>> announcer: this is "nightly business report" with bil i would say that it's more likely that a deal will happen. >> trade thought. optimism abounds that the u.s. and china willeach a deal and the market responds. who pays more, calls to tax roe rich areng, but do the numbers match the rhetoric? v aue hunting. this week's market monitor says there are bargains to be found, and he h names he thinks belong inourportfolio. all that and much more tonight on "nightly business repdat" for this f february 22. we do bid you a good evening, everybody, and welcome. tonight.the night off optimism was all the rage today in washington, as the u.s. and

china agreed to extend their trade talks for a few days, s fuelingtiment that a deal might be hammered out before next week's tariff deadline. president trump also confirmed that he will meet with his chinese counterpart next month. stocks responded to that news and we'll have more on that in a moment. but first, kayla tausche has more on the >> reporter: after two days of cabinet-level negotiations and just one week before a critical trade hdeadline, bresident trump and the chinese vice premier say a deal is likely than not. >> i would say that it's more likely that a deal will happen. the fact that they're saying, andhis is a very high delegation. this is a man who is revered all throughout china, as the vice premie so the facthat they're willing to stay for quite a bit longer period, douing up thetime, that means something. i think there's a good chance that it happens. >> reporter: despite that optimism, the deal is not done yet. the chinese delegation will be staying in washington for two

more erdays, a which point the president's advisers will recommend whether to extend that march 1stdeadline. the president says there will be at least one more round of talks and then awe summit b him and the chinese president at which the biggest decisions will be made. so far the.s. team says there has been progress made on currency and on the issue of chinese companiestealing the technology of their u.s. counterparts. president trump even said he'd be willing t consider dropping criminal charges against chinese th telecom huawei i coming weeks. all of this movement coming nearly one year as this trade spat has escalated, but potentially the end is in sight. for "nightly business report," i'm kayla tausche in washington. >> coming up, we wil look at how tariffs are impacting the home billion dollar improvement sector. first, a look at today's market rally fueled by this trade optimism. the dow rose 181 points to close back above 26,000 for the first time since early vember. the nasdaq was up 67, the s&p

500 added 17 of the and for the week, thee indexes w all up less than 1%. but for the dow, this was its ninth straight week of itins. longest win streak, by the way, since may of 1995. one concern still hanging over the market, though, corporate earnings, which are expect to slo this year. and if they slow too much, there's even fear of an earnings recession. but does that necessarily mean the market will go lower? bopisani takes a look. >> does an earnings recession mean the stock market will drop 2019? no, it doesn't. we're still in the longest bull market on record, yet the entire trading community seems convinced the bull is about to rollover. last year's 6% decline in the s&p 500 is being hailed as prooe thatarket sniffed out an earnings recession. that's where earnings drop at least twoua consecutiveers in a row. this news is being greeted u wi thal round of hand wringing from the analysts and strategists, many of whom are

predicting little, if any upward movement in stocks this year. the truth i this, historically there is very little evidence that a decline in stocks always indicate an earnings recession, nor is the opposite there is little evidence that an earnings recession invariably leads to a decline in stocks. so what does matter? the two developments that historically have killed bull markets, first is a sharp anddd price hike by the fed. the second is the recession. the fed for the moment seems out of the r wholee hike game, so that's not a major factor. this leaves a recession, the classicf killer bull markets. that's where the fault lines lie. if you believe a recession later this year or in 2020 is imminent and unavoidable, then earnings growth will likely indeed cline, possibly by double digits with similar declines in stock prices. but if a recession is avoid bl a, it's quite likely thet f earnings environment will not really amount to much in the long term.

for "nightly business report," i'm bob pisani at the there was a lot of k fed-related t today. first in the fed's semiannual report to congress, tentral bank said that the u.s. economy maintained solid growth through the end of last year, likely expanding just under 3% for all of 2018. the fed also said the consumer and business confidence remains farable, but some measures have softened since the fall, mainly global economi conditions. in fact chairman jay powell will olaborate on all of this when he testifies on capill coming up on tuesday and wednesday. in the meantime, fed vic chair richard clarida said the central bank will keep an open mind as it begins a broadw rev of the monetary policy framework. the fed will look at whether it needs to let inflation run t highn its 2% target if it oeels that prices have grown too slowly, and a whether the fed should expand its tool kit to fendff future downturns.

