morgan stanley is still my top pick. the volcker rule is not a game-changer for morgan stanley. so i can't say i've gone through the new volcker rule, all of the details. i'm not sure exactly what's in there. having said that, i'm not the least bit worried about morgan stanley hasn't adjusted. in their fixed income trading business, morgan stanley's risk is one-fourth what it used to be at the time of the crisis. the assets in that area are one-third less, and the revenues as a percent of total are one-half less. so they've already downsized and contained their fixed income trading. they've gotten rid of the proprietary-like activities, so as it relates to morgan stanley, perhaps the rid of the uncertainty to getting the final volcker rule can still be a positive catalyst. so i still like morgan stanley as much as any time, and if anything, i mean, retail investors are a little more engaged. the stock market is a little higher. and don't forget that this evolution of morgan stanley, one-half of the company is in wealth management, in the brokerage business, and they're still tra

morgan stanley has sharply changed their business.s they can profit from where they are today. you could make an argument that what goldman's management doing is running trays -- trading businesses. we do not know which one of the businesses will generate maximum return. the market is changing and ubs is pulling out of six and come to the royal bank of scotland is pulling out of equities. we will see more and more banks making those decisions. goldman says in the end, capital markets make good business. we do not know what the normalized return will be out there when other people have made their changes. they are sticking with the old model. morgan stanley is going with the new model. 2410 2050 will be fascinating because i think this is where we will start seeing the two trends are part. >> what is the read? who is doing better as a result? >> goldman. morgan stanley's -- >> is it in a better vision five years down the road? >> they make the argument that wealth management is a very predictable business. what they're really saying is

next hour, thee morgan stanley chief u.s.t adam parker will discuss the outlook for the s&p 500 in 2014 ♪ >> the bull market will continue as corporations continue to make money. if you build it they will come. foreigners part millions, billions in american real estate. "bloomberg surveillance." good morning come everyone this is "bloomberg surveillance." i'm tom keene, joining me, scarlet fu and michael mckee is with us as well. our guest host this hour, one of our more popular guests, adam parker. he is chief equities strategist at morgan stanley. we welcome him for a 2014 outlook. >> let's start with some good news. --lions in real estate not not affected by inflation. lowest in four years. moved closer to the bank of england's two percent target. we get some price data here in the u.s. at 8:30. consumer price index to only difference is ours is supposed to go higher. at 10 a.m., homebuilders housing market indexes also supposed to go up. that would be good news. day one of the two-day fed meeting. no one knows what they'r

morgan stanley up 1 .5% right now, the banking index is just fractionally to the downside. the dow jones industrial average just slightly lower, down about 30 points, so that's not even two-tenths of 1%. so it shows you that while this has been a big rule and it was unanimously approved by the fdic and the federal reserve board, the sec approved it by a vote of 3-2, that's worth noting as well. but overall, it's done, it's what they expected to a certain extent, and that's why you're seeing these banks just hovering around that unchanged line and not really reacting too dramatically at this time. cheryl: still, the sector had a great year, 2012 a greet year for the financial sector, so no disappointments there. nicole, thank you very much. we'll see you in just a little bit. another big story we're following today that, of course, is general motors, the stock slight i have lower after the automaker announced mary berra will be the first female ceo of a a major auto company. here to tell us what this means for the future of gm, jeff flock. i know you spoke with him about all

goldman sachs and morgan stanley -- morgan stanley made be affected because they get 30% of revenue fromal training -- thanks totime us. joining us now, phil mattingly on the story. three yearsas been in the making. is it ready much done or can we expect changes in the last hours? class as of friday, people involved said there were still different drafts circulating throughout the different agencies right now. working in the weekend like this. working right up until the release tomorrow. the issues are the same key issues we have seen since the initial draft release in 2011. it is defining market-making, also how theys will decide whether or not the ceo signs off on this and maybe executive compensation as well. key issues, as we have been saying, the devil is in the details. we may not know for weeks or months what this actually means. >> compensating wings for the bank. what does it mean not for the mainstreamthe american companies? i will give you an airline for example. if an airline wants to hedge oil prices and might have otherwise have done that, how can they in the future? >> the

