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tv   Closing Bell  CNBC  December 27, 2013 3:00pm-5:01pm EST

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and reportedly google as well, so i wonder if they'll go differently about it. >> people have bugs here and there. >> jon and adam, thank you very much for joining us today. >> thanks for watching "street signs." >> have a great weekend, everybody. thank you for joining us, dom. >> always a pleasure. >> nice to have you in the chair. "closing bell" is next. welcome to the "closing bell." i'm kelly evans at the new york stock exchange. i can hard by believe i'm saying this, but stocks are down. >> it's a color with which we are not familiar with right now. some red out there. yes, the dow's six-day win streak is in jeopardy right now. but this last hour of trading has been volatile recently. so, you never know what's going to happen. art cashin was just telling me, it's a very slight bias to the upside, to the buy side right now. but it's pretty negligible
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number because this is the friday between the holidays. so you get that volatility. >> you should be in the heart of the santa claus rally. >> maybe it's going to the north pole? >> maybe it is. while wall street hoverers near record highs, main street is pessimistic. survey finding 68% of americans believe the economy is in poor shape. who's got it right here? wall street? main street? we'll hear from both sides. >> i'm fascinated by that disconnect. the stock market definitely saying one thing and main street surveys telling us a very different story. who's right or could they both be right? >> right. or what does that tell you about the world that we live in right now? >> talk about that coming up. here's how we stand right now though. the dow has been flirting with the unchanged level all afternoon. we're down five points. but it's like the weather in denver. if you don't like it now just wait 30 minutes. it could change. we'll see what happens here as we head toward the close. any positive close will be another new all-time high.
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nasdaq is down 12 points right now. a lot of the big technology names. have you seen twitter today? >> that's right. down 8%. >> is the fire out? >> yeah, it's cracked here. it only took a downgrade -- >> it's down 9%. we're at $66.40. we'll keep an eye on that as we head toward the close. the s&p is down a point and change, trading at 1840. let's go to our "closing bell exchange "see what our friends think of this market. rich, keith fitzgerald from money press kim forest kyle harrington from harrington capital management and our own rick santelli. kyle the note here says you feel, quote this stock bubble is looking for a pin. two points, you think we're in a bubble? number two, what do you think that pin might be? >> well, i'll tell you. i think we are definitely in a bubble. pay attention to main street surveys, in my opinion. i think that the market is fed
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inflated. i've talked to rick santelli historically about this and i continue down this path. i think when institutional investors start to think about profits and started selling, i think we're in for a big selloff in the first quarter. >> at the same time, kyle we've had one of the most remarkable earnings rebounds that we've seen. so that's supported the rally. and i guess to your point f there's a bubble here, it has to mean what? bubble keeps rising even if earnings don't? >> i think corporate america has done a great job at trimming expenses to the point where a lot of human capital and a lot of excess expenses have been cut. as a result, profits have looked fantastic. but there's only so much you can cut before you start to affect the top line. and i think this year in the first quarter that's going to happen. >> i guess we should go to rick santelli. now you found a kindred spirit here in san diego.
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when we got to the 3.1% on the ten-year. >> still haven't closed with a 3% handle. i like what he said, especially about the pin. i just hope they don't find that p.i.n. number from target. i think generally speaking, you could see it in just simple areas. at risk is underpriced. it's the same scenario we saw before the tech wreck or even before 2008 great recession. just look at hytef, unchanged on the year. not true for investment grade. that speaks volumes. i continue to say that six months before the tech wreck, we almost doubled before it ultimately happened. i don't disagree with kyle at all. i will be remiss if i tell anyone to sell stocks because it's more about timing than if. i think it will have a big correction. i think the port hole for all the smart people who think they
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can dance between the rain drops is going to be dicey. but i don't i know that it's in the imminent condition. >> kim, it sounds like a phrase becoming more popular around here. they're call fally invested bears. people fully invested in this market, hating it the whole way. does that sound familiar to you? >> yes, it does. >> oh, absolutely. go on. >> sorry. >> kim forest. >> oh, i'm sorry. you were talking to me, right? >> yep. >> okay. yes, i think it does sound exactly like the fully invested bear. maybe i'm one of them. but i think what i've really trained myself to do is look at individual stocks as opposed to the market overall. i'm always on the lookout for something i consider underpriced. it's tough. you can find them every once in a while. >> you think technology is, right? >> i think technology is for a lot of reasons. there's a lot of stocks that people have stloenthrown on the trash bin right now. some good reasons. some not.
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here's the thing about technology -- productivity never goes out of style. technology is about the only thing that can give us that. that's why i'm always keeping an eye out for tech stocks. >> tell us what stocks you like here. i've got to imagine a name like twitter isn't atop your list or is it? >> no i can't really see that that's all that productive. but we'll see in time. now, i really concentrate on enterprise names. to us intel is still an enterprise name especially as pcs are not going out of fashion in the office. i still use them to create content. i'm sure you guys do. and then there's a little -- a smaller company called ca they used to be computer associates, they sell mostly main frame software, but we think they're an interesting turn-around play at this point. >> keith fitzgerald, we should have had you yesterday when twitter was 8% or 9%. now it's down 8%. sure, it's easy to say you're shorting twitter at these
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levels but are you, right? >> yeah. i think this has been overrun since the beginning. it's a bubble in search of a windshield, i a bug -- i don't know what moniker you want to put on it. it's not making money and social media is totally overblown. >> how much lower could it go? >> i think $40 is about right. that's what the warrant said on the ipo as proximate value a year out. i think that's the first stop. i don't think the stock is worth more than ten bucks in a few years, quite frankly. >> because of how your fund is structured that you're not shorting it? why not jump in at these levels if you think it's that compelling? >> we don't have an awful lot of activity today. i don't like to get in where markets are thin and i don't have a good spread in liquidity. i want to see what's going to happen the first few weeks because i think there's a lot of
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euphoria. as institutional trader i want to see the liquidity. without the fed, we're 20 -- 25% lower. >> 25%? >> yeah. >> in twitter or the indexes generally without the fed? >> indexes in general. the fed will do everything they can. like rearranging the deck chairs on titanic. at some point in time it's going to give. we haven't had a pullback in december. i'm looking for that into january. after that, i think they're going to throw everything to the kitchen sink back into the mix and here we go again. >> well, rich peterson, what are you going to be buying from keith and kyle? they are both looking for that big pullback. >> well, bill, i think investors will be remiss not to be in equities. the fact theshld be aware ofthey should be aware of key metrics. since 1990 70% of the time it's been a positive december. january is also positive. that's point one. point two, best year for s&p, up 29% since 1997. that following year, 1998 the
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s&p is up 26%. so, one good year, often follows another good year. the third thing is earnings. fact is we'll still see positive earnings map for 2014. the fact we're looking for $120 per chair on the s&p 500. the current valuation is at 15.4 times forward multiple. while stocks are not cheap they're still not expensive. >> rich the tech sector is getting a little expensive. we were talking about this yesterday, the trailing pe has jumped there. does that set off any alarm bells? czink for . >> well, for tech -- look at cash on balance sheet. 2002 cash on balance sheet was under $2 billion, now over. ak ty shareholders are filing into those shares. activist shareholders hold more than 2002. that's a positive sign. >> according to rich peterson,
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history is on the bull side right now. a good year usually follows a great year, like we've had here. >> yeah. i think you need to take a look if in that good year the fed is as involved as it has been the past year. i would say no. bonds, i would stay away from bonds. there's no yield. and i think that rates have nowhere to go up on prices will go down. it's only true the only place to really try to get outsized returns is in the united states equity markets. but i would look at valuation very closely. >> you just stated a good case there for equities. >> i think you need to be in the equities market. all i'll suggesting is that this market, in my opinion, is fed-inflated, overvalued be careful, look individual sxurts funds very well positioned in sectors and valuation, pay very close attention. stay close to your trusted financial adviser. >> hey kyle one more point. >> go ahead, rick. >> if you think stocks are going to move a lot lower, then
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treasuries at some point do become a buy. >> yes. >> i mean yeah, at some point they do, rick. i just think that the yield there, you know, is not -- >> but it's the only natural heads to the only crap game in town. we have to keep that in mind. >> yeah. >> it's the biggest crap game in town. >> thanks, guys. appreciate it. have a good weekend and thou year as well. the dow is down six points. we're not panicking yet. >> the s&p 500 is barely lower. we're talking about record levels. we're also talking about the santa claus rally. 2013 has been a huge year also for ipos. which offerings next year could rival twitter, potbelly? >> we have potentially the biggest ipo coming up next year. also, american express shares have made big gains for the dow this year. but can this stock keep charging higher? both sides of that debate. we have a stock brawl on
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american express coming up. amazon, u.p.s. and fedex are in damage control mode after failing to deliver all packages by christmas. target admitting p.i.n. numbers were stolen and what you think they should make it up to customers. best tweets. you are watching cnbc, first in business worldwide. for a university endowment. it funds a marine biologist... who studies the peruvian anchovy. invested in the world. bny mellon.
