tv Closing Bell CNBC October 9, 2009 4:00pm-5:00pm EDT
significant improvement. general motors signed a deal to sell the hummer brand to a chinese company. we're talking with hummer ceo, he he'll tell us how the new owner plans to turn it around. we've got pretty good gains on the week for the market. dow industrials tonight at the high of the day, 77 points. the high of the year at 9864. the gain on the session of 1%. s&p 500 picked up six points, finishing the day and week at 1071. about a half a percentage point higher. technologies the leadership on the upside. nasdaq now at 2139 and change. all the action from bob pisani with the "eye on the floor." >> it was just putting up the old closing high for the s&p. 1071.66. can we just -- well, we've got another two or three -- it can still stay for the two or three minutes. essentially we're there, maria. the good news is we're's there
on the dow. there it is, folks. the old high, 9829 the old high back on september 22nd. we're there here. we've had a great week. all the major indices up 4%. i want to show you a couple of major movers. a good day in technology stocks with a lot of positive comments from the analyst bark clays talked about hard way in a very positive way. lam research up. a new high for lam research. all of the semi kun dock tors had a heyday today. don't get these global outlook updates very often. third quarter results for a lot of the big semi kun dock tor companies they said would be at the high end of the guidance. more signs we're getting slow recovery here. big week for commodity stocks. many of them were up double digits here today. we had a strong dollar today. and we did have the overall market up, but the commodity-based stocks not surprisingly hit the big names,
freeport, alcoa, up over 10%. was down today. how about next week's earnings. to get this thing going further, remember what happens this week. alcoa positive, retail sales, upgrades and positive comments from the retailers. that's what moved the stocks. we've got to hear positive things from ibm. they're a monster. their business has been growing. we've got to keep that going. jpmorgan, the big question out there is, how are the non-performing loans and net chargeoffs doing, are they slowing down. for johnson & johnson, what are they going to say on medical devices and diagnostics. all of this coming next week. let's look at how the dow jones industrial average did for the week. 4.7%. i'm still settling this out, folks. not quite final here. but 4.3% by my back of the envelope. 4.4% maybe. nasdaq also 4.4%.
i'm still standing here staring at it. 1071.49. you know, i know, it sounds silly. but it matters to those of us who watch these silly things. potentially at new highs on all of these. >> that's a good thing. bob pisani with the latest. the other about headlines we're following tonight. the u.s. trade gap unexpectly narrowed to $30.7 billion in august, down 3.6%. or $1.2 billion from july. that's a big decline in demand for foreign oil. and increase in exports driven by the weaker dollar. confirming that pfizer has temporarily halted patient enrollment in a late-stage lung cancer drug study. halting the trial after a safety data monitoring committee saw a high number of serious adverse events, including deaths in patients taking the drug. the international energy agency is predicting oil demand to rise next year.
up from the forecast last month, because of signs of economic recovery. president obama making another push to reform the financial regulatory system. chief washington correspondent john harwood is at the white house on the day. the president was given the nobel peace award, john. >> reporter: that's exactly right, maria. the president did his best not to let that nobel peace prize divert his focus from the rest of his agenda, including financial regulation. he acknowledged that this event was some consumers that certainly there were financial consumers out there who acted badly, but not everybody. and that heightened level of regulation is only fair. >> it's true that the crisis we face was caused in part by people who took on too much debt and took out loans they couldn't afford. but my concern are the millions of americans who behaved responsibly and yet still found themselves in jeopardy because of the predatory practices of some in the financial industry.
>> reporter: so the question is, what do you do about that. the president has proposed a new consumer finance protection agency. business is fighting that, saying it would be a double layer of regulation. but you can expect that this white house is going to fight for that idea, and democrats and the congress are likely to support them. the house expected, maria, to move first this fall by passing a bill from the floor. the senate later with chris dodd, the banking chairman, trying to get this done by early next year. >> john, you don't think we'll see any delays because of health care reform? that was a worry, right, that financial regulatory reform was being put on the back burner because the country's really dominated by the talk over health care reform? >> reporter: i think that delay has already occurred, that's why the house is not going to act until later this year. it's likely the financial regulation will be the last thing the house does before it breaks for the winter. and in the senate, they simply haven't been able to tackle this, because it's taken them so long to move through the health
reform process. chris dodd plans committee hearings this fall, hopes to get it to the floor by january or february. >> back on track. john, thanks so much. john harwood at the white house. two years ago today, the s&p 500 hit an all-time high. now down 31% since that number. can it recover over the next two years? i'm joined here to discuss that. gentlemen, always nice to have you on the program. welcome. >> great to be here. >> thank you. >> we look back two years. the dow and s&p hitting all-time highs. that dow at 14,100 and change two years ago. where will we be in the next two years? what do you think? >> i think for now, we're headed higher, maria. we've got a lot of bullets to dodge. this economy's getting better. the consumer's coming back. the business profitability is coming back strongly. and if that can keep going, then i see no reason why, let's say two years from now, the s&p 500 earnings couldn't be close to $100.
