this is "nightly business report" with tyler mathisen and susie gharib brought to you in part by. >> thestreet.com, up to the minute stock market news and in depth analysis. our quant rating service provides objective ratings daily on over 4300 stocks. learn more at the street.com/nbr. stocks slip, investors get the jitters learning what the federal reserve officials had been talking about, dealing back on the massive stimulus program in the coming months. that sent stocks lower and bond yields higher. turning a corner, j.c. penney s says sales trends are improving heading into the critical shopping season, but as the retailer returns to promotional roots, will deep discounts take a bite out of the

bottom line. and miami voice vice, the comeback trail and the city at the heart of a nationwide crack down on the bond market. that and more tonight on "nightly business report" for wednesday, november 20th. good evening everyone. i'm susie gharib. >> i'm bill griffeth. tyler is off tonight. if there is one thing the markets are arounded about right now, it was revealed today. the federal reserve and when the central bank may begun pulling back on the massive stimulus program. the stocks made a u-turn after minutes from the fed's latest policy meeting were released showing policy makers could be closer to deciding on when to start scaling back on the bond buying program. concern that the fed's easy money party could be ending, that sent the dow on a 100-point swing to the downside but the sale off did cool and at the end of the day the dow was down 66 points and nasdaq off by ten and

s&p lower by six and hints about tapering sent the ten-year treasury note spiking to as high as 2.8%, the highest level in a month. so what exactly was in the h minutes of the fed's october meeting and why are policy makers so divided when to reduce the stimulus program? steve liesman explains. >> the fed's october meeting showing this committee members general he believe the economy will improve enough to warrant a reduction in stimulus to the economy. specifically, they could reduce the amount of assets they purchase in quantitative easing if the fed's forecast for gradually improving economy comes true. the fed is deeply divided overcome mun case strategy as it fears stocks and bonds could sell off sharply and is trying to convince markets, if it does taper, that does not mean the central bank will raise interest rates any time sooner. ben bernanke struggled with the problem for months and there

doesn't seem to be easy answers. we learned the special emergency october 16th meeting the day before the government was supposed to default to discuss what to do if that default happened. it's suggested it could take access in the event of a default. economic effects are temporary and limited. for "nightly business report", i'm steve liesman. well, joining us now to talk more about the fed, bruce, chief economist at jp morgan chase. thanks for being here. >> good to be here. >> based on the data you see, the fed seems really divided about when to start the tapering. when do you think it would be appropriate? >> well, i would say conditional on the economic news continues to play out in a solid fashion, we think the fed will taper in the first quarter. we think the most likely outcome would be a january move.

>> you know, bruce, they have said in the past, fed officials that they were going to have it dependent on when they were going to taper on the unemployment rate, where it would be standing, 6.5% and other numbers. now it sounds like they might be talking about a calendar date. does it matter to you and how would this play out with markets and investors? >> i don't think it's a calendar date. the fed is tells us they want to taper. they don't want to continue to expand the balance sheet and want to do it based on their assessment there is sole jid growth and substantial improvement in the labor market. there was fears with the data and also with the concerns about washington, and also, something we've seen as the fed concerned that the market was linking tapering to rake's guidance. what we've had in the last number of weeks is better economic news, the fears around washington fading and the markets price the rate

expectations, all of which puts them back on track for tapering if we get good numbers in terms of the labor market at the next one or two reports. >> but ben bernanke is constantly having to defend the fed for sending what is perceived to be mixed signals. one in the spring, setting a timetable and the argument and now talking perhaps about changing the benchmarks they will use to determine when. is this a fed trying to deal with changing market conditions, or is it a fed that's losing credibility? do you think? >> i think it's a fed that's struggling to hit the right notes on a communication strategy, which has had two different pieces to it. one has been about the quantitative easing and that's been about momentum in the economy. the other has been about rate guidance, which is about inflation. it's been about getting the unemployment rate down and

healing the economy. they tie the two closely tonight and the delinking they are trying to do is complicated and they are struggling a bit, but i actually think they have gotten traction in the last month or two. they have been helped also by the fact that janet yellen, someone inside the committee will be the new chair. i think they are likely to be successful here, although, the difficulty of separating as we move towards tapering is clearly going to continue to be an issue. >> earlier this week, vice ma chairman dudly said he's hopeful the u.s. economy is recovering. what do you see in the economy? >> we're encouraged by the fact momentum slip that looked like it was taking place in the summer has apparently been reversed and we don't feel like we're having a big negative hit from the shutdown. so we're enkourpged the economy is holding okay here. we think it will be a grinld.

