tv First Business KICU January 31, 2014 4:00am-4:31am PST
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why you might not have to worry about -- the dramatic moves in the stock market in today's cover story... inside the nfl concussion controversy. could it hurt the future of america's favorite sport. and... tech wrap. traders breakdown of the latest stocks to watch. plus... a way to make money on winter. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning! it's friday, jaunary 31st. i'm angela miles. in today's first look: the bulls sieze the day... bullish investors lifted the dow more than 100 points thursday, the nasdaq 72 and s&p 20. gold fell $19 and oil added 68 cents. all on the heels of a gdp number showing growth of 3.2%. traders are paying attention to tech. last night amazon reported
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a return to profitability but missed on sales targets. google had an earnings miss even though profits were up. and zynga is cutting staff and buying mobile video game company natrual motion. shares rallied 21% after the close. janet yellen will be sworn in monday morning as the new chair of the federal reserve. and, marketwatch reports-- starbucks is considering an app that lets customers order ahead for their coffee. traders may need an extra shot of espresso to keep up with the market today. joining us now is daniel stecich of athena advisor services. good morning. is it buyer beware with the stock market? >>i don't think it's buyer beware, i think it's buyer you might have some good opportunityhere because in the past couple of weeks we have had some stocks get punished. could be solid stockskeep an eye on
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them. i think it's on unusual worriesemerging market worries and china worries. those don't bother me right now. i want to pay attention to our economic data and right now that is good. >>the dow had its worst january since 2009. what does that tell us about the rest of the year? >>it doesn't tell us anything. what happened to sell in may and go away? it didn't happen. if you sold in may you would be sorry right now if you weren't there. we've lost a little ground, no doubt about it. we've gained a big big chunk over the course of a year so we're seeing some profit taking here on some fears that are probably overblown. >>i love the way you think. will there be fear coming to the market on this friday trade? >>yesterday's trade was pretty decent most of the day then you had amazon and google come out. amazon missed bad they hit it right away. google rallied right away and then came off. i think that might put a little damper on today's trade but overall i'm looking forward to next week's number. we have ism figures coming outboth manufacturing and non- manufacturing. and then the
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number of all numbers, the unemployment data on friday. >>we will be watching. thank you daniel. >>happy to be here. thank you. the faces behind facebook might well be a collective smiley face. shares swelled to a new high above $61 dollar thursday on stronger than expected earnings. the world's biggest social network impressively showed a 39% increase in mobile users and ad revenue at 53%. but analysts remain mixed on whether ads work on facebook. "facebook still has a problem to solve and its that its ads arent generating sales for their advertisers, particularly in mobile." "you have to watch facebook. not only because of anyone looking to invest in the internet needs to consider facebook. if for nothing else, it makes everythng else, such as google look less atrractive, by comparison." monday-- facebook rolls out a new mobile app---called "paper," it's a news feed with content suited to individual tastes. it's not your grandparents paper. this one is completely digital.
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amazon is on a path to take traditional stores mobile. the wall street journal reports-- the online retailer could be developing a credit card payment system based around its poplar kindle devices. the devices would be used in brick and mortar stores for virtual payments. ups took a profit hit after failing to keep up with package deliveries. the company admits it was unprepared for the last minute holiday rush of online shopping such as people buying items through amazon.com. ups scrambled to add workers and trucks to keep up with the demand. the company is investing 100 million dollars to improve service. profits are sliding at big oil companies. exxon mobile-- the largest producer in the u.s. posted a profit of $8.35 billion last quarter. that was a 27% drop from last year. the oil giant cites lower oil prices, declining production and start up expenses for oil drilling projects. dutch shell-- the largest energy producer in europe had an earnings drop of 48% to $2.9 billion. shell's earnings could take another knock-- due to a recent decision to move out of alaska. the company confirms it has hit
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legal hurdles while trying to drill in arctic waters. it will suspend it's venture for alaska in 20-14, and review it's options. last week a court ruled the government illegally opened up the region for drilling. blackstone group had a blockbuster quarter as it churns out initial public offerings and real estate deals. ipos included seaworld and hilton hotels - the largest ipo ever for a hotel company. the hedge fund's revenue climbed 119% to $2.69 billion, up from $1.23 billion last year. the government wants more money from bank of america. the justice department says it will raise a penalty fine, to 2 billion dollars, up from 863 million. b of a was found guilty after its countrywide unit sold faulty mortgages during the housing crisis. the government wants the fine to be based on countrywide's gross revenue from the mortgage fraud... not just gross losses from the loans. bank of america has no comment. banks are easing up lending standards. the office of the comptroller says it's happening
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as banks compete to keep up with loan demand. it shows banks are willing to take on more risk. "banks are only willing to take on more risk on loans where the ease of repossesing the collatoral is really good, or the performance of loans is really good." that was greg mcbride of bankrate.com. the occ report adds that most banks still have good to satisfactory lending practices. the clock is ticking... as america is set to default on it's debt february 7th. yesterday house speaker john boehner told reporters that republican lawmakers do not want to default, and that the gop is currently brainstorming "alternative ideas" on the debt ceiling, immigration and healthcare. the senate is moving closer to taking action on long-term unemployment benefits...senate leader harry reid says there are nearly enough votes to advance it to the floor next week. reid says funding the $6.5 billion cost could come from a change in pension accounting. republicans were only willing to approve a 3 month extension if there was a way to pay for it. the benefits ended last month. ford is picking up the pace of
