Tim Cook: Full Testimony Before Congress [VIDEO]

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Transcript:

welcome back. we’ll continue to follow the stories in washington and down in florida with jamie dimon winning that vote. back to our top story, goldman’s bull market call. new numbers out today revealing just how strong the firm thinks the stock market is and will continue to be. goldman expecting the s&p 500 to hit 1750 by the end of this year, 1900 by the end of next year, and 2100 by the year 2015. josh brown? scott, it’s a fascinating rationale. goldman is saying typically multiples will expand in the year before to get gdp growth, and so they’re talking about 75% of the current expansion being due to the multiple growing and that continues. they’re also talking about this dividend floor that they think will continue to rise. right now it’s about 2% on the s&p. they think that will go higher and keep price with the price of the s&p and that is rather interesting, it’s a much better case than for them to say there’s multiple earnings growth. what do you make of this wildly bullish call? i think it’s an acknowledgement of the growth we saw in the first quarter. 12% was surprising from the street. it came from the sectors we like through discretionary and financials. you want to see the names like a microsoft, ibm, even apple, extend the dividend policy they put for already. i agree with josh. i don’t think it’s on earnings growth. it’vidend growth. it’s a way to give back to shareholders. if you watch the testimony with tim cook and the lawmakers in d.c. you begin to wonder if apple doesn’t get motivated even more. chasing the rally all along and our own steve liesman is here with a look at why so many have missed the boat, and so many have. i wish i knew the why, scott. you overpromise. i do not know the why. it has been extraordinary. when i saw that goldman thing, first of all, we did that interview with gary cohen recently and you got a sense of the bullishness inside goldman. because you asked him if he agreed and he did. six ways to sunday i asked him for his pessimism. he wouldn’t give it. i know this is not planned but put up the chart of what goldman’s previous was and where their outlook is now and when i saw that, exactly emblematic of what’s on the street. they were at 1625 for year end at a time when the current market was above where they were. let’s go to the fed survey, the cnbc fed survey, a chart that shows you the increasing pessimism of the analyst, the economist, on the market — guys, i don’t know if you have that chart we created in the back. i’m sitting here twisting in the wind. there it is. what you see there in the blue, their mid-year forecast and then where it was, the green number is where the s&p was on the date that we reported what the average was. so you can see only in december did they forecast an increase and the percentage decrease. so look at that in april when they forecast whatever that number ends up being, it ends up being that they’re thinking by june 1.3% lower. they have never believed in this market and they have continued to chase it higher. but the market keeps outperforming. we’re the top analysts. i think they have been pretty on the money here. they haven’t underperformed. if if you talk to these guys, the reason they’ll give you for why they weren’t keeping pace is they all overestimated these policy issues and the role they would have and underestimated the power of sentiment when it shifts. that’s interesting. so the key being overestimated the government cutbacks. look at that graphic, though. that’s where the street is. these are the guys i’m talking about for year end. below or substantially below. we are looking at the s&p 500 at 1670. i wonder the read. maybe being behind the curve is healthier for the market. you’ve seen a lot of markets. i have but i’ve listened to a lot of strategists. where they missed was they were looking at bottoms up s&p numbers saying, okay, historically on 0 an evaluation basis we’re closer to the top and given this growth we shouldn’t be there. here is what’s really driving the market. give me a point in time when any central bank has mott overshot either a tightening or an easing. so with every central bank right now easing, everyone that’s meaningfuven israel coming out and easing, you’re in such an accommodative easing money policy wheretorically you were accommodative at 3% rates. we’re at 0.25%. just go with what common sense tells us. let’s bring in a strategist who is maintaining her bearish stance on the market with a year end target. equity strategist for wells fargo joins us. gina, welcome back. good to see you. why has it been so difficult for your colleagues at other firms, for you, to get on top of what’s happening in the market? you know, i would say respectfully you’ve been the most wrong of the lot. and i’m wondering why. well, our price target is based on two things, it’s a model of the multiple. the multiple has been tremendously difficult to predict because of the evolution of fed policy over the last several years. the earnings numbers are actually tracking as we expected. we are suggesting we get 2% growth which is about right. our model actually suggested we would have some multiple rise the first half of the year and multiple contraction the second half of the year remains to be seen whether we’ll get that the second half of the year resulting in lower equity prices ultimately. are you ultimately underestimating the power of the fed and other central banks to do what they’ve done? you can cite earnings, almost everything, and none has seemed to matter. what matters most is central bank stimulus in this market. it has put a floor under the market, added a gusto to the market unlike anything almost we’ve ever seen. yeah, i think that’s spot on target. you can underestimate on the top side. it’s the nature of equity markets to overreact in both directions. i think the mantra don’t fight the fed works both ways. you don’t fight the fed on the way up but you don’t fight the fed on the way down. did we just lose gina? we just lost gina martin. we’ll try to get her back. one of the interesting things she said, scott, she underestimated — the evolution of the fed policy. what i think she was getting at was the way that fed policy would force people out of certain securities into others and the willingness to bid up stocks. plain and simple, we heard her speak in december, the r word, recession. that’s what she expected in 2013. i don’t know if she is still using that word but, if she is — looking for $104 from the s&p this year. it’s going to come in much higher. she is way too bearish. you are lookinttoms up at what companies are — what she is talking about with earnings, that is in the market. it’s where it’s going. the other thing is that sentiment doesn’t turn on a dime. it’s not a light switch. once it gets going, it’s got to run its course. it’s just gotten going. it’s early to talk about multiple contraction. look, you have five months or so, six, seven months to find out if she’s right. it’s early to say right now that she will be wrong but she hasn’t been right i would say over the last several times and that’s fair enough.

Apple’s Cook on Why AOI Exists

Senator John McCain (R-AZ) asks Apple CEO Tim Cook whether one could draw the conclusion that Apple has an unfair advantage over domestic-based corporations and companies in the U.S. that don’t have the same ability to relocate overseas, and why AOI exists.

Transcript:

carl, thank you very much. it is noon in the east. welcome to the halftime show. we’re monitoring two breaking stories this hour. u.s. ceo tim cook, as we’ve been watching here, getting grilled on capitol hill over the way the company pays its taxes. we’re going to bring you all of the latest headlines from that testimony and the question and answer session as it continues. we also want the to get to the results of the

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