Transcripts For CNBC Closing Bell 20130118 : comparemela.com

Nine years in a year. And if it continues they will be up ten straight years. Well leave you with barry manilow, break out your lighters and shiny vests. Have a great weekend. Closing bell is next. Happy friday, everybody. Welcome to the closing bell for this friday. Im bill griffith. Maria will be along at the new york stock exchange. Well take you through this final hour of trading. Look for the week here. Youre one of the few people who think the fed doesnt know anything more than anybody else. Well, it turns out we have proof that youre right. Some stunning revelations from meetings as the financial crisis was unfolding a few years ago. Well have that for you coming up, and, boy, is it good to be al gore. He acquired 30 million worth of apple stock by exercising options. Wait until you hear how much he paid for them. Well give you a hint. It was far less than 30 million. Got our attention. And that debt ceiling crisis may be delayed until the spring. The house is reportedly getting set to vote on a threemonth extension until next week and what that does is sets up a big fight on budget and spending cuts which could embroil the economy and stock market in a new round of uncertainty but it kicks that can down the road, so is that why stocks are a bit tempered today . Well take a look at that. The dow right now up 12 points. We are flirting with those five and a half year highs, 13,610 and change would be that five and a half year high so were just pleau that right now. The nasdaq down another eight points at the moment at 3127 and technology among the groups suffering today. The s p, again, here we go again. Any positive close for the Standard Poors 500 would be another five and a half year high for the s p. Lets take a closer look at the markets in todays Closing Bell Exchange with our guests. Andres, you and i were talking about the markets earlier. What do you think . Getting ahead of ourselves with the rallies weve had so far this year. Earnings matter, and were in earnings season. To a certain extent we might see some consolidation in the short term. If we look at valuations, still looks attractive or trading 13 times future earnings, 12 months ahead. The average has been 15 in the last ten years. Right. So valuation for the medium term and long term still looks attractive but i would say in the short term we could see consolidation. Peter, what do you make of the earnings that have come out so far . We made much of the Bank Earnings which for the most part were very good. Other sectors are at 52week highs right now. Housing, airlines, what do you make of what were hearing from corporations right now . Were really getting a picture i think of a market thats getting ready to rotate in terms of its economic focus. I think weve seen the Second Derivative on a lot of earning estimates, changes coming off. Seeing changes in leadership. The earning slickials got left behind so were seeing a major rotation from winners into what had been last years losers. So you think they will play catchup at some point . We think that the economy is going to begin to pivot we think from consumers to more of a manufacturing and exportoriented basis and that well reach Critical Mass on that here in the next two years. Rick, andres and i were talking during the break here about the bank of japan meeting coming up next week. I know youll be keeping an eye on that, having a big implication for the currency markets, wont it in. Oh, absolutely. I think, you know, ive tried to keep our viewers on top of how huge those trades could have been, and they were. Whether its euro yen, dollar yen. If you want to know why our stock market is doing well, look at this chart. A chart of one year of the nikkei and obviously something magical happened towards the end of last year. Look how the stock market took off and connect the dots with the transcripts, Ben Bernankes advice given a decade plus going to the japanese was definitely put in place, the liquidity programs, the quantitative easing, the monetizing and look what happened to their stock market, and if you also look at what happened to the jgb, briefly, they shot up in yield. Its moderated a bit. Kyle bass is on today with david faber and Everybody Loves kyle bass. Right. He talked about the first black swan with all the central banking activity probably turns out to be japan. We dont know when. I would fully agree and i think these two charts give you some clues that there is a possibility. Andres, what do you think . Is japan back . Well, i think to a certain extent the unintended consequences is what were actually going to see in the couple of months to come which is i dont think japan has the ability to get to 2 inflation which is their target any time soon, but that inflation might present itself in places like commodities. Another way to look at it is look at carry trade and countries like mexico that have tame inflation. Still, you can get 4. 5 , 5 on a coupon there, so countries like mexico could be one of the beneficiaries of whats happening in japan and what they are attempting to do. Are you investing over there . Do you like that market right now . We like the emerging markets overall, but i think mexico is one of the places that i particularly like . Hello there. So happy that you just said that about mexico because i have been looking at the mexico story and theres a Real Recovery going on. We are going to be talking to the minister of finance in mexico. What are the risks . Some people look at mexico and say, number one, how do i actually access this growth, and number two, what about the risks of fraud, of not being able to get your money out . What are the risks . Well, the risks in my opinion is actually the valuation is a little bit rich compared to a lot of other emerging market countries. The upside is the fact that they have done significant labor reform. Just got a new president that wants to basically invite Foreign Investment and overall economically and market friendly, it looks very good, but the risk to me is that youre already paying up a little bit for it. Also joining the dinner party today. This party is getting bigger. What is going on . Started laid. Andres and i were getting a little lonely here. Youre very bullish on this market right now, right . Yes, yes. But are we getting ahead of ourselves . In the u. S. Or japan . Here in the u. S. No, i think were fine. This year has been a good consolidation week. Nice to see its holding that 1470, 1480 range. The economic numbers are becoming right on the screws which means there havent been surprised to the upside or downside so the market has been, you know, taken in its stride. The market has been pretty steady and the earnings are a little bit wayward, but were only a little bit early into this. Next week will be a much more meaningful earnings week. At lot of financials were frontend loaded. The news is very good. You would add positions as we go higher . Some of the things to look at, the industrials. Some of the things were keeping an eye on is some of the defense stocks. Right under the shadow because of the possible quester. They are getting cheap and they have possible cash flows. Glad you mentioned earnings. So far its been somewhat mixed. I mean the Banking Sector is turning out some good numbers. Yeah. Where do you expect we might see the surprises on the upside in terms of the Fourth Quarter . In terms of sectors . Yeah. Financials have obviously done well, and thats somewhat cyclical. What i expect to do well are the consumer staples. They have been chugging along, but i think some of their expenses and costs were pretty moderate in the Fourth Quarter, and i think with the with the