tv Nightly Business Report PBS September 17, 2019 5:00pm-5:30pm PDT
♪ >> announcer: this is "nightly business report" with sue herera and bill griffith. return to send pepper fedex says the global economy is gettingear and its profit and revenue are hurting. great rate expectatio. federal reserve officials begin a two-day meeting on interest rates. and the mixed messages on the economy are creating a lot of confusion. help wanted. amazon is attracting job seek frers across the country as it hosts the'snati largest career fair. those stories and much more tonightn "nightly business report" for tuesday, september 17th. good evening, everyone. and welme. fedex is considered a barometer for the global economy.
it moves so much freight tha t it's able give a clear view of economic activity. but tonht the view cloudy. it reported a double digit drop in profit, weaker span expected earnings and revenue and issued a soft outlook. blaming increase in uncertainty due to trade tensions and the weakening of economic conditions around the world. and that sent the stock sharply lower in the initi after hours trading. frank holland has more on the nd quarter. >> fedex reported profits lower than expected and expecting prophets for the next year lower as well. ceo fred smith setting the ongoing trade war as a primary factor. smith says fedex says quotega tely impacted by a weakening global macroenvironmentriven by trade tensions and processes uncertainty. uncertaiy of the trade war to use smith's own words. tntinue attention to hurt the growth of the u.s. economy eve for a business like fedex actively pivoting to increase focus on the domestic business by starting sevendy a week
delivery in january. for "nightly business report" frank holland. lites turn to donald broten for he haddf . the transportation sector and the glow global health of the economy. he is manage part at bratten capitol thank you for being here. >> thank you. >> one analyst ground grad the stock saying global tensions in the trade war are a pblem but sochl the problems are self-inflicteds well. what do you think? >> well, i think it's time to close the barn doors before the horse gets out. last week we put a report on asia-pacific air freightin sign it was down strong double digits and deaccelerate increasingly a alarming paces. bottom line here is and see fedex has gone from in 90 days from predictinge moder u.s. economic growth -- from growth to moderate growth.
gone from predicting despite cost costs and increasing the co cuts from mid-single digit declines in earnings for the year to 16 to 30% decline in earnings. this is not an alarmimi company. conservative company well run. global impact. appear and the bottom line is they are increasingly concerned because tariffs are terrible taxes, well- >> fedex obviously has more global footprint than other companies in the transportation . but do you anticipe that given what fedex laid out today that we are going t hear more of this type of reporting from some ofer the o key transportation stocks and companies? >> i do. and the reason we do iy v simple. this is 1% of the weight of the key butr is o 15% of the value of the changeable goods economy. driving text hiring
engineerings, investments. they move high value low densi ods in the technolog era we live in they move the driving force of the economy bh globobly and as well as the u.s. ly >> so do you worry about in sector? do the decline - did some of the stocks present opportunities yet? them t are you doing with now? >> well, on a case by case bthis e is definitely opportunities to look at best in bass performers. pu ttom line is you have have a view longer than a few weeks or a quarter to -- because proces the ort-term you see ramatic declines in volumes and even the best in class companies are going to mpstruggle to producements in earnings in that environment. and there is no catalyst to seem to. is to t rates of decline as oenga as we have the tariffs in place. >> donald bratt from bratten capital. thanks for joini ustonight. >> always a pleasure.
>> global economic risks like the ones that fedex outlined are among the issues that federal reserve policke are discussing. the central bank two-day meeting began today with the decisionn from rates scheduled for tomorrow. steve liesman takes a look at what's expected. >> reporter: wall street expects cuts in interest rat amid concerns about economic weakness and the trade where. 0 oh% of the cnbc survey see the fe cutting rates a quarter point afte results of the september meeting. all expecting another quarter point cut which year end. . the problem is at forecast with lower rates come with freduced outlook u.s. growth and increased probability of recession. the chance of a recessi i the next2 months soared to an 11-year high of 32%. according to the survey. it was below 20% for most of aloft year pch groh forecasted decline though 2.2% from 2.5 process 2010 and sinks to 1.8%
in 020 j economisl naroff writes in response to the survey saying trade war that continues to next spring or summer cses a recession likely to spread world with an. not everyonegrees. a senior investment strategist at the philadelphiaoovet trapays recession talk is overdone. yes there are slowdown economic indicators but the robust holiday spending id. goo based on high levels of consumer confidence driving growtst on ks higher. for now spontsz to the survey see slight gains ahead but atntinued low interest. the question is whether fed rate cuts will be enough tofft the negatives from the trade war and global economic weaknesh the h levels of the stock market amid the continued focasts for ler rates, the market is betting the fed is fight.e for "nightly business report" i'm steve liesman. the manufacturing portion of the economy rebounded unexpectedly in august.
