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tv   Nightly Business Report  PBS  July 26, 2019 5:00pm-5:31pm PDT

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♪ this is "nightly business report" with sue herera and bill griffeth. ♪ mega merger sprint and t-mobile's $26 billion deal gets the blessing of the justice department and it could usher in a new era for the wireless don't bet against the consumer. spending is powering the economy which grew at a slightly faster pace than expected in second quarter. from the battle field to board room, how business boot camps are helping female veterans become entrepreurs. those stories and more on "nightly business report" for friday, july 26th. we bid you good evening and welcome. the s&p and the nasdaq closed at record highs today.
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we will have more on that in a moment. but we begin with that on-again, off again merger of -mrint andile which now appears to be very much on. after years of intense gulatory scrutiny, the justice department today approved $26 billion deal which brings together the nation's third and fourth largest wireless providers. that news sent shares of both companiesighertoday, even thoughpp the aroval comes with conditions. ylan mui rorts for us from washington. >> reporter: the department of justice giving the green light to the $26 between t-mobile and sprint, but forcing the companies to sell some assets as part of the deal. will the agreekment, sprint have to sell the prepaid business to dish and spectrum to dish. e company will have to make 20,000 sale sites and hundreds of stores available to hish. dish woue access to t-mobile's network for sevenar assistant attorney general megan
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gallahine said without the rger it would harg competition. it sets up dish as a dis iptive forc wireless. this agreement has gotten by in some five state attorney generals including nebraska, kansas, ohio, oklahoma and south dakota. still, the merge is pushing push back from other ags. 13 states and the district of columbia filed an ongoingui la to block the merger. >> i'm hoping it doesn't turn intoal a politfight, that the state attorney generals are able to see the deal, how good it will betaor their and constituents. >> reporter: it is important to know that the merger cannot be finalized until the case is resolved. curreny a trial date is scheduled for october 7th but it could benielayed. fortly business report" i'm ylan mui in washington. how mighthe sprint/t-mobile deal reshape the wireless industry in joining us to talk about it is jonathan chap lynn, managing partner at
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new street rweearch. ome. >> thanks for having me. >> you say it ushers in and paves theea way for disruption. how do you see it playing out? >> it does. what the deal does if he goes through, and bear in mind we still have aight with the tats here and it is somewhat in the balance, but if it goes through andish ends upuilding a network, you will have two networks with a tremendous amount of capacity on them, with a very, very low unit cost. that is a recipe for disruption. so to put it in perspective, between t-mobile and dish they will have 6 of the industry's capacity. dish has no revenue in wireless except what they buy from sprint. including d sprin what they sell to dish has about 30% of the industry's revenues, so ohey have theortunity to effectively double the share they have in the industry. because they've gotll of this excess capacity and a very low cost, andhat spellshe -- that spells out disruption in our view. >> all right. but the 13 states that still
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disapprove of this are worried about job loss and higher pricing fonsumers. do they have a valid se >> they do to some extent. if whathey're worried about is how real dish is as a new entrant, dish has been sitting on the pilot capacity, pilot spectrum for half a decade and done nothing with it. they have made a lot of promises in the contexts of t deal that should hopefully compel them to finally build a network, put it to use get into the business. that's what the fight in the tcourts is goingbe about. it is about how real dish is, how much can we trust tm to follow through on their commitments. but if they do things are going to get really, really interesting in the wireless industry consumers ought to be big beneficiaries. as aact, any business that product or service that's delivered over a network ought to ultimately be a beneficiary of this deal because the costs
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of connectivity will down. >> ahat about the cable industry? >> also a beneficiary. so they're in the wireless business today in a very small way and they're relying on verizon's network. the degree to which they can be disruptive is limited by what they pay vizon for acces to that network, and verizon has no interest in giving it t them cheaply because verizon is their biggest competitor. but if the can gond buy capacity from dish much more cheaply, first of all, they will have a better, more profitable wireless business, but it gives them the ability to be more , aggressio after more share, take prices down, all of which is goo for consumers. >> they cleared a big hurdle today but still the legal issues to face. thanks for joining us tonight,t jo chapel. >> thanks for having me. as we mentioned the s&p and nasdaq ended the week at ors were encouraged by alphabet and intel.
