Transcript: Thursday, November 28, 2013

nightly-business-report-september-25-201321-300x225ANNOUNCER: This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and Susie
Gharib, brought to you in part by —


everybody. Happy Thanksgiving.

Happy Thanksgiving, Susie.

Happy Thanksgiving.

MATHISEN: And welcome, everybody, to a special Thanksgiving edition

GHARIB: And I`m Susie Gharib.

Well, it is Thanksgiving Day here in the U.S., a time marking the
beginning of the holiday season and a time when millions of Americans take
to the road and skies to be with family and friends. Couple that with the
start of the Jewish holiday Hanukkah, and you have the makings of a very
special time.

MATHISEN: It`s also though a time for investors to think about what
to do with their portfolios as this year draws to a close and next year

So, tonight, we`re going to look how the markets tend to behave these
final weeks of the year and how that sets up for 2014.

We`ll also look at the sector who that has a lot riding on these
final few weeks, and that, of course, is retail.

MATHISEN: And that is where we begin tonight with retail. This
year, the list of major retailers and malls open for business on
Thanksgiving is longer than it has ever been. Many big names are staying
open through Black Friday and as Courtney Reagan tell us, the retail
industry has a lot riding on this plan.


For many Americans, Thanksgiving Day is packed with traditions, tuning into
watch the Macy`s (NYSE:M) parade, eating a turkey dinner, watching football
and shopping.

UNIDENTIFIED MALE: I`d say I`d rather go shopping, yes, because
normally that`s a tradition of ours, we could go shopping Thanksgiving. It
excites us a bit, you know?

UNIDENTIFIED FEMALE: Once Thanksgiving is over, I`ll be going
shopping, probably Macy`s.

REAGAN: Every year, it seems the Christmas creep moves earlier and
earlier. For many retailers, Thanksgiving Day hours have moved from an
experiment to annual tradition. Kmart is the most aggressive, opening
stores at 6:00 a.m. on this Thanksgiving Day. Toys “R” Us will welcome
shoppers beginning at 5:00 p.m., Wall Mart begins its promotion at 6:00,
Target (NYSE:TGT), Macy`s (NYSE:M), JCPenney, Kohl`s (NYSE:KSS) and Sears
(NASDAQ:SHLD) are opening doors at 8:00 p.m. today and not locking them
until late Black Friday night.

Not every retail will have Thanksgiving shopping hours and not every
American loves the idea either but many do.

WENDY LIEBMANN WSL STRATEGIC RETAIL: They got people who wouldn`t
normally shop to come out and shop. So, mom stayed at home because she was
exhausted after cooking, but dad and the kids went out shopping.

REAGAN: The National Retail Federation says Thanksgiving Day
shoppers tend to be younger with 30 percent more 18 to 34 years old, out
shopping for Turkey Day deal last year than the year prior.

(on camera): Well, retailers have seen foot traffic increase over
the past couple years with the earlier Thanksgiving hours, analysts say it
doesn`t add to overall sales. In some cases, it shifts the purchasing
earlier in the weekend or it spreads out spending over a longer period of

(voice-over): And this year, timing is everything. Thanksgiving
falls on the latest possible date, shortening the traditional holiday
shopping season to just 25 days, down from 31 days last year.

LIEBMANN: There is a real sense f urgency retailers are trying to do
everything they can to get people to spend early and often and late.

REAGAN: Plus, the beginning of the eight-day Hanukkah celebration
begins today, the first time it`s coincided with Thanksgiving in 95 years.

The National Retail Federation says while only 6.5 percent of holiday
shoppers celebrate Hanukkah, the group intends to spend 25 percent more
this year than the average holiday shopper. Retailers are trickling
outdoor buster special deals throughout the weekend, in some cases offering
big deal Thursday geared toward the younger shopper and targeting moms and
older shoppers Friday and beyond.



GHARIB: For a list of store opening times, log to our Web site,

MATHISEN: Well, Toys “R” Us is one of the retailers whose doors will
open for the first time this year on Thanksgiving night.

Richard Barry is the company`s chief merchandising officer. He joins
us now to discuss his expectations for this holiday shopping season.

