tv First Business KICU November 15, 2013 4:00am-4:31am PST
just as main street lets go of its stock market fears....trouble could be ahead... in today's cover story.... the new push to fund early education ... plus..... one trader says ben bernanke and janet yellen are looking alot alike these days.... and.... the breakfast club. trades that could brighten up your day. first business starts now! good morning! it's friday, november 15th. i'm angela miles. in today's first look: no bubble trouble in stocks. that comment from janet yellen during her nomination hearing on the hill.... triggered fresh highs for the
dow and the s&p. gold and oil ended the day nearly the flatline. rofits dip 6.2% at nordstrom. the stock dropped after the close on the earnings. and, under the golden arches, mcdonald's plans to spending nearly $3 billion dollars nextg year opening up to 1,600 new restaurants and remodling 1,000 others. mcd is also backing its sales growth forecast of 3 to 5%. a chevron gas pipeline explodes in texas outside of dallas. reports say a construction crew accidentally drilled into the line. no one was hurt. but residents in the area were evacuated doug rothschild of performance trust is here to get the ball rolling us this morning. good morning to you. > good morning angie. as investors are watching the stock market go higher and higher. what is your best advice here, should they be going long the bonds or long the markets or short on both? > i think cash is your friend and and you want to be careful and investing at these levels
because there is a lot of uncertainty out there in the marketplace, we do like nontraditional fixed income places like a unicipal bonds that have taken beating and there's some good value there or if you have your b-r-b-s or find alternative equity managers that are good stock pickers. those are good places. how will the friday trade shape up? we have the hearing yesterday with janet yelling on capitol hill so what will likely be the bonds reaction in the market today? > well the market is has absorbed the testimonies in the confirmation hearings very well. and that's largely because janet yelling may not look like it but she really is ben bayankeys twin. we have seen a lot of very accommodating talk coming out of the confirmation hearings. she has made it clear that quanitatism will continue for the perceivable future. she still not sure at all about the recovery and that the fed's guidance to keep rates low for quite some time are going to still happen. so in terms of tapered talk you have to understand that if he is still stimulus even if they'd do start to taper. we don't anticipate any tapering probably until the march moon. i like of that "ben's long-lost sister." thanks for helping us
out today >you bet. the stock market rallied in reaction to fed chair nominee janet yellen's comments that "did indeed sound" similar to current fed chair---ben bernanke. especially, when she talked about the labor market. " at 7.3% in october it is still too high. reflecting a labor market and economy performing far short of their potential." just like bernanke, yellen expressed her desire to keep the bond buying stimulus program in place, until the unemployment rate falls below 7%. yellen testified before the senate banking committee thursday. the panel could vote on her confirmation as early as next week. its widely anticipated yellen will eventually be confirmed by the full-senate, despite g-o- p members' threats to block her nomination. president obama admits he "fumbled" the launch of the affordable care act. we fumbled the ball in terms of
the rollout.' but we always knew this was going to be hard. there's a reason why folks who tried to do it for 100 years and hadn't done it. at an event in ohio-- the president told the crowd-- health care is a problem he wants to solve. and he's not willing to go back to the old system. as a fix to the new program. the president says consumers can keep their current medical coverage through 2014 and it does not have to meet the coverage requirements under the new law. the president also says healthcare.gov will be able to handle the "majority" of users by the end of november.-- but not all. house speaker john boehner says the only way to fix obamacare is to repeal it. some health insurance companies also responded that presiden't changes to the law could result in higher premiums for consumers. lockheed martin is cutting jobs as u-s military spending slows down the defense contractor plans to lay off 4 thousand workers, or 3 percent of its global
workforce. the cutbacks will happen over the next year-and-a-half and close operations in ohio, arizona, pennsylvania and texas. job sectors include information systems, training and space systems. now that union workers at boeing have strongly rejected a labor contract, the jet maker is searching for a new site to build its 777x-- outside of seattle. the machinist were not willing to make major consessions. and issued a statement saying "we've held on to our pensions and that's big" boeing rebutted "we are very disappointed in the outcome of the union vote" there is still a possibility union workers or boeing could present another offer. in our cover story, one way to train an educated workforce and close the skills gap is to "start sooner." there's now an effort to do that in congress. and when they mean sooner, they're talking before kindergarten. the legislation called the "strong start for children act" would increase access to head start programs for five times as many four-year-olds from low and moderate income families as the number accepted now.
