you're watching first business: financial news, analysis, and today's investment ideas. good morning everybody, i'm angela miles. thank you for joining us. today on first business: what's in store for stocks as the new year unfolds...will the housing market continue to build up or falter in 2014??? plus...too "small" too fail. creative new sources of support and funding for start ups. new films that will light up the silver screen and the box office. and...the right call. our traders nailed the market moves in 2013--watch to see if they are in for a repeat performance! we begin our day by heading to the trading floor of cboe where

scott bauer of trading advantage is standing by. good morning scott. > >good morning angie. > >you have your eyes on stocks to watch in 2014. let's start with the financials. what would be your pick in that sector? > >the financials are really what have led this market higher in the past couple of years and now that we've already seen one tapering with more to come, rates are going higher and quite frankly the banks make money when rates go higher. i love goldman sachs, i love jp morgan, i love the entire financial sector so if you wanted to play it just on a macro basis, you can go into the etf or the xlf, but really goldman and jp morgan is what i'm watching. > >what would your play be on the consumer and consumer spending just for everyday goods? > >the economic news has been pretty good. i like the consumer staples industry. i like the procter and gambles of the world. i like coca-cola quite frankly. these consumer staple stocks---the ones that have just not really outshined the market but have just trended and stood through the marketplace as rates got

incredibly low---these are also going to shine this year. > >will the sun shine on alternative energy stocks this year---such as solar panel stocks? > >i do like it and i think there is going to be so much more money spent on r &d in these stocks and there are two in particular that i like. first solar and then a company out of china called csun--china sunergy. > >moving on to sectors that you would stay away from in 2014. > >the industrials. you look at those and they've had a real nice run as rates have stayed low and dividend yields have been fantastic. now that we have seen rates climbing and we just have seen the start, i think this sector has really probably topped out and is going to underperform going forward. > >scott, always a pleasure. > >thanks angie. in our cover story, the fed tapering of its bond-buying program could be a boost to commodities traders. they see futures in 20-14 looking better, weather-permitting, and less volatile than stocks at this time. thanks largely to

hydralic fracturing or fracking, u-s oil production is on track to nearly reach an all-time high. according to the energy information administration's 20-14 outlook, as much as 9.5 million barrels a day just two years from now. the previous peak was 9.6 million in 1970. "i think in the new year, there's going to be a lot of pressure on the us to lift the 1970 ban on exporting oil. so i think next year, the u.s. will take the historic step and start exporting oil." also, natural gas production is up and flynn predicts greater demand for it in 2014. "you're going to see natural gas cars, factories. you're going to see electric plants getting rid of coal and going to natural gas and we're going to be exporting a lot more natural gas than anybody thought possible in the next few years." some think energy could supply the boost, the economy's needed. "i'll be watching the dollar

over the next year. i suspect that the dollar will gain ground on euro currency, gain ground on the pound and lose ground to the japanese yen." on soft commodities, soybeans are trading three times than corn and may lead farmers to plant more soybeans this year. and with last year's 14-billion bushel record corn crop, cattle ranchers are hoping to recover from 2012's disasterous drought. "corn prices are now to a point where a cattle producer can buy the corn and feed it to the cattle and make money. as long as we keep that going the cattle producers are going to continue to expand herds. as far as corn, wheat and soybeans go instead of just putting money into outright positions, i'm more looking at spreads over there. for example, soybeans are historicaly high priced to corn and actually wheat is too. so you may see some interest in buying corn and selling soybeans

or wheat on spreads and that could be a very profitable trade in the coming year." jack scoville says there's an ample supply of coffee but there may be rising prices for cocoa and rice. the housing market continues along in positive territory. momentum is especially strong for builders. home builder confidence ended 20-13 on a high note, as construction started to pick up the pace. now, economists are saying watch for a series of gains in the sector. "prices will be higher and mortgage rates will be higher than they were a year earlier. but the good news for buyers is there should be more to choose from. now that prices have risen, more people are thinking about selling their homes, especially people who are back above water." jed kolko of trulia adds that construction of multi family buildings are up, which could lead to a spike in rentals this year. the auto market in the u-s continues to cruise in the fast lane... but used car prices are dipping a bit... according to jack nerad of kelly blue book. this summer-- u-s factories increased production... pushed by a sharp rise in new orders.

