Transcripts For CNBC Closing Bell 20131224 : vimarsana.com

CNBC Closing Bell December 24, 2013

Incredible run, not only for that one, but facebook has doubled in 2013 this year. That really is one of the stories of the year. Remember, when twitter went public, there were lots of people saying the retail interest, thats how we should have known, the retail interest wasnt that strong. There was a lot of institutional interest, and people thought after price, hitting near 50 on the first day of trade, drifting back to the 30s. Instead, it has marched steadily higher. You can feel people buying in, ramping up into the year end. Going back to november early november. And just an incredible run. There it was at 38 when it was at its low, and now were at 68. Unbelievable. Well get to more of that. Meanwhile, the dow is heading for its fifth Straight Record close after a much betterthanexpected surge in durable goods orders. A lot of the Economic Data have been pretty good. So i think it was a prescient decision by the fed last week. And some fed officials are saying how surprised they are how positively the market has responded. Along with the other reports weve seen, its hard to argue that theres nothing theres no real strength there. The 10year is reflecting that. Talk about other levels to watch today. It is almost sat the 3 level, just extraordinary move. That was the years high, south of 3 . Anyway, plenty coming up on the program. We have more on whether the santa claus rally will carry over into 2014 and which stocks will lead the way, and stocks arent the only way to invest. Wine has become very investable. And were all wine experts. How does one become a wine expert . Youd think with the amount of sampling weve done yes. Certainly, i wish i were a little more of an expert. Secondly, whether stocks or wines are the best investment. And showing you how far were doing so far today, up about 50 points for the dow. Thats about the session high. Remember, this is a half day. Thats why were standing here now, because this is the beginning of the last hour of the trading day. We close at 1 00 eastern time today. Nasdaqs up five points, and also the high of the session, at 4,153, and the s p is up about 5 points, as well, at 1,832. Lets get to our closing bell exchange, peter anderson, craig hodges, and were all over the country today, craig hodges from the hodges fund in dallas, david molenar from hightower, todd , who we all hate because youre in florida. Craig hodges, i mean, what an incredible run for this stock market. Does it continue in 2014 now that we know that the easy money from the fed that has really fostered the rally in many ways the last four, five years, is going to start to slow down a little bit . Yeah, you know what, the hodges fund, we think it will continue. Weve been through, you know, basically five years of outflows out of domestic equities. And were just now seeing the very early stages of money coming back into this market. I dont expect well see as big of moves. I think its going to be kind of a normal market, if you will. You know, kind of the 8 to 10 , 12 type returns. But for a firm like ourselves, thats a perfect environment. Thats where stock picking and actually the market doesnt take all of the stocks up, just the ones that are earning, you know, more money this year than last, and growing at a faster clip than the competitors. Well, thats interesting you bring up the Earnings Growth and i guess the revenue projections generally, peter, i have to ask you, ghing back to whats happening with a company like twitter, theres lots of people we hear from every day, the retail public shaking their heads going, should i be worried about the valuation levels here, or do i need to understand the disruption thats coming from some of the new players . Right, kelly. Well, im one of those people thats in that category of shaking the head. Just because i think twitter still hasnt really been quite proven out. But if you carry that thesis over to just plain u. S. Stocks, many in just the common industries, there are plenty of stocks out there that are still reasonably valued, and by that, i mean lpe, in the range of 14, 16 times. But theyre up almost 100 yeartodate, just like twitter is. And i still think they have a way to go. In the portfolio i manage, for instance, i was just taking a look at it before i came on here to see what the projected Earnings Growth is for next year. On average. There are about 25 stocks in there. And the projected earning growth is 20 . So i think its got legs. I think that the fed everything is in alignment. Its a wonderful way peter, the projected growth is 20 , and already trading 14, 15 times. Are you suggesting you think 20 Earnings Growth for some of the Companies Next Year is achievable . Oh, absolutely. And it sounds like your prior speaker said, it is a stock pickers market. You cant make these general statements about the index and say that everything in the s p 500 is going to be moving up. When you start looking at some of the companies, for instance, you do see that theres a rationale why they can move up. David molnar, how does wall street look from san diegos perspective . Can this rally continue in 2014 . And if so, who takes us there, do you think . Thanks, bill. Glad to be here. Yeah, i think the calendar is going to change, but we dont think the market is going to change. Were moving into 2014, but the reality is, the stocks will continue a steady march higher on the back of pension fund reallocation, and the feds ongoing qe policy. Yes, we tapered a week ago. We dropped 10 billion and they traded that with very accommodative dovish rate Forward Guidance rating, still running 900 billion annual rate, so we dont see any change really. I do think the first guest, we agree there, that the returns that we see in stocks are probably