change in the taxes that came through in january, usually better for staples than consumer discretionaries so hopefully well get good numbers from there. Where would you be investing, Peter Sorrentino . You said you like the early cyclicals . What does that mean . Who do you like here . Well, really its a wide brush right now. We like refiners, the volero of the world. Marathon petroleum spun out. Thats an opportunity and agriculture, Companies Like lindsey, adco. Do like the brazilian market. The real suffered last year so a lot of companies are on sale, cozian and volley, after great opportunities for investors, considering weve got a strong theme in the emerging markets that will continue this year. Peter, thanks for joining us, rick as always, andres and christian come back when you can stay longer. I will. Thank you very much. See you later. Less than an hour finishing off whats been a pretty good week for the bulls on wall street. Bob pisani has been in the middle of the action and is down on the floor right now. Bob . In the middle of earnings season. Im a happy guy, and i see stockpicking earning and individual stocks moving on earnings but not whole sectors which is what happened last year. Take a look, for example, on the multiindustry stocks. Ge, good numbers today. Parker hannifin numbers, new high. Johnson controls disappointed because they guided lower on their current quarter. All the stocks are moving in line with their commentary and thats something we havent seen in a while. Now, theres a lot of talk. The industrials have been very strong this month. Talk about moving into industrials and maybe out of bank stocks which were strong last year. The banks are looking a little tired right now, a little bit toppy. Capital one had a very disappointing earnings report. You can see the rest of the stocks arent going anywhere as well. Semiconductors. Normally, if you had intel had disappointing guidance. You would see a lot of effect in the Overall Group the following day. Intel is down 7 . Taiwan semi, micron, texas instruments, not doing much. Thats what i mean. Individual stocks doing well but not whole sectors. Good day for ipos, norwegian cruise lines, priced at 19 and 23 million shares. Opens at 25. There it is, holding up, Straight Line all throughout the day. Finally, the third of three Master Limited partnerships, suncoke energy, priced at 19, a little bit below, but you can see, guys, a fairly good week, fairly active week for ipos. Thanks, bob. Final stretch of the week. A pretty good week. 50 minutes before the closing bell sounds. Dow jones industrial average still climbing, up 12 points on the session. The economy the stocks have been rallying as the economy improves, thats whats happening here, so the question inevitably becomes when does fed chairman bernanke finally have to be convinced that its time to put the brakes on the economic stimulus . Both sides that have issue coming up. A big debate on that one. Then a document dump finally allowing investors an inside look at the feds First Response to the financial crisis. And put it this way. No one really comes out looking so great. Well have the details and tell you whats in the documents. Youre going to want to hear on them. Oh, holy auto auction, batman. The original batmobile is hitting the Auction Block, the original adam west batmobile, and you will not believe, i did not believe, how much it will cost to drive away with this one of a kind vehicle. Maria is willing to put up the money. I am not. If you could buy that batmobile, which one would you purchase . Would you go old school, pick the adam west original . I think that might be my favorite. Maybe you like michael keaton. Michael keaton is my second favorite or do you prefer function over form and the tanklike batmobile from the dark knight. Youre driving right past mine, the val kilmer. I didnt like the movie, but i loved the car. Youve got to go adam west, bill. Im sorry. Send us a tweet and let us know what you think. Thats so 50s. Your picks coming up on closing bell. Stay with us. Okay. Weve got an improving Housing Market and overall better stock market and that has our own jeff cox beginning to wonder why isnt ben bernanke starting to unwind the steps hes taken. And he joins ron insana who is not worried about bernanke putting the brakes on. You feel low rates over a prolonged period will lead to inflation at some point . Ron and i have been kind of trash talking here for the last half hour or so. Exactly. Dont start without us, getting ready for this thing. Maria mentioned the housing numbers. How about the jobs numbers. How about Industrial Production . How about retail sales . I dont understand why are we printing 85 billion a month . The fed is not letting up on the gas. The fed is putting its foot further down on the floor here going into completely uncharted waters. They have no idea where this is going to take us, but we do know, i know i went to the supermarket last week and i wanted to drink drano by the time i got out of the place. Were still paying over 3 a gallon for gas. We have we are building a case for unintended consequences, and we have been sold this story for the last 12, 16 months about the economic recovery, so why . Why, ron . Tell me, man. But wait a second. Everything youre mentioning, jeff, actually underlines and encourages the idea that we need the feds free money. You put housing aside, mentioned unemployment. Okay. Its not fixed yet. You mentioned growth. Its not fixed yet. Sure, you know, also mentioned inflation, but ethin saying leads me to believe we still need the stimulus so i dont understand your point. Maria is carrying your pail of water . Im still old enough to remember when the u. S. Economy could run on its own and didnt need trillions of dollars of money printing every year. I think that we should be able to at this point say we can go back to having a free market. We can go back to having a place where we are not manipulated. All right. My personal feeling is that the motive behind this, and ill let you speak here, ron. Ive got time. Were talking about stock prices. Thats the primary purpose behind this. Building a bubble in stock market prices, and if thats the truth i wish ben bernanke woe come out and tell us that thats the purpose of qe. Ron . He has suggested he would like to see an improved stock market create positive wealth with real estate but if you look at the explicit targets the fed has put forward, Unemployment Rate of 6. 5 and an inflation rate of maybe 2. 5 , and if you look at the feds mesh ufrs inflation all of them say thats 1. 5 . Underemployment and unemployment together 14. 