tv Nightly Business Report PBS July 29, 2019 5:00pm-5:30pm PDT
t his is "nightly business report" with sue herrera and bill griffeth. >> wall reet's big week from earnings to the fed and trade and jobs. hy the next few days could redefine the market as investors know it. deal. pharma pfizer is merging the off patent ing a ss with mylan, cre new company that controls a medicines.lockbuster battle royale. >> in the entertainment industry, v competitieo game playing is taking off and it could be at the expense of hollywooes those stori and much more tonight on "nightly business report" for monday, july 29th. good evening, everyone and welcome. fourillars of this stock
market converge over the next few days. first there is t earningss is the busiest week for quarterly results of the season. then there is the federal reserve which begins the two-day policy meeting tomorrow with the decision on interest rates due wednesday. trade talks between the u.s. and china are set to resume. and the nation's labor market which has been fuelling the consumer comes into f the release of the monthly jobs report. but today investors were willing to wait and see what happens. with the major indexes hovering around ae high. the dow jones average wast 28 po to 27,221 and the nasdaq fell 36 and the s&p 5 was down 4. bob pisani has more on what lies ahead for investors. >> the calm before the storm. the market is bracing for the busiest week for earningsnd the global economy and fed meeting. so investors are reassured bytr e talks haven't blown up and central banks are keepite
st rates low and will continue to do so and third earnings are n collapsing. they are flattish but not collapsing. the markets aren't expecting any break-through they just need to see that talks are continuing and not faltering and the market seems content with that for now. the earnings roster was light today but later in the week we get clorox and proctor and gamable and samsung and chevron and mobile. they need to see the guidanceer be than expected and the tech't earnings doneigh estimates down. and finally on the economy, the markets are expecting the federal reserve to cut rates by a quarter point on wednesday, but still a minority belie the fed will cut by a larger 50 basis pointslo as thel economy is weaker. it is difficult to say whether 25 basis points will be enough to stave the market's appetite for more stimulus or spark a model selloff. plenty of datahead of the
decision, including u.s. data on personal income and spending and home sales and consumer confidence. also we have manufacturing data from china and european retail sales. we'll get the widely watched july jobs report on friday. expected to show gain of 166,000 jobs in the u.s. last month. for "nightly business report," i'm bob pisani at the new york stock exchange. a former chair of the federal reserve is throwing her support behind an interest rate cut. janet yellen said the move is justified because low inflation and a weaker global economy. she said what happens in the rest of the world affects us. >> although the u.s. is doing well, i would be focused on wanting to keep it doing well, to keep the expansion o track. and i think in light of the risks, i would be inclined to cut a bit. i won't see this as the beginning unless things change of a major easg cycle.
>> she made those comments yesterday at the aspen institute economic strategy group meeting. so let's turn now to mark luchiny to discuss this big week more the market will mean for you. he's chief investment strategist at janneyy. montgom >> thank you, sue. >> so there is a awful lot on the market's pla this week is there one event that we highlighted that you think will take precedence over t other? >> hardly. the one that is tangible is the fed meeting. there is no doubt it is occurring and number iso, there o doubt there is some decision coming from it. the one friday, the jobs report is going to give us a finite reading in the labor market and the trade negotiation remains somewhat ambiguous relative to whether anything will be resolved overayhe coming and we've seen this movie before where the trade talks end a subsequently they pick up again at some later date. baking nk the market is in expectations around a fed
policy shift that -- that could be suppor eve ofity prices so it is not so much the policy move as the accompanying policies by way the press diussions, jay powell will have to offer up color around the decision that was ultimately made. >> let me ask it another way, mark. is the greatest risk for the asside or the downside for the market. ue pointed out, an all-time high, that would suggest that all of the good news has been factored into this market. so is the great efest risk to t wnside, do you think. >> tyler, i do. i don't think it is substantial. i n't think anything tha we'll hear will substantively change the direction of market over the balance of the next, say, three to six months but certainly we could see pressure applied to equity prices. should the fed comy out no rate cut which would be a huge shock to the market or a 25 basis point without accompanying lauage that is equally dovish relative to the prospect of further rate cuts since the
market is expecting two if not three before year end. >> mark, let me turn you to earnings. because to bill's point, g ten the fact we have the market sitting at all time highs, do younticipate increased volatility as the earnings come in in individual stocks, de rnding on how thoseorts come in? >> well i think most dsinitely. what notorious is early on in earnings sean we tend to see results that beat more on than disappoint and as the earning season wears on the disappointment com through more feverishly and we know that earnings over all are not expected to be up much this quarter and that puts pressure on the back end of the year and into 2020, to bail out of market that is trading at a fairly demanding 17 or 18 times forward depending upon how near or faro out stretch your consensus estimate for s&p 500 earning and
