Nightly Business Report (NBR) - 2006-07-21

Channel: malgent

Transcript

Language: English (original, YouTube automatic captions)

[0:04] Things aren't going so well at Dell. The

[0:07] [music] personal computer maker issues a

[0:08] warning on its second quarter earnings

[0:10] and that shortcircuits the stock.

[0:13] Investors dump [music] the shares and

[0:14] they close at their lowest level in

[0:16] years.

[0:17] >> Oil services giant Hallebertton dumps

[0:19] plans [music] to spin off part of its

[0:21] business with an initial public

[0:22] offering, deciding instead to take

[0:24] another TAC. [music] That decision

[0:26] disappoints investors. and sends

[0:28] Hallebert and shares sharply lower as

[0:30] the most actively traded stock on the

[0:32] big board.

[0:33] >> Microsoft [music] finally takes the

[0:34] wraps off what was one of the worstkept

[0:36] secrets in years. We'll tell you what

[0:38] the company is now [music] telling the

[0:39] public about its newest product.

[0:41] >> And tonight's market monitor guest says

[0:43] forget about stocks, there are [music]

[0:45] better places to invest your money. We

[0:47] talk with Renee Hgurude, chief

[0:49] investment officer of the Gulier In

[0:51] International Fund.

[0:53] >> I'm Susie [music] Gar

[0:54] >> and I'm Jeff Yastine. Paul Kangas is off

[0:56] tonight. This is Nightly Business Report

[0:58] for Friday, [music] July 21st.

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[2:03] [music]

[2:06] Good evening everyone. Technology stocks

[2:08] took it on the chin today, felled by

[2:10] unexpected news from Dell. The personal

[2:13] computer maker fell $2.19 to $19.91

[2:17] or down about 10% after warning second

[2:20] quarter earnings would come in about 30%

[2:22] lower than forecast. Dell says that's

[2:25] because the market is softening across

[2:26] the board and across the world for

[2:28] computers. So instead of earnings of 32

[2:31] cents a share, which is what Wall Street

[2:33] was expecting, Dow Dell now says its

[2:36] numbers will hit in a 21 cent to 23 cent

[2:38] a share range.

[2:41] And joining me now to talk more about

[2:42] Dell's problems is Richard Stice,

[2:45] computer hardware equity analyst at

[2:47] Standard Impors. And Richard, welcome to

[2:49] Nightly Business Report.

[2:50] >> Thanks for having me on, Jeff.

[2:52] >> You know, what is wrong with uh Dell

[2:54] with this particular announcement? They

[2:56] used to be that they took all of their

[2:57] competitors lunch money and now it seems

[2:59] like they they can't get out of their

[3:01] own way.

[3:02] >> Yeah, they've really struggled over the

[3:04] last uh about the last year or so. And I

[3:06] I think a lot of it has to do with less

[3:09] the the overall environment and the fact

[3:11] that their competitors are getting

[3:12] better. If you look at what HP's done

[3:14] over the last year, uh their stock price

[3:16] has done very well and they've closed

[3:18] the gap in terms of market share for PC

[3:20] sales and then of course Apple which has

[3:22] been very very strong and because in

[3:24] part of their halo effect, they've been

[3:26] seeing some uh excellent demand for

[3:28] their Mac products. So, uh, you don't

[3:30] think that this is a a broader problem

[3:32] perhaps for the US economy or the global

[3:34] economy, a slowdown? You know, some

[3:36] people have been talking about that

[3:37] about Dell as a sort of proxy for the

[3:40] technology economy.

[3:42] Yeah, I would say I I'm I'm less uh

[3:44] persuaded by that and more that this is

[3:47] really kind of a company specific issue.

