tv Nightly Business Report PBS August 6, 2019 5:00pm-5:30pm PDT
♪ this ispo" with sue herera l griffeth. stabilized. the stock market puts the brakes on yesterday's route after china stops its currency from falling ev further. average joe. after a week of being battered, what are retail investors doing money?eir we will get insight from one of the biggest online brokerages. andisney downer. the entertainment giant misses earnings and revenue estimates and the stock reacts. all of that and much more tonight on "nightly business report" for tuesday, august 6th. good evening, everyone. welcome. stocks recovered a bit today on wall street, getting back not quite half the losses from yesterday. the catalyst,nhina stepping and stabilizing its currency,
not allowing it to fall further. as a result, investors spped in. the dow rose 311 points to 26,029. the nasdaq climbed 107 and the s&p 500ed a 37. wall street has been on edge over the trade war. it is ctoar inv are ready to react to any headline. bob pisani explains what a trade war looks like to s walleet. >> stocks rebounded and also in the session managed to regain a chunk of monday's ste losses, and it was the worst day in 2019, remember, on monday. the markets were a little calmer today, but yesterdes the fut moved in a nearly 5% trading range over a 12-hour period. that is extraordinary and a reminder that the trade wars ould get much nastier very quickly. the central left is that the trade war can encompass a lot more than just tariffs. they can quickly morph into currency wars, for example, which is why the markets had a big problem yesterday.
th h markets new lows after the close on monday after the u.s. treesurynated china a currency manipulator, which opens the door for additional retaliatory measures potentlslly. there's the prospect of other types of economic sanctions such as china shutting down u.s. businesses in the region. it is not just a matter of how much is paid in tariffs, it is much more complicated. beyond the numbers there's also psychological effects on in lstor confidencee the prospect of lower capital expenditures andow earnings growth and that's what citigroup said overnight, the overhang of a sluggish economy, trade war threats, potential currency devaluation was enough to make citigroup lower its earnings timates for the s&p for 2019 and 2020. here is the bottom line. he markets now view currency wars as another aspent ct of th trade war and monday's action was a reminde full-blown trade wars are multi facetted and can ge of control quickly. for "nightly business report", i'm bob pisani at the new york
stock exchange. as expected china responded departme designated beijing as a currency manipulator. eunice yoon is in b jing with more. >> take a look at the front pages of the newspapers in china the global times, which is the communist party paper, says a rememb b to remain stable despit depreciation. the china daily says fluctuationsf the china normal and the i headlin in english as well as chinese. the message is as important for the national audience as well as international. beijing would be worried about a repeat of 2015-16. so the message seemed that chi would stick to its pledge to stabilize the yuan. but theutrity daily had a few words for the trump administration regarding the
currency beingel l a manipulator. the bank called the u.s. move unilateral protectionist havior that violates international rules. the bank pointed out china doesn't meet the u.s.'s three criteria for the label. secretary mnuchen said the u.s. will engage in conversations with t international monetar fund as part of the process to, quote, eliminate the unfair competitive advantage of china'i acs. the central bank addressed that too, saying the imf believes the yuan exchange rate is generally in line with fundamentals. so from beijing's perspective the evidence is in china's favor. the latest developments would seem to escalate he tensions by focusing source that deals with the negotiating team. he said that they still want a deal with the u.s. china announced it would suspend u.s. agricultural purchases but
there is room to reach a compromise. i'm eunice yoon in beijing. later in the program we will tell you what farm groups are saying about p china'sn to stop buying our agricultural products. >> not to beoutdone, the u.s. is not backing down. ylan mui reports from washington. >> reporter: on day two of the new trade war with cna the white house doubled down on its decision to accuse beijing of manipulating its currency. >> the remedy is dropp about 10% in nominal market terms. ehat's not acceptable. again, we h to keep our laws intact. there's g-20 deals. there's wto deals. so we did what we have to do. >> reporter: the trump administration also argued that tariffs are hurting china more than america and that manufacturing is returning to the united states. in a tweet this morning, trump claimed tha massive amounts of money from china and other parts of the world are pouring in to the united states. he id, we are in a very strong
position and that companies are also coming u to the. in big numbers. but economists point out that tariffs on chinese goods are paid by arican businesses, and kudlow t acknowledgeay that a weaker yuan and a stronger dollar can mitigate thes. co >> now, ironically that actually lowers prices. that takes the pressure off any consumer price increases at home, but it is the wrong way to do it. that abrogates a l of pledges and promises. after all, if china keeps devaluing itscurrency, then money is justw going to fut of there. it has already started. >> reporter: but former ambassador to china, gary locke, warned that nobody wins in a trade war and consumers could be the biggest >> all of the tariffs in place already are costing american households anywhere from $800 to over $1,000 per year. so we need to have a reset. we need to pause. we need te get peoack to the negotiating table.
