♪ >> announcer: this is "nightly business report" with give griffeth and sue herera. oday wezided to lower interest rates. we took this step to help keep the u.s. ecomy strong in the face of some notable rvelopments. the federalerve cuts interest rates again but central bankers are split over the outlook. d stocks went on a wilride. raise the roof. home constructionurged in august. a welcome sign for a market that has seen sluggishales. emissions fight. alesident trump is taking onid e state ofornia and caught in the middlid is the auto industry. those stories andon more t on "nightly business report" for wednesday, september 18th.nd we do bid you goo evening, everybody. and welcome.

yes, the feral reserve did cut interest rates by 0.25 peppe for the second time since july. whe the decision was expected it was not nabz. edree officials voted not to cut rate and there was a split over the outlook for future cuts. immediately following the decision today, stocks fell sharply as you s there but then later in the afternoon the losses were paired and stocks closed little changes. rose by 36 points to27147. nasdaq lost 8. the s&p up just 1. steve liesman starts us off from the federal reserve in washington. >> reporter: a divided feral reserve cutting interest rates by a quarterin point bri the overnight lending rate to the range of 1.75 to 2%. process taking back two of the last yea four rate hikes but the votas 7 to 3 with two dissenters opposing and one favoring a full half percentag point cut. the result the fed is not definitive forecasting

to come as the market hopes but instead taking it meetingme by ing. >> it's an unusual situation because we -- you know, the u.s. economy itself, the largest part of it, the consumer part is in stronghape. the difference here is we have gnificant, really, risks to that outlook from not just the geopli willinglivents but slowing global growth and trade policy uncertainty. we'll be looking at that and also financial market conditions and how they are affecting the outlook. >> as it stays now ten members forecast no additional rate cuts this year and seven forecast one more. but powell noted that the committee has changed the views over theou ve of the year as the economic data has changed, as t risks changed and the circumstances t have required. > the beginning of the yea within, we were looking at rates. then patient and cut once and cut again. i think you have seen us being lling to move bed on data,

based on the risk picture. i have no reason to think that will change. t in the wake of the decision president trumpeted out critical comments of psell whom he chose for the top fed job. the president says powell had no guts a a bad communicator. powell refused to take the bait saying the independence of the fed has served the plic and making policy without regard to politics. "nightly business report," washington. joining us to discuss the fed decisn is scott brunn, the chief economist at raymond james. great to see y welcome back. >> nice to be with you. >> we have a divided fed. f and the jury is out as to whether or not we are goi to get more cuts by the end of the year. what is your opinion? >> well, in isn't anything new. we saw the fed divided early in the june meeting. where tre was about a 50/50 t split betwese expecting to stand pat over the course of the year and the remainder looking

for probably about pennsylvania 0.5% cut. we know from minutes of the july meeting that a lot of the officials were reluctant to lower short-term interest rates. we have t t-way split in terms of the dot plats dots and the dotsl the expected federal funds target or the appropriate funds taror each of the 17 senior fed officials. but not of those officials get to vote on policy. >> right. >> we've got five that were rely didn't want a rate cut at all. another five that want to stand pat the rest of year. and seven looking for maybe another 25 basis points cuts. the disions will be there. it's notan a huge of opinions here. but it does suggest, yknow, there is a lot of uncertainty. and the general view still is that this is more or less a d-cycle adjustment, not really the start of a full easing cycle. >> but we are a in world where

other central banks are easing in various ws. the european central bank just did. of china has been doing the same thing. in japan they've been doing that. does tt put pressure on our fed to do more down the road? >> well, not necessarily. i think the fed has to do the fed has to do in terms of the u.s. economy. it does have to take into account implications of what it does on the rest of the world. and here, you know, the real reons for the cut wer exactly the same that we had in late july, that is, youknow,here is trade policy uncertainty which is having an effect on owth, slower global growth is havingvi affects on u.s. exports opinion posing downside risk going forward. >> up mum. >> a long as that continues you are likely to see the fed moving toower rates again either mid-or late october meeting or mid-tease. >> we saw volatility as the fed chief was speaking. and so giv w whathave just

id out what are your expectations for thequity markets into the end of the year? >> well, while -- the federal reserveffials are split a lot of economists appear market participants are split on what the fedhould be doing. some see you know a real reason . ease mo i think up we're seeing some degree of volatility here. i think we're still relatively optimistic that the economy is going toe maintain posit moment ultimate, no recession, tlaeft through the end of the year, the early part of next year. itore clouded as you look to next year. i think we're ctiously optimistic i think at this point. >> scott, thank you. scott brown with raymond james. clearly ceos have a perspectivenin the economy. and today the chief executives of the biggest companies lowered growth forecasts for the year and most mri blaming trade tensions for the downbeat assessmentn mui has more. >> america's most powerful ceos

