tv Countdown to the Closing Bell FOX Business August 26, 2013 3:00pm-4:01pm EDT
♪ adam: i'm adam in for liz claman, the last hour of trading, and negative news on the economy appears to have put investors in a positive mood. major indexes rising for a third straight session. it follows a 7.3% drop in other- in orders for durable goods. why are investors upbeat? they believe the number could persuade the fed to delay reducing the bond buying program, and in big merger monday news, shares of biotech firm, amgen, up dray dramaticaly after buying pharmaceuticals, and they lead the sch at one point today. investors like this deal, and shares of onyx up, not bad, for a stock that has questions regarding the cancer drugs delving into this as the hour progresses. bringing in lauren and sandra
smith at the america tile -- mother chan tile exchange. chemical weapons used in syria, how does that play into oil? priced in, disruptions in the middle east? >> no, it's something the oil markets are going to be watching closely, adam, and we are hearing that he is confirming that chemical weapons were used over in syria, and this is a big change for the market. they were waiting on this statement for quite some time, and oil prices now back above $106 a barrel, still down on the session because we got weaker than expected economic news on durable goods orders, new home sales last friday, and that's still weighing on the oil market, but there's a huge middle east premium built into the price of crude right now, and, adam, as far as the trade is concerned, there's a note basically saying they have upside potential in crude, but not much.
talking about syria here, it is an oil producer, but not a huge oil producer, and the reason why there's a premium in oil because of the concern of the ripple effect that could happen in the middle east and larger producing areas of the middle east. right now, the market's weighing the weak economic news and the conflict over in the middle east. right now, the weak u.s. economic news, obviously, we're the largest consumer of oil in the world, so the weak u.s. economic news is still the biggest factor on the markets right now, although, still watching the conflicts in the middle east very closely. adam? adam: thank you. over to lauren on the floor of the new york stock exchange. there's a lot of stuff about sales, volume light, checking out for the long holiday, last week of summer vacation. >> that's right, adam, but i'm looking at the coal stocks right now. you have alpha natural resources, walletser energy, arch coal, all up, particularly peabody, up nearly 3.5%.
it was said over the weekend that peabody is poised to benefit from coal prices to get a lift as supply and demand become balanced. demand picked up as utilities turned back from coal to natural gas so that's helping out a little bit too. coal stocks are the winner as you can see. peabody the best in the sector. adam: cliff notch rail resources up today, and there was a conversation three months ago with people worried about them. thank you very much. >> thanks, adam. adam: we are not done talking equuties, to the floor show, we got traders at new york stock exchange, cme group, and teddy at the new york stock exchange, dan over at the cme, and at imex, thomas, thank you, all, for joining us. thomas, i want to talk to you about gold. there was a rally in gold today, back over $14 an ounce and came back.
what's happening? what do i do if i feel worried about the fed? >> well, now we're starting to get priced in a taper of the tapering. this is, you know, trying -- it's trying to consolidate all the different opinions about what the fed's going to do. you're not sure what's priced into the gold market at this point. we've seen a rally of a hundred dollars in august, and it's been in a very, very thinly traded market, a lot of shorts running for cover, and many reasons for it going higher. there's uncertainty in what's happening with the currencies, emerging markets, and so it's a difficult thing to kind of assess in the august month. wait until the end of the holiday. adam: shouldn't the price come down if the dollar is stronger? so confused trying to figure it out with gold. >> well, that's because it never follows a direct correlation, does some weeks, and then changes its mind. it broke all correlation, a run for the exit, and a lot of etfs liquid dation in may and also in
june, and so sometimes it decouples and has nothing to do with it. at this point, we have the issue in the emerging markets, their currencies have problems, and people hedge that with gold. adam: dan, we talked with sandra about oil and what's going on with oil, but what else should we watch from commodities? soybeans were on fire today. is there a place to make money right now other than equities? >> you know, it seems like right now, equities is the place to go. commodities will be a -- the biggest problem right now, everything's been light traded as was mentioned previously, so as far as the commodity, one trade i'd like to make, but fearful of it right now just because of the unrest in the middle east, is oil. it's too high. there's a prep yum in there if the egypt debacle in july, nothing came of that, and now the syria one. any type of resolution, short oil because supply and demand doesn't dictate 110 bucks.
