tv Nightly Business Report PBS November 21, 2018 5:00pm-5:30pm PST
. this is nightly business report with bill griffeth and sue herera. where is the panic? it's been d amatic week on wall street. with sharp declines. yet investors are relatively calm. is that a sign that the worst is still to come? >> shop until you drop. with black friday two days away retailers are taking steps to drive sales and alleviate concerns about weaker margins. >> and locked in. cybermonday i fast approaching. but there is one segment of the online shopping area coming under fire. it'see story you nto see. all that and more tonight on nightly business rort for wednesday, november 21st. and we do bid you good bo evening, eve and well. it's a good thing that the thanksgiving feast is tomorrow.
because there's been plenty of stomach churning action already on wall street this week. and today no different. stocks opened this morningea looking to recoup the week's losses as we head into the holiday technology was holding up. in fact many of the beaten down stocks like amazon and cebook, even apple were trading higher. and the dow was up more than 200 points for at a time. but then things change late in the day. and dow component apple gave up gains and dhegged down industrial average with it. good news, the nasdaq and s&p did stayn t barak. final numbers for this wednesday, the dow down just a point. still below 25,000. the nasdaq rose by 63 and the s&p added 8. so as yet another rally fizzled investor have to be asking whether this is a market that wants to go lower. mike santoli looks at whether there is enough fear in the market to help find a bottom. >> wall street's two-month slide
has made investors a big anxious about the marketout are outlook. but there is not the intense panic or urgent slide from stocks that many like to see beforeetting tha a good bottom for the index has been reached. as the s&p hasallen 10% from a high the second time this year retail investors have pulled significant sums out of riskier mutual funds and thenvtors have buying more troegts and surveys and of professional avi indidual investors have shone a decne in bullish sentiment in recent weeks. but the responses have stopped short of true steams of fearful attitudes and behavior that is accompany a durable market low. the volatility index, a measure ofemand for downside option bets peaked in the high 20s in october. but in the past week has stayed closer to 20 even as the s&p approached octob lows. and wall street strategists on balance continue to prect some recovery in stocks by year end and further modest gains in 2019. it's important to note tt not
all market rebounds happen oem after most investors flee or give up hope. perhaps with the s&p still f rougt for the year and the u.s. economy performing well for now the level of caution among investors isn't out of step with current conditions. and the prevailens of automated trading strategats domg the day to day action, there is a chance fear readingsre les frequent or clear than they used to be. though of course humans decide whether to give machines the money to trade. could it be with nearly half of all stocks down 20% or more and bond yields easing back, the market may be confiding without scaring investors. most traders want to see more panic. but that may help it plunge to haw lows hey or may not be ahead. order for durable goods like washers and and dryers fell more than expected last month. much driven by weaker demand for airlines. 4.5% in ll nearly october.
it was the steepest decline in more than a year. the report also showed that business investments fell slightly adding to drops in august and september. ight now there is a divergence of opinion between ndwall street traders economists about where the economy is headed. will it be a sght slowdown or worse? steve liesman takes a look tonight. >> reporter: the u.s. economy is come in for some sort of laning with econosts forecasting a soft within and traders seeming to bereave it's a bumpy ride to the tar mack. u.s. growths seen slowing from a high of 4.2% in the second quarter to 2.8% in the fourth and then the 2.4% in 2019. slowing gbal growth trade wars, higher interest rates and decline in fiscal stimulus are all weighing on the outlook. the market is down at worst 10% from the peak. given theesigher int rates and trade war and slowing growth that's expected. i don't thk it's signaling a
dramatic weakening in the economy but certainly slowing. >> today u.s. durable goods report et supported theth slowi. business investment for the third straight month. that hasn't happened since 2015. reporter oil prices reduced spending in theil fields and tariff fierce may have caused some to push off investment. one wild card for 2019 will the fed rea the slowing by itself slowing down the pace of rate hikes. ar>> i think thet is it questioning whether the fed has to be as assertive orggressive as it is currently postured. i think that is one thing the mark -- but that can change in the blink of of an eye. you could have a chae in policy, a pause indicated by our fed and markets could very quickly get comfortable with that. we think the trade war is much more difficult situation to resolve potentially. >> so far economists have marked down growth but haven't called for recession. judging by the strong downdraft in stocks t past weeks it seems some investors have made up their mind isis eon coming.
