this is "nightly business report" with bill gr >> trade truce. the u.s. and china agree to an economic cease-fe and stocks take off. turningt? po from stocks to bonds to the auto market investors arerejusting their outlooks to figure out what comes next. house hunters. why the housing market may heat up this december in what is traditionally a cool month. those storiesuc and more tonight on "nightly business report" for this monday, dece and we do bid g you ad evening, everybody. welcome. sue is off ton what investors wanded to hear -- -- wanted to hear, the u.s. andhi entered

into the trade truce of sorts at the g20 summit in buenos aire at the open of trading this with g, stocks took off wall street relieved, at least for now, that the frosty relations beten the world's two largest economies are beginning to the dow jones rose up to 25,8236. nasdaq was up 110 and the s&p 500 added 30. both lmiders ced to hammer out details over the next 90 ys for now, the u.s. will spare beijing the tariffs and then president trump tweeted that erina has china has agreed to cut tariffs on an-made cars. u.s.-made goods. treasury secretary steve mnuchin today called this a good deal for the coun >> thereas clearly a very genuine offer from president xi to president trump to make sure that they opened up their

markets to u.s. companies. this will be the biggest single opportunity for economic growth for u.s. companies and u.s. workers. so i think this is big difference. >> so what should investors expect in the days and weeks ahead? well, mike santoli starts us off tonight. >> stocks are clinging to slim gas after rallying on new clarity. so some are reaching bk a quarter of a centu to make their case for a strong 2019. several strategists parallels between now and the year 1994. both years saw stock indexes mostly range bound despite strong corporate earnings growth as the fed lifted rates aggressively to head off inflation. there was even a retaking of the house by the oppositio party to

a first term president in 1994. this comparison isppealing to bullish investors because once the fed signalled in late '94 that it was nearly done , tighteni stocks took off. surging more than 30% in 1995 even as growth slowed and inflation stayed benign. of course, there are plenty of differences too. we are now deeper into the economic and credit cycle than in late 1994. stocks are less cheap now. and there's less room for profit margins to expand at thi point. still, even though in 1994-95 replay might be close to a best case scenario, that's n stopping the optimists from listening to the echoes from the earl for more o where the stocks may be headed we are joined by michael lee. market strategist. >> how are you doing? nk it's clear that the 25% tariff was priced in this market. and when you don't get it, we get the market to rise today. y.

we had low expectations going into the g20 meeting. camehe deal that president xi together with coming out of this was excellent news. we saw that reflected in the markets today. >> but there's still details to worked out. i mean,aw we certain sectors that took off. caterpillar was stronger, automotivetocks were stronger today. but there's a lot of uncertainty about the groups,ren't there? >> absolutely. i think this will be a long, you know, drawn out, drag out street fight of negotiators. but when it's so complex, so long, it's so drawn out, any momentum is good mom gives a li side gives a little. i believe resetting the cards o the table, opening up marwits be better in the long run. >> we have actually 120 days en you considerhe 90 day clock doesn't start until january 1st. what do you think the market

does in t meantime? >> barring any negative news or negative headlines that come out, i think it continues to strengthen. as the underpinnings of the u.s. economy are strong and they tend be improving albeit at a slightly slower pace than this year over last year. >> so you're not worried about a slowdown of some kindoing into 2019? >> you know, i think we'll have robust g 19 to 18 as it was from 18 to 17 but stocks can perform extremely well. >> what about theup g that are rallying on this truce? the autos, the agricultures, some of the industrials, do you like those at these levels? >> well, you know what i was really encouraged by today was theer rec in technology stocks. those have been badly beaten, badly bruise those are t leaders for the last couple of years in this tremendous late stage market rally we have. thes very encouraged to see nasdaq up significantly today. >> mike lee, thank you. >> thanks for having me. >> i appreciate it very much. elsewhere economists you

know had called trade tensions with china a major obstacle to growth what arehey saying now? steve liesman takes a look. >> wall street and business executives welcomed the trade truce between china and the united states with a mix of relief that the leaders had averted the worse for now. and also skepticism that a rldl deal cet done in 90 days. quote, there's as yet little evidence that the countries are on the same page onle timetab and issues to be resolved. the investor bank sai,in a reportt issued that report just hours after president trump announced he had agreed with president xi to hold off on new threatened american tariffs on chinese goods. executives at thdtbusiness role which boasts the l this wl lead to both important reforms in china and a de-escalation in trade tensionss manyaw the 90 daytime table as ambitious and doubted something substantive could be

