tv Street Signs CNBC May 3, 2012 2:00pm-3:00pm EDT
that jobs number tomorrow. we'll see some books flatten out. but right now the recent leg down in the s&p is concerning. >> thanks, jeff. that will do it for "power lunch," everybody. >> we'll see you tomorrow. "street signs" begins right now. have a great afternoon. see you back home, ty. all right. it is keep it simple thursday on "street signs." here's what is on deck. several stocks slammed on earnings misses. we're going to dig in to how you can be sure to avoid the big miss. the cursed cousins trade. similar companies with very different stock stories. should you double down on the black sheep in the family? and america is flipping out again. we're going to tell you how to get in on the new building boom. and one lion, one baby and the one video that everybody is talking about. don't overthink it, mandy, "street signs" begins right now. >> indeed it does. hello, everybody.
i'm brian. >> and i'm mandy drury. here are your market stats in a flash. disappointing ism services data pushing stocks lower today. the dow having its worst day since april 23rd. the s&p 500 having its biggest slide since april 13th. back below the 1400-mark. and the nasdaq also seeing its biggest one-day slide since april 13th. before we get to bob and rick, i want to get some breaking news in. scott cohn, what do you have for us? >> we're just learning details of what appears to be now a pharmaceutical theft ring that may spread to multiple states. u.s. attorneys in connecticut, florida and new jersey are announcing arrests. this investigation started with the theft of $80 million from an eli lily pharmaceutical warehouse in connecticut. that happened in 2010. the investigation expanded and now it appears that this extends to multiple states. we're getting details of the indictments being unsealed now in simultaneous news conferences in these three states.
in addition to warehouse thefts, there apparently were also truckloads of pharmaceuticals that were stolen. and we will get more on this and the companies involved as we get them. >> we look forward to more details. thank you very much for the breaking news, scott cohn. in the meantime down to bob and rick, first to the floor of the nyse, bob. oil prices might be struggling a bit today. but this isn't just a one-day wonder. i noticed that the s&p energy sector is down about 7% since the end of february. what's going on here? what does it tell us overall? >> what's going on is the concerns of the direction of oil and concerns about the direction of the macro economy. you're right. i mean, look, here's the green line. this is the s&p energy stocks. and this is the s&p 500. you can see ever since oil topped out right about here and it hasn't been the same. and this is an important group. this is about 12% of the s&p 500 in terms of the weighting. and it's down again today because we had some high profile misses. let me show you oil here because this is the point you want to watch right at the end of february beginning of march.
put up oil and i'll show you. there you go. since that has been going on, the question is where is it going? lower global demand means lower profits for oil companies. as we've been moving down today, energy stocks have been moving down. on top of that, amanda, we've had some high profile earnings misses. apache for example missed. devon, murphy, all for various reasons b these misses are weighing on the market in addition to the greater macro concerns that are going on. energy a real concern today. >> it certainly seems to be. you talked about some of the big misses there, bob. we're going to talk more about how to avoid the next big miss coming up later in the show. in the meantime, rick, i want to get to you because bob was hitting on this theme of global growth and demand slowing down. okay, things here in the u.s. have been kind of mixed. we've had some good data and some patchy data but feels like bonds as well as stocks latching on to the bear case at the moment. >> no. there's no question that the interest rate complex hovering in the 10s right now kind of in a zone of the lowest yields in about three months. there's definitely more on the half empty. if you really parch all the data
we've had over the last month since the 120,000 jobs the last go around, there have been only a few bright spots. it's ironic that yesterday's ism put many traders in a perceived wrong trade. let's call it intuition. traders intuition that jobs going to be soft tomorrow. and that's permeating all trade in all markets today. >> rick, thank you very much for that. >> all right. so, ahead of tomorrow's jobs report, let's kind of back up and figure out where we are, right? if you haven't noticed, if you're watching us for the first time in about four years, the markets are at a four-year high. so why aren't people getting more excited about the rally that we have had the last couple of years? let's ask chief market strategist at russell investments. steven, why aren't people getting more -- it's almost like all these stocks making new highs every day. we're at four-year highs. yeah, the economy is a little like this, but it's definitely better than it was. why aren't people getting more excited and getting back into the stock market? >> that's the nature of the beast especially in retail world.
