Transcripts For WBFF First Business 20100809 : vimarsana.com

mark herd quit the company because of sexual-harassment claims by a contractor. hewlett-packard says his actions did not violate h-p s sexual harassment policy. another big week ahead for investors. on tuesday, the federal reserve releases its policy statement and it s expected to keep interest rates close to zero. market pros say the fed will likely stick to its stance that risks to economic growth are still a potential worry. especially in light of what fed chairman ben bernanke said in july: that the economic outlook remains unusually uncertain. keep rates close to zero for the longer. but despite the increasingly negative outlook on the economy, the manufacturing sector is still expanding. the ism index has been above 50 for the past 1 year. slowed down. and some experts say that is to be expected during an economic recovery. and let s check in on the trading floor over there at the cme group and join brian, so what are you expecting the feds to say on tuesday? we re expecting the fed to keep things basically the way they were. they re not gonna moved anything on interest rates. everything should stay status quo. the big thing on friday, we had the jobs number which i think the fed is really hawking and looking at. and the number was a little worse for equities. there wasn t as much get job growth as a respected. it came out -131, which isn t that bad. yeah, 131,000 jobs lost in july. exactly. so, with that being said, i don t think it was anything anything drastic enough that would make them want to change anything in their wording or even in the interest rates. or the talk of quantitative easy. ok, so let s turn our focus to the technicals on the s&p 500. it looks like there s a ceiling now in place and it looks like the market is still kind of stuck in a range. yeah, you are exactly right. and at 1129 in half in the s&p s. on friday we were hoping to try to get above that area, but since we can t, it really opens up the downside and we ve turned really bearish. basically, in a tight range but we target if this holds true down to 1063, which would be a really good, about a 5 percent correction in the stock market. ok, let s talk about a retail sales coming out on friday. do you think that could actually shake up the markets again? you know, these numbers are does not come out as good as we wanted them to. the big thing too is consumer confidence was so bad, i have to assume retail sales isn t going to come out anything better than what they re expecting. i would assume these numbers are kind of drifting worse and worse which puts us still in that bearish mind for equities and you have to keep on buying treasurys. and that s the key. ok, at what point do you what kind of get out of the market when everything goes in really bad. give me a level on the s&p 500 where you want to be out of the markets. below that 1063. if you can hold till the end and it holds, we might keep shaking up and down. but basically after friday s number going into tuesday and the rest of the week, i would not want to be long on the stock market. ok, thanks very much brian tehako of tnt group. the small business jobs and credit act could get another shot at a vote by lawmakers this week, but s a long shot. democratic majority leader harry reid hopes to bring up the bill during a special session of senate. getting a vote depends on a procedural move by senators. on friday, president obama spent time at a sign factory in d.c. where he urged lawmakers to help small companies by passing the bill. during the tour of the plant, the president said small business are being held hostage by politics. the small business jobs and credit act, which stalled in the senate creates a $30 billion lending fund for small companies, as well as $12 billion in tax relief. democrats and republicans have not been able to agree on a number of amendements in the bill. if a vote does not happen this week, the next chance is in september. school is back in session at some universities across the nation. and one of the topics getting attention in the classroom this year is the bp debacle. the company and its former ceo will be studied by students searching for the lessons to be learned. the bp oil well that spewed 205 million gallons of oil into the ocean for weeks and ceo tony hayward s much critized response are now hot topics for higher education. as an educator you say well that s also a nice opportunity to learn some lessons. at the kellog school of management, daniel diermeier a professor of managerial economics and decision sciences tells me lately there has been a plethora of companies in crisis. it started with toyota, goldman and the financial crisis, johnson & johnson and tylenol and now this. as a case study, diermeier says bp s number one problem was damaging public trust. not only were the motives in question, but there were also questions of their expertise. during stretches the company looked incompetitent. bp will also headline circuluum at the university of illinois at chicago. marketing professor david koehler, popular among students for bringing current events into the classroom, says the bp case will be studied from a public relations angle. the fact that we can control the message in pr is a great lesson for students. this is a classic case of what not to do. koehler and diermeier both view ceo tony hayward as failing to show enough empathy during the disaster. koehler says all sides of the story will be reviewed by students, including the issue of drilling for oil, government regulations, whether bp executives should give up bonus money, and the roll of the white house. when nixon talked about it in 72, we were at 35% dependence on oil. reagan, carter, bush and clinton, they all talked about alternative sources. now we are at 65% dependency. reps from major companies such as honda and toyota paid visits to uic to hear students case studies in person, sometimes offering suggestions. and perhaps something more. do they take our ideas? that i don t know, we would have to follow up on that. but they give us the impression they would think about it and implement in the future. the p.r. crisis continues for bp. business week reports anne womack kolton, who has been heading the u.s. media relations for bp for the past two months is expected to be replaced by scott dean, a 12 year bp veteran. kolton formerly was the spokeswoman for the u.s. energy department and vice president dick cheney. still to