Reminded of that again this evening when netflix reported itsrt latest qly results. The company has been growing quarter after quarter, addin more subscribers than expected each time, but thats not what the dreaming service undershot its own guidance, blaming price hikes andontentofferings. It doesnt help that the company has been burning through cash to fuel the creation of its own original shows. Not surprisingly, investors were disappointed. They september the stock sharply lower in initial after hours trading tonight. Julia boorstin has more. S reporter netflix sha plummeting on subscriber additions more than 2 million less tha the companyprojected, just 2. 7 million total new subscribers, and in the u. S. Netflix actuallysu lost 130,000 cribers. The company is saying it forecasts more in regions of price increases, blaming the shortfall on the lack of big shows in Second Quarter. Ceo Reed Hastings saying in his letter to shareholdershe expect subscribers in the u. S. To return to more typical growth in the Third Quarter starting with shows like stranger things. Netflix projecting the addition of 7 million subscribers in the Third Quarter, higher than project evidence. For nighy Business Report, im Julia Boorstin in los angeles. Investors had a different reaction to results from dow components ibm. The Company Reported better than expected Second Quarter earnings, even as f revenl from a year ago. For the quarter, weakness in its legacy business was offset by growth in its cloud operations and investors were okay with it, sending it higherrs in after h trading. Josh lipton has the details. One area of focus for ibn investors, those newer technologies like cloud and analytics, though are grouped together in the companys socalled cloud and cognitive io software div and it was up about 4 . Mose catchery says it was a good neer. On the othand he says what we saw this quarter comes from less important areas of thean comp Like Services and global financing. Net net it is why healled it a mixed quarter. He maintains a hold on ibm. Ghtly Business Report im josh lipton in san francisco. On wall street today the focus was on earnings and trade. Stocks were under pressure most of this session, but even further late in the day on a report from the wall street journal that progress on a trade deal with china has stalled over issues involving controversial Chinese Telecom giant huawei. By the close the industrial average lost 115 points. We areown to 27,219. Nasdaq was down 37, the s p slipped by 19. Now, even after todays decline stocks are near those new highs that were set on monday, but as earning season gets underway in earnest, mike santoli asks whether the aging bull market will begin to slow down or get a second wind. Fresh from the dow crossing 27,000 and p the00 passing 3,000 for the first time ever, the stock market is in cghse of another rare milestone, for a further gain of less than 4 the s p 500 will havekoubled its pevel from the prior bull market. In october 2007, the topped 1565, just a few percent above its earlier pea in march of 2000. So a 100 gain from there lies just above the 3100 mark. Only the bull markets of the 1950s, 80s and 90s achieved such a doubling of the prior cycles highest value, so what happened next . The good news is none of the other strong bull mopkets d once they hit this point. The 50s boom wldltimate rise nearly 200 from the old peak. In the 80s, the ultimate game was 140 , and the stunning rund in the 90s deliver better than a 300 stuurge from the 19s peak. Once it got to this milestone in the past concern started to build it was overheating. The 80s this threshold was reached in early 1987 the furious rally that preceded the october market collapse that year which quickly recovered but rved as a traumatic setback. In the 90s the point came late in 1996 just as the fedsla an greenspan suggestedrr iional exuberance gripped the market, yet stocks continued higher inl volaashion for another three years thereafter. The more immediate issue now is the markets valuaon after a tenyear bull run. At nearly 20 times the past years earnings, the s p 500 is on the e,ensive si suggesting longterm returns from here will likely be but for now, investors are pleased the fed is likely to cut rates to prolong an economic expansion and a corporate profit cycle that he already humbled the skeptics for years. For nightly Business Report, im mike santoli at the new york stock exchange. Focus wls on the transportation sector after csx issued weak guidance, which you might remember we told you about last night. The stock fell 1, its bigge oneday drop since 2008, and the has some wondering if conomyst sector of the warning of a freight recession. Frank holland has that part of the story. With unemployment near record lows, inflation a nonfactor and retail sales rising, all signs are pointing to a strong u. S. Economy. The transportation sretary sector may be pointing to something el. Railroads and oth logistical companies are the life blood of the company, moving goods across the country. The more ty move, the stronger the economy. Is happeningt wha at one of the biggest railroad operators. The ceo of csx warning business wont be as strong as expected for the rest of the year, leading to concerns of a potential freight recession, an economy as a u. S whole is slowing down. The present economic backdrop is one of the most puzzling i have experienced in my career. Any of our industrial customers volumes continuing to show weakness with no concrete signs of these trends changing. Csx isnt alone. Night swrift, the largest trking company in the u. S. , lowered Earnings Guidance for the year, setting an over capacity of trucks on the market, jb hehunt,. S. Leader in container shipments by truck, ell more business than 7 in first half of the year and its nonpaid loads thats empty trucks increased by 16 pirs f for the quarter. Tariffs and trade tensions disrupted normal loads and led to backups at warehouses. However, contract