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tv   Nightly Business Report  PBS  August 31, 2013 1:00am-1:31am PDT

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this is nig"nightly busines report" with tyler mathisen and susie gharib brought to you by. >> sailing through the heart of historic cities and landscapes on a river, you get close to iconic landmarks, to local life, to cultural treasures, viking river cruises, exploring the world in comfort. >> the world has an obligation to make sure that we maintain the norm against the use of chemical weapons. now i have not made a final decision about various actions that might be taken to help enforce that norm, but as i've already said, i have had my military and our team look at a wide range of options. >> will he or won't he? the white house lays the ground
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work for a strike on syria, leaving wall street and the world waiting. this is "nightly business report" for friday, august 30th. good evening everyone and welcome. i'm susie gharib. >> and i'm bill griffeth in for tyler tonight. a determined president obama today making the case to justify a u.s. military strike against syria over its use of chemical weapons but no decisions have been made when and how the u.s. will respond, only affirmations no u.s. troops will be sent on the ground. john kerry said administration has evidence the assad regime used chemical weapons that killed more than 1,000 syrians, including hundreds of children. kerry said being war weary does not allow us to turn the other cheek. >> we know after a decade of conflict, the american people are tired of war. believe me, i am, too.
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but fatigue does not take our responsibility. just longing for peace does not necessarily bring it about. >> with more on the syrian crisis, how it's playing out in washington, and what might happen next, we turn to john harwood. a lot of words out today. what more can we gleam about the timing of a possible strike against syria? basically, what happens now? >> they haven't signalled the timing, susiusie, but it looks e a strong likelihood we'll strike, sooner rather than later. the president leaves for st. petersburg on tuesday, the meeting at the g 20 and congress comes back on the 9th of september. i would be surprised if the strike has not happened before both of those things take place. >> and what do you expect the president to hear from the g 20
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people if it hasn't happened by that time. you have a lot of the community they talked about today that has been very silent throughout this, john? >> they have been silent. the british house of commons voted down an authorization of force yesterday. the president got a call from prime minister of france and has the idea that the french are supporting the possibility of a u.s. action. i just got off the phone with a conference call at the white house was conducting. they said syria will come up at the g 20, not a subject of formal meetings, and i think the president will get no shortage of advice, if in fact, it's not taken place by then. >> a lot of the conversation what the u.s. will or won't do. what if syria or allies really retaliate, what are you secondary consequences we might face? >> that's are unknowable effects
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of striking military and why so many people are nervous about this prospect but when they look at all the options, every one of them is bad. which is the least bad option? because the united states has an interest in reinforcing it's own credibility, having said that chemical weapons is a red line and reinforcing the worldwide norm against the use of chemical weapons, the white house seems strongly on a path to deciding that the least bad option is in fact to use military force. >> john harwood at the white house. thanks. on wall street the threat of u.s. military action against syria weighed on the markets. the averages ended lower for the first time in three sessions but the final trading day of the month of august closed another down week and the biggest monthly decline for the dow and s&p since may of last year. also hitting the markets today, disappointing consumer spending and person income figures for the month of july, both rising
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1/10th of 1% last month signaling a possible slow down. the dow when said and done and nasdaq down about 30 points. the s&p lost 5 and for the month the dow is down 4.5%. the nasdaq dropped by one percent and the s&p 500 down by 3%. for wall street, the volatile month of august is over, but starting on tuesday, september is chalked full of data releases and events that could influence the federal reserve's assets buying program and have traders bracing for more wild swings in the has mo >> reporter: it's a big week for economic data and the federal reserve to figure if it will taper at the september meeting. that makes it a huge week for markets to watch the data. tuesday we get the manufacturing report, down a little from the
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prior month but at a healthy level. auto sales at 15.7 million expected, the adp jobs report to forecast the government jobs, 170,000 jobs created in august and the government jobs report 173,000 expected for the month of august with the unemployment rate unchanged at 7.4%. on top of that, we'll have five public appearances from four fed presidents, two of them is the september 17th, 18th meeting. it could be enough to prompt the threat to stimulate the economy, but the economy has to show a pickup from here. consumer spending in july rose less than expected, getting the third quarter off to a weak start. the key, listen fed officials and what think think of the economic reports and if they lean towards tapering or not. ben bernanke hasn't made a major
