tv Power Lunch CNBC December 9, 2013 1:00pm-2:01pm EST
>> lebeau was the judge. >> phil is a very bright guy. he knows the industry very well. >> give me a final trade. >> are you aproviding of the judge? >> apple long. >> pete. >> my con going higher. >> awi long. >> that does it for us. "power lunch" starts now. >> "halftime" is over. the second half of your trading day begins now. >> i like how they run over here with the camera. rates are rising, stocks are rigz, if it's happened before and it has, but it certainly hasn't happened very often. so what does it mean? why are they both going up simultaneously? steve lease man found some possibilities and he's standing by with answers and that will come in a short 30 seconds. they were dogs in 2013. will they be the stars in 2014? we're going to go through the list of naughty and nices, we're going to look at the naughties and debate them and see whether they might be nice in 2014.
and 15 days of shopping time left before christmas. we've got the "power lunch" focus group, where are shoppers going? how much are they spending? what are they buying and which stocks are likely to get a pop? which will drop? thanksgiving, the s&p retail index up .5%. not much. sue, despite the effort we've been putting into this shopping. >> i know. i've been working my shopping fingers off, ty. we're talking about that age-old battle, stocks or bonds. you mentioned it has happened before, maybe you can win with both. take a look the at the ten-year yield. it is up more than 3% in a month and the s&p 500 is up 2% in that same period of time. but even though both assets are ticking up right now, that probably won't last forever. senior economics reporter steve liesman joins us live from hq. >> hey, sue. always hard to tell how stocks will react. one thing is clear, everyone in the interest rate world, this
will be a rate cycle like no other we have ever experienced. some respects it looks now more like an easing cycle than tightening cycle even though everyone is bracing for the fed to remove in accommodation. here's why guys in the the market are telling me this could be different. rate rise begins at low levels. the fed pledged to keep rates low a long time. markets increasingly believe the low for longer pledge and some limits to how much the fed will tolerate a hike in long rates. the result is there is almost no historical comparison to this cycle. typically when the fed is throttling back on stimulus the yield curve flattens out. short rates rise and long rates rise less or stay unchanged. look at this, two-year notes are flat to down while long rates are rising. that's often the way they behave ahead of a fed easing cycle, not tightening. see the two lines move apart. for stock investors it's an upside down world engineered by the fed. the rate curve is steep as the fed removes or the market
prepares for the fed to remove a combination. so unlike the months after the 2000 recession you can see that right there, where the spread rose and see the blue line, stocks falling, stocks fell amid a steepening yield curve. look at the two lines moving together while rates rise. there are signs the fed is being successful at convincing markets to remain low for longer. the if fed funds future markets for june 2015. now trading at just 27 basis points down from 92 in in september. if the fed can maintain that belief in the market then this could mean stock investments would be like an early cycle easing rather than a later stage tightening. >> steve, separately before we let you go and do the research that you always do so well, there's new data out showing household wealth is hitting records. >> you've had the two come together in the last quarter, third quarter data, shows household wealth rose and stock. rising household wealth. only one component of the
equation for consumer spending. others components how much debt do consumers feel like they want to put on, how much do they want to pay down their debt and second is what happens to income. those are two other questions along with confidence. i like this, it's good for the economy, but it's not enough to say we're on the verge of a consumer breakout here. >> all right. but we're going in the right direction. >> exactly. >> watch mort again rates. something we're going to watch carefully. >> absolutely. thanks, steve. the stock bond kumbaya comes amid the question what will a drop in fed stimulus mean for stocks. is the economy strong enough to support the market without fed help? jpmorgan's chief strategist tom lee weighed in on that on "squawk box." >> i think a few weeks ago investors would have been pretty concerned about the idea of taper because i don't think the data gave them economy was at a skate philosophy. friday's job report and some of the ones we've had recently investors are getting comfortable if it does happen in december. >> and mr. lee also said he is
