Transcripts For FBC Markets Now 20140311 : vimarsana.com

FBC Markets Now March 11, 2014

Problems. Cheryl do you believe in miracles . Citigroup might. When it comes to j. C. Penney the retailer, the stock is high as you see on your screen, when it comes to j. C. Penney. Adam bring you uptodate on gm congress marginal Major Program to General Motors, lawmakers want to know why it took the auto giant nearly a decade to recall 1. 6 million vehicles because of faulty ignition switches. That flaw has been linked to 13 deaths. Rich edson is on the story and joins us with more from washington. Rich congress is looking into General Motors, the government is looking into General Motors and General Motors is looking into General Motors after the news that the chairman of the house energy and c committee was launching an investigation. Fred upton meeting with a number of folks to the national highway trading safety administration, staff were continuing to have briefings to figure out why complaints of 260 over the last decade did not alert warnings from federal regulators. We heard back on this, the federal agency looks into issues like this saying we did receive that but they received 40,000 different complaints from drivers each year about their cars and if you look at what is happening here the air bag was not, the car was turning off and the air bag wasnt being the blood. As for cars stalling it is a common defect, a complaint for a number of consumers. Heard back from General Motors, in a letter to employees saying process for determining whether and when to recall of vehicle is decided by experience, technical experts to do their work independent of managers with responsibilities, if they decisions are made on the technical facts and engineering analysis. This is brought to my team a few weeks ago, we acted without hesitation to go beyond the decision by technical experts. Right now General Motors says it is working with suppliers to try to get parts back to these cars. We should be listing them on the screen. Those are the cause you have to be concerned about. Make sure you take all the extra stuff off of your key ring. Put it into the ignition and contact General Motors and get your car fixed. Adam rich edson has the latest from washington. For more on this we are going to bring in steeple nicholas analyst james albertin. Thank you for making time for us, General Motors stock trading now. This is the kind of thing General Motors can recover from. Thanks for having me. It is all about how they are handling it or will handle it. They are doing a good job but you cannot let this debate prolonged. Go back six months ago there was a heated debate around the Jeep Cherokee and fuel tanks and exposure to rear end collisions. People dont realize theyre worth 5 million toyota units recall last year. It is all how the manufacturer handles it. And it needs to be nipped in the bud if you will. Otherwise there could be a longerterm impact. Adam this goes back we for decades the ford pinto problems could General Motors be facing whether valid or not the reputation will challenge that could damage their stock Going Forward from investment . I dont think so. There is never an opportune time considering all manufacturers bring record amounts of products to market and this jostling for share but like i said, i think theyre doing a good job trying to nip this in the blood. I dont think the specifics of the vote we call or anything more severe than the toyota prius and intended acceleration issues and prius sales have done well even withstanding those recalls earlier in the decade so they can certainly recover from it. Adam this is by no means the largest recall in history. We have had larger recalls. Absolutely. It is top of my 1. 6 million sound like a big number again, 18. 8 Million Units recall across the industry last year alone of which toyota was 5 million of those and gm less than of million. Sounds like a big number but in reality it isnt that big an issue. Adam i am not familiar with all the tragedies with the 13 People Killed because of potential problems but did that take place before the bankruptcy and from an investment standpoint what and gm be protected from judgments coming down the pike . One question we close to management and are waiting on is a formal response from them so it would be hard to way in through the legalese as it relates to that but if you look at recall, all different types and makes and models and vintages, chrysler is another example, that recall last year was models going back into the 90s yet were still responsible from a warranty perspective. I dont know if the bankruptcy protects gm in this instance. Adam will we see a commercial that will address not only the shareholders of General Motors the 310 million in the United States . A lot of us have jammed cars . Tied for me to say. Dont know how they will handle that from a pr standpoint. Adam thank you. Cheryl there is pressure again today, this story has gotten some legs. The Energy Committee is all over them. Adam Congress Goes after when they see low hanging fruit to make a name for themselves but getting to the bottom. Adam more on gm and the overall markets. Lets bring in Nicole Petallides on the floor of the Stock Exchange where in this session we are pulling back from those gains we had earlier today and volume is a little better today. Nicole traders are watching the market so closely because it is volatility. Backandforth action, we are up, we are down, the name of the game, this entire year, the dow is down 55 points after having been up 40 points today so we have had that backandforth action, names like mcdonalds, caterpillar and microsoft have been trying to lead the way so the tech stock has been giving it a go and watching to see if the nasdaq could be on track to snap its losses and the nasdaq is down 0. One . Retailers are under pressure because of the cold winter and we have seen a lot of retailers but watching those of a bank and mens warehouse hitting new highs because you can finally say they are coming closer to a deal for 65 a share, 1. 