>> announcer: this is nightly business report with bill griffeth and sue herrera. >> earnings delivery. business seems to be booming at the big banks so why do investors run the other way and send those stocks lower? no relief. a perfect storm is swirling around the housing market as borrowers stretch themselves thin just to afford a home. fueling a crisis. an in depthor r tonight on the role bitcoin and other currencies are playing in the opioid epidemic. those stories and much more tonight on thenightly business report." it is friday the 13th of april. and we bid you good evening, everybody. i'm bill griffeth. sue is oks tonight. stinished the week lower today, and we will have more on that in just a moment, but begin

tonight with the banks and how everything seems to be aligning for this important sector of the economy and the stockmarket. jpmorgan, citigroup, and wells fargo all expected better than expected earnings this morning, f interesecause rates that are creeping higher, volatility that has resurfaced, randulations have been relaxed. but the stocks themselves didn't reac today the way you might expect. all three of them traded lower, despite those solid results. two big factors helped jpmorgan chase quarterly profit jump by 35% to a record of almost $9 billion. banks saved the bank almost a quarter million dollars and rising interest rates that helped push income up by 20% a year earlier because banks are now able to, could be a big plus for bank stocks. in a rising rate envirolent, ou really need for solid double digit earnings growt is

low-to-mid-single digit loan growth. because the rising interest rates give you a boost. hikes sank says the far have added abdom eed about n each in additional revenue. but it did say it would suppress this feature. citi's profit hit a high with a big boost from a 38% jump in equity trading sales. the uptick in the stock market volatility has been good for banks, volumes are up, and trading revenues are up too. that has analysts upbeat, ahead of the reports from the rest of the big bank like goldman sachs, bank of america, and morgan stanley. >> equities are especially strong, if you want to play theh equity stre you want to move into morgan stanley. so we like tha setup a lot. i think the stronger banks are going to continue to get stronger. so i would say b of a and morgan stanley are set up quite well. >> reporter: wells fargo's profit was better than expected, but revenue was down almost 2% s wells iar ago, still dealing with regulatory

fallout. it's considering a $ billion offer to settle civil charges related to auto loans and mortgage rate fixing. a potential charge that may be holding pts stockce back. >> it's cheap for a reason. and it feels like a value trap, i think, to a lot of folks at this point in time. they seem to be in that dunce cap relative to the fed, so it's tough to get excited. at some point, the stock price it, respond, but right now just feels like it's a bit snake bit as a >> steve dodash joins us now to talk more a tbt the banks ttonight. he i president of iht wealth management. thanks for joining us, steve. always gyod to see >> good to see you bill, too. >> what's your version? why do you think the stocks sold off as much a they did today? the bank stocks i'm talking about. >> the panic stocks sold off because we all knew this quarter was going to be the big quarter. er since the t bill was floated out there last summer, we were all leading up to thish point, ands why you saw

the bank stocks have alamo but it isn't about what they did in the past, it's about what they thought they were going to do moving forward. we needed them to crush, which ey did, but we need them to continue to crush and to continue to grow at theey rates e been doing. 30% a year, year over year, you can't have that over and o again. so we need to see more strength. we are in a goldilocks piod right now for banks. it's not unrealistic to think but certain bank stocks like wells fargo have a whole problem going on that you kind of have to avoid. yeah, you would not touch wells fargo right now, right? >> no. no,and, listen, they'll get through this eventually. it's a good company lo-term, but they're kind of going through what facebook's going through right now, and that is, e regulatory eyes are all over them. they can't get aggressive with sales, tactics on the inside of the bank, at least not for the next couple of years. flost w there's no way they'll be able to keep track with the j.p.s anm bank oicas of the world. we were on your show three years ago talking about how good they were on the retail side, but the proboom was they were too at it and doing things that

