SUSIE GHARIB: Well, it's four more years for President George
W. Bush, and Wall Street celebrated with a rally. Senator
John Kerry conceded to the president this morning, acknowledging
he could not overcome the Bush lead in the decisive state
of Ohio. But even before the Kerry concession, stocks surged.
By the closing bell, the Dow was up more than 100 points and
the NASDAQ added almost 20. We have three reports this evening
looking at the Bush win and what his victory means for the
markets and American businesses. We begin with Darren Gersh
in Washington.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: In victory,
the president spoke to supporters of Senator Kerry.
BUSH: To make this nation stronger and better, I will need
your support and I will work to earn it.
GERSH: Not that the president really needs the help. Analysts
expect with his popular vote victory and a comfortable Republican
lead in the Senate, Mr. Bush will press an aggressive conservative
agenda. And it is an ambitious one.
BUSH: We will continue our economic progress. We'll reform
our out dated tax code. We'll strengthen the Social Security
for the next generation.
GERSH: The toughest goal is likely to be the last. The president
has proven it is possible to talk about reforming Social Security
in a campaign and still win, but there is no consensus on
the details of reform. And a switch to a system of personal
accounts would most likely be financed by borrowing roughly
$800 billion. Most political analysts consider that a non-starter.
ALEC PHILLIPS, POLITICAL ANALYST, GOLDMAN SACHS: We don't
think that there are 60 votes in the Senate, which are going
to be necessary and we think that concerns over the budget
deficit are going to be substantial enough that, given the
near term impact Social Security reform would have, it's going
to be a tough sell in both chambers.
GERSH: Tax reform may be more likely to pass, but large changes
in the code have traditionally meant promising a net tax cut
in order to offset the political pain of removing popular
loopholes. That would also put pressure on the deficit, but
analysts say reducing the red ink is not likely to be a top
priority, especially given the rising costs in Iraq.
STAN COLLENDER, BUDGET ANALYST, FINANCIAL DYNAMICS: My guess
is the deficit won't be cut in half and that at some point
in the next month, you're going to find the administration
leaking the news that my God, the situation is worse than
we anticipated. We're sorry but cutting the deficit in half
won't be possible.
GERSH: For today, John Kerry was also talking about the need
for unity, but it was also clear that mood will not last as
the president pushes his agenda.
SEN. JOHN KERRY (D) MASSACHUSETTS: I believe that what we
started in this campaign will not end here.
GERSH: But today it is President Bush who is about to begin
a second term with the strongest mandate of any president
in the last 16 years. Darren Gersh, NIGHTLY BUSINESS REPORT,
Washington.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: This
is Erika Miller in New York. From the moment the opening bell
rang at the New York Stock Exchange, investors were euphoric.
The Dow Jones Industrial Average rose 175 points within minutes.
EDWARD KEON, CHIEF INVESTMENT STRATEGIST, PRUDENTIAL EQUITY
GROUP: I think it makes sense, because you have two big sources
of risk 48 hours ago are now gone. We didn't have a terrorist
attack before the election and we had a clear-cut winner as
opposed to an endless recount.
MILLER: But by the end of trading, the market's rally lost
steam, partly on concerns about higher oil prices. Not surprisingly,
big winners today were stocks that are expected to benefit
in the president's second term, among them are major pharmaceutical
companies. Unlike Senator Kerry, President Bush opposes drug
re-importation from Canada. He also opposes letting the government
negotiate drug prices under Medicare. Defense stocks were
also major gainers today on expectations of continued strong
defense spending. Traders spent much of the day debating the
direction of stocks from here. Some are betting today's rally
will be the start of a major upswing, as investors refocus
on the outlook for the U.S. economy.
ABBY JOSEPH COHEN, CHIEF US STRATEGIST, GOLDMAN SACHS: We
think that 2005 will shape up to be a reasonably good year.
Economic and profit growth will slow, but will still be stronger
than in almost every other major economy. So, we think the
market is undervalued and will go higher in price.
