♪ this is "nightly biness report" with bill griffith and sue herera. striking business. q apple's stronrter moves the strock ever closer to that $1 trilli summer sizzle. the market closes out its best month since january thanks to strong earning and positive economic data. turbo boost, can the car tha steve mcqueen made famous help ford get back on track? those stories ande much mor tonight on "nightly business report" for this tuesday, july the 31st. a we bid you good evening, everybody. sue is off tonight. we begin with the latest results from the world's most valuable publicly traded company, apple. after the bell tonig theow component topped both earnings to revenue estimates thanks sales of pricier iphones and a

continued growth in its increasingly important services business.e aprned $2.34 a share. that was 16 cents better than expectations. revenue was up by 17% to more than $53 billion and investors liked the report sending the stock to an all-time highln init after-hours trading and pushing it ever closer to that i $1llion market valuation. josh lipton has more for us tonight from cupertino. ♪ ♪ app reporting iphone units coming in at 41.3 million in thr quarnd that was a bit lighter than analysts had expected and wall street was looking for 41. million iphoney units and tarried a higher price tag and the average selling price of the iphone was a much stronger than expected $724. if you had to chance to catch up briefly with ceo tim cook and we talked about a mix of iphones in the quarter and if you look at

the phones most recently launched and the x and the 8 plus. you can see that in the average selling price and they took down channel inventory of th iphone by 3.5 million units and the overlying demand was stronger. i'm josh lion in cupertino, california. >> what next for apple? we are joined byngelo zino equity analyst with za research. thanks for joining us tonight. >> thanks for having me. >> i am struck by what josh told us. theyold fewer iphones than what wall street expected, but at a higher price point than wall street expected. the strategy seemed to work to sell the expensive iphone xs, yes? >> we were looking for 42 million units and they came in at 41.3 million. i'm dippointed on that front. typically, you see a drop significantly in average selling prices as you go through the

cycle hernd the june quarter being the trough of the cycle and you know, given t still have the type of numbers that we saw is just a testament of what apple is doing here and their capability of c higher average prices and consumers are loving that. >> services business was up 39%. that's a continued growing business for them, isn it? >> yeah. when we look at the actual bullish view o apple, it really has to do with services. one in two is the wearables category and right now they're hitting on all cylinders when it comes to both growing 30%n both segments. >> aren't there any tariff issues, anyrade issues or other headwins that are facing apple right now that you're keeping an eye on? >> yeah. i mean, i'd say the biggest concern has to what goen with china here from a broader kind of trade perspective, political perspective, but that being said, when you look at cha growing 19% year over year

for apple, apple is doing very ll there and our view and they'll do well barring unforeseircumstances between the two global titans. >> quickly, they mentioned they're trading in all-time higr ory, would you buy the stock here? >> yeah, we would. we think we'reig believers that cash is king here and no better company out there at generating cash than apple is, and we do expect the buybacks that remain veryiv aggre and we think it's a very stable business and right now, ye we would consider buying the shares despite the record highs>> toda. all right. angelo zino with zfra research. thanks for joining us tonight. s thanks for having me. >> the techtor bounced back today and that helped the dow and the s&p close out july with the biggest monthly gains since january. the dow rose by 108 points to 25,415. the nasdaq added 41.

the s&p was up 13 and for the month the major indexes were all solidl higher, but oil reported its worst monthly decline in two years falling by more than 7%. >> bob pisani takes aoo l at what worked and what didn't for invests in july. it's been another good month for stocks with the s 500 up 4%. the key storykeoving m has been the continued strong economy coupled with strong earnings, they're coming partly from tax cuts and mostly from higher revenues and it's combining to keep the markets just shy of historic highs and there have been a few hiccupsg ale way and companies have been affected with higher costs associated with steel and aluminum tariffs like whirlpool, and concessionary stocks with facebook, twitter and a few others gave disappointing growth guidance and the markets barely budged because the rostors rotated out of th high growth names and into value names like

retail stocks, energy, and some banks ant's why the markets have been so strong and why one grkep w and a leadership troup like technology and of the investors don't jell off the whole market, they buy other sectors and trade issues hav continued to move stocks in july which is the rumors that the u.s. and china have restarted trade talks today helping boost thearts. july also befited they've they've not worked very well. that's a foimous on bute're up 6% since may and that didn't work and there's also the esidential cycle swo as we call it. the market tends to behave qorly in the tworters going into the mid-year presidential ycle and that hasn't worked either we're up 8% since the start of the second quarter.if re "nightly business report," i'm bob pisani at the new york stock exchange. >> bob just mentioned the report of u.s. and china trade talks w and the a lot going on in d.c. kayla tausche has some of those

