tv Nightly Business Report PBS November 13, 2018 5:00pm-5:31pm PST
>> announcer: this is nightly business report request a bill griffe sue herera. oil slick.es prre at the lows of theier thedomestic crude remains i grips of the biggest losing streak on record. trade talks. the u.s. and china are in discussions depend. and that offered momentary relief f investors. > tax breaks. how much did new york and virginia give up in order to get the second headquarters of one of the rlwos largest companies? those stories and more on nightly business for tuesday, november 13th. >> and we bid you good evening, everybody. anotherolatile d for stocks but the focus once again was on oil, for good u.s. crude is in the midst of the worst losing streak ever.
prices today it closed at the lowest tuyear, aing reversal from a few weeks ago when themm ity was trading at a four-year high. back in october there was a concern a shortage would push prices to as much as $100 a barrel. but today the concerns are about a supply glut. according to a new report from opec, oil producers have been keeping the production wide open. that resulted domestic crude falling 7% to $5 a a barrel. making 12 sessions of declines. exxon on chevron were two of the worst performing in the dow today. and oil fld services hal burton hitek a 52- low. the tonight oil producers are in abu dhabi. and no doubt prices are top of mind. steve sedgwick is there for us tonight. >> reporter: the markets continue to fall on tuesday. despit a respite the markets
saw monday. you have wti and brent trading in bear market territory. ie, down more than 20% from the recent october highs. they rose in part on monday on hopes that there would be iss supp the market. that came on the back of an oil meing of opec minorities here in abu dhabi. but i'm afraid by tuesday the market was falling yet again. following president trump tweeting that he didn't want saudi arabia and opec to be production. very tough for saudi as well ased se they see inc supply and concerns on a dplut and bigger inventories in early 2019. they were hoping to get ahead of the curve and cut production to alleviate concernst ine same time as the u.s. showing record production. soul then they be creeding market position to the united states shale producer. a very tgh conundrum for opec and saudi arabia. tinue we speak prices c to fall. this is steve sedgwick, night
business report in abu dhabi. >> and trade is the her iss investors have been focused on. today we learn that talks between the u. and china reassumed. that helped lift cater pillar and trade sensitive stocks. >> reporter: treasury secretary steven mnuchin spoke by phone with the china top trade official. the two expected to meetn shington soon and both sides busy preparing for the meeting ndtween president trump president xi later this month. >> we are again talking about china. and i think that's very, very very positive. you know, the president initiated a phone call with president xi. we now know thate will in fact discuss trade at the g20 meeting in argentina. >> white house economic advisers larry kudlow tried to keep negotiations on track but not everyone in the white house agrees with him. the trade dwrz adviser petero
navarr recentlily blasted globalists. today kudlow has choice words. he was not speaking for the president nor the administration. his remarks were wayff base, not authorized by anybody. i think he did the president a great disservice. >> reporter: china is not the only front in negotiations. the vice president met with japan's prime minister in tokyo promising to work together on trade, infrastructure and national security. tomorrow an officl from the european union will be here in washington. they are hoping that by keeping an open dialogue they can keep tariffs away. for nightly busines report, ylan mui in washington. >> but the potential easingf trade tensions was not enough to offset the decline in the energy the dow was dragged lower by boeing as new questions swi around the 737 mod model aircraft. a wild day of trading. the dow range was 300.
it fel 100 at the close to 25286. the nasdaq rose 1 cent the s&p down by four. with the wild moves in the e market, t may have been voices cautioning investors. there are many out ere. thelatest, though is bank of america's merrill lynch analyst vising investors to stay cautious because he says t big low for stocks has not arrived yet. david wright is the cofounder of e sierr funds. he agrees and frank is the dr. of psychology and cofounder of market psych.com. both here to put this market sentiment into context. welcome to both of you. pleasure of you here. >> thank you guys. >> david, i sta with you. you agree with the analyst. that was a strong statement. but you've been bearish a while here. what is it you've been seeing in the market that leads to you believe there is more to come in. >> well the major in indices inh
the u.s. peaked at different times. that occurs at a major top but most important will the the weht of new lows and highs and 52-wk los and that's dangerous. >> dr. murfa people saying with the calls for a sharply lower market we keep hearing howre a cion would be healthy. they say, how is that healthy when i le money? what do you say to them. >> i tend to prefer markets that go up. i don't like losing money. is it healthy in the grand scheme? sure sometimes a ste enables you to take two steps forward. >> it's not just a psychological amount. it's a market that doesn't go up forever. it has to pullba at some point to allow people to get in at better prices. isn't that the idea? >> well, you know, we're talking about laws of physics and laws of markets.
