Category: Company News

Super Bowl Sunday is almost upon us. The TV commercials are ready, the Bud Light is chilling, and the fans are getting into a frenzy ahead of the biggest football game of the year.

As the New England Patriots prepare to play the Los Angeles Rams at the Super Bowl, kicking off at 6.30 p.m. ET on February 3, retailers, broadcasters and sponsors will be waiting to cash in on the biggest sporting event in the U.S.

CNBC takes a look at who makes what.

The NFL will reportedly pocket tens of millions for Sunday’s game, but for more accurate figures it’s better to look at the season as a whole. The NFL does not disclose the value of its contract with TV networks to broadcast regular season football games, but it’s reported that CBS, Fox and NBC will pay around $3 billion a year collectively to do so, with a total of around $27 billion for the period 2013 to 2022. Each network gets the Super Bowl match to themselves three times over that period.

The NFL also doesn’t release detailed financial data, but one league team, the Green Bay Packers in Wisconsin, does break out its finances because it’s fan-owned. The Packers reported revenue of $454.9 million for the 2017 fiscal year, according to an income statement emailed to CNBC, and that included $255.9 million in “national revenue” that included TV rights money from the NFL itself, which shares money from TV deals equally among its 32 teams. If you multiply that national revenue figure by the 32 teams, that would equate to around $8 billion distributed to teams by the NFL each year.

The NFL also earns money from sponsorship deals (Visa renewed its partnership through 2025 on Tuesday, an alliance that started in 1995), with revenue to reach $1.39 billion in the 2018-19 football season as a whole, according to consultancy IEG in figures released Tuesday. This is up 5.9 percent on the previous season, and was driven by new sponsorships from companies including McDonald’s, Pizza Hut and Turbo Tax owner Intuit, IEG said.

On January 3, the NFL also signed up Caesars, its first casino partner, in a contract reportedly worth $30 million, and, as viewing habits continue to change, it has signed deals with Facebook for video content and Amazon Prime for streaming.

In previous years, football has seen controversy over players taking a knee during the National Anthem and in May 2018, the NFL said it would fine players who did not stand. However, recently the league has seen fewer issues, said Jeff Gagne, SVP of strategic investments at Havas Media. “This was a good year for the NFL— there were far less PR distractions than in recent years,” he said in an email to CNBC.

Super Bowl ad spots are the most expensive on commercial TV in the U.S. by far, with a 30-second slot costing $5.25 million. That works out at roughly $175,000 per second. Thirty-second ads during regular-season NFL games usually cost around $625,000, according to Kantar Media.

Of the three TV networks who alternate broadcasting the Super Bowl, CBS will show it this year. Total ad spend for pregame, in-game and post-game advertising during NBC’s Super Bowl broadcast last year was $482 million, according to Kantar. CBS has broadcast the Big Game the most times and 2019 marks its 20^th year, and its official line at a January 10 press conference was that it was 90 percent sold on ad spend.

The network might take close to half a billion dollars in advertising for just one football game, contributing heavily to the overall annual amount it pays the NFL for the right to broadcast. According to Rick Burton, professor of sport management at Syracuse University’s Falk College of Sport and Human Dynamics, it will make a nice profit. “Ad spending has already gone up. It goes up every year. CBS will make money. The Super Bowl is one of the most profitable pieces of programming for the network,” he said in an email to CNBC.

Last year, the winners of the Super Bowl made an estimated $112,000 each, while their opponents made $56,000 each. Referees, meanwhile, make between $4,000 and $10,000 a game, according to an estimate by CBS, and their annual salary is about $201,000.

If you look at annual figures, the New England Patriots are reported to be worth $3.8 billion, while their opponents, the Los Angeles Rams, are worth $3.2 billion, according to Forbes.

For Sunday’s game alone, members of the winning team will receive $118,000 each, per the NFL’s collective bargaining agreement. Players on the losing team will each receive $59,000.

But both the teams have already earned $83,000 per player in postseason play, meaning each winner could go home with a total of $201,000 and each loser with $142,000.

Stores are set to make $14.8 billion in sales around the game, with most of that money spent on food and drink to consume while watching, according to a survey carried out by Prosper Insights & Analytics for the National Retail Federation last week. That equates to $81.30 per person, up from last year’s $81.17. But, as fewer people say they will watch the Super Bowl in 2019, retailers will make slightly less than last year’s total of $15.3 billion.

“The big game is a day for big spending regardless of who plays or wins,” Prosper Vice President of Strategy Phil Rist said in an online statement.

Walmart will air its “Grocery Pickup” 60-second commercial just before kick-off on Sunday, featuring famous movie cars like the Batmobile and DeLorean. It will be hoping that a chunk of that $14.8 billion spend will go through its registers this weekend and beyond.

The Super Bowl will be played at the Mercedes-Benz Stadium, home to the Atlanta Falcons team. Both are owned by parent company AMB Group, the investment arm of businessman Arthur Blank. The stadium, which opened in 2017, has raised close to $1 billion in sponsorship, a spokesperson confirmed to CNBC by email, but it does not break down financials.

