tv Making Money With Charles Payne FOX Business February 5, 2015 6:00pm-7:01pm EST
on. that's it for tonight's willis report. "making money" with charles payne is coming up next. have a great night. ♪ charles: i'm charles payne, and you're watching "making money." okay, the dow jones industrial average up 800 points since monday's low. great day for the bulls. guess what, a lot more than higher oil. the dow is on track for its best week in more than three years. twitter, they reported earnings. it's all over the place. let's go to nicole petallides on the floor of the new york stock exchange. nicole. >> charles, great for the bulls out there, and you know it. the dow was up 212 points. up 4% this week. what a move. oil above that 50-dollar mark. so key. lots of earnings. they're looking pretty good. on the dow jones industrial average all 30 names were in the green.
du pont, cisco systems. twitter is looking good in the after hours. came out with their fourth quarter numbers. revenue grew 97%. the rate of growth for the monthly users slowed significantly. that will be interesting to watch. gopro beat on the top and bottom lines. halted early in the early hours. one to watch tomorrow. down about 30% in the last three months. big deal. that was visor. we saw that haspiro moving to a new high. back to you, charles. >> there was a lot to this market besides oil going up. (?) all right, here to help us out. a long show. jim frischling is here to help us out. scottie nell hughes. news director. darrell. wells fargo institute president. great to have you on the show finally. love the bow tie. scott martin.
chief strategist. let's do it. dig into the first real, real deal. another triple digital move for the dow jones industrial average. i forget to tell you something, this time it had a lot more gusto. this is more than just oil. these are names you haven't heard of. a major supplier of building materials. ball corps. they make packaging and containers. what do you do with packaging and containers? great proxies for the domestic economy. today was sparked by the 15 billion-dollar deal nicole told you about. all cash. when i see companies use all cash. that tells me, i think my stock is worth more than cash. it will go higher. the market perfectly poised for a major break out. 18,000 on the dow. it depends on the jobs report.
how will we assess this. >> we had a lot of momentum coming into the previous jobs report only to be disappointed for the month of january, charles. there's no doubt, the action today was strong to quite strong. but it's still a volatile environment. meaning, if you have the weak stomach, don't go rushing in. wait for these big downdraft days. those are the days to buy. we're getting them more and more often even though the market is trending higher. >> people aren't wired that way. >> it's hard. charles: we know the axiom is buy low, sell high, we were down 100 points. the last thing people are thinking is to buy. >> it's hard. when the market is way down, when it looks like it's a complete watershed. 17,000 on the dow, those were the times to get in. we get set up for job numbers like tomorrow. we've been disappointed so far. >> today was not about oil. today was about earnings. today was about companies across-the-board.
it started with visor. (?) that is a real headwind. look at what's going on domestically. this is a corporate earnings -- it's going to be good enough that this momentum in the stock market and the earnings is going to continue. >> i agree. and i think what you're starting to see, charles, the consumer cyclical is taking legs. we know the stronger dollar is playing through. to jim's point, i do think the market is getting yanked by oil a little bit. we have these antitrades going on basically. you have oil going higher. rates going higher. gold going lower. you know, all the trends that have been intact for the last several weeks are reversing themselves. charles: let me ask you, there has to be a happy place where we don't want oil to go up too much. we don't want oil companies to keep firing people or canceling capex projects. these are things that
help our economy. is there a sweet spot? when oil goes up, stocks go down. where do you see that? north of 50, 55, oil goes sideways. >> yeah. i think we need to find a base, a new equilibrium in oil. i don't know where that's it. it's a ways away yet. >> sorry. i think we're in the bottom end of the range of which you highlighted. above 50, people are feeling a little less pressure. again, no change in supply and demand that caused the oil to plummet the way it did. and there was no change in supply and demand that caused it to rebound. this is trading activity. fifty, 60 plus oil. and we have a calm. we can focus on other things. consumer cyclicals. we'll talk about it more. what about corporate america. do you see them stepping up to the plate, scott? >> well, one of the things they haven't done is step up on the capex side. isn't that argument going in this time last
year. capex was supposed to save everything. because oil is low. the average family is saving a couple bucks on gasoline, that is going back into th into the economy. does that crimp the consumer if it goes up again? charles: i don't think it will personally. listen, i'm really shocked tha that corporate america has been able to go this long with these factories. they have some old stuff they're using at their end. we need real brick-and-mortar rebuilding as well. let's blow the whistle here. let's go to our first payne's investment playbook here. once again, talking consumer names here. they have led the charge, you know, from estee lauder to under armour. even though under armour stock pulled back a little bit. their numbers are absolutely phenomenal. lost in all the earnings news is that trade
deficit. that was out today. the biggest gap in two years. in fact, the biggest one-month surgery since july 2009. the deficit almost $47 billion. i mean, this is significantly higher than anyone thought. the street was looking for 38 billion. driven by increases by our trading buddies. china and germany. i mean, you ever wonder why there's so much money. there are more dollar bills outside of america than in america. because we buy stuff from everybody around the planet. thethey gave us their stuff. we give them our dollar bills. can the american consumer save this economy, but the entire planet? according to our guest, this is his chart, it will help certain sectors. he's saying, the technology, consumer discretionary. industrials. i happen to think he's right. i want to find out from the panel if they can save the entire planet.
