tv Markets Now FOX Business May 28, 2013 1:00pm-3:01pm EDT
systems. lori: let's get to the new york stock exchange and nicole petallides. nicole: some firming economic news is certainly correct. we had a selloff last week. today, a different picture. the dow jones industrials of over 200 points today. twenty-nine of the 30 dow components have been in the green. case shiller numbers showing home prices on the rise. also, just looking at the u.s. dollar today. it is higher. also keeping an eye on tiffany. doing well with their sales numbers. coming in and beating the street. asia, in particular.
it is worth noting games over in asia. they have the 175th anniversary. it ties into "the great gatsby." back to you. lori: thank you, nicole. melissa: stocks staging their sharpest gains in nearly five months. the s&p case shiller home price index coming in better than expected with a gain of 10.9% for march compared to last year. is this enough to keep the rally going? joining me now is david cho
talk. thank you for coming on the show. let me challenge you on a few things that are out there right now. i was looking at this chart of the cpi and it looks like the slope is headed straight upwards. what do you think of that? >> i do not know about the cpi. we look at the personal consumption bills later. inflation is relatively well behaved. you can pick one and point to it, but the whole idea, i think, melissa, is you have to look at all of them. there is no pressure on the federal reserve from the inflation side. it is pretty clear that they have not decided when they are
going to tape or, if they are going to taper and by how much. melissa: we have another very large pool of under utilized labor in the economy. that either points to inefficiencies or people not having enough money to spend on things. if you look at temporary workers in april, that went up by 40,000, part-time workers went up by 400,000. the workweek shrank by 12 minutes. these are not great sides. not bullish for the market. >> no, they are not bullish for the economy which is what the fed has been worried about. you are absolutely right. we have two things going on at once. wealthy people are getting wealthier in the u.s. asset prices are rising. lots of things.
the labor force is not getting rising income. you have these divides here between two different components in the u.s. we like this. we like stock prices going up. if you are in the real estate business, you like rising real estate prices. if you are in the labor force, you are dealing with a struggling component. melissa: you see a lot of companies out there going out and doing stock buybacks. that has been a huge trend. in the short-term, it is bullish for the stock price because it gives it a boost. when you see companies doing back, they cannot think of a better way to invest. they cannot think of a competitor to buy to make their business better. i always feel like that is a bad sign for stocks in the median
term. >> in the long run for sure it is better to have companies invest in growth then do internal financial transactions. we see some merger act tiffany, but not enough. we also have a tax code problem. if they make money and it is overseas in a subsidiary, they do not bring it back to the united states because of our tax problem. that is a bad structure. melissa: all compelling points. thank you for coming on. i appreciate it. he hit it out of the park. lori: at it again.
stealing some of our nations most coveted secrets. does this suggest our national security is an even more jeopardy? >> that is something you could be led to believe. more than two dozen weapon designs have been stolen by hackers. we are talking about ballistic. this could give the chinese a big leg up. senior military officials told the post the chinese have skipped over decades of development and saved the onions of dollars just by hacking. we are seeing espionage spread to australia.
they have been fooling, as well. ba what does that mean for the relationships? >> it will be on top of the agenda when president obama meets with the chinese president in california. businesses invest that allows them to monitor their network in real time. they are very much talking past each other. this technology will allow businesses to take it into their own hands. the report does not say hack back, but it gives recommendations that are pretty
aggressive. this could affect your company's business in china if you do this. very complicated, very tough situation. lori: thank you very much for that. melissa: president obama in new jersey today with governor chris christie. much of the funds collected by the red cross for san diego are still unspent. the red cross expects to spend 27 million poor families over the next few months. pharmaceuticals hitting a 52 week high. the deal is worth $8.7 billion.
the bits keep coming in for streaming tv and movie site lulu. the latest comes from yahoo!. lulu is valued at 20 billion. this is the second time hulu has been on the market. they tried and failed in 2011. i like hulu. i don't pay for it. i don't pay for any of that stuff. it is crazy. lori: fire at sea. the latest on a blaze that broke out on a royal caribbean cruise ship. melissa: why a couple of harvard purposes are accusing -- of uncivil behavior. no, come on. he is a pussycat. lori: we are making money with charles payne next.
melissa: a look at battles as we go to break. silbert getting hit. dow a full percentage point. we will be right back. ♪ [ male announcer ] at his current pace, bob will retire when he's 153, which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a rtgage. luckily, he founsomeone who gave him fresh perspective on hisortfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rket science. it's just common sense. from td ameritrade.
♪ lori: it is time to make money with charles payne. it is all about tiffany's. charles: well, you know, tiffany's is interesting. first, global peace, which, you know, we do not talk about a lot. same thing with prosperity. it is more distributed than it has ever been before. tiffany, what they were smart enough to do, they have been branching out. for a while, it was japan. since 2002, asia, mostly china
has gone from 15 to 20%. even japan was pretty good. in america, it was only up 3%. i talk about the idea of having a global blueprint. one thing that helped them out was exporting american customs. in this case, the engagement ring. as a percentage of sales around the world, the engagement ring was more popular, more important for the japanese market in china market then it was for the americas. i think that is pretty interesting. that custom started in ancient egypt. it was popular in rome. you use to get an engagement ring with a key on it. when you get married, it also
speeded it up. charles: it is great for you ladies. lori: how interesting. melissa: i did not know the history of the engagement ring. that is so interesting. charles: a lot of uris docs and portfolios -- they say they will no longer break out sales for the new york city store. melissa: because they have been watching you. charles: talk to you later. melissa: the founder and six other employees of liberty reserve have been indicted in a $6 billion money laundering
scheme. it is believed to be the largest international money laundering prosecution in history. some calling this paypal for criminals. nicole: thank you. taking a look at some of the homebuilding related type stocks. here is a look at two of them right now. the homebuilders etf up 1%. both are doing well today, on a date where we see sweeping gains across the market. we did get in some good news pertaining to case shiller and home prices on the rise.
we continue to wait. more housing news later in the week. as you can see, there is a nice one your chart. both of which are doing well. and outpacing the major market averages. it is fun to take a look at this. back to you. lori: who needs a safe haven when the stock work it looks like this. a record run on wall street. whether or not rising treasury rates are signaling and improving economy. melissa: take a look at how the dollar is faring today. the dow up 151 points. we will be right back. ♪ i turned 65 last week.
