Transcripts For CNBC Squawk Alley 20170410

Good monday morning. Welcome to squawk alley. Jon fortt, sarahizesarahi iize. Interesting action this morning as we get a lot of things handed in our way. Bank earnings began on thursday, yellen tonight at 4 00 eastern time. Got some geopolitics to watch as Rex Tillerson makes his way to moscow. All of that with continued low volatility, even though bond yields did tick up a bit on friday. I think with the yellingen comme yell enclents later, it will be interesting to see if she mentioned the much weaker than expected jobs number on friday, whether that represents any speed bump in terms of growth or whether the 4. 5 Unemployment Rate best since 2007 should be applauded and will keep the fed on track to raise Interest Rates two more times this year as theyre scheduled to. People, jon, talk about the list of new his sligh s shrinki. Tesla once again to 310, amazon not quite an alltime high, but two big bullish analyst calls this morning. And everybody led by elon musk who cares about this stock and believes in the story will defend tesla being at this market cap because, hey, stock prices are about the future. But still, i mean, its not as if ford and gm have been caught completely flat footed in about this electric vehicle race. They do have skin in the game. So i mean its anybodys guess how this will turn out. But something tells me this disparity in valuation is not going to stay this way forever. Morgan stanley Investment Management meantime soundings alarm this morning as they take a look at valuations. Good to have you here to talk about this. Thanks. Sounded the alarm, is that a fairway to characterize it . What im trying to say is keep in mind that stock market valuations today are the most expensive that they have been outside of the tech bubble. So of course i think justifies it with the low Interest Rates, but this is like a bull market which is very advanced. And to get too excited at this stage id be a bit cautious about it because i think that the average stock in the market is the most expensive its ever been because of the tech bubble. It was the tech stocks which lifted the entire market valuations. But the average stock smoths expensive that its ever been. Let me stop you for a moment. And direct our viewer to the white house. The president on his way to the rose garden with the latest Supreme Court justice, neil gorsuch. [ applause ] thank you very much. Thank you. Thank you very much. Friends and distinguished guests, welcome to the white house. We are gathered here today for a truly momentous occasion in our democracy. The swearing in of a United States Supreme Court justice. In particular, im greatly honored to welcome to these grounds every sitting justice of the United States Supreme Court. Welcome. Thank you. Mr. Chief justice and fellow justices, its a privilege to have you here to join in this historic moment on this very beautiful spring day in the rose garden. Spring is really the perfect backdrop for this joyful gathering of friends because together we are in a process of reviewing and renewing and also rebuilding our country. A new optimism is sweeping across our land. And a new faith in america is filling our hoerearts and lifti our sights. Id also like to recognize senator cory gardner, mike lee, and mike crepel. Thank you very much and for allall your work. Although he could not be here today, i want to express our gratitude to senator Mitch Mcconnell for all that he did to make this achievement possible. So thank you, mitch. Id also like to give give my appreciation to chairman grassley for conducting such a fair and professional confirmation. Senator grassley. Where is senator grassley . Thank you. Thank you. Thank you, senator. Finally, a profound thank you to Louise Gorsuch and to all of the gorsuch family. Thank you. And louise, ive heard it firsthand, i know what a total inspiration you are to your husband and to your entire family, so thank you very much. Fantastic. Thank you very much. We are here to celebrate history, the taking of the judicial oath by the newest member of the United States Supreme Court, neil gorsuch. Justice gorsuch, i just want do congratulate you and your entire family. Its something so special. In fact ive always heard that the most important thing that a president of the United States does is appoint people, hopefully great people like this appointment, to the United States Supreme Court. And i can say this is a great honor. And i got it done in the first 100 days. Thats even nice. You think thats easy. This ceremony has special meaning as Justice Gorsuch is filling the seat of one of the greatest Supreme Court judges in american history. And that is antonin scalia, who is a terrific, was aer it risk jud terrific judge and terrific person. Justice scalia was a patriot who revered our constitution. He was beloved by many, very many, who are here today and he is deeply missed by all of us. I want to at this time recognize his incredible wife, maureen, who i got to know very well over the last short period of time. And maureen, please stand up. Thank you very much. Thank you and your family. Thank you. Americans are blessed to have in neil gorsuch a man who will likewise be a defevoted servant ever the law. Over the past two months, the American People have gotten to know, respect and truly admire our newest member of the United States Supreme Court. In Justice Gorsuch, they see a man of great and unquestioned integrity. They see a man of unmatched qualifications and most of all, and most