tv Nightly Business Report PBS April 24, 2017 4:58pm-5:29pm PDT
this is "nightly business report" with tyler mathisen and sue herera. strong start. the dow rises 200 points. the nasdaq hits an all-time high. as investors around the world cheer the results of the french election. risks to the rally. could a government shutdown stop the bulls fast in their tracks? open house, why this may be the strongest sellers market ever. those stories and more tonight on nightly business report for monday, april 24th. good evening, everyone, welcome. what a way to start the week. the rally started overseas for stocks. when the opening bell rang here on wlgs, stocks took off and didn't look back. the reason, what some investors considered a worst-case scenario in the french election didn't happen.
true, a far right anti-european union candidate will move into the contest final round in two weeks. but her competition and the current favorite to win is a pro-business euro-friendly centrist and not a far left flame thrower. more on the french election in a movement. the markets liked that outcome, and investors plowed money, big-time, into riskier assets like equities and pulled it out of safer ones like gold and government bonds. here are today's numbers. the dow jones industrial average climbed 216 points to 20,763. nasdaq hit a record up 73 points, and the s&p 500 added 25. but before you breathe a big sigh of relief, the market still faces some big hurdles. here's bob pisani. >> market risk declining, you would think so watching the market reaction to the french election.
here's four major market risks. the markets are telling us that there was some risk associated with the french election. with north korea looming, as a threat, geopolitical risk is still very much present. second, weaker economic data. still high risk to the markets in my opinion. we're expecting an aneeming first quarter growth of 1.1. generally they've been weaker like retail sales. first-quarter economic data has been weak for several years. third is the high valuation of the stock market, and the risk from disappointing earnings. that risk was high, but it's lower now. first banks, now industrials, generally reporting earnings above expectations. a half dozen large industrial names, not only beat earnings, but raised full year guidance tlsmt's a risk that fiscal reforms will not be working and will be pushed out. president trump's tax comment last week that a massive tax bill is coming this week is
falling short obviously. it's only going to be a statement in principle by wednesday. we need the details. the bottom line here is there's still plenty of risk for stocks. the atmosphere is definitely improving. for "nightly business report," i'm bob pisani and the new york stock exchange. let's take a closer look at some of the risks bob just pointed out. we begin with the impetus for today's rally, the french election. but what happens next? michelle caruso-cabrera is here tonight. >> across paris and around france, voters lined up to cast their ballots for who they believe should be the next president of france. for many, the decision was made at the last minute. when did you decide? this morning? >> last night. >> reporter: this morning? marine le pen and emmanuel macron came out on top.
his camp not getting ahead of itself. >> we will see what will happen in the following two weeks. you can have a lot of events during the campaign. so we're very cautious. we didn't open the bottle of champagne. >> reporter: but the markets sure did, rallying around the world on the belief that macron is a shoo-in to win the second round in two weeks. >> i think what we just had was the first part of one of the most important elections in europe since world war ii. >> reporter: important because this vote is about the future of the euro, and the european union. macron embraces both. he also wants to loosen the strict labor laws. other european leaders fear marine le pen, because she wants france to leave the euro.
