this is "nightly business report." record revenue. microsoft's cloud computing business keeps growing. adding to the value of the trillion dollar company. big hit. boeing will take a nearly $5 billion charge related to the 737 max putting a dollar figure on the cost of the gro and the final frontier. the nation enters a new era of space exploration. 50 years after mankind first stepped foot on the moon. those stories and more tonight on "nightly business report" for thursday, july 18th. good evening. lcome. sue is off tonight. microsoft is on cloud nine.

the lgest publicly traded company today topped earnings estimates and reported record revenue thanks to owth in azure. it is clear that microsoft big investment i the cloud appears to be paying off. at least one analyst said the pace of growth at this scale is unprecedented. that helped lift the stock and initial afterhours trading tonigh john ford has more on microsoft's quarter. >> one take away frommicrosoft earnings today is cloud momentum continues. the company's feet was grounded in azure's strength. but not just that. office and linked in also continue to be strong and ha particularly tt unit including office and linked in helped the profitability of microsoft. just get even stronger than it had been in the past and that's why i trillion dollar company and still going on at the end of the fiscal year.

for "nightly business report" john. now to microsoft's fellow component boeing. late today the aero space company said it's going to take a nearly $5 billion charge for problems associated with the grounded737 max airplane. it also said the cost to produce the 737 maxs increasing. and sent the stock higher in initial afterhours trading tonight. phil will bis on the story for t what doe charge cover? >> reporter: they're saying it's foronsideration and concessions they're going to have to make to their customers not just the ones they've me in the second quarter, bill, but those that have to make over the next couple of ythrs. remember have a number of airlines and aircraft leasing companies that wer expecting to be flying the max and they're not flying it. they have a reduced schedule. their revenue hast,aken a and they don't have the full compliment of the fleet theyed expeo fly. that's part of this charge and the most important thing that came out of this announcement,

bill, is the fact that boeing is sticking with its plan for its assumption, i should say, to see the b737 maxk in service in the fourth quarter. there have been a number of people thamsaid, you know, not sure this is going to fly in the fourth quarter. let's push it out to 2020. boein tsaid it's making assumption based on the discussions with regulators it service in the fourth quarter. >> all u.s. airlines, to this point, canlled their flights until november 2nd which is in the middle of the fourth quarter. what happens if it goes beyond that? >> reporter: th have to push out even further. one part that is a particular pain spot for the airlines is that they wereyot o -- they've lost the planes they have delivery of and they're paed and can't be flown. they were supposed to take delivery of more maxes throughout 2019, bill. those are likely not to be delivered until well into 2020 >> right. >> if not late 2020. they won't have the fullnt complior some time.

>> thank you, phil. certainly you know one of the biggest risks the market now comes from washington. m lawmaket act to lift the federal debt ceiling otherwise the u. defaults on its obligations jeopardizing the full faith and credit of the u.s. government. today there were some new developments on that ory. >> treasury secretary signaling today that the white house and congress are moving closer to a deal to lift the debt. ceili the outline of their agreement would ise the nation's borrowing limit for two years and set two years of top line federal spending numbers and include offsets for spending increases. >> i don't think the market should be concerned.hi i that everybody is in agreement that we won't do anything that puts the u.s. government at risk in terms of our issue of defaulting and i think that down in any scenario. i don't think the market should be concerned and we're working

hard. we'll get there one way or another. >> reporter: a source tells me there are veral issues that need to be resolved. where to find roughly $150 billion offsets or even more. how to consain future spending and the appropriations bill that have passed the house. the treasury department could run out of cash early september while congress is still on recess. so lawmakers are scrambling to pull together a dealefore they leave over the next two weeks. mnuchin has been in regular contact with capitol hill. speaking with the democratic and republican leadership over the phone today. >> we suld not leave here without doing something on the debt ceiling. if that's even means 30 days, it should not come in doubt about the debteiling in any shape or form. >> both parties caution that nothing isinal until everything is final. for nigly business report. and the treasury secretary

