some -- thesigned interesting to them of business. to our viewers here in the united states and those of you joining us from around the world, welcome. coverage of the stories making headlines today. mia goes alld -- things hollywood. allen tells us good news for

hens in california may not be good news for egg lovers. first, let's get you to the top stories we are following. say theyovie theater will begin showing "the interview" on thursday. the move will put the comedy back in theaters after sony pictures entertainment canceled its release. the alamo draft house in texas says that a -- sony has authorized it to screen the film starting christmas day. said its plaza theatre would also show the field. representatives for sony did not uniquely comment. cyberattacks on sony came from north korea. the security council held its first ever meeting on human rights in the isolated nation. north korea had fought for months against the world body, taking up a 400-page report by you and commission.

it is the first to urge that the isolated country and its reclusive leader, kim jong-un, be held accountable for crimes against humanity before the international criminal court. great prime minister failed in his second effort to get lawmakers to back his nominee for president. fellandidate backed by him short of the required 200 ballots. he has only one more chance if next monday, early elections will be called. the u.s. economy roared into overdrive in the third quarter. consumer and business spending fuel to the biggest expansion in more than a decade. it's the biggest advance since the third quarter of 2003. certainly on the heels of 4.6% in the sense -- in the second quarter.

the economy is taking steps in the right direction. being able to withstand higher rates. a look at the boards on wall street. the dow jones industrial average preaching that 18,000 marks. it took less than six months to move from 17,000 to 18,000. right now, the dow is up over .5%. ae s&p 500 is up as well, little more than .25% at 2084. and the nasdaq composite index is in the green as well -- excuse me, it is down right now, down about a .3 points at 4773. crude oil, we spoke with francisco blanche about the future of opec. >> but just don't think that opec as a cartel is relevant anymore. s have thrownsaudi'

out some of the weaker members. we are seeing that in venezuela, nigeria. what i am saying is that the cartel is pretty much broken. >> that is a look at the top stories. two days till christmas and glassman shoppers may be , whoking, particularly men will be picking up jewelry for their loved ones. that is the continuation of a trend. julie hyman here with the details. [laughter] last-minute heroics from the male of the species. >> men tend to be more last-minute in terms of christmas shopping than women. one of the things they will go out and buy his jewelry for their female loved ones. i think that is a safe assumption. >> is not an assumption. it's correct. . >> but jewelry sales have been strong over the longer-term.

mastercard tracks a month by month sales in various categories. for 21 straight months, we have seen jewelry sales rise. first and foremost, it tells you about the consumers confidence and their own personal confidence in their economic circumstances. while i believe jewelry is a need, a technically falls in the discretionary category. to see this growth 20 months in think it is really important. in addition to that, they are buying at a higher price point. the average price we are seeing in these transactions is $2600. so this is not customer jewelry. this is really making an investment in themselves. >> according to ibis world come of the growth in the past five years on an annualized basis with 3.7%, it is a $36 billion market in terms of revenue. that is just jewelry stores. it doesn't count online or sales stores.apartment sale

next year, we are looking at a projection of 2.3% growth at over 3000 businesses. >> why hasn't there been more consolidation? >> sara quinlan says it has to do with your relationship with your jeweler. you are making a large purchase. you have to have this trust relationship. that may be one of the reasons why there are so many independents. tiffany & co. signet are the largest. zales and kays and jerod. foreven those two account roughly a quarter of the entire jewelry market in the united states. it's quite a large market and non-consolidated when you think about it. commodity prices are slumping. we have been seeing that for the last couple of weeks. any pricing power for the jewelers? >> it has a been a situation

where you have been able to go into your jeweler and say, well, the gold prices down, can you give me a deal? they have had relatively good pricing power. mastercardording to and ibis world. we have seen all of these different metals come down. if you look at the breakdown of the most popular jewelry, diamonds far and away is the most popular. that is partly to do with engagement rings because they are obviously a popular item. platinum has been gaining on gold and little bit. it has been gaining in popularity. but the bulk of jewelry if sold is diamond jewelry. >> thank you so much. coming up, new home sales declined in the u.s. find out when we are likely to see some upward momentum. khan of wells fargo joins

us.

cracks new-home sales unexpectedly declined in november. departmentmmerce reports purchases dropped 1.6% to a four-month low. that followed october figures that were weaker than previously estimated. khan joins me from charlotte, north carolina. >> thank you so much for having me. >> novembers new-home sales numbers, are we talking a seasonal blip or is it a cause for concern? overall, why has residential real estate failed to gain momentum this year? >> that is the question that everyone is thinking about. of course, new-home sales disappointed this month. it comes on the heels of lower than expected housing starts, existing home sales, and permits.

