this is "nightly business re with tyler mathisen and . different directions. two stocks, two dow components. two very different stories. home depot and general electric. retn of uncertainty. is there a shift under way in the stock market that could cause the rally to who's next? why there's an appetite for acquisitions in the casual dining and fast food industries. those stories and more tonight on "nightly business report" for this tuesday, november the 14th. good evening, everybody, i'm bill griffeth here at the new york stock exchange, in tonight for tyler mathisen. hi, sue. >> hi, bill, great to have you.

i'm sue herera. home depot has a lot working in its favor. general electric, right now anyway, does not. let's begin tonight with home depot. the home improvement retailer not only beat earnings and revenue estimates. it also saw same store sales blow past expectations and raised its outlook. the stock rose on the report, adding to its 25% gain so far this year. courtney reagan star >> reporter: while many areas of retail are at best inconsistent right now, home improvement retail remains robust, especially for home depot. the retailer postingnother strong quarter, blowing past expectations and upping its forecast for the remainder of the year. home depot has been riding on the strength of the u.s. housing market for years now, and this mo recent quarter got an additional nearly $300 million lift from hurricane-related spending. both prep and rebuilding. >> the storms are only one piece of the story. the company is also riding the

waves of a good housing cycle, a good macroeconomic environment. hink home depot should be able to outperform, especially considering the fact that they execute much better than lowe's right now. >> reporter: average purchase amount and number of transactns grew in the last quarter. 20% of home depot's sales are professional, to contractors. that big ticket merchandise, like flooring,e 12% in the quarter. the retailer says sales of less expensive products to do it yourselfers increased too. home depot is the world's largest sler of christmas trees. the holiday season isn't its biggest time of the year for sales, though. that's the spring planting season. still, the retailer expects a strong fourth quarter fueled by hurricane sales and housing trends. if the first two weeks of november are any indication, their forecasts may be conservative. for "ni

and as sue said, it's a different story for general electric. now, we told you yesterday about the company's restructuring plan, and today we heard directly from the new ceo. but here on wall street, analysts remain skeptical. and the stock fell even further today. morgan brennan has our details >> reporter: shares of general electric plunged again today as the blue chip stock logs its worst weekly performance since 2009, at the depths of the financial recession. ceo john flannery says he's very clear on the direction of the struggng industrial and is confident he can turn it around. >> this is very, very similar to my experience in health care. i walked in, had a look, and said this is fundamentally a very goodusiness and there's basic things around operating rigor, how we work as a team, that makes a difference. i'm feeling very much the same way again. but i recognize that, as i said yesterday, it's show-me time.

>> reporter: flannery detailed why the new financial forecast is so much weaker than previously disclosed, arguing that the drop in profits and cash flow couldn't have been known before. he also addssed a decision to cut the dividend in half, a big move for a company with a shareholder base tha40% retail. >> i don't underestimate in any sense, and i feel this deeply, the gravity of what we have had to do, and the people that rely on that dividend, especially the people relying on this for current income. thisa very, very tough measure. and so it's not anything we took lightly. i looked at this in great detail. in the send i felt it was something we had to do. >> reporter: flannery says he's d by the stock's plunge in theast few days. on why investors should buy right now, he had this to say. three to five years, company growing cash and earnings over three to fiveyears, that's what

someone should buy. so is it going to be immediate, is it going to happen in two months, four months, six months? no. there's operational things we need to change to the company. >> reporter: flannery 2018 a reset year. but wall street has heard turnaround talk from ceos before. flannery just cut it in half. there's a lot of skepticism, frustration, even anger around the dow'sldest component right now. for "nightly business report," m morgan brennan. >> and ge along with concerns about the global e a a decline in energy shares, weighed on the broader market today. the dow jones industrial avere lost 30 points to 23,409. it had been down triple digits earlier in the day. the nasdaq was off 19. and the s&p 500 fell nearly six. today's pullback follows a steady rally in stocks pretty much all year but is uncertainty

