>> announcer: this is "nightly business report" with sue herera and bill g great rate debate. the former f chair adds her two cents saying the next move by the central bank could be an interest rate cut. higher costs. they're starting to eat into profit margins andarnings estimates are dropping fast. clicking yes. all do it when we log onto websites, but what's in those privacypolicies, and what exactly are we agreeing to? those stories and more tonight on "nightl" forarwednesday, feb the 6th. good evening, everyone, and welcome. not that long ago investors were factoring in series of gradual interest rate increases. the economy was strong and the risks were low. but as you know things changed

and so did t debate around rates. strategists now say the number of hikes this bear will far fewer than once thought.n todayn exclusive interview with steve liesman, the former chair of the federal reserve said something else that got our >> would you say that it's possible the next move is a cut at the fed? >> of course it's possible. if global growth really weakens and that spills over to the united states while financial conditions tightenore and we o see a weakening in the u.s economy, it's certainly possible that the next move is a but both outcomes are possible. >> now, ms. yellen iso longer a policy maker and says the u.s. economy is currently strong, but she does understand, of course, how the economy works and how weakness overseas could potentially make its way to th while many economists do say the u.s. economy is solid,

cracks may be starting to form. in other umrds, ar of companies are reporting higher costs right now. while that may seem innocent enough, it could mean big problems for corporate america's bottom line.pi boni takes a look. >> rising costs are beginning to eat into profit margins, an now an unusual development is puzzling analysts. earnings estimates are down to a dismal 0.3% for the first quarter. revenues hav barely changed, 5.6%. why is this happening? there's likely higher costs and pricing pressure tha eroding profit margins. we've seen a lot of companies cite higher costs, including haviey on, caterpillar and ford. they also mentioned higher commodity costs. some mentioned tariffs and currency effects. profit margins have been high for years and higher renues have led to higher margins as

the economy got better. earnings growth is flat, even if you have a tax profit. so competition has led to lower prices and that's been a problem for semi conductor companies out there andaterials and energy names like freeport, exxonmobi and chevron. they have seen prices for their products down. it's no surise that analysts have notably cut earnings estimates in all of these sector in the last f weeks. that's leading to a steep drop estimates for th the first quarter. for "nightly business report," i'm bob si sapisani at the new stock exchange. art hogan joins us to talk more about the market, the fed and the ony. he is chief market strategist with national securities. good to see you, art, awa . >> great to see you. >> let's start with ms. yellen's comments. if indd the nextove by the fed was a cut, what might the market reaction be to that? >> well, i'm not going to say that steve is leading the witness, but if you ever ask if the next move is going to be a cut or a raise, she's always

going to say yes. ithink the point we are seeing a global economic slowdown. that's different than what we t experienced lyear. so in the second half of last year we started to see a llover in global activity. her point is if that slows down enough, then ito has seep into the u.s. economy and certainly a move by the fed to be even more accommodative than they are right now. so i think the fed thinks they're at neutral right no g i wouldss the next move the fed does is top the run off of the balance sheete they lower rates again. i certainly don't think that was a prediction by jat, it's much more of an is there a possibility and we're seelog slowerl activity. >> you do acknowledge the chinese economy is clearly slowing if that's happening, it's going to affect us and many other trading partners with thatun economy a the globe. and if that's what's going on and the fed is on hold, then logic would suggest that if thet are going make another move down the road, it won't be because the economy is getting too strong right? >> right, that makes sense, bill. but i would say let's loo at what's causing some of the

slowdown in china and what they'reoing about it. they have had a lot of stimulus over the last couple of months ak mg acknowledging the economy is slowing. certainly i would tell you that being in an elongated trade war with the united states is affecting how their economy is moving. so that's more of a self-inflicted wou that we can both sort of walk away from if we get to the ending of this truce that we have. >> on that note, art hogan with national secuanties. , art. >> you bet. and on wall street, the s&p 500 snapped its five-day win streak today after a string of mixed quarterly results and a disappointing economic report germany. just the latest sign that europe's biggest economy is struggling right now. the dow, it lost 21 points, not much, to 25,390. the nasdaq fell by 26, the s&p 6. down general motors was one of the companies today that reported edbetter-than-expe earnings. the automaker was helped by higher truck sales and tighter cost it follows the company's

