>> announcer: this is "nightly business repor >> moving higher, stocks start the week on an upbeat note after the president says he does not plan to raise tariffs on chinese goods at the end of the month. paid too much. warren buffett admits that berkshire hathaway overpaid for a company that's accounting is now the subject o an s.e.c. investigation. riding into the future and it'sa gas-pow aed bike bu electric motorcycles enough to win over young consumers? those stories and more tonight on "nightly business report" for mond good evening, everyone, and welcome. billon offht. investors started the week with news that they had been hoping for.

president trumg back from his hardline stance on a trade deadline with china following two weeks of high-level talks with the world's second largest economy, the president postponed the dato raising tariffs on $200 billion worth of cnese imports. and while investors are cheering the news, many are also asking, what's next? kayla tausche is in washington tonight. >> r as preside heads to vietnam tocldefuse r tensions with north korea, he's touting another area of deescalation, trade with china, telling u.s. governors he's close to a deal. >> we're going to have a -- another summit. we're going to have signing summit, which is even better, so hopefully we can get tt completed, but we're getting very, very close. >> reporter: talks with china have intensified over the last week. china's president, xi jinping, touting significant progressnnd a delegat negotiating on his abehalf staye extra two days. the results, according to tweets from theenpres a deal in the advanced stages. progress on intellectua

property protection, technology transfers, agriculture, services, and currency. and a potential deal announced at his florida resort, ma a-lago, in late march. president trump credits tariffs for gettings talks t far. >> tariffs are hurting china very badly. >> reporter: but investors and business leaders are breathing a sigh of relief that tariffs could be rolled back. here's warren buffett. >> i'm relieved at the idea that there's still some chance that sense will prevail. the -- it is bad for china, it's bad for us if we get into some kind of a trade war. >> reporter: sources say the u.s. and china still disagree over how to enforce a deal, and within the white house too, president trump and his t trade official clash on what form the deal would take. >> by the way, idisagree. i think that a memorandum of understanding is not a contract to the extenthat we want. >> from now on, we're not using the word memorandum of understanding anymore. we're going to use the ter trade agreement, all right.

>> reporter: the substance of any trade agreement or it would be effective are still a work in progress. china has proposed somenc sions that would go through 2024. the end of p potential second term. for "nightly business report," i'm kayla tausche i the easing of trade tensions sparked a rally overnight in china which saw stocks rise the most since 2015. here in the u.s., sfocks owed suit, touching almost four months high midday. they were also helped b deal making activity which we'll get to in just a moment. today, the dow jones industrial average rose 60 points to 26,091. the nasdaq was up 26 and the s&p 500 added today's stock gains add to the strong move higher this year. but how sustainable is the rally? mike santoli looks into that. >> the stock market in 2019 is to the level where rallies failed three separate times last fall. now that the losses of the worst

decembhe since 1930s have been recovered, wall street is asking whether thi rally could continue higher fromere. the market itself is encouraging to the bulls. the advance has been unusu ly broad with the vast majority of stocks up dramatically from the cember lows, pullbacks have been shallow and brief on the way to a nearly 12% climb in the s&p year to date. another point for the bulls,ve or sentiment is generally muted. surveys show only modest optimism and investors have more money from stock funds this year than they've contfrbuted to them. a contrary opinion angle, that's a netpositive. with the federal reserve emphasizing paence, corporate debt prices have firmed up. that helps to support equity valuations which are now right around their five-year average compared to forecast earnings. but those earnings estimates are a possible stumbling block. s&p cted earnings for the 500 companies have declinedn steadily iecent months with a drop in profits now expected for the first quarter and total t

growth f year down to about 5%. investors seem to be betting that an expected trade deal with china might coincide with stabilizing earnings forecasts and a boost to corporate confidence. if so, that could help validate the rebound and sustain this rally, but as stock prices go higher, so does the need for econom news to improve rather than just seeming less bad than expect for "nightly business report," i'm mike santoli. jas joins us now to talk more about the market and what might drive stocks from here. he is head of america's asset allocation at ubs global wealth management. nice to have y evening. >> good to be here. ti you say that you are positive but prudent. what do you mean by that? >> well,in what we is that, you know, the economic outlook is still attractive and the markeds have ral a lot on both the good developments on trade and also the federal reserve turning patient and providing tail with the market.