i'll start with you darrell. great chart there. those three areas up. can we save the entire planet? >> actually the entire planet has been on the back of the us consumer for the better part of the decade. i'm not sure they can save the entire planet. that said, there's no doubt that the consumer has the most tailwinds in eight years. employment is up. home prices are up. confidence is up. gas prices are down. mortgage rates are down. we're in a 3% -- charles: are you calling this a perfect storm? >> it's a goldilocks scenario. we think that favors industrials, technology, and to your point, consumer discretionary. charles: there's someone in new guinea weaving a basket. i need people in america to buy this bad bu boy. will that happen. >> the us can't save the global economy. the trade deficit, a lot of people got this wrong. it wasn't hard to figure
out why we're at. it's weak foreign growth and it's a strong dollar. charles: right. >> and these headwinds and problems these multi nationals are talking about is playing out in the numbers. to darrell's point, the consumer, they will feel this benefit from cheaper gas. it's a little bit of a lag. i was thinking it would take effect sooner. i think the consumer will benefit from it. charles: the dna of americans -- >> have you guys noticed on these earnings report, they say, oh, we've been hit with foreign issues. why is that such a big surprise. this has been rallying for eight months, the dollar. charles: usually when will i do my work, i take out the noise. >> is it an excuse? charles: it's been so dramatic this time around, it's hard to totally ignore. >> but it didn't just happen last week. charles: no, it didn't. can the american consumer save the world. >> i like to be optimistic. the economy is still
weak. a little wage growth. not enough like the 1990s. you haven't seen that 4% growth on an annually basis. we're still struggling. to sit there and say -- the iaf group said they'll have to roll out 5 billion in debt over the next four years, we can't handle that. oklahoma city folks can't handle it like they could maybe in the past. >> four of the last six quarters us gdp over 3.5%. charles: although -- >> negative one in there, darrell. a negative number in there. >> with the polar plunge. polar vortex. charles: it's hard not to think that the 2.6% number will come down. >> yeah. half a point. >> and america is going at it alone. before we had a couple of other economies to help hold it. we're on our own outside of germany maybe. charles: when the economy crashes around the world, china -- listen they might have built a lot of empty cities.
they might have built the most impressive high speed trains -- >> i got back from china a week and a half ago. we spent two weeks in shanghai, hong kong, there are pretty good stories there. the government is doing the right things to bring fiscal reform. more monetary easing. >> i can .3 or four areas in detroit that are doing well. but it's a disaster. >> that person making a basket may have a customer in china too. (?) all right they have a great track record. now i'm beginning to change my mind. i'm talking about the pharaohs of wall street. back in three minutes. this show is amazing. a lot of earnings to talk about. some good. some bad. but we'll make you money. we're back in three minutes. ♪
charles: all right, guys. got to blow the whistle. open up another page in payne's investment playbook. one of the first things i did at this show, i took a swipe at those activist investors. i call them the pharaohs of wall street. i'm starting to change my mind a little bit. this is the cover of next week economist magazine. it actually portrays these activists as the savior of capitalism. capitalism's unlikely heroes. now, i'm not prepared to go that far, but i will say that these guys are shaking things up with these giant award chests. and probably more powerful than the cash, the soapbox these guys have. instant ability to push around stock prices. one fifth of all the
cash pouring into hedge funds goes to these activists. these guys are loaded $100 billion. there is a question as to whether this is still green melon drag. how committed are these guys really to turn around the companies? the investments might not matter, for the most part businesses are doing extraordinarily well. in some cases, though, you can see where they were probably bullies. i'll give you a case in point. bill ackman, he hounded him to death. pushed him into activists. which is a drug maker from ireland. they fired all the management. a lot of people lost their jobs. welled i have to tell you something, the company reported this morning, blew the cover off the ball. why would you fire anyone that could shave shave this company and could take it to single digits -- let's talk about the pharaohs and investors and how these people will dominate. these guys will be
