tv Nightly Business Report PBS March 6, 2014 7:00pm-7:31pm PST
this is "nightly business report" with tyler mathisen and susie gharib. brought to you in part by -- >> thestreet.com. featuring stephy link who shares her investment strategies, stocks insights and more de-escalate learn more at the street.com/nbr. s & p closes at an all-time high de-escalate it's 50th record close in the past 12 months de-escalate what's driving it and which sectors should you invest in for the long haul? good for your health? think your employer will offer a health plan ten years from now? why you might want think again. what's your broker hiding? a personal bankruptcy?
are they deleting key information about the person you're trusting with your money? all that and more tonight on "nightly business report" for thursday, march 6. good evening, everybody de-escalate i'm sue herera in for susie gharib who has the evening off. >> i'm tyler mathismo >>. >> just one day ahead from the jobless report, first time claims fell to a 3-month lou de-escala low the nasdaq ended down 5 points and s&p 500 edged 3
points higher today, that was enough to end the session at a fresh all-time closing high of 1877. all right de-escala, joinin talk about the markets kate warren investment strategy at edward jones, good to see you become back. >> thank you. >> where is your number and specifically what in the report will be the most important for you? >> we're certainly looking for a total job creation around 145,000 and unemployment rate to stay at 6.6% in addition to that headline number, what happens to part-time workers, what happens to wages, with the idea being it's the details that are also giving us some comfort that the economy is continuing to improve even those headline number the last couple of months has been pretty weak. >> there are always plenty of things to worry about, the economy or unemployment number or ukraine or emerging markets
or whatever, but what is your outlook for the u.s. stock market in 2014 and what would you be advising investors to do? >> well, our outlook is pretty positive we think volume tiffity will -- volatility will increase, the economy is improving not dramatically somewhat, earnings will continue to rise in mid single digits, and we think the global economy is improving as well the synchronized global rebound gave a boost to u.s. markets, so we think stocks will move higher, that means we think investors should be adding stocks if they need to in their portfolio, but the most important thing to do right now is to be sure you've got the right mix of stocks and bonds. if you had the right mix a year ago today after a 30% rise in u.s. stocks you may be needing to add fixed income even though we think stocks will go higher and are good investments today. >> are there specific stocks you think might be still a very good value in this market?
>> yes. we think investors need to be more selective but a good place to look are companies that are benefitting from the stronger economic growth de-escala. -escalate look -- looking at companies like dnc. >> let's talk about the global situation right now. -escalate -- how do you filter into your outlook what's going on in ukraine and the particular issues that have been confronting several of the emerging markets whether it's turkey, brazil, or others? >> certainly to start more broadly with emerging markets in general, many countries have specific problems, they have large current account deficits, they're importing more than they're exporting, budget deficits and falling currencies partly due to the fact that china's growth has slowed and in many cases the commodity
producers are selling less we think across the board emerging markets look pretty risky. -escalate we'd be keeping those less than 5% of your portfolio, ukraine in particular is a different issue. -escalate it's been a concern because people are worried that we'll see a military escalation we don't think that's likely to occur but could certainly roil markets again like monday we think it will stay calm even those politics are unstable, and we don't know what's going to happen diplomatically or whether it could turn into a military situation again. >> kate warren, thank you. before we let you go any des closures about the stocks you mentioned to us? >> i have a family member that owns dnc. >> investment strategist at edward jones. federal reserve of new york president william dudley says the threshold to change the current reduction plans for the fed's bond-buying stimulus
