♪ >> announcer: this is "nightly business repor with bill iffeth and sue herera. fresh record. the major aveges extend their rally ase much of th focus today shifted from wall street to washington. strike or no strike? the uaw and t big three automakers are entering labor talks. and mostgree it could get contentious. retirement strategy. more employers are offering roth 401(k)s. but are they right for you? those stories and much more tonight on "nightly business report" for monday july the 15th. and we do bid you a good evening, everybody, and welcome. sue is off tonight. it wasn't much, but it was enough. today's modest gains in the

stock market were just enough for the threeajor averages to eke out another record close. lately investors have been optimistic that federal reserve will cut interest rates later this month. but in the meantime caution i setting in ahead of earnings season when corporate america will say how slowing global growth and trade uncertainties are impactingbusiness. today the dow rose just 27 points. we're at 27,359. the nasdaq was up 14. the s&p gained a fraction. all of it enough for records. now, one of the biggest risks to the stock market may come from washington. if the debt ceiling is breached. as you know, the debt ceiling refers to a cap on the total amount of debt that the u.s. can accumulate. only congress can raise that ceiling to prevent a default. and once again it's tim for lawmakers to act on it. but as ylan mui reports now, a lot has tonet done very little time. >> treasury secretary steven

mnuchin sai congress are getting closer to a deal to raise the nation's borrowing limit. mnuchin said he has been briefing president trump daily on this issue. he's also been in regular contact with house speaker nancy pelosi as well as minority leader keviny mccar and senate majority leader mitch mcconnell. ideally they would do aye tw package that raises the debt ceiling and also lifts tde l spending cap. >> i thinka there ieference on both parties to the extent we can agree on the debt ceiling and a budget deal, that that is the firchoice. and i think we're getting closer. >> reporter: treasuryarned it could run out of cash at the beginning of september. and that'sha earlier expected because corporate tax receipts in particular have been so unpredictable. lawmakers are realizing that means they need to vote on this before they go on summer recess. the house departs in just two weeks. e senate leaves in early august. congress doesn't come back until september 9th, after labor day and potentially aftt the d limit deadline. and that's generating urgency in

washington to take care o this now. for "nightly business report" i'm ylan mui in washington. >> ed mills joins us nohato handicap happens next on this issue. he's washington policy analyst at raymond james. ed, good to see you again. welcome back. >> thank you for having me. >> what do you think?he ylan saysre working on possibly a two-year deal. that's sort of a symbolic or critical time frame, isn't it? >> yeah. so i think that no member of congress wants to take a tough vote this year and thenave to take another tough vote next year right before the 2020 and so i do think that the base case here is that theres a two-year deal increasing the budget cap and extending out the debt limit. i think the debt limit ultimately gets extended until march of br2021g it past the next year's election, past inauguration, give the new congress, whoever's in the white house, a couple of months to come up with the next deal.'s thhat is absolutely going to happen. the fight between now and then

is what the stock market's going to trade on. >> any more it just seems inevitable it gets raised anyway. it h to be or we default on our debt payments. take i's the give a the meantime? what has to be achieved before the votes can actually come up? >> if this was on the floor tomoow, it would pass. i think what we're really working on right now are those budget caps. right now congrs is still under the budget control act. this is the bill signed by president obama in th republican congress that put automatic cuts to the budge unless congress changed them. that's about $130li b this year and next year. just to keep level funding you need toea in those caps by about $250 billion. republicans areying to crease those caps but they want more military spending than domestic spending. democrats want moreti dom spending than military snding. usually how these get resolved is you agree to both increase domestic and military a same amount. we probably will see an increase

in these budget caps in the 0 to 500 billion-dollar range over the next two years. you have a deal, is bipartisan, it gets signed into law, we move on. >> all right. we will see what happs. ed millsith raymond james. again, thanks for joining us tonight. >> thank you. also in washington there are reports that a shake-up in the president's cabinet could be in the works. kayla tausche has more on that. >> reporter: president trump is considering replacing commerce secretary wilbur ross. according to multiple aides and outside advisers. commerce department oversees the census wasau and the described by multiple sources as the last major item on ross's to-do list. secretary ross and presidenttr p have a long-standing friendship. one reason ross has avoided thed prt's firing line before. but in his 2 1/2 years running the agency the president has been frustrate by ross's negative press on his finanal disclosures and comments about federal workers' financial issues during the government sh

down. trump also nixed two deals ross tried to reach with anina. just last week publicly another one'sf roolicy suggestions, putting tariffs on uranium imports. treasury secretary s mnuchin told reporters ross had played a key role on trade. >> i have no reason to think secretary ross is -- doing a good job. i've never heard anything otherwise. >> reporter: a representative says ross's work continues and he has shifted the department into a new era. it's unclear who w to replace ross. the woman that's come up in many times is ray washburn. the texas developer who ran the overseas private investment corporation until march. aides and advisers sayross's depart could come as soon as late summer and his chief of staff is alreadyooking for a new job. for "nightly business report" g m kayla tausche in washington. and durat wide-ranging press conference todayy treas

