tv Nightly Business Report PBS May 10, 2019 5:00pm-5:30pm PDT
this is "nightly business report" with bill griffeth and sue ♪ ♪ >>all street whirlwind. the dow stages a -point comeback ending higher and it was all because of trade. >> trade proves stocks. our market monitor says he's investing in names that will perform well no matter what happens with cha. disappointing debut. uber takes a ride to wall street, butt it did receive the warm reception expected, and shares of the high-profile ipo slipped. those stories and much more tonight on "nightly business report" for this friday, may the 10th. and we do bid you a good evening, everybody. welcome. sue is off tonight. as anticipated it was a busy friday if washington and in new
york to close out this week. uber sharesra beganng and trade talks ended with no deal. we begin with the rersal on wall street. it was all because of trade after a ense start to the day and a 350-point decline on the dow, president trump hinted that there was a chance that the tariffs on chinese goods could be removed andord that trade talks themselves will continue soothed some other fears and stocks tookff. at the close the dow was up 114 points back to 25,942. the nasdaq added 6 and the s&p was up 10. the nasdaq and the s&p suffered their biggest weekly declines of the year so far. bob pisani has more on all of the day's downs and ups. >> wall street went on another wild ride today with the d sinking more than 350 points at its lows as the white house followed through with its threat raise tariffs on $200 billion in chinese goods. all three major averages closed
out one of the worst weeks of the year down 2% across the board, but stocks managed to end well off session lows, basical d flating the day. so what exactly is keeping the market afloat? the refusal to believe that there is going to be a long trade war that will be ruinous foh sides and the market has consistently chose to cling on to hopes that the tde deal will get done eventually and they did it again today rallying after treasury secretary steve mnuchin that ongoing talks were constr and they took another leg higher on a single tweet from the editor of a chinese news outlet saying trade talk his not broken down and the two sides agreed to meet ife beijing in future and overall, investors believe that if we end up kicking the can down thed on a trade deal for another month, that's fine, but if the trade wars carry over into the election, then aobal grow earnings estimates will seriously have to start
comingow for "nightly business report," i'm bob pisani at the new yo stock exchange. >> and from wall street to washington, investors were watching our nation's capital developments on the trade issues with china kayla tausche was there with us. >> company shipping printers and handbags for frozen fish and 5700 other items from china will see their bill rise sharply when thoseea goods u.s. shores in a few weeks if there's not a trade deal. president ump tweeting that the talks with china were constructive and candid and will continue into the future. and that o tariff may may not be removed as part of the negotiation. regrets that the white house heightened tensions and it would have to retaliate. already reportedly buying chines stocks to soften the u.s. officials say china's at fa with the escalation after reneging on parts of the deal late last week. mier still p showed up for talks in washington.
ft said i come here under pressure, but four hours of talks thursday evening and two hours friday morning a cordial good-bye between the counterparts. thra top white house negotiator until two weeks ago delayed, but ay be not off the table. >> there has been a lot of back and forth. there's no questio about that and that's why i'm saying i think we can still get to a replace where ts an agreement. however, it is very significant that they aren't willing to commit to specific things at this point and it's critical for the united states that they get these commitments and that this deal can be enforceable and make a difference over the lock term. >> u.sme con are already on the hook for ll$69 n in added costs for tariffs and $767 for the average familyf four. president trump says there's absolutely no need to rush a deal, that it would be greater than any deal. i'm kayla tausche in washington.
we've been reporting how tariffs are impacting ifferent businesses and today we take you to different parts of the country where the trade tenons are definitely being felt. contessa brewer is with the lobstermen in massachusetts and diana olick reports on the home remodeling business in shington and we begin with jane wells at ground zero for chine import, the port of los angeles. >> yeah, you know, a funny thing is happening in th trade war between the u.s. and china, companies aorking around the tariffs. how? >> the chinese factorywn might a production site in vietnam and they simply move the production from china totn v and the chinese factory still makes the profit, but the u.s. impoer is t taxed because the goods are coming out of vietnam. >> okay. let me throw out new numbers in this trade war. according to a congressional group which monitors u.s.-china trade during theirst quarter, u.s. exports to china fell almo 20% but check this out.
