tv Nightly Business Report PBS November 15, 2018 5:00pm-5:31pm PST
>> announc: this is nightly business report with bill griffeth and sue herera.in g around. the dow erased a triple-digit loss on a report the a u.s. china doubled down on efforts to reach a trade agreement. going gangbusters. consumer spending is up. and that could be just what the economy needs to fend off headwinds. >> big in texas. that's what an energy company is doing does as it prepares to dominate natural gas. nightly r businessort for thursday, november 15th. and we do bid you good in ev everybody. welcome. stop me if you heard this before. but the sck market was volatile and all over the place today. the s&p fiefd did snap a
five-day losing streak but that wasn't easy. stocks started lower with the dow down as much as 200 points. then things reversed on this headline fro the financial times that the u.s. and china are working to ease the growing trade war at the upcoming g20 peegt. thatifted trade sensitive stocks like caterpillar and industrial names like 3m. and when was said and done the dow jones industrial was up 208 to 25289. the nasdaq up 122 the s&p added 28. and now to earnings. and wal-mart's results which also gave us some insight into th consumer. the world's largest retailer upped the year end forecast profit and sales, despite reporting a short fall in revenue, mostly related to currency issues. analysts say its fight against amazon is picking up steam and wal-mart is poised to overtake apple on thef list o biggest ecommerce retailer. courtney reagan edition down in
the quarter. wal-mart has been spending billions of dollars improving the wsite stores and raising wanls and paying off. the largest retailer grew the comparable sales for the 16th quarter. foot tffic was up. and grocery sales continued to drive shoppers to its stores. wal-mart's u.s. digital sales grew more th 40%. the highest growth rate so far this year, though still a small fraction of. total sal while the retailers implied holiday forecast may have been slightly oidisappnting analysts focus on the big picture. >> they're positioning it for future with what they're investing in today. and i think we are seeing signs of that in the financial pe ormance. we probably will continue to see that independent the of the macroenvironme. it positions wal-mart well. >> we think it's well positioned in a consumer environment that's somewhat mixed but a strong u.s. consumer which is underscored which low employment as well as wage growth. >> whileome economists warn of
economic slowdown wal-mart's feif chief financial officer brett bigs me we haven't seen a nsumer in the third quarter. i think the consumer is strong overall. fuel priceriare hislly in god shape. and unemployment is low. still, there are risks for wal-mart and other retailers like rising interest ras, high are transportation costs and tariffs. biggest says the wal-mart merchants are marining for anything they might counter adding the retailer will manage ourhray tgh but warning that tariffs lead to increases in price for everybody. >> wal-mart will always offer every day low prices. they have a lot of barringening levera in the changing environment. and they won't be unsold. >> for now winning the holiday season is the goa with black friday a week away. for nightly business report, courtney reagan in new york city. rs and consure not just spending at wal-mart. according to this morning's monthly re sales figures they're pretty much spending
everywhere right now. that's good news for the economy. since as you know the consumer makes up a ver large chunk of economic activity. steve liesman has more. >> the forecast from a lot of economists calls for the economy to slowdown. but so far consumers haven't gotten the memo. the gorernment rd that retail sales in october grew 0.8%, 3 tenths ahead of as consumers spend with abandon. the report came after retail w behemothal-mart reported a blowout earngs and upbeat guidance for the coming months. the data confirmed the upbeat assessmentf the economy by fed chairman jerome powell who spoke before the da was release zbld we have 3.7% unemploymen the economy is growing at 3.7% there is gd reason this think we continue in a positive vein like that. he state leased about of the economy right now. >> the government retail report showed strength inau s, department stores and internet shopping. spending also did well if
sporting goods and electronic applianc sres. building and garden equipment surged maybe a sign of the effect of recent hricane and gasoline station sales were boostered. that could goway in november because prices come down. would it free up money for consumers to spendlsewhere. jp morgan writing consumer spending in the middle quarters likely benefitted from the sugar rush from the lower tax payments. blt s lfar the downfrom the rush looks manag process better wages and tax cuts look to hp the economy to go to another above quarter of growth. consumers won't read the memo about the slowingil economy u after the holiday shopping season. for nightly business report steve liesman. >> let's turno scott brown to talk more about the consumer and the chee. he is theno chief est at raymond james. nice to have you with us, scott. welcome as always. >> nice to be with you.
