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tv   Nightly Business Report  PBS  July 6, 2017 5:00pm-5:31pm PDT

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this is "nightly business .eport" with tyler mathise power and protest. world leaders head to germany are greeted by demonstrators, but not before trump promoted u.s. natural gas exports in russia's backyard. >> triple digit decline. it wasn't just one thing that dragged down the stock market. instead, it was many. >> and behind the wheel. are you driving one of the safest cars on road today? "nightly business report" forg thursday, july 6th. >> good evening and welcome. stocks were traded today and you can have your pick of the reasons why. some it's because interest rates are ticking up. others say it's because
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technology stocks slid again and so did energy. then there are those who cite today's lackluster economic reports then of course, there are rising geo political tensions overseas, but whatever the reason the dow jones industrial average drop 1258 points. s&p fell 22. >> and whatever the reason or reasons for the market slide today, lot of investors did have at least one ear toward europe. germany in particular, where world leaders of the group of 20 are meeting. they were greeted by protesters not uncommon at global meetings like this and certainly not unexpected in a town like hamburg. it has long been a town of for germany, president trump was in poland, where he explicitly endorsed nato's mutual defense clause after failing to do so during his previous umpen trip. he also made a veiled jab at russia. eamon reports tonight from ham
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berg. >> trump took to the podium in warsaw, poeland to cheland and forge stronger economic ties. >> we welcome stronger ties of trade and commerce as you grow your economies. and we are committed to securing your access to alternate sources of energy so poland and its neighbors might never again hold he would hostage to a single splir of energy. >> a message trump emphasized this morning pitching u.s. energy exports to europe as anal interpretertive to suppliers from russia, though never naming the down tri. >> we're here to launch a new future for open fair and afford bable energy markets that bring greater prosperity to our
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citizens. we are sitting on massive energy and we are now exporters of energy, so when ever you need energy, just give us a call. >> trump congratulated poland on its first shipment of liquefied gas and pushed the idea of a m contract. >> we can enter a contract for lng within the next 15 minutes. do you have anybody available? it will take about 15 minutes. >> the trump administration hoe to the there by reducing the u.s. trade deficit and boosting u.s. influence. >> he and the leaders of the euroastern european countries becam in warsaw are very interested in becoming energy that means natural gas independent of russia and all of europe becoming independent of russia to avoid to avoid this destabilization that the president talk. >> late today, trump arrived in
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hamburg as protesters gathers to demonstrate against the summit. police expecting as many as 100,000 protesters. a range of issue frs the middle east to. a topic that will be central to trump's meetings with president xi and president putin. both slated for friday. the official g-20 agenda includes meetings tomorrow on trade, climate and energy although all eyes will be on those meetings with putin and xi of china. >> while the global markets keep watch on these high level meetings in europe, there's another trend that investors ne continues to be put into passive index funds or etfs as opposed to actively managed ones that pick stocks and according to a new report, it's having an impact on the market. dominic chu explains. >> it's no surprise that
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exchange traded funds or etfs, have exploded in popularity over the last decaddecade. i investing, low fees and intraday trading ability, but is the etf business getting too big is this repor strategists at bank of america merrill lynch, index investing strategies now account for 37% of all stock fund assets held in america. that's nearly double what they had back in 2009. looking for another sign of just how big passive investing strategies have become? index pioneer now owns at least 5% stakes in 491 of the s&p 500 companies. what's more, vanguard now owns about 7% of the entire value of the s&p 500. back in 2010, it was only half that amount. all trading volume in the united states, so, with so much money tied up in etfs and other
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index related veinvestments, the are concerns t experi more volatility in times of stress as many could look to sell the same investments at the same time. index relating investing has slew of benefits for the investing public and has been advocating by managers an warren buffett himself for years, but could there be unintended consequences down the line because of it? time will . for "nightly business report", i'm dominic chu. >> to the economy now where american businesses did not create as many jobs last month as expecteded. the adp private payroll report for june showed an increase of 158,000 new positions. expectations were for 185,000. maybe they trans posed those numbers. just kidding. economists consider the report to be another sign that the economy is getting closer to full employment. the government reltv steel es its monthly employment report tomorrow. services sector expanded at
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a healthy pace last month. a sign the economy is gaining after a lackluster start to the year. the institute for supply management cited a pick up in business activity and new orders. service providers include everything from accounting to health care. the federal reserve is calling for an overhaul of the housing finance system. joerm pal said the current system is putting taxpayers at risk because the market is backed by government backed agencies with a high concentration of mortgages in fannie mae and freddie mac. treasury secretary has called housing finance reform a top priority. meantime, the cheshl real estate landscape could also reshaped by amazon's plan to acquire whole foods. just today, the etf that invested real estate investment trust fe its largest drop since early march.
