ack . this is nightly business report with tyler mathisen and susie gar ib. >> brought to you by street.com, our rating service provides objective, independent ratings daily on over 4300 stocks. learn more at the street.com/nbr. flying high, investors start the week in a different mood, with the momentum continue? we have big investment ideas for 2014. the economy, apple strikes a deal with the world's largest carrier, china mobile, opening up a massive new market for iphone. what it could mean for iphone shares, what you may own in your

mutual fund. and making a difference in 2013, from apple to del investor carl icahn making an investment that paid off. and stories of people having a powerful impact in the business world this year. we have all that and more on nightly business report. good evening everybody, and welcome. it is hard to say who is halving a better year, peyton manning, or the dow jones industrials. the quarterback set the record of the season, today, the dow set its 48th record closing high of the year with five trading sessions left, manning only has one to go, and the s&p 500, the dow transports and the russell 2,000 also closed at all-time highs, for its part, nasdaq finished at its highest level

since 2000. a lift in november of consumer confidence in december and a rosy outlook on the u.s. economy next year on the international monetary fund. today, the blue chip stocks jumped, the nasdaq up 44, a more than 1% spike and the s&p 500 added nine. our guests say there are risks for investors in the new year in 2014, but he is still bullish for the coming year. russ, nice to have you back on the program. i don't know about you, but someone says i have good news and bad news. i want to hear the bad news first. so let's start with the risk, what is the biggest risk and should investors get ready for a correction? >> well, i think there are a couple of risks for next year, first let me say stocks can and will go higher in 2014. but there are a couple of things to watch, the first of which are interest rates. the lastñi few months, the mark

has reacted very well to the tapering, the fact that we've we gun the tapering. that is like ly to continue. that is the first thing to watch. the second is the strength of the recovery, we expect that the u.s. will grow faster in 2014. but there is one soft spot which i would watch, which are earnings. pardon me, actually earnings for individual wages rather than companies, the job market is getting better, we're seeing improvement in the market, one thing that worries me for 2014, can consumers continue to spend if their pay packets are not growing that fast. >> very quickly, why are we not seeing wage growth in this country, russ, it has been a long, long time? >> it is a great question but difficult to answer, the first reason, the obvious one is we're coming out of this recession very slowly. job growth is accelerating but still not going bangbusters, so

that is suppressing wages for a lot of employed people. but have of the factors, whether they are technology or the global wage arbitrage, which are both keeping wages down a bit, these both pre-date the recession. so even as the economy gets better it is reasonable to assume that the wage growth may not accelerate as fast as it had for most of the post-world war ii period. >> russ, you said stick with stocks for now, what does it mean for investors? >> it means we still think that equity is better than cash or bonds. we're keeping the overweight recommendation, the caveat is this, if we see 2014 driven by a stronger economy and earnings, that is a good thing. where we get nervous is if we're having this conversation for now, the dow is up 15 or 20%,

the gains come from multiple expansion, the investors are willing to pay more for dollar earnings. if the gains are driven by earnings growth they are going to be sustained by earnings. and is it expected that the stocks catch up in the u.s.? >> to be honest, there are international markets that did quite well this year. japan is oar of them. if you own japanese equity and you hedge out the exposure, you're up about 50%, we believe that japan can go further in 2014. europe is looking a bit better, we believe that the investors, many in the united states who have done well with the trade should think about trimming back in the u.s. and increasing the allocation to international funds. >> all right, thank you so much, russ, chief investment strategist at black rock. and a top official at the federal reserve is calling for an increase in the bank's

increase lending rate but not right away. the federal reserve bank of richmond says the bank was right in deciding to taper back on its bond-buying stimulus. he also believes the records low fund rate should start to rise in little more than a year. >> in my submission, i put early 2015 to when i think the funds are ready to lift off. but that is something that could change a lot one way or the other. >> lacker also said he was surprised the market rallied last week after the fed made its taper announcement. another delay at the healthcare.gov marketplace, expecting a big rush of last-minute filers, the obama administration has extended today's deadline to sign up for a new health insurance plan for one more day's delay, they are to make sure they're covered by january one. and plans to delay a scheduled increase in fees on

government backed mortgage loans from fannie mae and freddie mac. the original idea behind the higher fees was to reduce the number of loans guaranteed by the taxpayer-owned mortgage giants. the nasdaq got a big boost today thanks to apple, stocks soaring to nearly 4% after they sealed a deal with one of the world's largest carriers, opening the door for millions more sales. josh lipton has more. >> reporter: apple ceo kim cook says he couldn't think of a better way to welcome in the chinese new year than getting an iphone into the hands of every china mobile customer who wants one, apple will offer the iphone on china's mobile network on january 17th as the company tries to boost its share in the world's biggest country, right now apple is losing out to

samsung in the third quarter, apple controlled 6% according to research analysis. but now it could all change thanks to the new partnership. china mobile offers new items for the company. they are more than double the population of the united states, no specific details yet about what the iphone will cost with a china mobile contract but if apple prices phones in the mid-range, say $300, then it could take customers from competitors, much of it depending if apple wishes to sacrifice market for market share. the ceo doesn't believe it would be apple's strategy. >> they're not involved in the race to the bottom that they want to sell premium product at good prices, maintain their margins. >> still, even without the price point, analysts are already busy estimating what the deal mean fs for apple sales, the team

