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tv   Squawk on the Street  CNBC  July 22, 2013 9:00am-12:01pm EDT

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>> he has a way of a lot of times of looking at things half full. >> but making a lot of sense. i worry more about how well general electric does than i do about mcdonald's. they're both big important companies, but you want the world, you buy ge. >> howard dean, thank you for joining us. >> my pleasure. thank you. make sure you join us tomorrow. "squawk on the street" starts right now. good month morning. what a week we have in front of us, a third of the s&p reporting earnings this week alone. machined -- many after he hill the record highs. nikkei was up overnight.
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a miss for mcdonald's, citing exchange rates, weak consumer spending. we'll break it down. >> it's not fun and games d. gas price is spiking 12 cents. >> and steven cohen officially charged by the s.e.c. we'll have the details on what it means for s.a.c. capital. mcdonald's earned 1.38 a share, revenues also missed. global comps up 1%, including gains in the u.s., but same-store sales fell in both europe and the asia pacific, middle east, africa region. saying the economic uncertainty is pressuring quiter spending. guys, it looked like june comps slipped a bit, something that janney highlighted. >> that was a good call. if you go back over how some others are doing, yum believe it
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or not doing better than mcdonald's in the united states, overseas, chipotle, spoke with jack hartung, the cfo on friday, they're seeing an acceleration of same-store sales. obviously they have this move with integrity campaign, people feel good about getting away from the idea of the food chain. i expected better from mcdonald's, i wonder if people are turned off to the kind of food mcdonald's has. >> i'm curious, should investors then look at this and say mcdonald's specific or is it a brought el reflection of this idea that the consumer is slowing down a bit? >> i want to say it's mcdonald's specific, only because i would love to see anyone else disappoint at this level. i'm not sure that you'll see that. one of the things, carl. that bothered me, they've done a lot of innovation, it doesn't
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yet seem to be kicking in, but yes that's what's so necessary. >> they're not fully in place but you're right, whether or not there's some sort of hill that the consumer needs to get over, this is the play where you go for arugula in a wrap, or do they continue to lose share? >> if you think the consumer is in tlubl, would they be paying up for burrito or a panera salad? there does seem to be a sense at least in europe and here that the cheapest food may not be the best food. >> foreex did -- a theme we heard last week and probably will hear this week.
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and just not getting that. >> record highs, but i'm also still concerned, downgrading their gdp forecast, the journal has a story about economic uncertainty, the inability to get that engine past that point where we can really take off yet again. shouldn't i look at mcdonald's within that framework? >> but mcdonald's within the confines of holy well, ingersoll-rand, general electric, schlumberger, are these not also companies -- >> much better than expected profits. >> but hey, you know, i just see orders going up. you know, the conclusion that things are weaker does not jibe with the facts. i mean, i always -- >> from an industrial standpoint. >> right, from an industrial standpoint. we haven't seen the retailers
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yet. i don't know what they're going to do, but i do think before we reach a conclusion, coke cola was really the only quarter last week that i didn't like. coke cola another inexpensive priced thing. i'm not talking the goldman sachs tax on aluminum cans, i didn't know about that. >> it's just warehouse, don't worry about it. >> what was the number based? >> 5 billion, something like that. >> a piece in "new york times" about goldman sachs, basically inflating the price of aluminum by keeping it in a warehouse and moving it around unnecessarily. that's essentially the gist. >> the article was quite precise about how a lot offed commodities have an investment banking tax on them. let's call it that. great reporting. you have to recognize great reporting when we see it. >> apparently the president is going to make a speech on economic policy in the middle of
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the weeks. the times pointing out the five-year anniversary of the crisis is this september, and if we're still -- i think to david's point. if we're doing 0.3 gdp five years after the fact, that will create some political questions, right? >> i also found another -- where the jobs are. did you see north dakota? if you go to the bakken, i think the president going to the areas may be the areas that are hard-hit maybe makes sense. yes, we should have a stronger recovery, but definitely international companies are doing tremendously. international, which does not hire that much is a terrific place for profits. >> and you mentioned the industrial economy.
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>> yes. >> making those u.p.s. remarks of what is a week and a half ago or two weeks ago look sort of misleading. >> and u.p.s. has been strong. did you notice federal express is -- >> doesn't it happen. >> yes, it does. union pacific had an outstanding quarter, now some of the lines weren't so good agriculture, coal get better, but i'm on these calls, listening, think ig -- and yet there i am, and i'm kind of astounded how good things are, so i'm always caught. wireless spendsing is obviously up a lot. there are a lot of sectors i look at that are doing very well, yet i come back and say u.p.s., you have some explaining to do, guys. if it's asia, i get that, but -- >> they said u.s. >> i know. >> we're still waiting and wondering. >> autos were so strong in the union pacific call.
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>> johnen controls saying autos were terrific. these are real companies. they employed a lot of people. >> by the way, honeywell to neutral? >> my charitable trust owns it, but i read that, and saying one more valuation plays, as you said last week, you know, they're not good calls necessarily. >> no, but if you try to stick with some sort of discipline as an analyst, you know, i guess you have to. >> honeywell has to go 19 times earnings to get to 100. let's talk hasbro rival's mattel reported quarterly results below forecast. there may be an attempt to make this a brought of story about weakness in the consumer. from what i hear, jim, you know walmart is running things,
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taking margin out of the business, but even more importantly, you're talking aboutal changing demand cycle particularly in software and games. >> i totally agree. there are changing patterns of the consumer. they're not going to blockbuster movies as much, not buying transformers,ty find when i read these things, i say, listen, guys, time has moved on. where are you with your -- with something that can play on xbox one where that comes out. this is like the equivalent of the conjuring, okay? they don't like lone ranger, they like the conjuring. >> speaking of which hasbro disgust blame they on partners, and there's being big budget busts. >> despicable me does well, this conjuring, again, everybody is
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talking about. how much did that cost to make? i've got to see it, but huge night mares because of last night. >> this is the first i'm hearing of the conjuring. >> where do you live? >> i haven't -- i have not been watching a lot of television lately. >> no action this happens to be a movie. >> no, i'm saying maybe i missed the marketing campaign for it, but apparently i haven't missed much. >> no. >> sharknado. >> i made sure to get up to date on sharkn amount do. mattel was not so great either. maybe traditional toys are having a lull or there's a secular decline. >> not to mention, don't hair about the toys "r" us ipo. >> how is it doing? >> manage has changed. it's like, no, you own it, no,
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you own it. >> like they were talking it up and it was like, bring the deal on. >> no. >> deal no-go-go. no, i know that toy. no-go-go ipo toy. >> aaa says the nationwide price jumped 12 cents a gallon. >> 3.67, it says the increases are expected as the price of oil rises. it's been particularly acute in the midwest. >> this is west texas going away, the crude discount, you're suddenly paying more at the pump. i find that there is some -- i was going back over stories in 2011, we hit these levels before and it didn't discourage nearly as much spending. will people play with their tablet more? will they stay home and watch tv more, watch some sports like the british hope? >> perhaps people stay at home more, after lefty's performance
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over the weekend. how can you not feel good -- >> i was busy watching harvey destroy the phillies. >> i didn't even see matt harvey. >> like i said, i missed all tv this weekend. i was going through new england. >> you don't shop, you don't watch tv, what do you do, read books or something? >> that is a great question. when i figure out the answer, i will let you know what it is i do. >> every time he breaks some dell news or hp -- >> you're working. the wednesday dell meeting, if they cancel that, are you destroyed? >> no, i'm not destroyed. i'm sure we will talk about it. it's fascinating. i continue to find this game of checking taking place is fascinating. >> there you go. >> we will have to get into them. >> and thank heavens there is something that fascinates you. [ laughter ] >> i know. i tell people i have no hobbies
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other than swimming. i got nothing. i like my kids. yeah, they're nice. one of them is gone right now, but i like them, spend time with them. >> you'll get plenty of time with us. later on in the hour, steven cohen feeling the heat from the s.e.c. -- the agency taking a step to seeking to impanel him. netflix's elf lesion from video streamer to home of the original emmy nominated content, a closer look, a great piece by david carr today. as earnings officially kicked into third gear. a lot more "squawk on the street" back in a minute. [ male announcer ] come to the golden opportunity sales event to experience the precision handling of the lexus performance vehicles, including the gs and all-new is.
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or lack thereof of criminal charges that would most likely be filed or would be filed by u.s. attorney for the southern district. that would be a man you interviewed last week. >> i think you had a chance at delivering alpha to say, listen, this is not a criminal issue, this is a civil issue. he doesn't did not do that in anything he talked about how the statute of limitations will not run out, and a variety of charges that can be brought out. ongoing conspiracy one of the great weapons that really the federal prosecution has. i think it could be a tandem track, providing that there is no cooperation -- they can easily refer it. >> for those who missed it last week, this is jim talking to barrara, trying to get him to comment even if somewhat obliquely. >> we can't really directly talk about s.a.c. capital, i know,
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but talk about phone calls. are the phone calls too laid? my understanding from the conventional presses if you're going to bring some of these cases, the statute of limitations is up. you better do it this afternoon or it's over? >> i'm not going to talk about any particular case, the institution you are mentioned or any institutions that people are thinking about. what i will say, as a general matter, and it's entertaining, there are a lot of armchair lawyers and prosecutors who think they know what the legal theories are and statute of limitations issues are and and often they are quite wrong. >> i don't want to talk about any particular nub, i don't want to talk about any particular charges, i don't want to talk about any particular insights have been wrong. however -- [ laughter ] >> not from "new york times," not from peter lawfulman, a series that says, listen, this ball game is over. what preet did say is that's
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completely work, cut it out. >> they only bring them when they really think they can win, and they haven't yet. >> you don't think they picked the names out of the phone books? >> no, i think when you look at their track record, they make sure to bring the cases. >> that's controversial, by the way. the impact of this s.e.c. more is hard to saying. i spoke to a head fund manager this morning who said he got four resumes from s.a.c. employees. so there is a question whether s.a.c. will start to lose employees. if in fact all the money that goes away that's managed outside, you'll still be left with something like $9 billion, it will be turned into a family office, yes there will be a reduction in the size of a firm that has 1,000 people in it to one that is smaller, but
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interestingly, you can't stop steven cohen from managing his own money you can say he can't manage outside -- and by the way, the bar is lower in these cases than certainly in criminal. >> if he makes a deal with the s.e. s.e.c., cooperation, maybe the u.s. attorney doesn't go after him. >> though they don't always wok in tandem. >> no, they don't action and i thought pre-u.s. attorney, there were ample opportunities to say, look, we just have one wall street to get them. he was saying we don't have to move fast. >> it looks like we're getting with of an exit by thirdpoint, held by third point, purchase price of 29.11. upon completion, third point will own about 20 million shares -- >> nice trade. >> he's got board members.
