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tv   Nightly Business Report  PBS  May 14, 2019 5:00pm-5:31pm PDT

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♪ ushis is "nightly biness report" with bill griffith d sue herera ♪ ♪ stocks bounce back. the market rally was strong and it was broad. even as the trade deal between the u.s. and china remains elusive. to cut or n to cut. that is the question many are asking the fed, but the answer is rky. >>one-two punch, the trade war could raise the price of t smartphones at a time when the industry is grappling with flowing sales. those stories and more tonight on "nightly business report" for tuesday, mayd 14th. do bid you a good evening, everybody, and welcome. on wall street it' called turnaround tuesday. stocks rebounded today after yesterday's route regaining a portion of the sharp loss as we
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saw it on monday's session. the reason is a familiar one, trade. the president today signalled that the u.s. a chi could strike a deal when the time is right. that seemed to alleviae some of oncern among investors, for now, at least and it sent stocks higher the dow gained about 207 points, closed at 25,532 and the nasdaq was up 87 and the s&p added 22. bob pisani has more on the bounceback from the new york stock exchange. the markets managed to stage an impressive comeback today although it's not enough to mak up formonday's steep losses. president donald trump breathed new life back in the stock after saying that talks with china have not collapsed. the dialogue has been positive and he's expecting a successfuln outcomebout three or four weeks as negotiations continue. well, it doesn't seem like a for the markets to go on, but we did see a number of heavily oversold groups bounce back today and the semiconductor stocks like nvidia and kla tencor and the industrial caterpillar, boeing, deere and
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energy names and some of the small cap chinese tech companies like alibaba all bounceback and crude oilrices handed the rally and settling over $6 barrel as saudi arabia's energy minister repaired a grow attack at oil pumps stations near riyadh, but don't be fooled. there's been a lot of damage he done by trade wars and the industrials did rebound and names like boeing an caterpillar, 3m and even apple, there's still 20% or even more off of the recent 52-week high. intel is not far from its lows that it hit back in december. retailers are still getting hammered on its exposure to china. more than 30% of apparel, 70%f footwear in the u.s. is imported from china, and companies that ve private brands in particular tend to rely heavily on these chinese imports and that's why you see companies that have private brands, gap, american eagle and l brande
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theyll down 10% so far this month. for "nightly business i'm bob pisani at the new york stock exchange. so with the pickup i volatility, what should the individual investor be doing toen they see this kind of behavior in the market? we are joined tonight by j.j. callahan, market strategist at t.d. ameritrade and always good to have you with us, j.j. >> thank you. >> you say take a longer term view and go back to the basics that actually move this market, right? think one ly, and i of the first things, you know, investors so often, su have a price in mind, but they don't actually have an timeframe mind and the longer your timeframe, the more you can say that this is interesting noise, but noise and actually things like this, no matter what type of investor or trader y are, they have something for you. for someone who is more short term, the's a lot of intraday movement you certainly can take wvantage of it. if you're someo has a longer timeframe, you can use this as a buyin opportunity, if
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you why want or as you said, it's back to basics a we're ill ending earnings season right now as we have the retails coming out and truly, longer term earnings are what's going to move stocks. so look at the earnings of your company that you're buying and more importantly, what are the future prosents for them and now trade is something you may have to consider in your future prospects and it's not the oy thing you should be focusing on and the last thing h ye to add to everybody, and maybe think about a partial, get yourself to where you're making a more d rationalision stoo what about the impact of tariffs on those earnings especially if the tariffs are going to be with us for a while and we're going to start hearing from the instries most impacted by those tariffs and they'llav to ratchet down expectations,
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don't you think? >> i think if you look at the action of the last few days w rt itlly was a repricing of expectations on and if you look at some of the other indicators that your viewers look at particularly bond xs fixed income goals that to a lesser extent volatility index and those three didn't have crazy moves. it wasn'tike people are panicking and it's more of a goinging of stocks that's on right now and bob did a big hit at the top of the show and if you lookt the apples and the 3ms that are theoretically most impacted by this and they'll have tse stocks is over the next few weeks and everybody will try to figure this out and we're not used to seeing the sausage being made, if you will and the negotiations taking place right in front of us and so because of that, every piece of tia negon is adding some volatility. certainly is. j.j., thank you so much.
