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tv   Closing Bell  CNBC  January 10, 2014 3:00pm-5:01pm EST

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is the same as 500 calories of bananas. you can lose weight no matter what you were eating -- >> he was eat the parfait and a menu. >> he's eating the healthiest stuff. you're a dietitian, economist, and comedian. three in one. >> thanks for joining us. "the closing bell" is next. and welcome to "the closing bell." i'm kelly evans at the new york stock exchange to round out the first full week of trading this year, bill. >> it has been, hasn't it? >> we've made it through. >> i'm bill griffeth. the stock market is zstuck in te mud after that disappointing employment report. job growth only 74,000 when the expectation was at least 200,000. a lot of head scratching over this report. >> and i think if we stay negative, we'll be down six out of eight trading sessions to kick off the year. certainly wasn't unusual to see
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that down first trading day and expect us to turn around. what is the real story on this economy? is it on the upswing? or was that a jobs number foreshadowing we're in for a rough patch. some warning we got ahead of ourselves and things could be dicey. we'll try to separate the fact from the fiction. >> yes, we will. you're welcome, america. and it turns out that if you shop at target, your private information may be more of a target than we knew before. that stock is lower today as we learn the security breach is much wider, the information even more personal. up to, is this possible, 110 million people affected, e-mail, street addresses, names and phone numbers all hacked. is enough being done to make sure this doesn't happen again at any stores? we're going to cover this incredibly important story coming up for you. >> take a look across the major indexes. at the moment the dow is off 40 points or a quarter of 1%. the nasdaq is trying to buck the
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trend. it is just slightly positive adding a couple points at this hour. the s&p 500 is just ever so slightly lower, bill. so a lot will depend on what moves as we head into the close. >> let's talk about it and try so sort things out with danny hughes, steve sacks, mark ibel. we have liesman and santelli with us as well. mr. liesman, have you figured out this morning's report yet? >> here is the deal, guys. if good news is bad news and bad news is bad news as we see today in the market, then the only thing that's possible is no news is good news. and that's why the market is going up on monday because there's no economic data reports until 2:00. >> we got that going for us. was it weather related? what happened? >> we don't know. people think it was weather related but that doesn't explain all of the softness. look, i rarely get to a point where i'm so forecasting a
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positive number. every indicator, gdp, nfib, you name your alphabet soup, it was up going into this number. this is definitely an outlier, but what the trouble is is that this whole report, everywhere you look in the report, there is weakness in the jobs number. so you're going to have to wait until other data come along to really solve this. i'm calling it a tie right now. >> rick, if this were report is the exception to the rule if you look across all the other surveys, even the nfib survey that was positive for december, where is the treasury market taking it to seriously. why is the 10-year back below 2.9%? >> because at the end of the day you can talk to all the metrics you want, there's issue was gdp. it's calculated different. we have intellectual property. it's not necessarily the same. ism, the law of the jingle, some of the purchasing managers that have survived some of the chaos last four or five years have maybe a little bit of a bias. all of these issues. to me it's about jobs, jobs, jobs. whether you have a job dictates whether you can buy a car, buy a
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house, whether you can contribute and pay taxes. it brings entitlement costs down. we can spin it anyway we want. i am so glad the treasury market still has a life even though it's under the fed's thumb, so to speak, because to see this drop in rates, to see a 30-year bond potentially closing at the lowest yield since thanksgiving means i think the market is in sync and everybody has seen the movie "bad news bearbears." say that title over and over because that's the way in needs to be and ultimately the way it will be. >> danny hughes, what do you make of this jobs report and what do you do with it then if you're trying to make money in this market? >> investors sure really wanted to be dazzled. everybody was expecting some out of the park number and what we got was a real disappointment. but bad news, as steve said, is good news because that means the fed will continue to do what it's doing, and that -- the stock market likes that even though the market really didn't react at all today. it's been pretty quiet at the
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beginning of the year after such an incredible rise in disease. what do you do? you have to look long term. these are some flakey numbers. if you're looking at this number to make a decision on trading something, unless you're a high frequency guy, look somewhere else. you have to look longer term at what's happening. >> mark, what do you look at then? how do you get the signal from all the noise? >> yeah. first of all, i think to rick's point, i think the bond market is having a reaction i would have expected. i think the stock market is not reacting because it was such a bad number. it doesn't know what to do with it so it's going to wait for another number. what would have been interesting is if we hadn't started tapering last month, what would the bond market be doing today? i think by the fact we've tapered, they're not going to reverse that decision. we're getting some reaction but not too big of a reaction. >> that's assuming taper will make a real job difference in the end. >> i'm not answering whether it makes a difference or not. >> i'm with you.
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>> -- if we hadn't started taping tap taperi tapering. >> you have created some possibility of a pause in the taper. the idea that bonds would sell off makes some -- bonds would rally makes some sense. what stocks would do with it is anybody's guess. >> steve, do you really think the bonds were bought because they think there's more purchasing or they're going to extend the program? i'll tell you what. every trader i talked to, even if he trades with the fed, they all say the same thing, steve. the bigger the trader, the l louder they say it, the fed wants out of qe. >> i think that's right. but the idea there's the possibility of acceleration certainly comes off the table with this weak number. this is the only jobs report they're going to get between now and the time they meet in january. it could still happen, rick, but if there -- >> but, steve, why does a james bullard then come out and say that despite the fact that we just had the unemployment rate drop the way it did and for the reasons it did that he's comfortable with the fed keeping
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a 6.5% target, that he's comfortable with what's happening in terms of the pace -- >> i've explained this a bunch of times -- >> is it just a phenomenon of bullard being bullard? >> no, i think what the fed wants you to know is that it has a plan and the plan is to taper by $10 billion a meeting. and it's going to take a bit to get it off it. this number is not enough to get the fed off of its plan right now. >> agreed steve. i think that's the point. when we take a big step back and look at the data today and look at the whole picture, you got to remember the ten-year average unemployment rate in in country is like 6.4%. to read so much into one data point today particularly given all the possibilities of seasonality within it, i think the bond market is just hypersensitive to this type of stuff right now. >> what's the average participation rate over that same period? that's your apples to apples. >> i'm sorry, rick?
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>> the participation rate, what's the average on that? >> that's where the rub is. you can't say the average rate is 6.5% when you had a significantly higher part of the population that can work actually working. >> and i don't disagree -- >> steve, that's why i'd like to know why isn't the fed coming out and changing the way it's describing its goals? why does it maintain its focus on that rate? >> but it certainly did, kelly -- >> if the fed could put in a caveat to their statement, they should basically say unemployment at 6.5% as long as it's dropping for the right reason and the way it's calculated if everybody is looking -- if everybody who is looking for a job stops looking it theoretically goes to zero but that's not what we want to see. i think it's not going to be 6%, i think it's closer to 5.5%. >> sl >> surely you were paying attention to the last meeting where the fed said it was a threshold and bernanke has said several times that 6.5% is a soft number, that how the fed
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react at 6.5%, that 6.5% is any 23478 y number you want it to be at this point. the fed has moved well off it in its rhetoric at this point. >> steve, do you disagree with that, that it's a much softer target z target? >> no, i don't disagree. i think ultimately that's the right way to go about this. we got to take a big step back. we have to remember that the fed is attempting to unwind the single largest balance sheet in the history of central banking. this is not an exact science. there's going to be a lot of art involved in this as opposed to pure science. you're going to get overreactions in the bond market. you're going to get underreactions in the equity markets. it's important during this whole process to really take a step back and look at the broader picture all of the data. >> that's the key, right? if you were to convene "the closing bell" open market committee, rick is the one that's worried about the participation rate and suggests that's a lot of softness in the jobs market. if that is, indeed, softness in
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the jobs market, that's a reason not to move when you hit 6.5%. it's because there's excess slack in the job market. >> you keep assuming that the quantitative easing programs are getting some kind of cost benefit to what's happening in the labor market. and once again -- >> yes, governor santelli. >> the biggest problem we have is how do you re-educate 10 million people. it really isn't about keeping interest rates low for the banks, is it? >> i think you're seriously onto something here which is the following. to my mind there was a point to which what the fed did mattered a lot for employment. when you get to a certain point, and i think we may be nearing that point, there is not as much that qe or anything can do to put the long-term unemployed back to work -- >> why do you think -- >> what about -- >> what's that? >> what about the remarks -- >> he is among those who believe the fed -- here is the problem, right? part of what the fed has decided
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is because the fiscal side isn't doing nothing, they have to do at least something. and that's something that anybody can criticize except to the point when you think that somebody ought to be doing something for the unemployed in this country, and if it's not the fiscal side, then it's going to have to be the monetary side and then the cost/benefit analysis become not what rick wants it to be. >> you know what, saying you have to do something even if the something isn't working, you know what? that's what 12-year-old kids say. i'm sorry -- >> if i can get -- >> i don't know what's going on -- >> here they go end. >> if you can give me 20 dips on the 10-year or 20 bips or 25 bips when it comes to long term rates, i will take it in the absence of nothing going on across the street in washington. >> i never want to say that on a day where the treasuries rallied the best customer performance today was the federal reserve. they made more money than anybody today. any hedge fund times five. >> and they sent $77 billion of it to the treasury. >> back to the taxpayer. >> final word.
