tv Nightly Business Report PBS May 21, 2019 5:00pm-5:31pm PDT
the commerce departmen eased restrictions against china'sia telecom huawei. the reprieve from trade penalties helped ease tensions.s between the and china, and investors seized on that positive news. the dow jones industrial average advanced 197 points to 25,877. the nasdaq was up 83 and the s&p 500 added 24. as one strategist put it, the easing of restrictions on huawei is a ray of hope that the worst-case scenario will be avoided. eunice yun has beijing.n fro ♪ ♪ the u.s. commerce departmt is ordering a 90-day reprieve for huawei after it put t chinese company on an export blacklist that could threaten huawei's sur mval. the allows huawei to maintain its current networks and software updates including google. had suspended some of its business with huawei, but huawei's founder told media today his company is in tal h
wi to deal with the band. saying his team was already prepared for any disruption from the supply chain so the reprieve wouldn't mean much. half of it is shipped from the united states and it could also make its own. h ad deded that the, he warned t should not fannalist sentiment. anti-american rhetoric continued to rise in china. th state broadcaster has aired a tv show about a chinese family that moved to los angeles was yanked from programming and the game of thrones finale still hasn't aired here. at first ten cent the company ring the show said there was a transmission problem and then hbo plamed a trablamed the tra k beijing. i'm eunice yun in beijing. >> the trade war say bigr risk
e economy. boston said president eric rosengren said the tariffs can increase pressure on the u.s. economy and i could take some time to be resolved and for that reason, he s policymakers should remain patient until t certainty between the two largest economies resolves itself. >> one prominent manufacturer of baby products is hopingt is short lived because his business depends on it. ylan imui in piscataway, new jersey. >> think about everything that goes into a baby registry. a crib, a stroller, a high chair and mayben a baby walker. there's a big chance bhey're made delta children. the country's largest manufacturer of baby furniture and gear. right now it's in a trade tug-of-war >> in my showroom here everything that i sell can be affected and it is a -- beyond the huge issue. >> nearly allf its products
are made in china and shipped to the u.s. to warehouses like this one and these gliders just arrived and they're being packed into a container for delivery by amazon and straight to the consumer andel has walmart to pottery barn. 90% of the cribs from target come from delta. >> when president trump rattled the industry with 10% tariffs on cribs and baby furniture, raising prices just 3% to 4%. those tariffs are going up to 25% and if president trump maked n his threats, the rest of their products could get hit, too. > moving production out of china is not that easy because of the safety involved in it. we he a whole infrastructure of test facilities set up in china making sure that these crips are safe not just for the first, but for the second and third child. >> that means tough choices for everyone and delta has to raise prices. retailes are cancelingrds
and parents have to decide is it worth it? >> i don't know how a mom living on 50%, 60, $70,000 a year can afford it. th delta says america needs a time out fro trade war. for "nightly business report," i'm y lan mui from piscataway, new jersey. >> the key spring selling season. to ly werned sales of existing homes and the bulk of properties on the market fell ii declining for the second straight month. this comes despite a pullback ir mortgaes as well as an increase in the supply of homes for sale which had been a major headache for their industry. diana olick has more. >> there we plenty of shoppers out looking for homes this spring, but apparently not t many buyers, at least not as many as last year. home sales in april fell more than 4% dcompared with a year
ago. the expectation was that mortgage rates wouldelp and it plummeted in march when the buyers would have signed the contract for those closings. >> the fundamentals for higher home sales are improving and certainly job creation, and low in additional inventory coming on to the market and more choices for consumers, but it takes time for the consumers to actually sign contracts and close the deals. >> prices are still rising, but the gains are shrinking. in the northeast, prices are up annually. still realtors say today's sellers have to get more realistic on pricing if they want to moveheir homes quickly. >> on the upper end market they need to be -- theelrs need to be very cautious about how they price their homes, otherwise they will nct att buyers. >> sales continue to be weakest at the very lownd theery high end of the market and for very different reaso at the low end it's for sale and at the highend it's because there ist a gd prices need