8 billion back and forth since last october but it looks like they are closer to the done deal for these retailers. Cheryl that is the best stock offer in the business world. Finally we get the news on that one. Markets continuing to set new records this year but the street is still on edge. An aging bull market leading investors to 18 billion from the biggest and most heavily traded s p 500 atf which is more than what flowed into that last year. The chief investment strategist at wisdom tree is here. Lets talk about this. The outflow. The most popular and well known edf attracts the s p 500. If billions are going out that means someone out there is nervous. What do you make of this activity . It is normal. We have seen many coming in, sometimes people using it to trade and sometimes to edge. There are other etss tracking the s p 500 that have seen in flows this year so i would say the market is consolidating. Cheryl we are looking at potentially europe of the european market, out of 11 bull markets only three mated to year 6 and many are questioning the u. S. Economy wages. The energy market. Where will this come from . What is unusual is Interest Rates are at zero sell as long as the fed is low and Interest Rates in the shortterm part of the curve the feeling is the market continues to have legs. Corporations can borrow with rates low and to buy back stock and increased Dividend Payments. You are seeing record highs and Dividend Payments in the u. S. And profits and even an employment you are likely at record highs in total employed persons in this country by the end of the year so i should think the risk is people prematurely exit the equity market. Cheryl we have good memories. We were burned by the Technology Bubble and the financial crisis and after five years amazing returns for the major markets. It is okay to be cautious. Something else that is happening that i wanted to get your take on, hedge funds are beginning to change their strategy. Knock on multimilliondollar hedge fund but the smaller hedge funds, trying to get the Retail Investor in. They are now be hitting Like Exchange traded funds which is basically tracking multiple stocks, low fees but even Hedge Fund Guys are trying to play this now. Hedge funds are having a harder time generating output because theres so much competition. A lot of people using edfs, try to play one asset class of another. And take advantage of any efficiencies in the market. The more competition it is the harder it is to beat the benchmarks. Cheryl Kantor Fitzgerald and reggie brown has edf trading, in the u. S. Money is on the sidelines. Any new money is going to europe which would make sense if you are seeing this shift in thinking of a hedge fund managers, i will come of the the new strategy. They can use european etss, i agree we have seen in flows but the inflows the first three months have been tepid relative to what we have seen the last three years. Liz we are big fan of camry. He had a hedge fund and got rid of it. He turned it into the hedge fund and it became a global edf type of fund, turned it into an et of. Will that happen here . Regulation is a piece of it. More and more global asset allocators will take that approach. They used the ets instead of the individual stock. This will you dont have to take the company risk embedded in running a particular security. Cheryl thank you very much for your commentary. The next thing happening in the market right now we are trying to get down to it. Adam fuel cells stocks posting record highs leading some to talk of a bubble. Leading the way over 190 of past month, and the companys soaring since it announced deals of six Major Distribution Centers which include walmart, fedex and lows. Cheryl a few people heard of the trading firm of virtue financial but that is all about to change. The electronic Trading Company plans to raise the one hundred Million Dollars in initial public offering, a big payday for vincent viola, to own the majority of shares to the revenue. Over 664 million last year, and 8 rise from 2012 and had only one day of losses over the last five years. Goldman sachs and jpmorgan are among the underwriters and berkshire will trade under the Ticker Symbol v i r a t which will be trading on the nasdaq. Ipos this year, something that will continue, a lot of new companies coming to market. Adam the war of words heating up in ukraine as we draw closer to its secession vote in crimea. The latest in who the ukrainian Prime Minister is calling and this is a quote, a gang of fascists. Cheryl ukraine to china, credit suisse, massive stock miles hitting iron ore prices tied. Will lowest in four years. We are live on the pads of the cme with a good explanation. We will be right back. Nascar is about excitement. But tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. Thats why we partnered with hp to build the new nascar fan and media engagement center. Hps Technology Helps us turn millions of tweets, posts and stories into realtime Business Insights that help nascar win with our fans. A short word thats a tall order. Up your game. Up the ante. And if you stumble, you