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11/29/04:
Black Friday Is Giving Walmart The Blues
SUSIE GHARIB: On Wall Street today, investors were preoccupied
with holiday sales. The Dow lost 46 points but the NASDAQ gained almost
five. Weighing on the blue chips, comments from Wal-Mart that November
sales would be disappointing. But the mood was merrier at most of the
nation`s other big retailers. The National Retail Federation reported
strong spending over the important Thanksgiving weekend. Erika Miller
reports.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Many retailers saw a
mad rush of shoppers over the weekend as the holiday season got off to a
strong start. Visa reported spending on its cards Friday and Saturday rose
14 percent compared to last year. Chains like Sears and JC Penney saw huge
turnout over the weekend, although both remain cautious about overall
holiday sales. The big surprise came from Wal-Mart, which says holiday
sales are off to a weak start. The industry leader warns that November
same store sales growth will be about 0.7 percent, far less than its
previous forecast of 2 to 4 percent. Analysts say a few factors are to
blame.
CHRISTINE AUGUSTINE, RETAIL ANALYST, BEAR STEARNS: One is that the lower
income households are still stretched. I think that`s a major factor. I
think number two, the promotional environment is fairly rational, so there
aren`t the really great deals that you saw in years past from Wal-Mart.
MILLER: Wal-Mart has done business with Bear Stearns in the past year.
Wal-Mart`s cautious outlook weighed on most retail stocks today. But a few
online merchants, like overstock.com, bucked the trend. The Monday after
Thanksgiving has historically been the busiest day of the year for Internet
retailers, with consumers shopping from high speed connections at the
office. Whether they are sold online or in a store, consumer electronics
are expected to be hot sellers.
ALAN RIFKIN, RETAIL ANALYST, LEHMAN BROTHERS: The sector that continues
to really be a standout on the positive side is consumer electronics.
These are the must have items this holiday season, whether it`s a DVD
player, a digital TV, a digital camera, digital camcorder, an iPod-- this
is the first, second and third on most people`s wish lists.
MILLER: It`s still early in the season. But most retail analysts predict
holiday spending growth will not be as strong as last year when consumers
enjoyed the benefits of tax rebate checks.
AUGUSTINE: Overall, we`re forecasting a 3 to 4 percent increase for retail
sales for the November/December period. And that compares to about 5
percent last year.
MILLER: A clearer picture of how retailers fared Thanksgiving weekend will
come on Thursday. That`s when the nation`s retailers will report their
sales figures for November. Erika Miller, NIGHTLY BUSINESS REPORT, New
York.
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.
11/29/04:
President Bush Rebuilds His Cabinet With A Commerce Secretary
Pick
PAUL KANGAS: President Bush has begun lining up the key players
in his economic game plan for his second term in office. Today
he selected the chief executive officer of Kellogg to head
up the Commerce Department. But as Stephanie Woods reports,
some observers think the president should change the game
plan and not the players.
STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT:
President Bush`s choice for Commerce secretary, Carlos Gutierrez
immigrated from Cuba when he was six and worked his way up
from truck driver to CEO of Kellogg.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He is a
great American success story.
WOODS: Gutierrez says he shares the president`s goals on
free trade, tort reform, and tax reform.
CARLOS GUTIERREZ, COMMERCE SECRETARY NOMINEE: I believe
passionately in your leadership and the direction you`ve set.
WOODS: Gutierrez is the first appointment in what is expected
to be a sweeping change in the president`s economic team.
Chief economic advisor Stephen Friedman has already announced
he`s leaving. The head of the Council of Economic Advisors
Greg Mankiw (ph) is also expected to depart. And there is
widespread speculation that the president will ask Treasury
Secretary John Snow to step down. A Treasury spokesman says
the secretary has indicated he has no plans to move on, and
Snow considers it an honor and a privilege to serve the president.
Some observers say Mr. Bush needs a team that will serve him
better.
WILLIAM NISKANEN, CHAIRMAN, CATO INSTITUTE: I think basically
the president wants good economic advice, unvarnished economic
advice, but to the world it takes a rather more sophisticated
skill to sell an idea. The president himself has not been
all that effective in (INAUDIBLE).
WOODS: But critics say it`s not the people, but the policies
of tax cuts and unrestrained spending that need to change.
BRUCE BARTLETT, SENIOR FELLOW, NATIONAL CENTER FOR POLICY
ANALYSIS: I think he has got a perfectly fine economic team,
but perhaps they are not telling him what he wants to hear
and what he really wants is some new economist who will tell
him what he wants to hear.
