tv On the Money With Maria Bartiromo NBC July 15, 2013 12:30am-1:01am PDT
>> hi everyone, welcome to "on the money," i'm maria bartiromo, coming to you from outside the new york stock exchange in a beautiful day. the market hits new highs after calming words from big ben. and earnings season kicks off, more room to run for stocks or trouble ahead, interest rates on the rise, will it slow down the recovery in real estate and is it too late to buy. and i will go for a ride and take my bike and talk bike sharing in the big apple. "on the money" begins right now. >> this is america's number one financial news program. "on the money," now, maria bartiromo.
>> here is a look a what is making news as we head into a new week "on the money." ben bernanke gave the markets what they wanted to hear in a question and answer session after a speech this week, bernanke said that the economy is still not strong enough to support higher interest rates. >> highly accommodated policy is what is needed. >> the s&p 500 closing in record territory on thursday. the markets having the best day in about a month. and the nasdaq hit a 13-year high as well on friday. earnings season kicked off with a bang this week, two major banks, jpmorgan chase and wells fargo coming in ahead of expectations. and alcoa as well. gas prices are about to spike in prime driving season. expect a jump of $.10 to $.20 a gallon, the oil prices are
rising due to issue in the middle east. and william lynch resigned after an announcement of the loss after the announcement of the ereader. we saw the kick off to the second quarter earnings season as well, and so what did it mean for your money and the markets going forward? joining me, danielle hughes, and bob doll, chief equity strategist. thank you both for joining us. what a week. we are at a record high for the dow jones industrial average and the s&p 500, hitting records this week, after bernanke's words. what did you think of it, bob? >> i think he put the toothpaste back in the tube. he would like to have some of the speeches back where he
talked too much. he wants to condition us that he will not buy $80 billion in bonds every month, but he will slow down when the economy is good enough, and he a sured everyone that the economy is not there yet. >> he said the unemployment rate under estimates how bad unemployment did. that gave it away right away. basically saying, look, we are not near the target. it may be difficult for us to begin the end of the stimulus in september. >> i think he had in mind, you know, this super storm sandy, which added a lot of jobs to the economy and they were temperature jobs. investors are kind of in a rundown right now. they love quantity easing, it helped the stock market, but they want the economy to grow, that would take away qb, who do you bet for? >> what about earnings? earnings season under way, you have big financial companies reporting. j.p. morgan and well far go, and
a lot coming next week. what do you see so far? >> so far, the earnings have been okay, as you know, but it's just a few companies. my guess is when the dust settles the earnings will be beaten, the question is will revenues be okay. in the second quarter, it will be iffy again. >> do fundamentals take over in terms of dictating market or it all about the fed? >> it's about the fed. but fundamentals are important. we have a depressed out look on what is going on happen and earnings expectations are down dramatically, i think 97 companies lowered expectations from going forward. >> so you are also feeling that fundamentals are getting better? >> i think they are better. i think we are going to be happy. i think we are looking at the cautiously and opt mistically, but i think we will do better
than we thought. >> the evidence keeps getting that the economy is getting better. it's slow and it's not where it needs to be, but we continue to go the right direction. >> what about interest rates though, this ten-year rate has moved up. in terms of, you know, the market moving partly on the ideas that rates are at rock bottom levels. does that change or impact the economy? how do you characterize? >> at 2.5 for the treasury. we are not 180 anymore, what is the big deal. we will look back at this and see the rates are just low. the concern in the economic market a few weeks back and now we are back into the fed still is our friend and the economy is okay. >> look, i think one of the big stories of the week was oil. at one point oil above $106 a barrel and gasoline prices moving up on stronger demand over the july 4th weekend. is that going to impact the economy negatively? >> i think it will absolutely impact small businesses and the
consumers will not take as many trips they will be keeping the eye on the gas. and another one in respect to mortgage rates going forward. we will see that in bank earnings, re-fi has been going down. >> in terms of investing, so much money came out of bond funds. i guess it was $80 billion or so, just in the last several weeks out of bond funds. is it right to stay out of bond funds. should we take our money further out of bonds. >> too many people have enjoyed a bull market in bonds and think they will never go up. for those over weight in bonds, take it off the table. you need bonds but the question is, do you have enough equities? and many do not. that is where the growth has been and likely will be, if you are going to win, that is where you have to be. >> there's few alternatives with equities with rock bottom rates where they are. >> exactly right. you can stretch free yield here and there, but you need to be
careful of the principal, as it were, and where we will get growth as we are both talking is in the equity market. >> what are you advising? >> equities, we are still in dividends, we like large cap, but we are seeing small and mid cap as being a bump up over the next two quarters. >> all right, leave it there. good to have you both on the program. thank you for joining us. up next "on the money" five years after the mortgage melt down, home prices are up, interest rates are rising and home buyers are scrambling, is the home market reboundsing? and we are taking a ride on a city bike, what makes a sleep number store different?