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diana oleic has more. >> the amazon whole foods deal story, but the value of strip mall centers with a whole foods just shot up. >> if you have a whole foods center in place, more likely to see increased foot traffic and we would expect retailers would want to be around those. >> increased foot traffic will come from those who may have stayed away before because of higher prices. now, they have a reason to go. if prices are and maybe theye picking up some bedding they ordered on amazon. other centers with competing grocers are likely to see less foot traffic, which will hit the grocers, connect its stores and the real estate underneath even harder. >> you might see a degradation, situations where rent growth stagnates and at the end of the day, that's not happening because the best retailers are like ly to desire being near th whole fo center. >> these centers are owned by publicly traded real estate investment trusts, which could take a big rit.
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regency and wine garden are the most exposed to whole foods competitors. on the plus side -- like american assets could do very well. two competitors at an amazon whole food deal are unlikely to hurt are ethnic and value oriented shopping centers. they don't compete and underlying real estate for both should continue to see strong demand. i'm diana oleic in washington. amazon may also be eyeing another deal. there are reports today that the ceos of amazon and dish network discussed a partnership to enter the wireless business. according , amazon could help finance a network dish building focused on the internet of b thicks, which is the idea that evere internet. it is being reported that amazon could potential ly offer an lite bit more each month for a phone plan. no deal is imminent and it is not clear that the two companies
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will move forward. today, the stocks went in opposite directions. amazon lower, dish higher. still ahead, changes in the corn er office. why some of the most power 18 states have tiled a lawsuit against the secretary of education and her department. at issue is delay of an overhaul of rules that would help ease the federal student loan debt of borrowers. the rules have been b scheduled to take effect july 1st. she was critical of them and said she would establish a new committee, but the attorney
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general attorneys general are the laptop ave the ru ban for qatar airways and the airport in doha. it is the latest carrier to meet all requir department of homeland security's new guidelines. passages can now bring laptops into flights in the u.s. emirates and dubai and turkish airlines have also had ban lifted. the u.s. introduced the prohibition in march and it's still applies to u.s. bound flights from six other airports in the middle east and africa. it continues to affect five airlines. and there's another type of travel ban. one that has nothing to do with laptops. california's attorney general recently announced the expansion of a ban on state funded travel to four states he says discriminate against the lgbt community, it is setting up a different ktype of battle betwen states which usually fight over
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tax breaks and incentives, but in, california is claiming the moral high ground. scott cohn reports from silicon valley. >> this comes after a number of states passed laws regarding religious freedom and rights. now, california says it is banning state funded travel to four states it says discriminate against lgbt people. alabama, kentucky, south dakota and texas on top of already banned states, north carolina, mississippi, kansas and tennessee. >> to travel to these states at state expense would mean we would be using tax pare dollars states and we think it would be an offense to all the individuals in america who view the scourge of diskr disnation. >> the california attorney general says he's following a state law passed last year that he says requires the ban. so, has it had any effect?
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not much. the governor of texas says through a spokesman at california may be able to stop its state employees from traveling, but it can't stop all the businesses that are fleeing to state to go to texas. the governor of kentucky blasts what he called west coast liberals trying to dictate his state's laws, but the ma lo and lek ton, kentucky's largest cities, both asked california for exepgss from the ban citing their own cities protections, but california said no. the mayor of louisville says his city has lost $2 million in convention business already because of fears about the ban spreading. protest against state laws in the past have had limited impact after indiana passed its so-called religious freedom restoration act and businesses complained the state amended the law, but the law itself remains on the books. and s so-called bathroom bill, but the state still bars local
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municipalities from enacting their own disc bo many companies have been calling for inclusive state laws to help them attract workers, now, the states are battle lg it out in a nati culture clash. i'm scott cohn in mountain view, california. cities increase their minimum wage, missouri is preparing to lower it for st. louis. the governor says the hike to $10 an hour was a job killing mistake and next month, the minimum wage in that city will return to $7.70. the bill was passed by the state legislature to bar cities and counties from setting their own minimum wage above the state's minimum. qvc'sarent goes on a shopping spree. liberty interactive will buy the 62% of rival hsn that didn't own
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in a deal valued at $2 billion. it combines two television home shopping netwo a strong e comme presence. they will allow the companies to come pine and cut costs. shares of hsn jumped about 37% while liberty interactive fell. celgene will buy a stake in the chinese company to help development its treatment for solid tumor cancers. it helps expand its reach into the onkole ji space. it rost 27% to 66.28 and celgene was off 1% to 131.95. shares of l brand dropped after bigger than expected sales miss in june. the operator of victoria's secret and bath and body works said dropping swim wear and apparel categories had a negative impact on sales. l brands fell to 46.49. and costco posted a rise in
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month ly sales numbers, the retailer rept sal in june that's up 7%, but still percent ough for wall street. to 157.09. berkshire hathaway could be buying encore. according to the "wall street journal." last year, nex ra's was jekted by bidders in texas. shares were off a fraction. a fraction. $1950 a share to $255,550. and as we told you week, this was coming, but today, microsoft announced the a major shake up that will include thousands of layoffs. the tech giant said the cuts will mostly be in sales as the company aims to change the way it sells cloud services. shares of microsoft were off 51