details from the white house for us tonight. first on the trade relations wi the u.s. andchina, they've agreed at least now to talk again, right? >> well, bill, the treasur secretary has acknowledged that there are channels of communication open, but he's doubted theec eveness of those talks. the first that was briefed by secretary mnuchin within the last week on talks to china that mnuchin wants to s progres and wants to move toward a deal and he's not feeling the intensity and the pacen those talks to really move forward. the u.s. does have two tariff deadlines coming up in the coming weeks and administration officials say there's no sign now backin down those. the nafta talks sounds like we're closeith a deal with mexico. the incomingf president mexico says the talks are near clinching a deal. u.s. and mexican officialbill, will be holding formal talks herersn washington on ty, but there are two questions about that agreement. bmber one, howad is it? does it cover all principles

that the companies are talking about and one portion and that portion is auto manufactung. that's o question and the second is how do these countries plan to convince canada toome back to the table? trilateral this is a deal and there are three countries that would need to be involved. kayla tausche in washington. thanks for joining us tonight. ve elsewhere in other news today, federal res policymakers began their latest two-day meeting today with a decision on interest rates due tomorr, but ahead o that meeting, steve liesman asked a number of money managers and strategists about risks to thee onomy and it turns out the fed is one of them. the latest economic outlook show good times ahead with asterisks to the forecast. growth accelerating according to the 42 respondents fueled by tax cuts and deregulation and rising interest rates from the federal reserve and the trade policies represent serious threats to growth accding to the respondent.

the fed is expected to hike rates four tes this year, twice more in quarter-point increments and two to four times next year and the fed can hiket enough to slow growth. >> as long as we're growing better than th3%. 'll try to break the economy's momentum and try to achieve theoft landing and the problem with the soft landing is it's snooft % of respondents who include economists and fund managers mean that is above neutral and that is asked to slow the economy overim they may not have to do that if new tariffs and retaliations from trading partners actually slow the econy. >> the real risk is it's global economic growth would slow and that may slow theexports and it would fall back on our economy, but other economies around the world would start slowing well before we would. >> kevin geddes of raymond james finaial, and the u.s. economy still has solid growth potential in front of it and you still ges thse that it wouldn't take much to watch it derail with high high degree of confidence

that that would be the cause of the derailment and some poor decision making at the top. just about 60% approves of esident trump's handling of the economy and similar percentages say his tariff policies would reduce economic and job that is they would take away from growth with the tax cuts will hel achieve. for "nightly business report," i'm steve liesman. now at to take a look some of today's upgrades and downgrades. we begin tonight with cbshich was downgraded to market perform from outperform. th analyst there cited the distractions of the investigation into the allegations against ceo les moonves. price target $50. the stockthose mor 2% today to 52.67. owterpillar wasraded to equal weight to overweight at barclays. the analyst cited the company's limited ability to eand its profit margins. price target $155. nevertheless, the stock did rise 3% to 143.80 today.

uptwitter was aded to neutral instineuce at nomura the analyst there said twitter's investments wou benefithe company long term and lead to a more engaged user base, and that stock rose 1.5% to 31.87. still ahead, a classic case of too much supply and not enough oumand. >> i'm contessa brooer, this is the equivalent of the 37 pound of cheese every american eats every year, but there's a second amount of supply of cheese in coldtoge. so each of us has to eat an extra three pounds. the economics of extra cheese coming up. ♪ ♪

