♪ ts is "nightly business report" with bill griffeth and sue herera. ♪ the tweet heard around wall street. president trump and china's president xi say they will meet at themit next week, sending stocks into rally mode. a> california dreaming, o trade deal. why the golden state has a lot riding on the outcome of those talks th china. and the color of money. facebook unveils its own digital currency, making a big push for it to go mainstream. but how exactly does libra work? those stories and more tonight on "nightly business report" for this tuesday, june 18th. and we do bid you a good evening, everybody, and welcome. sue is off tonight. we begin with trade and talks that are back on the calendar. the leaders of the world's twomi

largest eco are now scheduled to meet next week at the g20 summit in jand it was all investors needed to hear and stocks took off today. the dow industrial average rose 353 points to 26,465. the nasdaq added 108, the s&p wa 2 up but it wasn't just trade that drove today's big rally. bob pasane is at the new york stock exchange. >> stocks were in full mode fuelled by high hopes of trade talks and easy money across the globe. that's what moves things these days.ar futures first high around 4:00 a.m. eastern time. european central bank president mario drahgi said there was a case to be made for more economic stimulus in europe if the economy did not improve. that sent a signalo the markets more easing could be ahead. itent the euro down against the dollar. then president donald trump tweetedut he had a very good phone conversation with chinese president xi jinping, and the

two plan to meet at next g2week summit in japan. that one tweet sent the dow up 150 points in less than ten inutes with trade sensitive groups, the usual names, semiconducto stocks, mining stocks, all outperforming. the market aan taking a wai see approach as the reserve makes a move with many expecting the fed to lay the ground work ior a cut july. right now the mart isutting in an 80% chance of a cut. microsoft rallied to a all-time high and worthg notlmost a quarter of the gains we have s&p 500 have come from four stocks, microsoft, apple, amazon and facebook. this year, onef quarter the gains to the s&p from those four stocks. what group was left out of the rally? financial services. some of the names like mastercard and visa, which have run up big this year, they were down amid news facebook is launching its own digital currencyalled libra next year.

crypto experts stress unlike bit unsel the libra will be backed by real money. for "nightly business report" i'm bob pisani for the new york stock exchange. hogan joins uo look ahead to the two biggest issues facing ehe market right now. that would tomorrow's fed meeting and next week's g20 summit. art, of course, is the chief market strategist at national securities. welcome back, mr. hogan. >> thank you for hav tg me. guesses are all over the board for the fed meeting tomorrow and the decision and jerome powell's news conference. you want to add your guess to that? >> bill, iziis a haven't i don't think i have seen such a spread in terms of interptation where the fed stands right now. some of my counter parts t we will raise two times this year, some think not. i tnk -- >> you mean cut, right? >> i think we cut one time. i don't think it happens any eme soon. i don't think tlaugh evidence in the economic data stream for j. powell to throw mormon terrie policy at the

economy. i think what is happenihere, and i think you hit it on the head. two things we are concerned about, tnade with c and monetary policy and they're intertwined. the tricky part is the better trade gets the less likely you will see monetary policy kicking in and myetary pol in effect has to come into play because trade policy is not doing well right now. they're locked at the hip. >> sohe next week meet at the g20 summit and presumably jump start theal once again. does the wall -- does wall street care about thef details a trade deal or do they just want to see a handshake? >> they want t see a handshake. they want to see movement forward. it's been 45 days since we stopped talking to china, may 3rd. we went in reverse. trump tweeted out he has escalated, yknow, from 10% to 25% on the tariffs out there already, and that was step backwards. going into that weekend, that was the time frame where we thought we were on the threshold of getting a deal done so it was usmajor disappointment. the market obv reacted and we've been on the holding

pattern for 45 days with the hope g20 was the pivot point. now we know there will be a movement. that's the important thing. we are moving forward. s i think bothes of the equation want to get something accomplished. sly the sensitivity is around the detail but i don't think either side wants to be in ay mutua destructive long-term trade war that hurts bot onomies and certainly the global economy. >> indeed. it will be interesting over the so. week o art, good to see you again. >> good to see you. >> art hogan with national securities. wall street may had had strong reaction to news of the trade talks with china, but in washington there's still a lot of work to beone and a lot at stake. ylan mui has more. >> here i washington advise rs for president trump a getting in touch with counterpart in china to lay the groundork for g20. >> people are starting to deal. as of tomorrow the teams are starting to de so we'll see. >> the trump administration is threatening to impose tariffs on another $300 billion in chinese

