tv Nightly Business Report PBS March 11, 2019 5:00pm-5:31pm PDT
ts "nightly business report" with bill griffeth and sue herera. safety ncquestions. ns mount over boeing's newest plane following a deadly crash over the weekend and the faa weighs in. bgetbattle. the white house tells congress how it wants to spend your tax dollars. energy boom. why the u.s. is now a force to be reckoned with in the global oil market and it's reshaping the industry as we kw it. those stories and more tonight on "nightly business report" for monday, march 11. and we do bid you a good evening, everybody. welcome. wepiaw an tug of war on wall street today. the dow was down 242 points at its low when its highest priced
and therefore most influential component boeing fell as much as 12% in response to that ethiopian flight crash yesterday. it involved the aerospace company's newest model, and we'll have more on that in just a moment. but the dow stage a strong reversal because of a gain in apple shares aftpa that c received a buy recommendation from an influential analyst. other stocks then followed suit and the dow's big decline became a big gain. at the close the industrial average was up 200 points. it closed at 25,650. the nasdaq was up 149, its best day in six weeks. and the s&p 500 added 40. and now to boeing which fell more than 5% in trading today, though it was down asuch as 12% during the trading session. that is because of the plane crh over the weekend that involved boeing's 737 max 8. the faa says the plane is still airworthy. investigators arl on the scene
looking to see if there's am probith the aircraft that many consider to be an important part of boeing's future. phil lebeau has mo o. >> reporte day after the crash of an ethiopian airline 737 max 8, vectors have recovered the black boxes that couldxplain what went wrong. shortly after takeoff the pilot said there was aem probl and struggled to control thebelane fore it crashed. easter eeimilar to what happened with a lion air 737 max 8 crashed in the java sea last october. >> it certainly is too early to rush t judgment. the two different accidents in two different countries but until we get a lite more facts we can't compare them. >> reporter: boeing says the mai 8 safe despite concerns the plane's design could create certain situations where faulty data mig force the max 8's automatic anti-stall technolog kick in. when that happens, it pushes the
plane's nose lower. some pilotsy have complained t didn't know about that technology or how to deal with it. late last year the faa ordered boeing to tell airlines more explicitly exactly how crews should respond in those situations. both the faa andhe ntsb are probing the crash in ethiopia. it may be t ely to know what caused the accident, but china, indonesia, as well as some airlines are worried enough to ground their 737 max 8s raising concerns about boeing's most popular plane. with monthly production steadily rising, the 737 billions in cash for boeing. >> given the magnitude of how big the 737 is for growth drivers, that's what's driving the fear >>factor. eporter: here in the united states american and southwest arehe two airlines that fly the boeing 737 max 8. while there were plenty of people on social media saying
i'm not sure i want to get o is plane, both southwest and american say the plane is solid and they stand i by and will continue flying it. guys, back to you. >> phil, tell us more about the faa's directive late this afternoon and the agency's decision not to ground the plane. >> reporter: well, essentially what they're saying,ng i'm loo at it right here, they just issued it. it basically is them, the faa, saying, look, we haven't seen enough here that tells us this plane is unsafe and it grounded immediately. in addition, as part of this airworthiness continuation from the faa, they are saying that boeing wilakbeg some design changes to the 737 max n by later than next month. so it's partly them saying to the world, it's safe. it's also partly the faa saying, boeing understhnds some o changes that need to be made to this plane and they will be making those changes,st at l by next month. 0> by the way, we should point out of these max 8s are in
service around the world. there are about ir54nes so, you know, there are other airlines that are going to have to make a deussion, not american and southwest on this, right?rr >> reporter: t. correct. as the fukushima daiiche goes, determination whether or not to use a particular aircraft. >> phil lebeau, thanks. >> reporter: you bet. the bull market turned ten over theke w and inevitably investors want to knowf it can continue. the chairman of the federal reserve was asked that question during an interview last night on "60 minutes." >> i would just say there's no reason why it can't continue. >> reporter: for years? >> eventually expsions come to an end. the business cycle has not been repealed, but i would say there's no reason why this economy cannot t continue expand. >> just last week the man who is credited forallinghe 2008 crisis says he feels long-term investors should get used to lower real returns.
