to morgan stanley in 2010. the business he was building and the fact he was in charge. >> we are going to continue the conversation. lots more to talk about -- recruiting, retention, cultural incentives on wall street. sit tight. we are going to take a quick commercial break. coming back with greg fleming. >> in a moment, we are going to be speaking to greg and we will also speak to the woman who runs the idw group and she knows where all the big jobs are. ♪ >> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> welcome back. i'm stephanie ruhle. it is a problem in every industry but it is magnified on wall street because of the money involved. how do you keep your best performers? morgan stanley's greg fleming is back and i want to bring in a dear friend, ilana weinstein, the top headlines are -- headhunter and ceo of idw group. in the last two years you said here with eric and i and you talk about people leaving the bank and going to the buy side

but i'll say, "no, morgan stanley." [ticking] >> this is shaybah, a desert wilderness where temperatures can reach 135 degrees. beneath these sand dunes lie 18 billion barrels of oil, more than four times the proven reserves of alaska. and it's costing billions and billions to tap into it. with all the talk about kicking our addiction to foreign oil, the kingdom of saudi arabia is doing everything it can to keep the oil age going. let me be blunt: is it your hope to prevent a switch away from oil? somebody said the country is the oil business. i mean, you absolutely need to do this for your own survival. >> and what's wrong with that? [ticking] >> when the u.s. oil companies came here in the '40s and '50s, the americans moved into the area with their families and developed it to suit their tastes and their way of life. they created a replica of american suburbia. today you could be in the outskirts of houston or los angeles. it's almost like it's an enclave within saudi arabia. it's--different from the rest of the count

he is at morgan stanley. there is an opportunity. forget about the gloom of the weekend of the super bowl. the courage point? you have to be brave to buy. >> as long as you believe the earnings will grow and i do, you will be optimistic and capitalize. the markets been spotty because people are worried about chinese growth and emergency -- emerging-market companies. showsort after report good signs? >> it could be both. it can be the situation. i think they're looking for opportunities. i do not think the background is great. you get a couple of percent purchases, i think that is a pretty good year. i begin to get more multiple expansion. >> when you look at the global, we have all seen this. we have been there and done that. emerging-market start to go, what do you suggest is the outside shock the could coalesce the emerging markets? >> the potential for a stop moment. it really is that china will be more stable than people think. what i have learned and maybe crisis complacent, which that you worried about turnout to be a good idea

and morgan stanley changes the way it pays bonuses. morgan stanley deferred a hundred percent of bonuses. they will now just have some portion to defer. >> it is a huge deal. differ.e to >> for a while people hated it. look at stocks, bonds, currencies, commodities. upities launched higher, six. we have a dampening of enthusiasm at 2.84% on the 10 year. crude is at $94.47. >> are you going to miss the games? , i am going to miss the games. >> which quarterback is going to have the best weekend? wilson or maddie or brady. this is "numbered surveillance -- "bloomberg surveillance." ♪ them a this matters now to our guest host. robert outwards and of sandra o'neill -- robert albertson of sandra o'neill. focused on the too small to survive banks. community banking is important and critical. highly distressed. why our community banks struggling and how much do they hate jamie dimon? it is important to start looking at the numbers and thinking it through. the capitaleased ratio 30% in large banks. they are setting aside for judgments and fi

morgan stanley as well. we have an interesting hour so stay tuned. liz: time for the front page headlines. consumer confidence unexpect he hadly falling in january, dropping to a reading of 80.4. the thomson reuters university of michigan survey highlighting reduced expectations among lower and middle income families. david: the commerce department says housing starts fell 9.8% last month to an

you run morgan stanley. you have traders sitting in mortgages, high yield, saying i want to get paid $5 million or i will walk. how do you balance this? >> we have 66,000 employees, and the number getting $5 million or more is a small number. of course, we want to keep them, but we have respect for great members all over the organization. we have 20,000 people in support functions. thousands work as assistants to the brokers doing their business. we care about all of them, not just somebody making millions of dollars. that said, you have to pay competitive to what the job description is. >> does morgan stanley have an additional reason to care about inequality to the degree there are less of it, intentionally more clients? you are in the retail business. >> it is not a business issue. it is a moral and society issue. broader, society issue. >> how much do shareholders care about doing public good? at the end of the day, shareholder say what have you done for me lately, why should i own morgan stanley? >> sha

