♪ ♪ this is "nightly business report" with sue herera and bill griffith. something's missing. theally takes a breather as investors evaluate major issues facing the market. millennial migration, smaller cities a attracting a big wave of younger americans and those local economies a benefiting. time is mone. th high-tech way law enforcement is fighting crime. those stories and much more tonight on "nightly business report" for thursday, may 2nd. good evening, everyone, and olcome. bill is this evening. stocks lost their footing a bit today. the s&p 500 and the nasq pull further back from their all-time highs, a decline in oil prices weighedn the broader market as did those comments yesterday from federal reserve chairerome powell which we told you about last night.

powellre ref to inflation pressures as being transitory, and the market interpreted that to mean an interest rate cut may not be on the horizon. the dow jones industrial average fell 122 points to 26,307. the nasdaq was down 12. the s&p 500 slipped six.ha so will it take for the market to move higher. bob pisani takes a look. >> there were a few headwinds that drove the action today. crude oil prices went back to december. oil went from $65 to $61 a barrel. the trump administration stopped issuing waivers to buy inian crude and that sparked uncertainty about pces. beyond that, there are issues than just the oil market. we have mov up so much above 50 points in the s&p just in the last ne days or so to the new highs that we hit and the path of least resistance right now is sideways to down.f the riske rally right now

include no trade deal and just how well the trade talks are goin right now. and with the federal reserve, the market wants a rate cut, but fed chair jay powell seems unwiing to provide it. elsewhere, we need china to keep recovering in positive territory and the market is just expensive right now earnings are expected to be up only in the low single digits for the next few quarters and also missing from the rally are the retail ndinvestors short-term traders have been bullish and long-term retail investors have not been participants in the run-up so faap and small stocks have not been as strong as the big cap stockswh recently. ele, china stocks have been soaring this year because china's central bank has been stimulating the economy, but we need to see consistent employment in the economic data over in china for the next few months. so here's the bottom line. with earnings season winding down, a lot has the markets now for stocks to

just keep going up. for "nightly business report," i'm bob pisani at the new york now to the economy and the release of key reports today. new orders foru.s.-made goods rose by the most in seven months in march driven b strong demand for transportation equipment. separately, the number of americans filing applications for unemployment benefits held steady at the end of april. jobless claims areonsidered a proxy for layoffs and first-quarter productivity gre 3.6%, the fastest pace since a 2014 the acceleration depressed labor cost suggesting that inflationld c remain benin for a while and all of this talk about inflation got us thinking about those comments from the fed chief yesterday and hisla exption for the current rate of soft inflation. >> as we look athese readings in the first quarter for core, we do see good reasons to think that some or all ofre the de may wind up being transient.

>> let's turn to vcent reinhardt to talk about inflation and why we're not seeing it in the u.s. economy rid now and he's the chief economist and macro strategist at mellon. welcome. nice to have you her>> hanks for having me. >> we haven't had meaningful inflation in this economy for quite a few years now, despite expectations that after the 2008 fncial kra financial crisis and when the fed started to exit the package, we might see rampant inflation. why have we not seen it? two parts. one is when the fed created a lot of reserves, banks d tn't usse reserves at first because they were capital constrained and they were under a lot o pressure and then as the fed started raising rates it also increasedhe rate it pays on reserves so banks didn't have any reason to use the reserves. and the second part is we had a tough financial crisis, but most of our trading partners had worst ones and the dollar has

been appreciating. when the dollar appreciates, it means that foreign goodsto comi he u.s. are cheaper and that's been pulling down our inflation. >>ou know,also, the economy has changed so dramatically in, say, the last ten to 15 years, but we're still measuring inflation b a kind of old metrics. are we looking at inflation and how to measu it in an int kuwaited way? >> data eamired is always yes, and you're right. 40 years ago manufacturing was closer to a third of what we do. now it's much, much less, more li not 8% or 9%. a lot of our. the stuff we consume are services and those things don't move all that fast and they also don't get reset very often. problemswe've had some in measurement and we also had a terrible problem in understanding the quality of