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>> please take us out, governor hughes. >> i think the exciting -- >> i want to go -- >> the exciting part of all this is we're seeing growth in startups, in innovation, and entrepreneurialship in america. if that's what it takes, if it takes getting away from all these corporations and their big jobs issues and we have to go back to work and innovate in america, then that's a good thing. >> couldn't agree more. >> let's have promises to coast to coast. if it's good for five cities, it's got to be good for 50 states, right? >> there you go. everybody have a great weekend. >> thanks, guys. >> rest up, rick. we're not done yet. by the way, we have a developing story in the media industry right now. dominic chu, what do you have for us? >> we want to you bring you the latest. you saw earlier that areo and all the companies that are going against it, that cbs, that's 21st century fox, abc, part of disney and comcast nbc universal parent company of cnbc, they are all trying to go after aereo in
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a supreme court case. the supreme court has agreed to hear the aereo case. we have statements. cbs says in a statement, we believe that aereo's business model and similar offerings that operate on the same principle are built on stealing the creative content of others. we're pleased our case will be heard and we look forward to having our day in court. we also have a statement from aereo founder. he says in his statement, we said from the beginning it was our hope that this case would be decided on the merits. he also goes on to say that we believe that consumers have a right to use an antenna to access over the air television and to make personal recordings of these broadcasts. we remain unwavering in our confidence that aereo's technology falls within the law and our team will continue to work hard to provide our consumers with best in class technology. so, again, cbs and aereo two opposing parties going to be
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heard in the supreme court issuing statements. we'll bring you more details as this develops but a still interesting story for all of news the media business. >> absolutely fascinating. a lot of it goes back to the business model. it's moved away from advertising, more reliant on retransmission. huge implications for the business. >> they have called the bluff of the industry. we have a dow that's down 18 points, but the nasdaq is strengthening, up 10 with about 50 minutes left in the trading session. a today's weak jobs report a warning sign that last year's historic rally was incorrectly betting on a big economic recovery this year? we'll get into that next. also, we'll hear from a guest who says that horrible winter weather really is to blame for that weak jobs number and the economy really is starting to heat up. he'll make the case coming up. if you want a good paying job, well, run for congress. for the first time ever, the
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save time, save money, and never overpay. visit truecar.com welcome back. those huge gains in the stock market last year in part due to investors betting the economy would kick in higher gear in 2014. >> if the jobs report is any indication the market bet wrong, will we see a decline in stocks this year? let's talk about that with matthew slaughter, former counsel of the economic advisers. rich peterson is director of valuations and risk strategies at s&p's capital iq. >> in the absence of any other data, this report would be disappointing and surprising. y you have to take a broader picture. you look at the decline in mortgage delinquencies. lowest in five years.
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the trend, revisions in the prior two months of 38,000 jobs. >> point well taken but the fed has told us no number is more important than jobs. >> no number is more important than 6.5%, but that 6.5% is a soft number as was said in the previous statement. that 6.7% is very much a function of labor force participation rate. that's been going on for a decade. 25 to 54-year-olds, it's over 80%. >> matthew slaughter, how strong, how resilient, how fast growing is the u.s. economy today? >> great question. it's growing but not as fast as anyone would like. so i think a big challenge is the fed helps the economy. we see this throughout 2013 and earlier years, but going forward, faster economic growth is going to come from elsewhere in washington hopefully. it's going to depend on what congress and the white house does with issues like tax reform, immigration reform, hopefully this is not as good as it gets. we need it to be better.
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>> the fed has said they don't expect there to be as much fiscal drag this year meaning they expect congress to get there. >> that's right. but it's not just the overall budget deficit. it's other things related to that. so it's the tax regime we have. many people on both ends of pennsylvania avenue have acknowledged our business tax code in the u.s. is really complicated and high burden for small and global businesses alike. it's those type of policies we need to get job growth faster. >> rich, one way or people to find of look to earnings season, for example, and figure out whether the economy actually is strong, demand is picking up or not, is to watch the revenue numbers here as well. in other words, are companies seeing sales increase and not just cutting costs in order to hit that earnings figure? it's early, it's going to take a while to tell. but is it your expectation that that's happening, that the pie overall is getting bigger? >> its incremental. talking about fiscal health in
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washington. it's 2014, it's election year. the odds of that happen something like having free flowing traffic on the george washington bridge. the fact is we're seeing some improvement on the top line. we've seen macy's improve guidance. looking at the early signs of earnings season for the fourth quarter, 24 companies this reported, 15 have beat or met expectations. on the bottom line. revenue side a little softer. we have to look at it sector by sector. consumer discretionary may be less well. >> i'm going to change the premise of our question just a little bit. we're asking about the market's expectations of the economy with the market rally last year. was the market rally because they were expecting the economy to improve or because they knew the fed wouldn't allow it to go back into recession. some of both. great question. when they look at how the companies are doing on kelly's question, a lot of companies have been growing revenue, not
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just in the u.s. but when you look outside to the rest of the world. yes, growth is slower in china, but it's still awfully fast. europe is stabilizing. i think part of what markets have been hoping and expecting is that we're going to get growth in the rest of the world and america's companies will continue to connect. >> what do you think the odds are of the u.s. entering a recession within the next 18 months? >> low but not zero. i think a big question mark is if we avoid some fiscal missteps like we've had. another debt ceiling debacle, another shutdown, that doesn't help. a big uncertainty is what the fed will do with the tapering and the unwinding of qe. how quickly that might happen and what impact that has on markets and the real economy. >> do you think as a follow up to that, do you think it's still more likely that we have a speed up squacare or a slow down scar? >> i'm going to say a speed up
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scare. there's a lot of positive forces in the economy like rich talked about at the outset here. the energy revolution is another one dimension. those things continuing in 2014 would be great. the big question mark on the downside is policy. >> gentlemen, good to see you both. thank you. have a good weekend. >> thank you. >> got about 40 minutes left to go into the close. we'll see if the dow turns positive. it is off 18 points moment. the s&p has turned higher. the nasdaq is adding 11 points as we enter the final stretch. >> one stock not doing so well, sears getting crushed after the retailer reported weak sales and even weaker outlook going forward which is a no-no these days. is this sell-off a major bargain shopping opportunity on sears holdings? also the target credit card data breach getting bigger. it could affect up to 110 million people and a lot more personal information may have been hacked. will this finally force retailers and banks to adopt the much safer security systems that, by the way, are pretty
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much used everywhere else in the world. why haven't they started using them here by now. we'll get into that later. don't miss becky quick's exclusive interview with target's ceo gregg stehafel on monday at 6:00 a.m. eastern on "squawk box." stay tuned. in my world, wall isn't a street.
