this is nightly business report with bill griffeth and sue herera. go away may. stocks post their fir monthly decline of the year after the white house threatens to impose new tariffs on one of our most important trading partners. >> hitting the brakes. yet auto industry could be a casual tee of the trump administration's new trade fight with mexico. looking for safety. ou market monitor has some stock picks he says can weather this latest storm. those stories and much more tonight on "nightly business or report"his friday, may 31st. good evening, everyone, and welcome. stocks fell sharply capping a brutal month for the market. today's declines were driven by trade tensions not b u.s. and china, but with mexico and that's where we begin

tonight. ent trump rattled investors worldwide with a tweet threatening tariffsann mex imports beginning june 10th. the tariffs would start at 5%,y potentia rising to 25%. the president said they would be in place until illegal immigration across the southern border was stopped. that surtise thr sent stocks sliding. ones industrial average fell 3254 points to fall below 25,000. the nasdaq was down 114 and the s&p 500 slid 36. tausche reports tonight from the white house. >> a frustrated president trump took to twitter to announce new tariffs on mexico as a tool to crack down on border crossings. the greenight with theop white house attorney despite what sourcese say wer objections from his top trade officials. ambassador robert lighthizer and treasury secretary steven mnuchin. peter navarro suggested mexico tariffsep up before the go into effect on june 10th.

>> i would suggest to investors to look athis calmly, look at what we're trying to do. this is actually a brilliant move by the president to get mexico's attention, to get them to help us. >> mexico's president lopez obrador says the u.s. solve problems with taxes and the minister flew to d.c. for negotiations with u.s. officials and key lawmakers on capitol hill were ctical of th move. chuck grassley called it a misuse of authority and one that uld seriously jeopardize passage of the new trade agreement between the u.s., canada and mexico. it could also have broader consequences for uade relationships. >> basically mexico and china compete. when mexico wins, china loses. when china wins, mexico loses and the one that won the most is presidennp xi g. >> it's been tied up in a protracted court battle and aha similarenge could await this order. the u.s. chamber of commerce,

lone of theding business groups here in the u.s. has said since finding out abouthese proposed tariffs it has been working non-stop to explore potential legal options. for nightly i business report kayla tausche in washington. >> and there is late wor tonight that secretary mike pompeo and mexico's foreign inister will meet washington on wednesday. >> clearly the u.s. and mexico have strong economic ties and it is one of the lgest trading partners for years and imports from that country totaled $437 billion just las year alo and the major goods that come across the border include autos, computers, oil and vegetables. >> and that is why shares of fiat chrysler, general motors and ford all fell during today's sessio 15% of the cars and trucks sold in the u.s. come from mexico and a tariff goes into effect automakers will be faced with no good choices. phil lebeau has w more. n gm decided to build the new chevy blazer in mexico, it

seemed like a no-brainer. after all, mexico has lower labor costs than the u.s., driving strong profitarns for in-demand models like suvs, but blazers from south of the border will not be as profitable if gm has toay 5% for every one it brings into the u.s. so what shouldhe automaker do? president trump tweeted in order not to pay tariffs, if they start risi, companies will leave mexico which has taken 30% of the industry and come back to the usa. don't expect that to happen. the number of mexican-made autos imported to the u.s. hit almost 2.7 million last year and almost all coming from multibillion-dollar plants that have been locked in place for years. >> largely, theseis dns pre-date donald trump and that plant will be in place for 30 or 40 years so it will long outlive him as well. >> so if as trains bring

millions of cars into the u.s., should automakers p the 5% tax which would kill profit margins or do they pass it along to the ustomer in the form of higher prices which would hurt sales and how would car buyers react if prices jumpf by hundred dollars. >> i think for consumers it's about whatheir monthly payment is when you think about their affordability, and what they can pass on and what they can't, >> for now, the auto industry's trade association saysul tariff not be good for business. as for individual automakers, they're not commenting specifically about the president's tariff threat, but they've beenn d this road before with president trump and they're hoping that this time the preside does not follow through and institute a tariff. phil lebeau, nightly business report, chicago. >> it's not just the automakers and the cpanies that transport goods across the border like the railroads and the truckers. they also had a rough day today and the concern there is thaten

