Skip to main content

tv   Closing Bell  CNBC  June 4, 2012 3:00pm-4:00pm EDT

3:00 pm
>> hi everybody, happy monday. welcome to the "closing bell." i'm maria bartiromo with the new york stock exchange. we are kicking off the week with rel volatility, bill. >> yeah, we are not sure which way it is turning. bulls looking to get the final word as stocks erase midday losses for a time led by technology and commodity related stocks. the dow is down 83 points. but now stocks have been fighting to avoid a four-day losing streak. looks like we are losing it right now. here is what happened around midday there at the low point is when word was getting out that the g7 will hold a conference call tomorrow on the eurozone debt crisis and the market came back, turned positive but now we are losing that momentum right now. dow is down. nasdaq, a gain of just over 3 points at 2751.
3:01 pm
s&p 500 down after having turned positive moments ago at 1276 and change. it would appear that market was trying to take comfort from the idea that g7 would be meeting tomorrow. maybe they are hoping the calvary can come to the rescue in some form. but what can they possibly do right new that would make any material difference to the markets? >> it is a positive we aren't seeing significant follow through from friday. we add rough day on friday with those jobs. now we turn to europe and we want to see a focus there. on friday afternoon, one negative in that market action when we saw more than 24u7b point is the fact we didn't have any support in that final 30 minute ever trading, no support in terms of buying coming in and we are seeing that this morning which is this morning and this afternoon which is a positive. >> so you wonder with today's market, is a time to put money to work or is cash a better bet right now. joining us, we have both sides of that argument in today's closing bell exchange plus pain
3:02 pm
in spain flares again and the banking system needs help. >> we have our own michelle crewsa cabrera with us and danielle hughes with divine capital. good to see you all. thanks for joining us. it is amazing that here we are, approaching the first half of the year. what do you see happening for the second half? give us the catalyst. >> a tumultuous summer. we need to have an incredible amount of global push, i think, toward some kind of reconciliation on that front. because if we don't have that, we're not going to have the tradeable bounce that we need. and i think that if you take that to this market, we could see some trade built in gold has been beating up tremendously, oil, oil stocks have been beaten up. i would also look at some of the capital goods, markets as well. >> michelle, you and i were talking about this earlier in the news involving camry. i think we realize the solution is there somewhere. the ec, eu officials are
3:03 pm
circling around it but no one want it acknowledge what it will take to get this thing sold because it will effect each of their country's sovereignty, right? >> yes. i think the way it oversimplify the situation is that we will talk more or less about europe. every time europe talks about integrating more, i think you will see an improvement in the markets. if it suggests less integration, you will see a down fall in the markets. it'll be i think extremely volatile. we just saw that today. this morning, one of the leaders says well, maybe we would be open to the esm injecting money directly into banks instead of giving it to governments. oh, spanish index rose 2% just on that one statement. now the germans, you know what they will say, uh-huh, least not for now. >> michael, how you are vested going into these uncertainties.