and finally, fed officials say they will look at possibly tweaking their communications strategies. he aedo said the will make the results of this review public in the first half of next year. let's turn now to matt maele to talk about all of this. he's equity strategy at miller taeback. welcome back, matt. hill, how? >> i'm fine. aire we are the ninth straight week of for the dow. it doesn't feel like the market is concerned about an earnings t recession orde and tariff issues or about the fed. what do you think? >> well, i am a little worried about thearnings recession because one of the things we have with the feds that, first, back in 2015 we had the last earnings recession. the fed was easing through qe programs. this time the fed is not easing. in fact they're still involved in qt and just the in other words, they're still

shrinking their balance sheet. so even though they have changed their topeka quine quite a bit they'r no longer raising interest rates, they're still tightening slightly here. if earnings d continue to move lower as we move through the year, it will be a concern for me. again, i'm not turning wildly bearish here, i'm just saying after a huge move that we've i had. an nine weeks in a row is good, but usually after nine weeks in a row of a rally, it tl falls off a lbit. >> and the economy itself, you know, we're subject to what's going on globally. we've talked about this in the past here. if we're seeing a global slowdown, inevitably it eventually ends up here because of trade concerns and things.ut what a that and its impact on the stock market? thing., that's the same we have a combination of slowing global growth. even though the u.s. economy is doing better than the rest of the world or mostre of th of the world, it's st slowing as well. if you get a combination of slower earnings growth and slower economic growth, it's just hard for the market to rally a lot more,afspecially

r its rallied 18% off its lows. >> and after the fed minutes the other day, there were felt like maybe the fed is going to have to raise rates by the end of this year. i'm curio what your thoughts are on that. >> for that to happen we definitely need to see things pick up quite a bit more and turn aroun and move higher. that's not out of the question if this trade deal is a substantive one. i'm not sure we'll get that but if we had a substantive one that eases business leaders to give them more confidence to spend more money, that could certainly be something that changes the fed's thinking. >> so what does your ptfolio in stocks look like now? are you more defensive? are you going for argrowth? you looking at value? what are you doing right now, matt? >> definitely little bit more on the defensive side. mostly for the reasons i've just cited. but again, i don't want to overstate it. the one thing that's very positive, a lot of people talked about the negative thing about how faang stocks have rolled over, but actually the rest of

the group has picked up the pace. we've seen actually the broad tech gro is doing better rather than jt a few sk concentrated names. there's an area you can pick your spots and find good lue. >> all right, matt, always good to see you. have a good weekend, thanks. >> you too, bill. thank you. now back to trade. with that march 1st tariff deadline still looming, the homt improvemector is getting ready for its spring season. as courtney reagan tellsw, us tariffs have become part of their conversation for this hot area of co >> reporter: at trade talks continue between the u.s.nd china, the trade show must go on. true value holding itsan al hardware home and garden buyer trade show in dallas, as more than 400 vendors, who import goods from china, could see tariffs increase from 10% to25% as early as next friday. and that's on topstf l,

aluminum and other tariffs instituted last year. >> as business people, weet that something needs to be done to level the playing field. none of us like pce increases. the end consumer doesn't want to pay more. our store owners don't want to pay more and then hhae toe their customers more. >> reporter: a spend $10 billron on home iment products that are now subject to tariffs. items like hammer vinyl flooring and cabinets. a tariff of 25% could add$2.5 billion to the total price consumers pay. prstoleum is the world's biggest manufacturer of say paint. the company is already facing rising freight and l and tariffs on steel cans and some raw materials are addg to cost woes. >> we do a lot internally as a coany first toake sure we don't have to give a price increase. then when we just are pushed to the wall and h everything we can, then we go out with a price increase. >> reporter: only the fifth price irease in two decades,

and the first as a result of tariffs. vorhees says there was initial margin pain, but the price increase helped profitality cover. in a letter to the u.s. tradees reprentative, the ceo of sun joe snojo says tariffs could make its products including pressure washers, leaf blowers and hoses, quote, substantially more expensive for consumers. but in cas like lawn and garden giant scott's miracle grow, t i grass greener on she other side. the company say tariffs are having only a really modest impact and the spr ers on o of its pesticides containers initially subject to tariffs got an agricultural exemption. as the march 1st tariff deadline approaches, theme home impro sector waits to see whether a deal can be hammered out as its sy spring season takes off. for "nightly business report," i'm courtney reag time to take a look now at some of today's upgrades and downgrades. wenegin with mor stanley upgrading shares of intel from equal weight to overweight.

it's turning bullish on that stock for the first time in ven years. e analyst said that the chip maker can benefit from a new ceo and he feels it's undervalued mpared to its peers. price target now raised from $55 to $64 share. and the shares closed at $52.49. that was up2% today. jeffreys is upgrading citi from hold to buy with the bank seeing improvingevenue growth in the u.s. as well as adding benefits from growth in latin america. the price target $73. ioti fell a fn today to $64.14.o jeffrey's aaised planet fitness from hold to buy. the analyst sees the company benefitting from the growing wellness trend. big price target, though, hike from $49 all the t way $75 a share. today's shares closed at $58 even. and wall street hit the eject button today on kraft heinz as six firms downgraded the shares and removed them from theiruy lists.

