Transcripts For FBC Markets Now 20130712

Facebook. This is a trend. We will talk about it. This is all coming up on this hour of markets now. Connell all right. Dagen do you think i need work . Connell not on your beautiful face. Dagen you may be a suck up. Top of the hour. Time for stocks now. Nicole the dow is up. The highest close of all time for the dow and the s p 500. We are not quite to the intraday alltime highs for the dow. You are seeing of arrows, nonetheless. We have been following both jpmorgan and wells fargo very closely as they came out with their quarterly reports. Other names that are leading the dow our boeing and united technology. Back to you. Dagen thank you so much, nicole. Jpmorgan and wells fargo kicking things off. Lets take a look at how they did. Wells fargos profit climbing 19 . Our next guest and friend analyzes numbers. The real . Here Going Forward is mortgage. The volume is low. That will hurt. Loan growth, from a commercial site, is not particularly strong. The economy just is not expanding that rapidly. The tapering thing from the fed just does not make a lot of sense. Businesses are not expanding. Dagen it would take a significantly stronger economy. Longerterm Interest Rates go up, that could offset that loan growth. It could offset some mortgage activities. A much stronger economy, people will borrow anyway. The other thing that we did not see in earnings with these companies is the fact that security books got hit pretty hard. Jpmorgan got hit pretty hard on margins. They took a conservative route. From an earnings perspective, you know, it was good enough. People were not expecting anything heroic. The stocks are up today. Dagen looking at the financial category, it has performed quite well this year. It is up about 24 so far this year. To that point, do you take money off the table with some of these names. Assuming that there is no great catalyst for growth. Absolutely. I think it is a stock pickers environment. It has not been a stock pickers environment this year. Giant securities portfolios, earnings will only go up when libor goes up. Libor is not going out for a while. I think some of this rally is not particularly right. I think there are other companies that are benefiting dramatically. Places like the southeast, credit will continue to improve. I think there is a lot of leverage for the Smaller Community banks. The banks that are the buyers are getting really good deals. That is a great environment for that industry. Dagen great to see you, as always. Take care. Hope you are having a great summer. Connell we have this group of bipartisan senators introducing this bill. Dagen peter barnes is in washington with more. Peter you sound excited. They were the depression era legislation that forced banks to split off their Investment Banking operation. They were all one company out one time. It was repealed in 1999, but now senator Elizabeth Warren, democrat of massachusetts has teamed up with john mccain on the legislation to restore glasssteagall. Critics are already saying, wait a minute, it was not these big banks that failed. Senator warren said, well, we still had a problem. Take a listen. The companies that we bailed out were citibank, bank of america, wells fargo. Those are the ones that got the big tarp money. Doddfrank is part of that. It has dialed some of the risk out of the system. The point is, it takes more. What this is about is one more way to bring down the size of the largest, integrated Financial Institutions and separate them out so the risky part is separated from what should be the boring part. Peter the big banks are not too keen on this. The roundtables says doddfrank is fine. It is adequate. It is the proper legislation at this time. Financial services for him says it can help to minimize the risk at an institution. Connell peter barnes in washington. Thank you. We have a former vice chairman at Goldman Sachs with us now. Two questions, we said someone with, and indoors ben bernanke. What is wrong with her argument there that we need to take these things smaller. They are just too big. Why not bring back last steagall . There may be some merit in what they are saying. There are two ways to take risk out. A lot of doddfrank and the local rule has already minimized or reduced what they can do. The only caution from the industry, which i think is right, they can actually manage their risk more effectively if they have a trading operation. The devil is in the details here. We are headed in the right direction. Could you go too far with this . You could go too far. Though volcker rule went a long way. Connell from 19331899 we did all right. Did you get rid of it and the crisis comes a decade later. I think that there is some merit to that. A lot of deals they did, you wonder why does the world need that to go on . They did not have enough capital. There is 50,000. Most of the banking gets done at ground level. There is some trading that makes it easier for banks to actually loan because they can hedge themselves. They can trade loans. They can do other things. I do not think you want to take that away. That can hurt the loan business. Connell we have a big endorsement for bernanke. A hot topic of discussion. The stock market has been propped up by the fed for however long. Some say the rates have been too low for too long. We are in the process of recreating a situation that we already have. Why do like what bernanke and Federal Reserve has been doing . From a big picture, we are going through a massive deleveraging in the western world. We have too much debt for the amount of income we generate. The fiscal policymakers need to do leverage. We are doing that, but very slowly. Bernanke knows that we need to do this. He wrote a piece on the great depression. What was required was easy, i would argue, very aggressive Monetary Policy to give some breathing room for us to do leverage. The general policy by the fed has been right. The question now is, how much is too much and this is why you are seeing this debate on tapering. So far, i think they did what they had to do which was get some breathing room to an economy that needs to do leverage. Deleveraging by itself, unopposed unopposed by Monetary Policy is very disruptive. He knows that and so he is trying to counter it. Connell so far so good. We have jim rogers on later. Rob, thanks a lot. Have a good one. He does not like what bernanke does. Connell thank you. We will talk to jim later. Thanks for coming on. We appreciate it. Thank you. Dagen breaking news. Janet napolitano is ready to call it quits. She is a forming the white house that she will be stepp down in september to become president of the university of california systems. Talking about berkeley and ucla among the universities there. She was expected to stay on for a second term. A little bit of a surprise. She was highly recommended to the university of california region. Connell ups. Ups blaming a slowdown in the industrial economy in this country for a week earnings report. The big economic report. I am happy investors are getting out of the stock. That is sure. Dagen investigation looking squarely at the pilot from the San Francisco plane crash. Connell looking for love on facebook. [ laughter ] i want to make things more secure. [ whirring ] [ dog barks ] i want to treat mo dogs. Our Business Needs more cases. [ male announcer ] where do you want to take your business . I need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, Small Business solutions from at t have the security you need to get you there. Call us. We can show you how at t solutions can help you do what you do. Even better. Dagen get it done. Connell lets talk about ups. Nicole it is killing the stock. It is the number one loser in the s p 500. Some of the commodities are under pressure. Really, it is the number one loser. They cut their numbers. They are talking about a tough economy. Growing u. S. Industrial economy, according to them. They face competition from fedex. Both are winners this year, but both are lower today. Back to you. Connell all right, local. Dagen Charles Payne is here. He will try to fly high. Connell a very nice play on words. Charles jim rogers is always right, eventually. Dagen he is . Charles sometimes he takes 20 years. He is amazing. I battled with jim rogers four years. He won me over. I like lowcost carrier. The stock is trading in at six pd. 0. 