tv Nightly Business Report PBS November 25, 2016 6:30pm-7:01pm PST
this is "nightly business report" with tyler mathisen and sue herera. record setting run. stocks lev tate to new highs on this holiday shortened trading day, but how much gas is left in the market's tank? america shops. black friday it's an annual event and after a a rocky year, retailers have a lot ride ong this holiday shopping season. go small or go home. the russell 2000 index not just its longest win streak in 20 years and our market monitor says there are some names that are still worth buying. those stories and more tonight on "nightly business report" for friday, november 25th. good evening and welcome. i'm tyler mathisen.
sue herera is off tonight. well, door busters for stocks on this black friday, consumer were out shopping for bargains while investors returned from thanksgiving to buy up equities. the dow, the s&p 500, the nasdaq and even the small cap russell 2000 all closed at records. extending the rally seen since election day. stocks have risen sharply on expectations that the president-elect will cut taxes, redu reduce regulations and spend heavily on infrastructure. today, the dow industrial average rose to 19,152. the index closed at a record every trading day this week. the nasdaq added 18. s&p 500 was up eight. and the major indexes saw their third straight week of gains. about 1 57b9.5%. the old cliche is that the markets hate uncertain thety. trump's election removed some of
that, but the market's power fu raply since november th is built on a lot of promises and campaign intentions often improve hard to achieve, so, our stock, pricing in too much anticipation right now. here to discuss is ernesto ramos. welcome. good to have you with us. there are a lot of make america great again exp peckations built in to stock prices. are stocks vulnerable as a result? >> well, stocks have front ended a lot of the good news coming from trump's election and now pro growth programs, so there might be room for back, but in general, i think the market will continue to move higher because we have a much different environment today than we had a few weeks ago in terms of his announced programs. even if they come in at a smaller amount that he actually talked about, in terms of the
infrastructure spent and in terms of the tax cuts. it's still going to be very positive for earnings and at the end of the day, earnings is what drives stock prices higher, so i still thisee room for further upside. a lot of that has been front ended in the last couple of weeks. >> so, even if some of the anticipation does not come to fruition, you think that even smaumer achievements will be correct directionally for the market. let's talk about the big winner. that's so far, among others, have been industrials and defense stocks, but most particularly, financials. how do you see them performing over the next few months? >> well, financials are actually in the sweetest spot they have been for quite a number of years because of the following. you had a very flat yield curve, which compresses their net interest margin, which is their ability to make money. so now with interest rates moving higher, especially on the
longer end of the curve, that allows the margin to expand and that's very president obaositiv. number two, the profit of lower regulation or growing back from a dod frank, which working as part of a bank myself, i know how much, houchl resources are devoted to just come plying with regulators and it's an inordinate amount of people and effort. so, just roll back that isn't going to allow us to be b more profit bable. it's very positive from those two perspectives. finally, higher economic growth allows for them start lending again and the promotion should grow from here. >> something like i was told the other day by a very good source something like 40,000, one out of six employees at chase, are tied up with complying with regulations. thank you very much.
