Apple lost a step since the passing of steve jobs . One of techs greatest Division Narcotic s, we have that and more for october 4th. Good evening everyone. Im susie gharib. Im Bill Griffeth in for tyler mathisen. Its day four of the government shut down and work stoppage for 800,000 federal employees and lawmakers appear in closer to ending the stalemate with no negotiation scheduled and the looming u. S. Default threat no less than two weeks away unless Congress Raises the u. S. s borrowing limit. John harwood joins us with the latest efforts to reopen the government and the war of words from the white house to the capitol and beyond, john . No sign of progress, no . No sign of progress, bill. At this point both sides are watching for the reaction of their own members and also the members constituents back home. The president coming out and saying yes, ill negotiate but only after the government is reopened and republicans raise the agree to join democrats in raising the debt limit to expand the nations borrowing authority. Speaker boehner came out and made the statement you eluded to and trying to strike both notes saying yes we cant keep fault but yes, we need concessions on spending and deficit reduction to do that. The challenge is the speaker is late to making that demand. The republicans have spent a lot of time on obamacare demands, now they are moving to the budget, a more promising zone but late in the game. You know, john, you know washington inside and out and you know the rhetoric between both sides and parties. You interviewed president obama this week. What is your take . Are you sensing about how much longer this will go on . Suzy, i think it will go up until mid october, the treasury says october 17th when we hit the debt limit. I wouldnt expect it to be resolved much more than midnight on the 16th and, you know, there are various scenarios being discussed. There is no negotiation process but i talked to a republican member of congress yesterday speculating if we agree on a process of budget negotiations to occur after the debt limit is raised, that might be something we can consider a victory and on the debt limit there is some talk of potentially suspending enforcement of the debt limit rather than raise it. Thats what republicans did this year and weve been operating on that basis all year. There was a time when shutting the government down would be unthinkable. Its happened twice in the last 20 years but now were talking complacently about the government is shutdown and could be for two more weeks. Does this become the norm in future budget negotiations . The fever that president obama wants to break in the standoff, he does not want to set a president this becomes routine, and if he can make republicans break, hell go a long way to accomplish that. Thanks a lot. John harwood reporting from washington. Wall street, investors seem to shrug out concerns about the shutdown and debt ceiling. Stocks closed mod kestly higher. So why the optimism on wall street . How traders see the impact of the shutdown so far as they look ahead to next week in the market. Stocks drift the upward today as wall street continueed to believe that a deal would be struck to get the Government Back in operation again. Traders continue to express optimism a shutdown will not be protracted and go beyond october 17th and the debt ceiling will not be breached. Bottom line, there is no real panic in the equities markets and that tells me investors realize some posterring is going on between both sides, they will come to an agreement before any major damage is done. Reporter one reason for optimism is the tone of the debate went from shutting down obamacare to cutting spending. Wall street believes both sides can make a deal around that but democrats agreeing on some kind of down payment on entitlement spending and tax reform and republicans agree to get the government reopen again. Stocks traded in a fairly narrow rage and the s p 500 flat for the week and other indicators were stable, as well. Yields on the tenyear treasury were stable at 2. 6 all week. With all this stability, traders took to calling this the what, me worry, rally . Here is a what, me worry, look. The dow closed back above the critical 15,000 mark. The nasdaq up 33 and s p added nearly 12 points. Looking at the last 12 trading days, the dow and s p posted gains for only three of them. Despite the federal budget stand off, some encouraging words about what this may mean for states and other muni ni municipalities. A shortterm shutdown at the federal level wouldnt have a Significant Impact on the credit quality of states and local governments and even for nonprofit Healthcare Centers and airports and roads and mass transit or public housing. The impact of the shutdown is taking a big toll on some private manufacturers. Laquid martin will furlough and maybe thousands in the weeks ahead. Computer sciences is also planning furloughs next week. In the meantime, u. S. Airways is blaming the federal Government Shutdown for a stranding of a jet in france. Listen to this, the carrier ordered