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he's one of them, but they have what, i think it's -- this has been a great investment for lowe this was masterful opportunity, well done. it's interesting. loeb and icahn, two names that have been really nailing this period. >> think back to the turmoil that the c-suite and the board was in prior to myers' appointment. >> loeb, wilson and -- are resigning. so third point -- that's why i wondered. i hadn't seen this headline, because you don't typically sell significant amounts stef stock. you get board seats, then you're locked up, and that becomes a real issue.
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>> she's really bringing in fabulous people. i continue to believe that it's real, that meyers is doing an amazing job. it's a great opportunity to have non-financial guys from the board, and actual inventors, creators on the board, which i'm sure she wants. >> the board will go to seven, the remaining director,s the company says, are committed to revisiting the board size and is -- >> we're on air as we do this, so creeping into these stories, but less than 2 million, selling 40 million, three board seats going away, this is the end of the loeb active period and trade on yahoo! and he's walking away with great success. >> i think he played a big role in the shake-up, and
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congratulations. how about congratulations? >> yeah. >> i don't know the man personally. he's got a ceo, is confident with marissa mayer at the helm. >> enjoy. finches signing off, on to sony. with that in mind, we'll keep yahoo! in our sights. we'll get you off to a fast start as if we needed one already, back in a minute. with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create
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all right. we've got -- actually we're short on time. about four minutes before the opening bell. what are we talking about in the "mad dash." >> let the parlor game begin. they say apple will beat expectations. jmp says they will report worse than expected. ubs is saying the activations for the iphone from verizon means they're going to be above consensus. holy cow, there's a lot of different -- you can drive a truck through. >> what do i do? what am i grabbing? >> i'm opening roll of new products. that could be what people want. i'm thinking more about 2014, because 2013 is in the bag when it comes to a big tech company. we're going to watch apple, yahoo! and of course the opening bell just 3 1/2 minutes away. stay with us.
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big morn shaping up. with eight sessions to go in july, guys, the s&p is having its best month since october of 201 2011. >> you're going to miss july. we are the -- do you know that in the '80s and '90s we always had summer rally. wow, this is a summer rally. at the big board today, graybeard, highlighting their relief efforts during heron sandy. over at the nasdaq, travelzoo. doing the honors. what a wild trader that has been. that's just a tiger. mcdonald's today later on ford, boeing gm, facebook, there's a lot on our plate this week.
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>> i know people at home will think, wait a second, why haven't they drill down on the starbucks in the afternoon? the answer is we will have afternoons coming up, where literally there would be five large-cap stocks. this will be right in year sweet spot. >> thank you, i appreciate that. of course, it is a seminal moment. you can dahl it a turnaround plan, if you want. dan loeb, in the 13s, that is the symptom price was in the 13s. succeeded in ousting the ceo. he helped by not just fudging his re mailings, but then not being honest about it. those of us believed that would pass. it didn't.
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he was gone, they find marissa mayer. then one who stays on the board. why are we telling you about it? the company repurchased 20 of the roughly 40 held, and the three board members that were appointed were nominated and appointed by third point, will step down, but this is -- this has been an interesting campaign, remember, he had not engaged in activism for some time, but the type of act visit he engaged in washes punch you in the face, write really mean, nasty letters, not necessarily particularly constructive, but effective. this was a different animal for him. he moves on to sony, where it's not clear he'll be able to get what he wants action but yahoo! 13 to 29. >> they have that very deep buyback. >> 40 mill of which they just did.
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you can't argue the stock performance has been due to ali baba. they did take capital back, fully taxed, but there's more to come. the ipo of ali baba will be very closely watched. my sense is the time is right. and where you want to actually capture your gains, to a tern sent. i suppose he feels that now is the time to do that. you should always look and ask that question, carl. it still owns 20 million shares. >> one of the things he's doing, which i think is smart, the company just reported. there's nothing we don't know that he knows. this is the safe zone to take profits itches and i have to as a result of three directors.
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i wonder what the issue by sony is -- you know, the guy is tenacious, and sony may be a buy anyway. we haven't talked about the equivalent of the parliament there, really just going behind the economics, so sony may have the wind at its back, and this man can come in and make a lot of noise. so far sony has been constructive, too. how about last week when nelson basically had nothing good to say about -- >> though he is trying to get her to buy another company she doesn't want to buy. >> the white paper was fabulous. it's a great read. >> yahoo! is the biggest loser on the s&p, down 3.5%, does it make you wonder maybe element
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oeb is tell graphing that the best tisk are behind us? >> i think this is the year to play offense. i think that -- more real is better, i -- betting against mayer has been one of worth bess in the world. ail i baba is the gift that continues. they're really starting to shrink the number of shares. >> what's come back is microsoft for one after that horrid day on friday. >> yeah, that was gripping. >> worst day in about four years. h hasbro is making a comeback. >> remember, i've been thinking that the tablet has changed the game. it's a lot of younger kids, very small kids use it. keep your eye on google, which was supposed to be so hard. i took that quarter home over the weekend. gee, that was a good quarter. and motorola, as you said, from day one was a mistake.
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>> google in classic fashion has scheduled this press event on wednesday, the day after apple's earnings. >> right in the face. >> so maybe some tablet, but those guys are always watching the calendar trying to steal each other's thunder. >> there really is -- this is kind of like boeing and airbus. am i going to lose cvs if imtime warner capable? what the heck is going on? -- say okay -- >> don't do that. >> it takes me back to when dish and cvs were at it many years ago.
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railroad. >> hey, good morning, everybody. tech's on the up side. mcdonald's is probably 20 points do the down side, one of the reason the dow is down. big schori, shinno abe finally got his wish. they have -- a big deal, folks, because there's no elections for three years. not just the easy part now there's talks about moving forward, tax breaks, incentivizing, he as been the
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strongest prime minister, japanese stocks are moving to the up side. one potential side beneficiary is nuclear power, i think there's 50 nuclear power plants there. 48 of them have been shut down. they're going to restart a lot of them now, new safety procedures have been put in place. they've been waiting for the political power, so i think you'll see some movement here in nuclear fairly soon. let's move on to mcdonald's, a lot of people wondered what the heck happen. you look at the numbers for europe, they're actually better. arable ya pacific was also a bit better. a couple people said to me that wendy's has been stronger recently, that they appear to be taking some market share, a new product that launched recently. the pretzel bacon cheeseburger -- i know -- but from what i've seen is the sales have been pretty good.
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so same-store sales for wendy's for july, i think that may account for some of the underperformance that mcdonald's has. the competition is just getting a little tougher. you all know what the story is, maybe up 3% on earnings, and down about 1% on the top line on revenues. the star has been financials. you've seen the great report, and citigroup. the lag guards have been technology. and jim had a good point. so far on the industrials, we've seen excellent records from g.e., johnson controls, dover had very good reports, we'll see what ingersoll-rand has to say. that's the story in the middle right now. on the industrialing, it's high, the prices are very high. i thought -- it was one of the first analyst guys to come out to downgrade honeywell.
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they've had great numbers, i think 24, 25 analysts who cover them. two thirds have a buy recommendation. this was the first actual downgrade i have seen of honeywell in a while. it's just to neutral. they had a buy, went to neutral, but he was one of the bulls for a while, now the argument is 17, 18 times forward earnings, you have to say that's a bit on the high side historically for a stock like honeywell. so nobody has anything negative to say that i've seen so far, but again the valuations are getting to be a bit of an issue. david, back to you. >> indeed, indeed, though as my friend says, no one puts s&p in the corner. >> huge pieces of necessarily tiff micronews. >> and the boundback action too. money keeps flooding in.
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>> >> also want to get to microsoft in a moment as will. on dell, you can see 1303, of course we're now a day and a half or day-plus removed from the drama of thursday morning, where the vote was adjourned. the meeting was opened, adjourned and pushed out until what would be wednesday at 6:00 p.m. what can i tell you at this point? well, you know, there is a game of chicken going on here, no doubt about that. will you get the best and final from dell and silver lake? that is 13.65, but funnelly advertised as being that's all we've got? or will you in fact get a higher bid of some kind, and what conceivably will that be? the special committee from what i am hearing is certainly pushing for a higher bid, even if we go best and final of 13.65, you probably would not get enough yet votes to overcome the opposition to the deal.
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remember, under the current arrangement, 84% of the shares can be voted. you need a majority of that, 42.01%. what happened on thursday? well, i'll -- let's call that the 100% that could be vote the. 77% was voted and it was basically split, 38 versus 38, but 23% of the vote that wasn't voted of all of the ones that could have been. they need to get that into the yes column. you question is, can you simply do that at 13.65? many would say no. you have to race the question, and silver lake is, will you do so? if they are to do so, let's say they go above 14, or to 14. there are some thoughts that i've been hearing that, well, maybe you get a change in the rules on the voight itself. as opposed to a majority of that 84%. that had change the composition
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dramatically. the special committee will not give in on that -- as well as you were to give a bump, that could create unpredictability. we're in unpredictable land the i would say in the next 24 hours, maybe by tomorrow night. real quickly on microsoft, going to print on, some interesting thoughts about value act. a great deal of time since they took that large dollar position for a fund that's a small percentage of outstanding shares back in april and microsoft. constructed -- constructive dialogue with the company. this could achieve a board seat with what is that low ownership percentage. the challenge here is with the support of large shareholders, this provides a lot of leverage,
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and should be a positive for stocks. there may be other large owners who feel it might not be a bad thing to give them a board seat. >> i think this is incredible. shawn talked about it on air on friday. the idea that they need an outside guide to say -- again you could have not that much symptom. maybe balance mer is saying i've been to widen the tent here, i'm out of ideas. i find this astounding. it's microsoft. >> up shatterly. of course friday was a terrible day, not to get the restructuring, interesting to note that restructuring, most come with stock saves. >> not yet. the one microsoft, that conference call was a bleak conference call, where really they want, listen, we're just not doing well.
