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tv   Nightly Business Report  PBS  July 26, 2013 4:30pm-5:01pm PDT

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this is "nightly business report" with tyler mathisen and susie gharib brought to you by. >> sailing through the heart of historic cities and landscapes on a river, you get close to iconic landmarks, to local life, to cultural treasures. viking river cruises, exploring the world in comfort. >> the next fed chief, what will be the next to lead the world's most powerful bank? the talk of wall street and washington and the answer could impact not only savings but also your investments. >> is cash king? companies are hoarding it and individuals are holding on to it. is there a risk to playing it so
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safe? >> and encore careers. is it possible to turn your passion into a paycheck later on in life. how to not out live your money. we have that and more tonight on "nightly business report" for friday, july 26th. good evening everyone and welco welcome. call it a turn around friday. stocks pulmobled and recovered from a loss of 150 points. the dow squeaked out a gain bringing the win streak to five but the s&p 500 was not as lucky. it's weekly win streak was snapped at four dragged down by exped expedia. the dow closed at 15558 and the s&p 500 higher than a single point and the nasdaq up by eight. while this may have been the biggest week for earnings so far, next week may be the
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biggest month for the economy turning a quiet midsummer stretch into something more meaningful. topping a busy agenda, ben bernanke chairs the two-day fed policy meeting as the focus on his successor narp brows. two people lead the list of possibles. the fed isn't expected to rollback bond buying when it's meeting wraps on wednesday. shifting the tantrums into september and maybe beyond given the data we've seen. the same day retail sales, housing, manufacturing gets mushed together for the first biggestment of second quarter gdp and perhaps a better picture of whether easy money and tightening federal budgets are affecting the economy. it's the last big week of the earning season, a quarter of s&p 500 report. among big names on tuesday, barkleys due out and on thursday
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exxonmobil and pack tore and gamble and friday toyota. that day, the mother of all economic data. the july unemployment number. get ready for a busy week. and by the way, president obama today said no decision has been made about who he will nominate to be fed chairman and no announcement is expected until the fall. joining us to talk about it, anthony, nice to have you and let's begin where tyler left off. what will replace ben bern nae key. we don't know who it will be, but who do you think wall street wants? >> i think wall street is more comfortable with someone like janet jellen. she was a governor and district bank president and vice chairman. the only wrinkle is it's not the federal reserve making the decision but the president of the united states but given her
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inclination is towards unemployment and bernanke was obsessed with inflation, the market will favor janet yellen because they like to keep it longer than someone else. >> i sense, anthony, you think the odds of mr. bernanke seeking and receiving another nomination are small. if that is the case and the two leading contenders are ms. yellen and mr. summers, how would a yellen fed differ from a summers fed? >> i think summers has written a lot of papers out there, and certainly his latest academic research suggests that he does favor fiscal policy more, i think in that sense he's more likely to lean on the congress than janet that would promote perhaps more monetary policy easing and activist monitory policy. keep in mind, the edge that larry summers has that ms.
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yellen doesn't have is that he's a lot more comfortable, i would say, with the president. he's had a lot more special and contact with the president where janet yellen has remained on the sidelines. i think it's clear from the federal reserve's perspective and experience as someone as a central banker, jellen has to lead the back and summers second. >> this pulling the stimulus out of the economy will be a huge job, unprecedented, big experiment. nobody has done this before. who do you think is better equipped to navigate that, yellen or summers? >> given that yellen has been in the game and privy to the debates and pros and conns as the federal reserve went from one easing program to another, i have to believe she has the edge, even there on the
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intellectual side than larry summers who has been in the administration and not necessarily inside the central bank. both of them are intellectually capable of adjusting but in terms of somebody up and running, i have to give it to janet yellen. >> how is the economy doing now and what do you think of the jobs report? >> i think the economy is clearly growing below 1% and employment is growing so we'll get weak productivity in the seconder quarter but on friday we're looking at a number closer to 200,000 and if i give you a range 280 to 200 thousand. >> all right. we'll see what happens next week. anthony, thanks so much for coming along. chief economist at chase private economists. pleading not guilty this morning to criminal charges of insider trading. steve cowen the man that runs
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the front is not at the courthouse but prosecutors have a large amount of evidence against the firm including electronic messages and court-ordered wire traps. they were charged with fraud that the government says led to hundreds of millions of dollars in ig lllegal profits. >> jp morgan is considering a sale off of products. it comes after the government criticized powerful banks for participating in so many aspects of this business. trading c trading commodities and owning them. why is this important? as you may remember, "nightly business report" brought you a story this week how banks own physical commodities might drive up things like soda cans and car parts and it's getting more scrutiny in washington, as well. the senate held a hearing looking into the impact it might have on consumers.
