Transcripts For CNBC Power Lunch 20130104

The clock is ticking and power lunch is taking the ball. Lace them up. Halftime is over. Second half of the trading day starts now. Big weekend of football ahead. Big day ahead here on power lunch. Jobs, economy, fed. Is this the year finally of Rising Interest Rates . St. Louis fed president will join us first on cnbc to give us his view. If rates do begin to rise sooner than you think, which stocks should you buy . We will show you some smart moves, some smart places to put your money to work. And it is the hottest segment of, yes, the Tobacco Industry. Could it be a gamechanger for the companies that do business in that field . We will tell what you that game changer is. My partner sue herera at new york stock exchange. Sue, happy new year. Yes, you too, ty. We are finally back together again. Im thrilled about that. The markets not so thrilled right now, though. Kind of stuck in a range of that jobs data. Lets look at numberes with the Dow Jones Industrial average trading up about 13 points on the tradesing session. S p up about 3 2 3. But nasdaq is negative right now, down just about a tenth after point. The pace of hiring, easing slightly in the laugh month. But numbers coming in pretty much in line with estimates are keling evans have been digging in details, putting descent jobs report, caps a descent year for jobs actually but the market is not responding, kelly. The devil is always in the details of these numbers. What strikes you most . Sue, hi. Yeah, i think it is important to keep in mind with that gain of 155,000 in december for the year we actually saw about that number of jobs added each month. 1. 9 million private sector payrolls and in fact we have better than 5. 3 million private sector jobs since the recession ended. One other interesting nugget i want to point out today and it didnt come from the jobs report but it is about jobs. It came from ism services report. That shows the index jumping from the level consistent of job gains better than 200,000 a month. One of the answers that we seem to have gotten today is that even though we saw perhaps a hit to sentiment on consumer and business side as we head into the fiscal cliff negotiations, people kept hiring, sue. Indeed. Ty, i think you have a question as well. I do, actually. I think ive seen the number 150,000 for the number of jobs that the economy has to add every month. Just keeping up with population and labor force growth. So does this number does this series of numbers that weve seen have any implications for fed policy that you can tell . Absolutely. This goes back it sues question too, which is why is the market responding in the way that it is, if we see strong gains. One. Things we are back into the psychology which we saw spurred by the feds yesterday. If we have a better set of jobs numbers, does that mean the fed axe sooner . Also, digging into the numbers tyler, and looking at just how healthy broadly speaking the labor market is, there are still reasons to be cautious. They include the fact that Labor Force Participation is still at historic lows. The fact that people are coming into the work force but only that job creation is love r live keeping Unemployment Rate steady and in fact if you look at the if you look further at actual Unemployment Rate it rose by almost 1 percentage point last month from 7. 75 to 7. 85. So rounding makes it look like it held study. But there was an increase so there was reason too to be worried. Indeed, kelly. Thank you very much. Something i think our Steve Liesman will address with our next guest. Traders here on the floor be talking about minutes from the feds last meeting. It shows that some policy makers want to slow or stop their asset Purchase Plan before the end of the year. Will 2013 be the year of rising rates . Our Steve Liesman is at the American Economic Associations Annual meeting in beautiful san diego, california with president James Bullard. Take it away, steve. Finally we have this at a good place. Thanks for joining me. Thank you. We finally have a nice place to have this. There is a lot of news to talk about. Let me ask you about the take on the jobs report this morning. I think it is steady as she goes. We have a reasonably good jobs number today and came in line with expectations. I think is very consistent with an economy growing at about 2 , maybe better. And hopefully we will see some improvement on these numbers in 2013. Theres two tests for fed policy. Quantitative easing test looks like it is substantial improvement in the labor market. The test for the raising the Interest Rate is 6. 