you're going to see most retail investors are going to wait until most of the gains have been all realized by institutional money or longer term or disciplined money before they kind of get excited about it and move in. so i think unfortunately like the chalk outline of investor behavior is to wait until they miss most of the gains to get in the market still seeing flows going into fixed income rather than equities. but you're right. the data are mixed, but they've got an upward measurable trend to them. and the united states compared to the rest of the world, you know, has strong fundamentals and good market dynamics. >> yeah. getting in near the top is the curse. there have been so many gains over the last six months. we're at four-year highs, why should i bother now? >> that's the sell in may and go away which is probably going to be not a terribly successful strategy. i think if you look at the russell 1000 up. a small large cap space. you've already had a darn good year, there are yards available between now and the end of the year. >> how many yards? three yards? how much more room is there to run in let's say the russell
2000, one of the broader market indexes. >> i think if you begin to see china show the stable sooigs we think it will, it will be softish. >> if you watch what the shanghai composite has been doing, people are starting to feel the economy has bottomed out and things are getting better there. i want to ask you though if i came to you with $10,000, what would you tell me to do with it right now? >> right now i would think look at the united states as being your base camp on a global voyage. look at the u.s. look at stocks. look at higher quality growth names. i would be indifferent on cap large versus small. and then look globally, emerging markets, brazil, china, commodities which we don't necessarily like this year, but if you have three to five years as a time horizon, build the global portfolio. and back to brian's question -- >> i was going to say, you artfully dodged my question. i was about to ask again. so, stephen, how much more room does this market have to run? >> the artful dodger will say it comes more from security selection. i don't know it's going to be a risk-on or risk-off -- >> don't buy index.
don't buy the spy or broad market etf right now. >> yeah. i think you want to look in actively managed portfolio, security selection, picking better stocks is going to be a bigger difference. look at the stress test. not all balance sheets are created the same. so looking at better stocks, security selective active management. even in europe they have some good companies over there. but you're going to need to look globally, asset, it's going to be tough yards. >> are you willing to be put on the spot and give us some specific names in terms of stocks that you like? >> i can't talk about specific securities, obviously. >> i thought i could try since you said look at some specific stocks. let's take this from a different angle. what would you be avoiding right now? >> i think we would look in the energy sector. we like oil services. we like more exploration -- >> even with some of these big misses bob pisani just talked about? >> even with the big misses. that's why you want the longer term capital expenditure names. look what's happening not only in canada but the united states. i would say underweighting health care until we find out
about obama care. utilities would be a name. >> we have a whole debate coming up about how to avoid the next big miss, but i guess by miss by definition it's essentially a surprise, right? no one's expecting it to be a big miss. but what would you say if you were in that debate? >> i would say look at the broader market. you're looking at 73%, 75% are surprising to the upside. we think that earnings in this environment are not everybody's going to perform the same, but you're going to see some good quality earnings especially in the united states. if i could just go back to europe, there's going to be some good names in europe. germany's doing okayish. northern europe is probably -- >> are some of those names in the food space? >> some of those names are in the food space. >> that make yogurt and candy? >> they could. >> i'm guessing. >> they well could. if you also look in brazil, india, our beginning easing cycles. you look at the liquidity, the fundamentals -- >> although you could say brazil is easing from 1275 to 975. they're easing because they're slowing. >> easing because they're slowing, but you want to get in front of that easing cycle.
down under 50 basis point -- >> bravo, well done. they really needed to do that. >> they did. >> low rates are the solution to everything. >> okay. >> maybe they're not working there. >> wlie are they cutting? because the economy's going like this. >> and the exposure to chie ta -- >> unless they're building the titanic 2, they'll be fine. >> i don't want to be a debbie downer, but we've had releases some are wondering if the economic cycle has peaked. >> i would say in the united states there is an economic upside. i would be willing to say the economy is a hair better than not bad. and probably we're going to have a little pull out this quarter but stabilized by 2012. 2013 against solid fundamentals, not fantastic but solid fundamentals, europe is eventually going to sort out their issues. if they don't have a financial crisis in europe, i think the economic exposure of us to them is not going -- >> you're still driving hopium?