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speech orrn the economy since m july. >> joe, always good to see you. >> always good to see you, too. >> tough month for august, but september is typically the worst month for the stock market. do you expect another tough month for the market? >> i'm expecting a busy month for the market, and it will start off with a bang. a short week next week but very, very filled with economic data not only from here in the u.s. but abroad and i think as people return back from vacation, there will be quite a bit to chew on. >> joe, you heard the report from john harwood in washington talking about options the u.s. military may take over the next couple days. let's say something does happen this weekend, what kind of market reaction are you expecting on tuesday? >> you know, honestly, i think the initial knee jerk reaction will be negative. despite the reports that i've
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read and that, you know, this effort will be targeted, it will be very measured and brief. it's hard to imagine or envision a scenario where u.s. action doesn't have greater implications on the entire region. of course, you worry what does it mean for tension with iran? does it mean as far as what is going on in egypt? will it have impact there, of course? about relationships outside the middle east and russia? i think you may very well see oil prices pick up again, and as a result of that, i think there may be a pull back in the markets. >> last spring, fed chairman bernanke through out there there was a possibility they began tapering in september. september is upon us. a lot happened since then. do you think they are likely to begin tapering or not? >> i do think they will tape they are september. a lot happened but important to remember how the fed is looking at this. it's really a cost benefit analysis. what are the benefits of
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additional asset purchase from this point relative to the potential cost? it should be pretty clear the economic backdrop is improving. it not perfect but things are getting better, and i don't think additional asset purchase makes any sense. for that reason, i suspect you probably are going to hear of the fed tapering later next month. >> this is an extremely complicated and tricky time for investors. what have you been telling your clients at jp morgan about what they should do to prepare for syria or the fed or the jobs report next week? should they do with portfolios next week? >> first and foremost keep an eye on the fundamentals. of course, any international action on behalf of the u.s. will have an impact on the market in the near term. focus on fundamentals. in the long run, stock markets fall and if things are in fact, improving, that having been said, we are expecting a little
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noils in the markets next week and clearly what is going on in syria only complicates things. you need a disciplined approach to risk taking, and that means the right exposure to stocks and safe assets like bonds despite the fact rates may be rising. >> that's joe, a global market strategist at jp morgan chase. a federal judge is speeding up a trial objecting to a huge airline merger. challenging american airlines and u.s. airways will start on november 25th. that's good news for the two carries since the justice department wanted it to start next march saying it needed more time. it's called a black budget and no one is supported to know what is in it, however, top secret documents disclosed by nsa leaker edward snowden show a massive amount of money set aside for u.s. spying operations outside the cia or the nsa.
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amen jaifers joins us with me. sounds like a spy novel. >> absolutely. this is one of the most grossly held secrets of the intelligence, how much does it spend on the things that it does, how many employees does the united states intelligence community actually have? they want to keep that secret. thanks to this leak from edward snowd snowden, "the washington post" broke a blockbuster story and detailed for the first time what exactly is in the budget for the intelligence committee, including more than 21,000 employees at the cia. the first time we've seen this level. >> very fascinating reading that story. i know you looked over it.
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what stood out most for you? what do we know now more than before? >> in this era of drone warfare around the world, the cia reporting a 14.7 billion-dollar budget, that makes it the biggest component for a long time folks thought maybe the cia was no longer the dominant player in u.s. intelligence, maybe the national spashl intelligence agency that flies satellites and maybe the nsa was spending money. we know 14.7 billion going to the cia every year. >> of course, everybody will ask how much damage does this leak do? >> u.s. intelligence officials hate the fact this information is out there in the public domain and other people say if the united states taxpayer pays $52.6 billion on anything, they should be able to have some sense of what they are spending it on, and whether it's results.
