Trade Deficit Biggest Since June

Alix Steel analyzes the morning business headlines.
8:14 | 01/13/12

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Transcript for Trade Deficit Biggest Since June
Dow futures were down this morning that's disappointing reports. Joining joining us -- to discuss all the business headlines as he does every Friday is Alex steal from the street Alex happy Friday the thirteenth -- at. So let's start with some breaking news the trade deficit grew more than 10% in November of 47 point eight billion dollars. That's the biggest increase since June is this number cause for concern. Yes. It and started really can't. This is the first time at white -- said in five months it basically means that we -- exporting less exporting less cars less planes let's manufacturing tools less machinery. And we -- importing a lot more -- meat imported almost 226. Billion dollars worth that stuff. But that's -- you don't want to sort of cough right at thirteen bad for trade deficit quite so fast if you look at October that was actually revised and it should not which is good so the bigger the number is the -- it is this not an -- is the better it is that's kind of how you -- look at it. So October wasn't that bad scene it's too early to -- to really tell yet every slot and in Europe probably Everest ascent looking area how does this affecting things. It's interesting and definitely a slowdown in Europe is going to hurt US exports but. US exports only account for about 13% average GDP -- our whole growth. -- dozen countries only account for 13%. So in total. Exports to your account for about 2% of our total GDP it's really not that huge. I think you really need to look at -- China and China's not a huge importer of goods yet only about seven tenths of a percent of our GDP. But it's the most fastest growing export market about 17% growth year on year in 2011. And -- is really ramping up their middle class mean minimum wages have soared 20% from 2009 to 2010. Consumption is growing 11% in com. Her years going 9% and that's what's really gonna drive our export markets we really have to key into that as well. Yeah everybody wants get a piece about market OK also out this morning Alex -- -- earnings JPMorgan Chase now the biggest bank in the country had to do. Yeah I was pretty -- It was a pretty murky report. So if you look at actual headlines they earn about ninety cents a share profit was about three point seven billion both of those in line. The real bummer here though was revenue which came in about money one point five billion that was well below estimates -- about one to one and a half billion -- that's how much they didn't make it. And that's not really -- if you look at the investment banking revenue side that was -- -- it really lost their money and net income coming in. -- -- 56%. Less than a third quarter total revenue in investment banking side down 30% year on year they had to let go about 616. People compensation is down 8% and you look at their entire portfolio. Trading and investing banking contributed about 25%. Of revenue in about 40% of profits. For 2000 intensity really -- need as part of their business to pick up. On the flip side though -- consumer business of all things was actually a lot better there was more demand for loans to the economy and that particular -- is -- recovering. Net charge offs were actually down and that's the money they set aside they say that's worth nothing so that's a good sign they also released more money. And that's rates they they kept less money in their in their reserves that's a good sign as well speaking one portfolio manager he's it you know what though we're pretty negative on the -- -- and this sort of just reaffirms. Why you were actually negative so this is going to be -- Yet and that's being we're hearing that Bank of America which of course used an attack on its bank is considering a further downsizing what's behind that thinking. It is -- report from the Wall Street Journal saying that the bank could actually withdraw from parts -- countries or sell assets there it they had to they filed that never. Orbit the Federal Reserve last year and that's sort of a measure of last resort now be considered pretty desperate on their part. They're just having a really hard time making money and that's because. They bought countrywide in 2008 they bought all those really bad mortgages. They came along with country ride they have all these settlements that they have to work out investors in terms of paying really big fees upwards -- you know eight billion dollars. To compensate for losses and that's a head -- that just does not seem to want to go away. In terms of the stock -- it's a 25% ready for the year and it's in well overbought territory so it just means that there's a lot of downside become. Earnings are coming next week we're looking at the bank making that money cents a share on revenue almost about 24 billion seat but you really want to focus on the mortgages and how to -- get them off their but. OK switching -- -- we're following a story out of China. We've been showing this video where the iPhone four S -- debuted today quickly sold out. And once in Beijing and never open and it got and by customers are waiting in line. Overnight is simply about Apple's loyal following -- what do you make -- -- story. Yeah and -- -- -- an open the -- -- because the crowds were too -- they -- why. Many people to think into the store and and that's why they didn't open -- definitely points to what we always hear anecdotally about really strong demand -- coming at China but in particular for good not to -- And if you look at it for years supposedly Smartphone sales will double to over one billion units making -- -- more than half. The loans sold in the world and majority that demands and -- come from emerging market countries like China. Like India and she'd be there I mean you know it commentary on the rising. Sun -- or in the middle class -- -- -- by 201544%. To China's population is supposed to be middle class. I also think -- -- into making cheaper products as well to really ramp up sales in emerging market countries but is still -- and I and I even a survey here in North America yesterday about 4000 customers. We're gonna buy Smart in the next in ninety days. 54% of them want and I. Unreal bright spot in that sector right let's go back to Europe for a minute we've got developments out of Italy and Greece today on the debt crisis give us the details. Yet -- cannot actually it just broke before the segment started to air here report is circulating that the S&P could finally be downgrading. -- Euro zone countries from their triple -- credit rating. Germany supposedly is not included in nest but we're looking at France S&P warned about a month ago that it could. Downgrade France's triple -- credit rating the market kind of been stressed waiting for this is that this could actually happened today. Which I would quite frankly argue wouldn't be a terrible thing kind kept his head -- out to get that uncertainty out all of your obviously isn't gonna like it today it might be good things sort of in a short time. -- inevitable as well -- let's let's talk about American Airlines it looks like there could be a bidding war. For American Airlines. By the bankrupt companies -- we as consumers being worried about all this consolidation in the airline industry. A lot of consolidation over the last few years Wright had delta and northwest United Airlines and con panel and Wall Street Journal reported that delta is now interested in American Airlines that TP cheap capital private equity firm is now also interested -- don't actually. One out and bought American Airlines -- -- 7%. The US market that's pretty huge. The reason why American Airlines is so well -- ovaries because it's the door way to Latin America that's what I heard described it because -- -- to get have been Miami. As well as -- new -- -- Potential other bidders billion US Airways -- much smaller merger perhaps even easier to get through. But airlines has about a year of restructurings and nothing's gonna go through yet this is -- amenable -- -- to see what's gonna stick. And they might circle for a year are anything else you're watching. Van into next week -- stepping its weakening -- watching those earnings we have Citigroup Wells Fargo Bank America -- things coming through the -- some housing data and policing that as well we -- the core inflation rate is rising here just over 2% wanna keep. Man okay Alan steel from the street where it's implement look at the Dow right -- trading down about 97 points as some things weighing on the market outlets. Have a great weekend think it.

This transcript has been automatically generated and may not be 100% accurate.

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