traders welcome a new month as the dow soars to a record high. in today's cover story...why china is catching up with the u.s. economy? plus... fed predictions ... traders take a guess at a "million dollar question." and...hits and misses... how film studio earnings are playing out on wall street... first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning! i'm angela miles. it's thursday, may 1st. in today's first look: investors "showered" money into blue chips in april. just as the month was rolling into may, the dow closed at a record high for the first time this year buying was triggered by postive comments about the economy from the fed...and it spread to the

rest of the stock market. with the nasdaq adding on 11 points the s&p 6 gold dropped by $5 dollars. and oil is trading back bellow $100 per barrel. in earnings after hours... it was a big night for weight watchers. the stock pumped up 13% as the company reported a slim down in earnings, but the outlook was better than expected. and la clipper chippers. media mogul oprah winfery and oracle ceo larry ellison are on the list of potential buyers in the los angeles clippers in the wake of the teams ownern donald sterling being banned from the nba for life following racist remarks. here we go with trader bob iaccino, chief market strategist, at tethys partners . good morning. let's talk about market reaction. >>let's. >>the stock market is reacting already to the fed and gdp. now today we have the ism number

coming into the market. what do you anticipate? >>i think we'll be looking very closely at the jobs number. yesterday at the close of the fed meeting, you saw very little reaction and very little change in the statement. we closed at a record high and i know people like to get excited about that. i get excited about it too. but you have to realize that the month yesterday basically closed slightly up on the dow and slightly up on the s&pboth less than 1%. the nasdaq was slightly lower. the record doesn't really mean that much in people's portfolios and i think it has to be looked at in that vein. the ism number while important, when it's inline with the non farm numbers the way it is, it's really going to be shrugged off. >>as far as that jobs number, are traders likely to sell on a good number or on a bad number? >>that's an interesting point because lately the really good numbers have sort of been a sell signal because there's anticipation that then the fed might somehow speed up the tapering of it's bond purchases. i think in yesterday's statement we saw the

status quo. we saw a much slower batch of numbers prior to this fed meeting so i wouldn't necessarily think that 1 or 2 jobs numbers is going to have that happen. if that happens in the s&p, that might actually be the opportunity to get in and ride that rollercoaster up through new record highsnot the ones we got yesterday but brand new ones. >>bob thanks for coming on the show. >>thank you. chuck coppola joins me know with more on what the fed says... good morning angie...traders are reading between the lines as they anticipate the next move by the central bank. yesterday, the federal reserve wrapped up a two-day meeting. it'll continue with its taper timeline, reducing bond buying purchases by 10-billion dollars starting this month. it noted economic activity has ticked up after a sharp downturn this winter. the big question that remains... when will the fed raise interest rates? traders say... it depends. "i look at this being a day by day scenerio, with jobs obviously leading the way, inflation expectations leading the way, financial market volatility leading the way. as

long as those three things fall into order the way the fed wants them to, the fed may be able to raise rates as soon as mid 20-15, but i can't sit in this chair today and tell you that's what i'm seeing right now. that was todd colvin of rjo'brien who expects the taper timeline to continue at 10 billion dollars per month, but says that could change given any bumps in road ahead for jobs, gdp or manufacturing. the economy failed to pick up steam in the first quarter, and instead sputtered through the winter months. the advanced look at first quarter gdp -- shows meager growth a .1%, economist predicted 1%. juli niemann, executive vice president of research and portfolio management of smith moore & company is on the line with us this morning. good morning juli-- is the weather to blame or is something more happening? >>angie there are no easy answers in this business but this time there was an easy answer. it really was all about the weather. no one buys houses, cars, easter bonnets or anything when the polar vortex is in place. there is some underlying weakness in the economy but at least it's moving ahead in the same direction and the right direction. we're looking at the 2nd quarter and seeing a