did say that investors should not be concerned about this. how have the markets performed in the past during silar times of stress in d.c.? we askedak dominique chu to a look. >> reporter: wall street hasn't generally reacted well to fiscal uncertainty. h the last decade, theree been numerous cases for market volatility was the result of budget and debt ceiling impacts. one happened in the summer of 2011, when lawmakers s wereck in negotiations that could have lead to a government shut down. ultimately the worst was avoided but the concerns over america's future fiscal agency standard and forbes to cut the rating on the u.s. for the and let's not forget the prices are raging at the time marketty volatierved. in the fall of 2013, the government shut down., the week befo markets were weaker. during that same time period, lawmakers were grappling with the validity of the affordable care act. and at the e l oft year, a

bunch of impasse lead to the longest partiat government s down in u.s. history. at the same time, invesrs were concerned about interest rate policy from a federal reserve that looks too tight in financial conditions. in each of thoseth scenarios, e were two common threads. one, that fiscal policy was surrounded by other negative market catalysts in play at the time. and, two, when a resolution was reached, eventually, the initial volatility smoothed out and thed markets e up higher. for "nightly busine report. on wall street stocks made modest moves today despite a t focus ee things. earnings, which so far have been mixed iran, after president trump said the u.s. destroyed an iranian drone, and the fedll ing comments today from his senior beneficial who said e a central bank will t more aggressive stance to ease monetary policy. but all of that was not enough to move the needle. the dow industrial average was

od three points to 27,222. nasdaq added 22 points and the s&p rose by 10. clearly wall street has a huge wall of worry to deal with now. economic and political issues both domestically and abrobu, lately the market has not been reacting to a whole lot of that. so what exactly ist waiting for? we're joined tonight by hris zach really chief investment advisor at independent alliance. thank you. >> thank you. >> years ago i would have contributed it to the summer doldrums but we don't have itan ore. it's essential acting that way now. why do you think that isou >> well, see the market is going sideways. they're waiting to see what is going toit happencorporate earnings where they kicked off the last couple of weeks. we're about10%f the way through the s&p 500 reporting season andut a 3/4 of the companies are beating expectations. those ex ctations have been lowered. in fact, earnings are expected

to be flat even slightly down for the first half of this year. so the markets not reacting positively or negatively off that news. it's going to take some type a surprise a positive or negative in order to move the market. now that the federal reserve and china seem to be on the back t burner f time being. >> yeah. i mean, today out after fed president williams said he feels the fed should be more aggressive with monetary policy the feds funds futures are anticating a 50 basis point cut by the fed later this month. is the market setting itself up with expectations or a bit too g hi do you think? >> it's possible. i think most of the market is probably saying a 25 basis poin cud to your point, it's recently starting to price on 50 s.sis poi it's possible it's a little bit too much for what the fed will do. if you listen to what the fed president said today, he was talking about makinrastic cut and making one in advance of it bein necessary.

so they're talking about insurance rate cut, potentially doing more in shortereriod of time. so he may have been hinting that actually the market was right they were going to cut but actually they were going to cutc twice as as expected. so it's possible the fed in this case is leading the market and that's why i think you're seeing a repricing. >> quickly, as far asrade goes, expectations here about as low as they can possibly get. a thinistration has been guiding lower, it seems, every day. so i guess, if anything, the next move would be higher if we get some development on it. >> i think that's exactly right. the most likel scenario they kick the can down the road, continue to negotiate, and neither talks completely fall apart nor an agreement is reacd in the near term. i would expect us to go if there's any type of positive developments in trade negotiations, a sign we are getting closer to the end a an agreement will be reached, i think that would be good stock market. >> chris, thank you for jning us tonight.

the mantra in the media for years, of course, has been the content is king and netflix may be learninhe that hard way. the streaming service add fewer sub skribers than expected in the past three months. it sent then stock d 10% today. in part, the company said because of its line up of shows. ixlia arbostein has the details. >> reporter: net seemingly has endless content. but turns out it's a hit-driven business. the mpany added 2 million fewer subscribers than expected. in the u.s., it lost subscribers for the first time in eight years. netflix said was in part due to the fact it didn't he enough big new shows. >> what we learned is that original content, big hits drive subs. >> "stranger things" returning kicks off a strg second half of the year. according to the ceo. a number of popular shows are returning with new seasons, sh

