tv Nightly Business Report PBS May 6, 2016 1:00am-1:31am PDT
this is "nightly business report" with tyler mathisen and sue herera. oil inferno, a massive fire raging through the canadian city home to the world's third-largest reserve of crude sending oil and stocks on a volatile rise. sticking point. why verizon's striking workers are taking their concerns right to shareholders. planning for future. a simple yet important document could prevent you from making a major financial mistake. all that and more on "nightly business report" for thursday, may 5th. >> a day before the monthly jobs report is set to be released a number of federal reserve officials are speaking on the economy. we'll have more on that shortly. we begin with the massive
wildfire that's engulfing canada's oil-rich province of alberta, disrupting production and sending ripples through the global energy markets. oil companies are evacuating workers, shutting plants or reducing production. the disruption sent oil prices higher initially, above $46 a barrel. but when reports came in that some production may be returning, the gains were paired, settling up 1 with respect to just above $44. dierdre bosa is in wood buffalo, alberta, with more on the blaze, the thousands displaced, and the damage it's done. >> reporter: clogged highways. an overwhelmed airport. and an entire city evacuated. this is ft. mcmurray, the heart of canada's oil fans. and it's on fire. as of this morning a total of 49 wildfires raged in alberta over more than 300 square miles. >> our thoughts are turning to
our friends in alberta. obviously ft. mcmurray being evacuated has been extremely difficult, not just for the province and officials but for the folks who live there. >> reporter: strong, shifting winds are making it difficult to control the the blaze and its widening evacuation. this highway is normally filled with trucks carrying equipment and supplies to oil operations. now a long lineup of emergency vehicles heading into the fire zone. the oil sands haven't been directly threatened by the wildfire but production is being affected. companies like shell and conoco phillips have shut operations or curtailed production. >> we're still seeing a pop in crude oil due to the fires out there. right now it's very interesting. i think we'll continue to see the chop, the volatility, in crude oil. >> reporter: reuters calculates that at least 640,000 barrels per day of capacity is offline due to the wildfires.
canada's total oil sands production is around 2 million barrels a day, most of which is exported to the u.s. the wildflowers are another setback to canada's resource-dependent economy, already struggling under low oil prices. when oil prices came off their highs late in the day, so did the broader stock market. by the close the major index finished the day volatile with fractional gains and losses ahead of tomorrow's employment report. the dow jones industrial average was up 9 points to 17,660. the nasdaq lost 8. s&p 500 was .5 points lower. something else happened on wall street, a key part of the u.s. economy, retail, had a very disappointing showing. bob pisani explains. >> reporter: even though there's less than a dozen companies that still report monthly retail sales, those that did report april numbers disappointed and
confirmed the spring selling season is off to a slow start. l brands, they make victoria's secret, especially disappointing. sales of the victoria secret brand down 1%, well below expectations. costco, zumi, buckle, they were all below expectations. what happened? first, believe on it are not, there really was poor weather which has been disappointing and it's been poor into may. cloudy in new york and rainy for a week, week and a half. i spoke to an analyst in atlanta, it's 51 and cloudy, it's supposed to be 75 degrees there. this is in contrast to february and early march when the weather was fairer and warmer. it's likely some demand was pulled forward. then there's the continuing impact of that amazon jugger nut. one analyst estimated amazon will likely sell $10 billion in aparable this year. it seems to have been a pickup in promotional activity and clearance markdowns in the
second half of april. the hope turns to mothers day this sunday. it does matter. it looks like the weather in the northeast and midwest is warming up. let's hope that trend continues. bob pisani at the new york stock exchange. to the economy now. weekly jobless claims rose to a five-week high but they're still at historically low levels. the number of americans filing for new unemployment benefits increased by 17,000 to a seasonally adjusted 274,000, a level consistent with a strengthening labor market. this comes one day before the monthly employment report for april. forecasts call for a gain of 205,000 non-farm payrolls. the unemployment rate is expected to remain unchanged at 5%. average hourly earnings are projected to increase .3%. president of the san francisco federal reserve printouted progress the american labor market has made. he said earlier concerns about a global slowdown have dissipated somewhat but john williams wants
the u.s. central bank to continue monitoring economic data. >> you look at the projections we made in march. typically people said two or three rate hikes this year. i think that's a reasonable view. but we'll be watching the data, making sure that q1 blip or slowdown in gdp doesn't persist. watching things globally, making sure we're making the right call. i think we should stay in our basic strategy of gradually moving policy accommodation over the next couple of years. that would involve some rate hikes this year. >> another fed official said he was undecided about whether interest rates should be raised next month, even though he believes the economy will likely rebound from that weak first quarte >> i think we should keep the option open, but i'm very much at the moment sort of on the fence. and it will depend on how the data come in. today we kind of have a disconnect between the growth numbers and the employment numbers. and clearly i'd also like to see
inflation numbers continue to move in the right >> you like fed speak? we got fed speak. st. louis president james bullard agrees global headwinds are not as much a concern as they had been but remains undecided on the path forward for rates. earnings, dow component merck saw first-quarter revenue fall short of analyst estimates, extending a four-year decline in sales. the company citing disappointing results from some of its older drugs. but merck is optimistic that growth from its newer medicines, including a hepatitis "c" treatment, will help revive sales. that prompted the company to raise and narrow its earnings and revenue forecasts for the year. fellow dow component verizon hosted its annual shareholder meeting amid one of the largest labor strikes of the past few years. and those striking workers made themselves heard to executives and investors. jane wells reports from the gathering in albuquerque.
