this is "nightly business report" with bill griffith and sue herera. >> all-time highs. the nasdaq closes at levels neveorseen b as key tech stocks power higher, but what happens when those leaders start to falter? full steam ahead. the fed chief says the economy is on solid footing and investors should expect mor h ratees at least for now. >> laying the groundwork as lumber prices rise,ar producers scrambling to hire workers and expand their business. those stories and much more tonight on "nightly business report" for this tuesday, july the 17th. and we bid you good evening, everybody. sue is off again tonight. thar hottest of the market got a little hotter again today. technology stocks led the nasdaq to let another record close.

its 24th of this year. amonghe tech giants, amazon hit another new all-time high, alphabet and microsoft also rose, but shares of netflix went the other direction today down more than 5% after reporting disappointing sscriber growth numbers which we told you about yesterday. when all was said and done, the dow rose by about 5 points to 25,119. the nasdaq wasp 49 in that record and the s&p added 11. despite the nasdaq's all-time high and the continued rise of the otherhe major averages, are some troubling issues that threaten this bull market's future. mike santelli takes a look now at the storm clouds hanging ove. the mar >> the stock market's condition is always in the eye of the holder while many investors have been heartened by the recent climb to within a fewt percenf the record high, the owling of market bears has only grown louder in the last six months.

so what exactly are the bears saying to looking shaky and doa they a good case? the bear's argument often starts with bonds and the stubborn refusal of long-term treasury yields that climby convincin above 3% even as the federal reserve pushes up a short-term rate and it's a classic leading indicatorive's recession and the fact that this economic expansion is nearly the longest in history and trade war fears are flaring and then there is the chart the stock market's 2018 gain of a bit more than 4% has been driven almost exclusively by a handful of huge tech stocks such as amazon and netflix. there's also peak activity everywheremi it's the eco momentum and corporate profit growth is peaking as the initial tax cut boosts, and small business confidence are set to represent peak optimism. so do the bears have a point? while it's true, theof narrowin yields between short and long-term bonds is a commoer

pa toward the latter part of an economic cycle, it isca tyy seen a year ahead of a recession and some would argue long-term yields are artificially lower while rock bottom rates in europe and japan which weakens their economic signal. s as for theposed narrowness, it's true that dominant tech leaders have a ounted for more of this year's gains and it's not like the rest of the market is outright weak. small cap indexers up more than 10% and more than hal of the s&p 500 are positive on the year. as for peak growt concerns, there's little doubt that momentum will slip in the latter part of the year into 2019 and bull anot unusual as th market matures and they can avoid deeper, lasting losses so long as th economy avoids an outright recession and companies can post modest profit growth. bottom line,t's the typical nditions it sur farcfaced and m of these indicators have very

long and uncertain lead times with tougher times and none has a perfectrecord, even then. even if it's no longer early in the game, it doesn't mean the bull market is about to end. for nightly business report i'm mike san tolly. >> make just said the tech stocks have been pulling this market higher and one of the best-performing stocks this year, but it was one of the worst performers today following those disappointing subscriber numbers. the pullback in that stock got us thinking about its importanct broader market and what might be next for that streaving o juggernaut. julia boorstin picks up that part of e story for us now. >> netflix ceo reed hastings attributing the streaming giant's disappointing subscriber growthnd not to any internal issues or to competition, but to the challenges of forecasting and typical dips in the second quarter. analysts are now looking at what netflix needs to do to justify its valuation. >> the key is can they get their

mojo back in gear in the quarter that we're in right now, the third quarter and create content that people care about a lot more than they did last year? you know, last year in the second quarter, they had to show 13 reasons why which wasy hug impactful and tons of buzz. nothing in this quarter came close to matching that. >> but analysts are still optimistic aenut the pal for expansion especially internationally. the second quarter was the first international streaming revenue surpassed the revenue from domestic subscribers and that trend will only continue. >> the growth will come internationally and netflix's y numbers frterday was a little off and not off that much so it's not that bad. the question for netflix's future, the impact of growing competition. looking forward, hastings says he expects the combined at&t and warner media and fox and its buyer disney or comst to be more formidable rivals and also pointing to disney launching its

