tv Nightly Business Report PBS November 29, 2017 5:00pm-5:31pm PST
>> announcer: this "nightl bitcoin breakout. the rally in the crypto currency speeds up. it's all the talk on wall street. should buyers beware? fear of missing out. is that what will push the market further into record territory? all real estate is local. but if you own a less expensive home, you might be in the money. those stories and more tonight on "nightly business repor for wednesday, novembe. good evening, everyone. the dow closed at yet another record today. more on that in a moment. but we begin tonight with bitcoin, the controversial crypto currency. you may know what it is. you may not. but today, everyone was talking
about it, from people at bars, taxi drivers, to warren buffett. even katy perry. the front page of "the wall street journal" had something to do. bitcoin has had a meteoric rise. today it zoomed past 11,000, surging more than a thousand dollars in just 12 hours. it is up about 1,000% since the start of the year. as quickly as it went up today, it lost some gains. retail investors are taking notice. now there's a push under way to create an etf. but as bob pisani reports, it >> reporter: bitcoin is up more than 50% this month, it passed today.1,000 mark before falling what's exciting investors is the expanding derivative market for crypto currencies. it's adding much-needed legitimacy to this whole space. last month ledger x, an
institutional trading and clearing platform, they began trading bitcoin options. that was a big advance. in and out chicago mercantile exchange, the cboe, and the nasdaq all are set to roll out bitcoin futures soon. this is good news. bitcoin futures will enable traders to short bitcoin. that's a welcome development. another piece of good news, with the passage of time there's more platforms, there'se part there's more maturity for these crypto currencies. does tha make bitcoin for example more valid? the sec says not necessarily. there have been several attempts to create bitcoin etfs this year. and they've all been turned down by the sec. the sec regulates etfs. here is the problem. the sec says bitcoin is an unregulated market and because of that, they won't be able to enter into any surveillance agreements between other relevant agencies like the cftc. you can't really blame the sec for being worried. if bitcoin is really unregulated, in the sec's eyes, it would be subject to manipulation and fraud.
and giving exposure to an unregulated mark supposs the sec to a lot of potential problems. it's possible that establishing a futures market might go a long way towards addressing the issue. maybe. but think about this. bitcoin itself was designed to be unregulated. while the blockchain has not been hacked, the platforms that support the crypto currencies have been hacked. and no one is necessarily watching over all those groups in a coherent regulated manner. so you could see why the sec is concerned. for "nightly business repor" m bob pisani at the new york stock exchange. jack howe joins us to talk about the frenzy behind bitcoin, he's a columnist at barrons. nice to have you here. >> nice to be here. >> what's your take on the meteoric rise in bitcoin
currency? >> i think you nailed it, frenzy. when a stock shoots up we ask what has happened to fundamentally change the value of the business. but this isn't something that can be traced to a business. it doesn't sit up nights thinking about ways to make itself more valuable. this is a purely speculative instrument. i think what's really happened here is in the early days of this, buying and bitcoins was restricted to hobbyists and some people with ill-begotten gains out there, we've all heard stories about drug trafficking and so forth using bitcoin. but now it's expanding to a more generalized money. people hear about friends making great money and they want to too. there's more exchanges popping up. we could see this frenzy continue for a while. when the time comes, when the people sitting to the left and right of you both own a bit of bitcoin, i suppose the party is over. but until then, there's no tellin. i was speaking yesterday to a couple of investment managers, and they said the question they
get asked more than any other is should i buy bitcoin, they're both equity managers. let's be clear. what is bitcoin? is it an asset class, is it a store of value, is it a means of exchange? is it all three? how legal is it? >> it's such an important question. they call it a crypto currency or a digital currency. look, the last thing i want from a currency if i'm saving money in the bank is to have a tenfold change in value in the space of a year. it doesn't have nearly the stability for that. it's not an investment, because it doesn't provide you any type of cash return. it's not a collectible, it's not scarce enough. so i really think bitcoin is the purest speculative instrument on the planet right now. the supply of it is controlled by a predetermined program that increases according t a formula over time. there's no government or central banks saying to themselves how much supply shall we create of bitcoin. it happens automatically. you've got a pretty tight constrained supply over time and just more and more people
wanting to buy in because they see others buying in. >> one of the things i'm curious about, and admittedly maybe a little bit worried about, is if indeed there becomes a futures market in bitcoin, or if there is an etf, as bob says there might be, in bitcoin, what is to keep my mutual fund or my money manager from buying that etf and exposing me to bitcoin? i mean, the individual investors may say, oh, i'm going to stay away from that. but if there's an etf out there or a futures market out there, they may inadvertently become exposed. >> y to ask the question of any fund you're invested in whether they have plans to buy this. we see excitement around names like the cme and nasdaq being attached to bitcoin derivatives. everybody says the institutional money is getting in. what these institutions are doing is they're attaching themselves to the transactions. they're connecting a fee here and a fee there.
