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tv   First Business  KICU  May 20, 2014 4:00am-4:31am PDT

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are jumbo deals in the tv industry putting consumers on remote. in today's cover story.... a controversy over motherhood erupts at a trade show. plus... enviornmental stress becomes a bigger threat to corporate america. and... are you and your financial advisor wrong for each other? here's how to find a better match... first business starts now! good morning! i'm angela miles. it's tuesday, may 20th. in today's first look: eye on earnings.. traders and investors will closely watch earnings from home depot this morning for clues about the consumer and the economy... yesterday, stocks edged up on thin volume. it was the 3rd
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lightest trading day of the year... gold rallied $1. oil gained 60 cents. microsoft is holding a news event today. there's chatter the tech company might reveal a surface mini tablet. oprah winfrey's harpo studio is sold! the property in chicago's west loop was purchased for $30 million dollars. and, burger king is tossing out its old familiar slogan "have it your way". bk's new line is "be your way." trader glen schultz joins us on tuesday morning for a look at the bond market. good morning to you/ you're with performance trust and i'm sure you're keeping engaged as is everyone else on these bond deals which have been dropping. how low can we go here, glenn? > > well i think we're probably looking at the near lows of around 2 1/2% but remember we started the year with forecasters saying that we were going to be at 3.43/3.5% at midyear, and the 10 year treasury note was just above 3%. so this pretty much confounded everybody. we have
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three factors at play: the global growth outlook-- people are looking at a weaker economy. we have the the flight to quality based upon the ukrainian situation, and now we have investors looking at earnings thinking that they're coming in a little bit weak. so these things are coming together to really drive that flight to quality trade, and then on top of that, it looks like the euro zone is going to embark on a round of quantitative easing on their own. so that's going to put pressure on yields and potentially we can get to 2 and a half percent. > > with the yield so low , doesn't that push everybody into the equity market? > > well that's the point is to push people into the risk market and to stimulate risk- taking. one of the big beneficiaries are probably going to be again the emerging market countries. emerging-market economies were big beneficiaries of the quantitative easing program of the u.s. we began to see the fuel from that pull away as the fed started talking about tapering, so if the ecb starts
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getting into the quantitative easing game, you expect to see the emerging market economies particularly do well. > > nice to have you on, thank you. > > thank you. now that it's official at&t plans to buy directv... consumer groups are pushing back. one group says the mega merger will cause cable prices to go up due to less competition. "often times these companies tell a very different story on wall street than they do on k street. and on wall street they talk about all the benefits of these deals for their bottom line. and when they come to washington its all about "public interest benefits and innovations for the consumer. we've seen time and again the innovation does'nt come from the network provider it comes from the people who use that network." at&t is paying $48.5 billion for the satellite company to grab a larger base of video subscribers. regulators still have to approve the deal. also in need of approval the comcast time warner deal. if given the green light these two colossal companies will control more than half of the pay tv market. analysts say if the time warner comcast combo goes through, there is no reason why the at&t directv merger won't be next...
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"it creates a well founded counterpoint to the combined time warner, comcast entity." at&t is likely to offer "bundling" of cable, internet and phone -- which analysts say is the wave of the future for the industry. chuck coppola steps in now with allegations of chinese officals spying on u.s. companies.. attorney general eric holder says "enough is enough" as he charges five chinese government officials with spying on u.s. businesses. it's the first-of-its-kind criminal indictment. the chinese military officers are accused of hacking five companies: westinghouse electric, alcoa, solarworld, the united steel workers union and u.s. steel. holder says chinese officers allegedly sent out emails to workers with links that contained malware...potentialy to obtain trade secrets. this administration will not tolerate actions by any nation
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that seek to illegally sabotage american companies and undermine the free market. a spokesperson for the chinese government says the the country's military has never engaged in cyber theft. shareholders are behind pay cuts to top executives at target. according reports gregg steinhafel who resigned as ceo of target earlier this month.. took home 37% less after shareholders called his pay too high. steinhafel's total compensation fell to $13 million last year from $20 mllion in 2012. also, target did not hand out short-term bonuses last year to executives. and is freezing base salaries for the current year. the pay overhaul follows targets holiday security breach to customer credit cards. a new poll by bloomberg news finds 85% of shoppers are sticking with target. the stock is showing signs of stablizing. go pro gets ready to make a splash. the wearable camera company has filed for a one hundred million dollar public offering. go-pro plans to list on the nasdaq under ticker "gpro." in other ipo news... eight companies are getting ready to go public this week
