tv Nightly Business Report PBS November 24, 2015 6:30pm-7:01pm PST
this is "nightly business report" with tyler mathisen and sue herara. >> rising tensions. oil prices rise, bond yields inch lower after turkey shot down a russian fighter plane keeping investors on edge. >> border business. the companies and states trying to cash in on the growing trade between mexico and the u.s. >> best fit for you, the right questions to ask when selecting a brokerage firm so you don't get hit with hidden costs. all of that and more tonight on "nightly business report" for tuesday, november 24th. good evening, everyone. welcome. tensions are running high across the globe tonight. early today, turkish jets shot down a russian warplane near the syrian border. that put moscow in direct conflict with a nato member. sending tremors through multiple
markets most notably oil. crude spiked nearly 3%. its biggest one-day gain in three weeks. the rise in oil sent the energy sector higher and the stock market and that helped lift the broader stock market after some initial wobbles. the dow jones industrial average gained 19 points to finish at 17,812. it the nasdaq added a fraction of a point and the s&p 500 tacked on 2.5. but the heightened concerns also drove money into safe haven assets like u.s. treasuries which saw prices climb and yields dip. michelle caruso-cabrera has more on the incident and the consequences. >> reporter: turkey confirmed it shot down the warplane this morning near the region of la tack yag claiming it violated turkish air space and violated repeated warnings. russia denies that the plane crossed the border into turkish skies. footage of the incident shows a warplane on fire before crashing on a hill.
two crew members parachuting out. a pressure release said one of the pilots killed, the other captured russia later confirmed that. this isn't the first issue when it comes to russia and turkish air space. last month they shot down a russian drone they said violated the air pace. vladimir putin said the shooting down of the plane was a stab in the back and warned of sift consequences in relations between the two the countries. the situation spooked the markets and raised concerns that the fierce battle in syria and northern iraq would widen to a much wider conflict between russia and a member of nato. but in an emergency meeting, nato urged turkeying to show restraint. and president obama said today they wanted to ensure this did not escalate into something bigger. president obama emphasized he thought this happened because russia isn't fighting the islamic state in syria but using air strikesings to support bashar al assad.
>> this points to a on going problem with the russian operations in the sense that they are operating very close to a turkish border and they are going after moderate opposition that are supported by not only turkey but a wide range of countries. and if russia is directing its energies towards dash and isil, some of those conflicts or potentials for mistakes or escalation are less likely to occur. >> reporter: president hollande said when he meets with putin on thursday in moscow, ellen courage him to change his strategy and instead dedicate air strikes solely to battling the islamic state. >> the travel stocks fell today after the state department issued a worldwide travel alert. the reason increased terror threats.
that pressured shares of priceline, expedia and trip advisor. airline stocks fell with delta declining the most and shares of hotels and cruise lines also lower. hampton pearson with details on the warning which came just days before the holiday weekend. >> reporter: the terror warningsings from homeland security and the state department are going out during the busiest travel week of the year with millions of americans traveling by planes, trains and automobiles during the holiday period. the fbi and homeland security officials warning more than 18,000 local law enforcement agencies to be prepared for extremist who's could seek to replicate the effects of the paris attacks using similar weapons and tactics on a smaller scale. most major cities have seen beefed up security since the november 13th paris attack. now, the focus security experts say will be on so-called soft targets likely to attract large crowds and so-called active
shooter scenarios. >> law enforcement have to be vigilant. they have to be able to quickly respond to an active shooter scenario and respond in a way that could be most effective to them. that's what they're asking local law enforcement to do. >> reporter: homeland security says there is no evidence of an attack here in the u.s., but officials offer no such assurances for what might happen overseas now that isis has shown it can attack in the heart of europe. so the state department is telling americans traveling worldswide for the next 90 days to be extra vigilant. >> if you're going to be traveling, just maybe take an extra step and try to decide what's going on in the country. know where you're going. plan a little bit better. it's very important to not let the bad guys win. >> right. >> now had, not let somebody tell us be afraid. >> that state department alert is the first in nearly a year after a month of deadly terrorist attacks on three continents that have killed
hundreds of people, government officials rshs aware, there is indeed anxiety across the country. for "nightly business report," i'm hampton pearson in washington. let's turn now to our guest for more context on the rising tensions around the globe and how it will impact travel and why the market's reaction remains relatively muted. david mill pass and sean hennry president of crowd strike services a security firm. welcome to both of you. shaun, let me start with you. this weekend, would you let your mother or your son travel to europe? >>. >> i actually do have family members traveling to europe. they asked my advice. i agree with other people that i've seen talk about this pretty adamantly about not being fearful that credible threats are being addressed that there is extra security, there's a lot of effort that's going inning to identifying using intelligence to look for these types of attacks.
