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tv   First Business  KICU  May 13, 2014 4:00am-4:31am PDT

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oil prices could fall even as tensions in ukraine rise.. in today's cover story... gm's battle for its reputation stretches far beyond drivers. plus... what's behind the ceo shuffle happening in corporate america and... money missteps by the million dollar men of the nfl. first business starts now! good morning! i'm ange it's tuesday, may 13th. in today's first look: record runs for s&p and dow the dow up 112 points, the nasdaq had its best day in weeks adding on 72 points, and the s&p 18 gold rallied 9 dollars oil is back above $100 per barrel. marketwatch reports.. at&t is not fooling around. its close to a takeover
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deal with directv. it could happen in the next 2 weeks. and 40 top sony executives reportedly will return annual bonuses as the electronics company struggles with loss. well on this tuesday trading day, trader bill baruch of ii trader joins us now to take a closer look at the markets. good morning, bill. > > hi how are you today? > > i'm doing very well. we seem to have a nice dot-com rally happening. what do you see among those tech stocks in the broader market? > > well a lot of momentum from last week. the market held some key levels, we started moving forward and everybody was thinking: sell in may and go away is second guessing themselves with some headlines that came out over the weekend with china welcoming investments-- foreign
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investments, and lifting some of those limits up-- really starting the week off great. > > what will you be watching for the rest of the week? we have retail sales today. > > yeah retail sales today, ppi and cpi later in the week. we're already seeing with inflation there expected to end up 0.2% and really with that though they're starting to see yields ahead of these numbers. yields are grinding higher slightly as stocks are moving higher. that's something very very important to watch as yields continued to move the slow and steady pace off of the lows, then stocks continue to move too, but if yields start to fail here we may get a little weary with the stocks of these high levels and they could track the yields back down. > > on the other hand, the volatility index-- the vix closed down yesterday around 12. what is weighing down the vix and does that mean the stock market is about to go higher? > > right now it is-- you see the equity market closing highs yesterday and really what you are to look at with the vix is not only are we not selling off
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in the stocks, but the pullbacks are not as violent and they've held-- they stopped on a dime. so volatility is really has not been too much of a worry, and some of the major levels in the s&p that i've been watching 1840-1830-- we haven't violated those in weeks so there isn't a fear factor in the market right now. > > bill, thanks for coming on the show. have a good day. > > thank you. thanks for having me. a gas problem coming from russia is captivating oil traders. for the first time 3 days-- the price of brent oil edged higher. it's climbing as russia indicates it "respects" the results of the weekend vote in eastern ukraine allowing for independence. and-- gazprom-- russia's largest oil producer is threatening to stop gas shipments june 3rd, to ukraine unless the country pre-pays for gas. "you know, there are very strong signals that if russia turns off the spigot then they are going to be hit with a release of a lot of oil on the global market. you have the saudis saying that they'll release oil from the reserve, i'm sure that the us would
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consider releasing oil from their reserves and i'm sure the international energy agency would release oil as well." that was oil trader phil flynn who is also a fox business news analyst. last month gazprom raised the price it charges ukraine for gas by 81%. nearly 15% of gas coming from gazprom in russia-- flows through ukraine to the rest gazprom is also close to signing a deal to provide natural gas to china. chuck coppola joins us now with a bright spot in the energy market... chuck coppola joins us now with a bright spot in the stock market. angie ... solar stocks are surging! investors sent shares of solar companies soaring monday. it's just days after president obama unveiled a renewable energy committment for government buildings. over the weekend -- solar panels were installed on the rooftop of the white house. solar city jumped 4 percent.. sunpower 3 percent. energy efficiency continues to divide capitol hill. a bill to advance green energy policies in homes and
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businesses was shot down yesterday by senate republicans. chrysler hit a bump in the road. chrysler booked a $690 million dollar loss in the first quarter. the loss is connected to italian car company fiat buying the american automaker. chrysler had $1.2 billion dollars in charges winding down debt and financing payments to a health care trust for retired autoworkers. the new company is fiat chrysler automobiles. minus the costs.... chrysler earned $486 million on strong sales of pickup trucks and jeeps. the company is backing its forecast for the year in today's cover story--if general motors' suppliers are unhappy--could that spell more trouble than g-m has already? a survey of suppliers to the top six automakers say general motors is their "least preferred" customer. but the reasons that drew the most criticism are not couched in such mild terms. companies that make parts for general motors vehicles give gm low marks for "trustworthiness," "communication skills" and "protection of intellectual property." "gm's coming out of bankruptcy. it's trying to keep costs down and that gets passed along the supply chain."
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the annual survey by automotive consultant, planning perspectives rated toyota first followed by honda and nissan. the top detroit automaker rated by suppliers was ford, chrysler which had been on the bottom since 2008 and is now a unit of fiat-chrysler automobiles, moved up--ahead of gm. "gm has trouble communicating it would seem." the suppliers rating comes as a new lawsuit in the g-m ignition recall alleges that gm secretly changed an ignition part. and hid the evidence until after a settlement had been reached with the parents who's daughter died in 2005 chevy cobalt crash. "they're in a tough spot. delphi is bearing the brunt of the recall." auto analysts say there's another reason to keep suppliers happy---advances often come from the bottom up-- suppliers--not the top down.