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welcome back. it's been welcome back. it's been a big year for ipos. that could carry over into 2014 because of a potential flood of chinese companies in particular that could list on u.s. exchanges. a better environment now, seema, appears to be supporting demand for these deals, does it not? >> that's right, kelly. there's a couple different factors that could help boost a number of ipos in 2014. first, american investors have seemed to regain their confidence in chinese ipos after what was a seven-month drought, seemed to be due to questionable accounting firms as chinese firms. second is stellar performance of chinese ipos this year. qunar, sungy and montage and
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500.com is up more than 100%. we could see upwards of a dozen chinese companies list next year if investor sentiment and strong market continue in 2014. they expect chinese pipeline to be primarily in on demand software and i.t. space with focus on companies trying to capitalize on chinese half billion internet users. like baidu sina and youku have been focused on. all names are up this year as they try to penetrate chinese internet base and less weary of investing in chinese internet. but still skeptics say chinese accounting practices is still a concern. >> with public offerings from names ranging from twitter, hilton potbelly activity reached the highest level in the ipo market since 2000.
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>> with stock prices at record highs, some were wondering the ipo is running out of roads and some say the trend should continue. guys, thanks for being here. >> thanks for having me. >> appreciate. >> gene do you think 20141 a year where the ipo market heats up even more? >> i do. since 2012 we've seen confidence building. volatility down and equity markets up we've seen market price at. you have financial sponsors who are funding these deals, remaining very active and aggressive. at the end of the day, you know it comes down to the equity markets' willingness to assume the risk. right now they are. >> jim y you're saying that 2014 would be a good year for technology ipos. who do you have in mind? how good are we talking? >> i pretty much think as long
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as we're driving this fed-drunk market, ipos should be hot in 2014. >> wait a minute jimmy. we're talking about the fed going out of the picture. it 2014 still okay even 23 that's the case? >> yeah. >> i think so. >> based on the taper speech i think, seems like they'll keep interest rates really low for most of the year. after the announcement, you saw the stock market jump, so i think we'll ride it for a little while. i don't have a crystal ball. i don't know when we're going to retreat, but i think it's a good year for ipos. one which we're looking at is air b&b. i think the peer to peer market has a lot to offer. i don't know what you guys think about that. >> yeah, exactly. that's a good point. we're talking about peer to peer, sharing technology. a lot of the new innovation is coming from social media and ultimately leading to the ipo market. we saw twitter turn around the narrative completely from what happened to facebook prior to that. do you think that means there
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could be a flood of these kinds of publiccompanies looking to go public? >> i agree. i think people have gotten over the facebook debacle. you can only jump through the ipo window when it's available to you, and right now it's available to a lot of companies. i think 2014 you're going to see the industries weighted toward health care and tech but i think overall it will be industry agnostic. >> gentlemen, good to see you. thank you for your thoughts. we'll look ahead to the ipo market for 2014. a lot of big technology names. >> and square there are so many interesting to watch for the first part of next year. 40 minutes to go to the close. dow fractionally lower. it's off about seven points. the s&p, 100. nasdaq around that flat line. >> we can't finish negative today. somebody buy something. stocks may be near record highs but a new survey -- this is what we're going to talk about coming up we find this fascinating,
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everything is amazing but nobody everything is amazing but nobody is happy. he was on conan o'brien and complaining that people not having wi-fi when people are flying 30,000 feet above ground. >> everything is amazing and nobody is happy. there's a little mentality here where everything in terms of the market is amazing but, really, why aren't people happy? it still looks like the louie ck market. levels at new all-time highs and then you still have the new poll from cnn/orc that 70% do not think the economy is in good condition. >> let's talk about the seeming disconnect between wall street and main street. we have ron and chase chief economist anthony chen in lovely
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honolulu, hawaii. good morning to anthony. ron, what do you make of this disconnect? who's right here wall street or main street? why does it feel like -- even though the stock market is at all-time highs people don't feel like this recovery is for real. >> there's a couple reasons. one, i think it might even be stronger than people realize. i think there's -- we talked about this to a certain respect. post-traumatic stress zoem that's hurt main street. they've been burned in the real estate and internet bubble and they've gone through an extremely tough time. they were hit much, much harder this time around than they expected to be hit, to which the main asset they had leveraged was their house. people still feel the pain. when you look at the data they're unambiguously better than several years ago. and getting stronger as we move forward. i think it's a bit of both. >> anthony the key point relative to a couple of years ago, at least the unemployment rate still remains high by
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recent historical standards in this country, we've got a million people losing extended benefits tomorrow. you have average earnings up 2% year on year and a lot of people working multiple jobs because they can't make ends meet. that seems to be the main source of the disconnect. that and the fact that a lot of people haven't participated in the market rally and think it's driven by the fed in the first place. >> there's a lot of things out there, kelly. one -- for one, we know that consumers react more to changes in employment conditions. and employment of course, is a lagging economic indicator. wall street of course, movements, leading economic indicator. the truth of the matter is when you look at employment numbers today, relative to the financial cries, we're still in deficit mode. then you saw the recent study by the federal reserve that suggested the labor force participation rate has been artificially lowered, and that has caused the unemployment rate to be reported about a half percent lower than it otherwise should be. the truth of the matter is, yes,
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the economy is improving. yes, we got 4.1% growth in the third quarter. don't lose sight of the fact that 41% came because of inventory. the economy is improving but i think the numbers overstate things slightly. we're only looking for maybe 2.8% growth for all of next year. which would be dramatically less than the 4.1% we recently saw. >> ron, you would think that productivity must be up if profits are where they are with the unemployment rate where it is. we're doing more with less, i guess. >> yeah. to an extent. although, bill, as much as i travel around the country, it's hard for me to find a city where you would see that happening. i mean, places like kansas city -- missouri and kansas are buzzing. indianapolis looks good. new york has never seen this kind of tourism. it's up 24% over three years. miami, believe it or not, they're building more condominiums because they need to accommodate more people coming into town. i think most cities around the country are doing better. if you look at private sector data, that portion of the
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economy, which is the largest, is probably grow 3% 3.5%. i think some is a real disconnect. i think a lot is a psychological disconnect. kel kelly, i think that analogy was apt, things are better and people don't seem to feel -- >> that's what makes 2014 so important. it can go one of two ways. we can be stuck in this environment where gdp growth doesn't break out of 2% unemployment is high that's good for the stock market and people continue to hate it or we could number a situation where profit margins start to come in but that's because people are demanding more income from their employers, unemployment rate is falling and people are participating in that broadly. peer we're on a knife's edge to some extent. >> we are but we'll see further marginal improvements in the economy. i think the big surprise for 2014 is going to be capital spending. that was a no-show in 2013. we know when we get capital spending, we do get more employment growth. that's why i think we're going to see the unemployment rate
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come down to 6.5% by next year. relative to the previous recoveries or expansions, the employment situation has lagged a bit. remember, this is our fourth year into the economic expansion. things are getting better but i think people feel frustrated it's still taking way too long. >> interesting thing here, if i may, the best performing stock market group since the bottom of the crisis is consumer discretionary. which suggests that consumers are doing one thing, as you point out, kelly and entirely saying another because -- >> but that consumer discretionary includes companies like amazon, which are more disrupters, innovators than pure reflections of consumer spending power. >> they're still buying, though. you go to to amazon to buy. you look at late christmas buying and you get packages delivered today, tomorrow and beyond. i think the consumer is doing better but not feeling great. >> anthony n your view i don't think we've spoken since the fed
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announced the tapering is it appropriate timing given your forecast for growth in 2014? >> i think it is. because in 2014 the economy is going to grow much faster than 2013. we know you got a big jump in the third quarter. in the fourth quarter we'll probably go to 2.5% or so, but the economy is in fact improving. with the taper, which still will involve a couple hundred billion dollars more of quantitative easing, as much as $400 billion to cut it about $10 billion every single month is appropriate. at some point the fed has to do that. remember they're also balancing with really good forward guidance suggesting it can keep short-term interest rates low for a long period of time. when you put those two things together, it was the right time and the right move for the fed. >> all right. gentlemen, good to see you both. happy new year. 6:00. >> indeed, 6:00. >> i'm not going to ask. >> don't. heading toward the close. 30 minutes left here. down just a point.
