tv Nightly Business Report PBS April 22, 2019 5:00pm-5:30pm PDT
this is "nightly business report" with bill griffith a sue . >> 2019 high, oil prices rise after the u.s. clamps down on iranian oil exports. march home sales slide as the springhousing market becomes hard to predict. unintended consequences, the ipo market is hot right now. are t big changes in store from he company goe private to publicly traded. those stories tonight april 22nd. welcome, sue is off tonight. the actio tay was in the oil pits, the price of domestic crew today after the white house pledged to reduce iranian oil exportro to the trip administration will no
longer grant waivers to countries that buy oil from iran. that puts the fupply inl focus, which is already dealing with sanctions on venezuela,by violence in a a decrease in output by saudi arabia, crew prices today settled above $65 a barrel, the highest price we've seen since halloween. we begin tonight with elan muoy in washington. the white house wants to curve nuclear ambitions by shutting dow its profitable oil industry. back in november, the trump administration gave eight countries a six-month time frame to wind down crude. today secretary of state mike pompeo warned there will be no more extensions. >> we're goingozero. we're going to zero across the board. we will continue to monitor ce compli any nation interacting with iran
should do its due diligence. the risks are not going to be worth the benefits. on capitol hill, republican hawks welcome the. mo ted cruz said the decision will deprize iran of billions o dollars that would have been spent undermining the security of the united states and our allies. the annouement fueled fear in the oil markets that global supply could president trump tried to tamp down those concerns over twitter saying saudi arabia and others will make up the difference. >> the trumps administration really walking a fine line between sanctioning countries they don't like, while trying to keep oil prices in check. this strategy hinges on, will the saudis open the taps. >> in a statement, saudi officials said the nation will coordinate with other producers to sure adequate supply. there were no specifics on timing or productionls le pompeo said nose discussions are
underway. >> we've w beenking with major oil producing countries to ensure the market has sufficient volume to minimize the impact on pricing. i can confirm thatho each of suppliers are working with iran'susormermers to make the transition. >> five others are still getting oil from iran, including india, japan and china. now beijing is blasting the decision and defending its imports as reasonable and legitimate. raising theth question of w china or the others will meet the may second deadline for nightly busins report. >> john joins us to talk about what's hpening r. is the supply there. to make up the difference for the loss of from iran. especially when you consider what happened with the oil markets today, that suggests the supplys goi to be depleted.
>> there is a risk that the saudis won't come through and fulfill the gap fully. as you eeknow, they've working for months now to lower their own production to up global supplies, that has happened. the fact of the matter is, there is plenty of oil to fill the gap if iran oil exports would go to zero. >> do you think theirxpts will go to zero? i mean, there are -- the knock n sanctions, not just these sanctions, but any sanctions is that there are always going to be other markets that aountry can tap to get around those sanchszs. what do you think happens this time? >> this is a new breed of sanctions. these are the ones usedy the obama administration. if you continue to buy oil on an official basis from iran, you're gog to be sanctioned and getting payments and other
things. it's a pretty easy choice to make. they will come clo to zero. i would say down around over a millioht now, to 300,000 at most. >> we're impoing those sanctions if we were on china's major oil refining companies if theyoere to continue buy the oil. and yes i do. this is not to be -- this is a point not to be missed. this was a week about maximum pressure on iran. they put the terrorism designation on theran revolutionary guard. this has been john bolton's want to be ablerao put in a box, and hit them where it hurts the most. >> what happens to oil prices, do you think? bottom line. >> we priced in a good bit of risk today. to the extent that the saudis make noise, they should stabilize, right now in the near term the ris is skewed to the upside. wtiroing up is a likelihood
>> all right. john, thanks for >> thank you. elsewhere on wall street, it the day began a moment of silence at the new york stock exchange in remembrance of the lives lost and the families impacted by thest bombings day in sri lanka af tr opening bell rang, trading was muted. investors prepared for a week that is going to be filled with earnings ereports. dow at the close was down 48 points. wn 26,511, nasdaq added 17, the s&p 500 was up nearly three points today.>> he spring home selling season is in full swing, but a new repor today showed that sales were weaker than expected last month. with both high and low ends homes taking a h. home shoppers be always comut in spring. but fewer are buying in this year,
february sales pace was r lower. sales have now been falling annually for 13 straight mon affordability, they are going to be looking at interest rates and where you can get a steal. that could be an encouraging sign they may want to jump into the ma. >> mortgage rates flat lined ine january and uary, when most of these march deals wer. weaker sales are causing the home price gains to shrink. marchns med price of $259,800 was the highest ever recorded for the month. what's going on behind the numbers? sales are weakest another the low end and the highend. but for very different reasons. at the low end it's no. supp and that's causing big prices for not a lot of house. at the high end it's changes to
tax laws or salt. >> if we see that impact and we will it in the coming months, we're just going to have to wait and see how much of an impact that is going to have at market.h end >> much of california where taxes are a bigger factor are e ready seeing ggest slowdown i with rates nowising again, the spring market which really just began, may already be a washou for nightly business report, i'm diana olick in washington. time to take a lookt today's upgrades and downgrades. price target now $240. that s fell nearly 4%. it was pressured by a video out of china that showed a parked tesla exploding. the inve
d.r. horton waswn aded to market perform. the analyst cited the stock's valuation after a 30% runup so far this year. that stock fell more than 1 1/2% to 45.66. still ahead, a plan outf shington to the cancelled student debt by taxing the superrich. herman cain has withdrawn himself for consideration for a seat on the federal reserve board. he's the former o of godfather's pizza. t on d a former board s the kansas city fed. he's been cftical central