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including the much-hyped-- jd.com it's closely watched and is china's second largest e- commerce company next to alibaba, which is also gearing up for an ipo. jd.com set its ipo price range between 16 and 18 dollars. the company opens for trade thursday. one deal that just doesn't seem to be happening.. is a merger between pfizer and astrazeneca. astrazeneca has rejected pfizer's so called "final" offer of $119 billion dollars. pfizer has been in a hot pursuit to buy the overseas drug maker since last year. talks are still possible. the deal would create the world's largest drug company. and-- allow pfizer to reduce its tax bill by re- incorporating in britain. drugmaker glaxosmithkline is hit with more accusations. a chinese newspaper accuses the company of dodging a hundred million yu-an, or 16-million dollars in taxes. it's the latest in a string of problems. just last week -- glaxo's head of business in china was arrested as part of
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an ongoing bribery scandal. glaxosmithkline has declined comment. the department of justice is filing a "criminal" complaint against credit suisse. the doj accuses the bank of conspiring to help american's dodge taxes, by using the bank as a safe haven. the bank is expectd to plead guilty and pay a multi- billion dollar fine. a former european trader whose losses rocked the financial world, is now in jail. jerome kerviel, known as "the rogue trader", turned himself in to french police this week. the former banker for societe generale so-sit-tay- jener-al, will serve three years in prison for a six-year old crime. he lost his appeal against jail time in march. risky trades he made back in 2008 cost the bank nearly five billion euros. as the vatican attempts to bring better transparency to its bank. more fraud has been uncovered. the number of suspicous transaction reports
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jumped from 6 in 2012 to 202 in 2013. the church's financial information authority attributes the surge to improved vigilance and reform efforts. in today's cover story, the national restaurant association is feeling the heat over asking one of its exhibitors to leave. the reason, she brought her ten-day old newborn to the trade show. at the national restaurant association annual trade show in chicago, security asked kristin osbourne, sole marketing person for minnesota's four daughters vineyard and winery to leave because she'd brought her ten-day old newborn. "there wasn't an option. he has to be with me because he feeds every hour and as for why not send someone else, that's offensive. this is my job." the nra doesn't permit children younger that 16, because as the n-r-a's sue hensley said in a statement and told us, cooking
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equipment there is dangerous. "knives, cooking demonstrations and other things that are not appropriate for children." but osborne, says she was nowhere near knives, or stoves or cooking demonstrations. the nra disputes that. osborne says she was talking about how to use i-pads for marketing. "i wouldn't dream of putting my kids in any danger." "couldn't some sort of accomodation have been made? no. it's a hard and fast rule. no flexibility. no one under 16 is allowed. i'm very sorry." chicago's women's business development center, which for nearly 30-years has helped women entrepreneurs said the national restaurant association should be embarrassed. there's a shift in generations and demographics in today's economic environment and to ignore that is just bad business. ms. osborne came 370-miles to promote her family-owned business on the largest stage for restaurants. would the right
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thing have been to leave the baby behind? kristin osborne did leave someone behind. her husband, justin, to man the booth while she returned to the vineyard in minnesota. "there are people emailing the winery saying, she did it for the publicity. not true. we're out thousands of dollars we spent on this." kristin osborne says as a woman entrepreneur, she does not have the luxury of taking off from work after having a baby. the nra which was founded in 1919 says it has never had an issue with exhibitors bringing newborns to the show until now. turning to the social media world. a number of deals are reported to be in the works.. starting with twitter. recode.com says twitter is in talks to buy soundcloud. sound cloud based in berlin is known as youtube for music. if it happens the aquisition would become twitter's largest to date at a guestimate of $700 million dollars.
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another big ticket deal from youtube-- the unit owned by google is reportedly on the verge of paying $1 billion for twitch. twitch is popular among video game fans who use it to stream video of their play sessions. just how close the deal is to being made is unclear. facebook is said to be developing a rival to the popular video-chat app snap chat. after facebook failed in its $3 billion takeover attempt to buy snapchat, facebook ceo mark zuckerberg is said to be personally overseeing the development of the new app. cnbc reports that the project is referred to inside facebook as slingshot. the app will allow users to send short video messages. soupy sales for an american staple. that tops today's earnings roundup. sales and earnings at campells soup both beat wall streets expectations, but its ceo called the report disappointing. shares fell 2%, closing above 44 dollars. urban outfitters was not so hip this quarter. shares fell over 4 percent in after hours trading after reporting flat sales.
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prices are on the rise-- again -- at disneyland. the california theme park's one day "park hopper" ticket now costs $150, a jump of 9.5%. disney made the controversial move to invest billions in its parks during the recession. but business is so good in micky land, there's a price hike. disney stock is up more than 94% over the past three years. still to come: mastering getting hired. the new twist in the demand for mba grads... plus... tricky ways financial advisors get you to spend more money. and after this break... as severe weather rips through the nation... ways companies can seek protection... stay with us!