2 peg ratio. One fifth of its sales. Look at this chart. That is a beautiful chart. I think from here you get a retest to the top. Ultimately, i think i see this. Going into the mid 20s. If there is any industry, it should be the airline industry. They are making money hand over fist. Dagen americans stock was stock equals double stock. A lot in terms of customer service. Charles virgin is amazing. They charge a lot of money. Dagen american, that is rough. Connell you on the other hand speaking of airlines, i would like to get on one of these airlines and go somewhere. So what edward snowden. Asking for temporary asylum in russia. Dagen jim rogers. We have already talked about him quite a bit so far this hour. He is finally coming up. Im a careful investor. When you dwhat i do, you think about risk. I dont like the ups and downs of the market, but i cant just sit on my cash. I want to be prepared for the long haul. Ishares minimum volatility etfs. Investments designed for a smoother ride. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus, which includes investment objectives, risks, charges and expenses. 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Edward snowden is asking for temporary asylum in russia. He is leading the Human Rights Group at moscow airport. The first photo since he arrived there on june 203. In florida, jurors are hearing the closing arguments. Six member allfemale jury could begin deliberations later today. Zimmerman is pleading not guilty to seconddegree murder in the death of trayvon martin. One american and two spaniards were hospitalized in the running of bell bowls. I cannot watch this. Those are your headlines. Dagen and connell, back to you. I cannot watch this. Connell that was a rough day. Dagen if you do that, you are a moron. I do not see the attraction. Just saying. Dagen i would have kind of enjoyed seeing that happen to rex ryan. Connell thank you. Connell live pictures coming in here of thousands of pro morsi for as. Dagen connor has more. It has been calm and peaceful. The Muslim Brotherhood remains angry. They have called on their supporters to take to the streets today. The overall tone here has changed a great deal in the last two or three days. The tempers have cooled. Millions are expected to take to the streets today to to support former president mohammad morsi. They denounced the attacks on the military leadership here in egypt. It really does appear that they are trying to get their supporters to turn out, but not necessarily to battle with the Egyptian Military. The Muslim Brotherhood does not want to provoke the military. The military is still in charge here, but the brotherhood knows that Going Forward they are still the most organized and Largest Community in this part of the country. They are a powerful group here. Connell a live report there from cairo. Thank you. Dagen the plane wreckage cleared this morning. The latest on that investigation and the focus on the pilot. What you need to worry about. Connell facebook driving big young to get faceless. The boys used double miles from their capital one venture card to fly home for the big family reunion. You must be garths father . Hello. Mother. Mother traveling is easy with the venture card because you can fly any airline anytime. Two words. Double miles this guy can act. Wanna play dodge rock . Oh, you gu and with double miles you c actuay use, you never miss the fun. Beard growing contest and go win whats in your wallet . Halfhour, and here is what is still coming up with jeff rogers. Ready to call everyone down. Twentysomething. Apparently licking prolonged facebook, willing to pay for a facelift to improve their odds. Facelift, facebook. And then reached refinery stocks are trading down. Although still to come to. Dagen nicole is looking at some of the biggest movers. Reporter an exciting day on wall street. At our highest point we were just near 15,500. I mean, we were at 14,000 15,498. So we were about 44 points away from the alltime record intraday high of the Dow Jones Industrial. Bank of america, home depot, mcdonalds, those are some of your best performers on wall street. It is a mixed bag. This is not one of those days where they are buying everything the up volume and the down volume are split nearly 5050, 101 million shares to the upside , 102 to the downside. Down volume. You really are seeing is but. For example, drug stocks are pulling back and transports are pulling back. Connell we will talk now for a few minutes about cold. Lets bring a price of gold and see where it is trading today. 79 an ounce, down a little bit, but on track for its best week at about two in almost two years. From Vegas Jim Rogers joins us. Welcome back to you. Thank you for coming on. We have mark farber on earlier god bless you. What does start to the interview. We had a mark on earlier this week. He called in from wherever you was, i think thailand. I mention them because you have been interviews somewhere and it had just been posted. Jim was talking about gold. What you think at this point . Well, i will buy on any weakness. Gold is obvious the pullback. Tell me why that is not the right thing to do or explain what you were looking to do specifically in this market. Well, mark always buys gold. 25 percent of his net worth is in gold. He is always there. My view about cold is eye on gold. I have not sold any. I bought a little more. And my view is in that process of making a complicated bottom which it made sometime this year or next, maybe 2015. At which point i hope i am smart enough to recognize the bottom and smart enough to buy a lot of gold per. Connell what factors do you look at . Again, adjusting to the specific market. Now we are nearing where it is a point where that complicated bottom, as you put it, has been reached. Well, normally the bottom looks somewhat the same. People give up. Panic and desperation, throwing things out the window. Then never want to buy gold again. It went up 12 years general in a row which is an anomaly. I would suspect of the bottom will be an anomaly to. State law under the most. If it were down 50 percent that uld be between 901,000 which would not be strange. Things go down 50 percent all the time, even in the markets. Connell and that is the point where as mark was saying youre right. He has been a big gold guy anyway, so he will buy out that weakness. There could be a lot more. Lets shift gears and talk about the market in general and get a sense of what youre thinking about because we obviously had the big runup in stocks. All of this euphoria building up. I saw a headline read before it came down. We are preparing for 16,000. Here we go. When you look out, what is your level of optimism verses pessimism . Are you worried about Something Big . Do you think we continue along the same way that we have been . I want to go back to gold about the bottom. There are a lot of people who have faith in gold. They think that you can never go down. None of those people have given up. To set a firm bottom we have to have some of the true believers giving up and dumping gold. I doubt if mark ever would. In contrast we have the stock market now where everybody is jumping in. Everyone is delighted and happy and theyre talking about 16,000. I am sure there will be talking about 17,000. And all like to jump on a moving bus or train. I have shorts in the u. S. As long as mr. Bernanke is going to print money stocks will be a nice place to be in the u. S. In the world. Connell he will keep doing this. Worried about what the fed will do, but that easy money policy stays in place for a long time, dont you think . He has said even back in may that if things get bad i will start printing again. Dont worry. This is the first time in recorded history that all the major Central Banks were all printing money. It is a very artificial situation that is going on. The world is floating on a big lake of artificial