> facebook revealed that it had deleted a handful of fake accolts. the socedia company pulled down a network of pages for what it called coordinated inauthentic behavior. it has now officially identified who was behind those accounts erd they did say there some similarities with those run by russian troll ahead of the 2016 presidential election. >> o ano chipotle restaurant has re-opened as an c investigatiotinues into possible illnesses related to that location. chipotle closed that restaurant yesterday after hearing from two customs who said the fell ill after eating there. this is the first major food safety issue for chipotle's new ceo to deal with. it has been three yearsow

since the original e. coli outbreak that damaged the company's reputatthn. stock fell nearly 7% on this news today in trade.ll america's cheese stockpile is rising and right nowhere is record amount sitting in warehouses around the countryt and t excess supply is bad news, of course, for the country's cheese producers. contessa brewer is in manans, new york, tonight. ♪ ♪ >> sean o'connoroued his company nine years ago, but it's a tough job turning his dream into economic success. >> you're paying up frontor the raw materials and the milk and other ingredients andouhen ife aging cheese you're waiting however long to realize your profit assuming that you're able to sell it. >> if they can't sell it itd sis in ctorage and the usda says there's a record amount of

cheese sitting in refrigeration, nearly 1.4 billion pounds. part of the issue isows are producing more milk than ever and american milk consumption echas been dning for decades so the big dairy guys have worked intently to open new, global markets. mexico is the number one forei destination receiving a quarter of u.s. dairy exports and last year, climbing 8% from the year be china, the fourth biggest export market grew ro49% 2016. both countries have now slapped u.s. cheeses with retaliatory tariffs of up to 25%, and canada, another top taker at a certain point in his american exports with 275%. >> we are exporting about 15% of our production. so we depend on tradets agreem we need a functioning marketplace. having uncerinty in the market is not a -- not a positive thing. >> big manufacturers are aeady

reporting declining sales and stalled contract, but the big ncern her is that their customers could move permanent to cheese makers in europe or canada and under new trade deal, specific cheese labels would be so for instance, parmesan would only come from italy or fedda o wouly come from greece. >> they can do two things. f they cand different markets to go after to try to move some of those products if china and mexico don't currently buy them or they can sell it domestit lly here a lower price. >> that's a real worry, even for artisanal cheesemakers like sean as he sends his supply to rmer's other mamarkets or whole. >> the companiuc who are prg a lot of cow's milk oheeses are going to start really be aggressive in the united states market which then would make it harder for me to compete in the supermarkets that i'm in and the supermarkets that

i'm trying to get into. >> b until new trade agreements are in place, the uncertainty remains and the cheese remains on the shelf. for "nightly business report" contessa brewer, manans, new york. >> the stronger dollar weighs on pfizer's sales outlook and that's where weegin tonight's market focus. the drawmaker lowered its full-yearue forecast cited the strengthening dollar. the revised guidance came after pfizer reported stronger than expected earnings that were led by higher sales of some of its key drugs and it plans to ramp up invtments in research and development in order to bolster the current product pipeline. shares rose 3% to 39.93. procter & gamble said that increased invtments and growing competition caused its sales to rise at a slower-than-expected pace especially in the consumer product giant's sving business. earnings overall, though, were ahead of expections and p & g said it would raise prices on a number of its products in

response to higher commodity costs.e sh was procter & gamble rose nearly 1% to $8.88 today. french drugmaker sanofi topped estimates and it did see sales come up short as weakness in the diabetes division runs short. recent acquisitionsill sition that business for growth in the second half of this year. sharhe fin up 1% today to 43.36. and health insurer wellcare topped profit expectations with dsults being hely higher premiums and lower medical costs. the company i said thats seeing strength across its businesses and its result that is hiking its earnings outlook for the full year. shares climb by 7% to 267.42. meantime, ford is hoping to return of the classic car will give the automaker a turbobo t. it is bringing back the bullet mustang named, of course, for th classic steve mcqueen movie and where better to test drive

that new bullet, but in the city that made the car famous, san francisco? atil lebeau take us for th ride. ♪ ♪ >> the sound says it all. new bullet mustang complete with the v8 engine is rolling into showroom, ae reminder of automaker's glory days. >> it's a part of the heritage of the company. it's part of what ford's image is built on and it gives ne everyone someo beautiful for them to say that's a ford. 50 years ago theie m "bullet" with steve mcqueen driving the mustang in a through san francisco made the bullet an american classic. these days there are fewer muscle cars on the street, but they still generate emotional reaction which is is what ford wanted when it had mcqueen's granddaughter molly introduce the new bullet earlier his >> i got emotional when i saw molly mcqueen talk abohat

car because it's the history of ford where it's been a leader in categories like mustang and f-150 and not resting on its laurels. >>ight now ford is struggling. the automaker is restructuring its operations to boost profits. >> meanwhile, plunging sedan sales has for planning to stop building cars with the exception of a few models like the mustang. in short, this is a company looking for a littlz bit of b which is what the bullet i all about. >> is there one particular car that people get excited about? one car that t brand is associated with with positive connotations, that can only help. >>as blast from the f looking to rev up sales and the attraction of muscle cars. phil lebeau, "nightly business report" sausalito, california. coming up, rising risks. how extreme weather is putting historic main street under water.