and i think that it's really critical that we not slow our lives down completely. we've got to be aware and alert certainly. we don't want to be naive and reticent, however and it's really critical we continue to move forward in a productive way but also in a way that allows us to be safe. we need to be vigilant. >> and yet, david, we also now have very much increased tensions between russia and turkey putting kind of a different slant on the situation and the fight against terrorism. >> that's right. we've got oddly, and it's a new problem, russia right in the middle of both the nato, assad battle going on. you know, nato wants assad to be gone. and then separately, in the shiite versus sunni conflict. so russia's backing iran, and assad in syria. and that's putting a lot of tension on the gulf states because oil prices are down.
so i think this is truly a dangerous situation. add to that the refugees, which europe really hasn't resolved. so i think this is going to go on for a while and it does create a lot of pressure and tension. it comes on the top of, on the economic side, what's basically a profits recession and a commodity recession. we've got new profits data out today down 25% year over year for undistributed corporate profits. that's the money that corporations have to invest down 25%. >> it sounds, david, like you think the equity markets most particularly are being naive or not paying enough attention to all these threats whether they are terroristic in nature or economic in nature. if you feel that way, why do you think that is? >> well, i think we've gotten complacent. we've been in a seven-year bull market and i'm not a perma bear or or exactly bearish. i think we've got three things coming together right now that are problematic. equity markets should be paying
more attention. profits, commodities and the huge tension right there in syria that we saw this morning. >> shaun, let me turn back to you if i could because this worldwide travel alert, that doesn't get issued very often by the u.s. government. it's a relatively rare occurrence on a worldwide basis anyway. that i think has people quite nervous about what's going to happen over this long holiday weekend. and have you black friday and you have thanksgiving parades and things along those lines. how do you feel about the security forces here in the united states and their ability to enforce and protect at those big events? >> yeah, i feel very comfortable with security here in the united states. i spent 24 years in the fbi. so i've worked very, very closely with the intelligence services. i've worked global little with law enforcement and intelligence agencies and certainly domestically here with state and local law enforcement and the fbi, the joint terrorism task
forces. these organizations while this is big in the news right now, rightfully so, what happened in paris is a tragedy did, law enforcement has been dealing with these threats for years and they continue to deal with these on a regular basis. even things that the general public doesn't hear about, law enforcement, the fbi are working on 24/7, 36 an 5 days a year. >> shaun, is it different this time though because you seem to have isis, you seem to have al qaeda and boko haram all competing for the headlines here. >> it is. it is, sue. and it's different because we've seen the tactics and techniques of the adversaries change, we haven't seen these types of attacks like in paris. multiple attacks, well coordinated, tactical, long guns can, suicide belts against soft targets. it's changed. but what the law enforcement community is doing, they are currently working collaboratively with western
partners, they're collecting intelligence. they are working to disrupt on going planning. they're working to disrupt people they know might be associated with the jihadi cause, not necessarily tied directly to isis but people who might be inspired, copycat. >> a quick answer from you, if i might. what should i do with my money in the face of the triple threat of risks that you see? hi, tyler. well, we've been in this, there's nothing else but equities phase. i think right now, caution meaning lightning up some on equities, being heavier on bonds, waiting to see how this shakes out in terms of the global slowdown that's under way. i'm worried about the refugee -- i don't think the previous speaker was taking full enough account of the hundreds of thousands of refugees that are on the move right now this winter. >> an extremely difficult problem to solve there. david malpass with enseem ma global and shaun, we appreciate your time tonight. >> still ahead on the program,
one of the biggest growth opportunities for the transportation sector may not be where you think. that story coming up. the economy grew more rapidly over the summer than previously thought. gross domestic product expanded at a seasonally adjusted annual rate of 2.1% in the third quarter. better than the first estimate of 1.5%. business investment was stronger and stockpiles rose. but a key measure of corporate profits within that report fell during that period. >> despite that increase in growth, americans have lost confidence in the economy and it's because of the job market.