the economy and underlying pace running 2% and absorbing higher interest rates. it will take awhile before we get good growth. we think 3% growth will come, sometime in spring, summer 2014 and unemployment rate will be down to about 6.5% if our forecasts are right. >> one met trick we haven't talked about is inflation, which they are also wanting to raise before they start thinking about tapering. lately, the inflation data have been very tame, gold prices are coming down, oil is hitting multi month lows. where do you see inflation now? >> i think we got inflation globally and in the u.s. at close to record lows. i think it's very important to highlight that because low inflation is one thing that helps the fed separate tapering from rate guidance, low inflation is a key issue for when to raise rates. it's not the key issue when to begin the tapering. low inflation will be helpful

and we expect it to stay in the low ones. >> bruce, chief economist at jp morgan choice. bruce just talking about janet yellen and we have an update on the nomination to be the next chair of the federal reserve. republican senator, corker, one of yellen's -- as a member of the senate banking committee, corker says he will vote to support her nomination tomorrow sending her bit to the full senate. onto the economy, retail sales were higher than expected in october despite that partial government shutdown. commerce department says overall sales rose by 4/10ths of 1% with americans spending more on automobiles, clothing and furniture and the so-called core sales talks out the volatile spending on gasoline and food. that rose more by .5%.

j.c. penney says losses quadrupled last quarter. look at shares of pennies today surging 8%. the reason, it's starting to stabilize and sales look to be back on track. courtney regan has more. >> reporter: sometimes reporting a wider than expected quarterly loss again doesn't matter so much to wall street. it's all about expectations going forward, especially when forward is a high stakes holiday season. j.c. penney stock price jumped because the struggling retailer says sales and traffic trends are getting better. on the earnings conference call, the ceo says j.c. penney is quote seeing unmistakable signs and our turn around is on track. that may be true, j.c. penney has a lot of work left to do. >> j.c. penney lost 5 billion in

sales and it's not going to be easy to get that back. the question is the time frame, how much they can get back and are they going todu liquidity, into 2015. >> reporter: they haven't turned a profit in years and they lost 10 million household shoppers. alman is trying to fix issues, he says 2/3rds have been addressed. online sales have shown improvement and j.c. penney achieved the best customer service scores in company history during the third quarter. the key to retracting shoppers is pricing. jc person knee turned to promotional roots and customers love the progress, but investors are concerned about profit margins. the deeper the discounts, the less is left over to the bottom line. because every retailer is

offering bigger sales than last year, j.c. penney likely feels it has to offer lower prices. j.c. penney had to sale below cost to clear merchandise that hasn't been well received by shoppers. investors are cutting the company a break on holiday hope but wall street's christmas stir lit will fade fast if j.c. penney can't deliver. the sales numbers for october along with jc pen neep may be pointing to a healthy holiday sales season. at least that's what the head of the national retail federation said today, adding u.s. consumers seem to have found a higher level of confidence helped in part by falling gasoline prices. we got lots of fresh data about housing and it's not good. applications for new mortgages fell with mortgage rates edging higher and sales of existing homes declined by 3.2% in

october. the national association of realtors blames higher prices and fewer homes on the market for the slowdown. as diana olick explains, one region of the nation, the west is getting the blunt of it. >> reporter: it may be the warmest region in the nation right now, but home sales in the west are in a deep chill. >> in the west region there is a significant shortage of inventory. you have buyers looking for the right home unwilling to commit. >> reporter: while supplies of homes for sale are down across the nation, california is one of the leanest. the number of homes for sale in san francisco fell 26% in october from a year ago. in san diego supplies are down 12% and los angeles, down 6%. those lean supplies are pushing prices skyward. the median california home price in october was $357,000, up over 25% from a year ago.