and with the multiple of 15, that would be put us back where we were two years ago. a lot has to go right for that to happen. >> russ, what do you think? >> in the short term i think we have a tail wind. you can see a lot of inventory replenishment. i worry about 2010. i don't think we're headed back into a severe bear market, but we've got head winds. the biggest is the consumer. you've got a very weak labor market, unemployment at 9.8%. the worst since the early '80s. you've got a consumer who still has too much debt. i think the leveraging continues into next year. that will be a headwind for stocks, given that we're no longer cheap on valuations. what do you guys think about the dollar? all week i'm hearing all different investment strategies based around the notion that the dollar continues to go lower. how do you invest if in fact we see a weak dollar in the coming two years? >> maria, i think you've got
to -- go ahead, russ. >> i was going to say, there are weak dollar plays in here. these have been working out well the last six months and probably likely to work the next few years. gold is obviously the simplest way to hedge against the dollar. in equities, there are markets that will benefit from the weak dollar. they tend to be commodity producers and exporters, like canada and australia and the developed market. and probably brazil and the emerging markets. >> stu, before i get you, i've got to follow up on russ here. are you telling me you would put new money in work in gold at a record high right now? >> you know, i do think investors want to continue to put money to work in gold. it wouldn't shock me to see a bit of a pullback. if you look at gold longer term, i don't think it's an overvalue people might suggest. i do worry a lot about the supply of dollars we've seen. the monetary basis doubled over the past year. if and when that spreads to the real economy and banks start lending again, i would be really concerned about the dollar. gold is a natural hedge.
>> stu, what's your investment strategy based on a weak dollar? >> i think ki verse fiing globally is the watch word, maria. the dollar has gone down pretty hard against the euro and the yen. it could still go down further. the dollar on a tradewind basis is still 10%, 12% above where it was in the lows in the cycle. it's got downside room. longer term i think the question of the dollar is going to depend on the environment for corporate profits here, on the environment for investment returns here. and ultimately it's going to depend on whether the fed is obliged to mon etiz this federal debt. the fed's told us that there's determined and mr. bar nan ke said as much last night, they're determined to raise interest rates, to begin to rein things in as growth comes back. the political pressure for them to hold off in an environment of high unemployment is going to pose significant challenges for them. >> determined. do you think we'll see higher interest rates in 2010? >> i do. i think by the middle of the year we'll see some beginnings
of a rise in the fed funds rate. that's because i think this economy's going to surprise to the upside. i think that although the consumer will ultimately depend on better job growth, that for now the consumer's coming back because so many people cut back, those with jobs, cut back hugely last year when they worried about the risks, because it looked as though the downside could be endless. now that we've got some sense of stability and stock prices are up, i think people are relenting a little bit. and they're stepping up their spending a little bit. we've had confirmation of that in the chain store sales we just got yesterday. >> that was a real surprise on the upside. gentlemen, single best idea. here we are at the beginning of the fourth quarter. we're about to get the barrage of third-quarter earnings reports certainly next week and the following week. how do i need to be invested through the end of the year? russ, what is your single best idea? >> i think for the rest of the year, i continue to play the cyclicals. i like the weak dollar play also. the intersection of those two ideas is to buy industrials.
