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tv   Street Signs  CNBC  July 5, 2013 2:00pm-3:01pm EDT

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a star spangled street signs. pay no attention to this accent because today we're going to go all american on "street signs," from patriotic stock picks to companies who make everything in the united states. watch out, apple. you're about to meet the biggest threat to your future iwatch. how one ceo went from kick start to best buy shares in one year. we love popcorn and love wine.
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put them together and when have you got? move over, cronut, the cr crook has arrived. >> major averages hit their highest levels in the session and it looks like we'll have the second straight week of gains. josh lipton and the nyse and rick santelli in chicago. first to you, josh. >> blue chips up nearly 100. one dominant theme here today, the rising rates. look at the yield curve, the 2, the 5, the 10 and 30, all hit new 52-week highs. you can see the impact in some of the rate-sensitive sectors and s&p, utilities, the worst performing sector. etr, eex and teg, some of the names on our radar. some of the home builders, lennar and dhi all in the red. itb and home builder etf down
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3%. finally a stronger dollar, saw the dxy pop. check out some of these miners, abx, nem and the gdx, the gold etf, gold miners' etf, down nearly 50% so far this year. scott, back to you. >> thanks so much. rick santelli, over to you. i know rates are getting the conversation of the day but don't forget about that dollar. >> yeah, no, everything is important, and i think the higher rates dollar teaming up is totally lodge call, and i think the response in the marketplace was mostly logical as we move to 23-month highs, which has been about where the ten-year is because our early august calm from 2011 is still a bit higher, closer to 2.77 to 2.80. look at five-year, it's extended more aggressively to a two-year comp of july '11. through-year high in the dollar, so what does it mean? what most people on the floor think at that it means that the fact that we're up 94 on the dow
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is terrific because if you look at the dow futures, it's up about an equal amount. it's up and also 100 off its lows but up on the day. traders think that equity is getting used to higher rates from the market is the most important dynamic to pay attention to. all yours. >> thanks very much, rick santelli. thank you, josh lipton. even though it's a day after independence day, there's really no reason to stop celebrating the good ole usa, right, so let's start with some american stocks. barry james, fund manager of the rainbow fund. great to have you on the show. >> glad to be with you. >> three names for great american stocks that will make us money. >> we hope, can't ever guarantee. that would be kroger, to sorro and mel nat. they are all really cheap, so
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you have insurance and all have really good historical earnings and so why wouldn't you like it and all in nice rights patterns, key components and all buying back shares. each one has its own little story as well. kroger, it's interesting, as we go over the last 18 months, the producer price index has been lower than the consumer price index which means there's a little bit of margin in there for companies that are very retail like kroger, and they can make a little bit of extra profit from that. when you look at tesoro, obviously with the price of energy and especially the price of energy in the united states, looks like it will probably come down, but right now and in the future, and a lot of local production as a refiner and then a marketer of oil products, and nelnet is in that very lucrative area called the financing of education, and they have about 30% of the national market for federal loans to students, and they do lots of other areas as well from tuition and other
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types so each of those very fine, lots of local u.s. income coming into them. >> barry, giving us stock picks, but overall you're conservative on stocks. i'm curious as to why, with the news today on the jobs report which is better than expected and revisions which added jobs to the prior two months, the market is going to get conditioned to higher rate, whether it likes it or not. >> you're right. there are positives out there for the market. it's not all negative. we would just say that the risks are somewhat elevated at this point in time. we've been expecting the last several years that the second half of the year would be going gangbusters, and it did not happen. we don't expect gangbusters this year. the positives that we've had in automobiles are great but the whole other side of the thing, we had manufacturing lose jobs and we're starting to see a slowdown to some extent in the manufacturing area, new orders and some of the other aspects, and primarily it's the export market.