trucking rates are expected to fall through the rest of the year, possibly a sign of a broader slowdown. Tomorrownion pacific reports earnings. It is a major rail operator at west coast ports where imports from china a brought in. On friday kansas city southern, a major railpetor for trade from mexico. We will be watching closely for what these Companies Say about their businesnd the freight market as a whole. For nightly Business Report, im frank anho joining us now to talk about what hehe sees aad for the stock rket, phil blancotto back with us, ceo of asset management. Thank you for joining us. Thank you for having here we are, near alltime highs for the stock market and yet certa sectors are slowing down. What do you make of the dichotomy here . It think an unusual event. Think about it. We had no Earnings Growth at all this year, probably negative Earnings Growth for the second arket isyet the stock up over 20 . What it tells me is theres real weakness in the underpinnings of the u. S. Economy, note in consumer. Thats what is holding it up, doesnt mean arrecession. Ass the ability to grow company earnings, it has weakened out so i have concerns about the stock market. You said unusual when describing this economy. How do you advise your investors in this type of market . Eu move toal. We have made a lot of money this year and over thisul amazing market, nearly doubling, if you made those kind of returns and theyre not normal to make this kind of return on a regular, consistent basis, take some profits. Move back to aeutral position and then lets see what happens with the fed, with china, with the earning cycle, with the consumer, with employment, all of the things that matter to t improvement of the economy. But for now, take some money off the table because there are signshat were slowing down. You just named a few. We certainly heard from plepplep plenty of compans that attribute some ofntheir uncerts to the trade issues, but how much will the fed help if we get a fed rate cut ler this month . The feds nan date is confusing right now. Because on one hand weave full employment so that mission has been solved. On the other side they want to mae inflation is stable, not runway way, and we dont have run away inflation. The concern is that we dont have enough inflation. For that reason theres a chance they cut. I actlly dont think they will, i think they will pass one more month. Tiwever, the fed could come in andlate by creating a stronger borrowing cycle. The mart needs a catalyst. If Interest Rates go down, maybe the consumer starts to buy homes and lever up and buy more goods, corporations issue more debt to grow theirm bot line rather than maintain it. So the fed could throw a lifeline byowering Interest Rates. Im not convinced it is enough to drive the market higher in the short term. Ph you have already outlined some concerns for the market. Anything you think at leastho i the term other than the fed cutting Interest Rates that might further stimulate the market . Thats a great question. Today there was a number watching this week,boumber retail sales. You see, the one thing we forget is 70 of our economy is dven bys, the consumer. The consumer has a high savings rate right n. If t consumer starts to spend and starts to borrow, which we saw a little bit of that this week, thats a game changud. Thennly we have a catalyst to drive things higher. Gettinghat with the fed maybe a little bit easier and the potential of a tariff deal ig thats a one if there is some negotiation that prolongs, is going to take some time, those three things coupled together would drive the market higher. Not one of them by themselves i dont think, but if we get relief by all three we will go higher. I am just not a expecting it of now. Phil with landberg fillman asset management. Good to see you again, phil. Thanks. Thank you. Time to look at some of todays upgrades and down grades. Con cophillips up grated to buy from neutral at bank of america, merrill lynch. The analyst cites the companyse exposure to blunt oil market. The price target is 75. Shares rose a fraction to 57. 78. Hershey was upgraded to el neutral from at goldman sachs. The analyst cites the decision by rifle mars t raise prices. The price target is 142. The stock rose 3. 5 to 145. 71. Kb home waso upgraded outperform from inline at ever corp. Isi. The company cited improving demand and focus on entry level housing. That firm says it is well positioned heading into earnings reporting r season. E slightly. Wells fargo was downgraded to neutral from out performing, mcquarry with the analyst citing the bank aggis higher Earnings Guidance. The price target 47, the stock 45. 21. N a fraction to still ahead, king dollar, the imf warns that thenc cur is too strong but what does it mean for you and the things you buy everyday . Zblurp new reports point to agi sl housing markets. 9 last month. It is the lowest level in two minutes. Permits are often viewed as a sign of howh construction is in the pipelae. Eparate report shows that foreign purchases of American Homes fell 36 from the previous year. The National Association of altors cites slower Economic Growth abroad, tighter capital controls in china and also a stdonger u. S. Ar. Elsewhere, the federal reserves latest assessment of the econom b called thege book, was released today and it showed wide spread concern about tariffs. Businesses across the country said the trade issues were creating uncerta and that uncertainty may be starting to delayusiness investment, rising input and labor costs were also an issue as washe difficulty in finding workers to fill open positions. Despite those concerns though, the survey found that the econom did expand at a modest pace from mmay through early july. The International Monetary fund said today that the u. S. Dollar is overvalued by 6 to 12 . That analysis wasart of the organizations annual assessment of the currencies andof deficit ajor economies. As you know, President Trump has often