The dow as staged a friday rally every week so far this year. This coming friday however, could get interesting as sequestration could take affect pumped up gas prices. The National Average for a gallon of unleaded jumped from 3. 64 cents to 3. 78 Mortgage Rates are on the rise. The 30 year fixed climbed to 3. 56 could stir up or slow down home buying. The 15 year remains the same at 2. 77 politics and money could make up a big part of todays trading session. Daniel stecich of Tjm Institutional Services joins us on the show. Good morning to you. Good morning. Lets start with the United States. We have the sequestration question. What will it mean for traders today . Heres what im thinking the sequestration thing will do in the long run, im not to worried about it. I think the market will still grow. I dont think it will have a tremendous impact on our gdp. But in the short term going up until friday when we see some sort of a decision one way or the other. If they dont look like theyre coming to a resolution, the market is going to get a bit scared and youre probably gonna see a bit of a pullback. For two reasonsone the sequestration issue and secondly the markets rallied quite a bit. I wont be surprised to see somewhat of a pullback. Across the pond, italy is wrapping up an important election that could be key in europe. What will that mean to trading . Its a little early to take any subtance out of it right now. I wanna see how this plays out and what impact its gonna have on the eurozone if any and then well work from there. In the bigger picture, again, i dont think any eurozone issues are gonna have a great deal of impact on our markets but it will have a little bit. Again, a temporary blip one way or the other. Well have to see how this plays out. What sectors will you be watching . Including maybe the cattle situation with sequestration . Just looking at the equities in general id like a pullback. The materials have broken down a bit. I think i would look at the materials as one area to maybe start investing in. I believe were at the start of a decent recovery here and if they can get over this stuff in the short term the material sector should do well. Good to have you on the show. Have a great trading day daniel. You too. Thank you very much. Here we are down to 5 days before across the board spending cuts known as sequestration, could become a reality. President obama heads to virginia tuesday, where he will deliver a speech at Newport News Shipbuilding which produces navy ships. Cuts to the Nations Defense budget could top 45 billion dollars. I have been very clear, these kind of arbitrary budge cuts will have an adversarial effect. On our military rediness. If there is no deal out of congress. There will be a total of 85 billion dollars in automatic cuts. Those reductions could slow air traffic, as security and airport maintenance workers are forced to go on leave. Cme group tells the Chicago Tribune sequestration could also effect cattle trading and more. Livestock and dairy trading contracts depend on the u. S. Ag departments inspections. Meanwhile, gop lawmakers characterize tax increases as a nonstarter to the debate. Lawyers gather today in new orleans for the civil trial against bp. Its been just about 3 years since the explosion aboard the deepwater horizon rig that sent oil spewing for months into the gulf of mexico. Billions of dollars are on the line for businesses and residents affected by the spill along the gulf coast. This is a great opportunity for the Obama Administration to hold bp accountable for the problems that it is causing today and the additional problems that will reveal themselves over the coming decade. We know bp can afford it it and its just going to hold them accountable and do justice for the people and wildlife of the gulf of mexico. Bp faces a penalty of more than 21billion dollars for the equivalent of nearly five Million Barrels of oil spilled. An attorney tell us bp is likely looking for a reduced penalty. They always ended up starting off with huge numbers and then went down from there. So bp is gambling that history is going to repeat itself, and the extent of the damage its going to be facing is lower than it is. Back in november bp agreed to a 4 billion dollar penalty in its federal criminal case. In our cover storythe fix for boeings troubled 787 dreamliner thats become more like a headachemay be a bigger box for the battery. Theres obviously more to it, but thats where a team from boeing started when discussing fixes with the faa. For a month and a half, overheated batteries have kept the entire fleet of 787s boeings latest aircraft on the ground. Now, sources say boeings plan to get them back in the air is to place more ceramic insulation between the batterys eight cells. Itll make the battery bigger, requiring a bigger box and more insulation to keep fire from escaping. Boeing hopes to finish tests in april. Thats earlier than i thought. anytime its before the