the dodge hopium? it's almost hopium's one-year anniversary by the way. >> driving a decoupled 2000. thank you so much for joining us today. stephen wood, always a pleasure to have you on the show. >> speaking of cars and hopium, automaker stocks, yes, they have been left in the dust over the past year, but there are signs of life and encouragement out there. for example, chrysler just making a call to forego the normal two-week summer shut down at four of its north american plants. in other words, their going to produce more cars. let's bring in phil lebeau. i'm going to read this as chrysler isn't going to make the cars if it doesn't think it can sell them, which means things are pretty good in auto sales. >> they're good in terms of auto sales and auto production. they are not good if you are in auto investor. take a look at gm and ford over the last year versus the s&p 500. no comparison at all, brian. and it's not just the automakers domestically, the foreign automakers, look at toyota. yeah, it's fractionally positive, but hyundai's down
10%. there are a couple of exceptions out there. you've got to look at maybe a bmw, tata motors out of india, those are the exceptions to the rule when it comes to the a automakers. and it's the same thing when you look at the parts suppliers. generally speaking, investors are saying i don't see the margin growth and i don't see the next leg of growth, with one exception, borg warner because they have the turbo charges and number of technologies needed in the next generation of automobiles. >> but what we hear is about the recovery in the auto sector, particularly japanese. look at comp last year when they were having to deal with the double whammy of the thailand floods and the earthquake at home. i mean, why can't these auto stocks start to see the light at the end of the tunnel and outperform as opposed to underperforming? >> two reasons. people want to see what's going to happen in europe. even some of the foreign automakers who are relatively immune to what's happening in europe, they're all being weighed down by the skepticism
that that market's going to turn around. second of all, you need margin expansion. and if you look at the profit margins, they're decent but they have not hit that next level that everybody is waiting for. and the question is, when do we see that? i talked to a couple analysts today, brian, they were saying i'm not sure we're going to see it this year, maybe well into next year. >> so necessarily a lot of auto sales, we'll call it 14.5 million, maybe 15 million this year does not necessarily mean the stocks are going to boom in the back half of the year. it sounds like that's what the analysts you're talking to are saying. >> absolutely. the one area to watch, check out the auto dealers. not all of them, but some of them are outperforming the market right now. and why is that? because we have pent-up demand, we have people buying new and used. you talk about this a lot. the auto dealers are the place to be. >> lowering incentives as well because they feel demand is strong enough to do so. >> absolutely. people are paying full fare as much as possible. >> yeah. phil, that's good news because the auto salesmen and mechanics, they're going to get more money
and spend it, that's the upward spiral of the economy. and just be honest, you just wanted to say tata. >> any time i can do tata, i love to do it. >> thank you. up next on "street signs," the home builder boom. sector's up 38% year-to-date. are these stocks still building momentum? or is it too late? >> america's also flipping out again. if you flip through the channels, you're going to see a boat load of new house flipping reality shows. even vanilla ice is in on it. how can you play without any sweat equity? >> and herb's been raising the red flag on green mountain for years. to some he sounded like a broken record. he is coming back to tell you how to avoid the next big miss. >> i tried asking the company about this. i e-mailed them with the specific questions. i phoned them. no response. well, that's because they're busy on a road show trying to
sell $7 million shares of stock. here's what the analyst said as they defended this with the stock down 30%. janney capital markets, in our view gmc's outlook never been better. bad time for a miss, great time for a buy, roth capital, a ridiculous market reaction. >> i also think it will be a pivotal year for green mountain as the long running s.e.c. investigation intensifies and as margins compress when its k-cup goes off patent mid-year. ttd#: 1-800-345-2550 let's talk about the cookie-cutter retirement advice ttd#: 1-800-345-2550 you get at some places.
