tv First Business KICU December 20, 2013 4:00am-4:31am PST
no take backs... why its getting more challenging to return christmas gifts this year. in today's cover story.... how the massive security breach at target points to a much larger problem. plus.... the steps to take-- to turn your hobby into a business.... and.... in traders unplugged. christmas comes early for those on the right side of the trade. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning! it's friday. december 20th. i'm angela miles. in today's first look: the dow does it again.one day after a record run wednesday, the blue chips make it another all time high close on thursday. the nasdaq however, tumbled 12
points, while the s&p gained 1. facebook joins the big leagues of the s&p after the close today.shares trade at $55 dollars that up 100% for the past year.the fiscal crisis threat is not over. secretary jack lew is warning congress not to dilly-dally. he says the debt ceiling needs to be raised by early march.and, a wing and a prayer...the wall street journal reports-- mcdonald's is hoping for a mighty miracle after getting stuck with 10 million pounds of wings-- frozen in storage.the chain overestimated demand. scott bauer of trading advantage joins us on this friday morning. good to have you as always on our show. >>thank you. >>i was watching the volatility index yesterday and it was sinking at one point. is that a telltale sign? >>this was crazy angie and we had talked about this a couple days ago. we saw the vix trade almost 16 1/2 right before the
taper announcement on wednesday. then yesterday we saw this thing trade down all the way under 13. it traded 1290 and it closed up a little bit on the day. what this tells me was that there was so much anxiety put into the marketplace short term, meaning december, meaning this week. not even going into the new yearbut so much anxiety that just got deflated out it that traders included really didn't know how to position themselves after wards and that's why we saw this huge fluctuation down below 13. now it's settled in to a more normal range---high 13--- right around 14. i bet this is where we see it remain going forward until the end of the year. >>gold is tarnished. is this a buying point in your book? >>i think it is. i think we saw a big overreaction. we look at two things over the last 6 months that people were so afraid of. they are the taper and the 3%. both of those things now are commonplace.both of those things are now
accepted into main street. but both of those things are what sent gold diving. i think this is a really good buying opportunity with a really tight stop. >>thank you and have a great trading day scott. >>thank you and same to you. that's right angie.in today's cover story...many consumers are taking notice of the 40 million credit and debit card accounts potentially compromised by target. and so should corporate america.according to experts who say most companies are more vulnerable than realized. "i think it's a chance we take every day." despite that risk of stolen financial information... americans keep using plastic... even at target...victim of what experts describe as one of the nation's largest retail security breaches. "do we stop using credit cards and go to cash? that's not realistic."
cyber security blogger brian krebs said hackers swiped customer account numbers at nearly all target stores nationwide from november 27 to december 15. four days later, the retail giant posted a notice on its website admitting to "unauthorized access to target payment card data".adding "we have worked swiftly to resolve the incident."according to target the credit card crime began around black friday. "i'm surprised it's been that much time, and they haven't sent out emails or something." security expert rebecca bresee says such mass cyber crimes are likely to increase. "the senior executives of companies are not spending enough to protect people's information. only about 3-5% of it budget is spent on security now." in addition to corporations bresee also blames sophisticated criminals. "these hackers are very, very good. they're all over the world. and basically they've sort of replaced mob crime."
bresee says companies hit by cyber crimes will not be able to close the door on the problem quickly. "security is viewed as an expense. but now it is becoming more viewed as a business enabler. if i don't have security, and i lose my brand equity -- such as is going to happen to target right now -- they're gonna be affected by this. and this is going to hurt their brand." the secret service is investing the incident. investigators believe the customer information was stolen through software on machines that swipe credit cards. reports say hackers pulled in enough data to make fake copies of customer's credit and debit cards. target shares shed 2% yesterday. traders are said to be using the latest survellience techniques hoping to turn a profit. according to the wall street journal, tech company genscape makes it possible for traders to gauge moves in the supply of oil reported by the government.it's not illegal and costs trading firms a reported $90,000 per year.the company tells the journal it tracks oil shipments leaving ports and through high tech devices is able to inform traders what the government is "about" to report.other tech outfits track the performance of retailers by counting cars in parking lots.
the conviction of sac capital's fund manager michael steinberg is bringing more issues to light. steinberg was convicted for insider trading on wednesday. now fbi agents question whether employees used inside information to make trades in shares and options of companies such as weight watchers, intermune and gymboree.the conviction might mean fund founder stephen cohen could face further investigation. the sec is charging a former microsoft executive with insider trading. a former senior portfolio manager and his friend are accused of obtaining confidential information then trading company stock.the two allegedly made nearly 400 thousand dollars in the scheme, which dates back to april of 2012.microsoft is helping with the investigation. the senate may wind up holidng a special "saturday" session to vote on the confirmation of janet yellen as the next fed chairman. democrats were planning on a vote to happen
yesterday or today.but now, an aide tells reuters-- republicans and democrats have been unable to agree upon a time.it is however, widely expected that yellen will get the nod from lawmakers to replace current fed chair ben bernanke. most of corporate america is sitting on piles of cash... msn has compiled a list of the companies with biggest stash. among the top three microsoft is listed as having $79 billion dollars, followed by google at $54 billion and apple with $40 billion.corporate cash hit a new all time high in the third quarter at $1.25 trillion dollars. the fifth record in row according to one analyst. there is less stress in the banking sector. a study of the nation's best and worst banks by forbes reports bank failures are down dramatically this year. 24 banks failed in 20-13...down from 51 in 2012 and a peak of 157 during the troublesome times of 20-10.also -- the fdic has fewer institutions on its so-called "problem list." it's keeping an eye on 515 banks this year...down from 888 in 20-11.