measures is quote pretty high he says that for the fed to deviate from the steady pace of cutting its bond purchases, economic conditions would have to change in big way. do you feel any richer? the federal reserve reports that thanks to soaring home prices the collective net worth of u.s. households shot up another $3 trillion in the final quarter of 2013 to a total of nearly $81 trillion. big name retailers out with disappointing earnings last quarter costco slacked prices on food to be competitive with walmart and target. -escalate staples missed earnings forecast too after sales tumbled 10%. -escalate now the chain plans to save a half billion a year by shutting 225 stores, that's 1/10th of its footprint. -escala
-escalate, staples got wind today while costco shares were down about 3%. although nike may be the most recognized name in athletic footwear and apparel in the world, it's fighting off some tough competition from under armour, lulu lemon and others as it makes a big push ahead of the world cup soccer tournament taking place in brazil, it starts in just three months so how does the company hope to outrun the competition? sarah eisen spoke with nike ceo. >> reporter: it's officially the kickoff to the world cup, at least for nike which doesn't sponsor the tournament like adidas but is going all out on products, technology and innovation for the event and for its team, the excitement began today when nike unveiled a knitted football boot or cleat. -escalate the company calls it revolutionary. >> four years in the making. -escalate the intertriintricaci decline, the technology in this
new shoe is actually above and beyond anything we've ever done certainly, and i think the players have actually voted with tremendous feedback. >> reporter: adidas recently launched a similar knitted cleat for the world cup as well, because when it comes to capturing a global audience for sporting consumer companies, there's nothing like the world cup 3.2 billion people watched it the 2010 tournament in south africa. that's 30 times the super bowl audience the competition is fierce. >> innovation for the world cup this year is more than we've ever produced for any major event certainly in the sport of football ever this is the majista boot here is just the sta start, you'll see more innovation coming between now and the world cup, and we think the impact we'll have on nike is not just in terms of football and what we do but to reinforce our position as a leader in sports shoe and apparel nation.
>> reporter: jp morgan analysts say both nike and adidas should see a sales boom from the upcoming world cup in what's been an uncertain global economic environment or as parker calls it macroeconomic volatility. -escalate a more competitive one with under armour getting in on high profile sponsorships. still ahead, what are your chances that your employer will offer health benefits a decade from now? we'll take that one apart next. -escalate . the latest now on the crisis in ukraine in the white house press room today, president obama set a referendum by voters
in ukraine's crimea region to become part of russia scheduled to take place on march 16th would violate international law and ukraine's constitution. >> any discussion about the future of ukraine must include the legitimate government of ukraine. in 2014, we are well beyond the days when borders can be redrawn over the heads of democratic leaders. >> meantime, the house of representatives overwhelmingly passed a bill that would fast track loan guarantees for ukraine. that measure now heads to the senate for approval, but it's unclear when the senate will vote on it. some big changes are coming to retirees at boeing. starting in 20two years they'l end pension plans for all nonunion workers even ceo and other top competitives. instead boeing will offer those 68,000 employees what's called a defined contribution plan like a 401 k retirement savings account. some union workers will receive still receive a pension from the
company. besides salaries, pensions and savings contributions, the cost of providing health care coverage to employees is one of if not the biggest expense for a company. and the cost keeps rising. now a new survey says that more larger businesses are uncertain whether they'll even offer their workers health insurance plans a decade from now. bertha coombs joins us now with more. better that, w bertha, who conducted the survey and what does it tell us? >> reporter: it talks a lot about the uncertainty in the health care landscape right now. it's palace watson a benefit consultant in conjunction with the national business groups on health. they surveyed all large employers. the 19th year they've done this. 95% of them say they're very committed to providing benefits because they think this is an important recruitment tool particularly in some of the higher-paying industries. and most of them say they think that's going to continue of the next few years.