heig dispute with mexico could further dampen volumes. they've been already hit by the trade war withfr china. k holland has that part of the story for us. >> 85% of the nearly $350 billion of goods imported from mexico into the u.s. last year came in on trucks and trains and the industries. expect to see a major impact if tariffs go into effect on june 10th. there a significant implications and mexico is $350 billion, of goods and mt of that gets put into a rail or a truck and the implications for o the transport sector, vis-a-vis freight close, frankly are extremely negative. >> the biggest impact today the rails that operate on the west coast. kansas city southernar has a l operation in mexico. citibank says about 16% of its revenues could be at risk and union pacific says 5.5% of its

overall volume goes from mexico to the u.s. and trucking is expected to see the biggest impact. >> trucking rates are directly related to the supply and demand indicators of the trucking industry a giv cross-border mexico volumes are a significant absorber of capacity to the extent that they're impacted by the escalating tariffs and that woord be negative f trucking and trucking rates for sure. >> those rates have fallen 18% since last april and that'sau largely bec of the trade war with china and how it slashed u.s. exports cutting on the goods exports areli h. it could put smaller operators out of business. for nightly businesspo , i'm frank holland. >> following the new terror threat, s se of walleet's major banks are reassessing their outlook for and j.p. morgan is calling for the fed to cut rates twice by december and barclays is cutting .75% by the end of the

near. >> and c leaders are watching closer to see how the t terror t tariff threat with mexico plays out. eunice yun is in beijing. j . >> today the chinese foreign ministry pointed out that the chinese tariff threat on mexico make sure no country is safe from the u.s.' bully policy. china is not the only victim. president trump'st threat against mexico helps beijing push it narrative t china is a stable leader compared to washington and chi is also likely pleased because they had mca wary because of the that the u.s. would use a clause to undermine beijing's own trade lations with canada and mexico. the cause is with limiting ties to the economies considered non-market. in addition, mexico had been seen as ainner in the u.s.-china trade war. american companies have been talking abou shifting

production from here to there with tariffs on cnese goods so high. as for the trade talks, president trump's announcement probably won't instill confidence among china's ney gosch yarts and a trade deal will stick. a told a seminar in beijing today that he didn't expect to ae any major progress even if presidents trump xi meet at the g20. instead, president trump's threats against mexico will only appears tffirm what be china's current strategy, to wait things out. for "nightly business report," i'm eunice yun in beigi. >> the government is creating an ofeliable entities list foreign companies and people that it believes interfere with chinese businesses. the names were not revealed nor did china say it would punish those on the list. as you know, tariffs on $60 billion in u.s. goods in retaliatn for the duties on

$200illion worth of chinese products will kick in tomorrow. >> the u.s.-china trade war may a taking a toll on the chines economy. factory activity in that country has weakened more than expected. new orders fell inay for the first time in four months and export orders decline for the 12th straight month. >> a new repor from deutsche bank says the trade war so far has cost t u.s. stock market $5 trillion in foregone equity returns. the report explains that the tariff battle prevented a recovery in global growth and is keeping equities rangebound. >> time to take a look at some of today'supgrades and downgrades. actually, a couple of downgrades to tell youbout. uber was at neutral at atlantic e quites. the analyst cited's competitive landscape in the business and the price target $52. the stock rose to $40.49.nz kraft h was upgraded to

neutral from underweight at piperafay. many risks appear to be priced in the stock already and he does remain cautious on the company's outlook overall. the price target $31. that stock rosect fnally to $27.65. still ahead, is it time to play defense when investing in ♪his market? ♪ despite concerns over the economy, consumer spending solid in april. personal consumption expend itchures, a measu of household spending increased .3%.

driving all of that spending was .5% spending in income, the best gain of the year. both of these figures were bigger than what economist his been expecting. >> as we mentionedhe three major indexes posted their first monthly declines of 2019 even as volatility indicators spike. oil, by the way, fell by 16% in may. that was its biggest monthlyin decline november. mike santoli has been covering the marketseor us from new york stock exchange. you know, how much of a surprise was this sell-off? the old adage is sell in may and go away. >> that's exactly right, phil -- bill, and i do think we had one of the strongest four-month starts ines dec through april and the s&p 500 up more than 17%. i do thinkome kind o pullback was probably expected by many investors. i dot think the intensity of the decline and the fact that there was no relief along the way and every week was downnd of course, the tariff news made it about a little bit more than