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cents to 68.57. and endo international took its painkiller off the market. amid rising concern about addiction and overdoses. last month, we told you the food and drug administration asked for the drug to be removed. saying the benefits tho longer outweigh the risk for abuse. endo shares down 2% today . despite the departure of some of the top executives from ge and uber this career, pay is still great. accord to the research firm, ceo pay rose 6% last year. the highest it's been in three years, so why then things seem to be shaky for ceos? jp eggers, professor at new york university joins us to talk about that. welcome back. nice to >> thank you. >> tell me how you see this picture. maybe it is the size of the
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companies we've seen the turnover office? i'm not sure why do you think we're seeing so many ceos recently any way get booted out of the corner office? >> so, we have seen some very big high profile turnover events recently. the numbers look like they're profile nature of this is catching everyone's attention. these are big name companies who have been around for many, many years and many who have been mightily changes that have been going on in the environm solut and the performance has just not been there. >> how much of the change, jp, is traceable to the fact that some of these company's stocks have been b targeted by activists? >> so, certainly, one of the big things that can break the typical inertia would be an outsider coming in, buying up enough shares and pushing for significant change. the data seemed to suggest we're
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seeing more activists targets this year than we've seen in recent years. and that's going to have a significant impact on ceo turnover. problems, but see a hat ar turnover event as a chance to try a different path for the economy. >> i talked to an analyst who sukts that volatility at record lows, one of the only ways that activists investors can make a cig amount of money is not in the market itself, but by move ing the stocks of those companie >> this has been the most successful strategy for most. it's not simply playing in the it's actually having enough ownership and enough of a voice to actually affect cha it may take them a while to unwind the stock they own. but on for them, but this has
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been a tactic that's been more and more common as enough of these activists investors have got big war chests and can target these companies. >> so, are boards giing ceos less time to do what they need to do to fix companies? i'm think ing in the case of fod where mr. fields was booted out after three years. >> serply given the amount of change, the idea that within two and a half, to three years, you would expect to see clear progress, seems like too short . if that's where boards are bringing in new ceos, still a company that is looking to figure out its place in this kind of emerging technological landscape, if they think they're going to find that within two or three years or they're going to kick the ceo out, that's a really tough job for a ceo to walk into and certainly one that many people would not prefer to walk into at all. >> certainly. professor, thanks so much for
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joining us. he's with new york university's stern school of business. come up, speaking of cars, the safest cars on the road and the fastest one on the p >> illinois final ly has a budget. it's first full year budget after the state's house of representatives overroad the governor's vetoes of the spening plan and $5 billion increase in income taxes. the senate did the same. overriding the veto on tuesday. a new round of crash tests are shining a light on the safety of larger cars. while sales of tr have slowed years, automakers have been b
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working on improving their lebeau has the reses >> the bigger the car, the louder the crash. the latest test found half of the large cars tested passed with flying colors. in fact, the continental, e class and toyota avalenue earne top safety pick. >> large cars are a safer group by comparison to smaller cars and these test results affirm there are some good choices in terms of safety. >> one car that fail ed to earn top marks from the ihs ie tesla model s, the company calls it the safest car ever because it earned a five star rating following crash tests by the federal government, but the insurance institute does a slightlytest. in its collision of the front corner of the model s, the
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dummy's head hits the steering wheel. >> when we see that they failed to do that, that raises rrns about the risk of a head injury. in this case, we didn't measure forces so high that we would sasay it does or sure a hea raise concern that in similar crashes, some people's heads will be inadequately protected. >> tesla defends its car saying the most objective and accurate independent testing of vehicle safety is current hi done by the u.s. government. which found the model s and x to be the two cars with the lowest problem bability of injury of any cars it has ever tested, make k them the safest cars in history. whether it's the t s or any other large sedan, these tests reenforce a position long held in the auto industry. there is safety in size. larger cars are considered among
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safest on the road. the new sheron is the fastest road car in the world. buckle up because robert frank . >> in a world of expensive cars, there are sports cars, super cars and this. the car that defies the laws of both physics and economics. it's the fastest production road car on t planet. the top speed that remains a secret but goes well over 260 miles an hour. it's also the most expensive car in the world. starting at $3 million and has customize opgs like carbon fiber and your name engraved in led lights on the running board. 0 to 60 in 2.5 seconds with a quad turbo that's all internal combustion. in fact, if you drive this car
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flat out, you would drain the gas tank in swrus nine minutes. now, they plan to make 500 of these cars. they've already sold half. each takes six months to make. the u.s. is the large market and none of them have been delivered to the u.s driving today is one of the first and we are some of the first to drive it. the average buyer owns 42 vehicles, three private squets, three homters, one yat and five homes. >> our customers come from all different areas. business world, sports world, entertainment world, but all of them are extremely successful and very focused and i think you can tell they demand the best out of about everything they follow up car to the bay run. which had been the fastest car in the world and finished production in 2015 before this car was launched, they almost killed the program during its
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emissions scandal, but it was saved by their president. for "nightly business report," i'm robert frank in connecticut. >> i think if you can afford one of those cars, you can also afford the racetrack where you can run it full out. can't do it for long on the merit parkway. >> you're not. that's "nightly business report" for tonight. thanks for joining us. >> thanks ffrom me as well.
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this. 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 escape on the is


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