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27,192 for the dow. sthe major averaere all higher for the week. also lifting the market was a report that showed the econo grew at a slower but still solid clip in the second quarter. where did the strength come from? well, as with most things srelated to t economy, it is complicated. steve liesmanns expl >> reporter: the government reportedwt friday that gh slowed in the second quarter by a ful percentage point following the 2.1% from 3.1 in the first. than e economy went more wall street expected as consumer oending did its best to offset a slow downthe business side. rather than focus on that slowing, many economists chose to see the number as a reveron back t a more normal growth rate for the economy. the strength in the first quarter was really the cexception. wesumer spending in the first quarter gave way to explosive 4.3% spending growth in the second, bes number since end of 2017, and government
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suspended, depressed by government shut doub in first quarter, rebounded to register the biggest game since the financial crisis. on the other hand, business spending and inventory growth turned into negative numbers in second trade d on gdp. >> i think it is reasonable to suspect trade uncertainty is a capr factor holding back ex. maybe we will do a little better in the third quarter, but that say the surve are not suggesting there will be a huge rebound in cap x at any time in the offing. ihink best thing to hope for is a return to moderate growth there. >> what does growth ithe quarter ending in june tell us about how we're growing now? >> aolid number. onl t obviously the inventory piece volatility and the investment numbers are a disappointment but not a surprise. overall we see strong consumers. >> moderate growth would be welcome given many began 2019 forecaing a recession this year or next.
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for "nightly business report" i'm steve liesman. >> and that gd report is one of the last major readings on the economy that the fed policymakers will see before they meet next week. market is ay the already priced in an interest rate cut which leaves investors in an unusual positann. mikeli explains. >> reporter: well street typically likes when the federal reserve starts cutting interest rates, but what about when a rate cut comes with the economy in ghape and stocks up 20% in past seven months? esese are the questions consuming irs ahead of next week's fed meeting. with second quarter gdp arriving better than expected and the s&p 500 at a fresh all-time high, a quarter percentage cut in short term rates has beenul priced in to the bond market this avnth. the companies had the benefit of lower borrowing cost even before the fed acts. the s&p 500 is valued above 17 times forecast earnings for the
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next 12 months, about a high valuation for the bull mark. does it mean a rate cut has front loaded the full benefit of the anticipatin easing of policy from the fed? there's a risk it is true but no guarantee. in past cycles when a rate cut averted a slide into recessocn, tended to perform well after the cut. corporate profits came in stronger than feared a are seen to grow at a healthier pace late this year, and low inflation and firm credit conditions continue to support equity valleys. still, the best rallies of the ell market h come when a widely feared threat did not come to pass, not when a widely expected bit of good news finally arrived. for "nightly business report" i'm mike santoli. we're just about halfway through the current earnings reporting season and we hnee le that some, but not all companies are being hurt by the trade war with. chi coke, for example, saw growth in the asia-pacific region. lvmh pointed to strong demand, especially in cheen au.
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texas instrument has seen growth in 5g proctsut caterpillar ted -- and las vegas sands noted weaker cash flow from macau. 's after all of this we earnings reports and this morning's gdp report it becomes clear we aost have two economies. things look good when the consumer is involved, not so goodhen you talk trade. what's an investor to do with th duel economy? joining us, we welcome liz anne saunders with charles schwab. good to see you. >> good to see you too. >> there are clear haves and have notes right now. what do you do with it when investing in the stock market ri now? >> we think it is an environment, given some of the things you mentioned, the bifurcation where you have some decent strength in domestic industries c on thesumer side of the economy, but weakness in business investment and confidence that the business
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leaders have, is that you -- and given it is late in cycle,nt yo o kind of snuggle up to benchmarks so to speak. in other words don't take undue risk. what we've been telling investors really for about t last two years is keep your equityllation no higher than whatever your normal long-term strategic allocation is. h we hav an emphasis towards large-cap stocks at expense ofc smal stocks. small-cap stocks general have higher debt levels. they can be more nimble andgs thike the trade war and tariffs. at the sector levele are also relatively neutral. we only have one out perform rang right now and one under perform rating, the out perform being health care. so we think it is a trickier time and that the best stance right now is not to try to make bets in one direction or another. >> and does the interest rate environment with the fede
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pekted tpek -- fed expected to cut next week influence that at all? >>d think it is g for asset prices, for risk asset prices. it has been support under the stock market. what i think though is the appropriate questiono ask is whether that is going to fix what ails the economy. i'm not sure the answer to that yes. i don't think what ails the economy on the manufacturing si, tied to trand tariffs, is that interest rates are too high. so i begshe question will a cut in interest rates, a quarter point or even a half point, be enough of a solution to sort of reignite animal spirits, corporate animal spirits, which i think has been the thing that's been damaged and i'm not sure the answer to the question is yes. >> before we let you go briefly here, thearket has waffled between defensive sectors and cyclical secto. you seem to be suggesting to sort of take the middle ground here, is that what i'm i hearin? >> think what investors should really focus on i less so than things like sector but more so
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on factors. i think what is important for investors to look at, especially if they're buying individual names, is stability of earnings, quality of earnings, companies that have rising earnings expectations. so it is that stability quality factor that quite frankly you can find across the spectrum of industries andsectors. i think focusing on those factors is more upon than juste trying to h in on a segment of the economy. >> liz anne saunders with charles schwab. we will let you get back to the clam bake. enjoy the weekend. >> thank you very much. o> a few stories out o washington tonight. first, president trump said his administration wl reject apple's request to exempt its mac pro from u.s. tariffs on chinese imports. apple has not commented. the president also said h expects apple to announce it will build a plant in texas. secondly, president trump is threatening retaliatory action against france.
