tv Nightly Business Report PBS December 22, 2017 5:00pm-5:31pm PST
>> announcer: this is "nightly busi with tyler mathis holiday home stretch. the last minute push for gifts is giving brick and mortar stores an advantage over online retailers during one of the busiest shopping days of the year. california leavin'? why some residents are thinking about moving out of e largest u.s. state economy. and bogus bordeaux. about to crack open a bottle of wine for the holidays? be careful, it might be a fake. those stories and more tonight on "nightly business rep for friday, decemb good evening, everyone, and welcome. i'm sue herera. tyler mathisen is off tonight. it is one of the most important times of the year for the retail sector, and this weekend is likely one of the
most critical for brick and mortar stores. with the last minute push to buy gifts, many will be heading out to the malls or local shops for fear that packages won't be delivered on time. in fact tomorrow is super saturday, one of the busiest shopping days of the year. and it falls at the tail end of the holiday season in which most retailers earn a sizable chunk of their holiday sales. courtney reagan caught up with last minute shoppers at the queens center mall in. >> reporter: if you haven't chd off your christmas list yet, you are far from alone. >> i just started, because i work all the time, so today is my first day of shopping, i'm not even close to being done. i'm stressed. >> none of it's done. we're just getting started and i have two days to finish it. >> reporter: half of u.s. consumers are expected to hit the stores in the final hours before christmas. last year consumers took advantage of deals starting early in november. >> my holiday shopping has been pretty okay, except for those few hard last minute people.
here i am. >> i come to the mall at the last minute, the prices go up and you have to spend a lot more money. >> reporter: tomorro expected to be the second busiest day of the year for stores. so far today, at the queens center mall, traffic has been picking up as the hours have worn on. tomorrow, the is opening at 8:00 a.m. and stores are staying open for 35 straight hours. the last saturday before christmas is always critical. nicknamed super saturday, it's even more important for last minute shoppers this year. with christmas falling on a monday, shipping deadlines were earlier, which means pr need to up in stores. >> today is the second day continuing in my shopping. i think i'm going to go tomorrow again. >> reporter: first data says holiday sales are up more than 6.5% since november 1st. couple the already strong season with the last minute rush, and an are upping their
optimistic forecasts. today and tomorrow are key times for the holiday season. typically 40% of holiday sales occurs between december 15th and the 25th. so today and tomorrow are outlie s in terms of importance and significance. >> this is what motivates me to do the shopping. >> reporter: not like the adrenaline of a ticking clock. courtney reaga hand elmhurst, w york. americans earned more and saved less in november. some economists are interpreting it as a sign that the holiday spending season is strong. and as for those who made purchases online, deliveries appear to be running smoothly. morgan brennan has a report card on the shippers. >> reporter: combined, ups and fedex are expec to deliver more than 1 billion packages by year's end.
add the u.s. postal service's 850 million packages, and the numbers are extraordinary. how is it all going? based on third party data from ship matrix, pretty well. performance for fedex ground last week was 98%. for ups ground, 97%, after some early hiccups after thanksgiving. s says demand for its services, quote, remains very strong. we have returned to our original chief operating plan, normal delivery time, and transit. fred smith says, quote, fedex is on track for a record holiday season. so far the company calls at it as for the postal service, last mile delivery which amazon uses heavily, has been on time 99% of the time and volumes have been higher than expected. for each of the sundays in
december, the government agency er ecasts 6 million package 10.5 million. while the cost to deliver all those shipments won't be known until earnings, overall operations do seem to be going as planned. for "nightly business r" i'm morgan brennan at well, with this year's holiday shopping season almost in the, we' looking ahead to 2018. what might the retail environment look and what trends could we expect to see? here to share some thoughts with us tonight is tom blyshock, chairman and ceo of the biologic >> great to be with you, sue, and merry christmas. >> merry christmas to you as well, and a great new year. it seems that 2017 was a tough one for retailers and one of disruption. does that continue into 2018? >> absolutely, yes. i think some of the changes we're seeing with people like
walmart buying jet.com, target buying shipped, we're moving into a different kind of retailing environment where retailers are going to buy capabilities. shoppers are moving more and more online. >> do you expect that this particular shopping season, as we finish out 2017, will be strong? that's what we're hearing, anyway. what are you hearing? >> i'm seeing a very strong shopping season. both online and in store. i do believe there will be a fairly interesting day tomorrow as shoppers rush to the store because of deals. i was at the stores earlier today, 90% off, 70% off. this is a tremendous time, a tremendous time to buy for the holiday season. >> now, what about shopping in 2018? you mentioned the migration to online. i assume that will grow expo
