this is "nightly business report" with sue herera and bill griffeth. win streak snapped. the s&p and its string of gains thanks to fresh trade tensions and the possibility that they ly may never f go away. border bottleneck. the aut industry faces a new challenge and it's coming from the dividing line between the s. and mexico and rising rents. why it's not just home prices that are sky high in some markets. those stories and more tonight on "nightly business report" for tuesday, april 9 ♪ ♪ good evening, everyone and welcome. bill is off this evening. there wa o a sense nervousness on wall street today not only is aboutarnings season to start, but also because of trade. that caused the s&p 500 to halt

an eight-day rally and push the treasury yields lowe it fel 190 points to 26,150. the nasdaq dropped44 and the s&p 500 gave back 17 and today's trade issue wasn'ut a china. instead, it was about the european union. kayla tausche has the details. >> it's the salvo since the u.s. trade the u.s. trade representative outlining $11 billion in european goodsubct to new tariffs including aircraft, wine and 40 different types of cheese. its retaliation for europe's subsidies on boeingompetitor airbus. president trump tweeting that the eu has taken advantage of the e on trade for many years and ite the go on trade policy is to pivot the negotiations with europe which h stalled once china trade talks have concluded. the trump administration has

may 18th deadline to chart its next steps on auto tariffs which will i largeact europe any that's why president trump suggested a four-week, and china said it's not committed to the e timend brussels called the new terror threat exaggerated d president trump has shown he's not one to back down. foror nightly business r i'm kayla tausche in washington. >> much of the focus investors have been on trade relations for china and the deal between the two largest economies. that might not signal the end of the trade story. >> a lott of mar commentary sees tariffs in the trade war as temporary events. a u.s.-china trade deal and it will sound the all-clear signal for markets and the economy, but their indications may be in for a forever trade war that can last the balance of the trumpon administra the chief economist of the imf which downgraded global and u.s.

growth cited specific concernsg for ongo trade battles. >> there was improvement between the u.s. and china and the pablity in the near future and that is particularly damaging given that it's a highly ge egrated sector for the l global supply chains. >> consider these developments. the tarfs remai in place for mexico and canada even after the u.s. struck a tra deal with the two countries. the u.s. wants to reserve the right to restrict china even e trade deal. they have tariffs on aircrafts and autos could be next. art hogan, chief market strategist with the security says if they want to pivot immediately to treiffs on you yoo eautos it will dissipate rapidly. it could be that tariffs are a t negotiatingool and another

explation could be that t administration could keep tariffs in trade for years and thnt have perma reduced imports. if the goal is bringing back manufacturing loss to china and other chiefcompetitor, then temporary tariffs won't do. if that's the goal markets should prepare for permanent trade barriers and possibly ave fo trade war. for nightly business report, i'm steve >esman. he number of job openings fell to an 11-month low in february. according to the labor department the measure dropped by00 538 to 7.1 million. that's the lowest level since march of last year. the decline is off of near rerd levels andf you recall the government employment report that month showedp, a sharp but only to bounce bk in march. oil prices fell today, but that has not been the tnd. domestic crude is up about 40% this year. there have been rumblings about violence in libya that have been mpacted by sanctions on iran

and venezuela. so we brought in john kilduff. he joins us to talk about the oil market and what it means to you. he ising partner at again capital. >> good evening, sue. >> let's start with libya and that it is having on oil prices right now. >> it's sort of the icing ond ake for consumers at this point. >> basically, we've had warring faions in libyaor a year since moammar gadhafi, the former dictator was rown and ultimately killed. there is a consolidation of power goi there is a general by e name of kaftar that has controlled the eastern part of libya and the oil i forming there. he is making a move to consolidate the rest of the b country and ttle for tripoli, the capital is on so to speak. i'm getting the s that he'll prevail and that the situation will revert to the way it was when moammar gadhafi was there,

