tv Nightly Business Report PBS June 10, 2016 7:00pm-7:31pm PDT
around the globe. and that could be a game changer for your retirement savings. bullet train. a privately run passenger rail system using no public dollars is manufacturing its cars in a state you might not guess. a cut above. meet the cereal entrepreneur who's made millions by making people look good. those stories and more tonight on "nightly business report" for friday, june 10th. good evening and welcome. this was a week stocks got the diccens. charles dickens that is. it was by all reckonings a tale of two markets. monday through wednesday, great expectations. oil moved higher, so did stocks. the s&p 500 flirting with all-time highs. thursday and friday, bleak house. government bond yields around the globe fell to record lows in germany, japan, and the uk. the reason? growing fears about global economic growth, central bank policy, and that coming vote on
whether britainil stay in the european union. money flowed out of u.s. stocks and into treasure riz. u.s. bond yields medical to multi-month lows. the dow jones industrial average was off 119 points today to 17,865. nasdaq dropped 64. the s&p 500 down 19. for the week as a whole the nasdaq took the biggest hit. it fell 1%. bob pisani has more. >> reporter: the stock market got smacked around by the bond market and on friday by the currency markets and uncertainty over europe's future. it started in the middle of the week and yields on 10-year german bonds approached zero and dropped sharply in the united states. that pressured bank stocks with many u.s. bank stocks down 2% to 4% for the week. it was a lot worse for european names and it's been that way all year. big bank stocks like deutsche bank and society general are down more than 20%.
a poll in the uk showed a jump in support among those who wanted the up k to leave the european union. that's put pressure on the british pound and strengthened the dollar. a strong dollar is not good for xhod tizz or commodity stocks so oil dropped and energy and industrial stocks like chevron dropped. for all this drama we're essentially flat for the week. the volume was only about average. in other words, prices dropped because buyers weren't interested. there was no rush of sellers coming into the ma. >> what will falling bond yields mean for you and your retirement portfolio? charlie, welcome back, it's nice to see you again. >> thanks for having me. >> the factors that have contributed to the lower rates, specifically the ones that we saw today, are going to be with us for a little bit of time, most people say. so what do you do if you're
nearer retirement and you still have some government bonds in your portfolio? >> well, dropping interest rates means that bond prices go up. and they've gone up way more than they should. bond yields are at 200-year lows, the lowest interest rates since alexander hamilton was secretary of treasury. they make no economic sense. they make no economic sense to have negative interest rates in europe. and so what you should not do is buy bonds. you can't put all your money in the stock market. if you need to have a portion of your money in safer assets don't be afraid to own cash, don't be afraid to own short-term bonds. but don't buy long-term bonds at these inflated levels. >> say i've got money that is rolling out of a cd or rolling out of a 10-year bond that i happened to buy 10 years ago. what do i do with that money if i want income? >> it's a tough question, tyler. the answer is, there are other income substitutes. things like high-yielding
stocks. johnson & johnson, for example, pays almost 3% dividend yield. that yield has gone up over time. but you've got to be careful because other people are searching for yield as well. so now is not a great time to be a yield investor. unfortunately you're going to have to sit this one out for a while and wait for a better time. >> you know, everybody talks about being in cash. and some argue that that's not a good alternative because you're not making anything on your money. on the other hand, you sti do you feel as though cash is really a viable alternative for people as they get closer to retirement? i know you mentioned it a little bit earlier. >> i do. i think you shouldn't be afraid to own cash here. but maybe do what i've done which is to own two or three-year bonds. you won't get hurt owning two and three-year corporate bonds. you won't make a lot. but if interest rates go up a two-year bond doesn't go down much in value. a 10-year bond goes down a lot
in value if interest rates go up. >> thank you, have a great weekend, charlie, aerial investments. americans may be losing confidence in the future. the university of michigan sentiment index slipped last month in part because consumers do not think the economy is as strong as it was last year. the index did come in slightly above expectations because of a slight improvement in wage growth. the department of transportation approved six airlines to begin flights to cuba. the airlines got the go ahead to fly from five u.s. cities to nine cuban cities other than havana. havana routes won't be announced until later this summer. the carriers approved are american, southwest, jet blue, frontier, silver, and sun country. from planes to rail cars, they're central to keeping the economy, people in goods moving. those cars must be made overseas with cheaper labor, right? wrong. some passenger rail cars are built here in the u.s. in a state you might not guess.