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that conforms to your individual shape. oh wow, that feels really good. it's hugging my body. you get that moment where you go, "oh yeah"... oh, yeah! ...and it's perfect. they had no idea that when they came to a sleep number store, we were going to diagnose their problems and help them sleep better. once you experience it, there's no going back. don't invest in a mattress until you find your sleep number setting. and don't miss the final days of our summer closeout, for the biggest savings on all sleep number memory foam and iseries bed sets. only at one of our over 400 sleep number stores nationwide, where queen mattresses start at just $699. sleep number. comfort individualized. >> well the housing market continues to heat up, places like san francisco, atlanta, las vegas, are seeing dramatic
increases in prices from growing demand. is it really a comeback or are we getting too excited too soon? joining me now is developer, done peebles, is he owner of the peebles corporation. wonderful to have you back on the program. >> great to be here. >> thank you for joining us, home prices have been reboundsing, the numbers look good. they have been reboundsing for over a year. invento inventory going down, but fewer people own homes today, what is happening? >> there's a lot of pent up demand and inventory has not grown in five plus years. as the pressure from holding down prices and holding down investment in real estate have lifted the inventory got absorbed, so now what we have is all this inventory that seems to be too much, bringing us into the recession in the first place in 2008, has been absorbed and there's no inventory. so prices are rising rapidly.
>> what about interest rates, we have gone from the low of 3% to 4.5% on the average 30 year mortgage. how do you feel that higher rates will impact the market? >> it will serve as a controlling element, interest rates have been the lowest that they have been in my lifetime. i remember when i bought my first home in 1987, interest rates were 9.5% and that was a bargain. what is happening with rates is just controlling the market a bit. >> i think we will with look back some day and say, remember when we could have borrowed at 4.5%, even though that is up from 3% the low. i want to get your take in terms of the possibility of a bubble. frank paulson believes that with the federal government still insuring over 90% of new mortgages we could be headed into a new housing bubble. this is what he said, i would love to get your reaction. >> if the government is setting the prices on your mortgages,
through a subsidy, it's not economic reality and you will get another bubble again. >> are you worrieworried? >> not at all, the federal government has always had a role in insuring the mortgages. they have done it through various organizations. the government's rooh -- the go is different right now. the programs are being driven by high net worth buyers and high income buyers and they are pulling up the market in gateway cities. >> what about the first time home buyer though, with more and more investors buying up real estate, are the first time home buyers getting blocked out of the market? >> they are getting blocked out of the market for a different reason. there's not enough inventory, there's not enough inventory for them to step up to the next level of houses because nothing
has been built in the last 5-6 years. so we need more inventory at that price point, because right now today, it's less expensive to own than rent. >> now, you are building a big project. you are restoring the old new york life insurance building and several other developments in the hopper. tell us about the projects and the opportunity? >> new york is shifting in terms of luxury housing. downtown now is the highest price point per square foot in manhattan. it offers a great deal of freshness and new inventory. this is the only place where you can have new inventory right now, converting commercial buildings to residential building. we have a building that is 400,000 square feet, the original new york life insurance headquarters, it's an iconic building and we are excited about it. we will transform that part of
eastern tribeca. >> what is commercial real estate looking like these days? >> we are seeing a shift in the tenants, new york city is getting many more high tech compa companies, other industries are picking up the cental business district places. as opposed to law firms and financial service industries that pulled back a bit. >> let's ask you about the politics, you have been a major fundraiser for president obama, how much responsibility do you think he has for the grid lock in washington. everyone wants to see both sides get together. >> i think grid lock was here before the president got here and it was more intense once he was in washington. the grid lock in washington started back when newt gingrich in the 1990s had a contract with america and the republicans took
over the house of representatives. it's perpetuated from a prior period of time in the congress of more working together, more of a partnership to now, extreme partisanship and they both hijacked the parts and the president is more to the center than people give him for. >> good to have you on the program. thank you so much. >> thank you. >> up next, we are "on the money," stay with us, we are going to check out new yorkers riding high on bike sharing, we will with take a spin on city bikes with the city director of look at 'em.