"they get exposure to math, alphabet, all the things they don't get exposed to at home." the cost--four billion a year with state tax money gradually paying more and federal tax money less. supporters say the payoff would come later as increased productivity "for every dollar spent, you get seven dollars 'return on investment.' that's the finding from economist james heckman, a nobel lauriat from the university of chicago." the brookings institution found investing in early childhood education could add two trillion dollars to the nation's g-d-p within a generation and a dramatic decrease in poverty rates. "the evidence is too strong. if we're going to have a vibrant
middle-class, we must invest in early learning." though bipartisan members of the house such as new york republican richard hanna and california democrat george miller support it, tennessee senator lamar alexander, top republican on the senate education committee calls it, "washngton at its worst--a noble goal that sends the long-term bill to state and local taxpayers." cuts to food stamps and uncertainty about health care costs are adding up to trouble at walmart. the company released earnings that topped wall street estimates but revenue and sales numbers fell short. the ceo of walmart says business at its stores and online remains competive and the retailer is bracing for pressure on holiday sales. also, kohl's is cutting its full year earnings forecast. in its earnings report --company officials talked about a surprising decline in sales as fewer customers shop at
kohl's. lululemon stock is sagging follwing an analyst downgrade. lululemon's c-e-o chip wilson, recently blamed some women's bodies for the pants' see thru quality issues. wilson later apologized. sterne, agee and leach downgraded the stock to "underperform" from "neutral" saying the ceo's behavior reflects poorly on the company. shares dropped nearly 4 percent on thursday to $66.21. a stock in the home improvement sector needs a quick fix. shares of tile shop were selling off so fast yesterday, it tripped nasdaq's short sale circuit breaker. the stock plunged around $8 dollars after research firm gotham city recommended investors sell their tile shop stock immediately-- claiming the company puffed up earnings by 200% using its china based supplier, the company denies the allegations. turning our attention to matters overseas.... the eurozone economy has yet to hit its stride. g-d-p grew just a tenth of a percent in the second quarter, as output slowed in germany and
declined in france. economists expect the eurozone's economy to expand only slightly next year.. however, there is optimism in ireland. the country will exit from its three-year bailout program next month. starbucks is on a new business track in europe. starbucks coffee and shops in a test.. the coffee chain is opening stores on trains in switzerland. next week starbuck stores will be on board trains out of geneva. the coffee company is making the run in attempt to expand its brand overseas. no plans are set you for a similar test in the u.s. what may have been a good idea on paper, falls flat on twitter. jpmorgan chase scrapped plans to host a twitter q&a with a top investment banker. instead of asking questions, twitter users took the opportunity to air greivences with the big bank. the experiment resulted in a flood of nasty tweets. jpm abruptly cancelled the q&a , stating on its site "bad idea. back to the drawing board."
the ipo calendar is a full one. yesterday-.publisher houghton mifflin shares rose 33 percent to close at $15.86 in its public debut. today shopping website zulily (zoo-lily) expects to price between $18 to $20 a share. next week...clothing designer ...apparel holdings is expected to price at $17 to $19 a share. and gas transporter navigator holdings is on track to price between $17 to $19 a share. americans contributing to 401k programs at the office are on a saving spree! 401k values are hitting record highs as the roaring stock market continues to climb. "average" balances reached $84,300 in the third quarter. up 11% from last year, according to fidelity investments. who could top three billion dollars? that's what investors are asking, after social media company snapchat reportedly rejected that very offer from facebook. investors are watching to see if the photo and video app has another bidder waiting in the wings. both companies decline to
comment. stop here if show is long snapchat's founders may be taking a lesson from instagram. facebook bought instagram for a billion dollars last year. and many called the deal undervalued. sony investors "got game" ahead of the new playstation release. the stock bounced 4% yesterday. playstation 4 rolls onto the market today. the game console is getting fantastic buzz from early reviews. sales of its previous release, p-s-3...hit 80 million units worldwide. samsung is reportedly upping its game against apple-- with a hot new smartphone design. according to bloomberg news.. next year-- samsung plans to release a galaxy smartphone with a display that wraps around the edge of the device. there's no comment from samsung. still to come where to find the most affordable homes in the nation... in today's traders unplugged - a "social media sensation" -- is it better to own shares of twitter or facebook? and,are investors too starry eyed by the stock market? bill moller takes us to "the danger zone" next.