3:04 pm
>> well you know i own gold stocks, other commodities here. we are on the precipice of other -- it'll be towards the end of the year. gdp will have a zero handle very soon. so i think unless the central bank will sit back and watch deflationary depression, from europe to japan to the united states, they will have to do something. i think that something will be more money printing that will bring you back into the stagflation that we had at the end of the year. >> it will be before the end of the month. >> steve did a great survey. >> we will show that. >> no one expected quantitative easing. now we have one report that somehow is price need the market. i just don't get it. look at the price into the oil. now it is in the 80s for west texas. copper, $4 a pound, now 3.20 a
3:05 pm
pound. i don't know how it is priced into the markets. >> that's true. is this an indication that china is slowing down more than anyone thought and the demand is drying up? >> it could be. but don't forget the dollar has been on the rise too. we have seen commodities fall off the table. i think it is great for american manufacturers and export, when those costs go down dramatically, they are able to find some more margin. and that's what we really need to see. >> a dollar is not going down because the federal reserve didn't, the dollar is going down because of the collapse in the eurozone. when is it going to be bad, what's going on with the dollar, what is going on with commodities. it is signaling the deflation depression that we are finding ourselves headed towards. >> you don't think the price of oil bill is a positive for this market. that's like the only positive i see out there. >> when is it just bad? >> lately oil worked in lock step with our stock market. it has been a leader in this
3:06 pm
market. so you don't have that inner relationship that you used to have here. >> it is respond together contraction and growth rate of the money supply which is caused from the increase in the dollar and the fact that the ltra and on the part of the federal reserve is on hiatus. >> maybe until the end of the month. >> we will talk about this day on the markets, not as ugly as friday of course. but not the bounce back that perhaps some would be looking for. mandy drurry is at the realtime exchange. mandy? >> you have been looking at macro pictures. let's get micro with individual sectors and stocks. today in the market, we are seeing financials as efded by the kbw index. is one of the sectors taking the brunt. it wouldn't take too much more before we are in bear market territory. you can see on this chat, we have come all the way down, about 16% since that peak. of course 20% to the down side
3:07 pm
would be officially a bear market. as for morgan stanley, plucked this one out particularly because that stock is now down about 40% since that peak in march and it is now treated like a junk rated company bit bond markets as well. and because it is monday, let's take a look at sales. slightly weaker here. it is going to buy buddy media which helps big brands manage facebook and twitter pages. this deal is about $689 million and it throws the spotlight on who else in the social media marketing space is next going to be gobbled up. especially as this follows our ek by zigs last week, oracle today slightly higher. as for verizon, offering buyouts to about 1700 people. that's nearly 1% of the work force. the market taking this well because the traditional phone business is suffering, it is looking to cut cost. and wal-mart is in the news a lot lately. not always for the right
3:08 pm
reasons, but stock is doing well. a board room shakeup does not look likely. as we've seen fall out from the mexican bribery scandal. the stock is higher today. elsewhere, young brand is a company we're watching and going to the down side. not hugely so, but nonetheless, raymond james down rated yum brands on sales going down and china has been forumy things like kfc, a big market. >> we have breaking news from the market flash. let's get to jackie deangela, over to you jack. >> a 52-week low today. analyst are questioning the plan announce et on fried to unload pension liability. shares are down about 4.5% now, rebounding a bit so at $21. 19 is the 52-week low.
3:09 pm
stock lost a third of its value from the ipo price of 33. that's in november 2010. maria? >> jackie, thank you. 15 minutes before the closing bell sounds for the day. this market is back and forth all day. 30 point right now on the dow industrial. >> stick around. stocks are lower in the final hour and we are just getting start on this "closing bell" for monday. >> will expectations become a reality? steve reeceman and rick san telly go toe to toe next. >> what running any kind of responsible financial operation with the opportunity to borrow money at a rate of 2.5% for 30 years wouldn't be taking more advantage ever that opportunity? >> with wo the government be crazy not to borrow more money at historically low rates? or would that speed up a fall off the fiscal cliff? we want to know what you think. can we solve our economic problems by borrowing more
3:10 pm
money? we tweet us at cnbc closingbell. sr that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. but when i was diagnosed with prostate cancer... i needed a coach. our doctor was great, but with so many tough decisions i felt lost. unitedhealthcare offered us a specially trained rn who helped us weigh and understand all our options. for me cancer was as scary as a fastball is to some of these kids. but my coach had hit that pitch before. turning data into useful answers. we're 78,000 people looking out for 70 million americans. that's health in numbers. unitedhealthcare.
3:11 pm
how math and science kind of makes the world work. in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies.
3:12 pm
3:13 pm
we had terrible jobs numbers on friday. will this make it more likely that the they will step in to boost the economy. it seems more and more economists think so. steve reisman has the results of our snap survey. steve, what do you think? >> what we asked people over the weekend end we had economist, fund managers, strategists and we asked the market what they are looking for and they are look fog fed claireman ben bernanke and the fed to come in with more easing to boost a sagging economy. in the wake of the week jobs report, 58% believe the federal conduct asset purchases to lower interest rate in the next 12 months. that would create just 33% who thought so in our april survey. this isn't about the affect of fed policy widespread. the market does not think the feds will take long to act.