>> in a nutshelle heard both sides of this. you make the point that retail sales are solid. but we have had some downward revisions in previous months. how do you view the skourm and the health of the sector? >> i think the consumer is in pretty good shape. again the october numbers were better than anticipat. but we did get downward revisions to the figures for august aeptember. the numbers do bounce around a bit from modh-to-month. e had a strong spring and early summer. some moderation in late summer into the early fall think is probably expected. and the numbers we got today looking at the underlying trend it looks good. as we focus aheado the holiday shopping season we are likely to see the main themes we have seel thet few years, that is buyers likely to be remain sensitive to pricing. they're conditioned to buy on sale. we shod see a trend more towards online sales. especially with toys "r" us going out of business.
and that's likely to come at the expense of department stores. >> right. b >> theger concern is as you look into the early part of next year. d there is a lot of uncertainty on tariffs. if we see a u ratchetin of trade tensions and you know tariffs that we have on the $200 billion in chinese goods, that's going from 10% to 20% early next ar. and then we may see that broaden to allse chi goods which has a bigger effect on the consumer getting to the important spring shopping season. >> i'mnterested in how wall street has been responding to 's retail earnings and sales figures. nordstrom down shrply target down sharply. wal-mart down sharply. is it possible that even though ever ody expects ablowout holiday shopping season that maybe that will be as good as it gets and it will be a peak of sorts for retail?hi >> i that's the fear out there. and it's kind of odd because the economic numbers we have been
gettingug -- alt mixed have been generally pretty good. no real signs of recession on the horizon. but i still l get of emails nd phone calls about when is thedown turn coming? the fed is raising short term interest interes rates and the fierce are still with us. i we heard from the fed chair wpowell that they arl aware of the risk of raising rates too rapidly. very sensitive to financial market turmoil. they don't see enough to dissuade them from raising rates in the short-termutt's an interesting 2019, probably a challenging environment for investors. >> on tha note, scott brown with raymond james, thank you so much. elsewhereridge water ray dalio the largest hedge fund utde cautious comments a the stock mechanic and pointing fingers at the fed. >> we're in the latestages, maybe the seventh, eighth inning of thees bus cycle, right? we're in the part of the cyclew
e there has been a lot of monetary easing, potential banks bought v 159 trillion asrth of t, pushed them up a lot we have the benefit of a corporate tax cut. all that stimulation and as a result we're in thet late of the cycle. where there is a tightening of monetary policy. we have raised interest rates to a level where it's hurting asset prices. >> dalio laughed off the notion that the central bank needs to raise rates to have room to mak cu if the economy softened. the fed is which hadly expected to hike rates at its meeting next month. aramatic dcross the atlantic. uk prime minister theresa may s faces whae call a political crisis. after t cabinet minorities rejected the draft brexit deal and quit her government. but may insists she is notnd worried that an exit from the european union will getdo
. >> i believe that this is the deal which does deliver that which is in the national and that am i going to see this through? yes. >> may says the united kingdom will be leaching the eu on marni 29th of next year. but to get there she must face critics. as villa marks reports, there are plenty. british prime minister theresa may may have been begun today in aaguely confident frame of mind after her cabinet approved her draft proposal for the britain exit from the european union. as the morpg wore on and cabinet minorities and other members of the gesernment rned her future as head of the conservative party looked insidingly under threat. >> the prime minister. >> the reason tha quite so many members of parliament are unhappy with the deal is simple. they believe that if a specific set of circumstances come to pass whereby the uk is unable to strike the aid trade deal with
the europe that the they will be trapped in a european customs union indefinitely, rules and igulations but with no say. one critic calle a hotel california deal check out any time you like but never leave. this is in direct contradiction to theenefits that brecht it would bring. the the the idea of control. the a number of of opponents say it's not the gd deal s insisteds it is. but the prime minister makes clear the options after 18 onths of negotiation rts limited. she said it's her deal with no deal or no any no preks it. she faced jeers in the house of hecommons. and will face more the in the. and shares of european banks fell following the dart yur of e uk minorities. baepgs like royal bank of scotland and barclays. and just last month fed chairman jerome powell said a zorld brexit could have a negative
effect on the american economy given us bank's exposure to european banks and businesses. separately, bmw was watching the brexit negotiations crossly. e auto maker says the the political situation is sort unn there that it prepares for a no deal brexit which many economists say would b chaotic and disrupt global economies. othersy companies and like bmw are watching closely the brexit negotiations. but leto turn scott renn to yolk about why brexit should matter to our viewers and investors here in america. he is senior global equity strategist at wells fargo. >> good to see you thanks forin g us. >> bill, how are you. >> i'm good. the fed chairman believes it could have an impact o the american economy. how are we exposed to the brexie tiations. >> that's what our clients ask us all the time. and we would say that two of the biggest risks to our stock market is one the fed makes a