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welcome back everybody. do check out zillow up about 13% after beating estimates. the real estate website has been able to boost advertising prices thanks to a jump in new visitors to the site. well, year-to-date the shares are up nearly 85%. so someone's in the money. >> that's right. also booming, the home builders. they are posting some of the largest sales in years. but you know the stock's had a big run since we first started talking about them at the end of last year. so can you still make money on some or all of these names? let's ask senior analyst at mkm partners, megan, can you make money buying some or all of the home builders right now? >> well, right now i would say stay away for a little bit. i'm going to answer that with a definitely maybe. i think the stocks have had a good run. we had a great first quarter. i expect they might take a little bit of a pause at least for a couple weeks. go ahead. >> i mean, when you see some of the year-to-date gains, for example pulte up about 62%, 40% gain for lennar.
i can understand why they would have a little pause. if we see a pause or pullback, which of them would you be waiting to buy? >> yeah. so we still have buy ratings on three stocks. ryland, toll and pulte. those are the ones i would look to first if they get a pullback. those are the ones to keep your eye on if the stocks go down. >> they're very different though, right? we showed our viewers a couple months ago. we went through the profit margins. toll brothers giant homes. actually the margins aren't as big as some. mostly it seems to be a consensus that lennar is probably the best or at least one of the best run companies. but i notice that's not on your recommendations. why not? >> yeah. we have a neutral rating on lennar. it's mostly valuation based. i think that's very fairly priced for the kind of recovery we're seeing even giving the company for credit for an off balance sheet deferred tax asset. we need proof that this recovery is accelerating from the current level. profits are going to go up, prices will go up faster. >> bottom line, how are we going to get that proof?
do we need to wait for example april and may data to find out if this is a really good spring selling season or just a so-so one? >> we'll start to get april data in a couple weeks. we need to see the big picture macro data look better than a 10% to 12% rate. that's kind of where we're trending now. we need to see better than that. >> megan, thank you so much for joining us today. >> by the way, dollar to the show team because spring summer season is banned and staycation. >> no one told me. i'm charging you a dollar for not giving me the memo. flipping fever is back. they went away for a couple years but starting to look like 2006 all over again. new reality shows about flipping houses popping up all over the place on different networks including the vanilla ice project. the flipping fever has started to heat up in atlanta as well. this time it's got a twist. diana olick is here with the story. hi, diana. >> hi, mandy. that's right. they said the age of flipping was over, but here in atlanta
when you have brand new construction going up right smack next door to a million dollar short sale, well, anything goes. that is as long as you have the right business model, which is catering to today's investor crazed rental market. >> so obviously pull all the plant material off the house. >> now, atlanta investor bruce carlisle has a whole team and system in place. he buys foreclosed homes. while he does keep some for r rental income, he mostly sells them to foreign investors turnkey ready. >> we have the preferred lenders to help the investors get approved. we have local attorneys. we have local insurance agents. we have a property management company we work with. we have a leasing agent we work with. >> carlisle says he's putting anywhere from $15,000 to $25,000 into each house. and he puts a renter in too. he's making it most a 10% return on each, but he's doing so many so fast that it's worth it. and guys like him are fueling
atlanta's economy. and big remodeling retailers like home depot, lowe's and maas koe which have all seen earnings rise on the rehab boom. in fact carlisle's property manager used to be in construction. this cottage industry is bringing back local jobs since investors will pay a premium for turnkey. >> trying to juggle contractors, trying to really understand the values and where to spend the money, oftentimes first-time investors will over spend on the rehab because it's their personal preference as oppose today what's really what the market calls for. >> and jobs are in fact coming back strong here in atlanta. and that's why a lot of folks have already done short sales on their homes, we're being told they're coming back into the market already and buying new homes and they're getting mortgages. imagine that. guys. >> imagine that. diana, thank you very much for the special report. so the question here is of course how can you get in on the flipping frenzy beyond sweat
equity? some home improvement stocks are soaring. in fact, diana mentioned a couple. let me run you through. you've got for example up here armstrong worldwide. now, they make flooring, ceilings, cabinets, that's up about 3% year-to-date. also building supply masco that diana mentioned. up 39% year-to-date. and trading at levels this week not seen since back in february 2011. as for mohawk flooring, no particular guest for what that one does, up about 16% year-to-date and also trading at new highs today going back to 2008, september is the month. and home depot as well. that's up big. it is up 25% year-to-date on possibly personal responsibility about 10% of that. my favorite place. it closed at nearly 11-year high this week. and sher win williawin williams
all-time highs to its ipo which was 1964. herbalife is taking another unhealthy turn. herb is back with more on herb. brian. >> and, mandy, there is a sponge bob crisis. popular sponge is losing fans. but could that soak viacom investors? and it's a bird, it's a plane. no. it's -- we're going to tell you who/what is soaring in the skies of rio as we leave you with a little john denver. this is $100,000. we asked total strangers to watch it for us. thank you so much, i appreciate it, i'll be right back.