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we've really seen that start to dry up, and that's been a key driver of our economy. so we don't expect huge earnings gains as we go forward. we'd said there's a 60% chance that we'd see a slowdown, and one interesting number, when you look at the quantitative easing, 24% annualized increase in the stock prices when there's quantitative easing and a 7% drop when they cut it. >> right. >> so you've got this conundrum crisis. people trying to figure out where to go, and we're seeing -- i talked to an 82-year-old guy who made 19% in the last 12 months and said that's not enough. he needs malcolm forbes and that's an indication that there's a little too much risk-taking up there. >> at least today finally good news is good news. i want to ask you because we go into earnings season, right, and there seems to be a high level of pessimism, and there's a lot more negative earnings guidance than positive earnings guidance. does that maybe set us up for maybe some upside surprises if we've got that low bar?
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is i would agree with that. companies love to set a very low bar and exceed it, and if they can push those expectations down, that's to be expected. there's just a lot of problems with the changes in taxes and so for forth. that was a negative but a real positive for kchts i know it sounds surprising with sequestration. we did a lot of research and we found earnings go up and stock prices go up after a cut in spending by the u.s. government, and i'm not saying that there's a direct correlation, that's just the history going back to the 1940s, so it could be that companies are feeling a little safer. talked with a couple of corn trucks companies, and they are going gangbusters right now because companies are taking care, and they are finally doing something about w it. >> maybe sequestration fear is being debunked. a question for our steve liesman coming up. thanks for joining us. >> positive headline numbers in the jobs report, mandy, but are we seeing a shift towards more lower paying and part-time jobs? are they the right kind of jobs being added? let's bring in steve liesman and
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william rogers, former economist for the labor department. good to have you with us. bill, how would you characterize today's report? >> a very encouraging report. i mean, you came in well above that 150,000 fresh hold that we talk about that we need in order to begin to draw down the unemployment rate where actually people are getting jobs. you also had i think probably overstated but you saw some tick up in wages, you know. it's all in the report. >> let me ask you this. and i would, i guess, makes reference to on an earnings beat, maybe some people would say it's a good report but the quality of the earnings. was the quality of this report that great in that manufacturing jobs lost, jobs that were added, service sector, so-called lower quality jobs. >> that's right, that's right, and i think this is great. you're starting to have that conversation because, you know, we've been so focused on can we get job creation and now we have to most conversation to job quality, to the fact that we still have what secretary herman and i sort of developed back in
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2000, the real unemployment rate, that you take the official unemployment rate, the 7.6% today but you include the 8.2 million americans working part-time but want to work full-time, and you're still at an unemployment rate that's above 14%, and then the other piece of this in terms of quality, this is june. who is starting to look for jobs in june? i have teenage kids, possibly many of us do. today is one of those days. >> i feel bad calling any job in this market lower quality anyway but the point is they are not higher paying jobs that i think all of us would like to see but to anybody who has been out of work, getting any job at this point is high quality. >> that's true. >> but the reason -- but i want to bring in the teenagers that there is this conversation that the reason why, you know, the unemployment rate is falling, falling because people have been leaving the labor force so earliest guests were talking
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about a portion of that is demographically driven and if you focus on teenagers and why this 180,000, 190,000 is not enough, their unemployment rate going into june, when they are looking for jobs, has been 24%, consistency since the end of the recession, and their participation rates have actually fallen so that's telling me, you know, that you have some people, you know, young, they are eager, but they are challenged. >> do you think it's misplaced to blame obama care for all the part-time jobs, employers wanting only to hire part-timers or maybe even making full-timers part-time? do you think it's fair to blame obama care? >> i don't think so, because the challenges that we've seen that, have driven up the part-time for economic reasons number, that pre-dates the obama care discussion. the big spike in jump in that number was directly related to when we went into recession and it's been hanging at that level. now, over in the next few months, if we continue to see these stronger growth numbers, i expect that number to possibly
