tv Nightly Business Report PBS September 30, 2016 6:30pm-7:01pm PDT
♪ " with tyler mathisen .sine big gains. stocks rallied at close and an unusual quart that saw the nasdaq gain 10%. and the next three months could get even more interesting for investors. betting the farm. wher the key battleground state of iowa is taking on greater importance in this presidential election. and paying it back. our market monitor looks for dividend inves and has a list of stocks he says you should hav on your buy list. those stories and more tonight on "nightly bu for friday, sep good evening, everyone. and welcome to this last day of the quarter. and of september. i'm tyler mathisen. sue herera is off tonight. >> investors ended the quarter in a good mood.
stocks rose sharply and once again it was the financial sector that led the way as it has on and off over the past three months. now yesterday, bank stocks sand bagged the market. today they lifted it. on unconfirmed reports that deutsche bank has reached a deal with the u.s. justice department. on that story in a moment. meantime, the dow jones indust avera finished the session today up 164 points at 18,308. nasdaq added 42 and the s&p 500 gabed 17. today's rally closed out an unusual third quarter, one that saw turbulence created by the brexit vote early on, fresh record highs later and continued uncertainty a of the three major indexes, the nasdaq was the big winner for the july to september period, up nearly 10%, as you see there. but now we start the fourth qu of 2016, and as bob pisani reports, it could start to get really interesting for if you're an average
investor, you probably don't want volatility in the stock but professional traders like volatility, because they make money trading price swings and stocks. aside from some volatility earlier in th year as the oil dropped and when the uk voted to leave the european union in june, there hasn't been much volatili this year. traders hopin for big market moves around the clinton/trump debates were also disappointed. but hope never dies and traders are pitting their hopes for market volatility in the fourth qur on two events. the presidential election and the fed meeting in december. it's not clear either will produce much market movement. the market seems to be position for a clinton victory with the house going republican, a divided government. should trump win, that would cause volatility, though many point out a major source of that potential voly is trump's an ticket knee for janet yellen. particular if yellen resigns, would cause a problem for the market. in december, markets believed
there is a roughly 60% chance the fed hike rates. the fed is the big gorilla in the room. is there anything else? there is a recession, but that's not on the horizon. and you could have some kind of exogenous shock, like a terrorist incident. for "nightly busine" i'm bob pisani at the new york exchange. >> kevin nichols joins us now for what he expects in the fourth quarte he's chief market strategist at river front investment group. mr. nicholson, welcome. good to have you with us. bob pisani teed up a lot of things, everyg from an exogenous event to the resignatn of janet yellen if mr. trump became president. what do you thk the biggest variable is, as we -- for investors as we go into this fourth quarte >> well, i think the biggest variable is the election. i think if donald trump wins the election, then you're going to see market volatility. you will probably see the stock
ma go down, because they -- just the fear of the unknown. if hillary cli wins the election, then it's a little bit more of the same. and so i think at that point the market could grind higher. >> so the underlying fundamen of the market, as you handicap them right now are? where are they on a scale of 1 to 10 with 10:00 really good? >> i would probably say the fundamen of the market would probably be about a 6. what we have seen with the economic numbe that have come out this quarter in the u.s., we have kind of see a mixed bag of economic numbers. so i think that right now we're not operating on, you know, full cylinders. we're not gung ho. but at the same time, i'm not going to run away from the markets either. i th that, you know, we're position in a good place. >> let's talk about some sectors that you think might be able to push higher, no matter what happens. an let's focus on two of them. energy/oil and f
>> sure. with energy, i think that with opec, the resumes this week, cut production. that's good for energy. it puts a floor on oil at about $40. it also allows the u.s. drillers more of the shale drillers to be able to use those drilled but uncomplete wells, bring them back online. so that will put oil in a range-bound -- >> right. >> state of 40 to $60. >> so if the deal -- if the deal is good for the oil stock, good for the shale dealers, what about the financials and what is your one favorite sector over the next quarter? >> with financials, i think that financia are probably going to do well. as we get closer to a fed raising interest rates. the fed held off this last meeting, but we do believe in -- and have indicated they are
going to potentially hike at some point this year. and we think that hike is going to come in december. and, you know, obviously higher interest rates are going to help banks as far their net intere margin, and so we think that, you know, financials is a good place to be going in the fourth quarte >> all right. kevin nicholson with river front investment gro in my home state of virginia. to the economy now. consumer spending, softened in august. personal consumption, which measures how muc ameri spend on just about everything was unchanged from the prior month. and that was the weakest reading since april. and a change from the second quarter, which saw consumer spending advan at its fastest pace since 2014. incomes, meanwhile, grew more slowly lt month. debt flight the pullback in spending, ano report shows that sentiment rose in september. that suggests that households are feeling pretty good about th and when consumers feel good, they do tend to spend more, which in turn helps economi.
