Skip to main content

tv   Street Signs  CNBC  November 6, 2014 2:00pm-3:01pm EST

2:00 pm
the dow jones industrial average is up 59 points on the trading session. but with oil moving to the down side, the transports are up 126. the s&p is up about 5. and the nasdaq is up about 7. in terms of interest rates on the ten-year note, well, they've been holding pretty steady at 2.37%, ty. >> that will do it for "power lunch." >> "street signs" begins now. all right, welcome to "street signs," everybody. it is no longer an "f" word stock market. no, not that "f" word. this is a family program. we'll tell you what it is and why it may be a good thing. plus, what the post office said that could be the bullish thing that you have heard in a long time. mandy, we are, what, 40-some days away from christmas? >> yeah, that's right. pretty scary, right? get started, everybody. but i'm going to get started with the markets for you. records, records everywhere. yesterday was the first time brian in over 16 years of the
2:01 pm
s&p, the dow industrials, the dow transports and utilities all had record closes on exactly the same day. today, you can see here, the s&p is at 2028. surpassing its previous all-time high of 2023. oil, well, it's moving lower again today. it's currently sitting at 77.66, but it is off lows of earlier this week and oil on the back foot as well after recently slumping to four-year lows. and finally, brian, this is what's happening now. if you are pulling up to the gas station and listening to cnbc on the radio, the national average for you guys is down another penny overnight to $2.95 a gallon. i know it's lower than that, brian, you know, you've been talking about that, some of the places where you pump your gas. but nonetheless, that is the national average. >> okay. there we go. for a while, we've been seeing that this cannot be a healthy stock market until we can actually have a discussion without using the "f" word. again, family program, folks. we're not talking about that one. we're talking about the fed. right? because for years, every
2:02 pm
conversation about stocks had to mention the fed and quantitative easing. so have we finally gotten to a point where basics like earnings actually matter the most? dom chu has been tracking the evidence and the sanity of the markets and here to tell us whether that insanity has returned. >> sanity is an open interpretation if you want to put it that way. but corporate profits as larry kudlow always says are the mother's milk for the stock market and the economy. let's talk about what's happening with profits and profit growth in the corporate american scheme. if you take a look what's happening with the s&p 500, nearly 90% of companies have reported their earnings in the s&p 500. and guess what? 74% of them have actually beaten the average analyst estimate for earnings in terms of the overall earnings picture. now, what's even more surprising for some is that profit growth is up nearly 10%. that means if we finish out the rest of earnings season and have all of the rest of the companies report earnings as expected, profit growth will be just around 10% for this past
2:03 pm
quarter. so that has people saying the other "f" word. maybe fundamentals. if you look at the sectors that are doing well, you look at the financials, material stocks, also health care. some of those sectors are really standing out. on the other hand, what's not good to see is heading into a holiday season where this past quarter profit growth for the discretionary stocks was actually negative on the quarter. so as we talk about, mandy, brian, what's happening with the stock market, the fed, one big "f" word to talk about, but maybe for some bulls out there, they say the market is justified near current record highs because the fundamentals like profits are driving the action. back over to you guys. >> thank you very much for that, dominic chu. let's bring in experts to see if they are buying into the idea of a normal market that is now focusing on fundamentals. chief market strategist at alliance bernstein and zach karabell and also a cnbc contributor. zach, would you say fundamentals
2:04 pm
are back in the driver's seat, sir? >> well, look, i, to toot my own horn, have been saying that fundamentals have been in the driver's seat for quite some time and that the fed's role in this, while important, has been overstated by market participate aer ants. i suppose you could say the fed has receded but then you've got the ecb and japanese central bank. the central banks are all still intervening. i don't know what moment in history and in time you look to to find this perfect time when there isn't some sort of central bank and/or government intervention and you do have strong profit growth and i think more important you have 4% or more revenue growth, which is exceeding most gdp growths, and it means that if you're looking for any dynamic way to invest in anything in the world, you're kind of left with companies that are growing. >> so do you think that "e," let's just go through the letters of the alphabet, that earnings are the most important thing right now for stocks? >> if you qualify it a bid and say earnings relative to expectations, then i think the
2:05 pm
answer is yes. but one of the surprising things is earnings tend to matter in the latter stages of the bull market. actually toward the end of it. that's when there is a greater discrepancy and disparity between winners and losers. early in the market, you tend to make big anticipatory bets and people are just looking for optionality. they're looking for risks. and earnings don't really matter because nobody expects anything. you're at a point where you need to deliver. it's very much a show-me market for the next year. and you'll see a great dispersion between winners and losers. >> do you think we're going to get shown? do you think this is actually going to work? >> i think it depends on the sector, for example, i think industrials will disappoint going into next year. why? 20 or 30% of their revenues and the greater share of profit is coming from the energy sector where you'll see cutbacks which are not yet in the estimates. midtier consumers, small business-oriented spending. i think you'll see a surprise on the upside as we've seen from the recent economic data. >> go ahead. >> i mean, on that point, you
2:06 pm
know, winners and losers being dispersed fundamentals driving, so in the industrial sector, i don't eventy -- and i'm sure he would agree with this -- you can't necessarily paint that with an entirely broad brush because industrial companies that will have input costs driving from energy, lower energy costs will mean their input costs are lower which means earnings can go up. even there i think you'll have a lot of sector differentiation with real hits to those who can't perform. qualcomm today is down, what, 11% with disappointing revenue, disappointing earnings as it should be. so this is kind of a decent market. you know, we're not having multiple expansion. >> that's the point. you just made the point which is excellent, zach, which is the fact that the stock is down because earnings fell. and that's as it should be rather than the stock's earnings were down, but it rose because janet yellen may buy the company. >> right. and it's down because of revenue is down as well. and you've seen lots of companies do decently, you know, there are the outliers and, you know, the future tends to shares like tesla.