bullish on financials and large cap tech stocks. >> that brings us to seema moody. she is reporting on stocks that didn't fare so well in 2013. the big question here is, are they poised to take off in 2014 from dogs to stars? naming some names. >> that's right. we're calling it the dog to darling trend where some of the biggest losers of one year become some of the best performers of the next year. now in 2011 one of the biggest laggards was bank of america. it lost 58% that year. morgan stanley, not one of the biggest losers on the s&p 500 it did lose 42%. but thanks to signs of recovery in the housing market and better than expected earnings bank stocks did well. in 2012 bank of america became one of the best performing s&p 500 stocks gaining 108 %. now let's talk about 2012. out of the ten worst performing stocks in 2012, six are now positive in 2013 with pitney bowes and best buy up triple
digits. now hewlett-packard another winner up 91% this year while cliffs natural continues to bark like a dog for the second year in a row. joining cliffs natural at the bottom of the 2013 heap, pea body energy new month mining analysts are cautious on these names given the volatility in the commodity space. one tech name ha made the dog list, terra data down 32% this year. morgan stanley analysts citing concern over lack of growth overseas. so tyler and sue, analysts casting some doubt on if this dog to darling trend will continue. back over to you. >> thank you very much. blackberry another stock that has been a real dog this year. no surprise there. dominic chu bow wow has a market flash. >> let's talk about this one, tyler. the downward slide continues for blackberry. this smartphone maker hit a fresh 52-week low, $5.74 a share. see there, shares are down nearly 70% since last january when the stock hit a 52-week
high of about $18.5 per share. so again, maybe dog hoping to be a darling but investors aren't sure, sue. back over to you. >> all right. dom, thank you. joining me at the nyse is abigail. always good to see you. >> you too. >> founder of peak theories and cnbc contributor. hugh johnson, chairman and cio of hugh johnson advisors. ryder is helping us look at some of this year's dogs. there he is. first up is newmonth mining. i hope we're paying this dog, paying him in treats. shares of the gold producer falling about 49% this year. abgy gale, how do you feel near term and longer term about this. >> new million month mining i'm -- newmonth i'm neutral. i think they will put in a big turnaround next year. this stock might have further work toward the downside. for next year i think we're looking at a good turnaround. they put up positive free cash
flow. they're cutting costs, they're building out in the right way. they're becoming a lean mean fighting machine so if gold stays low they'll survive. if gold goes up it will go to the bottom line. neutral but probably positive next year. >> how do you feel about it, hugh? >> i would be remice if i didn't say hello to my old friend and employee abigail. >> great to see you. thrilled i was heard i would be with you. >> the story about newmonth a simple story, the price of gold coming down 27%. the price of gold is not going to turn unless we get significantly higher inflation and the chances of us getting significantly, and i mean 2.5% plus, inflation in 2014 or 2015, is not particularly good. so yeah, if i start to see the stock perform well, relative performance, abigail, you knew how important relative performance is to me, if i start to see positive relative performance telling me inflation is going to get significantly
higher, then the price of gold will go up and the stock will go up, but not until i see it. right now falling knife, don't touch it. >> all right. let's go back to ryder because the next dog we want to focus on is cliffs natural. and, of course, that's a resource company, shares of the iron ore producer falling about 35% this year. ryder, we need to get you a key light. right now up about 1.1%. >> i'm bullish here on cliffs. i think this stock has a nice shot of going up to 36 or so. however, a very technical trading situation. this stock needs to hold its 50-day moving average, indicator of positive bullish momentum. if it breaks below 20, i would outright sell it. why? this company is putting in a turnaround. they have been cutting costs and focusing on the right business. their last quarter good, iron ore coming back up. more to be seen. we need to watch that 50 day if it holds it, $36 back. >> you watch those kinds of technicals as well, hugh. >> i do.
and i don't see it here yet. this is a company like newmonth was sensitive to, you know, what's going on in inflation and the price of gold is a reflective of inflation. we're talking about very economically sensitive. what matters to this company is the economy has to do well. the economy xwigz is going to d little better in 2014 and 2015. 2.7 then 3% growth. it's still going to be fairly anemic growth when compared to other post-war recoveries. so still wait for good relative performance before you jump on this one. >> all right. ryder what's our last one? i think it's ibm. what do you think, ryder? yep. ibm. give that dog a bone. he's been really good. shares of the computer services company, volatile this year, down about 11%. hugh, why don't you take ibm first. >> ibm, strorts about ibm, what happened in 2013 especially the third quarter, is emerging markets business in china. china down 22% to revenues.
