Transcript for How May Stocks React to Gadhafi's Death?
-- futures were up this morning at the ballot believe they've -- their gains. Joining me now to discuss let's -- or not is Simon constable from the Wall Street Journal. It's -- -- -- to -- -- before we get to the market let's start out with reports out of Libya where the military -- as Moammar Gadhafi has been killed. How might -- be complete removal of Gadhafi. Affect the market trade in oil prices. OK first of all let's let's get to the the thing about whether coming to Daffy is in fact dead there are a lot of conflicting reports about whether rheostat. Probably hasn't been confirmed -- suited to any rigorous degree southbound I expect we'll continue to see different reports Hong laughs throughout the day that -- -- common -- is -- found that He is gone hand and out completely and that there is a new government and we might exact expect oil production to. Kick back up and that will be very good for oil prices in times or consume us because -- would mean oil prices would go down. Libya. Produced. Every day about -- -- -- that just shy of two million barrels a day of oil a day com that's you know about one point seven. Most of that when tax sports and most of the acts -- went to Italy. And I might say about that. That justified safely but it doesn't it is -- -- time world but it is a global market for oil and so once we see -- production coming back on line which will be rather slow I'm mansion. -- them we will see prices to ease a little twist. Interest -- -- right. Back here at how some in the latest jobless claims are released just an hour ago they were down at 6000 to 400. 3000. New claims what are we to make of this this week. Okay what they -- you're not gonna like this -- this my usual my usual thing wag its over 400000 and that's back. Com and and -- -- that's not consistent with jobs growth in the economy we need. We need to seek to new plants -- -- -- -- below 400000 consistently week after a week after week after week. -- two to start getting jobs growth and we need is jobs and growth I would also point out that the prior week's -- mama 409000. Was revised. Up from 404000. If you think the original mama would basically down thousands of -- have been -- no difference at -- this is as steady week after week over 400000 now we found one white wasn't. In the last half -- so it's not -- -- -- it's it's not good at school. Not at all right into a little while -- we're gonna get. New numbers on existing home sales what are -- expecting there. -- we're expecting this to draw. Com which is kind of surprising given that we've seen mortgage rates dropping two two very very low levels but basically this is this is an indication of how weak the economy is. Com and how insecure consumers fail may feel insecure about it jobs -- they feel insecure about the future of the housing market mental willing to take the plunge and buy houses and death. So existing home sales don't -- court. That's actually bad news for the rest of the economy because when people buy houses they tend to find new furniture and electronics and things like -- to cash. The houses now money don't buy them make them do that -- You don't get that trickled down affecting -- -- let's turn to Europe hope of a deal -- -- your debt crisis now seems to be fading mrs. -- day -- -- changing what's going on now with Germany and France. Okay what what we've come what what we've got here is something Mets tonight you -- I've been talking about thought. For two years if not over two years dominates its state the plan to sort of -- -- that the circle pace Portugal Italy Ireland Greece and Spain me. Fiscally imprudent conferees. What what what we're getting now is that officials have ruled out a plan to directly -- bond issues and -- countries borrowed by issuing bonds they sell bonds and market immediate cash. For those -- -- one of the people of the plans was. Thought to be maybe there -- be a direct guarantee. That that won't happen now and that has -- -- people I'm a little bit unhappy -- -- -- ideas that -- the government -- government seeking to raise money at a bond auction would borrow additional amounts of money from a special fund that will guarantee say 20% of the bonds won't be repaid and that's -- -- Investors to invest in risky debt somehow I don't see that working somehow found but you know I'm -- on optimist on this sort of front and meanwhile. We got a 100003. Work as sound pretty unhappy out pro testing. Read rioting I think -- wanted to yesterday front petrol bombs bricks stones -- this stuff plans that can help. At a standstill -- -- and they have all -- my hands on it. All these ideas on the table but no plan to reassure Greece or -- market currently. Yeah -- not muscle problem it's a confidence problem I'm. And and the Greek leadership as they stock -- that -- and a bit of a quandary here when it seems obvious to some people that may -- missing -- of the -- devalue that currency. Defaults on mad dads and and and then watch has people gunned down holiday because the currencies -- And yet by doing that they could also unleash a financial tsunami through the rest of Europe com had a light making it making it look rather like the rights at the great crash of 20082009. So it's. Really young tough tough decisions -- and meanwhile -- in the streets the last. -- -- -- let's about Swiss banking giant UBS. Not and the and it's great difficulties lately they're planning some big -- what you're hearing about that. Okay thoughtful -- to -- big is sort of on the State's this of this bank and I Dynegy and employed 171776. People this is an enormous company they'd they'd they have an investment banking unit has -- and overall bank. Coming in -- -- -- focus on what they call wealth management. And that's basically stockbrokers. Who manage the money of rich people com and they they've -- buy stocks and bonds -- -- rich people and they got very handsome. Profits for doing that in the -- -- -- That that's the move to do it had to do that and and by shrinking Lima some banking unit have to lay people off that's what's going on that becomes -- have to you know a -- trading scandal. What which which -- -- and sound contrite -- very good so. They say this was in process before that. But I guess they would say that what -- Yeah I guess it was that's that's a lot of layoffs we're talking about -- it was about groupon. Talking again about and -- you know what is the latest what is this going to happen -- However the public group on group often angry that our. So yes yes I mean this was a company that I'm one time rejected -- six billion dollar bid from from Google to -- -- and while we can get more and they wanted. Twenty -- and and then the IPO market went soft. Com and then they called off that -- which is when -- -- around and -- to investors and Ellen Roche is back on and they have lowered that estimate what they can making -- to about twelve billion dollars. Top people I talked to around the office in -- in this recklessly -- twelve billion might be a stretch. I think it I think if this -- the the estimated valuation goes below that six Billy and I talked about the original off of from from from Google. Then these guys are going to be so red face that mechanism to -- ruffles missed fashion and done. And funny glasses seminal scene around Silicon Valley. There's a lot doubts about his company about the sustainability of its business model about whether it's a really -- for a tech company or whether it's just something that happens to be on the -- has already techie. It's hard to value these types of companies fees to Herring. Let's take one more look at the markets right now and Simon you know the -- pretty. Black rain out similar to the opened yesterday it seems like a lot of investors and traders sitting on the sidelines. Yeah I don't I don't blame them common disagree on silence would probably be very wise thing to do it today given that we don't know what's gonna come out of Europe I think if you get any hints of to a deal being written in this cemented in Europe that would down that would have people very -- and as if it looks like it's completely full upon. That would be very embarrassed but I I don't blame anyone for deficit -- hands on this one -- -- side they just may not be worth the risk. Understandable Simon constable from the Wall Street Journal all his -- have -- -- -- -- like you're tied it -- by the way. Thank you very much nice and writes keep me warm thanks thank -- --
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