this is "nightly business report" with tyler mathisen and sue herera. focus on fundamentals. from the fed to jobs to earnings. why they are looking more at washington than the number that's really matter. lots of likes. facebook questions earnings expectations as more people across the globe connect on the social network. >> popular crash dummies don't make the grade. we'll tell you what happened and what happens next. this is wednesday, the 1st of february. >> good evening. welcome. there was a clear theme on wall street today. fundamentals matter. so does washington, of course.

but today, good old-fashioned numbers on profits, jobs and interest rates mattered more. investors had to take into account earnings and whether they have been good enough to justify the lofty stock values. there was also the federal reserve which kept interest rates unchanged and decided to keep the markets guessing on when the next like will occur. and then there were jobs and a private company that showed it was a hiring spree. we are at the halfway marshall of earnings season. while the results have been positive, there were some hurdles ahead. bob breaks it down. >> we're just about halfway through earnings season. the results have been encouraging with blended earnings up about 7% for the fourth quarter and revenues are up about 4%. those are pretty good numbers overall. however, there's good news and bad news. the good news is the 2016 earnings recession is now over.

here's the bad news. now the hard part starts tfrlt markets are anticipating double digits earnings growth in all the major sectors in 2017. that's a tall order. is there any chance that corporate america can deliver on these big expectations? that's what the market is grappling with. it is a tall order. and part of the problem is maybe we're entering this period when the market is settling into somewhat more realistic expectations of what we're going to get. here's why. first, the fourth quarter numbers are up. that's good news. but they're very uneven. only about half the companies are meeting expectations for revenues. that's way below normal. that tells never expectations are already a bit too high. that's just the fourth quarter. second, corporations are being very conservative on 2017 guidance. no one is telling analysts to boost their earnings because of the trump agenda or outside global growth. finally, traders are debating

how much real earnings oomf we'll get from lower corporate taxes. that's one of the main drivers. there is no doubt corporations will benefit are a tax cut. we know that. but traders are realizing that initial expectations could boost earnings 10 to 15% or more. are probably too high. finally, a much broader macro the market is grappling with. can a baton pass smoothly from easy monetary policy to easy fiscal policy? if it can, there might be a smooth handoff and earnings will rise enough to justify the current prices. if not, it could be a rocky year for the rest of the market. for "nightly business report" at the new york stock exchange. facebook's quarterly results add to the positive results. the company had better than expected profits and revenue and an increase in both daly is that monthly users. the largest social network

earned $1.41 a share. that was better than expectations. revenue up 50% to more than 8 billion as the company continues to benefit from its push into mobile and video. investors liked what they saw in after hours trading. julia boorstin has more on facebook's quarter. >> the key takeaway from earnings, the social giant outperformed expect aces on every single metric. daily and monthly active users all coming in better than expected. i spoke to cheryl sandberg about what is driving the growth. she said it is more people joining the community. more businesses, marchly small business, moving online and bringing dollars with them. product improvement including more video and the success of the instagram stories. the los angeles. private sector job growth gone to a strong start this

year. according the pay roll processor adp, 246,000 new workers to their rank and file. that was a lot more than expected and it was best single month since last june. and hiring wasn't led by the services sector. construction jobs led the way this time and even the troubled manufacturing sector added 15,000 positions. >> and the first statement on interest rates since donald trump became president and the fed decide wasn't right time on like, it didn't offer many clues as to what may come next. >> the federal reserve kept rates unchanged in the january meeting and kept the markets guessing about when the next rate like will come. they are forecasting three likes this year. look for june to be the most likely next month. and the chance of a quarter point hike fell in march to 22%

afterwards. in its yubou abou unanimous dec maintained the language if what it used in december. it said the economy is expanding at a moderate pace and the labor market is continuing on strengthen. it is the gradual rate increases and it will make sure its balance sheet which swelled up after the financial crisis in an effort to stimulate growth. but did it express more confidence in the innation outlook. in a typical 92 wants by markets, it said it will rise. it is expected to rise. the fed noted more business and consumer confidence which has shot up in the wake of the election to president donald trump. if it has not changed the economic outlook, even though markets have soared while it awaits policies in which possible tradeoffs have been good and bad policies. thought raises the stakes for

janet yellen's testimony to congress which starts on valentine's day. but it is not expected to be much of a lovefest. >> the auto sector is another key pillar of the economy. today we learned that sales cooled off. the while january is tip clay slower month for auto demand, car brirs purchasing bigger vehicles like trucks and suvs which have higher margins. ford said the popular f-series pickup truck that had best start sinlts 2004. the institute for supply management said that executives are also more optimistic on the outlook for the sector. new orders higher and the index rose for the fifth consecutive month. >> on wall street earnings, the fed and economic reports helped stocks close higher. while the gains aren't big, they