accomplished. goldman sachs said perhaps a 20% comprehensive deal over the next months. and morgan stanley believe it offered upside to global growth, especially in china and better growth can mean more intert rate hikes and some economists said just the reduction in trade tensio to put another rate hike in play for as early as march 2019. and analysts fundamentally held two opposing views. first that it serve as a sign that both leaders see further escalation in h tariffsps neither side and could be permanently off the table. second though with two sides so far apart on basic issues that 90 days from now when a dealis t done the world will be right back on the brink of a u.s./china tra war. for "nightly business report," i'm steve liesman. so what willhis temporary trade truce mean for bonds and interest rates? joining us now is jack mcentireo poo manager from brandy wine.

i don't want to be too wonky about this, but if this is good for growth as secretary mnuchin suggests you would imagine that interest rates would go up. short term interest rates did go today, but long term rates went down and that usually happens when the market's so the bond market i think is expecting notes nrily a slower economy. but lower inflation. sof we are really making progress on the tariffs, we're not going from 10 to 25%, that means that we're in nothing to -- not going to higher prices. that was one of the factors that helped the bond market today. >> and okay, good point. what do you think then happens now asal we wereng about the stock market between now and that 90 day period in march when we hopefully get a deal. what do you expect interestte to do? >> so i think the -- unlike your ther guest i think that u.s. economy it's slowing. not recession, but it's slowing. going to go from t3.5% growt

maybe 2.5%. but more importantly, i think inflation is going to remain tame. think the shape of the yield curve where longer dated rates are going to be at or below short rates. that's a sign that inflation set the stage for -- i hate to say it, but maybe a goldilocks scenario. you get okay growth without edflation. the doesn't have to tighten. that's a good environmenfor bond for equities as well. >> but the fed is expected to tighten ts month. now as steve liesman just reported, economists are expecting another rate increase ree. i think they're going to tighten this month. i'm in the camp i think it's a dovish tightening. meaning they'll tigthen but i k the forward guidance component is going to sound a little bit like, hey, we don't see a lot of inflation, we're

not going to be thain aggressiv ightening next year. i think that's a pretty good back drop for financial assets in general. >> quickly before we go, some the rickiest of the bonds out there, the high yielding bonds. what are they doing now that we have a trade tce going on now? they'll do okay.ies. but your viewers should look towards emerging markets. that's the biggest beneficiary of sort of easing of trade tensions between the u.s. and china. >> jack mcentire from brandy wine global investments, thank you for joining us tonight. >> good to see you. certain there are always two sides to any deal and while details are still to be wrked out, theay it's being presentedn china is not exactly the same as how it's being presented here. eunice yoon has the story from beijing tonight. >> chinese and american negotiators are expected to meet

in theomg weeks to work out unresolved issues. the economick teams would w towards removing all tariffs as instructed by president trump and president xi. the eventual removal of alls tariffs being played up in china, but not mentioned by the white house. from the readout, the talks will address what the u.s. feels are china's unfair trade practices and cyber theft. china hasn't acknowledged that it engages in the practicebe th forced technology transfers are barely mentioned here. the 90 day deadline and the possibility that the tariffs ould rise 25% have been played down. the state press says the diussions instead will focus on opening up china's markets and boosting imports. based on the needs of the chinese market and its people. the differeninterpretations ar the two sides can achieve if they don't see eye to on what the problems are.