mistake but two is that global growthow and certainly brexit would play into global growth, whether it's it's t uk, whether it's the eu. the u.s.f sells a lot goods and services into the eu and into the uk. and so if there is any disruption there, any decline in their economic growth, it's going to affect our companies. if you takento account that really 35% of the revenues in the s&p come from overseas. you need help form thegn economies and want them to operate efficiently and grow and accelerate. if they are not doing that that comes back to hurt our companies here which of course people have stocks in the 401(k)s. the s&p 500 is loaded with them. that would have a negative effect on the u.s. sto market. >> we have been talking about chaotic brexit negotiations for someime w. there are those who think that ome of the big, you know, multinational companies that
export a lot to europe orp wo tradeh europe may have already factored in a difficult exit. do you agree with that or not. >> well, sue, we have been talking about -- we believ there will be some type of withdrawal agreement before this is it all over done with. but certainly companies have to prepare. you know, they have to handicap what they think is going to ppen, can't have all the eggs in one basket.ul you easily make arguments that the risks of a hard brexit have increased. so ite wouldn't surpr me at all. and certainly many companies have talked about trying to make some secondary plans or have a plan b that in case there is a hard brexit they're not left out there hanging without any plan. >> story is not over. we willat. scott renn with wells fargo. thanks for joining zplusthanks, guys. > you bet. time to look at upgrades and
downgrades. apple's weovht rating was maintained a at morgan stanley this call follows downgrades. the alyst says shares overreacted to weak supplier guidance. opinio and the pri target set at 253. separately it says apple plans to partner with a studio to make feature films and that also helped lift the sck more than 2% to 191.41. flow dow component visa was given overweight rating at barclays in new coverage. they say there they will benefit from the global shift to ectronic payments. the price target is $170. stock rising 1% to 141.84. mylan upgraded to buy from hold at aue us research. the analyst says the stock is near an inflion point after years of underperformance. price target now $42. the stock rose 2.5% to $35.14. and natural gas producer cab on th o and gas downgraded from
hold to buy at tutor pickerign holt. the analyst citing the valuation following thell price target at $23. shares fell a fraction to $25.64. and still ahead, the new american export. coming up on nightly business report we tell you woo i tt one ship behind us kicks off an entirelye new w for global energy dominance. next from corpus christi, texas. > the decline in shares of california utility pg&e deepens on track forts worst week on record. there are mouning concerns about
what role if any the utility's equipment may have played in northern california's camp-fire. morgan stanley says investors want clarity o the liability and will be unwilling to own the stockntil there is better protection in place for wildfire liabilities in california. thes fell more than 30% in trading today. its largest percentage drop since april of1. 2 although they did turn sharply higher in the extendedsession, they are now down more than 60% in a week. g > meantime, us bank regulators are easing some lending and reporting rules in areas affected by the fires inc fornia. late today regulators were making banks awarehat borrowers might not be able to repay loans in light of that disaster. oil priss rose for the second straight day despite a government report sho bigger than expected rise in supplies. the priceru of domestic settled right around $56 a
barrel. separately, natural futures fell sharply, suffering the biggest one-tai percentage drop .n more than 15 yea a new report showed a rise in inventories nearly double the five-year average. and the hot commodity cooled ofe lesing down about 19%. meenlt, the globalace for energy domination took a new step today, a big one. all beginning with one ship. brian sullivan is in corpus christi, texas, for us tonight. >> the gol ar tundra ship sits behind us here in the harbor in rpus christi, texas. but it kicks off a newf wave american exports. this is the 15 billion liquefied natural gas export facility. the first purely export facility in the lower 48 states not t last. right now there are plans to build 20 so lng the export facilities in america most in this area. we asked the ceoe if thought
the industry was moving too fast. >> what i worry about is that we don't build fast enough. so our customers have an incredible demand growth forecast. so in china's case, they're growing demand by 50% a year. so if we're not there to philamena need they're getting it somewhere else. >> america is currently the sixth biggest exporter of natural gas in the world. but experts predict we could jump to second in five years because the united states is kicking off so much from the shale o boom. this facility is built by bechtel the private massive building company we spoke to thd ceo a asked him if he thought the ambitious plans with would tually happen. >> it's sort of math matically improbable that every oneop ed in the market happens. of course the permitting process, the eis process that sorts out who gets to go ahead. but at the end of the day from our perspecti the bigge constraint is labor. >> the other question issoney.
