tv Street Signs CNBC January 9, 2014 2:00pm-3:01pm EST
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vectors biotech tie up almost 1%. >> i don't know about you, sue, i am struck how cautious and tentative a start stocks have had in this 2014 so far. >> absolutely. we gained better than 25% last year. maybe that's what it is. >> probably explains why. thats does it for this edition of "power lunch." thanks for watching, everybody. >> "street signs" begins now. can you guess the world's best performen stock market so far this year? you probably wouldn't believe it. the surprising answer is coming up. hi, everybody. the other hot topic on this thursday, new jersey governor chris christie not getting a surprise. he wants bridgegate, could it slam down his hopes in it's presidential race? and the absolutely great move made.
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and saluting that move. a look at what the markets are up to. you can see behind me, still in the red but cut losses from earlier on. dow by the way, up here down by 35 points has not fallen more than one day in almost a month. today, of course, could be the day we get that consecutive negative close. and notwithstanding today, the s&p and the nasdaq are still positive for the week. let's take a look at the ten year here behind meep yielding 2.983%. this time yesterday you might remember, just as those fed minutes were breaking, sitting even at 3%. and gold here, is moving up by just $3 an ounce but it did hit a one-week low yesterday after the encouraging adp private sector jobs report. over to you. >> thank you, mandy. the big national story now. new jersey governor chris christie under fire and apologizing for one of his aides reportedly ordering a shutdown. the george washington bridge, or part of it, as political revenge. scott cohn working the story out for you out front of city hall
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in fort lee, new jersey, a couple miles down the road whfr where we sit. >> governor chris christie is going out of his way to personally apologize for the closings on the george washington bridge that reeked so much havoc here in fort lee and this part of new jersey as well as manhattan. he will come here after his two-hour news conference to be personally appaologize to the mayor. here's what the governor said about that this morning. >> listen, i don't know him. i can't be offended and i'm not offended. if he wants to meet with me today, i'm happy to meet with me. if he doesn't want to meet with me today, i'm got going to go up to fort lee. i feel it's important for me to be on the ground there and to apologize to folks. >> talking about the mayor that
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said the governor should delay his visit, shouldn't come. thanks but no thanks. here's what he had to say. >> i would ask the governor, fort lee can be granted one request. one request through all of this. we would ask that he delay his visit here today. we have some other lives that we need to resume also. again, not disrespectful in anyway. it's not designed to be. i am not shunning the governor. it's just that i just think there's so much more that's going on here. >> well, a short time after that, mayor sokolich said he had a change of heart. the governor is welcome to come on up, and so he is going to do that, but meantime, as the governor tries to make a clean breast of everything, the port authority foishlgs david wildstein, who took the order to cause some traffic problems in fort lee has now taken the fifth at a hearing before the new jersey legislature, fair to say that this investigation is going to go on for a while. but we're waiting to hear now for the governor to make his personal apology in person.
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guys? >> okay, scott, thank you very much for that. of course, a developing story, but we ask, how much of a watershed moment is this for governor christie? let's bring in partners founder chris malone and business insiders josh barrow. i want to start with you. assume the governor is as good as his word and had absolutely no idea what was going on. you say, that's almost as bad. how could he not know? >> right. a story that broke 117 days ago. it's been building through the fall. he's been taking a lot of political pressure over it. was he really not able to figure out until yesterday morning somebody in his own office had been involved in this? he's basically out there saying my staff is out of control, i don't know what they're doing and lying to me, which is not a good talking point to lean on. >> so, chris, i mean, is this a possibility that maybe a culture has been created under governor christie where this kind of behavior is, let's say -- hmm --
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tolerated? >> it's new jersey, mandy. [ laughter ] >> that's right. it could be the case. i would take a different perspective. research suggests that actually lapses in competence are much more forgiving, forgivable and that lapse's in intention. crises and bad news are the strength of a reputation or brand, and the question voters and new jerseyans are asking themselves today is how loyal is chris christie to us? and how loyal can we be to them? chris, in an informal poll -- go ahead. >> my point on "power lunch" a few moments ago was this. you called it a crisis. this would not be a crisis but for the fact christie is a 2016 presidential hopeful if not front-runner. if this was random governor in random state we wouldn't be talking about it. the fact he's on the national stage today with his press conference confirms his popularity. so is the story that big of a deal, because he's already there? >> yeah. i would say your earlier comment
