11/22/05: All That Glitters Is Gold At The NY Mercantile
SUSIE GHARIB: Stocks on Wall Street finished higher again
today on indications that Federal Reserve policy makers might be close to
ending their rate raising campaign. The Dow gained 51 points and the
NASDAQ added 11. Virtually all of that gain came after the 2:00 p.m.
release of the minutes from the Fed`s meeting earlier this month. Those
minutes showed policy makers are still worried about high energy cost, but
also worried that tightening too far could be risky as well. Meanwhile the
recent rally in stocks hasn`t slowed down the big rise in the price of
precious metals. In New York trading, gold closed at a fresh 18-year high,
up $3.40 to nearly $493 an ounce. Erika Miller has more on why precious
metals are shining bright these days.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: A gold rush has
hit the New York Mercantile Exchange. In the last few days, the price of
the precious metal has flirted with $500 an ounce. That`s the highest
level in 18 years. Some experts predict the yellow metal could eventually
surpass its all-time high of $850 an ounce, hit in early 1980.
JOHN HATHAWAY, PORTFOLIO MANAGER, TOCQUEVILLE GOLD FUND: We could see
$1,000 in this before this is all over. With oil at $50, copper at $1.80,
gold really is lagging even at $500.
MILLER: Hathaway says gold is gaining popularity because it is a safe
haven during turbulent times.
HATHAWAY: Gold is financial insurance. And it tends to do well when
people are worried about something. And we don`t need to go into the list
of worries, because there is a long list.
MILLER: Among those worries, geopolitical turmoil, rising inflation,
as well as uncertainty about the economy. Many gold traders say weakness
in the U.S. dollar has also made the precious metal more attractive to
overseas investors.
KEVIN GRADY, SR. METALS TRADER, REFCO: Gold has become a currency.
So, gold and European dollars, is very, very cheap. So it is an asset that
the Europeans are buying. And they are buying a lot of it.
MILLER: In addition, central banks in Russia, South Africa, and
Argentina, have all said they may boost their gold reserves. But not
everyone thinks gold is headed to a thousand dollars an ounce. History
shows gold tends to perform best during serious inflation scares, something
the U.S. is not currently facing.
GEOFF STANLEY, SENIOR GOLD ANALYST, BMO NESBITT BURNS: We`re actually
seeing the gold market telling us there is more concern out there regarding
issues such as inflation than the equities market is suggesting. So, you
know, which market is going to be right I suppose is the question that we
have to answer at the end of the day.
MILLER: Plus, a recovery in stocks tends to temper enthusiasm for
defensive investments like gold. But gold bugs say the metal is also in
great physical demand worldwide because of its industrial applications.
That would help explain why many base metals have also soared to multi-year
highs. Copper is at its highest levels since the contract began trading 17
years ago. Platinum is near a 26-year high. Aluminum is touching levels
not seen in a decade. And zinc is hovering at an eight year high.
STANLEY: It`s growth from China and India on the margin that has
supplied a lot of the extreme pricing that we`ve seen in some of the
commodities. In the precious metals markets themselves - in gold in
particular-- less extreme.
MILLER: And don`t forget the holidays are fast approaching. Experts
say seasonal demand for gold jewelry could also help support the
commodity`s price short term. 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) 2005 Community Television Foundation of South Florida,
Inc. ALL RIGHTS RESERVED. Terms of use.
11/22/05: One On One With Chris Varvares, President of Macroeconomic Advisers
SUSIE GHARIB: A new survey of economists suggests Americans could see
inflation growing faster than expected by the end of the year. The survey,
by the National Association for Business Economics, is now looking for the
consumer price index to rise by 3.8 percent this year. That`s way up from
the survey done back in February which predicted CPI to rise just over 2
percent for the year. The economists surveyed also expect energy prices to
come down. A barrel of crude is estimated to be trading at $59 at the end
of this year and at $53 by the end of next year. Both of those figures are
down from the survey done in September. Joining us now, Chris Varvares,
president of Macroeconomic Advisers and the lead analyst of the survey.
Hi, Chris.
CHRIS VARVARES, PRESIDENT, MACROECONOMICS ADVISERS: Hi, how are you.
GHARIB: I`m fine, thank you. Well you heard our report at the top of
the program with the minutes from the Federal Reserve`s last policy
meeting. And the implication that, like your survey, concerns about
inflation but reading between the lines, it looks like they`re concerned
about maybe over tightening too much and the markets read that that we
might be near the end of the rate tightening cycle. What was the view that
your panel had about the Fed`s move on interest rates?