and she supports policies favorable to lab several of the other candidates have told their supporters to vote for macron. while the markets cleared, many young people protested. the followers of melenchen -- >> there's a very heavy police presence here tonight because so many young people came out in protest to the vote. they don't like either of the candidates. they say many of them that they're not going oh vote at all. are you going to vote? >> no, i'm not. >> reporter: why not? >> because i don't want to choose between somebody that is bad to something that's worse. >> it's making everyone really tense right now because it's like choosing between, you know -- >> reporter: regardless those are the choices when they return to the polls in two weeks. for "nightly business report,"
michelle caruso-cabrera, paris. >> other geopolitical risks include syria and north korea. they put banking and other sanctions on 270 employees of a syrian government agency. the u.s. says the people many of them scientists were involved in developing and producing chemical weapons. the sanctions are in response to the deadly chemical weapon attack the u.s. says the syrian government unleashed against its own people earlier this month. >> in response to the recent syrian chemical weapons attack, president trump called out the united nations for failing to act. he made the comment at a meeting at the white house with members of the united nations security council. the president also discussed the global threat posed by north kore >> the status quo in north korea is also unacceptable, and the council must be prepared to impose additional and stronger sanctions on north korean nuclear and ballistic missile programs. this is a real threat to the
world. >> the trump administration is preparing to brief the senate this week on north korea. the market is also paying attention to fiscal policy out of washington. and this week could be a big one with potential movement on tax reform, health care and the government funding deadline looming. john harwood is following all the developments from our nation's capital. the president has promised a big announcement wednesday on one of his signature issues, tax reform. and there are now fresh rumors about what that corporate tax rate may be. what do we know? >> reporter: well, we know that president trump has told his aides he wants to stick with the 15% corporate tax rate that he proposed during the campaign. that's been out there for a long time. it's even lower than house republicans want to go. donald trump is telling people that he's going oh stick with that. now, we don't know how much more detailed beyond things like that we're going to get on wednesday. he took his aides by surprise by saying it was going to be
released next week. and so we have been cautioned to think that while maybe this will be a general statement of principles, rather than an actual plan, but trump has shown the capacity to surprise and he may be having his aides work overtime to spell it out. >> what about health care part two? >> reporter: health care part two, sue, is no closer to the finish line than it's been before. remember, it was taking fire from both the left and the right of the republican party. conservatives said it was too much like obamacare, more moderate republicans said it would throw too many of their constituents off of health insurance. now, the way that they've been trying to cobble together a compromise is using states' rights to let some states do it one way and other states do it another way. but we have no indication yet that paul ryan wants to risk a vote this week, because he knew that he fell way short last time. there's no reason to think he's about to get over that finish line. >> and of course, the government
funding deadline comes up on friday night. there are a lot of sticking points, including whether money will be included to do some work on president trump's signature item, the border wall. what is the likelihood that a deal gets done and that the government keeps functioning? >> reporter: this is one area, tyler, where i think there will be a deal. it could be just a one-week deal to continue the government funding, and continue negotiations and keep it open. but i think in the end, they're going to have a republican/democrat compromise on spending at the expense of president trump's priority for the wall. he is not saying that he will veto any spending bill that doesn't have wall money. democrats are drawing a line there. and they're the ones with the leverage because if there's a shutdown, that is going to fall on the shoulders of republicans who control the white house and the congress. >> john, thauf. john harward in washington. investors are also focused on earnings. this week is one of the busiest of the season. and with the nasdaq near 6,000,
attention will be on results from the biggest sector of them all, technology. josh lipton tells investors what they can expect from a few of the big names. >> tech's more than double-digit gain this year makes it the market's best performing sector. the big day will be thursday, that's when amazon, microsoft, alphabet and intel all report results. one big theme this quarter will be the ongoing war in cloud computing, which is an area all these companies are looking to for growth. amazon is the dominant supplier of cloud technology. last quarter, that part of its business did not perform as well as some had hoped. one worry is that amazon is now dealing with greater competition from the likes of microsoft. ceo nadela has now built one of the biggest cloud businesses in the world. capitalizing on its history of working with large companies. microsoft could also benefit
from signs of stabilization in the pc market, which recently returned to growth for the first time in five years a that could also prove to be a big tailwind for intel. the pc business still represents nearly 60% of that chip giant's revenue, but investors will pay closer attention to its data center operation, or sales of chips for servers, because this is traditionally the weakest quarter for that business. finally, there's alphabet. investors will focus on core google operating margins, which last quarter saw a decline. that's a key measure of profitability. investors will find out thursday if that trend has continued. for "nightly business report," i'm josh lipton, san franc. we discuss what all of the cross currents we've been talking about could mean for the stock market and your investment. he is chief market strategist at wunder lict securities and he joins us now. hello, art, good to have you with us. the french election, let's start there with the french election.
did you or your colleagues do anything different today in response to those election results? did you sell anything, buy anything, change anything in your overall strategy? >> we did see a lot of clients that weren't doing anything last week, or buying a little protection, or shifting into things like the ten-year. i think that's natural, right? we've got a large binary event that could have a ripple effect to it, if the election had gone a different way. understanding that we haven't been very good at predicting these things. i think you saw the safety trades unwind. and a lot of action in the early trade. >> we have a number of issues coming up this week. the tax plan, maybe health care, the possibility of a government shutdown. are any of those events more investable than others, in terms of picking stocks within those particular areas or sectors? >> i can tell you this.
