tv Nightly Business Report PBS June 5, 2017 5:00pm-5:31pm PDT
this is "nightly business report" with tyler mathisen and sue herera. busy week. stocks don't seem to get rattled by much. but could several events change that this week. concerned ceos. they represent an important sector of the econ and today travel executives pay close attention to the president's tweets. targeting cancer. there's a shift under way in how researchers want to treat the disease, resulting in some new success stories. those stories, and more, tonight on "nightly business report" for this monday, june the 5th. good evening, everybody. i'm bill griffith in tonight for tyler math i sglen and i'm sue herera. well, this could be it. a number of events this week both domestic and global could
test the market's resilience. stocks have been melting up, trading near record levels, despite some of the recent upheaval and uncertainty. in the days ahead, a jam-packed economic calendar, hearings on capitol hill, and elections in europe have the potential perhaps to reshape that landscap bob pisani takes a look at the road ahead for investors. >> on the surface, everything looks calm for the markets. major stock indices at or near historic highs, bond levels at the lowest levels since the election last november. but two big events on thursday could be market movers. the british elections, where it's still not clear if last weekend's attack at the london bridge will send sentiments toward or against incumbent theresa may. james comey will testify before the senate intelligence committee how his agent sip assessed russia's role in the november election. he will certainly be asked if president trump asked him to end
the probe of former national security adviser of michael improving european economy, draghi is not expected to raise rates. we'll watch for any signs for a change in thinking. finally, the fed meets next week. despite soft economic data, recently traders are betting there is a 96% chance the fed will raise the rates another quarter point. bob pisani at the new york stock exchange. as pob just mentioned, the british election on thursday is on the minds of investors here and across the globe. it follows the horrific terror attacks over the weekend. the country's third in as many months. we have the report tonight from london. >> a vigil on the banks of the
river thames to remember those lost in saturday's terrorist attack in london. this as campaigning for the country's general election once again heats up after taking a brief pause out of respect for the victims. >> while it was right that we should pause to show our respect to those we have lost, and responding to the immediate aftermath of those events, it is also right that our way of life and our democratic process should go on. >> it's no surprise that security has remained top of the agenda, with just three days left until polling day. prime minister theresa may has tried to frame her opponent as being soft on police powers in the past, while he's hit back for her cutting police numbers when she was home secretary from 2010 to 2016. >> you cannot protect the public on the cheap. the police and security services must get the resources they need, not 20,000 police cuts.
>> either way, politicians of all sides have increased their rhetoric on preventing terrorism. prime minister may laying out the role the internet plays. >> that is precisely what the internet and big companies that provide internet based services provide. >> reporter: under the spotlight are messaging services with end-to-end encryption, like facebook's what's app. recently the home secretary described as completely unacceptable that the government could not read such messages. aside from hosting the vigil tonight, the mayor expressed his anger at the motivations behind the terror attacks. >> i'm angry and furious that these three men can justify their actions by using the space that i belong to to justify their actions.
the ideology they follow is perverse, it is poisonous and there's no place in islam. >> reporter: he also said that london would not be cowed by terrorism. for "nightly business report," i'm wilford frost, london. by the way, following that attack, facebook said it wants to make its social media platform a hostile environment for terrorists. in a statement, facebook said, and i quote, using a combination of technology and human review, we work aggressively to remove terrorist content from our platform as soon as we become aware of it, end quote. and separately, twitter is also working to tackle the spread of militant propaganda on its website saying it has no place on its platform. meantime, in the middle east, four arab states cut diplomatic ties with qatar. saudi arabia, the united arab emirates, bahrain and egypt want to isolate the persian gulf over policies toward iran and military groups.