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was right. for people that love chris christie, this isn't going to change their opinion. for people who hate christrihri christie it will make them feel worse. this is a question that will cause people to question whether christie can be trusted in more of a national role and, you know, can he be more like a tony sprain so pran soprano or a tony ben jnettbenn? we look for parallels. >> and whether or not we're being lied to or being told the truth. if you'll have a president in the future you want somebody telling you the truth. josh, you raise four uncomfortable questions, call them, in your article, one, why has he not slept in a couple of days when supposedly he just found out about it? >> right. he talked in detail, 8:50 a.m. yesterday, hasn't slept well the last two nights because he's been, you know, turning this
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over in his mind. why didn't he sleep well tuesday night if he didn't know the bombshell would drop until wednesday morning? the problem for him is broader than that. i think competence really matters to the christie brand. the whole appeal of chris christie has been his ability to transcend politics as usual, get people to work together across party lines and even when being kind of a bully it's towards a greater end, that he's forcing compromises through over the objections of special interests who stand in the way. this really undermines that, because it shows his administration using those tactics in a way run amuck hurting ordinary people. >> isn't his administration, just one lady and a, governor christie appointed guy over the port authority? being too broad saying, "his administration." >> one of his deputies chiefs of staff pb a authority authority appointment and the guy he just picked to head up the new jersey republican party. that's what -- lofts scandals about staff misbehavior people
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survive. the problem the staff misbehavior was to the end of serving what was supposed to be a political agenda for chris christie. seem as stupid strategy for serving that political agenda. if these people were getting together to do this without christie's knowledge, must have been doing it because they thought he would have wanted them to be doing it. >> spin this. the corporate brand image, right, because christie is a brand. do you believe she handling this correctly? >> i think he's done a couple of things right. one, getting out in front of the camera, out in front of this, taking the hard questions today is definitely a step in the right direction. he tried to be as transparent as he could and i think if it's true he was not involved and did not direct this, he should throw up the doors and be as transparent as possible. he could actually turn this into an opportunity to strengthen hess reputation by demonstrating how he handles this and acts in ways that are selfless and in the best interests of the
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public. if not true and was involved he's dug a very deep hole for himself and difficult to manage from a brand standpoint, because there's no such thing as a secret anymore. if he was involved that will likely come out. >> josh, quickly. the key swing states, virginia, ohio, florida. right? for 2016. a few others. cleveland plane dealer, richmond times dispatch. on their home pages now. story's not getting a mention. if anything, a little right-side bar story. right? we live in this area. it's a story that's going to make political national news. do you think people in virginia, north carolina and florida, who like christie really care? >> i don't think they care about the george washington bridge itself. >> of course they don't. >> what you'll see with the story, his opponents both in a republican primary and a general election will bring up to undermine questions about his character and to suggest that the nature of the administration he's built in new jersey might make poor management decisions at president. i don't think this in and of itself torpedoes his chances to
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run. his brand is soft now. people have an idea he's an aggressive guy, bipartisan and popular. this is a very simple scandal, easy for people to understand and will become part of the elevator speech anybody can give about chris christie. that's why it's so damaging. >> certainly a wake-up call, and if he is going to become president, this is the kind of thing he will not be stranger to in the future as well. got to be ready for anything. chris and josh, thank you very much. interesting. >> irs? >> yes. >> benghazi. a few other things out there. on both sides. back to the markets. over to dominick for a quick market flash. brian, twitter shares, session lows. stock down 5%. now at levels that are the lowest we've seen in three weeks. this morning, cowen and company started coverage with an underperformer sell rating and $32 price argument over concerns about spending requirements. the stock down 16% this week alone and flirting, since its highs, mandy, bear market territory. >> interesting.