Richard, welcome. I`ve got a lot riding on this interview because if
my 8-year-old knew that I was talking to the chief at Toys “R” Us, he`d be

Aside from opening early, Richard, what is the difference going to be
this year at Toys “R” Us compared to last year?

mentioned, we have a very compressed holiday shopping season this year. We
have the collision of the Hanukkah holiday, we have Thanksgiving and we
only have a short period of time between Thanksgiving and Christmas. In
fact, people are going to wake up on Sunday morning and they`re going to
realize that it`s actually December. So, that puts a lot of pressure
overall on consumers.

And at Toys “R” Us, we think about how we can make some really great
compelling offers for the customers and get them motivated, so we can get
those procrastinators out of their homes, into their cars, and into the
stores to get some really great deals.

GHARIB: So, Richard, shoppers are addicted to discounts and sales
and promotions. Are you doing more or less than last year or just about
the same?

BARRY: Of course, we`re doing more. We`ve got a ton of really great
offers. In fact, we have over 300 door busters this year, compared to 200
last year. We have deals at 5:00. We have deals at midnight. We have
deals at 5:00 a.m. in the morning.

And, actually, the whole weekend we`ll have a series of really great
deals, including some deals on our new Toys “R” Us online shopping channel
that we`ve launched.

Our strategy here really is to make sure that we give customers the
greatest option to enjoy the deals that we have and to really make sure
that they can decide when they want to shop.

So, for those customers that want to stay at home, that`s cool, too.
So, at 12:01 a.m. dotcom on Thursday, our dotcom site went live with our
offers. So, you can stay with your PJs and have a cup of tea and shop. Or
you can get down to the store at 5:00 p.m. on Thursday or you can also get
that at 5:00 a.m. on Friday morning.

Whatever suits you, we got the opportunities for you.

MATHISEN: So, let`s talk a little bit about different categories of
toys. Is there one must-have toy this year? I realize that children of
different ages and so what might work for a 3-year-old isn`t going to work
for an 8-year-old or a 14-year-old, but what do you expect category-wise is
going to be the hot area this year?

BARRY: There is a load of hot toys this year. We`re excited about
the invasion that the industry is bringing. So, for those preschoolers,
there`s an incredible Elmo this year, which is the first Elmo that actually
hugs you back and incredible. It`s one of the items on our hot holiday toy
list. We`ve got —

MATHISEN: I find that mildly disturbing, an Elmo that hugs me back,
but I`ll go with it, Richard.

BARRY: We`ll get you one.


BARRY: So, we`ve also got a really fantastic item called the Uglies
(ph), it`s an animated dog. You put your hand inside the dog and it makes
some really great sounds like farting and belching. It`s all farting and
belching is a hit for toys anytime, any day of the week.

But also in the video game space, we`ve got a lot of really great
invasion that`s come this year. So whether it`s Skylanders SWAP Force from
Activision or it`s Disney (NYSE:DIS) Infinity, those games allow you to
take action figures and basically be able to play them in a video game, and
we got really fantastic offers.


BARRY: Those items are 50 percent off in the sale.

GHARIB: One frustration for many parents and shoppers is getting
their hands on those special toys. I mean, sometimes you just can`t find
them. Are you going to be well-stocked? And real quickly, what kind of
sales bump are you expecting from the promotions and being open on
Thanksgiving Day?

BARRY: Well, we`re expecting a really great day. We have tons of
inventory in our stores. And we have inventory arriving every single day.

And in fact, the shortened holiday period plays to the strength of
Toys “R” Us. We pride ourselves in having the widest assortments, having
the greatest number of exclusives, having great products that you can only
find at our stores, and we pride ourselves on our in stock position.

So, we`ll have trucks rolling up to the stores right until a minute
before we close on Christmas Eve to make sure that we have all those
hottest toys in stock.

MATHISEN: Richard, I think I`m going to pass on the dog you can put
your hand into and makes those anatomical sounds. But when you describe
them in the nice British accent, it sounded OK to me.

Richard Barry, chief merchandising officer at Toys “R” Us.

