>> this is "nightly business report." brought to you by thestreet.com. multi-meadia tools, our stock adviser guides you during a period of low interest rates and real money allows you to think of of ideas to invest and trade stocks. a and trade by trade strategies. online, mobile, social media, we are thestreet.com. >> banking on the banks, j.p. morgan and wells fargo, two of the nations biggest lenders, with their earnings, what it means. the china challenge, the object

that cals that american companies face to do business in one of the most important markets and how one start up is helping others by bringing investors together. we have all that and more coming up on "nightly business report," for friday, april 12th. good evening everyone, thank you for joining us, tyler is off tonight. our top story, record earnings from two of the nations biggest banks but stocks endeder their winning streak. j.p. morgan and wells fargo reported big profits but investors were not impressed focusing on a decline in the mortgage business. the worry is that weak loan demand could jeopardize the u.s. recovery. j.p. morgan's earnings jumped more than 30%, $.20 more than was estimated, that is not due to loan growth. revenueses fell, that was slightly below expectations. and a particular story at wells

fargo, where profits soared, $.92 a share, beating estimates by $.04 a share. joining us with more analysis, fred cannon, he is the director of the bank research firm. fred, what is the most important take away from the reports today from j.p. morgan and wells fargo? >> what is important is the big banks, revenue growth is hard to find. it seems that every time something goes wrong, something else is going wrong. the trade ing income was strong. they have to have great credit, that is everybody is paying back loans. they continue to post good numbers. >> everyone was focused on what was going on in the mortgage side of the business. mortgage loans and applications were down and yet, with we know that home prices and home sales are up. so it i'ms that there's a bit of a disconnect, you would have

expected more loan growth. >> one would expect, but it's all about he radio finances today. and we had record refinances because of low interest rates and the federal government programs to help people refi but we had few mortgage banks lending. is so the spreads in the business was huge. what is happening is there's a bit fewer loans but what is happening is the competition form is tough because of the profits the spreads are coming and that is pressuring the earnings right now. >> today was all about j.p. morgan and wells fargo, on monday, it's city group and wednesday, bank of america. are we going to hear the same story, the same themes from the banks in. >> you bet, these two set the scene, because they are the two belt weather stocks. next week we will hear great trading and good investment banking but the spreads are down, mortgage banking is is down. >> looking at the

recommendations, the bank stocks that you are recommending right now, you have city and wells far he go. let's start with city. investors had to be patient for a long type. how much longer do they have to wait if you buy the stock at $44 a share? i think you still have to be patient. it's the biggest restructuring story in the u.s. economy. we do think they will continue to post good progress on the restructuring, number one. and number two the mortgage banking is is not a big revenue item for citi. >> tell us the thinking with welli in s far go. long-term, you think it's a good buy? >> long-term, everyone is worried about the short-term mortgage banking numbers as you talk about. that was 19 of the 20 questions on the wells fargo call was about it. if you think in the bigger picture. rising home prices and we are seeing a strong market this

spring. are a good thing for banks. credit quality is better and at the end of the darks higher home prices mean people will borrow more money. >> bank stocks have been rallying since december. is this the end of the roally? >> i think home prices are a good backdrop for it. but the ten year bond yield has come down, that is tough for the banks inity short-term. over the next year, we think there will be background because of the home prices. >> any disclosure? you own any of them? >> no. i don't. >> we will leave it there. thank you for coming on. director of research. >> thank you. >> well, besides the disappointing bank reports, discouraging news about the consumer also weighed on the markets today. retail sales fell in march. and an index of consumer confidence from if university of michigan showed a sharp drop in april. here is how the weekended on wall street. the dow down at much as 74

points, at the lows of the day, and ended just a fraction of a point lower. the nasdaq off 5 and the s&p down 4 points. still those averages were up for the week by 2%. gold prices went down 4% to $1500 an ounce, down $63 to the lowest level since july 2011. well, despite the discouraging reports on retail spending, terry lund gren, the ceo of macy's said that his stores customers are still opening the wallet. even though the payroll tax increase has forced other consumers to pull back. >> our customer base is continuing to buy when the product is right. when the value is there. and when it makes sense on a price/value relationship. we continue to be confident at least in our case that the consumer is still in a buying he mode. >> our courtney reagan keeps

tabs on the buys habits of consumers, she is at the state supreme court house in washington. she has been -- courtney we will get to the trial in a moment, first, it's to get your take on what terry lund gren said, do you think that couple econsume think that couple e consumers a buying mode? >> i think it depends on the consumer and the store. it's not a very easy answer. we heard earnings from family dollar earlier this week. there's some concern about that consumer. the lower income consumer. of course, if you are one of the folks that is looking for a job and has been unable to find one, you are likely to be in the camp that is spending a little less. we got those retail sales numbers today from from the government. dispoinappointing and if you lot the details, it's the

