tv First Business KICU April 5, 2013 4:00am-4:30am PDT
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jobs and money: trader plays off today's unemployment data. in today's cover story, does the job market have a surprise in store this spring? plus, lessons learned: did the great recession make us smarter investors? and, what will they think of next? our traders brainstorm about new ways airlines are scaling back on lost revenue. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning on this jobs friday. it's april 5th. i'm angela miles. in today's first look: rally action ahead of today's jobs number and on the heels of stimulus from the bank of japan. the dow raced up 55 points; the nasdaq and s&p added 6. gold lost more money, as oil
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settled below $94. meanwhile, the market expects 192,000 jobs were added to payrolls, while the unemployment rate remained steady at 7.7% in march. from president obama to movie fans around the world, there's a collective farewell "thumbs up" to roger ebert. the award- winning film critic passed away thursday afternoon following a battle with cancer. he was 70 and essentially worked up to his last day. and the wall street journal reports hewlett packard chairman ray lane has steppind down. he'll be replaced by board member ralph whitworth. scott bauer of trading advantage joins us on this jobs friday for a closer look at the market action. good morning to you. and is there any trade off of this number today? - good morning angie. the trade is really to sit back and wait. if we get any sort of
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negativity, any sort of bad number that comes out here, you are going to see just a bevy of buyers coming in. the market down, with the s&ps, if the market hits around 1545, 1540, that seems to be an area where cash on the sidelines just runs in. so the trade, really to me, would be wait and see. in a couple hours, we get a little knock-down, get back in the marketplace. - as far as easing in the market, do you suppose that that is going to continue and will continue to support the market? - you know, globally for right now it certainly looks like that. but let me tell you something that is really interesting: i watch gold pretty closely, and everybody knows that it has been really on this downward free-fall recently. what's interesting to me is that with only a few weeks left 'til expiration, gld, the gold etf, the at-the-money straddle is suggesting about a 2.5% move yet in the next couple of weeks in gold. that would put
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gold futures down around the $1,510 mark, it would put the gld etf down around $146. those are significant numbers. volatility there is extreme. watch for a big move in gold over the next couple of weeks. - oil is moving down as well. are you having any positioning there? - you know, i am really sitting and watching here. another $1.50 or so to the downside, right around $91, $91.50, that is pretty critical. if we breach that, i'd probably get short it, because the next number below that is $89. but, you know, it is really following the commodity space right now in this downward trend. - thanks a lot scott. have a good one. - you too angie. steady hiring is forecast for the next three months. that's according to a survey of 2,000 hiring managers across the country by online job site careerbuilder. our cover story explores what sort of jobs are out there, and whether incomes are rising also. *a careerbuilder survey found better than one in four companies plans to hire full- time, permanent employees within the next three months - and for jobs other than highly-sought- after information technology and nursing positions.
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"sales, customer service and financial services are coming back." and there are jobs for those helping people in those areas find work, as jessica mays found. "i recently just got a new position. i got a lot of calls for interviews. that was not the case when i was looking before. hiring now is definitely changing." for all the uncertainty derived from the fiscal cliff, sequestration, and the eurozone's latest country-in- crisis, there's also optimism. "i think it's gotten better. we're hiring at my work. chicago's doing better. it's a big city." "i think you're going to see hiring pick up even more in the second half of the year." "i'm in the legal sector. i think it's gotten slightly better. but there are still a lot of lawyers who are struggling." - what about income values? is that going up? "it depends. if you're a highly-skilled i.t. person, yes, it's going up; but for most everyone else, not really. it's only going up for certain types
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of jobs." people in healthcare jobs, who managed to survive the recession better than most, may get additional work as more of the affordable care act is implimented. healthcare navigators will be hired at the federal, state and local level to guide individuals through an expected variety of health plans that'll be offered. funding for those positions is expected to be directed through community organizations. fast food workers are fighting for better wages in new york. workers from wendy's, mcdonald's, burger king, and other chains walked off the job thursday. it's considered one of the largest strikes in the fast food industry. employees want a pay raise to $15 an hour and to be able to protest without intimidation. new york recently raised the minimum wage to $9 an hour. however, many