secretary mnuchin also said the administration officials had some very serious concerns ove facebook's proposed digital currency called the libra. mnuchin said thathe fear is it could be misused by money launderers and terrorist financiers among others. facebook has said that it anticipated critical feedback from regulators around the world and that it announced libra a year before its achicipated lao that it could have these kinds of conversations. in fact, david marcus, the head f facebook's crypto-currency project, is scheduled to testify on capitol hill tomorrow and in prepared testimonye ll say that the digital currency will not launch until regulatory concerns are addressed. and there was more talk today about the record fine that facebook's going to reportedly pay over its privacy lapses. as we reported friday, that ea penalty could as high as but the company's challenges are t.t over julia boorstin has that story. >> reporter: $5 billion. that's the cost of the ftc'sit

settlementh facebook for violating its commitment to protect consumer privacy. that's a and it's a high end of the expected rain ng. but it'stctually not tha meaningful for facebook's bottoi ne. just about a month's worth of revenue. senator elizabeth warren tweeting "let's be honest, this is a victory f facebook. just look to the markets. in the first 15 minutes after the settlement was reported facebook's market value went up by more than $5 billion." senator amy klobuchar saying in a statement, "a one-time $5 billion fine for a company whose profits are in the tens of billions of dollars a year is not enough to deter facebook and force them to put consumers' ivacy before profits." with no indication that the coming ftcl settlement w meaningfully limit facebook's ability to collect and monetize n ta, cowan has a buy rating the stock. >> i think there's probably a couple more years of this heightened discussion around privacy and antitrust for all of the players. t ultimately we don't think if

there's going to be anything material happen, you know, or material change in the business. >> reporter: but some lawmaks say the minimal impact of the ftc's fine gives more urgency to passaw to change facebook's policies and the u.s. maybe the icy t of facebook's p problems. over 40 countries have passed regulations targeting social media and fake news over the past three years. and now the eu is in the early stagesf o antitrust investigation and the uk and france are writing new social media laws.ot but analysts all these issues haven't cost facebook its most valuable asset, its users. g they really aren't los users over this whole data privacy issue they've had in the last year and a half. users are still growing across the globe. you have undermonetized assets and some other optionalitieser they become e-commerce or payments as well. >> reporter: regulatory scrutiny of facebook continues this week on capitol hill as the head of

the crypto currency division tify about the company' investment in that space. for "nightly business report" i'm julia boorstin in los angeles. time to take ak at some of today's upgrades and downgrades. we begin with shares of geral electric. they were downgraded today to neutral from buy at ubs. the analyst cited thestock's valuation after a 40% run-up so far this pryear. e target $11.50. that stock fell about 1% today to $10.27. and deere was upgraded to buy from neutral at bank of america/merrill lynch. the analyst cited a strong outlook for the agriculture economy. price target $185. that stock rose a fractn to 166 even. still ahead, it's been more than two decades since the last majoro a union strike. some say it'sff not o the table this time around.

now to china which overnight posted its slowest growth in 27 years. the world's second economy grew at a 6.2% annualized rate in the secd quarter. economists say the slowdown is u.s.-chinaue to the trade war. much of the country's growth occurred in april and early may, helped in part by a tax cut heavy infrastructure spending. american airlines i exteng expanse laigsg cancellat max planes through early november this is the fifth time the carrier has pushed back the time the max would be back on its schedule. the aircraft has been grounded-a as you know worldwide since march following two deadly crashes. it is undergoing an upgrade of its flight control software but the fixas yet to be approved by either the faa or other

international regulators. separately the journal" reported today that the grounding could stretch into next year. thiseek the united auto workers and the big three u.s.t kers are kick off negotiations on a new labor contract and for the first time in well over a decade the talks are likely to be contentious, could lead to a strike, as a matter of fact, shuttingmeown so assembly lines. phil lebeau has the story. >>eporter: the ceremonial handshakes marking the start of talks between the united auto workers and ford is filled with smiles and plenty of comments about the iortance of working together. >> thank you to each and every one of you for what you've done to buildil our industry, to our company, in our case over 116 years. >> reporter: don't be fooled by the smiles. these uaw talks will be contentious. particularly around three issues. the tsuaw w to shorten how many years it takes newto membe each higher pay tiers. and they want automakers to hire ry workers. but the biggest stumbling block

could be health care costs. automakers would like union members toay more for their health insurance benefits. the uaw sees thingsdifferently. auto profits are close to a rerd high. so the union thinks its members should be rewarded for that success in a new contract. >> i like to point out andap aud that ford motor company chose a business strategy with great success that keeps much business in north e erica and thunited states. very much for that. >> reporter: it's been more than 20 years since the last major uaw strike. while few expect to see qulint picket lines this fall, some issues like ending production at the gm plant in lordstown,o o have the potential to flair up and become major stumbling blocks. unlike uaw contract talks in the past cade, these negotiations come at a time when the big sree find themselves at a cross-roads,nding billions of dollars developing electric and autonomous cars while also keeping their current assembly lines humming along at a profitable level.

