March of 2011. We start off much like europe with weaker than expected pmis. Will that paint the first big data picture and supply information for the rest of the year . Im not sure. We just breached that big settlement from october 15th at 2. 14. The 10 year at 2. 13 bund getting closer to 40 basis point handle. Unbelievable the money into bonds. Lets bring in david rosenberg. Anything to worry about there with the miss in manufacturing . Its still a pretty strong number. Well its a diffusion index. 55. 5 is telling you net on net Manufacturing Activity despite all the problems globally in the u. S. Is still expanding. Its just expanding at a more moderate rate than it has been over the course of the past few months. Its still positive for manufacturing. Just less so. To me it still consistent with an economy id say chugging along roughly 3 trend rate of growth right now. Which is good. Its been a 2 economy since the financial crisis. Well take that 3 . We are starting off the new year with a very strong dollar much like last year. Dollar index at nineyear highs. How does that reshape the investment landscape, the economic landscape for 2015 . Right. I think that the ism told you that the impact of the strong dollar is probably going into industrial activity. Dollar strength reflective we have Strong Demand domestic issues in the u. S. Dollar is a price and relative price. Its telling you things domestically in the u. S. Are better than in most other parts of the world. You are going to find a lot of large cap exporters in the industrials, technology. You are going to find companies and sectors with high sensitive to the foreign economy. The sensitive to the translation effects of the firm u. S. Dollar will have earnings estimates come down over the course the next several quarters. Be wary of those sectors. What does a strong dollar do . It helps bring down import costs. Its beneficial for the consumer and very beneficial for the retailer. Consumer discretionary, areas of the economy that cater to the consumer because the consumer comes out with much greater purchasing power on a global basis. This is positive for the Consumer Base at the expense of large cap exporters. Question on the u. S. Equity market. Since we are starting off 2015 weve come off this great year third year in a row of double digit gains. We are getting valuations that are above historical averages. Do you think the market is fairly priced begin whats going on fundamentally in the economy and with earnings or is there a disconnect . I wouldnt say there is a disconnect. The u. S. Market certainly you could argue is moderately expensive depending on the valuation metric you want to employ, whether you want to take a look at it over the past 10 20 years. What is happening, the u. S. Economy and the u. S. Markets are getting rerated because of the fact the economy domestically is operating at a far higher level than the rest of the world. Youll find a positive correlation between where the dollar is going and where the multiple is going. I wouldnt bank on any further multiple expansion. It could happen. The markets as you indicated on the expensive side of the range for the cycle, but i think this is going to be more of an earnings driven year this year. Like it was most of last year. We had moderate expansion in the multiple. Earnings did a lot of the heavy lifting. You didnt have another 20 , 30 year. Call it whatever it was, roughly 11 , 12 on the s p. This coming year will be earnings dominated. Will be slower. 7 , 8 . A lot of that will come out of the fact that the economy is doing better when you put it into the mix, earnings should follow nominal gdp with a premium. That leaves you a roughly 8 increase for the year. How much do we need to worry about the low cost of capital and dislocations between the rest of the world and the u. S. . Is chief capital adversity affecting investor behavior, entrepreneurial behavior and the like . You could make that argument. Keep ing keeping Interest Rates lower does create distortions in the marketplace. Leads to distortions in resource allocation. I would be the first to tell you at some point well pay the piper down the road. In terms of the here and now and the coming year it comes down to where do you put your money . It seems to me the fed will be slow to raise Interest Rates even when the time comes. Bond yields are coming down. At this point, how much further can they go . If we dont get further decline in bond yields from here your total return will be barely more than 2 . It comes down to saras question about valuation. Valuation isnt in a vacuum. You look at the p multiple but have to compare it to where Interest Rates are. Thats why im not overly worried about how expensive the stock market is. It will come down to what the earnings landscape is. Which sectors to be out of in the coming 12 months. One last question since you raise the fed isnt going to raise Interest Rates and some would say will not raise Interest Rates at all during the course of the year. A lot of people are frustrated by that. In this environment, presumably if they did start raising Interest Rates prematurely, you could have a huge effect on the dollar, couldnt you . That could really upset the apple cart . They painted themselves into a corner, you could argue. It reminds me some what of what happened in 97, 98. The economy wasnt growing 3 was growing more like 4 5 . Unemployment at 4 . U. S. Economy was operating as greenspan said in oasis on its own. The u. S. Is 90 domestic demand. Its economy could go it along even if exports dont do well. My sense is that the fed has already telegraphed if they are going to start to raise Interest Rates, they are going to move gingerly. It will be at least a year or two before they get to neutral. There is great frustration in terms of financial repression for acute savers. When they start to raise Interest Rates, the level we are coming off of and the fact this is a slow go approach by the fed, rates will not go to any normal levels for years down the road. Really . Thats been a tail wind. 5. 