MILLER: But others are more cautious, warning there are still
plenty of risks in the market.
KEON: What we see is that earnings growth is stalled in my
opinion. We see valuations are not excessive compared to interest
rates, but still somewhat high by historical standards. And
I think we're going to go through a prolonged period of much
slower earnings growth ahead.
MILLER: Also up for debate is how stocks will end the year.
Some strategists forecast the traditional year end rally.
But others warn the market could decline a few percentage
points from here, especially if there is disappointing news
about the economy and Iraq. Erika Miller, NIGHTLY BUSINESS
REPORT, New York.
To Learn More about this topic, click
here.
Nightly Business Report transcripts are available on-line
post broadcast. The program is transcribed by eMediaMillWorks.
Updates may be posted at a later date. The views of our guests
and commentators are their own and do not necessarily represent
the views of Community Television Foundation of South Florida,
Inc. Nightly Business Report, or WPBT. Information presented
on Nightly Business Report is not and should not be considered
as investment advice. Copyright (c) 2004 Community Television
Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms
of use.
11/03/04:
Business & Labor React To Four More Years of Bush
STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT:
This is Stephanie Woods in Washington. Business groups took
a share of the credit for President Bush's reelection and
continued Republican control of Congress. The National Association
of Manufacturers and the business industry political action
committee say their grass roots get out the vote efforts were
the key.
MICHAEL BAROODY, EXEC.VP, NATL. ASSN. OF MANUFACTURERS: No
one here will say to you that money is unimportant in politics,
but it used to be that the business community thought money
and politics were the same thing, and what we have discovered
is that people is politics.
WOODS: Stealing a page from the labor union playbook, business
groups focused attention on educating workers about issues
and new voter registration. But labor unions aren't ceding
the ground war. The 60 unions of the AFL-CIO claim they delivered
almost six million votes to Senator Kerry. Even though Kerry
lost the election, the unions say it wasn't over workers'
issues.
RICHARD TRUMKA, SECRETARY TREASURER, AFL-CIO: President Bush
did not get elected, or reelected because of his domestic
agenda. He got elected because people were fearful of terror
and they thought he'd do a better job in defending them. That's
the issue that got him elected.
WOODS: Business groups promise to work to turn this election
win into legislation for new world trade agreements and tort
reform.
GREG CASEY, CEO, BUSINESS INDUSTRY POLITICAL ACTION COMMITTEE:
To the degree that we can carry on conversations with our
employees, with our stakeholders about the issues that they
care about in economic security, we can begin to get them
to be part of politically influencing good public policy.
WOODS: But not so fast, say the unions. They promise to keep
up the fight for an increase in the minimum wage, and for
overtime protection.
JOHN SWEENY, PRESIDENT, AFL-CIO: We're going to keep this
momentum and this energy going. We're going to keep the grass
roots workers and activists involved in mobilizing around
their issues, and lobbying, as well as organizing new members.
WOODS: While business and labor are at odds over a number
of issues, both say they hope to find common ground over the
next four years. Stephanie Woods, NIGHTLY BUSINESS REPORT,
Washington. To Learn More about this topic, click
here.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2004 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
11/03/04:
What Bush's Re-election Means For Our Economy
SUSIE GHARIB: We have two guests tonight to analyze what
a second Bush administration means for economic policies and
the markets. Joining me now James Awad, portfolio manager
of his own firm, Awad Asset Management and Andy Laperriere,
analyst with the International Strategy and Investment Group.
Good evening, gentlemen.
JAMES AWAD, PORTFOLIO MANAGER, AWAD ASSET MANAGEMENT: Good
evening.
ANDREW LAPERRIERE, POLITICAL ANALYST, ISI GROUP: Good evening.
GHARIB: Jim, let me begin with you. So we had a solid rally
today. Do you think that now that we've had this Bush victory
the rally will continue and the stocks will end up on the
up side for the year?
