Apple's Earning Action: Street Smart (07/23)

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July 23 (Bloomberg) -- On today's "Street Smart," Trish Regan and Adam Johnson find your last trade of today and first trade for tomorrow. (Source: Bloomberg)

They had to pare things down.

And it takes years to develop an engineer a proper car or truck.

Now four years afterward, all of these vehicles are starting to hit the market this year and into next year.

It will go from having one of the most stale windups to one of the freshest.

Earnings -- one of the most stale line out to one of the freshest.

Earnings might look a little low for this quarter, but they are moving on to great things.

Ford has a new truck coming next year.

One year, and then they will have the freshest truck on a market.

That does it for the markets.

We are back in 30 minutes.

In the meantime, "street smart" starts right now.

Apple, rotten or right?

It is the earnings report everyone has been waiting for.

Everything you need to know about america's favorite technology tighten straight ahead.

And the ceo of tedium marriage rate.

An exclusive interview with one of the largest online brokerage firms.

Plus, boeing grounded again.

Injured 10 passengers.

How many incidents can the airliner have before its bottom line is also hurt?

This is "street smart" with trish regan and adam johnson.

The s&p is flat right now, ahead of the most important technology earnings of this season.

We have about 59 minutes until the closing bell.

Apple will dominate things a day after the close.

Their only four asset class says in the world.

Stocks, bonds, commodities, and apple.

Not so much anymore.

These are the charts you need to see right now.

The s&p 500 has been up higher, yes.

It is flat right now, but we're still near the all-time highs for this market.

That may be because earnings are coming in better.

You can certainly make a case for the yields to go higher.

The 30-year is up.

It is getting more expensive to get a mortgage.

It is also getting a lot harder.

Natural gas is moving higher.

Of all the 21 commodities in the crb index, it is of the most.

Let's move on to the big three.

These are the stocks you need to be watching as we go into the close.

To take a look at the shares of lockheed martin.

It is the world's biggest defense contractor.

It reported earnings of sales atop analyst estimates.

The shares of the world's biggest maker an analog computer shifts, they are rising.

Industrial markets rising have offset a slump in the pc market.

And we will finish off with a big mover to the downside.

Penn national falling the most since 2011. that is after analysts cut its forecast for profits.

There are affected in 18 different jurisdictions.

The one he did not talk about, our top story.

The earnings report you have been waiting for, apple.

We will bring you those numbers soon.

But right now, we will talk about what makes this company really tick.

Hand, it is not the iwatch.

Sorry, siri, but maybe apple has lost some of its shine.

And competitors are trying to cash in.

Take a look at this.

Sorry, i don't have dates like that.

I'm sorry, i can only do one thing at a time.

I guess our point is not one of those things.

Should we just play chopsticks?

[laughter] it is not like apple has not surprised us in the past.

Have we seen the end?

Let's go to our guests.

Cristina, i'm going to start with you.

This earnings report is going to be a little rough.

A lot of people who want phones are looking seriously at samsung.

But you should not count apple out.

You just saw a $10 million writedown.

They make fun of the fact that you can make chopsticks, but where are the apps like that for the service?

Absolutely, you make a good point.

Why is it taking so long for them to bring out new products?

It is very frustrating, for investors especially.

We saw this massive release at the end of 2012. and we have those great quarterly results.

And we said, the reason there's going to be this gap is because they have something new that they want to roll out and all eyes on a new product.

That did not happen.

They have had a massive product drought in 2013. apple alone on just refreshing the iphone and the ipad, it will not get the revenue growth that will get investment.

You need that new product.

Absolutely, and that is where they are hiring so much engineers -- many engineers.

How long can you give them?

We know that they have 100 engineers working on this mobil fitness wearable thing.

We have seen some patent drawings and they're very interesting.

It is a pedometer, maybe a heart rate monitor and it is a growing category, but what they have come to depend on is the iphone.

That is the giant product for them.

It has been a great success for them.

When you take a longer-term view for growth in the company, it has slowed to single digits.

This is over half their revenues.

Probably at least that in terms of profits.

Without a new iphone out there, they do not get that refresh cycle.

And they do not get the benefit of adding geographies.

When they will add new countries, new continents even, that would lead to new growth.

They are already where they are going to be.

There could still be some growth in china, other than that is all about researching old products.

And the danger is that if you do not offer new products, then you have the risk of someone looking to samsung or another competitor.

How long will it be?

It will depend on whether tim cook is a good ceo or not.

Why wait for that?

We've had three quarters in a row of flat or sagging earnings.

We already know he is not putting up the numbers.

You need to look for a rest of the calendar year.

The return cash to shareholders is also a positive.

But to leave a gaping hole at the beginning of 2013 were there or is no product launch and momentum faded, you could make the argument that apple is lagging the competition.

Let's not make a mistake and confuse the stock price with what the company is doing.

They're selling more iphones than ever, more ipads than ever.

Their market share has doubled in the past year.

Cory -- july they are a great, big company.

They were down 2% the previous quarter and down 11% the previous quarter, and in the previous quarter was flat.

Cuts and yet, these are some of the most profitable -- and yet, these are some of the most profitable quarters this company has ever had.

They have made some fundamental changes, changes in the operating margins.

