♪ ♪ >> this is "nightly business re rt" with bill griffeth and sue herera. upping the ante. the white house threatens new tariffs on $200 billion worth of chinese goods and economists are unding the alarm. >> portfolio protection. as prices rise, which stocks will get hit and which can weather the storm? >> ten years later indymac collapsed a decade ago, shocking the system and giving wayo the worst financial crisis in a generation. those stories and more tonight on "nightly business report" foe esday, july 11th. and we bid you good evening, everybody. the rumblings of a trade war are growing louder. the u.s. is nowte thrng new tariffs on $200 billion worth of chinese goods. china pushed back immediately and stocks fell sharplytoday.

the industrial average dropp 219 points to 27,400, snapping a four-day win streak expect nasdaq was down 42 and the s&p lost 19. oil was down 5% on the potential of weaker demand tied to the u.s. trade dispute wit china. kay kay kay kayla tausche has more on the super powers? handbag, sporting equipment and building materials among the new items in the crosshairs of the u.s./c the trump administration could slap tariffs on $200 billion on chinese goods on top of 0 billion already targeted. china last week began retaliating u.s. crops. the white house has prepared new etriffs in response. president trump tg from the nato summit that he's always thinking about our farmersng sa for years, other countries' trade barriers hav d beentroying their

businesses. china's commerce ministry said tuesday it would again hit back with firm and force will measures. experts say that tool box is >> china perhaps has a more diverse set of tools and is more willing to color outside of the lines. the u.s. may have similar measure, but we don't employ themiven our commitment to market values, the liberal economy. .s. companies are worried about rising prices and roadblocks to business. >> i don't tnk there's any question that china is a violator on intellectual property issues and that technology transfer. thos are all serious concerns. we share those concerns. i don't want to diminish that in any way, but do something about it, but don't do it through tariffs. >> they fear the white house's strategy won't work. >> no one at the white house can articulateit whas they're hoping to accomplish. that's what worries me. >> i think the president's negotiating and the longer you negotiate the better deal you get, but that's what's sonc ning because of the

uncerta uncertainty of it. >> kevin brady called for face-to-face tal between president trump and xi. the u.s. is open tongaging b there are no in-person talksd. schedu i'm kayla tausche in washington. >> as has been the case in the past chies was topond to the new tariffs. eunice yung picks it up from beijing. ♪ ♪ >> chinas it's shocked and that the u.s. move is totally unacceptable. the foreign mintry today called the threat american trade bullying. th commerce ministry said china would immediately fill a complaint to the wto and would have no bchoice, to respond with countermeasures though it would not respond what those measures are wondering now how china would react because china only imports $130 billionmeorth ofcan goods so even if itnt wa to match the u.s.' $200

billion teat it can't. china unveiled a plant to safeguard its companies and the commerce ministry says it has a four-point defense plan. first to assess the impact of tariffs on chinese cpanies to counter tariffs as relief for chinese firms, third, to encourag chinese firms to diversify imports away from american products especially for soybean, autos aseafood and to step up the use of foreign investments and use foreign money to helppo s chinese companies. the plan shows that china protr the united states. i spoke to one american ma busine who says more and more companies here are now also expecting thatarhis trade could be protracted because he said that it looks as though neither side willing to back down. he said that the only silver lining he sees with this $200 billion tariff threat is that it's a a10% tarif opposed to a 25% one.

for "nightly business report," i'm eunice jung in beijing. >> the price tag is starting to add up to real money for some economists and that means the risks to the economy are rising, as well. steve liesman has that part of the story for us now. a massive threat of $200 billion of new tariffs against t china by thmp administration has economists sounding much louder alarm bells compared to previous rounds in the trade war. the new worry is that together with raliation from the chinese, this round is so large that it could have meaningful and measurable negative impacts on both u.s.d prices u.s. economic growth. >> this is a bit of a dangerous ball game that we're a playing he if you look at the first case scenario and model out what the numbers look like, you could see a full percentage point hit t gdp and inflation higher. >> morgan stanley write, quote, we're testing the idea that disputes are contained economic event and they have eroding gains for fiscal stimulus. the chief economist at rsm says