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including blind spots like whether or not we know how safe pakistan's nuclear weapons are, or whether or not we know anything about how capable the chinese new advanced fighter jet is. so strengths and weaknesses revealed in this report. >> put this in perspective in terms of budget numbers, how does it compare to the what the u.s. spends on intelligence a couple years ago? >> "the washington post" calculate as best they could. it's difficult because we don't have historical information, either, like we didn't have this in the present day. this makes u.s. spending on intelligence now higher than it was even at the height of the cold war by, you know, $10 billion or so in current. >> really adds up when you put it together. thank you is much, amon. we know the price tag for higher education is costly, but now some alumni are helping current students make college pay off and we'll show you how.
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first, a look how the international markets closed today . apple has a brand-new way to get you excited about the newest iphone being unveiled in less than two weeks. starting today, apple stores will allow current iphone owners to trade in the older working models in exchange for a credit you can use towards the purchase of a brand-new phone. tonight we begin market focus with general electric, which issues store credit cards to more than 55 million americans as it focuses on core industrial operations.
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ge is siting concerns about the banking industry. at the close, shares of ge was up fractionally on an otherwise down day closing at $23.14. big lots, positive quarterly earnings. they beat analyst estimates but despite the good report, the company is lowering the full year earnings outlook because of weaker sales. but the news did not seem to disduring investors from bidding up the stock. shares rose more than 2% and closed at 3 5.42. it wasn't a sweet quarter for krispy kreme. krispy kreme shares tumbled 15% but as you can see the stock more than doubled so far this year. media is stepping up to compete against giants in the radio industry. the radio broadcaster is paying
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$260 million in cash to acquire dial global, one of the largest producer and operators of radio stations in the u.s. cumulus is selling radio stations to finance the deal. stock rose 2% on the news while dial global doesn't trade on any major stock exchanges, tumbled 48%. our market monitor guest is buying stocks now with the concerns about syria. kevin, always good to see you. >> good to be here. >> i assume you're investing for the long term but not concerned about the short-term head winds political and economic? >> we focus on fundmentals and are long term and we look at opportunity in the marketplace. we have seen over the last year a 20% plus rise in the equity markets, not driven so much by earnings up 3% but really
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investor whose have become more comfortable with taking on risks. so prices moved higher last year and this is the first time we had any pull back. we had the dow off 4.5% in the month of august. you have to go to the spring of 2012 to find a pull back which would have give an value investor like us an opportunity to evaluate. >> you gave us the name of three stocks you're recommending tonight. let's go down the list. you start with anheuser-busch, bud trading, what is your take on this? >> we like budweiser for a variety of reasons. it has a well-scoped international brand and tied to consumer trends, which we find to be particularly stable. the stock is under valued and pulled back. we think the stock could be north of $110. so we like the stock for a total return play, especially given the fact there is a descent 2%
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plus dividend yield. >> you also like walmart, the number one retailer, even though lately we heard about softness among consumers. >> yeah, these are consumer stocks tied to trends and you can point out rightly that lately the consumer has been a little weaker. but a lot of what has happened with these companies relates to global weakness. we think in time that will eventually feed into consumption and while the current income spending patterns for the last month is weak, over time you find that the consumer is stable. so we like walmart, we think the stock can trade up north of $80 and provide a nice return. >> the third stock is not in the consumer area, acn, what is the
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story here? >> this is a company to provide services to companies around the wor world. a tremendous depth of resources. it spending is weak. overall investment spending is somewhat weak but a grate franchise and as companies are pressured to deliver a profit growth, i think it makes all the sense in the world for companies to drive profitability to turn to a company like them over the long term. so we like automatic three of them because they provide good value, given the fact the markets have pulled back in here. >> fair enough. any disclosures on any of them, privately or for your company? >> people see the market, we have a business relationship with budweiser and anheuser-busch and that stock is also part of our analyst select list. >> very good. kevin, market strategist. good to see you. >> thank you.
