Transcript for Dow Climbs 98 Points
Dow futures were up ahead of the bell following yesterday's drop back below the 121000 mark. Joining me now as we're happy to have her every Friday is Alex -- -- Steel. Did discuss solid business headlines at this hour Alex great to see you. So let's start off with that finance summit in Europe just about an hour ago 26 -- the 27 countries taking part endorsed a plan. To solve the debt prices the only rolled out. Why don't they like the plan. It really comes down to nationalization. Giving up your sovereignty for the sake of unity -- -- than many things we heard at the summit the biggest one. -- this unity deal so basically you're gonna see countries that participate have to reduce their budget deficit to about 3% of GDP so basically. What they make first is what they spend each here compared to their -- -- look at the US word about 5% of Greece is about eight or 9%. And if you don't reach that you're looking at penalties more intrusive control -- taxiing. Spending by government and bring just really didn't want to be -- part of that in that no specific. Terms so that means it doesn't happen they need it. Consensus does that mean the prime minister of Britain David Cameron is being painted as a a bad guy here it didn't it's not going to happen it's sort of as some respect me today portfolio manager it's an amendment say to our constitution not a constitutional change. A big Ed Ed total treaty change would -- take all 27 nations that participate in and the European Union. Did to sign onto it is really only need the seventeen countries on the year -- -- -- katic gravy here. -- any heat when he was really anti hero when he first started -- a little bit of payback here as well. I think it sort of like if Germany or France want to -- in Galveston -- sad at how the US ran our budget we want that and that's kind of Britain's saying as well. OK now -- -- where does the -- go from here. It really -- specifics of we need specifics on the penalty is what that means whose enforcing it PLC specifics on the permanent bailout unless they're trying to move forth. To July 2012. And you look at the futures they're up about a hundred points a few hours ago -- -- -- about 25 points so I think the market sort of a glass half full at this point but they really need to get the specifics which they're hoping to iron out. Throughout that day today and European Central Bank -- all of us. Well what happened markets want to play -- it is they want the European Central Bank to bail out the governments they want them to continually. By -- dot -- the sovereign bonds for unlimited period of time to lower the interest rates as high heels of we've been seeing frank sanitary time. He CBS said they are not going to do that but they aren't doing is they're buying bonds from banks a limited amount. But they're providing unlimited funding for bank sedan that lender of last resort for banks. But not governments. People really split on this -- saying OK well we -- -- unity if we see at the strong plan put forth perhaps ECB will step in and say are right you'd done your part will do our part. But I read some analysts -- that say that will be disastrous it will take impetus. -- of nations to really lower that budget deficit especially the back stops that they're talking about right out -- summit aren't strong enough. -- also threaten the flip side that Italy has a lot of debt that's come due in February 2012 a lot of requirements they got to meet. So might take another big funding crisis that ECB to act so we're still really split on that grant got it head ECB said he didn't like the -- that's something okay. All right turning to the other side of the world we have some news out of China this morning -- that country's inflation is slowing what's the resent. And what's the impact yet this really big deal they think is actually getting -- their inflation came down a four point 2%. In November that's from five point 5% in October and a high at over 6% two main reasons one. -- prices fell and also the Central Bank has been taking a lot of steps to tighten money drain money -- assistant and it worked. The bears are gonna say China's slowing too fast the bulls are gonna say this is really good it leaves -- more wiggle when T east to sort of lower the amount of money the banks have to hold in their reserves get more money out into the system. Perhaps even cut interest rates -- get more money at this system and that's really good thing it's China's middle class they're growing middle class. Is really the growth driver at China by 201544%. At -- population will be middle class. Average minimum rate weight soared 20% just from 2009 to 2010. Household income is going 9% year consumption is going 11% a year. And behind for months so we're we don't want that to continue I think you're gonna see that happen in the next six months. Could be a positive sign for sure. -- just last hour Alex we got numbers on the trade deficit for October they came in at 43 point five billion dollars that's down one point 6% from the month. -- is -- reflection of what's going on in Europe and China. Well the balance trump. Where did you is dead right but we're still -- importing more than we're -- and imports and exports from September -- at about 1% that's not so great. Now what this means for the broader economy that you bride and I -- in China is that you have experts to the -- -- for about 2% of our GDP. It's not that much but -- -- it's it's substance it. The really -- we're gonna have -- say we're exporting goods to Canada then export to the eurozone and orders from Canada -- as the secondary market orders. There was an interesting point at China's right now only counts for -- 710s of our GDP it's really small. But there when the fastest growing consumers of our goods -- China tenure moving average of growth is about 20% compared to 5%. The -- so we're any deceased strong growth like I mentioned about the middle class out of China so our exports continue to ground. Can you imagine that day -- China's buying made in America my god it -- do -- -- night. Aren't let's turn back to something -- -- Jon Corzine's appearance on Capitol Hill yesterday he was testifying of course about the collapse. Of MF global let's play a clip where where he's testified. -- remain deeply concerned about the impact that the -- reconciled and frozen funds have on MF global customers and others. I simply do not know where the money it's -- widely accounts have not been reconciled today. He did not know where the money -- overall Alex did this testimony help or hurt mr. Corzine's. I can't say I mean a court of public opinion didn't help my acting illegally -- -- civil and criminal charges I think it's pretty and now it. -- -- at the top don't usually get prosecuted or charged with those white collar crime is usually the guy is signing. The papers so criminally. I mean who knows that you might not be -- -- track but different public opinion saying I never intended for this to happen I don't know where -- over one billion dollars of clients' funds are. But -- this is an acceptable because it shows that he didn't know it was happening in his own company he did -- turned a blind diet or his orders got confused as somehow. All of those things don't really cannot and there are tumor congressional hearings to -- next week you know we talked for three and a half hours yesterday so this will continue to be. A big story about three X because well that's -- had a tough year. All right and a little while we'll be getting numbers on consumer sentiment what should we be looking for there. Gary don't sit -- -- November is that for 64 we could be either you know 63 year 65 for December but -- positive sign that think you have to pay attention to his -- retail sales have been extraordinarily well. We -- in November that retail hiring was up 50000 in November which means that they need to -- the employees in the store because demand so high and we also sign initial jobless claims for the week ending last Thursday hit the second lowest level since Lehman declared bankruptcy back in 2008. The -- people in that are unemployed more people -- jobs and -- thing that they're more money they're gonna spend that's going to also be a positive so even it disappoints. There are some -- ho about Barry got pay -- Absolutely and taking one -- look at the Dow some hope -- -- as well clearly. And the Dow trading back above 121000 again Alex up more than 93 points looks like a positive. I'm front right now. Yet -- that in my -- begins next week as well we have every decision I next week which we're gonna wanna see what they're thinking about Europe any quantitative easing in the retail sales citizen emergency data coming out. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
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