Transcripts For CNBC Power Lunch 20131231 : vimarsana.com

CNBC Power Lunch December 31, 2013

Correct s. E. Sectors that look good. Isperks in play. The stock up big today and 72 this year. And one more big story on our radar, and that is the radar. A lot of cold is moving in with a chance for significant snowfall. The forecast is coming up. Tyler and sue are out. Im melissa lee and simon hobbs at the nyse. Happy new year, simon. Happy new year to you as well and what a year, melissa. The dow up 26 , even as we speak. A good year for those in the market. Its beg your pardon, the s p is up 29 , 29 gain for the s p. As for the nasdaq, lets take sto stock. A gain of 38 . Nasdaq outperforming and small caps outperforming a 30 rise for the russell. All of those are record breakers except, of course, the nasdaq. If you remember, dotcom, happy new year. This has been a great year for a lot of people. Its been a great year. If youve invested in stocks and stayed invested in stocks and ending the year, simon, about the way we began it with modest gains. Take a look at major indices, on new highs on everything except for the russell 2,000. Mid caps did well this year, small caps outperformed even big and mid cap stocks for the year. Transports also right across the board, everything has been up double digits here. A lot of people trying to figure out 2014, asking about the dry index indicating Global Shipping is improving. Given false signals in the past which is why i have a problem talking about it a lot. None theless moving to the upside. See the shipping stocks doing well today on hopes for a better 2014. Finally, simon, asked about the vix up again today, veen as the markets are at new high and the reason this is happening were looking at buying puts in calls, 30 days out and had a dead week in the last week with the holidays. Thats why volatility has been low. Traditionally we go forward from here. You think that will spike thursday or friday . Beginning of the year, yeah. Dominic chu, big gains in 2013, talk about 2014 and specifically january. I mean the folks over a at the group looked at how the stocks fared in january each time around. They looked at the dow. Over the last century the index posted a gain of 1 for the month and its been positive 64 of the time. Pretty decent odds. Over the last 50 years the dow posted an average january gain of a better 1. 3 . Its up 66 of the time. The odds get even better. That means during that 50year span, january ranks as the third best performing month for the dow behind april and december. The odds are we could see a nice continuation to this years bull run to come next month. We decided to take a broader look at the s p 500 and how certain sectors in the market do in january. Our data team at cnbc found over the recent bull run, the last three years, investors have liked the cyclical stocks on average over the last three januarys. Industrials, financials, energy stocks, theyve done the best as investors have bet on a recovering u. S. Economy. Theyre all up around 5. 5 for jap january. The worst one, defensive, telecom, down about 1. 3 . There arent too many people in favor of those sectors going into the new year. Not this time around. Interesting how that coincides. Simon, down to you. Now to stocks that were really weak in the year. Will they pick up in 2014 . Sheilas at the nasdaq with those first. Over to you, sheila. Hey, simon. Were talking about stocks already feeling a hangover and its not even the new year celebration yet. Hung over stocks. You know, this time of year is all about big new years resolutions like weight loss but for Weight Watchers its stock slim down this year, 35 on weak enrollment trends and the rise in wearables. More and more are watching their weight with the new bands. Biotech such a blockbuster year for the sector but a few notable losers. Arena pharmaceuticals, a lot of skepticism about the obesity drug sectors and air riyadh pharmaceuticals down 65 after its leukemia drug pulled from the market. There is a big if, the drug was put on the market in the last month. We have seen the stock rebound 30 in the past 30 days. Analysts say 2014 is all about whether this company can expand that market for the leukemia drug. Finally want to throw in a tech name had p in here. Makes components for apples iphones. Saw weakness and concerns about apple and small phone penetrati penetration. Gross margins decline. Some analysts say 2014 could be a turnaround for the company. Basically on the back of apple catalyst like the deal with china mobile and the potential launch of the iwatch. Quickly on apple, i do want to have a news note here. We have the headline saying that apple denies working with the nsa. The statement with the company says apple has never worked with the nsa to create a back door in any of our product including the iphone. We have been unaware of this alleged nsa Program Targeting our projects. We care about our cust mers privacy and security and apple stock does continue to run the last day in the trading day in the green. Thanks for that. Take a look at shares of hertz on a run today. The stock up after reports fending off an activist attack and then scott wapner broke the news, dan loeb was piling money in the stock. Hertz took on a poison pill yesterday to protect the board from a takeover. There is speculation that has nothing to do with lobe, another player in the mix. Hertz is up more than 70 . Option monster. Com, jon najarian live in chicago. How did you interpret the options activity and how do you interpret that in terms of where the stock will go from here . They were buying the 26 calls with the stock trading at 24 on december 5th. That was a thursday. Now, speed ahead to where we are now, with an upgrade from jpmorgan following on the reporting that you said about scott wapner breaking the dan loeb stake and now theyre