a new a330 jet from airbus but because of furloughs in a key faa office in oklahoma city, u. S. Airways is unable to fly in new plane into the u. S. And im sorry to report that no u. S. Airway passengers have been stranded in france at this time as a result, suzy. Fema, the federal Emergency Management agency bill or fema says as a result of the Government Shutdown, only 19 of its permanent work force is available to deal with an emergency and it comes as Tropical Storm karen takes aim at the gulf coast expected to make landfall on saturday night. Mandatory evacuation orders are issued for some parts of louisiana and Energy Output in the gulf is cut in half as oil and natural gas drillers shut down platforms evacuating workers. Some of the Biggest Energy producers in the gulf saw sizable gains in the stocks today. Look at marathon oil up 2 , exxonmobil and anadarko rose one percent. Pot belly corp, with investors gobbling them up the chicagobased sandwich chain priced shares at 14 each, raising better than 105 million. The chain has 286 Stores Nationwide but the ceo says the company is poised for rapid expansion. We are promising our investors that were going to grow about 10 unit each year. Well grow to catch type of company, take the cash, invest it in great new units, great a great return on the investment and thats the model were running. Thats something investors were able to sink their teeth into today. Shares up 120 in the trading debut today. And bill, pot bellry is just one of a rash of ipos this year. Almost 300 equity deals priced over the past three months, thats the highest total since 1999 and up 41 since last year, according to deal logic. The biggest winners newly Public Companies in the Health Care Center like stem line, insys and arantana tripped in price. The 2013 class of ipos are up 22 this easily out performing the market, but there is one troubling statistic, the number of ipos with regular nnegative kicking up. The board of directors awarded him a 550,000 bonus for the just completed fiscal year but thats just 79 of the target bonus figure. The lower amount is because of declining profits and dismal sales of the surface tablet computers. It has now been two years since the death of apple cofounder and ceo steve jobs and at the time investors were uncertain about companys leadership, envainvasion and fu. Two years later, what happened since then and where is the company headed . Jon fortt has the story tonight. Reporter two years ago Silicon Valley lost the most famous visionary, steve jobs, cofounder and longtime ceo of apple died after a battle with cancer. Since then, the company he built continued to push ahead as one of the leaders in mobile technology, but has it lost a step . Depends who you ask. In the first year after jobs death the stock rocketed up 85 over the next several months and fell all the way back down as investors feared declining margins and the growing popularity of Android Devices from samsung and others. Apple stocks tumbled and critics focused on tip cook, who succeeded jobs in the seat. He and the rest of the board initiated dividends and buybacks engaged and launched efforts like the ipad mini and iphone fc twists on existing products rather than brandnew categories. Invasion debt at apple, complicating matters like amazon are ratcheting up pressure. We sell devices that break. We dont make money when people buy them, we want to make money when people use the devices by buying kindle e books and so on. Reporter but now sentiment appears to be turning apples way again. Apple is reversing last years severe down trend. This tells us that the buyers are taking control from the sellers. This is bullish. When you swipe into the home screen, the stock is up more than 20 since june when the companion showed off the revamped mobile software. In the past month users down looded ios 7 and bought 2 million iphones the first weekend. Two years after the visionary leader passed on, apple is still a company with something to prove. For nightly Business Report, im jon fortt. Coming up, big investors brought up a big number of houses after the financial crisis propping up prices but as home values increase, are they ready to get out . But first, here is a look how the International Markets closed today. Yes, home prices are dramatically higher from a year ago, up 20 and many came from Real Estate Investors who swooped in to dispressed markets and bought up thousands of properties and now as home prices continue to climb, some are considering pulling out potentially threatening the price gains they helped to create. Diana olick has the story. Reporter they came, they saw an opportunity and they bought. Institutional investors lured by big discounts during the foreclosure crisis. They rehabbed the homes to rent and by buying so many, pushed home prices far higher than expected. We think that if you get a reasonable cost of capital, debt and equity, you cannot only create a very attractive return on a current basis, but in todays market to your point, the house price depresuation we think is in the market