2:07 pm
so i do think you'll have this kind of defer ifferentiation. he's done a lot of work on this. you do not have multiple expansion right now. you don't have massive multiple contraction. that suggests we're not get ing ahead of ourselves on a wave of easy money. >> let me offer just one other thought which i thought was kind of interesting. if you look at the biggest losers over one year and three-year period in the market today, they're highly concentrated in energy and commodities. if you look at the biggest winners, those that have outperformed by 20%, 25%, they're dispersed among sectors. fears are easily identifiable, dreams are extremely dispersed among sectors. we'll be looking for a theme as we go into next week. again, i think small businesses and related spending will be one of the big themes. >> do you think one of the negative surprises that may shock us next year is that u.s. equities underperform, right? >> i think the mantel will be handed off to international markets. that's not what's currently believed. i do think that the u.s. market
2:08 pm
is clearly the single most crowded trade out there. second only perhaps to the u.s. dollar. it's always difficult to say when the crowded trade ends. i think as we start to see wages rise, as we start to anticipate higher interest rates, that mantel could be passed. >> do you agree, zach? >> underperform what, though? no, what, underperform what? there's 206 countries. >> underperform japan, europe and the emerging markets. >> there you go. >> okay. so pretty much everything else. >> look, i mean, the expectation that international markets are going to close the gap has been an unfulfilled expectations for the past three years. i certainly have been on kind of the wrong side of that in expecting either that gap to close or for international markets to pick up the slack. i'm not really holding my breath about much wage growth in the united states. i mean, it might be over no wage growth, but that's a big difference between wage growth that really appreciably cuts into corporate margins. maybe it should cut into corporate margins for the health
2:09 pm
of our economic system hence the election that we had this week, but i'm not sure that's going to happen in the next 12 months. >> you want to bet a cocktail on that? i think you're wrong. the number of unemployed workers has steadily collapsed. we've got 4.6 million job openings based on a survey. i think we'll start to see wage inflation. >> i'll take that cocktail bet because if i'm wrong or right about that one, it's a good outcome. >> you still get a drink with me. either way you're a winner. >> that's what i'm saying. that's a good one. i'm not sure where the pressure -- i mean, this has been true for the past three years. you've got a big gap between openings and skills and, you know, that's a change in the work force that i don't think is a 12-month thing. >> but drinks for four. thank you very much. good to see you. while we're on the topic of markets, let's take a look at today's sunshine stock. lots of sunshine for this particular company. classy retailer kate spade. its net loss narrowed. it also enjoyed a rise in third
2:10 pm
quarter sales thanks to its handbags and accessories. kate shares can use a little sunshine because actually year to date, they haven't been doing so well. i was going to do again worth, but dominic chu swiped it from us before the show. here's another one. centurylink. they beat the street on earnings but expenses rose. there's still a big question, too, as to whether or not this company will spin off. it was also on my mind because i stared at their building from my hotel room in dallas -- or denver. wherever i was. >> wherever you were. >> for a day. half a day. today it was house speaker john boehner's turn to respond to the big republican midterm election wins. we're going to give you the highlights of what he had to say about his economic agenda. and later on, why something the post office said, maybe the most bullish thing that you have heard all day. yes, the post office. we're back after this. opportunities aren't always obvious. sometimes they just drop in.
2:11 pm
cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. tthat's why i take metabiotic,ed toa daily probiotic. health. new multihealth metabiotic with bio-active 12 is proven to help support a healthy immune system. experience the meta effect with our new multi-health wellness line. are we still on for tomorrow? tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. csx. how tomorrow moves. what a day. can't wait til tomorrow.