Mercedes bought naming rights to the Falcons’ stadium in 2017, for a reported $324 million over 27 years (contributing to that $1 billion total). People flying into Atlanta’s Hartsfield-Jackson Airport won’t be able to miss it: the logo on the roof is “the biggest Mercedes-Benz logo on the planet” according to a blog post by Dieter Zetsche, chair of Mercedes-Benz owner Daimler.

While the car company might not be able to directly track its sponsorship to sales, naming the stadium is more about generating “love” for the brand, according to Dan Conti, director of Sports & Live and a partner at media group Wavemaker, in an email to CNBC.

“These deals are typically not directly correlated to product sales, but are instead about driving awareness, deepening brand love, and shifting perception.” Attaching its name to the Atlanta stadium also makes sense for the company, which moved its headquarters to the city in March 2018, but beyond that, the company will get huge exposure in the media.

Fans should expect to pay between $4,000 and $6,000 for a ticket to watch the game in person this year, according to Scott Jablonski, general manager of NFL for ticket reseller StubHub. And at the time of writing, the NFL’s official hospitality partner was selling hotel and ticket packages for $5,645 per person when sharing a room.

Advertisers will be shelling out close to $500 million to air their commercials during the Super Bowl, but what returns can they expect? Measurement company iSpotTV, which tracked sales against ad spend in 2018, found that the cost per lead (CPL), or the amount of money spent to convert a viewer into a buyer was between $27 and $100, on the day of the game. But the CPL went down significantly after a fortnight, to $3.41 for one big game advertiser it tracked.

For Burton, return on investment could be too hard to measure and instead brands should be focusing on return on objectives. “Half of the advertisers think they killed it, half of them will think they didn’t. But the bigger issue may be, will companies get a return on their objectives? Some companies want to sell more cars or more cheeseburgers which can be measured by a spike in sales,” he said in an email to CNBC. “Other companies are trying to increase awareness about their brand. Will all of these companies receive a return on their object? Most will believe they did.”

The massive music acts that perform during half time reportedly make zero cash for their efforts. Expenses and production costs are covered, but playing to such a massive audience reaps rewards. Maroon 5, who will perform Sunday, opted not to hold a news conference ahead of the big game, saying they would instead participate in a “social and digital media roll-out.” The band attracted controversy for its decision to perform, because of the NFL’s treatment of Colin Kaepernick, the former San Francisco 49ers quarterback who started kneeling during the national anthem in 2016.

Along with paid-up sponsors, official merchandisers and big-money teams, many other vendors will cash in on Sunday, Burton said, although it’s almost impossible to put a figure on it. “The joke is, every man and his dog is making money. The players make money, legal gambling is making money, illegal gambling is making money, the network makes money, the list is lengthy. Vendors on the streets selling t-shirts, Airbnb, people selling a parking spot in their backyard. This isn’t new, and for the last 45 years the Super Bowl has been a big deal and there are a lot of people familiar with how to monetize the event.”

—Disclosure: NBC and CNBC are owned by Comcast’s NBCUniversal unit.

Stocks had their best January gains in more than 30 years, and that should mean 2019 will be a pretty good year for the market.

That’s what the widely watched January barometer tells you — as goes January, so goes the year. According to Stock Trader’s Almanac, going back to 1950, that metric of January’s performance predicting the year has worked 87 percent of the time with only 9 major errors.

But the indicator also signaled a positive year last year, and the market suffered an unusual late-year sell off, wiping out all of the gains. The S&P 500 ended 2018 down 6.6 percent, despite rising 5.6 percent in January. But the S&P also defied history with a terrible December decline of 9.6 percent, the biggest loss for the final month of the year since 1931.

This January, the S&P 500 was up 7.9 percent. The best January performance since 1987, when it rose 13.2 percent. It was its best overall month since October 2015.

Some market pros worry the sharp snap back in stocks since the late December low means January could be stealing the gains from the rest of the year. Some also believe there could be another test at lower levels in the not too distant future. Yet, Wall Street forecasters have a median target of 2,950 for the S&P 500 at year end, a big leap forward from the current 2,704.

“I’m still struck between the contrast of a year ago and now. We came in last year with nothing but optimism. At this point last year, we had synchronized global growth, confidence had spiked to record post-war highs, and everyone knew we had this steroid-induced earnings boost coming. The thought was how could stocks lose, and of course they did,” said James Paulsen, chief investment strategist at Leuthhold Group

The market has sprung back from December’s low, with the S&P gaining 15 percent since Dec. 26.

“This year, we came in with nothing but bad news – the economy was slowing down….The rest of the world is slowing. We have trade wars. We have the shutdown, and analysts are revising earnings lower. We’re worried about a recession and a bear market. It’s strikingly different, and yet it’s kind of like how can stocks win, but they are and I think they will,” said Paulsen.