5 employment rate or thereabouts. Is there, in your opinion, substantial opinion, from this report . Well, i dont think theres been enough improvement from september. So we took that decision in september. And we have only add few months here. One thing i will say, is i think that the quantitative easing we are doing now starting right about now, is more than what we are doing with operation twist. So i think it is a bit easier policy. Why is that . Because i think outright purchases are more effective than the twist program, so i think it is easier policy in that sense. We learned yesterday are two camps at federal reserve. One things qe through 2013. Another one all the way through 2013. What camp are you in . You know, why are we talking about dates in the idea is to have state contingent policy. This depends on the economy. So why are we talking about oh, we will do it until such and such date or some other date. It should be, if the economy performs well in 2013, the committee will be in a position to think about going on pause with its Balance Sheet policy. If it doesnt do very well then the Balance Sheet policy will continue into 2014. That the beauty of doing it this way instead of by fixed date and i think that thats a big advantage over this policy over the previous policy that we have. So i think that the debate i think the daet thing is out of line. It is a good thought but still people think in terms of, when is this or that plug in your forecast then tell me what you think the committees judgment will be when there is substantial improvement in labor markets. Myself, i think that unem ploim will continue to tick down through 2013. If you look at the last three years, you know, about. 7 per year on the Unemployment Rate. If we got that this wear, we would be at 7. 1 by the end of the year or Something Like that. You know, that would be probably substantial improvement and committee could think about removing accommodation on the Balance Sheet side of the policy at that point. But not everybody thinks that. A lot of people are predicting, oh, unemployment will hang up there so then we have to make a different judgment. What i like about the policy is this automatic stabilizer feature, which vice chair emphasized, which as data comes in and changes and expectations change about the outlook for the economy, expectations also change about what the feds going to do and this is a way to get a more stabilized outcome for the u. S. Economy. Let me highlight what you were saying. A 7 10 improvement would constitute substantial improvement, something that should prompt the fed to either haltity quantitative easing policy . If you have close down to 7 then you are within a half a point of your 6. 5 on Interest Rates side. And i think clearly the intention is to pull back Balance Sheet policies sometime before you start thinking about raising the rate. Let me ask you about the fiscal cliff deal that washington came up with over new years which im sure you were toling closely. Is this something that changes your outlook on the economy . No, i think it came in as expected. Many people predicted. We thought there would be a deal ultimately. There was a deal ultimately. We also said it would be a bear bones things and that is what happened. We said there is more wrangling in the future and thats also what happened. This, so far, played according to script, i think if you follow politics in the u. S. What is your expectation. How much concern do have you about a fight over the debt ceiling . I think the debt ceiling is a dangerous thing to fight over. It did not go well in 2011. I hope we get a better and smoother resolution this time than we did that time. Do you think that do you Want Congress and washington right now to be cutting spending . Is that something that concerns you right now . Well, im a Monetary Policy guy, so it is not up to me to recommend on this. But i do think that if you could set you know, get rid of the longer medium term and longer run on certainty about the u. S. Fiscal outlook, i think it is a tremendous help for the u. S. Economy. You only have so many dollars to spend. Decide how you want it raise the money. Easy for to you say, have you a lot of dollars to spend. You get to print them. Indeed we do. Thanks for joining us today. Thanks for having me. Jim bullard st. Louis fed president. Tyler, back to you. We print them, we print the money. Jonathan, good to see you. Kelly, lets get your reaction. I guess the reaction on the table, is when does the accommodative Monetary Policy begin to end . And in your note this morning, it is a lot harder to end it than it is to begin it. Right. Now first of all, on bullards comments, i dont think we heard anything new. And i would say, confusion that the fed put out there yesterday. On one hand trying to show everybody, look how accommodating we are, then they almost contradict themselves and you get the current markets and bond markets, say nothing but stocks, saying, wait a sec, are they accommodating . They Just Announced they are doing more. I this i they confused the market. Im not sure we heard anything today that unconfused the market. Yes. Sue . I would agree with what jonathan is saying. I do believe when steve pressed him a little bit with b whether or not he thought they should take back some of that accommodation, it sounded to me like he was trying to give the fed a little bit of cover because of the contusion inherent in the market yesterday after those minutes were released. I dont know if thats a correct interpretation, but i thought it was interesting the more steve pressed him, the more he said, listen, lets not talk about dates. Lets talk about when the economy improves and take back accommodation. Trying to clarify and give the fed a little bit of cover. Kelly, the fed basically started to retreat from the idea of talking about dates and actually putting pegged numbers, pegging Monetary Policy to 6. 