2:12 pm
2:13 pm
the spirit of healing and cooperation on capitol hill is in full swing. of course, it's only been 36 hours since the election. give it time. cynicism aside, house speaker john boehner just wrapped up his post-election news conference, and he made his economic priorities very clear. but will anything really get done? >> yeah let's ask cnbc
2:14 pm
contributor jimmy p. and chris, a democratic strategist. gentlemen, great to have you on the show. what do you think, jimmy? is anything going to get done? john boehner was striking a rather combative tone especially on a couple of issues? >> he was very feisty. listen, he has his audience at the house. mitch mcconnell has the senate. the senate and house are two very different bags of cats. i don't think you really go by that. i'm actually fairly positive. i think we are going to get something done. i think the house is going to pass. i know this has a lot of interest on cnbc. i think they are going to pass a corporate tax reform bill and i think it will be up to the president to sign it or to veto it, but i think it's going to have some senate votes. i think there's going to be -- also trade is another issue where there's room for compromise. i think it's going to look like something is getting done. republicans need to get something done. they've got to rehabilitate their brand and save a lot of republican senators who willing up in blue states in 2016 who have to have a record of doing
2:15 pm
something. >> it would be good to have a record of doing something. but needing to get something done doesn't necessarily mean it will happen, right, chris? what do you think will get done and what won't get done? >> i'll be the pessimist. >> okay. >> or the realist. and, you know, given, you know, the differing agendas and interpretations of legislation that these two folks have or these three folks have between mitch mcconnell, john boehner and the president, i think it's not likely you're going to see a lot of dramatic things done. now, you know, they talk about tax reform, but when you start talking at the actual details, you know, democrats and the republicans have a very different interpretation of what that is. you know, you have speaker boehner and other republicans talking about repealing aspects of obamacare. well, that's a nonstarter. i guess part of it is where can they narrow and focus on to get some kind of, you know, cooperation? listen, in a perfect world, they would sit down, all three leaders, and say okay, there's a
2:16 pm
lot of things we disagree on, but what are the four or five things that we agree on? let's show the american people that we actually can get the job done. it was one of the implicit if not explicit messages the american people were sending to both parties. work together, try to figure, you know, these issues out and get things done. >> right, exactly, jimmy. so do they come out and say by the way, we're going to repeal the president's signature legislation? let's cooperate. let's all be friends, but by the way, i'm going to hit you in the knee with a lead pipe when we first start negotiating. was that a stupid -- i know the american public, half of them anyway, want it gone, but is that the way to enter a negotiating period? i'm going to repeal the thing your name is on? >> well, of course, this comes right after kind of a feisty combative press conference about the president. who said he's going to take all these executive actions. >> exactly. >> immigration. >> nothing's changed. nothing has changed, jimmy. >> those are press conferences today. republicans are very eager to
2:17 pm
pass legislation particularly corporate tax reform. listen, paul ryan is not going to not run for president, the house ways and means chairman, just to sit there and do nothing. it could look like the one ron wyden did back in 2010. there are corporate tax reform bills out there which will not be 100% what republicans want, but will improve the system, will be an accomplishment, and that's going to get sent to the president's desk. then he'll have a choice whether to veto it -- veto with some bipartisan support or do nothing. >> chris, you know what i would do if i was the president? i'd throw out every liberal super progressive agenda that i could, make the republicans turn everything down. then i set myself up for 2016. i'll say, look, i wanted all this stuff. and the republicans said no. meantime, the republicans could do the same thing. i see -- i kind of agree with you. i see extreme policies coming out of both sides to make the other side look bad. and the american people lose again. we lose again. with nothing.
2:18 pm
>> the incentive is to get re-elected. incentive is to hold the senate beyond 2016. and if they follow that strategy, they will not. >> chris sounds a lot like jimmy. >> you know, us greeks, you know, we sound the same. so here's what i think both parties need to understand about what this midterm election -- you think about this going back to 2006, we've had successive wave elections where one party is flipping to the other -- you know, the control to the other. and the american people keep sending a very explicit message, figure out how to work together. now, i do believe it's at the peril of both parties if they don't take that message. now, unfortunately, partisan politics, some of it justified, ends up taking over. but, you know, here you have, i think, an opportunity for the president and his legacy. all right, you're not going to agree on a lot of things. but what can we agree on and focus on that first? but if the republicans -- and i would say even the president -- but the republicans come out,
2:19 pm
and one of their first legislative agendas is trying to repeal obamacare and core parts of the president's passed agenda that's already been adopted. i mean, that just sends the wrong message and tone. so i don't know if they've learned the lesson. >> do you think obamacare lives? i mean, even if, for example, mcconnell and boehner try to kill it, the president's probably going to veto it anyway, right? but do you think it lives? >> of course because here's the reality. whatever the house passes, you still don't have 60 votes in the senate. so, you know, the democrats are going to be able to filibuster. they're going to be able to shape that legislation. the reality is as much as the american people are angry about dysfunction, the structure of our government in a sense creates that dysfunction. that is both a positive and negative. but so it's going to demand both sides to figure out how to work together. you're not going to have dramatic changes. but i'm not sure the american people want dramatic changes. they just want government to work. they want their lives to be made easier, not harder. >> zach or jimmy and chris, it
2:20 pm
was a great discussion. it was not all greek to us. but it was to you guys apparently. we appreciate you coming on. >> anytime. let's get back to dom chu now with a quick news alert. >> so we're watching shares, if you can call them that, of gt. you'll recall that this is a company in bankruptcy. it makes that sapphire glass used in certain smartphone products. on october 15th, the company said it received a letter from the s.e.c. seeking certain information regarding trading activity in gtat stock as well as the company's sapphire business and securities offerings going all the way back to january 1st of 2013. the s.e.c. is requesting the preservation and production of certain documents. so again, the s.e.c. sends gtat a letter saying it wants looking into the company's securities as well as its offerings and securities going all the way back to january 1st, 2013. remember that this is a company that is in bankruptcy right now. it filed for such on october 6th for chapter 11. back to you. >> dom chu, thank you very much. on deck, a true crime
2:21 pm
section of "street signs." the shady money laundering charges against one of vladimir putin as closest cronies and the little country that is home to a very big. >> but first, the cheapest silver price in years has unleashed a surge in retail demand for physical silver coins and bars. wait until you hear what suppliers are saying about it. that's all coming up in "hard money." (vo) you are a business pro. solver of the slice. teacher of the un-teachable.