service next year. >> the other issue, netflix will lose disney movs on the site hen disney launches its o service. >> i think they feel they have to have it all especially with the disney relationship which s been a source of movie content for them and that's got to create a hole that they're going to fill which is whyu' see them focus that more than they have in the past. >> they're still growing viewing hours among the 130 million subscribers and nvesting $8 billion in content this year to keep those subscribers hooked. for nightly business report, i'm julia boorstin in los angel. >> so what does netflix' bump in the road mean for the high-flying tech stocks? mike bailey is director of research and joins us tonight to talk about this. anks for joining us. >> the so-called fang stocks, facebook, amazon, google and alphabet now and maybe a couple others, facebook and microsoft, they've seen the lion in the marketains for the last several months. is that a good thing or a bad

thing? >> i suppose that depends on your perspective. you've owned some of them or all of them and that certainly has helped a you tak a broader perspective. i think you're always going to ve a bell curve and you'll have winners and losers. five or six companies have been winners for a number of years now. you know, i think we can talk about possibleort of rising risk, if you will. you'ree seeing m sort of market value get concentrated in a few names and that's the fear side and the flipside is look at the fundamentals. the earnings are growing like crazy and they're really sort of backing up investor excitemenla with d and cents. as long as that continues we know these names will contiroe to nicely. >> clearly, it's not lost on anybody that these stocks are seeing good fundamentals, and a lot of people feel many of them are very expensive rig now. so when you start to see maybe a little peak in growth where you're hinting at netflix here with this disappointing subscriber growth number, the

question tbecomes doy go sharply lower and when that happens, what happens to the restf the market? >> great point. >> to connect those dots we try to kind of keep it simple and we essentially think that stocks chase earnings and we keep an eye on earnings for these companies. we take a look at netflix, for example, they have a history of oner two quarters off and five or six on. so the question is they have one tough quarter and maybe they have another one or so, but i think ty stillave a pretty good runway. the fundamentals probably continue for them. the question is howo ey broaden it out to the rest of the market and the other fang stocks. >> the drivers are fairly different, i'd argue. so i think maybe a slightly more bullish view would be thinking that, okay, you've got five or six fang stocks and maybe there's more riskn the market, but fortunately, those risks are really divided out across different areas. you've got media with netflix.

you've got advertising with the google or facebook. you've got smartphones in one hand and e-commerce with e amazon and cloud computing been a lot of different things happening. i do think tha does help to diversify that risk out from concentrating into the five or six namesng >> are you ahose who feel that eventually whenan the stocks you get leadership from other groups and the financials and the energy and t industrials and some of other usual srngs if you will? >> absolutely. so i think the key question here is what's the rest of the economy doing? sof we're -- if the economy is running a little hot right now we, that might slow down over the last year or so and if th economy is still running two-h percent, you can see the energy and financials and other areas and however, you're probably not going to see another grune of mega-cap companies doinge what fangs are doing and i can't think o any traditional blue chip and financial companies at's the upside that the fangs

do. but you could have a company, for example, health care sort of boring staples and defensive health care. unit t health and it's second largest health care company in the world and you cat nly have some growth call it 20, 25% and you might not have the 80% or 90% growth like netflix and amazon. it's still pretty compelling. >> i eoyed the conversation. mike bailey from fpb capital, thanks for joining us. >> thanks for having me. johnson & johnson was the best-performing stock after we reportednetter t expected results fueled by the company's pharmaceutical andedical deviusinesses and results from j & j's consumer unit were weak and that's not worrying the company's cfo. >> it's a business that we have strong plans for in the second half with the relaunch of not only the baby brand, but also a mber of new product introductions. >> overall, the investors like

the reportnd the sto is up 3.5% in today's trading. shares of united health they moved in the opposite direction and the nation's largest health insurer fell more than 2% making it the worst performer in the dow today, this despite a double-digit ris in profit and an upbeat outlook. as bertha coombs explain, it all comes down to >> united health saw membership growthcrs its medicare, medicaid and commercial insurance plans as well as its awesome data and medical care andrmacy benefit units and some unit revenues during the quarter were not as strong as analyst estimates while medical costs were a little higher than expected. that doesn't wor united investor les plunklater. >> negligible, but we're so used to united bting numbe that when they didn't quite beat number, i think people got nervous. >> but ceo david wickman, a n ort investorse company's earnings call and he feels

united should be doing better especially when it comes to technology to make life easier for members. >> by most measure, i don't want to leave you with that point of view, but by mostmeasures, the company of a capacity that this one has, i just believe we should be able to move faster with great are spe and agility to respond to emerging market demand for these kinds of services. >> he pointed to the growth of united's rally digital platform toarn rewards for maintaining wellness all via mobe. >> we need to get these into the hands of consumers faster and the effectiveness of health systems and the health of op . >> and consumer tech giants like amazon, l pill pack, they're increasingly feeling the pressure and that's because fealth care is becoming consumer oriented because amazon or in