goods il this falls through. that would mean basically everything the u.s. imports from china would be taxed. that worries chuck grassley, thw iowa republica heads the powerful senate finance committee. >> two years ago i you talked to me i would say, well, the president woulbe crazy if he puts tariffs on china. now, as i told him, i admitted to him, i knew cna wouldn't be negotiating the big things they're negotiating if tarifee hadn't put on. if they're a tool it is one y'thing, but as a policy t catastrophic. >> but at a hearing today, trump trade ambassador told the mmittee that talk alone won't be china in line. >> it is a long history of them violating the norms of intellectual property and similar norms. -- andforward and n making promises and not keeping their promises. so we're in a position where we viewurselves as having the most serious problem you can face in the trade space with

nothing less than the jobs of our childre on the line. >> china is not the only trade balance.ing in the the white house is also negotiating with japan and the european union. most importantly, it needs congress to approve the new trade deal with canada and mehico. >> just of all of the number, particularly democrats f that said is no good for the country. this is an improvement on nafta. how a can democrat vote against it? >> the administration has already begun reachin to democrats in hopes of passing the deal by the end of the bummer. for "nightlness report" i'm ylan mui in washington. and states are also welcoming news of tralk especially those that rely most he havely heavily on chinese markets. high on the list is california which does about $175 billion in trade with that country a year. sct cohn is at the port of oakland for us tonight. >> a importers exporters in california are resourceful, that's for sure.

one year intode the t war they're still finding ways around the tariffs. so at the port of oakland, which orecializes in container ships, agricultural e in the first four mont of the year are actually up by 12%, including a 5% increase to china. >> they are finding other markets. they're tapping other things. they're being creative where they're sending their products countries >> countries like taiwan, korea and vietnam. but with tariffs rising to 25% on some gds this month, they know that can only last so long. >> 25% we've heard from most companies is a level that companies just simply can't absorb. >> the biggest impact is on products trading directly between the two countries, like agriculture, chemicals and electronics. states that deal i those commodities have the most to lose. so in 2018 louisiana saw a 61% drop in the value of its exports to china, 34% in illinois, and about half a percent in

californni. but calif senator dianne feinstein says the numbers only begin to t tel story, writing in a letter to u.s. trade r representatiert lighthizer this week that california companies are warning the tariffs areamaging their competitiveness and in some cases threatening their existence. back at the port of oakland they know their good fortune could n out at any moment. >> the unknown and the uncertainty is if this continues and tariffs impt these volumes in the future we could see some falling off of o volumes. >> reporter: a breakthrough between presidents trump and next week wouldn't necessarily turn things right back to normal. some customers on both have already found alternative markets and could be slow to switch back. one early lesson from this trade war, the impact is surprisingly difficult to gauge. for "nightly business report", scott cohn, oakland, california. as we talked abo earlier, the other big focus for the market right now is the fed.al today the cen bank

policymakers began their two days of meetings, and as they t decide on direction of interest rates our steve liesman surveyed strategists and money managers about their outlook fot rates a potential for a recession. >> growing concern about economic weakness in the u.s. and abroad along wit increased rade uncertainty has responded to the cnbc fed survey ratcheting up their chance of recession. it now stands at 30% probability of recession in the next 12 months. that's the h hest in eight years for the survey. just last month it was at 22es as at of this increased concern about recession, the expections for rate cuts in 2019 stands at 67%. 22%e of respondents think the fed will remain on hold. 11% actually forecasting a rate hike. on average the group is forecasting just 25-basis point rate cut from the federal reserve, but of those who think ey will cut rates, they think there will be two this year.

when will thisappen? 14% think the fed might announce a rate cut as soon as tomoow, but 29% say sometime between july and september, 23% say after september. why will the federal reserve cu t th reason is a weakening economy followed by inflation running bel the fed's 2% target. some believe the federal reserve will be reducin response to the inverted yield curve where short rates are above longer-term rates. pressure from president trump on the federal reserve to cut interest rates is seen as a small factor. f chief u.sancial market economist at oxford economicsn writes response to the survey, the fed will signal if it stands ready to down rates. but it does not want to force it with slower economic data. it is said we have marked down r forecast because of the uncertainty surrounding trade negotiations. even if no tariffs are posed on mexico and the u.s. reaches a trade deal with china, there's

the uncertainty another shoe should drop. the trouble with forecasting the economy and then fed steps part from the trade uncertainty. presidents trump and xi now appear as if they will meet next week in july. aositive meeting could remove concerns about new tariffs which sparked the lest hue and cry for rate cuts to begin with, or it could also go the other way. for "nightly business report", i'm steve liesman. e have been following the housing market closely today and today an important gauge declined, housing starts fell 9% in may, a steeper down point expected. but there was a bright spot. residential building permits which are seen as a sign of future activity rose lastinonth. fact, it was the strongest monthly rate of growth since the end of last year. time to take a look at some of today's upgrades and downgrades. oracle, we begin with tonight, was downgraded to neutral from out per at mcquarry research. she call comes ahead of the company's earnieport out