>> stu? >> maria, i like technology. i think technology is the enabler of cost cutting today. and we have a product cycle about to unfold in technology with the release of windows 7. i also believe in playing the commodity currencies and commodities more generally. i think with growth coming back globally because it's a synchronized upturn, that we'll see higher commodity prices. >> gentlemen, good to have you on the program. thank you. >> always a pleasure. >> thank you. coming up, discussing whether president obama will be able to get congress to pass the regulatory reform. and an interview with the ceo of hummer. which was sold to a chinese company. find out if he thinks the deal will face regulatory hurdles. how the owner plans to turned around sales. would you bike a hummer?
industrial machinery. join us with an interview with the hummer ceo, jim taylor. mr. taylor, good to have you on the program. >> thank you, maria. >> how are you feeling today, doing post-this deal going to the chinese company? >> i feel great. we've been looking forward to today for probably over a year, as we've been out looking for a potential investor for the hummer brand. as you know, through a pretty set rough water year with economic challenges in this country, and of course, backdrop of the gm bankruptcy. we're very, very pleased to be sitting where we are today. >> congratulations on that. there's a lot of talk in the market today the business actually went for a lot lower than its actual full value. # $50 million was the sales price? >> i think it's safe to say that anybody's in the private equity investment business with any assets are getting a pretty good deal based on the economy, and the challenges going forward in the auto industry. we're actually not publishing the price today. we want to get to the finish line and have our closing before
we say what the actual amount was. it was a good purchase price. >> it certainly is a deal that you want to get done. even then, it's got to be tough selling a business for a price that you know is probably undervaluing the business. >> we look at it as an upside as investors, of course, at picking the brand up as it is in its current state, in a very tough automotive market. we think there's a lot of upside as the new owners and new investors of the brand both here and internationally. >> what game plan is the new ownership preparing to put in place, to turn sales around, mr. taylor? can you give us a sense of the market right now and what the chinese company can bring to the table? >> the most important thing they're bringing to the table is short-term cash. because as investors to get the brand turned around, the very first thing we need is immediate marketing money to get our brand back in the dealerships, and top of the mind of the consumers. long term, this is the vehicle business. what we really need is heavy
investment and product development, product capital for the next generation of hummers to address the serious challenges that are coming to the auto industry, particularly the truck business, to address the fuel economy and emissions challenges. >> all very good points. mr. taylor, give me the sell then, okay? the company comes in, they've got real hard cash. they help you out of this spot. now you need the money to market the business. and tell the world why the hummer is a great brand. i'm looking at oil prices at $72 a barrel. i know we've got a lower dependence on foreign oil. i want a car, but i've been moving toward going smaller. what's the sell for me to buy a hummer? >> i think we have a very -- we're a niche brand, not a high-value brand. it's for a specific group of people interested in using a hummer for what it does. it's very capable off-road obviously. and permits a group of people to go out and enjoy the outdoors, go to places you can't get to in a normal vehicle.
and there's a very, you know, close following of very dedicated off-road people that do these sorts of things on weekends. it's not meant to be the high-volume suburb vehicle. and there's another broader group of people that enjoy the image that the hummer brand brings to them. some level of independence, and, you know, a personal choice kind of vehicle. we think that, again, with that nucleus of today's loyal customers, and going forward with the appropriate product adaptation and expansion of our portfolio, it will be able to attract a broader audience, not only in the u.s., but i have to emphasize we sell to 38 countries internationally and many of those countries offer us short-term and long-term growth as well. >> you've got a target of the niche customer and you've got to do it on a global basis. we have so much talk between china and the u.s., and a lot of talk about relations between the two nations, given recent talk
of protectionism moves. do you foresee any road blocks from regulators preventing this deal from going through? >> there's no doubt this is challenging territory. it's very, very high profile. you said politics, and large economic involvements between our two countries. so we just have to follow the rules. we're applying for with this purchase, now that we have the definitive docs signed for the regulatory in china. there's a formal process of approval for these kind of acquisitions, given its brand and primarily an ip purchase as opposed to an asset sale. we think we've got ourselves lined up of advance notice of what's about to come. we're reasonably optimistic. you can't count your chickens until they hatch, but optimistic they'll approve the brand. >> thank you very much. >> thank you. >> give us an update on the