importantly, they see a man who is deeply faithful to the constitution of the United States. He will decide cases based not on his personal preferences, but based on a fair and objective reading of the law. Today we have all three branches of government represented at this event. It is a very special thing and a very is special happening. And its worth taking just a minute to remember what it all means. In our founders incredible wisdom, they gave each branch of government a different role in our great republic. We have a congress to write the laws on behalf of the people. We have a president to enforce those laws and defend our nation. And we have a Supreme Court to apply and interpret the law in a fair and impartial manner when disagreements arise. Founders separated power because they knew it was the best way to protect our citizens and keep our constitution secure. Justice gorsuch, you are now entrusted with the sacred duty of defending our constitution. Our country is counting on you to be wise, impartial and fair, to serve under our laws, not over them, and to safe guaguard right of the people to govern their own affairs. I have no doubt you will rise to the occasion and that the decisions you will make will not only protect our constitution today, but for many generations of americans to come. In just a moment, Justice Gorsuch will be sworn in by Justice Kennedy, a great man of outstanding accomplishment. Throughout his nearly 30 years on the Supreme Court, Justice Kennedy has been praised by all for his dedicated and dignified service. We owe him an enormous debt of gratitude. And i am honored that he is with us today. Is this is a very, very special moment because main years ago a young neil gorsuch started his legal career as a law clerk to Justice Kennedy. You remember that, right . It is a fitting testament to Justice Kennedys impact that upon giving the oath to Justice Gorsuch, he will become the first ever Supreme Court justice to serve with one of his former law clerks. Thats sort of a big deal, isnt it . I sort of like that. That is sort of good. It has never happened before. Thats pretty good. Also shows you have a lot of respect for this man. Very good. Were thrilled to share this historic moment with Justice Kennedy, with all of you here today, and with all americans watching us at home. Justice gf Justice Gorsuch, i again cko congratulate you and your entire family and i wish gods bless g blessingings a your amazing journey ahead. I have no doubt you will go down as one of the truly great justices in the history of the United States Supreme Court. I now invite Justice Kennedy to say a few worsew words. Thank you very much. Thank you, mr. President. Mr. Chief justice, Justice Gorsuch, and my fellow adherence to the idea and the reality of the rule of law, are as many of you know, there are two oaths that a member of the federal judiciary must take. The first is the kons tauconsti oath that applies to all three branches of the government. The second oath is one that applies just to federal judges. Both of the oaths date from the founding of the republic. The judicial oath dates from 1789. And both of these oaths remind us that we as a people are bound together, we as a people find our self definition, our respect, our heritage and our destiny in the constitution. And so Justice Gorsuch, there is one oath remaining for you to take, the judicial oath, before you may receive and accept your commission from the president of the United States. Are you ready, Justice Gorsuch, to take the oath . Are you ready to take the oath, Justice Gorsuch . Please raise your right hand and repeat after me. I neil m. Gorsuch do solemnly swear i do neil m. Gorsuch do sorry legally swear. That i willed a mind sister Justice Without respect to persons. I will administer justice. And do equal right to the poor and rich. And do equal right to the poosh and the rich. And that i will faithfully and impartially discharge and perform. And that i will faithfully discharge and perform. All the duties inconsume bebts upon me. All the duties incumbent upon me. As social just tes of Supreme Court of the United States. As associate justice of the Supreme Court of the yurnd. Under the constitution and laws of the United States. To help me god. So help me god. Congratulations. [ applaus ] thank you. I see before me so many to whom i owe so much. I know i would not be here today without your friendship and support. Thank you all from the bottom of my heart. I want to thank the president for nominating me and for the great confidence and trust hes repossessed in me. I want to thank the Vice President for his constant encouragement and friendship throughout this process. Its not possible to mention here everyone i should mention. But id be remiss if i didnt thank the president s counsel don mcgahn and the Vice President s counsel and every Single Person in the White House Counsels Office for their tremendous and tireless support. I want to thank kelly ayotte and my day to day team for their humor, for their sage advice, for their faith as we spent months and so many miles trooping together through the senate complex. I want to thank every Single Person and there are so many in the white house and the department of justice who worked through so many late nights and long weeks on my behalf. I want to thank senator mcconnell and senator grassley and their celebrity teams for their support and leadership. And i must thank my former law clerks and my dear friends who gave so much of themselves so selflessly through these