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the college football season kicked off last night bringing many alumni back to campuses to root for theirs. these days some of those graduates are not only looking for a victory on the field, they might be scouting for investment opportunities through the current students. in the final installment of the series new ways of paying for college and making it pay off. mary thompson looks at alumni angels giving wings to new businesses. >> reporter: for students, college is a big investment. for alumni, college may be the place to find them. >> if you go to college campuses nowadays, it is remarkable to see the level of entrepreneur activity there. >> reporter: he's a proud graduate of the university of wisconsin and founder of silicon valley badgers. it's a growing number of alumni groups putting money in companies founded by students. the common college experience, a
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selling point for investors. >> investors generally like to invest in people that are maybe one or two degrees away from them. automatically there is this bond and loyalty that develops, which is essential for any start up. >> reporter: they estimate there are about 50 angel alumni group from schools like harvard, marquetmarc market and more. one of those schools, bailor university, graduate david grubs turning to the baylor network. >> we're one of three selected at the angel breakfast and after the presentation we had about six weeks of due diligence where they would go through and interview us and poke holes in the business to make sure we have a viable investment. >> reporter: for various fees,
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he lets small and medium businesses set up websites. he plans to use the funds raised to hire more workers in increase marketing translating into higher revenue. >> right now we're planning on closing out the end of the year around six figures and next week, we'll be in the low seven figures, and that's the goal. >> reporter: a goal that's a score for the students, school and alumni. for "nightly business report," i'm mary thompson. >> well, coming up, summer may officially have a few more weeks left but the summer box office is closing, but a record bounty is in sight for studios it turns out. more on that in a moment. first, how commodities, currencies and treasuries faired today.
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seen any good movies lately? amc is counting on it. it filed paperwork to sell stock to the public for the first time ever. they are the second largest theater chain owned by china's group. it's hoping to raise $400 million and might use the proceeds to pay down debt and acquisitions. a major milestone, disney "monsters university" has surpassed $700 million at the global box office, landing that film just behind the same studio's other animated hits, "toy story 3," "finding nimo" and and "up." it will take in about $19 million in ticket sales. despite the success of those educated, monsters, hollywood
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had a weak start and things rebounded for the studios with big hits over the summer. jul julia borston breaks down the winners and losers. >> reporter: with the helps of iron man and man of steel, the all important box office season is on pace to beat the record 4.4 billion-dollar revenue. >> we had 15 films that have done over $100 million this summer. it was a deeper slate. >> reporter: this record, despite some massive bombs, most notably disney's "the loan ranger" fell short of expectations. it will take it down for as much as $190 million. even with "the loan rangers" disappointment, disney is still the big winner of the summer. "iron man 3" and "monsters university" are the biggest of the year together grossing more than $2 billion worldwide. the top six films this summer
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were all seek wells, franchises or reboots proving it makes sense for hollywood to double down the investments in brand names. >> well, i have seen "the fast and furious". >> the most recent was "wolverine". >>" star track". >> what did you like about it. >> a lot of things. >> reporter: comcast universal benefitted from two sec wells. the second and fifth biggest films of the year. and viacom cashed in on star track. warner brother's "man of steel" brought it back to live. sony is the loser. all of the studios are increasingly relying on the international box office to drive profit. >> if you're not going to have a big success internationally, keep the budget small.
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>> international tick cut sales will make films based on establish brands. that's "nightly business report" for tonight. thanks for joining us. i'm bill griffeth. >> bill, great having you. >> always enjoy it. >> have a great weekend, everyone. see you on monday. "nightly business report" has been brought to you by. >> sailing through the heart of historic cities and landscapes on a river, you get close to iconic landmarks, to local life, to cultural treasures, viking river cruises, exploring the world in comfort.
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the following is a co-production of kqed and the center for investigative reporting. >> in california's fields, things are changing. crops are less plentiful. >> we're seeing two-thirds of a reduction in volume out of our southern growing regions. >> insects are more abundant. >> our temperatures have increased by two to three degrees fahrenheit, and that seems to be enough to keep them from being frozen out during the winter. i did end up losing one field -- probably a quarter of a million dollar hit. >> water, already scarce, is now too salty to sustain crops. >> if you don't have enough quality water to farm, then there's limits to what we can do with genetics. >> coming up -- climate change pushes california growers to new limits.