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production. it's spending 80 million dollars to ramp up manufacturing of pickup trucks and suvs at a kentucky plant. ford will add 350 jobs at the facility. in a radio interview, an executive says the decision was to meet increasing demand for trucks. in a highly unsual move-- toyota is temporarily stopping sales of its most popular cars and trucks. it's due to seat heaters made with materials that don't meet u.s. flame- restardant standards. it includes: the new avalon, avalon hybrid, camry, camry hybrid, corolla sienna, tacoma and tundra. the vehicles will be retrofitted with a modification. the news comes as toyota regains the top spot in world wide sales.vw narrowly edged out gm for second place. the situation at target is getting worse. cnbc reports target could face between 400 million and one billion dollars in fines for last month's massive hack attack, that's much higher than initial estimates. yesterday-- target confirmed that the attack began after hackers stole credentials from one of its vendors, then
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used the information to hack into it's system. a spokeswoman says target is using extra precautions on it's online system. in today's cover story...new jersey and new york's economies could score from sunday's super bowl match up between the seattle seahawks and denver broncos. this morning, analysis on the effect the courtroom action over player concussions could have on the "nfl's" bottom line. paul eggers checks the stats. the players suit against the n- f-l is just one part of the courtroom concussion drama. insurance companies and the league could battle over settlement payments. plus players are also filing suit against helmet manufacturers,as intriguing football matchups go, sunday's super bowl has nothing on one looming down the turnpike in federal court in philadelphia - with judge anita b. brody the ultimate referee. brody, considering the n.f.l.'s recent settlement with 4,500
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retirees over work-related brain injuries, has asked both sides to demonstrate that their $765 million bargain will fulfill its promise to compensate every currently retired player who has or will develop a neurological condition such as dementia or parkinson's disease. lawyers for the plaintiffs and the n.f.l. said independent actuaries and medical experts had endorsed the terms of the settlement. but the lawyers refuse to share any of their data with the public to help substantiate how they arrived at the $765 million figure, and there is growing displeasure among plaintiffs who have not been allowed to see the data, either.
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big money, big stakes at the big game. super bowl sunday - the biggest night in football and the biggest night in advertising when companies drop a cool 4-million dollars just to get their super bowl spots in the big show. which ones will we still be talking about the day after the game? tim calkins is a clinical professor of marketing at the kellogg school
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at northwestern university. general trends this yearwhat's new? >>this year we're seeing an incredible amount of hype before the game. people are putting out teaser spots, social media campaigns >>one company that's not doing thatprobably deliberatelyis chrysler. there are always a lot of car ads. >>nothing from chrysler this year and that's very consistent though with what they've done the past couple of superbowl's where they are very quiet until the game. then they run something very impactful. so it will be interesting to see what they do this year. >>hyundai has come out early with what there ad's gonna be. so has audi. >>right. they are taking a very different strategy than chrysler, getting out there and trying to get people looking at the ad before the super bowl actually airs. it's a pretty good strategy for them. >>how about the yogurt wars? i'm surprised to see so many yogurt ads. >>it's an astonishing
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development this year. we're going to have 2 yogurt brands going head to head. we've got oikos from dannon going up against chobani. this is unheard of. we've never had 2 yogurts going head to head. this is very different. >>is their strategy to take the lighthearted approach? >>they're both taking a lighthearted approach. chobani is going to talk all natural and oikos is going to talk more about taste. it will be interesting to see which one comes out better. >>budweiser is kind of a perennial. i think people almost expect to see a budweiser ad. once again they're going for the warm and fuzzy approach. >>we're gonna see more of the clydesdales this year from budweiser. and just like last year it's gonna be warm and emotional and they're gonna try and get you feeling great about budweiser. so you can look for that. >>does that sell beer? >>well that's the challenge though it does keep the brand relevant and everybody expects to see them there. so they have to be on their game. >>i want to talk about sodastream. this is a company that has advertised in the superbowl in the past and has
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somewhat manufactured some controversy here. >>they have done a great job this year getting people talking about the brand. they came out early and said they had scarlett johannson as a spokeperson. then they announced that their ad was unfortunately rejected by the network >>because she mentioned pepsi and coke in the ad. >>exactly. they took a shot at coke and pepsi and the network said you can't run that. sodastream said that's such a surprise . they're just generating hype and attention and getting themselves a lot of pr. >>i feel so used. >>well that's how the game works. >>professor calkins, thanks so much. >>thank you. you don't have to be a madison avenue ad firm to get in on the big game. doritos held a world- wide contest for budding film- makers and will choose two of their ads to be shown. finalists include a 27-year-old ad director from sydney australia who came up with a way to clean cheezy crumbs from your fingers. "i guess our commercials are different. so to come here and
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do this in front of an international audience is an opportunity we don't have in australia." the doritos ad that wins the biggest fan following will win a million-dollar prize for it's creator, along with an opportunity to work with marvel studios latest "avengers" movie project. thanks chuck! coming up in traders unplugged...can you profit from a winter "chill" ?