may or june timeframe is positive from my perspective. The remedys aim is containment. That word also applies to the Public Relations dilemna boeings faced since a fire and subsequent grounding of 787s in service. Boeings released this video of an uneventful twohour 19minute test flight in seattle along with statements of cooperation. But if seven airlines cant fly the 50planes delivered so far. What then . Boeings going to be on the hook for this one for awhile. I think theyll make some sort of concession to customers, maybe discounts on future purchases. Something will be worked out. Its up to the faa to lift the order grounding the aircraft. United Airlines Announced a contingency plan to use other aircraft on anticipated 787routes into june. A decision about detroits financial emergency could happen this week. The governor of michigan may appoint an emergency manager to run the motor city. Although its reported several people are declining the job before its even available. Detroit is struggling under 327 Million Dollars of debt, a declining popultion declines, and Retirement Fund thats short 14 billion so far, the mayor has proposed reforms for the city. And, the governor has said no to a bailout. Lawmakers are making strides on a bill for immigration reform. The team of eight bipartisan lawmakers crafting the bill will gather this week. Its follows a series of meetings between business and labor leaders. Those groups have now outlined principles for how businesses will adapt to immigration changes. Members agree that the country needs a new worker visa program. And also stressed the need to create a federal bureau to monitor labor needs within the u. S. While the meetings resulted in some solutions, lawmakers say more progress is needed. The Us Government is in the race for justice against lance armstrong. The department of justice joined a civil lawsuit to reclaim the 30 million it paid to sponsor armstrongs racing teams. The government could claim fraud for armstrongs admitted drug use while riding in the Tour De France for the u. S. Postal service team. Armstrongs attorneys say his contract did not specify bans on doping and the Postal Service benefitted from its sponsorship. Theres a new option for individual investors. Its called optionshop. Its designed for retail traders to use options to minimize their commodities risk. Its Available Online and Alan Knuckman who joined the firm as chief Market Strategist hopes it brings the convenience thats existed for equity options to individuals wanting to trade options on futures. For the month of december, the first time in our history, electronic trading surpassed pit trading here and this is only going to continue and it will help out the retail trader. The online futures broker has an educational component geared to help novices get started. It also includes a feature called requestforquote which provides information to get better pricing for options spreads. Ceo pay continues to draw attention. Recent filings show david nelms, the head of discover Financial Services received a pay package worth 9. 9 Million Dollars 2012. Down 28 . Because the value of his stock dropped to roughly 4 million over the course of the year. Michael corbat the ceo of citigroup. Took home a 11. 5 Million Dollars last year in compensation tied to the banks performance. Shareholders rejected a 15 Million Dollar pay package for former citi boss vikram pandit. Bloomberg news also reports ceos from jpm morgan, Morgan Stanley and bank of america did not receive cash bonuses last year. The disaster loan deadline for Superstorm Sandy survivors is looming. Applications must be returned to the Small Business administration by wednesday, february 27. Or submitted on the website at disasterloandot sbadotgovbackslashel a. Loans have some rates below onepointseven percent for residents and four percent for businesses. Walgreen has a new way to educate employees. With walgreen University Students can earn credits toward actual degrees. The campus near its deerfield, illinois headquaters includes a mock drugstore and more than 100 courses. Walgreen executives and faculty from area colleges will lead the classes. The big reveal of the new look for wendys happens this week. This is a sneak peek. The fast food chains new logo will appear in ads, packaging, signs and crew uniforms. It still includes that famous portrait of wendy thomas, daughter of the restaurants founder dave thomas. Turns out india has a sweet tooth for americanmade chocolates. Analysts say india is the Fastest Growing market for chocolate in the world. the nations growing palate for the sweet has us chocolatiers heading east. In the next 5 to 10 years cnn says it will be a top market for the treat. Still to come why going a non traditional route with your retirement plans may be beneficial in the long run. Thats later on. But first. Once a solid career path, why the Legal Industry could be facing challenging days ahead. Thats