tv Nightly Business Report PBS May 31, 2016 1:00am-1:31am PDT
this is "nightly business report" with tyler mathisen and sue herera. >> good evening, everyone. welcome to a special memorial day edition of "nightly business report." i'm tyler mathisen. sue herera has the evening off. while it is still only may, not much left of it at that, this weekend did mark the unofficial kickoff to summer and while it is normal to be preoccupied with the weather and vacation, this summer could be a very busy one for you and your money. possible interest rate hike to the political conventions and a stock market keeping a wary weather high on everything. and that's where we will begin tonight, wall street, dominic chu looks at the unknowns facing the summer market.
>> every time memorial day comes around, the old market cliche gets passed around. sell in may and go away. in other words, are you better off taking a vacation from the markets and enjoying what you can during a summer vacation, like in summers past, this year a number of reasons why markets could get a bit jittery. >> i think as we look at head winds or what could cause markets to falter perhaps in the months to come, not only is the fed raising rates, potentially, a source of volatility depending on if they manage expectations properly, of course, the brexit vote, the referendum on whether or not great britain chooses to stay with the european union or leave the european union a source of volatility and could become a head wind. >> a potential interest rate hike from the fed is probably one of the biggest unknowns in the market. no one really knoy for certain how it will be received overall, but many still remember the market volatility that happened in the weeks following the fed's
last interest rate hike back in december of last year. now, add on to that what could happen in the united kingdom if it votes to left european union, oil price and energy stock worries and whether corporate profits in america can rebound and you can see why some traders are staying a bit cautious. but the story is not all gloom. >> the combination of modest economic growth and rising earnings helps stocks power higher in the past, we think that's likely to be the case both in the summer and through the rest of the year. investors should stay invested, not sell in may. >> last summer, investors grappled with one of the biggest stock market pullbacks in recent memory. oftentimes the amount of trading that happens during the summer months really slows down as people take various vacations. less trading volume leaves open the possibility of more volatility. and with a list of potential market catalysts in the next few months, vigilance will be key. for "nightly business report," i'm dominic chu. >> joining us now to talk more about what lies ahead for the markets and the economy this summer is richard weiss, senior
portfolio manager at american century investments. welcome. good to have you with us. let's take the easy question first, should i sell in may and check back in after the elections or should i just stay with what i've got? what do you expect? >> i think i would be the second place winner, the runner-up. i guess we would prefer that we position in may for the coming months and potentially for 2017. selling in may indicates you think the market is going to go down, you're not going to make any money and stash your money in cash. i'm not so sure about that. i think you can reposition smartly for the coming economic environment to the extent we're at an inflexion point or turning point economically and financially. potentially to reposition yourself. >> give me some specifics here. what is the economic environment you expect, quickly, and then how do i reposition? >> right, well, fundamentally economically we're slowing down. i don't think there is any question about that. the u.s. is looking to grow at best 2%, maybe even 1.5% real
terms this year. the international economy, the major ones, less than that. and we're not getting much support either from the government sector. obviously with the elections in the way or the corporate sector. so it really all rests on the consumer and the consumer is very weak. muddling along at 2% rates. so what this indicates is we're slowing down, we're likely to turn the corner potentially sometime next year into recovery, but for now, there is a slowdown. the way to position for that is to grab on the early cycles. the early cycle sectors. financials is a good one. we have seen some movement there already. i think you'll have plenty of time this summer to buy on the dips and financials and build a solid portfolio weighted heavily toward the early sectors be well positioned for next year when we post election, focus on the domestic economy, regroup and recover. >> richard, thank you so much for being with us. appreciate your insights tonight. richard weiss with american
century investments. the class of 2016 is walking into one of the best job markets for college grads in years. as hampton pearson tells us, recovery from the 2008 recession and more skills oriented economy have employers looking for more and more college grads. >> this year's nearly 2 million college graduates will have lots of employers anxious to put their skills to use. employers expect a higher 5% more graduates from the class of 2016 than last year. according to a highly regarded survey from the national association of colleges and employers. the unemployment rate for college graduates has been cut in half in the last five years from a high of 8% in 20 10 to 4% last year. >> they're taking about two-thirds of all of the good jobs in this recovery and the high school people are the last to be hired. it has been since about 2010 that things have been getting slowly better.
>> in 2015, degree holders earned nearly $49,000 a year versus just under $24,000 for high school graduates. but that is offset by the $37,000 in student loan debt on average for the class of 2016. college job placement experts say it all comes down to a simple rule, what you make in salary depends on what you take for courses. with employers and job seekers putting a premium on jobs in the new economy, in technology, computers, and, yes, business getting the most attention. >> the employer attitude pretty much is we have got the jobs, we're having trouble finding the people who really are qualified, which is why the college wage premium, the value of college over high school, has gone from 39% in the early '80s to 85% now, they're chasing the best talent with the most money.
