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tv   First Business  KICU  October 23, 2013 4:00am-4:31am PDT

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how an oil boom forever changed a quiet town. in today's cover story... politically charged debates in dc are already seeping into the labor market. plus.... the competive edge you will need to get hired this holiday season.. and-- can you name the ceo's that are considered rock stars by employees. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas good morning! it's wednesday, october 23rd. i'm angela miles. in today's first look: the s&p record rise...stocks moved higher yesterday, with the dow up 75, the nasdaq 10 and the s&p rallying 10 points to a new record. gold added 25 dollars and oil is now trading below $98 dollars. the jobs
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number for september came out yesteday-- and the labor market showed signs of slowing. 148- thousand jobs were added to payrolls, the unemployment rate dipped to 7.2%. the october jobs report will be out november 8th. mark your calendars. the tax filing season is delayed by two weeks next year- because of the government shutdown. - and, amazon is raising its free shipping order fee: to $35. lincoln ellis of green square capital joins us on this wednesday morning. good morning to you my friend. > >and to you angie. > >let's talk about the reaction to the jobs number. we had a record rally yesterday. what is that saying? > >well, not too hot. not too cold. another goldilocks report in a series of goldilocks reports that we've received all summer long. earlier we thought that it was going to lead to a
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fed taper but given the shenanigans in washington that taper talk now off the table until march so blue skies ahead for equities. > >that was my next question. with that taper talk looking like the timeline is farther out. what do you do as an investment strategy here? > >well, it's interesting. you've seen the 10 year come in about 10 basis points and you've seen a bid in u.s. equities across all 3 major indices, moving them to new highs. but we still like the defensive high yielding sector. if you do get some turn at least you have a bit of cushion in terms of that yield to protect you on the downside. > >i need a couple of names. > >let's see...altria, the etf for the utilities, and johnson & johnson. > >good enough. thank you lincoln. > >you bet. in our cover story, the government shutdown and and
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debt limit talks that pushed both to the brink are going to cost us. one estimate says next month we will have 125-thousand fewer jobs than there would have been in otherwise. it will also take a quarter of a point off g- d-p growth for the last quarter. white house economist jason furman called the shutdown "a self-inflicted wound" that "underscores how unnecessary and harmful the shutdown was for the economy." "one intrinsic characteristic of businessmen is that they want to invest, risk-free as much as they can. they need to have conditions right before they invest their money." october's stumble wasn't on solid footing to begin with. september's labor department numbers show u-s employers a month before the shutdown added 148-thousand jobs. that's short of the 180-thousand expected. still--- barely enough to drop unempoyment down a tenth of point to 7.2%. "i think this was a rough jobs report for housing. housing could help jobs by hiring construction people but this
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last quarter was less than it was earlier this year." going by the unemployment rate, alone things are supposed to be getting better. but sectors within the economy are not responding equally. retail added 20,800 jobs but manufacturing only 2,000 housing, in the last quarter added 19,000. jobs but that's not quite half what it was at the beginning of the year. "this month's jobs report shows us the long-term challenge to housing. it's that young people are still living at home and not back to work. it's no different than it was a year ago." next week, officials at the federal reserve will meet to discuss monetary policy. many economists think the fed will maintain it's bond-buying program until sometime next year. consumers are tightening their
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grips on their wallets in response to the standoff on capitol hill. here's what found in a poll of the people... well, some of the responses i think were very clearly tied in with the government shutdown and debt ceiling brinksmanship's. specifically, of those that are holding back on their spending.. 1 in 5 cited worries about the economy and when we looked at job security in the month of october... it absolutely plunged. bankrate also found that 72% of americans are pulling back on spending. it's because of stagnate wages and uncertainty-- and that could result in hampering the growth of the economy. the state of new york could be in for a financial skid... new york's comptroller warns political uncertainty out of washington over the debt ceiling and funding the government could hurt wall street profits in the second half of the year. the state of new york takes in
