the middle man - president obama's latest push to get america's middle class growing again. in today's cover story: mcdonald's employees are furious. it takes money to make money at the chain. plus, over the hill: a look at how congress is spending their golden years... versus yours. and... bombs away! hollywood's latest blunder at the box office. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning! it's thursday, july 25th. i'm angela miles. in today's first look: wall street "likes" facebook. shares exploded above $30 after the close as profits and revenues easily topped analyst

expectations. this stock will defintly be in focus today. in yesterday's trading action, the dow fell 26 points. a troubled outlook from caterpillar led the downfall. the nasdaq eeked out a one- point gain, but apple was a big winner on the day with a 5% jump off of earnings. and the s&p pulled back 6 points. gold was off by $13, and oil lost $1.91. in earnings after-hours last night, qualcom topped analysts' targets with a 35% increase in revenue. shares rose nearly 3 dollars in late trading. what better way to start your day than with a guy in a cow jacket? scott shellady of treon group joins us now. good morning, good to see you back on the show. - good morning. - what trends do you see in the market right now? - i think the one that we're paying most attention to and focused on is we're getting a little bit nervous about the

consumer. the consumer has really been the one who lifted us out of the problems that we're in right now, and i think that's slowing. usually we can count on them to be growing at 7% a year. it now looks like it's closer to 4%, and now we've got some reports that say it could ultimately end up being 2% or 0%. so, we've got to see this consumer really start to come back and help us out. - what about the facebook surprise? this stock easily cleared $30 after hours on better-than-expected earnings news. what do you anticipate will happen today? - i think it will build a bid underneath the market. it also depends how other, bigger economic factors come through. but i am a little worried about facebook, because i do think that there are other rivals out there, and these kids change their ideas so quickly, i think that those viewers are going down. right now, build bids in underneath, but i'm not quite sure we're going to see those

old highs anytime soon. - what trades are working for you in the market? - well, we're going to have to get on this bond trade. i think there's a lot of folks that still have to exit it. so, that 10-year yield going up, we're seeing those bonds sell off. that's where we've been sitting, and we've bought puts and a number of different expiry bonds to try to benefit from that, and so far that's been working. so, we're not going to say that we think that that's going to stay like that anytime soon, but in the short-term, we could see a yield spike and see these bonds sell off. - what do you see for the s&p? - i think that it's getting tired. we're going to continue to slowly grind higher, because if you've got cash, you can't put it in bonds, and right now you can't put it in cash. you're going to have to do something with it, and the best place right now is the u.s. stock market. - good plan. thank you, scott. in today's cover story, a lot of big companies are paying their hourly employees by payroll cards instead of issuing payroll checks or direct deposits into employee checking accounts. but employees say these cards come with bank fees to access their own earnings. at a mcdonald's franchise in pennsylvania, natalie gunshannon's take-home pay of $287 was put on a debit card from chase bank - not a check or direct deposit. nor is she a chase customer. immediately, gunshannon had misgivings. "my bank wouldn't accept it. i was told it would cost me $1.50 at an atm every time i wanted to withdraw my wages - that's at a chase atm. but there isn't one for 30 miles." she tried to convince the franchisees, robert and carol

mueller, to pay her by check. "i asked if i could be paid differently, and they said they wouldn't allow it." gunshannon's now part of a 150- person class-action lawsuit. in pennsylvania, employees are entitled to be paid by cash, check or by direct deposit. "they were mandated to accept this and these are the most vulnerable people. they barely make minimum wage." many see the payroll card as a way to cut payroll processing expenses. but the lawsuit drew nationwide attention to mcdonald's in general and to the muellers in particular, who have since agreed to a direct deposit option. but mcdonald's corporate still stands by payroll cards. "it costs $220 a year per employee to direct deposit. it costs $15 for a debit card. mcdonald's declined our request for an interview, but in a statement, said, "all employees at mcdonald's-owned restaurants can choose between direct deposit and payroll cards." but