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even increase and even also the regular number of people who are searching, that 11.8 million may also increase, especially if the number of people like today get enthused by this report say they want to start to come in the labor force but we can't create jobs fast enough to absorb them. >> going back to the sequestration we were bringing up with barry james a moment ago, steve, looking at this job creation, could you even argue that sequestration has had a net positive effect or can we just say it didn't have the negative effect we were expecting? >> i think there is a negative effect. i think the government spends more and results in fewer jobs. i think what has happened is the private sector has been robust enough to make up for that. if you were sitting there month after month and you were only doing 100,000 jobs and 10,000 or so the government is losing would matter a lot more. on the issue of are these j manp being the second affirmative fense of the opponents of the party in power almost all the time. it ends up being, well, you're
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not creating job, and then they create job, well, you're create low-paying jobs. what we know for a fact is these are the jobs that are being created wand they are the jobs at a salary that people are willing to take, and 90.4% gain in wages, which was an outlier, we don't know if it stays there, but it suggests and some of the gains that we've seen that maybe some better quality jobs are being generated and we need to see inside those sectors where there's job growth, we don't know what the salaries are until three or four years later when you can get that detailed sectoral data on wages. >> i think the way people make this claim about a good chunk of these jobs are lower paying is they will say, compared to the average wage, that's a low wage industry, so it's not 100% direct correlation. >> i know quickly we have to go. how can you reconcile you'll get the see-saw effect with the participation rate and what the
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unemployment rate does? it's difficult to read if you look at that. >> from an investor standpoint, the prize is americans going to work. the participation pate is something that can stay the fed's hand on, but it's not all that relevant to the notion that what you're looking for is the generation of economic active. don't lose focus on people going back to work. >> and we've got another couple of jobs reports before we get to the all important september fomc meeting. if only we had all day to talk about this. >> i don't need all day, just give me ten more minutes. >> on deck, body lotion and loaves of bread and two companies that make 100% of their products here in the good ole usa. the ceo will make their case for keeping all business here in america. >> the pebble eswatch went from kick starter to best buy stores in just one year and we'll talk to the founder of pebble to find out how he did it and why he
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could pose a huge threat to apple. >> look out out, cronut, there's a new kid in town. the flaky facts coming up. ng so! with new phillips' fiber good gummies. they're fruity delicious! just two gummies have 4 grams of fiber! to help support regularity! i want some... [ woman ] hop on over! [ marge ] fithe fun way, from phillips'. [ woman ] hop on over! (announcer) at scottrade, our clto make their money do more.re (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me.
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welcome back. so much for it being a quieter day on the street. given that we've got the jobs report and the day after a hole day, up early, gave it all back and now gotten it all back. at session highs. financials leading the way. there's the s&p 500 which right now is above its 50-day moving
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average of 1624 and change. call it 1625, but if we close above, that that's a technically bullish sign for the stock market as the dow recaptures 15,000 again in the last several. >> indeed. we're feeling really patriotic again. want to focus on two companies making products right here in the usa. what makes america a great place for manufacturing? let's did our guests. great to have you here today. let me start with you, rich. why have you chosen not to outsource and do all of your manufacturing here in the united states? >> well, for one thing, we make a natural organic product so controlling the quality of the ingredient, the quality of the manufacturer, the consistency of it, our customers trust us to do that so for us it's not a choice. we have to manufacture ourselves >> you don't feel you can get that quality assurance if you go offshore. >> not only do we think we can
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get the quality assurance, we won't have the speed to market. we don't think we can have the cost benefits of doing that, and so what we try to do is do as much local as possible, cut down on our footprint, carbon footprint as well. >> when was last time you hired somebody? >> probably this morning, no. this week definitely. every week we're hiring lots of people. >> how do you feel overall about sort of where the employment market is trending? >> well, i guess in our world we're in the food sector and the premium food sector so people are very interested in getting premium foods and we're spending a lot of time growing and adding jobs all the time. we probably added 15 to 20 jobs. >> actually came back from a massive crush from sandy as well? >> we did. hit pretty hard by sandy. had two to three feet of water in our bakery. a tough month, had our operations down. the whole team pulled together and everybody came in and got our bakery back on foet and this year we're up about 25%.