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the nasdaq and s&p 500 have turned slightly higher. the bad jobs report hanging over this market as the first full trading week of the year winds down. dominic chu, what are the big movers? >> the biggest move of them all is intercept pharmaceuticals again. wher not a broken record here. after nearly quadrupling on thursday on news that its treatment for liver disease was so successful it stopped a midstage trial it jumped another 65% in trading today. so in one week it's gained nearly $375 a share. it has yet to post a profit. it's ceo dr. ma's shares are wo nearly $200 million. steve cohen's sac capital did even better. it had nearly 1 million shares of intercept as of november. it stood to make nearly $375 million. there's cgi moving lower. it said its contract with the government over the federal health care website is going to end next month and a tough day for sears which reported quarter to date same-store sales fell by
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7.4%. it also projected a fourth quarter loss wider than wall street was expecting and it was a year ago that eddie lampert, the hedge fund manager, named himself as ceo of the company. the stock is down 10% during his tenure as the chief executive. >> dom, thank you. let's talk about sears. is this a buying opportunity at these levels or is it best for investors to just stay away? >> mary gilbert and michael santoli from yahoo! finance joining us now. thanks for being here. mary, first to you. do you see value in sears? >> absolutely not. these shares are not for the faint of heart. this company is highly complex. it's being run by an asset manager, and that shows in the number they reported. as you highlighted earlier, they reported comp sales down 7.4%. at sears it was down 9.2%. at k-mart down 5.7%. more importantly it's the earnings losses.
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th if you exclude lands' end which they are planning to spin off, losses go to $400 million to $330 $500 million. now you have to add in pension losses. you're talking about cash burn of about $1.2 billion to $1.5 billion and that's after considering cash generation from working capital. >> all metrics look bad at this point, mike santoli. you wonder eddie lampert's money pit that this has turned into, if he regrets this and how does he get himself out of this? >> i obviously can't say if he regrets it. it's always been much more about an asset shuffling play and it remains that. it's not about is this a
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retailer that can turn itself around on a fundamental basis. >> he's an asset manager, he's not a retailer to begin with. he's not a merchant. >> exactly. and, look, with the market value of it below $4 billion, i don't know where the support is from the asset value, but land's end is worth more than $1 billion basically. i would say based on its ebitda levels. they're walled off legally in a different entity. maybe they're worth more and the auto business. i don't know exactly if he can make it all work as he tries to sell off real estate but it seems to me that's been the play all along. it's not been about getting more people into sears and k-mart stores. >> ebitda is earnings before tax, amortization. what about the real estate value? >> we think there is real estate value in sears and that's been proven. when they go to monetize the value in the real estate, it's going to fund losses, operating
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losses, and so that's one of the key points to note. and when you think about lands' end. we disagree with the valuation of over $1 billion. we were previously valuing lands' end at $1.7 billion just to be conservative and aggressive before they came out with the numbers. with the numbers, we think that valuation is under $1 billion today. >> wow. why -- explain that, if you would. >> well, the company had never disclosed the metrics before so analysts had to estimate what those numbers would be. so we were giving them the benefit of the doubt that they were executing well and that that business had grown. when, in fact, it really hadn't. it really hadn't blossomed and it really wasn't as profitable as investors thought, and so that's why the valuation is really lower. they're he ebitda was $120 mill and that was through the third quarter. if assume it's 110, you would value it around seven times.
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>> what does it imply for the shares. >> that equates to about $9 a share of let's say less value right there in lands' end. and then when you talk about the brands, we agree there's value in the brands. however, there's also debt against that entity and the brand value if you go to monetize it and sell to to a home depot or a lowe's, it's going to be a lot lower because they won't be able to replicate the revenues that are being generated. remember, those revenues are decreasing. in fact, we think that the debt at kcd could be reduced -- the rating on that debt could be reduced by annuities on this news. >> it's just not looking good for sears. hasn't for a while. had a good run late last year but it's fallen off the cliff once again. thank you, both. have a good weekend. >> thank you. >> see you later. heading toward the close here. we have about 30 minutes left of the trading session. the dow is slowly trying to come back. on a day when you had such a horrible jobs report, bonds
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rally big bringing yields down sharply, but the stock market just kind of sitting there again. down eight points. >> our next guest says don't blame the economy for the weak jobs report. blame the bag weather. is he right? we'll debate that next. also, it's an epic battle for sector supremacy. receive seema mody saying the tech sector is the place to be. but dom chu says you should bank on the finals. they'll go head to head later on "the closing bell." that's righ. it's just that i'm worried about, you know, "hidden things." ok, why's that? well uhhh... surprise!!! um... well, it's true. at ally there are no hidden fees. not one. that's nice. no hidden fees, no worries. ally bank. your money needs an ally.
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a weak december employment report this morning, just 74,000 jobs added. the participation rate falling. the reports citing the weather as a key factor, but is that really the main factor keeping people out of the workforce? >> we're going to talk about what we all love to talk about, the weather. john is with lpl financial. larry mcdonald is a cnbc contributor from new edge. good to see you both. john, that's a dramatic sho shortfall of job growth. can we lay a lot of that to the weather? >> i think so. it was a really bad number. it was below the low end of the range of estimates. that doesn't happen that often. i think the low end of the range was like 100,000. this came in at 74,000. so, yeah, i think most of it is if you look at the key -- three
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key weather sensitive sectors, transportation, construction, leisure, hospitality. the net swing was 80,000 jobs. you add that back and you get a semi decent report. so i think it is mostly weather. >> well, larry, certainly if you look at the household side that generates the unemployment rate, a lot of people were at home not looking for work. one of the highest proportions since the '70s. that would certainly seem to indicate a one off effect from the storm here. >> kelly, i'm wondering where the outrage is. the last five years we've had $4 trillion of kwan tquantitative easing. and we have 75,000 jobs and we're going to blame it on the weather? come on. >> we have been hearing from our rick santelli in that regard, but it is one month, and can we extrapolate a whole trend from that one month? >> bill, the worst thing that's going on, france's labor force
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participation rate is 55.9. we're on a collision course with france. it's really a perfect storm. you have got technology, you've got an aging population, and you've got big government. that perfect storm is putting this labor force participation rate on a collision course with france. >> what i wonder though and john perhaps you can address this, if you look across all of the other december indicators that touched on employment trends or consumer spending trends for this economy, so far they look okay, and they were consistently okay. so this does look like an odd man out, and while larry is right about the longer term concern about this participation rate, it is possible, certainly possible, you could see 2014, some of what happened just in the last two months alone, start to reverse. >> that's true. although it does depend on the weather here. we've had a pretty cold start to january. luckily the survey week for the jobs report is actually next week, and it looks like next week is going to be a little warmer and less snowy than this week.
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so i think you do get a pop just because of the weather, but i do agree to some extent with larry. you are seeing demographics play a big role in the drop in the participation rate. some of it though is that we're just getting very slow economic growth. but i expect over the next couple months, maybe not all of january, but january and february, that you see a snap back in job creation. most of the other indicators are pointing towards a decent end to 2013 and, again, we expect a 3% gain in the economy here in 2014. >> larry, what kind of job growth do you expect this year and do you think it's appropriate for the fed to begin pulling back on its easy money policy as it's planning to do? >> the biggest thing i want to focus on is the entire market is focused on the taper. i think the key key for investors is to look at the fed balance sheet. we're at $4 trillion now. it's when the fed stops tapering, in other words the street is looking at december. i think the street may -- the
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fed may continue quantitative easing well into 2015 and that's bullish for things like gold and some asset classes that are beaten up like gold. >> because you don't think job growth is going to pick up enough? they're going to keep going? >> i just think -- it has a lot to do with the ageing population. most importantly, the inflation rate is at 1.1% on the pce. janet yellin will attack that when she starts to get behind the driver's seat of the fed. >> bill, the biggest risk here at lpl for our 2014 outlook for stocks, which is 10% to 15% gain, would be if the economy does not accelerate. we decelerate on the economy, that more than any other policy is probably the biggest risk to the forecast. >> even though as larry is saying the fed may decide to turn around and stop tapering, perhaps even increase the size of its balance sheet? >> i think the market pretty well has priced in that the fed is through with tapering and
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done with quan tay tiff easing by the end of the year. i think the market has that priced in. the pace of that might impact when you get a pullback, but i think the market is comfortable now with the fed coming back off the quantitative easing but focusing more on the forward guidance which they indicated pretty well at the december meeting. >> gentlemen, thank you. have a good weekend. >> 20 minutes left to go before the close. the dow still negative by 13 points. the other indexes are slightly positive. we'll see what happens in the next few minutes. it was this time yesterday it was all governor chris christie all the time. bridgegate as we're calling it now. still the talk of the country and the impact on the new jersey governor's possible presidential ambitions. later david gregory joins "the closing bell" to discuss the implications. today's main event. in one corner it's a titleholder of tech. in the other a fighter for financials. a heavyweight sector bout coming
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up next between dom chu and seema mody. we'll be right back. she keeps you on your toes.