3:14 pm
42% of who say the fed will act say it will happen in june. 44% say july. asked what else the drive down yields. 42% think it'll extend operation twist with long dated treasuries and short dated paper on its balance. that's up 25% in april. only 24% think it'll do nothing back in april. 42% thought so. they look for $450 billion. that's pretty much unchanged from the market survey in april. >> good stuff, steve, thanks. >> stay with us there, steve. well bring in your buddy from chicago to react to the findings. you wonder, rick, if they are thinking the fed will do this or hoping the fed will do this right now. >> i would think since it is strategists and economist, that probably hope is one of the dynamics there. i think the question would be, will it help and steve got into that a bit. i personally don't think it would have and pursuant to larry
3:15 pm
summers comments this morning, i remember during the stimulus, it was the shovel-ready phrase that turned out to be the incorrect statement. it seems as though the very low-cost of the drug of credit is giving rise to more back door stimulus in the form of, you know, military programs, let's pull them forward. in my opinion, we still have a spending issue and the fact that credit is so cheap, i agree with the one notion steve talked about, about a half hour ago and we all chaer cheered him for it. do the same thing homeowners do and renie nance your debt to a longer tomorrow, but only to reduce debt. only to reduce debt. >> steve? >> have a new phrase. qe is quantitative easing. ge is gratuitous easing. i think that would be the case if feds came in with interest rates of 1.5%. economists are saying, what good would it do? what are you trying to do here?
3:16 pm
it is a weird thing that when trying to do less maintains concerns. probably bringing down interest rates. that may be a better world, a better outcome. particularly if we chug along at 2% and possibly higher rates. i'm not opposed to the idea of the government exploring the idea of more investments. things like roads, opening up value in real estate. not entirely impossible for the government to make investments but i would say in the first order we should look at refying, taking out things, extending terms. if the world wants to give us money, we should take it to the extent that it benefits us on a fiscal basis. >> how about just extending the spending programs and bush tax cuts so we don't face this fiscal cliff, sleeve? >> i think that's a good idea but it has to come with a plan. it has to show some political backbone where people can get together and say, okay, here we go. and here is the plan for the next ten years to bring it down. the mark set giving us rope. let's use the rope to save ourselves rather than to hang
3:17 pm
ourselves. >> maria, don't you find it just insane that we have no idea year to year for the last several years, what the income tax rate is going to be, what fees for future healthcare are going to be. and i think many just have looked at the first stimulus and believed that we have elections coming up. it is not that building some roads is a bad idea, but i think that the general taxpayer has real mistrust that the government can pull these programs off without significant -- >> i agree with that. i think we should be -- i argued this two or three years ago that what the obama administration wanted to do, if it wanted to spend money is that if it has efficacy and smart small and build bigger, but the idea if you ask the average american, does government spending do any good, does government do any good and the answer is no, is bad for the economy, bad for the country because one of the things i know rick having travel aid broad, is in fact one of the things that separates this country from other countries, is our government.
3:18 pm
and our ability to do things and a big problem is that nobody believes in it any more. >> good point, guys. >> thank you, good stuff. they were actually civil to each other. that was nice. >> steve and rick, thank you guys? >> heading toward the close with about 45 minutes to go. the dow down about 45 points. >> we have troubling headlines. both about j.p. morgan and bank of america. are they enough to keep you away from the stocks, if the price is right? we are talking numbers on financials. big banks, next. >> also, ahead, barclays thinks capitals are heading low from here. berry nap will tell us how low he thinks they will go. stay tuned. [ male announcer ] this... is the at&t network.