VARVARES: The NAB panel sees the Fed going all the way to 4.75 percent
by the middle of next year. So that was what the panel came up with and
the survey that we did starting about three weeks ago up until about five
days ago. And, you know, from the perspective of what was in the minutes
today, I suspect that many of the members would probably stick with that
assessment. Clearly there is a chance that the Fed would over tighten and
some members of the committee as well as all of us economists watching the
Fed have that concern. The fact that it`s mentioned in the minutes is
something that we would expect to see and it doesn`t necessarily signal
that we`re close to the end of the tightening phase so....
GHARIB: You did ask the economists in your survey about when they
thought that the Fed might begin lowering rates, reversing course and what
did they say?
VARVARES: That there was a chance that the Fed could be reversing
course in 2007. Obviously that will depend in part on what happens with
the response to Katrina, how much building is done and how long a tail we
have for that reconstruction activity. If that continues into `07 and
supports demand, if it tails off in `07 then that might be a source of drag
in the economy. And of course oil prices is a big wild card here. You
mentioned at the top of the story that the inflation forecast for 2005 was
revised upward and of course that was the surprise in oil prices that
happened largely as a result of the hurricanes. Much of that has been
reversed and so our overall inflation forecast for next year is looking
pretty tame and our core inflation forecast, importantly, is very well
contained, 2.1 percent core inflation, CPI this year, 2.4 next year. So
the Fed`s got good stuff to work with here but the fact that the core
inflation rate next year does kick up to 2.4 is a reason....
GHARIB: Let me jump in because I`d like to get some of your thoughts
and survey results for some of the other categories. Housing was one of
them. You did ask the panelist if they thought their outlook on housing,
what would it be and it seems like there`s a view that it`s cooling down.
Tell us more.
VARVARES: Right. So the panel expects that the overall level of
housing construction will begin to back off. There is also some -- we
asked the panel about house prices. And the panel is also of the view that
house prices will begin not to decline but to slow the rate of increase as
we move out into 2006. So I`d say to summarize that, there`s no view that
there is a bubble but simply that house prices need to slow in order to be
sustained.
GHARIB: So when you put it altogether looking at oil prices, inflation
and housing, what`s the outlook for consumer spending?
VARVARES: Well, we think that the consumer will do very well, very
solid growth consumer spending next year. In terms of the ICSC Index
number, 5 percent gain December over December so 2005 is solid. Next year
will part depend on what happens to energy prices, concern about natural
gas prices this winter and what bite that will take out of consumers`
wallets. We think the consumer is still pretty solid but there are
downside risks highlighted by oil prices, gasoline prices next summer and
the rise in interest rates.
GHARIB: All right. Chris, thanks a lot for coming by. We really
appreciate it.
VARVARES: You`re welcome.
GHARIB: We`ve been speaking with Chris Varvares, president of
Macroeconomic Advisers.
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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
11/22/05: Good Skilled Help Is Getting Really Hard To Find
SUSIE GHARIB: Thousands of jobs may be lost these days due to bankruptcies,
but some manufacturers say they are having a tough time hiring enough
qualified workers. That`s the finding of a new survey by the National
Association of Manufacturers and Deloitte Consulting. It found just over
half of the companies surveyed report 10 percent of their jobs are unfilled
and that`s because of a lack of qualified candidates. Darren Gersh
reports.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: This is the present and
future of the American shop floor: high-tech and innovative.
And manufacturers say they need more people with the math
and problem-solving skills to work here.
JERRY JASINOWSKI, PRESIDENT, MANUFACTURING INSTITUTE: Skills are
regarded by manufacturers now at the top of the business drivers for
success.
GERSH: But those skills are in short supply. The Manufacturing
Institute and Deloitte Consulting surveyed 800 mostly small and medium size
manufacturers. Ninety percent reported a moderate to severe shortage of
qualified production workers. Eighty three percent said those shortages
are making it harder to meet customer demands. But even though employers
worry about a skills gap, half reported they offer no training at all and
the half that do focus on short-term results.
RICHARD KLEINERT, DELOITTE CONSULTING: It`s kind of a just-in-time
orientation in terms of what you need to do to get your job done today as
opposed to a longer term, developmental kind of focus.
GERSH: Of course, bosses have always complained it`s hard to find good
help nowadays and skeptical economists say the marketplace solution is
usually simple.
