in today's cover story: back on top. what u.s. manufacturers are doing to become the heavy- hitters of years gone by. cash flow is changing continents. why some investors are going the distance. plus, why post-nups are becoming as popular as pre-nups. and, why so much money is still sitting on the sidelines even as the market rallies higher. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's wednesday, september 12th. i'm angela

miles. in today's first look... germany's top court rules on the eurozone bailout. in america the dow hit a 5-year high and commodities and stocks rallied ahead of the news out of europe. texas instruments narrowed its forcast after the close, sending shares higher. zein abdalla becomes the president of pepsico as current president john compton leaves the soda company. scott bauer of trading advantage joins us now. scott, people talk so negatively about the market all the time. it's true, correct? > > no doubt about it. > > and yet, the dow is at a five-year high. > > yup. the bottom-line is, where else are people putting money? what's really interesting about that is there is so much money on the sidelines. there is more money on the sideline than there was actually back in 2007. so there's that dichotomy: where am

i going to get any sort of return? yet people are still afraid to get into this market. > > will today be the day, especially with that ruling coming down from germany's top court over the bail-out fund for the eurozone? > > everyone really expects some sort of decent news. maybe not the panacea of what's going to solve all the problems, but some sort of positive news. but i will tell you that the traders are really looking beyond the news coming out of germany to tomorrow's fed meeting, that's for sure. > > you've studied the options all the time. there has been some call buying in the banks. is now the time to buy the financial stocks? > > you know, they're on quite a roll right now. you look at the likes of a morgan stanley or a goldman-sachs, and these things have appreciated 10 to 15% just over the last couple of weeks. there are lots of up-side called buyers in there because the feel out there is that if we get some sort of easing, or not even easing, but just some sort

of extension of that window, who is going to benefit from that? the banks, who were so beaten up, but now on a road to recovery, are going to benefit. so we're seeing lots of call buying out to december and january, especially in the likes of a morgan stanley. > > and we'll hear more from the fed on thursday. good to have you on the show today. that's scott bauer of trading advantage. the head of the association for manufacturing technology says the u.s. is at a turning point - a shortage of skilled trade workers and tough global competition. in our cover story, the push for a national manufacturing strategy. there have long been advantages to offshoring - cheaper wages, closer to foreign markets - but that's changing. wages in china and brazil are going up, so a lot of manufacturers are reconsidering the u.s. and there's another reason - and a lot of it is on display at chicago's manufacturing trade show: more automation. "for a lot of products, there's

no need to chase labor around the world." that may mean more manufacturing back in the u.s., but not necessarily more jobs. "automation has caused the labor force to be more lean and companies are not necessarily hiring people back." there's more behind making things again in the u.s.: the association of manufacturing technology, which lobbys for manufacturing interests in washington, worked for a 500 million dollar private and public partnership initiated last year by president obama. it's to develop emerging technologies and create manufacturing jobs. tax breaks are being discussed, and president douglas woods doesn't want them tied to provisions that companies hire in the u.s. he calls it 'simplifying the tax code.' "if you set it up too complicated with tax cuts to reshore, they're hard to enforce. less complicated is better." the u.s. has become attractive to global companies like seco, a cutting tool producer headquartered in sweden. seco has 80 employees in tennesee, 200 more in pensylvannia and is looking for more. "one of our biggest challenges is finding engineers to work

with us. cnc machinists who can talk with shop supervisors is one of our ongoing requests for jobs." there's also a bill in congress which would make a bipartisan manufacturing competitiveness board. its members from the private and public sectors' mission would be to boost the competitiveness of u.s. manufacturers around the world. the latest iphone from apple will be revealed around 1:00 this afternoon. it's projected sales of the new phone could boost the economy. a jp morgan analyst tells reporters if americans buy roughly 8 million iphones, it could add up to a half a percentage point to gdp by the 4th quarter. more than 1 million 4s iphones sold in the first 24 hours. the new phone is getting buzz for its potential ability to connect to faster networks. we'll have more on buying and selling apple stock in chart talk. meanwhile, new questions of harsh labor charges are surfacing against apple supplier foxconn. this time,

reports from a chinese media outlet accuse foxconn of using students as interns and forcing them to work for no pay. foxconn said interns do work on manufacturing lines, but are not required to do so by foxconn. the company says schools in china bring students to the factory as part of a work program. recently, audits of foxconn have received positive reviews by the fair labor association. jamie dimon is back on defense. the ceo of jp morgan chase met in new york with analysts yesterday at a conference hosted by barclay's. jp morgan lost more than $4 billion in risky trading this year. when questioned about whether big banks should be broken up, dimon replied it was the large size of jp morgan that allowed it to weather the financial collapse of 2008. mark zuckerberg is looking ahead in his first interview since facebook's ipo. speaking at a techcrunch conference in san francisco tuesday afternoon, zuckerberg said he's disappointed in facebook's stock performance, but he expects it to turn around. he said facebook will make more money with mobile products than