for nightly business report, liesman. let's hear from mark sandy on how much of a slowdown he expects in the economy. he is the chief e anomist moody's analytics. good to see you mark, hawelcome >> you, sue. >> let's start with what indicators you are watching that hamight tell you type of a slowdown is going to be. obviously from steve's piece, you expect the economy to continue to slow a bit. >> yeah, i do. i mean,he i think economy was all juiced earlier in the year by deficit financed tax cuts and the benefits are now fading. it's not surprise nag growth slows. but to gauge how muchyhe econs slowing and whether it's a serious slowing or even recession, things i look at initial the number o claims for unemployment insurance. that comes pout every week. very sensitive. right now it's between 20,225,000 perweek. that is very low, very
consistent with the solid economy. but that starts rising back closer to 300,000 per week that would be a sign something is coming off the ra s. consumnfidence, also that's a very good -- usually that frkts the economy doesn't drive the economy. but if things are turning and we art into a downturn or recession then confidence gets hammered, falls sharply and starts the affect the economy. i'dway watch that. e other indicate era little more he is or take care something i watch is construction and loans to businesses. cni loans and industry loans. very good bar oormt of the the health >> what do you think the fed does about this? clearly a spotlight has been focused on them. mme people blame t for the slowdown with the rate increases. and just thiseek wall street started to anticipate that maybe they won't raise as many rate insides next year as had been anticipated what do you think they're going
to do. >> yes, some blame, like the pressent you mean bla the higher -- the fed and the higher interest rates for the slowdownt . you know, i think the slowdown as i said is really largely related tohehe end of benefit of the tax cuts that provided a nice possible to people went out and spent the -- the extra tax benefit. but that's gone't we d have that. i think the trade war is also playing a really big role. you mentioned the investment numbers they've gone sidewaysn the last few months. despite the lower marginal rates for businesses. and i think businesses are nervous about how the trade war is unfolding and skt affecting investment editions and the higher rates complicate the matter. >> i hat to use this word but really this comes to mind. do you tounk the fed be bullied into not raising rates as many timesy as tuld otherwise. >> no, no absolutely not. they have a script, right. and they have a formula. almost a formula. they look at unemployment rate,
where sthars we're a 3.7% unemployment it's falling. inflation they ve a targe 2%. right on target. they look at financial conditio, what's going on in the market and credit spreads and cap rates. t i had be -- i don't thifrmg there is any possibility they are bows to those pres wring. >> marhave to leave it there. thanks for joining us. happy thanksgiving. >> thank you you too take re. mar zandy with moody analytics. >> october home sales rose for the first time in six months. sales of previously owned homes rose 1.5% to a seasonally adjustednnual rate of more than 5.2 million. even witthe increase sales were still down more than 5% compared to the same timeast year. separately, fewer potential home buyers applied for a morm last week and applications for refinancing fell by 5%. the once red hot housing market, the house flipping market specifically, may flopping.
a combination of higher costs pan lower housingas demand some flippers fleeing. dia olick explain. >> the mark habs flipping homes in the los angeles area for 30 years. usually several per year. but innet this the year h did just one. >> it's not only becoming more expensive on the purchase side of flipping, but it's becoming more expensive on the fixup side offlipping. he is a residential contractor but even he had trouble finding labor to transform the flipsike this and finding homes cheap enough to profit on. the mathemati is getti tighter. and that is likely why the number of homes flipped defined as a home bought and sold within the same 12-month period edll 18% compith august of 2017 according to adam data solutions. in california where prices are high and demand is falling, t number of flips was down a steeper 22%.