as that is why it is iortant that we see the other news flow be supportive because the valuations on a stand-alone basis don't warrant equity prices moving substantively higher from here. >> mark, tahank you. mark luchiny withanney scott. >> i need to wear a name tag or something. pfizer and mylan are mergi part of the business to create a new company that will be one of the biggest sellers of off-patent medicine. the industry has been in -- facing pressure from washington over high drug prices which is led to a spate of recent deals including briol-myers buying cell jean and allergan. mylan was one of the best performing stocks in the market today, up more than 12% and dow component pfizer fell. meg tirrell has details. >> the united states is about to get a brand-new drug company, selling epipen to and lipitor and viagra, some of the best
known medicines but lt patent protection and pfizer,he world's largest drug maker is ready to go in a different diilction. pfizer spin off a unit it calls up john and combine with mylan. it will create a sizable new company. yet to be famed. with sales of up to $20 billion next year. and the marger marks the closer of of a -- chapter for heather bresch. she's best nobody for the pubc for defending the price increases on the epipen and an episode thato contributede stock's major decline over the past few years. the mylan chairman robert coury will be the executive of the new company and pfizer head of up jon michael getler will be ceo. the deal is a culmination of a year long strategic review amid pressure on u.s. generic drug prices and a government rices in then into industry. >> i'll be the first to admit i was one of the skeptics about mylan to get a solution for the
situation but clendly they f just the right party to merge with who had a lot of cash flow and also was willing to do the deal. >> pfizer reported the second quarter results today with revenue missing wall street estimates. forhat company, the deal marks a further streamlining of the business under n ceo albert bore to focus on s medicinll protected by patents and which could command higher price tags. for "nightly business report," i'm meg tirrell. >> and pfize reported soft revenue for the most recent quarter but saw a 30% rise in profit thanks to demand for the branded medicines. that report was released a day earlierhan planned. it is time to take a look at some of the today's upgrades and downgrades. ups was downgraded to hold from buy at stifle citing the challenging macro environment into year's end. the price target is $118 and the stk closed right athat
level, $118.75. starbucks was downgraded to neutral from overweighted at jp morgan. thenalysts say the prize in the stock price is limited following a 90% gain over the last 12 months and the price tagt is 91 and t stock fell 1% to 98.02. and analysts citing challenges facing the whole industry and the inon mechanics union slowdown. that price target is now $34. stock fell more than 1.5% to $30.74. anheuser-busch was upgraded to buy from neutral at bank of america and merrill lynch. the analysts say the cycle of negative earnings is coming to an end. price target $118 and the stock gained 1% to $101.67. still ahead, the fast lane. united airlines wants to make it easier for you security using your finger tips and your eyes.
credit rating agency standard and poors may lower the boeing rating due to the grounding of the37 max airplane. s&p 500 said the prolonged t groundin result in a loss of market share. last week moody's a fitch issued similar warnings. boeing stock fell during today's session. the hea of the european discount airline ryan air said thng prolon grounding of the max to lead to job cuts at his company. the ceo m'lhaelry is concerned ryan air will receive
zero planes by nexummer which could eat into the carrier growth outlook. on an c earningsl o'leary had choice words for boeing which required us to bleep one out. >> we are expecting 58 eric for the smer of 2020 and that is now 30 at best. it may well move to 20, it could move to 10.el and it could move to zero. if boeing don't get their [ bleep ] together pretty quickly with the regulators. >> regulators h we not saidn they will allow the planes to fly again and have not given a time line. united airlines and security firm car are teaming up to bring biometric screening to more airports around the country. and as phil lebeau reports, it is part of a growing trend where your eyes and your finger tips will entually get you through security faster. >> reporter: clear which uses biometrics like your fingerprint or eyes to confirm your identity so you move through tsa check points faster is teaming up with
united airlinesan to e the presence in airports. er it has been about bringing on the parwho want to use it. and delta was an earlypt a and united has come on and they're excited about changing the customer experience from curb tnggate. >> get passengers through the airport with fewer headaches is one of the reason unid is buyingtake in clear and adding kiosks to the hubs like chris christ -- like chicago o'hare. biometrics are replacing the need to y showr i.d. delta used facial recognition instead of checking passports to board passengers on some international flights. now clear is expanding beyond the airport to hertz rental car lanes, some stadium entrances and boon foruying something in the airport or during a flight. clear's goal, ending the of taking out a credit card. >> i was at l.a.x. last night in the -- getting magazines and finding your wallet and your credit card and none of them are
gooder customer ences and kind of painful. this is a big bag like me so over the nex12 months it will be here. >> even though joining clear could cost well over $100, it im cleay do want to be clear. in fact, the security program now has almost 4 million subscribers. phil lebeau, "nightly business report," chicago. exact science is strengthening strong hold in cancer screenings. that is where we beg our focus. lsh will buy and expand testing for breast and profit ate cancer and separately exact science missed earnings expectations but pping revenue estimates. shares of skaktd science fell a fraction to $117.57, genomic health share rose 6% to 73.07.