i think we are moving into a part of the recovery where we are really asking does this housing recovery have momentum. and i think there are key issues here. if we look at the underlying cost of credit, especially to risky borrowers, i think that is where he a lot of the issues are. >> with the job gains that we have been seeing, shouldn't housing numbers look a lot better by now? >> yeah, we are seeing the labor market increase. it would stand to reason that we should see the housing market increase. but we also have a record number of borrowers that refinanced their homes at very low rates. and with upside risk next year, many of them don't have a lot of incentive to move into a new home. >> what did the regional breakdown look like last month? we saw the west

was the only reason that increase. month-to-month it is hard to follow. looking at the trend, however, the south is the only part of the country where we are seeing genuine increases over last year. the south, of course, is where most of the inventory is when you consider the existing and new home sales market. a 30-yearrage rate on zero mortgage, it is at .38%. that is the good news. the bad news is that the median value of existing homes is on the rise. continue to see low income and first-time buyers priced out of the housing market? we tend to look at first-time homebuyers, we are talking about that 25 to 34-year-old cohort.

many of these in the adults are choosing to rent. if we look at household formations, it is lower than that one million mark. year, withat next labor market improvement, especially for that cohort, as they move out of their parents' home, it will start to increase. that should be good for the housing market. >> i am speaking with anika khan , senior economist at was fargo. point outrk bittner that the share of all transactions fell 5%. why have investors been moving away from these types of purchases? >> of course, when we look at the share of all cash transactions, which are therered by investors, are a lot fewer distressed transactions in the market, more specifically foreclosures. with fewer foreclosures, it

doesn't make sense. the math doesn't make sense for many of these investors. many of them are looking for other opportunities. >> such as? intony of them are moving markets where they can find yield. the underlying momentum, the underlying thing that many investors are looking for is yield. so they may be moving into other asset classes outside of residential and >> the national association of home builders wells fargo sentiment gauge shows confidence in homebuyers --r a di-your high homebuilders near a nine-year-. what has them so confident? >> a lot of these builders are smaller builders. they have been slow to see any real recovery. a lot of them early in the cycle were hard hit by the increase in

land prices. of course, we have not seen that particular issue continue. for many of these builders, they are starting to actually get into the market and get some activity. that is what they continue to see. i would also say, if you look at the components, they are very optimistic about the horizon. they are looking forward. when they consider economic activity and labor market conditions, many of them are very hopeful looking forward. speaking of looking forward, as we head into 2015, what are you expecting from the u.s. housing sen -- housing sector? when you consider what potentially could happen to the --sing market, if there is and we do project an increase in the short-term rate. we do expect an increase in

household formations and that means we should see a pickup in housing starts. we should see more sales activity. and we should continue to see more activity in the overall economy. >> a senior economist at wells fargo securities joining us from charlotte, north carolina. merry christmas. >> to you, too. >> new rules in california could cause an egg shortage in the state. ♪

>> welcome back.

egg farmers in pennsylvania have plenty of potential customers in the northeast. why are they shipping some of their eggs thousands of miles away to california? what is going on here? you are seeing is a classic collision between economics and politics. california has a proposition and a state law that are going into effect starting january 1 that not only require larger egg cages for chickens, but also requires all eggs sold in the from cages of similar sizes. a lot of changes going on to the midwest as farmers adjust their facilities to serve the california market. california imports about a third of its eggs. you are seeing on economics where there is a cost incentive for growers and producers as far east as pennsylvania to actually send eggs 3200 miles to

california because it meets the standards. seem the surface, it might like something simple but this really is not. we are talking about economics and big business. we just had a picture of caged versus cage free hens. what is the difference on how they are taken care of, how many eggs they produce? is there a really big difference? >> those photos, which i took last week in pennsylvania when i , oneed two separate farms which is cage free in one that is conventional. animal welfare groups like the humane society of the u.s. have been confirmed about this size. they say it does not allow chickens to be able to flap their wings or nest or do anything that would be a natural chicken behavior. that is getting to be a greater consumersot only for

