>> announcer: this isnightly business report" with sue herera and bill griffeth. dizzying d and stocks mallied and fizzled and gained steam. ng it tough for investors to figure out what the market wants. sour sentiment. surveys show confidence in the economy is waning. the question is when will the harderts statistical rephow the same. industry blossom. why kentucky could fastecome the american hemp capital. thoseon stories and mor nightly business report for this tuesday, december 18th. good evening, everyone and welcom ll griffeth is off tonight. stocks struggled to keep a strong rebound aliven what was yet another volatile trading session. the market rlied early on, but midday the gains fizzled and

thered steam into the close. energy stocks fell on a sharp decline i oil but investors were mostly in wait and see mode, ahead of fee s decision on interest rates tomorrow. the dow jones industrial ample rose 82 points to 23675. the nasdaq added 30. and the s&p00 was up a fraction. bob pisani takes a look at what's driving this market. >> scks staged a comeback early on regaining a chunk of monday's steep los s but another rally faded into the close. it's tough to figure out what exactly the markets want right now. the market has been seized by the slowing global growth story. and it's been a buyer strike lately. we have seen half hearted attempts to rally but all the rallies faile no one is being rewarded for buying the dips. the bul pin hopes on the federal reserve putting a floor under stocks. how would they do that? by signaling a most one rate

hike next year down from the three hikes expected a few months llgt. wit matter? the bears are screaming that they have already priced in one hate like for 2019 and bigger debate around those calling for the fed not to hike at rrl tomo or next year. the problem is thatkblois the fed is spooked about something n the economy causing them to hesitate maybe the markets will have the opposite reaction and go down. so far no real agreements on what makes the market go up or down on the fed decision. does the market rally because they are relieved or to investors tell off because t think the fed panicked. a lot of a confusion. it's been a while since the fed meeting has gotten this much attention. today policy makers gathered the f a two-kay meeting to decide oh on the direction of interest rates. a lot has changed in the market in the past few weeks. and as steve liesman reports the outlook is shifting as well. >> becoming the most contnversial fed meeting

recent memory. with the fed gathering with a prior forecast to hike b rates after a deep market selloff and worries about the ecooumic ook suggesting the fed may have hiked too much. despite the concerns, 98% of respondent to the cnbc fed survey think the fed will still hike rates by a quarter point. but they backed off the outlook for rate hikes in 2019. at least what. the 43 respondents including fund matagers sist and economists lowered the estimates for the number of hikes to just under two. before the deent are debate was whether there was two or maybe three. the reason the group thinks the fed ought to hike is because they think the market has fallen too far. 63% say the selloff reflects too pessimistic an ouook. the biggest threats to growth are stene as protectionist trade policies slowing global growth and a fed making a policy miake. amidhe worries respondents up the probability of a recession in the nieskes yr to 23%.

that's the highest level for the trumppresidency, four points higher than the long run average. but it surged h before ash as 28% and not resulted in a downturn. the fed has a choice to make ane arket bet is that it hikes by a quarter point and holds off some next year. for "nightly business report," steve liesman. and it' no secret the hot housing market is cooling. today another indisappoi report was released. this te on home construction. dian olick is in washington tonight. >> reporter: the nation's home build erps are pulling back. single family home construction took a dive in november, falling to the slowest pac in over a year, accordingo the screecensu this after a report that home builr sentiment dropp to a low level. the only bright spot, multifamily starts jumped over 20% annually showing still strong demand for rental housing as existing home sales weakened

further. new home sales for november aren't out but one top analyst surveyin over 400 builders says the writing is on the wall. >> i think we aren a correction. sales according to us -- our survey last month were down 19% year over year. off a tough calp. i it a correction. >> sales were high last year because the mortgage rates were low, full point lower than today. home prices are still high, although the gains are shrinking. >> while builders begin to cut prices they can'tut much especially because they are building in the move up market, not entrylevel. >> half of america can only afford a $230,000 mortgage. and the builders in good locations just can't get down to anywhere near that 11 of the top 18 or 19 builders the average sales price is above 400,000. >> fewer people may want to move up because of the higher rates. they have to give up the rock