3:19 pm
a living, breathing intelligence teaching data how to do more for business. [ beeping ] in here, data knows what to do. because the network finds it and tailors it across all the right points, automating all the right actions, to bring all the right results. [ whirring and beeping ] it's the at&t network -- doing more with data to help business do more for customers. ♪
3:20 pm
♪ to help business ♪ here we are, me and you s. ♪ on the road ♪ and we know that it goes on and on ♪ [ female announcer ] you're the boss of your life. in charge of making memories and keeping promises. ask your financial professional how lincoln financial can help you take charge of your future. ♪ ♪ oh, oh, all the way ♪ oh, oh
3:21 pm
close today. sharon will look at the imax story. >> when we saw the euro rally to the 125 level and then oil prices followed suit and we got above $84 a barrel, we had seen wti futures hit the handle in the session and of course there's a still a great deal of concern about europe and we got services pmi data out of china. that is not so great. but there's been such a strong sell off here in the oil market with the wti features down 25 bucks in a month. this is snapping a fur day losing streak but some are skeptical about whether or not this is truly a bottom here. it may be a value air airy, som,
3:22 pm
but we could still see a negative bias and that negative bias could take prices down to the $75 level perhaps. so we are still just waiting to see what happens on wednesday with ecb meeting and what happens on thursday with bernanke's congressional testimony. that will give us a a good idea about quantitative easing and what will happen there and this that could give us a better indication of oil, other commodities, gold in particular. >> we are looking at financials right now. bank stocks once again taking a hit. beating again today with separate reports. one o on bank of america, other on j.p. morgan. apparently executives failing to disclose important information about merrill lynch's mortgage losses when that acquisition took place. then j.p. morgan reporting that big trading loss. a report that they ignored warnings from an investment group. bad news, but what are the stocks looking like? of course they lost an enormous
3:23 pm
amount of value. we are talking technicals on j.p. morgan and bank of america. carter worth is with me. he is the chief market technician at oppenheimer. we have paul miller covering for fb capital markets. gentlemen, good to have you on with us. let's look at fundamentals first. should investors be worried about the headlines out of bank of america? >> i think bank of america is well known that merrill lynch deal was done very loppy and we are not sure that merrill lynch had all of the numbers out there. i don't think that's a big surprise to anybody with the merrill lynch stuff. but why the stocks are trading down is not so much the big news, but the curve sitting around 150, that's going to weigh on these names big time and that's what i think is driving these names down today more than anything else. >> and they already have of course driven these names down. given the level of yield, very tough to make money. let's look at technicals carter.
3:24 pm
what does the chart tell you right now? >> very weak today and weak since the market peaked in early april. the weakness is a simply a reaction to the great preceding strength. financials are so strong in q1, up almost a hundred percent or more so moving from 5 to 10, perfectly normal on the way to have a third give back, back to seven. so we would say that th is down to support. >> you want it put money right here. >> right. meaning weakness is a reaction to the grate preceding strength. double and perfectly entitled to pull back after doubling in q1. >> it is really similar circumstan circumstances, but not quite as extreme. so you have a great, great run of 50% or thereabouts in q1 and here too this 30% give back is reaction and same instance, it leaves you on something of a trend line. so we would take advantage of the weakness to put money to work. >> you want it put money to work. >> on the technical side, carter is a buyer. let's talk about fundamentals on j.p. morgan. should we worry about when this ends. a lot of expectations, $2 billion is just the beginning. could go up to 5, if not 8.
3:25 pm
>> it could go to 5 and 8. that's not why this stock is trading down. it is trading down because how much of those earnings were in those numbers and in '11 and '10. if you start aik taking out 20 of their earnings into the future, you are looking at a company making 4 or $5, not 6 or dlb 7. until we get better answers of what happened, until we get better answers on what core numbers of j.p. morgan is, i'm still on the side lines. this thing will probably trade lower. >> are you a seller here? >> you know, we're market performer at this level right now. it is probably getting interesting, but we still think it will go lower. >> okay, all right, paul, carter, thank you so much. bill, over to you. >> we are doing the slow roll south. dow down about 44 points right now with about 35 minutes left in the trading day. he's been one of the biggest bears on wall street this year
3:26 pm
and he's been dead on the money on morgan stanley's adam parker lays out the current strategy for making money in this environment. plus our twitter question of the day. do you think we can solve our economic problem by borrowing more money, as suggested this morning by larry summers. you will hear it later in the show. we will debate it. we want to hear what you think about that. so tweet us and we will show your responses later in the program here. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus - i can custom build my own screens tdd# 1-800-345-2550 or use predefined ones. tdd# 1-800-345-2550 and i can trade wherever i want, tdd# 1-800-345-2550 whenever i want. tdd# 1-800-345-2550 the kicker? tdd# 1-800-345-2550 i pay $8.95 a trade. tdd# 1-800-345-2550 that's a deal in any language. tdd# 1-800-345-2550 open an account tdd# 1-800-345-2550 and trade up to 6 months tdd# 1-800-345-2550 commission-free. tdd# 1-800-345-2550 call 1-866-393-6174.