which is why finding labor peace this fall will be crucial. phillebeau. nightly business report.o. chicag consumer lending helped citigroup top expectations. and that's where we'll begin tonight's market focus, with the bank also saying it was helped by a gain from the ipo of its electronic trading platform called trade web. citigroup is the fthst o closely watched major banks to report its quarterly results. w share down a fraction today to 71.71. elsewhere, symantec and broadcom merger talks have reportedly collapsed. cnbc is reporting the negotiations stalled because of price. broadcom offered $28.25 a share. symantec wanted more. the deal wld have expanded broadcom's growth in the enterprise software industry. symantec fell more than 10% to $22.84 while broadcom rose more than 1% to $288.34. drug maker gilead planssto

invever $5 billion to increase itske in biotech firm galapagos. >> one of my priorits was expand the portfolio at gilead and this collaboration we announced is exactly in line wi what we need it's a collaboration with one of the leading biotechn companies europe that allows us to collaborate, have significant investments and have an exclusive right to everything that comes out of this innovative ten years. the next >> gilead's shares were up nearly 3% on this news. 68.07. but galapagos soared more than o 17% 170.76. and you've probably heard. today marked theinning of amazon's fifth annual prime day, which allows theimretailer's members to shop online for more than 1 million deals globally. this year the eve will last 48 hours for the first time. amazon was up araction to 2020.99. charles schwab is reportedly in negotiations to acquire

usaa's brokerage and wealth management operations for about $2 billion. the "wall street journal" says schwab wouel l add about $100 billion of assets from usaa and then help us increase its presence in the wealth management business at the same me. the sto was up a fraction today to 40.30. then after the bell b. hunt missed earnings expectat wns but revenu in line. growth in truck production but a decline in its transcontinental business. hares initially rose in after hours trading tonight but they did close the regular session down a fraction at $92.58. and the fda has called it an epidemic. teen use of e-cigarettes has risen dramatically along with concern among their parents. carl quintanilla looked into that controversial issue ae sp with executives at market leader juul labs about the popularity of their product

among adolescents. >> it felt like we were smoking. it was cool. >> reporter: grace debono is a high schl senior from bloomfield hills, michigan who was 14 when she started vaping. but it didn't become a habit until the start of 2017 when she got her first juul. >>we w to a gas station, and my friend already bought one from the same gas station. so was like i'll just go in and get it for you. but we were 15. >> she went in. >> and came out with two jus. >> 'twasn't long before grace was addicted. >> it would abls in my hands. it would always be with me. you know? so i would always hit itecause it was just so easy. >> reporter: grace was part of an adolescent phenomenon. between 2017 and 2018 e-cigatte use increased by 78% among high school students and 48% among middle schools. by the end of 2018 more than 3.5 million american kids were vaping. juul is i fraction of the use

of vabor products by minors. i think we getth a lot o attention and criticism because we are the biggest prend, the biggest er bu we're certainly not the only product out >> reporter: juul is one of thousands of e-cigarette products in what is a $9 billion a year industry.s the company s it was created to help cigaretteeimokers kick habit. since its launch in 2015 juul has captured over 40% of the market and is valued at about $38 billion. >> it really started taking off just recently, and that caught us by surprise. and then we had to do a lot of catching up. wd alongh that ramping growth came the unintended consequenc of usage by youth. >> reporter: can you explain to viewers about the marketing stragy, about campaigns tha appear aimed at young people? >> well, we think that's inappropriate. when we launched juul, we had a

campaign that was t arguabl kind of lifestyle-oriented, too hy, less than six months. it was in the early days of the product introduction. think it had no impact on sales. >> actually, in the year immediately following what juul calls its vaporized campaign its sales grew by nearly 1,000%. it has become the most popular e-cigarette among teens. >> the injection of the e-liquid takes place into the pod. >> literally by a needle on this wheel? correct. >> reporter: this is juul's secret sauce. kevin burns, brought on as ceo in 2017, gave us a tour of a pod-filling plant in wisconsin. the first time juul has let reporters inside a factory. this one's running day and night to crank out some of the 60 million pods juul sells in the u.s. every month. if we did this tour tod with the parent of a teen who'd been using or who had been addilded, how wou sort of defend all