morgan stanley cutting the stock to a sell today with a $33 price target. the reason they say competition for ad dollars. doc, influential analyst at morgan stanley cuts twitter to a sell. what do you make of the call? interesting in the notes concerns about twitter's ability to grow in the crowded online ad market. that's nothing new, right? >> no. >> no new player emerged overnight. >> i can't knock them for saying that the stock has run very far very fast. we said it basically two weeks ago that same thing, the stock was 73 back then. then it traded down to 57 as i said, i bought it, it rebounded back to 69 last week. should i have sold it? absolutely i should have. i didn't so much get greedy, judge, as just i don't think anything changed about the story. so, yes, is this particular analyst saying that the stock is overvalued perhaps correct? he might be, but i believe that this stock has more room to the upside. that's why i'm still holding. i'm in an option spread through march. >> birthday boy, what caught my eye about this downgrade is that the head

. >> let us start with morgan stanley. . likes tumbled 70% jpmorgan, morgan stanley has a set aside money for litigation expenses. that worked out to $1.2 billion. legacyelated to the problems of mortgage backed securities. we dive into the numbers, half it beat analyst estimates. revenue topped estimates and was pretty much in line with what analysts were looking for. james gorman has been deemphasizing analyst estimates. investorse part that and james gorman are focused on with morgan stanley beefing up its brokerage business. 19% pretax profit margin. another software watching is ge. >> ge shares have turned lower in the premarket. this is after the earnings-per- share matched analyst estimates. there is a track record of matching or just eating -- beating. revenues are slightly higher than analysts were looking for. when you break run the different segments, it was ge capital, the financial arm, that is trying to analyst estimates. some of the bigger infrastructure parts of the business, the industrial side, are missing

>> i think there is still time to get into morgan stanley. we had another good earnings report today and we're seeing, their investment banking unit has done well and their wealth management division is doing incredibly well, 79% increase in earnings. we like financial broadly, going into 2014 with net interest margin expanding. within that space we continue to like morgan stanley. it has a good future ahead in 2014 yet. liz: i want to get to some of drew's picks before we go. you like the small growth fund, stevens small cap. we can cycle as you explain what you like. the other you like is joe, international. that is name we always like new names. >> right. so they're both contracting name. one is a growth small cap domestic fund. it is featuring stock selection as its attribute over a passive one. the next one is a johcm and finally the osterweis fund. it is high-yield bond fund but features short duration. you get best of both worlds. this one appears to be the best position to give you good fixed income returns for returns. david: drew ka

morgan stanley with the target. half of where it is right now. downgrading the stocks to underweight, some of the analysts like names like facebook better than twitter, i think twitter is still a niche. back to you. lori: thank you, nicole theatre adam: chicago is freezing today, but just how cold is it? cold in siberia. currently 35 degrees, even colder than mars today. between negative 13, negative 34 degrees according to the mars rover. join nicole, jeff. >> i believe it. take a look at what you are seeing. it is really awful, with the camera looking at arctic sea smoke, something you never see or you rarely see in downtown chicago. when it gets this kind of dramatic cold. that is frozen already. the windchill is incredible, not just here in chicago. want to get out for a second, show you the map if i can. you see how wide a swath these cover. i tell you we are talking -30 windchill as we speak right now. we come back alive, you can see the see smoke, look at the wind blowing and how intensely the wind is blowing. what that is doing is causing

this happens for morgan stanley. morgan stanley has a five percent today. if valuation are tangible. made profits profit out of fixed income trading. from morgan stanley. you wanted to be a rich man. if you were to start your career today, would you knock on morgan stanley's door?, of course. institution, morgan ownley has -- 50% of their earnings come out of asset management and brokerage. the remaining 40% comes out of the advisory and running into the business, which is often into mediating growth off of global firms. business, principal which is less in real hedge funds. people are taking risks on opposition inflation and credit market. >> there is a consequence of taking risk down. there's less revenue to pay people. it is morgan stanley and the investment bank or goldman sachs. taken thatll compensation ratio down to about 35% of revenue. how much lower can it go? >> on every metric they tend to be one of the most leveraged banks today. , what a bank does is it is like shrinking. what is happening is people inside the institution will do have to be pa

ill it be morgan stanley looks absolutely. they will come out three years from now being much more asset manager like blackrock. >> at this point, the various things, how do they position themselves for a world in which regulators want them to be utilities? >> they have to accept their punishment and get back to work. s. have remodeled the roe' it is much closer to 10% to 13%. once you factor that in, you get a valuation that is lower. >> you manage money for people. capital at risk. did you take a victory lap for bank of america? >> interestingly, bank of america was up 2.5%, tippie morgan and morgan stanley were up more. >> why? isbecause the healing affecting all of these guys. i think the ones with the best prospects are the ones either that have transformed themselves into better moneymakers or legal risks behind them. >> what should we look for in goldman sachs in 20 minutes? for for 15oking earnings. >> it is too early for numbers. >> compensation. >> something that says, look at the ro we. are they going to get to 50%,