now to black friday. what a day it has been. retailers reporting a very strong start to the holiday shopping season. at both brick and mortar stores and online. that's a positive sign for an industry that gets as much as its 40% annual revenue from money spent. macy's opened its doors at 5:00 p.m. yesterday. the ceo said 16,000 shoppers, more than last year, lined the street waiting to enter its flag ship store in manhattan and they were there to shop. >> on a value day like today, they're going the buy. not wonder and wait will it be there tomorrow, when i buy it online the next day, so, here, clearliy an urgent response and reaction. that combination of using technology and the experience of being inside the store is a way to consumers are shopping today and will continue to be so in
the future. >> five mile traffic jam at wood bury commons up in upstate new york today to get into the mall there. initial indications of an internet sales were also strong according to adobe general index. shoppers spent more than $1 billion online. that's up from a year ago. reflects a broader trend away from traditional brick and mortar stores. target shattering records. they said thanlgs giving day was the biggest line shop iping dayn the history. traffic grew by double digits compared with a year ago b and sales blew past last year's record breaking cyber monday. target's ceo said shoppers with were buying up consumer electronics. >> tvs were selling at an unbelievable rate. we had a 50 inch 4k tv for under
$250, but we saw great results are wapple with the ipads and watches. new gaming systems from xbox and anyonintendo. target stored open t add 6:00 p.m. thanksgiving evening. national retail federation expects -- americans to shop. an crease from a year ago and president obama ty news for an industry that's struggled to boost foot traffic for much of this past year. courtney reagan is at the mall in dayton, ohio. you're back home, my friend. that's very nice. >> i sure am. it's really lovely to be back home. it was always great is that this is a mall that i've been to multiple times, so i've gotten to sort of figure out the of what black friday looks toki from year to year. you were talking about retailer's web sits and how much of the traffic is moving online and retailers can do everything that they can possibly think of to get themselves dry run scenarios leading up to a big
shopping day. like thanksgiving or like black friday. but you really don't know what's going to happen until the day comes. it was going pretty smoothly until about midday of black friday. around that time, macy's shoppers saw the sign that came up on the website that said temporary shopping issue or temporary shopping pass, check back in about ten seconds. reload yourer. that got a little better, but there are still issues clicking through the website. william sonoma's web and mobile sites were having trouble loading. sometimes upward of 25 seconds. that is way too long on any day, but especially on black friday. retailers say that could cost as much as $30,000 an hour when that happens, so yes, sales were strong, but might have left some on the table. >> you call that a good problem to have, breakthrough a problem is a problem any way you look at it. what are shoppers at the mall
telling you? >> you know, it's the same story every year and it probably will be for many to come. many years to come. it's a good one. all about deals. that's what black friday weekend is all about and hoppers here feel pretty good about what they've gotten. we know tablets are on average, 25% off. last year, 12% off. so that's as good. many of the shoppers started at the discount stores, then went to the anchor stores and shopped until they dropped. take listen. >> not gone to sleep yet. >> really? >> yes. we had our turkey and moved out at 6:30 and have been going strong. stop stopped a at kohl's. >> we started at walmart. we've been to target. we have been to the outlet malls in cincinnati. we're going to do bunch of other places i can't even think of. >> so, analysts are telling me traffic is a lilt l light and shop pi, but many of the mall
managers like jll say traffic and sales are on par with last year, if not up, so we're going to have to wait and see how this all shakes out but so far, so good i think for black friday. >> bring me one of these kill brownies. >> i'll bring you more than one. >> thanks a lot. tvs and game always seem to be big sellers. technology has come to the toy aisle. adidi roy reports from redwood city, california. >> this power wheels ride on toy that can literally take your child for a spin is a hot seller this year. the joy stoke controlled gadget is an example of a toy driven by tech, a popular theme among top sellers this year. even the wildly popular hatchimoles are created by spin
master, a toy company with a robotics division and known for innovation. toy robots, kid-friendly drones and caterpillars are popular this year. many of these product rs wi-fi enabled. >> so, in an opportunity to take something and go into your ipad or android and really program something for it to move. it's really cool. you have to be learn toting, kind of understand how things work, so to see an item that you created through technology, through the robotics, it allows the child to kind of really feel like they created something on their own. >> it's not the only way technology is transforming holiday shopping. the manager of this toys are store in redwood city, california, says online retail giants like amazon ebay have stlung black friday lines. >> they go online and compare and review. >> shoppers plan to spend more than half or 51% of their
holiday shopping budget online. >> this is the first time we've seen online actually out pace in store from a sales perspective over the day period. >> tail but retailers are fighting back. highlighting their option to buy online and p pick up in stores. at toys "r" us, they're emphasizing the experience of black friday as a cultural eventevent rather than just a day. >> this is our kickoff to the season. our kickoff to the big game. all the things we're practicing for for the consumers, team member, especially for the customers. getting the right flow in there. you look around the store today, we're well jam packed. >> this store is in the middle of 30-hour marathon sales event. they open thanksgiving ands and will stay open through this black friday. trying to compete with online
ret retails. >> j.c. penny has had a rocky run over the past few years, but the department store is executing a strategy it hope wills turn thinning around, give shoppers spending in stores. morgan brennan inside a penny's at the roosevelt field mall in garden city, new york. >> they had the earliest start time on thanksgiving. opening its stores at 3:00 p.m. and shoppers lined up to get in. at least here at this long island location. >> we got over here by like 5:00 and we started shopping and now that we've been out for almost three and a half hours. >> since then, staffers have struggled to keep pace with boxes strewn about. they have been rolling out appliance showrooms in many locations, including on this one, betting on the housing recovery. under marvin eliassen, who was
hired from home depoet in 2015. the retailers also expanding its partnership with sephora. at this long island location, there's been a lot of foot traffic in both areas and as you can see here, long lines and many of the stores catchiers, so, what is boring shoppers? >> the $10 off, 7.99 for the sheet set. towels. practically things are free in here. >> the question will be how much has j.c. penny, not to mention other brick and mortar retailer, had to discount to get these consumers through the door and what experience to profitability. for "nightly business report", i'm morgan brennan on long island in new york. >> our next guest has retailers thinks will be the winners and losers this holiday season. jessica born. welcome, good to have you.
