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Original Source: MARKET CALL
RHONDA SCHAFFLER, CNNfn ANCHOR, MARKET CALL: Hope in Iraq that Saddam Hussein`s former generals are the answer. Marines take a giant leap of faith as they roll out of Fallujah.
Here at home, the politics of war taking center stage. The Fallujah pull back comes just before the anniversary of President Bush`s Mission Accomplished address. John Kerry has prepared a speech of his own on Iraq.
And inside the "Office Space", we`re studying BadBossology. Who is to blame for driving high employee turnover?
All ahead on this edition of MARKET CALL.
Good morning, and welcome to MARKET CALL. I`m Rhonda Schaffler. It is Friday, April 30. About 30 minutes away from the opening bell on Wall Street. Watching stock futures for you as we point to what has been an interesting week so far on the Street.
First the headlines.
Inflation in the economy in the spotlight again this morning. The government says consumer spending posted a smaller-than-expected rise in March, but more of each shopping dollar paid for price hikes instead of products. Personal income is up 0.4 of a percent, slightly better than expected. But when inflation is factored in, disposable income gaining just 0.1 of a percent.
On the earnings front, quarterly profits rose 20 percent at Dow component Procter & Gamble. [Company: The Procter & Gamble Company; Ticker: PG ; URL: http://www.pg.com/] The consumer products company says growth was boosted by strong sales across all of its business segments.
And showtime again for Warren Buffett`s annual meeting. Thousands of shareholders head to Omaha this weekend hoping for clues on his next move. Buffett`s Berkshire Hathaway [Company: Berkshire Hathaway Inc.; Ticker: BRK.A; URL: http://www.berkshirehathaway.com/] posted a record $8 billion profit last year and its stock price is flirting with $100,000 per share.
We kick off the "Roundtable" now, where, as always, we give you news, analysis, everything you need to keep a step ahead of the action on Wall Street at all times. By my side, our guest host Dawn Bennett of The Bennett Group of Legg Mason Wood Walker. Also here in the studio, Ron Scherer, New York bureau chief at the "Christian Science Monitor." In Dallas, David Spika, investment strategist of Westwood Holdings and Phil Flynn of Alaron Trading joining us from the Chicago Board of Trade.
Good to see everyone back here.
David, I want to start with you, what kind of day is shaping up on Wall Street today based on what we know so far?
DAVID SPIKA, INVESTMENT STRATEGIST, WESTWOOD HOLDINGS: Well, I think we`re likely to have a little rebound today, Rhonda, after yesterday`s sell-off. There is still some concern about higher interest rates, potential inflation. People are concerned about the Fed meeting next week. But I think today we`re likely to see some strength in the market based on continued strong earnings.
SCHAFFLER: Phil, out to you, what sort of reaction do we see from those income numbers that we got earlier?
PHIL FLYNN, ALARON TRADING: Actually, we got a little bit of a bounce, believe it or not, in the futures, which means the yields came down just a little bit. So, obviously inflation, of course, is now starting to be the talk once again, to talk in when interest rates are going to go.
The biggest debate is when rates are going to go up. Obviously the market is resigned to the fact that they are. The biggest question is whether it`s going to be June, August or later than that. The key thing here, I think, is the 10-year yield. Remember we were talking about that 4.5 yield for weeks and weeks and weeks. We are above that. We`re still above that. And most traders say now that is going to be the support. That was a resistance, that`s a support, so keep an eye on the 10-year yield at that 4.5 level.
SCHAFFLER: You know it`s interesting, Dawn, do we really need to worry so much as far as when these interest rates are going up. They are going up. Does it really matter what month? Is it going to change things in the big picture scheme of things?
DAWN BENNETT, THE BENNETT GROUP: I think the more interesting way to look at this picture is everyone is expecting if interest rates go up, is the stock market going to fall 700 points? Maybe it`s already being priced into the market. You know Phil was talking about how the yields are up a little bit and the price is down in the bond market. That actually is not a sign of inflation, but maybe, you know, every market has a moment to find their equilibrium. Maybe we`re going to be there before we...
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