would have been nonexistent if not for apple which rose more than 6% following quarterly results which we reported on last night. here the closing numbers. the dow jones industrial average rose 26 points to 19,890. in have the nasdaq up 27. the s&p 500 gained just a fraction. let's turn now for more analysis on the fed, the markets. the global chief officer. good to have you here. >> we'll get to the fed in just a moment. we've been worried about the level of positive anticipation in stock prices. have prices gotten ahead of themselves? are earnings strong enough to justify the levels that they're at right now? and is there too much good feeling in the markets? >> certainly, we're on a sugar high. right? the trump policies, which are

exceptionally pro growth should be good for the economy. now we're going through arduous task of getting it implemented. i think the market will say, well, let's pause. and also, one thing that's interesting, for some particular reason, round numbers are a problem for the market. so 20,000 on the dow will be a consolidation area for a while until we get more practice. looking at earnings, even without the trump tax cuts. i would expect to see s&p earnings maybe at $135 within the next two years. so for investors who are truly investors, there might be a better bond offer. >> in essence the bones of this market are still good. but we may be poised for a setback depending on the rhetoric coming out of washington. but the swerngs still look

positive to you. >> i would put it another way. the fundamentals look very good. this is a seasonably strong time. i don't really expect the market to go crashing down in the first quarter. on the other hand, i think it will be hard for to us keep one the pace of gains we got. >> what did you hear from the fed today? and bringing it back to stock prices. are stocks able to withstand what i know you expect to be three rate likes this year? >> i think so. first off, the fed is in my mind, falling behind the curve. if you look at the real level of interest rates today. that is, the rate of interest minus inflation. today we have rates of 1.5%. that means feds should be raising rates aggressively and they're not.

so i think the fed won't be a strong head wind for the market. and historically when it does start to raise rates, that's usually a strong economy and stocks have performed well. >> and inflation. for such a long time there was very little innation and now we are starting to see a little bit but not too much. >> eighth lot of it is the energy resurgence and the prices are stabilizing here. we're seeing fractioning activity pick up. again, going to the trump policies. these are policies which are supportive of energy. meaning production. so i don't see energy prices adding a lot to inflation. and all they have to do is flatten out. and if nothing else rises, inflation will fall. so while i'm not saying that we're going back to the old levels we saw before, i think that we're peaking here on inflation on a cyclical basis.

>> and a little innation is a good thing. >> thanks fortune being with us. >> and down in washington, the senate has approved the form he mobile ceo. the nation's chief diplomat will have to deal with a number of issues including guiding relations with russia, mexico and china. president trump will reportedly meet with a large group of ceos on friday, according to dow jones, the meeting is expected to cover topics like regulation, tax, trade. this comes as the white house works to develop a strategy to increase economic growth and hiring. the ceos are part of the president's previously noumsed strategic and policy forum. it is not clear if all members of that group will be there. still ahead, missing the mark. if you are in the market for an

electric vehicle, there's a pocket of them that did not earn the highest safety grade. a jury has ordered facebook to pay $500 million in damages. the lawsuit brought by the game maker alleged that facebook's virtual reality unit oculus was based on stolen technology. the jury found that the co-founder violated a nondisclosure agreement with xenomax. faeb says it will appeal. the nation's largest land lord made its debut. behemoth blackstone priced at $20 a share last night, finished

the trading day at that level. they opened and rent single family homes. it is not the only publicly traded company in the space but it is the largest. and it is part of a growing way to invest in the housing market. >> does anyone want to give $110,000? $120,000? >> it was barely five years ago that big institutional investors descended on a housing market in crisis. flooding foreclosure markets. some thought it was a short term play. they appeared to be in it for the long haul. blackstone, one of the biggest players, launched a the company. today, the company went public. >> what we're doing is really bringing the professional experience into housing when you move into the suburbs. >> this month the mortgage giant

fannie mae a vote of confidence in the form of up to a billion in debt. they may already back multifamily apartments. but for the first time is making the single family play. >> this is a new thing that we're doing. trying to learn about that scale of financing. or that type of financing. >> others in the market which include colony, starwood and others have sustain stock rise dramatically. over 40% in the last year. they, too, could benefit from additional capital as the sector expands. >> i think the most important thing is that millennials have not yet entered our space. >> landlords are still a tiny share of the market but he says he sees room for expansion. >> with 15.8 million homes released in the united states, it is larger than that. there's no reason it shouldn't

do it. >> it is still in the early stages. even as homeowners increase over time, it has been a part of the way americans sxlif always will be. the number of people applying for mortgage applications fell last week. the decline came mostly for applications for government insured loans. total mortgage volume dropped more than 3%. increased membership helped anthem beat street expectations. the health insurer says higher premiums for its plans led to higher profit and revenue. and they said until policy makers make changes, it is unsure in what capacity the cloim participate in the affordable care act. shares rose 4% to 160.79.

