tv Street Signs CNBC November 19, 2013 2:00pm-3:01pm EST
jones industrial average now down 28 points on the trading session. part of that is linked to the fact we've moved back up through the 2.7% mark on the ten-year note, we're alt 2.72% last time i checked, and ar cat cashin te me is taking the market down. >> that will do it for today's edition of "power lunch." >> it sure does. have a great afternoon. "street signs" begins now. ♪ life in the fast lane makes you lose your mind ♪ if you like life in the fast lane this is the place to be. we're hitting tesla and portia stories this hour. brutally handsome and terminally pretty. not us, the show. welcome to "street signs." your other hot topics two real estate millionaires an how they're making money, why boring
may be the new sexy, at least when it comes to stocks, and what a year that is getting narcissists like us a big reason to smile at ourselves. >> by now you probably heard all kinds of stats about this market. i found a nugget you may not know. you can see the dow has small losses, but if the dow does manage to end higher today, it will be the fifth straight gain for the dow. doesn't sound so mind blowing, right? believe it or not even with the rally we've had all year we have not had a five-day dow streak since march. to bob pisani at the nyse. down a little bit, but we had the big warnings from big name investors like carl i scahnicahs like those warnings can't knock it off the shelf. >> there's little room for error so put up the dow. trading in narrow range. about a 60 point range, sitting right near the lows for the day. the market has dropped a bit
here as interest rates, ten year moved 2.7%. look at the cloud computing stocks. we did see salesforce out with good earnings guidance below expectations. the guys in the space all down. not a lot of room for errors. yellen has been on the tape in the last half hour or so, a letter to congress, put up the commentary. she's trying to argue right now that monetary policy is going to remain highly accommodative lock after one of the economic thresholds for the fed funds has been crossed. 6.5% unemployment rate. what she has to do right now convince the bond vigilantes they don't have anything to worry about in the near term, convince everyone tapering is not tightening and mandy, i think you're going to find this is going to be one of her main missions in the next several months. bonds moved up on this. this disconcerting because she tried to talk them into being quiet. we'll see. going to be a debate in the next
few months. >> maybe years. bob pisani, thank you very much. well, the debate over whether we're in a stock bubble goes up with the market. the higher we go, the more concerned some get. hyperbole aside one reason to be a little concerned. some of the high flying stocks that helped drive us higher are rolling over. regeneron, pioneer, natural resources come to mind. so dominic chu is here now to show us perhaps maybe at least when it comes to stocks, dom, that boring is the new sexy. >> you know, it could be for the stock market and the reason why, we were looking for names that were maybe the opposite of some of the names you mentioned. we took a look at the market risk factors in a stock. something called beta. means is a stock more or less volatile than the year all market. we find interesting insights into big names that have been less risky than the market, less up and down, but outperformed the s&p over the last 12 months. check out health care for one, always in the headlines. look at pfizer up 34% over the past year.
yet it has less volatility, statistically, than the overall market. same thing united health group up about 38% and aetna up 59%. big plays into names like health care, sexy but not as volatile as the overall market. another sector that was interesting to look at was financials overall. these guys, yes, they provided outside returns with less than market volatility. cit group up 35%. wells fargo up about 36%. and then pnc financial one of the regional banks in the u.s. up 39%. so sometimes if you look hard enough, there are ways to find market turns without many of the ups and downs. >> we've got wall street's biggest brains here to discuss. jpmorgan funds david kelly and cnbc michael farr. michael, what do you reckon, borrowing but sexy or something
else? >> i am so thrilled that boring might be the new sexy. i'm a 52-year-old conservative portfolio manager. >> you are sexual all over again, michael. >> this is the best news i've heard all day. thank you. you know, i think that -- i've been -- i like these boring stocks for a long time. mandy, and certainly been criticized in some of the more go-go periods. but as the risk trade may be coming off, and the market up over 160, 170% since the february 2009 lows, you know, the rule is buy low, this is not low. know what you own and the boring stocks are understandable, good solid balance sheets, dividends, solid earnings, good cash flow and well managed. playing defense really makes sense, but you're also going to be the recipient of money fleeing out of the risk trades. i think it makes a lot of sense, boring will be beyond sexy, it's going to be profitable. >> david kelly, are you