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workers still earn between $7.25 and $8 an hour. the national restaurant association contends "additional labor costs can negatively impact a restaurant's ability to hire or maintain jobs." facebook hopes users will find a "home" with its new app. facebook's new software, called "home," showcases the social network on phones powered by google's android operating system. it converts the facebook news feed onto the phone screen. analysts say by offering the "home" app on cheaper samsung and htc phones, facebook wants to lure users who don't buy high-end internet- enabled phones. the service, however, comes with huge data charges. the justice department may be considering a shorter sentence for for former enron chief jeffrey skilling. skilling is serving a 24-year term for his responsibility in the accounting fraud that lead to the collapse of the enron energy
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corporation in 2001. according to cnbc, federal prosecutors may enter an agreement giving skilling the opportunity to be re-sentenced. "to let this guy walk free earlier, i think, is going to inflame the shareholders, the creditors, and all the people who lost billions of dollars in enron fraud." that was attorney hugh totten of valorem group. former enron employees, shareholders and others touched by the scandal will have until april 17th to object. the man who ran mf global is blamed for "risky strategy" that brought down the brokerage. a report by mf global's bankruptcy trustee louis freeh details how jon corzine misused money in trading accounts, ignored hedging requirements, and failed to control risk. corzine still denies any part of the firm's collapse. much of the $1.6 billion in customer funds has been recovered, by about 80 cents to the dollar. new data is leaking out about a growing number of people using offshore tax shelters. a report
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released by cnn reveals how people from all walks of life, from corporate america to doctors to middle-class greek villagers, are sending money to the virgin islands, cook islands, cyprus and switzerland to avoid paying taxes. money from financial scams that's stored in other countries is said to reach $1.6 trillion a year. sequester budget cuts are forcing some cancer clinics to turn away thousands of medicare patients. the national cancer organization is calling impacts "devastating." cancer treatment drugs fall under the umbrella of medicare, which was hit with a 2% cut following the sequester. many clinics say drug costs are too high to be able to treat all patients and stay in business. the community oncology alliance launched a petition, stating it is an "unjust and devastating cut to cancer care." walgreens is walking into controversy by expanding into chronic healthcare. most of its 370 walk-in clinics will now treat issues typically handled by doctors, such as high blood pressure. the clinics can write
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prescriptions and order lab tests. walgreens says walk-in care is on the rise, and the clinics will support in-office care. but critics say it makes healthcare confusing if patients visit different clinics. a large chunk of money intended for victims of hurricane katrina is missing. the storm devastated the gulf coast in 2005. a new report claims $700 million that was supposed to fortify homes from future floods is unaccounted for. according to abc news, the state of louisiana is aware of the missing money and pursing efforts to make sure homeowners are using the funds to repair and shore up their homes. boeing is expected to wrap up testing of its troubled dreamliner. the faa grounded the 787s in january following a couple of fire flare-ups sparked by lithium ion batteries onboard. boeing has modified the batteries, and if the faa agrees, forbes reports dreamliners could be back in the sky next month. meanwhile, british airways is going forward wtih orders for 18 dreamliners. on the downside
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for boeing, airbus took the top spot in the aircraft industry in the first quarter. reports say apple is facing a blueprint bummer. apple's plan for a new campus in silicon valley is around $2 billion over-budget. bloomberg reports inital costs were estimated at $3 billion. now, its closer to 5. expensive building materials and extra landscaping work drove up costs. now it's trying to shave about a billion dollars off of the project. a best buy bounce: shares rose 15% yesterday after the retailer disclosed it will discount apple ipad 3s by 30%. the electronics retailer will also set up samsung's store within best buys in may. changes are coming to the meat market. just in time for grilling season, the pork and beef industries are reworking cuts of meat to make sales sizzle. one example, "pork butt" will be called a "boston roast." the national pork board says current meat labels are too confusing to customers. still to come, a friday favorite: traders unplugged.