emerging markets down 9 %. what we're going to get in 2014 is i think a turn in china and i think that's written in the cards but i don't think we're going to see it in the emerging markets. so i think it's okay. you can buy ibm here and cross your fingers, look for positive relative performance, falling knife there too. wait for positive relative performance. >> it's down 7% so far this year. which is compared to the other two stocks, pretty good. >> pretty good. although i think it this will continue to be a dog of the dow next year, sell shares here, think it's going to 150. the fundamental's numbers in the wrong direction. maybe outlook, again, i think this stock is going down further. >> thank you both very much. appreciate it. ryder, good dog. good boy. ty, up to you. >> thanks very much, sue. parts of the east coast digging and scraping their way out today after heavy snow and ice fell in parts of washington, philadelphia, the new york area and boston. yesterday, and today.
flight aware.com reporting 1700 flights have been canceled today alone. here is the weather channel's mike bettis. >> reporter: we're not over with our winter storm just yet. we're following the snow through new england and maine. i-95, portland through augusta towards bangor. couple more inches of accumulation. in boston we have a mix going on right now. you go south or out toward the cape it's cold raitt rain. then a mix and snow when you get outside of boston off to the north side. for new york if we get anything else today, it's likely to be plain old rain. similar for us in philadelphia after record-setting snow that we saw during sunday. 8.6 inches. more in one day than we saw all of last winter. how about d.c. and baltimore, tomorrow evening's rush, could be a real mess. through jersey, new york, long island and right into boston, tomorrow watching for the next round of snow to roll back in. lining up from kentucky and west virginia including charleston, one to three inches, areas more than that including three to
five around d.c. and baltimore, edging towards philadelphia, yet again. new york likely to be on the lower end of that, maybe one to three inch here, just outside of town. hardly any accumulation at all. that's a look at your forecast. we'll send it back to you. >> thank you very much, mike. appreciate it. >> 'tis the season, a warm fire, family, friends, a christmas tree, when we come back, a special "power lunch" focus group. where ares the shoppers heading this year, what do they like, spending and what stocks might move? and from the christmas spirit unfortunately to some sort of evil spirit. wait until you see what happened to cause this riot when "power lunch" comes back. ♪ [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds
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we are 184 days until it the world cup and 16 days untils christmas, but despite the season take a look at what happened at this soccer match in brazil yesterday. pandemonium. the fans started fighting. police started firing tear gas into the crowd. they had to bring in a police helicopter. had to land on the field to carry away the injured. it was an awful situation. police replaced normal security guards once the fighting called down so the match could continue. fan violence has been a big issue in brazil. ty? >> all right. on that note, 15 shopping days to go before christmas. retailers are pulling out all of their last moves to get shoppers buying. how are the trends developing
and how is the dollars adding up? we have a consoumer expert and brought along a shopper mary. kelly is cnbc.com's personal finance and consumer report. the yule log glowing behind us, pictures of ice storms to my right and a nice little countdown to christmas. arabella, as you look at the overall environment for shopping this holiday season, how is it going? are people being cautious, aggressive, what. >> we're still seeing a lot of concern actually among consumers. there's a feeling that the economy overall is going to turn around but individual households people are still feeling weary. >> because? >> because even -- >> job loss, job insecurity. >> even if things are maybe starting to look a little better for them, they're still concerned about it maybe lasting long enough for them to take advantage of it. and people have also started feeling that they can get by with less. a mindset shift too.
also hearing some concern about things like the affordable care act coming into place. >> they don't know how much their insurance is going to cost them, how much they have to pay in deductibles next year. >> even at the highest end of economic spectrum we hear people have these high-end cadillac plans and their employers are starting to scale back the benefits. >> this translates into what people are spending overall. >> yes. >> how are you seeing it play out, mary? are you seeing people holding back? luxury brands doing better than mid market and down market brands, what? >> what we're seeing at the high end is luxury is still very good. customers have the money. they're changing the way they're spending and it's more understated than it was two years ago. it was bling and lots of i have money. now it's not like that. s aspirational luxury sector is what's really interesting. the upper middle class. >> the coaches. >> the coaches, michael kors, kate spades, yes, that's really improving, both here and abroad.