packing and doing big game hunting. that takes us to our next real, real deal, jim. these guys, they're on the loose. they're the hos hottest guys and make things happen. >> i had to defend the ackman and what not for their role. i'll take maybe the devil's advocate position. so much money being raised and so few companies -- there are a lot of companies that go after -- i worry how many companies these guys can do good things with. they try to return money to shareholders. they try to cut costs and do spin-offs. these guys do it with small equity stakes. that soapbox you talked about. i'm worried with a fifth of all funds going into -- put the name activist next to their name. i'm worried about how many guys are chasing fewer and fewer deals. charles: what do you think, scottie? i'm feeling better about them. but i'm a little -- >> you get the
advantage, the maturity of them. you deal with ceos that tweet out their earnings and do stupid things. tweet out comments. their stockholders have to -- charles: i wish the ceo of gopro would tweet something out. >> exactly. that's the one thing these guys do. if they want your company to succeed, it will succeed. they'll let the company live. it will be stronger afterwards. >> guess what happens, if you're in that name that gets the activist plunge, you're darn happy. when carl icahn a gets in. ackman, there are guys that raise the price for shareholders. ebay is one. uncle karl gave you a couple bucks to get out. charles: we saw du pont say they would fight tooth and nail. then the stock is up today. >> the 344 activist situations 2014, 75% of
them, the activists got what they wanted. which is big. they're achieving the results they want. it's taking far and far less equity stakes to do it. sometimes they actually lose, but they really win by getting -- charles: you remember the green mel situation. are there som some similarities. they don't have a great track record. they're there for a year and move on to the next company. >> back in those days, it was more hostile situations. now it's more collaborative. there's a term called "suggestivism," which is trying to help and be right there next to the board -- >> they team up with the ceo and say, listen, we won't try to kick you out. we'll try to help you. and it's good for you if the stock price goes up because your shareholders make money. you make money.
everybody wins. you're not out of a job w they're seen as the superhero. fabulous interview with warren buffett. he was talking about oriental trading. having a hard time with their current partner. (?) and warren buffett and berkshire hathaway was able to come in and now you get at least four junk pieces of mail from. it works. it's great. charles: this stuff doesn't happen in europe because we have this sort of laissez-faire capitalism. this is a de facto way. the devoid was filled where regulators wouldn't fill it. these guys would fill it. >> i'm okay with letting the markets play out. it's not black or white. the short-term focus of a lot of these guys is going to result -- it would o iitwill be unintended. layoffs. spin-offs. lack of long-term growth because you want the money now. that's a negative. charles: let's go to the real, real deal on this and talk about some potential deals. what are some deals that these guys may be looking at this year?
>> i think there's some fun ones. in the last couple years, it's been health care and pharma. we've seen that recently. it was in the tech. two names you probably know darn well. charles: yahoo? >> twitter and netflix. charles: really? wasn't icahn involved in that one way or another? >> yeah, and he got out. but it's still a name ripe for the takeover. just like twitter. they're showing they still have that great subscriber base in their earnings. that's what you want want. it's content. but you also want the eyeballs. and there's companies out there. whether apple, google, amazon, their friends at facebook, they want that too. they will take them over. >> twitter and google have this great new partnership that will be wonderful. when you google up a name, you'll get their twitter feed, which can be dangerous. charles: i think that was smart for them to put that out there. the ceo of twitter is under a lot of pressure.
deservedly so, but he had a good day so far. >> i agree with scott. tech has the only sector that has more cash than debt. they have the money to be able to do the m&a. you know, all the types of things that could raise dividends and buybacks. all the stuff they want to in that space. i'd also watch energy. charles: already some consolidation too. what do you think? >> i thought tech would be the hot topic. i went with brick-and-mortar. there's activist investors pushing tax inversion rules not been changed. still benefit to execute one. hard to get growth organically. one of the big six hotel companies. companies. intercontinental could be a play. charles: i'm go with whole foods. "strange inheritance," people are watching it. off the chain.