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"having your supplier who knows your part better than you do can reap all sorts of benefits in your supply chain." telsa will no longer supply battery packs to toyota for its electric rav4 an sec filing shoes the deal was worth $15 million to telsa and will end this model year. tesla has its own crossover in developement called the model x, which is being delayed for release. apple tries to get an edge in e-commerce by making it easier to shop on its website. apple is hoping to lure customers away from other retailers such as amazon and best buy.. by getting refunds to customers faster when they make returns... best buy. apple's efforts don't
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come cheap -- the shorter wait time for refunds means a big upfront cost for the tech giant. but, retail-intelligance firm stella service says apple customers may now get refunds in less than a week. thats down from 10-days. mrs butterworth and jimmy dean could soon meetup. hillshire brands -- which owns jimmy dean and other meat brands has agreed to pay $4.3 billion for pinnacle foods, the maker mrs. butterworth, birds eye and other frozen foods. analysts say the deal will give hillshire a larger presence in food aisles of grocery stores. "what that's going to do is it'll give them a little bit more clout with the food retailer, and will particularly give them clout in the center of the store which is a key battle ground area for retailers." hillshire sold off sold 3%., even though the ceo says the deal will immediately add to earnings. pinnacle stock rallied 13%. a top critic of obamacare leaves his job and will now help -- push obamacare. house speaker john boehner's spokesperson, brendan buck, is leaving the speaker's office to become vice president of
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america's health insurance plans. the insurance trade group has supported obamacare. speaker boehner praised his outgoing staffer, saying buck was critical in - quote - "holding the white house accountable." a new drug that lowers the risk of heart attacks gets the approval of the fda. the drug-- zontivity--- reduced the rate of death from cardiovascular trauma by 17% in a 3 year study. the fda called it an important advance for patients who have survived heart attacks and are taking asprin or other treatments to lower the risk of another heart attack. merck shares have rallied this year into the fda decision... the fcc thinks twice about net neutrality.new language out of the chairman's office comes after a considerable outcry over a proposal put forth last month. the original language proposed changes that would essentially allow the internet to be divided into a fast lane for content companies willing to pay for it and a slow lane for the rest. the new draft includes language about the f-c-c scrutinizing deals to insure
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that non-paying companies will not be at a disadvantage. a quick check of the latest round of earnings points to postive signs for the economy. around 453 companies in the s&p have reported results. according to bloomberg news. 76% turned in profits that topped analyst estimates. based on corporate projections-- profits are expected to rise 7.2% this year. walmart's banks are under fire for fee collection. according to the wall street journal ,banks under walmart's umbrella of services are some of the biggest collectors of fees in the country. out of 67-hundred banks in the u.s....the journal found 15 banks make more money from fees than loans. five of the 15-banks are associated with walmart. a spokesperson for walmart says it has a "very thorough process" for vetting banks to which it leases store space and has no role in the bank's operations. london is home to more billionaires than any other city in the world. according to the sunday times 'rich list'
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there are now 72 londoners worth at least that much. furthermore, the number of billionaires in the uk capital has more than tripled in the past decade. new york is the top u.s. city on the list with 43 billionaires. 3-years and fifteen million dollars later....an historic landmark reopens. the washington monument is now accepting visitors again. it was forced it to close for repairs in 20-11 after an earthquake caused cracks in the structure. congress spent seven and a half million dollars on the project -- which was matched by a philanthropist. still to come: is big blue getting ready for a big bounce? plus.... top tier turnaround. why ceos are leaving corporate america in droves. and... behind the pitfalls of nfl paychecks... that's next after this in the know message!
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talking to veterans about the 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
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and press "1".
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as rookie's sign on to become multi- million dollar players in the nfl... a startling stat by sports illustrated shows 78% of former nfl players wind up bankrupt or close to broke. ed gjertsen vice president of mack investment securities joins us by skype this morning and you have actually been through this with players before. you've talked to some of these rookies. what was your experience? > > it's a different world working with the nfl players association and going to a couple of these rookies symposiums, there's a tremendous amount of pressure on these rookies and a lot of people don't understand. a lot of their friends and family and not only that, then they have to realize they have to pay for things like taxes. > > that is the key. people can go and buy a big home but you have to realize that you have to pay taxes forever until you leave that home... so the biggest player came out with
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about a $22 million contract this year. what would you advise? > > for somebody like that of course you're going to attract a lot of friends. friends you didn't know you even had because all a sudden they see atm on your forehead and what's important is the word no. so if you have to find a financial advisor, a certified financial planner like ourselves-- use us as the bad guy. we have no problem telling others no and vetting what ever deal or remarkable investment opportunity that may come the players way. > > isn't there pay strategy odd as well? it is not normal-- they do not get a paycheck every two weeks correct? > > yeah that's what people also don't understand: they get 17 paychecks and so for the remaining 37 weeks it's a function of how do you stretch that paycheck? and again like i said, there is not only federal taxes but the state taxes there's union dues-- you have to pay all these kind of people to support you in your professional athletic career and that's not a cheap endeavor. > > this can happen to anybody.