recommending any kind of a sector or stock rotation to your clients? >> no. i think you got to be careful with the idea of being defensive here. a lot of defensive stocks are also high dividend payers and intersensitive. if you think there's going to be a pullback, i don't think you should try to time pullbacks, you need to make sure you're not doing it in a way that exposes you to higher interest rates. overall, when we look at the market i mean this is clearly -- we're not clearly green light territory anymore, not red light territory, it's orange light, proceed with caution. i think there's still a sea of liquidity flowing into the stock market from the bond market from cash. i think that's probably going to continue. i don't think stocks are cheap but i think we can ride them higher further here. people need to be cautious and make sure they are balanced in their portfolios. i don't think this is a time goat short equities yet. >> you disagree with what carl icahn and jeremy granthom is saying? >> i'm nervous. much more comfortable for the last four years when stocks were demonstrably cheap watching them
go back to fair value. a pendulum doesn't stop at the bottom. my real problem is i think the stock market is going to get expensive before the bond market is ever cheap. i think one of the many bad things the federal reserve is doing here is it's going to eventually end up building a stock market bubble. i don't think we're in bubble territory. balance, diversified. take a look at international stocks which are cheaper but i think people should still be positive in equities, relative to fixed income and cash. >> okay. >> we're -- >> jump in michael. >> we are seeing economic support. we are seeing some expanding numbers. we are seeing good retail numbers all of a sudden. we saw good numbers from macy last week, good numbers from home depot and lowe's. the economic data are not great, but they're not bad. and they're moving up. and when i talk about those dividend stocks, i'm thinking about my johnson & johnsons, procter & gamble. you take a look at the cvs' of the world but i don't think you go flooding into the banking
stocks. i don't think you go into consumer discretionary at this point when there still may be something of a weaker season. so owning those solid balance sheets i think with some dividend, i agree with david, not the high dividends because those stocks have been trading on dividends could really suffer in a pullback. but look, this thing's got momentum behind it. greenspan said irrational exuberance at dow 6,000. eight months later the dow 8,000, couple years later 11,000. things that are expensive can become a lot more expensive but you better know what you own and have a chair when the music stops. >> that's good advice all the time. know what you own. michael and david, thank you very much. do appreciate it. >> thank you. >> all right. happening now, the jpmorgan and justice department officially announcing a record-breaking $13 billion settlement. that deal would end a series of lawsuits and investigations that stem back to mortgage bonds issued before the financial crisis. kate kelly is live outside of
jpmorgan's headquarters on this big day. kate? >> brian, thanks so much. we are awaiting the details and the documents on this $13 billion settlement, widely expected to be coming all day, hopefully any minute now. in the meantime downtown in manhattan from where i'm standing, new york attorney general eric schneiderman is preparing for a press conference in which he is going to comment on said settlement which we still haven't seen the details of yet. we're probably going to be hearing from the u.s. attorney in the sacramento area, ben wagner, perhaps later today. but here's how we understand it. $13 billion settlement with about $4 billion going to the fhfa, $4 billion forward consumer homeowner relief measures, $2 billion in financial penalties and a balance of $3 billion going to various credit unions and other state officials, including schneiderman, brian and mandy. we'll give you the details the minute we get them. we're still in a little waiting game. >> am i right in thinking once this is said and done, despite this settlement sort of coming to a close, there is still another 9 or so investigations
with other government agencies that are still outstanding against the bank? >> you know, that -- it's true they have a number of lingering legal issues. it ranges, runs the gamut from a scrutiny of their hiring practices in china and whether there was a prids quo pro between hiring the sons and daughters of chinese officials and winning the business, between the justice department and s.e.c. to whether or not they manipulated power markets an this is a criminal investigation ongoing in the new york area, a parallel to a civil investigation they settled with the federal energy regulatory commission this year. a variety of things which they've disclosed, but you're right, they could have billions more to face in legal penalties, mandy. and 8 to 16 just on mortgages in the eyes of the at least one analyst. >> the only real winners are the lawyers. kate kelly, thank you very much. developing story there. let's send it over to dominic chu for a quick market flash. dom? >> that's right. mandy, pandora singing the blues, shares near their session lows, down about 3% after
