Transcripts For KQED Nightly Business Report 20240714 : vima

KQED Nightly Business Report July 14, 2024

300 points, essentially gaining back what was lost yesterd wh the fed cut Interest Rates and then hinted that there might not be any re. But everything changed at midday when President Trump tweeted that he plann to impose another 10 in tariffs 300 billion of chinese goods, and the Market Reaction was immediate and sizable. The industry avera fell 280 points, 26,583. The nasdaq was down 64. The s p slipped by 26. Companies most vulnerable to higher tariffs were especially hit hard, incding caterpillar, boeing and apple. Eamon javers starts us out tonight from the whitehous reporter President Trump spoke to reporters at the white house today after issuing that sees of tweets suggesting hes going to be raising tariffs on chinese products coming united states. He said he wasnt concerned at all about that stock markete selloffw this afternoon in the wake of his announcement. He said he expected that, and effectively h effectively here he blames the f stock marke not fully understanding what hes doing in terms of his tariff strategy. I asked the president on theh soawn today why 10 , why not 25 , why not 5 . Here is what he said. I did more than anybody thoughth the first 250 billion and the 10 is for a shortterm period, and then i can always do much more or i can do less depending on whatit happensh respect to a deal. But im very happy the way it is right now. Reporter the president leaving himself a littl exibility there to raise or lower the tariff rates as he sees fit. That all puts a lot of pressure now on this meeting in washington, d. C. In Early September between the u. S. Ande ch sides. Negotiators will meet again facetoface. Will this tariff p increas pressure on the chinese side to come to a deal or will it drive them farther away from the bargaining table . Thats the big question heading into for nightly Business Report, im eamon javers at the white house. And the fear among investors is that additional tariffs could slow growth globally. That concern played i out the oil market today which relies on demand from around the world. The price domestic crude settled about 8 lower in days session, its biggest scline since 2015, and that pressuredres of exxon and chevron as well. The retl industry is one of the most exposed to china. Thats why it has also been one of the most vocal about its opposition to tariffs on chinese imports. As you will see here, the Retail Exchange traded fund, which is made up of more than 80 retailrelated stocks fell 3 today in response to the president s tweet. Courtney reagan has more. Reporter many retailers have been wking on diversifying supply chains outside of china for years and accelerating those plans when possible in recent months. China is still the number one country where u. S. Soldd appare footwear is made. The National Retail federation saying in part today, these additional tariffs will only threaten u. S. Jobs and raise asts for america families on everyday goods,nd the tariffs imposed over the past year havent word. Best buy shares down more than 10 today in reaction. In may, then ceo lee said it was premature topeculate on the impact of further tariffs, adding it is unclearouhether list will actually be implemented, what products would be included, at what rate and when. Shoe seller steve madden shares lost more than 9 . Nearly all othe products it sells in the u. S. Are made in china. But even retailers and brands with lower exposure to chinese manufacturing liketapestry, the owner of coach and kate spade an copry holdings when owns michael coarse and jmy choo, sold off on the news. For nightly Business Report, im courtne agan. Investors were not expecting to start august this way, and if history is any guide it could become trickier to navigate. Bob pisani is at the new york stock exchange. Th talk about a tough setup for august. Market sold off today on a string of twreets from President Trump signaling more tariffs are coming next month. Even before todays move history has notke l kindly on august. It is the worst month for the dow and s p since 1987. The s p might be up 20 , but earnings are flat, making stocks lookig expensive now. Trade tensions are oiously ratcheting up. Theres little cla oty the Global Growth story in general, and a Federal Reserve chair jay powell made clear at his press conference yesterday, future rate cuts from the fed is not a one thing that made it easier for the bulls to stay bullish is lower Interest Rates. The markets are become reliant on Central Banks to provide a back stop to slower global owth by cuttiates around the world. Bulls on wall street are arguing that the u. S. Economic data mains strong for the most part. Interest rates remain low, and despite powells reluctance to endorse a seriesf rate cuts yesterday, Central Banks around the world are in easing mode. So the perceived benefits from the fed cutting rates may haveh passed and could be a problem for stocks in august. For nightly Business Report, im bob pani at the new york stock exchange. Lets turn to Brad Mcmillan to talk more about todays market and his expectations for the month of august. He is chief investor officer at commonwealth financial network. Brad, good to see you again. Lcome back. Hank you for having me, bill. You called todays market on,loff a sentiment reac not a fundamental. What did you mean . Well, when you get tofs kind news item where the president is tweeting out, you can a seepullback. The market gets disappointed. Everybody sells first and thinks later. Thats what we saw yesterday, only to see the market bounceback. Since the fundamentals are solid, thats probably going to happen