okay. >> there's music that came in. i don't know why, but it did. >> okay. >> who knows. maybe kate spade called for it. >> that could be. >> the aspirational luxury is taking care of itselfp. this coincides with the idea that there is an income inequality, that the high-end is doing okay in this country, the vast majority of people are still struggling. >> very, very true and to speaking to that aspirational luxury, we're seeing a lot of consumers are very interested in the flash sale sites like guilt.com, ru la la, one kings lane where they can get high-end brands a and seeing prices 50% off or better. let everyone else you might be doing okay or get standout gifts but not be breaking your budget to do that. >> lauren, your role in this is to be the ordinary shopper. i know you're not an ordinary sole in any way, but how are you shopping this year that might be different from the ways you shopped in prior years? >> well, i'm definitely a sucker
for brand names and designer things. i tend to shop at tj max, marshalls, places where i can find the awesome stuff, the michael kors purse, the nice tommy hilfiger stuff, all my bedding is all calvin klein and i love that about it. >> branded but at a discount. >> at a discount and that i can feel good about. >> do you do what is known as showrooming where you will go to a store, whether a best buy or a sachs, look, touch, feel, then buy on-line or do you really want the tactile experience of bringing it home and so forth? >> i have to be honest, i'm not much of an on-line shopper especially with clotheses. i feel like i have to try them on. i never buy clothes on-line. >> shoes? >> shoes, same thing. sizes are always different depending on what brand you're looking at and unl i have something really specific in mind, i won't really go do the on-line shopping. >> what about on-line shopping? is it taking off? she describes it, that she
doesn't fit her very well. >> correct. the other thing about what you were saying with discount flash websites, retailers are combatting that. they realize they've lost momentum and offering additional items like the coach bag at a special price you would find somewhere else but they're a macy's a comparable department store would offer that at a discount and the other thing they're offering in stores is the benefit of buying on-line and picking it up in store. so that you don't -- you're not having it sent to you but you can buy five gifts at once and go into a store and pick it up at the end of the day. you don't have to wait in line and search for a sales associate. >> you mentioned some of the brands doing well. >> yes. >> the aspirational luxury. what about some of the retailers you see doing better than others? are there ones that stand out to you? >> i think speaking to the more mainstream audience and they tend to be looking at the places like the gap, marshalls, places where they feel they can get that value for money. amazon, that is the go to place for about anything now.
people certainly the ones that want to find on-line bargains are going there. they can get anything they want and it's delivered to their door like that. >> amazon doing very well. are you finding the same things as you observe the shopping season? >> for sure. i think with on-line, the critical problem right now is that we have only a few more days before christmas, so people are starting to get concerned about am i going to get this in time. amazon has done well with the two-day prime shipping. they've started delivering on sundays in some areas around new york city. and as mary mentioned with is the site to store shipping that's another thing. people don't have to worry about am i going to be home to receive this. have it sent to their local store. >> is there deal fatigue out there? in other words, we've seen all kinds of promotions starting back in the middle of october and so forth. >> i think there's a lot of skepticism about deals and people are fed up with feeling maybe they're being manipulated by the retailers. people still want deals. there's concern about getting
value right now. people have budgets if mind, but if they can find the item they're looking for for less, they're going to be happy to do that. >> lauren, do you wait until the last minute hoping that the deal goes from 40% to 50% to 70%? is there a trigger point? what do you do? >> as far as holiday shopping, i'm kind of a last-minute shopper. >> anyway? >> but the best deals are usually after i find, you know. >> fantastic. >> thank you very much. like doing "the view". >> that's right. >> it's really wonderful. thank you all very much. >> thank you so much. >> sue, down to you. >> you are in your element, my dear. thank you. all right. american and u.s. airways officially close their merger today, creating the biggest airline. a deal for the carriers, perhaps. but will it be no deal for flyers? phil lebeau is live at dallas/ft. worth airport. >> sue, when have we heard this before? nothing is going to change with frequent flyer program, promise you. nothing will change. is that really the case when it
comes to american and u.s. airways getting together? we'll talk about that when "power lunch" returns. [ male announcer ] a body at rest tends to stay at rest... while a body in motion tends to stay in motion. staying active can ease arthritis symptoms. but if you have arthritis, this can be difficult. prescription celebrex can help relieve arthritis pain
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for a body in motion. it's time for the "power lunch" countdown. rejoining us phil lebeau at dallas/ft. worth airport. the merger between u.s. airways and american officially closes today. world's biggest carrier. a deal for them certainly but what does it mean to those who fly when it comes to ticket prices and the choices we're going to have? >> well, we have fewer choices.
