tv Nightly Business Report PBS July 3, 2019 5:00pm-5:31pm PDT
♪ this is "nightly business report." record run all three major indexes enter uncharted waters with all reaching new milestones and closing at all-te highs. labor trouble. a private report shows a drop in hiring lastonth. is that a bad sign for friday's jobs report and the economy as a whole? and, end of the era. the firs a celebrity ceo business titan who transformed theuto industry. the legacy of lee iacocca. tomorrow may be the fourth of july but there were plenty oi
works. all three indexes closing at record numbers. the dow rose 176 points to 26,966. the nasdaq climbed 61 and the aip 500 added 22. the third st record close. see seema modi has more. >> reporter: the markets are still going full steam. the s&p 500 managed to close up record highs for the third day in a row. t and dow dodging itself first record close since october. tech and consumer discretionary thoughts continue to be the year's best gainers. deals are hovering near three-year lows andness that boosting real estate, utilities, and consumer staples. what is powering the rally? the trade tensions and interest rate cut this month. the market is geari up for a big rate cut and the federal reserve will react to a slew of
weaker economic data. now beyd the headlines, market internals are still looking strong. a thoughts near new highs and more stocks are advancing every day than are declining. as long as it holds off, t rally may not be derailed any time soon. thnew highs of the s&p 500 is considered a positive sign. rnings estimates are fla for the second quarter and about 2% high for the year. it's hard to justify the higher stock market multiples when there's little growth expected. friday job's report will no doubt be key to watch. i'meema modi. shares ofc seman took off word after broad com is in talks to buy the cybersecurity software maker. symantec had a 52 week high. w broad com share down more than 3%. it's not the first time broad
com hasdo gon the acquisition trail. some say it's part of the ceo's play book. josh lipton takes a look. >> this has broad com ceo'sdo . deals. he could be ready to make another big one. epbcts that broad com is in talks to acquire symantec, which makes cybersecurity software for both the enterprise and consumer. the two sides have been targeting a mid july anuncement, though the price is not set. so no guarantee a dea does get done. but the ft report said the transaction could be worth more than $15 billion. this is the play book buying compgies and buildin out a portfolio of products. urr example, acquiring for $6 billion for exp to the high margin storage market, and buying ca technologies for $19 billion. capitalizing on its profitable mainframe business.
cnbc talked about his acquisition strategy. >> we're very good at creating, building sustainable businesses and innovation businesses we acquire. >> it doesn't always work out. the trump administration blocked qualcomm from pursuing last year citing national security concerns. analysts say this deal makes a strategic sense. though they acknowledge that br id comestors could have questions as well. after all, hot tan is pivoted. a traditional chip marker moving harder into the software market. can he successfully integrate such companies in the same way?f symantes challenges of its own including recent management turmoil and increasing competition.
this one bringing a shake up in the cannabis industr bruce lynnton who founded the company is out. that sent shares higher by 2.5%. aditi roy has more about themo . >> reporter: the news came shortly before the market opened. it was bas. use out. shortly aftd he t cnbc, the move didn't come as a surprise and signal a consolation brands, the beverage giant which boowns more than of a third of canopy vote wanted to move in a different direction. >> at the end of the day, sometimes entrepreneurs are entrepreneurs because they're not supere. employa i would say i probably don't have a résume because i like creating businesses. youon't always mesh well. i think probably what they're doing is will be a better
decision. >> his coceo is sole ceo of searches the company for the replacement. consolation brand said the future of copy growth remains bright as we look forward to the company's continued success for many years to come. but constellation's ceo was lest ning when he spoke about the disappointing fourth quarter result on the recent earnings call. >> we remain happy with our investment in the cannabis base, we were not pleased with capy's recent reported year end results. however, we continue to aggressively support canopy on a more focussed, long-term strategy to win markets and factors that matter while pavinr a car path to profitability. >> he helped broker the $4 billionaneal withy last year. a decisn he doesn't regret. >> when you bring in check a change the board, there's some
