tv Nightly Business Report PBS February 14, 2019 5:00pm-5:31pm PST
>> announcer: this is "nighory business r with sue herera and bill gri amazoe doesn't lov new york. the company cancels plans to build its second headquarters in the big apple after mounting opposition. retail surprise. sales declined in december atei fastest pace in a decade during the most critical month for that industry. coke goes flat. the soda maker expects sales growth to slow this year and shares saw their biggest drop since 2008. those stories and more tonight on "nightly business report" for this thursday, f good evening, everyone, and welcome. e of the nation's biggest companies is saying good-bye to the country's biggest city. amazon has confirmed that it will not build its second headquarters in new york.
as we reported last week, the company was concerned about mounting opposition from some lawmakers and advocacy groups. in a statement, amazon said, quote, while polls show that 70% of new yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of ha relationshipsare required to go forward with the project we and many others envisioned in long island city, end quote. critiss of the dn did not like the tax breaks that amazon was given to build the prothct it estimates would have brought 25,000 jobs and billilas of d in tax revenue to the city. we have two reports tonight.an a olick on what thaton deci would mean on property values in the area but first contessa brewer with reaction fromg island city. >> on this holiday devoted to love, no love lost in new york city as neighbors and local
politicians duked it outnd amazon announces it's pulling out from its new york city deal. this was supposed to be the largest economic development deal in new york ate's history, a deal that would bring 25,000 to40 00 jobs. jobs that would average $150,000 a year. w york governor andrew cuomo is pointing the finger at localr leaders ending this deal. a small group of politicians put their own narrow political interests above their community. one of those outspoken opponents was local new york city councilman jim van bremer and he did a victory lap news conference. >> we are proud that we fought for our values, proud that we fought for our values. our values in new york city are to defend m workingen and women. >> but the constituentsho live here, neighbors and local businessmen, are furious. >> job killer, everybody!
>> ty feel likehey have lost out on the opportunities, and they pushed back loudly during that news conference. >> i think it's a sad day for the community, i really do. there were a lot of jobs coming our way. there was a lot of energy in th community. and it's just unfortunate. you know, there were a couple of politician who made a lot of noise and they did not speak for community.nts in this >> amazon praised both new york's governor and the mayor, bill de blasio, for being good irtners, but today his statement, bill de blasioso what changed his tune. he said we gave amazon the goodtunity to be a neighbor and do business in the greatest city in the world. instead of working wh the community, amazon threw away that opportunity. amazon said it had 70% support among new yorkers, but those 30% who opposed weren loud their opposition. they wanted to know what the impact would be on transit, on schools, on real estate, a they felt like amazon wasn't being a good community partner n in sitting dnd talking with
them. and so on this valentine's day new york cit contessa brewer, "nightly busine >> now, when amazon did first announce its choice of long island city for its second headquarters, we reported that buyers were flocking to buy up real estate in arat . now what? diana olick takes a ok. >> in th 14 weeks following hq2zon's announcement to put in long island city -- >> this entire cube -- >> reporter: open houses like this one were jam packed. some hoping to live there. others, investors hoping to buy, flip and profit fm what would surely be a jump in home prices. signed contracts to buy prerties, mostly condos, jumped 181% compared to the same period the previou year, according to stribling and associates. 145 sales compared to jt 48 the year before. when the news hit today, sres of equity residential and avalon
bay took a hit. avalon has a large building in a new york cit equity residential hasse big prence right across the river in manhattan. long island city's rental marke was considered overbuilt before amazon with several new towers on t in a statement, the president of new york's real estate board, john bat's, said unfortunate that we've lost out on an opportunity to create tens of thousands of jobs for city residents and generate billions of dollars in t revenue. nevertheless, new york city is still open for business and will retain its status at a worte class c for tech and innovation. sl green got hurt initially as it large presence in manhattan, but the other amazon choice got a bounce. some may be thinkingman may go even bigger in northern virginia. for long island city it's not as if i will suddenly become a wasteland. agents there say all the attention over the lastew
months was very positive and will likely outlast the amazon effect. for "nightly business report," i'm diana olick. today investors got another surprise, retail sales for the holiday season were a lot weaker than expected, posting their worst monthly plunge since 2009. that caused the stocks to jolt lower at the open and after a volatile day the dow jones industrial average fell 103 points to 25,439. th u nasdaq was 6 and the s&p 7.0 was down that sharp drop in retail sises raising questions about the economy. steve lies. the largest monthly decline in retail sales in ninears reported today by the government raised new questions about the outlook for the economy this year with specific concern about whether the american consumer ir wehan originally thought. in data the a that was delayed shutdownl ret sales for december plunged 1.2%.
