career enhancement, or ethical standards? why some in the finance industry question the choice. in today's cover story -renewed hope for unemployed workers who lost their government benefits. also...why this year may be a very good yearor the american small business owner. and why noone talking about a bubble in our high flying stock market. it's all ahead on today's first business! you're watching first business: financial news, analysis, and today's investment ideas. good morning it is thursday january 2, 2014. i'm bill moller, in for angela miles. in today's first look: no numbers to report from yesterday as there was no trading but today

it's back to work on wall street. this is the first full day of trading for the new year. in china the shanghai exchange is taking an extra day off and it's a bank holiday in japan which will keep the tokyo stock exchange closed. "am i in?" more than a million americans learn today if they were successfully added to an insurance plan. they were the ones who entrolled in obamacare through the website healthcare.gov. as of yesterday, the patient protection and affordable care act became law. those who signed up on the website should be able to find out if, gliches aside, they are covered by health insurance. the open enrollment period for obamacare will end on march 31st. bright and early on a thursday morning and for lincoln ellis it's time to get back to work. you're with green square--great to talk to you lincoln. it's been slow trading for a while.

what do you think is going to be moving things forward going ahead? will we see a pickup in trading activity? > >interestingly enough, people will come back from the holiday really refreshed and renewed off the backs of now 30% gains in s &p 500. and they'll be looking to a couple of things. toward the end of the month we have the federal reserve meeting and earlier in the month we have the consumer electronics who really highlighting information technology. technology could be a very big story across 2014. > >that begins in fact next sunday and i know some people are thinking that the tech laden nasdaq may be a real high flyer in 2014. > >it could be. it's reaching levels that we haven't seen since the late 1990s and given the kinds of stock market gains that we saw, our best performance since 1997 and 1996 in the s &p and dow respectively. the technology sector, if we actually do get a capital replacement cycle off the back of this 5 year run, could be in a very good place to pick up some gains. > >guys like you love data like other guys might like a

chocolate cake. let me ask you sort of a macro data based kind of question. give me some sense about the divergence between the broad asset market class and what's happening with commodities and whether or not those two lines are coming closer together. > >when we look at the broad base of commodities we see that they have fallen over the course of the last 3 almost 4 years on a year over year basis. at the same time, we've had very significant rises in asset prices. that's fueled by central bank policy. we do know that the divergence of those 2 things can't go on forever and while we appreciate the 30% plus returns in the s &p, when you have that trail by real demand in the underlying economy that's actually growing much slower, maybe in the 2 and 1/2- 3% range. those 2 lines will come back together at some point and the question is when. investors should be thoughtful about positioning themselves for that kind of environment. > >you need to take pause and think about something like that. is that what you're advising clients to do? > >the trends are that returns after a year like we have had, particularly in equity markets do follow through but they tend

to follow through with a bit more volatilty. so volatility begs investors to be long shored or exposed to asset classes like managed futures. those are 2 great ways to buffet the roller coaster that might unfold in 2014. > >have a good day out there lincoln. thanks so much. > >thanks bill. when congress returns to work, one of the first things senators will consider is renewing the emergency unemployment compensation program that expired december 28th. our cover story, looks at the battle lines being drawn with 1.3 million long-term jobless americans caught in the middle. senate republican dean heller of nevada and democrat jack reed of rhode island propose extending umeployment benefits for three months. president obama offered his support, saying the cut-off in cash assistance will hurt economic growth. "i think the republican party sees this as an issue that in 2014, the democrats could hit them with. // so maybe some wiser heads have prevailed and

republicans realize that a short-term compromise is a smart political move." on december 28th, emergency unemployment benefits ran out for 1.3 million americans who've been out of work up to 73-weeks. now, the maximum length of time states may offer benefits is 26-weeks. republican senator rand paul of kentucky objects to changing it saying "if you extend it beyond that, you do a disservice to these workers." labor relations professor bob bruno disagrees. "the reality is that there are too many people pursuing too few jobs. // frankly, work multiple part-time jobs still can't cut it." the labor department says there were 3.9 million job openings in october. but 11.3 million

