Wall Street Week with Louis Rukeyser; 2922; What's New For the Holidays?

Oh. This 30th year as America's most widely watched and trusted source of economic and financial advice Wall Street Week With Louis Rukeyser is made possible by Deloitte and Touche. A company isn't a building. And a business isn't a location. But a firm has its people. For professional services. The answer is the people of Deloitte and Touche. By the financial consultants of A.G. Edwards. Committed to making investors comfortable with their investments. With their futures. A.G. Edwards be comfortable. Oppenheimer Funds. Where a long term approach to investing has helped put financial security in the hands of millions of Americans. Oppenheimer Funds the white way to invest.

Right the comment from. A small company aggressive growth fund. And by contributions to your PBS station from viewers like you. Thank you. Produced Friday November 26. Our panelists are Alan Bond Tom Gallagher and Bernie Vance Murphy. Tonight's special guest is Daniel Berry senior retailing analyst at Merrill Lynch. Good evening I'm Louis Rukeyser This is Wall Street Week. Welcome back. And don't we all have an awful lot to be thankful for this year. A world at what at least passes for peace in these still volatile times. An economy that is pulling millions out of poverty both here and in many other places around the globe. And will in the U.S. become history's longest lasting recovery before next spring. And lest we forget the

stock market that just won't quit. And both the ideologues and the gloom stirrers is increasingly bringing the lessons of capitalism to millions of families that a generation or two ago would have regarded it as an opportunity only for the rich. In Wall Street while the big technology stocks continue to steal the spotlight powering the Nasdaq index to what is now 16 records in the past 20 sessions every major market index including those for smaller stocks is now comfortably ahead for the year. If there are any turkeys still gobble in most of them are finding refuge only in the bond market where news that might sound good to others such as solid economic growth and buoyant consumer spending in their stores thoughts only of inflation. And so while long term interest rates bounce to their highs for the month just below six and a quarter percent on the 30 year Treasury bond the Department of Energy stepped into the fray to try to calm bond market

fears about a twenty seven dollar a barrel oil price the highest since the Gulf War pointing out that fears that this would damage the U.S. economy had notably failed to come to Paris. Government economist said the price would have to reach about $65 a barrel before it would have an impact like that back in 1981 and respected private oil analysts agree that the current price of crude oil was simply not going to spur widespread inflation in the U.S. economy in which oil accounts for less than half what it did in those super inflationary days. While traders waited to see and to check out what really does happen when Y2K arrives most of the mood remained decidedly upbeat. So much so in the case of Nasdaq which is ahead more than 57 percent for the year. There practically no one would be surprised by at least some correction of this straight up move. For the moment though it was all sweet potatoes. We tonight will celebrate the holidays in two ways.

First in keeping with our traditional role as the program that covers everything to do with people in their money including set subsections as how to make it and how to spend it. We'll take our annual look at what's hot in the stores for this Christmas. And second we'll talk with Wall Street's top expert on how to make money in this area as well as spend it. But before any of that let's check out the feast in the financial markets. And as the Dow Jones Industrial Average indicates most of the stock market was in a tug of war this week between overwhelmingly favorable economic and corporate news and interest rate jitters emanating from the bond market. The result was a near standoff with the Dow closing down just 15 points a hair below 11000 and that signaled the mixed results in the broader indexes. With only the technology driven Nasdaq this week still absolutely sure that it wanted to go strongly up. Our elves are on chains and they're bullish plus

seven consensus for the third week running that the Dow will gain more than 5 percent in the next three months and for the six week run in the Halos go to those who voted neutral three months ago. Since the Dow is still within 1 percent of where it was then. The inflation scare couldn't do much for gold which continued to languish below $300 an ounce while the dollar was a story of two consonants fall into bed against the end in resurgent Japan. But so potent in Europe that it reached record strength against the continent's new currency the euro. And in case you think the Bears are on the run everywhere you know that the Environmental Protection Agency this week ordered that sales of a product called Bear Paws which was being promoted as a bear deterrent spray be halted because it might not be effective. So there's hope in this world for everyone tonight. Oh and you're a veteran booster of technology stocks is it time for

them to take a pause. I don't think so Lou I think that in fact overwhelmingly the most attractive stocks that we have come up with that I have invested in have been in the technology area. As well as the telecommunications area that we've seen a combination of those two areas. So you think there's no limit to how quickly these things can run. There is an upside limit but I think what has happened is that investors have realized that the potential for growth for some of these companies in some of these specific segments within technology possess. And it's a tremendous tremendous potential. Well since you've been right on the bay I'm on the hottest sector tell us which ones you especially like there these days. Well I like Sun Micro in the tech area in telecommunications I like Sprint PC Yes. I also like US Cellular and I like another one called telephone data systems TADS. Already burned out Murphy as the representative of the technician's court here tonight to please appraise for us the market's technical condition today. We're on a short term basis. I think that you know we could have a pause just as you pointed out.