franchise owners make their own choices. the issue extends beyond the golden arches. "this is being played out across the country. home depot, walgreens - there are lots of businesses that pay their employees with these cards, and the n.y. attorney general is looking into this." wednesday, mcdonalds ceo don thompson pointed out that 40% of mcdonalds executives and half of the chain's franchisees started out as hourly employees. as for mconald's suggested budget for how employees can live on $25,000 a year, which critics have called "out of touch," thompson called a lot of the comments "interesting." president obama delivers a speech today from a port in jacksonville, florida. he is set to talk about new ways america can create more products and build up the middle class. yesterday the president stressed that u.s. businesses have created 7.2 million new jobs in the past 40 months. he

also laid out a 6-point plan for the future he believes will strenghten middle america. he says he is willing to work with both democrats and republicans. "i will welcome ideas, but i will not allow gridlock or inaction or willful indifference that get in our way." the gop's mitch mcconnel brushed off the president's comments, telling reporters the president's. speeches are a clossal waste of time and energy. the leaders of corporate america admit they have too much power. a new survey finds 75% of business execs say they consider political giving "pay to play." 90% think there should be stricter limits on how much money can be spent on elections. many surveyed also believe public companies should disclose political contributions. the senate has passed a deal to scale back student loan rates. this fall, students will borrow at a 3.86% interest rate. at the beginning of july, loan

rates doubled to 6.8% from 3.4% due to inaction from congress. now, government-backed loans will be tied to the 10-year treasury note. the rates are capped at 8.25%. as the cost of college skyrockets, more families are making sacrifices. "post-recession, we're seeing families make this choice about college, which they strongly believe in. but they are doing it through a lens of cost- consciousness that we didnt see as much of before the recession. they are eliminating schools based on cost, they are choosing what they can afford." sarah ducich of sallie mae says more students have started living at home while in college to cut down on expenses. it's unclear when a fire that has been raging for nearly 2 days on an oil drilling rig in the gulf of mexico will be fully contained. yesterday, the natural gas rig partially collapsed into the ocean. the investigation continues today. no injuries are reported.

nearly 100 companies, including bp and exxon mobile, are being sued for destruction to the louisiana wetlands. the suit alledges pipeline construction damaged coastal land, which acts as a buffer against storms. the lawsuit states the area is so seriously diseased that if nothing is done, it will slip into the gulf of mexico by the end of the century. bp has no comment. the former goldman sachs trader known as "fabulous fab" took the stand in his fraud trial wednesday. the sec alleges fabrice tourre mislead investors with real estate- related funds that lost nearly a billion dollars when the housing market collapsed. an sec attorney told the court tourre failed to disclose the "paulson & company" hedge fund selected the fund and was also shorting it. tourre reportedly told the court, "i'm not paulson and don't know specifically what trades they were doing." federal prosecutors may come out with criminal charges against "sac capital advisors" this week. authorities have

questioned the firm's practices for years. as one of the nation's most successful hedge funds, sac churns out $1 billion per year in trading commissions and fees. however, it faces possible allegations of insider trading. cnbc reports founder steven cohen sent out an email to the staff that he expects sac to operate normally going forward. cohen's sec hearing is set for august 26th. the plot thickens: the ball is now in billionaire investor carl icahn's court to take over dell. ceo michael dell has offered shareholders a final offer of $13.75 per share to take the company private, up from his original bid of $13.65. icahn believes that bid still undervalues the computer company. his counter-offer could reach $18 a share. a shareholder vote is re-scheduled for next friday. investors clearly believe the plan to merge apparel company maidenform with hanesbrands is a good fit. hanes shares rallied more than 8% yesterday. hanes will pay $575 million for maidenform, or $23.50 per share, sending maidenform stock

racing up more than 22%. the deal is likely to be done in the 4th quarter. and here's one for gadget fans: google just unveiled its new nexus 7 tablet. the sleeker, higher-resolution tablet is less pricey than apple's ipad. tech analyst rob enderle says depending on when google's competitors release new products, google could have an edge in the marketplace. "long-term, it should give them more ad revenue, unless the other products that come later in the year pull people back to those brands. this is going to be a fight. google is throwing down the gauntlet, but the other players, amazon and apple in particular, are here to play as well." google also launched jellybean this week, an updated version of its android mobile operating system. enderle says the big highlight of that system is that multiple users can share one tablet. after months of recession, the european economy is growing again. the latest data shows