edfor the markets have mp a lot this year without actual ata getting better both in the u.s. and globally, we've seen weakness over the past few months so right now the marketf actual economic data which we think will get better in the u.s., for example, some of the weakness we've seen is a result of theutovernment wn, the december selloff clearly spooked both consumer and investor sentiment. that's going to have a sort ofm near tmpact but looking ahead, three, six months, we still feel comfortable at th outlook a that's going to provide further tail winds on the upside but prudent because a lot of good news has already been pricedn. >> so does that mean that you' changed your exposure to stocks? and if so, how? >> just last week, we did our latest update. we were already kind of overweig r stocksative to our benchmark. we dialed that back a little bit. 3% overweight compared to our benchmark, we're down to 2%. we've also made some other changes on a rional style and sector basisy and maybe make the portfolio a little less risk on acknowledging that the cycle may turn a little bit, the

economic data may not support us as much we'd like so we thought let's keep risk on but take more prudent action of how we allocate the portfolio. >> you say you like the u.s. but you also like the emerging narcotic part of the globe? a.>> a 70% of the market is based in asia soenou canally like emerging markets. i think the reaction this morning in china with chinese equities up 6% on this news kind of speaks to the fact that,ll u.s. markets have kind of priced in some good news on the fed and on trade. there's definitely hasn't been the ce as much overseas, particularly in asia. so that's an area where we still think is attractive as you get kind of better news on trade. china showing signs of f the agree shoots after stimulus. if thatrelays out, t definitely more upside in emerging markets. >> okay. so for so long, w this marke obsessed with trade, and to a certain extent, still is.

but with progress apparently being made, according to the president and others, what else d now that that at least is out of the way? >> well, i think the thing that the market will focus on from here on is the growth outlook. d the u.s. andoverseas, and what does it mean for corporate earnings. we know we're going to s some soft data in the first quarter, rat would people want to see and where thel market debate will be from here on out is, is the slowdown we've seen sort of a mini-cyc slowdownnd we're going reaccelerate through the middle of the year or is there a more ominous sign that growth is going to continue to bend weak risk a recession if not this year than next year isg. ris the market will need to get comfort that it's a temporary blip. >> jason, you. jason with ubs global wealth management. and now to those deals thatn we men earlier. let's start with general electric which agreed to sell its biotech business to danaher for $21 billion. the move is a strategy reversal for ge, which rejected an

approach by danaher for that business about a year ago. the proceeds of the deal will be used to trim debt, which stood at $121 billion at the endf december. shares of ge were up more than 6%. 8.5%er shares gained and now to barrett gold, which made an unsolicited $18 billion bid for numont mining. barrett gold sayss the move logical. numont had announced a ol$10 billion takeover of corp. and today, barrett, numont and gold corp. all finished lower. finally, spark's portfolio includes treatments for blindness and huntington's disease. this deal follows a recent push among other drug makers into the gene therapy space. shares of sparks soared 120% while rauschra fell aion. warren buffett released his annual letter to shareholders over the weekend. veit's an annual that many

investors follow. and this year, it took on added significance given last week's warning by kraft heinz, a stock that is one of berkshire's major holdings. becky quick spoke with the d >> reporter: this past weekend, berkshe hatirway cn and ceo warren buffett put out his annual letter to shareholders which has become a bit of a must read among the investment community. alked about all kinds of issues and we sat down with him in a wide-ranging inteveiew, d everything from the markets to the economy to berkshire's businesses, but we started with the news of the day and that's berkshire hathaway's 2 2 27.6% investment in kraft heinz. >> i was wrong in a couple ways on kraft i heinz. ink we talked, the glide bncheon time, about the packaged goods,nds losing some ground against the retailers. the packaged goods companies are always in aug strgle with retailers. our family had a grocery store

for a hundred years and we were always -- then, we didn't havei much barg power. but the really strong brands, they can go toe to toe with walmart oo cosr whomever it may be, but the weaker brands tend to loseout. >> reporter: there was a federal reserve out on friday that suggested that gdpn slightly be. what do you think the economy is going right now, just based on yourbu nesses, based on the receipts you're seeing, the companies that you track that you have major share in. right now, just based on the montety statements i and in some cases i get other data in between, but overall, things are a little better. the rate of improvement has tapered, but it certainly hasn't flattened. month.t can change next >> reporter: for "nightly business report," i'm becky quick in omaha, nebraska. now when it comes to apple, mr. buffett says he's not buying more of the stock at

levels but he's not selling them either and he told becky that he would add to hise position if shares got cheaper. 12-week e stock hit a high, closing up a fraction to $174.23. it is time to take a look at today's upgrades and downgrades. paypal was downgraded to neutral from buy. the analyst cites short-term challenges including concerns around its ven $99. the shares closed at $96.70, up a fraction, and touched a 52-week high during the trading session. norwegian crue line was upgraded. the analyst cites strong advance ticket saless well as the tential for a dividend in the second half of the year. the price target is $65. norwegian closed u 1%. microsoft was added to the best ideas list at web busch. the analyst cites major cloud