wall street expected 0.1% gain. the report which covers the critical christmas selling season showed sales declined in most major categories, including department stores and gasoline stations. the numbers for internet retailers were even negative. in an exclusive interview, the data added to a growing of concerns she has about the economy. >> it certainly caught my eye. it's a miss. it's one month ofata so don't want to take too much signal frdd it, but certainly to a story where we want to take onboard tret t some downside risks. at the same time, we're still getting pretty good numbers, more recent numbers on payrolls. >> t big retail miss prompted economists to slash their outlook for fourth quarter growth by 0.7 of a percentage point to2.4%. that would make it the weakest quarter since the first quarter of 2018. but there were questions about whetheroo much was being made of the one retail number because of some unique >> the consumer was losing
momentum going into this final number for 2018, but it also reflects the government shutdown, or at leada the initia of the government shutdown. so the question is does this weakness reflect a bigger issue in terms of the consumer pulling back, or ishi temporary weakness andec we should expt a rebound as we wait for those january and/or february figures. >> the retail number rnforced her support for the fed's current policy stance, which is to ben hold. she said i'm comfortable waiting and learning. for" "nightly business repor i'm steve liesman in washington. let's turn to andrew hollandhorst for his analysis of this data. he is the chief economist at citi.ha andrew,s for joining us tonight. >> thanks very much, bill. >> everybody has got their opinion about what this numbermenumb meant. it's only one month but it a humiss. what do you make of it? >> it's an ugly surprise for valentine's day,el unfortun this number was a lot weaker than we were expecting but i think you have to be careful here. as an economist you're always
trying to separate what is an e trending andm what is telling you something about maybe a new trend we're moving to. strong job growth, strong income growth has been driving strong consumption growth. we saw that in november. you had this weakening in december in this one report so i governor e with brainerd that you have to take it seriously. msbut in t of is it telling us something really different about the strength of the consumer? i don't think we can conclude that, at least not everything else we're seeing is sending a message of strength. here are some special facto here. the shutdown which happened in equity so we're keeping a fairly optimistic view on growth. it's been a strong economy. it doesn't change our view. >> it doesn't change your base case scenario. does it c nge what you thin the fed will or will not do in the future based on this data point? >> so i think the good place at the fed is i right now is they have already clearly
signalled that they're on pause probablyth at least fo first half of this year. reportly after this data you want to wait. you want to wait for some of this delayed data to comeack and see where the consumer is, where the economy is. gn the fed back to hikes? i think they still can. i think that can happen towards the end of the year. u'll have to see stronger data, though. >> so you're notouhanging your ook for the econ but a couple of reports i saw, one from a federaleserve bank, a local one, and another from a brokerage house both reduced their eectations forgdp in this current quarter. one i saw go from 2.7% all the 1.8%.o what do you make of those? >> so i think 2.7 to a1.8 is little aggressive, but this is talking about the q4 data, what happened in decemb yes, we revised down our growth expectation alsorom the higher 2% to now the mid-2%. so those estimates will come
down. remember, we're talking about a 2% plus economy .he we think this can reak sell rate as you getnto t second quarter especially. the first quarter will be dragged by some of these effects. k there is an outlook for strong growth and this is backward-looking q4 and likely to get some rebound in comingar rs. >> andrew, thanks for joining us tonight. >> thanks so much. and now michaelfarr joins us to talk about the stock market's reaction to the data. he is president of farr, miller and washinbaon. welcom, michael, nice to see you. >> thank you, sue. >> what did you make of the et ma reaction to the data? a lot of people thought it could htve been much worse. >> i tho it could have been much worse, sue. in fac i thought that the markets behaved kind of responsibly today, almost like adults, which we didn' a see lot in 2018 with all of the volatility that we did see. you kn, i think steve in his interview with governor brainerd earlier today brought up some really importantpoints, but one of the things that was, i think, clear was thathe consumer
data, the retail data was weak, but i don't think necessarily the consumer is weak. unem isar still rbly low. we're seeing wage gains. there's a lot of other important ta that says that the consumer could continue to spendin. but the consumer was facing a washington crisis shutdown with 600, 800,000 people out of jaukjauk sobs. then w that drop in the stock market. when you see your portfo,o stt g doou think maybe i'm not going to spend a lot now. it doesn't mean that you can't, it meansyou don't. it's different with people being out of work. >> but we have come back in january, throughout most of 2019. we did have the worst stock market decline for a december since the 1930s, but we have come back. now what do you think happens renow that w getting these signs that maybe there is a little weakness going onhere? >> yeah. you know, i think you have to pay attention to the. weakne we take a look at of course