morgan stanley, up 4% today. karen. >> well, you know, i have had the financial the slope didn't move today. we want to see that move. however, the economy doing better housing doing better. >> that i didn't really get fire under them until we had the taper. but i like them going into next year. i'm staying long. >> blackstone is the name we ed abo forever. i want to say it's an all time high. it's close. prudential, we said therek if r that will do well. the huge move up 3%. u.s. bank corps, people get on me say i talk too much, guess what, that's a bank at an all time high. it still pays a nice dividend. some have done well today. >> the vicks hitting the day down. >> vicks creeped up. people thought volatility would stay bid. there was volatility in the market. this is an s&p up almost 30 to date. we had a draw of 7.5%. it's the taper tantrum. every dip has been bought. like we said a couple times, there has been long trading, the high of the year was 22. march and april, 22, 2003 t. big side. >> it was brough

morgan stanley rolled out the coverage of paychex. they started with a sell. but i want to buy paychex, because the benefits from increased formation which is part in parcel for demand of more money that causes rates to go up in the first place and gets to make money off the float. that's been a huge reason to own the stock in the past when rates were higher. it will be again, although not initially, i would buy the stock if it gets hit tomorrow, though. finally, a huge hit in positive. the cash may be better invested at better rates. right now a ton of cash has meant nothing for companies because they like to invest the money short-term. and they can't get much in return because the rates are so low. but when rates go higher, suddenly that cash is going to be worth much more because it'll generate a more meaningful return. who has the most cash under management? and that's really what we're doing here, managing the cash. how about apple? yeah. that's why if rates spike, i would reach for shares of this incredibly undervalued company on the exciting new news o

morgan stanley analysts citing concern over lack of growth overseas. so tyler and sue, analysts casting some doubt on if this dog to darling trend will continue. back over to you. >> thank you very much. blackberry another stock that has been a real dog this year. no surprise there. dominic chu bow wow has a market flash. >> let's talk about this one, tyler. the downward slide continues for blackberry. this smartphone maker hit a fresh 52-week low, $5.74 a share. see there, shares are down nearly 70% since last january when the stock hit a 52-week high of about $18.5 per share. so again, maybe dog hoping to be a darling but investors aren't sure, sue. back over to you. >> all right. dom, thank you. >>> joining me at the nyse is abigail. always good to see you. >> you too. >> founder of peak theories and cnbc contributor. hugh johnson, chairman and cio of hugh johnson advisors. ryder is helping us look at some of this year's dogs. there he is. first up is newmonth mining. i hope we're paying this dog, paying him in treats. shares of the gold producer fa

morgan stanley says they are likely to add about 12 million iphone sales for apple next year. that is nothing to be laughed at. thanis really percent more the 150 million units that were sold in 2012. they are upping the amount of market share that they have. certainly with $700 the average price of your iphone, not everyone is going to be able to afford it in china. there are far fewer discounts in china compared to u.s. and u.k. when you go for iphones. everyone won't be able to get access for it at it is increasing apple's market share. ofy will be fifth in terms handset providers in china. back to you. >> thank you so much. caroline hyde. >> ok, the u.s. luxury jeweler tiffany will have to pay swatch almost half a billion dollars after losing a breach of contract case against the swiss watchmaker. david tweed is in berlin with more. tell us the details of the case. a jointes back to venture that was set up between swatch and tiffany in 2007. the idea was that swatch which is the biggest major -- maker of watches in switzerland, it was going to join up with tiffany to produ

morgan stanley tops tesla as the top pick.>> dot-commerce. the cyber shopping numbers are in, they are big. which stocks are the best deals to bag right now? >>> but we do begin with stocks, hoping for nine-straight weeks of gain but facing a familiar faux, rising interest rates. look at the 10-year, as the yield's moved back toward 2.8% yesterday.

