| 12/03/04:
Will Slow Labor Growth Mean The Fed Will Raise Interest Rates
Sooner?
SUSIE GHARIB: A big surprise on the employment front today. Job
growth stumbled in the month of November, with just 112,000 new positions
created. That was well below economists` expectations and about a third of
October`s strong pace. Still, the unemployment rate improved slightly to
5.4 percent. The report renewed debate on whether the Federal Reserve will
refrain from raising interest rates later this month. Scott Gurvey has
more.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: It was a
disappointing employment report for November, a month which is always
difficult to forecast because of the uncertainty of pre-holiday hiring.
Non-farm payrolls increased by 112,000 in the month. Most economists
expected to see at least 200,000 new jobs added. The unemployment rate
dropped 0.1 of 1 percent to 5.4 percent. Reaction on Wall Street was
muted, with some economists focusing on what is still a positive trend and
others observing that the rate of job growth is still not sufficient to
support a long lasting economic recovery.
ROBERT BRUSCA, CHIEF ECONOMIST, FACT AND OPINION ECONOMICS: I don`t think
we should be looking at moving averages of numbers to say well, if you
average the last two months together, they`re still good. I think that if
you take the previous month out of this number, you find that you`ve had a
whole string of really fairly disappointing jobs numbers. Not only was
this a weak number, but they revised the past couple of months lower.
GURVEY: Manufacturing lost 5,000 jobs in the month, the third decline after
small gains earlier in the year. 104,000 jobs were added in the services
sector. Bonds rallied on the news, with Treasuries making their biggest
one-day advance in four months on speculation that the Federal Reserve
might slow its pace of interest rate increases. Still, the markets and
most Fed watchers believe another quarter point rate hike is likely when
the Fed meets December 14.
RICHARD BERNER, CHIEF U.S. ECONOMIST, MORGAN STANLEY: The Fed has made it
pretty clear that they intend to remove accommodation, to tighten monetary
policy at a measured paced. And this is consistent with them moving at a
measured pace. After all, when they tightened back in, at the last
meeting, they didn`t expect to see job growth accelerate perhaps as much as
it did in October.
GURVEY: The Fed will get a report on inflation before it meets next to
review interest rates. The report on producer prices for November is
scheduled for release one week from today. Scott Gurvey, 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.
12/03/04:
Finding Value In A Declining Dollar
PAUL KANGAS: The dollar hit another new low against the euro
again today. The slide against - it slid against most the
other major world currencies as well. The greenback`s descent
is not new, but it has been orderly. Still, as Stephanie Woods
reports, there are growing concerns that could change.
STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Currency
traders have watched the dollar decline for three straight
years. The dollar drop helps U.S. manufacturers sell their
goods cheaply overseas. Importers have seen their profits
squeezed, but so far the weakness of the dollar hasn`t hurt
the stock or bond market.
ALEX BEUZELIN, SENIOR MARKET ANALYST, RUESCH INTERNATIONAL:
To date, the declining dollar has not had any significant
adverse effect on either of those two markets, we haven`t
seen a sustained spike in U.S. Treasury yields and we haven`t
seen any sharp pronounced depreciation in U.S. equities.
WOODS: One of the factors keeping the dollar from a free
fall is the nature of currency markets. For example, here
at Ruesch International, corporate clients buy and sell dollars
mostly to close business transactions, not to speculate in
markets. Traders who do speculate don`t want to get caught
if the dollar turns up. That could happen if the central banks
in Europe or Japan intervene to protect their currencies.
EDWIN TRUMAN, SENIOR FELLOW, INSTITUTE FOR INTERNATIONAL
ECONOMICS: You certainly can`t be sure on a sort of minute
by minute, day by day, even week by week basis. I mean look
at where we were at the beginning of this year. The dollar
was very weak. Everybody was predicting it was going to go
down. It rose through the middle of May on average, end of
May and only recently has it revisited the lows that were
there at the beginning of the year.
WOODS: U.S. administration officials talk up a strong dollar
policy, at the same time saying the markets should set currency
rates. So far, the dollar`s decline has been orderly, but
that can change.
MICHAEL FARR, PRESIDENT, FARR, MILLER & WASHINGTON: This
ultimately I think will be a decision at some point of touch
and feel. This feels bad to some treasurer of some country,
some finance minister in some part of the world, who`s going
to counsel that prime minister, president to hold off and
back off. Let`s slow down the purchases, I`m a little bit
concerned about the U.S.