BARRY: Cheers.

GHARIB: Well, our next guest is forecasting a not so jolly holiday
sales season.

He`s Britt Beemer, chairman and CEO of America`s Research Group.

What you just heard, Britt, this enthusiasm from Toys “R” Us, Richard
Barry. You know, why are you so gloom my?

going to happen is he`s right on the fact on Thursday, you`ll see more
shoppers go on Thursday than last year. You know, 50.2 percent of America
shopped before 6:30 on Friday morning a year ago.

MATHISEN: Fifty-two percent of Americans shopped?

BEEMER: Fifty-point-two — shopped and bought.

MATHISEN: In a store or online or both?

BEEMER: Just in the stores alone.

MATHISEN: Whoa, that`s astonishing.

BEEMER: And 50 percent of them shopped on Thursday night, and 60
percent of them shopped on Friday morning.

This year, those numbers could shift. I think you`ll see as high as
a 37 percent increase of shoppers on Thursday night and Friday as you move

MATHISEN: That sounds like what we`re going to be writing about and
talking about on Monday morning, that this weekend got off to a blockbuster

BEEMER: And then what`s going to happen is that retailers won`t do
any promotions after Thanksgiving and they lose that momentum.

And here`s, Susie, is the issue, is no longer how many days there are
between Thanksgiving and Christmas, it`s how many days retailers are
advertising 50 percent off. Over the last three Christmas season, they
have been advertising 50 percent off four to five days, and each of those
season, they`ve basically averaged a 2.1 percent to 2.5 percent increase.
That`s why I think it will be weak again this year because the consumer
wants those deals and then they have to wait until the last week to get


MATHISEN: So, is 50 percent off the magic moment that brings people
into the stores?

BEEMER: Well, actually, 70 percent is the magic number.

MATHISEN: Is that better? I mean, that`s more magic. Yes.

GHARIB: That means you`re going to wait longer to get that 70
percent —

BEEMER: Exactly.

GHARIB: Closer to Christmastime. So, I mean, who is doing it right?
Who`s going to be the winner and the loser in terms of retailers out there?

BEEMER: Well, Walmart has got the new wrinkle, which is early bird
specials, they say, we`re going to have these 20 items in our store for the
first hour after we open and we guarantee you go and get them. That`s a
new wrinkle in the whole Black Friday equation.

The trouble is, Susie, here`s the issue — we can have a 30 percent
increase in shoppers, but we can only have a 30 percent increase in dollars
because the transaction rates are going down so dramatically, and that`s
the problem with retail today like at Best Buy (NYSE:BBY). They struggled
because they sell more TVs but at lower prices.

MATHISEN: They`re going to make money still at 50 — merchants that
is — they`re going to make money at 50 percent and 70 percent off. Let`s
not make a mistake here. But they`re just going to have less revenue and
less profit as a result of that discount.

BEEMER: Exactly. But what happens is — keep in mind this — if a
retailer gets a consumer to walk in the door on Black Friday weekend, there
is a 70 percent chance they`ll come back two or three times to buy. If
they don`t walk in on Black Friday, there is a 40 percent chance they`ll
walk in at all during the season.

So, those early bird specials on Thursday and Friday are the retail
momentum changer to get the consumer in the store time and time again.

GHARIB: Talking about consumer spending and buying, what is the
consumer mood? Is your take on how much they are willing to open wallets?

BEEMER: Well, it`s hard to say. I want to say three things about
that. One is consumers are going to buy more gifts for more people this
year, but here is what is interesting. Last year, $35 to $50 was the
number one gift range. Today — this year, it`s $25 to $35. So, they are
buying more gifts but they`re dropping lower.

And $20 to $25, it`s the other issue. It`s going to be bigger this

MATHISEN: Very quickly, hot product is going to be?

BEEMER: Computers.

MATHISEN: Computers. Computers, tablets?

