tv Nightly Business Report PBS June 5, 2018 5:00pm-5:31pm PDT
♪ >> ann busi: this is "nightly with bill griffeth and sue herera. >> economicon mile, there are more job openings than there are available workers. and that's never happened what's brewing?bu sts will start its next chapter without the man who turned it into a household name anda time when the company faces a number of challenges. death of an icon. te spade turned a small handbag company into a global brand. dtoday, she was found dean her manhattan apartment. those stories and m tonight on "nightly business report" for tuesday, j ande do bid you good evening, everybody. the nasdaq composite closed at a record and we'll have more on that coming up.
but we begin tonight with a significant moment in our economic history. weay learned that right now, there are more available js than there are people out of work. that is something the american economy has never experienced before. the labor department's latest report shows that there are a record 6.7 million job openings april while the number of available workers was 6.4 million. that is the first time that has happened since the government began tracking job openings 2ack in0. to put this in perspective, when the great recession ended nine years ago this month, there were about six unemployed people for ever job opening at th time. and it's just the latest sign that the u.s. is facing an historically tight labor market. >> and ll, those positive numbers on the jobs market come alongside some sobering news on the state of social security. costs for that program will exceed its income this year for the first time since 1982,
forcing the program to dip into er trust fund to c benefits. it is estimated that those reserves will be depleted by the year 2034 and social security will no longer be able to send full benefits. the report also said that medicare's hospital insurance fund will be depleted in 2026. that is three years earlier than anticipated. a meanwhil new report says leading ceos are a little less optimistic thahey have been. according to the latest survey from the business round table,r many concerned about the direction ofra t policy right now. kayla tausche has detailed for us from washington. >> reporter: for theirst time since donald trump was elected president, quart reading of confidence among ceos has fallen. the survey showed that expectations for the next six monthsor hiring, capital investment, sales, and u.s. gdp all declined. one major reason, trade. 95% of executives citing white use trade policy as a moderate or serious risk.
business round table ceo josh bolton and chair jpmorgan's jeremy diamond told reporters they'd advise the white house against tarif and protectionist policies to no avail. 132 ceos responded to the survey during the middle two weeks of may when the white house was negotiating trade deals on nafta and with china. two fronts where friction has only increased in the weekssi e. nec director larry kudlow says the u.s. may pursue separate deals with canada and mexico to replacehe currenttrilateral deal, and a white house team in beijing reportedly rebuffed an offer from china to buy $70 billion in u.s energy and crops. here's white house press secretary sarah sanders. >> our focus is on making sure we get good deals. i'm not here to make an announcement on what those look like but he's going to con fnue pushinward to make sure he gets the best deal for american workers. >> for "nightly business report," i'm kayla tausche in oshington. >> wall street, as we
mentioned, the nasdaq closed at by shareecord, helped of netflix and amazon and while tech stocks powered ahead, the rest of the medket strugor gains. the dow jones industrial average fell 13 points.q the nas was up 31 and the s&p 500 gained n 2 points,rly 2. now, some say the market is facing some preury toughes and investors want to know if those hurdles can be cleared, so mike santoli takes a look. >> reporter: stock market bulls have plenty to be proud of after twmonths of hard-won progress, but they sti b have a more to prove. the s&p 500 index is up more than 6% since early april, grinding higher through a thicket of concerns, including trade tensions, increasing fears ofn pressures and 49ers f new regulation pressures. the 27.50 level has capped earlier rallies andt's where a nasty drop occurred in mid-march. this is a pretty natural areand
for the to stall for a while as investors assess the otderlying strength of the economy and thetial danger of trade policy moves and the federal reserve's rate-boosting campaign. the leadership of the remains sturdy, but selective. the nasdaq is fully recovered from the correction t started in january, and it's back at a fresh all-time high.ny small com stocks are also at a new record. these are positives for the bull case, but a reminder that the drivers of the market's comeback have been narrow. only m thror sectors, tech, consumer discretionary, and energy have outperformed the s&p 500 as a whole since the index was last at its current level nearly three months ago. the momentum in corporate ofits has been powerful. the only question being how much growth will slow into 2019. the latest little push higher for stokcks coincided with a pullback in a oil prices. on more soothing talk fm the fed and a fluer of global market turbulence that sent investors to the shelter of treasury. so as the market heads for the higher end of its choppy
