tv Nightly Business Report PBS April 10, 2018 5:00pm-5:30pm PDT
this is "nightly business report" with bill griffeth and sue herera. we need to take a more proactive role and a broader view of our responsibility. >> facebook's ceo acknowledges missteps as lawmakers pressim on the company's handling of ser data and the stock gets a lift. >> sigh of relief. the dow rallies more than 400 pointsfter the president of china strikes a conciliatory tone. but are his comments being misinterpreted some. equal payday. whyucs this a big gap between the salaries of men and women? and what is being done to close those stories and much more night on "nightly business report" for tuesday, april 10th. and we do bid you a good evening, everybody. welcome. there was drama in washington and on wall street today. his eo of facebook made
first ever appearance before congress. we will have more on that in a moment. bu begin with the strong rally in the stock market today. the major averages all charged higher right at the opening bell. never look back. after the president of chinad soot concerns at least for now about a trade war with the united states. the veryha same issues been causing intense volatility in the market in recent weeks. here are today's closing numbers. the dow finishing with a gauge 420 points back above 24,000. the nasdaq up 143, s the added 43 as well. >> and now to facebook which was at the center the drama in washington. ceo mark zuckerrg fac more than 40 lawmakers in a crowded hearing room on capitol hill. walking into the room, the notoriously camera shy zuckerberg faced a barrage of cameras clicking to capture every movement as he sat down. members of the institute judiciary and commee
committeys peppered him with y'estions over his comp handles of data of tens of millions of americans. he looked serious and began by apologizing. investors didn't flinch sending the stock up 4.5% to its best day in two years. lia boorstin is covering this story for us from capitol hill. good evening. >> reporter: good evening to you, zuckerberg taking the stand for four years ashe senators took their five minutes to ask w,h witstions and follo zuckerberg stressed throughout his questions that he is taking responsibility for facebook's file to protect its users' data and is making a range of differentchanges. apologized repeatedly prompting this question from senator sothune. >> how is today's apology and why should we trust facebook to make the necessary changes to ensure user privacy and give people a clearer picture of your
privacy >>policies? thank you, mr. chairman. so weave made a lot of mistakes in running the company. evthink it's pretty much impossible, i be to start a company in your dorm room and grow it to be the scale we're at now without making some es mist because our service is aboutlp g people connect to information, those mistakes have been different in how - we try not to make the same mistake times. e >> reporter: zuckerberg says he does believe that facebook is safe to use and the company give users the choices in the different tools to decide how they wan to share t content they're sharing, the content they're producing. he says facebook is working to have protections above and beyond what the law requires, but he also noted that he is ifinitely open to regulation. >> my position not that there should be no regulation. i think thenternet is decrease. >> you embrace regulation? >> i think the real question as internet becomes more important in people's lives is what is the right regulation,
not whether there should be -- >> do you as a company welcome regulation? >> if it's the right regulation, yes. >> do you think the europeans have got it right? >> they get someng t right. >> that's true. would you work with us in terms of what regulations you tecnk aresary in your industry? >> absolutely. >> would you submit someos pr regulations? >> yes. and i'll have my team follow up with you. >> the question and answer session ranging on everything from hate speech to electionma pulation to whether facebook violated its promises and commitments to the feder trade commission, zuckerberg said they did not break any of theiro promiseshe ftc. and on a number of counts, s zuckerbed he'd follow up with more details to senate staff. sue, back over to you. >> we awa that very much. thin thank you, julia. one reason why there's so much focus on facebook is because of its rapid growth. just consider a decade ago few
peoplead heard of it. day its influence in our lives and the stock market is staggering. facebook has 2on billionly users around the globe. think about that. that is four times thepo lation of the united states. here in the u.s. roughly two-thirds of all adults use facebook. and with the exception of youtube, no other major social media platform comes close to facebook in terms of usage. also, according to pew research half of american adults get their news from facebook. when it comes to market influee, facebook is currently the sixth largest publicly traded company with a market value of more than $460 billion. let's turn now to silvaon ey veteran and an earl investor in facebook roger mcnamee. he's been publicly sharply critical of the social network. let's get his tughts on facebook and what any future regulation might mean for its sector. he's the managing director at elevation partners. always a pleasure toou have