sydney bows, the supplier of office shoogss also slashes the full-year guidance but said the transformation initiative there's drive the future performance. but shares plunged 17% to $13.14. cigarette maker altrea saw its profits soar, thanks to gains with the beer giant anheuser-busch. but overall, cigarette volumes continue to faumd. they said they expect that weakness to continue through 2015. >> yesterday, they missed estimates on the sales were in line with those forecast. following the news, the largest share holder, the hedge fund elliott management, launched a proxy fight saying would it

nominate new board members and seek to remove the ceo after seeing management, quote, destroy shareholder value. but kleinfelded said they're headed in the right direction. >> we've got improvement in each of the segments. there's a lot more and we'll get it as we have done in the past. >> shares rose 11% to $25.28. investment research firm bernstein said it is bullish on corning but nonetheless downgraded the stock on the belief that the company shares are now fully valued. they now ups the target on the apple suppliers stock from $4 to $26. well. beat that. they were off 1% at 26.21.

and the image maker shutter 90 saw lower demand for some of its stationary brands. they gave a new quarter that would result in more than 200 job cuts and an inkoreaned focus. during regular session they were up a fraction at 51.77. amazon has manls to visit the hub. they said it would create more than 2,000 jobs and will lessen its dependence on fedex and ups to transfer and deliver amazon packages. last year, amazon said it plans to lease more may notes and bought a network of truck. new trash tests are raising concerns about tesla, model s.

none of these vehicles failed test but there is room for improvement according to the experts. >> a new round of crash tests. two cars, the chevy volt and toyota prius prime did well enough to earn the designation top safety picks. but the results are not as good for the tesla model s which is popular with luxury car buyers who want an electric model. according to the iihs, the model s could have done better protecting the crash test dummy when the front corner of the car was in a collision at 40-mile-per-hour. >> the forces we measured on the head suggested an injury might be possible had that been a human being. similarly, it raised concerns about injury to the leg. neither of these was so high

that we on expect life threatening injuries but they are too high in our opinion to earn good ratings for those body regions. tesla has made changes that will affect the next time they conduct tests. the spokesman addedering with expect the highest possible rating in every category making it eligible for the iihs top safety pick awardful meanwhile, bmw fell just short in rear end collisions. the company defends its electric car saying with it's carbon design. >> one other thing stands bout these crash tests. none of the electric cars failed any of the chigss that were

perform. "nightly business report." chicago. coming up, immigrants are creating businesses at a rapid pace. tonight two share their kernels for their ventures. small business owners drive jobs. nearly 150,000 new businesses per month were launched by immigrants last year. kate rogers talked to one who

was optimistic about his business tunneled trump administration and another who has concerns. >> about a year ago, francisco garcia decided to launch his business, modern architecture business for short. it had him worried. >> i was concerned about how that could sway potential clients because of having a spanish name. i'm concerned about that, the hesitation that i didn't have before. >> donald trump's first weeks in office haven't eased the fears with trump signing an executive order to build the controversial wall along the u.s. mexico border. the president took action on immigration policy enacting a temporary ban on refugees from seven majority muslim nations. while campaigning, trump used

language some considered to be inflammatory to describe immigrants and muslims. garcia calls himself an anchor baby, born in the u.s. and raised outside guadalajara until age 10. his parentsed my for residency, their ten children for a three-day bus ride to escondido. he now employs five people and said he is dispointed about trump's rhetoric. >> immigrants come with i believe american values. hard work, perseverance, loyalty to one's family, to one's employees. fairness to others in how we work together. and i just believe that the rhetoric is an oversimplification. >> immigrants have become a driving forceful they found in 2016, immigrants made up nearly one-third of entrepreneurs in

america, close to a two decade high. they're also nearly twice as likely as native born nernameri to launch new businesses. they retail in 15,000 assume markets nationwide. despite trump's anti-muslim rhetoric, he says he finds solace in knowing his brand is growing thanks to people of all races and religions. he said as sm as 90% of its customer base is nonmuslim. >> we have them from a number of different communities. you have to look at thecy verdict hing. >> that's what we ned to do. we can mobilize and work with the trump administration. i'm very hopeful. >> for "nightly business report." >> to read more about businesses started by immigrants, head to our website.

nbr.com. and finally, a former hospital stay can't keep former president george h.w. bush from attending a game in houston. he and his wife barbara will attend the coin toss. the nfl commissioner said he was hon honored to have them participate. >> thanks for joining us. >> and i'm tyler mathsen. we hope to see you tomorrow. good night.

>> this is bbc "world news america." >> funding of this presentation is made possible by the freeman foundation. newman's own foundation, giving all profits from newman's own to charity and pursuing the common good. kovler foundation, pursuing solutions for america's neglected needs. and aruba tourism authority. >> planning a vacation escape that is relaxing, inviting, and exciting is a lot easier than you think. you can find it here in aruba. families, couples, and friends can all find their escape on the island with warm sunny days,