"we're seeing the car market get a lot stronger. the car market is a lot stronger than the overall economy by a considerable margin. and there's a few reasons for that, one of which is the fact interest rates are low." now that we're coming out of that... and the supply of used cars is more plentiful...nerad adds it's more important than ever to find a vehicle with solid resale value. expectations are high for the tech sector. companies are already racing to create the best in wearable tech. qualcomm and samsung have released smartwatches, and glasses are on the way from google.some tech watchers suspect new devices will pop up from apple or microsoft. also, one author predicts more websites will follow the lead of social site pinterest. "so as we kind of become so immersed in content, and information...things that help us organize that information, make sense of it, give sense and relevence to it, will definetly be on the rise." we will have more on tech stocks on trader buy lists coming up in the show.

the sec wants to pave the way for ipos. by proposing changes that will make it easier for new companies to generate funding-- 2014 could be another exciting year of market debuts. speculation is already high that pinterest, video sharing site snapchat, music streamer spotify and mobile credit card reader company square could put shares on the stock market in the new year. as the labor market continue to improve --- start-ups can take the credit for much of the growth. but with 44 percent of all new companies failing after the third year, cities want to make sure entrepreneurs succeed. jackie keenan reports from florida on the growing need for business incubators. dr. cindy sanberg's company is about to go big time. her product, nutrastem, which gives a boost to stem cells, may soon be found on grocery-store shelves everywhere. right now we are in the final review with kroger for possible placement of our product there, so we are very excited.

sanberg owes her success to the university of south florida's tampa bay technology incubator. incubators arm entrepreneurs with the resources needed for success. with a focus on life sciences, this incubator helps scientific entrepreneurs develop companies focusing on things like cancer-detection treatments and medical devices. it's not just a location, it's a process - it's the network, it's the people, it's the support. and it helps people in early stage companies stay on track. it helps the entrepreneurs have milestones and accountability. nurturing and consulting entrepreneurs are the main goals of a business incubator, but giving them access to investors is equally vital. this was the case for sanberg, but getting in touch with her inner business woman, was also critical. we're a bunch of neuroscientists that got together, what they primarily helped with us the most are marketing ideas, some of the business plans, executive summaries and organization of that to better our package.

cities like tampa, fla, that were hit hard by the recession,are embracing incubators as a way to fuel job growth. 3 have opened in this area in the last year alone. and with most incubators focusing on technology, those jobs are professional and high- paying. here at the tampa bay technology incubator, more than 40 companies have created more than 300 jobs with salaries averaging 65,000-dollars. as these statistics get known, then areas learn the value of supporting entrepreneurs. according to the national association of business incubators, the number of incubators have blossomed to more than 1,250 across the country. the association says a start-up success rate is 87 percent after going through the rigorous process. compared with 44% that don't. reporting from tampa, florida, i'm jackie keenan, first business news. while many focus on technology, incubators can specialize in everything from the arts to

manufacturing. banks could make some "interesting" moves in 2014. nerd wallet , a site that compares credit cards predicts-- more credit cards will offer perks! some credit card companies will offer free fico scores and there will be more zero percent financing and banks will increase efforts to educate consumers. thank you chuck. now, on to a preview of the hot films of 2014. joining me on set is erik childress, our movie man with his top 10 picks. good to have you on the show. > >thank you. > >i'm noticing on your list a lot of remakes and sequels. it's crazy and a little bit disheartening that you think that all the movies coming out next year it seems to be nothing but prequels and reboots. it's crazy. there are some to look forward to, others not. > >there is a dumb and dumber, and amazing spiderman. captain america is back. the fast and furious once again, the hobbit, how to train your dragon, the hunger games, transformers, and x-men. but the film you are looking most forward to is interstellar. talk about that. > >funny enough, the only non-