people seeking work. the long- term unemployment rate is 2.6%. ---twice as high as when benefits ended for long-term jobless americans in the three previous recessions. some senate republicans have indicated that they might support an extension, but tennessee's bob corker wants to know what cuts would happen elsewhere to offset the cost. think tanks on both ends of the political spectrum suggest other remedies as well. the american enterprise institute has proposed congress come up with job-relocation assistance for job seekers. while the center on economic policy research wants to create incentives for employers to promote worksharing programs. this is back to work day for millions of minimum wage workers and in 13 states, they'll have gotten a raise. in most of these states the increase is 15 cents an hour or less. there are some dramatic increases though.the citizens

of new jersey voted to raise the minimum by 1-dollar to 8.25. it'll be 8 dollars in rhode island and new york and 8-70 in connecticut.21 states now have a minimum hourly wage higher than the federal level of 7 dollars 25-cents.washington state has the highest minimum wage of 9.19 an hour.this could be the year raising the federal wage becomes a national issue. from the white house to congressional races, democrats have been buoyed by polls showing public support. something to note if you're in the midst of a holiday road trip--which states are stepping on the gas - tax? wisconsin has the lowest tax in the nation - just a quarter a gallon. wyoming, california, kansas and new york are just a few cents higher.at the high end of the tax scale. oklahoma and hawaii charge you just over two dollars a gallon.florida puts the highest tax on its gas - three dollars 50-cents a gallon. and that's a full dollar more than the next highest taxing state which is, alaska. airline delays are on a steady decline for more than a decade. u-s airline delays fell 33

percent from 2000 to 2012, the report says. flight cancellations dropped 56 percent at the nation's largest airports. the inspector general says the flight facts are inaccurate and look only at data from the largest airlines. and some airlines have increased travel time between gates. but they say it reflects the realities of the air travel system - including ground congestion and weather. it's still not clear which of 22 states will be chosen by boeing to build its triple-7-x jet. south carolina is out. tomorrow machinists union workers in alabama vote on whether they would be willing to work under boeing's conditions to locate a 10-billion dollar plant there. the commercial jet manufacturer started the search for a home for the new factory after reaching an impasse with its union at its main production plant in washington state. those workers vote again tomorrow on boeing's offer.the company has said it will keep operations in puget sound if its union votes yes. spacex -- a private manufacturer of rockets and spacecraft based in california -- is launching its first rocket

of the new year tomorrow. called falcon 9, the rocket will be carrying a satellite on behalf of the largest telecommunications company in thailand. the new satellite, named thaicom 6, will provide satellite t-v service for parts of asia and southern africa. spacex was founded in 20-02 by elon musk of tesla fame. the company has another 50 launches scheduled. the city of detroit is back in court tomorrow along with its creditors to discuss ways to end costly interest rate swaps. bank of america and u-b-s had agreed to let detroit out of the swaps for $165 million. the city maintains getting out of the swaps deal is essential in order to secure new bankruptcy financing. the baltic nation of latvia has officially entered the zone - the euro zone. the northern european nation is the 18th to join. great fanfare with fireworks are planned. this means latvians will be able to buy things with the european currency - the euro -- on january 15th the euro will become the country's only currency - replacing the lats.

the last nation to join the euro zone was its baltic neighbor, estonia. that was 2 years ago. ford motors is jumping the gun on offical sales numbers -- due out tomorrow -- by saying it will retain the moniker of best selling brand for the fourth consecutive year. the company is touting 20-13 sales of 2.4 million vehicles, a jump of 15% year-over-year. ford expects to sell 400-thousand more vehicles in the u-s than closest competitor, toyota. when the numbers come out later today it is expected they will show manufacturers posted a seventh month of gains. positive manufactuing numbers further fuel growth, hiring and consumer confidence say economists. specifically, economists polled by dow jones newswires expect to see expansion at 56.7% -- anything above 50% signals expected growth. the u-s federal aviation administration has named six u- s states for testing of drone use. researchers can use the sites to develop and test drones

