tv Nightly Business Report PBS May 13, 2013 6:30pm-7:01pm PDT
this is "nightly business report" with tyler mathisen. brought to you by -- action alerts plus is a charitable trust portfolio that provides trade by trade strategies. online, mobile social media. we are the street.com. hitting the malls. that is what americans did last month. while they were there they shopped. what are they buying?
>> banking on diamond. j.p. morgan chairman under pressure. are investors better off with jamie dimon at the helm. >> how some are doubling their salaries in the process. all that and more on "nightly business report" for monday, may 13. good evening. welcome. stocks took a bit of a day off again today but the consumer is not taking time off. >> you are absolutely right about that. american consumers are doing well and in the mood to spend. cash registers were ringing up more sales than expected in april and offering hope for some economic growth this spring. government figures out today show that retail sales rose a better than expected .1 of 1%
last month. americans paid less for gasoline. we will get more insight into the health of the consumer this week and next week when wal-mart, macy's best buy and tiffany will be reporting earnings. >> here with a closer look, joe feldman. welcome. susie ran off the names of some companies out with results within the next few days. wal-mart, macy's, nord strom, tiffany. >> the discounters continue to do quite well. people are shopping for basic items, grocery related household it items. we continue to see that. last week costco reported sales
numbers that were quite good yet again. we think wal-mart and target will sound pretty solid. >> and a couple of stocks that you are recommending to investors to buy. tell us about best buy, whole foods and pet smart all different kinds of companies. why do you like them? >> best buy is a turn around story. everybody left best buy for dead thinking amazon was going to take over. the company has been on a big effort to cut costs. they have brought down prices on their products so they are a married with anybody on the internet. you have the dynamic where tax collection for internet sales is being pushed on the states. where it is happening you are seeing sales trends at best buy pick up a little bit. if you can get more sales through the door at best buy and attract those customers with
prices that are at marripa paro a name like pet smart or whole foods they haven't really participated in this rally. there is nothing wrong with the companies. they are still doing the same thing. there is still solid growth. pet smart is a play on the housing market a little bit. household formation drives pet adoption. there are two names that we do like. >> i thought whole foods had a good report last week and the stock gave it a good pop. >> that was great evidence of the fact that it had been lagging. and it was a misread on really the underlying trend there. the trend was fine. and people, investors were a little nervous that sales had decel rated. you saw how the stock came back up. >> i want to go back to best buy. don't they have a massive real estate problem? >> the stores are still highly productive. they are getting good sales per
square foot. the cash flow generation is quite robust. >> tell us about jc penney. new management. would you buy the stockt at $18? >> if we are looking at the longer term we think they can get things right. nearer term i think tougher. once the promotions do come back into play and start to attract that customer we think that the earnings will start to follow through. that is probably when you want to buy the stock. i think mike coming back at ceo is going to help and drive the promotions. i think we need probably another half year before we seet that starting to translate into stronger sales. >> thank you for being with us. the gap is another retailer getting a lot of attention these days. the stock is up 30% this year and it's expected to report strong earnings next week. the gap is popular again with shoppers after a long stretch of being criticized for fashion
misstep. tonight we take a closer look at the turn around at the gap as we kick off a week long series otcomeback companies. >> the turn around for gap inc. has taken nearly a decade now that the puzzle pieces are in place consumers and investors are falling back into the gap. >> the denim seems to be better. i like the washes. i like the fit. that was always a draw at the gap. but now their novelties i like, as well. >> wall street credits improved supply chain, e commerce and the brightly colored skinny jeans for stronger sales. after years of what many described as being stuck somewhere between h&m and j. crew gap seems to have rediscovered its sweet spot. >> people have a preos
bit on the leadership team. they have done a great job of building the business. i think what has been interesting is the product has turned and embraced the message of what gap stands for. >> gap's fourth quarter profit increased year over year and operating margin improved to 12.4% in 2012. april same store sales increased 7%. the retailer increased first quarter earnings guidance and s&p upgraded the credit to investment grade. ceo and chairman says gap inc. has been executing the strategic plan to become a global retailer with a dominant portfolio of brands since 2008. we have made meaningful progress each year and are pleased that investors have taken notice especially since early last year. gap shares have returned 78%
doubling the performance of the s&p retail index. though some question whether the strength is sustainable. an under perform on the shares concerned about the recent departure of creative adviser. key bank has a hold on the stock believing the shares are currently fairly valued. but the company is only looking forward. part of the growth strategy includes international expansion. gap says this year for the first time it will be entering hungary with gap stores. mexico will get a banana republic and costa rica will get a gap and a banana republic location for the first time. for "nightly business report" i'm courtney reagan. >> tomorrow we continue our series on companies making remarkable comebacks with a look at yahoo. on wall street stocks ended
mixed. concerns about a weekend report that federal reserve members were mulling over a time frame to start scaling back the bond buying stimulus program. no comment from the fed but the dow did end 26 points lower. nasdaq up by two points and the sp added a fraction of a point. shares of jp morgan rose 1.5% today. jamie dimon's tenure and performance come for a vote next year when they decide whether or not to separate the dual role as chairman and executive. he has been criticized for huge losses following trades raising concerns about oversight. according to a report in the wall street ju"wall street jourf