rebound. largely it's going to be in homebuilding and personal consumption. businesses will continue to invest. so look ahead because the news is getting better. we're moving from a snails pace to a turtles pace. >>thank you julie. >>you bet. fannie mae and freddie mac are not sturdy enough to withstand another severe downturn in the economy. recent stress tests by federal regulators reveal- fannie and freddie would need another $190 billion dollar bailout from the government if the economy collapses. the rebound in home prices is boosting fortunes at fannie and freddie, which have returned 203-billion dollars to the treasury. and both are expected to remain profitable. under the terms of the bailout, fannie and freddie are not allowed to retain earnings, which accounts for the current weakness. treasuries were a terrific place to park money during the month of april as prices rose and yields fell. chris gersch of altimus capital has this outlook for what to expect in the month of may.

i think that it will continue into may the situation right now wtih the 10 year yield. gersch tells us his client are mostly going into cash and are hoping to later buy stocks that pay a dividend. the obama administration warns the treasury department will be cracking down on corporations that are counting on mergers to avoid paying u-s taxes. bloomberg news reports-- the warning follows pfizer's $98 billion dollar bid to takeover astrazeneca. under the deal, pfizer would move to the u.k. and lower its tax rate. pfizer, is among at least 19 other companies considering similar transactions such as chiquita brands international and omnicom group. it's back to the drawing board for senate democrats. a proposal to raise the minimum wage failed in a test vote

yesterday. the vote died in a republican - led filibuster. democrats were 6 votes shy of the 60 the bill needed to pass. both sides of the aisle remain divided on the wage debate. the assertion that boosting the minimum wage would hurt businesses, again, is wrong and it is illogical. senate democrats are pushing legislation that would cost as many as a million jobs in this country, legislation that the left flank of their party demands. president obama accused republicans of saying no to helping millions climb out of poverty. he also praised lawmakers in hawaii, who yesterday approved a wage hike to 10-10 an hour. prosecutors may soon prove big banks are not "untouchable". the new york times reports prosecutors are preparing criminal charges against french bank b-n-p paribas and credit suisse. credit suisse is

accused of helping americans avoid paying taxes.while b-n-p has reportedly done business with countries facing sanctions from the u.s. the bank faces up to 2 billion dollars in fines, according to reports.neither bank has commented on the accusations. since the financial crisis, big banks have been considered too big too jail given the fear of a negative ripple effect on the economy. duke energy will soon no longer be the biggest power distributor in the u.s. exelon corp has a deal on the table to buy pepco holdings for $6.8 billion, making it the top power distribution company in the nation. exelon predicts it will increase sales of electricty by 5% with the deal. anti trust is not likely to be issue. exelon already serves customers in maryland, illionis and pennsylvania. it will add on dc, delaware, new jersey and more homes in maryland. energizer is splitting into two companies. the company, known for it's iconic bunny, will separate into two publicly- traded companies. its household products company will split from its personal care company that includes banana boat sunscreen and schick razors. shares of energizer hopped 14% higher on the news. the split won't be official until next year.

turning to earnings..phillips 66 shares traded near an all time high during yesterday's session after reporting earning that topped wall street predictions. hyatt hotels gained 4% after noting a 10% rise in revenue. the chain attributes an increase in room rates and occupancy to growth in business travel in north america. walmart is getting into the insurance business. the retailer is teaming with insurance companies, which will sell policies through walmart's website. so far the service is in eight states, but will spread nationwide in a couple of months. it's the latest step by walmart to expand services. it added a wire transfer service, last month. the social security administraiton is going old school, by mailing out statements once again...the agency was attempting to gear american's to its' website -- after being hit by budget cuts in 2011. but now plans are underway to resume mailing

statements starting in september to americans. the statements will include future estimates of social security earnings. mcdonald's is raising the bar on social responsibility. executives at the golden arches say the chain will become more socially responsible, by 20-20. it says it's making changes in five broadly-listed areas ... food, sourcing, planet, people and community. some of the goals include increasing recycling, adding more fruits veggies and whole grains to its menu, and reducing sodium, sugar and saturated fat. still to come: our movie critic is not so hot on the blockbuster that's kicking off a "summer of sequels" plus.... is china really that close to out pacing the u.s. economy... and... a rocky situation in rio de janeiro... could it threaten the olympic games? stay with us!