that was the 20th consecutive month of annual price gains and the 11th month the gains exceeded 20%. >> i think people feel. >> reporter: ceo of real estate site red fin says higher prices hit not only consumer pocketbooks but consumer confidence. >> you have home prices dropping 50% in 18 months and now they are bouncing back 20% in 12 months. people are competing with wall street speculators, interest rates are going up and down and people are feeling really nervous. they are really jittery that they weren't a decade ago. >> reporter: competition is cooling. the number of listing resulting in bidding wars dropped in october for the 7th street month according to red fin. that's good news for buyers, but not for sellers. the expectation or hope is more homes will come on the market in the new year in time for spring, but will they sale? phoenix saw a 32% jump in the

number of homes for sale this fall but with prices up over 40%, sales actually fell, affordability clearly the culprit. for "nightly business report," i'm diana olick in washington. >> you can read more about the west coast real estate market at nbr.com. if you're looking to get a new home loan or refinance the one you have the paperwork looks easier. the protection burro issued a new rule requiring banks and lenders to use new mortgage forms that make it easier for borrowers to understand and locate critical information like interest rates, monthly payments and closing costs. it's about time. still ahead, would you buy amazon brand chips or soda? find out if the online retailer is ready to launch a line of private label food products, coming up.

amazon.com, the world's largest online retailer is gearing up for a busy holiday shopping season and may be getting ready to offer consumers something new, groceries and other household hiitems, but something different, with a private label. >> reporter: amazon makes its own tablets and sales its own keyboards and batteries but as they experiment with the grocery business, it looks like a much bigger push into private label goods. a search of the company's job listings shows the company is looking for product managers, a

supply chain manager and food safety manager to oversee an upcoming line of products. they mention a consumables macment team that will handle branding and sourcing. the strategy would make sense as they set sights on groceries, the most popular items include meats, snacks and peanut butter, in total food and beverages are roughly 100 billion-dollar annual business. target had a lot of success with archer farms brand and walmart is trying more, too. the best thing amazon creates great products and saves in the process by cutting out the middleman. >> you can make a huge mission stake. it could be salmonella in the peanut butter, bad design, a product that doesn't taste right and you didn't test it long enough and launched it full blown and gets to the consumer like new coke did, not that that was a private label and the consumers goes, no, i don't think so.

>> reporter: amazon hasn't run into a lot of those problems. they are expected to do 75 billion-dollars of sales but just barely expected to make a profit. if they keep prices low to a private label strategy, that could help growth and help the bottom line. a slow farm economy didn't stop deer from posting an earnings beat today and that's where we begin tonight's market earning focus. the net increased 17% in the fourth quarter. the farming construction equipment maker issued an unexpectedly upbeat outlook in 2014 because of a construction rebound. the good news sent shares to $84.52. the third quarter profit missed the mark and even though lows raised the full year outlook the forecast below analyst expectations. low's shares 6% to 47.$47.33.

jmsmuckers, they missed profit estimates despite lower coffee and peanut commodity prices. the stock plunged 6.5% to $101 and change. weak demand and a stronger dollar hurt third-quarter sales at staples. it returned to a profit in the past three months but earnings came in below estimates. they are siting growth online and staples shares fell to $15.10. weak demand hurting caterpillar. the mining equipment said machinery sales have fallen in the last three months. because of sluggish business they are closing smaller plants and laying off thousands of employees. no surprise the stock slumped more than 1% to $82.68.

at least one investor thinks aerop ostale, sent shares of the chain up by 5.10%. the world's largest tobacco company is getting in on the e cigarette and that didn't seem to impress investors. shares fell more than 2% to close at $89.30. and priceline.com soared to another all time high today. that stock got a boost after goldman sachs added the site to the conviction buy list. they think the company will benefit from european recovery and it's now at $1,147.09 per

share. after the close of trading, green mountain reported a steep rise thank s to the sale of k cup coffee pods and keurig brewing system. it has a billion share stock buy back and a quarterly dividend of 25 cents a share but revenue growth forecast was slightly below estimates and that may have given investor as pause after the report during the regular session, though, the stock rose fractionally to $61.83. drinking coffee may make some people jittery but when the treasury reaches the debt ceiling, everyone gets nervous and it's happening again. the congressional budget office says that the federal government will likely hit the borrowing limit sometime between march and june of 2014. congress agreed to suspend the limit until february. an update on a company that got bailed out during the tarp program during the financial crisis, remember that?