one of those is the morgan stanley reading list. we have seen a copy. you have your investment managers who are supposed to be looking at growth companies and they were reading about the oregon university offense and how disruptive it is and also there were federal reserve minutes and papers. how do you build that culture of that thoughtfulness? >> just trying to make sure we leverage the distributed knowledge of people at morgan stanley. i don't read scientific american but occasionally there are some great articles there and someone in our network does. we have about 150 people internally contributing. i think you're right, culture is so important in the investment business. for us, we pride ourselves on continued learning. it's hard to quantify culture but i think things like the reading network certainly helps give examples to it. >> david, i want to drill to some holdings in your portfolio. you have a fairly large slug of financial services companies. not all american, bank of new york one of them, insurance companies. why financial services right

history got revised for a while at morgan stanley. he is delivering on it right now. 19%, he is right there, so he is keeping his word, but now he is moving onto the next challenge, which is fixed income, which is the our oe of the form. the firm is generating a 5%, 16% 6 % roe. he laid out today how he will get to a 10% roe pour th -- for the firm. >> goldman has brought its compensation down sharply, and that -- if you would've asked me five years ago which firm was going to take the lead in compensation reduction, i would not have guessed goldman sachs, but that is exactly what is happening. they said fixed income has changed, trading has changed, we need to get margin up. you can only cut one expense. so they and gpm are the only two banking their cost of capital. >> how much does it take to make money for shareholders? >> if you think of the history of wall street, for every dollar of revenue that came in, you used to get $.50. well, that is the modern now at morgan -- at goldman sachs, it is down less than $.40. the offset was t

morgan stanley is next up. the company's conference call kicking off just a few moments ago, the bank's fourth quarter profit fell on the headline of 70% but it still topped what the street was targeting and our own mary thompson spoke with thing moen stanley cfo this morning and she joins us with more on that. good morning. >> the first question i had to ask was on the $1.2 million add they made on the legal reserves, the doj had been looking into a number of issues. the reserve is related to mortgage-represented issues and others stemming from the financial crisis. still once you exclude the legal reserve and tax benefit and adjustments for its debt beating estimates by a nickel. revenue excludeing the adjustments for the company's debt also coming in at $8.2 billion. the company's performance reflecting a record $3.7 billion in revenue from its massive brokerage and wealth management bils where the company saw a pick-up in engagement from its retail clients across all products equity and fixed income up from

vincent is with morgan stanley. he knows that our historic accommodation and improving job market will make for an eventful number in 2014. with a little better coordination, i would've gotten a tie that matched. mefrancine lacqua. trust from london. -- dressed me from london. the money question is, is there anything in this report that can adjust what our central bank does? >> not likely. you start with 200,000 and go up or down. down to 190,000. we recognize that the fed is short of their goals. the unemployment will be seven percent. .hat is above the estimate inflation is tracking well below the goal. there are two reasons to keep the conversation in place. >> with in the mix of the moment, the president speaks of inequality. everyone is focused on inequality. what do you look at in this report that addresses the president's concern about america's inequality? >> that sort of thing does not change on a dime. payrolls are up with erratic numbers. where theition of gains are -- if it is retail, temporary workers.

-- >> morgan stanley did the .est there shares rallied significantly. that is partly because of their wealth management business. it benefited from the rise in stocks we saw from last year and they're putting off good markets and the increased their margin targets. that is seen as a steadier business. >> they did a whole spread before the earnings came out. they said morgan stanley did the health management, which one is going to win? does that mean a trading bank was the one that got hit the hardest?, trading was down across the board -- the hardest? >> trading was down across the board. those with fixed income trading did not have a good quarter. question is as tapering starts how will fix income trading do? it has been pretty benign over the last couple of years. of they haven't done tremendous. hasn't come to the precrisis days. no one thinks it will. what level does it end up that? right now they're not taking -- they are not making a ton of money. the big question is, what are banks going to do to grow their earnings in 2014 the side cutting costs