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>> talk about a great news stories. >> what about orders? >> what are you seeing from the customers, the bigger box names that we've all become accustomed to in. >> target, walgreens, walmart, cvs so we've grown from selling products on the street of new york to selling in all these big boxes, and what we're experiencing is a tremendous growth with based on -- and growth in orders based on the fact that we service a customer that has traditionally been underserved with natural products en masse, so we're seeing tremendous growth. probably about 200% this year. >> and you're always researching, right, always looking for rare ingredients, organic ingredients around the world? >> absolutely. >> especially with the movement towards everything organic and looking after your body in a more holistic way, this must be a big growth opportunity for
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you? >> a very big growth opportunity and also very exciting and what it's starting to signify is the restthe marketplace is starting to pay attention to the qualities of natural products and ingredients. very exciting. >> guys, good to talk to you both. >> keep on hire iing. >> coming up next, the smart watch that every company is watching. meet the ceo of pebble and the other side of cronut bubble. and also find out what happens when you mix popcorn and wine coming up on our show. ry... 24 hour. lots of tablets... one pill. you decide. prevent acid with prevacid 24hr. ♪ unh ♪ ♪ hey! ♪ ♪ let's go! ♪ [ male announcer ] you can choose to blend in. ♪
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updating you now on the crisis in egypt. fitch has downgraded egypt one notch. this all comes as clashes broke out in front of the army barracks where ousted president mohamed morsi is believed to be held. morsi supporters were killed when army troops opened fire on a large crowd demanding his reinstate. right now thousands of them are heading for a showdown with military forces near cairo etahrir square. we'll be watching that situation for you very carefully. >> watching oil as well. >> yeah. >> and there's concerns that helped fuel a 6% jump in crude oil over the past two weeks. let's bring in halima croft from
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barclays capital. >> thanks for having me. >> can you give us a reality check of how vulnerable the suez is, and you state of emergency. >> don't think it's very vulnerable. the egyptian military said it's not under a state of emergency. what they are is on high alert. want to close the suez canal. you require the military to close it. the egyptian military is not going to close the suez canal and deprive the world of so much much needed currency. >> where is oil the way it is? >> there is a fear factor. the libyan weapons are floating around all over the reasonableon, and could you have an attack on a vessel docked at port, on foreign workers, so we are watching that situation very closely. >> indeed. i was seeing that actually some libyan outages are also contributing to the price spike, right. the oil terminal being closed down and various other problems
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to do with oil infrastructure there. how much does that have the potential to push up oil prices from here? >> we're very concerned about libya. libya is a situation where the security is really a very, very vulnerable situation right now. there are armed mill that groups. the government does not have control and we've seen lots of labor protests at the key facilities, and there's always a risk of what happened in algeria repeated in libya because the oil infrastructure there is very available to attack. >> to what degree here in the united states are we becoming increasingly insulated from the problems with oil and oil infrastructure in the middle east because we're increasingly becoming oil independent ourselves. >> well, let's take a look at our imports, the lowest level since 2007 so certainly the big growth in north american supply has cut our demand for imports, but are we entirely independent? absolutely not. if we look at 2020 we believe we'll be importing 5 million to 6 million barrels a day and even if we have more oil in the
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united states we're not protected from a major occurrence. >> i sense the concern in your voice. >> i'm concerned when you look at libya and the situation in iraq. people who believe we'll in a moderate or low-price environment going forward are also believing we'll have big supplies come on from iraq and i'm very concerned about the security situation there. 2,500 people have been killed since april. we have exports at their lowest level in 15 months so i do think we could also see problems in iraq. the middle east is quite volatile at the moment. >> what are you saying, are you saying oil could go to 120? where does your level of concern translate to the price of crude? >> right now we're pretty well supplied in terms of supply and demand so we're not looking at a