morgan stanley has been the best at these and they got out. did it kill their profitability or the fact that they're gone from -- >> but they're a different company from others -- >> for many years they were competing head to head. and jpmorgan, they made sure they've become a bank with a very good corporate finance arm. >> it didn't stop them from losing $6 billion when they were supposed to be hedging. probably one of the reasons they they're getting this volcker rule was because of the whale. >> yeah, if jpmorgan had had better rules in place with better compliance, that stock would be up dramatically. had they had the volcker rule and this guy couldn't be a rogue. but remember, rogues have always been in the business and no law is going to keep a rogue -- articles are all like this is the end of banking. i want to buy every bank stop, first because of the yield curve and second because of the volcker rule. no one wants to write a story saying the banks welcome the volcker rule because maybe legal costs will be high. but morgan stanley embr

morgan stanley and j.p. morgan gave a neutral ratings.is something to weigh in to your decision making as well. back to you. adam: thank you, nicole. lori: so many opinions on twitter today. actually twitter not being treated about. adam: likening it to what they're saying about amazon on twitter. lori: just so negative. adam: amazon stock is actually down right now. lori: oh, my gosh. less talk about the latest in a new developments in the investigations of this weekend's deadly train derailment. crews recovered to data recorders. investigators upington discover what caused the train to fly off the rails literally living for peoppe that and 60 people injured. joining us now live on the scene. >> reporter: good afternoon. yes. crews have been working through the night and into the morning. now into the afternoon working to get those topple over rail cars backed up so that they can get them out of your. it looks like a construction zone for most of the morning. heavy equipment being used. brand new video that we want to put out to show you

it's being run solely by morgan stanley. to you. >> thanks, dom. 2 million unit sale. >> first of all if you look at iep and where this stock has gone from. it makes a lot of sense especially when you consider how aggressive he is looking to be. >> at the beginning of the show, i said, you do want to buy gm because they are selling for the wrong reasons. carl is most likely selling for the right reasons. >> coming up next we are taking you to the front lines of the cyber war. before the conference call he is calling up cramer. all coming up ahead. stay tuned. will power us all... into the future. ♪ easy-to-use platform. no, thank you. we know you're always looking for the best fill price. and walk limit automatically tries to find it for you. just set your start and end price. and let it do its thing. wow, more fan mail. my uncle wanted to say thanks for idea hub. he loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. [ male announcer ] open an account and get a $

morgan stanley said to look for 12 million iphone sales next year.ing because of the deal with china mobile. that is about eight percent up on 2012 sales. overall, it is sort of the final hurdle, piece of the puzzle of how. after losing market share. >> 5%, 6%? >> the biggest provider of handsets in china. it is going to be doing well. apple is moving into its territory as well stop -- as well. paid $450 million by tiffany. they have been embroiled in a legal battle because u.s. jeweler was said activity -- said tiffany and it was supposed to sell watches and that with to share the profits. it was said tiffany did not help much in growing the business. overall, they get $450 million. that is bigger than the annual profit. >> i look at the profit last year. that is eating up the whole profit. >> it really does. >> 10 years. close eye the luxury sector in general. lvmh. product missed eight percent growth from its previous -- prada missed eight percent growth from his previous stop offsetnot managing to the increase. >> what is carney moaning about? >>

they gave the face job to morgan stanley. at&t against 33. this stock has sold off, obviously a nice dividend. there is a lot of now talks into spachls i think anything that comes out headline-wise for at&t would be positive at 33.80. wherever it's trading. >> let's go back to mcdonald's for a second. what makes you think they will turn the corner? >> i think the global comps are pushed higher by asia. i think the parts of their model very interesting are the same places as other people getting growth. sluggish global comps are not something i worry about in the long run. it's been a problem. that's an opportunity to by this stock cheap. >> cnbc by the way the place to turn for the decision beginning at 1:55 eastern time tomorrow. followed by ben bernanke's news conference at 2:30. watch that. time now for fox and drops, big movers of the day a. drop for celgene's. >> it's from 173-ish down to 160. >> i think it's fun. we have seen telesells before. i love the name. >> pop for herbal life up 1%. >> it was up 10 yesterday. so it's a total of 1