[3:48] And if even if you go beyond the PC

[3:50] market, you saw uh excellent numbers out

[3:52] of Google, good numbers out of

[3:53] Microsoft, uh IBM's numbers were pretty

[3:56] solid as well. uh Motorola's numbers

[3:59] were good and then you saw weakness with

[4:00] some of the chip makers with Intel and

[4:01] AMD. So I think it's more instead of

[4:04] kind of a broad-based reflection on the

[4:07] on the US economy and on the tech sector

[4:09] as a whole that it's still largely

[4:11] company specific. I think at this point

[4:13] in terms of what we're recommending uh

[4:15] as far as uh growth rates for the year

[4:16] in the PC market, we're at a rate of

[4:18] about 9% which is about in line with

[4:21] with the long-term rate. It is down from

[4:23] last year uh but the rate this year I

[4:26] think is still pretty respectable. So,

[4:27] what do you do if you're uh Kevin

[4:29] Rollins and you know, we you go on the

[4:32] internet, you read things about problems

[4:33] with customer service and also uh some

[4:36] situations with their laptops where uh

[4:38] some of those were were catching fire, a

[4:40] very small amount, but still they were

[4:41] having some issues with those. What do

[4:43] you do?

[4:44] >> Yeah, I mean, I think you really need to

[4:46] head that off as quickly as possible

[4:48] because that to me was one of uh Dell's

[4:50] differentiating factors was the fact

[4:52] that their customer service was so

[4:53] strong. uh they've come out with some

[4:55] recent policies about getting rid of

[4:56] their rebate program in part to sort of

[4:58] simplify the process for customers, but

[5:01] they need to really I think do a better

[5:02] job of focusing on that area and sort of

[5:05] getting back to the kind of the

[5:06] allegiance that they had developed prior

[5:08] to some of these more recent problems.

[5:10] And if they don't, they're going to

[5:11] continue to seed share to some of the

[5:13] other players in the market.

[5:14] >> And briefly, do you think Kevin Rollins

[5:16] position as CEO could be in jeopardy

[5:18] with uh today's announcement? I think if

[5:21] they if they have a couple more quarters

[5:23] uh similar to the one that they're

[5:24] they're they mentioned today that uh

[5:27] that that could be a definite

[5:28] possibility if you think back to Apple

[5:30] situation where Steve Jobs left, they

[5:32] struggled, he came back and now you you

[5:34] see what they're doing. Uh I think you

[5:35] could see Michael Dell step back in and

[5:37] take a more active role in the company

[5:38] again.

[5:39] >> All right, Richard. Thanks for your time

[5:40] on the program.

[5:41] >> Thanks, Jeff. Appreciate it.

[5:42] >> Our guest Richard Sty, computer hardware

[5:44] equity analyst at Standard Impores. On

[5:47] Capitol Hill tonight, work is underway

[5:49] to find a compromise on a pension bill,

[5:51] and it could be ready as soon as Monday.

[5:53] The agreement would help head off

[5:55] underfunding of the nation's traditional

[5:56] defined benefit pension system, but it

[5:59] might also impose new costs that could

[6:01] force employers to freeze or drop their

[6:03] plans. Washington Bureau Chief Darren

[6:05] Gersh reports.

[6:08] >> One of the few unanswered questions

[6:10] about the pension bill is just how much

[6:12] relief airlines will get. Senators are

[6:15] offering the troubled industry 20 years

[6:17] more than other industries will get to

[6:19] fully fund their pension promises.

[6:21] Analysts say lawmakers from the House

[6:23] also want to help, but not that much.

[6:25] >> No doubt about it. The airlines are

[6:27] going going to get special treatment

[6:28] under this legislation. Uh both plan

[6:30] both airlines that have frozen their

[6:31] pensions and there's even uh options for

[6:33] plans that have not frozen their

[6:35] pensions. Lawmakers have agreed that

[6:36] beginning in 2008, most companies other

[6:39] than airlines would have seven years to

[6:42] fund 100% of their pension promises.