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you know, come help us, but it was kind of like, hey, guys, we're open. they also have a different way to be able to value, remember, the cloud i think has been one of the disruptive things. this is not making as much money. >> yeah, we talked earlier about dan loeb pulling back, and it working, value action has always been a not punch in the face kind of -- >> right. >> civility rules. >> exactly. >> meantime watching some of the other -- >> it's the biggest week for earnings, 27% of the market cap of the s&p 500, so after we've seen a couple big high-profile misses, microsoft last week and mcdonald's this morning wanted to see if this earnings season so far is off to an unusual start. the answer is yeah, but not
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necessarily in the way you might expect. again, this is before the reports for this morning, so earnings season to day, we've seen some big headlines, but actually fewer big misses and fewer big beats, so 43% of earnings reports have been near consensus. that's higher than the average of 38%. by near consensus, we mean within a standard deviation of one or the other. so what we see now is more companies reporting nears consensus. yes, there have been some misses, but there haven't been as many as you might think, so roughly an in-line period, though another interesting point here as well, and if we can show one more time what we're talking about here, there's quantity and then there's the quality of the earnings season so far. goldman making an interesting point at 55 cents to second quarter earnings, coming from accounting changes with regard to health care, that accounting
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is coming from the way that some of the purchase accountings, adding 340 -- and then this is an interesting one, guys, as well, if you look at i.t., the exclusion of employee stock options, helping to boost earnings by 25% in general, we're talking about what we've seen relative to expectation. for example, the sales force, you may recall the huge piece going back several weeks, about are they as good as they look. >> and that's actually a story for the sector as a whole. >> that's a great point. remember banks have been the source of an up side. one of the points you're making is, it's too hard, i find, when you see the headline, revenue this -- it's like the -- >> much narrower. when we come back, i hear
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a judge rejecting to suspend the compensation, bp was citing an investigation into the potential misconduct in the office of the claims administrator. the judge criticized bob dudley of the comments he made to our own jim cramer last week on "mad money." >> do you regret that conciliatory stance you started with. >> we remain committed, legitimate victims on the gulf, we remain absolutely committed to that and investing in america. however, we made an agreement that i believe has been hijacked, and it is paid out absurd results. >> hijacked by local authorities? federal authorities? >> hijacked by the interpretation of the agreement we made by a claims administrator that's leading to
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absurd payments to people not affected by this, and in many cases far away from the gulf. >> they hoped the judge would see this the different way. >> i also don't like the judge criticizing what someone says on tv. since when? i hate that stuff. it's not right. >> with that in mind, six in 60 after the break. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away.
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six stocks in 60 seconds. the winner in the telco is cisco. and they've done a fabulous job. >>. paul roe says -- >> the boys in the trenches are softening. we'll hear more about that wednesday. >> r&b. >> buy, buy. this is a celgene, bioagain, do we have -- buy. >> slv? >> this was the best quarter of the year so far. everything is good.
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>> barclays further. >> he says don't worry about it, but this stock is a real dog. i would not make a stand here. >> would you make a stand here with the s&p at some of these lofty levels, given what we are hearing from some big players in corporate, america? >> it's a big industrial company base that's selling overseas. i think europe is turning, and that's what these companies are saying. if it's international and industrial, it's a win. keep that in mind. >> what about consumer stocks, the ones that having rallies all year long? >> i think people felt disappointed by kimberly, but then again chipotle, wow, what a great quarter, so it's mixed. chipotle should not be sold here. >> of all the names coming. facebook -- something that you really want to hear from in particular? >> i have to say, i want to hear from netflix.
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why do we care about netflix? this is one of the thor rare instances, which like what you watch, you bike it, remember those days? it looks lie netflix is like that. >> tonight on mad? >> we're going to talk about the real winners in the oil situation, because the oil prices are changing. there's winners and some losers. wufgt to clarify. >> a busy week ahead. we're a few moments away from the first report of the week,ened a also on the earnings play, do you -- despite the myth? keep it right here. ♪ ♪ ♪ ♪ [ male announcer ] if you can't stand the heat, get off the test track.
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call us. we can show you how at&t solutions can help you do what you do... even better. ♪ . well come bulk. existing home sales are down 1.2% to a seasonally adjusted annual rate of 5.08 million units in june. this is a miss. the expectations was for an increase of 1.2% to 5.26 million. we had a downward revision in may. the median existing home price,
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$214,200. that's up 13.5% from a year ago, but not all homes are up that much form the difference is the mix of home, homes on the lower end selling much less. sales of homes priced over half a million were up over 25%. why? distressed sales are at the lowest point now since the realtors began tracking them at the end of 2008, so distressed sales now making up just 15% of all home sales. investor are are moving out now. inventory up 1.9%, still done 8% year over year. and at this lower -- the realers are saying they expect sales to decrease as they get affected.
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remember, these are closings, not signed contracts. they would not be effected that much. because most of these signed contracts would have been from april and may. you have been, all cash sales are still one third of this market. still all cash over 30%. back to you, carl. >> diana, after the miss on starts last week, that will get some people's attention. meantime we're watching the dow down. due to some late sales. despite the menu items and higher u.s. sales, currently the stock is down more than 2 1/2%. i want to bring in brian bittner, and brian elliott is on the phone the good morning, both. >> it sounds like they're trying to set the table saying don't expect much. >> the outlook is clearly
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subdued. investors -- that's just not the case. i think number one, it's competition. really it's not growing, but number three, it's somewhat of a victim of their own success. it's going to be very difficult to continue to increase and leverage those assets. there's not a lot of slack left in the asset base. >> brian elliott, in terms of share, are they taken or losing right now. >> it's hard to say. i think it's marginal in either direction. i just look at this as much more 6 an indication of the global consumer malaise, particularly in a developed world where you think about restaurants, every restaurant chain has what i call aspirational customers, folks for whom it's a bit of an
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economic stretch to go. you can go from the low end to the top end, but the qsr space, mcdonnell's specifically, it's kind of lower middle income folks, and there's nothing happening to the spending power in those income strata in the u.s. or europe until we get some meaningful strength, payroll growth much faster than we're seeing and those folks get some purchasing power increase. it's going to be a tough market. >> brian bittner, you know, some mcdonald's introduced some of cafe drinks and snackier items, there was a position that they were trying to position themselves more upstate. so why is that either losing momentum, or are they not being rewarded? or more pressure on those customers as well, with the traffic going to, say, a
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starbucks? >> i think they have exhausted their new products platform. that big urge to take sales to the next level or get that new customer, the pipeline is not really stocked for that. when you think in general about mcdonald's this is an earnings equation based on leveraging your existing asset base and growing same-store sales. until we can get that accelerates from a catalyst or, you know competition loosening up a bit. >> bryan, the stock has been resilient, maybe not as resilient as a starbucks or something. also as a corollary, how much slack does thompson have, given what margins have doble for the past seven, eight quarters.
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>> there's not a lot happening, as pointed out, but this is a powerful business, probably one of the top ten, certainly top 20 valued power brands in the world. the business is just soft. the dividend will hold up, it's not a dangerous stock to own, but harding to catalyst for the up side. >> how xw don thompson? >> well, you know, he is, i think, a -- a pretty charismatic guy with respect to the culture. he's been there a long time. i think it's much too early to begin to think about issues like that.
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you know, again, they're purchasing reasonably well after a period of tremendous success, a deck indicate where they really turned the business around. this company was in some trouble a decade ago. and very strongly positioned as a business now. he played a vital role in that, so i don't view the conditions as indicating that a strategic change is necessary. >> guys, appreciate it invest. brian bittner and bryan elliott, thank you very much. mcdonald's brings us to the between illustrator question of the formal, is mcdonald's really wants to improve its value meal, it needs to what? tweet us, and we'll get your responses throughout the morning, may get some smart, strategic suggestions. we'll see. >> just a point courtesy of giovanni, but we do have food stocks hitting all-time highs. i mean, the extent to which there might be a case for
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innovation happening at home, instead of out at some of these interests could be an interesting one. crude oil trading this morning, it's risen about 15% in the past month. the key question is, what does this mean for prices at the pump, aaa saying the national average was 12 cents in a week last week. 3.67 a gallon. our next guest says prices are still on the rise. tom joins us now. thank you for your time. >> nice to be here. >> you were saying, look, parts of it is country wsh -- is that still the magnitude of the gains? >> it's still the magnitude. we're actually seeing some hot spots and cool spots. the northeast right now is a real hot spot. you'll see $4 in a lot of places. the west coast has actually cooled off, and you'll be able to do better than $4 a gallon,
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so in and of itself, i think all these numbers are very, very frosty, and i think we go up, we go up temporarily, but there are long-term problems for high gasoline prices. >> we look at the oil market today, there are people betting the price of oil will be much lower in, say, 6, 12 months time. people know -- could that be different this time? >> no, i think prices will go higher a bit, and then if we have a hurricane in august other september, it's crucial and we'll see -- but the last 100 days should be very much like the last 100 days last year. another thing is, there is a huge specter with a public right now in crude oil, probably about $40 billion more money bet on a higher price outcome than on lower-priced outcomes. so at 134 point, when those folks panic and when everybody
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is all in and recognizes the game is over, we'll see prices drop sharply. some believe the turmoil in the middle east, does provide a bet for those traders to hang into that trade. >> it does absolutely. it doesn't mean you should necessarily buy crude, but it means it's not safe to sell. you can wake up any monday morning and find out there's problem in libya, or algeria or something in the suez canal. so there's not a likely chance there will be an interruption in north african or middle eastern countries, but no one perceives right now that it's safe to sell into this very, very over-inflated bubbly market. >> there's a lot of focus -- >> i just wondering -- can confirm, of course.