adam: bad reading on durable goods, consumers pull back with the earnings reports from the big retailers, seems we go into the fall, gasoline prices fall, and people at this price are, as you say, pay too much. can you argue to them why to get out soon? >> well, for those very reasons. you know, the one thing about the economic data, you have to be careful. the goods, look at the chart over time, and i have over the past 13 years, looks like a pong game up and down. use a few months worth of data, but even with good economic data, we're plenty of supply in the market, and the demand is considerably down so that's more than enough reason right there to get short gold -- or short oil. adam: teddy, you chuckled in talking about gold earlier. talk about equity because i made the big no-no back in january. i trieded to time the market. i was flat wrong. it's why i don't wear a coat that you wear. i keep hearing people talk about, we need a pull back.
we need a pull back, 4%, 8%, 10%, are we there now? getting the pull back even though we're up today? >> i simply say this, adam, not a good answer, but even listening to your other guests talking about the price of gold and oil, and now the price of stocks, nothing rational how any of these assets or commodities are priced, unfortunately. if they were, we would be off on a yacht watching somebody else on tv pontificate. i think that you can't talk stocks down. i think it's amazing when you think of all the things going on in the middle east, the -- the terrible durable goods number we had this morning, the fact that the market is just kind of hanging in here, up slightly, you know, on no volume. yes, it's a quiet week, but never sell a dull market short. adam: yeah. >> it's really quite incredible how the market hangs in. adam: the winners today, home depot, bank of america,
mcdonalds, cisco, caterpillar. where's the slow down? where's our pull back? >> well, exactly. i think it's so confusing for both individuals and professionals alike because if you basically pay any attention to the headline news and try to correlate that to what the stock market's doing, in most days, it makes absolutely no sense. you sort of need to throw logic out the window. the tape seems to tell me that stocks want to trade higherment i can't give you good reason why they ought to trade higher, but they certainly look like they want to do that. adam: quick whether i, back to - quickly, back to the other guests, headlines talking about the logic and bad steal for a long time, say the strengths, discussions were serious two months ago, and the merged company count wall street's biggest firms as oarchs. this change the way we cover wall street or invest in the future or is this a
behind-the-scenes kind of deal? either one of you. >> i say that this is a behind-the-scenes deal. i don't think it impacts the investing public a whole lot. i think it is interesting that many wall street firms own have an equity interest in the firms so they pay attention to the equity interest. in that sense, it diverts trading volume from an exchange, and that could have a nagtive impact on somebody depending on where you make the home, but as far as public is concerned, it shouldn't make a difference. adam: all right, we appreciate all of you being here for t sho. as we mentioned, stocks climbing higher, despite the down beat durable goods report because the data temporarily calmed the fears of investors about the t-word, taper. don't get comfortable yet. one investment guru with more than $2 # trillion in assets under management says, buckle
up, folks, next few weeks will be bumpy. liz ann sanders, senior vice president, and chief investment strategist joining from stanford, connecticut, thank you so much for joining us. >> my pleasure. adrienne prejean you're -- adam: you're a long-term bull, but in some notes, you're short term, but i think you sound bearish. >> you know, to the extent bearish means there's a cyclical bear market coming, nothing close to that. it was elevated, a note out two weeks ago today saying we thought based on seasonals, based on sentiments and technical deterioration and the ma crow forces faced uncertainty with the taper in september, and the implementation of the affordable care act, second round of the sequester cut, that was enough to suggest we may be due for a pull back here. i don't expect much more than that, and i'm a medium to long-term bull. adam: in fact, no more than 10%, and in the long term, you are optimistic, but you are
concerned about firms trying to figure out the affordable health care act. i mean, how much of an impact would that have on a pullback? is that a year out since the administration extended the deadlines for some of it? >> look, i'm not so sure that has a huge short term impact on the market other than being applied to the uncertainty factor. ic there's other things on the list, and i didn't mention syria, so i don't know that that is specifically a market mover, but when you think about a period of seasonal weakness otherwise and add that to what is a decent list of concerns in the next several weeks, i think you may want to keep your cards close to the vest. adam: as we came on air, you know, the secretary of state, mr. kerry, actually talked about the fact chemical weapons were used in syria, the president's red line, could u.s. action, whether it be some kind of retaliatory strike with cruise missiles, not involving u.s. soldiers, could that rile the market, or is it already priced