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holder lied under oath in his may 15 testimony. the panel is looking at possible inconsistencies when holder testified to congress that he was not up to speed on possible prosecutions. in florida, at a pretrial hearing in the george zimmerman case, a judge ruled that tech that trade on margin set are inadmissible evidence. zimmerman is charged with second-degree murder. in california, fire officials say a wildfire in the mountains is only 10% contained. blaze that began late yesterday has grown to nearly three square miles. evacuations are still in place. those are your headlines. i am lauren green. back to lori. lori: thank you for that.
yields up to the highest levels of the years in many cases. is this the markets perception that we have an improving economy? or is it the beginning of a bond bubble bursting? >> well, i think it has to be. this is the kind of economic strength that may actually trigger and unwinding or tapering of quantitative easing. i think it is a little bit early for that and i do not think that the fed would like to see that yet, but, certainly, i think that is why people are running from ten year treasuries and certainly 30 year treasuries. if this keeps up, the fed will begin unwinding quantitative easing. lori: such a sharp and fast rise. if the feds goal is to keep interest rate borrowing costs
depressed to continue to fuel the economy, maybe, in sort of a contrasting viewpoint, this would give the fed less reason to begin winding down. >> certainly you are directly on point, in terms of where treasury rates are now. where the ten year yield is now. that has got to concern the fed. one of the strongest pillars of economic strength today is the housing market. if we push ten year yields higher in that pushes mortgage is higher, we will pull away one of the strongest pillars of economic strength and i think that could work out what the fed has been trying to do all along which is keep those rates down.
i think they have to be a little bit nervous today let's go back to the ten year period i know the five-year today is pushing 1%. 193 a day before the minutes released last week. does bernanke now say, wow, that is so fast. this market is so sensitive. what will ultimately happen when the fed is committed to a formal exit strategy. >> they would suggest that they are not really committed. i think they would love nothing more than for this to continue this week and maybe that tenure get to 220.
it would really give the fed and opportunity to increase quantitative easing before they decrease it. all of a sudden, you could push some people out of the housing market. certainly eliminate from consideration or some people refinancing their mortgage. those are the two things that have really helped economic strength. lori: gdp, we have a jobs report two weeks away. what are the key events? >> jobs are certainly important to the fed in the market. if the gdp report comes in stronger than expected, we will see two and a quarter on the ten year period. lori: thank you for joining us. melissa: ready for the u.s. to get more involved in syria. senator john mccain is. lori: when the white house knew of senator mccain's plan to go.
melisssa: time for stocks now as we do every 15 minutes. let's head to the floor of the new york stock exchange. nicole petallides. nicole? >> we're taking a look, melissa at a couple names under pressure. we'll look at first energy. this is one, got it for you now sitting at 39.49. we're looking both of these names, including excelon as well are to the downside. they are weighing on the s&p 500. downgrades for both of these names. i'm showing you one here. one is up as well. utilities overall have been lagging the market.
we see deutsche bank downgraded excelon from a hold to a buy, talking about revenue headwinds. that is something that hit credit suisse downgraded first energy corporation. which we bought to neutral from outperformed. both are coming under pressure where we see so many up your rose with 27 of 30 dow components actually posting gains. these are two names indeed pulling back. back to you. melisssa: nicole, thanks so much. lori: breaking news. alan krueger is leaving his post as president obama's chief economist. peter barnes on the story from the white house for us. what, he had enough? >> no, lori. actually, this is not uncommon, universities like princeton where alan krueger came from usually limit the leave of absence for their tenured professors to about two years or so. alan krueger, who took over the job as head, chairman of the council of economic advisors in november 2011, has already gone past his two of had year mark. there is a little bit of the
wiggle room in that. sources telling, confirming with our colleague ed henry kruger is going to be leaving to go back to harvard, excuse me to princeton to teach. he becomes now the third of these top economists for the president to leave. austin goolsby was here first of chicago. then christina romer of stanford as i recall or berkley, i forget which one. now alan krueger going back to princeton a little over after two years here. according to "the wall street journal", the likely replacement will be jason furman, who is right now in a separate advisory role at the national economic council chaired by gene sperling. jason is a deputy to between sperling. "the wall street journal" saying that the president will nominate him to take over for alan krueger. back to you. lori: latest personnel shake-up. thank you, peter. >> you bet. melisssa: fuhrman, rubenite, bob ruben school of
economics. won't be much of a change there. senator john mccain slipping into sir -- syria for a meeting with as saut rebels. he is the high raestest ranking official to visit the country since civil war broke out a few years ago. now we're learning the white house had a head's up on all this. what is the endgame? time for lou dobbs. >> wouldn't it be stunning if they had not known that senator mccain would meet with the head of the free syrian army, the rebels but knowing what they do and did, what is the difference? here is a meeting that takes place over the course of several hours in syria, i.e., may be about a bit of a boost for the syrian factions fighting against assad. surely this not, as this administration is fond of saying, a game-changer. in fact it raises the question, why is senator john mccain and senator lindsey graham, why have
they become the voices of the republican party on a host of issues about which their expertise i think could be severely questioned? they have played a role in iraq and afghanistan, some of the great, if you will, misadventures of policy both led by republican and democratic presidents over the past 12 years. it is about time, i would think for people to say, wait a minute, what are we doing here and why? particularly when our key ally in the region, israel, is very concerned about the idea of arming these rebels, amongst which, are, a large number of radical islamists who mean nothing other than destruction and devastation for israel. it's, it is a peculiar sort of neocon, twisted and tortured policy that graham and mccain seem to be following along with of course our president, barack obama. lori: should the u.s. just