[6:45] Plans that are poorly funded would be

[6:46] allowed to gradually increase their

[6:48] contributions. Now, they are required to

[6:51] come up with more money upfront. Pension

[6:53] funding levels would be calculated over

[6:55] a shorter time period using a corporate

[6:58] bond rate. Businesses worry that will

[7:00] hurt their bottom line. When you shorten

[7:03] the amount of time that you look at

[7:05] interest rates, you increase the chances

[7:07] that the interest rate will go up and

[7:09] down dramatically, and that will make it

[7:12] harder for them to predict how much they

[7:14] owe to their plans.

[7:16] >> But with the federal pension benefit

[7:17] guarantee corporation running a $23

[7:20] billion deficit, Congress wants to catch

[7:23] companies before they get into serious

[7:24] trouble funding their plans. Lawmakers

[7:27] also want to make it harder for

[7:28] companies to use bankruptcy court to

[7:31] stick the government with their pension

[7:33] obligations.

[7:34] >> There is a provision in this new pension

[7:36] law that allows the government insurance

[7:38] company to say, "I'll lower your

[7:41] contributions in order so that you can

[7:44] keep your pension plan." We want to keep

[7:45] you, the company, responsible for the

[7:47] pension plan. And by the way, not only

[7:49] are we going to lower your contribution,

[7:52] we're also going to freeze benefits. The

[7:53] pension bill will also affect workers

[7:55] with 401ks and IAS, making it easier for

[7:58] mutual funds to offer investment advice.

[8:01] Darren Gersh, Nightly Business Report,

[8:03] Washington.

[8:04] >> Dell's profit warning put investors in a

[8:06] selling mood across the board this

[8:08] morning with the Dow dropping about 75

[8:10] points in the first hour of trading.

[8:12] Overwhelming positive earnings reports

[8:14] from Caterpillar this morning and

[8:16] Microsoft last night. At midday, the

[8:18] Nasdaq was off 11. And with the

[8:20] situation in the Middle East remaining

[8:22] tense, buyers were few and far between.

[8:24] So the Dow closing down 59 and 3/4

[8:27] points at 10,868.38

[8:30] today. And this week, the index rose in

[8:32] three out of five sessions for an

[8:34] overall gain of 129.03

[8:37] points. The Nasdaq Composite falling

[8:39] just over 19 points to 2020.39 today.

[8:43] And like the Dow, the Nasdaq also rose

[8:45] in three sessions this week, but it fell

[8:47] uh nearly 17 points overall. And the S&P

[8:49] 500 ended off nearly nine points to

[8:51] 1240.29.

[8:53] And in the bond market, the 10ear note

[8:55] falling 432 to 120 uh 20 30 seconds with

[8:59] a yield at 5.05%.

[9:05] [music]

[9:12] >> [music]

[9:18] >> Two key inflation reports got a lot of

[9:20] attention on Wall Street this week and

[9:22] raised concerns about the impact of

[9:24] higher prices on the US economy. That's

[9:26] led some people to worry about the

[9:28] possibility of a troubling economic

[9:30] scenario called stagflation. Suzanne

[9:33] Pratt explains. For several weeks now,

[9:36] many on Wall Street have been talking

[9:38] about the nasty sword. S as in

[9:41] stagflation. Stagflation is the ugly

[9:44] combination of high inflation and high

[9:46] unemployment. Those are conditions that

[9:49] recall images from the 1970s of gasoline

[9:52] lines and urban blight. The last time

[9:54] the US experienced stagflation was in

[9:57] the early 1980s, a time when the nation

[10:00] also experienced the worst recession

[10:02] since the Great Depression. When we have

[10:05] stagflation,

[10:07] the US economy is much more vulnerable

[10:10] to very res uh severe uh recessions

[10:15] because without a severe recession, the

[10:18] Federal Reserve is incapable of lowering

[10:22] inflation to a level that no longer

[10:25] distorts economic activity.

[10:28] >> To be sure, no one is suggesting that

[10:30] we're currently experiencing

[10:31] stagflation. After all, the nation's

[10:34] unemployment rate has been steady below

[10:37] 5% and GDP growth has been robust.