it's a great show. monday through thursday on fbn at 9:00 p.m. i'll answer your questions about how the market reacts to earnings. i have to tell you something, it could be very manic and dangerous. it's when people lose a lot of money and you rip out a lot of hair. take a look at jim. be back in three minutes. ♪
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here is a good one and. why do companies like take to be quarterly estimates but the prices drop? i think that is an amazing question for earning season because this is the most frustrating time to be an investor it will destroy portfolios more than anything else i can think of. more often than not from knee-jerk selling because they didn't make the short-term jump from all street nothing matters more than a guidance. most will provide for their current quarter some for the entire year since the knee-jerk moves are based on expectation is a field rule of thumb low hurdles lowe promises if you can clear them sometimes that backfires. the quality of earnings is very important and the gross operating margins is great.
because the bottom line can be manipulated. and how much it cost a creative product i want to have pricing power. many analysts put emphasis on the seal the and the actual words. then there is the earnings. the actual news. sometimes it is old news. but if you have a company that is missing or beating the can give you a feel of what is going on down the road. i know it is a dumb game that can be exaggerated i personally but love to see by your annual reports. management teams that tried to sway wall street will not be successful in the long run.
and margins expand. l looks like maybe they take marketshare then i also understand your frustration. >> i think this is a good company but what frustrates investors they had a history of delays. charles: go. is down $6. it is absolutely crazy. charles: but after earnings how you do that initial reaction? that they put out the products that the customers want.
to be in a unique category. stick the products are good the stock is up 50%. but if you look at previous earnings but you should be punished. >> but it will back fill some of that if you had some cash. >> guy bush and keep it. if the guidance is good. >> how you handle these earnings? that may be off 1 penny. >>. >> you just have to look through which. i agree. to have the incentive structure system of corporate ceo and management teams with high church
metrics it makes all the sense in the world to smooth investor returns. charles: that is a great question. always be sure to tweets me with these questions and make sure you to an end tomorrow night. we will have a live studio audience. i'll take your questions tomorrow at 6:00 p.m. live from orlando. the biggest piece of economic data every single month. we will break it down. stay tuned. ♪
charles: tomorrow we get the important monthly data on the economy, and the jobs report. it sets the tone for the market and is a critical market -- model. looking at 234,000 jobs the unemployment rate of 5.6%. i think the situation has changed we have the adp jobs report it cavemen below consensus. the was the lowest level since august and we see with small businesses traded -- of the jobs in the service area of the economy but it was not enough. we learned with the economy with a service economy employment was down actually
barely above its debate -- expansion. it is the big lie with respect to the nation with the unofficial employment rates of 5.6%. this is what a lot of people have known about but according to them 30 million americans an underemployed or unemployed. we have to get a handle on tomorrow's jobs report. we have to of the best. with all the data we have gotten does that change your mind at all? >> i am more optimistic the headline tomorrow will be a good jobs number. but my concern will still be labor participation you can look much further to see what is happening. charles: so the big lie but
what mainstream understands. you can say are but they're not "making money" and cannot sustain a family by themselves. what are you looking for? >> so why are people not wanting to work? it is the baby boomers. they're retiring but it is not what really is. but to see those millenials with wealthy parents focus on education with the lack of labor participation and the middle-class level jobs people cannot find work because of automation. charles: i have not seen anyone fall dead from not eating in america even
during the recession. it was a fallacy. the recession was bad but there was the key incentive to go to work people did not want to lose unemployment benefits if you take any job plus their new gas-fired they be will not have the same access to benefits. but then you have the skills gap. it is real. >> with the non-partisan entity of 3 million jobs created because they stop the unemployment benefits. then good things happened. >> so that unemployment rates is very misleading. that is what we saw from the gallup poll maybe even 30 million americans that
are underemployed or they take another job it is the challenge. charles: we have talked about wages. there is pressure with corporate america and the jobs part is up double. are we starting to see pressure for people to start getting more money? >> it is in the manufacturing environment anymore. so wages are not what they used to be. what is that model based on? replenishing with recent college graduates. charles: why is that number up? if the economy is getting better shouldn't people demand higher wages? denied that is an interesting situation.
so after the 2001 recession then one is the last time we saw a mass layoff? >> in the oil industry? charles: that is the biggest number in a long time. let's will be see that benefits of oil outweigh those that lost their jobs? >> i think so. there will be a positive impact. and there is a positive and flat -- impact on many businesses. civic they don't want to and
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charles: the mayor of portland or agin it will pay employers $5,000 to hire felons. literally he wants them to hire the ex criminals. so upon further review is this a waste of taxpayer money? how does that make you feel? >> it will give them something to do and give them a job. charles: just a minute. we lost your microphone.