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thank you very much for that, dom. still ahead, sizing up this market. literally. literally sizing it up. the small cap, midcap, the large cap plays over here. >> once again, we ask you our "question of the day." do you know what that xhart chart is? early, but a rather surprising best performing country stock market in the world this year. not japan. not mexico. not the united states. tweet us your answer. later in the show. [ male announcer ] this is the story of the little room
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welcome back, everybody. time to get a better picture how retailers did this past holiday season. courtney reagan on the chase and for some, really not too hot. >> yeah. for a lot, actually. wasn't so hot. so far seven retailers that have at least decreased guidance. either for the full year or for the fourth quarter. gotten sales numbers but don't actually have earnings. remember, all wondering what happened with the margins, because we know it was very, very promotional. not good so far for american eagle. for l brands, for family dollar. for bed bath & beyond. some of the names not so hot so far. >> a case of so many promotions and discounts that killed margins? or was it a double barreled problem. that is, even with those discounts, they still couldn't get people in the stores? >> exactly. i think there's more than one thing going on. a highly promotion's environment. so if somebody's offering 40%, somebody else 50%, becomes this race or chase to the bottom.
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still, that's often not enough. you have bad weather, online. more convenient and the easier for shoppers. family dollar, a lot of competition with dollar tree, dollar general. might be aggressively. stores don't look at good as others. >> i spoke with a department exec executive, a name you know. they have the data. car and home sales are killing their sales. if you buy a new house or a new car, might need to buy a new sofa. not extra shirts. all of your money is being saved for a down payment on a car or house. iphones, ask any teenager. they want the iphone 5 more than the new pair of jeans. >> i agree. oh, i think that happened for a while but actually might be starting to slow. analysts wonder why bed bath & beyond hasn't gotten in on some of the home funnings stuff if everybody else have.
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i agree. when more of your money needs to go to pay that iphone bill, samsung bill, whatever it is it takes away the money to shop for sweaters. american eagle said things had gotten better after christmas. some folks think that might be an okay thing. >> gift cards. >> a good opportunity to buy in the weakness, a turnaround is coming. may not be totally dead, but christmas wasn't great. >> thank you, courtney, as always. another riddle for you here. already had one. another one. when it's smaller, bigger. not, no mandy. the answer when it comes to stock returns, the s&p small stock more than the dow than january of last year. we asked dom to size up the market. >> not talking about french fries, shirt sizes, like you were talking about. investing, it's about the size and it's important. there are out performers. last year investors across all market caps had reasons to cheer. investors saw small cap 600,
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yes, like you said, rise by some 40% in 2013. you can see there. a nice move for those small caps. higher, annika therapeutics, specializing in skin and hair repair-type products. up 82% last year. mid cap stocks last year, up about 31%, 32% last year. best performing stock there, solar energy sun edison up 307%. the big one, s&p 500, very respectable 30% gain trailing in terms of the other two led by netflix, of course, up 298%. talk about it all the time. at least last year, all worked out no matter what size you chose, maybe going forward, there are nuances for out performance in the fimp. >> if that's the case, indeed, we have to listen to our next guest. what are the best bets in each of these groups. kick it off with small cap
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plays. barry bradshaw, top pick? >> mandy, at the hodges small cap fund we like a dallas based restaurant company brinker international. and brinker is, they have, they own 1,500 chili's scattered around the country, and they're growing earnings 17% or 18% a year, and we think that will continue over the next three or four years. one thing we like about brinker is that over the last eight years, they bought in 50% of their shares outstanding. meaning, in 2005, they had 130 million shares at that time. today there's only 65 million shares outstanding. so as they grow earnings, earnings per share increasing, because they're over fewer shares outstanding. the other thing that brinker's done, they've remodeled their stores. they just raised their dividend 20%. and we think the stock is 45