desktop features. facebook lost half its value since the ipo, which was marred by a technical glitch on the open may 18th. fb stock rallied more than 3% in after hours trading, topping $20. greek prime minister antonio samaras and ecb president mario draghi are optimistic about a recovery in the eurozone. today, germany's top court will rule on the permanent bailout fund for the debt crisis. questions have been raised about whether greece is following the rules necessary to get financial aid. however, in a meeting yesterday, draghi and samaras agreed that greece is following the terms so far. mcdonald's value menu is helping to boost sales. global sales rose 3.7% in august. diners dealing with weak

economies in the u.s. and overseas purchased more food from $1 and $2 menus. new products such as iced coffee drinks also lured in customers. on the flip side, mcdonald's remains wary of inflation in the u.s., and the economy in europe. both could take a bite out of future sales. the gap between rich and average americans more than doubled over the past 50 years. in 2010, the top 1% had 288 times more wealth than the average household. in 1962, the super rich had 125 times the net worth of median households. cnn money reports not only are the rich getting richer, but the middle class is becoming poorer. in 2010, the net worth of middle americans fell from $73,000 in 1983 to $57,000 in 2010, while the top one percenters' wealth grew from $9.6 million in '83 to $16.4 million.

small businesses are buzzing with more optimism. those are the results of an august survey by the national federation of independent business owners. the survey found that many companies are looking down the road with hope for sales and overall business. many say the presidential election has been a road block for small business hiring, and that the november results will likely give a hiring boost. owners who expect to create new jobs rose to 10% from 5% in july. chicago teachers are still on the picket line. contract negotiations continue as 350,000 students stayed out of class for a second day yesterday. health benefits, wages and especialy teacher evaluations are the main sticking points. chicago mayor rham emanual calls the strike "avoidable." general motors is calling accusations over the cost to build its chevy volt "grossly wrong." earlier this week a reuters report estimated gm loses $49,000 from each volt it produces. yesterday the car maker fired back, accusing the

news outlet of "bad math." gm says the report analyzed how much was spent on the number of volts sold. the automaker says this was incorrect, and the report should have analyzed the volt's costs against a longer time frame. the fda put out a warning about loreal's eye cream ads. lancome usa, which sells the skin creams, claims it can "boost the activity of genes" or "stimulate cell regeneration" to reduce signs of aging. according to the fda, those terms make it sound like drugs, and drugs need approval by the food and drug administration. loreal, the world's largest cosmetics company, has two weeks to submit a plan to correct the wording. a bill that would fund a program to help veterans is gaining more momentum. the veterans jobs bill passed in the senate yesterday. the one-billion- dollar program will help military veterans find jobs. that population has struggled with high unemployment, still

hovering around 10.9%. still to come, why post-nuptial agreements are becoming a common practice in marriages. that's later. but first, more investors are traveling abroad with their money. paul eggers has a report about a shift in global investments. that's next.

a former employee for ubs has been awarded big for being forthcoming to the internal revenue service. the irs has given the former banker $104 million as a "whistleblower reward." the employee had turned over information about a program that helped ubs clients hide money from the irs. ubs was fined $780 million for the illegal practice back in 2009. emerging markets are attracting investors looking to put their money to work overseas. paul eggers reports on the risks and rewards in developing economies. typically defined as countries with low- to middle-income standards, emerging market nations like india and russia can sometimes be under-rated by investors. "keep in mind, these are creditor nations now, that have the wherewithal to lower interest rates, to spend money to shift their economies around. so i think investors aren't giving them enough credit for the flexibility that

they've got." as a result, the market may be under-pricing the sector according to jack ablin, chief investment officer of bmo harris private bank. "emerging markets are certainly cheap. when you measure them against the u.s. on a price-to- book, price-to-sales basis, emerging markets are certainly an attractive place to be on paper. problem is they've been caught in this correlation trade with europe." europe remains the biggest trading partner for emerging economies, and though most developing nations actually have control of their national debt, "the indebtedness of greece and spain is not something you'd see in emerging markets," they are still vulnerable to debt crises on the other side of the atlantic.

"when we think about how investors should treat emerging market bonds, we believe they should be treated as a riskier asset and not a core bond-type of asset." david falkof of morningstar tracks mutual funds that invest in the soverign debts of emerging markets. he says playing the sector in this way can be safer than investing in equities from these countries, offering more downside protection and greater liquidity. "since 2010, there have been more than 10 billion in inflows. i think this year alone its more than 14 billion in assets flowing into emerging market bond funds, whereas previously it was only 1-2 billion each year. "as for specific recommendations in the emerging markets space, falkof highlighted fidelity's new markets income fund and pimco's emerging market bond fund as two of morningstar's favorites. reporting from lasalle street in the heart of chicago's financial district, i'm paul eggers, first business news."

jack ablin of bmo harris recommends emerging markets and u.s. large-cap stocks. he also cited european and u.s. small caps as areas to avoid. still ahead, why more wives are negotiating over finances. that's next.

a growing number of wives who don't have pre-nups now want post-nups. gemma allen of ladden and allen family law is on set this morning. good morning to you.