>> where they incentivizing people when about patriots or former veterans or first year students? it is an affirmative action for felons if they have to people looking exactly alike you can have one of the other obviously they will get it but it speaks to the larger issue putting felons back into society giving them the right to vote and democrats are excited to giving illegals imagine felons. [laughter] >> the prison system is not doing a great job to train these guys either. some of that is not mandatory. >> their strong and working now they can work in the of warehouse but also white caller jobs so also beef up the system and teach them. charles: maybe someone is taking a course with bertie
made off right now. >> i agree. there is an opportunity to do some vocational training to assimilate them back into society. i don't know about paying them. we have a large amount of the unskilled part of the labor force a lot of people still the job site and no food is the right policy. >> of the cost more than five grand to get them off their back then it is a good investment. charles: i have my stock idea it is the beaten down name but everything with all-time highs you want something that maybe isn't. we will be right back to make some money. ♪
charles: getting down to it to make money. triple navigation. the main reason i like this the name is charles. you have to go with that. not really. but today they trade 2.5 million shares. here is the problem. execution is not that great but this is an idea if you don't want to chase it at the high i like what they're doing with their business. they already have a core business of logistics' but
they carve out a really nice niche with utilities it is a global play. they have the amazing growth around the world for the compound growth rate of 16% north america 13% europe. 24% with the rest of the world. i like their risk/reward it is not overnight but something people could put it in the floral 1k. >> i was torn i think the p-e ratio was high but it was a strategic play. because some issues and there was a very synergistic partnerships so on that basis i do feel it is a company worth watching. >> i like the for word p/e the trailing looks ugly but
the thing has gotten hammered. charles: a lot of people thank you should wait for them to go up for the buy signal? >> is a good way to do it. also with that said percent bounce don't put your money in that day watch for the bounce to sustain itself. charles: tomorrow we go on the road. orlando. we will be hosting the show their. with a live audience. i am going for 1,000. questions about investing in the market you don't want to miss it. remember orlando and a big audience tomorrow night. ♪
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charles: all right, guys, time now for the marching orders. crazy day after the bell. a lot of earnings reported. this morning was lb. limited brands. blew them b away. stocks are up huge. there's l brands. having a huge day today. twitter up huge. buffalo wild wings is up after the market. linkedin, one of my favorites, i've pound the table on this a lot. i was worried, but they have good long-term guidance. that's up huge. now let's talk about the disaster, gopro, which probably had the best earnings report i've seen in my life. the stock is getting crushed. and i think there is a couple of others. let's talk real quick about which one was the most important.
for me, i'm in all these stocks. personally my subscribers are. and i think i'm holding on most of these things even the ones under pressure right now. yelp is under pressure. >> gopro is a stock you and i have gone back and forth on a big. they couldn't have had a better holiday season. they're getting you are the had. i wonder if maybe they're an acquisition target. the fact is, i don't think the market -- it's lost a little bit of its luster. charles: the shorts have zeroed in on this. they have done an amazing job. i will say the coo quit. the day you report earnings, that's a huge red flag. it was up to 62 bucks. it's 40 right now. what about twitter, guys? searcher talkineveryone is talkg about twitter. >> that's the one i like. selfishly because i own it. my clients were pretty darn happy. the argument on twitter was, are they ever going
to figure it out. is facebook going to keep beating them up and showing them how to do it. i think they're a takeover candidate. that's a name i like. and i like to watch it. the jury is still out on whether they figured it out yet. >> yeah. one quarter doesn't make twitter a great company. it does show they can make stuff happen. which makes them attractive from a buy standpoint. >> linkedin had a great report today. it seems like today was technology versus technology. that is what it is. they're beating each other at their own news. no ceiling to how high they can climb. charles: they change the dynamic how they measure linkedin and twitter. these guys are making money. are you feeling good about earnings so far? >> yeah, i think we'll see the back end of the season come on strong. charles: watch the show every night. tune in tomorrow night. live. the money show is on the road. scottie is in town. of
course, a ton of investment ideas. talk about that jobs report. we will continue to answer your questions. send them in 6:00 p.m. from orlando. here's lou dobbs. lou: good evening, everybody. i'm lou dobbs. president obama today making an extraordinary effort to draw a moral equivalency between christians, a millenium ago and the radical islamic terrorism of the islamic state now. president obama also chose to equate america's slave history with radical islamist terrorism saying both drawing on religion to justify violence and brutality. the president today embarking on what appears to be a new campaign of rationalization for both his policies of avoidance and his rhetoric that never