and they tend to tra other closely but not exactly. certainly, it's been a fantan.ic i do think that the narrative has shifted some. d that a pullback at this point is something that a lot of people are anticipating. so it's certainly not t worst in the world. >> david a lot of people are talking about the fact that when some of those things that bill mentioned, the0% correction being healthy and things like that. that applied to a market thaeps nottructured the way that the market is now. does that make a difference in the way that you view things? >> not -- i'm not really sure. the weight of the etfs now and etf trading could be a sort of a problem. we don't know howbe they wil unbumbled if and when the decline becomesevere. basically we are looking at a multimonth bear market probability here. >> if that's the case, david whab do you do? people sitting at home hearing
all the forecasts. the market has been volatile in october and now parts ofmb no and probably wondering what do i do with my money right now? you're in theld real w trading there. and what do you at the time them. >> i say puttops under the five biggest holdings related equities and put meaningful stops under them and be sure to act with discipline. >> you know, frank, talk to us about the pchology of this market at this point. and if you are a longer term w investort should you do to take sonl of the etion out of -- out of your trading and if you are an aive trader? >> well there are a if you things that i think would be helpful for investors aim a like this. one of them is to r the scope of what you consider possible. one of the most important and pervasive biasesur that investors is to have a narrow
vision of what can happen. the fact of the i matter i could be a gigantic pullback or not. once you emotionally prepare for that and recognize the large scope of possibilities, then you are then the second thing you want to do is make sure you have a plan inac i mean something specific. so you can act on it in the moment. ce it happens it's too late to do that. >> too late when you are in the midd that. what about those holding bonds? people e a lot of watching us buying bonds for income. as stock prices go lower. nd prices go hire as people shift from one asset to the other. what do you tell those folks as times like with the volatility. >> when the stock markets gets a scarey fear goes across boundaries quickly, inevitably globalil institutions plow nto the dollar and u.s. treasuries. i'm looking for a good season ahead in treasury bonds. so for a high grade bonds hang
on. high-yield bonds and emerging market debt, be cautious. >> on that note thank you. dave wrigh with the sierrait funds whin frank murfa with market psych.com. >> time to look at upgrades a downgrades. beginning with with nvidia graded with the analyst citing opportunities in the growing i artificialelligence mechanic. price target $230 the stock rose 5% to 199.33. southwest energy upgraded to neutral from underperform at bank of america mailer lunch. president analyst yieting the rise in natural gas prices and cold weather forecasts. in fact the firm see as potential for spike in prices beca ie of tightentory levels. stock rose a fraction to $5.82. bestlso at bank of america buy downgraded to neutral. citing slowing industryd growth ost inflation.
the price target is shh 70. the stock fell a shack li fraction to 67.05. ? per i got was downgraded at barron burg. citing increased generic competition m in the drket with reduced pricing. the price farther is $7. it was down a fraction to 65.39. still ahead as home price growth slows, home owners are still splurjing. the tarbucks trims correspondent workforce by 5%. the coffee chain says it's laying off 350 employees in arketing, creative product, technology and store development. most of the impacted positions are in the company's seattle
headquarters.ck star said the restructuring is to extreme line the business and spur growth. shares finished down a fraction in today's trade. >>omeepot grew revenue and profits at quicker than expected pace even as the home improvement retailer says it faced tougher comparisons from this quarter from a year ago when the businesses got a lift storms. devastating the company shares finished done down a tick to $179 even. courtney reagan rep from long island city, new york and what drove theni es beat. >> reporter: while the u.s. housing market shows signsf slowing. home depot sales outpace the company expectations. in the third quarter both the number of transactions and the amount shoers spent increased. sales to professionals like contractors tpaced those to do-it-yourselfers. though diy sales were strong. projects of $1,000 or more grew
9 peppers in the quarter. the good, enough to outweigh the negative like higher costs and lower hurricane related sales compared to last year.ve home impnt ceo craig men et eer says thes outlook solid even as sales of existing homes moderate withortgage rates prices.ong with home strong growth, historically high consumer sentiment and unemployment near the 50 year lows are what they calve drirs of home improvement. leading the retailer to raise the forecast for sales and profit. for nightly business report, courtneyn rea in long island city, new york. >> home depot is i not the only one reportings. earni jcpenney and macy also offering insight about the industry and the holiday shoppin season. greg melick joins us to talk about in fact you upped the forecast
for holiday sales to 5% gain. wow! >> we did it about a minute ago. frankly jobs are strong. consumer confidence looks good. and a the wealth affect should attack the holiday. we think the consumer should be out to spend. >> the leaders sometimes are discounters but toys "r" us isn't in existence. that's change the landscape nsiderably. >> we think it's the retailer with multichannelam rights. on should get a fair share. tathird of growth in the quarter. et is really laying into toys. we think that could help theas traffic at 1.5% joust the toys "r" us closing on the shares picking up theirs. thosere names holiday stocks well positioned. as you can see, some of ourvo tes are actually the one that is aren't playing for holiday. they're the home improvement names for next year. >> speaking of wal-mart they report this week. you think that's the most important report this week. why? >> they're about u 10% of.