again. Indeed, because we do have a lot ofk headline rtill out there, do we not . Not only the trade situation, least the debt issue is off the table, but we still have brexit and we stillav slowing Global Growth. Slowing Global Growth i important and so is brexit potentially, but when you look at u. S. Stks, they track the u. S. Economy. The u. S. Economy basically depends on consumer spending. We s Consumer Confidence bounceback close to recentgh we see job growth and wage growth continuing. The consumers are k going top spending and thats going to give us a cushion that should limit any damage from thead nes. What do you think chairman powell thought of todays tweeth i mea said made it clear yesterday during his News Conference that trade is something that theyre watchin very carefully and theyre learning as they go. And ihink thats i think looking at chair powell, he pointed out some of the risks and they actually said explicitly thats why they cut rates. Ybut the reason t not saying theyre going to cut rates more and this is something that isnt really appreciated is because they see the economy as basically solid. We dont typically see sustained market drawdowns without a recession. A recession looks fairly distant. If you are a longer term investor, what do you do and where d you look for prices that are reasonably valued at this point . Think you sit tight. I think the u. S. , even thoh it is pricey byar sta for maybe four or five years ago, it is still fairly valued by the standards of the past five or six years. In fact, with Interest Rates low, you can argue that stocks remain a good value. I still like stocks. Brad mcmillan with theth commonweinancial network. Good to see you again, brad. Thanks. Thank you, bill. To the economy. Manufacturing activities slipped in july to its lowest reading in three years. The institute for supply management points t slowing Global Growth and those trade tensions. A separate report showed the Construction Spending fell mane 1 in june as investment in private construction dipped to its lowest level in 1 1 2 years. And the number of americans filing applications for Unemployment Benefits rose last week, which was just about in w lih estimates. And in washington, the Senate Passed thay tr budget deal that made it through the house last week. The leglation also lifts the debt ceiling and raises spending by 320 billion over current levels. It nowreoes to thedent and he is expected to sign it. It is time to take a look at some of todays upgrades and downgrades. Morgan stanley resumed coverage of ibm with o anrweight rating. The analyst cites the benefitso ibms acquisition of red hat. The stock w up 1 to 150. 32. Rh, the retailer fasmerly known restoration hardware, was upgraded to buy from under perfm at bank of America Merrill lynch. The analyst cites price hikes, product momentum and less risk to margins. The price target is 165. Despite the upgrade though, the shares fell 2 to 136. 08. Corning was downgraded to neutral from positive. The analyst cites execution missteps and a lack of confidence in the companys abilityo deliver earnings growth. The price target is 30. The stock fl 3 to 29. 74. Still ahead, the Television Industry fac a new threat, and it is fighting back. Verizons latest Earnings Report topped estimates and the company said it added more phonb subss than expected during the quarter verizon pushed its deployment of the next generation 5g network which the ceo says will be e country to half by last year. Once we launch one or two markets and see it is really orking, now we actually are deploying in all markets with all vendors on infrastructure and on four dferent devices. It actually starts working very well. Stock fell slightly in todays session. General motors posted a solid quarter, rep than expected earnings thanks to Strong Demand in north america. That helped offset its struggling international operations. Phil lebeau takes a closer look at gm bottom line. Reporter gms tale of two ina,ets, the u. S. And shows the weakness in china is more than offset by americas insatiable appetite for trucks and suvs. Hat you areeally starting to see is the earnings power of our truck franchise that is starting to show through in our results, and thats really driveny favorable customer reception to our silverado and sierra pickup trucks. Reporter gms new pickup truck, often selling for close 50,000 a piece, are in demand thanks to strong Consumer Confidence, low unemploymen and the fact more buyers are moving into a truck. In the first half of the year fiat chrysls ram brand out sold silverado. Gm says it will avoid an centive war in order to move new versions of the silverado. Despite their pricing, headwinds that might have been out in the market, you can see how we delivered and our market are is up. So what we need to do is keep focusing on our plan and executing tothat, and we will continue doing that. Chinaorter meanwhile, in where automakers are feeling the effect of an economy slowing down, gm profits fell 60 last quarter. The company is oimistic business in china will stabilize thanks to a wave of new models. While gms business in the u. S. Is strong right now, it faces a number ofs potential challen in the second half of 2019, including negots with the united autoworkers. That contract ends in september. Many believe that for the first time in two decades there is an decent c we could see lengthy strikes at u. S. Uto plants. Phil lebeau, nightly Business Report, chicago. The theme park busins is strong and today universal announced plans to build a fourth park in orlando, florida, to be called epic universe. It is thele siargest investment the company has ever made in its theme park division. The announcement