what we consume. the same price you pay for a better good actually means at inn's gone down. >> but you are under the expectation that we will see slight resurgence in inflation, correct? >> i think fed chair powell is rict. idiosyncrand one-off things that you observe when inflation is so low, but we also think that the unemployment rate is putting pressure on roources and costs will go up and when costs go up they'll getro passe h to domestic prices and if the dollar doesn't appreciate, we won't get that foreign drag on our domestic inflation. >> all right. on that note, vincent reinhardt with mellon, thank you for joining us. >> thank you. >> president trump today said that stephen moore withdrew his name from consideration for a posiveon on the federal res board. that decision comes after some republican senators raised concerns about moore's comments

on women any his views on the central bank, making his support inehe sen uncertain. the federal government and facebook are negotiating a settlement over privacy breaches and it could result in new oversight of the company. julia boorstin has the details. >> i know that we don't exactly have the strongest reputation on privacy right t now, put it lightly. but i'm committed to doing this well. >> that commitment to privacy that zuckerberg made earlier this week may bring federally approved regulators into facebook's most senior ranks, according to a new report by politico about the social media sdwrie giant's pending settlement commission over the 2011 commitment to protect users'ac pr after facebook disclosed it expected to pay the ftc between $3 billion and $5 billion, they're negotiating a number of

changes to guarantee the protection of the user'sata incruding creating an independent privacy oversight committee. >> if there is andea that there should be a data regulator the way that there's, like,ta mo and currency regulators, that would cut across facebook and snapchat and everything else on the internet. i actually think that could be a more sweeping and way of going about it. >> zuckerberg himself could also be appointed designated compliance officer according to politico which would make him programly accountable for how facebook handles the issue. this comes amid growing demans for federal privacy regulation ahead o stringent california privacy laws going into effect next yea europe privacy regulations have already been in place. this is impacting society in a way that we ve to thin really hard about and it doesn't mean that regulators can't do good regulations and they're regulating banks and chemicals and automobiles, and it works out over time.

it's just it's got to be done io a very thtful way and it's coming whether they like it or not. >> both facebook and the ftc saying no comment on this report. or "inightly business report" i'm julia boorstin in los angeles. today beyond meat madets wall street debut. the company makes plant-based rgers and it's the first vegan company to indicate to go public. they are in the alternative meat market. shares sizzled rising 160%, but what comes next? aditi roy takes a look. >> beyondea is hot. at the end of the trading day, the company was worth just under billion, but it's not the only player in fake meat. competitor, impossible foods is valued at just under $1on bil soon you will find the impossible burger at all restaurants and it is already in 7,000 stores worldwide including

robin and white castle chains. beyond meat is available at retaers including kroger, carl's jr. and del taco and they're goingfter the meat industry. beyond meat's ipo comes as u.s. sales of minute-based meat jumped 42% between march 2016 to march of 2019 according to nielsen. beyond me's investors say they're tapping into america's changing taste? obviously, there's been a secular shift in health andne we. people want to feel better about themselves. >> traditional meat companies are taking notice. ty foods recently sold its stake after announcing the products. the companytes inv in another potential competitor, memphis meats also backed by cargill. it used starter animal cells in uta lab, those products have got come to market and while

beyond meain is still los money and could keep losing money for a while. its ceo says investors havero appetite for the long game. >> it makes sense to make people do it now and reap the benefits later. >> in response, coo david lee tells me there have been a t of high fives in his office. despite the fact they're a competitor, there's been a rising tide in therotein industry. i'm aditi roy, san francisco. >> it's time to take a look at some of today's upgrades and downgrades. qualcomm was upgraded t buy from neutral at bank of america merrill lynch. pe analyst cites the rollout of 5g. thce target is $105 and the shares rose a fraction to $83.14. estee lauder was downgraded to sector perform from rbc capital. the analyst questions some of the momentum is. sustainab the price target is $178.