Strategists also point to the differences in the way the market traded in each January. This January has been full of volatile swings, with ultimately larger gains than losses. Last year, the market was at the end of a long smooth glide path higher.

Stocks did well through most of January 2018, but by the end of the month, a correction started. “On January 30, in 2018, it was the first 1 percent decline in 112 days. That was basically the start of the fall off the cliff. In terms of percent gains, this January is similar to last but in terms of where we’ve come from, it’s very different. That was one of the calmest advances in history,” said Frank Cappelleri, executive director at Instinet.

Cappelleri said it’s important to put this year’s market move in context, when considering the January barometer. “You have one of the biggest snap backs after a very bad December, so the odds were in the market’s favor to do better than that. I think maybe you have to look where we are now. You’re up 15, 20 percent from the low depending on where you look. Are we going to go up that much more for the rest of the year?” he said.

Paulsen sees the gains continuing, after a possible pause. “I think it’s going to continue to be a fairly good year, and I think we probably go up and get close to the highs or 3,000 on the S&P, and I’m not expecting hardly anything on the economy, and earnings are going to be weak, if not flat or maybe down,” Paulsen said.

He said the slowing economy and a potential trade deal could push the dollar down and that would be a positive for stocks. At the same time, the Fed has paused and may even stop its balance sheet unwind.

Jeff Hirsch, editor-in-chief of the Stock Trader’s Almanac, said there’s another set of statistics that are in the market’s favor for a positive 2019, though they also failed last year. He said for the years when the S&P 500 was positive in the first five days of the year, plus gained during the Santa rally period, and was up for the month of January, the S&P 500 had a positive year 27 out of 30 times. It also had an average gain of 17.1 percent in those years, since 1950.

The Santa rally period is the last five days of the year, and the first two trading days of January.

“It’s definitely more encouraging after a kind of pull back in a midterm year,” said Hirsch. He said there have been cases where the market bottomed late in the year though it’s not common for December. “I think some of the legislation of tax reform, and de-regulation helped prop up the midterm year more than it normally would have.”

Some market pros are skeptical of the January barometer, but Hirsch said it makes sense because that’s when Wall Street expectations are reset for the year. That’s when big investors and pension funds put money to work for the new year, or not.

Paulsen said the barometer has been fairly accurate. “To me, there’s a little more credence to it,” he said. “A lot of money changes hands around that time, whether it’s year end bonuses or pension contributions. I do think it does sort of reflect an attitude, a sentiment that you may not get exhibited in other months of the year, and to that extent, it has some credence.”

Apple has conceded that consumers are waiting longer to upgrade their iPhones to the latest models. There’s just not enough reason for many consumers to hit the buy button earlier in what is known as the iPhone replacement recycle. Maybe it should not be surprising, then, that there’s a similar push and pull between investors and Apple stock as the company tries to convince the market to dial back up the exposure from its recent lows.

Apple’s stock price has rallied this year, and since its earnings earlier this week, the stock has moved higher. But for investors wondering why a stock that was over $230 last October and became the first U.S. company ever to reach $1 trillion isn’t being viewed by investors as cheap enough to more quickly bounce higher, the answer is fairly obvious. There just isn’t much to get excited about right now when it comes to the world’s most profitable company (and even after Apple reported its highest-ever quarterly earnings per share on Tuesday).

Apple shares finished January up by 5.5 percent and closed at a price of $166 per share on Thursday. But the move up trailed many market measures. The Dow Jones Industrial Average finished January up 7 percent, the S&P 500 was up close to 8 percent, and the Nasdaq finished the first month of 2019 up near 10 percent. The S&P’s tech sub-sector was up roughly 7 percent for the month.

Toni Sacconaghi, senior analyst at Bernstein, said the Apple results were not a big surprise since the company pre-announced weak sales in early January and sank as low as $142 after that market shocker. Starting the year with that handicap is one reason why Apple has had a hard time playing catch-up as the stock market took off to start 2019. But the Bernstein analyst said there were more signs of slowdown to focus on in the full quarterly financial disclosure made on Tuesday after the market close, and some big questions for Apple where answers are still lacking.

On the earnings call Tuesday afternoon, Sacconaghi calculated the midpoint of Apple’s Q2 revenue guidance as implying “the steepest Q1 to Q2 sequential decline in iPhone revenue history.”

In a subsequent interview with CNBC, the Bernstein analyst cataloged additional disappointments.

Gross margins were lower than Wall Street was expecting, a trend that could indicate that even as increased competition to the iPhone requires Apple to spend more on manufacturing better phones, there is only so much Apple can raise prices without risking the loss of customers. Sacconaghi has noted elsewhere that Apple has had to add better cameras, displays and chips, among other enhancements, and has had to give up some margin to not price itself out of the market.