spite of amazon. so to the extent that it helps all of these businesses become more consumer friendly, i'm all for it. al notably, one poten challenge united did not mention was the trump administration's proposed drug price reforms with proposals still in the common period. analysts say new rules that might impact the pharmacy benefit's business are still leakly several month away. for "nightly business report," i'm bertha coombs. >> and yet another dow compone gashgs hacomponent goldman sachs had another blowout quarter exceeding estimates. revenue was becter than ed in every major business unit except trading, but the stock slippeder slightly a goldman said that the legal and regulatory costs rose during the quarter. goldman sachs also made it official what we have been reporting and namely that david solomon would take over as ceo on october 1st. one of his challenges would be to continue to focus goman's mo famous business, dealmaking

while also expding the tomorrow's newest business, its consumer division. time to take a look at today's upgrades and downgrades with d component intel that was downgraded from in line to outperform a ever corps isi and the analyst cited major competition from nvidia and amd. the price target is now $54 with the stock down a fraction today at $51.75. goodyear tire was given a rare sell ring by goldman sachs. the anast cited an increase in raw material prices and price targha now $18 ands fell more than 1% to $22ven today. >> tribune was upgraded to overweight from equal weight ate stephens and analyst there is dismissing those new fccns concbout tribune's proposal with sinclair broadcasting. it willo still in its current form. the stock rose more than 3% to

$33.32. till ahead, an industry that is breaking ne ground as it builds upon new opportunity. federal reserve chairman, jerome powell told lawmakers that strong economic growth should keep c thetral bank on track to gradually raise short-term interest rates. he made those comments before the senate banking committee as part of his misenual report to congress and our steve liesman was there. >> fed chairman jerome powell lling congress that the best way to keep the u.s. economy growing is to continue raising interest rates. in his semiannual testimony before the senate powell gave a solid outlook for the u.s. economy saying the job market is strong,unemployment will fall further in the months ahead and

inflati flation has more or less hit the fed's 2% target. >> i think gradually raisings ratese way for us to extend this expansion. nothing hur working families than people at the margin of the abor markets more than a recession. >> powell said wages were not rising fast enough yet to cause an inflation concern. that wassi something of a dovis omment and they had without sparking inflation and it was too soon to be helping wages right now and the ultimate effects of all of the fiscal policy and the tax cuts and additional spending wild be to gauge. overall, the tuts have had a positive impact on the economy. though powell tried toteer clear of direct comments on the trade controversy because he likeroto stay away politics. he did offer something of a generic warning. in general, countries that have ined open to trade that have erected tariffs have grown faster and have had higher incomes and higher productivity and g countries thatng into a

more protectionist direction have done worse. that's the imperical report. >> there have been some reports of businesseanceling or delaying capital spending plans because of the tariffs and he t held out hopet better trade agreements can ultimately come from the process. they'll sit before the house tomorrow in day two of his testimony. for "nightly business sreport, i've liesman in washington. >> the fed chair also made the case f housing finance reform. mr. powell said he thinks it is important in theg run that the housing finance system get off the goverent's balance sheet. as you may remember, freddie mac, and fannie mae wereut a decade ago. >> even as the cost of materials rise, lumber prizes for one havp risen s after the u.s. imposed those duties on canadian lumber last year andhat has spurred domestic lumber producers to expand production. dian olick is in maine for us

tonight. >> in the woods of central main, lumber is moving a lot of logs. cutting lumber day and night as the company's co-president jason b et bros hushgs oue the groundwork. >> in the economy and the housing market. >> and in the value of his commodity. framing lumber shot up 50% in the first half of this year to a record high. as a perfect storm swirled around canadian supply, forest a fire, aportation shortage and new duties imposedn the u.s. >> in 2017 we expect the tariffs to increase b 13 1400 and it's gone way beyond t current impact is $7500. >> a blow to the botto line of home builders and buyers and a

boom to u.s. lumber producers. t the duties te in place, that's given us a level of confidence that we didn't have before that we have a level playing field. >> he's putting $20 million into his business, planning to expand production by 50% in the next two years and adding 40 more workers to the 300 he already employs. >> the canadian lumber duties ape giving u.s. producers both the cal and the confidence to increase production, but there is one thing the cannot grow in these forests and that is steel. the u.s. just slapped new tariffs on chinese steel, aluminum and machine parts, increasing the cost to expand mills like this one. >> he claims he's not worried. >> it's not a factor in our decision making. we're not looking ahead saying oh, gee, stuff might be more expensive. we better hold back. we feel confident that we'll be able to put in the equipment we need at the price we need to put it innd expand and grow and