. >> kraft gets this upgrade over morgan stanley. good things coming out of productivity and restructuring. >> everything they do is lucky. they worked. should they have worked as well. some of these stocks have done so well in that consumer products group. it has people do this. the economy is never going to do better. they bought kraft, because it is staples. i no longer buy velveeta. >> that's because these are milk-based products and apparently you are all about p.b. >> velveeta is not milk-based. cockroaches and velveeta are both alive. >> i didn't choose a real cheese product. >> cheese whiz. you get that in cheesesteak. >> velveeta is remarkable product. it has been able to withstand pretty much anything. >> you are going to like this one, jim. teen retailer, abercrombie & fitch has struck a new employment agreement with ceo, michael jeffries. >> i am going to buy a lot of stuff and return it immediately, ruin their quarter. >> it takes effect when the current one expires in february. amore simplified performance-based structu

. >> morgan stanley jp morgan. clearly they were early.y a stock that is up 17% in a single day it's dangerous. >> coming up next on "mad money," cramer is serving up fresh ideas. to hear if it can keep your portfolio out of the dog house. all right. thanks to amazon, drones might be headed to your doorstep. leading us into the drone age make the stock a buy? that trade up next. ♪ [ male announcer ] this december, experience the gift of true artistry and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection. with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. >> in case you >

for seven years she worked on wall street as a computer programmer and morgan stanley, merrill lynch,tsche bank. she later got involved with occupy wall street and is not the medications director at the other 98%. welcome back. talk about your recommendations for what these bankers should do for their bonuses. a guest on the she said 10 million people were displaced during the foreclosure crisis, often due to predatory loans, mortgages that were sold that had rates that were bait and switch rates. our suggestion is simply that they should take this money and do something about the lack of affordable housing, which we think is a problem they caused because they've essentially thrown so many people wrongfully out of their homes. we had a proposal to take $60 billion unfunded something called the national housing trust fund for two years. this program was created by george bush in 2008. it is funded at already billion dollars for 10 years could and homeless -- funded at $30 billion for 10 years could end homelessness. we are saying wall street to take $60 billion at a bonuses and help ge

morgan stanley likes it, but not as much as the peers. shares went to $127.68. comcast testing technology that puts more commercials into on-demand tv shows. they help to generate revenue off the old shows that viewers watch. comcast is the parent of cnbc. the share's were down one and a half percent to 12.41%. >>> and inflight go-go receiving go-go ahead, installing the technology on boeing 747 aircraft. they plan to have internet access on the plane by the first quarter of next year. the news sent shares flying up to $31.31. and investors soured on shares of krispy kreme ahead of the company's earnings reports. then when the report came out they sold even more, the company's forecast for the upcoming fiscal year was not as light and fluffy as the investors hoped. the stock ended the regular session down more than 3% to $24.55. >>> and mexico is getting closer to amending its constitution to allow foreign investment in the nation's oil industry, that would be for the first time in 75 years. and as michelle cabrera tells us, it would provide new opportunities fo

you can adjust for that with slightly higher prices. >> we have david darst from morgan stanley.>> the manufacturing wage is $2.60 an hour. it's come up from 20 cents an hour 20 years ago. it's 2.60 and mexico's 2.50. they're 10 cents below now, china. how does one -- how does one price minimum wages in a more increasingly globalized market for employees? >> well, that's a silly argument, i'm sorry. we're substantially more productive than china or mexico our workers. we have industrialized economies that pay in substantially higher wages, especially manufacturing and u.s. manufacturing and they're still competitive germany, for instance. productivity is the key factor that matters. and what we know from recent research or past research or minimum wage is that higher minimum wages, reduced labor turnover in some key industries can ultimately lead to higher productivity growth. it's over time -- >> the service industry -- >> a lot of the stuff -- let me finish, a lot of the stuff, a lot of the industries we're talking about fast food, health care, and others where a lot of minimum