in we'll do something? >> i think it's probably, to some degree, priced into the energy markets, which, obviously, has an impact on the wallets of consumers and indirectly on the stock market. as far as the typical market reaction to something like that, it has had an effect in the past, but it tends to be extremely short lived. it does not tend to have a long lasting impact or economic impact, but it can rattle and ruffle feathers in the near firm, and i don't expect it to be any different this time. old add you think the u.s. economy looks good. i thought the hot spot was europe given they come out of the recession, the german economy on fire, or is that a bit optimistic? >> look, we have an out perform on europe as well, so i still think the u.s. market probably is the best performer relative to the rest of the world, but outside of the rest of the world, we actually favor europe, particularly, over european markets. we are optimistic. adam: we heard china, china,
india, brazil, china, china, and now beware, and you talk about the slow down in china, 5% growth, that's a better return there, aren't you? is that a risky investment? >> look, this is the mistake that investors make all the time is they make judgments about the stock market based on the absolute level of growth in the economies. it's the rate of change. it's inflexiom points that matter, and the rate of change in terms of china is decidedly down relative to what the rate of change is in the u.s., and that's what matters. we think the problems in china, not just china, but major emerging economies like brazil and india, they are major secular changes. there's an inflation problem here. there's a capital flow problem here. there's a change of flow in the economy. these are not cyclical problems, but longer term problems. adam: back on the united states, why would you say avoid consumer staples and utilities.
we were always told utilities. why not now? >> look, utilities was -- had a big push into them by the folks looking for stocks, particularly when they were in an extremely low rate environment, and not that it's a high rate environment now, but an environment where the 10-year treasury rate jumped. that impacted the dividend thoughts, and as well as defensive areas. this is a time you want to play cyclical areas of the economy, like technology and industrials and the defensive trade and yield oriented trade is fading. adam: as we wrap up, you know, with the potential for a pull back stick to your strategy, now is not the time to get out, but stay the course and weather this; correct? >> look, i think that one of the mistakes vinest res make all the time is losing that discipline around particularly volatile periods of the time. there's never a time not to be disciplined. to the extent you are inclined
and want to look for a slightly better entry point, you may get that. we tell investors not to be cues about it. it's not a winning strategy. adam: senior vice president and chief investment strategist, thank you for joining us on "the closing bell" -- or "count down to the closing bell," it rings in luff ri 45 minutes, another great day for the facebook ceo, shares rallying, but is that stock over valued? yep, according to one guy we'll talk to, we'll talk to a business professor who wrote the book on valuations and the race for new cancer drugs sparks a more than $10 billion merger deal. could that spark a wave of activity? we'll be back in two minutes. ♪
people expected this, but did amgen pay too much, and are they taking a gamble? others say they have to do this. joining us now, steve silver, biotech analyst at s&p capital iq. i want to get into why they needed to do this. some of the farm pharmaceuticals are maturing, and onyx has a drug already approved, but not as widely necessary, you'd think, for the price they are paying. suspect there a risk if the fda down the roads says you can't expand use? >> oh, sure, there's always the risk. onyx's main drug got approval from the fda last year for the form of blood cancer, but only in those paicialghts that exhausted all -- patients that exhausted all other approved treatments so nay are pushing forward to move it to an earlier stage of use, so while early data to do that has
looked good so far, there's always that risk of something coming up in the three study ongoing that could affect the price they agreed to pay so i think that's the risk that takes place in investing in firing biotech companies. adam: assuming there's due jill -- due diligence with other drugs in the pipeline to add value to the purchase. what else do they have other than the cancer drug? >> sure. they have a co-promotion rights to a drug on the market for years, and that drug is approved for kidney cancers, more of a mature drug, although we think that that drug could be approved next year for use in thyroid cancer. growth opportunity there. there's a 20% royalty stake to another drug approved in two cancer uses, and pfizer in phase three study for a drug for
