. >> this is "nightly business report" with tyler mathieson and sue herrera. >> strong gains the major indexes close out the first quarter at lofty levels, now investors try to figure out what's next. what to do about it. betting on the banks, their stocks had a close start, our market monitor says this sector has a lot going for it. tonight, three names he says you should own. privacy protection. you browse the web or click on an app. legislation may free your internet provider to mind your data and sell it. what you can do to protect yourself. those stories and more on the "nightly business report" for last day in the first quarter, march 31st.

good evening, everyone, welcome, i'm tyler mathieson, sue herrera has the weekend off t. week end, month end and quarter end, the dow turned in its sixth straight positive quarter for the first time since way pack in 2006. the nasdaq had its best quarterly performance since 2013 in the s&p 500 saw its biggest quarterly gain since 2015. here are the final numbers, for the first three months of 2017 the nasdaq rallied the most, up 10%. they changed despite today's pullback the dow jones industrial average twopd 65 points to 20,663. the s&p 500 fell 5. the nasdaq was off two and three-fifths. so what pulled the gains in this quarter and which sectors did better than others? domenic chu has surprises among the first quarter winners and sinners. >> reporter: if you had stocks as part of your portfolio in the

first quarter of 2017, you have to be feeling pretty good at least so far. during the first three months of the year, we saw record-high levels for not just the dow jones industrial and the s&p 5 00 and nasdaq deposit. the mid-cap index and russell small cap index as well. there were a lot of reasons for the optimism. >> we saw a great quarter for u.s. stocks, up nearly 6% quarter-to-date. this is really based on factors. the first is that the u.s. economy continues chugging along. the second is that the global economy is finally picking up t. third is u.s. company earnings are back to the few positive territory. >> reporter: the first quarter rally was relatively broad based with nine out of 11 sectors in the s&p 500 in positive territory. technology stocks, apple and facebook were amooning the best performers, energy stocks, exxonmobile and chevron were the big lagers. as to whether or not the market can continue, some experts

believe it will come down to what happens with president trump and congress. >> there has been a lot of speculation about the potential benefits of deregulation in terms of across a lot of different sectors, including the financial sector. i also believe at the end of the day, investors will react to actual reactions. we will have to see how the year progresses with tax reform across the industries and see if it provides the benefits everyone is expected. >> reporter: after failing to achieve an overhaul of legislation, a lot of focus falls to the idea of tax reform, which some think could be even more difficult to achieve. a new darling of wall street may be exchange-traded funds or etfs. investors ploudz money into these investment vehicles which saw their biggest quarters for inflows ever. >> reporter: the first quarter is in the books and it's been a solid one overall with the s&p

up about 5%, but the bigger story is money continuing to flow into stocks, etfs that had their biggest quarter ever with 135 billion in inflows. investors wanted stocks from all over the worm. that's the story for the first quarter. nearly half the inflows were into u.s. equities. but international funds also had strong inflows, particularly into europe and into emerging markets. the big etf winners were just plain vanilla index funds like the xpy. we saw european etfs do well as i mentioned. there weren't a lot of losers, but high yield etfs, the hyg saw significant outflows about $1 billion in that particular fund. that's about 5% of the assets under management. what's going on? this is all about confidence. confidence in the economy, consumer confidence, for example, is at the highest level since 2000. i know, some skeptics have noted the harder economic number

versus not seen a big jump this quarter, sentiment indicators like consumer sentiment, the confidence is so high in the economy. so we have confidence in earnings, first quarter earnings are tracking up roughly 10%. this would be the best year since 2016 and confidence in the trump agenda of lower taxes, infrastructure spending and fewer regulations. now the rest of the year will be about the tension among those three factors. it's incredible flows into the market continue, but it can influence fund flows, for example the third week of march, that was the first negative week since the election. and that was the week the house failed on its obamacare repeal bill. so the trump agenda, definitely influences sentiment and flows. so the first quarter is history. let's get some advice on what to do next with a senior investment strategist with oppenheimer funds.