>> over a long horizon, like 20 years, u.s. market will be delivering 2 or 3% real, and for the last 100 years we're used to it delivering perhaps 6%real. is is very painful -- it's not the end of the world, but it's going to break a lot of heartinhe is when we're right. >> what should investors make oe thomments from two very inflntial figures. ining us is art hogan. welcome back,ar ur. >> thanks for having me. >> just last week those were saying we should get used to lower interest rates down the road with the fed on hold at least for now.ow so rates, lower returns. do you agree? >> well,kn you , i think you have to put things in context and talk about what time frame both of these speakers were talking owout. jayl was asked a question about them both continuing and might have h, he said for a couple of years. i think he's talking short term. jimmyrantham has been talking about this for a long time.
he's talking abo what areeal returns going to be like for the next 10 or 20 years. looking at this and saying the last ten years we had 17 1/2% annual returns, we're not going to see that. we were coming out of a big hole with the s&p 500 off 50% at its low point. yes, obviously we bounced bacyo but i look at the natural history of the market, for us to expect normal returnshe over next 10 years makes sense. normal returns would bebe anywhe een 6 and 8% which is going to outpace fixed income. in my mind the time horizon has to look at this. what does it mean to you,i, and the investor? o we make any changes because jeremy grantham thinks the total returns might beess than average? >> you've always advocated, and i assume you still do, a balanced portfolio, take a look at reit, lance when we get the inflection points. >> sue, that's the most importan to have a plan,
right? stick to the plan and tune out some of the noise. part of t sticking t plan is sticking to a risk tolerance. you can sleep with theio portf you have and setting a calendar item such that you know that you have to look atthis. has the movement in the market had me overweight in the mart and n enough exposure to fixed income? that rebalancing on a regular basis helps that. you have to have a plan and want o stick to it. >> arthogan, words of wisdom. national securities. good to see you. >> good ks see you. th across the atlantic a critical brexit voteak will place tomorrow. the country is set to leave the european union on march 29th. as ofs now there no deal outlining exactly how that will happen and wsillem marks explains,ithe pal fighting has become a parliamentary game of brexit chutes andladders. >> reporter: several months ago theresa may negotiated anem agt for the u.k. to leave the union.
in january a majority in the parliament voted against it. since then may and members of her cabinet have shuttled between bru and westminster to make tweaks to the deal so the house of commons can finally approve it. tomoow is the current deadline for brexit. that's less than three weeks away how can may get from here to there? well, by march 12th she must offer parliament another up or down vote on her divorce agreement with or whout revisions. if lawmakers approve it, she could still try t make brexit happen by march 29th. it's possible she might need more tim to rush through all the necessary legislation in which case she could ask for a brief extension to the deadline with an unctain enddate. if her deal loses that first vote, may's promised a separat second vote on march 13th. that could allow parliament to detsde whether it w the u.k. deal, t the e.u. with a
just not may's deal, or with no deal. now if no deal wins the majority, then without any comprehensive arrangements over trade, cusms or citizens' rights, brittain would still leave the e.u. on march 29th. but if enough lawmakers dislike that option, may's guaranteed a third vote on march 1th to consider a possible extension. if that idea wins parliamentary support, the u.k. would ask europe for more time its options. theresa may wants to limit any extension to threeut months it's not clear whether the e.u. will suggest more time than that, demand less time than that, or offer no time at all. if that third vote fails on march 14th, the u.k. could be back to square one.fo "nightly business report," i'm willem marks in london. time toake a look now at some of today's upgrades and downgradh. we begin w apple. we mentioned this earlier, they were upgraded to buy from
neutral atof banamerica, merrill lynch. that cites stabilily in the suhain and the likely boost of the 5g networks later this year. price $210. that rose 3 1/2% t to boost dow to 178.90. facebook was uyupgraded to at nomura. they cited focusing on messaging and faster than expected transition to facebook stories. price target now $215 and stock rose about 1 1/2% to 172.07. > oracle was downgraded to reduce from buy at nomura. they're under iesting in research and development and the pace of buy backs can't last forever. the price target is $42. it fell to $52.66.fi eye was upgraded from neutra the potential for billings to accelerate. re price target is $20.