startling new statistics about chicken in the u.s. a recent test of raw chicken revealed that half of random samples -- carried a drug resistant bacteria. consumer reports conducted the study, and finds illness caused by the bacteria would be diffcult to treat in humans.bacteria is becoming resistant to antibiotics used to help chickens grow and keep them healthy. consumer reports is pressing for a law to restrict the use of certain drugs. hershey is buying a chinese candy maker in a sweet deal to increase its hold in asia. hershey will pay nearly 5 million dollars for shanghai 'golden monkey' food company. included in the deal - 80 percent of the candymaker's stock, with the rest bought by 2015. shanghai golden monkey has five production sites. it makes candy and snacks sold in several countries. darden restaurants is dropping red lobster. amid declining revenue, darden will oust the seafood chain from its brand. its still unclear whether it will sell it, or creat a spinoff.hedge fund barington capital is putting pressure on
darden to break up its business. in its earnings report the restaurant chain disclosed it will pump the breaks on expansion of olive garden and longhorn steakhouse. darden shares fell three percent yesterday. tesla motors says its charger is not to blame for a garage fire in southern california. the 'orange country fire authority' report says the november fire occurred as a result of an electrical failure in the charging system for an electric vehicle.it caused $25,000 of damage to the garage and its contents.but the model "s" sustained only smoke damage, and no one was injured. tesla says the fire was not related to the car or its charging system, and the charging cable was fine on the vehicle side... with the damage being on the wall side. new york city cab drivers are due some cash. four cab companies are paying more than a million dollars back to the city's taxi drivers. the drivers were overcharged for leasing cabs. back in september, new rules were put into place to help limit how much cab leasers could charge drivers. the limited amount of taxi
medallions in new york city makes it easier for drivers to lease rather than buy cabs. u-s existing home sales dropped to their lowest level in a year last month... with experts blaming high prices and interest rates for keeping buyers on the sidelines.sales fell 4 point 3 percent to nearly 5 million units, the third monthly fall in a row and the lowest since december 2012, according to the national association of realtors. but it was the first time in a year thar prices didn't rise at a double-digit pace. widespread cell phone theft is prompting two california senators to call for a "kill switch". almost one in three u.s. robberies involve smartphone theft, according to the fcc.but critics say a permanent kill switch could bring serious risks, including hackers who could disable mobile devices. it's beginning to look a lot like a challenge. retailers are making it harder to return merchandise this year. sears, amazon, toys r us and best buy are some of the stores that have changed return policies. companies are giving consumers
less time to return certain gifts for a refund.electronics and appliances are expected to be the hardest items to take back this year. still to come: could a santa claus rally strike twice this year? find out in traders unplugged... plus....what "fake" item is flying off the shelves this christmas.. and after the break....bill moller brings us the story of an entreprenuer with sole who is making money one step at time. stick around..
how 'bout this for a career? shoemaker. for sara mcintosh, that's not an anachronism. you design and make shoes by hand & run the chicago school of shoemaking. how do you get into shoemaking. you're an artist. you could have been a sculptor, a pottery maker - but shoemaker? >>i started out wanting to make things so it was a very broad field at the time. and then we were doing a back to the land movement, building our own house, and trying to provide all of the things that we needed for ourselves.i got to a pair of shoes that were starting to wear out and i thought well, perhaps i can make these as well.