BEEMER: Computers, tablets, right, 16 percent —

GHARIB: iPads —

BEEMER: — of consumers said they`re going to last year, said
they`re going to buy computers. It`s 20 percent, TV and all that — and
one more point. The other question is how much will digital technology
affect retailers because as you see, as people are beginning to click from
the — you know, from their — you know, to the Internet into their card,
that`s up 3,000 percent this year and as more retailers like Target
(NYSE:TGT) get in it, you`ll see 15 percent sales on digital —

MATHISEN: You see Britt`s tie with the Christmas package.

GHARIB: Yes, he`s in the mood.

MATHISEN: He`s in the mood.

GHARIB: Britt, thanks so much. We really appreciate it.

BEEMER: Thank you.

GHARIB: Britt Beemer, chairman and CEO of America`s Research Group.

MATHISEN: Well, over the past decade, coming up, as we head into the
final month of the year, what might the stock market`s past performance
around this time tell us about the future? And our next guest is going to
tell you what he thinks are the safest and riskiest things in the market?
Naughty and nice for your money.


MATHISEN: Over the past decade, December has been kind to investors
and with stock indexes at all time or multi-year highs, there are high
hopes once again for the end of the year.

Dominic Chu takes a look now whether stocks can deliver some holiday


Let`s talk turkey or better yet, dancer about bulls, because when it comes
to investing, recent history shows us that being in the stock market has
produced some pretty plump returns. Over the past decade, the S&P 500 has
posted an average gain of nearly 3 percent between Thanksgiving and the end
of the year. And it`s up nine out of the last 10 years.

If you`re looking for some of the stocks that did the best during
that time frame, take a look at Goodyear Tire. Those shares were up nearly
11 percent on average.

And then, there`s homebuilder Lennar (NYSE:LEN), which is up 10.5
percent on average during Thanksgiving and year end.

And if you`re looking for more fuel from the bullish camp, consider
this. In addition to this year, there have only been four other times in
the last 50 years when the S&P 500 has been up by 20 percent or more in
just the first 10 months of the year. In each of those other four
occasions, the index finished the year with additional gains. It`s one of
the reasons why some experts believe that even with stocks at record highs,
they are still worth buying.

end of the year, it`s still OK to come back into the markets. In fact,
have a plan. Do it on a very much rebalancing basis each month, all the
way into next year and into 2015.

CHU (on camera): So, making gradual purchases of stock over time is
one way to go. This is also the time of year when investors look at
investing in retailers. After all, it`s shopping season.

A key question will be whether Americans end up spending that hard
earned money.

JOE FELDMAN, TELSEY ADVISORY GROUP: I think it`s going to be a
challenging season. What is interesting to me is, I think we might get —
the expectation is so low right now, we might get to the end of the season
and realize, hey, things aren`t quite as bad as we thought, and that could
be the surprise.

CHU (voice-over): The market debate continues but at least for now,
there is some optimism, even if it`s of the cautious variety.



GHARIB: Well, Doug Cote is pretty optimistic about the outlook for
the U.S. stock market and he`s predicting the S&P 500 index will reach 2020
in the New Year. He`s chief market strategist of ING Investment

Doug, welcome to the program and happy Thanksgiving.


GHARIB: So, tell us why you think that — what is going to drive the
markets in the New Year?

COTE: Well, the broadening of the global economic expansion, I
think, is going to go from a U.S.-centric only it`s going to broaden to the
other developed markets but also to the emerging markets and frontier
markets. And I think that`s very under appreciated. If you look at the
trends over the past decade, the global economy has doubled over that time

MATHISEN: You know, Doug, we`re already up 33 percent or thereabouts
on NASDAQ this year. Twenty-seven percent for the S&P, that`s going to be
— if it closed at this level, the best year since 1997 for the S&P. About
25 percent for the Dow.

Can it keep going? I mean, that`s just getting up there.

COTE: Well, if you look at it, it`s been driven by all-time record
profits in 2013 and my forecast for 2014 is more record profits. So, it`s
fundamentally based and I think the earnings growth can continue to propel
this market forward. If you look at it, it`s still cheap. It`s up 14.8 on
next year earnings. That still has compelling value, and I think that
investors are starting to capitulate to get into this market and I think it
will further drive this market forward.