here. >> sue, to great to see you and way too long. >> first, we have another msession from zuckerberg tomorrow morning eastern time. but did anything that you heard from him today change som the criticisms that you've been so public with? >> so t real problem here is that facebook has done many things in its business that were designed to maximize growth and ofitability that, frankly, ran contrary to the public interest and to the interests of users. and what the hearing exposed was that it' not oneroblem we're dealing with, it's not two. it's 10, 15 or 20. the company has been careless in othe handling user data. it has been incredibly aggressive at flaunting past ealctices about how you with data. it has, frankly, ignored regulation, it has ignored criticism. it's worked with people that it knew to be bad actors. it has operated in governments
outside the u.s. doing things to their citizens tt youould never do anywhere in the united states. so i look at hhisring as being an opportunity for anators to show off an opportunity for mark to, frankly, you know, look better than people would have expected, but it solves nothing. i mean, at the end of theday, the company, i think, now, is too big to be managedy this team. and i don't candidly think there's anybody on the outside to come in and manage it which makes me think t company is just too big. >> let's make it meaningful to investors out there. clearlyegulations are going to come out of these hearings at some point. do you think that wil stunt the growth not only of facebook but other social media coanies? one wall street analyst said that he thinks this could signal the end of the golden age f social media. what do you think? >>t i actually think t that should be a priority of the process. the idea here right now is that we he four gigantic social media companies who dominate the internet ine ways have never
seen before. and candidly, they're stunting th growth of start-ups throughout the country, frankly around the world. they're blocking off lots of new opportunity. i don't see any way toet our entrepreneurial economy back on track without stopping to some degree the growth of the giants. and i think there's a goo example in the past 1956 with at&t when that company was threatening the emergent computer industry. and there was a government consent decree that caused them to not expand into computers and which resulted in the free licensing of their patents including the transistor which is what created the massive boom that we think of in silicon valley today. i think we should do that again. >> if you're an individual investor who holds facebook, you mentioned the fact that the companys too big which opens a door to a variety of recommend d -- remedies, certainly. >> i am an individual investor
in facebook. it's still, sue, by far, the largest individual position i have. i've hel on to it, candidly, because i felt that i was not trying to be a critic. i was actually trying to be supptive and constructive in this whole conversation. so i've been banged around etty badly in recent que pweeks. nt to people is facebook is t advertising busine created. if there is no regulation, it will continue to grow like haazy. i think is actually not the best thing for the country, it's not the best thing for the world. the best thing for the world would be t restrain facebook very significantly and force them to be more responsiblon i actually think that would be the end for the stock. it might be the end for this business model, but they have huge businesses like their ik marketplace, messenger where there are opportunities for modernization they've never taken advantage of. i don't actually think we have to cripple facebook. i don't wect tose i love the product. i just think they're not behaving responsibly. >> we'll have you back very
soon. >> i he so. >>definitely. you can count on it. roger mcna me withti ele partners. >> as we mentioned earlier, stocks rose today on comment made by china's presidenxi jinping. his remarks were surprising given the escalating trade tensions between the world's two largest economies. but is the market getting his remas wrong? eunice eun is in beijing for us tonight. >> reporter: president xi jinping pledged a more open china and said new measures would be turned into a reality sooner rather than later. the market seemed to like xi's softer tone in the ongoing trade dispute with thest united es, however, most of the people i spoke to today here said they were underwhelmed by the chinese president's speep. that's because these are old
policies that are currently under way. the decisiongno lift for equity caps were announced at the end of last year and is already in motion. others like the lowering of auto tariffs are not meaningful since most american cars that are sold in china are made in china. on easing restrictions in manufacturing or enforcing intellectual property, there were few details and only vague timeframes. most importantly president xi's speech didn't address a core u.s. concern.ch a's industrial policies. so it remains to be seen whether or nh president xi's spe will be enough to appease the trump administration. there was someood news, though, for american companies. fund managers say jpmorgan and blackrock are looking to explore their asset management businesses here and could benefit. insurance folks expect big changes in the lif industry.e out of american companies, they say metlife is one of the few with its toe in this market. but tesla is seen as theia biggt
pote winner. tesla depends on imports it doesn't manufacture here and the tariffs o tesla cars here is 25%. if it drops significantlyal ts say that could be a game changer. welcome announcements by present xi but notnough to excite most internaonal businesses here. for "nightly business report" i'm eunice eun in beijing. >> she mentioned the insurers, they rose on china'slan to speed up the insurance sector and metlife said it is encouraged by the president's looking forward to seeing the words put into action. the resident trump thanked chinese president in a tweet. he wrote, quote, very thaful forresident xi of china's kind words on tariffs and automobile barriers. also, his enlightenment on intellectual property and technology transfers. we'll make great progress together. end quote. while investors seem less concerned about the state of trade at least for tay the