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the market has chosen to say, look, the economy is strong, inflation not a threat and the fed seems to be on our side, so we'll go further. >> i think we're in that churning period and we'll continue to be for several years to come. i think it will take a while to work out. >> yes, we are looking back one year. and two years ago today, the market hit an all-time high, dow at 14,000 and change. one year ago, we were looking at a pretty tough time for the economy. one sector that will really set the tone for earnings season for the next quarter, and the next year, will be the big banks. many of them reporting results next week. bertha coombs with the preview. >> you know, we're expecting to see bank earnings come in next week. beyond the numbers, though, there's going to be a lot of questions. not just about things like loan losses and reserves, a lot of the conference calls are likely to be dominated about restructuring and management. goldman sachs is expected to post another blowout quarter next thursday. the estimate is for $4.24 a
share, nearly two and a half times last year's third-quarter earnings. bernstein's brad hint said the revenues will be a highlight here. dow component jpmorgan, going to be kicking off the big bank earnings reports on wednesday. expected to report a profit of $1.8 billion, or 49 cents a share on nearly $25 billion in revenues. some of the more interesting conference calls are likely to involve a couple of the banks with big government involvement. that's right, citi. citi's going to report on thursday. beyond the earnings, there's lots of news here. of course, today's deal with oxy petroleum, trading a unit for a net investment of $250 million. citi says the deal is not material to earnings, but also in here is the issue of andrew hall's bonus. is that going to be deferred. who's going to end up paying that. and of course, that recent management report, the fdic said
it was way too glowing. also said that vikram pandit had been doing a good job, whether that will be released. bank of america reports on friday. expected to post a loss of 6 cents on revenues. we'll be looking at loan loss reserves there. the bigger questions are going to surround the search for the successor to ken lewis. and general electric, i'm including it with the banks. general electric also reporting on friday. expected to earn 20 cents on revenues of $40 billion. i'm including it here because all the talk about the potential sale of a majority stake in nbc universal, the parent of cnbc, that would once again put more focus on ge's financial unit within the overall structure of the company. so there are going to be lot of questions that will be beyond the issue of just the pure numbers. it's going to be a very busy week ahead, a critical week for earnings. you'll want to keep it tuned right here to earnings central. we'll have more on the bigger names coming up in the "closing bell" about a half hour from
now. i'm calling it, what to expect when you're expecting earnings. >> i like that, bertha. we'll be back to you. thanks so much. berttha coombs on earnings. the other stories we're following on the "closing bell" ticker tonight. google getting a credit boost. $600, up from $475. the ad revenue will helped by consumer advertising spending. economic recovery gains steam in the united states and europe. the stock up to $5.16. ak steel is up, raising its price target on that one by $3 to a new target of $22.50. the analyst telling clients the steelmaker is poised to improve the economy as well. with restocking. we know the inventories have been depleted. klaus kleinfeld told us that the other day. up 1%. aero po down from a neutral. outperformed the rivals this year.
the ceo, steve wynn and asked him if he's worried about new competition from singapore, which has the first casino resort coming online early next year. >> i don't think it's going to have any effect on china, the macau market at all. i think it will be a nice market but i don't think the impact will be noticeable at all. remember, if the central government of china decided to let one other province besides quongdong province have one visa per month as they have just done, they could flood macau with human beings so you couldn't walk in the streets. >> wynn resorts today down about 3%. a congressional watchdog is bank the government's programs to stem home foreclosures aren't enough. and they need to be reworked. diane olick in washington with the story. >> reporter: that's right, maria. just as treasury officials were congratulating themselves for beating the deadline for the government modification program, the cops for the t.a.r.p. threw
cold water on the party. the congressional oversight panel for the t.a.r.p. found it increasingly appears that the h.a.m.p. is targeted at the housing crisis as it existed six months ago rather than as it exists right now. they're talking about the next wave of defaults in pay option a.r.m.s. what you want to pay for a certain time. when full monthly payments come due, many of these borrowers will be too far underwater on their loans to qualify for the government-backed modification. the panel cited unemployment and said that the treasury's strategy doesn't make -- doesn't help people who lose their homes due to unemployment. treasury countered with a statement admitting that while a.h.m.p. is open to the unemployed, we continue to study further ways to help the unemployed homeowners. they say the housing crisis was never going to be fixed overnight. one fix, of course, they're still talking about is a potential extension of the first-time home buyer tax
credit. they're fg to be talking about that a lot on monday at the mortgage bankers association convention. we will be there live in san diego. so you'll want to watch for it, with some exclusive interviews, especially on the "closing bell." for more, go to the blog. >> that will be great. we're looking forward to that, diane a. is president obama gaining any traction? we'll check it out when we come back on "closing bell."