>> we're disgusted! >> reporter: what is usually a boring affair, the verizon annual meeting in albuquerque, new mexico, was suddenly breaking protesters from the union representing tens of thousands of striking workers on the east coast descended on the southwest as verizon's second strike in five years entered its fourth week. >> if a company like this doesn't preserve good jobs, how are we going to have good jobs in the future in our country? >> reporter: the sticking point is verizon's desire to move customers calls for service to calls outside the local region and workers fear this means shipping jobs out of the u.s. they also came to the shareholder meeting with proposals on the ballot like one which would force executives to hold till retirement 75% of the shares they give as compensation. >> it's a new standard that is emerging in corporate governance to make sure executives have skin in the game so they don't
take compelsive risk sglrts that proposal failed. another proposal would require shareholder approval before giving executives severance packages nearly three times their annual pay. shareholder bill donald loves verizon management, but he still voted for that proposal. >> it's hideous what we pay these people, but that's wall stre >> reporter: however, that proposal also failed. but the authors, a group of retirees, vow they will try wi again. >> we have just begun to fight. >> reporter: in fact, all the shareholder proposals were rejected and the board was overwhelmingly re-elected and their pay acknowledging approved. chairman and ceo lowell mcadams thanked the striking employees who came to the meeting, because they're also shareholders, they were inside. he said he was willing to settle the strike through negotiations or even mediation. neither appears likely soon. higher pay is one of the reason why verizon workers are
striking but compensation isn't just an issue at big companies. small business owners are grappling with it as well. as cities across the country are beginning to raise the minimum wage. kate rogers is here with more on the state of small business. it is national small business week. good to see you as always. picking up on the minimum wage hikes, it's a big one for businesses large and small. how worried are small business owners? >> this is one of their top concerns. we've seen a huge trend over the past two years of large cities, big states like california and new york, target, walmart, a slew of company raising their wages anywhere to $9 to $15 an hour. that's a big, big concern and it puts pressure on main street businesses that might not already be paying higher wages. it makes them less competitive. it puts pressure on them to start paying their workers more and more money. we're not seeing a lot of rhetoric on the campaign trail that will make them feel better. donald trump said he's open to doing more with the minimum wage, no details there. bernie sants $15 an hour,
hillary wants $12. that gives maybe street business owners pause and concern. >> small businesses are a huge job engine. one part of that is whether the businesses are feeling confident about the economy. the other is how much they're going to have to pay workers. are you hearing, one, confidence? two, the concern that higher minimum wage may tamp down their ability to high more people? >> the national federation of independent business, we talk about their optimum index. i looked at the index the past five years. it has been trending higher post-recession. it's still below their average of 98. recently it hit a two-year low, around 92, which is scary and gives you pause and concern there because they're saying the reason it's lower is the rhetoric once again on the campaign trail and wages factor into that. >> what about startups? because a lot of startups start out as small businesses. they're not all large venture
capital firms. >> startup activity actually is on the rebound post-recession which is pretty great. 310 out of every 100,000 results are start iing new businesses. so definitely good news there. >> thanks, kate. still ahead, the importance of estate planning. how you can preserve your wealth for future generat generations.
