♪ this is "nightly business report" with sueer hand bill griffith. >> record rally. the s&p and the nasdaq close at new highs as the federal reserve chair reassures investors and says the economy looks strong. >> losing ground. stock picoirs are not dng as well as their passive peers, but some say that cou cnge. >> the holy grail of classic cars. we'l show you what could be the most expensive vehicle ever to sell at auction. those stories and much more tonight on "nightly business report" for ts friday, august 24th. good evening, everyone, and welcome. bill griffith is off this evening. we begin with thearket. today the s&p 500 and the nasdaq closed at their hshest lev ever. this comes just a few days after

the bull market marked a milestone becoming the longest in history so let's get right to those numbers. the dow jones industrial average advanced 133 points to 25,790. the nasdaq added 67 and the s&p 500 was up 17 and all of the major averages were higher for the week. investors' optimism got a lift after the federal tserve defend central bank's plan to raise interest rates. jerome powell made the comments at anvent attended by some of the world's most influentiall cent bankers meeting in jackson hole and steve liesman was there. chairman jerome powell in his ftist m as chairman at the renowned kansas cityrv fedel re bank conference in jackson hole, saying they remaia approprinder cheg markets by saying there does not seem to be a risk of overheating in the market and this dpite hiej amounts of fiscal stimulus.

ube u.s. economy has strengthenedantially and more important for markets. he said the strong economic performance hexpects to continue. he also said the federal reserve would do whatever it takes if inflation becomes unanchored. ae fed looking for a 2% inflation targe inflation is right about there now. there was a concern that powell expressed about whether or not e fed ought to be looking at inflation or perhaps in financial mowkets andl saying in the speech in the run-up to the past two recessions and ildesting excesses appeared mainly in financial markets rather than inflation and the risk management suggests looking beyond inflation for signs ofss ex and powell will be looking carefully for signs of whether or not the fed ises raising r too slowly. there are a lot of issras for the fereserve to worry about including global contagion s.d trade w jim buller said this august is a lot different from past augusts when the fed met under crisis conditions.

ot would we have been in the situation as we are today for a long time. i think coming out here, a of times we were in crisis mode. >> right. >> yeah. so i do think we're in good shape for toy, but monetary policies are about trying to play it out two yearsahead. >> of course, the federal reserve officials and from all over the globe gather here and there's a wualild life and themo tary moose makes an appearance and he showed up and wh knows what that means for central bank policy in the future. i'm steve liesman in jackson hole, wyoming. the trump administration is doubling down its economic agenda touting growth, deregulation and tr but on that last point as kayla tausche reports, there's a lot of b unfinishusiness. >> u.s. and mexicania offls are hoping to reach a deal by today, staying in the naftatr ches through the weekend. negotiators racing the clock to each a deal b end of next

week so it can be b signedy mexico's outgoing president. once the u.s. and mexico reach an agreement, canada will talks for the first time since june. >> we keep on working. they have to be finally stopped. we keep on working. >> negotiators racing the clock to reach a deal by the end of next week so it can be signed b mexico's outgoing president. once the u.s. and mexico reach an agreement canada would rejoin talks for the first time since june. one possible olive branch, dropping their washington demand, the deal must be renewed every five years. called a sseset cl it's been a sticking point for prime minister justin trudeau in particular. most of the investments people look at today have 15, 20, 25-year timelines. so we don't really feel that a deal with the sunset clause is much of a dea at all. >> nafta is one of the unresolved trade disputes for the trump administration. european allies and doubled on

turkey and talks with china coming u empty despite hours face to face at the treasury department. ficials from beijing arriving in washington with no new offer to resolve a-l mong tit for tat, leaving presint trump to call off a visit by mike pompeo to north korea until china becomes a better trading partner. >> that could take months. the u.s. is studying a new set ofou tariffs that target half of all chinese imports and the possibility of labeling ina a currency manipulator in a mid-october report. all before president trump is set to attend the g-20 summit im late novemberg face to face with the heads of many states where the u.s. trade agenda isng pla out. for "nightly business report," i'm kayla tnsche washington. >> officials in china are want pleased with the trade dispute and are working to prote their economy from the fallout. eunice yeun has details from beijing. >> the finance minister said that china will strike back