HARRY HOLZER, PUBLIC POLICY PROFESSOR, GEORGETOWN PUBLIC POLICY
INSTITUTE: I wonder in some cases, if the employers simply are unwilling
to pay the wages or salaries that would attract a higher level of skills.
On the other hand, you do hear stories about machinist jobs paying $80,000
or $90,000 a year and they still have trouble.
GERSH: That trouble may come from foreign competition, which makes it hard
to raise wages and stay competitive. But the bigger market
failure seems to be early in the assembly line of an educated
workforce.
JASINOWSKI: A lot of it has to do with the deficiencies in the K
through 12 system and the extent to which the supply of skilled workers is
seriously, seriously deficient and as a result, just paying people more
money is not going to in fact solve the problem.
GERSH: The manufacturing skill shortage is a high-class problem to
have. Demand for skilled help is so strong in part because manufacturing is
growing faster than the rest of the economy. Darren Gersh, NIGHTLY
BUSINESS REPORT, Washington.
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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
11/22/05: A New Place To Trade For Gas & Housing Prices
SUSIE GHARIB: If you`re an individual investor trying to
figure out which direction gasoline or housing prices are headed, a crystal
ball has probably been a tool in your tool belt, until now. Some brand new
futures contracts are letting small investors bet on both of those markets.
As Diane Eastabrook reports, it`s a way to make money or protect assets.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Gasoline
prices are up, gasoline prices are down. Now, new futures contracts pegged
to pump prices around the country can help investors hedge against huge
price swings. Gas-at-the-pump futures recently started trading at the
Chicago Board Options Exchange futures division. The six contracts are
pegged to gasoline prices nationally and in five regions around the
country. Since these products are smaller than crude oil futures traded in
New York, exchange officials in Chicago think they are better suited to
investors and small and medium-sized gasoline users.
PATRICK FAY, MANAGING DIRECTOR, CBOE FUTURES EXCHANGE: If you are
going to use it as a hedging tool primarily service station associations,
fleet managers, for instance if you have a utility company, if you have a
large fleet, you run a cement truck company, you can hedge your fuel costs
with this product.
EASTABROOK: Across town, the Chicago Mercantile Exchange is taking on
housing prices. Early next year the CME will begin trading futures
contracts that track home prices in 10 U.S. cities. The exchange says the
contracts could provide financial protection to mortgage companies, banks,
or even homeowners who want to hedge against rising or falling housing
prices. While contracts like these are a response to current market
trends, experts say they aren`t necessarily fads.
KATHLEEN HAGERTY, FINANCE PROFESSOR, NORTHWESTERN UNIVERSITY: It
makes the business environment a lot smoother if you can kind of smooth out
these fluctuations and you see that in natural gas. We`ve seen it in other
settings and it`s been very successful. It`s actually really a lot of the
fluctuations in the economy have really been smoothed out.
EASTABROOK: HedgeStreet, a web-based futures exchange, says it is
proof that investors are eager to trade on market trends. Speculators have
been trading mini price-at-the pump and housing price futures on
HedgeStreet for several months.
RUSSELL ANDERSSON, VICE PRESIDENT, HEDGESTREET: The folks that are
trading on Hedgestreet today are trading out of intellectual curiosity
firstly and secondly because they see it as an avenue to profit so you can
make money.
EASTABROOK: Both the CBOE and HedgeStreet admit at this point their
new futures contracts aren`t generating the kind of trading volume
necessary to be good hedging tools, but they think that will change over
time. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Chicago.
KANGAS: Tomorrow, an early new year`s resolution for your credit
cards.
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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
11/22/05:"Commentary"-Tis The Season For Being Thankful
SUSIE GHARIB: Thursday is Thanksgiving and tonight`s commentator says there are some
things to give thanks for that you might not think about. Here`s Allan
Sloan, Wall Street editor of "Newsweek" magazine.
ALLAN SLOAN, WALL STREET EDITOR, NEWSWEEK: Thanksgiving is right
around the corner and most of us who live in this country have a lot to be
thankful for. Despite all our problems, this is a wonderful place, one
that has given so many of us a chance to do well. But this year, we
Americans owe thanks to other countries, too, especially to the central
banks of China and other Asian countries that have done so much to help our
economy by lending us money cheap.
They`ve taken hundreds of billions of their surplus dollars and used
them to buy U.S. Treasury securities yielding less than 5 percent. That`s
a great deal for us. It`s kept the Federal government`s interest costs
relatively low, kept long-term interest rates here low, too. That`s
allowed people to refinance and refinance and refinance their mortgages
which has helped keep our economy afloat.
