this is "nightly bu wness reporth tyler mathisen and sue herera.e tradrs, good. and easy to win, too. so says the president. the stock market is not so sure, as new worries flash around the globe. ripple effect, could higher costs for builders also lead to higher rent for consumers? and contrarian play. our market monitor says the convenonal wisdom is all wrong on one stock sector. he'll namesa names that hys could earn you 20%. over the nt year.th e stories and more tonight on "nightly siness report" for friday, march 2nd. good evening, everyone and welcome. thearket is fulf surprises. and this week was no different.i the p of tough tariffs and the possibility of a trad war had investors on edge again today.

some say the market is undergoing a funda.ntal chan it wasn't that long ago, you might recall, that stocks went up no matter what happened. now stocks are pullingback, volatility is rising. and investors appear more aware of new risks. today the dow jones industrial average closed down 70s poi to 24,538. it had been off nearly 400 points during the tradg session. the nasdaq rose 77. the s&p 500 was up 13. for the week, all of the major indexes were lower. possible pisani has more on these new risks to the market. >> never a dull moment in the markets these days. the market has signaled that the fed andorries about higher interest rates is its main concern. with the s&p 500 down more than 2% for t week, the market's sending a message that there are newhe risks on radar. first is the broader implications of how the white house approaches tde. the notion of tariffs has already aggravated keyke allies anada and brazil and mexico.

elsewhere, the u.s. has already annount's going to be pulling out of the trans-pacific trade agreement, and snap isy looking i as well. this is causing worries of a global trade war. far broader and steel andin al tariffs. second washington talk of a couple of top advers possibly exiting their roles in the white house. finally japanese interest rates may start to raise as the head of the bank of japan said he aiuld considerng rates next year if inflation hits its key target level. for "nightly business report" i'm bob pisani at the new york stock exchange. alk more about the new risk to the market are andreas garcia amaya the founder and ceo of zero financial and brad mcmillan the chiin stment officer at commonwealth financial network. andre it's good to see you n. ag let me just begin with this idea, you have a very global perspective on investing. is thereg anyth this threatened trade tariff that should change my fundamental

posture as an investor? >> i think that's the right way of framing it, and the answer for me is no. the fundamental picture is that we've had a globalize d synchronized atcovery. this is a wrinkle, right? this potential trade is a wrinkle but it doesn't change what was my view earlier is stocksere already expensive, even going into this here in the united states w should expect lower returns than they have seen the last seven years. this is new and the market doesn't like it so i'm not surprised we've seen more volatility than in prior months. >> would you agreeith that, brad, overall? i mean the fundamentals certainly haven't changed. but some of the outlying chatter, if you will, certainly has. >> i do agree with that. and i think you can look at the response of the market, as a very rational one. look at it this way, the last time we saw tariffs like this

was in 2002. and they were actually passed and the market dropped by abo 25%. so if we saykay maybe we've got a 10% chance this actually happens, 10% times 20%eans we go down about 1% or 2% and that's where we are. so this is a tional response. but the fundamentals are still solid. >> so andreas, the president today in aai tweet trade wars are good, and easy to win. what was he driving at there? >> huh. well that's a tough one answer. i mean what i'll say is that, you know when you look at basic economics, you know tariffs usuallyko not w out well for pretty much anyone involved. you know, i ud to cover internationally countries like brazil. you know, ask them how tariffs have helved their economy the last ten years. so hard to know what the president's 'lthinking, so stay out of answering that. >> i think you have a lot of company in tt, andreas.

let's go to brad, and basicallyd so if i am watching all of stis volatility, i'm a longer-term in. how do i deploy new cash? where would you put things to work in a market where volatility is back in a significant way? >> i wouldn't worry about it. i would stick with your plan. there is no c reason tnge the plan. when we talk about volatility, the thing to nmember, it's right now that's abnormal. it's the past couple of years. >> mm-hmm. ht what we're seeing r now is what we should see, so it doesn't bother me at all. >> so andreas, we talked a little bit about the effect on but if these tariffs come to pass, and who knows whether thi is a negotiating posture, or what, what will the effect on bonds potentially be >> yeah, so, from a textbook perspective, it would be inflationary. which bondso not like. bond yields tend to rise in insuationary prs.

