tv Nightly Business Report PBS August 13, 2019 5:00pm-5:31pm PDT
♪ this is "nightly business report" with sue herera and bl griffeth. tariff delay. stocks ral after president trump eases his stance on a new round of duties, sending the dow back above 26,000. mountain of debt. a new report shows older more moneywe a lot now than just a decade ago. could that make retirement a little less goldenha mus documents. emergencies happen and there are four legal papers everyone needs to have to be p betterpared for tthem. se stories and much more tonight on "nightly business report for thistuesday, august 13th. ♪ >> good eveng, everyone. welcome. the buyers came back to wall
street. investors were encouraged by the white house announcemen that it would delay planned tariffs on some chinese goods. the decisiond hopes that the trade talks between the two economic superpowersould be revived. as one strategist said, the stock market reactions more proof that the trade war has been hanging over this market, and at least for today that liftewas the dow jones industrial average rose 372 points to 26,279, pretty much wiping out yesterday's lossq. the nasas up 152 and the s&p 500 added 42. kayla tausche has the details on today's cooling of tensions. >> reporter: after days of no news and increasing investor worry on the trade front, tensions thawed with a phone call between u.s. and chinese negotiating principles, which china state tv came at washington's invitation. both treasury and usdr declined to comment on whether in- negotiations were confirmed, but the two sides are expected to
speak by phone again in two weeks justefore a september 1st tariff deadline. in the meantime the office of the u.s trade representative a wide ed tariffs on swath of consumer goods including smartphones, toysesnd some snd i a parl until mid-december. just days after the fed's last meeting this year, and president trump says he doesn't want to be the grinch. >> wish everyone a joyous christmas season. just in case some of the tariffs would have some impact on u.s. customs. so fair they've had virtually none. but in case they mig impact on people, what we've done is we've delayed it so that they won't bet relev to the christmas shopping season. >> reporter: toy company hasbro among others said it appreciated the trump administration listening to their giving the company more time to plan while buying the white house an additi three months to see if china will agree to its terms of a trade deal. for "nightly business report", i'm kayla tausche in new york.
apple's products are some on the m beneficiaries of this tariff reprieve. that sent that stock up more than 4%, making it the best performer inside the dow. shares of apple suppliers were higher today including company like lamento, sky works and corning. retail c like kohl's, best buy and dollar tree got a lift since that sector isiewed with e as a lot to lose in a u.s./china trade war. peter sorentino joins us to ta about the impact the tariff delay had on the market, the retail sector today. he is chief investment officer at well it management. nice to have you with us. >> thank youe appreciate the opportunity. >> this is a positive, but longer term things not changed all that much? >> essentially we have slowing global growth, and so while it is a pitivennouncement i think it does sort of separate from the reality that a lot of
the ordering and inventory for the holiday season has already shipped. look at the time it takes to transship the pacific ocean. a lot of the inventory is in the warehouse in the u.s., but it is a wcome development and shifting trends for investment as you pointed out. we saw the balance the stocks received, but the stocks have been so volatile recently it depends on the next headline and what they're going to do. what does the individual investor do with some of these companies if they don't already own them and they want to? what do you think? >> the furmndamentals for the group are still positive. we are seeing continued innovation. the apple ecosystem as you mentioned earlier reaches broadly and it is a trend we will see goiforward, where you have this interface between the real world and the digital world. so that continues to expand. we see greater digital content in ailes. we're moving toward driverless autos. it is an increasing technology
pushout into, you know, even now the consumer services shetor. so general background for these companies is still very, veryis positive. s a short-run positive for them in terms of just investor sentiment, but over longer term it is a good group. any time, you know, we get an opportuny to buy these stocks cheaper, it is a welcome opportunity. >> speaking of cheaper, how do you feel about valuations? i know it will differ depending on the part of the market that we're talking about, but in geral do you find these companies fairly valu, still overvalued? >> one of the problems over the last couple ofhe years is market leadership has been so arrow, and it has really been confined to a large extent to technology, telecommunicationes servnd to consumer discretionary stocks. these valuations have gotten stretched, and to expect additional volatilitythere, it is not too surprising, you know, given that they were trading on what iould call you know, a great deal of positive expectation. o to think that they're goi to be volatile going forward and we could see additional down
side, that's possible. ndamentals ink the furm are solid for the group. i would be encouraged by any adjustment of price to bring them more i t line with future valuation. >> before we let you go, i don't want to put words in your mouth, but you don't sound like y are investing in the companies with the trade war in mind. in other words it doesn't impact your view of these companies long term. am i reading that correctly? >> yes. even when you look at apple, i ppan's sales to china have been declining over the last three years now. so think you have to take a broader view of these, really more of a global view because, in effect, the -- what we seeing in terms of the automation pushout if you will into things like consumer services and retail, that's a trend that's going to continue. just as we saw with factory automation. so it is another wave, if you will, of technology, you know, integrating itself into our daily lives. that's a very positive trend. it is a very productive tend for corporate profi i. is something we are
encouraged by. >> peter, thank you. peter sorentino with well it management. >> even though the move was at up there are still a number of global hot spots investors are keeping a close eye on. bob pisani has more on that from the u.s. stock exchange. handfulrter: there are a of other geopolitical outweighing on the global market. hong kong f hong kong is grappling with anti-government protesters storming the airport for the second day in a row. it has taken a toll on the hong kong stock mark, down roughly 14% since start of april raul sestro. macau- resort and casino operator sands china was lowered as well as hong kong airline cafe pacific, now down about 14% for the year.st ins are worried about a longer term conflict between hong kong and beijing.