i want to start by asking you whether black friday is important as it used to be since so many of the sales have been spread out. not just the thanksgiving day, but the last weekend and even before. >> that's true u. not just about one day of sh shopping. what we saw is a lot of retailers break their black friday sale, black friday sales and their marketing messages this week in the mall, monday, tuesday, wednesday, even thanksgiving was, we saw a lot of traffic, a lot of people going to the mall looking for those deals because they realized the black friday verbiage was there. >> how does it work out for them? do they make more money because they spread out the sales or does it all come out in the wash the same way or do you know? >> i think they do make more money. i think people want to get their shopping out of the way early. i think they're maybe less inclinding to do to the mall on one day. maybe they think before head out
of town on a tuesday or wednesday, they can pop in the mall and get those savings early. >> et let's talk about some of the names you think are going to do well. the stores that seem to have some mojo. this time around. name a couple. i see american eagle outfitters is one of your faves. what are they doing right? >> yes, i think what they're doing right is they've really welcomed all teenagers with open arms. what i mean by that, as you know, aber come biand fitch, many years ago, they released exclusionary practices and they haven't been able to repair the damage they did and american eeg have offered a collection that's in some cases, one size fits all. they have a new collection with the hash tag we all can. it's about body positivity. fashion that's safety for everyone. aeri is doing well by using real life models and really welcoming everyone to store. >> when you say that abercrombie
was nair, did you mean you had to look a certain way? have a six pack abs? >> yes, you said it well. there's a certain look and the ceo did come out and say hey, we just wabt the cool kids shopping here and i think a lot of people won't forget that. >> you put on your list a couple of others that have not been necessarily knocking the cover off the ball lately. coach and target. though target's turn around seems to be going well. what do you like from them quickly? >> actually, what we like is the combination of fashion, home and grocery. it's important to remember most target locations offer a large grocery selection and while people are in store shopping, fashion is appealing to them. also going to do holiday grocery shopping and liquor shopping and that's a huge plus. zpl thanks. we appreciate it. still ahead, small caps have
advanced for 15 straight sessions. and tonight, our market monitor has names for your shopping list. wells fargo asked for a lawsuit to be dismissed over the creation of the fake bank accounts. the bank instead want the disputes settled in private arbitration. the motion is aim ed at a class action lawsuit filed after wells agreed to pay a 185 million in penalties for opening up unauthorized accounts. johnson & johnson begins talks with a swiss drug maker about a potential merger and that's where we begin or i try to begin market focus.
the health care company con if i wered today it approached the company after news surfaced of a deal and they said the discussions are in early stages. while they noted that it is not guaranteed a transaction will be reached. shares rose almost 1% to 114.13. china's largest online travel site sea trip international will buy the uk based company sky scannerer for 1.5 billion. share of sea trip up nearly 10% on the session to 45.01. u.s. department of defense made an advance payment of nearly $1.3 billion to the aircraft maker lockheed martin as part of a contract that could be worth more than 7 billion. the final terms of the agreement for 90 fighter jets is still being finalized. shares marginally up 265.92.