that rift was felt in the oil markets as traders grew concerned that the split could impact the deal to reduce oil production. hadley gamble has more tonight from riyadh. >> reporter: it's certainly the most severe diplomatic crisis to face the country since the gcc's inception some 38 years ago. the uae, bahrain and saudi arabia as well as egypt calling out qatar saying they've been supporting terrorism and they're closing the borders, blocking air and maritime space with the saudi airlines, all suspending flights as of tomorrow morning. a country that depends at least 90% on imports to make ends meet. this coming a few weeks after what is lauded as a major victory for u.s. president donald trump in the region. it was his first major trip abroad. he came to saudi arabia first and talked about bringing the muslim world together. efarlier we heard from rex
tillerson saying the u.s. was open to being a mediator. >> we certainly would encourage the parties to sit down together and address these differences. if there's any role that we can play in terms of helping them address those, we think it is important that the gcc remain a unified. i do not expect that this will have any significant impact, if any impact at all on the unified fight against terrorism in the region, or globally. >> reporter: it comes at a sensitive time for the united states, with four major military installations in the gulf arab countries. two in qatar, and air base and army base as well as another air base in kuwait and fifth fleet in bahrain. qatar has had a questionable foreign policy for years. supporting the muslim brotherhood after the egyptian revolution back in 2011, as well as hamas leaders and even hosting a diplomatic mission for
the taliban. another sticking point the country's media outlets as well as al jazeera. while the geopolitical implications could be the more immediate problem, a longer term issue will be economic relations in the g shutting down air travel between the uae, saudi arabia, bahrain and qatar could have major implications for the private sector. a group already hit hard by two years of lower oil prices. for "nightly business report," i'm hadley gamble in riyadh, saudi arabia. despite these geopolitical tensions, stocks closed with just modest declines today. one market watcher said that investors were growing cautious given the upcoming events later this week that we just talked about. the dow all of a sudden lost about 22 points, closing at 21,184. nasdaq was down ten, the s&p down three. with all the major indexes still near records, there seems to be little that can rattle this mar
mike san tolly takes a look at why. >> the stock market signature move lately has been the shrug. stocks seemed to shrug off any bad news while investors shrug in confusion over why nothing seems to disturb the rally. neither the terrorist attacks, dimmer holds for fiscal policy moves and falling treasury bond yields that seem not to matter much to stocks lately. for most of the bull market, low interest rates have a slow economic expansion, converted into decent stock prices by the market. this year it's been more of the same. the world remains saturated with cheap money, which continues to find its way into financial markets. the central banks of the u.s., europe and japan combined continue to grow their holding bonds at a brisk clip for now. all these factors have allowed investors to take the lack of visible progress from the trump economic agenda in stride. of course, it's worth asking what might be out there to disturb this resilient bull
market. they're watching the bond market for signs of stress. many bond fund managers say they see little value in this market and overall debts on company books are high. the potential risk, the market could keep barreling higher for a good while longer and get the federal reserve worried about the hazards of a financial bubble. strategist bank of america and merrill lynch argued this could become a growing threat if it would rise another 8% or 10% fairly soon and the fed felt it needed to cool off speculator speculation. investors will confront former fbi director james comey's congressional testimony, a uk election, and a european central bank meeting, all of those on thursd. if nothing else, these events should test the market's ability to keep shrugging off
distractions in what has been a relentless upward march. and michael farr joins us to discuss how all of these events could shape the markets this week. he's president of the money management firm farr, miller and washington. good as always to see you, michael. welcome back. >> thank you, sue. nice to be here. >> we laid out the case of what might be able to influence stocks. but you say at this point, given what's lying ahead for the market this week, investors need to be very cautious. >> well, i've been saying that for a while, sue. and geez, i listened to the list and listened to rick santoli and everything else, everything was in there except for the kitchen sink. i think of all of the things that maybe we should be concerned you know, i get simple when things are complicated. stocks have been high for a long ti we haven't had any significant correction in a long time. this is also, i've heard more people call for a market top than i can even remember.
