been doing higher. and what happens is ironically, there are more people who want 12 to 14 than want a higher one. maria: of course. yeah, yeah.
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>> and those markets are much bigger for us to address. and we also can take our products all around the world. and you know, people want these kinds of higher returns generally everywhere. maria: by the way, the retrail investor had not had a chance to get the exposure to alternatives. now they can. >> slowly. because there are certain inhibitions. we have to have so much money before you can buy these products. of course people who are richer can buy them and they make more money and it's unfair to the people who don't have as much money. so we are cautiously optimistic that the u.s. government is going -- as part of deregulation is going to take another look at regulations that prohibit all of the people with 401(k)s from being able to take advantage of the same thing that more wealthy retail investors can do.
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if that market is opened, it's great for those people who are retiring. because our types of products historically have not lost principle. they haven't lost money. and you make, historically, much more money than the stock market. it's sort of like a 750 bases points, sometimes 1,000, sometimes as low as 500. so in english, what that means to somebody who is watching the program, you make 5% to 10% more than you do in a stock market which is averaged around 8%. maria: and we've seen the evidence of it because the market has been so volatile and nervous since the start of the year, all the while blackstone continues outperforming. you continue in this stable high growth number even in the face of tough public markets. great to have you on the program this weekend. >> great to see you. maria: steve schwarzman, the chairman, ceo and found are of
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the blackstone group. don't go anywhere. maria: welcome back.
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time for a lock at some of the big market events coming up in the week ahead that could impact your money. monday kicks off a big week in earnings. we've got mcdonald's and lowe's reporting their first quarter. also a number of economic reports of course. we've got the latest on personal income, the chicago purchasing manager's index is typically a market mover. now tuesday we've got the meeting scheduled as well as the latest numbers on auto sales and construction spending. the latest earnings news from apple. that's going to be a market mover. dan niles was on the program last week saying apple is going to miss. remember that? merck and allstate. we're not expecting an interest rate hike. the meeting is expected to talk about the economy but no moves in rates. wednesday the fmoc will release
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the findings a enwe'll get the latest employment report adds well. earnings from tesla, that will be closely watched, given liquidity issues. kraft, hiens and metlife. thursday, cbs, dow, dupont, and xerox are reporting quarter i earnings. market movers on jobless claims, international trade, production and cost. friday the latest jobs numbers from the labor department. be sure to tune in to our jobs in america report on mornings with maria here on the fox business network. we are also expecting berkshire hathway to share its earnings on friday night. coming up next week right here, join me for hayman capital management founder kyle bass. we're talking with kyle about his nftsing strategy as well. i'll see you sunday morni on the fox news channel live from los angeles this weekend and sunday morning futures, 10 a.m. eastern on fox as we come to you from the conference this
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weekend. weekdays here with mornings with maria. on monday, stephen mnuchin. join us again next week. thanks for being with me. >> i'm bob massi. for 35 years, i've been practicing law and living in las vegas, ground zero for the american real-estate crisis. but it wasn't just vegas that was hit hard. lives were destroyed from coast to coast as the economy tanked. now it's a different story. the american dream is back. and nowhere is that more clear than the grand canyon state of arizona. so we headed from the strip to the desert to show you how to explore the new landscape and live the american dream. i'm gonna help real people who are facing some major problems, explain the bold plans that are changing how americans live, and take you behind the gates of properties you have to see to believe.


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