♪ ♪ this is s"nightly busines report" with bill griffith and sue herera. >> peak? earnin not yet. corporate america is reporting results andterly that may bode well for the rest of the year. super sizedsetback. mcdonald's was dealt a blow that could shake up the franchise business model as we know it. retirement revamp. onsidering rs are making changes to your 401(k). thosend stories a moreigonight on ly business report" for this wednesday, july 18th. e do bid you good nd♪ evening, everybody. sue is off again tonight. we beginngith ear and late-day results from ibm, big blue reported better than expected profit and revenue helped by growth in the higher

margin businesses like cybersecurity and cloud computing. that pleased investor who are eager to see this company's investments and other areas pay off as ibm moves away from its legacy hardware and software units. the company earned $3.08 a share, that was 4 cents better than expectations and revenue that has risen for three cortecutive qs was up 4% to $20 billion and investors die initially lhe results and they sent the stock higher in the after-hours trading. fellow dow component american express also reported better than expected profit tonight and it rose more than the company says that a strengthening economy prompted people to spend more, but revenue wasn't up as much as investors had hoped even though ameran express did raise its revenue forecast for the whole year. thattock fell in initial after-hours trading tonight. >> well, it is still earlyn this earnings season, but a number of positive trends are already emerging and bob pisani

tells us what they are tonight. >> peak earnings? well, not yet. with 10% of companies in the s&p 500 reporting as of this morning, it looks like another above-trend quarters in the work, almost 50 companies in the s&p 500 reporting and the numbers are well above expectations and the earnings up above 20% t andt's well above what was expected and almost 90% are beating expectations and many have been beating by wide rgins and tech stocks beat by 25% and they beat by 17%. morgan stanley beat by 13% and those are wide beats and more importantluidance has been strong. tech strong, csx, united airlines all guided higher in the last 24 hours on earnings or revenues. that means earnings expectations remain strong for the third and e fourth quarter. if this keeps up, we'll have a shot at passing our first quarter earnings growth record of 26%. what does it all mean? these are very early results and

it's clear the beats go beyond cuts.ax there's been emphasis on the global economy and revenue is up and not just because of cost-cutting and companies are buying back stock and they're generally raising dividends and guidance has remained roughly intact or higher. so the bottom line is this, we may be appaching peak earnings growth some time this year, but we're not hitting peak earnings. that will continue into 2019. for "nightly business report," i'm bob pisani at the new york >> as for the whole market today, the dow extended the win streak to five straight sessions as investors continue to focus on corporate earnings. the dow rose 79 points, today and the nasdaq fell a fraction and it's record territory and the s&p added six and as you know, policyut ofashington has been playing a key role in this market and cnbc's delivering alpha conference in new york city, and the gatherings in one of the biggest

names in investing. tyler math son was there and he filed this report. ♪ ♪ >> trade w the top topic today at today's delivering conference and it began with the president's chief economic adviser and unapologetic free trader larry kudlow saying he has no quarrel with the president's approach to china. >> i have been a long time critic of china and it's all a matter of pelic record on tape and i think the president is doing exactly t the rightng here. this should have been doneears ago. a, the world trading system is broken. the world trade organization is broken and we just had this discussion at the g-7 and the biggest culprit is china. >> a for any hope that there might be a breakthrough on china, kudlow said that while he believes the chinese do want a

deal on trade that the president of china, xi doesn't and that they are waiimng for to move. kudlow struck a much more hopeful w toneh respected negotiations with mexico over trade and nafta and with respect to possible trade breakthroughs with europe. he said he expects that an emissary of the european union may come to washington with a gnificant proposal on trade. sen griffin had a similar view on tra far as the president's mission was concerned and a more nuanced view of some of the tactics being employed. >> the president unquesheonably has right mission. over the years, we generally left the deal with the deal inferior to the trading counterparties and we need address that. we've got an open battle with many ofur allies on many fronts. to me, it strikes me as an incredibly complicated set of tactics. >> griffinar for his meaning that a prolonged trade dispute