It is a long stretch to call the biggest year the company has ever had a failure.

Christina, can you help resolve the little tiff cory and i are having?

They are writing down the surface like crazy.

That is a failure.

You don't see them doing that for the apple products.

Cory is correct, to write them off as a figure because they have flat road is incorrect.

But, high-end they have saturated.

If that is the case, the amount of new devices they will sell half to either be lower or they have to get into the emerging markets.

I missed a rare opportunity to buy apple at a discount because me they will come out with a neat new product.

We see some modest upside.

We expect some modest upside in the current june quarter.

But exactly, the lack of expectations, the bar has been reset.

It allows for any upside to give us a pop in the stock.

But you've got to worry about how the longer-term picture for apple is getting much year.

-- is getting muckier.

Coming up, the tedium arcade -- the tv a marriage.

C.e.o. will be joining us.

? the banks are back.

Strong growth this quarter.

It to be a mere trade posting a 19.5% rise in quarterly earnings.

-- t d a merit trade posting 19.5% rise in quarterly earnings.

The ceo joins us now.

I is the activity in two years.

What's -- what brings -- what is the catalyst?

I think there is some confidence in the markets and they are starting to see some rotation in equity funds.

But those who have been more active are treading more frequently.

That is good for your business.

No question.

What are people buying out?

A lot of equity mutual funds, e.t.f.'s, and i rotation back into basic materials, more stocks.

They're moving into more cyclical places.

The retail investors seems to be getting their toes back in the water.

Not fighting in, but getting back into the market after having been absent for years.

-- not diving in, but getting back into the market after having been absent for years.

Is there a shift going on?

We have surveys where people are telling us more bullish.

There's a difference.

Watch what i say and not what i do.

They're positioning their portfolios into equities on a more bullish basis.

And sometimes you have to be careful with retail investors.

And that said, everyone is talking about this great rotation and there's a lot of money in retail accounts that has been in fixed-income.

You're saying you're starting to see some of that shed, but not yet agreed rotation.

Not yet the great rotation, but this morning we were calling it the mini-rotation.

We will take it, because we are very focused on equities -- on equities.

Turning the quarter, 40% was on equities.

In options.

And that is retail investors?

Incredible.

There are in protection strategies, income generation.

Buying lala stock and protecting their position.

That is what a lot of people have been doing.

What does this tell you?

The retail investor has become more sophisticated as a result of what they're -- have gone through?

They have been ahead of this run.

And still, probably looking at the most hated rally ever.

Gregg's the -- people do not have the confidence yet, because it is still early with the economy starting to turn.

The fact that we are starting to talk about tapering-q e is a good thing, not a bad thing.

Really, it is a good thing?

It is better.

You think the market will hold up?

Grex the way trends are going now, i don't think it will rocket it out, but it is doing better.

It is hanging in there pretty good.

The using -- you think things are getting better?

A lot of this depends on volatility.

We know it is correlated to volatility.

What do you think?

Is there more volatility to come?

Hard to predict.

When the fed starts to fall back more, we should see some increased volatility in the market.

It is hard to back away from that.

And when we see that, september?

Some would say september, and other economists would say early next year.

Fred thompson, ceo of td ameritrade.

Thank you for being here.

Coming up come out time to look at the emerging markets.

We will go there after a little -- or should i say submerging markets.

Will go there after a bit.

And how important is the pope's trip to brazil?

? correct time for a little insight into action.

Here is why.

Look at the difference between emerging-market in white and the s&p 500 in yellow.

They seem to trade very similarly, but if you look at what is going on in the past several months, a big difference.

Hence the term submerging markets.

The new question is what brings these things back together.

Is it time to look at the emerging market?

With that in mind, let's look at the emerging markets etf.

As it turns out, over half of the eem , four countries account for over half of that.

I got a lot of notes in the past week saying that you have to buy the eem vs.

The differential.

You could do that, but let's dig a little bit deeper.

What you get versus what you pay.

The korean e.t.f., earnings growth vs.

76% of valuation 10.3. we couldn't go out and buy the eem or we could be more selective.

We want to try to get more exciting than the u.s.. it is tough to quantify what is happening in china.

Earnings growth of 76% at a valuation of 10.3 times, that it's my attention.

That might be worth a look.

Very interesting stuff.

Do you agree?

When you focus in on that sector, you have to be very concerned about what is happening on the chip side.

1 billion smartphones being sold, but you have slowing growth and slowing prices.

All right, moving on in today's global outlook.

Pope francis arrived in britain -- in brazil as his vote -- his first major overseas visit.

This is a crucial trip for the pope and the catholic church.

They're having a hard time keeping people as catholics.

You were there.

In 1994, about 75% of brazilians identified themselves as catholics.

Fast-forward 19, 20 years later, and it is only 57%. catholics are apparently becoming smaller and smaller as a group.

They are still the majority, but more and more are leaving for other denominations or other sects.

Evangelicals is one thing, but here is why this is important.

One of the main reasons a lot of experts say he was elected to the pope was to focus on those emerging markets.

The they had never had one outside of europe.

And now they have one.

He is from argentina.

He is bringing a message of social justice with regard to the wealth gap, the disparity.

