hi, everybody, welcome to "the wall street journal report." i'm maria bartiromo. bank on it. earning seasons underway, what does it mean for the markets and yo money? president obama's economic message and tax proposal, does it go far enough, will it happen, and what could it mean to you? and the fastest-moving sport around, stars, speed, and spon shoreships with the ceo of nascar. "the wall street journal report" begins right now. this is america's number one financial news program, "the wall street journal report." now, maria bartiromo. here's a look at what's making news as we head into a new week on wall street. jpmorgan chased released earnings numbers on friday.

according to chairman and ceo jamie dimon, those losses are now pegged at $4.4 billion. the company is cutting its income by $459 million but in the second quarter did earn $4.96 billion, and that was ahead of analysts expectations. taking back salary and bonuses for those involved in supervising that trade. jpmorgan chase says its balance sheet remains strong. it called it a fort rous balance sheet. the federal reserves open market committee released the minutes of its june meeting this week and did not shed light on possible moves in terms of stimulus. policy makers agree they might need to take more action if the u.s. economy loses momentum, but

there were few hints about more quantitative easing, which disappointed the markets. and united airlines set to buy 150 new jets made by boeing. the planes will be delivered beginning next year. another earnings season is here. will it lead to a summertime swoon or sweet surprise for the markets? joining me now is jack ablin. jack, nice to have you on the program, welcome. >> thanks, maria. >> let's talk earnings here, the season is underway for the second quarter. the mood seems fairly pessimistic, what are your expect taxs for earnings? >> analysts expectations as a whole are calling for about negative 2% earnings decline this quarter, first quarter, about 16 we're seeing losses, mostly on the back of big declines in commodity prices, so at least going into this quarter, expectations are pretty low. >> expectations are low and i

think they are still coming down. do you think the earnings estimates are going to continue coming down for the rest of the year? >> i think they will, because expectations for the rest of the year are ratcheting. still, i think, third and fourth quarter in the mid single digits and double digits for the fourth quarter, so i think analysts are likely to ratchet their expectations lower for the second half of the year. >> what happened that things really turned so negative the last two months, unemployment numbers have been horrible. it seems we have really entered a weak spot in this economy these last two or three months. >> yeah, i think a lot of it has to do with the doldrums abroad, you know, for the longest time we were looking at a lot of these headlines from europe and a lot of the issues from china and while we were reading them in the paper and, yeah, we were buffeting our stock market, for the most part, we were kind of viewing them as spectators, but then we started to notice that they were beginning to impact

earnings, particularly first in the commodity front and then we're starting to see it in the earnings front. >> when you look at some of the multinational companies and how they are reporting their asia sales, they are taking a hit on china. we have the gdp report on china friday, it showed growth of 7.6%. man, we'd love to see that in this country, but it's still the slowest pace in three years in china, how important is that to america's america, particularly given the trouble you referred to in europe? >> it is vitally important, maria, and as china starts to shift from capital investment, that building and infrastructure that they've been doing toward household consumption, you're going to see that economy naturally slow. now, in the long term, i'd certainly rather sell them ipads and kentucky fried chicken than, say, copper, but i will say that's going to be a slowing trend and we're going to have to deal with that as well. >> were you surprised on friday that jpmorgan reports earnings,

and we're talking that huge trading loss and the stock rallies and takes the whole market up? >> i will say, you know, they are great at managing expectations that novi expectations, and jamie dimon said it's a lot of money, but we are going to beat our year-end targets and investors are going to take that to the bank. >> we've got concerns about europe, concerns about the fiscal cliff, tax uncertainty, the debt ceiling, i'm having a deja vu of last summer. >> the debates going on are really the debt and deficit and congress just seems to be on the wrong track, and i think there are some members of congress that get it and they are using the debt debate and the ceiling as trying to steer congress in a completely other direction and while i certainly understand the

frustration of the american people and everybody else, i think it's going to take turning this battleship a huge direction, and perhaps it is going to take a crisis to get this country to change. >> what about the fed meeting? we had the minutes released from the federal reserve meeting this week, a few members said more stimulus is probably needed. do you think we'll see more quantitative easing from the fed and how effective will that be beings rates are already at rock-bottom levels. >> i view it as three phases of addressing the problem, first is the rhetoric phase, a lot of jawboning and gum flapping, i'd say the markets shrugged that off. the next phase is monetary policy. certainly, we've had a lot of that with zero interest rated and quantitative easing, markets are shrugging that off too. the next phase is policy. we need to see some action, we want it in europe, want it here.