growth flipping returns across the country in august fell to the lowest level in 20 years. and it's taking longerlo s a flipped home. now the ample 186 days, the longest since june of 2006. there is also increased competition from large s le flipper mo came in during the foreclosure crisis and continued to flip largeolumes of homes. >> they have teams of people, you know, looking at properties. where the little guy like myself as an example, i have myself and my c realtortacts that are looking. but a team can do morp an individual. >> flipper are facewood a cooling housing market where prices are still high but demand is falling off because of higher mortgage rates. and a lot of older home owners who might be downsizing now are staying put because it's so expeive to move. that leaves fewer flipable homes ripe for the picking. for nightly business, diana
olick in washington. zarkkerberg is staying put. during an interview last nigi with l segal on cnn's. c 360. the ceo defended his c swt calledhe the c.o.o. an important part of the company and plans to keep his chairman role. >> you were not spping down as chairman? >> that's not the plan. >> that's not the plan. would anythin change that? >>an i if -- eventually over time not doing this forever. but i certainly -- i'm not currently thinking that that makes. >> zuckerberg also reiterated points he made in the past. he aapologized for many missteps that plagued his company, prominently russians using facebook to meddle in the 2016 election. >> coming up, happy travels. the who will kay treat for those flyin on thanksgiving weekend. few delays and a smooth travel
experience. i'm phil lebeau in chicago. that story comg up on nightly business report. following the arrest of nissan chairman carlos ghosn. questions have arisen about what might happen to the alliance he built between renault, nissan and mitsubishi. sheri kang is in japan with more on that. >> the japanese government calling for a stable automotive appliance li lines among renault, pits beesh on nissan. the the cabinet secretary saying it's important to keep the
three-way alliance alive. this is the moment where the interests of the french government and the japanese government seem aligned here. but really the crucial question is what does a nissan motor want amid reports of frustration on its part regarding the structure of the alliance with the nissa motor having no control over its french partner and no voting rights. in the meantime, though, the japanese auto maker might have its own prosecutialroblems with reports on the prosecution in japan considering making ast case aga the company itself amid allegations of financial misconduct of a chairman and board member. tomorrow, trsday asi time is the big day for nissan motor with boardrs mem gathering together and voting on the removal of carlos ghosn as for nightly business report, i'm sheri kang in japan.
many thanksgiving travelers are already on their way to grandma's house. and this year aecord number will be getting there on a plane. phil lebeau has more on why fliers are finding packed planes and higher fees. he is at chicago o'hare airport for us tonight. >> it's one of the busiest day of the years to floi. but around the country travelers are enjoying amo relativelyh journey. au pretty calm it was eds. >> i was shocked b i was taking a cab because i didn't think there would be parking. it's plenty of parking and it's empty. >> it smub crowded but it's calmer. >> we thought it was a disaster but wwere surprised when we got out of the taxi. >> this year there is good news and bador news those flying. on the bro side airlines are doing a better job with planes taking off and landing on time. and no majors storm to ground scores of igfls. on the other hand, travelers are generally paying more to check
bags with several airlines recently raising baggage fees by $5. >> there may be a little bit of grumbling. but i think given the strong demand and the tight supply that does continue throughout the industry we are seeing as travelers willing to pay that. >>ly the a susan denofrio as has been tracking fares and says they moved roughly 5% higher. b andause of the healthy consumer confidence, travelers have been willing to pay the price. >> i would say overall we're going to see a busy weekend. we have been seeing a busy fall. i would say in terms of whatci ante we are expecting volumes up about 5%. and with that we are expecting pricing to be up about 3% as well. >> all of this is good news for the airlines and investors. the packed h praens,her fees and slightly higher air faresou means this be a profitable holiday season for thes. carri
for the nightly business report. phil lebeau. >> sales picked up at deere but not w the pace waldsl street expected. that's where we begin the market focus. ak the equipment reporting disaping results. even as demand for farm and construction equipment improved. deereaid itxpects margins to expand next year but also sees overall profits coming in lower than expected. the shares finished up more th 2% to 141.88. the software firm auto devg grew a subscriber base and that helped topxptations. auto desk said it was buying a start-up for nearly $900 million that it says will give it the t opportunit make work flows in the construction industry more effective. ares of auto desk jumped nearly 109% to 135.04. game stop said today it's sellin the spring mobile business for $700 million. spring mobile owns and operates
more than 1,200 at&t wireless stores. the retailer said the deal will generate immediate cash and lou it to focus on entertainment business. othe shares popped 1 the news to close at 13.71 an appeals court rejected johnson & johnson request to block generic further of the pros taste are tate drag drug mechanic.ng the the drug maker asked for the halt while it tries to invalidate a judge's ruling on the treatment. j. and j. says it will seek an emergencrder to. stop the generics they the shares fell. >> black friday is of course a critical day for retailers. so norwood in order to handle the crush of shopper are prping today to makes sure things go smoothly onda f courtney reagan is at a kolls in new jersey for us today. >> reporter: retail workers around the country are getting