3:27 pm
he doesn't look like a heart attack patient. i was teaching a martial arts class and it hit me. we get to the emergency room... and then...and then they just wheeled him away. i had to come to that realization that "wow, i am having a heart attack." i can't punch this away. i'm on a bayer aspirin regimen. [ male announcer ] aspirin is not appropriate for everyone. so be sure to talk to you doctor before you begin an aspirin regimen. i'm a fighter and nowadays i don't have that fear. [ male announcer ] learn how to protect your heart at i am proheart on facebook. what ? customers didn't like it. so why do banks do it ? hello ? hello ?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello ? ally bank. no nonsense. just people sense.
3:28 pm
3:29 pm
welcome back, we're in the final stretch here. the dow is heading south once again, decline of about 30 points. mary thompson with a round up of all of the action. >> hey maria, as we head toward to close, about an hour or so, dow is looking perkener, moving above the flat line in large part because of the rebound we saw in oil prices. you heard the report about ten minutes ago with crude oil
3:30 pm
snapping a four-day losing streak. that returned a number of oil stocks later in the session starting around a quarter to 2 to 2:30 eastern time. that helped drive the dow into positive territory. those stocks have come off its best level of the day, as a result, the dow off its best levels of the day. >> stocks are back to below two-day moving after wrath and many averages, back causing lows for the year. we have to give props to morgan stanley's adam parker. late last year he was a loan skeptic that this mark woet go higher. he didn't believe there would be a sustained bounce back any time soon either. >> he said the market would go lower. >> he didn't see much of a rally or a reason for much after rally. >> he still his has eyes on s&p 45u7b price target of 1167. s&p right new at 1275. about a hundred point lower. adam joins us now along with danny hughes from divine capital markets. adam, where are we?
3:31 pm
has this market traded down enough for you to feel like there is a buns coming or do you think there is more selling ahead? >> we think the mark set going lower by year-end. at the end of the day with 2013 earnings are at risk in my view. same risk that's been there all along. you have that huge fiscal cliff that got to be resolved and the analyst estimates are $119, that's 13% growth so i know the numbers have to come down. i don't think the market acts great when they are coming down. >> let me get you both to comment on this. i did homework on the yield on the s&p 45u7b 500 dat /* /- 45u index. a right at the peak of the.com boom. the high yield historically at
3:32 pm
the depths of the depression in june of 1932. yielding 2.15%. in your view, danny, does that signal a bottom yet? >> no, not at all. i think we all feel that. we look at numbers that we are seeing right now coming out of corporations and they are doing well but i think like adam said, they have to reset fairly soon. when analyst reset, it is not good for the market. >> when you look at what bill is talking about, dividend and s&p, 55% of the s&p has a higher dividend than the ten-year. >> that's right. >> it is unbelievable. and yet we still see money moving into fixed income and this risk adversity out there. >> i think the key is the estimates, right? if the estimates turn out to be way too high then the market can go down and it makes the road to safety of the bond market for attractive. but i do think the right idea to out perform on a relevant basis is to have stocks that yield way above the ten-year where the yield is safe and there's a number of the stocks. it is a big chunk of the market. >> i know i keep pounding the
3:33 pm
table on this but when dividend taxes go higher, when the bush tax cuts expire, there is a possibility that the dividend tax goes from 15% to 43%. does that change the game and the, you know, do you not want it own dividend payers as a result of that? >> you have been pounding the table about dividends for a long time, maria. so have i. i think the major major companies that we own and have safety in are tremendous right now. 5, 6, 7%. look at@, texas instruments over 3%. however, the risk is on. people want to put their money into something that principle won't go poof. >> i did a big study last week. what we concluded is you don't have to be anticipatory. you don't have to panic, sell stocks inadvance of that. moreover, in the past, once the tax rose, the dividend leaders