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situation where the prices are tight. outages are creeping up, libya, problems in nigeria and iraq. if you see a major producer like libya or iraq experience an outage, that puts upward pressure on the price. >> if we do see the spike, saudi arabia has spare capacity to pump more. >> saudi arabia does have significant spare capacity, but one of the thibs we have to watch is we're in the summer season and saudi demand itself goes up in the summer season so this is not the best time for sawed toe making up for shortfalls in the market. as always, thanks for joining us. >> thank you. coming up next, the chicken wing and baby formula edition of "sports talk." and the rich need a bigger boat. what's fueling the comeback in high-end yachts. understand my charts, and spend more time trading. their quick trade bar lets my account follow me online
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nice friday session, currently sitting at session highs, up 133 point on the dow. let's get to "street talk" and take a look at what's happening at nokia which has been downgraded even further into junk territory. >> here's the story. s&p worried that their plan to take over siemen's take and the
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outlook is nonetheless stable. buffalo wild wings getting an upgrade from buy to hold. >> they are citing lower costs and lower corn feed prices and record wing supplies and the target has been raised to 117 bucks from 98. that stock, by the way, up more than 30% year to date and a nice pop trade as well. >> transdime, dgd, the board of directors approved a special dividend of 22 bucks a share. >> everybody likes a special dividend. an effort to boost the shareholder return. that dividend equates to a 14.3% yield of current levels as well. mjm, mead johnson. what's the story? >> to equal weight from overweight. the stock has also dropped since china said regulators are investigating if the price of infant formula is too high. >> the stock today pretty stable. walt disney, "lone ranger's"
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open, a little bit of a disappointment. >> below expectations. the company could lose money on the $222 million film. people are saying hello "john carter" again but disney stocks had a good ride. >> the theme parks have been doing very well. let's bring in herb. seeing a big jon drop for a stock you've been following very closely. >> world acceptance, a subprime consumer lender, first wrote about it one year ago because it had a 200% annual interest and a number of red flags flying over the company. the stock is taking a hit right now because for the second time in july -- actually the second time in the past month the company has delayed the filing of its complete 10k. they say they need additional time to analyze loan loss reserv reserves, an estimated number. a lot of interest in this company but the stock has been rising because they have been
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buying back so many shares so we'll see how this goes. they say they expect to file their final documents by the end of this month. >> how much of a red flag is the delay? >> it depend on the company. always a red flag. >> come on, when you see a delay here, don't give me that nonsense. when you see a delay. >> case by case. >> it pops up on herb's desk. >> this one is a big one because they are looking at something where the company has a subjective analysis of a number they can use and a number of things here. we'll see where -- it's a red flag, yes, a big one. >> we'll wait to see what the additional analysis is. >> you can see what a red flag it is right there. >> an ugly red flag. >> what has been a nice move, right. it has gone with the market. >> tremendously, but i've seen this before. we'll see what's in there. those things reverse themselves, too. thanks very much, herb. outstanding loan debt has
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risen and that number can affect the demand for student housing. give us a quick idea of how is business, ted, because your share price hasn't done particularly well. year to date you're down by over 8%. >> had a selloofs, mandy, in the reit space, a lot of people positioned out thinking there would be interest rate pressures on the marginsch the business is doing great. very positive growth over the last several years. made an acquisition recently that's taken us into 84 markets across the united states and i can tell you the college business is booming. the growth in enrollment, the kids coming to the schools, and our company focus is on what we like to call the non-flagship markets so, for example, in pennsylvania, state next door here, penn state is a flagship school, but there are many state cool systems that have kids such as indiana, university of
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pennsylvania, where attendance has grown 10% over the past five years, and we continue to expect that to grow, so the student housing business is good if there's a demand growing. >> if you've underperformed the market quite dramatically, i'm sure you can attribute, it as you've said, to the selloff in reits but if rates continue to rise or stay elevated, don't you think some of the issues with the stock price could continue? >> oh, i think so, and it's a short-term phenomenon in my particular opinion because rates at the time they rise, so will rent, and although they will be a lag our rents will continue to rise and have over the last years as we've been in business. keep in mind we started this business in 2004 and we're returning to those rates. if we do return to those rates we'll still continue to have the margins so we feel very positive about the space, the sector and continued growth in rents. >> what about the move recently in interest rates affecting student loans? couldn't have a sizable impact on what you're trying to do with your business?