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epic weather is once again making news headlines.. deadly flooding is washing out roads and creating landslides in serbia, croatia and bosnia. meteroligists called the rains the heaviest in more than 100 years. the floods follow, extreme drought and killer tornados in the u.s. forecasters predict more severe weather is on the way. joining us now is tom varney of allianz risk consulting. he"s on set with us this to talk about how corporate america can prepare. are most companies ready for tornadoes which are what we are dealing with now in the weather? > > for a tornado, they really have fast wind speeds of up to 200, 200 plus miles per hour. the first thing that you need to do is to really prepare your employees. so really putting together an emergency plan for employees when in fact a tornado is a going to happen because it does come upon you very quickly. what is the game plan? where do your employees need to go in case that happens? from a business standpoint, one of the things that we need to do is really understand what is the impact on my business if in
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fact a tornado is to hit one of my facilities or destroy part of my facilities, but also the impact that may happen if in fact a tornado hits one of my suppliers. what's going to happen with that aspect of it? > > when you go to companies to find out if they're prepared or not. how do you test this? how do you get them ready? > > really walking through the business continuity plan that they've been putting together understanding that aspect of the business, where parts and different things come from, and understanding what suppliers are and the last thing you want to do is understand where that business continuity rises up within the corporation. > > are most corporations insured for these situations or uninsured? > > most companies are probably from our aspect because we're insurance, most companies are insured, but there is an entity that do not have insurance for these types of events and those are things that to some degree don't aren't covered from the insurance aspect. > > and regular insurance might not cover all of the needs correct? > > no it might not cover all of your needs so that really
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that aspect is you don't-- loss of market share, situations where you're not able to get your product out to your customers-- things like that are things that insurance does not cover. > > tom varney, great to have you on the show. thank you. > > thank you very much. coming up... mba pay off. are grads likely to find jobs with or without. one... and after the break.... how to dodge a "fake" financial advisor. that's next with bill moller!
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for retirement, for a child's college expenses, for so many reasons, we're always being told to save & invest. well the first step is to find a professional to do that. but if you don't invest the time to do your research, well you could end up with the wrong financial adviser. gail marksjarvis is the personal finance columnist at the chicago tribune. gail-- wrong for so many reasons.
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> > wrong because we really don't know what we're looking for so we go to someone and they're called a financial consultant and we think they're there to give us the best advice. they may give us decent advice but that's not really why they're there. they're paid to be sales people. so you have to realize that. if you want a really top-quality adviser, they will be called an adviser and they will live by something called the fiduciary standard. if you ask if they do, that will help you clarify whether they're really there for your good or whether they might be induced to sell something more expensive that's good for them, but not necessarily for you. > > yeah they're being paid to push products. a lot of those have high commissions on them... > > and it could be insurance, it could be annuity it could be higher price mutual funds. all of these take money out of your pocket and of course they need money to live on, but you need
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to maximize your money by being in the less expensive and good products. > > the unfortunate reality is that the more you have need of help, the likelier that you'll be taken advantage of. the consumer federation of america and aarp and a number of other organizations have written to the securities and exchange commission and said you have to regulate this-- too many people are suggesting they're advisers when they aren't. and they're concerned about it but since 1999 the regulators are dragging their feet on this. > > alright well writing columns like this is helping put a spotlight on it. gail markjarvis from the chicago tribune, thanks so much. > > thank you. bill-- graduating with an mba pays off. a couple of new survey's including one by the council that adminsters the admissions test for business school... finds 80% of employers intend to hire mba's this year. up from 73% last year. and, there's a slight uptick in the u.s. with strong demand for mbas in asia and europe. employeers planing to hire college grads minus an mba falls to 74% from 75%.
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just ahead-- a money manager takes us on a shopping spree for high yielding stocks... chart talk is next
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matt shapiro president of n.w.
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s capital is tracking down some high-yielding stocks for us this morning. good morning, matt. > > morning, angie. > > let's run through the dogs of the dow. what do you like here? well a lot of investors of course have gotten back into the dividend stuff this year and these stocks have had quite a turnaround. you know at&t with the big news yesterday buying directv yields about 5%... verizon, merck, intel-- these are the dogs of the dow, and they've all done very well. i want to caution investors you've gotta take a look at the 10 year treasury which yesterday touched 2 and a half percent and that's very very low so what my concern is that investors are piling out of growth that they liked last year and back into defensive dividend stuff that they're not taking a look at that 10 year and if the winds change a little bit and rates rise, they might be a little disappointed with playing it too safe in too big of dividends. > > what should they do here? > > take a balanced approach. you have to be very careful-- remember the stock market's expected return is 79%. if you
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reach too high and yield, the company is really just paying out investors with borrowed money and is not in a sense making money and paying out dividends of profits. so one of the dogs of the dow that i really like is mcdonald's that pays close to 3 1/2% but has unquestioned profitability and not a lot of debt on its balance sheet like an at&t paying out bigger dividend. another thing you can also do is get a 5% is to look at tobacco stocks which if you're comfortable with the risk of tabasco investing ethically and morally, they will pay you about 5 percent and all those have been on fire. > > thank you matt. > > you're welcome. its time for us to roll out of here for today... coming up tomorrow-- an entreprenuer who is mustering up profits selling hot dogs made from cows that roam free and are fed grass. join us for a taste of a healthy hot dog wednesday. from all of us at first business.. have a good day!
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