look, you had eight major airlines just five years ago, and now that's been condensed to four. american is the largest followed by united and delta and southwest. there are going to be more than 90 million frequent flyers in the american frequent flyer program and officially the company says look, nothing is going to change, it's going to take us 18 months to integrate the u.s. airways and american programs together. but mark my words, sue, as with the other frequent flyer programs, when you have so many people in these programs, the airlines will make it tougher to redeem miles over time. we're already seeing that in the industry. we'll see that over the next couple years with american and the other carriers as well. >> oh, joy. can't wait. we've seen this movie before, phil. all right. topic number two, new rules for older drivers. tell us about it. >> yep. you've got more senior citizens who are driving. the baby boomers as they are aging, still want to have their mobility. they still want to drive as much as they have in the past.
and as a result, we're seeing an increase in the number of fatalities as well as accidents involving senior citizens. nhtsa said what can we do to improve the safety for senior citizens when they're driving. it's a five-year program. look for a lot of public education programs to be part of this as they try to say to those boomers who are driving, you're not as responsive as you used to be in the past. let's see if we can make it safer for you on the roads. >> all right. now let's -- i could not believe this story when i heard it, we've labeled it the worst layover ever. a man that fell asleep on a flight, he woke up to find himself cold, and alone, in a dark locked plane. first of all, what happened and two, how does this happen? >> well, officially express jet, which is operating the flight for united airlines, says it is investigating what happened. but my favorite part of the story is listening to the man who was locked on the plane explain what happened when he woke up.
listen to this. >> i woke up and i was like, looked up at the ceiling and i saw the lights were out. looked down the aisle, and nobody was home. >> i love it. i love it. because we've all been in that position where you're kind of groggy, wake up and look around and go where am i exactly. when we do it there's always somebody sitting next to us and we figure out where we are. can you imagine what he was thinking? the bottom line is -- >> i can't. >> i don't know what happened but i think the crew that cleaned the cabin probably just one look and said everything looks fine back there and really didn't sweep the whole plane. >> that i think is pretty obvious because that was my question, is didn't the maintenance crew see him sitting there? but who knows. there's more to that story than mee meets the eye, phil. >> they're supposed to sweep every plane but i've been on many a plane where there's a mcdonald's cup or something else, they don't always get
swept. >> i couldn't agree with you more. seen that stuff too. thanks, phil. good to see you. >> you bet. >> let's look at the gold market, shall we? gold prices are closing right now and sharon epperson is in the thick of things down at the nymex. hey, sharon. >> gold has been steady today up about $5 going into the close, around 1234 an ounce and the focus is what happens at the fomc meeting next week. we have heard from a couple fed officials today, james bullard the st. louis fed president saying we could perhaps see a small taper at the december meeting, but, of course, that replaps to be seen and traders say much of that has been priced in. we're going to see a taper at some point until it actually happens we may not see much of a reaction in the gold market. we are looking at, though, a number of traders bringing down their bets in terms of where they think gold prices were going. we're seeing bearish bets rise to a 7 1/2 year high. the outlook for 2014, barclays one of many saying the taper could put continued pressure on gold prices. they're looking at gold 1270 an
ounce by the end of 2014. back to you. >> wow. sharon, thanks so much. all right. let's check in on interest rates right now with the dow up 30 points, people are focused once again on that ten-year yield, ricky. >> yes, they are. i like what sharon said. the taper is already priced in. we'll see if it is or not. if you look at intraday of tens, yes, they're basically unchanged. one basis points, 1.5 basis points lower. you get the picture on this two-day chart after the big number on friday. it's holding low 280s for now. idling and waiting. but all the action today is foreign exchange. look at the 24-hour chart of the pound versus the dollar, up up and away, above 164. open the chart up, should we close in this zone it would be the highest yield close in about 28 months. but does it end there? no way. look at the dollar versus the yen. it's now blown through 103.25. these are the highest dollar levels against the yen in over
five years. tyler, back to you. >> rick, thank you very much. shares of viacom this year soaring upg 50%. what's ahead for the media giant and industry in 2014? david faber has an exclusive sit down with viacom's ceo next. high peaks and sky high prices. the middle class getting squeezed out of skiing. how much will lift it tickets set you back this year? the answer is a lot more. so ally bank has a raise your rate cd
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dauman,. kraft foods pushing higher. morgan stanley upgrading kraft to overweight, expecting positive results from productive and restructuring moves. the stock up 20% this year. staying in the food group, cisco shares soaring hit a new 52-week high, up 11.3%. the company buying u.s. foods from a group of private equity firms for $3.5 billion. and disney striking a deal with paramount pictures for marketing and distribution rights to any future indiana jones movies. paramount a un it in of viacom
