Transcripts For FBC Markets Now 20140304 : vimarsana.com

FBC Markets Now March 4, 2014

About everybody. Adam tensions mounting in Eastern Europe as the crisis in ukraine unfolds, president obama and john kerry today speaking against russias escalating military presence in the region of crimea. We stand on the side of history that i think more and more people around the world deeply believe in. The principle that a sovereign people, independent people are able to make their own decisions about their own lives. Vladimir putin can throw a lot of words out there but the fact on the ground indicated there right now he is not abiding by that principle. If russia does not choose to the escalate, if it is not willing to work with the government of ukraine as we hope they will be, then our partners will have no choice but to join us to continue to expand upon steps we have taken in recent days in order to isolate russia politically, diplomatically and economically. Adam Vladimir Putin today alleging ukrainian president Victor Yanukovych was overthrown in an unconstitutional coup vowing to use force as a last resort as Russian Troops earlier fired warning shots at unarmed ukrainian soldiers. Adam the stock market as todays strong gains. Cheryl a lot based on what we saw yesterday when worries about ukraine were rampant, Nicole Petallides with a lot of new highs today, the s p 500, the small caps 600. I could go on and on. Nicole absolutely. That is what we are seeing today. Complete reversal and traders on wall street were great concerns, action will be noted that yesterdays market was an oversold one. Ten sectors to the downside, today all ten sectors we follow so closely, the dow up 216 points, a gain of 2. 3 . That is our best performance of this year. Is up 1. 22 , down in the record books and as you noted many new highs, we are seeing 40 names on the s p 500 ridding record all time highs and gains across the board, financial, health care, industrials. Cheryl see you in a bit. Adam lets talk stocks, todays rally proving our next guests. The ukraine and the crisis is just a passing thunderstorms rolling through the markets. Chad morgannot lander of steve and nicholas joins us now. Chad, seems the storm has passed a too soon to say that . It has passed and perhaps it will be some disruption along the way but really the market is running not because of russia and ukraine but because lot economy seems to be gradually improving. By no means are we at escape velocity, earnings last quarter were very good and we get into an inflexion point where it seems confidence is coming back not only to the Financial System but the broader economy. Cheryl the kind of argument back here that if you look at a crisis in ukraine and did it have Market Participants very nervous yesterday this could indeed hurt the u. S. Economy you just talked about. If we had issues with russia sanctions against russia that threatens our economy and the emerging markets around world. Indeed it does threaten emergingmarket. I do agree with that. In regards to Global Growth i see this issue as minuscule at best. We dont think the Global Growth dragged from sanctions with russia will be all that meaningful slow therefore i think investors are looking past this disruption at 2014 and saying to themselves where do i want to be . We would recommend developed markets, perhaps europe and the United States and in fact we would stay away from emerging markets at this inflexion point. Adam if we could put ukraine and russia in the Rearview Mirror i thought lot of analysts believe the profits we saw in 2014 when coming at the expense of 2014. Am i hearing you correctly that that is not a case and theres plenty of upside to go . We see a modest improvement in Capital Investment and wage growth, you have jobs growth that has been somewhat lackluster in the last couple months. We believe next fridays number will be somewhat in line with expectations so what we are expecting is the u. S. Economy will grow gradually and hit that point of 3 gdp growth so what do you get . Revenue growth within the s and p round 2. 5 , earnings rose to around 8 and we are looking for expectations of 78 cheryl glad you said that, looking at the nasdaq and the s p and you have the s p positive for the year up 1 , the nasdaq positive by 3 , it seems that is on technologies, the dow lagging a level bit. At this point there doesnt seem to be a speed bump if we get past the ukraine situation. What you calling for for the major indices for the year . Were calling for 6 to 7 on the s p for year end and also Interest Rates to go a little bit higher. Perhaps you get that 31 4 range. If your looking for opportunity in regards to investing we look towards health care, Consumer Discretionary as two sectors we believe you confined good value. Cheryl i know you like t. J. Max. You do like Consumer Discretionary. Thank you, chad. Adam lets talk technology. Cheryl looking to enter the drone business list of reports say the social media site is buying tighten aerospace for 60 million but why . Lets bring in executive director todd able to. Facebook making a move in the drone company. Everyone is wondering why drones, or cameras up in the air but this is what we saw a google do with project minute and south connecting the rest of the world, two thirds of the planet doesnt have access to Internet Connections so we am looking in thirdworld countries how to get imam line. I was talking to adam and the question is is it cheaper to do with this way versus building powers and