we all report to gary now at morgan stanley. greg fleming and cylan keller, gary is right there in the mix. >> let's talk politics. this, by the way, is the place where all sorts of politics -- you've been coming here for a long time? >> i have. the tiscrs are great friends. it's where so much happens in the morning in new york. >> let's talk about chris christie. he's the topic, i think. is he still the topic in this city right now? >> i think it's forced a bit. i think if he is telling the truth, which i don't have any reason reason, any evidence to suggest he's not. but if they're holding the story, if there's anything that is not altogether true, he'll have some -- >> how long did it play out for him? >> it looks like these investigations are going to go on. >> everyone is coming out of the woodwork. >> it seems like there are one or two people, maybe three people these xhp committees want to hear from. one may be the deputy chief of staff. the other may be the appointees that the government made over the port authority. i t

last week morgan stanley took a stake. she believe the numbers and think that morgan stanley did their due diligence, the stock is significantly oversold. of these guys, and in the third quarter they said across the board financials are just mind-boggling and part markets are expanding. this stock should be north of $20, maybe even 30 if the numbers are real. stuart: deepfreeze hitting much of the country. does that mean that you will shop less? you can what is -- you can see the map. but it back up for a second. rio looking at-43 with wind chill pill minneapolis. for degrees in dallas costs 16 it centennial. >> i'm getting a chill looking at the map. stuart: i can't see people going out and buying, but i can see them shopping from home online. >> you're absolutely right. i was doing research. shikar right now fenders are@ starting to shut down their stores and get rid of their employees for the next 48 hours because of this deep freeze. they're anticipating no one coming in to shop, to do any of the new year's returns, to

stanley--moving into companies like comerica and key corporation. traders don't seem to know why this is happening but it's a theme we've seen for the last 3 or 4 trading days. > >quick question about target--finally the stock started to get rattled here over this cyber security breach. would you buy this stock at current levels? or would you wait for the dust to settle? > >i think i'd wait because it's not just target. obviously they have one big problem on their hands but when you look at the rest of the retailer base, even macy's--a strong company with good interest margins-- they've all been taking chin. i think it's a secular headwind that's gonna last for the next several months. > >thank you larry. > >you're welcome. it's a davos day. a day when world leaders get down to the business of improving the "state" of the world.those attending the world economic forum in gorgeous davos switzerland including presidents, prime ministers, billionaires and celebrities such as matt damon. despite the list of who's who-- dr.bluford putnam a chief economis

morgan stanley says the stock is overpriced and keep in mind morgan stanley was one of twitter's ipo partners. this fellow, john mcafee. he was wanted as a material witness in a murder, he fled to america, he made we're web videos. intel says this morning it's no longer going to call its software mcafee. he has not been associated since he created it. had nothing to do with the sale to intel. but mcafee security has been the name. intel not saying why, just call it intel security. >> interesting. >> thank you. thanks a lot. we'll check in with christina loren and weather is the big news. not going to feel guilty what we're doing here. >> no. you know what, we do have the drought running and we have rain on the way, not enough to put a dent in the drought, but i can tell you the pattern is shifting more wintry. 43 degrees in the east bay, 49 in san francisco, 45 in the south bay headed to the mid-60s. this is the last day for the big temperature swing. by tomorrow know 60s, upper 50s on the way. then we bring in the rain. we'll talk about that. back to you, terry and laura. >> 5:56. y

he is morgan stanley chairman. and we just asked reuben stein and tom donohue, what do they do over here? what kind of business are they taking care of, if at all. i know you are. what are you doing over here for morgan stanley? how does it make sense for you and what are you accomplishing? >> first off, joe, it's great to be on the set here. >> beautiful. great. nice. warm. weather great. awesome. >> obviously two things are going on. there's the conference itself. important issues of the day being debated bringing the political, the business community, academic community together. that's very convenient. secondly, for institutions like ours, opportunities to see clients who are from everywhere around the world and all gathered within half a mile. ee northern mousily convenient. opportunities to spend time with people from all over the world. >> you can leverage your time. this isn't going anywhere. there will be a davos. there will always be a time and place for davos. >> it's always been here except the year aft