>> for this generation, the only thing more expensive than going to college may be the cost of not going. but the experts say even with an improving job market, the transition from college to career will be at least two years. for "nightly business report," i'm hamptoon over the past few years the concerted effort to hire military vets is starting to pay off. walmart says since it started its welcome home initiative three years ago, it hired more than 130,000 u.s. veterans. but walmart is not alone. in fact, the unemployment rate for post 9/11 veterans has hit nearly an eight year low and did so last month. but as deena tells us while progress has been made, more can >> medal of honor recipient and retired army captain floret growburg noseknows a thing or t about sacrifice.
but that didn't prepare him for the working world. >> i did not know how to effectively network, how to reach out to individuals in my field and transition over to corporate america. >> now he's partnering with linkedin to teach vets about the importance of networking and working to try to get more hiring managers to pay attention to the jobs skills veterans have to offer. so far he's met with companies like ibm, hp, google and jpmorgan chase. >> we are adaptable. we're flexible. we're mission centric, we're dedicated. we're loyal. we're sponges as well. we learn quick. we're going to make our mistakes, that's a fact. but we're go not going to make that same mistake twice. >> we're highlighting the tech industry today. >> representatives from microsoft, uber and amazon were among the folks testifying. >> our commitment to the military does not end once candidates are hired. once employed, we connect them with our internal network, the
amazon warrers. >> amazon pledged to hire 25,000 veterans in the next five years and uber said the company had already fulfilled its goal of employing 50,000 veterans. there is also a need for veteran candidates in the health care sector, ascension recently partnered with the department of veterans affairs to provide medical services to veterans who may not have access to a va facility or who have to wait a long time for an appointment. >> we currently have 2,000 of our employees who are veterans. we want to make sure we understand the true veteran experience. we understand that veterans have different needs than some of our other patients. right now, in many parts of the country, the veterans are most vulnerable. >> the unemployment rate for veterans who served on active duty since september 2001 hov hovered at 5.8%. and according to experts, about half of veterans leave their first jobs after the military within up with year of transitioning home, statistics
that they're trying to change. >> i think we can be successful in any sector if given the right opportunity. >> for "nightly business report," i'm deena gostokowski. >> summer is the season of travel. what can we expect on the roads and at airports over the next few months. first, words of wisdom from our business leaders to recent grads. >> if anyone can do it, you can. berkeley is filled with people who want to make the world a better place. never stop working to do so. whether it is a board room that is not representative, or a campus that is unsafe. >> remember this, graduates. when people start telling you that you're crazy, you just might be on to the most important innovation in your life. >> of course, the other
possibility is you're crazy. >> as the summer churns on, the presidential election will dominate the news cycle. things will really heat up starting in july. with the republican and democratic conventions, aymanaftaymaeamon r s joins us this. when will we see vice presidential picks by the two nominees and who are some possibles? >> well, it is really hard to say, tyler. this year has been so unlike other years that we have seen in past election cycles. you'll see the vice presidential names start to really float in those weeks before the july presidential conventions in cleveland and philadelphia for the republicans and for the democrats. so you might see a drum roll in the days leading up to that. and then a big announcement just before the convention. that's what we have seen in the past. as for who the candidates are, because this is such an unusual year, with such unusual candidates, it is very hard to say who we're going to see for the vice preside in both
parties. typically, they'll look for some kind of regional balance, demographic balance, and other things to play against the strengths of the nominee at the top of the ticket. this year, though, it is anybody's guess. for donald trump, for example, would he pick a senate insider like a bob corker or would he go with chris christie, gubernatorial experience, or would he go with somebody else entirely that we haven't even thought of yet. those are all possible names that are out there. and for hillary clinton, you're looking at any one of a number of people potentially, a lot of folks in the democratic party would like to see elizabeth warren, but would hillary clinton have two women on the ticket? would that be considered a strength or a weakness going into november? and then what about -- a wild card for hillary clinton, mark cuban, the billionaire. his name has been mentioned. he hasn't been ruling himself out necessarily for that slot. there are a couple of names out there and if they want to go with a wild card or somebody insider, an establishment,
that's the big question. >> a shark, a haeart beat away. i can't wait for the debates. we didn't have enough of them during the primary season. what of the clinton trump debates to be like, presuming mrs. clinton is able to best bernie sanders? >> i think the only thing we can say for sure about these debates coming up this year is that they're going to be extremely highly rated. everyone is going to watch this to see what happens here. i think a lot of the conventional wisdom here inside washington, inside the beltway is hillary clinton will do well in those debates, but donald trump has a way of getting inside your head when you're on the debate stage against him. it is going to be very difficult for hillary clinton. >> eamon javers, thanks very much. if you were on the road this weekend, you probably weren't alone. aaa expected more than 38 million americans to travel, go somewhere. majority hitting the roads. that will be the second highest memorial day weekend volume on record and as jackie deangelis tells us, it is because of one
thing. >> the inspiration is coming from cheap gas. the national average for a gallon of regular is $2.30 today on aaa's website, up 16 cents over the last month. but down 44 cents from this time last year. still, not everyone is satisfied. >> i think gas prisz should ces lower, but not as high as they were last year around this time. i do drive a lot with my job and everything, so gas prices are very important. >> i'm going to drive, i'm going to drive. if the gas prices are high, i'm not going to be as happy as i'm driving, but i'm still going to go where i need to go. >> top destinations for road travel, orlando, myrtle beach, washington, d.c., new york, and miami. so far this year, americans have saved about $18 billion on gasoline alone, where those savings are being spent is still debatable, but one thing is for sure, cheap gas motivates people to get up and go. >> we came into the summer with a huge amount of supply for gasoline. and, yes, we are drawing at
