It crossed the mark briefly today and solidified that position after recording solid Fourth Quarter earnings. Its lift bid strong sales of online ads and tighter cost controls. The company whipped expectations earning 8. 07. Wall street was looking for 8. 10. There was an increase of 17 from last year. The result sent shares of alphabet higher in initial afterhours trading. This was the first report to separate googles main search business from risky investments like selfdriving cars and glass. Josh has more on the quarter reports. Reporter 6. 8 billion. Thats one big number from the recent alphabet report. It refers to operating income at google core and that refers to search, maps and youtube, the real business drivers of alphab alphabet. The company is breaking out the number, stripped away from nest and fiber and all those moon shots. I investors have a much cleaner look. They call it a massive number that beat his forecast. The number he says suggests that despite the competition from rivals such as facebook, the Company Continues to perform well in its core businesses, a display advertising mobile, advertising and youtube. Im josh lipton in san francisco. That profit report for alph and last weeks equally impressive one from facebook teams up a great debate. Which company deserves the poll position in your portfolio . Scott likes facebook and has a buy on the stock. Max wolf favors google. Hes chief economist at an Investment Firm based in new york city. This reminds of those high school essayti tisests where th say google, facebook, discuss. Thats the whole mission here. Scott, why dont you take it first. Its not that you dont like google, but you think facebook has a little more going for it and maybe a better price. Right. I dont think you can go wrong with either of these names. Ill give you a few reasons why we like facebook more. First, we have a lot more growth. If you facebook and what they deliver. I think it was a top line gain of 52 . 60 and thats really without any help from basic cacqusition anything like that. Think about video, instagram and occulous. We think the growth story has a number of years to go. Third, they havent really started the process of allocating that capital to shareholders. Google started. Apple starts last year with a buy back. Facebook is close to that process. Theres another lever to generate sha genera genera shareholder values in the years to come. You say google is the next new thing. I agree both are great names and should be portfolio elements to people who want growth. I think the next little while. Facebook is the now company. Google is the next thing. Usually depending on what your investment style is, you want the next thing. Google is the most likely to be executed start up on with the lowest multiple while throwing off enormous cash. I think google is closing in on one of the hardest things to do and one of the things that only companies are built to last have ever done which is keep that engineering culture and keep plowing profits and earnings not just into the next corner or the next year which wall street tends to favor but the money ideas that are selfdriving cars or balloons providing internet. I think facebook is a great name. I think it has more margin than google for a well. I think that alphabet owns the bigger piece of the future and because they take more chances and more diversified and more matu mature. I was speaking to someone who took the view that some of the things within the google or alphabet portfolio that as you call them, out of money ventures, are sapping capital from the company. It might be a little inefficient as a result do you see that as weakness or a strength. I think its called innovation. If youre not willing to spend a lot of money on a whole bunch of dreams that wont come true, come true, youre not really in the innovation business. Its hard to stay creative and nimble without just buying things. I think its hard to do. I think theres a good chance google will be one of the few companies that does it. That means built to last. I love that for a portfolio. What about instagram . That seems its one of its most valuable assets now. It goes across all different age groups. Facebook doesnt necessarily do that. I remember a year or so ago when facebook was talking about concerns from a demographic perspective. Youngers users wont flocking on facebook. Instagram has become the Biggest Network for that younger demographic, say for teenagers. Theyre just really starting the process of monetizing instagram. They are using new features to engage them and pricing accordingly. We think thats an exciting opportunity that will last years for come. Whats app is big with the younger crowd. Are they making money off of it . Quick yes or no. No. They paid 19 billion dollar but are you making money or not. Great discussion. We appreciate it. A new month, february started out fairly calm especially compared to january. The major averages were down more than 1 early in the day. Then they climbed back. When the closing bell rang, stocks were flat. The dow jones fell 17 points to 1 16,4 16,449. The s p 500 was lower. What lies ahead for february especially after the worst january performance since 2009 . We look at the past for a few clues about the future. Reporter good riddance january. Hello february. Falling oil prices gave stocks their worst start to the year since 2009. As investors look to a fresh month, history may be on their side. Over the last decade, february has been a better month for markets. The s p 500 and the dow jones have been positive of the last ten. The best time to get in may be at the start of the month according to a data analytic platform for markets. Stocks moved higher and seen better returns for the first two weeks of february. I think investors will start find we created bargains. Reporter the best performing has Opinion Technology following by consumers. After typical weeks ofthey make up lost rounds in the first trading days of the new month. If consumers believe oil price will stay where they are, they will be encouraged and wanting to spend that money on items where its restaurants, leisure or clothes. Reporter its also opportunity