tv Nightly Business Report PBS March 7, 2019 5:00pm-5:31pm PST
nnouncer: this is "nightly business report" with bill policy pivo this time it happened in europe, and that got investors here nervous, pushing stocks lower for the fourth straight session. fraud crackdown. the justice department charges hundredsidf indls for victimizing millions of older americans in the largest elder fraud bust ever. >> tax law typo. it's an expensive mistake for some small business owners who are now paying the price. those stories and more tonight on "nightly business report" for and we do bid you a good evy,ing, everybnd welcome. a storm cloud hung over wall street today. stocks fell on more evidence that economies around the globe are slowing down.
today it was europe that was at the center of that storm after the europea central bank cut its outlook for the year and announced a new round of stimulus. while europe may seem far away when it comes to economic and profit growth, it's not. as we have seen repeatedly, a hiccup overseas can affect our economy as well, whether it's through trade and tariff issues or through u.s.-based corporations that do business overseas. at the close, the do y industrial average was down 200 points, the nasda fell by84, the s&p s pped by22. bob pini has more on today's market decline. >> stocks drifted low t throughohe day with global growth fears once again the top of mindor investors. don't underestimate the power of central banks. we had a policy pivot from the deral reserve i december. it got more dovish. nowop we have the en central ba pivot. they're getting more dovish.
ecb chief mario draghi leaving rates unchanged, largi launchin another program to lend cheap money to banks in europe. >> related to geopolitical factors, the threat of protectionism and vulnerabilies appears to be leaving marks on sentiment. out. after a 17% rally from the december low, sector leaders are meeting a certain amount of resistance ithe last few weeks. it's true, leadership groups like the semi conductor stocks, small cap companies, the banks and the haindustrials, they all been weak lately because the markets are not really cheap anymore a they were the market leaders. they're the ones that moved up the most. the key now is to stop the decline in earningsti tes. and there are signs that that is starting to happen. so the first quarter earnings growth estimates, they have stabilized around down 1%. still negative, but if this
keeps up,ou earnings be positive for the first quarter because they're usually revised upward. that's the key thing. that will push this number into posive territory, and that means likely we'll see no earnings recession, at leastot starting in the first quarter. gotten used to the idea of an endless up spiral, but maybe it's time to temper that up indication. forsi "nightly ss report," i'm bo. a feral reserve governor said both global and domestic economic growths softening. lael brainerd added the weakening should mean the central bank shouldw s its urce of interest rate increase >> while economy continues to add jobs at a solid pace, demand appears to have softened against a backdrop of downside risks. prudence cancels a policy ofhf wa waiting, especially with no signs that inflation is
picking up. >> brainerd cited trade and brexit for her outlook. she has a permanent vote on the fed's rate-setting arm. a new report out today showed that worker grew at a nearly 2% annual rate in the fourth quarter. that registered its strongest growth rate over a nine-month period sin10 worker productivity gains in theory create a opback for rising wages, corporate profits or both. separately, another report shows that household net worth saw biggest decline since the financial crisis. according to the federal reserve, our total net worth dropped by $3.7ll tn to about $104 trillion at the end of the fourth quarter. much of that is being attributed to that steep stock market ecline we saw at thing of last year. and it is thatthousehold wehat scammers are after. the justice department today announced the largest ever nationwide crackdown on eer fraud schemes. schemes so aggressive that even a former cia director was
targeted. andrea day has the details. >> reporter: the sweep this year involves charges against more than 260 defendants who allegedly defrauded more than 2 million americansor of than three-quarters of a billion dollars. the numbers are with more seniors being targeted now than ever before. criminals in some cases duping the elderly outf their life savings. attorney general william barr calling the fraud massive and despicable. >> we have to prosecute an all-out attack on this kind of crime. >> reporter: but investigators guycon men picked the wrong when they targeted 95-year-old bill webster, a former cia and fbi director, telling him he just won millions of dollars i alottery. the catch, he'd have to send in 50 grand to cover the taxes. >> i fl so sorry for older people who get this good news of
the money they have won and they are going to be terribly disappointed. >> reporter: he said the caller was leless, threatening to kill his wife, even after learning who bill was. the c played along with the scheme and the man behted it was ulti taken down. >> our message and the reason we're here tay was that anyone, absolutely anybody can be targeted by the scammers, manyf whom seem legitimate, friendly, like your next-door neighbor. our message is don't be oled. >> reporter: investigators say the callers are very creative and always looking for new ways to dupe the elderly. the most common is a tech support fraud based in india. that's where callers will say your computer has been hacked and they'll fix it free of charge if given access to youre comp i'm andrea day f so why has elder financial abuse become so widespread and what can you do to yourself? joining us tonight is the senior vice president of financial security at aarp.
