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tv   Nightly Business Report  PBS  June 10, 2016 1:00am-1:31am PDT

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this is "nightly business report." with tyler mathisen and sue herera. out on a limb. well-known investors are making big calls on the market. but should investors frustrated with lackluster returns follow their lead? a sea change. how the panama canal plans to transform the global economy once again. sky high. why it's getting a lot harder to not just buy a house but also to rent one. all that and more tonight on "nightly business report" for . good evening and welcome. bold market calls. hedge fund billionaire george soros is worried about the global economy. so much so he decided to do something about it. after a long hiatus, he's trading again. this time he sold stocks on the
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assumption they'll go down because of a slowdown in china and issues in europe. and he bought gold. an asset that's viewed as a safe haven during times of economic turmoil. another billionaire investor, carl icahn in an interview today said he agrees with soros. >> i can't help but think he has a couple of real good points. you know, i think there's -- you know, i've been saying it. i think that you have a -- sort of a false market buoyed by zero interest rates and you have to cognizant of it. >> not everyone agrees. one market strategist is calling for stocks to go higher, as much as 20% high are in the next 6 to 12 months. can afford sees a rebound in economy because of rising oil prices and expects corporate earnings to grow. >> how do bold market calls in a stock market that is essentially
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flat over the last year impact investor psychology and investors' investment decisions? joining us to discuss is frank mertha, doctor of psychology, cofounder of there are cross currents always in the market. you've got billionaires, you can dismiss them as old craigie billionairings, or say hey, they know what they're talking about. how is an invest tore make sense of calls that are really at polar opposites? >> i think it helps to recognize that this agreement isn't just normal in the market, it's essential for a market. for every buyer who wants to let go of a position, there needs to be -- pardon me, seller who wants to let go, there needs to be a buyer. disagreement is healthy and disagreement is fine. in a way we're talking about peer p and some members of our investing peer group have more influence than on the records. you just named a couple of them. >> very true. >> i think the way that investors overcome peer pressure is the way teenagers overcome
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peer pressure. develop a stronger sense of who you are what your values, what your goals are, what you're good at, it gives you the confidence to proceed and n wordy about what other people say. >> you're saying the tried and true, have a plan, stick with the plan? >> easier said that done, but yes. to that end, something that people can do when they find themselves a.m. beneficial leapt, pulled in more than one direction, is to help achieve a sense of emotional balance and get out of the trap of thinking in a binary mode. market good, market bad. i have to be in, i have to be out. make what we call a stabilizing trade. a smaller trade. the purpose of which is not financial gain or anything like that. it's really to help reset your psychology, smooth out the waves, and make for an easier ride. >> i can well imagine that investors from time to time, individuals i'm thinking of, can get impatient. the market is flat. i haven't been making money the last year. or, if i'm in bonds, i can't
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make money in my cds or fixed-income securities so i've got to do something else. is that dangerous? >> well, unfortunately, it's natural. and it can be dangerous, cert you know, we like to think we're investing for financial reasons. financial means. but we have these emotional needs and they need to be met. we see other people having gains or feel like we're not making the progress we need to, it creates emotional need to do something about it. >> sometimes the best thing is to do nothing. >> absolutely. >> don't just do something, stand there. . you're exactly right. i think that certainly when investors feel this pull, they get a little bit restless, they may be tempted to make more emotionally impulsive, poorly thought out moves. >> guard against that up pulse? >> absolutely. one of the ways is help mitigate that, to do something small and saves are a bigger problem down the road. >> thank you very much. >> you bet. >> dr. frank mertha,, we appreciate
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it. on wall street the dow and s&p 500 snapped their three-day win streak. as oil prices pulled back from an 11-month high and the bond yields fell. the dow jones industrial average finished the day down 19 point to 17,985. the nasdaq fell 16. and the s&p 500 was off 3. >> one of the reasons why george soros is negative on the market is because of the possible exit by the uk from the european union. the vote is just two weeks away and wilfred frost tells us what's at stake if the country votes to leave. >> reporter: the first thing to know is nothing actually happens on the 24th of june. the referendum is not a binding law, it would just signal the wish of the british people and spark negotiations to begin, setting the terms for separation. if the uk government invokes article 50 of the lisbon treaty, a two-year period begins before they leave. but it's possible they'll begin negotiations in a more relaxed