last night you recall the company reported poor earnings, revealed the s.e.c. issued a subpoena looking int some of its accounting practices. in its downgrade barclay said theres too much uncertainty to continue recommending that stock. kraft heinz shares lost more than a quarter of their value in today's trade at $395. mobile world congress, that is the massive conference for electronics and telecom companies that gets under way next week in barcelona, and the focus this year will be on 5gtech no5 5g chlogy. yesterday president trump weighed in on the topic and said i want 5g and even 6gtech nolg in the united states as soon as possible. it is far more powerful and faster than the current standard. american companies must step up their efforts or get left behindd, he contin there is no reason that we should be lagging behind on something that is soy obviouhe future. i want the united states to win

through mpetition, not blocking out currently advanced technologies. we must always bhe leader in everything that we do, especially when it comes to the very exciting world of technology. and in fact today fcc commissioner brendan carr said the u.s. is actually not that far behind. >> we're actuallyn ally good shape right now in the u.s. and that's because of regulatory reforms we've been engaged i the last two years and the white house has been helping to lead the way b prioritizing 5g. a report out this week said t s. is projected to have twice the number of 5g connections as asia by a pcentage basis,o there's more to do but we're heading very much in the right direction. >> so e whatctly is 5g and what does it do? jon fortt explains. >> reporter: what's so special about 5g? well, 1g brought us phone callsg texting.

3g, web browsing. and 4g, video streaming. 5g promises to make all o that faster, but maybe more important, it should make room for a flo of new gadgets, like self-driving cars, smart homes, weather sensors, traffic lights, security cameras. with 5g, all of them can be connected at the same time without causing a traffic pi le-up of data. it all works because three characteristics of 5g make t a potential game-changer. one, it's fast. how fast depends on how it's set up. for phones, top speed should be not only a bit faster than 4g, but unlike 4g which can be bursty, 5g phone speeds are more consistent. two, it's agile. in the world of data that's low latency. it means the time between asking to play the video and the video starting to play, much shorter. like driverless cars, which will be reacting to traffic warnings and other alerts from the network. three, it has endurance. when it's s up for communicating with sensors.

5g networks don't make dev use as much power to communicate. for "nightly b up next, taxing situation. how the income tax systemelies heavily on the very people mag politici. as part of their proposed tax plans,any democratslaim the wealthy get special breaks and pay lower rates than the rest othe country,ut a closer look shows that might not be the case. so who really pay more? robert frank digs into the numbers for us. >> they are the two words that have become a rallying c for democratic candidates. fair share. >> start asking the people who have gained theost from our country to pay their fair share.

>> but the share of taxes actually paid by the wealthy are near or at anall-time high. the tax policy center projects that the top 1% will pay 43% of all federal income taxes this year. that would be record. the bottom 60% of taxpayers pay 4% of is.ome ta of course the reason that the wealthy are paying a higher share is that theirnces have soared along with the share of the nation's pay. the top 1% willarn about 20% of total adjusted income as of ha16. that's double it was in the 1980s. many say the wealthy can afford to pay even more, especially as y ineqelity grows, along with calls for social programs. >> we need to raise taxes on high-income households for two reason one is their income has skyrocketed. the reason their share is so high is because their income is so high. the other reason we need to raise taxes on the rich is that

we have this long-term budget issue where we'll either need to raise taxes or cut spending. >> but the real battle is over the rates paid by the top earners. despite claims the wealthy get special rates or lower rates than the rest, the rates they tually pay, known as the effective tax rates, are still the highest for theal y. the 1% paid an average rate of 27% in 2016. the middle to upper middle income earners paid only 11%. conservatives say rather than raising taxes on the wealthy, governments should instead cut spendi >> if you wanted to just raise taxes, which i don't advocate, i think we primarily have a spending problem, you'd have to raise taxes about%. if you wanted to balance the budget, you'd have to raise it 30%. >> as we head to the 2020 , electihe taxes paid by the 1% are sure to get a lot more attention. for "nightly business report," i'm of autoange at the top

nation and that's where we begin tonight's market focus. long-time ceo mike jackson said today he's goip to s down from the car retailer march 11th and he'll be replaced by carl 's liebert w the financial officer at usaa. separately the company reported earnings andue below estimates. shares of auto nation fell 3% today to $37.23. wayfair had a banner holiday season topping quarterly earnings and revenue estimates. thonline furniture retailer also reported a 15% surge in its active customer count. shares hit their highest level since wayfair'sipo back in 2014. it was unearly 28% today to $149.95. canadian miningomny barrett gold is considering a hostile bid for rival newmont mining for $19 billion. that potential merger would be one of the largest mining deals ev and would create making it the largest gold peducer in

