commodities trading that left her with tons of wheat. and a look at the headlines moving the markets plus an author talks about the financial lessons learned from the big meltdown it's all ahead on today's first business. monday, september 13th you're watching first business: financial news, analysis and today's investment ideas. good morning everybody thank you for watching its monday september 13th. traders are watching to see if stocks could continue to climb higher. there has also been a lot of talk of how higher commodity prices are helping the stock market. stocks are now up two weeks in a row. that is huge. the market is really rallying on friday as the president is really giving the details behind his economic plan. at this point i think a lot of traders are out there hunting for stocks that have been beat down because they are ready to make some more gains. congress is also back in session this week. so the debate over boosting job creation is definitely going to heat up. especially two months before

the midterm election. in the meantime the securities and exchange commission last week just expanded new circuit breaker rules for the russell 1000 index plus certain exchange trade funds and the sec has also put into place new exchange rules that clarify the process of breaking certain erroneous trades. shares of pacific gas and electric are now in focus this week, after seeing a 7% hit on friday.the drop was in reaction to pg&e's gas tranmission line rupturing in california.the massive explosion ripped through a neighbhorhood south of san fransisco.the accident killed at least 4 people dozens more were injured and 50 homes were destroyed.pg&e says the cause of the explosion is still under investigation.the national transportation safety board is the federal agency investigating natural gas pipeilne accidents - and, it's still unclear whether or not pacific gas and electric is at fault for the explosion.

te hgovernment just reported friday stock piles of wheat around the world will be 1.7% larger than forecast in august.while that bit of news from the most recent crop report isn't exactly likely to make or break your day... we met up with a lady who is taking a hands on approach to the commodities market.she grew up in a rural community in ohio and recalls listening to the farm report as a youngster.today, sarah kavage remains fascinated with the commodities market. so much so, that she bought a futures contract at the chicago board of trade. and because that wasn't enough of a hands on experience, she decided to take delivery of 20 tons of wheat kavage had the wheat milled into flour and stores it in a warehouse."most of it's in 50 pound bags but we also did some more commerative style "surrounded by thousands of pounds of flour i couldn't help but ask...why would anyone want

to do this? "well i don't know if anyone else would really be interested in doing this except for me. hum i'm really interested in learning by doing."and did she ever learn. kavage found out about the complicated process of how commodity futures contracts are tied to a variety of grain elevators based on quality how much is involved in wheat pricing for farmers and, " how removing this litte tiny bit of wheat out of the commodity system and using it as a way to nourish people as opposed to a vehicle for investment."if it were an investment kavage would be sitting on a pile of cash.in the spring of 2010 she payed around $4.50 a bushel months later the price of wheat surged to nearly $8.50 a bushel.even though it brought in a lesson. "this summer we had a huge spike in the price of wheat and now we have food riots in

mozambique because people can't afford to pay for bread. kavage estimates her total cost to own, mill and store her commodity-- was around $15,000 dollars.frequently, she packs up several pounds of her flour to give away to soup kitchens, food banks or anyone interested in baking.she doubts her return on investment will come from a monetary aspect." maybe at some point, but i'm not expecting that." kavage does take in financial donations.she tells me she has recouped about half the money she spent in her personal wheat project. thanks angie cotton prices are now at 15 year highs at just

under one dollar a pound.they've jumped almost 30% in the past month alone.because of flooding in china and pakistan global cotton supplies are very tight at the same time, worldwide demand for cotton remains very strong experts say the higher commodity prices likely mean you'll be paying more for cotton clothing in the near future."they are going to see higher prices from the raw product clothign prices push up and they'll use that to raise prices at the retail level"the spike in cotton prices plus higher production means big profits for farmers especially in texas we are now joined by alan knuckman / agora financial to get a check of the financial markets. are these higher commodity prices good news for stocks? i like the fact that assets in general are holding there own and actually we are seeing big gains across the board in and allot of physical commodities. you are seeing corn, sugar and silver allot of

the things that are governed by supply and demand. it is still there and their prices are accelerating. do you think that can push stocks higher? i think stocks right now are lagging behind and their earnings are not doing very very well. we need some sort of catalyst. the next earnings season starts right here in october but right now you are seeing all these physical goods hold strong. they are continuing to move higher and that is a good sign. i see crude oil as a barometer of the economy. crude oil was up 3% to finish friday. it looks like it's trying to get back above the $80 a barrel level. we have seen in the past when crude oil moves higher it also moves the stock market with it. we are still testing key resistance areas in the s&p 500 at 1120. this is going to be the third test so it's kind of a make or break situation is it not? the last couple times we saw low volume it was during the summer and it kind of direction less. this time it will be important to see if we can get