sequel on the list. this is going to be christopher nolan's latest film. follow up from the batman trilogy and inception. interstellar has a huge cast--- matthew mcconaughey, jessica chastain, and matt damon. > >great cast. > >a big science fiction movie. it comes out next november. i think the mystery and everyone that loves christopher nolan movies should be very excited just the fact that he's got a movie coming out. > >the hunger games. is that a no-brainer? fans are so loyal to this brand. > >they should be because they've crafted 2 really good movies out of it. the third movie like the twilight series and the harry potter series, they're splitting the final chapter into 2 movies so we're going to get one chapter in 2014 and the final one in 2015. mockingjay part 1 is going to be massive. > >you say that how to train your dragon is a film to watch as far as animation. > >very excited seeing this one. this should be the big animated film next year. the first how to train your dragon is a wonderful movie if you haven't seen it. after the really disappointing year that we've had in 2013 for animation,

the fact that this is coming out is really something to whet your appetite. i can't wait for it. > > and if you have not had enough of dumb and dumber--- wait there's more. > >people have been waiting for this one. i think it's going to be the anchorman of next year. it's going to be the comedy classic that people have been waiting for. there has been a lot of stops and starts to the sequel and they're finally going to get it next november. it's filming right now. i think that list is going to be the top 10 movies of next year. > >erik, thank you. > >thank you. still to come: the bold stock market predictions one money manager is making. plus...our dynamic duo hits the trading floor to debate whether apple or micrsoft will be the better buy in 2014. and "classified" details on where the jobs are --that's next with bill moller.

real issues they're dealing with

can be awkward and uncomfortable. but when their behavior changes, it's time to act.

because if we don't, our families and relationships will suffer. listen to the veterans in your life and show you care. it matters. when you recognize a veteran is in crisis, call the veterans crisis line at 1-800-273-8255 and press "1". america is in a career transition. middle class

manufacturing jobs keep fading and technology continues to grow. so. let's look just ahead - to 2014 and what the hiring trends will be next year. tracey wilen is an author, speaker and scholar---knows all about the impact of technology on careers and society. she joins us by skype. tracey, before we get specific, what are the general trends you see? > >bill, thanks for having me. i think some of the general trends are consumer, retail, hospitality, energy, and even manufacturing. > >so those are the growth areas. you also note that online hiring is growing. absolutely. just think about it---cyber monday is coming up. that started in 2005. who ever heard of that? we always went shopping on black friday. > >what are the jobs that companies will be most eager to fill next year? > >there's always going to be technology jobs. computer programming as well as biotechnology are high growth areas. i think people need to think about healthcare. the baby boomers longevity, diabetes, and the confusion

around healthcare will actually open up a lot of job oportunities. > >i know that energy is a growth sector. > >my experts in recruting tell me energy is very spotty around the united states. if you're in the right region where there is energy opportunities such as solar, wind, nuclear, fracking, natural gas---there are opportunities wherever those development areas are. > >if somebody's considering the job field next year. are large companies to be the big hiring sources or middle sized or small? > >that's a really good question. a research study came out from boston researchers about the opportunities are really with young firms. young firms will start out as small and the will have a rapid acceleration. if i were looking for a job or encouraging someone where to look, i'd look there. i would also look at the medium sized firms. i think you can have a lot of responsibility

and do a lot more than you can at a large firm. so i would look at those two areas. > >tracey wilen, thanks you so much. > >thank you bill. thanks bill! coming up...if you thought this market is as good as it gets...stay tuned. a very positive outlook for the year is still ahead. plus... is apple in for a rude awakening as the tablet market takes a surprising turn. we'll be right back.

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♪ ♪ elaine: it was 17 years ago when i decided to become a mentor ♪ that i was assigned to christina.

when she was in the first grade, she was a shy little girl, not able to smile much. christina: elaine showed me there were people out there to help me and guide me through life. when elaine let me read her diary, i didn't even realize how important i was to her, and now that i'm mentoring, i feel that same importance, and i can spread those same values to the girls i mentor. be someone who matters, to someone who matters. and now-- a couple of traders who don't use crystal balls.. but do use their best skills to predict the future for the financial markets. joining us from cme group alan knuckman and jared levy are here for a round of traders unplugged. great to have you on the show today. let's start with topic number one: sector swami - tech led the way in 2013, what s&p sector is your pick for the new year? alan: i'm going back to the old standby. follow the money. go back to the financials. we're not even at the halfway point of the selloff that we had from