getting smacked with a downgrade at albert freed, to an underweight from a market perform keeping the price target at 23 bucks. pandora reports earnings on thursday. albert freed said this is a valuation call. back to you. >> thank you very much. we are watching. up next -- i didn't mean it like that, the ticker. the honey badger ceo his cars are catching fire, the feds want answers but elon musk doesn't care. the question is, should you? >> and two of the smartest minds in housing go going to be joining us with where they think our recovery is heading. america's sue apocolypse. ahead when "street signs" returns. (announcer) at scottrade, our clients trade and invest
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take a look at shares of tesla. the stock up about 3%, to 125.56. it did take a dip earlier on news that national highway traffic safety administration is investigating battery fires at the company's model s. founder elon musk is out defending the company. phil lebeau is following the story from the l.a. auto show. musk is saying why is my company getting so much attention over a few fires when normal gas powered cars have thousands of fires per year. is that a fair criticism? >> from his perspective it's fair. have you been following his tweets today? the most entertaining part of the auto industry today. back and forth between elon musk and the national highway traffic safety administration rebutting
some of what his points are. start first off the question of this investigation, let's be clear, and the launch of the investigation. earlier today, elon musk put out a tweet saying on friday last week, tesla vp of regulatory affairs jim chen invited nhtsa senior staff to conduct a review of the model s, saying we invited the investigation. well nhtsa came out later in the morning and said nhtit i nhtsa' decision to open any formal investigation is an independent process. in regards to tesla the agency notified the automaker of its plan to open a formal investigation and requested their cooperation which is standard agency practice for all investigations. the automaker agreed to do so. then musk comes back and says what makes this incredibly unjust is that the model s to date has the best safety record of any car on the road, no injuries or deaths ever. there's no timetable for the model s investigation. and it's still unclear if this investigation will actually lead
to a recall. on the topic of whether or not there might be a recall, listen to what elon musk said at the deal book conference last week. >> there's definitely not going to be a recall. there's no -- there's no reason for a recall, i believe. the perception is if you read the headlines it sounds like tesla's have a greater propensity to catch fire than other cars and in reality nothing could be further from the truth. >> so there you have it. one thing we know for sure there is an investigation. whether or not it leads to a recall remains to be seen. hear that music? that is the porsche stand. they're preparing for the unveil of the macan small suv later tonight and coming up in a little bit, we're going to give you a sneak peek and we'll talk with the chairman of porsche about the macan and a lot of people are excited here about seeing that small suv. >> i'm excited for you just being there, phil.
and when i excited i mean highly jealous. thank you very much, phil. >> we're going to see phil later in the show talking more about the macan. let's bring in on the tesla issue, andrea james. herb is here weighing in. andrea, you believe the selloff we have seen in tesla share price this month that is down over 20% is a buying opportunity. why? >> um, because tesla doesn't have a fire problem. they have a perception problem. and they're getting out if in front of that. what we saw happen over the summer people were asking what could go right with tesla. the stock traded up on the answer it to that question, a lot of things could go right. the presence of the fires, only three of them, but over the last few months, has caused more people to ask, what could go wrong? the momentum turned the other way. i think you make money in this for the long term if you can ask what's going right when everybody else is asking what could go wrong. >> herb you're shaking your head. >> i think in this case, elon
musk, he's great marketer, he's brilliant, but he's disingenuous when he talks about the fires and compares them with the broad state of all automobiles and cars. er. we're talking about premium cars and the subset of that, the electronic -- the electric vehicles in those cars, that's what you have to compare it with. you can't dismiss it. it does exist. questions about the barrier beneath the car. so you have these -- >> why do you have to say that. >> guy runs over a metal object, the other person driveses into a wall. >> if i drive into a tree in my car, herb, it's going to explode also. >> it does matter and -- >> all three of these indents were cars driving at high speeds, crashing into things. one time over a tow hitch -- >> but nobody was injured and it doesn't matter what car you're in, there's a fire risk. even if you're an airplane you're trusting engineers have designed something to protect you from elements of that vehicle that are very, very hot. >> and tesla's car was able to