welcome. i assume you just we heard bob's piece there. >> i did. >> can the stockmarket in the u.s. continue to make headway in the trump agenda gets bogged down? >> well, i think that the equity markets can continue to go higher. i believe that we are in a secular bull mark. so that returns are likely to be more modest and the competition of returns are likely to change, they favoring more growth stocks than value stocks. in order for equities to go significantly higher from here, you probably need carry-through with regards to policy. i would say that would take the form into the federal reserve backing off with regards to significant hikes in interest rates orifice cal stimulus from the administration and congress. >> the fundament apples look pretty good, bob talked about measures of confidence, which he characterized as sort of soft measures. we need to see better earnings, what do you expect from corporate profits in the first quarter when they start to get reported in a couple of weeks. as you look out across the year,

what do you expect? >> corporate earnings should continue to grind higher. if you remember last year this time, we had a sophisticate rally on the u.s. dollar on the back of fed tightening at the end of 2015. and that significant rally in the u.s. dollar was a head wind to corporate profitability and some talk of an earnings recession. we have companies beating expectations t. dollar -- or going to beat expectations. the dollar has stabilized t. economy has improved since summer. so earnings are likely to continent to go higher. again, we don't expect lights out economic activity without a policy driver, but the earnings environment for cooperations continues to look sound. >> so where can i put some money now? let me suggest that i get my big tax refund in the next couple of weeks and i got some spare cash to put to work. where would you recommend i do it? >> well the first thing is investors should consider allocations even outside the united states. i mean, outside the united states expectations are lower

with regards to what type of policy stimulus you are going to get. if you were to look in europe, in the emerging markets, those parts of the world are nice parts of the economic cycle as the emerging markets recover and as europe expands. so good opportunities exist. there are valuations that are reasonable. within the united states, we continue to like the loan market. we think credit will continue to perform well. and i would say that, you know, for everybody that got very excited about value and all the value names that were going to do well in a typical upturn. i think we are more in a growth environment as we continue to be in a reasonably slow growth u.s. backdrop. >> how much volatility? it has been one of the lowest quarters ever for the so-called vix or fear of gauge. do you expect that to pick up? >> yeah, we think you will see volatility pick up and investors should always expect, even in a long-term bull mark, which i believe that we're in, you are going to see bouts of volatility. you will see market correction at some point.

we have them every year, greater than 5% correction every year of the last 35 years. so you will see volatility pick up. i think the most important thing for investors is to not allow themselves to get whipsawed or to be too focused on near-term events to prevent them from sticking to a long-term plan. >> we will leave it right there. well, we told you how the housing market has been faring this year. prices up as inventory remains tight. what about the rental market? there is a growing number of young americans move out on their own, the rental apartment market is seeing strong demand, but developers may have overestimated just how much supply the market needs. we take a look at how developers fared in the first quarter and what that means for renters . >> reporter: if are you a first time renter or looking to upgrade to a newer apartment, now may be your best chance. demand fell short of new supply

by about 100,000 units nationwide according to real page, a real estate analytics firm. rent growth is also easing. >> you can actually get a good deal this year if you looking to move into a brand-new property. it might be your first month free. in some practices, you might get your first two months free. >> reporter: the key is brand-new, luxury buildings are seeing the most new supply and, therefore, moving to more concessions, total apartment documency is still high, it is weakening and has been for the past six months, citying seeing the biggest downturn, new york and boston, they are the most vulnerable, their stocks are doing well thanks to the recent mark rally and possibility of deregulation which would benefit them. apartment demands where essex property trust and udr have family holdings. multi-family is strong. the few supply coming online

this year, especially in is major cities outpaces demands by a lot. >> practically in every market, you will see softer growth. if you are looking at places where concessions will be up and the rent growth could potentially be negative, they could be urban core locations across the u.s. >> reporter: apartment developers are moving more towards the suburbs where demand outpaces supply and the demand stack is older. they are likely to see a supply of newly-built single family homes lags. >> still ahead, project derailed? what's at stake for one of the busiest train corridors if amtrak doesn't get the money it says it needs?

>> remember all those bonds the feds bought the juicy economy. as the economy improves and interest rates rise, investors want to know what the central bank wants do -- plans to do with them. today a prominent official may have hinted at the answer. new york fed president bill dudley says it wouldn't surprise him, if instead of selling them, they may let the securities mature and roll off the bank's balance sheet. that's important, letting those bonds go back into the market would increase supply and with it interest rates. well, one gauge of inflation has hit the fed's target. according to commerce department. the rate of inflation in consumer goods and services topped 2% in nearly five years. the inflation measure is a part of the monthly personal income and spending report. personal spending showed a small gain while incomes were basically inline with expectations. well, president trump wants his administration to review

u.s. trade deficits and wants to take a tough stance with countries that abuse trade rules. he signed two executive ordered today he says will start a new chapter with business and set the stage for a revising of american manufacturing. >> the theft of american prosperity will end. we are going to defend our industry and create a level playing field for the american worker, finally. today, i am signing two executive orders that sends this message loud and clear. >> the first executive order reviews u.s. trade deficits with other countries. the second strengthens the government's ability to collect fines for abusive trade practices. well, infrastructure spending is also high on the trump administration's agenda. and we report from newark, new jersey, amtrak has a lot at stake if it doesn't fet the funding it says it needs.