starting to creep back into this market? bob pisa >> reporter: there's been a little bit of derisking going on in the markets with cyclicals like materials and industrials and energy down today and defensive names like consumer staples and utilities on the upside. there's a different tone to the market in the last week or so. we've opened down for the last fiverading sessions. that has not very long time. traders have cited several potential issues. we are making progress o tax cuts but everyone now realizes it may not be as great as everyone hoped. traders are questioning what this flatter yield curve means, we don't have an agreement on that. and recent data out of china, including retail sales and industrial production, have been disappointing. uncertainty in the middle east is another factor, the saudis arresting high-ranking princes. the s&p is only fractionally off

its historic high from early last week. but there's been a notable divergence in two hours. small cap russell 2000 is down 1.4%. the s&p is up 2.5% in the last two weeks, a big divergence, attributed partly to concerns over the tax bill. another issue is this decline in these high yield nds. they're down again today, down nearly 2% for the month. there are tax issues as well, but high yield is also a proxy for people's willingness to take risk. for the moment, the weakness in small caps is contained. but many investors are sitting on gains for the year. they're reluctant to sell now because it's easier to sit on the gains and sell in january when they'll have 16 months to pay taxes and they'll get a tax break to boot. but if the market slips notably in the next few weeks, the need to preserve gains will trump any tax consideration. that could lead to an end of year selloff. for "nightly business report," bob pisani

let's turn to a bull and a bear for their thoughts on where this market may go from here. we have jim paulson, who is cautious on the maet. you get to be our bear. kevin carrone is with washington crossing advisers, our bull. thanks for joining us tonight. kevin, even as a bull, you admit historically speaking this is an expensive market. what do you make of this change in tone that bob pisani was referring to? there are signs of wear and tear here lately. >> yeah, we have a barometer we've constructed, and that barometer is still pointing towards growth. most of the data is very strong. you look at capital spending, investment spending, look at employment data, earnings. the wide swath of data is still supportive of the growth story. until that breaks materially or until the market begins to really question that story, we're going to stay with it. so we're still bullish, although

we do acknowledge the market is a little bit pricey here. >> jim, let me turn to you, if i could, on that note, because i think you would agree that the market does look a little bit pricey. you're also of the opinion, i believe, that some of the positive economic news that we've gotten recently may start to soften up a l >> yeah, to some extent, susan. i think one of the things that's driven this market has been positive economic surprises. the economy of the united states has gotten better than we thought. no one thought we would have two back to back 3% gdp quarters, for example. and not only that, but a year ago no one thought we would have a global synchronized recovery where everyone around the globe is growing. those surprises have really helped lift the market. the problem going into next year is that now everyone knows that, and even if the economy remains fairly healthy, it will no longer surprise. and thereby it will no longer

impress and continue to drive equity markets higher. to your point, if it fades a little bit, we could be disappointed and it could be a struggle for the market. there's reasons to suspect a slowdown. we've backed up long term bond yields. the fed has raised rates several times. the dollar has backed up. financial liquidity for one of the rare times in this recovery ha contracted in the last six months. gdp has actually grown faster than the money supply, so there's less liquidity left for the financial markets. then i just kind of thing sentiment has gott a little ahead of itself. what's really driven this market has been a wall of worry. maybe for the first tim thas dissipating and that lends itself to maybe having it pull back. >> kevin, let me ask you about monetary policy. there's a theory going on, let's face it, we've had a very good run since march of 2009 for the u.s. stock market, and it's fueled in large part by the low

interest r that fed has put into place. now as they begin to raise those rates, as jim was referring to, can you still see the stock market continuing higher? there are those who feel it has to go in the other direction. >> not necessarily. the market has been fueled by an expectation for pedal to the metal, both monetary policy and fiscal policy. we're not talking about tax and interest rates are still well below the inflation rate. both of those engines are on full throttle right w. if we got to a point where the fed has gone too far, then that could cause a problem. if you look at what the market expectations are, they're really not seeing much by way of interest rate increases from here. so yes, if you have a big spike in interest rates and it was a surprise and shock to the market end the bull market. but that's not what the market seems to be expecting at the moment. the new appointments to the fed don't suggest a reversal of

course there either. >> all right. so jim, you would position yourself a little more defensively. and i see from my notes here, you would move equity exposure away, overweight, away from the united states. where would you be putting money to work either here or abroad? >> i would overweighted in international markets, both emerging and developed, sue. i think they're going thave less pressure than the united states stock market is in the next year. then i guess i would have a bar pelle approach. i would stay with more of the inflationary sort of plays. i like the energy stocks, which have been out of favor but do well if interest rates rise and do well if inflation pressures continue to pick up. i look at industrials right now, ge and the like, they've beaten down that sector and it could be a bit of a value play in here. a late would also benefit from reinflation pressures.