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th td ameritrade. tariffsmplementation of and the threat of more has federal reserve officials trying to figure out what the impact will be on o economy. as steve liesman reports now the answer is not clear cut. >> well, the federal reserve cut interest rates to herop up the economy if the trade war weakens growth. not so fast. the trouble is the fed isn't sure how tariffs will affect the economy and it doesn't really know how to respond. >> the tariffs are inflationary and on a transitory basis. they tend to raise prices and we think the latest round of tariffs will probably add a couple tenths to ilation and you tend to see some deflationary effects from lower growth. >> the fell has to figure out will it filter into the economy and raise inflation requiring higher interest rates or the weaker growth possibliy kry cre by the tariffs requiring a rate cut. the fed's answer, we don't know
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and we'll just have to wait to find out. the president, however, doesn't want the fed to wait at all. he said in a tweet today china willin be pumoney into their system and probably reducing interest rates as always? order to me up for the business they are and will be edsing. if theal reserve ever did a match, it would be game over, we win and traders who bet on the fed funds rate think they know the answer, too and the january contract is an 87% probabutity that the fed rates by then and that looks to be way ahead of where fed officials are right now and he said, quote, over the medium term, i see the biggest risk coming fromrade policy, uncertainty and slower growth. right now the data are noisy and we need more time and evidence to judge whether the risks materialize. there's good reason for the fed to be confused been the u.s. economy hasn't faced this level of trade barriers since the 1930s. the only true answer for the fed, no one knows how tariffs
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will affect the onomy, but it appears we're going to find out. for "nightly business report," i'm steve liesman. there has been a renaissance along the west coast, and the trade war with china may be slowing demand in a key market. our elon mui has the ory. >> the united states is the biggest exporter of liquefied natural gas in the world. most of it is shipped out fromr als in louisiana and texas. that's drivingn investment boom along the gulf coast. the $10 billion in parish today, a backdro foramerica's energy dominance. >> you are not only making a nation wealthier, but you are making america sger by build the future of american energy independence. we are independent. we don't need>> anybody. he timing is a little awkward. coming jt oneay after china being. >>ed up tariffs on unlng from
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20% to 25% and the latest salvo in whats now a full-fledged trade war. >> and we don't need to be ripped offy the rest of the world either because those days are over. >> china is one of the most important markets for lng and it has 10% of lngrt exand that is growing faster than anywhere else in the world and analysts say the tariffs are already slowing down u.s. shipments and we counted 26t vessels t left the u.s. for china last year and 17 of them left in the first half of the yr and only nine tankers left in the second half and the first two months of this year, only two vessels were bound for china. the higher tariff rate will take fect in june and the consequences could be felt long after this. two lng are ionruction and four additional projects have been approved for the grown light regulators. 50 million is at stake.
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>> the momentum is probably projects continue the but the risk is that those that have any sort of stop points or the ability to push it out could wait to see some of the volatility o concern about the tariffs subside. >> i'm elon muy in washington. >> it is time to take a lookt the upgrades and doasgrades. cokeowngraded to equal weights. the company'growth prospects are not reflected in the current valuation. the price target is $55. the stock rose more than 5% to $48.69. tyson foods was upgraded to outperform from neutral at credit suisse and it cites the higher beef, a pork prices. the stock rose 2.5% to $81.57. capital one was upgraded t buy to hold from jefferies with the analyst expecting that stock to
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benefit froimproving efficiencies. the price15 target now the stock gained about 2% tod to $89.26 and valero was upgraded overweight to neutral j.p. morgan. the analyst expects the stock to outperform the rest of there ning sector. the price target $105 and the stock rose 3% to $82.96. still ahead, the biggest challenge facing main street small business ♪ ♪ boeing reported a drop in
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deliveries in april. the compa handed over 24% fewer planes in the first four months othe year when compared to 2018. the reported decline was not surprising. the grounding of its popular 737 max aircraft halted deliveries for a second month. much like boeing, apple finds itself caught in the middle of the trade war with china. tariffs are costingpa the comny and just how big those costs could grow. john fort has the pdetails. >>ntil now the risk was for apple's actual sales in china where th trade battle was taking a toll on consumer appetite for high-priced iphone, president trump is threaten to pose a $25% tariff on an additional $3,000 worthf goods coming into china including iphone, ipads, macs and the bulk of apple's hardware and that'shat the tax apple would have to pay.