steer clear of the syrian mess right now? what is the best course of action? >> i think actually senator kerry has done well. he has moved about $600 million worth of nonlethal aid into position for those fighting against assad. i personally can not imagine what else, nor have i heard anyone of substance or intelligence articulate an approach that makes sense for the united states and the region. we still have plenty of allies in europe, with lots of money and lots of resources with many interests in the region who have a responsibility to be there. so i would suggest that we would be a guiding and wise council. this is a perfect role for this president to hold his hands behind him right now and watch because this is a civil war and to maintain a, if you will, the two principle goals of foreign policy, that is preserving our key ally in the region,
that is israel and making certain that iran does not end up with another proxsy state beyond syria. melisssa: you don't think getting involved addresses that second point? >> and that does not become a nuclear power. melisssa: do you think your second point address that is the point because -- >> the gg involved is utter madness for this administration, for this country. it is not appropriate. there is no way in the world you could argue it is our interest to put an ally of ours, such as important ally of israel at risk by following such a ridiculous idea, the notion, these are notions being pushed and prodded along the way by senators mccain and graham and we shouldn't, we shouldn't think of them as anything more than that. melisssa: lou dobbs, thank you so much. see lou here every day at this time. and of course 7:00 and 10:00 p.m. eastern. catch former congressman dennis kucinich on the four separate investigations into the irs scandal in
washington. that is just growing. it is on fire. >> indeed it should. lori: another investigation just growing, sac capital. will sac's steve cohen keep it all in the family? with charlie gasparino, what the future holds for this hedge fund. melisssa: economist smackdown. why they're calling out "new york times" economist that never happens withivil. krugman. that is shocking. take a look at the 10-year as we head out to break. lori: i was glancing down up 2.11% up 10 basis points. with a big rally in bonds they're selling treasurys. that consumer sentiment report really setting the tone. the economy is looking better. let's get out of the safe haven. back in a moment.
>> i'm cheryl casone with your fox business brief. there is post-memorial day rally on wall street with the dow and the s&p 500 on track to close at new record highs. take a look at the dow right now. we're higher by 120 points but we're well off session highs. shares of lender processing services are on the rise of news of a buyout. fidelity financial is buying the mortgage services provider for $290 million for cash and stock. fidelity plans to combine lender processing with its business. thomas h. lee offered 381 million in cash. coty is making a play
lori: and according to our fox business senior correspondent charlie gasparino steve cohen may be getting ready to show that he is a family man as in family office. will sac close itself to outside investors in the wake of the ongoing government probe, charlie? >> what we do know is this. this is from sources close to sac they're at least drawing up broad plans o do this. now there have been reports i believe in bloomberg earlier last week he was doing this as part of a settlement deal with the government to settle these long-standing charges that involved insider trading and threatened to close down the
fund. we understand this is somewhat different. this is what we understand is a preemptive move. and a move preemptive in terms not related to the government per se. it is related to the fact that they will get a lot of redemptions. we're talking about is, if you think about it, 9 billion is his money. 5 billion is outside money. if just blackstone alone pulls out it is 550 million. you're starting to chip away at the 5 billion and there is nothing left with all these probes. so what they're doing internally we understand drawing up plans to convert this thing into a family office. so, what does this really mean? this means that sac capital, one of the biggest hedge funds in the world, maybe the most preeminent hedge fund at least in america, will cease to be a business if they follow through with this. it will be, what george soros does, managing the money of george soros. in this case it will be managing the money of steve cohen. it has 1,000 employees f this goes into effect you will see many of those employees leave. they would have to leave because it will be a much
smaller operation. remember one of the things that keep those employees, all those analysts and traders there, these are high-priced individuals the fact that steve cohen charges some of the highest fees in the business. a 3% management fee when on wall street, in the hedge fund business it is normally 2% and he skims off the profits 50%. generally it is a 2 and 20%, it is a 20% skim. that means he is allowed to pay for a lot of the best in the business. obviously if you cease to be a regular hedge fund you can't charge those fees. ie, a lot of the people go. so this is what i understand is in the works. i can't tell you if it is going to happen. i can tell you that we spoke to a few portfolio managers, people that run fund to funds and the indication they're getting from inside cohen's operations this is the way it's going. whether it happens or not, a lot remains to be seen. this is obviously one of the more fluid stories of the new year, of the summer. i think we'll know which way
this foes in terms of indictments, in terms of charges from the u.s. attorney's office in manhattan in the next month and depending what those charges are we'll know whether he stays in business or becomes a family office. lori: the latest there on sac and steve cohen. thank you, charlie. melisssa: as we do every 15 minutes let's check the markets. keith bliss is on the floor of the new york stock exchange. and keith, the dow is till up better than 100 points. trimming our gains here. how come? >> you will see that. it will move back and forth a little bit here as we move through the afternoon hours. i will anticipate we see money coming in toward the close like we see on all these strong days and try to capture what little dip you can find inside of a pretty frothy market like this. melisssa: what do you think of the main driver is today? was it economic reports from the u.s.? do you think that it was word from overseas that those, central banks are going to be accommodative as they have been for a while? >> yeah, i think we have a trifecta of good news which
really fueled the rally. bog and prime minister abe basically saying they will do whatever it takes to get the economy going to get inflation up to 2 1/2 to 3%. housing numbers were spectacular, case-shiller number. consumer sentiment came out, the consumer sentiment -- con con is feeling about the consumer feeling good about themselves and spending money and that is really what they're pointing towards. melisssa: what do you look for the rest of the week? what is the big signpost that will color the way you trade? >> not much at all. melisssa: really? >> yeah. because this is become a market driven off fed speak and noises. melisssa: right. >> anything coming out of then we'll trade off the noise right there. melisssa: keith bliss, thanks so much. >> my pleasure. lori: more trouble on the high seas. another cruise ship is forced to dock early as fire burned through several decks of royal caribbean's grandeur of the seas ship.
