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tv   On the Money  CNBC  December 29, 2013 7:30pm-8:01pm EST

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welcome to "on the money." the markets end the year with a bang. all you need to know for how to invest in 2014 and beyond. we're putting january 1st to the test making new year's resolutions for the markets and congress and even for you. how to be wealthier and wiser and healthier with a profit while you try to get rid of holiday pounds, businesses try to add to their bottom line. "on the money" starts now. >> here's a look at what's making news. santa claus definitely came to
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town. a holiday shortened trading week didn't stop the rally. record runs hitting fresh highs and by thursday posting the strongest six-day winning streak in three years. the dow is on pace for the biggest gain since 1996. holiday sales were 2% higher than last year's figure. they offered steep discounts late in december. online sales saw 10% growth but retailers offering extended deadlines contributed to the shipping and delivery crunch that kept people from getting gifts by christmas day. more signs of strength in the all important housing market. new home sales rose more than 16% from the same period a year ago. that translates into an annual rate of 464,000 homes a month. the strongest two-month surge in over five years. and apple has finally cracked the biggest market in the world. the company is signing a deal with china mobile to sell iphones through the largest network of mobile phone users.
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china mobile has 760 million customers and this could boost iphone sales as much as 20%. 2013 has been a stellar year for many investors with markets skyrocketing by about 30%. will next year be smooth sailing or filled with potholes? joining us now, russ koesterich and dan wessel. thanks so much for being here today. russ, let's talk about what to expect in 2014. do you think we can get a repeat with the stock market? >> well, by repeat you mean another year where stocks go to 30% that may be optimistic. >> little bit of a stretch? >> maybe a bit. i think stocks can go higher next year. the fundamentals look sound. valuations are a bit stretched but if we have a year in which economic growth accelerates and the rise in interest rates remains modest, then i think
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stocks will finish 2014 higher. >> so are you expecting the economy will do just that? >> we are. our base case scenario for 2014 is there is an acceleration of the u.s. economy, maybe going from the 2% trend growth we have seen over the past two or three years to something closer to 2.5 or 3%. i don't think it will accelerate beyond that. while there are a number of factors, the improvement of the job market and higher household wealth that are helping, one factor still missing from the recovery are higher wages. in the absence of higher wages it's hard to see spending accelerate dramatically from here. >> david, what's your take on the economy for next year? >> there are finally signs that next year might be the year that things really get better. every year for the last several about this time of year the forecasters and press and federal reserve says next year is going to be the good one. each year we've been disappointed but we may get our
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wish. nothing like a 4 or 5% growth we've seen after past, but it would be nice to 2.5 to 3% and that might bring the unemployment rate which is still high at 7%, down enough so employers will have to raise wages or begin to raise wages and that will create the spending power. it does depend on no bad surprises. we've had a number of bad surprises in the last couple of years. the tsunami in japan, debt ceiling fee asco and europe trying to blow itself up. >> do you think there's a chance we won't get bad news or is there something fundamentally different? >> consumers appear to have paid down enough the debt so they are beginning to borrow again. congress has stopped rach eting down on spending. the recent budget deal means that they've let the belt out a little bit on government spending and importantly, once they get past the debt ceiling thing, which i think they will. i think both of those will be
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very helpful. >> to me one of the risks out of washington 2014, do we continue to see further issues with the affordable care act. the reason i focus on that is, this is an issue that is very visceral for a lot of people. if this continues to be challenged, that does have the prospect to undermine confidence and in doing so hurt business and consumer spending. that is a risk for 2014 to watch. >> david, would you agree with that? >> partly. i mean, for most americans, the affordable care act doesn't really change much. those people who have medicare or medicaid from the government or get employer provided care from a big employer, it certainly has focused a lot of attention on the inept tud of government and greatly undermined public trust, not only in government but all institutions. there's some concern between trust in government and trust in institutions and the confidence that leads consumers to spend and importantly leads businesses
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to invest and hire. >> let's talk about another institution that people have been watching closely that's the fed. the fed said it is going to be tapering come january. is that something you think has an impact on either the markets or on the overall economy? >> you would think so but it is really interesting that the fed announced they are going to begin the long awaited taper and the stock market has kept going up. we have seen long term interest rates and 10-year treasury is at 3%. that's reacted. if the fed manages the transition to janet yellen without hick ups and do the slow tapering and convince people they won't rush to raise short term interest rates any time soon, it may be a nonevent. >> let's cross fingers for that. let's talk about what people should be doing for the end of the year when it comes to their
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portfolios. >> there's one big one for 2014. for investors, ignored international markets, this is a good time to consider broadening out that exposure and having some exposure to japan, to europe, even to emerging markets. not that these all necessarily are going to do brilliantly in 2014 but in the longer term, lower valuation suggests it can add to a portfolio over the next three to five years. >> thank you both for joining us. happy new year to both of you. >> same to you. >> happy new year, becky. >> telling the future in 2014. and new year's resolutions we would like to see across the economy. washington, wall street your bank and maybe your boss. >> how many stick to resolutions to eat better and exercise more?