every time to defend itself, but that its counter strik will be targeted. speaking to reuters the mister said we are responding in a precise way. the mister said china didn't want bystanders to become collateral damage saying, when we try measures we try not to harm the interest of foreign businesses in china. the minister is most concerned about the welfare of workers here. the trade conflict, he says, hasn't hurt the economy muc so far, but he is anticipating job losses in the exportto sector. counter that, he said that the government isuspending more to help unemployed find new jobs and ensure their basic social security. he said beijing also wants local governments to issue more special bonds to fund tu infrastruc and expect the bond to blow past $145 billion by the end of the current quarter, but the minister insists that the morerotive fiscal policy won't blow out the

budget saying that we are m talking abousive stimulus, nor do we want to incur financial risks to take care of everything. but many economists worry that the greater spending would only create more financial problems for china down the road. for "nightly business report," m eunice jung in beijing. >> on a day wnan the s&p and aq closed at new highs, morning star are weighing in on active versus passive investing. in a new report morningstar concludes that passive investing is outperforming active stock picking even at a time whenli vola is picking up. bob pisani has more. >> stock pickers a having another dismal year, twice a year, morningstar publishes a report that measures the performance of u.s. active stock funds against the passive peers. the latest conclusion, same as years past, they're losing o against the passive brethren. the active u.s.dtock f managers outperform their

passive peers over the last 12 months. it wasn't muchetter they year ago and just 43% outperformed in 2017. why can't active managers outperform? they have cash on the side lines and that's the first problem. second, they also have the wrong mix of investments and ei undet has issues. for example, you're going to underperform. third, this is the mos important thing. they charge fees, higher fees and the highest active manager space is their own fees. they charge below its fees were able to outperform their passive peers more often than those who charge higher fees. think about it. it makes sense, if you charge 5% nd your competition only charges a half a percent you are going have a problem performing long term. investors would greatly improv their odd success by favoring low-cost funds which succeeded far more often than high-cost funds over the long term. makes sse. for "nightly business report,"

i'm bob pisaniw at the rk stock exchange. other investors say toxic stockicking could be a better and more lucrative strategy. we are joined by nancy tangler by hartfordinancial and her fund has outperformed the s&p 500 every yearor the last five years. welcome, nancy. nice to see you again. >> hi, sks. th for having me. >> bob laid out some of the things he's hearing from people about why active managers are not performing as well, but as you see it and as a successtil manager, why do you think some are underperforming? >> i think many active managers, sue, are afraid to take risks and that is actually one of the est risks in investing is to not take enough risk. so theyoverdiversify their portfolios and then they end up rating marketlike returns. we run very concentrated portfolios. when we like a stock, we like it up to 5% of our portfolio, so our top ten holdings represent 5% of the portfolio and that's

how you beat the market over time. >> what do you look for in a stock? does it have to do basically the yield relative to the history and the dividend? how do you pick a stock and put that type of concentration in? >> we do look at relative yield becauset the management out the dividend policy and it gives usnsht into what management thinks and then we compare that to the stock's history and to the s&p 500. it's simple calculation, actually anyone at home can do it with data fro cnbc.com, they can pull up those numbers and what you find over time is you get the periods of under and io overvalu three years ago, apple came into our screens. we bought it. no one liked it at the time. i got into a number of friendly debates on the air a we were buying the stock in the '80s while other managers were saying it was an i fun cpany. you have to be committed to the discipline and you really have toaven opinion about whether

or not management is up to the task because when you're changing a companyike apple, you've got to have the right leadership in place. >> youentioned concentration because i assume that does not mean that youon'tave diversification. >> that's correct. so we won't let our portfolio get to a huge weight sector, ond y go up to a 50% overweight and we won't let a stock get aboveut 5%, if you don't have the conviction to buy more than 1%uan an indiv stock, you have no business owning it. >> sour view is we -- you know, we overweight the highest quality, cheapest sto and then we add some risk around the edges. we accessorize with risk, with some of thcks, we have less confidence and we hold less in those particular holdis. >> nancy,s than so much. appreciate it. >> good to see you. >> nancy tangler with hartland financia for those who do want to stick with stocks, our market monitor is coming up and