it could be off of gdp all of the way off of 2020 and raise prices. products covered by the tariffs include parts for motor vehicles along with clothing, handbags and seafood. the administration said these tariffs were a resnse to china's retaliation against the previous u.s. tariffs. ote, china h shown it will not respond to action at a $50 billion level by u addressin. concerns with china's acts, po will see policies and innovation. previous tariffs are showing up in prices in the united states. the government reported today that wholesale lumber prices are up 23% compared to a year ago t followingiffs imposed last year. government reports washingnd machinesetal prices are higher and with the national retaliation federation labeled the trump tax. >> this is like a trillion dollars worthmi of eco activity potentially subject to tariffs. tariffs don't work. worked and they're not going to work this time

either. >> one trouble forecasting the impact of tariffs is the economists don't know exactly what trump is after. if these are negotiating tactics they could go away soon and have little impact and trump and his advisers say the tariffs are designed to protect u.s. industries and spur production domestically. if so, they could be around for a long time. for nightly busess report, i'm steve liesman. >> and steve just mentioned today's government report on prices. he was referring to the producer price index. the iex which measures the prices businesses receive for goods and services rose .3% in june from a month earlier, but it was the annual rate thatot all of the attention. it climbed 3.4%, a level not seen in six years. the reason w partlyue to a rise in transportation cost. rising fuel costs a becoming an issue for airlines. today american airlines which is the world's largest carrier trimmed its outlook for second garter revenuewth. the ceo in the past has warned of the need for higher fares

because of rising costs, and that stock tumbled 8% today and r airlines followed suit. in fact, thepo tras were one of the biggest decliners in today's trade. >> obviously, a nber of factors are driving up costs for u.s. companies. higher energy prices and tf threat tariffs and rising inflation could be seen as headwind, so howni will com contend with these pressures? joining us to talk about that is jason ware at albeon financialo good to have you here as always. >> good to be here. >> the conversation is ongoing what the fullow impact of that is going to be, but you make the point that even if companies aren't reacting right now it certainly is affecting their confidence. >> yes. that's what we' seeing early on and trade wars are bad and they're difficult to win, and depending on how long this goes -- gets drawn out if it's protracted we might actually start to see that filternto the decisions, the collective

ector onthe private how they, you know, how much they produce. the hiring andnsiring decis and investment decisions, et cetera. we're not seeing that yet, but what we are seeing to your point over the shorter term is that business confidence is waning a bit given that we just don't know woire this is to go. >> tight labor market means wage inflation and ergy costs means higher costs of production and shipping. cost ofs mon going up because interest rates are going up, tariffs are going up. >> it's a perfect storm now of inflationary pressures for corporate america. does this mean thate'll see less production down the road? i mean, we had a dearth of capital spending for f years because companies would build future factories becausece they were ain about the future. are we going to go baco that, do you think? >> the good news is most of these thing oos autthe core of r

question is it's a function more ofan aggregate d than any of the things that you mentioned while those things are certainly something management teams take makingcount when decisions at the business level, at the macro level, if there's demand for goodsnd services, then that typically warrants the expansion that is the hiring of human capital and the investment in productive and fixed assets and i don't think those things put usr are likely to back to where we were. i still think we're probably on a trajectory of more growth thae less, but t things are certainly causing businesses to pause and to perhaps reassess what's going on given the rtainties around trade. >> lots of things to think about. jason, thank you. >> jason ware with alon financial group. >> if you're protecting your portfolio from rising inflationary measure, the president of jewel financial with names of stocks he says you might consider and those that

you might avoid. you know, it's be a long time, quinn, since people have had to think about their portfolio.ng is that time near now, do you think? >>. >> i think we're pretty close. n that all ouest the variables that you mentioned toin b the show are what investors need to be thinking about and this is the time period where you need to ask yourself can this company pths inflationary pressures the customer and get away with it and that's where you have to segment out your discretionary staples from yo -- i'm sorry, your consumer staples from your consumer discretionary those companies that you have to keep buying from and those companies that you buy from when you have a little extra mey. >> so given that, what companies would you be looking a with maybe renewed interest if you feel that part of your portfolio may bene vble to those pricing pressures or inflationary

