tv Power Lunch CNBC December 27, 2013 1:00pm-2:01pm EST
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short-term noise in the stock. a $15 price target by mid year 2014. >> stock hit an all-time high today. >> eww which is the mexican etf. they're going through reforms, corruptions coming out of the system, good article in the journal today. >> does it for us. have a great rest of the day @scott whamper in cnbc. >> "halftime" is over and power lunch and the second half of the trading day starts out in. >> look at these people coming at me, stocks, bonds, gold, treasuries, corporate bonds, copper, foreign exchange what do you do in 2014? strategies for all of the above ins just one minute's time. and the mortgage market it is about to change big time. diana olick is on the case. >> buying or selling a home, you need to know about new rules going into effect in 2014 for anyone applying for a mortgage. i'll break it down for you in four minutes on "power lunch." >> thank you. a new way for the independent investor to analyze the analysts.
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it's a game changer and you'll only see it right here on "power lunch." sue is out today. sara eisen in at the nyse. hi, sara. >> good to see you, tyler. we're getting to the big question of the week. can this run, a 12% gain since the beginning of the summer, a 25% run, this year, roll into the new year? dominic chu is looking at what history tells us about what actually happens when the dow has five straight up years. but first to mary thompson on the floor digging into the question on rising interest rates. everybody is talking about the 3% level on the ten-year and what it means for stocks. >> right. we hit it a little bit, we hit it yesterday. the markets rallied, hit it earlier today. pulled back a little bit. the markets are falling off. the markets were a little overbought coming into today's session, no surprise we've seen a bull bapull back. with the 3% yield on the ten-year a lot saw this as an inflection point. we didn't see that with the markets. if interest rates rise quickly then it would have a bigger
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impact on the markets. once everyone comes back from their vacations maybe we will see a little reaction. >> how orderly this is. >> if it signals that maybe the economy is gaining strength we'll take it. we've been waiting for that. >> another signal the economy is gaining strength the price of oil. everyone talking about that too, over $100 a barrel. >> two-month high today. crude right now at 161. this is having a big impact on the transports today. dow transportation average, which yesterday hit an all-time high, down 27 points and the reason is, of course, the airlines are getting hit. we talked about the delta glitch and people got cheap tickets but more importantly fuel costs are one of the biggest costs for airlines. when you see the price of crude start to pick up that is going to impact a group that has performed well and seen their profits improve this yearp. of course it's benefiting the energy stocks which are among the leaders in an otherwise down day today. >> pressure on the airlines. mary thompson on the floor.
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tyler, who said the last few days of the year are boring? down here we've got $100 oil, 3% on the ten-year yield and pretty momentous stock market. >> what a run we've had in the dow just this week, dominic chu. you're taking a look at how the index has performed when we've had record runs over multiples years. >> yes. >> like we're coming through. >> the streaks for the dow. just with the dow. it's been a pretty impressive run, 84% gains over the past five years if you look at the string of five years that we've had for this last run. so here's the thing, only throw three other times in history have we had more. first of all the five years leading up to the great depression, 1924 to 1928, the dow was up 214% during that time period. so we're up 84% now, the last five times five-year run during the depression or just before it was up 200 plus percent the, so maybe more room to run this time around.
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in the reagan years, mid to late 80s we saw the dow up 12% so again, 84% now versus 127% then. we have that huge, huge bull run and unprecedented time of prosperity in the u.s. back then during the 1990s where the dow was up 337%. again, 84% now, 33% back then, so again, it was a -- >> who is this fellow looking here at the painting? >> he's in our dow museum. >> dow museum. >> that's what he represents. >> got his newspaper there. >> absolutely. >> thank you very much. >> fantastic. >> sara, down to you. >> i've got a pair of experts here on the markets. jonathan lewis chief investment capital. robert is the director of market strategy at new edges usa. talking with robert about stocks and sectors, jonathan about everything else. let me start with you here on whether the momentum can continue into the new year. is there enough good soothing news from the fed and economy to
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keep it going? >> well, the question to a lot of markets, why is the market going up? there's only one reason, that's because of the fed. in september of 2012 ben bernanke decided to employ what is tan ta amount to -- >> he's starting to take it away. >> what happened last week he announced the taper but the taper so subdued actually the total amount that have left on the table the consensus actually increased from 3 billion to about -- 3 $77 billion to $400 billion. that gives you based on our calculations every dollar of fed stimulus buys you $4 in market cap. if the fed stays on this playbook you will get the market back up. >> looking at 8.5%. >> looking at something like 8, 9% return. if janet yellen suddenly changes course, deploys more capital, of course that playbook changes.