would be an impediment to global growth and he sees no imped ims to growth over the next nine months and he, like larry kudlow, say 3% to 4% growth may be even more over the next couple of quarters. as for the market, investor howard marx of oak tree capital ys he sees us in a late cycle posture. >> when you get to this point in the cycle peopletartushing out their horizon, you know? when it's been going on for five years, they say we can make it thre more and they say ten years, they think i can make it five more which is counterintuitive and people are dog that now, that shows optimism and it's somewhat dangerous. >> that late-cycle posture according to marx can be dangerous as people put money in at the top. he describes his firm as a cautious firm that ispt exnally cautious now. from delivering alpha, i'm t

matheson. >> now to the economy and a rocky start to the summer for the housing market. housing starts which measure the beginning of the constructio proces declined more than 12% in june from the priorononth. ists say the drop could be due to rising material costs and that shortage of construction workers that we've been heaabng t and despite that decline the residential real estate market is still growing in most districts according to the federal reserve's crosomcountry ec survey and overall the latest beige book which was released this afternoon said that economic groh was modest and it pointed to ri wng crisis anes as the labor market continues to tighten. the bigge iolves trade policy. some manufacturers and construction firms say the riffs have led t higher prices and supply chain disruptions. well, fed chairman jerome powell told lawmakers today that it is still too soon to tell if tariffs will affect the central bank's planned course of

interest rate hikes, but during his second day of congressional testimony he did say the potential impact of trade monitoreds being >> we hear from our extensive network of business contacts, a rising chorus of concern. as you pointed out, lots and lo of individual companies have been harmed by this. we don't see it in the aggregats numbet because it's a $20 trillion economy and these things take time to show up and we hear many, many stories of companies that are concerned and now beginning to make investment decisions or not make them because of this. >> mr. powell also commented on cryptocurrencies. he says that they are not big enough to poseo a threate economy and that the fed is not looking to regulate them, at least notyet. >> also on capitol hill, a bipartisan group of senator drafted a number of proposed measures that could make it easieror small businesses to offer employees 401(k) plans. so what do these proposals look like and could this be an effective way to get more americans to save more?

joining us to talk about that tonight, christina martin is aarp's director of financial affairty and consumer thank you for joining us tonight. >> what part of these proposal are these multiemployer plans where groups of small businesses can pull their employee resources to offer a retirement plan at lower costs? how many employees do you think that would affect? >> well, currently, half of all american workers have no access to retirement savings plan at work, and that's very troubling because you're 15 times more likely to save for you retirement if you can do that through a plan, savings plan that takes money straight out of your paycheck through your job. >> so are we talking about thousands of employees that don't have access now or, you know -- >> wngre talbout millions. we're talking about millions of employees and mos of those employees, 32 million of the employees who lack access to a savings plan at work are

employed by small businesses. >> right. >> and it's been too expensive in many cases to put this of a plan together. >> another part of this is a little more controversial. it would allow annuities to be a part of 401(k) plans and t fre's ar that those can carry high fees and there's always a rick of an insurance going under it at the same time. >> the thing is it's been difficult for peo to foipd a game plan to find an oozy way to dwrep rate reliable, lifetime income, a check. the t plan encourage more vings plans t offer an a nowity is a good one if the choice of annuity offered is a prudentit one. important to note that annuity is not for everyone and you have to lookt theees very closely and they're structured differently and it's good to encouragens01(k) p to include more annuities in

their offerings. >> by the way, another part of this plan is it wouldre req 401(k) plan administrators to tell employees how much they would get monthly from their current 401(k) plan. that would be pretty helpful, wasn't i t t would be helpful and it's very difficult for you to know what the amount that you have saved will look like when you retire in terms of a monthly income stream. we think it would be advantageous to have that reporting happen. >> they'll talk about that this fall as they talk about tax legislation. christina martin with aarp, again, thank for joining us tonight. >> later in the program we'll be looking at some of the myths urrounding social security benefits. i know you'll want to stay tuned for that. in the meantime, it's time to take a look at upgrades and downgrades. we start with shares that were outperform at mcquarry. the analyst there says product employment will fail to attract

new users and that stock fell another 3% today to $43.34. meanwhile, shares of clorox were doalgraded to sell from neu at goldman sachs. it c margins and currency headwinds and the price target $112, andt the fell 4% to $129.53 csx was upgraded to buy from hold. the analyst citedimprovements in the railroad operations and csx topped earnings estimates as we reported for you yesterday, and the price target now $7 that stock rose by 7% to $69en ev still ahead, intel marks half a century as a dominant technology company and the anniversary come at a critical juncture. ♪ ♪ ♪ie

