Money & Sports
>> here to give us “money & sports” is alan.
>> nbc has rights to the game through 2012. they spent $2 billion to get the rights a couple of years ago. they found out this week that london will host the 2012 games. g.e. is such a major player in the olympics. they respond sort games and broadcast the games. their interests are beyond who wins or loses. they’ll have a greater interest in the redevelopment of london’s east end. they’ll have a great interest in beijing 2008 selling refrigerators and turbine engines and everything that g.e. has marketed .
>> it’s not just a boost to the nbc bottom line and what it gets from ad revenue but promoting another product? have other companies seen that it translates and pays off?
>> absolutely. especially for g.e. they can put it on light bulbs, have it on refrigerators. they can put the rings almost anywhere as the lead sponsor. bottom line, the president and chairman of nbc sports says we don’t make any decisions on sports issues unless it reflects g.e.’s bottom line.
>> some decisions made on sports being eliminated and sports being added or not added. roller blading not making it in. some surprises. were they surprises in terms of what was cut?
>> baseball and softball were cut. it made an entry in the 1980’s. it never really caught on. they won the gold medal a couple of times, the u.s. did. as an olympic sport it didn’t catch on. they decided to cut those two bringing the total to 26 for 2012.
>> let’s talk about o hockey for a few moments. l.a. times said there was an agreement reached between the two sides but that seems not to be the case. how far along are the negotiations?
>> eupgmentally slow. they’re getting there. the draft is apparently being done. the deal is very close. any one thing from either side could tip it one way or the other. the document i have heard is close to 600 pages long. there’s a lot of dotted i’s and crossed t’s.
>> are the efforts starting to win back fans? how much of a challenge will that be?
>> it will be a challenge for sponsors, advertisers. how do you sell something that hasn’t been around for a year? sponsors an advertisers are waiting to find out what it will be,’ schedule will be complete. the nhl has a national deal with nbc. they don’t have a cable deal. espn dropped their option a few weeks ago. there’s a gaping hole in what the nhl has nationally tv-wise. that will be filled if there’s enough time after a deal is established.
>> we can’t head into the weekend without talking about michelle. tell us what is happening here. are sponsors paying attention?
>> she’s only 15 years old. 16 in october. no woman has made the cut on a men’s tour event since 1945. michelle wie has a chance to do that at the john deere classic in illinois. in the running in day two. could be the next tiger woods. if she gets some acclaim on the men’s tour. she’s only 15 so she has a lot more time to develop her talent. could be the next sensation in golf, in sports.
>> does that translate to tv viewership? is she the next it that people have to watch?
>> sure. a player like michael jordan or tiger woods. they bring that fame to the tv set. they’ll have someone stop what they’re doing to watch them play. tiger woods is one of the few athletes to do that. michelle has the goods to do that next.
>> we love talking “money & sports.” see you back next week. thanks so much. we are going to take a quick break. when we come back, president bush has returned from the g-8 summit in scotland. he is at andrews air force base. we’ll wait to see if he has anything to say. in the meantime, latest world and national headlines. also the “world’s biggest movers segment. it’s tied to oil. keep it here.
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Interview: Chief Investment Officer at Stone Bridge Investment Partners
>> today’s jobs report gave a boost toke ‘tis. joining us from philadelphia is the chief investment officer at stone bridge investment partners. he helps oversee $600 million in assets. joe, i want to start as i did with susan philips a few moments ago and talking about the fed. curious in terms of reaction to today’s jobs report. are you surprised and were you thinking that stocks would end the day higher?
>> i was surprised because we’re in the range where things are not too strong or too weak. that gives the ability to look ahead to a point where the fed may stop raising rates. i think that’s positive for equity investors overall. we’re within that range of not too strong and not too weak.
>> the s&p erasing its decline for the year. where does it go from here?
>> i think the trend will be higher with some volatility. i think we’ll have pretty good earnings. as i said, the fed will probably stop raising rates in the not too distant future. that creates a positive environment overall for equities.
>> as we get into that earnings season, the thick of earnings season, tell us more about your thoughts here. 6.6 is the average estimate for gains in the s&p profit. what are you looking for?
>> i would say along with that maybe a little higher. i don’t expect dramatic gains. i’m not looking for double digit gains. i think nice solid gains.
>> any particular groups you are looking for to come out stronger than forecasted results?
>> i believe information technology should begin to do relatively well as we have capital spending picking up. corporate profits have been doing well for a couple of years. we have seen nice improvements. that should flow through in terms of increase in capital spending on information technology. we could see pretty good earnings reports in that area.
>> any particular pockets within the computer-related arena that you look for strength?
>> i think we’ll probably see relatively broad-based improvement. i think that we’ll see improvement, as i said, in terms of capital spending but also probably in terms of the consumer side as well. i think it should be fairly broad.
>> what do you think the catalyst will be for the gains in the stock market that you are anticipate stphg
>> i think a combination of continued improvement in corporate profit as we stalked about. plus interest rates probably peaking in terms of the fed funds rate. i think long rates are down at a fairly low level. competition from the fixed income side will not be too significant. so i think as corporate profits come through we’ll see equity prices advance along with the corporate profit gains.
>> what about areas that you are avoiding or think investors should avoid during earnings season?
>> we have been paring back somewhat in the consumer area. the consumer has really driven the economies for the past couple of years. i think it’s time to pass the baton to the information technology or the capital spending side.
>> it’s interesting. we just had retail sales numbers come out yesterday. stronger than people anticipated do you think that’s the tail end?
>> i think that we still see a strong consumer overall but the consumer has been spending a fairly high level. savings rates have been fairly low. i don’t think there’s a lot left that the consumer can do in terms of increases going forward.
>> in terms of what you have been doing, what changes have you been making recently?
>> we have been paring back somewhat in the consumer area and focusing more on things like information technology.
>> let’s tie it into the fed. we have that jobs data today. you have alan greenspan speaking july 20. a lot of anticipation that the fed will continue to raise rates. how are you setting up? do you think the fed will continue and how much?
>> i think the fed will probably go for another one or two quarter point increase notice fed funds rate and then probably pause. i think the slowness we saw in terms of jobs numbers gives the fed the ability to pause wpbt next few months. i think that they’ll probably take a look at additional economic data and decide another one or two increases are enough for the time being.
>> given that, joe, what will happen to the financial stocks in that environment?
>> i think that financial stocks will be somewhat niped this this environment. we have a yield curve that is relatively flat. that makes it tougher for banks to do well in this environment. not as easy as before where they could lend out at higher rates. i think it will be a tougher environment. overall it should be easy for them.
>> what allocation are you recommending currently to investors in terms of stocks, cash, bonds?
>> i would lean towards the equity side at the present time. as i said, i think the fixed income side is not presenting a strong current at present time with interest rates at relatively low levels. i think it is time to look more towards the equity side.
>> joe, thank you for joining us.
>> you’re welcome.
>> joe stocke of stone ridge investment partners. a quick[. when we come back, the 2012 olympics opens up a number of opportunities for one u.s. company. in this week’s addition of “money & sports,” we’ll bring you the details.