having said that, if it does create a trade war, that escalates, then they could be a risk-off snario where money would go back into bonds. it's not as clear-cut as bond yields wou go up and bonds would sell off. it depends how extreme the case would be. it's just inflationary pressures go up, i would expect bond yields to continue to rise which they have in the por weeks. >> so brad i ask you, what you would do, and you said you'd stick wit theplan. but, what are you doing for ie s? are you still investing in the united states? are you finding value? are you l hooking overseas? what are you telling your clients? >> over the past six to twelve months we've been moving more abro abroad. when we look inteationally we simply see lower valuations. we see faster growth. it just makes sense. that hasn't changed. and that's not likely to change by what's happening now. as far asoe fixed income one of the things about an interest tite is over time, the effect of higher rates is rely

small. it has anmmediate effect but it also, you can reinvest at higher rates. so we're not changing that at all, either. >> all right, gentlemen, thank you very much. andreas garcia amaya with zero financial. brad mcmillan with the commonwealth financial. the trainternational moneta fund warned that the proposed tariffs on steel andminum would likely hurt the american economy, and our economies of our trading partners. the organization urged all parties to resolve tradeut di without using retaliatory measures. u.s. commerce secretary wilbur ross says the market has overreacted to the promised tariff and that the impact on consumers would be minimal. when asked in an interview on cnbc if the tariffs would be broad, and apply to every country, including our allies, ross said, that's what the president seemed to announce yester >> let's assume that to be the case.

this is not the first time that we've put tariffs on steel. we have tariffs on many forms of steel. the reason that we've t had go this route is that the nventional trade methods don't solve the problem of systemic global overcapacduy and global ing. >> if china, a country tt's been accused of dumping steel, is the target of those proposed tariffs, the world'sesecond largt economy doesn't seem all that concerned. >> china criticized president trump's intariffs, s that global trade would suffer if all countries followed the u.s. example. the foreign ministry statement out of to past remar the government, and that could be because there's a widespread belief he that the tariffs won't have very much impact on china, if any at all.

we speak to steelmakers and aluminum companies and they told us that they a just don't sell lot to the united states directly. less than 3%.s of steel imports are from china and chinese aluminum makes up about 6% o u.s. aluminum imports. the china iron and ste association went one step further saying the tariffs would be detrimental to the u.s. and that they were a quote, stupid trade protection measure that would raise costs for industries that consume s ael make them less globally competitive. and it's for that reason that many people he believe that china won't retaliate for this issue, and that beijing will keep its powder dry for an issue that iteels more strongly about, such as intellectual property night protection. for "nightly business report," beijing. while a number of indtries have warned against acting tough on trade, steel and aluminum makers are praising the president's plan. jackie manufacturing plant in western pennsylvania.

in wheatland, pennsylvania, employees are applauding president trump's decision to impose tariffs on steel and aluminum imports into the united states. they say it's a game changer for a industry that h long struggled to compete with deternational rivals and anti-competitive t practices.it the largest steel type manufacturer in north america, making products used inndtry and commercial construction. they employ 2300 people,nd primarily use north american steel. that includes some steel from canada. they say they coulde hit the hardest by the tariffs. but they're still in favor ofli the . >> the current think something that nafta will find a solution for th. we view t canadian market -- we view the market as a north american market. yoan know,a has the same challenges that we have. >> it's really a like market s we'd like to see something done there. having said that, at the end of the day, we're in favor of these tariffs. we've been challenged by the

whack-a-mole trade challenges of past. >> reporter: while it's possible canadian steel could be an exception because of nafta it'st unknown as point and it highlights the fact that all the o beiculars still have worked out. that's if this policy is even seen through. still, management feelshat by cutting taxes, and imposing tariffs, president trump is living up to his promise to revive the industry. >> this is going to create a lof of opportuni us, quite honestly. you know, we've been competing, so far, with one hand tied behind our back. and we've been doing well. we have been resting but it's been a repressed growth. it's going to level the aemploying field,ow us to take the gloves off and fight fairly. we know in that environment that 're going to wi >> opponents worry this will spark a trade war. the steel industry says it will still need to import steel in order to meet demand. priceikes wil be inevitable but nominal for the consumer when compared to the cost of the end products. and what about jobs?

ramping idlacilities will create hundreds more, in addition to the 2300 people it alreademploys. angie has been here 32 >> hopefully bring more people back. there's a lot of people still, uu know, laid off. maybe that will our business enough to where, you know, we can give more people a chance to get back to work, and the commun better, also.ng a lot >> and employees were also told yesterday they'll recve a $1,000 bonus when the tariffs are imposed. for "nightly business report" i'm jackie deangelis in wheatland, pe>sylvania. >>t's time to take a look at some of today's upgrades and downgrades. u.s. steel was downgraded tol neutrom buy. the firm thinks president trump's tariffs will have a limited benefit to the company this yea because of previously signed contracts that locked in lower prices. they also see steel pricesid g next year because of challenges from the world trade