but for copies like starbucks and burger king, etc., making sure they are following what they consider responsible agricultural practices. not a lot of difference in productivity parent if a bird is producing, they suspect that is a happy bird. we never really know this. we are not in the minds of the chicken. somef you take a look at of the evidence that some of the animal welfare groups have, some of the project -- some of the productivity stats, there is a real controversy. >> is there any evidence that california rules will result in happier chickens that produce happier eggs? >> there is a lot of research. fall onds on where you the continue our pen and a lot of people believe that space is good in general. we could have human space standards and get rid of office cubicles in the boroughs of manhattan. there are other factors in cases and these animals, the birds tend to flock

together. they get sanitary treatment. they are monitored very thusly. -- very closely. animals, you see them engage in more behaviors, where they are nesting and flapping their wings. this is something that scientist try to evolve. meantime, the consumer is pushing production decisions and ballot initiatives like the one in california. >> does it really make sense to ship eggs thousands of miles across country? >> in the short time, it does because there is economic incentive from california. that is the goal of this legislation. because telephone you such a large state, you get an incentive for other states to change their practices. this is great if you are an animal welfare advocate. this ballot initiative model could be applied to things like sow gestation crates and other animal practices that are not like in some corners.

>> i have to ask you about the new food inflation numbers. what are the numbers telling us? >> this is directly related to what we have been talking about. we have seen some egg inflation this year, up 7% to 8%. some of these factors are not only supply and demand with more demand for a protein, for example. it is still the after effect of the drought we had in 2012 where cattle are still being added onto the market to meet a rising demand during a time when were called earlier. we will see what happens next year. the weather is probably a factor. in the meantime, it is good news for the consumer. >> what will this mean for the consumer going forward? >> you will see more cage creates coming onto the market. you will see a i can prices and probably a new normal at a lower -- you will see a spike in

egg prices and probably a new normal at a lower level. >> you have been watching the rally in stocks. the dow hitting a new milestone, 18,000. that is also a new record for the dow. stocks like nike and united health and visa helped propel it from 17,000 six month ago. the s&p 500 index also at a record. we see energy stocks and others help propel gains there. the nasdaq is not keeping pace, down .2%. as for individual stocks, we're looking at striker. producer of surgical implants is announcing a takeover of smith and nephew. it could happen in the coming weeks. your green down shares in the red after it recalled 6000 of

its coffeemakers due to possible burn hazards.

>> welcome back to the second half hour of "bottom line" on bloomberg television. have you gone to the movies lately? more americans are answering "no." hollywood is hoping 2015 won't be a repeat of the 20 -- the war that was 2014. that was 2014. how do you explain the box office decline this year? >> hollywood is on track to have its worst year since the financial crisis. that is unless we can turn things around.

what is at stake is whether or not they will miss the $10 billion mark. take a look at box office revenues in the u.s. so far, we are at $9.7 billion as of the 31st of this month. we could hit $10.5 billion in of thest two weeks year. not every year can be like last year which was a record breaker with all the films exceeding expectations. in an unenviable position trying to live up to that week after week unsuccessfully. but one of the reasons it was dismal, attendance was down from 7% compared to last year. that was mainly due to an uncooperative calendar pad we had fourth of july during the week. we had the world cup, the death of paul walker. made ath korean threats lot of people scared as well. also just poor movie selection

of your nothing was what people wanted to watch. it did not really gel with a lot of people. >> what were the hits on the misses. >> the hits, "guardians of the "hunger games," i did see that one can have you seen any of these? >> no, i have not >> captain america, the lego movie. [laughter] those were the heads. maybe you have seen some of the misses. "expendables 3," and "noah." have you seen a movie in 2014? the chris rock movie, the dens l washington

movie -- the denzel washington movie, and "gone girl" with ben affleck. i don't want to talk about it because i'm afraid i will give it away. [laughter] how is 2015 shipping up? >> it is looking pretty good pair of it will definitely be a lot better. rent track says that 2015 will be the year where it will come back with a vengeance. they are referring to it as the mount rushmore of franchises. there is something out there for everyone. perhaps he will go see one of those james bond movies or star wars as well. tell me one of those peaks your interest. >> it is not "fast and furious 7 emma" i can tell you that. "fast and furious 7," i can tell you that. >> have a great one. >> for a preview of this year's holiday movies, i am joined by

paul sweeney. paul, you just saw mia's breakdown. it did not shape up pretty well. >> it was an odd year. the year started out pretty well to heading into the summer, the box office was up 15%. but the summer was the real issue. the summer was very weak, then about 15% year-over-year. that is a big drop because the summer counts for affected percent of the annual box office in the u.s.. -- for 50 percent of the u.s. box office in the u.s. on attendance, probably down 6% or 7 percent p at >> five or tenures ago, people do not have this many options. you have netflix, on-demand, people don't want to leave their homes. >> right, that is a big issue.

