tv First Business KICU January 1, 2013 4:00am-4:30am PST
[first business them you're watching first business: financial news, analysis, and today's investment ideas. good morning everybody. i'm angela miles. thank you for joining us for today's edition of "first business" as we give you a look at what to expect in 2013. traders pitch some out-of-the- box ideas on market action this year. plus, as the housing market heals, tips on what younger buyers should know before opening the door on their very first home. and... order up! what food trends the restaurant industry has on the menu for the year. first let's say good morning to matt shapiro, president of mws capital, to get his predictions
for 2013. always nice to see you smiling on our show. > > thanks a lot. my predictions are going to get your viewers smiling even more, because i don't think anyone really believes- we've had a good year in 2012, but i think we're going to do even better in 2013, and my predictions: 1700 on the s&p 500 and over 15,000 on the dow. do you believe it? but you heard it here first. > anything is possible. tell us what you are basing that upon. > > first of all, the economic news is the best we have had in years angie. employment is coming back, housing is doing well, corporations are doing well, and, you know, once we get through the fiscal cliff stuff, i think it is going to make people finally make the transactions, get hiring and investing, and make a good story already even better. realize in 2012, many indexes went up about 15%. so don't you think we could rip off a 20% year? and even if we get close
to that, we are going to hit new highs in the s&p 500 and the dow. > something that is always noticeable in the market, as you know matt: it is the best time to invest when it feels like it's the worst time. so is that what you're telling me? it might not feel like a great time right now, but now is the time to actually put a lot of money to work. > > exactly. the alternatives are poor. hedge funds did really poorly in 2012. i don't think you are going to get quite the returns on bonds. and you've got to get the money working in the economy. think about it: no one really thinks we can get back to all-time highs, even though we had a good year in most mutual funds, indexes and general stocks last year. so there is a lot of skepticism that we can get going. but you heard my targets right here. > i love that i heard them here. so it is all about the indices. but are there individual stocks that you would buy at this level? > > the past few years a lot of people have been focused on sort of special situations, especially mining stocks,
commodities, and natural resources. but i think it is sort of the all-americans, your procter & gambles, your american expresses, so don't forget your financials and your health care stocks. get that waiting back up to where it should be. > all right matt. we have your call on tape. we will play it back at the end of 2013 and see how you did. > > i will see you in 365 days. with no presidential election, no stimulus programs on the horizon and healthcare reform upheld, 2013 should be smooth sailing for the economy, right? to almost no one's surprise, it's not that simple. despite that, in our cover story, we found a few people willing to stick their necks out and share with us their predictions. most everyone we found had reason for measured optimism. housing prices, for example, are going up. "there's hope that you can climb out. that's just a game- changer." and that opens up housing- related investment, which in turn may help stocks. "i see certain sectors helping the stock market. i see that
true of the housing sector. look at real estate, look at building supplies, things that have been down in the past." as for jobs, john challenger says though the economy has been adding an average of 150,000 jobs a month, we may not need that many to make unemployment itself go down. the reason - baby boomers. "there are many more baby boomers retiring, so we don't need nearly as many new jobs as we did a decade ago." as for overseas trade, china's economy is predicted to grow at 7%. it used to be 15%. "hu jintao's approach was 'build the middle class.' i don't know if the next leader will make that his goal." and in europe, observers think the worst is over, but the
first half of the year will be slow. "they're going to make progress, but not enough to change much. what they need is private equity, private investment." finally, investing in community or regional banks - an alternative that may surprise you. "you can invest in small banks and help your community. if enough people do that, the country will improve." lastly, financial analysts say the ipo calendar will be worth tracking in 2013. with roughly 150 private companies ready to make their initial public offerings, more than in each of the last two years. the new year is bringing in a new form of identity theft. jennifer waters of marketwatch.com tells us the criminals are closer than you think. good morning jen. > > good morning there angela. these bad guys can be your neighbors. they could even live in your house as well. that is how close they are. this comes from id analytics. they did this four-year study just to
figure out how close were these id thieves related. and what they found was there were homes or families - a husband, a wife, four 20-somethings - stealing ids and stealing information and using it to open up credit card accounts or bank accounts or cell phone accounts. just these people alone comprise some 10,000 fraud rings in the u.s. that doesn't include those sophisticated geeky guys over in eastern europe in a boiler room during that. > what can people do to protect themselves? > > some of the stuff that we always talk about, and that is that you have to shred everything, because now you really know, your neighbors are going into your garbage and picking out stuff. so, shred everything. everything you have, no matter if it has any other identification about you besides your name and address. also, you have to guard your social security number, because that is what most of this id fraud is based on. it is really