every day, 240 trains carrying 220,000 commuters pass through a 106-year-old tunnel under the hudson river t. two-lane tunnel damaged by superstorm sandy is actually cracking. it's among the most pressing infrastructure projects in america now. >> what that will do is build the redundancy, four tracks instead of two, to allow commuters in inner city passenger rail passengers to get into new york and get on to boston and washington. >> reporter: the $24 billion gateway plan has been years in the making. amtrak, new jersey transit, port authority and law maker, like new york senator bob then then dez is pledging the work. starting with a bridge replacement, which could gin right away. >> the federal government needs to put up its share. i am happy to consider infrastructure investment as an element of that, but i don't want to wait for that because i don't know how long that will take and every day that we wait

in moving forward on the tunnel development, it gets more costly. >> reporter: with this year's federal budget still in plus and president trump unveiling a 2018 blueprint, gateway is on the line. with it, productivity in a region comprising 10% of america's economy. >> there is no other way to accommodate those 200,000 people a day. it would have a very direct and very dire impact. it could literally trigger a recession regionally all by itself. >> reporter: if that funding doesn't materialize or it's delayed the existing tunnel will have to come online, one track at a time within the next decade, a scenario that would reduce service from 24 trains an hour down to six, creating real bottlenecks as far north as boston. amtrak estimates that can result in a loss of up to $3 billion in economic activity from 2025 to 2029. but if the project does move forward on schedule, gateway would generate $4 for every one

spent. experts say the existing infrastructure won't last more than two decades and with passenger volume only expected to grow, the clock is ticking. consider "nightly business report," i'm morgan brennan in newark, new jersey. it may be fruitful. we gin the focus to smart cell phone companies that benefitted from an increase in enterprise customers and stronger software sales. blackberry is transitioning from smartphones into a software company. ist says it expects to be profitable in fiscal 20 each. investors liked what they we heard and sent shares up more than 11% to $70.75. accorda therapeutic says it lost a ruling on four patents for multiple sclerosis, it says it is disappointed and a quarter shares down 21% on that news to

$21 even. dupont will sell a piece of its crop protection business to rival fmc and also will buy the majority of fmc's health and nutrition unit. dupont said the deal will help it when approval from the european commission from its proposed takeover of dow chemical. it set back the closing date for that deal a third time. fmc shares popped 13% to 6959. dupont down 1% at 8033. cbs health says its contract with blue cross and blue shield to provide specialty pharmacy services will expire at the end of this year. the retail pharmacy said that the contract laws will not affect the company's 2017 financial results. but shares still fell slightly. they were off a fraction at 7850. verizon reportedly is preparing to launch a new live tv streaming service. bloomberg says the telecom giant is working to secure licenses to

offer an online platform where customers can access dozens of channels. verizon shares fell fractionally to $48.75. now to our mark monitor, vetting slowly rising interest rates and potential tax reform will benefit bank stocks. this is his first time joining us on the program. we join him now at the hen see funds. ryan, welcome. good to have you with us. >> thanks for having me. >> banks haven't had the best start to the year. neither the big ones nor the smaller ones. what do you think is going to turn it for them? >> well, i think it's just a matter of time. right now, it's all about rates. when interest rates rise, these banks go up and when they go down, we see a sell-off in the sector. but overall, i think that the sector remains a positive. we are looking for a good economy, with slow and stable rising rates. >> that should help earnings. that will help the stocks go up overtime. the icing on the cake will be any sort of tax reform or