but when they asked them what about ten years from now, only about a quarter of them said they thought they would still be committed to that. and that's the lowest reading they've gotten in 19 years. >> but does the affordable care act tell these large companies that they must provide insurance options or pay a penalty? >> reporter: it does. but one of things that has a lot of large employers concerned is the affordable care act. it has this thing that has been called the cadillac tax. they said part of the affordable care act is to try to bring costs down by getting people to use more cost-effective health care plans. so set this limit above $10,000. you have to pay an excise tacoma about 40% of how richer your plans are above that threshold. >> who pays it the provider? >> reporter: it would be the employers and probably employees. so take a look at some of the industries where the plans are very rich. health care. very rich. on average the median in 2013
was $12,800. in high tech it was about $12,600. those plans would be deemed for an excise tax of about $1,000 a piece in financial services, their costs were a little bit lower. they might be paying about $250 excise tax for each plan. and they would probably split that with their employees. so they are worried about this. this goes into effect in 2018, and that's what has employers scrambling to figure out how to bring down their costs so that they don't hit that threshold. >> and a lot of us are going to be wondering, i would think, how we're going to navigate all of this. we just talked about the fact that pensions are going away so now you have to do a defined plan or a 401 k. and people have trouble navigating that. >> reporter: exactly. >> i can't imagine navigating the health care exchanges. >> reporter: that is wone of th things people have done. the private exchanges worked well when it comes to medicare.
a lot of retirees from companies have been doing that. now more companies are starting to look at that sort of benefit plan when it comes to health care. so saw darden and sears go on the aon hewitt plan. now all the insurers on that exchange are competing for workers to select their plans. and an interesting thing has happened when they re up. 80% from happy with their plans and kept them, but a lot of them started to shift to lower cost plans. you know the metal levels we talk at, the platinum and gold saw shifts down, people moving down into the bronze, into the silver, because they themselves now want to make sure that they save money. >> all right, bertha coombs, thank you very much. much could change over the next few years, i suppose, between now and 2018 when that cadillac tax goes into effect. bertha coombs, thank you. to read more about how companies are trying to navigate the new health law head to our
web site, nbr.com. encouraging news for men who elect to have prostate surgery soon after being diagnosed with cancer. a new study out of sweden finds that men with early stage prostate cancer who had their prostates surgically removed were significantly more likely to be alive nearly two decades later than men who did not have surgery and instead opted for so-called watchful waiting until further treatment. well, disney cuts one quarter of its workforce in its interactive division. that's where we begin tonight's market focus. 700 jobs will be eliminated from the unit which houses its video games and online properties. disney interactive has suffered more than $1 billion in losses in recent years. and the move is an effort to buy disney to focus more on mobile and social games. shares of disney up a little bit to $83.34. and disney's talks with direct tv also making news today. the media giant discussing a deal with the satellite tv provider to license its shows and channels to the company as part of an internet-based tv
product. this comes just a few days after disney announced a similar carriage agreement with the dish network. shares of direct tv up about 2.5% today to $79.99. and the private equity firm servers capital management reaching a deal apparently to buy the supermarket chain safeway for more than $9 billion. yesterday there was a rumor that the grocery store owner kroger wanted to make a bid for safeway but serveris has scored the deal now announced after the closing bell. shares safeway off a bit to 39.47. >> customers horded groceries before storms and the chain had the shelves stocked in preparation which drove sales higher. kroger also forecast a higher full-year profit partly because of its acquisition of harris teeter a local food chain. shares still fell a little bit today down almost .75% to 43.37. and darden restaurants cancels
its annual shareholder meeting and will meet with investors one-on-one instead. this as activists pushing for the company to make bold moves to increase value aside from its plan to spin off its red lobster chain. the company believes the small meetings will be more productive. shares rose 2% to $48.91. how much should you trust your stock broker? according to a "wall street journal" analysis, more than 1600 stock brokers have bankruptcy filings, criminal char flags that were not discloseds and have vi unnoticed by regulators, raising concerns about who has access to your money and how you should protect yourself. joining us now to talk more about these findings is michael siganolfi,investment editor at the "wall street journal". what's going on here? >> well, there's a pretty big problem in terms of investors' ability to be able to track what their stock broker's records