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>> it will be a different ball game. >> want to bring you in here, jon. fixed incomes, bonds, munis. any great investment opportunities the federal reserve and current backdrop is creating going into the new year? >> robert makes a great point. this has been a macro driven market driven by fed policy and it's a good time for individual investors to review where they are. it's year end. if you assume an individual investor came in with a 60/40 blend of stocks to bonds and crunch how stocks and bonds have done, 6733, out of balance. they're materially overweight stocks going into 2014. when the playbook as rob mentioned is fed differentp. do you want to be so overweight stocks. interesting note, individual investors have been taking a lot of money out of muni bond funds since april when the taper talk began. they've taken out something like -- >> is that where you want to be? >> it's created a good opportunity. thank you so much. in fact, so a ten-year muni is
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yielding the same as a ten-year treasury about 3%, way up from where it was at 2012. a good opportunity to get munis the same as treasuries a great deal. robert will correct me but ten-year muni yields at about 10% is yielding more now than the dividend yield of the s&p. gives individual investors to think about. >> what are you advising? >> one of the things interesting for next year we're going to have another round of elections. so right now, the democrats are trying to defend a lot of -- especially in the senate, trying to defend a lot of states and a lot of them are going to be coal states. i. >> coal? >> i think the administration will back off from its quote/unquote war on coal to help the democrats in places like kentucky, west virginia, virginia proper. i think coal can do somewhat better going into the new year as some of the regulatory pressure gets up. it's a beaten down sector. miners have been looking better. that may be an interesting area. >> good tips for the new year. robert, jon, thanks for joining
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me. tyler, coal and munis. >> coal in my stocking sounds just fine if i can make money with it. >>. >> a win for the national security agency. i am telling you this is going to the supreme court. a u.s. judge has ruled the agency's controversial phone surveillance program is lawful. rejecting a challenge by the american civil liberties union to that spying program. the judge says there's no evidence that the government used the data it collected for any reason other than to investigate and disrupt foreign based terror networks. this comes two weeks after the federal judge -- a federal judge in washington said the nsa program likely violated the fourth amendment which bans unlawful search and seizure. court watchers saying this sets up a big collision in front of the supreme. sara? >> all right. continue to watch that. meantime new mortgage rules are coming to banks and brokers in 2014. diana olick live in washington
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with that story. good afternoon, diana. >> good afternoon, sara. this will mean more hoops for borrowers to jump through in applying for a loan. lenders will be checking everything so they can comply with what is the qualified mortgage standard and that starts next month. a lender doing qm loans gets legal protection should the loans go bad and borrowers get a loan that at least according to the consumer financial protection bureau they can afford to re pay. here are the new rules. first, a qm loan cannot be interest only. it cannot be negative amortization or balloon payments. the maturity must be limited to 30 years. the lender must verify the borrowers income and assets, points and fees paid by the borrower cannot exceed 3% of the total loan amount and here's the big one, the borrower cannot spend more than 43% of their income on the mortgage debt. the important thing to know here is that lenders do not have to make qm loans. they can lend outside the rules,
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but that opens them up to legal liability. if they do strict underwriting, they can lend to some good, albeit wealthier borrowers. bank of west says they will do just that. >> those people who are self-employed or who do have substantial income, there will be ways to justify allowing over 43% debt to income. >> now wells fargo has also said they will do some nonqm loans, largely in the jumbo space, and these will be to super prime borrowers. but as these rules get more familiar to everyone, it's interesting what might happen down the road when they start lending to not so prime borrowers. tyler? >> thank you very much. all right. here's one to ponder. if you could choose one celebrity to be your neighbor whom would you choose? think about it. according to zillow, the winner is jimmy fallen. host of "late night" and soon to be the host of "the tonight show." the celebrity most would want as