WOODS: But Farr thinks that scenario for the dollar is unlikely.
Instead he sees the U.S. economy picking up enough steam to
give foreign investors more reason to continue to buy American.
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.
12/03/04:
Thailand's War On Coruption
SUSIE GHARIB: The government of Thailand has begun a major crackdown on
corruption. It`s almost a way of life in the Asian nation and it`s now so
problematic, it`s forcing some businesses out of business. But as Craig
Leeson reports from Bangkok, not everyone in Thailand is convinced the
government can win this war.
CRAIG LEESON, NIGHTLY BUSINESS REPORT CORRESPONDENT: In a city famous for
its nightlife, Chuvit Kamolvisit is recognized as the king of massage
parlors." Here in Bangkok, he has built an empire catering to the after
hours needs of everyone from tourists to tycoons in his licensed palaces of
pleasure. But while business is good, Chivut is selling up, his business
crippled by massive bribes demanded by police.
CHUVIT KAMOLVISIT, DAVIS GROUP: I have been forced to pay the money to
police almost half a million a month.
LEESON: Half a million U.S. dollars?
KAMOLVISIT: Yes half a million U.S.
LEESON: Why?
KAMOLVISIT: Why? If you don`t pay how can you open the massage parlor?
LEESON: A study by Bangkok`s Chulalongkorn University reveals that in 2002,
police pocketed more than $475 million in bribes and it doesn`t stop
there.
Anti-graft activists estimate that in the past decade, state officials and
politicians pocketed more than $300 billion in bribes and kickbacks.
JAKRAPOB PENKAIR, GOVERNMENT SPOKESMAN: So many people even believe that
corruption is a way of life in Thailand and it`s not wrong to pay someone
to do something that you want or to pay someone to give you privileges and
special rights because it has been going on a very long time. We want to
change all that.
LEESON: To combat his critics, Prime Minister Thaksin Shinawatra has
announced a war on corruption. But the move has been greeted with
cynicism. Prime Minister Thaksin`s four year term of office has been
punctuated by a series of high profile campaigns or wars. There has been
the war on poverty, the war on guns and the war on drugs where more than
2,000 people were killed, many at the hands of police.
Corruption is widely seen as endemic in Thai politics and Thaksin`s
detractors say his latest campaign is merely a way of deflecting claims of
corruption against the business dealings of his senior ministers and even
his family. A former professor of economics turned senator has published
evidence of what he calls the policy of corruption by Prime Minister
Thaksin.
CHIRMSAK PINTHONG, SENATOR, BANGKOK: I would say that Thaksin tried to get
away from the spot by saying that we are going to fight the corruption. I
would say this is the gimmick or is a marketing technique to get away with
the corruption.
LEESON: The United States has raised the issue of corruption with the
government of Thailand in negotiations over the Thai-U.S. free trade
agreement.
JUDY BENN, AMERICAN CHAMBER OF COMMERCE: This part of the free trade
agreements are to make sure that when American companies do business here,
that they have due access to sufficient legal systems, judicial systems,
that the laws are strengthened enough to protect the American companies`
interests here in Thailand.
LEESON: Prime Minister Thaksin will defend his government`s record when he
seeks a second term in office at the general elections this coming
January.
Craig Leeson, NIGHTLY BUSINESS REPORT, Bangkok.
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.
12/03/04:
"Market Monitor"- Michael O`Higgins, president of O`Higgins Asset Management
PAUL KANGAS: My guest "market monitor" this week is Michael O`Higgins, president
of O`Higgins Asset Management. Welcome back to NIGHTLY BUSINESS REPORT.
MICHAEL O`HIGGINS, PRES., O`HIGGINS ASSET MANAGEMENT: Thank you.
KANGAS: Michael, you`ve recently changed from a very cautious stance on
stocks to an optimistic strategy. What factors are behind this change?
O`HIGGINS: Principally the fact that interest rates have come down enough
and earnings have come up enough so the stocks are actually cheaper than
bonds for the first time since 1981.
KANGAS: Not as much competition then.
O`HIGGINS: Exactly right.
KANGAS: You were very bullish on gold stocks and they served you well. Are
you still with them or are you backing away?