There will be on a huge international stage in the next couple of years for things like world cup soccer and the olympics.

And the catholic church has struggled in brazil because people feel disconnected to it.

There are other issues, birth control, for example.

It is accepted in the evangelical states.

And i've been to these churches.

It is fun.

They want to have a good time.

And as a result, they want to get a better market share.

And you were in brazil recently.

It was there a difference?

Absolutely, and there is an evangelical church on every corner.

Apple has three ways to play its slump and potential comeback.

? today if the date wall street have been waiting for.

Apple open its books for all the world to see.

Apple was known to record low guidance each quarter to make it look like it launched earnings right out of the park.

But now they're telling the story more like it really is.

Its stock is down almost 20% year-to-date.

And their revenue is sure to shrink.

They're dropping about 2% each year.

It should be preparing for a big disappointment?

Cory johnson has the story.

Could we be surprised?

We can always be surprised.

Is it likely?

I think the focus in this quarter is going to be the iphone and the iphone sales.

It will give us a sense of what is going on in the marketplace at large.

Is this smart phone business growing and do we have the chance to see the existing phone, the iphone5 growing in the market?

It is not a new product by any stretch of the imagination.

Competitors have been coming out with phones every 18 months instead of every 24 months.

But apple's position in the market is not a growing one.

We will see if they can grow it on their own.

Colin, what does this leave you for your expectations for today?

Apple has what is called an experienced curve.

Has a product has been in the market lager, they're able to extract more gross margin.

It is very possible for apple to get some of sites.

We like shares at this level, particularly with the buyback supporting it at the four hundred dollar level.

And you are in front of the refresh cycle.

And you were telling us earlier that it might be an opportunity for people.

Absolutely.

The high-end market is definitely maturing.

Apple is being slowed -- slow to address the shifts in the marketplace.

This is about as good a market.

As we see in the near term.

It is risky, because we are betting that they will come up with as good products at the iphone.

Let me go to dan and see what you're doing ahead of earnings.

I agree with colin.

We saw apple dipped below $400. in april, there was a spike in the implied volatility.

But we did not seen near the panic or anxiety about the the buying.

Traders are kind of comfortable to stop trading at this four hundred level.

I'm looking for a bullish estimate.

And looking at the august 425- 450 calls spread.

It limits your downside and give you the opportunity to play the pop.

I don't mind getting short of there because i think that is the high part of the range.

It takes awhile to create a new product.

Everybody is impatient looking for that iwatch.

I can only look at the business and tell you what's it is looking like.

The two numbers i will be looking for the most are the unit growth of the iphone, because that has come down from triple digits.

And there's been a lot of talk about whether they will look for a low-cost model of the phone.

I don't know if they will be able to -- if there -- if they will ever go there if they're still selling the phone.

Wouldn't that help them in emerging markets, if they could lower the price?

If they cannot offer the true apple experience to get the cannot put the probe -- the components in the phone at that price, my brother?

That is a good point.

But they have made it pretty clear they will not deliver a subpar experience product to consumers.

Remember the man out?

-- the nano?

Couldn't you create something that is almost as good?

It you think about the ipad many verses the ipad, it is not really a low-priced product.

-- the ipad mini versus the ipad, it is not really a low- priced product.

The thing that kind of bothers me about apple is, are they going to let motorola come out at a price that is aggressive and take shares from them before they even roll out their next version of the iphone?

It seems that apple is moving a bit slow.

You are nodding in agreement donvan?

Absolutely, i think they need to speed up their product cycle.

Both from a functionality standpoint and from a creative standpoint.

Still, valuation wise, the stock is pretty compelling at these levels.

You've got to like the valuation.

Thanks to the whole gang.

10 people injured as the boeing 737 skids down victoria's runway.

How many incidents will we see from boeing before it might hit the bottom line?

? collects a boeing 737 skidded to a halt -- a boeing 737 skidded to a halt at lagarde @ airport last night.

Some are wondering whether the boeing brand can withstand another crisis.

It seems like bowling may actually be ok year.

Walk us through what they're saying.

Let me first share with you the statement from boeing, because i think that frames the information -- this situation.

Again, this is the statement from boeing.

The year is why they framed it that way.

They make parts for airplanes.

The landing gear was made by united technologies.

It is not a piece of bowling equipment.

You can understand from that context that it is not a growing problem.

That is why they are saying they will provide technical assistance.

Isn't it that the buck stops here.

At the end of the day, it is a boeing plane.

You can understand that notion, and yes tomaghi stock is at an all-time high -- and yes, the stock is an all-time high today.

The pilots missed the runway by three football fields in the asiana flight.

You can bet the ntsb was talking about the competency of the pilot.

In the incident where the transponder caught fire, that is made by honeywell.

And even the batteries were admittedly made by the japanese company.

But in the 787, of some of the you have to take responsibility.

And that is the question, ultimately, you have to take responsibility.

The guess we had on a show spoke with bloomberg print and noted that of all of the accident that could happen to an airliner, the one that is least concerning to the pilots is a loss of the nose landing gear.

You can see the plane sitting upright, the wings are not damaged.

The fuselage is still sitting upright.

The airplane, which is what boeing makes, did its job.

It caught everyone on the ground safely.