7 , not at that trigger point at any set of circumstances that the fed would start to reverse policy. Granted, this is a historic change but theres a historic reason. In 1937 as we were coming out of depression, the government tightened fiscal policy, raised taxes and the fed raised rates and created a second downturn. This is what ben bernanke has studied his whole life and this is the mistake he refuses to make. Jeff, wouldnt that be a mistake . I mean, isnt part of the equation that were not talking about, demand . Yes, theres a lot money out there and its very cheap right now but the demand for that money is whats keeping the inflation lower right now, isnt it . I would tell you, yeah, i mean, the demand i guess is certainly the issue that hes trying to stimulate here, but i just dont know how you stimulate it by continuing to just devalue the United States currency. Let me stop you there, jeff, because that hasnt happened. Yes, it has. By what measure . If you look at the dxy, down 11 since qe started. Okay. If that was also part if you read all. Feds and all of Ben Bernankes literature on how to attack deflation and reflate, part of it is gently devaluing the dollar. Competitive devaluations going around the world where all the Central Banks of major nations or blocs are also easing at the same time, so devaluation is a relative term. 1917 was a much, much bigger devaluation than anything weve seen recently. One indicator here, the price of gold. Going nowhere. On a tear for the last 12 years. Why is that not a signal that inflation is on the way . I was having the conversation with someone very prominent in the Commodity Markets yesterday. If the gold market were truly frightened of some sort of runaway inflation, hyperinflation as the Peter Schiffs of the world and others suggest it would be at 5,000 already, got to 1,900, back in the high 1,600s and done remarkably little over the last year. I think inflation is a phantom threat. Across the global economy, theres Deflationary Forces and excess capacity in the world and no one anywhere is at or near full employment. Were not at that point at which the fed starts to see the whites of inflations eyes. Were not even close. Can you make this practical for us and our viewers. How do we make money in this environment . We know where we are, see what the reality is, may not be what you want but the fed is there, providing easy market and thats why this market wants to go nowhere but up except in equities. How do you make money in this market . The fed is pushing you into risk assets so thats where you go. You have to keep going while the band is playing, but this is what concerns me is at what point do we get the snapback . We already started off 2012 with a record amount of money going into high yield. How would you like to buy cpaper and get 5. 5 return on it as far as yield goes . I would hate to be a Portfolio Manager in this kind of environment because i dont know how you balance a portfolio in terms of risk. I would love to be one, and i think part of it is if you you can make money dmest click because stocks are still relatively valued or undervalued based on, you know, the feds model and other models, a lot of opportunities to pick up stocks that were hit hard during the summer, industrial stocks in particular. Good brand name stocks in entertainment and food that look relatively attractive, but china is stimulating its economy. Japan is pump priming, so those areas you can create a barbell strategy that makes a lot of sense being long risk assets here and make some money here in 2013 which agree with jeff is going to be a better economy than most people expect, but the fed is not going away until they are sure. The race to the bottom is going to be one of the major stories in the Standard Poors<\/a> 500 would be another five and a half year high for the s p. Lets take a closer look at the markets in todays Closing Bell Exchange<\/a> with our guests. Andres, you and i were talking about the markets earlier. What do you think . Getting ahead of ourselves with the rallies weve had so far this year. Earnings matter, and were in earnings season. To a certain extent we might see some consolidation in the short term. If we look at valuations, still looks attractive or trading 13 times future earnings, 12 months ahead. The average has been 15 in the last ten years. Right. So valuation for the medium term and long term still looks attractive but i would say in the short term we could see consolidation. Peter, what do you make of the earnings that have come out so far . We made much of the Bank Earnings<\/a> which for the most part were very good. Other sectors are at 52week highs right now. Housing, airlines, what do you make of what were hearing from corporations right now . Were really getting a picture i think of a market thats getting ready to rotate in terms of its economic focus. I think weve seen the Second Derivative<\/a> on a lot of earning estimates, changes coming off. Seeing changes in leadership. The earning slickials got left behind so were seeing a major rotation from winners into what had been last years losers. So you think they will play catchup at some point . We think that the economy is going to begin to pivot we think from consumers to more of a manufacturing and exportoriented basis and that well reach Critical Mass<\/a> on that here in the next two years. Rick, andres and i were talking during the break here about the bank of japan meeting coming up next week. I know youll be keeping an eye on that, having a big implication for the currency markets, wont it in. Oh, absolutely. I think, you know, ive tried to keep our viewers on top of how huge those trades could have been, and they were. Whether its euro yen, dollar yen. If you want to know why our stock market is doing well, look at this chart. A chart of one year of the nikkei and obviously something magical happened towards the end of last year. Look how the stock market took off and connect the dots with the transcripts, Ben Bernankes<\/a> advice given a decade plus going to the japanese was definitely put in place, the liquidity programs, the quantitative easing, the monetizing and look what happened to their stock market, and if you also look at what happened to the jgb, briefly, they shot up in yield. Its moderated a bit. Kyle bass is on today with david faber and Everybody Loves<\/a> kyle bass. Right. He talked about the first black swan with all the central banking activity probably turns out to be japan. We dont know when. I would fully agree and i think these two charts give you some clues that there is a possibility. Andres, what do you think . Is japan back . Well, i think to a certain extent the unintended consequences is what were actually going to see in the couple of months to come which is i dont think japan has the ability to get to 2 inflation which is their target any time soon, but that inflation might present itself in places like commodities. Another way to look at it is look at carry trade and countries like mexico that have tame inflation. Still, you can get 4. 5 , 5 on a coupon there, so countries like mexico could be one of the beneficiaries of whats happening in japan and what they are attempting to do. Are you investing over there . Do you like that market right now . We like the emerging markets overall, but i think mexico is one of the places that i particularly like . Hello there. So happy that you just said that about mexico because i have been looking at the mexico story and theres a Real Recovery<\/a> going on. We are going to be talking to the minister of finance in mexico. What are the risks . Some people look at mexico and say, number one, how do i actually access this growth, and number two, what about the risks of fraud, of not being able to get your money out . What are the risks . Well, the risks in my opinion is actually the valuation is a little bit rich compared to a lot of other emerging market countries. The upside is the fact that they have done significant labor reform. Just got a new president that wants to basically invite Foreign Investment<\/a> and overall economically and market friendly, it looks very good, but the risk to me is that youre already paying up a little bit for it. Also joining the dinner party today. This party is getting bigger. What is going on . Started laid. Andres and i were getting a little lonely here. Youre very bullish on this market right now, right . Yes, yes. But are we getting ahead of ourselves . In the u. S. Or japan . Here in the u. S. No, i think were fine. This year has been a good consolidation week. Nice to see its holding that 1470, 1480 range. The economic numbers are becoming right on the screws which means there havent been surprised to the upside or downside so the market has been, you know, taken in its stride. The