and the market top just won't happen. so you get into one of these periods where you say, well, maybe the market's never going to go down again and that's usually when you're about to lose. yes, i say be cautious. i think these conditions probably can't go on forever. but complacency is really an enemy at this point. >> you don't sound like you're putting money to work right now then, is that the case? >> i always am, tyler. but if we get fresh cash today, i can't market time -- certainly the market could go up, continue to climb, this wall of worry. there is ample cash. and interest rates continue to be low. but there are still some bargains out there. but i am really cautious. and if you look at the returns this year, five stocks, apple, google, microsoft, amazon and facebook have produced about a third of the market's overall return. you didn't own those, you're up about 6%. you owned them, you're up 9.5%. leadership is being
concentrated. you need to make sure that you know what you own, why you own it, and that these companies have real earnings and real balance sheets. there's a lot going on this week. thursday i'm watching for comey's testimony. i think that that could be a game changer here. of course, you know, we made the mistake last year of presuming that the brits wouldn't vote for brexit, and they did. you can never trust a british election. >> you know what, it is one of those weeks that has the danger of being an inflection point, if you will, for the market. >> no question. >> if you are a long-term investor and you have decent gains, in some of the stocks that you just mentioned, do you take some money off the table, as almost protection against the whipsaw? >> i think what you have to do, sue, when markets get like this, and you know that it's -- that the risk goes higher, you have to go back to your investment plan and your asset allocation. maybe your stock position has gotten too large. maybe your goals have changed and you've gotten closer to the
time when you should retire and perhaps a little less money in stocks, a little more money in bonds. check your investment discipline. make sure that you haven't moved outside of your investment policy. and that you can stay with what you have for five or six or seven years. if you need money for the short-term, it should not be tied up in long-term investments. do it now before you have to. >> good advice, as always, michael. thank you. >> thank you. still ahead, the president calls his executive order a travel ban, but executives in the travel industry call it something else. president trump is doubling
down on his travel ban. in a series of tweets, the president said it was a mistake to revise the first order he signed, and suggested the white house should issue a much tougher version. he tweeted, quote, people, the lawyers and the courts, can call it whatever they but i am calling it what we need and what it is. a travel ban. the white house and other members of the president's staff have insisted in the past that it was not a travel ban. the president's tweets are not going unnoticed by the travel industry. and the renewed talk about a travel ban comes as many high-profile executives attend one of the year's biggest hospitality conferences. susan lee spoke to them. >> call it what it is, a travel ban. the u.s. president's also asking for an supreme court hearing on the watered down version of his travel ban. and promising extreme vetting of travelers. it may deter people from making
trips to the u.s. in the future. >> sometimes these tweets that come out early in the morning, talking about a travel ban, they are very blunt. there's no nuance in it. there's no welcome in it. >> reporter: it's one of the biggest threats to a booming travel industry, with record tourist arrivals to the u.s. last year, and forecast to grow for the next five years, according to the u.s. commerce department. a longer term trend that's being underpinned by global spending. >> people want to travel. people are valuing experiences today, more so over goods. and so that trend, having more middle class travelers in the world today than ever before is providing part of that resiliency. >> reporter: terrorism is another threat to travel. with seven killed and nearly 50 injured in this weekend's tragic attacks in london, the third in the uk in as many months, tourist numbers to britain may drop off in the near term. but won't impact travel around the rest of the world.