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wow. that is a jet packed pilot soaring in the skies over rio. the pilot jumped out of a helicopter and flew past the famous statue. the jet pack is powered by four -- you guessed it, jet engines. same pilot used the jet wing to across the english channel. santa, if you're listening, that's all i want. not much. >> that would help your commute. >> that would help my commute massi massively. let's get over to brian shactman for a market flash.
>> sully, we look for a little green today. we have quite a bit of red. i want to look at virnetx, it's about a $1.5 billion internet software company, now they're going to license some of their patents to astra. the stock had been negative for the year before just the last two hours and now it's positive year-to-date. >> latin for to the stars. >> wow, you're a smarty pants. >> i am, but it's a name herb has talked about before. >> it was one of the great controversial bull/bear names and it's been all over the place. >> in the meantime, come onto talk about what you came here to talk about which is herbalife. >> thank you for pronouncing it correctly. >> you've been hammering it into me. >> what have you got, governor? >> look at the stock. down another 10% today. that's after the company -- even after the company announced a
pretty big buyback. just why is the stock down so much? it's hard to say. i had that piece yesterday about how the company had paid convicted felon and former critic about $400,000 to shut up and investors are speculating whether david einhorn will lay out a case for that stock in two weeks. by the way, he's never said if he's long, short or had any position in the stock. also look at this chart. the blue line is the short interest in the hlf up sharply over the past two days. all this is going on a report today on cnbc.com, gmi ratings put michael johnson as the highest paid of all ceos last year with total compensation of around $90 million. and also just by the way, sodastream, a name we mentioned getting whacked today. really i think people think because of the sympathy play relative to green mountain. two separate companies, two separate industries. >> it was nearly a year ago today that we did the sodastream test with jim cramer, too, right? >> that's where i realized they had a real product and people kept telling me how great it was and jim came out and he's going
negative on the darn thing. do you realize that? >> i did not realize that. >> he's been very concerned about product quality. >> is that recent last couple days? >> no. last couple of months. >> oh, really? >> yeah. >> did not know that. another disaster for you. this one bubbling up in a pineapple under the see. viacom's nick load yen e onhas a sponge bob crisis on its hands. ratings down 29%. making up 40% -- 4-0% of the network's air time. the cartoon's been on the air for 13 years. viacom up on the day down about 9% over the past year. >> it really is the sponge bob channel. i think the problem is they're targeting children. i think they should be targeting adults. it's one of my favorite shows. >> crusty the crab burger? >> yeah. next, herb -- >> squid word. >> squid word. >> squid herb. >> coming up next, herb warned you on green mountain. coming up he's going to tell you
nt. or creates another laptop bag or hires another employee, it's not just good for business, it's good for the entire community. at bank of america, we know the impact that local businesses have on communities. that's why we extended $6.4 billion in new credit to small businesses across the country last year. because the more we help them, the more we help make opportunity possible.