weren't up and up, and because of that, now you're seeing the pullback. so it's a value trap. you can't gous after it because it looks cheap. there's a reason why it's cheap. >> and we get more reports next week. do you expect them to do as well as jpmorgan a citibank did today? >> bank of america, you'll probably see the exact same thing on monday. you'll probably see the stock pull back a little bit, becau it's going to say, we beat earnings, we did great, but everyone is going to be like, we knew that. oving re you doing forward? i tell you this, though. it's a wonderful sector to be in. you pick a few of the stocks in there, you buy in on this little p that's going on right now. the next year or two, they're going to be raking in money. you're going to see some huge profits out of that sector, because of what you guys were just touching on so if you're looking for a sector to get into, it's hard to argue with that area right now. >> so this is all dependent or at least in part dependent on the fed continuing toaise rates, right? >> but they're going to. we all know they're going erto. s at least three more rate hikes going. the real question is, do they continue this next tyear?

he reality is, even if they don't do anymore dramatic three in a year type hikes next year, with the tax regulation where it is right now, that benefits the company like a bank that much. and with the rate hikes, you know, your savings account'tates aroing up, but those loan rates are definitely going up. that spread is there. take advange of it. the reason why we haven't seen huge profits where, yes, some ol the tradinge on it, the investment banking was down, but with all of the extra flow that's going ohere right now, investment banking is going atto pick up. , you know how it is, it's choppy in that area. so take advantage of this little dip, buy in at some nice prices for the right stocks and move forward. >> and we will do that now,a a matter of fact. steve, always good to seeou. >> take care. as for wall street, the decline in bank shares did push the broader market lower today, adding to the political and trade tensions that have been weighinghe on market lately. when all is said and done, the dow was down122 points today to close at 24,360.

the nasdaq was down 33. the s&p down 7. despite today's decline, ther ma averages were all solidly higher for the week. and by the way, oil pricesir posted t first weekly gain in three weeks, settling at their highest level, get this, since early 2014. now, some of those tradens ns hit one stock in particular today. that is boeing. but the rhetoric ts time was coming from russia, not from sina. lawmakhere in russia have proposed a set of measures that could half the supply titanium to the aircraft manufacturer. a proposal is in response to sanctions recently imposed by washington. shares of boeing were more than 2% as a result in today's trade. general electric is restating its 2016 and 2017 earnings due to new accounting thods. now the restatement is important to investors in this widely held stock, because, as we've been reporting, ge has come under

fire for its lackluster performance and bighaes and in an s.e.c. information. ge's new ennan has numbers for us. what do they tell us tonight, morgan? >> reporter: well, bill, i will tell you, in this latest filing fla that prints out to about 32 pages, it's lot of details and a lot of numbers, but the takeaway for investor that is ge restating its earning lower than share and its 2016 earnings 13 ecents lower than priously had been reported. what's perhaps most surprising in this filing that we have just inceived is the fact they're also rev lower their revenue numbers for both of those years. it speaks to the fact that tmey have imped this new accounting standard that is market wide and it really epquires them to change the way they'reting revenue on long-term contracts. but they are also implementing t some ofir own new changes to their financial accounting and their methodolo and that, too, has lowered revenue reported for both 2017

and 2016 by several billion dollars. why this matters right now, well, while wall street was largely expecting these numbers to come out and for the company to restate, it comes ahead of earnings, which we g next friday, and which everyone is watching so very closely, as the new management team in place heoks to move forward on its turnaround for struggling industrial. >> before you go, this is important. very quickly, these new numbers, do they say that these are -- they're reporting these numbers now simply because of the accounting change or in part because they were overstating earnings and revenue before? >> i think the earnings themselves were restated because of this new accounting change.pa the c has been signaling that this would be coming for the last several months. i have actually seen this in other industrial companies that i follow, aswell,ver the last several years, in anticipation of this new rulein t effect for 2018. that said, they have made some of their own changes and we're