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a neighbor followed by country singers blake shelton and his wife miranda lamb ber and in the middle oscar winner jennifer lawrence, also on the list. least desirable neighbors, you can probably guess, kanye and kim. and the cast of "honey boo boo." they make the list. and justin bieber. believe that one, sara. >> i do not. i would loive next to justin bieber any day. >> wow. >> all right. thanks, tyler. we should mention there are still thousands of people without power in michigan and maine after last week's storms. vermont is now reporting that ps most everyone is back on-line from last week's storms although there have been new outages due to the ice and the snow they were hit with. for more on the weather now, perhaps more rain on the way, cold weather as well, here's the weather channel's mike seidel. >> final weekend of the year and the weather is going to start off nice in new york,
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washington, boston, temperatures in the 40s and 50s and dry saturday, but sunday a storm comes off the carolina coast. rides off the jersey shore east of cape cod on sunday night. that means rain this time. we don't have a lot of cold air to the north, so rain and that's going to impact airports. certainly after lunch time on sunday at laguardia, newark and kennedy. now sunday night we'll have enough cold air in the interior parts of maine and new hampshire where we will have enough snow to shovel and on the back side of the storm we may see a few snow showers on the tail end in the western boston suburbs and then on monday the cold air comes in. we're talking temperatures tumbling 22 buffalo, snows around the lakes, new york, city not bad, that's about average. actually a couple degrees above average for the last week of december. and then that arctic chill which is going to keep highs below zeros this weekend in minneapolis and fargo and bismarck, look at these highs on tuesday. burlington 13, boston 23, be and only 32 in new york city. and there will be a windchill and it's going to stay cold
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through most of next week. back to you. >> going to be a cold few year's eve in times square. speaking of cold yesterday we showed you pictures of five feet of snow in norway. today it is switzerland digging out. got about three feet of the white stuff in 12 hours. trees, power lines knocked out. lots of cars and busses getting stuck on the roads there in switzerland. they say the winds during the storm, sara, were as high as 100 miles an hour. >> can't even go out to go shopping. all right. coming up here on "power lunch," we've got three big stories for you. steve liesman, economy check for 2014. also john harwood on the end of unemployment benefits for 1.3 million americans. plus, a key leader in lebanon killed in a massive car bombing in beirut. turns out he was a former ambassador to the united states. don't want to miss that. we're back in two.
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. > all this all this week we've been telling you what you need to know to make money in the new year. steve liesman has 2014 predictions for the economy. check out how he did in 2013. steve predicted the fiscal cliff would be resolved january 8th, not bad. it was close. turns out it was january 1st. next he predicted there would be one quarter of growth above 3% in 2013. that was right. thanks to third quarter growth we saw, 4.1%.
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finally steve predicted that former chief of staff jack lew would be the next treasury secretary. of course that proved true as well. not so bad in terms of steve's scorecard. let's see what his predictions are for the new year. >> my big call for 2014 is synchronized global growth. we haven't had a year without at least one quarter of negative growth from either japan, the u.s. or europe since 2005. 2014 could be that year with the crisis ending in europe, u.s. fiscal drag fading and japan's fiscal bank opening up the throttle a chance for one of the best growth years from the big three since the crisis began. all of that means better dough messic growth and global growth will keep the fed on track to end qe in 2014 it will do all it can to get out of the program without a spike in interest rates and a sharp fall in stock markets. it's going to lean heavily on guidance that rates will be kept low through 2014 and even into
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2015. inflation could be a new worry next year. it's unclear if we'll have actual inflation but it's logical it will be a concern for markets. that will present a challenge for the fed if wages and commodities rise the central bank could have to lean heavily against criticism it's risking inflation. the fed will argue with so much slack in the economy especially in the labor market it can afford to be patient on rates but it could be a year that fed critics pound the inflation. steve liesman, cnbc. and for more of what lies ahead in the new year, check out predictio predictions.cnbc.com. my prediction we're going to hear a lot more tapering in the new year. >> all right. well, we shall see. looks like they're going to do it about $10 billion a month if that's the -- if that is born out by what the economic numbers show. speaking of economic numbers, unemployment benefits for 1.3 million americans expire tomorrow.