. >>> netflix fell today after morgan stanley downgraded its shares. the video streaming service was the top performing stock in the s & p last year, but morgan stanley cut its rating to under weight to equal weight because of competition from hulu and others. shares fell. >>> michael kors took a hit, citi downgraded from neutral to buy. they cited the company's high stock price and concerns about slower sales for access richlt the stock dropped to 78.94. >>> sonic said its quarterly profits surged 34%, and that's thanks to solid sales growth and lower costs. the drive-in restaurant chain also said it's looking to expand to competitive markets in the northeast and california. shares popped more than 4 .5% to 20.15. >>> and shares of coca-cola ended a little bit higher today, something a lot of analysts predict we will see a lot more often in 2014. after years of declining soda sales here in the u.s., the company is focused on emerging markets and new products and has seen shares regain a lot of their fizz. sarah eisen has more. >> reporter: coke was no

morgan stanley in a new survey of cios, finds that network security is high priority in 2014. cios expect an average of 8% growth in security this year. >> all of the indicators -- >> keith weiss at morgan stanley says hackers can do a lot of damage. by stealing everything from a company's intellectual property to its customers' personal information. >> cybersecurity in particular has been a top priority for cios for the past several years. the main reason is the threat environment out there is one getting worse. and two, quickly evolving. and that the threats are getting worse. and what those threats actually are is a changing, change in dynamic. so cios are spending a lot of time trying to stay ahead of the threat environment. >> the question for investors, which companies are best positioned to capitalize on the stronger demand for security. weiss says one of his top picks is fortnet. given the stronger demand for security. he says it's going to get more business this year. dan ives with fbr is sticking with fireeye. he said it will move higher as it takes share from intel'

of course, there are operations act up by the ceo of morgan stanley, who does private lending. are never going to get to the scale of a bank, because they are not leveraged financial institutions. were two metrics, deutsche bank and the challenge at the top, with bank of america at the bottom, taking a victory lap this quarter. what do they have that the others do not? >> bank of america, morgan stanley, the largest financial advisory firms in the world, tucked inside a bank of america. bank of america moves past litigation issues, morgan stanley did the same thing, you are starting to see that model based on client service is beginning to generate the kind of earnings leverage that you cannot get right now. >> forming later today? >> correct. >> well, one of the most acute ceos -- we all have different characters, we do not put them all in the same blue blazer snow boots- blue blazer snow -- i will get it out. >> the piano bar did its damage, of course. >> killed me. >> what i find interesting is the way we heard from different banks during the earnings season and how they are

that is the name that go inside morgan stanley. and you know, now it is not quite, not quite what it was. lori: i thought yesterday's discussion on interns at goldman sachs falling asleep in the john was pretty bad but you managed to surpass that. >> i tell you this, i like to have fun with the wall street guys and wall street is not jjst numbers and dollars. it is, it is a lot about that and lloyd blankfein worried about his business model under these conditions but it is also some fun stuff. lori: you fit right in. >> this is what going on inside these firms and there is a body language indicator inside morgan stanley. they're talking about it, whether he is right, whether it is right this quarter or not i can't tell you. lori: you want to see my, holy crap body language? ashley: that is not hard to interpret, is it? >> can't bet anything by you guys. lori: no, actually i do appreciate your analysis on nu skin and herbalife. that was actually useful. ashley: wow. want to see some body language from charlie now? lori: he likes me.

mgm new high, morgan stanley upgraded and st. jude has been a leader on the s&p 500 gettinn positive comments, it was raised to a sector raising the price target to $70 from $70. the yum brand story is rebounding in china. >> cold, windy weather wreaking havoc on travelers, looking at the misery map, is there ever a better name than this? 7,000 flights have been canceled, 19,000 delayed since yesterday, atlanta and chicago area airports getting hit the hardest. what you doing to stay warm and fuzzy this cold weather? you can tweet us, an airline analyst, managing director of interior capital manages -- joins me with what this means for the air line. on the one hand it is cold for the winter, the airline sure the plan for this. >> every year is different and every year the impact on the customer is different. it is in the base numbers every year and it is an unusual year when you don't have something like this. ashley: does that hurt the bottom line when you stretch out the quarter. or does this have an impact? >> i don't think so

morgan stanley also rained on that parade, by the way, down 9.5% this week. now pulling back. they're concerned about twitter's ability to grow in a crowded online ad market. and so while these two companies seem to be high fliers, no doubt netflix was a real winner on the s&p 500 last year only to see it be a big loser this year, right now there's some concerns. also a valuation call, right? went you start to see companies running up the way these two have, you start to see them taking some money off the table. cheryl: nicole, thank you so much. this is our power mover of the hour today, and it's yahoo!. this is a media and search giant. the stock is up 98 cents, it's at 40.be 91, a gain of about 2.5%. of yahoo!'s ceo marissa mayer is set the deliver the keynote address today out in las vegas, that's going to be at 4 p.m. eastern time, that's about 20 minutes from now. so we're going to see her out in las vegas talking to the troops out there, giving a little update. investors, though, around the globe are going to be listening to what she has to say, and they're probably pre