>> under his watch, canopy launched hemp organizations in e u.s.nd bought the to buy u.s. acreage holdings if the u.s. legalizes recreational marijuana. but expanding internationally has lead to deepening operating losses and lower margins and missing analyst expectations on the bottom line last quarter industry watchers said in a note it does not believe the shake up will be disrupte vandiewings it as a positive f canopy growth and consolation brands. canopy's second largest shareholders tells me believes the company will stop making acquisitions and fus instead on financial discipline and increasing productivity and sales. for nightly business report, sac fran on to the economy now where 3e services sector, which employs more th of all
americans grew at the slowest pace in almost two years in june. the service side of the economy is still growing, that growth has slowed this year. on the manufacturing side, orders for u.s.-made goods fell for the second straight month in may. a drag there, weak demand for ansportation equipment, manufacturing accounts for about 12% of our economy. theit roll processer adp said employers added more jobs last month but fewer than expected. companies added 102,000 jobs in june. expectations for 140,000. the report is sometimes seen as a precsor to the government's jobs report, which isfr out on ay. the number of americans filing for first-time unemployment benefits fell more than expected lasteek. falling by 8,000 to a seasonally adjusted 221,000. the number points to a still strong laborarket. let's turn to talk abou m today'ed numbers on the labor market and what it may
mean for friday's big jobs report. chief economist at pnc financial. thank you. >> thank you. >> i will point out friday's job report is the last one the fed gets to see before their meeting the end of th month. what do you think is happening in the jobs market the united ? states n >> i think we've got a couple of factors weighing on job growth. we added about 214,000 jobs per month last year. we'lwe see s growth this year because businesses are finding it difficult thire and they can't recruit the workers they need. there's somencertainty hanging over the u.s. economy because of trade and that's weighing on job growth, asoell. expect see slower job growth 2018year compared to >> you point out the fact that smaller businesses seem to be particularly concerned aboutue e trade ind the uncertainty surrnding it. that's right. we have seen small businesses, according to the adp survey,
they've actually reduced employment in both in each of the past couple ofmonths. you know, i think they're more sensitive to, perhaps a downturn in the economy or uncertainty. it could be ty are indicating a turning point in job growth ahead of the broader economy. so i do think that small businesses are a bit more vulnerable. peak you saying we're a employment at this point? is this as good as it igets? >> welhink we're continuing to see jobs go up. they're going to go up at a slower pace. in 2019 and 2020. we've had a longhe stretch the economy has been added5, 0 200,000 jobs per month for the past five or six years. we cnu't con at that pace indefinitely. there aren't enough workers to do thao we're goingee some slowing job growth, no matter what happens with trade. just becau of the tight labor market and the underlying
demographics. >> what sectors do y think will continue adding jobs. i know manufacturing has been pulling back a little's bit. thrade related and tariff related situation there. what areas do you think have room to grow? >> i think it's going to be on thid services we continue to see consumer spending go up. i woulde' expect see sectors like education and health care, leis hepitality services, and industries like financial services, professional business services that serve the service sector, i think they're going to continue to add jobs, as well, just at a slower pace over the next year or so. >> all right. thank you for joining us. president trump has named two new nominee to the federal reserve board of governors. christopher wall already and judy shulton. we have more details from washington. >> one is a conventional pick.