AWAD: In the short-term, what you're going to get here is
a cyclical lift. The investor class and the business class
likes the Bush administration's philosophy of lower taxes,
lower regulations. So on the margin, investors will invest
somewhat more and businesses will spend more, but that will
take you through the end of the year. Then we have to look
at fourth quarter earnings reports in January and how the
Bush administration constitutes itself in terms of policy
for '05. So it's a short-term lift. It's a positive but not
an indefinite positive.
GHARIB: Let's talk a little bit about policy Andy. What,
can we expect from the Bush economic agenda?
LAPERRIERE: I think the biggest thing you're going to see
and probably over the next few weeks you'll start seeing this,
is major proposals on Social Security reform and I think that
the White House's intent to take a real run at that issue
is heavy lifting as one of your earlier reports mentioned
but I think that President Bush is committed to trying to
do it and I think you'll see a proposal where workers will
be able to put a significant amount of money into personal
accounts perhaps as much as 4 percent of payroll.
GHARIB: Jim, this morning when you heard the news that Senator
Kerry had conceded and President Bush had won, did you do
anything different with your portfolio?
AWAD: No, not really, although you have to say that you have
somewhat more confidence that businesses will spend and that,
therefore, the economy and the business sector of the economy,
companies in those areas will do somewhat better. I will say
that we had been buying a few defense and energy stocks and
we had to move quickly before they went up in price. So we
stuck to a fundamental strategy but had to adjust to the fact
that Bush is going to be very helpful for the energy and defense
stocks.
GHARIB: Jim, all during the campaign, we were talking about,
people were saying that there were the Bush stocks and there
were the Kerry stocks and we saw today defense stocks did
well, drug stocks did well. Do you see this trend continuing
with these stock sectors?
AWAD: On the margin, yes, Bush is going to have -- put the
wind to the back of certain industries but you just can't
buy them blindly. Some companies are going to do well. Some
are not going to do well, so you still have to do your research,
pick your managements, pick your balance sheets, watch the
execution but on balance there are certain industries that
the Bush approach is going to benefit. But the real key is
going to be how Bush does in addressing these real serious
demographic problems we have with the deficit, with Social
Security, with Medicare. That's going to tell you whether
we're going into a secular bull market or whether we're just
going to get a short-term cyclical lift from the Bush victory.
GHARIB: Andy, let me address this issue of the deficit with
you. As you heard in our reports that we were covering and
just generally the common view has been with the Republican
in the White House and a Republican Congress, it pretty much
rules out any cutting of the deficit. How much of a factor
will this be for the markets?
LAPERRIERE: Well, I think this is going to be a big factor
because and it depends on how the market views it. For example,
if you take Social Security reform that could increase the
deficit quite a bit in the short- term. On the other hand,
if it's coupled with some benefit changes to the program,
it could put the government on a much more sound footing for
the long run and so it depends on how investors view it. Is
this recognizing our implicit obligations right now in reforming
the system and that's a positive or is this just a bunch of
new borrowing that's going to be very negative for bonds and
negative for the markets.
GHARIB: Jim, you mentioned a moment ago a little bit about
business confidence, CEOs perhaps being more confident about
spending. What about your take on investor confidence, consumer
confidence in view of the election results?
AWAD: Well investor confidence, again, on the margin will
be better because investors like low taxes. Investors like
low capital gains taxes. They like low taxes on dividends,
all of which Bush has embraced and pushed forward but also
investors are going to want to see a decrease in the structural
deficit. They're going to want to see spending restraint.
They're going to want to see that Bush is doing something
about increasing the savings rate of the country, of reducing
the trade gap, of attacking the Medicare and Social Security
demographic issues and if I were his advisor, I would say
come out with a bold comprehensive plan in January in the
state of the union make it centrist. It's going to have a
conservative spin because that's what he is, but make it centrist
enough to get passed so that the financial markets will respond.
That will give you a secular bull market and he would make
his place in history.
GHARIB: Andy, I want to ask you about that investor sentiment
but I also want to ask you about the sentiment of the Senate
Democrats coming back. What kind of mood are they going to
be in in their willingness to work with the Republicans?