3:34 pm
six months later had already caught up. so you might want to sell for a short term -- >> wait a second, if we don't get information until the first quarter of 2013, there will be a major sell off. >> and what kind of stocks outperform, is it's the ones that have higher quality. as you know, that's one of the concerns i have. we won't have a lot of, you know, rainbows and unicorns and lollipops in washington. >> marshmallow world. >> right. >> they did a survey and their feeling is that the it will be higher soon. would that help this market. >> what is going on in europe is not necessarily going to help the fed make a decision yes or no. and really with the euro falling apart at the seams, with everybody running for safety, what the fed does is still not in a vacuum. it is a global perfecti perspec
3:35 pm
that we have to take into account and there are a lot of things globally that we have no bearing on. >> what is the case at all without more policy? whether it is china, europe or the u.s. there's no bull case without policy. i don i don't want to pay when i know there's no bold case without the economy. >> why do you think the economy is slowing down right now. when we came into the beginning of this year within things were looking pretty good and you were not looking pretty good because job growth was stronger, industrial construction was doing pretty well. suddenly, spring time came around and we slowed down. >> the shorter answer is the positive data in january and february was a bit after catch-up from slower times in the fall, a benefit of warmer weather. we think the economy will grow in a low, kind of 2% channel far long time. the longer term answer is, we have mountains of debt everywhere around the world and we have to unwind that and that will weigh on economic rule for
3:36 pm
a long time opinion. >> thank you, both. we are going to ask which sectors he would be based on their dividend yield right now. meantime, jackie deangeles is back at. >> starbucks is coming out saying they will discuss an initiative to strength its core retail business. of course, the question is, is starbucks going to say they will start to sell k-cups in their stores and that's why green mountain is popping as well. green mountain is up after another two and half year low earlier this morning. mar maria? >> you ever been to a starbucks? >> yes, i've been to a starbucks. >> you're going to get me about the stores i'm in. >> there's a starbucks virtually on every corner. when the final stretch here, 0 minutes before the closing bell sounds for the day. a market that is down.
3:37 pm
dow jones down 52 points. worse yeng again, bill. >> yes, it is. our research team did the work, now you get the benefits. we have stocks that may have been dragged lower when they should not have been. >> then it's harder than ever to make money with rates hanging around historic lows. everybody look for a yield. our team on the hunt. after this. >> but first before we go to break, the dividend, which material stock has fallen the most so far this year? alcoa? freeport mcmorian copper and gold or u.s. steel?
3:38 pm
at merrill lynch, we understand the importance of your goals. today, our financial advisors lead from a new position of strength. together with bank of america, they have access to more resources than ever before. a steadfast commitment to help you achieve your financial goals in life. that's the power of the right advisor. that's merrill lynch. this country was built by working people.
3:39 pm
the economy needs manufacturing. machines, tools, people making stuff. companies have to invest in making things. infrastructure, construction, production. we need it now more than ever. chevron's putting more than $8 billion dollars back in the u.s. economy this year. in pipes, cement, steel, jobs, energy. we need to get the wheels turning. i'm proud of that. making real things...