money. As long as it is there some people are going to continue telethon. Connell at some point that will end badly. It has to end badly. It has always ended badly when you have a lot of artificial money printing. There is never a time in history when has had ended badly, and this time we have all Central Banks printing money. It will in the double or quadruple badly. Connell as rich as jim. Making a prediction. Unless you want to throw one out, feel free to. No, i have no idea. I would suspect i am a Terrible Market timer. I would suspect sometime by the end of this year or next it will start ending and then we will have a bad patch. May just be temporary. Bernanke will print more, but certainly before the next election, next president ial election this is going to be a big mess. Connell fair enough. Good to talk to you again. A plea will have you back guns in. Thank you. Dagen i am thrilled that i get to deliver this bit of news to you. Facebook facelift. A report buys social new site revealing that Plastic Surgery is a growing trend for 20 end thirtysomething men and women in india for the sole purpose of looking better on facebook. Currently more than 60 million facebook users, and those interviewed on this side said having cosmetic surgery gives them a better chance of making contacts or even beating a partner. Connell arent there other ways dagen how about just using somebody elses total. Connell thats what station manager has been doing for years. Dagen all of the self portraits that people put on twitter an instrument facebook, you know you know that those women in particular took about 80 photographs to get that one good one. This thing. You seen me do it. Connell moving right along. Dagen im not ashamed. If i ever have an augmentation of tell you about it. The investigation into the air crash is focusing again on the pilot. Connell we will talk about that. The price of gasoline has been on the rise. Yesterdays uprising drawdown in stocks. More on that coming as well. Dagen and carl icahn raising the stakes in his bid for del. Of course, it is all about Interest Rates with the Federal Reserve. What is the yield on the ten year doing . You can take a look. Its down two basis points. [ male announcer] surprise youre having triplets. [ babies crying ] surprise your house was built on an ancient burial ground. [ ghosts moaning ] surprise your car needs a new transmission. [ coyote howls ] how about no more surprises . Now you can get all the online Trading Tools you need without any surprise fees. Its not rocket science. Its just common sense. From td ameritrade. Reporter im lori rothman with your fox business brief prelude. Billionaire investor carl icahn is raising the stakes on his bid for adelle by adding value as much as 1,800 per share. Then latest news. The bid from adelle Founder Michael dell and a private equity firm silverlake. Consumer sentiment weighing slightly. Improving among the lower income households. Those making more than 75,000 year were less optimistic on concerns about higher Interest Rates. A new Career Builder survey found 31 percent of employers will hire temporary workers in the second half of the year, a 10 jump from this time last year. Over the last four years temp work accounted for 15 percent of all job growth. As the latest from the fox business network, giving you the power to prosper. [ shapiro ] at legalzoom, you can take care of virtually all your imptant legal matters in just minutes. Protect youramily. And launch your dreams. At legalzoom. Com we put the law on your side. Dagen the wreckage from that plane crash in San Francisco finally remove from the runway early this morning. This as federal investigators say they could find no mechanical problems in the plane, putting the focus of the crash investigation squarely on the pilot. Mike boyd, chairman of boyd group international, is terrific to see you. Based upon what we know so far, it is a shocking lapse by the pilot that this happened. There is no question, the airplane clearly apparently got away from them in the last minute a flight. And these were experienced pilots. One only had 35 for 40 hours in that airplane, but 10,000 hours of flying. He had made an approach before. The other pilot was the chairman. There was a real failure in that cockpit. Dagen there has been some discussion about opening pilot records to the public. Letting the public decide whether a certain pilot should be flying into their destination. I say that that is ludicrous because i dont think the average person can ascertain what makes a good pilot verses what makes a mediocre one or bad one. There is no question. That is a silly thing. We should not have the public making a decision. We should have people who were experts making the decision which is what we have today, but in this case we are hiring humans, and humans will make mistakes. We saw that last week. Dagen in terms of the experience to the level of training seen in this particular aircraft, there was a report that came out i believe it was last year. Half a million pilots will be needed in the next two decades to meet demand. Concerns about training, concerns about their abilities. How much should we worry about this lack of training in the next few years. The lack of pilots, not training. New rules that just went into affect for entrylevel pilots and the copilot seat, thats another quarter Million Dollars of training so that you can get a job that might pay 30,000 get to live in newark, new jersey. It is not a career that a lot of people are going to chase. We will have a shortage of pilots and we just will be able to replace them as easily as we would have before to rule went into affect. Dagen i expect you to tell me i am crazy. I have always tried to avoid flying International Airlines that i did not know a lot about the work not mainstream air carriers. I try to fly the domestic carriers, some of the bigger international carriers. Is that a good way to go about it in terms of trying to figure out how welltrained pilots are . If it gives you comfort, absolutely. There are airlines up there. Carian airlines is a very professional. Theyre fred of some nation with the word ten at the end of it i would get on it. Dagen that always good images of me. Just the personal thing. To reiterate how welltrained our pilots are, you have the utmost confidence that Major Airlines and the people flying these jets are doing the right thing and thinking of the safety of the passengers first and foremost . Absolutely. Any major airline, you are about as safe as a hand of man can make you. No mistakes be made . You but yeah, but in terms of professionalism, nobody beats our airlines. Dagen great to see you. Greuel see you soon. Connell desk prices, the National Average for gasoline up 3. 505 per gallon. 0. 3 higher than it was yesterday. Dagen what does jeff flock know about it . He is in the pits of the cme. He knows something. Reporter i only know what the traders tell me, and they are saying that we will see a 25 to 0. 