will remain distribution rights to the first four films. >> paramount has been a strong performer for viacom which our next guest can tell us about. philippe dauman the ceo of viacom joining us live from the ubs media conference with david faber. hi, david. >> hey, tyler. thanks for that. appreciate it. as you said, philippe dauman joins us now. they were talking about pair a mount but it's the cable networks that power viacom. i would love to start there if i can. you were talking in your presentation which i was able to attend a lot about apps. one doesn't necessarily associate apps with a company like viacom but these seems to be proliferating. what is the strategy with introducing various apps for your various networks? >> well david, we want to reach our consumers wherever they are. we want to be a part of their life, be as immersive as possible. nickelodeon launched an app very successfully and quickly got over 5 million downloads of the app and allows us to do is to
have our viewers view the content, view the video content, even more content if it's part of an authenticated experience with the cable distributor, and also have new content made for the app. we'll have games, we'll have elements like the nickelodeon app, a do not touch button which every kid pushes and a fun thing pop up for five or ten seconds and it's about being funny and great opportunity for the advertisers. >> not just -- is it also for web enabled televisions? >> it's generally for mobile devices but the idea, we are moving toward an app centric world, even in the traditional environment where you will be able to select content more and more on demand. >> my samsung television i want to go to has a variety of potential choices. this may be one of them if i want a nickelodeon app. >> it would be one of them and
the important thing for us is that our audiences are heavy users of technology. so the more -- >> the 8-year-olds too. >> the 8 or 2-year-olds. a study done about 2-year-olds growing up and being very comfortable and using tablets. so as we create existing content and new content for those audiences, wherever they are, it increases consumption, monetization opportunities for our advertisers who would like to reach consumers in more places and particularly, where they're manipulating content it's a much more immersive, engaged experience and the monenitization on that, the price you can charge for advertising is very high. >> talking about younger kids a key demographic for you. nickelodeon for a while seemed to be stumbling. you mentioned ten consecutive months of ratings increases. has it been fixed? >> nickelodeon is in great shape.
what we did in our management team and nickelodeon did was to increase the amount of programming, speed up the development of both animated and live action programming, and in addition to the sponge bob and dora and hits we already had and teenage mutant ninja turtles we have several hits and a great pipeline going forward. it is really resulted in the ratings increase you've talked about and fueling our expansion around the worlz. the nickelodeon channels work well around the world and as we expand nickelodeon tv channels we broaden consumer product sales. we add to sponge bob and dora and turtles and new series come on we'll have great products for them. >> you ended a relationship with netflix. are they a key competitor for you? that -- in this very specific area in terms of kids programming? what are you seeing there?
>> we have a continuing relationship with netflix. on the movie side through epics -- >> i'm sorry. >> outside of the u.s. we've done several deals recently with netflix. in the u.s., we -- amazon made a compelling proposition to us and you're right in the u.s., nickelodeon is now on amazon and not netflix. >> was amazon a far better and when you say compelling i would assume it was largely as a result of them willing to pay more? >> well, the economics were good, it's a great environment for us as you know, amazon has a branded environment where nickelodeon lives as a brand because amazon is in the business of selling consumer products. we sell nickelodeon dvds and sponge bob merchandise. it's a great tie in for us and amazon has proven to be a great partner and we've proven to be a great partner for hem. >> on the environment you talked to a couple participants including david from discovery who i sat down earlier seems to indicate there's a little
softness in the advertising market. are you seeing that some. >> you know, on our earnings call a few weeks ago we talked about our ad sales growth bogey being in the mid-single digits. >> a lot of people thought you brought that way down, you didn't need to. >> we call them as we see them. what we said on our earnings call is the way it's playing out. a lot of strength going forward as we look at the rest of our year. there's a good ongoing dynamic, a lot of demand in our key categories. for example, in the movie category great mix for us as the year plays out in kids movies and otherwise. we're feeling optimistic about how 2014 plays out. ad sales including internationally which was a soft spot for us. we're seeing stabilization in europe and we are seeing good ad sales growth internationally for us this quarter. >> you are? >> yes. >> and, of course, the continued return of capital which has been an important component of the viacom story. one reason why the stock has
done well, $3 billion i believe it is over the course of the fiscal year that will end in september. that's your commitment in terms of viacom -- >> what we said is we're going to continue to buy back our shares aggressively. it's creative for us. at the same time we stay investment xwraeds. we will buy at least $3 billion of our stock in this coming year, buying $850 million in the quarter we're in and pay a nice dividend which we review every year. >> and finally on mtv, am i going to want to see jerks with cameras? >> well that -- >> what does that mean? >> you'll have to watch. that's one of the many shows -- not about cnbc, don't worry. >> when i look around i don't see any jerks. >> we have a lot of great shows for mtv. >> a lot of tattoo themed shows doing well on spike. glad to hear that. philippe dauman joining us, thank you. >> you're welcome, david. >> back to you, sue. >> david, thank you. great conversation. well, the budget battle rages on on capitol hill.