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halliburton is looking into the deep water horizon oil spill. the company will pay the maximum fine, $200,000 and subject to three years probation. on two occasions, halliburton directed employees to get rid of simulations that might have focused more attention on the company's role in the still. the still was the largest in u.s. history, nearly 5 million barrels of crude poured into the gulf before the well was capped. our guest will give his opinion on what to do with halliburton shares now. in the news today, ubf, the bank will pay more than $800 million to u.s. regulators over allegations the swiss bank misrepresented mortgage backed bonds during the housing bubble. they disclosed this week they reached an agreement in principle to settle the suit. to boeing, the federal aviation administration is
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proposing a fine against boeing for failing to fix an issue with fasteners within an appropriate amount of time. the fasteners were on 777 boeing planes and discovered in 2008. we didn't address the issue new mexico late 2010. pepsi isn't calling the naked juice all natural anymore. it contains ingredients that don't measure up to the all natural label. pepsi is paying $9 million to settle. samsung reported a 50% rise in profit s from a year earlier and smart phone sales, as well, but some signs of slowing by margins squeezed by high markets costs and the pace of growth may slow further as competition intensifies. the results were similar to apple reported earlier this week. now, as we start the second half of earning season, a familiar pattern is taking hold. record amounts of money sitting
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in corporates. it's more than apple and google. why companies are hoarding cash and what they might do with it. >> reporter: it's almost like corporations are hoarding cash. total cash in equivalent at an all-time high. as of this week total cash by s&p 500 companies totalled $933 billion, $24 billion more than the same time last year and the highest levels on record. when you break down the cash hoarding by sector, technology, which is typically the highest holder of cash moves to number two behind industrial. industrial companies are holding more than 12% of total assets in cash. while many point to a lack of profitable investment opportunities, others think it's for more defensive reasons. >> cash levels are very high
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because of a great deal of uncertainty. corporations feel uncertain about the future direction of legislation and sequester and what the federal reserve might do. >> reporter: apple far and away has the most cash on hand, with $145 billion. followed by microsoft with $87 billion and google at $56 billion. while the cash reserves of those tech heavy weights is impressive, cash makes up more than 72% of total assets for mid cap companies like linear technology and intuitive surgical. >> individual investors are also holding on, putting money out of bonds but not reinvesting in stocks. while economic and financial conditions have improved, there is enough uncertainty to keep investors on the sidelines waiting for reassurance. >> cash is simple and straight forward and as i got older, i prefer more straightforward interactions. >> i don't trust credit cards.
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i don't trust banks. i like to keep my cash close to me. >> i think i've been putting less than i normally would have put into the market at a change in a few years ago. >> reporter: it is certainly good for corporate and personal balance sheets to have some cash in a piggy bank for an opportunity that arises, but companies do have duties. >> they will look for investments. they might look for acquisitions. they might look to actually extend new broad duct line. >> reporter: in the meantime, many believe companies will continue to raise dividend payments to investors and continue share buybacks. for "nightly business report," i'm courtney regan. still ahead, looking for a way to not out live your money, how about an encore career? some baby boomers are doing it and doing it successfully. the final part of the series, how to not out live your money.