important to make sure you don't give it out to anyone, of course. give it out only to the people you need to, which is your job, your insurance company... don't give it out at a medical facility, for example. if you go to the doctor and they are asking you for it, don't give it to them. tell them your insurance company has it. because we have seen some theft come out of there as well. > that sounds like a great plan. that is jennifer waters of marketwatch.com. ibm is drastically changing its 401k plan for employees. beginning this year, instead of matching employees 401k's on payday, ibm will pay one lump sum at the end of the year. the new plan is stirring up controversy. critics say employees who quit or get laid off from the company before the end of year will not receive the 401k lump sum. they also miss out on interest from the entire year. others say the plan is good for employees as it keeps fees low and still matches their salary by 6 to 10%. with interest rates at historic lows and housing prices showing signs of climbing, more
americans are considering dipping their toes back into the housing market. but the process of getting a loan to buy that dream home can be daunting. paul eggers has some simple tips to keep in mind if buying a home is your new year's resolution. maurizio fiori is hoping to buy a home in 2013. he's looking to move his growing family out of their chicago apartment and into their very own home. 'i've been scouring the internet, and talking to agents and mls and all the sites almost daily.' a former trader, fiori holds stakes in a diversified portfolio of successful small businesses, including a wine importing company and a craft brewer. in 2006, before the worst of the financial crisis hit, many banks would have been bending over backwards to lend him lots of money at exotic terms. today, even though he's willing to put up 30-40% of his cash on a down payment, bankers aren't exactly lining up to
lend to him - or to anyone else for that matter. 'basically, the only good candidates for a loan are people who do not need a loan to begin with.' 'well, unfortunately things have gotten a little tighter in mortgage lending.' in his work helping homebuyers find financing, michael mcauliffe has seen the mortgage process change dramatically the past few years. gone are the loose lending requirements and lax regulations of 2006. today, it is all about tougher standards and more serious oversight of every loan. 'banks made a big mistake giving out all those loans, and regulators probably weren't looking as closely as they should have been. so, now they're both making sure that the finger doesn't get pointed at them again.' to get that loan in the new year, mcauliffe says be honest about what you can afford, save for a large down payment, and don't count on that loan until all the papers are signed. 'the big thing is, don't do anything to negatively affect that credit score. they're going to check your job that day, they're going to put your
credit that day. in fact, they're going to look at the appraisal to make sure it all makes sense to them. fiori remains hopeful that even in this tight-money environment, financing will ultimately come his way in the new year. "i am looking forward to 2013, and i hope that all the money that has been sent to all the big banks trickles down to the people that want to buy a home for their family, somehow." mcauliffe adds that while mortgage rates have remained below 4% for some time, he sees them climbing higher throughout 2013. still to come: so crazy it just might work. we'll get some off-the-beaten- path ideas on the 2013 stock market later in traders unplugged. but first, why 2013 might be a good time to go abroad with your money. bill moller joins us for a preview of hot stocks, next.
here's a question: how's your equity portfolio looking these days? a little anxious about making a move? well, we recently spoke to john blank, chief equity strategist at zacks investment research. he gave us a pretty good look ahead at 2013 and where the opportunities may lie. bulls or bears, who will be doing most of the running in 2013? > > in my camp, i am a bull, and i think we can get a 10% return out of next year. > very good. how about through the year? will it start out looking a little weak and we will find our stride in later
quarters? > > that is mercury to me. i think you are probably likely to see a january effect and have pop, which is traditional. and i expect through april or may you might see the bulk of the run, and then it will taper off. > focus on some sectors. a lot of people are saying healthcare is going to continue to be robust. how do you see it? > > i am actually bullish on global sectors. i think we are going to see an asia-pacific-, china-driven market that we haven't seen in five years. and i see i.t., which is beaten down right now, but i would take a position in. i see industrials, which have good global exposure as a stock area that would put some money toward. and i think materials, the big material companies that have been beaten down by the china slowdown, are coming back. > a lot of people, i have been reading on the emerging market, they are saying if you don't have positions in emerging- market companies, you are going to be missing the boat, because a lot of upward growth potential lies there. > > it is true, but i would say
that there is also emerging market debt, corporate debt, in companies like this, or sovereign debt in emerging markets is another place to look. i think there's a lot of tools to put money to work in the emerging markets, and i think people should use all of them. > what kind of balance do you think for a diversified portfolio should people be considering in this mix of different kinds of sectors? > > they certainly should just be bullish equities going forward. we have zero return in stocks, we have a treasury rate which is benchmarking all of the interest rates at 1.7%, which really means it's basically not going to go down, which means prices on bonds are likely to fall. so, you have to stay in a risk position, which means equities or equity-like instruments for the next few weeks, few months. > don't be a cowboy. be cautious. > > be cautious, but also understand caution means taking risk, not not taking risks. > john blank from zacks investment research. thanks so much. > > thank you. you own apple stock? it's been kind of a roller coster year, hasn't it? we have our traders