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art cashin came by, bias is switched to the buying side. probably won't have a whole lot of volatility heading to the close. american expression has been the second best performing stock this year. can it carry to 2014? we have a stock brawl next. find out the two financial planning moves you need to make before the end of the year. i remind you, that would mean there's only two days left. you can't afford to miss that. get zero due at signing, zero down zero deposit, and zero first month's payment on any new 2014 volkswagen. hurry, this offer ends january 2nd. visit vwdealer.com today
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target shares target shares trading lower. right now down about 40 cents at $62.10 after the retailer admitted debit card p.i.n. numbers were stolen during that massive data breach. morgan brennan has the latest. >> thanks. target now confirms debit card p.i.n. numbers were compromised, which hit 40 million customers. these numbers were stolen in addition to the previously reported track data the information stored in a card's magnetic strip. target insists the data encryption will keep those p.i.n.s protected saying quote,
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we remain confident that p.i.n. numbers are safe and secure. the p.i.n. information was fully encrypted at the keypad remained enkrissed within our system and remained encrypted when it was removed from our systems. raj samani says target's analysis of risk related to stolen p.i.n.s seems correct. triple des encryption is strong and there shouldn't be any reason to change your numbers. mark rogers from lookout says there's no such thing as permanently strong encryption. he says, in my world there's no such thing as permanently secured encryption. one process is called hashing, which turns your p.i.n. into random numbers. it cannot be reversed. rogers says this method is favored by his colleagues in the security industry and believes hashing may end up the gold
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standard of security one day. >> morgan, thanks. it's enough to make you about to bitcoins, isn't it? >> bill such a cynic. >> not enough? >> such a cynic. prime numbers have a lot to do with digital cryptography. >> you're not going math whiz, are you? >> it's fascinating. >> it is. >> we asked has american express gone too far, too fast? >> abigail doolittle too much, and david thinks this is a stock with much more room to run. david, make your case. >> well, i think american express has, first a great global brand with a reputation for phenomenal customer service. tear producing 15% earnings per
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share growth and 25% r.o.e. i think they probably have the the -- a bit of a wind at their back with slow but steady growth in consumer spending. i think that's going to continue. >> abigail, we found yet another stock you don't like. >> i know it's surprising to everybody, bill, but i am a bear through and through here on american express. it has truly gone too far, too fast. as kelly mention the, up 53% this year relative to the xlf being up only 30%. in light of the fact that the company is only growing top line by 4% bottom line by 15%, the numbers don't add up. when we look at longer term basis, this distortion becomes even more extreme. this stock, american express s up literally 822% over the last nearly five years. something's got to give. especially when we consider there really aren't any clear upside catalysts. yet, we have the constant
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economic, you know potential for the economy to weaken or also government regulation. i think the technicals here are pointing to 20% decline. i think 72 is revisited this year. american express is a sell in my view. >> david, there is certainly a point to be made about regulation, especially in light of what just happened at target. is that a risk for amex here? >> look, american express has been in a highly regulated business for a long time. i think all the regulatory risks are essentially in the stock. american express has done a great job as a number of other card companies have in dealing with the new dodd/frank legislation and the consumer financial protection bureau. i'd point out, by the way, that i think one of the strengths of american express is that it's been able to produce strong earnings growth even in a revenue growth environment that has been somewhat more challenged. i think any company that is able to take that kind of 6% to 7% revenue growth and turn it into 15% earnings growth through disciplined cost programs and
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buying back a lot of stock should be commended. >> david by the way the card companies are going to be forced to be much more transparent. i see in some stores i pay a surcharge if i pay with a credit card, i understand the loyalty and amex is kind of a premium luxury name, but are customers just going to get fed up? >> well, there's no sign that customers are getting fed up. i think american express, as you said does have a great loyal customer base. and the regulatory environment is going to be the same for all of the card companies and other forms of payment. so, again, i don't think that's a reason not to own american express. >> let me ask it this way, and we'll get back to abigail, what could go wrong for american express that would change your mind on this? >> to david's point i think this is clearly an iconic brand great management company. they've been very disciplined in cost cutting but that only goes that far. 15% eps growth, that's not that
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impressive. and only expected to be 10% next year. what could go wrong? if the economy turns down, that will go into consumer spending and cut down on credit card use and consumers out there already have so many debt. that's a risk. and the regulatory environment. it's macro. it's not a matter of this company doing anything wrong. they're really doing everything right. but i think there's no real catalyst to take shares up higher. again, 822% since the 2009 low. that's tremendous performance. but what is the next catalyst? >> sounds like priced for perfection. david, what could go wrong for amex? >> i think the biggest risk for american express could be a global recession, a u.s. recession, something that cuts -- an event that cuts into travel and entertainment spending. by the way, the consumer's been deleveraging since the financial crisis. and the fed's data on the consumer debt burden is the lowest that it's been since
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1980. since they began keeping statistics. so, i don't honestly think that consumer debt in and of itself is a particular risk to american express. >> well, if they start using credit cards again perhaps that will help. guys, thanks very much. a lot to think about. thanks. >> abigail, we'll find a stock you like. >> would love to do that. >> it's out there. >> 20 minutes to the close. the dow -- is that a plus sign? >> that's a plus sign. >> we're adding a couple points. the s&p 500 looks like it's marginally lower. the nasdaq is still off 11 points. >> can we end the last full trading week of the year with another record close? stick around. we'll find out momentarily. >> delta honoring those super cheap fares they posted incorrectly on their website. >> you could buy a ticket for $4.40. ho should amazon, u.p.s. and
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fedex make up for the epic delivery fail? and is target's two-day 10% discount enough to make up for the stolen p.i.n. numbers? tweet us. we'll reveal your best responses later coming up on the "closing bell."
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welcome back. looks like we've welcome back. looks like we've hit the pause button on the santa claus rally, at least for today. >> but stocks are making moves. seema has round up. >> the best two performing stocks today cliff's natural resources and peabody energy are the worst two. perhaps a change of heart on wall street. we'll have to see if this trend continues. let's talk social media because twitter shares which have been in rally mode this month, are falling back to earth today after mcqueary downgraded to underperform to say, no way to justify the recent run. check out the stock. down almost 12%. other social and internet stocks are also trading in negative territory. facebook, groupon and pandora. 3d systems remains on the watch list after a volatile week of trading. shares today down about 1.5%.