zblnc do daddy reportically in ta talks to take over host europe group. the move would let go daddy expand its footprint in europe. shares rose 1%. they fin ired at 36.82. our market monitor has some call smaul cap names. last time, she recommended urban outfitters, vf corp., down about 4%. intel, 18% higher. she's kim forest, senior equity analyst at ft. pit capital. great to have you with us. i was asking one of our earlier guests whether he worried too much expectation has come into the market and that we may be vulnerable. how do you read it? >> well, i think that's always the case. because you know, stocks really react to market news. and it looks like the s&p 500 is
looking for you know, a double digit year next year. which respect to earnings. and if we don't get that, we might be disappointed as investors and more importantly, as stockholders. but that being said, time's on yur side. if you hold stocks long enough and have confidence in the management team and the company and the products they make, you know, things generally turn out okay. >> you have three stock picks. we're going to start with one called 26. a hometown pick of yours. in pittsburgh. and one of the things in it and in your u other pick that you like is significant management or foundership ownership. >> right. and in the world of small cap, where if you're in to buying a smaller company, you're probably taking on way more risk and thus, you should be expecting way more reward. so, how do you redoe dews those risk sns one of the ways we do
it is we look for management's that have a lot of stock that they either bought themselves or bought by founding the company. and you know, that a is the case of 26, the founder still owns an appreciable part of that company and there are a lot of employees that are there from the very beginning of the company, so that's kind of a risk reduction strategy. >> about 7 357b9% of the company it makes equipment for opt kl networking. let's move on to one that's at the other end. that's interparfoon. tell us about it. >> well, there are two founders there. together, they own about 44% of that business. and they make perfume. a lot of that gets bought in europe and we enjoy holding it because they act like a shareholder. they are. >> it smells good. >> yes. >> finally, net scout.
what do they do? >> system and network management. softwa software and hardware. they've grown a lot and did a large acquisition and we think they're going to be able to do really well again because the founders still involved and owns a large portion of his own wealth is in that company. >> we'll check back with you in a few months. coming up, shopping small. why independent retailers have a lot ride ong tomorrow. small business owners hoping that people wait until tomorrow to go shopping on small business
saturday. today was a big win for retailers last year and at kate rogers reports, they're hoping for the same type of turn joet this year. >> small business saturday is all about community. encouraging customers to step away from malls and computers to support local neighborhood businesses. in new jersey, anthony desalas is hopeful customer service will help set his business apart. >> we pride ourselves on our service. free wrap. free delivery for local people and so, we go above and beyond for the service and i think there's a really strong push and a grass roots movement for shop small. when it's picked up by an organization like -- it becomes that much stronger. >> one of five loeks in new jersey, does about 50% of its annual sales in the laquarter o the year. they have participated the last three years and have seen sales
increase each time. it was launched in 2010 by american express, landing on the saturday after thanksgiving. last year, sales hit $16 billion across the country with ate million people shopping. good news for retailers like tons of toys. research shows that 76% of people who are aware of the holiday say they plan to shop small and 48% say they plan to spend more than they did in 2015. for alicia schaffer in california. this small business saturday is a bit different. she started sell iing habd made head bapds online and it became a big hit on etsy. she decided to take plunlg and open her first business. >> it's our follow thag we kind of listening to them and say we're going to take the plun and go against the grain. we're going to open up a store and really deliver our customers an amazing custom shopping ek
appearance. >> back at tons of toys, christine kelly say it's worth shelling out a few extra bucks to help the community. >> you might pay more, but you know what you're getting isn't just the product you're buying, but the personal connection you're making with someone in the community. >> i'm kate rogers in new jersey. and that will do it for "nightly business report" for this friday. thanks so much for watching. have a great weekend, everybody, and we'll see you back here on monday.
- ( theme song playing ) - ♪ it's all right, it's ok ♪ doesn't really matter if you're old and grey ♪ ♪ it's all right, i say it's ok ♪ ♪ listen to what i say ♪ it's all right, doing fine ♪ ♪ doesn't really matter if the sun don't shine ♪ ♪ it's all right, i say it's ok ♪ ♪ we're getting to the end of the day ♪ - ( light turned on ) - god! bit jumpy, are we? i've been freebasing espressos for the last two hours. it took ages to upload these photos. your home's supposed to be your castle. mine's turned out to be a financial bloody life-raft. you're doing the right thing. letting a load of grubby strangers in my flat? eyes on the prize. think about the money.