we did see u.s. stocks come off of their highsoday when president donald trump tweeted that china is moving troops to hong kong's borders earlier this afternoon. italy and argentina are coping with populace price, with italy's government teetering on the brink of collapsend argentina coping with the current president's poor performance in the primary ntelection. arian stocks plunged almost 50% on monday, one of the worst declines the world has oten in decades. let's forget about the uk. they're still struggling to avoid a hard, no-deal exit from the european union, or brexit as it is called, oy the end october. for "nightly business report", i'm bob pisani athe new york stock exchange. >> so what do some of the political hot spots likeko hong or argentina mean for investors? joining us night, jeff kleintop is back with us, chief global investment strategy at
charles schwab. nice to have you back with us. >> thanks for having me. >> let m start with argentina. i can't tell you the number ofa ts that have been on the program that say the emerging markets are the place to loot because some point they have to come back. but argentina is a good example of the proems facing t emerging markets right now. is it as bad as it gets, do you think? >> argentina is a little bit of an isolated case. i know we can look around the world as bob summed up the issues, but argentina is a unique factor. it has a long history of political mismanagement and boom and busts cychat made it a difficult market. in fact, they were kicked out of the emerging markets index in 2009 because of the former presidentap institutingal controls. one of the developments of course in the latest primary surprise thatd the stock market to fall so dramatically was the very same president, now a vp candidate, potentially now looking in positio to win the
election and maybe return the country to capital control. b it was the concern there. again, it has been a boom-and-bus economy for a long heme, maybe not as representative of emerging markets universe. >> it is less clear in hong kong, is it not, jeff? we know the history with argentina. we don't know how the protest in hong kong and hong kong's relationship with mainland china is goingolay out. >> you're right. this is a much bigger issue for the oveetll ma and one that seems unlikely to involve troops, military engagement by china coming over the but certainly police action. we will be watching this very closely, not only because it affects hong kong and could scare away businesses, could lead to international sanctions d worsen the trade war and really slow china's economy, which is already growing at the weakest pace inecades with impacts for global growth. but it affects taiwan.iw has a presidential election coming up on january 11th against a
pro-chinese challenger versus a pro-independence incumbent. how china deals with the hong kong situation could affect taiwan as well and result in a global market ckpact. >> q if we can on the middle east, specifically the strait of hormuz, the impact of oil. wi one hand you have a global economy that's s down, which means lower demand which could mean lower prices, but at the same time you have all of the problems going ontr thet of hormuz which could mean a cut-off in supply which could mean p higherces. what is your view on that and its impact on valentine? >> bill, volatility, we might bet on that. i think that's the safest assumption. look, i think any ship interdiction in the strt of hormuz is probably temporary given the military hsets the u. now put there, but also we're seeing from the uk and others as well. japan is considering this also, in escorting ships through there to make sure that any blockade is very short lived and isolated. so we'll have to see, but
cleer clearly volatility is the safest bet in oil prices given the upside and down side factor. >> always good to see you. >> you bet. a new report on inflation shows it accelerated in july. the consumer price index rose for a second straight month, up .3%, making this the strong e est two-month grain since early 2006. energy, rent and heaimh care. tf today's upgrades and down grades. we begin with shares o mcdonald's. they were initial yapted with a buy rating at newoverage mkm partners. they cited strong domestic and international sales growth for the company. price target, $250. the stock rose 1% to19.73. dr horton was initiated with a uy rating in new coverage at suntrust. the analyst cited the homebuilder's position in the rapidly-growing entry level housing market. price target now $56. that stock gainedso 2% to $47.9.
