| 11/23/04:
How Low Can The Dollar Go Against The Euro?
PAUL
KANGAS: The mighty greenback is looking anything but tonight.
The U.S. dollar weakened sharply today, hitting an all-time
low against the euro, and multi-year lows against several
other currencies. There are broad factors behind the weak
dollar that have significant implications for the U.S. economy.
We have two reports this evening, beginning with Scott Gurvey
in New York.
SCOTT
GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: It is a familiar
story. The dollar falls to a new low against the euro, Europe`s
common currency. Today it took out some technical support
levels at $1.31 to the euro. The dollar has lost 28 percent
of its value relative to the euro since the start of the year,
about 8 percent in the last month. Currency experts say traders
are looking for any excuse to buy euros, and the current sentiment
is to view trades against the dollar as the best bet to make.
REBECCA
PATTERSON, GLOBAL CURRENCY STRATEGIST, J.P. MORGAN CHASE:
That`s always a dangerous situation. Once everyone has the
trade on, it`s no longer an easy trade. That said, when we
look at flows we have internally here at J.P. Morgan, we are
seeing that speculative accounts, short-term accounts, are
trading in and out of this position. People are short dollars,
but not in a really extreme way. I think they could add to
those positions.
GURVEY:
Against the basket of European currencies, the dollar has
not been this low for nine years and then, interest rates
in the United States were much higher, helping to prevent
the flight from dollar assets most fear in the current climate.
In the current environment, traders see little reason to expect
the dollar`s decline to end any time soon.
ASHRAF
LAIDI, CHIEF CURRENCY ANALYST, MG FINANCIAL GROUP: We think
that toward the end of the year, we think that the dollar
is probably going to end at levels not far from where it is
right now against the euro, at around $1.31. We do think that
there is expectations that the dollar, on the other hand,
against the yen could fall towards 100 from 103 right now
and in the next quarter next year, the dollar could probably
fall towards 98.
GURVEY:
If there is a point at which the governments might be inclined
to intervene in an attempt to stabilize the dollar, the experts
say that won`t happen until the euro reaches $1.40 and they
do not see that happening, at least not until after the end
of this year. Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.
STEPHANIE
WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: This is Stephanie
Woods. With the U.S. running a $600 plus-billion-a-year trade
deficit and spending more than it saves, economists say the
dollar`s slide is inevitable.
FRED BERGSTEN,
INSTITUTE FOR INTERNATIONAL ECONOMICS: If the decline can
continue in the gradual and orderly way that it`s continuing
now and occurs soon, before the U.S. economy gets back to
full employment, where we don`t have any slack and therefore
would face more inflation pressure, then I think the adjustment,
though large, could be carried out in a fairly constructive
way.
WOODS:
A falling dollar makes U.S. exports cheaper overseas and drives
up the price of imports. A weaker dollar will probably mean
higher interest rates and some slowdown in the economy. But
that could be cushioned by a boost in exports and increased
profits for U.S. companies doing business overseas. U.S. manufacturers
say another 10 percent drop would put the greenback at a fair
price.
FRANK
VARGO, NATIONAL ASSOCIATION OF MANUFACTURERS: A strong dollar
to manufacturers is a euphemism for an overvalued dollar.
We talk about a sound dollar, what I would call a goldilocks
dollar, a dollar that`s not too high. not too low, but just
right.
WOODS:
But there`s one glaring place where the market doesn`t set
rates. China pegs its currency at a fixed rate to the dollar.
The administration has tried to jawbone the Asian nation into
devaluing its currency, but experts say that won`t solve the
problem, since China accounts for only 10 percent of the U.S.
trade imbalance.
BARRY
BOSWORTH, BROOKINGS INSTITUTION: The U.S. problem is in the
U.S. hands. We know what our difficulties are. We are over
consuming as a nation. We got very low private savings and
we got this fantastic public sector deficit. We have no business
trying to lecture the rest of the world about the problem,
when the first part of it lies in American hands.
WOODS:
But the solutions aren`t popular. Slashing the Federal budget
deficits means higher taxes or fewer services. Increasing
American`s savings rate means we`ll have to spend less. 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.
11/23/04:
Japan Is Taking Stock of Online Trading
SUSIE GHARIB: While Americans have about half their financial
assets invested in the stock market, that`s not the case in
Japan. Less than 10 percent of Japanese personal assets are
invested in stocks. But as Lucy Craft reports, that is changing
with the onset of online trading.
LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: A short
five years ago, the typical Japanese retail investor was rich,
male and retired. Meet the new breed of stock holder, working
stiffs like 29-year old Junko Kusaka, who trades online after
hours or on their lunch breaks.
TRANSLATION OF: JUNKO KUSAKA, RETAIL INVESTOR: I used to
just keep my money in the bank but interest on savings is
almost zero and I can`t count on the pension system when I
retire in 30 years, so I decided to take charge of my finances.
CRAFT: Aggressive cut rate online brokerages, launched after
financial market deregulation in 1999, have transformed the
demographics of investing with a slew of new products and
clever touches calibrated expressly for greenhorn investors
like pouting faces for sinking stocks, smilies for rising
shares.
TRANSLATION OF: JUNKO KUSAKA To place an order in the past,
you had to call a broker and pay a high commission and they
gave you the hard sell but online you can study the market
at your leisure.
CRAFT: Leading the online charge with missionary zeal are
young Turks such as Oki Matsumoto who abandoned a lucrative
partnership at Goldman Sachs to found what is now one of Japans
four most powerful online brokerages.
OKI MATSUMOTO, CEO, MONEX: In the states I think about 50
percent of population owning stocks and 36 percent of people
trading stocks. In Japan only like 10 percent of people owning
stocks and just 3 percent of people trading stocks. It`s a
long way, a big space for us to grow into.
CRAFT: Japan has long fostered so-called zombie companies,
badly run firms propped up by equally mismanaged banks. Matsumoto
says those companies may find it harder to exist because online
trading is creating a new class of small, but collectively
powerful dividend focused shareholders more attuned to closely
following the fortunes of the companies they invest in. You
have all of these little guys who are trading on their own
ideas doing what they want to do and quite often ignoring
advice from the big brokers. So it`s a whole new game.
CRAFT: Online trading was slow to take off in Japan, but
last year profits began to heat up thanks to a bullish equities
market and Japan`s high population of broadband subscribers.
About three quarters of all retail stock trading is now done
online, a share that`s likely to continue expanding at least
as long as the stock market keeps rallying. The real test
for Japan`s nearly 50 online brokerages, experts say, is how
many are able to survive when the stock market heads south
again. Lucy Craft, NIGHTLY BUSINESS REPORT, Tokyo.
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.
11/23/04:
"They Made America" -FedEx Chairman & CEO, Frederick Smith
PAUL KANGAS: In association with the "They Made America"
series airing on public television, we`ve been looking at
the new innovators who are making their mark on American business.
These new innovators radically changed their industries and
their innovative ideas transformed the world. Tonight, my
profile of Fred Smith, a new innovator who took an idea from
a college term paper and changed the shipping industry forever.
It`s 11:00 p.m. in Memphis, Tennessee, show time at FedEx
super hub. Every night at this hour, millions of packages
pass through here. FedEx planes from all around the world,
at a pace of 85 an hour, touch down every hour of the night.
Packages are quickly unloaded, sorted, reloaded, and flown
out to their final destinations. The genius behind this organized
chaos is this man: Fred Smith.
FREDERICK SMITH, CHAIRMAN & CEO, FEDEX: I knew that it was
a very very important business idea. I felt from the start
that it would become a very big enterprise. Of course, envisioning
it as a $27 billion company and 245,000 people, no, I don`t
think I thought that. But I did know it was going to be a
very big enterprise if it worked and I was convinced it was
going to work.
GHARIB: It was at Yale University where Smith came up with
the idea for FedEx. As an economics student in the 1960s,
he wrote a paper about the need for a new system to deliver
spare parts overnight as American businesses became more computerized.
Smith says he got a "C" on the paper but the idea stayed with
him. After a tour of duty with the Marines in Vietnam, Smith
returned to his hometown of Memphis to see that his predictions
were coming true. Computers were becoming an indispensable
part of American business. But delivery systems weren`t keeping
up.
SMITH: I was very anxious to do something constructive rather
than destructive. I mean, Vietnam and the military is all
about the negative aspects of life and so I was highly motivated
to do something that would be positive.
GHARIB: And he did. In 1971, he started Federal Express.
