Transcripts For WETA Nightly Business Report 20130715

Behind them. Closing the gap. Why the Great Recession prompted an increase in the number of women to take control of their money and become more financially secure. All that and more tonight on nightly Business Report. Good evening, everyone. Fresh worries today about Consumer Spending and the outlook for the u. S. Economy. Retail sales in june were a big disappointment. They notched up just a fraction. Much less than forecast. Sales of gasoline, clothing, furniture, new cars and trucks were strong, but sales of building materials, computer and other electronics disappointed. And americans dined out a lot less often. Thats a troubling sign that consumers are getting stingy about spending. Adding to the worries, new reports showing a slowdown in chinas economy. Its no wonder economists are now recalculating Growth Numbers for the u. S. Over the last quarter. One of them is calling for skimpy gdp growth of less than 1 . There are more indicators of Economic Growth that saw a lot of movement today, oil and gasoline prices both moving higher again. Crude closed above 106 a barrel today, with no sign of letting up any time soon. But the ceo of one of the Worlds Biggest Oil Companies Said today, that by the end of this year, the oil price should be half what it is today. Gulf oils Joe Petrowsky credits the Record Number of oil and natural gas being produced. He also said that does not mean prices at the pump will see a sharp decline any time soon. The fact that were relying on railroads and trucks to move product from refinery markets to consumption markets, rather than pipelines is adding another 35 to 40 scents, if you do the math, with 50 oil does not translate into 2 gasoline. We have to refine it and move it. If you filled up your gas tank over the weekend, youve likely seen a big jump in prices and the pain is getting worse. Jane wells tells us why gasoline costs are on the rise and how long we might be paying for more at the pump. The u. S. Is in the middle of an oil boom. You wouldnt know it looking at gas prices. Gas is more expensive than milk is right now, its a little crazy. It sucks, but it is what it is. Its a 14 cent a gallon jump in one week, according to aaa, to an average of 3. 61 a gallon, with more to come. Gas prices in pretty much every state except for three are moving higher right now over the last week. With crude oil prices and wholesale gasoline prices increasing as well. Its likely gasoline prices may continue to increase over the next several days and possibly the next couple weeks. Why . Two main reasons, uncertainty in egypt a jump in demand. Even more than usual for the summer driving season. What were seeing right now certainly is not the norm for the summer driving season. In recent years there hasnt been much of a norm when it comes to prices in the summer anyway, theyve been all over the place. Like housing, gas is all about location, location, location. And a socalled heat map from gasbuddy. Com are getting red where prices are close to 4 a gallon. They show how much the price varies. The price also reflects gas taxes, in california theyve reached a record 72 cents a gallon, they went up this month because californians are either driving less or driving more fuel efficient cars and the states not making enough money. Which especially hurts when you own a car service. Danny is spending as much as 600 a week on gas, while cutting his own rates to stay competitive. Sometimes i dont want to drive because of the gas prices. But you drive for a live something. Yes, i have no choice. They say in the gas business, it climbs like a rocket and drops like a feather. The good news, down like a feather is supposed to happen, we just dont know when prices will fall or by how much. For nightly Business Report, jane wells los angeles. What do all of these economic cross currents mean for the stock market and your investments . Joining us right now is scott wren. Good to see you again, scott. Hi, bill. On a day where we saw really pretty poor retail sales figures for june. The stock market continued hire. Why the disconnect right now, do you think . I think right now, for some of this data, whats bad is good, and what i mean by that, is bad Economic Data means the fed is less likely to taper, which i dont think theyre going to do anyway, until 2014, probably. Thats the way the markets reading some of these indicators now, bad Economic News is good, because the feds not going to make too many moves, at least soon, to reduce the amount of qe theyre doing every month. Whats not surprising, is that were having slow growth, weve known that all along, i think the concern is, how slow is this growth going to be, and in some cases, what if it is negative. Would that derail the stock rally that weve been seeing . Well, suzie, certainly based on our projections, if we saw negative gdp growth, our target would be in question. Our Earnings Growth would be in question, were expecting modest. 5 to 6 Earnings Growth, we had been looking for about 2. 