i would still hold on to technology but might back up a little bit overall. i would be careful about going to traditional sectors like utilities and telecoms and consumer staples because i think they have extreme downside risks to rising yields. >>nd oh, by the way, the utilities hit an all-time high today too. jim and kevin, thank you both, appreciate it. >> thanks a lot. >> thank you. there are reports that the white house is considering nominating mohammed alarian to be the vice chair of the bank. the president recently nominated jerome powell to be the chair of the federal reserve. the fed is keeping an close watch on inflation which has come in consistently below its 2% target. but it may be startingo pick up. just today we learned that prices at the wholesale level

climbed more than expected over the past year. in fact producer prices ro rose .4%. their biggest annual gain in . still ahead, food fight. will more private equity firms want to take a bite out of casual dining bran? the u.s. postal service reported a loss last year of more than $2.5 billion. it's the 11th straight year in the red. the reasons are pretty familiar. people are sending less mail and pension and health care costs are rising. the post master general is asking for more freedom to raise stamp prices as a way to help

generate revenue. the good news, it's forecasting another strong holiday season of package deliveries. speaking of which, small businesses were more optimistic last month. according to a monthly survey of the national federation of independent business, business owners expect sales to be higher and they thi that now is a good time to expand. however, some also say that they want to hire, but they're having a hard time finding qualified applicants. shares of buffalo wild wings soared today on a takeover report we told you about last night. the company has reportedly received an offer from private equity roark capital. if a deal does get d it wouldn't be the first fast casualompany to go private and likely won't be the last. kate rogers has more. >> reporter: the latest bid to take over buffalo wild wing.

the company also owns jimmy john's. who might be the next takeover target? fast food names like mcdonald's continue to thrive last year but fast casual names have been hit hard. analysts say names like noodles and company with smaller market caps and consumer struggles may be on the radar next. another beaten-down name, cheesecake factory which fallen 25% for the year, is a riskier move given its exposure to malls which have also been struggling for foot traffic as nsumer behavior changes. the owner of panera and cabribo coffee is looking at chipotle. the stock can't seem to escape its food safety woes. actor jeremy jordan posted on

social media he had been hospitalized after eating at the fast casual chain. chipotle said they investigated and could not confirm his illns was due to eating their food. the stock is down 25% year to date. some say it could make for a worthwhile takeor but others say we may see more activist intervention to turn that brand around. for "nightly business report," i'm kate rogers. tjx reports worth sales growth in a decade. the off-price retailer says its apparel offerings failed to appeal to customers and as a result revenue and same store sales suffered. the company added those hurricanes during the quarter also affected its results. the parent of home goods and marshall's also gave earnings guidance for the year that fell short of expectations. shares of tjx fell nearly 4% as a result to $67.94. despite a drop in i'm store sales, dick's sporting goods

topped profit and revenue expectations, saying that planned investments will cause earnings next year to fall by as much as 20%. that news sent the shares lower nely 3% to $25.59. advanced auto parts reported a decline in same store sales and revenue that missed analyses' expectations but did beat on earnings and reported a smaller than expected decline in profit margins. the company also reaffirmed its outlook for the year. shares took off, rising 16% today to $95.72. sue? bill, semiconductor maker kulik said the company's forecast for the current quarter outpaced street targets. shares jumped 20% to $28.52. warren buffett's birk shire hathaway is cutting its position in ibm, a regulatory filing shows the conglomerate cut its stake in the pc maker by nearly

32% to 37 million shares. shares reacted to th news, initially falling, ending the regular session up just a fraction to $148.89. the online auto marketplace car gurus reported its financial results for the first time since going public last month. after the bell, the company reported profitsnd sales that topped expectations, saying a rise in subscription revenue from deale helped its results. shares spiked in extended trading after closing the regur session up about a percent at $29.82. and certainly investors have been closely watching tax reform discussions in washington. and today, it appeared as if senate republicans were injecting health care into that debate as well. there are reports that a repeal of the affordable care act's individual mandate will now be includedn the senate's tax reform proposal. the house version that's expected to be voted on on thursday does not currently include that repeal.