controversial decision to layoff workers and close plants. but gm also noted weakness in china, the world's largest auto ma. >> i think if you look at china, obviously q4 was a volatile quarter. we saw pressures from a volume and pricing perspective. our outlook in the china auto industry is for a flat industry year over year. >> investors brushed off that flat outlook and sent the stock higher in today's session. meanwhile the u.s. trade deficit with china narrowed in november. the first decline that we havee seen aive straight months of increases. it was largely due to a slide i. impo by the way, we are just now learning about the november trade deficit because this was another report delayed by the partial government shutdown. but it did show progress in our trade relations with china. in fact just today, the treasury secretary described the current trade talks with china as being very producve. trade was just one of the economic issues that the

president addressed during last night's state of the union. he called for unity from congress aing lawmakers to legislate on nearly a dozen issues. kayla tausche is in washington >> for a divided congress, a wish list from the president. from urgent priorities -- >> congress has 10 days left to pass a bill that will fund our government, protect our homeland and secure our very dangerous southern border. >> to pipe dreams. >> both parties should be able to unite for a great rebuilding of america's crumbling infrasucture. >> t requests to lift a logjam. >> this new era of cooperation can start withly fin confirming the more than 300 highly qualified nominees who are still stuck in the senate. >> according to theartnership for public service, fewer than half the political appointmentss

at the departmf labor, justice and interior are filled. the president's cabinet has six acting officials, a record. the top senate democrat blames the commander in chief. >> he's failed to nominate anyone to a o fifth our government's top positions. this has nothing to do with the senate. >> with lawmakers still reeling from the shutdown, movement on other issues may have toome from the white house. the near ter to dos, cutting energy regulation through executive ruorder, cutting prices, and inking a trade deal with china. >> it will be don by executive agreement, so it will not be one of those things tt comes to congress. >> any potential desire to reach across the ais will likely be dampened by the forthcoming 2020 election. the democratic field has widened, as has its criticism of the president, who holds his own re-election rally in texas on monday. for "nightly business report," i'm kayla tausche, in washington. >> time to take a look at some of today's upgrades and

we begin with shares of paypal. they were downgraded to neutral from buy at guggenheim securities. the analyst cited increasing competition and its reduced role with its former parent, ebay. the firm actually removed its price target of$95 on stock and it fell slightly to $92.25. dow dupont's rating was cut to marked perform from outperform at cowen. they cited slowing economic growth in regions important to the chemical industry. the price target is now $59. that stock fell about 2% to $53.21. still ahead, why the once hot video game sector seems to be powering down.

the video game industry is a getting morend more competitive. take-two interactive which had one of the season's hottest games reported a riseuen rev from a year ago that said tha may not continue. the company a issued weak outlook with revue one-fifth below what analysts were expecting. part of the reason is the free online rival game, fortnite. >> fortnite was a huge hit last year. that's great. we admire the work done by others. we'd like to have all the , we don't always get all the hits. at the same time it was doing well, grand theft auto online had anotherecord year and redemption 2 had sold in 23

million units at the same time other titles are in theoi marketplace well. as long as we deliver quality, people show up. that'shat we've seen in this quarter and that's what we're projecting in the year. >> stake-two shaouched a 52-week low today and fell %.arly as we reported yesterday, electronic arts posted disappointing results a guidance. its stock fell better than 13%. video game stocks didn't just lag the market today, this group has been lagging for a while now. take a look at this. tham biggest have been down for about the last six months. activision, which reports next week, has been leading the way, down39 so what is troubling the industry right now? randolph ramsey is editor in chief of gamespot and he joins you know, this is an industry in transition right now. i know fortnite has been at the front of th. 's a free game played on multiple platforms and it updates itself all the time.th k the legacy video game makers are scrambling to try to play that game rightt now, are

they? >> yeah, that's true. it's no secret that fortnite has been the biggest thing to come out of games in a few years now. that game isng in a couple of hundred million players every single month, making millions of dollars every day. so there's a lot of conversation within the industry right now as to what exactly the impac of fortnite has on everything else. and i think certain ea pointed to fortnite as one of the things that actually contributed towards its lower forecast. but with ea in specific, i think some of those problems were also to do with some of the quality of gam that they had. i mean their big marquee title, i think, actually had less of a good audience reception than it actually expected. >> you know, with fortnite, the bar is raised for all the other players. full disclosure, my kids love that game, fortnite, but it makes it harder for the competition, does it not? these kids and adults who pla