above that. i think it really could spook a lot of people who are committed shorts and force them to cover some of their positions. so we have been trading between this 1120 level and 1040 for almost the past year and it looks like we are getting another attempt on the upside and will see how the markets will react if we can push through there. we will get some short covering and we could get back up to 1200 in the s&p and really be in a interesting situation. why are you bullish on these markets? i'm bullish because we know all this negative information we know the housing and employment have been factored in and the bar is so low. plus companies are sitting on so much cash doing so well in their earnings and on lein employment in this situation that they're in. they are not forced to hire people back. all that does is labor such a big cost that just continues to fuel their profits and companies are doing very very well. we'll just have to see if everybody is just as

optimistic. thank you for joining us alan knuckman / agora financial. this week, congress is back in session, and lawmakers are expected to take a vote on the small business jobs bill the bill would set up a 30 billion dollar lending fund so that small businesses can borrow money to grow their companies.it would also provide 12 billion dollars in tax cuts which include eliminating capital gains taxes on key investments and tax cuts for businesses that create jobs in the next 14 months.the bill would be paid for by the tarp program that was set up in 2008 to bailout banks.but, there's been a lot of opposition to that idea.meanwhile, small business owners have said they are putting off hiring decisions because of continued economic uncertainty.in a recent survey, 78% of small business owners questioned said they have no plans to do any hiring. still to come a financial expert has tips on how to best teach your kids about money.but first a look at what it's going to take to draw people back

into the stock market dan cook of ig markets joins us next with his insight.

we are now joined by dan cook / ig markets to take a look at this week's headlines. after a very slow summer when will things finally pick up in the stock market? we really hope this week. the summer vacation and holidays are now over. last week was really boring. now that we have a participation back we should have allot more traders being active popping up

the volumes. it doesn't mean that we should go higher necessarily but we should start to get a good sense on what the overall market bias is. what about individual investors the retail investor are they completely tuned out to the stock market at this point? it certainly does seem that way. there is a lot of money sitting on the sidelines i have heard figures of about eight trillion dollars. we have also had structural issues with may 6th so that makes them nervous. theres still allot of fear over the economy. all those things are making people react. people just want to be safe it is about preservation for a lot of people rather than make an extra buck. what do you think will bring people back to the stock market as far as retail investors? i think once we can put in a stable bottom. if we defend our bottoms pretty well and hold above the thousand level that is a big psychological threshold. above 1020 would be great. people

start to feel comfortable than not like they will be crushed as soon as they get back in. we still have a lot of things to sort out before people could really feel comfortable and that is probably still a good five or six months away. maybe things will start to pick up with the midterm elections coming up. let's look at economic data to watch this week coming. tuesday retail sales wednesday and thursday new york and philadelphia manufacturing surveys. will we see disappointing numbers from one or both of these? that is a definite possibility. particularly in the philadelphia manufacturing survey. last month it was shockingly bad. it was a negative seven when we expected a reading of seven. the estimates are very low so most of them are pretty conservative estimates so we do have a chance for a pretty good upside. while the data may be better than expected it will not be great. are we looking at flat growth for the next several months potentially? yes it will

probably flatten out as we get towards the end of this year. hopefully we will see it start to pick up a little bit getting into the first quarter of 2011. we are still talking about the ural mass. worries over euro banks are back in the news. we already knew the stress tests really were not convincing because they really did not take the sovereign debt into account on banks' books. so why are people nervous again? it was kind of quantified how much of a gap there really was last week. it made headlines but it really was nothing we didn't already know.it looks like they're going to start moving towards higher capital quotas for banks based on this information. i think people are becoming concerned about what that means for growth if the banks are having to raise more capital less credit in an environment where it's already slow. what will happen next with the euro mess? i think something that has been really overlooked is the eastern

european countries not necessarily ones part of the euro area. there are a lot of countries like ukraine for example that have a great amount of debt in euros or in swiss francs. ukraine in particular probably has about 57 billion in debt at about a 30% default rate. it has become a lot tougher with the strengthening of the swiss franc for this debt to be paid back. this will not topple the banking system by any means but it could definitely put a damper on any type of growth. definitely something to watch out for. thank you for joining us dan cook / ig markets. online items more americans look to cash in on that one great idea on our website..firstbusinessnews.com a look at what's behind the recent spike in trademark and patent applications.plus a stock picker mi and technology sectors. and remember if you missed the show you can always catch full episodes and daily trader firstbusinessnews.com. and straight ahead on the show how the financial meltdown is their spending habits a look at that next.