LAPERRIERE: Well, I think they're going to be in a - I think
that the closeness of the race was the story today but I think
tomorrow, it's going to settle in that the Democrats lost
four Senate seats, that the president got the majority of
the vote for the first time since 1988 so I think the Democrats
are going to feel that they had a pretty bad day. I think
that their level of cooperation is going to depend a lot on
the issues. I think what happened yesterday is going to make
it a lot less likely the Democrats are going to filibuster
judges for example. I'm not sure it's going to change their
position on tort reform very much and so I think the Republicans
may still struggle even with 55 votes to get tort reform through
the Senate because they may not be able to count on Democrats.
GHARIB: This is certainly a discussion to be continued, but
we thank you very much for your contributions this evening.
Thank you, gentlemen. We've been speaking with James Awad
of Awad Asset Management and Andy Laperriere of the International
Strategy and Investment Group.
To
Learn More about this topic, click
here.
Nightly Business Report transcripts are available
on-line post broadcast. The program is transcribed by eMediaMillWorks.
Updates may be posted at a later date. The views of our guests
and commentators are their own and do not necessarily represent
the views of Community Television Foundation of South Florida,
Inc. Nightly Business Report, or WPBT. Information presented
on Nightly Business Report is not and should not be considered
as investment advice. Copyright (c) 2004 Community Television
Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms
of use.
11/03/04:
"Money File"-President Bush & Your Money
SUSIE GHARIB: In the money file tonight, some thoughts on how a second Bush presidency could affect your
personal finances. Here's Eric Schurenberg, managing editor of "Money"
magazine.
ERIC SCHURENBERG, MANAGING EDITOR, MONEY MAGAZINE: President Bush's
reelection will keep the pundits busy wondering who will stay in his
cabinet, what it all means for Iraq? But let's you and I address a question
closer to home: what does Bush's victory mean for your wallet? Let's start
with taxes, a subject central to Bush's presidency. He will keep cutting
them. Throughout the campaign, he vowed to make permanent the temporary
tax breaks that he signed into law in his first term. That includes
reducing taxes on capital gains and dividends. He'll probably come through
on that. It's less certain that he'll have the votes to abolish the estate
tax.
Social Security? Bush is too good a politician to try reducing benefits for
seniors, but he did promise to allow younger workers to set up private
retirement accounts. That idea, however, is so controversial that Bush may
settle for setting up a pilot system and leaving it at that. On the
economy, Bush is unabashedly pro-growth. But presidents obviously don't
rule the economy or else Bush would have seen more job growth in his first
term. The consensus is that high oil prices and the deficit are likely to
keep growth fairly modest.
And finally, is Bush's reelection good for stocks? Wall Street certainly
thinks so. It contributed two and a half times more to his campaign than
to Kerry's. Ultimately, though, the market answers to corporate profits
and there, too, Bush will need help from lower oil prices and faster
economic growth. If he gets it, it's not hard to imagine the Dow at 12,000
or more. But right now, that's a closer call than the election was 36
hours ago. I'm Eric Schurenberg.
To
Learn More about this topic, click
here.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2004 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
11/03/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS: As we said, the apparent reelection of President Bush triggered a
rousing opening rally on Wall Street with the oil, defense and drug stocks
leading the way higher. The Dow soared over 170 points and the NASDAQ
Composite jumped 28 points at the outset of trading. Late in the day
however, a rise in oil above $50 per barrel blunted the rally a bit.
Still, the Dow industrial average came in with a closing gain of 101 1/3
points at 10,137.05. The NASDAQ Composite up 19.5 points at 2004.33.
Standard & Poor's 500 closed up 12 2/3 points ending at 1143.20. Over in
the bond market, the 10-year note fell 7/32 to 101 12/32 lifting the yield
to 4.08 percent.
New York exchange volume leader Pfizer (PFE) on 38.1 million shares moving
up $0.75. Of course the Bush administration seen as favoring less
regulation in the drug industry.