O`HIGGINS: Not really. The gold stocks are acting poorly. They`re actually
down so far this year, in spite of gold being up about 10 percent and the
sentiment on gold is a little bit too optimistic. So I think we are going
to have something like we had from `74 to `76, where you had like a 40
percent decline in the price of gold after it was legalized at the end of
`74.
KANGAS: So you are no longer that bullish on gold. You`re not bearish but
just not very bullish anymore.
O`HIGGINS: Gold is still cheap relative to paper but I think it`s a little
ahead of itself and due for a correction.
KANGAS: OK now the last time you were with us in April, you recommended the
index shares representing a number of foreign economies. Let`s have a look
and see how they fared. Your I shares in Brazil up 31 1/3 percent. That
was a great move there and the Germany index shares up 16 percent. You`re
hitting on both burners there. Let`s have a look at -- you have five of
them all told. Templeton not so well there, down 7.4 percent and then the
Singapore I shares up nearly 14 percent and there was one other, I believe
that was South Korea down just a small fraction. Pretty good lineup there
and I congratulate you on some good calls. Are you still with all of
those?
O`HIGGINS: No, I would say today I would substitute for Singapore and South
Korea, I would substitute Malaysia and the Netherlands, both of which have
I shares.
KANGAS: And you own them?
O`HIGGINS: Yes. I own them all personally.
KANGAS: OK. Now let`s get back to the reasoning behind your turning
somewhat bullish on the stock market here. Give us some other reasons. I
understand you like the number five as in 2005.
O`HIGGINS: It`s interesting that looking into next year, if you look
historically, years ending in five have had spectacular performance going
back to 1895. They`ve given just without dividends, even without
dividends, about 28 percent a year verses 4.8 percent for the Dow itself,
so about six times the return.
KANGAS: This is not a real fundamental fact.
O`HIGGINS: No. There is no explaining it but it`s quite impressive.
KANGAS: All right. Well, if it works, it works. You got to stay with it,
right?
O`HIGGINS: Absolutely.
KANGAS: Let`s have a look at some of the stocks you`re recommending. What
do you like in the way of stocks here?
O`HIGGINS: Well, as you know, I wrote the book on the dogs of the Dow.
KANGAS: Back in `91. I remember it well.
O`HIGGINS: And those are the stocks that I would buy today. They would be
General Electric, General Motors.
KANGAS: Wait a minute. Let`s have a look at the charts on each one of
these. Let`s start with GE. It`s had quite a rise actually.
O`HIGGINS: It has but it`s still down dramatically from its high in 2000.
It`s down about 40 some odd percent.
KANGAS: And it does pay a little bit of a dividend.
O`HIGGINS: It pays about what, 3 1/2 percent.
KANGAS: About 2.2 as of tonight`s close in any case. All right. Moving
right along, what other dog in the Dow do you like?
O`HIGGINS: General Motors which again is down dramatically, selling at five
times earnings.
KANGAS: This chart is just almost the reverse of GE`s.
O`HIGGINS: A big dividend, also. The next one would be JPMorgan Chase.
KANGAS: OK. The financial sector you do like.
O`HIGGINS: Well, it`s really the dividend. As you know, the dogs of the
Dow is strictly about dividends.
KANGAS: Right, 3 1/2 percent yield there. OK, let`s have a look at one
more.
O`HIGGINS: Merck, which as you read in the papers, I mean they`re getting
hammered but the stock is down 70 percent.
KANGAS: Buy them when they`re weak.
O`HIGGINS: Buy when they`re cold as John Neff would say.
KANGAS: Buy straw hats in January, in other words and do you have another
one?
O`HIGGINS: And the last one is SBC Communications. Of course, those stocks
have all been hit, too and it`s very cheap, has a big dividend. On
balance, these stocks are down even with the big market rally from October
of 02, they`re still down over 50 percent from their highs in 2000, whereas
the Dow itself is down less than 10 percent from its high.
KANGAS: So that makes them dogs in the Dow, doesn`t it? Do you own all of
these stocks that you just recommended
O`HIGGINS: I own them all personally.
KANGAS: You put your money where your mouth is.
O`HIGGINS: Absolutely, for better, for worse.
KANGAS: All right, very good. Michael, thanks so much for being with us
again.
O`HIGGINS: Thank you, Paul.
KANGAS: My guest market monitor, Michael O`Higgins, president of O`Higgins
Asset 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.