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today, with their earnings growth and outlook, we think it would be a $60 stock in two years. >> ooh. >> gary, loves to buy, eat. thank you very much. let's go a little biller now. mid cap. stocks on the market caps generally between 1, 2 ands 12ds billion. the five doctor star rated mid fund is here. ceo constantly on cnbc. koog snowmobiles and motorcycles. arias corps, a different name moop are they, why do you like them? >> sure. thanks, brian. one of the smaller stocks that we own in the chase mid cap growth fund. very interesting company. makes set top boxes, actually. bought motorolas old set top box business from google. this is a very exciting business. com cast just the other day was talking about how much traction they're getting from a new
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rollout, new features. when you have a $100 billion company talking how much they like the product that a $3 billion company make, that can be a good thing for the stock. yet it's still extremely reasonably valued. 12 times 2014 earnings for tremendous growth. >> that's arous group. and also rounding it out with the big guys. where should you put your money to work in the large caps in 2014? bran brandywine, patrick, no amount of legal settlements, multibillion dollar settlements thrown at this company, you still like it? >> yes. sometimes the best opportunities are in things everybody had skeptical about or often dislike. for jpmorgan, as well at large cap in general, cheaper than the small and mid cap stocks now. trading less than 13 times earnings across an entire portfolio. tremendous values with jpmorgan
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specifically, stock today upper 50s. in a couple years, earning $7 to $8 meaning we think the stock could be $80, $90. maybe a 50% return in jpmorgan. growing dividend yield, buying back stock, benefits from higher rates. most people think rates will rise over the next couple years. so there's a lot of ways for jp morgue ton do better as a company. a lot of ways for the stock to do well and we really think that first the bad news is mostly behind them. second, there are a lot of people still afraid. when people aren't afraid, the best opportunity as an investor to make good money in a stock. >> well said. metlife and gm. thank you, guys. thank you, patrick. still ahead -- >> thank you. drugs, drugs and more drugs. first, rocky mountain to take on colorado weed sales. a week after the state okayed it. then tell you about one cocaine deal that simply went bananas. and today's mystery chart. best performing stock market in
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the world so far in 2014. give you a hint -- ishs think shipping. answer, coming up. huh, fifteen minutes could save you fifteen percent or more on car insurance. yeah. everybody knows that. did you know there is an oldest trick in the book? what? trick number one. look-est over there. ha ha. made-est thou look. so end-eth the trick. hey.... yes.... geico. fifteen minutes could save you... well, you know. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york.
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mystery chart. it is the best performing stock market in the world and believe it or not, folks, it is -- greece. the dow jones industrial greece total stock market is up 6.5% year to date. athens up a little more. queue the offensive greek stereotyped music. drinks and whatever they drink in greece. >> oos uzo. bring in mcc. >> right. a great year, too. >> what's going on in greece to make it better? >> the rally driven by the fact, once the whole world figured they're not leaving the euro. if they were, the stock market could have gone to zero. right? every one of those companies borrowed in euros, pay back in -- a real mess. they wouldn't leave the euro leads to a huge rally. finally a primary budget surplus. right? if they didn't have interest payments, they would actually have extra money left over. >> before i joined cnbc i was also in greece, a couple of
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years ago. blowing up banks, rioting in the square. >> they still do that. >> everybody i talked to either didn't have a job, didn't pay taxes or thought those who paid taxes was a fool. so you're on to me, mcc. here's my point. i hear all the technical stuff you're saying. the country still has a lot of problems. >> yes. so there have been some reductions in the size of government. they have laid off some people. they have cut salaries dramatically. you know, if you used to makes 15,000 euros now only making 10,000 euro. that's a big decline. i'm making up the numbers but they've cut salaries dramatically. stopped paying bills. part of the issues as well. done hard things. >> the primary europeans, portugals, italys, spains and -- ireland, doing very well. >> italian yields look like they're approaching german
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yields. >> right. the cac, footse. >> back to when you're coming off a horrendous bottom, you'll see the most improvement, right? make the quickest, fastest buck. >> see? pigs do fly. >> i'm taking a note out of the pun book of brian sullivan. >> thanks, michelle. >> thank you. >> thank you. well, she hasn't officially started the job yet but already incoming fed chair janet yellen is getting a new stance treatment. the kov story of "time" hitting stands next week. she expects more new jobs in the economy this year. let's hope so, bringing us to our nerd alert. here it is. almost 2.39 million americans voluntarily quit their jobs. >> $2.39 million of americans, apparently. >> yeah. >> like your salary. >> oh, yeah.
