tv First Business KICU July 3, 2013 4:00am-4:31am PDT
traders are ready to ship out early for the holiday, leaving little time to trade the june job numbers. in today's cover story, the pressure is on as immigration reform heads to the house. how activists are preparing for that vote. plus, why budget cuts are translating into subdued fourth of july celebrations. and, hi-ho silver! will the lone ranger need rescuing at the box office? first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning! it's wedensday, july 3rd. i'm angela miles. in today's first look: it's a short trading day. the stock market will close at 1 pm eastern this afternoon, all of
the 4th of july, and normal trading resumes friday. the labor department reports on jobs friday. the market expects 166,000 jobs were added to payrolls in june, and it's predicted the unemployment rate will hold steady at 7.6%. today's adp private sector forecast 150,000 positions were added in june. on the white collar crime beat, former ceo dennis kozlowski, who stole money from tyco, was denied a request for an early release, while a former exeuctive at tiffany reportedly has been arrested for stealing more than $1 million in jewlery from the retailer. the stock market remains unsteady. the dow fell 43 points yesterday, the nasdaq down by 1 and the s&p 500 also off by 1. gold trimmed 15 dollars, and oil spiked to close at 100. concerns are still high on the political unrest in eqypt. in trader talk this morning, anthony crudele of emini exchange, joins us now for a
look at the abbreviated trading session. good morning, and it's been a choppy trading week. - oh yes it has. the beginning of the month, beginning of the quarter, monday and tuesday, buyers came out, typical beginning-of-the-month, beginning-of-the-quarter stuff, where they came in and they started bidding the market up. wait and see if they can hit some resistance, which has been the 50-day moving averages. really light volume, and pretty decent trading ranges. a lot of action in terms of price action. not a lot of volume, but the buyers have definitely been out. they took the s&p, dow, and nasdaq straight up to our 50-day moving averages two days in a row - key technical area to watch. then they stay up there for a little bit and then they sell them off late in the day, and just show me that that area is going to be very, very important coming up friday for the unemployment numbers, and even today for the atp. - exactly. we saw the dow cross 15,000 yesterday. is that a reason for investors to become excited about the market again?
- i don't think so right now. i would not be in any hurry to want to be a buyer at this moment, until we see three consecutive closes in the s&p, cash, above their 50-day moving average. - anthony, what sector would you watch? - 1941 is the area to watch in the financials today. if they can sustain trade above that, i think that allows the s&p buyers to feel confident about what they're doing, and then i think that brings support to the entire market. - many thanks, anthony. blockbuster news is coming from the obama administration this morning. a portion of the affordable care act is being delayed one year to give companies with 50 or more employees more time. businesses will now have until 2015 to comply with requirements to provide employees with healthcare. a statement from the treasury department reads: "we have heard concerns about the complexity of the requirements and the need for more time to implement them effectively." businesses are, however, strongly encouraged to maintain or expand health coverage during 2014. in our cover story, july 10th
now figures as a key date for immigration reform. that's when the house republican conference meets to discuss upcoming proposals to reform immigration independent of the senate version, passed last week. "buenos...como esta?" organizers at the resurrection project, which helps communities recover from foreclosures, are bracing for a tough fight in the house, particularly over provisions to provide a path to citizenship for the 11 million undocumented immigrants in the u.s. "any proposal passing the house has to have a path to citizenship. temporary is not how we want to live in this country." in the chicago suburb of naperville, an organizaiton called the national immigration forum, which pulls together faith-based communities, law enforcement and business, gathered representatives from dozens of suburban groups on how to lobby conservative lawmakers about immigration reform. "from the business perspective, we're in a global competition, but we have a government that's
