>> aouncer: this is "nightly business report" with sue herera an bill griffeth. stocks plunge. the dow tanks, falli nearly 800 points as investors run from equities in one of the worst days of market this year. >> with session warnings, the bond market sends a stark message to investors. but what's really going on inside the economy. >> housing hurt, a leading luxury home build s s sales could be in for a winter chill. those stories on more on "nightly business report" for tuesday, december 4th. good evening, earn. and wlcome. stoce battered and bruised. the reason wasn't just trade. though that didn't help. today a b focus was on the bond market, which some say is

signaling a slo eown innomic growth. the word recession is even being thrown around. the retreat from stocks was broad, all of the major indexes fell more than 3% with the financial sector hit hardest. let's get right to closing numbers. the dow jones industria ample plunged 799 points to 25027. the nasdaq down 283. and the s&p 500 slipped 90. >> what exactly happened in the treasury market that sent stocks plummeting like this? steve liesmanakes a look at what the bond market may be gn ing. >> reporter: among the big worries that helped the decline tuesday is a what's calle inverted yield curve. sounds complicated but about it's a technical term meaning a long-term bond like the 10-year yields lhan the shorter bond like the 2 it's supposed to be the other way around. it's called the 2/10fred once its negative it has almost a perfect record of predicting a

are recession a year to 18 months out. withyehe 1 yelleding 2 the.9% and 2.58. the difference is as small as since 2007 on the eve of the financial crisis. what's troubling the market. >> i think theond market i snitching out a continuation of the slowdown in growth we are seeing and possibly moderation or a topping outn the ina flags trends, particularly with the drop in oile and in c pce we saw last week, showing a little coming off the edge. >> after celebrating the weekend trade talks between xi and trump, a second look by the markets suggested there might be less to the than first met the eye. that creates the possibility that the u.s. and china will be on the verge of another trade war just 90 days from now. second, economies aowing, especially abroad. and investors don't quite have a read on how much u.s. growth will eased back as a result third all of this has investors trying to came out howhe

federal reserve reacts by pushing ahead on raising rates or easing up on rate hike plans while the inversion has a good history ofpredic but there is no sign if to it remains po so there is a chance there is a false signal. for nightly business report, steve liesman the trade concerns that steve just mentioned were acknowledged today by the ceasury secretary at the "wall street journal's council meeting. >> i think tha the market is noah wait and see. the market is trying to figure out, is there going to be a real deal at the end of 90 days or not? and i will tell you there are specific issues that thepr ident agreed on, okay, but now have to be dealt wit on specific wording, for the first time china agreed that dsh to a concf specific time frames, specific deliverables, ands penalt if they don't -- if

they don't respond. now, whether we canethat to a real agreement, or at least make a lot of proess over the t-day period or not, time will tell. de sensitive stocks like kaerlt pilar,oeg and 3m all lower in the session today. >> let's talk about the selloff. ob missly usually at the stock exchange. he is with us. >> i made a wrong turn on the west side highway. i'm here. >> what's the message the market is telling usou can tell from traders downtown. >> slower growth is the main message and continued concerns about tariff. as you heard mr. mnuchin we don't have a deal. >> even though the economic data is looking good. >> the u.s. data is good. but the markets is a discounting mechanism. are trying to figure out the 2019 earnings picture. right now analysts don't it's bad, up about 10%. but certain signs globally cna

and ufrp, that the numbers are not as strong as people think. some m people,gan stanley has 4% earnings growth. the market moves on what earnings look like a year fromw if you are talking about 4% instead of 10%, the mket has a problem. that's the problem. we can't figure out what the tariffs will be and what kind of global growth or slowness we get. a better picture on the fed and raising rates. but the two x factors are causing a lot of gyrations. >> i was asking you about the fed does the day like today couple wit the slowing growth? does it change the dynamic for the fed.eo >> there aree out saying yes that's changing the way the fed is thinking. but that'sot bad news. if the fed goes slower. two things we hit a important technical level about noon. the twournd moving av the s&p 500, when you drop below that, that tends to indicate growth.