saiol thatr strength is hurting our economy by slowing u. S. Exports. Dan ricotto joins us to talk about what a strong dollar means for you. Welcome to nbr tonight. Thanks for joining us. Hi, bill. Hi, rahel. Ho are you . For years treasury secretaries have said thast a ng dollar is in the best interests of the u. S. Economy, but now theres a lot of hand ringing about that. Is it the case or not . Itepends on whos interee int you are talking about. From a nsumer, a strong dollar is terrific, like getting a pay raise without any more money in a paycheck. Go to a storeahel to buy kborimportedth goodsre che cheaper. For you and i, a strong dollar is a good thing. It ripples through and the overall pressure on inflation. Again, we would think it is a good thing, at least in the short term. Finally, grab your passport, go on sale becse europe is on sale. It is a great time to be a tourist with a strong dollar because your dollar goes further overseas markets. Dan, what about from corpeations . We hlready heard from a number of companies this earning season point to the strong u dollar, how it is hurting their earnings. How does it Impact Companies . Yeah, bingo. So for every winner maybe theres aloser, and in this case when we talk about companies, the reality is that most ofur companies now are multi naonal, you know, Global Companies like nike, for example, where they get a big t percentage oir sales from overseas consumers, overseas customers. Ess what. If the dollar is stronger, that means those overseas consumers are probablo going buy less of those products, and even if they buy the same amot of those products, when we convert it back to dollars those companies will fee it in the bottom line because theyre getting less dollars for that product. And many times now with the dollaris doing what i doing and other currencies around the world, companies have to makeon the deci do we make things here in the u. S. Or do we make them overseaht where it me cheaper. But now you have these tariffs to deal with as well. Exactly. So it doesnt make a cfos job eaany er, bill, right . This stuff is complicated. We like to think of it in the short termage long term. In the short term it benefitser ans, no doubt about it. In the long term it make goes our businesses somewhat less mpetitive and in fact we might lose jobs in the long term, right, because ase the jobs m overseas or u. S. Factories shut down, clearly it is not a good mhing. So in the long t what could be a Virtuous Cycle in the beginning becomes a vicclus later on. Dan ricotto with quaker wealth management. Good stuff on dhe stronglar. Thanks for joining us to night. You got it, guys. Thanks. Have a gd night. On the consumer helps result at bank of america, and thats where we begin tonights market focus. The bank reporte better than expected earnings and revenue thanks to a stronger retail nking performance, but the companys Net Interest Income fellel slightly wall streets expectation possible hit from rate cuts from the federal reserve. Shares were up a fraction to 29. 19. Amazon is facing an investigation by the europeanon commisnto the companys dealings with third party merchants. The commission plans to look at whether amazon isin bre antitrust rules by abusing its power as both an independent seller and retailer of its own products. Separately, amazon says this years prime days exceeded last years black friday and cyber monday salcombined, selling more than 175 billion items. Shares were down a fraction to 1,992. 03. Cnc financial Beat Estimates thanks to a rise in income and loans. They saw the portfolio increase more than 6 in the quarter, l by commercial lending. The stock was up a fraction to 139. 6. Strong borrowingelped u. S. Bank corp. Results top expectations, residential rd loans and credit were key in those categories. Stock rose more than 2 as a result to 54. 22 today. Microsoft ish partnering w at t in a multi year cloud deal reportedly worth more than 2 billion. At t will now use microsofts azure cloud system as well as a microsoft package that includes windows x and office applications. Software that both companies will also collaborate on future 5g products. Both microsoft and at t shares were down a fraction in todays trade. Then afterhe bell ebay posted better than expected earnings, but its gross merchandise volume fell. The company did however raise guidance for down the road. Shares initially rose in after heurs trading tonight, but they did close regular session down more than 2 to 39. 03. A stifling heat wave is taking shape across large portions of the country from the plains to new england. Nearly 90 of the population could see temperatures oft at le 90 degrees at some point over the next week. Several cities including chicago, detroit, new york and washington, d. C. Could see the highest temperatures of the summer. Joining us now to discuss the Economic Impact is paul walsh. He is global director of weather strategy with ibm services. O paul, thanksch for being with us. Hi there, guys. When do we start to see the o economic impac the stifling heat . Well, yes, it is a great question because we actually start toee the impact ohe heat before the heat gets here. Participate of the reason is because the weather forecasts are getting really, really good and most of usre Walking Around with a mobile phone, so ee are all expecting it. So peore already planning for this heat. Of course, by the time we get into the weekend it is already hot now frankly, but by the time we get into this w be were going to be seeing the hottest temperatures we have seen in several years in the big cities in the northeast, so it will be a very, very significant impact. But it is not going to be as big an impact as itould be if it lasted longer than what were currently expecting. Give us an example. I mean people who work out side, out there for be long or, you know, other areas where the heat iightact various companies. Yes. I mean, of course, the heat is going to impact everythi