ttom rate they have. for nightly business report, diana olick. as diana just mentioned. housing d sentimea turned weaker. other confidence surveys shows a dip. but that's one view of the economy. the other is derived from harder statistical reports yet to show substantial dlines. dominic chubb look at the differingens. >> they are working through a confidence crunch. markets have gone from accent the positive eliminate the negative mode to morehe accent negative and eliminate the positive mode. the erosion in confidence is arguably being driven by trends economic survey data that have been trending lower. surveymple, the cbc fed from today, nearly a quarter of respondents now expect a recession in the next 12 months. the chief executive grooves posted the sharpest month over month drop in outlook for business conditions this year. and hit the lowest level since

before the 2016 presidential election. a big question for investors and maybe those on main street as well is whenil w the actual hard albeit backward looking economic data by gross domestic product, non-farm payroll and consumer spending start to reflect theore coincident or sentiment looking indicators. those tide to the housing industry have been taking note. this housing start showing slow downs hinted a foronths at this point. for now, hard economic data points are supportinghehes that the american economy is doing better than its peershe around world. unemployment standing at multidecade lows. the econo is not booming but it's still growing. and many indicators for services and manufacturing activity still signaling expansion. now theeruestion is whe the hard economic data starts to catch up to the slowing confidence numbers or vice

versa. for nightly business report, dominic chu. the selloff in oil deepened today. pricg touching the lowest levels since august of last year on speculation that russia increasedtbook by a record amount this month. lsocerns over global growth raised doubts about future demand. today domestic crude settled 7% loweto $46 a barrel. prices have now fallen about 38% nce early october. t capitol hill where mitch mcconnell is predicting there will not be a partial government shutdown despite the back and forth between the two parties orday. funding the government expires friday.s ylan muy fomg the story. good to see you, ylan. where does it stand and are we closer to a deal. >> reporter: the odds of a government shutdown have decreased dramatically because as you mentioned the senate majority mitch mcconnell has said he is sure lawmakers will

bee to avert a shutdown. the current thinking is that they would pass a short-term ending deal likely to last through february. democrat haves said they would suppor d such al. the big question is, will president trump support it?d he se will see when asked about this today around the ite house. but certainly democrats and republicans now are in agreent what they want to see to move forward. president trump just needs to get >>onboard. we'll see indeed. let's turn to next year, 2019. the democrats will then control theso house. hat are the plans for challenging the republican tax law? >> well one of the big criticisms the democrats have of this law is that to it primarily helps large corporations at the expense of. worke so not only are they upset about the decline c in theporate tax rates and that not turning into higher wages for they're also unhappy with some of the provisions that lower the rate that companies pay on foreign earnings. they point to layoffs at places

like gm and at& as proof that the companies aren't sharing the gains of the tax bil with employees. you better believe that there is going to be plenty of hearingn about this the new year. >> i'm sure there will be. and the ever popular, not, caps on state and local tax deductions, vy unprerp popular in blue states. >> so one democratrom new jersey, is preparing legislation that he plans to introduce in e new year that would get rid of the cap. and basically this limit the deduction that households can take on state and local property income taxes to $10,000, that's hitting blou s tes like california, new york and new jersey really hard. a lot of democrats in those states ran on that over the cap. they won seats. spanned their majority in the use and now they're going to have to make good on promises once they takee control of house in congress. >> there also was a move by the

treasury to take away the ability to kind ofonate those property taxes to charities. is there ao movementu think in the new year on maybe moving that back? >> there had been a lot of consideration in some states about ways to work around this provision. i think that whatoure seeing on capitol hill is democrats focusing on getting rid of the cap altogether. the b challenge theyace is it's expensive. this is estimated to raise something like $830 billion over the next ten years. if democrats have been hitting republicans for the cost of the plan,dding another big tax cut is not going to help with our debt and deficit atsin. >> it all means you're going to be busy in the new year. >> absolutely. >> thanks so much. ylan muy in washington. it's time to look at some of the upgrades and downgrades. phillip morris downgraded to under perform from nurmt at credit suisse. the analyst saying earnings

growth will face the price target $74. it fell7@35 process 75.17. kansas city southerdowngraded at jp morgan. because of political uncertainty inexico. the pral operator gets half of its revenue from that country. the price farther is $118. shares fell fraction to $95.o 65. the same jp morgan analyst upgraded norfolk southern to overweight from neutral. seeing 60 oh million in potential gains. target is $20 shares up slightly to 148.36. still ahead, the sector that's outperforming the broader market for the first time since 2015.