WOODS: That may be one reason why financial markets are
already focusing on a replacement that`s more than a year
away, that of Federal Reserve Board Chairman Alan Greenspan,
whose term expires January 31, 2006.
ALICE RIVLIN, ECONOMIST, BROOKINGS INSTITUTION: It will
take a, I think a very good economist, but a very flexible
person, and Greenspan is that. He`s not an ideologue on monetary
policy.
WOODS: Experts say the second term economic team will face
a greater challenge than the first. That`s because the tax
and spend policies of the last four years have created huge
budget deficits that have to be dealt with. 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.
11/29/04:
One On One With,Vince Farrell, chairman of Victory Capital
Management
SUSIE GHARIB: Our market guest tonight says this could be
a nervous week for investors. Joining us now, Vince Farrell,
chairman of Victory Capital Management, the New York money
management firm. Hi, Vince.
VINCE FARRELL, CHAIRMAN, VICTORY CAPITAL MANAGEMENT: Hi, Susie.
GHARIB: All right. So tell us why investors are going to be edgy this
week.
FARRELL: I think the big number comes out Friday with the jobs report and
it was very large last month. It was the first time we`ve had a large one.
So you`re really kind of hanging on a fingernail here because Wal-Mart
disappointed you with its forecast for lower sales and you want some
confidence with this number Friday that jobs are being created. Therefore
incomes are created and that sales will be OK in the future.
GHARIB: What is your prediction?
FARRELL: I`ll take the over if there`s an over/under bet because I think
corporate profits have been very strong and worker productivity, while
still growing is down a little bit so you have the means, that is the
corporate profits and you have the need, that is the lower worker
productivity to create some jobs. I think there`s going to be a good
number but that`s a guess and if it is a good number, the market will greet
it with great cheer but a bad number is going to cause the market to sell-
off, in my opinion.
GHARIB: As you look ahead to the next couple of weeks, to the end of this
year, what is going to be the focus that is going to impact trading? Is it
going to be oil prices higher or lower? Is it going to be interest rates?
Is it going to be the weak dollar? What do you see as the trigger for
trading?
FARRELL: All of those, I put the high oil prices as on the side because I
think with inventories being built despite the Gulf of Mexico production
being cut, oil prices are likely to be well behaved. Rising interest rates
is not necessarily a bad sign for the economy. It might be a sign that the
economy is growing. Since we are coming off very low rates, that`s OK.
The dollar worries me because while it is very low in order to help
exports, if the dollar were to precipitously decline a lot, that could
really create havoc with dollar denominated assets like stocks and bonds.
Foreigners that own dollars might not want to own stocks and bonds and you
might get an acceleration on the downside. That`s not a prediction but
it`s definitely a worry for the next few weeks and months.
GHARIB: And what about oil prices? What if they go up?
FARRELL: That would really put a crimp in the plans for a good economy.
Wal-Mart said sometime ago that the average customer they have is short $8
a week out of their pay envelope because of rising oil prices, gasoline
prices. Twenty-five of their customers do not have checking accounts. So
if you take the oil prices up to 60 or 70, you really start to impact in a
very dramatic way that level of economic strata in American society and
that could really take the underpinnings out from a good Christmas. I
don`t think it`s going to happen but that`s definitely something that
you`ve got to be worried about if it were to happen.
GHARIB: Let`s talk a little bit about your forecast for 2005. You were one
of our guests on January 1, 2004 and you gave your prediction for this
year. You were pretty much on target and so we thank you for that. Give
us your outlook for 2005.
FARRELL: My outlook for this year had been pure vanilla. I said they were
going to have a single digit rise in the market plus whatever the dividends
gave you and so far that`s been right. The S&P with dividends up about 8
percent so far this year. I think we are around fair value on the market,
taking a look at what expected earnings are going to be, the appropriate
multiple for the inflation environment we have around 1200 on the S&P is
fair value and I think earnings in 2005 are going to be good. They`re going
to grow at a solid single digit rate. I think dividend payments are going
to escalate because the tax law favors such. So I think for 2005, you are
going to again have a very solid single digit total return, maybe low
double digits and that`s taking into account the fear that we have about
rising oil prices, rising interest rates, etcetera. If all of those stay
within the bounds of where they`ve been, we should have a pretty good 2005.