hwest airlines was downgraded to hold from buy at argus research. that analyst cited thengoing grounding of the 737 max, which is leading to rising costs and operational disruptions for that carrier. the stock fell a fractio today to $49.92. still ahead, older americans are supposed to be debt free, but a new report shows that's not the case. ♪ ♪ boeing released its july orders and deliveries today, and for a fifth straight mon it had zero orders for its beleaguered 737
max. as phi lebeau reports it may not change until the grounded airplane is back in thesk s. >> reporter: it sounds like a broken record. another month the 737 max is grounded, another month of zero new orders for the plane. hardly a surprise f analysts. >> my expectation is as soon as it gets back into service there will be order activity for the trplane. but i think key question is when does the airplane get back into service. >> reporte boeing's max plan is to finish fixing the plane and file for recertification by the end of september, with the faa approving it a short time t later and max back in service by the end of the year. that would be welcomeews for airlines like southwest, which has parked dozens of maxes. but the new headf the faa is in no hurry to say the max is safe. >> this plane will not fly in commercial serilce again u i am completely assured that it is safe to do so.
>> reporter: with the faa under pressure to be tougher on boeing, a regulator scrutinizing the plane's flight control system to make sure issues that caused two 737 max resolved.e completely >> i know they keep adding to additional requirements and additional testing, but sooner or later, you know, the airplane is going to demonstrate its ability and there won't be anything other than maybe political considerations, but e airplane is ready to go. i feel comfortable that it is going to be a g reallyd airplane. >> reporter: but for now, airlines are not placing new orders for the 737 max, and those who are waiting for delive,es in the futu well, they're sticking with the plane. in july tre were zero 737 max cancellations. phil lebeau, "nightly business report", chicago. and after countless t on-and-offks cbs and viacom are finally merging. that's where we begin tonight's
marketocus with a new company that will be called viacom cbs. it reunites both media companies th i split back 2006. the reunified company hopes to gain better foong in an industry dealing with more tv cord cutting and an increase in the use streaming services. cbs shares rose more than 1% today to 48.70 while viacom was up more than 2% to 29.21. with the ongoing trade dispute between the u.s. and china, some chinne companies have b bracing for an economic slowdown but it does not appear to be the case for jd.com, that china-based ecommerce company th i had growth sales which helped it easily beat estimatesm sharesd nearly 13% after the report today to $30.66 general electric ceo larry colt bought nearly $3 million of the company stock during the second quarter. scc filing shows that he purchased more than 330,000 shares at just over $9 eacot his holdings are now
valued at $8.5 millionos ge stock more than 3% toda brinker international, which is the parent company of the chili's and mauj yawn oggiano'sd results. the company pla to acquire chili's restaurants from a franchisee. shares fell to 38.64. advanceduto parts missed expectations as same sales stores were flat. the auto parts retailer alsoa announce$400 million share repurchase program. the shares were up a fraction to 142.23. after the bell, tilray beat revenue estimates and missed on earnings. the legalization for adult marijuana use inanada and its urope t expansions in helped sales, which the eo expects to see more growth of in the near future. >> i tell my team all the time
that this is day one in this industry. all of this excitement is about estwo countn the world that have legalized for adult use, and 41 that have legalized mofo medical. i expect the glol medical market to more than double in terms of countries that legalize over the nexthr years. >> shares initially dropped in the after hours trading but closed the regular session up more than 8% to 46.02. household debt is rising, especiallymong seniors. according to a new report from the new york federal reserve, people in their 60s held just over $2 trillion of debt in the second quarter. that's much more tha the $1.5 trillion they held during the financial crisis and it is even worse among those 70 years and older. theirebt level is roughly akuble what it was a decade ago. what do we of this? joining us tonight is joe
brucwella, chief economist. thank you for joining us. >> it is good to be here. >> i am fascinated and horrified by the numbers there. seniors are supposed to be debt free. what happened? what is going on here? >> the baby boomers didn't get it done during their prime working age years, so they're trying to substitute debt for lack of fix income revenue and then their own savings rate. this will be a budding problem. you know, whe you go t washington, you go up on the hill and you talk to people, there is activ talk about a u.s. retirement crisis. i think what you are seeing in the internals of those debt namics is exactly that. >> so they're borrowing to make et s meet or borrowing to through, but they're doing it in a low interest rate environment, almost record low environment. so they're not making anything on what they actually have saved. >> well, that's right. so if youre a saver in this new economy, right, where we will have very low interest rates for a very long period of time and we may actually indeed