some other updates on the trade deal -- qualcomm smsed the idea the takeover could be revived. and on president trump'sweets on china reducing car tariffs, areas likeff ha ta but didn't give any details where they see eye to eye, that the meeting was a success. one executive put it this way, that means that we're not in a cold war at leas for "nightly business report" i'm eunice yoon in beijing. at some to take a look of today's upgrades and downgrades. trade very much the part of the story. caterpillar was upgraded to buy from neutral at bank of america merrill lynch because the risks have been reducedeiven the trruce over the weekend and recent comments by the fed chairman. price target on caterpillar now $163, that stock rose more than 2% today to 138.95. nike is being called a best idea for 2019 at citi. the analysts she company

will benefit from global growth. the firm also cited the cooling of trade tensions between the u.s. and china. shares were m upe than 3.5% today to 77.94. and verizon was downgraded to neutral from ove jpmorgan. they cited the valuation given the recent outperformance and it's $62, the shares fell 3.5% $58.16. before the opening bell this morning, the new york stock exchange and the nasdaq silenc pres george herbert walker bush who died at the age of 94. the exchanges will be closed on wednesday as part of the national day of mourning as the nation plans a tributewill s to washington and back. here's nbc's gabe gutier >> reporter: from the heart of texas, to beaches of maine,

tonight the tributes are mounting. >> i think he's one of theav be we ever had really. >> reporter: final preparations now under way for the fond farewell to president george dear f and forhief of staff james baker visited him the day he died. >> and he, looked he opened both eyes. he looked at me and he said, where are we going? i said, we're going to heaven. and he sai >> reporter:r. bush's last words spoken by phone to his son i love you too the 41st president honored today not just as a statesman but as father, a neighbor. the houstymony paying tribute to his love of colorful socks. >> he would treat everybody inu n the same, with the same amount of respect. he loved houston. reporter: former vice president dick cheney served as his defense secretary and says president bush led the charge as the cold war ended. >> not by brute force. not by threats. not by taking advant, you

know, dancing on the berlin wall as it came down. it was masterful. >> reporter: air force one will move his casket from washington to on wednesday, his funeral at the national cathedral. he l then be flown back t texas and buried on the ground of his presidential library and museum. ann boykin had been here before, but today was different. >> it was tough. and i thought of my dad. he lived a long life and he accomplished a lot of great things. nd was kind of an e of an era. >> the greatest generation gone, but noforgotten.

congressional replicans in washington are now considering a two-week stopgap funding bill ahead of friday night's deadline in order to avert a partial government shutdown. a major issue that has yet to bo ed though is funding for president trump's border wall. and medtings that were sed for this week to discuss that impasse have beenon pos because of the memorial and observances for former president bush. oil prices rallied today after russian presidentti vladir and saudi crown prince mohammed bin salman agreed to extend outputthcuts. discussion happened on the sidelines of the g20 summit. something that we had mentioned as a possibility on friday. opec meets later this week ande there coulddditional drama at theatar said that it's

start of the new year. domestic crude settled up about 4% in today's trade. auto stocks revved higher as well,ollowing word that china is expected to lower the tariffs on american made vehicles and earlier today, november auto sales reports showed u.s. consumer continued to buy models a at healthy pace asll phil lebeau has more. >> reporter: on assembly lines from south carolina to alabama, to californ the expected reduction in auto tariffs in china is welcome news. over the weekend president trump tweeted china has agreed to reduce and remove tariffs onin cars cg in to china from the u.s.rr tly the tariff is 40%. if the chinese government does cut the tax o u.s.-built vehicles, it's expected to drop down to 15%. in eory, that should mean bmw and mercedes-benz will see continued demand in china for

e suv's they ship from plants in the southern u.s. they're the two largest auto exporters from the u.s. to china. meanwhile, a lowerho tariffuld spark greater sales in china for tesla. china is the world's largest market f electric vehicles. since the country raised the u.s. auto tariff three months ago, there have been reports tesla has seen slower sales. the china trade truce comes as automakers post november sales that show americans are still in a buyg mood. especially when it comes to trucks and suv's. fiat chrysler thanks to the jeep brandes saw sump 17% last month. overall, 2018 sales are on track to top 17 million vehicles. a record four-year stretch for e u.s. auto industry. that strength is expected to continue through the end of the year. especially as automakers and dealers push year

end sales promotions to bring re buyers into the philea l "nightly business report," chicago. well, let's turn to karl brouwer to talk about the trade truce. he's the executive analyst at kelly blue book. >> great to be here. >> as it happens i was speaking with a soybean farmer in north dakota and he was pg out it's great that they want to when that's going h to happen because they have to make plans that go out much innger than 90 days and the auto industry is cer in the same boat, aren't they? >> that's exactly correct. kind of international issues and questions really tough for them. because the auto industry operates on a very long time frame. plans thy can take three years to reach fruition. and if things happen in those thre years, two years, that