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>> personally i think it's a positive because it will keep student loan business intact. there's a higher default rate in student loans and the rate of interest that they were charging is really, you know, not covering the bad debts so what happens is when you look at this, a couple of things you've got to think about, number one, roughly 50% of the kids have no loans, and the remaining piece, the default is about 3% on the total pie, 7% on the remaining piece and of that we look at where the defaults occur and typically they occur in folks that don't graduate so the default rate on graduating people from college is low and reasonable. if you look at the rate expansion, basically the schools where we build, the non-flagship schools all across america in a lot of these schools, the kids there will pay on average $8,000 a year tuition, and many of them have some financial aid. many of them have jobs, so, you know, it's likely they they
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could exit college with around $150,000 in debt. three basis points on 150,000 is 1,500 a year. doesn't sink the ship. it keeps the system going. it's the prudent thing to do to raise the rates. positive long-term impact on the student loan business. >> an interesting take on the subject. ted, thanks very much for sharing your views. >> thank you, mandy. move own cronut because the crookie is a-coming. we'll explain. >> i hope there's some here. >> and is samsung's pain apple's gain? who is winning the smart tablet war? >> and what's coming up on the "closing bell"? >> is this a rotation from stocks out of bonds because of the june jobs report? 195,000 jobs but did the quantity of the job match the quality? are airlines at risk of losing passengers as they keep piling on fee after fee after fee, and we eel show you how to trade
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alcoa before it kicks off earnings season. yes, that starts on monday. kayla tausche is with me here today. hope you can join us at the top of the hour for the all-important last hour of the trading day on "closing bell." stay tuned. more "street signs" after this. but not energy or even my mood. that's when i talked with my doctor. he gave me some blood tests... showed it was low t. that's it. it was a number. [ male announcer ] today, men with low t have androgel 1.62% testosterone gel. the #1 prescribed topical testosterone replacement therapy increases testosterone when used daily. women and children should avoid contact with application sites. discontinue androgel and call your doctor if you see unexpected signs of early puberty in a child, or signs in a woman, which may include changes in body hair or a large increase in acne, possibly due to accidental exposure. men with breast cancer or who have or might have prostate cancer, and women who are or may become pregnant or are breast-feeding, should not use androgel. serious side effects include worsening of an enlarged prostate, possible increased risk of prostate cancer, lower sperm count, swelling of ankles, feet, or body,
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oh, cronut, we knew you well, when yesterday there was a three-hour wait for the new bla blackberry flavored cronut. we've been blown away by just how popular these things have gotten ever since the chef appeared on "street signs" back in may. now he's trade marked the name, and he's been fighting knockoffs and a crackdown on black market cronuts, some getting a 600% price markup. we'll be heading to his bakery next week to see how the pastries are made and eaten. >> really? >> yes. >> i believe i would put my hand up for that task and could this be the next cronut perhaps, called the crookie. it's the brainchild of a canadian pastry chef. croissant dough stuffed with oreo cookies and -- >> i'm not down with that.
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i've not had a cronut. >> they are heaven in pastry form. >> impossible to get. >> they are impossible to get. >> people have been trying to sell them on craigslist. and now mary thompson on the boat business. >> reporter: i'm aboard a 70-foot custom made viking yacht. this is what they call a sportsman, a fishing boat. viking makes yachts that on average retail for about $3 million, and as can you imagine their business was hard hit during the recession in 2009, but since then it has been recovering steadily. here's the company's c.o.o. patrick healey. >> since a nice recovery since the latter half of '10 and going
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forward we've had good growth over the last three years and we've seen tremendous growth going into next year. >> so what's driving sales of high-end yachts? a stronger stock market, increasing confidence among fortune 500 ceos who are vikings's clients and a stronger auto industry as well. a lot of auto dealers being big clientele of viking, too. so far last year total sales for boats were up 10%. the sweet spot for the boating industry, small outboard motors. they account for 82% of the market and sales last year were up 11.2% and a better housing market credited for that increase. sales of big boats up a more modest 4.4%. marine max, which sells 30 to 15-foot boats is upbeat and a little less so than viking. northeast regional president saying sales are good but not great, in part because while demand is there banks are a little bit reluctant to lend. >> you know, the banks have tightened down a little on the
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finance. they want more money down so it's been a little harder battle to get the boats going, but it's been fine. >> one thing that is more than fine for the boating industry right now is the servicing industry. a lot of people were expecting an uptick in sale but what happened is because the insurance companies were reluctant to give the payout a lot of people are paying their boats so that's driving the service business and what has happened or what hasn't happened is an anticipated tickup in sales because of sandy. it hasn't -- >> we might have had a little technical problem. clearly she's decided to clock out and go out for the weekend. looks very relaxed out there on the boat. >> think i heard the sound of a cork and then the satellite feed went out. >> remember when we had that debate about samsung being the apple killer in not so fast. >> and the man behind the hottest smart watch in the
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welcome back to "street signs." i'm jackie d'angelis at the nymex. watching oil prices closing moments ago over $103 a barrel.