so the policy agenda certainly has been a stock market moving event. so when you say as early as last week we talked about this taking time and really pushing the agenda out to 2018, you saw what happened to the market pretty quickly. he comes back in and says, we're going to have something next week and it looks like we're getting closer on this, that pulls that policy agenda back into 2017 and the market reacts positively. what i will tell you is it's not a lot that we can get something on repeal and replace. without repeal and replace, you can't get as much tax reform done. i think the market is working its way into that rationalization. i think that in terms of the government shutdown, we've been here before, right? and to the extent that harwood put it exactly correctly, they want to get some sort of deal done at the 11th hour because they don't want to own the government shutdown.
that's not going to be the legacy they want in the first hundred days. >> it occurs to me even if there aren't in i home runs this week, what business will look at is an administration that is much more business friendly and less inclined to put new regulations in place that might hamstring busines business. tell me what your base line portfolio is for an average investor and how often you rebalance it? >> that's a great question, tyler. i think that's right. with all match nations, whether it's the implementation of fiscal policy, deregulation, infrastructure, through all of that, i think your long-term vef should be thinking about a plan and sticking to it and ignore some of this noise. whether that means for us, we like 60% stocks, 30% bonds right now and 10% cash cushion. we like to rebalance that on a quarterly basis. that way you stick to your plan. you don't make panicked
decisions that sold in front of the u.s. election. people that sold in front of the french election. stick to that plan. you have to rebalance because your proportions are going to be out of place here. you're overexposed to stocks and you can cycle that through. have that plan and stick to it and pay attention. >> great, art. good advice. thanks. art hogan. still ahead, make me an offer. that's what buyers are doing, and what some are calling the hottest spring selling season ever.
the supreme court has rejected general motors' effort to block lawsuits related to the company's ignition switches. those suits could expose the automaker to billions in additional claims. the decision to reject gm's appeal means that a lower court decision stands. and that decision sent gm's 20009 bankruptcy did not shield it from liability in some cases. in a statement, gm downplayed potential legal exposure. it said, quote, as a practical matter, this doesn't change the landscape much in terms of the gm litigation. medical device maker dickinson, it will acquire cr bard for $24 billion in a deal that will add new products to bechton's portfolio and help it create treatments. bechton also said the merger
will help sales overseas, particularly in china. shares were off about 4.5%. cr bard was up 20%, or nearly so, to $302.41. a drug mark is alleging mi lan engaged in illegal business practices to make its life saving epipen more affordable for consumers. they said mylan offered rebates to insurers and medicaid, under the understanding that the treatment wouldn't be eligible for co mylan shares rose nearly 2%. and santa fe gained 4% to $45.90. has bro benefited from strong demand for digital games, as well as licensed products like nerf and transformers. we've got a few of those at my house. it was the first time hasbro has beaten mattel in quarterly sales since the year 2000.
the shares popped nearly 6% to $101.70. global retail sales at caterpillar turned positive for the first time in more than four years. they said a surge in buying activity in asia helped offset weakness in other foreign markets and caused machine sales during its latest three-month period to rise. the company is expected to report earnings tomorrow. caterpillar shares rose more than 2% to $96.81. whole foods may go private. albertson's is interested now in taking over the high-end organic grocer. the private equity firm owns albertson's and is said to have approached bankers about making a potential offer for whole foods. albertson's bought safeway for $9 billion about two years ago. shares of whole foods up 2% on the session to $36.46.
amazon selling furniture on the platform easier. according to a trade publication, amazon won't mandate the furniture sellers offered nationwide shipping in order to be included on the amazon website. sellers will be able to list their products on the site, choose what areas they want to ship to, and also select what delivery services are offered. wayfair fell more than 5% to $43.48, while amazon gained almost 1% to $907.41. express scripts reported earnings that grew and beat expectations. but its revenue was light. the company also upped its profit outlook for the year and said it would likely lose its largest customer anthem. once their contract expires in 2019. but if the two companies do cut ties, express ceo said the company will still be in good shape.