columnist for the chicago tribune. the enormous markets gains have drawn a lot of regular folk back in buying in. > the true, they are finally getting over their fear. for five years they coward. they did not buy bonds, they did want anything to do with the stock market, gold which is down 20%, but now all of a sudden they find the stock market keeps hitting records and they come in and and i hate to say this but, this is probably a more dangerous time than when they were scared. you & a number of analysts are saying, caution needs to be applied now.expalin how. > so, i am not telling people to run away from the stock market they have been in it for along time. but someone who sees it at 36 records now and says okay it must be safe. when stocks get pricey and there kind of pricey now, not crazy pricey but pricey. there's more danger that they will go down. we do not see a disaster hanging there but they could go down 5 to 10%
based on price. isn't that almost inevitable that there will be some kind of correction? > absolutely, people they get into the stock market have to know that when you see record prices that doesn't mean that there will not be a correction, you have to have a correction. corrections, like every three years and average awful markets that we saw which go down 20 percent are more. those happen every five years on average. when you come in you have to know that that's part of the game we just don't know what the trigger will be. the challenge is a lot of people who are not buying it now, when that correction does happens; then they panick, then they sale. > if you come in, come in with a little and say you're going to stay after all people go back to haul after the the last disaster and that was the worst disaster since the depression. gail marks jarvis, thanks so much. >thank you. thank you bill. as "home prices" rise across the country-- the national association of home builders reports american's ability to "own a home" is
becoming more challenging.. according to the report-- the most affordable cities include indianapolis, syracuse, youngstown, harrisburg and buffalo. california cities rank as the least affordable, along with new york city. still to come..... it's a traders unplugged friday-- with the guys chewing over ways to invest in breakfast.. . and-- later in chart talk... new "options" for investors looking to make money on twitter. we'll be right back! still to come..... it's a traders unplugged friday-- with the guys chewing over ways to invest in breakfast.. . and-- later in chart talk... new "options" for investors looking to make money on twitter. we'll be right back
it's time to get real-- as dr. phill would say. joining us from the floor of cme group traders alan knuckman and james ramelli are here for another round of traders unplugged! good morning we are good to go at topic number 1 1)cereal killer - kellogs and general mills are cutting jobs on soft cereal demand--what's the best way to invest in
breakfast? > well for me it's the breakfast table. at my house is william sonoma. william sonoma stock came down by 15% after highs. you have to look at powdery barn, you have to look at restalm they have figured out this internet and they monetize it very well. i am looking for about a 30 percent jump in this stock and trading between 56 and 66 and looking for it to get up to 72 or so. > > i like those stocks. i think that maybe a little bit of a strech as far as the play on breakfast goes. i'm looking at dunking brands. this stock is upalmost 45% year to date. so it has ran up quite a bit, however it is just off its 52 week highs and trading with a really good looking chart. one of the best looking charts out there. it's right on support and its implying another $2 higher and by the end of the year i will have a $50 target for that by end the end of the year. > william sonoma sells $40 gravy and $40 cranberries, $72 biscuits those guys are in the crazy business and people are paying. topic 2)fb unlike -mark zuckerberg who started up facebook says about twitter:
'they drove a clown car that fell into a gold mine', is fb or twitter the better buy? > > i can't believe on saying this but i think face book is a screaming better buy than twitter. face book and twitter are two completely different businesses. faced book is profitable and twitter is not. i think the twitter of evaluation is ridiculous here is way too high to have a lot of problems as far as monetizing their business goals. it would be like buying in to face book after the ipo when they still haven't figured out their mobile revenue sources. > i would say neither but then i looked at a little bit further. faced book still has a lot more upside. if you look at the the multiple serious than a hundred times. but linked in and it is at 700 times. topic 3) blockbuster ending - it's curtains for the former wall street darling-- where do you turn? - nflx or maybe even dish? > this was one of the best performance stocks of 2000 and 2010 it's amazing they had a chance to buy netflix for $50 million and net flicks is only a $20 billion company. i don't have an answer, that is the
most ridiculous thing i've ever heard once i saw that number. $20 billion! > > i think that net flick's definitely has some more short term upside potential here. since they have sold off hard on earnings. the sack has been rattling, but at a much more moderate pace than the initial run the. i like to see moderation in the up side here. it has more to go its trading around 342 big time support at 335 i'm going to leave it at that level. > technology changes everything very quickly. bonus round question--- shopping hours on thanksiving.. which one is the real retail ticker symbol: a-kss b-shop c-drop d-spend > >kss. >it's going to be all of them. it's kss - kohl's thank you guys. first business continues right after this.
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couple of headlines stories, including twitter. the options trade today for the first time. you're a great options trader. what will be you're first play here? > yes absolutely. you know looking at the options is one thing we do know is that the stock is tough to borrow. you know the usual relationship between options will be skewed. so, pert will become comparatively expensive. as a guy who would not owning twitter at lower levels, i am selling some of these very expensive round the money put to buy stocks at about a 10% discount. > you say lower level stocks is trading around 42 or $43 here. so how low do you want it to go? > absolutely i will be a buyer somewhere around a $35 level, which you know would be selling by the $37 strike plus of premium here. up around these levels here i think it has some room to fall before i become interested. best wishes on that trade and what about cisco, speaking of falling stocks? > some really bad news on the revenue front. the earnings side is always fine, they can manufacture earnings and it's tough to manufacture revenue,
with the guidance falling 8 to 10% when they're looking for about a 4% increase, the stock got hit hard. but the market overall shrugged that off so i think it highlights that as long as key wee the ecb now looking to join that party is in place i think the market is just rejoicing and not really looking get any kind of fundamental news as a bad situation here. this market is resilient. thank you tim! > you bet angie. that's just about does it for today.. coming up monday-- randi zuckerberg --will be here! she's an author and the sister of facebook ceo mark zuckerberg. she is out with a new book and will be here to talk about her life as a dot com-mer until then, from all of us at first business.. happy weekened!
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