[10:41] Still, Wall Street is worried about the

[10:43] future, especially as inflation creeps

[10:45] higher every month. And the housing

[10:47] market continues to slow. Some

[10:50] economists are raising red flags about

[10:52] the potential for stagflation, albeit a

[10:55] mild version.

[10:56] >> I think that we might see a mini

[10:58] stagflation where the unemployment rate

[11:00] goes from 4.6 six to to maybe 5.1

[11:04] and inflation somehow levels off

[11:08] somewhere around 3%.

[11:10] Which would be above the Fed's target.

[11:12] But I don't think that either of those

[11:14] conditions would persist for very long.

[11:16] >> Others, however, are not at all

[11:18] concerned about the possibility of

[11:20] stagflation. While it's true that core

[11:22] inflation has been rising, the rate of

[11:25] unemployment has not. In addition, they

[11:28] point out that the economic environment

[11:30] has changed significantly in the last

[11:32] few decades. In particular, they say the

[11:35] US economy today is far less rigid than

[11:38] it was in the 70s and early 80s.

[11:41] >> They've been doing a lot of things in

[11:42] the last 30 years. We've been

[11:43] deregulating airlines, trucking,

[11:46] railroads, energy, banking, and all of

[11:49] that. All of that transformation of the

[11:52] US economy has made it much more

[11:53] flexible. At the same time, the world

[11:56] around us is opening up. Countries all

[11:58] around us are wanting to go to work.

[12:00] It's a very global economy.

[12:01] >> A global economy makes for heightened

[12:03] competition. As a result, it's far more

[12:06] difficult for companies to pass on

[12:08] higher costs to the price of final

[12:10] goods. That's one more reason economists

[12:12] say stagflation is unlikely to get a

[12:15] strong footing in today's economy.

[12:17] Suzanne Pratt, Nightly Business Report,

[12:19] New York.

[12:21] [music]

[12:26] >> [music]

[12:31] [music]

[12:37] [music]

[12:46] >> Delta Airlines subsidiary Comm Air got a

[12:49] green light today to toss out the

[12:51] contract with its flight attendants. A

[12:53] bankruptcy judge says Comair can now

[12:55] impose wage and benefit concessions on

[12:57] its 970 flight attendants. Concessions

[13:00] Comair says it needs to emerge from

[13:02] bankruptcy. The carrier already has new

[13:04] contracts with its pilots and mechanics

[13:06] unions, but those deals are contingents

[13:08] on the flight attendance union accepting

[13:10] cuts as well. Before today's ruling,

[13:12] that union, the Teamsters, had

[13:14] threatened a strike if the contract was

[13:16] voided. Jeff, today a spokesman said it

[13:18] was disappointed with the decision. Oh,

[13:20] you recall Delta and Kamir both filed

[13:22] for Chapter 11 last year, Susie. And

[13:24] now, let's take a look at our stocks in

[13:25] the news tonight.

[13:31] And topping our list, Hallebertton down

[13:33] $2.64, nearly $3. The company missed

[13:36] estimates by a penny because of its

[13:39] Kellogg Brown and Routt division, which

[13:41] received less contract work for the US

[13:43] military in Iraq. Plans are also

[13:45] underway to spin off uh the company to

[13:48] Hallebertton shareholders as a dividend

[13:51] and not as an IPO as initially planned.

[13:53] Fizer picking up 12 cents on its upbeat

[13:56] outlook. And there's Advanced Micro

[13:57] dropping a little over $3. Analysts

[14:00] sounding the alarm as the price war with

[14:02] Intel and Intel's new product lineup

[14:04] could spell trouble for AMD in the

[14:06] months ahead. General Electric dropping

[14:08] 27 cents and Lucent Technologies dipping

[14:11] a nickel. Exon Mobile falling 32 cents

[14:14] and then EMC dropping 13 cents. Ford

[14:16] Motor rising 9 cents. Several analysts

[14:18] cut their ratings on the stock, but the

[14:21] shares rose anyway despite yesterday's

[14:23] surprise quarterly loss. And Hullet

[14:25] Packer dropping a $1.28 in reaction to

[14:28] Dell's gloomy forecast. Bank of America

[14:30] rising 49 cents. The stock is up about

[14:33] 4% this week. On Wednesday, it recorded

[14:35] a record 5.5 billion dollars in profits.