the fire began very early monday morning and burned almost two hours before being put out. no injure press were reported. passengers managed to escape last night as royal caribbean arranged charter flights all the way home. while the cruise line sup 47% over the last year, today it is trading down 1 1/2%. it retreated some. this is off .8 of 1%. no block gold for the golden state. state lawmakers are rushing to stop america's resurgent energy boom in california. here are some of today's winners on the nasdaq. back in a moment.
in the golden state. fox news's claudia cowan joins us with the new rush to clamp down on tracking and all the profits that go with it. claudia. >> hi, melissa. the flurry of bills comes in response to the growing buzz over the monterey shale, a vast geologic formation in central california where talk of expanded fracking is sparking estimates being able to access some 15 billion barrels of oil as well as millions of new jobs and huge contributions to the domestic energy supply but a number about democratic lawmakers in sacramento are saying not so fast and introduced measures cracking down on the controversial technology. some of the bills take aim at how crude is extracted from rock layers beyond the reach of conventional drilling. others call for full disclosure of the chemicals used in the high pressure process, how they're removed and where they're stored. and one seeks a moratorium until more studies are done on the potential risks. >> with hydraulic fracturing,00
of gallons of water, laced with chemicals, sand and going horizontally underground, we don't know, we don't know enough. >> a standard step in oil districting fracking has been used in california for decade and has a clean safety record here. bills seeking more studies and rules at this point premature and could jeopardize a potential bonanza. >> why would you want to curtail energy production with a technology that has proved to be safe and deny the folks in the regions of the state who, where those benefits are going to accrue, that opportunity? that doesn't make any sense. >> meantime state regulators just released their own preliminary rules which, when approved, they argue will make anti-fracking laws unnecessary. but some legislators are not convinced hat those regulations will do or go far enough as energy companies eye the vast monterey shale and the promise of california's
biggest boom ever. melissa. melisssa: that formation is enormous. it could solve some of california's economic problems. when you talk to the folks that are against it, was there any talk about north dakota the fact they have 3% unemployment? that somebody at a burger king can become a manager and get a $5,000 bonus because they're so desperate for employees in the state? any talk about the kind of jobs it would create? >> right. and in their estimates more than two million jobs here in california alone as a result of this expanded fracking, if it in fact unfolds the way that supporters would like to see it unfold. look, everybody here i think is very keen to the idea of creating more jobs and having this economic boom. even governor jerry brown, who is a very green-minded governor is saying the potential here is enormous. what these democratic lawmakers say though, nothing is worth the risk of our health, of increased pollution, of contaminated groundwater supplies. let's learn about the potential risks.
then move ahead, if the studies show that it is safe and get all of those economic benefits that would then follow. they're saying let's take it slow. hydraulic fracking. we don't know enough about it. the technique is changing and we just don't know the potential risks here. so let's study it more. then if it works, great, all the benefits will follow. that is what they're saying. >> we'll see if that is sincere or a stalling tactic. claudia, thanks so much for the report. >> you're welcome. lori: those economists at it again. paul krugman known for many things but uncivil behavior usually not on the list. harvard professors, are accusing nobel prize-winning economist saying krugman is unfairly critsizing their work on negative effects of too much debt, calling him out saturday in letter saying quote, we have experienced your spectacularly uncivil behavior the past few weeks. your characterization of our work and of our policy impact is selective and shallow. krugman fired back in a
"new york times" blog post titled, reinhardt and row governor are not happy. the failure to clear up this misconception of debt levels and economic growth has done a great deal of harm. i don't think anyone knows the bottom line what is really the problem with the economy or what stalled it out. melisssa: when you read krugman writes about other people he always hits below the belt. he takes it to personal level and goes on the attack. now somebody is calling him out on it, saying come on. lori: all fair in love and war or economic. >> back from a long holiday weekend already thinking about a getaway? we have a new hot spot for you. bangkok. beat out london as the world's number one tourist hot spot. i was shocked by this according to mastercard global destination cities index, bangkok, thailand, is expected to receive almost 16 million tourists in 2013. thailand's capital has been drawing in tourists especially chinese tourists with its luxury shopping
malls. its shopping mall is the world's second most photographed location on inat that gram. what do you think? are you ready to go to bangkok? lori: i take a vacation. i will go to bangkok. melisssa: did you see "hangover 2", was it? lori: three. melisssa: they went to bangkok. i don't know. anyway. coming up tonight on "money," lori we have the founder of z street to discuss us exclusively how jewish group like z street think they are the targets of irs. they filed suit against the irs back in 2010 saying they received the same treatment they feel is related to their support of israel. very interesting. she will come on live at 5:00 p.m. eastern here on fox business to talk about that as this irs scandal gets bigger and bigger and bigger. lori: certainly is. coming up next hour here president obama will talk cybersecurity with china's president next week and former homeland security secretary tom ridge says the
president needs to get tough with the chinese. tracy byrnes, ashley webster's guest next hour right here on fox business. don't miss it. i want to make things more secure. [ whirring ] [ dog barks ] i want to treat mo dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do. even better. ♪
ashley: good afternoon, everybody, i'm ashley webster. tracy: i'm tracy byrnes. stocks kick off summer with a rally as consumer confidence soars. how long will it be before the fed throws cold water on this party? ashley: meantime the cyber threat. chinese hackers reportedly gaining access to our most critical weapons systems. we'll talk to former homeland security secretary tom ridge about what exactly we can do to protect ourselves. tracy: trying to get away from the scandals in d.c., president obama visits the jersey shore seven months after superstorm sandy. i don't know about him but i hope he, i know i think that there's not enough work that was done. ashley: getting done? not enough help?