opportunitie in the future. e price target is $140 and the firm has an outperform rating on theodtock. shares closed up a bit to $111.59. kro noes group was initiated rating.underperform there's little to get excited about the stock, the firm says. th add it's gotten ahead o itself. they closed down today at more than 7.5%. still heahead, futuristicch tenologies that are almost

hotel inventories increase wi the most in more than five year in december. that increase suggests that goods are piling up, whies could ret a slowdown in demand. according to the commerce department, inventories rose 1.1%, which was above forecast. aythis was a d release due to the partial government shutdown. to federal rese tlive the central bank's semiannual repor congress tomorrow. but he's no stranger to the halls of congress. elon mui reports on what's beeg happenehind the scenes. >> reporter: the chairman of the federal reserve is only required to appear before congress fourm a year, but since taking office a year ago, powell has been on a pitol hill c >> he's much more direct in answering questions. much more regularly engaged in the hill conversations. >> reporte 98 personal phone calls or meetings with lawmakers, 4 times the amount of

janet yellen in her first year.t he's reachedo rank and file members and to party leaders but not as many democratss republicans who controlled both chambers of congress at the time. the heads of the committees that oversee the fed got special attention. more than 20 individual contacts with those lawmakers. >> i have chairman powell knows that his job is going to be easier the more tha congress understands what he is doing to fulfill his remit of price stability and full employment. >> reporter: the fed could certainl use some friends in washington. >> unfortunately, they just raised interest rates a little bit because we are doing so. we i'm not happy about that. >> reporter: so unhappy that the president considere firing powell. >> thank youmuch, mr. president, for the faith that you have shown in me. >> reporter: even though trump nominated him for the job. but getting rid of powell might not be so spsimple,ially when he's built up a bank of thank y on capitol hill. the other day. call >> we appreciate some of theff transparencyts that you have put forth. >> i know you were in my office.

>> reporter: his record i meetings in just one day. a democrat and five republicans, qcluding some of the very same lawmakers who wilstion him this week. for "nightly busineport," i'm elon in washington. a big quarter for etsy. that's where we begin tonight's market focus. the online marketplace for handmade and custom goods reported better than expected earnings and revenue. the ceo says theompany benefitted from improvements to its search function and expanded marketing. the number of active sellers at the end of the fourth quarter was upbout 10% from the prior year and the number of active buyers increased 20%. shares were volatile i initial afterhours trading. they e regular session up 4%. also after the bell, shake shack beat on its results but said full year revenue would be below expectations, along with earningshe company also detailed its expansion plans. the burger chain said it plans to open up to 40 new restaurants this year in the u.s. and with that, shares were all

over the place in after hours. they closed the regular session down more than 1% to $52.25. good year director westerner guice ler bought stock e lier this month. it's the largest open market purchase by a goodyear insider in 15 years. the shares rose almost 4% to $20.08. california utili pg&e plans to give $130 million in proposed bonuses to its employees. this comes after victims of the california wildfires protested, deying the workers don't deserve to be rew for good performance. pg&e filed for bankruptcy in nuary. the shares were down a fraction to $18.65. > qualcomm is telling investors that it expects to benefit from the rollout of 5g networks. its chips will supply the 5g connectivity for cars, pcs, and home broadband.

5g as we have explained will featsn the current 4g networks and that was just one of the topics at the mobile world congress, an annual conference that attracts heavy hitters from e wireless industry. john ford is covering the eve for us from barcelona, spain. >> reporter: 5g, geopolitics and foldable phones, all grabbing atteion at mobile world congress in barcelona. some of tech's power pyers are positioning themselves for a surge in spending on faster, more power efficnt networks, hoping for a once in a decade opportunity to pull ahead ofri ls. with u.s. carriers lighting up the first citywide mobile 5g networks this year, the business opportunity for tech heavy weights like vmware is finally real. >> i really see to 20 as where it's going to happen. right now, the national anthem is playing. next year, ghe games started. >> reporter: vmware is offering technology to help serviceov ers transition to 5e, meanwhilevice makers like