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ask your doctor about experiencing cialis for daily use and a free 30-tablet trial. i'm bethand i'm michelle. and we own the paper cottage. it's a stationery and gifts store. anything we purchase for the paper cottage goes on our ink card. so you can manage your business expenses and access them online instantly with the game changing app from ink. we didn't get into business to spend time managing receipts, that's why we have ink. we like being in business because we like being creative, we like interacting with people. so you have time to focus on the things you love. ink from chase. so you can. welcome back. the financial sector significantly outper
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fortunatelied the s&p 500 last year. the tech sector, not so much. those trends have so far continued in 2014. >> let's talk about it. seema mody says tech is about to take off while dominic chu believes the financials will continue their winning ways. >> we're going to start on why the street is bullish in tech. i.t. spending which has been at a multiyear low for quite some time is expected to rise. second, strong balance sheets and cash flow analysts say gave large tech cap the ability to return cash to shareholders. they one of the lowest -- they have plenty of room to raise dividends and deploy excess cash into buybacks. >> let's talk about the strong balance sheets. it's going to be with the banks. whether it be because of regulators or of their own free will and volition. banks are getting better about what they have in terms of
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capital. those balance sheets are getting stronger. credit quality is improving. bob doll said, yeah, there's a mix of headwinds and tailwinds for financials but a couple of the tailwinds are valuation based. take a look at the price to earnings ratio for the financial sector. trades at 14 times earnings. compare that with the technology and s&p 500 overall. they're trading at 17 times, so from a strict valuation basis, you can say that financials are undervalued compared to technology. >> okay. valuations make sense but as the global growth story improfessve investors may be able to pay up for tech. approximately 60% of its sales from overseas while financials, take a look at this, dom, around 20%. that's b of a is more bullish on tech over financials because it can profit from acceleration in economic growth. it's the global growth story. >> let's talk about growth as
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well. one thing i'm looking at is the yield curve and specifically what's happening with the long end, the 10 and 30-year yields. look at this. yields used to be around 1.5%. they're all the way up to where they are right now, nearly 3%. now, when banks start to be able to borrow at short-term rates that are very low because the fed is keeping them there and lend all the way out, they're almost zero right now, and lend out all the way towards the 5, 10, 30 year era, if you will, that yield curve, that net interest margin, if you will, is a big profit driver for banks that specialize in commercial lending. so big regional banks, the one who specialize? just commercial lending, they may benefit. that's the reason why in a raising rate environment, that could be a big deal. for now those financials may catch a tailwind if interest rates keep rising. >> that's interesting because even tech is favored to outperform in a rising rate environment. kelly and bill, tell us who won. you never give us the winner. >> we're waiting for a lot more
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of them. >> like picking your favorite child, we're not going to do that. thanks. see you later. it's like you and me in makeup. >> we have 13 minutes before the closing bell. the s&p and nasdaq is slightly positive. it's chevron and united health that's weighing on the blue chips. >> the beatles, the surviving members, paul and ringo, are mulling a possible reunion mini concert on "late night with david letterman." we want to know your thoughts on the fab two. who should round out the beatles band? airplane clapton, julien lennon? tweet us your suggestions and we'll share them later on "the closing bell." life inspires your trading. tdd#: 1-800-345-2550 where others see fads...
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welcome back. nine minutes left in the trading session here. the dow is down 20 points off the lows of the session. holding its own, but look at the nasdaq and sa&p, they're tradin higher. we have david darst who by the
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way during the commercial gave me a whole investment strategy seminar here. you have got it laid out for this year. you still, for example, want to stay with japan which had such a spectacular year last year. >> if there's any sell-off in japan, bill, we would buy that. we think japan should be overweight europe, which is showing slight signs of improvement. so overweight europe and japan. be equal weight in the united states with an emphasis again on health care. also technology. in emerging markets it's not time yet. you need structural reform. you need progress on this next wave of the emerging markets emerging. in the bond area, you want to basically be underweight in investment grade. that's your 7 and 10 and 20-year bonds. you want to be underweight in emerging market debt, and you want to be underweight in inflation index securities. in the bond area, you want to be overweight short duration.
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let those rates rise further and you want to be overweight in high yield. with an emphasis on short maturity bonds. fourth quarter is going to come in closer to 3% now. >> even with the jobs number we got today? >> that jobs number -- >> what was that about? >> it was all about weather. >> you think it was? >> a lot of it was construction. it was all about the late thanksgiving, okay? there was less real hiring there than temporary. so this is an aberration, and use any weakness in the first quarter to add to stocks. >> what did you think of the market's response to that jobs number? >> very positive. very positive. >> you didn't get the sell-off you would expect. >> leon cooperman an old friend from goldman sachs' days says when the market does well and responds to disappointing news, it wants to go higher. that's the interpretation i put
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on this today. >> we've had such a lackluster beginning to this year. last year was just a spectacular year overall. from the get-go. this year nothing. >> those first five trading days, which are down, as you know, they have a 75% to 80% accuracy ratio in terms of predictpr predicting the whole year. even higher is the first full month of january. it's possible to give a false signal, but i think it's -- the party was so strong, people are looking to see what the fed is going to do. you have two meetings. you have january 29th-30th coming up and march 19th-20th. tonight forget the big positives. manufacturing, monetary stimulus, house prices, and the consumer. now, next tuesday, this coming week, you're going to get the retail sales. >> yes. >> and the consensus is looking
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for a weak number. so that i think might let the market pull back some further and you want to judiciously and appropriately add a little stock. >> you packed in ten minutes of information in that four minutes. that was amazing. >> nobody does it like you, bill. >> david, thank you. have a good weekend. we'll see how things shake out on this friday and for the first time ever, the majority of members of congress have a net worth of more than $1 million. this as lawmakers debate unemployment benefits and the minimum wage. but our robert frank says hold off on being outraged about that because $1 million isn't what it used to be and it isn't a lot of money. he defends that controversial position coming up later on "the closing bell." you're watching cnbc, first in business worldwide. welcome back. how is everything?
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♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. inside the two-minute mark. you would think with that very bad jobs report this morning, we've had a big sell-off. no. look at this. this is the trading pattern we've seen all week. just minor sell-off, sideways the rest of the day. we're going out about 20 points lower for the dow. where you did see a big move and where you would expect it under normal circumstances was in the long end of the yield curve. look at the yield on the ten-year collapsing down this morning, down 10 basis points in
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one session to 2.86%. the stock of the day, everybody has talking about this biotechnology company, intercept, with this drug that can help with particular kinds of liver disease. up 58% today alone or $160 to $436 per share. i'm with the dean of the trading floor, mr. cashin himself. what did you make of the market response to the jobs number this morning? >> well, i think it was a little confusing at first, but it's really the dow that is down. >> the rest of the market is higher. >> rest of the market is actually higher here, so i think it's a decent response. bullard from the fed says he thinks things are going to get revised. so we'll wait and see. so next week will tell us a great deal. we'll have some fed speak and we'll move from there. >> financials start to report their earnings as well as other industries but we've got our first full week in the books. >> not bad. >> what grade do you give it? >> i would give it a b minus.