market's attention will soon shift to earnings.ea ings season arrives later this week at a critical time for the bull market. bob pisani has more from the new york stock exchange tonight. >> a chance to change the chaos of trade w cs to thealm of earnings and revenues. the numbers are phenomenal. the s&p for the first q srter we to be up 10% in october, then 12% in january. they may go to 20%. you don't see earnings double in six months ver often. the two biggest sectors, tech and financials will see outside gains of 2 and 24% respectively. remember, together they're 45% of the s&p soat thisrs. traders want to hear what corporations will be doing with their eynewfound m getting from the tax cuts. early signs have been encouraging, bank of america looked at the announced spendin plans of 150 companies about a month ago. they found a mix of one-time bonuses and buy backs and
dividends and more cap ex spending. traders are pinningesheir h for a rally on a surge in buyback announcements. 2017 saw $25 billion in announced buy backs, this could go to 800 billion in 2018. it results in most cases to an increase in earnings per share. more important is hopes for more capital expenditures. 40% of companies that makco ents on their spending plans mentioned increased capital expenditu expenditures. there's a relation by techs and industrials andgy ener of course this could all be up-ended by trade war headlines, bether topic expected to addressed by ceos as well. bob pisani at the nework stock exchange. and it's te to take a look at some of today's upgrades and downgrades.s goldman saas been given an outperform rating in new coverage over at bernstein. the analyst there notes that goldman's investment banking business is now the primary
driver of revenue, not its ading business. the price target is 00. goldman sachs rose 256 to 257. the analysts site ci s cites a revenue price. shares o morgan stanley in an overall uparket were up to 54.14. >> invideo moved to overweight at morgan stanley. the semiconductor company will be one of the biggest beneficiaries in the movement towards machine learning. shares rose 6% to 227.91. morgan stanley also upgraded shares is of seagate technology benefiting from increased demand for artificial intelligence. price target was raisedo $72 and seagate shares finished up more than 5% to 59.35.
still ahead, are you looking for a new car? i well you are, there's a greater chance that it might have been imported from mexico. ♪ ♪ >> to the economy now and a losely watched gauge o inflation, that would be the producer price index, which is a measure of the prices that businesses receive for their goods and services. band it rose 0.3%, more than expected. the rise came from a sharp increase in food costs and g strong priwth in the services sector. the report is the latest sign th inflation pressures may be building in the economy and that's certainly something the federal rerve will be paying close attention to in the coming months. >> well, don't lookow but oil
prices are moving higher. today's rise is in part because of a growing confidence that the u.s. and china will resolve their trade dispute. and also on rising tensi s in the middle east. domestic crude rose more than 3% to settle above $65 a barrel. a management shake-up could be coming to volkswagen. the german automaker is reported by going to replace its ceo with the head of its core band. the departure of matthias mueller iseing viewed as another attempt to move past the lingering effects of the diesel emissions scandal. there's been speculation in germany that vw was slow to act. as talks betweenhe u.s., canada and mexico to renegotiate the north american free trade agreent continue, newata shows that mexico is still shipping cars and trucks to the u.s. a a prett steady rate. it is expected to pick up even more this year. phil lebeau reports. >> reporter: the trains loaded with cars and trucks seem to
stretch for miles. they're headed from mexico to the u.s. last quarter shipments of mexican-made autos tohe united states climbed more than 5% to a record high of almost600,000 15% cles, making up almost of what is sold in u.s. dealerships. most buyerselre l unaware they could be buying a model built in mexico. two of most popular pickups, the chevy silverado and ram 1500, are both built south of the border. while president trump has threatened to slap a tax on mexican-made vehicles, many in the auto industry doubt that will everhappen. instead, they believe negotiatory will successfu rework the nafta agreement, which could change some of the requirements for mexican-made vehicles but is not likely to lead automakers to slo down assembly lines in that country. last year mexico built almost $4 million vehicles with more than
half of those being shipped north of thebo er. it's easy to think mexico's auto industry is growing simply because ofemand in the u.s. but mexico is also exporting v moreicles to other countries like germany, brazil and china. phil lebeau, "ghtly business report," chicago. sprint and t-mobile reportedly renew merger talks. and that's where weegin tonight's market focus. several months after previous two fell apart, the telecom companies are apparently taking another shot at reaching a deal, according to "the wall street journal." this would be the companems third a at a combination. shares of sprint jumped to $6.02 and shares of t- mbile rosee than 5% to 63.13. american airlines is raisi the low end of its unit rv new outlookhis quarter. but it was not as much as some had been hoping for. the airline alsoir ad its earnings guidance for the whole year. shares were down nearly 5% in an