tracy: no. ashley: we'll get into that. first, top of the hour, time for stocks. let's get to nicole petallides on the floor of the new york stock exchange. nicole, we're certainly in the positive but well off the highs of the day. >> right, ashley and tracy, we saw a market that took off at the opening bell. we saw the dow up over 200 points. the highest point it was 15,521. so it has obviously since pulled back from those levels but still a gain of 93 points. there are some guys who jokingly say down on the day. they know this is a back and forth market. there are some people who called the rally a melt-up. one of the analysts don't believe it is fundamentals. they think it is push and pull. euphoria of fed bond buying and money printing but the big picture you got in economic news that was pretty good. case-shiller numbers showed home prices were on the rise. that is good news. consumer confidence rose to five-year highs that is
stellar. we saw names, 25 of 30 dow components are higher the some are already pulled back. about 27 higher at this point. you do see some names that are hitting some new highs including boeing and chevron and american express and 3m. other names, we're seeing banks higher. jpmorgan for example, and bank of america are higher. i saw names like united health care, cisco and disney leading the way in percentage terms. there is plenty to speak of and up arrows. we're off the highs of the day, still clocking in gains of over 1 1/2%. ashley: not going to complain about up 93 on the dow. nicole, thank you so much. tracy: let's talk more about today's rally and where stocks are headed. we're joined by doing coat, chief market -- doug cote, ing. it is what it is and going up. on the flipside you have the bond bears because everyone said there would be a great bond rotation. that is not happening either. maybe traders are confused so they have no choice to
but to throw water on it. >> call it a tale of two markets. equity euphoria driven by central bank stimulus. you have great numbers for the consumer, consumer confidence, case-shiller home prices but then on the other side bond yields, i know they're, 10-year is up to 2.1 but that's pretty low compared to expectations at the beginning of the year. bond yields are kind of giving the indication we have problems especially in europe. look at europe. i think you need to be fully allocated but not overallocated to equities. you have to look and be normal. and in bond and stocks. ashley: so, doug, could we keep this pace up through the end of the year? i mean seriously, can we do that? >> well, not quite this but we're up 18% and we're not even halfway through. i think that would be a historic rise. i think you can expect some volatility but, if you look at the average investor, they are still underallocated equities. i think there is a lot of
opportunity as this market continues to go up. there's pressure. there will be capitulation i heard you talk about, melt-up. capitulation on the upside but i think with volatility so low right now definitely we could go back up to 20 very quickly. that is where i think you have some risk control assets and bonds, very important but you got to play this market both way, the tale of two markets. tracy: the bond angle is really interesting. again we've got a lot of people saying it's over, get out, watch inflation. inflation is nowhere to be found. interest rate risk. where do you stand and what should i be doing with my bond portfolio? >> the number one reason to own bonds is volatility control, it is a safe asset. secondary or third is income. you shouldn't worry about inflation. you use bonds for safety so you can buy more equities. tracy: that's a great point. ashley: doug, i want to get back to the economy. just as you mentioned. look we had consumer
confidence hitting a high we haven't seen in more than five years. home prices continue to gain. if the fed starts to taper, could that be a buying opportunity? >> well, i don't buy that the fed is going to taper at all because their number one or one of their very important indkitetores is inflation. if you looked at cpi last week, it was 1.1%. their goal is 2%. in some respects the fed is failing. they're not even achieving their inflation target with spending a trillion dollars of their monetary stimulus. watch that inflation number.% i don't believe that the fed is going to taper off through the end of the year, based on that number. tracy: let's talk quickly about equities then. you say mid-caps, not large caps. large caps had its day. i presume that is what you're going to say. what kind of mid-cap stocks are you buying? >> i like all mid-caps. i like the mid-caps are the sweet spot of the equity market because everybody is
worried about is it too late to get into this rally? maybe for large cap and but not mid-cap and down the diversification curve. within mid-cap, consumer discretionary. why? the fed is focused on helping the consumer. look at housing. ashley: doug, i wanted to mention the energy sector too. you mentioned in your notes this country will be fully energy independent a lot quicker than people have predicted. how as an investor should i be playing that sector? >> well, broadly because there is a couple things going on with energy. one our trade deficit that we've had since 1975, i believe goes to a trade surplus within two years. you saw a front page article in the "wall street journal", opec is in shambles right now because they said we're not worried about energy independence in the united states. they are worried. it really lowers our risk globally but look at the users more than the producers. the users are manufacturing. i think this is, we have an
80% cost advantage in natural gas prices, a source of electricity. if you're manufacturer globally you want to move to the united states to get that cost advantage. very important. tracy: doug, good stuff on a tuesday morning after a holiday. you're bright eyed and bushy tailed. thank you, sir. >> my pleasure. ashley: president obama speaking from the jersey shore the last hour after touring the recovery effort after hurricane sandy which hit seven months ago. peter barnes at the white house with more on peter. >> that's right, ashley. president obama headed back to new jersey seven months after hurricane sandy. he was met again and toured with republican governor chris christie. he wanted to see how the rebuilding and recovery efforts are going, especially with the start of the summer holiday vacation season which is so critical to the jersey shore. congress, as you recall, approved $60 million in federal assistance for
new jersey along with new york and connecticut. here's the president. >> for somebody who hasn't seen their home rebuilt yet, or is still trying to get their business up and running again after all those loss, we don't want them to think somehow we checked a box and we moved on. that is part of the reason i came back. >> but one conservative analyst said that, pointed out this is also an opportunity for the president to got out of town, get away from all the scandals down here with the irs and investigations of the news media and try to change the discussion an debought a bit. ashley. back to you. ashley: from one storm to another. peter, also we understand that there are going to be some changes with the president's economic advisors. who is leaving? >> that's right after about a year and a half or so, alan krueger, who is the chairman of the council of economic advisors is going to be leaving, returning to princeton university to
teach. this is not a surprise. the tenured professors at a lot of these top universities only get leaves% of absences for about two years when they go and do government service. so it would be a about two years for him ann our colleague ed henry confirming that kruger is leaving. i just want to tell you, i just saw alan walk by a few minutes ago here at the white house. he was in a blue blazer and in jeans. i asked him, are you had hadded back it princeton? he wouldn't comment. but it look like he was getting ready to go back to the lecture hall with the jeans. ashley: was he carrying rest of his belongings? >> going collegiate. definitely informal here today at the white house. ashley: peter barnes, thank you so much. tracy: coming up stocks are rallying on better-than-expected economic data but this could mean an end to the fed ease money policy we'll hear from
a economist who says rates could be actually heading higher this year. ashley: chinese hackers breach our weapons design. coming up we'll talk to former homeland security secretary tom ridge. first as we do at this time every day, let's take a look how oil is trading with the markets still in rally mode. oil too, moving higher. up more than a buck a barrel at 95.24. we'll be right back. [ malannouncer ] we gave the new e-class some of the most advanced driver systems ever made. stereoscopic vision... distronic plus braking... lane keeping and steering assist...