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and sprint shares popping on further speculation it may merge with t-mobile. lastly, two charts traders have on their radar today guys. first the ten-year treasury yield hitting 3.02%. highest level since july of 2011 as investors sell bonds. the other interesting chart is the euro hitting two-year high against the dollar. >> thanks very much, seema. breaking news by the way, on the volcker rule. mary thompson, what can you tell us? >> regulators are reviewing what is currently a ban on certain debt securities held by banks. specifically this will impact the smaller banks. these debt securities are essentially cladollateralized debts. smaller banks have these as part of their capital. if they cannot hold them as specified under the volcker rule as it's currently interpreted, that would have an impact on their capital. so, what the regulators are doing is deciding whether or not
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it would be appropriate for these banks to continue to hold these debt instruments. now, you might recall that the american bankers association threatened to sue regulators over this aspect of the volcker rule. as we see it right now, regulators reviewing it so we could see a change to the voluntarily ker rule which is passed recently. regulators say they will make a decision on this by january 15th. >> just to be clear, are we talking about structured finance, some of these securities? >> collateralized debt obligations, cdos backed. they are part of the number of smaller bank's capital. if they have to sell that it would impact the capital. zion bank said it would sell its treps, they would have to sell these and take a charge that would have an impact to the capital, which they would have to raise. community banks are very concerned about this. again, regulators are reviewing
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it. we'll know the answer by january 15th. >> this is symptomatic of why it's taken so long to get dodd/frank and volcker rule because of the minutia that has to be settled on between bankers and regulators. >> especially areas of structured finance which, mary, they never thought would come back from the dead. >> and applying the same rules to bigger banks to prevent some of this risk taking regulators want to prevent at bigger banks and applying them to smaller banks, which are not always involved in the same activities. >> great stuff. thanks, mary. appreciate it very much. can we mention twitter one more time? first of all down 12%. how easy is it for companies to come out and put a sell recommendation on twitter? where were they last week? >> even after yesterday, that valuation makes it very easy for you to come out and sound smart and say, it's overvalued.
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>> too easy. too easy. heading toward the close. it's going to be a squeaker. >> coming up on the heels of one of the best years in the market in over a decade can they carry this rally into the new year? where will the best opportunities be in 2014? the outspoken david darst has some ideas. he joins us next.
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nine minutes left in nine minutes left in the trading session. we're wondering if the dow can finish positive. s&p, too. if both of them do it's a new all-time high for both of them. wouldn't that be a nice way to finish out the week. the dow up a fraction. the s&p down a fraction. joining us, our friend david darst from morgan stanley wealth management. what a year this has been. >> it's been amazing. only two down months. june was the bernanke tapering/tightening distinction. september was down 3.5% because of the chemical weapons attack in syria.
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that was august, bill. >> now, the adage is, typically historically a great year is usually followed by a good year on wall street. is next year a good year? >> our forecast, as you know, is for 2014 at the end of 2014. that's up only about 8% from year. >> that would be a normal year. >> you put 2% on top of that that's 10%. also bill the banks, transportation stocks and small cap stocks are up 35 37 and 39% respectively. it's been an outstanding year for these market leaders. that's kept us bullish all year long. two things are too high right now and two things are too low. bullishness is 55%. >> yes, individual. >> and case-shiller price ratio which many people don't take much account it's 24. every time it's above 24 bill, it's led to a significant market
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krekdz. those are the two things that are too high. the two things that are too low, volatility at 12.3% and inflation is flirting in europe even in the united states, very very low. >> that low volatility can be a con temporary contrary indicator. >> that concerns us. >> are you looking for a pullback to start the year off? >> we think the year is going to be driven very much by earnings in the fourth quarter. industrial production, durable goods numbers, the ceo comments from the third quarter, are looking pretty good. and i think the retail sales numbers are going to come in a little better than people expect. >> but through it all, you've liked, you know, some of the stalwarts in this market, the intels, the apples -- >> apples, baker, halliburton,
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schlumbarger. one area we've liked that's lagged is defense and consumer staples. we've loved health care. cokes, they have not done as well. >> an analyst looking at one group that's at 52-week low, even as we set all time highs, that's the mining shares. >> they're getting attractive. gold mining index is down 58% and junior gold miners are down 68%. >> do you look at that -- we put out a 51-page report on north american gold mining stoods. they liked two out of seven. i think you could noise around because capital discipline is coming in there and they're raising dividends and not expanding the mines the way they were when gold prices were flying high, bill. >> happy new year. >> happy new year. thanks for this year.
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>> see you in 2014. david darst joining us. we have the closing countdown coming your way in a moment. after the bell amazon fedex, u.p.s. in full damage control after failing to deliver those presents by christmas. a crisis management expert weighs in on whether they are taking the right steps to make it up to their customers. we want your take on this as well. what should these companies be offering customers as compensation. we'll air your best tweets coming up. you're watching cnbc, first in business world woid.
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two minutes two minutes left. here's what we've done today. sideways, basically. we're just waiting to see whether we'll finish positive or negative on the dow. at stake, of course, a record high for the industrial average and for the s&p. doesn't look like we'll get it on the s&p but you never know. the dow starting to move down half a point at the moment. for the week the dow up 1.5%. it's been a pretty good week. we had six straight trading days to the upside with records. so, we'll see if we can get number seven today. twitter, after huge run-up over the last month, first big decline we've seen down 13%, ben willis at $63.69. we've been talking about this all week and now you're getting
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this lower. >> seller's instinct is to trade that way. whether twitter or any stock in the universe. i mean, you go to ackman on herbalive on trades like that so you have to have a lot of money if you have that conviction. it paid off today if you made a sell yesterday. >> we lost the momentum in the overall market. is it a function of this is the friday between the holidays or is something else going on? >> santa claus is taking a breather. it's a great move for a month, let alone a week's time. good time for a well deserved rest. looking for a correction. we might only get a sideways move and that's not bad. >> i was just going to ask you what you think will happen next week. full trading days monday and tuesday before the end of the year. >> you'll probably see window dressing before the end of the year, up or down on stocks. basically -- hopefully holding the line until the new money you get, new 401(k) money money
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that couldn't go into these markets being able to come in in the first weeks of january. >> thanks. we'll not get new all-time high but seven seconds left in the trading session. that's it for the first hour. stay tuned for the second hour of the "closing bell" with kelly evans and a high-power panel today. i'll see on you monday. >> welcome to the "closing bell" on this friday afternoon, finishing out a holiday week. kelly evans. it was a photo finish on wall street. dow trying to close at another record high. here's a look at what's just happened at the close. looks like it's falling a bit short. down just about a point. the nasdaq losing 10. under pressure from social media names. s&p 500 fractionally lower on this day. i don't know where santa claus went. simon hobbs, nathan backrack, welcome to all of you. simon, we're talking about companies into this close, some
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of the big momentum names in the past, whether it was twitter down 13%, facebook down 4%. did something fundamentally change today or is this a pause? >> it's the middle of the holidays and volumes are low. twitter is interesting that the air would come out of that after a phenomenal ride. the jury is still out on so many things. the santa claus ralgly is still into takt. typically you you get a gain of 23 2% and we're ahead of that. >> we don't want to read too much into it but it's a big move in twitter. does it tell you anything more broadly? >> the only thing from talking to my kids this week is twitter has more security than facebook. a lesson might be learned by the nsa and a few competitors. you can stay private over there. otherwise, i think we got a lot of individual window dressing. twitter is way beyond where it should have been to begin with. you have to remember with facebook, they ultimately as the expression goes they had to
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earn it. i think the same thing will be true for twitter. >> they had to earn it. they went through a lot of volatility, the first earning season. speaking of earnings, just as soon as we flip the calendar to january, we'll start the next earning season. i wonder if we'll be in a period, this was true last quarter as well, where individual corporate earnings matter. this is not just a macro market anymore. >> you would hope at some point we would move to that fundamental phase of the market. the market's going to get a test as we go into 2014 with the federal reserve easing back the throttle a little bit. yes, we may have to look at now, you know, whether companies can drive that. the big thing i'm going to be looking for -- i wrote a post for this on cnbc.com, about m&a whether companies will start to invest in their business. start to do business start to do cap ex, start to hire. >> what are you saying about m&a? the story has been the lack thereof in 2013.