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welcome back. citigroup is selling a controversial commodities trading business to ox i dental petroleum for a price tag of $250 million. scott cohen now with what prompted the sale. >> i guess we don't know for certain what prompted the sale, but it is a far better that it had something to do with this man. an true hall, by any measure, a brilliant commodities trader. but apparently too brilliant, or at least too expensive for a company financed by the taxpayers. hall is the # $00 million man. citi owes hall $100 million for his winning bet on the oil market last year. kenneth fineberg said he already had a problem on this payout. vikram pandit said it probably
doesn't look too good. pandit said, i want to create an environment where employees are recognized for performance, where they operate within the right culture, where they're paid competitive. steve add ler asked, aren't there some sums that are too much like $100 million? and pandit replied yes. citi is unloading that mess. ox i dental petroleum taking it off of citi's hands for $250 million. for that, oxidental has gotten an operation that's been profit al since 1957. >> for citigroup to sell a division which is profitable simply because the government wants it out of citigroup doesn't benefit citigroup shareholders in any fashion. however, it is very clear that the government does not want capital in banks used for either proprietary investing, hedge fund ownership, or maybe even block trading. and therefore, they wanted
fibroout of citigroup. >> as for andrew hall, he will apparently not get his $100 million, at least not up front. the senior management agreed to defer a portion of the bonuses in exchange for a stake in that perennially profitable unit. >> such a profitable unit. i'm sure it was tough selling it. >> that's right. you know, oidental said they looked at this ten years ago. they said it didn't take a whole lot to convince them to buy this time around. >> scott, thanks. the obama is calling on congress to pass consumer protection reforms before the end of the year. to gain traction on his effort, he met with barney frank and christopher dodd along with five average americans today. our friday regulars talk about whether the president is biting off more than he can chew. gentlemen, always great to see you. what do you think? was this the right tone?
>> it's maybe a right populist tone to get some of these hard luck stories out in public, but there's no chance this bill can make it this year. there's about as much chance as barack obama winning the -- oh, wait, no. i just don't think there's much of a chance you're going to get that bill in there. >> did you say as much chance of barack obama winning the nobel peace prize? >> yeah, something like that. >> i hope you're wrong in that case. >> breaking news. got to get to the breaking news right now. >> thanks very much, maria. another instance of just how far the madoff case stretches. the newly appointed head of the criminal division of the southern district of the u.s. attorney's office, richard zabel, is recusing himself from the madoff case, which is the office's biggest case going on right now, because his father, represents one of the parties being sued in a civil case by the trustee in the madoff case, irving picard.
doesn't appear to be any conflict of interest per se, but he is recusing himself and it shows how far and how many people are involved in the madoff case. back to you. >> pretty amazing, bertha. bertha coombs with the latest news. we'll get back to you as that develops. so, tony, you were going to weigh in here on the regulatory story. >> maria, no one can argue with the need to strengthen consumer financial product protection of the we saw that that there were pretty severe holes in the system, and a lack of focus that some of the agencies. so we definitely want to see this. i don't argue with the president's desire to get that done. i do have some concern with the method and structure that he's setting up in this already confusing regulatory system that we have. >> but the consumer protection agency is one agency that really has been triggering a real debate. some people say, look, this is more bureaucracy and we don't necessarily need another agency.
>> i think that's exactly the point. you know, if we were doing overall comprehensive structural reform, you know, maybe you could see a role for this agency. but maybe not even then. what we're doing is putting the consumer product safety, you know, financial product safety organization at the bottom of this already confusing structure. we're talking about putting a systemic risk regulator on top. but everything in the middle pretty much stays the same. in addition, they're taking away preemption, which is going to get the states involved in this process also. i think there's a better way to do it. and more logical way to do it than take advantage of the existing regulatory agencies. >> you know, maria, there's a cautionary tale here. that, of course, is sarbains oxley. which created so much red tape. it really hurt a lot of small and medium-sized businesses. you certainly don't want to repeat that. >> that's certainly something
people keep bringing up, you don't want the pendulum to swing too far. the president said he would like this done by the end of the year, and health care done by the end of the year. doable? >> no. the health care debate is going to suck the oxygen out of the entire room. they're going to read the entire bill, that's the strategy. i think they run the risk of looking obstructionist. it's now looking as if the health care reform bill won't get done until close to christmas. i can't see how -- and you've got to fix the estate tax and there are a few other things they have to do. no, financial services reform will not happen this year. >> i agree. there's really no chance of that given the schedule. and especially the time constraints in the senate. i don't think there's any chance at all. it's very likely chairman frank will be able to get something through the house. the house rules are amenable to pushing through legislation. so they'll probably be able to do that. but the senate is going to be on a much slower time frame. >> tony, greg weighed in. what do you think about the nobel peace prize that the
president today announced? >> we've seen a lot of reaction out there. i've given mine. i actually think it burdens the president. i don't think this is something that the white house sought. you know, and i love mark haines' quote this morning, my favorite quote of the day, that on the very day that nasa bombed the moon, president obama won the nobel peace prize. so there was incongruity there. >> the next prize would be nancy pelosi, miss universe. >> what? >> gentlemen, thank you. have a nice weekend. we'll see you. >> thank you, maria. >> you, too. jpmorgan, citigroup, a couple of the big names that will report earnings next week. we're expecting a busy one. we'll tell you what to expect. how important revenue growth this is this earnings season.