[14:39] Caterpillar falling 73 cents. The heavy

[14:42] equipment maker logging a profit of a

[14:44] $152 a share in the second quarter. It

[14:46] was a dime above estimates. The company

[14:48] raised guidance for continued growth

[14:50] abroad, but the stock fell anyway.

[14:53] Capital 1 financial plunging over $8.

[14:55] Second quarter earnings fell 12%. More

[14:57] US customers are paying their credit

[14:59] bills on time, so Capital 1 reaped fewer

[15:01] late fees. Also, the company expected to

[15:04] write down losses from credit

[15:05] insolvenies in the UK. And that news did

[15:08] not bode well for Capital 1's pending

[15:10] merger with North Fork Bankorp. That

[15:12] stock tumbled nearly $2 despite posting

[15:15] stronger than expected profits. Arch

[15:17] Coal losing $2, about two and a quarter.

[15:19] Profits were way above last year's

[15:21] levels, but the worry these days is on

[15:23] weakening prices in the coal market.

[15:25] Peabody Energy suffered a similar result

[15:27] yesterday. And on the upside, Johnson

[15:30] Controls uh setting a high thanks to

[15:32] upbey comments from several analysts who

[15:34] consider the stock attractive at these

[15:36] levels. They think the company's

[15:38] restructuring efforts will work out. Now

[15:40] on to the NASDAQ where Google rose about

[15:43] $3. The stock managing to buck the

[15:45] downward trend in tech stocks on the

[15:47] back of its better thanex expected

[15:48] earnings report last night. Several

[15:50] analysts have now set a price target for

[15:52] the stock of about $500 a share.

[15:55] Microsoft gaining a dollar and change.

[15:56] The software giant made it official. It

[15:58] will come out with a competitor to

[16:00] Apple's iPod music device. The Zoom

[16:03] device will hit storeshelves later this

[16:05] year. And then there's the reaction in

[16:07] Dell stock falling $2.19. Dell's latest

[16:10] profit warning tanking the stock. The

[16:12] last time it traded this low was in

[16:14] October 2001. Apple computer advancing

[16:17] 22 cents. Apple CFO dropping hints

[16:19] recently that the company may be working

[16:22] on an iPod-based cell phone. And then

[16:24] Intel edging up a fraction. It will

[16:26] debut new chips in the next two weeks.

[16:28] Analysts say it could give Intel some

[16:30] pricing power and help boost revenues.

[16:32] Amjun jumping $223. Investors liking the

[16:36] biotech numbers for the quarter $15 a

[16:38] share with the earnings that topped

[16:40] estimates by 11. And then on to Broadcom

[16:43] falling $3.24. This chipmaker getting

[16:46] shellacked after it warned that third

[16:48] quarter sales would be lower than

[16:49] estimates. Cisco systems dropping 422.

[16:52] Yahoo picking up 62 cents and Qualcomm

[16:55] losing $141. PMC Sierra sliding $184. It

[16:59] issued a revenue warning for the third

[17:00] quarter and a new three-year low for the

[17:02] stock. Petroleum Development surging

[17:04] nearly six. The energy firm selling part

[17:06] of an oil lease to Marathon Oil for $354

[17:09] million. And then Laurate Education

[17:11] soaring almost $8. Earnings were sharply

[17:13] above estimates and it raised its

[17:15] fullear earnings guidance. Said

[17:16] enrollments for both its bricks and

[17:18] mortar and online sections look great.