ne >> next year we'll see in the mid-20s. america has found convenience shopping online, whether from the couch, the office, or the home, has been something they like a lot. easy, expert, and fair. >> now, in terms of value, and in terms of pricing, you mentioned what you saw today. once the consumer gets used to thos to wait longer. will 2018 continue the discounting or the pressure on the stores to continue discounting? absolutely, yes. we have total price transparency. s in probably 300 different outlet stores this year. and i saw more smartphones than i've ever seen, people checking prices. what's going to happen next year is that this issue of price transparency becomes even more real. retailers are going to have to deal with how they serve those shoppers, same with manufacturers. >> what about the tax reform
package? the administration is saying it will give people more money in their pockets. they may see it as soon as perhaps february. what's the psychological impact for those who do see a little more in that paycheck? do they spend it, do you think? >> i think so. and i think we're already seeing it, you know, in chatting with a bunch of shoppers this morning after the tax package passed, they said, we're going to buy one more gift. i would expect that we would see some more spending next year. probably more for things like home appliances, updating the home, updating the car, updating clothes. it's been a long time since people had this level of euphoria. >> on that note, have a wonderful christmas, and a great new year, tom. appreciate it. >> you too. on wall street, meanwhile, stocks pulled back just a little bit ahead of the long holiday weekend. the markets are closed for christmas on monday. today the dow jones industria dow jones s fell 28 points to 24,754.
nasdaq was off five. s&p 500 lost one point. for the week the dow and the s&p posted a five-week win streak. this is also the start of the so-called santa claus rally. will santa be coming to wall street this year? bob pisani is . >> reporter: today marks the start of the so-called santa claus rally period, viewed as an old wall street indicator of market performan in the year to come. the santa claus rally refers to the tendency of the markets to rise in the last five trading days in december plus the first two trading days in january. it's been good for an average gain of 1.4% in those seven trading days over many decades. the failure to rise is thought to indicate the start of a bear market or at least some kind of pause later in the year. but some traders are saying, bah, humbug, after the year's already hefty gains. dow, s&p, and nasdaq have all surged 20% or more in 2017. 5% of those gains came just in the last five weeks. we have a tax bill, a government
spending bill done. in the absence of other catalysts, investo could be looking for excuses to sell. santa claus could be on his way with a little help from banks and industrials, sectors that would reap the biggest benefits from corporate tax cuts. for "nightly business r" m bob pisani at the new york stocexchange. purchases of new homes unexpectedly surged to the highest level since the great depression. th latest report shows demand for new construction remains strong across the country. sales of single family homes soared 17.5% in november and the number of properties sold in which construction had not yet started increased more than 40%, indicating that builders will stay busy in the months ahead. there are also signs that demand is improving for long lasting manufactured goods. goo 1.3% from the prior month, helped by purchases of airlines, cars, and military equipment. meantime at the white house,
th specialty signet sig into la the most consequential tax bill in decades, sharply cutting corporate taxes. today the president said it incl >> i consider this very much a bill for the middle class and a bill for jobs. and jobs are produced through companies and corporations. you see that happening. corporations are literally going wild over this. i think ev >> the president also signed the continuing resolut which will keep t and with the tax bill now the law of the land, how will it change california? the country's largest state economy. ja >> reporter: instead of california dreamin', more taxpayers are california leavin'. >> california's outward migration has bee increasg over the last few years. and the tax bill could make it worse. >> repor 105,000 more people
moved out of california than moved in last year, according to state realtors. that's three times more than five years ago. >> my next opportunity, my next career step, i'm looking elsewhere. >> reporter: 2 michael hutton is a marketing associate in l.a. his 61-year-old mom sandy is a retired executive in long beach. both will move in 2018. taxes are killing her, and he can't afford to buy a house. they're debating whether to move to texas or florida. >> they're growing states with excellent infrastructure, tax friendly. >> i can get a two-bedroom, one-bed house in tampa for $120,000. my mortgage would be less than my rent was in van nuys. >> reporter: most california answers will see their tax bills go down because they don't itemize. but this state has always had an exaggerated dependence on high earners who do itemize.