new federal rules could upend the multi-billion dollar electronic cigarette industry. the food and drug administration will extend tobacco regulation toth the relatively new e-cig products including banning sales to minors and a requirement that e-cigarettes carry warnings that they contain addictive nicotine. the new rules will not go into effect right away since the companies need time to comply. the nation's consumer watchdog is proposing a new rule that could make it easier for customers to sue financial firms like spanx and credit card companies. that proposal targets arbitration clauses that are tucked into the fine print of contracts. the clauses prevent customers from participating in class action lawsuits and instead pushes them into arbitration. the rule is being proposed by the consumer financial protection bureau and does not require congressional approval.
tribune publishing turns down gwinnett's takeover bid. "market focus." the owner of the "chicago tribune" and the "los angeles times" said it is open to evaluating credible proposals, it says gwinnett's offer undervalued the company. gwinnett made public its intention to acquire shares of trib ewe, which fell to $37.77. gwinnett down to $16.10. recent acquisitions helped drive revenue higher at magazine publisher time incorporated. the results is topped estimates. the company unveiled its plans today to create a free video streaming service called people and entertainment weekly. ceo joe ripp spoke about the new endeavor. >> we make good video and good tv. our digital mobile audiences are growing dramatically. our individual grow we put on took life is growing
dramatically. the opportunity for us in this market is enormous. >> shares of time, ink, up 4% to 15.31. shares of atlas world got a boston after it said it would assist amazon with delivering packages. the deal which is expected to take place by the end of the year will let amazon buy up to 30% of that company. shares of amazon down about 1.5% to 659.09. atlas air soared nearly 27% to 48.66. and the chinese e-commerce giant alibaba reported a 39% increase in revenue for the latest quarter. this thanks to strong growth in the company's core online shopping segment. the company saw an 85% jump in net income but it fell short of analyst estimates. shares of alibaba nonetheless up 4% at 78.83. weak demand for cereal products weighed on kellogg. despite declines the maker of
pop tarts said it remains hopeful cereal sales will turn positive by the end of the year. kellogg shares down over 2.5% to 75.05. seaworld entertainment issues a narrower than expected loss and downed guidance for the year. seaworld said it would abandon breeding its signature killer whales. shares ended down 5% to 18.49. shares of the mobile payments company square initially fell in after hours trading after that company posted a wider than expected loss. but revenues rose and square raised its guidance and revenue for the year. >> the core business is really strong. the small business economy and moving upmarket towards medium-sized businesses has been our sweet spot. we're seeing growth in the mid market and upmarket opportunity. and we have this fantastic new reader as well that allows any one of our sellers to accept apple pay, sam sung pay, android
pay, and emv. >> shares of square fell sharp isly in extended session but finished the regular session down over 2% to 13.05. activision blizzard posted results that easily surpassed street estimates. the strong report prompted the company to hike guidance for the year. the news sent shares higher. the stock finished the regular session up more than 1.5% to 34.91. prince's roughly $hundred million estate is in limbo all because the muse eceic icon die without a will. surveys differ but surveys say well over half all adult americans, including two-thirds of women aged 45 to 54, don't have a will. the consequences can be devastating. joining us now with more on this is sharon epperson. a lot of people don't create wills, sharon, because they think it's -- they don't want to think about it, but they also think it's expensive.