seeing that play out in the revenue n bers that they've just restated for the last two years, as well. >> and we'll see how those earnings are next week. morgan ennan, good job. thank you. time to take a look at some of today's upgres and downgrades. netflix's rating was raised from buy to hold at deutsche bank. the analyst there sts t netflix has changed the industry in a profound way and in doing a so, i given itself a significant lead over competitors. the companyeports earnings o monday, by the way. price target was lifted to $350 a share. shares of netflix today rose fractionally to $311.65. starbucks' rating was cut to market perform from outperform at keown, the analyst site krooiting concerns about kraft coffee competition and questionable customer loyalty. price target was lowered to $65. that stock fell slightly to 9.24. eli lilly's rating was raised from underperform to market perform at bmo capital. the analysts there backing aivy

from neg stances he's had on the stock for the past year, saying that many of the h obstacle previously cited are now priced in. price target was raised to$79. the stock wasp cents to $79.72 today. and dropboxthich recently w public was started with a reduced rating by nahmura instanet. the company cited the low rate of converting users into paid subscribers. the price target is now $21. the stock closed the day down 9% at $30 even. for till ahead, looking stocks that could benefit from a stronger consumer and a growing economy? well, our market monitor has the list of some namescoming up.

president trump has recorderedrecorder -- ordered a review of the postal service. f the ued a review system. the agency reported a net loss of $2.7 billion in fiscal year 2017. te president did not mention amazon int order, but, of h course,has been vocal about how much the postal service l e loses onam eacon package that it delivers. mixed signals from fed y. officials to the president of the boston fed said more hikes may be needed than the cenal bank now expects. eric rosengren believes that the labor market may tighten even more and that inflation is likely to run a bit hotter. r e fed has targeted three rate increases this yd three more in 2019. but separately, james ller, the president of the st. louis fed took a more bullish stand and said tan central does not need to raise borrowing costs much further, despite the recent reports of higher inflation, which he says were about as expected. scking with the economy,

consumer sentiment recorded a bigger than expected decline this month. the t university of michigan survey slipped to a three-month lull amid ongoing uncertainties among u.s. trade policies. but we should point out that i is still remaining historically high at this point. separately, a new report from the labor depar shows that businesses posted fewer job hopings in february previous month. in january, openings hit a. reco the figures suggest a healthy job market in favor of job seekers right now. and it is that time of year with sentiment levels evaluated and the job market tight, many folks a headi out to buy new homes. but if you're going to an open house thisweekend, hold on to your wallets. it's getting much harder to afford a house. diana olick has f that stom washington for us tonight. >> reporter: in the heart of spring, it is t perfect storm. home , pricterest rates, housing demand, all rising amid a critical shortage ff homesor

le. it's slamming affordability and causing more buyers this spring to overstretch. affordability is pro tcted to weaks year at the fastest pace in a quarter century, according to arch mortgage insurance. affordability, which is based on payments,er's monthly we can buy 5% in the first quarter of this year and could weaken by another 10% by the end of the year. some markets will be worse. the average monthly house payment in tacoma,sh gton, could increase 25%. in baltimore and boston,p 21%. philadelphia, detroit vegas could also see 20% increases in the average monthly payment. we keep thinkingt's going to get better. and it's not getting better. >> reporter: teresa taylor has been selling homes for almost a decade and says she is seeing more buyers than ever getting in over their heads. >> we have some concerns when we see people putting so little down, a small earnest money deposit money down, and you can literally see on paper, you can see them stretching to make this

happen. and if there were more inventory, that wouldn't be happening. >> reporter: and the risk rising. the share of borrowers with debt payments of more than 45% o their income more than tripled in the second half of last year and continues this year, according to core logic. part of that is that fannie mae loosened its standards a bit, waiting.rly, demand was the bulk of demand is at the entry level, but that's where supply is igrst, where end homes are more plentiful. >>ra rising homes, i think that's going to increase and magnify that divide between what's happening at the top and bottom of the rket. >> increasing the divide between th haves of housing and the have-nots. i'm diana olick in washington. general motorss cutting jobs and that's where we beg night's market focus. the auto maker says it plans to eliminate more than 1,000 positions atts ohio plant due to falling chevy cruz sans.

