Shares, what you may own in your mutual fund. And making a difference in 2013, from apple to del investor carl icahn making an investment that paid off. And stories of people having a powerful impact in the Business World this year. We have all that and more on nightly Business Report. Good evening everybody, and welcome. It is hard to say who is halving a better year, peyton manning, or the dow jones industrials. The quarterback set the record of the season, today, the dow set its 48th record closing high of the year with five trading sessions left, manning only has one to go, and the s p 500, the dow transports and the russell 2,000 also closed at alltime highs, for its part, nasdaq finished at its highest level since 2000. A lift in november of Consumer Confidence in december and a rosy outlook on the u. S. Economy next year on the International Monetary fund. Today, the blue chip stocks jumped, the nasdaq up 44, a more than 1 spike and the s p 500 added nine. Our guests say there are risks for investors in the new year in 2014, but he is still bullish for the coming year. Russ, nice to have you back on the program. I dont know about you, but someone says i have good news and bad news. I want to hear the bad news first. So lets start with the risk, what is the biggest risk and should investors get ready for a correction . Well, i think there are a couple of risks for next year, first let me say stocks can and will go higher in 2014. But there are a couple of things to watch, the first of which are Interest Rates. The lastni few months, the mark has reacted very well to the tapering, the fact that weve we gun the tapering. That is like ly to continue. That is the first thing to watch. The second is the strength of the recovery, we expect that the u. S. Will grow faster in 2014. But there is one soft spot which i would watch, which are earnings. Pardon me, actually earnings for individual wages rather than companies, the job market is getting better, were seeing improvement in the market, one thing that worries me for 2014, can consumers continue to spend if their pay packets are not growing that fast. Very quickly, why are we not seeing wage growth in this country, russ, it has been a long, long time . It is a great question but difficult to answer, the first reason, the obvious one is were coming out of this recession very slowly. Job growth is accelerating but still not going bangbusters, so that is suppressing wages for a lot of employed people. But have of the factors, whether they are technology or the global wage arbitrage, which are both keeping wages down a bit, these both predate the recession. So even as the economy gets better it is reasonable to assume that the wage growth may not accelerate as fast as it had for most of the postworld war ii period. Russ, you said stick with stocks for now, what does it mean for investors . It means we still think that equity is better than cash or bonds. Were keeping the overweight recommendation, the caveat is this, if we see 2014 driven by a stronger economy and earnings, that is a good thing. Where we get nervous is if were having this conversation for now, the dow is up 15 or 20 , the gains come from multiple expansion, the investors are willing to pay more for dollar earnings. If the gains are driven by Earnings Growth they are going to be sustained by earnings. And is it expected that the stocks catch up in the u. S. . To be honest, there are International Markets that did quite well this year. Japan is one of them. If you own japanese equity and you hedge out the exposure, youre up about 50 , we believe that japan can go further in 2014. Europe is looking a bit better, we believe that the investors, many in the United States who have done well with the trade should think about trimming back in the u. S. And increasing the allocation to international funds. All right, thank you so much, russ, chief investment strategist at black rock. And a top official at the Federal Reserve is calling for an increase in the banks increase lending rate but not right away. The Federal Reserve bank of richmond says the bank was right in deciding to taper back on its bondbuying stimulus. He also believes the records low fund rate should start to rise in little more than a year. In my submission, i put early 2015 to when i think the funds are ready to lift off. But that is something that could change a lot one way or the other. Lacker also said he was surprised the market rallied last week after the fed made its taper announcement. Another delay at the healthcare. Gov marketplace, expecting a big rush of lastminute filers, the Obama Administration has extended todays deadline to sign up for a new Health Insurance plan for one more days delay, they are to make sure theyre covered by january one. And plans to delay a scheduled increase in fees on government backed Mortgage Loans from fannie mae and freddie mac. The original idea behind the higher fees was to reduce the number of loans guaranteed by the taxpayerowned mortgage giants. The nasdaq got a big boost today thanks to apple, stocks soaring to nearly 4 after they sealed a deal with one of the Worlds Largest carriers, opening the door for millions more sales. Josh lipton has more. Reporter apple ceo kim cook says he couldnt think of a better way to welcome in the Chinese New Year than getting an iphone into the hands of every china mobile customer who wants one, apple will offer the iphone on chinas mobile network on january 17th as the company tries to boost its share in the worlds biggest country, right now apple is losing out to samsung in the third quarter, apple controlled 6 according to research analysis. But now it could all change thanks to the new partnership. China mobile offers new items for the company. They are more than double the population of the United States, no specific details yet about what the iphone will cost with a china mobile contract but if apple prices phones in the midrange, say 300, then it could take customers from competitors, much of it depending if apple wishes to sacrifice market for market share. The ceo doesnt believe it would be apples strategy. Theyre not involved in the race to the bottom that they want to sell premium product at good prices, maintain their margins. Still, even without the price point, analysts are already busy estimating what the deal mean fs for apple sales, the team expects it to translate into sales of 17 million iphones in the next 12 months which could add 10 billion to their revenue line, that would be a big boost for revenue. Josh lipton, nightly Business Report, silicon valley. And still ahead, are shoppers turning their backs on target after the massive debit card Security Breach. Good news for drivers after four weeks of steadily climbing higher, prices at the pump fell two cents a gallon in the last two weeks, the average is 3. 