this? >> first of all, i'd tell them i'm sorry that their k450i8d's using the produc it's not intended for them. as parent of a6- 1ar-old i'm sorry for them and i have e7g9 for them in terms of the challenges they're going thro fh. >> reporte grace debono the challenges continue. she doesn't own a juul anymore but he had still vapes a couple of times a week. and memories of darker times stay with her. >> it's not something i'm proud of. it affected me, my health, and ke relationship with my parents. >> reporter: caquintanilla for "nightly business report" 37. c and do read more about the vaping industryan head to our website at nbr.com. coming up, the other employer-based retirement plan that lets you grow your savings tax-free. ♪

there has certainly been at talk this election season about the discrepancy between ceo and worker pay. and now one major u.s. city is moving to actually tax that gap. robert frank explains. >> reporter: members of san francisco's brd of supervisors epproved an excessive ceo salary tax. ax would apply to any company whose ceo makes at least 100 times the median pay of its san francisco employees. now, companies with pay between .1% and .6% of additional tax on theirhaross receipts,s on top of the current city tax of 1.3% on gross receipts. now, the authors say it would raise up to 1$140 million a yea, which would go to alnd a new me health program. this comes a year after the largest ever tax increase for companies in this city.

that.as proposition that taxes companies to help pay for homeless services. the revenue from that tax is still tied up in legal challenges and hasn't been released. portland became the first city in the world to pass a tax on highly paid ceos. that raised a few million dollars a year. now, san francisco politicians blame the tech boom and highly paid ceos and tech workers for driving up housing costs and living costsn the city, adding to that homeless problem. but some say the tax could es change compani to lower tax more business-friendly states utah.texas or and the companies most likely to pay this tax are banks, retailers, and fastoo fd chains since they have well-paid ceos but also many lower-paid workers. labor experts say that tec companies are not likely to pay the tax since they're san francisco employhos. all tech engineers and software engineers they're

highly paid. the tax could cause companies to cut lower paid workers, which would hurt those at the bottom the most. >> this tax is not going to change ceo compensation. ceos are not necessarily the most sympathetic population. t no one's going to change ceo compensation around in. what they may do ihe change employment patterns within the city. because it's your median francisco employee. you drop some of the lower compensateemployees, push them out of the city, and then you don't have to pay the tax or don't pay as much. >> the tax faces a vote in the spring ballot. it would have to pass by 2/3 o all voters. so far the tax is highly popular. for "nightly business report" i'm robert frank. a newtr savingsegy is gaining popularity among employers, but it's beenlow to catch on with their employees. our senior personal finance corres endent sharonerson joins us to talk more about what you should know about a roth 401(k).

so how popular is this thing? >> well, it's definitely growing in popularity. like a 401(k) that you're used to you can put in $19,000 thisa an extra $6,000 if you're 50 or older. what's bifs is the money goes in after tax. a lot of people don't know what that means for them and don't understand necessarily how it woes. we heen now up to about 7 out of 10 employees who have access to a 401(k) plan have access to that roth option. so it is offered to them but only about 11% are take k advantage of it according to fidelity investments and they're the largest provider of 401(k) plans in the country. >> the b tax is th difference between that and a regular 401(k). >> it is. the way a regular 401(k) workse manye already know you contribute that money pretax. you love getting that reduction in your tax bill income come tai . the earnings will grow tax deferred. you'll pay at your ordinarye income tax rhen you take that money out and that's what happens to your withdrawa after 59 1/2. what is different with the roth n1(k) is the money going is

after-tax money. and then when you take that money out you don't have to be taxed on those qualified withdrawals. that money can be taken out tax-free in retirements long as you're 59 1/2 and you've held it for five years. and that includes the earnings as well. you don't pay taxes on that either. >> of course we've all heard about the roth i.r.a. ho does that differ necessarily? >> people always sayld my mom o me i should have a roth account, which i hae from millennials wh getting that roth 401(k) k9. it is similar in that you're not necessarily going to be taxed in retirement. the difference is you get a higher contribution limit,hi mu er with a roth 401(k). only about $6,000 you can 3u9 into a roth i.r.a. no income limitation on a rh 401(k) that's a very key factor. and the other is we always say contribute to th 401(k) up to a company match. that's a 401(k). you can't hava compa match with an i.r.a. that's also free money you're getting with the rot(k). it's important for people to look at the tax impact, how much

they waner to save, whe they need to have that tax savings with their returns, or if they can wait and havex- that ee money in retirement-s that going to be a bigger benefit for them. >> indeed. always goodstuff. thank you, sharon epperson, as always. one final look before w go at what happened on wall street today. with records all around once again. the dow was up 27 points. nasdaq up 14. the s&p gained afraction. all of them at all-time highs. that's "nightly business report" for tonight. i'm bill griffeth. thanks as always for watching. we'll see you tomorr.

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