If the dollar falls off a cliff, which is not a prediction, I don`t think
you are going to have a very good stock market in `05 because people,
Europeans will abandon assets.
GHARIB: We`re going to have to leave it there but we like the positive
outlook. Thanks a lot Vince.
FARRELL: Thanks Susie.
GHARIB: We appreciate your coming on. We`ve been speaking
with Vince Farrell, chairman of Victory Capital Management.
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.
11/29/04:
China's Middle Class Takes Root
SUSIE GHARIB: There`s a sea change in the works in China.
It`s steadily developing a middle class, something unheard
of only a few decades ago. The economic and social implication
of the move will shape China`s future and help define its
role on the world stage. Tonight, the first of two reports
looking at China`s growing middle class. From Beijing, Steve
Nettleton reports.
STEVE NETTLETON, NIGHTLY BUSINESS REPORT CORRESPONDENT:
Wang Xin and his wife Fang Ying (ph) are getting ready to
move into their new home. Construction is nearly finished
on the Beijing apartment they bought a year ago; now they`re
choosing the furnishings. Many Chinese consider owning an
apartment a rite of passage to the middle class. For Wang
Xin, a founding partner in an architectural design firm, it`s
the profit of a self-made career. When he left his home province
of Inner Mongolia 10 years ago to attend university in Beijing,
China`s economic reforms were only picking up steam. The idea
of opening up his own business had never occurred to him.
TRANSLATION OF: WANG XIN, ARCHITECT: Life was hard for us
he says. We were not native Beijingers and had to work hard
and study for better opportunities. I chose to run my own
company after graduation and it took longer to join the middle
class. But whoever works hard and has a good education can
live a wealthy life like we do.
NETTLETON: Wang Xin is part of an emerging sector in Chinese
society, an increasingly confident and influential middle
class. A study in late 2003 by BNP Paribas Peregrine found
that 120 to 150 million Chinese now belong to the middle class.
It included households that earned more than $9,000 U.S. a
year. The figure is relatively low compared to the United
States or Europe. Only 10 to 12 percent of the population,
but it`s rising rapidly.
CHEN XINGDONG, CHIEF ECONOMIST/CHINA, BNP PARIBAS PEREGRINE:
It`s possible to see that if GDP grows about say 8 to 10 percent,
the rich people or the middle class may gross annually something
like 10 to 12 percent and you will see in the next 10 years,
(INAUDIBLE) 10 years, seven years, it`s going to be doubled
for this number.
NETTLETON: The Chinese government sees an even larger middle
class. A recent survey by the Chinese Academy of Social Sciences
estimated that the middle class has swelled 1 percent every
year since 1999 and is now closing in on 20 percent of the
population. It`s a striking turnaround for a government where
the idea of a middle class was taboo as recently as 15 years
ago. But while China has come to embrace the middle class,
few Chinese have a clear idea just who belongs in it. The
middle class should at least have a house and car, a career
and a savings of several million he says. I think in Beijing
the middle class should have their own company and earn more
than $1,200 per month.
TRANSLATION OF: JASON HO, SECRETARY GENERAL, CHINA MARKETING
RESEARCH ASSOCIATION: The gap between the wealthy and the
poor is apparent in China he says. So a person with one million
in assets won`t admit he`s wealthy enough to be in the middle
class, because the wealthy in China are rich beyond imagination.
NETTLETON: Though definitions may differ, most researchers
agree the middle class is a growing force in Chinese society.
What remains unclear is just how much this group will power
the economy and what change it will bring to the political
climate. Steve Nettleton, NIGHTLY BUSINESS REPORT, Beijing.
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.
11/29/04:
Commentary -- Why Social Security Should Not Be Privatized
GHARIB: Social Security
reform is high on the list of President Bush`s priorities
for his second term. But tonight`s commentator doesn`t think
privatizing the system should be on that list at all. Here`s
Alan Blinder, partner in the Promontory Financial Group and
former vice chair of the Federal Reserve.