at the sam utime overall,. exports grew t.3%. hina is not buying as much of our stuff someones. >> we are seeing more goods out of the southeast asia and not nearly enough to make up for the ch. a busine >> the ports themselves meanwhile, are doing fine along the pacific, l.a.'s container traffic is up almost 5% year to date and oakland had its busiest ndapril ever a imports have surged, many from china meaning tariffs are bei paid, but not by china. they're a billion the ares in extra costs and walmart, a quarter of a billion so this ball just keeps on rolling and getting worse and worse for importers in terms of cost management and cargo on the water will not be impacted. so we really won't see a change for the last couple of weeks and 'll take stock of where orders are going. >> is th affecting the u.s.
consumer? overall inflation is still over 2%. what about the hit to gdp? okay, bear with me as i show y m onee number. during the first quarter, the drop in u.s. exports to china shaved this much off gdp. 0.004 of 1% $6 billion and the u.s. treasury is raking in several times that amount in tariffs. >> for nightly business report, i'm jane wells fro the port of los angeles. >> now toontessa brewer in north bridge, massachusetts, at a company feeling traed by tariffs. >> as the steel mesh roles off the welding machines a riverdale mills. >> the tariff is a fancy word for a>> tax. the ceo is really feeling the heat. >> when we get an invoice for steel, we pay the invoice for the steel andhen the invoice for the tariff on top of that. for that. paying >> riverdale mills makes 3,000
steel mesh product, everything from the highen security fcing to the mesh for oyster cages. the mesh manufactured for globster traps into 85% of all those built in north america, but the lobstermen are increasingly repairing their traps rathehan buying new ones. that's in part becau the market for lobster in china plummeted when china slapped 25% retaliatory tariffs on american lobster. >> the reason we can't pass that coste along is we hreign competitors so we have to maintain the same price that they have to compete in the global market space. >> when steel tear i was went into effect march of 2014, steel prices nearly doubled. riverdale mills has absorbed nearly all of that cost. it has applied for exemptions from the tariffs, but of those granted, it only applies to roughly 3% of its steel purchases. in the meantime, to kp i profit margins steady and it
found cost efficiencies in other areas including itsork force by 5%. >> i understand the full and thatt policy has helped us.uay competitive stapoint. >> a tar t from china for retaliation and the u.s. manufacturers say navigating the globalrade war requires nerves of steel. for "nightly business report,"n sa brewer, north bridge, massachusetts. >> our next stop, washington, and diana olick. ♪ are you looking to remodel you might want to take another look at your budget because the costs are suddenly going up thanks to higher tariffs on chinese goods, from tile to countertop, laminates to lighting, all those fan finishings about 450he of t are on the list that just went from 10% tariffs to 25%. that represents a .5 billion
cost. >> at the end of the day every kitchen and bath rodel will increase. >> there is simply no way his business can absorb those costs and still survive. it's probably a 7%, 8% irease and the net increase to the consumer and i'd love to be able to eat some of that or, you h knowp with the consumer and not just pass it along, and at thnt i don't know how to engineer around that to use different products that aren't affected or anything like that. >> builders were already struggling with a labor shortage which also cost them more and that is also getting worse. nearly three out of four models this year reported higher costs for labor according to a new survey from the national association of homebuilders. higher costs for labor and materials have some consumers reconsidering their renovation. kate says the size of the averaget project w way down last year as consumers tried to cut the budgy. >> that'soncern for this
industry is because we will price ourselves out of the market. >> a real concern that hits home. for "nightly business report" am diana olick in washington. >> meanwhile, federal reserve official is weighing in on th impact of tariffs. atlanta fedresident said the central bank might have to cut interest rates if consume spending suffers which economists could new round of tariffs lasts long enough. most binesses haven't yet passed cost increases to consumers and there's a chance that that would have to change. >>he latest report on inflation showed that consumer prices rose in april once aga and the consumer-price index rose last moh lifted by rising gas price e rents and health care costs. over the past year, the index has increased roughly 2% which is right in line wh the fed' target right now. time to take a look at some of todas upgrades and downgrades and we begin with shares of ford
and they were upaded to buy from merrill lynch. the strong lineup of utility vehicles and truck, the price target $14 and shares rose more than $ 1.5% .38. unitedhealthcare was upgraded to buy from neutral at city. the analyst cls the sell-off in managed care stocks on fears that medicare for all overdone. price target $280. that stock gained% to 240.59. pinterest was initiated with a buy rating at nomur instinet in new coverage. the analyst calls pinterest the fastest growing of all of the companies that he covers right now. price target $34 and shares rose 1% to $29.05. still ahead, rocky road, uber went to wall street to start its next chapter and investor enthusiasm was not greet it. ♪ ♪
>> it was one of the most talked about ipos inears and today uber finally made its wall street debut. it was an offering that captured the attention t vestors on wall street as well as drivers and passengers on main street but when the rubber finally hit the road the enthusiasm just wasn't t the stock notched a rare first-day decline for such a high-profile ipo falling more than 7% to close bel its ipo price. irdre bo takes a look at what happened. >> it was the most talked about ipo of the year. the big wall street debut and it fell short of expectations.