even though box office over the last seven or eight years in dollar terms have been flat to slightly rising, that is just because of rising ticket prices, including the 3-d surcharge. what the actual attendance has been down low single digits every year. , youu are a theater owner have to make the experience better, better seats, better food, better times, more conveniences. at the end of the day, it is still a hit or miss. >> how much pressure is on theater owners? .t first, these are the times get your popcorn, sit down, sit through two hours of trailers and then the movie will start. younow you are basically -- are the master of ceremonies. you have to make it an all-encompassing entertainment experience. >> we have seen a lot of consolidation among the theater chains. in thisthe screens

country are owned by a for your companies. they also need to invest in their theaters. the capex per theater has gone up as they upgraded dj -- upgrade digital projection and get better food so that theaters are investing more in their theaters than they ever have just remain competitive and in a multichannel world. >> the movies coming up, any of them able to reverse this trend? the hobbit," "into the woods," any of these going to help give 2014 the boost it needs at the end of the year to get over the $10 billion mark? >> i think we are where we are for the year. it will be down 4% or 5%. however, theater stocks have done quite well because everybody is anticipating 2015 will be a big year. it will be a record year.

point $8 billion. forget about $10 billion. it is because you have "star wars close go coming back. have a couple of marvel movies coming out. you have james bond. what folks in hollywood are looking for. quakes talk to me about the ark of "star wars." we're talking about something they came out in the mid-1970's. a lot of folks may have been teenagers at that time. some of them may have been just kids in grade school. thewe are seeing continuation of the circle. some of the old characters will be back in this new movie. they are try to make it multigenerational. >> they are. disney ball lucasfilms earlier this year in a multimillion dollar deal. disneyhey bought -- bought lucasfilms earlier this year in a multimillion dollar deal. most investors look at disney and say this company knows how a nurture and mine

franchising character. >> a 30-year-old franchise. >> yes. expectations are huge. they have already signed off on a number of films in the series over the next four or five years. this is a commitment to the "star wars" franchise. >> we would be remiss if we did not talk about sony hacking. sony pictures entertainment said they will put the film out, limited theatrical release of "the interview" on christmas stay. ont impact has this had sony, both to pull the movie and then to reverse and put it out in limited release? >> this is a difficult situation for sony. this is probably a no-win. from a financial perspective, direct.not but it is really reputation. their reputation in hollywood and with theater owners. >> as we talk about the first

amendment issue, for sony, it would seem that their perspective is, ok, we understand the bottom line. but if somebody is considering or threatening to do harm to theatergoers, the best thing to do is to back off and see if this threat of dates. s. -- threat abate >> i think they proceeded very cautiously. they stepped back. we are starting to see what some of the independent theaters, operators just today saying that they will in fact show the film and sony will make it available to them. so the question of a comes will any of the larger chains announce that they will show the film. >> you talk about the reputational hit. did it take more of a hit when the president of the united mistakeays they made a and they should have discussed it with us at the white house first? >> yes. sony did try to publicly rebuke that. they said it was not us, but our theater partners who didn't want to show the film so we had to

pollitt. so there is a lot of blame to go around if you want to -- we had to pull it. so there is a lot of blame to go around if you want to ascribe blame. do this in a reasonable and thoughtful manner? joining us,ney covering a lot of ground. thanks. merry christmas. when "bottom line" continues, the latin america report. ♪

works it is time for today's latin america report. brazil's central bank is forecasting inflation will remain above the center of the target range for two more years. that reinforces the chance for further rate increases. the quarterly report says inflation will end 2016 above target. if the central bank raises the

year,tes at 12.5% next increases in regular to slices are fueling inflation which has a 37% possibility of reaching its target range next year. the state run oil producer extended a three-day rally to .1% and contributed to the most it rebounded after an investigation of alleged bribery by company executives. meet arguably the biggest ship ever built. this cross between a ship and a giant robot has eight arms on its bow that can claim to an oil platform and lifted onto the ship. passengers, it1

is the widest vessel in the world, stretching more than a football field across.

>> up next, trish regan joins me with a look ahead on "street smart. "bottom line continues in just a moment.