market has been pretty steady and the earnings are a little bit wayward, but were only a little bit early into this. Next week will be a much more meaningful earnings week. At lot of financials were frontend loaded. The news is very good. You would add positions as we go higher . Some of the things to look at, the industrials. Some of the things were keeping an eye on is some of the defense stocks. Right under the shadow because of the possible quester. They are getting cheap and they have possible cash flows. Glad you mentioned earnings. So far its been somewhat mixed. I mean the Banking Sector<\/a> is turning out some good numbers. Yeah. Where do you expect we might see the surprises on the upside in terms of the Fourth Quarter<\/a> . In terms of sectors . Yeah. Financials have obviously done well, and thats somewhat cyclical. What i expect to do well are the consumer staples. They have been chugging along, but i think some of their expenses and costs were pretty moderate in the Fourth Quarter<\/a>, and i think with the with the change in the taxes that came through in january, usually better for staples than consumer discretionaries so hopefully well get good numbers from there. Where would you be investing, Peter Sorrentino<\/a> . You said you like the early cyclicals . What does that mean . Who do you like here . Well, really its a wide brush right now. We like refiners, the volero of the world. Marathon petroleum spun out. Thats an opportunity and agriculture, Companies Like<\/a> lindsey, adco. Do like the brazilian market. The real suffered last year so a lot of companies are on sale, cozian and volley, after great opportunities for investors, considering weve got a strong theme in the emerging markets that will continue this year. Peter, thanks for joining us, rick as always, andres and christian come back when you can stay longer. I will. Thank you very much. See you later. Less than an hour finishing off whats been a pretty good week for the bulls on wall street. Bob pisani has been in the middle of the action and is down on the floor right now. Bob . In the middle of earnings season. Im a happy guy, and i see stockpicking earning and individual stocks moving on earnings but not whole sectors which is what happened last year. Take a look, for example, on the multiindustry stocks. Ge, good numbers today. Parker hannifin numbers, new high. Johnson controls disappointed because they guided lower on their current quarter. All the stocks are moving in line with their commentary and thats something we havent seen in a while. Now, theres a lot of talk. The industrials have been very strong this month. Talk about moving into industrials and maybe out of bank stocks which were strong last year. The banks are looking a little tired right now, a little bit toppy. Capital one had a very disappointing earnings report. You can see the rest of the stocks arent going anywhere as well. Semiconductors. Normally, if you had intel had disappointing guidance. You would see a lot of effect in the Overall Group<\/a> the following day. Intel is down 7 . Taiwan semi, micron, texas instruments, not doing much. Thats what i mean. Individual stocks doing well but not whole sectors. Good day for ipos, norwegian cruise lines, priced at 19 and 23 million shares. Opens at 25. There it is, holding up, Straight Line<\/a> all throughout the day. Finally, the third of three Master Limited<\/a> partnerships, suncoke energy, priced at 19, a little bit below, but you can see, guys, a fairly good week, fairly active week for ipos. Thanks, bob. Final stretch of the week. A pretty good week. 50 minutes before the closing bell sounds. Dow jones industrial average still climbing, up 12 points on the session. The economy the stocks have been rallying as the economy improves, thats whats happening here, so the question inevitably becomes when does fed chairman bernanke finally have to be convinced that its time to put the brakes on the economic stimulus . Both sides that have issue coming up. A big debate on that one. Then a document dump finally allowing investors an inside look at the feds First Response<\/a> to the financial crisis. And put it this way. No one really comes out looking so great. Well have the details and tell you whats in the documents. Youre going to want to hear on them. Oh, holy auto auction, batman. The original batmobile is hitting the Auction Block<\/a>, the original adam west batmobile, and you will not believe, i did not believe, how much it will cost to drive away with this one of a kind vehicle. Maria is willing to put up the money. I am not. If you could buy that batmobile, which one would you purchase . Would you go old school, pick the adam west original . I think that might be my favorite. Maybe you like michael keaton. Michael keaton is my second favorite or do you prefer function over form and the tanklike batmobile from the dark knight. Youre driving right past mine, the val kilmer. I didnt like the movie, but i loved the car. Youve got to go adam west, bill. Im sorry. Send us a tweet and let us know what you think. Thats so 50s. Your picks coming up on closing bell. Stay with us. Okay. Weve got an improving Housing Market<\/a> and overall better stock market and that has our own jeff cox beginning to wonder why isnt ben bernanke starting to unwind the steps hes taken. And he joins ron insana who is not worried about bernanke putting the brakes on. You feel low rates over a prolonged period will lead to inflation at some point . Ron and i have been kind of trash talking here for the last half hour or so. Exactly. Dont start without us, getting ready for this thing. Maria mentioned the housing numbers. How about the jobs numbers. How about Industrial Production<\/a> . How about retail sales . I dont understand why are we printing 85 billion a month . The fed is not letting up on the gas. The fed is putting its foot further down on the floor here going into completely uncharted waters. They have no idea where this is going to take us, but we do know, i know i went to the supermarket last week and i wanted to drink drano by the time i got out of the place. Were still paying over 3 a gallon for gas. We have we are building a case for unintended consequences, and we have been sold this story for the last 12, 16 months about the economic recovery, so why . Why, ron . Tell me, man. But wait a second. Everything youre mentioning, jeff, actually underlines and encourages the idea that we need the feds free money. You put housing aside, mentioned unemployment. Okay. Its not fixed yet. You mentioned growth. Its not fixed yet. Sure, you know, also mentioned inflation, but ethin saying leads me to believe we still need the stimulus so i dont understand your point. Maria is carrying your pail of water . Im still old enough to remember when the u. S. Economy could run on its own and didnt need trillions of dollars of money printing every year. I think that we should be able to at this point say we can go back to having a free market. We can go back to having a place where we are not manipulated. All right. My personal feeling is that the motive behind this, and ill let you speak here, ron. Ive got time. Were talking about stock prices. Thats the primary purpose behind this. Building a bubble in stock market prices, and if thats the truth i wish ben bernanke woe come out and tell us that thats the purpose of qe. Ron . He has suggested he would like to see an improved stock market create positive wealth with real estate but if you look at the explicit targets the fed has put forward, Unemployment Rate<\/a> of 6. 5 and an inflation rate of maybe 2. 5 , and if you look at the feds mesh ufrs inflation all of them say thats 1. 5 . Underemployment and unemployment together 14. 