say to the people, like, hey your car is on fire, get out. >> right. the car -- >> you buy another car tomorrow. i'm not defending tesla. i'm saying let's be honest about the car problem. i don't care about the stock, herb. >> i -- >> just get down to the car problem, i mean, tesla deals with the fire risk in three ways. one, the battery pack is robust and that's what failed. two, there's a whole bunch of alarms that lets you know when the battery pack has been compromised and three, there are modules within the battery pack that prevent the fire from spreading. >> right. >> so points two and three worked every time. >> andrea, elon musk is on the record saying there will not be a recall but do you believe this investigation could lead to a recall? >> well, the there were no injuries and the car performed as it should. just to be clear, tesla has changed the suspension on the car so at high speeds the car will get lower to the ground and they've changed that now so the
car stays higher at higher speeds. that might fix it so they've take an safe car and made it safer. >> one other thing they've done, though, is they've extended -- their warranties to cars if there's a fire or whatever. that gets down to their you get back to the profits which are important and how will they expense for those, accrue for those ek penses. we see greater charges for potential warranty issues. that gets back to the quality of earnings issue which has been an issue for several quarters at tesla. >> we have to leave it there. >> you can -- >> andrea, sorry, bottom line. >> oh, i was just saying i think that the total cost to tesla in the end will be less than a dollar a share for this entire thing. >> there you go. i walked into a tesla -- can't call it a dealership. salon, whatever they call them. >> store. >> i said how long would it take me to get a model s, one to three months. i thought it was three. when i heards the one my ear perked up a little bit. not like they need to perk up more than they have.
>> no more shortages? >> i don't know. this is my anecdotal two weeks ago in manhattan. >> depends on what kind of car you want. certain ones they have more availability what you want. >> andrea, thank you so much for weighing in. herb, we'll see you later as well. >> it may sound too good to be true but after the break, two real estate multimillionaires will bring their money making advice to you free of charge. >> and later on, get ready for the mall madness with only ten days left until black friday. we'll tell you the retailer to beat this holiday season when "street signs" returns. over the next 40 years the united states population is going to grow by over 90 million people, and almost all that growth is going to be in cities.
what's the healthiest and best way for them to grow so that they really become cauldrons of prosperity and cities of opportunity? what we have found is that if that family is moved into safe, clean affordable housing, places that have access to great school systems, access to jobs and multiple transportation modes then the neighborhood begins to thrive and then really really take off. the oxygen of community redevelopment is financing. and all this rebuilding that happened could not have happened without organizations like citi. citi has formed a partnership with our company so that we can take all the lessons from the revitalization of urban america to other cities. so we are now working in chicago and in washington, dc and newark. it's amazing how important safe, affordable housing is to the future of our society. you get your coffee here. you get your hair cut here.
you find that certain thing you were looking for here, but actually you get so much more. when you shop at these small local businesses, you support all the things that make your community great. the money you spend here, stays here. in this place you call your neighborhood. small business saturday is november 30th. get out and shop small.
at a hearing on capitol hill where the obama administration was explaining the mess up of the healthcare.gov website the expalestine nags of the mess up got messed up apparently. bertha coombs has new development. what now? >> during the hearing, henry cho, the deputy information officer talked about how much of the website
needed to be built. what he meant to say was 60 to 70% is built and it's at 30 to 40% that is unbuilt.
and he said among those, the key things that remain up built are the payment system. he didn't say how much of that payment system and collection system is actually at the heart of this. we hope to get an update from cms during their conference call coming up in just a couple of minutes. one industry official, brian, tells me that's like setting up an on-line bank without a way for someone to make deposits. it is troubling to him. >> it certainly is. thank you very much. another slip up there. all right. if you know the royal palm hotel in south beach or the westin boston waterfront you've got our next two guests to thank. two of the most successful
real estate developers in america. one will tell me how wrong i was about something. we'll get to that at the end. the question i have, joe, janet yellen probably going to be confirmed, right, notoriously dovish, is she bullish for real estate? >> she's going to be smart in what she does.