>> reporter: larry summers, who served as nec director and treasury secretary under president obama, went even further in an op-ed inin "the waon post". he wrote that the white house risks real economic damage as sinesses and consumers become fearful and hold off on spending. trade negotiators from beijing were schedul to come to washington next month for another round of talks. the white house said today that meeting is still on. for "nightly business report", i'm ylan mui in washington. we don't have to tell you that the recent trade war fears over theast week created some wild swings in the market. what does a rtoail inv do about all of this with their portfolio in back with us, j.j. kennehan the chief strategist. usually the smart money dosays, t overreact, this too shall oss. more voices wall street have been saying this may not pass for a while, so what is anve or to do with this?
>> it is interesting, bill. if we loo at our client's activity over the last couple of months i would agree, first of all don'ton panic. of the things we have seen is our clients pare back on equities and go more towards fixed ieyome. e been net buyers of product, but they've actually been next sellers of equity two months in a row. the stock leading the way,bill, ybe to your surprise is apple. then we have facebook and amazon. so the fang stocks have certainly go from so envogue a year ago to ones where people re taking some profits right no as i say, going in the fixed income, but they're going in the short duration fixed income, most of it under six months. because to your point, i think a lot of people think it will last at least through the end of the year, but they want to have money rea t ifs is settled. they're not taking off all of their investments, t buty're certainly paring back some risk where they see some existing. >> reght. >> andou hearing from your clients and would you recommend to our viewers who have a
long-term time horizon perhaps to put up a list, make a list of the stocks you have always wanted to add to your portfolio but perhaps they've been too thpensive? >> ik, sue, that's a great point. yes, we have heard from our clients. but i think it is more at the top of the show bob did a great epiecelaining what this sort of means in terms of a devaluation. most ofts our cli just explain to me what this actually means. so it hasn't been a panic phone call, which i think is it is people just trying to understand. to your point, sue, if you look at our mix at td ameritrade, we have a lot of clients who are orter termtraders, who trade a lot of derivatives. i would say to those watching the show, look at stocks you want to own. don't make the mistake of going all in at this time. maybe you buy a portion of a stock you had your eye on for a while. stocks have come off a bit. that gives you some opportunithe but one message i think to
really take away from, you know, what we are seeing is this lasted longer than people think. you know, there's n reason t believe that the end is near so to speak. thisroay be anged cycle. so no matter what you do looking -- you know, just finishing earnings season, looking at the earnings, what are the companies that you want to buy saying about this or are they largely avoauing it b this is the largest issue we have right now in the marke >> j.j. kinnehan with td ameritrade. thanks for joining ustonight. >> always a pleasure. thanks, guys. now that the trade tensions have indeed escalated, wall street is expecting theeederal reseo take action and cut interest rates again, but just how many cuts does the street want? steve liesman takes a look. >> reporter: in the wake of the tariff t president and renewed worries about a currency war between the u.s. and china, markets are now more aggressive in pricing in the idea that the fed comes to the rescue anduts interest rates this year. the fed funds future market
trading with a 74% probability that the fed cuts its overnight lending rat b 25 basis points in september. there's a 73% it does another 25 in december, and it is toying with the idea of january with a thd cut with a 48% probability. but is all of that too aggressive? st. louis fed president james hell la bullard makingirst comments from the fed since the trade war blew up again. he's not as sure about the direction of policy as the market is. he said, quote, rates are in the right neighborhood. he doesn't see a need for half a percentage point. he expects anoer cut bu said, quote, it is a losing game for the fed to respond t all stock market movements. he also said fed policy can't react to the day-to-day give and take oa tried waade war. this suggests the fed is not going to react tovery tariff move. eventually the fed will have to see that tariffs aua acty
weakening the u.s.foconomy it sets policy lower. this raises the question, is this the start of a mid cycle adjustment of maybe just a couple of rate cuts or is it the cycle?f a longer easing the fed may come around to the view that it is a longer one, but it doesn'to seem there quite yet. for "nightly business report", i'm steve >> one of the fed's mandates of course is achieving full employment so it watches each new piece of data very this morning the government said that the number of job openings in june was littlehanged from may, signaling an essentially healthy jobs market still. the number of opening was 7.35 million, near 1.4 million more than the number of unemplaned amer it is the 15th straight month above 7n. mill and one place looking for workers is vermont, and tha i stat offering incentives to help lure people to live and work there. ne al, bring in younger workers. kate rogers is on the job for us in burlington, vermo.