>> b it or not? intel corp is turning 50, but the anniversary comes during a complicated time during the jsemiconductor company ah lipton explains for us tonight. ♪ ♪ >> intel is a powerhouse in the markets for pc and server t chi an company expects to set a new revenue record in 2018. though the stock has lagged in recent months. >> in part, analysts say intel vestors are now struggling with a big question, namely who is goi to lead this company. intel announced theesignation eceo brian krzanich, violated his relationship with a

coworkering his tenure t rough end. rbc says there are a number of candidates. internally, there are two to watch who h alreae major roles at the company. >> mercy, andro president and chief engineering officer, he came too intel qualcomm just a few years ago and the general manager of the company's critical data center group. sanjay ja hsh, is a possible contender and ceo of global foundries and there are a number of intel execs who understand culture.ny and its like stacy smith, the company's former president of manufacturing. renee james, now ceo of empire, diane bant, former coo at google cloud and pat gelsinger, though gelsinger tweeted i love being ceo of vmware andinot anywhere else. the next ceo, whoever that might be will have to deal with som real complex challenges like

manufacturing issues that the hcompany ising with its next generation processors that promise bettererformance with lower power usage. there's also increasing competition fro rivals like nvidia which is trading pecialized chips for new hot areas like artificial intelligence. ifss intel can addhose manufacturing challenges while maintaining its dominant position in pc and server chips andnt diversifying potential growth areas like artificial intelligence and autonomous cars, investors may cheerom er is in the corner office. for "nightly business report," i'm josh lipton, santa clara, california. mnwhile, fellow dow component inco component mcdonald's was dean a setback w judge had a proposed settlement in a case that could have major implications than nothing less than the american franchise business model. in respons the stock fell more than 1% today. kate rogers has details now on this case? >> the question at hand is

mcdonald's viable for labor violations in the franchise locations. mcdonald's would be ctsidered a jo employer with the franchisees. if it's a joint employer, that also meanset giant would have to bargain with workers to make erions. they we retaliated against for union liking in a the fight for the movement in a statement being in mcsaid it was disappointed in the judge's action arguing mcdonald's usa and various franchisees negotiated a settlement that is fair, reasonable and provides the opportunity now f full and complete relief for all current and former franchiyee emp affected by the litigation. as we haventained throughout this process, mcdonald's usa has never been a jointmployer with its franchisees. for now, mcdonald's and its franchisees are evaluating all options including a potential appeal for its decision. the fight for 15 said in a

statement this proposed settlement was nothing more than a sham hammered out by mcdonald's and the trump administration in anffort to hand out the company a get out of jail free card for illegally harassing workers who spoke out for a better le. uncertaint surrounding the employer standards is to negatively impact the franchising industry. >> it is quite terrible for our ost of the because brands that are out there and the small owners and operators don't have the resources of the so theranchise system confusion that's been created about a very simple question like who is your employer is causing enormous pressure on people's growth and getting into the franchise sector, opening new businesses and hiring new employees. >> las year, the house of representatives approved a t measurt provided a joint definition of employer. the senate has yet to oake

actithe bill. for "nightly business report," i'm kate rogers. >> novartis says it will not share drug prices this year. novartis is taking a page from pfizer's playbook by saying it will not raise costs in 28 following criticism from aresident trump. also ns said strong demand for two key drugs helped revenues and earnings this quarter top expectations and it expects to meet the high end of its yearly sales outlook. novartis shares climbed 3% to $80.96. abbott labs raised its full-year earnings forecast after top quarterly expectations. thema devir said there was strength across its businesses and the medical devices unit saw considerable growth thanks to a newly launched glucose monitor. shares rose 3% to $63.75. morgan stanley beat expectations

as they raised in investment bankingnd wealth management businesses and it raised the quarterly dividend to 20 cents a share and launched a nearly $5 billion share. shares rose to $53.56. after the ebay beat on earnings and missed on sales even as ite added m active buyers. the e-commerce platform also gave revenue current quarter and for the year. that was a little bit light. shares of ebay fell initially in the afterut hours, finished the regular session up a fraction at $37.95. bargain hunters rejoi. by one estimate there were more than 150 retlers offering deals over the past day or so to compete with amazon's primeay. target said yesterday it was its biggest online day of the year so far for sales and traffic. as for amazon itself, by its own ed up te, prime day e being its biggest shopping event