keeping us from that competition." the groups here, including the illinois farm bureau, chamber of commerce and others, see immigration reform as a way to improve america's economic strength. in california's silicon valley, there's support for a house bill to raise the cap on visas to bring in skilled engineers and programmers from abroad to the u.s. that's the type of legsislation that has support here as well. "i think there's so much momentum from the senate, and there are republican political action committees who also want comprehensive immigration reform." a spokesman for the u.s. chamber of commerce says once house members return from the july 4th holiday, they'll have about three weeks to put together a bill. that's a time- frame that could lead to conferences between senate and house versions of immigration reform during recess at the beginning of august. sequester budget cuts claim another victim - fourth of july
fireworks. military bases from hawaii to north carolina are canceling fireworks displays in ongoing attempts to adjust to across-the-board budget cuts that began in march. the military lost more than 10% of its budget in sequester cuts. the biggest spectacle to watch this fourth of july could be prices at the pump. ahead of the holiday, the national average for a gallon of unleaded has slipped to $3.47 - 8 cents lower than last week, while still 17 cents higher than last year. analyst patrick dehaan, of gasbuddy.com, expects current prices to remain on the low side after the holiday. "refineries are done with matainence. unless a refinery situation flares up, i think that for much of the country, prices will remain somwhere in the three-dollar territory." bp's largest refinery in whiting, indiana, is back online. the company will now expanded crude production,
which dehaan says could deliver a price break later this year for drivers near the great lakes. this week, taxes on gas are rising in 8 states: wyoming, conneticut, california, maryland, kentucky, nebraska, georgia and north carolina. the largest jump is 10 cents per gallon in wyoming. americans bought cars and trucks last month at a pace not seen since before the great recession. add to that, analysts say the forces behind the sales momentum - low interest rates, pent up demand and popular new vehicles - won't disappear any time soon. during june, gm sales rose 6.5%, and ford up 13.4%, both beating expectations. chrysler sales jumped 8%, and toyota's 10%. the trip into the office is still a struggle for bay area residents who are facing commuting chaos. san francisco's bay area rapid transit system, better known as bart, remains closed. union workers who operate the rails walked off the job and are entering their 3rd day on the picket line. money is the sticking point in negotiations
with the city. the ordeal is creating traffic tie-ups and has more commuters carpooling or working from home. the federal reserve is requiring tougher standards for banks. in a unanimous vote, the fed approved new rules under the so-called basell-3 accord. the stricter standards are meant to alleviate the potential for another worldwide financial meltdown. the majority of banks will need to hold up to 7% of assets in high-quality capital, up from 2%. for 100 banks, it will require raising $4.5 billion by 2019. tech world's twins are making a play in digital currency. the winklevoss twins, who are best known for suing mark zuckerberg for facebook's rights, are proposing an ipo for a "bitcoin" etf. it would give investors exposure to the growing electronic currency, although some investors claim bitcoins are too high-risk and unregulated. zynga investors are counting on the new ceo to become a game- changer for the social media
company, but analysts say don't bet on it. zynga founder mark pincus is stepping down to make way for don mattrick, who was in charge of xbox business operations at microsoft. "i'm not sure there's a skill- set match with what zynga needs to do. on the other hand, the path they're on is clearly suicidal, so they needed to make a rather rapid change, and i think don was asked to step down from microsoft, which is why he took this particular leap." tech analyst rob enderle believes zynga's best hope for survival is to go beyond the website and cross into all gaming categories, including game consoles. apple is launching a plan to go green. the company will build a new solar power farm to supply its reno, nevada, data center. big tech companies have received criticism for using too much electricity. apple eventually wants all of its data centers to run on renewable energy. baby formula makers around the globe are under investigation in china. danone, based in france, nestle in switzerland, royal fries land campina in the
netherlands, and abbott labs and mead johnson, both of the u.s., are in the spotlight. the companies are accused of anti- competitive practices and price-fixing. all are said to be cooperating with authorities. baby formula made outside of china has been in high demand ever since 2008, when tainted milk powder killed 6 chinese infants. it's being called the worst restaurant meal in america. a watchdog group is accusing long john silver's of improperly labeling nutritional content. lab tests revealed the "big catch" meal has an astounding 33 grams of trans fat, 19 grams of saturated fat, and 3700 milligrams of sodium. the company stands by its data. meanwhile, a federal judge has blocked the cracker barrel chain from making a move into grocery stores. kraft foods claimed it infringes on its own cracker barrel trademarked products. still to come, traders debate the tech stocks tolu