she knows what she's doing. i don't think there's going to be any issue of any drama over the course of the in exyear and she's going to play out what the game plan has been in place and you're going to see something that's going to be stable and actually keep it where it is so people are happy with that. >> do you agree with that. >> pretty much. her background, she was president clinton's chair of economic advisors. she was president of the fed reserve in san francisco and from brooklyn. she knows real estate and we are in a similar time period in terms of our economy. looks a lot like president clinton's second term as we're rolling out of this recession. i think so. her challenge will be how does he ween us off of all this stimulus dollars. this $85 billion of buying. >> carefully and hopefully slowly. >> yes. >> but it has to end. it can't go on forever. she's acknowledged that but also made sure she doesn't shake up the markets because she's saying it's a long time coming. >> but in practice, don, we have -- listen you're
multimillionaires and developing huge things. a lot of our viewers just want to build one house to spec it and sell it or a small building. are lower interest rates just automatically good for real estate? we learned in '06 they may not be. i'm wondering if we're smarter now? >> i don't think -- i think lower interest rates -- escalating help taper the market and control it. credit is still not available. if you look at the mortgages, 70% are for refinances. only 30% right now for new mortgages and new purchases. that should be the inverse of that. the challenge is, is that real credit is more difficult to get especially for first-time home buyers. >> weight your read on where the housing market is going? >> still tight. on the credit side. there are certain cities doing very well. boston we're enjoying a boom time, actually 40% of the boston market, the buyers are paying over the asking price in the high end market, 54% are paying
over the asking price. >> what? >> they're paying over the asking price. >> 54% are paying over the asking price. >> when i was here -- >> i would raise the asking price. >> the prices are going up. >> it's a sad reality since the crisis ended there's been a by furcation in the housing market. places like boston booming and a number of other cities and some cities that have never been able to recover, never able to get off their feet. as an investor in real estate which cities apart from boston would you be investing in right now. >> new york city is the number one market in the country right now, and it's going to be for quite a while. so supply contrained, not just limited to manhattan. new york city, manhattan and brooklyn, miami. >> he wants to build. >> he wants to build affordable housing. >> the new mayor bill deblass yo, who i have to say is a friend, is getting a bum rap here to a degree. he wants to expand housing. very pro-business. he's acknowledged what half of
our city in new york is living where you have 49% of the city being poor and the only way out is that our economy has to become broader. but he's going to be good for real estate. florida, miami, on fire. miami beach is on fire. downtown is really getting stronger. and now, in fact, our incoming fed chair, mentioned las vegas. that's also beginning to bounce back which i thought would take a lot of time. there's some markets that are fundamentally unsound and will have some difficulty. >> you have a new mayor too. the only thing i worry about, the smart money, seem to be going to the same cities. when does somebody go to cleveland or detroit or? there's people there. >> where are the jobs? where is the inventory being depleted. >> if you build a building. >> you don't want to have those jobs. you want real jobs. it you see real estate creating the jobs that's not a real thing. at the end of the day interest rates being low is good for the economy and housing.
creep up on the interest rates will slow down some of that which is also good. it puts things in balance. >> any of these distressed cities you see as a bottom fishing opportunity that you think could be a good time to buy now for a turnaround? are there any out there? >> detroit. >> investing in detroit. >> you're a native son. >> look, don, come on. >> detroit did more investment, inexpensive, they are right sizing their financial issues and their pension liabilities and you've got some significant private sector invest and the state is focusing. >> this show and anthony bourdain are the only two that have gone. went to the brightmore section and spent the day. you to find some home. quickly, joe, lay it on me. i made a bet. >> don't hold back. >> i said something like there's no way in heck the red sox will win the world series. >> this is a pint in boston. here's the pint. >> i said i would come to boston to buy you beers. i still will. >> show you what the pints are. got to get those filled. we brought some material from
the -- >> heat where i said let's get a beer. famous bar. >> the hats and shirts and get you in there to buy me the beer. >> first time i've been wrong and been given gifts for being wrong. usually you have to deliver the present. i will come to boston, do the show there, buy you drinks. i'll expense it all. do it on had herb greenberg's credit card. weight the most expensive restaurant in boston. congrate grates to the red sox. >> still ahead on "street signs," two stocks that need hot water are in hot water themselves today. >> plus we are getting the first sneak peek of port porsche's ne ride. i want to wear a baseball hat my ears stick out even worse. oh. it burns. opportunities aren't always obvious.