ALAN BLINDER, PARTNER,
PROMONTORY FINANCIAL GROUP: It`s quite appropriate to have
a national debate on Social Security now. And it appears that
this debate may start soon because the president wants to
partially privatize the system. It`s not a crazy idea. After
all, Social Security is a retirement program, and lots of
retirement plans are run privately. So why not privatize Social
Security? There are many reasons but I want to raise one issue
that seems to have been virtually ignored so far. Simply put,
Social Security is a redistributive program: low-wage earners
receive higher rates of return on their Social Security contributions
than do high-wage earners. In large measure, this feature
just makes up for the fact that poorer people die younger,
making annuities less valuable to them. To compensate, money
"deposited" into a Social Security account must earn more
if you make $20,000 a year than if you make $100,000. My point
is that no private plan works like that. Think about your
IRA or 401(k), for example. The returns per dollar invested
do not depend on your income. Rather, every dollar earns exactly
the same return. That must be so with a private company. If
a socially-conscious mutual fund tried to pay lower returns
to richer people, the rich would simply take their money elsewhere.
So there really is something different, something social about
Social Security. It may be the most effective redistributive
program our country has ever had and that`s not something
you can privatize. I`m Alan Blinder.
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.
11/26/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS: Wall Street opened slightly higher on those
indications the holiday shopping season is off to a good start.
But by noon, the cut in Wal-Mart`s sales projections and a
bond sell off triggered by a falling dollar sent the Dow down
95 points and NASDAQ was off 10. The tech stocks led an afternoon
comeback but it was blunted somewhat by higher oil prices.
So the Dow industrial average cuts its loss to 46 1/3 points
at 10,475.90. The NASDAQ Composite actually gained nearly
5 points at 2106.87. Standard & Poor`s 500 down 4 points at
1178.57. Also hurting bond prices, rumors the Treasury might
revive the 30-year to fund Social Security reform. The 10-
year note today fell 24/32, boosting the yield to a four-month
high of 4.33 percent.
Big board volume leader as it so often is, Pfizer (PFE)
today trading 23.2 million shares, edging $0.17 higher.
Then Wal-Mart (WMT) down $2.17 on that revenue estimate
cut. That loss of $2.17 hurt the Dow industrial average by
about 16 points and also Oppenheimer brokerage downgraded
the stock from "buy" to "neutral" today.
General Electric (GE) $0.16 loss there.
NorTel Networks (NT) moved up $0.04
Lucent Technologies (LU) was down or up a penny a share.
Calpine (CPN) gained $0.07.
Citigroup (C) $0.46 loss there.
Time Warner (TWX) $0.19 drop.
But Motorola (MOT) moved up $0.44.
And tenth in volume, Merck & Company (MRK) a $0.03 drop.
The company adopted a severance benefits plan aimed at protecting
key managers in the event of a takeover.
IBM (IBM) moved up $0.78. The company, along with Toshiba
and Sony are jointly planning to manufacture an advanced microprocessor
chip called the cell. It could Intel some tough competition.
DuPont (DD) down $0.13 a share. Prudential downgraded the
stock from "neutral" to "under weight" because of higher material
costs and Pru did the same thing with Rohm & Haas, which dropped
$0.84 a share incidentally.
D.R. Horton (DHI) the home builder, was down $0.90, traded
as low as $34.15. Home builders stock of course down on fear
that the weak dollar will push interest rates a lot higher
and bonds as you know were down sharply today.
Let`s have a look at some other stocks in the home building
sector. Beazer Homes (BZH) off nearly 4 1/2.
Centex Corporation (CTX) down just over 2.
$1.62 loss in Hovnanian Enterprises (HOV).
KB Home (KBH) $3.10 loss.
And Lennar (LEN) off $1.54, kind of a rough day for that
group.
Sears (S) fell $1.88 after the company issued a cautious
holiday outlook despite strong Thanksgiving turnout at its
stores.
Countrywide Financial (CFC) moved up $0.88. Morgan Stanley
upgraded it from "equal weight" to "over weight."
And Kinetic Concepts (KCI) up $2.97. Merrill Lynch added
it to the focus list and boosted earnings estimates on optimism
about the company`s wound treatment technology. Merrill set
a 12-month target price on this stock of $80 a share.
And finally, St. Joe Company (JOE) a major land holder in
Florida, was downgraded by Wachovia Securities from "outperform"
to just "market perform." It`s had quite a rise as you can
see.
Apple Computer (AAPL) topped the active list, up $3.89.
In addition to Merrill and UBS boosting price target, so did
Bank America today, from $47 to $73 a share.
Google (GOOG) up $1.66. American Technology Partners, a
recent bearish firm on the stock, turned bullish today.
Microsoft (MSFT) $0.17 gain.
Intel (INTC) down $0.15.
Sirius Satellite Radio (SIRI) edge up $0.18 a share.
Then Cisco Systems (CSCO) $0.29 loss.
eBay (EBAY) moved up $1.15.