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and amicable fashion without that two-year restriction. now here are the main issues that the divorce lawyers will be arguing. free movement of people. will britain be able to stem the flow of immigrants whilst minimizing rights it loses for its own citizens on the european continent? second up, free trade. will britain get to maintain the status quo it enjoys at the moment of free tried, or will eu punish them for leaving? finally, will uk be able to continue to passport financial services which allows eu members to offer financial services in the other eu countries based on domestic regulation? switzerland manages that at the moment. but will the likes of frankfurt and paris be hungry to steal market share and block it for the uk moving forward? whilst the 24th of june would see no immediate legal action, the intermittent period of uncertainty could be very damaging. one final thing to watch, would prime minister david cameron have to resign? he maintains at the moment he wouldn't, but there would be huge pressure on him to do so in
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the event of an exit vote. this could lead to other candidates stepping forward. it would likely delay br exit negotiations until a new government is formed. lots at stake just two weeks to go. for "nightly business report," i'm wilfred frost. in washington president obama endorsed hillary clinton for president saying "i'm with her." just before making the announcement the president met with senator bernie sanders at the white house who said he was not dropping out of the race but would work with clinton to beat donald trump. >> i am going to do everything in my power, and i will work as hard as i can, to make sure that donald trump does not become president of the united st. >> john harwood joins us now from the white house. it wasn't necessarily a surprise that the president formally endorsed ms. clinton but what conclusions can we draw from the statement that bernie sanders made outside the white house after
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>> the only surprise was the choreography. we knew that president obama had talked to bernie sanders on sunday. now we know that he informed bernie sanders that he was going to endorse hillary clinton. bernie sanders asked him to wait until they had a meeting today, which he did. the video of president obama endorsing hillary clinton was made on tuesday. so this was all planned. now, in terms of bernie sanders' statement, it was as much as hillary clinton could have hoped for and you could see it in the clip that you just played. it was the fact that he said he was going to devote all his energies to defeating donald trump, didn't criticize her at all. a little early for him to come out and just say, i'm getting out of the race. that's going to be a process. but i wouldn't expect that process to take too much longer. >> speaking of donald trump, the great tweeter was in new york today trying to fire up his fund-raising operation. how's that going, john? >> well, not so great. here's the challenge. when you're donald trump and you have largely self-financed your campaign which you ran very
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cheaply because of your power on social media and broadcast media, you then have to, if you haven't had a lifetime in politics, and the whole financial apparatus, you've got to create one quickly. hillary clinton's been creating one for a very long time. she has the capacity instantly to turn to general election fund-raising. he's got to develop that capacity. he's said he would raise $1 billion for the campaign, but it's not clear he's going to be able to achieve that. one of his aides said today, we may not need that much, we'll see. >> john harwood at the white . still ahead, 100 years ago the panama canal changed the global economy. now it's changing things aga. i'm mary thompson at the panama canal where we tell you about the dawn of a new day in global shipping. that's coming up on "nightly business repor
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in panama, a new era in global shipping launched today. a third lane nine years in the making and able to handle some of the biggest cargo ships in the world passed a critical test ahead of its official opening at the end of the month. as mary thompson explains, it could reshape trade and the world economy. >> reporter: under a blistering sun, workers gathered along the banks of the panama canal's new lane. costing $5.25 billion, it faced a crucial test -- the passage of the first ship through its atlantic locks. >> it defines a moment. >> reporter: the moment thursday a success according to ceo of the project. >> today has been extremely shoot. exceptionally smooth. the gates operat so all the parameters have
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worked exceptionally well. >> reporter: the test making way for the lane's official opening at the end of june and a new era in global shipping. it means a shorter route. it means a reduction of co2 emissions. so that's good for the world. it means better prices for the people that are shipping merchandise because they're going to get economies of scale. >> reporter: one-third larger than the canal's old lanes, bigger ships that carry over 45% of the world's cargo can now access this 50-mile shortcut between the atlantic and pacific oceans the first time ever. here's the canal's elia morata. >> the bigger vessel that can come through the existing locks can carry 4,000 to 5,000 containers. in the new locks, ships can carry up to 14,000 containers. >> reporter: boston consulting group estimates this can cut the cost of shipping goods by 30%, as long as ports and railroads