2018 range, and new economic reports continue to shoen impressive sh, the next test for the bulls might come as those ten-year treasury yields 3% and ther run above the fed has its say next week. for "nightly business report," i'm mike santoli. >> time to take a look n at some of today's upgrades and downgrades. we begin with video game take two interactive which was downgraded from outperform at bmo capital markets. the analysts there cites higor expectationsn up coming video game release which it ys uld disappoint. price point, $116. the stock fell a fraction to $113.26. meanwhile, first solar shares were downgraded to neutral from buy at bank of americly the a cites china's decision to suspend construction of new solar farms and to cut subsidies. price target now63 and that stock fell more than 5.5% to $58.24. and bank of america is also making a call on weight
watchers,pa rating the c a buy in new coverage. theou analyst says the stock rise another 20% from current levels. the price target is $95. the stock was up 8% to $85.93. petroleum ccidental were upgraded to buy from neutral at citi. the analyst cites rising oilpr eds.to the closed up a fraction. the woman who created an iconic accessories empire that made her name synonymous with trendy handbags was found dead today in her manhattan apartment. designer kate spade was 55 years old. the cause ofth is being reported as a suicide. our courtney reagan now has more on her influence in the fashion world and the legacy she leaves hind. >> reporter: the retail and fashion industries are mosrning the of the designer known as kate spade. they've launched her original
eupe eponous handbag. the brand was the first premium american handbag maker to use lon for its base material. kate spade, her husband, and partrs sold their majority stake to neiman marcus in 1999 for around $34 million, and the remaining stake in 2006 for $59 million. the kate spaderand has only grown. after changing ownership several times, tab stropestry bought th spade brand for nearly $2.5 billion last year, 11 years after spade sold her are remaining stake in the company she founded. the kate spade brand is still known today for its bright colors, feminine, whimsical aesthetic, and kithy marketing. kate spade handbags, shoes, accessories and clothing are sold around the world, bringing in more than $1 billion a in annual sales. two years ago, sh along with her husband, andy spade, and the
duo's original two other hebusiness partners, launca new handbag and shoe brand, frances valentine around the same time she changed her name to kate valentine. frances valentine also shares colorful shoes and handbags in department stores, boutiques online and globally with that aesthetic that kate spade isow for but with higher prices. in official word from frances lentine on its future after the death of its founder. for "nigh i'm courtney reagan. >> still ahead tonight oes "nightly bus report," america's most famous coffee chain embarks on a whole new chapter. a we reported last night,
howard schultz is stepping down from the company he helped to roild. andrew ross sorkke the story and spoke to mr. schultz today about his xt act. we're here in seattle where we sat down howard schultz, the outgoing executive chair ofho starbucks announced plans to step down from the company. he said among other things he may pursue in the future, public service, which of course has fueled speculation he could run for president in 2020. i asked him directly about that >> there's a lot of things i can private citizen other than run for the presidence uni just see what happens. hings i'm ots of thinking about. i'm writing a book. it's only been 24 hours. but we've t many times about how concerned i am about ithe country our standinthe world, and i think there's many things i can do as a private citizen to advance the cause of the promise of the lecountry. >> we said he has not made
a decision yet about what he's going to do in the future, he did have a number of views on public policy. >> ronald reagan in 19mm passed anration bill as a republican president, so why can't we come together, move the idlogy out, and do what's in the interest of american people? 70% of the american people want a good immigration policy. 70% of the american people want the kind of policy and legislation that takes the guns american of the people's neighborhoods. i mean, it just doesn't make sense to me. >> intriguingly, he had a fascinating take on how toab thk t today's economy and the stock market. >> i think it's very wrong to use the stock market as a pxy for th u.s. economy. interest rates are going up, and if i had to make a'mbet, and not an economist, i don't believe that the stock market is goin to continue to grow at the level it has between now and 2020. you're going to see a sea
change. so, listen, the economy is strong. i give president obama credit r that. i give president trump some but you also have systemic problems in the country, the likes of which we have not h in a long time. >> howard schultz stepping off the starbucksut stage probably not stepping out of the headlines. i'm andrew ross sorkin for "nightly b well, starbucks investors aren't t t happy about departure of howard schultz. the news sent shares of the stock lower in trading today.ou no those same investors want to know what is next for starbuckshend how company plans to overcome a number of challenges. kate rogers has that part of the story for tonight. >> reporter: it's a new era for starbucks as founder and executive chairman howard schultz steps awe he made into name over the past 30 years. >> please come in. >> reporter: now the focus is on kevin johnson, the company's ceo who has been at the helm since last year.