american households have been the main driver of economic gr a concerning statement out of cognizant, something no shareholr wan to hear. the i.t. services provider says it is conducting a corruption the probe, which is in its early stages, is centered on possible violatio of the foreign corrupt pract act related to payments iindi the company's president abruptly resigned and no reason was given for his departure. the revelations caused the stock to drop 13% in trading today. wells fargo's ceo could receive a bigger payout than original thought. according to a "usa today" report if john stumpf were to retire, hes sti positioned to collect pension accounts and stock, valued at more than $134 mill that's more than the previously report $123 million, and his potential payout has grown, apparently bec he exercised
options to buy an additional $500,000 shares since the end of last year. this comes despite the $41 million forfeit he announced earlier this week. more now on that deutsche bank story which as we reported was a big driver of today's stoc this as concerns eased about the health of germany's biggest bank. t ceo expressed confid in the firm's financial position. then there was a report, though it's not been independently confirmed, that the bank is close now to a settlement with the u.s. justice department related to its dealings in mortgage securities. that settlement, according to the report, is at a price well below the $14 billion originally floated. an with that, the stock took off, rising 14% and easily making up all of yesterday's losses, pl annette wiseback reports today from frankfu
tonight, there is a lot of relief, i'm sure in the towers behind me, which he are the headquar of deutsche bank. there are rep that there might be a settlement with departme of $5.4 bil u.s., which is a lot lower than the number previously reported, which was $14 billion u.s. dollars, but still the number might be incorrect, because accordi to the law in germany, the company has to react immediately if a number is out in the market, which is close to the real number they ar discussing. take that number with a pinch of salt. of course, the whole crisis comes as a very bad timing for deutsche bank. there's a general f that the european banking sector is not very stable, and, of course, deutsche bank being one of the biggest banks is very much in focus here. so the lender is trying to fend off certain speculators, john krin, the ceo of the bank, wrote
a letter to its staff, reassuring the staff about the stability of th bank and also saying there are certain forces in the market speculating against the bank that they have to do what they can to fend those speculators off and reassure clients about the stability of the bank. "nightly b in still ahead, battleground breakdown. why the cornfields of iowa could pay a -- play a very big role in this year's presidentia ♪
federal investigators have found one of the black box recorders from yesterday's commuter train crash in hoboken, new jersey, which we told you the crash killed a woman and injured more than 100 others. the data recorder will help investigs identify key informatio lik the speed of the train, as it approached the station. with the election a little more than a month away, iowa is in focus. the state has an early voting window, one of the few states that allow weeks of in-person voting ahead of election day. and this year, it's the only battlegr state to do so. andrew ross sorkin reports tonight from des moines. >> reporte eve four years, iowa's cornfields become battlefi for presidential >> i-o-w-a!