2:22 pm
you lower handicaps... and raise hopes. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. (pro) nice drive. (vo) well played, business pro. well played. go national. go like a pro. it's in this spirit that ingu u.s. is becoming a new kind of company. one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya. changing the way you think of retirement. big day? ah, the usual. moved some new cars.
2:23 pm
hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. i know what my money is doing. i rebalanced my portfolio on my phone. you know what else i can do on my phone? place trades, get free real time quotes and teleport myself to aruba. i wish.
2:24 pm
tally ho, silver. that's the focus of today's "hard money." while silver prices have been at four-year lows, physical demand has surged. the u.s. mint temporarily sold out the of its american eagle bullion coins yesterday with sales jumping 40% in october. the royal canadian mint has also seen its physical demand pick up significantly, brian. a very rich, very powerful and very well-connected billionaire -- is there any
2:25 pm
other kind of billionaire -- is now the subject of a serious money laundering probe. robert frank always gets the bat signal when billionaires are in hot water. who is it? >> this is really interesting. it's an investigation that could shed light on vladimir putin's fortune. the focus is an oil trader worth around $14 billion. and the state department has called him part of the, quote, inner circle of the russian president. now, sources tell me that u.s. investigators have launched a money laundering probe looking into whether he transferred ill-gotten funds through the u.s. financial system. that's why they have jurisdiction. it's being led by the fbi in new york and the a.g.'s office in brooklyn. one focus is whether he essentially was a tollkeeper for russian oil. he bought from russian energy firms at a discount. then sold it overseas for a profit. nice work if you can get it. investigators also looking into whether any of putin's wealth is actually connected to these illicit funds. the probe is part of a u.s. program -- get this -- called the kleptocracy recovery
2:26 pm
initiative. they belong to the same judo club. it's surged along with putin. revenues were $45 billion in the first half of 2014. cables from the state department show that his firm collected about $1 per barrel for oil experts of russia. normally it's less than 20 cents. the kremlin says it causes bewilderment and is seen as an attack on putin. >> everything's an attack on putin. that's the normal thing that they say. >> russian experts tell me that timchenko is one of the key figures when you're looking to trace the fortunes of vladimir putin. this could be big especially if they have cooperation from someone who worked for timchenko. >> in your expert, sir, is vladimir putin the richest man in the world? i mean, he's not on the "forbes" list, but you mow what i'm thinking. >> he is worth more than he says he is. let's put it that way. >> well, he would never say
2:27 pm
exactly how much he's worth. also, there's a body of thought that every time he's about to make a move, he places a bet in the market. >> exactly. >> what have you heard on that? and then moves to obviously benefit. >> it's so hard because people tell me if he has wealth, he uses trustees. and he uses guys that hold whether it's the boats, whether it's the bank accounts, whether it's the actual assets, it's all done through subsidiaries and through other people. so it's going to be really hard to prove that if he's the richest or second or third richest, then it's all his. >> maybe it's in luxembourg. >> certainly not in russia, we know that. >> robert, thank you. >> thank you guys. >> thank you. okay. oil is trading lower again today as we count you down to the nymex close. john kildoff is a cnbc analyst. he's live from the my next. interesting commentary from harold hamm earlier today of continental resources basically saying he feels maybe we're at the bottom rung for crude prices.