>> at this price i reflected the environment and it is uncertain any time and any time there's uncertainty in the market and investors will be hesitant to get $8 billion of their there ares tour. >> the road to uber's initial o publicering was already bumpy and its shawler lyft has struggled in public markets as investor questioned the business model and wondered when, if ever, it would stop losing money uber losses was far larger and it's spending more on expansion and other businesses like foot delivery and trucking and tppt's ed before with amazon and other companies, but this is a lot o money and the question is where did they figure out. >> and uber's business model and their long-term issues that should give everyone pause and en crowe raise $8 billion on an ipo, by definitio you are swapping the market with supply. >> worsening trade tensions abetween the u.s. china
didn't help making investors less willing to taken an already risky. >> you're no better than the s&p, and there's a lot of discussion about tariffs and if you look at the broader market, this is a tough day and it mattmes on sen and there were ipos that have not traded as well as you would have liked over time. >> still, uber ceo shahi is looking ahead to the future and t just the first day of trading. >> we'll be measuring success in three to five to ten years. not just uber. the real test for the ride-sharing industry at large still t come. for "nightly business report" i'm deirdrebosa. with today's ipo, uber's market value is just below $70 billion. certainly enough to qualify it to join the 500 index.& poor's however, you won't find it there any time soon. mike santoli explains why. >> uber made its long-awaited public debut friday as one of
the 100 or so most highly valued in the stock market andt's not clear when or whether uber might find the way into the keywi ind the s&p 500 or into thes trillif dollars worth of funds that track it. at its initial valuation above $80 billion, uber is more than ten times to gaine entry, and they require that the member companies report four quarters of profit using standard accounting measures to be considered for membership. uber has never earned anl annua profit and analys don't expect it to in the next couple of years. uber is investing heavily to recruit drivers and sign up new customers while subsi zing the cost of rise. it's common for new ipos to wait years before joini the s&p 500. what's unusual in today'shearket isast size of the established tech companies that are coming public after years in business with billions in nu
re but no clear path to profitability. following's ub ipo, rework is planning to come public while ill deeply unprofitable as well. this will leave a fairly large amount of market value with disrupting the tech giant and not reflected in th market benchmark and not owned by low-cost mutual funds and etfs that have become by a large margin the most popular investor for retail investors. whether the action for the s&p 500 say good or bad thing for investors, it won't be clear until the market renders its verdict on the long- value of uber and its peers. for "nightly business report," i'm mike san tolly. >> marriott reports a sluggish start of the year and that's where we begin the market focus. the company reported weaker than expected revenue growth andtt marr described its business as stable thanks to additional fees and higher roomnd prices the company benefitted from a lower effective tax rate and
shares finished the day down almost 3 >> via com, lower operating expenses, it shifted distribution fees and the decline in the core television business, but investors edre encouragy efforts to find growth beyond traditional television in things like streaming. that stock was up 5% today to 34.70. equifax reported earnings matched wall street estimate, but revenue once again missed recasts and it also issued a thft second-quarter forecast, as well. credit reporting agency said that costs related to the 2017 date breach totaled $100 million to $19.40. it is split into two separate mpanies and one for its product division and the other will focusn property
licensing. the digital video recorders is set to complete the deal early thks ye next year, but investors are questioning the timeline. they sent it down to $7.56. that is a 20-year low. private equity firm sycamore partners has offered to take chico's ate, but so far the women's retailer has not responded. chic chico's ceo was terminated and there are serious issues with at business. sycamore's offer is to pay $3.50 share. chico shares were up almost 8% at $3.99. >> time for the wkly market monitor who has names of stocks that he says are immune to the ongoing trade issues in china and h and he says they're cheap, too, and the global asset management. >> ernesto, good to see you. welcome back. >> thank you, bill. nice to seeou >> even though they're not i