will the lawmakers get a little holiday spirit and get a deal done or are we heading for another shutdown showdown. plus, as the markets get ready for the fed to possibly pull back on qe, the big question on wall street is asking, can interest rates and stocks both rise together? what you need to know coming up. ♪ i want to spread a little love this year ♪ [ male announcer ] this december, experience the gift of unsurpassed craftsmanship at the lexus december to remember sales event. some of the best offers of the year. this is the pursuit of perfection. hi honey, did you get the toaster cozy?
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would you put that money for next year? we gave you choices. you probably want to know the results. and herb is back, he's been having a really tough time finding a contender for his worst ceo list this year. we're going to find out why, all those things and lots more, coming up top of the hour. see you then. back to you, tyler and sue. >> great to have you back. see you at the top of the hour. believe it or not the holiday season may be bringing out some bipartisan spirit on capitol hill when it comes to the budget and avoiding another shutdown. cnbc's washington correspondent, chief washington correspondent john harwood here with the latest on the budget negotiations. i hope they get the holiday spirit. that would be a pleasant surprise. >> i think everybody has been pretty much burned by the turbulence of the last several weeks and months and realizing there isn't a big deal to be had, but there is a very modest deal to be had and that is what congress is on track to doing.
they're not touching medicare, social security, the hot buttence in terms of spending programs, not closing top programs, raising rates, for republicans on taxes, but they have shuffling things around to relieve the budget sequester which both parties want to see happen. >> where is the area of compromise greatest, jon, and what are the issues they are willing to compromise on? >> it's different for different people. republicans and some democrats including chuck hagel at the pentagon who don't like the level of defense spending the way it's squeezed by the budget sequester and it gets squeezed more in 2014 by the sequester proportionately than domestic programs do. that gives some impetus for republicans to go along. democrats are raising the caps by an equal amount on the domestic side of the budget. these are things, priorities the democrats have for social programs, republicans have for defense, which are getting relieved and stitching together
solutions to fill in the gaps financially even at a little deficit reduction on top of that, things like raising the fees for airline companies pay for for airport security, that's on the revenue side and on the spending side, curbing federal retirement which some lawmakers don't like but it's a way to get some money. >> jon, thanks for the update. appreciate it very much. john harwood. ty, up to you. >> herbal life may be turning the tables on the hedge fund titan bill ackman. plus, this brings new meaning to the term ski out. how the middle class are getting squeezed out of the slopes this season. the power rundown is next. we'll tell you all about it. tdd# 1-800-345-2550 searching for trade ideas that spark your curiosity
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power rundown time. joining us frank and chu, no frank and chu, dom and robert. herbal life approaching investors in bill ackman's hedge fund suggesting they pull their money out of the firm according to reports. we reached out to herbal life and the company has no comment on the story. my approach on this would be fair is fair. you go after me, i'm going after you and your customer. >> it's not just that, it gets more complicated because the people that they may apparently be using to help kind of get this campaign going, are contacts they both shared in the
past, investor bankers they've both have been in contact with, both ackman's side and herbal life's side. this is a funny soap opra that gets better as the story develops. now they're going after each other in ways that we couldn't have even imagined. >> other side playing hardball, robert sfloonk dom's right, they were hiring ken mullis, one of the big bankers, so they pulled in the big gun. protest too much. it's one thing for a company to say you're wrong, it's really another thing to go after the investors of ackman's fund. ackman's fund has done pretty well this year, up 9% and 10%. i think they're just being a little too crazy about going after him and i think ultimately sends the wrong signal. >> pretty amazing the fund is up given the struggles there with the herballife short and jc penney's holdings. move on, getting back to the markets, dom. interest rates moving up a little bit. stocks moving higher. can they rise together some. >> if things are normal.