GHARIB: Well, I don`t need to tell you, but one worry for investors
is, you know, what it`s going to be like once the Federal Reserve begins
reducing stimulus at taper talk? And so, do you think that the Fed
tapering will work for or against investors in the New Year?

COTE: I believe it`s time that`s come to start tapering back that
it`s excessive. It`s unconventional monetary policy. The economy is
actually in really good shape, where record high GDP, record high retail
sales, as your previous report went on. And it`s to remove that.

I think it`s already discounted in the market and I think what it is
showing you that we`re getting back to normal and that we don`t need the
Fed excessive stimulus. So I think it`s all good news.

MATHISEN: Where could I eke out a little extra alpha as they say on
Wall Street? Is it emerging markets? Is it midcaps? Is it small caps?

COTE: Well, I think you want to come down the risk curve, that is,
getting into mid caps. You talked about that and because of this global
economic expansion, we like pretty much anything global so emerging
markets, frontier markets, global REITs, as well, I think is an attractive
place if we`re in inflation environment down the road, then our REITs can
really adjust their rent to almost as inflation hedge.

GHARIB: Doug, we have half a minute. Tell us quickly sectors that
you think will do well. I you can`t name specific stock.

COTE: Well, I like consumer discretionary because they have been
supported by the Fed stimulus and it`s helped housing. It`s helped the
markets. As a matter of fact, with the wealth effect, consumer wealth is
an all-time record high.

I like technology, in particular small cap technology, software and
services, and industrials, machinery, I think because of the global
economic expansion that is going to be the earnings growth certainly will
be there. So it`s a good fundamental place to be.

GHARIB: OK. Terrific. Thanks so much for coming on the program.

COTE: You`re welcome.

GHARIB: Doug Cote, chief market strategist of ING Investment

MATHISEN: Well, with the stock market sitting at lofty levels, many
Americans may be feeling a little more thankful this year, and when people
feel thankful, they might also feel a little more charitable. And this
year, giving to charity is taking on a whole new level of importance.

Robert Frank explains.


With stock markets reaching new highs, wealth and giving are also expected
to grow this year. Charitable giving is expected to grow in the low to mid
single digits from last year`s $316 billion. The giving pledge that
promised by billionaires to give away half their wealth launched by Bill
Gates and Warren Buffet has helped boost giving by entrepreneurs, tech
titans and overseas billionaires.

Spanx founder Sara Blakely is the recent signer, bringing to the
total pledge signers to over 100.

(on camera): And the new philanthropists no longer just want to
write a check. They want measurable, accountable results.

Matthew Bishop, the author of “Philanthrocapitalism” says impact
investing and social returns have replaced old notions of just writing a

growing theme that what matters most in giving is not just the amount but
the impact that you have. And I think we are going to hear more and more
about impact, both on the giving side but also on how they invest.

FRANK: He said the arts may get less while education, technology and
programs targeting poverty in the U.S. may get more.

BISHOP: There is growing pressure and awareness in America that
maybe more money needs to go to dealing with some property issues is at
home in America, which have maybe not been as high on the radar in the past
few years.

FRANK: It`s estimated to take another five to six years before we
reach that 2006 peak for giving.



GHARIB: Still to come, the start of the holiday season is the start
of some very busy days on the roads, in the air and in the theaters. The
year-end cost and competition for your dollars when we come back.


MATHISEN: This Thanksgiving, traveling to celebrate with friends,
family is serving up the usual busy days — crowded roads, packed planes,
long lines. More than 39 million Americans will travel at least 40 miles
this weekend and depending on how you`re traveling there is good news and
bad news.

Phil LeBeau explains.


There is good news and bad news for those traveling this Thanksgiving
weekend. Let`s start with the good news. Gas prices hovering close to
$3.20 a gallon means 39 million people taking to the reads will be paying
less to fill up for the big trip.

UNIDENTIFIED MALE: People will travel more than when it was close to

UNIDENTIFIED MALE: I think more people will travel. I think for
sure, but is it really cheaper? No, it`s not that cheaper.

LEBEAU: AAA says the average amount expected to be spent on
Thanksgiving trips this year will be $465. Experts disagree about whether
or not the overall amounts spent on trips will be the same or dip a little
lower. For its part, the U.S. travel association expects the amount spent
on Thanksgiving travel to be up 1 percent to 2 percent.