are growing cautious about the economy. a survey from the business round table found that i members now expect growth to clock in at ye 2.3% this . down a estimate ofe 2.6% last quarter. the b.r.t. blames the slolown in glorowth and trade tensions for the more downbeat assessmels. the group surveyed members on the impact of the trade war over the past year. ed finding that more than half of ceos says sales have taken a hit. 40ers% of manufacturing ceos say there is anap impact onal investment and a third said a damper on hiring. the outlkor sales capital investment and hiring over the next six months goes undeclined as with he will pl brt and jp morgan chase ceo jamie dimon said he doesn't believe the recession is imminent because of consumer spending.ke but he s with president trump about the the toll the trade war is taking on businesses and supply chains and that he is skeptical the white

hoe will reach deal with china before 2020. dimon says he doesn't tnk the central bank interest rate cut will impact the tradesi ts. but he believes in the independence of the frad reserve and calle chairman j. jay powell a quality human being. speaking before t t fed decision, respected long time bond investor jeffrey gunned latch said even though partsth economy appear stropping, the odds of a recession are rising. >> the economic data has gotten a bit better, s yet ill think when we put it all together, looking at allor indicors recession it seems that there is an increasing probability of recession before the 2020 election. obviously the yield curve being flat and even invertedrom fed funds at least at the moment out through the curve, that's clearly something that is a rest sor of potenti retleegs he also said he is closely watching consumer ntiment and activity in the manufacturing sector.

but there was some positive news today out of housing industry of all places. homabling surged to a 12-year high last month thank to increase in both single and multifamily home c according to the commerce department housing starts which measures new home construction rose by 12.3% to a seasonally adjusted annual rate ofl about 1.4 million units. permits for future constction al climbed to levels we have not seen in about 12 years. the report suggests that lower mortgage ratesnd strong jobs market have finally helped givey the housing marketva pennsa lift. but for how long? back with us tonighto talk about that is odebta curb y, the deputy chief economist at first american financial. weooome back. >> to be here. >> now one of the big problems for the housing market the l few years has been low supply. now we get this bump inon construcn august. is that a sign of hope? ? or what do you make of this >> absolutely. this is great news for g the

housing market, not elbow this month's bump but the upward as revision of month. that's two good prints on housing starts which are great leading indicator of future supply, which the housing mechanic is in desperate need s of. >> and we have lower interest rates. they picked up a bit int the l fe weeks. but overall we were approaching near record lo >> report low mortgage rates and the labor markets continuing strong and in boosts not only consum confidence but builder confidence which we are finally seeing reflected in the housing starts data. >> but we have had low mortgage rates for a while. we've inob a strong market a while. why now? why all of a sudden do you think home bui are suddenly starting to break new ground here? >> a little bit of season s -- little bit ofna seaty and taking time to show up in the data and confidence. but multiple months of lower mortgage rates and sustainedhe thy labor market gives them the confidence they need.

ultimately builders want to knob when theyld the home will sell. and ihink consecutive months ofhe a strong economy is reassurance.hat >> yet at the same time we just ran a bite ofond investor -- a big bond investor who says the odds of recession are rising. how does that trickle down through housing? >> so right nowe're not necessaril seeing an immediate recession concern. there is ctainly some globa economic slowdown. but what matters for us really is that -- and for housing particularly is that the consumer feels confident and is strong. and by strong i mean that wages continue to rise and consumers continue to sped. we see both wages rising and consumer spending.nd we saw positive retail data last nth. and ultimately when the consumer is strong the housing market is strong as well. >>e one other problemve seen with the housing market has beeny the afford abilsue. heices have been higher than some of the first-time buyers especial could afford. where does that stand right now?