[17:20] Double digit increments and it's

[17:22] confident of 25% annual earnings growth

[17:25] over the next 5 years. Those are stocks

[17:28] in the news tonight. Susan

[17:29] >> Jeff, they're staying put for the time

[17:31] being in Texas. That was a decision

[17:33] today by a federal magistrate in Houston

[17:35] for three British bankers charged with

[17:38] wire fraud related to the collapse of

[17:39] Enron. The three men had asked the court

[17:41] for permission to return home to England

[17:43] while awaiting their trial which is

[17:45] expected to begin in midepptember. The

[17:47] three former executives at Greenwich Nat

[17:49] West are accused of colluding with

[17:51] Enron's former chief financial officer

[17:53] Andy Fastile in a secret financial scam.

[17:56] All three say they are innocent of the

[17:58] charges.

[18:00] Monday, the [music] challenge of

[18:02] producing a soft landing for the

[18:04] economy.

[18:07] [music]

[18:21] [music]

[18:41] >> [music]

[18:54] >> Heat.

[18:57] >> [music]

[19:05] [music]

[19:12] [music]

[19:22] >> Heat. Heat. [music] Here's

[19:27] [music]

[19:37] [music]

[19:45] a look at what's happening next week.

[19:46] Our Friday Market Monitor guest is James

[19:48] Grant, editor of Grant's Interest Rate

[19:50] Observer. On the economic calendar,

[19:53] Tuesday, June existing home sales and

[19:54] July consumer confidence come out.

[19:56] Thursday, durable goods orders and new

[19:58] home sales for June. Friday, second

[20:01] quarter GDP, and the University of

[20:02] Michigan's final consumer sentiment

[20:04] reading for July. Also next week,

[20:07] earnings from 3M, Altria Group, American

[20:09] Express, Boeing, Exxon Mobile, DuPont,

[20:12] McDonald's, and Merc. Our market monitor

[20:16] guest tonight is bearish on US stocks

[20:18] and says the place to make money is

[20:20] commodities. Joining us now, Renee

[20:22] Hgurude, founder and chief investment

[20:24] officer of the Gulter International

[20:26] Fund. The fund is up 7 and a half% so

[20:29] far this year. Renee, welcome to Nightly

[20:31] Business Report and your first

[20:32] appearance as a market monitor. Thank

[20:34] you, Susie. I'm happy to be here. Let's

[20:37] begin by you explaining why you're

[20:39] bearish on stocks and bullish on

[20:40] commodities.

[20:42] Well, um, a little bit different than

[20:44] the, uh, previous report. I think we're

[20:46] in a new paradigm, a new economic

[20:48] paradigm, and I don't think we're

[20:49] entering stagflation. We're entering an

[20:52] economic, uh, situation of inverse

[20:55] stagflation, the opposite of

[20:56] stagflation. And basically, as the

[20:59] previous report said, um, that the last

[21:01] time we experienced stagflation was in

[21:04] the early 80s. That was when we had a

[21:06] stagnant economy, high unemployment, and

[21:10] inflation. But what kind of inflation

[21:12] did we have? We had financial inflation.

[21:15] Interest rates were high and equities

[21:17] were bottoming and starting to go up in

[21:19] uh 8182. By 83 they were on the ascent

[21:22] but commodities were actually going

[21:24] down. Commod we experienced commodity

[21:27] deflation in land commodities low-end

[21:31] labor conccommittantly with the

[21:34] inflation of financial assets. Fast

[21:36] forward 25 years today and basically I

[21:40] believe we're in a situation the

[21:41] opposite. We don't have a stagnant

[21:43] economy. We have I believe we'll slow

[21:45] down a bit but it will be relative

[21:47] growth as opposed to stagnant. And yes

[21:49] we will have inflation but what kind of

[21:52] inflation commodity inflation and not

[21:55] financial inflation. In fact the silos

[21:58] are empty of commodities and full of

[22:01] money. So money is like grain of the 80s

[22:04] at a price it can be

[22:05] >> that's an interesting way of uh putting

[22:07] it and that's why you think that uh

[22:09] investors should have a larger u amount

[22:12] of commodity investments in their

[22:14] portfolios rather than just US equities

[22:16] right

[22:17] >> absolutely I think the recipe of saying

[22:20] whether you're 80% 50% stocks and you

[22:23] hear a few people saying put 5%

[22:25] commodities well commodities are the

[22:26] thing that are going up I think you

[22:28] should be up to 50% in commodities

[22:30] commodities are They're like equities of

[22:32] 1993. They're going to get overvalued

[22:34] and stay overvalued because they're in

[22:36] short supply and they're undervalued.