upset what they're going to do today it makes things very tough. so this level of insecurity or uncertainty about what's going materials that'sr tough to plan around. slows them down. >> we are three months out from when chinese did raise some tae u.s. automotive industry h done in the meantime to deal with that. >> and thas kin of the point. i don't think there was much they really could do. you know, that kind of time frame is tough to make big changes for especially back the other way. , you know lookime it would take at new supply chains or new production optio or even certainly long term product planning that -- they wouldn't really want to make a change in that time period especially if there's reason to believe theyd co go back and that the tariffs could back down. that's the tough part. they can't keep having a couple of months of this, and then

three months of a truce. we don't know what will happen at the end of the three months. they're kind of stuck the whole time. >>here's a disagreement on where tariffs will land reportet mentioned, maybe 15% is where they remain at some point. but larry k the chief economic adviser at the white house said today they could conceivably go to zero. you know, there's a lot of benefit from both countries to come to an agreement on this. and i think s it's been an imbalance, t certainl tariff amounts have been quite drastically different between the u.s. and chinaanor some time. i think there's going to bir co agreement that both nations can be happy with or at least satisfied with. and that they can depend on for an extended period. at will allow both nations, industries, to start planning and knowing what they'll be dealing with for the years to come. >> and a lot more to come in the meantime.

carl aoc tv takeover and we begin with next star buying tribune media. hethat creates largest operator of local television stations in they. coun back in august, sinclair broadcasting planned to buy tribune, but then canceled that deal. wall street apparently likes the new deal. nexstar was up more than 6% to $88.32 and glaxosmithkline is buying tesaro for about $5 billion. they say the deal will strengthen the oology pipeline and push them further into the competitiv.drug mark tesaro rallied to $73.50 and glaxo fell more than 7%. $38.61. as eunice yoon mentioned earlier, qualcomm said a deal to buy p semiconductor remains

dead. they abandonedhe bid after failing to secure approval from chinese government ofercials. but ahe g20 summit over the weekend, the white house suggested that china could reverse itself ade approve that . but qualcomm executives said today they're no longer interested. shares of qualcomm werep 1% to $59.14 and nxp was up. altri is in a talks to acquire canadianannabis producers. all three announced a significant minority stake it was taking in e-cigarette company juul. the crono shares jumped up today. coming up it may be getting colder outside but the housing market is heating up for buyers.

there are definite dnsides to both buying and selling a home around the holidays in particular a but this season may be an outlier because of several unique dynamics in the market. dianaolick explains. >> welcome. a great house. >> reporter: at a sunday open houseubn thebs of chicago -- >> everybody likes the >> on a cold day -- >> you have to have a fireplace. >> reporter: buyers werearming up to this split level colonial. despite the ice already on the ground. because while decembe may be the slowest month for the housing market, this year there are several reasons for both buyers andelrs to make a holiday deal. first, mortgage rates.

they spikeal this with the 30 year fixed jumping from around 4% at thetart of the year to just over 5%. they fell back slightly last week, but are on the rise again now. i see more people they're afrad rate will be higher in 2019. >> reporter: and that is the expectation. in addition, the past few years have been very competitive pricewise because of low supply. but prices are staing to ease up now because of higher rates. add that to the fact that homes sold in february which were deals sigd inanuary and february have a median sales price ofbout 18% less than the market peak in june according to remax. that is likely because half of because they're more ve kids, motivated. >> that buyer has to move. either they have a lease expiring january 1, or t saved enough money for the down paent so they're m mry christmam buying you a house. >> reporter: buyers have

competition. views for property are 21% lower in december than any other month according to realtor.com. december does have the fewestti new ls of any month, but that's a plus for sellers because it means less competition from the neighbors. for "nightly business report" i'm diana olick in washington. and to read more about this market youer housing can head to our website at "nbr".com. that's "nightly business report" for tonight. i'm bill griffeth. thank you for joining us. have a great evening a

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