>> announcer: this is nigly business report with sue herera and bill griffin. >> major averages have the worst year in a decade. >> ten days into the partial goveomment shutdown and furloughed workersre feeling anxious. hemophiliac treatment giving a grandfather hope not only for himself but his grandson.s nightly busin report for this monday, december 31st, the last day of 2018. >> unbelievable. good evening, everyone,nd

welcome. 2018 is in the books and for some investors i couldn't end soon enough. remember all those record closes? there were 14 of t in january alone, but that seems like ages ago. the lastall-time high came in september and soon after that, volatility picked up and so did the losses, bruising losses that dominated december. investors grew anxiohe about global economy, trade andhe unwinding of the fed's easiying money policies. the dow fell its first decline in three years,asq down more than 3%, snapping a six-year wid streak s&p 500 dropped 6%. >> sizeable chunk of the losses came just this month. in roct, youbly heard the dow and s&p posted their worst december since 1931. as for today, the major indexes all rose on the hope that the u.s. and china can make progr ts ondement the dow was up to

23,237. nasdaq added 50, s&p was up 21. some market watchers are concerned that 2019 may be in for a rough art, similar to the way 2018 ended. mike santoli starts us off tonight. >> en with aew year's eve rally, the most volatile december i more than a decade left investors with losses f y thr and confusion on global growth, trade elicy. don'tect the new year to bring much of a break from the gh-stakes market movin event. friday brings a crucial u.s. jobs report that will off hint about whether a feared u.s. slowdown is under way. jay powell will speak publicly with hisredecessors and any clues on his intention for further rate hikes in 2019 will be seized upon by investors. a fear that the fed has pushed rates up already too much given a softer global economy has been a major factor, tumble of s&p

500 fromts september high. focused on very strong trends as it pencils in perhaps two more lrcreases next year but the bond market hasdy priced out the likelihood of any further hikes. formal talks between the u.s. and china begin on potential trade further rounds by a march 1st deadline. fear of trade disruptions and chinese economic stumble have been another driver of recent market weakness. at one point last week nearly dropped the s&p m500 a 20% loss from its high. that's a loose definition of a bear market substantially cheaper than a year ago, assumg corporate earnings don't turn negative. earnings multiple is aut 14 times right now, down from above 18 times a year ago. busy calendar will help determine wheth this represents a great buying opportunity to pick up stocks at

their lowestaluation in three years or the market's way of bracing for a much tougher year for the economy and corporate results. for the nightly business report, i'm mike santoli. health care stocks turned out to be the only bright spot in the market in 2018. e sectoras the best performer in the market up 4%. energy wassthe w performing sector, down nearly 20%. which sector presents the better opportunity? oceothe wealth consulting group, jimmy, good to see you. >> happy new year, bill and sue. >> you're leaning toward t health sector, aren't you? >> we are. gravitated towar the sectors that perform better in the last business cycle. while i'm still a bull we think heal care h demand there and we looink like that sector and think it wil i continue 2019. >> you're also expecting volatility to continue. it has been a rough end of the

year. what other areas do you think will do well i2019? >> i think that a good way to play in 2019 again might beo invest in those sectors, such as health care and consumer staples but having satellite and opportunities for growth. i think we get bounceback. i would be worried of the high-flying names l andk for quality earnings and growth there and also biotec within that health care sector. >> what about energy? we mentioned the sector itself, the stock down 20% this year. don't you expect a bounce back of some kind? >> i think the fed will be more cautious with potential rate hikes. i think if we get a pause we'll get a blip in oil. cethere's too much ainty about a potential global slowdown. it will be tough for energy in

twoon. >> jimmy, you think the biggest challenge is how companies around t world will perform with liquidity being taken out by the feds. >> we've gone from a world where banks were infusing liquidity into the markets, the opposite now. these bear markets are the times ofre there's a l opportunity for investors and as a reporter announced earlier, ulations are much better now. i think you should be looking for those opportunities and think about allocating potentiallyore into the equities for your long-term plans. >> if you can't spend new year's eve in new york, you want to spend it in las vegas. that's where jimmy lee is. happy new year, jimm >> happy new year. some of the most recent volatility in the market may be due to, get this, pension funds. leslie pucker explains why. >> reporter: during what's normal sleep week on wall street, one behemoth is said to

have taken the markets by storm. that is the pension funds. they rebalance monthly and quarterly. today is a critical one for them to get their portfolios in order. pension funds pay particular attention to asseton alloca private equity and hedge funds. because domestic equity has declined so dramatically relative to bonds, pension funds exposure to eities slank as well. therefore, they needed to be big buyers befor the end of the year. wells fargo puts the target at $160 billion. that's how much they took out of bonds and put into equities. wells fargo called this rebalancing unprecedented and historic and says it may be responsible for the large swings we saw last week and potentially this week. i'm leslie picker. >> we mentioned earlier that oil stocks were the worst performers in the market this year.