5 Unemployment Rate. Thats consistent with what mr. Bullard was saying, right . I just like it because it is known as the evans rule. But it tries to look at unemployment level. 6. 5 inflation levels and use that to guide policy. But steve also made a good point which is, at the end of the day, what matters to markets and traders is given that, still, when are they going to start it move. So you saw the market start it price in already. The fedexitying after yesterdays minutes sooner than the otherwise had. Im not sure the reaction to the minutes is justified. If you want it to point to anything, perhaps a somewhat better jobs market data, including what we saw earlier. We will have you back in a little bit. We will know when they start to move, when they start to move. And the bottom line, it is not in the next three to six months. And we have more news on the debt ceiling. Kelly, great to see you. Jonathan, we will have you back in a few moments. Sue . Ty, remember these pictures . We do here on the east coast, of course. Devastation from Hurricane Sandy. Many people in the tristate area are still reeling from that. And the house is now just finally getting around to providing relief for victims of Hurricane Sandy. Eamon javers has the details next on power lunch. Tdd 18003452550 when im trading, im totally focused. Tdd 18003452550 tdd 18003452550 and the streetsmart edge Trading Platform from charles schwab. Tdd 18003452550 gives me tools that help me find opportunities more easily. Tdd 18003452550 i can even access it from the cloud and trade on any computer. Tdd 18003452550 and with schwab mobile, tdd 18003452550 i can focus on trading anyplace, anytime. Tdd 18003452550 until i choose to focus on something else. Tdd 18003452550 all this with no trade minimums. Tdd 18003452550 and only 8. 95 a trade. Tdd 18003452550 open an account with a 50,000 deposit, tdd 18003452550 and get 6 months commissionfree trades. Tdd 18003452550 call 18662945373. Passing the first vote for relief for victims of Hurricane Sandy. 9 billion to shore up the National Flood insurance program. Second vote on 51 billion traunch of spending is scheduled now for january 15. Eamon javers is on capitol hill to explain it all to us. Hi, eamon. Hi, tyler. This is a bit of a nasty political fight. The senate is expected to take up the 9 billion traunch you just mentioned that came over from the house earlier today. Then we go to january 15, where the house of representatives will do a bit after legislative shuffle and twostep while putting together a bill that has 17 billion base component to it. And an amendment to it that totals about 33 billion. That will come out of the Appropriations Committee. That will all be for near term and longterm sandy relief. They will send that over to the senate where its unclear what will happen. The senate could amend it. Could pass it or send it back to the house for Conference Committee vote. Entirely unclear what the politics of that will be. A lot of folks are upset with the new spending and they are pla areally upset with what they saw in the original senate bill in the last congress ending earlier this week which had spending they thought was unrelated. Take a look what the was in that bill that got everybody upset on the conservative side including 150 million in aid for ground fisherman in the northeast. I had to look up what a ground fisherman is. Thats fishing for fish that float near the bottom of the ocean. Also 2 million to repair roofs on the smithsonian buildings in d. C. 23 million for planting trees. H 41 billion for base repair, including in Guantanamo Bay cuba. That is spending people rejected to on the house side, saying those items are not included on the bill. It is not at all pork and we should pass the bill. I can see how it was hung up there in the fiscal cliff negotiationes. Those negotiations had no spending cuts and here is another 60 billion going out. It seems like here is a case where most people agree, some federal moneys ought to come to those victims. If congress cant make progress and agree quickly on Something Like this, how the hell are they ever going to agree on the big things . Especially after the tongue lashing that they got from new england governor Chris Christie who said this is why people hate congress. When he saw Speaker Boehner Adjourn Congress earlier in the woke without Hurricane Sandy aid in it, he was livid. And he took to the news cameras in order to say that and denounce john boehner. Now thats effected the political dynamic here in washington. But, look, the conservatives will say, some of the spending is unrelated to Hurricane Sandy and shouldnt be in there. The nation is running a huge deficit. We cant simply afford all of the kinds of things that we could afford in years past. And there are those who really kwib el with the idea that federal government should be supporting flood insurance. And there is justification on that. Thats politics. You bet. Eamon, thank you. Sue . Brian with the market flash. Hi, bri. Hey, sue. Going into effect or finalize ease part of had to doddfrank coming weeks. Take a look at cme today. Near the highs of the day at about 4. 