Apple’s services business continues to grow in size (and importance) to the company as it attempts to wean Wall Street off the iPhone sales-number obsession (it was last November when Apple shocked many investors by saying iPhone unit sales would no longer be disclosed). But services growth also decelerated year over year like the iPhone, the Bernstein analyst noted, though he added it was “still a pretty healthy number.”

Apple’s total installed base of users, the key to services revenue, grew to 1.4 billion. While an 8 percent year-over-year growth rate may seem solid, Sacconaghi said it is well below the rate at which it had been growing in the past two years: 15 percent in 2016, and 12 percent to 13 percent in 2017, according to his calculations.

He isn’t the only analyst worried about this deceleration. The first question on the Apple earnings call from Morgan Stanley analyst Katy Huberty was about the installed base and services slowdown: “If you compare what you added in 2018 versus what you expect to add over the next two years, that implies a slowdown in annual net new subscribers. So should we be thinking about services as a lower growth segment than what you experienced in 2018?”

Apple CFO Luca Maestri offered plenty of answers — some easy to understand, others much more difficult to follow:

“A portion of this deceleration is truly just a reclassification of the amortization of free services that we’ve made in connection with the adoption of the new revenue recognition standard. And as we explained 90 days ago, this amortization of free services in the past was reported under Products and now gets reported under Services. The reclassification is actually dilutive to our growth rate because the amortization of free services is a relatively stable number, which gets applied to a growing base. So this reclassification reduces our growth rate versus the previous classification. This factor by itself represents roughly one-third of the deceleration that you’re seeing.”

The strength of the U.S. dollar also played a role, since Apple is not often repricing services based on short-term fluctuations in currency. Issues selling games on the App Store in China, a large business for Apple, took a toll, though the company expects these issues to be resolved. And its AppleCare package is seeing slower growth, Apple’s CFO said. He also noted some positives: Apple has added 100 million users in the past 12 months alone, and within its installed base the percentage of users who are paying for at least one service is growing “very strongly.”

These issues, even if temporary, come at a time when there are other uncertainties.

“There are lots of risks,” Sacconaghi told CNBC. Specifically, the trade war and the tariffs that would go into place as early as next month if the United States and China do not reach a deal. If China tries to boycott Apple or steer its citizens to Chinese products, “it can be very significant and negative” for Apple, the Bernstein analyst said.

Apple has more than 40 stores in China, and it has grown to be the iPhone’s third-largest market.

President Donald Trump did say this week that he is encouraged by progress in trade talks with China and thinks a deal can get done.

Apple CEO Tim Cook told CNBC this week that he was encouraged by the recent comments from both countries.

But the Bernstein analyst said what got Apple to a 2018 share price and all-time high of $233 and a market valuation of $1 trillion hasn’t changed, and it isn’t buried in the margin, or services, or installed customer base numbers.

“For Apple the question is, will they introduce exciting new products and services?” he said.

A new iPhone is expected in September, but “expectations are pretty modest and it won’t be all that different than this year’s,” Sacconaghi said.

“What drives excitement around the stock is new products,” the Bernstein analyst said, and he added that a new video content service would be the kind of idea that could help shape greater investor enthusiasm.

Apple CEO Tim Cook talked up the opportunity in video on the earnings call, telling analysts, “We see huge changes in customer behavior taking place now. And we think that it will accelerate as the year goes by to sort of breakdown of the cable bundle that’s been talked about for years. And I think that it’ll likely take place at a much faster pace this year. And so we’re going to participate in that in a variety of ways.”

There are reasons to be skeptical of Cook’s assessment, at least his rapid timeline for the change. And the Apple CEO didn’t reveal any breakthrough video idea.

He mentioned Apple TV, which “you’re well familiar with,” Cook said.

In addition, the company’s Wi-Fi streaming tech AirPlay 2 has support on a number of different third-party TVs. And third-party video subscriptions are available through Apple, and “that’s going to accelerate into the future as the bundle breaks down and people begin to buy likely multiple services in place of their current cable bundle,” the Apple CEO said.

Original content will increase beyond some marquee deals already announced (e.g. Oprah).

“But today I’m not really ready to extend that conversation beyond that point. We’ve hired some great people that I have a super amount of confidence in, and they’re working really hard, and we’ll have something to say more on that later,” the Apple CEO said.

Sacconaghi asked Cook on the earnings call about the all-important iPhone upgrade cycle — fact that efforts like Apple’s battery-replacement program and making the iOS operating system work with older models is changing the iPhone average replacement cycle and that it could stretch out even further in years to come.

“The cycles — the average cycle has extended,” Cook said. “There’s no doubt about that. We’ve said several times I think on this call and before that the upgrades for the quarter were less than we anticipated. … Where it goes in the future, I don’t know, but I’m convinced that making a great product that is high quality — that is the best thing for the customer, and we work for the user. And so that’s the way that we look at it.”