is extraordinary. Reporter the higher prices investors helped create have caused a pause in home buying and some investors are looking to get out. I think the investor market is largely past us. People are buying Investment Properties three, four, five years ago and i hear its slowing down now. Reporter early investors in the trade are reportedly selling hundreds of homes but Colony Capital says thats just it, its not a trade but a new asset class. Colony is buying over a thousand homes a month and American Residential is all in as well. Were looking at the mls, multiple list services. Were looking at our yield from the banks, real estate owned products from the banks and short sales and buying traditional houses where people put them on the market. Reporter American Residential bought 80 portfolios from investors, some of them mom and pop and foreclosure inventory is down from a year ago so investors moving geographically as well. Participants of florida and phoenix are inveps tore heavy, thats why some are moving into georgia kba, the carolinas, indianapolis and chicago. Black stone, the largest investor in Single Family rental are not doing bulk deals and will continue to buy. These investors are modelling after multi family and why not . Apartment demand right now is through the roof. For nightly Business Report im diana olick. Turning to the market focus segment, red box surged into the close and investors snapped up the stock on word januaa partne is taking fund. The hedge Fund Represents an attractive investment opportunity. The stock rose 9 to 57 and change in the regular session and then extended its gains after hours. Shares of medical device maker st. Jude medical rose after the fda signalled it would approve a Heart Failure detection device. St. Jude is a Significant Shareholder in the company that developed the heart monitoring system. That sent the stock up more than 2. 5 to 56. 26. Biogen is releasing a study from multiple sclorsis. It closed at 240. 30 per share. Union pacific is forecasting profits coming in below expectations. The rail road operator is blaming the economy and the cole that needed to be shipped. It fell to 153. 90. The political crisis in washington is quote, man made and investors should look beyond that and invest for the long term. Hes chief Investment Officer at bmo private bank. Nice to see you. Thank you, suzy. What if things get dicey on wall street and we see sell offs, are you telling invest tors to sit tight . Yeah, its really sort of a decision if you believe that the government will ultimately default on obligations you probably dont want to own anything including risk assets, but on the other hand if you think they will ultimately kind of work their way through this, and there is somehow light at the end of this tunnel, then probably holding risk assets like equities probably make sense through here. Jack, reaching for yield these days has been a dicey prospect because as we all know, the higher the yield, the greater the risk and in a low Interest Rate environment, where do you go to find the income . Youre absolutely right. Its pushing up inflation and for those savers looking for yield in here and so there are a couple ways we found some yield, one is through bank loans, through an Exchange Traded fund with a Ticker Symbol bkln. Bank loans are just loans banks typically make to their customers but the interesting thing about bank loans is that they are a floating rate and if Interest Rates do go up, the rate that you get on your holding will rise along with it so that that way you wont feel stuck in a rising rate Environment Holding longer term fixed rate obligations. Now on that etf jack you were just talking about, bkln, the stock has been pretty much in the 30 range for awhile. If somebody bought that now, what kind of gains can they expect looking ahead . Again, were not looking to hit home runs with bkln. What were looking for is solid consistent yield and, you know, at 3 or 4 , its a pretty good place to be given that overnight paper and shortmaterial bonds are virtually zero right now. I actually like the fact its not moving around very much. That is yielding 4 , as you said, here is one with 6. 7 yield pgx, tell us about that. Sure, pgx is riskier, bill. Its an investment in preferred stock and interesting thing about preferreds is it is a fixed rate equity that trades like a longterm bond so if you reach for the 6 yield you could suffer if Interest Rates rise. Im recommending we pair that up with b im sorry, with tbf which is really, i call it inverse to treasuries meaning this is a security that actually rises in value if Interest Rates go up. So if you believe that preferred stocks will value as Interest Rates rise, this thing will pick up the slack and put it both together you get a nice coupon and some principle stability. So you end up with roughly im going to say instead of 6 yield you end up with 4 yield but you have very low Interest Rate risk. Okay. Real quickly, one other etf is feu, this is the stocks europe 50 etf. Tell us quickly in half a minute why you like