ever. courtney reagan has the detai. >> even though amazon prime day had glitches preventin shoppers from shopping for the first seven hours, it was still ain record bre day. prime day and a half was the biggest global shopping event in it history, beating out cyber friday and last prime day when comparing 36-hour periods. ugh, comparisons are here's what amazon said. prime members bought more than 100 million item, a record ande global sy small and medium-s medium-sized businesses and more memembers joined pri than any previous day in aman history. most retailre experts age, adding prime members is a true goal of the event. while there are 100 million globally, analysts say there are still further to >> i don't think there is a ceiling. we had people in our office who weren't prime members all of sudden signing up. >> think they gave it away a lot of it and i don't think they made a lot of money, but theyy

certainl drew traffic in. >> it was the biggest day ever for echo devices, fire tv stick and ring video doorbell, top-selling non-amazon products, the instapot and 23 and me dna tests and organic strawberries are the best-selling deals at whole foods and some shoppers were frustrated with the deals and theebsite glitches. we talked toha shoppers tt couldn't search, checkout or access the website app. >> i got the job which i just never had timeho go for e and i tried a couple of times rtd it never worked. >> it was unate that i couldn't get the good deals. >> i was trying to get a lot of it and trying to get diapers and all baby stuff, to be honest with you. >> i'm an amazon investor and i do a lot of shopping on amazon, and it surprises me that the zocompany with what ama has would have glitches like this with their biggest days of the year. >> whilehoppers were

frustrated, many said they would cancel the prime membership as a result and amazon would find a way to make it up for them. i'm courtney reagan. >> for those of you kee score, amazon shares while they closed lower today for a time, they were higher and midday, amon's market value reached $900 billion before pulling back. >> weecided to take a loo at where the race to $1 trillion stands right now, andpl s still in the lead and the market cap is $935 amazon stands at number two followed by alphabet. >> coming up, your financial future, common myths about social security that could make or break your retirement. ♪ ♪

google has been fined billion by the european commission as one of the steepest penalties ever made against an american technology mpany. regulators say that google unfairly pushed its apps on to smartphone users and abused the dominant market position. >> this is an ongoing abuse. this is very serious. it affects so many devices and of course, it's a big company, so you s the turnover that comes in. this is the thing that makes is a very hard find. >> the thing that google has to do now is ocourse, to stop. it has to stop this behavior. it has 90 days to put an effective to this infringement and this, of course, will freeu he market. >> if google does not comply with the 90 days, it faces penalties of upo of the average daily revenue of its parent company alphabet.

>> many americans do worry about retirement and social security, one in four workers plan to rely on those benefits as their primary source of income in their later years. still, there are a lot of misconceptions about how social security works and when you should take it. s ourior personal finance correspondent sharon epperson joins us to dispel the common myths that are out there.on it's arsation we have all of the time. one question and one myth that comes up, some people bsieve that ietter to take it earlier. take it when you can. y, right? mo >> a lot of people actually do that. about a third of people actuallc get theirl security benefits as soon as they can, and the earliest age that you can get it is 62, but what they may not understand, is that benefit will be reduced from the benefit that you could get from your full retirement befit and more than half your workers don't wait and take it beforel their f retirement age and again, you're getting the reduced amount and it's not best claim the benefits early and

it's best to get them at the full rirement age which could be 67 for many people and then wait even longer if you can to get an een incre in your annual benefit. >> they are lattering the age of which you do get full benefitig ally, we know it was 65 years old when it was set up ba in the 1930s. is there an ideal age to claim the benefs? >> the ideal age is 65 because that is the age you need to claim your medicare coverage, hebut it is not ideal age for social security. you want to find out from the social security administration to get your full befit and if you want an 8% increase until age 70, then you want to wait until age 70. >> it matters in terms of yourr or benefit, so you want to make sure if you have a higher earning spouse and if you're rc di, think about if you're married more than ten years you can get your ex's benefits.

ni sharon epperson, thank you for j us. >> that is "nightly business report" for tonight. i'm bill griffith. see you tomorrow. ♪ ♪ ♪ ♪ ♪

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