let's go all aboard with jane wells in sacramento. >> reporter: california is expens it's highly regulated. it's unfriendly to manug. yet this is where german industrial giant siemens is building rail cars. >> the front end of this is an aluminum front end. >> wow. so it's a big coke can? >> it's a big coke can. >> reporter: this state-of-the-art locomotive is being built inside a 600,000 square foot plant in sacramento. the california capital. a place where siemens has been doing business 30 years. >> the positive spirit that comes from california, the enthusiasm here unmatched anywhere else in the country. >> reporter: florida's governor encouraged california businesses to relocate to the sunshine state. but ironically, siemens is building these new trains for a high-speed rail line opening next year in florida. >> this is one of the passenger
coaches. >> reporter: mike runs bright line owned by fortress investment group which is raising money from investors to build a $2.5 billion privately funded high-speed rail along existing tracks from miami up the coast and eventually to orlando. >> transportation that will unite the state of florida -- >> reporter: commuter rail is suddenly hot. everyone's jumping on board. bright line strategy, its fancy train stations, competitive prices, rail coaches with wide aisles, outlets, wi-fi, platforms that reach out to you, fast trips, and hospitality. betting it can lure some of the people making the 500 million car trips in the region. >> if we capture a single digit percentage of that market, around 5 million people, we'll have a successful and important new business. >> reporter: o projects forced them to expand their sacramento plant. it hopes to bid for one of the biggest projects of all, the california high-speed rail, which leads to one big difference between the golden and sunshine states -- the
florida project is $2.5 billion, privately funded. california's train will be taxpayer-supported and cost at >> to read more about the $2.5 billion rail project, head to nbr.com. weathering volatility. our market monitor is recommending stocks to get you through the ups and do sad news tonight out of silicon valley. venture capitalist thomas perkins has passed away at age 84. his firm kliner perkins caulfield and buyers funded some of the big names including google and amazon. early on he played a major role
in the growth of the computer and biotech industries. gawker media filed for bankruptcy protection and the bidding for its assets has begun. the decision comes after a judge ruled that a $1try million jury judgment against the company would stand. that invasion of privacy case between gawker and hulk hogan. according to reports digital media company zift davis will start the bidding around $90 million for gawker. donald trump took some swings at hillary clinton on the campaign trail and on the economy. and hillary clinton swung right back. john harwood watching it all in washington. good to see you, john, as always. trump made some of those comments when he spoke to religious conservatives. what was his message? >> it was two-fold. on the one hand he went after hillary clinton, said she wouldn't protect the country from islamic terrorism. he repeated his description of her as crooked hillary, said she would raise taxes and hurt the
poor in this country, be bad for jobs. he also was playing defense against a lot of this criticism of his remarks about the judge, and he went out of his way to say, i'm not for discrimination against anyone, nobody race ethnic group should be discriminated against, trying to clean up that problem. >> elizabeth warren endorse ms. clinton tonight and they had a private meeting in washington. is she really a possibility to become ms. clinton's running mate? >> i think you'd have to say she's a possibility. i'm certainally skeptical that's where she'll go in the end. some of this turns on your conception of what's possible in the election. there are some democrats who think they have a natural majority with the demographic groups that they appeal to. minorities, liberal whites, young people. and that if they can simply mobilize them, and elizabeth warren would help that, they can win a narrow victory. others think it's possible to win a bigger victory, pull over moderate republicans, moderate interests. if you're going to do that, you wouldn't pick as polarizing a choice as elizabeth warren, you'd go for a safer pick.