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>> the west coast really over-shot, and it's -- the $4 -- a lot of people figured it out in terms of disposable income, but there's a level where people will drive less because of spite. they think you're being taken advantage of. i think that happened on the west coast. >> just briefly, is the focus on warehousing over the weekend with regard to metals, like aluminum, copper to some extent. is positioning moving into crude? >> i think you have to look at it this way. we're going to get to the point where people will look at the reserve and say if we're not going to go to ward with canada,
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we have about a 200-day supply, so watch for that too happen in the next couple years or so. >> tom, thank you for joining us this morning. >> meantime s.e.c. filing charges again s.a.c. founder steven cohen. we'll find out what that mean and what the future holds. "vanity fair's" bethany mcclain will join us live after the break. the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. now get 200 free trades
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i do want to take a look at
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shares of -- really beginning the significant exit. 40 million shares at $29.11. you can see it there. the average costs around $13.50 that's about two years ago. an enormous profit generator. assets now in competent of, it's grown substantially, very successful activist play here. certainly the -- by ali baba, and the valuation of that, but mr. loeb exiting, beginning that exit, and three board seats he had appointed stepping down. or three board members, i could say, stepping down. now that the s.e.c. is pursuing civil charges again
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cohen, what lies ahead for him and the future of s.a.c.? i want to bring in a contributing editor and reuters column. good to have you back. >> good to be here. >> a lot of discussion about the sense of, is this all they have? >> what do you make of this? >> i've actually used that same thing as -- definitely had the sense in the hedge fun community that it's not a clean one, but also a sense of is this a persecution or prosecution, given that the government has sort of destroyed his reputation in the press, and then the s.e.c. has brought a fairly weak set of charges. >> so you think a criminal indictment very unlikely? >> i think a criminal indictment of cohen personally is pretty unlikely.
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i'll caveat that in a machine. but if this is all the s.e.c. could marshal, it's really hard to see criminal thor -- that said, something could change. or stein berg decide to plead guilty, you could have this case change in an instant, and don't forget the precedent where the s.e.c. brought the same sort of charge only to have criminal authorities bring criminal charges, so still anything could happen. >> beth any, anything you have seen that was of interest to you? >> yeah, there's been a sense for a while that for all the that s.e.c. talks about how strong its compliance is, that it is compliance in name rather than in principle. when you look at some of the
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e-mails that were sent and what happened within s.a.c., you know other people in the hedge fund say, wow at our shop that would have been a red flag. it does raise the question if their compliance is so great why weren't they all over this e-mails. why wasn't there at least a paper trail created. >> am i wrong in seeing we've seen something new here in linking cohen to the dell trade? maybe it was a congratulatory e-mail. through perhaps more there than we thought? >> there is a bit more there than we had known. we knew cohen was included. what we didn't know is that he personally had a stake in dell, which he sold at well. and again if s.a.c.'s compliance so great, why wasn't compliance all over that? the e-mail from the s.e.c. guy
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that has pled guilty, saying bakley i have a second-hen lead. at the very least people say it should have been a red flag. maybe there's an explanation for it, but the compliance depend should have been all over for it. >> do rival funds feel like he's being unfirly targeted, on you he's truly dirty and needs to be caught somehow? >> i think there's a food in the -- one guy said in a "vanity fair" story if cohen gets away from it, he'll be the o.j. simpson of trading. there's a sense that the guy is dirty, and he's getting what he deserves, but i think there's also a sense that, look, we're a nation of laws. if you can't get the guy under the law, you shouldn't be getting him at all. that's why i said earlier, in quarters this feels like a persecution rather than a prosecution. >> there's more to come on
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we want to bring you up to speed on a tragic story in texas. a woman fell to her death from a 14-story roller coaster on friday in texas. good morning. >> reporter: good morning, this comes as millions are coming to amusement parks. generally they've had a good track record here. this one has thrown a shock into everyone here. a woman on friday night, a texas mother, getting on the ride, all indications from witnesses are she had concerns about her restraint on this roller coaster from the very moment she got on. she was asking to make sure that it was secure. six flags, however has told nbc news that the texas giant roller coaster does not make a clicking
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sound. so while the local authorities here in arlington have completed their investigation is what happens from here it becomes a six flags investigate. texas is one of the states that has no official oversight. so it's up to the business itself for six flags to investigate. they say they have called in the german company that was involved in building the ride to take a look at what happened and they're conducting their own internal investigations, but witnesses say the woman had concerns about the safety of the ride before it left the station. the park will be open today. the ride for now will remain closed. it needs what's called a new safety inspection before it can open again, and that has not yet happened. carl? -- or kelly, back to you. >> janet, thank you very much. for more we go back to jackie deangelis at hq. >> good morning, a tragic incident indeed. it raises questions about
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amusement park safety. as janet set, the investigation will be conducted by six flags. that's because texas is one of those states that has no federal oversight into amusement park accidents, and the arlington police have ruled out the idea of foul play and criminality. six flags reported earnings thor and missed wall street expectations on retch. the impact having no impact on last quarter. the ceo opened the calling addressing the incident. >> we start this call today with heavy hearts. one of our guests died friday in an accident. we're actually hosting the call today from the park. we've been here throughout the weekend to support our team as we work through this tragic event. >> six flags say they have not seen a significant impact in
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attendance, but they do warn sometimes there can be a lag effect. also other theme park operators going forward, so could they see a negative impact from worried consumers. before the summer season kicked off at six flags, they said that part of the growth strategy was to impact -- so if attendance does dip, it may not necessarily show up in the numbers, because many people opt to prepay, keep in mind, though, that according to the international association of amusement parks and attractions, the likelihood of being seriously injured, seriously injured on a ride is 1 in 24 million, but this park's had an accident that killed one person in 1999, and just this weekend at cedar point, seven people were injured when a boat flipped. so a lot of issues to look
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intoivities interesting odds. good point about season passes. that's one to watch, too. jackie, thank you. let's go over to josh limitlimi lipton. >> we're watching gold, the metal coming off the best two weeks it's had, crossing above 1300 for the first time since june 24th. check out some of these miners, nu . up next some investing advice. jim mccann who helps manage nearly $300 billion. i feel like austin powers there. we'll join us later. and millions of sunken treasure. we have a pies of it right here. that's a live shot at post 9, find out what is inside that suitcase when we come back.
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about an hour into trading, existing home sales coming in below consensus. that's according to the national association of realtors. kimberly-clark, and huggies beat the street. revenues slightly below -- despite some weaker than expected, the toy maker reaching
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a deal with disney. the s&p 500 hit a fresh all-time high early today. in fact sitting back up at those levels. the and sorb so what could possibly derail this rally earnings? jim mcc. ughan joins you on set this morning. >> good morning. >> we had another high-profile miss this morning with mcdonald's. what's your view of how the market is valued here? >> i think the way the market has gone is really predicated on how generally well american business is doing. american business is doing better than any other parts of the world, blazed on pawlentiful energy, productivity. those things are working quite
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well, together with some recovery housing in the market. i think the thing we need to watch is earnings, and i think earning so far are just good enough to maintain the -- but i would expect the u.s. equity market to end the year slightly higher than they are now. >> two things that might have people worried, one is the fact that the ten-year yield is back below 2.5%. crude and the s&p 500 also tend to move together. so if we're looking at declines, would we not expect the same for the market? >> no, i think there's specific factors going on. there has been a lot of financial interin commodities generally, including crude out. that's simply a sign of that, that a lot of the buys pressure and more speculative pressure has been in the forward contract, so i don't actually
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feel too worried about the crude market. the fact that bond yields have come down a little bit i think is a fuel slightly negative data points. i think really the test is how well the companies do. >> correct me if i'm wrong action you sound a shade more bearish. >> a shade, but not much. remember, the market is higher than the last time i was on. i was probably on three or four weeks ago talking about 10% this year. we've had that five. so really what i'm saying with decent momentum coming from company results, i don't think the fact that the market is at an all-time high should hold it back. >> you seemed hard-pressed to describe it in positive terms. i can see why, because it hasn't been -- >> no, it hasn't, david. i think one of the reasons why
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many of us were actually slightly apprehensive, because there's little doubt the second quarter saul a temporary slowdown, sequestration, a bit of fiscal tightness, not a bad thing in terms of keeping the economy growing longer term, but it always looked as if the second quarter might be a slightly soft one. >> i can remember in years past we would have spent the entire time on europe, but i'm -- yes, those are all points there, and in europe, the keep point is there is just too much debt, and the banks have not fixed themselves, so europe could easily send a curveball up the mark sometime, but i don't think that should be -- that should be no more than a boying opportunity for u.s. equities.
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china slowing down, it's not going to be a hard landing, i don't believe, but it will grow more slowly. emerging market equities could stay fairly rough, but it's a longer term buying opportunity given the long-term story about the growing middle class. >> i wonder if this doesn't come back to u.s. equities. forget some of the fundamentals that people here are focused on. how many are fund flowing expecting -- >> the flowing are okay. i don't think people will sudden -- but i do think a shift in emphasis is enough for us touz equities go up, even as pressure -- a lot depends on the economy, though. soft numbers in the economy would be good for the bond market, but i don't think it's going to happen in 1/2 the same ways. >> in the short term, i just had a trader tell us in the past few
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minutes that the housing miss, both today's and last week's have is the discussion all proo premature? >> i don't think so. that, you know, if the softness in the housing market is sustained, tapering happens in the first quarter. big deal. it's probably just three months difference. >> and that's an important reason. >> exactly. finches jim mccaughan, thank you. straight ahead detroit's bankruptcy is now official. president of the regional chaimer better will join us live. we'll be right back. including the es and rx. ♪ this is the pursuit of perfection.