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john harwood is in washington. jon, what happens when this does happen and appears it is going to happen. what's going to happen to these noek folks? >> let's be honest. these people will have a difficult time. we're talking about people who have been unemployed for an extended period of time and the longer you stay out of the labor market the more difficult it is to get back in. look like chances are slim that democrat and their allies will be able to create enough momentum to extend those benefits which have been in effect since george bush was president. unemployment benefits up to 99 weeks. but they're trying with a two-pronged argument. one is simply on the basis of economics as we hear here from senator robert menendez of new jersey. >> for every dollar in unemployment insurance that ultimately we give, we get a two for one ratio in terms of the ripple effect in the economy. so, this is about helping working families be able to sustain themselves while they're looking for work. by the way, unemployment
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insurance requires that you exhibit and prove that you're actually in looking at the job market and have made efforts to do so. >> the other part of the argument as we see in this advertisement that's now running, is geared to the holiday season and that is really an emotional argument. >> it's wrong to leave more than a million americans behind. tell republicans restore unemployment benefits now. >> it's not clear at all that democrats are going to be able to overcomep republican resistance and the reason is that we have taken a psychological turn in this country from looking at the economy as one that is in crisis and recovery from crisis to one that is growing as we heard in that steve liesman piece a few minutes ago and a labor market that is strengthening and that is why democrats are losing some of the will to really push this through to the finish line. it's not clear that nothing will happen. could get a short-term extension but the odds appear to be
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against it. >> all right. john harwood in washington on the expiring unemployment benefits, thanks. some international news to get to now, a massive car bomb exploding in central beirut today, killing a former finance minister who also once served as ambassador to the united states. iranian blocked hezbollah the chief suspect here. several members of the organization will be tried in three weeks. they're accused of killing lebanon's former prime minister in another massive roadside bomb. six people were killed in today's bombing, 70 were wounded jute latest in turkey, another set back for the turkish prime minister. as a high court blocked his attempt to force police to disclose investigations into the government. protests erupted in turkey after the police detained dozensens of people on december 117th including senior government officials. you see the impacts in the
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markets, the stock market down nearly 15% since the latest trouble began. and, of course, there's the currency impact. the dollar lira trade here, if you look in the last few weeks you can see that big spike over the last month. turkish lira at a record low. tyler. >> one area of the energy sector has been red, red hot this year. so can the streak roll on? morgan brennan is on the case. morgan? >> these are master limited partnerships. they've been one of the best money makers of the year. will they be a great place for your money in the new year? more "power lunch" in two minutes.
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limited maar limited partnerships have been hot investments thanks to the energy boom and we're going to ask and answer the question is there more room to run? are these just another bubble? morgan brennan picks it up from there. >> i'm going to give you mlp 101. what are master limited partnerships. we're talking about publicly related partnerships related to energy that pay no corporate tax and distribute profits to shareholders in dividends. like reits. they have surged thanks to america's energy boom. there were 66 mlps worth a combined $160 billion in 2009. today we're talking about more than 150 trading publicly worth over a combined $500 billion, including 20 new offerings this year. mlps have outpaced the s&p 500
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by a wide margin over the last five years as you can see in this chart. so will the run continue in 2014 or are we on the verge of another asset bubble. ml ps is facing pressure from rising rates at the cost of borrowing climbs, smaller newer ones that pay out lower dividends. a number of analysts remaining bullish on the large cap companies with stable assets like oil and gas pipelines. for example, overall buy rating attached to kinder morgan ink and pipeline and magellan mid stream partners upgraded to a buy from deutsch bank last week. moving into 2014 another emerging area to keep an eye on. mlps focusing on storage facilities and allen g. exploration. >> what are the yields on these? i've thought that the yield is one of the big appeals. >> the yield is one of the big appeals, 5, 6%, in some cases as high as 11%. >> that's because of the nature of the beast is they have to pay out their income. they can't retain it the way an
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apple or another -- not to pick on apple particularly. >> 90% of their profits are passing tout shareholders. >> sara. >> it all started for your eury he followed a note on an investment and the investment went south fast. to see which ones have a good track record with their picks and which ones not so much. if it goes the way he wants this could become a real game changer for the independent investor. >> you can actually see which one, which analyst said what stock to buy and you can click on him to see his performance and decide if you want to take his advice. we analyze the internet and create these virtual portfolios for anyone giving investment advice on-line. if you're a user and visit a website and exposed to a recommendation we will automatically pop up an accuracy
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report of that person to know if you should trust them and the most accurate top performing people are saying about the same stocks. you will have a different perspective from someone who actually outperformed the market. you can download it for free and basically if you're using the free service, we will always provide you with protection of showing you how good is anyone you come across on-line. you can know if you can trust them. there are the premium services that we have like e-mail alerts if you want to follow the best analysts or bloggers around the web, another vertical we're doing right now is we're doing a lot of b2 b and b2 b2 c taking our data and giving it to banks to show it to their users and other premium websites. >> tipranks.com. and by the way it has been a big year in cyber security. on monday on "power lunch" we'll look at how some players are shaping its future and what it means for your on-line privacy
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and protection. almost 1:30 p.m., gold market is closing right now. bertha coombs tracking at the action at the nymex. >> of course gold on pace for its worst yearly decline since ronald reagan was president. however we are seeing it up for the third straight day. just edging up slightly with the dollar a little bit weaker today. also edging up slightly for the week. now up two of the last three weeks. silver, though, performing very well. the winner of the week up more than 3%. platinum as well up more than 3.5%. copper not with standing that fat finger trade earlier in the week and a bit of a profit taking today also up 2.25% for the week. sara? >> bertha coombs on the gold close. rick santelli tracking the action at the cme group. rick? >> thanks, sara. if you look at intraday of tens it's all you need to see. we're hovering at 3%. open the chart up to july of 2011 that's the last time we closed at a 3% handle.