And that also helped Merck & Company (MRK) rising $1.07. Of course dividend
paying stocks were very much in demand today.
Time Warner (TWX) a $0.31 gain. Third quarter earnings came in at $0.11,
down from $0.12 a year ago, but those earnings were hurt $0.05 by a one-
time charge. Revenues rose 5 percent.
Motorola (MOT) a $0.38 drop.
News Corp. when-issued A (NWS.A) stock, now this is one of two newly issued
share class created by the company's recapitalization and reincorporation
in the U.S. and the state of Delaware. That was fifth in volume.
Lucent Technologies (LU) a $0.02 gain.
General Electric (GE) moved up $0.28.
Taiwan Semiconductor (TSM) $0.16 rise.
Viacom B (VIA.B) dropped $0.09.
And tenth in volume, American International Group (AIG), the big insurance
company, down $1.27 a share.
Caterpillar (CAT) certainly gave the Dow a boost with that gain of $2.26.
Lehman Brothers upgraded it from "equal weight" to "over weight" in the
belief that Caterpillar is going to have very strong 2005 results.
Boeing (BA) up $1.27. The Bush reelection seen as a positive for defense
contractors.
Let's have a look at some other stocks in the defense sector, General
Dynamics (GD) up $3.79.
$1.78 gain in Lockheed Martin (LMT).
Good gains in Northrop Grumman (NOC) and United Technologies (UTX) as well,
very strong Sector.
ExxonMobil (XOM) in a firm oil group, up $0.84. Most of the oils up
fractionally or maybe a little better.
USG Corp. (USG), big gain, $5.81. The Bush victory is seen as increasing
the chances for resolving asbestos litigation issues and let's look at some
stocks in that sector that really did well.
W.R. Grace & Company (GRA) up $1.51.
Fractional gains in Honeywell International (HON) and McDermott
International (MDR) and EnPro Industries (NPO) jumping $2.28.
Reynolds & Reynolds (REY) down $1.46. The company is in the software
solutions business and it had sharply lower fourth quarter earnings, $0.31
versus $0.44 a year ago, sees first quarter coming in around $0.24 to
$0.28. The Wall Street consensus is $0.34, much higher.
CIGNA (CI) big insurance firm, up $1.84. Third quarter earnings excluding
one-time charges $1.77, up from $1.36 which was the Street estimate.
Company also boosted its full year guidance from about $6.15 per share to
$6.70 per share.
PacifiCare Health Systems (PHSY) up $6.56. Third quarter earnings jumped 31
percent to $0.94 a share versus $0.86 a year ago, nice move there.
And then Brink's Company (BCO) up $3.21. Third quarter operating earnings,
$0.68, way up from $0.22 a year ago. Revenues up a very respectable 20
percent.
NASDAQ's most active Google (GOOG) down $3.20, a little profit taking.
Microsoft (MSFT) $0.23 gain.
Intel (INTC) gained a dime.
Research In Motion (RIMM) tumbling $9.44. UBS Securities downgraded it
from "buy" to just a "neutral."
eBay (EBAY) down $1.41, fifth in dollar volume on NASDAQ.
Amgen (AMGN) up $3.56.
Apple Computer (AAPL) $1.81 gain.
Cisco Systems (CSCO) a penny loss.
Yahoo! (YHOO) moved up $0.23.
And IAC InterActiveCorp (IACI) up $3.01. Third quarter earnings jumped to
$0.24 versus $0.17 last year and that was $0.03 better than Wall Street was
expecting.
And finally StemCell (STEM) down $0.97, 23 percent drop on profit taking
after a recent rise. Stock also weak because the Bush administration has
favored limited stem cell research as we know.
Those are the stocks in the news tonight.