inrest rates and we' got an interest rate on the 10-year at 2.65%. still very low interest rates. as we look to next year and the following year, maybe 2.3,2.4% gdp growth in 2019 is what the fed is sor of looking for. and then still 2% in 2019. so it's n awful. nothing is really awful. but ethink caution after you seen a market that's gone up 17%. >> michael farr with -- f washington, thank you. >> thank you. coke suffered its biggest decline since 2008 after the company said it expects sales to slow this year and that er ovadowed a slightly stronger-than-expected revenue number in its latest quarterly revenue report. the stock fell sharply, down morehan 8% today. sara eisen spoke to coke's ceo and filed this report. >> coca-cola saw another strong quarterh of grout didn't painting the rosiest picture of
the future. the ceo, jam quincy, said it's the economy that has been so cautious. >> a we look into 2019, clearly we see softness in some of the countries that stumbled a little toward the end of 2018. argentina went down strongly at the back ending of last year. turkey is adjusting to some of their troubles and of course europe has sofned a littleit coming into 2019. so i think it's not one country in particular, there's, i think, a few p of the world that are softening that clearly are represented in the cimf econo outlooks. but again, the good years and the bad years willcome. what we're focused on is really executing against that plan. good brands, good marketing, good innovation and our system is executing. >>coca-cola's underlying business is strong fueled by double-digit growth. a return to growth for diet coke after years of underperformance.
alternative sparkling waters and experimentatn with new flavors, like blueberry, acai diet coke and a version of coca-cola, orange vanilla. >> i think around the world you're seeing consumers more interested in rsonalization, more interested in trying new flavors of brands the love, and so you see that in the u.s. with new f vors oncoke, new flavors on diet coke. clearly it's been part of helping stabilize the diet coke business along with packaging and some great marketing. t i think you'll see more from us inms of innovation not just new brands and new products but new flavors. >> ultimatelyoke is tied to the global economy. it operates in more than 200 he world. around therefore, the strength of the u.s. dollar does weigh on those profits when brought back home. if the economy turns in places like emging markets, coca-cola feels it on the spending"n side.
fohtly business report," sara eisen. it is time to take a look at some of today's upgrades and downgrades. exxoas upgraded. exxon is well positioned for the future and cites its liquefied naturalop gas devnts and permean base operations among. >>e stock rose cents to $76.27. d rchr horton was downgraded at the analyst cites the macro housing environment for the year. the firm also noted the stock's valuation. the shares fell 1% to $39.80. dunkin brands was downgraded from hold to buy at argus. the firm also notes management's plan to add fewer stores. shares rose about 1% to ti$69.8. ahead, why trade talks with china are entering a
in washington, the senate p todased legislation that would avert another partial government shutdown. the house is expected to vote on that bill tonight, then it goes nt >> i've just had an opportunity to spe with president trump, and he -- i would say to all my colleagues, has indicated he's prepared to sign the bill. bhe will also issuing a national emergency declaration at the same time. i've indicated to h that i going to prepare -- i'm going to support the national emergency declaration. >> house speakerelosi said that she may mount a legal challenge if a national emergency is in fact declared. senate minority leader chuck humer called such a move a lawless act. and when it comes to trade,
the focus is on beijing where officials from the u.s. and china are trying to hamme out their differences to avoid an escalation of the tensions betwn the world's t largest economie eunice yoon has been covering the story for us all along and she's back tonight with . >> today was a key day for the trade talks. all the majoray s, treasury secretary steven mnuchin, trade representative robert lighthizer and china's vice premier were meeting for their first day of two-day discussions. the two sides are trying to hammer out the framework of an agreemt that wou act as a basis for a potential summit between president trump and president xi later, possibly as early as next monts ther a feeling that the final decisions would be made by the two leaders if they do meet. from what we know, l a is on the table, but the negotiators are still far apart on how to address stickier structural ises and enforce a deal once it's worked out. but the two sides might get some
more time. bloomberg is citing sources saying that president trump is extension a 60-d to the march 1st deadline. separately, we got trade data out of china that gives us a ood look int the impact of the tariffs on the trade relationship between the u.s. and china. it's not necessarily what you might think. chinese expets to .s. in january were down, but up overall by more than 9%. greater shipments to japan, europe as well as southeast asia. but what was even more interesting is how sharply imports to the u.s. fell, by 41.2%. that raises questions as to who is and who is not being affeched by tariffs. it's only one month data but it shows american exporters are getting hurt more severely than chinese ones. it also lends to the argftent that you hear in china within the business community here that even tugh the.s. is an important market for china, it has i limitedluence because china can just export to the rest of the world. forne "nightly bu report,"
