thi is "nightly business report" with sue hererand bill griffeth. good evening, everyone and welcome to thispecial edition of "nightly business report." i'm sue herera. bill griffeth is off. tonight we are going to take a look at the year that was, from the stock market to the economy to policy out of washington. it was a 12-month stretch filled with events that few could have predicted. and the ship be rockin'. 30,400 point market moves roe ey raisers now not much. markets jumped tax cuts in hand in my in aft nasty brew of

global tensionsed to steep drops in february. him immunity not in high fliers like boeing. not health care not in tech. market darling apple might see a loss for the year. peen as markets climbed in january, so do tensions with north korea. claiming its missiles can reach the united states mainland. storic face-to-face talksith south korea and the united states followed calming nerves for a bit. but f how long as north koreas complainbout a constant irritant, economic sanctions. to maintain sanctis, the u.s. leans on china. even as their duel over tariffs pinched over time auto makers and parts suppliers. farmers selling pork and soybean. steel and aluminum production even tech where tafrps now top $1.0 billion a months. and constant threats of more and higher tariffs rattle investors. for now there is a mch 1st deadline to reach a trade

agreement. closer to home, a reworked nafta brought agreeme with canada and mexico. but look around deb issues hang over italy's new government. brexit is messier than ever in the uks urk opinion u.s. relationship with saudi arabia murklowing the death of jamaal khashoggi. oil prices hit a low this week. the stock market path is bumpy. up in november. down in december. an tech investors appear government regulations to apiece concerns about data safety that might crimp growth. in year's earnings are stellar up more than 20%. t but wast a one-time high induced by tax cut next year's forecasts are up but by less than 0% and the list goes on. will a democratic maj in the house change or hinder the president peace agenda? if growth is slowing, will the

fed eas off on interest rate hikes? housing sales and construction e slowing down. while mortgage rates topping 5% for a while are up.pl emment, still strong. and consumers are spending. just ask macy's mcdonald's and the auto makers. but? economy in 2018 as good asge it in some say 2018 was a turning point for the marke volatility gripped wall street early in the year and it made triumphant return in the final few weeks. bob pisani looks at the market highs andows. >> a roller coaster year with wi several 10%ngs in the market. theix most important stories of 2018. number 6, the tax cutshe in market ballot are wooft earnings 2002 grew half due to tax cuts the best growth since 2010 the rkets sniffed out global slowing laid in the year. stocks come down 10% in the fourth quarter. number five, the return ofash.

suddenly you could get a 2% on a bank krert of deposit for the first time since 2008 cash and short-term treasuries tperformed a 6040 stock bond pofrlt bofrld. kwash is up 2%. thehe stock pofrlt down 2%. bitcoin popped out near d 20,00 ember of last year and it's closing out the year near 3,400. what did it combination of endless reports of the thefts and break inombined with the s.e.c. that refused to approve the bitcoin. etf. number tree the interest rate spike that never happened. short-term interest rates rose most of the year but longer term not. did 10-year treasury yields about where they were in february. those betting rates would rise were surprised when inflation remain subdued and concerns about the slowing economy kept plongtes down. number two china trade and tariffs. everyone agrees the u.s. shoula

up to china on intellectual property theftsut the market does not like tariffs as a way to force change in behavior from china. and the number one story nigh opinion the return of volatility. in 2017, the s&p closed up or down 1% or more only 8 times. in 2018, the s&p closed down or up 1% on 57 occasions. 26 of those were down. 31 were up. wow! . fo "nightly business report" bob pisani at the new york stock exchange. the federal reserve and interest rate raising campaign was the focus f investors for much of the year. and it caused a lot of anxiety. steve liesman has beenovering the central bank and the economy and joins us tonight from washington. great to see you,eve. >> good to be here, sue. >> anxiety i think is one word for it but also volatility is another word, not only in the stock market but in the bond market. coect? >> that' right. and i had hair when they had

those 18 up or down 1% moves and i lost it with the 57. you h days you would go in and it would be up 300 points and end down 400. there was not only day to day but intraday volatility. as the market swung wildly one of the big stories this year, sue, are the two halves of it. i can't remember a year where we had such buoyant growth u above 3%. her we hit the history ib 3.7% low unemployment rate lowest since 1969 doing 200,000 jobs a month regularly which is ntastic because remember we were only supposed to add 100,000 by population growth. really strong. i can't remember a year where there was such good economic numbers that created an and ended the year with incredible pessimism about the next one. >> and language mattered muchs more tear than it has in the past. it seems as though investors were parsing the fed statements much mor they used to.