that's because oil prices had their worst year since 2015, whics not something many had expe01ed. remember started with some forecasters calling f $100 crude. the economy did a sudden about-face in thetisumm, losing more of a third of its value in the fourth quarter alone as demand forecasts softened and geopoliticsal red the markets. they posted a decline of about 25%. >> global markets also had a tough time. london, germany and japan were all down double digits while china's shanghai slid about 24%, its worstearly performance since 2008. just today the world's second thatst economy reported the second largest manufacturer contracted for the first time more than two years this month. ongoing comes amid the trade dispute with the u.s. so-called fang stocks got a

lot of attention in 2018. not all of it positive. facebook, apple, google led the market early in the year but also led tow charge during the recent sell-off. according to theonst selling trader at the new york stock exchange, these stocks will have to do one thing if the market is to head higher in the new year. >> you need them to be unified and consistent. a couple will always look a little bit bette but if they start to fray around the edges, if facebook starts to get hit ouain and fall apart, then i think want to see if they can all demonstrate unified strength. >> that group of tech stocks isn't all that investors will need to watch in the new year. here's bob pisani. >> what happens to markets may

depend on your outlook for earnings. 2019 estimates are coming down slowly but fsurely,m 10% the start of this quarter to a little better than 7% in the s&p for 2019. that's the estimate. 17 comnies have reported earnings so far. the numbers have been good. first quarter estimatese generally hen coming down, particularly after comments. fortunately, the statef earnings may be in the hands of very large macro issues, notoriously difficult to model. traders are weighing several big issues. number one, can the fed avoid ai polish, slow environment with inflation. european bank is ending stimulus. what impact will that have on european products? and third, clear progress on trade anattacks? fourth independently of the trade talks, how much is china

oowing, with or without tariffs imposed them? how they impact earnings determines how they feel about th markets in 2019. for example, if you think earnings growth is going to b zero in 2019 -- not 7% but zero, markets will be dead money to a lot ofve ors. if you think earnings will be negative, even worse, many think the markets will have further to drop from here. if you thinkarngs will be in the mid single digits, would square the majority where strategists are right now, most he room to rally. i'm bob pisani at new york stock exchange. >> new developments on the partial government shutdown, but not aesot of pro to tell you about. house drt democrats have reportedly prepared two separate bills tond the standoff. one bill would fund the department of shomelandurity through february 8th.

the other would fund the agencies government affected by the shutdown through the rest of this fiscal inyear. fubill homeland security, by the way does not include the $5 billion that president trump wants for his border vll. e is scheduled for thursday. >> likely to face opposition from the president and as ylan mui ports, the longer the shutdown goes on, the harder it is for furloughed orrkers. >> rr: david ardello works for the food and drug administration and now o is of the 800,000 federal employees not getting paid. >> these h thingsappen so we try to prepare. >> cooking at homestead of ting out. deciding which cable and tv subscriptions to cut. he even considered returning some of presents

he bought for his family. >> somef them i felt were a little too costly for me to have ent the money knowing that this might happen. i dec hed toe for the best and, yes, i've been tempted to return them but now i don't have the heart to do it. >> thege b banks areep stping in to lend a hand, wells fargo reversing any overdraft fees for federal employees. and chase set up a dedicated hotline. some local credit unions are promising zero interest loans. thousands of its members have signed >> helping them through this time especially through the holidays and going into the new year. we wanted to give them that level of comfort. >> meanwhile a shutdown showdown shington, president trump still calling for a concrete wall over twitter, saying he will get it build and fast. and democratslanning a vote in

the house on thursday. ar bechlt llo has a message for lawmaks they prepare for a new session of congress. >> we didn't call out for this shutdown. we don't have a bone i this argument that they're having. we just want to do our jobs. >> arbello has been a government employee for 27 years and says he's not ready to give up just yet. ylan mui in washington. 2018 was anturning for the housing market and could be more twists and turns in the new year.

after seral years of frenzied home buying,rt higher ge rates took a toll on the housing industry. so what will thisean for buyers and sellers in 2019? we're joinedry by c young at trulia. welcome back. nice toave you here. happy new year. >> thanks for having me. >>ou say we're entering that transitional period in the market and it may favor buyers or sellers at some point b it is going to be a little more difficult to navigate? >> that's righ it's going to be a little bit of a mixed bag in 2019. sellers previously had seen selling as a no brainer a we saw prices track upwards. they haven't declined quite yet but we're starting to see a

slowdown. buyers are facing headwinds. affordability is a major problem for them. affordablity remains low. 2019 looks like an interesting year for home buyg and selling. >> inventory levels have been coming down a few years now. but more millennials will be wanting to get into the housing market. will that b enough demand to soak up that inventory or t? inventory isn't quite tracking up yet. we've seen it sortht of flat r now, or declining still in some markets. in those really expensive markets we're t starting see inventory bounce back and millennial drive that home ownership rate back up again since the recession. weo see millennials as they're aging into home ownership, a little laterhan people had expected. they're starting to enter the market and, like you said absorb some of that inventory that we're starting to see. >> they'rentering a market