the locathat makes the compact vehicle has experienced weak we weakening demand. gm shares off a fraction t 38.73. pnc financial i said that quarterly results were held by unitgth in its commercial and by higher interest rates. earnings at the regional bank were in line withte esti but revenue came in a little light. the bank says it plans to set aside more money this quarter for loan losses and added that loan growth is likely to slow. pnc shares were off by 4% to 145.46. antesla's ceo, elon musk, said that he expects the automaker to be profitable and cash flow positive in the third and fourth quarters of this year. musk also reiterated that the company would not immediate raise additional capital this year. that upbeat outlook lifted shares ofy tesla 2% to 00.34. and alaska air reported a 6.5%

rise in traffic in march from a year ago. the airline also a gave upbeat outlook for the first quarter overall. shares soared by 6% to $63.95 oday. now to weekly market monitor, who is positive on the economy. he has o a list companies that he says will benefit from strong economicrowth and consumer spending. he is john treanor, the chief investment officer at people's united wea.h manageme john, welcome back. good to see you. >> good to be here, thank you. >> do you think that the -- that your feelings about the economy are reflected properly in the stock market rightnow? >> well, we think the economy is doing very well. there's a lot of give and take in the stock market right now. and actually, we thk there's a little excess nervousness in the stock market right now. if you take a look at the economy. the stock market should be doing little bit better. and we think that this volatility is actually giving investors a little buying opportunity in the market right now. >> well, let's loo at three stocks that you like right now.

and the first one, right out of the bat, amazon. i can never remember a time when there hasn't been any skepticism about jeff bezos' company, but it seems to be especially high right now, with the president tweeting about it all these days. you like amazon here, i guess? right? >> we like amazon, becuse if take a look at what's going on in the retail amazon is dominating the conversation there. you know, thens transact whether -- wherever you're shopping, transactions are online, amazon is leading that. you're correct in your prior comment that some of the turmoil in washington has given vestors, we think, a buying opportunity in a very good company that's really positioned nicely for the years ahead. >> and how important is its cloud business to your forecast, as well? >> the cloud business is critical. if you take a look at amazon's income statement, almost virtually all of their income is coming from the cloud business. so, we want to see the cloud business connue to dowell. we think it will continue to do well. but that will support the rest

of their business going forward. >> wre focusing on the banks right now with them reporting the moneyespecially center banks, but you like the regionals. and in particular, you like key? bank, ri >> correct, correct. headlines today were primarily about the larger money center banks, but we really think that some of the regatory changes that are in process right now will help the smaller regional banks. the regional banks are also more exposed to the domestic economy. so, you know, yes, the banks were hit today, but we think gog forward, as your prior guest said, we think the banks are set u for very good earnings growth. >> and finally, quickly, if you can, one of the grand old companies in technology, you like microsoft here. >> we do. when you see turmoil in the market, you tend to want to own the bigger companies and microsoft in our tech sector is e that we want to make sure is in every client's portfolio. >> well done. john treanorlways good to see you. thank you for joining us tonight. >> thank you. >> john with people's united

wealth management joining us tonight. coming up, how bitcoin and other cryptocurrencies are being used to finance america's deadly opioid crisis. as you no doubt know, america is facing an opioid crisis. overdose deaths are increasing and so is the enomic cost. and it's being fueled in part using bitcointond other crcurrencies. elylan mui is following the rept for us in this special report tonight. >> reporter: there's a new generation of criminals quietly driving the deadly spike in opioid overdoses. they're flooding the country with the illegal drug fentanyl and they're hiding behind bitcoin. here in utah, authorities accuse