mub, and they are immune to tre issues with china, they do have their own issues and we start with pfizer, and a lot of the pharmaceutical companies right now are facing cost pressures and paten issues as well. why do you like this company? >> well,ze p in particular has a very strong product pipeline as well as the strong protection on their patent. so they're relatively in good or better shape than their competition and the fact that they trade at 14 times earnings is the main driver of our attraction. so we're looking for companies that hav a strong fundamental case for their growth and an attractialuation and that's the case with pfizer. >> all right. then there's city. everybody thought the financials would do well if the interest rates kept gng up and now the fed's on hold, so what about them? >> well, city is my top pick for tonight in the sense that it trades at aaltion of nine
times earnings under book value and since the financial crisis, city has embarked to a restructuring plan, investing in tech and has increased profitability very, very nicely, longerrefore, for the term investor, this is my top pick for the night because of those continued improvement and fundamentals, and the very attractively priced valuation. >> all right. finally, in the utilities area, exelon. they have nuclear issue, but here e done pretty wel even though there have been expectations of higher interest rates. >> well, utilities have been so overbought by investor so in love by investors that they've risen in valuation to very, very high levels and exelon is one of the exceptions. they're only trading a5 times which doesn't sound that bad or tcheap. howeve rest of the sector trades at 18 times and they are very defensive i m aket that
becomes more volatile as trade issues and other macro economic concerns that dominate the headlines. this is atock that would d very, very well. >> all right. ernesto, again, good to see you. ernesto ramos withlobal asset management. >> thank you, bill. >> coming up, the final frontier,zo a style. ♪ ♪ ♪ ♪ here's what we're watching for next week. monday starts infrastructure
week around the country and there will ben focuses how to fund needed improvements here and there. on wednday,ow component cisco reports its earnings and thursday walmart releases its quarterly results and investors will have the impact of takiffs and l at the growth and that's when we're watching for next week. the securities and exchange commission has improved a new silicon valley stock exchange. this exchange is backed by a number of te prrp who hope that the move will give om technologynies more options to lift their shares outside the traditional e changes like the new york stock exchange and the nasdaq and by the way, this will be t country's 14th stock exchang >> finally tonight, the talk may have been about trade and uber, but jeff bezos also made a big statement, not related to amazon, but to his vision of space a exploration the aggressive time line may sound like he's taking a page from
amazon's pagek. boo morgan brennan has our story tonight. >> amazon ceo jeff bezos unveiling blue moon. the lunar lander has been developing for years. at an invite-only event in d.c., the world's richest man taking his lunar ambitions public saying the lander could be ud to meet nasa's new ambitious deadline of getting a oricans bathe moon in just five years. >> i love this. it's the right thing to do, and for those of you doing the arithmetict home, that's 2024, and we can help meet that time line, but only because wete st three years ago. it's time to go back to the moon this time to stay. s>> in what perhaps his most sweeping comments to date on his interplanetary vision, bezos is betting on a future in which earth is used for habitation and
light industrial use and space for heavy industry like mining and manufacturing. anhe also believes at some point we can have cell-sustaining orbiting colonies, but that will come later, right now bezos sees the current task at makin space less expensive and more accessible. a study that starts with ockets.e we have to use the resources of space. we must have a future for our grandchildren and their granhildren and it'shis generation's job to build that road to space so that the future generations can unleashheir creativity. when that is psible you will see amazing things happen. >> bezos has been sellingio a bi dollar worth of stock to fund blue origin and he's making ear he's not as interested in mars unlike elon musk and spacex. rather, he's betting big on
space for for "nightly business report," i'm morgan brennan. >> and to read more about jef bezos' space vision head over to our web nite at nbr.com. a look at the crazy day on wall street and the dow up 114 point after having been down 350. the s&p was up 10 and despi day's gains and the nasdaq and the s&p this week suffered their biggest weekly declines of the year. >> that is "nightly business report" f tonight. i'm bill griffith. thanks so much for watching us, have a gre weekend. happy mother's day. we'll see you monday. ♪ ♪