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>> all right. thanks, art. have a good weekend. that's the first hour of "the closing bell." we are going out with the dow down 9 points but the s&p and nasdaq finishing higher. stick around, a lot more to come this second hour of the "the closing bell." wait until you see who is on the panel this coming hour with kelly evans. have a good weekend, kelly. >> thank you, bill. and welcome to "the closing bell." i'm kelly evans on this friday. rounding out the first full trading week of the year. we've had a lot of red arrows to start off this january. here is how we're finishing a mixed day an wall street after that big jobs report this morning. the dow off 8 points. the nasdaq and s&p closing higher. the nasdaq by about 18, the s&p 500 adding about 4. let's get straight to it with today's panel. carter garcia, our very own morgan brennan and robert frank and dan greenhouse. welcome to all of you. it is great to have you here. dan, i want to start off talking
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about the dow. it looks like weakness from chevron, united health. you mentioned and i loved this yesterday, if it weren't for a rally at integrated oil yesterday, we would have been down in six out of seven sessions since 1991. how weak is this market? >> it's weak in the sense it's not going up. on the other hand, the decline so far has been relatively modest to say the least. in the context of what happened at the end of last year, the strong rally we saw in december, not just december but the fourth quarter as a whole, really i'm not too concerned about this. there's a lot made about january's first five days being predictive. i disagree with that. january as a whole is much more important and even then it's questionable. >> do you think we've learned anything from the fact that the market hasn't performed better. it hasn't just been the first day, wasn't just the second day. it's consistent there's not a lot of strength here. >> again, i'm not too worried and importantly we are right in the beginning of earnings season and i think when you get into next week and you start hearing
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from companies not just about how the fourth quarter went but how they're feeling about and seeing the beginning of the next year, i think that's going to be the tailwind to ultimately begin the next move higher. >> cardiff, you look at the 10-year, it went down significantly. if everyone is dismissing the jobs report saying it's just wlf, why did the treasury market freak out? >> i have no idea. look, i interpreted what happened last year both in debt and equity markets as having effectively pulled forward in time by expectations of what would happen with monetary policy which is why you have the die skrer jens between the sluggish growth and the gains in equity and high yield. this year the dynamic if anything may have flipped in the sense that sort of prospects for asset markets are a lot more unclear. it's hard to find obvious metrics in this pricing. i think the conditions for economic growth are better than they have been for some time and, yes, i'm including this morning's job report. i'm not saying --
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>> so you don't think it's a game changer. morgan? >> i think we need to wait and see what happens next month. it hasn't fit the pattern with the rest of the data we've seen. the construction numbers very telling. obviously pointing to weather. going back to the treasuries for a minute, another interesting thing is the fact we saw things like real estate investment, trusts, housing, home builder, utilities start to rally. >> they were loving it. i wonder what that means then. do we sort of look at today and extrapolate or kind of look forward into the year and say maybe it does mean a second wind for some of these sectors or do we say, no, let's wait until monday. we'll sort of work through this. >> what was so surprising and encouraging to me about today was the primary conversation about the jobs number was about the economy. >> right. >> the fed was number two. >> okay. >> and that just tells us how far we've come from the withdrawal from the fed drugs that the primary number one conversation when there's a jobs report is not immediately, what
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does that mean about the fed? it is what's that mean for the economy? >> but do you think it's that much of a game-changer, dan? >> no, i don't think it's a game-changer. i'm one of the few strategists and economists on wall street that thinks it means more likely than not, although not assured, the fed does not reduce their asset purchase program by another $10 billion automatically in january. >> really? >> my first inclination is why not wait? what's the hurry? what's the rush? >> because if they wait now, it will be more of a deviation in policy -- it will be more of a policy change, won't it? >> the only point i want to make before robert jumps in is for two years now wall street has banked on the fed doing less rather than more. >> right. >> i'm not so sure that we don't have two years of evidence that says they want to do more rather than less. >> and, robert? >> i think greg put it well today when he said maybe this makes them think we were a
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little quick bauf toff the bloc. i think they're going to keep pushing ahead and they're probably going to reiterate, look, we're going to keep interest rates low for a long time. they're coming against that 6.5% target and they're going -- that's the main thing ther going to have to communicate. we may hit that and keep going low. >> but they added that extra qualitative language. they didn't change the threshold explicitly. that's still on the table but bernanke said he didn't think it would be more a couple more meetings. there's a good chance they'll wait until march. >> how high do you think the bar is for them to do something -- >> for another change? >> -- for them to do something different than another $10 billion taper next wim. >> it's hard to say. if you look at the evolution of policy, it's been moving in that state contingent direction. away from calendar based or the more vague guidance they provided in the past. i think on forward guidance, that's the more interesting conversation. >> want to bring guy adami into
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this conversation to get an early jump on the "fast money" conversation. guy, what about you? you look at the market today, the fact that we've actually got a positive close to the s&p 500 to the jobs news. is this despite what robert was saying about the fed or were there other things jumping out here? >> let's not get crazy about the s&p move here. i think the week was interesting. you talked about it earlier. the jobs number. add 200,000 to that number, whatever. you know what? if you think about it, all we've done is recalibrate what good is. these numbers are lousy given the backdrop of where we've been and what we've done over the last five years. the fact that we can even say quarter of a million, 300,000 is a good number to me is ridiculous given what's transpired. so i think the real economy and the market are probably have as wide a chasm now as they may ever have had before. i'm thinking, look, the market can still go higher. i think we need to see 1750 in the s&p. there's tremendous trading opportunities but let's not
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confuse ourselves. i think the economy is lousy. >> guy, it's dan. let me jump in. i want to add to something you just said. i have to disagree. in the context of where we've been not for the last 40 or 50 years but where we've been for the last 10 or 15 years, 200,000 to 300,000 jobs created per month is all we're going to do and i don't think that's awesome, certainly not in the context of the decline we had in '08, but we really shouldn't be shooting anymore for 400,000 or 500,000 jobs -- >> it's not the late '90s, in other words. >> it's infrequent at best. >> dan, fair enough. you make a great point. let me ask you this. if companies haven't hired over the last four years when corporate balance sheets, you saw said, it better than they've ever been, and when their stocks have gone twofold, three fold sometimes, when are they going to hire? like what's the backdrop -- >> demand. you have to get to that paint p point. that's what 2014 could be.
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you see that nominal gdp story. companies don't hire because they're extremely profitable. they hire when they have to to meet demand. >> especially with all the pops worried about what will happen with profit margins. they're going to need expectations of higher sales to offset that. but even still, we're going into this year expecting less fiscal drag. the housing market is starting to show signs of healthy activity. manufacturing, the trade numbers earlier this week looked pretty good. so there are reasons to be hopeful. that said, there are reasons to be humble about this. we've had four straight false starts in the winter the last few years. i don't want to get ahead of myself but there are reasons for optimism. >> everyone is afraid to say morning in america now. >> of course, the other thing to keep an eye on is that participation rate. 62.8%. it's the lowest since, what, 1978. i think that's troublesome as well. i think that should be an even bigger part of the discussion right now. >> guy, when you look into next week, what are you positioning for, retail sales report,
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earnings? >> i think it's absolutely earnings. you look at some of the retailers that have missed. remember we talked about this last week. i said to you companies that miss are going to get punished now more so than ever and look at some of the companies that have gotten punished on the retail side. absolutely. i also said to you, i said to you, i said, kelly evans, mark my words, this time next week cellgene will be trading with a 170 handle. where did it trade yesterday? >> what's your point, guy? >> my point is -- look at your google machine, trading 171. great trading opportunities. i think we need to trade down to 1750 in the s&p. probably won't happen next week but i think earnings are first and foremost on everybody's thoughts. >> guy, quick question kind of related. intercept. the biotech name. every person in this country i feel like is going to be looking up how do i play the lottery and win like i could have with a company that priced its ipo at $15 at the end of the 2012 and just had a merrill price target
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in the 800s. >> pretty interesting, right? i think their name is out there. this is not a recommendation but there are lottery tickets out there. and the first one that comes to mind for me and i hopefully the market cap is such that i can even utter this is a name like exact science. there are names out there. but, again, cell gene, there are analysts saying revlamid could be the next lipitor. at $167 that stock is way too cheap. >> any position, guy? >> i would disclose. i have been doing this a long time. >> the rest of the panel sticks around with me. guy, there will be plenty much more of him coming up at 5:00 on "fast money." straight ahead, what will the fed do now that december's job numbers showed a hiccup? up next, one person says he'll reverse direction and add more
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stimulus. jeff is here to make his case. and up to 110 million target customers may have had their personal information stolen. the breach is worse than anyone suspected when target stated 40 million people were victims. coming up, i'll speak with a payment system specialist will what retailers, bank, and credit card companies need to do to beef up security. why has america been left behind in this regard? stay with us. w we'll be right back. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.