banks. and in recent weeks, at four republican senators had come out against social security's payments are expected to exceed its income next year. the fir time that has happened since 1982. this is all according to the latest annual report by the trustees of the social security administration and medicare which was released eday. deficit in 2020 will force the program to use its trust fund to start covering benefits. the report then estimates by 035 those reserves will be depleted, meaning that full scheduled payments will not be able to be paid. th disability fund which is separate from the retiree fund will run out in 2052. that is 20 years later than projections in lastar report. when it comes to medicare, the report said its hospital insurance funds will be able to pay full benefits until 2026. much of the talk in washington these days is about
taxes, many democratic candidates for president have been h talking abouther tax rates for the wealthiest americans, and makingo comparisonse system that was in place decades ago. what do the numbers really show? >> robert frank takes a look f >> on the campaign trail, democrdaic cans are citing the 1950s and '60s as the golden e of taxing the rich, ratesre s high as 70 to 90%. julian castro saying, there was a time in this country when the p marginal tax rate was over 90%. it was around 50%. what those candidates are not saying, is that the taxes actually paid by the wealthy were much lower, and they haven't changed much in over 50 years. and now, top onists, led by thomas pickety. look at the amount of federal, state and local taxes relative to their
in 1960, when the top rate was 91%. the 1%ers paid 42% of their income in taxes. that rate fell during the 1970s and early '80s, and started rising again.to y the top 1% pay a rate of around. %. it's onl 5 or 6 percentage points less than the0s 1 why did the rich pay so much less than the official tax te. those t rates only apply to a small group, less than 10,000 households made enough to pay at 91% in the 1960s. much of the income also came from capital gains and investments, which were always taxed at lower rates. as they always do, thelt wea found ways to avoid those high rates. even though the top rates were more than twice as are today.y the taxes paid by the rich have actually been fairly consistent over time. t not's not to say rates couldn't go higher for the wealthy to raise revenue.
when we hear about those magical rates of 70% helping to reduce inequality. it's worth noting the rich rarely payil re for nightly business report, i'm robert frank. we've beenelling you abo senator elizabeth warren's proposed wealth tax. now she hasnt iied something else to do with the additional revenue, she wan to wipe out americans college debt and pay for tuition at public what exactly is she proposing to do on student debt? how does that work? >> what she's going to do is use a chunk of that wealth tax to outp to$50,000 in hat would student debt for anyone who makes under $100,000 a year. if you make more than $100,000 a year, you could have some of your debt wiped out, phasing out at 250. if you make over that, you wouldn't get any. she says that 95% of the people who now have student debt would see a redtion in thatdebt.
and 75% of those pple wou have their debt wiped out. >> she wants to pay tuition at public universities, right >> she also in this program, has a program to give money to states so they can providetu ion free college at both 2 and 4-year institutions, she would also put 100 billion dollars into pell grants which pay for nontuitions expen and have another $50 billion fund to help historilly black colleges. it's a massive program to try to change the equation on higr education. >> how much money are we talking about here? >> itt would c $1.25 trillion over 10 years. that is lesshan half of what her wealth tax has raised. she's proposed a staggering amount of taxes.io $4.1 triover 10 years. 7% over corporate profits. l of that i you add up what she's proposed. she hasn't even accounted for
all that money yet. more proposals to come. wa john harwood iington fo. there's a new ceo a kraft/heinz. that's where we begin tonight's market focus. th current ceo will be stepping down june 30th. he'll beepced by miguel patricio for 20 years. kraft/heinz has had a difficult year, highlighted by an sec subpoena in february. stock was down a fraction today to $32.90. halliburton posed stronger than expected revenue in t the recenturge helped lift the global profits. >> the price in deterioration is now behindus. stock today closed at 31 prnt 09
a share. >> kimberl clark posted stronger tecn ed profits. today's shares surged the most we've seen since the financial crisis up nearly 5 1/2% to 130.25. whirlpool beat estimates for the quarter, but they issed on revenue. the two factors drove their cernings raising p and keeping costs in line. that sent the stock higher in initial after hours tradin we are ithe beginning stages of a wave of ipo's, from lyft to pinterest and many more. in their rush to go public, some companie could beacing unintended consequences. a wall street journal report sayshehat uber and lyft ipo's might lead to highe fairs as companies deal with addedsu prs to turn a profit. then there are, of course, the
quarterly earningsreports. the forward guidance, all of which some critics say can lead to short term thinking by management. some question whether going path is always the bes to success for some companies. joining us tonight is j.p. eg j.p. good t see you. welcome back. >> thanks for having me. >> there are plenty of young entrepreneurs, whose goal it to take their company public, that for them is safe. then they chafe at all of the new scrutiny? is that always the best ph to scuss for them? >> obviously, the decision of whethe or not to go public is made long before the company would go public when they're taking on venture capital money and other investments that are going to see a way to get their stment back. these companies are not always thinking through fully, because
theyeaon't have to with it if they aren't successful, even if they are it may be3, 5, 7 years before they're going to have to do that. once they've taken on that money and that big investment, other than stretching out to kind of -- like uber has been doing to avoid going public. you're faced w h adecision, you have to find a way to generate that liquidity. >> it's not just young trepreneurs, you had veterans last year, warren buffett and jaime dimo both said that they think that corporate america should do away with forward guidance. there's this balance that to achieve between what the shareholders and public need to know. abou corporations and this short term thinking that goes with having to guide forward guidance. >> no question. eing accountable to analysts calls really puts a huge amount of pressure on these ceo's.