they gave it some horsepower. >> i see markets going higher over the next two years. not at the same rate that they've gone over the last three to four months. but i see them edging higher as economic fundamentals start to support the recovery. of course, next week is a critical point for the markets. earnings expectations. six dow components will report their third-quarter numbers, johnson & johnson included. harry clark, and matt nesto. good to see you both, gentlemen. harry, what are you looking for this earnings season? >> you know, so far, maria, it's been good. only a few reported 4-1. that's a nice ratio if you keep it up. next week's an interesting week as you know. i think ibm will come out with
something around the estimates. they don't surprise very often. but you know, jpmorgan and j & j's estimates are pretty darn low. they could surprise on the upside pretty big. which would be very positive. >> but matt, we're still talking about a decline from a year ago. if you look at the thompson reuters numbers, or s&p, we're still talking about declines in terms of profitability. >> and revenue, maria. that's what everyone's talking about. goldman sachs pointed out the second-quarter revenues was the worst we've seen since 1970. if you take a look at this quarter, things are supposed to improve to only a 15% decline. so even if we come in 25% better than expected, we're still looking at revenues to be down from what was a nightmare of a period a year ago, by about 10%. >> so harry, as an investor, and needing to put capital to work
in this market, what do you need to see in the next couple of weeks in order to feel confident that you think the market goes higher? >> well, i think we're still seeing cost cutting. i think cutting. i think we'll see some revenue growth on the top line. has to come. i think the bottom was in on revenue declines. maybe not as good as we want to see, but better than it has been. and that's what i want to see, just some positive movement on the up side will give me confidence. the market in my opinion, maria, looks very good. it's done nothing wrong yet, and it's going to go higher. >> matt, where are we in terms of growth? tell me the sector breakdown in terms of what you're looking at as far as the leadership group in earnings and revenue. >> if you look at a simple bar chart, maria, the financials are going to jump out at you. they're supposed to grow their sales by something in the tune of 50% or 60%. but that's really all about one stock of the 90 financials in the s&p 500. aig. because a year ago they had a
$68 per share loss but if you back out then you have all ten sectors posting losses again versus the year ago period. and they go anywhere from 30% to 40% for materials and energy to small losses for some of the consumer discretionary names. but even that group is whacked by the charges that ford took a year ago as well and some of the auto parts makers. >> all at a time that the stock market has actually run ahead of actual fundamentals. isn't that right, harry? >> sure has. my opinion is it's going to keep on going there too. i think people looking into the future, not looking the past three months, next month, looking a year, year ahead out, a lot of money out there has not been committed yet. it's going to commit at some point. i believe before the end of the year we'll see a lot of that money show up in the market. and the people know things are bad out there, all we want to see is an improvement. consumer numbers are getting better, sentiment, the forward complement sentiment looks much better. that's going to reflect on the market going higher.