But it comes at a time when boeing is dealing with bad headlines.

Moving on to bitcoin, a texas man claims he operated a bitcoin ponzi scheme.

It sounds like the sec is trying to crack down.

They have been trying to crack down.

This is not like either a traditional ponzi scheme.

It happens to involve a new kind of currency.

They're not going after bitcoin, but the ponzi scheme.

The sec is not.

The man named in this complaint is trend in shavers, a 30-year- old man living in a town northeast of dallas, texas.

He went on bitcoin's message.

-- message boards, etc., and that yet an opportunity.

And the name of the company its first pirate savings and trust.

That is a little curious.

He then a eventually changed to bitcoin savings and trust.

And he said tomaghi raese 7% return on -- and he said, i can get you a 7% return on your investment.

He would cash with bitcoin with individuals that would like to keep their.

-- their transactions under the radar.

Those were the words he used to it, according to its complaint.

And he said when he was trying to sell it, i "i have yet to take a loss on any deal" and " risk is almost 0." and that is telling.

Whenever you say risk is almost zero or guaranteed, you have a problem.

66 people were involved in this across various states.

He took in just over 6000 bitcoin.

The average trading price during the length of this scheme was about four $0.5 million.

Greg did he cash that in?

He paid out.

You've got to pay the new investors with the money of the old investors.

The park -- the remainder, part of that he used to cash in his day trade.

He lost money on his day trade.

He also happened to hit the casino and a few times.

These are allegations.

It is not a criminal complaint because it is being brought by the sec.

But they are seeking financial damages as well as being banned.

It is a relatively small scheme when you consider bernie madoff, but it is interesting that it involves bitcoin.

It is.

It is definitely under the radar entirely, what he was talking about, but a whole thing is a little bit under the radar.

It is new.

Coming up, our clothes are, colin gillis, looking at pc problems.

? time for chart attack, where we bring you a chart that will make you smarter.

Hopefully, will make you a little bit of money.

It is simple.

Sales are going down.

We saw microsoft stock trade down double digits after they reported.

But this has been going on for some time.

It has.

Let's bring in a camera and show everybody what worldwide pc unit sales have been a year over year.

You can see the trend sliding down recently.

Those percentages for the year over year have changed.

We have five seconds -- five consecutive quarters which year- over-year declines.

The march quarter declines were the single worst quarter ever.

It is important to realize where the peak work -- where the peak was.

Which was the third quarter of 2011. the pc decline has been going on for quite some time.

Tablets, which will ship about 190 million units, those are growing nicely.

The question that you have to ask microsoft, what is to say we will ever get back to the peak of 2011? because effectively, we are substituting away from pc's to tablets and smartphones.

And a matter of -- and as a matter of fact, the pc will end up being less business focused.

That is an area where microsoft has been weak, tablets and mobile computing.

It sounds like microsoft, i would not want to be long, nor on intel.

But i would want to be long on mobile devices.

Correct.

But there is concern even on mobile devices because of moving into a stage of mid tier and lower tier.

If that is the case, what company is in the best position in that middle market?

Microsoft is actually changing -- chasing after that.

They have become the third ecosystem.

Android is number one and ios is no.

2. they own the high end.

And it might make it cheaper for the chinese market, for example.

Correct.

A less-expensive iphone will still be about $400. it will not be that-of an impact on the gross margins.

From electronic arts battlefield to the lockheed business desk, we have the numbers you need for the close.

Plus, in some analysis of apple numbers as soon as they come out.

? . ? all right, if you missed everything that happened during today's session, do not worry, we will get you caught up.

No.

2, sysco, down 1.5% as they agreed to by force fire.

And it may help sysco to win more business as customers beef up networks.

Let's talk about north folks southern, the railroad's stock is down about one fraction.

About 2/3 of 1%. earnings were estimated at $1.47 per share on a revenue of 2.3 $5 million.

Stocks down 4% in travellers after they reported a book value drop because of higher interest rates, pressuring bond portfolios.

Flipping from $68 earlier as they announced second quarter results.

Number seven, electronic arts, trading flat ahead of first quarter earnings reports, a result of loss of 69 cents per share on that news, $454 billion.

Keep it here, you have those results.

Peabody, shares jumping the most after the coal producer reported a surprise profit for the second quarter.

U.s. money costs predicted to drop by 3% this year.

Highest since 2008, second quarter profits came in above estimates, announcing plans to sell 425 restaurants and franchises, raising their dividends by 5 cents.

I was looking at this stock, it jumped 54% year to date.

Wow.

Looking at fries like that, i can understand why.

You always say that at this time of the day.

I love french fries.

#4, at&t, up nearly 1%. we are also keeping an eye on the margins of smartphone sales.

We will dig into those results.

Lockheed martin is up 2% today, raising their profit forecast as budget cuts earn less than they had predicted.

Programs like the f 35 fighter jets so far survived the cut and were designed to boost profits.

Little changed, the spinoff or sale of the chemicals unit for teflon coating, allowing you to focus less on physical products than on shareholders return.

Pretty sure that you get this by now, number one is apple.

It is actually down by 1.7% right now.

Earnings were released right after the bell.

The big question mark for investors, smartphone demand falling and closing in on saturation levels, we are watching those numbers coming out momentarily.