breast cancer that onyx has an 8% royal toy -- royalty right in the future. it's not expected to be on the market for several years still, but got fda breakthrough therapy earlier this year, which we think boosts the chances to get on the market, and when it does amgen benefits from that. adam: there's a discussion of this merger for over three monthing, and today, the shares hit a 52-week high, $116, pulled back a bit, but you have a price target of what? yeah, $128. how long does it take to get there? >> well, i think that if the data is coming in over the next six to 12 months, coming out positively, they could get there in short order. that comes with the risks, but, yeah, i was a little surprised adds -- as well they were the winning bidder here. i expected other interests from other pharmaceutical firms begin
the potential of the drugs longer term. adam: i've been reading some investors think the price is too low, always thinking it's too low because that signals there's not much mountain pipeline as they would like? >> you know what i think? at the end of the day, the main driver in terms of the lower price was this gap between what is known today in terms of clinical programs versus potential. i think, as i mentioned, in phase 3 study, a lot goes wrong as onyx tried to move them to earlier lines of treatment, and so i think that the two firms had a disagreement in terms of valuation based on what's currently known today so i think that was the driving force between them getting the price it paid versus where it was thought a few weeks ago that onyx might fetch. >> all right, s&p capital iq, thank you very much for helping us understand better the reasons why they made the move. sounds like a good deal. closing bell rings in roughly 40
minutes, and new questions today about the future of billionaire steve co hen's embattled sac capital as the feds dig deeper into the operations, our charlie has exclusive details on this, and donald trump comes out swinging after the new york attorney general sues the mogul over his real estate university. big money and big reputations at stake. we got the very latest on this tift for taft show down. you don't want to miss it. it's more intriguing than the donald's hair. ♪ [ male announcer ] how do you get your boue?
was the extra charge but what they threw in there was forfeiture. >> this is a huge. >> the squeeze to say we want you to report all the money made all your ill-gotten gains and he made his biggest bonus the year he committed that alleged act of insider trading with a $9 million bonus. adam: what the feds are doing they are going after his family. he is not sweating now. >> and i believe this is the
case to pressure him with steve:not only to indict the company but still to get him specifically. we don't know what will happen at the sec but i do believe that for all intents and purposes they will become a family office. they are conceding that. talking to wall street brokers that do a lot of business with all seats -- wall street trading just how much is going on. pretty big and right now brokerage business is down significantly post indictment about 20%. that is a pretty big hit and as the firm to outsizes there will be less and less. then the legal aspect of it is just steve collins money
--:smoot -- many just like our fox news contributor he has been very but vocal that remains to be seen but it is just that type of money it is mostly steve cohen. adam: going back to the fourth richard doesn't that tell you that the government doesn't have enough? then why do they bother? >> that is the truth and they would tell you every case demands evidence it is better absent the wiretaps that they don't have, you need people and in the previous case, there could be others. but i will tell you that the government always believes as we pontificate and project, we miss 90 percent of behind the scenes until
there is a leak. [laughter] i have been good at the long-term prognostication that they would nail steve cohen of failing to supervise. we were the first to report that that they would go after the firm is still trying to pin it on him. adam: homage is driven being here again is not a crime but have which is driven perhaps people looking at mr. steve cohen? look at your house. >> you cut the deal then tried to portray it as it is over? those are just symptoms of what they believe..(j%6- #?7@+4 they believe he is arrogant and i know that talking to people it was the symptoms of a bigger arrogance. i believe he was arrogant enough to created a firm that had arbitrage
information that came close to the line and he was so arrogant he thought he could get away with that. then to buy a house that he cut a deal is a symptom of the arrogance. the jury is out with me. adam: this thing has made a lot of people will be. >> and a lot of charity but the government does not think that excuses what he did to get that to that end. adam: innocent until proven guilty. real estate mogul donald trump would love to tell the new york attorney general you're fired. duking it out over a million years at university. we have the latest on the clash of the titans next. your secrets revealed. we will tell you everything you want to know about people who cannot put their cell phone down.