record rates now for gasoline demand because prices are so low. but that demand should be able to be met with the supplies that we do have. i imagine prices will probably peak in the next two or three weeks barring any hurricanes, geopolitical problems or things like that. >> crude is up almost 50% in the last three months alone. if the market is starting to level off and stabilize, could we see a national average back at $2 again? >> i don't think it will happen until after the summer driving season. what happens with the summer is there is a premium for the gasoline for it to burn cleaner. once we get through that season, in october, we go back to the cheaper winter gas and i think that's the point where you could see $2 a gallon again. >> one thing for sure, most consumers aren't kicking the gift horse in the mouth. the cheapest gas in over a decade for this time of year is nothing to sneer at. for "nightly business report," i'm jackie deangelis. >> this memorial day weekend, travelers have probably dealt with long security lines and
lots of different airports around the country, but in atlanta, delta and the tsa hope they have found a solution to make those lines run quicker for the summer and beyond. phil lebeau explains what >> it looks like a regular tsa security checkpoint. but atlanta hartz field jackson airport has a new system designed to quickly move travelers through security screening. >> if it is as successful as we believe it is, i think airports around the country will look for the technology very quickly. >> her is how it works. when travelers get to the check point, there are five stations for five different people to put their belongings in bins. when a person is done, regardless of where they are in line, they push their bin down the line to the x-ray machine. and walk through a metal detector. if there say problem with their bag, it is automatically sent to an area beyond the x-ray machine for further inspection. that way it doesn't hold up the line. and with five people constantly
going through one of two metal detectors, the line should move, even if some people are occasionally stopped. >> it went fast the whole way up to this point. but quicker than the old way to unload your bags. >> i didn't think it was faster. >> seemed to go pretty quickly. went right through the front of the line and -- >> my bag did get screened but only took ten minutes altogether. >> with long lines at many airports, the tsa is adding more officers. and more overtime. meanwhile, the embattled head of the agency found himself on capitol hill, answering questions on how the tsa can relieve securit line headaches. >> you're undergoing an impossible -- trying to take on an impossible track. that probably doesn't encourage you very much today. do you think the number o bags going through our checkpoints is problematic. >> delta spent a million dollars developing this security system. d on its first day in use, there were a few hiccups with
tsa agents and passengers adjusting to the new setup. but nothing major. if it works as planned, this new system could clear up to 25% more passengers than a standard tsa checkpoint. which would be welcome news for those travelers tired of waiting in security lines. phil lebeau, "nightly business report," atlanta. so what can you expect from your summer travel? vera cansen with the u.s. travel association, joins us now to discuss. welcome. let's start with the tsa and long lines at the airports so well -- sort of cataloged over the past month or so. is help on the way? and how soon can we expect things to get better at those checkpoints? >> well, help is on the way. and things are already getting better. some of the airports like chicago, which we're seeing the longest wait times, are now actually down from where they were to about 30 minutes 25rks minu, 25 minutes in some cases. more agents will be in the
airports soon. but the problems are long-term. we're go to need to do a lot to make sure more travelers are in travel programs and that tsa is using innovative techniques like delta developed at atlanta so we can start getting people through on a more consistent basis in a more efficient way. >> partnerships of the airlines as in the atlanta example with the tsa. is the precheck program really helping? >> it is. it is the best way. not only to improve security, because we know more about the people who are going through the precheck lines, but it is also a way to provide a better spence for travelers. you can keep your shoes on, keep your laptop in your bag and tsa has to devote less resources so staffing the lines. in the long run, that's a program that we have to amp up. unfortunately tsa is not good at marketing that program and getting people to enroll. that's one thing we can do to make sure more travelers are using it. >> if airfares are high, and travel getting to the airport is a hassle, do you expect more people will drive and take other forms of transportation? >> yeah, they'll drive, they'll
just stay at home. we just conducted a survey which found that one in five people who intend to travel this summer, about 20%, if they believe that the process is going to be too much of a hassle at the airport, they'll stay home or take another mode of transportation. but you take another moat of transportation, you stay closer to home, stay home, you're going to spend less, and that's a hit on the economy. could actually mean $12 billion in lost spending, if people decide just to stay home, and that's not a state of affairs that we're happy about at all. >> i realize your focus is on the u.s. travel market. there are reports that bookings in europe are a little more sluggish than they have been because of fears of terror, particularly in the cities that have been struck by it. brussels, paris. what are you hearing? >> we're hearing the same thing. that's something that we saw after 9/11, travel really ground it a halt. but also the dollar is strong, which means that it is going to be a little more expensive to travel to the united states. so what we saw a soft first
quarter, i think we're going to see international travel pick up to the united states. i think that's something the market will correct itself eventually. but, you know it really has softened so far. >> thanks very much, eric, with the u.s. travel association. summer block busters are a big deal for moviegoers and hollywood. we'll explain why. . memorial day weekend traditionally the unofficial start of the summer blockbuster movie season. this year, no different.