world. late today, newmont responded to those reportsaying its own $10 billion acquisition of gold corp announced in january was in its view enough to produce solid growth in the future. rrick shares fell 2% and newmont shares were up 3%. stamps.com is ending its exclusiveartnership with the u.s. postal service. the company says with amazon disrupting t shipping business, it needs to be free to do deals with competitors like fedex, u.p.s. and even amazon. but it comes at a cost. mamps.com said ending its deal with the post offins it will only earn roughly half what wall street was expecting for this year,t' and t probably why shares plummeted almost 58% today to $83.65. time now for our weekly marketni r. he's a value investor. he has names of companies that he says are a bargain at the market right now. this is his first time on the program. michael liss is seniortf pio

manager at american century investments. good to see you, michael.to welcome ght. >> thanks, bill. it's great to be here. >> and we start with zimm biomat, a medical device mak founded in 1927. i looked at a chart today and it's been hoveringhe last few years near an all-time high. but you still feel it presents a value. why? >> i do, bill. zimmer is a manufacturer of artificial hips and knees. it's a very consolidated industry. the top four manufacturers have the returns on capital are hi d. and becauand for their products are stable, those returns on capital are stable as well. so zimmer has run into some issues with their integration of biomet on the manufacturing side lt they're solvable and we think abouttle time and a little extra spending, we think they'll be able to figure that out. good returns on capital, very

stable returns on capital and a very cheap valuation. we think it's a good ri /reward. >> u.s. bank, number five in the country, has recovered nicely in the last ten years after the financial crisis. again, you still see value there. >> you're right, bill, it has recovered nicely but we think there's still more to go of as yo tsaid, they're fifth largest financial lender in the country. they have industry-leading returns on capital and those returns on capital are relatively stable compared to peertr they have ag balance sheet and the highest credit rating amongst their peers. we reallyhe like diversified revenue stream, both made up of lending business and very strong c re tnues. soy had extra revenue in 2016 and 2017. it's rolled hiover. we the margins will expand into 2019. it's a cheap valuation. leading returns on capital in theindustry, strong balance sheet, 2.9% densive dengd yield. go, we think it's a

good risk/reward. we have run out of time but you had devon energy as number three and it has been downhe last three years so we do see maybe some value there as well. michael, thanks for joining us tonight. >> thanks, bill. up wnext, we headt to hollywood's biggest night of th. >> i'm julia boorstin in hollywood where they' getting the red carpet ready for the stars on sunday night. i'll tel you whato expect from an oscar awards show that's already been riddl by controversy. that's coming the academy awards are sunday night and this year haere's more pressure tn ever for them to draw viewers. julia boorstin is in hollywood

>> the academy awards isn't just about movie stars strutting the red carpet, it's also t ultimate ad for hollywood, appeared the pressure is on to make this year's oscarsore compelling after last year'sel ratings fl to an all-time low. movie going is under pressure with more films on netflix and other service streamingt home. the box office is down 25% so far this year. the oscars can provide a valuable box office boost. >> you know, oscarns nominat or even golden globe nominations, they provide good free marketing for studios. >> but this year's show has been riddled with controversy. kevin hart dropped out as host in december, after the revelation he sent homophobic tweets in nge past, leavihe show with no host for the firti since 1989. and the academy did an about-face, reversing its decisi to awa four statues

during commercial breaks after widespread protest. changes to the show could help retain viewers over the course of the three-hour plus telecast, but the big question is after last year's ratings decline and swith no host t year, will the oscars be able to bring back viewers? working in the show's favor and beneg abc, which airs it, "black panther" was nominated for seven academy awinds, uding best picture. this is the first time a super hero movie has been for the academy's topho r. "black panther" which earned $700 million at the u.s. box office ithe highest grossing film to be nominated for best picture since k"avatar" bac in 2009. >> veryisig fory from a prestige standpoint. you know, it's not too often that we see the film that's the highest grossing film of the year also be perceived as the best film of the ye. >> along with "bohemian rhapsody" and "a star is born" this year three best picture nominees have earned more than

$200 million at the domestic box office. we'll see ifomhe cbination of commercial success and critical appeal of this year's nominees draws big numbers to watch the big stars sunday night. for "nightly business rort," i'm before we , one final look at the day on wall street. a rally with hopes about the u.s./china tratalks. the dow was up 181 points, nasdaq climbed by , the s&p added 17. that isnightly business report" for a friday. i'm bill griffeth. thanks for joining us. have a g

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