these crypto-savvy college ks of routing the fatal narcotic through surban salt lake city while working att an ebay call center. >>hey were entrepreneurs looking for ways to make money. they are alleged to have gotten into a dark hole. >> reporter: a dark hole that startehe on what's known as dark web, an encrypted online networkri wherenals can conduct their business.s site like google or cnbc.com, that's jt a tiny sliver of the internet. experts believe the dark web makes up as much as 94% of what's online. access is fairly simple, but requires a special browser. matthew swenson is a cyber crimes special agent at the department of homeland security. >> we're going to take a look at the tor network. >> reporter: he shows cnbc how easily the to network can disguise his identity and location. >> there's going to be a series of reys, basically, which are different computers that the traffic is going to bounce in between. >> reporter: and is that what makes it private? >> correct. >> reporter: so people don't

realize we're in fairfax, virginia. the dark web looks a lot like the openweb. sites like this operate like ebay, but sell illegal goods, as well. goods are clearly displayed and sellers even have star ratings. their preferred method of payment, bitcoin. >> this one, the i unit price tcoin which is about $4,580, looks like he only accepts bitcoin. >> reporter: while evean bitcoin ction is public, no one can see who owns the coins. that makes it appeal to crinal, seeking anonymity on the internet. but demand for both bitcoin and fentanyl is so hot right now, dealers are spilling on to the open web, even offering discounts for payme in bitcoin. >> we need to continue to be diligent. and one of the ways that we do that is through our border enforcement security teams. we're right on the ground, at these mail facilities. >> reporte facilities like this u.s. postal inspection station at new york's jfk

airport, where customs and order protection estimates 40% of all fentanyl mail seizures go down. >> reporter: customs officers have to search all of these ckages, either by hand or with one of the dogs overhere, to people fentanyl that have bought online, usually with bitcoin or another cryptocuhiency, and haded directly here to the united states from overseas. you put the packages through an x-ray machine and if they find something spicious, they can open it up right here twob so s there's a white powdery substance inside. then they take it to a detention center wherees it, scan it and find out if there's really fentanyl. this fiscal year, they found 150 packages of fentanyl. >> the majority are c china and hong kong. >> reporter: and these products are being bought online? >> absolutely, using the dark web. >> reporter: why not of fentanyl are you seeing come through here? >> the fentanyl we're seizing

here isut 90% pure, which just a couple of grains will create an overdose for you. >> reporter: ohio is ground zero of the opioid epidemic and fentanyl is thef leading cause drug deaths. lucas, who asked us not to use his last name, seov on heroin laced with fentanyl five times before ending up here, the mary haven treatment center in columbus. lucas got his fix from a local drug house. the end of the linepln a s chain that's killing an average of 45 people a week in ohio, a bona fide seller's market. >>ld you w ask the dealers, where's the dope that's killing people? you seek that. >> reporter: you want the dope that's killing people? >> basically. >> reporter: as a kid for krcryo tells cnbc, their sdies show a different story. >> cryptocurrencies don't kill people. opiates are kling tens of thousands of people a year. >> reporter: but in utah, bitcoin is what authorities say financed erin amos fentanyl enterprise, a supply chain that

investigators suspect caused 28 deaths after users overdosed on his pills. eden police raided shamos' home and all stash house, they seized bags of cash and at least 500 bitcoins aording to court documents. they were worth about $750 each when he was arhasted. >> the alleged that they were going to forefit it a som point. usually you would expect that to be done when a case is soed, when a defendant issed ed adjud. but in this case, the value of bitcoin was going intosa the ths of dollars, even over $10,000. so the government came to us and said, this is a valuable asset. we don't want to lose that value. >> reporter: shamo, w declined to be interviewed, is pleading not g slty. his triarts in august. and if convicted, he faces a mandatory sentence of life in prison. for "nightly business report," i'm ylan mui. >> and you can read more about cryptocurrencies and america's opioid crisis on our website at nbr.com. before we go, another look

at the day on wall street, on this friday the 13th. the dow fell by 122 points to 24,360. the nasdaq was off by 33. the p down but despite the declines today, the major averages did finish solidly higher for the week overall. that is "nightly business report" for tonight. i'm bill griffeth. thanks so muchor watching, everybody. have a great weekend. we'll see you again on monday.

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