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remember we didn't do it yet. yesterday's settlement equalled september 5th at 299. curve steepening as you can see on the five to ten chart. dollar yen now over 105, last time that happened october 2008. 62 months and counting. tyler, i'm going to count on you to take it away. >> all right rick, happy new year. i'm taking the rest of the year off. good to you, buddy. crime and punishment are a series that the team there brought you millions of dollars worth of stories from white collar fraud from criminals across the country and around the globe in 2013. here's andrea day with highlights and low lights from the 2013 crime crackdown. >> it's been a big year at crime and punishment. filled with lots of [ inaudible ] and other bad guys you can't seem to forget. to date we've uncovered almost a billion dollars in fraud and based on what we're working on right now, 2014 could be even bigger. let's start with some criminals who thought they could outsmart the banks.
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likes this rock star, check him out. ♪ i met a girl she's super cool ♪ s this is the song "it turn out the lights" the lead singer for llp. that's short for lights over paris. >> i like to go over the top. i like everything to be crazy. i like everything to be extraffic gant. >> but they never had a single hit. >> what he had was an ability to cheat. >> according to prosecutors cunning banks into loaning him millions of dollars. >> getting loans to fund a fantasy, a rock star fantasy. >> the rock star wannabe is writing songs in prison and when it comes to lies there's nothing like a big ponzi scheme. >> stop bumping me. >> you hit me with the umbrella. >> this 44-year-old was screaming bloody murder. >> what are you doing. >> the feds accused him of running a $96 million ponzi scheme. clearly brian call ha lan didn't feel like talking about the
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charges. >> remember tate george. the former husky who hit one of the most famous buzzer beating shots in uconn history. it took him to the nba. >> being in the nba legend what is dreams are made of. >> a multimillion-dollar ponzi scheme took him straight to jail. ever wonder what the schemers buy with that cash? we call this next guy the mini may daughter of the midwefghter midwest. he gets $7 million in real estate including a barn complete with a 1950's style diner, even a go cart track and decks out his homes with bowling alleys and home theaters. the ponzi dough founding a megachurch, private jet time, tickets for sporting events and home arcade. >> he had 11 cars. that last time i checked you can only drive one at a time. >> the next guy number two at air row postal when prosecutors say he got greedy. >> you made $20 million
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legitimately. did you feel the need to steal $25 million more? >> christopher never fessed up but he's now facing years behind bars. from stealing money to growing pot. >> you're accused in a pot grow operation. is any of that true? >> andrea sanderlin's secret life was busted open. investigators say she lived in luxury in scarsdale, new york, driving her mercedes every day to a warehouse in queens where she had a grow op. >> would you like to talk to us when this is over? we would love to hear your side of the story. >> possibly. >> and look for a whole lot more from crime and punishment right here on "power lunch." >> all right. andrea day reporting. to seema who like share in madonna and gaga has eschewed her last name for now. >> take a look at internet giant baidu leading higher after announcing a $32 million acquisition of perfect world's
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chinese on-line reading business. baidu one of the big winners this year up about 70% year to date. >> all right. seema, and tensions rising between amazon and ups over their christmas delivery debacle. our dominic chu was a victim. he has the latest on the whereabouts of his christmas gift and xbox one. but first to josh lipton in san jose. josh? >> yeah. tyler, amazon made a lot of promises that ups apparently couldn't keep but did ups have advanced warning. that's next. >> the second chapter of my sad, sad christmas story with my xbox 1. it has a happy ending. keep it here on "power lunch." we'll be back in two minutes.