The new company was designed around a hub and spoke distribution
system, using both airplanes and trucks, a new concept for
the transportation industry.
SMITH: I knew that the idea was simply who could raise the
money, that it was simply one of execution and every day that
we operated, it got better and better and that has continued
now for 30 years.
GHARIB: FedEx was anything but an overnight success. On its
first day of business in April 1973, 14 jets took off with
a total of only 186 packages. Within two years, it was on
the verge of bankruptcy. At one point, Smith paid his bills
by gambling at a Las Vegas black jack table, wiring his winnings
of $29,000 back to the company. Not only did Smith`s gambles
pay off, so did his innovative techniques. He pioneered the
use of bar code technology to track packages. He was one of
the first in the shipping business to advertise in consumer
magazines and on television. And in the late `70s, Smith personally
lobbied in Washington to change strict airline regulations
which let FedEx use bigger planes. His persistence paid off.
Today the company is a $25 billion powerhouse and the word
"FedEx" is now included in Webster`s dictionary.
SIR HAROLD EVANS, AUTHOR, THEY MADE AMERICA: Fred Smith`s
genius was to see behind the conventional wisdom that the
world had speeded up, to realize it hadn`t speed up enough
for the modern consumer, the modern businessman. And the second
thing was enormous courage, to take all that money to try
and do something nobody else had ever done before.
GHARIB: Now Smith is taking his savvy business ideas to new
markets. He`s expanded into ground shipping and recently paid
$2.5 billion to buy Kinko`s, the nation`s biggest copy company.
Not only will it bring in more packages, but Smith wants to
duplicate Kinko`s retail success by opening stores around
the world. Smith is also expanding in China, with plans for
a hub in mainland China serving more than 300 cities.
SMITH: You have to innovate. You have to find a new way to
do things. One of my favorite phrases came from Professor
Cantor (ph) up at Harvard, where she talks about kaleidoscope
thinking. And I agree with that, where you look at a business
problem or you look at a market and you keep turning the kaleidoscope,
and then all of a sudden, there it is. There`s a new concept.
There`s the new way to do something. And I think that`s pretty
much ingrained in our culture here at FedEx.
GHARIB: Smith, who just turned 60, shows no signs of slowing
down. He is still moving as fast as a FedEx jet. But he did
pause recently to talk about his legacy.
SMITH: The company has changed the world. There`s no question
about it. And I`m enormously proud of that. And my contribution
to the company hopefully will be that legacy: made the world
a little bit better.
KANGAS: Tomorrow, the states and stem cells: a look at the
rush to become a research hub.
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.
11/23/04:
"Commentary"-Robbing Peter To Pay Paul American Style
SUSIE GHARIB: "It`s usually not a good idea to spend more
money than you make, and tonight`s commentator says that`s
especially the case if you`re the U.S. government. Here`s
Charles Schultze, senior fellow emeritus at the Brookings
Institution.
CHARLES SCHULTZE, SENIOR FELLOW EMERITUS, BROOKINGS INSTITUTION:
Private investment spending in the U.S. is now rising steadily
and consumers have been increasing their spending faster than
their income. Meanwhile, after large tax reductions, the Federal
government has been running sizeable budget deficits, borrowing
heavily to finance its own expenditures. And despite administration
rhetoric about cutting spending, those deficits will continue.
Altogether, American consumers, business, and government have
been spending more than the nation produces. We have made
up the difference with imports, running record trade deficits
and borrowing from abroad to finance our excess of spending
overproduction. But with America`s overseas debt now mounting
rapidly, foreign investors are finding an increasing fraction
of their portfolios tied up in dollar- denominated assets.
As Chairman Greenspan has warned, they may soon begin to worry
about the risk of large financial losses if the dollar should
depreciate substantially. In that case, foreign willingness
to hold dollar assets will drop, and the dollar will fall
much further than it already has. U.S. production for exports
would rise, but the threat of inflation would force the Fed
to raise interest rates steeply, squeezing out domestic investment.
It`s not likely, but the dollar decline could possibly get
out of hand, causing serious financial problems. Ironically,
it may turn out that these kind of developments are the only
thing that can get the administration to abandon its cavalier
attitude towards large budget deficits. I`m Charles Schultze.
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.