it was separated he would consider leaving the bank. if he does leave jp morgan stock could get slammed. shares could fall by 10% or about $20 billion. is jamie dimon the man? what does this say about his performance since he became ceo in 2005? >> jamie dimon under his helm, the stock price has performed better than any other bank ceo. jamie dimon has made investors money. my report talks bet the market value of the company could decline by $20 billion if jamie dimon stepped down as ceo. you would lose somebody who has made investors a lot of money. the other reason is i don't see a clear successor at jp morgan.
jamie dimon is very valuable, s to valuable. that is the important point the board needs to take up. >> do you believe that mr. dimom might leave? >> i am not sure if he is bluffing or serious. let's take that remote possibility seriously and that creates a new degree of management risk under certain circumstances if he were to go you would see the stock price decline i think by about 10%. >> does this vote really matter? from what i understand it is a nonbinding share holder vote, even if they vote in favor of splitting the role it is up to the board to decide whether or not they accept it? >> if over 50% say they want to see it split i think the board has very serious decisions to make. i don't see the splitting of the
two roles as my issue. the bigger issue is does the board ensure enough transparency, accountability and oversight? i am going down to tampa at the meeting to ask the directors, be reassured that they have that proper oversight. i think that issue transcends the issue of the chairman ceo separation. >> does it tell you anythingt that 8 of 11 of the direct reports have left in the last couple of years? >> you have regulatory tail risk. jp morgan is in the line of fire. many agencies are taking a look. the annual report. expect more action to come. and you have seen so much management change the company can ill afford to r5067g9sdser r can is -- lose it at a time like this. a lot has been made on the board
of directors of jp morgan is the former ceo known to be a really tough manager and good questioner of practices, business practices. how important is all of that in terms of oversight? >> that is extremely important. co authored a letter last friday saying that he has adequate oversight and thinks jamie dimon should remain ceo. i have covered banks for 25 years and i have never met one director on the board of jp morgan. that is why i am going to annual meetings for the first time in my 25 year history of doing this job. he is 73 years old. is lee raymond today the lee raymond of 20 years ago. perhaps jp morgan's tilting the balance in favor of jamie dimon
we bewigin with biogin. shares are up more than 50% this year and today they continue to rise closing at $222 and change. investors taking a second look at take two interactive after the video game developer reported higher than expected profits after the bell. also raised the outlook beginning with the current quarter. the shares were down a fraction in the regular session and then surged more than 5% in after hours trading. the tv networks begin preseason sales meetings, abc says it will begin to live stream programming in some cities on mobile devices but only to paying subscribers to cable. disney shares touched a new all-time high at 67.52 before falling back slightly at the end
of the session. and shares of black berry gained ahead of its live user conference this week in part because of favorable analyst comments on its operating system. it closed at $15.88. and google set a new all-time high today $882.47 a share before falling back a fraction. investors have been bullish on google for a while now. shares have set new all-time highs gaining almost 6% during that time. the editor and chief has apologized for the actions of some of the reporters who accessed sensitive data about how clients use the bloomberg information terminals found on just about every stock trading desk on wall street and used by the central european blank and germany central bank all examining whether there could
have been possible breaches of data usage. outrageous is president obama described the target of groups. speaking at the white house the president said he will not tolerate the targeting of specific groups by a federal agency. >> the irs has an independent agency and requires absolute integrity and people have to have confidence that they are applying it in a nonpartisan way. and you should feel that way regardless of party, i don't care whether you are democrat, independent or republican. >> joining us on the fallout of the admitted bias. what if anything did we learn new today from the president and his aides? >> one was the president of the
united states decided to eject unequivocal anger of what has been reported. we learned when anyone learned of the scandal jay carney said while he and the president didn't learn about it until friday when news reports emerged that the white house lawyer, the president's council had been informed on april 22 that the report within the irs was about to be completed, not the substance of the conclusions but that the report was about to be completed. >> what about the reaction on the hill? what have you been hearing from lawmakers? are there going to be hearings? there has been some talk about looking into possible criminal behavior. >> this is one case where the partisan differences have melted away and democrats and republicans are both saying this is unequivicly wrong. we need to have congressional
investigation. there will be a hearing on friday and the senate finance committee shared by democrats said they are going to have hearings too. it is an opportunity for democrats to say we don't want conservatives treated unfairly either. >> how much staying power does this scandal have? does this one have legs? >> it is only going to have legs beyond the irs if somebody can show a connection to the white house knowing about it and condoning it. what put nixon is presidential involvement. there is no evidence oft that so far. >> reporting from the white house for us tonight. coming up on the program, a new way to give your career in technology a boost. and maybe even double your salary. first let's take a look at how commodities, treasuries and fai.