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close to session highs. a couple of things driving oil prices. first, of course, strength in the u.s. economy off of that strong jobs number but also the geopolitical tensions and what's going on in egypt right now driving this price increase. you know, i heard your conversation before with the barclays analyst. she was talking with the suez canal. traders don't think there will be any disruption in the suez, but, still no, one issing to fight the momentum on this trade, and they are looking to ride these prices higher. scott, back to you. >> jackie, thanks so much. jackie d'angelis with a read on crude. mandy? >> didn't we just have a debate asking if samsung was an apple killer. last quarter doesn't look like it. a big disappointment after a slowdown in smartphone growth. >> every now and then we get a report that changes the way people think about a markets happened to apple late last year where we got a narrative about apple's high-end market drying
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up. might be getting it again. samsung says to expect an operating profit around $3.2 billion in q2 in 50 billion in sales. the culprit here, sales aren't growing as quickly as many hoped for samsung's galaxy s-4. don't get me wrong, it's selling amazingly well. rumor is, 20 million units have moved in two months and samsung's overall numbers of operating profit is 47% higher than a year ago. revenue, nearly 20% higher. the head-scratcher says that samsung is supposed to be the company best positioned to capture mid-tier smartphone growth. unlike apple, they have a size that's every fraction of an inch from 3.5 up to almost 6. have to see what accounts for the operating profit shortfall. marketing spend is one place to look. it's estimated that samsung spent $600 million on u.s. marketing and promotions in 2012, about twice what apple spent. they are obviously still
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spending, some of it going to jay-z. north america is samsung's biggest market. the profit staying power is about to be tested like never before. several moz else are expected in three months running new competitor on android with the motorola unit launching, assembled in the usa, samsung x. expect to see whether headlines has lost its cool. >> that's the next debate we'll be having here. we have some breaking news. we want to show you live pictures out of egypt. what you're looking at is a car on flames. it's on a bridge crossing the nile. we've been seeing president morsi supporters crossing the bridge all day. they're in tahrir square. the army has been trying to hold them back. the military has been trying to clear the bridge. we saw violence ensue, and what you're seeing is live pictures of the violence in action. this is a developing story.
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we're going to continue to watch it for you, and certainly it's having an impact on energy markets as well. in the meantime, the next big tech battle is going to be about watches. apple has already registered for a trademark on iwatch and samsung, and google, might also be working on a watch. but this company will be the biggest competition. pebble, launched its own smart watch, and it very quickly became one of the most successful quick-starter campaigns, raising more than $10 million and it made a deal with best buy. starting this weekend, folks, you'll be able to find the pebble in best buy stores. joining us is the ceo and co-founder. great to have you with us today, eric. >> thanks. >> you've been a great success story. but my question is, you have a lot of competition coming up in the next year or so. how will you be able to differentiate yourself? >> i think we're starting to move quickly on the front to enable developers to write applications for the watch. pebble is one of the first watches out there that developer
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d s that can write apps. they can write sport, fitness, let you control things from your watch, like send and receive text messages, e-mail, facebook, twitter from your watch. we're in a position where people can start writing apps for pebble today. you can go and buy one and start writing the apps right away. >> we have great respect with what you've been able to do with your company. how are you thinking about what apple and the others may be coming up with, and how that's going to impact you? those are very large companies with a lot of financial muscle behind them. do you feel as though they'll sort of render your product immediately second fiddle the minute they come on the market? >> so, i don't think we're going to be in a position where that would happen. i think that pebble is one of the first watches that supports ios and android, two separate platforms. i think it would be very odd if apple came out with a watch that supported android, as well, and vice versa for an android-based
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smart watch. so i think pebble is going to walk the line of a friendly, easy-to-use device, that works with all types of smartphones available. and really, you know, our goal as a company is to capture interest and enable developers to work on top of the platform. we think that the app-based marketing strategy that we're putting in place will be what puts us ahead of some of the other people that will come onto the market. >> the watch will cost $149 at best buy. i understand that you've already shipped about 100,000 of the watches. what kind of demand are you projecting once you start selling in best buy this sunday? >> we're projecting a pretty good demand. we've seen that there's an amazing amount of interest for smartwatches all around the world, both in the u.s. and outside. so our goal right now, and continuing over the fall, is to ship as many -- as many pebbles as we possibly can. >> okay. we'll be watching. thank you very much for joining us today. eric. next, it is time to start popping bottles, because it is "street signs" happy hour time.