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those tensions those tensions between amazon and ups over the christmas delivery debacle putting the spotlight on other delivery subcontractors as well. check out one of them, atlas air. the stock up 5% this month. dominic chu has an update to his sad, sad christmas story but first we want to go to josh lipton in san jose. josh, on the blame game here,
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what did ups know? did they know amazon was about to send more traffic their way? >> listen, certainly the blame game continues here, christmas gifts didn't show up on time this year but who was really at fault? amazon is saying it wasn't us. the on-line empire processed orders in time but amazon now reportedly may review the performance of their delivery carrier partners. on twitter people took out their frustration, too, using the ups fail hash tag. some blaming the carrier for ruining their christmas. not everybody thinks the blame should rest with ups and fedex. michael packtore of web bush says the bulk of the blame rests with amazon which he says was at fault for not accurately forecasting demand this season. ups says it projected 132 million delivery but the number came in higher. cnbc did reach out to amazon for comment but they haven't gotten back to us yet. the question is, whether this will happen again.
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analysts saying it isn't likely. amazon will negotiate with carriers to boost capacity and carriers will recalibrate their forecasting models. for amazon's reputation, saying the hit is manageable. if it was a perfect 100 before, maybe now it's 98. sara, back to you. >> they had something to take away for next year. thanks very much, josh lipton. want to go to dominic chu now with the latest because dom, we're wondering whethers those packages have been delivered. we were also worried you didn't get your xbox on time. what is the latest? >> well, i mean, let's be honest, my sad sad christmas story is relatively speaking not a sad one at all. i did end up getting my xbox one delivered by ups to our front door last night between 8:00 and 9:00 p.m. there you can see this particular xbox one and the game that came along days before. it arrived in time for christmas. i got that. it's alone underneath the christmas tree because the only gift not opened yet. everything else has been done.
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but again, my mother-in-law at least had some sense to put it under the christmas tree for the spirit of things. back to you. >> belated christmas present. >> yes. christmas is just extended. that's what it is for me. >> all right. we are all very relieved. dominic chu. josh lipton on the latest with the shipping headaches. tyler? >> all right. folks, when we come back we have a lot more of "power lunch" coming up. we will talk to you about the countdown, nute way to cash in -- the new way to cash in on fantasy sports. julia boorstin what's going on? >> that's absolutely right, tyler. forget about having to wait until the end of the football season to win or lose. fantasy daily and weekly sports are the hot niche in the fast growing fantasy sports business. we'll tell you how to play and who the real winner is in two
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minutes. [ male announcer ] once, there was a man who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. you'd do that for me? really? yeah, i'd like that. who are you talking to? uh, it's jake from state farm. sounds like a really good deal. jake from state farm at three in the morning. who is this? it's jake from state farm.