i'm eunice. elsewhereoming off a dramatic year, cbs reported fourth quarter results thatl missed wreet earnings and revenue estimates. largely due to its entertainment unit and tough comparisons to la year,hich was very strong. that sent the stock initially lower in after-hours trading. t as julia boorstin reports, one part of the business is >> the key takway from cbs earnings, while revenue and earnings grew slower than expected, the company's ns direct-to-er streaming business is growing faster. acting ceo joe ianiello saying the streaming app has significant momentumheaying t provide a great return on investment and represent one of the company's most powerful long-term growth drivers. he announced they had 8 million direct-to-consumer subscribers between cbs all access and showtime nearly twoears ahead of original projections. as a result, ianiello says they're increasing their target
to 25 mlion domestic subscribers by 2022, this up from projections made in august of 16 million subscribers by then.ia ello saying they're steering directlyus to scaling to consumers. i'm julia boorstin in los angeles. nvidia beats earnings estimates and that's where wet' begin toni market focus. the chip maker closed out a turbulent year with better-than-expected profit and revenue that was in line. but the company is forecasti first quarter revenue below estimates as it faces slowing sales doata centers and weak demand for its gaming chips. i sharestially popped in the after-hours trade following a 1% gain during theon regular ses where they closed at $154.53. ix flags investors took on a ride today, quite a ride, as the earnis beat estimatesy a wide margin, but revenue came up short. the theme park operator was hurt by challenging economic conditions in china, which pushed back some park opening dates there. shares plummeted almos 13%
today to $54.87. restaurant chain operator bloomin brands topped earnings and revenue exptations and provided upbeat full-year outlook as well. the solid results were held by outback steak house which posted gains in same-store sales and customer traffic.um sharesd 9% for the company to $21.06 toda yeti also beat on quarterly earnings and revenue and gave positive guidance for 2019. that company which makes coolers and mugs said that the growth was driven by expanded drinkware products, yet i came public just last october and shares were surging 17.5% today to $21.90. ebay is reportedly planning to layoff workers ast restructures its regional operations. roe online marketplace has faced strong competitionthe likes of amazon and other online retailers. ebay currently employs more than 14,000 people. the stock was up just a fraction today at $36.32. coming , why the world's
largest passenger jet is being . southwest received approval from the faa forgh test f to hawaii. the airline still needs full fao authoriz before it can announce when it will start passenger flights. this is considered a key step in the approval process for a new route. as we reported, that process was delayed earlier this year because of the partial shutdown.t well, the world's largest commercial airplane is flying into the sunset. airbus has decided it'ng g to stop building that massive a-380 due to a lack of orders. phil lebea has more on the big plane that failed to meet big expectatio.
>> the death of the airbus a-380 is not a surprise. aside from emirates, which is basedn dubai, demand for the massive jumbo jet never really to off. with orders dwindling, airbus has decided to stopg buildhe plane. >> the decision we had to take on the 380 i a painful decision, but this will not impactairbus' competitiveness in the market. >> this is not what airbus envisioned when it delivered the first a-380 in 2007, a double-decker plane carrying 400 to 600 passengers on long internationa flights was supposed to be the pfect plane for a global surge in air travel. we've seen that surge with more than 4 billion people takin off every year. but instead of ordering more a-380s, alines have opted for smaller, more fuel efficient planes, like boeing's 787 dreamliner, which has the size and range to connect a wider
variety of citieshe around world. not surprisingly, 787 orders and delivees have steadily climbed higher, while the a-380 has struggled. disappointing return on airbus' $25es billion ient in the plane. >> we've poured a lot of resource into the 380 over many, ny years. and the decision today means the endf production but not the end of a program. by the way, we will continueng supporhe 380 for many, many years to come. >> in fact airbus expects the a-380 to be in service well past 2030, cong mega hubs like london, new york and mumbai. ot for manyer cities around the world, the a-380 will never be the right fit. phil lebeau, "nightly business report," chicago. and finally tonight, "fortune" is out with its list of best companies toork fo evaluating everything from petis to opportu for innovation. climbing to number one is hilton
up from number 33 last year. hilton is the first hospitality company to achieve a number one ranking. saforce, and then wegman's which has been on that list for 22 yes. wow. that will do it for us tonight. i'm sue herera, thanks for ijoining us. bill griffeth. thank you for joining us and valentine's day a well. >> indeed. >> w