S p 500 had the second best run of the year last week. Friday, the dow rallied 3 points and the s p 5, good enough for record closes. The nasdaq gained 22 points. Gold moved up 3 and oil 1. 12. At t is buying leap wireless for 15 a share. At t is paying cash. And, twinkies go on sale today after being off the market since last year. The new owners plan to put the treats in 110,000 stores versus the previous 50,000, making the treats easier to find just what we need. Were off and running on this monday morning with joe cusick of options express. Good morning, joe. Good morning, angie. What are you watching for this week . Last week we had a recordsetting week in the stock market. We have earnings coming out today from citigroup. Whats on your agenda . You know, as far as citigroups concerned, we did have wells fargo and jpm, they announced last week. They beat. Were going to keep an eye on that with citi, but citi, the volatility in there has been low not expecting much. As far as the markets concerned, were going to keep an eye on the data. Specifically we want to watch retail sales this morning. What will you specifically watch for . Last week we had samestore Sales Numbers coming in from costco and gap that were very favorable. What do you expect . You know what, were looking to see if the consumer is still spending. If they are, thats positive. Youll see that the sector thats going to really resonate, if, in fact, they are, is going to be those small caps, those domestic names, those smallcap names. Keep an eye on that, and thats what were going to be looking at this week. It was a rough day on friday for boeing, especially for boeing stock in light of the fire on the 787. What do you think is in store for this trade . Volatility. Theres going to be some big moves. Volatility is at its highest level that weve seen all year. Its up about 100 yearoveryear. So, were going to see some volatility potentially in boeing. Joe, come back soon. Thank you for your thoughts today. Thank you. Damage control at boeing investigations continue into fridays fire on an Ethopian Airlines 787 dreamliner at Londons Heathrow airport. No passengers were on board. A separate technical issue was also reported friday for a floridabound dreamliner, which was rerouted to its takeoff location of manchester, england. Investors reacted quickly to the news. Shares dropped more than 6 friday before bouncing back above 100. It reignites safety concerns that started back in january when the jets litium ion batteries overheated, eventually grounding boeings entire 787 fleet. Wall street is nervous. They see the 787 has had these problems. Boeing has gone overboard to assure everybody that these were hiccups, but a pattern has emerged, and i think thats why wall street has really taken this seriously. Boeing assured airlines that the production line was going to move ahead fullsteam and if they have to retract that, thats going to be painful indeed. That was joe schwieterman, a professor at depaul university. Boeing says on twitter it is working fully to understand and address this. Silcon valley is not giving up the fight for immigration reform. The senate has passed unprecidented legistion that includes stronger border controls and a pathway to citizenship. However, republicans in the house plan to push for their own version, aggressively. In Silicon Valley, Tech Companies often hire Foreign Workers from asia and india. Facebooks Mark Zuckerberg is shelling out his own money to push a bill that allows hiring workers born overseas. These are highlytalented or at least highlyeducated workers, so it would be appropriate to keep them in the u. S. If thats where they want to be. However, its not that there is a shortage of talented workers, theres plenty of talented workers. Its a question of costs they want to keep down their business costs. That was tom foremski of Silicon Valley watcher. He believes Silicon Valley is out of touch with the rest of the nation. Congress will likely take a shot at healthcare reform with a vote this week. House Speaker John Boehner is attempting to delay the section of the law requiring nearly all americans to buy Health Insurance in 2014. About a week ago, the Obama Administration decided to give an extra year to businesses to ramp up for the new law. Speaker boehner believes the same rules should apply to the rest of america. A white house aid says the president s landmark legislation is moving forward as scheduled. In todays cover story, how much you pay for goods and services often varies by whos providing them, where theyre located and how much competition there is, and its as true for healthcare as anything else. Whats also true is that not everyone knows they can shop around. Possibly the easiest place to find discrepencies in healthcare pricing is among your local pharmacies. In one city, a 30day supply of the antibiotic cephalexin ranged from 4 to 15 with the same Health Insurance. So what do you do when