otherwise big up day. and united ctinental said the traffic rose by 6.5% in march compared to a year ago. the airline said that its on time perfoance improved. shares of united also finished lower, down about 1% to $67.59. bill tupperware said a drop in sales would cause earnings and revenue this quarter to the storage maker also said higher tax rates were having an impact on its financial reporting. auto systems maker teneco said it was buying pierre mobile. teneco says it will separate into two publicly traded companies following that deal. the companies will focus on powertrain products and auto parts. shares rose 4% to57.82. the housing market now with a new report sws that roughly
one in five conventional mortgage loans went t borrowers who are spending roughly 45% of their monthly incomes on mortgage payments and other debts. that t according corelogic. that's the highest proportion since the housing crisis. economists say the increase in debt reflects rising home prices in relation tos. wa no secret that fewer buyers are able to afford theth homes they want, especially in their desired locations. this is happening barely a decade after that worst housing crisis in history. as diana olick tells us, workers in certain jobs areeing hit the hardest. >> reporter: if you're house hunting this ,spri you already know the competition out here is rough. lvery fewtings and very high prices. and for some workers affording a home anywhere close to their job is getting increasingly difficult. teachers, first responders, restaurant workers and surprisingly computer programmers have the hardest time affording a home near the jobs. this according totu a new by
tru trulia. in california where tech workers ma six-figure salaries, very few can afford a home. in san francisco programmers can afford just 5% of the homes for sale. and in san jose barely 12% according to trulia. median home prices in both cities aon well over a mil dollars. but it's not just in california. barely half of programrs in chicago, charleston, south carolina, minneapolis and newark, new jersey, can afford to buy themedian-priced home. the numbers are worse in portland, oregon and miami. but teachers really bearbr the t of the challenges there were their salaries aren't increasing anywhere close to the gains in home prices. the numbers affordable to them is dropping dramatically down over 20% inities like tacoma, washington, colorado springs and even the relatively affordable indianapolis. the problem is that home prices are rising fastest at the low end of the market.
that's where there is now most demand and least supply. that leaves more workers having to travel farther out from their jobs to find affordable housing meaning ever longermm es. for "nightly business report" i'm diana olick in washington. coming up, p closing the gap. why men and women don't earn the same salary for the same job. ♪ a federal appeals court has ruled that employers cannot pay women less than men for the same ork if it's based on th woman's previous salary. now the court said that pay differrices based on salaries are inherently discriminatory. the lawsuit involved a female california math consultant who sued fresno state after she found out that her male lleague with the samitle
was paid a higher salary. >> finally tonight, today is equal payday. a day meant to f symbolize h into the year a woman must work in order to earn the same amounm that a earned the previous year. wage disparity has become part of the national conversation, and so we ask leslie picker to take a look at the nation's gender pay gap. >> reporter: the figure most mmonly cited is20%. women's median earnings br abo 20% below that of men. that 20% adds up over time. it equates to about $400,000 in lost wages over the course of a for millions of women pay parity would bring thembove the poverty level, that's according to a study published today b lean in and survey monkey. about a third of people did not realize pay gap exists. rachel thomas says that gender bias is to blame for much of the wage gap. >> we ask americans why they
think there's a pay gap and 60% said they thought it was because of sexism or unconscious byes and they're right. a big piece of this is what's happening in their work place day to day. this isn just about awareness, it's call to action. omen have less access to mentors and ronssponsors. they're promoted ls frequently. >> a large explanation is due to the idea that predominantly malk fields t construction and transportation garner higher earnings than predominantly female fields such as education and administrativesupport. activists have called for raising the minum wage as a way to help bridge that divide. so-called is the motherhood penalty. employers are less likely to hire mothers than fathers even if they have the same level ofen experi. some companies such as sales force have taken it upon themselves to investigate the disparities within their
workforce. the co-founder of jimmy choo says thas an important step towards parity. >> transparency when looking at the data is the onl way we're going to figure out how to do this. and calling on companies to do internal analysis that's the way forward. >> the wage gap has narrowed but still persists. at the current rate of change pmen would not reach payity with men until 2119, more than a century from now. for "nightly business report" i'm leslie t'picker. >> t it for us tonight. >> good night. we'll see you tomorrow.
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