7 , not at that trigger point at any set of circumstances that the fed would start to reverse policy. Granted, this is a historic change but theres a historic reason. In 1937 as we were coming out of depression, the government tightened fiscal policy, raised taxes and the fed raised rates and created a second downturn. This is what ben bernanke has studied his whole life and this is the mistake he refuses to make. Jeff, wouldnt that be a mistake . I mean, isnt part of the equation that were not talking about, demand . Yes, theres a lot money out there and its very cheap right now but the demand for that money is whats keeping the inflation lower right now, isnt it . I would tell you, yeah, i mean, the demand i guess is certainly the issue that hes trying to stimulate here, but i just dont know how you stimulate it by continuing to just devalue the United States<\/a> currency. Let me stop you there, jeff, because that hasnt happened. Yes, it has. By what measure . If you look at the dxy, down 11 since qe started. Okay. If that was also part if you read all. Feds and all of Ben Bernankes<\/a> literature on how to attack deflation and reflate, part of it is gently devaluing the dollar. Competitive devaluations going around the world where all the Central Banks<\/a> of major nations or blocs are also easing at the same time, so devaluation is a relative term. 1917 was a much, much bigger devaluation than anything weve seen recently. One indicator here, the price of gold. Going nowhere. On a tear for the last 12 years. Why is that not a signal that inflation is on the way . I was having the conversation with someone very prominent in the Commodity Markets<\/a> yesterday. If the gold market were truly frightened of some sort of runaway inflation, hyperinflation as the Peter Schiffs<\/a> of the world and others suggest it would be at 5,000 already, got to 1,900, back in the high 1,600s and done remarkably little over the last year. I think inflation is a phantom threat. Across the global economy, theres Deflationary Forces<\/a> and excess capacity in the world and no one anywhere is at or near full employment. Were not at that point at which the fed starts to see the whites of inflations eyes. Were not even close. Can you make this practical for us and our viewers. How do we make money in this environment . We know where we are, see what the reality is, may not be what you want but the fed is there, providing easy market and thats why this market wants to go nowhere but up except in equities. How do you make money in this market . The fed is pushing you into risk assets so thats where you go. You have to keep going while the band is playing, but this is what concerns me is at what point do we get the snapback . We already started off 2012 with a record amount of money going into high yield. How would you like to buy cpaper and get 5. 5 return on it as far as yield goes . I would hate to be a Portfolio Manager<\/a> in this kind of environment because i dont know how you balance a portfolio in terms of risk. I would love to be one, and i think part of it is if you you can make money dmest click because stocks are still relatively valued or undervalued based on, you know, the feds model and other models, a lot of opportunities to pick up stocks that were hit hard during the summer, industrial stocks in particular. Good brand name stocks in entertainment and food that look relatively attractive, but china is stimulating its economy. Japan is pump priming, so those areas you can create a barbell strategy that makes a lot of sense being long risk assets here and make some money here in 2013 which agree with jeff is going to be a better economy than most people expect, but the fed is not going away until they are sure. The race to the bottom is going to be one of the major stories in the Global Markets<\/a> this year. Finally we got relief on the japanese yen for those exporters, and look what happened to the japanese stock market. And guess who has to keep buying bonds, the japanese and chinese and all the other countries that peg their currencies to the dollar . A crisis isnt a crisis until its a crisis, right . Thats how it works. Lets throw some more. Thanks, guys. Have a good time. Ronny, 6 00. Never waste a crisis. We love crises. No, we dont. No crisis though right now. Where is this going . The. The question to be asked though, if the dow closes around this level right now, it would be at a five and a halfyear high, right at that number. Keep an eye on that as we head towards the close. Last year we were talking about the startup activity across the country. Money was plowing into startups. Well, when you look at the numbers today, its actually plummeting over the last couple of months. Was it because of all of the uncertainty out of washington . Is americas role as an innovator in the Business World<\/a> in jeopardy, and is that because of what went on in the Fourth Quarter<\/a> . Well talk to Venture Capital<\/a>ists about this . And how would you like to buy apple stock today for about 7 a share. Al gore did just that, and now hes got 30 million more than he had before he did that. Wait a second. Google stock is trading at what, bill . I mean, he paid 7 . For apple stock. And apple stock is around below 500. Thats correct. And he paid 7 . Yes, he did. That would be the magic of the options market. How did the former Vice President<\/a> get apple at such a discount. We have details coming up on the closing bell. Well all be astounded together. Hes on the board of google. Sorry about that. What are you doing . Nothing. Are you stealing our Daughters School<\/a> supplies and taking them to work . No, i was just looking for my stapler and my. This thing. I save money by using fedex ground and buy my own supplies. Thats a great idea. Im going to go. We got clients in today. [ male announcer ] save on ground shipping at fedex office. [ male announcer ] dont just reject convention. Drown it out. Introducing the allnew 2013 lexus ls f sport. An entirely new pursuit. With multiple lacerations to the wing and a fractured beak. Surgery was successful, but he will be in a cast until it is fully healed, possibly several months. So, if the duck isnt able to work, how will he pay for his Living Expenses<\/a> . Aflac. Like his rent and car payments . Aflac. What about gas and groceries . Aflac. Cell phone . Aflac, but i doubt hell be using his phone for quite a while cause like i said, he has a fractured beak. [ male announcer ] send the aflac duck a getwell card at getwellduck. Com. Welcome back. It turns out 2012 was a rough year for startups as Venture Capital<\/a>ists spent less money on fewer deals. Funding was down 10 in 2012 from the year earlier, and that was the first decline in three years. In fact, the number of deals were also down 6 . Clean technology and Life Sciences<\/a> were among the hardest hit sectors. Whats behind this decline, and what does it mean forthcoming year . Is it a big worry as america tries to lead in innovation . Joining us Brad Weinberg<\/a> of blueprint health, here with us at the new york stock exchange, an accelerator that funds primarily health i. T. Startups, and john baackes is also with us of new Atlantic Ventures<\/a> which invests mostly in mobile technology and ecommerce. John, well start with you. How much of this decline had to do with concerns of the fiscal cliff at the end of last year . What do you think . The decline, bill, if you take a look at it, was completely represented in the clean tech sector and the Life Sciences<\/a> sector. The sectors we invest in are software and internet. This was the best year, 2012, for Software Investments<\/a> since 2001. It was the second best year for internet investments since 2001. So the total