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welcome back to "street signs." street talk time now. browcade communications reported fourth quarter earnings of 24 cents per share, about six cents above estimates. >> stock is up 8.5%, the market likes the earnings. revenue profit margins also rose. jpmorgan raised their price target to 8.50. not a ringing endorse mn given the stock is at $8.79. mead johnson nutrition stock number two, childhood nutrition provider. >> the stock up about a half percent. upgraded to outperform at oppenheimer. they think the company will benefit from something we talked about repeatedly, the loosening of the one child policy on china. this is a child nutrition company. more kids, more need for nutrition, oppenheimer target at 100, stock is 83. >> and endurance international receiving two, not one, but two pretty big initiations today. >> a new stock.
went public in late october. starting to get the ap lists to come out and comment legally. used to be called biz land, website hosting company, initiated at overweight at morgan stanley. credit suisse, $23 target which is nearly a double from the current 11. -- 12.18 price. >> green mountain coffee reduced. >> stock down 3.25, full year eps cut below the consensus, they think coffee category pricing likely to remain pressured. a potential for partner brands like starbucks and smuckers, to become discount, cut profit margins. sell rating on gmc. >> and our final stock we have herb greenberg waiting in the wings. come over here. you've been watching macan, talking about this stock before
and now very interesting thing going on. >> follow the insiders. as we said back here in september. it's the amazon and ebay. >> based in your new hometown of san diego? >> amazon and ebay of south america and what you have there, is mark roberts off wall street raising red flags there. the ceo came out and sold. he's considered by george mazi, a smart seller, when he sells the stock goes down. that's an insider to watch. i got to say one other thing unrelated to this. >> tesla. >> i don't know if it's a waiting list i'm saying what they told me. >> may have inadvertently just now on air said the most important thing -- >> it wasn't inadvertent. >> that if the wait lists are down, wait times are down, forget the fires. that becomes -- >> i was surprised to hear the one month. i always heard three. i'm not getting one. i was curious. walked in. nice guy that helped me out. not trying to get anybody in trouble.
i heard the one month and thought that was interesting. >> those who do channel checks have been finding the wait list on the model s going down. >> production going up. >> worth digging into. >> either way, going down. >> okay. >> or production going up. >> and talking of luxury cars the first glimpse of porsche's latest ride, let's get back to phil lebeau at the l.a. auto show. can this keep the momentum that porsche has had this year going? phil? >> hey, mandy. we have a special treat for you. we're going to give you a sneak peek at a model that porsche is going to be unveiling tonight. something nobody else has seen and this is highly unusual because i'm joined not unusually joined by ma tee as, but you don't introduce new models very often. macan is a brand new model. >> for us it's exciting to reveal a new model. the macan is a chance for porsche. we will get new customers,
younger customers, more female customers, but loyal customers which puts the car alongside a 911 -- >> a small suv and about one out of every four porsches sold worldwide is sold in the united states, correct? this is it. this is a huge market for you. >> huge market as always in north america and we expect that we will have more or less 25% of our global volume on that car. >> let's give everybody a sneak peek. we can't show you the entire vehicle, but that's tonight. that's special. but as i pull this back and give people a look, two things stand out. first of all we can't show much more than this, but this color is gorgeous. >> we love the color that is our -- we call it communication color. and totally new blue engineers have create ed for the car. it was a recommendation of our chief designer michael mauer and
it fits well to the car. >> if somebody would have told you when you first started at porsche you would make a small suv would you have believed it? this is -- you're really starting to stretch down into the lower markets. >> i couldn't believe it before i joined porsche, but three years ago, we created that idea and today we really did it. >> this is it. a little sneak peek. just a little bit of the new porsche mccan. we will be here when they unveil it. thank you very much for joining us. >> thank you. >> guys, back to you. >> all right. phil, thank you very much. we look forward to that. up next, camden, we have a problem. something is rotten in the kingdom of soup. >> later on the retail smack down. the name to watch this holiday. but, first of all, bill griffeth, a sneak peek of what's coming up on the "closing bell." >> we're watching this market right now. markets moving higher again. will this be the day the dow closes above 16,000. anything is possible during the last hour of trading.
united, continental announcing a $2 billion cost hp cutting plan. does that mean that layoffs could be on the table? that man, ceo jeff smisek will join us exclusively coming up. is nelson peltz behind dupont's move to spin off its performance chemical unit. we'll hear from ellen kulman coming up. >> we look forward to seeing you at the top of the hour for the last hour of trading day on "closing bell." more "street signs" coming your way right after this. [ male announcer ] this is kathleen.