3:40 pm
for real. ...that make a real difference. ♪ just before the broke as break break we asked, which dividend has fallen the most throughout the year? now, the payoff. u.s. steel, which has dropped over 25% year to date. >> look at this, we've got 40:48
3:41 pm
in this program without mentioning facebook until now. and stop me if you've heard this before. one of the biggest losers on nasdaq today. courtney reagan is there with details on that. >> somebody has to break the streak today, bill. take a look at shares of facebo facebook. marking again another new low. the sell is $25 price target, advancers answering back by selling off shares. if you look at zynga, a social gaming maker, very closely associated with facebook, shares se selling off again today. then look at groupon. still we will call it social. all the same at 180-day restriction period has been lifted. so shares again selling off as insiders are now able to move around their shares. bill and maria, back to you. >> thanks so much. while it may not too soon to say facebook should be added to
3:42 pm
the list of value stocks, the data team and our own brian shackman crunched the numbers to see which companies fit that bill, the value bill. dividend yields higher than average of the s&p 500 and revenue growth greater than 20% the last 12 months. >> who made the can cut? who is putting their money to work right now? brian shackman to tell us all about it and value investor of columbia management investor advisors. tell us what you found first. >> just to explain the screen, he can we screen for companies in the s&p 500 below the moving average. like 300 names. then we said which ones were above the dividend average of the s&p. about 144. then we screen for the names that have revenue growth of more than 20% year over year and down to 21 names. now the ones that i really want it highlight and you add great dividend conversation a few minutes go, looking for utilities, defensives, and ppl
3:43 pm
trading below the trading image. there is a flood of money coming into it and revenue growth has much, much outpaced its cohorts. that's one. people are talking about financials that aren't exposed international internationally. it does yield above the average. now caterpillar is one that you see at the bottom of your screen. could be a value trip, bill, because if you think we are getting global weakness, it has huge exposure overseas and china. if you believe you will weaken, it may weaken along with that story. >> so let me ask you about that. have you another screen that you are also adding to all of this and that skreep screen and you say that is companies taking control of their own destinies, what does that mean. >> we are looking for companies with restructuring and perhaps cyclical opportunities where the growth is in front of them. by having those opportunities we
3:44 pm
can see growth rates accelerating from here. so we are also looking at more global companies, you know, inside europe there are great companies that are getting thrown out with the structural concerns. >> like who? >> royal dutch petroleum is a good example. global integrated oil company. a lot of gas exposure outside of the united states and we think their returns will accelerate. another example is glaxosmithkline. we think their pipeline is rebuilding. they have made a lot of restructuring decisions that set the stage. >> i just want to counter guys, in terms of energy, because con co-phillips and exxon came out on my screen. you see energy prices go down and there a good chance of those names will not outperform even a royal dutch overseaes. how do they make more money moving forward? you don't know where the earnings is moving forward when
3:45 pm
we are so opaque in europe and asia. >> exactly. >> we got to go, guys. thank you, brian. good job. with about 15 minutes left on the trade. >> remember my interview last week with james gorman about facebook? and he answered the questions we all wanted answered. remember that day stock had an unusual surge in the last hours of trading and gave it back on friday? you will hear why facebook stock movered that way. you've got the story next. ng ] [ male announcer ] trophies and awards lift you up. but they can also hold you back. unless you ask, what's next? [ zapping ] [ clang ] this is the next level of performance. the next level of innovation. the next rx. the all-new f sport.
3:46 pm
this is the pursuit of perfection.
3:47 pm
3:48 pm
welcome back. facebook under pressure again today. but the stock popped on thursday of last week ahead of my interview with morgan stanley ceo james gorman. his company was the lead underwriter of the ipo out of facebook. our gary kaminsky with insight into why. >> hi, maria, hi, bill. there has been buzz since thursday with the increase in
3:49 pm
volume and obviously the subsequent move with the high before the close. earlier today ways able to present data put together by a gentlemen who joined us right after that interview, maria, on the "closing bell," elliott from hightower. and there was a very significant move higher into the last two market of trading. to put that in some sort of perspective, the day of the ipo traded 573 million shares. then a hundred million as the bar chart shows, significant jump off may 31st, the day we are discussing, until 111 million shares. >> what did the company say about this, gary? >> morgan stanley has given me a response, bill. i did say to them today, that if they don't believe there was any marking up going on, let me know. and here is their response. morgan stanley denies taking any action that pumped up the price of the stock.
3:50 pm
morgan stanley equity traders attribute the move in facebook shares during james gorman's interview on cnbc last week, to the rebalancing of major indices where facebook has a major weighting. i think they mention joining james gorman's interview, that took place after the lock and close. >> it did. >> so i think they mean the two hours prior to. >> we were highlighting that day that the last hour you were going to see a big volume increase over all in the market, which we did. it was up about 30% just in that last hour, because of this global rebalancing that was going on by morgan stanley in their portfolio after which facebook is a part. >> right. not only that but james gorman -- >> just to qualify, bill, it is not morgan stanley, it is mci index, with the quarterly rebalancing. >> i understand. but what is being suggested is that they were doing something specific to facebook, perhaps to
3:51 pm
dress it up ahead of maria's interview with mr. gorman. but this is all part of standard procedure at the end of that month as they were doing rebalancing, can correct? >> and james gorman several times during the interview talked about the positive facebook stock during the day. basically saying look, we are in a volatile situation. let's not look at everyday in the two-week period. let's take a look at this company over the long-term. let's look at it at one year. what you are suggesting is morgan was supporting the stock and in fact pushing it higher on the day we spoke with james gorman. my question to you, gary, is are we not expecting morgan stanley to support this stock? they were the lead underwriter. we knew they were supporting the stock from the get-go. >> that's essentially what what any ipo is, supporting the underwriter from the start.