come. an update on tourism along the gulf coast, and how they plan to fight the effects of the oil spill. but first, we re breaking down the recent jobs report with one of our market pros. that s next. it was more surreal than anything. you re under fire. you re getting blown up. there s definitely adrenaline. there was the explosion, and i remember just opening my eyes, and it got both of my legs. i had surgery after surgery, you know, i was on a lot of pain medicine. what s going to happen next? and how long am i going to be here? the wounded warrior project dropped off a backpack for me. and it had everything in there that i could possibly have needed at that time. peer visitors, people who have been where i had been before, said, look, brother, everything s going to be okay. three months from now, or four months from now, a year from now, you ll be fine. that type of thing was an invaluable service. to be honest, i don t know if i would be as well adjusted as i am now if it wasn t for them. to learn more, call. or visit woundedwarriorproject.org. the jobs picture continues to disappoint investors. john bougearel of structural logic is here to help us break down the numbers. welcome back john. let s take a look a private-sector job growth. it s averaging under 100,000 jobs being created each month since january. would you describe that as anemic right now? it s a very anemic number. and we are looking for a 150 +. so one of my concerns going forward and disturbing things about the july jobs report is how many state and local public sector jobs were lost. and the private-sector is not offsetting that. and the stimulus from the government s stimulus was intended to offset the contraction in the private sector. now the private sector isn t offsetting the contraction in the government sector and this is going to be an ongoing concern. we re going to really be looking at the state and local government jobs process from here on out, because they were supported by the federal government stimulus in 2009 and 2010. going in 2011, we re going to have to watch for the government public-sector to stop shrinking jobs. ok, that s going to be a big concern going forward. also, another big red flag, temporary hiring. it was down, 5600 jobs lost in july for temporary hiring. that s the first drop since last september. so what does that tell you about the job market? that suggests that the job market has deteriorated as we ve gone into the second half of the year. another concern that have is it is consistent with the thought that the job market has deteriorated into the second half of the year is the work week did not improve. and in order to see additional hiring, we need to see more temps on in the average hourly work week going up. and discouraged workers, the number of people who have actually given up trying to find a job. that stands at 1.2 million in july and is up by 389,000 vs one year ago. no wonder consumer confidence is in the dumps right now. yes, we have a structural unemployment problem. and there hasn t been any fix for this. so, it will be interesting to see what the federal government wants to do next, the next that it will take and hopefully we will get feedback in the next week to on that. and despite all this negative news and job reports, there are some bright spots. they re hard to find, but for one, manufacturing jobs have been positive for the past six months or so. they re not fabulous, but they are growing. actually we saw several of the manufacturing regional surveys. the employment index is were actually jumping higher. so i was kind of taken back a little bit and surprised that there wasn t more job growth in the private sector in july jobs report. ok, so are you at all hopeful going into the rest of your for jobs? we need to keep watching temporarily workers. we need to keep watching the average hours and work in with that in mind we have to take it one month at a time. exactly, thanks very much. john bougearel of structural logic. and straight ahead on the show. why it could take years and billions of dollars for gulf coast states to recover from the oil spill. that s coming up after this in the know message. communities along the gulf coast are bracing for possibly years of economic uncertainty with the full extent of the oil spill effects still unknown. last week,we spoke with stephen perry of the us convention & visitors bureau. stephen, what extent tourism and travel really being affected right now in the gulf coasts? are there any hard numbers on that? there are. it s been affected in a number of different ways. in the areas of the florida panhandle, the florida coast and beaches, gulf coast shores of alabama, mississippi coast, orange beaches, they ve had a tremendous hit to their summer season. which is peak for them. by contrast, new orleans which has been sort of the epicenter of the communications and media has been one of the top to tourism growth markets in the country. although coastal parishes in louisiana are very damaged. from an overall monetary point of view, the united states travel association just commissioned in oxford economic study to find out what really happens with these disasters. they track 25 of them over time and found the damage can be lingering 3 + years at a minimum. in the estimate here is $22- $23 billion in damages. and is there any chance at all that those claims are being over estimated right now? no, because they re actually two different ways that business is lost in this huge $100 billion tourism industry. one is by the actual cancellations that come in, and those have hit far more and beach resorts and many of the small communities along the coast. and the other is lost opportunities. for people are risk averse, just from the amount of coverage, whether there is damage or not, the perception issue has killed them. and they don t even make the phone call to book a room. of the estimates, i would give you a example. here in new orleans, we ve done extremely well to this point, but we re beginning to see concern. even though the well has gotten capped. so if we were to be down only 10 percent during an eight month period, that s half a billion dollars. and for the gulf coast beach communities, the damage has been real and immediate and it will be a big part of that $20 billion fund that the president is negotiating with bp. and for the restaurant and hotel and is, how will they recover from this well, there are very to recover. one, you have the damage claim to months