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detroit is now the largest city in the u.s. to have filed for bankruptcy since 2010. what will it take for detroit to turn it is financial rolls around? the president and ceo of the detroit regional chamber of commerce joins us this morning to talk about it. good morning to you. >> good morning, carl. >> a lot of discussion about what will play out. there's a sense this could take a year, two, maybe three. how do you draw -- how do you keep the businesses there to stay there? >> the great thing is the businesses that are here are committed to staying here. you're looking at a general motors statement, what quicken has said. they're ready to continue to invest. detroit has not gotten its fair share of outside capital. the reason detroit hasn't received that is because of the hygiene factor, if you will, the stability of the city
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government. bankruptcy gives us a tool to help us address that. >> a lot of discussion about the dry to which the feds need to help out. they used to administer the sva. what kind of pressure will be put on to administer aid? ivities i think the president and vice president biden have made it clear that the president is not ready, willing and able to write a big check to detroit. i simply understand that. i kind of understand where they're coming from. we have to kind of fix our own issues first before i think we're in a position to be able to go to the federal government with a plan. there are certainly some things that the federal government has done, like with blight removal, that's been very helpful. >> give me the argument to why i would want to invest in detroit. maybe i'm even a buyer at this point, what are the arguments in favor here? >> sure. well, right now detroit is a
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great place for smart money. not necessarily safe money, but smart money. over the last four, five years, there's been $12 billion of pride sector investment in the city, 12,000 new jobs in downtown alone just in the last three years, so there's a lot of money coming into detroit as it is now. we're the fastest growing -- second fasters growing i.t. hub in the country, so there's a lot of tremendous positive things lever happening. imagine the potential this place has once we remove the stigma of a city government that frankly just isn't working. >> sandy, you mentioned some of the revitalization downtown, but it seems what's needed is a more concerted effort to recognize the sprawl away from the center city, that's a place where the chamber of commerce could really play a role here. is this bankruptcy filing going to spur this top-down change to
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help the city move into that next phase? >> that's an excellent point. getting businesses into the center city or the university district, what we call midtown, is already happening. in fact, you cannot find loft space or condo space or an apartment in the downtown or university district in detroit. it's completely sold out. a lot of the national journalists that have come into town just to cover the bankruptcy are really surprised as they walk around downtown that this is a city that's insolvent, because there's a lot going on. detroit was built for a city of frankly more than 2 million people. we have probably less than 700,000 now. the city simply can't afford to keep the street lights on, pave the streets and provide policing service for they see far-flung neighborhoods. we have to consolidate. >> sandy, how is the chamber financed? what kind of firepower do you have to market detroit
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nationwide, let's say, over the next 12 months? >> we are almost completely financed by the private sector and contributions. we're one of the largest chambers of commerce in the country. that alone tells you that business activity in the region is very, very strong. so we have an entire economic development team that does nothing other than go out to the international business market, site selectors, businesses that are expanding. we tell the region's story. for us it's more about than just about the city. we have an incredible region with some of the highest engineers in the country, some of the leading i.t. and health care firms, not to edges some the auto industry that, as you know, is booming. >> we'll hear more about that, and we're no stranger to michigan ads on our air. sandy, thanks so much for your time. >> thanks so much. good to see you. well, detroit's trouble
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notwithstanding, equities continue to test new highs. i think we have a fresh new high for s&p. josh has a market flash. >> hey, kelly, we want to touch against on mcdonald's, the call beginning soon. it misses on the bottom and the top. also saying that full-year results will be, quote, a challenge. i spoke with morningstar's rj hart., he was saying the those was that we would see traction on some product innovation, now he's saying the results race question. back to you. it's that -- have you had one of the these pretzel bacon cheeseburgers? that sounds -- >> i don't know i haven't had it, kelly. it sounds delicious. i can't imagine that's the reason for any problems. >> i think it will stick around. i'm already getting hungry. carl, david abe faber, they're
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not the only treasures here with me. we showed you that suitcase earlier, filled with a mysterious treasure. here is what's inside. take a look at that. how many silver bars were deep under water? and how much are they worth? that's coming up next. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
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$36 million under the sea, one company finding that much worth of silver in a shipwreck off the coast of ireland. kerry sanders joins us from a secret location in the uk with more. hi, kerry. >> reporter: hey there, i can't tell you where i am, but i'm inside the vault. this is what $36 million worth of silver looks like. it's part of 110 tons, which collected all together is worth $77 million. this is quite a find. it was found by odyssey marine exploration out of tampa. about ten years ago their
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archaeologists said let's see if we can find "the garisopa" it was a ship coming from india making its way to great britain with the ville ver on board. this was to fund the war effort. a u-boat saw it bottom but three plus miles. they located it and sent out an rov. here is one of the pieces of silver all shined up. you can see it is tarnished because it has been down there for 72 years. just over the weekend they brought up the final 62 tons of silver and the plan is that some of this, all of it will get melted down and odyssey worked out a deal with the british government. they're almost like the contractors. they will be paid for pulling up all of the silver and then they get an 80/20 split. 80% to odyssey and 20% to the
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british government. not a bad deal for really finding a needle in a hiaystack one of the hardest things, when they got to the wreck, this silver was inside one of the holds which was the mail room, and they had to bring the rov down and poke around and find the silver and then with a claw pick one up, pick up a couple at a time and then bring it all to the surface. a success in a treasure hunting which if you know not always successful, kelly. >> i think a new hunt is under way to figure out where you are. thanks very much for that. mark gordan, the president and chief operating officer joins us now. welcome. >> great being here with you guys. >> let me get this straight. you have made a business out of finding sunken treasure. >> correct. public will i traded company on the nasdaq, this is what we do. this and deep sea minerals >> how much of this particular exploration accounts for your
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business and how expensive is it, how risky is it, and how are you able to turn into a steady business? >> it is a high risk venture. we invest millions on the front end before we know if we'll have success. this silver will be monetized and generate about $30 million in cash and we'll use that to invest in the next project after we split with our partners the british government. >> and now it is still a case where there are always legends, and always stories, but to be able to turn -- this is like the biggest i think discovery in terms of dollar amount one of these explorations has turned up. >> this is the heaviest amount of cargo, precious cargo ever recovered, almost 15,000 feet under water, three miles under water. these are out there and this is our fourth or fifth success and this is what we do. >> is this all collected with an rov? is it too deep to dive yourself? >> exactly right. i worked my way through college as a diver and now we're working
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so deep we can't put people down so we use remotely operated vehicles >> what is insurance like? >> insurance for our operations? it is quite expensive, yeah. we're probably one of the few publicly traded companies that has risk of piracy on the high satisfies as disclosure. >> you mentioned a public company. what is the construct by which i want to buy your shares. will i get a return of capital at some point if you continue to be successful or do i judge you by your earnings which i would assume can be lumpy. >> they're episodic but i think look at the sum of the parts and we have a portfolio of the projects that will continue to yield returns and we imagine at some point there might be just a straight return of capital and right now the people are getting capital appreciation on the share price. >> you mention the silver will be monetized. do you wait for silver prices to climb back up? you must watch that price like a hawk. >> we do. we put a hedge in to be safe, but gratified to see silver up about 4% this morning. it is going in the right
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direction. >> this is a different warehouses. how much you pay attention to what's going on there. a lot of regulatory focus. >> no he question. especially since we're in partnership with the government and a whole other layer of audit involved there. we have great controls and everything will go just fine. >> and 80/20 split. when it happens your archeologists, do they think they find something and they report it to the british government or whoever the authority is that governs the waters? what happens if you find something off the coast of china. >> it is who owns the cargo. the british government paid the war risk insurance so they're the rightful owner of the cargo. ahead of the expedition we made a deal and now it is 80/20 split. >> how much is still out there? vintage, world war ii sunken treasure. >> lots. the united nations estimates 3 million shipwrecks in the ocean which sounds staggering but we have found wreck that is predates christ. they have been sinking for thousands of years and until the
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mid-20th century it was the only way to transport wealth. it is billions of dollars. >> you dive yourself. >> i do. >> do you ever go on one active. >> i was out when we found this ship last year, and i did the original reconnaissance dives and i don't get wet anymore. >> you got to take us down. >> different suit. >> different suit. exactly. fascinating. definitely different from sitting behind a desk most of the day. mark gordan of odyssey. thank you so much. >> my pleasure. thanks for having me. >> keep the tweets coming. mcdonald's did miss expectations for the quarter. they said the informal eating out market remains challenged. if they want to improve the value meal it needs to, what, tweet us at squawk street and we'll get your responses next. ur be a name and not a number? scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade.
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mac and darrell writes wrap it in a share certificate. >> i consider myself a bit of a chicken product it is connoisseur. i was tweeting about this over the weekend. you can would i a single chicken nugget at chick-fil-a for 40 cents. chicken select at mcdonald's, delicious. never a fan of the mcnuggets. i see goldman sachs the high of the day and dow positive and s&p up a couple points. after some micromisses like mcdonald's and the macro stuff and weak housing numbers >> fresh record highs. i don't know what more you can say and at the same time when we raised the issue earlier, the yield is falling on the ten-year and earnings, they're good but not great. i think is the general consensus. look, companies are buying back shares by the fist full. we saw it again this morning. kimberly-clark, halle burton, when you have it happen, you call it the great shrinking market, no wonder there is a
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revenue recession. doesn't seem to matter. >> cramer said a few months ago a supply squeeze of just stock after all these companies bought back over the past couple years. >> it continues and it is not the greatest or highest quality way to make the number. >> no. >> would like to see top line growth and we don't have it. >> later on. >> yep. >> if you're just joining us, here is what you missed. >> welcome to "squawk on the street." here is what's happened so far. >> i am interested in getting the largest individual mandate you can possibly have. if i had my choice i would put everybody through the exchanges, not mandatorily, but i think it is a good idea to divide employment from insurance. >> the stock is sharply lower on missing estimates by 2 cents, $1.38. >> a lot of innovation. it doesn't yet seem to be kicking in and yet that's what is so necessary worldwide for them to do. >> there are a lot of sectors i look at that are doing very well, and yet i come back can
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and say ups, you have explaining to do, guys. let's hear it on the call where that industrial weakness is. if it is asia, i get that. >> or the u.s. >> i know. >> we're still waiting. >> looks like we're getting some what of an exert by third point. the company announcing a repurchase of 40 million shares. >> existing home sales down 1.2%. >> until we get same-store sales accelerating from some type of catalyst whether it not global macro environment, accelerating, or competition starting to loosen up a little bit, i just don't think it is time to own mcdonald's here. >> earnings so far just good enough to maintain the upward momentum of the market. i would expect the market, the u.s. equity market, to end the year slightly higher than they are now. >> good morning.