When you look at the Nasdaq it's up over 100 percent since October 15th which is a pretty good run on a longer term basis. But we will recover from that. But on a longer term basis a hundred percent a year is a. No no if I'm October 15th when you do the measurement from that point it's up over 100 percent from that point OK. The but on a longer term basis I am concerned we're getting a little top heavy and that is a worry for me. And I think that we could have more of a reaction in the first quarter of next year just because of this concentration. If there is an event or if somebody yells fire and everyone tries to take profits at the same time it could be a bit of a problem for the market to move into other areas of the market decide to Delta. Well I think that there are a lot of areas of the market that have been neglected and I think that you know part of the energy with the $27 oil is probably a decent area. I think there are some medium sized companies that are attractive. I think I like a company

called Molex which makes connectors and connectors for fiber optics. I like some of the restaurants like our Ruby Tuesday or there's a little company called. Great fresh it's as simple as L.T. us a lettuce. And I think that those companies are worth looking at. No guarantees from the management as the number one man in Washington for everybody who invests. Let's let's start with Microsoft. Federal judge says why don't you guys talk among yourselves what's going to happen. I think there's a big incentive for Microsoft to settle the suit before the judge gets to the next stage of the trial which is a finding of law. And that's probably going to happen in February or March next year. But I think the Justice Department has the upper hand in that time period here so I'd be a little nervous about any settlement that comes out over the next over the next few months. There was news on the tobacco front this week won't you fill us in on that one as well. Or they're just you know there's just more. More progress on the on the litigation front. I think it's

something that that investors have just come to come to expect whether from the federal government or state government or the class action suits. And it's just a kind of a constant risk that investors in the tobacco sector I think have come to come to accept. It is going to so the fewer packs of tobacco and therefore give less money to the states and they thought they were doing it. No I don't think that's that's I don't think is much worse there than the price elasticity or the responsiveness of tobacco sales to price is not very great so I think that there's going to be a pretty steady demand to de-fund with the lawsuits of provide it. All right then if your holiday shopping list includes some big financial wishes remember that Santa is always happy to hear from you. Here it is North Pole South annex and jolly old Owings Mills Maryland 2 1 1 1 7. Now before we meet tonight's special guest let's get suitably dressed for our annual visit to the stores and then join Rudolph and a few of his friends as Uncle Lou goes Christmas shopping.

For some reason that I can't figure out it seems to be yet another big year for stock market themes and everything old is new again with this medicine universal stock ticker and authentic functioning replica of the one Thomas Edison came up with in 1870. These are only for those who had a very good year in the market because their ticker price is thirty five thousand dollars and only three hundred a year will be manufactured by the financial literacy center in Kalamazoo Michigan. The takers won't be commercially available till May but a gift certificate created especially for viewers of this program will announce that one's coming. It even sounds like a real thing. And with an Internet connection can deliver up to the minute prices and other interesting information. The worry warts panic we rake in profits. The wisdom of the ages. From one kind of green to another. If the object of your affections can't get enough of golf. The executive auto

putt from Red Envelope dot com for $65 collapses into a neat traveling case assembled to give you a chance to try even the trickiest of putts. Well we're waiting to see whether I hold out. Let's check some of the gifts geared to the new millennium. And if you're one of those purists who insist that the millennium won't change till 2001. You're in luck. You can get two years use out of them. That will be particularly useful if you spring for high end stuff like the Millennium accessories Stuart Weitzman created for Nordstrom. These crystal studded pumps go for 760 bucks and the handbag. If you have anything left to put in it will set you back eight hundred twenty. A lady looking that classy deserves an escort to match the millennium planners at Neiman Marcus can start him off with a $475. Christie's top hat. But since it's covered with politically incorrect rabbit fur