fortnite, they want a higher quality of game. every ti how does the industry up its game and compete? >> well, i think one of the things that fortnite really solidified out there is the free-to-play model that it has. in a lot of ways free-to-plt has been pf the game industry for a while but fortnite is the one that p this business model front and center. so for a lot of the industry, they're ting to figure outow to come up with a model that can actually compete against somethingike fortnite, which is giving it away for free and charging players for ra micractions. you're seeing a lot of big ardustry players trying to embrace that simodel as well. >> streaming gaming is coming. s you hae companies that want to adopt the netflix model where you play a game b streaming it. is that where we're going here? >> i think so. i think that's one of the exciting things to look forward to this year. you've had players like google, players like microsoft and even ea state that 2019 is the year

that they're eitr going to be testing or putting out full products, which is going to be a netflix for games. so that upend the industry. in the past the industry has been basedn a $60 price point, here's your game, go away and play it. if we're going away to a $30 a hat doesl you can eat, it mean for the industry. so there's a lot of question marks around what's going to happenexhe in few months. >> very, very interesting. randolph ramsey thank you for joining us. luxury fashion is back in style. capri holdings, the parent company of michael korsnd versace said sales are going higher and raised its renue forecast. earnings topped expectations. the company hopes its rent purchase of versace will give it a bigger presence in the ro fastng asian markets. the shares spiked more than 11% to $48.47. drug maker eli lilly missed quarterly profit estimates but

revenue beat forecasts. they also cut its full-year forecast relating to theenng acquisition of laxo oncology. shares fell 1% to $119.27. humana toppedns expectat but the health insurer's full year profit outlook came in shy of estimates as its prescription drug plans remained under es re. humana tipped half a percent to $301.77. "the new york times" beat earnings expectations thanks to its digital business. online subscription revenue soared nearly 18% while digital sales rose more than 8%.y' the s ceo put thedi tal growth in perspective. >> at the very eak ofprint, early '90s, "the new york times" had about 1.7, 1.8 million subscribers. total subscribers today, we announced t end of lastyear,

4.3 million. so we have a much bigger paying base than "the new york times" has had in its history. >> sres of "the times" spiked 10% to 29.69 and also touched 52-week high during the session. ne spotify t a profit for the first time in it's ten-year history and it's now betng big podcasting. the music streaming company is acquiring gimlet media and it's part of spotify's plan to spend up to half a billion dollars on podcastcq asitions this year. the ceo today explained that strategy. ro it's really about expanding our mission just being about music to being about all b audio andng the world's leading audio platform. and what we're seeing really is we've done podcasts now for about two years and our users are looking for podcasts and are listening to the platform almost twice as ch.

>> the one blemish today was perify's average reven user and that fell an sent shares down 3% to $135.45. toyota reported slightly higheruarterly profit growing chinese demand helped sales in asia, which offset a decle here in northamerica, which is toyota's largest market. but the japanese automaker sharply reduced its full-year profit forecast due to investment losses. toyota shares fell 2% today to $121.05. and chipotle's latest resultsst easily beatates thanks to increased foot traffic and an increase in menu prices. the mexican food chain is also buying back additional $100 million worth of its own shares on tope of current $57 million share buyback. the news sents chipotle sha initially higher in after-hours trading tonight. they closect up a fn in the regular session today to $525.0 data privacy has become a hot topic, especially when it comes to social media companies

like facebook, which have been accused of misusing people's information. and just thisweek alphabet added a new line to its disclosure about how data privacy issues could harm its advertising business, which brings us to all of those privacy policies that we see when we log onto websites. usually we just click "yes." but what exactly are w agreeing to? andrea day takes a look. >> imagine your toothbrus spying on you, your coffee shop blabbing about what you search online, even m yourtress listening in while you're in bed. >> i think it falls into the category o creepy. >> your personal info could be scooped up by a company, even handed out to others, and you might not have a clue. >> consumers need to behave in a really paranoid way, where you assume that any company that can is probably going to collect information about you. >> ithll starts w this, a corporate privacy policy. you might not even rea them and just click accept when you download or sign up.

