. this is "nightly business report" with tyler mathisen and sue herera. funded in part by -- >> all it takes is a spark. one idea to take flight. the courage to seek the unknown. to innovate, disrupt, to move us all forward. to explore a different perspective. at nasdaq, we connect the world, its ideas, its capital, its businesses, the people that drive global economy. the future isn't tomorrow. it's right now. all it takes is a spark. nasdaq. >> in the federal funds rate will likely be appropriate in the months and years ahead. >> ready or not, an interest rate increase might be coming

soon and it could mark a turning point for your money and your investments. >> risky business? are homeowners opening their favorite piggy bank again, their home. >> a better deal? the commerce secretary plans to be aggressive to fix bad trade disease. but some along the u.s./mexico border are concerned. those stories and more tonight on "nightly business report" for friday, march 3rd. good evening. welcome. >> we start with federal reserve chair janet yellen may have said the clearest signal yet that an interest rate increase is near. her speech capped a week of talks. many said the tighter policy seems to make sense barring, of course, any big economic surprises. the fed last raised interest rates in december. on the second like in a decade. rising rates impact everybody from home buyers to savers, and

they rippled through the global economy which is why investors are paying close attention. steve liesman looks at it. >> the fed chair janet yellen putting an exclamation mark on it. saying in a speech in chicago, it was on the way. >> in our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations. in which case, a further adjustment of the federal funds rate would likely be appropriate. >> she also affirmed her belief that the fed would like three times had year and gave the economy a pretty good bill of health. the fed said the u.s. had remarkable resilience amid a series of shocks. now it was close to hitting the fed's inflation and employment

goals. getting some help from abroad which has been a main source of weakness. >> at this point, i'm pleased to be able to say that looking at the global economy, at least for the next few years, i see the risks as more balanced than i have in some time. >> she stuck on her guns saying there's too much unthor is at this to forecast effects of new policies coming from the trump administration. but it does seem the prospect of these policies, giving the fed he confidence that it can exit the long period of low rates. rt. >> the confidence that the fed could raise interest rates later this month is underone reason behind the big run-up in bank stocks with some names not seen since the financial crisis. john is here to talk about that. it sounds like all they have to do now is just conduct the vote.

>> that's true. but i think we have to look at one vote. where is the trend going and where's the pace? clearly the economy is run tag stronger level. the jobs rate has been really strong. the speg that they can raise the rates without the stock market. the activism is at all time levels. >> you said it is not fully appreciating that it may be more aggressive this year than the underlying summits. >> right. so if they raise rates they times this year. so three times gets to us 1.25. that means in june we keep adding 200,000 jobs per month, by june, investigators will say, okay. we know where the fed is. where will we be in 2018? if you have trump and the republican administration poor

kerosene on the economy by having tax reform, infrastructure spending and stock deregulation, we could be talking about a rate of 2.75. >> and with rates going up at that rate, banks can get back to the old-fashioned business of borrow go and lending and make go money on the spread between those two. is it that simple? do you just buy all the banks? or are they all created equal? >> i like the larger banks. although it is 24% since the election, the valuation is still quite compelling. hadder the price of a stock where it is. the value is what you get. the surprise what you get. value is what you buy. citigroup in particular is trading at a discount to its book value. i'm not suggest go that it goes back to where it was before the crisis but where the bank, the health is today, and with interest rates rising, it should be trading at a discount.

how much is also based on regulation? >> i think there are three pillars to buying stocks hire. one is the interest rates. two, earnings quality. and three then deregulation. and we're uncertain as to what the form of deregulation will be. let's say right now a bank has to hold 12% of reserves on its balance sheet. and let's say it is lowered to 10%. now the deregulation is up 2% for bank that's they can he reinvest in their business and you go back to the glory days of the bank industry. >> we will see. had good to see you. thank you. >> well, stocks inched hire taking the notion of a possible interest rate like pretty much in stride. historically it would cause it but that didn't happen today.

the dow jones industrial average rose 2 foinlts finish at 21,000. the nasdaq was up 9. for the week, all the major indices were hire. >> economically speaking, the services sector saw its strongest monthly growth in nearly a year according to the institute of supply management. activity in the largest part of the overall economy was stronger than expected in february. the reason increase in boat the services and the manufacturing sectors could signal that business investment will start to pick up after a recent downturn. >> rework some trade deals has become a big issue for the economy and for american workers. today, the commerce secretary promised to take a proactive role to make sure the us is get going deals globally. in his first interview sense being confirmed, he told cnbc that his primary focus will be promoting exports. >> it would be aggressive on trade. we know that the deals made

historically have rutd in the great loss of manufacturing jobs, a great. a closures of manufacturing businesses. we don't want that to continue. so the first emphasis will be on facilitating u.s. exports to other countries. getting rid of both tariff and nontariff trade. >> and topping list is the renegotiation of the north american free trade agreement with mexico ask canada. nafta. he wants the terms to be more favorable to the u.s. on the us/mexico border, some business owners are concerned about too much change. contessa brewer. >> he stands atop a hill. a sweeping vista of rugged trainl and imagines what could be. he bought 215 acres.