5 gdp growth last year. I think the market has priced in the slow growth. As i said before, i think the market right now is taking it as a positive that the feds going to be in here, lets admit whats going on here, much of this rally, much of this move weve seen over the last few years has been due to the feds easy money policies and all these Central Banks around the world. Thats what the market wants, were going to continue to see very easy monetary out of the fed. If you think the economys going to grow, you buy cyclical stocks, if youre worried about the economy, you buy defensive stocks. Here we are talking about the economy and its growth rate, but yet youre still going with the cyclical stocks. Why . In my opinion, were going do see a continuation, despite what we saw out of china here, a little disappointing numbers, i dont think theyll get lower than this but i think the Global Recovery is going to continue at a modest pace, our recovery is going to continue at a modest pace, and i think you want to be in those sectors that are going to benefit Consumer Discretionary sector which has done all along, this entire recovery. Technology which has been up and down, i think that will do better if i look forward for a year. And industrials are looking better as well. Now, saying that, if you looked at the sectors that performed last week, when we had a great move up in the market. The s p 500 moved up 3 . It was a defensive sector that led. I dont think thats going to be the pattern goingforward, last week you see anomalies like that, the markets in a state of flux here. I dont think were going to go much higher this year, but i think over the course of the next 18 months, the upside lukes good. Scott wren, senior equities strategist, good do see you again. Have a good evening, guys. You too. On wall street today, strong Quarterly Earnings from citigroup helped offset those jitters about the economy and the weak retail spending data we told you. Were going to have more about city and boeing in a moment. The dow and s p 500 kicked off the week with new records, making it eight straight gains of s p 500 only the second such winning streak since november of 2004. The blue chip dow closed at 15,484. The nasdaq rose 7, the s p 500 up two points. Citigroup the nations Third Largest bank is back, apparently, after posting a 42 increase in profit last quarter, the bank is in far better shape than 2008, when it recovered the first of three government bailouts and removed from the dow jones. What does this tell us and why does citi matter to investors . Reporter citigroup isnt the nations Biggest Group these days, but it is the most widely held by stockholders. Shareholders got a 2 boost to their investment. Certainly some of the actions that were taken in the back half of last year are showing benefits today. When former ceo was ousted last october, corvath took the reigns, focusing squarely on making over the bank. On his watch, citi holdings, with all of citis toxic loans has dwend elled to 7 of assets and broke even for the first time. Completing the sale of brokerage smith barney, pumped up the banks capital too. That capital level is already on track with regulators rules years before required. And the bank is a stones throw from other benchmarks set for 2015. Add to that the 1. 2 billion in annual cost savings it laid out last year, and even critical analysts like mike mayo say the bank may finally be on a path to consistent Revenue Growth. If citigroup can become boring, the stock goes higher. The big issue for the last two decades is when they swing for the fences and they need a lot of singles. As u. S. Consumers keep shedding debt and balking at rising interest rates, theres concern citigroup could rely too heavily on emerging growths. Management today acknowledged some weakness there. Korea remains a weight on earnings. And the cfo said problems there could continue for a year. Even so, corvath said any fear of a slowdown, especially given latest data from china has not caused the bank to rethink its strategy. And now to boeing, shares of boeing were flying high today, leading all the dow gayners, boeing sored nearly 4 . After investigators found its lithium ion battery system was not the cause of a fire on board one of the 787 dream liners in london on friday. But the news was not so good for honey well. It makes an emergency locating transmitter on those 787s. Investigators say it could be a possible source for that fire. Honey well shares fell a fraction today. The company is cooperating with the investigation and its too early to speculate on the cause of the fire. Still ahead, why more women are closing the gap when it comes to making personal finance decisions. But first, a look at some of the stocks that hit all time highs today. Is the beleaguered blackberry in some real trouble . Just four months after the release of its z10 smart phone. Carriers and retailers are slashing prices by as much as 75 . The nations two largest wireless carriers cut the price in half to 99 