next. Law schools are in a crisis situation. There is a sharp decline in the number of students applying and its putting a strain on the schools. Harold krent, dean of chicagokent college of law is on set with us this morning. Welcome to the show. Thank you. Good to be here. What are some of the factors that contribute to this problem . The Legal Industry is being restructured. There are technology reasons and also reasons of pressure from corporate clients that are just not willing to pay for the so termed inflated bills that theyve been seeing in the past. As a result, law firms are hiring maybe 50 percent fewer students than they used to hire. There is a trickle down effect. And thats being felt all across the country to the tune of a loss of tens of thousands of jobs nationally. Is there a glut of lawyers right now . Theres probably a glut of lawyers right now if you look at the number of new job openings for lawyers and expected students. Some have estimated that theres going to be perhaps only one job opening for every two graduates in the next coming years. And that does spell a crisis or something close to one. Here are some recommendations that are being made to possibly alleviate the situation including cutting the curriculum to two years at law schools, simplifying the bar exam, and allowing more on the job training. Are these viable possibilities . I think they are. There has already been discussion in some states to move the bar exam earlier to allow students to go out and either extern with different firms or apprentice or network so they can find a job. I think thats a blessing. The problem with the two years of law school is that it will reduce money and opportunity costs for students but students will get less training. So they will be less able to meet the demands of this new reality in the jobs. One of the things about Legal Education is i think were doing a better job ironically than they were 25 years ago in preparing students for the practice of law. Its expensive and it takes time. And so we dont want to cut back that which were doing well which helps prepare students for the marketplace. You are the dean of a terrific school. What are you doing at your law school . We are starting a couple of new programs. We have an incubator for those who want to have a small practice and actually we give them rent free space in order for them to develop their marketing and their ability to go out on their own. We started a compliance program. I think its the first one in the United States for law students who want to go into a job where you dont need a j. D. But the legal skills help prepare you for that kind of approach. Good to have you on the show today. Thanks for stopping by. That is harold krent, he is dean of chicagokent college of law. Still ahead retire your worries. New options for your Retirement Fund that may put you at ease. Thats next. I wanted to be in the military since i was a kid. I served a total of 16 years. And at 19 years old, thats the first time i ever saw somebody die. Coming back, i was raging. I started having pretty horrible nightmares. I started drinking a lot. I guess i never recognized it in myself. It all starts with going to the va. Theres a whole community of veterans that just want to help you out. Its for the guys who couldnt come back, you owe it to them to live well. Because theyre not here with their families. And theres a big advantage parents can give their kids making sure they get active at least 60 minutes each day. Studies show that physical activity not only helps kids stay healthy, it can enhance important skills, like concentration and problem solving, which can improve academic performance. This means physical activity can help your kids in the most important game of all life. Danica patrick for the millions living with copd, breathing becomes a real struggle. Copd stands for chronic obstructive pulmonary disease, but you may have heard of it as chronic bronchitis or emphysema. Over time, it makes it harder and harder to breathe, until you feel like youre breathing through a straw. Copd is the 4th leading cause of death in the u. S. It kills one person every 4 minutes, and it took my grandmother. An estimated 24 million americans are affected, but as many as half of them dont even know it. Its a race against time to spread the word about this serious disease. If youre over 35 and have ever smoked, you could be at risk. The good news is, there are steps you can take to improve your symptoms. Im danica patrick, and i drive4copd. Take action today to breathe better tomorrow. Join the movement at drive4copd. Com. Take our screening questionnaire today, and talk to your doctor. Investors have more options of places to park money for their Retirement Fund. Greg mcbride of bankrate. Com is on set with us this morning with an idea or two. Its great to have you here in person. Its great to be here. Thanks angie. Thanks for stopping by. Lets talk about this roth 401k ira