betting higher, theyre betting into the 30s for the stock. In other words its not just jpmorgan and the price target, its also the option paper, betting that this one continues to march to the upside and the volumes, of course, have been very strong, melissa. All right. Doc, thanks for that update. Jon najarian from chicago. Kevin is Vice President of Equity Research at jpmorgan where he covers hertz. Kevin just raised hertzs 2014 yearend price target as doc mentioned to 35 bucks from 26. The rating remains an overweight rating. Great to have you with us. Thanks for having me on. Youre positive prior to the activist investors being involved so at this point do you think that all the various catalysts you saw for hertz, namely the spinoff or sale of the Equipment Rental business, could that be sped up in any way because of the role of the activists . You know, it feels like right now that with the activists or potential activists at play, that in combination with board directors, including the chairman and ceo coming up in january of next year, it feels like there could be a little fire under hertzs feet to move more quickly with what theyre doing with the Equipment Rental business. It feels like investors are getting frustrated and are certainly focused on what the company will do with Equipment Rental. But generally speaking i feel good about the industry as a whole. The rental car space, you look at pricing, continues to recover for 2014 and really thats on the heels of the dollar thrifty acquisition that hertz completed at the end of last year. So that, you know, effectively creates an owe la goply in the industry, hertz, avis and enterprise controlling pricing for the industry as a whole. Pretty positive in general on the space. In terms of 35 dollars does that include the spainoff or sale of the rental business or further upside to the stock . That could be potential upside to the stock. The 35 includes Equipment Rental and just status quo for the Current Business structure. All right. Kevin great to speak with you. Happy new year. Kevin, jpmorgan. Lets get to seema moody for a market flash. I want to point your attention to amazon, shares gaining ground after citi raised its target to 457 a share and maintained its buy rating. Shares up about a percent on the day. Simon, over to you. Thank you very much. The attorney appointed by a federal judge to monitor apples ebook pricing after an antitrust suit is now suing apple. Michael brumwitch says that apple has denied him access to the information that a federal judge has told him he must monitor. Apple has had no comment so far. Apple shares fell below the market so far his year, up about 5 , but a phenomenal rally from july as you can see. New pictures just in from north dakota where a train where that train derailed yesterday and its still burning, probably will they say for several more days. It went off the rails yesterday afternoon after being hit by a train traveling in the opposite direction. That second train was carrying crude oil. The impact caused a ps massive explosion. Huge plumes of black smoke can be seen now from miles away. The National Transportation safety board is investigating and People Living nearby have been asked to leave the area. Youll be pleased to know there are no reports of any casualties. Well in five hours, europe will start rolling celebrations of the beginning of 2014. That gives us the perfect chance to look at european markets and their fundamentals for the year ahead. Speaking of 2014, much of the United States is bracing for major winter storms. The forecast is next. If youre living with moderate to severe crohns disease, and it feels like your life revolves around your symptoms, ask your gastroenterologist about humira adalimumab. Humira has been proven to work for adults who have tried other medications but still experience the symptoms of moderate to severe crohns disease. In clinical studies, the majority of patients on humira saw significant symptom relief, and many achieved remission. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. Blood, liver and nervous system problems, serious allergic reactions, and new or worsening Heart Failure have occurred. Before starting humira, your doctor should test you for tb. Ask your doctor if you live in or have been to a region where certain fungal infections are common. Tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. You should not start humira if you have any kind of infection. Ask your gastroenterologist about humira today. Remission is possible. I was going to the library to do my homework. It took a lot of juggling to keep it all together. For some lowincome families, having Broadband Internet is a faraway dream. So we created internet essentials, americas largest lowcost internet adoption program. Having the internet at home means she has to go no further than the Kitchen Table to do her homework. Now, more than one million americans have been connected at home. It makes it so much better to do homework, when youre at home. Welcome to whats next. Comcastnbcuniversal. No doubt about it has been a great year for the stock market here. In europe it was a good year. The ukays ftse up 15 , the cac up, the german dax rose to a record up more than 25 . None of those held to the s p 500. The broad market here, of course, you got a gain of 29 on the stop 500. On the stop 600 in europe youre up 17 . Quite an underperformance there. Dominic chu, is europe an opportunity or drag next year . It could be an opportunity, especially if you look at other places. Youre always going to hear about what you said, the uks footsy, germanys dax. What about the other market indic indic indices . Theyve had dekreents years. The hardest hit countries during the european debt crisis. Italys mib up in 2013. Spains ibex 35 up around well call it 21 in that time. And then greeces Athens