U.S. stock futures were mixed this morning ahead of the January employment report at 8:30 a.m. ET. Stocks are coming off a bullish January, with the Dow Jones Industrial Average and S&P 500 chalking up their largest monthly percentage gains since October 2015. (CNBC)

* European markets edge higher amid earnings (CNBC)

The employment report is expected to show nonfarm payroll gains of 170,000 with the unemployment rate coming in at 3.9 percent and average hourly earnings rising 0.3 percent. The ISM Manufacturing Index and the University of Michigan’s final January consumer sentiment index are out at 10 a.m. ET. (CNBC)

Two other reports — delayed by the government shutdown — will also be out at 10 a.m. ET. November construction spending is expected to be higher by 0.2 percent, while wholesale inventories for November should register a 0.5 percent increase according to economists. (CNBC)

Amazon (AMZN) was 4 percent lower in premarket after it gave a weaker-than-expected current quarter sales forecast. It reported earnings of $6.04 per share, beating the consensus estimate, while revenue also beat forecasts amid a record holiday quarter. (CNBC)

Dow components Exxon Mobil (XOM), Chevron (CVX), and Merck (MRK) will be out with quarterly earnings this morning, along with Honeywell (HON), Illinois Tool Works (ITW), Johnson Controls (JCI), and KKR (KKR). There are no reports due out after today’s closing bell. (CNBC)

* Deutsche Bank swings to first full-year net profit since 2014 (CNBC)

President Donald Trump said he never spoke to his longtime advisor Roger Stone about WikiLeaks and stolen Democratic emails posted by the site. He also denied directing anyone to talk to Stone about WikiLeaks. (NY Times)

* Rep. Maxine Waters: It’s ‘absolutely’ clear that things are headed toward Trump’s impeachment (CNBC)

There are about two weeks until large sections of the government could shut down again, but neither Trump nor House Speaker Nancy Pelosi appear ready to back off their positions on funding for Trump’s proposed wall. (CNBC)

* Trump calls wall talks ‘waste of Time’ and dismisses investigations (NY Times)
* Arizona lawmaker pushes porn tax to pay for Trump’s border wall (CNBC)

Trump, giving an upbeat assessment on the U.S.-China trade dispute, said he expects to meet again with Chinese President Xi Jinping to resolve the conflict that has rattled the global economy. (WSJ)

* Another number paints a bleak picture of manufacturing in China (CNBC)

CVS Health (CVS), Cigna (CI) and other pharmacy benefit managers may come under pressure after the Trump administration proposed a new rule that would end rebates that PBMs receive from drug makers. (CNBC)

CNBC has confirmed that former presidential candidate and Godfather’s Pizza CEO Herman Cain is under consideration for a Federal Reserve governorship. Cain met with Trump this week at the White House.

In an interview with CNBC’s Jim Cramer, Democratic Sen. Elizabeth Warren said she wants billionaires like Howard Schultz and Michael Bloomberg to subscribe to the U.S. “social contract” and pay “their fair share” in taxes.

* Bernie Sanders proposes big estate tax hike, including 77% rate for billionaires (CNBC)

A storm swinging into California this weekend will spread a mess of snow and ice from parts of the Midwest into New England next week after one of the coldest Midwest outbreaks in a generation. (The Weather Channel)

* Polar vortex: Your phone’s battery will die if it’s too cold out (CNBC)
* Go away, polar vortex: Record-shattering cold set to give way to ‘spring-like temperatures’ (USA Today)

Facebook (FB) said it removed 783 pages, groups and accounts with ties to Iran as part of the company’s continued effort to rid misinformation. The company said the Iranian accounts were used to push Iranian propaganda. (CNBC)

* Apple and Facebook make peace so Facebook employees can start using internal iOS apps again (CNBC)

Yum China (YUMC) came in four cents ahead of estimates with adjusted quarterly profit of 12 cents per share, while the restaurant operator’s revenue was essentially in line with forecasts. Comparable store sales rose 2 percent, led by strength at the KFC unit.

Cypress Semiconductor (CY) reported adjusted quarterly profit of 35 cents per share, two cents above estimates, with the chipmaker’s revenue also beating Wall Street forecasts. Cypress had posted a loss in the year-ago quarter.

Deckers Outdoor (DECK) earned $6.59 per share for its latest quarter, well above the consensus estimate of $5.30 per share, and the footwear maker also saw revenue come in above forecasts. The maker of Ugg boots also raised its full-year forecast.

Symantec (SYMC) beat analyst forecasts by five cents with adjusted quarterly profit of 44 cents per share, while the cybersecurity software maker’s revenue also came in above forecasts on a strong performance by the company’s consumer business. Symantec also announced the departure of chief financial officer Nicholas Noviello.

Apple (AAPL) blocked Alphabet’s (GOOGL) Google unit from running its internally built iOS apps, following reports that Google had been running a voluntary app that let it track user activity. Apple had imposed a similar restriction on Facebook (FB) earlier this week, but the two sides have settled their dispute.

Sony (SNE) reported its highest ever quarterly profit, driven largely by its music content. However, Sony did seek lower profit at its gaming division.