Looking at a market that is flat on the day, trading down more than two points.

[closing bell] you could call it the most important earnings reports for the technology sector.

The s&p, looking down by three, tying for a round of bear markets.

-- time for a round of bear markets.

Stock trading today it appears to have been driven largely by earnings.

We were just talking about the numbers.

The s&p 500 throughout the day, we tend to have on a day-by-day basis a bit of a balancing act between the customer is that -- companies that missed estimates and beat estimates.

Fearing the worst, the tax position came out with a forecast yesterday after the close that left them room to beat estimates, but we saw lot of weakness in networking, equipment, and other chip companies falling today, pulling down technology.

Telecom services, the best performing group in the session, not a lot of big individual gains, but as a group definitely the best performer.

Earnings continued to be the theme as we look ahead to the numbers coming after the close.

Let's check on commodities.

Question for you, as the oil rally run out of gas?

One bank is saying yes for now.

Orange juice futures making the headlines, and why you might want to put a ring on it.

It has to do with a rebound in gold.

Futures hitting 109 on friday, faltering since then as the market is concerned about the next move up from the fed.

Commerzbank in an e-mail report notes that crude investors are seeing a lack in profits and seeing the rally as over for now.

Meanwhile gold falls from a one month high as one of india's biggest buyers adds restrictions to imports.

Rebounding above that level for the second day in a row, that has a lot of the gold mining etf's doing very well.

For more on the treasury market, we go over to dominic chu.

We had our first big notes auctioned this week for treasuries, the two-year, $4.5 billion worth of notes were sold today.

The yield came in just a hair off average analyst estimates.

Here you can see a yield of about -- we will call at 34 basis points.

$3.80 a bids for every bond auction as opposed to an average of 3.5 over the last 10 sales, including the central banks, 30% of the overall sale, the two- year and five-year note yields, you can see it we are seeing moves to the upside, this is a short and of the maturity stacked -- spectrum.

On the benchmark yield, you can also see yields rising as prices are falling for those particular notes.

Tomorrow is big, we get another $35 billion in notes for sale.

Five years, 1:00 p.m. eastern time, at 10:00 a.m., new-home sales for the housing picture, housing rebound, evidence that that will continue coming at 10:00 a.m. tomorrow morning.

News on the at&t quarter -- for quarter earned -- third quarter earnings per share, coming in at 67 cents as opposed to estimates of 68 cents per share.

Let's go to the revenue for a moment.

Adam, this is always interesting to see.

You would almost always rather see them beat on the estimate side.

A bit of a beat their.

Because earlier as we found a number of times, complicated companies like at&t, you can kind of massage earnings for goodwill, etc., making revenues sort of by the time you get down to the bottom line.

Look, a little bit more the way you want, where revenue is just money coming through the door.

Either they sold stock or did not.

The big complaint has been that companies are going to earnings but not revenues, cost cutting their way to prosperity, which we all know does not work.

At&t, a little bit of a different story.

The top line is above the estimate, which is a good sign.

For more on today's trading, we have our street fighters for the market roundup.

Joining us from st.

Petersburg florida, jeff, and of course colleen, still with us in new york.

I have been dying to talk to you.

You said that july 19 would be the day when the market started to head south.

Has not happened yet.

What are you thinking?

I think the market looks pretty tired to me.

One of your reporters nailed it, the only sector of the 10 macro sectors that has rallied over the last 10 years between now and august 5 was tele- communications, the rest at all declined by this time of year.

I think you are going to hear some talk out of washington, d.c., before the adjournment kali if you will, about the sequester taking a bite out of the economy.

How does this change the market at current levels?

As i have targeted for a couple months, the lot -- july 19 was a window for the biggest potential decline of the year, with news backdrops, and i think the market looks tired.

You have a first chance that is for buying, but you are still vulnerable for the next few weeks.

Do you agree?

That is a very aggressive call, to put it politely.

At the top of the market for the last four years, to do that on a specific day?

If the market gets tired for a few weeks and cannot make new highs?

You might see some pullback.

But we have gone straight up, 130 points in the s&p. i am still looking for it to go higher.

Talking about the technicals, 18 in 10, corresponding with what it would be if the p/e ratio got to where would be in 2007. those ratios are very low and it is all about earnings.

Every day we are reminded of that.

Over 50% beat on revenues.

Optimism, what do you say, colin?

You look at the technology sector, it has been a big driver of growth, but can it be sustained?

What anthony talked about with his clients, the vex, crossing the 200 day moving average, the last time i did that was july of 2011, the night before the big call back on the options and what they are telling you with the equity market and what it is telling a. where does that leave you?

Jeff, you have to defend yourself.

You gave specific days as to when this market was going to turn.

I was on bloomberg on march 2, 2009 saying it would bottom this week and have been constructive ever since then remain long term constructive, but a number of indicators -- i have lived in washington for a long time and i think we are vulnerable for a double-digit decline for buying.

I am still positive long-term, but if you listen to the message of the market you can hear when you should be playing hard.

I think it is time for more than a pause, it is time for a 10% pullback.

What does investor do with that information?

I am never out of the market.

We have raised a decent amount of cash over the past three weeks and i would reposition it on the pullback.