Stock Exchange composite index up 28 . One of the stories that hasnt been getting a ton of attention is ireland, the index is up a whopping look at this 34 in 2014. Beating the german dax and the s p 500 in the u. S. Some investors who made those bets in those peripheral European Companies made out pretty well. Some of the biggest gainers in those countries, spain, the Energy Company doing very well. Italys fiat, the automaker doing really well, greeces agene airlines doing great and bank of ireland among simon, some of thep top performers in those markets. Back to you. Thank you very much. One manager reaping success through stock picking in europe is david mars cuss, chief Investment Officer of evermore advisors. The fund evermore valley is up year to date outperforming the s p 500 here. David joins us now with his outlook for europe next year and where hes finding opportunities. Melissa is with us. David, before we dive into the stock picking and how you think well do, we should be really clear. Theres a big difference between the United States and europe. In the u. S. , we can see growth, we can see it strengthening. In much of europe if you strip out germany and the United Kingdom the jury is still out, at one point recently we thought the eurozone might tick back into recession. Absolutely. You know, when we look at whats happening in europe, were actually very excited. When you an environment of so much change going on and its its to the point that youre making, investors arent really clear. Theyre not sure which way they should go. Should they be in, should they be out. We think they should be in. In this period of still uncertainty theres a lot of opportunity. And companies are really taking advantage to restructure, to clean up, to transform the Balance Sheets and try to get back to a point where when growth comes back, they can really leverage and take advantage of it. So were not counting on growth. Were counting on change and restructuring to unlock a lot of value. So youre taking a look at Multinational Companies looking at spinoffs or opportunities. If you look at this list, ing bank, vivendi, are these 2014 stories or are these transformations that will actually take much longer . These kinds of the kinds of stories that they will take quite some time, but you it doesnt come all at the end. It comes in steps. And so we saw the beginnings of it in 2013 and we think during 2014, you talk you mentioned viven vivendi. In 2014 theyre break pg into two companies. Spinning off the telecom business. Even throw its had a big move in 2013 its at the early stage of its sort of transformation. Ing spinning off the u. S. Business. Still own 50 of it. Another chunk to come. We think were in the early innings, very early in the game. David, given were in the early innings and may not be evident or may be evident at the moment, what would you say to people at home . How would they split their money between this stock market solid and rising and europe . In our global fund we have over 55 of our assets in europe, so we can go anywhere in the world. But were choosing to put more than half of our money into the european markets because we see that as the most robust area for value creation. And if you look for the classic cheap stock with catalysts to unlock value, europe is so ripe. Theres nothing wrong with whats happening here in the u. S. We have u. S. Holdings as well. But i think the opportunity in europe is just that much greater. All right. David, thanks so much for your time. Appro appreciate. David marcus, the global value fund. Take a look at this, a live picture of times square, about ten hours and 40 minutes to go until we ring in the new year here on the east coast. Beware, its going to be cold. And snow is on the way. Heres the weather channels mike seidel. This is the storm were watching. Its going to come out of the gulf of mexico tomorrow, come up off the coast and then off cape cod on friday. Thats going to throw moisture back from the atlantic, over very cold air, something we didnt have last weekend, thus all the rain last weekend and not the snow in boston and new york. Snow and wind, we could be looking at a blizzard on cape cod with winds gusting 40, maybe 50 miles an hour. Lot of snow, a significant snowfall, certainly for the boston area. Right now were looking at 8 to 12, the latest forecast thinking from the weather channel. And a five to eight snowfall total in new york city. Its the temperatures, on friday morning, were talking 14 to 15 in new york, boston friday morning at sunrise about 12 or 13 degrees. So theres going to be a big enough factor in the snowfall. This will move on out and some of the coldest air in years moves in. Subzero cold on saturday morning in boston and in new york city, look for lows saturday morning in the park in the single numbers. Well keep you updated at the weather channel. Count on cancellations and flight delays. Back to you. Thank you. Gold heading for its first annual loss in 13 years and its biggest annual loss in 30 years. What traders are saying about it in 2014, thats next. Plus, are quotes from the pope criticizing capitalism hurting donations . Michele spoke to Timothy Dolan exclusively. The pope made critical comments and capitalism and the wealthy. The Catholic Church in new york is trying to raise money from the capital lists and the wealthy. How is that working out . Next on power lunch. Is also enough to keep your smartphone running for how long . 30 days . 300 days . 3,000 days . The answer is. 3,000 days. Because of gasolines high energy density, your car doesnt have to carry as much fuel compared to other energy sources. Take the energy quiz. Energy lives here. Tdd 18003452550 life inspires your trading. Take the energy quiz. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. 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