they're not putting their own capital at risk. so i don't see a time right away when we're going to see institutions want to put up capital risk on something that has had this rapid run-up in price and doesn't attach itself to any fundamental peg of value. >> a very interesting point. thank you so much, jack howe with barron. technology and the nasdaq fell sharply. the dow advanced 103 points to 23,940. nasdaq off 88, big loss there, more than 1%. the s&p fell almost a whole point. despite today's mixed market, investors want to know if the climb higher for stocks will continue over the month and into 2018. mike santoli [ bell ringing ] >> reporter: after stocks' latest surge, a record high into
what's often one of the strongest months of the year, wall street is asking if a market melt-up is under way. a melt-up has no set definition but it usually describes a market where investors feast on good news and traders face the rally on the fear of missing out on the upside. the dow jones industrial ave is already up 20% this year. good news abounds. third quarter gdp growth is higher, corporate profits are up more than expected. consumer confidence hit a 17-year high. wall street has become captivated by the chances for a corporate tax cut. after going most of a year without pricing in the effects of a lower corporate tax rate, the market has placed more days in recent days on companies that will benefit most -- banks, smaller companies and domestic businesses. it would not be surprising if a sturdy but sometimes plodding bull market became more general rouse for a while. yet an alternative to the
melt-up scenario was hinted at. a rotation out of the huge global growth stocks that have done best through 2017, including the giants of technology. whether it melts high or in a big final flourish in 2017 or stalls from here, the market this year has been one of the most rewarding in history measured by the size of the gains compared to minimal downside pain along the way. as we enter 2018, the question is whether this is about as good as it gets. for "nightly business repor i'm mike santoli at the new york stock exchange. you know, it's usually all about the economy. and today investors learned that the economy grew at its fastest pace in three years. he >> reporter: the u.s. economy got an even better report card for the third quarter than the one that was first sent out. the government revised up its estimate of third quarter growth to 3.3% from 3% originally reported. it's the best economic showing since 2014 and marks the second quarter in a row of at least 3%
growth. the cnbc rapid update estimate for the fourth quarter shows forecasters expect the economy to remain strong in this quarter as well. fed chair janet yellen, in what was likely her final testimony before congress, said today it looks like the economy is hitting another year. >> the economic expansion is increasingly broad based across sectors as well as across much of the global economy. i expect that with gradual adjustments in the stance of monetary policy, the economy will continue to expand and the job market will strengthen somewhat further, supporting faster growth and wages and incomes. >> repor yellen's big concern is the inflation goal. she sees early signs that wages for average americans might be fed in its report on regional economic conditions said labor markets were tight around the country. it found, quote, many districts reported that employers were
raising wages as well as increa their use of signing bonuses and othenwage benefits to retain or attract employees. the next economic report card comes a week from friday with the november jobs report, the last one before the fed meets. as of now, they will likely raise interest rates in mid-december in response to better economic growth. for "nightly business repor i'm steve liesman. the government report on gdp also showed that corporate profits are near an all-time high. adjusted earnings rose more than 4% in the third quarter to an annual rate of more than $2 trillion. that's just slightly below the peak reported back in 2014. financial services companies accounted for two-thirds of the increase. home sales bounced back in october, pending home sales, which are contracts signed but not yet closed, rose thanks to pent-up demand from hurricanes in the south. but sales in the rest of the nation were not as strong as record low supply pushed home prices higher, especially where demand is the greatest. diana olic
>> reporter: buyers came back to the housing market in october. but not everywhere. it was mostly in the south, where they've been sidelined during two major hurricanes. the northeast and midwest saw small gains. but the west did not. and that's because supply is tightest in the west and prices are high. inventory is at the lowest since 1991 nationwide. that's when the realtors started tracking it. and prices are heating up even on the low end, where supply is lowest. is seeing price gains at f the twice the pace as the top third, according to zillow. nationally, prices are up 6% compared to a year ago. but on the bottom third they're up over 8%. on the top third, barely 4%. the same is true locally. in miami, the bottom tier of the market is seeing prices up nearly 10%. but the top, up just over 2%. in boston, homes at the top of the market are seeing prices up 4.5% and at the bottom, up 8%.