Deutsche Bank (DB) returned to profitability in 2018 for the first time in four years, despite a fourth quarter loss for the German bank.

Anheuser-Busch InBev (BUD) will spend more than $50 million on Super Bowl ads this year, according to industry sources who spoke to Reuters. That would be up from $42 million a year ago.

Tips included: Chocolate manufacturer Hershey (HSY) says it has solved the case of the missing tips atop its Kisses candies, after angry holiday bakers complained about imperfect points. (CNBC)

As the House Democratic majority begins wielding power, Rep. Maxine Waters, D-Calif., is among its tallest lightning rods. In her three decades on Capitol Hill, she has built a reputation for fiery advocacy on behalf of her constituents in a majority-minority Los Angeles district of below-average incomes.

Now she will conduct oversight of the titans of Wall Street. The House Financial Services panel – once considered a “juice committee” for its ability to deliver big donations to members – has the first African-American, and the first woman, to wield the gavel of the chair.

For years, Waters has clashed energetically with the Republican right, which has made her a target on ideological and ethical grounds. But for all her high-volume rhetoric, Republican lawmakers credit her as a trustworthy colleague with a practical streak that can, at times, produce bipartisan cooperation. A wary business community hopes it can work with her in the same way.

Waters, 80, sat down with CNBC editor at large John Harwood in her office on Capitol Hill to discuss her reputation, her legislative agenda, and her determination to unearth the financial secrets of Donald Trump – the president who likes to deride her as a “low-IQ” adversary. What follows is a condensed, edited transcript of their conversation.

John Harwood: So you think the “Angry Maxine,” the “Kerosene Maxine,” has been exaggerated?

Maxine Waters: I don’t know about those labels. I do know this, that oftentimes right-wing conservatives will label you, they will call you names, and so I don’t pay attention to names that people make up about me. I think you have to look at where it comes from. If it comes from people who are diametrically opposed to me and my philosophy, and what I care about and what I’ve worked on, then it is not credible, and so I pay no attention to that.

John Harwood: At one point during the campaign you said about bankers, “We’re gonna do to them what they did to us.” So you recently met with Jamie Dimon of J.P. Morgan, David Solomon of Goldman Sachs, what did you do to them?

Maxine Waters: Well, first of all, let me just say this, when you are speaking and you are among friends and you’re with an organization that you have great relationships with, you take the opportunity to have a little fun, to perhaps describe to them in ways maybe you wouldn’t describe to other people how you’re going to do things, and you get them basically involved and understanding what you care about and what you have learned from your time in office, and you make these kind of quips so –

John Harwood: So people shouldn’t take that literally?

Maxine Waters: Not literally. I have an open door. Even if you know you disagree with a particular industry, you let ’em in and you let ’em talk to you. It’s always a learning experience.

John Harwood: Are there particular issues where you think there’s a very good chance that you’ll be able to work with those financial institutions?

Maxine Waters: I think the work that I have done already as a ranking member of the Financial Services Committee demonstrates that I’m a strong legislator and I know how to work with the opposite side of the aisle.

John Harwood: Are there issues where you think you can work with the Trump administration? I saw recently that they say they want to do GSE reform, for example.

Maxine Waters: First of all, you have to pay attention to the way that the president himself has defined himself. He has defined himself as someone that you can’t trust, that does not tell the truth, and that will change his mind and tweet something one day and the opposite the next day. It’s up to the administration to determine that they need to develop the kind of credibility and trust that they can work with other people.

John Harwood: I talked the other day to your old friend Barney Frank, who used to have this job, and he said, “Let’s face it, there’s not gonna be much legislating in this Congress. It’s mostly gonna be about messaging.” But you also have soft power. You’ve got the ability to use your position to make points to regulators, to make points to industry. What do you think you can get done there?

Maxine Waters: Here’s what you can do effectively: You can lead your committee and define what we care about as Democrats, what I care about. We can deal with issues that we were not able to deal with when we were not in power. We could not take up the issues or lead on the issues. The chair of the committee would not entertain Democrats being able to be the leader or the sponsor of legislature. Now we can sponsor legislation. We can define ourselves. We can deal with our issues, and even if they got all the way to the president’s desk and he would not sign them, we’re ready for 2020. We’re getting ready and we will have-

John Harwood: So you’re preparing arguments for your party for 2020?

Maxine Waters: Oh absolutely. Yeah, I’m not depending on the president to sign legislation that may pass the House and the Senate and get to his desk. If that happens, that’s fine, but we will have said to the public, “This is what we care about. This is what we are working on, and this is what we will do when we have all of the power that we need to get it done.”

John Harwood: You’ve got hearings to hold.

Maxine Waters: That’s right.

John Harwood: Your first one is with the credit industry. Can they expect to get a tongue lashing from you?