according to the conference board's latest survey, fewer people expect more jobs to be created in the coming months. they also don't expect their fwlks to rise. the decline in confidence cops as a bit of a surprise since employees did add more than 270,000 jobs in october. home prices rose more than expected in september. the s&p k shiller home price index reports a nearly 5% increase over last year. san francisco, home prices rose an the fattest pace, up 11% followed by denver and portland, oregon. last night we told you that existing home saleses in october fell as rising prices increasing mortgage rates and a lack of supply kept some buyers out of the market. trade, of course, is a critical part of the u.s. economy and trade between the u.s. and mexico is growing with about $1.5 billion worth of goods moving across the border every day. that's creating huge opportunities for companies hall all those goods. marginen brennan reports from
santa teresa, new mexico. >> reporter: this is union pacific's $400 million santa teresa facility. a huge rail hub right near the border. as the company looks to capitalize on increased trade with mexico. >> it basically doubled the size of the yard, 200,000 lifts annually we can do. and it can grow to 700,000. >> that's quite a number. >> yes, hopefully the business grows like that. >> trade between the u.s. and mexico totals $530 billion a year. a 550% over the past two decades since nafta was signed. with costs rising in asia, mexico has become a manufacturing destination of choice for makers of appliances, cars, even computers. >> that operation is primarily dedicated for the built to order model for computers. for dell and hp. it is the largest of its kind in the world of any company.
>> that means more freight moving across the border and transportation companies like union pacific are cashing in. >> from a you know pacific standpoint it represents 10% of the company's total revenue. it's big, it's growing. good growth opportunities. >> it's a two-fold opportunity for transports as raw materials and products come into mexico from the u.s. and asia. are assembled and shipped back north even this locomotive. and it will only get bigger as consumered pend more and new initiatives including the u.s. exportation of oil to mexico come online. a number of companies see dollar signs. kansas city southern and berkshire hathaways railway has been expanding their operations ties to the border. rider system xpo logistics and western ker enterprises say the cross border business is one of their fastest growing segments. >> it's a big part of our business. mexico is 20% of revenue as it relates to our one-way trucking
operations. it's 14% of total revenues, thing we see getting bigger and bigger over time. >> it isn't just companies doubling down. states have become more aggressive about capturing trade through their border crossings, as well. until now new mexico has lagged neighbors with the most and biggest crossings in texas followed by california and arizona. but the state has taken dramatic steps to change that and santa teresa is now the 9th busiest freight border crossing in the country. >> governor martinez's vision and certainly the vision of our department is to make new mexico the gateway of trade for the americas. >> a fast track customs program for freight is in the process of rolling out and the state and its mexican counterpart are working to develop a binational city that would share resources and potentially dissolve the border all together. i'm morgan brennan in santa teresa, new mexico. >> hewlett-packard's last report
as one public firm disappoints. tonight's market focus, the company which recently split into the twoissed the street's earnings and revenue estimates. lower pc sales and a slump in demand from businesses weighed on the firm's quarterlies. after the close, shares of hb initially slipped. the shares of hp enterprises were initially higher. tiffany's saw its sales slip in the third quarter which it blamed on the strong dollar and lower tourist spending. the retailer gave a full year profit forecast below the street's consensus. despite that, shares up more than 3.5% to 79.36. hormel reported mixed quarterlies. they gave a bright outlook for the next year as profits rose helped by spam, of course, and muscle milk brands among others. the chief operating officer says acquisitions helped the company's results. we have to continue to grow the brands that we have, and we'll certainly continue to be on the lookout for companies and brands that meet our strategic
fit for us. those are the things that are really going to allow us to have record quarters. >> shares were almost 3% higher to 71.28. dollar tree's third quarter profit missed estimates as the company was hurt by expenses related to its acquisition of family dollar. still the company's top line results beat estimates and same store sales increased. shares rose more than 6.5 to 74.16. >> campbell's soup reported earnings that topped estimates and hiked its full year profit forecast. shares rose 3% to --
failure but there have been no deaths reported yet. most of the infectionses reported from the western united states. costco off slightly today, 162.19 the close. more than four in ten u.s. investors cite low fees and commissions as the primary reason for selecting a brokerage firm according to a new survey. but is that the right way to vet a brokerage firmle? sharon epperson is back with us with more on that. what should investors be looking out for? >> everyone looks at the account minimum, are the commissions the lowest out there. they need to be looking at the fees that are charged for trading stocks and bonds and there may be some fees particularly you don't think about bond prizing necessarily when you're looking at brokerage firms. a lot of people looking at how they can do the best stock trades. you want to see if there is a markup fee. it could be as much as $13 per
bond. you want to make sure you know if they have one and how much that might be. >> i would assume you would want to look at the kind of investor you are. how much do i trade, what do i trade and what are the charges on the kinds of transactions that i do. >> that's absolutely right. that's particularly important also when you're looking at stock trades, as well and looking at price improvement which is basically when you place an order button, make sure that the price you're getting is actually an improvement perhaps than what you're seeing there and many brokers will tell you how much they can give you in terms of price improvement. that can also save you money down the road. >> you mentioned some of the components. there's also how much hand holding do you need. >> exactly. >> i would assume education seminars, things that you can taed. >> when you're trying to evaluate a broker, one of the things you really want to look for, something tyler mentioned at the beginning, how do you want to use that broker and what type of professional and firm is that. and look at research and guidance there. because do the broker check and check them out.
