tv Nightly Business Report PBS December 19, 2013 6:30pm-7:01pm PST
this is "nightly business report" with tyler mathisen and susie gharib brought to you in part by. >> thestreet.com, up to the minute stock market news and in depth analysis. our quantity ratings service provides objective independent ratings daily on over 4300 stocks. learn more at the street.com/nbr. the day after the taper, yields are higher, the dollar is stronger. which stocks could get a rush of money, and which ones could lose out? >> strategy shift, bristol myers making a big move but why are they getting out of the diabetes business now to focus instead of cancer therapy? >> a massive security breach at
target, one of the biggest retailers during the heart of the holiday shopping season. what is happening and being done to prevent it again. that and more tonight on "nightly business report" for thursday, december 19th. welcome, on this day after that historic rally in the markets, sparked by the federal reserve's decision to wind down the economic stimulus measures. stocks struggled to hold on to those hard gains of yesterday, but some of them did. trading remained in a narrow range with investors shrugging off disappointing data about jobless claims and home sales but the dow gained enough to reach an all-time closing high on track for the best week in three months. here is how the major averages ended. the blue chip dow stocks up another 11 points and the nasdaq fell a dozen and no new record for the s&p. it was down by a point today. the decision to taper the bond buying that sent the u.s. dollar
higher sent gold prices lower with the pressure metal settling at a three-year low down at $41 an ounce today. what does the taper mean for stocks, treasuries gold and oil? the fed's pull back is affecting investments in everything. it's also impac sectors in different ways. jackie deangelis takes a closer look. >> reporter: a day after the fed's announcement it's tapering the asset purchases, the yields on the ten-year treasury note is on the rise. while many don't expect yields to spike too high, estimates between three and three and a quarter percent, there is a potential to see steeper hikes as the fed continues to wind down the program. that's why now this wait and see period might be the time we see investors move out of sectors and into others in a market rotation. certain sectors are especially sensitive to interest rates. those could suffer in the next
three to six months. sectors like utilities, consumer staplings and health care, they can be rate sensitive for several reasons, mainly because they serve as debt and pay dividends which means they become less attracted when higher rates can be had with less risk. on the flip side, one of the big winners, the banks. they will use the rise of interest rates to their advantage. >> the fed isn't changing the rates on the short-term end of the scale. they will keep those relatively low and mortgage rates are going up. that will create a bigger spread, which is good news for mortgage lending. >> reporter: it helped with pricing power like materials, industrials and consumer discretionary groups. they perform well when the economy is growing, which makes them less susceptible to rate fluxuations. they also tend to have lower dividend yield. that's not to say there is no
risk. >> right before they started to wind down qe and ramp it up because the economy stupbled. this is a job janet yellen will have to finish. >> reporter: energy is an under performer and analysts see opportunity there. they are looking at names like big oil companies, exxon and chevr chevron, halliburton, schlumberger and more. more on the taper and how it drove the dollar higher in the currency market. many economists are for a strong dollar but that may actually hurt some multi national companies while others may see a boost from a muscular green back. sarah eisen has more on the potential winners and losers. >> reporter: they are heavy weights, some of america's biggest and most recognizable companies doing big business overseas get hit by a strger u.s. dollar, and now that the fed made it's move. >> the committee decided
starting next month to modestly reduce the pace, at which it is increasing the size of the balance sheet. >> reporter: the federal reserve is scaling back the stimulus and that helped lead to a stronger dollar. the value may rise eight to 10% next year. it's a double whammy for the bottom line of companies like caterpillar. take coca-cola which sexuactual gets the majority of the sales. those cokes sold in other countries are more expensive for consumers and the foreign profit is worth less money when coke brings it back home. it may hurt profit. mcdonalds is already feeling the impact. the company says profit in japan will drop by almost 60% in the year thanks to the dollar surge in the japanese yen. other big names with big overseas exposure, proctor and gamble andtive knee.