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>> i actually think 2014 is going to be a very good year for m&a. >> why do you say that? >> as you make the point about how slow of a year it's been, i think that that will sort of repressed demand starts to come back into the market as cash starts to look for a way to go. we actually saw in the last quarter, corporate cash on the balance sheet went up. it's over $1.9 trillion for nonfinancials. >> morgan here's the problem and goes back to the markets. companies are getting expensive. targets are getting expensive. we're talking about record high valuations for a good chunk of the market. >> which goes back to the point about twitter. we saw another analyst downgrade on twitter. it's a company not necessarily turning a profit. for me it's a question does the emperor have any clothes? for me that's a big question coming into next year but i think twitter is the exception. >> we can talk micro or macro but simon, are we finally
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done -- it's clear we're done with this. we're putting behind the high correlation period of the market. you look at the fact that the ten-year was at 3% and stocks are at record levels. feels like something is changing out there. >> we've been over there so many times. let me say something different. can you put up a chart of the s&p so far this year? for those that believe in capitalism, i actually think this chart, up 29% plus for dividends is dangerous. the whole point of capitalism is that you reward the capitalists, shareholders shareholders, bringing together production and making economy work. >> but that's -- >> let me finish. that's why shareholders get profit from economy. i don't know that this year on that gain they brought the fire to the economy they should. in fact, what they've done is they haven't taken the risk. they've returned $450 billion through share buybacks. >> simon, we're going to get revenue. >> it's danger youg moving --
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>> in 2014 simon we're going to get revenue. if we can keep costs in line, you'll see capitalism doing what they do well which is maximize maximize -- get their margins up instead of having to lay off and figure out how to manage -- >> i think -- >> hang on. simon, go ahead. >> what i'm trying to explain is i think they're not in line with the spirit of capitalism. which is you take the profit from the economies in return you ensure full employment. they're not doing that. >> they've taken profits from the fed so far. >> hang on. >> fed policy. >> jeff, go ahead. >> i mean, that has been fed policy to do that. >> it is not fed policy to return half a trillion in buying back your own stock rather than investing in the economy. >> but -- >> simon, it was fed policy to put all that money out there. they got it. >> look at performance. the companies that have put money back into their business have gotten creamed in the market. the companies that have gone to
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dividends and buybacks have been rewarded. >> actually, that's not true. >> it won't happen as long as interest rates are low. when you see interest rates rise, that game is over. >> simon? >> when you see growth twitter facebook that's growth. that's what people are rewarding in the markets. not not share buybacks. >> this is is what i wonder, we were making this point earlier but we're on a knife's edge. we can go one of two ways. 2014 can be another year where there's not, frankly, the growth we need in the economy because people can't bid their wages up and confidence remains bleak and the market can perhaps do okay and everyone will hate it even more. or it can be go the other way and we'll see corporate profit margins start to shrink as more workers are experiencing wage gains and participating in the economy. morgan, it's interesting, because those two things bode very differently for the political cycle next year and generally the way this rally, today and this year is viewed. >> that's right. and i think there's a bigger point here. that's the fact companies have been able to do more with less the last couple of years.
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that's one of the big questions coming into 2014 just how many more people do they need to hire? that's going to be the big issue next year. >> let's bring in jim. what jumps out at you today? we didn't rally? twitter is down? >> this is a quiet holiday day. twitter being down so much today after being up 25% in a week is kind of immaterial in my eyes. simon has a good point about sounding the warning bell there needs to be reinvestment in the company proper. no line has been crossed. what most and myself are looking for in 2014 is that companies reinvest start hiring, increasing wages. if they do that we can see that cycle gate demand going up and economy can go along with it. >> can i be so crude as to ask
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how do you play that? how do you -- >> you're not being curt at all. that's the $64,000 question. i find it hard to make the case that we'll have the rise certainly not out of the gate in 2014. i think sideways for the first half of the year is likely -- >> even beyond that, do you pick the companies who you think are going to be doing the cap ex or -- >> absolutely. >> -- or back to jeff's point, do you worry perhaps that 2014 is not as profitable a year for some of these firms? >> look, you always worry. that's what makes investing great. you know, you worry and you invest in where you think the worries are the least. i think what we're supposed to do is take the money from the high-fliers in 2014 and put them into low-throughing cyclicals -- >> is that what happens when you look at twitter and facebook, some rotation here? >> i think so. in the last week as you've seen
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caterpillar and commodity and energy stocks rise those are the losers. as people reposition into losers of 2013 makes sense to me. >> morgan? >> kelly, at some point -- there's nothing more deceptive than an obvious clue. right now large cap growth, ivwf you want to play the etf, is 15% off historical average. it's the only bargain when you look at large, medium and small. the only place still selling at a severe discount. >> do you like it, nathan or do you stay away from it? >> no i like it a lot. i think it's being ignored. i think it's being ignored because of cyclicals because of noise in china. you look at the sector and say, wait a second. this is where the big boys simon, tend to play when the economy gets going. large cap growth companies everyone has abandoned because of all the people giving out dividends or buying stock back. >> simon, if you believe we're on the cusp of a broader, more sustainable cycle, then you want to buy those names. but if you believe what simon is saying, which is there's
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something to this that isn't -- how would you describe it simon, sustainable, believable you have -- >> you have a generation of ceos that is more interested in boosting stock price and boosting value of its stock options than investing in the economy. fact. >> simon, that's been going on since 2006. merrill lynch got in a ton of trouble, everyone, for that. that's nothing new. that's greed. we have a movie on it right now. >> yes. >> i think it also comes to the fact that you see investors being very reactionary. stock buybacks, dividend increases. those are the companies that have been getting rewarded this year. i go back to the point about 2013's losers being 2014's gainers. i'll say -- let me wager here, cliffs natural resources, one of the top gainers today and this week in general, some other states united states steel, gar garman, alcoa, some of the most short in the s&p 500 and some of the companies that have seen the biggest gains in the last couple of days. >> is this is a short move or an early sign of what is to come next year, do you mean? >> well, i think so when you
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look at something like united states steel, for example, there's a lot of risk involved and a lot of ifs. i've been reporting this all week. when you look at steel there's a lot of potential, especially if the economy starts to get legs underneath it to see is that industry come back in a big way next year. >> if i could put a cherry on top of the sundae simon has put together. this is why you see the greatest level of wealth disparity in this country since the great depression. >> that's the point i'm making. is it sustainable? can you keep it running or do you get another generation of politicians that really harmgz the people that are arguably do well at the moment. >> history tells us the answer to that question. the answer is no. >> nathan? >> it's not a $64,000 question. it's aye $480 billion because of the money that came out of stocks in 2008, 2009 only $150 billion has gone back in. it's like where's waldo -- >> those who felt like geniuses
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in 2009 2010 even 2011, now shaking their heads and they don't know what to do about it. stick around you can see jim and "fast money" coming up at 5 p.m. it's been anything but happy holidays for major brands. delta, scoring points for honoring cheap tickets the website mistakenly sold. and $20 gift card that amazon is offering those whose presents never made under the tree. and target confirming inging p.i.n. numbers were stolen in the breach. our panel takes on the snafus. you're watching cnbc, first in business worldwide.