last three months. You are dear to me. This is truly your doing. And this is your day. I wish be i could mention each of you by name, but you know who you are and you know your names are etched in my heart forever. This process has reminded me just how outrageously blessed i am, my law clerks and my faenl a family and my frernd frernds. And i hope that i may continue to rely on each of you as i face this new challenge. To the wonderful staff of the tenth circuit,ing i thank you for your faithful service an friendship over so many years. To my new colleagues and the staff of the Supreme Court, thank you for the very warm welcome. I like forward to many happy years together. And i cannot tell you how honored i am to have here today my mentor, Justice Kennedy, administer the judicial oath, a beautiful oath, as he did for me 11 years ago when i became a circuit judge. To the scalia family, i wont ever forget that the seat i inherit today is that of a very, very great man. To my wife, louise, and my daughters emma and bindy, thank you for your perseverance and your patience, your courage and your love. I simply could not have attempted this without you. And to the American People, i am humbled by the trust placed in me today. I will never forget that to whom much is given much will be expected. And i promise you that i will do all my powers permit to be a faithful servant of the constitution and laws of this great nation. Thank you. Neil gorsuch, xwleegs emotio gratitude speaking after he just took the oath from someone he called his men or, Justice Kennedy. That was of course after this morning he took the constitutional oath as President Trump explained and as Justice Kennedy explained. Kayla to y kayla, you couldnt help but think every time senator Mitch Mcconnell was thanked and some of the other senator, what a hardfought battle this was to get Justice Gorsuch confirmed. Reporter and you heard the president thanking several senators, Justice Gorsuch thanking kelly ayotte. It was 73 days from his nomination by the president on january 31st to this day, his swearing in as the 113th Supreme Court justice. Remember, Merrick Garland the nominee by president obama, for more than eight months was left outstanding with no hearing. So this was a relatively quicking turnaround, a commitment that the president had made to his constituents that he would do this in his first 100 days. And he has succeeded in that effect. I imagine that it must have been a surreal moment both for Justice Gorsuch receiving the judicial oath for the second time from Justice Kennedy, of course that happened 11 years ago ghoen when he took his job circuit judge on the 10th Circuit Court of appeals. But for a second time for Justice Kennedy to swear in Justice Gorsuch to the United States Supreme Court, that must have been an incredibly surreal moment for the both of them. Oral arguments for the Supreme Court will begin april 17th, of course their team goes through june. And there are a few contentious cases where Justice Gorsuch now could be the deciding vote. As i understand, hes not allowed to actually vote on the cases unless hes period them, right, unless the Supreme Court decides to rehear certain arguments. So which cases could be heard . There are three specific cases that have been talked about. One is in relation to concealed carry permits. Another is in relation to state Voting Rights and voting restrictions that some critics say hurt minority turnout. And then another one is actually a colorado appeal where some Business Owners are suggesting that they could deny services to gay couples on religious grounds. But of course as you mentioned, Justice Gorsuch would have to have heard those arguments. So depending on exactly what is on the docket from april 17th through june, expect him to weigh in on those. And we know the Supreme Court is on break this week, but they will be at work starting next week. Kayla, be thank you. Also weve learned more details about the ceo meeting that President Trump is holding another one tomorrow. His council of advisers led by Steve Schwartz man and a number of others. 20 ceos cluing gm, ibm, walmart, tesla, black rock and blackstone. So well be watching that on tuesday. When we come back, a cnbc exclusive with steven saphen sa. Dow hanging on to nice gains to start the week, up 72. New action from wells fargo over former executives. The bank announcing new salary dlau bac claw backs. For more, over to hq. Im joined now by the chairman of we allls fargo, ste sanger. So extensive report has come out as sara mentioned. Is it fair to say that the headline takeaway is that the former head of the Community Bank has the most to blame . Well, the root cause of the sales practices issue as determined by the investigation was the excessive sales pressure in Community Bank, excess sif sales goals and failure to escalate the problem appropriately through the structure of the Community Bank. And the leader of the Community Bank is responsible for all that. So certainly that was why she was mentioned so prominently as one of the people involved. John stumpf faced a lot of criticism, too. What was his main short coming . John was not judged to have done anything improper. What john was criticized for, and he would admit this, he acknowledges this, is that he did not press hard enough on carrie for information and to address the issue quickly enough. And he didnt change the leadership of the bank quickly enough when that wasnt getting done. And he underestimated the magnitude of the reputation risk that