>> we feel this actually shows the strength of our core model and the value that we've got. you know, as we look forward, we've got 2900 clients, we'll service, if anthem were to ultimately leave as they've seemed to have decided, we'll be servicing over 65 million americans. we will have a tremendous amount of scale in the supply chain. i think working on behalf of the clients, we have a tremendous future. >> express scripts shares initially fell after the bell. but ended the regular session up 1% at 67 1/4. spring home buyers were out in force over the weekend, but a lot of them came up short. diana olick talks about why it's unlike any other. >> reporter: it's a three-bedroom, two-bath home in burbank, california. nice enough for sure, but the first open house drew over 100 potential buyers in barely three
hours. >> i've been selling real estate for 25 years, and this is the strongest sellers market i have ever seen in my entire real estate career. >> reporter: real estate agent david fog already had three offers on the home before he opened the front door for the sunday open. >> current inventory levels are at all-time lows. there's fewer houses for sale. there's more buyers than houses on the market. >> reporter: the number of listings has been rising with the spring temperatures, but the supply of homes for sale at the end of march was still nearly 7% lower than a year ago. and demand is higher, especially among young renters. >> pretty bad right now. not even the height of summer yet. we have yet to see one that sold for under asking price. >> reporter: cash is king in this market and prices are hitting new peaks each month. >> we've been overpricing it. it west way over asking price.
we could weigh contingent sis. >> reporter: like the appraisal. >> in a rapidly increasing real estate market, the sales prices are always ahead of the appraised value. so, therefore, you really look for those cash buyers who can make up for the shortfalls. >> reporter: not everyone can do that. this family of five is trying to upgrade from their two-bedroom, one-bathroom home. >> ideally we would love to get into a 4/2. it's pretty much slim to none. >> reporter: they're considering putting an addition on their current home. current homeowners may be able to sell their homes easily, but the price to move up is steep. so more and more of them are staying put. and as they do, that means there are even fewer entry level listings available. for "nightly business report," diana olick in washington. >> to read more why this may be the strong spring season ever, head to our website nbr.com.
coming up, high-tech tools to capture the bad guy. i'm julia boorstin. taking a look at all the cool cutting edge technology used to fight crime, including unmanned aerial vehicles. that story coming up on nightly business report. finally tonight, law enforcement has a new partner on the beat. the tech sector. julia boorstin got a firsthand look to how it's being used to fight crime. >> reporter: forget stun guns and body cams. the next generation of gadgets
are designed to prevent police from being in the line of fire. while helping protect the public. gunshot detection systems can pinpoint the exact source of gunfire. while another system shots gps enabled darts to attach to and attack fleeing vehicles. the captain at the los angeles sheriff's department said no matter what the cost of the new technology, if it saves lives, it's worth it. which is why they're using more high-tech gadgets than ever. >> the technology improves almost on a daily basis. so we use it more now than we ever have before. the robots are better. you know, they function better. they do more things that they couldn't do in the past. the costs have actually come down. and they're indispensable. >> reporter: they've been deploying all sorts of robotics, most recently these unmanned aerial vehicles, for everything from bomb threats to
search-and-rescue to active shooter situations. these drones give law enforcement eyes from ab and it's not just robotic cameras in the air, they're also sending robots into dangerous situations on the ground, and even robots for underwater search-and-rescue. >> we used it in a situation, a tactical situation where someone was firing a high-powered rifle from a house into a community. and we were able to use this technology to see exactly where that gunman was. >> reporter: and back at the station there's powerful software which helped police file reports and keep and evaluate statistics. startup mark 43 said it saved a quarter million hours of work for police in d.c. alone. the less time spent filing paperwork, the more time those police can spend on public safety. for "nightly business report," i'm julia boorstin in los angeles. fascinating stuff.
i never thought i'd see the day where the french election was really determining what happened on wall street. but to let's take a look at that rally on wall street. the dow climbed 216 points, nasdaq hit a record up 73 points, and the s&p 500 for good measure went along for the ride rising 25 points. it is so good to be back together. >> nice to be back together. it's been a couple of weeks. >> two and a half weeks. all right. that's it for us tonight on "nightly business report." thanks for watching. >> i'm tyler mathisen. have a great evening, everybody. we'll see you back here tomorrow night. we'll be together again. >> yep.