making changes since the meltdown. since 2007 american's have been putting more money away. we are now joined by ellie kay, author, living rich for less. a big part of what we experienced during this financial crisis was american's being financially illiterate about taking on too much debt. do you think we have finally learned our lesson? i think we are learning are lesson when it comes to financial literacy but i also feel it is something very important that we try to pass on to the next generation to teach them to be financially literate. even if it comes at the expense of learning from our own mistakes because it is critical that we teach our children not to make the same mistakes. before we get into those mistakes and teaching our

children can you give us some investment ideas because american's are saving more at a time when interest rates are low. is there a place people can put their money to earn a little bit more than the standard interest rate? i think when it comes to investments allot of americans need to keep in mind that the very best investment they can make is to pay off all their consumer debt first because a lot of times the interest rates are pretty high on them. once you have done that and you want some place to just park your liquid assets or your savings account you can look for some high-yield interest checking accounts. there are some out there. there are mid range bank's that are offering that. royal banks of missouri was offering 4.1 the last time i checked. there is allot of of criteria associated with that so be sure you read the fine print. there are

certain number of debit card transactions that you will have to have every month and other things. there are some places out there if you look that have higher interest yields for those liquid assets. moving on to what you discussed earlier about teaching the young degenerations. i first want to focus on the mistakes that have been made in the past. do you think parents and schools share the responsibility of teaching children money lessons? i think it's primarily the parent's responsibility. of course it is great when schools can do it as well and there are wonderful programs out there. one is jumpstart and it is teaching kids about financial literacy. but it definitely is a partnership and parents need to take the responsibility for teaching their kids about money. what specifically should parents be sharing with their children? i think one thing we should teach our children is budgeting. that is what a lot of adults have problems with. it can start off fun whether you

are going to the zoo and giving them a certain amount of money that they can spend and what they don't spend they get to keep. that's what makes it fun. although the way till they get to 13 or 15 years old they should be able to to manage a full semester's worth of money for clothing or a budget for back-to-school items. tracking is the real key for parents to be able to teach them. i recommend pass from american express which is a prepaid card that can be reloaded and you can track how your child is spending that money. this way they do not have to go out and spend cash or come back to you with a bunch of receipts or take your card. would you do it that way they can be responsible for a larger amount of money but at the same time you are still there with them. it's kind of like drivers education for a teens wallet. the parents are the ones in the driver's seat

however. looking ahead are you hopeful that children and parents of all ages have been and will continue to learn lessons and manage money better going forward? yes absolutely i am very hopeful because what i am seeing with families is that they are saving more and have a greater desire to be responsible and all of those things make me really hopeful. thank you for joining us ellie kay, author, living rich for less. still to come on the show why traders are paying close attention to the technicals of this market. we will be back with that after this break.

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we are now joined by dan deming, stutland equities. i am glad you are on the show because i have a big question. why is it that traders who do not tend to watch the technicals are suddenly started to watch them while you have been doing it forever? i think it's a function of the market really being range bound. we are seeing the market trade down to that 1040 level which has been significant. it touched there three times and then sprang back off their from an oversold condition and now back up above 1100 and pushing the 200 day moving average in the s&p 500 at 1115 and i think the fundamentals in the marketplace are kind of understood right now. we are coming into the earnings season. the market is in this back-and- forth type of situation so traders are trying to look for cues as far as the short-term trend recognition. so traders are watching the moving averages to determine if there will be a

break out or break down in the market. what do you think? right now i think we will have to test the 1115 area. your kind of seeing the death cross on the moving average like i described a month ago with 50 and 200 day moving average criss cross. you are seeing a little bit of an upturn now in the 50 day moving average so the momentum has slowed down. it's gonna take a long time to work off at that technical level so i think the market will be limited to to the high side but we are seeing a nice bounce off of the lows. thank you for joining us dan deming, stutland equities.

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