Skip to main content

tv   Nightly Business Report  PBS  June 27, 2017 5:00pm-5:31pm PDT

5:00 pm
this is "nightly business report" with tyler mathisen and sue herera. >> policy uncertain thety. the senate delays its vote on the health care bill and stocks slide. record buy. google is hit with with a multibillion dollar antitrust bill. could there be more to come? gas prices are supposed to rise this time of year, but that's not happening and there's reason to believe they could go even lower. those stories and more tonight on "nightly business report" for tuesday, june 27th. good evening, everyone and welcome. i'm sue herera. tyler ma a record fine for google. more on that in a moment, but we begin with the market and the swift reaction on wall street to news that the vote on the senate
5:01 pm
health care bill will be delayed. leadership has been pushing for a vote ahead of the july 4th recess, but now, that's going to take place after that. the president called senate republicans to the white house for a meeting this afternoon as majority leader mich eer mitch said extra time is needed to get more support for the bill. >> we're going to continue the discussions within our conference. on the differences that we have that we're continuing to try to litigate consequently, we will not be on the bill. this week, but we're still work s dipd midday and least 50 stay eed lower. the dow jones fell to 2131 0. nasdaq off 100 and s&p 100 fell 19. european union has slapped
5:02 pm
alphabet's google unit with a record fine.e r alle google is taking advantage of its dominance in online searches to direct customers to its online shopping business. shares fell more than 2% and if dwoog l doesngoo, it will have to pay more. google's don't be evil culture is far from its practice. according to the european union, which announced its biggest ever fine, more than $2.7 billion. a possible warning shot to the world's biggest tech companies. the eu says google abused its position at the dominant search engine, giving its own shop ipi service top billing in resulti far less valuable real estate down the list. >> they've used this dominance to promote themselves and demote rivals. goo consideri an appeal, says competitor sites are not harmed by its practices. claiming shoppers quote prefer
5:03 pm
links that take them places thep. the eu is basing its case on research using more than 1.5 billion searches. i says google began to give an advantage to its own service back in 2008. and since then, traffic on google shopping spiked 45 time ts his high ner the uk. 35 times i germany and rose by factors of 29 in the netherlands and 19 in france. the eu blames google for corresponding traffic drops to certain sites. down as much as 92% in germany, 85% in the u kurks k and 85% in france. alphabet's eu problem won't end with the fine. separate investigations are continuing into alleged abuses involving google's android operating system, the way it handles local travel and map searches and how it uses copy wrighted material. the eu has battled the u.s.
5:04 pm
high-tech complex before. its previous record fine was handed down to intel in 2009, almost $1.5 billion. and a series of microsoft fines totalling more than today's fine means dominant tech players like amazon, facebook and others will be b watching to see whether alphabet fights the fine and what changes the eu can force on google. let's turn now to timothy les ko to talk more about how google's fine might affect other companies. he is the portfolio manager at granite investment advisers. welcome. >> thanks. >> tim, this is being called by some, a precedent setting event and fine by the eu. would you agri with that? >> oh, i would argue that perhaps the perez denrecedence companies for their sales practices may have started with
5:05 pm
microsoft, but the technology we're talking at now is far different from the bundling of internet explorers two decades ago. maybe it's precedent setting in a world of big data, but there are a lot of interesting side currents use of big data. zpl is it that the eu opposes the bundle or they're looking down the line at some of the now voice activated technologies that also might put some of their companies at a disvapg? >> well, i think you hit the nail on the head and when you search google, it's not to many here that when you search certain site, you're probably goin get their stuff first. the european union has long had a very hot button for anticompetitive behavior. where we here in the states you know keep an eye on it, but you're doing it in a marketplace that has continued to see drill prices down rather than up, to rather than monopolistic
5:06 pm
tendencies, it's more anticompetitive. i think the eu will continue to take a hard look at all companies. i don't think they're focusing on the u.s. particularly. we just happen to be one of the better exporters of technology. >> for alphabet, even though it's a big monetary amount, forral bah fe pha pha bet, it i. what about for other company, a microsoft, an apple and other tech companies that do business or want to do business in the eu. >> apple just went through its own slate with some tax issues in the european union. you have a s the companies are very large, so $2.7 billion fine for google where as the headline, it looks huge, but more difficulty would be what kind of business practices this forces them to change. in google, essentially, the product is the consumer. not what google is really selling. so, i think what they're really trying to hit off in the