the stocke more than 5% to $16.97. nd still ahea the budget battle taking shape in retail sales rebounded in january. only a month after their biggest decline in ten years. commerce department reported this morning that sales were up.2%. that was better than expected thanks to strong demand for buildingmaterials, but december's number was actually revised even lower to a decline of 1.6% compared to the originally reported decline of 1.2%.
business inventories rose in december as sales dropped. economists say that could potentially lead to a pileup of unsold goods. inventories are closely watched because they are a key component of g dssestic product. this release of this report was delayed because of the pargoal rnment shutdown. the white house set its $4.7 trillion budget to capitol hill today laying out itsit pris for the next fiscal ar. and as ylan mui reports now, it is s expected tork a lot of debate. >> reporter: president trump's budget calls for a record $2.7 trillion in cuts to federal spending over the next decade. most of that amount,1.9 trillion, comes from changes to mandatory spending among them, new restrictions on medicare's prescription drug benefits and work requirements to qualify for medicaid and food but there are also new costs like making all of the current tax cuts permanentnd a b increase in defense spending to $750 billion forcaext f
year alone. >> this budget is yet another responsible spending plan from presideump. the president has continually called for fiscal restraint and will persistisn efforts to end the waeful spending. reporter: it rechrist on optimistic forecast. that is way above the projections of the nonpartisan congressional budict o which expects growth to come in under 2%. evenso, the white house expects ae deficit will hit a trillion dollars this yea the budget won't balance until 2034. on capitol hill democrats say trump's budget is dd on arrival, especially since it includes $8.6 billion for thell border >> i think this is actually a reci for the decline of america. it's very disappointing, and unfortunately it'she same type of budget that republicans have been proposing for several years now, one that decimates
important investments in human resources in the country and basically says the federal government has no role in making sure that we have an opportunity-based society. >> reporter: congress ultimately has the power of the purse, but the president has the power of veto. these are just the oning talks in a bitter battle over the budget. foror "nightly business r i'm ylan mui reporting. nvidia begins buying chips. they are buying melanox for $7 billion in what is nvidia's largest acquisition ever. the combination of the two chip makers is designed to reduce nvidia's dependence on the video game industry and increasen dependencehe data center market. nvidia closed at $161.14 and melanox at $117.89.
barrett gold is dropping i $18 billion hostile bid to take over numont mining which would have created the largest venture. "the wall street journal" says numont gets 1/3 of its revenue from nevada whileartt gets e8%. barratt shares ros to 2813 and numont >fell. deutsche bank has reportedly agre to hold talks to explore strategic options including a merger. multiple reports say the talks were addressed to address the saggingperformance. l&m troy is putting up theb ty division. the division which makes products like pert shampoo and
revlon hair dryers is expected to bring $ in million if sold. tesla is now planning to raise prices on its high end vehicles by about 3% but the electric automaker will keep the st basic version at $35,000. the company said it will keep moref its retail sales open -- locations open than it hador inally planned. shares were up more than 2% today to $290.92. and trans ocean has signe two new contracts with brazil's petro boss. th two deals combined are worth nearly a quarter of a billion dollars. that more than expected. that's why the stock is up 6 1/2% to $8.63. america's growing influence in the energy market was ondi lay at one of the world's biggest oil and energyer coces. briano sullivan traveled texas
where the talk o focused the shale oil boom, geo politics and the future of opec. 5,000porter: more than people from over 70 countries drilling into houston. attended by the ceos of every majoy, gas comp heads of state and two members of the trump cabinet. secretary of state michael pompeo and secreta of energy rick perry. cnbc spoke with secretary perry and wesked him h energy and national security come together right now. >> so the united states with the shale boom, with this revolution that'sccurred in this country, and i might add with the development and the growth that we'reg in our renewables in the nucle side of things, all of this basically says to the united states, you do not have to worry about being heldh age by any country in the world with any type of fuel. you can do it yourself right here. >> reporter: american energy independence has been talked about by every president dating back to richard nixon.