>> to the dow jones industrial average is surging today following the release of the latest numbers on economic growth. trish regan joins me now with more on our coverage. the last couple of weeks in the year in the markets taking off. >> 18 k, baby. >> i was very surprised by that. a lot of analysts were sending

out notes. >> it was pretty incredible, 5%. we have been waiting for this. it feels like forever. everything's -- ever since 2008, we have been looking for a huge rebound in the economy. you go back historically, and that is exactly what you see. when it has been as bad as it has been, you should see a big uptick on the other side. we haven't had it because we have been dealing with this hangover in a pretty constant way. are getting like we some strength in consumer spending. >> consumer spending and business spending, are they at the point where they are saying, ok, i've been good. i have been holding onto my money because you don't know how the economy will go and i am mark confident now. -- i am more confident now. >> and people need more security in terms of employment. we have been averaging 200 doesn't jobs per month. that is pretty encouraging. -- 200,000 jobs per month.

that is pretty encouraging. it gives them perhaps the psychological power they need to go out and make that excerpt purchase. we have also see a more freeing up in the credit markets. not as much as we need and not as we would like to see but it is getting better. tothat also is helping incentivize americans to go out and spend on their credit cards, which is very much an american thing. >> you will also be talking scandal. sony hacking >> "the interview" will be released now in dallas and atlanta. forgive me, austin and atlanta. would you see it? >> i think i would. it is one of those things that you want to go in you will have to make a call for yourself whether you want to take your family. >> i can see people wanting to go to make a statement. >> as a journalist, you want to see what the big deal is about here and is everybody up in arms about this movie? what did president obama say?

come on, seth rogen. [laughter] >> we are going to explore this a little bit. i wanted to what extent the administration put pressure on sony to say, if there are theaters that want to release this, maybe you should. >> they should have consulted with us. >> it really shows that hackers and north korea have power they really shouldn't have. so what should the admission should be doing? >> nobody is saying that the presidenttion nor the had anything to do with the north korean internet. he was pretty vocal on something should happen in north korea. this was hours before we saw the internet go down. we will talk about the ipo market in 2015. we will watch the dow records. regan, "street smart"

top of the hour. stay with us. market movers on the other side of the break. "bottom line" continues in a moment.

is the last "bottom line" for me in 2014. my wanted to give a special thanks to my crew and our producer jimmy cowan. and our director michael vincent guerra. thanks so much. it has been a pleasure to do this on bloomberg television.

as we head into 2015, we wish you good health, love, a very prosperous, prosperous 2015. and above all, peace to you all. thank you so very much for joining us. i will see you next year. >> it is 56 pass the hour. that mark crumpton is a treasure. it is time for "on the markets." forre seeing a rally today the s&p and the dow at least. the nasdaq is still trading lower. reaching 18,000 for the first time. we did get the gdp data this morning showing a growth rate of 5% in the third quarter. that was better than the initial reading. it looks like it will be a merry

christmas for the retailers. the spider retail etf hitting anytime high today. as always, it is good to talk to you about retail. we are a couple of days away. things are looking pretty good. the readings we have gotten on spending so far have been pretty positive. >> for the last week definitely. walking through the stores, they are crowded. cars are packed in the parking lot. there were some spotty is, some stores were empty, some crowded,ry particularly stores, for example, that were selling athletic apparel were very crowded. some of the other stores were not. what has characterize the companies that have done better? >> the high items are

electronics, toys, and apparel. that isn't to say that you're not buying sweaters and bits and other things. but remember come over the weekend, you can still shop online and get the goods to you before christmas. between today and tomorrow, there are very few places that can get you what you want in time. places, some places are going the duration and they are staying open all night to cater to christmas shoppers. >> you are absolutely right and macy's is one of them. open since sunday and their doors haven't shut and won't shut until six or copy them tomorrow. this is all macy's locations. at we talked about this thanks giving as well. what kind of benefit do they get for doing that kind of thing? >> that creates a marketing for --mselves, being open 20 47

24/7. the for the customer that does not have time during the day and can i get to the store by 10:00 p.m. and want to go out at 11:00, i can't tell you how many people will go out at 3:00 a.m. in the morning. thisst very quickly, is the year that the bricks and mortar retailers finally got more the online share? >> absolutely, especially with pickup in stores. olsmart, macy's, target, khjo is testing it right now. that is definitely going to help them. >> happy holidays to you. . .

going higher.ll i am trish regan. this is "street smart." another record-setting day on wall street. the dow rising above 18,000, news, and the s&p also at a record high. we will look at the biggest gainers of the year -- intel and disney. also microsoft and nike. "street smart" starts now.