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billions in taxes and bonus money from wall street. and, while the record-breaking stock market run adds to the fortunes of wall street firms..political pressure could take some away. truckers are making a ruckus over the government shutdown. in his state of the industry address-- the president and ceo of the american trucking association--tells members: "traditional allegiances the business community has had with the republican party are necessarily going to need to be re-evaluated" and, while there's merit to reducing the government and the deficit, the lack of willingness to compromise -- was reckless. in the 2012 election-- truckers contributed $700,000 dollars--mostly to candidates in the gop. for the tablet market, less is more. apple took the wraps off its latest lineup including the new ipad air and updated ipad mini with retina display. the ipad air weighs just a pound, has a faster chip, better camera and starts at 500- dollars. the new mini at 400. apple shares sold off slightly on the news, ending the day at 519 dollars. tech analyst rob enderle gave us his take on the
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new releases. "its well past time to have a product that picked up the momentum that the ipad is slowly starting to lose.the tablet market itself is starting to get soft and its well past time for apple to have a refresh and the mini didnt do it. so this was a punt down the road." apple says it has 81% share of the tablet market. a random sample of consumers shared their thoughts with us. "i have the ipad2. it's great but i think i need a new one. (why?) more speed." "not necessarily smaller because i don't want my phone to get bigger and my ipad to shrink. i like two separate devices." the ipads hit the market in november. it isn't just apple unveling new products -- both nokia and microsoft introduced new tablets tuesday. nokia launched its first tablet -- the lumia 25-20 along with new large- screen smart phones. and microsoft unveiled its own new tablets -- the surface 2 and surface pro 2. the hope is these devices will give a boost
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to microsoft's lackluster device sales. microsoft as an offer on the table to buy nokia's device division. the tech company popular for it's big discounts-- will attempt to re-gain loses from a super sell off yesterday. shares of online coupon company groupon fell seven-percent, yesterday. the move was so swift--it triggered the nasdaq's short sale circuit breaker. the stock dropped on an analyst report from i-t-g investment research warning of a decline in third quarter billings and low growth. the sec comes out today with a new way for more americans to invest in start up companies. the securities and exchange commission will formally-- propose rules for entrepreneurs to raise money online through crowdfunding marketplaces. currently, only accredited investors can put up money. the next step is lengthy sec discussion process including comments from the public. the online funding idea-- marks the third phase of president obama's jobs act. an atm manufacturer is facing
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bribery charges...the diebold company is accused of spending $3 million dollars on lavish trips and gifts to bribe officials in china, indonesia and russia to win lucrative business deals. diebold will pay $48 million to settle cases with the sec and with the department of justice. in the wake of a record-setting $13 billion fine levied against jp morgan chase comes word that bank of america could pay a $6 billion penalty for it's mortgage practices. regulators are considering the fine after accusing b-of-a of misleading mortgage agencies. s-a-c capital will close its doors in london. reuters reports the hedge fund told staff at s-a-c's london office this week that it's downsizing and will close that office by the end of the year. six employees will also lose their jobs. the company is in the midst of an ongoing insider trading investigation. and reportedly, closing in on a plea deal with prosecutors. employee reviews are in on well known ceo's. glass door dot com has compiled a list of the
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country's most liked and not so liked c-e-os: among the favorites: facebook's mark zuckerberg with a 97% approval rating and twitter's dick costolo with 96% lower on the list is microsoft's steve bal.mer and wal-mart's mike duke at 47 and 48 percent respectively. the strong stock market has been "very good" to corporate leaders. as corporate america cashes in stock options... ceo payouts hit a record in 2012. a study -- by global market insite, finds the top ten payouts hit 4.7 billion last year, a new high. the top earners -- facebook's mark zuckerberg with 2.3 billion dollars, richard kinder of energy firm kinder morgan with 1.1 billion, and tim cook, ceo of apple with 143 million. in today's earnings roundup...the goverment shutdown inflicted profit pain on -- data storage equipment maker emc. emc missed revenue estimates by 120 million dollars and cut its full year outlook. the stock dropped 4%
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defense contractor lockheed martin beat estimates-- united technologies also reported in solid results. delta airlines came in on a high note. earnings topped expectations across the board. the stock soared 4% harley davidson and coach were in line with wall street's expectations. coffee drinkers have a wonderful reason to get up in the morning...the price of coffee beans hit a four year low. great growing weather, especially in brazil, which produces more coffee than any country coupled with coffee inventories at a five-year high means consumers will be paying less for their morning cup of joe. coffee futures are down 22% in 2013. mcdonald's is gearing up to add pricier items to its dollar menu in a bid to spur sales. 2 and 5 dollar items will reportedly be added to the "dollar menu". such as--- 20- piece chicken mcnuggets for $5 and new burgers for $2.