fedex is cutting its earnings forecast f next year yieting weakness in europe and signs that global trade is softening. the they earned $3.04 a shares above expectations. revenue up from las year and slightly better nan estimates. but it was the outlook that ocinvestorsed on, sending the stock initially lower in after hours trading. eric chemi has more on the fedex quarter. >> the big take away from fedex today was the fact that the company lowered earningsce r.idor the rest of the 2019 fiscal y u.s. mpany said while the economy remains solid its b internationalusiness weakened during the ecquarter, esplly in europe. as a result the company are are will be cost cutting initiatives to mitigate the softness. so the ct cutting includes a buyout for employees.

cutting back on variable compensation and limiting certain staff hiring. fedex said it's in the midst of another record holiday season. for nightly business, i'm eric chemi. to china now where that alcountry's presidentd up the chinese economy. president xi pledged to continue the path ofnc reforms,ding boosting private companies and strengthening state owneden rprises. but he didn't offer specifics on how to tackle the weakeng growth, rising debt and the ongoing trade war with the u.s. he chinese telecrom giant huawei is facing challenges ound the globe. first the arrest of the company cfo in vancouver. and now key markets are either reviewing purchases of huawei equient or have ruled out using its 5 g network products. that has the company going on an all out pr blitz. eunice yun has more. >> the chinese tl come gea

maker is in a global campaign to convince the world in the 5 g technology can be trusted. today in southern china one of the senior executives held a rare pressoe briefing withl journalisting. the c rotating chairmallenged doubts led by the u.s. about the security of products. he said over thet p 30 years hundreds of telecom operators have used the product and there have been no major kriesh security z incidents and huawei equipment has been used in the u.s. so where is the evidence to say huawei is insecure? the company is now embroiled in the trade dispute between the u.s. and china after the cfo was detained in canada as washington's behtt. hu wouldomment on the cfo case but suggested the international pushbackst aga huawei gear is political. he pointed to strong sales as proof that customers are sticking by huawei. saying it wouldn't 25 commercial

5 g contracts and expect to rake in 100 billion this year. today they opened research labs to the media the first time showcasing the technology, some of which ty estimate could be 12 to 8 months ahead of rivals. despit the pr effort they face concerns. but the chinese could make demands that the company wouldn't be able tohu refuse. addressed that issue reiterating that no law installa doors and says in the past ved requests rec for information. in the future we will work in accordance with the law and deal with similar situations.us more fieltess report. now navi stchlt tar keeps on trucking that's where we begin. the wall street and revenue eshemates were topped in recent quarter. the company says increased demand pushees up s 40%. the stock popped 15%, to 27.57.

darden beat analyst earnings estimates by one penny. same store sales re 2%, above expectations. and the restaurant chain raised forecast for 2018. the shares rose 5% to 103 peart 85. rent a center a ended deal to be bought out by arieft equity firm after the deadline to close the deal was not extended. the ftc raised anti-trust concerns. shares of the small cap company dropped 9% to 13.03. and microen tech reported revenuer that was wea than analysts hoped. the chip maker says a supply glut pushed prices lower. and that sent the stock lower i initial after hours trading. the stock rose slightly in the regular session to 34.11. real estate investment truchlts. otherwise known as reits are beating the broader market for the first time since the benchmark index for the is

esector has ha total return of 2.6% kbird to the 3% decline for the snpd fiefd. but will the trend continue? with we are joiesd by j sullivan. the reit's analyst at btit. >> good to see you, sue. >> you picked three sectors for us to low back at and a number of of names. we broke it out into malls, amounts and hotels. 'tis the season for shopping. you like two names in the malls. >> we think the consumer is a in good shape. low unemployment. we have upward pressure on wages and relatively high consumer confidence. we're sing sales surprise to the upside in the holiday season so far. we think that position portfolios for mall reits very well for 2019. so simon, the largest reit with a $a a billion market cap, great

balance shee very very well positioned to outperform the next several quarters we believe. and maswich forecasted on the west coast stimarily. ng portfolio we like how they are posioned. they have underperformed year to date we think that makes the value proposion especially attractive. >> let's move to apartments. you know the recent housi data showed growth in apartment buildings but not single family homes. it seems to me as though the apartmen builders have pricing power. >> that's right. what has been bad for home build erps has been relatively good forpartment owners. lease turnover rates are a all-time lows. i-e-renters staying inonr. allowing apartment owners to raise rents on new leases at ae hiate than many expected they could. versus our expectations at the beginning of the year. >> um-hum. lookingut to 2019, even