a note out from mark devin, from morgan stanley, who has a theme on the stock. he has talked about many of the different names in this sort of a category, and right on pandora. i think he's right on groupon, as well. yesterday, over 60,000 options traded, 57,000 calls going for the december, 10s and 11s calls, and a huge growth. a lot coming from the mobile side. he said 15 by 2015, and i think he's right. i'm in the options now. >> costco reporting earnings below estimates, hurt by weaker foreign currencies. murph, the stock is flat on the day, working its way back that way. >> absolutely. the earnings kind of came in inline like we expected, but like we discussed yesterday, costco was fully priced up in the mid-120s, so here around 120, i wouldn't be a buyer of the stock. the stock was fine. but still, not enough to support a stock up in the mid-120s, a buyer in the low 100s. >> big runs this year for rental car stocks, avis and hertz, up 86% and 52% respectively. simon baker, what do you do with these names? most of the money off the table? >> you keep on rid

morgan stanley upgraded the stock today. i would buy this one. there aren't many stocks that are down this year. it's possible you can see selling right into the end of the year. i think the best course here is buy some frank's on a weakness. third buyable ipo, oh, i like this one, norwegian cruise line holdings. that's nclh. norwegian came public in january. soared 35% in the first day of trailing. rallying another 6.7% in the after market. this is the third largest cruise line, unlike the two giants carnival and royal, they're a real growth company. they have 12 ship, three more vessels in the pipe that will grow 40% over the next few years. norwegian is the best ornt in the industry with the highest margins, highest net revenue, which is key. plus, the company has been cleaning up its balance sheet and only selling for 19 times next year's earnings. it has 40% long-term growth rate. now norwegian cruise tonight announced the secondary after the close. i think you should put in for some shares. i think you're going get this one as a discounted

morgan stanley predicting flattish guidance. overall wells fargo expects an extended period of low farmer buying powers. farmers come to the realization that crop prices will not return to the super cycle high levels. you don't say. it has an underperform on both deer and adco. says farmers have bought their big equipment for now. quote, we see little pent up demand. could be a good year for smaller equipment. and, in fact, the biggest jump in sales last month was for tractors under 40 horsepower. by the way, barclay's points out more than half of deer sales is smaller in equipment. credit suisse met with deer management and confident deer can stay ahead of the turn, positive tail winds in small equipment and a bounce back in construction. >> under 40 horsepower. that's not a deer, that's a fawn. that's a tiny tractor. >> not a five-point buck. i don't know. >> thanks very much. no good deed goes unpunished. why so many are so upset with santa claus in canada. that's just ahead. plus -- >> all week on "power lunch," the top five

shares of tesla jumping on a positive note out of morgan stanley.jones saying the model s fires while disruptive not materially damage tesla's business. it's their top pick in the automaker sector. what do you think? is tesla a buy? on the technicals, do you agree with morgan stanley, tesla's a buy? >> you know, it all depends on what price you're starting from. >> at this price. >> right. you know -- >> don't be snarky, that's my job. >> i'm on fire in anticipation talking about tesla. there's my brian for you. the thing with analysts, be careful where they start from, right. he's had a 153 call on this prior to his call that this is going to be his top pick for 2014 in the auto sector. granted this guy will know more about the auto sector than i'll ever find out in my lifetime but he's way smarter than me but i will tell you this about analysts be careful about what they say. you have to know where they've been previously too get an understanding of what they're talking about now. that's what's going on with tesla. the price had fallen so far belo