30 spike in the price of gasoline. But you think that the egypt peace is overplayed. I do. Initially at think you will see the jump in gasoline. I am surprised it has not, ready. I think that the price, the bulk of the price is due to egypt, and i think that even though it is bad over there is under control. Reporter in node didnt put on the chart, the worst, california, santa barbara, i didnt even put a cities on there because theres about a half a dozen or 12 of them even. Chicago, ore. , bridgeport conn. , indiana. We have already seen prices go up. They have gone up quite a bit relative to the rest of the country. I think that is the reason we have not seen anything go up lately. Reporter lets go to the gulf coast, virginia, georgia. Those are better places to be. Again, oil prices in the short term, you dont think that this is a shortterm rise to but you dont think its a longterm. I dont think this is long term. A lot of fear that the suez canal will be closed. Its not happening. Youre not supposed to guarantee. I guarantee you that the suez canal will not close. The Egyptian Military is firmly in control. If they fail the u. S. Military is not one to what happened. Reporter okay. Not closing. He is a good catholic guy who is ready to rock. Connell another chicago announcer there for a second. Dagen put it on the board. Connell thanks. Two of the most influential marketing moguls are teaming up. The big hollywood story we have for you coming up here next. Dagen first, some winners on the nasdaq. Dagen a new power couple and hollywood to tell you about. Two of the countrys most influential marketing moguls. You will see what they do with it. Connell we have that story today. Reporter good morning. So one of hollywoods most powerful moguls is teaming up with one of madison avenues most brilliant minds. William morrison is buying a 49 stake in the Award Winning ad agency. This sale is somewhat of a surprise move since the agency has been pretty vocal about maintaining its independence and had turned down many other offers. The agency said this Alliance Marks the Seismic Shift in the Marketing Industry and will grant unique access to the unrivaled resources and relationships across the Global Entertainment entity. Now, they represent stars. But they bring a stellar client list of their own, including cocacola, american express, motorola. The agency is already worked with stars. That the deal could help compete with rival Talent Agency which recently built its own Marketing Arm that is now being lauded for projects. They say through this investment will be able to join the best artists of storytellers and look forward to creating new opportunities for our collective clients. They did not mention how much the deal was worth. Reports range from 150 million of the way up to 225 million. Also interesting, the personalities that play. Known as being honest, downtoearth, approachable. On the other hand, rumored to have been the inspiration for the entourage character. For anyone who knows the shown those to say the least he has a big personality. Like his brother who is now the mayor of chicago. So we will be keeping an era for how those to belong. Dagen thank you. Connell i was thinking. So we talk to rest as prices being of 0. 3 a gallon overnight with forecasts for higher prices ahead. Cheryl will take over our coverage with the possible fallout for the economy. Dagen and the summer Time Showdown to crown the best doctor and maybe make you some money. You dont want to miss it. I want to make things more secure. [ whirring ] [ dog barks ] i want to treat mo dogs. Our Business Needs more cases. [ male announcer ] where do you want to take your business . I need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, Small Business solutions from at t have the security you need to get you there. Call us. We can show you how at t solutions can help you do what you do. Even better. The most Free Research reports, customizable charts, powerful screening tools, and guaranteed 1second trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. 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When you receive a text, email, or phone alert from their not me system, you can respond instantly if you suspect fraud to help stop Identity Theft before the damage is done. And lifelock stands behind their protection with the power of their 1 million service guarantee. Last summer lifelock protected over 2 million people, and this year they can do it for you. Call 18004174350. Or go online and get 60 days of lifelock protection risk free. Thats two full months of proacti protection to help keep your identity safe this summer. Order now and get this document shredder to keep sensitive documents out of the wrong hands. A 29 value free. Call 180044350. Or go online to lifelock. Com plansafe. Use promo code plansafe, to get your free shredder and get 60 days of lifelock protecti risk free. Cheryl coming up noon eastern. Im cheryl casone. The dow is on track for its best week in four months. The s p, scott martin and David Trainer are here with their predictions on where the markets will go. And then they take the gloves off. They go headtohead in our fox business start Time Showdown. It is the contest that will crown the best stock picker and give you some investment ideas as well. Plus, taking out Bank Earnings season with big wins. But new efforts in washington to break up the banks could crimp future revenue. We will break it all down for you. Gas prices up 0. 4 a gallon with forecasts of higher prices ahead. But that could do to the u. S. Economy. And at the top of the our stocks every 15 minutes. Nicole petallides on the floor of the New York Stock Exchange. Reporter we have had some backandforth action. All three of our major averages are in the red. Just today we had record closes in some way, shape or form for all three major averages. We are setting up with a backandforth kind of day. Of course they pull their money out. Theyre done trading. We watched jpmorgan and wells fargo do well and beat this tree with up arrows, some names hitting record highs. Kugel and amazon and netflix. We continue to watch names pulled back a little bit. As far as the economy and Economic News that we have gotten, we had prices which showed inflation because of gasoline prices that have been on the rise. And then there was sentiment that pullback. The latest month was a pullback. Cheryl the consumer not so upbeat. Thats a great point. Lets bring in new contract ceo. Scott martin, United Advisers chief market strategist. To you first. You say that stocks look good. Only for the next three to six months. What the basin that on . All but Interest Rates. Basing that on the fact the rates are going up. A new regime for Interest Rates. The treasury is having a terrible time getting back below 250. A little bit of interest and yesterday. Flat. Higher rates will put pressure on stocks. Eventually the rates, if its the treasury, highyield, highgrade corporate that eventually gets enough traction from investors to employ to where there will take the yield and not sell the bond like they are doing now. Cheryl interestrate sensitive sectors, certainly the Mortgage Market is a piece of that, but you say that stocks are strong. The city economy as strong as well. I think the days of seeing our macro investing strategies are over. A cyclical change. Coalitions breakdown. Cheryl telling me were not chasing the numbers and more. I have to evaluate the stock by name. And telling you that more sophisticated Investment Strategies will be required to succeed in the future. We have to get back to the good old days were you roll up your sleeves. Understand real earnings. That will make the difference. There are enough good stocks and companies out there that they will prevail, but i do believe there will be plenty of corrections in certain stocks were momentum strategies pushed them too high. And the house of cards will fall cheryl un both telling me that you are seeing impending problems. You are saying the next three to six months. Were you saying . And overall pulled back . To think the market will be choppy, more volatile as the shape of a lot of the peripheral investors, the Online Brokers have sort of the tail that wags the dog. Everything looks like a nail, and these Online Broker clients are looking a technical tools. Cheryl does look at what is happening. Talk about this, if you look at the s p in particular, were looking at a gain for the week of more than two and a half . Will we are seeing is a really strong week for stocks. We continue to talk about ben bernanke, he spoke, the markets moved higher. It seems like what theyre doing and what theyre saying over there are two different scenarios. Make no mistake, stocks love bernanke. He came out after seeing a couple of things different in the last couple of months as far as the market interpreted. That did not mean that. There may be more stimulus buying. Again, the bond market is saying we dont buy it. They clearly want rates to go up which is eventually where the risk is. He is out there and dont forget he is leaving in january 2014. That is another risk. Cheryl waiting to hear what he will do when he has not told us. At the same time on the bond side of a lot of big money investors have been there for