this involved for wells fargo. So when the reputation damage occurred, as ceo, hes the guy that was in the drivers seat. He didnt just fail to press fast enough, he described her as the best banker in the world. How did i get that perspective so wrong . Well, carrie and john had great regard for carrie based on her long tenure there and her good performance. And i think what he didnt fully appreciate was the degree to which sales goals and the sales culture had become distorted in the more recent years. He was interviewed as part of the process of this investigation and carrie declined to be interviewed on advice of legal council. In john stumpfs interview, did he express remorse . I dont know if remorse would be the right worght words. He certainly accepted his responsibility for his role in the Company Getting the reputational damage that it did. He acknowledged that there are things he should have done faster and more forcefully. And hes apologized to wells fargos customers for not doing more sooner. And we mentioned that john stumpf failed to notice the issues in the leadership of the Community Bank quick enough. That was not something that tim sloan failed do when he became president and ceo. It was pretty quick that tim sloan decided to remove her and end her tenure. Is that why tim sloan comes across in this report as facing significantly less criticism . Tim had very little direct contact with the sales practice issue at all because he was in the wholesale bank, totally different part of wells fargo. And before that, was cfo. So his only direct contact with the Community Bank was during the brief period when he was chief operating officer and carrie reported to him and he quickly decided that he needed to make a change at leadership. As you mentioned, it wasnt his direct responsibility to act based upon the cross selling issues, but it was very clear that he was aware of it and that he had heard complaints long before he acted on that. Could he have been more proactive, could he have acted in a more forward looking way and elevated things to the board himself and are those not the traits you would like to see in your current ceo . We have total kfrd confidenc tim sloan. And i think that is born out by the actions that he has taken since he became ceo, to reorganize the structure of the Risk Organization and Hr Organization is so that it is no so decentralized on things are escalate more quirkil lyquickly. Hes brought in a new general counsel. And so the board is quite pleased with the way tim is leading the change here and leading the organization. And what about the board itself . Youre of course chairman now, but you have been lead independent director through a large part of that scandal. Do you feel personally responsible for any of it . Well, the investigation finding conclusions found that the board acted appropriately based on the information it had. And this is one of the reasons that we wanted to engage sherman and sterling because the board and i wanted an independent objective assessment of how the board performed in this instance. And theirs assessment was that the board did the right things but that the boards information was incomplete all wait up until the release of the settlement, at which time the board immediately initiated the investigation. So weve already said how carrie was found to be wrong doing. She was terminated for cause. The board youre saying didnt have sufficient information. The only link for most of the period between the two in terms of reporting lines was john stumpf. So how is the punishment for him not more severe . John did not create the sales goals in the Community Bank. John did not impede the flow of the information up through the Community Bank. John i think accepted the reports he was getting that the issue was being handled without enough analysis and perhaps digging in to it. But john be was responsible for supervising a lot of different leaders in the company. And so he relied too heavy on what he was learning from the Community Bank, but that is a supervision issue and not a proper behavior issue. To put it another way, he became aware of this from 2012 at least perhaps even earlier, and in the last six years, hes received 286 million in total pay. Hes given up 69 of that recently which is just 24 . It feels like a pretty small amount in total given how closely linked he was to this whole saga. 69 million is i believe the biggest claw back for any individual in Financial Services history. But its relative to 286 million since the scandal started to begin. Well, leets put ct me put co johns performance over the years at wells fargo. During his nine years as ceo, market cap of wells fargo grew by 110 billion. That almost doubled. And so the shareholders benefited greatly from john stumpfs leadership of the whole organization, all the parts of it across that tenure. And i think a 69 million claw back, if you will, is a remarkable show of accountability for someone who has created that much value for share holders. But of course many others hundreds of thousands of employees also contributed to that increase in Market Capital stai ization. And the report makes it clear that the thousands of people in and around that you terminated per year over the last five year tended to be, quote, lower level employees. Were these employees wronged by the company, is there grounds for them to be reinstated or to claim compensation . Well, the employees that were terminated were terminated for misconduct. They were motivated by the prish that the Community