one study suggests 2 million of those californians will see their tax bills go up. at the same time, though, the state's tech giants will see their corporate taxes go down, which means they might invest and expand, although maybe not here. >> if you take a look at where apple and google are growing, outside of the bay area it's not in the rest of california, it's bowaulde it's to austin, it's to salt lake city. >> reporter: california's economy has grown more quickly than the rest of the nation since the recession. but an economic forecast from california lutheran university says its so-called growth premium will virtually disappear by 2019. the golden state's loss will be another state's gain. >> there are parts of california that just feed my soul. but i can always come back. >> reporter: sandy hutton says profits from selling her home means she can come back whenever she wants -- as a visitor. for "nightly business r" ja wells, long beach, california. s ahead, looking for some stocks that could benefit
from that tax bill? our market monitor has some inve. apple is facing some lawsuits over its policy of slowing down older iphones. as we reported, apple admitted to the practice but says slowing things down helps the battery life on older models. now two class action suits have been filed, one describes the practice as de sept immoral and unethical. the other says it harms users who did not agree to it. eric schmidt is stepping
down as president of google's parent, alphabet. he played a critical role in growing the company into something more than just a search engine. schmidt will r his role at the com but will continue to be a member of the board and a technical adviser. papa john's founder is also stepping down as ceo. but john schnatter will remain chairman of the company. papa john's has been in the headlines, the ceo criticized the nfl publicly last month for not resolving the anthem issue and blamed declining pro football viewership on a drop in its sales. papa john's is a sponsor of the national footbal league. there is also a change at the top of csx. the third largest railroad named jim foote chief executive, succeeding hunter harrison who died sud week just months into the company's
ambitious turnaround plan. csx's board says it's confident in foote's ability to lead the railroad. home depot is reportedly i'm going to xpo as a takeover target. that's where we begin tonight's market focus. home depot has been in talks with xpo in recent months regarding a potential merger. the report says if home depot does make an offer, it will be because it wants to keep that transportati and delivery company out of the hands of amazon. shar of xpo jumped 14% to $90.01. swiss drug maker roche is buying the cancer treatment maker ignita for $2 billion, giving roche control over gene therapy treatment that are in early indemnity. ignita's shares toward to $26.85. amazon is expanding its lineup of in-home devices with its latest deal to buy security camera and smart doorbell maker
blink. amazon bought the startup for an undisclosed amount. the deal appears to be complementary to amazon's existing service for its prime members, which lets delivery personnel walk right into the home to drop off packages. amazon's shares were off a fraction to $1,168.36. and unitedhealth group says it has signed a definitive agreement to buy chilean health company banmedica. united's shares were off just a fraction. time for our weekly market monitor who has three value picks he says will benefit from tax reform. it's his first time on the program, so we're going to welcome ernesto ramos with bmo global asset management. nice to have you here, welcome. >> thank you, sue, happy holidays to you and our viewers. >> yes, absolutely. you basically favor right now value over growth because of
valuation concerns in the market, correct? >> well, that and other reasons. the tax reform will have a huge impact on u.s. growth. we think conservatively speaking, it's going to add close to 1% to gdp growth over the next few years. so that favors the value sectors because they are more cyclical, financials, energy, materials, industrials are more the value stocks, where is technology, utilities, real estate, et cetera are more on the growth side, and those are not as favored by tax reform. so that's one of the reasons we like value stocks right now over growth. >> let's get right to your picks. valero, the symbol is vlo. it trades at 18 times, and it has a >> exactly. and when you combine the valuation plus the dividend, it really is a company that is very attractive, especially when you compare it to treasury yields at 2.4% or 2.5%.
the story with valero is very simple. they used to be very focused on growth and growing capacity. and now they've turned their focus to very much a cash flow story and a disciplined approach to spending capital. the market has loved that, that's why the stock has done what it's done over the recent past. so it's a story of becoming much more disciplined in the way they spend money and returning more money to shareholders. >> let's go to your next pick, which is bank of america, bac. you said you bought it after the president won the election, and you say it scores in the top 20% of the universe, interesting. >> well, so we have a very complex scoring system. we score 10,000 stocks worldwide, 4,000 alone in the u.s. at bmo global asset management. the key for bank of america, it benefits from a few trends. first of all, it's got a 30% effective tax rate.