>> right. but aren't the expectation that's things are improving now baked into the cake? i mean, if we don't see an improvement, we could have a problem, right? >> we will see an improvement. >> we will? >> i think we will, sure. >> why? >> because things are on a positive slope. we've seen the bottom. things go up from the bottom, not down from the bottom. i think people will understand things are getting better. >> where are they getting better? north america, obviously we've seen some signs in terms of better sentiment, better housing numbers, but can you point to actual evidence that we are seeing real end market demand and real recovery? >> you've got to look abroad for that first. europe and brazil much better than we are, australia's on fire. a lot of those countries over there are doing very, very well, and they're leading us. we will catch up. china took a break the past quarter. they'll be back up pretty strong the next quarter or two. but in this country we're sort of lagging behind. and that's happened before, it will happen again. but i think we're still going to
keep up with the rest the world. >> so how do you invest, then, in that environment, harry? >> we're very heavy international right now, maria. we've been in the -- in europe very heavy the last several months. we're backing out of europe now. more in emerging markets again. taiwan, south kraerks iorea, in australia. we still have italy, spain, austria, and europe. we've been heavy in brazil and brazilian small cap for months and months now. very, very nice gains there. latin america's been the biggest gainer in the market of all so far this year. up 75% for the year. >> matt, what are you looking at? what's most important to you in terms of sifting through the numbers coming your way next week? >> we have come 60% in six months, and the fact of the matter is if earnings don't come in better than expected and sales don't come in better than expected the market is going to be disappointed. i don't think anyone is expecting strong forecasts out there. nobody can really see that clearly into 2010 yet. we want to believe that things are getting less worse. and we bet a lot of money on
that. but all that money on the sidelines that wants to and needs to get in would love to get in at a lower price. >> all right. we'll leave it there. >> that will restrict corrections. >> yes, it will. >> i'm sorry, harry? >> that will restrict corrections on the down side. all the money wanting to get in the market. >> and that's what we've been seeing for several months, every time there's a dip you see new money coming in. gentlemen, thank you. >> thank you, maria. >> we'll see you later. have a great weekend. harry, matt. let's head over to the nasdaq marketsite right now. melissa lee is there. she's standing by with more on what's coming up on "fast money." hi, melissa. >> big friday show for you. first on cnbc we'll have the head of hp's pc product group, todd bradley. he will show us the latest device that is audio enhanced for those music lovers out there. also, will we have dow 10,000 next week in certainly we made good progress this week, the dow hitting new highs for the year. and we'll give you the options setup for the financial earnings because we've got a bunch of them out next week. i know that's on your agenda as well. >> we'll see you at the top of the hour about five minutes
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well, consumers have been spending less over the last two years. the gifts card market is getting larger. retailers getting creative to gain a bigger share of the gift card market. cnbc's jane wells in los angeles with the story. jane? >> hi, maria. yeah, how do they lure you in to buy their card in by one estimate the gift card business is worth $25 billion a year. the npd group projects 16% of shoppers will buy gift cards this year. that's twice the number from two years ago. how many of those cards actually get used? >> only about 81% of gift cards get redeemed. now, when they are redeemed, 114% of the value of the gift card gets used. in other words, i give you a gift card for $50, you're going to go in and spend $57. >> and with so many retailers offering gift cards, how do you stand out? how many depot is rolling out a gift card next month which you can wave in front of your computer web cam and items in that price range will pop up. and it's also deferring payments for people buying gift cards.
>> you can purchase any item or a gift card in this case over 299, you automatically get deferred payment for six months, which gives you the opportunity to, you know, six months from today if you buy a gift card to be pay it slowly or, you know, the rate that fits you. >> sears and kmart have brought back the christmas club. it's a debit card you can add money to and whatever the amount is on november 14th they'll add 3%. and for regular gift cards, no expiration and no fee. >> well, with the recession people are very conscious about how much they're spending. so definitely a gift card keeps them within their budget. >> other strategies include gap letting you use their gift cards at ban faa republic or best buy making gift cards from recycled paper, hoping that does the trick. we don't know what strategies are going to succeed, maria. ask me that after the holidays. >> all right, jane. thanks so much. jane wells. before we go, take a look at the day on wall street. pretty good day once again and a good week. we're talking about 3% and 4%
gains on the week for the major averages. today dow industrials up another 78 points. that, my friend-s a new 2009 high. 9864. on that note we bid a wonderful weekend, and i'll see you monday. actually, i'll see you on tuesday. happy columbus day. thanks for watching, everybody. good night. live flt from the nasdaq marketsite this is "fast money." i'm melissa lee. the dow climbing its way back to a new high for 2009. take profits or keep riding until dow 10,000. these traders have your answers tonight. also a look inside the revolution at hp with the top exec. at the firm and gold's record-breaking week. joe terranova, the liquidator, has a commodity trade that may follow bullion's bounce. but first let's get to the word on the street. guys, do we have our party hats on or does debbie downer -- >> listen, it was hard for me the other day. it's hard to break up. i mean, it takes a while to get over.