Transcript for Greece Downgraded, Gas Prices Continue Climb
What I've come. Bell on ABC news now -- the Dallas morning executives and guests of there it is the opening bell. It's 22 of February everybody and then -- in New York Dow futures they were down this morning edging away. From that crucial thirteen thousand market joining me now to discuss all the business headlines for the state L agreement from Bloomberg TV Alan good morning -- -- Hey candidacy it's good while since it's certainly has been I don't know what kind of what kind of rumors you've been putting out -- but it's good to see you. -- -- -- is that we got close at what we hit thirteen thousand yesterday couldn't quite stay there that was not fifty points you think going to be hitting it again today we're gonna stay over top. You know based on the early trading it seems I -- especially for the initial military it's gonna be a struggle because what's going on as we had some reports come out from overseas. That remind folks that even though you have this money now going agrees to help -- the bail out. The economic problems still continue for example you how to report showing European services and manufacturing unexpectedly shrinking in February. There's also report out there are suggesting that China. May -- its manufacturing shrank for a fourth month so those are some of the jitters that are out there. And also we need to putting contacts the fact that. Stocks have really been on a -- lately so for example through yesterday's close the Dow is up six point 1% for the year to date the S&P. Even though folks look at the valuations and they say they're treating kind of near historical not lowest. But at a discount compared to where we typically are. Compared to earnings are still talking about the fact that the index is up more than 8% this year and were not. Yeah I Della Davos and I was really good digesting as well I wanna go to Greece is for 12 biggest Fitch has downgraded Greece's credit rating to C. You know we've been hearing so many things about this is just -- the the down. This is -- of kicking the can down the road that this was something that was expected. So does this kind of -- rating downgrade really make much of a difference. He now a lot of obviously the Greek problems have been factored into the markets whether it's the bond market in Europe whether it's a stock market in the US Europe or anywhere around the globe so it's not really a market moving event. But you Millie is a reminder. That some folks that hey you know leak still could default -- even when he gets the money it still has years of problems had a bit. Especially given the extent of the budget cuts right housing economy really gonna grow. When they're cutting so many workers they're cutting pensions for example. And they're cutting other benefits I do want to point out what Fitch is basing this downgrade on. Is the fact that as part of the agreement that was struck in recent days. Is how much of what people call -- haircut the bondholders need to take and because the debt is be exchanged for less than what. Greece -- regionally -- -- when they bought the bonds from the government. They're saying technically you're dealing already with some kind of invested -- And -- what looking like 2030 cents loss on the dollar for that more yeah of the matter if an architect that I wanted to stateside now the president's gonna unveil a plan -- to revamp the corporate tax code. Some of the changes as we understand them again the the announcement is not been made just yet but. It would lower the top rate from 35% that a 25%. Also would eliminate some deductions to offset those cuts and then it would add a tax. On foreign earnings and now the big question is what's Wall Street gonna make of those kinds of moves. He now. I can't hear that phrase -- the event it's not really. A market moving event today -- huge story obviously for all of us. But the reason I think we're not seeing it play out as a market event is because we know the gridlock that's going on Washington we know that would -- the president proposes. Faces an uphill battle with party know there's gonna be Republican opposition to it. And that's because countering some of those on tax cut proposals are also eliminating some of the the loopholes and the deductions that companies have been able to take it also and we need to remember. That a number of the Republican candidates have called -- even steeper. Reductions when it comes to where they want to see the corporate rate move down to you so. Will be interesting to see right as -- get all the specifics later today what some of the the voices are back. About right talking so horrendously embassy elected if -- heavily invested international company or heavily invested domestic company we're not gonna see those kinds of divergence of split exactly. Judge okay we've been talking about the price of gas obviously because that's been going up in recent weeks. And obviously affected by the price of oil so what are we looking at for -- today. So what interestingly it was moving down a little bit today but we need to remember that oil prices have really -- they're up 7% so far this year. On also gas