2007-2009. a lot more upside--- those guys know how to make money. it doesn'tmatter what happens with interest rates, they're going to be in great shape. jared: i like the financials as well but i think you have to get specific. don't just buy financials all together. i think you want to watch out for some of the big mortgage lenders but companies like goldman sachs and jp morgan, i think those guys will do well. wells fargo might have a tough time. my favorite sector actually continues to be tech but more specifically cloud computing and server providers. that's where i'm putting my money in 2014. alan: that's over my head. you have to think about some of the things that are happening this year that the institutional buyers of houses are going to be making some money off of that. they're going to have collateralized rental obligations come to markets so you're gonna make extra money. angie: topic number 2--microsoft sold out of its surface tablets in 2013! one of you said microsoft was "dead money"- then the stock rallied. so what's the pick for 2014? is it apple or microsoft? alan: 25%...go ahead. jared: i gotta defend myself a

little bit. it's not about what the company does. it's about what people believe. microsoft still hasn't gotten themselves completely together. they're shifting ceo's. there's a lot going on. if i were to pick one or the other, believe it or not, from a stock perspective i would pick microsoft because they are in the midst of change. apple is still trying to figure out its next path. alan: microsoft went from 24 to 34. the target is 44. still more uspide in that stock. they make 2 billion a year from royalties. have you heard about windows? angie: topic number 3---loose change. the tsa has picked up almost a half million dollars in just loose money around airports. so what do you think about the dollar? alan: i think the dollar is gonna go back to its natural course which is lower. everybody thinks we want a strong dollar but in reality people want a weak dollar.it helps exports and manufacturing and i think the death of the euro was greatly exaggerated. the euro in europe is back my friend. jared: pro-government here. i actually agree with alan on this one. the u.s. dollar vs. the euro will probably be weaker in 2014. and i think there will be support in the euro zone and

china is continuing to print. alan: it's a race to the bottom and we're gonna assume that pull position lower as people get out of dollars because they don't need safety like they did. jared: be careful who you pair with. alan: as long as it's not bitcoin it's ok. angie: and your bonus round question for today is multiple choice. which have been used as market predictors? a)stock traders almanac, b)the january effect, or c) moon cycles? alan: all three. it's always all three. jared: all three. angie: it's all three. have a great day. thanks for coming on the show. first business continues right after this.

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in chart talk this morning, we are taking a look at the future with matt shapiro, president of mws capital. anyone that watches this show will recall that matt called 1800 on the s &p 500 in 2013. so matt, what's ahead for 2014?

> >i think we're gonna hit 2000 on the s &p 500. > >wow! i have to catch my breath. > >actually that's kind of a muted expectation. it's only about 12 or 13% and the variables i'm using to come up with that are what's economic growth, what's gonna happen with interest rates, and what's gonna happen with earnings growth in the s &p 500? so, this is what i'm thinking angie--- interest rates are gonna slowly rise. that's gonna be a little bit of a drag on the market. however, i do expect earnings to increase about 7% in the s &p 500 and we maintain this somewhat expanding multiple so that easily puts that market at 2000. > >i guess what surprises me is the fact that we've had this hot paced rally going on since 2006. all of a sudden the market bottomed out and it's been going higher ever since. at some point you have to stall out. when does a stall come?

> >that's what i'm saying about 2014. for years, viewers out there, you've seen me say the market's been undervalued and we're destined to go higher because the economy is worth a lot more. in 2014, i feel the market is fairly valued but that doesn't mean it's not gonna do well. so you have to look at all the variables and i think appreciation is still gonna be there but you're gonna have to be smart about your stock picking and stick to companies that are really gonna capitalize on continuing economic growth but not be so affected negatively by rising interest rates. > >what about the dow? care to take a stab? > >18,000. > >okay. i have to be a believer. you did such a great job in 2013. thanks as always for coming on the show matt. > >thanks angie. that's a wrap for today. as always feel free to follow us on facebook and twitter or send us an email. we look forward to hearing from you. from all of us at first business, thank you for watching!

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