picture might look grim, but in the space of technology. Software and internet, its a good story. Software and internet as it relates to health care, or software and internet across the board, john . Software and internet across the board. Very interesting. Yeah, go ahead. Life sciences was down. Double digits. Clean tech was down almost 40 . The reason those two were down, bill, to your question about the fiscal cliff. Right. Is they both depend on government policy. Clean tech to be successful depends on government subsidies and Life Sciences<\/a> to be successful. It depends on low regulation. That makes a lot of sense. Low regulation and low subsidies these last couple of years. Greg, youre saying venture funding may have declined, but youre expecting the activity to pick up in 2013 because of health i. T. Thats your space. Look at health care specifically, Life Sciences<\/a> was the biggest decliner by 16 . There was a decrease in investment, but if you look at specifically health care, Digital Health<\/a> care i. T. , it increased investment increased over 50 , so were seeing huge shifts of money from Life Sciences<\/a> and medical devices into health care i. T. Where the quickest innovation has happened. Do you agree with johns premise that those that suffered the most were those the benefit from government subsidies trying to jump start those areas like clean technology, for example . Yeah, and a lot of it, if you look back in history to 2007 and 2009, given that Venture Capital<\/a> is a longterm investment has to deal with what was happening in the markets then, and the risk tolerance of Venture Capital<\/a> firms then to make the investments that created followon investments in 2012. So a lot of it even were seeing the regulation really spurring investment really only in health care i. T. Life sciences and medical devices, a lot of a lot of the problems there were actually started in 2007 and 2009. So whats driving the vibrancy in health i. T. . Is it the demographics of the country . Were living longer and the same question, john. Whats driving the vibrancy that youre seeing . Is it mobility . What are sort of the umbrella trends . Sure. The biggest the biggest thing that were seeing is that it is so much easier to use the massive amounts of data that we have and connect them to personal Health Changes<\/a> that you can make, so and health care has always been somewhat behind in using the innovation that weve used in other industries, and they are finally catching up five, ten years later, and were seeing an explosion of investment in health care i. T. S, to emrs, to personal health and Wellness Companies<\/a> and employers. John, what about you . In the areas that you fund, whats whats creating the strength right now . So, the most important thing to remember here is that startups are the spear of the american economy. 40 million jobs were created over the last 25 years. All of those jobs were created in young businesses, businesses that were less than five years old. If you take a look at four sectors of the economy, retail, health care, education and defense spending, thats onethird of the economy, thats where we think the money is going in the next five years. Those areas are right for change and Venture Capital<\/a>ists are looking at that straight on. Onethird of gdp will be revolutionized we see in the next five years. Wow. So we talked to the wrong two guys if were looking for areas that are seeing a contraction in Venture Capital<\/a>. I mean, you guys happen t in the sweet spot right now. Brad, is that a Fair Assessment<\/a> . That is correct. Were seeing a huge expansion in investment. And, you know, if youre looking for an area that is growing very, very quickly, health care i. T. Is the place to be. Health care i. T. And also what john is talking about because youve got mobility taking over. So much data. I like to say nothing is growing as fast as data. Thats right. Maria, mobility is a horizontal play. It affects education. It affects health care and affects security and affects retail. Its really important, and mobility is not just the fourinch screen that we think about. Its the seveninch screen, the nineinch screen and the 11inch screen all going mobile. Yes. And its also health care. Sure. What kind of phone do you have . I have an iphone. John, what do you have . I have an iphone. Just asking. Have you like done away with the blackberry you . Didnt even look at the blackberry. Never even had one. Youll have an ipad by your hospital bed. Hopefully youll never need it but if youre in a hospital, youll have a tablet or ipad by your bedside the next couple of years. We have a Company Called<\/a> pad in motion. I had a blackberry before the blackberry had a phone built into, it so ive been an early adopter of technology, and ill tell you all screens are all going to look the same to the data and the service whether its health care i. T. , listening to radio on your device through a company like stitcher, all the same, doesnt matter. What about the blackberry 10 . I havent even looked at it. Okay. Im taking this to a whole new conversation. Thank you, gentlemen. Appreciate your thoughts. Always love talking to pcs. In the final stretch for the week. About 30 minutes before the closing bell sounds for the day. The Dow Jones Industrial<\/a> average moving forward, up 24 points on the dow now. If it closed right now, it would be at a five and a halfyear high, and this personifies the saying thats what makes the market. Our wall street firm one is upgrading netflix to a buy rating and another firm is advising clients to lighten up on that stock. Who is right . A debate coming up. Forget the iphone hysteria, is the blackberry 10 the new phone people are most excited about, one analyst getting mega bullish on the prospect of the stock, and it keeps moving higher. The return of the crackberry. Is that coming . Well take a look. Well see. Apple may be cheap compared to where the stock traded a few months ago, but nowhere near the Bargain Basement<\/a> price that al gore just paid for it. Details of his apple windfall coming up. [ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the Aerospace Industry<\/a> in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 75 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. Overmany discounts to thine customers [old english accent] safe driver, multicar, paid in full a most fulsome bounty indeed, lord jamie. Thou cometh and we thy saveth what are you doing . We doth offer so many discounts, we have some to spare. Oh, you have any of those homeowners discounts . Here we go. Thank you. He took my shield, my lady. These are troubling times in the kingdom. More discounts than we knoweth what to do with. Now thats progressive. Welcome back. A big change of heart on netflix. A top analyst who has been consistently bearish on netflix shares reversing course, now recommending buy it. Meanwhile, another analyst looking at netflix this morning going the other way downgrading it to underweight. Who is right . Lets talk numbers. On the technical side, Abigail Doolittle<\/a> is excan i strategist and cnbc contributor and matt goode is with wallach capital. Thanks very much for joining us. Ladies and gents, matt, the fundamentals on netflix. Whats your view . My view its a sale at 85 times earnings. They are burning cash. Four of the last five earnings have been disasters for people who have owned this stock. I think that theres real risk ahead for this. The stocks doubled over the last three or four months. I think caution is advised. Caution advised . 