up 6.6% in the biggest gains in oil and gas manufacturing. machining h been in recessi this year one reason the fed is likely to cut interest rates again tomorrow. but confidence among the napgs home builders hit the highest level of year. centsment helped by a drop in mortgage rates. but according to the shevey builders are growing concerned about uncertainty from the trade dispute with china. don't look now b now few than one hundred days until christmas 99 to be exact. the most important time of the ers sincereta consumer spending makes up roughly t thirds ofll economic activity and the bulk occurring during the holiday shoppingeason. according to a survey americans this year are ready a for healthy dose of retail therapy. courtney reagan has details. >> with less hand 100 days until christmas two consultant groups are out with upbeat holiday sales forecasts saying will grow 5% above last year
topping $1.1 trillion. alex partner's forecast the sales increase a little bit more than that both forecasts are twell above l year's who will tau sales growth. >> we werep against interesting interesting camps in the midst of a government shutdown and december w also had a really tough time in the market. and so we have a lowerase to compare to. that's one reason the forecast is higher., secoemployment and job growth continues to be good appear that bod well for the consumer. >> this year they warn that while the forecast strongs for a strong season it axe acknowledges unprecedented uncertainty. so i want retail clients to, quote, be ready for virtually anything both this holiday season and into a 2020. >> what we can't factor in is uncertainty. and so our advise to i clien really related to focusing on the element of uncertainty that that are likely to drive consumer behavior oneirection
or the other. and then be prepared to have aa to address those if and when they come up. so hope for the best pb prepare your the wors >> deloitte too acknowledges there are ris to the joyful forecast. >> anything that really takes money out of the consumer's pocket in the fourth qrt is an issue. if we find spis in gasoline prices or other thingsly that re take away fm consumer confidence, that has a tendency to put in the forecast itself. >> theundamentals of the economy are stilltrong. our hope is that we don't talk ourselveso adown turn in the four quarter. >> despite the concerns about the tariffs and the impact on the economy.it ner retail consultant group has shone it sho up in prices consumers pay yet and near expects an impact during the holiday season. and joining us to talk more about the statee of economy is mark vit ner, senior economist at welargo
securities. well, mark, nice to have you here. >> good to be b with you. >> we heard some downbeat news from fed affection early questioner but confidence among key pony componentntf the economy name namely builders is high. as we go to the holid season what to you expect. >> the further you get from the global economy theetter it looks. .u.s. is larnlly a domestic economy. and so we are hding up wel among all the tradeds w that are bla blowing out of the trade war. we are looking for good sales this season. we are up against weak comps a year ago because the retail sales plunge when we had theth sand point sell off in the stenograph market. >> you about the calendar is workinin against taers thichgt is late this year. and i guess you think that means we're seeing more discounting in the month of december. is that the idea. >> thanksgiving comes about as late as it can.
comes o the 28th. meaning cybermonday will occur in december. so the bulk of online leretail will show up in december. that should give us atrong sales this year relative to last year. but a lot of consumers like t t go t stores and look at the merchandise and then come back and buy itnline. with the compressed timing between thanksgiving and christmas this year, it's going to be a good year for brick and mortar retailers too. >> mark, what do he is it do for the f in the decision tomrowgi n what fedex said, there is a global slowdown and doe affect the u.s. what are your expect aches sns. >> well the volume of internationatrade has fallen over thee last year. that's somethi you don't see outside of a recession. i think the fed has to c rates.s. they have to protect given -- give the economy as much downside protection as possible. we think her they are cutrang
s in october and the take a step back and look and see how ings areolding up. but we hae another rate cut in the first quarter of next year as well. >> very quickly, mark before you go. it occurs to me with the trade war and tariffs many re bulked up on inventory early on this year. did they overdo that? is is there a possibility of >> there is a possibility. but i think sales will be up 5% year t year. there hasn't been goods inflation much. i don't think tariffsill be much an issue this year. certainly if the trade warie intens that he is a problem for 2020. but i don't think the trade war is going to show up at retailers this year. >> on that note, thanks, mark. >> great to be with you. and to the market now on wall street. stocks a little changed today. c ahead of the fed meeting announcement tomorrow and retail stocks fell, banks stocks did. energy stocksere down. they were lower on the retreat in price of oil, which we will
get to in just a moment. butir the closing numbers for the day with the industrial average rising 33inints. we're at 27,110. nasdaq up 32, the s&p gafgts 7 today. time to look at the upgrades and downgrades. home did he poet ground graded at guggenheim to neutral. it willar preventn expansion. the firm removed the 230 price target shares fell a fraction to impose that level, 2.21. snap upgraded to neutral from negative at susk hannah. first further s sizing growth. the stock reese 6.5% to 16.83. coverage of match group was initiated with a buy rating at citi, the analyst saying the prarnt eparent company of tc com and tinder could grow sbrengsly i. the price $9 the shares gained