if you get a twoyear contract. At best buy and on amazon. Com, can you pick one up for just 49. In a statement, blackberry says its all part of its marketing strategy, to make room for its newer touch screen q10 device, explaining now is the right time to adjust the price for the z10. Its a big week ahead for some of the top names in technology, as they report their latest quarterly results. Which companies are reporting and what analysts and investors will be watching for this week. Big week for tech earnings, yahoo, ebay, intel on tuesday. And nokia and microsoft thursday. Lets start with yahoo, analysts arent expecting much from the quarter, which marks Marissa Myers First Anniversary at the helm. Myers 23 guidance is the bigger deal. 34 cents in eps to pull that off. Myers is probably going to have to produce growth in yahoos core display in business. I think tech investing is all about growth. If you can drive the Revenue Growth higher, you will be rewarded by your investment property. You cant just grow and not focus on the profitability of that growth. On wednesday wellville brian giving his first earnings call, given the 11 drop in pc sales, its going to be another quarter where intel will have to rely on enterprise and Data Center Sales to pick up the slack. Ebay has a challenging quarter to report, thanks to pay pal, its stock is near all time highs. And revenues would have to come in around 3. 9 billion. Thats the high end of the Guidance Range to support analysts estimates. Then theres ibm, big blue had been a machine when it comes to eps growth, managing to keep its results predictable. Jane has been working to reign in expenses, well see if it was enough. On thursday, nokia reports before the bell all eyes will be on lumia sales, well want to see if last quarters numbers add to its credibility story. If nokias experiencing the turnaround thats evading blackberry. Both of these Companies Trading at or near their highest levels. Googles core business is strong but its taking risks in moeb el that may hurt the bottom line. Microsofts pc business prompted a reorg last week. More important than this weeks results, what Companies Say about the outlook for the second half, between ebay, ibm and more, investors should get a broad look. For nightly Business Report, im john fort. Another twist in the dell saga, t. Rowe price said it will not support the proposed buyout by michael dell, saying the deal doesnt reflect the true value of the company. Shareholders will vote this thursday on the proposal to take dell private. The stock fell to 13. 15 many. Tiffany glittering today. The stock will hit 92 a sharks suggesting business will improve as consumers start to feel wealthier. He also said Gross Margins will get a boost from the falling price of precious metals. Shares of tiffany rose more than 3 to 79 and change so far this year, the stock is up 39 . Another bright spot today were the solar stocks. China wants to more than quadruple solar powered generating capacity over the next two years. That is designed to ease the glut in solar panel industry. Sun power rose by 4, and trina toll ar was higher by 12 today. On friday we told you about at ts proposed takeover of leap wireless. That sent shares of u. S. Cellular soaring. The acquisition makes u. S. Cellular the largest Regional Wireless provider. The stock finished the day up 8 to close at 38 and change. And late today, cintas, the maker of corporate uniforms gave investors a weak outlook for next year. That ceo is blaming Economic Uncertainty including president obamas new health care law. The stock closed the regular session lower to 12 cents to 47. 88 and fell further after hours. Theres a Silver Lining from the financial crisis and the recession. More women feel empowered now to take charge of the money and financial future, according to a new study, 62 of the women are interested in learning about financial planning, retirement and investing. Here to talk about the data is katie libby. Katie, this is good to see this kind of growth, women for years have had doubts about their ability to invest in financial matters, it stayed outside of that whole area. Now that they are feeling empowered. Do you find that what are they doing differently . Katie, are you there . Katie, you cant hear us . Well come back, well try to get katie in a moment. Meanwhile, coming up, spy games, more retailers are watching you shop. Is it Smart Business or an invasion of privacy . Back now with katie bibly of ambience light. Before we had the tech problems, i was asking you, now that women are empowered to work on their financial future, how are they handling things . How aggressive are they . What are they doing differently . Well, they are taking more opportunity to learn . I think the recession in 2008 was a big wakeup call for women. So instead of delegating as they may have done prior to that to pay more attention to whats going on with their portfolio, partnering up with their spouse, taking more personal responsibility for making Financial Decisions