to reflect that. for nightly business report, i'm diana olick. >> it's seen as a barometer for the housing market because if people feel good on the housing rket they oftenpend on their homes. the home improvement retailer nt mixed messages. earnings and revenue were both better than expected and its outloo was disappointing and courtney reagan digs into home depot's results. >> home depot's first quarter u came short due largely to a wet and cold start to spring and a sharp dropce in the p of lumber. february was the second wettest on recordn the u.s. and that kept shoppers home. spring is a selling season for home improvement retails and why theyold spring black friday event, but if it's rainy, consumer are doing tdoor home improvement projects for project supplies. >> my team and i watched as weather is turning more springlike a markets across the country sales in the category are picking up. i suspect with home depot that will imply a strong second
quarter. home depot executive said big ticket item, those $1,000 or more is coming back as the weather improves and pressionals like contractors and plumbers do a lot of big-ticket buying and the pros ha backlog of business to catch up on, but even if the weather turns, the other big wild card for home depot is th ice of lumber which has fallen dramatically over the past yeare uring quarter, home depot sold more lumber, but at half he price of last year and according to cfo carol tomay that can turn into an $800 million per year. because it's a project starter it's the first item a consumer wi buy, s when the price of lumber fluctuates it can have a meaningful impact on otherof pas he business. the good news for investors is home depot seas a hathsy housing environment and while it's not incorporated into guidance the company does a plan to
manage it for shoppers or insiders. for "nightly business report," the economit first american financial. welcome. nice to haveou with us. good to be here. >> the market did soften in april and the month before, but you see a silver lining and see things improving, why? our outlook for 2019 i lgely the same despite softening april numbers and we see the market purchasing power benefiting from the tailwinds from the mortgage rates and the strengthening labor market with no signs of slowing down, and on top of that atyou have the price appren which is helping on the affordability side. you also track something called ten-year length, which is the amount of time that a homeowner spends in the homet and reached 11 years, a 9% increase compared with a year ago. why is that? is that a fundamental shift? >> so what we see is the further
recession average tenure as approximatelia five years, but as homeowners were walking into 3%, 3.5% mortgages they're feeling rate locked in despite the fact that mortgages arefl ting with 8%. so as mortgage rates continue to decline, we should see a loosening of the rate lock-in effect and having that tenure start to decline a little b. as one who had her first mortgage at 16% waback when, 3% and 4% sounds good and what about the trade situation tigt's going now? could that have a dampening effect on demand? absolutely, the trade effect, there could be two sides to it and obviously, it could have an impact on mortgage rates and it could e a positive on housing market and on the flip side of that there's the implication that about a 25% tariff would hit the nstructi construction industry by 2.5 billion in taxes.
obviously another adnd to the construction industry. >> we did hear in the past two months that the elimination of state and local tax deductions in some of the high-tech states really dampened sales. has that evened out at all?e >>aven't seen the impact of the tax change on the national scale nor thetatecale. in fact, you have to get down to very specific microgeographies and high-cost markets to see any impact on sales and home prices. >> well that's a little bit of good news. if mortgage rates decline a litt bit further, might that juice the home market a littl bit more and also get people to lift those m houses ate reasonable prices? >> absolutely. that's what we're waiting for. mortgage rates continue to paul and it will push them into ago the home and it will prop the affordability for the first-time home buyer. a,>> thank you so much with good american financial. >> it is time to take a look at
some of today's upgrades and downgrades. >> it was downgraded at bernstein. the price target is $33. the stock ros about 1% to $24.30. trip adviser was graded to buy from hold at needham. the comny cites thecompany's return to modest user growth in the first quarter and the price target was 63nd the stock rose .5% to $45.74. a different kind of call on tesla. morgan stanley cut itsear case valuation of that stock to $10 from $97.es the analyst c tesla's debt load, exposure to china and certainty around the company more generally. his base case price target is $230. hares fell a fraction to 205.08. still ahead, drone delivery is put to the test. ♪ i'm jane wells in re,
nevada. drone deliveries to your home in an urban area? what better place than the biggest little city ithe world test that out? we'll have that coming up. ♪ ♪ ♪ ♪ >> a new york juryays johnson & johnson must pay $25 million to a woman when claims she got cancer byof using somhe company's products. the woman alleges that her cancer was linked to produons thatined talc. the $25 million is for comp the jury will meet next week to consider punitive damages.