the 2016 olympics in rio are in jeopardy. despite this promo highlighting renovations. a top officials with the international olmpic committee warns preparations for the games in rio de janeiro-- are the "worst i have experienced" among the issues: only 35% of the sewage in the state is treated, labor strikes and social unrest continue to plague the progress and violence is escalating between police and residents. there are no plans to change the location. in today's cover story---the purchasing power of china's population is rising so much and so fast, according to the world bank, that it is reaching relatively comparable levels to what americans can afford with their paychecks. by measuring what people pay for goods in their own country

against how much they earn, the world bank found china's population able to afford about 87% of goods and services that americans buy with u-s dollars. and china's on track to surpass it. "a lawyer might make $12,000 a year but that's ok because he doesn't need that much money." the scale known as "purchasing power parity" skews in favor of largely poor countrys that have seen see a dramatic rise in wages and the in the value of its currency. china has all three. ted fishman, wrote a book on it, called "china, inc." "one really important thing to remember is that the chinese currency is 40% more valuable than it was 15-years ago." that boosts purchasing power. while china's population--four times that of the u-s, increases this measure of china's economic health, it also hurts it by another measure--productivity. china's gdp, per capita is 99th in the world. the u-s 12th. "one farmer in america, with a

combine and hybrid seed is as productive as 20-thousand chinese farmers." economic analysts see this--- and call it "opportunity." "the good news is we have a growing market for the things we make and its currency is getting stronger." "in the larger cities, they add a thousand cars a day. they need fuel." "it's to our advantage to have a strong middle-class with buying power everywhere in the world." it's worth pointing out that chinese consumers have about one-tenth as much money to spend as americans have in their wallets. by that measure, china's consumers are on par with the philippines, bolivia

and iraq. also, the world bank's study does not assess china's global economic strength. in a straight across comparison, u-s g-d-p of 17- trillion dollars is about twice that of china's. thanks for the report chuck-- the economy in greece still has a long way to go, but the nation's budget is looking stronger than expected. greece is even predicted to show a surplus this year on the heels of spending and wage cuts. umeployment however, is still a problem and is projected to remain in the 20% range. unemployment now in greece is 28%. coming up...will investors by shy to 'link-in" as twitter shares lose friends. plus00 ...sequel city! an early peek at the summer box office is on tap in movies and money.

n fleck, and many actors have played the part of u.s. servicemen in the movies, but for veterans like james crosby their service and their sacrifice are real. and too often when they come home, their struggle continues. for over sixty years, paralyzed veterans of america has been fighting to help our injured veterans get the benefits they need, and have earned. paralyzed veterans of america was there for me when i came home. join me in supporting our paralyzed veterans. visit p-v-a dot org. the curtain has been lifted on

earnings from major film studios this week...here to screen a couple for us is our film critic erik childress. good to have you on the show as always. >>thank you. >>let's start with time warner. warner brothers movie business specifically noted as helping with double digit growth. what do you think about that? >>they had a pretty good first quarter. the lego movie is still the number 1 hit in the u.s. of the year and 300: rise of an empire ended up doing very well for them. a winter's tale not so much and they're not starting the 2nd quarter very well with transcendencebut the leftover from the hobbit movie. so they're doing okay. >>dreamworks on the other hand had a 57 million dollar write down which is just a fancy way of saying we lost a lot of money---on mr. peabody. >>a big budget is basically the cause of that. it's the 2nd big loser for dreamworks in a row with both turbo from last summer and now mr. peabody. but i think there's some hope on the horizon this summer for them. >>you are already out with your summer predictions for the box office hits. here's a look. drumroll please >>we have a lot of sequels