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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.
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it's getting hot on the floor of cme group with alan knuckman and scott shellady ready for a heated exchange in today'ts traders unplugged. let's start with topic number oneemerge urge: the emerging markets have been big news this week. so what do you think about some of the etf's? alan: i think eem is a buy here at these levels. we're at about 38 right now and 36 is at 2 ½ year supporttraded between 36 and 44. we were just at 44 in december. if it gets back to
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those levels to go to 52. so we got a lot of upside potential with a level to lean on as far as risk. the world is not coming to an end today. scott: it's traders unplugged, not unhinged alan. what we've got today with the situation we've had over the last 15 yearsthis is a buy but not today. we have to wait six months until these things are put to bed and then suddenly they all recover. give it six months and then you can buy it. angie: topic number 2cold cash. how do you profit from the polar vortex and natural gas is not an option. scott: i'm gonna say the way you profit from it is let is pass. i don't think that there is any way that you can trade a weather event because it should have been telegraphed into the market and once it is already herei say you stay away. there isn't gonna be a big way to profit from it unless you wanna go shorts some things like wheat or things that have been bid up because of the weather.
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alan: going short natural gas is nothing but disaster. scott: you can't talk about natural gas. alan: that's not the trade. i wanted to say that you were wrong because when we were on this show about a month ago and i said it's gonna get cold in here and you said no natural gas is not tradeablei guess it was. scott: the problem is that there are some people out there that are still surprised by weather events that they're giving 30 days notice ofwhich to me is a little perplexing. however it just gives everybody an opportunity to get short those that bought it and watch it go back where it went. alan: someone mentioned burlington coat factory and i'm not gonna say one of those financial channels. so look into that. angie: topic number 3--add? fb - facebook was all the rage in the market yesterday. is this stock a buy or a sell? scott: i guess alan's gonna say it's a buy but i'm gonna say
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it's a massive sell. because when you look at the market capif you sold all the facebook shares you could buy boeing and dow chemical. what does facebook make except me sick? alan: they are a mobile business now. scott: they are not disruptive technology. they are gonna be easily replaced. give it 3 years. when your daughter is old enough to be on the computer, she'll be on something completely different. alan: the target is 66 from the technical pattern. we're almost there so it's very dangerous at these levels. look to see if it fills in this gap and then maybe look at an opportunity there. it could go a lot higher here. i said the same thing about tesla was too expensive. emotion gets into these stocks and it doesn't make sense. angie: we are sticking with the facebook theme for our bonus round question. we're gonna look at some stocks trading under friendly tickers. which are actual ticker symbols? pal, bud, or chum? alan: bud. or it's all of the above. scott: i don't have any chums so it can't be that. so i will go with bud as well. angie: it's bud and pal. alan: oh, she's trying to trick us now. angie: when have i ever stopped trying to trick you? alan: 2 out of 3? you can't do that. angie: thanks for being on the show. first business continues right after this.
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came a little short of expectations. i think they expected amazon to have a blowout quarter. we see the stock head lower initially. going into this i expected the stock to head higher. it's rallied 6 out of the past 8 quarters with an average move of around 8%. i really thought that was the direction the stock was going to go. i'm long through the weekly expiration. i really need this thing to come back for that trade to be profitable. but i really think that amazon going forward at these levels might be trading at a good discount. >>expectations were high for google. what do you think about this trade? >>google has a more mixed performance history. it's rallied 4 times and sold off 4 times in the past 8 quarters and it moves on average around 5%. they're implying a move right in line with that but i think a lot of people are thinking that google move here was being a little bit overpriced. a lot of traders that i know were trying to fade this move in. it looks like that was the way to go. the stock hasn't changed too much. they missed on top and bottom lines. i think going forward the stock is probably going to stay around this range. it had a huge bid up
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but i really don't think there's gonna be too much movement here. >>mastercard reports this morning. do you have a play there? >>i'm currently long mastercard through some out of the money call spreads. this is another one that has a mixed performance history. it rallied 4 times and sold off 4 times. on average it only moves around 2% on earnings. i found some cheap call spreads. i thought they were good value out of the money call spreads for earnings expiring on this weekly expiration. we're waiting for the report to come out. i think the stock heads higher which is why i got long via those call spreads. >>thank you james. that closes out our show for this week. find out monday why oj prices may rise as disease threatens florida's orange crop. plus-- how traders are preparing for the january jobs number. from all of us at first business, enjoy your weekend!
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