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tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading. welcome back to "street signs." this is kate kelly with breaking news on the jpmorgan settlement. jpmorgan behind me, of course, details of their settlement with federal and state regulators have been released by new york state attorney general eric schneiderman. a press conference at his offices in downtown manhattan to begin any minute now. in the meantime he has issued a press release confirming publicly that this settlement has been reached to the tune of $13 billion. jpmorgan expected to pay 9 billion in various penalties, $4 billion to consumer relief
according to the new york attorney general, $1 billion in total will go to new york state. a portion of it in cash, penalties and a portion of it to be put toward consumer relief. specifically schneiderman says some of that will go to help victims of hurricane sandy who had housing issues in the aftermath of that superstorm last year. it will go to legal services, counseling services for them, among other things. but again, breaking details from ag new york attorney general eric schneiderman on a release we have yet to see from the justice department yet but something we've been waiting for, mandy and brian, for quite some time out of washington and has been widely expected. >> kate, thank you very much for the news. quickly, at least to my ears, did the new york state attorney general sort of steal the justice department's thunder just now? >> it seems a little bit like he went early, relative to what they're doing, as you know we're expecting to hear from them in sacramento. hopefully we'll get word out of washington, certainly through a paper press release, some sort
of event or interviews. but yes, we have not heard from the doj. we are now hearing from the new york state attorney general. he's been a key figure in this residential mortgage backed securities president's working group, key part of the settlement. it does seem he's gone first out of the gate on something that perhaps should be eric holder's show. >> thank you very much. appreciate it. that was interesting. see if there's any reaction to the early release of the release. what is wrong with campbell's soup? the new jersey based company had an awful quarter, earnings fell 30%, stock lower today. the question, is this a campbell problem or a soup problem? let's talk some numbers. rich and john. bad earnings, bad guidance, any reason to own camble? >> no, none whatsoever, brian. i think the problem is, you're right, 97% of its sales are in the developed market. and it's just we're too old, not eating soup anymore and 40% of the sales are soup. so when you look at what the key earnings drivers for this
company are, as soup. young people aren't using soup. where they need to grow is in the emerging market. only 3% of sales come from there. how do you turn it around? all the low hanging fruit has been done, tried the reformulation with the lower sodium, total bust up for them, and now they're trying to figure out their beverage division with v 8, people switching to water, so they have huge problems, no turnaround in sight. m and a market is froth this. most of their brands are $100 million plus. not a market for that. top line growth is growing at 2, 2.5%. i don't think this is a compelling story and earnings at 15.5, 16 times forward, that's not attractive either. i think you just sell and forget it. >> sell it and forget it. they have been trying to move away from the traditional soup business and more like cookies and pasta sauce. is this also a sell, rich ross, to you? >> in trading, timing is everything and broadly speaking,
selling a soup stock ahead of the winter is not a strong play. in fact, when you bring up this chart i'm going to show you why the 20% decline creates a compelling buying opportunity. the key feature is the bearish double top. you want to be selling soup during the summer. you see the breakdown below the neckline. that generates measured downside target to 38% which for all intents and purposes we hit today. note how the 200 day moving average in the neckline of the pattern creates resistance on the way up. that's how this is supposed to work. not only have we reached our measured downside target but we see key gap support around $38. when you bring up the weekly you're approaching key support here. multiyear support. prior resistance now becomes support on the pullback around 37.50. this is where you want to buy it. this is exactly the time you want to buy it. buy some soup ahead of the winter. >> all right. different views there. we'll see if soup is a good food and investment. >> be sure to check out the on-line edition of talking
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the department of justice just can did now tweet out the $13 billion jpmorgan settlement. kate kelly just told you, the new york state attorney general gave the news perhaps of the doj. not sure how this will play out. anyway, a little extra twist. settlement it out. dominic chu, you have a market flash for us. >> devin energy looking to buy geosouthern energy, one of the largest oil and gas exploration companies in the world. late day spikes, session highs around 4%. dvn a stock to watch as we head for the bell. as we know, christmas is a time of family and fun, but for the retailers, it's an all-out battle for your bucks. the most important time of the year. who will come out on top of this
retail scrap. managing director of strategic resource site and jan rogers kniffin. bert, you sent me a nice note saying, i'm in l.a. and walmart looks terrible. >> and looks all over the west coast. >> not the stores, the sales. >> the sales look bad. they've cut working capital. not stocking the shelves. not staffing the stores. target looks almost as bad by comparison. the winners, if people are investing, it will be macy's, nordstrom, tjx and ross stores. >> but you think walmart will be the fiercest competitor out there. >> i did eight walmarts in eight days, most recently in bergen, new jersey, but across the northeast, i think they'll be better in stock this fourth quarter than they've ever been.