are. first off i think most of the nation's 635,000 stock brokers are honest. but i think that we were surprised at the number of stock broker whose had black marks on their record that weren't reported to investors as they should have been. and really raises a huge hole in the regulatory foundation of wall street and the protection for american investors. >> so michael, what did you find through this investigation? and it was a very broad investigation. what things do not need to be reported or can easily be deleted? >> right. first of all, talk a little bit about how we got into it. we were a little frustrated the fact that we knew that there were brokers out there with checkered pasts that we weren't able to get adequate information from the mainly wall street regulator. so we did a unique database of the records. we found that there were a number of instances where bankruptcies, tax liens, securities fraud, filings and
the like were not being reported as they should have been. investors have the right to know about black marks on broke ers' records going back ten years and often cases that wasn't being reported. >> so who's at fault here, michael? is it the broker who is trying to sneakily cover up for something in their past? is it the employer of that broker who was i understand it is the ultimate party responsible for reporting that information into the industry's own watchdog group? >> i think there are problems at all those levels. ultimately finrow is responsible for overseeing all the brokers. it's been an honor system. brokers were expected to fully report any past problems to their employers or brokerage firms. the brokerage firms were supposed to track that and supposed to report back to finrow there. were break downs really at all levels. that's part of the problem because people really weren't focusing on it until we did our
reporting. >> so what are the dos and don'ts if you're considering entrusting your money to a broker? how do you protect yourself? what can you find out and what can't you find out? >> well, i think investors in general have to be a lot more active. the first thing they should do is to check with finrow which has a site called broker check and they can look at the basic history of their brokers. you may have to go and do forensic investigation of your own and go to your state securities commissioner, for instance, and ask for information about your broker. and also just look to google in other areas to see if there's anything out there that you find as a potential problem. look, there are a lot of great brokers out there. if there are any issues you've got or concerns you have with any past problems they've had, you really should look elsewhere. >> michael, thanks very much. michael is investigative editor at the "wall street journal" and a heck of a softball player, too. mike, good to see you. >> thanks. but i'll keep my day job. coming up as we continue, can entrepreneurship be taught?
well, professors at stanford think it can and their mission is to help develop the next big silicon valley tech site. . we took a look at some stanford university students who are enrolled in a special program teaching them how to become high tech entrepreneurs. josh lipton has more on what's being learned and what those students hope to accomplish. >> reporter: instagram's founder kevin sistrom sold his company to facebook for $1 billion. as students at stanford university now prepare for
graduation, many dream of creating the next instagram so they do what sistrom did, enroll in the technology ventures program. the program started in 1988. its mission is to teach students to succeed as high tech entrepreneurs. its alumni have worked all over silicon valley from google to silver lake partners. every year about 2,000 students take part in the program where they study entrepreneurship, finance and business strategy. many create their own business ideas which they then present to a panel of venture capitalists, stanford's own version of the popular television program "shark tank." >> if i want to take somebody's ideas and turn them into reality, it would be very helpful to have the support of stdp and to learn how to sell my ideas to the investment community. >> reporter: professors at the school say part of the program involves toughening up these students so they can compete in the real world. >> students at this level who
have gone through multiple years of very tough selection processes are not used to being told they're wrong. but that they're just perfect. well, we don't do that. we tell them that oh, oh, you might smell a little bit. >> reporter: professors say the students who choose to enroll in these courses are natural born entrepreneurs. they tend to be optimists, risk takers and hard workers. right after graduation, some students work for tech titans in the valley, others start their own companies. one success story, sky box imaging which builds satellites. the company was created in this program five years ago and has since raised $91 million in funding. one thing is clear. after these students earn their degrees this spring, they're likely to be some of the people behind the products and companies transforming your future. josh lipton, "nightly business report," stanford, california. >> i hope my kids were watching that report. >> take a class to become a
billionaire. love it. >> support mom and dad. >> that's it for "nightly business report" for tonight. i'm sue herera in for susie gharib. we want to remind you this is the time of year that your public television station needs your support to make programs like this one possible. >> i'm tyler mathisen on behalf of your public tv station, thank you for your support. have a good evening, everybody, and we hope to see you back here tomorrow night. "nightly business report" has been brought to youin part by -- >> the street.com. founded by jim cramer, the street.com is an independent source for stock market analysis. cramer's action alerts plus service is home to his multimillion dollar portfolio. you can learn more at thestreet.com/nbr.
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