I would like to think that there are potential catalysts for more upside on the market, with my optimism waning over this large move.

Looking at the catalyst, the dollar index is something we need to start paying attention to.

We mentioned the unwinding could have money in the markets, of which it did, and now we are seeing dollar unwinding.

All of that, look for that to go into the stock market in give us another boost.

Corporations fighting a strong dollar, two.

Five-year high just recently.

When it weakens a bed, it gives corporations better margins as well.

Thank you so much, spirited debate.

That is your clothes, everyone, ? breaking news on electronic arts, losing more than expected, 40 cents as opposed to 60 cents, clearly good news.

More importantly on the top line, sales figures are better than the estimate as well.

$490 million is what they announced as opposed to an estimate of $450 million.

We should point out that they are offering guidance this year in line with current estimates, $1.20 per earnings on revenues.

? president obama is calling on hollywood to help make his signature health-care law a success, in listing stars like oprah winfrey, bonn jovi, julianna goldman is in washington right now with all the details.

That is right.

When it comes to health-care reform one of the biggest challenges for the administration right now is getting young, healthy 20 somethings to enroll wants the exchanges opened up on october 1. to try to get the word out yesterday the white house brought together a group of celebrity artists, and the president stopped by to talk to a group of celebrities.

As you alluded to, representatives for oprah winfrey and bond jovi were on hand.

Funnyordie, for a sample, has 60 million video views per month, they see that as a way to get a lot of traction to raise awareness.

Why has it taken so long for the white house to move forward on this publicity push?

Right?

It is the middle of july and they really have a few months and people even close to the white house have been very critical of this delay.

They need to 0.7 million young people and rolled by 2014 to balance the cost of elderly patients, sicker patients, that will keep premiums low.

But this does present a marketing challenge of sorts to convince young people about why they should buy insurance, the risks of not having insurance.

They help having celebrities on board will raise the profile of this, but they were already rejected ones.

The white house approach to the nfl for their support in their marketing campaign and they rejected it.

There was a letter from its mcconnell and john horne and saying that given the divisive nature and persistence on popular nature of the law, it is difficult to understand why your location would risk your brand by lending your name to this promotion.

It looks like they might be getting oprah winfrey, but not the nfl.

For more on the president's health-care marketing push, we are bringing in our roundtable.

Adam, nec, good to see you guys.

I will start with you.

They need 27 million young people by 2014. 2.7 million young people by 2014. are they going to be able to make this deadline?

It will depend on whether they can convince these young people that these packages are a good deal for them.

The reason everyone is nervous is because the way that the affordable care act is structured it requires young healthy people to pay two times as much as they would normally spend it to subsidize the cost for the elderly or sick.

A young person today who might spend $74 a month is going to have spent $300 on health insurance under the new system.

That is what i want to try to convince using celebrities and sports agencies for these people to sign up.

Don't young people not have a choice?

If you do not sign up, you will pay a penalty.

You are, but the penalty is much smaller than the cost of health insurance.

Let's say that the penalty is $500 for year as opposed to $3,000 for health insurance and you know you can get free care in the emergency room.

Does this sound like a good plan to you?

Getting these celebrities on board?

I do not know it on jovi is still relevant to twentysomething's. funny or die might be.

They might be.

They are trying to reach out to this cohort that does not want to be marketed to end are tough to market to because they are not watching television, and it is extremely complicated.

Health insurance is complicated to begin with.

All of the changes happening with the affordable care at to make it even more complicated.

Is there a more subtle way to approach it?

As you said the top, 2.7 million young people are needed, a group that normally would not have insurance, they need to get them involved, educate them, explain why they have to do this and not just take the penalty and then pass the information along to their friends.

I think the white house is being smart to reach a group of people that do not like to marketed to.

It is not going to work without these young people on board.

They need the young people to pay more for health insurance to subsidize so that sicker and elderly people will not.

Last week as recline had an expensive piece describing the obama administration and of what they perfected in the 2012 campaign to reach out to young voters, using that same technique they've.

They might be able to get some is powerful in the other direction.

Whacks you make a good point.

President obama has done a heck of a job marketing to young people.

The youth vote was very important for him both times around.

Do you think they will respond positively?

President obama have much of the most successful start-ups of all time because he reached young people in a way that he had not before.

Obviously, financial incentives worked against young people in some cases, but they are being smart in strategically trying to reach out humor sides, celebrities, social media, to try to drive that conversation.

They are then going to need to talk.

The coal port is going to have to talk to each other in a peer to peer way.

That is the top part.

The initial wave of reaching out is tough, having them carry the message to their cohorts in colleagues?

That is where the white house is going to need to sustain more than reaching out to bonn jovi.

We are effectively months away from this being implemented.

Is it too little, too late?

It is late in the game.

If they had started much earlier i do not know how much that would have resonated.

As we all know, we wait until the last minute to do things.

If we get a concentrated campaign to social media sites, it will make some impact.

Will it get all the people enrolled?

I do not know.

If it was back in the spring and might not have had the focus the effort we need right now.

What you are going to see with the exchange is six people signing up right away, the coverage for them is going to be highly subsidized.

