monday. have a great super bowl weekend. trish regan is next. good night from new york. special live coverage following the president's state of the union. maria's wall street is next. ♪ ♪. maria: happy super bowl weekend everybody. welcome to our program i'm burnt maria coming up in just a few moments my sitdown interview with goldman sachs and david solomon on business in 2020. and then my amateur view with growth in the global market, allocating capital today. first let's talk earnings. apple's record-breaking quarter relisted its highest revenue ever is $8 billion as last week boosted by iphone with failed sales leading up

the holidays. that apple user base has reached one and a half billion people. joining me right now is a founding pound or dan niles who has been spot on and apple all these years. good to see you. thanks much for joining us for it i want to get your take on apple and i know you have been investing around apple. i think it's really important point that our viewers are gonna want to see. what is your reaction to the quarter? you look at the surface on the numbers and they put up 9% revenue growth. they put up 19% earning growth year-over-year. so on the surface you say wow that's fantastic. but when you look a little deeper, the problem i have with apple is really the same problem i have with the market at this level. you look at the overall stock market the s&p was up 29% but earnings were up 1%. if you look at capital the stock was up 86% last year but the earnings barely grew.

so when you look at the price to earnings ratio on apple it's trading at about 24 times the next 12 months earnings. usually it trades at a discount of the s&p. the s&p is trading at 19 times. it's not necessarily a bad thing but you're saying their services business which apple has been focused on. the phones or platform to sell all of these services on top of it like booktv. you miss the services number by $350 million. the growth went from growing 20% a year ago in december, 1019% last quarter -- i'm sorry 19 year ago 18 most recent quarter in september. and decelerated to 17% growth. so you're saying wait a minute. i should not be saying a 24 multiple when the business you're telling me i'm investing and is actually slowing down. so that is part of the issue. so you look at it you say i

found beat revenues but all the other businesses missed by about a billion and a half. the wearables piece which is the airport's and watches et cetera. that just came deadline which is just great, but it was not the upside many people were looking for. i'm sure the stock will be up today but it 24 pe, there's a lot of nays and hardware that sell into apple that sell a lot better and are trading in multiples of the midteens. maria: 's of the multiple today at 24 is the same multiple we saw back when i phones were first coming out right? >> you are exactly right, maria, 2010, this is where the evaluations were back to 24 times. you go back to 2010, you were recovering from the global financial crisis. and as you pointed out the iphone came out into thousand and seven. smart phone still growing over 50% a year. the ipad was just launched in 2010. so the company was growing incredibly fast so it deserved

to trade at 24 multiple. today you look at it, you go there i found revenue, which is more than half the revenue of the company, for the past four quarters, before this most recent one, was down 13% on average for four quarters. this quarter it went up and it's up about 8% year-over-year. it's great that is growing, but for the last year wasn't. by the way the whole industry has not grown for two years in terms of smart phone units. sell about 5 billion people on the planet have a cell thorn 4 billion are smart phones. maria: this is really incredible analysis. the second of the companies that sell into apple you like lou meant to him. tell me about that right now, what is that symbol.

that's a stock trading and much lower multiple. the symbol is lit, what they do on your iphone, when you hold it up and it scans your face is called face id, they provide the lasers that make that possible if you look at lament times september quarter because that's the last ami have, they had revenues to apple over 25%. and this goes into the iphone. there revenue to apple was estimated up over 30%. apple's iphone revenues so if you do apples to apples comparison, was down about 9%. so they are going there avenues down from 30 and apple is down from nine. because they're adding features to the phone. what gets very interesting and this is one of the themes on focused on commas bill gates has this thing work technologies are over hyped near-term and under hyped long-term. so if you look at augmented reality, that something tim cook brought up in 2016 he said i believe a significant portion of the population in

all countries will have an augmented reality experience every day. almost like eating three meals. obviously that is not the case and its 2020. what they're gonna do in this next year in the fourth quarter as they are going to launch phones with 3d sensing on the back of your phone. so company like this is adding another chip to the iphone, there revenue to apple can be a 50 to 60% even if apple doesn't sell anymore iphones and they sold the year before. maria: i love this idea and you own this. you have been nibbling on chinese companies. tell me about that in the face of this coronavirus. >> the good news was over a week ago we went ahead and said this doesn't make sense no one is discounting this virus. we shorted a lot of chinese related nays that were sitting in taiwan and china et cetera. obviously the market started to focus on it. and starting friday and into monday we started nibbling because here's what's going