ago losses they ve had. its profit at $20 billion fund. what we are trying to do nationally, and i work with the united states secretary of commerce and administration. and bp in particular is to get them to set aside money, not just to pay damage claims, but to help. what is our jet fuel, like what jet fuel is the airplane, for us, that s marketing money. because bp gave marketing money in small amounts to all for the states. it did a lot good and here in new orleans it did a lot of good. so, we re asking for as much as five on the million dollars to help us of these next three years. and with that, avert $22 billion in damages. ok, some of that money will be going to try to address the misperception about travel to the gulf coast. what are those misperceptions right now? here s a clear case. you have people that have canceled and make florida communities for example, up to 50 percent of the runs during the summer for beaches that have never even been touched by oil. and that s part of the problem. it even gets worse, 85-90% of the beaches were unaffected, and and florida they were able, and gulf shores alabama, orange beach and mississippi gulf coast. they brought a claim very quickly. so now, they re back up and running. the fortunate thing is the well, which has been temporarily cap, it looks like a terminal kill of that well is going to happen over the next few days. the cement is pouring in as you and i speak right now. so this has a tremendous opportunity for us to shortened this, but the only thing that will make a difference is marketing mondays, like we had this past month or two. and frankly, like bp is using in their own companies, branding protection. and the obama administration has just said that the vast majority of the spill oil has been dispersed or removed. so shouldn t that make the out look a lot brighter? you know, it is a more positive environment than we expected. here in louisiana, it s a little more complicated because marshes have been dispelled the oil yet like it has been in the open ocean. the administration still a little bit cautious about this because we haven t had a full biological examinations or simply, but is turnout at the notion has been an incredibly dynamic environment. it is helping to disperse properly. but in our business, image and perception driven multi dollar business, twice the size of the entire united states automotive industry. we are still hurt by this and the brand damage, the estimate from oxford economic study potentially up to two to three years of soft periods for this coast. so we are working hard to make sure that that doesn t get realized and that will prevent a lot of further damage so we can bring this incredible episode to a close. ok, well we all hope for a very quick recovery for those of you in the gulf coast. thank you very much, stephen perry of the us convention & visitors bureau. now for an update on the situation in the gulf. bp has finished pouring cement into the well and is now focusing on the drilling of two relief wells. focusing on the drilling of two relief wells. for a fortune five hundred company. i can run a successful business. i can manage your home improvements. i can publicize your message. i can motivate your audience. i can put my military experience to work for your company. i can teach your children. i can boost your bottom line. i can add value to your workplace. i can be a loyal and productive employee. but i can t put my skills to work for your organization if i m not given the opportunity. if you don t recognize my talents and ability, if you don t hire me, if you don t have an open mind and a workplace that s open to everyone. if you don t realize that america works best when everybody works. what can you do? what can you do? what can you do? you can remember that at work, it s what people can do, it s what people can do that matters. nearly 50 million americans have disabilities. capitalize on their talents with employment practices that benefit everyone. learn more at whatcanyoudocampaign.org still to come. matt shapiro talks about what could move the s&p this week. we ll be right back. matt shapiro, president of m w s capital joins us now for his outlook on the week in the s&p 500. great have you on the show matt. so what did you think about that s&p rally that it staged late in the day on friday? well, they tried to shake the bulls out on that week jobs report, but the bulls came back. even though we ve had these light volume rallies and i think this week we re gonna trade on technical factors. and my target is for this rally to be sustained and hopefully hit 1150 on the s&p 500. all right, so here we are at 1122. the s&p dropped by four points on friday, but what are going to be the triggers to help lift it back up? well, i just think the fundamentals of the market, which is very low valuation, excellent dividends and the alternatives are just not good. but the treasury two year yields hitting historic lows. finally, my other catalysts is the vix, which closed down friday despite the sell-off in the recovery. if the vix can get down to 20, i think it shows the rally can be sustained and hit a target of 1150 on the s&p 500. we will be watching for that throughout the week. thanks so much, matt shapiro, president of m w s capital. have a good week matt. and that s all the time we have for today s show, thanks for watching everyone. remember to keep sending us your comments. you can reach us at (312)660- 8397 or e-mail us at comments@firstbusinessnews dot com. we have another controversial viewer mail segment coming up this friday. have a great day everyone, we ll see you tomorrow. it was more surreal than anything. you re under fire. you re getting blown up. there s definitely adrenaline. there was the explosion, and i remember just opening my eyes, and it got both of my legs. i had surgery after surgery, you know, i was on a lot of pain medicine. what s going to happen next? and how long am i going to be here? the wounded warrior project dropped off a backpack for me. and it had everything in there that i could possibly have needed at that time. peer visitors, people who have been where i had been before, said, look, brother, everything s going to be okay. three months from now, or four months from now, a year from now, you ll be fine. that type of thing was an invaluable service. to be honest, i don t know if i would be as well adjusted as i am now if it wasn t for them. to learn more, call. or visit woundedwarriorproject.org.