morgan stanley said to be top banks.posure for they will pay some portion for last year's performance in cash. also promoting a few employees to managing director and an ago.ase from 140 one year we will break morgan stanley earnings later today on "surveillance." ♪ hello. welcome back. i am mark barton. "countdown later on,"-- later on "countdown," iran side look at "the wolf of wall street" later. richest man, the founder of galaxy entertainment. taking a look at the rise of gambling in the region, our gaming analyst joins us now. lasts more than doubling year. one really differentiates it from its competitors is? >> it's interesting looking at galaxy versus the five other competitors in macau. it really has grasped the vision of where macau can go in the region where all of the growth is happening. they have a land bank larger than anyone else. they built one facility, one casino resort there and they have another one coming up in a couple of years. and then more following on from there. in the end, what really differentiates galaxy is that it has a significant core business that

morgan stanley had a funny quip. they said valuations are, quote, loco. back to you. >> all right, sheila. thank you very much. so what food stocks might be your best bets this year? let's bring in two guests. piper jaffray and r.j.hatavi. sheila talked about that morgan stanley upgrade to mcdonald's. here's my problem. the dividend payment on mcdonald's, 3 hadn't .4%. do you believe mcdonald's will have to raise its dividend and soon to compensate investors for owning what has been a pretty slow-growth company? >> yeah, i have dividend growth being part of the story longer term with this name. i have effectively their dividend growing at a high, single-digit clip. i could see it going above that. i think returning cash to shareholders has been a big part of the investment story. i think mcdonald's will continue to do that. >> certainly there's one stock that sticks out for both of you. that's starbucks. nicole, give us the case. >> well, there's a number of catalysts. the first is the u.s. comp. the second is european margins. they're getting much better

>> well, i tell you morgan stanley's numbers were pretty impressive. considering the litigation fees. you back those out. it is very impressive showing. goes to show you what happens when you're not dealing with just a huge, huge, you know, multinational bank and more of a traditional brokerage firm. to me it's a good sign of things to come. you know, i don't know how much longer the government will keep going after these banks for their pound of flesh. we need financials to lead this market. if we continue to see earnings way they are for the most part, next week as you mentioned, lion's share of earnings for s&p, should be an exciting week. hopefully we'll finish up on a high note. lori: sound good to me. won't argue with you on that one. jason, thank you. >> thank you. ashley: pitching for jay-z's rock nation. new york yankees pitcher c.c. sabathia, joining likes of new york jets quarterback geno smith and giants wide receiver victor cruz by signing with jay-z's sports agency. the 33-year-old has three years left, three years left on his contract, w

now that's part of morgan stanley really. most of what they used to have is part of nmorgan stanley. >> i was going to say, even more reason why i'm looking forward to hearing from mike mayo later on in the show. we'll bring that to you just a little bit later. let's talk biotech. it's one of the hottest sectors this year. stocks like gilead up more than 100% last year. so is there still room to run? mark is the number one ranked biotech analyst by institutional investor. he's head of health care research at isi. joins us now from norksz no. welcome back. >> thanks a lot for having me. >> good to have you on. >> thank you. >> health care has been ripping. biotechs have been doing well. can that momentum continue? >> look, last year was the best year i can remember my 13 year at biotech. threw a dart at ten biotech stocks, nine went up and nine out performed the broader market. it was incredible. why that happened? well, basically these companies developed and discovered brand new drugs and drove numbers higher. the numbers ha

lastly, bullish comments from morgan stanley on casino players that have exposure to macau. more high rollers expected to cash in their wins this 2014. >> seema, thank you very much. >>> great expectations, wall street ramping up growth estimates for the u.s. economy following, we will tell you how optimistic the economists are getting right now. >>> and 2013 was a good year for sony stock. what's ahead for 2014? the ceo will join us live from the consumer electronics show in las vegas to lay out his game plan. >>> plus, giant waves force beach goers to flee and a great driving lesson from the state of massachusetts. ask me what it's like to get your best night's sleep every night. [announcer] why not talk to someone who's sleeping on the most highly recommended bed in america? ask me about my tempur-pedic. ask me how fast i fall asleep. ask me about staying asleep. [announcer] tempur-pedic owners are more satisfied than owners of any traditional mattress brand. tempur-pedic. the most highly recommended bed in america. now sleep cooler with extra cooling comfort on our bests

morgan stanley upgraded shares of boston scientific to that same overweight rating. medtronic gaining ground after announcing it bought privately held tyrx which specializes in combination drugs and medical devices. keep an eye on the entire industry in today's trades. back over to you. >> absolutely, thank you. we're also watching shares of yahoo! in today's trading session which are down two-thirds of a percent right now. the web search giant says some advertisements on its european websites last week spread malicious software, potentially infecting thousands of users. yahoo! says it has removed those bad ads. ty, up to you. >>> a key procedural vote on extending unemployment benefits for 1.3 million americans, it is expected to fail in the senate this evening, but the unemployment crisis and for some, it is indeed a crisis, is likely to get much worse in the year ahead. our senior economics reporter steve liesman is here. what happens to the 1.3 million americans and the others that will be affected? >> i would like to extend the universe. it's more than 1.3 milli