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according to the report for that month, it is the most people quitting jobs since 2008. i.e., before recession. what is good about this, brian, a sign people -- >> what's -- >> it is a sign that people are feeling more confident in the economy. if they can voluntarily quit their jobs they're confident they can get another one. >> one of the few shows that ever talked about the jolt survey. job opportunities. what's this? now it continues to grow. the voluntary departure, rather than, here's somen in in a pink slip. get the heck out of here. a good sign, labor mobility is key. up next, are you wrestling with a new stock play idea for the new year? perhaps you found one. you're on the ropes. you don't quite have that body slam idea. we might have one for you. >> and later on, a stoner's delight. the people are colorado banking on a marijuana boom and munchy plays in 2014, it's all ahead for you, guys. first of all, let's get to sharon epperson for today the "punk patrol."
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"pump patrol." >> reporter: disruptions in refineries due to the deep freeze may impact gasoline splice. that should be offset, aaa says, by demand this week due to the fact many drivers don't want to be on the road in bad weather. national average for retail glooens holding steady at $3.31 according to aaa. gasoline prices are the lowest in the nation on average in oklahoma and montana. gasbuddy.com says just above the $3 mark. and the cheapest gasoline in the nation can be found in spiro, oklahoma, where you can fill up for just $2.79 a gallon. that's today's "pump patrol." n more "street signs" after this quick break. but your erectile dysfunction - it could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph,
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welcome back to "street signs." i'm sharon epperson. natural gas fell. plummeted more than 4% today as traders are much more focused on the forecast ahead looking for above normal temperatures than on the report out today from the government showing a bigger than expected decline in natural gas storage levels. we are looking at temperatures that will start to rise over the next week or two, and that is what is really driving prices down here. traders say keep in mind as
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well, seen a pretty big fall in natural gas prices from the $4.50 mark back in december. back to you. thank you very much, sharon epperson. it is "street talk" time. exxon/mobil, one of the reasons we're seeing a drag on the dow. downgraded by citi to a neutral reading. >> one of those calls jim cramer would agree drives you insane. here's why. they downgraded the stock citing valuation. why i don't like these kind of calls, increased target price. 108. downgrading it yet see the stock going up another 8.5 bucks. chevron, conocophillips, raising as well as pa true yum to $100 a share. >> and trading low, despite named a top pick for this year.
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>> stocks up 3%, mandy. >> goes to show it is a live television program. >> a live television program. taped the segment at 8:30 this morning. and u.s. residential and commercial solar markets. if youty a tesla, right? an elon must invest company. if you buy tesla on their website it says, use solary city as your installation if adding a super-charging packs to your kbraush wall. don't ask me how i know. i was dreaming. sniffing around their website. >> i believe you said when you look at that one-year performance, solar city, the premium. h & l block, upgrade. >> target $36. h&r block, up 50%. seeing about $ upside. opportunity here, perhaps into leveraging of certainly units. >> and the list gishen an upgrade over raymond james. as a result, pop for the stock.
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>> stock's up. the consumer rating and review site there. >> yes. >> firm also upping rating to a strong buy. a $23 target. so about $8.50 of upside. short interest. betting against angie's list is high relative to the float. a positive call, shorts get squeezed out, stock goes up. could be part of what's happening today with angie's list. >> good to note. under the radar pick. what is it? advanced emissions solutions. >> never heard of the company. 56789 des, the ticker. never heard of them. less than a year old. actually a holding company based in colorado. only about 100 employees to the name but they use technology and chemicals to cut emissions at coal companies. initiating with a buy and $67 target. about 30% more. under your radar pick. >> one year. 184% up side over the past year. >> and stocks just about a year old.