five years. The bond market is not really the place to be. Somebody has. Rates have plummeted. A lot of buying outside of the fed. So stocks have not been a bad place to be commended wanted this encourage people from going to stocks. You have to be ready for a new interestrate environments that will be attractive in yield and take money away from stock investment. Cheryl what do you say to that . What is your strategy . I dont agree. I think the cat is out of the bag. The idea that stocks will suddenly go down because people are already recognizing rates will go up, the information is there. Everyone expects that rates will eventually go out. He has come back and softened language to say we support the market. So if the mantra still applies. Cheryl is saying something totally different, and he has a good point. We know all this. The market is moving higher despite this. If there is another story line out there that youre looking at tell me now. Cheryl how long have people said rates are going up . What have they done . Have gone down to a record level lows. Rates have not moved up until the last performance. Cheryl well, that is true. We know all this. This does help certain sectors. Look at the Home Building sector. It is kind of helping banks. Overall there is a good side to this story. Thats absolutely right did you have to keep that in mind. Interest rates only go up the economy does well. Any downside you may seek to Interest Rates would be immediately offset if the fed felt that was slowed down the economy. Rates going up as a good thing and i do believe that the Underlying Health of our economy , the infrastructure we bill related to technology will enable us to go faster. That does longterm bullish even though we may have some very overpriced stocks. Cheryl i have to stop you because we arent doing stock picks yet. We will leave it here for now. Youre both coming back later in the hour. Armed with your latest pick for the fox business summer Time Showdown. Dont mess summertime tv. Seal and a little bit. All right. Bank earnings season starting with the big bank. Profit of 31 . Right here. And back to start with wells fargo. We will get said in just a moment. But that seems to be the real story here. They are a third of mortgages for this company. And revenues and earnings per share were very strong and wells fargo. Did you like what you saw . We have been high all year. We like what we saw. If you take the 0. 5 to for the market has been expecting them to struggle with the mortgage banking transition from refinanced as servicing profitability that had been Holding Earnings flat. So thats 0. 20 an annualized earnings. The multiple is worth 2 to the stock price. Plus, theyre continuing to generate consecutive growth. They have done that for 14 quarters. The one just get their earnings pop. It will get valuation. Yl one ct having this discussion, if Interest Rates go up, that could affect the Mortgage Market. That could have that kind of skittish homebuyer back off. There bread and butter is on origination. You worry about that . Well, 10 percent of revenues and you have a balance between origination and servicing which right now is skewed toward the origination site. So origination profitability will come down. Some of sit on the service and profitability. Some other. The bottom line, again, not to win line on this one business. Its not as if there are susceptible to Interest Rates going up and pulling back. Cheryl zero looking at the numbers. Lets move over to jpmorgan. Analysts should stop wasting estimates on this company. Its up from the First Quarter right now. What can stop jamie dimon if anything . You get a little bit of a flop in the numbers. Yet some adjustments on the debt valuation. You move over to the security side. There are probably ten or 0. 15 related to things that are returning every quarter. If we look at the number were really looking at more of a dollar 45. Cheryl credit card sales volume, 10 . Mortgage originations, wells fargo, but that was about 12 . The and come, the revenue. I mean, its hard to find in there. And they raise the dividend. Its hard to find a case against jpmorgan. I agree. We have a longterm buy. We think that the economic is beginning to it takes some traction. So were just talking about with Interest Rates reflects the strength in the economy. Racine that come through these releases. Cheryl the big banks. Original banks. Like him as well. Thank you. Sent you. Cheryl who will say on this one. Breaking of the biggest banks. Some new life. Senators john mccain, republican senator Elizabeth Warren teaming up. Peter barnes is on capitol hill with the latest on these two and what they are up to with plastique. Reporter thats right. The roosevelt the administration. The great depression. Investment banking from commercial banking and then it was repealed. We saw the barriers break down over time between those two different types of banking. Now senator warren and senator mccain are tearing up. Most financial mother. There are contributing to the financial crisis of 2008. And they are getting, so there warren says that there are bidding partners interested in this from other senators. This is not democrats on one side and republicans on the other. If people want to blame financial and institutions and want to gamble on derivatives for flops or wherever product that someone is creating, this doesnt mean they can do it. It just says the taxpayer back monday. Not our Checking Account savings accounts. These are two very different kinds of financial businesses. Financial banking should be walled off. Public at the right way. Its some of it. This one. As you can imagine, the big banks and wall street firms are not too thrilled with this legislation. Financial Services Roundtable says that the volker rule is good enough and that is enough regulation. Class stiegel is not necessary. Also want to mention before i let you go there will be continuing to speak, speaking to esther george, president of the kansas city fed. She has been a dissenter at the fomc. Since bad policy. We have the First Television interview exclusive with there. Cheryl that is wonderful. Were looking forward to the interview. Cheryl and the market today, big announcement from ups. The Global Delivery company warning. You looked at the stock and the sector coming up next. Blaming rising gas prices. Coming up, the economic fallout. The making a big jump this week. As we go to break, take a look at the metals. Gold, silver, copper, all of it down. We will be right back. Cheryl we are getting breaking news. There are several reports right now that a train has derailed and a suburb of paris. Officials are saying there are many casualties. Getting reports from the associated press, even sky news. Theyre working on getting more informational and now. Again, this train has derailed. All the authorities are saying that there are many casualties. Our regular plan has been activated. That is a worstcase scenario. The interior ministry is confirming the accident but were trying to give more details. We have a map. The train system suddenly teefor overlooking a rushhour right now. A six hour time difference at least between new york and paris. Here is the Train Derailment. South of paris. Again, a suburb. It is the evening commute rushhour periods of chances are that the train had many passengers on it. Again, this is the impression we have right now. Our partners over in europe are working to give more details. As soon as we get an update and potentially some live pictures from the scene we will bring it to you read your. Row, it is time for stocks. Want to bring back and Nicole Petallides. Adelle is down 16, but still this record week that we are seeing. Reporter certainly has been a strong week. Walker closing highs. A lot of names hitting multiyear highest. It is an exciting time. However, we still have a tough economy. The quarterly numbers. That doesnt help the economy. The also noted customers a single lowercost. Heres a look ups. As well with this news, those are up year today. Up 11 . Ups up of a 17 . There is no doubt. Customers are choosing cheaper ways. Cheryl the bottom