as "the crown" and "13 reasons why." there's "the irishmen" debuting in december. >> if content iscrhat des subs, content is coming in the second half of years.wi thi be the strongest content they've had in a long time. it should lead to good numbers. >> reporter: oneha thing can give them an advantage shoes from the big tv producers suchd as r rhymes is lured over from the networks with pricey exclusive deals. ryan murphy's show "the politician" hits netflix in september. the content chief said continuing to innovate to create shows and t moviehat drive water cooler conversation will be the company's priority. especially as it loses some of the most popular licensed shows such as "the office" and "friends". >> we grow through that by making the investments in original programming and getting our consumers and members tuned to the expectawe're going

r create their next favorite show. porter: with disney and apple launching competitors in the fall, and then hbo max and nbc universal streaming services coming out next ye, the competition to find the next favorite show is going to be more fierce than ever. time to take a look at the upgrades and downgradesoday. we begin with shares of apple. outgraded to perform at raymond james with the analyst citing confidence. price target $250. the stock rose 1%. microdevices downgraded to neutral. th tanalyst cited stocks evaluation after a nearly 80% gain so far this year. price target $37. sharefell more than 1.5% to $33. and call come downgraded to weight to overweight. the analyst said the stock will

be range bound going into next year. price target $75. that stock fell nearly 2% to $74.37. still ahead, the price of privacy. an app goe viral and washington calls for an investigation. the house ved to raise the federal minimum wage fon a first time decade. they move to $15 an hour by the

2025. some cities and states already made that move including seattle, san francisco, new york, and all ofni calif amazon adopted the $15 minimum last year.es other compaave done the same but experts say there's little chance that these measure will be taken up by the senate. president trump said today that his administration is looking closely at a cl ud-computing contract the pentagon is doing to award soon. amazon and microsoft are the two finalts for the contract that could be worth $10 billion. mr. trump said he's received complaints from other tech companies some of whom said such a large and important contract should be awarded to more than one company. also, in washington, a wildly popular app is coming under scrutiny. a leading senator is calling for the fbi to investiga it and the democratic national committee is warning against using it all together. andrea day explains why. >> it's the app tha can make you look decades older or

younger in seconds.il withons tapping into the technology. posting shots all over social media. the viral hit is under fire with fears that personal data could be shared with the russian government. the companyehind it is located in saint petersburg. this is the field cto at data security company baronas. >> people are realizing i'm uploading potentily very personal information to a company in russen. >>e minority leader chuck schumer calling on the fbi and ftc to investigate.d he dnc urging presidential campaigns to delete the app immediately. lattoday, the app maker adding a warning that pops up when you photo. leaving users to decide if they still want to go ahead. according to face app, we only upload a photo selected by a user for editing. wensnever tr any other

images from the phone to the soud. most imare deleted from our server within 48 hours.l we don't s or share any user orta with any third parties. even though ther & d team is loaded in in russia the user data is not transferred to russia. he still has >> we have to assume once we give somebody our data, they'll do whatever they wt with it. >> even using the app once andn delet could still be an issue. and getting face app to delete your data also takes some work. liu have to on settings and support and then send an e-mail and there'still no guarantee. i'm andrea day for "nightly business report." we'll talk about the growing privacy concerns involving face app. he's, of course, executive editor at c net. hi. >> this has been around for awhile. what happened? all of a sudden it's onyb evy's radar screen. >> yeah. >> a couple of celebrities

started posting onli their photos of their aged faces and it kind of took off. it was really amazing. i saw it just starting to pop up in my twitter timeline a couple of my friends did it. so the photo actually has the face app logo in the bottom right of the photo. you automatically know where it came from. you search t app stond download it which is what i did and took a photo, aged and uploaded it. i was part of the whole thing but it was a thing that took off in the middle of the day. >> right. but you're not as concerned about the surity issueshat some are. i mean, chuck schumer, as we said, is calling for an fbi i guess mainly because this is developed by a russian developer, yes? >> yeah, i mean, i haven't seen any hard evidence that shows that this or something to about. what i'm glad about, though, and this is something we've talked aboutn c net many times is you need -- it's reminding people to bo thoughtful what permissions they're giving apps when they download them to the phone. when you start up the app for thest fime, it'll ask you if

you can give it access to your photos. all of your photos. and i said no, of course, but a kay.of people just press because they're used to that. and that's one of the things it ,started this conversati think, is really healthy. about where is our data going.wh are we trusting it with and how are we handli it? it's not something we've done in the past. >> we all have the memories of what came out of the 2016 election. the involvement of the russian government or russian developers of se kind. i guess maybe we're learning something but are we too paranoid at this point? >> well, that is beingoo paranoid, at this point, is not a bad thing when it comes to the app world. the thing we have treminded of there are developers out there annoif you don't who you're dealing with you should be thoughtful about who your giving your data to. that's a good lson to learn. now just assuming this is is a bad company and a bad app because it comes from russia is a little over the line.