you have to get a prescription . I go to nearest walgreens or rite aid. Do you price shop . No. I wasnt aware there was a difference. In healthcare, prices vary widely for hospital procedures and the physical therapy that may follow. This spring, the u. S. Department of health and Human Services found in denver, colorado, Hospital Services to treat Heart Failure ranged from 21,000 to 46,000, and in jackson, mississippi, from 9,000 to as high as 51,000. Do you think youre becoming a more aware Healthcare Consumer . No, i dont think theres much education out there for the consumer. The health and Human Services department wants to change that. As part of healthcare reform, its making 87 million available to states to improve Health Pricing transparency. Groups such as chicagos health and Disability Advocates say the information is long overdue. The reasons behind the pricing differentials are something we dont know at this point. One pharmacy chain, rite aid, says a number of factors affect drug pricing, including cost of a location, utilities, the overhead to operate the pharmacy, and the professional services that the pharmacist provides. Still, to many, pricing remains a mystery and has led to a growing profession specialists who help people navigate the healthcare system. We provide them with information so they can make informed decisions. We also can be a family representative if family is not able to take care of them. The National Association of healthcare advocacy consultants says the profession is in its infancy, with about 200 Patient Advocates working in the u. S. On average, they charge about 125 an hour. However, some say be advised, theres no licensing or accreditation for it. After clicking through more than 5,000 irs emails, the Inspector General concludes there is no indication there was political motivation behind scrutiny of tea Party Applications for tax exemptions. According to a report, groups connected to occupy wall street were also given the same secondary screenings. The documents were released by democrats. Congressional republicans call the report misleading. The latest comments out of china are sending a chill through global markets. At a new conference in washington friday, chinas finance minister told reporters china is aiming for 7 econonomc growth this year. That is below what the Chinese Government forecast earlier. Economists and traders have become concerned about chinas prospects as manufacturing there is slowing down. Ups is signaling the u. S. Economy may be slowing down. The Delivery Company is ratcheting down its earnings expectations. Ups claims customers are turning to lower cost shipping options. Analysts say customers tend to go with less expensive options when the economy cools. Ups delivers earnings july 23rd. Traders will watch for earnings news from citigroup today. Analysts are expecting higher profits from citi. It follows Solid Earnings news from jp morgan and wells fargo. Friday, shares of jp morgan rallied before losing steam, despite beating wall street expectations on earnings and revenue. Wells fargo reported record earnings due to lower expenses and growth in the banks lending business. Senator Elizabeth Warren has taken to twitter in her battle to divide traditional banks from investment banking. Warren tweets banks should be boring again. Warren, along with senator john mccain, wants to bring back a section of the glass steagall act. Bankers are coming out against this. They strongly contend the financial collapse of 2008 was not their fault and there is no reason to restore glass steagall. Juli niemann of smith, more and company is on the line with us this morning. Good morning. Juli, who is too blame . Dervatives, which the banks use, are about s 700 trillion global market. Theres no regulation, no supervisory authority. Its the biggest Global Financial casino going around. We really dont know the size of it because there is not that much reporting going down. In 2007, the giant meltdown of the Global Financial markets was in large part due to Derivatives Trading and later took out bear stearns and Lehman Brothers in 2008. Bottom line is, derivatives do have a place in financial markets, but not with banks, because the banks are gambling with insured savings deposits. In other words, you, the taxpayer, are backing up all these Financial Derivatives so the banks can basically crap shoot. How does that happen exacly . What do banks buy and trade . The ones they like especially are Interest Rate contracts, and they also trade a lot in global currencies. They trade a lot in gold, precious metals. These are the markets they like to speculate in. But the key thing is here theyre not playing with the house money, theyre playing with insured customer deposits, which are insured by the federal government. You have to separate those two areas. Thanks for your insights, juli. You bet. The u. S. Airways and American Airlines merger is almost ready to fly. Shareholders