5 on heavy volume and other exchanges also to the upside. Back to you, sue. Brian, thank you very much. Pork, new yo pork and more. Extras added to the fiscal cliff agreement. Was it worth it to get the bill passed . One of the topics we will discuss with ron christie and mark moriel. Are you flo . Yes. Is this the thing you gave my husband . Well, yeah, yes. The name your price tool. You tell us the price you want to pay, and we give you a range of options to choose from. Careful, though that kind of power can go to your head. That explains a lot. Yo, buddy i got this. Gimme one, gimme one, gimme one the power of the name your price tool. Only from progressive. We believe the more you know, the better you trade. So we have ongoing webinars and interactive learning, plus, inbranch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. Our teams have the information you want when you need it. Its another reason more investors are saying. [ all ] im with scottrade. At legalzoom, weve created a better place to handle your legal needs. Maybe you have questions about incorporating a business youd like to start. Or questions about protecting your family with a will or living trust. 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Ron, let me start with you. You can argue both sides, certainly, but there are those who say that adding pork to bills is the only way it get Business Done in washington these days. Is that correct . No, i dont think it is, sue. I think this unfortunately is the new normal 6 washington. But members of congress have gone out of their lanes. Gone out of what is the regular order of the house and regular order of the senate, which is to pass a budget resolution setting up the funding levels for Appropriations Committee and Appropriations Committee to actually sit down and deliberate. The senate hasnt passed a budge net three years and unfortunately, these senators and these members of congress have said well in this new normal, well break the rules and go out of regular order to stuff pork in. I think thats why people hold congress in such low regard. They cant even get their job done. Do you agree, mark . One persons pork is another persons steak, calfier or lobter. True. So for producers and hollywood and motor sport racetrack owners, this is probably steak. The fact of the matter is, that tax ear marks, which is what this is, is a long standing abuse in washington, d. C. And while congress cut out appropriations earmarks to a great extent, theyve not dealt with the idea of tax earmarks. The question is, could any of these specialty taxsions stand on an up or down vote of their own. Could the proponents of those particular tax revisions really show they are creating jobs or protect american jobs . Thats the real request. So yes, it is an abuse of process. But a long standing abuse. It is a long standing abuse. But to rons point, do you agree with him that adding pork to these different measures is the new normal in washington, which is how washington is able to execute. If you did not have that addition, the pork added to bills, nothing would get through. It is the old normal. It is like the late greatsten tore russell long said. He has it put ornaments on a Christmas Tree to get it delivered on time. And yes, maybe this is the way things are done. But now theres a great deal of transparency around it and i think the American People, behind each of these tax revisions, there is a significant loss of revenue. The question is, do the jobs and job creation offset that loss of revenues . Ron, what about that . And is transparency perhaps one of the reasons for the outrage from the American Public when they see things like grants to win farms and i think eamon mentioned ground fishermen. Is that the issue that now we know exactly where this pork is going . I think thats it, sue. And i think unfortunately, again, i disagree slightly with my friend, the mayor, here. I think this is the new normal. I think people are going back to the smokefilled rooms to to speak, and cutting deals that American People have no idea what is in the packages. You go back to the fiscal cliff package and look at the provision that primarily deals with our friends in the hedge fund industry. Right. I have a hard time believing if there was a cared interest in the sunshine for American People to see in the fiscal cliff deal, they would say, wait, we are losing how much and they are doing it for which community . I take no exception for our friends but there is such a lack and people are disgusted with congress because they have no idea