organization, and possible trade retaliations. but b of a raised the price target on u.s. steel to $50 ash e from $47. u.s. steel closed at $45.39 down more than 1%. oppenheimer cut its rating on walmart to perform from citing that retailer's slowing online sales growth. the analyst there also cut walmart's price target to $39 from $110.sh es fell a fraction today to $88.77. >> rbc capital mcdonald's same-store sales expectations after disappointing sale t of new value menu along with a softer industry outlook. the firm alsout the price target on the fast food chain to $170 from $190. a share. remains bullish and maintains its outperform rating on the company. mcdonald's down nearly 5% on the special at $148.27. and ebay was upgraded at raymond james. strong buy from market perform. the analysts expect growthsn

grerchandise volume to accelerate this year. raymond james setting a $52ar a price target on ebay, and today ebay shares closed higher at $42.95. up about 1.5%. come up,hy a veteran tech investor is turning his sights to real estate. and he'sic got three he thinks you can benefit from. >> the world's largest asset manager is ramping up pressure on the firearm industry. in an unusual step, blackrock made public a letter with the t questiont it is asking of gunmakers and gun sellers. questions range from litigation risk to gun safety to background

checks. it's also working with customers to help them explore options for changing their investments to exclude gun stocks. blkrock overseas more than $6 trillion in assets including funds that track market indicng mat one of the biggest owners of the three publicly traded gun makers. >> rei will cut ties with the gun manufacturer vta outdoor, holding sales of all of its products. rei does not sell guns but it does sell other products made by vista, which include camelback water bottles and camp chef stoves. rei was not happy with vista'so failuresue a statement following the mass shooting in florida saying we believe quote it isf the job companies that manufacture and sell guns and ammunition to work towards commonseioe sol that prevent the type of violence that happened in florida last month. the decision by rei sent shares of vista outdoor down 7%. and l.l. bean

will n longer sale guns or ammunition to anyone younger 21an they sell guns only at the flagship store in maine. they donc notde assault style firearms. and back to the trade issue now. another aa where style tariffs could hurt is home building. especially apartment buildings. higher costs for builder could mean higher rents for apartment dwellers. tiana olick filed this report. >> the c of construction has already been rising for single and multifamily homes. lumb prices shot up after the trump administration imposed tariffs on imports from canada. the costs of drywall, concrete, and other products have also been risinsharply. and now, steel, which was cready upse to 8% last year, and aluminum up over 9% before the announcement on potential tariffs. this building was developed by the bizuto group, a major player

in multifamil n in thetheast and mid-atlantic. ceo toby bizuto said this will likely further exacerbate the cost of housing production which mayave unintended consequences with respect to the affordability of housing for the middle and lower class. luxury, not as much. because they're paying restorically low rent, com to their income. but he added that the market had been anticipating this, and already raising prices. so not a total shock to the system.n steel is every project, from rebar, metal framing for f drywalr railing, brick support, conpies, even concrete. aluminum is part of the electrical feeders, metal siding and windows. hoeel is used less in single family s, but there will be a ripple effect. the chairman of the national association of home builders said, given that home builders are already grappling with 20% tariffs on canadian stock lumber and that the price of lumber and other key building materials are near record highs, this announcement by the president could not have come at a worse

time. he also added that tariffs could hurt housing affordability, which had already been weakening due to higher mortgage rates, and higher home prices. for "nightly business report" i'm diana olick in washington. jcpenney sales missed the mark. the struggling retailer reported a disappointing holidayquarter, and says earnings and revenue for the year will be worse than what wall street was expecting. the store is cting an additional 360 jobs in an effort to get a handle on its costs. shares fell 5% to 371. the sales at foot locker were weaker thanex cted, and the sports apparel retailer says they will continue to be a drag. but executives see sales gradually strengthening by the year. of the foot locker dropped 12% to $40.04. >> microchip technologies is buying microsemi. it's a deal we told you about. today it was made official. the deal is valued at more thano