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welcome back. so not a great week for stocks in the markets first full trading week of the year. dominic chu sizing up some of the winners and losers for us. >> once again we got to talk about it, the big winner this week or any week for that mat ser intercept pharmaceuticals. it's staggering. it rise 550%. it's got me all tongue tied. this on news it's treatment for differ disease was so successful it stopped a midstage trial. also a good week for another company in the health care sector, forest labs. then constellation brands moving higher after reporting better than expected quarterly profits and sales while raising its
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fiscal 2014 guidance. on the downside, bed, bath & beyond posted weaker than expected third quarter earnings and cut fourth quarter guidance. a tough week for twitter as well. began coverage with an under. lots of big stories in this first foul week of trading. back over to you. >> lots to look forward to next week. have a great weekend. jeff cox wrote a 2014 prediction ways for cnbc saying the fed will reverse course on scaling back stimulus. he says today's jobs report will make that prediction come through. he jones me along with john hilsenrath from "the wall street journal." welcome to you both. >> hey, kelly. >> jeff, first of all, we actually heard dan greenhouse saying he thinks the fed in january will pause and hold the size of the taper at $10 billion. you're saying they're going to reverse course and are you saying that next time?
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>> i don't necessarily think this happens in january, kelly, but my base case for the year is three things for the fed and one is, yes, that untaper. i believe that today's report shows that the data going forward is going to be shaky. it's going to be a little rickety. i do not believe, i do not see any signs in the labor market that we've achieved that escape velocity. therefore, two other things i think very important going to happen this year with the fed. number two, i think very soon, maybe in january, that they will move the goalposts as far as their unemployment targets go. i think that 6.5% rate where they said they're going to maybe consider raising interest rates, that gets moved back to 6.0% or 5.5%, and also we're going to see a heightened debate on the fed over this so-called forward guidance where they can use language to telegraph their intentions for rates. stanley fisher coming on as prospective vice chairman, he's not in favor with that type of thing. i think it will put him at odds
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with janet yellin and set up an interesting set of circumstances. >> john hilsenrath, what say you? >> well, to tell you the truth, i would need to hear more about jeff's forecast to say whether it's going to come true or not because really we know what the fed's baseline case is. they expect the unemployment rate to come down. they expect growth of 3% or more, and they expect inflation to gradually increase towards 2%. those are their three main markers, and if those things happen, they say they're going to wind down the bond buying program to zero by the end of the year, and i think that's really what we have to watch. and that's the question we have to ask every time we see reports like today, is the fed on target for hitting these growth forecasts -- >> i think -- >> jeff, hang on one second. jon, so just to be clear, what you're saying is that today's report, even though it was a disappointment, is not enough to
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change that fundamental picture about job growth, about the unemployment rate importantly, and about the economy doing better this year. >> yeah. i think they want to see more data before any of -- before they feel any of that is confirmed, and they've got to, you know, alter a course to took them all of 2013 to lay out. this is a very inertial institution. i think they have a plan and they're going to stick to it unless they're convinced otherwise. >> i . >> go ahead, jeff. >> i know you reported fed is on this unreversible course. i think they made it clear it's data dependent pmp if you look at the minutes that just came out, that he is no mention in there that we're going to cut $10 billion per meeting. bernanke mentioned it in the news conference, sure, but i do not think there's that level of certitude on the fed of really which way to go with qe, and i
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don't think -- i think today again this data point tells you that in the economy right now, i don't think this shows them enough. i don't think that they expected the unemployment rate to drop to 6.7% on the back of a 30-some year low in labor force participation. >> i would just say that -- i agree with a lot of what you said, but the most important thing you just said was this data point. it was just one data point. it's certainly -- >> it's the data point they watch very, very closely. >> of course. it's certainly data dependent they made that very clear but the chairman and his post-meeting press conference laid out a course that the fed expects to stay on. i mean, i think it certainly is not set in stone. they've said that but they got to see how things play out. i just don't think one data point is going to be enough to change people's views. it took them all of 2013 to get to the point they were at. yeah. >> jon, why hasn't the fed come
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out and said the 6.5% unemployment rate isn't the most important thing when it knows and this report is further evidence, that there are changing dynamics that may make that rate less relevant to how the economy is doing. >> i think they have said that over and over again. the key point in their statement in december was that even after the unemployment rate gets to 6.5%, they expect to keep rates low well past the moment when the unemployment rate gets to 6.5%. so i think they have been saying over and over again -- it's kind of like, you know, 6.5% is kind of like the starter gun. that's when they start having the debate internally. i think this report is a real problem for them today because they weren't expecting to even have to have the conversation until the second half of this year, and now the gun might go off in february. it's a real problem for them. >> i think big picture this just points to how much of a box that the fed may well have gotten themselves into with trying to
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do all this monetary engineering that we've done over the last five years. they don't really know where it's going. i think it's creating some confusion and some uncertainty in the market which is the bottom line is how did this all affect investors. and i think from an investors' standpoint, it's going to be a very confusing year when you have all these different cross currents going on. >> jon and jeff -- >> that gets to one point which is that they don't want to add to the confusion by moving the goalposts and start changing these numbers. i think they're really in a stay the course kind of mode. >> understandably. >> i disagree with that because -- >> we'll continue it next week, how about that? >> this is a fake number. i think everybody knows this drop is not real -- >> but, jeff, if you're saying it's a fake number then why is this a game-changer for them? >> i think they're looking for a 6.5% number in the unemployment rate under normal circumstances. these are not normal circumstances. i don't think this is factored into the forecast. >> we got to go. guys, thank you so much for being here. appreciate it. have a good one.
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>> all right. >> we'll continue the discussion next time. target stock taking another hit today. hackers may have gotten a lot more data than originally reported. did you know europe and canada and much of the civilized world have better card security than we do? why is that? we'll ask that question coming up.
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retail giant saying a whopping 110 million customers may have been hit by the recent data breach. that's millions more than first reported. the stock slid as mentioned today. courtney reagan joining us now. pretty shocking stuff here, court. 110 million? >> it's pretty unbelievable, kelly. we'll go through how they got the numbers. target expanding both the scale and scope of the data breach updating financial forecasts, too. during the investigation into the data breach, target has discovered that 70 million target shoppers may have had names, e-mails, addresses, and phone numbers stolen during the same period of time, november 27th to december 15th. this $70 million is in addition to the 40 million target shoppers that may have had credit and detective card information stolen making up to 110 million shoppers impacted. the company expects some overlap between the two groups but they can't quantify the overlap at this time. they say shoppers will have zero liability for the cost of any fraudulent charges.