retail sales. the best read on if the consumer is out continuing to shopping. they leaned into multichannel this year. if they can keep traffic growth growing north of 10% fan ifca ty put some price pressure on rhe consumer, i think wal-mart is a bellwet to see whether the consumer can handle that inflation that could perk up if the tariffs keep on rolling in. >> hour they faring against the likes of amazon. >> holding their own, in that they've been able -- w theyked out let the margins fall in the u.s. but trending negative to positive the last few years. amazon, don't count them out. they have 70 million plus household up for reproim. theyt 30 times a year. amazon taking a good $60 billion of retail growth this year. >> tomorrow' look athe c
pichlt. last october we had thedu ppi. retailers will be able to pass on the pricencases? do they have the pricing power right now. >> i thinkhe answer is some will and some won't. that's one of the things we look or in the earnings season on holidays, who has it. it matters more into next year. if the tariffs stay where they are we go to 25%. retail earnings growth could be cut in half from 8% to 4%. that's even assuming they price through about 60%. we think the home improvement names in auto parts are better positioned to pass true. bed bath and beyond can be companies like that or dollar treasure they have more pressure in terms of passing through inflation. >> greg with mov f. >> a trade zut hits tyson. the top u.s. meat processer says it's resulted in lower pricesar and aer supplies cause
going to miss quarterly revenue estimates. they are not shipping beef, pork or poultry t china. the stock fell to 58.17.o advance aassports raised the sale forecast and reported better tha expected third quarter results. the the parts retailer cited stronger demand. analysts say the multiyear turn around is taking hold. the stock rose more than 10% to 184.72. general electric now plans to cut i staken oil field services provider bakerugs sooner than expected . .. the move will reduce their stake in the company to just above 50% and raise about $4 billion in cash at current prices. . at with we reported the ceo is now focused on reducing the company debtndoad raising cash levels. shares rose 7% to 8.61. cannabis firm tilray saw its third quarter revenue rise more than 85% on the bottom line it's
its quarterly loss responded from a year ago as a result of o higherrating expenses. the company spent more to fund growth at hom and abroad as it positions itself to take advantage of the increasing legalization of recreational use of marijuana. word of the wider loss resulted in volatile stock moves in the extended trading session tonight. azon h made it official. its massive second headquarters oject which was posed to transform whatever city azmodan chose now go to two cities instead, new york and arlington, virginia, as w reported. but as scott cohn tell us it raises as many questions as answered. >> the competition was intense, sometimes a little weird. >> we mightitave to start going to the state to see if we can get the lerpgt tos change the name to phoenix, amazona. >> the 300 city cities sperd the
bidding fo the jobs and the the as the 5 billion in investment. the result a tie. >> ts was a fierce competition. i think it's exciting for amazon. i know it's exciting for new york. >> this certainly consolidates queens as a economic capitol and consoles new york city as a teew hub. >> n york's long island city neighborhood gets half the prize. a nod to a strong tech workforce. the other hf goes to northern virginia, a strong workforce as well. and a strategic location wedged between reagan national airport and the sntagon. >> i pormds-based incentive package on the table. the rurn o investment will be very good. >> and a consolation prize to nashville, tennessee, for the strong econo. it will get a 5,000 employee operations center. this is t largest jobs announcement in the history o the state of tennessee. [ applause ] >> and 5,000 jobs that willag av i think i'm safe to say $150,000 in salary. said it now they can't take it
back. >> amazon gave no official explanation for the split decision. but in the end no one city in america could provide everything the company wanted. most important, 50,000 skilled workers in one place. the move also allows the company which made $177 billion in revenue last year to make the most of government subsidies. $1.5 billion from new york state. $600 million from virginia. and more than $100 million from tennessee. >> we areeeing $2 billion in subsidies offered by virginia and new york for an eeansion th company had to make. >> all the locatns will have to work to do to make way for amazon like infrastructure improvements. meanwhile, for the 235 cities that didn't make the grade, like boston, chicago, dallas, plenty of questions about what they did wrong, how they can do better and why they got into this battle in the first place. cor nightly business report, i'm scott . >> and from big business to