he has aist of names that he says could rise as much as 20% over theext year. he's with us later in the program. first, though, it's time to look at some of today's upgrades and downgrades.x netfas upgraded to buy from neutral. the analyst is upbeat about the company's opportunities india. the pricearget is $410. the stock rose more than 5% today to 358.82. children's place was upgraded to buy from neutral at cresspy. thenast expects double-digit growth over the next two years. the price target is $16a 5 and philip morris wasowngraded to hold from buy at jefferies. it sees s significare loss and the price target is $80. the stock dropped 3% to $79.69. still ahead, how trade uncertainty is impacting a small south carolina manufacturer. ♪ ♪

♪ fairfield county south carolina suffered a series of economic tbacks in recent years. a walmart shut down and so did a textile factory. o closetal is preparing and a nuclear power plant was halted. now a local manufacturer could close its doors andhe company is citing tradeta uncerinty. kate rogers is inorwinsboro us tonight. ♪ ♪ this south carolina plant assembles tvs with parts imported from china, but tariffs on those parts may raise costs, putting the plant and more than 120 employees in peril. element electronics declined to participate in this story, but in a letter to state officials

earlier this month, the company said it would close down it fall and lay off 126mployees adding it hopeful the closure will be temporary. mike says he'll be working closely with state lawmakers and politics aside to keep the plant open. the c tariffs thepany is hoping to avoid are not yet inc efccording to the united states trade representative. >> this is not the way to do tariffs. if you want to have a tariff policy, make sure you're taxinge people that competing against americans. tuis could be a blow, not to just manufng and jobs in our county, but even to retail and just basli q of life issues for all of the folks in the county. >> the company has b ties toh ambassador nikki haley who is governor and helped lure the plant to winsboro before both joined the trump administration, but an omb official said ultimately president trump will make the final decision on tariffs, adding that director er mulvaney has n spoken with

the president specifically about element. >> another headac for element electronic is getting pushback for the alliance formerican manufacturing. the group says element should not be exempt from tariff because they're not a true american manufacturer because of the import of their products. winsboro is in wait and see mode and the ownf a local doughnut shop are concerned about more job losses. >> i look at doors closing, those are jobs, those are parents and those are families that aimpacted, you know, those are their dollars first before it trickles down to us. >> and local officials can only hope tariffs are avoided. >> we are the fighters and survivors and we will survive, and there will be something good that comes out of this. >> for the moment, it's a matter of bucklingown and waiting to see what a trade war means for the future, kate rogers, winsboro, south carolina. footlockeraces high

hurdles. the athletic shoe retailer saw sales growth slow in the most recent quarter and they're not expected to imove much. the company issued a downbeat revenue outlook despite better-than-expectedng ear shares were off more than 9% to 48.32. cl retailer buckle, on the other hand, saw same-store sales climate a quickec than ed pace, earnings and revenue both topped expectations, but the stk fell 4.5% to 26.55. hibits sports said strong performance in its e-commerc business was not enough to offset weakness in other areas of its business. the sporting goods retailer reported a surprise loss in sales that fell short of estimate the company slashed its full-year outlook and the shares plunged 30% to finish at 20.53 and iconic is reportedly inta s to sell itself. reuters says the aluminum products maker is talking to a

number of interested private equity firms about a potential deal, butdded thatome of the firm believes iconic's acquisition price is too high. sharesf iconic rose 5% on the news to finish at $22.23. and now to our weekly market monir who hasames of stocks who he says could grow as much as 20% over the next year. this is his first time on the program so we welme john zalinsky. welcome, josh. nice to have you here. herreat to have you >> let's start with your first pick. to me familiar name because my kids play fortnite and that's one of the reasons why you like it. fortnite is exploding all over the u.s., but we like it particularly because it hasn't ven been approved for play in chin so when a chinese-based company ise massive in u.s., there could be potentially 800 million users in the market in china.