we haven't seen much yet. >> what advice for investors, should investors be changing their asset allocation here amidst the uncertainty? >> expectations are terribly low, and as long as the stock market is a reflection of reality meeting expectations, i like very low expectations, so that's a good sign. we have very low hurdles to meet. meanwhile, though, i would rather get my yield from conservative areas like master limited partnerships and preferred stock rather than going out on a limb with small caps and things like that, and within the sector space, i would go with conservative, i like tele com, health care, utilities. stay conservative within your allocation. >> thank you, jack. up next on "the wall street journal report," your money, your vote. the two different economies and what the president's recent announcement on tax cuts means

for you. later, taking a spin with nascar, what the billions in car racing business means for sponsors, fans, and the drivers around the track. as we take a break, look at the stock market and how it ended the week. back in a moment. [ male announcer ] this... is the at&t network. a living, breathing intelligence teaching data how to do more for business. [ beeping ] in here, data knows what to do. because the network finds it and tailors it across all the right points, automating all the right actions, to bring all the right results. [ whirring and beeping ] it's the at&t network -- doing more with data to help business do more for customers. ♪ focus lolo, focust sanya let's do this

i am from baltimore south carolina... bloomington, california... austin, texas... we are all here to represent the country we love this is for everyone back home it's go time. across america, we're all committed to team usa. trick question. i love everything about this country! including prilosec otc. you know one pill each morning treats your frequent heartburn so you can enjoy all this great land of ours has to offer like demolition derbies. and drive thru weddings. so if you're one of those people who gets heartburn and then treats day after day, block the acid with prilosec otc and don't get heartburn in the first place. [ male announcer ] one pill each morning. 24 hours. zero heartburn. and so too is the summer event.

now get an incredible offer on the powerful, efficient c250 sport sedan with an agility control sport-tuned suspension. but hurry before this opportunity...disappears. ♪ the mercedes-benz summer event ends july 31st. ♪ putting the economy front and center in this election year. this week, president obama announced his plan to extend the bush tax cuts for one year for those making $250,000 of taxable income or less. his republican opponent, mitt romney, supporting a permanent extension for all income brackets, due to expire, of course, at the end of the year.

andrea mitchell, andrea, great to have you on the program. >> thank you, great to be with you. >> what's your take on this tax plan and the -- is it realistic in terms of economic policy, do you think? >> i don't think it's economic policy. i think this is all about politics, the white house, the obama campaign, really want to have this issue, they want to frame this as we are trying to protect the middle class and mitt romney is trying to protect the millionaires and up. there is some division, though, in democratic ranks, there are some democrats, some senators such as claire mccastal afraid to take this on, chuck schumer, in fact, from new york saying cutting it off at $250,000 is not the right cutoff, it should be at the $1 million level, yet the campaign thinks they are on very firm ground here. >> i guess the issue is, as we all know, business creates jobs, not government, so when you make an environment tougher for business or the higher earners, they are not going to create the

jobs that you would like to see, so i'm wondering if this is actually an ideology, as you said, politics, and actually poor economic policy. >> i think neither side thinks that this is going to be passed, so they think there's going to be some sort of a big grand bargain after the election no matter who gets elected, there's going to be some negotiation to avoid the fiscal cliff and what they do now is all positioning posturing, so i don't think they are viewing this in the context of serious economic policy. at the same time, the argument from the obama team is that they are exempting everyone but 3%, 2% to 3% of small business owners and that the small business owners who are affected are really lawyers and others in limited partnerships who are not really the job creators. the obama -- the romney camp, as you very well know, are arguing that the bulk of the job creation is among this 3%.