also we have the flatter yield curve where the 10-year is coming down. historically that indicates slower growth. wait a winute get two indicators that indicate slower growth. this tells momentum trader, guys trading on how growth down a bit. take off risk. that's what we had. the market went down notab at th hitting the twournd moving average. >> bob pisanihoing us today. >> concerns over a slowdown dominated trading not everybody is worried because today we heard from a commerce secretary and two big bank ceos, all of whom said the economy is doing just fine. >> the economy itself is really strong. you have seen the unemployment figures. you have seen the new claims. you have seen industrial . producti you have seen executive confidence. you have seen con confidence. those are all very, very high. >>e feel very good about the

u.s. economy. the prediction is it le slows a bit but underneath that is a rong growth ratee feel strong about. >> we have been in a long economic recovery. it's been more muted than prior economic recoveries. that may mean it's going to last a bit ng. but i think we need to to be wary of the fact tha at some point we have a cycle. what we see today in the economy and what we see from customers is generally a positive. and so we're not overly concerned. >> so what's really happening in in economy? peter, our chief investment with the bleakly advisory group joins us. he is back with us. and ian shepherdson. ceo at pantheonma oeconomics is with us. ian let me start withho you. do you view the economy at this point? and is the m wrong. ding it >> completely wrong is probably overdoing. but i think all the talk ofdo sl or heaven forbid is

immint recession is overdone. there are pockets of weakness, particularly housing. but hit by the hurricanes michael and florence there are somen. we have the tax cuts with strong secoar and third rs. but we are not going from those into a rollover. we're going back to something in the middle or high 2% for gdp grow.. that's fi that's enough to keep the unemployment rate, which remember is already at a 49-year lowontinuing downward heading to 3.5 o3.25%. which is a remarkably strong stor >> peter you've been long looking at global growth and that's a a problemear and now it's creeping to us. frayed has clearl slowed. in the third quarter alone we had economic cntributens germany, sweden, switzerland, italy. some of that with respect to japan and germanyn rebounds the fourth quarter. but those are a bunch of

countries seeing economic decline in activity. but there is no questions that exports and global trade slowed. a lot of it has to do with tariffs. a lot of it slowing with china in deleveraging process. it's aching u.s. growth and trade. because we rely on exports with about5% of the u.s. economy. >> so, ian, what about that, can the umy. eco weather a global slowdown from the likes of india and china, a to a certain extent parts of europe as well. >> there's a hitrom those things. but 85% of the economy is domestic i o theer way of looking at it a appear. and the domestic side is strong. uthe greatertainty is tariffs because they could turn the story upside down if in 90 days times the tariffs on chines imports to 25% as the administration threatens tn we have a more serious slowdown. absolutely chaotic. my guesss is t a big bluff and we'll pull back from the brink and extend that

negotiating period further. i don't think china or the u.s. really want to go down the rabbit hole of huge tariffs on everything. it's just too dangerous. th economies are suffering. but equally if we take away the threat both economies do better. >> if he we eye see a slowdown here, peter which sectors lead theslowdown? >> i think capital spending is at risk because of the uncertainty with respect to tariffs. and the growth slowdown we see overseas. i think another k thing is is, do?t coast the stock market the consumer has been the driving force. we are an asset depend economy. ifck the s market goes through the turbulence if this continues that could affect consumer spending behavior. we have seen a slowdown as iann ned in-housing. we see the plateau in autos. you see the downturn in theed stock market it affects corporate behavior because if the ceo or cf see the slowdown

you're taking a pause. >> the transport average had the biggest point decline ever today. there is an indicator there i ess. >> absolutely. a proxy for not only domestic but also international trade. >> weigh in on that, d ianyou agree. t> certainly, i don't want to see the stock mar keep falling another if you days like today it's getting dficult quickly. but my guess is this is a reacon to the president's tweets. calling himself tariffman.f kind turning jupds all the warm thoughts from the weekend. i expect we are walking backom he language over the next few days and things settings down again. but it's clear the peak of earnings growth ian gone. the question of what happens to earnings growth next year is beming very pressing. but i think some of the forecasts we see now are a little bit too bearish. i'm not ready to call a tmeaningful turn economic spoik. i think the domestic story has legs yet. >> on that note, gentleman, thank you. peter with the bleakly advisory graup and ian shepherdson withn

heon macroeconomics. it's time to look at the upgradesnd downgrades. we begin with intel downgraded at northland. the analyst there says weak demand will slow growth. and he add we quote. it takes intel forever to turn the ship and even longer to change momentum. price target $42, the stock falling to 47.75. morgan stanley cut price targets on fedex to $232 and ups to $87. the analyst citing competition from azmodan air. the firm says amazon air could steal as much as 10% of the shipping gias 'revenue by 2025. fedex fill 6% ups 7% appear took down the broader dow transport average suffering the biggest ever pointdaecline meanwhile, apple was downgraded to hold from buy at hsbc with the analyst citing too