>> sure.es? this is your grocery store type stock so you just go through the aisles and you look at your& johnsojohnson, your kraft heinz. the companies, again, that you are not going to shyway from when they raise their prices. coca-cola, i mean, a wren buffett favorite, you are always going to continue to buy your coke whether they raise it a dime or 20 cents and then you look on the other side and you want to try to avoid, start weaning your portfolio away from companies tt are going to not have as easy a time to pass that through. that's you starbucks, for example. somebody, if they're $3 a gallon at the gas pumps may not buy that for $1.50 latte. look to that. they might smp and not take e family to a disney or something along those lines. so i think you have to be really looking through your portfolio and asking yourself, you know,

is this cheesecake factory a neceity? if it'snot, i think you have to consider selling those here? quickly, traditionallypa in the when you hear inflation and you think things like gold. are yougo thinkin here, as well? >> absolutely. i've been talking to clients about that but it has not yet responded. >> right. >> i think gold iy rea waiting to see those wage numbers increase which we have not seen yet, but in due time i think gold and the gold mining space will be also something to considerr for yportfolio. >> very good. quinn, always good to see you. quinn tetr joining us tonight. >> it is time to take a look at ome of today's upgrades and downgrades. dow component mcdonald's was upgraded, the analyst expects second-half comparable store sales trend in line with consensus expectaons. the fir lowered its sales estimates for this year and next. the sres fell 1% to58.62.

xas instruments was upgraded to buy from neutral at long bel research. the analyst there calls the stock a semi-safe haven. the price target is $134,th but stock fell more than 1% to 111.76. nordstrom was upgraded to outperrm from market perform at telsey advisory group. the alyst cited the upscale retailer long-term growth prospects and put the news price target at $57 and that stock rose 2.5% today to 53.42. twitter was initiatedh a reduced rating in new coverage at nomura. the analyst expects the social media company to report earnings below expectations next year. the price target $31 and that stock rose a fraction to $43.87. >> still ahead,ak we will you to the place where the blockbuster deals are born.

♪ it was a nato summit like no other. president trump today had some tough words for some of our closesll aies and it all comes down to money. eamon javers is in brussels with us tonight. ♪ ♪ >> most nato summits are a series of meet and greets with everyone in the military alliance signaling to the world that the countries are friendly, united and ready to fight to he defend each otr if necessary, but that message of hmony was shattered this morning in brussels as president trump had breakfast withnato's secretary-general stultenberg, and dished out some harsh criticism of germany. >> if you look at it, germany is a captive of russia because they got rid of their coal plants, they got rid of their nuclear and they're getting so much of their oil and gas from russia.

i think it's something that nato has to look at. i think it's very inappropriate. >> that prompted an immediate response from then german d minister. >> i do not really understand what he means by hard to say, but in general, yes, if there's a country in the region who has seen the change in russian behavior, that is europe and within europe it isf germany, ocourse. >> and it made for an awkward leeting when trump sat down with angela mernd both sides stuck to pleasantries. >>l think our trade w increase and lots of other things will increase, but we'll see what happens over the next period of a few months. >> tr wp's criticism directed at an $11 billion pipeline for russian natural gas and other european nations have criticized it for making nato too depende on russian resources. the psident is also frustrated by what he sees as low defense spending by european members of

nato. in brussels, he presseden them spd eaven morerehan their aged upon level of gdp up toet 4%, thatith a less than an ne news yaftic response from the seetary-general of nato. >> we have agreed to raise it to 2%. let's start with that. we have a way to go, but the good news is that they really started to deliver. >> tomorrow, president trump takes part in a multilateral session with the leersd adersnd georgiakraine and he'llnd fly to eng where he will meet with tresa may. i'm eamon javers in brussels. >> broadcom may be closing in on ca technologies. that's where weeg tonight's market focus. after the bell "the wall street journa reported the chipmaker was close to acquiring software firmor about $18 billion. the deal would come just months

after the white house blocked shares of broadcom initially fell in after hours and they finished the regular day on the down side by nearly 3% to 243.44. meanile, shares of ca tech initially rose in extended hours and finished the regular day up a tick to 37.21. >> activision blizzard is bringing its esports video game league mainstream, inking a multi-year deal with disney to broadcast matches on espn and abc starting today. e deal highlights t growing popularity for esports gaming and some market watchers expect to reach into the billions of dollars in just a few years. activision's shares climbed 3% to $78.61.10 disney rose to04. pfizer says it plans to reorganize into three parts in innovative medicines division and established medicines unit and its consumer health care business. the drugmaker is m stillling

over options for its consumer health care business which makes advil. separately, the company said it would delay price hikes on a number of its treatments aft it received criticism from president trump. pfizer shares fell a fraction to $37.21. industrial parts distributor msc industrials said that growth a e-commerce orders led t rise in earnings and revenue and even though profits were in line with estimates, sales missed the mark. the company also warned that it's beginning to see some prica ins from suppliers due to increased tariffs. shares fel 4.5% today to 80.86. >> fastenol, it delivered earnings that were well ahead of estimates. the company raised its quarterly dividend to 40 cents a share. the company was the best-performing stock on the s&p 500 today and it was up 10% to $54.51 and papa john's ceo has found himself in hot water once