what is signed until it is already in business. Are we going to see that type of pork added to that measure as well, do you think, ron . Well, it is hard to say, sue. Speaker boehner never supported an earmark in his over 20 years in the congress. The with the way the house rules are structured, he doesnt want to have ear marks with the pork writers in there. The president said he doesnt want it negotiate dealing with this upcoming measure. So it is interesting to see what our friends in the senate do. I think people in the senate were more likely than ton put it in their measures. I think there is more resist wednesday what do you think . The debt ceiling debate is a manufacturers hocuspocus crisis. It would be as though we move need the house today and said well come back and sign the loan papers six months or a year later. To the extent that voting on the debt ceiling is to pay for expenditures, already incurred, the American People are being tricked that this is some sort of real crisis. And i think we need to have a real i think the market would disagree with you. The mark set nervous about it. They are. But what it should be is when you vote for an appropriations for tax measures, vote for the borrowing to support it at the very same time, not in a separate vote. This fiscal system is busted and broken. So i want to have a discussion, if we talk about reform, about how you fix the way in which the fiscal system is managed in washington, d. C. And weve got time to do that, so we will have you back to do that very thing and ron i hope you join us as well. I look forward to seeing you in tern back in new york. Thanks, gentlemen. Ty, over to you. Sue, close of the gold market cant come soon enough for the gold bulls. It is one of the worst weeks in years for that glittery melt. Sharon will tell us why. And if the fed is serious about ending qe, Interest Rates is sure to rise. Well bring back jonathan and get his take on the best way to invest in this environment. Mine was earned off vietnam in 1968. Over the South Pacific in 1943. I got mine in iraq, 2003. Usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection, and because usaas commitment to serve the military, veterans and their families is without equal. Begin your legacy, get an Auto Insurance quote. Usaa. We know what it means to serve. And his new boss told him two things cook what you love, and save your money. Joe doesnt know it yet, but hell work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. Hell start investing early, hell find some good people to help guide him, and hell set money aside from his first day of work to his last, which isnt rocket science. Its just common sense. From td ameritrade. Finally, a friday couldnt come soon enough. Gold on track for the worst streak of weekly losses in about eight years. We are are at the close right now. Sharon epperson is tracking the action. Sharon . We are closing down about 25 pucks here sue right below the 1650 an ounce level and with no inflation in sight, a lot of traders are reallocating assets from gold to other commodities. And other assets. We are looking at gold prices severely under pressure earlier. The fmoc minutes yesterday definitely helped to send prices even further down. But this is a sell off happening for the past six weeks. In fact this sixweek streak of losses is the worst week weve seen since may 2004. The key levels to watch here will be whether or not gold is able to recover toward that 200 day moving average, 1685 is that level. If it is unable to do so, traders say we will see more funds selling. 1600 is a key level here in this options ring. A lot of options at that strike price. A lot of open interest there. So that a key level to watch as well. And keep your eye next week on the rebalancing in those major commodity ind seees. That could impact gold and silver as well. Some say that could be positive for precious metals. Back to you. Sharon, thanks. Have a great weekend. You do too. Bob pisani joins me on the floor. Sharon, just talking about that yeah, the atf. Been going on for the last several weeks. Shes right. Dow this week, take a look. Little action on monday and a lot of action on wednesday. And pretty much side ways. See that in thats a cliff there if you ever saw one. Thats the stock cliff we are facing. Note today while we are on the upside, techs are notably weak. Apple hasnt been doing anything the last couple of days. Nor are we getting traction from other big names. Finally, i got emails, calls, questions, oh, my heavens, the vix is collapsing. We are near multiyear lows. The world is starting or ending or something. What does it mean . Vix implied volatility 30 days out. With the fiscal cliff resolved to a certain extent, volatility should drop. What about the next fiscal cliff and sequestering and other things like that . Thats not until the end of february. They are just looking out until the first week of february. Thats why the vix is down. Here is what you want it look at. That the vix curve, futurees. Futures in march is almost 18. Thats steepening of the