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the move would be in response to that country's new tax affecting american tech companies. in the tweet the president suggested french wine. three different tes of dividend growth stocks our market m yitor says may want to add to your portfolio. ♪ ♪ mcdonald's has apparently discovered a recipe forss suc the global fast food chain has been modernizing its stores, investing in technology and raising prices, all of which helped it i log best global sales in seven years today. that news sent the stock slightly higher in today's session but it is a few dollars away from anl-time high. kate rogers has more. >> reporter: the consume
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trong and mcdonald's is reaping the benefits. u.s. same-store sales rose as promotions and store upgrades atraekted more diners. the ceo said this was the hi sest u.s. compince the launch of all-day breakfast in 2015. mcdonald's has als been investing in its-t behind-scenes technology to improve and personalize hundreds of drive throughs, and because of it people are spending more. >> the dries through m up about 70% of their sales across the u.s., and they'reg mak- and they're making investments in the technology t the drive the average check higher. so in our view it investment behind tech, which is i think amart move on their part. >> reporter: as delivery competition heats up, mcdonald's is doing dealso keepup, recently inking a deal with door dash as a partner. global delivery is expected to be a $4 billion business for mcdonald's and the company maintained double digit growth in restaurants tha offer the service more than a year.
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one question remains, will the fast food giant make a move on what appears to be the latest fad, plant-based meat. the ceo said they're looking at that option closely. for "nightly business report", i'm kate rogers. twitter has been experimenting with ways to attract and keep users. it appears to be paying off. the company reported better than expected earnings and revenue, sending the stock up about9%. julia boorstin reports tonight from los angeles. >> reporter: twitter growing its user base faster than expected. the twitter cfo said it shows then company's investmts in making the platform easier to moving spam from it are paying off and showing it has more room to grow. >> our results are a great reminder of how the whole world can f benefitm twitter, and the work for us is to help people find what they're loong forquickly, to remind them about the event and topics that they care about most, whether it is a sporting event in the
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united states or a political event in asia, these are things that people all over the world should careut. we just have to do a better job surfacing the things that people are looking for. >>keporter: twitter ceo j dorsey says that now they have a better understanding of what twitter is and w people use it, enabling them to prioritize what they should be working on, and now that includes improving the platform by making it easier to follo participate in conversations. >> this company is starting to really generate a track record of consistency. investors like that. whether they're going to have t materially increase infrastructure investments around trust and platform security, that's the question mark for me for some investors. >> reporter: siegel and dorsey both stressing the company's focused on becoming more nimble so it can quickly implement change to keep its users hooked and work to prevent manipulation on the platform. for "nightly business report", i'm julia boorstin in los angeles. higher prices giv colgate palmolive a live. that yes we begin wit the
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consumer's giant reporting weaker than expected earnings but they sawas an inc in organic sales. the company raised prices for product to offset higher raw materialar costs. rose more than 2% today to 73.69. good yr missed estimates due to slumping sale following global ao production a higher raw material cost. the ceo says that the tire company continues to strugglen what h calls a challenging environment, and the stock fell more than 5% today to 14.16. pharmaceutical company thanks to an increase in cancer drug, but humira sales fell. shares are up basally 1.5% to finish at 67.76. phillips 66 reported mixed reports as it posted better than expected earnings but fell short ue rev the energy company had higher oil refining margins and more volume in its pipelines and its
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natural gas/liquid termils. the stock was up a fraction to 102.32. illinois tool works reported mixed results with an earnings beat but missed on revenue. the equipment manufacturer lowered its full year guidance due to soft demand. shares fell about 2% to 155.63. >> time for our weekly market monitor who has three different types of diffe ntdenied-paying growth stocks he feels should rotect your portfolio shoul equities sell off. last time he was with us last october, he recommend o'reilly automotive, up 14%exince then, laboratories, up 27%, and mastercard which is 39% higher. ♪ >> back with us tonight doug butler, east portfolio at rockland trust. thanks for joining us tonight. great. thank you for having me. >> we were talking dividend stocks but starting with 3m paich today became a controversial c because