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welcome back. come saturday it's the welcome back. come saturday, it's the end of the road for 1.3 million americans currently receiving iction tended unemployment benefits. robert menendez hopes that changes. >> for every dollar in unemployment in insurance that ultimately we give, we get a two for one ratio in terms of the ripple effect in the economy. so, this is about helping working families be able to sustain themselves while they're
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looking for work. by the way, unemployment insurance requires that you exhibit and prove that you're actually in -- looking at the job market and have made efforts to do so. >> now, the termination of those benefits does come as part of the negotiated budget deal signed by the president. so will it push those who lost benefits to take jobs pranz they felt they were overqualified for or had shunned or create bigger unemployment problem for this country, a labor force problem, really. let's ask maxim and rick san santelli as well. max, you can look at the case of north carolina, which had pushed people off some of these programs earlier. the unemployment rate there is dropping but it's because people are dropping out of the workforce. that doesn't sound like a very good sign. >> the issue that we see here is that we have 4 million open jobs. and we have a lot of candidates that really have a hard time finding those jobs.
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and i think that one. ways to solve the issue is to stop focusing on creating new jobs and start focusing on help people find all these amazing opportunities and all these jobs there that are there for them. >> you see this as simply a problem of mismatch is that right, that there are jobs and job seekers but they can't find one another? >> it's not a simple problem of mismatch. it's a really really awesome and complicated one, but it is a major, major problem because otherwise we simply wouldn't see these 4 million jobs that are open and so many people unemployed. >> at the same time, rick, we know the job openings data show there hasn't been much improvement. while the pace of firing is well down the pace of job hiring creation, new positions also seems to be stuck. >> you know, i think it's a skill issue. more than that, i think the senator that you referenced i'm sorry, don't buy it. taking a dollar from this hand and putting it in this hand and thinking you're going to get 100% return if there was any
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truth to that keynesian theory, then the government should pay everyone not to work and take 100%. not buying it. we're not doing a service to these people because when your resume has big open spots for more than a year it's much harder to find a job. i think we need to admit there's a structural issue and try to address that versus politicians throwing some money at the problem, going away for the holidays, and thinking they've done their good deed. >> rick, can't you do both? it's true that if you give people a dollar they'll spend that dollar. but the problem, as you say -- >> why is the person you're taking it from not going to spend it? >> -- incentive for them to be part of the labor force and not just handing it out? i agree with you. how do you incentivize people while, perhaps, giving them income to stay over from losing one job? >> there's a 26-week program this will revert to. it won't be 1.3 million people. that's how many people it will be on december 31st. as these expirations throughout the year happen, the number will
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be many multiples of that. in the end we are five years into the crisis. even the fed's tapering acknowledges we're post-crisis mode. this is just another case of congress not addressing something they should have addressed. five years is long enough. 26 weeks historically is enough enough. if we can't put skill sets to work, we need to retrain. that's a whole another story. >> go ahead. this is exactly the issue. i mean it's what happens when there are, for example, big changes to the economy or to the labor force, how do you get people who previously worked in say, real estate, so is that they can be truck drivers in north dakota or software engineers in san francisco? >> if i may, we think the issue begins much earlier than an employer looking at the resume and seeing the gap in the resume. we see the issue beginning that the resume itself never actually gets in front of the employer. that is an issue that needs to be solved, right? we see a lot of very qualified drivers, nurses health care
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professionals, engineers, looking for jobs and their resumes don't land in the right hands. they don't know of where the opportunities are. and employers don't know where to look for these people. >> does your firm play a role there in this sounds like the perfect example of a case where silicon valley, some of the innovations, some of the startups we've seen, could come into this is spaces and help these people? is that not what a linkened in does, for example? >> our goal is to help hiring easy. we help 50,000 companies publish their jobs, create job openings, look for the right talent advertise and really bring the right people to these opportunities so that they can begin this conversation, initiate this conversation and then go through the hiring process, right? then determine if they -- if they are fit for the job or not. >> all right. rick if the cme shut down tomorrow would you file for jobless benefits? >> no. >> you wouldn't? all right. >> i've had plenty of times in
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my career when i was a trading where my trades didn't turn out well. you try to find work wherever you can you try to feed your family. i understand how horrible not to have a job and have that success in your life but i don't think the government's the answer. i think that young man is talking, private sector solutions, more people will do the right thing with resumes if they need to scramble to find a job. >> we hope the private sector is listening. thank you, both. have a good night. >> thank you. >> two holiday miscues with two different reactions. delta honoring super low price tickets it offered to exotic locals. u.p.s. amazon and fedex playing blame game for snafus. we assess the pr efforts of these companies, look at long-term impact for these
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your money needs an ally. welcome back. if you're one of the welcome back. if you're one of the lucky delta airlines web surfers who mistakenly landed an $80 ticket to hawaii yesterday -- it's friday. stay with me here -- you're feeling pretty good today. nbc news correspondent kerry sanders joins us to explain what happened here. kerry? >> reporter: well you know, there are some computer hiccups, glitches and whopers. this probably goes down as a whopper, delta airlines, delta.com, trovlavelocity, they
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interconnected from 9 a.m. eastern time to noon, had a coding problem a glitch where prices dropped through the bottom. take a look at some deals people were able to get. jfk to puerto rico. usually that's a $308 fare. 77 bucks. vegas, $81. amy got the best deal i was able to find out there, indianapolis to honolulu, she was looking at the $70 fare. decided to tab over to the first class fare and saw it was only $88. usually that's a $3,396 fare. so, she certainly cleaned up, as did everybody else. delta won't say how many people took advantage of this long open window where they had this problem with the computers, but they are honoring all of the tickets. while delta may be doing that for pr reasons, they also may have to do it because the faa has one of its rules which is
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399.88 subsection a, but nobody knows the numbers, but the words, if a consumer purchases a fare and that consumer receives a confirmation, such as confirmation e-mail and/or the purchase appears on their credit card statement or online account, of their purchase, then the seller of the air transportation cannot increase the price of that air transportation to that consumer even when the fare is a mistake. i contacted delta and said, is this marketing? they assured me this was not something they planned. it was a big mistake. they won't quantify how many people took advantage of it. but when there's a mistake like that people go on twitter and post and everybody else picks up to. so that two plus hour window was quite a window. compare that to three months ago when united had a similar problem and that window was only
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open for about 15 minutes, kelly. >> kerry, thank you for the details on that. a lot of people happy to snag a flight to honolulu for $88. delta is honoring the ticket snafu. amazon offering customers $20 gift cards for delayed delivery. what else should amazon u.p.s. and fedex be doing to regain customer loyalty? what can target do you do in the wake of its hacked system to restore customer confidence? let's ask crisis management, max paul. welcome. >> thank you. >> this has to be a clear win for delta. what do do you if you're amazon fedex or u.p.s.? >> delta is a little different. i think the obama folks are going, wow what if that happens with health care? look, one of the things i think that distinguishes the three when you look at amazon, fedex and u.p.s. to start is that amazon has other products and services they offer besides just delivery. >> and fedex and u.p.s., it's harder to refund people
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directly. they're ultimately subcontracted out to think about it that way from amazon, are they not? >> from a brand perspective fedex owns delivery. u.p.s. owns delivery. amazon owns a lot of other things. if i'm upset at you, for only doing one thing, which is getting my gift there on time, amazon -- >> morgan, would you ever change your delivery service from, say, u.p.s. to fedex because of all this, going forward, if you were -- >> potentially. i might even look at the united states postal service. live dangerously. no, i think $20 at amazon that's a good start. u.p.s. you know refunding shipping, it's a start. i would say those two are taking action. fedex, unless something else happened, they issued an apology. they're not doing anything financially. they need to take a look at it. that's a glaring issue. >> this is like the super bowl for these guys.