a sort of heavy hand force on an otherwise tribally organized country. >> right. >> which i good news fo consumers because the oil will flow. >> it is not flowing for other parts of the country, of the and the whole situation is really exacerbated by the fact that we've had some re issues here at home, correct? we've h w badther in certain places and catastrophes in others. >> right, and sort of e one-two punch is this. you have venezuela imploding cause of what's happeni in that country and its involvement into just zero oil production at some point here. also, too, you have committed saudi arabia that's working hard to reduce globalupplies and ey've undercut their quota by quite a bit and that's tightened the market and you add venezuela getting worse and ranse and you add the sanctions and now you add problems with the u.s. refiners and it sort of gets the cauldron

boiled up from time to time. >> we've had major fires and we've had the flooding and all of this for consumers means higher prices, right? >> and the midwest, flooding is a weird one off, ato, because appened ther ethanol supply which is blended off the coast particularly in california and is stranded there, they're scrambling to buy it from brazil and the west coasthey've not had a lot of options and this is something that should pass.nt i would p out that the fact that the u.s. is now the world's oil producer and we're talking about a horrific price environment. >> john kilduff. >> hang in there. >>. thanks, jo a new threat for the auto industry regarding vehicles in mexico. slowdowns dueo the shi on

how border patrol agents are being used and as phil lebeau reports that is creating bottlenecks. >> the u.s.-mexico border. every day thousands of autoparts and automobiles go back and forth before they eventually thed up in showrooms here i u.s., but in the last week, the president's push to tighten border security has created serious delays which could wind up slowing down auto plants. >> wautomakers knowt they get from mexico and they know what they're not going to get when there is some shipments tha are getting through and some aren't and there are seven-hourd delay ou'll send home half a shift and you'll not have smooth production until the whole production syste ca last year more than half of the trucks and cars were sold in the u.s. with another 15% from mexico, easily outpacing imports from othernt ces. it's where many chevy silverado, ram pickups and other popular models are built. so far t supply of new

vehicles coming out of mexico has not been hurt,ut if the delays continue and the flow of components or parts slowsdown, so will assembly lines both in mexico and the u.s. >> it only takes one missing part to suspend production here in the u.s. and on the other side in mexico a the cross-border trade between the u.s. and mexico is really quite isintense. >> i not uncommon for autoparts to go between the u.s. and mexico twoo three times before they ultimately wind up in a finished vehicle, which is why the auto industry is closely following the tension at the border. phil lebeau, nightly busess report, chicago. on capitol hill executives from some of the nation's largest pharmacy benefit managers testified on the rising ice of prescription drugs, and they were on the defensive sayingy theare not to blame. bertha coombs has the details. >> the senat finance committee say they want to get to the

bottom of weather pharmacy benefit contacts put industry profits aheadf consumer prices. >> more transparency is needed. ie current system so opaque thatt's easy to see why there are qus about pbms motives and they negotiate discounts with drugmakers on prescription ugs. drugmakers and others say that those discounts nrootiated h secret contracts lead to higher lyft prices and consumer costs. >> i'm of the view that pharmaceutical benefit managers guard their operations with greater secrecy than hbo is guarding the ending of "game of thrones." >> pbm executivesayhey support transparency to a point. >> we have transparency to who hires us. we also are transparent to the government in terms of disposing it to cms in terms of rebates,

but if you disclose that to the external market it would hurt your ability t get a good value for people to negotiate more. >> the ceo defended pbm contracting saying they had big savings when expensive hepatitis c drug was in the market. >> in the first year we treated 60,000 patients than the drug's clinical trial and helped over $1 billion. >> asked about proposals to cut out the middle men and the government pricing newdr s, it would aren't keep drugmakers from r the prices. >> my concern from government to get the negotiation higher list prices initially when they come out to offset would havenufacturer to bring up. >> the firms are back on capitol hill tomorrow, this time along with drugmakers for a hearing n thhouse, energy and commerce committee that's focusing onli

in prices. for nightly business report, i'm behacoombs. there was a separate hearing in the news that wall street was watching. before the house appropriations committee. he gav wmakers a timeframe for when the justice department will release a racted copy of the mueller report. >> within a week i will be in a ease the report to the public and then i will engage with the chairman of both judiciary committees about that report and about any further requests that they have. >> the hearing was intended to focus on the 2020 fiscal budget. it is time toake a look at some of today's upgrades and downgrades. disney was downgraded from outperform to market perform at cowan. disney cites the product pipeli and says thursday's investorin cle event. the stock rose more than 1.5% to