where interest rates are headed higher. how much of an influence will that be? >> yeah. so, mortgage rates this past ye went upo a seven-year high. we saw just under 5%. we expect mortgage rates to stay up thert what t does is take a big bite out of affordability. it does make it much more difficult for people, especiall first-time home buyers. >> cheryl young of trulia, thanks so much for joining us today. >> thank you so much. >> ver iizon and disney reach a deal. w begin tonight's market focus. they'll be able to watch college football after all tomorrow on e disney's abc an after the two companies came to an agreement on programming fees, heading off a programming verizon was up more than 1.5%

today with disney advancing by 2%. amaz is reportedly planning to expand a number of its whole foods grocery stores. cording to the wall street journal, amazon is looking for new locations in moreur s and in areas where whole foods is already growing in popularity. amazon rose morehan 1.5% toda w >> tribune hit by a cyber attack over thtrweekend. the ion caused presenting and delivery disruptions for places like the chicago tribune and the baltimore sun. tribune found a workaround, but it's still purging its system of that virus. the sck rose to 11.34. if investigators find various deadl california wildfires over the past two years were caused by the reckless operati of power equipment, they could face murder arges.

if criminal charges are filed, they would be lged by the county district attorneys, not the state. it fell to 23.75. sports betting took a major eague forward last may following that supreme court ruling to open the door for ates to legalize it. it had huge implications for not only casinos but draft kings and fan duel. no with the college bowl games, super bowl, march madness all coming sup,rts betting is expected to grow even more. here with us now for a look at what's ahead for 2019. eights sta have legalized gambling at this point. >> tha more states definitely will legalize, one by one. you could see about five to ten states, another eight next year. we know h dysfunctional d.c.

is. now think how every single state. >> the number seems really big. take, for example, new jersey. so far $1 billion has been bet in sports betting alone. the revenues to the sports books boenl only about $70 a $1 billion bet will become $80 million in taxes. >> pennsylvania has done this licensing fee. is that a w around that? >> they're crging $10 million for anyone that wants to do sports betting. now you're making 10, 20, $30 million before anyone even places a bet. >> what about on the federal level, are we going to be looking at regulation? >> they're tryo

regulation on the federal level. it's not aop ten priority for them. sports betting is way down on their list. >> what does it do in sports books, does it cannibalize it or not? >> they're doing deals across the country so they can be involved in these local markets, through an online, physical casino. >> eric, thanks for staying late tonight. see you later. >> appreci it. coming up, modern medicine and a grandfather's hope for a cure.

ecompanies home more than half a milli incash. u.s. firms held about 3 trillion in jurisdictions thatro range ireland to switzerland but recent data shows the pace of dollar repatriatatioion is now slowing. >> this year the industry witnessed a number of medical breakthroughs, including treatments for hemophilia, the inherited bleeding disorder. our latest installment of

"modernmedicine." >> living his whole life with bleedinga, inherited disorder that causes severe joint damage. >> my left knee wouldn't hold my weight anymore. i've had b that andh hips replaced. >> early treatment with bloodwe left him with hiv. >> finding a vein d andng this as part of your routine a couple of times a week. >> something potentially life changing, clinical trial for gene therapy for hemophiliac, a e to makcopy of the g up for the one that causes the gene disorder. fix the problem with just one treatment. gene therapies are in spark therapists and drug giant

pfizer. niversity of e michigan and says his goal is to help more than just himself. >> this is andrew michael. he is 2 monthraold. >> hisson also has hemophilia. his daughter w pregnant when he joined the trial. you may be the cure for your grandson. that's pretty cool >> addy says the level of his clotting factor rose0 to 1 to 12% from close to zero. a few wees ago it was up to 50%. >>s gn up to 147 at one point. >> he no longer has to have we're just tinkled pink. so happy and so happy for hime thatoesn't have to take shots anymore. >> gene therapies could mark a transformation in how to treat the disease. >> the hope is with gene therapy

that we can geteople to that place where mophilai is not something they wake up in the mohiing and tnk about first thing. >> how long will the treatment last and how much will it cost? >> gene therapy is a one-time treatment. it's a different paradigm than typically seen in the pharmaceutical industry today. to ypical therapy can range more than $1 million per patient per year. >> trying toigure out how to capture that value, prices we typically hearn the order of about $1 million for a patient. >> $1 million drug might raise eyebrows and political backlash but to james addy, it's reasonable. >>s an insurance company, i would think it would be a good deal for them. >> and if it results in a better leaf fds his gr, it's hard to put a price on that. i'm meg tirrell. >> another look at the final day for 2018. the dow was up 265 points, the

nasdaq added 50 and&p the 500 was up 21. but for the year, thedaverages tun their worst annual decade. quite a year. that will do it for us on report. business i'm sue herera. thank you so much for watching. happy new >> i'm bill griffin, we do look forward to seeing you in 2019. we leave you with a look at the new year's celrations aroun the globe the past 24 hours. happy new year, everybody.

>> this is "bbc world news america." funding of this presentation is made possible by the freeman foundation,er and kooundation, pursuing solutions for america's neglected needs.wo and now, "bbc d news." ."rin: this is "bbc world news i am karin giannone. our top stories -- the u.n. the says food aid in yemen on which millions of ople depend has been stolen.