> > hi. how are you? > > great. i'm wondering about these post-nups though. because you are already married, do you lose some of your bargaining power when making a new agreement? > > that is the essential question, because, what is the bargaining power? the courts will look at that very strongly. but i'm excited that women are asking for more, because i think it's a sign that women are feeling more powerful. > > another sign is that financially sometimes the man starts to make more money than when they started the marriage, or even the women are starting to make more money, and that's one of the reasons why we're seeing this. how does that play into getting the post-nup? > > well, it is an interesting issue in a marriage, because as each party changes in their lives, they may say, "hey, we may disagree about the next chapter. let's think about, you

may want to leave everything to the children. i may have a favorite charity. let's think it through, and maybe rather than fight about it, let's negotiate about it and make it a written agreement." > > when you have a client seeking a post-nup, what does that usually include? what are they really looking for? > > well, it's called "private ordering." it's a private contract, and it's as different as the people who come into our office. but, frequently security, frequently a joint decision on some issues, or if they don't agree, a disagreement that's channeled, so i can take x money and do this with it, you can take x money and do that with it. frequently they're looking for security. they're looking for, "what's going to happen as we go into this next phase of our life?," whether it's a middle- aged couple suddenly making money or an older couple with one retiring but the other is still very productive. what do we do next, and let's agree. > > as an attorney, what are your best recommendations to give to somebody who is now seeking a post-nup? > > you have to gather all the information you can, because

information is power. so, you have to come to it fully informed. you have to realize there's a little risk when you start talking about these issues, because money is the touchiest thing. it's more difficult to talk about than sex by far. so you have to be prepared for a difficult conversation, but a very productive conversation. > > gemma allen. always a pleasure to have you on the show. thank you. > > thank you. coming up, find out how traders are positioning ahead of apple's launch of the iphone 5. chart talk is next.

time now for some chart talk with andrew keene, president of keeneonthemarket.com. we're talking apple, of course, with you andrew. apple's stock is up 64% since the first of the year. it's had a tremendous run. what will it do today with the new iphone 5 coming out? > > if only i knew what was going to happen today. the fact of the matter is it did sell off from a recent all-time high of $683. $649 is a line in the sand to the downside. i'm going to be trading apple today, but

i'm going to be trading it on an intraday basis, which means any position i put on today will be taken off by the end of the day. long-term, i'm the biggest apple and gold bull out there, so long-term i think it's still a buy and i'd be buying it on any dip. however, today should be interesting. when the announcement comes out that the iphone 5 will come out, i think it's going to be disappointed. it sold off about $25 in two days on these highs, and it looks like the short-term trend is actually down. so i'm going to look at price action, price momentum. whichever way it goes, i'm going to go with it. if i see the stock going up, i'm going to look to buy it. if it's going down, i'm going to look to sell it. but $649 - if it breaks that, it could get ugly. > > knowing how much momentum this stock has had over the past few trading days, should the average investor become involved with it today, or just stay on the sidelines? > > it depends on your risk tolerance. i have a very abundant risk tolerance because

i've been trading professionally for about 11 years now, so i have positions on that are day trades, i have positions on that are one-week, one-month, even a whole year position. so it depends on the risk tolerance. even in apple, when the announcement comes out about the iphone 5, let's say it's going down, i'm looking to short it, i still leave a stop- in, $3-5, in apple per se. so it depends on your risk tolerance. if you can't tolerate a good amount of risk within a minute, 10 minutes, 20 minutes - because that iphone 5 could come out, it could sell off, or they could pop something good about the iphone 5 and make it rally really hard - if you don't like risk, you shouldn't be trading apple during the day. > > andrew, did you just get a text on your iphone? > > yeah, i actually did. but i'm getting the new iphone! that's september 21st i think it comes out. > > i figured you would. thanks for being on the show today. that's andrew keene, president of keeneonthemarket.com. that's a wrap for now. coming up tomorrow, a new film about wall street opens this weekend, starring susan sarandon and richard gere. find out if our film guy thinks it's "so money." from all of us at first business, thank you for watching and have a great day!

u.s. ambassador to libya killed in an attack to the consulate in that area. we are live in alameda where a man in a wheelchair is rescued from a burning apartment. just hours from now the big announcement apple is expected to make about its newest iphone. all ahead on the ktvu channel 2 morning news.

good morning. thank you for joining us on this wednesday morning september 12th i'm pam cook. let's check in with steve paulson. what is the weather going to be like? >> if you're by the coast or around the bay it's 60s and 70s. a little bit stronger sea breeze. and if you are inland it will be warm to hot. 80s. steve, good morning. traffic is doing pretty well. there is road work out there we may have to worry about on 880. for the most part we are doing very nicely. let's take a look at the golden gate bridge. a little bit of fog on the span. also we are looking at 880 northbound traffic does move well. let's go back to the desk. we begin with breaking news from overseas this morning. u.s. ambassador to libya and three other americans have been killed on attacks