approved the 11 billion merger, which is one of the final steps in closing the deal to create the worlds biggest airline. The new company would be called American Airlines, with headquarters in the dallasfort worth area, nearly 950 planes, and more than 100,000 workers. The merger is expected to be completed by september. Franchise fever is spreading abroad. More foreign buyers are investing in small franchises. Demand for subway, kfc and 7 eleven, as well as smaller companies, is on the rise, due to increased appetite for american foods. Subway restaurants have doubled overseas in the last five years to 200,000, and its in the midst of seeking franchises in markets such as bangladesh. Radioshack is quieting the buzz about its finances. The Electronics Retailer says it has 820 million in liquidity and is in talks with banks about strengthening its balance sheet. Radioshack says its focused on executing its turnaround. Its stock is rebounding after taking a dive on rumors of a possible bankruptcy. A steady stream of companies will debut on wall street this week. Some of the more notable names include nrg yield, a unit of nrg energy; diamond resorts international, a Vacation Property owner; and digitgal coupon company retailmenot. Noodles and company has become one of the summers ipo sucess stories. The casual diners stock opened around 32 and continues to trade above 40. Still to come, saving face why more bosses are stepping in front of the camera. Thats later on. But first, are longer auto loans causing problems down the road . And, tesla enters the big leagues with a stock market move. First business continues after this. Tesla moves to the nasdaq 100 today as oracle makes tracks for the year new york stock exchange. Last week, tesla raced to a record high of 128. Just a short time ago, the stock was trading around 25. But while the share price is speeding up, sales are showing signs of slowing down. Second Quarter Sales dipped 12 . In the first quarter, tesla impressed wall street by outselling mercedes, bmw and audi. Meanwhile, automakers may soon have to meet higher safety standards. Several vehicles failed a round of crash tests by the Insurance Institute for highway safety. The new tests are said to be more challenging and simulate a headon crash. 2013 models of toyotas rav 4, buick encore, ford escape, hyundai tuscon, kia sportage, and 2014 jeep patriot all got poor rankings in the headon crash, but had good ratings in other categories. The institute says many carmakers will have to make significant changes to vehicles in order to pass the test. A Record Number of car buyers are taking out longer loans. Some are taking as long as 10 years to pay off their cars. Greg mcbride of bankrate. Com is skyping with us this morning. Hi greg, and why are people taking out loans that might last longer than the actual car . Well, a lot of this is because peoples budgets are still under pressure, and by stretching out to longerterm loans, theyre reducing that payment. Its a very bad habit that consumers have, and in the long run, i think it ends up costing you a lot more money. What rates are they getting . The longerterm loans first of all, auto loan rates are at record lows right now. But, when you stretch that loan term out to longer and longer loans, youre not getting a lower rate. If anything, youre getting a higher rate, because theres a higher risk of default the longer you stretch that loan out. But, the fact of recordlow Interest Rates means that even on those 7, 8year auto loans, youre still getting a pretty attractive Interest Rate. But, its going to be at least as high, if not higher, than what you would have gotten on a 5year loan. Are dealerships passing this along . Are dealerships pushing this . Look, the dealership is going to push whatever it takes to get the deal done, and if youve got a perspective buyer sitting in your office whose budget is tight, and you can stretch that loan term out a little bit longer and get that payment down to an affordable level where you can get them qualified and they can buy the car, of course theyre going to do it. As a consumer, i think the way youve got to look at this is, youre not doing yourself any favors by dragging it out. If anything, youre just putting yourself in the position where youre going to be upsidedown for longer, because the value of that vehicle is going to drop a lot faster than your loan balance. Thank you for the info, greg. Thank you, angie. Coming up, why more businesses are focusing on face time to find customers. Plus, traders are facing a dilemma when it comes to earnings out today from banks. First business continues after this. In the world of online marketing, video is king. More and more companies are looking for customers by posting short videos on their websites or just on youtube where they can be googled. So, what are the qualities of a killer elevator video pitch . Mark goodman knows. He runs the company e conversation