the more cou be more controversial. christopher wallor is a traditional nominee. a respected academicnd economist. he was chairman of the economic department of notrgos f a deca he's now the director of research and has close ties t james bullard who is calling for the central bank to cut rates. he hasn't spoken publicly often but he wroteap a in 2011 defending central bank indepengence but wart needs to be held accountable. ib the central bank's policies are not cr, he wrote, then the bank will eventually lose the port of the nation's policy makers and maybe its independence. the white house reached out to him about the position in june and president tru met with him yesterday. meanwhile, judy's nomination could dklw bh. a local advocate for so-called sound money including a return to the gold standard. she wants theut fed to rates now. >> the big thing for me is you
don't want the federal serve giving you an artificial interest rate. i have more faith in free market mechanisms or organically determined rates. the last thing you want to do is starve a high growth productive economic trend by notng provi the financial resources. so that is a dference and that's why i'm prepared to concentrate on the mechanism. that terday she tweeted she will strive to support the u.s. pro growth economic anda with the appropriate monetary policy. unlimited potential beckons america. both nominees will have to be confirmed by the senate and president trump'r past f picks have fizzled out. r as resenting them toget a package deal could make it easier for both of them to get confirmed. up next, what is behind the spiking demand for apartment
rentals? we'll try to explain. demand for apartment rentals usually o fallsff this time of year. demand is spiking even as mortgage rates continue to fl. deanna tells us some of the reasons why. >> in a closed in d.c. suburb, a ssive apartment rental and condo complex is going up. and apparently it can't happen fast enough. >> the metrics we've seen this year hav been off the charts. >> reporter: the ceo of the group whichve currently has a billion dollars worth of residentiallass a construction in the works across the north
and southeast. >> i don't think luxury is overbilled i think in certain markets like washington, d.c., new york, boston, a., san ancisco, et. cetera, there's a tremendous employment driver. very high incomes. j those people have the propensity to rent andanto rent. >> reporter: apartment demand in the second quarter of this year spiked up 11% from a year ago. that, in turn, pushed rent up an average 3% nationality. despite the increase, a record 82%fenters still say renting is more affordable than owning. according to a new survey from freddie mac. that's up dramatically from a year ago. rental demand is currently high nest the nation's largest cthies dallas-ft. worth, chicago, houston, new york, and d.c. leading. apartment construction beg booming back in 2014, and hasn't pulled back much despite concerr that l mortgage rates would
push more renters to buy. there is still lot of new product in the pipeline, which does pose a risk,y especia as builders' cost rise and a slowing economy makes it harder to raise rents. >> the construction business contues to be challenged in terms of labor shortages and, to some degree, some pricing increases from tariffs. >> reporter: all of which are passed on to the renters. for "nightly business" report. online losses mightit walmart hard. that's where we begin tonight's market focus with fox reporting that the retail giant is projecting more than $1 billion in losses for its e commerce division. three years ago walmart bought et.com to make it more competitive with amazon but hasn't lived up to expectations. to cut losrts, wal is reportedly getting ready tood cloth for less than what the company paid for it two years ago.
walmart rose a fraction today. at&t is reportedly considerin selling its regional sports networks as part of a plan to cutbo $8 billion of debt from its balance sheet by the end of the year. bloomberg repts sinclair broadcasting, which acquired 21 foxrt regional s network from disney in may, they could also be in the bidding for the at&t regional networks that could be worth a combined $1 billion. at&t was up a fction today. the asian review said hp, nd dell,microsoft are planning to move, quote, substantial productionfperations out china because of increased tariffs. the report says both hp and dell are looking to relocate as much as 30of their notebook production capacity. dell shares were up nearly 1. 5% to 5292. microsoft and hp rose a fraction. ford reported weak sales for the first halff the year as the automobile company saw a
decline in its car and suv sales. ford did see an increase in truck sales, but the top-selling f-series truck line slipped in the first half. ford ros a fraction to $10.20. they were sold by congress as a way to bring investmentoso the distressed communities. zones havepportunity come under fire for giving a tax break to the rich for fun luxury developments in affluent cities. robert franc hasmore. >> reporter: opportunity zones were a little-ntuiced f of the 2017 tax cuts. here is how they work. if you sell o a company asset and put the proceeds into an opportunity fund, you don't pay a capital gains tax. the fund has been invested in an opportunity zone, which is supposed to be in disadvantaged neighborhoods. now the capital gains tax is deferred or reduced depending on how long the investor keeps their money in the fund. opportunity funds in zones have become hug popularight now
among the wealthy. over 130 funds are seeking to raise over $30 billion, including funds from goldman sachs, rx reality, andteve case who calls opportunity zones a game-changer for reinventing struggling neighborhoods. projects in the pipeline include hatat for humanity in chair lotsville, housing for teachers, and logistics hub near gary, indiana. there are no reporting requirements for the no dollar limits, no transparency, and no basic oversight. dy from the urban institute found a quarter of the more than 8,000 opportunity zones in the u.s. are areas with already high investment levels. current projects include a luxury high hotel in one of a. fastest growing neighborhoods. luxury apartments in downtown retail, and ffice, restaurant complex in downtown san hoe, and several projects i,
new york ci including the long island city development that would have housedon am second headquarters. another new study from three ominent economists fouhe tax benefits so far for the program are flowing only to the ecific landowners and property owners being developed rather than spreading to the broader area. quote, our finngs capped out on the capacity of the opportunity zone program go achieve il of creating value in low-income communities. for "nightly business rort." i'm robert franc. coming up, road trip. fourth of july style. gas prices are low and a record number of americans are traveling for the holiday. i'mly reporting for "nig business report" at a rest stop in new jersey. i'll tell you where analysts are concerned about the second half of the summer.