Every sixth person who becomes aware of the exchange is going to sign up -- every sixth person who becomes aware of the exchange is going to sign -- every secivk % -- sick person who becomes aware of the exchange is going to sign up, and if that is not balanced out it becomes a death spiral.

Do not want that.

Appreciate you guys being here today.

Coming up, we will be talking with one of the few in the crowd on the street who recommends buying the battered blackberry stock.

How about that?

Do not forget the apple earnings report just moments away, covering that from every angle, coming up right here on "street smart." ? ? breaking news out of kkr, the ceo will be stepping down and they announced earnings outside estimates, stepping down as president and ceo.

Let's get over to what is moving right now in the s&p 500 technology sector, the biggest decliner of the day happening minutes before apple's earnings crossed.

It is about 15% of the index, that could very well be a concern within the technology community.

Apple, 15% of the technology index, 19% of the s&p 500, that is why apple is so important and why we talk about it so much.

Let's back with apple earnings after this.

See you.

? ? this is "street smart," on bloomberg television.

I should probably say your iphone and ipad, because apple earnings are coming out momentary -- momentarily.

Look at that, 35.04 was the estimate, coming in better than that.

35.3 2 billion.

They beat on the top line and it looks like a bead on the bottom line.

Finally, how does that compare?

That is great, right in line with what we were looking for.

I tell you what, cory johnson out in san francisco, why not give us the breakdown?

We are just getting the numbers as they are crossing, but you are right, there is a 35th -- $35 billion number in revenues.

That shows flat year over year growth, not flat growth as in no growth, with no shrinkage, they continue to have the biggest third quarter the company has ever reported, but earnings for share were down 20% year-over- year, they're making less money with the same amount of revenue, that is not an ideal situation.

And it has not turned around with last year's announcement of great products.

In fact they are guiding the margins next quarter between 36% and 37%. the margins for this quarter, they are diving for a slightly higher than that, let's call it midpoint.

Also saying that fourth quarter there will be a new product release, as expected, but they have said that before.

I am going to keep digging through this, but i've had sales, a like number there.

14.6 million instead of the 17.4 that might have been predicted.

Ipad sales, that might have been the case, week this quarter.

Colin is willing to overlook that?

You were impressed, really impressed.

Alive and well, it is a great number, nice to see you apple continuing to have that great momentum.

You were surprised.

Let's a consensus of 26 million?

I was looking for 28.5. 31 million?

That gets back to build apple for blowing out a number.

Unfortunately, right, you had some tablet stopper, but the smartphone market is much bigger.

As you pointed out, you think there is a new iphone in the works and it looks like the company is saying the same thing.

There will be one more in the stock as you head into the products refresh cycle.

It is announced and always -- there could be some new product announcements this fall.

What do you think they could be?

We get a new iphone every single year.

[laughter] would be the features of the new iphone in september, potentially?

Last year, september 12 is when they unveiled the iphone5 with pre orders on the 21st, rolling it out to the u.s. and other countries, the bulk of the rollout during the holidays.

You can get fingerprint authentication.

You could get a brighter screen, new technology there.

Ios7 as an improved version of siri.

And people really want to use the camera on their phone with better results.

Ios7 is going to make its focus pictures.

I am looking at the press release right here, between 34,000,000,037 billion, operating expenses between 3.9 and 3.9 5 billion, how does that strike you?

On the gross margin side it is nice to see them maintain what they got this quarter.

All of those fears about cannibalization and model according have not materialized.

The revenue is a little light, but that is what they expected no new products.

People stop buying.

737 as opposed to 730. listen, once you get close to launching the iphone, people stop buying the old models.

A little better than expected.

Correct.

Colin lee likes the iphone sales.

The reason is the growth rates we are talking about here.

Growth rates by perspective, right?

From 58 to 29 to seven.

This should have been a seasonally weak quarter, so acceleration in growth, i am surprised it is not as big a deal anymore, but the mac number, i would have expected it to be better.

It tells you how bad the pc business is, they can sell fewer computers in gain shares because they are not shrinking as much as the other guy.

Lee iphone, $600, they got some of this with price.

The iphone pricing, down 2581, a substantial drop in sales, sequentially, in the price of the iphone.

It may be one of the reasons they were able to help.

The subsidization of the iphone by at&t and verizon, a chance that that would change by any point?

Which would mean that the number that corey just mentioned for the iphone goes lower.

Bear in mind that if you want to think about how much room there is for prices to go lower, you can purchase a nokia 520 on at&t for $99. on the one hand that is $100 on the other end.

Apple is a strong brand and they have a premium product.

Apple is guiding the street so that they can float away every quarter.

People said -- that is not with the going to happen that time around.

It looks like it may have.

It was within the company.

The concern about the street over of setting ourselves with apple policy guysit looks from their pain center years.

Who is tim cook?

The franchise is great but we have to make sure that it continues under his stewardship.

All eyes of fall.

-- on the fall.

It is not over yet.

We are talking about iphones and ipad as opposed to it is two years ago.

Still not talking about new products.

How does that strike you?

They focus on the customer.

They are not trying to sell products the wall street or stock to wall street.

They are trying to sell products and have wall street respond.

We have celebrated year-over- year growth that does not break out the ipad major over the ipad many, but the unit's sales are up 29% year-over-year.