solutions, and you produce these videos all the time. So, should the boss be the person who appears in these videos, even if he or she doesnt think theyre very good at communicating . You know, bill, the whole key to internet video is authenticity, so if youre at all comfortable with being on camera, yes, you should do it yourself. I see a lot of these videos where the person is being interviewed and isnt talking directly into the camera. Why . I think thats the most natural way to talk to somebody. It captures the essence of a regular conversation. And if you are an uncertain person, you should take that approach. Let me try it, looking into a camera. Yeah, im uncertain about that. Well go back to talking to you. All right, so what should be said in these videos . The key thing to an elevator pitch is covering three things first, what problem does your company solve . Second, how you solve it . And most importantly, the third one is, what makes your solution different . Is it good to show the product in these videos . If theyre only going to be a minute long, there isnt that much time. I think you can show the product to give a background sense of what your product is, but think about your elevator pitch as that introduction to your sales call. So its all about you and not your product. So, authenticity, thats the main thing. Dont try to act like somebody else, somebody that youre not. Thats right. And a lot of people would say, id rather have just a beautiful woman to do the pitching for me. Youve had clients that have asked that. Right, and my comment is, if you are going to go out and close that big deal, are you going to send a beautiful woman . So it needs to be a representative of your company. It needs to be somebody who that customer is going to see on future visits. All right, mark goodman, thanks so much. Thanks, bill. Thank you, bill. Is it better to buy or to short bank stocks ahead of earnings . A trader chimes in after the break. Citigroup and bank of america are among the next major banks to report in with earnings this week. Andrew keene, president of keeneonmarket. Com, joins us from cme group for a closer look at the charts. Good morning. Good morning, angie. So weve already heard from j. P. Morgan and wells. What do you see for these next two banks . If you look at it, wells and j. P. Morgan both came out with stellar earnings, but the stocks really didnt participate that much. Wells fargo was up about 50¢. It didnt get through it that recent high of 43. 20. Then j. P. Morgan, once again, the stock was only up about 30¢ on friday, couldnt get through that 56 level. It seems like the banks are a little bit tired. Its factored in accordingly. We get earnings from citi today. Im going to use todays high, and im going to short on the closes today, and im going to use todays high as my stop. Also, j. P. Morgan, wells fargo, i think those are both good short set ups, but on a rewardtorisk setup. Im very, very tightly playing these to the short side, using the stops above recent highs. And heres the dilemma for traders those bank stocks have had a nice run into earnings, but at the same time, we know that profits are likely to be decent as well. So, you sound like youre really taking into consideration the fact that some of this is already built in. A lot of it is built in. They had really good earnings, the two that reported on friday, j. P. Morgan and wells fargo. They reported very good earnings. However, it didnt participate that well intraday. Yes it rallied, but it didnt rally that much. If you look at citis chart, citis actually performing a little bit weaker. It got up to about 53. 50 which is the threeyear high sold off to about 46. On friday, closed right on the 50. 50 level, so today should be interesting. Im going to short it on the close of the day. Im going to have a stop above the high of the day. I like j. P. Morgan and wells fargo better on a rewardtorisk set up. A very, very tight stop, though. What about bank of america . Theres call buying all the way up to the 15 strike. Yeah, bank of america, when i trade, once again, i always factor in those commissions. Bank of america is a much cheaper stock. It doesnt move that much moves 4¢, 10 in a day. I would rather play the ones that move a lot more. Those are wells fargo, with a little bit more volatility, and citigroup. Thank you, andrew. Thank you. That closes out our monday show. Coming up next time on first business, how fear of losing your job could be ruining your career. Tips to stop worrying and move head at work will be right here tomorrow. From all of us at first business, thank you for watching, and have a good monday what you are about to see is one ladderthe strongest, the safest, the most versatile ladder in the world. The americanmade little giant ladder system. Twenty four ladders in one. Coming up, youll see amazing demonstrations and hear compelling testimonials from
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