santa fay had an increase in sales of vaccines and rare disease. the drug maker raised the full year guidanc the stock was up more than 1.5% to $43.03. >> cooper tire and rubber msed expectations due to costs connected to new tariffs on imports from china. it w also hit by restructuring costs related to a facility in londonhere it halted light vehicle tire production. the company lowered the full year outlook. the stock dropped more than 9% to $27.55. uber isg lay off 400 employees in the marketing department. that is about a quarter othe marketing team global work force. the company said the restructuring will help focus on brand across audiences and project and regions. the stock fell 1% to 43.i8 dollars and then aerhe bell transocean mised analyst expectations reporting weeker than expected revenue.
the ceo kriegted uncertainty around oil but added that off shoreroducts do remain attractive. shares were falling in adier hours t and close the regular session down near 4% to $5.37. also after the bell, ak steel posted mix results beating the wall street earning forecast but reported a shortfall in revenue. the steel c saw a decrease in shipments to the automotive mark and shares were volatile in the after-hours session, they closed the regular day up more than 2% to $2.54. sales are growing fast at beyond meat. the plant-based burger maker reported better an expecte revenue and raised the forecast but the quarterly loss was wider than forecast. the company also said it plans to issue additional shares of stock in what is known as a secondary offering and that caused the stock to fall in inial after hours trading. adidi roy has more on beyond meat results. >> beyond meat said it will bring in more revenues in 2019
and that previously thought and the company projected $240 in salesup in 2019 from the $210 thcompany previouslyredicted last quarter. most of the increase is folded into the second quarter revenue beat. why the cenge? river of topline growth is new partnerships in the last two weeks alonen we've s beyond meat land deals with dunkin' donuts and blue apron. the coany cited an increase in sale volume and greater demand from existing customers and it remains to see how it fairs with increasing companies like tyson foods and impossible foods. i'm adeety roy. and the industry is changing and big money following it.
tomorrow as we mentioned earlier, the fed poly makers begin the two-day meeting on interestnd rates trade talks between u.s. an china begin in -- shanghai and an update on he service and demand for the flagship iphone from apple. so another busy day coming up on tuesday. a three-day fortnite tournament turned a aeenager in millionaire and highlighted the big money and power and influence of the competitivert e-spos industry. josh lipton has re. >> it is officia kyle giedorf aka bugga is the best fortnite player on the planet. a 16-year-old gamer fro
pennsylvania, he just won the first ever fortnite world cup. his prize. $3 million. the largest single payout in e-sports history. it took place at arthur ash stadium in new york city. 59,000 tickets were sold and a whole lot more fans watched online. nearly 10 million views on youtube on the final day of competition. >> it fee amazing. i mean, i might be 30 years old but'm here. let's go. >> honestly, it is crazy. i did not expect this many people to show up and this many fans. it is an awesome experience all around. >> the event speakso the powerhouse that is fortnite, a game boasting 250 million players and $4 billion in revenue and showcases the popularity of e-sports. it might sound crazy to some but people really do like watching other people play video games p for bigze pools.