after some research i found these can provide better solution, one drawn provides coverage of hundred towers due with 3,000 square kilometers. Adam the drill we are talking about the company hasnt had these things fly for five years. The premise is it is cheaper to have a low orbit style satellite than one in space but moving parts break down so how is one of these 11,000 if facebook went forward with that . We dont know because commercial availability wont happen until next year. And one as a payload capable of wireless signal. How do they stay in the air . I dont think we know and havent had the confirmation from facebook or the company saying what is going on or how they plan to do this. Cheryl they are not the only ones looking at drones. The amazon delivery drones glory, google had project moon, they are looking as wild, Everyone Wants to access the emerging market customers. If i can get all those folks in africa that dont have email internet service, google or whatever. Goldman is an American Company and that is the true fight. They would love to get subsaharan africa. What these companies are trying to say is humanitarian effort, we want to get the world connected on the internet. Bring in users on facebook, free option in some emerging markets, lowcost options that are free if you are on with a carrier so you are bringing on more users, with google services. Bill gates said it is better to be on the ground throwing nets and fighting mosquitos and malaria than trying to bring internet to countries and that is the question. Internet provides education and jobs, better way to do a or fighting the real problems . Cheryl economic activity. As to better investment, 60 million here, 19 billion for whats app. Adam we saw the value of the messaging platform blackberry stock was up 7 on that day so you see connecting the world, 50 million monthly active users is huge and that shows the potential of the rest of the two thirds of the world on to the internet that is where 16 billion what about the other 5 billion . 60 million is something. 10 prospective adam the gods must be crazy. Stock alert, j. C. Penney on a tear after standard and poors raised its Credit Outlook on their retailer to stable from negative. An analyst says the upgrade reflects their views that performance has begun to stabilize. The Retailer Forecast further modest gains over the next year. Cheryl has let announcing it will open over 30 new Service Centers and Stores Across europe. Teslas extension of the supercharger is good news for fuel cell and Solar Companies fuel cell energy and all of them hitting 52 week highs. All thanks to to as low. The unstoppable stock. Adam the Obama Administration is rolling out its 2015 budget and singing the familiar tune. Can use a tax hikes . Cheryl oil prices reversing course, down 4 after closing at the highest level in five months yesterday. Commodity analyst matt smith and phil flynn saying get used to this volatility. The Energy Burrito and the mighty fallen coming up next. When does your work en does it end after youve expanded your business . After your companys gone public . And the capitals been invested . Or wn your compans bought another . Is it over after you given back . You never stop achieving. Thats why, at barclays, our ambition is to always realize yours. Coach calls her a team player. Shes kind of special. She makes the whole team better. Hes the kind of player that puts the puck, horsehide, bullet. Right where it needs to be. Coach calls it logistics. Hes a great passer. Dependable. A winning team has to have one. Somebody you can count on. Somebody like my dad. This is my dad. Somebody like my mom. My grandfather. Im very pround of him. Her. Them. Cheryl reversal of fortune in the energy it, Oil Prices Falling back to work close to levels not seen in five months. Vladimir putin said he has no plans to annex crimea. Matt smith of schneider electronic and author of the Energy Burrito. Phil flynn of Procedures Group in the trading pits of the cme. The volatility in the Energy Market just in the last two trading sessions has been nothing short of miraculous. Do we need to get used to is this . Things havent cleared up by any means but as the relief in markets has been palpable that is why we have seen even european natural gas rallying 10 yesterday tracing 6 today and crude rallying yesterday and pull back and so if this is of a good thing it shows hopefully the situation is easing. Cheryl the volatility we are seeing market wide but when it comes to oil it is a the stronger dollar is more of the treasury story. Are you bullish on nymex despite were seeing ukraine . I think we are and cant get through my day without my energy breed of. I dont know how to get through my day. Highly interesting, talking about you this is not as bad as it could have been. Had this happened before the Energy Revolution we would have seen more dramatic moves. We are lucky this happened at the end of winter. Of very moderate winter, there is more volatility, the department of energy arraigned on brand food is the tightest has been since 2006. Are we going to see volatility on higher level because of increased risk . The answer is yes. Cheryl just bringing up the fact that demand and supply you have regulations in place that could be doing the heck of a lot more to be in this situation. Taking 40 from international territories, and t is not changing. Political tensions fighting things, behind the 2000 level, because of the arabs spring, 2012 because of Irans Nuclear ambitions, last