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there you go. based in colorado. all right. world wrestling entertainment, wwe. that's what it stands for. launching a new subscription-based web channel. stock already more than doubled in the past year. vince mcmahon, video, getting his head shaved. talk numbers. richard ross on the technicals. rich, excuse me, i'm all choked up thinking about wrestling. it moves me that much. john stephenson on the fundamentals. john, wwe, still watching, connecticut-based company. i know nothing about the industry. what's your take? >> they're already on the top rope after that 111% increase last year and nowhere to go but down. i think there's going to be a big belly flop from the top rope for these guys. look, they're introducing an online subscription service which will cannibalize their pay per view broadcast cable business. so i think that's one problem. certainly evaluation isn't compelling trading 109 times
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forward earnings over the last four years. speaking of earnings, vince guided that earnings this year lower, and then of course the core business is just deteriorating. you don't have enough young men looking at wrestling with its scripted program. >> you have -- all of these -- >> boxing, you've got -- >> actually beating each other up? >> it's a real sporting event as opposed to a scripted one. the whole concept behind this, people watching reality tv shows of aging wrestlers? don't see it. raw has gone from 5 million viewers to 4 million in the last years. valuation is stupidly high. >> come on. aging wrestlers? my favorite tv show, john! >> come on. >> welcome to the chat. and here? >> mandy, you have it all wrong here. this move to streaming is genius. wrestling is a ratings juggernaut second only to the nfl in terms of average viewers. when the domestic tv deals,
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expiring this year, these guys will cash in coming and going. that's just conversation. break down this chart. you can see since breaking above that 20-day moving average back in october, stocks up 65%. yes, we run into reap zifsistan the $17, on the pullback, hold that 20 day but hold that well defined trend line. zoom out quick. show you the story gets better on that longer term chart. look, you know i love the head-and-shoulders bottom. forms over a period of three years. yes, gone vertical but there's at least anothers 3ds to retest the old high around $19. you want to be a buyer around $16. this stock goes higher. >> rich super phi film ross, krish stephenson. thank you very much. john hates it. rich lovesit. what "talking numbers" is all about. check out cnbc. click on it.
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there you go. next up, the best idea we have heard in a long time. corporate america take note. plus, we find out who is really making money off the legalization of pot in colorado. later on in the show, we'll tell you how the super duper rich have been staying warm during this frigid weather. but first, bill griffith, tell us what's coming up next on the "closing bell." >> they leave town. mandy, ibm is making a billion dollar bet on its famed super computer watson. we'll hear from the head of the watson division. and hear from the man who lost to watson famously on the game show "jebty "jeopardy." and klaus kleinfeld, discussing a settlement just announced. all that and more. kelly along as well. we look forward to seeing you at the top of the hour on the "closing bell."
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and founder bill gross, joining us with an outlook for the new yoo year. the show kicks off at 11:00 a.m. pacific right here on "street signs." >> 2:00 a.m. in guam saturday morning n. australia, what is it? show us your meddle? >> 2:00 p.m., it would be, what? 1:00 p.m., saturday. >> oh, yeah. ish. >> oh. i'll take the ish. it's actually wednesday. file this under best idea of the week. no texting, e-mailing, tweeting, nothing. no smartphones during meetings in the city council of peoria, arizona. members unanimously voted earlier this week on it. the amendment bans members from using any electronic device that can send mempgs. kind of like derek jeter's house. put them in a basket. it's genius. people say, i need to get work done. i guarantee you, meetings will go five times faster.
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get back to your desk and resume e-mailing the person who sits right next to you. >> yes. >> it's fine. and one week since legalizing recreational marijuana in colorado, an economy that's growing like weeds. our very own jane is doing research of her own in denver, colorado. jane, where are you? in amongst the weeds? >> reporter: at the 3d cannabis grow house. sour diesel maturing. whether or not marijuana is addicting, tax revenues are. one reason colorado is saying, hi, there, to tourists. >> we are literally inventing the wheel here. i have to credit the state of colorado, the medical marijuana enforcement division. they have done their best, but everybody has a learning curve. there has been a little delay in the rollout of the electronic tags. they are on their way. it's an rfid system. the same system that walmart uses to track its inventory, the state of colorado will use to track cannabis inventory. >> wow. that was not the wrong sound bite. we were following along, green
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touring group that was looking at going at local grow plants. ran into a university of texas finance major, who was here on a snowboarding trip. says he wraunants to come back, in the business and bring efficiencies to it, all because they're already booking tours for 4.20. and how much money are we talking about? according to the state, this new recreational pot rate is different than medical marijuana. paying a 15% excise tax and sales tax up to 20% depending on location. and industry claims $5 million in the first five days of sales at least a million and a dlaur dollars in sales taxes. back to you. >> how are you feeling? jane? got a little green glow there on your cheek. how are you feeling? >> reporter: you know, it's interesting -- >> are you hungry? >> reporter: no. guys -- the way they're able to control the growing cycle in here. these plants, they want to bring
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them to bud, 12 hours of light 12shgs hours of dark. before i get to denver, the airport, get on an airplane, i had better change my clothes. >> go and eat something. [ slurred speech ] >> it's amazinamazing, bro. i'll e-mail you a card for taco bell before you get on the plane i. love junk food, no matter what's in my system. >> well said, sister. going bananas for cocaine? check this out. photos of boxes of bananas filled with cocaine found in five different super markets in berlin this week. a logistical error by drug smugglers. the largest coke discovery in berlin in eight years. all i can say, worth $8 million on the streets. one of those drug smuggling logistical recruits will lose his job. >> all i can say is, the story has "a peel."
