tv Nightly Business Report PBS August 20, 2018 5:00pm-5:29pm PDT
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this is "nightly business rt" with sue herera and bill griffith. >> closing in, the s&p 500 moves closer to a new high as investors bet the bull market has further to go. rocking the boat as trade talks heat up this week, we'll take you inside an industry that's hingearitgd hy taris. > and retirementengh you also have to bewa afre o earnings. storiesnd more tonhteth for this monday a 2tugthus. good evening, everyone, welcome. bill griffith is off tonight. optimism over trade talks sent
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oarfes hi igher, deal making activity also put invest irs in a buying mood. and it sent the s&p to within 1% record and the dow to its highest since february. ustrial ave cragese ad de8925,000. thda n wqasasp gained wedsdhis bul6. 3,453 days old. making it the longest in history. mike takes a look at the three phases of this market milestone. >> the 320% gain00n the s&p since march of 2009 has unfolded more as a three act drama than a simple story of everising stock prices. the first act was a powerful reboundf a 13 year low. the economy emerged from the great recession. the s&p 500 doubled over the next two years before the european debt crisis trigg sharp correction of nearly 20%.
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after europe stabilized thoughts went sideways through to the 20 election until the next rally phase kicked in. thanksor to healthy coe sionlts and surging tech e nexnr and inate gsarsh. decli 2015. ushering in another sideways phase through 16mid- since then, stocks have written tax cuts and a corporate profit boom to another 35%ardvance by jaof this year. ith its resilience and 90 du s surge, but it hasn't been stronger. the s&p is up 15% a year since march of hile the run from late 1990 w,2009 to march delivered about 18% a year. thiss one reason why some strategists see the chance tohe push h still. bull markets tend not to die of old age, but fromio rece a
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corporate earnings down turn or a financial shock. those things are not in clear sight or are impossible to predict withdecision. mature bull markets do become more ahidents prone w more bounce of volatility and a slower pace of gains as more defensive ntinrest gain favor. is that what we've been witnessing in the months since the januaryhigh? or has tefshi the bullt jusee audience pleasing act. manoexr'srk nt rert. i>s th govnmen is enuedevalaluezingy nt oa a announced ke in th e minimum wage by an 3,0%, whi wil beor m thee equivalent of $30 all of this in an effort to ease rampant inflation. with venezuela being an se led global hotspot, where
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are some other places around the world you should be watchg a ttle more closely? andrea is here to fill us in on that. welcome back andreas, nice to see you. >> thains for hme. >> the market that comes first to mind and that has created a lot of mketolatility is turkey. you look at the economy of tuey and its interaction with the u.s. i wonder if the markets ovary acting to the troubles there. >> the way i would put it is, for a u.s. investor, turkey's willility is something we see in the short term, if you are a turkish citizen, totallys differentation. if you are in an emerging market, investors and places say like south africa or braz t, where currency has seen a lot ofat volility because of what's happening in turkey, it might be a different story. >> which ishearket you are watching the most closely. in the past it has beenhi and china's relationship with the united states. is that still the case? >> ye if we put into context of what
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matters to a u.s. investor, think the situation between the united states and china when it comesrade relations by far is the i mostortant one. places like turkey, venezuela, from a global citizener ma less so. >> let me turn you to some of thether markets that have started to see increased volatility. and s ae of them in europe, italy is one. and italy was at the heart of the 2008 financial crisis. do we need to worry about italy? >> i would use the same framework. if i amn italian citizen right now, this is a big concern. you have a situation where the government is actually looking to spend more of their money. and they already have the largest gross debt in europe. so that's concerning. from a u.s.nvestor perspective, less so, i don't think italy's situation provides systemic risk the same way that
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did in 2012, 2013 when the european crisis was in full yforce. >> if're an investor and you have allocated funds to those markets in europe, ie lal. t? you change that right n ,owher ans ower for me is no. the way that i look at it is, if your portfolio. if you're globally diversified portfolio is breaking because of what's happening in italy or turkey, then you have to kind of rethink the overall strategy that you have. but if you have a well diversified portfolio, that is why you have intern exposure versus u.s. exposure, some things will zig when others zag. i want to change your overall strategy because of led line risk. >> where are you putting cash to work outside of the united stses? >> thathe right question, if you were to look at abroad and to look at the
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developed world versus the emerging world, the emerging markets look aot more attractive from a valuation standpoint. having said that, t caveat i would say as a u.s. investor, what that means is, have you to be accustomed for moreti voty than you see in the united states. the more risks you're going to see, the higher potential reward you're going to see. >> thank you so muchha >> thanks fong me. reece is formally ending its bailout program after eight years and billions of dollars in loans. the european central bank and th european commission, greece agreed to drastically cut spendingme and imp economic reforms. the greek economy is three quarters of the size itas in 2007, and the deep cuts to public spending are set to continue. the bailout exit means the country can once again borrow money at market rates. deal activity added to e optimism on wall street today.