not going to be 28 like were running right now. Right. Two years of double digits. So maybe something more in the historical, he said 8 to 12, we agree thats the target range, as well. But for the beginning part of the year, anyway, its more of the same. Todd, if you look at the best performing skters this year, its health care and consumer discretionary, even at a time during this Holiday Season when were talking about the discounting pressure, whether foot traffic has been weak. So what do you stick with for 2014 . Do you rotate into other areas . Well, i think investors now need to take a hard look going into next year about their Asset Allocation in general. Still many are underweighted to cash overweighted to cash and fixed income, so we like equities in general, coming out of a very strong year in the market like we had this year. Historically speaking, since 1945, stocks have averaged about 10 . So we really like the equity markets for 2014. I think probably one of the best stories out there that never seems to be talked about enough is the energy markets. We talk a lot about twitter and facebook and technology, which is really the sex appeal. But the reality is the booming thing going on in this country right now is the shale gas, the fracking that the hydraulic fracking going on, thats leading to jobs. Its leading to a revolution a renaissance in manufacturing here in this country, and i think thats the big story for 2014. But how im curious, how do you play it . Because at the same time were looking at the gas price, and the oil price, i should say, crude oil, and at 99 still here for the wti. Why is that lasting, because everyone says it will be way, way lower and its not happening. A lot of supply. Thats a good question, kelly. My feeling is we manage wealth for wealthy families and the first goal is to preserve wealth and then growth and income. From our standpoint, we want to play the energy way very safely and profitably, so we like the pipeline stocks, and mlp pipeline stocks yielding between 5. 5 and 6 . With tax efficiency, so people looking for income out of their portfolio, are a little hesitant where the fixed income markets are going, i think they should take money from cash, or maybe bail out some of the fixed income into this area. Rick santelli, as kelly pointed out, the 10year tantalizingly close to 3 . Does that become a resistance level . Does something technical happen at that point . Are you waiting for that . What happens when we get there . The round yields are always important, whether its 3, 3. 25, 3. 5, so the answer is yes. Even though ive been wrong thus far, to be at or above it by now, yes, conventional wisdom on this floor, some pretty smart conventional wisdom, would dictate 3 and beyond. Yesterday, 2. 94, and the 30s just woke up. They were really dogging it. Theyre up about four basis points. So we continue to see parallel shifts today, even though the big trade in the last month has been flattening. And if you look at just the last month, the 5s, the 30s has lost 40 basis points of steepening, thats huge. But the big trade this year, really foreign exchange, lets not forget they celebrate the nikkei at 16,000. I can remember in 1989, december 29th, it was just shy of 39,000, and the dollaryen finished last year with an 87 handle, and were trading with a 1. 04 handle. So thats the big trade i think you want to continue to monitor for next year. Thats so true, rick. Not to belabor the point, but when you put up the fiveyear chart, to see 1. 75 , or just about, it feels like were talking 1. 61. 5 the last couple weeks, and were pricing in fed rate hikes by, what, 18 months time. Is the market going to force the feds hand here, rick . Well, its interesting, because bill always has a way with words. He said it was prescient if they done the midwest taper, because the market is pushing back. Now, lets be fair here, kelly. It is possible that this is more unwind than proactive, but well have to wait and see. You know, rick always has the nicest way of disagreeing with me, doesnt he . The big smile on his face. Gentlemen, thank you. Merry christmas. Enjoy your holiday. Happy holidays. See you guys. Thank you. Byebye. We did this at the christmas party, come on, youre not quite wearing your boots. I wore flat shoes. These are almost flat. See. Were not that far apart in height there. Anyway, where are we going . Going higher. The dow is up 55 points. This is the last hour of trading. Well be closing at 1 00 eastern time today. Yes, the nasdaq today, despite twitter, is actually lagging a bit on apple giving back weakness, but can a santa claus rally carry over into 2014, and if so, which stocks on the nice list . Stick around to find out. Also, deep discounts are not enough, it turns out, for many retailers right now. Some are actually staying open around the clock to try to attract shoppers. When we come back, well find out which Retail Stocks you maybe should be looking at for some lastminute Shopping Tips for your portfolio. And a record year for stocks, which results in a bonus boost on wall street. You may be surprised by who is getting the biggest payday. Stick around to find out. Youre watching cnbc, first in business worldwide. Ys guaranted onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. If youre still procrastinating with the holiday shopping, what are you waiting for . We do have good news. Many stores have been open around the clock, and they will not close until very late this evening. Yeah, the question is, though, whether the extended hours really will boost sales or spread them out over a longer period of time . Sarah eisen is taking a look for us. Sarah, what can you tell us for us . Reporter in sacaucus, new jersey, the stores have been open nonstop. It sounds like a gimmick, but its actually a new, serious strategy theyre