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tracy: that time of day. got to make some money. charles payne is here. this hour he is looking at today's relentless market rally, and how, well, it can make money for us. >> two hours ago it might have been relentless. it is losing a little bit of steam. you know what i thought was interesting, guys? last week the narrative was the market only goes up if
we get bad news. ashley: the fed would keep pumping the money. >> we start out today with two pretty good numbers with housing and consumer confidence and the market is up over 200 points. you're like, what the heck is going on? that is really the question, how does this market make the transition to a better domestic economy? you got the jobs numbers next friday. that will loom large. i was happy to see we were able to rally up on that. that is common sense. ultimately we need a strong american economy to keep this rally going. ashley: we're in a no-lose situation, aren't we? until we get to that point theoretically the fed will keep propping this up. >> that's just it. these two numbers came out and they were both well above estimates. you would think that the idea that the fed wants housing to get better. certainly there is evidence of that. fed wants the investor to get out there and spend and maybe confidence leads to that knee-jerk reaction was 100% different than you might have thought it would have been thursday or
wednesday last week. tracy: still everyone is trying to pour cold water on this. why not not just go with it? >> from a stock point of view i've been going with it but also what is interesting too, we talk the headlines alot but beneath the surface consumer confidence was strong but nobody is cocky. give you an example. business conditions, good, that improved but the bad number is 26. good number is 18.8. jobs plentiful, jobs hard to get 36.1. in fact people said incomes, people who believe their that incomes will go higher, that decrease month over month. maybe beneath the surface they were great but maybe not as great as we thought they were back to ashley's point once you look at them. again this market is hard to figure out today. really, really is. i do worry, my biggest concern about this rally is the domestic economy. the u.s. economy. i'm not worried about the global economy. i'm not worried about europe. i'm so concerned about us getting going. tracy: even inches a little,
little bit, better than nothing. >> we're heading in the right direction. we have to get moore oomph. gdp at 2% is not enough particularly at this stage of the so-called recovery. tracy: charles payne, thank you very much. ashley: it is quarter past the hour. time to get to nicole petallides at the nyse. nicole is watching big winners in today's session. >> right. looking at tiffany and tesla, two names that certainly have grabbed headlines on wall street not only today but all year. here is a look right now. realls point he was noting about the global economy versus here at home. tiffany, for example, did very well abroad over in asia in particular despite the weakened yen. tiffany did well with sales numbers in china and japan. also a couple of things. they had a 175-year anniversary. their sales were great. they had "the great gatsby" valentine's day. that is up 3 1/2% for
tiffany. tesla gains benefits from the government being a green company with their electric cars. the company sup 11.5% today. broke through 100 bucks, 105 to be specific. it is at 104.33. posted its first profit ever and continues to grow. their car, the model s, ashley and tracy, got a near-perfect raiding from consumer points, 99 out of the 100. that didn't hurt either. ashley: interesting chart taking off. nicole, we'll be back with you at the bottom of the hour. >> coming up president obama will talk security with china's president. former homeland security secretary tom ridge says the president needs to get tough. ashley: we heard it all before, haven't we? first let's see how the dollar is moving right now as we head back through the trading week after a long weekend here in the u.s. guess what? the dollar is up against all the securities. the pound is also down to
justice department's pursuit of reporters records. the panel is looking at possible inconsistencies when holder testified to congress that he wasn't up to speed on a possible prosecutions of the press in a leaks case. more than 2,000 passengers from the royal caribbean cruise cut short by a fire are expected to be back in baltimore today. the grandeur of the seas caught fire at sea about 3:00 a.m. yesterday but no injuries were reported the ntsb and the coast guard are investigating the cause of the fire. in california fire officials say while fires in the mountain just north of santa barbara is only 10% contained. the blaze that began late yesterday has grown to three square miles and evacuations are still in place of the those are your headlines. i'm lauren green. now back to ashley and tracy. tracy: lauren green, thank you very, very much. >> sure. tracy: they're at it again. china's continuing its rampant use of cyber espionage, stealing some of our nation's most coveted see questions and that could
put our defense systems in jeopardy. jo ling kent is on the store. she joins us with more. this is scary and goes pretty deep, doesn't it? >> it has been going on for a long time. basically "the washington post" reported that two dozen critical weapons systems were hacked, their designs were stolen by the chinese. specifics for the missile defense system, the patriot, the aegis, along with design aircraft like the f/a18 hornet, the black hillsborough county kel topper, we're talking about a long list here. this is affecting major contractors some who doesn't know this was happening to them until government authorities like the fbi knocked on their doors and said, hey, this is happening this could give the chinese a huge advantage of billions of dollars they skipping forward their own research and taking someone else's. it is happening to other countries. reports in australia overnight, their version of a cia headquarters have been
stolen by the chinese. beijing continues to deny all the reports saying they don't support the hacking. tracy: this is crazy. diplomacy, excuse me, is it working? we have governor tom ridge coming on next saying president obama better get tough with this? as ash, said, we heard this for years. >> that's right. basically it is happening. the dialogue is happening at every single level but the public -- clearly didn't work out. this will be a top level issue at every single meeting with strategic and economic dialogue and meeting with president obama and xi jinping in california. washington actually banned non-defense agencies from nasa from buying chinese-made computer technology. that's a step. that is temporary measure in the spending bill. if passed it will be expiring september 30th. right now the big idea to fix the problem comes from john huntsman an dennis blair. a report came out last week, that u.s. businesses that invest in cyberdefense systems and allow them to
monitor their networks in real-time, basically guarding their own networks. the investment would free someone's computer if they stole documents they weren't supposed to have. they don't say hack back and attack back but the recommendations they're pretty aggresive. the problem, if you're a business, you do this, the chinese find out, where is your business going to go? it definitely will affect it. diplomacy, basically the two sides are talking past each other. i actually spoke to some son lifts on the -- some analyst on the phone they're fighting latest attack when in reality the chinese hackers are onto the next thing. we have to be thinking toward the future. do you do it with a private sector lead or ceo or something like that? china fees business could be down the tubes. ashley: that's true. tracy: that's a tough one, jo ling kent. have to hire hackers, we said that. ashley: fbi said that domestically but how do you do that with the chinese? jo, thanks so much. >> thank you.