>> i think that's right. t and i thiy're especiallily, sue, parsing the words of the new fedir cn. it's well to remember jay powell mo has bee a governor for a lot of years only took over at the chairmanmanship in 2018 in october he stumbled and made a mistake i think. he said we areay long from neutral. this was jay powell trying to talk to the lay audience, not financial markets. and markets pretty much freaked out about that when he said a long way from neutral. he had to come back a month later with his vice chairman as well and say no, ono, we are just below the broad range of neutral rates. and that kind of calmed the markets down. llt as happened last week the idea the fed s wants to raise rates is still a matter of abiding concern and a source of volatility for the market. >> we will see what the new year gs. thanks, steve as walls. >> thanks. >> steve liesman in washington. trade and tariffs once viewed at dry topics for e investors bec a focal point

that triggered waves ofty volatind this was the year that brought trade wars. and they became a reality. ylan mui has. mo >> reporter: the white house celebrating several new deals. among the trade winds, the u.s. began negotiations with japan and european union. there is a new free tradere ent with south korea and a ew deal pending with ktd and mexico. >> it's my honor to announce that we have successfullyd compleegotiations on a brand-new deal to terminate and replace nafta. >> that agreement is designed to encourage car companies to pay their workers more and make more of their vehicles in north arerica. u.s.rs get more access to canada's dairy market and pharmaceutical companies get more protections for oertain kind new drugs. still, the deal needs to be approved by prcongress. ident trump is threatening to cancel nafta if they don't act fast. bupemocrats are conceptually cal.

>> whatsn't in it yet is enough enforcement repay insurances regarng workers. there has not been a law passed in mexico in terms of wages and workonditions in mexico. >> meanwhile, wall street is focused on trade warps. tariffs on fore an steel aluminum, also onn $250 bill worth of chinese products. about half of what we import from them. at the g20 summit in gentina, president trump and chinese preseeent xi jinping a to work on issues like sbelgle property theft and he want forced technology transfers. they called a truce on tariffs during the talks and white house trade adviser peter navarro urge investors to be patient. >> we have negotiations with the chinesehat there isuch talk about. what i would urge people to do on wamz is rher than follow in day to day and get all excited and go up and down on rumors is to let the process take its course. >> the deadline for reachg a deal is march 1st and investors

hope for a gleerps resolution fop forbu "nightlness report," ylan mui washington. phil voncatto joins us to talk about the moments defining the market. he is a ceo of laden. >> the market was disappointing for youway because you had high expectations going. >> yes. >> because rightfully so economy was firing on all sild erms what happened. >> the sentiment changed. in yourarlier statement you said the component changes, chairman powe 's point about a long way from neutral. and you look at the underlying economy. itas still very strong. but for the first time we saw small little crack that is got everyone real nervous. in my opinion t economy is still robust. the chairman said it. you look at underl unemployment market it's really strong. he is not saying that ner backing off any time soon. i support what heai but in 2018 what happened was the sentiment change.

no one wanted to be the last one in the party when the cops showed up. they wanted to be out sooner. >> also we hadn't seen t volatility liks in a long time. do you anticipate that continuing in the or does the market turn a new leaf? >> it's funny i still in the camp i think when sentiment drives the volatility. volatility has gone back to average. this is normal to see the vix likes this. >> absolutely. >> we got lulled into the frp lasting upward grinding market. this is kd of normal to me. a lot of this is going back to averages. so for meti i see january as an opportunity. i'm still a buyer of stocks. itill think equities now actually cheaper than they've been in a long time. when the underpinnings of the economy specifically the consumer are this strong you got to be a buye i think the volatility comes out a bit not a lot. we werte staying ele for a while because the sentiment doesn't change that much but the january opportunity when the data comes out about earninghi and gdp i is a chance to make the money back. >> what sectors dunk will

-nefit, given the let's say the environment stays the same and itid in 2018. we do have valuations at much morp quote unquote normal levels. what areas do you think might outperform. >> consider we are moving to a later stage -- only because inflays and interest rates go higher. usually utilities are a place to hide out haste a safe haven to be there. i think financials and rechnology offer opportunity. why financials hammered. in a rising rate environment they do wer. la in the year financials are there. tech has sold off aec bet and because of the demographic make up it's hat hard not to be in the space. >> happy holidays thanks phil. >> thank you. >> and perhaps one of the biggest changes this year, came in november with the midterm elections. eamon javers is at the white house tonight for us good to see you as always eamon. >> hi, sioux >> merry christmas to you as well. lots of changes came with the