Bank organization traded to achieve sales goals. But there were hundreds of thousands of other Community Bank employees who didnt engage in this conduct over that same period of time who felt some of the same pressure. So we definitely had a need to address the root cause of the improper behavior. But at the same time, we have to acknowledge all the wells fargo employees who behaved correctly. And let me find some examples. Monthly motivator reports, it says some people lived and died by those results, that the jump into january sales campaign, quote, was a breeding ground for bad behavior. Many people say that she was scared to death to take these things away because it could hurt the sales figures. Clearly you have fired many, five people in total, for cause because they were forcing these types of actions on lower level employees. Thousands of employees have lost their jobs per month. And yet john stumpf still receives 76 of his 286 million over the last six years. You can see that there is a disconnect there in terms of the actions that youre taking. I think the actions that the board has taken, including a total of 180 million plus in forfeiture of compensation are the greatest in any history of Financial Services. I think the accountability is clearly being expressed. And in terms of just moving around the sort of root causes again of this whole issue, it was clear that the power structure was too decentralized. And i wonder whether the acquisitions of the merger were a part to blame with this issue. Ask. I dont think the size was at the heart of the issue. I think it was instruct. The decentralized model which caused information about risk, information about Human Resources to flow up to the heads of the businesses caused the issues like this not to be visible to senior corporate management. And we changed that. We now have a centralized Risk Organization, we have centralized Human Resource organization, we have an office of ethics integrity and oversight that is specifically tasked with dealing with employee conduct issues and escalating those, including to the board, on a regular basis at least twice a year. So i think would he have addressed the core issues of structure. Forgive me for going back to pay. At the start of 2016, john stumpf exercised a large number of options before the whole scandal was made public. Would you ever been able to claim back more money from him had he not done that . Are we chose to claim back an amount that we thought was appropriate for his role as ceo in the sales practices issue. We could have chosen various sources of that. But what we chose to ask john to forfeit was what we thought was appropriate. So you could have done more than the 28 million if you wanted . About. Well, yes, the koorps could take more or less. We did what the board now the was proept. Appropriate. We have a question from sara. No, no. Maybe we dont. To round things off then, in terms. Cull churks cle culture had a big issue in this. How quickly can you solve an issue like culture, do you feel like the worst is behind you or there is a lot of work still to be dwuone . There are a lot of things to like about wells fargo culture. Their credit culture is known to be good and conservative and that is how the company got through the Financial Services scandal in such good shape. So its not a corporate wide culture that were really dealing with. It was a culture that sales orientation, excessive sales or yen tags in t orientation nlts Community Bank. So you change the leadership and compensation system which has been done and third you change instruct which causes issues to be reported much more quickly to Senior Management which has also been done. So we wont say this is done, we will monday, to measure and make sure that in fact weve achieved what we want to achieve. Steve, thank you very much for your time. We appreciate it. Steve sanger, chairman of we also fwells fargo. Great conversation. And reuters actually just getting a statement from the attorneys of the former Retail Banking head whom they blame a lot of these phony account scandals on, from her lawyers, we strongly deposit agree with the report and its attempt to lay blame with her. A full and fair examination of the facts will produce a different conclusion. It does seem remarkable to me the way great job by the way asking questions so many different angles. But to lay the blame completely pretty. At the feet of Carrie Tolstedt despite the fact that the stumpf resisted calls to let her go. If the problem here was high standards paired with low oversight, that seems to have been the problem with tolstedt and certainly also with stumpf. So interesting to see what they have to say further and what further investigations might reveal. Yeah, interesting delineation in the responsibility here. On the one hand staying stumpf accepted the blame for reputational damage. Bringing up market cap under stumpfs tenure of course once again which he made a good point of saying was not due to stumpf alone, but the thousands of employees who worked for him layers below. I think the question will be ahead of the shareholder vote, which they have a meeting at the end of april, april 25th, i think, and shareholder advising proxy firm recommending that investors vote against some of the board members, including the man you just heard. Mr. Sanger position. Wil position. Will the investors exonerate the board. We will see. So many ways for a ceo to have a finger on the pulgs ofsen organization. So to plead ignorance or just somebody beneath me in