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apple would have to raise the price of an iphone to 14% to pass along that cost tos. custom that would be an additional $164 and changfor $1,099 iphone 10x, for emple. would apple have to hike prices and maybe not across the board and apple shifts iphone pricing and can adjust prices for different storage options of n different scrypes. so it could hide a price hike somewhat and apple could also absorb it if apple chooses that route and jpm estimates that new tariffs would cs appl earnings per share by 14% in the worst-case scenario. for "nightly business report," i'm john fort. a so how these tariffs likely to impact the iphone market going forward? ian cher, executived tore of cnet. welcome back. >> hi, how are you doing? >> if you are tim cook, what are you going to do? he's loweredrices for iphones
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in china because of lower demand over there and now that gariffs arng up, prices, are they going to have to go up or will they have to eat that increase. what do you think? >> it is unclear and i think it's going to be interesting to see and we're talking about a lot of mey that comes from a 25% increase in the tariff. at some point, some of that has to be passed on to consumers in o eory, but it's going to be really interestinge how apple navigates it. i imagine if the prices do go u we're going to hear a lot of belly aching fromilicon valley in conference calls after quarterly earnings and what not before they ever show us a price tag. >> what about the fact that people seem to beanging on to their phones a little bit longer either because they're waiting for the newest upgrade or because the smartphones a pretty good right now anyway and they don't necessarily need an upgrade. you couple that with tariffs and it really mightave a big dent on the bottom line for apple.
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>> yeah. i mean, i think the larger things going on here are definitely that the smartphone market is slowing down growth. i believe, 2018, according to some analysts, was the first year so far when we actually saw a decline in sales and it' something that is definitely in the -- in the overa t issuet they are facing. apple generally has been able to suck up most of the profits in the smartphone a industry if anyone is particularly protected about that it would be apple and think about the companies that didn't clear a profit they'll be really fuelling it from this. >> are you surprised the magnitude of th increase and the tariffs and the impt it will have on silicon there's been tension between washington and silicon valley and are they going to punish the chinese in this regard with the tariffs, do yoit think? >>ut question, adding a tariff to technology which is
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one of the largest ecomic drivers in california and throughout the country, it'sy certaiaying something, right? but there's also the larger thing which is thatat thees between silicon valley and washington, d.c., have mostly been philosophical. they've been about stuff like the supposed censorship of conservative voices and all of those types of other thing, right? how russian interference came out and allf these thing that have gone on between facebook, google and twitter and washington, d.c., when this comes to philosophical ideas. these are things that people are buying at christmas and putting into trees. that's a whole consumer, and it's about suddenly paying more for what they want whether anyone will be able to weather that storm. >> aren't we all ia share from cnetning us tonight. >> thank you. disney gains control of hulu
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and that's where w begin tonight's market focus. disney and comcast have struck deal where disney is tau are taking full operational control over the streamingerce. comcast will lines content to hulu until 2024, but as soon as next year, comcast will soon be able to put some of that content on its own streaming service. within five years, disney will buy comcast's stake in hulu for at least $5.8 million and the shares were up 1.5% and comcast is the parent of nbc uprversal whicuces this program. >> ralph lauren profit topped wall street estimates and the retailer saw a decline in north american sales and the company behind polo and strap hiked its quarterly dividend 4% and it ipped to 113.95. facebook could be subject to up to two decadf oversight as part of an agreement with the u.s. government.er re says the deal would
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resolve an investigation intooc whether thel media company inappropriately shared information and data of $87mi ion back in 2011. the settlement was down today andhe today stock was down a fraction. and e merger between cvs etna now has a start date and that would be june 3rd and the merger, a you know, it closed in november, but it does need court approval. cvs fell to $52.97. after the bell, cannabis company tilray said revue nearly tripled while its quarterly loss increasend the revenue was driven in part by the legalization in canada for adult use, but costs for the company increased as tilray ramped up investments and acquired a hemp-based food maker. the stock rose in initial after hours trading tonight and it finished the second to 48.74.
