Jason Stipp: I'm Jason Stipp for Morningstar and welcome to the most actionable, incisive, interesting and triple-A, super highest quality Friday Five of all time. Joining me, as always, with the Friday Five is Morningstar markets editor, Jeremy Glaser, the most incisive reporter you will likely be hearing in a long time. Jeremy, thanks for joining me.
Jeremy Glaser: You are welcome. I hope I can live up to the hype.
Stipp: As you maybe can tell, it is "hype week" on the Friday Five this week. You have five hyped-up stories you are going to tell us about, so let's do the rundown.
Glaser: We are going to take a look at the tech bubble, Barclays buying a U.S. bank, the McDonald's sales numbers, export numbers, and finally, a quick peek at the most important development of all time on the Internet.
Stipp: Well that sounds exciting. We had an anniversary today on the tech bubble, so let's start there.
Glaser: 10 years ago this week we hit the peak of Nasdaq, the peak of Pets.com and Webvan and Excite@Home and all of those wonderful names. We are still not even anywhere close to that peak of 2000, even after the run that the Nasdaq has had in the last year.
That was just built on so much hype and so many people thinking that we are in some sort of new industrial revolution that would completely change the way that the world works forever.
I think it shows investors how important valuation is. That the Internet has, in fact, changed the way that we live and work over the last decade, but if you paid too much for it, it is never going to pay off for you in the end.
Stipp: Still working off that hype hangover on the tech bubble.
Glaser: Yeah, I think so.Read Full Transcript
Stipp: And then number two, there was some news on the banking firm, Barclays looking at an American bank, potentially. It seems a little bit hyped. Is there a story here?
Glaser: A lot of banking stocks had a bit of an upturn when news came out that Barclays was looking to enter into the American retail market by buying some kind of mid-sized bank. But the problem is there just aren't that many mid-sized banks that are available for them to take over anymore.
A lot of the medium- to large-sized banks got surmised by the enormous too-big-to-fail banks during the financial crisis, and other ones are just too small to really make a difference for Barclays. So, they might be able to find an acquisition candidate, but I don't think it is really going to move the needle for Barclays.
It doesn't look like it's going to make a big difference for the U.S. retail banking industry. This doesn't seem like a story that is going to end up being that big of a deal.
Stipp: So moving over to restaurants, I can't help but feel a little bit fancier when I am in McDonald's these days, especially in that McCafe. Is there something to that hype?
Glaser: It looks like that hype actually is valid in a lot of cases. When the fast food restaurants reported sales this week, McDonald's did much better than anybody else. They actually managed to post positive sales in the U.S., even though the enormous snowstorms on the East Coast made it very difficult for other companies like Burger King to post even respectable sales.
People are going out and getting the Big Mac Snack Wrap and drinking the new drinks and buying more things at McDonald's. Even with the unemployment picture looking still pretty bleak, which means less people are buying breakfast and less people are out for lunch, McDonald's is doing pretty well. I think their menu revamp has turned out to be worth all the hype that people are talking about for the last year.
Stipp: So moving on to the economic front, there were some trade news this week about exports, something that a lot of people think will actually help the economy going forward? Is there something to the export hype for the U.S.?
Glaser: President Obama has been talking a lot about wanting to expand exports. He has reached this goal of making two times the next couple of years. He was appointing all sorts of CEOs to boards and coming up with panels and talking to Congress. Now a lot of this is getting lost through all the health-care discussion, but it certainly seems to be a big push.
Then this week we saw that the export trade gap actually shrunk, but that was not so much because exports are increasing; in fact, they decreased. It is because imports are actually decreasing at a faster rate because we are bringing less oil into the country.
It is not really moving the needle on exports yet. I doubt that any of these programs...a lot of which rely on maybe the Chinese revaluing their currency or us changing our industrial policy in a really significant way.
I don't think exports, they could be a big deal, but having all those hype that all of a sudden they are going to double, seems like kind of farfetched and a pretty lofty goal.
Stipp: Certainly, we need to see some more fundamentals before we buy into any of that.
Glaser: I think so.
Stipp: So lastly Jeremy, you have been keeping me on pins and needles for this very, very, very, important tech announcement that came out this week. Tell us a little bit about that.
Glaser: Well, I am sure you noticed it on Tuesday, right?
Stipp: I did feel a little tingly, but I wasn't sure what that was all about.
Glaser: Yes. Cisco Systems made a very interesting press release that said that they were going to have an incredibly significant announcement. One that was going to change the Internet, and that everyone needs to tune in.
They had a webcast and a live presentation and everything was very exciting, because they could release a new router for telecoms to make video roll faster over mobile networks.
Stipp: Wow, stop the presses!
Glaser: Yeah I know. It is a pretty exciting product to be fair. I think that companies like AT&T will certainly appreciate having more bandwidth, but at the same time it is not exactly the most revolutionary product.
The way it was being billed and the way it was being hyped up, it was hard for anything to quite live up to that press. I think they should leave hyped-up tech media events to Steve Jobs. He has got that one nailed down. They should focus on just making good networking equipment.
Stipp: Well, thanks for your hyped-up coverage, Jeremy.
Glaser: You are very welcome.
Stipp: For Morningstar.com I'm Jason Stipp. Thanks for watching.