But if I lived in one of these countries, I`d be less than thankful.
I`d wonder why my government was lending all this money to the U.S.
Treasury instead of using it to improve my standard of living. One of
these days, that kind of thinking will prevail and the money will stay home
and our subsidies from Asian central banks will disappear. But for now,
all this money flowing in from Asia has bought us time to solve our deficit
problems. That`s something for which we should certainly give thanks. I`m
Allan Sloan.
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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
11/22/05:
"Paul Kangas' Stocks In The News"
PAUL KANGAS: Profit taking drove stock prices down on Wall Street`s opening
today as did higher oil prices as temperatures fell across the nation. The
Dow lost 25 points at the outset of trading, while the NASDAQ Composite
fell 6 points. Then a mid-day lull turned into a high-volume rally when,
as we said, the minutes of the Federal Reserve`s November meeting hinted
that rate hikes may be nearing an end.
The Dow Industrial Average surged to a 51-point closing gain, putting
it at 10,871.43. The NASDAQ Composite advanced 11.89 points to 2253.56.
Standard & Poor`s 500 Index rose 6.38 ending at 1261.23. In the bond
market, the 10-year note rose 8/32 to par and 18/32, lowering the yield to
4.43 percent.
Big board volume leader on 18.2 million shares, General Electric (GE)
losing $0.14 after several days of gains.
Followed by Pfizer (PFE) with a $0.36 loss.
Then the new AT&T (SBC) with a $0.40 gain.
Lucent Technologies (LU) dropped a penny.
ExxonMobil (XOM), fifth in volume was up $0.29 since oil prices rose.
Micron Technology (MU) gained $0.47. Merrill Lynch upgraded the stock
from "neutral" to "buy," citing the company`s joint venture with Intel to
make flash memory chips which we told you about yesterday.
Texas Instruments (TXN) up $0.75.
United Microelectronics (UMC) lost a nickel a share.
Taiwan Semiconductor (TSM) up $0.29.
And Bank of America (BAC), tenth in big board volume, up $0.26.
Deere & Co (DE) rose $4.40, even though the company`s fourth quarter
earnings dropped to $0.96 from $1.41 last year. But the Street estimate was
only $0.79 and that was $0.17 better than expected by most analysts.
Worldwide sales for Deere rose 1 percent over the fourth quarter last year.
Cooper Cos. (COO), a major casualty, down $13.32, traded near the low
of the day at the end. The company cut its fourth quarter earnings guidance
which was $0.96 to $0.99 a share, all the way down to $0.83 to $0.86. The
company cited tough competition in the disposable contact lens market and
also Cooper cut its fiscal 2006 and 2007 earnings guidance. Bad day for
that stock.
Pepsico (PEP) moved up $0.97, a positive reaction to the company`s
acquisition of Sara Lee`s European nut business for $130 million.
HJ Heinz Co (HNZ) moving up $0.62. Second quarter earnings came in at
$0.62 excluding one-time items and that was $0.08 above the Wall Street
consensus.
Brown Shoe Company (BWS) stepping into higher ground up $3.45. Third
quarter earnings $1.04, up from $1 last year and sales up a very
respectable 20 percent.
CBOT Holdings (BOT), this the Chicago Board of Trade, down $6.80. The
Bank of America started covering the stock with a "sell" recommendation and
the target for the price of the stock at $92 said the company`s product
line is too dependant on interest rate markets. The low of the day was $105
incidentally.
Then Maverick Tube Corp (MVK) up $1.24. Deutsche securities upgraded
it from "hold" to "buy" and boosted its price target from $36 to $44 a
share.
A new issue today, Brookdale Senior Living (BKD), 11.1 million shares
offered to the public at $19, opened at $23.10, the high of the day $25.49,
closed very close the high, good debut day.
Google (GOOG) topped the active list again and a new high once again,
up $7.11 at $416 plus. CBS television is exploring a deal with the company
regarding video search possibilities.
Microsoft (MSFT) $0.25 loss.
Intel (INTC) up $0.91.
Sandisk (SNDK) rebounding after a big loss yesterday, up $2.78.
Apple Computer (AAPL) was up $1.56, fifth in dollar volume.
Cisco Systems (CSCO) rose $0.22.
Yahoo! (YHOO) a $0.09 gainer.