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anybody out there can get a bump up in pay suddenly or a big-time raise. so how do they avoid the money trap? is it best to just live live at your current level? > > that's a great question because whether it's a big bonus or something like that what we often guide clients on is to use some of that money for fun money as in ok now i want to go do something mad and go on a vacation or things like that, but try to put the bulk of that away because that's going to help towards your savings goals instead of burning through it hoping for the next big bonus down the road. > > always good to have you on the show. thank you, ed. > > thanks, angie. coming up.... the tech stock that one money manager says is "back from the dead..." and after the break... why corporate america is having a hard time committing to its ceos-. that's next with bill moller.
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this is a curious stat i bet you haven't heard. as the
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bottom line of corporate america improves, and stock valuations soar, the number of ceos who have left or forced out is up 14 percent from last year. what gives? let's talk with kevin paul scott - author of 8 essential exchanges and co- founder of the leadership organization, the addo institute. so kevin we've heard about the news regarding target's chief gregg steinhafel: he got the boot, but there have been plenty of others-- high-profile and other wise. > > yeah it's happening across a lot of sectors. the fire fox ceo... so it's happening in technology, health care, and the auto industry-- across all industries there seems to be a trend of ceos being forced out in favor of something newer and fresher and different. > > here's the question if companies are returning record earnings right now why are the heads of these companies leaving? > > what's happening is times are changing and it's not just about the product or the service you're delivering, it's
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are you delivering on your promise to make a difference in that community? and so the idea of social corporate responsibility is alive and well today and a lot of stockholders and consumers are trying to find what are these corporations doing to make a difference and that's affecting who's at the helm and the leaders of those organizations. > > that's interesting because i would've thought that stockholders would care about nothing more than the returns that they're making. is there a critical mass of stockholders who are actively involved in watching what these companies are doing? > > i think so. there is studies that are showing that there is a focus from consumers on what is important-- when you identify yourself with the brand, what is it that makes that brand valuable and that is trickling down from consumers to stockholders and saying, this is important. if this is important to our consumers, this has to be important to us and our ceos have to lead on that topics of what are we doing to make good in the world? doing good really is good business. > > it's more than just paying
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lip service or having a mission statement on the wall that's gathering dust these companies actually have to be doing what they're saying they're doing in terms of good social responsibility. > > you're exactly right whether it's in their communities where they're serving or things they are doing around the world that type of issue is important-- the research is showing it, and the dollars are flowing to where people are doing something to make a difference in the world. > > it's more than just companies who are working in areas that are raping the environment or being abusive to employees. it's more than just that? > > you're right-- its every single area. as someone looks at what brand they want to be identified with, they want to feel like they're connected to a corporation that is also a cause that is doing something to make a difference. a lot of people are shopping for corporations the same way they were shopping for causes and charities to be involved with 10 to 15 years ago. > > kevin can you name some companies in your view that are doing it right? > > well the corporations that are doing it best are the ones like starbucks who are investing in things that people care about. gap has always done a great job with the red campaign and how they're confronting hiv and aids and a lot of companies have the cancer awareness-- the nfl does a big thing in october for breast cancer awareness so a lot of different brands are really taking this on and so other ones are starting to follow suit. > > kevin paul scott, thanks so much. > > thank you. thanks bill... the ceo of ibm will reveal is hopes, dreams and sales numbers to shareholders wednesday. why one money manager is already calling the stock a buy. chart talk is next.
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matt shapiro president of mws capital joins us now to talk about ibm. good morning to you, matt. > > good morning, angie. > > big blue has an analysts meeting coming up tomorrow. the stock has been rallying as of late. what do you make of this move? > > well you know a lot of people gave up on ibm for dead you know kind of big blue dinosaur, but here it is sneaking back and of course leading the rally in the dow
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jones we had yesterday. a lot of investors are hoping tomorrow with the investor day that somehow they're going to come back with some analyst's guidance to really give them some clarity about the top line. the main and the problem with ibm has been they just haven't been able to crack a hundred billion in revenue and grow that top line and that's going to be the big key tomorrow an the analyst meeting. > > and taking a look at the chart, the stock had tough time cracking back above $200. > > yeah you know it's really been the forgotten and the been down tech stock. it's only about a $200 billion market cap and it's kind of been forgotten. google seems to have much more the initiative, but i think ibm's really going to be sneaking up on people-- it's the one big technology company i still own. it pays a big dividend, it has big stock buyback and 10 billion in free cash flow, so i think there's a lot of value there and people are forgetting ibm's p-e is about just 10. so all-american icon, very cheap and management determined to turn it around. i think something's going to go well for ibm so let's look to see what happens tomorrow in
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the analysts' meeting and see if some upgrades follow. > > how high do you think this stock could go? just take a wild stab. > > once they get that topline going, and that's not guaranteed-- easily 230. > > good to have you on the show today. thank you. > > thanks, angie. that does it for now... coming up this week.. why american workers are foregoing their lunch break. find out why -- from all of us at first business... have a terrific tuesday.
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