2:28 pm
basically calling a bottom. i mean, i know, yes, he's probably got a vested interest in prices going back up again, but nonetheless, do you agree? >> i don't really. i thought it was an interesting report. it's certainly something to take notice of. i think they booked almost half a billion in their portfolio on their production. you know, it's worth looking at. that's what makes a market, mandy. i do think it's going considerably lower. today is down another dollar. this is what a bear market looks like. the punches keep coming. >> what's going to be the body blow, then, john? >> i'm really putting it on the opec meeting on november 27th, brian. i think the whole thing falls apart for them there. it's going to end in acrimony. the saudis are supposedly going to see the venezuelans this week or today to tell them to -- they'll have to tough it out, and they have no money to tough it out. >> do you think opec will be like george foreman? you know, shocks the world? comes out of nowhere? >> and makes a cut and tries to save the prices?
2:29 pm
no, i don't think so. i really believe the saudis are committed to trying to squeeze out some of this more expensive production and try to hold on to market share. >> and i think it was harold hamm who also called opec a toothless tiger. before we even get to the opec meeting, we've got a lot of negotiations going on with iran and saudi arabia doesn't necessarily want things to go well with iran because any thawing of relations with the west could mean their oil and gas sector opens up. that would put the saudis in an awkward position, wouldn't it? what do you think's going to happen here? >> highlights how complicated the politics are in that part of the world. the rumors are that there is a deal that's going to be had here. and that the iranian oil market and industry is going to be opened up. and that is going to put even more oil on the market. this is why i think we are going to probably head down considerably lower in the first part of next year when our expectations are set about how quickly iranian oil will ramp up along with northern iraq oil which is now going to be heading upwards of 500,000 barrels in the first quarter of next year as well.
2:30 pm
this is what i keep talking about when i say the punches to this market keep coming left, right and center. >> okay. i'll ask you this straight up. one year from today, will the u.s. be allowed to import oil from iran? >> oh, no, no. >> so even if they open up, we're still not getting it. >> we're not going to get it. their main asian customers, though, will lap it up with enthusiasm. south korea, the japanese and the chinese and the indians in particular will race to get it. they've been dying to get it back into their refineries and other units. there's a lot more water has to go under the bridge for us to be importing iranian oil. >> do we even need it? >> no. >> aren't we producing at record levels ourselves now? >> we really don't. we're importing less saudi oil. we don't import any more west african oil for the most part. i thought the question was going to be will we be exporting our oil in competition with opec a year from now, brian. that may be an area of agreement for the republicans and democrats and president obama here next year. so i'd look for that before anything else.
2:31 pm
>> so think the bottom's around 50, huh? >> i do. i think we'll head down to the low 50s and see who collapses from the pain of that, whether it's the tight oil producers, whether it's some of opec, or even the canadian tar sands. there's going to be some carnage in that. it's not clear who it's going to be yet. >> good stuff. john, i don't know if this news has been broken to you yet, but you're at the gala tonight. >> best news you've got all day, right, john? >> you just made my day, brian. thank you. okay. let's get to dominic chu again for another "market flash." dom, you're a busy boy. >> and i will be at that same table with mr. kilduff and mr. sullivan. looking forward to that. shares of aol, the stock is moving down towards session lows. it's moving off the highs here. street account is saying the stock has been downgraded to neutral from a buy at citi. earlier beat wall street estimates boosted by ad growth. down by nearly 4% on the day's
2:32 pm
trade. back to you. >> dom, and ramp it up tonight, buddy. let's get it on. >> everybody's on your table. >> they want to be. >> pope on your table? >> what? >> i'm kidding. he's not coming. >> who did you say? >> the pope. >> the pope? >> yeah. >> is he coming tonight? >> no, he's not coming. >> he's the only one. some folks call whole foods whole paycheck. but today we found out the high-end grocery store chain did to try to get away from that expensive image, and it may have looked like it worked. >> okay. also next, we have the latest signs that this could be a very merry christmas. you have to wait 48 more days for the holiday, but we're going to give you a little sneak peek when "street signs" returns. hey matt, what's up?
2:33 pm
2:34 pm
i'm just looking over the company bills. is that what we pay for internet?
2:35 pm
yup. dsl is about 90 bucks a month. that's funny, for that price with comcast business, i think you get like 50 megabits. wow that's fast. personally, i prefer a slow internet. there is something about the sweet meditative glow of a loading website. don't listen to the naysayer. switch to comcast business today and get 50 megabits per second for $89.95. comcast business. built for business. record for the dow, records for the s&p, and you've also got the triple bonus, "street talk." it's something we do every single day at this particular time. hitting analysts' calls on stocks you need to know about. first up, we have philip morris cut. >> yeah, okay, and the stock is down nearly 3%. that's basically a sell, underperforming. what are you saying? but target stays at 90 bucks. the stock is at 87.37. so really no upside. a couple bucks, whatever.