of the economy. The stock, all of the sector. Think of reticulated the news. And less than todays teen fox business will be slumming, biking and running in that new york city triathlon. For fox contributor. We will be competing as a relay team. To participants out to the race course to show each and every step of the truck. Around the world, all of them now coming into new york city. On facebook, twitter. We are supporting that. He lost. He will be showing off his skills tonight at alfresco. So building homes for heroes is a great cause. They built custom mortgage three homes. The triathlon topic. I have charles right here. Calling me cannot triathlon stock. Stocks you can look at. The crazy thing, the pure plays. There were public before. The republic before. Obviously this comes to mind. Each rating. Pick up, but the stock is one of these that has been an real steady performance. The concern. Interestingly enough, 14 holes on this. Wall street is iffy these days. Long term in your portfolio you go wrong. Its a little bit of an odd play. People say gorman, out of that work out . Well, the forerunner, i dont know if you were runts during the race, but this one apparently is really topoftheline a great watch. I actually do. And it is wonderful. I have breaking news i have to get to. Cheryl thank you. We are getting more breaking news. This is out of london heathrow airport. This is also breaking news out of europe. At this point it appears an Ethiopian Airlines plane which appears to be a boeing 787, again, this plan on fire. We are getting few details about this, but the plane caught fire. No reported injuries. No reported injuries. The plane parked. You can see the plane was at the gate, but a fire on an Ethiopian Airways plane. It appears to be a boeing 787. What is interesting, it was setting a 52 week high. Stock is backing off. Whenever we see reports like this that involve an aircraft or an airbus, you do see an immediate reaction. Here it is. Down to 29. That drop, and you can see it on your screen. Fiftytwo week high down on reports that we are getting out of heathrow that this Ethiopian Airways plane caught fire and that the report is it is up boeing dream liner, and we are trying to confirm that. As you can see from the trader perspective, that is what they are seeing. This has been a tough week. We have the San Francisco International Airport incident last weekend. Actually tomorrow will be the one week anniversary. That was a boeing triple seven. A different airplane. Certainly had issues. Sabir, not the triple seven. Many reports now pointing to pilot error. Lets bring in scott martin, standing by. As we take a look at the entered a chart on our screen. When you give reports like this with you confirming our not use sell lorimar, may buy on the news. And we learned that on the battery issue. That hurt the stock. That was kind of the cell on the rumor and buy on the news. That is kind of similar. You always assume the worst with things like this. How they react. That tends to be a buying opportunity. If things are not as bad as they first appear that usually is a great entry point for a stock like this. Cheryl so we look at what has happened, this is important to point out, certainly the tragedy in seven cisco. If you look at the stook, boeing has recovered this year from the 787 issue appeared recently there are potential lawsuits. When you have an aircraft like the dream liner, millions, billions spent on r d in the issues that have been coming, whether its the battery, engine trouble, are now worth seeing. This is just breaking. 1,000 things could happen. Someone could have drop something. You never want to speculate. Certainly they do not really need another story line like this. Having said that, the stock continues to perform. What do you attribute that to, the strength of shares of boeing . I think it is pretty much to your point. What did you see happen with regard to the orders . Un several airlines back the commitment to using their plane again. So that is the longterm story that we have to look at. A dream liner is a great plane. Very cutting edge and is something that allow passengers want to fly on. You have seen several studies of reports from people that have fallen on them. They absolutely love them, and that is the sentiment that is out there. That is eventually will take the stock into the future here long term as far as the product they have out there. Cheryl to you think this is affecting when you look at the different airlines, the major carriers around the world, and i cant really speak to Ethiopian Airlines, but when you look a united, the only u. S. Carrier that actually uses the boeing 787, is there concern that there will be blow back against the United Airlines if they have to continue to sink money into maintenance . Sure. With anything, yes. If something happens. Certainly if one of the plane catches fire. Thats not good. Dont get me wrong. Thats not good news, but also the American Fleet is taking the right approach htheyre watchin. Its a new plane. They want to see how it fares, but ill tell you eventually this gets more immersed in our travel schedule. You will see more airlines adopted because its a great plane. Cheryl im looking at the stock, the volume. Its intense as we continue to look at live pictures. This is what traders and others are watching. Again, the reports are that tv footage that appears to be s787. Down over 3 in early afternoon trading. I want to remind our viewers that were still getting details about what happened. No passengers on this plane. An Ethiopian Airlines jet. Its at heathrow airport. It was at the gate. You can see it on your screen. Its clear. Were watching a major selloff right now. As these reports continue to come in, the footage, this is what traders are seeing, what you at home are seeing on your screen. Etf been airlines is the customer of boeing and the 787. There are not that many aircraft. Maybe 50 or 60 at the most. Thats i estimate. Yes. That seems a little bit high. More coming on line. With any new product whether its an ipad, you dont want to hear anything happening battle with this first launched. Certainly in this case that will come out and address this. Its something related to the plan specifically. And then it becomes the pr messaging, we will fix it, move on, and get the plane flying right and other airlines interested in buying it. Cheryl i want to let our viewers know, the fire has been extinguished. Dow jones is saying this is a 787. The queen of sheba. Anyone that is watching the Television Screen right now can look at the aircraft and see that the Ethiopian Airlines jet, the fire is extinguished. The fire is confirmed. Also, we are hearing that there were no passengers on the plane. And has just been confirmed by officials from the press officer there. There were no passengers or crew on board at the time of the fire at this point no reported injuries. Emergency services, as you can see. We are seeing this. The Emergency Services are on scene. Police, local police and not going to take over control of what will be an investigation of what happened on this aircraft. We are talking nearly 300 passenger jets. The capacity of the plane is what makes it so attractive. Dentist the Ethiopian Airlines. Former inspector general. Its always great to have you. Maybe not. Incidents involving aircraft around the world. What do you make of what youre seeing on your screen . We dont have the details yet immobile what you think this means . The safety of concerns about the 77 . Well, no doubt about it. Bad news for boeing, especially since the thought that they have the battery problem licked. Also bad news for the faa because they specifically said there were not going the final report. Before giving boeing the right to get the plan back in the air, now this is going to cause the faa to reconsider. It does pose ramifications for the possible by eight to say this because in the long run this plan will work of all the bugs. Service record that will surpass eventually. Reconsider the thought of lead in the plan back in the air before this more affirmation of the previous. Is bad news. Cheryl