all right. some breaking news right now from "the wall street journal" regarding facebook. saying facebook's ipo may price in the mid to high $20s or even low $30 range. puts in the range of about $85 billion to $95 billion. you almost want to do this. >> and the road show is kicking off on monday which probably means give or take give it a couple weeks for the road show, we should be trading perhaps on may 18th. let's take a look at what the markets are up to overall. we are still on the road here, folks. we did see an accelerated selloff after the european close today. only four dow components trading in the green right now. there were a few other stand oults as well. let's run through some of them for you. on the new high list today for example you have public storage,
psa, trading at all-time high levels. nordstrom down by about 1% there. whole foods trend to the upside by 7%. >> i want to point out something on public storage, i tweeted this out but it's not the same thing. i went through general motors pension fund, which is a massive pension fund. and their biggest holdings, all of them were reits. the biggest holding was simon property group. but it was amazing, mandy, apple had 29 million shares of the last filing date if my memory serves me correct. they had over 138 million shares of simon property, more public storage than just about every other stock. it's interesting a lot of these commercial reits have gotten a lot of attention. >> they have. i think bob pisani has been beating the drum about this. reits in general have been hitting really good highs. okay. why don't we take a look at the debbie downers. we're calling the wall of doom here behind you. for example, health net, value click, atmel all really tanking.
they are debbie downers. >> yeah. terrible quarter for health net. saying there were a number of claims filed at the end of the quarter they didn't expect. so health net getting absolutely walloped. they cut their forecast for the year as well. so hnt down over 25%. we talked about valueclick, mandy. this goes to herb's points which is if you are priced to perfection, you better deliver perfection. they did not. in fact a miss on revenue and eps. >> i think they lowered their guidance as well, didn't they on that? and aetna crushed. down after soft earnings and guidance. several stocks are getting clobbered after missing estimates. for example, green mountain, weight watchers, opentable, one of the stocks we did a feature on yesterday. herb has been warning you about green mountain. and he's back here to tell us how to avoid the next big miss.
you were on this, right? and you were looking for the red flags. just run through very quickly what kind of red flags brought your attention to green mountain and what could also help people in the future to avoid falling in a trap. >> look, everybody has their thing. often it usually starts with the numbers, you can see it in the numbers, but not every company is the same. with green mountain, there were really a number of things. nothing was more telling to me in recent weeks than a report out of goldman sachs about starbucks of all companies. as i reported at the time the analyst believed k-cup sales stabilized and the entire k-cup industry may have reached a plateau. that was such a tell. since this was about starbucks though, they have k-cups, people missed it. they didn't get what the analyst was telling you without telling you was he was telling you about green mountain. and then opentable. like so many stories for me, they're sort of an intangible. the company was changing its model from restaurants having to pay for the services to a premium model. if you dug deeper as one of the
short sellers i know did, you can see things as revenue per restaurant starting to fall. this is back when the stock was starting to rise and people didn't really want to hear that. then there's deckers. this is just a classic cash flow story. in fact, a few weeks ago georgia tech accounting professor who runs cash flow analytics was flagging me on the falling cash flow as a sign of an imminent earnings miss at deckers. i wish i had mentioned it here on "street signs," but i didn't. >> not so fast, my friend. one of us did mention this stock. this was a segment we did about six weeks ago. i dug into it and we talked about what deckers saying sales missing expectations. they made other deals with a surf sandal company those sales hadn't been performing. so the story was brought to the "street signs" viewers. >> we were talking about the cash flow part. i was almost ready to do it last week and then something came up. we talk about the intangibles, remember, herbalife i've been
talking about here and first talked about on this network fiver or six weeks ago really was an issue where there was an intangible. it was the company ceo going on jim's showing and saying we do research around the clock. and then i saw they weren't spending that much money on research. so to me that's wait a minute -- >> we have to move on. >> we do need to move on. let's bring in a guest on this exact topic. overseeing about $20 billion in assets. rex, weigh-in here. how do you avoid the next big miss? >> there are a couple things i think investors can do. one, avoid stocks vulnerable to a big miss. those will be high p/e stocks. if a company misses on earnings, not only do you have a lower e, you have a lower p/e. that can lead you to what i think of as a double whammy and disappoint. you've mentioned a couple other examples. another one would be netflix. they were trading around $200 in the fall of last year when earnings got cut to half. we must see this stock at $80.