it's not harmful to everyone. >> the immediate aftermath, the dollar strengthen which is good for domestically based companies with domestic revenues. >> reporter: the strong dollar historically created winning opportunities for certain industries. retail, health care, software and services are among them. they do their business in dollars here in the united states. for "nightly business report", i'm sarah eisen. so what does the taper mean for your portfolio and is it time to taper-proof your investments? we turn to the chairman and ceo of revenue shares. vince, thanks for coming on the program. >> thank you, good to be here. >> before we get into strategies what people should do with the portfolio, start us off with is the taper a good thing? how should investors be feeling about the taper, or is trouble ahead? >> i think it's very good that the taper is occurring. it probably went a little
further than what they wanted to do because it's kind of artificially kept interest rates lower, which makes it difficult for banks to commit capital and make long-term loans for businesses and mortgages. it's having a negative effect and it's good to get rid of it, and the faster, the better in my view. >> you're in philadelphia, vince, one of my good friends in fellow, philadelphia jack boog l says don't just do something, stand there. is this the time you want to do less, rather than more in your portfolio? >> well, i think so, tyler. that is a good strategy as to just stay long with the stock market, over wait the stock market now and over wait corporate bonds. >> obviously, you're saying by implication stay away from treasuries. i assume you mostly mean longer term treasuries, and stay away
from reets, which might be sensitive to interest rate moves. >> that's right. i think the reet market, the entire market in the financial sector, the real estate trustings, some are training from five to ten times one year annual revenue which is unsustainable. i would stay away from that. in terms of corporate bond, we may be in an era not dissimilar to the '40s, '50s and '60s, the rates will rise slightly but not by much. >> let's talk a little bit about stocks. stay into stocks. let's go into that deeper, what kind of stocks, what sectors and u.s. or international? >> well, you know, when we're in an economic recovery and we are, what we monitor is the revenue growth of the s&p 500 and moved up from 1.8% to about 2.8%. what that means for stocks, especially globally, if we
continue expanding the revenues and they grow just a little bit more, we get to four and five percent and the normal is around six to seven, this is good news for emerging markets and good news for large cap stocks because they have really cut costs over the last several years, and that's going to be bottom line top line numbers going to hit the bottom line and a much bigger way going forward. >> big cap, small caps, no caps, what? >> well, the large caps, but i think the mid cap and small caps, although they will do well, i do think and they have been doing well for the last ten, 12 years, i think large caps will out perform. if the economy can grow and revenues can grow to five or six percent, you want to be more concentrated on large cap. >> we have a few seconds left, when should investors begin the
taper? do it now or wait? >> well, i think that right now what they should be doing is for the bond portfolios is over waiting the corporate bonds, go into mortgages, mortgages, corporate bonds and high yield. i think the economy will be strong enough, we won't have problems on high yield and begin to move there. i would also look at dividend paying stocks. i would be moving into utilities and energy stocks right now. i'd over wait those sectors. >> okay. all right. we'll leave it there. a lot of good information. thanks so much. as we mentioned earlier, a real set back in the housing market for a change here. the sales of existing homes unexpectedly fell in november down for the third month in a row to the lowest level for a year. high prices on those previously occupied homes with rising mortgage rates are to blame for the drop in sales last month. no drop today in shares of
bristol myers hitting 52-week highs for a time after astrazenika will sell a diabetes drug allowing bristol-myers to focus on something else, like a cancer drug. >> reporter: this seems to be about diabetes drugs, but it's really not. bristol-myers stopped selling in a joijt venture to invest more in cancer drugs. experts say this is a big move for bristol-myers. >> it allows them to monetize an unprofitable business, the diabetes business and invest it for much more potential in long-term growth. >> reporter: diabetes has gotten a lot of attention thanks to the epidemic status. according to evaluate pharma,
second to central nervous treatments for diseases like alzheimer's and that number is expected to grow at about eight percent a year. a bristol -myers spokesperson says the potential for longer term survival in certain cancers. it's something the drug maker believes will lead to a quote transformational shift in how the disease is treated, and it may be right. >> as soon as doctors figure out the genetics of a tumor, person and the immune system, that opens up a brave new world for new chemotherapy drugs. the big concern is how much do we personalize chemotherapy and how much can we afford it. >> with cancer treatments costing $106,000 a year, it's also a big business. in fact, analysts expect pharma