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adam: the power movers are 3d printing companies check out these both hitting new highs after citigroup starts the coverage with a buy rating. they predict the market will triple over the next five years and now was called months ago here on fox business. a couple of dollar stores check-in today and what do you think about that? >> the bargain store boom dollar tree the stock is up today they got an a grade raising at by.
raising the price started at $63. the other dollar store is dollar general hit seeing a new high, $0.66 both looking good. also feel the dollar, the bargain store boom today. adam: we will take it true clash of titans donald trump sued $40 billion to buy the new york attorney general snyder that says the real-estate mogul misled thousands of students with his for-profit university but trump is fighting back and the battle, no surprise is ugly. we will go to elizabeth macdonald. you have been breaking headlines all day. what you have no? >> they have been going at each other all day long. we have been told exclusively is the new york
attorney general pushed trump and his organization to settle the case for just $5 million over a defunct school inactive since 2010. they also say the new york attorney general apparently has said to the trump team that trump is a billionaire what is 5 million to him? write the check so he doesn't have the bad press in in trump says we don't dick -- respond to extortion or threats. this is a failure by the attorney general also telling fox business the new york state attorney general allegedly told the trump organization that this case is weak and there is no case there pushing forward with the lawsuit to appease people below him and the $40 million lawsuit right now donald trump is on his twitter account he is saying that you are weak and ineffective why don't you go after john course line for
the 1.$4 billion of investor money still missing? what about wall street fraud that bilked investors out of five? but the new york attorney general we did ask his office about the statements from the trump team and they declined to comment saying this is a distraction by donald trump. although he is not rebutting anything in the case against him so this will really be fought out with a social media. adam: as i do my trump impersonation with bad hair but if you are in the said you don't pay the $5 million falling. so he has of point i would hate to say pickle and donald trump but why pick on donald trump? >> he also says that, the attorney general says he promised mentor ships that did not have been, and
donald trump would personally take the instructors and that did not happen in complaints about the school but they said a lot of students who have complaints about harvard university. are the soothing them? also 11,000 students with to that course with a 90 percent approval rating just 2 percent complained in and they had been refunding money back to the students even beyond the three day money back guarantee. i don't know if this even goes to court. adam: we will be watching but harvard has a great cosmetology program. [laughter] we have breaking news we should start up the debt clock once again? mitt october the latest estimate from treasury according to "the wall street journal" citing
people close to the matters year. we heard perhaps through mid october and mid november is when the u.s. will find the exhaust the borrowing in treasury says mid october. the republicans said they want broadly to have cuts equal to what the debt ceiling would be raised but the time line has been moved up remember the government spending authority runs out october 1st this is a lot for congress to do when they returned. adam: is seen as we went through this exact scenario in december last year that ruined new year's eve and here we are again how messages of love for legitimate? >> if you talk about the date the treasury is usually on target. they have said mid october or mid november in treasury
was pushing to get it done. they don't want to exceed the of borrowing limit that we did a couple of years ago we went up to the last day in 2011 that gave us the sequester and budget control act. this time they want to be ahead of the negotiations but mid october right now and congress is not backing and republicans want -- or some want to raise the ceiling. adam: we are down on the dow 23 points. thank you very much. the closing bell will ring in 15 minutes we have your results of a survey of people who just cannot live without their hands that even for a few minutes. the facebook stock keeps getting new financing is is it a bubble? we will talk to a professor
adam: cellphone fanatics there is a name for the addiction. no mobile phone phobia. [laughter] it is reported likely half the people suffer from the condition. 42% in mid bringing there sulfone to the beach while on vacation for a 25% look at texting and e-mail with they are out for dinner with the date.