are you keeping tabs on that. >> absolutely. nominal house prices are still rising. bu a consume really gaining the benefit of lower mortgage rates and higher income. ultimately it's all about the purchase power, whatou can afford to buy. and that's not just a function of house prices. but also how much can you afford to borrow. the low s where mortgage rates come in. ui very qckly what do you see as the biggest challenge. >> i still see supply as the biggest challenge in the housing market despite the fact that inventory has been and obviously we are building more homes. we're still near quarter century lows in terms of inventory and so i would like to see some more months ofns positive g in-housing construction. >> odebta curb y with first american financial again. thanks for joining us tonight. >> thank you. it's time to look ot somef today's upgrades and downgrades. wnfedex aded by a number of firms including deutsche bank lowered the rating on the stock from hold to buy. te mts emphasized the downbeat

outlook which wed b last night. the pce target $$142. . the shares fell to 150.91. while pool downgraded to secto tiight from overweight at key bank. weakening earnings momentum. the firm does not have arice target. the shares fell 2% to a149.03. >>o at key bank lennar groundr graded to sector waelgt from overweight with the analyst citing lack of let catalyst to move it higher. noting a slowdown in earnings momentum process despite the grounded grade it rose to 54.15 probably on the home construction number. square upgraded from hold to sell at hal up anyay the revenue had already priced in. price target is $63. shares up a fraction too 59.75. > still ahead who gets to sell the rules? california or president trump?

♪ ♪ ♪ there are reports ton that at&t is exploring ways to part ways with direc tv. this was first reported by the "wall street journal." direct tv has been losing customers about 2.5 milli subscribers last year alon. at&t is the target of investor elliott management calling on the company to unload direct tv. earlier in the program we mentioned that ceos lowered growth expectations for theec economy. it turns out the same is true for chief financial officers.

they'rehe onesontrolling the money. bob pisani has more from the new york stock exchange. >> reporter: zpit the recent spate of economic data pessimism is high and appearso be growening. the latest quarterly duke university country of cfos says pessimism has green this year despite record low unapproximate and healthy consumer. of 225 cfos taking part. 53% bleach the country will be in recession by the end of the third quarter next year. 67% say we will be in a recession byou theh quarter of next year. knows are high numbers. the results align with a similarly glum outlook for the monthly bank of america merrill lynch fund manager survey from tuesda fund managers around the world. that survey found about 40% year. a recession next that's the highest level of pessimism since august of 2009. bond managers continue to expect low growth and low rates' they

think central bank stimulus will be needed. wh is everybody so pessimistic? you could blame it on extreme global growth uncertainty. but trade wars which is the main part are onl part of the equation. so cfos are worried about germany wsh for examplef one the largest economies in the world having flat or negative growth plus fierce of a broader sl in china. they seem to be saying that a strong u.s. by itself may n be enough to save the day. it's just not clear right now what other part of the world economy is strong enough toull e rest of the world along with it? elsewhere, fedex echos concerned on tuesday. missing marks on earnings and cutting guidance citing the u.s. mctrade tensions and slowdown in the global that stock down more than 10%. ghtly business report" i'm bob pisani. president trump today said he is ordering newns sanct on iran. the decision comio after the

u.s. accused irang of carry out the attacks on saudi arabia's oil industry andhe world's biggest crude oil processing facility. iran zpied involvement. responsibility was claimed by yemen's iran aligned houthi group.ce the p o p domestic crude down about 2 peppers in today's general motors is temporarily laying off 1,300 workers inse canada beche factory where they work ran out of parts. because of theke uaw stere in the united states. speaking of which auaw spokesperson said the talks with gm are moving slowly but progressing. more than 49,000 workers walked off the job on monday. at issue, better pay, health insurance coverage and job curity. president trump says he is revoking california's power to set vehicless v ens standards. it's the start of a legal battle and the auto industry is taught in middle. phil lebeau has the details. >> reporter: it's president

trump versus the state of california. over who should set fuel economn s for new vehicles. the current rules calling for average of just over 54 miles a gallon by 2025 a r beingised to require a more gradual increase. california has long held a waer to set its own mileageea target. but president trump doesn't like that. he wants one national fuel economy standard that would be far lower than what california would target. the president tweeted auto makers should seize in opportunity because withoutunn yternative to californi will be out of business. california disagrees. >> this is the fight of a lifetime for us. we have to win this. and i believe we will. >> caught in the middle, auto makers they want one national standard for fuel economy. so everything the build and sell in the u.s. would have the same requirements. >> ihink there has to be a really effective comreomise

between the admininiration, the auto a makersnd california. and getis th, arbitrarily -- arbitrary fight off the table. >> ts fight between the state of california and the trump administration will ultimately settled in court. and it could drag on for years. which mea the current fuel economy standards will not be changing any time soon. phil lebeau, "ghtly business report," chicago. microsoft raises the dividend and that's whe we begin the market focus tonight with the company hikin its quarterly payout by 11% to 51 cents a sha. also announcing a buyback up to $40 bilon of the company shares initially rose in after hours trading tonight closing the regular session up a fraction at 138.52. after the bell,.s. steel cut earnings outlook as it feels the impact of falling steelng prices and a larger than expected decline in scrap prices. shares initially dropped in after hours, a close regular session down nearly 4% to 12.45.