Maxine Waters: Well, if you watch what I have done in all of the hearings that I have provided leadership for the Democratic caucus and the Financial Services Committee, you will see that I have conducted myself in a way that would solicit information and have responses in a very normal way. There have been times when I’ve been challenged, and I have to challenge those who are in the witness chair, or I have to demand that they respect my time. I’m kind of known for that in the way that I …

John Harwood: Reclaim my time.

Maxine Waters: … Reclaiming my time, yes.

John Harwood: Do you think you can get them to change their behavior merely by having a hearing even if you can’t legislate?

Maxine Waters: I do think it may back some people down. It may cause some people to rethink. We’ll see, because we will have credible witnesses that have never had the opportunity to share their advice, and their opinions, and their experience.

John Harwood: One thing people on Wall Street talk about is headline risk, that is negative publicity can damage them. If you have hearings on a financial institution and have something negative to go after them on, it could affect, for example, their stock price. Do you care about that?

Maxine Waters: I think none of us should be irresponsible in the way that we deal with financial services issues. I do know that the president does not understand this. He doesn’t know the relationship of his remarks to the stock market. I also know that when you have a financial institution that comes before you, and they have been involved in activity that they have received a lot of fines for, that they continue in the activity, activity such as one bank that continued to create accounts in their client’s names. The people who were banking with them didn’t know that these accounts were being created, or when they are made to pay for insurance, forced insurance that they didn’t know about, or they did not need.

John Harwood: You’re talking about Wells Fargo now.

Maxine Waters: I really am. And when you talk about having foreclosed on homes that you should not have foreclosed on, and now you’re being asked, “What are you going to do about it, and how are you going to make these people whole?” Yes, it is legitimate for you to ask those questions, even if it is embarrassing. We’re talking about trying to get the truth about what is going on in institutions where people have obviously been harmed, and what are you going to do about it?

John Harwood: I’ve seen a comment or statement from you that suggested that you might want to actually put Wells Fargo out of business. Is that true?

Maxine Waters: No, it’s not true. Anybody that understands the importance of the banking community to the economics of our country would know that you don’t just wish to put somebody out of business. No, it’s not about putting anybody out of business. It’s about asking the questions about your ability to understand your own bank. How big is your bank? Do you understand every aspect of your bank? Are you able to control it? Is it organized in such a way that you will not continue to make the kind of mistakes? All of these fines that you are getting, is this just the cost of doing business? Are you going to continue to do that?

John Harwood: Do you fundamentally believe that the American banking system and financial markets are forces for good in making the American economic engine run?

Maxine Waters: First of all, I believe in our economy, we have to have banks. It’s very central to the economy and the way it works. I do believe that their interest is in making money. I believe that as a business making money is okay as long as you are not doing what we consider rip offs. And you’re committing fraud, and you’re taking advantage of people. It is what oversight is all about, particularly as it relates to something like the consumer financial protection bureau that’s in our committee that we have oversight for. Yes, we need banks, and we want banks to operate in such a way that they don’t undermine the mission of providing credible services to the average citizens.

John Harwood: What about the idea that the only obligation of a corporation is to make money for its shareholders, and that that’s what makes capitalism run?

Maxine Waters: If a bank, or any business feel that it’s okay to do anything to make money, there’s something wrong with that philosophy. Undermining, taking advantage of, overcharging, targeting, being unfair is not okay for any business, and certainly it’s not okay for the banks. We understand that banks are there to make money and their shareholders expect them to take the kind of actions that are necessary for them to be profitable. That’s all right. It is when you use your power and your influence to take advantage of people, and treat them unfairly, and basically undermine them in their ability to have a decent quality of life, that’s not fair.

John Harwood: Barney Frank, your predecessor, told me that he thought that Jeb Hensarling was not an effective chairman because he was so ideological, he was so far right, even for some in his own party. Are you as ideological as Jeb Hensarling on the left?

Maxine Waters: I don’t think so. Look at what I’ve done on the export/import bank. That basically was considered something that the chamber of commerce and the business community thought was important, and of course, Maxine Waters was believed by some to think that it was not. I was one of their biggest advocates, and I worked very hard with some that others would not expect me to work with. I held my meetings at the chamber of commerce office in Torrance, California. This business about whether or not I can work with others, whether or not I can get along, I’ve proven myself.

John Harwood: The reason I ask the question is you’ve been very critical, for example, of Ben Carson, the Housing Secretary and said that he believes that if people are poor, that’s their fault –

Maxine Waters: Yes, that’s right.

John Harwood: One of your Republican colleagues told me that you’re the opposite – that you think if people don’t do well, that’s the system’s fault, and that your principal interest is not generating growth, but redistributing money from people who have a lot of money to people who don’t.

Maxine Waters: I don’t know who said that, but it’s simply not true. If I’m being described by someone who simply does not like my style, and they’re going to try and define what my philosophy is, and they can prove that based on any of the experiences they’ve had with me, then I just have to take it as just another criticism that does not have credibility.

John Harwood: What role, in your philosophy, does redistribution of income take?