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what are you wearing, jake from state farm? [ jake ] uh... khakis. she sounds hideous. well she's a guy, so... [ male announcer ] another reason more people stay with state farm. get to a better state. ♪ the government the government planning to stop giving out extended jobless benefits for 1.3 million
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americans. john harwood reported on it. is this a good idea? you said this, yes, the latest unemployment rate is a good indicator that jobs are available. three out of five of you said that. no, we're still not out of the woods. 23%. it should extend it this time but not for much longer say 18%. roughly one out of five. meanwhile see what's coming up on "street signs." dominic? >> i have the pleasure of filling in for brian sullivan and joining mandy for "street signs" today. so which commodities will crush it in 2014? could it be gold or oil, maybe something else? then there's a tesla two fer. ever wonder what resale value for an electric car is. we'll find out. shouldn't gm or ford buy up tesla. our panel weighs in. crazy ideas for how to solve amazon's shipping problems. back to sara and tyler on "power lunch." >> all right. looking forward to it. dominic chu. meanwhile the nasdaq another 13-year high earlier today for
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pairing its gains a little in the session. big movers out there, we go to sheila dharmarajan, breaking the hot streak for the nasdaq. >> that's right. it's the last friday of 2013 and typically fridays are good for the nasdaq. for the past 12 fridays in a row we have seen gains, but today we are breaking that streak, both the nasdaq 100 and composite down about a third of a percent but look for the week we are still higher, higher by about 1%. now one of the reasons we are seeing some pressure on the nasdaq has to do with big cap techs like amazon and apple, both taking a breather putting a little bit of pressure on the nasdaq. also got to talk about social media. the big twitter downgrade having the halo effect on names like facebook, linkedin and groupon. finally want to talk about tesla. all this talk about is it going to be bought out, a good buyout candidate? market doesn't seem to think so today. that stock is one of the biggest losers on the nasdaq. >> sheila, thank you very much. all that time that people spend playing fantasy sports big business. $1.2 billion this year to be
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precise according to ibus world. new game in town. julia boorstin has it live in l.a. >> tyler, for those who don't want to wait until the end of a season to cash in, new leagues which allow you to draft a new team every week or every day are proving to be a real home run. the daily and weekly fantasy sports business will rake in nearly $250 million in 2013, up from $100 million last year as the overall fantasy sports business generates $1.2 billion in revenue this year, up 12% froms last year according to ibiz world. one of the two biggest players in the daily and weekly space brought together 40 finalists at its biggest ever event in los angeles, handing out nearly $2 million in prizes. draft street offers free and paid leagues from which it takes a cut. it's more than doubled both users and revenue over the past year, signing up 100,000 new users this football season alone. with cbs, yahoo! and espn
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dominating the more traditional leagues which play out over the course of a season other media giants are betting on the shorter formats. draft street is backed by barry diller's iac and fan dual is backed by comcast ventures. fan dual on track to award $150 million in prizes in 2013. now both companies expect significant growth in 2014. bolstered in part by the increase in mobile devices. which make it easy to access that instant gratification and update and play every single day on your smartphone or on your tablet any time, anywhere. sara, back over to you. >> all right. julia boorstin on that big business. coming up, cigarette commercials about to go up in vapor? twitter soaring more than 60% since its ipo. is it worth it? delta's next move after the big ticket mistake. all the hot stories, the power rundown is next. next, a banker closes the books
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on finance and designs a new career in fashion. >> this dress is going to be a showstopper. >> escaping the cube coming up. mine was earned orbiting the moon in 1971. afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection and because usaa's commitment to serve current and former military members and their families
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power rundown time. dominic and sara are here. we start folks with the e cigarettes as detailed in the "wall street journal." they want to ramp up tv ads in 2014 but with the fda expected to propose curbs on them it could snuff out the plan. should e sigs be regulated and if so how? >> fk they should be regulated because if they're going to be advertised as a safer alternative the fda needs to sign off on that. i want to tell you, e-sigs ares mistysterious thing, etiquette h them, okay to smoke indoors, vapor, not smoke. i have an e-sig from an unnamed trader in the new york stock exchange. just puffing away over in his booth, trading stocks, smoking e-cigarettes. you would never see this with a normal cigarette not to mention it's not legal. >> here's the concern. remember when it was joe camel, the idea making it look cool so they were appealing to younger
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possible smokers. but you have commercials like the one you saw with steven, he's making it look cool. the question then becomes whether or not they're targeting certain groups with their ads. that could be a huge concern. >> i think the question for the fda, is there any kind of health impact, health risk involved here if there is -- >> of course. >> seems like there ought to be a regulation of them and through the fcc of advertising as well. twitter dropping today, but still up big since its ipo in early november. the stock downgraded to underperform today by mcqueary. check out the entire analyst coverage rating breakdown. the stock has seven buys, eight holds, four sells, three calling birds, two turtle doves and a partridge in a pear tree. >> was the run up too far too fast? >> interesting to see the discrepancy between what the analysts are saying and investor stock traders are doing which has been buying the stock and it's not just twitter here, it's socl the social etf we've seen