so that's an example. there's some things you can do as well. look for stocks with dividend yields. dividend yields can provide a cushion on valuation. i would avoid what we call hat size dividend yields when they're too large, that's an indication that you are likely to see some cuts there. >> can you get over simple and say avoid a stock that is essentially in a downward trend, like this is a stock that's catching a falling knife? or is that just over simplification? >> well, it's simplification, but i think it's a good one. avoid stocks on the downturn that can keep going lower. it may be an indication that some smart money sees something you're not seeing. i think avoiding the down trend is a good principle for investors. >> rex, you talked about what you called hot dividends, too big being too big -- >> too high. >> what's your mark? what's the level of dividend where investors are saying they're trying to entice me to buy the stock for the wrong
reasons? >> if it's bigger than your hat size. >> what if you have a tiny head? >> that's what we call hat size dividends. >> thank you so much for weighing in, rex. we have to toss out to jon fortt with breaking news. >> well, samsung has launched the galaxy s3. this is a big deal because samsung is the biggest player in smartphones on android. this is going to be the phone that goes against the current iphone and future iphone. and i can give you some of the features, but first from a stock perspective, part of the reason why this is significant also, samsung has introduced a number of software features on top of this phone that kind of create their own ecosystem around the galaxy s3. one of the issues you hear come up with is android fragmentation. this is another layer of fragmentation of what amazon is doing with the kindle fire. 4.8 inch, amoled is the letters for that screen. 8 megapixel camera. they're billing this as a human
phone, designed for humans. it can see if you're looking at the phone and keep the screen on so it doesn't go dim. it can tell where you're looking, holding the phone and interact accordingly. it's got a feature called s-voice sort of their answer to si siri. they are unveiling this in london right now. >> it's interesting they say it's like a human phone for humans. i mean, what else would they be for? who else could they be for? like a phone for robots? cats? >> iphones operate like they are for robots. >> thank you very much, jon fortt. >> all right. coming up, companies that account for 40% of our gdp no longer feeling the hopium, mandy. how concerned should we be as investors? >> that's a really good question. stick around to find out. ut. recently, students from 31 countries took part in a science test.
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i'm bill griffeth. coming up at the top of the hour on "closing bell," wlast the better indicator for investors to watch right now? earnings or economic data? good question. we're going to focus on that ahead of tomorrow's very important jobs numbers for the month of april. plus, aig reports earnings after the bell.
chairman and ceo robert benmosche stops to break down results right here on "closing bell." maria and i look forward to seeing you from here at post 9 at the new york stock exchange in a few minutes. >> we look forward to seeing you, bill. uh-oh, economic uncertainty is on the rise especially among mid-sized companies. that's according to deloitte's brand new 2012 report on america's economic engine. mid size companies have a big impact. they account for about 40% of gdp, which is something that i did not know and i think is really interesting. so we're going to try and find out what we can take away from this. joining us now in an exclusive interview is tom mcgee, national managing partner of deloitte to discuss the study's key findings. great to have you on the show today, tom. >> thank you. >> why have the players in this mid-size space become less optimistic compare today a year ago? >> this is our second survey in this space and i think this survey indicates two interesting
trends. when you ask companies about their individual levels of optimism, about their company individually, they do expect revenues to grow and profits to grow. and they're investing in technology and talent et cetera. however when you ask about the broader u.s. economy, certainly the level of uncertainty has increased and the level of optimism decreased. >> can they be more specific? uncertainty about what? >> as you said, it's 40% of u.s. gdp. so the things that impact the broader economic landscape have a big impact upon this space. so things like the euro -- the situation in europe, obviously our government budget challenges here. we have an impending presidential election. uncertainty around tax policy, regulatory policies and the implementation of new legislation like the affordable care act and so forth all contribute to a level of uncertainty. >> tom, sit tight for a second. we may have to jump out. we have breaking news on yahoo!. brian shactman, what do you have on yahoo!? >> brian, this is very interesting. looks like dan loeb and third point going after ceo scott
thompson's resume in a letter to the yahoo! board of directors, they cite a 10 k where it says thompson held a bachelors degree in accounting and computer science. they found out his degree is only in accounting and this is their conclusion, if mr. thompson embellished his academic credentials we think it one, undermines his credibility as a technology expert, and, two, reflects poorly on the credit of the ceo who has been tasked with leading this company at the critical juncture. they're playing a little nasty with the ceo and going after his education background saying the official background that he says he has is not accurate with what he actually has. >> brian, this is big news here. i want to let our viewers know, dan loeb, a very well-known hedge fund manager going after yahoo! saying we need three new board seats, they gave him three new seats but didn't give dan a seat. he wanted one. so to be clear loeb is firing out publicly at the credentials of the ceo of yahoo!?