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>> the survey from the federation of the business closed at a four-month high and it rains the tight labor market and the inability to find qualified workers. kate rogers has more. ♪ ♪ adam rammel is gearingp r an expansion. the owner of the team, a craft beer barn in ohio hosted double his current staff of 25 workers come december when he opens a new casering business and a tight order in a historically aght labor market as our manufacturers are growing and increasing their wages it's making our job even harder to recruit and retain new and talentedstaff. >> while workers are paid move minimum wage. >> offering it isn't feasible nd he's considering the health
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and wellness space to bring new workers to the area to work at his restaurant group.e' >> w trying to get out ahead of this and other business owners are searching for a particular skill set and also a challenge with a limited supply of worke and the owner of vivian's gourmet outside of denver, colorado, said she'd be able to increase her sales if she could find an additional two workers. >> one of the challenges that we have is wooe sich a specialized business andy soing that we do a lot of custom cakes or specialta ng. we have a hard time finding folks to jump in and do the tj. >> f past 16 months the quality of available labor has ranked the single most important issue according to data from the national federation of business. what's more that businesses are lowering requirements for both skilled and ilunskd positions as workers are inkrooisingly
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hard to come by, the he has owned previsio and welding in northeast ohio. he said manufacturing competition in the areas fierce and he does his best to hang on to the workers that he has. >> much of our equipment isia spzed and we've custom developed it for our own needs who f we learned someo learned those skills we must start all over with someone who replaces them. >> a major challenge in one of the tightest labor markets on record. for "nightly businessreport," i'm kate rogers. >> we have a passing to tell you about from the world of finance and ecomic, a true pioneer of public policy in washington died. she was the first woman to serve as budget director and she was the foundingr direc of the congressional budget office. miss rivlin, as you may spent three years as vice chair of the federal reserve, the second most powerful position at the central ban ice rivlin was 88 years old. ♪
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♪ ♪ walmart is rolling out one-day delivery taking aim at rival amazon and the retailer will begin offering the service in phoenix and las vegas with plans to reach 75% of the u.s. by the end o this year. just last month amazon said it was making freesa -day chipping business. >> infrastructure of the
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american economy allowings, go services and people to where they need to get to which i why on this infrastructure week we're taking a look at nation's roads d bridges and the pressing need for a more modern system. frank holland is in columbus ♪ ♪ >> our roads getting a d in the most recent report card of america's infrastructure. the primary reasons, con skwegz and structural deficiency. >> o net boshlg, in some ways, our economy and making it less e fikt. the estated impa by 2025 more than their 2.3 trillion in business sales lost. more than 3.2 trillion in lost gdp and more than one million lost jobs. it becomes tinability of the economy to grow at the rate at 'sich it should grow. the nation bridges getting a c-plus from the american society of civil engineers and its ilure to act report. that study also estimating there will be a funding gap of more
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than $1 trillion by 2025, half the money needed to fix our roads and bridges and taxpayers will likely pay for problems one way or t another. motorists on average in this countrye spend on aver $600 a year in additional maintenance on their cars just because of the poor road conditions. >> driverless cars are expecte in coming years. ere outside of columbus, they are pea, and that can kkt with the carsth if eed r end of the freeway, is the i noticed there was an attone over there. >> they send and receive data fromehicles. >>ultimately, our goal is to eliminate the serious crashes at these intersections.
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20% of all our fatales in ohio occur at these intersections an this technology has the ability to eliminate them. not reduce and e liliminate onc the vehicles and signals are outfitted with the technology. >> fatal crashes reduced by 7% over the past five years the cos of the economy of those fatalities and crashes is billions and billions ofrs dolla and that's something we also can s through improving our infrastructure. >> the cost for families, even greater. for rt"nightly business re frank holland in columbus, ohio. finally tonigh theworld's most valuable brand and the anking giant fromwp puts amazon in the top spot. in fa, its brand value has more than doubled in the past year to more than $316 billion thanks to entertainment and small stores gee and the next
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wassaly banna, and and it'keck the retailing and mcdonald's rounds out the top the dow advanced 207 points and 25,532 and the nasdaq was up 87 and the s&p 50 added 22. >> and that is "nightly business report" for i'm sue herera. thanks for joining us. >> i'm bill griffith. have a great evening. we'll ♪e you tomorrow. ♪
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announcer: this is "bbc worldca news ame >> funding of this presentations is made le by -- the freeman foundation. and judy and peter blum kovler foundation, pursuing solutionss for america'glected needs.be >> wow, thatlievable. ♪ i'm flying!
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