expects it to translate into sales of 17 million iphones in the next 12 months which could add $10 billion to their revenue line, that would be a big boost for revenue. josh lipton, nightly business report, silicon valley. and still ahead, are shoppers turning their backs on target after the massive debit card security breach. good news for drivers after four weeks of steadily climbing higher, prices at the pump fell

two cents a gallon in the last two weeks, the average is $3.26 nationwide. and something to tweet about, jack dorsey, ceo of twitter, just joining the board of directors at disney. dorsey, who sent out the first tweet ever, has sent out another one, saying i only wish we didn't lose sight of one thing all started by the mouse. the disney board member of the past 15 years, and term limits he can no longer run for a seat. shares of target sold about 1% today. still reeling from the massive security breach to as many as 40 million debit and security customers and a decline in sales over the biggest shopping weekend of the year. >> reporter: the big question this holiday season is just how much target will suffer for its security breach of millions of shoppers, starting with the big

thanksgiving weekend. with reports that target's shoppers and debit card holders flooding the market, going for up to $100 a card, according to the security blog. the shoppers we caught up with are cautious and wear ary of us credit cards, and many are still spending. >> i use cash but i heard about what happened so i just kind of stay away from the credit card stuff. >> i'm good with it. it won't stop me from going there. >> reporter: there are no official sales numbers in yet, but the retail growth partners say target's transactions this past weekend were down 3 to 4% from the same weekend last year. and target's brand perception has dropped more dramatically than other companies that have struggled with data breaches. according to u-gov brand index

buzz score, they are trying to lure target customers back in. >> typically when we see events like this happen, the retailers need to go out and re-recruit their customer, re-recruit them whether it is with special deals or incentives, whether it is bringing them back in the store to regain trust. >> reporter: meanwhile, they're working to avoid security breach by setting spending limits for card holders. customers can now withdraw $250 in cash and spend up to a thousand dollars, we'll see if they're too scared to spend any of that money at target. another activist investor is putting pressure on garden to break up its restaurants, where we begin focus, just last week we told you that darten is planning to spin off or sell its red lobster chain amid pressure from barrington capital.

now, they are turning up the heat, saying a dramatic break is needed. shares went up to $54.35. and the suit saga continues, joseph a bank tried to take over the larger rival, men's warehouse, now, they feel the $1.5 billion bid is just too low. both of the apparel makers ended the day lower, bank at $56.29, while men's wearhouse is up. and a court ruled that tiffany terminated a watch ev t venture with swatch before its expiration, it sent shares of the jeweller down, they finished

at $90.50. and buying a data storage company for about $374 million, the move is an effort by c-gate to expand its storage business and improve its supply chain. the deal sent shares of c-gate up to $13.28, up $2.83. federal regulators are now allowing the marketers to resume the leukemia drug. they suspended sales of the drug after data showed more than 25% of patients suffered serious complications. shares rose up 9% to $7. a different diagnose is for another drug maker, shares went down for the treatment. the treatment is supposed to help patients suffering from

nausea after chemotherapy, the shares dropped to $28.37. and a completely different story for united therapeutic, shares went up over 30% to $114.51. here is something that may not be on your christmas wish list just yet, but it is showing up on a lot more of them this year, 3-d printers for the home or office. just how popular these amazing devices are. >> reporter: will 3-d printers be a hot gift this year? the president, jennifer lawton, thinks they will be. >> they are walking out with a 3-d printer. >> reporter: the printing company that acquired the company this year opening two stores in boston, and greenwich,

the head of the holidays. the personal 3-d printing market is still small, only about 36,000 units sold in 2012, accounting for just 6% of total sales for the printing 3-d industry. analysts say bringing in the consumers is crucial. >> they have to innovative and innovative with products that appeal to consumers. but go to market is important, because this is a new market. so what kind of objects are consumers printing? they have over 100,000 designs available, including arms, nose, not to mention the countless items you can constant, upload or print. >> we have a 12-year-old son who is very interesting in engineering. we thought this would be perfect for him to build this. >> it is not just statesist getting in on the action, with more than two dozen consumers this year.

ma prices are starting as low as $300. stratesit and 3-d have been red hot stocks for industries this year. if the industry is able to capture a main stream audience, their goal is even higher. for nightly business report, greenwich, connecticut. coming up, looking for stocks that could be solid performers in 2014? well, our special market monitor gifts has a list of stocking stuffers. first, the chairman said he will be watching in the new year. to those of you that are watching nbr, i would think the following for 2014 will be good, secondly, interest rates are going to go up. within that framework, how is the market going to react? more volatility, but more opportunity to make money.

all right, wondering what stocks to buy in the new year, grab a pencil and paper and ipad, every night this week we'll feature a special market monitor to talk about stock picks for 2014. vice chairman and portfolio manager of the aerial focus funds up 36% this year. nice work, charlie, congratulations. >> thank you very much, we did have a very good year. >> good for you, you just heard i assume, mario gabelli saying he expects earnings to be higher but interest rates, too, more volatility, but more earnings, what do you see for 2014.