occurs just a disney is about to open its secondme star wars t park in orlando. Just a reminder, Nbc Universal is the Parent Company of cnbc prograroduces this but the Entertainment Industry is also dealing with a new headache, and it pitting broadcast networks against a video streamingrt staup. Julia boorstin has the details. Reporter the big four media networks, cbs, abc, Nbc Universal and fox, are filing suit against a free Video Streaming Service called low cast for failing t pay n transmission fees or obt permission to do so. Low cast is an internetbased service, whichns you can watch local stations through a web browser or your mobe phone app instead of having an antenna in your home. This comes five years after the Supreme Court shut down a similar service, ario, saying its tv streams violated copyright laws. Unlike areo though, low cast is a nonprofit so Founder David good friend says copyright laws protect its service. The provision of the copyright act we are using was designed t make sure a nonprofit could boost the availability of that overtheair signal. Thats all we the only thing thats different is we do it locally on the internet. By locally i mean you have to be inside the local market in order to get our service. But the mediarg giants aue that low cast is doing mor than just that, saying it strips out nielsens ability to calculate ratings and that it requires users to provide an email address or log in with a facebook account saying, quote, nformation is itself highly valuable to low cast and it is one of the many forms of commercial advantage that low incast is sec for itself while it serves the commercial purposes o the two pay tv players that has sustained low cast and extended its reach. The broadcasters point to low cast ties to at t and dish, which direct their subscribers tose the service during blackouts due to contract disputes with the at t recently disclosed a half Million Dollar donation to low. Ca the suit alleges that founder goodfriend, a former a dish twektwe executive and lobbyist, secured a loan from them. If at t orpa any other c makes a contribution to low cast, that doesnt somehowrm une our nonprofit status. We are abiding by the irs federal rules, by new york state rules for nonprofits. The notion that i as a former dish executive or lobbyist f dish network somehow undermines our case, look,e i h begged dish network to make contributions and they always say no. Now t courts will decide whether this startup nonprofit which reportedly has 250,000 users can provide local broadcast tv for free thrgh the internet. For nightly Business Report im Julia Boorstin i los angeles. Kelloggs shares go snap, ackle and pop. Thats where we begin tonights market focus with thel cer making topping estimates thanks to an increase in popular brands ke rice crispies treats, pringles and pop tarts. Shares rose more than 9 tod to 63. 63. Clorox posted mixed results. They beat earnings expectations but fell short on revenue. The household products maker saw increased sales in its cleaning Products Division but iued weak fullyear guidance due to challenges in its charcoal bags and wraps businesses. Shares fell nearly 4 to 156. 14. Cignas Quarterly Results were better than expected thanks to its Health Services unit. Even thoh the Health Insurer said that costs were higher than expected, it did raise ts fullyear forecast. Shares fell more than 1 to 167. 56. Dunkin brands saw mixed in the u. S. Ales with an increase at its dunkin stores, but then aecline at its bass kin robbins locations. The Company Raised fullyear earnings guidance. Dunkins shares dropped 1 1 2 to 78. 96. Taco bel pizza au and kfc helped yum to post better than expected results. Shares re almost 4 to 116. 94. Yeti topped estimates thanks to an increase in drink ware, coolers and equip innocent sales. The kwp raised its full year outlook but a builder than expected build weighed on the stock and shares dropped nearly 7 to 32. 34. Archer, daniels, midland missed earnings and revenue targets due to a rough winter in north america. The company also said it s hurt by the u. S. And china trade tensions as u. S. Crop exports struggled. Still, shares were up araion to 41. 15. Beyond meat cam back to wall street for a second helping today. It issued new shares of stock, a socalled secondary offering, priced at 160 a share. Thats far above its initial ipo price of 25 a share just two months ago. Shares of the plantbased Protein Company fell 10 in todays session. Meanwhile, beyond meats rival impossible foods and burgeking announced that the impossible whopper is going to be rolled outio nlly beginning next week. It all shows just how these plantbased burgers are changing the fast food industr as we know it. Aditi roy is in redwood city for us tonight. Reporter introducing the impossible lwhopper,nching at more than 7,000 Burger King Stores nationwide nex week. Its impossible foods largest nd a big ip to date win for the company i its race against competitor beyond meat over deals with restaurant chains. I think we have the best product of anyhe kind, best burger of any kind on the market, butt is really for consumers to make that call. Reporter plantbased Meat Products from impossible foods andeyond meat are changing the fast food industry. The two companies are quickly landing partnerships with some the biggest nationwide food chains, including carls jr, del aco, white castle and r robin. We think the big win here is bringing this to the masses at a compelling iice. Somustry watchers believe it is not a fad. Barkleys says a can take a some bi10 built ou 140 billioninlobal meat dustry and nearly a fifth of allamericans arerying to

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