12/03/04:
"Last Word"-The Great CEO Gamble
SUSIE GHARIB:And finally tonight, it`s a sure bet that sooner or later, a big corporate
CEO is going to be fired. Now in Canada, you can bet on that, quite
literally. The British online wagering service called Betfair has started
up a Canadian CEO market. The idea is to let people gamble on whether 10
selected corporate leaders will stay on the job past April of next year.
The CEO`s are from companies like Nortel, Bombardier and Air Canada. In
fact, nine of the 10 CEO`s head up firms traded on the Toronto Stock
Exchange, Paul, which as you know, is Canada`s largest equity market.
KANGAS: You know Susie, as if chief executives don`t have enough problems.
Now they`re being traded like commodities in the futures market.
GHARIB: Some of them are becoming commodities.
KANGAS: What next?
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.
12/03/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS: Stocks headed higher early today as investors focused on that drop
in oil prices and Intel`s upbeat outlook we told you about yesterday. The
Dow rose 45 points at the outset while the NASDAQ jumped 20. Then the
market faded as the focus shifted to that mediocre jobs report. So by
early afternoon, the Dow was down 10 points and NASDAQ up only four
points.
Then seasonal demand for stocks helped them close with small gains. The Dow
Industrial Average ended 7 points higher at 10592.21 and the Dow rose twice
and fell three times this week, still had a net gain of almost 70 points.
The NASDAQ Composite gained 4.39 today, ending at 2147.96. It fell twice
and rose three times this week for a net gain of nearly 46 points.
The Standard & Poor`s 500 Index advanced a fraction today, closing at
1191.17. Over in the bond market, the 10-year note rose 1 9/32, pushing
the yield all the way down to 4.26 percent.
Big board volume leader as it so often is, Pfizer (PFE) traded 27.1 million
shares today and lost $0.57.
Followed by Lucent Technologies (LU) with a $0.10 drop.
Time Warner (TWX) $.18 loss there.
Qwest Communications (Q) moved up a dime a share, even though the Morgan
Keegan brokerage downgraded it from "market perform" to "under perform" on
a valuation basis.
Solectron (SLR), fifth in volume, was down $0.06 a share.
And then Freescale Semiconductor (FSL), the spin off of that company by
Motorola (MOT) was completed yesterday and Motorola today actually moved up
$0.25.
NorTel Networks (NT) $0.07 loss there.
EMC Corporation (EMC) a nickel loss.
Tenth in volume was General Electric (GE) with an $0.11 loss.
IBM (IBM) did well, up $1.32. The "New York Times" reported the company
may put its personal computer business up for sale and it could fetch
anywhere from $1 to $2 billion. IBM had no comment on that report.
Another Dow stock, Procter & Gamble (PG) losing $0.43 because the FDA of
course rejected its female testosterone patch because of a lack of data on
its long-term safety.
Quanex (NX) up $2.05. The company announced a 3 for 2 stock split today and
it said it will also boost its tax dividend by 6 1/2 percent. Yesterday,
the company reported fourth quarter earnings of $1.17, was up from $0.78 a
year ago. And then today the Baird brokerage repeated an "outperform"
rating on Quanex.
Knight-Ridder (KRI), the big newspaper publisher, down $1.25 after the
JPMorgan Chase brokerage downgraded it from "overweight" to just a
"neutral" rating.
And Target (TGT) $0.70 loss there. Lazard and Smith Barney brokerages both
downgraded it from "buy" to "hold." Analysts at the brokerages are
concerned that the first half of next year looks challenging for the
company.
Peabody Energy (BTU) led the coal stocks higher after a sell of yesterday,
doing very well today, up $3.64. Let`s have a look at some other coal
stocks.
Arch Coal (ACI) gained $1.39.
And Massey Energy (MEE) a rise of $1.48, nice move there.
MGM Mirage (MGG) up $2.84. The company is considering the sale of its MGM
Grand Detroit casino and keeping its stake in Motor City casino in Detroit.
It has to sell one or the other as part of its pending merger with
Mandalay.
Volume leader on NASDAQ, the NASDAQ 100 (QQQ). It`s the tracking stock for
that index, up $0.06.
Intel (INTC) $1.20 gainer. After the close yesterday, the company boosted
its revenue outlook for the rest of the year as we reported.
Microsoft (MSFT) $0.14 gain.
Apple Computer (AAPL) down $2.53. Needham & Company brokerage downgraded
Apple from a "buy" to a "hold" on a valuation basis, had quite a rise as
you know.
