tv Countdown to the Closing Bell FOX Business December 31, 2013 3:00pm-4:01pm EST
this move. the stock is certainly an interesting story. let's get the charts. hewlett-packard is that a strong year. you can see that on the screen. it is through layoffs of the company, some of the cost-cutting measures that went through. the investment stories. car rental giant herds adopting after seeing an unusual and its substantial activity. one report said that the hedge fund took a significant stake. that is confirmation of course of the next couple of hours and will bring it to you right here on fox business. for more on exactly how our shares reacted, let's bring in lauren. it's always interesting when you have big moves like this the the the the year. maybe these guys think the financial press is not watching.
>> absolutely. recently are watching. to go find it. >> reporter: its been a big winner of day. also helping out, the price target increase. you're looking at that. up 9%, but 73 of 74%. looking at a couple of small changes that have happened with the stock. the cfo brought in the cfo of hilton, it has a lot of people buzzing. they also spent much of the year integrating dollar thrifty into the business. so the people want to see what they had in mind. >> thank you so much. we have been talking about this throughout the trading day on fox business, a great year for stocks.
2013 a great year for stocks. you may be wondering if they are popping champagne this afternoon. down on the new york stock exchange, at the cme group and joining us is our very own sandra smith who herself has had a great year. first to you, your round out a year late 2013, 26% gain for the dow, do you celebrate, you put it away and think about next year, how are you feeling about today? >> not smart for those of us lucky enough to come in long, for whatever reason they did not want to touch a hot stove with the memories of 2008, 2009. 2009 still lingering for some folks. all in all it has been a great year.
i don't think it makes a whole lot of sense, but it is not up to me to question it basically to take it, the smartest thing we have done for our customers and ourselves is basically get to hang on and not do anything, so for us it has been a pretty good year. >> you make a good point, you don't want to fight the tape. we are on a low volume day but there has not been a major selloff. you have the fear on a day like today, you're going to get high volatility. we have not had that. isn't that a positive sign for you, teddy? >> 20/20 hindsight, but every selloff has been nothing but a buying opportunity. the trend is your friend, and until something changes, something out there is going to change. the big risk for all of us is
the economy heats up and the interest rate starts to move higher. that is the big unknown going into 2014, changing the dynamics in the market. this no reason to assume we cannot continue on the upward buying. liz: i want to take it over to the cme. looking at the fed, what the fed has done this year, they will begin to taper. gold has not been a performer of the year. as we going to next year, that is a sad story for all the goll bugs out there. many had bad calls for 2013. what do you say to the people who are still holding onto gold? >> they have lost all of their stories. they lost the story with iran, they lost the story to the middle east. we have gone through everything and nothing propelled gold, it is telling you what it story is.
that means inflation, and inflation is what it doesn't have yet. gold will still have a rough go in 2014, however if the economy starts kicking into gear, if it comes up, if the fed starts worrying the economy is getting hot, that is when they will have their day. gold have a hard time going down anywhere near the same percentage this year as it did last two because it came from the $1800 down to a new low of 1118 level. it'll be hard going forward. cheryl: talk about the gold contract. this past year, i know you have a6> on the floor, what do they say about gold? >> quite simply a lot of folks are talking about everybody got the stock calls for 2013 round
as we entered into this you with a spectacular rally. now the major investment banks and major analysts and investors arecalling for such weakness in commodities maybe they will be the big upset of 2014. a dire situation finishing $1200 per ounce today, the silver was a worse performer than gold. you had major outflows of funds coming out of gold and silver contract and the exchange traded product meant to contract them. maybe as we enter this new year, commodities could outshine everything. if there is major wildcards out there, volatility had been low, complacency in the market that is when everybody starts to wonder something is about to change. cheryl: it is all about the >> it is about the economy. cheryl: i want to take this to
each of you. you mentioned predictions. i have a few promises to myself, 2014, but on the issue of unemployment, we won't have a strong market in 2014. where do you think the employment rate goes next year? >> think employment rate gets better, but i would like to go back the goal of the session. i have never owned a gold stock in my life but we are buying it today. clearly it is the trade going forward, the fed wants inflation, they need inflation, and i think he wants to be long commodities, gold is one of them, lumber. i love the gold trade here. cheryl: really quick, employment for 2014. the unemployment rate, where do you think we will be? >> i don't know, but it is going