454 million people will watch e sporthis is year, a jump of 15% and a revngue gro 30% to more than $1 billion. mostly from media ghts, advertising and sponsorships. who is watching epos? more than 80% of the audience is male, accordi tonielsen, the average age is 25 with an annual household iome of $70,000. for nightly business report, i'm josh lipton, san francisco. >> and aseople spend more time streaming video game tournaments, they're spendinim less in movie theaters and the business minds in hollywood are very well aware of the intensefying competition. julia boorstin has that part of the story. >> despite the mega-hit, the movie industry is facing big challenges. the domestic box office is down nearly 7% from last year which was a record. the drop comes as options increase for consumers.
including free or inexpensivent t at home. there is the explosion of interest in e-sports and theng increa number of new exclusive content both movies and tv shows made with big budgets for streaming on the small screen. thanks for netflix,n and others ramping up spending. all of this raising the bar for the studios. they need bigger brands and bigger budgets for their movies to stick out from the clutter. the studio that is consistently leave consumers reason to the house and buy tickets is llsney. just broken the time annual box office record and it is only july.bo bolstered by "lion king," the studio set a new record forbihe ggest studio growth in a year. $7.7 billion. disney has the five biggest films of 2019. >> i won't let anything happen to her. >> and disney's dominance is expected to kinze with fn 2 in november and in december "star
wars" the rise of sky walker both expected to hit a billion dollars. >> they do dominate. but in the entertainment market i don't think you feel - or people's time market, i don't know if it is the entertainment market any iore,hink they have plenty of competitors and lots of choices just making contenteople love. the question is how much higher the bar will be for the movie industry. when theedia giants give consumers more options for new excluseontent at home. with disney plus and apple tv plus launching in the fall and then the nbcal univetreaming service and hbo m launching in thepr sing. once again disney may be best u positioned t the megafranchise such as marvel and "star wars" to drive fans movies to subscribe to the streaming service and back to customers. i'm julia boorstin. >> and there is reporthat netflix is investing $520 million to make three big
budget films amid slowing subscriber growth and according the "wall street journal" the move is part of a bigger pish into the entertainment industry once controlled by big hollywood studios. analysts expect netflix to spend $15 billion onhirogramming year. so where is this shift in viewing habits taking the entertainment industry? paul g us tonight is shandly, covering the gaming business for the hollywood reporter. niul, thanks for j us tonight. >> it is patrick. >> patrick. i apogize. i was called ty alrealer earlie. so we're mixed up. >> exactly. >> i'm gobsmacked by the number of people whoild arthur ash stadium.t it is the biggennis venue in the world and they're going to watch other people play video games. ere the e-sports industry going here. >> up is the easiest answer to that question. it is something is growing significantly since about 2012 stateside but globally it is a
phenomenon, mostly in asian markets. >> now we just had a report about how that might and is impacting the movie industry. doouee a confluence where they both coexist or maybe the movie industry can benefit from this new e-sports craze. >> we're seeing video game adaptations and there is some that came out this year, detective t pikachu was highest growing video game film of all time but that trend won't go away any time soon and it is happening on the small screen. in terms of movies competing with video games and e-sports, it is hard to say because we're talking about eyeball at this point. there is only so many hours in a day and people could be on the phones watching content at any given point at any day. so it is really just who could eyeballmost even hastings from netflix, he said they compete with and lose to fortnite more than with hbo. so video gam aren't going anywhere. they're a booming industry right now. >> when saw they were at ash stadium, i'm thinking, are they going to build their own
stadiums at somepoint? is there an infrastructure to be built for the e-sports business, do you think? >> comcast certainly seems to think so. comcast the media giant and second biggest cable provider on thelanet i believe. they are in vesting $50 million to make an e-sports stadium for the over watch team and the philadelphia fusion is being built now. i'm not sure when it will open but there is money in that. and a stadium here in angeles where they filmed the johnny carson and that is the games are held. but this is something that will happen across the country. >> so what companies do you think have the advantage? obviously the company behind fortnite right now but apex legends launch andef my kids red foe preferred fortnite to that. >> epic games are the making of fortnite. ey made $2 billion last year
with just fortniteevhich is unbele number. i mentioned apex, and ea have been around for a long time and one of then iggest players the space. apex legends was their answer to fortnite, it is a battle royale so there is bigger movers and shakers like take two, you have the ea and the acti vision and blizzard does overwatch and also seeing hollywood get into it. there is bad robot from -- >> gotta go. very good. patrick, thank you. nice to see you. thanks for joining us. >> that is it for us tonight. i'm sue herrera, thanks for joining us. >> i'm bill griffeth. have a great evening. see you tomorrow. >> you are.