5:07 pm
european union is google using your data. your search personal data or any you enenttered into your device isn't used for other purposes. i think that's always been a dividing line for companies like google and apple, where they charge you more more for the device. >> tim, thank you so >> thank y for having me. the president of the european central bank made some upbeat comments on that recent economy, saying the european economy is strengthening and that inflation is eventually coming. now strengthening and growing recovery in the euro area. the deflationary forces, have been replaced. while there arw fac weighing on the path of inflation, at present, there are mainly temporary factors that typically, the central bank can look throus that word
5:08 pm
reflation that got the attention of the bond market in europe and here in the u.s. causing yields to move hire. the international monetary fund is cutting its qulout look for the u.s. economy. they cited broad uncertainty on fiscal policy, including the president's plan to cut taxes an increase infrastructure spending. the imf also said the downgrade was due to an ageing american growth b and a labor market back at full employment. consumers grew more confident in june. according to the conference board, americans expect the economy to continue expand ng the coming month, but don't forsee the pace of growth accelerating. and in theory, the better people feel, the more they spend and consumer spending maybes up a large chunk of economic activity. >> well, the red hot housing market may be starting to cool a bit. a new report today shows prices are still climbing tom pair the gains appears to be slowing and that has many asking
5:09 pm
if the run up in prices is sustain bable. diana oleic takes a look. >> the latest gains on the s&p case-shiller home price index hit a new high, but were slightly smaller expected. the national index rose 5.5% down from 5.6% in march. these are prices that were recorded on closed sales in april, sales that were negotiated in february and march. the supply situation has only gotten worse due to higher demand in the market. seattle, r portland and dallas reported the highest gains in prices and seven cities had bigger increases in april than in march. s&p's david blitzer raised the question in his release of a potential bubble or crash. but then knocked it down saying that demand and employment still support the prices for now. we're also not see iing the kin of housing boom we s decade. professor robert schiller told me he does not believe home prices are too high.
5:10 pm
in fact, he shows that adjusted last housing boom.y're bel still, these prices are a bit old. a new deman reach ed another record high in may with e bu requesting home tours and a bigger jump in the number of buyers writing offers. i'm diana oleic in washington. coming up, vicious virus. companies worldwide were victim of a new cyber attack and it seem. a global cyber attack today hit companies and goths across
5:11 pm
the globe. computer systems in europe, russia and the u.s. were struck leave iing chaos in its wake. >> the trump administration offering support today as this sweeping global cyber attack continues to affect xaeps around the world. take a look at a list here of all of the different countries where companies and enter the is have reporteded they've been victims of this attack include ng the ukraine, a number of different xaeps and enter the is in russia as well. a state owned oil firm in the u.k., advertising and the law firm said they were hit in the united states. merck in france and in denmark, also, companies reporting they had been hit by this attack. here's what the department of homeland security had to say. they said they're monitoring reports of cyber attacks and coordinating with our international cyber partners. we stand ready to support requests for assistance. upon request, they provide
5:12 pm
support. information shared with dhs in part of these efforts is confidential, so the u.s. government offering its support here, but one of the problems e case of to come up in a sib r ransom wear where the hackers lock down the data or steal the ta ta and demand payment in r to get it back is that companies often do end up paying. that's why ransom wear continues to exist. if companies didn't pay, there would be no ransom wear. someone is paying because companies view tha data as so important and so expensive the rememb replicate they thin paying the hackers is a better deal. that goes against better advice from professionals, but those professionals aren't the same people tasked with running businesses. >> so how damaging is this attack to u.s. corporation can they protect themselves from future attacks?