i mean morgan stanley was saying 2.6 to 2.9% on the 10-year yield is pricing in a move december or january. >> what's happening to the short rate and the answer is absolutely nothing. that's the thing that gives the fed leeway. talk about crisis over and these people which i think they are raising their hands clapping but hands up for bread, i don't know. a budget deal in d.c. as we said. a big deal for the fed in terms of getting that fiscal uncertainty out of the way. taper beginning is a sign of normalization but folks, don't get too excited on that. a very long way to go. the volcker rule in place. replacing one uncertainty the bigger when igs this going to happen, is it going to happen with the smaller uncertainties, 800 pages with what does this mean for banking, lending, the macro economy. now don't get too excited about this either. mortgage debt rising, diana olick our ace housing reporter points out that's because of fewer foreclosures out there. that means that. but still normalizing and flat and not declining anymore. government out of gm. call this the tail bone of t.a.r.p., t

morgan stanley 3% less. citi paid its people 2% less, across the entire company.cused on here is the investment bank. bonuses aren't decided until the fourth quarter with many scheduled to meet this week and next to figure out who gets what piece of the pie. most executives say it's going to be flat to down and that echos the estimates of compensation consultants, johnson and company with the report out last month. the key number that analysts watch is compensation as a percentage of revenue. banks main assets are people, so it's normal for the largest portion of their expenses to be salaries and bonuses. even that's been slipping too. down at most major investment banks and last quarter, jpmorgan's legal costs outstripped compensation for the first time for any of these banks. there's one corner of these companies where pay is almost sure to rise if a big way and that's asset management. >> asset management. high net worth clients pouring their money into the market with a stock market on a tear. if you're elsewhere in a bank tbd. >> it's reliable business that c

morgan, goldman sachs, morgan stanley, to a lesser degree, and citigroup would be affected. and virtually all the other banks in the united states would not be affected. if, however, they choose to put something in there concerning hedging then the top 100 banks in the united states would be affected and would be affected pretty negatively. >> so explain to us that aspect of hedging because there has been a lot of complaints about that. how does that put these banks at a disadvantage? >> well, it doesn't put the banks at a disadvantage, it puts the customers at a disadvantage. it basically takes away from the customer the ability to lock in an interest rate or to lock in what the cost of a foreign exchange transaction would be. and therefore, it causes less activity in the banking industry, and it causes less trading. but remember, the person who gets impacted by this most is not the bank. it is the person who does business with the bank. >> i was speaking last week with one top banker who said that we like to carry in our inventory lots of stocks, lots of bonds because that

the head of municipal strategy and research at morgan stanley, morgan stanley says 80% of the 570 municipal bond funds tracked by morningstar had exposure to pr. i want to point out you were at fitch. you say people should not be too upset? should moody's or fitch downgrade porter regard to junk status. >> pr is important to the market and is when we held, that being said what happened in puerto rico doesn't tell us about what is happening in municipal credit more broadly. and a positive outlook and therefore any extra market volatility caused by puerto rico downgrade creates more buying opportunity and sell signal. >> that comes much later and a good time after the downgrade. we are watching the outflows from municipal-bond funds and u.s. households, mom and dads who hold municipal-bonds down to $1.64 trillion in the third quarter so the retail investor doesn't want to buy these things. when would the opportunity to buy come? >> in general for the muni market the best opportunity is to wade through the expected interest rate rides we see over the next couple quarters and outside sensitivit

global stock markets are up about 10% this year, the morgan stanley equity index is at its highest level since the financial crisis began back in 2007. when you break down the numbers, though, the statistics are amazing, japan was the best performing market, up a stunning 57%, the strongest increase since 1972, and stocks here in the u.s. performed remarkably well, as well, the dow is on track to post a gain of 25%, and the s&p did even better, up until 30%. as for today, the blue chip average hit another record and closed at another milestone, 16,504, the nasdaq lost two, and the s&p was down a fraction. in the bond market, the ten-year yield closed at 2.89%. david kelly is predicting another strong year for u.s. stocks but says the best opportunities will be in europe. he is chief global strategist at j.p. morgan. >>> glad to be here. >> so david, tell us why europe? we still see headlines out of europe making investors concerned. why do you think it is where we can have the best opportunities? >> well, of course, that is the case, the best time to invest is when people are really worr