tomorrow. the analyst says that the business software company is underinvesting in its future right now. price target, $55. that stock fell a fraction to $52.90. kb homes was downgraded t underperform to market perform at raymond james. the analyst says the stock's valuation is too rich right now and margin concerns areun ng. shares fell more than 256today to $2 and bank of america was upgraded to outperform from market perform at bmo capital marks. the analysts cited the stock's valuation and the belief that consensus estimates for the bank are too low right now. pricearget, $37 a share. the stock rose more than 2% today, closing at $28.62. still ahead, the future of the in the south arts of france. i'm julia borestein heren

france. teaming up to tackle offensive contest, we will have that story coming up on "nighpoy business ". ♪ tab facebook today unveiled a digital currency called libra, set up to be a financial system using secure block chain technology backed by hard asset the social media giant lined upa mastercard, p and uber, and it is designed for ordinary users which faceboo says is one of the things that sets libra apart from other crypto currencies like bitcoin. >> if you want to compare libra th traditional

cryptocurrencies, first big difference is that typically cryptocurrencies ave investment cles or, you know, investment assets rather than being great medium of exchange. this is really designed from the ground up to be areat medium of exchange, a very high-quality form ofha digital money you can use for everyday payments and cross border payments, micro transactions and all kinds of different things. >> so how is this going to work? joining us with a quick tutoria on libra is ben fox, urban seni reporter at cnet. good to see you, ben. thank you for joining us. thank you for having me. >> like he said, a cryptocurrency like bitcoin is meant to be a store of value, something like gold. with libra, this is more of a transaction mechanism, isn't it? >>en yes. inal it works a lot like most any other digital currency where what you would do is take your dollars or any othercu ency, transfer them over into libra, put them in a digital walist.

one is called calibra. this is where itea changes. in of actually keeping them in the digital wallet and hoping the value goes up, thewo argume d be that you would actually use it for goods and services. at least that's what facebook is hoping to do here. >> and this i backed by a basket of currencies, right? theseer are for itional transactions as well? >> yes, arguably bitcoin and a lot of other could also be used for international transactions. you could argue that facebook is really trying to do what bitcoin wa hoping to , to create an international currency that kind of wipesway borders and boundaries and makes it much easier to do cross border transactions. so we will see if that actually comes to bear obviously. >> there are no -- at this point no banks involved in this consortium. so who is holding on to my money when i give it t who, facebook or somebody? >> so there is an aassociation, nonprofit association called the libra association that is going to be operating this, buthat's

a really good question. i'm kind of not entirely sure what happenso the mon when you do convert it into libra. even though theks aren't b involved, there are some very trusted names in the financial industry that will be involved including paypal, visa and mastercard. so it is not as if this is kind of a willy-nilly group that doesn't know anythbout finances. >> and, again, this is more, as i understand it, about peer-to-peerac traons. i'm not going to go out and buy a hamburger with this necessarily unless a mcdonald's or some other fast food change decides they're going to accept libra currencies, correct? >> that is entirely true, and i would probably say facebooks hoping somebody like mcdonald's would start accepting. lib the way facebook is trying to push this, they're saying ordinaryrd americans,ary people from all over the world can jump on the digital currency band wag and --

>> because of regulator hurdles, what do you think? >> that's possible. i think a l of the regulatory hurdles that facebook faces have a lot to do with the potential that it has aop my. so that is definitely going to be a consideration. as far as regulation related to cryptocurrencies, there really aren't tt man i'm not entirely sure what is going to prevent this kind of thing from jumping offgr the nd from that regulatory perspective. >> right. clearly a lot me questions than answers right now. we'll see what happens. ben fox ruben from cnet. us. ks for joining >> thank you. boeing lands a new order for its 737 max planes and that's where we beg tonight's marcus

focus. british airways parent company, international said it is going to buy 200 737 max planes worth $24 billion. the 737 max, as you know, has been grounded since march following two deadly crashes. boeing shares rose more tha 5 today to 373.96. kellogg isutng about 150 jobs. it is going to take a pretax charge of $35 milliona as part f revamp of its north american unit. the cereal maker is looking to slim down by selling iki c business which includes the keebler and famous amos brands as well as fruit snack products to italy's ferraro brook. kellogg fell tohiy. fifth bank is reportedly planning to shut down 44 branches in the chicago arex month. the chicago tribune says the move comes as a result of the bank's nearly $5 billion acquisition of mb financial. fifth third shares rose to 27.88