most money raised by newly listed companies in at least five years. chrysler is recalling 469,000 jeep grand cherokees and jeep commanders made between the years 2005 and 2010 because they can shift into neutral without warning when the vehicles are started up. chrysler says the problem has caused 26 crashes. the company began looking into the problem early last year after a customer complained that the car rolled away. workers who are skilled in information technology and computer programming are some of the most sought after in the whole economy and now potential employees may be able to pay to get years worth of i.t. schooling in just a matter of weeks in order to get one of those coveted jobs more and more of us are doing just that and it is paying off. >> reporter: what if you could get super powers from a
nine-week crash course? that is the promise of a san francisco program that promises to take people from 0 to beginning web programmer in just over two months co founder is saying he will have the programming chops of bill gates or mark zuckerburg overnight. but graduates have learned enough to land $80,000 a year jobs out the door. >> after about two months 80% have found jobs. >> reporter: to enlist you need $12,000 and you have to survive the screening process. >> interest and motivation. >> reporter: only 20% of applicants. you don't have to be a math genius. >> most recently i was working as a writer. >> i was a technical training worker. >> she was frustrated with the
lack of technology tools from public schools. >> i appreciated that boot camp. it packed so much in and i never had a chance to be bored or restless. >> guild is another san francisco start i trying to address the programming shortage. it analyzes the code and gives them a score that kaecompanies use to recruit. >> anything anybody is doing to encourage people to take on programming and learn programming and therefore help on the supply side of the equation we love that. >> reporter: even established operations like pay pal unit are hungry for fresh approaches. >> we hire approximately 25% of engineers into entry level roles. and those come from universities or from programs like the boot camp. when we look for the candidates obviously their experience is most important as things like
drive, entrepreneurial passion and learning agility. >> reporter: these days demand for programmers is so fierce that it is not so much about who you know or where you went to school as what you can do. for "nightly business report" i'm john fortt. >> we certainly need to see more of these kinds of programs. every ceo you talk to says we need more engineers and more people studying math. who wants to go back to school for all of that? if you can take a course like this and have the money to pay for it. >> there is an investment that hopefully will pay off. i am going to tell my 7 year old study your math. don't just play on the ipad. how many mobile phones did you own? more than one? a new report from the united nations suggests that mobile phones will soon outnumber the world's population. the un predicts that mobile
phone subscriptions will surpass 7 billion and the agency says more than 60% still has no access to the internet. >> are you a one phone woman? >> i am a two phone guy. i am surprised by that number. 7 billion phones. that is stunning. the un says it so i guess it is true. tomorrow we will hear from the national federation of independent business. we will have a report on the rising number of auto loan delinquencies and data on import prices for april. that and more is tomorrow right here on nbr. >> for tonight that's it for us for "nightly business report." thanks for joining us. >> have a great evening. we hope to see you right back here tomorrow evening.
>> adrian, adrian pitts. >> oh, yes. >> the great martin ellingham, who, as you all know, abused myself and others at st. mary's but taught us a thing or two about medicine. >> panic attacks. i sometimes have small panic attacks. >> what brings them on? >> blood, the smell of that, sometimes just the sight of it. >> your secret's safe with me. [quirky instrumental music] ♪