8 Unemployment Rate where. Do you think well finish the year . Probably around 5 . Wow. You still dont expect an Interest Rate hike. Great to catch up with you, david rosenberg. A new year and new recall for General Motors. The automaker recalling more than 80,000 suvs and trucks for faulty ignitions. They filed this at the end of last year with the national highway traffic administration. Because it was a slow news flow. It is a new recall but compared to what General Motors posted last year its not huge. More than 83,000 vehicles. Most 2011 and 2012 trucks impacted by the fact the ignition may get stuck in the start position. There are no injuries no fatalities linked with this. Potential is there for it to be stuck. General motors issuing this recall filing the paperwork with the national Highway Traffic Safety Administration on new years eve. When you look at the total number of rails within the last year for General Motors what a staggering year. 84 recalls in all. 26. 9 million recalled in the u. S. S, more than 30 million in north america. Yet for General Motors and the other automakers who had huge number of recalls in the last year this surge in 2014 did not hurt sales. We talked to the folks who crunched all the recall data. More than 82. 6 million vehicles recalled last year. And sold were 16. 5 million. They were sold at record high prices of more than 31,000 per vehicle. When you look at this last year a lot of people will say the dealership stocks were the ones to look at. Autonation is a perfect example and the other publically traded dealership groups. They had a nice run, in part because there is a complete disconnect between seeing all the negative news about the recalls and the fact people are saying i want to buy a new vehicle. Its not stopping them from going in to the dealerships. Thanks phil. When we come back, retailers closing out 2014 on a high note. Consumer discretionary sector a 10 gain. Dom chu has more on that. Lets talk about where phil left offer auto parts, retailers and cars. There is perhaps optimism about the consumer. If you look at the Retail Sector you see the s p 500 is up 13 over the past year. If you look specifically at one part of the market, Retail Stocks specifically and the funds that track them you see the retail etf is up 12. 5 . In line with the market. If you dig into it deeper you see the real standouts. Target stores up 21 . They have a new ceo brian cornell. Formerly from pepsico. They are recovering and up 21 . Peep are buying cars. There is optimism about auto parts retailers. Oreilly auto parts up 28 . Optimism whether people are buying more stuff to fix up their existing cars. The single best performing was staples up 50 . He wants them to merge with office depot. Some story lines for staples. Retail stocks have shown a strong fourth quarter. Can they continue that run with Consumer Spending in 2015 . Thank you very much. Up next 2014 was a big year for ipos. Biggest in more than a decade. Alibaba, gopro, king digital all going public. Will this year be just as big . I have a cold with terrible chest congestion. I better take something. Theraflu severe cold doesnt treat chest congestion. Really . New alkaseltzer plus day powder rushes relief to your worst cold symptoms plus chest congestion. [breath of relief] oh, what a relief it is. 2014 bought a slew of ipos. This past year was the biggest for u. S. Listings since the dotcom in 2000. What were the top performers of the past year and what is now on deck for 2015 . Joining us post nine david menlow president of ipo financial. Happy new year. To you, too. We raised 96 billion with ipos last year. And i didnt see a penny of it. How does it look for this year . This year has to be better. Sentiment, this is the layup kind of answer. Sentiment is really wonderful. The people who are trying to get their companies from a private basis to a public basis have a wideopen platform because everybody now is receptive and they know quality has been the upgrade. Is the pipeline as good this year coming . We dont see the pipeline as actively as we would like to. Shake shack started three months ago and now we have the actual s1 filed. The window has narrowed dramatically. It was a good year for ipo returns. On average up 19 beating the broader markets 11. 4 gain. Does that bring more interest to ipos this year particularly from retail . Its like dominos falling. Soon as everybody sees weve got rotational shifts within the marketplace Like Pharmaceuticals did extraordinarily well this year. Everybody believes its not just biotechs. A lot of talk about entrepreneurs who dont see urgency, plenty of capital, no rush. Will there be urgency later in the year . Yes. People need to be first into their marketplace to get the biggest market share. Example . If you take a look at food stocks. If you look at chipotle and what happened with that. Then go into chewys which came out this year. People say its another mexican concept. It spiked and started to peter out here. First in gets the largest market share. On the New York Post last week brought back the question of the future of the New York Stock Exchange and the floor itself ultimately. Alibaba was a huge event this year. 25 billion raised. Many people felt on that day it was qed. Can you give us color as to what that event proves or how you can monetize it in terms of the value of this platform and the nasdaq and how they compete . Its a very subjective subject you bring up here. I believe that the New York Stock Exchange has this aura around it that they can get anything done under any possible circumstance. Because of the Human Element . Possibly and the throwback the New York Stock Exchange has the impact panache. Companies are looking to do business the best way they can, fastest