>> r early voting began thursday, and the rest of the country is looking to the hawkeye state, which has voted democrat in th past five out of six presidential ra iowa didn't again its bellwether status because it's repres of the country. according to the census bureau, the state's population is more than 90% white. its economy driven by farms and commod and farmers in iowa have a lot to say about the issues impacting them most. >> being taxed to death is no way to grow an economy. it's like if i wore stiletto s out to the cornfield. it doesn't make any sense. so we need to have serious conversatis abo what are we going to do about this tax policy run amok. >> one of the important issues for us is getting more trade. agriculture is one of the things that has the most to gain from tpp, and that has been good for us too. we need more exports. as a result of these concerns, candidates ship their focus while campaigning here. bruce wrathstetter is advising donald t when it comes to
agricultur >> if you think about al culture and farming, we have unfair trade agreements, not putting agricultd oth industries in the u.s. on a fair playing field. two, overgovernment regulation that's increasing costs and creating uncertainty for your business. right. >> so the combination of those two is not a good thing. >> reporte but clinton is focusing her ground game away from the farms in polk county. in de.where she spoke thursday, the democratic camp hopes to close the gap by courting a and younger demographic. millennial 35, are growing remarkably, twice the national rate. trump didn't win in the caucuses in the state but is leading the polls. fo "nightly busine report," andrew ross sorkin in des moines, iowa. we begin tonight's market focus. cloud computing company,
nutanix, more th doubling in the first day of trading, one of th anticipat ipos this year. in a year, with not many offerings. priced last night at $16 each, and that was above the ex nutanix at $37 even. the aluminum maker and former dow component, alcoa, says it will split in two, effectiv in november. after the company's board approved the move. the company will separate its fast-gro plane and car parts business from its traditional aluminum business, a move that aims for higher returns amid the prolond slump in commodity prices. al up nearly 2% on the day to $10.14. the spice maker, mccormick, raised its full-year guidan after reporti quarterly earnings. rise 3% with adjusted earnings per share. up 21%. mccormick credited the growth to products that are, quote, on
trend with consumer demand and healthy and high-quality flavors. particular in e u.s. and china. sh of mccormick up better than 2.5% on the day to $99.92. the activist hedge fund elliot managem in mentor graphics to more than 8%. elliot said shares of the electron design firm were undervalued and enhanced efficien and pursuing those strategic opportunities they always talk about. met akbrafices to $26.44 and costco has come under fire for selling fake tiffany rings. the federal jury ruled yesterday that costco should pay $5 million to the jeweler for its counterft dia engagement rings branded with the tiffany name. the jury said the luxury retailer was also held to punitive damages still to be determined. an investor was interested in the earnings after the bell yesterday. shares up today more than 3% at
$152.51. > a market monitor lik dividend stock he says are less susceptible to rising interest rates and could be a good source of income in today's environmen time he was on, that was back in january. he recommended cvs health, down 6%. at&t up 18%, and ford basically flat off about 1%. mark spellman, portfolio manager at alpine funds. good to have you with us. are you still comfortable with each of the picks you made last january? or not? >> well, if you add in the dividend back in january, at&t's dividend was 5.5%. if you add some of that back in, that stock was up over 20% on a total return basis. we like the stock, we have cut it back. we think fair value is about $42 a share. so there's limited up side. but it is a good source of income, and we're comfortable holding it. ford, we're a little concerned about. e still making tons of money on light trucks and suvs, but the car market has become very competitive. that stock had a 5.5% dividend
and if you add that in, you did make some money on that. cvs, we actually like going forward and we think it's been susceptie to these hearings about mylan. you know, the ceo of mylan was in front of congress talking about epipen prices going from $100 to $600 and we think she was trying to deflect the criticism on to the pharmacy benefit managers, which cvs is one of. we think the stock looks like a very g value right here. >> one of your three picks. currently 89. you have a 106 price target on it. still like that one. let's move on to lowe's, an $89 price target on that one. credible trading at about, what, 73 -- mid 70s. >> yes. lowe's continues -- their results have been okay recently. but the macro environment for lowe's continu to be very good. th emplo numbe are good. homeowners continue to increase. we like that stock.
it's a ver rea valuation. th raised the dividend by greater than 20% in each of the number of years. we think that's going to be going forward the same kind of profile. really do like lowe's here. >> third pick is american tower. tell us what they do and why you like them. >> yeah. american tower is a vital part of the infrastructure globally now. and it's one of the top ten positions in our global infrastruc fund. they own 140,000 towers througho the world. you know you're using your phone for a lot more than you used to a number of years ago, and so are businesses. and they sign long-term leases to lease these towers, mobile data growth has been going up by greater than 50% over the last number of years. we think that's a trend that's going to continue. and because we like dividends, this is a stock whose dividend has doubled in the last three years. and we think it's actually going to -- on pace to increase another 20 to 25% going forward, about a 2% yield. >> 140,000 towers. that's amazing.
qu thought, if you don't mind. will the market end higher than it is today? >> you know, all along we have been looking about a 6 to 8% market this year. because of the multiple is kind of high and we were basically getting from es growth. but it underscores how important dividend are and rising dividend are, as well. because 40, 50% of the total return for the market is going to come from dividends. we think you're at the higher end, maybe you get a little bit more -- there's a lot of worries out there as far as the elections are concerned. might be a little bit volatile, but we think 8% is probably what youe going to get this year. >> we'll take it. mark spellman, thanks, with alpine funds. >> it has been a year since customers began dipping cards rather tn swiping them at cash registers across america. and those cards known as emv chip cards are intended to create security and prevent the use of counterfeit credit cards. as contessa brewer reports, the switchover has been bumpy with retailers slo to adopt the change and confusion on the part of c. >> 600 million chip cards have now been issued to consumers.