once they get approved tha could be great for the stock and we also like thech app that they have. r, their i investmen spotify, snap and they're ubiquitous with online gaming as well as social media and they're really driving revenue, as well. one interesting pnt to note is that social media aertising revenue has gone up 55%. >> right. >> so that's huge. >> next isfacebooknd an enormous amount of people around the world use bofa. >> billions use facebook and although it missed its earnings beat just slightly. we see it as the new potential for google ad words and we see a lot ofompanies drivi away from spending money on google and they are -- they' reaching consumers at an all-time high in facebook, from anything from if you want a betterody to, you

know, you see all these -- s all these adds for getting a six packnd they're monetizing everything because they watch us, they know what we want and they can target far bter than google ad word. werehink thes a great potential there. ,> and next is cvs. you kn it did take a bit of a fall because there's been so much jockeying going on on this particular part of the health care division. why do you likevs >> it took a fall in april and may, and they're launching a one-stop shop and they had over a thousand of these one-stop shops where you can get a flu shot and you can getut pharmaals and organic food. they're popping up everywhe and they're getting good stores at good a locatio they can become better like their l competitore walgreen's and some people look at the etna deal as the potential problem

for the stock and i can see thaa opportunity especially with the trump administration looking for cheaper health insurance plans. this could be how they dog it. merg this sort of one-stop shop and maybe putting doctors in the pharmacies to get a flu shot and they can write you a prescription. itill be so convenient and get the prescription filled at cvs. >> josh, thank you. we appreciate josh szalinski with advisory group. coming up, rev up your engines. >> i'm robert frank in pebble beach. where jeep is the new ferrari an they can put the brake on the classic car market coming up on "the ♪ghtly business ♪ ♪

♪ ♪ procter & gamble may be trying out a new approach to connect with younger consumers. the owner of dawn soap and tide detergent has reportedly applied to trademark three-letter acronyms often used by millennials in text messages for use in its product marketing and the most common you may have heard of is lol which stands for laughing out loud.tz nelson p has repeatedly criticized the company for its lack of thousands of classic cars were on the auction block at pebble beach's annual auto event and while many of the vehicles could fetch more than $1 million a piece, there's one in particular that is t stealinghe show. robert frank is in boobl monterey, california, with our story. ♪ ♪is >> it the coachella for cars, the burning man for burning

rubber, nearly00 100, people descending here on pebble beach for car week, 1200 cars coming up for auction for a total of m $3illion. all eyes will be on this car, the 1962 ferrari 250 gto being sold by rm 70s that will the most expensive car ever sold at auction. estimate $45 to $60 million. what makes the gto so valuable?r fe only made 36 of these cars so they are among the most scarce ferraris ever built. they also dominated the racing scene in their d winning over 300 races and look at it, this is one of the most beautiful, if not the most beautiful, ferrari ever designed and built. >> it is being g sold byg witten, one of the first microsoft executives who bought the car 18 years ago for one-tenth the current vlue. >> it'y hard to fathom, but you're in a space where you have

collectors and car collectors and ferraris are the most collectible car, and this is the gto is a pincle ferrari and it's just an amazing car to have. >> the hottest part of the car market rht now is older trucks and suvs. blue collar collectors d young buyers love the utilitarian look of the older trucks that are also easier to repair. >> those are accessible vehicles and ver large numbers and easy to work on and they have a very, very broad appeal and they match what people are driving every day on a daily bis and people want a vintage version of i and that's where they're going. >> one threat to this market is tariffs. a lot of the classic porsches and ferraris and mercedes sold in the u.s. areur fromean sellers and tariffs apply to all ldw ask used cars so it c add 25% to the price and choke off supply. t the issue that we're going have is nobody's going to be

willing to pay an additional 25% %o get their car so there might be a advantage to bring it to the u.s. and if i have to pay 25% to get it here, it will kill that market. >> for now, the classic car boom shows no signs of slowing. fr "nightly business report" i'm robertnk in monterey, california. >> that is nightly business report for tonight, i'm sue herera. we want to remind you. t is is the time of year t your public television station seeks your support and we thank you for it. a haood weekend. see you on monday. ♪ ♪

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