3:52 pm
so 5.1 million shares of facebook were bought as a result of that being added to that index. so remember, the volume jumped from 57 million the day before. the specific number attributable to facebook 5.1 million. and so, we are able to give some quantifying number to that, again maria, all these issues related to these type of -- these type of issues would really be put to bed. and i understand i'm going to say it again. it is not traditional for an underwriter to ever disclose what they do in the after market. that is their strategy. they can do what they want. but bill maria, we know this is not a normal ipo. all of these issues could be put to bed if morgan stanley told the world, this is what our position is. >> when do they tell you not their position. >> and they don't have to.
3:53 pm
>> all of this speculation is as if they did something wrong. that's not right either. obviously they priced the stock horribly. >> and they are still paying for that. when we come back, i will ask adam parker about the yield on individual sectors of the s&p. >> then the senate hopes to narrow the gender act by voting on the act tomorrow. we will hear from one woman who says this is bad for both business and female workers. stay with us. ge... oahhh! [ male announcer ] it made a big splash with the employees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. ♪ ha ha!
3:54 pm
3:55 pm
like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering, web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account.
3:56 pm
okay, inside the four-minute mark. major averages with the biggest four-day drop now since the end of november. if you're keeping score at home, nasdaq 100, only major index still above the 200 day moving average. i will talk about yields. when the numbers come down as much as they have, you start looking for yields for value in this market. adam parker, we are looking now
3:57 pm
at the highest yielding sectors in the s&p telecom yielding 5%. those are the highest yielders. would you buy some of those right now? >> we would. i like the attractness of that relative to the ten-year. some of the companies i think we regulated utility. select pharmaceuticals. may have pretty safe dividend. >> when you look at the -- go to the next page here, guys, and we will show the lower yielding payers right now, you have -- let's go to the next page. at the bottom you've got energy, you've got technologies, and that's a darling in this market lately. >> i think you've either got to own stocks on the revenue growth side, or some of the safe dividend yielders. the problem on the revenue side is the billable economy slowing and you are seeing a lot of
3:58 pm
evidence that stocks are missing and you do the fundamental work and do revenues right. >> just so reiterate, you don't believe we have ingredient in place for market bounce yet? >> no bull case without more policy. by year end, the stock market will be lower because you are worried about earnings in 13 and why would you pay a high multiple for them now. >> adam, thank you. are you disappointed or what do you make of the fact that we didn't get any kind after bounce from friday's big decline? >> it is disappointing. also the buy-in, really look at that. but the fact we are so close to the 1280 mark in the s&p is a good sign it hasn't collapsed too much. and you see a pocket of oil in here too which is good for the market. >> why is that critical right now? >> because you have to cover, we like to see the short come in here and cover. but at 1280, we know it breaks and can you take off higher back to 13. >> fundamentally looking ahead, have you this g 7 conference
3:59 pm
call. you're rolling your eyes, you're answering my question already. you don't think it will help? >> i don't think it will help. nothing, none of that has growth. there's no growth out 6 all these conference calls, all this qe 1, 2, 3, there is no sustainable growth. at the end of the day, it is just a sugar high. >> we also wait for ben bernanke's testimony, and shouldn't that help. >> he can move market with one sentence. if he comes out with qe 3, it'll give you a sugar high real quick but i think the mark set tired of all these qe3s. >> thank you for stopping by thp. that's the first hour. we will close with a decline of about eight points. not much there but no bounce from the worst day of the market has seen in 2012, which i'm talking about on friday at this point. so the dow down about 8 or 9 points on the cl

176 Views

info Stream Only

Uploaded by TV Archive on