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live at post nine of the new york stock exchange. get a check on the markets as the s&p hits another all-time high at 1695 now, five points away from 1700, a price target that seems aggressive not too long ago. dow up nine, a nice midday reversal. a lot of red on the screen for the home builders. they're coming after existing home sales and fell more than 1% in june and below expectations and housing data is pretty solid in recent weeks and today's number may be an outlier. we'll find out more when new home sales come out on wednesday. meantime, microsoft rallying today after its biggest one day drop in four years back on friday. value add capital held talks with directors about its demand for a seat on the board. >> it takes us to the road map. as apple reports tomorrow can the company help save the tech sector in yahoo! is reaching a deal with third points down low for a massive stock buyback. david faber is here to break
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down what it means for yahoo!. the city of detroit going through the largest municipal bankruptcy in u.s. history. what are things really like on the ground in the motor city? we'll go there live to investigate. a move by goldman sachs could be making every aluminum can you buy a lot more expensive. we'll tell you what's going on and what the government wants to do about it. >> mcdonald's earnings call is starting right about now. the stock is slipping after the company's second quarter earnings did miss expectations. the company blaming slow global growth and says it expects results for the rest of the year to remain challenged. we are following mcdonald's earnings call and we'll bring you the headlines later on this hour. >> first up, bigger is better. another report today that apple is looking into larger mobile screens following in the foot steps of its competitors like samsung. they're gearing up for the earnings after the bell. will it be more positive than the other reports we have seen so far? brian white, a senior analyst at
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topeka capital markets. peter, begin with you. talk about a couple calls out today that the guidance for revenue at least might be a little more narrow versus expectations. i wonder are we done with the big blowout surprises? >> yeah. apple has a problem. its problem is that it has been an incredibly successful company. we're talking about a company that could report tomorrow that they recorded $33 billion in revenue, sold 26 billion new iphones and 19 billion ipads and that would constitute bad news. so this is a company that has a tough time generating growth. until they come up with a new product. we don't know about any new products immediately on the horizon. we know the world is pretty saturated with iphones. >> although brian likes to predict when the new products may be announced. what is your most recent guess. >> earlier this year we talked about a bigger iphone coming out at some point. and probably comes out next
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year. we're going to see this year is a lower priced iphone very soon in september quarter and also obviously a 5s refresh with fingerprint i.d. on the horizon an iwatch and an i tv, the timing has always been uncertain and eventually it will come out and china mobile relationship probably next year. the way i look at it, fiscal '13 was a year to for get, a horrible year, the first year eps declined since fiscal '03 but it is a year of innovation and a lot of new products coming out. >> with regard to the screen size, skriezed there is so much focus on this route. look what samsung and the competitors have done. they have 5 and 6-inch screens. apple has to go big or go home. this almost seems like an old story. >> then again it is the apple story. apple did not invent e-mail on the go but made it inkr he had before i popular and a lot of people when they got their iphone thought they were the first people on earth to have
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google in their pocket and e-mail on the go and apple is incredibly good at taking ideas that have already been mastered elsewhere and not mastered to the point they become consumer if he nom none and putting them in sexy packages that people have to have. they can very well do that again. >> brian, isn't this just an acknowledgment to some extent they should have made them bigger last time. >> it was unclear. last time we saw a lot in china and asia, the very beginning of these bigger phones, 5-inch or above, and probably wasn't clear is this a fad or a trend? i think they realize it is a trend and when they do go bigger they will do it right. they won't scramble and throw out a bigger screen. i think that's what they're waiting on. i think you will see it probably next year. >> you think so? you think the story of the fall will be the lower priced iphone? >> yes. >> you don't think it will be a reamped iphone. >> we'll see the lower price and the 5s, two new phones coming out. there is no doubt there is a lower priced iphone coming out.
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>> and you don't think people expecting something revolutionary in the back half of '13 they're going to be disappointed? >> i don't think so. this is the beginning -- weep in mind before wwdc in june we did not have an apple event for eight months. biggest dry spell in a long time. now we'll have refresh of iphone with the mini and the 5 s and new ipads that were supposed to come out that haven't probably in october and at some point iwatch and apple tv and there is a progress of events in announcements and that's the story. beating up apple over a quarter at six times earnings which ridiculous at this point. >> all right. guys, thanks so much for that. >> thank you. >> we'll see what happens had they post earnings tomorrow. >> yahoo! shares are down more than 4% today after the company announced activist hedge fund third point is pairing its stake and stepping down from the board. we bring back david faber with more. >> interesting development today. essentially an exit in many ways
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for don loebs third point hedge fund that took position back in august of 2011 in this stock and of course has had great success more or less ever since and average price of about $13.50 and originally as large as 73 million shares. there have been sales along the way. today is by far the largest single sale, and also includes the resignation of three board members that mr. loeb got on the board including himself, on the board of directors of yahoo! after a bruising proxy fight to do so. you can see of course harry wilson, michael wolf and mr. loeb himself will be stepping down. the company or the hedge fund will continue to own roughly 20 million shares. that's less than 2% of the outstandings. at one point it had been as large as 5%. when this battle began as you can see, the history there, how much money they made overall at least a billion dollars when you consider 73 million shares and the stake that has been sold already, the new sale back to
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the company which will use cash to effect this buyback and the value of the 20 million shares that they already have. of course yahoo! itself has changed a great deal from august of 2011, and in fact, mr. loeb laid out his thoughts about how it could change and why it needed to at an investor conference held by cnbc and delivering alpha conference in september of 2011. >> generally you want to buy a great company with great management and in this case there was a company with some great assets, great potential businesses, and really one of the most horrendous management teams and one of the worst corporate goff unanimous i have seen and able to take a meaningful position in yahoo! and own about 5% of the company. >> of course that is no longer the case. this is a great success, though, for mr. loeb and his ever expanding fund which has at least $11 billion, perhaps more under management. and while it began as a bruising
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battle in which he was able to dislodge the ceo of the company after charging him with having a false fined certain claims on his resume and then made certain mistakes along the way in terms of trying to defend himself from the charges that ended with his resignation, loebstructive and engaged in the appointment of the current ceo marissa mayer to her position. to be fair, much of the rise in the stock price has been a result of the incredible move up in the value overall of ali baba. they did receive cash back or capital return to it from its stake which it took down but still while it is a sizable stake in that company, which will be going public most likely in the fourth quarter of this year. we'll see. the turn around is under way. certainly a great investment for mr. loeb who is now fighting and in a different way, almost fighting is perhaps not the word.
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is trying to urge sony to do some things with the entertainment division which at this point it does not seem to want to do. >> we're talking about big changes for that company. >> yeah. >> thank you, sir. >> in the s.e.c. accusing the hedge fund manager and what do the charges mean? a judge brings us the answer next. n ever, creating new opportunities for those who stand ready to seize them. in a time when the biggest risk is playing it safe, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, our flexible, collaborative approach helps forward-looking companies not only run better, but run different... to give your customers every reason to keep looking for you. so if you're ready to see opportunities
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regularities voted unanimously to pursue charges for failure to supervise. the charges fall short of what some say the s.e.c. hoped for, in reality what lies ahead for coen? we'll bring in a partner with holwell schuster and golds berg and he presided over the trading trial. >> it is great to have you here. we love your perspective on this case. the s.e.c. is now going after steven coen himself. what do you make of their charges against him and the ability you think for them to win? >> well, no one ever likes to get sued by the s.e.c. it is not a great development for mr. coen or his company. the other hand it is a weak lead by the s.e.c. it is an administrative case that will be heard by admin stray at this law judge. it is not a lawsuit in the classic sense of the word. most critically it doesn't accuse mr. coen of directly participating in insider trading. what does that tell you? it else you the s.e.c. at this point doesn't have the goods against mr. coen.
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>> what has your experience been with insider trading cases? how difficult is it for the government or for regulators to amass evidence to when they suspect there is wrongdoing actually prove it? >> it is a case by case basis. it is actually the s.e.c. developed the leads and fed them to the u.s. attorney's office and the u.s. attorney's office used wiretaps and plea negotiations to build its case and that could happen here. as we know the u.s. attorney's office is continuing to investigate mr. coen and i don't think anybody suspects they will walk away from that investigation. >> what do you think the conversation sounds like right now at justice? particularly given the way we're all talking about what happened from the s.e.c. last week? >> i think the justice department is going to look at the facts here. they're not going to take on a prosecution unless they think they have the goods. maybe they do.
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we know the s.e.c. didn't when it sued on friday. don't forget the department of justice has a much higher standard. we have to prove guilt beyond a reasonable doubt, far different than the burden here. >> this won't be as transparent. hard are for the public to l to. do you think that matters? >> well, of course the predominant issue from the point of view of the criminal case is the constitutional requirement that the grand jury proceedings be secret. so the s.e.c. is permitted to funnel information to the u.s. attorney's office but it is not a two-way street. we really don't know what evidence the federal government, the prosecutors are mounting and that they have. we won't know that for a while. we know there is a grand jury investigation going on and people are being subpoenaed and it is behind the secrecy of the grand jury. >> your first reaction when you heard the news that's pretty
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weak? >> my first reaction was the s.e.c. thought they had to do something by the end of july and it was fish or cut bait and this was better than nothing. >> what do you think is the worst case scenario for mr. coen under these specific charges? >> under these specific charges maybe the worst outcome is either that he is barred or his fund is barred from representing outside investors. of course he didn't find that much of a problem when he went with his fund, so i don't know if that's a big threat. it is possible he could be banned for his life from the securities industry. they will have to prove their case to get that far. >> this is all i know speculation. do you think the biggest, the most fuel they can get is by getting him to say more or some sort of electronics surveillance or what would your prediction be. >> too late for electronic surveillance. some of these transactions are back in 2008. what you really are looking at here in terms of a classical investigation is flipping a
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witness. >> something they have not been able to do, at least not yet. >> not yet. >> thank you very much. appreciate your time this morning. >> detroit it looking to move forward after filing for bankruptcy last week. we'll show you what it is really like on the ground there. we'll talk to one of the city's top realtors in just a moment. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. trust your instincts to make the call. to treat my low testosterone, my doctor and i went with axiron, the only underarm low t treatment. axiron can restore t levels to normal in about 2 weeks in most men.
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the city of detroit filed for bankruptcy last week making it the largest municipal bankruptcy in u.s. history. beneath the headlines, what is it like on the ground? our own scott coen is live in detroit with a look at that now. scott, good morning. >> good morning, kelry. get to the conditions on the ground in a moment. first of all, the early legal now in a court battle likely to play out for years. we're still awaiting some action from the state court of appeals as the state attorney general appeals a state ruling that the bankruptcy filing is unconstitutional under the
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michigan constitution. meantime, here in detroit, the city's pension funds have gone to the federal court asking the federal bankruptcy judge in the case to slow things down saying that an expedited hearing being requested by the city emergency manager would violate the pension's due process rights under this whole situation. now, as far as the conditions here in downtown detroit in a lot of ways it is sort of business as usual here having covered this region for many, many years, i can tell you that downtown detroit, yes, has seen better days and it has also seen a lot worse days. there are a lot of signs of life in the strl business district. it is a much different story in the neighborhoods steadily deteriorating for years. you know the statistics, about 40% of the street lights not working and hour waits for police and fire response and it is the downtown district and the signs of life here that boosters hope will be the key to detroit's rebirth.