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they're offering a year of free credit monitoring and identity theft protection for all shoppers. further, the company has lowered its nongap q4 guidance range to 4%. they did this because the sales were stronger than expected before the data breach was announced and then they meaningfully fell off since that point. because of that, target lowered those forecasts. several analysts are taking down the earnings estimates. they are also concerned about the impact to the brand, but keep in mind we have legal costs to consider. we have i.t. and other technology fixes to consider. we don't exactly know the fallout here but like you said, the stock only fell 1% today and it's shaken off a lot of bad news in the past. so it's a little hard to say. this is a really big breach. it's hard to quantify this magnitude. >> investors give them a little bit of the benefit of the doubt but this one does continue to grow. thank you. my next guest saying the damage with target's data breach could have been much less.
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if that company were following card standards across europe and canada. he's rush taggert. thanks for being here. >> you're welcome. thank you. >> and, look, this might be news to a lot of people in this country who haven't experienced that other system overseas. how did the u.s. get left behind? >> it's really all about cost and time. money, who is going to pay. you know, the brands are making a lot of money, visa mastercard, we saw them doing very well today. the merchants are reluctant to spend on new terminals. so it's been stuck there for years. >> but is this starting to happen? is there going to come a day because already some companies offer chip and pin technology to their card users here in the u.s. how quickly is this going to change? will target push them more towards wider adoption?
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>> i certainly believe so. visa has a date of october next year when all merchants need to be able to accept chip and pin cards, chip and pin payments, and those merchants will also suffer penalties if they're not capable of doing so. so i believe we will see widespread adoption in the next 18 months. >> okay. rush, i want to bring the panel in on this. robert frank, you may have had some experience. when you're overseas in a place like london, for example, and you're paying the bill at a restaurant, what happens? they come up to you with the card reader, you punch in your card, you enter the pin number. that sounds like it's coming now to the u.s. >> you would hope. i guess i have a question for rush. do we know that chip and pin technology would have avoided the problem that target had with this disclosure of customer data? because some people describe this as a cyber hacking issue. some people as a magnet reader issue. do we really know whether this could have happened with chip and pin technology or could have
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been avoided? >> chip and pin would not have stopped the breach, but the data that was stolen would have been much less useful. >> explain that a little bit, rush. >> well, it would have all been encrypted, first of all. today's mag stripe credit card technology in the united states is equivalent to leaving the front door of your house wide open. it is so easy to copy. it is so easy to counterfeit a card. it is just you're leaving the front door open. what chip and pin does, it puts the lock back on the door. >> you know, one of the questions that target answered today was, how did you get all this e-mails, addresses for your clients? all they said is we collect that as part of the course of business. so it didn't necessarily come from these cards. it may have just been how good they are at snooping on their customers both online and when they're in the store. so don't sotores have so much
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information they can get it regardless of whether it's on the card or not? >> correct, cards do not have e-mail dreaddresses, do not hav street addresses. this additional data had to have come from another source. >> exactly. >> i want to know what happens if we all have to memorize another pin number. >> you find another startup that's willing to put it all together. >> i do believe silicon valley will help us find an answer here. rush, last question. because this is an important point. it sounds like what you're saying is this should have happened in the u.s. with regard to the chip and pin system, but that wouldn't necessarily have changed the outcome here of this data breach. so that does suggest that it's the retailers themselves that are going to come under pressure to beef up their security systems. >> well, yes, and, please, let me clarify. chip and pin -- the breach could have happened, but the cards themselves could not have been counterfeited and reused so there would have been no impact on fraud. so that's what chip and pin does.
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it incrypted the data, protects the data. doesn't stop the hackers getting into systems. that's a different problem. >> all right. rush, thank you so much for being here. have a great weekend. >> same to you. thank you very much. >> thanks. don't miss becky quick's exclusive interview with target's ceo gregg steinhafel happening monday morning prit and early, 6:00 a.m. on "squawk box." there's a new millionaires club and it's on capitol hill. more than half of congress made the cut. our wealth editor robert frank says hold off on your outrage. $1 million isn't what it used to be. coming up first, the bridgegate scandal involving governor chris christie. i'll talk to "meet the press" moderator david gregory for the latest and what they're saying about it in washington, d.c. we'll be right back. ♪ yeah, he's clean, boss. now listen to me, duck. i have an associate that met with, uh, an unfortunate accident. while he's been incapacitated,
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welcome back. earlier this afternoon new jersey lawmakers releasing nearly 1,000 more pages of documents from the probe into chris christie collection to the george washington bridge traffic snarls in september. eamon javers, was there anything in there contradicting what the governor said yesterday? >> so far no. we haven't seen anything in there, but, of course, as you
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say, there's a lot to go through here. we've only had a couple hours. we've got a lot of people poring over these documents to see what we can see. what you learn is about the web of relationships between the folks on the new jersey side of the george washington bridge and the folks on the new york side of george washington bridge, which obviously connects those two different states. and also among the chris christie plel aiolitical aides were involved here. i want to highlight one exchange. this was a e-mail that went out the week of the traffic closing. it's a blastering e-mail from patrick foy, a new york side official here. he calls this in a very long e-mail to a variety of folks involved, he calls this lane closure a hasty and ill advised decision. he said it resulted in delays to emergency vehicles. it had an adverse impact on the economy. he said he will not allow travel delays on yom kippur and he said he believes that this action
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violated the federal law and possibly state law as well here. so that gives you a sense of the level of outrage involved by some of the officials at least during the course of this traffic shutdown. what we haven't seen yet though is anything, as you say, to contradict what chris christie said yesterday, that he was entirely out of the loop and unaware of this and that he said yesterday he finds all of this unacceptable and he took action to discipline those aides who were involved. >> one of his appointees did take the fifth yesterday it should be noted. thank you so much for the details there. this skandal capturing the nation's attention. it's a white house story in washington, d.c., where many think chris christie has his eye on the white house. let's bring in david gregory from "meet the press." >> tell us how this is playing in washington. >> this is a big blow because even if christie is not directly tied to this, the fact there are inquiries under way, the way
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there's damage that's been done a has a lot of democrats mobilizing and a little more quietly republicans who want to take christie on who have been critics of him feeling vindic e vindicated in some way. the big question is cultural which is what is it about christie as a leader or about his personality that would have him with people this close to him doing something this petty and this abusive? that's going to be the question about the kind of leadership. these are people he's known for a long time who he has now dismissed who are part of this. that's part of the question. if you look at what's happened yesterday, you look at the press conference, this act of contrition on his part, both republicans and democrats i talked to feel like he did a pretty good job, he bought himself some space and some time, but there's no question that his personality and leadership which were always an issue are certainly going to be put to the test as he gets closer to a decision to run. >> you know, david, one of the things that people are talking about up here is whether this plays to the kind of if you liked chris christie, this doesn't necessarily make you
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dislike him. if you disliked him, it's maybe for the same reason. what you said though about the gop is interesting to me. this is a key moment in the fund-raising cycle. we're starting to see a lot of organization. there are a lot of people unhappy on the gop donor side by the fact that their investment dollars didn't generate a better return last cycle. how does this affect chris christie's fund-raising hopes if any? >> we don't know yet because it's still early days and we're still a ways off. the reality is that a lot of these big money donors in the party were much more inclined to write a check to chris christie who was heavily courted you will recall even when it looked like romney was going to be the nominee. they'd rather write a check to him, and, you know, you're right in saying that for those who liked him, they still like him. they saw how he handled yesterday and they would still very much be in his corner because he is what you see, what you get. he's a plain-spoken guy. the problem is a lot of what his personality, his gruffness, you know, whether he's a bully or
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not, he says he's not, it's a matter of intet prosecutortatrp. that style will be looked at through a lens. is it more than just talking tough to people who challenge him in a public setting? was there a kind of rogue element of his operation where, you know, you would engage in this kind of vindictive politics? that would be the new question area. >> is this going to be a focus of the show snuunday? >> it's certainly go going to be a big focus. it's also about dirty politics. just how common is it? we get kind of an ugly view of it. this kind of thing happens a lot. it is part of the rough and tumble of politics whether people choose to see it or not. >> and who is coming up to discuss this with you this weekend? >> well, among our guests is going to be the chairman of the republican party at an important time. the closest you're going to find to a surrogate for chris christie is the chairman of the party nationally who has
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defended him but who has to be looking a the this and be quite nervous. this was an early front runner 2016 to see going through these difficult days. >> all right. such an interesting story. david, one, of course, that hits home for a lot of us here as well. thank you so much for being here. you can be sure to catch more of david gregory on nbc's "meet the press" this sunday. check your local listings for when and where. as temperatures rise across the country, our website is heating up, too. don't miss the hot list coming up next. plus, we want to know what you think. who should round out the possible beatles reunion. we'll put your thoughts on air. don't go anywhere. [ male announcer ] we could say a lot about the most track-tested is ever... but the truth is... we don't have to. the experts have spoken. now it's your move. ♪
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it's a long story. well, not having branches let's us give you great rates and service. i'd like that. a new way to bank. a better way to save. ally bank. your money needs an ally. tgif. right now hot list already burning up. allen wastler, what's happening on the website? >> i have a good leader because it has two of the favorite subjects with our readers, housing and retirement. taking a look at the booming housing marment fket for retiri boomers. here is a fun fact. every day you have 10,000 people turning 65, and this is going to happen all the way to 2030 experts think. >> wow. >> so what that's doing to the housing market a lot of people say, hey, i'm getting older, why am i in a big house where i have to shovel snow? they're moving into condos and apartments and that's changing housing markets around the
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country. this is a deep dive into that. it's been acquiring readers at a rate of 60 read a minute which is pretty good for a friday afternoon. >> yes, it is. >> it also speaks about our demographic a little bit. but anyway. the second one on our hot list today is a write up from jeff cox. he's taken a look at one bank that's sort of bucking the trend of other banks and saying 2014 actually going to be kind of flattish. it's deutscheba bank. they foresee a return to normal which will tamp markets down instead of goosing it. a lot of people are interested in that one. finally, the third one, this is kind of unfortunate, but target. that's been a big issue with our readers all -- you were just talking about it earlier in the show. but basically we have a wrap up from javier david saying it could be up to 110 million -- >> do you get a sense from the comments there are a lot of people affected by this looking for help and solutions?