>> this fiscal cliff issue really is a big one, i want to get your take on it, because we are really not hearing enough conversation out of our leadership in this country about the fiscal cliff. the end of the year, not just the tax cuts that expire, we got spending programs that are expiring as well. >> and the debt ceiling. >> and that's going to force some companies, a number of industries, defense certainly comes to mind, to fire workers, to be forced to actually cut jobs because they don't have the federal dollars from those spending programs. why is it? i recognize this is really a hostile situation, they don't want to come to an agreement on anything, but they are leaving people out there hanging in the balance, why is it we're not hearing any conversation about the fiscal cliff at year end? you know we're not going to get an agreement before election, right, do you think we'll get an agreement before election? >> absolutely not. and what's happening now behind the scenes is you have democrats and republicans, particularly because of the defense cuts that would be automatic and would be triggered, so to avoid that, you

have people like john mccain and lindsey graham and john kerry, these leaders from foreign policy and armed services getting together and talking about taxes. they are talking about tax increases to avoid the defense cuts, but they are doing it very, very quietly. there's a lot of deniability built into this, but i think that you're seeing senate negotiations with everything looking towards the fact that this will not take place until after the election. >> yeah, we really need leadership to bring us together. it's just outrageous. the money raised, governor romney and the republican party have raised more money than the president for the last two months in a row. do you think this is a sign the obama reelection campaign is in trouble? the other day someone said he was in a free fall. >> i don't think he's in a free fall, but i do think they are seriously concerned. they have built-in advantages, that big blue and white plane, and when they travel around the country, they get a lot of attention. a lot of attention locally in local media markets, at the same time, they were outraised $106 million to $71 million in the

last filings, and that's a big deal, and that does indicate that mitt romney, he knows how to raise money. that was his business in private equity. he's really very good when he's dialing dollars, they are getting a response, and they are getting a response from the business, financial sectors, banking sectors, from the very people on wall street who are still contributes to hedge their bets to the obama campaign, but not enthusiastically and not as vigorously as they are to the romney camp. >> it's interesting, i was reading a piece just the other day and it basically said governor romney is getting much of his money from wall street, the group that president obama has been vilifying these last four years, and yet when you look at the numbers for the president, 15% of his donors are also from finance, that's not a small number either. >> but not nearly as much as mitt romney is getting. now, what the obama campaign is very good at doing is small donors and building that base and they can keep going back to those people whereas some of the romney folks have maxed out, but

at the same time with all these super pacs and other outside groups that are able to raise unlimited money and not even have to disclose who the contributors are, you have a whole different ball game. >> you do, what an election this will be, andrea, talk to you soon, thanks so much for joining us. andrea mitchell joining us. up next on wrea"the wall st journal report," talking about the big business around the racetrack. look for us on facebook. check out wsjr with maria. back in a moment.

. welcome back. nascar is the fast-moving sport with the big tie to corporate america. more fortune 500 companies are involved in its events and athletes than any other professional sport. brian france, ceo of nascar and grandson of the founder. good to see you. >> good to be here. >> i love these cars, but let me ask you about corporate sponsorship first. it can cost millions of dollars for teams, for races, why is it so popular for american companies, do you think? >> it's the only place your brand can be part of the action, you're not just a billboard in the stadium, it's your car, your team. it's unique, you marry that with 75 million fans that identify themselves as nascar fans, that's a great combination. >> 75 million fans, that's quite a number.

who's your fan base today? >> our fan base is pretty broad, we have a nice young demo, but 18 to 35 is strong for us and getting better. >> what are they spending more money on, would you say, tickets, licensed products, your attendance is down a bit from the heights of a few years ago, but is this an affordable, spectacular sport for families? >> it is, but on the other hand, our fans drive further, they stay longer, it costs more in that respect, so the economy, fuel prices will effect us disproportionate to other sports and that's something we're, obviously, wrestling with with a tough economy. >> people follow the stars big time. you have the stars and earnings power of some of your best known drivers, danica patrick recently moved full-time to the nascar race series, what's that meant to her career? >> she's brought a lot to us, we've brought a lot to her. she's getting better every week and it's nice to see her in nascar.