down. the economy is slowly getting better. i think overall the economy is going to do better, the interest rate issue is the real potential problem, but if the economy does better, even if we get a selloff as interest rates accelerate, and a selloff will be a buying opportunity. cheryl: hopefully the unemployment rate goes down. the yield up 3%. so much going on with the into the final hour of trading. thank you very much, happy new year, sandra, stick around, i will bother you next hour. thank you. the end of the year celebrations are extending for stocks over to the housing market. home prices rising the fastest rate since 2006 according to the s&p case-shiller home index released today. this is good news the housing market but could rising interest
rates dampen the recovery in the new year? peter barnes washington, d.c., with more. nice to see this data as we round out our year. >> for most families, their home is their single biggest asset. this is good news for them as well, single-family home prices rising two tenths of 1% in october, less than expected according to the case-shiller monthly house index. posting the strongest annualized gain in more than seven years, up 13.6%, the fastest pace of growth since 2006 back in the bubble days. one author says don't expect the pace of increased to continue into 2014, but also don't worry about a new housing bubble. they say monthly numbers show we
are living on borrowed time, and the boom is fading because price increases are getting smaller due to the price run-up's and higher mortgage rates. he projects mid-single digit increases in home prices next year, closer to the historical averages. the strength of housing in 2014 will depend a lot on the fed's efforts to keep mortgage rates down through the quantitative easing bond purchases, which it is now starting to taper so that is an unknown. prices in all 20 cities in the index rose year-over-year led by 27% gain in las vegas and 20% or so gain in three california markets and all four of those markets were hit hard in the housing crisis as you recall, but don't call these increases signs of a bubble. the last bubble was caused in part by subprime and zero down payment mortgages and too much mortgage debt. we don't see a lot of those around much anymore, cheryl. cheryl: peter barnes, no kidding.
good to see those numbers from hard-hit las vegas. hopefully that will continue. peter, thank you. >> happy new year. cheryl: happy new year to your wife, cheryl, who has the best name. investors have a pretty good reason to celebrate as they close out the year, but where are the best going to be next year? we're going to ask a money manager who oversees aliens of assets. brian jacobson coming up in just a moment. and congress letting more than 50 tax breaks expire, millions affected. we will tell you what, if anything, lawmakers can do about it when they come back from their holiday recess, which they have gone on forever. maybe it could just stay a holiday. welcome back. how ieverything?
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it was substantially higher earlier this session, it took a turn to the downside to don't let that upset you because this company announced the ceo will get a big pay raise for 2014. getting a 50% bump in pay. receiving 2 million celery and 2 million in stock options in 2013. now he will get 3 million in salary and million in stock option for his role as a ceo of netflix. this is the best performer of the year for the s&p 500 up over 300%. the separate filing they were dropping the poison hole defense against a hostile takeover of two years ahead of schedule. adopted back in 2012 after a car like on closed in nearly 10% stake in the company. he sold half of his shares october and praise hastings for a deserved confidence among the company's investors. 300% for the year. that is netflix.
record-breaking year for stocks comes to a close what does 2014 have in store for us? now the time for investors to start taking risk. wells fargo chief portfolio strategist $236 billion in assets under management. it is easiest question here, how do you take that money and put it to work in 2014? what do you say? >> what they should be looking at doing is adding risk to their portfolio, getting out of cash and getting into equity or perhaps getting into higher yield fixed income investment when it is appropriate for your situation but for too long people have been thinking for some reassn this market run-up has got to come to an end, things must end badly for some reason it is not going to. what we will see our continued gains. the last four years have been a major market correction getting
us back to normal and back to normal means from this point forward maybe 2014 expect to earn from 7% to 9% if you're investing in a broad index like the s&p 500. cheryl: a lot of the viewers took a beating in 2008. they're still looking to recoup those losses and buil bill out e losses. one of your strategies is free cash flow. can you give me examples? >> i cannot talk about specific stocks but what they should do is forget about the past and look to the future where should you be deploying your money now? some of these sectors where they are generating high cash flows and also growing topline revenue and diversifying the business globally are really in the industrial and the energy sector, those are my three favorite sectors for 2014.