is it? >> it doesn't have to be. you need to really just lay out what you have and talk to someone about it, or go to a website that can help you figure it out. talk to a financial adviser, talk to an estate planning attorney. determine what your situation is. and that will determine how much you may have to spend. you can go to some legal websites though that offer fixed fee services for relittle money, create document on this your own for $70. the wills can be fine. you may want to have someone look it over and that will cost more. for a couple hundred dollars that kind of peace of mind is well worth it. >> at least you've got something on paper. a lot of the people think, it's going to be too complicated. in if you cover the basics it doesn't have to be. >> first start out laying out what you have. including your debts as well as the property and assets you have. that can determine how difficult a bill you will have or how complicated i should say a will you will have. you need to figure out who you trust, who will be your
executor, designate that person. guardians if you have children, that's key. >> critical. >> updating beneficiaries is another important part of estate planning. making sure that your beneficiaries for your ira, retirement accounts, insurance companies, match who you want in your will because those documents actually will hold precedence over your will. you want to make sure those names are the same. >> what other estate planning documents do i need? >> you want to have a>> living will. if you want life-sustaining treatment or not, have that laid out in a legal document, a living will. someone to make those medical decisions for you, medical power of attorney, designate that person. also a power of attorney who will make financial decisions and thi if you're incapacitated and unable to do so. all these things soar important. while people are afraid to talk about it, to think about it, this is the kind of legacy you want to leave, a legacy of financial stability, financial strength, and just letting your loved ones know that you're okay, your family, charitable
institutions you want to support, have it all laid out. >> you don't want them to have to deal with something complicated after you're gone. >> absolutely. >> thank you very much, sharon epperson. the disney movie. it hasn't even opened yet in the u.s. but it's already a box office success. here's a look de to watch tomorrow. as mentioned the government employment report is out. it's a biggie. expectations are for a gain of
205,000 non-farm payrolls. warren buffett's berkshire hathaway will report earnings alre and the energy market's going to be focusing on the weekly oil rig count. and that is what to watch friday. ford is investing in a silicon valley tech firm. the automaker is putting $182 million into pivotal, a software development company. that deal gives ford access to a technology it wouldn't otherwise be able to develop on its own. it's latest in a growing number of detroit silicon valley tie-ups that underscores the commitment to developing more advanced and autonomous vehicles. amc networks is crediting hit shows like "the walking dead" and "better call saul" for its strong quarterlies which exceeded expectations, revenues up more than 5.5% from last year. ceo says 2016 got off to a strong start and ad sales were higher and that sent shares up more than 5%. from the small screen to the
big one. disney's "capital america: civil war" is already a box office success and it doesn't open in the u.s. until tomorrow. early results may ease concerns for disney shareholders. as julia boorstin reports it could put marvel on track for superhero supremacy. >> reporter: when "captain america: civil war" opens in over 4,200 theaters in the u.s. this weekend it's poised to dominate the box office and sell $200 million worth of tickets. the superhero film is fandango's top-premiering superhero movie all-time representing more than 90% of fandango weekend ticket sales. financially it's going to be a home run. epreputati reputationally is even bigger. concerns were, are we going through superhero fatigue? how long will people want to watch superheroes? "captain america andre kirilenko
civi war" is showing there's a lot of life left in this for disney. >> reporter: the movie has already grossed over $260 million overseas and it hasn't even opened in china and russia. "captain america" has drawn better ratings than the last superhero blockbuster. critics gave ate 93% according to rotten tomatoes. "batman v. superman" drew 28%. >> i would have thought batman and superman were bigger than spider-man and iron man. but certainly at the box office, marvel is winning. and winning big. and i don't think there's anything else you can ascribe it to except that the guys at marvel seem to have a better sense for what people want to see in movies around superheroes. >> "batman v. superman" grossed $863 million worldwide, making it quite profitable for warner brothers. but poor reviews raised questions about warner's ability
to make its dc cometic characters as massive as marvel's avengers, with a lot riding on the you'll coming "suicide squad" launching in august. disney studio has been on a run with a string of blockbusters from "the force awakens" to "zootopia" and "jungle book." after "captain america" it has the "finding dory" sequel and the "star wars" spinoff in december. disney studios on track for another record year. for "nightly business report," i'm julia boorstin in los angeles. finally the big screen september just for watching movies, it is part of the competitive boutique fitness industry. imax, the company known for its big screen theaters, is muscling its way into indoor cycling classes, what it calls imax shift. it's already got big money and marketing behind it. diana olick was there.
>> reporter: the warm-up is under water. the heat comes when the tunnels turn techno. it's everything you'd expect from imax movies, only in this brooklyn theater, you don't sit back and enjoy the ride, you do it. >> imax is always looking for opportunities to take the brand, the technology, and frankly the focus on larger than life experiences to different places. >> reporter: it was an easy ride for the $1.7 billion movie "empire" to coast into fitness. >> fitness, you have a market of people migrating to more boutique, personally engaging experiences. we have opportunity to accelerate that trend. >> reporter: the cost is a competitive $34 a class, $350 for a month-long membership. >> it's pretty low, actually, for new york standards. >> reporter: they describe the class as totally awesome and extremely stimulating but they might not choose it as a regular
workout. welsh sees it more as an entertainment destination. >> i think for me it's something that i would take friends or client something totally different than your regular workout routine. >> reporter: which is what imax movies already are. imax is not putting a lot of dollars into this pilot but if it does catch on executives say they're ready to roll it out aggressively. with a strong international brand behind it, that may not be much of a climb. for "nightly business report," diana olick brooklyn, new york. >> that is "nightly business report." i'm sue herera. >> i'm tyler mathisen. thank you for watching, see you to.