79% to. the makerf oxycontin has its day in court. ♪ the maker of juul e-cigare aes says the sales halted in china tais after they re introduced there. juul vaporizers have been available for purchase online through alibaba and j.d..com. the company gave no reason for the sales halt. juul says it remains committed to providing adult smokers? china with alternative to cigarees. mcisworld's the biggest tobacco market wit 300 million spoker. st oil prices fell sharply after the day's historic rally. the price of domestic crude settled more than 5% lower aefr
the saudi energy minister said said the skingdo oil supply will soon be back online. not spraysingly the unprecedented attacks on the oin industry has the talk of a major energy conference this houston where brian sullivan is for ust. toni >> reporter: the last 48 hours in the oil and gas market tome most volatile the world has seen after word of a massivo take t a saudi facility on saturday, shoek the worldil speaking on monday. th saudis working hard to try to calm concerns, saying the plan to be back onl couple of weeks. and b fully backo production in october. earlier on tuesday, the saudi energy minister newly iant aed and one of the sons of the king came out and touted his country's abity to get back toy' normal so quickly. >> where would you find a country in the whole world that went through this dastating attack and came out like a
phhenix from ashes? none but saudi >>aramco. ut here in houston one of the biggest natural gas conferences in the world t reaction was mixed. everybody was talking about it. some suggestingps that per the market overreactwood big gains on monday. but the head of the worldor leading consulting and research firms at oil and gas says it's not the case. >> they dn't overreact talt at all. yes the price went up 10, 20% but came back. but the attack came at a time when supply versus capacity is limited. it's taken out 5.7 million barrels on a day off and on on top of 5 million barrels per day already off the market for various reasons. >> the question becomes what does it do to the global energy market? do t it add on risk ream yum to prices? well the head of aorwegian liquified natural gas omny told us while it's serious, his belief was that it was more saudi specific than a global
problem. >> i would i would lierk like to think of that as something that is verysu u. it's obviously reasons mind that which i don't think you will find other place t in world. >> the problem, of course, in the swr connected world, more than 100 countries represeoned at therence is that oil and gas prices are linked thgether globally. but t one thing that many u.s. companies ceos hope or the facts that their sto are beaten down so much the last couple years is that this gives renewed attention attention on.s the oil and gas industry opinion the ceo of o making a multimillion dollar business best on u.s. oil and gas. telurien says it will hhlight the american energy revolution. >> it highlights the importance terms ofi can bring in offering the strategic petroleum reserve that even other plays and production as we become one of the largest exporters in the world f not only oill ut for natus. >> about but whatever happens
longtime everybody agrees on one thing the pace of the last 48 hours canan't be sustained and the world will wit and watch for what may be next. for nightly business report froy houston, texas. brian sullivan. a big investor in kraft heinz trims stake. where we begin the market focus with t mpany's secretary second largest shareholder three g kpap owning 20% of all outstanding shares. it took a charge and supply -- and shaly cut the dividenden back in february after receiving a somebody from the s.e.c. over accounting issues. shares today dropped more than 4% to 28.36 only a f dollars off the all-time low. investors got the first chance to respond to corning earnings warning last knit. the specially glass maker lowered the volume for materials in tvs and cablesnd weak
demand stock falling to 28.23. and sonyts rej a call by activist hedge fund third point tto spin sff the chip business. calling it a ctical growth driver for the company. third point has urged sony to sell off sta os in sony financial, spotifien b a other non-core assets. sony shares fell a fraction to 59.94. sea world ceo will be leaving his post seven months after takinghe job. saying because ofsa a quote disagreement over the board's nnvolvement in the decis making at the company, end quote. ansea world's fal chief financial officer will serve as interim ceo. shares down 5%> to 28.52. via com ceo, who will be the head of the newly combined viacom and cbs says the merger will close in december. aybut he also he expected a better reaction from investors especially when what his new company brings to consumers in content. aly braer of 145,000 tchgs
series, 3,600 films, participation in news and sports and obviously entertainment scripted undiscriminated on aob basis. it's a tremendous opportunity. and it really posionss to be a preeminent content prior to th world. >> via com sharesropped more etros to 25.75. after the bell adobe reported better than expected results. but the software merave a weak forecast because it sees growth slowing in the digital media business. . . shares volatile in after hour but closing up the regular session to 284.69. >> bankruptcy proceeding to for purdueharma are under watt i process. as we told you yesterday they reached an agreement in principal to resolve the majorities of the thousands ofin lawsuits agast it claiming it helped fuel the opioid epidemic. ourthouse inat the white plains, new york, tonight.