2:36 pm
simply put this, they say no reason to own it. >> fair enough. >> there you go. >> let's move on. used car retailer carmax. >> yeah, it was cut to underperform at wolf research. the target there is 50 bucks. by the way, that's about 9% below the current price for kmx. i got the note from the analyst who says the company has fewer levers to pull. aaron says it's been a big fan of the story a long time, but carmax's risk profile is rising now. no reason to own it. in fact, price target is 6 bucks below the current price. >> we've also got tableau software. it also got an upgrade at rbc. >> the stock is up nearly 10%. 83.95. the ticker symbol is data. billings far ahead of what was expected. target boosted to $100. mandy, another 15 plus percent upside even after today's gains seen by rbc. >> let's move on to mondelez. >> the food company's stock up
2:37 pm
1.5% to 37.73. the rating jumping two spots. their target boosted to 44 from 38. mondolez raised their forecast. a lot of positive commentary. up 9% in the last month. in fact, one of the best performers on in the last 30 days. kind of rather quietly, i think. sl >> it has indeed. your under-the-radar name of the day. it is eplus, a virginia-based i.t. selling and leasing business. who knew? how we know. >> our viewers now. it beat estimates handily. earnings were up 53% for eplus year over year. raises their price target to 70 bucks a share. by the way, the average target of the four analysts who cover it is 73.33. it's just a name to have on your radar. look at the jump today. the stock's up 17%. >> that warrants a whistle. >> there you go. and it got one. now to "talking numbers," which is, of course, our daily look at a stock from a technical perspective. and today let's take a look at whole foods market.
2:38 pm
shares shooting higher. reported record sales for the fiscal year. steven of prime executions on the technicals. chad morganlander of washington crossing advisers on the fundamentals. steven, first to you on the charts. how does wfm look now considering let's not forget, it still even with today, 20 bucks a share from its high of a year ago. >> well, the chart looks a lot better right now. and even though it's gapped up today and trading much higher than it was yesterday following earnings, this is a chart that tells us the sentiment and the outlook for the company is potentially changing. what we see is that there was a long downtrend that resulted in some very bad earnings and then a sideways phase where basically buyers totally left the stock. interest dissipated. there was very little buyer interest. and then we see after a very long phase of that, they report earnings today. it gaps up. that tells us that buyers are coming back into the stock. they're looking to accumulate. the outlook has changed. it's more positive. it's a breakout through resistance.
2:39 pm
technically it's a strong development, and we think it could head higher. >> you understand sos like you feel it's an inflection point. chad, fundamentally, do you agree that sentiment and outlook are changing? >> it's a great company, great management and i like shopping there. unfortunately, the valuation doesn't make sense at this point. i have it as a hold. we'd be perhaps looking at a price target of around $35 a share. so let's look at the numbers here, okay. earnings per share growth rate is roughly about 13% for 2015. revenues are growing at 10%. and profit levels on operating margins are roughly about 6.5%. but when you add it all up, it's just overvalued. the growth rate and the comps have been decelerating. so the comps have looking at low to mid single digits where it used to be around 7% or 8% on the sales side. as well as on the annual revenue growth rate, it has been coming down. so this type of company that's growing at 10%, you really need a growth rate roughly about 15% to 20% on the top line to justify the valuation.
2:40 pm
>> that's a great company, right? but it's older now. it's bigger. it's ubiquitous. it's national. it's not the fast-growing news story is used to be. >> it's a maturing company. and that's great. it's a terrific company, but the valuation just seems a little toppy to me. >> still too expensive for you, down 23% year to date. steven, chad, good of you to join us. thank you. and be sure to check out the online edition of "talking numbers." that's, of course, in partnership with yahoo! finance. up next, the little country with the big-time tax dodge. this is a story you've got to hear to believe. that is the question after a blockbuster new report that may come back to bite some pretty big names. names that we know well like pepsi and deutsche bank. we'll have an investigative update with deana next. [ male announcer ] your love for trading never stops. so if you get a trade idea about, say, organic food stocks, schwab can help. with a trading specialist just a tap away. what's on your mind, lisa?