ashley: to continue the theme, sigher security will be one of the issues president obama talks with the chinese president when the two leaders meet next week. our next guest says it is time for the president to get tough. joining us governor tom ridge, former homeland security secretary. governor, thanks so much for joining us. it feels like an overused expression but it is groundhog day. we keep saying the same things and pointing fingers at china, iran or whoever, at what point do we draw a line in the sand and say enough is enough? >> i suspect, ashley, we've already drawn the line in the sand but rhetorical enough is enough is obviously very ineffective. ashley: yeah. >> while we look to government to try to resolve the problems with iran and china, and frankly doesn't make too much difference where the hackers are located, at the end of the day there is joint responsibility and part of the responsibility rests with ceos and boards of directors of companies that have been hacked into. seems if the fbi has to
knock on your door and tell you there has been a major incursion or two, perhaps you're not doing your job. like homeland security. everybody has a role to play. the whole notion we shouldn't be surprised anymore. it is an ongoing effort, day-to-day. we should act if they're inside your system and network and do everything you can to create a defense in depth or security in depth to identify and deal with it. right now we're too passive about these things. ashley: we are. now we hear news from the "washington post" report that they have had a good look at a lot of weapons systems. they have also, i'm sure, had a good look at some of the critical infrastructure of this country. i mean, literally the horse has already bolted. how can we put up, why can't we come up with the technology to stop it in its tracks? >> frankly i think, first of all, there is sufficient public evidence or, to suggest that many of the incursions could have been avoided with just off the
shelf technology. it is almost in a, like an invisible enemy. we're really good dealing with physical attacks but all of a sudden the whole virtual world is kind of vague and invisible. we kind of defered that. i think frankly we need, and here's where the private sector has a role to play. look, the president's will have the cation and what the military does or whether intelligence agencies do and what everybody else does we'll leave it up to them. that is below the radar. we're quite confident they will do something in response but there's a joint responsibility within the corporate community to do far more than they have ever done before. they need a build a culture of resiliency. they have to build a defense in depth, security in depth. what are the crown jewels? do you have access controls? do you have encryption dealing with your crown jewels? do you have anti-virus and spam software? do you have patch management? you bo down the long list of things and quite candidly i don't think until recent
days there has been too many, too much emphasis on this in the corporate boardrooms and up at the ceo level. about time there became much greater emphasis. there is a role to be played there. ashley: is it a cost issue, governor, with these companies? are they cutting costs? they don't want to have to invest the tile and money into these systems? >> ashley, you know i think that's a good question and my answer to that is simply, you have stakeholders whether you're a public company or a private company you have stakeholders to whom you are responsible. your employees, your customers, your communities and board of direct, to. frankly if you're a publicly-traded company to your shareholders. if you were the ceo, could you look in the mirror and say i have done everything i can. i have been personally involved in insuring we're doing everything we can with regard to best practices and tactics to minimize the risk. quite sadly based on limited experience we've had the answer is, not a lot of ceos view it as being part of
their overall responsibility. i mean in a more granular specific way. looking at it from their eyes, rather than just defering it to the chief information officer or chief technology officer. it has to get to the top. it is about profitability. it is about brand. it is about your economic security and national security. there is joint responsibility between the government and private sector and i'm not confident right now the private sector is doing everything they can to insure their part of the responsibility. >> hopefully they will get the message soon here. thank you, governor tom ridge, thanks for talking with us. >> good talking to you, ashley. tracy: you have to take it into your own hands right now. ashley: seems like the hackers can walk into any company's website. tracy: right. ashley: they can get all the information they need and get out without companies even knowing. >> if you're a bank, god, the only thing you think about. still to come as the damage is assessed from last week's tornado in moore, oklahoma, many residents will be surprised to find out how
they acquired an all cash deal. this happened yesterday. valley and is a canadian company. they are keeping the whole thing, according to the ceo. this should rot in their horizons. back to you. ashley: thank you very much. tracy: they're are big questions about how well insurers are responding to claims when it comes to hurricane sandy. gerri willis is here with the details. there are so many people waiting on their money. gerri: yes. the reality is one and four
claims resulted in nothing. here is what some of the attorneys in these cases are saying. now they are lawsuits. some of these insurers are over claiming damage due to rain and water and under claiming wind. we are yet to see what the real answer is. tracy: i have seen people go through these things. you have never seen so much fine print and bs. gerri: that is true. tracy: now oklahoma people are up for the same issues. gerri: the people in oklahoma, they will not get the settlement they expected to get. for example, without the bulls
are much higher. people are expecting to get lower reimbursements for big ticket items like your roof. your house is a total loss, you get less than you expect. we have had some 25 billion. now companies are dialing back how much they want to pay for this. we solve this with hurricanes. we are seeing it all over again. people out there are very frustrated. we will be talking about this at the top of the show tonight, as well as why there are no inspector generals for 65% of the government.