to fly safely in the same skies as commercial airliners. the sites will be located at various locations within the states of: alaska, nevada, new york, north dakota, texas, and virginia. at least one will be in operation within the next six months. will 20-14 be the year blackberry turns things around? this week the new interim ceo, john chen, laid out his plans for the struggling smart-phone maker. cnbc posted a letter from chen in which he proclaims the rocky past for blackberry is not indicative of its future progress and success. chen says blackberry will focus on service and software going forward and will move to a new operating system. still to come:in chart talk we're talkin' with a trader who explains why the stock market is not a bubble. also, what financial advisers think, about ethical behavior in their industry. and the year that was, for the

american small business owner. that's next on first business. i'm going to pass chemistry, and i'll take it from there. i'm going to do what makes me happy. i'm going to work hard. be independent. live large. make the most of every opportunity. i knew i wanted to go to college. but figuring out how to pay for it? i didn't have a clue. the u.s. department of education has over $100 billion. and that's a lot of money. to help students pay for college. and the free application? you mean the fafsa. i did it online. it was easy. i'm never giving up on my goals. i will make a difference. i'm going to find out how to pay for college.

i'm going to college.gov.

for the american small business owner, well, it's been a rough few years. but 2013 was a turning point and, according to the small business scorecard, better things still, are to come. that metric is published each month by surepayroll. michael alter is president and ceo of that payroll company. if you look at the numbers looks like a lot of red, so i interpreted that as a big negative. but there is one key number that was a positive and you think that was a pretty significant number. >>it absolutely is and it has been in the past---and that is the optimismhow confident small businesses are in the future. we've seen that number at 70% as we finish the year. we came into the year and started at 55%. moving from 55 to 70% is a

significant change and i'm hoping that will lead to hiring and more growth in 2014. >>your december numbers are fresh out. what do they show in terms of hiring and salaries? >>they continue to lag behind optimism and we saw that the average number of folks on the payroll fell.1 percent and the average paycheck fell .2 percent. we continue to see that decline we saw most of 2013, but again, this big change in optimism is something that i think will bode well for the future. >>i remember as you've been here each month, optimism seems to have been creeping up somewhat steadily. are we at a threshold mark now of 70 that reall means something significant? >>if history's any indication, that would be the case. in the past when we've gotten higher in optimism we've seen hiring follow subsequent to that. >>what about contractors? you pointed out that that number which was ever rising was an indicator of some of the things that were wrong with the economy. >>right and certainly a lot of the uncertainty about the future that small business owners have. we've seen the contractor index go up and up for the last 2 to 3 years at least. in the fourth quarter for

the first time we saw that decline. that to me is a good sign because it means that small business owners have more confidence in the future. so they are willing to hire full time workers instead of contractors. >>there's also that fact that there is more productivity by each worker that is working right now and that was a reason they didn't have to hire on. so i wonder if that's going to soften somewhat. >>well, i think that there is a real question as to whether or not growth has reached a point where it's going to grow at a greater rate in terms of revenues coming into the business and the productivity growths that we've seen in small businesses. in the past, and 2013 is a great example of that, we've seen growth such that you don't need to hire because productivity has grown at a greater rate than revenues. >>so, looking forward to a good 2014 for small businesses in this country? >>i'm optimistic. >>so are they. michael alter, thanks so much. >>thanks for having me. coming up...chart talk and why the nasdaq may be the index to watch this year. and after being wracked by bad deeds and bad pr, we take stock of ethics in high finance - next.