vix curve. Steeper than we have seen in prior months. So the answer is the street is trying to price it a little potentially higher volatility. I can guarantee you, the spot vix we look at everyday will be higher one month from now. I with a the was going to say, dont worry, volatility will be back. You have to understand how the vix works here. It is not looking infinitely into the future, just 30 days. Thank you. Have a great weekend. To the nasdaq now. And seema mody is following the big movers there for pups hi, seema. Hi, sue. Underperforming the indecex. Brian topeka saying there is a lot of anticipation behind what samsung might unveil next week. Thats perhaps weighing on shares of apple in todays trade. Hoou are looking for bright spots, take a look at social media. Facebook continuing its rise. Goldman sackes with a bullish note saying it sees facebook as promising. One of its friends in the social media space, zinga, also mooufing higher. After confirming earlier this week it is shutting down operations of 11 games. Freeing up administration on zinga cloud. Where it could launch new games in 2013. Lastly, a lot of Movement Ahead of the j. P. Morgan health coence next week. Which is referred to as the super bowl of healthcare. One of the mover and shakers is expected to be celgene. We are seeing stocks higher than next week. Thank you seema, very much. To the bond market. Find out what traders make of the latest jobs report. Not to mention the bullard comment at the top of power lunch. Rick santelli at nyse. Hi, rick. We were close to 197 1 2. We closed last week at 170. Its been 22 basis point week and for a while over a quarter point. Thats pretty large. If you open the chart up, 194 is about the cusp. Whether when we close today we are at highest yield since later may or late april. You can see that chart. Now sometimes when the treasury market sells off aggressively, it even catches markets off guard. Not only investors. Think about high yield investment grade. If you look at the inest vmt grade index, you can see the knee jerk reaction is a narrowing of the spreads because corporates didnt sell off as aggressively or look at high yield, same dynamic. You have to monitor over the next days weeks to see if catch up does incan occur. The fed president James Bullard talking about when the feds will raise Interest Rates. Here is what he said earlier to Steve Liesman on power lunch. If you are close to 7 , then you are within a half point of your 6. 5 on Interest Rate side. And i think clearly the intention is to pull back Balance Sheet policy sometimes before you would start thinking about raising the rate. All right. So how does this impact the Investment Outlook for 2013 . Back with us, chief u. S. Equity strategist at ubs. Rick santelli just pointed o ut that just in the past week, the tenyear yield has gone up about a quarter point. That a pretty steep rise. I suppose fiscal cliff were related. Do you think 2013 is the year Interest Rate move higher . I dont think you will see a dramatic move higher. The only way you will get a dramatic move in Interest Rates is if the economy accelerates. I think that is difficult with the debt ceiling debate, which will be very uncomfortable in about four or five weeks. So no, i dont think we will see this things run away from us. Also, higher taxes imbedded in the fiscal cliff resolution and probably the prospect of more either tax increases or spending cuts as head winds for the economy. What kind of growth are you looking for . Were looking as a shop for 2. 3 growth but base lick icall anemic growth environment. When we look at the jobs report and isms, what we care about, is once people see less money in their paycheck, then what do we do . When we see them pull back, you will see the Economic Data pull over. That is a more important thing. I want to read from your report this morning and you say here, we believe that the trends we think will happen will be will produce mid single digit earnings growth. Downward pressure on stock multiples and equity market returns. You could say good luck in the new year. Cheery stuff. Which sectors. There have got to be some that will outperform that baseline outlook. Right. I think there is a few areas, first. And edward from fidelity was on earlier talking about healthcare. When we have obama care go into play was usage of the Healthcare System will go up. Doctor visits, hospital visits, use of drugs, we think there is going to be a lot of winters in the healthcare area. There is healthcare, then the healthcare. The hospitals, Drug Companies, insurers. I think it wince on volume. And what i would say wbt value, of companies that do research to help us live longer. People that make heart valves and Drug Companies like pharmaceuticals. Those guys are not going to necessarily see their volumes increase as much as maybe the generic guys so they probably would not appreciate as much. Two other consumers you like. Why and where specifically . So, whats really interesting, even if your taxes go up, have you a choice of whether to cut spending