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>> here's a magazine indicator. this is the cover of bloomberg business week. it says can u.p.s. save christmas? this was on newsstands before christmas. inside it says he'll make your christmas dreams come true, talking about the guy in charge of u.p.s. in other words, jeff, this actually is, for u.p.s., their super bowl. simon, they have to get it right. in this case, they did not. >> i'm sorry, i'm not -- i don't buy into this manufactured national hysteria. if you buy a gift 48 hours before christmas online there's a chance it might not get there. you know, stuff happens. you know -- >> you said it's going to get there. you said it's going to get there. you take a risk. that's your -- >> for goodness sake, nobody died. >> there's a whole other spin on it. >> but it's your kid's gift. >> whole other spin on it. out here where we have a plant -- or a shipping place in kentucky, it's 4:30 it's coming down snow, your u.p.s. or fedex driver simpu say let's see amazon, those are the guys who
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are going to get in the transportation business. i think i'm taking a coffee break, i think maybe i'll get there a little later -- >> are you saying this is deliberate? >> it's not amazon. >> we had a guy from the postal service come to our house at 7 p.m. on christmas eve, brought a package. >> michael, is there -- >> subconsciously it was. >> does nathan have a point? >> absolutely. >> but the bigger point is the point we were trying to hit on before, which is the sentiment and the branding that goes along with that gift being under the tree and it not being there is very different from a fedex business package or a letter that's trying to get across the country. >> it will all be forgotten. take away this, here's what you'll remember at the end. how do you like transportation now? does amazon really want to have drones and all of a sudden they have a snowstorm and the drones can't get up on new year's eve or christmas eve? they want to blame -- >> ebay was doing same day
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delivery and have messenersgers going out on foot in places like new york city so you have -- >> there are hundreds of thousands of u.p.s. and fedex people that were quite literally running through the streets this is christmas to do the monumental task they did. i don't think this debate does them any favors. they worked hard. if at the end of the day it wasn't 100%, it's not the end of the world. >> and their bosses took a calculation that should have been backed up by at least a day or two with a guarantee that this that gift was going to be there, and they did not. you're absolutely right. >> we have to go. hang on nathan. >> they did have a big robust -- >> nathan, we're going black. mike, if on fedex, if i'm u.p.s., what do i do then? should i be proceed active? to simon's point we'll say, this will blow over and by this time next year everyone wants their christmas gifts? >> you want to make sure you win back that goodwill. a small mea culpa and credit is a long way to go. make sure it goes to the heart, an emotional message saying we
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know your child, those you love did not get their gifts on time. we're very sorry that happened and we'll work very hard. >> life is unfair. woergs worse things will happen. >> nathan? >> i think he should work in pr that's what i think. i think it's all going to be about -- this was a slow retail season. if they can't get it right compared to when it's hopping next year, good luck. >> customer service, hey, you'll live. >> how do you think target amazon, u.p.s. and fedex, by the way, should pursue relations with customers? tweet us what you think. we'll share your thoughts later in the show. 2013 may be coming to an end next year but a tax and investment move you better make
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in the welcome back. we're just welcome back. we're just up on the understand of the year. time to make a couple of last minute moves to protect your retirement nest egg. kerry president and ceo of conkhill investment strategies. they join me. welcome to you both. >> thank you kelly. >> we were talking about one tax move, one investment move people should be making right now. kelly, let's start with the tax
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side. what do people know? what should they do before tuesday? >> a lot of great things they could do in a normal year but this isn't a normal year. the market has done phenomenally well. you would say, let's take expenses or -- or takes gains against losses, you can't do it. but from a business owner's standpoint can you look at your business expenses and take them. there should be some expenses you would take in january, take they will now. >> what kind of expenses? >> any kind of expense. if you have some big project you about to expense, you were going to pay, if you were going to pay the bonus, pay it now instead of january and that lowers your revenue, which lowers your taxes. it can make a big difference at the end of the day. >> what should people be doing on the tax side? >> i'll tell you this year more so than any year investors should be looking for tax losses to take in portfolios. the majority of investors out there invest in mutual funds.
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they're going to be shocked when they see the types of capital gains distributions coming their way. so, there are sectors of the market, particularly this year, that they could be looking at such as emerging markets, such as commodities. and what they can -- >> bonds? >> yes. they can look to make lateral moves. you know a lot of times people don't like to sell their losers. but if you look at it from the perspective of going from, say one emerging market's fund to another emerging market's fund, can you stay fully invested while capturing that loss. >> now, kelly, let's talk about investments. what about investment moves people should make before tuesday? >> it's interesting. a lot of people will talk about, you should take your 401(k) and rebalance it. one of the things i'm seeing often is people coming in with a
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lot of cash on the sidelines. putting it places -- instead of a regular bond fund, a strategic income fund that gives the manager a little more flexibility and can short the bond market when it starts losing money. what about things like nonpublic real estate, nonpublic loan funds, those kind of things. some place to put cash. >> why do you say people should be moving their money around more? from an expense point of view, that's precisely the wrong thing to do. >> the thing is, you want to take advantage of where things are going. a lot of times what happens is people will hang onto winners which sounds great. they hang on too long. people don't know when to get out of something. remember, it's the whole buy low, sell high kind of thing. a lot of people don't do it. when you rebalance -- >> kerry, what about you on the investment side, what should people do? >> sometimes doing nothing is the right thing. sometimes it's not. what i can tell you is people are paralyzed right now. they're afraid of bonds. they're afraid of going into the market at all time highs.
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what they need to be doing is thinking creatively. it's not about the traditional rebalancing. it's about looking at these markets and saying what can i do different? what are the bond alternatives out there? sometimes cash is an alternative floating rate bonds, for example. looking at investments that have different strategies. maybe a long/short type strategy or looking at sectors of the market versus the market as a whole. >> some great ideas there, guys. thanks so much. the clock is running out. kerry and kelly, thank you both. what's burning up cnbc.com right now? first out next in "the hot list." what will 2014 bring for wall street and beyond? the panel will bring ug their predictions.