>> we will see. john harwood in washington, have a great weekend, tha intel and apple have an iphone connection.focus." intel will make chips for some versions of the next generation apple iphones. verizon iphones and ones sold in china will continue to use qualcomm processors. intel up a dime to 32.04. apple down nearly 1% at 98.83. qualcomm off 2% at 53.83. federal trade commission gray green light the merger between walgreens and its rival pharmacy rite aid. "new york post" says any approval by ftc would come with conditions. walgreens up better than 4% at 82.47. rite aid gaining 3.5% to 7.83. monsanto reportedly rejecting a second takeover cover from behr, the $62 billion
offer for the agricultural company the same amount it offered in may. "wall street journal" says behr has requested business information from monsanto and money san toy says no, not until there's a higher bid. shares of monsanto off a fraction, 109.20. at&t has reportedly outbid rival verizon in the second round of offers for the tech giant yahoo!. reuters says yahoo! is expected to make public its short list of potential suitors in upcoming days. yahoo! down more than 1% to 36.83. verizon gained 1% to 52.67. at&t up a fraction to 40.33. wendy's says he's found a second case of malware at payment terminals. the chain says the number of restaurants affected by the malware is "significantly higher" than the 300 previously reported. the software caused fraudulent transactions on some customers' credit and debit cards. shares of wendy's down 6 cents
to 10.25. tesla is denying its model "s" vehicle has any safety issues with its suspensions. the automaker denied claims it discouraged customers from reporting the problem. as we told you last night the national highway traffic safety administration said it would review reports of the suspension issue. shares of tesla fell more than 4% to 218.79. our market monitor has stock names he says will benefit from rising interest rates, rising energy prices, and stock market volatility. michael mussio, wealth management firm fbb capital partners. you were on in february, you recommended alfa bet, google's parent, it's up a fraction. apple up a little bit too. microsoft down a fraction. basically break-even. you still like all three of those? >> we do, we own all three stocks. the them back then was tech stocks that were of a good value that provided some income and growth and otherwise more
expensive tech sector. we still own all three. >> you call the picks you're going to give to us tonight micro plays on macro trends. what do you mean briefly? >> so individual stocks that could benefit or help investors kind of hedge part of their portfolio with some of the bigger-picture items that are going on in the economy. energy prices, interest rate movements, and just general market volatility. >> all right. let's get to the new stock picks then, michael. cne group is your first one. and you say it's a hedge on market volatility? >> yeah, cme group runs various exchanges, including the chicago mercantile exchange. the stock benefits when there's a little bit more volatility. the company gets more trading, more activity. and while investors wait we're expecting them to pay about a 5% yield this year with the special dividend that we expect to receive at the end of the year. >> another one in the financial business, td ameritrade holding. >> this is the interest rate play. the brokerage firms, discount brokerage firms in particular,
are poised to do quite well as short-term rates continue to go up eventually. and also benefit from low-cost advice, relatively speaking, as advisers through td ameritrade and their competitors take away business from the brokerage house firms. >> a hedge on rising energy prices with slumberge. >> the oil services industry of energy. from a competitive standpoint they're benefiting from a recent breakup of a merger on anti-trust concerns. their two biggest competitors, halliburton and baker hughes. they're generating solid cash flow. in a bit of a blip with everything else in the energy space but if energy is more on an uptrend down a downtrend, which we think it is, slumberge should outperform. >> do you like the market at today's prices? >> the market as a whole is pretty fairly valued, right?
we think that with no or -- no earnings growth and earnings contraction, trading at 16, 17, 18 times, depending which multiple you're looking at, is expensive. until we see overall growth in the market we'd rather pick individual companies and sectors that we think are poised for growth. it's better than what the market is offering now. >> michael, thanks very much, fbb capital partners. from a barbershop to a multi-million dollar hair care business, an entrepreneur's hair-raising success story in "how i made my millions."
here's a look at what to watch next week. monday apple's worldwide developers conference begins. this year's theme appears to be software. on tuesday retail sales from may will come out with questions swirling about the economy investors want to see how consumer spending is holding up. wednesday the fed chair holds a news conference following a two-day meeting of policymakers on interest rates. and that is what to watch next week. the great white way is having a record year. in the most recent season, 13 million theatergoers shelled out more than $1 billion to see a broadway show. and ahead of the tony awards this weekend, there is one show in particular that's garnering much of the attention. susan lee has more from new yo. ♪ >> reporter: it's the hardest ticket to get on broadway. a play based on one of america's founding fathers, alexander hami and it's raking in the hamilton ♪ >> reporter: the show is sold
out until january next year. people still come from all over, hoping to get their hands on rare tickets. >> i've lost the lottery almost 200 times. i've pretty much given on that ever happening. >> 50 hours when it's all said and done. we're 40, 40 hours in right now. >> reporter: "hamilton" has shattered broadway's top ticket price, hiking the cost of the best seats to $849. on the secondary market, a ticket to the final performance of the show's creator and star lynn manuel miranda in mid-july will cost you $6,000. >> it's a lightning rod to let people know what's happening on broadway, the uniqueness of it, the diversity. what we see also when we have a big hit like that, all the ships rise with that tide. >> reporter: the hamilton phenomenon has helped broadway rake in $1.3 billion in revenue with over 13 million theatergoers in the season.