>>se aren't negotiated agreements. >> we satown with three pros to find out what's really going on behind the policies. privacy attorney michael kazden, brian vecci and alex urbelas. >> how long does it take for you to digest an average policy? >> hours, at least. hours. >> hoursnd hours to read, and he's an attorney. >> i don't know if it's actually possible f somebody without a law degree. they're by lawyers for lawyers to protect theco any. >> a company that's hungry for your private information. >> when you look at some of the data that these corporations are collecting, what do you think? >> why? we don't know what'sappening there. what we do know is that they find this very, very valuable. >> we asked all three pros what policies they think raise some flags. for urbelas, it's philip sauniccare's bluetooth toothbrush. it connects to an app to reveal

brhing habits. the data c welect may include your first name, birthday, age, country, language and password. and philips may also work with third parties who process your personal data for their o purposes. >> but it's up to you to find those oth privacy policies that relate to these third yrties and figure out what they're doing witr data. >> phillips tells us they take datarotection very seriously. the privacy notice is aimed att sparency on this point, as it describes in detail which data will be received by phillips, a phillips will only share their data with these independent third parties at the user's request. according to kazden, starbucks collects loads of info that has nothing to do with serving coffee. the wpolicy, the pages you view, including the date and time and the subject of the ads you click or scroll over.ka en says starbucks then allows third parties to access

that info. the policy, we have addedn certeatures to our websites and mobile applications that allow social networks such as facebook, twitte to tra the activities of their members. >> can you be 100% sure about everything that's been collected in most of these policies? >> not necessarily.s i think tha -- that that's not an accident. >> starbucks tells us t privacy of our customers is incred important to us, and we regularly evaluate all policies to make sure we're protecting tir best interests. we strive to be transparent. we do not sell information to advertising companies. you'll also note that the terms of our policy provide customers options for choosing to share information with us. vecci flags tol py for sleep number's mattress. last november it was found to haveermission to record audio while you sleep. the policy onc said we also may collect personal information, which mayudnclude in your room, to detect snoring and

similar sleep conditions. >> the shocking thing is how it was a buried in privacy policy, pot told right up front. >> according to slnumber, sleep numbers products do not record audio. this is an error and we have since corrected this.an so whatou do? the pros say read the policy before you click. >> it is important to read because it does tell youco what d be done with your data. >> and while it may seem crazy to read something the s pros even they struggle with and that can change on a whim, the hope is if enough people look, anything dubious wil come to light. for "nightly business report," i'm andrea day. coming , why real estate in the sunshine state is starting to really heat up. >>

natural disasters cost $91 billion last year. according to a government report, those losses stemmed from hurricanes, wildfires and winter storms. 80% of that figure was due to just three events. hurricane michael in orida, rricane florence in the carolinas and wildfires in the west, in. well, the numbeof people applying for mortgages fell 2.5% last week. the morage bankers association says volume was nearly 10% lower than it was a year ago at this time. but as we've been telling you, there are signs that the housing market is picking up. real estate agents in somear of the country have been reporting lately an increase in buyer activity as mortgage rates pull back. gr> on this p we often talk about long-term investing, but every once in a while we like to take a look at how some of those bets have paid off and how t ultra rich spend their

money. that's what we're going to do tonight with a lookt a record real estate deal in south florida. here's robert >> a waterfront home in miami just set a new price record, the latest sign that miami is edging out manhattan in the real estate wars. a two-acre estate on indian creek, an exclusive island in miami-dadecounty, just sold for $50 million. that makes it the most expensive single family home ever sold in miami. the names of the buyer a seller weren't released since both were done through llc and it was an all-cash deal. the same home sold in 2012 for $47 million. now it's22,000 square feet overlooking biscayne bay with 10 bedrooms, 14 bathrooms, a 3-d theater, a therapy spa and a 100-foot swimming pool. >> the high net worth individuals and their taste h gotten much more sophisticated. they're few and far in between

produc that caters t them. >> the new tax law which makes it less attractive to live in high-tax statese l new york and new jersey is driving more residents from the northeast to the manhattan market just had its wor year since the financial crisis, while sales and prices both rose in miami. new york governor andrew cuomo for tly blamed the tax law the state's $2.3 billion revenue shortfall as taxpayers pack up and leave. >> i would say since trump's tax reform, we've received a few phone calls where our client is calling us telling us to list their properties in new york and they're coming down to miami sometime in the near future and they want to buy something down there a looking to move their families down there. >> as more taxpayers start to write those checks for the 2018 tax year, the sunshine of miami is starting to e lookn more inviting. for "nightly business report," i'm robert frank at theew york . and to readbo more the record miami real estate deal, you can head to our website,

nbr.com. before we go, a final look at the day on wall street. kind of a quiet day after two pretty good rallies on monday and tuesday. today the dow lost just 21 points. the nasdaq fell by 26 the s&p 500 was down 6 points. t tomorrow e w brings. that will do it for "nightly business report" tonight. i'm sue herera. thanks for joining us. >> i'm going home to look for i microphones my mattress. >> in your mattress? >> i'm bill griffeth. have a great evening, we'll see you

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