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>> we're the fastest growing it hub, i am sorry, the second fastest growing i.t. in hub in the country. there are positive things happening and imagine the potential this place has once we remove the stigma of a city government that frankly just isn't working. >> getting from here to there is a long involved process. we're familiar with giant corporate bankruptcies but this is a municipal bankruptcy and experts say it is a whole lot different than a corporate bankruptcy which occurs under chapter 11. >> that's what makes chapter 9 really so difficult is because you're not talking about -- chapter 11, it is a corporation. at thequidate and go away. >> we're awaiting the court battles and as i said could go on for years and the emergency manager wants to have a hearing as soon as tomorrow in federal bankruptcy court and the pension funds trying to slow that down. we'll keep you posted.
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karl. >> clearly there is some activity judging from the reverse signal sound from a car near you, scott. thanks. i want to take take closer look at what detroit's bankruptcy filing means for real estate there. daniel sternz joins us this morning. good to see you. thank you for joining us. >> thanks for having me on the program. >> talk briefly about housing prices. i am looking back the past few years. faer to say they really did reach a level they couldn't go any lower, right? >> yeah. there was an article in the free press yesterday about housing prices and i am more of in the commercial business, but there was a stat that said the average home that sold for $7,000 now sells for 11,000. to be honest with you, in neighborhoods and we have a lot of beautiful neighborhoods in detroit, we have seen housing values go dramatically up from where they were about four years ago which in our minds, the bankruptcy for us is old news. we hit our low four years ago
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and we're in a very, very steep incline up now. >> are we talking about detroit proper? are we throwing in areas like royal oak or the more affluent suburbs? >> i am talking detroit proper. to be honest with you, our suburbs now are tremendously vibrant which by the way that helps the city a lot. we need the city of detroit and the city of detroit also needs the suburbs. i am talking inside the city there are five or six wonderful pockets of residential real estate growing, houses aren't staying on the market for more than a week or two and values are rising very, very quickly. >> daniel, we just saw the chamber of commerce telling us it is the downtown extremely vibrant and you are suggesting the opposite. where is it? >> no, no, no. we're talking residential. commercial is red hot in the downtown core. commercial is red hot in midtown. commercial is red hot on the river front, and it is red hot also in the northern suburbs. >> okay. >> residential is also red hot.
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any type of rental product downtown is a waiting list. >> what do you mean by red hot? i think a lot of people will look at this and think about the prices and a lot of the public services, daniel, that just seem to have hour-long wait times or no response at all and say really? >> i understand. here is the problem. one thing we can't fix and one thing we can't solve is detroit is 139 square miles. it is massive. it is four or five times the size of san francisco. we can't fix that. i can tell you if you go to whole foods that just opened in midtown, and you are wondering where the local police is going to be, you will be able to see a policeman anywhere around there. if you are downtown in the core district and wondering where the nearest policeman is, again, downtown, you will always see the policemen in that area. >> we pay a lot of attention to the whole foods move you mentioned when they announced that, that was a big deal. are you convinced, daniel, that bankruptcy assuming this filing goes through the way the city wants, will improve services to the point where a would-be buyer can be moved off the fence?
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>> yeah. i think first of all the would-be buyer to speak from people here, we're already over the fence. we're already buying it. about two years ago institutions started to buy in detroit and we think it will continue. i have seen some of the plan they talked about with bringing in capital to revitalize some of the street lights to get more police out there and there is money set aside for demolition which i think as my partner says is critically important of some of the existing buildings and especially in the thorough fair, so i think the bankruptcy will help the out of state and national institutional investors but to be honest with you, all of us locals, we're buying now and we have been buying. this is old news. >> you are on the ground. you obviously know something a lot of other people still don't know. we'll come back to you many times i am sure. thanks for your time. >> thank you very much. appreciate it. >> goldman sachs is reportedly inflating the price of aluminum
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cans and costing consumers about $5 billion a year. we'll tell you why it is legal and what regulators want to do about it and the bells are about to sunday across europe. a better trading session this morning. we'll bring you details on the close back here when we return. peace of mind is important when you're running a successful business.
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take a look at the trade in europe, a mixed session to begin the week. as you can see there, a mix
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between red and green throughout the core and periphery. we're taking a look across the major forces and we'll start with the ftse in london, marginally lower and germany down as well and better performance from the peripheries, france, not to necessarily lump it in with the periphery but up and stock markets rallying in portugal and he says he is backing the current coalition government and averting the effort to keep the international bailout on track. the bond yields fell on that news. going back to the broader market, banks are much the winners including the ubs whose profits topped the forecast despite a $920 million charge that relates to settling a u.s. mortgage lawsuit along with other matters and that helped the european banks generally rally there. 2.9% for ubs, almost 2% for
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deutsche. >> oil is down although it was higher earlier in the session. get a check on energy and commodities with sharon at the nymex. >> it is significantly higher is gold. look at gold prices up almost $35 or so. breaking above the 1300 level earlier in the session that was a key technical level and we're looking at gold now at a one-month high. we're looking at gold prices that actually have broken through another key technical level, 1325 announced and very close to the 50-day moving average and now we're seeing a little bit of giveback and not very much. traders say the next key level to watch will be 1338 announced, that was the low back in may. several factors contributing onto the rise we're seeing in gold prices and the weakness in the dollar a factor and institutional buying and physical demand from asia as well as a lackluster volume for a summer day. we're also watching what's happening in silver and copper markets because we're seeing gains there as well with silver actually leading the charge here
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in the metals complex and you mentioned what's happened to oil prices. have you noticed how wti and crude prices, the two key benchmarks are trieding in parody? this hasn't happened in about three years time. watching changes definitely in the dynamics in the oil market and right now a little giveback although many traders say there is such bullish sentiment in the oil market, look for $110 a barrel to come soon enough. >> ouch. we'll keel an eye out for that. in case you missed it, an investigation revealing goldman sachs is inflating the price of aluminum cans costing consumers up to $5 billion a year and apparently this is a common occurrence. it all has to do with bank ownership of warehouses for commodities like aluminum and copper. mary thompson has more on the story at hq. >> the report in the "new york times" concerns by members in the beer industry intentional
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bottlenecks and they claim the metro warehouse creates bottlenecks by using the minimum required amount of aluminum out of its storage facility on a daily basis. aluminum users say this lengthens delivery times contributing to higher prices, higher premiums and broader markets and bigger rental costs for firms storing the metal there. the beer industry pointing out the increase in prices has been happening since banks got into the business back in 2009. this despite falling demand for the metal. as for the banks they profit from the extended rents on the future of those metals by their trading arms. goldman disputing the report and maintaining warehouses can't destroy prices given only 5% of aluminum used in production of consumer goods is warehoused. while a person familiar with the rival warehouse owned by jpmorgan says similar bottlenecks don't exist at the facilities. still the allegations catching regulators and lawmakers attention. the senate banking committee holds a hearing tomorrow on whether banks should control warehouses, power plants and
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refineries. while the federal reserve issued a statement saying it is reviewing if activities are complimentary and permissible for bank holding companies. a review somewhat familiar is not new but on going. still the first public acknowledgment raising concerns regulators may try to close off access to lucrative businesses for banks. add to that a source confirms the commodities future trading commission is opening a probe into metals warehouses because of allegations of falsely inflated prices. in an e-mail to cnbc the commissioner wrote there are clearly theoretical conflicts involved in warehousing and many end-users suggest they have resulted in market moves and it can impact consumers. if that's going on we need to put an end to it and fast. goldman, jpmorgan, morgan stanley declining comment on whether they received the letter and the drama will continue in washington, d.c. tomorrow when they hold that hearing. back to you. >> the whole country talking today. that's for sure.
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thank you so much. bob is back here at the stock exchange watching the dow up almost 30. >> for all of the concerns about earnings growth, global economic slowdown or going in reverse, money continues to come in. if it wasn't for mcdonald's we would be up 50 points or 60 points. bottom line is money is continuing to come into u.s. markets and in fact have you noticed there is an acceleration of money coming into stock mutual funds and stock ets. we have the highest levels of inflows in the last week or two since the beginning of january. it is going the other way rather than coming out. they're going in, into the united states. other sectors that are moving, as i mentioned the restaurants are down. if it wasn't for mcdonald's we would be a lot higher. we talked a lot about wendy's. the restaurants are down except for wendy's. we mentioned the success of that bacon cheeseburger they got, the pretzel bacon cheese urger has them talking about taking market
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share. q3 same-store sales for wendy's will be notably positive. mcdonald's will only be flat. it is a market share gain on behalf of the restaurants. take a look at the other companies moving here. as you see the dollar is weak recently and ak steel and these are some of the best moves in materials off the bottoms in the last two weeks and suddenly the commodity stocks which have been dead in the second quarter are starting to show life in the beginning of the third quarter. elsewhere, take a look at the home builders. a little sdisappoint on existin home sales. this is a notable under performer for the entire second quarter and home builders as a group were down in the second quarter and aren't doing much better in the beginning of the third quarter. what is doing better is of course some of put these up, bond funds. everybody who panicked and screamed two or three weeks ago when i was in europe, is this the time to get rid of the bond funds, best thing you could have done for a lot was nothing because in the last several weeks these have stabilized and almost every single day moved to
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the upside. let me show you. this is one of the biggest bond exchange traded funds out there. there is a three-month chart. you see the bottoming the last several weeks essentially to the upside. i am not saying there will be a huge rally. i am saying selling at the bottom which would have happened two weeks ago not a good idea. i am glad a lot of people apparently did not. back to you. >> thanks so much for that. mcdonald's holding its earnings conference call now. you have to get the headlines out of this. don thompson talking about the company's disappointing second quarter. we'll talk about that and bring you the headlines after the break. [ male announcer ] come to the golden opportunity sales event to experience the precision handling of the lexus performance vehicles, including the gs and all-new is. ♪ this is the pursuit of perfection.