or oil this year? andrew, will it be a year of apple? > > i don't think so. i think we are going to go through a massive recession. i like to use the word "gloomy" for 2013. i think it is going to be very bad. we were up 18% in the s&p 500 futures. we are going to start selling off, we are going to start selling off hard, and you are not going to be able to find any buyers. > > thanks for tuning in and getting your cheer right here. but i am looking for the s&p to get to 1600, 112% higher than we are now. > > this other time i was trying to give him odds we don't get to 1600. he couldn't name odds because there are no odds. it's zero! > > -you add it on to the 1470, you get 1600, it's only 12% higher. that is about what the market did for the year 2012. very, very attainable, as corporations continue to make, make, make money. > round two: dollar power? will this be the year of the death of the euro? > > to continue my optimism- > > absolutely. > > i thought last year was the death of the euro. > > it's a soap opera. it goes on. > > it was the year before, and it was the year before that. > > the euro is absolutely going down. we do not have anything solved i think. germany just
keeps giving them money. at some point, germany is going to say, "hey, you are my child. grow up. you can't have any more money. sorry. you're out on your own." your child is going to turn 18 or 21, and they are going to say, "sorry, you don't get any more money." germany goes, "you're done." i am looking for the euro to get above this $1.32 level- > > down to $1.20. > > -push to $1.36 here in the near-term. so it's still got a lot of power left. > all right, round three: sector spector. which sector will outpace the market action in 2013? > > i want to go after some value and look at some certain sectors that have beaten down and are out of favor. i am going to say it right now: coal, steel, things of that nature. > > alan is into this belief that china is not slowing and that they actually come up with these numbers that the government cannot rig. none of the companies in china actually have real accounting companies auditing their numbers. including the government- > bonus round time. let's take a look at the top new year's resolutions. name the most popular resolution for the new year. is it:
drink less alcohol lose weight or watch more traders unplugged on first business? > > use stop-losses. > > i think it is c, and i think alan is going to realize it turned into the biggest bear ever this year. i should have listened to andrew. the market is going to hell. > > you guys are great. thank you. prepare your taste buds. a look at what new trends the restaurant industry is cooking up for the new year. stay with with us.
like fashion and hairstyles, food service in fact follows its own trends. so what's in store for the new year? david henkes is a vice president at technomic, the top food service research & consulting firm. i guess you would have liked to have gone out and done some of the field work yourself but you didn't. you're a researcher. > > well, unfortunately i get the desk job and we have other people that go into restaurants for us. > i noticed looking at the list - you cover a lot of areas - that health trends are very
important. in fact, vegetables will be giving meat a lot of sizzling competition. > > we've seen a lot more vegetables appear on menus. part of it is driven by people going from vegetarian to what we call flexatarian. people that are vegetarians at times and other times having meat. but we're seeing a lot more people that are interested in vegetable menus. so restaurants are adding more things like carrots, kale, brussels sprouts to the menu. part of it is driven by the fact that protein is getting more expensive and so restaurants are naturally adding more vegetables from a cost perspective. > brussels sprouts, i'll have to look for that on the menu, i haven't seen them. > > i like them though. and great grains on the health side, they are also reigning in prominence. there certainly is an issue with gluten-free that a lot of consumers are trying to avoid, and so there are gluten-free grains that are out there. couscous and bulghur are some other types of grains that are starting to appear on the menu, and a lot of it is driven by not only consumer demand but also from a cost perspective in terms of operators trying to be more cost-effective on the menu. > are you telling me chicken - isn't it already ubiquitous?
more chicken? > > more chicken. but also different styles of chicken. we're seeing a lot more deep- fried chicken on the menu, which, except for some fast food restaurants, you never really saw deep-fried on the menu. in addition, we're seeing a south american style that's more of a spicy chicken that's really starting to make inroads in restaurants, and it's really popular overseas. > and overall south american is going to be in a sector of its own? > > we're starting to see more brazilian food. south america really is hot. the chicken we talked about and a lot of the menu trends are starting to bubble up from south america and are really starting to make inroads on the menu. > and you also find that restaurants are going to be seeking differentiation through libation variety. the drink menu. > > beverage is a great area for restaurant operators to innovate. we're seeing a lot in terms of microdistilled liquors and spirits. craft beer is certainly hot right now and non-alcoholic. whether its specialty drinks, specialty mock-tails, beverage is a great place to innovate and provide a