have negative interest rates over the next several years, you're not going to get good returns as savers. so i'm not surprised that the boomers have turned to theke credit m in order to make ends meet or as a substitute for what they didn't do during their prime years. >> what will congress do with this, if anything? >> well, you know, it is funny. i think tt this is onef the sleeper issues of the upcoming campaign. my sense is that the democratic party will get way in front of thisi n't be surprised if mr. trump gets aggressive on this too, and they try toge put er a package to alleviate some of the issues. lhat is interesting, bill, as you guys w know, half of the population is under 38. i wonder how they're going to look at that given their elevated levels of student debt. this will be a combustible issue going forward. > good to see you. thanks for tinformation. >> you got it. it is not going away. >> yes, from rsm u.s., thanks agai >> the pork industry is a big
part of the chinese economy but it has been ravaged byea d this year due to the spread of the african swine flu. the situation is so severe that theovernment has stockedp on its strategic pork reserves, even imporng u.s. pork despite the trade war. now there's a push to change the industry's business model. eunice yoon takes a look at the shift in strategy. ♪ >> reporter: chinese agricultural companies are preparing for a greater push towards large-scale farms, inilar to what you would see the united states. african swine fever has ravaged the industry he,iping out an china's 400uarter of million pigs, and that sparked a call for change. >> translator: china c purchase globally instead but such a purchase will be far from enough. buying has raised global pig prices to a relatively higher level now. to solve the problem weave to rely on our own ability inside the chinese system. >> reporter: beijing wants to professionalize industry made up largely of smaller backyard
farms. the government is now requiring tighter controls and bigger investment in waste disposand biosecurity and it is offering financial suprt to get producers to scale up, but there are still challenges like china's lack of experience and big farming population. for "nightly businesseport", i'm eunice yoon in beijing. coming up, four documents a everyone nee part of their financial and estate planning. ♪ ♪ ♪ here
here is what we are watching. tomorrow ilcy's report earnings. they will be looking for impacts tariffs may have. cisco reports quarterly results. questions about exposure to the u.s./china trade war will be brought up as well. we will get a fresh read on the chinese economy itself. g for what we're watch on wednesday. an unexpected emergency. it can happen at any time. to be why you need prepared. there are four essential documents everyone needs to have. our senior personal finance correspondent sharon epperson m joins us wite on that. good to see you, sharon. >> good to be here. >> so if something happens to you, what is the number one that you think everybody has to have? >> i think everyone needs to have for their estaterplanning es a will. you want to figure out where your assets are going to go, what inheritances you mayhave, who is going to get those, but most important for me as the c mother of tldren is that it gives the guardianship designation. i think for tho who hav not passed away, they are going
through something where they're able to care for their children at the time they're still living, having that guardian set up is very key and i learned that. >> yes, indeed. >> something else you learned. a document that you need if you become seriously injured, as you were a few years ago. >> yes. it is so important to have a financial power of attorney, a durable o power attorney to handle the financial decisions that need to be made while you're not there, from paying your bills to making sure that the medical bills eventually get paid as well. so whether you are having something on auto payalready, you still need a person to oversee that, making sure that everything is d that's where the durable power of attorney document comes in, allowing you to designate that person. >> the other aspect of it is if you were incapacitated in some way, shape or form, if you have certain health wishes, you need someone who can execute you but they have to be given permission to do that. >> yes, i had a period of time where i was not able to make any of those kind of critical medical decisions, and i someone to be able to step in and take that
health care power of attorney. i had a document that allowed someone to do that. that's my husband. i had an alternate name, that was my sister. they made those decisions tother, and they followed the living well in terms of when it is end of lnte treathen it is a critical situation. >> where do you get the documents? >> my favorite thing to do is go attorney.te planning i want to talk to someone that's going to draft the documents, kind of walk m through all o the steps and also be able to have someone to call when the documents may be ndneeded, also in case they're challenged. in my case it was good to be able to give my family members a name, a number and someone that they could contact. you can also findhe health care documents on the american bar association. they have forms to help you do o it online, aarp, some of those health forms can be available.e there lso websites that will allow you to do a power of attorney or even a will online. i think if you can it is best to find an estatlaing attorney that can help walk you through
this, talk to other friends and sources, and a financial adviser can give you good leads on attorneys. >> yes, good advice and peace of mind for yourself and everybody. >> exactly. >> thank you, sharonepperson. before we go, a look at the final day on wall street. remember, yesterday we were down more than 300oints. today we were up more than 300 points, back above 26,000. nasdaq was up 152, the s&p added 42. and that is "nightly business report" for tonight. i'm sue herera. for joining us. >> i'm bill griffeth. have a great evening. see you tomorrow. ♪ ♪ ♪