discretionary spendsing that is taking the hits. department stores down 1.1%, and general merchandise, down 1.2%. i think consumers have gotten smarter. they spend when they feel confident. and those consumer confidence numbers also hitting nine month lows. >> absolutely. well, you know, a lot of what have is going on at j.c. penney will depend on consumers spending money in that store. there's so many issues there. let's start with the court battle. a r a lot of news coming out of the courthouse, what is the latest? >> so what happened today, the judge ruled that jc opini krmp. will be allowed to sell the goods that martha stuart designed but do not have her label. many of the products are in the categories that macy's is arguing that they have the

exclusive right to sell. the analyst values the inventory at $100 million. so the judge will allow j.c. penney to sell the jcp every day merchandise at this point. the trial itself, potentially weeks from being over and when the final decision comes down. all of that could change very quickly. >> and you are going to be back in the courthouse next week and we will be counting on your reports from there. thank you so much, courtney. courtney reagan reporting on j.c. penney. our market monitor guest said that the pull back is a good thing. so, ann, you are be looking for a 10% pull back. you said you would welcome it. why should investors welcome that? >> it's hard to know how much of a pull back we will get if any at all. i'm hopeful that we will get some. i think the market has gotten ahead of fundmentals right now. so it's the multiple that is increasing but not necessarily

the earnings. i think we are headed into the -- into the announcement season and preannouncement season for q1 and if we see too many disappoints -- disappointments that i think it will be selling off. >> is this as good as it gets? investors were hoping for a summer rally? >> i think after a 13% run in one quarter of the first quarter of the year, that is a pretty remarkable return. and i don't think that one most investors expected to get right out of the gate. and so, i would like to see a bu pull back or stability here. and we want more opportunities to invest. >> and yet, you see good values, good stocks to buy and let's look at the list. you have a very controversial one at the top of your lift. carnival cruise lines. interesting to know why you are interested in ccl, what is the

attraction given all of their problems? >> outside of the stories that made the news. the cruise industry is good. there's less capacity in the industry today than there was years ago. and carnival, they are net yields are up year over year and pricing is up. and so, although these events could have near term impacts to the stock, we are looking at the next two to three years and we feel it's trading at a big discount for the events. so it's an opportunity the to get involved. >> let's look at nuance communication, nuan on the nasdaq, carl icon made news, he bought a 9% stake in the company earlier this week, is that a good sign? >> he is findings some valuation attraction, much like we did. we have been involved since the beginning of the year. it's a voice recognition system.

it's known from the cell phone, but it has business applications that can provide a although of cost savings. -- a lot of cost savings, in the health care system, where you are taking health care records, you can take the technology and use voice transcription to turn into digital records for patients. >> all right, let's see if we can get in the third one of your recommendations. this is dick's sporting goods, why are you recommending this one at $49 a share? >> we think that dick's is a share gainer. they have great retail locations, primarily in the east and midwest, they will be expanding out west with, in the markets they have been in they have been share gainers and we believe it will continue and the new store growth on the west will provide growth for a couple years to come. >> any disclosures, ann? >> i do own the funds but not

individually. >> thank you. senior portfolio manager at wells fargo advantage fund. >> coming up, from yum to cater pillar, the challenges that american companies face when doing businesses in one of the most lucrative markets in the world. >> first, how the international markets closed today.

>> the federal reserve $85 million in bond purchases every month has gotten a lot of credit for boosting the stock market and the overall u.s. economy, now members of the nation's central bank are debating whether it's time to pull back on all the buying. one of the policy makers is eric ros rosenglen and he said that the time is now. >> i think there's strength in the underlying economy. if you asked me six months ago, would we have the kind of growth that we have been getting with tax increase, with the sequester, with the problems in europe? i probably would have expected a slower economy than what we are finding. so, i think we are going to get a pick up. i'm confident of that. i want to taper, but i want the to taper and stop the program, because we are getting strong growth in the economy and strong improvement in the labor marks. >> so maybe it was that underlying strength that lifted

the mo the market. bed bath and beyond was one of the best performing stocks in the s&p today. home depot jumped 2% to $73 a share, and walmart gained almost 1%, and p&g rose, and bed bath and beyond up more than 4%. the home builders saw gains. upgraded several stocks, including mi homes and others to buy ratings. she likes stocks that are long land. her words and that california home building is strong now. at the close today, beezer gained 5 and mi homes 2%. now today's drop in gold took the shine off of gold mining stocks. newmont dropped to four year lows. it was down nearly 6%.