the last parcels of hand here to be zoned for light industrial investigationment. >> here's what we envision. to build 30 100,000 square houses. >> he's already graded down a 40-acre lot, doing much of the work hild to save money. a duel citizen with family on both sides of the border. he said president trump's talk of border taxes, doing away with nafta, a massive ball and immigration crackdown is scaring mexican investors. >> we had a couple of vegetable growers and fruit growers that they wanted to establish here. they have backed out and they're waiting to see what happens. ? within the would be industrial park scan, the brothers warehouse, a third generation family business of produce distributeors. >> it is incredibly important

that this border stays open. >> more than half of all ill ported produce comes from mexico and nogales is the largest port of entry. the last few years have seen record growth in value. business is booming but the prospect of a border tax. ? making peel buy processed food. that doesn't help the american economy. nor american people. ? the u.s. customs said $17 billion a year passes through the nogales crossing. raw materials, finished products, employees, even financing moves both ways. luis is an attorney specializing in cross border commerce. his clients are with a wary eye to washington. >> these companies are having second thoughts about building these wear houses.

having second thoughts about employing folks in the u.s. so these warehouses can run efficiency. >> they don't think nafta should be scrapped but they say after two decades, perhaps could it use a tune-up. with more attention paid to employment, the environment, intellectual property and digital technology. >> when that happens, you lose trust. and it is an enemy of trade. and trust. >> do you have any concern in your mind that your profit might be in jeopardy because of what's happening in wash? >> this is my dream. i came here. i came to nogales. i think it is a great place to live. i went to school. and i said i'll establish my business here. this is my american dream and they're killing it. >> nogales, arizona. >> canada's prime minister defended the home run free trade agreement but said he looks

forward to working with president trump to make improvements to the deal. >> the been fits of nafta over the paster decade include increased jobs for both canadians and americans have been clear. there is always opportunity to improve. nafta has been improved a dozen times over the last 20 years and we look forward to sitting down with president trump to talk about how we can make sure that we are helping the middle class in both of our countries. >> the prime minister also reiterated the importance of the close trade go rip between the u.s. and canada. still ahead, healthy prognos prognosis. why our market monitor says now is the time to invest in health care stocks.

shares of airs got a lift after it is suspending the decision to examine industry pricing. the tran sparncy review was into a long time practice of some airlines of preventing travel websites from showing their fares. united, continental and alaska air were some of the biggest gainers in the aviation sector. snap chat's founders are not the only ones who made a lot of money this week. so did a silicon valley high school. it invested $16,000 in seed money he in snap in 2012 based on a recommendation from a venture capital i have who

happened to be a student at the school. the school sold most but not all of their shares yesterday and they earned a cool $24 million. meanwhile, they're still making money. snap shares were up again by more than 10%. >> nbc universal invested the half billion dollars in snap's ipo of the move is part of nbc's bigger push into social media as growth comes from online conthe tent. in the past 18 months, nbc has made investments in box and buzz feed. it is the parent company of cnbc which produces this program. thanks to rising real estate prices, they're tapping into the we thi we think. all the way back to the risky days of the housing book. >> ever since the epic house go crash, homeowners have been very conservative with their home equity. but that's starting to change. now prices are rising faster

than expected, home owners are tapping that newfounlt equity and they're risk go more up front. two signs they're worth it. usually loans that allow you to pull cash out when you need it. they dropped dramatically. they are now up 21% in the past two years to the highest level since 2008. that according to moody's analytics. we're seeing more lone refinances. where borrowers take cash out. also, home buyers are putting less down on their purchases. before the last housing boom, the median down payment was over 7%. then it dropped to 3%. and then shot back to 7 during recovery. now down payments are shrinking again to a 6% average. all according, this as had there are more down payment products. add it up and home owners are leaning toward more had again.

home prices are rising. but if prices are overheated as some suggest and ripe for a correction, then homeowners could see a pinch again. i'm not saying prices will go down nationally but the increases could shrink and some markets could go negative. >> the largest advertising firm reported satisfies growth that was in line with estimates. the company said a sluggish start to 2017 in a very come petty ad market prompted wpp to slash its sales outlook for the whole year. shares fell almost 8% to 107.91. big lots had a difficult retail environment and a lower store count. profit did come in ahead of expectations and they said they would raise the quarterly

dividend. shares rose nearly for you% to 54.23. revlon which sells many of its make-up products in drug stores said consumers shifting to specialty cosmetic chain caused sales to fall flat last year. revlon shares were off. hudson bay which owns lord and taylor and had saks fifth avenue. they have reportedly failed to get financing for that deal which has caused talks between the two companies to be put on hold for now. macy's shares down for you% as a result to $31.77 today. drug makers astrazeneca said they would be working together on develop a medication for preventing a respiratory condition in newborns called rsv.