erik, our movie guy, is here. the reviews, erik, have not been good. - i'm talking one star. - yes, they have, but i think a lot of people are piling on this weekend. people have been sort of waiting for this movie to fail. the film is certainly not above criticism, but i think there's a few more things to like in this movie than a lot of the summer tentpoles that i've seen this summer. - here's a look at the numbers that came out last weekend at the box office: "monsters university" at no. 1, "the heat" at no. 2, " world war z" 3, "white house down" 4, and "man of steel" 5. so, where will "the lone ranger" fit into this mix? - it's competing this weekend against "despicable me 2," and that is going to be really the big winner this weekend. families, kids are just lining up waiting for their parents to take them to see this movie. you're probably going to see that movie do over $100 million just by sunday. "lone ranger" is a $250 million-budgeted film. it's probably going to be second, i believe, this weekend, but if it doesn't make $75 million by sunday, some people at disney are going to be sweating a little bit. - at the box office this weekend, it is "the lone ranger" coming out, along with "despicable me 2," and "kevin
hart: let me explain." - yeah. kevin hart, a couple of years ago, had this small concert film. it didn't open on even 300 screens. it did almost $8 million. this film is going to be opening on 800 screens - not a huge release, but i'm feeling that this is going to probably triple the grosses of the previous one and be one of the highest-selling concert films of all time. - he's a funny guy. i liked him in "think like a man." - yes, very funny. - and there's "think like a man too" coming out. - that is coming out. "t-o-o," correct? yes. that is coming out next year, i believe. - and "the heat" did nicely, as you predicted. - yeah, "the heat." this is going to be a really nice hit for fox. "epic" didn't do very well for them. "the internship" is going to be one of the summer's big losers. but this is a film that, if it sort of follows the word-of-mouth that "identity thief" and "bridesmaids" and "the proposal" did for the two stars, this is going to be a film that probably could do between $130 and $160 million this weekend. that's more than i can say for "white house down."
- which... - was a very big bomb for sony. even more so than "after earth," something we talked about when we gave our sony preview a few weeks ago, that this is a film, a $150 million film - we already had one white-house- under-attack movie. this film didn't do as well as that, didn't do as well as after earth. this is going to be a real big disappointment for sony this year. - sony is hurting. thanks for coming on the show, we appreciate it. - thank you. coming up, home is where the road is. what rv sales are signaling to traders. traders unplugged is next.
two hard-working traders join us from the trading floor of cme group. alan knuckman and andrew keene are ready to go for traders unplugged! today. good morning, and topic 1: econ class - the government has booked about $120 billion in profits from student loans. where are interest rates going next? - that's like saying where the stock market is going next. i think interest rates, for the time being, are going to go higher for now. the 10-year is going to go higher. i think by the end of the year, if they taper, if they don't taper, it's going to come back under 2%. but i think that the immediate time, they are going higher, and the tlt is going lower. - people of gotten really worried - we've seen a 1% rally. but we're talking about all-time, forever lows, and we're still at 2.5%. the cbo is talking about rates in 2016 being at 4%. so we're not talking about a catastrophic rise. but to get to the root of the issue here, i think it's good that the federal
government is making a profit off this instead of the private sector, because they are backing the loans. but i think people are getting a little bit too worried about rates rising too fast. - too fast, 1%. i mean... - it's 1%. you've got to put it in perspective. - topic 2: tech talk - which is the better company to buy here: amd - applied materials - or hewlett-packard? - i can't believe i am going to say this on air again: hewlett- packard. there are actually turning it around. i like to buy stocks when they're headed in the right direction: bottom left to the top right- - could you play the tape where you said about six months ago, you said they were going out of business. - i said that about best buy, too. i would never short best buy because they would be taken over for a private equity deal. hewlett-packard is the same way. they are turning things around. i still don't know what they actually sell or what products you would actually buy- - the story for these three stocks was these are the stocks that are the worst at spending, research and development. so,