we decided to get a second opinion. More happily nostalgic for aging baby boomers. Maybe this John Hardy poem would walking stick with an amethyst encrusted sterling silver head that after a few glasses of millennium champagne may bring back the disco era for you. To help let champagne go down easier. Waterford has a new millennium collection of toasting flutes with individual themes of love happiness health peace and prosperity. Let's wish you them all starting with the last. And if your date doesn't show you can always cuddle with barely the $250 handmade millennium bug bear from Bev white of happy times collectibles. And if as the Y2K alarmists fear the lights go out and don't come back

on. You might want this twenty nine ninety nine flashlight clock radio from Grand Prix. If you feel threatened. Or just don't like the disc jockey. It also has an alarm. Set off alarms of another kind. Nordstrom offers this cinema a leopard print shimmies for $34. Funny how they knew my size. And if that makes you yearn for a cover up the road goes for 36 bucks. To help you get through the morning after this Winston pillow from tender loving things costs just $15 including peaceful sized acupressure points and the soothing scent of lavender. By then you may need something like that. Serenity is a big theme this Christmas with items like this is Zen tranquility found from Red Envelope

dot com for $135. It even has a frog to kiss. If you're really an optimist or you might want to test light up a candle garden from the Pomeroy collection for forty eight dollars. For those seeking other kinds of polished pebbles romantics say Jeffrey Roberts diamonds and white gold chains suspended from translucent Micra cord look as if they're just floating against the skin. The illusion costs seven hundred ten bucks. But the real must have item of the season in some affluent circles. Other $395 pashmina show all those from large to be. Finer than cashmere and straight from the Himalaya as they come in 11 appropriately soft colors. But Christmas is really for the kids isn't it.

Even if they do tend to one thoroughly annoying things like Furbies the big news is that a new generation has been born baby for babies who have their own set of catchphrases. Must be a Furby bears child. Speaking of ruins the sniffing around talking bear from Disney is more trusting than the human gloom stories. And so you do sweetheart. More sophisticated is playmates amazing an alley with a 59 99 is billed as the most technologically advanced doll ever. Her face moves with lifelike animatronics as she sings tells jokes and stories remembers things about you and offers interesting opinions. Try. Finding a. Friend. I always knew we were good for something. After all that sweetness some kids will be ready for typo's twenty nine ninety nine.

Rock n Roll Elmo. In a more traditional note Barbie is staging another of her periodic comebacks but tells millennium Princess version is a hot seller this season at forty dollars. And in keeping with the trend toward industrial miniaturization hallmarked has a $16 replica ornament. For the tree. Reading is back in the case of the Harry Potter books there's set for about $56 includes his newest bestseller The Prisoner of ask about. But the sensation of the season is Pokey mine. There is for example it's Wizards of the coast trading card game for twenty nine ninety nine. Or this $25. Pookie Dex from Tiger that organizes the extensive biographies of all of 151 pokémon characters including a

little peek at you. More traditional boy oriented toys include this $60 radio control super rebound from Mattel which has some new stunts in its repertoire and to help market the new movie Toy Story 2. Mattel is also introducing at 35 bucks flight control Buzz Lightyear who lets us know he's set to fly. And finally Nintendo's Donkey Kong 64 which debuted this past Monday at $70 with two and a half million units expected to be sold by the end of the year revives Donkey Kong himself and heads tiny dynamic helicopter eared cutey pie who gives fierce new meaning to the term. Girl power. How much of this loot will put loot in investors pockets. In the spirit of paydays future let's go over now and meet tonight's special

guest Daniel Barry. Then how are you. Nice to have you here. Joe you look good to see you. Happy Thanksgiving. Thank you. For Daniel Barry the motto is shop till you analyze. Then it was now the number one rated analyst of the retailing industry has been watching the stores for Wall Street for more than 30 years he's been ringing up his sales at Merrill Lynch since 1992. Then how good a Christmas is 1999 shaping up to be for the nation's retailers. There's been a very good Christmas. Last year was actually the best Christmas in five years. I think this Christmas could be as good. Months ago I thought it was actually going to be a little better but we've had a heatwave around the country and when retailers report their November sales next Thursday going to be a little disappointing but I think that's temporary and December will be very good because weather won't hurt December sales as much as Doesn't member sales. At current prices which of the

stocks are most appealing to you. Well the stock I like the most you can call it a Christmas stock but it's actually my favorite stock is Dollar General Dollar General is actually part of a new trend in retailing called the dollar stores sort of like a 7-Eleven a 7-Eleven sells convenience products food at this convenience location dollar stores sell consumables and convenience locations consumables and things like paper products and chemical supplies. And there's a number of companies in this area like Dollar General family dollar 99 Cents Only Stores Dollar Tree. And as a group I think they're all very attractive it's a new trend in retailing Dollar General is the biggest and the dominant company in that in the industry. How seriously is this industry going to be hurt by the Internet. While I actually believe that in the long run the bricks and mortar retailers as we call them will actually win on the Internet and in the short run they might be hurt because right now the only players on the internet for the most part are pure Internet companies but in the long run when when profits are