you really do think its interesting you say that. As we saw with San Francisco, the triple seven involved. All reports and investigations by pointing to a pilot error. The investigation continues. A lawyer saying is that the 787 as an aircraft could actually surpass the triple seven down the line. The investments. Bed triple seven versus seven a seven throughout history, every new or model of a plane has eventually surpassed the record of the previous model which is the whole point. Theyre want to keep developing these planes. The service life of an aircraft, the usable life is about 20 years. And with every new model of planned become more reliable and they have a longer service life just as the triple seven just passed the record of the 787. Newer models of 737 have of far better record than all models of 737. The seventh 47400 was a much better plan. In fact 1. I told people dont even get on a 7472 wondered. Thats just the way it is. Fortunately our engineering and science gets better with every plane model. However, that being said, this fire is not good news. They are without a doubt probably hoping that it was somebody started a fire in the bathroom would be better news than a battery meltdown. Cheryl i want to bring back and scott martin. Want to point our viewers attention to the boeing stock. Making good points. Investors seem to agree. It backed off of its low point, but it is still back down. This was within the last moment as we were speaking. This doesnt seem to be, this is a rough day for the company. Not a good day to be a blow we stockholder but plucky at the market we shoot first and ask questions later. Whether it is somebody in the bathroom setting something on fire is bad imagery. With any stock related to it but there is some sympathy there. But if they take care of this to fix this long term with the ntsb ideas youll see them a merged as a Strong Company as the 787. Cheryl shirley after 430 local time in London Police were informed of a fire of the ethiopian jet the fire has been extinguished but at this point theyre saying that this is unexplained at this point. They are investigating what happened but even if there is no crew on board what about the pilot . Maybe they were in the cockpit or doing a ground check as the only circle before we dont have a lot of detail so we have just speculate what happened with the fire on a park to get . To make there have been many incidents is when it is the ground crew or the Service Group their authorized to actually move the jet without the pilot so theres a lot of people that could be working around that jet and things could happen however realistically of fire on the ground around the plane is usually the plane. It is not like tea is a carefully guarded air Operations Area where somebody starts a fire in a wastebasket. Cheryl i am piecing together the history in my head but back in bbston was a bad airline was part that was a battery issue. This is after everybody had got off the plane in the cleaning crew was on board. Once it is part you could use Battery Power when it is part sometimes to bring up the power from the airport sometimes use the power of the plane when it is on the ground. It is an expert in the best of all worlds boeing whether they had the exhilarate how are you neverending or Something Like that, it is possible and boeing name sure hope it they are hoping it is Something Else the most likely there using the planes power on the ground and had problems. Cheryl so another question mark about the lithium ion battery. So now were going to bring in Nicole Petallides at New York Stock Exchange what are traders say the saying on the floor . The stock is now down more than 6 . They certainly are and here on the floor of the exchange everybody is so surprise of another appalling incident. You know, what to see that for any company or them when they have been plagued with so many headlines. Look at the intraday chart you can see the steady lowvolume but then clearly how would drops off dramatically as news of the fire broke them stay on the chart for one second. There we were watching bowling today boeing today this is a 20 year chart it was it trading as high as 108 it really has been running up it was the number two best performer in the Dow Jones Industrial average behind hewlettpackard now obviously it has lost some momentum but now all the questions begin and obviously investigations and why now the fire . And now it is ahead of the weekend that is not somebody would say let me by a right angle. Cheryl you just mention the fact in london were still getting breaking news at a paris that is a Train Derailment in the subways you have too big stories out of europe. That is an easy connection to make certainly and talk about the intraday to use the term steady eddie and want to bring in scott martin lowvolume but if you look at the volume pickup of 17 boeing and pitchers when lighted is stunning to see the reaction from traders. Yes. Forget it is also friday afternoon trade in the summer. Sova whole volume trade will be easily pushed to the down side with the incident like this at heathrow. No surprise that the stock is selling off but go back to the battery issues with an oil filter problem that eventually was corrected so it was a nasty couple of weeks for the stock but it did become the steady stock began so minus a drastic issue i think he still have to look at the plane as a longterm product. Cheryl i know you have a long history of the eight faa and i misspoke. But the pope but to put the focus back on the 787, if you were on the Investigation Team right now metropolitan police are on the ground, what is the first thing you look for as a clue immediately . You will go straight to the battery compartment because people say you dont speculate. It is the end. It is trial and error. They will go straight to that battery compartment and look however they also have the biggest flight data recorder in history they will have over 1400 data points. If the plane was powered which give must have been if the batteries were involved of the to have data to know immediately what happened all i have to do is let the battery compartment to see if there has been a fire. Afford their sake lets hope that it is pristine then youll have the same thing all over again and the ntsb will have to dispatch a team and the faa will reconsider its approval for flight. Cheryl my next guest wednesday by phone. We were talking about the Immediate Response what does the faa do at this point . I dont know to be honest. The real issue right now and i should also mention i am a commercial paul Light Private but the important things is whether the aircraft was under power just sitting there. The spokes man was confirming a fire on board and they dont know where but it was sparked by a self is a the auxiliary power unit fire . It does that sound like it. Cheryl hold on. Readjust seeing a statement from boeing. We are aware of the events we have boeing personnel on the ground at heathrow to fully understand and address this. Did not mean to interrupt you we have now heard from boeing. They will certainly stay awake a lot in the next couple of days to figure this out. If this is another battery issue it will fall pretty hard. There is always the chance it could have been something random but another 77 issue . That will not help boeing as well. Cheryl you mentioned you are a commercial pilot but those that look at what happened with the triple seven is there francisco last week and although most accidents happen on takeoff or landing but if you have a jet that is part and empty at the gate, and this is the head scratcher . Absolutely. And when we saw it was recertified a battery fire in the year is one of the scariest thing as a pilot can face in the cabin. Little like any kind of fire but the battery is tough because it is almost impossible to put out in the year. If this is a battery related issue will be bad for boeing cheryl going back to my experience as a flight attendant, you have a plane that will get on the ground immediately. What about the oil filter problem and a fire do they connect . I cannot imagine a less the played was