tracy: "the willis report" tonight on the fox business network. make sure you tune in. ashley: thank you, gerri. the bank of choice for the criminal underworld. a $6 billion money laundering scheme. the suit claims that the company had more than 1 million users worldwide. this case may add weight to the argument that online exchanges should be regulated by the government. tracy: you think? ashley: just an example there. coaster rican online currency. tracy: stocks strong. all of this could mean the end of the bed easy money.
the dow is up 78 points. do not go anywhere. we will be right back. ♪ mbition. mbition. i'm thinking about china, brazil, india. the world's a big place. i want to be a part of it. ishares international etfs. emerging markets and single countries. find out why nine out of ten large professional iestors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus, which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal.
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assistant secretary for economic policy at the treasury department at the university of maryland. back when i was a student, i learned fundamental analysis. companies made money, stocks went up. >> it is partly the economic recovery finally kicking in. consumers are more confident. they are more confident about the job situation. tracy: that is what it is about. a lot of people point to the housing market. home prices are trending higher because people are confident in their jobs. >> yeah. you see that in many dimensions. you see home prices go up and the inventory for home prices and foreclosure going down.
that translates into spending and job creation. tracy: we had main street suffering while wall street, you know, traders were the only guys making money. will we eventually all come together on this or is this an entirely different world in the separation may be here to stay? >> the recovery is not sttong, but it is finally getting strong enough, that i think the americans can sense it. there is finally some conversion. it is not just wall street. tracy: what do we need then to keep this going? technology is replacing humans in many ways. what has to happen? >> yeah. it is hard.
we have companies that have been sitting on a lot of cash. there is a lot of technology that displaces workers. they need to have better education, better training and skills. the shift we have been seeing towards technology that ultimately, i think it makes us richer. tracy: there is so much bloody chaos going on in washington right now. are we done with washington politics? >> no. unfortunately, i think we are on a bit of a hiatus. hopefully, there will be some resolution before things get really bad again. tracy: it will be a little déjà
vu all over again. european unions still out there. it could just be a hiatus; right? >> that is right. they have this under control a little bit. they have not really solve their problem. that is a risk for us. tracy: thank you. >> bank you. ashley: a chicago train derailed and caught fire in baltimore. several buildings near this derailment have collapsed. so far, no reports of injuries. we will bring you developments as we get them. tracy: it is quarter till. time for stocks now as we do every 15 minutes. we had back to the new york stock exchange. what do you think about this market? is it reacting the way you would want it to right now? >> actually, i think that it is.
the market is still at a bit of an indecisive point right now. it will have reactionary forces upon it. i think people are still a little bit cautious here. they are not sure they want to jump in. i certainly would not be shorting the market here. you are seeing a little indecisiveness. tracy: you are seeing the glass half full versus the glass half empty. we are basically just taking the good news and running with it. >> yes. when you try to get underneath the headline number and really analyze it and you try to sell, you got your face ripped off. that was never a good strategy.
it is probably not a good thing to be completely short in this market here and. tracy: hitting your face ripped off is never a good strategy. thank you. ashley: four years hulu has been a big deal. dennis: reports are that a seven sooner has emerged. yahoo!. the currency could be preferable here. yahoo! is only the latest to have it had turned i hulu.
is it you guys are really buying? so far, ashley, everybody wants it. ashley: you are right. tracy: that is a fight. dennis: the three owners caught you did not like it until you heard it. ashley: thank you so much. tracy: coming up, we will tell you why unions are pulling their support from the president health care reform law. ashley: take a look at some of today's winners and losers. the dow back above 100. we will be right back. ♪
♪ ashley: talk about a 180. unions are now backtracking on their support to obamacare. what is? elizabeth macdonald has more on this. liz: they are against health reform because there are worries that it will make their old insurance coverage more costly. tracy: thank you, captain obvious. liz: you know what, we will back off. we are not as hot as we were on health reform. here are some quotes for you from union officials.
essentially, house reform makes an untruth about what the president said. this will be a trend that will pick up in speed and intensity. health insurance is part of collective bargaining contracts. you will see big fights. as you see more union workers say they do not like it, it could be a midterm election year. tracy: nancy pelosi. liz: that is right. i tell you, if we get some big name unions, possibly. we would lose our coverage.
we will be pushed into the exchanges. tracy: just like back in school. when you get a homework assignment, read it. this is a lesson to everybody. ashley: thank you. tracy: the united states is only the sixth happiest country in the world. kind of pathetic, if you ask me. ashley: that is it too bad. tracy: our neighbor to the north is the third happiest. that would be canada. sweden ranked second. for the third straight year, australia was named the happiest little country in the world. thanks in large part to its economy.
get out of the water or jump in and catch the next wave? the new silver lining and investing. dreaming of that cabin or beach cottage? mortgage rates with record lows. thanks loaning again. we will show you the best places in america to buy. countdown to the closing bell begins right now. ♪ liz: good afternoon, everybody. i am liz claman. it is the last hour of trading. we are keeping our eye on the developing story out of baltimore. a train has derailed. it has brought down some buildings, apparently. a fire was sparked. this happened just after 2: p