egalj says there were errors at trial and then it's confident there will be a reversal on appeal. the postal service is testing its firstlong-haul, self-driving delivery truck. two-week pilot w programl move mail between distribution centers between phoenix and dallas and a safety engineer and a driver in the cab will monitor its performance and take troll if there are issues and the postal service says it hopes the hnnew togy can increase efficiency and savin >> from driverless trucks to drones and many see time when they would dlir code, roid searche and res or carry commuters and nasa is i to change that own the upo if the you are of drones is delivering goods for people, most of that will be done beyond the a drone pilot's line of
sight. n nasa is keeping potentially hundreds of thousands of commercial drones safe from each other and from you. >> we're testing out of the various particular teches that tested outbeen before from collision avoidance obstacle and avoidance a onmote identification and jane, we're doing bey the visual line of sight. >> for testing, nasa has chosen nreno,ada. the biggest little city in the world and you were primarily gaming, and we believe that drone policy to be at is pretty incredible. the city of reno is so committed to this project, it's actually shuttingdsown roa downtown in the middle of the week so the conducted.e the challenges include what to do when communications are lost or if it gets too windy and battery power is a huge issue, but a there's also challenge on the ground. the big challenge ends up being social yagz and public acceptance, and locals are
cures. >> in today's world, especially there when i'm enjoying a glass of wine at e of my day, that's a little a with many more drones than airplanes predicted, instead ofiv gg a drone clearance nasa has created appear to peer awareness system telling a drone in essence, not here it can be, but where it cannot. >> this is what you are authorized to do. it says this is what you shouldn't do. everything else you can operate by yourself. edso we chang the paraangm. >> goldmachs estimates the business of managing drone traffic will b b$1 million 2025. companies like amazon and google are working with nasa andth lat summer, nasa will hand over its final decisions to the faa which will create rules of the road for a highway a few hundred
feet overhead. for "nightly business report" jane wells, reno, nevada. >> sales at kohl's got crunched and that's where we begin tonight's market focus. the retailer missed wall street also cut stimates a its full-year profit forecast. the company blamed promotions and a rise in shipping costs and hopes its nationwide rollout will help return sales and shares tumbled today more than 12% to $55.15. j.c. penney reported a bigger les decline and a wider than expected loss in the most recent quarter. the ceo says the retailer has made solid progress, but that there's no silver bullet a the company's turnaround will take time. the small-cap stock dro ed nearly 7% to $1.07, but it was a different storat tjx companies ich posted better than expected earnings and boosted its full year profit forecast. the parent company of tj maxx,
marshall and home goods saw solid alsame-store and an increase on customer traffic. it was up a fraction to finish at $53.26. late today thete repsales that were weaker than expected and it cut its full-yearhe forecast and retailer plamed softer trends and execution issues related to i loyalty program. that sent the stock lower in initial after-hours trading after rising 1% in the regular session. street's topped wal earnings and revenue estimates and the ceo says industry fundamentals remain strong and thecompany's market share sum proving and the company revved hire more than 5.5% to finish at $1,032.25. pp industry says that ppg keeping the company intact is not the right strategy. from an activist investor that id a split would accelerate sales and profit growth and the stock was up more than 1% to 109
even. and merck will buy the cancerma drr peleton therapeutics for $1 billion. peleton wasreparing to go public and this deal helps bolster i portfolio of cancer treatments. shares are up to $79.50. if yly were planning tohis summer get ready for a lot of company. an induptry trade g photocopies this to be a record travel season and it comes despite the 737 max plane and phil lebeau joins us from chicago and good to see yous always, phil. how many people are we talking about here? an estimated $257 million and that's between june 1st and the end of august and basically you're looking at between memorial day and labor day. it's going to be 4% more crowded overall in compared to last year and the good news is that the airlines are adding more flights specially on the busiest