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don't turn away -- there's plenty more ahead... a trader play on a stock that is sitting on the sidelines... plus... a stunning economic transformation. a new documentary takes us to a town in the midst of an oil boom. and, the christmas factor. why retailers are stepping up hiring for the holidays. first business continues, right after this. i'm going to pass chemistry, and i'll take it from there. i'm going to do what makes me happy. i'm going to work hard.
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be independent. live large. make the most of every opportunity. i knew i wanted to go to college. but figuring out how to pay for it? i didn't have a clue. the u.s. department of education has over $100 billion. and that's a lot of money. to help students pay for college. and the free application? you mean the fafsa. i did it online. it was easy. i'm never giving up on my goals. i will make a difference. i'm going to find out how to pay for college. i'm going to
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kohls is jumping on the thanksgiving bandwagon. the retailer will open for the first time ever on thanksgiving. doors will open at 8pm. macys and j-c penney also plan to open at 8 for the first time to get a jump on holiday shopping. chuck-- retailers are bracing for big holiday season, ky sisson reports, the seasonal job market is back and more competitive than ever. christmas has come early for those looking for work this holiday shopping season as retailers begin to take on an additional 700,000 employees nationwide. and while that's 52,000 fewer positions than last holiday season, economists say the overall retail employment picture for this year
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is modestly higher, due to an expected increase in fourth- quarter sales. we see a growth rate of about 5.8 percent better than last year, which clearly indicates retailers need to do some hiring. job fairs in orange county, california, are filled with companies looking for holiday workers. organizers point to an increase in job availability and earlier recruitment. it does appear that there are more jobs as they are coming in. they're looking for additional help, more than usual. they are bringing in employees earlier than they did in years past. allison swartout is an account manager in the temporary division of the abbott staffing group. i would say there are more positions than usual. we've probably seen double than what we saw last year. this is our best year for seasonal or holiday-based work. as companies compete to start the holiday season as quickly as possible, the pressure's on for job seekers as applications are stacking up and positions
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are filling quickly. there are a lot of openings for holiday work, but even those are hard to get. it's very frustrating. now that the government shutdown is over, the temporary negative effects on hiring like the e- verify system that determines citizen and immigration status is no longer a concern. and dr. adibi says the positive impact of the dow jumping more than 200 points when the debt ceiling was raised should keep sales up this holiday season and companies continuing to hire. more or less what the stock market says is that, sure, if you get your act together then we're in good shape. reporting for first business news, i'm ky sisson. to get a competitive edge when applying for a holiday job: employers say research the company, don't ask upfront about the discount and don't show up wearing the clothes of the competitor. still to come-- a stock sitting out the rally is catching one traders eye. and--the small town striking it rich with one of the largest oil reserves in the it a blessing or a curse? it's all coming up!
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from the headlines it's clear still tough times for job seekers in america. but not in 1 small town in north dakota where it is a modern day boom time. listen to this. "i make more money now than i've ever made in my life. we had 2 theaters in town. now we going to have a 14 plex, that's just 1 example." "i don't have an opportunity to do an open house because most of the homes are sold prior to the foundation being done." "i moved back to have maybery and maybery is slowly starting to turn into southern california." those are clips from a documentary that's coming out next year. it's called boom town wild west about formerly sleepy williston, north dakota. it was directed by greg lee and steven cahill. greg, 160 years ago we had the gold rush. this boom is all about oil. > >all about oil. it's amazing
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what's happening in this little sleepy town. it's just turned over. it used to be 2 years ago about 13 thousand, and now it's almost 30 some thousand people. > >and that's dramatic for you. you grew up there. you remember what it was like when you were a kid. > >yes. i was just this really quiet little mayberry like the guy said. it really is amazing. people really don't know what to do in some of their cases. they've had to leave town because it's too---they can't afford to stay there anymore. > >i've heard that some stores---retail shops---have had to fly in employees because the employees can't afford the lifestyle. > >right. and there's no housing. well, there is housing. they're working crazy buidling homes right and left but they can only do so much. > >i can anticipate your answer here but i want to hear you articulate it. why is this such a good story for a documentary filmmaker? > >it's a real human interest story--and that's what we're
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going after. we know there's all this controversy of oil as in any kind of resource we take out of this ground. but it's just such an amazing story because it affects everybody's lives in different ways. some people overnight have become millionaires and you would never know it. other people have no connection to the oil but they're right in the middle of it and they've had to actually struggle through it to see how they can survive. > >this boom could go on for a couple of decades so it may not even have peaked yet. is there any chance that you might have missed some good story elements because they haven't happened yet? > >you bet. yes. there's so many things. people just are trying to hang on and it's exciting. we go back there frequently because my family still lives there and we see changes within a matter of 2 or 3 months. major changes. the construction business is so big there. the unemployment is .5%.