again. the chief executive john schnatter admitted to using a racial slur on are cone call with analysts in may and he has apologized and admitted icehas no p in society. last year he created a stir ying that the sales were hurt because of the nfl's handling of players kneeling during the national anthem. shares fell to $43.33. >> it's that time of yeain a when some of the most powerful and influential media and tech executives go to s valley, idaho t attend the allen and company conference and this year the drama centers on deals. julia boorstin is there. ♪ ♪ >> in beautiful sun valley, idaho, deals are in the spotlight. specifically, the battles over fox and sky. win fox chairma rupert murdoch an comcast ceo brian roberts both here. fox upped his offer to sky to top comcast's bid and comcast is expected to counter quickly.

we asked murdoch if this could spark a bidding war? >> how high are you willing to go for sky?s >> tha it. >> that's it? not higher? >> we will see. >> the battl f for and sky imd the completion of at&t's acquisition of warner are expected to kick off the next wave of deals and the growing valuations of fox and sky speak to the growing value of premium content companies and thef scarcity acquisition target. >> there is an expectation that there's going to be more m and a terms the board just in of the media landscape. there have been a lot of deals that have happened a there's a lot of deals in process and there's only a limited amount of beach frontperty out there and when you think about what you're seeing in terms of some of the bleding cand the things happening today, the companies are trying to stay with thers consumend stay with scale. >> who are potential buyers? barry dillard, o chairmanf iac is reportedly lking at buying groupon and greg mathay is here.

no comment from jeff bezos when asked if hemp was buying a y for amazon and there's speculation that a giant such as amazon or apple will make a move into media. >> i think when amazon, apple and netflix can bring so much capital to bear to iest in content, netflix investingio bi of dollars a year in content, ittes necessitates so consolidation in some areas of thet industry and i expou will see a lot more of it. >> and it's not just t public media and tech giant here. the uber ceo is here, along with uber's softbank. he's interested in cybersecuri and a.i. companies and there are several of those companies speaking behind closed doors heret the conference. for "nightly business report," i'm juliaootin in sun valley, idaho.

>> comcast increased its over for sky to $34 billion. that trump's fox's earlier offer of $32.5 billion forhose assets. >> still ahead, so where were you ten years ago today? ♪ ♪ a decade ago a key event happened in pasadena, california. on this day in 2008 the fed seized mortgage lender indymac and that led to th gatest in a generation. we look at how far we've come. time.was a scary ten years ago in july 2008 people waited for hourso get inside indymac bank branches to

withdraw all their money. >> i wish i had known my bank better. >> i just hope to be able to get my money back. that's all. th is my life savings. >> we'll put it in another bank and that one might go belly up,a too, are you going to do? >> it goes around the block behind me to get into the headquarters. w >> the linese long and the entire country watched. >> that was monday july 14th, the fdic had shut down the bank to july 11 bthause ibdy mac had made too many risky mortgages and could n longer find investors willing to buy them on securities and earer ports that it had been on shaky financial ground had led to a flood of withdrawalre >> it wasy agonizing. >> sheila bair headed the back then, and there was $10 billion coveringan deposd not just to 100an grd. she then sold what remained of the bank to a group headed by steve mnuchin who renamed it one

west. >> at this point the market will stabilize and being a bank in that market will be an attractive opportuty for us. >> but the market wasn't attractive in between the 08. 25 banks disappeared that year and some of themredicted by analyst dick bove who doesn't think such a col happen again any time soon. >> at some point in time you knwi, w run a period where debt is growing faster than income and that will result in some sort of a setback for the financial industry, but it's not happeng right now,nd it looks like it will be tougher to make it happen in the future. >> we have the cfpb which i hope is still going to be continuing to operate and especially in the mortgaending space. we needed the mortgage lending standards and we have them now. >> looking back on that stressful weekend. sheila bair wishes she had not allowed indy mac's immediate overseer, the office of thrift supervision or ots to close the bank on a friday in the middle of the afternoon freaking out

customers. >> if there was one mistake, i still kick myself for that is we should have waited until the regular closing hours were over before we closed the bank. >> by the way, one other change since 2008? the ots no longer exists. for "nightly business report," jane wel, pasadena, california. >> seems like yesterday. >> ooh. that does it for us tonight. i'm sue herera. thanks for joiningls. >> i'm b griffith. have a great evening. we'll see you tomorrow. ♪ ♪

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