find out not only about commission and feeses, not only about price improvement but what education and research do they offer. this is your money. you want to be able to make informed decisions yourself. and then how can you reach out to the folks? can you call them, e-mail them, can you go in person to get your questions answered because the way you like to sbhir act with your broker is very important in helping you to make the right decision. >> give me a human being every time. >> i have a lot of questions. >> i don't want an faq. >> we do this. we should know. we want to talk to a human being. it's up to you. that's what we say. >> thanks, sharon. coming up, the power shift taking place in retail and the companies that are trying to capitalize on it.
here's what to watch for tomorrow. loads of data including reports on durable goods orders, personal income and spending is out. and a read on housing with new home sales. and that is what to watch for on wednesday. investigation into walmart's operationings in brazil finds possible misconduct including potential foreign bribery. "the wall street journal" reports that federal authorities are lookinging into $500,000 in payments to an individual hired to obtain government permits. investigators also want to know whether senior walmart employees approved those payments. shares were little changed in initial after-hours trading on that report. german prosecutors have launched an investigation into suspected tax evasion at volkswagen. it's related to the automaker's emissions cheating scandal and centers on the fact the 800,000
cars understated carbon dioxide emissions leading to lower vehicle tax rates. prosecutor's office says it is investigating five employees. everybody loves a bargain. that's why many department stores are opening up off price chains where designer goods are sold at a discount. and with the overall retail sector struggling, it is one area that many companies hope to find growth. courtney reagan has our story tonight. >> reporter: it's no secret that some retailers are struggling. but there is one area where sales continue to grow. at off price stores like t.j. maxx and ross stores and outlets. at these retailers, promotions are already built into prices and the merchandise is either overstock from a traditional store or it's made by the same designers but specifically for the outlet store. and shoppers love the thrill of those deals. >> department store may be overplised. smaller stores definitely better
deal. >> do you like to get the best deal for the best item. >> things go out of style so quickly. then you spend a lot of money on something and don't wear it next year or you don't like the way it looks. >> higher end department stores are building up their own off price offerings as fast as possible to capture share. saks has doubled the off print it had several years ago with plans to open two manhattan locations by 2017. bloomingdales just opened its first urban outlet in the manhattan, its 14th outlet store. nordstrom plans to double its rack store locations by 2020. a much faster growth rate than its plans for expanding the traditional store. lord & taylor is getting in the game, too. this is find at lord & taylor, the first of a total of six stores that will hope by the end of 2016. and coals is piloting its own off price september.
while sales at macys traditional stores have been disappointing, the retailer is quickly expanding its new off stage backstage store expansion. the first four opened this fall with 53 more scheduled to open over the next two years. >> i think it will benefit macy's in the long run because as they look at data and as we look across the landscape of retail, it's an important sector. off price pa remains attractive to consumers. so we expect it to be a growing sector. >> reporter: while the off price and outlet surveys is a big growth sector now, some question if there's enough demand to go around for the new players looking to capitalize and whether or not it will cannibalize sales at the traditional stores. for 234rks i'm courtney rigen in new jersey. >> blue origin, the private space company backed by am son's ceo jeff base zoes made space history. it successfully landed a reusable rocket back on to earth after an unmanned flight to the edge of space. the firm's new shepherd space
vehicle fell a suborbital test mission reaching nearly four times the speed of sound. bezos says commercial flights carrying paying passengers could be less than two years away. not me. >> not me. >> not me. >> we'll be reporting on that. >> yes. that does it for us. for "nightly business report." i'm sue herara. thanks for joining us. >> thanks from me, as well. i'm tyler mathison. have a great groening, everybody. we'll see you tomorrow on thanksgiving eve.
tonight on the computer history museum presents revolutionary. >> when you think of the two industries that have changed people's live i think more than any other is the auto industry and the computer industry. bill ford has been a vocal advocate for what he calls the democratization. bill came to the museum for a personal discussion of ford's future green technology and the cars of tomorrow. >> major funding for revolutionaries is provided by the intel corporation. >> as i was walking around it