TASER International (TASR) was up $3.92. The company is
now turning its attention to the consumer market for its stun
guns.
Yahoo! (YHOO) $0.31 gain there.
Research In Motion (RIMM), tenth in volume on NASDAQ, down
$1.03.
China Automotive Systems (CAAS) up $8.38. That just about
doubled. The story here is the company has been selected by
General Motors to provide all of GM`s steering pumps in the
joint venture they have in China.
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.
11/29/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10475.90 -46.33 - .4
HIGH 10557.41
LOW 10417.08
NASDAQ COMP. 2106.87 +4.90 +.2
HIGH 2117.89
LOW 2090.35
VOLUME 1,378.1
PREVIOUS 504.4
UP VOLUME 571.5
DOWN VOLUME 791.3
DOW TRANSPORTS 3650.13 +2.14 + .1
DOW UTILITIES 330.52 -3.06 - .9
CLOSING TICK +742
S&P 500 1178.57 -4.08 - .3
S&P 100 560.15 -2.50 - .4
MIDCAP 400 639.03 -1.40 - .2
REUTERS/CRB 291.10 -.07 - .0
NYSE COMPOSITE 7032.23 -14.46 - .2
VALUE LINE 391.43 +.24 + .1
RUSSELL 2000 634.46 +3.30 + .5
DJW 5000 11609.80 -25.84 - .2
U.S. TREASURIES
5-YEAR NOTE 3.375%
Oct. 15,2009 99 3/32 -10/32 + 3.71
10-YEAR NOTE 4.25%
Aug. 15,2014 99 13/32 -24/32 + 4.33
30-YEAR NOTE 5.375%
Feb. 15, 2031 105 30/32 -1 8/32 + 4.97
LEHMAN BROS.
LONG BOND INDEX 1737.20 -21.00
DOW CLOSE 10475.90 -46.33 - .4
ADVANCES 1456
DECLINES 1905
NEW HIGHS 400
NEW LOWS 9
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 27.33 +.17 +.6
WMT Wal-Mart Stores 53.15 -2.17 -3.9
GE GE 35.30 -.16 -.5
NT Nortel Networks 3.42 +.04 +1.2
LU Lucent Tech 3.99 +.01 +.3
CPN Calpine 3.64 +.07 +2.0
C Citigroup 44.96 -.46 -1.0
TWX Time Warner 17.82 -.19 -1.1
MOT Motorola 19.44 +.44 +2.3
MRK Merck & Co 27.67 -.03 -.1
NASDAQ CLOSE 2106.87 + 4.90 + .2
VOLUME 1,852.7
PREVIOUS 673.8
ADVANCES 1791
DECLINES 1347
NASDAQ ACTIVES
AAPL Apple Computer 68.44 +3.89 +6.0
GOOG Google 181.05 +1.66 +.9
MSFT Microsoft 26.77 +.17 +.6
INTC Intel 23.06 -.15 -.7
SIRI Sirius Satellite 6.69 +.18 +2.8
CSCO Cisco Systems 18.94 -.29 -1.5
EBAY eBay 112.65 +1.15 +1.0
TASR Taser Intl 50.92 +3.92 +8.3
YHOO Yahoo! 38.12 +.31 +.8
RIMM Rsch In Motion 86.93 -1.03 -1.2
AMEX CLOSE 1408.78 + 1.64 + .1
INDEX SHARES
DIA DIAMONDS TRUST 104.47 -.45 -.4
QQQ NASDAQ 100 39.19 +.02 +.1
SPY S&P DEP.RECEIPTS 117.83 -.47 -.4
STOCKS IN THE NEWS
IBM IBM 95.50 +.78 +.8
DD Du Pont Co 45.33 -.13 -.3
DHI D.R. Horton 35.21 -.90 -2.5
BZH Beazer Homes 123.43 -4.49 -3.5
CTX Centex 51.89 -2.06 -3.8
HOV Hovnanian Enterp 40.32 -1.62 -3.9
KBH KB Home 88.31 -3.10 -3.4
LEN Lennar 45.15 -1.54 -3.3
S Sears 52.42 -1.88 -3.5
CFC Countrywide Fncl 32.93 +.88 +2.8
KCI Kinetic Concepts 64.22 +2.97 +4.9
JOE The St Joe Co 54.80 -1.54 -2.7
CAAS China Automotive 15.88 +8.38 +111.7
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