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>> i thought it was, like, 4:00. but 3:00? hey, that works. >> it's 3:00 somewhere, right? >> it's all good. ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ ♪ [ male announcer ] some things are designed to draw crowds. ♪ ♪ others are designed to leave them behind. ♪
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vietnam in 1972. [ all ] fort benning, georgia in 1999. [ male announcer ] usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection and because usaa's commitment to serve military members, veterans, and their families is without equal. begin your legacy, get an auto insurance quote. usaa. we know what it means to serve. it will be a great last hour of trade given what the markets are doing right now. we're just about the highs of the day on the dow. 15,115. better than expected jobs report. a big gain. gave it all back. we have it back all now, plus 127 on the dow. all right. friday afternoon means happy
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hour here. scottie, you picked a good day to come along and join us. >> i've had some sample. >> yes. a really delicious pairing on dak. wine-infused popcorn. and because it is the all-american show, the product is all made in america. so joining us is the creator of the snack, maggie, the founder of the new york popcorn shop. populence, right? >> yes. >> tell us how you came up with the idea. >> we often have customers come to our store and they ask us what they pair with the wines. and we thought, why not create a popcorn that pairs the wine in the recipe. we teamed up with ken crawford, and it's been a fun experience. >> how about the partnership with them and not a u.s.-based producer? >> i'm a fan of their brand, and i happen to have contacts here and i was able to speak to them and work on getting that collaboration going. >> how much do we pay for a bucket like this? this one has the pinot noir
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infused. how much is a bucket? >> this organic bucket comes for 28 in the store or 35 on our website. >> mm-hmm. and what's the demand like? >> the demand's been great. we're so busy. people are loving it. they love to bring it to parties. it's a great summer snack. it's a great cocktail. >> you've been talking with other producers? how do you plan on growing the business any more than it's already been done? >> well, we've been talking with kim crawford about doing a couple of other recipes. they're very excited. they're loving this. we've both had great reactions. >> what kind of other recipes? what are you looking at in terms of new recipes in the future? >> they have other wines. we have the pinot noir. and the suaauvignon blanc. >> if you ate enough, would you get drunk? >> well, maybe so. >> how do you feel the market is for gourmet or specialty food
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products? it gets a lot of buzz. between the food network and cooking channel, and all of the other networks where people get exposed to these kinds of products in ways they never had access to. >> right. i think people are just interested in having something that's artisanal, a talking point at cocktail partiesment people want to be excited about something. have a new experience. we are just an organic company, so i think people are very concerned about that, too. >> you don't think it might be a passing fad? i'm asking this with all due respect. it's only because we've seen a lot of fads, the juice bars, cupcakes, which seems to be on the out, and we did a big thing on fro-yo, so you don't think it's a danger of being a fad? >> i think certain flavors could be fads. but popcorn is a nostalgic treat. we've enjoyed it since the 1920s. i think popcorn is here to stay. >> how many more varieties do you plan on coming out with, or varietals? >> touche. >> we're not exactly sure how
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many we'll do. >> next, you'll be asking what vintage this bucket is, right? >> yeah, right. >> toasty on the nose. thank you for joining us. best of luck. >> interesting food product. 2013. >> thank you for watching "street signs." it's been a great pleasure having you as guest co-host. brian will be back from his much-needed rest, back on monday. have a great weekend, everybody. happy friday, everybody. welcome to "closing bell." i'm bill griffeth here at the new york stock exchange. a full satisfying workday for the capitalists here at the big board, and an eventful one, too. >> we shut have brought some wine-infused idea. a great idea. i'm kayla, in for maria today. on today's show, the good news, but maybe bad news, for the stock market -- or wait, good news again? it would certainly seem it was bad news at the

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