11/03/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10137.05 +101.32 + 1.0
HIGH 10215.51
LOW 10037.43
NASDAQ COMP. 2004.33 +19.54 +1.0
HIGH 2020.03
LOW 1992.70
VOLUME 1,773.3
PREVIOUS 1,665.8
UP VOLUME 1,427.9
DOWN VOLUME 321.2
DOW TRANSPORTS 3494.64 +45.02 + 1.3
DOW UTILITIES 314.86 +5.93 + 1.9
CLOSING TICK +1259
S&P 500 1143.20 +12.62 + 1.1
S&P 100 546.73 +6.08 + 1.1
MIDCAP 400 609.61 +8.09 + 1.3
REUTERS/CRB 282.54 +1.48 + .5
NYSE COMPOSITE 6787.40 +85.93 + 1.3
VALUE LINE 370.29 +4.63 + 1.3
RUSSELL 2000 595.33 +9.89 + 1.7
DJW 5000 11204.79 +129.57 + 1.2
U.S. TREASURIES
5-YEAR NOTE 3.375%
Oct. 15,2009 100 6/32 -3/32 + 3.33
10-YEAR NOTE 4.25%
Aug. 15,2014 101 12/32 -7/32 + 4.08
30-YEAR NOTE 5.375%
Feb. 15, 2031 108 3/32 -7/32 + 4.83
LEHMAN BROS.
LONG BOND INDEX 1770.82 +.51
DOW CLOSE 10137.05 +101.32 + 1.0
ADVANCES 2528
DECLINES 795
NEW HIGHS 361
NEW LOWS 12
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 29.45 +.75 +2.6
MRK Merck & Co 27.87 +1.07 +4.0
TWX Time Warner 16.59 +.31 +1.9
MOT Motorola 16.70 -.38 -2.2
NWSa_wNews WI "A" 17.19 +.29 +1.7
LU Lucent Tech 3.61 +.02 +.6
GE GE 34.33 +.28 +.8
TSM Taiwan Semi 8.00 +.16 +2.0
VIAb Viacom Cl B 36.51 -.09 -.3
AIG Amer Intl Group 60.20 -1.27 -2.1
NASDAQ CLOSE 2004.33 + 19.54 + 1.0
VOLUME 1,967.1
PREVIOUS 1,859.6
ADVANCES 2102
DECLINES 960
NASDAQ ACTIVES
GOOG Google 191.67 -3.20 -1.6
MSFT Microsoft 28.47 +.23 +.8
INTC Intel 22.67 +.10 +.4
RIMM Rsch In Motion 84.52 -9.44 -10.1
EBAY eBay 99.25 -1.41 -1.4
AMGN Amgen 58.55 +3.56 +6.5
AAPL Apple Computer 55.31 +1.81 +3.4
CSCO Cisco Systems 19.28 -.01 -.1
YHOO Yahoo! 37.97 +.23 +.6
IACI Iac InterActive 25.01 +3.01 +13.7
AMEX CLOSE 1323.32 + 18.06 + 1.4
INDEX SHARES
DIA DIAMONDS TRUST 101.71 +1.18 +1.2
QQQ NASDAQ 100 37.41 +.20 +.5
SPY S&P DEP.RECEIPTS 115.00 +1.45 +1.3
STOCKS IN THE NEWS
CAT Caterpillar 84.25 +2.26 +2.8
BA Boeing Co 51.15 +1.27 +2.6
GD General Dynamics 104.27 +3.79 +3.8
LMT Lockheed Martin 55.89 +1.78 +3.3
NOC Northrop Grumman 53.75 +2.10 +4.1
UTX United Tech 95.01 +1.54 +1.7
XOM Exxon Mobil 49.27 +.84 +1.7
USG U S G Corp 28.00 +5.81 +26.2
GRA WR Grace Co 12.10 +1.51 +14.3
HON Honeywell Intl 34.85 +.40 +1.2
MDR McDermott Intl 14.16 +.93 +7.0
NPO Enpro Inds 25.69 +2.28 +9.7
REY Reynolds & Rey 23.35 -1.46 -5.9
CI Cigna 65.29 +1.84 +2.9
PHS PacifiCare Health 41.20 +6.56 +18.9
BCO Brinks Co 35.00 +3.21 +10.1
STEM StemCells 3.14 -.97 -23.6