and in atlanta, price gains at the bottom are three times what they are at the top. so if you own a cheaper home, you're seeing your investment gain in value much faster. of course you only realize that gain when you sell, which very few homeowners seem to be doing today. for "nightly business repor m diana olick in washington. oil prices fell for the third straight day as investors try to figure out wheth world's major oil producers will reach a deal to extend production cuts. steve sedgwick is in vien >> reporter: a big day of shuttle diplomacy for oil ministers in vienna on wednesday. what's at stake is all the gains that have been made over the last 12 months to drag prices from the low $40 a barrel level up to above $60 a barrel. it's been a largely successful strategy for opec and their nonopec oil producing allies, including of course the key biggest player in the world, russia, which currently produces over 10 million barrels a day.
they took 1.8 million barrels off the table every single day over the last 12 months. the question is how long they need to carry on doing that strategy to get the market into where they believe there is balance between supply and demand with lower inventories. we understand various options were put on the table today at the joint ministerial monitoring committee here at the opec secr in vienna but no common path going forward. paths could include a nine-monthly rollover to the end of 2018 or a review of the strategy at the half year stage well. what remains to be seen is whether we'll see accord between all these ministers at their meeting thursday here in vienna. oil markets are watching. any fudges could see prices go right back down again. steve sedgwick for " still ahead, why the ceo of at&t says he is digging in his he
at&t's ceo is ready to fight to win approval for its merger with time warner. randall stephenson reiterated his case for the $85 billion deal as the justice department alleges the get-together would break antitrust law. he spoke today with becky quick at t. >> this particular case, the department of justice chose to file the suit, and so we see absolutely nothing in this case that is anticompetitive, lawfully anticompetitive. and so as a result, looking at the facts of the case, we feel like we have a darned good case,
and we feel like this is one worth taking and pursuing into the courts. >> julia boorstin is following the story from a media and technology conference in new york. so julia, what is the scent about what this might do to deal making in the industry? >> reporter: well, tyler, here at the business insider ignition conference there's been a lot of talk about what's next for media m&a. i spoke to the discovery ceo, david zazlov. he says there will be more vertical deals, similar to the proposed deal between at&t and time warner. he says the distributors will be looking for an advantage. >> more and more they need great content to differentiate. >> reporter: does that mean you would be interesting to selling to one of them? >> no, but i think it meanes -- it's possible. it's possible. what's more likely is, the reason we bought euro report, the reason we bought the olympics, the reason we're buying scripps, is all that content we ownfo
>> reporter: lachlan murdoch also spoke here today, dodging questions on whether he's interested in selling part of fox. he says the subscale businesses, not including fox, need to merge to compete. sue and tyler? >> julia, there was another big media story today, and that is matt lauer of nbc news. he was fired from nbc news for inappropriate workplace conduct. but the "today" show, which he was one of the co-hosts of, is one of the most profitable of television franchises. how big a financial blow is that to the network? >> reporter: look, it's still too soon to say exactly what kind of changes will be made at the show. but matt lauer was fired and it is a major shakeup for the "today" show. nbc's chairman andy lack saying a complaint against lauer was followed about you a colleague and prompted a review. lack said, quote, while translation the first complaint about his behavior in over 20 years he's been at nbc news, we were presented with reason to believe this may not have been
an isolated incide lauer was one of the highest paid men in television news. last november, nbc signed a new two-year deal with lauer to continue paying his salary, a reported more than $20 million a year, into 2018. lauer is credited with helping nbc maintain its lead among the morning shows in the valuable 25-50-year-old demographic. the show has more than 4 million americans tuning in daily. the "today" show brings in far more ad dollars than its rivals. the first two hours of the show which lauer co-anchored, generating over $610 million in ad revenue just last year, according to cantar media. this comes just a week after a rival show, "cbs this morning," fired charlie rose also following the allegation of misconduct. we'l have to see if this changes anything in terms of ratings and ad dollars, et cetera. >> julia, thank you, a busy day in your world. julia boorstin in new york.