>> i expect notwithstanding these tragic events, and they're terrible for the people of the uk, that we're going to have a reasonably good year. that the impact will be isolated. >> reporter: in fact, despite over a dozen deadly terrorist attacks in the last two years in western europe, the region was the most popular place to go in this year's first quarter. another sign that you can't keep travelers away for too long. for "nightly business report," i'm susan lee at nyu's international hospitality investment conference. at the white house, the president outlined a plan to privatize the nation's air traffic control system. such a move would take the job out of tracking and guiding planes away from the federal aviation administration. the president called the current system antiquated and stuck in the past. >> after billions and billions of tax dollars spent, and the many years of delays, we're
still stuck with an ancient, broken, antiquated, horrible system that doesn't work. other than that, it's quite good. >> commercial airlines have long supported the idea of privatizing air traffic control. and the air traffic controllers union is also generally supportive of that proposal, saying it could make the system more efficient. this is part of a broader week-long push to push various infrastructure proposals. by the way, things are looking up for the global airline industry which raised its profit forecast for this year. the international air transport association which represents more than 200 airlines says it expects travel demand to increase as the worldwide economy looks to post its strongest growth in six years. alphabet breaks a thousand. that's where we begin tonight's market focus. alphabet launched its ipo back in 2004 as google. and today the parent company of
the search engine passed the $1,000 threshold, just a few days after amazon did it. alphabet finished at $1,003.88. nutrition supplement company herbal life said they see the revenue falling as much as 6%, cited weakness in the mexico market. herbal life shares were off nearly 7% to $68.99. during the annual developers conference, planning to offer amazon prime video service on its apple tv platform. and said it is making improvements to its ipad and mac books, and will offer a more enhanced version of the siri service on the apple watch. apple was down to 153.93. dex com saw shares rise after apple said improvements
made to the watch will make it more compatible with dex com's glucose monitor. those two products will connect through bluetooth. dex com shares was $71.19. drugmaker mallencroft shares were hit after known short seller citron research criticized the top selling medication. they said an executive at express scripps which is a distributor called the drug overpriced for its value. mellen croft shares down 5% to $40.49. coming up, if you can figure out what makes a cancer tumor tick, can you then figure out how to treat it? well, some researchers say yes.
toyota quietly sold its entire stake in electric carmaker tesla. it marks the end of a partnership between the two companies which was first announced back in 2010. toyota's stake amounted to just under 1.5% of tesla as of last summer. the japanese automaker said the sale was part of a regular review of its investments. by the way, if you own a tesla, you may start paying more for insurance. national insurer aaa is reportedly raising its prices for tesla's model s and x, citing higher than average claim rates and repair costs for the two cars. according to automotive news, premiums could increase by as much as 30%. thousands of doctors, researchers and medical company executives are meeting at the biggest cancer research conference of the . and this year there's a big shift in the way cancer is being targeted. meg terrell is in chicago.
>> reporter: for decades, cancer has been treated with surgery, radiation and chemotherapy. but in recent years, major strides are being made in targeting drivers of cancer more precisely. the benefits for that approach were on display this week in chicago. the world's largest cancer research conference. >> that takes us away from the general idea of saying, gee, is it a lung cancer, a breast cancer, colon cancer, but to ask the question, does the tumor have this dna repaired. >> reporter: one major step forward, just weeks before the conference, merck received approval for its cancer drug. for the first time a drug was approved based on an underlying driver of cancer, rather than for the specific location of cancer in the body. >> it's the first time that the fda has approved a therapy across many different tumor types, based on a molecular definition. >> reporter: that same philosophy led to one of the conference's major success
stories, a young biotech company with a rare mutation driving cancer. >> it's almost a key in a lock phenomena. it's such a specific, dramatic effect, that the patients know it right away. they feel better right away. their symptoms get better right away. >> reporter: but delivering targeted therapies requires people with cancer are tested to see what genetics are driving the disease, something josh said doesn't happen frequently enough. >> if there's one takeaway or call to action i would love people to hear, is get your tumor tested. figure out what is making it tick so you know what is the right therapy to be matched to your tumor. >> reporter: it brought updates in immunotherapy, that unleak the body's own immune system. with the new advances come new potential costs. the price of cancer medicines continue to be a theme at the conference. >> there's been a lot of work including by asco to link the prices of drugs and treatments to how well they work. but there's general resistance
to it, because companies when they have their product, they want to extract as much as they can from it, even if it doesn't provide big benefits to patients roesht as cancer care evolves, so, too, does the question about how to pay for it. meg terrill in chicago. that does it for us tonight. i'm sue herera. this is the time of year your public television station seeks your support. i'm bill griffith. we thank you very much for your support. have a great evening. we'll see you tomorrow.
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