manufacturers in germany and france are ramping up production to keep up with strong demand. there's also said to be an uptick in hiring, especially at german factories. the eurozone has been in a recession since the end of 2011. back in the u.s., despite recent troubles, boeing reports business is good. the jet-maker says profits are up 13% as commercial and military jet orders take off. at ford, stronger u.s. sales paired with fewer losses in europe gave earnings a bounce. discover also topped expectations as higher-interest income and more consumer loans helped quarterly profits. lower demand for mining equipment at caterpillar hurt its bottom line. fuel costs helped delta, which helped profits nudge up by 80 cents a share. and, at pepsico, price increases at frito-lay helped lift earnings, even though americans are drinking less soda.

still to come, blockbuster bombs: films that cost millions to make and are falling flat. plus, the curiously cushy retirements of our congressmen. and, what would you do if you won the lotto? the surprising way a powerball winner is spending her jackpot. first business continues after this.

it's on. a federal judge has cleared the way for detroit's bankruptcy case to go forward. the judge has frozen all lawsuits against the city and challenges to the historic chapter 9 filing. according to the new york times, the court also extended protection from litigation against michigan's governor snyder and detroit's emergency manager, kevyn orr. retired city workers filed lawsuits claiming bankrupty puts their pensions in jeoparady. protestors at the hearing say the governor has illegally taken control of the city. so, who do you think is more likely to enjoy a comfortable retirement? you, who has to plan and work so hard and save, or a member of congress, who can vote to essentially use your money, taxpayer money, to pretty much fund much of their retirement years. the respected site bankrate.com did a study, and the results are rather

startling. let's talk to chris kahn. he's the analyst for bankrate who did the compiling of the data. first of all, chris, what is the reality in terms of what most of us have in preparation for our retirement years regarding pensions and 401ks? - it's an extremely hard time to retire right now. i know that's not a great piece of news for people, especially baby boomers that are looking to leave the work force right now. you can talk in a number of different places. first of all, pensions, the decline of pensions in the united states. the fact that healthcare costs are going up and medicare is a perennial target of budget- cutters in congress. the fact that home values haven't really gone up in the past decade or so. there's a lot of pressure on average folks to find the money to retire. now, comparing that to congress, this is really kind of an apples-and-oranges comparison. it's fun to look at how your retirement is going to be compared with your elected representative. there's a lot of things that they have that are an advantage. first of all,

they're federal employees, and federal jobs have always been thought of as a great source of benefits. also, their pay. typical congressmen, representatives and senators, both make about $174,000 a year. so with more money, they're going to have more to invest, their social security is going to be higher. - what, typically, can a congressmembers- i mean, you have to generalize here- what can they likely get in their retirement years on a monthly basis as opposed to most average americans? - the government's done some studies on these, and, again, we're comparing someone who's making about $174,000 per year right now verses, if you want to take the median u.s. worker's salary, it's around $40,000 to $50,000. so, there's two big differences there. if you wanted to look at their initial social security benefit, for congress, it's going to be around $30,000 a year. for your average joe, it's going to be around $18,000 a year. - all right, well i think i know what i want to do, quit and go work for congress. - it is important to say that there are a lot of things that average folks can do other than running for congress to extend their retirement benefit. you can consult a certified financial planner, diversify your assets, really try to find ways to save more. there are all sorts of things that you can do. - all right, chris kahn, good information. thanks so much. - thank you.

bill, that big-time lottery winner in florida who scored the $590 million powerball jackpot has more than enough money for retirement. the 84- year-old reportedly will write a $2 million check to pay for roof repairs at a high school in maine where her daughter teaches. it's not the first time the town has "gotten lucky," so to speak. a mill that shut down there re-opened last year to fill orders for "fifty shades of grey." coming up, a look at what starbucks has in store with earnings out today. but first, the rise of blockbuster film failures. that's next in movies and money.