while it is unlikely that all imports of crude oil will be replaced, perry believes that the energy boom will continue to reape global markets, particularly with liquefied natural gas. a huge growing market that chine desperatelys. in fact, gas is so vital to ig role in playing a the trade talks. we asked secretary perry how important. >> it's part of the mix. may not br, the driut it's always hanging out there as part of the matrix, if you will.y so v important, and america now has the ability to use that a very positive way when it comes to trade negotifaions. >> in, as we produce more oil and gas, we will need to hll more of bot around the world. the international energy agency says that not only will crude exports keep growing but we will soon pass russia and even close in onppaudi arabia on sg oil around the world.
energy expert dan jurgen, a founder of this conference, says the united states is now the force to be reckoned with in oil and. ener >> the u.s. has a big impact. you see the kind of growthndt thef this year the u.s. will be producing around 13 million barrels a 2 1/2 times what it produced in 2008. what a big change, andnk i t the other producers around the world are really having to react comingamount of u.s. oil to the market. >> reporter: even just ten years ago the women and men here would ve barely talked about sending our oil and gas outside the country. l the conversation would have been about imports not exports. but america's shale oil boom and energy renaissance has changed all of that. just as it is changing energy policy both here and abroad. and made texas and in many ways this conference the center of the energy foworld. "nightly business report," i'm brian sullivan, houston, texas. coming up, building a brand.
wait till you seehat some companies are doing to get the south by southwest conference actually started ar3 ago as a music festival, but today it's much more than that. among other things it has become a place whe companies go to draw atttion to their brand, and this year the mketing is very high tech and extreme. julia boorstin takes us to austin, texas, tonight. >> reporter: south by southwest draws innovative tech companies from awod. the demos, conversations and technologies here set the stage for trends to watch. robots, electric scooters crowding the streets. virtual reality tonter new
immersive worlds. and augmented reality to make o trying earrings and glasses virtually possible. and what would a tech conference be without drones? one company is here showcasing its personal drone aircraft set to take flight latar this >> this is not the o future personal aviation, it's the present of personal aviation. we'retarting now. >> reporter: this conference in austin is also a key battleground for media companies to reach the consumers who are here and encourage them to spread the word to their social mediafollowing. the most dramatic experientialg marketinn austin, hbo's creation drawing some 3,000 visitors and hoping to reach millions of fans. hbo investing millions ofll s to bring fans into this world of "me of thrones" shipping in not just the iron throne but costumes to outfit the 80 actors w have a script over 100 pages long.
the goal, toxp make theience as authentic and immersive as rpossible. >>orter: hbo spent six months working on this experience including bringing in a dialect coach and a score for a choir. with this experience kicking off a nationwide partnership with thes. red cr >> the red cross saw over 40% uplift in new atnors. the goal. it becomes a lifetime value proposition for these people. promoting : amazon the wcoming sho "good omens." advice cr creating an ice rink al a speak easy. highfi pro names from washington making the trip to austin to talk to this crowd about the future of regulation. >> we want to keep that marketplace competitive. >> reporter: senator elizabeth warren doubled down to break up big tech companies and amy
klobuchar talked taxes. i'm juliaoorstin in austin, texas. before we go, here's a look at the final numbers o wall street. the dow gained 200 points. the nasdaq was up 149, its best day in six t weeks and s&p 500 added 40. >> so are you planning to take a drone down the west side highway now that the future is here? >> i think it could be. really . i won't be in it but that's okay. >> me eier. >> i'mue herera. thanks for joining us. we'd like to remind yous this the time of year your public television station seeks your support. >> i'm bill griffeth. thank you very much for your support. we'll see you