on. now, you've got i think the last count 50 million people locked up in cities and they can't move around. so what are you doing if you are afraid to gather in public places as well? you are going online, you're playing video games, you are watching movies you are having stuff shipped to you because you don't want to go to the mall. >> so then let's look at china. >> the ticker is iq, they are considered the netflix of china. they have over half a billion users on that platform. and what was interesting is on monday as you remember when the market was getting killed and every chinese was getting pummeled, iq was actually up at that day. which i found very interesting. i think yesterday 10 cents, which is a big gaming platform in china, they came out and were apologizing because so many people were trying to play videos online at crash

the servers. that's another when i felt very good about buying because i look at that one, we bought a little bit of a net ease which is another gaming platform there. and allie baba, we bought some that is the smallest because they need people to deliver the packages to your door. but again people are going to be having packages sent to them versus going out into a mall to buy them. maria: doesn't bother you they don't follow -- they don't follow our world? >> that's when it's so low. the accounting rules that they have, they don't follow the ones i wish they would. which is nice that you can buy them at a very big discount. the bigger picture, in the u.s. 95% of the population is online. in china, that number is 65%. that's 850 million people which is more than the internet users in the u.s. and europe combined. maria: the numbers are mind

boggling. >> you're talking about a billion three people. you've got a long runway for growth there. we like some u.s. stocks we own some face but they are going to do very well this next year. that is growing top line at 20%. and you can buy for cheaper valuation than apple which is growing top line this last quarter and 9%. facebook is growing that for i don't even know how many years. for us we are looking at some of those nays and saying those are better risk rewards than an apple which is in our opinion very richly valued welcome to its growth. maria: we appreciate your incredible insights, thank you. maria: coming up goldman sachs maria: coming up goldman sachs ceo is my money should work as hard as i do. that's why i use my freedom unlimited card every time i get gas. give me a little slack! with freedom unlimited, you're always earning.

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sachs david solomon is expecting economic growth to be between three and three and half% in 2020. at the world economics foreman dava switzerland this week i spoke to the ceo of goldman and we talked about digital banking to investing in the year ahead. here's what he said. >> the business climate feels really good because the economy is pretty good. as you look at 2020, it's a chance of economic slowdown around the world and 2020. i think it is underpinned by a very strong u.s. economy. consumers doing very well. the industrial manufacturing sector a little bit softer, but there is no question the consumers making up for it. and so i think we should see the world grow at 339 have% this year end barring from any event that would materially change his sentiments, i have a relatively confidence that it the economy is constructive. i hear from ceos as i'm getting around here and really engaging with people. they're talking about their

plans for the year ahead. i'm getting a relatively confident message. maria: asset management had a real shakeup when we saw commissions go to zero. and then you have schwab in ameritrade merging and vanguard really competitive and zero commissions. what's the impact on asset management? >> we have one of the three largest active asset management platforms and it's really an advice driven business. our clients, largely institutional clients, hire us to give them advice on how to manage pensions, institutional assets, and the wealth management business that feeds assets into that asset management business. but we think our asset management business is positioned to grow based on the value add that it brings to our clients. if we perform relatively well it will continue to grow. we are not in the passive business, and obviously we are not in that business.

maria: it is a competitive situation. >> we run an active platform and if you look at the assets, the few based assets that we have acquired of the last years, we have grown them at a faster pace than the other active asset managers that we are against. maria: it was a big deal when you pivoted towards consumer and retail. i went to ask you about investing in that business. in particular the online like marcus, apple card transaction banking, these are all things that are hitting a newer audience and perhaps a newer growth opportunities for goldman. >> i will talk about transaction banking because that is an extension of services we provide to corporations. so for a long time goldman sachs is had great relationships because our investment banking business. but we haven't provided cash management services. i'm taking corporate deposits from those corporations. we have been a customer of those services and we saw a need for our own experience or we could build a platform that

would add value. we put ourselves on that platform, which in and of itself is a investment for goldman sachs. we think we can build a nice business. so it's where were focused on his word we have a strength? it's our relationship with corporate's. can we at bring transaction banking is a good example of what we can bring to them. but respect to the consumer, given the changes in the regulatory worlds over the last decade, it was clear we had to bring deposits into goldman sachs and we would really benefit from changing our funding mix from wholesale to some deposits in wholesale funding. certainly when you thought about doing that, digital deposits opposed to branches, starting from scratch is a better way to do it. so we set out first, to build a platform to bring digital deposits and. ultimately we saw a real opportunity to build a unique digital bank. over the three years we built a very nice business and were very optimistic over the next

dictate we can build a consequential bank that helps consumers with their financial needs. maria: how big would you like to see that business get relative to the core strength of goldman? >> when you look at the core strength those are significant businesses and we have no aspirations for this consumer business and the next three to five years to be anywhere near the size of those businesses. but it could be a very meaningful business and makes a significant and meaningful contribution to goldman sachs over the next five years. also gives us an opportunity to grow our wealth management business and high other things in our platform into the digital offering. we are excited about this and there's a lot of work to do. maria: my thanknknknknk