stores ready for the biggest shopping weekend of the year. more than half of all aricans are expected to shop online in store or both at some point between thanksgiving and cybermonday. while black friday is not as big as it once because was because of the sales spretd over the weekend and online it's still expected to be the biggest day >> friday is more of an family event. traditi they spend a lot of time out together on friday. actually talking toon themer about 25% expect to shop on .hanksgiving. 70% to be in the is to store on friday. >> question we eat and get the girls ready and shop. >> i dinitely not shopping black friday not over the weekend either. i'd rather dt ionline. >> if you want to get a head start most retailers are offering door busters online early friday morning. but jenney opens first at 2:00 p.m. thanksgiving day. best by, koll's and macy as and
target start at 5:00. wal-mart begins at 6:00 p.m. but you can get fueled with at 5:00 with free coffee andie cooks. it takes a lot to handle the surge. the right merchandise in the right qntity to the slor stores and distribution cenedrs is plannears in advance. apps and websites are test the unheavy volume to make smur they can handle the traffic. beyond the enticing pricers retail erps are aim to make it easier. they have mapped all the storer shoppers so door busrs can be found quickly. all t oee offer theption to check out without going to register at at least some stores. buy online pick up in store becomes more important during the holida. while it gives shoppers flexibility it add flexty for the retaer to use store inventory and labor to also quickly fill online orders. >> kolays most buy online
orders are rrd in an hour or rest. the department store expects 10 million items will be picked up in s in november and december alone. retailers have been workingsi nce last christmas to get everything ready for this week. now all that's left to do is wait for the spper rush. >> and you have a wonderful day. >> thank you. >> for nightly business report, i'm courtney reagan in new jersey. >> coming up, there is one indust whereop companies earned billions last year. so why is it under fire? ea> amazon said today that some customer names a email addresses were exposed to due to what the company called a technical error. amazon says the issue resolved
d the company contacted those customers affected. with you they are not saying how many or how long that breech mean the postal service it illasted. has fix d security flaw on its website allowing fwhern a usps.com account to view the details of 60 million other use sfwleers shoppers spent more than the $6.5 billion onl ye lar on just one day. cybermonday. some of that money going to online the model where you sign up for a monthly box or service isin bo but some businesses are under fire with the fed now cracking down. andr day with our investigation locked in. i'm morgan hemmer sfloon he is the founder and ceo of ado me. we first heard about the company op cnbc's power pitch four years ago.
a segment where entrepreneurs getino pitch bs models to a panel of experts. >> i'm not a o fan customers going to the website and being defaulted into a subscription model instead of proactively koosing it. unfortunately i'm out. >> subscription ecommerce e programs l adore me where you are charged every month to receive products are booming. according to a recent study by mckenziey the market growing 800% fm 2013 to 2017. the top companies raking in more than 5.5 billion just last year. but when it comes to the pla consumers can lose out. >> we continue to monit the area for fraud because it's an area ripe with problems. >> james kahn is the in the department of consumer protection. >> what could w be talking about financially. >> certainly talking about hundreds of millions ofollars and maybe over $1.0 billion
every year out of the economy. >> nearly three years after cnbc's experts buzzed adoor off the segment, the ftc slapped the company with ano order pay $1.3 million back to cuy omers. >> td a business where if you didn't buy each and every monthou could bank the amount that you weren't spending. to tell failed consumer is if you cancelled the service you lost all of that money that was essentially in your bank. there was no disclosure of that at all. >> and that'sllot >> any used one of the classic means of keeping people from cancelling. they left them on hold for long amounts of time. >> customers called in and were angry like i want out of my subscription now. >> gabrielle is a former skper service rep for adore me. sean hernandez ran the department for three hars. >> we people cursing and going crazy. >> and s says many had no cluee
they wigning up for a monthly charge. the vip membership was prelekted at checkout they had to uncheck the box to opt out when they li he show told management the customers were bging to cancel. >> try to keep them however you could. >> kathy was union of the customers calling in for a refund. after she ordered a bra and underwear set in 2014. >> itt. wasn't skmvl, sof so i wasted $25. i won't shop there again. at least that's what i thought. >> until s says her card got declined and realized that adore me had bee charging hundreds of dollars. and keeping her money as store credit. >> you had no idea you were signing up for a membership. >> none. >> after last year's order, the ftc says adore me cleaned up the act. according to the order adore me did not admit or deny wrong doing. >> they gave the money back. th gave it to us in the form of a judgment in court.
>> the company did notespond to our repeated requests for comment. to make sure you don't get locked int a plan take your time at check out and read every box. so you aret signi up for a monthly charge you don't want. for nightly business report i'm andr here a look at final numbers on wall street. the dow downbout a point. it had been up more than 200. nasdaq rose 63. s&p added eight. >> that is nightly business report for tonight. ilmgriffeth. happy thanksgiving everybody. >> indeed. we will see you tomorrow.