2:41 pm
i'd like to talk about a trade idea. let's hear it. [ male announcer ] see how schwab can help light a way forward. so you can make your move, wherever you are. and start working on your next big idea. ♪
2:42 pm
and start working on your next big idea. no question about that. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away
2:43 pm
for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. it is the little country that can. and often does. it was always hard to prove that little luxembourg was an
2:44 pm
international tax haven because so much has never been made public until right now. cnbc partnered with the international consortium of investigative journalists to produce a report on one of the biggest tax document leaks of all time. deana all over it and joins us now with more. what are they doing wrong? >> brian and mandy, we were actually the only u.s. media outlet to get access to over 500 tax rulings from 300 companies, 219 of which are u.s. companies that show exactly how these companies set up structures in luxembourg to significantly reduce the tax bill. so here's how it works. big accounting firms, in our case the documents we have is price waterhouse coopers goes first to the tax ministers in luxembourg and says here's the kind of structure that we want to set up. so they have a conversation about it. then the tax ministers sign off, which is what is called a tax ruling ar a comfort level and then they go and set up the structures. so it would be the same thing as a foreign firm going to the irs first and saying here's what we want to do. how do we reduce our tax burden? and that -- >> the catch is it's not
2:45 pm
illegal, right? >> exactly. it's not illegal. and price waterhouse coopers is the first to say we're not doing anything wrong. luxembourg is saying we're not doing anything wrong. they're working with the confines of luxembourg law which the european union is now investigating because i want to give you an example. in 2012 alone, about $95 billion of profits from u.s. companies flowed through luxembourg. $95 billion. and that $95 billion, they paid $1.1 billion in taxes. that's 1.1%. if that were repatriated to the u.s., it would be about $30 million. >> with all due respect, not being illegal doesn't make it unseemly. you look at ireland. everybody's going through ireland and they're taking heat for it. so the rolling stones got slaughtered. >> i totally agree. i'm not saying i think it's right. i'm just saying the problem is it's not illegal so they can get away with it. >> it's not getting away with it. it's their law. what do we do? >> companies are saying we work
2:46 pm
for shareholders so why wouldn't we do this? that's a very sal i had point. valid point. into luxembourg into the united states in 2014 was $416 billion. that's a big number. that's also the debate we're having about tax inversions. where you have a sector of the population saying we're allowed to do this, you know, this is how companies operate. and another sector certain senators and members of congress are saying shs wrong because this is money that should eventually be coming back to the u.s. treasury, not other countries around the world. >> no doubt like their headquarters or their office in luxembourg is going to be a little hut with a postal stop where hundreds of companies all send their headquarters to it, right? >> right. >> if you go there, it's literally going to be a door with some postal clerk behind it. there's no one there. >> a lot of times it's a postal clerk. in one instance they found an intern there type ago way. they set up these subsidiaries and holding companies and lend money to this holding company. then that interest is deducted. that's less that you're paying in taxes. but most of the time there's no real business actually there. and again, luxembourg is saying
2:47 pm
we're not doing anything wrong. the reason american companies want to come here is because we have a good business climate. it's politically stable so they're trying to -- >> ring henri has done a great job there. >> there's sort of a twist. >> is he also at your table tonight, by the way? >> i wish he was. i'd be, like, dude, what's up with your tax law? >> i hope you before i that conversation up. but i do want to mention something that's ironic. the former prime minister of luxembourg is often credited with setting up the structure. he's now president of the european commission. the european commission is a branch of their european union that's now investigating luxembourg. it's going to be interesting to see what happens. >> great investigating, as always. thank you very much for sharing the findings of your investigations. and check out the full report on cnbc.com where we take you through some of the major u.s. companies operate in luxembourg all thanks to you. you rock. >> thank you. up next, why something the post office said, not in luxembourg, but here, may be the most bullish thing that you have heard all day. >> and we continue to mark our
2:48 pm
25th anniversary year here at cnbc. you're probably wondering what we're doing talking about all these tables tonight. it's because we are looking at all the people who made the biggest impact on our first 25 years and those we expect will influence the next quarter century. one of those people is disney ceo bob eiger. he's going to be joining cnbc live today. he's going to be on "closing bell." so do stay with us here on cnbc. the cnbc realtime exchange market snapshot is sponsored by in interactive brokers. when change is in the air you see things in a whole new way.
2:49 pm
it's in this spirit that ing u.s. is becoming a new kind of company. one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya. changing the way you think of retirement.
2:50 pm
i'm just looking over the company bills.up?
2:51 pm
is that what we pay for internet? yup. dsl is about 90 bucks a month. that's funny, for that price with comcast business, i think you get like 50 megabits. wow that's fast. personally, i prefer a slow internet. there is something about the sweet meditative glow of a loading website. don't listen to the naysayer. switch to comcast business today and get 50 megabits per second for $89.95. comcast business. built for business. the postal service has some very big news for everyone who hopes to buy, sell or maybe even receive a christmas present this year. >> cnbc's morgan ben.has more of the holiday shopping indicator. morgan? >> shipping indicator for now, the u.s. postal service is bracing for another record season, ex-specs to ship between 450 and 475 million pack onliables this holiday season. that's 12 to 14% increase over
2:52 pm
year and driven largely by e-commerce. that's on top of the more than 12 billion cards and letters expected to be mail eed as well it is introducing sunday delivery in major cities starting mid-november and will deliver on christmas day. that's important. last year, ups and to a smaller extent, fedex, failed to move 2 million packages in time for christmas, the postal service didn't have the same problem, because it partnered with amazon for sunday deliveries. as for ups and fedex, they expect strong growth, 11 and 9% respectively and both have plowed money into upgrade, increased capacity and more workers. all three carriers insist they are ready for peak season, between them, a projected, get this, 1.35 billion packages will ship and this's going to max out networks that are nuller in rabble to weather, trucking short alps and the very real possibility that another spike in last--minute online shopping.