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. >> what will you do next year? get in shape again and come up with an awesome family vacation. i like that, that sounds good. >> sara said, resolution for 2014, start my business and be more financially secure. >> from your resolutions to those, we might see or at least would like to see from leadership on both wall street and washington, ben white, politico's chief economic correspondent and mike santoli. thank you for being here. >> ben, you've said that you think washington, d.c. will be less dysfunctional in 2014. high praise, i know. not much of a compliment. >> hopefully they won't crush the economy as in previous years. the big hope is we don't have a debt ceiling blowup in march and april and may. we're not going to have a budget standoff or shutdown, we're probably safe there. on the debt limit, i think republicans are keen to fight in
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health care and affordable care act. getting a debt limit fight would be side tracking them from the mean goal, beating up democrats and obama. >> is there a chance they come back and wrangling and people who won't necessarily follow the party leadership? >> there will be hard core tea party republicans who want something in return for raising the debt limit. they'll need to get something from democrats. that's where you have the potential for something of a conflict. at some point president obama and democrats will say we'll give you this on spending, entitlement reform, some piece of legislation to make it an easier vote. but i think that will happen relatively early in the process and we won't get a crisis. >> mike, how about you? >> from washington i do think ben has hit on it. the bigger question is how much investors have internalized the
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idea that washington can't do right on the economy. washington didn't really do much of anything to help us out but there was enough resilience that we got through it. i feel like you don't get any boost of good news by washington kind of being put off to the side. >> how about the mid-term elections? what are we looking at potentially or is it really still too early to tell? >> it's not to early to tell. we're looking at status quo probably. republicans may pick up a seat or two there. there are lots of vulnerable democrats that could have a hard time winning re-election but republicans need to run the table and pick up seven seats. democrats will lose seats, not going to regain the majority. they auz always lose a lot of seats in the sixth term. >> what about john boehner? any threat to his leadership or is he winning more power by
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clamping down by going against anybody -- >> boehner has beaten back real challenges to his leadership. ha he's broken the tea party and no immediate apparent to him eric cantor is not going to usurp his leadership. boehner, why would you want the leadership given how difficult it is. >> there is a lot that think, wow. >> if he wants it, he's got it. >> your outlook for the economy. we've seen the fed say it will start tapering and that's giving confidence. they must be seeing something it really likes. >> they are ratifying what the markets have told you. they are up 30%, it means they see good things economically. the market is okay with a gentle well telegraphed taper. i do think we're on board with that. the risk is you get some kind of run of data that up-ends that
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idea. i think the market is showing a lot of optimism. they are really optimistic. it's almost begging for a scare. that scare could be you have a good run of economic data and people say, whoa, the fed has to go faster. is 3% on the treasury yield okay? are or we showing i am patience in terms of where rates are. it doesn't mean it's over but it gets a little more dicey as you worry about both the possibility of going too fast and too slow. >> can you play along with me. pretend you're janet yellen. tell me what you do. >> remain flexible and listen to the markets. she's a nonquantity. the course has been set for her by her work and what bernanke has set up. you have to be mindful of the market. >> when you say mindful of the
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marvegts, you're not evenly talking about mindful of the data -- >> the market's interpretation of the data and the market's implicit forecast of the fed's intentions. >> i think first thing you do is thank ben bernanke for getting it started before you go to office. her first task in office is not to begin the taper but decide what pace to continue the data. i think the data will continue to come in strong enough to continue the taper. >> if you have any big global concerns, resolutions, anything you would love to see next year? >> there's global concerns, i think china and debt problem and intermet ent banking issues, i think you have to watch it. in general, i want to see big companies resolve to actually invest and spend for the long term. companies have been rewarded for being conservative for years. we're long over due part of the cycle where she should start
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investing again. >> that would be the thing to change the jobs picture. >> and globally you have to pay close attention to the middle east, particularly egypt. you've seen a lot of unrest with the muslim brotherhood being labeled a terrorist organization. that's going to be something to keep a close eye on. less impactful to the u.s. economy given we produce so much now. the olympics in sochi, and world cup in brazil. if both come off without any significant bad events. >> terrorism or any type of unsettling destabling geopolitical event centered on the olympics and world cup which people will be watching. >> and it makes you feel good. >> particularly if we don't have a crises. >> thank you both. >> up next, we're "on the money" slimming and trimming cli ents is the bread and butter of the weight loss industry. how to fatten entrepreneurs
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wallets.