26 nationwide. And something to tweet about, jack dorsey, ceo of twitter, just joining the board of directors at disney. Dorsey, who sent out the first tweet ever, has sent out another one, saying i only wish we didnt lose sight of one thing all started by the mouse. The disney board member of the past 15 years, and term limits he can no longer run for a seat. Shares of target sold about 1 today. Still reeling from the massive Security Breach to as many as 40 million debit and Security Customers and a decline in sales over the biggest shopping weekend of the year. Reporter the big question this Holiday Season is just how much target will suffer for its Security Breach of millions of shoppers, starting with the big thanksgiving weekend. With reports that targets shoppers and debit card holders flooding the market, going for up to 100 a card, according to the security blog. The shoppers we caught up with are cautious and wear ary of us credit cards, and many are still spending. I use cash but i heard about what happened so i just kind of stay away from the credit card stuff. Im good with it. It wont stop me from going there. Reporter there are no official Sales Numbers in yet, but the Retail Growth Partners say targets transactions this past weekend were down 3 to 4 from the same weekend last year. And targets Brand Perception has dropped more dramatically than other companies that have struggled with data breaches. According to ugov brand index buzz score, they are trying to lure target customers back in. Typically when we see events like this happen, the retailers need to go out and rerecruit their customer, rerecruit them whether it is with special deals or incentives, whether it is bringing them back in the store to regain trust. Reporter meanwhile, theyre working to avoid Security Breach by setting spending limits for card holders. Customers can now withdraw 250 in cash and spend up to a thousand dollars, well see if theyre too scared to spend any of that money at target. Another activist investor is putting pressure on garden to break up its restaurants, where we begin focus, just last week we told you that darten is planning to spin off or sell its red lobster chain amid pressure from barrington capital. Now, they are turning up the heat, saying a dramatic break is needed. Shares went up to 54. 35. And the suit saga continues, joseph a bank tried to take over the larger rival, mens warehouse, now, they feel the 1. 5 billion bid is just too low. Both of the apparel makers ended the day lower, bank at 56. 29, while mens wearhouse is up. And a court ruled that tiffany terminated a watch ev t venture with swatch before its expiration, it sent shares of the jeweller down, they finished at 90. 50. And buying a Data Storage Company for about 374 million, the move is an effort by cgate to expand its storage business and improve its supply chain. The deal sent shares of cgate up to 13. 28, up 2. 83. Federal regulators are now allowing the marketers to resume the leukemia drug. They suspended sales of the drug after data showed more than 25 of patients suffered serious complications. Shares rose up 9 to 7. A different diagnose is for another drug maker, shares went down for the treatment. The treatment is supposed to help patients suffering from nausea after chemotherapy, the shares dropped to 28. 37. And a completely different story for united therapeutic, shares went up over 30 to 114. 51. Here is something that may not be on your Christmas Wish list just yet, but it is showing up on a lot more of them this year, 3d printers for the home or office. Just how popular these amazing devices are. Reporter will 3d printers be a hot gift this year . The president , jennifer lawton, thinks they will be. They are walking out with a 3d printer. Reporter the Printing Company that acquired the company this year opening two stores in boston, and greenwich, the head of the holidays. The personal 3d printing market is still small, only about 36,000 units sold in 2012, accounting for just 6 of total sales for the printing 3d industry. Analysts say bringing in the consumers is crucial. They have to innovative and innovative with products that appeal to consumers. But go to market is important, because this is a new market. So what kind of objects are consumers printing . They have over 100,000 designs available, including arms, nose, not to mention the countless items you can constant, upload or print. We have a 12yearold son who is very interesting in engineering. We thought this would be perfect for him to build this. It is not just statesist getting in on the action, with more than two dozen consumers this year. Ma prices are starting as low as 300. Stratesit and 3d have been red hot stocks for industries this year. If the industry is able to capture a main stream audience, their goal is even higher. For nightly Business Report, greenwich, connecticut. Coming up, looking for stocks that could be solid performers in 2014 . Well, our special market monitor gifts has a list of stocking stuffers. First, the chairman said he will be watching in the new year. To those of you that are watching nbr, i would think the following for 2014 will be good, secondly, Interest Rates are going to go up. Within that framework, how is the market going to react . More volatility, but more opportunity to make money. All right, wondering what stocks to buy in the new year, grab a pencil and paper and ipad, every night this week well feature a special market monitor to talk about stock picks for 2014. Vice chairman and Portfolio Manager of the aerial focus funds up 36 this year. Nice work, charlie, congratulations. Thank you very much, we did have a very good year. Good for you, you just heard i assume, Mario Gabelli saying he expects earnings to be higher but Interest Rates, too, more volatility, but more earnings, what