ROGER DOW, U.S. TRAVEL ASSOCIATION: When it comes to travel, people
are going to travel to see their families, to be with friends and that`s
going to mean a lot of congestion at our airports.

LEBEAU: The bad news for Thanksgiving travelers is reserve for the 3
million who are flying. Travelocity says the average round trip domestic
airfare is $415, up almost 7 percent, mainly because planes will be packed
and airlines have few if any seats they need to discount.

TERRY TRIPPLER, THEPLANERULERS.COM: You may see fewer people in the
concourses, but the planes are still going to be filled because the
airlines have really got the supply and demand and pretty well can figure
it out.

LEBEAU (on camera): Adding to the hassle this long holiday weekend
is a winter storm moving across the country and bringing with it delays and

(voice-over): Meaning, those who actually got where they wanted to
be for Thanksgiving on time truly had something to be thankful for.



GHARIB: Well, the box office is typically very busy these last few
weeks of the year with a slew of high-profile movies and award contenders
set to premiere to theater near you.

So, what is hitting the silver screen and how will ticket sales stack

Julia Boorstin breaks down the expectation for the box office and the


This holiday season box office could be bigger than ever, thanks to
Lionsgate “Hunger Games: Catching Fire” kicking it off with the biggest
November opening weekend ever. And a range of other promising slicks in
the pipeline like Warner Brothers “Hobbit” sequel, “The Desolation of
Smaug”, and Universal`s “Anchorman 2.”

thing about the holiday movie season. It`s about seven or eight weeks.
It`s dollar for dollar, just as important as the summer because it accounts
for nearly 20 percent of the total year box office compressed into the
short time frame at the end of the year. So, it`s extremely important.

BOORSTIN: And with a diverse mix of films from Oscar fair like
Mandela`s “Long Walk to Freedom”, to family films including Disney`s
animated “Frozen”, to films like appeal to both critics and audiences like
Sony`s “American Hustle,” and Fox`s “Secret Life of Walter Mitty”, visitors
to Universal (NYSE:UVV) City walk in Los Angeles are excited to head to

UNIDENTIFIED MALE: “Hunger Games,” definitely.

UNIDENTIFIED MALE: There is always better stuff around the holiday
season because they hold it for when everybody has time and money. So, and
has the time to watch.

UNIDENTIFIED MALE: Oh, yes, it makes you want to just get to the
movies every day if you can.

BOORSTIN (on camera): The big question is whether this year`s lineup
of holiday movies will help the box office surpass last year. It`s now
lacking by about 2 percent but has the potential to meet or surpass last
year`s $10. 8 billion growth.

(voice-over): Which studios will come out on top?

Rentrak`s Dergarabedian says Lionsgate as a smaller studio is the one
to beat, though Disney`s well-positioned with both “Saving Mr. Banks”,
starring Tom Hanks and the animated family film “Frozen”.

Warner Brothers is also well-positioned with the “Hobbit” follow up.
Last year, “The Hobbit: An Unexpected Journey” grossed the most worldwide.
This is a particularly important time for the studios as they release the
films most likely to draw Oscar buzz, hoping to bring home those golden
statuettes in February.

DERGARABEDIAN: It`s a great time for summer movies mixed in with
Oscar caliber films. So, it`s a perfect time to be a moviegoer.



MATHISEN: And that is it for this special edition of NIGHTLY
BUSINESS REPORT for tonight. I`m Tyler Mathisen. Happy Thanksgiving,

And for all of you who observed, happy Hanukkah.

GHARIB: And I`m Susie Gharib. Happy Thanksgiving from me, as well.
Have a great evening everyone.


Nightly Business Report transcripts and video are available on-line post
broadcast at The program is transcribed by CQRC
Transcriptions, LLC. Updates may be posted at a later date. The views of
our guests and commentators are their own and do not necessarily represent
the views of Nightly Business Report, or CNBC, Inc. Information presented
on Nightly Business Report is not and should not be considered as
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