broadway is a big business. "wicked" just surpassed the $1 billion mark after a 12-year run. "the lion king" and "phantom of the opera" both claim to have grossed $6 billion globally. for those looking for the next billion-dollar show an appearance on this weekend's tony awards could give some of these productions a second wind at the box office. >> not only win an award that night but the awareness that appearing on the show can bring to the show, to people all over the world. it really is the fastest way we can spread a message about a show that's running right now on broadway to all four corners of the globe. >> reporter: "hamilton's" case, that message has been loud and clear. for its neighbors across times square, everybody's enjoying the benefits. for "nightly business report," i'm susan high school dropout turned hollywood hair master and what set jim markham apart was his midas touch for shampoos,
conditioners and more in "how i made my mill >> reporter: hair products are jim markham's passion. >> nice texture. >> reporter: and profession. >> i love it. it's >> reporter: jim created his latest hair care line, color proof, with wife cheryl. >> just because we've done it before doesn't mean that you can do it again. >> we're survivors. we're persistent. we'll not lose. >> reporte >> repor as a kid the attitude came in handy, especially when jim found himself a father and a husband for the first time at a very young age. >> ended up getting married at 15. had a child at 15. >> reporter: markham enrolled in barber school and in 1967 opened a small shop in albuquerque, new mexico, that also sold hair products like those created by his friend the celebrity stylist jay sebring.
>> he got paul newman, steve mcqueen, frank sinatra. >> reporter: august 1969 brought devastating news. >> i heard on the radio jay sebring and sharon tate killed. >> los angeles and the country were shocked to learn of a grisly trail of murders which included the death of the actress sharon tate. >> reporter: tate and sebring murdered by followers of charles manson. the brutal killings that haunted the nation accelerated markham's career. >> when he was killed, i was the only one that could take over. >> reporter: he helped run s sebring's company for several years. he concentrated on women's hair care. they worked together, as they still do. >> i don't love it. >> reporter: avva, their first feminine hair care line, hit the market in 1989 thanks in part to a loan from cheryl's father. >> her father loaned us $150,000. we took it down to zero. then the company started coming up. it's like any time we could have
failed. >> reporter: eight years later they'd made dad's money back and accepted an offer to buy the business. >> we thought, wow, you know. sold the company for $20 mill we can retire. then we realized, there's way more to life. >> reporter: at the turn of the 21st century they headed back to the lab to invent yet another hair product hit. this one called pureology with new technology that helped protect color-treated locks. >> the fact that it started to keep color in longer was a surprise. >> we did $57 million our sixth year. lawyer yell offered us a lot of money and we sold. >> reporter: it was enough to buy this southern california home with incredible views overlooking the pacific. and a few other big-ticket toys. but still not enough to make these serial entrepreneurs want to retire. >> it's got to go in the shampoo, it's so good. >> reporter: markham's fifth product line color proof began rolling off assembly lines in
2012. four years later, its retail sales cover around $44 million a year. >> every product i ran always was much better than the one before. i've been doing that all my life. i won't give up. >> just keeps doing it over and over. one of jim hark markham's early secrets to success was offer free haircuts to celebrities, a risky move that paid off. once they got hooked he charge $55 a cut in the mid '70s, about $250 in today's market. speaking of millions he'll have to pay up to have lunch with billionaire investor warren buffett. his annual lunch auction has drawn offers exceeding $2.5 million. the bidding on ebay, which ends late tonight, has already topped last year's winning bid. the proceeds go to a san francisco-based charity that helps with the homeless. that will do it for "nightly business report." i'm sue herera. thanks for joining us. this is the time of year that
>> a huge week in politics. a history making turn for hillary clinton. and stumbles and setback,for bernie sanders and donald trump. we examine the fallout tonight on "washington week." >> thanks to you, we've reached a milestone. the first time in our nation's history that a woman will be a major party nominee. [cheering] hillary clinton seizes the gold ring. she collects big endorsements. >> i don't think there's ever been someone so qualified to hold this office. >> i am ready to get in this fight and work my heart out for hillary clinton to become the next president of the united states. >> and she immediately sets her sights on her fall competition.