plying recently in just put away or just powered up for some reason may be made and had not been felt there to hook up the ground power unit to run some test or do Software Updates and power down and walked off. We dont know. But a fire that starts from nothing . That will be tough to understand. Cheryl stand by. Now lets bring in one of our aviation experts, tom sullivan who is also a pilot another issue. It does not surprise me when i heard the news it was a matter of when. When they released the 787 back into service in late april, at the time they never found a solution they did all kinds of things to minimize but they never found a solution why the other 77 and had fried had fires. Cheryl afire lithium ion battery and now we deal with face of the first thing they will look at is the battery compartment. No question. The lithium ion battery has a history of flaming up. And the way you charge it and maintain and the temperature lithium ion had no problems nothing but problems for years and airbus designing the new a 350 and they said forget it. We will go back to the good old battery. Cheryl good point. But airbus saw the issue ambac the way. But i think the Paris Air Show was one month ago . Is still looking at live pictures of the 77 . But there is latitude it is bad but they have a pretty good customers just like pan am customers it was great but they will have to god of their way to make sure they give customers adjustments for their losses thank give additional training. They can mitigate the damage but they will have to hustle. I think they will. Cheryl now rob, you are a commercial pilot but from the faa perspective i think the timing would trouble me because i would say this is too much, too soon. It is one thing with the 737 but the 787 with this many issues in the six month time frame that has to give pause to cfa a. It is not just the number of issues it has but it is the severity. The battery issue, if it is. We dont know that but we have been extremely lucky because all of these incidents have occurred on the ground. Right now i would imagine this ceo from boeing having a chat that says you have some time but not much. Cheryl this is the main International Airport in london. Ethiopian airlines jet, the queen of sheba. We just got a statement from boeing saying that theyre on the ground and already have personnel. There was a fire on board that started 4 30 p. M. London line excuse me london time. No crew was on board and emergencies who services and the fire is extinguished know on the plane but tom sullivan, as so many questions as the investigation ramps up. You have to wonder. Know if the symptoms are how can they reconfigure this to the Old Fashioned battery . In the batteries are used mostly while youre on the ground. They had an issue while theyre in the air bridge generally the generators are doing the work to supply electricity the batteries are used on the ground to start the airplane, things like that. But the pilot does not have to be there to have the aircraft powered up. We want to be very careful we dont know what caused the fires but these questions have to be asked considering the history of the lithium ion battery which is the aircraft that you are seeing right now against the boeing stock is selling off. Nicole petallides talked about that now its bring in keys from the floor of the New York Stock Exchange. There such a factor of the market and what happens as far as stock is concerned . It is clear is a primary component of the dow and with the transport index. But quite frankly we were sitting around expecting a pretty lackluster session today as we wait for earnings to kick in then we saw the market selloff. Boeing has the big impact. Five or 6 at the end of the trading day you get the index to sell off the way they did. Cheryl we are getting some details. With what is happening a dreamliner 787 n. Ethiopian airlines we are finding out now were not getting a comic yet from of Ethiopian Airlines but it was the first of eight dreamliner operators to return the jet to service on april 29. Because of the lithium ion battery. The first of the eight carriers around the globe just from the airline they have the question if they want to keep the aircraft in service. And i am sure they want to keep in service but theres also other issues. But if you have problems of the battery on border on the ground you dont have a catastrophe but it is for the long haul. They will be looking to boeing to make a right they cannot have a huge schedule disruptions did not have that many planes. It is not like delta and they just get more. Ethiopia will be looking to boeing to make a right and they have the ability to do that. Yes, they were out front and they put the plane back in the air on longhaul right away. I think boeing will make a rights. Cheryl they are looking at all of this they will get someone 90 aircraft themselves . Absolutely. In as they are headed to the airport but i did forget about that other airplane issue. But i have been told that this has been designed around the lithium ion battery and it is not easy to say pull them out and put the other ones back in. It is not quite that easy. And the problem is they will have to make it right. To ethiopia and all the other carriers but what kind of discount . They are very good about when there is a problem to we find out precisely what is the core cause the problem to fix it. Then never found a problem but the problem that theyve never identified and it has never been fixed. I just thought it was a matter of when. Cheryl can you hear what tom just said . Respond to that. He is right. It was built specifically as the most powerful player in history in terms of Battery Power delivered to the plane and passengers per cry for gannett exactly but it is like 50 percent more powerful than any place else there in terms of electrical power delivered within the plane. Is a huge flying battery in that is what made it so cool you could use all the instruments and the pilots could have a complete the electronic flight deck and this truly was a flying spaceship. Cheryl it is a beautiful aircraft. But the controls alone are visually stunning. That is what makes it so impossible to say we will put in some energizers. [laughter] does not work that way. Cheryl that is a good point. More reports are coming in and out of london they had to suspend arrivals and departures at heathrow so that will be a disruption to International Air travel as you noted is the major hub especially from the middle east or from the west. So many times i talked to people that are nervous nellies if there is a story about aircraft problems id i am always a bravado. No problem. I am telling you until we figure out i would not step foot on the 787. Cheryl i think tom sullivan is making an excellent point. He also is a pilot. Thank you for being here also the department of transportation, mary, and scott to give his perspective on the boeing stock selling off on this news live pictures coming out of heathrow. We will reschedule the showdown i promise. I was looking forward to that. And also keith and Nicole Petallides at the New York Stock Exchange. And another problem on board fire, and the crew was not there, a quick commercial break well be right back. Continue being with their breaking news fire extinguished among the boeing 787. Shares are selling off after a string of incidents involved with the tree later. We will bring you the very latest. Lori a busy day this morning wells fargo help to kickoff a Bank Earnings on the right put the warning from ups holding back the market. Adam also a call to break up the banks with a push from Elizabeth Warren. And Dick Copiague with his twist with class d gold fell the ethiopian airliner 77 dreamliner. The theft buyer has been extinguished and airline is parked at heathrow. No injuries in the play wasnt yet the time. So departures and arrivals have been suspended and they said we are aware of the bin and we have personnel on the ground at heathrow we want to address this to head to the floor of the New York Stock Exchange with Nicole Petallides to see how investors are addressing this. Obviously it is