at the cost of all else, whether getting rid of all forward guidance is the right path or getting rid of quarterlies to go with twice a year, even once a year, some soror of ition from the companies. these are all reasonable options to figure out -- to make it out to stretch time horizons. and think about innovation, responsibility and long term sustainability of business model. >> is the pendulum about to swing the other direction, have we gone too far expecting too much from public corporations on a short term basis? is it going to start going the other direction do you think? i think two things, we are seeing a lot more discussion about new prosals and different ideas that would cut back on some of these things. i think there's a lot of talk about and research looking at these issues, there's a lot of coern that innovation is not happening in the u.s. and in
corporate america in t way it has in the past. especially compared to countries like china. when you put those two pieces together, recognizing that innovation is one of the key challenges tha people look at as having being cut back bypu goingic. this is a time we're going to seriously, and look at this ia lot more detail. >> no doubt we'll have you back at that point. thanks again for joining us tonight. >> thank you. coming up from semis to social media, two ectors to watch as the earning flood gates are about to open. the chinese coffee chain has filed for u.s ipo.
the compa is looking toaise up to $100 million. that could c they plan to open 2 to 300 outlets a month, and at that rate it would overtake starbucks by the end of this year. samsu i said todt's going to delay the rollout of its galaxy fold smart phone. the deviceur needser improvements before it can be sold to customers. it plans to announce a new release date in the coming weeks, there were reporast week of defects and preview models of that phone. the phone was originalayd to be available in the u.s. this week, with hefty price tag of $2,000. more than 140 s&p 500 companies are scheduled to release their quarterly earnings results just over the making this the busiest week for
the earnings oiason. it's to get a lot of attention because of sharp gains in that group's stocks recently. invechters will be paying close attentiod to what was s to drive the sector even higher. >> investo are now more optimistic that a trade deal gets done. betwee predent trump and president xi. that's one reason investors have moved back into thes. ch >> semiconductor companies have ha e significantosure to china, china is an important manufacturing the second reason that it's important is trade itwues n the u.s. and china have a significant impact on global economic activity and chips companre highly sensitive to that. >> another reason chip investors are f more confident. a friendlier federal reserve. which has indicated no more rate hikes wil be coming this year.
that eases concerns that policy makers could slow the u.s. economy. impacting economically sensitive lsctors like the semis. it lends confidence that m & a can pick back up in the sector. with more deals like invidius's deal to acquire melanox. there's confidence that the back half of this yeaould be stronger for chip companies than the first. >> psmc, a boundary bellwether report last week. on the equipment side, asml reported they too had a strong outloo half those are good for th chip s >> they wonder if the chip market wil be as fast as stock prices anticip
and whether trade deal does get signed and delivered. for nightly business rtoort, josh l san. another group in focus this earnings week will be media companies, investors will want more information about their plans on growth. jul jul julia borstyn has more >> they're working to make their services more appealing as they struggle to rev upheir daily user numbers. facebook's mark zuckerberg talks about how they're sftsing focus to secure messaging across platforms. responding to user zee manned for these types of interactions that are more intimate to the news feed. as facebook struggles with the looming risk of regulation. >> there's beenoncerns in the past that we've covered in tech, and we're paying attention, but we think a lot ofhat is in the stock, given some of these negative headlines.
we think fundamentally advertisers are getting the best roi in the facebook platform. >> one way to keep investors engaged -- >> mark zuckerberg called out, shopping remains one of the biggest opportunies. we think advertisers are continuing to come to the platform given the strength of their >> facebook works to hold on to users and get them more engaged in the wake of scandals andake ws, twitter is also facing the challenge of cleaning up the f platfo bots and fake users to make itservice more appealing to users. that does come at a cost. >> you remember that facebook amped up on last year in order for platform security? i thinkee twitter to do some of the same things, and they're sort of warning people, that's our interpretation, that margins need to come down a . >> snap on the other hand is trying to return to growth after its daily active user numbers
shaped last quarter. ranging from netflix to tinder and introducing games. with so much competition for consumerstime, we'll see whether these new strategies draw users back everyday. for nightly business report, i'm julia borstyn in los angeles. maybe the calm before the earnings storm this week, the dow was down 48 points. nasdaq 17 the s&p was up 3. that's nightly business report for tonight. thanks for watching, have a great even
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