comcast, the parent company of nbc universal which produces this program. chipotle is searching for a new ceo. that's where we begi the founder is stepping down from his role as chief executive over of the burrito chain. the company has formed a search committee and says ells will become execuma once the replacement is found. an e. coli outbreak devastated the restaurant chain in 2015 and the company has struggled to win back customers ever since. after six quarters of decline, tiffany's reported a rise in same-store sales in the americans, saying there was strong demand for lower priced items and high end diamond pendants. sales in foreign markets slipped with the exception of china. but the company still topped expectations for profit and revenue. shares were off more than 1.5% to $92.55. american airlines is
scrambling to find pilots for the upcoming holiday travel season after a computer glitch allowed every pilot to take vacation at the same time. to remedy the scheduling issue, american airlines is offering pilots a 150% of their hourly pay as an incentive to work those dates. shares wer a tick to $49.25. nokia reportedly preparing a takeover bid for juniper networks. after the bell, cnbc reported that nokia's potential deal would value the networking company at about $16 billion. nokia's shares initially rose in the extended session but finished the regular day down a fraction at $5.02. meanwhile shares of juniper networks took off on the news and ended the regular session up 5% at $29.61. after the bell, the apparel company pvh said sales rose above its own guidance even at the company's north american businesses, impacted by the hurricanes. pvh says it sees continued strength in its calvin klein and
tommy hilfiger brands and it's raising its full year 2017 outlook for earnings and sales. shares initially higher in after hours. they closed down marginally in the regular session at $137.14. coming up, dri >> reporter: self-driving cars, electric cars. the newest models turning heads here at the los angeles auto show. that c" preside of a wealthy area in san francisco are getting their street back, literally. the city's board of supervisors overturned the 2015 sale of
presidio terrace, a privately owned street used about i a few dozen homeowners. the residents did not realize their homeowners association had not paid a $14 a year tax bill for decades. a couple then purchased the street and its sidewalk for $90,000 two years ago. last night the agency said the city's tax collector was at fault and not the residents. this week, the l.a. auto show kicks off with the latest cars and suvs from automakers around the world, and increasingly the cars come with the technology to do some or all of the driving. phil lebeau is in >> reporter: with all the glitz and glamour you would expect in southern california, the l.a. auto show shines with luxury models loaded with new technology, like bmw's concept car, the i-vision dynamics. >> it is a taste of the future. a lot of the will be reality.
it's being worked on as we speak. >> reporter: the a-8 is an established model for ferrari, updated with features that allow the car to do more of the driving. >> i'm sitting on the 405, gut-wrenching traffic, bumper to bumper to bumper. i'm incredibly distracted, pho. accidents can happen. that's what can be avoided by this technology. >> reporter: california is ground zero for the development of self-driving cars. it's not surprising almost every automaker is working on autonomous drive technology. even though we pay not see self-driving cars for several years. >> a realistic time frame could be 2021. >> reporter: you believe the market is ready to embrace this? >> absolutely. i think there is a lot of people who like to use their commute time for something more productive than sitting and watching the steering wheel. >> reporter: while electric and autonomous vehicles may dominate headlines, americans still want their suvs, which is why subaru
is rolling out its first three-row suv. sales of new cars and trucks remains robust, with few in the industry expecting a drop in demand. phil lebeau, and that is "nightly business for tonight. i'm sue herera. we would like to remind you that this is the time of year your public televs support. >> i'm tyler mathisen. we thank you for your support. have a great evening, everybody. we'll se.
>> this is "bbc world news america." funding of this presentation is made possible by the freeman foundation, and kovler foundation, pursuing solutions for america's neglected needs. >> planning a vacation escape that is 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 island with warm, sunny da