that tells you about the date it that they check their e-mail in bet. women are even more likely to have this cellphone separation phobias than men for the organization behind the report, has a warning for phone attics of both sexes. protect your personal information using a password or inscription in case your device is lost or stolen. that is like telling people when it is going to wear a coat. many people are checking facebook. shares of the social network hitting a new 52 week high but is this stock overvalued? joining us now to bring down the current valuation is a professor at the nyu stern school of business. %-people were selling facebook river over doing it now when
they drive the share price up they overdo it to. what is the actual eliot ration and explain. >> with facebook to keep in mind you have a company like this pricing takes over the momentum everybody jumps the bandwagon in both directions when it is doing well everybody wants to buy when it does weld want to sell and it has three pillars to generate cash flow and how quickly and how risky. even though facebook is a very good company it is not a great my concern is it is priced as a great company. adam: let's talk about that. you made a good observation that the analyst doesn't lead the market they follow the market so when seems we will come down. guide me through it.
>> let me take you through the process. if you start off the of the cash flow leftover it expected growth from those cash flows and a couple of things to keep in mind. we know what we like to see as investors with high growth and low risk but it is a trade-off if you go for the high cash flow he will give up on growth and settle with high-risk in that high growth comes as high risk and the key to being a great company is the trifecta the facebook comes awfully close with extraordinary margins so my point is not that it is a bad company but even if you price it as a very good
company the value you get is $70 billion when it is priced at 100 billion. adam: using kits should be $28 per share? >> yes. adam: you explain this that they figure out how to generate advertising revenue so this was priced dinner whenever betty gets excited about now with revenue growth is not that great the what they were supposed to do but if they fail the mobile that would be disastrous for the company but they succeeded is what they needed to do. so it was priced in one year ago and i think it is overpriced now people are overreacting to good news by it is not great news. adam: you are very humble in do say you got lucky when you called the share are you
willing to go out again? >> shorting in the face of a crowd is one of the most dangerous games to play. i would not say that but if the stock is already bought one year ago or two years ago you may want to think about having a position or reducing your position is someone going forward. adam: that is a dangerous stock so is driving the 73% show. from the school of business at harvard thank you. the closing bell rings and six minutes with your last chance to make money. ♪ [ male announcer ] how do you get your boce?
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adam: well, we have gone negative on the dow and s&p. david asman, why, i will pick up with you. >> why would i have a bottle of jack -- this is for adam shapiro. this is how he ends the day. one of the top executives of the company that makes great stuff later in the hour. the market has been swooning a little. it might break positive. not so towards the end of the day. let's about to lauren simonetti at new york stock exchange. let's talk about tesla. >> the model s a favorite among luxury cars. it is capturing a big part of the market especially in california. >> it fiscal important. the question whether it does as well. we have a tesla bear coming up
in the next segment. you don't want to miss that. facebook, all the people were worried it would not do as good as ipo, it is getting there. >> showed $40 a share on friday t was close to showing us $42 today. i say the next level, 45, a lot of folks love facebook at 45, may of 2012. >> they are up 7% this quarter. apple staying up above the $500 mark, right? >> apple shares are up today david: john deere, we got the bad durable goods number. john deere makes durable goods. they did pretty well with earnings report. [closing bell ringing] >> tractor equipment doing good
for john deere. david: lauren simonetti giving us final action in the trading day. the dow is down about 59 points. looks like it might trade a little bit lower. let's look how all the stocks are finishing up. as i said the dow is down about 62 right now. again it is settling lower. look for it to fall lower thanta. s&p is down as well. we have a split decision. nasdaq until a moment ago was positive. that is barely negative. just .01% negative. the russell 2,000, ever so barely managing to squeak out a green arrow there. other than those down stocks, you have to look at the momentum and the momentum for the moment as the vix goes up as volatility continues to go up. the stocks continue to go down. across the board. there were some winners that we'll talk about but meanwhile let's run you through a look at the front page headlines, the stories that made the news in the world of