or not. You could let your savings go down. If you look at higher end earners, they tend to be the ones with the most cushion or most savings. So i think you will see less of an impact on the consumer as you may on general Business Activity and lets say the industrials group. So we like the Consumer Discretionary space. You see auto sales up. Housing activity up. Consumer spending is strong but not overly strong. So i think pretty broadly the consumer will surprise. The other thing, low Interest Rates so dissave i think for the short run, and i talked to mrs. Gall about this, we hold off on the cut back for a little while and smooth it out over time. It is not a cliff in terms of spending. Jonathan, good luck in the year ahead. You as well. Happy new year to you. Sue, back to you. Thanks, guyes. We are recapping headlines. Downgrading lululemon to neutral in anticipation of slower sales growth. Upgrading rivals to outperform noting improved merchandising as both firms. Eli lilly says it expects 2013 earnings to increase from 3. 09 to 3. 40, due to cost controls primarily. General motors recalling 65,000 full size truck and vans that can roll away after theyve been parked due it a potential steering column defect. You dont want your car it roll away. No, that would be bad. Bad, bad day. One of the Fastest Growing segment in the Tobacco Industry and could be a boone for smokers. Jane wells, what is it . Tyler, its this. It looks like a cigarette and increasingly smokes like one. How the components in this are going into this and why big tobacco is happy about it when we come back. She keeps you guessing. 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Born to make mistakes Liberty Mutual insurance. Responsibility. Whats your policy . Welcome back to power lunch. Brian at the market desk. Finishing down steady line. Foot line retailer getting crushed, at about 8 plus right now. Missing out on a bunch of metrics, including guidance. Margin expression. Comps missed as well. Two down grades today. One from bank of america, merrill lynch, to underperform sue. So this stock getting thumped today. Back to you. Thank you, brian, very much. As you probably know by now. That fiscal cliff deal, well it is laidened with billions of dollars worth of pork. Today we asked you on the yahoo finance. Com question, is pork the only way to pass important lemgs lags these dayes. 25 say sadly it is the only way to get things done in washington. 3 say acceptable in extreme measures but 72 of you say that pork should be banned. Lets see what is coming up on street signs. They always deliver the bacon. Mandy . Hi, sue. Congress approved the initial 9. 7 billion to go towards sandy insurance claims this morning. We had congressman greg meeks in support of that. We have another guest who said congress voted no. It is going to be an amazing debate. The euro turns 14 today. Happy birthday, euro. Has it been a success . What would it cost you, and im not just talking about the initial outlay, but upkeep, garden webs staff, dresses, everything that goes with it, well talk about that with robert frank as well. Back to you on power lunch. Cant wait for that one, mandy. Thank you very much. This is a booming section of the Tobacco Industry. None other than the electronic cigarettes. It is making cigarettes more life like and big tobacco is taking notice in a big way. Jane wells is in los angeles with more. Hi, jane. Hi, sue. For those of you trying to quit smoking this year, big tobaccos not worried. It is investing in a solution to your resolution, competing with a Diverse Group of tech startups. Whos got my god [ bleep ] cigarette. James cameron took heat for having his character played by Sigourney Weaver in avatar smoke. John cameron bag ceo of safecig, to build a product becoming ever closer to recreating the experience of smoking without the carcniogen. They still inhale nicotine like an asthma inhaler. Not everyone is convinced they are safe. Right now the ecg category is around 400 or 500 million. It will likely double next year. Pioneered by smaller players by a company in china but last year, laura lard spent millions to buy bluk and rj reynolds tells cnbc we have big plans. Our consumption of ecigs could surface traditional cigarettes in the next decade. We have the technology that has the potential to save 6 million lives a year. Now we got this at receive at 7eleven this morn pg. Minnesota has been the first to tax them. Wow. The price point again, it is 9 for one cigarette . But it replaces right. But this will be like kbo two packs worth, they say. Then, you know, it kind of equals out. So the price of not going to be an issue. All right. And youre not going to have to you are not going to have to pay the big tobacco taxes is it taxed . Minnesota is the only one specifically taxing it because it has nicotine in it. Other places will just give it a regular sales tax so far. Very interesting, jany. Thank you, as always. Ty, back to you. Sue, is jack lou the right person to replace tim geithner as treasury secretary . And how will apple react