11/23/04:
Last Word: Time's List Of High Tech Breakthroughs
SUSIE GHARIB: And finally tonight, it looks like a badminton
shuttlecock, flies into space like a rocket, and lands like
a glider. It`s spaceshipone and it`s the coolest invention
of the year according to "Time" magazine. In its new edition,
"Time" profiles the most innovative technology breakthroughs
of 2004. Among them, the "go-car," a three-wheel, GPS-enabled
talking car. Tourists ride in them, the car points out landmarks
along the way or the Adidas one "intelligent" running shoe.
It has a sensor that measures how hard your feet strike the
pavement and cushioning controlled by microprocessors adjusts
the resistance. And Paul, there`s also an amazing new watch.
It`s a Tag Hauer engineered like the engine of a fine race
car.
KANGAS: And I understand it requires no batteries and no
winding and it`s not a sundial either, a marvel of engineering.
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.
11/23/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS: Stocks headed lower this morning in reaction
to a surge in oil prices above $50 per barrel. Also hurting
was a brokerage downgrade on Intel, so at noontime, the Dow
was off 44 points, NASDAQ down 15.
As oil gave back much of its early gain, stock prices improved
this afternoon to close narrowly mixed. The Dow Industrial
Average ended with a gain of 3.18 at 10,492.60. The NASDAQ
Composite had just a fractional loss putting it at 2084.28.
Standard & Poor`s 500 also lost just a fraction to 1176.94.
In the bond market, the 10-year note fell 2/32, putting the
yield at 4.19 percent.
Big board volume leader on 23.6 million shares, Time Warner
(TWX) moving up $0.48. The company reportedly may be close
to a settlement with regulators regarding its AOL unit`s accounting
issues. If the company is allowed to admit to no wrongdoing,
that could shield it from an avalanche of shareholders` lawsuits.
Pfizer (PFE) $0.17 loss.
Motorola (MOT) gained $0.42.
General Electric (GE) $0.28 loss.
Lucent Technologies (LU) edged a penny higher. That was fifth
in big board volume.
Limited Brands (LTD) down $0.68.
NorTel Networks (NT) an $0.08 loss.
Citigroup (C) moved up $0.04.
ExxonMobil (XOM) $0.29 gain.
And American International Group (AIG) was up $1.35. The
company has settled disputes with the government regarding
PNC financial services and Bright Point.
Deere & Company (DE) ran up $1.50 today. Fourth quarter earnings
strong, $1.41, way up from $0.27 a year ago and $0.42 above
the Street estimate.
H.J. Heinz Company (HNZ) was down $0.61. Company`s second
quarter earning a bit higher, $0.56, versus $0.54 a year ago.
It repeated its fiscal 2005 earnings forecast for $1.32 to
$1.42, but expects the lower end. Prudential downgraded the
stock from "neutral" to "under weight."
Abercrombie & Fitch (ANF) up $1.76. Bank America upgraded
it from "neutral" to "buy" on the company`s improved business
strategy.
And H&R Block (HRB) closed down $0.15, but after the close,
it reported a second quarter loss of $0.32 a share, double
the loss that was expected on the Street and that`s versus
earnings of $.06 last year. In after hours trading, I saw
HRB stock as low as $46.10.
New York & Company (NWY), it just went public October 7th
at 17. It`s a women`s apparel retailer. Today it reported
third quarter loss of $0.10 a share versus earnings of $0.10
a year ago, but the company sees fourth quarter jumping all
the way up to $0.42 to $0.46 a share.
Range Resources (RRC) up $2.32, positive reaction to the
company`s acquisition of a private Appalachian oil and gas
property for $219 million.
Dycom Industries (DY) plunging $4.84. After the close yesterday,
company reported first quarter earnings, $0.32, up from $0.29
a year ago, but it said second quarter earnings will drop
all the way down to $0.14 to $0.09. The Street was -- $0.19
I should say and the Street was expecting $0.27.
World Wrestling Entertainment (WWE) down $1.36. Second quarter
earnings fell all the way down to $0.05 versus $0.25 a year
ago. Revenues fell 11 percent.
NASDAQ volume leader Sirius Satellite Radio (SIRI) on a massive
$420 million shares, up $0.74. Traded as high as $6.95 a share.
They`re speculation a short covering rally developed after
the company said it`s surprised it surpassed 800,000 subscribers
so far and was on the track to have a million subscribers
by year`s end.