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are ready. they're spending billions to get there. before this lane, most big ships went to the west coast because they couldn't sail through the canal. now east coast ports are dredging, updating, expanding their facilities to accommodate the big ships and move cargo railroads will take as far west as detroit. 102 years old, the canal considered a wonder of the modern world. it's new addition with gates ten stories high and lanes that cut crossing time by two hours, a major feat as well. >> this is obviously the result of 110 million manhours of work. and 30,000 people have worked on this project. >> reporter: the project for the ages ushering in a new age of shipping. at the panama canal, mary thompson for "nightly business report." coffee gave sales a jolt at jm smuckers. that's where we begin "market focus." demand for the company's folger's and dunkin' donuts
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branded coffee, as well as pet food profits, helped lift profit higher. smuckers also gave a full year outlook well above expectations. shares up just about 8% to 143.23. european union has given the green light to the proposed merger between u.s. food distributor cisco and its european counterpart breaks group saying the acquisition does not raise competition concerns. the over $3 billion deal expected to be completed july. cisco shares up a fraction to 49 even. vail resorts reported better than expected profits in the the latest quarter, thanks in part to a rise in sales for season passes. the ski resort operator saw revenue climb, although those results were a bit shy of targets. the company raises yearly guidance. shares of vail rose 3% to 139.20. the national highway traffic safety administration will be looking into reports of potential suspension problems found in tesla's model "s."
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the agency's review will determine whether a recall might be necessary. tesla also announced it was yet again making a lower-cost version of its model "s" vehicle. shares of tesla down more than 2% to 229.34. a regulatory filing showed same-store sales at urban outfitters current quarter are falling in the mid-single digits. shares of the clothing retailer plunged after hours following the news on top of the 1% loss during the regular season closing at 27.93. mortgage rates fell for the first time in four weeks following a surprisingly weak employment report last week that increased concerns about the health of the economy. freddie mac says the average 30-year fixed rate mortgage fell to 3.6% from 30.66 the week prayer. rental and home buying prices are sky high. prices in many of the nation's largest markets are soaring,
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even outlying areas beyond the big urban areas are seeing higher rents. what's behind the increase and what does it mean for the housing market? the managing director at trulia research, david, good to have you back, we love having you on the show. >> good to see you. >> let's start first of all with why you think rates -- rental rates, as well as home prices, are moving in tandem at sharp rates to the upside. >> well, sue, our report looking at the top 25 rental markets in the country, this is the second time in the last year we've done this report. we knew prices were high. what we really found this time was that there are just not enough listings available. there aren't enough rentals available. there's this sharp, sharp drop in supply. and of course we have this tremendous amount of people looking to rent. and of course this was caused by a couple of things. first of all, people are
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migrating to cities, to the job centers, to find employment. and they're not able to buy for a couple of reasons. first of all, they've been displaced by the housing crisis. and secondly, they're pushed into the rental market because there's no inventory of homes for sale. so we've got this kind of double-edged sword where people can't buy because there's no inventory and they're all rushing to the rental market so there's not enough rentals on the market as well. >> we toss around the word "affordability" a lot. and sort of two questions, what does affordability measure specifically? and then where is affordability the worst in the country? >> right. so the way that we measure affordability is we take a look, you figure a perspective of somebody looking for a home is going to spend around 30% to 40% of their income on housing, max. so when we go around and we take a look at median household incomes in these markets, and
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then we look at the median rents for one bedroom, two bedroom, three bedroom, so on, we can determine where not only how many units are available but with those prices, how many are affordable. and you know, we're finding surprise places where rents and the lack of affordable rentals is actually exceeding what we're seeing in san francisco, which everybody knows about. so we've got places like portland, like phoenix, seattle, parts of dallas. we're seeing places where just people who want to actually rent a place can't find a place. >> very quickly, david, i've only got 30 seconds. how does this resolve itself? >> that's a great question. basically, in many markets around the country, we have a housing shortage. san francisco, seattle, washington, d.c. and what has to happen there,