right. would like to see more evidence that it's dangerous, first. but i'm happy to see people thinking about these things now instead of waiting for a big hack or some other horrible thing to happen and say i should have thought about it before. >> indeed y tha for joining us tonight. >> thank you for having me. elsewhere united health group sees ang gro growth in the membership. that's where we begin tonight's market focus with the parent o the nation's largest health at insurer g estimates. an increase in premiums and services. the company raised the full year guidance. shares fell more than 2% to $2.60. morgan staey reported better than expected earnings and revenue thanks to gains in the wealth management and fund divisions. p but the compated a 14% decline in revenue from equities trading. that was the steepest of the major banks, as matter of fact. the stock rose 1.5% to $44.43.

union pacific topped earnings estimates thanks to cost cuts and pricincreases to combat midwest flooding and trade tensions between the u.s. and china. despi d evidence of a slown in the transportation sector, union pacific ceo said he's not concerned about a possible freight slump. >> we see a little impact from the coal and energy markets and then we do see a little impact from tra but, you know, i don't -- i can't say we see some kind of nt inflection p occurring now that would make me think that the third quarter or fouquh arter is getting much worse than what we see nowon >> uni pacific rose nearly 6% today to $174.25. tobacco company sgrght th in a new product that heats tobacco instead of burning it. the company raised the full year guidance and stock rose more th8% today. and after the bell onlinepe

product company chewy reported the first result since going public and earnings and revenue were in line with estimates. shares were volatile, though, in the after hours trading session. they closed the regular session up nearly 4%. coming up, the next lunar step. the economy is being redefined by a new generation of explorers.

warned that theu.s./china trade war could a dent in the profitability. they plan to c cost due to the impact of tariffs and pricing pressures. it did say, though, it expects to see improvement in the second half of this year. many carmakers have been coming under pressure from the trade ensions as well as big investments to develop electric and driverless cars. finally, to be the, of course is weekend marked the 50th anniversary of the a mllo n landing when neil arm stong took that step. five decades later, a new era os commercialce flight is being ushered in fuelled by wealthy entrepreneurs. 50 years ago, the first humans steppon stepped foohe moon. it simpked america's dominance

in space. now it's changing. spacex pioneer abreusle rockets that cut the price to go to orbit. ushering a new era of space exploration against the u.s. options as it rethinks thera gy for the final frontier. >> now comes a time for us to make the next giant leap and return american astronauts to the moon. >> the new lunar program is art it would spend americans back in five years. a feat that can only be achieved withf he helpe private sector. the ceo of early stage investment firm said we're in an entrepreneurial space race. >> w've gone from a dozen privately funded companies in the world to now 476 companies today. >> one start up space agency invested it. >> it's kind of like a railroad to the moon.

>> it fill builds robotic nders has almost $100 million in contracts.di inc recent awards from nasa. >> we offered nasa a more affordable opportunity to regularly fly to the surface of the moon. that's going to open the doors wide open to scientists and explorers and technology devepers all over our country and the world to begin to understand the moo in much better ways. >> it's one example. companies are focussing on verything from rockets to moon linings to habitats. jeff bezos spent theas three years building another one. another example is the lunary. gate a space station would orbit the moon are competing to ild. >> a purpose to launch exploration missions from there and other locations. >> but it will take more money. up to $30 billion over five years, according to nasa.

for a former space shuttle commander, it isn't a matter of whether space goes main stream,e but a mof when. >> i want to someday walk into the school and say i steve. i'm an astronaut and all the kids look at me and said big deal t there's are of those. goal. my f> and that is nbr for tonight. thank you so mu watching. have a great evening! see you tomorrow.

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