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pency agreed to buy soda stream r more than $3 million. the ceo says gearing away from sugary drinks is important for the company's future. tyson foods said it would buy keystone foods for more than $2 billion. the acquisition is part of tyson's strategy tore ie its product offerings and expand globally. keystone foods is a supplier of chicken, beef ando fish the major fast food restaurant chains as well as convenience stores. shares of tyson rose more than 1%. investors will be focused on tha fe reserve this week, and just today, the president of the atlanta f said that the economy is strong and ready to move on from monetary stimulus 37 rapheal added he is 12iking wi r int herest rate increase this year, as globalnt e like
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turkey's currency crisis increase risks to the economic outlook. the president might not be all that in an interview with reuters, president trump said he'll iticize the fed if it continues to hike rates and that the cen rall bank should be more accommodating. in hat sameinterview, he said china was manipulating its . curren and china artificially lowers the price of their >> this week it takes center lage in washington. kaylaooks at what's on the enda and what's at stake. >> the white house could play host to another trade truce wednesday. a new effort from treasury undersecretary has white house officials optimistic after higher level talks in june fell short. >> you have to start in the weeds. is think this kind of our
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weedwacker. he's over there in treachery, k and hews the details of stuffer that we have to bring to the chinese. the fac that they' here this week, is a posive sign >> washington is not fully letting its guard down against beijing. this week alone features a victory lap andh meetings w europe and japan, on how to challenge china on a global stage. not to mention a new round of tariffs that could take effect on wednesday. >> my concern is that making progress on the counterfeiting of intellectual property is for sure poss the notion that china is going to change the state support of their economy i think is very farfet farfetched. >> talks with t china a highest stakes on the agenda this week. the white house is moving w forwarh nafta, mexico and filling in a trade agreement with europe. trying to focus the trade war so
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the u.s. is only fighting on one front. for nightly business report -- >> one industry that is getting hit hard by retaliatory tariffs is boating. many executives aren't sure what ase future holds. contessa brewer the story from tampa, florida. >> reporter: florida's known for its coastline and marinas, but it's boating industry is being buffeted by a storm over global trade. >> whe trade is k hiings froeviner oalf sides. >> peter is the ceoer ofam yacht, a manufacturer of high end vessels. >> whateally hurts us now immediately is the eu import tariffs of 25%. >> two solid sales stalled in the water. because a 25% tariff translates to a milli dollar tax on a $4 million yacht purchase.
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theould be european buyers balked. >> nationwide manufacturer's export 15% of boat and engine production. more than 2/3 goes to canada, xico and the european union. >> the 1%ers don'teed a yacht. we're talking about the finest yachts in the world, the prices are high, most of these people already have a yacht. so they justhoose to delay the purchase or buy another type of yat, unfortunately, that yacht may be built in europe. >> the hit for tat tariffsre threat thing to sink nearly $200 million inoverseas boat trade florida does every year. to say nothing of an additional 70 million plus in yacht sales. >> it's ash stopper, there will be no sales in europe until th tariffs are lifted. >> those aren't the only tariffs king for rough waves. costs are soaring for steel and
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aluminum. reas kum of materials. >> thee br tolhela luxury tax and the ones that get hurt by this. bs. >> while domestic demand i strong. the slowdown in exports is forcing a serious second look at expansion plans. additional hiring andal cap expenditure. >> we see no evidence of progress, a w have no support from the government. >> so until there's aeace treaty in this global trade war, florida's boat manufacturer's are bracing for a bumpy ride. for nightly business report, imntessa brewer, tampa florida. it's t to take a look at some of today's downgrades. nike was upgraded to neutra
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the pricearget is$93. the stock rose 3%, making it the besterrming dow stock today. qualcomm was upgraded to b from neutral at rosenblatt securities. the analyst sights the benefits from 5 g smart phone growth over the next few years. e stock rose araction to 66.16. or jn says tesla stock could fall to $195 a share by december. the analyst says tesla's move to go private is much less developed than he had earlier presumed. jpmorgan has some rating on the stock. nonetheless, the stock rose to 308.44. still ahead, how to protect your retirement and avoid hidden fees.