in the past we've always had this idea that stocks and interest rates they move in tandem, move together because that's the way it's supposed to work. it's just over the past few years the fed has been involved where you haven't had normal operations, fundamentals in the bond market and stock market so if you look at the overall picture, maybe it's a sign that some traders think that things are getting back to normal and/or that the fed has somehow adequately conveyed they're going to taper at some point in the future. >> i suppose there's an argument to be made that when interest rates are as low as they are, some rise in them is not as deleterious to stocks as it would be if rates were higher and they were moving up because of inflation fears? >> yeah. it all depends on degree and speed. i think one thing about the fed recently is they are so focussed on those short-term rates, they are not going to taper if they see a spike in short-term rates or the bond market start to do what it did in the summer and jump too high too quickly. i think the fed is going manage
this one and go up very slowly together next year. >> let's talk a little bit about story on cnbc.com right now, and that is high peaks and lofty prices. skiing, the price of a ticket going up and the middle class having a hard time taking part. the sport has seen a significant upward shift in investor -- visitor demographics. 54% of skier visits last year came from households earning more than $100, up significantly from a few years earlier. this feels like a first world problem me. >> it is kind of a my world problem actually, but i'm amazed it's nearly half of the people who are still skiing are making less than $100,000. i'm hoping to take both my daughters snowboarding an looking at the lift tickets, amount for hotel, amount for the boots, hats, it is really a luxury sport and i think most luxury businesses like skiing are aiming at the higher end because they can really the only guys that can afford it. >> i have to say --
>> not a bad thing. >> i have to say this, robert, that's all fine and good but i look at the cost of a lift ticket alone i've been trying to take my wife to go skiing and look at mount snow, places in vermont and for a day pass sometimes it's over $100. >> very -- it's gotten to be very expensive. last story came to us via the memphis commercial appeal and it's about the doctor who performed steve jobs' liver transplant a few years ago. seems while jobs was living in memphis during his treatment, he bought a home close to the hospital and then struck up a friendship. he an his lawyer. with the doctor who performed that transplant and that relationship was close enough that after jobs left his house, moved out, the doctor apparently moved in basically rent-free or close to it for a couple years before he bought it outright. it's certainly, robert, raises questions as there had been way back when, when he was undergoing this transplant, about how he got where he was on
the transplant registry. >> you're so right. there were so many questions at that time, was he getting better treatment because he was steve jobs, wealthy, and this cuts to the heart of the deepest fears by americans that the wealthy not only have better lives, but get better access to better health care and ultimately live longer. the most essential things in life actually the wealthy get better treatment and in this case, a liver where maybe someone else might not have gotten one and this house was a pretty big deal financially. >> yeah. dominic, it is not uncommon for people who are waiting to receive an organ donation to register in multiple venues, to multiple lists, as the saying goes. so we shouldn't be too surprised at that. it's like one out of ten or one out of 20 who do that. but this relationship between jobs, jobs' lawyer and the doctor does raise eyebrows. >> raises eyebrows. it's not like -- there's nothing in the report says he got preferential treatment or jumped
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let's take a look at the markets. the dow up 19, s&p down or up 4 and the nasdaq is up as well. da vitae, jc penney and my con three of the winners today. >> all right. sue, get home safely, see you when you get back. that will do it for "power lunch." >> "street signs" right now. will the fed deliver a nasty surprise this christmas? the chances the dreaded taper could come as soon as next week and how to play it if it happens. happy monday, welcome to "street signs." as we welcome back in the globe trotting mandy drury to the set. >> thank you. >> that's it. that was golf clap. your other hot topics what may be the best piece of economic news nobody else is talking about. if bitcoin succeeds will these two companies get sacked