Maxine Waters: I’m not defined in that way that I believe in redistribution. That implies that you want to take from the rich and give to the poor. I’m defined about fairness. I’m defined in a way that would create equal opportunity, not only fairness, but your government having a role and seeing to it that all of their departments and agencies are operating on behalf of all the people, and that the least of these, or just the average Joe Blow working every day is not taken advantage of.

Nintendo revised down its sales estimates for the Switch console, but analysts remain bullish on the outlook for the Japanese gaming company.

The answer may come in the form of Nintendo‘s upcoming game releases.

“Nintendo’s pipeline of software is much more attractive in 2019 than how it was in 2018,” Kazunori Ito, senior equity analyst at Ibbotson Associates Japan, told CNBC on Thursday. To illustrate this point, Ito pointed to the impending release of new Nintendo games this year, such as those in the Animal Crossing and Pokemon franchises on the Switch game console.

Nintendo’s Switch, marketed as a hybrid console which enables gamers to play on-the-go and at home when connected to a TV, has been a major contributor to the company’s revenues. The Japanese firm has shipped more than 32 million units of Switch since its launch. The success of Switch has turned around Nintendo’s fortunes in the console market following the lackluster sales of its previous generation device, the Wii U.

“The year is still young” for Nintendo, Serkan Toto, CEO of game industry consultancy firm Kantan Games, told CNBC by phone on Tuesday.

Echoing Ito’s sentiments, Toto said 2019 “looks a lot better than last year” for Nintendo’s first-party titles, adding that the impending updates of Animal Crossing and Pokemon will likely “sell a lot of copies by themselves.”

There’s “absolutely no doubt” about the appeal of these games, Toto said, describing them as “system sellers” which will likely drive sales of Nintendo’s hardware.

The comments from the analysts came on the back of Nintendo posting better-than-expected quarterly profits of 158.6 billion yen ($1.46 billion), beating analysts’ expectations of 149 billion yen, according to Reuters. The company did, however, cut its full-year forecast for the fiscal year ending Mar. 2019, and slashed the expected number of Switch units sold from 20 million to 17 million.

“We think this looks a touch cautious based on January sales of Switch consoles via retail store channels,” Nomura analyst Junko Yamamura said in a note.

Nomura’s price target for Nintendo is 60,000 Japanese yen per share. The Japanese game-maker’s share price closed at 30,720.0 yen per share, after plunging more than 9 percent following Thursday’s announcement.

Ibbotson’s Ito concurred with this view. Nintendo’s revised estimate is too conservative in light of the robust sales of new titles such as “Super Smash Bros. Ultimate,” he said in a note. That game alone has sold more than 10 million copies to date, despite only launching in December 2018.

According to a report by Japan’s Nikkei, a new version of Switch could be released as early as 2019 — and it may be smaller and have fewer features in order to keep prices low.

“That may happen because Nintendo’s next target is to let … users buy more than one Switch console per household,” Ito said, in reference to the Nikkei report. “I think if Nintendo launches the new version of Switch, that may be the new catalyst of driving the Switch console sales.”

“2019 will be a really important year” for Nintendo, Ito said.

— CNBC’s Ryan Browne contributed to this report.

France has witnessed widespread civil unrest and dramatic anti-government protests for over two months now but a counter-revolution has started.

CNBC explains who the “Yellow Vests,” “Blue Vests” and “Red Scarves” are, what they want and why they want it.

France has been wracked with civil unrest and anti-government protests for over two months now with yellow-vested protesters taking to the streets of towns and cities throughout France. Demonstrations have often turned violent, leading to dramatic clashes with French riot police.

The original catalyst for protests was a planned increase to a hydrocarbon tax, introduced as part of the French government’s environmental strategy, that would push up the price of fuel, especially diesel, from January 1. The protests have morphed into wider anti-establishment action, however.

While the Yellow Vests staged their 11th consecutive weekend of protest last Saturday, and say more are planned for coming weekends, there is a counter-revolutionary wind blowing too.

Last Sunday, counter-demonstrations were held by an alliance of pro-democracy groups, the largest of which being the Red Scarves and Blue Vests. They oppose the violence seen at recent Yellow Vest protests and say they are defending the republic.

It’s believed that the protests started in mid-October when an accordionist from Brittany, in northwest France, uploaded a video to the internet in which she lambasted French President Emmanuel Macron, “Monsieur Macron,” for his policies and treatment of taxpayers’ money.

Listing her grievances in the video, Jacline Mouraud says Macron had been “hounding” drivers since taking office in May 2017, France 24 reported. The video went viral and a petition to bring down the price of fuel went online, garnering thousands of signatures.

Some also attribute the start of the Yellow Vest element to Ghislain Coutard, a car mechanic from southern France. He posted a video on social media in late October calling on people to show their opposition to the fuel tax rises by wearing a high-visibility yellow jacket and calling on them to join a protest on November 17. The video has been viewed 5.5 million times.