about half of all the cards in use. but those high-tech cards can't be used at two-thirds of the nation's stores, since fewer than 2 million retailers are ready to accept them. >> this is an incredibly complicad undertaking. both on the consumer side, banks undergoing emorous billion dollars in costs to upgrade to the new chip cards. on the merchant side, it's an undertaking for merchants, as well. >> for main street retailers, the cost of the equipment is roughly $2200 for each terminal. they have to put it in their store. >> before the emv chip technolo transition, credit issuers were liable for fraudule in-store purchases. now the responsibility has shifted to merchants. they haven't upgraded to using chips. the chip technology, known as emv, for europe owe pay master card visa, creates a unique code for each transaction, wit
tiny moik row processor on the card, communica with the terminal. down on the possibility of fraud at the p master card and visa report fraud has dropped by roughly half at retailers using the emv technolo. but overall, fraud is actually on the rise this year, expected to reach a record $4 billion. >> criminals are, understand, migranting their fraudulent activities from merchants hav upgraded to chip readers from those who haven't. a national retail federation survey shows 86% of retailers expect to have chip systems up and running by the end of the year. the nrs insists stores have done their part. and blames the credit card issuers for dropping the ball. almost 60% of stores that have not adopted the chip technology say they're waiting on their certific by the card industry. half waiting six months or longer. and in the meantime, customers are getting the hang of it, even if they wait a few seconds
longer. a nerd wallet survey shows 78% of americans say they have positive feelings about the chip cards. ofcourse, there's customers may want to pull out their smartphones. apple pay, android pay and samsung pay offer the same security as chi contessa brewer.nereport," coming up, taking a swing. will the ryder cup give golf the jolt of excitement that it so desperatel ♪
a lot of data on tap, and here's a look at what to watch next week. on monday, we will get two reads on the manufacturing sector. tuesday, the economy will likely be a big topic of conversation in the vice presiden debate. friday, the employment report for september is due out, something the fed, wall street and main street will all be focused on, and that is what to watch ne there is no bigger event in the world of golf than the ryder cup. pits the best golfers in america against the best in europe. it only happens once every other year, but this year, there's more at stake than just the cup. the business of golf is also looking to generate excite ar the game. dominic chu reports from the hazelton golf club in chaska, some of the best, most dramatic golf of the year will be played over the next few days here at hazeltine. gathered will be big and some estimates have a quarter milli fans showing up
for the three-day event. and what the world of golf is hoping for is enough exciteme to energize casual golfers, as well as rea out to those thinking of taking a swing at the game. >> it's unlike anything we get to do here on it tour and sport. when you show up here on friday morning the first tee and have that emotion running through you and the usa stripe or flag on your shoulder, and realize how important this is to so many people besides yourself, and the pressure that goes with that. >> but you don't necessarily have to be here in person to feel the this year's ryder cup will have a lot of television reach, as well, touching nearly half a billion homes in 160 countries. it used to be that the u.s. dominated the competition, and has won 25 of the last 40 cups ever contested. but golf has become much more global, and european teams have won 8 of the last 10 cups. expectatio are high for the u.s. team. >> the country is ready for a win. i think the ryder cup is ready
for team usa win. we know it's going to be tough. every single ryder cup, it's always an unbelievably tough competitio this will be no exception. >> golf could use some more positive momentum. for the first time in years, participn in e game is on the rise, all be it modestly. but there are seismic forces at work aga most recently, sporting goods giant, nike, announced they were going to stop making golf clubs, balls and bags and focus solely on c german competitor, adidas, is interest in selling its tailor-me golf equipment business and spigot declared bankrupt as well. >> the way that golf is being consumed is moving a bit away from the traditional i'm going to go out to the golf course, i'm going to spend six hours there, into more shall i say concentr bites. and you're even seeing golf moving away from the traditional golf facility. innovation is going to be important, and how the particular man po themsels along with
the retailers to adapt to the change. an that's going to be where the battle is won or loss. >> the thousands of fans here at the ryder cup in hazeltine and millions watching at home could be the next step in helping golf overcome its recent troubles. for "nightly busine dominic chu ryder cu in chaska, minnesota. for tonight.s "nightly busine i'm tyler mathisen. than for watching. have a great weekend, everybody, and we'll see you back here by barnes & noble,