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they just announced last week that they have more young people in one state than any other state working. > >it is a fascinating story. i will look forward to seeing it sometime in 2014. thanks so much. > >thank you. thank you for that bill. just ahead-- can you name the stock that has lagged behind on it's peers in the nasdaq. the mystery stock will be revealed next in chart talk.
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ehicle. when i came here, i... i couldn't move. [male announce david was broadsided on the highway. they weren't very hopeful at the time that he would survive at all.. [male announce an ied wounded mike in afghanistan. i don't remember all of the blast... was over 500 pounds of explosives. [male announce their physical injuries have healed. the traumatic brain injuries - tbis - haven't.
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the way i describe it is you're just afraid. am i going to start forgetting things? [male announce tbi is as serious as any battlefield injury. you're just not the guy you used to be. [male announce thankfully va has made important advancements in tbi seeing it, treating it, understanding it. and they're here to help veterans affected by it. i can see that what we're doing here at the polytrauma unit is to move from survivability to thrive-ability. [male announce if you think you or a veteran you know has sustained a brain injury, get screened. i served a total of 16 years. and at 19 years old, that's the first time i ever saw somebody die. coming back, i was raging. i started having pretty horrible nightmares. i started drinking a lot. i guess i never recognized it in myself. it all starts with going to the va. there's a whole community of veterans that just want to help you out. it's for the guys who couldn't come back,
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you owe it to them to live well. because they're not here with their families. joining us now is alan knuckman of trading advantage. he's watching a stock that has not participated in the nasdaq rally. good morning to you. > >good morning angie and that's the truth. it's really all about the nasdaq. the nasdaq has gone straight up 8% since october 9th. and it's up almost more than 30% now for the year. so this is a big bellwether stock that hasn't moved up---but the key is yet. > >we are talking about intel if you haven't caught on. that is the mystery stock here. so where are we going? is there any chance of a breakout? > >it looks like it's starting to do so. there's a solid base
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that we've seen since 2010 at the $20 level. so it's held that. it's essentially the year low. right now it's moved up to 24. it's been trading between 22 and 24 for the last couple of months. now it's back up to 24. that target has moved to 26. and a move to 26 the new high---target's 30. so there's about a 25% increase from where we are right now. > >what signs should we watch for a potential breakdown in the stock? > >look at this technically and from a technical standpoint the midpoint of the year is 22 1/2. that's the difference between the high and the low over the year. that's a very important point on a weekly basis to watch. i'm an options trader so i'm looking to buy the april 20 calls that are about $4 in the money and they're trading about 410-420. so it's only cost me an extra 20 cents for 6 months of time to look for good things to happen with limited risk in that strategy. > >you do need that stock to get above $24 alan. so we'll hope for that for you. > >right. it's already at $24 now so it's $4 in the money and any upward movement is gonna behave like the stock so it's a very good value for an options trader. > >thank you alan. > >thanks. coming up tomorrow--"hollywood" is ready to unleash yet another thriller at the box office this weekend. find out if the star studded cast of the counselor will create a sensation. that's it
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for now-- from all of us at first business news, thank you for watching. >> announcer: the following is a paid presentation for the nutribullet, brought to you by nutribullet, llc. [♪.. >> muscle aches, my backaches really started to decrease significantly in one week. >> the first night that i actually used the nutribullet, i actually slept really well. that was exciting. that was phenomenal. >> the bad cholesterol, which was 290, went down to 190. >> the changes that i saw in myself and my family were just amazing. >> announcer: join these people and thousands just like them and discover a machine that finally has the power to take years off


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