gle dependence on a s product, namely the iphone and the reality of what he called market saturation. price target now $200 and the stock closedelow that level at 176.69. speaking ofapple, have iphone sales indeed peaked? still ahead, what that could mean forhares of one of the most widely held stocks. german auto executives went to the house today, including the heads of daier and volkswagen. there to discuss the trump administration threats to impfse new tar on european-made vehicles. but daimler has said that it planned u.s. investments. they are u contingentn no new trade barriers. and the ceo of vox wagon says he

is working on alliance wh ford increasing capacity in the united states. another apple supplier is warning of slowing sales. logicchip maker cirrus says weakness in the market could cause third quarter earning to come in lower than expected. comings on the heels of apple suppliers reducing out looks in recent weeks. and apple is now reportedly turning to promotions to drive sales of iphones. bloomberg is reporting now gnat tech giant mass instructed some of its marketing staff to sto working on current projects to focus on improving f demand the company's newest iphone. sincehe initiative apple has offered a number of of trade in offers that reduce price on iphones for sale currently. >> does all of that mean the company may have reached peak iphone sales? if so what does it mean for the

stock? we are joined by timothy lefkoe thanks for beingitus. >> thanks for having me. >> is it that iphone sales peaked? or people are waiting longer to upgrade or renew with a newe? ph how do you feel about it? >> well, i think that y're finding that with the higher priced iphones and with the cycle seemingly stretching out where peopleight be waiti two or three years to upgrade the iphone that there is aer co that that means a massive decline in iphone sales? i thinkhat that really maybe isn't in the -- baked in the cake. apple grows internationally. so i think these analysts are taking very u.s. cent rick view of a product sold around the world with growth opportunities. >> i can hear tim cook now, he has said for years that wall street just doesn't understand in re growth strategy. yes, s hardwarees are slowing down. but it's the services the

ecosystem feeding the services that are the fwroegt future for the company. what do yothink about that? >> i think he is absolutely right. i thin what apple wants to be is the operating system for everything you do digitally, whether smartphone certainly as eir lead product but also as the computer, tablet, watch,tu evly your car, perhaps automated car, thermostat and smoke detector. even ifphone sales slow it's not because people are buying a differt phone or using a different operating system. they are staying in the ecosphere. creating long-term opportunities for apple products and services. >> what do you do with the stock? we just said hsbc downgraded the stock today, it took a hit. if there is this global growth with india, china, with other parts of the globe, do you add to a position here if you're a long-term in>>stor? ertainly if you are a

long-term investor., you kn sales of almost every product can be cyclical. as long as this isn't a secular change in the way people interact with technology then tough take it a at cyclical weakness. and in a year and a half we are having widespread 5 g service forcing everybody to upgrade the cell phone. i think apple was wise to stop telling people how many iphones they sell. because you see a meaningful decline over the next 18 months until the 5 g phones come on. you.m, thank bill now to the housing market. and a weak report from toll w brothech added to today's overall concern in the stock market. the luxury hom builder reported its first decline in acquirely orders in more than four years and issue add downbeat outlook at well.

diana olick has more. >> apparently the luxury home market is not immune to there widesp weakness in-housing. toll brothers whose average home price is three times the national average reported new orders down 13% from a yea ago in its last quarter. it also gave lower expectations for 2009 than the street was expecting. >> in november we saw the market further soften, which we attribute to thee cumulat impact of rising interest rates, rising home prices and the affect on buyer sentimentll of publicized data of a housing slowdown. >> analysts, phowever,nt out that we have been seeing a slowdown in-housing all year. this is just the first time toll acknowledged it, showing that luxury is aveo sensi to rising mortgage rates, taking a large leapee in the last t months. as for the well-publicized reports, they've come fromll sectors of the housing industry, the home builders be u.s. census, realtoras be fan y mae

all pointed to weakness in homes li home sales and pointed at afford bltd. even toll notified weakness in kr where home prices are highest. >> significant price appreciation over the past fewy s in california, fewer foreign buyers in certain mmunities, and the impact of rising interest rates all credibilitied to this slowdown. >> on the bright side, the hot home price gains areco ing, which should help more people afford to buy. except now that prices are cooling. people want to wait, afraid if they buy now they will losemo y. for nightly business report, diana olick in washington. >> dilatory general hit by hurricanes. cutting discount and sales profit outlook, citing storm related losses. the retailer says many stores re damaged by extreme weather in the southeast and the company warned of higher freight costs. the stock fell 6.5% to 104.10.