>> yeah. i call it like a reference the guy who took the notre dame job years back and found a discrepancy and he lost his job. this is a very aggressive thing to do with an open letter to the board of directors of yahoo!. so to repeat they basically say they had misinformation on a 10k said he had a double degree in accounting and computer science. yet they didn't have a degree in computer science where he went. >> thank you very much for the breaking news. brian shactman, and, tom, thank you very much for joining us today. >> sorry to cut it a bit short. thank you, we'll get you back on soon. >> thank you for having me today. the curse of live tv. up next, we are calling them the cursed cousins like sketchers related to nike. we're going to find out why and what the trade is. before we head to break, here's today's return on retirement.
in the mid-1990s, the average expected retirement age in the u.s. was 60 years old. but according to a recent gallop survey, that number has gone up. so, at what age does the average american expect to retire? the answer when we return. when we got married. i had three kids. and she became the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball. those years were crazy. so, as we go into this next phase, you know, a big part of it for us is that there isn't anything on the schedule.
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>> announcer: for more on retirement, go to retirementcnbc dotd come. all right. you know what, we're going to save the curse segment for tomorrow. i want to bring it to you because we have breaking news. brian shactman brought it to you before the break. john, just to reiterate the news, you have a powerful hedge fund manager questioning the resume of the ceo of yahoo!. this is is a big story. >> that's right, brian. i have a call into yahoo! about that. i haven't heard back from there.
stonehill only offered one course in computer science. they also say that patty heart said incorporate filings, third point says here, that her degree is in fact in business administration. and though she may have taken a small number of courses and not for a minor degree. of course, there could be all kinds of reason for these information being in the filings if it is in fact correct. we want to hear what they have to say about these degrees that these board members are listed as having, the third point says that they do not. >> it will be having to see what they have to say on this. herb, what do you think? >> when you have a ceo or someone high up in a company who
has sort of stretched it on the resume, i've mentioned this in a variety of stores over the years. at some point it often means something. it just depends what their response is going to be, can they keep their heads buried in the sand. >> damage control stock. >> it could be a simple date misprint. >> absolutely. >> misprinted date, nobody notices for years and years. it's like when you say -- whatever for some reason you've seen a movie that you haven't seen, you have to say you haven't seen it until you go to see it. >> well, so often cfos who say that they are an accountant. >> the school doesn't have the program in that period of time. >> he's saying that he got the degree before the degree was actually offered. >> you're right. you need to know she's things. i would suspect that dan lobe's research is good on this kind of thing. but -- >> you were saying that we've seen cases like this before. in your experience, what's the best way for a company to deal
with this in terms of damage control? is it better for them to say, sorry, i made a mistake or is better to try and cover them autopsy? >> coverup is never a good thing. in this case, you really want to figure out if it's a pattern because that's the thing you're going to look at. if there's an issue here, if he's not telling -- if everything wasn't quite right in his resume, where else does it stretch? >> this is easy. i'm sure we're doing it behind us in our worldwide headquarters at krns. call stonehill college. ask him what year did he degree and what year did you start offering computer science degree. i've never heard of this college. it's outside of boston, massachusetts. >> some of them are very tight on that information. >> not that easy to get that information. but, yeah, point made. up next, a cautionary tale. >> we're going to go call stone
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