prices have been jumping -- -- -- that and that's certainly a major concern in fact a big. Challenge for her the president in the re election cycle and also he's going to be making some proposals this week. Talking about an -- certainly included also would these tax proposals. Is despite calling for for you know some of these cuts. That break should still be there for companies that are investing in alternative energy. One thing that we're seeing today also is. Gas demand is at an eleven year low and that's reflection -- of the fact that people are buying more fuel efficient vehicles. But it's also a reflection of the fact that the gas prices have gone up so much so folks are watching -- Ron certainly as one of the factors today. Because the John. The IEA and date on manners and forgetting my -- my initials you know now you got inspectors a pet. Basically saying that they lefty -- after two days with no way forward -- that the prices of oil pile -- -- were down but again you know big question mark out there. And we know how volatile this right now based on what's happening in Italy. Right to having a touchy right on it because -- -- 20% a 20% of the world's oil supply coming through the Strait of Hormuz which is obviously heavily watched. By Iran -- -- -- of us up at even hearing any kind of talk about possibly tapping into the strategic oil reserves -- mean is that something given that it is an election year. Is that discussion even taking place. You know I haven't heard -- and and we know it's pretty unusual. On the so I've not heard that yet but we have to remember that when the president -- Talking about. The payroll tax cut heat talked about how much more it's costing folks. To -- you know -- to fill their grocery basket and to fill their tank and how the money that will be saved it from paying less for the payroll taxes. Is something that's needed and necessary to help deal with higher costs. And economists are looking for a positive number right we've got the mortgage rates at or near record lows. We've had warm weather and one of our economists -- Bloomberg today he's talking about in a need to watch out in the number to see if it's gonna be artificially high because the weather. Has been so unseasonably warm a lot more sense for how out -- shopping that would -- Would've otherwise -- but according to the median estimate of economists we surveyed. The whole collective group were looking for the highest -- to those existing home sales since may of twenty -- so another sign there. That the stability seems to really have some traction in the housing market we do want to dig a little into the numbers and look for things like. How many of the sales are distressed sales how many -- for cash meaning investors coming and to by the homes as opposed to a consumer coming into my home and so again we're gonna dig a little deeper and and see it with a real -- those underneath. I look forward of those numbers also Microsoft filed a complaint against Motorola mobility. Motorola mobility owned by Google what are you hearing about this lawsuit. Wright says this is. Keep in mind that Motorola mobility. Google is in the process of trying to buy back company at twelve and a half billion dollar deal. So as Microsoft files this complaint the suit with the antitrust folks in you're up. It's part of this beat. Patent disputes and -- not legislation not litigation that's happening around the globe among the major tech companies -- Samsung apple HTC Microsoft Google. All trying to protect their patents. Or say you have stolen. You know something up that belongs to me said they are saying that Motorola mobility is trying to block sales of PC in game consoles. That use its software. Our -- -- little dizzy try to figure out who owns who these days right. And non technology to get right exactly -- Begin who owns who GM may be coming up an alliance for one of Europe's biggest carmakers there what do you know about this. Rates -- this is true Joseph that you're talking about the two companies apparently. Are talking about a possible alliance. In Europe to -- of course being a French auto maker and who confirmed that is the French of labor minister saying that these talks were going on. GM when contacted by chaos and you know we talk two companies all the time on and what I want to put upper context here. Is GM has really been struggling with -- that's -- European brown that it has. And -- -- also has seen its profit and it's sales decline however Volkswagen. Has been doing well so this -- apparently as. You know if they do some kind of alliance can they be a stronger competitor to a Volkswagen of the world. The European market in the spotlight let's take one last look -- at the Dow down about eleven points at 121954. It very close at thirteen thousand point. Alan Raymond from Bloomberg TV always great to see the boy -- -- told her. The -- that support the boycott you know it wasn't -- it. The Huntley didn't schedule a trial about -- -- -- Japanese guys now on M Mondays and Wednesdays next -- public and part time. Very good to hear we're very excited to hear that Allen have a great day. -- -- --
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