morgan stanley is eyeing tesla. the stock is number one on the bank's list of top rated u.s. auto stocks.shares closed at 144 dollars yesterday. new details are emerging following a train crash that killed four people in new york early this week. the train's conductor tells investigators he "lost focus" and went into highway hipnosis before the train jumped the tracks. an investigation by the national transportation safety board is underway. officials confirmed the train was speeding at 82 miles an hour in a 30 mile per hour zone. the investigation could take weeks or even months. now that healthcare dot gov can handle the traffic, president obama is launching a public information -- and relations -- blitz to promote participation in the health insurance exchanges. the president held an event at the white house yesterday in an effort to shift national focus towards the benefits of the new law and away from the rocky rollout of the site. republicans continue a campaign against the affordable care act. house speaker boehner calling it a government-centered health care delivery

former cfo is a former investment banker at morgan stanley, has done a great job in the cfo position. new leadership at gm. on facebook take a quick look at what some people are saying out there. a woman in charge, that makes me happy, says one woman. famously started at gm, and her dad worked for pontiac for 29 years. from the factory floor to the corner office, that is the way it should be. and that is kind of nice. we like with somebody works their way up through the corporate ranks, especially when it is a woman. lori: nobody really saw her assignment coming. really a surprise to so many people. jeff: there were more high-profile candidates, who will stay on the board but will basically be out. i talked to somebody at gm today who said it is a little bit like obama. he sounds really good, but could use a little bit more seasoning. other people think this is a really solid choicee adam: let's get into real numbers here. general motors number one car sales, but then we have one vehicle in the top 10 selling vehicles in north america. for gm, it is a truck, the silverado. can she tur

. >> morgan stanley thinks is only a mouse to about 12 million iphone sales per year.hat sounds like a very small fraction of the 250 million you are talking about. why are people scaling the numbers back? >> i think it will be higher than that. that is still about 5 million phones per quarter for apple. 20% or decent bump of 25% to their sales. it is a good number for apple. it's a growth market for them. >> 25% bump in sales translates to what in earnings? >> i do not know, but it is a high-margin product. it is probably 35% margin for them. productreat part it -- for them to have in china. >> people think of apple is a computer company that sells phones and tablets. it has become a villain and tablet company that sells a itll number of computers -- has become a phone and tablet company that sold a small number of computers. it would have been better for them to have done this deal a year ago because this is less surprising than christmas. coryie johnson, -- johnson, it has taken some time. what has held up the ability to get the deal done? >> there are technological

morgan and morgan stanley have something to celebrate this holiday season.gan plans to boost bonuses for investment bankers while morgan stanley will increase the cash payout of year end bonuses. it's not such a merry christmas the nation's retailers this year just right deep discounts. fewer americans when shopping in the last week in u.s. store sales have plummeted 21% and retail sales dropped three percent. private equity firm kkr raise 1.5 million dollars for its first real estate fund. it will spend most of the money in north america. targetpany said it will robbery level and debt and sizable business real estate holdings. about $31 stock rose per share yesterday, breaking above its ipo price for the first time since 2007 which is the year the firm went public. for more on his rebound, i'm joined by julie hyman. it's been kind of a rebound for private equity in general? >> it has been, for everything. it's been a rebound for ipo's. when blackstone became public, it suffered from not the best timing. it was 2007 and the stock did not close above $31 yest