today. cvs is reportedlylanning make an offer for viacom. the "wall street journal" sayse retatives from both companies had preliminary discussions about a proposed deal. viacom's chief executive bob bacchus is believed to be the front-runner to become the ceo of the combined companies should it happen. cbs shares rote to 49.21. viacom was up to 29.81. one of the biggest challenges facingri advertisers t now is making sure their ads do not appear next to offensive content on internet sites. it has been a major focus of t annual cannes lions global festival attracting brands, platforms and media companies around the world. julia boorstin is there for us ♪tonight. ♪ >> reporter: at this year's cannes lion festival, brands and advertisers gathering here in the french riviera have aig

issue on their minds, offensive and inappropriate content that coulde running nexo ads. they're coming together to announce a new solution, the globalpo alliance for rible media, which includes the media buying agencies from all of the biggest ad conglomerates, the tech giants including facebook, googles, youtube and twitter, and 16 of the world's biggest advertisersng inclu proctor & gamble. what we will do together is establish common standards we can all abide by, very similar to what we've done on tv and in radio, and where we know we have control over the content ande know that there's control over editorial comments. by coming togher and having that, then we know that we can advertise in places that are afe for consumers and our brands. >> reporter: with the big ad platforms all here in cannes, this is the first time they and all of the other sides of the industry haveether to tckle issues rangiomng fogro c violent and offensive videos to content targeting pedophiles. with the goal of first tackling content that poses a threatyo

sociuch as terrorism, the alliances members say addressing everything from hate speech to misinformation will build trust by creating a new common stanrd and accountability. >> yes, i think this is the peter finch network moment or mayor the ban cranston network, i'm mad as hell and not going to take it anymore. the brands needo speak with their money and show what they're doing, not just moveip their but move their feet. > reporter: companies such as twitter that have invested in cleaning up trolls say it will be key for advertisers and twitter users going forward. >> common sense listening to our stomers and what isappening and us not looking to compete on something like brand safety. this is sothing that ultimately will help everyone succeed. it is important that we have trust in our ecosystem. in many ways i think it will be part of the a legacy that of the companies are laying for,ow you kn the future. >> reporter: and the future for the ad industry is not just innovative spots that break through the clutter, but also environments that are safe for

brands and users. for "nightly business report", i'mrs julia bn in cannes, france. and coming up, one company's strategy to get chinese consumers spending. ♪ beyond meat shares have gone beyond theirecent ipo price of $25 in a bay. today the stock briefly broke brough $200 a share before pullingk. now, at $200 beyond meat had a market value ofn more t

$12 billion, making it larger than 115 companies inside the s&p 500, including under armour, tiffany, e trade and whirlpool. finally tonight, the chinese government wants consumer spending to be a bigger part of that country's economic activity, and one of china's largest online retailers, to be at the center of it all. the company has created a spending holiday calle 618. that would be short for today's date, june 18th. in beijing for us tonight. >> reporter: like amazon and ilmart are in a food fight the u.s., jd and ali baba are in a food fign china. jd is building high-tech hesupermarkets like this customers can scan fruit on it r phone and trace where comes from. they see it as a consumer trend for 618. 618 is a mid festival. jd created it to get people shopping mainly online. it spans over 18 days.

the event is seen as a gauge of chinese consumption. consumer spending is a big topic here. the government has tried for years to get the consumer to become af bigger part china's growth to rebalance the economy away from exports and investments. the authorities have madereome pr but these days the consumption data isn't encouraging. sales of vehicles and smartphones are down. retail sales for may were a bright spot that followed april's figure which hit a 16-year low, this despite the government's stimulus measures. jd believes the brand is only growing. this is what one executive told me. >> the brand from the international market, china is still theirigst market. and they continue and understand the chinese consumer and continue to provide t product to the chinese consumer. i think should be not worried. >> reporter: officially unemoyment here is stable but with the slow down the weak stock market and the straight

war there's a lot of uncertainty and chinese he tend to save. even so t despi trade war, jd says for this year's festival the u.s. is one of t top selling countries and some of the most popular american brands are hasbro, apple and bud. i'm in beijing. let's look at thal laday on wall street. up 353 on the dow. the nasdaq added 108. the s&p 500 was up 28. tomorrow, the fed. that "nightly business repor tonight. i'm bill griffeth. thanks for watching. have a great evening. see you tomorrow. ♪ hi

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