$8 bi and comes amid a new wave of consolidation in the semiconductor industry. shares of microchip rose 2.1% to $the 1.29. microsemiwas up more than 4% t $67.30. >> metlife revised its 2017 earnings upward after a view showed a miscalculation w made. the adjustment increases the ensurer's annual net income by about $260 million. back in december, metlife said it failed to locate some customers who were owed pension that prompted an s.e.c. investigation. shares of the insurer were o a fraction nonetheless, at 45.50. and an activistnvest in xerox has filed a new lawsuit against the company. he says that xerox refuses to let him make nominations to its board. despite missing a deadline. he said because the current board made a number of decisions and disclosures to stock holders after that same deadline that he should stille able to make

nominations. deeson is the fifth largestr stake holn the company. the stock fell more than 1.5% to $30.06. equifax reported better than expected quarterlies despite the effects of its mass data breach. the company expects costs related to the breach to rise t more than $430 million this year. and that means thencident uld turn out to be the most costly attack in corporate hi ory. equifax rose 5% to $117.23. it is time now for our weekly market monitor, who sees some goodes opportuni in real estate investment trust right now. otherwise known as reits. this is's first appearance as a market monitor. he is paul meeks, chief investment officer and portfolio manager with floyd, dahl and hope. welcome. >> always a pleasure. >> it seems coterintuitive in an environment where we're seeing interest rates rise, that you'd be looking at reits. why do you like them? >> well, just as buffett said,m greedy when others are

fearful and the other way around. i own all the techtocks that we've been talking about in the popular financial press, but one of the things that i find very intriguing, and compelling, and backed up by the evidence, that's veryso d, is right now the average reit in the united states yesterdays about 4.3%. which is about the same yield, as the typical corporate bond. andal typ the typical corporate bond has a yield that is much in excess of the average reit. maybe1% or2%. and when you have a spread, which is essentially no spreada at this type, which is a historical tightening, overhe xt year, reits do very well. they're up on average about 21 ating the market by about six percentage points. i think thisins very resting. >> so a 20% possibility here. your first choice is ari- core u.s. reit. this is a way to get exposure, and diversification within the , sect suppose, all at once?

>> it -- essentially benchmarks my favorite index, andhe nice thing is, of course, with the exchange tded fund, you have your diversification, of properties and companies, and also you're paying a paltry management fee of eight basis points or eight bucks on every $10,000 invested. >> next on the list, public storage, you see them everywhere. >> yeah. down the highway, north, south, east or west you see all these. so public storage, psa, has a yield of about 4.1%. a little bit below the average. but it's a much better quality reit than the average. and it has a return on investment, which is astronom astronomical. i think it's a great company. >> and the last one is well tower. it sounded to me like a cell tower company but it's anything but that. >> yeah it's inresting. well tower is a reit that specializes in health care facilities. particularly senior housing. and it's not the quality of psa

but it pace a yield and i think that the price risk has been squeezed out of >> on that note, paul. thank you so much for joining us. have a great weekend. >> thank you. >> paul meeks. and coming up, why americans are browing record amounts to buy new cars and trucks, even as interest rates rise. consumer sentiment hit its 2004.d highest level since according to the latest university of mirkz survey americans are generally optimistic about tax cuts and their job prospects. economists say that should underpin consumer spending,

which is the biggest part of the u.s. economy. americans are spending more on their revehicles, and the borrowing more money than ever to finance them. aew report sho outstanding auto loans now total more than $1 trillion. phil lebeau takes a look at what that means for car buyers. >> reporter: here's the reality. we're paying more than ever for the cars and trucks we buy. on average, more than $35,000. that means we're borrowing record amounts. in thefourth quarter of last year the average new car loan topped $31,000. and the average monthly payment was just over $500. spread out over five years and nine months. >> there's certainly schething to wn the fact that the payments continue to rise. you know, that the loan amounts continue to grow. especially this year we're going to be facing several rate increases. so we should expect to see those payments even climb probably higher this year. >> the rise in interest rates willin be hig more buyers taking out loans. so for someone with average

credit, the current rate is 5.2%. that's up from lt year. and if the federal reserve keeps raising rates, that will ultimately filter down to au loans. and push up the cost of buying a new car or truck. >> i think we were nearing a ceiling and i think consumers are responding to that. and that's why we're seeing consumers, especially prime consumers, increasingly move into leasing. >> leasing a car orruck is appealing right now, because on average, the monthly payments t tend be about $100 less than if you took out anuto loan. which is why the number of people who are leasing right now is close to an all-time high. phil lebeau, "nightly business report," chicago. some say car prices could rise if the threatened tariffs are enacted. ford today said that even though it gets the vast majority of its steel and aluminum from the u.s., the proposed action by the white house could result in an increase in domestic commodity prices, harming the competitiveness of american manufacturers.

and before we go let's take another look at the day on wal the dow closed down 70 points at 24,538. had been off nearly 400 points early in the session. nasdaq up 77. s&p 500 up 13 for the week. all of the major indexes were lower. >> what a week. >> what aha week. >>does it for us tonight. i'm sue her earp ra, thanks for joining us. >> thanks for me as well i'm riler mathisen. we hope to see yot back here on monday.

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