116.8637 u.s. steel was downgraded to underperform from neutral at credit suisse. the analyst says u.s. steel is in a weakerpe ctive position compared to its peers. the pricet tar $13. the stock fell about 10% to $17.77. still ahead, think the ?etail industry is cnging well, a new report says just you wait. ♪ ♪ >> bank of america is hiking its minimum wage t$20 an hour and the ceo says the increase will be emblemed over the in, t years. paychecks will go to $17 at first and then 20 which is e highest minimum wage paid by any of the country's biggestan.

the announcement comes one day before bank's ceos are scheduled to testify on capitol hill. optimism on main street ticked atgher last month. according to thenal federation of independent business, business owners are more optimistic about economic growth and do not expect a recession any time soon. theurvey also points to solid investment spending and hir g. >>ll, the retail industry could use some of that optimism as store closings are projected to accelerate. according to ubf, nearly 75,000 reta stores will close if online saleseaed 25% in total retail sales by 2026. michael laser joins us. he's with ubs to discuss his outlook. he wrote that report. michael,co w. nice to have you here. >> thanks for having me, sue, very quickly, how did you come p with that metric and those numbers. >> looking at a variety of data

from various sources and came up within the sources to determine what'she equilibrium for the supply of available places to buy goods a the demand to buy goods through physical places. what we're seeing is there are just too many stores ithe u.s. and as a result we will see more store closures over time, particularly as e-commerce growth continues to increase. >> you broke it out into fferent sub sectors. which sub sectors need to close the most sres? the way we see it, the sub sector that need to close the most stores include those consumerleronics, home furnishings, the apparel sector. these are areas where we're seeing continued increases in the rat of online penetration and as a result we suffer from too much capacity in terms of the number of stores that are seing those industries. as a result they're the ones that will be at the forefent of st closures over the next several years.

>> how many of these are within enclosed malma versus ho are freestandi it's a goodquestion, sue. right now there are 100 in enclosed malls. a good portion of those include apparel retailers and be the heart of the consolidation in that sector, and we're going continue to see more and more closuresn that area and otherwise we'll see home furnishings and retailers and clothes within malls and we're seeing that right now. we'll see a shift from the mall-based retailers to off-mall as a result of the convenience of off-mall shopping. >> there are some sectors in retail that you do like. so from an investment perspective for those who have a longer term time horizon, you like hard lines things like home depots and lowe's and the correct? >> that's correct, sue. we like those sececrsse

there is an element to the sale where the consumer still val ts going t store. in the case of home depot and lowe's even when doing online sales about half of those arepi ed up in the store. the same is true in the autopart space for companies like autozone and o'reilly and advanced auto so having that presence is very imp you're seeing less disruption from the online channel. >> michael laser with ubs. thank you, sue. from the retail sector to the investme that's historically been popular inetail is investors, muni bonds and this plain vanilla partf the market garnering a lot more attention following the passage of the new t law. robert frank explains. >> one of the least glamorous segments of the investing world is a huge hith wealthy investors. municipal bonds or muni bonds thve soared in popularity in recent m as investors look to offset a big tax bill. investor flows into muni bonds so far this yr have topped $20it

billion, that's highest in 13 years. the main reason, tax- income. investors who live in high-tech states like new jyork, newsey or california are writing bigger checks to the government this month because of that new cap on state and local tax deductions to create more tax-free incomes those high earnings are putting more money into muni bonds which are exempt from federal incomes and state and local income taxes. so if you have a 10-year muni bond that yields 10% its taxable equipment could be 4% or higher. all that demand his driven down yields in the $3.8 trillion market to the lowest levels in treasury sin00 and that has been good for the state especially high-tax states that have been fighting the new tax law. eight of the ten biggest issuers in the first quarter were in california, new york and connecticut. new jersey and illinois were also big issuers. so the tax law has lowered the