ally financial, the one time lending arm of general motors repaid the treasury another $5.9 billion. ally paid back more than 70% of the total bailout money it got from uncle system. south florida may look like it's making a come back, but if you dig a little deeper, it's in a hot bed of shady bond deals. our series "mission critical" heads to miami next. even though sales of the all electric leaf car have been below target, nissan still plans to beef up u.s. production. now since the start of this year, the auto maker dropped the price of the leaf by more than

$6,000. it now says the leaf is the top reason that customers are referred to the nissan brand. some of those electric cars might come in handy on the day before thanksgiving, which aaa says will be the single busiest travel day of the year. aaa is out with the annual thanksgiving travel forecast, predicting more than 43 million americans will travel at least 50 miles from home over the long holiday weekend. that's down 1.5% from last year. nine out of ten travelers will go by car, fewer people flying this year. atlantic city, new jersey probably was not betting on this, the struggling gambling mecca stunned bye/q recession a from repeating casinos, they had the credit rating cut one notch today by moody investor services and the outlook on the rating remains negative. that's just one more example of the tough economic issues facing some of america's biggest cities. as we continue our series

"mission critical, saving america's cities," we turn to miami. it looks like the local economy is rebounding and look closely and you'll discover ill akovcov advised decisions are settling. >> reporter: it is a baseball palace, retractable roof, gourmet food. >> did you think you would eat ceveche hat a ball game? >> never. >> reporter: adam cooper stein says the home of the last place miami marlins is a sight to be hold. >> it's massive, modern, it doesn't look like anything else you've seen in miami. >> reporter: mostly paid for by the taxpayers who could be on the hook for more than a billion dollars. >> they use dollars taken away to fight blight. >> reporter: he sueed to block the deal. >> they cashed in on the

stupidity of elected officials and thinking that a sports stadium is more important than the quality of life of the citizens that live in the communi community. >> reporter: he lost but the securities and exchange commission could get involved. the city of miami and miami-dade county god say pee n subpoenas. >> i don't think they will find the bond buyers were misled. at the end of the day i was loan of the loan voices against it. it was a bad financial deal for us. >> reporter: the fcc has been busy in miami. it sued the city alleging during the depths of the recession it made material representations about the financial health. the city says they are turning pop lit ki political decisions and they want damages and reform. the municipal panel market is

huge $3.6 trillion and a lot of people invest because they perceive it's safe but in fact, it's one of the least regulated markets around and the fcc wants to change that. tomorrow, we head to baltimore, an ageing city with three major water main breaks a day. we'll look at the infrastructure and lack of resources to fix it. scott cohn, "nightly business report", miami. >> if you want more on my iamia finances, go to nbr.com. >> tonight, a cleaning crew found more than a million dollars of gold bars inside a bag left in an airplane bathroom. no one has come forward to claim the gold yet, but when they do, they better have a good reason for leaving that stash behind. i can hear you out there counting on your fingers, but we did it math for you. it works out to about 53 pounds of gold. and how they got that through

security, i have no idea. >> can you imagine saying i've left my bag of gold in the bathroom? >> that's "nightly business report" for tonight. i'm susie gharib. thanks so much for watching. >> i'm bill griffeth. have a good evening, everybody. we'll see you tomorrow. "nightly business report" has been brought to you by -- >> the street.com, up to the minute stock market news and in depth analysis. our quant ratings service provides objective independent ratings daily on over 4300 stocks. learn more at the street.com/nbr.

for decades space has been the domain of powerful governments. >> nasa's budget hit a huge spike, almost 5% of the federal budget. >> those days are long gone. now a new generation of entrepreneurs is reaching for opportunities and profits in space. >> we already have families who have signed up with us. >> tourism, private rockets, even mining. >> anybody has a right to use the moon as long as you don't claim it for yourself. >> this new commercialization of space carries major risks and costs. >> if we fly in space enough, people will die. >> coming up, how the bold ideas of silicon valley are creating a new era of space exploration and reshaping america's next frontier.