that will go down of course with tax reform. it benefits from deregulation of the financial sector, of course. and it's benefiting from the fact that they've become much more conservative in their approach to lending. their mix is now much better at 50% retail and 50% commercial. and they're returning an additional $5 billion on top of the $13 billion of capital to shareholders over the next 12 months. so it's a great capital return story, like valero in that respect. >> last pick is walmart, which is perfect for this time of year. and you say it actually scores in the top 12% of bmo's universe. >> yes. and walmart is not as cheap as the other two, it's about 22 times. but walmart is the -- pretty much the leader in -- or the most effective competitor to online retail amongst the brick and mortars, because they've expanded their online presence. just the last 12 months, their
online sales grew 50%. they're the only ones competing with amazon effectively. they've introduced free shipping, free two-day shipping in orders over $35 to compete with prime. and with the acquisition of jet.com, they acquired the technical knowledge and management to effectively run their online presence. >> we have to leave it there, ernesto, thank you so much for joining us, ernesto ramos with bmo global asset management. >>c chu takes a look at stocks that were left behind in the rally. >> reporter: we look at the stocks that were cast out, like the land of misfit toys, except now it's the land of misfit stocks. check out what's happened with financials, multiyear highs for factor. but underperformers, stocks that
have been left behind, xl group, 6% to the downside. aig, 8% to the downside. financials that have not participated. misfit stocks. technology, the biggest sector out there. some of the stock we're focusi on here, take a look at this. f5 networks down 8% so far this year to date. ibm, big blue, down 9%. western union dow 11%. tech stocks that have missed out on that rally, misfit stocks. discretionary, it's the retail season, which means we're focusing on discretionary stocks, but mattel is down 4 3%d under armour, 7% to the downside. sof t stocks may be due for a bounce next year, or do investors think that downside continues? for "nightly business r i'm dominic chu. before you raise a glass this holiday, make sure the wine you're dri
as you crack open that bottle of wine to celebrate the holidays, do you really know what's inside? experts say wine is one of the luxury markets that's rife with fraud. and it's not just the vintage collections. andrea day reports on the fa bard >> meet peter hellman, bestselling author and wine expert. >> 20% of the time you may be drinking a fake and will probably never know it. >> reporter: it's a multibillion dollar business. just one man raked in millions hawking fake wine, even duping billionaires. he was a very good counterfeiter.
>> reporter: he's currently se a ten-year sentence. but his case helped expose the dirty trut that collectors and auction houses don't like to discuss. years later, experts say counterfeite are still in the game. >> people have forgotten, new, wealthy people are moving into the market. >> reporter: last month chinese police seized thousands of bottles in a fake wine scam. it's one of the easiest luxury goods to recreate. >> it's not like a rolex. you can't take it apart and say, oh, this is not a rolex. you can't prove that a wine in a bottle came from a particular vineyard in france. it's in the taste that you know the difference. >> reporte he says the phony bottles are often recycled. >> they'll quietly resell it in the auctmark. this happens over and over again. >> rep it's not just rare vintages. >> the mass produced winds which are faked, yeah, they show up in your store. >> reporter: how easy is it to catch these cheaters? >> almost impossible to catch them. almost impossible.
>> rep bill and annie eggerton are in the business of weeding out frauds. the father/daughter team typically hired when someone suspects a fake and want an expert opinion. do you know major collectors right now who have counterfeits in their collection? >> yes, probably hundreds >> but they're not revealing any secrets. despite the bogus wine, they say some of the best clues are on the label. >> if you were able to feel it, it's very rough, because it was glued on the bottle. >> reporter: this one looks like it's been sitting in a cellar for years, but -- >> it was printed on the label to make it look like it was dirty. if you take some cleanser to this and try to take it off, it won't come off. >> reporter: all of these magnums found in an investor's collection after he tried to sell them a decade later. >> and the person he bought them from wouldn't take them back. the reason they wouldn't take them back was everybody knew they were counterfeit except the investor. >> rep what can you do?
>> if you're buying expensive wine, you need to know the wine, where did it come from. if the dealer can't show you that sales receipt, that prove necn, don't buy it. >> reporter: t bottom line, all bottles look the same. that's why buying from someone you trust and asking all the right questions is key, even at the local wine store. for "nightly business r" i'm and that will do it for "nightly busi tonight. i'm sue herera. thanks for joi us. have a great weekend, everyone, merry christmas. we'll see you monday for a special "
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