2:53 pm
interesting to watch the shippers and see how they are holding up on december 26th. guys back to you. >> morgan, thank you very much. so just 48 days left until christmas. our contributor says that will be the best christmas in years. courtney reagan, here as well. jan, why are you so bullish on the holiday season? >> i'm even more bullish now. look at the numbers that came out this morning. up employment claims, down to nothing. got became growth the first time in, what, forever. the best consumer confidence in a long time and probably $50 billion in the consumer's pock net the fourth quarter from gasoline instead of 30 billion i was projected when i was overly optimistic three or four weeks ago. now, i'm completely overly optimistic. >> the other watch i think the data sells one story, perception is something different. a survey out of deloitte recently, i was very swayed by it, spoke to more than 5,000 people. 29% of 5,000 think we are in a recession and never got.to you the of that recession.
2:54 pm
another 11% think we are headed back that way. the numbers may show growth, gas prices are following, if people feel crummy about the situation, will they spend at christmas? >> deloitte is projecting a 4 1/2% growth for christmas sales. >> i say, this people always feel crummy. do. they? >> when asked. nobody says i've got plenty of money and things are flush. nobody says that. people are always negative and holiday sales surpass because little kid comes up to you, like, daddy, i would like a new bike. >> i will say -- >> the new bike. i talked to a couple of retail ceos recently and asked them what they think about the forecast, testimony light, the 4% had.plus growth and say it is going to be tough to get there we hope we don't have to give it away. >> i want you to riddle me something. brian and i were going over e-mail this morning on this particular topic, a report came out from challenger, gray and christmas essentially saying the number of mapped layoffs in the
2:55 pm
u.s. by employers rose about 70% in october, right? but it was led by mapped layoffs in the retail sector, i was like that must be a bad sign going to the holiday season. brian came out, maybe it is just like -- >> i didn't say it is it is sears and radioshack. all it is. most stores said they would hire more. >> macy's hiring more, kohl's hiring more. >> sears firing 5,000 people. radioshack. 6,000 there. two giant retailers. >> i don't think that's a issue. the issue, we are having growth in employment, 2 million more people working this time that last year, a little bit of became growth we got this big bone us in going into the lower income consumer product from gas leap, from all energy prices fall willing. so, it's gonna be hard to not to have a good christmas selling sea accept. the question is who's gop nah get the sales, because we know a lot of it's gonna go online. so the brick and mortar guys could be in trouble. >> who? >> you heard howard schultz from
2:56 pm
starbucks the other day say sales in my brick and mortar stores and males are tough. that's just traffic. >> just coffee. who gets coffee for christmas? why we are not friends. gift cards. last rev fume of the up imaginative. >> surprised how many people give starbucks gift cards. i shred every gift card at christmas. dying retailer, radioshack, shrinking retailers. >> give us three top picks for holiday. >> i'm a big fan of macy's for holiday, great omni chapel retailer. i think dick's will do well. >> what? >> i think that people are underestimating how strong they are. >> speaking of firings, they fired all their golf pros. >> yes, they did. walmart going to have a really good christmas, because the lower end consumer is going to be strong and really well set up for it. >> i don't know. i hope you're right, jan, a rough go for wal-mart lately, their traffic is negative, same-store sales are flat at best. i hope they can eek it out.
2:57 pm
opening up all those rem gisters so folks won't have to wait in line to try to get them into the stores. give them a were to be more convenient. >> pelt smart rocking it. a lot of puppies under the tree this year. a good pet gift giving business. >> what happens in jap? all those cute puppies end up in the shelters, mark my words. not joking. >> what? >> thank you. >> yeah, the biggest surge in the beginning of the year bus everybody, you know, gives their kids a little puppy, whatever for christmas and realize it is a lot of work and end up in the shelters. >> andy will take them home. >> jan and courtney, thank you. >> people shouldn't do that. >> of course they shouldn't do that >> one last check on the markets after the puppy break. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score, powered by starmine, will help you
2:58 pm
execute your ideas with speed and conviction. and it's only on fidelity.com. open an account and find more of the expertise you need to be a better investor.
2:59 pm
dad,thank you mom for said this oftprotecting my future.you. thank you for being my hero and my dad. military families are uniquely thankful for many things, the legacy of usaa auto insurance could be one of them. if you're a current or former military member or their family,
3:00 pm
get an auto insurance quote and see why 92% of our members plan to stay for life. this is a very special night for us. cnbc's the next 25 will air live at 6 p.m. eastern tonight, brain. . yeah, should be a great time. honored to be a part of it by the way, hopped to toss it to "closing bell." starts right now. >> and welcome to the "closing bell" on this thursday. i'm kelly evans at the new york stock exchange. quite a day. i'm bill griffeth. the markets top to trade at or near all-time highs, if in an actively map ammed mutual fund, you may not know it, as we approach the end of this year, hup managers are lagging the s & p badly at this point. andhe

83 Views

info Stream Only

Uploaded by TV Archive on