i think they're getting to that point right now. i think they'll be fierce on black friday. they already said this friday they're going to start matching price on everybody's black friday sales and right through the weekend. >> will they be fierce enough to give amazon a run for its money, which you think will be the real winner. >> amazon on a sales base is always a winner. amazon, unfortunately, doesn't make any money, but they're the big winner when it comes to sales. they'll continue to be, you know, if sales are only un3% or 4%, they'll be up 23%, right? they'll be a big winner on sales. but i think if you look at walmart, i think they'll be very good in their space. and i think they're going to put a lot of pressure on target. i do think macy's, as bert just said, will be a big winner because i think they're doing everything right. >> amazon and macy's have been big winners, right? >> correct. >> give us some names, companies we don't talk about all the time thaw guys like. any names out there like a dillard's, chico's.
>> dillard's works great. >> that is good? >> yes. nordstrom, omnicom, t.j. maxx. you look at management, walmart's management lost its way a long time ago. they're a number you can invest in. stein mart, bob mettler is doing a great job. >> best buy, one of the worst days if not the worst day, still up -- >> 250%. >> so far this year. >> just pile on! >> okay, okay. but you think, bert, good year 2013, check. i'll give you that, brian. 2014, not so good. >> and best buy it's a problem of deflation. skrurm electronics, circuit city, doesn't matter who it is, deflation is killing the category, killing the profit margins. best buy's made the same problem
circuit city before, blowing out a lot of full-time people who had great connections with the customers, going to a part-time model. the service isn't as good and it's going to be tough. >> gosh, manndy, i knew walmart would shoot the wounded. i didn't know you would. walmart will be taking every dollar from every competitor -- >> you really like walmart. nobody but walmart. >> you said chico's, my favorite in the mall, my only mall pick. and steinmart. >> new names there. thank you very much. we cannot get enough of ourselves in today's sign of the times. ya know, with new fedex one rate
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♪ i want you to want me >> another sure sign of the apocalypse, not cheap trick, the oxford dikes naer named selfie the word of the year. selfie is a picture you take of yourself. bieber, miley cyrus, bieber. even pope francis got in the action. including justin bieber. we had to shamelessly go on the selfie craze. >> there's herb. >> what is that? >> i was told that's apparently what you have to do, duck face. that's ducking behind a duck face. by the way, guys, this was created on an online forum all the way back in 2002 in australia because as some who who watch australian slang, "e"
on the end of everything, is improves every word. >> i can't believe you did the duck face, though. i was just slamming the duck face. >> i didn't even know what the duck face was. i was told that's what you have to do. anyway, thanks for watching, everybody. >> have a great day, everybody. "street signs" is over. >> "closing bell" is next. hi, everybody, we enter the final stretch. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. hi, bill. >> i'm bill. how are you, maria. i'm bill with maria, at least for a few more days. we'll make the most of it on friday. we'll enjoy that and send you off on style. let's get to the news today. a lot to cover here. stock market continues to trade at or near highs. we've been hovering at or below the unchanged level. we're wondering if dow can close at all-time hi