Up $0.23 on Cisco Systems (CSCO), fifth in dollar volume.
eBay (EBAY) down $0.57.
Google (GOOG) gained $1.
Sirius Satellite (SIRI) continues to rise, up $0.29.
$0.39 gain in Applied Materials (AMAT).
And Oracle (ORCL) an $0.08 gainer, was tenth in big board volume.
And speaking of gainers, Biomira (BIOM) shooting up $1.75. that`s a rise of
114 1/3 percent. The news, late stage trials of the company`s lung cancer
vaccine showed much improved survival rates in over half of the patients
given the vaccine.
Those are our 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.
12/03/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10592.21 +7.09 + .1
HIGH 10643.05
LOW 10560.58
NASDAQ COMP. 2147.96 +4.39 +.2
HIGH 2164.63
LOW 2145.72
VOLUME 1,562.5
PREVIOUS 1,772.5
UP VOLUME 854.9
DOWN VOLUME 680.7
DOW TRANSPORTS 3726.74 -3.20 - .1
DOW UTILITIES 319.68 +2.10 + .7
CLOSING TICK +770
S&P 500 1191.17 +.84 + .1
S&P 100 567.08 +.63 + .1
MIDCAP 400 644.83 +1.76 + .3
REUTERS/CRB 284.40 +.55 + .2
NYSE COMPOSITE 7092.62 +17.80 + .3
VALUE LINE 395.45 +.27 + .1
RUSSELL 2000 642.21 -.30 - .1
DJW 5000 11735.27 +10.92 + .1
U.S. TREASURIES
5-YEAR NOTE 3.50%
Nov. 15,2009 99 18/32 +23/32 + 3.60
10-YEAR NOTE 4.25%
Nov. 15,2014 99 31/32 +1 9/32 + 4.26
30-YEAR NOTE 5.375%
Feb. 15, 2031 106 16/32 +2 2/32 + 4.93
LEHMAN BROS.
LONG BOND INDEX 1734.66 +10.64
DOW CLOSE 10592.21 +7.09 + .1
ADVANCES 2093
DECLINES 1234
NEW HIGHS 495
NEW LOWS 18
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 27.89 -.57 -2.0
LU Lucent Tech 3.87 -.10 -2.5
TWX Time Warner 18.05 -.18 -1.0
Q Qwest Comms Intl 4.30 +.10 +2.4
SLR Solectron 6.50 -.06 -.9
FSL Freescale Semi 17.81 -.12 -.7
MOT Motorola 17.85 +.25 +1.4
NT Nortel Networks 3.69 -.07 -1.9
EMC EMC Corp 14.39 -.05 -.4
GE GE 35.83 -.11 -.3
NASDAQ CLOSE 2147.96 + 4.39 + .2
VOLUME 2,431.4
PREVIOUS 2,420.8
ADVANCES 1468
DECLINES 1644
NASDAQ ACTIVES
QQQQ Nasdaq 100 40.13 +.06 +.2
INTC Intel 23.91 +1.20 +5.3
MSFT Microsoft 27.23 +.14 +.5
AAPL Apple Computer 62.68 -2.53 -3.9
CSCO Cisco Systems 19.43 +.23 +1.2
EBAY eBay 116.41 -.57 -.5
GOOG Google 180.40 +1.00 +.6
SIRI Sirius Satellite 7.55 +.29 +4.0
AMAT Applied Matl 17.89 +.39 +2.2
ORCL Oracle 13.03 +.08 +.6
AMEX CLOSE 1415.58 + 12.73 + .9
INDEX SHARES
DIA DIAMONDS TRUST 105.66 -.22 -.2
QQQ NASDAQ 100 40.13 +.06 +.2
SPY S&P DEP.RECEIPTS 119.21 -.12 -.1
STOCKS IN THE NEWS
IBM IBM 97.08 +1.32 +1.4
PG Procter & Gamble 55.39 -.43 -.8
NX Quanex 60.92 +2.05 +3.5
KRI Knight Ridder 66.77 -1.25 -1.8
TGT Target 51.70 -.70 -1.3
BTU Peabody Energy 79.15 +3.64 +4.8
ACI Arch Coal 36.00 +1.39 +4.0
MEE Massey Energy 34.05 +1.48 +4.5
MGG MGM Mirage 63.54 +2.84 +4.7
BIOM Biomira 3.28 +1.75 +114.4
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