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it from facebook as well. lot of momentum going intoes these stocks as investors look for growth stocks and say look we see it in social media. throw the valuations out the window. the analysts are saying that's absolutely impossible. >> the valuation, dom, on this one has to be pretty high in the neighborhood of 70, $69 a share. >> there lies the point of the potential downgrades. it could be a strict valuation call. it's not they don't the business is going to do well. with twitter this is a unique situation. facebook hasn't participated in the same run in the same time twitter has. maybe investors are looking not to miss the boat. >> delta, big glitch for about two hours yesterday with some flyers scoring extremely cheap fares maybe if you didn't get your package delivered you were lucky to get one of the cheap fares. $68 to honolulu, $40 from the east to west coast. united had the same problem in november. delta going to honor the
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incorrectly priced tickets like united did. does feel like the best way to handle a mistake, sign up, you get it. >> they advertised it. you owned it. this isn't a situation where you have a fat finger trade on the stock exchange where the nyse comes and says we're going to bust that trade. you didn't get to buy those shares for 10 cents or sell them for a thousand. they have to own up to it. they did. >> forget honolulu, i read in "the new york times" senately to minneapolis, at $25, do you know how expensive it is to fly into the cincinnati airport? >> it is. >> crazy. >> and it's a delta hub too, so i guess you could find some there, but even a bus ticket isn't that cheap. >> if i mistakenly booked an expensive fare they're going to make me live by it, i guarantee it. >> oh, yes. >> got to run. thanks. >> ever find your mind wandering at work. never happens here. this is grass does not grow on a busy street. you wish you could escape the cube. this guy did from the office to
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fashion. take a look. >> the toughest part about leaving, missing banking was the paycheck. >> hi. i'm creative director of the brand timo. i used to be an investment banker. i worked at deutsch bank securities as an invest mpts banking analyst. every day in the office was extreme challenge. it was a lot of type a personalities, a lot of people just moving fast. it wasn't what i was passionate about for my life. i was always on the style blogs. i think they were just starting. just an indication i was in the wrong field. i set out the advice of some senior people at deutsch bank. a few of them had started their own companies in the past and when i left banking i started a start-up consulting company
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through which i met alan and donna through a company alan owned. >> i had a can clothing line before i met timo. we had a meeting of the minds. we decided to launch a company. >> we started off with neck wear. it was like a bib we made for women and a bow tie for men. timo was like i want to do men and women's ware. his background gave him a lot of guts. >> we identify as an american new york brand. >> the three of us come together and we produce a product that's different than everything else on the market i think. >> it's designed for our lifestyle. >> we deejay and that's a huge part of the way we think. >> through that we create these collections like that experience. >> i'm so excited for this. men's and women's right here. >> yeah. >> first account was barney's. so, you know, we've grown with barney's ever since and they're a phenomenal partner to us. we've grown to about 100 accounts. >> how are we doing here?
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>> you guys are killing it as usual. we were attracted to it because a lot of different people will respond to that brand. the price point is good. it just -- it feels really good to wear. >> i mean this dress is going to be a show stopper. >> right now we're doing low. everything is going to my business. see what i'm creating is a lot more valuable than any salary that i could have earned at a bank. timo >> the timo team one of ten promising brands chosen by the council of fashion designers for its current incubator program. >> coming up, tyler, back on the markets three of the biggest winners in today's trade next. (vo) you are a business pro.
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mid-size price. (natalie) ooooh, i like your style. (vo) so do we, business pro. so do we. go national. go like a pro. a> back on "power lunch" with look at back on "power lunch" with a look at the markets right now. there you see little change for the dow, the s&p and nasdaq. dow flipping between gains and losses. right now down a little less than 3 points, holding the highs basically. if the dow does manage to close higher it would be seven days straight. the s&p 500 down 1.3. three winners to highlight at this hour. standouts, sprint getting a pop. blackberry for a change and
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cliffs natural resources has also been going strongp. tyler $100 a barrel for oil. energies a bright spot. >> much more busy day than we thought. think about blackberry, how far it rose. >> what a year. >> how precipitous its declined. everybody have a great new year. taking the rest of the year off. i'll see you january 2nd. >> "street signs" begins right now. hello, everybody. happy friday. the stock market has been like a fortress this year, can it keep repelling arrows? some commodities were taken out the back to the slaughter house, will they make a comeback next year? december is the best time to buy a car, but which car will get you the best resale value? forget big brother it is bits brother. how your e-reader could be reading you. we welcome dominic chu back to the show. great to have you with us today. >> always a pleasureto
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