it. Sure, thanks, so yeah, these are the largest most recognizable names in europe like nestle and other Big Drug Companies and so forth and the theme is were trying to play on a recovery thats going on in europe. Were starting to see a sense that they are breaking away from this long funk and were not looking for off to the races here but we do think there is good value there and these Large Companies should benefit. Okay. All right. Any disclosures to make, jack . I own all of it, so im so do our clients. Okay. Fair enough. Thank you. Have a great weekend. Jack. Thank you. Chief Investment Officer. Still ahead, no jobs report but well introduce you to a woman who turned a simple idea about baby food and turned it into a big business. First how commodity s currencies and treasuries performed today. Jobs, well. Those squeeze pouch ps at the stores acount for a third of the sales. Reporter ten years ago she had a plan, long before her son seine or her dog were around. To change the way people were fed but offering organic nutrition. At the Business School in 2003 the health food nut was inspired by a friend, a mother of twins who had no time to cook home made meals. The market was screaming for something new. For 2. 5 years starting in her brooklyn kitchen she developed a frozen food moms could prep in a blender and launched in five new York City Stores on mothers day in 2006. And probably by june 10th, 2006 i realized we wouldnt make a big slash in the frozen food business. Happy baby had to crawl in a different direction and quickly. They Went National in that first year thanks to whole foods. But sales of about 116,000 were below projections. The first pivot into serials called happy belly and a puff snack. The first ever organic puff snake for baby. And yogurt snacks. It was a happy family in name only. Im pregnant. Im trying to take the subway home and i literally did not have enough credit on one of my credit cards nor from my debit card to buy one swipe. I dont know how much lower it gets from that. One of her advisers was invaluable but he warned her about the difficulty she would run into. My response is do you have any idea how hard it is to get into the food business . It changed in 2008 when she pound apple sauce in a pouch. I remember thinking, you know, that is what weve been looking for all along. Thats the alternative to the jar. Its the pouch. Happy family introduced happy to thes in 2009. Within two or three weeks, we had three items in the top ten selling items of all the baby food in target and we knew we had something. Did they ever . 2010 revenue was 13. 3 million and in 2012 more than 6 2 million. Our business exploded because of the packaging. Reporter that and a little luck. In 2011 American Express featured this in a super bowl pregame spot. I was watching the super bowl in my den, and shes on television and i looked at that and i said, that was the wow moment. This is going to be big. Reporter cliff shore couldnt have known how big. This summer she was recognized at the white house. We celebrate entrepreneurs like a leader in Affordable Organic foods for children, which makes michelle happy and they are on track to hit 100 million in revenue this year. No wonder shes called a rock star of the new economy. Reporter a rock star indeed. On mothers day 2013 the French National group then owned dannon in the United States bought more than 90 of happy family . They want to change the world through nutrition. We set goals and they say how can we reach them . It doesnt get better than that. No, it does not. Finally tonight an unexpected beneficiary or twitters initial public offering, shares of tweeter, a because some traders were confused by the Ticker Symbol twtrq for the micro blogging website that havent begun trading yet that will have a symbol twtrq. Somebody bought 100,000 shares thinking they were getting twitter. Oop ps. Okay. Thats nightly Business Report for tonight, im susie gharib. Have a great weekend everyone and for more on the business stories we covered, go to our website nbr. Com. Im Bill Griffeth, tyler is back on monday. Nightly Business Report has been brought to you by. Thestreet. Com, interactive financial multi media tools for an ever changing financial world. Our dividend stock advisor guides and helps generate income during a period of low Interest Rates. We are thestreet. Com. good morning and welcome to forum. Im Michael Krasny. Hello, im dave iverson. 20 years ago in the winter of 1993 Michael Krasny hosted his first forum program. He has been at it ever since conducting conversations with the authors and artists, leaders and innovators, scientists and scholars who shape life in the bay area, the nation, and the world. A conversation thats also a Daily Exchange with all of you. Michael is also the author of three books, including off mike a memoir of talk radio and literary life. And since 1970 he has been a professor of english at San Francisco state university. He has also been a visiting and adjunct professor at the university of california,
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