cheryl: energy is one of the more interesting choices because of energy production in the united states, is that why you like the energy sector? speaker that is correct. it will transform the u.s. economy for drawn back manufacturing jobs in the united states making u.s. businesses more competitive globally because when you think about global competition it is not just about low wages and it's about creating things higher value. if we in addition to having more productive workers which we do in the u.s., vellore energy cost i think that'll be a double whammy benefit for u.s. businesses a lot of that is going to come from the energy infrastructure in the united states. cheryl: overall, many of our viewers are still sitting the cash they have saved. over the last three months. what do you say to those investors who are still playing the fixed income space, still very nervous, especially i their
thinking of emerging markets which has been frankly a negative story for 2013. >> if they're sitting in cash and maybe equity market is too risky and it will be going higher as they might get killed in the fixed income market, take reassurance interest rates are not likely to move up materially higher. think about things in terms of one year at a time. interest rates will probably migrate higher as time goes on but what matters is how long that takes. moving up from 3% up to around 4.5% on the ten-year treasury over over the next two years, you can still make some decent money in fixed income with corporate securities like junk bonds. still can make decent returns, total returns, so for those people afraid for some reason interest rates are going to go higher and the party will come to an end, it is probably not
imminent. probably not over the next 12 months. cheryl: is the story overseas? with these blockbuster numbers were getting for performances, the bad year emerging market has had overall, do you think the story for u.s. investors is maybe you need to up your percentage of your portfolio overseas? do you agree with that assessment? >> i really do. it is wise to look outside notices for opportunities not that there is anything wrong with the best in u.s. businesses, but because of how much emerging market stocks have trailed over the last couple of years, how much european stocks have trailed over the last couple of years, there might be better longer-term valuation opportunity in places like europe and the emerging market. when you're looking at the emerging market you do have to be a little careful because there are some countries which might go from emerging to submerging to specific examples with venezuela and argentina.
that is mainly due to political issues, but if you're looking at china, there is some tremendous opportunity and also looking at mexico, we are doing some great things as far as political reforms. cheryl: at market has been on a tear. staying away in 2014, little bit of caution to our viewers. wells fargo chief portfolio strategist. have you looked at your portfolio? you should today. you can celebrate if you open up your statement. this is it, 38 minutes to go for 2013. a lot of you probably benefit from tax breaks including using mass transit. come tomorrow you might have to start paying up again. washington, re-upping some of the practical and sometimes
silly breaks. what are the chances they will be reinstated next year? speaking of transit, will he be one of the millions making the trek home after an evening of new year's eve celebrations? we would give you a few options for getting back safe and sound after the break. just by talking to a helmet. it grabbed the patient's record before we even picked himp.
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cheryl: we want to sig show youa live picture. a close-up. a million people will be in times square when the ball drops. about a billion people will be watching the new year's eve festivities in times square. i have to tell you, it is something to see 2000 pounds of confetti dropped into times square on new year's eve. 370 million americans of all ages ringing in the new year. fun fact, he probably didn't
know this, a thousand new babies will be born on new year's eve. if you are in ne you'd new york city, bundle up. fox news covering it for you. when lawmakers packed up and went home for the holidays, left behind very important businesses that they will need to address when they return home, business decisions, specifically this. a bundle of 55 tax expire at midnight. the jensen is here in new york city right next to me. you're still talking about washington and how congress seems to mess everything up. big tax breaks or experience night. >> especially research and development. racehorse depreciation, recovery for motorsports complexes, tax
break for rum production. you look at tax breaks, they are called extenders because they typically you reach the point where they expire, they are temporary but they get so much pressure for the industry pushing for these tax breaks they end up extending them. going on for 20, 30 years now. take all of these tax provisio provisions, take all of them that expire over the next decade, the cost of $1 trillion. cheryl: you and i were talking about this in the break, they will impact some viewers, those in the racing industry for example that could write off the value of those horses, that goes away. >> absolutely. workers who work prepare rail lines. at the end of the year some bill goes through congress. this year in the must pass bill they did not extend the tax
breaks. normally it is shoehorned in with a bunch of other stuff. you have to pay for it now, that is edited in congress if you're going to continue the individual tax breaks you have to come up with revenue elsewhere, tax increases or spending cuts to allow these tax breaks to move forward. cheryl: what is the big buzz in d.c.? >> it is the debt ceiling. you already have started to hear rumblings from republicans, democrats and the other side, president obama saying last time we demanded nothing in exchange, we wouldn't negotiate, they didn't come it paid off, for they will continue that again. cheryl: that will keep you very busy. great to see you in new york city, by the way. as the holiday season draws to a close, the airports will be chockablock of travelers. morrow marks the 100th anniversary of the first
scheduled commercial flight in the world. it happened in st. petersburg, florida they both took off in 18-mile flight carrying one passenger up to 60 miles per hour. the "wall street journal" says it was $400, about $9323 in today's money, compare that with today's state-of-the-art boeing 787 airliner which can fly 10,000 miles before the 300 people on board wit and a cruisg speed of almost 600 miles per hour. traveling by air in the u.s. the holiday season estimated during christmas week the average lowest-cost round-trip airfare $199. for the top 40 air routes. the closing bell is going to be ringing. they are called the fragile five by morgan stanley. five emerging market with an uncertain future and 2014.