♪ ♪ a quick lookt what to watch for tomorrow. the federal reserve is concludingy its two-day pol meeting and issuing policy. automakers report sales for the month of july and ahead of the government jobs report on friday, adp will release its private payrolls report for ly, as well and that's what we'll be watching for on wednesday. the northern california wildfires are leaving a trail of destruction. more than 100,000 acres have burned at thisoi. firefighters are making progress, but already livesos he been and homes and businesses have been destroyed. it's early, but wall street is already starting tohe analyze impact.

according to keith bruyette and woods, reinsurers will bear the majority of the losses incurred so far. >> horrific scenes from the deadly flash flood in small town america memorial day weekend drew national attention, but now there cameras there gone and locals have to figure out what to do next. the problem is the rivers. combination of climate change and too much real estateas development turned water from an asset to a liability. diana olick has the next part of our series, rising risks. >> it would have been called a thound-year flood if the deluge hadn't struck through maryland just two years before. [ screaming ] >> the first time around in 2016 early city's noor 250-year-old main street, shop owners like donna sanger worked

tirelessly t rebuild. >> there was this enthusiasm, let's put on a show. let's bring the town back. >> but this te -- >> this is more like a funeral. >> now they feel like these destructive floods are the new normal because this historic town, barely a blip on the map is a blueprint for developing disaster. real estate development in the face of increasinglyet weather. joe sexton is a scientist who uses satellite images to map changes in ecosystem. >> you had two0- 1,ar floods within two years of each other. how does that happen? >> t orwhelming factor was intense rainstorms. climate change due to warming oceans and changing atmospheric pattern, more water is falling and on top of that, we're intensifying land use which is cleaetng vion and replacing it with impervious services like concrete, asphalt through which water does not allocate. >> ali cot city w built just north of the river.

several tributaries run through the towthe river. those water currents were the energy for this town built around a mill in 1772, but since 1991 real estate around the popular main street exploded. developers submitted more than 100 plans to build residential and commercialin bui in about three square miles around the city. most were approved. >> we have flood maps that were drawn based on conditions that are no longer true. >> in the most recent orm, nearly eight ifrnches of rain fl in just three, ho water with nowhere to go and that shows how development increased the intensity of the flooding by up to 30% and el cot city is just the example. he measured changes since 1984. the amountdf l or permeable dirt illustrated here in red b that hn covered with impermeable streets, sidewalks i

and buildin about equal to the size of the entire city of baltimore. when wehink of the destructive power of river, we tend to focus on the amount of water, heavyg overflow and it's also the speed of the water rushing throughik townse a bulldozer. how do youhe control t speed? you can't tell a river what to do, but you can give it newor option fhere to go. allen kittelman has been the countyxecutive for the area that includes ellicot city leading people through both floods. >> imposinourselves on the rive how can we code this with the river? >> the answer may be in a transform tiff vision, literally, taking down some of the historic buildings by the river to give the water more space. >> this is gorgeous, historic real estate. do you really think you have to pull some of it >> think we have to look at what is best for the town as a whole.

what is the best way for us to save this town and the river runs below thesebuildings. he and his son barely eataped the floos. >> it started seeping through the doors and all of a sudden it just -- boom. broke the doors. >> he's led in this area for more than 50 years and leases this space. now he's goingov to his business uphill. >> being down here in the flood zone is not it's difficult. >> on the other hand and the other side of the street the change could benefit other sinesses like donna sanger's. she owns her building and has invested in what the town decides. that's why she's rebuilding. >> if we can get through that period of time then it's a tremendous opportunity, too. >> because taking down the opposite building means herty propould overlook a valuable new green space, a river walkigating water and attracting business to her and

her neighbor. >> they know that if they hold on they'll bri the buildings back and the county does what we think ty're go to do that in the long run they'll have valuable real este. >> for nightly business report, i'm diana olickn maryland. > to read more you can head to our website at nbr.com. that's "nightly business report" for tonight. i'm bill griffith. have a wonderful evening. hope to see you tomorrow. ♪ ♪ ♪

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