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th a deadly disease. i was one of them. i'm a nurse and i knew how damaging the disease was to my life. nothing i tried seemed to work. my brother died. from complications of the exact same preventable disease and i knew i had to do something to get healthy. my disease was obesity and after consulting with my doctor, i received the effective treatment i needed. obesity is a second leading cause of preventable death in the united states. but it's a treatable disease, and there's effective treatment options available. now is time to get help. please join the obesity action coalition and acknowledge obesity as a disease for acceptance, for access to all effective treatments, including diet and exercise, pharmacotherapy and weight-loss surgery for obese adults with at least one obesity related comorbid condition. visit obesity action dot org and sign an open letter pledging your support and for more information about how to talk to your doctor about your weight and your treatment options. together we can make a choice to end obesity now. a public service from the obesity action coalition.
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the great recession rattled everybody, from the ceos of our biggest banks to the small investor. in fact, as great events in history often do, it's changed us - changed us as investors. that was borne out in a study commissioned by fidelity investments. "5 years later" it's called. john sweeney is the executive vice president of fidelity. john, i remember going into the recession five years ago, we americans, we weren't afraid of personal debt. we had a negative savings rate in this country! and i know that has, in fact, changed. - you know, it is interesting to see investors changing behavior 5 years later. when we surveyed investors, we found 58% of people actually felt more confident today than they did going into the downturn. and they have changed their behavior around spending and savings patterns, which is a very positive outcome. - so is this be reflected in
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the all-time highs on wall street right now? - i think that certainly the recovery of the stock market has helped to increase investor confidence. but more importantly, when we look at the behaviors that investors are able to control, when they look at their own personal economy, they can control savings and they can control their spending. so what we see is half the people we surveyed actually increased their savings rates, and 42% of the people we talked to reduced household debt. both of those, again, very long-term trends that tend to be positive and tend to stay with investors for very long periods of time, and those are good. - yeah, those are good, but i have also looked at reports that say still most americans aren't saving enough - we're not planning enough for retirement. - we find that the investors who do plan and understand the objectives so that their portfolio has against each of the different goals that they
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have. we all share a goal of retirement, some of us want to send kids to college, pay off a mortgage. when you understand the role that equities, bonds, and stocks play against those different goals, you tend to be able to weather the downturns and the volatility much more successfully. - equities - how about equity in one's home? is that factoring in here at all? - what we think about in terms of home equity, oftentimes people, as they are entering into retirement, think about downsizing, selling a home, perhaps moving to another whole locale; and when the recession hit, really, it created a freeze. people didn't have job mobility. perhaps they couldn't sell their home or they couldn't get out of a mortgage that was large. as you start to see the housing part of the market come back, again, that choice frees up for investors, particularly for those who are entering and plan to live through retirement, they can look at their home and look at that as an asset that when they downsize they can use to reinvest and help fuel some of their retirement savings that they need. - these are hard lessons for many of us. let's hope they stick. john sweeney from fidelity. thanks so much. - thank you. still ahead, fannie mae just reported record profits. what does this mean for investing in housing? that's next in traders unplugged.
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and now, from the floor of cme group, the two "ak"s, as one viewer likes to call them, alan knuckman and andrew keene, ready to electrify you with their trader smarts in traders unplugged. topic one: energize your money: which coal stock is likely to rise now that nat gas is going higher? - go ahead. - i like peabody. i think it is a beat-down stock. here at $19 it looks very attractive. we are at the lows for the year. it has come down from $30 just recently. so i think coal is an under-valued asset here now that that price advantage is going away for natural gas. - if i could choose "none," i would choose "none," but if i have to choose one, i was pushed up against the wall and alan was making me choose a stock, i am going to choose arch