do you see for 2014. Yeah, i was sort of irritated that you played him first because he said exactly what i was going to say. We do have wonderful tail winds behind us here. We think four big tail winds, energy, housing, auto, all three of those industries will be stronger and put a lot of people to work at good better paying job. And in the fourth tail wind is that europe is going from a head wind to a tail wind. Those are the big things we have going for us, and rising Interest Rates. We think it is almost a certainty. It is hard to predict how stocks will react to that. We think things will go up, but it will be windy. You didnt mention, charlie, anything about technology, and yet you mention the first stock on the list of picks for 2014 is ibm. This is a stock that didnt do so well last year. One of the reasons we didnt have a good year we try to figure things out of favor. Ibm is one of the few stocks that didnt do very well this year, it is trading at a very low price earnings ratio of less than ten. It is going to be benefitting from the recovery in europe. And from a strong economy. And frankly, people are just too negative right now on ibm. Charlie, lets go to the second choice which is western union. Charlie, have you heard of this thing, email, charlie . Yeah, try to send an email with cash across the mexican borders. They have tied up the restrictions, antimoney laundering emails, and try sending it on the other end if the person doesnt have a bank account. You cant do it. So the Money Transfer business has been growing steadily for hundreds of years and we believe it will keep growing. You have another tech stock on your list, this is oracle, everybody debates about it. Why do you like it . Because everybody hates it. I dont know what this guy did, but boy, everybody hates larry ellison, he is very successful, his software is imbedded in companies, huge switching costs yet the stock is trade follow about 11 and a half, 12 times earnings, comparing to an average stock of 15 times earnings. It will benefit from a recovery in europe, no doubt the tech spending has been soft as the economy has been a little soft around tell world. But we believe they will grow. And frankly theyre getting to the clouds better, they had a problem with their products not being available in the cloud and they figured that out. Lets talk about a couple of things you hate, name a couple for 2014. Well, i do think the bond market is still scary, you have had me on in the past couple of times, i think i said go home, find all of your bonds and sell them. Already, some of that pain has been taken, Interest Rates are going up, bonds come down. We think that Municipal Bonds are particularly scary, puerto rico will have big trouble, this year. The state of illinois, the city of chicago where i live still has big problems. So if we get a couple of large municipal defaults, the bonds will be hard, were worried about the high yield market which seems to go through fiveyear swings and it is back to being overvalued. Charlie, thank you very much. Of aerial investments. Tonight we kick off a series called the differencemaker, profiling some of the most important people in business and finance over the past year. And the impact that they have had, now, in the year highlighted by activists investors, no one was more active than carl icahn, wall streets richest man took aim at several companies in 2013 and even one of his rivals. Scott wapner has more. From dueling with del to bothering apple, no investor has roared louder this year than carl icahn. The activist arguing for change at business after business. Well, he is certainly the most vocal, you know, he has a very big microphone and is taking on the worlds richest and most beloved companies. Reporter but one of icahns big battles was not with a corporate heavyweight. You know, i really sort of had had it with this guy. Reporter but a rival, bill ackman. Ackman is a liar, okay . Reporter the billionaires fought on cnbc and a decades worth of animosity poured out. The world watched, and trading on the floor of the New York Stock Exchange spilled out. I never said i wanted to be friends with bill. You said to me you would like to be friends so that we could invest together. Do you think i want to invest with you . Lets move on. Reporter but one of icahns most memorable moments was not about a tiff but a trade. The investor placed a big bet on Video Streaming Service netflix and hit the jackpot. An 800 million profit in just 14 months. Wanted to sell, 100 points ago, i really wanted to sell it. Reporter a big score for an investor who even as he ages shows no signs of slowing down. I think that he is an extremely persistent and aggressive guy, i wouldnt necessarily want to be on the wrong side of a deal for him. But he is a super smart guy, he has a lot to say, and i hope investors and companies are really listening. And if they are not yet, they probably should be. For nightly Business Report, im scott wapner. And join us tomorrow night for the next series of difference makers, were profiling marissa myer for her impact on the Business World. And president Woodrow Wilson signed a lot creating the nations central bank exactly 100 years ago in response to the banking crisis of 1907, to provide the nation with a safer and more monetarily financial system. Over time, the feds grew to regulating banks and suggesting Monetary Policy and providing services to the federal government, and keeping most of us on edge every time they hold a policy meeting. So from nbr, happy anniversary to the fed and may you have many, many more. If this year was not the year of the fed and the taper it certainly was the year of the activist investor witness icahn. Fascinating story about carl icahn, i was going to say in my early years of reporting you didnt even know when the fed was going to have a meeting. So they have come a long way from having transparency, we know more about their activities. Im susie gharib, thank you for joining us. And im tyler mathisen, have a great evening, everybody. Well see you back here tomorrow night, christmas eve. Nightly Business Report has been brought to you in part by the street. Com up to the minute Stock Market News and indepth analysis, we provide objective independent ratings daily on over 400 stocks, learn more at the street. Com nbr