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today they revealed an internal investigation into potential violation of u.s./foreign corrupt trade practices. here is their statement they issued to explain what thisst ination is all about. they said through this internal process they discovered certain travel activities and related funding and record-keeping issues raising concerns rising from marketing efforts by certain business groups based in china. we felt the need to disclose all of that. you still likpa the com or does this give you pause at this point? >> i thinkny time you are seeing one of these foreign corrupt trading, which tends to be bribes paid by -- normally by people who are nots neily super high up, it always gives you a bit of a pause. but think 3m in particular is a company that has weather so many storms. they have paid dividends for 100 years, grown their divends for 60 years straight. they're a global, global player, and tre's alwaysoing to be some headline risk around them,
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you know, names that do a lot of business in china or parts of pt world where the cor services may come into play. but i think we are still confident in the long-term prospect and the prospects of 3m again. you know, it is damaging if itp endseing meaningful, but we're comfortable with the mix. >> very good. let's go to your other pick, serner, the leading company in digital health records. >> yes. i mean i think everybo knows when you go to the doctor now you see an ipad h in theirds normally and you see it at every hospital, almost evein hospital america now hashe electronic th records or every major acute hospital. frankly,7% of physician's offices use electronic health records. so it is becoming very prevalent, and we like them because they're the sort of stock that's a dividend initiator. ust decided to pay dividend for the first time and, gain, this is sort of getting
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in on the bottom floor of t mast of dividends we project a client earning for years to >> quif we can on lycome. fastenal. they suffered a bit the last couple of months. what do you like about them? >> i think they suffered, the news ce out in terms of the gdp numbers, this -- this past quarter, and the business comps then suffered this time. we think business confidence will recover. we still believe thatra the war will not be, you know, a full-scale, full-blown, no-holds-barred trade war. we think there's room for negotiation and we think it will take a little while. it will probably take another six aymonths. >> >> but we still see them as a company with many growth opportunities ahe of it, and especially in building there. now, there a different type of connectives than we are used to talkinabout. >> a right. doug butler with rockland trust.
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thank you for joining us tonight. >> thank you. coming up, closi g the for female veterans. t> reporter: from boots on the ground to b camp for entrepreneurs, how military veterans areo transitioning the civilian business world. i'm contessa brewer . i will have that story coming up on "nightly business report". ♪ ♪ the gender pay gap among veterans is wider than in the general population, and that's where a prom ogram out of syracs university com in. contessa brewer has the latest installment of our "closing t gap" series. >> reporter: natasha spentea 20 in the army. >> i had opportunities to be a commanr. i was airborne. i was in special operations. operations special around the world. >> reporter: when she retired with all of her skills and
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logistics and management, she took a job at williams and sonoma. there were some hurds. >> it wa the lack of camaraderie, lack of values, you know, civilian values are different than military values. >> repter: after seven months she quit. though she landed an interview aton am, she opted to start her own siness, shoes. >> i remembered how much loved >>oes from being stationed in italy. eporter: to get her shoe business off the ground she needed a boot camp, one designed especially for entrepreneurs and especially foret verans. she found it here at syracuse unersity with an institute for veterans and militaryamies, syracuse is tackling the challenge of transitioning from the med forces to civilian life. for women it can be especially challenging. >> getting their transition right is cor to ensuring financial independence. >> reporter: maureen casey
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testified before congress about the problem. women vet spend longing looking for work, earn 30% less than male counterparts and may struggle in a corporate environment. >> we have seen an upeick in number of women drawn toward trepreneurship programs, running counter to therend where we have seen a decrease of veterans going into entrepreneurship. >> reporter: withessons on pitching to venture capitalistsh been so successful it has aten duplicated at other universities, grag 2,000. another program aimed specifically with helping women vets with small business skills has seen 3,000 graduates, 65% of whom started their own business. 90% of those are still operating. for dericka tdavis, coaching is invaluable is growing her health and wellness business. these programs and the experience that you get in the military prepares you to b up r the challenges, and, you now, no matter what you can
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keeppersevering. >> reporter: starbucks' former ceo howard schultz gave 7.5 presidential dollars to help fund thefft and port partners include jp morgan ase,pepsico, walmart, prudential, the private sectoro stepping up help veterans put their best feet forward. in syracuse, contessa brewer , "nightly business report." >> that is "nightly business report" tonight. i'm thanks for joining us. >> i'm bill griffeth. we finish the week for a record for the s&p andq the nasd we have a fed meeting next week as well. have a great weekend. see you monday. ♪ ♪
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woman: this is "bbc worldews america." the freeman foundation; by judy and peteblum-kovle, pursuing solutions for america's neglected needs; and by contributions to this pbs station from viewers like you. thank you. ♪
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