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♪ this is the pursuit of perfection. coming up next on the half trading the busiest week in earnings. what do the results say about where you should be putting your money? dan loeb is selling. should you be as well? the debate yahoo!'s next move and gold is logging its best day in three months. is the rebound for real? kelly will attempt to answer that at the top of the hour. >> we look forward to it. thank you very much. mcdonald's earnings call is going on now reporting second quarter earnings missing analyst expectations and taking a hit today down about 2.5%. josh lipton is following the call and joins us with the latest. josh, how is it going? >> mcdonald's certainly under
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pressure today, reported and disappointing stock down 2.5% and on the call headlines i point out. one, the company's cfo talking about margining and saying they were most apparent in the u.s. and telling analysts they will consider future price increases in the u.s. amidst the reality of higher input costs. the company also talking about cash. the first priority with cash they say is to reinvest in the company and to return value to the shareholders and they did trim their capex forecast by about 100 million. as for the rest of the year talking about the remainder of 2013, mcdonald's saying it will be challenged because of top and bottom line pressure and saying economic weakness is adding to pressure from higher costs. in the near term saying they will face pressures along with the rest of the industry. back to you. >> interesting. thank you very much, josh. speaking of mcdonald's, want some of your answers. we asked if mcdonald's really wants to improve its value meal it needs to what? arnold writes get ronald to
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marry wendy and form a merger. ryan writes offer delivery which you can get in some areas of the country and megan writes lose from chipotle and if they really want to improve they need to sell the mcrib on a cronut bun which i know you would eat. >> i would at least try. >> that's right. now to breaking news. straight to scott cohn joining us from detroit. scott. >> kelly, we have breaking news. the federal judge in the bankruptcy case has just asserted himself in a big way. he has granted the emergency manager's motion for an expedited hearing. basically at least for now doing away with the state judge who said that the detroit bankruptcy filing was unconstitutional under michigan law, so this bankruptcy case will go ahead with the hearing wednesday morning in federal bankruptcy court, just a couple of blocks from here to get this long process going. this is an important move and goes directly in the face of the
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city's police and fire and employee unions and pensioners who wanted to slow this down and try to preserve their pensions. an important move, the case now going forward in federal court. more as we get it. back to you. >> scott cohn live on the ground there with the latest. scott, thank you. netflix reporting earnings after the bell today and julia boorstin will be participating and give us a preview when we come back. that's me... i made you something. ♪ i made you something, too. ♪ see you next summer. ♪ [ male announcer ] get exceptional values on the highest quality cars at the summer of audi sales event. ♪
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welcome to the eshinging squad. we check the stories everyone is talking about. herb is off today. i am joined by josh lipton and jackie deangeles. let's get to the score card. 22% of s&p 500 companies reported so far. 64% beat their eps targets, 12% met estimates and 24% of reports come in below forecast. halliburton trading lower. the company reporting a dron in profits and weakness in north america as well and the stock down and kimberly clark shares lower and the kleenex maker posting better than expected second quarter results and a cautious tone for the full year outlook. 2%. shares of six flags trading lower as well and jackie is
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following that story for us and not just the earnings. a lot of currents here. >> a host of issues. talk about the earnings first. they did miss expectations in terms of their revenue and also their eps. they saw 3% decline in revenue year-over-year. 36% in eps. when i talked to the ceo of the company in may, he had said that he was looking for a bump up actually in the summer season because they were looking to sell more season passes and get more traffic in the parks. he claimed it on weather issues. this is not the first time we heard about the weather. coca-cola blamed their issues on the weather as well. he did address the issues with the theme park as well, the accident that we saw on friday night. that's how he started the call and i do want to talk about that. he said the company has heavy hearts and that they were working through the tragic event and trying to give support to the family as much as possible and he also addressed some of the concerns about attendance going forward because that's what analysts were really keying in on and he said typically you may see a little bit of a short-term or midterm decrease
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at the park itself, but you resident going to see it across the board. that's their take on it. a lot of analysts will be looking to see if that in fact is the case with this company. i will tell you this. looking at the decline right now, i would expect a little bit more given the safety issues that we're looking at and also this big miss. >> right. calendar shift as well and also you have to wonder whether higher gas prices in the future months and in the current month going to impact six flags and also watching shares trading lower and decline in newspaper advertising weighing on results and maybe it is not a problem much longer, josh. >> largest newspaper chain in the country, report results basically in line. if you look through the different sectors and higher broadcast revenue and digital revenue growth of 20% and publishing division wasn't exactly a bright spot. i don't think anybody was expecting that to go gangbusters. if you look at the stock by the way, it is up about 40% this year and all of a sudden changes and investors think moving in and maybe that off sets publishing. >> more than half of ebitda with the acquisition will be in
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broadcasting and so you have to wonder right now it is trading at forward p.e. of 13 and 11 respectively. with this acquisition what are the comparables here? are we looking at more new york sometimes and "washington post" trading at higher valuations or something like disney or the other media conglomerates? >> i think there is a lot of investors wondering could you see companies that spun these off, publishing from broadcasting and the future for this company as well and i know analysts were asking the ceo about that and she says we aalways looking to maximize shareholder value. >> talking about hasbro trading higher despite earnings estimate and we should note that hasbro did lose a lot of ground when mattel and perhaps it wasn't entirely a surprise. we did see a huge gap lower on the day that mattel reported. today it is trading higher. part of that is because of the mattel news before and also because it extended its rights to marvel for another two years with disney. that's a big deal in terms of
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merchandising. taking a look at the strength, it was mostly in girls. surprising for a company that sells more to boys. >> home of g.i. joe. >> i am guessing you got those dolls at home from when you were little. >> and my little pony. >> so girls revenue rose 43%. >> right. >> boys revenue down. >> what is going on with boys? you think. g.i. joe. >> there weren't any movies in the pipeline. that he are levered to the movie releases. that will come. we are seeing that increase in shares 1.6%. that is the earnings squawk. if you want to join the conversation, tweet us, hashtag and i will be back with more during street time. in the meantime coming up next, netflix reporting after the bell today and we'll tell you if they can live up to high expectations. that and more when they come right back. you make a great team.
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it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ] netflix reports after the bell tonight. with the stock the best performing in the s&p this year,
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wall street anxiously awaiting to see if it lives up to expectations. julia will be participating in the earnings call is live in san jose with more on that. good morning. >> good morning. the number that investors are focusing on even more than revenue or earnings when netflix reports is the number of the paying subscribers in the u.s. for its streaming video service. in the last quarterly report netflix reported streaming subscribers would be in the range between 28 and a quarter and 28.85 million this consider and the consensus expect station of analysts is higher, 29.58 million. if the company reports fewer than 29.5 million paying streaming u.s. subscribers, the stock could take a hit, more than 30 million would presumably send the stock higher. with the stock up merely 225% over the past 12 months, the pressure is on for netflix to show growth. analysts expect netflix to grow revenue about 21% to 1.072
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billion while earnings per share are projected to more than triple from 11 cents in the year ago quarter to 40 cents this quarter. on the heels of netflix launching the fourth original series this year orange is the new black, the question is whether the investment in original content is paying off. with house of cards as well as "arrested development" and hemlock drawing 14 emmy nominations we'll listen to see if they reveal the number of people watching and what the return on investment is for netflix. this afternoon netflix is taking an unusual approach to the earnings call hosting a google hangout with btig analyst rich greenfield and a journalist, me, fielding questions e-mailed in. after that i will be sitting down with hastings for an exclusive interview we'll bring first thing tomorrow morning. i will be back with the numbers after the closing bell and you can find much more on mediamoney.cnbc.com previewing the results.
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>> it will be amazing to watch looking at the chart, you look at some of the stair step functions it has had going up over the past few months and david carr's column in the times today, the last line is a classic, sometimes julia, it is hard to believe this was the company that used to send you dvds and those little red envelopes. >> quite a transformation and also remember it was almost exactly two years ago today that it had that quickster debacle and really had to rebuild the image in the public and subscribe minds. >> can't wait to watch. julia, thanks. dow is up about 12 points. we continue to watch. you mentioned the degree to which mcdonald's is taking a bite out of the dow. were it not for that, would be more positive. >> that's right. within or probably taking out the record highs. we hit fresh record highs on the s&p earlier today and i think we're actually currently right around there at 1695 and if you
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take the mcdonald's which is down 2.6%, if you take that out of the equation, and this is what bob was pointing out as well, probably worth 30, 20 points, so you could be in that territory. >> only eight sessions left in july for the s&p and with those eight remaining, s&p is having its best month since october of 2011. despite all the chop, all the worries about some of the guidance from some of the big companies, it is still putting together a nice month. >> and everything that's happened with the fed and back to and above the may 22nd levels. >> in london outside st. mary's hospital, the lindo wing, the former kate middleton, the duchess of cambridge is reportedly in the early stages of labor. the child of course will be third to the throne right behind prince william and prince charles. the queen of course has reigned for 60 years. i love the odds on the names.
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alexandria, one of the most odds on favorites, charlotte, james, victoria, george, and sophia. >> very english. >> yes. >> interesting as well you mentioned the bookies and note from ihs, you have to love, even the shops aren't hesitating to jump on it. they're out with a note on the economic stimulus impact from the royal birth, thebookies get a boost and a likely a small lift to alcohol sales toasting the baby and because there isn't a public holiday it isn't likely to be that big of impact. >> the margin, though, the u.k., they will take whatever they can get. i am sure the boe is not complaining. >> kpoming off a high and andy murray winning wimbledon and chris froome winning the tour de france. consumer confidence, keep an eye on it. >> if only westin had won the british open, it would have been a good july. >> exactly.
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>> on power lunch the great divide. while the stock market is soaring, many people who support the industries on the rise are actually hurting. it is a look at the two very different american economies and when it will start to impact stocks and send your comments to facebook.com/powerlunch and watch at 1 p.m. >> you can argue it already is this morning. >> let's get to headquarters during the halftime. thanks. welcome to the halftime show. four hours to go until the close. up day thus far. there is the dow good for 12 points and nasdaq s&p higher as well. here is what we're following on the half. golden moment with the precious metal above 1300 is the worst over? boo hoo for yahoo! as dan loeb's sales signals you you this do the same? th the biggest week for earnings

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