85 times earnings. Abigail, do the charts agree with that . Provocative points on matts part, but i would have to say the charts are really bullish here. When we look at netflix its trading in a Double Bottom<\/a> or a rounding bottom. What makes this pattern important is the fact that it confirmed last september on the disney deals when buyers were finally able to overwhelm sellers in the mid85 levels and this pattern has confirmed for its 125 target. As such, the pattern caused the twoyear downtrend to reverse. We now have a nice nearterm uptrend, and all of this is sealed by a golden cross, so i think that, you know, maybe we see a little bit of a pullback to the mid90s but overall netflix is set to rise to 120 if not higher 2013. The big issue, and, you know, i have respect for charts, but, unfortunately, charts are good until they are not, and what the surprise did the negative surprise is that netflix has inflicted on its shareholders over the last year and a half. A great chart today can become a disaster tomorrow. Generally charts tend to leave the fundamentals, and to your earlier points about earnings and metrics and that sort of thing, this is really not an earnings or a margin story, not even a revenue story despite the fact that revenues are growing quarter over quarter. Really about signing new content to grow the subscriber base, to reduce turn and turn all of that on to the Balance Sheet<\/a>. And for sure. And the disney deal is going to require a lot of cash. The company is burning cash. They may have positive ebitda, but they have negative Free Cash Flow<\/a>. This may be so, but this Management Team<\/a> has an excellent history of executing once they are on a successful business track. The streaming content is the way of the future. But youre talking about fundamentals. Thats all fundamentals, abigail. Thats fundamentals, but i think thats showing in the chart. I think the chart is showing us in 2013 the netflix Management Team<\/a> will continue to sign new content deals. Talk of a sony deal if they go after little niche plays that will brick in subscriber growth. In turn i think this Management Team<\/a> will turn this into steady growth along with positive Free Cash Flow<\/a> and improve the Balance Sheet<\/a> ahead of what they did in the 2011 crisis. I think all of those things are priced into the stock. I dont think so at all. Right. Again, i think its 54100. Been a great run. The stock will continue to run. I think this management will be able to execute signed deals. It will be the first time because this Management Team<\/a> has lost people a ton of money over the last year and a half. Lost money in 2011 with the pricing misstep. Ahead of that they showed they are an execution machine once they are on a successful business strategy. I think thats the case and it will translate to the share price because the Balance Sheet<\/a> and earnings will improve as time goings on. Matt, sounds like youre a seller at 99. I think at 100 you want to take chips off the table. Yeah. At 99. 23 right now. Thank you so much. Absolutely. Abigail, youre a buyer here. Bullish. Well keep watching. See you soon. Thanks, both of you. Buying the stock market. If were closing here, at a five and a halfyear high for the dow and s p. Keep an eye on this in the next 2420minutes. Our next guest says theres three things investors much watch for now. Need to know what they are before youre deciding if youre in or out. Well talk to Morgan Stanleys<\/a> david darst who will lay it out. A group of leading ceos is urging congress to raise the eligibility age for Social Security<\/a> and medicare to 70, and that has unleashed what is known as a wave of backlash. Just picture that. But is there a better way . Well look at that coming up. Tdd 18003452550 when im trading, im so into it, tdd 18003452550 hours can go by before i realize tdd 18003452550 that i havent even looked away from my screen. Tdd 18003452550 tdd 18003452550 that kind of focus. Tdd 18003452550 thats what i have when i trade. Tdd 18003452550 tdd 18003452550 and the streetsmart edge Trading Platform<\/a> from charles schwab. Tdd 18003452550. Helps me keep an eye on whats really important to me. Tdd 18003452550 its packed with tools that help me work my strategies, tdd 18003452550 spot patterns and find opportunities more easily. Tdd 18003452550 then, when im ready. Act decisively. Tdd 18003452550 i can even access it from the cloud and trade on any computer. Tdd 18003452550 with the exact same tools, the exact same way. Tdd 18003452550 and the reality is, with schwab mobile, tdd 18003452550 i can focus on trading anyplace, anytime. Tdd 18003452550 tdd 18003452550. Until i choose to focus on something else. Tdd 18003452550 all this with no trade minimums. And only 8. 95 a trade. Tdd 18003452550 open an account with a 50,000 deposit, and get 6 months commissionfree trades. Tdd 18003452550 call 18005784439 tdd 18003452550 and a trading specialist tdd 18003452550 will help you get started today. [ male announcer ] some day, your life will flash before your eyes. Make it worth watching. The new 2013 lexus ls. An entirely new pursuit. Well, ge and Morgan Stanley<\/a> among the days big winners after announcing their earnings. Bertha coombs has the details for that on us. Bertha. Reporter very big winners. Over 10 of the s p reported. Fourthquarters, expected to be up 2. 5 according to thompson reuters. Down from a nearly 3 estimate at the start of the year. Morgan stanleys result underscoring why financial Earnings Results<\/a> are expected to post the strongest sector earnings growth. The investment banks results topping estimates handley and pledged to return capital to investors very soon. That sent shares to a 52week high. Ges earnings beat by a penny and saw revenues top as well and chairman and Ceo Jeff Immelt<\/a> says ge is wellpositioned for doubledigit growth though the outlook in countries remains uncertain. Johnson controls firstquarter results and tops the expectations and the company lowered guidance after a big drop in autorelated demand after a drop which has seen a 9 drop in auto production. Softness is expected to continue through the first half of the year. A big loser today, off about 3 . Looks to be off of the lows right now, bill. Back to you. All right, bertha, thanks very much. Two big winners, ge and Morgan Stanley<\/a> both up on, and neitherig knight nighting much of a stock rally. Up 31 points right now. We have a holiday on monday. Whats in store for stocks coming up next year . Lets ask david darst and josh brown from fusion analytics. Welcome back. A big day next week is wednesday, january 23rd of january. If you liked it at 700, youll love it at 500. Going to get hurt next week because they are going to expect to report 13. 44. Last year it was 13. 