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if you have decided to eat better and exercise more in 2014, you are not alone. you are one of more than 100 million americans likely to diet next year. crunch the numbers on that and gyms and weight loss programs and food companies stand to rake in more than $60 billion in revenue. how is the industry shaping up for next year? eric holmes is the author of "the juice generation" and a
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personal trainer to lone survivor, thanks for being here today. >> thank you. >> i'm one who makes a resolution. this is it. this is the year i really take control. why it is that people have issues like this and does it make your business cycle cal. is this crunch time? >> for myself, my gym is called halevy life and we taper to a different mindset. >> someone more serious? >> someone more committed. our model is a service only model, they are coming to have services administered like personal training and commitment based model where they commit to at least 90 days at a time of working with us. we don't have that revolving door that many gyms do. >> smart for our clients, a quality control measure. >> is juicing something that
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people do more in january or is this becoming a year round event? >> juicing is a year round event. we do see a boost in january and get people walking in the stores for the first time wanting to know what is green juice, is it something i want to make part of my daily routine. is it scary? we do see a boost in january. >> i know you thought of this in the last century, over 15 years since you launched this stuff. >> one of the pioneers. >> how did you know this was going to be such a big business? >> i didn't know it was going to be such a big business. it was something i was passionate about and it's really a huge portion of my life. i felt i've been spreading the word for like you said, 15 years. and it's just good luck that a lot of people are catching on and finding how to juicing can make you feel better and look better. >> i will admit, i have not done juicing before but i'm going to try this. explain what this does for me and which one -- you'll give me one that even though it's green
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it tastes like watermelon. >> a lot of people think about a green drink, it's going to taste like my front lawn. that's not the case. in my book i device a program called the green curve. wherever you are in the diet, fatty processed foods, you can start off slowly and the great thing about green juice. it tastes good. we can make anything taste good. that's what a new year's resolution is good. if something that you like you're going to do it and go back. if a juice tastes good, it's something you're going to want to do. if it's painful or tastes bad, you're not going to do it. >> that's going to be a message that you tell people too. what's something they should be doing in terms of our exercise regiment, diversified like port fort tosh foel toshyos? >> everything starts from the inside and i think that the the
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most important thing that people can do right now, starting any new habit, including having a juice every single day. start small. first thing is start with baby step like flossing one tooth or holding a green juice every day or walking into a juice generation. the next step is anchoring it to something you already do. right after you do something to do it. the most important part, self-celebration. nobody celebrates their efforts enough. we beat ourselves up when we don't get to the gym, when we don't have a green juice, when we don't give ourselves a pat on the back often enough. >> you mean this literally, starting with baby steps. already, open the juice for me. let me try it. >> don't be so eager. >> i'm going to do this. i'm going to be a believer. >> it looks maybe not as tasty. >> i'll give you this, i would definitely think i was drinking grass. >> looks are deceiving. this is one of those juices that actually has a lot -- >> that's pretty good. >> could you do that every
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morning. >> uh-huh. >> this is so easy to make. if you have five minutes in the morning and $20 a week. >> these are expensive, the ones you make -- >> you can do this yourself. you can prepare over the weekend. if you have five minutes every morning and $20 a week, you can have a healthy green habit every morning. >> thank you so much for coming. it's inspiring to me. i'll try to stick to my guns this year. >> a look at the news this week that will have an impact on the money. take a look at how the stock market ended the week. ♪
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hmm. mm-hmm. [ engine revs ] ♪ [ male announcer ] oh what fun it is to ride. get the mercedes-benz on your wish list at the winter event going on now -- but hurry, the offers end december 31st. [ santa ] ho, ho, ho! [ male announcer ] lease the 2014 glk350 for $419 a month at your local mercedes-benz dealer.
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you can resolve to follow us on twitter. here are stories that may move the markets and impact your money. we'll see how home prices fared in october. also, we get the consumer kfrds index for december. we'll celebrate new year's day and markets are closed for the holiday. wednesday, health coverage under obama care will begin. plus, you have recreational marijuana will be legal in colorado and in washington state. and we'll be saying good-bye to the 40 and 60 watt incandescent light bulbs being phased out, stock up now. that's the show for today. i'm becky quick. thanks for joining me and happy
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new year, everybody. each week keep it right here. we're "on the money." [ male announcer ] here's a question for you: where does the united states get most of its energy? is it africa? the middle east? canada? or the u.s.? the answer is...
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the u.s. ♪ most of america's energy comes from right here at home. take the energy quiz. energy lives here.
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>> if the president would like a window on the most threatening problem in america, he'll find it in wilmington, ohio, where unemployment has reached levels not seen in decades. it's a company town, and the company is leaving. >> you just have to start doing, and you do without things, and... your son drops out of college early. >> he dropped out of college. >> yeah, we had to-- we had to pull him. [ticking] >> of all the bakeries in america, this one takes the cake, not only for the way

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