the two men worked closely together and analysts say th johnson to step out of schultz' shadow. >> i think this will be an opportunity for even to show himself and show heoesn't need to rely on howard and he can leverage the experience and talented the rest of the team. >> reporter: schultz' departure mes at a time when the esmpetition for consumer dollars is fierce as compa from mcdonald's are offering steeper values on coffee. stbucks isocused on mobile as well as the consumer experience with its reserve bar and roastries in seattle and shanghai with openings in milan and new york later this year. in ina, it opens a new store once every 15 houren a big chall on johnson's plate, increasing same store sales in the u.s. which has been stagna j. experts snson needs to focus on innovation and technology. >> i think they need to iron out the mobile order platform and make that -- and improve then experiencee stores.
i think once they start to do that, i think that the starbucks brand,kn you, will kind of right the ship there. >> reporter: another bright spot in the leadership change, the appointment of myron to executive chairperson who turned around jc approximapenney not o twice in the pastt well,s been reported by "the new york times" that howard schultz may consider a run for t presidency in 2020, and andrew ross sorkin addressed that earlier in our program. well, today, home depot's co-founder andla phinthropist said if more people with business experience get involved in politics, it's a good thing. >> howard schultz, jamie diamond, mike bloomberg, if we get those kind of people to say, hey, he won and i can win, we're going to dramatically open thep of talent for people to become president. and by the way, that's g >> and is that got us thinking about how business backgrounds
could play a role in public. offi joining us now is jeffery sonnen feld from yale school of management. nice to see you again. >> thanks, hi, bill. >> does it matter whether or not the business executive and we've had many business executives transfer into govnment roles, does it matter whether they come from a private company or a public company? does one give an advantage over the other? >> that's a great question. you know, that wa the fine point in andrew ross sorkin's interview wh howard schultz today, that he wanted to make that point without coming across inke he is sta up a slug fest with the president. sting that a,g you know, a mid size family business as the trump organizatiha is,has some global reach, doesn't, you know, maybe a dozen countries, compare to the magnitude of what starbucks has in 75 countri with some, i don't know, 38,000 stores and thioss.
they're a as big in terms of the number of stores as mcdonald's. yeah, it makes a big difference, being accountable to bosses, to ad, bo to disparate constituenmes, difficult bot line criteria to meet and things as a public ceo, it's a very different experience than being a private i don't want to diminish what donald trump has accomplished. i think as a ceo of a private business, it's pretty impressive, but what the scrutiny and everything that a public company has to go under, ,there's nothing like and none of the predecessors of our current ceos have had as difficult a job as the current generatie . >> there hen other successful businessmen in the white house. you had herbt hoover, a mining magnate. h.w. bush made his fortune in oil. that just names two of them. how are they differe from other people who have been in the white house? how is tinir thi different as business people? >> it's funny you mention those two, bill.
it's because douglas brinkley, the presidential historian used those two in an article todo say, look, ceos don'tto transfe ublic office that well. look how troubled those careers were that herbert hoover, whoccy allnts was a wonderful human being, was not a wonderful president. and "w" who was also a wonderful human being won't beanked as one of our finest presidents, george w. bush, but for a storian, that was a strange thing to pick. you could also say being a governor was bad because george w.
bush was a governor. andrew johnson was governor of tennessee. jimmy carter was governor of georgia. >> by the same token, george washington was a very successful farmer. you know, which was a big business back in those days. so there's a -- >> good for you. he was a farmer, and f that point, harry truman, you know, he was a enhaberdasher.