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but first, let's look how the international markets faired today. people are living longer and many are working longer. the employment picture improving. those in their 60s will work and others are pursuing second acts launching encore careers as the next chapter in their professional lives. for some its a way to make sure they don't out live savings. sharon epperson wraps up the series, how to not out live your money. >> who i am, where i came from, what i wanted to do. >> reporter: after leaving a 40-year career in purr accomplishing, this 65-year-old
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says self-reflection was essential to figure out what to do next. >> what i wanted to do is what i had been doing my whole career, which is to serve and give back in various ways to the community. >> reporter: she's using skills she hadn't thought of initially focussing on people, not publishi publishing. >> i interviewed and hierped and trained a lot of people, and i think that's part of the piece that's making me successful here. >> reporter: she's now a human resources executive, working as director of organizational development at the center for employment opportunities, a non-profit organization that helps men and women just getting out of jail get into a job. >> our sole focus is helping formally incarcerated individuals find and keep employment, especially in the critical days right after think were released. >> reporter: beth 54-year-old is director of publish affairs. she found this position through
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a non-profit agency that helps people find a second act to serve the greater good. there is as many as 9 million people between 34 and 70 that are getting paid. another 31 million are interested in making the leap into encore careers. they are seeking careers in the non-profit world, healthcare, education and government. while doing this work can mean a cut in pay, having some income can help those who aren't ready to retire yet. >> most people are not in a position to fully require in the traditional sense at a quote unquote normal retirement age. the simple fact is most people are not in a position to accumulate enough assets so they need to pursue other forms of income to supplement that lifestyle so it can last as long as they do.
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and for more on encore careers, go to our website, nbr.com. investors differing reactions to reports leads tonight's focus. amazon touched an all-time high despite a poor report siting amazon's improving margins. investors sent shares up 3% on triple the normal volume and closed at $312.01. different for expedia. the stock slammed and analysts cutting ratings from market perform to out perform. higher costs outset ref knew growth and profits dropped. the stock dropped almost as much losing 27% on eight times the normal volume. expedia ended at $47.20. shares of blizzard surged on news that's it's an independent game company.
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most of the shares were bought for $8.2 billion. he called the deal an opportunity for the game company and investors agreed. it closed at $17.46, up 15%. also hitting an all-time high, lear corporations posting revenues and earnings that beat estimates and raised the full year revenue guidance benefitting from the boom in u.s. auto sales ending at $67.80. warehouser benefits from the strengthening housing market. it had profits that more than doubled from the year ago quarter but the company forecast a smaller profit and the stock drooped a bit. shares fell more than 1% to 28.80. market monitor tonight expects the stock market to pull back.
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he's phil orlando. welcome back, phil, good to see you. >> thanks for having me back. >> i asked guests you have profits at 2%, 3%, 4%, i don't know the final number but you got a stock market up 18.6% so far this year. is that really sustainable? >> absolutely. the reason is stocks are cheap. we started this cycle back in '09 at 11 times earnings and right now we're at 14.5 times next year's earnings and ought to be trading at 18. so this will continue. >> that's good to hear. you know, so we got lots of questions for you from viewers. gary wants to know about the outlook for halliburton. you heard the story earlier in the program about settling bp spill issues. >> that over hang is behind the company. that allows them to focus in fundamenta fundamentals, which are strong and a significant buy back program. we like halliburton. you can see the stock move up to the mid 50s over the course of the next year or so. >> let's move to dave in ohio.