in commodities. Its been a rough start to the year for oil. If you think the floor is in, crude has been a good bet this month. Oil has moved higher eight of the last ten februarys and returned nearly 4 on average. Past performance is no guarantee. Knowing the history may wash out some of that noise from january as investors look to a fresh month. The month started with a number of multibillion dollar mergers. Abbot labs to by alier for nearly 6 billion. It makes abbot a bigger player in the Rapid Testing space which helps physicians speed up testing. Striker is acquiring sage. They also raised their earning guidance for 2016. Dominion resources to acquire quester for more than 4 billion. Its basic week for the economy. Started with new reports on how much americans saving. It will end on friday. The new information will tell us a lot about where things stand. Reporter its a week full of data that will hopefully show strength in the economy. Personal report was okay but spending came in below expectations and Construction Spending in december also missed the mark with only a slight gain. The first data for january was also disappointing. A key survey showed manufacturing contracting for the fourth straight month opini. We dont see strong growth. Its really chugging alone that square root shaped long term sub trend growth were in. Reporter theres still hope for the data. Auto sales on tuesday and important for the sector on wednesday could show the u. S. Economy is with standing its considerable challenges be pp. A top fed official offered a hint they could ease back on plans. Further declines in oil prices and increases in the value of the dollar for an Exchange Value of the dollar suggested inflation would remain low for longer than previously been expected before moving back to 2 . Reporter less inflation means it doesnt have to move as previously thought. Fisher remains optimistic about job growth. Markets will see if the optimism is well placed beginning with the employment report on wednesday and with the friday jobs number from the government. The fact calls for gains of 185,000 jobs in january. Thats a mark cool down from the near 300,000 in december when its still enough to keep unchanged or edge it down below 5 . The key test is whether the data show the weak Fourth Quarter continuing into the first where mostly foreign troubles are u. S. , domestic concerns. Oil prices suffered their first decline if five sessions. Here we go again. Factory data out of china raised concerns for the energy demand. It settled down nearly 6 at 31. 62 a barrel. The low prices of oil is hurting the finances of nigeria. Africas largest economy has asked the world bank and the African Development bank for emergency loans totaling 3. 5 billion. According to the Financial Times it will help fund a 15 billion dollar deficit. The russian economy getting hit hard by the low price of poli oil. Theres been meetings to support prices. Is that all it is, just talk . Or is russia a real wild card in the crisis. Reporter as Oil Prices Continue to go south, russia has been at the forefront of trying to figure out whether some action, like a production cut, should be implemented to stabilize oil prices. An opec official stated its all in the hands of the russians now. Could russia be holding a powerful card here . We think russia is a wild card. If you look at 2015, they surprised many analysts by being are they going ed to be up or down. If they are up, everyone will have to take their oil forecast down. What i think is interesting is the we are getting some russian producers coming out and saying maybe we should consider cutting production. Reporter some say its much easier said than done. I dont really see russia being the one thats more willing to cut production on its side. You have a lot of disagreements amongst Russian Energy officials as well. Reporter several analysts say russias role in an Oil Production cut is a side show, and russia is trying to talk up the Oil Market Even if it does want to cut production without saudi arabias cooperation, it will be all talk and little action. Theres a lot of distress there. I think the saudis will be much more focused on u. S. Production than coordination talks with russia. Reporter some argue russia will do whatever it can to get other countrys cooperation perhaps more now than ever. The price heading down into the 20s is going to impact russias economy even more significantly than where it is today, which is in dire straits. Reporter russian president has admitted that low Energy Prices have led to dangerous revenue prices. Since russia relies in oil and gas exports as the main drivers of its economy. Economic sanctions has caused russias gdp to contract significantly. Still ahead, the big money behind the race for the white house. Iowa voters will caucus tonight. Its the first nominating contest in a race like few weve seen before. There wont be any lines for voting booths but rather public meetings. We hear why it could be a historic night in the hawk eye state. Reporter we he finally reached the point in the american president ial campaign where its not up to pollsters or pundits, its not even up to campaign speeches. The voters have their say in iowa with the caucuses. We forget despite the complex policy papers, and issues and stances that the candidates take, sometimes for voters it comes down to simple gut reactions to the candidates that they see in front of them. Lets take a look at a few we have seen. Voting for clinton, pragmatic progressive. Marco rubio because he can unite people. Ted cruz, constitutionalist. Bush and honesty. Carly, confident, strong and she has a blue print for america. Trump. Wall. We love you donald. I love you too. Hillary. Seniors. Bernie, approachable. Hillary. My status right now is undecided. Reporter those voters did get stark rhetoric especially on the republican side at the t ta end of this fight. Listen to this back and forth between ted cruz and donald trump, the two leading republican contenders. Both trump and marco are attacking me. They are attacking me with all their might. We drawing contrast. The contrasts are clear and they are substantive and policy based. A