there were some who were very successful that were never senators or governors, never had an elected position like that exactly. abraham lincoln wasn't a governor, was never ase tor. there are some very impressive models that way. but business leaders have done well. michaebloomberg, of course, is mayor, which is the next toughest job after president is being mayor of new york city. d he certain very well and there are many business leaders who went into public service who were sucssful business leaders but even more renowned for their legacies in public service,
like avrilan harr who ran the union pacific railroad and chester boelz, a great advertise r check. >> lots of chafrms indeedu jeff, thank ry much. bill? elsewhere, we've got g-3 apparel post aing a surprise profit and that's where we begin tonight's profit. the owner of guess and dkny said there was demand for many of eir brands. the clothing company also raised its earnings guidance for the
full year. shares rose more than 10% today. n navistar warned its profits would be pressured tear and an expected rise in sales for its less profitable trucks. its auto parts business, its more profitable division, will likely s flat growth and that news overshadowed an otherwise upbeat full year outlook and the stock fell a fraction. > allergan is being urged by two of its biggest shareholders to split the roles of chairman and chief executive into two separate roles. they'reth calling o drug maker to reconsider its acquisition strategy and shake up management all in an effort to give new life to allergan's stock which today was up to $152.21. the pharmaceutical company myalin said the fda has approve its drug that's intended to prevent infections in patientrg unng chemotherapy.
they said they plan to market the medication in the coming s. we the shares finished up nearly 4%. and shares of twitter get a three-year high on news that it will join the sde 500 the social media company is monsanto, which is remurjpling winithg booir. the change will take effect before the market opens on thursday. twitter's shares jumped 5% to finish the day at $39.80. >> coming up, why big tech is pouring big money into the race for san francisco mayor. >>re facebook and google being sued by washington state's attorney general. he says the companies failed t maintain information about political advertising. that information is required by w and it includes data about
buyers of political ads. the cost,y how much t paid, and the candidate or ballot measure at washington candidates and political committees have reportedly spent about $5 million to advertise on those platforms in the past decade. some big tech companies are taking sides in the san francisco mayoral race b and th han pouring a lot of money into campaigns. that's because the stakes are high for a critical amerin industry. aditi roy has more. >> reporter: san francisco is about to elect a new mayor in a wide open race and many voters have strong opinions about the issues important to them. >> i understand the tech companies coming in, but the problem is that they have pushed out a lot of the old-time residents. >> two problems. one is mentallyll homeles people, and two is drug addicts. >> thereanre eightdates running for mayor but the top three contenders appear to be london breed, jane kim, and mark
leno and the city's housing crisis seems to be front and center in the that's where tech leaders come in companies like twitter, airbnb, and uber have almoved into san ancisco the last few years, and the infusion of highly paid engineers has been blamed for the city's housing crisisnd rise of mamelessness. ny tech leaders are looking for solutions to these problems ll the candidates addressed those topics, breed, the fron arunner,ears to have the most aggressive plan for building more homes. she's pledged to create at least 5,000 units of housing per year and has backed removing homeless people from the streets. medium ceo evan williams has donated $100,500 and jane king is proposing a $1 billion bond to stabilize the housing market and wants to make shelters more accessible and depl mobile showers for homeless people. her tech bkers include the
ceos of start-up automatic and n desk. they donated $100,000 and also $50,000 respectively. the tech footpnt has expanded in recent years in part because of the policies of lat mayor ed lee, whose sudden death in .ecember sparked today's voters we talked to seemed divided i on tech'sluence in san francisco. >> without the tech companies, you don't have all this fabulous infrastruc. >> reporter: even though many high-profile tech leaders are supporting breed, it's unclear whether she'll follow in lee's footsteps in embracing tech companies. in 2016, she even introduced legislation that would have regula. for "nightly business report," i'm aditi roy, san francisco. the first state in the union, today, became the first f state outside nevada to take wagers on sports betting and this comes just a few weekse after preme court lifted the federa betting is taking placedet three ware casinos and will offer wagering on baseball, football,
basketball, soccer, golf, and auto ring. other states are expected to follow. finally toght, the latest list of the world's highest paid athletes is out. according to forbes, floyd mayweather is at the top spot again. number two, soccer player lionel messi. rounding out the top three, fellow soccer player cristiano ronaldo at $108 million. by the way, the 100 highest paid athletes earned a collective $3.8 billion during the past 12 months. that is up more th 20% from a year ago. that's it for us tonight. have a great night. >> see you tomorrow. ♪
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