auto zone reported a 25% rice in earnings surpassing expectations. wme store salese the better thn ekt expected. process the stocks troes to 6%. the delta expects a key t revenue metri call short of expectations. revenueth quarter unit will rice 3 to 5% despite recene declines in prices, adding to concerns about the industry's ability to manage the decline in oil provides. the stock fell 5%o 56.94. also after the bell tonight, mputer maker hue lit packard topped expectations as they sold more storage and data center products. totals sales grew faster than expected. and shares up initially in the after hours but finished the regular session down. oil prices settled slightly higher today after a volatile seion. as w reported yesterday there

is the expect achation oil prod could reduce output at ath meetg is week, a meeting taking on greater importance. >> jackieening deangelis explains. >> days awayrom the crucial opec meeting in vienna andis ne e can that qatar intends to withdraw from the elca the largest natural gas producer is a relatively small oil produc but sti the move is significant. qatar is separating itself from opec afters clashes with saudi arabia. the country says the move is strategic and not political. but it makes a powerful statement. qatar is forging ahead withan pls for energy businesses and in a new dynamic landscape fueled by the shale industry the e old way of doing business no longer applies. the move raises questions whether others will follow suit putting their interests ahead of group to fight a bar on energy

pricing getting more intense. >> the most important part oin is the increased oil production out of the usa. it used to be that opec was the only game. now they are not. are they powerful? yes. >> but the power lessened by a lot. the fact that qatar left it's interesting. and can it a could be sign that opec is not the only game in town. >> oil prices dropped to $50 a barrel as concerns over reduced demand. producerers take difficult editions. it's been a back and forth playing out on thet few years. canada announced a production cut. they are taking matters this into their own hands. producers are at a los on what today. thursday opec meets. the expectation is for a cut of a little more than a million barrels to support prices over

$50. but does a cut coming on the inflated base really matter. >> i think there are people have to shorten up positions prior to the meeting. i think oil could spike up to $5 does the story itself matter? i don't think it matters that much. what really happens and what they say is happening that takes out.s to figure but i think we could have a spike in prices prior to the meeting. >> while much isuncertain, one thing is for huyer. times are changing in the oil patch and the players are changing course. qatar is the lates example of the crack in the opec armor. for nightly business report, jackie deangelis. coming up expanding economic portunities for at-risk kids. well it was an you go marketdy. but we have a story now about

giving back. at the center an organization in the bronx that received a grant from the chan zuckerberg initiative and rockefeller foundation. kate rodgers has all the details. >> reporter: these young people here in the bronx are getng second chance. >> take your time. >> they're participating in a program called bronx connect, which works to keep at-risk youth out of the criminal justice system and reduce youth incarceration. bronx connect does that. it connects young adults with positive community resources likeme ntors, even job training when many may have little else. >> sometimes in dysfunctional homes,an they don't wt to go whatever theywith are dealing with. some stay on the zbleets bronx connect is one of 10 grantees awarded $10 million each led by the chan zuckerberg initiative and rockeoulleration. these organizations are turning to community leaders to solve economic and socl issues

ranging from disenfranchisement to ill literacy. >> it's important to lock at barriers to success for these individuals. and the folks in the besto positionnow and address the questions are folks embedded in the community. >> part of the premise of the challenge is that hein in a strong economic environ are left behind. >> a generation, two generations ago people had much more economic mility and opportunity in america than we do today. >> bronx connect is already seeing success. participants in the alternative to incarceration program hadon 17% reoffense rates compared to 76% i the city. >> they are completely rethinking the way we addressds the n of young people committing misdemeanors and felonies. and there -- they take it a an opportunity to give the mentorship -- give the opportunities for education, for

kids to actually then move forward in their lives. >> you started working -- it's been like a month right. >> with the grant money they hope to help more. >> we all know when we were young we made a mistake. we want someone to a give us chance and give us a better direction rather than punishing. >> i'm kate rodgers in new york city. >> one final look at what turned out the worst day of the marke this year with each of the major averages down more than 3%. >> that's it for nightly business, i'm sue herera. >> i'm bill griffeth. have a great evening. see you tomorrow.

>> this is "bbc world news america." funding of this presentation is made possible by the freeman foundation, and kovler foundation, pursuing solutions for america's neected needs.hi >> ts fall, it is a season of revelations, from the choice of america's favorite novel. >> it's 100 books we want peoplo to take a ok at. we are hoping to get people to w fall in loh novels again. >> to the fate of a hero's love. >> i'm still here. et and i. >> from the secrives of the most amazing cats toew