companies to allocate more to cancer treatment. and still ahead, complain like a pro as shopper d dissatisfaction rises, how to get your question solved quickly. the answer coming up. as we first told you last night, there is troubling news from target. the names, birth dates, account numbers and even three digit security codes from 40 million credit and debit card accounts may have been stolen from thieves. mary thompson has more details on this startling breach of security. >> how are you this morning? >> reporter: cyber thieves putting a bull's eye on target's
back and hitting up to 40 million customers in a massive data breach. >> this puts it into one of the largest data breaches in history. >> reporter: target says the breach ran for 19 days from the day before thanksgiving to sunday, december 15th. those impacted, shoppers using their credit and debit card for purchases at target's 1800 storms. online customers weren't affe affected but the breach made her think twice. >> i would rather use cash. you know you're not going to wounder if somebody else gets your information. >> reporter: target didn't say how the information was accessed, but said it included a customer's name, card numbers, a card expertation date and security code, known as track data it's stored on the card's stripe. analysts says this information has a higher price on the black market than information from online purchases. >> the reason the track data is
so much more valuable, that's what you need to create a counter fit card. if you steal data from an internet merchant where they don't have the physical card, you can't go use that at a store. >> reporter: purchases with a physical card at a store are harder to trace than online so fake cards are more appealing. they are working to identify the thieves and security analysts john suggesting those clients take steps to secure their information. >> you probably have to cancel your card and get a new one reissued. if there are fraud charges, let your credit card company know, they will refund them. there shouldn't be an out-of-pocket cost for you. >> reporter: for a retailer that said to expect more and pay less, the breach costing the client's trust and possibly sales ahead of the last-minute christmas rush.
for nightly business report, i'm mary thompson. >> to learn more how it could impact holiday sales, head to nbr.com. nike presented a quarterly rise and that's where we begin the market focus. higher selling prices and revenue around the world helped the sports apparel maker up the net income. the company did however slightly miss the forecast on revenue and shares ended lower at $78.26. dardon is selling or spinning off the red lobster chain after being pressureed to break up the businesses. the restaurant operator also reported disappointing results, the quarterly profits fell by 41%. in an effort to affect a turn around, it said it won't open new eateries or buy new chains and that didn't impress investors. shares off to $51.02. strong demand for cheaper
rvs helped winnebago, missed wall street sales estimates. now shares plummeted more than 13.5%, 27.32 the close. shares of carnival rose after supporting a small but surprising profit. the cruise operator beat analysts forecast thanks to higher tech et revenue and on board spending. carnival has been in combat mode after a series of bad accidents on the cruise ships. the stock rose 2.5% to $38 and che change. profits at kb homes went up but despite that, earnings came in well below estimates. the bottom line was hurt by a drop in sales on the west coast. the stock fell 6% to $16.47. by contrast, conagra foots
drew sales. the food giant gave a strong profit forecast for the year. that sent shares up more than 5% to $33.47. holiday season, of course, the busiest time of year for retailers and the time of year when customer complaints are highest. shipments that don't arrive, leather straps that go snap and products that don't work. how do you turn customer dissatisfaction into a good outcome? we asked about shoppers get what you deserve. elizabeth, welcome. i want to start, before we get to some tips and they are helpful, if your general impression of whether customer service in america is getting better or worse, what do you think? >> i think certain retailers are making it a selling point. if you look at department stores for example, they are fighting for cheaper online competitors and so they are using customer service as a selling point to draw people in. they are saying hey, come shop in our stores. if you have a problem, we'll
help you solve it. for some they are definitely doubling down on it. >> so some of them are saying the customer still is king, right? >> absolutely. >> let's go down dos and don'ts. we say there is an art how to complain. so, let's go over some of these real quickly about what to do and not to do. time your complaint carefully. tell us about that. >> yes, if you have to call a call center, they are open 365 days a year 24 hours a day. maybe not the best to call saturday -- on a saturday at midnight. you might not get the front line. if you have a more complicated problem, it might be best to wait until a weekday business hour time. >> what should my posture or attitude be as i'm on the phone with them? does sugar work better than vinegar? that's what my mom used to say. >> kill them with kindness. whether on the phone or in person, you're talking to another human being and chances are the person you are reaching to solve your problem didn't cause your problem.