and things like that. What caught my attention men when they invest, tend to look for return. Thats their emphasis, theyre interested in what they get on return. Women are looking for protection. How does that translate into a difference in investment style . Well, yes, thats a very good point. The men might chase the competitive returns, where the woman is more interested in balance. Very value oriented. Shes looking more about lifestyle, and, therefore, protection and certainly guarantees can come into play. Men see it as risk. No, no, thats not what im saying at all. Im just saying, men can be very aggressive and women may be more balanced. Im not saying that women should not take risk. They take a moderate amount of risk and they also balance the portfolio out with some level of protection guarantee. Women more and more are feeling more confident when it comes to their jobs and pushing to move up the corporate ladder and things like that, theyre still a little shy in this financial area for women who are Still Holding back and feeling a little insecure. Any special tips on how to breakthrough all of that . You dont want to wait for another financial crisis to get that wakeup call . No, thats true. Women can start moving down the path of becoming more knowledgeable by setting goals, understanding how to get on a budget, starting saving early. What we know is that some of its financial knowledge is very powerful, women that gain it become more successful in investing, buildup portfolios sooner and improve their quality of life because of their early start. Tell them to watch nightly Business Report, maybe they get some confidence from that too. Thats true. The nations Largest Public Pension Fund got a little bigger last year. The California Public employees retirement system, reported a 12. 5 return on its investments this year, that ended june 30th. That return underperformed the s p 500 which rose more than 20 over that same time frame. The fund with about 260 billion under management said its global Stock Market Investments and Real Estate Holdings inquiry its biggest drivers. Attention shoppers. What you do and what you buy are being tracked. More and more retailers are profiling customers by tracking their movements inside the stores through their cell phones. Is it an invasion of privacy, and are these stores going too far . Courtney reagan has the story. Reporter technology can be a powerful thing. The rise of big data has opened doors for companies yearning to know more about its consumers. But when big data feels more like big brother, retailers like nordstrom could be turning off its shoppers more than boosting its sales. The High End Department store is no longer tracking customers instore movements, nordstrom has used technology to learn more about shoppers behaviors. Gathering everything from the time spent in certain sections, to demographic information stored within the phone itself. I want to shop and be able to look around and not feel like someones watching me. And watching my every move. Its a little creepy. Tracking me through my phone is weird. They want to see what people buy and what things people like and what they dont like, that would be fine. Many retailers have at least experimented with these types of tech knowledges, hoping to gain better insight on who its shoppers are and what those shoppers want. Even before the shoppers have decided for themselves. A majority of the stores were doing this within 5 to 10 years, i think its going to ultimately benefit the consumer. When a retailer understands better your preferences as you shop, theyre going to be able to taylor particular discounts for the way you like to buy. Using a combination of surveillance videos data can be pulled together to paint a picture of who i am and what ive shopped for. If i walk away from the Shoe Department before buying those boots ive been checking out. The retailer knows it and makes sure i get sent a coupon for them before i leave the store. When a customer realizes theyre being tracked in a physical store. The technology has existed a long time online and theres a Comfort Level with that. Its no different than the information gleaned from online searches. Retailers know how long you lingered on each product and whether or not you followed through with the purchase. When you dont, retailers seize the opportunity by blasting you with coupons, even in your email or through banner ads on other websites. For many, no coupon is worth the creep factor of feeling tracked. For nightly Business Report, im courtney reagan. Looking ahead to our market monitor segment, we want to hear from you, tell us which stocks you want to address on friday. Thats it for nightly Business Report for tonight. Thanks so much for watching. We promise not to blast you with news here on nbr. Have a great evening, well see you tomorrow. Vo geico, committed to providing service to its Auto Insurance customers for over 70 years. More information on Auto Insurance at geico. Com or 1800947auto any time of the day or night