we're going do that. lumber prizes have been rising for a year, but so far, saw mill employment and production are both flat. >> we've seen a couple of percent increase in the volume lumber production in the united states and he's not keeping up with the demand, g particularly twth in single-family construction. >> whichca means ame homebuilders won't see much relief in the short term even as u.s. lumber producers take made in america to a whole new level. for "nightly business report," i'm diana olick in dover, maine. united continental raises its rfull-y earnings forecast and that is where we begin tonight's market focus., after the be the airline reported better-than-expected results thanks to adding mor flights and in turn, that was raising its profit outlook, b united also said that rising fuel costs would cause it to trim its capacity growth estimates for 201 shares were initially higher in the after hours. they finished the regular dayp

a fraction at 72.62. also out after the bell tonight, railroad operator csx delivered earnings that topped expectations. csx said it hoped to reach it by 2020. csx shares inibletially rose an thed e $64.44. >> charles schwab's profits rose at a faste than expected clip. total revenue at the brokerage also picked up and tped estimates. shares rose more than 3.5% to $52.88. omnicom group said that strength in e tope wasn't enough offset a loss of several clients in its domestic business. as a result,y the ad age reported weaker than expected sales growth and warned that revenue could stille pressured in the coming months. shares were off more than 9% to $70.69 today.

>> also late today, texas instruments saying ceo brian crutcher has resigned after it was revealed that they violated the code of conduct. the current chairman will take over as chief executive and president and wil continue to serve as chairman as well. shares were lower after hours on that news, b they did end the regular session higher by 1% to 115.80up coming , it's fast,urus and one of the rarest cars around. ♪ ♪ four states sued the federal government today to avoid the new cap on the federal deduction for state and local taxes. he states are new york, connecticut, maryland and new jersey.

they say the $10,000 cap disproportionatearms high-tax states and the ndesident's home prices, spending job economic growth. the lawsuit comes seven months after the pntsident signed law that 1.5 trillion tax overhaul that included the deduction p. it is the most expensive car in the and the first one to come off the assembly line was delivered today to a man who bought it sightranseen. robert was there. >> imagine buying a car without ever driving it or seeing it and imagine that car cost $1.3 million. michael fuchs admits he's more than a little car crazy. >> congratulations. >> thank you. >> mhehael was t first in the world to receive the new million dollar super car fromclaren. it's called the cena and it sold launched. it was even they're only making 500 and we were there as it rolled off the truck and michael got his first

look at his new rid >> seeing the car. wow! that's all i can say is wow. >> the ceremonial car delivery has become aew battleground r the world's ultra luxury car company. most of us just get a key and r mats from the dealership, but super car companies are staging elaborate events with celebrity, social media campaigns and top executives there for the handoff. michael is one of the top car collectors in the country with over 140cars, and hha the ultimate american dream story. he emigrated from cuba in 2015 and started selling used tires in newark, new jersey and sold more than half a dozenompany earning the title as mattress king and the comfortvo etion. it's about creating one of a kind colors and interiors that he consirs works of art that a wouldppreciate in value.

the color for his new green machine came from a pair of emgrald green shoes and i like toreate my own colors and i like to create my own combination and i get great satisfaction when i see the end aysult. many times people to me, you're nuts. it's not going to look right in that color and then they see the car and they flip out. >> the super car marketremains supetrong especially in the u.s. and producers from per ary and bug atty and mcclairen are pal concerned about the potential of auto tariffs. >> we're kind of in a wait and see position right now s can't comment on that and we understand what more will happen. and we're hopeful that it doesn't transition into something. >> of course, for michael fuchs another $200,000 isn't likely to slow his car habit. for "nightly business report," i'm robert frank. >> the richest person is jeff bezos. his net worth topped $150

billion for the first time yesterday. that's about $55 billion more than what microsoft co-founder bill gates is currently worth.g accord bloomberg, that makes bezos richer than anyone else since at leas 1982 when those figures were first collected. amazon closed at yet another record so his wealt to go higher. >> before we go, another look at the day on wall street, gains across the board with the dow up 55 and the nasdaq in a record and the s&p up 11. that is nightly business report. i'm bill griffith. enjoy the rest of the evening. we'll see you to rrow.

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