coming out. we have a lot of comedies coming out this summer. tammy is melissa mccarthy's directorial debut. she has been really hot at the box office with heat and identity thief. i think this is going to be a surprise hit coming around the july 4th holiday. >>a lot to look forward to this weekendor not. the amazing spiderman debuting and you had a chance to screen this movie. what did you take away? >>i think it's terrible. >>you didn't like it. >>i think this is one of the worst kickoffs to the summer that we've had in some time. sonythey're going to do very well this weekend with this. it's going to come out of the

gate running. i'm curious to see how fans are going to react to this one. i think that in the long run this might be kind of a franchise killer in a way until they reboot it again. >>it's that bad? >>yes, it's that bad. i think fans are going to flock to the theaters to see this one. they're not going to be happy with it. there wasn't a lot of positive response from the original film a few years ago so i don't think they're going to be very happy with this. i think by the time the 3rd film comes out in a few years you're going to start to see the grosses drop off a little bit. even though there's a $255 million budget on this thing, i think sony is still going to come out a winner on this one but the future looks bleak i think. >>let's move on to what happened at the box office las weekend. the other woman doing quite well. did you see this film? >>i did see this film and it's about as bad as spiderman. >>i knew you weren't going to like it but some of my friends say it's really funny and it's empowering to women. >>i'm sure all of george clooney's exes went to go see the film as well. >>hey, heyhe's engaged. allegedly. captain america, heaven is for real, rio2, and brick mansionswhich i hear is one of the worst horror films ever. is that true? >>it's not a horror film. it's

actually one of paul walker's last films. it's a martial arts film. it's a remake of a much better foreign film called district b13. i recommend people go see that and forget the american remake. forget spiderman. there are some movies to look forward to this summer but spiderman is not one of them. >>erik thanks as always for coming on the show. >>thank you. still ahead-- after twitters troubles -- will linkedin be able to post enough user growth? find out what traders think next in chart talk.

i'ec and many actors have played the part of u.s. servicemen in the movies, but for veterans like james crosby

their service and their sacrifice are real. and too often when they come home, their struggle continues. for over sixty years, paralyzed veterans of america has been fighting to help our injured veterans get the benefits they need, and have earned. paralyzed veterans of america was there for me when i came home. join me in supporting our paralyzed veterans. visit p-v-a dot org. matt cavanaugh of cmz trading joins us for a look at linkedin ahead of earnings-- and matt...twitter had terrible user growth is that what investors will watch for in linkedin? >>i do think they're going to be looking at that. i think that's a big key. you saw twitter actually beat but their user growth was not what the market was hoping for and the

stock sold off really hard. i think that is a very important metric to these new social media companies and something that people are going to be watching. linkedin shares rallied into earnings, what does that tell you? >>is that a new kind of signal? >>i don't really know. i think you've seen strength overall in the market and it's definitely helped. but this is a stock that's down about $100 from it's peak 6 months ago and about 20% in the last month alone. so i think that people are really trying to figure out is it a buying opportunity or is this one that maybe a dip that you don't want to buy. i think that it's just people trying to find the right equilibrium. >> where do you think the price target should be on this stock?does it have more room to fall? >>this is one that i don't have a good gut feel on because people are so emotional about these stocks. some of the analysts have price targets all the way up to 240 or 250 but i think that at least in the short term this stock misses, it's got another chance to fall 10% to 140 or so. i think any way you look at it it's going to

move after these earnings come out. the big question is which way it's gonna go. >>exactly. how much will it move? what is the options market saying? >>it looks like the straddle is priced about $15-16 so they're looking for about a 10% movea pretty big move. i think on the downside i see support for the stock around 140 and resistance to the upside about 180. i think if they really blow it out there's a chance that this stock could really pop. on the downside i think eventually you'll find some buyers if they do miss. >> matt, thanks for your insights today. thank you. >>thank you. that's all the time we have for today.join us tomorrow for traders unplugged, and just in time for derby day-- the guys debate whether it's better to bet on a pony or buy shares of churchill downs. from all of us first business have a good thursday!

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