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>> the good, bad and hungry. branging down the best restaurant picks on the streets. menu. and later on, another reason to be jealous of the super rich, because they don't get cold. we'll explain, coming up. [ male announcer ] this is the story of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. ...and the little room above the strip mall off roble avenue. ♪ this magic moment it is the story of where every great idea begins. and of those who believed they had the power to do more. dell is honored to be part of some of the world's great stories. that began much the same way ours did. in a little dorm room -- 2713. ♪ this magic moment ♪
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there is one group on wall street that has been very busy. the restaurant analysts. just this week, we've seen more than 20 company reports and outlooks on the sector. sheila has been digesting it all and has the good, the bad, and the hungry. >> let me give you something to chew on to start with. in 2013, it was a banner year for restaurant stocks. in fact, the top 20 were up 47%. so what do you do in 2014? focus on the food. like chipotle does. this is one of their top picks. chipotle has been a leader when it comes to food innovation, staying on trend.
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second up, you want to look at companies that have a lot of unit growth. where can you build more and more restaurants? ubs and wells fargo, they like panera for that reason. the stock is down today, but they see 2014 being a good year for the stock. lastly, what about classic fast food? what about your good old burgers and fries? mixed picture when it comes to companies like a mcdonald's. today morgan stanley coming out with an upgrade, saying this is still a classic business model. don't forget this company has more than a 3% dividend yield. here's some picks for you. when you're thinking about the restaurant sector overall, there was a tone of caution when it came from all of these analysts. today said, look, an improving economy doesn't always mean good news for restaurant stocks. just because consumers have more money in their wallets doesn't mean they're going to spend it on eating out. in fact, they may be saving up for bigger ticket items. and when you're talking about restaurants, you got to talk about commodities. falling commodity prices has
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been a good thing, but ubs does note falling commodity prices doesn't always mean fatter margins. definitely a little bit of caution when it comes to this sector. morgan stanley had a funny quip. they said valuations are, quote, loco. back to you. >> all right, sheila. thank you very much. so what food stocks might be your best bets this year? let's bring in two guests. piper jaffray and r.j.hatavi. sheila talked about that morgan stanley upgrade to mcdonald's. here's my problem. the dividend payment on mcdonald's, 3 hadn't .4%. do you believe mcdonald's will have to raise its dividend and soon to compensate investors for owning what has been a pretty slow-growth company? >> yeah, i have dividend growth being part of the story longer term with this name. i have effectively their dividend growing at a high, single-digit clip. i could see it going above that. i think returning cash to
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shareholders has been a big part of the investment story. i think mcdonald's will continue to do that. >> certainly there's one stock that sticks out for both of you. that's starbucks. nicole, give us the case. >> well, there's a number of catalysts. the first is the u.s. comp. the second is european margins. they're getting much better. china, asia pacific, pure unit growth, huge acceleration. finally, cpg, awesome margin. >> cpg, nicole, i should know that. what does that mean? >> consumer products group. it's basically their channel development. they're taking a lot of retail food and beverage options, bringing them to food, drug, grocery mass channel. >> r.j., you also have on your list interestingly yum brands. i was just talking with one of our reporters from beijing today. she was saying if you had to put mcdonald's against yum brands in china, which is doing a much better job? it really is yum in terms of localization. that's absolutely kicking the proverbial of mcdonald's. why do you like yum brands as
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well as mcdonald's? >> i like yum for the global growth story there. i think it's still got a ton of global growth ahead of itself right now. particularly not only in china but a number of other emerging markets. oftentimes it gets pegged strictly as a china story. but a number of other emerging markets really offers a lot of growth for this name. i think the china story will start to turn in the first quarter of 2014. i think a lot of negativity has been played out at this point. i do think this is a longer term unit growth and profitability story. >> nicole, for our viewers that may be coming to new york sometime soon and they're bored and it's a monday night and starv starving, if they go to dell frisco's, it's packed. 24/7 in manhattan. is that the way it is all over america? it's one of your picks. if it is this way, this company could be a juggernaut. >> well, for the double eagle, which is their highest of the