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invested in the world. bny mellon. it is the last it is the last trading friday of the year. let's see what stories are moving on cnbc.com today. allen wassler is with us. is it twitter? it was a big drop today. >> twitter was big yesterday. yesterday, it was the number one stock looked up on the website. i have a feeling it's like neck and neck with apple today. >> allen, remember twitter went public, nobody was looking it up on the website. >> it was like you put twiter in a headline, it was immediate death. now all of a sudden it's getting exciting. lots of fun there. right now, we're leading the site with five companies that may not make it through 2014. this story hasn't got less than six clicks a minute since we put it up. from our partners at fiscal
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times. include one publisher, two retailers and two net companies. that's the big clicker right now. my old favorite diana olick our real estate correspondent, she weighed in today with how the new dodd/frank rules are likely going to favor the rich. she has a big following on the website. they're already diving into her story. that's our number two today. number three, our very own jeff cox, who i believe is on your show panel today, he weighs in 11 myths about bitcoin. his wonderful write-up. and jeff as he usually does threw other research in there. that's our big number three right now. >> bitcoin, dodd/frank to benefit the rich. thank you. >> thank you. 20 what will the new year bring? let's get predictions from our panel. simon, go first. >> my prediction is apple and
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google will unveil devices. given specifically health and wellness, one of the growth industries moving forward, good positioning for both of them. i think through the eco system they'll try to sell them advice on nutrition, exercise, maybe automate automated. i don't know. that's my prediction. i could give you other predictions but they're really dull. >> people will be traveling and enjoying themselves in 2014? >> no four seasons ipo, but that's for next tuesday. >> mining is big and overarching but i think we'll see the economy get more legs, more hiring take place in 2014, i think we'll see a diverging path, even more so, between long-term unemployed short-term unemployed. i think the word structural unemployment is going to become a bigger part of the discussion. >> you don't think 2014 is the
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year we start to solve that? in fact, you think it gets worse? >> i think at least to start it gets worse. i think you see a much greater gap between the two. and i think -- i think the fact we're seeing tech companies, we touched on this earlier in the show we're seeing tech companies that have labor shortages. we're seeing this in construction industries as well. they don't have people to fill the positions. qualified people to fill the positions. couple that with the fact you have 4.5 million people unemployed and looking for job right now, as we know the longer they're unemployed the harder to fill a job. i think you'll continue to see a growing mismatch. >> mr. cox? >> i see steel bracelets and prison uniforms on wall street. >> you saw is that for this year. >> no. >> oh i might have misread. why for 2014. >> those who were at the -- at the delivering alpha conference that cnbc held back in july we
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saw them talk about nobody's too big to jail. i think pri parara is a big person, has his eye on eric holder's office. he wants a big mantel for that trophy case. i think 2014 will be that year. >> if he could have done it, he would have done it by now. >> well if he could do it. maybe he hasn't been able to do it. >> he doesn't have the evidence. >> who do you think that person with jail-ready jewelry will be? >> would you like me to discuss it? >> we'll have nathan bail us out. any calls for 2014 you want to make here? >> first off, if we throw anybody into the volcano we'll find out that didn't work for the aztecs either. the crowds have to be pleased. 2014 look at bonds. everybody is saying bonds will gradually go up. when is the last time any prediction for something gradually on wall street behaving the way you expected it to actually happens? i think if we get a drastic rise in rates, much faster than we,
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quote, anticipate as professionals, i think you'll see that will be the headwind for the stock market. also how companies adjust to higher interest rates while they wait to see if the consumer, in fact is coming back. i think the surprise of the year is the consumer does come back. >> what's your prediction? >> here's what i think, the credit boom intensifies, stocks will be okay, bonds will move up real estate will do extremely well people will be looking for yield and look back 12 months' time and say my god, we're only halfway through this cycle. can u.s. stocks keep up this record rally? or will 2014 be the year they rebound and outperform? emerging markets. really emerging this year? that's coming up next.
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is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. welcome back welcome back speaking of predictions, the u.s. stock market has been red hot in 2013, what's in store for international markets, can they rebound in 2014? we have more predictions. >> the russian olympics in february will have as much political drama as the last time they were held in russia. that was 1980. when the u.s. boycotted the moscow summer games in protest of the soviet union's invasion of afghanistan.
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now, more than 30 years later, russia is once again resurgent and trying to retain influence and control in eastern europe and the middle east. as we've seen in ukraine and syria. expect russian president vladimir putin to use the olympic games to demonstrate russian mite. the u.s. and iran reach agreement on the nuclear program, sanctions will be lifted. foreign oil companies trading firms hedge funds getting their have i sas in anticipation of doing business in iran once again. finally india will survive any increase in u.s. interest rates better than most expect. monetary and fiscal tightening along with restrictions on gold imports have cooled import demand. current account deficit down to only 1.2% of gdp. that's from 5% in the summertime. michelle caruso-cabrera cnbc. >> some changing geopolitical tides. meanwhile in turkey, the government is in turmoil after a
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corruption scandal erupted and the prime minister accused of firing law enforcement officials to prevent his implication. we have the managing director formerly of the turkish council. he is following the confidence in turkey. thanks for being here. >> thank you, kelly. >> turkey is mentioned as one of the fragile five, the bits that investors are worried about to use the acronym. why should the guys who say that turkey is headed for a crisis in 2014 rethink that point of view? >> turkey has been going through turk lent times for corruption starting december 17. and it seems like it's not going to be isolated or contained at the level it is right now, if there will be objective investigation going on it's probably going to reach the upper circuits in turkish politics and inner circle. so i think it's safe to say, that if -- before everything gets better in turkey, it's going to get even worse in the
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short term. >> and investors will want to know if this political crisis does worsen, what does that mean for a country like turkey, which is so dependent on foreign funding of its deficit? yes, the deficit isn't as large as other countries, but it is reliant on foreign funding and a lot of the funds are short term. >> exactly. turkey's growth has been fueled by capital inflows last ten years, so when there was a global liquidity in the world markets, it was easy to see that growth. recently we witness significant capital out flows starting with the increase in political risk in turkey. stock market lost more than 30%. so it seems like there will be some financing problems in turkey especially when the short term debt, the corporate debt is very high and 2/5 of corporate debt is in foreign
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exchanges. >> this sounds like a place that only super savvy investors or those who think they have an edge when it comes to turkey should may. it's a reason people looking at emerging markets or turkey as an opportunity in 2014 should really pause. >> exactly. emerging markets are on the spotlight in 2014. but again the political risk will determine if investments will be profitable for these markets. so when we see increase in political risk in the emerging markets group i will say it's even -- it will be a setback to focus on the developing markets for 2014. because it's even going to have more political risk coming from the fragile five, as you mentioned earlier. >> would -- just a word your prediction for 2014 for this space for turkey would be -- >> turkey will be going through turbulent times. most likely the prime minister will call elections in 2014.
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turkey has two scheduled elections, one local, one presidential, it's very likely that there will be a third parliamentary elections, actually, we talked parliamentary elections in turkey it will be very difficult for turkish government or turkish economy to navigate through this political gridlock, and global economy challenges imposed. so i will say, they will be very exciting year for turkish politics in 2014. >> exciting is one way to put it. thanks so much for joining us this afternoon. appreciate it. >> thank you. thank you. >> your tweets have been coming in fast and furious, we're going back to amazon u.p.s. and fed ex, how do they make customers happy after failing to deliver gifts in time for christmas?
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you can even take a full-size or above, and still pay the mid-size price. (natalie) ooooh, i like your style. (vo) so do we, business pro. so do we. go national. go like a pro. welcome welcome back. amazon is offering $20 gift cards following the delayed delivery issues on the night before christmas, we asked you what else the company should do to regain customer loyalty. here are some of our favorite suggestions, cal tweets, free prime membership for a month or two and refunded shipping costs. and amazon should stock up on forever stamps and just mail it all. i mean the price guys is going
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up to 49 cents next month. massive opportunity here. morgan you said you would look at the usps. >> i would. i'll tell you what if i was a person who didn't get my package from amazon $79 for a prime membership for a year would do the trick, too. >> that's true. simon. you think it would be enough? you know this space you think it's enough they offer $20 gift cards? >> i think it matters. let's move on with our lives. nobody died. i'm sorry. so some packages got there late. oh. >> santa died. >> it's their super bowl it's like saying a team didn't perform in the most important game of the year. >> not every single package will be delivered when so many people book at the last minute. >> should there be insurance. >> as long as it's not your kids. >> worse things will happen to them jeff. not getting christmas presents on christmas morning one day from one person. >> right. >> life is unfair is what you say to them. they'll find that out to be true. >> next time a waiter brings your steak out cold, have him tell you life is unfair, simon. just eat it.
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deal with it. worse things will happen. >> all right. you guys thank you so much. a lot of fun this friday. >> perfect end to a perfect day, kelly. >> now dominic chu hosting fast money in for melissa lee. dom, contrarian take on the day. is it not? >> it is interesting, of course this is the first downish type day we've had in seven for the dow. if you talk about where the money is made, kelly we talk about the big bets, the guys who make those contrarian bets think about those people who bought subprime mortgages or shorted subprime mortgages, they made the big money. maybe that's the way you actually make the calm. you make the big money making the big bets. right? >> in that case i want to stay tuned and find out what they have to say. over to you. >> thanks. fast money starts right now. live from the nasdaq market site in new york's times square i'm dominic
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