it samsung widening its lead over that company in the battle for the smart phone supremecy. More ahead on our power rundown. Ive always had to keep my eye on her. But, i didnt always watch out for myself. With so much noise about health care. I tuned it all out. With unitedhealthcare, i get information that matters. My individual health profile. Not random statistics. They even reward me for addressing my health risks. So im doing fine. But shes still going to give me a heart attack. Were more than 78,000 people looking out for more than 70 million americans. Thats health in numbers. Unitedhealthcare. Tdd 18003452550 when im trading, im totally focused. Tdd 18003452550 tdd 18003452550 and the streetsmart edge Trading Platform from charles schwab. Tdd 18003452550 gives me tools that help me find opportunities more easily. Tdd 18003452550 i can even access it from the cloud and trade on any computer. Tdd 18003452550 and with schwab mobile, tdd 18003452550 i can focus on trading anyplace, anytime. Tdd 18003452550 until i choose to focus on something else. Tdd 18003452550 all this with no trade minimums. Tdd 18003452550 and only 8. 95 a trade. Tdd 18003452550 open an account with a 50,000 deposit, tdd 18003452550 and get 6 months commissionfree trades. Tdd 18003452550 call 18662945373. Eling with come back to power lunch. Brian shackman here at the market desk. If there is ever a need for a pop in the market, look at svu. A sharp 8. 5 . Headlines crossing via doun jones that cerberus would take a stake in the rest and you see that shooting up 8. 5 . Ty, back to you. Thank you, brian. Power rundown now with bob pisani and kay la toushy. Rumor has it as adele sings as jack lou is potential nominee it take the place of tim geithner for treasury. He has no experience apparently in the Financial Sector so why would he be a sensible choice, bob pisani . Im not sure. Can i make a shameless pitch for a fellow that i think would be better close, and that is roger altman. He was under the clintons. Remember he was, now with evercore but was with black stone at yale school of management for many years. There is an imminently qualified choice from the private sector, may i say. And kay la, what say you on jack lou . Dollar bills coming out of bob pisanis pockets for roger altman, im sure. But he was at citigroup, oversaw a unit shorting the Housing Market so he does know a little bit about the economy. People through larry thinks name in the ring too. I think a lot of these guys want it be asked and then turn it down. They dont want the salary or painful confirmation process but they want the honor and prestige. I would love to see irskin bowles get it. He said would he wouldnt take it. Could 2013 be the year that samsung widens the lead over apple . Market researchers Strategy Analytics think so. Apple could potentially roll out a smaller cheaper iphone to compete at the lower end of the business. The iphone mini. Kayla, does apple really care if they are not the biggest seller of smart foens . I dont know, really, tyler. I think that they havent been the biggest seller of smart phones. Android has long been the dominant operating system here. I dont know apples move is to create a smaller version of whatever it was making before. I know thats worked in the past but is that always going to work . Samsung has add great ad campaign. Ill say that. That definitely has gotten a lot of people talking about the perks of being a samsung user. Im not sure they listen, i dont know if they want to be the biggest. But they care about bleeding away certain advantages they have. There is a reason they introduce the ipad mini. And i think it was to compete directly against amazon and some of the other tablets out there. And so the logic they have already used would make some sense for a sort of mini iphone in a way. Bit way, lead here, samsung 27 . Apple 19 . Lg is 17 . Lets move on to something we all move and love. Tory birch joining oprah on the list of billionaires. Tory one of the youngest self made billion airs in america. Second to only the inventor of spanx. How about that . Kayla . Even though bob is the expert on tory burch. Thank you. I will make some comments. Never underestimate what women will buy. Tight cut off panty hose or 200 ballet flats, tory did make a move. No better way to take vengeance on your husband than become a self made billionaire. I didnt know you were such a tory burch fan. I called my wife and said, do you own any tory burch . She said no. 200 ballet slippers, i draw the line. Two stories that might catch your fancy. Thats coming up in the next hour. [ male announcer ] where do you turn for legal matters . Maybe you want to incorporate a business. Or protect your family with a will or living trust. And youd like the help of an attorney. At legalzoom a legal plan attorney is available in most states with every personalized document to answer questions. Get started at legalzoom. Com today. And now youre protected. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. 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