esults of the mid-terms election some of it has to do with the tax laws. some of it has to with thes basically health care because we are going to have a change in the house. >> yeah, absolutely. the president leading up to november was predicting there would be a red wave despite pundits suggesting a blue wave. in the d end wen't get a wave in either direction. but democrats made significant pickups in the house of representatives and able to snatch control of the house of representatives away from th means that nancy peesi will be speaker of the house we expect next year and we expect paul ryan is retiring and going home. that's a big change. and it's going to affect tres trumpdency the last two years. it's going to put democrats in charge of committee on capitol hill that have subpoena power, meaning they can fire upin stigations into all sorts of aspects of the way that the president has been conducting business here at the 1,600 pennsylvatia avenue. going to make things very, very difficult for the resident in terms of th investigations let alone

probably a near total impossibility of passing any legislation out of the house of represent testifies that the to president wantsee, sue zroo you know one of the things that the democrats have said that they wan to do when they take over the house is take a look at some of the caps that were put on state and local deductions. what do you think the odds are that they might be successful with that. >> i think they might look at that. whetherquestion is there is republican interest in going along with that. and where the president ul mately comesdown. you know, the president was talking before the election about in idea of p 10% tax cut that he and republicans were going to pursue after theelection. that sounds like it's not going to happen. instead, i think you're going to see treasury and other officia here sort of on the defensive. one of the things i think yxp cant democrats are going after right away is the president's tax returns. ai think the white house the administration will defend that and try not to release those but ultimately they may bed foro do that. and that kind of a tense atmosphere is going to make itv

difficult for run of the mill legislation. >> eamon javers at the white hoe. mon thank you so much. >> you bet. and still ahead, the year the housing market went from hot to cool. the holiday season is traditionally the slowest time of year for the housing market. but as diana olick tells us, the owdown this year was particularly sharp. >> at a sunday s openhouse in angeles. >> i like this. >> the few buyers who came out were hoping for a holiday gift. >> i read an article online right arounhristmas. it's a good time to buy a home. there is less homes on the

market. and less people looking for homes. >> but john still can't find anyt.ng affordab >> we are just trying to find something newer, biggbe, er, without remodelling our home. and it looks like we might jus end up remodeling our home. >> that's the taleac unfolding ss the nation. housing was superhot at the start of the year with bidding wars the nm but price overheated and mortgage rates jumped adding insult to injury.t housing w from hot to not. >> clearly ts exub r that made them pay really unrealistic prices at the e of last year ant first part of in year seems to be gone. >> the average rate on the 30-year fixed started to rise in january but then leveled off for much of the summer only to jump againn september and then cross the 5% mark in novembe home prices have slowly responded still higher than a year ago but the gns are shrinking. in california more sellers are

cutting prices as inventory rises. >> it seems the price on this euse to -- i'm not an expert but it does seem low. >> unfortunately homer bui are not stepping up as much as hoped. housing starts are now at lowest level in year. and builders continue to put up mo eensive homes while so much of the demand is at the entry level. >> they just c t't get down the lowest price points. and part of it is intentional on thei part is they don't want to go to the most outlying areas where they can get to the price points because that's just a risk place to be the next time there is a recession. >> and for existing home sellers they now have to realize the sky is no longer the limit. >> in a normal market ies t several weeks or even a month or two to sell your home. in aormal market you get one or two offers not 10 or 20. and in a normal marke d you't sell your home for one, two or $300,000 over list price. >> in other words house something in a new normal. more fielt business report," diana olick in washington.

the health care sector saw changes in 2018 from mergers fromreatments t policy. we're joined now by dr. aamodt full the vice president much strategy and insights at doximity. nice to have you here doctor, welcome. >> thank you for having me. ou>> say one of the number one defining moments in health care was the awarding of the nobel price and immunity. >> it's been many yeerps in the making but the new treatment modelty has the capability of transforming how we treat many deadliest disease sees that currently afflict our society. i believe we are at the tip of the iceberg in termination of what may come out of whais now recognized as a nobel prize winning research. >>oes it also greenlight the companies that maybe wanted to goarnto thatcular area and they now see it perhaps as more lucrative or more peful? >> absolutely.