the stock closed just below that level at $170.25. still ahead, the bizarro world of texas and politics. ♪ ♪ ♪ ♪ some positive news for homebuyers. mortgage rates fell in the most recent weeks, snapping a four-week of increases. according to freddie mac, the average rate on the 30-year f

side 4.14%. a year ago it stood at 5%. high home prices along with strong demand have today'soung homebuyers moving to cities you might not expect and mean a boom for local economies and home values in those markets. diana olick has more. >> madison wisconsin is suddenly teaming with millennials, garec rome just bought a house there. >> when you're walking around madison downtown and going to coffee shops you seeop young all over the place. madison ranks among the top markets for millennials thanks for itsou share of red dents and millennials moving in according to the new survey o the nationa association of realtors. three out of four recent tranlants to madisonere millennials and they've mostly stayed in the area thanks to a new tech economy >> i think one of the principal dustries is technology. we have epic systems in verona and i work in a tech c spany in thare and it's really cool to be able to be involved in the

tech sector while still living in the heartland of wisconsin. >> other surprising new millennial metro, okloma city grand rapids, omaha, durham, north carolina, el paso and salt lake city. in the majority of the top ten market, home prices are also generallylower. based on average income, millennials in these markets can afford to buy one out of every four homesisd for sale. in oklahoma city they can afford 30%. by comparison, millennials can afford just 10% of the homes in dallas, 13% in boston and 2% in san diego. >> while young people tend to move first to bigger cities in d.c., today's higher prices are pushing them out and that may be now why they're not just moving to, but staying in these smaller cities, buying homes and changing the local. economi >> i've had an influx of millennials moving into the area in the past yr or so. >> real estate agent christopher

ivigler has in madison all his life. >> it is surprising to see the city grow into what it has become, but it's starting to make more and more sen just cause of all of the tech jobs that we're offering, the uw camp us that we have and just the amazing culture. >> and all those affordable cohomes and of se, the millennials that move there, the pricier the homes will become. for "nightly business report", i'm diana olick in washington. >> tesla looks to raise some cash and that's where we begin tonight's market focus. after posting weak quarterly result, it uld seek to raise $2 billion in capital through new equity and debt. elon musk also intends to buy $10 million worth of tesla's stock in that new offering. today's sharesere up more than 4% to $244.10. caterpillar is raising its quarterly dividend 20% to $1.03 a share and the company said it would hike the dividend everyhe year for next four by at least a high single-digit

tpercentage. ill also increase stock buybacks on a consistent basis and the shares slipped more than 2% to $135.17. dow chemical posted a decline in first-quarter profits. the ceo fls his company has been resilient since the break up of dow dupont. >> we delivered 125 million of cost savings in the quarter and th first 40 million of the cost savings of the dow dupont separation and we're off to a good stock there. so all in all the portfolio performed well and in most cases better than our peers. >> shares fell more than 6% to 52.70. strong sales overseaspe h underarmour post better than expected results. the retailer saw its international sales grow 12% and northmerican saleslipped as it battled heavy competition thom the likes of nike and adidas. company raised its profit

outlook for the year and the shares rose more than 3.5% to 2.82. the ceo of engineering and construction firm fluor is out. the resignation comes as the company posted surprise quarterly loss and weak full-year earnings guidance. the stock lost almost a quarter of its value closing at 29.72. tax day may have come and gone, but people are still talking about the impact of the new tax law, especially in some high-tax states. as you probably know, those payers are notble to deduct as and as they once wer they're looking to change that. their proposals are putting them in an unusua position. . you could call it the bizarro world of tax policy. a wrinkle in a new tax law will fight for lower taxes on the wealthy andli repns working to preserve a tax hike.

democrats in theteouse and sere rolling back the limits on state and local tax deductions. e cap now at $10,000 has led to big t increases for top earners i high-tax states like new york, new jersey, california and illinois. representatives lauren underwood and sean caston of illinois have a bill that would increase the limits to $10,000 to $15,000 for single filers and f30k joint filers. it would also index the cap to inflation. underwood says, quote, my legislatio would alleviate the bu burden for mid hefl cladle-clas families. middle earners would see zero benefit from the change ahe biggest change would go to the top 5%. the reason the top earners will take the biggest deduction and a separate bill from representative big pascrell and bob menendez from new jersey would exlimb nate the cap wo

entirely and id roll it back to 39.6% from the current 37%. the tax foundation saying the plan would reduce revenue by $532 billi over ten years, and those in the top 10% would see the biggest gains. some democrats admit the bills would mainly help the wealthy apd said the unfairly targeted blue states. >> parts of the tax bill was politically motivated and when they were lookipa for ways to for the corporate tax cuts and the estate cuts and benefing extremely rich people, they singled out blue states or hunted osets that disproportionately affected those in bluetas. >> none of them have much of a chance of passing the president or the senate, but one choice for democrats is they ln wait un the cap expires in 2026. for "nightly businessreport." i'm robert frank. >> when it comes to taxes many in the democraticarty are