jean, thanks for joining us tonight. >> thank for having me. >> boy, this is widespread. how do -- i have to think that scammers wouldn't do this if it didn't work. why does it work so effectively? >> well, there's a portion of the older american generation that are very trusting, quite frankly, and they feel bad for not picking up their phones. once you have someby on the phone, you're more likely than not to actually listen to thema and prey to what they're selling you. >> i assume you're encouraged by today's action, but it seems from everything we're h'sring really only the tip of the iceberg. can you put it in perspective for us? >> absolutely. so we are very encouraged by the fact that some scammers have been -- andud fers have been caught. you hear too much about frauds and never sort of hear t good news of the bad actors being caught. so there is an ongoing trend around the tech support scam denitely tracked by the ftc. we have a fraud help line ands
that trary similarly. we're getting a lot more calls issue.this so broadly speaking, this is really a devastating fraud that's really hurting a lot of people, especially older americans. >> and it would seem that education could get rid of this, or at least help to keep peopl from answering the phone and going along with some of these scams. now, you mentioned the hotline. what else can be done do you think tote edu these elders about what the possibilities are for these scams? >> absolutely. wellirst of all, a microsoft le an apple, all the reput technology firms would never call you out of the blue. so if you actually get a cal t frm and they're saying that they're microsoft here to help you because they have detected a virus on your computer, hang the phone up. 's 100% a scam. >> same with the irs too, ght? >> same with the irs. there's a lot of imposters trying to pretend to be somebody
they're not. none of these organizations large governmental or companies ever call you out of the blue for no good reason. >>t,t points does it not, the technology and the advancement of technologynd how it's integrated into our lives in so many different ways. some people are not as comfortable with technologyrs a ot are so when something pops up on their phone or their computer, they're not as well equipped to maybe realize that's a scam. >> absolutely. whether you're tech savvy or not, the fraudsters r arelly good. i myself got an e-mail the other day that actually talked about downloads that my kids were doing. i thought they actually did it, but in fact it was not real. so be very careful if you get any-mails with links, never open them, especially from people you don't know. so the best thing to do,uite frankly, is don't answer the phone from anybody that you don't know. don't respond to an e-mail with anybody that you don't know. if there's pop-up on your
screen that actually has you call a number, none of the programs actually work that way. do not call that number. >> jean, words ofism there. thank you for joining us again tonight. appreciate it. >> thanks for having me. bye-bye. equifax and marriott were victims of two major data od breaches and executives from those companies appeared in front of lawmakers who are working toss the problem with new regulations. kayla tausche is in washington tonight. >> reporter: executives from marriott and equifax tookhe apology tour to capitol hill, after suffering two of the biggest customer data breaches in u.s. history. >> we deeply regret this incident and are committed to h determinin it occurred, supporting our affected guests and enhancing secsuity ms to protect against future attacks. >> marriott's ceo, arne sorenson said the company inherited the security issues when the company bought arwood hotels. overour years hackers took
information from 383 million starwood customerslind 5 m passports. u.s. officials have said china conducted the hack. >> we have shared everything we have with the fbi, including the malwares used and the tools used in the system so that they can do that kind of investigation. we've simply been focused on making sure the door is closed. >> at credit reporting company equifax, a 2017ub breach scted 143 million customers to potential bank and identity fraud. senator tom carper, the top democrat on the committee that hosted the executives, blamed thecompany. >> information obtained by this subcommittee and included in aor bipartisan r released last night illustrates a years-long neglect o basic cyber security practices. >> reporter: with cyber attacks beco regular occurrence, lawmakers are shiftio from tryi stop them for setting expectations for how to deal with them, like whenme cus should be notified and whether