i think we are right at the beginning, frankly to see how this plays itself out in the pharmaceutical industry. and the life sciences h industr wie a lot of movement in this space moving forward. and as in kind of therapy modelty begins to be proven out over time i imagine that that activity wil just increase. >> i also was fascinated and i think you mentioned this as well, big tech m reallye some inroads in various different ways into the heah care sector. >> yes, definitely. if you look at apple, google and amazon as some of the main o representative big tech, apple had an fda approval for a devi that can monitor heart rate and be utilized in health care and pretty close to realtime. google of course will touch on has made some interesting moves wiards to artificial intelligence and scan retinas. pi amazon made interesting acquisitions wit pack t the way amazon prime change the way a lot of us interact

with shipping and products sent to us in the near future leveraging laazon'sorm and delivery network we might have a different relationship with prescription medinktion. >> i there is a lot of changes. thirdly, you list artificial intelligence asne major factor. google comes to mind with a retirenle scan. >> if you think about the y immunothern the treatment end, artificial intelligence peck specificay the work google does with rest retiren ol scans will make some ec preventative um. >> they can augment or empower deceasings toiagnoseeceases. and fairly accurately predict cad cardiovascur disease risk. improvements this technology will make a profoundmpact in preventative medicine. >> and we are watching ber shire hathway, jp morgan and amazon getting to. who knows wt that bring.

do doctor thank you so much. >> thank you for having sme. >> canial media be trustwood your data? that question came up time andi time ahis year as the social media industry came under fire from congress and regulators pretty much around the world. julia boorstin has the details. >> reporter: concerns about the dangerous of social media platforms spl exploded inlaarch with reons that cambridge analytica accessed the the private information of facebook users, ultimately attacking 87 million userer. sheryl sandbergti adm to the mistakes in an interview on cnbc. >> we have the responsibilityilo great products. we have the responsibility to treat people's data carefully. t have responsibility to disclose to people when problems occurred. >> sandberg's apology didn't tave off congressional scrutiny. facebook ceo mark zuckerberg wat called toestify on capitol hill in aprilid where he regulation is inevitable. >> i'm not the type of person mo thinks that all regulation i bad. so i think the internet is

becoming increasingly important in people's lives. and i think we need to have a full conversation about what is ight regulation not whether it should be or shouldn't be. >> facebook came under attack for both privacy scandals and revelations of inauthentic manipulative behavior on its plafrm, pulling downf hundreds o pages tied to russia and iran zroo in feb o.c. facebook and jack doors were called to testify before congress. amid growing talk of regulation to protect user data, prevent manipulation and monias on the plarmt. >> the era of the wild west in social media is coming to an end. where we go from here though is an open question. >> sandberg and dorsey focus d on facebook a and twitter's investment in technology and employees to improve platforms. we have been investing in artificial intelligence and machine learning models to again recognize the patterns of behavior, because we believe greatest ere the

leverage will come from. >> but congress heade into the holidays with more concerns. after a slow drip of negative ut headlines abo facebook's mismanagement two reports for the senate intelligence committeeast week show russian attempts to sow sconsidered on social media both before and after the 2016 absenting sayinoo twitter, fac and google did the bare minimum to cooperate with the senate intelligence committee investigation. for nightly business report, julia boorstin in los angles. >> com up, the correspondent story that kept investors guessing for most of the year. ne of th biggest corporate stories focused on amazon and where i set u the second

headquarters. more than 200 cities bid for the project whi promised jobs and capital investment. amazon madhe cuts to list all year. and then in november the winner and ine this c winners. were announced. scott cohen filed this story. >> reporter: the competitionas intense. >> all hands on deck. >> sometimes a little weird. >> we might have to start with going to the state to see if we can get the legislature to change the name to feenz iks amazona. >> entering the bid for 50,000 jobs and $5 billion in investment. the result a tie. >> this was a fierce mp ition. i think it's exciting for amazon. i know it's exciting for the state of new york. >> cntainly consolidates queens as the great economic capital consolidates new york city as a great international tech hub. >> new york's long island city enabled gets half the prize, a nod to a strong tech workforce. the other half to northern

virginia, a strong workforce as well and a strategic location wedged between reagan national airport and the pentagon. >> it is a performance-basedac incentivege we put on the table. the return on our investment will be very good. >> and a consolation prize to nashville, tennessee for strong economy. it will get 5,000 employee operations center. >> this is the largest jobs announcement in thery of the state ofennessee. and 5,000 jobs that will average i think i'm se to sa 150,000 in salary. said it now they can't take it back. >> amazon gave no official explanation for the split desion but in the end no one city in north america could provide everything the company wanted. most important,il 50,000 d workers in one place. the move also allows the company which made 1 billion in revenue last year to make the most of government subsidies. 1.5 billion from new york state. 600 million from virginia.

and more than 100 million from tennessee. >> we're seeing more than $2 billion in subsidies offered by virginia and new york. for an expansion the company had to make. >> all the locations will have work to do to make way for amazon like infrastructure improvements. meanwhile, for the 2 city nas didn't make the grade, like boston, chicago, pdras,nty of questions about what they did wrong, how they can do and why they got into this battle in the first place. for nightly business port, i'm scott cohen. thanks for joining us for in special edition of "nightly business report." merry christmas. we'll see you .

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