5:13 pm
leo is the chief security office at the data center firm and a former fbi agent in charge of the cybersecurity operations division in new york. welcome, leo. nice to have u yo here! what is your perspective on that latest attack? it was wide ranging. it was global. and i found it interesting that it wasn't one speck type of company or area of company. it was all sorts of different corporations. >> right, so the reports on the number of victims, different types of victims and different geographic locations point out that the perpetrators may not have understood the exact consequences of unleashing a cyber tool that was reportedly developed for offensive purposes. so, what we have is the unintended consequences it appears of the perpetrators in
5:14 pm
this case releasing something that they didn't fully understand. >> how prepared do you think most and i know this is a tough question to answer. most u.s. corporations are if r to type of an attack i think most have increased their capability. the problem that large corporations have is they don't have absolute control over every part of thinker infrastructure, so, despite very robust attempts to protect their infrastructure and launch spending on problem, there remain pockets of weakness and figuring out those to identify where the security controls need to go is a significant challenge for u.s. corporations. >> and i see, you made a point in my notes here, we have seen mergers where companies buy other companies and you inherit the company that you bought. and their security methodology. >> right. so, certainly, the acquisition
5:15 pm
of a company or a set of infrastructure from a company introduces new risk. connecting to something that's not fully understood presents a challenge and this goes for our partners as well, so we have third party vendors that we connect to. and we basically inherit large part of the risk that they are facing as well. >> what about aymeamon's point about paying ransom. is it a good idea to do it? he made the point gathering or replicating the data these large corporations have is very expensive, if they can even do it qukly enough. so they pay the ransom. good idea or not? >> well, a company has to make that decision based on the best interests of operations. the general advice from the fbi and other law enforcement agencies is not to pay ransom because it funds further activity and research and development. it allows these criminals to perfect the tools they deploy
5:16 pm
against us u, so the general advice is not to pay, but each business has to face that decision on its own. certainly if it's a decision between rating and nothing, the business will make the practical choice to pay the ransom. >> thank you so much. darden restaurants hikes dividend and that's where we begin tonight's market focus. the parent of olive garden said it would r divide 12.5% to 63 cents a share. this follows the company reporting better than expected revenue held by same store sales. profit also stopped expectations an shares row rosed to 92.69. sprint is reportedly in talks with cable providers charter communications and comcast regarding a potential wireless partnership. accoreport, sprint has the brakes on merger talks with t-mobile as it continues a two month long period of negotiations with charter and comcast. shares were up 2% to $8.18.
5:17 pm
shares of chatter communications were lower as were comcast. which is the parent company of cnbc, which produces this progra merck said its cholesterol drug drurg a trial lower ed the risk of hark and death in risk of cardiovascular issues. they said they're still considering whether it will file for approve. its first plans fell. shares fell to 65.54 and kb holmes reporting a rise this sales. the homebuilder cited higher prices and rise in deliveries. profit was a beat and the company said it was raising financial targets for full year. shares rose in after hours tlading and ended the regular session slightly higher to $22.82. are you getting away this weekend? if you are, and it's by car, you could be in for a treat wh acorying to gas buddy, for the
5:18 pm
first time in 17 years, gas prices lower on the fourth of july than they were on new year's day. that's a dramatic turn around from previous estimates. >> for drivers, this could be a summer to remember. gas prices are at record lows. just in time for the holiday weekend. consider the peeks of the summer driving subpoe national average for a gallon is $2.25. that's down 12 cents from a month ago and six cents lower than it was at this time last year. the decline comeing after crude sin the beginning of the year, crude oil prices are down just over 17%. gasoline prices down just less than 12%, what that means is that refiners have been b fattening up margins, but we know gasoline is down quite a bit and all to do with crude oil. >> exprts say gas prices could drop even further. seasonally, this is when demand
5:19 pm
is strong and autumn is when we see it all off. if prices do fall, it could mean crude could see the 30s even the 20s again. >> this plb will be b the first time that ga t fourth of july are lower than they were on new year's since 2001, so we know that gasoline prices are low. you're waiting for them to go lower, i'm not certain i'd do that. cheaper gas, mers can take investors may have less to worry about. some say lower crude prices might not be a drag on the broader stock market. they have in the past. that's because big oil is doing t managing this envit and companies that use oil may save on a key cost. coming up, one state, two labor issues. we'll take a trip to california wher