well, there's als been a lot of talk in the tax plan about potential cuts to the popular mortgage deduction. but there's an even bigger cut in the house tax plan that c hit affordable housing pretty hard. diana olick is in washington tonight. >> reporter: america desperately needs more affordable rental housing. but buildings like these are less lucrative for developers than fancy buildings like these which command much higher rents. that's why the government entices developers to build low income housing with a tax credit and something called private activity bonds which are tax-free. >> multifamily affordable housing that then gets a loan at a below market interest rate because there's a tax exemption. >> reporter: but the house tax bill wipes out the bonds, which also hurts developers' ability to get the low income housing tax credit because the t are linked. without the bonds, developers will have little incentive to build thousands of affordable apartments.

>> the bonds access with credit, together it's50,000 units. it's 50,000 households that will go without this really critically needed affordable housing. families, seniors, veterans, homeless people, people with special needs, are all going to be denied this housing. it's a devastating reduction. >> reporter: republicans back the cut, saying the federal government should not subsidize the barboorrowi costs of privat businesses. housing advocates in texas and florida are condemning the cut, saying these bonds are needed to repair and rebuild housing after huicanes harvey and irma. losing these bonds could reduce the supply of affordable hous by 1 million units over the next decade according to one accounting firm, as the sup of low priced homes for sale is at a record low. for "nightly business report, m diana olick in washington.

coming up, going, going, gone. a foreclosure auction comes to manhattan's trop. here's what to watch tomorrow. we have a slew of economic reports due out including business inventories and the consumer price ind whichs a measure of inflation. retail sales for october will be leased. and we'll hear from dow component cisco systems which is expected to report its financial results. that's what so we need your help for an upcoming program on retirement. on thanksgiving, we will examine the crisis that we hear about

all the time. so tell us about your biggest challenge when it comes to saving for retirement. have no savings at all? we t t hear from you. go to nbr.com, click on "contact us," and tell us your story. or post a comment on our facebook page or tweet us. if you have a question about saving for retirement, our experts may be able to help. e-mail a short video to nbrmail@cnbc.com. household debts reached a new record according to the federal reserve bank of new york. it was the 13th straight quarterly increase. mortgages account for more than two-thirds of total household debt here in the u.s., even as auto and student loans also continue to grow. but delinquencies are also rising, especially auto loans made to subprime bs by auto finance companies. the richest 1% of the world's population owns more than half of the world's

household wealth. a new report from credit suisse says income inequality will get worse over the coming years with millenials having a particularly tough time. the researchers say inequality is largely the result of the financial crisis becse financial assets have been growing faster than nonfinancial on finally tonight, it's called 157 because that's its address here in the heart of new york city. but it is more than just another manhattan high-rise. when it opened three years ago, 157 was considered a symbol of extravagance, drawing the world's billionaires to its apartments with breathtaking views among many other amenities. but three years later, those record setting sales have gone from boom to a sort of a bt. robert f >> reporter: last week, unite 79 of the skyscraper named 157 became the biggest foreclosure sale in new york city, auctioned off for $36 million.

the owner was a nigerian billionaire charged with money laundering and fraud. real estate brokers said it was youtlier and that the market is strong. but an analysis of sales showed that every apartment sin the building opened in 2014 has declin in value, all by double digits. johnathan miller ran the numbers. a unit on the 62nd floor was purchased for over $31 million. two years later it sold for $23.5 million, a 26% decline. a unit on the 65th floor was bought for $29 million and sold for just $22 million this past april. prices for new condo developments across manhattan have fallen 27% this year. the average sale price is still more than 4.3 million or $2,500 a square foot. the most expensive listed for

sale today, for $70 million. one apartment not on the market is the famed penthouse on the 75th and 76th flo that hedge fund billionaire bill ackman purchased for $91 million. he has said he expects to be able to sell it for more than twice that. of course that's not liky anytime soon. for "nightly business report,. and that is "nightly business r for tonight. i'm sue herera. thanks for joining us. >> and i'm bill griffeth. have a gre. >> this is "bbc world news

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