[22:38] >> Well, let's go over some of the

[22:39] commodities that you find attractive.

[22:41] And at the top of your list, uh you put

[22:43] corn. Tell us why you like corn.

[22:46] >> Um there's various reasons that I like

[22:48] corn. Um you know, one, it's not only a

[22:51] a food, it's now becoming a fuel with

[22:53] ethanol and it's a feed for livestock as

[22:56] well. In addition, um, basically we are

[23:00] at below on inflationadjusted rates,

[23:04] corn is very, very low. We're at about

[23:06] 240 a bushel. And I calculate that with

[23:09] increased fertilizer costs, with

[23:11] increased land costs, with increased

[23:13] energy costs, the cost of production now

[23:15] is up around 240 to 250 a bushel, where

[23:17] the last 15 years we have been down

[23:20] around 180 to 220 a bushel.

[23:22] >> All right, Renee, let's move along

[23:23] because I'd like to get some of your

[23:24] other uh choices in there. I know you

[23:26] like soybean oil. Uh what's attractive

[23:28] there?

[23:29] >> Again, soybean oil is another fuel. We

[23:31] basically believe that there is going to

[23:33] be demand destruction in fossil fuels in

[23:35] favor of bofuels. Ethanol is getting all

[23:37] the play right now, but biodiesel could

[23:40] be a big factor as well. And in the

[23:42] diesel fuels, what you use is you use

[23:43] oil. So you use palm oil, you use bean

[23:45] oil, you can use canola oil. And bean

[23:48] oil right now at $26 is good value as

[23:52] well. Now, you're bearish on crude oil,

[23:54] but you're bullish on natural gas. Where

[23:56] do you see uh crude oil prices going and

[23:58] where do you see natural gas going?

[24:00] >> Um I am overall bearish on crude, but

[24:03] again, I I caution against um shorting

[24:06] it because we do have the political

[24:07] situation and the climate situation if a

[24:10] hurricane should blow through Houston.

[24:12] So, I personally don't agree with being

[24:14] short, but there's plenty of supply

[24:16] around. It's basically the refining

[24:18] capacity. We could see oil going back

[24:20] down to $50, $60. We think 75 to 85 is

[24:24] definitely overvalued.

[24:25] >> And how about on natural gas? Do you see

[24:27] our natural gas getting back up to $16

[24:30] >> eventually? Over the long term, this

[24:32] year I think it will be a little bit

[24:34] difficult, but basically, you know, we

[24:36] came from the early 90s where we were at

[24:38] about 150 $120 per million BTUs. Rene up

[24:43] to

[24:44] >> I hate to interrupt you, but we we've

[24:46] really run out of time, but very

[24:47] interesting thoughts and very different

[24:49] than what we usually hear. Thank you so

[24:50] much for coming on the program.

[24:52] >> My guest tonight, Renee Hargarude,

[24:54] founder and chief investment officer of

[24:56] the Gulier International Fund.

[24:58] >> And recapping today's market action,

[24:59] stocks and the week in the red with the

[25:02] Dow falling almost 60 points and NASDAQ

[25:04] loses 19. And learn more about the

[25:06] stories in tonight's broadcast. Go to

[25:09] nightly business report on pbs.org.

[25:11] [music]

[25:12] That's Nightly Business Report for

[25:14] Friday, July 21st. I'm Jeff Yasine. Have

[25:17] a good weekend everyone. and Susie, you

[25:18] have a good weekend as well.

[25:20] >> And you too, Jeff. I'm Susie Garrett.

[25:21] We'll see all of you again on Monday

[25:23] night.

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