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does this sound troubling? more than half of all financial services executives say they don't want to adhere to ethical standards because they feel it would inhibit their career advancement. this, even as the financial services industry is trying to clean up their record in ethical conduct.the information turned up in a new report by the economist intelligence unit which is part of the respected economist magazine.sara mosavi is research editor.first, give us more of the key findings of your study. > >absolutely. what the report was trying to do really was to try and assess the financial services industries record on ethical conduct and try to understand the importance and the role that knowledge of both the firm and the industry plays in the financial services industry. we had a number of interesting key findings. most interestingly, all financial services in our report have said that they're taking steps to improve their record on ethical conduct by taking steps such as

raising awareness of the importance of ethical conduct or strengthening the system of evaluation of employees conduct within the firm. financial services executives certainly champion the importance of ethical conduct so they understand that it's something very important. it's something they aspire to. and they see it as something that can actually help risk proof the industry from the kind of crises that we've seen recently. > >it's interesting because it shows some measure of tension. they want to work for companies that have good ethical standards but at the same time, applying them to themselves is a bit different. this is the attitude at the top among the executive ranks, what does it say about the culture in these companies---banks and investment houses? > >i think that's actually one of the things that we really look at at some depth in the report and that's the idea that in the years leading up to the crisis thanks to a lot of mergers and acqusitions, there was a sense that big banks lost a universal cohesive culture. as part of that we need to look at ethics. the survey was of senior executives and financial services but there's certainly a sense that they are taking steps to improve the situation and i think it will just be a matter of time until we can see the results filtered dow n to the lower ranks. > >how should we in the retail marketplace look at this study? > >i think it gives us a glimmer of hope because it shows

that it's on their agenda. ethical conduct is on the agenda for financial services firms. it's something they're looking at very seriously and that the top echelons of the industry are trying to improve their situation and it's just a matter of overcoming the basic tensions that the industry faces such as quarterly reporting requirements and short term profit requirements and pressures. so, they're taking steps to improve their situation and that's a really encouraging sign for us. > >sara mosavi, thank you so much. very interesting. > >thank you. why our trader in chart talk is so darn optimistic. find out, after this. affleck,

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everybody's excited on the trading floor. it's the 1st

full day of trading. bob iaccino is with the topstep trader company. are you excited to be out there trading again? >>i am. this is always my favorite time of year. you get geared up over the holidays for january. january's finally here so i'm excited to get back at it. >>a lot of people looking at the numbers out there and i'm thinking if it were 20 years ago people would say this is a bubble eceonomy. let's brace ourselves for a big fall. how do you see it? >>you're not really hearing the word bubble a lot and i find that to be a little bit funny because the bubble that we all refer to is '95-2000the tech bubble that everyone refers to during the clinton presidency. in that tech bubble basically the s&p tripled in 5 years. if you look at the lows of 2009 until now, we basically again have tripled in essentially 4 and ½ years but nobody seemed to be worried about that and i think there's a good reason for that. the 1500 level in the s&p that we reached in 2000 was reached too quickly by most accounts given the volatility that we've had over the past 10-12 years. having said that, that's our level. we own that

level. the market owes us that level and we got there a few months back. so now that we've gotten there i look at the market as having gone from 1500 to 1850 as opposed to having gone from 600 to 1850. that would be considered a bubble. we were here before. and if you take a chart and you scrunch it all together, essentially we've gone from about 500 in the s&p to about 1840 in about 18 years and that to me doesn't seem to be stretched any longer. >>you mentioned the s&p and i think everybody knows bob iaccino is an index guy. how are you seeing some of the other indexes? >>i think the nasdaq is really going to outperform in 2014. i think it should. it's the only one that hasn't reached its highs of the tech bubble. we're seeing some momentum moves in stocks like twitter. obviously not the last few days of the year it didn't perform as well. facebook, some of the things with tesla which i consider to be a technology companyi believe those are the things that are going to lead us in 2014. the manufacturing sector in the u.s. is coming back pretty strong and that is driven by tech. so once it bleeds down

into the tech sector and the nasdaq can pick up some of the gains and reach it's highs like the s&p did, like the dow did, like the russell didi think that's where you're going to get the most bang for your buck in 2014. it's not a situation where we're gonna see 25-30% again in 2014. i don't think that's going to happen. i do think they'll probably be a correction but i think overall this year good to be back because i think it's going to be a good year for stocks. >>i see the smile on your face. bob iaccino with topstep trader, thanks so much. >>good to talk to you guys. traders hash out their wish list for the new year in traders unplugged.that's first business for the day after new years. i'm bill moller, angie's back tomorrow morning.

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