the organization didnt give me the information, i dont know, its harder now than it was a few years ago, thats for sure. Still to come, fallout from last weeks meeting between President Trump and xi jinping as secretary of state tillerson heads to moscow. Impact on the markets and your investments next. And later, extreme case of ag n gender pay discrimination. The company is fighting back. Ht. burke at farmers, weve seen almost everything, so we know how to cover almost anything. Even a coupe soup. [woman] so beautiful. [man] beautiful just like you. [woman] oh, why thank you. [burke] and we covered it, november sixth, twothousandnine. Talk to farmers. We know a thing or two because weve seen a thing or two. We are farmers. Bumpadum, bumbumbumbum ask. Secretary of state tillerson heading to moscow, his first kip l diplomatic trip to russia after President Trumps sitdown with xi jinping last week. Part of are an emerging white house Foreign Policy with major implications especially in terms of trade and taxes. For more were joined by fred pence as well as hans tong who invests a lot in asia. Gentlemen, welcome. So fred, after last week, what do we make of the president s policy, Foreign Policy, Going Forward . How much more unpredictable has it become . Its become more predictable actually. I just watched your segment on we also far llls fargo and wer the development of the policy of the worlds most important chief executive officer and that is donald trump and he scored three big points last week and that is not even mentioning the confirmation of the Supreme Court justice. One was the relegation of steve bannon for anyone trading a stock price called the United States, that gives a little bit more certainty to the policy execution. Number two was the strikes on syria which were measured, which were proportionate, which showed a leader willing to use force to gain more leverage on the global battle field, but was not going to overdo it. And then the chinese meeting, you couldnt ha have had a lot fireworks there, but instead people walked away, they put 100 day plan in place to change the trade relationship. Wilbur ross commerce secretary said the two things that have to come out of there are more expoue exports to china and more trade in general. But the language was very untrumpian. It was very diplomatic, it was talking about the chemistry that they formed despite the fact that he didnt really get what he wanted. So this is a very different president and trump ol gi is a flawed science. Well have to see how it plays out with Rex Tillerson in moscow. A good summary of everything and clearly youre encouraged by what youre seeing. Hans, what about you as a venture investor, what did you see between President Trump and president xi and were you encouraged . We invest a lot in about both the u. S. And Chinese Market so care quite a bit of how this meeting would go and obviously were also happy that the gathering went pretty smoothly. From chinas perspective, people watching whether xi would give up anything concrete to President Trump and that wasnt done. Yet at moss fire wthe atmospher willingness to explore each others differences. So i think that is a meeting that went well. So hans oig, i, what is yourn triangulating between what President Trump says or has said and what hes likely do. Because his language about china during the Campaign Stands in stark contrast and even right before the meeting saying it was going to be a very difficult meeting. His language changed immediately once the meeting actually started. So how much of this is talk and how do you think its likely to apply ou play out . I dont think people give enough dro enough credit to President Trumps negotiation style. He starts out hash and tones it down to get to a compromise solution that he can live with and take to his people and he will make the other are side have a chance to gain something out of it, as well. And same thing for china. There is a lot of talk about tariff, about Currency Exchange rate before the election and you can see that over the last couple months especially heading into this meeting that has toned down. And in this meeting i think they got to know each other better as to what each other bottom line will be and what each other thans negotiating style will be. So very construction difference for the next four years. What happens now if thediffe for the next four years. What happens now if the air strikes in about syria continue from bashar al assad, if he uses chemical weapons again, how does the Administration Keep this op is org bly, what the markets education pecht and hope it will be. One sure thing on china and then syria. The sure thing on shichina is w have a short fuse. 100 days is a short time to do a trade deal of any sort. Watch for financials sfs. Those seem to be the places were hearing there might be some export movement soon, maybe wfr before theyre next meeting. Then on syria, if this is a onetime deal, then you could see trump losing a lot of crede b b lty quickly. He said hes going to strike against chemical weapons. But syrias assad has killed most of his people through barrel bombs and other kinds of bombs and the city to watch right now is id lib. Assad will want to show hes not a coward, hell want to move ahead. Obviously, he doesnt want to go down the slippery slope of military engagement, iraq and afghanistan. Now that heshown muscle, he haso show thats stopping the refugees destabilizing europe. Well see what happens wednesday. Weal lea well leave it there. Thank you, fred and hans. When we return, is google under paying female employees . Cara, walter are going to weigh many. Take a look at the markets. We lost our gains briefly. Dows up 14 and s p up one and a half. Half. At fidelity, trades are now just 4. 95. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. 21st century fox said it will investigate an accusation of sexu harassment against fox news bill oreilly. Let bring in cara and walter isaacson, former chairman and ceo of cnn. Walter, start with you as a former head of a news network. Since megayn kellys departure o nbc, bill oreilly and sean hannity very important to foxs nighttime lineup. How important is it for thx to this right . Im sure theyll try to get it right, thats why they need an independent investigation. These are all very murky ags allegations, but they have a certain pattern to them. So you hire an outside investigation ghaith and figure it out. This is not figuring out your prime time lineup. This is about getting a law firm and some rep tabl people just the way uber did. We talk ed about uber doing on outside investigation. You need reliable, trustworthy outsider to say this is right, this is wrong. Cara, from you, foxs viewer base, very supportive of bill oreilly, including the president of the United States. Whats the impact of this of the landscape the way you see it . I think theyre more popular in ever with the group of people that are going to dig in. Thats how theyve made their way for years now, is that theyre being attacked, this is a siege. The its constant you know, fear and loathing kind of network. In this case, i dont think theyre, i mean, talk about a pattern. Like it started with roger ales. Its been going on for years i think the question is how much credible thety does an investigation have. Are they really going to go after their biggest star . Are, is Rupert Murdoch going to pull the plug on him . Theyll do Something Like mistakes were made, who knows and move on. Just like glenn beck, eventually, hell move on fail find other star, but i think theyll protect him in this situation because you know, after all these years and da ths of this behavior, they didnt do anything. Why are they suddenly going to become good at it now. Walter, you u ran a Cable Network for a while. A lot of people trying to do the math on advertiser, how much his show brings in. Will the accountants say its not worth sticking with . Absolutely. T not just about viewership. Its about the cpms, the cost you get for your advertising. And people now a adays want to and we see this with google and youtube and facebook and everything else. They want to make sure their ads are next to reliable, smart, and decent content. This is a very trend. That brings us to our next headline. Government investigators are looking into how google pays its employees. Theyre accused of quote system disparities against women at the company. Kara, youve covered google for a long time. Several different tiers enincluding engineering. Do you feel from the limited information we have, the governments got all the information they need to make this claim or might there be more to it . I think its going to be very complicated, how people paid. Google has a particularly complicated system. The issue is, theres not enough women in the highest paying jobs is probably skewing a lot of this. Look at the numbers that come out of google. Not just google. All companies in tech. The engineers are the highly paid people there are men and youre going to get that issue because theres not enough women in the highest paying positions. This is a data question and well see what happens throughout the data, but i dont think its just a google problem. Its a problem throughout tech. Erica joy, i chemical attacked her this morning. Had put out if you remember, many years ago, she works at slack now. She put up a spread sheet where people were putting in the salary data and it was showing what we taught, that women and people of color get paid less. I think the question is what can google and other companies do about this. I think pay gap is an ib across the spectrum. But in this case, so many of the heist paying jobs are held by men. Its not a terrific surprise youre going to see this. The question of what youre going to go about it. Walter, i dont mean to surprise you, but im looking at the list of board of directors at united. Youre on it. Got any thoughts about what theyre going through today . No, i dont think, as you know, board of directors shouldnt be commenting on management like that. I would say because kara has been at the forefront of this, theres to he also a pipeline issue when it comes the women in technology. In 1984, i think it was 37 of Computer Science majors were women. Now, its down to 18 . If you look at it now, you know, 25 of women are you know,down to 12 being engineers. Were going in the wrong direction. Even on ap tests. Women students in high school, take more than half the ap te tests, there are only 20 taking the Computer Science ap test. Its a longterm problem. It is and doesnt help when youve got headlines and leaders treat women the way they do in some of these organizations. Thanks for joining us. Thank you. Follow that, dows up ten. Over to headquarters and the half. Welcome to the halftime report. Top trade this hour, the note heard around wall street. While Morgan Stanley says stocks are being turbo charged. With us, joe, steven, josh brown and live from toronto today, kevin oleary, the chairman of o shares etfs. Begin with the call. The s p 500 could have anoth