>> reporter: for colin powkovitz remote work means freedom. >> i value working remotely, just innately. it enables me to be wherever want to be and to have my family be with me in a setti that we choose and a location and a choose that we >> reporter: the 37-year old has worked remotely for the better part of his career with pure charity, a technology nprofit. he ais family were based outside of los angeles but decided they wanted to buy a home and own some land. so they packed up their two kids and dog into an rv and drove 25,000 miles across the country for six months, looking for the ect place to plant roots. they end up in vermont this past january. he took advantage o the state's new remote worker grant program which offers incentives of up to $10,000 to workers who do the majority of their work remotely, to keep their jobs and move to vermont. he says he got some ed,500
reimbuor his move. state officials say it is a way to attract a new and potential younge base in the face of an aging population that's slowly growing in a historically tight labor market. in fact, fitz ratings downgraded the statever age demographics. >> we have incredibly low unemployment. we hear from the business community they're looking for workers and skilled workers, ans this s to be one small piece of the puzzle to try to get new to come to our state. >> reporter: so far nearly 60 rete workers have taken advantage of the program with an average age of 38, an average grant of around $3,800. come january a new phase of the program will begin, new worker grants. this will offer up to $7,500 for out-of-state residts to relocate to vermont and work for companies based in the state like this sock manufacturer. they are experiencing record
growth but needs workers to keep up. >> we will be double our workforce in a matter of years and we really need to work partneringith the state to get the workers. >> repter: for powkovitz who lives on 64 acres on the border of new york state with his family, the grant program presented the opportunity to make a needed change. >> this is something we alwfs dreameddoing, live on a lot of land. >> reporter: for "nightly business report", i'm kate rogers in burlington, vermont. and coming up, disney surprises and misses on itste quy results. we'll look at what happened to one of the more widely-held stocks. ♪ ♪ oil prices fell again today as increasing tensions between china andre the u.s.e fears of a global slowdown in demand.
both benchmark brent and domestic crude falling more 1% today. the question is howow could oil go? brian sullivan takes a look at the drivers. >> reporter: energy stocks have already been beaten up this year, but they really sank on monday on renewed trade war worries. the s&p oil and gas exploration etf, the ticker xop,itting its lowest level since early 2016 as crude oil prices now sit 30% below their highs, hit back just in early october. the big question now for oil and gas investors is simple. how low cangoil there are three main concerns in focus. number one, the strength of the u.s. dollar. the greenback touching its highest level against the chinese yuan since at least 2010. as the value of the dollar rises, oil often will fallt because globally priced in dollars. as the dollar gets stronger you need fewerollars to buy the same amount of oil. second, you have oversupply
concerns. lastonth international energy agency published a report warning of another oversupplied market next year. on top of that, you have reports showing that china and other countries have been taking in more o iranian than previously forecast. in many cases, that oil is waiting reserve,aybe in a ship floating at sea. it has not yet hit the market. when it does, and, it wi oil is likely to fall more. finally, fears of a global slowdown. investors are increasingly worried the trade war will slow global economic growth, curbima from some of the world ease biggest buyers of oil like the united states, china or india. >> there are a lot blinking lights about risk in the global economy, and that translates in d weakerand. that too is weighing on the oil price and, in particular, on the oil companies. >> reporter: oil had its worn day three years last week when the president announced his plan tofor 10% additional tarif on chinese impor beginni on september 1st. for "nightly business report", i'm brian sullivan after t bell tonight
disney posted earnings and revenu tha was below wall street estimates. the entertainment company missed earnings by $0.40 and revenue came in just over $20 billion, but it was more than a billion dollars off the mk. not surprisingly, shares were volatile after hours tonight. julia boorstin has the takeaway for investors. >> reporter: this quarter disney's lower than expected top and bottom line results reflect the impact of the company's transformaon as it integrates its fox acquisition and ast invests to build its streaming business. ceo bob igor saying the results, quote, reflectively integrate the fox asset to enhance and advance our strategic transformation. but it was the disappointment of "dark phoenix" which dragged on the studio's top and bottom line results. as the company gets ready to launch disney plus, its direct to consumer and int
division reporting a larger loss than anticipated. now iger says they have all of the pieces in place. they are positioned as well as they launch disy plusn rydition of original and lib content from fox will only further strengthen our direct-to-consumer offerings. for "nightly business report", i'm julia boorstin in burbank, california. major drug distributors offer to settle opioid lawsuits. that's where we begin tonight's market focus. bloomberg reports they are looking to pay $10 billion to settle claims that the companiee helpedthe u.s. opioid epidemic. the companies are in continuing talks with a group of state attorneys general who countered with a demand of $45 billion instead to cover the cost. all three companies fell in today's trading. the fda isooking t bring criminal action against novartis, accusing the pharmaceutical company of