looking at this, that's usually not a positive sign, but, technically, some of these stocks - advanced micro could go from $4 to $5, but i like applied materials. applied materials technically looks like it could have about a 30% move from here. hewlett-packard has more than doubled, so i am the bull and am going to leave it alone. - topic 3: driving home - is it time to buy rv stocks? winnebago has been a winner. - no. i don't buy companies if i don't like their business models- - because you don't have an rv? - no. i don't understand their business models. how much money do you make on one of those? what's their profit margin? i don't know the company, i am not going to buy it. - we have an aging population, and people like to travel and hit the road. - so do i. i like to jump on a plane and go to mexico- - people like to hit the roads. so, those are two factors that have really helped them to grow. travel trailers are their largest seller- - how about gas being expensive? in illinois, it' ats $4. that's going to hurt them. - that's going to be an issue, i think, because if you look at crude, crude books like if it goes above $99, it is going to $106 very quickly. - it's going to $120. - but if you look at winnebago stock, it's pulled back off its highs, so look for about a 25% move up to $26 in winnebago. thor has more than doubled in just the year itself. - i like thor a lot better. the chart looks very strong; it's been performing very well over the last five years. - so you're bullish?
- on thor. - here's your bonus round question now: in honor of fourth of july, how many hot dogs do americans eat each year? 1 billion, 20 billion, or 1 trillion? - i know alan sits down and probably has about 8 without the bun. - i am more of a sausage guy- - shocking! - more of a chicken sausage guy. chicken sausage, i think, is the choice. - i'll take- go ahead. you go first. - you can have two chicken sausages and have the same amount of fat grams as one hot dog. so i would rather be two- for-one. - okay, a, b, or c? a, b, or c, though? - it's always c. - b. - it's b: 20 billion. - ding! - happy fourth of july, guys. first business continues right after this.
it's a short trading week, but there are stocks you might want to go long on according to tim biggam. he's on the trading floor at cboe with us this morning. good morning, tim. - good morning, angie. - i'm starting with apple. i know a lot of people are long this stock already. they're holding on. what should they do with their apple positions? - i kind of like apple down
here. certainly i am a value guy, and that $390 level, technically, has now held three times, and you're still looking at valuation of almost 8 on a forward pe - forget about the excess cash part of it - and yielding right around 3% at these levels. so, given the fact the market is trying to push to all-time highs but apple is really trading at almost recent lows here, i kind of like stocks like apple going forward. i think they will be relative out-performers here. if it can break through that $420 level technically, i think there's a little room to run on it. - what does that mean precisely when you say it's held on to that $395 three times? what does that tell you as a trader? what does it signal? - that means that there are buyers stepping in kind of big- time at that level. they are certainly the value guys or the dividend players. so, it's a level of support that, holding three times, i don't know if the shorts will be trying to test it any more over the next six months or so, given the fact that it has really rallied sharply off that level. - gld, a lot of people are watching gold as well. what do you see there? - really very similar chart
pattern to apple. kind of two of the biggest holdings by some of the hedge funds out there, but gold, last week, had a very nice reversal after breaking below 115 on gld. that level has held now, so somewhere around the 120 level i would be a willing buyer, and if we do get any growth back in the economy, i think inflation will absolutely pick up, given what the fed has done, and gold should start to outperform as well. so, again, another stock, or etf, in this case, that is at the lowest level it's been over the past year. i like it, again, on a relative basis. - tim, thank you, and have a good fourth. - you bet. thank you angie. before we take off today, a final reminder the market will be closed tomorrow, but first business will right here with a salute to veterans starting up business ventures as they return to american soil. from all of us at first business, have a wonderful 4th of july.
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