but other minors loss more. and had thises the out sourcing giant, lost fifth of its marketing out look. the company's u.s. shares plunged more than 20%? heavy volume. >> there's always risks for companies doing business outside the u.s. those companies doing business in china, their profits are big, but so are the risks. >> this is annual tv show on consumer rights in china, recently targeted apple, accusing of it as treating customers here as second class, compared to other consumers around the world. apple apologized by the attitude

toward international companies is feared to turn sour. >> a foreign company is easier to go after than a local one. we have seen it in the past. >> for decades beijing courted companies fr company from overseas. but companies are facing what they fear a reality. many worry about cyber espionage and policies that favor chinese brands. the playing field here is hard from fair. >> it's hard to compete with a government backed entity. we have done well doing it so far. >> do you think it's fair? >> i don't know if it's fair or not, it's china. >> not all the concerns are related to the giant. yum brands was blasted by the state press. but it failed to detect problems

in the poultry supply. >> if we put in a system, we should have and could have make it perfect. >> the president said that china plays fair. but would do more to improve the investor environment. either way, international companies are looking to stay in the game. >> the market matters and that is why companies are here, and that's why they make the effort to do the tough work that is necessary to grow their businesses here. amid a weaker global economy. >> american automakers are doing business in china as well, and next week, we will have a series of reports from that country, including a look at what ford is doing to gain a bigger foot hold in the world's largest car market. >> but still on the program tonight, we will introduce you to a startup that is helping other new ventures to get funding and fast. >> but first, here is a look at how commodities, treasuries and currencies fair today.

>> the clock is ticking to tax day. april 15th is on monday. president and mrs. obama have sent in their taxes and shared the specifics today. they reported nearly $609,000 in adjusted gross income, and most of that came from the president's salary and 40% from book sales. the first couple paid a bit more than $112,000 in taxes.

that works out to a tax rate of 18 1 18.4% and donated a quarter of their income to charity. and for those of you who have not yet filed your taxes, you may be surprised to discover that you owe money or more than you expected. so how do you pay back uncle sam without breaking the bank? we report. if you think you may have trouble paying your tax bill, don't panic. there are ways to easy the burden. whatever you do, don't ignore uncle sam. >> you must file, the penalty for not filing is ten times more than the penalty for not paying. >> file or face a penalty of 5% of your unpaid tax bill, until that penalty hits 25% of what you owe. file on time, but fail to pay what you owe and the penalty is only half a % of your unpaid tax

bill plus interest each month. need more time to gather paperwork? file for an extension with the irs by the 15th and you will have until october. many people need that extra time. >> if an extension to file, it's not an extension to pay. they have to understand that. object, because starting april 16th, if you have a tax liability, interest and penalties begin to accrue. >> to minimize the interest and penalties start to explore payment options. >> 1 in 6 taxpayers have a balance due on the return. for me many, this is a big burden. they can't pay what they owe or they can't pay all of what they owe. and for those folks, the payment agreement is very often the answer. >> here is how it works, you set the terms and figure out the

largest monthly payment you can make, once approved you will be charged a $105 fee, or $52 if you make direct payments from your account. you can set is it up online. don't take too long to pay uncle sam, you will still be charged penalties and interest, until the tax bill is paid. >> and finally, this week's bright idea is about the start up that is helping other startups when it comes to raising money. retailers have a tougher time getting funds compared to say, tech firms but a new company in san francisco is helping to change that through a process called crowd funding. it brings together groups of angel investors and for the start of the benefit, it's like a little bit of heaven. >> this couple may not look like

matchmakers but their start up firm, is in the business of bringing together investors and small businesses through crowd funding. >> crowd funding is the process of connecting multiple people and allowing them to invest in a project or a company. >> it's often associated with organizations like kick start. they have backgrounds in private equity and are using the model to group angel investors hoping to make a profit. they buy in through a broker that pays circle up a commission and and they get on the ground floor of small businesses like little duck organics, a healthy snack food maker in need of cash to grow. >> i racked up $200,000 in debt. >> zach had tapped out the credit cards and friends and family. he raised $400,000 from a group of outside investors and went from selling in ining in 600 st

4,000 stores and then he was told about circumstance le up at was not long until he was moving forward. in just eight weeks, they helped little duck raise a little more than a million. they have helped more than a dozen firms raise similar amounts. all companies poised for growth. >> they tend to focus on technology. and consumer is a little under represented. >> we have made investing more efficient. >> it was the goal of the bipartisan, jobs act, signed by president obama a year ago, to help more small businesses race capital from investors, while the laws have been eased, the

hope was that they would ease standards. critics are worried that looser rules will expose companies and investors to fraud. aiken and callbeck feel they have a model that works for both sides. what makes it work for businesses is that beyond the cash, he is getting connect to investors he feels believe in had his business. >> they are vetting through the investors that are coming to the table, so we are not getting people that would not be a good fit for our company. >> for nightly business recopor >> that is it for "nightly business report" tonight, thanks for watching and have a great weekend everyone. and we hope to see all of you back here on monday. snowe snowe has been brought to you by thestreet.com.

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