the slate of big name, big budget flicks will keep moviegoers busy right trough labor day. as julia boorstin explains, hollywood is banking on it. memorial day weekend is always a key time for studios to debut franchise films, to bolster the all important summer season. in this year, it is no exception, with fox's x-men apocalypse and alice through the looking glass drawing audiences to theaters. the summer is packed with big budget blockbusters and a number of sequels, including fox's independence day resurgence, and paramount's star trek beyond as well as sony's ghost worcebuste reboot and jason bourne. and there are the films targeting families, including universal's the secret life of pets and ice age collision course. >> there is a mix of r-rated original come ddies, but also family films and franchises and superhero movies.
it is all about the familiar in the summer that never really changes. >> the 18 weeks from the start of may through the end of labor day are so important because that summer season accounts for over 40% of the total year box office. >> this is awesome. >> the summer is already off to a great start with disney's captain america civil war soaring to record highs and sony's angry birds tapping into a familiar game brand. >> i have a family. >> of all the studios, disney is best positioned, with finding dory from pixar coming up in june, and steven spielberg's the bfg in july, already drawing rave reviews from the debut in cannes. and pete's dragon comes in august. >> they're on a roll like no other. they're having a year in 2016 like universal had in 2015. so disney, they're going to be hard to beat. >> this summer is on track to gross about 6% more than last year's summer season, according to one analyst. but only about 2% more tickets will be sold with higher ticket
prices responsible for the rest of the increase. hollywood studios hoping big names and familiar brands will make paying for that trip to the theater worthwhile. for "nightly business report," i'm julia boorstin in los angeles. nbc universal is the parent of cnbc, which produces "nightly business report." and finally, the holiday weekend is winding down. if you're like millions of other americans, there was a barbecue or two on your calendar. if you check your grocery bill, you may have found that the tab was a little lighter for one item in particular this time around. beef. jane wells tells us why. >> it is a good time to be a meat eater. >> lots of supply out there. >> finally. a midwest drought in 2012 caused the cattle ranchers to cut back the size of their herds, prices went skyrocketing. ranchers began rebuilding their
herds and consumers are seeing the results. >> beef and veal prices are down 5.6% since this time last year. >> usda economist ann marie cane says pork and poultry prices are also falling. when prices go down, sales go up. >> we work off a certain margin, so stuff goes down, we had to bring it down also. >> it is a bun full of good news for the consumer. not only more animals, but it is cheaper to feed them due to a bumper grain crop, cheaper to get meat to market with lower gas prices and the strong u.s. dollar, which means more american meat will stay in america this summer. also helping imports bringing more outside meat into the country, all and all it means a lot more supply for the barbecue and that should bring down prices. but it is not an across the board rebound. california ranchers still face drought. >> as you can see, the hills are brown right now. and we're usually green until june. >> rancher john harvey sold all his cows three years ago and
started supplementing his income with a food truck. now, however, he slowly rebuilds his herd turning optimistic. >> we always are. we wouldn't have been in this business to start with if we weren't a little optimistic. >> as optimistic as shoppers this memorial day when finally they won't have a cow over the cost of the barbecue. for "nightly business report," jane wells, simi valley, california. that is it for this holiday edition of "nightly business rem tyler mathisen. thanks for watching. enjoy the rest of your evening. remember why we celebrate memorial day. we'll .