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high end concepts they have, that is the case. reservations are recommended. but the grill, which is, you know -- it's lower end, more casual concept in the portfolio, that's a business that's growing units and growing sales. >> and if we want to wrap it all up with a nice dessert at the end of the meal, why don't we have cheesecake? nicole, another of your picks. >> it fits the recipe we look at for restaurant success. basically, do you have brand equity? if you have a brand, somebody wants to license it. they have joint venture partners for international growth. the final piece is then take that brand and put it in the grocery aisle. they have frozen cheesecakes. that's a very high margin. so with a comp, great earnings. without a comp, still great earnings. >> and it of course performed very well over the course of last year. so let's see if it can do it again this year. nicole, r.j., i think i'm feeling hungry now. thank you very much. coming up next, thawing out the
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super rich. see where the world's wealthiest have flown south for winter. ♪ ♪ ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade. a body at rest tends to stay at rest... while a body in motion tends to stay in motion. staying active can actually ease arthritis symptoms. but if you have arthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain so your body can stay in motion. because just one 200mg celebrex a day
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can provide 24 hour relief for many with arthritis pain and inflammation. plus, in clinical studies, celebrex is proven to improve daily physical function so moving is easier. celebrex can be taken with or without food. and it's not a narcotic. you and your doctor should balance the benefits with the risks. all prescription nsaids, like celebrex, ibuprofen, naproxen and meloxicam have the same cardiovascular warning. they all may increase the chance of heart attack or stroke, which can lead to death. this chance increases if you have heart disease or risk factors such as high blood pressure or when nsaids are taken for long periods. nsaids, like celebrex, increase the chance of serious skin or allergic reactions or stomach and intestine problems, such as bleeding and ulcers, which can occur without warning and may cause death. patients also taking aspirin and the elderly are at increased risk for stomach bleeding and ulcers. don't take celebrex if you have bleeding in the stomach or intestine, or had an asthma attack, hives, other allergies to aspirin, nsaids or sulfonamides. get help right away if you have swelling of the face or throat, or trouble breathing.
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tell your doctor your medical history. and find an arthritis treatment for you. visit celebrex.com and ask your doctor about celebrex. for a body in motion. apparently the rich are not insulated from the insanely cold weather in this part of the country. they've had enough of it. and they're ready to thaw out. robert frank, time to make us jealous. where are they all going? >> we're going to start out in
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st. lucia. it's a place called sugar beach. you had me at sugar beach. 100 acres of rain forest leading down to white sand. you get your own butler and mobile device to message your butler. most of the villas have their own plunge pools. there's a spa house with treatment rooms. that's only $700 a night to start out. our next location is actually in nicaragua, a little off the beaten path. it's called the mccool resort. it's a five-star resort on the emerald coast. an 18-hole golf course. starting there, only $550 a night. pretty affordable. if you want to warm up like a rock star or a rich guy, go to st. bart's where they have the eden rock rock star villa. four bedroom suites, two guest cabins, private gym a whiskey bar, swimming pool, spa, private access to the beach, 24-hour butler and personal staff and a state of the art recording studio with the mixing console
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that john lennon used to record the song "imagine," which is appropriate because it costs $15,000 to $20,000 per night to stay in this place. we all have to imagine. >> so you mentioned things like crystal clear beaches and butlers. the thing that got him was whiskey bar. thanks for watching "street signs." >> "closing bell" starts right now. and welcome to "closing bell." i'm kelly evans at the new york stock exchange on a thursday. >> i'm bill griffith. we're watching a bit of a sea saw market today. the jobless claims number a little less than expected, which is a good thing. waiting for the big jobs number tomorrow. alcoa earnings out after the bell. your first time on "closing bell." a lot to talk about coming up. also, this press conference that went nearly two hours earlier today and now a visit to
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