ving back gains and having plat profits and it became about how t world is going to grow for the rest of this year and to me it reflected in the market as peaps i expected the cut the trade issues. >> the trade issues are still with us and what are you hearing with the trade war still in place is the selling expected to continue or do you think we're little bit and ready to bounce? >> there are some indicators that say just because it's been lopsided to the down side in the month of may, perhaps we shomld be in for relief and what happens is when the market is under pressure, one out of every six stocksn the s&p 500 is below its december low so there has been a lot of damage below the surface and it takes more bad news to keep the market going lower in that. environme i do think the issue is seasonally, when you've had a weak may after a strong four-month start to a year, june

bends t better and seven out of the last nine years in that condition you did get little bit of a bounce and i do think it's important to remember that are stillcture issues with us and i think the market craved some kind of confirmation that the u.s. economy remains resilient to a lot of these threats. >> very quickly, mike, what doe you mn wall street who are calling for rate cuts before the end of the year. >> they're capitulating to the message of the bond market. we have not really heard from fed voices themselves that they're really moving very fast in the don of considering rate cuts in the nextthew m and the market reaction has been relentless that the economists are saying maybe the bond market knowsetter than we do. >> mike santoli at the new york stock exchange. have a good weekend. >> thank you, bill. after a day, week and month like this you might be thinking of investing in defensive sectors which are areas of the market that tend tb performter than the bond market during rough patches. dominic playsefense for us.

with the trump administration's decision to pursuing a new round of tariff targeted at mexico, markeer found anoeason to move low and are that is relatively more stable into the spotlight yet again. stocks and companies tied to things like utilities and household goods have long been se being less exposed to extreme bouts of stock market volatility and relative outperformers in times of market stress. >> on the equity side, we do think we can experience some sort of rebound from these levels and we don'tave a very high conviction in that and as a result, there's nothing wrong with consumer s what we'rible pro soogy is our portfolios and it seems leak a game an, but this past week the utili sector matched the decline on the broader market and it actually fell by more th m thearket. one reason may lie in theva

ation of these more defensive sectors. both utilities and consumer staples are valued at more than the overall market meaning traders and investors haveo make a decision about whether buying into defensive sectors is worth itiven how much more expensive they are. for "nightly business report" i'm dominic chu. it's time for the weekly market monitor who says t investors nebe more cautious than in any other time since the financial crisis and he has names for two stocks and an exchanged trade fund which could help keep your portfolio safe. we welcomeback phil ceo of the asset management division. good to see you. having me backr >> at times like this, when investors wantas to buy ty securities and want to buy the shorter trading maturities and you have the exchange-traded fund. >> we've all made a lot of money. take some profits andut it in

jpsd, paying over 2% yield with it and that means it gets your money back real fast and it lets you wait around, in other words, be paid to wait aroundha ask that'syou want to do when volatilities spike like this. >> you also like costco. it has a membership fee scheduled and that gives it se recurring revenue, obviously, but you also want to think about why? >> right now you kind of want to hunker down because consumers are gnfully employed. >> so so that means the consumer is active. not wha do they need to buy? costco at the core of it, where will we defend and keep earning moneom it's thisnies where we will need to buy things and that's costco. >> the other one is walmart. you likeon tha is it immune, though, for the tariffs? >> here's l what ie about walmart and they're going through the massive

transformation and they're the only company that will directly compete with them and they have mmitted to go into a digital company and they've still got great brand recognition. >> so you still have the need to go to walmart and the strong consumer, butthe end if you can catch this transformation and get it right so a bit of a mble. we paid a nice dividend and get upside to the stock. it will benext week critical to the markets because we'll get key economic data and the jobs report as well, but why do yous say that invest need to be as cautious since 2008? what is it that is that worrisome for you? >> can't earningsetetter than where we are? we had last year double-digit earnings growth this year they're flat, up 1% a i'm really concerned that that will be the continuation for the rest of the year. we're seng a real erosion in earnings power. the consumer may not be strong enough to blast throuhe tariff issues and they're out

there and not going anywhere any timer soon. that reason, raise some cash, get conservative, wait around and see how this all plays out. >> phil with home and asset management. always good to see you, phil. thanks for joining us. >> for more on his picks head to our website at > nbr.com. >>a big quarter for big lots nd that's where we beg tonight's market focus. >> the discount retailer exceeded analyst expectations. sales at stores open at least a year roseny and the com raised its full-year outlook. the company jumped to 27.60. speciay retailer janesco reported better than expected earnings and revenue. the apparel and accessories retailer is fused on footwear. it carried over into the new year. up 11 force $44.88. including its -- i thought the