if you go at them and say hey, listen, that is what happened, bedetailed and don't get too emotional and say can you help me? that will let the person give you their full consideration. kill them with kindness. >> so hard to do that when you're angry. you say don't let it escalate by asking for the manager, at least, not right away, why is that? >> some people go guns blazing, i want to speak to a supervisor right away. chances are your problem, unless really complicated can be solved. so have a thorough conversation with that person and if after some time you're not getting the resolution you want and you think that's a realistic resolution to ask for, ask for a manager. the person that picks up the phone is trying to help you, so give them a shot. >> does it help me when i go in what i want, what the remedy it is i'm seeking? i want you to take the goods back, give me a store credit, 10
extra dollars of bonus bucks for my troubles, something like that? >> set expectations early on. say what you're looking for. chances are the retailer won't offer up the store. they won't do something for you if you don't ask. if you go in and set a realless tick and say i want free shipping, i want you to replace this and overnight it to me. if you make that really clear, they will try and deliver that for you. >> so any bottom line final advice on, you know, how to hand ill it so you get what you want? >> first of all, speak up. a lot of people leave the store in a huff. the store doesn't like that. chances are they are losing your business and you don't get much out of it. voice your complaint. try and be nice. it's a very stressful time. everybody is time starved. you're looking for a resolution quickly, but if you can go in and be calm and kind, chances are you're going to get more out of it. >> you seem very nice elizabeth. do you ever get angry? >> i listen to so many angry calls for this story. i was -- it was an eye opening
experience to see how mad people get so quickly, so it reminded me spread a little holiday cheer, if you will. >> thank you very much. enjoyed the piece in the wall street journal. when you think of intel, you probably think of chips but the company is about more, including robo robots. how safe would the car you're driving be in a crash? if it's a honda, acura, subaru or volvo, you're in luck. they were the safest. 22 models that have collision avoiding systems were designated as top safety pick plus cars,
including six made by honda. another 17 earned top safety pick status including one each from ford, chevrolet, dodge and chrysler. and returning to the list this year, the nation's best selling sedan, the toyota camry. to read more, go to nbr.com. intel is at the top of the computer chip industry but also become a major force in the cutting edge development of robotics, including something called perception computing. a live look into the robotics lab, and what the chip maker is working on. >> reporter: inside intel's headquarters in santa clara, california a robot is hard at work. it's name is okulus and testing a tablet, zooming in on the screen, swiping past pages. it's doing all this so you can have a better experience when using the tablet yourself. no tv cameras have ever been
inside this robot lab before but this is where a team uses robots to improve phones, tablets and notebooks. intel first sent psychologists around the country who gather information on how thousands of people interact. that is fed and can measure the quality of experience in precise ways engineers can understand and use to make products better. is your tablet providing a smooth scrolling experience. does your smart phone let you zoom in with ease? >> okulous can tell you. a few feet, inside a sound proof room, there is also andy, otherwise known in the lab as atitas. he measures the clarity of the audio coming out of a phone. he wouldn't tell us who any of intel's customers are, but that are among the world's biggest
phone and tablet makers. they will always their have their hands full because device is have to constantly improve and that means robots must adjust as people's expectations change. >> they see friends with a new device and say wait a minute, that's way better than the one i have. now their expectations are up here, even though the device they own is down here. >> reporter: inside the lab, engineers keep working to make your devices smaller and easier to use. josh lipton, "nightly business report", silicon valley. and finally tonight, a user of the website read it who signed up for a secret santa exchange got the gift of a lifetime when she opened her present and realized it was from bill gates. in the gift box was a card that read to rachel from bill with a travel book and stuffed cow but the big present turned out to be a donation in her name of an actual cow to a charity called
heifer international that funds education and small farmers around the world and he sent a picture of himself. >> there it is. we just saw it. >> wonder how much it was. >> very cool. >> that's "nightly business report" for tonight. i'm susie gharib, thanks for being with us. >> i'm tyler mathisen. have a great night, everything. hope to see you back tomorrow. thestreet.com u up to the minute stock market news and in depth analysis. our quant rating service provides objective independent ratings daily on over 4300 stocks. learn more at the street.com/nbr.
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