year the high of the year because of syria. Even though we are still importing so much, geopolitical tension, being driven to these highs. Cheryl we talked repeatedly about the Keystone Pipeline which would alleviate what we are seeing today. Not just keystone. That is part of it. This anti energy policy. We have taken for granted the fact the we can change the world with our production and geopolitics. Vladimir putin has learned that lesson. They realize the main reason they are in the ukraine is to get control of the pipelines. They dont like the fact that somebody else impact their energy. They realize when it comes to the global game of power is mainly about energy. Russia is taking a last gasp to control as much as they can before the u. S. Becomes a major player. Cheryl at the end of the dave Vladimir Putin wrote loses oil if he continues to pursue this aggressive policy. Is that what were seeing overseas . Yesterday we saw the russian equity market to 13 , we saw the ruble hit record low. When the ruble weakens it means it has to pay more for crude. Economic implications. No surprise that Vladimir Putin made those comments backpedaling. And entering into a conflict. Cheryl the energy bill read a. Gentlemen, great to have you both here. The Puerto Ricans government is issuing another 3 billion worth of debt. It manages more than 7 billion in muni bond assets, we will join us to tell you what happens when you own porter weaken debt and chances are you do. Cheryl call this aspirational investing when the worlds wealthiest are parking their cash. A preview of one of the biggest classic car options. In the new new york, we dont back down. We only know one direction up so were up early. Up late. 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Tears in the stomach or intestines, low bod cell counts and higher liver tes and cholesterol levels have happened. Your doctor should perform blood tts before you start and while taking xeljanz, and roinely check certain liver tests. Tell your doctor if you have been to a region where certain fungal infections are common, and if you have had tb, hepatitis b oc, or are prone to infections. Tell your doctor about all the medicines you take, and if you are pregnant, or plan to be. Taken twice daily, xeljanz can reduce the joint pain and swelling of moderate to severe ra, even without methotrexate. Ask if xeljanz is right for you. Cheryl a news alert, the white house has released its 2015 fiscal year budget which calls for 56 billion more in spending than congress has agreed to. To offset that spending president obama envisions raising about that tax requiring millionaires pay no less than 30 of their income to the u. S. Government as well as reducing the value of the itemize reductions and other tax preferences, 28 for the wealthiest. The 3. 9 trillion budget includes increases in funding for the Commodity Futures Trading Commission and the securities and Exchange Commission to beat up their oversight of wall street. Adam if you hold porter region that in your portfolio and you might be holding and not even knowing it, the issuance of new bonds could make those you hold a lot less valuable. Robert, municipal manager co head and a Portfolio Manager joining me now to talk about what will happen next week, march 11th, we finally get the bond brokering, generalobligation bonds 2. 8 billion what we expect, coupons around 10 , that will drive down the price of current Puerto Ricans debt and a lot of read moms and dads own that through the Oppenheimer Fund and franklin fund, what will happen to these people . It is pricing into the market place. The biggest news is not just this deal which is garnering a lot of headlines and news, what has pushed puerto rico to this point and what will lookalike in five or ten years . It will come to the fundamental credit at the roots in puerto rico. Adam they sell all of that and lets leave those people alone. Puerto rico Just Announced its revenue totaled, net revenue totals, 670 million in january was down, 6. 6 from the same period year ago. That does not sound good if you pay back what you currently hold their debt correct. At a maine state funds we manage we have been talking about this at length for a couple years going from zero exposure to april of 2012 and market access, that negative fundamental credit exists in puerto rico, declining economy, negative population growth, the utility fees are very high, so when and if this deal comes the root problems are still there and that is when the investor will pay attention. Adam this buys puerto rico time on march 11th to buy some time to work out their problems, they are not working out their problems. Members of the Puerto Ricans said it issued a letter in which they said this is the foregone conclusion, suicide and to buy this debt. It is time to recognize our public debt cannot be paid in full. Who gets hurt when they finally live up to that promise . The people who currently active management is so important. What type of debt you owner will be important in your portfolio. General obligation debt, and we do not believe they will default on the general obligation debt but will restructure a lot of other bond that exist out there and that is something the Investor Base is not focusing on. Adam the majority of their 70 billion debt, the majority of 50 billion is not geo debt but the stuff that gets default. So they are going to borrow money next week at a higher Interest Rate hoping to pay off the

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