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there's a lot of safety valves. one is you can build more housing. that's a tough row to hoe. another is people can just pick up and leave. they can go to places where they can afford housing. and that means further away from jobs. and ultimately, businesses may find it better, lower cost of living places to move to. >> all right, on that note david, thank you so much for joining us, trulia research. will disney's dreams come true in china? a first look inside its big investment in shangh more than five years and $5.5 billion later, disney opens its biggest and most expensive international resort -- in china. disney knows not only are the
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risks high, but so are the rewa >> this is i think a great market for disney. and a growth market as well. obviously the size of the market, the number of people, is another reason. but -- and this is an extremely important step, the biggi step we've ever taken anywhere to grow in a market. >> eunice youn takes us inside the gates of dithny and it won't cost you a dollar or yuan. >> reporter: this is the largest disney castle for the world's largest population. with the opening of its $5.5 billion theme park in shanghai next week, the u.s. entertainment giant hopes to dazzle china's consumers. but shanghai disneyland isn't the disneyland americans may be fall 88 with. lead designer or maner as disney calls her told me the company had to re-imagine the whole
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market. taking into account in china three generations often live under one roof. >> our research shows chinese people want to bring grandma, grandma, and little kids all together to the park. grandma, and grandpa can sit and enjoy the view, take photos of the family, and just take a break. >> reporter: 80% of the attractions here are unique to china. disney takes on chinese tradition. adding new rides. and remaking old classics. >> we realized the pirates of the caribbean was really well received, chinese people loved it. for the first time we have this pirates theme in treasure cove. >> reporter: some things would be recognizable in the u.s., though they're even a bigger cloud pleaser here. this is one of the most popular spots in the park. there are lines that are weaving all the way around. and it's all for a turkey leg.
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how long did you wait for this turkey leg? >> about two hours. >> you waited two hours for that turkey leg? >> yes. >> reporter: disney may have reinvented the park but what the people here like and don't like doesn't seem all that different from elsewhere in the world. >> translator: we loved the pirates of the caribbean. >> translator: the lines are way too long. i have been waiting three hours for a ride. >> reporter: a sign the middle kingdom may be ready to embrace the magic kingdom. "nightly business report" from shanghai. google copounder larry page is reportedly secretly building fly cars in the building that houses his personal aviation startup called z arrow. as first reported by bloomberg, page has financed this project with over $100 million of his own money. while larry page is healthy enough to fund it, those getting off the ground have to look for investors to turn ideas into
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reality. one company wants to make that process a little easier. kate rogers reports from long. los angeles. >> reporter: look no further than mark zuckerberg for proof that great ideas can advance well beyond the four walls of a college dorm. college startups are hoping to duplicate that success at the recess pitch finals in los angeles. a march madness-style competition for coeds who want to become the next big thing. they're up for a full scholarship to venture capitalist tim draper's draper university in silicon valley and a shot at $250,000. the festival has been to 18 campuses and six regions to narrow down the 10 finalists. >> we're excited to be in los angeles to show off our company and what we've done so far. >> get practice pitching and the money and yeah, seems like a cool experience. >> reporter: recess has come full circle, hatched by indiana university seniors in 2010 as a
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music festival. by 2013, it expanded into a pitch competition and monitorship event. followed by a concert. it's in the vein of south by southwest at college campuses to help students gain access to resources and connections to launch businesses. shannon blind-e-mailed mark cuban and he became the company's first and primary invest w infused the idea of entrepreneurship and startups into our music festival with the mission of finding and identifying young entrepreneurs like that us building a business in a dorm room, to give them the opportunity to turn it into a real business. >> reporter: since 2013, 1,000 pitches and startups have gone on to raise $12 million in funding from big investors, including cuban, draper, and sales force ceo marc benioff. that opportunity is the reason recess launch the in the first place, to expose startups to mentors and investors they might not meet on campus. >> at college that's where you
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get a lot of exciting ideas amongst your colleagues and you're coming up with really cool, innovative solutions. part of it, we don't always have the best training once you get out into the workforce about how to even start a company. >> reporter: after tonight, recess will make it a little easier for the next potential mark zuckerberg. in los angeles, for "nightly business report," i'm kate rogers. that does it for "nightly business report" tonight. i'm sue herera. this is the time of year your public television station seeks your support. >> i'm tyler mathisen. thank you for your support and have a great evening, see you back here tomorrow.
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