sloo stock markets and economies go up investors are more likely to spend thell ns to takes to build facilities like this. but if either of those things slows down american america's big bold bet on gas could go up in smoke. corpus christi, texas. a house of pain for shares of k.b.es h that's where we begin tonight's market focus. the home builders se home orders are down farp sharply compared to a year ago. partly due to the wildfires in california as well as softer demand for speculative homes. omtheny is also projecting revenue below the analyst estitotes. the fell 15% to 17.61. j.c. penny reported a wider loss and lower sales in the recent quarter. the taer cut its revenue guidance for theier, even as consumer spending remains strong. the new c said that j.c. penny has a place in american retailing but that it needs to
better manage inventory and connect better with customers. s thck rose 11% to $1.36. shares of nordstroms fell in extended trading after t retailer reported mixed third quarter earnings and tweaked the annual sales a profit forecast. ea iings camen well below expectations and the company lowered guidance as well that sent shares down srply in lat trade today. and it was a similar story late today forth nvidia. company reported earnings fell short of wall street estimates. and offered an tlook that disappointed investors. the nvidia says it plans to return an addition$3 billion to shareholders. that wasn't enough. the stock sold off in initial after hours trading tonight. facebook was under fire today after a "w york times" report criticized executives for their handling of a number of cries. the report found media company pursued a, quote, delay, den a deflect approach when he it cams to russian
meddling in the election and ke news posts. it also said that top executivet orches a campaign against critics, rivals and proponents ofn. regulat facebook ceo and founder pushed back calling the criticism unfair. >> i've said many times before that we were tooo slow spot russian interference, too slow to get on t of it. and we have stumbled along the way. but to sugge that we weren't interested in knowing the truth or that we wanted to hide wha we knew or that we tried to prevent investigations is simply untrue. >> sharesac ofook were off a frederic shun today. cing up, ford's new road map. o coming up nightly business report we give you an inside look atd' for autonomous vehicle project as it tests on the streets of miami.
ford is taking a rod test. the company is putting a float of self-driving cars on the streets of miami in an effort to make autonomous driving a part of our life. frank holland explains. >> reporter: the tffic and congestion in miami, d aly test of patience for drivers here. but it's a valuable tool for ford as it tests the autonomous vehicle tech it plans to launch in 2021. >> we aroced on the tougher urban areas with our autonomous technology and businesses. >> right now you see the future in motion. inic autonomous veh is driving itself and the ride is pretty smooth. right now we're at level four. that means you seeomeone in e driver's seat.
and their hands have toover th wheel for safety reasons but theedoftware controls spe and when we start and when we stop. these tests are done on a preprogram route but the traffic is real. >> and you see the car saw the light turned yellow and made the stop appropriately. >> the av tech created by pittsburgh based argo ai is designed to react to witha what ened li what happens on the road and eventually adjust for passenger. >> if nept a vehicle that pulse up that knows itspreferences, has the cabin temperature set to what they prefer, maybe the sic is playing what they would prefer. and the idea is to prode that real sooem seamless customer experience. we are building the capabilities to run a business of autonomous vehicle transportation. what that means is that, you cars when we launch the it's not just going to be the car. it's going to be an app. it's going to be the cloud. >> ford calls it transportation as a service. the legacy auto maker is making a $4 billion investment in av
through 2023. at first fordill offer cars to product delivery companies and ride hailing services. pilot ports are domino pos post mates lift lyft and wal-mart. these vehicles in miami test how consumers the act. >> we're laser focused and working with the cities and the businessta and prolity. what the vehicles provide is provide transportation at lower ntst than cur vehicles. >> waymo, theri self-dng unit of alphabet will launch av by the end of year targeting bunesses. general motors cruise units say they will override hailing next year.ay ford it's launching later because it's focusing on safety and tscale. t's all targeting profitability. it's targeting maximum ulgtsizationtind tar a healthy business. >> ready for another ride. >> we are ready. >> engaging. back in auto. >> for nightly business report, frank holland, in miami,
florida. >> and to read more about ford's autonomous vehiclelans head to to our website at nbr.com. >> a look at fal numbers on wall street for you today. the dow rose 208 points. the nasdaq wasp 122. s&p 500 added 28. . and that does it for us tonight. i'm sue herera thank you for joining us. >> happy birthday young lady. >> i knew you were going to do that thank you. >> people on twitter are saying it all over the place. i'm bill griffeth.l weee you tomorrow.
d >> this is "bbc wows america." funding of this presentation is de possible by the freeman foundation, and kovler foundation, pursuing solutions for america's neglected nes. >> this fall, it is a season of revelations, from the choice o america's favorite novel. >> it's 100 books we want people to take a look at.re hoping to get people to fall in love with novels again. >> to the fate of a hero's love. >> i'm still here. >> and i.e >> from thsecret lives of the most amazing cats to new