companies should be able to make money off their vulnerability. equifax's ceo touted the company's free products for victims. >> when the breach happened, we offered a free credit monitoring product to any american. >> reporter: as lawmakers eye newederal regulations, ted rossman of creditcards.com says consumer take their own measures. >> we can't protect ourselves against everything but by freezing our credit and by checking in on our finances rl regu even if we can't totally prevent it all, we're going to know early it's going to make it easier to unwind. >> reporter: while fewer peopl arling victim to identical fraud than in years past, the cost for those who do is going up. accordingo javel research, that out of pocket cost hit $1.7 billion last year. for "nightly business report," i'm kayla tauschewan shington. time to take aom look at of today's upgrades and downgrades. we begin with shares of toll hi brothers, were downgraded to underweight from neutral at jpmorgan. the analyst calls toll's
fundamental outlook below average. th n price target $32. despite that downgrade the stock rose nearly today at $35.51. ab inbev was downgraded from sector perform from a top pick. the analystd the company has little prospect for margin growth right now. the firm also cited the stock's valuation and that stock did ll today to $80.36. pepsi was initiated with an underperform rating at credit suisse. the analyst c therees an increase in competition and its struggling beverage business. the price target is $100. the stock fell a fraction to $116.10. estee laudegr was ed from overweight to neutral at jpmorgan. the analyst cites confidence the earnings goals are achooefbl. the stock rose to $155.40. still ahead, the impact of steel and aluminum tariffs one
year later it has been a r roughe for the transportation sector. ore dow transportation index has fallen ten straight sessions, making this its longest losing streak since early2009. and while airline stocks only make up a part of that index, they have als hit some ebrbulence recently. phil leau spoke to a number of airline ceos tay in . >> reporter: despite airline stocksdelying conbly lower over the last week as investors worry about the possibility of o recess hurting business, the ceos of several major airlines
say they still see strong demand, especially he pretty much for the half a year we're feeling pretty strong we're not seeing any significant slowdown at this point. >> strong globally, domestically everything we've seen visibility is not the greatest, people book 30 days i advancut continues to be very strong. >> a lot of our business originates on the westoast of th united states. the markets that we're operating in, we're seeing quite solid demand. >> reporter: the next big test for airline stocks, what happens in the spring and tral seasons, two of the busiest times of the year for the lirlines. those results w be critical to seeing if these stocks can peaps build a base and start to move higher over the next several months. phil lebeau, "nightly business report," washington, d.c. a food fight at kroger. and that's wheree begin tonight's market focus. the supermarket chain reported a drop in profit and says it pects earnings for the whole year to come inow b
expectations. the y has spent billions of dollars to overhaul its stores and improve online sales in order to better compete with walmart and amazon. its cfo says its investments will pay off. >> with our launch of kroger ship that we made some investment in in the fourth quarter, which was part of the margin erosion we saw fourth quarter, we would expect to serve 100% of the united states by this time next >> nonetheless, kroger shares fell 10% today to $25.61. elsewhere, general electric gave investors an update todayt on insurance business. the company said that current reserves for its long-term care policies are sufficient and that it's looking to increase premiums. ge also said that it's on course to raise about $9 billion by 2024 to cover the cost of those long-term care policies that were written about a decade ago. the stock rose more than 3.5% today to $9.45. online marketplace etsy gavs invest five-year growth
target that was in line with wall stree expectations. etsy also said that it sees global merchandise sales gwing compound rate of 16% to 20% annually with revenue growth slightly faster. but investors were expecting more and shares fell 4% today to 67.24. h & r block's quarterly revenue topped expectations as its do-it-yourself tax returns a offs drop in assisted returns. the income tax filing company's full-year outlook was in line with wall street estimates. shares rose more than 2.5% to $24.ti. interal game technology missed on earnings but revenue was in line with forecasts. the company's 2018 results were in line with the outlook that it provided back in october. the gaming company which makes slot machias seen shares nosedive over 45% over the past year. today they fell16%o $14.35. barnes & noble beat onin