huawei and samsung are already rolling out 5g phones. geopolitics looming in the background of this year's show. intel's s bn said the sooner those clouds clear, the better. >> i think we're all excited by the progress that seems to be made in the discussions between the u.s. a china, because we think global trade g isd for the industry in particular. >> reporter: but for so man companies gathering here in spain, those opportunities depend on the 5g networks actually getting built. tower by towe as quickly as possible. ericson ceo said in the u.s. tight labor market is making that a challenge. >> we're probably one of the largest trainer of power crews m in northica, actually. but what we see now is that the tower crews are the limiting capacity, so actually, modernize >> reporter: a good economy will help consumers afford gadgets like those foldable phones, both more than $1,900, when 5g is

ready. but until then, it's a potential head nd. for "nightly business report," . coming up, thecy mote industry enters the el here's a look at what to watch for tomorrow. as we reported, the fed chair, jerome powell, will be oca tol hill to testify on the state of the economy.be housing wil in focus with the result of housing starts. the s&p case shippchiller price

index and home depot. that's what to watch for on tuesday. bank of america says it will no longer use the merrill lynch brand for its investment banking group. it also plans to gradually retire the u.s. trust name to become p bank of amerivate bank. the move is part of ceo brian moin than's one company strategy. bank of america acquired merrill lynch a decade ago during the financial crisis. it purchased u.s. trust from charles schwab in >2006. he head of the european union is urging british prime ministerheresa may to delay the uk's exit from the eu, which is scheduled for the end of march. donald tusk said that would be a, quote, rational solution given the political situation and the lack of a brexit strategy. but may says the delay will not solve the impasse in parliament and that a timely exit is within reach. >> we havein it wiur grasp,

as i just said, i've had a real sense from the meetings i've had here,onrsations i've had with eu leaders in recent days, real sense that we can achieve that deal. it's within our grasp to leave with a deal on the 29th of march and that's where all my energies are going to be focuse t >> meantime head of britain's opposion laborarty said he could back a second referendum if his party won power. the treasury departmenas announced new sanctions against venezuela. the sanctionsarget the governors of four venezuelan states who are connected to embattled president nicholas maduro's government. in a atement, the secretary treasury mnuchin said these erdividuals ar way of sy needed humanitarian assistance and are prolonging the suffering of th venezuelan people. the energy markets are watching, of crse, the situation in venezuela very closely since it is a member of opec, but today, w the foc on a tweet from the president who urged the cartel to lower

the cost of crude, saying, quote, t world cannot take a price hike. frile, end quote. the team comes after opec nations recentlymbked on a fresh round of production cuts designed to support prices and of domesticice crude settled 3% lower as oil prices fall, gasoline price are on the rise nationwide. according to the latest survey, prices are up 10 cents over the past 2 weeks to $2.44 a gallon. butld you wt need gas if you road an electric motorcycle. it's a segment motorcycle makers are focused on. that means the competition in thisar relatively new mket is heating up.s frank hollandin new york to >> reporter: motorcyclrs are revving up in 2019, racing towards the future of ste bikes.lectric gas-powered motorcycle sales have been slumping the last

three years as the age of the average rider has increased and their income decreased. harley davidson theconic and best-selling gas powered bike maker in the u.s. is offering an electricption in august. it's all part of an effort to attract millennials who just don't wanthe hogs and choppers thataby boomers enjoy. >> this is the new bike. >> reporter: today, zero motorcycles, the elbest-selling tric motorcycle maker, launching their newest model, the srf. ceo sam says the goal is to get millennials to see these bikes as electric vehicles. >> the concept of owning a two-wheel tesla is reallyti ng to that group. the millennials also tend to be the most comfortable with technology and innovation and change and they're the ely adopters. we have consumers that be stay with us as we continue to innovate and grow and adapts a brand. >> reporter: a recent study by ubs found the top reasons people between 21 and4 years old would buy a motorcycle is for ease of transportation and

environmental reasons. electric bikes are considered much easier to operate and don't have reissions. >> woing to inspire a new generation of riders and we are really going to appeal to millennials. >> reporter: price and performancere the two major metrics for motorcycles. the srf will sell for about $19,000. the strike from lightning motorcycles will sell for about $13,000. harley's live wire will sell for about $30,000. >> the electric vehicle space has been on a tear. we're seeing double digit compound annual groh rates and this feeling of momentum and the electric unty i vehicle space. >> reporter: that momentum building while the ierest in motorcycles is down shifting and manufacturers are hoping that electric bikes like this one will be the spark that reverses that trend. foror "nightly business r" i'm frank . before we go, here's a look at the final numbers o wall street today. the dow jones industrial average rose 60 pois to 26,091.

however, that is well off the highs of the trading session. we were up almost 200 points at one point in the y. the nasdaq was up 26 points, and the s&p 500 added about 3. and that is the "nightly business report" for tonight. i'm sue herera. thanks for joining us. we'll see

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