get back up. Up isnt easy, and we ought to know. Were in the business of up. Everyday delta flies a quarter of Million People while investing billions improving everything from booking to baggage claim. Were raising the bar on flying and tomorrow we will up it yet again. Cheryl the situation in ukraine remains tense. Ukrainians just north of crimeas a russian operatives moved into the territory. Associated press reports say russia is formulating its own solution to the crisis. Latest developments on this he shoot tom daschle and webster. Ashley the next couple days could be very critical in finding a diplomatic solution to the crisis in ukraine but that prospect, lets be honest, seems pretty bleak at this point. The News Conference in russia, depose ukrainian president yanukovych call the politicians in ukraine gained of fascists and says president ial elections a firm that may twentyfifth are illegal. Same day ukrainian Prime Minister is calling the authorities in granny and unorganized gained back by the russians. A lot of games out there. Outside negotiations also floundering. John kerry says he wont talk with russia until moscow actually agrees to debate u. S. Proposals on the crisis. Vladimir putin calls those proposals, quote, not suitable land is wrapping his own plan. There is very real concern sundays referendum vote could mark a dangerous turning point. A yes vote could embolden moscow to send more troops into the region and the yes vote is certain because theres no real option to vote no. Crimean Parliament Says this is how the ballot will look. Voters were asked two choices, join russia immediately or declare independence and then join russia. Voters simply asked to check one of two boxes. The choices i yes now or yes later. Voting no is not an option. In london officials are meeting to discuss racial and officials including asset freezes of travel bans, and these could be enacted within days. And go ahead with the referendum, that goes to the whole situation. Cheryl thank you so much. Adam the best friends sanctions against russia. Fox business contributor phil flynn joined us from the trading pits of the cme and brent moving the above 108 a barrel. Where are we now . 108. 22, and the spread has picked up well over 1 today. It is not just the ukraine. The ukraine is the big headline story. We are concerned about libya. There is this north korean tanker that rebels killed a put will. The Libyan Government says if the tanker beeves we will blow up and the possibility the Libyan Government is taking by force these Oil Export Terminals if they dont get a resolution to that situation. A lot of concern about that into the market so you have two things the market is focused on. The other thing is u. S. Oil production is going to be a record not as big as they said over the next few years, and came up with the latest predictions in that crudeoil influences refineries will take out the previous side from 2004. New record but not as high as they said before. Adam iron ore prices are tumbling. Troubling news regarding chinas economy hitting a new four year low. The new four year low and on top of that the biggest one day drop on record percentagewise. This is a huge story. Big miners are saying this is a shortterm situation, they still believe in the long term china demand story but shortterm is really a money situation. Concerns about credit in china driving these markets and high inventories and a lot of people in china use iron ore to finance a lot of deals but with tightening credit situations like a huge margin call, People Holding on to the supplies are dumping them. Adam when you say it is a shortterm problem like realestate agents back in 2006 the prices of houses will fall. Liz it is all funding game so you cant fire x box, microsoft launches its new game tighten fall, and how they will spur cotton sales. We will bring them to you in the west coast minute. Liz saving puerto rico . 3 billion in new debt by the commonwealth. So our business can be on at ts network for 175 a month . Yup. All 5 of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line, anytime, for 15 a month. Low dues, great terms. Lets close new at t mobile share value plans our best value plans ever for business. Adam puerto rico mack stout selling 3. 3 billion in new debt, yielding 8. 7 was pretty good, news for the struggling commonwealth could hint at trouble down the road. Robert donahue is the director of Municipal Market advisor is and joins us now to explain why. They bought themselves some time. Most analysts say one year, maybe two bobby back to the potential default restructuring they faced before the Debt Offering . The collective breath of relief today in the minister will market technicals removed in prs favor today, and four months ago last month when puerto rico was getting downgraded, there was concern whether puerto rico could access Additional Capital to bridge itself to something and the concern is what did the bridge themselves to . Another fiscal crisis . Is it to some kind of economic recovery . The problems in puerto rico remain. The economy continues to struggle. Every month we seem to see Economic Indicators dropping. There dont seem to be cute drivers of Economic Growth so this may provide temporary breathing room and we may be back where we were. In a year or two. Adam a bridge to what . We interviewed robert from Municipal Managers yesterday and he said they are concerned how much revenue pr will have to raise to meet all the commonwealths obligations, you did that issue. We have

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