. >> morgan stanley looking good. 3% today. a new high, 32.95. had a fall in quarterly profits and legal bills, but the earnings did beat the estimates and that $33 right now. and a new high for american express and new high for morgan stanley. thanks a lot. nicole, john layfield. are you with us? quickly, 30 seconds, oil services the drillers, you happen to like those, which are you buying now? >> sea drill based out of bermuda. and 9% yield. one the youngest. and insco, and i even both of these and mixing privatizing and opening up the energy sector i think is going to be here quite a while in a bull market. charles: you're playing the idea that we've got to drill for more oil around the world and these guys are sort of a pits and shovel kind of thing? >> absolutely, yeah, i'm playing on a couple of themes and one of the main themes is people are going to start drilling for oil everywhere, you look at the renaissance in north america. the privatization in mexico is really a big deal aad i think these are two great ways to play it. charles: i ho

he works at morgan stanley. i don't trade a lot of my own -- i trade a portion of my own but i let the professionals do it. we've had this conversation before. this is what you do for a living. i go out and do speeches and talk about football. those are things i'm familiar with. i would rather let the people handle the brunt of my portfolio that really know what they're doing. that's why schlumberger, for example, is in my portfolio versus something i trade. but i keep an eye on things and i like to have my finger on it. i like the equities. to me it's one of the places where you can get a great rush like you did when you stepped on the football field and walked out into that stadium. it's hard to find. once you leave the game, there's nothing like it. it's three hours of does it happen. it's like at 4:00 it's over. let's start again and see what happens tomorrow with the trading day. >> you will sit for a few. come back and talk football. don't go anywhere. joe theismann is sticking around for more. dominic chu

even though morgan stanley is trying to go after these guys. >> that normally wins in most markets. cheryl: jim, thank you very much for being here. we will have to bring you back. thank you. >> thank you. cheryl: the closing bell is going to ring. 41 minutes to go. the real wolf of wall street has sparked new outrage among many prosecutors. why this is an exclusive story you're only going to hear from charlie. and t-mobile ceo has been on this show, he holds no punches. he is hammering wireless rivals with this 12.0 strategy. we will tally how t-mobile's plan to fulfill even more customers. we will be right back. ♪ [ male announcer ] here's a question for you: where does the united states get most of its energy? is it africa? the middle east? canada? or the u.s.? the answer is... the u.s. ♪ most of america's energy comes from right here at home. take the energy quiz. energy lives here. cheryl: okay, so "the wolf of wall steet," the actual wolf of wall street has u.s. attorneys office outrage as he is making claims on facebook about the status of his repayments to the innocent v

dragging citigroup,i morgan stanley higher in its weight. and the conference call with analysts has just finished. fresh from that jason goldberg managing director and senior equity analyst at barclays and eric uger who is u.s. bank's equity analyst with s&p capital iq. welcome to the program. eric, let me kick off from you. what did you get on the conference call that's notable for viewers now? >> well, we think the outlook is very strong for bank of america. we think that they could grow revenues at 4% this year about twice that appears. and we're looking past the fourth quarter, which had many moving parts to it. i mean, the fourth quarter a lot of it was driven by reserve releases. we think 13 cents of the 29 cents that they earned just came from reserve releases. and we saw some negatives in terms of higher representation and warranty claims for legacy mortgages. but some of the positives were that the net interest margin increased 13 basis points which is very, very strong, and could bode well for 2014. >> yeah. and investment banking

morgan stanley was flashing a burning yesterday on a lot of companies, a lot of stocks, twitter one of them, fell as much as a 10% after morgan stanley cutting its rating on the stock sank the girl blogging service to site might win online ad revenue to larger rivals like facebook will stop they cut it to underweight. it was only a matter of time. now people step back and say, how are they -- >> one of the major underwriters on the stock. >> very good point. >> let's switch gears and talk about the senate. 56-26 to confirm janet yellen as the federal reserve chairman. it was a vote for continuity. yellen has pledged to continue stimulant until achieving a strong economy. tom, i know you have a morning must read. ask it is part of a strong economy. that would be investment. not only to the crisis, but before the crisis, economists were focused on a lack of business investment. henley smith is with us from commonwealth asset. it looks at -- outline our need for investment. jobs come from investment. >> absolutely. jobs, jobs, jobs. a role continued to be jobs and i think that will be the