>> you see more women in the sport these days? >> well, we do. we've tended to be gender neutral in terms of our fan base. lots of families taey ies atten come and make vacations about it. our drivers will have kids in victory lane almost every time, so it's always been a family sport. we're real proud of that. >> let's talk about these cars, i'd like to take a stroll around and look what we got here. these are all sponsorships. m&ms, exxon mobil. >> these are the cars that run on sunday. this is the championship car tony stewart drove. >> wow, look at that. >> we'll be putting more technology in these cars as we go along. obviously, lock and step with four car manufacturers and we're real proud to have their support and activation and financial support. >> it's so fantastic. i just want to take a look around here, because this car, there's nothing in it except this seat and it looks like an

engine in here. this is pretty extraordinary, look how small this seat is. >> you want to be real compact in the car in case of an accident, it runs on american ethanol, biofuel made here in the u.s. >> you just mentioned ethanol. i want to ask you about that, what else is in line for nascar in terms of environmentally? >> we've taken a number of green steps that the industry has rallied around, solar-powered speedway, power a region in pennsylvania. we're the largest recycled in all of sports, we're the great validater when you really think of us, particularly in the fuel area, technologies with what we demand out of these cars week in and week out, we're just a natural place where technology companies, new biofuels, to get validated. >> absolutely, i want to ask you more about technology, this is a championship car, what about this one here, the official soft

drink of nascar all more sponsor, coca-cola, this is a good-looking car too. >> it is, and coke has been one of our great brands in nascar, they activate all over the place in such a significant way. they are just a great partner for us. >> technology you mentioned a moment ago, what do you need to do at nascar to continue to advance in terms of technology? i thought it was really interesting that a driver recently tweeted from a racetrack fire. >> yes, social media, we've embraced that. we announced our relationship with twitter, our drivers are really into it. you're going to see more technology in the car. we're going to have a glass dashboard where there's going to be all kinds of data that's going to go back and forth over time with our fan base. >> it's interesting to see that glass technology in the car, because that's really giving the driver information as he's actually on the course. >> that's what's going to happen in your passenger car, it's going to look much like an

airplane, you're going to put your itunes where you want, your speedometer where you want. that's the future of technology, and we're going to be part of it leading the way. >> itunes, as they are driving 250 miles an hour they are listening to music? >> i don't think we'll let them do that. >> thank you so much for joining us today. >> glad to be here. >> brian france joining us. up next on the "the wall street journal report," the news this week. what happens when bankers and world class athletes collide? back in a moment. metamucil uses super hard working psyllium fiber, which gels to remove unsexy waste and reduce cholesterol. taking psyllium fiber won't make you a model but you should feel a little more super. metamucil. down with cholesterol.

. check out the website, wsjr.cnbc.com. i hope you'll follow me on twitter and google plus. now look at the stories coming up in the week ahead. a slew of second quarter earnings reports are due out from banks, goldman sachs, and stanley. google, intell, microsoft, and ge. monday total retail sales for the last month are out and tuesday, ben bernanke will appear before the senate banking committee and the inflation indicator also out, consumer price index also out on tuesday. wednesday, we find out how many new homes began construction next month and thursday realtors report the number of existing homes that have been sold for the month. finally, goldman sachs releasing an economic forecast

this week on the upcoming summer games. analysts use models such as gdp growth, human capital, political stability, and previous athletic performance to predict country-by-country medal counts. the bank forecasting host country great britain will win 30 gold medals, a significant increase from the 2008 haul. that will do it for today. thank you so much for joining me. next week, a look inside new york central park, green space making green. each week keep it right here where wall street meets main street. have a great week, everybody, see you next weekend. ♪ ♪ i want to go ♪ i want to win [ breathes deeply ] ♪ this is where the dream begins ♪ ♪ i want to grow ♪ i want to try ♪ i can almost touch the sky [ male announcer ] even the planet has an olympic dream.

dow is proud to support that dream by helping provide greener, more sustainable solutions from the olympic village to the stadium. solutionism. the new optimism.™ ♪ this dream