borrowing cost for the state most opposed to the new tax code. california last month issued a $3.3 billi bond deal that had an interest rate of about a third of a percentage point below 2017. while that doesn sound like much, it saves the state about million. politicians in those high-tech states saying the gains from the muni bond boom can't nearly offset the billions that their taxpayers are leaving to washington. y think an investment intoat is a good thing and it's certainly not a long-term solution.io the big que for investors is whether the muni mania has bune too far and created an offset le. >> they're now below 3.6% and that's only about a point higher than the u.s. ten-year treasury. for nightly business report, i'm robert frank. boeing's report has declined

in deliveries and that's where we begin tonight's market focus. total deliveries were nearly halved in the first quarter foowing the popular 737 max jet. net orders fl to 95 from 180 a year earlier. there were no new 737 max orders during the month of march. boeing sharesell about 1.5% to 369.04. the grounding of the 737 max jet is one of the reason yes american airlines trimmed its firstuarter revenue forecast. the grounding forced the airline to danzell hundreds of flights. the key revenue metric will now be flat to up 1% and it calls for 2% growth. shares fell more than 1.5% to $33.31. levi strauss reported a 7% rise in quarterly revenue. the ceo described growth at the company broad based. since this was the jeansmaker's first report sinceoing public,

there were no estimate available. he stock rose in initial after-hours trading afterg closinhe regular session at $21.88. there have been a l of rumblings about regulating big tech companies. today a senate bill was introduced that takes aim at social media firms and it comes h-profile er a h executive was called to capitol hill.ka a tausche is back with us. >> it's been a year since mark zuckerberg embarked on his apology tour after the cambridge analytica dcandal. >> w not take a broader view of our responsibility and it was our mistake, and it was my mistake and i'm sorry. >> a cascade of hearings since then.ut exes from google, twitter and facebook testifying on everything from privacy to ,litical bi though pgress on reining in social companies has been slow, but today virginia senator mark warner took another run at regulation running up a first ithe series of bills to challenge business as usual. >> mark zuckerberg told him

week ago calling for more regulation and the platform utmpanies will now have an opportunity toheir money where their mouth is to see whether they support this legislation and other approaches. >> the bell would ban a practice called dark patterns where use are forced to share their data by the nto terms set company in order to use a product. it would create a new regulator under the new trade commission to be a be a cop on the beat. >> warner hopes his bill co-sponsored byeb disher whether it would have large help scale into law by 2020 is new consumer processions set to become long that year. >> that will go into effect last year and you're seeing can the

mpanies like facebook, and the record amount of spending on lobbying. facebook and google spent $35 million and twitter's lobbying spent double. that money is to influence fwhals have not beeen wrind the biggest cost could come from investigationst the federal trade commission, the department of justice and the feder department of trade, and for nightly business report i'm kayla tausche inhi wton. coming up, we often talk about rising home prices, but in some markets rent cal costs are real issue.

>> wholeles may be heating up this week, but renters are aren't getting a break. in fact, rents haveurned higher yet again and in some market afrdability has become a significant challenge. diana olick breaks down the numbers. an f you're looking to ren apartment it may take you a while to find one. the vacancy rate e at the of last year fell to the lowest level since 1999. this, even as more renters become buyers. >> resident retention when leases come up for renewal is at record level. so while you mig be losing more people to home purchase they're moving less frequently for change or for change in household configuration. >> low viaccy means landlords can have for much of last year as new appliance supply can hit the market andn some markets, the gains are causing burdens

r renters. the worst, miami, san diego, l.a., new york andor laend owe according to a newy sur from freddie mac. in this nair areas way more, in some cases even half their incomes. >> san francco has the second highest rent in the country and 13th on the most risks of burden because salars are high. >> pretty much having a roof over my head over going to try to save up for a nice car or a nice vacation is just kind of heartbreaking. >> even renters in luxury buildings won't catch a break. they have been seeing some good deals that so much new product was being completed in the last few years and landlords were offering incentive, but notch s now. residentt that initial space built and when renewal leases come up you can push the pricing a little bit. >> overall, rents are nowg ris

at about the same pace as wage growth and while too many americans are still burdened by high rents and the might be that unlike five years ago when rents were soar, for "nightlyes busreport "qwest i'm diana olick from washington. >>hthat is "n business report" for tonight. i'm sue herera. thanks for joining us, and we'll e you .

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