general mills toppedal earnings estimates but fell shortn revenue thanks no part to slumping sales of snack bars. the company did see sales growth in the pet foods division. general mills was off a fraction todayy to 54.53. and that. and southwest air planning to raise revenue forecast after experience wha is it calls solid demand and strong passenger yield trends. the airline is still dealing with the grounfng the bogey 737 max freiheit and plans to keep the planes out t of schedule at least until next year. the stock was up a fraction todayo 56.23. comcast says it will ovide free service of its xfinity flex streaming back to the internet only subsciencer. the box collects content from ubtflix, yo amazon prime and will compete with roku set top boxes. comcast shares rose araction to 46.94. roku shares fell nearly 14% to

129.88. comcast is the parent company of nbc universalci pro this program. india has banned the sale and production of electronic cigarettes calling itam epidemi g i don't think young people it's the latest move to take on vaichg ahmed h impacts the businesses of major tobacco companies like altria which own as stake in juul. and late today cvsays it's dropping all cigarette advertising. the shares down more th 1% to 40.84. a report from the walg was enough to knock the winds ouf of share of mcdermott. the report said the engineering andonstruction firm reached out to a turn around consulting firm. the company says i routinely hires external advisers to evaluate opportunities. but the shares plunged more than 63% to 216. and dental products company envista made the trading debut

after spu out fro science and technology company danahur earlier in the year. ipo priced at $22 and opened at nearly 26. a shares closed up 27% to 27.95. coming up, the changing travel industry. >> a u softening. economy and slowdown in china put travelers on notice. a ric at what it means for the hospitality industry. the "nightly business report." ♪ ♪ facebook ceo mark zuckerberg on capit, hill tomorr the first visit since he testified last year about privacyssues

duringue the cambridge analytic scandal. this time scheduled to meet with lawmakers to discuss future internet regulation. > a house panel has formally asked bogey oeo to testi the younded 737 max at the end of october. bogey said it's reviewing the s invitation and wil continue to cooperate with congress and regulatory authorities. as you t know,t plane has been grounded since march, following two deadly crashes k thatled more than 300 people. fally tonight, global tour sims a multitrillion dollar indust but veryensitive to economic trends. when the economy is good people trel more for businesnd pleasure. when the economy is n good, travel is one of the first industries to feel it. sema modi went to a conference to talk to hospitality executives about the state of the business right now. zblrp global headwds coupled with a softening economy is starting to affect how consumers travel.

hundreds of hotel and travel gathered acutives the global forum in new york to discuss the outlook for the nd traveltry. in the midst of geopli, a trade war and slong global economies. >> business and consumers broadly have caution flags r ou. neding about -- there is an election cycle gearing up. wars.ead about tra they are reading about things happening in saudi arabia. issues with iran and broadly in the middle east. >> where there is elecons, where there are terrorist attacks, whe there are things xperts point liet to softening hotel occupancy rates and revenue per available room which is a hotel industry key performance indicator dropping below 2% for the first time since 2010. yet new hotels pop up across the country. weakening the pri power of hotel owners. with lower rates incentivizing

owners to build more experts say it's a while before there is a turn around. >> objectively right now it's more choppy. some months and weeks that are weak. >> and a long-lasting impt of the tradear. last year chinese tourismhi to e states dropped for the first time in 15 years. dampenings a key urs so of revenue for the industry. analysts say the trade dispute and slowing chinese economy are behind the decline. na it's not necessarily that travelers from c are not traveling. they're traveling maybe less bus of pblems with t economy. but they are still traveling. but manyhi timesing i'm not sure i want to go to u.s. >> executive at trip dwerz betting the kmooe e change how americans travel. >> when consumers are more concerned about b theger trip they take a smaller trip. sometimes that's closer tome ho. mes it's cutting a day off. cancellingt to be the major vacations. >> while the industry is cautious as demand may soften, none are sayin they see a

recession hitting the u.s. economy any time soon. for nightly business report,se modi, new york. and here is another look at the day'sum finalrs from wall street. the dow rose 36 pinpoints to 27147. the nasdaq lost 8 a the s&p 500 was up just 1. and that's "nightly business report" fori' tonight. sue herera thanks for joining us. >> i'm bill griffeth. have a great evening. we will see you tomorrow. ♪ ♪ ♪ ♪ ♪

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