required I think the bricks and mortar retailers are when we're in the first stage of the business now where people want to see sales growth. And the Internet companies are spending a lot of money much of marketing money to get their sales growth. But when we do profits it's going to be much easier for bricks and mortar retailer to make a profit in the Internet that if you play companies that do some shopping with our panelist and with album and one of the most important thing seems to be the distinction between the Internet and the and the bricks and mortar like you talking about it seems to be customer service. Do you think the Internet companies have learned the customer service game to the extent that they won't drive people right back to the bricks and mortar. And what are some of the most attractive areas. I think the Internet certainly is learning service with the the the sending emails to you and telling you they're certainly learning now to have ads and sales the way bricks and mortar companies too. So I think the bricks and mortar companies are really doing a very good job in service and I think that's going to increase but again the bricks and mortar retailers haven't really come into the Internet world yet they're just stepping the toe in and I think

when the bricks and mortar retailers get a good site up and compete with the pure e-tailing companies I think you want to be there for a fight I think the virtual retailers who win partly because they do no service better than a pure play into the company's. DNA. You cover bookstores as well and you have an accumulate on Barnes Barnes and Noble but are neutral on borders. Why does Barnes and Noble doing better than borders. Well part of the reason is that both of these companies are you might call the big box retailers that offer a environment where you can shop and browse in the store. And of course they are under threat from the Internet companies that are selling books on the Internet. The the the trend that I see is very similar I think to what happened decades ago with the movie industry. When television came in and people thought movie theaters or go out of business because people wouldn't want to go out to go to the movies that turn to be false in fact but we theaters are still booming. So people like to go out to the movies and they like to go shop at home. I mean watch a movie at home. So I think that also you going to want to go out

and browse for a book and you want to buy a book on the Internet. So I think the the big box retailers are going to find a reason I prefer Barnes and Noble over borders is they have an Internet site that's much bigger and growing much faster than border site. Dan you mentioned that last Christmas was the best in five years but that was that came after the Fed cut interest rates 75 basis points that they've raised in that amount now. What's the impact going to be on this Christmas season and in the next several months ahead. Well interest rates do have an impact on sales usually with about a three to six month lag. And as you said last fall fall of nineteen ninety eight when the Fed cut rates three times have resulted in a surge in sales. And that's one reason we had a good Christmas and we've had an outstanding sales gain in the first half of this year. Now I think sales are going to slow because we had three rate increases. It's slowing slightly now. We're still going have a good Christmas but I think you'll see the effect even more noticeably in the first half of next year when we'll have not only a slowdown in sales and a trend basis but very poor numbers against the very big numbers last year.

Dan we only have less than a minute left we do avoid many of the traditional retailers. Well the group that I'm avoiding are what I call the value stocks but they're pretty much the department stores there. They're mature companies. And with sales slowing people tend to have to flee from these thoughts because they're concerned about how they do in a slowdown. But there are three stocks that I like Federated sacks. And. Nordstrom which I think will do well when sales turn up again. Thank you very much very for helping the shop among the retail stocks as we shopped among some of the products we'll be displaying. Thanks to our panelists and I hope you'll be back again next week. I won't be with the Nasdaq at still another all time high I figured I could safely take just one night off but I hope you'll join my friend and colleague Mahdi's wide will be sitting in for me here and talking with Bob Christian who runs 25 billion dollars at Wilmington Trust. Meanwhile with a formal Fleet Week number for the concert tonight Wall Street Week With Louis Rukeyser was produced in association with Kaiser

television incorporated by American Public Television made possible by Deloitte and Touche. You know our clients by name. We know them by heart. For professional services. The answer is the people of Deloitte and Touche. By the financial consultants of A.G. Edwards. Committed to making investors comfortable with their investments. With their futures. A.G. Edwards be comfortable by Oppenheimer Funds. Every year millions of Americans place their financial futures in the hands of one mutual fund company. Oppenheimer Funds the right way to invest. Why get government funding. Of a small company aggressive growth fund. Stand by contributions to your PBS station from viewers like you. Thank you.

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