>> yeah, i was sort of irritated that you played him first because he said exactly what i was going to say. we do have wonderful tail winds behind us here. we think four big tail winds, energy, housing, auto, all three of those industries will be stronger and put a lot of people to work at good better paying job. and in the fourth tail wind is that europe is going from a head wind to a tail wind. those are the big things we have going for us, and rising interest rates. we think it is almost a certainty. it is hard to predict how stocks will react to that. we think things will go up, but it will be windy. >> you didn't mention, charlie, anything about technology, and yet you mention the first stock on the list of picks for 2014 is ibm. this is a stock that didn't do so well last year. >> one of the reasons we didn't

have a good year we try to figure things out of favor. ibm is one of the few stocks that didn't do very well this year, it is trading at a very low price earnings ratio of less than ten. it is going to be benefitting from the recovery in europe. and from a strong economy. and frankly, people are just too negative right now on ibm. >> charlie, let's go to the second choice which is western union. charlie, have you heard of this thing, e-mail, charlie? >> yeah, try to send an e-mail with cash across the mexican borders. they have tied up the restrictions, anti-money laundering e-mails, and try sending it on the other end if the person doesn't have a bank account. you can't do it. so the money transfer business has been growing steadily for hundreds of years and we believe it will keep growing. >> you have another tech stock on your list, this is oracle,

everybody debates about it. why do you like it? >> because everybody hates it. i don't know what this guy did, but boy, everybody hates larry ellison, he is very successful, his software is imbedded in companies, huge switching costs yet the stock is trade follow about 11 and a half, 12 times earnings, comparing to an average stock of 15 times earnings. it will benefit from a recovery in europe, no doubt the tech spending has been soft as the economy has been a little soft around tell world. but we believe they will grow. and frankly they're getting to the clouds better, they had a problem with their products not being available in the cloud and they figured that out. >> let's talk about a couple of things you hate, name a couple for 2014. >> well, i do think the bond market is still scary, you have had me on in the past couple of times, i think i said go home, find all of your bonds and sell them. already, some of that pain has been taken, interest rates are

going up, bonds come down. we think that municipal bonds are particularly scary, puerto rico will have big trouble, this year. the state of illinois, the city of chicago where i live still has big problems. so if we get a couple of large municipal defaults, the bonds will be hard, we're worried about the high yield market which seems to go through five-year swings and it is back to being over-valued. >> charlie, thank you very much. of aerial investments. tonight we kick off a series called the difference-maker, profiling some of the most important people in business and finance over the past year. and the impact that they have had, now, in the year highlighted by activists investors, no one was more active than carl icahn, wall street's richest man took aim at several companies in 2013 and even one of his rivals. scott wapner has more.

>> from dueling with del to bothering apple, no investor has roared louder this year than carl icahn. the activist arguing for change at business after business. >> well, he is certainly the most vocal, you know, he has a very big microphone and is taking on the world's richest and most beloved companies. >> reporter: but one of icahn's big battles was not with a corporate heavyweight. >> you know, i really sort of had had it with this guy. >> reporter: but a rival, bill ackman. >> ackman is a liar, okay? >> reporter: the billionaires fought on cnbc and a decade's worth of animosity poured out. the world watched, and trading on the floor of the new york stock exchange spilled out. >> i never said i wanted to be friends with bill. you said to me you would like to

be friends so that we could invest together. >> do you think i want to invest with you? let's move on. >> >> reporter: but one of icahn's most memorable moments was not about a tiff but a trade. the investor placed a big bet on video streaming service netflix and hit the jackpot. an $800 million profit in just 14 months. >> wanted to sell, 100 points ago, i really wanted to sell it. >> reporter: a big score for an investor who even as he ages shows no signs of slowing down. >> i think that he is an extremely persistent and aggressive guy, i wouldn't necessarily want to be on the wrong side of a deal for him. but he is a super smart guy, he has a lot to say, and i hope investors and companies are really listening. >> and if they are not yet, they probably should be. for nightly business report, i'm scott wapner.

>> and join us tomorrow night for the next series of difference makers, we're profiling marissa myer for her impact on the business world. and president woodrow wilson signed a lot creating the nation's central bank exactly 100 years ago in response to the banking crisis of 1907, to provide the nation with a safer and more monetarily financial system. over time, the feds grew to regulating banks and suggesting monetary policy and providing services to the federal government, and keeping most of us on edge every time they hold a policy meeting. so from nbr, happy anniversary to the fed and may you have many, many more. if this year was not the year of the fed and the taper it certainly was the year of the activist investor witness icahn. fascinating story about carl icahn, i was going to say in my early years of reporting you didn't even know when the fed was going to have a meeting.

so they have come a long way from having transparency, we know more about their activities. i'm susie gharib, thank you for joining us. and i'm tyler mathisen, have a great evening, everybody. we'll see you back here tomorrow night, christmas eve. >> nightly business report has been brought to you in part by the street.com up to the minute stock market news and indepth analysis, we provide objective independent ratings daily on over 400 stocks, learn more at the street.com/nbr. 

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