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joining us, david darst from morgan stanley wealth management.e become among the bulls for next year. >> that's right. we're expecting a multiple of 16.4 times. one expansion point in the multiple times 122.90. that leaves 2,014 at the end of 2014. >> how clever. how clever. >> that would be 11.4% up from here, from here. in price terms only. not the dividend. >> i got it. today, very good jobs report any way you looked at it. if that keeps happening, the fed is likely to taper sooner rather than later. does that change your scenario to some degree? >> a sign of health. you want to see normalization of interest rates to show that the patient is leaving the hospital under its own power. so, we see this as a good development. it would be wonderful if they could start the tapering in december. december 17th, 18th. or january 28th, 29th meeting, bill. it's a good sign to us. >> it would also likely mean a rise in long-term interest rates. i mean, today we got to 29 -- 2.93 or something on the ten-year. that doesn't seem to bother the stock market. wh

morgan stanley, over 2,000, a couple others are the same way. this could be a good year for the s&p 500 if they're right. >> dom chu, thank you very much. and happy holidays to you. >> same to you guys. >> you bet. >>> and while stocks took off, the economy plodded along but showed some sign s of improvement. jobs are created and the unemployment rate is coming down although still sitting at 7%. the consumer seems to be spending more and the federal reserve feel things are getting better and started to pull back on its bond-buying program. steve liesman and hampton pierce have been our go-to guys. steve, let's begin with you. we had the fed last week announce that taper. and fed chairman bernanke, the kind that he announced the cutbacks, he said the economy is healthier and that the job market is improving. what is your take? how healthy is the economy right now? >> well, what seems to have happened is this nice revision upwards to the fourth quarter after a very strong third quarter. we're going to probably average 3% growth in the second half,

equity strategist at morgan stanley and how he is setting up for next year. 2014 essay we have high oil but we don't want to buy energy stocks. we downgraded industrials that outperformed. we think the best way to get some -- cyclical exposure is with chemicals. >> you think that's a better way to play it? >> if oil goes higher, i don't think it will be because of demand, it will be because of fear of supply. that does not bode well for energy stocks. the way to play high oil is with chemicals. >> at least cheap gas. oil supply does not seem to be a problem. >> i think it's if you worry about something about fear in the middle east. that's bad for energy stocks and good for chemicals. >> you are increasing allocations and technology by a little bit. it still above where it was in the benchmark? how are you changing your tech calls for next year? >> we have company specifics that seem to matter more for us picking stocks but we don't have much dispersion. bet, you have to make a bigger one, more concentrated. we are betting on software. the reason is i don't t

this comes from morgan stanley analyst to pick the trade about a month ago who said that if you investigate the language within the overall giant capital structure, it sure looks like the second lien debt seems to have stronger language for covering investors than the first one. normally when you have a bankruptcy, the first one gets paid first, second second, and so on, but it looks like you're the language makes such a difference. >> as you pointed out, this is basically the opposite of how things usually work. have you seen this before? like there are other examples where this has happened, it always behooves investors to read the documents and know the language, it is something like this where it can make a big difference. >> does it show how desperate these distressed investors are before we close the books on 2013? >> it has been hard to find good deals. there is not a lot going on. he does this deal is so massive, everyone has a piece and you have to do your homework and pick through everything, but this one quirk means that you can pick up a bit more. >> there is a lot of distressed

>> morgan stanley says this could add 12 million iphone sales for apple in 2014. that is about an eight percent increase on the amount of iphones they sold in 2012. they sold 150 million. the entire amount that china mobile has as its customer base? the cousin it is so expensive. generally, anch, iphone will cost you in china. there are less subsidies in china and far less discounts. generally, only a smaller portion of the chinese population will be able to put up that kind of cash. still, more units being sold. >> they have got to make this work, apple and china mobile seeing growth slowing. this could be just the pick me up they need. >> in china, apple is the fifth biggest handset provider in the country. well behind the likes of samsung, lenovo. they see their market share being eaten into across the globe. saturation when it comes to the higher-priced smartphones. in the fourth quarter of 2013, apple is expecting single-digit growth in sales. the first time we have seen such slow growth since 2008. we know that iphones are particularly profitable for apple.