vote for marco rubio is a vote for amnesty. A vote for donald trump is a vote for obama care. Ted cruz is a total liar. Im so against obama care. Ive been saying it for two years in my speeches. Im going to repeal and replace obama care. I dont know where he gets this. Hes a liar. Reporter trump comes into caucus night with a fivepoint lead. Ted cruz is believed to have a stronger organization. On the democrat side Hillary Clinton has a threepoint lead. Shes believed to have the stronger organization. Shes considered the favorite going into tonight. The results here, however they come out, will shape the contest as we move forward to New Hampshire which has the primary in eight days and nevada and South Carolina after that. Then the race goes national. Im john harwood. The money is rolling. We have the total contribution numbers. They have been going over the data. What do the numbers show . This is much different than what we have seen in past years or past quarters. Its such a different race this time around. Let me walk you through numbers starting on the democrat side of this campaign. We see Hillary Clinton topping the list with 38 Million Dollar raised in the Fourth Quarter and Bernie Sanders with 33. 6 million. On the republican side, ted cruz. 20. 5 million marco rubio. Theres donald trump at the bottom of this list. 13. 6 million for donald trump. Whats astonishing is this is not the kind of race we have seen before. We got a guy in this race who is leading this campaign and selffunding his own campaign. Contributions matter less to donald trump than the other candidates who will depend on them like oxygen to keep going after the iowa caucuses. Hes made that point that he doesnt need money, but people are still giving money despite the fact hes a billionaire. Sfr do you see a lot of small donations going to donald trump o you see a lot of small sfr donations going to Donald Trumps a lot of the big money people in traditional politics are not writing check to donald trump. A lot of smaller people are. Thats a measure of enthusiasm for the campaign. I was stunned how close Bernie Sanders was to Hillary Clinton. Can he keep it up and raise establishment size money . Hes raising enough money to stay competiti Hillary Clinton has all these big outside groups working for her but hes in the money race. Twitter gets a lift on take over speculation. Thats where we begin in tonights market focus. A report by tech websites said investor and private equity firm have considered some sort of deal with twitter. Then a follow up by fortune reported that silver lake has no interest in buying even a slice of twitter. Shares were up more than 6 today to 17. 91. Lumber liquidators will pay fines for importing illegally sourced wood. The company will also face five years probation. Shares were up 3. 5 today to 13. 36. The centers for Disease Control and prevention is closing its investigation into the chipotle e. Coli outbreak saying the concern appears to be over. They were unable to determine the cause. It was likely pause of a common meal item or ingredient. Chipotlee expected to report earnings tomorrow. Fourth quarter property at aetma up nearly 40 . Thanks in part to membership growth in the government based business that sells medicaid plans. The activist hedge funts executive capital has taken a small stake in cit group and wants the firm to break up. Thats according to wall street journal. They provide commercial lending and Insurance Services and owns planes and rail cars. The lenders exploring a spin off of its commercial air business. Shares are up nearly 2. Today to 29. 86. Mattel beat Fourth Quarter earnings target. The revenue number also better than expectations. Strong sales for barbie dolls and hot wheels toys lifted the result. It was the first rise in revenue in more than two years. Mattel shares plumped up on the news after falling 3 during the day to 26. 07. Coming up we go a different direction. The Marijuana Industry are grow quickly, and so are the headaches when it comes to paying taxes. Legal marijuana sales recreational and medicinal are hitting a new high of nearly 5. 5 billion last year. A new report predicts sales will grow 25 . By 2020, sales are expected to hit about 22 billion. For those who sale marijuana legally, filing business taxes is anything but simple. Jane takes a look at this growing issue for a new crop of entrepreneurs. Reporter its tax time in the cannibus industry. For many new in the business, their irs bill could leaf them dazed and confused. Companies are paying anywhere from 40, 50, 70 depending on what demographic they are on. Reporter the irs still insist the companies bay income. At the same time the agency bars them from making most normal business deductions. You could end up with tax bill far more than any potential profit you could ever make. Reporter that could start to happen as legalization is bringing down prices and marg s margins. Ive seen the Profit Margins drop about 40 . Reporter the irs does low deductions for the cost of marijuana, pu it does not allow it for the cost of retailing the it. Things like rent,tizing. The margins are there at least in california where we operate. Reporter darren left wall street to start a company, a publicly traded Holding Company which owns a variety of cannibus companies. They also own other companies that dont directly involve pot. Like one that provides growing equipment or a firm that sells regular produce to retailers. He makes sure businesses are segregated in their tax reporting. A lot of business is one leg in the black market. Were not able to do that because were a publicly traded company. Theres a will the of providers that because of this head wind are still woeroperating with on foot in the black market and one in the other. Reporter tim owns the Colorado Harvest Company that did about 10 million in sales in 2015. He says the lack of normal deductions will cost him 8. 5 million or more in taxes. They cash our checks every month. Reporter jane wells, louisiala los angeles. Thats nignightly business report. Im sue herera. Well see you back here tomorrow on groundhogs day. thunder nie
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