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d a strong for airline stocks, this after a wall street analyst saidhe industry continues to see solid demand, along with rising fares and slower capacity growth. this trend should continue through the end of this year and into the o first halfthe next. t american, united, southwest, deltand jetlu meye n >> there's a good chance it's operated by one of e four largest airlines in the country, which dom nature air for those living in fli rts don depart from a carriers are testing out a new approach that could a result inew source of >>eporr: theare small but growing veque.ickly, , aitirsp
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onl consultant calls them wildcatterairlines. these carriers are th big airlines have often overlooked. >> these airlines, these wildcatter airlines are not after brand loyalty, they're after getting discretionary dollars that weren't going to be used for air transportation before. >> rep eter: as thenomy has surged, so has the number of people looking to fly. now, over 800 million annually, most of them fly big airlines, many have to take small commuter or reg jets to larger citiesiona where they canoard b wildcatter airlines like allegiant offer a limited schedule of nonstop flights fro cities likerockford, illinois, popular destinations like las vegas. an enticing option for those in smaller cities who want to get away. >> the majority of people on these airlines are not people
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who planned to fl they're using excess discretionary dollars. >> much like a wildcatter who sticks with a well, as long as the oil is flowing.ld tter airlines will add flights to overlooked markets as long as there are enough people looking to fly. if demand in a smaller city slows down, the smaller airlines will quickly trim their scdules. t with the economy humming along, these wildcatter airlines ine add flights. owan a trip. >> walmart and anthem team up to help seniors with drug costs. egat's where we tonight's rk etfo anthems lm tinit w tnncld er alarlowrlt nex anem to pnt rateceives over th counter treatments and pain medications at ler t gecosts.
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seniors greater access to these products either in store or onnearly. li 2% to $96 even. shares of anthem wer off a fraction to 263.17. est estee lauder said demand was es cially strong for its skin pro. i've been there a couplereca times. estee lauder it's seized profits for the year. invests shrugged that off. they sent shares up more than 3% to 140.56. lynnette warnedhat its 2019 financial performance could come under pressure after a key distribution contract was not renewed. the agreement expires in march and applies to three products. lynnette is still assessing the impact. shares of the companylunged 60% to $5.35. as we've bee tellingyou, competition in the fund industry
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s fees dropping sharply. sometimes to zero in an effort to attract and keep customers. as we've reported, fidelity became the first to offer two zero cost index funds. vanguard eliminated trading fees on most of i etf's. sharon is here to explain what you should watch out for. always great to see you. >> good to be here. >> what kind of fees are these that eat into your returns and savings? >> the first are expense ratios to think about, the fees on mutual funds. that can be maybe the average is half a%, sometimes it's more than 1%. you want to watch out for those fees. there are many more. mutual fund transaction fe, some people think if i put it in a mutual fund there must be fees for the transaction. there could be fees attached to that. then you have to think of the 401(k) administrative fees, you puut it on pilot, you think
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your retirement savings is fine, it isrefine, there fees attached to that. e hyo tavo conside getting comp growth in your investments, you're compounding the impact that those fees have on your savings. >> is therlde a c way t quantif how much it affects -- i'm sure it depends on your fee and the types of products have you in your account. what kind of an impact might it have? >> you have to add them all uou and can get to 2% rather n quickly. takeample of the $100,000 investment. over the 25ou year period get a 6% return every year. that would be great if that happen every year you would end up with $430,000 if there are no fe is ler2%. nen tt cost eats $170,000 into that 430 a you're left with $260,000. it's significant the reduction it your retirement account balance. ould happen.
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anablforur wviewers. what can we do to either cut down on the costs, >> you needin to out what y yourhave, what administrative fees you have. find out what y're paying. it's a 1% annual fee or higher. you need to compare and try to get a lower fee fund. and then keep in mind the advict you're g, a lot of us, including myself need a little we need tothay for . if you have a robo advicer, there's still a fee attached to that. if you're having a target date fund thatom aically conrvative older, that's going to be more expensive than a plain old index fund. >> read the fine print. sharon, thank you so mu c. ing up, taking a swing, meet theroior syiit nun rpose.
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> t fight against muscular dystrophy gained morect tn today. morgan hoffman rallied dozens of aorndts business join him at h celebrity pro a dominick chiao was there in pasey for us. >>er m juscularraews, n dystrop muscle weakness and no eua cure. and progolfer morgan hoffman ntto change that. >> i was diagnosed with muscular dystrophy in late 2016, i didn't want it to be about myself.
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i knew that was my platform, i could help so many otherpeople.t t with many of hoffman's peers.cl struleor wasoi thro h,in until iud read his player's tribune piece last year, i was moved by it, here's a guy that's being dealt a pretty bad hand, but he's trying to make the most of a it, trying to help other people with the cause. >> trying to focus on fheure and what be done today isri ford famee fsupootbltar form. andfferce. you see an event like this, and you see the financial ran fictions of an event like this. o as going to raise a lot of tg lot of research and someone -- maybe not rgan, but someone
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down the road is going to benefit from an event like this. >> morgan hoffman a mouillionio dollars so far this year, and has plans too a lot diseases. and to fund a race for the cure. for nightly business report, i'm dominick chiao in par a.m. w as rsey. that does it for nightly business report tonighan we to remind you, this is the time of year your public televisiontavetion, everyoneee. we'll see you tomorrow.
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>> this is "bbc world news america." >> funding of this presentation is made possible by the freeman foundaon, kovler foundation, pursuing solutions for icam and purepoint financia >> how do hawepe o tomorrow? mind, and then we begin to chisel. we strip away everyg stands in the way to reveal new possibilities.
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