way they can. Once they are public i dont think there is a difference between new york and nasdaq. Virgin america. You were there for that. I was. 89 . Is consumer going to be more active than technology . We think of ipos and startup we think of the hot tech space. It was Consumer Companies that did well. I thought we were going to spend a lot of time on the shake shack and what happened in the ipo area for restaurant stocks. In the last five years, there have been 15 stocks in the restaurant group. Their return for the stocks that have been up which are 2 3 of those, 65 . If you take all the stocks even the five dourngs you are still looking at 31 on return. Why is that . I dont have an answer for that. Thats about the honest answer i can give you. Multiples out there are extraordinary. I think a lot are unrealistic. People are looking for, i guess i mentioned before chipotle. They think anything that becomes public will soar. Do you have a problem when people use percentages like that, but that include the first day of trading when its difficult for the average joe to get in . I do one metric that shows x first day. On that basis you would have suffered quite a bit if you didnt get the original ipo shared stock. For saras answer the consumer is there. Every single one of those, september for one. 1415 stocks opened at a premium. The one that opened down on those 15 restaurants socks was del frisco. The stock is up 86 . Good to see you. Always a pleasure. Have a great year. Thank you. When we come back which ceos will likely find themselves under a microscope as they try to revive their struggling brands. Careful with that selfie. It might be illegal. Some of the most notable and outrageous laws going into effect in the new year. Dows off the highs. As several companies try to revive their struggling brand, ceos are under scrutiny. Its an interesting list. Several ceos are overseeing changes in strategy they expect to reinvigorate their brands and hopefully quiet critics. Twitters dick costolo. His plan is to make twitter easier to use and introducing new services to attract new users. Mcdonalds will be unveiling a new menu. Ceo don thompson hoping this will be a recipe for reviving sales in the u. S. The biggest market in a lot of ways thompson is under the most immediate pressure because any results from this new menu good or bad will quickly be evident in the firms Monthly Sales figures. Yoohoo stock may be up over 128 in two years but critics say Marissa Mayer needs to do more as they claim the credit to the multimillion dollar stake to alibaba. Mayer plans to return that to shareholders. What will she do with the rest of the money . After a flat year for stocks sales and weak one for profits, coke is planning to cut costs and shed its low margin bottling business. Analysts wonder if muhtar kents plan will act fast enough to keep critics at bay. Ginni rometty tried to reinvigorate the lowest performing dow component. All ceos will be watched closely along with their stock to see if their plans bear fruit. Thank you very much mary thompson. A slew of new laws take effect today across the United States. Several hundreds in california. Jane wells has some of the highlights. Welcome to the program. In the uk is it the habit, every year do you have to have hundreds of new laws . Is that a thing there . Im curious. Not really no. Its a thing here. California alone has over 900 new laws. The biggie illegal residents are lining up to apply for drivers licensees this morning. Dmv hired 900 extra personnel to handle the estimated 1. 1 Million People who may come in over the next three years. The big winner insurance companies. Insurance will be mandatory and perhaps eventually rates the rest of us pay for uninsured motors its will go down. Large airports in california must provide breast pumping station. No confederate flags, no stars in bars can be sold unless part of educational or historical purposes. What state entity in california is selling confederate flags . Its against the law for websites to pay a fee to remove that ugly mug shot they got a hold of. Students cannot be expelled from school just because they quote, willfully defy teachers. The california red legged frog made famous by mark twain is our official state amphibian. Wine distributors can ship wine directly into massachusetts to customers. Also massachusetts allow selfserve gas pumps to have a clip which hold them open so you dont have to freeze your hand in the winter. Illinois joins with states and cities barring employers asking about your criminal history on an initial job application. In arizona there is a right to try law which lets people try medical treatments that have passed first phase Clinical Trials but have not yet been approved by the fda. And new york . Im glad you asked. No more Tiger Selfies in new york. No more taking pictures of you with your big cat. Sierra eisen, im looking at you. Im not a cat fan. I dont know. Carl, do people take selfies with tiger . Youre the selfie queen. People are writing in. Im deferring to our new legal expert. Absolutely. I would say that if the cat is big how big is too big . If the cat is this big, is that too big . I think you have a constitutional challenge here. Is it all cats or tigers . Domestic cats . Its all big cats. They should outlaw cat selfies. And dogs. Why are you seen allowed to be whats wrong with that . That was a kitten. Cub. Excuse me. I didnt know there were that many tigers hanging around new york state. I dont know. Kudos going through all those new laws. Thats what we call news you can use. You bet. Im here for you. Jane wells out in california. Straight ahead. Utilities turning in their best year in more than a decade. Absolutely stunning advance, sending the year up 25 . Will gains hold for the new year . We are already seeing new lows for this year on the 10year treasury. Utilities in demand. Well have more after the break. Ir you. No qu