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the list of blockbuster films bombing at the box office is growing. our movie guy is here, erik childress. always a pleasure to have you on the show. - thank you. - what is the latest bomb?

- the latest bomb is "r.i.p.d." it's the first real black mark on universal's really pretty spectacular year that they've been having. $130 million- budgeted films, it barely did $13 million. so, it's the fourth straight week they've had one of these really expensive pictures not really perform up to what the studio wanted it to. - we have had a number. "lone ranger" was also on the list. - absolutely, and "white house down," and "pacific rim," we're still waiting to see how the international dollars come in, but this is a film that maybe might do $100 million here in the u.s. so it really needs to do about $325 million overseas just for it to break even. - is there any connection as to why these films are bombing? - well, if you look at just this past weekend alone, you have hollywood flooding the market place. you had four movies opening this weekend. it's the first time you've had four big wide releases since march 1st, and back then you had "jack the giant slayer," you had a sequel that no one cared about... kind of the same thing here. there's a $370 million combined budget between these four movies, and the film that

only cost $20 million took the top spot at the box office, "the conjuring." - last weekend at the box office, your favorite film of the summer so far came in number one. "conjuring" at $41 million, and "despicable me 2" - look out, here come the sequels - "despicable me 2" came in second, "turbo," "grown ups 2," "red 2." i tried to watch a little bit of "grown ups 1." - yeah. no. - not my cup of tea, but... - no, you shouldn't do that. - ...that's ok. - yeah, stop it. don't do that. - okay. done. done. now coming out this weekend, "the wolverine." it's a hugh jackman film. he's very familiar with this role. - yeah. this is the sixth x-men film that we've had. it's the fifth one that he's been a part of. they already had one stand- alone wolverine movie that was actually very, very bad. this one's actually very good. i would put it actually on par with the last one, "x-men: first-class." - you liked it. - i did. i did, actually, quite a bit. and i think it sets up next year's x-men film very well. these films have done

pretty well for fox - $300-$400 million worldwide - and i think this one's going to open probably in the high $60s, maybe even as high as $70, and become a hit for fox, which they could certainly use, because "turbo" turned out to be kind of a disappointment for them. - also this weekend, "the way way back" goes out in wide release. - yeah, from fox's fox searchlight, their indie division. this has been out a few weeks. we talked about it before. steve carell, sam rockwell, who is tremendous in this movie. it's expanding to about 650-some theaters, and i think you're going to see it break into the top 10. it's one of the good films this summer. you should check it out. - two right there. thank you, erik. - thank you. starbucks could turn into a screen-stealer on wall street today. what one trader sees in the charts is next.

matt cavanaugh of cmz trading is here now to take a closer look at starbucks and gm. both have earnings today. good morning. - good morning. - let's start with starbucks. this stock actually got a boost of around $1.50 last night after the close. what do you anticipate for it today? - it should be interesting to see how they do. it's a great company, great stock. i think everyone's going to be looking at comparable-store sales, also what they've got going on in asia. people expect them to expand, but this is a stock that's done very well. it's priced expensively. so, unless there's a real blowout, i don't think too much is going to happen, and it looks like the options market agrees with me. - it looks like maybe it's already baked in anyway. we'll have to wait and see on that one. what about general motors? ford had solid numbers. - yeah, ford had a really great quarter. their earnings were up

about 50% year-over-year. but gm here is a little bit of a different story. i think people are really expecting good things out of them based on what ford said about the u.s. auto industry, how their earnings were going. but i think a big key here is that gm's factories are running at about 80% capacity, and ford's are running closer to 100%. so, the big question is going to be, do people expect gm's earnings to blowout like ford, and i think that this could be a possibility where if they miss, the stock may get punished just because of the run that it's had. - where do you see the support or resistance here? - it's really a critical point. i think that we're right touching at resistance for them. support about $3 or $4 lower. so, it should be interesting to see what happens if they do miss. - good to have you on the show. thanks, matt. - thank you. that's it for now. in tomorrow's show, tips on how to get discounts on your car insurance. and friday is always a fun day here. join us for our famous segment, traders unplugged. from all of us at first business, have a great thursday.

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