5:20 pm
just one day after an activist investor took a stake in nestle, they announced to buy back in just over three years. also on coffee and bottled water. they say the plan is the result of a review that began this year. it did not mention the activist stake in its statement, the wri didn't happen, but there is a chance an actor's strike might. e deadle is friday and hollywood could be bracing for a major work stoppage. julia borsen has more from los angeles. >> action. >> hollywood studios are on alert after they narrowly
5:21 pm
avoided a writer's strike that could have crippled the entertainment industry. now, the screen actor's guild is inching close tore a potential companies expires contract with friday night. the guild is asking its 160,000 members working in television and film to authorize the strike. as it seems to increase payment as the rise of shows on netflix and amazon result in shorter seasons and lower long-term compensation. >> actors, writers, directors get what are called residuals, royalties when shows are rerun or reuseded. one of the concerns the actors have is are those going to be sufficient in the year of netflix. formulas are differe what they were used to with network television. >> the writing, quote, we have presented reasonable proposals to address the critical concerns faci our members that are integral to making a living in
5:22 pm
this industry. studios, which said it's immediate blackout if negotiations continue. and they could continue past the deadline as both sides look to avoid a strike, they could see actors walk off movie and tv sets. a work stoppage would have an immediate effect on cbs, fox, disney and comcast. entertainment attorney says a strike could cost the industry anl econo $200 million a week. >> in terms of the effect on the fall season, the broadcast season, that's the big question. if the strike started, it would probably be around july 15th and can't go too many weeks after that without stade the fall season. >> while streaming services would see their show production disrupted by a strike, their deep libraries of oler content could find new viewers if television shows are delayed on the netw >> that potential strike isn't
5:23 pm
california's only labor issue. the supreme court decision to allow president trump's travel ban to take limited effect throws yet another ingredient into the debate on immigration and its impact on business and jobs. also in the mix, the administration'sry newed focus on visas for tech workers. they're feeling it in silicon valley where scott cohn is tonight. >> it is personal. >> i am spent almost a decade if not more in the early part of my career going through various immigration statuses and i saw firsthand the challenges, the pitfalls of the broken system. >> today, he is a citizen and president of fresh works, a software company with 1,000 employees and 100,000 customers worldwide. and b he says he couldn't do it without foreign workers. >> it comes in the way of your ability to fill critical goals.
5:24 pm
to do business. >> silicon valley is one of the biggest users of hi3 visas, a program to let companies hire workers from overseas. also big user, new jersey, massachusetts and delaware. at a time when as many half as half of employers nationwide and here in silicon valley are having trouble filling skilled positions, companies are aggressively using foreign workers to fill the gap, but the trump administration has other forward, it's going to be only america first. >> the entire h 1b program is under review. also apparently out, a visa program tailored for start ups. for the first time in years, the volume of applications is down. the biggest inckcubator firm,
5:25 pm
they're worried. >> it's a delicate ecosystem that employees all of these people in america. you start changing and negatively impacting immigration laws, it's easy to change the environment here and stroi it. >> but the former congressman who wrote the law says companies are mi syst cheaper workers at the expense of americans. >> unfortunately, there's a lot of double talk on this. everybody wants to see our economy grow. part of having the economy grow is getting the immigration system right without competing unfairly with americans. >> even this silicon valley, most agree the the things these companies need most the brain power. if they can't get it here, "nightly business report", i'm scott cohn in san jose, california. and finally tonight, a birthday celebration. the world's very first atm located at a barclays branch in england turned 50 today. since its inception in 1967, the
5:26 pm
machine's popularity has grown exponentially, becoming an indes ensable part of daily life. there are 3 million located around the world. can't believe it's 50. that is "nightly business report" for tonight. thanks for joining us.
5:27 pm
5:28 pm
5:29 pm
5:30 pm
this is bbc world news america. funding of this presentation is made possible by. the freemen foundation. and coal fuller foundation pursuing solutions for america's neglected me. planning a vacation escape that's relaxing inviting. and exciting. is a lot easier than you think. you can find it here in aruba. families couples and friends can all find their escapen


info Stream Only

Uploaded by TV Archive on