routes, so it's not like we're all going to be squeezed into smaller spaces and elbow to elbow like it's christmas time, but it will beit a little more crowded. >> but airfares are low compared to what they have been recently. why is>>hat? well, you've got more competition, specially on the low end from spirit and the low-cost carriers, they continue to expand and as they put pressure on the establishedary lines to come up with basic fare, you see more poem that maybe they're united and from hilton head, south carolina to minneolis and they get a bake fare. that's what we're seeing more of pressuring fares under and overall, you have a strong economy, sue and a lot of people who said, you know i'm going to take a trip this summer. >> what about the grounding of the 737 max planes and how is that going to impacthe airlines and the availability of flight? what kind of impact if any, will we see? >> fewer planes for southwest,
american and united. ose are the ones that have 737 maxes that have been grounded, but it's not a huge amount and we're talking about a low percentage of their overall fleets. what's an airline like southwest going to do? they'll meet demand on the busiest routes and does that theirhey might pare back service on some of the less popular routes? that's a possibility and you might see fares go up little bit there, but we're not talking about a huge spike in prices and that's how the airline especially united, american and southwest they're going to adjust to the situation unless they get the max back which they hope might happen by the end of august. >> that was going to be my xt question, but you anticipated it beautifully as always. thanks, phil. >> thanks, sue. >> phil lebeau. the quest to build a home that can stare down a hurricane. ♪ ♪
here's a look at what to watch for tomorrow. the meetings will be released giving the fed inshts into the bank's thinking on the direction of interest rates. amazon hostser its shareho meeting which will include voting on proposals related to the use of facialog rtion software. president trump is expected to meet with democratic leaders to astructure and that's what to watch for on wednesday. >>re a is the first named storm of the 2019 atlantic as . it is the fifth year in a row that a system has been named before the season officlly begins on june 1st, and as you know, recent storms in the u.s.
brought record destruction. that has some lookthg to fortify r homes against the next storm. diana olick is back tonight with another installment of her series on the rising risks to ate. e ♪ ♪ the destruction from 5 category hurricane michael was breathtaking, but this one image had homeowners and builders alike in awe. one home left relatively unscathed on florida's mexico beach. total devastation for miles in every direction. >> russell king built this two-story house a few years ago with hurricaneinds notust in mind, but in every aspect of the design. it hs 12 feet above the ground and it's anchored 28 feet into the ground. >> i'd like a better chance of finding the storm. >> now seven monthslater, king says it is not enough. >> the storm, in my opinion, from what i see getting stronger. >> he learned from michael and is upgrading his home yet again.
>> all of this was a newnd it wasn't there and all of that is new and that happened last month and all of these light fixtures are all going ay. every one of them and they're to make way to put in something else probablyer p where we don't have concrete that will shift against these columns. >> king is fortifying the house well beyond any current building code. his next-door neighbor built to the highest local code two years ago, but the home ss a total lo. new mandatory building codes adopted after hurricane andrew have improved hurricane resistance in orida's new constiuction. naonally be the insurance institute for business and home safety created a hurricane-fortified standard a decade ago, meant as a guideline for builders and owners, but so far only 8,000omes have that d designation. those that do have 7% more according t a university of alabama study. >> the technology to fortify homes have advanced dramatically, but the demand for
it hasn't, and that may be becauseer homeo mistakenly believe that it's wildly expensive. asi wouldn't describe it cost prohibitive. we actually focus low to moderate iome homeowners and this is built balancingfelong with . >> lance redick is the local executive director with habitat fo humanity which has built 81 homes in the panama city are habitat builds beyond the latest hurricane codes and can do that even o the lowest priced homes. >> we have this rod here so then you don't need toal theoret have these other connectors. oof does add an incremental cost to the home. the rest when i'm talking about is almostbl negli and almost ,0 on a $75,000 four-bedroom house. >> there are categories of hurricane strength. the latest habitat homes fared better than their neighbors in hurricane michael, but russell king isn't te anything
chances. >> it's $100,000ev >> do you be that there's such a thing as a hurricane-proof house? >> no. no. >> for "nightly business report" i'm dianack in panama city, florida. >> before we go, here's a looki at the numbers on wall street today. the dow advanced 197 points 25,877. the nasdaq was up 83 and the s&p 500 added 24. and tt is "nightly business report" for tonight. i'm sue herera. thankor joining us. have a great evening and we'll see you tomorrow. ♪ ♪