you look at goldman sachs and morgan stanley. it is clear that goldman sachs wants to remain an investment bank. morgan stanley going more down the asset managers route. cases, thein most investment bankers are very much an integral part of the business. the argument ubs would make is that the investment bank works closely with the wealth management people in dealing with individuals. my view is that it is not beyond the wit of man to come up with very robust service-level agreements to work on that. we have to face the fact that regulators are taking a tougher line. while the investment bank that they have created since they changed things in october 2012 is much more robust, it still has risks. >> if they do spin off the investment bank, what would it means for shareholders? >> it could be quite positive. in our report we do a case study of when americans did the same thing for lehman brothers in 1994. it turned out successful partly because we had good tailwinds in financial services. 1998, ityou look at was the one-year lehma

twitter shares down 6% on the morgan stanley dongrid. back to you. >> thank you. >>> 6:40 right now. another check on traffic. >> thanks, guys. san jose still show in those northbound lanes. there was an earlier crash in sunny vale approaching the warren expressway. you can see it approaching the trumbull exit. those lanes will see heavier than normal traffic conditions. by the way, that motor-vehicle accident has now been cleared to the right-hand shoulder. go to maps. that's word of a head-on crash. this is westbound 84 in livermore. it sounds like a three-car crash. an ambulance has been called to the scene. one person is reportedly trapped. also southbound and 80 approaching el dorado, that accident is still there, off to the shoulder. there may be still some activity. traffic heavy past 92 coming into union city. it is back to usual this morning for the atmont pass, and livermore valley commute once again in the red. so that drive time is almost a half hour right now in the westbound lanes. the heaviest traffic, though, the thickest

analysts at morgan stanley predict this kind of gambling will generate close to $10 billion by the end of the decade. a justice department ruling cleared the way for online gambling at the state level but not nationally. some are calling on the federal government to lift its ban, seeing it as a way to create consistency. so far flee pro online gaming bills have been introduced in congress, but not everyone wants to see those bills become law. >> in the history of bad ideas this has to be one of the worst. internet gambling. >> that video is from the coalition to stop internet gambling, backed by sands ceo, and sheldon adelson, they claim it crosses the line of responsibility. adelson has vowed to spend whatever it takes to convince congress to keep the online gambling ban in place. so what is the future of online gambling, and is there a compelling argument for congress to make it legal. joining us is a former congressman from arkansas, and with the association of players association and online gamers. vin we're seeing this move forward at the state level. why not just leave it there?

morgan stanley focused growth. >> long term capital appreciaon tries to tamp down volatility. they look for undervalued companies. my kale you have to have a $1,000 minimum investment. >> if you like tech companies like google and priceline it's a funds for you. if not avoid it. >> prevision cash parts. why is that your pick? >> they make components for the industrial sector. they borrowed a lot of money that they are using to make acquisitions to help the company grow. they borrowed this money just before interest rates started to creep up. >> good company. good balan sheet. at a good price as well. >> just want to talk about one thing before we go which is the disconnect between wall street and main street. macy's on wednesday decided to fire 2,500 people. the next day the stock went up. sometimes what happens what's good for wall street is not good for main street. >> that's true. at the same timewe have this full throttle federal reserve where the federal reserve is the wind beneath the wings the stock market. that's at play too. >> michael, americans are getting fed up wi

. >> morgan stanley stock rose the most in almost six months, this after the bank reported a profit that beat estimates. the company is seeing a gain in equity trading revenue. in the meantime, general electric saw its stock fall the most in almost seven months. the company failed to deliver a profit margin forecast that the c.e.o. had been repeating for more than a year. g.e. did report first-quarter adjusted earnings that rose 16% to 5.42 billion. that matched estimates. and telling shareholders to reject a $1.61 billion takeover proposal for men's warehouse. the bank says it undervalues the company. those are some of your top headlines over the hour. back to you. >> thank you. president obama proposed changes that are intended to strike a better balance between national security requirements and civil liberty protections as well as future operations of u.s. surveillance prose. our chief washington correspondent peter cook has more on the president's reforms and reaction to them. peter. >> the president trying to walk a balancing beam today. in his 45-minute speech at the justice depar