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he wants to know whether target is a good one to own. what do you think? >> we like target but retailers are under pressure now. we talked about some of this in the beginning of the show. the increase of taxes, sequester hurt consumer spending. we do think that will improve in the second half of the year, if target comes in here into the high 60s or so, i think it's attractive for a rebound to consumer spending in the second half of the year. >> another sector, fertilizer supplier potash, lauren in north carolina wants to know about the outlook for this company. what is your view on this, pot? >> it's a great fundamental story under pressure for a number of reasons. you've got a normal growing cycle in the united states, so the prices of corn and wheat for example are sitting at 52-week lopes. the the emerging markets are weak from an economic stand point and dollars. so right now the numbers are a
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mess. the stock is still attractive but near term probably not where you want to be. >> let's move to jim in san jose who said he owned microsoft for a couple years now and wondering if he should stick with it. what do you think, phil? >> you have to have patience. they pushed the quarter within the last week or so. the problem is that the company is still core business is still the pc or tied to the pc, and that's an area that's in decline. the areas that are hot right now are mobile, smart phones, things like that. so what you want to see is a major transition or reorganization or change in senior management. we got to get microsoft focused on areas growing rather than areas in decline. >> so phil, two stock recommendations of your own tell us what is so attractive of glid. >> biotechnology company are active in the hepatitis c market. what occurred just within the
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last 24 hours, which is very exciting, is one of the companies that they have become peting against in terms of developing the draw to come to the market thanks clears the way for giliad to come to market by the end of year and the only major company with a drug in this market. that can give them to a two to three year head start. stock here at 60 and we could see that in the mid 70s looking out over the next 12 to 18 months. >> the other pick, 30 seconds, phil is qualcom and do you own of of these stocks, we just talked about? >> we own qualcom and gilliad. unlike microsoft, they are in the smart phone business, which is growing and this company will probably continue to do very well. >> phil, great to see you v. a great weekend.
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>> thank you, tyler. and still ahead on the program, it might be the ultimate summer fun. we'll take you inside the boat shaped like a shark that one man turned into a successful business. but first, how commodities, treasuries and currencies faired today. toyota is number one, the world's top selling out toe maker for the first six months of 2013. out pages the u.s. rival, general motors.
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a new car may not help if your summer plans include exploring the depths of a local lake at 55 miles an hour. with the ultimate high-tech toy jane wells shows us just what you might need to make that happen. take a look. >> reporter: it's like a jet ski meets a submarine and turns into a torpedo. think of it has a human powered shark nato. what is the goal? what is the purpose of this whole venture? >> there is no purpose whatsoever. we didn't really envision any plan when we started this. >> reporter: he's a long time boat designer who turned into the jessie james of personal water crafts. >> most people don't think it's real a movie prop or something, they have no idea. >> reporter: it's a submersible
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power boat that goes beneath the surface and jumps into the air with an engine of 300 house power. >> we actually forced a buoyant force under water and can jump out and do so many tricks. >> reporter: it can top $100,000, each custom made. 50 have sold so far, mostly to the middle east and asia. >> we made them look like shuttles, demons with blood trickling out. >> reporter: he hopes to do more than sale boats, he wants to create a sport. >> our goal is to evolve and make them faster and better and start a racing series. >> reporter: the hardest part is developing a system so easy, even an idiot can operate it. i'm living proof it's possible. actually, that wasn't me making that reach, my attempt was far
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lamer. >> more power, more power, go, go, go. >> reporter: but the future doesn't look lame for the sea creature, self--funded and profitable, the business is riding high with a waiting list of customers. for "nightly business report," jane wells, california. we've seen jane a lot of stories, i think this tops it all. >> my neck hurts watching that. that is a recipe for whiplash. wow. that does look like fun. >> pay $100,000 for one? >> looks like swimming with the fish in a dolphin. coming up next week on ni t "nightly business report" a special series on long-term care. we'll explore all the issues surrounding long-term care next week right here on "nightly business report." that's it for "nightly business report" tonight. have a great weekend everyone. >> and a busy week ahead. we hope you join us next week. i'm tyler mathisen. thanks for being with us and have a wonderful weekend, everybody. see you on monday. "nightly business report"
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has been brought to you by sailing through the heart of historic cities and landscapes on a river, you get close to iconic landmarks, to local life, to cultural treasures. viking river cruises, exploring the world in comfort.
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