idea thats new. Whats happening there exactly . About half of employers that offer 401k plans also offer whats known as the roth 401k. Which is just basically another option for people when theyre making their contributions. Rather than putting in the money before its taxed and then having to pay takes in retirement when you take it out the roth is the opposite of that. You pay taxes now, but the withdrawals in retirement are tax free. But doesnt that mean a big hit up front for some people . If youre looking at converting some of your existing 401k balance into the roth 401k yes you will pay a big tax because all that money that previously hadnt been taxed now gets treated as taxable income. So i think thats going to be a hindrance to a lot of people being able to take advantage of it because you have to pay those taxes with money outside the 401k for it to really pay off. What are some other places then to put money . Look at an ira. A lot of people think its either or between a 401k and an ira but the reality is you can and should have both. Take advantage of your employer match on the 401k first but then look to maximize that roth ira as much as you can. What about people who are now reaching that retirement age. They have been putting away money faithfully and they have to draw down and they need a safe place to harbor some of that money but they are forced to take some of it out. Taking the required minimum distributions but you dont need the money to spend. You dont have to spend it. You can put it into a savings account or something safe so that you have it when you need it. Another option is have that money taken directly from the ira going into charity that way you evade any taxes whatsoever but still satisfy the requirement for that minimum distribution. And i know youre keeping your finger on the pulse of whats going on with americans these days. Whats in your latest survey . Only a little bit more than half of americans have more money in savings than they do in Credit Card Debt and peoples feelings of Financial Security did slump this month relative to where we were a month ago. Net worth is really the only positive indicator we saw this month. Thats going up. It is. Thanks to the stock market and a rebound in housing. The stock market has been terrific. Good to have you on the show greg. Thanks for having me angie. Still to come on First Business. A trader who hopes to hit the jackpot with a gambling stock. Hit a landmine when i came here, i couldnt move. [male announce david was broadsided on the highway. They werent very hopeful that he would survive at all. [male announce their traumatic brain injuries have yet to heal. The way i describe it is youre just afraid. Am i going to start forgetting things . [male announce tbi is as serious as any battlefield injury. Thankfully va has made important advancements in tbi so if you think you or a veteran you know has sustained a brain injury, get screened. Andrew keene, president of keeneonthemarket. Com joins us now for chart talk. And andrew youre looking at Las Vegas Sands. Is this stock worth the gamble . I think this is a great opportunity to get in. Ive been looking at this one. Its been on my radar. Mgm, wynn, and Las Vegas Sands. In Las Vegas Sands it did sell off on wednesday and thursday when the stock market sold off. But if you look on thursday, huge tail on the bottom. Got down to 48 dollars. Found some support down there. Closed almost unchanged for the day then on friday someone came in and bought 17,000 of the made 52 and a half calls. I talked about this in my trading room. Stock was trading 4985. Once this broke the stock was off to the races. Closed almost a dollar higher from there. Im long for Las Vegas Sands by buying the may 48 calls. So the people who bought those calls on friday at the 52 strike, they need that stock to go from 50 above 52 in order to make some money here correct . Yes and no. As a option trader you can get out of an option position whenever you want and you can always hedge a position against stock. When the stock was trading 4985, someone came in a bought 17,000 of these calls. It was a 4 Million Dollar bet or gamble on Las Vegas Sands. That bet paid off. They paid 2. 05 for these calls. These calls went to 2. 65 by the end of the day. This position is not closed yet but they have paper gains of almost 1 million so far. I think las vegas can get up to recent highs of 55. The 52 week high is 60. This also gets the earning catalyst so this is why i played the may options as well. The earnings are in april so you get it in the may options. Thats why i wanted to play may. Were gonna follow up with you and see how that all works out. Thanks andrew. Thank you. We are out of time for this monday. Coming up tomorrow. What Small Business owners need to know about fees for llcs. From all of us at First Business thank you for watching. And have a great start to your week
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