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coal. they had record revenue and profit. the stock trading at a 52-week low. it is trading at 0.3 times book value. the chart looks a little weak. on a short leash, i would get long arch coal. - all right, moving on now to topic two: the housing recovery is going so well, fannie mae may be able to repay the government $50 billion from its bailout. what's the best play in the housing sector? - i have been talking about this one for a while. the best housing play is home depot. the chart looks great, it is going to break through $72.50, it is on its way to $75. i don't want to play the housing stocks. they look a little frothy up here. they are starting to roll over a little bit, but hd looks strong to go. - i need some political action out of you saying that fannie mae is paying back their loan. after all the things you said- - they are asking me the question what to i want to get long? i want to get long home depot. - i just want to hear some political thinking. but when it comes to trading the housing stocks, fnma has gone from 30¢ to $1.50 in two weeks, so it looks like it is coming back to life. you have to remember, that was a very high-priced stock back in 2008 before the meltdown. - topic three: weight a minute:
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samoa air is charing passengers based on their weight. what else will we see coming from the airlines? what is next? - first i would view this as discrimination, but it is another way to generate revenues, and the airlines have to come up with these ideas. we thought that paying for baggage was outrageous a couple years ago, but look at how much money comes in. i like southwest airlines. southwest airlines is america's airline right now. and the near-term target for that is $20 based on this retracement, so we still have 60% to go to get to $20. - so you just said that they are charging for baggage, but southwest is the only one that doesn't charge for baggage, and you like that stock. - they can now charge! - if you don't make money off the tickets- - but southwest has this whole potential revenue stream that they can tap into a little bit. - but they are not doing it at all right now. - but just imagine how much money they can make when- - if i had to choose an airline
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stock, i would choose lcc with the merger. i think that one is headed higher. we have seen a huge, huge run in 2013 on the airlines. they are starting to pull back. i don't want to buy any just yet. i want to see a little bit more consolidation before they move north again. i don't think this is discrimination. that is like saying these carpool lanes in california are discrimination because two people in there can get in the carpool lane. this is absolutely not discrimination. maybe alan needs to lose 10 lbs. next time before he goes to vegas. definitely not discrimination. - bonus round time: tax breaks: which one is the legit tax deduction, babysitter money or money for cat food? - all deductions are legitimate unless you get audited. - definitely would never say that on air. b. - you're right. it's cat food. there was a junkyard owner, and he proved that his cat killed rats and mice, so the government said ok. - boom. don't get cats. dogs. - there's the bell. thanks a lot guys. first business continues right after this. i wanted to be in the military since i was a kid.
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i served a total of 16 years. and at 19 years old, that's the first time i ever saw somebody die. coming back, i was raging. i started having pretty horrible nightmares. i started drinking a lot. i guess i never recognized it in myself. it all starts with going to the va. there's a whole community of veterans that just want to help you out. it's for the guys who couldn't come back, you owe it to them to live well. because they're not here with their families.
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traders keep talking about social media stocks, and so do we. tim biggam of moneyblock joins us now from the floor of the cboe. good to have you back on the show. it has been awhile, tim. - always great to be here, and good to be back, angie. - let's start with zynga. this has been a gamble for a lot of traders out there. what is your position? - actually looking a little interesting down here. this was, not too long ago, the way to kind of backdoor play the
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facebook ipo. that trade didn't work out too well. the stock now down around $3.50, starting to get a little bit of a bid down here, especially with the rumors of perhaps online gaming being approved in the uk. so, i kind of like it as a real speculative play here. certainly at $3.50 i like it a lot better than at $6, $7 not too long ago. - all right, so, would you be willing to put your own money on the line here? - not only willing, but have. these stocks down here, again, highly speculative. i am using it as a very small part of my speculative money. but, at $3.50, you know where the downside is, so the loss limitation i kind of like here, and i also like the fact that they are getting some more out of their business model going forward. - what about facebook? - exactly the same kind of idea there. this stock has come down from the ipo price. the announcement yesterday regarding perhaps the phone
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rumors and soforth, but again, they are looking at ways to monetize their business model in a different direction. i like companies that look at that going forward. so, i kind of like the stock down here, again, as a more speculative play. so i am putting less money to work than as a traditional kind of buy-and-hold investment. - and quickly, what would be your price target? - you know, the stock was around $26. i would be looking for facebook somewhere in the mid-$30s probably to trim back maybe toward that initial ipo price. with zynga, i think just park it away and check back in a couple years on those low-price stocks. hopefully the thing would take off and maybe i would double or triple it. - thanks tim. - thank you, angie. it's closing time for first business. we hope you will check in with us monday. the ceo of a popular hotel chain will be here to explain why so many hotels are for sale. from all of us at first business, thank you for watching. enjoy your weekend!
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