87. First time in nine years they will have down yearoveryear earnings. Think it will hurt the stock . Start accumulating. What do you look for in terms of the earnings news that we are waiting for next week . Where do you look for winers . What im really trying to do here at this juke tour is keep a close eye on the forest and not focus so much on the individual trees. I think that would probably not be the best course of action. Given the fact that my job is to make sure that people dont miss whats left of this market action. Right now what im focused on are things like the advanced decline line. Im looking at some of the as lators that gauge new highs, that gauge how many stocks are moving in the right direction versus the wrong, and i think that keeping the broad leadership that weve seen and just keeping tabs on that is probably the most helpful thing that i can add to the equation. And they all add up to a higher market right now, or is it getting tired . Thats the good news. Seeing this rotation from sector to sector. The new high list is rock solid. The advance decline data continues to expand. Were seeing more and more stocks participate. Some of the sectors that were hardest hit last year, like industrials and energy, are taking a leadership role and thats very positive. Thats positive. David, you said there are three things folks need to know. What are they . What are those three things . Profits, production and personal income. You can add a fourth p which would be politics, ie this debt sequester, continuing resolut n resolution, the money to spend through the end of the fiscal year and a debt downgrade. Our people think theres a greater than 50 chance that the United States<\/a> debt rating will be taken down another notch. Will it matter . If your people think a 50 chance, is that priced into the market . I dont think it is priced into the market. Thats going to hit the market then . Thats right. Buy some japan and buy some Master Limited<\/a> partnerships and also buy drug stocks. All of those have been acting very well, and there are ways, maria, through your husband, to get japan without the yen, okay, on a hedge basis. Im not going to say anything more. Already said plenty. Talking about the dxj. You said it. Through my husband. Okay. Okay. Full disclosure. My husband is the ceo of wisdom tree. I had no idea. You can buy japan on a hedge basis. The yen has been weakening which is helping your exporters. The biggest election day of last year was december 16th. You had president barack obama, putin, Francois Hollande<\/a> and pena in mexico. Shinzo abe in japan, december 16th, going to weaken the yen and restructure there, and we think japan has legs, maria. Right. So you want to get exposure, big exporters, automobile companies, electronics. Japan exporters are on fire and thats why that fund has been really increasing. You look at a chart, maria, goes straight up. Hey, josh, you Like Health Care<\/a> stocks, too, at this level, dont you . Weve been extremely bullish on health care since the early part of lastyear, and there was absolutely nothing in the data, terk call or fundamental that tells us we should change our mind. One name to highlight is pfizer. They are about to spin off their Animal Health<\/a> unit. If you know the data on how spinoffs typically perform, parent and child, youll want to pay extra special attention to the timing of this deal, because ive got to tell you, i think it will be unlike a lot of value. I think both pieces that have equation are able to be owned. Check out a chart of pfizer. This hank has broken all resistance going back 12 years and the valuation is okay and youve got a 3. 6 dividend yield just for the heck of it. Thats the kind of thing we want to focus on. Very good. Good to see you both. Josh, thanks. David, nice to see you. Thank you so much. Happy Martin Luther<\/a> king holiday day, everybody. Markets are closed on monday. In the final stretch of this long weekend. The market is up 37 points on the dow industrials right now. As we said, good to be al gore right now. Just paid less than half a Million Dollars<\/a> to purchase 30 million worth of apple stock. Sweet. How did he pull that off . Well find out. Weve got details coming up. And an update on a Lottery Winner<\/a> who died of cyanide poisoning. Unbelievable story. Today the body was exhumed. The latest on when investigators are finding out in this Million Dollar<\/a> murder mystery. Stay with us on that. [ male announcer ] you are a business pro. Executor of efficiency. You can spot an amateur from a mile away. While going shoeless and metalfree in seconds. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. Now this. Will work. [ male announcer ] just like you, business pro. Just like you. Go national. Go like a pro. Olaf gets great rewards for his Small Business<\/a> pizza [ garth ] olafs Small Business<\/a> earns 2 cash back on every purchase, every day helium delivery. Put it on my spark card [ pop ] [ garth ] why settle for less . Great businesses deserve great rewards awesome [ male announcer ] the spark Business Card<\/a> from capital one. Choose unlimited rewards with 2 cash back or double miles on every purchase, every day whats in your wallet . Well, the new year has been incredible for al gore, and we ear only 18 days in. First, he sells his Cable Network<\/a> for half a billion dollars. Now he just bought 30 million worth of apple stock. However, he paid less than half a Million Dollars<\/a> for the shares. Jane wells is in los angeles with why suddenly its so good to be al gore. Jane . Reporter maria, were going to run through the numbers. Yes, it is so good to be gore. The former Vice President<\/a> is now wealthy enough that he could probably save the planet all on his own. The ten hottest years ever measured, they have all occurred in the last 14 years. Reporter well, the host year for al gore may 2013. At least for his portfolio. This filing with the s. E. C. Shows that the former Vice President<\/a> has just exercised options to buy 59,000 shares of apple for about 7. 5 bucks a share. Apple shares currently trade around 500 so thats 66 times more than the price hes paying, giving him a profit of about 29 million on paper after forking over about 440,000. Now, gore has been a longtime member of the apple board. Regardless of whether or not he invented the internet, brought in by steve jobs in 2003 and given those generous Stock Options<\/a> because back then thats what apple stock was trading at. 7 and change. Not 700 and change. 7 and change. Gores obviously a patient man waiting so long. Is he suddenly buying on dips . Well, the options had to be exercised by this march. After ten years, and just in time he got some fast cash. As you mentioned, he netted a reported 100 million in the half billion dollar sale of current tv to al jazeera. Forbes jokes, quote, i guess the check from al jazeera must have cleared and the man who was worth 2 million in 2000 is now worth 300 million, richer than myth romney but nowhere nearly as rich as Michael Bloomberg<\/a> at 25 billion and hes only a mayor. Maria and bill, back to you. He should have done it last year before the fiscal cliff when the taxes went up. Actually al gore was pushing them to do the deal before the year closed because he wanted to get the 15 rather than 20. Missed out. Thank you, jane. Back with the closing countdown. Moving higher here. The dow is up 38. It was a wake ago today that transportation secretary lahood said Boeings Dreamliner<\/a> was so safe he would fly on them and now they remain grounded. Why he reversed course so quickly. And the original batmobile driving to the Auction Block<\/a> this weekend. You will be shocked, i guarantee. Youll be shocked to learn how much it will cost to buy this world famous vehicle. Meantime, they have got us thinking. If you could buy any of the batmobiles which would it be . We have our favorites. We want to know your favorites so tweet us which one of these you would be buy. Your answers later on the closing bell. [ male announcer ] some day, your life will flash before your eyes. Make it worth watching. Introducing the 2013 lexus ls. An entirely new pursuit. [ male announcer ] this is karen and jeremiah. They dont know it yet, but theyre gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, theyll find some retirement people who are paid on salary, not commission. Theyll get straightforward guidance and be able to focus on other things, like each other, which isnt rocket science. Its just common sense. From td ameritrade","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia801500.us.archive.org\/0\/items\/CNBC_20130118_200000_Closing_Bell\/CNBC_20130118_200000_Closing_Bell.thumbs\/CNBC_20130118_200000_Closing_Bell_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240619T12:35:10+00:00"}