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>> it's a easy way to commute. >> i use it every day to go to work. you walk out and you don't need anything, because the bike is right here. >> i have a helmet. >> about every day, i ride about 35 miles. i try to do it, in the morning, during lunch and afterwards. >> i love the city bike. >> right now i'm going up to 34 and 8th avenue. my only complaint is that after 6:00, there's no bikes left. off to work. >> welcome back, commuters are embracing new bike sharing programs in cities as diverse as minneapolis, washington, kansas
city, new york, also joining the craze with city bike it's the largest program in the country with over 6,000 bikes available. and with me right now is jeanet jeanette sadik kahn. okay, we have the bikes here, i want to talk to you about the program. i love it. why do you think the city bike has become so popular so quickly? >> well, new yorkers love choices in getting around and new yorker is ideal for a short trip. most trips are under two miles, and new yorkers like to do it in a new york minute. if fact that you can grab a bike, go, dock it, no hassle you are done. it's a great addition to the transportation system. >> let's talk about the detractors, a couple of people cited that the docking station takes up place and the car drivers were saying, that was my parking space before. and it's already crowded.
technical glitches with the apps and the kiosk and the lack of bikes in economically poor areas. what are you doing about the critics? >> the system has been used a million trips, the new yorkers have taken a million trips in just the first 7 weeks alone. and there's over 187 weekly members, annually, daily, when you look at the members, people are voting with their pocket book and their pedal. the important piece to remember is that it was designed by new yorkers for new yorkers, we had the largest public participation of any public transportation policy in the country. 64,000 people made suggestions about where the station should go and got down about maps and figured it out. we have taken less than 1% of parking spaces for program and you can see the demand and the
other piece, people have ridden 2.5 million miles. >> oh, my god. >> that the terrific. it's great for your figure. >> tell me bit, i love biking. >> they have turned off 98 million -- they have burned off 98 million calories, that is 178,000 big macs. >> it's a good way to analyze it. what happens in the winter time with the docking station? >> new york city is a 24/7 town, 365 and these bikes are available all year round. >> they are. let me ask you about the economic stuff. the city bike like in cities like washington, d.c., struggling to profit from the program, how does the city plan to generate revenue and pay for the program? >> the program is 100% privately funded. no taxpayer dollars are associated with the program.
we have $4$47 million sponsorsh program. you are seeing the up-take, the annual membership is $100. that is less than the cost of a monthly metro card. you can take it for the day for $10 or for the week for $25. it's one of the best deals in town. >> a helmet is not required. >> it's not required but we encourage it. the helmet that you have is one of the 100,000 helmets that we pass out to free to new yorkers, when you sign up for the annual membership, you get a key to unlocu unlock the bike and it comes with a $10 discount for a helmet. >> issues of people not wearing helmets, have there been issues, you recommend it but it's not required. >> in all the rides there were 3 injuries and none were major. as we are seeing, more and more people are biking the streets
are getting safe and safe. the new york streets are the safest they have been in the history of new york. with more bike lanes and more people biking, it's safer for pedestrians and cyclists and bikers. >> you said it's a 24/7 city, new york, and of course it is. when it's snowing out, i mean, do you have a place to house the bikes or will they stay in the docking station? >> they will stay in the operator's system, it has a specific service level standards that they have to meet. they have to shovel around the station and make sure the bikes are working. this is all carried out by the private sector. >> and that leads to jobs of course, great to have you on the program. >> great to be here. >> i would like to take a spin, can we do it at the end of the show. >> let's do it. >> first, let's take a look at the news that will have an impact on your money that, is next, take a look at how the stock market ended the week. back in a moment. [ male announcer ] how do you do a summer clearance the dodge way?
♪ the dodge summer clearance event. right now get 0% financing for up to 72 months and no payments for 90 days on all dodge vehicles. >> for more on our show and guests, check out the website and i hope you will follow me on twitter and google +, first, let's look at the stories coming up in the week ahead that may move the markets and impact your
money this up coming week, it's full steam ahead for the earnings. we have a slew of companies reporting earnings. other heavy hitters to watch, google, ibm, microsoft, johnson and johnson and general electric. on monday, retailers will announce monthly sales for the month of june and we will get the housing starts report out for the month of june as well as the beige book report, that giving us a snap shot of the economy, from different regions throughout the country. also on wednesday, we will see a kick off to two days of testimony by federal reserve chairman ben bernanke, that on policy and he speaks before congress. that was the show for today, thank you for being with us, thank you for being with us next week and i will see you next weekend. before we go, i will take a little ride. let's get back -- you got your helmet? >> i do. >> awesome.
right. so we will take a little ride. take a little ride. just go right down there. right and you can see, these are adjustable seats. >> you know what? i should have not worn my high heels. >> they are perfect, they hook right in. >> got it. >> so you have your bell here. >> okay. >> yep. got the bell. and the gears. yep, here is my brakes. looking good. little bike shorts underneath. >> you wear biking shorts under your outfits? >> i do. .
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