the most common cause for respiratory track infections this infants worldwide. the shares rose to 21.92. and verizon is buying back up to 100 million of its shares. they reported a quarterly dividend. the annualized yield is for you.6%. shares up 11 droenl. >> now to our monitor who is finding opportunity in the health care sector. this is not her first time on the program but it is as a market monitor. good to see you again, nancy. welcome back. >> thank you. good to see you. >> let's start with your first pick. it is amgen. it has room to run in your mind? >> it does indeed. the whole health care group began, particularly when hillary

clinton tweeted about drug prices. we began to buy aggressively. though it is up, it yields about 2.6%. the dividend growth has been about 35% per year and it is trade go at a below market trice price the earnings so that means it is cheaper than the market but it is growing faster than the market. we like it a lot and we like the group in general. the dividend is about two-thirds the return over time. so it is very important to xlekt dividend. >> speaking of which, there is johnson and johnson. it hasn't performed stockwise as well as some others but it does have that rather juicy dividend. >> it does. good to see you again. greeld 2.6%. growth to dividend about 7% a year over the last five years. this stock is up 10.5% over the last 20 years annually.

so that's compared to an s&p up 7.7. because of the diversification, iter in really goes to the races but it does have stable, steady returns and they really put an emphasis. that grew 12% last quarter. so we think this is a great way despite risks of the talcum powder lawsuits, this is a company with a history of doing the right thing. starting with the tylenol had cyanide problem. >> you say it is a way to play the group defensively? >> it is. so miles david is a great ceo. he just made a great acquisition of st. jude. they have a lower than dividend yield. they've been growing about 18% per year over the last three years. what you're going to get from them is stable growth. and again tarks below market valuation. we like that. if we can get faster than market

earnings growth, that's a win/win. >> quickly, the president has talked lot about capping drug cap increases. what does that do to the companies? >> i don't think it is true. he's really been talking privately about bring jobs back and i'll back off on price go. he is also said that he wants to fast track drug approval. that's really the big piece of news. this is same thing we saw in the clinton administration. those stocks outperformed the s&p. in period by over 100 percentage points. this is a solution to health care problems, in r&d and pharmaceuticals. >> all right. on that note, thank you for joining us again. have a great weekend. >> you too. >> coming up, financial touchdown. what one football team is doing to prepare players for life after the game.

here's a look at what to watch for. global markets will have their first chance to react to the china economic growth markets. on thursday the european central bank needs to discuss interest rates and the region's economy. on friday we'll get the biggest economic release of the month. the monthly report. that's what to watch for. mercedes-benz is recalling more than 350,000 of its vehicles. the issue is a part for the starter that could overheat and cause a fire. the recall involves certain c

class, e class, cla, gla and glc cars and suvs manufactured between 2015 and 2017. >> college football athletes are being put to the test and show casing their talents during the nfl combine. but long material, it is not just about winning on the feed. it is also about being success have off the field. >> life after football. the miami dolphins are getting schooled in winning off the field. >> boom! >>er they travel to, no for a business combine. stephen ross aranged for his nfl team. >> i think as an owner i have a responsibility to make sure they develop as great football players, to prolong their career but also, it is a responsibility to make sure to develop when the

careers, when it is over. and i think that's how i saw it. it is great for the team. it brings them closer together. it is great for our organization. we're trying to be the best in class. >> this is more than one of a dozen events the players will partake in in over a week. >> they probably want to play as long as they can. when they're done they want to think about their future. to speak with our executives and learn what we're doing. one of then was asking me about, what is the difference between a steel building and a concrete building and why would we build steel versus concrete? >> for the project which the latest company is develop, to a q & a with equinox. they've been meeting entrepreneurs in more than a dozen scheduled events to learn more about business and investing. >> to shadow the millionaire,

billionaire. >> football is a short career. that being said, you have to plan for the next step. >> the players chose to participate paying out of pocket. the goal, make connections that will last long beyond their playing years. >> i think it is giving back. we speak a common language of i think a lot of these athletes will be great employees. >> with so many pro athletes going broke after their nfl careers, ross is determined to make sure his players don't become just another statistic. >> for more on how the miami dofs are preparing, to go our website. >> thanks for joining us. >> have a great weekend, everybody. we'll see you monday. >> nightly business the recover has been funded in part by -- >> all it takes is a spark.

one idea to take flight. the courage to seek the unknown. to innovate, disrupt, to move us all forward. to explore a different perspective. at nasdaq, we connect the world, its ideas, its capital, its bits, the people who drive the global economy. the future isn't tomorrow. it's right now. all it takes is a spark. nasdaq.

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