>>and now you've got the school going. you're an artist first. did you know anything about running a business? >>no, and over the years i really tried to train myself to keep records and keep costs and things in balance but it has been a process all these 40 years. >>in the last 2 years your student body has grown by a factor of 4 and you're becoming more of a professional business person too. you've hired an executive director. >>absolutely. it was very much worth it because all of those details are not just ingrained in artists. >>now these are some of the shoes that you made? >>yes. >>these are not clunky creations. these are artistic. these are beautiful. >>thank you. >>i assume that when you walk around with shoes like this people say where did you buy them? >>yes. where did you get your shoes! when i say i made them they are amazed. it's such a romantic notion to make your own shoes. >>it's kind of an old world lost art. are your students doing it because it's a hobby or do they
want to get into the shoe biz too? >>i think it's both. they come to me because they're intrigued and they take the 2 day beginning shoemaking class where they make this shoe and they are so excited about the fact that they made something that's so tangible and so important to them that some of them want to continue. >>imelda marcos---there are people that know that shoes are a fashion statement. but these are a distinctive statement because if you made them you walk with a little more spring in your step. >>absolutely. they're very comfortable as well because we build the shoes to the person's measurements. >>how many people in the world do this? >>i don't know. i think there's probably a dozen of us in the united states, maybe more in some other countries. >>well, hats off to you sara mccintosh. thanks so much. >>i appreciate it. thanks bill! from head to hem. a faux fur frenzy has exploded this holiday season! humane options such as vegan leather and fake fur are a hit with shoppers, as better quality materials now make it tougher to distinguish whether its the
time now for a floor fight. the gloves are off-- but have no fear no one will get hurtespecially not as we're playing christmas jams. joining us now from cme group-- alan knuckman and james ramelli. topic one: baby taper - is the taper tantrum by bears over? alan: i really don't think it had any impact. it had a 6% impact earlier this summer when they first mentioned that silly word but now that it's come and gone, we were down 2% of the highs. i think we up and up
more. james: i completely agree. on the annoucement we saw a huge short covering and the market held up pretty well the day following the annoucement. alan: it's just a little baby taper. it's nothing. james: right. what's the difference between 85 and 75? 10 billion dollars. i really don't think we're gonna see that much of an effect. alan: it's not tightening most importantly and they're not raising interest rates, maybe ever. angie: topic two: the new greek crisis - whole foods says sit will no longer sell chobani yogurt in its stores. chobani says that's okay, we're gonna be fine. was that a turnoff for investors. should people buy whole foods stock? james: i like whole foods at these levels. we saw it selloff very hard on earnings, trading at a relatively good discount here. they sell a higher end product and those companies that sell those higher end
products have been performing good relative to their peers this year. so at these discounted levels i'd like to get long whole foods. alan: it's in the$55-58 level. 50 is a key support point, a pivot point. so lean on that level. it's 10% off the highs. if it gets back up to that 66 you should see a $10 move up to 76 so that's about 30% higher than we are now. so it's not a big deal just like the crisis in greece was not a big deal. it didn't bring the markets to a screeching halt by any means. angie: topic three :geek oil - oil now made in labs from algae in less than hour, what would be your energy play? alan: i'm thinking viva mexico here because they haven't been able to tap into the reserves. they have been seeing declining barrels produced. you're gonna see some of the big boys moving. look for exxon. exxon could get to 135 from a technical standpoint. you also have rig, hasn't gone anywhere in 2 ½ years. rig, if they start using more of those in the deep gulf waters. james: i want to stay here in the u.s. when i'm looking to play oil. the surge in u.s. oil production this year but we haven't seen refinery capacity keep up with that pace. alan: so who do you pick? james: valero, tesoro. they're both really good names. i'm long both of them right now. they've had really good moves higher in the past three months as we've seen a lot of institutional money coming in getting long in this.
alan: they can still refine that algae oil. james: absolutely. angie: get ready to get jolly. our bonus round question for today---waiting for santa. since 1929, the s&p has averaged 1 ½% return in december. what other months have similar averages? alan: i have no idea. james: september. alan: that's a good answer. angie: the answer is july. thanks for being on the show. first business continues right after this. hibeeck,
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joining us now is trader andrew keene, president of keene on the market dot com. you like our music? >>love the music. >>it's fabulous isn't it? alright, let's talk about carmax. earnings are coming out today. the stock has been up 50% for the year. is this a stock to buy? >>this stock is unbelievable and it's one of the best looking charts i can find out there. any opportunity to buy it on a pullback, i'll be looking at
that. i look at the charts and i also watch unusual option activity which is institutional order flow. we saw a huge buyer of the january 52 ½ calls for $1.70. some think the stock is going to get above $54 and push to $55. so any opportunity to pullback i would look to get long. i was long it for a while and the day before tapering i actually took my position off so i have no position now. if i can get a pullback at 52 1/2 , i'm going to be looking to buy it. >>where is the resistance? >>i think 52 ½ would be an aggressive entry. i think down to 50 would be a more conservative one so it matters how aggressive you want to be. when i trade pullback, i don't buy it just because it hits my level. i wait to see if it consolidates at a level, maybe some buyers come into the market. so i'll be watching it today on earnings to see how it performs. if it ranges to the upside, opportunities for a pullback, 52 ½ i'd like to get into it. >>let's just play what if. the earnings report comes out and everything is horrible at carmax. what do you do then? >>that's a very similar story to htz. hertz was very, very strong and had a great looking chart. then it just fell out
ofbed on earnings and it hasn't been able to recover yet.like i said, i'm not buying it on a pullback just because the stock sells off immediately. i like to see it selloff and then buyers come into the market. so i'll watch. there's no such thing as a one day event so you can always give it 3 days and see where it could possibly bottom, put a nice tight stop and watch it run to the upside. >>thank you for that andrew. >>thank you. as we take off for the weekend, a reminder to join us next week for a forecast on merger mania. find out what m&a action indicates is in the air for the economy. from all of us at first business, have a great friday!
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