The wake of the ipad mini is going to boost sales.

Thank you for the perspective on apple.

Coming up next, lost and found, we will tell you the story of more than 70 years.

? from their ? radioshack shares, rebounding this morning, but the stock rise the not stay.

And higher sales pellett yes, the company was touting in its release a comparable sales increase of 1.3%, which has not happened in a long time for radioshack.

At least not since 2012. the company makes it clear itself the strategy they were going for.

They said today that their strategy was to move through unproductive inventory and test a variety of promotional vehicles and that they knew that this would happen and they were trying to identify opportunities to better align promotional marketing going forward.

Traditionally the sales look good and they went up but then it was asked -- at what price?

Covering the stock they said, the increase that we saw, $10 million, that cost was 290 basis points in gross margin.

They try to really turn around to rejigger the business, what prices?

Trying to turn this around, looking at the earnings they lost, expected to lose another 90 cents this year.

They cannot seem to make any money.

It is painful.

We talked about this a couple of weeks ago when there was a report that they had hired an adviser to look into their finances.

Relevance is a big issue for radioshack.

It is not thought of as being current.

The company did confirm today that they hired peter solomon co.

And alex partners advisers , moving into planet fitness.

The company talked about its cash debt position that total liquidity $818 million.

Most analysts are saying that the turnaround efforts might work, but they need to work quickly.

Calling, you might have something to add here.

The brand itself?

In this tech savvy age?

Radioshack?

I think that have my battery club card here somewhere.

The question that investors ask me, would anyone like amazon or microsoft like it?

Turn it into a store?

And amazon showcase store?

But i have no.

Buys and is the -- jeff, the contributing editor here, you know him well, this morning he said that maybe they were getting themselves ready for sale, but the question is, who would buy it?

No one really has an answer.

As i said, the ceo had the concept store, you just saw the footage.

We did do some reporting on some of that.

We also looked at the issue of inventory and sales, but consumer electronics, you want to keep that moving quickly.

Sales have still been -- even though they got a bit positive, generally they have been lagging.

You do not want that inventory hanging around.

That have not.

Pimm fox, your show taking off in 15 minutes.

What do we have to look forward to?

We are going to talk about apple positive results and we are going to cover drugs and baseball.

Performance enhancing drugs?

Well, the world's first sports super agent is more to join us to talk about brian braun from the milwaukee brewers and the accusations against alex rodriguez.

What is next for major league baseball?

Much more, coming up next.

? ? you know what that means.

Time for the bizarre.

This is quite a shipload of silver.

$36 million in treasure was found under the atlantic in a world war ii era cargo ship.

Let's take a look at some of the big numbers behind this discovery.

It is pretty amazing stuff.

Amazing.

That was amazing?

Right?

Maybe we are in the wrong business.

3 million ships down there?

I must say.

It would be fun.

But we do get to hunt for stocks, right?

Future generations will find millions of iphones under the sea.

[laughter] the new i whenever.

Good to have you here.

Thank you for having me on.

Apple if they move forward?

Potential.

I would caution against the $500 price target.

Just because of the dynamics of the industry itself changing.

That is a good spot to be in.

Great results, 31.2 million iphones sold.

Pat what are you going to listen for on the call?

Basically educational demand.

We want to talk about channel inventory.

Selling against furloughs, the key things.

Tomorrow on "street smart," alan krueger will be asking how it felt.

? . . it is 56 minutes past the hour which means bloomberg is on the markets.

Here is how we ended the day for the major indices.

Pretty much mixed.

The s&p 500 up -- 22 points we will call it.

The nasdaq down.

Remember, we have waited all day for apple to come out with earnings.

If the company comes out with earnings that beat estimates, iphone sales were rocking, beating estimates.

The ipad sales, however, may trend lower.

The estimates were just around 17.4 million ipads.

Jenny up in the after-hours.

Cisco, $76 a share, a 29% rhenium for the closing price yesterday.

Other big news -- the casino operative plans to split into two companies later this year, citing bad weather and increased competition.

Lorillard one of the biggest laggards on the s&p 500. the menthol ban is unlikely for the cigarette makers.

And u.s. budget cuts ended up hurting less than experts predicted.

And peabody energy, the coal producer, they jumped above forecasts for lower mining costs . and at 33-month low after cool and wet weather provided prospects for that crop.

Joining us, the future specialist with global markets -- you are not just an expert because you trade them oddities.

Your first job was in a cornfield area -- you are not just next for it because you trade commodities.

Your first job was in a cornfield.

I was in nebraska and the corn there looked great.

That was the one place in question.

Nebraska and eastern iowa.

We have had.

Dacian issues.

It looks like we will get past those.

-- we have had some issues.

It looks like we will get past those.

It is not going to make that much of a difference.

Do you want to be buying corn?

No.

do you want to sell it?

Maybe, but don't have high expectations.

We can probably make this spike low down to 425 at some point, but once we hit that low, we probably will tread along the bottom until we talk about what south america is going to be doing.

Let's talk about more rain, more moisture.

Are we seeing this else where in the market?

Maybe soybeans?

What is the outlook for soybeans?

Soybeans, we are looking for a monster crop there as well.

This text has been automatically generated. It may not be 100% accurate.

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