the national retail federation said we're going to spend more than6.5 billion for food alone for the fourth of july and $1 billion on beer. that all works out to about $73 per person.l the natio hot dog and sausage counsel said we're going t consume 150 million hot dogs tomorrow. it doesn't include the dogs consumed durinot the national dog eating contest. one more fun fact, americans art ex to spend $5 billion on new american flags and mostem o ere made in china. and if you are heading out for the foth, you'll be paying less for gasoline than you did last year. aaaataid thenal average for a gallon of regular is
$2.73. last year we were paying2.85. the lower prices mean you will not be alone on the roads. >> reporter: if your celebration for america's birthday takes you to the roads, be prepared for lots of company. >> it's crowded. >> we left at 4:00 in the morning. >> try to beat the traffic. >> aaa said a record number of americans will be traveling for the fourth of july. 41.4 million will be driving. the most since aaa began keeping track in 2000. >> we left at 4:30 each morning. >> reporter: one reason so many people wilbe traveling this holiday because americans have money to spend. trong, nomy is unemployment is low, and gas prices are low. aaa said the national average right now is $2.75 p gallon. that's partly because we've had more supplyhan demand. another factor -- >> a current over the global economy translated to generally
lower oil prices.te >> rep oil prices are about 10 cents cheaper than this time last year. they've been risin lately. another is the philadelphia refinery that shut down the plant and new in about a dozen states. one analyst said he expects a rise in prices to continue through the back half of summer. >> i would vhew u.s./china rade talks as pivotal to establishing for we'll see $60 stick orre not. if ts any resemblance of a trade deal, if the talk goes well, look for $60. but if the talks do not well, look for oil prices to backtrack to $55 a barrel. >> reporter: for now, drivers celebrate the relatively low gas prices while celebrating america's independence with millions of their closest friends to keep their company oe roads. for "nightly business report." and,finally, he was america's first super star ceo and, for a time, arguably the
fost trusted man in the country. with the passing lee iacocca at the age of 94, we look back at h colorful life and important legacy. >> reporter:oc lee i was a giant in the auto industry. the legacy that goes far beyond saving chrysler in the early '80s. >> where was devising a plan, executing a plan, eliminating the obstacles, or selling something that was difficult toe , he was a master at all of those things. >> reporter: the son of italian immigrants, lee iacocca rose quickly through the ranks at ford, making his mark leading a group that created the mustang in 1964. but after repeated clashes with henry ford ii, who was chairman of the ford motor company, lee iacocca was fired in 1978. two weeks later, he was hired at chrysler, which was losing llions of dollars and sliding toward bankruptcy. but lee iacoccanc con the federal government to lend chrysler over a billion dollars.
went to work transforming the company. cutting costs, buying amecan motors, the parent of jeep, and creating the minivan, which became wildly popular. as did lee iacocca who was seemingly everywhere pitching americans to buy a chrysler. >> if you can find a better r, buy it. ex i describe him as a very, very com but highly intelligent and overall highl executive executive. >> reporter: by the early '90s chryoer moved i a new headquarters north of detroit and lee iacocca was ready to finally turn over the keys. in the years to follow, chrysler would merge with dime ler, later go through a bankruptcy, and eventually be bought by fiat. while lee iacocca faded from the auto world, h legacy carried on. a tribute to the man who transformed two of the big three automakers. ph and one more example of lee iacocca's stance.t
presid reagan appointed him to receive the renovation and se centennial award in 199e there weople who wanted him to run for president. >> true. he was a down-to-earth-nice guy too. that's "nightly business report." thank you so much for joining us. >> have a great evening! have a great fourth of jy!
woman: this is "bbc world news america." is made possible by... the freeman foundation; by judy and blum-kovler foundation, pursuing solutions for america's neglected need and by contrib to this pbs station from vwers like you. thank you. laura: this is "bbc world news america." reporting from washington, i am laura trevelyan.