>> roughlyng three-hour bankruptcy proceeding attorneys for you are purdue pharma asked the judge essentially to keep the lights on a to continue paying employees and suppliers a the bleegers maker of oxycontin ves through bankruptcy proegtd, a muted pret pruru perhaps fro a bitter fight. >> it has pursued by more than 600 sboits flaming claiming it fumed the opioid keisis that's 4 hundred thousand lives in the last two decades. they aim oh give company assets ito plaintiffs. it involves the billionaire ownerhe sackler family known for donations to museums and universities. possibly more payments pending the sale of the overseas company. but at at least 10 states s attorney gener that's n enough and nom some from have named the family in suits. the pure attorney plan to asksk
litigation against the company and curreofficers, other thanes a and directors and employees tdt could shi the sackler "fast money" meanwhile theap family the say the representativiveus td of citi and counties signed onto the deal. one represent seven motly right attorney. >> joe writ >> trying together to get some financial help from the community to help communities and states deal with the problem. >> purdue attor tys sayhey are hopeful more plaintiffs will sign on. for now, the fight continues for purdue and akiler and separately dozens of other drug companies pharmacies and named in the litigation. ri involved in the tobacco litigation leaching leading toway $250 million settle settlement in 998 says in more p mented. >> with tobacco we had the major tobacco companies to deal with. and they owned it fro manufacture to delivery. >> and he notes it will take an enormous amount to address the
opioid kriez pfeffer "nightly business report" meg tirrell. >> coming up, amtzen hangs out the help wanted sign. ♪ ♪ another medical school is offering free tuition wild cornell medicine in said all students who qualify for financial aid will get a ride. covering everything from tuition, room and board, books expenses. while d etors can be among the highest earning individuals they also carryea aebt load. totalling on average $200,000 out of medical >school. finally tonight amazon is looking for workers. a lot of them. largest tog ther the
nationwide job fair to fill thousands of position attention. dedra bosa in arlington, virginia, for us toght. >> reporter: amazon isn't really in the business ofll doing anything small. so today as it holds a career day in six cities across the country, it's not looking to hi just a few people. 000 looking to fill 3 0,roles. >> i'm in retirement currently. and it would take amazon to bring me out of retire zpl amt brickppear mortar stores are going outin of bs. amazon is the future. >> i'm ablooking for warehouse. i have a lot of warehouse experience, drivivi forklifts as well as logistics. so something along that lines. >> candidates here in arlington, virginiare looking for positions beyond the warehouse in marketing, information technology, manageme, and more amtzen moved onthe commerce business into n areas like advertising, groceries and video
streaming. >> atareer day pop-up tents across the country, like this one, where jobin seekers up hours before it opened, a and in fact are still streaming in amtzen is giving out information and acting as career coach. >> the relate t leadership preaciples to the answer that you provide for us. >> but while 30,000 jobs is a larng number, it represents less than 1/20th of the global work firce one seeing the growths deaccelerate signtly over the last few years tp at the start of 2010 amazon's workforce grew 60% year over year. at t start ofhis year, just 12%. certainly the law of large numbers plays a part. but it also reflects sloowng in amazon's core business. e-commerce. and then there i the quali of jobs. skroutny of amazon has risen in the nation's capitol the last few years. democrat candidate bernie sanders has demanded bet r working conditions for warehouse
employees while some workers have gone on streak during peak shopping times. but for many job seekers thef prospect a job atf amazon is ng worth waitin line for. for nightlyusiness report, dedra bosa, arlington, virginia. here a final look at the day on wall street. the dow rose 33 points to 27,110. sdaq up32. s&p 500 gained 7. that is "nightly business report" for tonig. i'm sue her aifr thanks for joining us. >> i'mriillith. have a great evening. we'll see you tomorrow. we ♪ epps ♪ ♪