ea but posted flat sales for the holiday season. seller vestors its full-year earnings will be weaker than previously estimated. shares fell % to $5.11. costco reported better-than-expected q trterly profnks to an increase in online sales. the warehouse club operator proved its website, which helped attract more shoppers, as did same-day delivery for groceries. total revenue was just shy of estimates. didn't bother investors, though. they sent the stock up in initial after-hours trading. shares finished the regul session down 1% to $216.79. online ticketing company eventbrite reported a wider-than-expected loss and issued weak guidance. paid ticket sales grew as did net revenue but that wasn't enough to offsetheousy outlook and that sent the stock lower in initial after-hours trading. it rose 3% in the regular sessasn. it now been one year
since president trump enacted those tariffs on imported steel and aluminum. the results have been mixed. i meanwhile some domestic producers do credit the levies with a reviving struggling industry, others say the tariffs have had a negative impact, resulting in higher prices on me everyday items. frank holland takes stock of p .ht of the trade war one >> we're urging all companies to buy american. >> reporter: that was presidentm s goal when he imposed steel and aluminum tariffs last smarch, and itms to be working. aluminum production in the u.s. is expected tncase by 60% this year, compared to before the tariffs. and there's more room for growth. domestic supply is only meeting ab20t of u.s. demand. michael bless, ceo of century aluminum said the 10% tariff on aluminum makes u.s. companies more competitive against foreign
producers that sel l ater prices because they get government subsidies. >> the u.s. should be able to producsome, a vast minority in aluminum but some of its primary aluminum. 1.2 million out of 5.7 million tons here. the tariffs were the only way to right the playing field. >> reporter: he said as the tariffs took effect century aluminum has increased production by 250% and increased workers by 25%. the last quarter, the company reported a loss. the result of a sharp rise in raw material costs. >> the price of aluminum doubles and our profits crater. so it'spo a try condition. >> reporter: last year commerce secretary wilbur rossamously dismissed any price increases as minimal. >> here's a can of coca-cola. coca-cola h 3 cents worth of aluminum in it. so if that goes up 10%, that's 0.3 of a cent. i just paid $1.49 for this can
of coke. it doesn't meananything. lot tothis hysteria is a do about nothing. >> reporter: but coke ended up passing those higher costs on to consumers. >> we have w to takeh our bottling partners an increase on n our beverage industrye middle of the year, which is relatively uncommon. that's the freight, the metals, the steel, the aluminum going he up, labor going up. >> reporter: as trade talks between the u.s. and china continue, steel and aluminum producers are watching the are growing their business. for "nightly business report," coming up, a small the tax law and a big headache for one industry
huawei is suing the u.s. the chinese telecom company contends that congress violated the constitution when it banned government agencies from purchasing huawei equipment. theas.s. government alleged that huawei is closely aligned with the chinend government that its equipment could be used as a spying tool. huawei has denied those allegations. we have certainly been telling you about some tax filing surprises under the new tax law this year. one.'s another the legislation was supposed to allow businesses to write off construction costs in the very first year. but one industry accidentally t lef out. ylan mui explains. >> reporter: matt thought he was going to get a big break under the new tax law. he owns this burger king and hise in west virginia planned to expand with two new locations. now, that's on hol because of a code. the tax
>> that's the frustrating part about this. >> reporter: under the new law, restaurants don't qualify e wri for businesses get construction. instead, they have to write it off over 39 years. that's even longer than the 15-yearchedule they had before the new law. in other words, he is worse off than he was before. >> we do not have any certainty that we will get to depreciate at that 15 aear rate or that bonus rate, and so we really can't count on that. so we are slowing down our rate of remodel and new builds. >> reporter: that's the exact opposite ofhat congress intended. >> it's just a legislative language mistake thateeds to be corrected. >> reporter: that correction is in the works here ingt washinon, but it needs support fromnd republicans democrats. >> this is a 15-minute fix. let's do it. let's get on and let's not play partisan games with something that affects jobs in every mesingle er's district. >> reporter: there is hope that a fix could pass later on this
year as part of a big government spending package, but nothing is guaranteed here on capitol hill. sow, for business owners like matt remain in limbo. for "nightly business report," i'm ylan mui in washington. and that is "night for toni. i'mhe sue ra. thanks for watching. we'd like to remind you that this is the timer of y your public television station seeks your support. >> and i'm bill griffeth thank you very much for that support. have a great evening. we.