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>> yes, i do. the service pieces we put up and every time we have more developments in this, we have more links to service pieces telling people what they should do. >> i wanted to see what our panel thinks about the stories. the one that catches my attention is 10,000 people a day retiring until 2030. >> i look at the whole debate of whether higher tacks drive out the wealthy from state. we see high net worth old retirees from new york, new jersey, moving to sunshine states which have lower tacks. the argument is it's taxes that are driving them. this tells me they're just moving for sun. they just want to get warm and they're retiring. i think you can't discount the importance of that when people are moving. >> i think this also speaks to the fact that we are starting to see this recovery in the housing market. you had so many people in certain markets that were so underwater in the houses that it
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made sense for them to stay put. now we're starting to see more of that. >> here is what i want to know, it goes to a cardiff obsession which is household formation. are people just looking for a different kind of housing to complement what they might already have? >> i think the pressure on household formation will come from young people but this is still an important story. if it turns out this cyclical uptick in housing is partly driven by older people moving into multifamily units instead of single family units, it has a smaller amplification effect on the economy. that's something to look at the long -- >> but somebody still has to build the multifamily units. >> absolutely. in terms of longer term issues, it might be something to feed into one of the stagnationist theories. >> secular stagnation to use my producer's favorite term. you may want to call it the mallair millionaire's club.
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and who should round out the proposed beatles reunion at the ed sullivan theater where the original group performed 50 years ago. paul and ringo are reportedly close to agreeing on a show. your thoughts on air when we come back. . tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading. [ male announcer ] this is the story of the little room
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welcome back. so more than ever the 1% is representing the rest of us according to the center for responsive politics. more than half of according to the center for response politics, more than half of congressional lawmakers have a net worth of $1 million. 268 are worth at least that much. the median for house members are 896,000. for senators, $2.5 million. it's caused some predictable outrage. you're saying we shouldn't be upset about this. >> no, the obvious reaction to the headline that congress is now dedicated by millionaires saying look, they are the policy butlers for the each. but, when you break it down, let's say you is a house worth
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$300,000 or $400,000, let's say you have some cars, maybe a boat, you don't -- you're getting up to $1 million without being very rich, again, that's a total net worth of $1 million. 10 to 15% of americans are in that category. you're talking about something like the 15% or 12% of americans. >> it's more there are so many americans who are nowhere close to that level? >> right but do we want congress -- with do we want congress to be a little better than the rest of americans? a little smarter than the rest of us have better educations? therefore, they're going to be by nature, a little wealthier. we're not talking about people suddenly worth $30 million or $50 million in congress, not
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even a billionaire, he's only worth $400 million. >> i'm going to explode out of my chair. i reject the premise that somehow wealth equals iq. congress is full of idiots. i reject the idea that somehow being better -- >> i'm not equating. >> you just said, with all due respect, shouldn't we expect congress to be smarter? i reject that. more importantly, also you said, if you've got a couple of cars and boat and house and this and that, people don't have a couple of cars and a boat, man. >> what about a retirement? a retirement account. >> you have a couple of kids and you're putting through college, you're going up hundreds of dollars -- >> in debt. >> but more importantly, there's another trend that's underlining this headline here and that's the fact that a lot -- one of
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the reasons we're seeing more millionaires in congress right now, because in the last two elections we have seen more wealthier people get elected into positions, so in 2010, for example the freshman class of senators that were elected, median income of about $4 million. >> but the other issue is -- >> let me bring some social science into it. there's a juxtaposition between this news and inequality and minimum wage the 50th anniversary of the war on poverty. but increasingly political scientists are starting to study the impact of inequality on lawmaking. what they have shown so far that lawmakers are more responsive to middle income and higher income earners. by the way -- they are less willing to align their views with their constituents. it's bipartisan, too. it's worth wondering whether or not that empathy gap is made
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worse by the fact that the people in congress increasingly resemble their richer constituents. >> you think koch is out of touch because they're wealthier -- >> i think they're out of touch for a lot of reasons. >> and you know the other question, no one is answering here, does being a member of congress make you wealthy? >> that's another -- >> do you need to get in congress. >> we got to work quickly. >> at the end of the day, people vote for them and you get the congress you voted for. >> we're getting some interesting names as beatles standing for a proposed reunion. ringo and paul. we'll share them with you.
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welcome back. beatles reunion, anyone? we want to think who paul mccartney and ringo starr round out the band if they perform at the ed sullivan theater on the david letterman show. beatles reunion also holograms,
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worked for tupac. okay. dan? >> this is not a beatles reunion. it's not. now, listen, you should have david gilmore playing guitar. they have mrid together before. they played together before. >> 2002, 2009. >> it's not a beatles reunion. >> david gilmore should play guitar and elton john on piano. >> anybody else? >> what would be awesome and classy is if the stones showed up. they might outshine them. >> because they're complete. now, i have three ideas here. first one, get a little to help from my friends, joe crocker. another one, oasis the band that wanted to be the next beatles and spice it up and bring youth
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to the beatles with one direction. >> i could see you over there trying not to turn into the hulk. >> one direction -- >> what can we glean from this conversation? >> someone who's great at cover songs, good at the guitar -- jack black. >> the same band basically for about 12 or 13 years. phenomenal live. does the entire beatles catalog. >> a vote for just paul. >> have you seen paul mccartney doing anything live? yes. >> he looks great for like 55. >> any pearls of wisdom you want to leave us with for next week. >> no. >> nothing better than one direction singing beatles songs.
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keep it here. don't miss of that. "fast money" is coming up. melissa lee, it's wwe today. >> it's starting its own online channel. we'll talk to the cfo of wwe. this talk about wrestling, we have wondering if we had wrestling names, what would they be? >> i'll tweet you some suggestions. >> yours, kelly, would be -- drum roll -- lush frost. >> it sounds like a nice paint color. >> over to you guys. >> all right, thanks. "fast money" starts right now. i'm melissa lee. here's tonight's lineup. target's credit card breech gets worse. a buying opportunity for investors?

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