putting in to address serious challenges that theyre facing, a triple whamny this season. Number one, the consumer. Youve been talking about and reporting the latest traffic, showing its over 20 last week versus the week before. Slow numbers like that. But also adding to their problems, you have six days less in terms of the Holiday Spending season this year, versus whats typical. Six days less between thanksgiving and christmas. So thats a challenge. On top of all of that, you have the surge in online spending, buy whenever, whatever mentality, thats causing the retailers to stay open 24 7. I talked to a number of analy s analysts, and they arent too optimistic that it will move the needle in terms of sales. They say its not going to cause consumers to open up their pocketbooks more, just going to shift the sales toward different times per day. We heard from the former toys r us, said, look, its a profitable strategy, even if you have 20, 30 people in the store at night, which is something, by the way, our crews saw. We were here at 3 00 a. M. , and there were people, taking advantage of fewer crowds, taking advantage of perhaps better service, but the read here is that its not going to really change the outlook when it comes to holiday sales traffic. Sarah, you were there at 3 00 a. M. At i mean, thats incredible. Has the traffic picked up during that period of time . Im surprised anyone was in the store at that time. There were a few cars in the parking lot, 3 00 a. M. To 6 00 a. M. Right now, its full. Theres a kohls, theres a toys r us, a Sports Authority packed. So if seacaucus new jersey mall is any indication, maybe the last hours before christmas could be a sign that things will pick up. Certainly, different than what we heard from the latest numbers and the anecdotes from the retailers. How is that for a welcome to cnbc, in a parking lot at 3 00 a. M. Hey, its the most important story of the day. There you g thats why we put you on it, sarah. Its the final day before christmas, and we get the final word on retail before christmas arrives. We talk with Senior Research analyst of piper jaffray, and harold, and welcome to both of you. Neil, weve established the last few weeks this has been a watershed year for online retailers. When all is said and done, what impact will they have had on the brick and mortar this year, do you think . We think for those brick and mortar retailers that have the ecommerce websites, that work very well, the consumers already there. Its up to the retailers to keep up. Its definitely going to be a photo finish Holiday Season, but an eHoliday Season bring the time it plays out. What are the top picks for 2014, howard, in your sector . For 2014. I think for 2014, you have to stick with where theres momentum. Theres not a lot of momentum in power. It hasnt been a strong year. Looking out to 2014, you pick guys with momentum, differentiated, so nordstrom for next year, tjx, and limited brands. We used to ask the question, does it matter if they have an Online Presence to go with the brick and mortar, but thats a foregone conclusion now, isnt it, howard . Yeah. You have to have an Online Presence. And really, the bottom line is, you have to be there for the shopper when the shopper wants to shop. So if the shopper wants to go to the mall, you have to have the stores. If the shopper wants to shop from the house, you need a fast and accessible website. Yeah, it used to be that they would cannibalize but yeah, exactly. Jack was saying yesterday he did all of his shopping join line, and the response to his point, there were a lot of people who had done the exact same thing. So as that happens, as more people shop online, who are the players that win . Is it in amazon . How many other dotcom websites are we bringing into the retail here . No doubt, the pureplay ecommerce sites will have the upper hand as it relates to the procrastination of the u. S. Consumer. However, our own survey work has demonstrated over the last six months that consumers prefer to shop at sites with stores. It removes some of the consumer pain points of returns. So we say focus on those retailers that are thinking ahead on the digital side and have good exposure. We agree with howard. We like that nordstrom. But wed also throw in a really tough chart for 2013 on Urban Outfitters and look at that for 2014. Great business online. Whos going to be the big loser here . I think of a target, struggling so mightily because of the breach in their security. How much of an impact does that have, even with the 10 discount, are they sort of the big loser, or someone were leaving out here, nealy . Its hard to call target, its not a stock we cover. What we can say, it raises the bigger issue of security and data security. We say investors need to allow these retailers to spend the dollars to make sure things like that dont happen. And so, with that can mean lower earnings in 2013, but only temporary. Those are Good Investments to make going forward. Yeah, and the technology guys that will help them out with this one. Nealy and howard, thank you very much. Merry christmas. Thank you. Thanks. We have about 40 minutes left to go before the closing bell. Strange to do it as we approach 1 00 p. M. Im hungry. Its lunchtime. I told you to have some chocolate. I should have. Where was i . American airlines stocks, flying high since completing its merger with u. S. Airways a couple of weeks ago. When we come back, well hear from somebody who says the sky is the limit for this stock. Also in the sky, santa. Were tracking him right now with the help of a top general at norad and update his travels later. Eas that spark your curiosity tdd 18003452550 can take you in many directions. Tdd 18003452550 you read this. Watch that. Tdd 18003452550 you look for whats next. 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