though we saw a sizable increase in starts and permits to w date think demand is going to be more than healthy enough tobsorb the increase in supply that we're going to see. >> and -- >> and strong momentum in terms of top lynn growth. >> i want to get to your -- you have three picks. alvin bayet communities. cs property trust and camden property trust which is your favorite out of names. >> i would say at this point probably alvin bay. they have a portfolio pretty much concentrated on the west and east coast. they willef b from strong job growth in the major gateway centers. they are a successful developer. we like their ability to cree valu through development. >> let's move to hotels. and in the 30 seconds we have left. host hotels and pebble brook hotels. why. >> yes, host is the larger cap name, selling off with concern about growth in the economy next year we think it's attractively

priced well below the i -- 12-month high. and pebble brook is a smaller cap name. very well positioned to benefit, especially with a focus on the san francisco market. which should do very well as the musconi comes on stream in the coming quarters. >> thanks for the picks, james. see you again soon. >> james sullivan with btig. coming ntup, ky's big bet on a growth industry. >> here in kentucky they have t's hopes this plant but hemp, not cannabis. coming up i explain how tpresident trump can turs into a cash crop. i'm frank holland i'll have the story coming up on "nightly business report."

here a look at what's what for tomorrow. federalported the reserve will issue the decision on interest rates at the end of one of the msit controv hoegts in recent memory. existing home sales for november are due. and in repor follows a string of weaker reads on housing. and weekly mortgage applications tell us if the recent dip in ratesed to more buying or refinancing. that's what's to watchor on wednesday. the move towards gernd equality stalled according w to thld economic forum fewer women are joining the workforce and up and coming industries like artificial intelligence with dominated by men. women didnsake gn income over the past year, but sawes decln "access hollywood" to health care, education and involvement. spacex is reportedly raising $500 million in the latest fund ing round. according to the "wall street

journal" that puts the space venture valuation at more than $30 b. the company founded by elon musk will reportedly use the new cash for a satellite internet project. the surgeon general issued a rare advisory by e cigarettes, urging pushing for new taxes and indoor vaping bans to combat teen use which he calls an epidemic. >>e ow that nico teen exposure during adolescent can uniquely harm the young brain. impacting learning, memory pan attention. we know that exposure during this critical brain period can lead to further addictions. >> just yesterday a new report showed that more than 20% of high school seniors sayy t vaped a nicotine product in the past 30 days. about double the number from a year ago. cannabis company tilray inked a global supply and

distribution agreement with novartis. culling the tie-up the first deal of its kind with a big pharma mpany, sending shares of tilray higher 16%. one innovator of the cannabis plant is hemp. when the president signs the the farm bill hemp will be legal in the u.s. and kentucky could be center for in newng buddi industry. frank holland in lexington for . us toni >> reporter: these are hemp flowers, the m rawerial for cabbedle known as cbd touted as a treatment for a number of conditions. it's a budding business generated 590 million in u.s. sales this year and projected to blossom into a $22 billion industry by 2022. >> we aemeady know thed is there for the cbd. basically this market is exploding. and it will be -- it will be growing astronomically or

geometrically. >> bill hill yard is a ceo of a any banking hemp will replace tobago as the cash crop of kentucky. depending on president trump signing the farm ll, making it federally legal. >> the profit margins are on the average hemp crop f exceeds an excellent tobacco crop. >> growing hemp for brent and other farmers in the bluegrass state has been legal since 2013 under a state program.he is a plant similar to marijuana but doesn't get you high. >> hemp growers will tell you they can make the same amount of money with average hemp crop as they could make with a successful. tobacco cr >> they enough feed to make about $250 million worth od but the company is exploring other commercial uses for hemp. >> the floral material can be used por cbk and cannabinoids. the grain and seeds can be for superfoods, hig protein powders and hemp seed oil.

and the stalk can be used for building materials. >> the plant was a wide range of uses with many companies, put going into tsprod >> the fact we have a crop can can benefit people and a still make living from it it's really exciting. >> for nightly businessfrreport k holland in lexington, kentucky. >> and that will do it for nightly business report tonight. m sue herera. thanks for joining us. have a great evening. we'll see you tomorrow. >

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