cheryl: some big oil names are pushing the s&p 500 following warren buffett deal with phillips 66. lauren simonetti's following that. lauren: we will see what is leading s&p 500. the top five companies have not changed all day, many of these energy and refining stocks, names like marathon, all up to,
3%, some even more than that. one of the winners is phillips 66. you can see that experiencing 93% cut. warren buffett berkshire hathaway, his major company is buying a unit of phillips 66 for $1.4 billion. not in cash, they have about $42 billion in cash but they're doing it with shares of phillips is to six which they already own, 19 million shaaes to be exact. as a result of that deal, we are not sure why this is happening, he is trying to avoid taxes or think they have already risen so much this year, we don't know. it is not only lifting the shares of her chair and phillips, but many refiners and sectors. back to you. cheryl: thank you. temperatures may be dropping but one market is feeling the heat. that is natural gas.
why are natural gas prices on fire? because of the frigid temperatures that we are seeing all over the u.s. jeff flock standing by in chicago with more on that story. jeff: i tell you, it is not just cold in chicago, it is called all over. i am on south street you can see through the snow. a lot of people making a bet on natural gas. futures contract lost 4% but look at why it has been up lately. this is the weather driven. see where it is abnormally cold. few look at the map we have, the purples and blues and the green depicting areas of the country it is abnormally cold right now. that means demand for natural gas will be pretty high. the website has a demand meter on there. almost the needle of the meter.
here is the reason to be bullish natural gas long-term. it has to the diminishment of coal-fired plants around the country. a lot of them have gone off-line because of the regulations. maybe you think that is a good idea. the fact is these plants are going away and gives electric power generators a lot less flexibility to switch back to cause natural gas prices rise. maybe there is nothing. that took the foot off the gas pedal a little bit. not as many call opportunities moving forward. i leave you with this beautiful scene of the financial district here in chicago, the harris bank building twilight, bank of america building, it is all right here getting snowed on. is going to be a lovely evening. cheryl: how cold is it in chicago? >> last i checked it was 4 degrees. maybe a little warmer now the
snow is flying it was 4 degrees. cheryl: stay warm, jeff flock. thank you very much. that is what it was made for. >> happy new year. cheryl: a difficult year contact was earlier, emerging market. the index is down about 6% on the year, so this trend turnaround in 2014? where can investors find the most opportunity? wells fargo emerging market equities fund portfolio manager. that really is the question. i'm curious if emerging market if the story will turn around ia post taper, what do you say? >> emerging market will have to adjust to a new world. imagine the fragile five earli earlier, i think for the last several years a lot of emerging markets have been able to hide behind a lot of global liquidity, cheap money, avoid making some very painful
decisions with regard to restructuring the economies and fixing the deficits which have been very easy to fudge. very interesting year for the equities. cheryl: lets get country specific with china, russia. lots of those stocks even if they have traded on the nasdaq in particular have done really well. but part of the traditional brick, there are concerns about those particular countries moving into next year. you think this story is improving? >> i think with both of those countries it will depend on how they manage their individual structural challenges. they need to reduce their dependency on commodities, which are probably seeing better days going forward. really focus on spurring other aspects of their economy. there will be some very right lights and interesting companies. china i think understands the
challenges they have with moving away from investment expenditure, highly leverage growth and consumer spending. that will be hard but i think china has put in place a good plan for that over the next several years. cheryl: the same question as far as china really does go over into india, india hasn't had struggles of the middle class china has, but have been struggling nevertheless. >> they have suffered for a number of reasons. the big one friendly has been their government has really not made any significant reforms, especially relied on money to bail them out and allowed them to ignore very important reforms in india. there's a lot of momentum there now, have made some efforts. sections of next year.
this may take a more pro-business stance, but india is a tough call it the stage. cheryl: another tough call has to be tricky. they have been mentioning a lot about government, the instability. one issue is the proximity to northern africa and again what is happening with the crowd in lt the effect until this year. it looks rough, what do you say? >> turkey is a classic example. a huge account deficit they were able to easily funded and create very high global liquidity and they began to turn off in may as the taper talks began, people began to worry how is tricky going tt fund that deficit? that has been compounded with very serious political issues in that country, so the market has
sold off, but it is a great example of pretty good opportunities as people worry about things like the fragile 53 had turkey is a member of that group. as they focus on that theme, we can very well see good companies being tossed out as people talk about one or two factors in the country trading interesting opportunities. cheryl: hottest emerging or frontier market. >> we will see the chinese internet names continue to perform very well. cheryl: sticking with china. thank you very much, good to have you on the show, happy new year. >> thank you. cheryl: the closing bell will ring. 16 minutes to go, all of the money you have made in 2013, it is on your screen. we will talk about the volcker rule. helping to prevent another financial crisis again.