small, confidence among main street businesses owners remdns near rec levels. they cite high profit trends and histor ially lowlation. but the survey also showed the small business are concerned about the tight job market. they say that they have not experienced in level of labor market constraint since the 1990s. kate rogers spoke to one owner who feels the pressure. >> rod deen found his business particularly hard hit. they sell office furniture and provide interior design services not in particularly high demand as the economy was nose diving. >> i used to owned one of the top five thin nobody needed. >> today he has nine stafferss economy chewing along but not without a price. he has to get more aggreive with recruiting tactics. he increases pay for new interior designers because workers with the skills he looks for are hard to comeavby. >> i seen the salaries what
i pay the designers has insided ay about shh 10,000 since 2012. along with that there are creative ways to compensate with bonuses and commissioik and things will like that. the package is more attractive as busesses continue to improve. >> the strong economy cut his business and many othn two whiches. new customers have helped to boost the bottom line but it's difficult to find workers to support the new business. labor quality has been the top concn for small businesses polled in the national federation of independent businesses monthly optimism index half the year. outpacing taxes and government regulations. last month the percentage of owners raising wages hit ara roaded. to combat the competition he is thinking outside the becomes. offering to make principaled statement on student loans up to $300 a month. an attract accurative idea for younger employees. >> i haven't had down because i think student
loan debt is a real issue. i think there is a benefit for themnd they quickly recognize that as a mts interesting form much compensation. >> for dion, keeng h business thriving requires innovative designs and hiring practices. coming up, tesla powers up.w h thousands of robots working nearly 24 hours a day, tesla believes it has found the key to driving down the cost of an electri car. i'm phil lebeau in sparks, nevada. we go inside a'te gigafactory when nightly business report returns. as tesla ramps up sales of its latest vehicle, the model 3,
the compa is also expanding its battery production. tesla's gigafactoryow builds more batteries than all other battery plants in the world combined. philsebeau takes inside the plant in sparks, nevada for an exclusive look at tesla's drive to push down battery costs. >> reporter: tesla's massive gigafactory is getting bigger and busier. thousands of robots and more than 7,000 workers are buildin battery packs and drive units for the tesla model 3, sales of the electric car grow, tesla is planning on more lower prid models. which means building battery packs at a low cost. the challenge the automotive presidt is confident the overmaker can overcome. >> the batte is the costliest part of the vehicle. it's important to improve efficientysi and . >> they are well ahead of competitors when it comes to battery costs.
partially bause of the size and scale of the gigafactory. but alysts question how long those advantages will last. >> do i think they have an advantage. i don't think they have a scale advantage for very long. i guess i p it that way because a lot of scale from batterypanies is coming soon. other auto makers gm, nissan, mercedes are planning to build and sell more electric cars, especially five from now.ears so there will be greater demand for the raw materials that make up bteries. like lithium. >> that concerns me a bit. if you are -- y if're going to get a mine to produce at capacity in 2022 you need to invest in it today. invest in shovels in the ground today. that is not happening at a pace that needs to -- for the ev industry to really take off in that time period. >> tesla is confident it will have plentyfaw materials to continue expanding battery production. as the industryti ces to
build more electric cars. and tesla continues to push to deliver more lower priced models. phil lebeau, nightly business report, sparks, nevada. quick update on the pink diamond we told but a few days go, the unusually large gemts with the sold at kristy's today. more than $50 million that's a record for the pink diamond. >> beautiful that does it for us tonight. i'm sue herera. zbloop i'm bill griffeth. don't get any brighid s. >> it's a neutral, goes with everything. >> yes, it does.
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