knowingly submitting false data in its application for a more than t2 million geneir by drug. the agency believes the treatment will remain on the market as it continues its evaluation the shares dropped to 88.22. estimatesshack beat thanks to an increase in restaurant sales. the company raised its outlook. separately shake shack is teaking up with grubhub as the on demand food delivery industry ramps up in the country. the stock soared 18% to 86.72. take two posted earnings and revenue beat because of "grand thef auto" and "red dead redemption" fomnchises. theny raised its full year outlook. the stock jumped 8% on the news to 124.56. energizer holdings missed estimates. they said it was due to weather effects on its refrigerant business. the battery company lowered its global net sales
shares plummeted more than 14% to 33.49. el dorado resorts missed estimates due to flooding conditions in the midwest and construction disruptions at its blackhawk properties. separately, the company may also sell a casino on the las vegas strip after it completes its nearly $9 billion acquisition of cesar's. shares fell more than 3% today to 40.45. china is suspending agricultural imports from the u.s. must seem a bit of pilin on for american farmers. aditi roy has a look at the toll it is all taking. reporter: it has been a tough 18 months for u.s. farmers. they're already caught in the middle of a trade war with china when torrential rains flooded much of the midwest and southeast during planting season this spring. now china,hich was the fourth largest market for u.s. agriculture iexports, halting all shipments of u.s. agriculture exports.
we hav been shipping those products to them this year, although at reduced quantities. we have also been shipping soybeans to them this year, again at reduced quantities. shut itnow going to down completely according to what we heard the chinese say dsterday. that will putnward pressure on prices going forward. >> reporter: the american farm bureau federationays exports to china in the first half of the year are down more than a billion dollars from last year. the organization aeso n u.s. farmers stand to lose all of the nearly $9 billion market in 2018 if trade tensions soybean farmers are hardest hit. >> that is the biggest export we have toin and so, you know, farmers who plant soybeans have really burt on the prices. >> reporter: the administration has doled out billions in aid to farmers to ease the pain of tariffs. the president today promised farmers more help if necessary, but many farmers say while the subsidies help the don't make
them whole. >> it will help. it will not make up the full -- the full loss of losing a whole market,ou know, tous, to the united states. >> reporter: while farm groups have been trying to boost exports to other countries outside of china, so far they ven't had much success. the only exception has been wheat exports which have gon up 30% from last year. for "nightly business report", i'm aditi roy, san francisco up ext,apple's latest effort to keep its customers in house. ♪ ♪ finally tonight, apple is testing the waters with a new credit card. the hope is to keep apple customers inside the mpany's fabled ecosystem. will it work?
deirdre bosa takes a look. >> reporr: the apple card is here for a select group of userd for now a later this month to everyone who qualifies. >> apple card was created by apple and built on principles that we stand for, like simplicity and transparency andv y. >> reporter: it is an apple-branded credit card gssued througdman sachs and only available to iphone users. there is a physical card that works like any other credit card as well as a function inside thl pay app to make contactless payments. its features include enhanced security that uses the iphone's fingerprint or face id and a unique rewards program that gives 3% cash back on apple products. hundreds of thousands of people signed up to be notified when it became available. >> i am an apple user. i have apple computers since they started to launch them. so it is not completely out of the question. >> reporter: now a select group will get to test it as apple and
goldman sachs fine tune the product. for apple the card is a way to keep existing i tune users hooked on apple products at a time apple isli dng. they are betting it will entice users. for goldman sachs it is a high-profile push further into consumer services. the bank is hoping that the apple card can translate into new customers of its consumer bank marcus, but will users adopt it? >>m a big fan of the apple products. i would have to look into the flexibility of it. >> i mean i already have everything linked to my ipne, so my wells debit card, credit cards, all of that h stuff. my information on it. i would trust them with everything else. >> i haven my ameripress added to my apple pay. i don't think i need --pe onally i don't need anymore than that. >> reporter: one thing is for certain, the collaboration between the tech titan and banking giantbe watched closely by silicon valley and
wall street alike. for "nightly business report", deirdre bosa, san>francisco. efore we go here is another look at the day's final numbers from wall stheet. dow rose 311 points to 26,029. the nasdaq climbed 107 and the s&p 500 added 37. that is "nightly business report" for tonight. i'm sue herera. thanks for joining us. >> i'm bill griffeth. have a great evening. e you tomorrow. ♪ ♪