calling for increasing rates on the wealthy and 2020 presidential candidate amy klobucr has different take on tax fairness and she explained it to john harwood. >> the first one is to make sure that we have fairness for workers so that they can afford things. say the taxnkode. i t the republican tax bill went way too far. you look at the corporate tax rate. i supported bringing it down some, but it went way too far, down t 21% and if you went down to 25% you get $100 billion f every point that could be used to pay for people's roads and bridges a those kinds of things and transit? you want to take it to 25 for the inastructure bill, i believe, right? >> right. >> two more points for yournt retire bill? >> you could also look at part of that for that and you can also look at the buffett rule of being a $14 billion and capital gains taxes, a you might want ro make some dispensation that

people hold it a longer period of time so it helps. you've got to do something witha that becauses hundreds of billions right there when you do something about the monopoly if you bring money in. >> your retirement bill takes it from 37 to 39.6. is that highenough? do you think that's where it should stay? >> i would look at what the rate iss but thatn example. obviously, i would want to go back to where we were, at least where we were before trump came in, yes. senator klobuchar capitalized and while she supports the system, the american economy nee needs checks and balances. coming up, a way to help fight crime and money. >> for law enforcement this is a game changer. i'm rene solomon in kentucky. coming up, what it is and why it could revolutionize police investigations. ♪ ♪ ♪

>> a juroday convicted insys therapeutics founder and four former executives of racketeering and other federal prosecutors accused them of bribing doctors to unnecessarily press krcribe the painkiller, something that helped fuel the opioid epidemic and insys is the biggest executive to be tried in a case related to opioid abuse. crime fighting is being modernized and like most everything els technology is laying a big role and it's getting its start i frankfurt,k

kent rassel solomon has our story. >> for more than 30 years police labs have beensing dna to help solve cases, but the technology is time consuming and expensive. now law enforcement across the nation is testing out a new technology that could completely change crime sol wng asknow it. >> let's be clear. this is a game chanr. >> the traditional process bens lear in this lab and there are four more steps after it all of which happen in different parts of the building. >> with this new device, everything happens inside this box. >> we're not doing some kind magical chemistry inside a magical box. we're using the same chemil approach in the labs and we just automate it and we've made it faster and we've mad it so humans don't have to handle it. it was a sexual assault kits and we're already hearing from all around country.

>> 27 states in just the last few weeks. supporters hav t called device revolutionary. it's not without its limitations. you have to have a very good sample in order to run it through the system to get a gool pr and if it's a trace amouod of blo or semen, you're not going to get that. critics question the can collection, storage and usage of the dna, but dr. sheldon says it's essentially than a finger point. >> it says nothing about somebody's appearance and nothing about somebody's behavioral status bod it's as impersonal as you could get. >> itts cbout $2100 per sexual assault case for the conventional testing. it costs about $24.50 for rapid dna and though she expectsno come d over time to eventually be cheaper than the traditional method. would this be outar on ther scale for all kinds of crimes in kentucky, that would be up to $7 million a year. >> the time is money and the

time that it saves us will actually balance out with the cost of the ants because the hours i have to pay peopleha versus it costs to burn it. >> no longer are we faced with six month, nine month, 18-month dela processinglt an ass kit just to come up with a potential suspect. now we have tecology in front of us that literally produces that th 90 minutes and that turnaround time for i us within five days, we may get the opportunity to put a name to a potential suspect, yes, that's exciting and groundbreaking stuff. >> while it is growing around the country, a spokeswomath for fbi says they're taking a slow and measured approach as they roll out a rapid dna pilot program. meanwhile, in kentucky, they're verifying all rapid dna cases

and the existing dna testing and others tell us there's no turning back now. >> we can attack 21st century problems with 21st century technology. >> for "nightly business report" i'm ra hshg el solomon from kentucky. >> the dow fell 12 points and the s&p 500thlipped six. 's it tonight. i'm sue herera. have a great evening. we'll see you tomorrow. ♪ ♪

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