Intel (INTC) down $0.73. CS First Boston downgraded it from
"out perform" to "under perform." It cut its price target
from $25 to $22 a share.
Google (GOOG) up $2.42. First Albany brokerage began covering
Google with a "buy" recommendation and $195 a share target.
Microsoft (MSFT) $0.12 drop.
eBay (EBAY) a nickel gain.
Apple Computer (AAPL) down $0.08.
$0.15 loss in Cisco Systems (CSCO).
Kmart Holdings (KMRT) up $6.58.
Yahoo! (YHOO) dropped a nickel.
And Dell (DELL) gained $.21.
And those are the stocks in the news tonight.
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.
11/23/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10492.60 +3.18 + .0
HIGH 10514.99
LOW 10436.38
NASDAQ COMP. 2084.28 -.91 -.0
HIGH 2092.02
LOW 2068.98
VOLUME 1,429.1
PREVIOUS 1,392.6
UP VOLUME 781.7
DOWN VOLUME 621.0
DOW TRANSPORTS 3621.08 +11.84 + .3
DOW UTILITIES 331.92 +1.34 + .4
CLOSING TICK +1048
S&P 500 1176.94 -.30 - .0
S&P 100 561.29 -.35 - .1
MIDCAP 400 634.51 +2.53 + .4
REUTERS/CRB 288.72 +1.25 + .4
NYSE COMPOSITE 6985.30 +5.51 + .1
VALUE LINE 387.22 +.86 + .2
RUSSELL 2000 624.53 +3.01 + .5
DJW 5000 11562.93 +11.61 + .1
U.S. TREASURIES
5-YEAR NOTE 3.375%
Oct. 15,2009 99 20/32 -2/32 + 3.59
10-YEAR NOTE 4.25%
Aug. 15,2014 100 16/32 -2/32 + 4.19
30-YEAR NOTE 5.375%
Feb. 15, 2031 107 30/32 +6/32 + 4.84
LEHMAN BROS.
LONG BOND INDEX 1762.68 -1.34
DOW CLOSE 10492.60 +3.18 + .0
ADVANCES 2026
DECLINES 1306
NEW HIGHS 291
NEW LOWS 6
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
TWX Time Warner 17.94 +.48 +2.8
PFE Pfizer 26.90 -.17 -.6
MOT Motorola 18.87 +.42 +2.3
GE GE 35.81 -.28 -.8
LU Lucent Tech 4.00 +.01 +.3
LTD Limited Brands 26.20 -.68 -2.5
NT Nortel Networks 3.18 -.08 -2.5
C Citigroup 45.21 +.04 +.1
XOM Exxon Mobil 51.20 +.29 +.6
AIG Amer Intl Group 64.20 +1.35 +2.2
NASDAQ CLOSE 2084.28 - 0.91 - .0
VOLUME 2,082.4
PREVIOUS 1,926.0
ADVANCES 1718
DECLINES 1373
NASDAQ ACTIVES
SIRI Sirius Sat Radi 6.71 +.74 +12.4
INTC Intel Corp 23.37 -.73 -3.0
GOOG Google 167.52 +2.42 +1.5
MSFT Microsoft Cp 26.53 -.12 -.5
EBAY Ebay Inc 109.53 +.05 +.1
AAPL Apple Comp Inc 61.27 -.08 -.1
CSCO Cisco Systems 19.00 -.15 -.8
KMRT Kmart Hldg Cp 104.30 +6.58 +6.7
YHOO Yahoo! Inc 36.40 -.05 -.1
DELL Dell Inc 40.41 +.21 +.5
AMEX CLOSE 1376.15 + 8.75 + .6
INDEX SHARES
DIA DIAMONDS TRUST 104.98 +.18 +.2
QQQ NASDAQ 100 39.02 -.05 -.1
SPY S&P DEP.RECEIPTS 118.20 +.22 +.2
STOCKS IN THE NEWS
DE Deere & Co 70.21 +1.50 +2.2
HNZ H J Heinz Co 37.78 -.61 -1.6
ANF Abercrombie & Fit 46.20 +1.76 +4.0
NWY New York & Co 22.00 +1.86 +9.2
RRC Range Resources 19.91 +2.32 +13.2
DY Dycom Industries 29.80 -4.84 -14.0
WWE World Wresting Ent 12.04 -1.36 -10.2
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