deal comes as it takes an icreasing share of the digital market a drops 2% to 1,775.07 you may have noticed more cbd product available for sale the days. cbd is a cannabis extract that does not contain thc, that's the psycho active component of the cannabis plt, but cbd has quickly grown into a billion dollar business and the fbi is trying to get a better handle on it so today the agency held its first public hearing on the matter. aditi roy is there for us. >> when the farm bill passed late last year hemp was legalized in the u.s. the result was a flood of cannabis-derived product, the p mostular of which isd in the form of things like lotions and oils, but today the fda's iting commissioner made clear many hemp-based cbd

products must go through fdaef approval bore they can land on u.s. store shelves. agency officials heard from company executives and advocacy groups andesrchers. some retailers like walgreen's and cvs toe the line stocking th thetores with less controversial cbd products like topicals, like enthusing food and beverages which still fall under fda scrutiny. others lick walmart and tag vet shied away from carrying cbd prishacon theging and creative giet line. scott leeb says there is a lot to consider. >> it's derived from cannabis versus hemp and what is derived from cannabis could have high levels o thc in it. that's not stopping from companies from betting on the ke

cbd m which piperfr jafay estimates could reach $15 billion in the nextive years canopy growth will plant hemp in seven states including california,ck kentuand new york. ceo bruce linton said there is a myriadtif possibilies for future cbd products including a sports drink. i'm talking abo a beverage when you go to the gym and you drink it, it should havthe tention of making it so after the gym the next day you are less sore, andan if it do that then we'll all be a bit more fit. >> first, the companies are waiting to hear from the fdz on those regulations. it is unclear, a advehicle assy group and it's working for lawmakers who is a more efficient pathway for cbd products. for nightly business repor i'm ar adi roy.

>> improving your mood at, of all places, the airport. ♪ ♪ here's a look at what to watch next week. on monday apple hosts its developer's conference which will fus on the latest software for its phone, macs and apple watches. t on wednesd fed releases a beige book which is an anecdotal look at the economy across the country. ony the government releases its monthly employment rehart. that is to watch for next week. >> on this tough market day, we thought we would end the show with something a little bit lighter here and it's a story about ausiness that cares how you feel and believe it or not it takes place at one of the

nation's busiest airport jane wells takes us to l. ♪ ♪ >> los angeles international airport, traditionally nobody's the airport now lets you tell it how you really feel and more on that in a moment. lax was a gem of commercial aviation a decade ago and with a record amount of peopling passing through here, it is a mess. it iding the way with a 14 billion overhaul. >> the united states ilathe first of modern aviation, and our airport should be the es that other airports around the world aspire to be. >> by 2023, lax will have a people move tore reduce traffic and how will it modernize? >> how will this happen. >> it's agreed to take on some debt and on every airplane we

buy right now it's $4.50 and that's not gone up in 19 years and the airpo would liket see it rise. it has been the same in naesh years and youan imagine the cost of what it was 19 years ago and what it costs today. >> have you seen these machines and they're popping up to register happiness i real time. lax is testing them outside bathrooms and they're cleaned regularly. happ or notith 30,000 terminals across the globe and more than a billion button pushes so far. its main investor is north zone and the packer for spotify. >> it's retail, healthcare services, hospitality and many, many more. >> you think most responses uld be negative, right? wrong. >> what we have learned is out of roughly 80% of the people ave good feedback. >> and maybe more surprising airport customer satisfaction is up and lax has risen f m100th

place to 69. for "nightly business report," lljane lax. >> before we go, here is a look at the day's number on wall street. the dow fell 354 points to fall below 25,000. the nasd was down 114. the s&p 500 slid 36 and may was the worst month for the market so far thiyear. that does it for "nightly business report i'm sue herera. thanks for joining us. >> i'm bill gffith. sh the reset monday. we' have a great one. we'll see you monday.

>> this is "bbc world news america." >> funding of this presentation is made possible by the freeman foundation, and judy and peter blum-kovler foundation, pursuing solutions for america's neglected needs. >> wow, that is unbelievable. ♪ >> i'm flying!♪ ♪ >> stay curious. ♪