Ebay (EBAY) moved up $0.56.
And Dell (DELL) lost $0.04.
Tenth in volume, amazon.com (AMZN) an $0.86 gain.
Akamai Technologies (AKAM) up $2.16. Akamai is the Hawaiian word
meaning clever. It`s an Internet service provider and it was upgraded by
Prudential securities from "neutral" to "over weight," nice move in the
stock as a result.
And over on the American exchange, Jennifer Convertibles (JEN) up
$1.49, 72 percent gain. The sofa bed maker converted a $0.46 per share loss
last year in the fourth quarter to earnings of $0.35 this year.
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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
11/22/05:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10871.43 +51.15 + .5
HIGH 10877.43
LOW 10787.22
NASDAQ COMP. 2253.56 +11.89 +.5
HIGH 2257.77
LOW 2232.74
VOLUME 1,685.9
PREVIOUS 1,555.7
UP VOLUME 1,124.2
DOWN VOLUME 548.1
DOW TRANSPORTS 4180.19 +23.71 + .6
DOW UTILITIES 398.51 +.82 + .2
CLOSING TICK +947
S&P 500 1261.23 +6.38 + .5
S&P 100 579.83 +2.68 + .5
MIDCAP 400 739.77 +4.70 + .6
REUTERS/CRB 315.50 +1.87 + .6
NYSE COMPOSITE 7715.35 +38.71 + .5
VALUE LINE 413.37 +2.00 + .5
RUSSELL 2000 682.55 +3.59 + .5
DJW 5000 12636.74 +66.30 + .5
U.S. TREASURIES
5-YEAR NOTE 4.50%
Nov. 15,2010 100 23/32 +8/32 4.34
10-YEAR NOTE 4.50%
Nov. 15,2015 100 18/32 +8/32 4.43
30-YEAR NOTE 5.375%
Feb. 15, 2031 110 18/32 +1/32 4.66
LEHMAN BROS.
LONG BOND INDEX 1756.15 + 5.18
DOW CLOSE 10871.43 +51.15 + .5
ADVANCES 1972
DECLINES 1355
NEW HIGHS 216
NEW LOWS 144
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
GE GE 36.06 -.14 -.4
PFE Pfizer 21.38 -.36 -1.7
SBC AT&T 24.77 +.40 +1.6
LU Lucent Tech 2.90 -.01 -.3
XOM Exxon Mobil 59.66 +.29 +.5
MU Micron Tech 14.67 +.47 +3.3
TXN Texas Instrument 32.55 +.75 +2.4
UMC United Microelec 2.98 -.05 -1.7
TSM Taiwan Semi 9.46 +.29 +3.2
BAC Bank Of America 46.10 +.26 +.6
NASDAQ CLOSE 2253.56 + 11.89 + .5
VOLUME 1,921.1
PREVIOUS 1,717.6
ADVANCES 1673
DECLINES 1372
NASDAQ ACTIVES
GOOG Google 416.47 +7.11 +1.7
MSFT Microsoft 27.91 -.25 -.9
INTC Intel 26.16 +.91 +3.6
SNDK SanDisk 49.62 +2.78 +5.9
AAPL Apple Computer 66.52 +1.56 +2.4
CSCO Cisco Systems 17.28 +.22 +1.3
YHOO Yahoo! 42.36 +.09 +.2
EBAY eBay 46.75 +.56 +1.2
DELL Dell 30.00 -.04 -.1
AMZN Amazon.com 48.85 +.86 +1.8
AMEX CLOSE 1726.92 + 11.47 + .7
INDEX SHARES
DIA DIAMONDS TRUST 108.64 +.48 +.4
QQQ NASDAQ 100 41.70 +.15 +.4
SPY S&P DEP.RECEIPTS 126.30 +.54 +.4
STOCKS IN THE NEWS
DE Deere & Co 67.40 +4.40 +7.0
COO Cooper Cos 51.50 -13.32 -20.6
PEP PepsiCo 59.37 +.97 +1.7
HNZ H J Heinz Co 35.68 +.62 +1.8
BWS Brown Shoe Co 39.95 +3.45 +9.5
BOT CBOT Holdings 106.70 -6.80 -6.0
MVK Maverick Tube 38.00 +1.24 +3.4
BKD Brookdale Senior 25.43 +6.43 +33.8
AKAM Akamai Tech 19.21 +2.16 +12.7
JEN Jennifer Convert 3.54 +1.49 +72.7
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