regulatory relief, which should help these companies as well. we also think there will be a lot more mna activity as well. >> let's get to your picks. you have a large, a mid and a small cap. let's start with one nobody's we heard of, banc of america. why do you like it? >> bank of america, we like this company. it's obviously a banking bellwhether. it's the largest bank in the u.s. by deposits. this is a company that came out of the financial crisis and had to do a lot of restructuring and cost cutting and have done a very good job of that. it's one of the cheapest of the banks. primarily, that's the reason we like it. it's one of the largest holdings with large cap financials on it. >> let's move on to eagle bank core, which you call a small mid-cap, community bank in bethesda, maryland, why that one? >> yes, that's a bank that's been in a very attractive market area. this is a typical market we have, and small cap financial fund. it's a well run bank with a food

management team. they're an attractive market. it's an efficient operator, meaning that they keep their costs low. and because of that it has much higher than peer returns. and profitability. >> how does a bank like in bethesda in a big metropolitan area compete with the titans, b of a or chase or td? >> well, that's the great thing about the small cap banking sector is that while there are some commission of scale, it comes down to the local market. it's having lenders who know their customers, who have long-term relationships and continue to build the business that way. >> basic blocking and tackling in the banking world. bankening is your third and final choice. tell us about that one briefly. >> there is a fast growing bank, it's based in florida. bank united. it's the largest bank head quartered in florida. it's growing ability 17% last year in assets.

yet quite faster than the market. yet it's trading at a three multiple discount to its peers. so we think this is an attractive place to own this company. >> brian, thanks, so much. >> appreciate it. >> brian kelly, hen see funds, coming up, protecting your privacy. how much information does your internet service provider have about you? the answer is a lot. here's a look at what to watch next week. on monday, the major auto makers

will release their monthly sales numbers wednesday. the federal reserve releases minutes of its last meeting. that's where policy makers voted to increase interest rates. on friday the monthly employment report for march will be released. >> that is what to watch in a busy week. streaming music services for the first time ever are responsible for more than half of all music industry revenue last year. according to recording industry association of america, paid and ad supportive streaming brought in nearly $4 billion. it accounted for a little more than one-third of annual revenue. much of the increase can be attributed to the crest of services like spotify and apple music. we told you earlier this week that the house of representatives voted to overturn privacy protection rules for consumers. a measure that president trump is expected to sign t. new legislation would let internet providers closely monitor their customer's browsing habits and

then even sell that information without permission. here to discuss what this means to you and how you can protect yourself is laura moy, she's the deputy director on the center of privacy at georgetown law school. laura, do i have it right this legislation which has not moved through and been signed into law would do that and it would allow internet service providers, comcast, verizon, at&t, and others to mind my data and sell it? >> so, you're right. what this does is it allows internet service providers to eliminate the rules that would prevent internet service providers from using or selling information about their customers without permission. so most americans, with i are connected to the internet, pay a monthly service fee to an internet proirks a company like.com cast, at&t or verizon that provides them an exchange with an internet connection. because they provide that

connection, your internet provider gets a window into pretty much everything that you do online with that connection. >> so today, do i have to sign some sort of waiver that would allow them then to mind my data sell it or they don't have that right at all? >> so what the rule would have done, with the rules we have in place would require internet providers to get your permission before they use that information for purposes other than to provide service. and that's, just be clear, we are talking browsing history, app usage history, we are talking about websites that you might visit to look up medical conditions, websites that you might vistate express your political viewpoint. we're talking if you visit planned parenthood's website or nra website, dating apps or weight loss apps. this is all information that an internet provider has about its customers and can make a lot of

inferences about their customer's private information. >> with apology, it's the family hour here, but i assume that would check information if people were using it to look at elicited pornographic websites as well? >> yes, that's true. one thing that concerns a lot of folks is browsing history and app history, can tell an internet provider a lot of information about one's sexual preference or romantic preferences. >> so is there anything ki do if this becomes the law of the land as it appears it will? is there anything that i can do to insulate myself from this? if i'm uncomfortable? >> to be clear here the vast majority of americans want more privacy protection, not less. and unfortunately, the best thing to protect our privacy online work strong rules and if president trump does sign this, as he's expected to, we won't have those rules. what you can do, you can look

into some other options, if you can afford to pay an extra monthly fee for a virtual private network, if you have the technical savvy to do that and if you are willing to download some browser extensions, those are some things that can help create your privacy, but, unimportantly, it's knot as good as having strong rules. >> thank you, we appreciate it very much. >> thanks so much. >> that will do it for this edition of "nightly business report." thank you for watching. i'm timer mathieson. have a great week. we will see you monday.

>> 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 la