as you can see in this live shot, this is times square, thousands of people already flooding into times square for tonight's huge parties, a million people expected to be at the crossroads of the world to watch the famous ball drop at midnight, that will be tonight. the on-demand car service uber is warning surge pricing will be in effect, customers can expect to pay premium fares during the peak times after 12:15 a.m. uber trying to head off accusations of price gouging. they got hammered for raising prices five times the normal rate in the past. outside of new york, aaa will be on head in some states to help revelers get home if they can no longer drive safely. organization calls it tow to go.
aaa is warning the service only available as a very last resort and not available everywhere in the country. be safe. wall street's war on the volcker rule is actually heating up. after the lawsuit was filed by the american bankers association, regulators now considering dropping a provision of the rule that could force banks to sell off their investment. it says it could take a while to get through, more than the annual earnings, and if that provision actually is implemented, that is what they will have. we'll regulators stand firm, given to what is demands by wall street bankers? let's bring in the professor of economics. we have been debating this going on three years now, coming out
and filing a lawsuit, they are not giving up. do you wonder if the volcker rule will be diminished piece by piece by piece? >> i don't think so. this particular thing they are suing over is not really at the center of the volcker rule. the center is proprietary trading. this isn't even on the outskirts of the volcker rule, it is on the outskirts of the outskirts. it is about this hybrid sort of hybrid security that some banks issued, it is capital for regulatory purposes. cheryl: why would they just give up? why are they grabbing onto this? they are worried about the small banks. they have said i don't know how i am going to survive this. i used to have 40 lawyers, now i have 100 lawyers, they don't
have the capacity to deal with this. >> it has come down really heavily on banks in general. it tends to be fixed cost, it is more heavily on small banks, large banks and they are hurting. it is an opportunity to do something for the small banks. cheryl: one bank should not be investing in the ceos of another bank. understand banks should not be doing this kind of trading. >> it is investing. the securities of another bank.% it is on the edge. my guess is the regulators are going to rethink this one, but it just happens to be somehow associated with the volcker
rule. cheryl: july 2015, who wins? >> that is a year and a half from now. they are the ones who put the volcker rule in the dodd frank act in the beginning, they win. cheryl: thank you very much, it is good to see you, happy new year. >> happy new year, happy new year. cheryl: deputy chair, we will talk about with bitcoin coming up at some point. the closing bell will ring in six minutes from now. on "after the bell" we are going to have the it place to be this new year's eve. that is times square, but the it place to be for $395.
♪ [ indistinctalking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. cheryl: david as man joining me right now. he is busy looking at numbers. david: i am. what a fun time for us to be here. thank you for joining us. we're right here in times square in the middle of it all. we'll give you a lot of outside shots at this hour. the crowds are building. look at that. that is literally a stone's throw. the windows were shaking. i never heard the sound as loud as it is today in times square. let's go to lauren simonetti at new york stock exchange. i want to talk about something that is really shaping things up. what is happening with hertz?
hertz is up 9%. why is it moving up so fast? >> it was at a new high today up more than 10% at one point. the board of directors adopting a one year plan to keep investors getting too much influence over the company. not to mention that third point's dan lobe has taken a 5% stake. cheryl: kkr taking a big stake in marvell technology, lauren. tell me about that one. >> absolutely. moving that stock substantially. marvel up 10%. changes maybe in corporate strategy for the chipmaker coming soon. david: phillips 66, warren buffett wants to buy a piece of it. >> maybe this is warren buffett's way of saying in the future the moneymaker will be oil moving through pipelines, right?
cheryl: let our viewers know, twitter's stock is actually doing better right now. [closing bell ringing] david: the bells are ringing. is that the real confetti. i think that is the artificial -- no. they can do anything with smoke and mirrors on wall street. cheryl: the dow is up 26% david, year-to-date. david: what a year. depending on how you judge these things, whether it is by dollar amount, inflation adjusted percentage, this is the best year either since 1995, 1996. you have to go back a long time to get a year like that. cheryl: we were there. david: the question whether you can sustain it into the year to come. we'll have a lot of best bets coming up from our investment analysts throughout the hour including about stocks, bonds, commodities, a special segment on oil. we have a lot of fun coming. fun on wall street, not a bad way to end a great year. cheryl: nice numbers.