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maria: welcome back uber investor ray dalio tells me there are plenty of opportunities in china. i sat down with the founder of bridgewater associates at the world economic forum in davos. i asked about growth opportunities in the global market and why in a recent interview he said cash is trash. take a listen. >> returns on cash are going to be zero. and will be look at, we are going to be creating large deficits, that have to be dealt with by the increasing of printing of money. you can't let interest rates go down. go up. we have a situation where you are looking at asset classes right now with a lot of cash on the sidelines, you want anything that's going to have a higher return. so a diversified portfolio of assets that has a higher return, because cash -- that's how we've had a leveraging up of assets. the key to the success that we

are enjoying, has been a combination of interest rates that are so low that it pays to buy assets. plus so much quantity of money because of the quantitative easing and also those policies. so we are having a financial inflation in which cash is going to have the lowest returns. so you don't want to earn cash now. you'll time you want to have caches when you have a tight monetary policy. we can't have that because things will go down. maria: but isn't sure with the marker going up as much that has been going up, that you want to perhaps have some dry powder. what about that? you think valuations in the stock market for example are poised for a come down? at least a little? >> every asset is compared against every other asset. sub caches compared to bonds.

and then the central banks indicating they will hold the cash they are, you pick up a return on those low yielding bonds. and all asset classes get pressed down. so when you look at the return on equity, whether the company doing it or investor doing it, if you have an excess return you go for it. and the way you get there is by borrowing the short-term rates, and buying or borrowing the interest rate to get that higher return until those assets go up high enough that that expected return is down. and so you see the flattening out of opportunities, and when you see that all flattened out, there are no more opportunities and then you are done. maria: look around the world for us and tells where you see growth and where that might lead to some of those higher yielding opportunity. >> will be look at it you want to have diversification. you want to be and other countries, thinking about other countries in generally speaking equities.

you want, this sounds crazy, but you want to have some goals in your portfolio. because there is more printing of money and it's the question of whether in some places, and negative interest rate is something one wants to hold. negative interest rate receiving a more promised to pay. so that kind of diversification, it's almost like tech, gold, and other countries. and many countries it's a high-growth of merging countries. maria: emerging countries in asia? i also want to get your take on europe. they have had a tough time generating much growth. are there opportunities there? >> you don't see technology. if you really -- there are two places that you see technology and that you can beat it. united states and china. so i think we should talk about china. i like investing in china. i know it's controversial, but that's an opportunity.

so you're up has no monetary policy. it's got no important technology development. it's highly fragmented, and that's a european problem. but if we look at the asian and emerging countries and agent some other countries. then i really again i'm bullish on china. maybe we should touch on china little bit. maria: absolutely this is the front page story of the day. the issue is are you going to be investing in getting a fair shake when you know you are dealing in a communist country where you also have that government subsidizing, supporting chinese companies. >> if you look at the technological innovation, if you look at the amounts of money they are putting into information technology and that the data that they have, the number of engineers. and the production of billionaires. i think we are closer to

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saving for ava's college. being able to retire on our terms. taking care of dad. why ameriprise financial? my advisor cares about my personal goals. he gives us comprehensive advice. i feel prepared for what's expected in life and even what's not. she helps us feel confident. we know our financial future is secure. with the right financial advice, life can be brilliant. ameriprise financial. maria: a welcome back we will be back here next weekend. be sure to watch his every weekend friday nights 9:00 p.m. eastern right on foxbusiness. will be live in miami florida over on the newschannel on sunday morning futures. join us live a mere coming to you from miami with nfl commissioner my special guest. along with steve bannon and

house minority leader kevin mccarthy. all my special guest, sunday morning 10:00 a.m. of on fox news. plus right here on foxbusiness start smart every day for mornings with maria right here on foxbusiness monday through friday. have a great rest of the weekend. ♪ ♪. gerry: hello and welcome to the wall street journal at large. well it might seemed like the 2020 presidential races been going on forever. but month active campaigning they're finally ready to have the first votes cast. on monday, boaters and i will charge their local caucus locations will they will take part in their hallmark of taking their favor to the race. the democrats, doesn't are who are in the field the stakes are high. in 1996 no one is gone on to