>> announcer: ts is "nightly business report" with with bill griffeth and sue herera. >> bumpy week. stocks turn lower after reaching for records. as investors are reminded of the risks to the market. risky business. a fed official makes an unusual call, highlightin the rise of coworking spaces as a new source of financial instability li timeless treasures, used sales are booming and now a brand wants a piece of the preown profit. thosetories and more tonight on nightly business report for friday, septemb 20th. >> we do bid you good evening and welcome. it was an eventful friday capping of an eventful week that saw the federal reserveut

second time s is and a ached on saudi oil production boosting crude provides but through tall the major averages continued to climb tard all-ti highs. and early on today it looked like that might hapn butig it didn't. a headline this afternoon tresselt related to the trade war between.he und china reminded i iestors again that risks still remain. and stocks reversed course and headed lower. the industrial average by the close was down 159 points to5. 26 nasdaq was down 65 and the s&p was down 14. and with the selloff, t major averages snapped the three-week winhr strategic. bob pisani reports from the new york stock exchge. >> stocks failed to clo highary fourth straight week but the dwound s&p sitting shy of new highs.de on t developments a aly food. the s&p lost today on word that chinese officials cut t trip

to the u.s. short without dwichg reasons. soe predictably saw global lo farm heaea h industrials like caterpillar and others sell off with semi conductors over fears th u.s. china trade talks may no go as well as some anticipated. still the market hasar proven remarkably resil ynt. little changed this week despite badinis besides trade. the surge in oil and poor mcindustrial obstruction and investors remainut cautious a chasing the all-time highs ahead of pivotal trade negotiations. we saw that today. the federal res rve also seems to move to the sidelines on rate action for the moment. cyclical sectors sense foif to the global enomy backing down in week including streelgts industrials and metals and mienls and retailers and regional banks. next week no shoragef s catalyst, including a look at

second quarter photocopied. personal income, consumer gnfidence all com we'll also get plenty of commentary from fed officials and a hostf housing data which has been much stronger nan expected lately. for nightly business report, bob pisani at the new yorktock exchange. >> and joining to us talk more about the market is jab ablin, the cio at crescent capital pl welcome. >> nice to see you too muoo, sue. >> it's been an interesting week to say the least. we made litite progresra on with the chinese. especially with what happened today. but we did see a move to the downside in interest rates by the fed. how do you feel on this friday about the market? >> well, i think the fed iab pr as confused pass the rest of us. you've got ide datat deped in a headline trieven market. i'mata dependent, too. and i have a real difficult time getting my bearings on where in mark headed.

so i can -- i certainly can sympathize wit somef the fed policy makers. they did reduce rates. the mhanic really didn't react that much. and i think they've more or less exprsed to thearket for now that they're done for a while unless conditionshae. >> you know, tlaeft one fed official said this week that as long assuhe cr is still there, this economy will be fine. and you have to admit, i mean that has been the strength the economy lately, right? >> absolutely. du know, we did a haveittle bit of scare earlier in the week with the 10% spike i oil sprays. remember, in recessions past it waspike i energy price that is really drew away from household expenditures because people have to get to work and owy for gas. that, you quickly reversed on tuesday. and it looks as though the consumernss still very healthy. in fact if you loo one of the sticks that we track is how many miles can you driven e

hour o worth of work? 300.t's still nearly so it's pennsylvania very strong number right now. >> the marketld still w like to see lower interest rates from the fed but you make the point in your notes gnaw sayes low r are self-defeating, she he tried to say. what do you mean by that. >> sure, what's going on, sue, is we made borrowing so easy amhag corporate america even companies that shouldn't be in business are in business. take, for example, sears. sears has been strgling more than a decade. rates allow a company like that to stay ifs. busin now, perhaps on the surface it seems like a good thing. they still operate you know nearly 400 stores with 23,000 employees. but what they're do something p takiductive capacity away from profitable businesses. >> um-hum. also competing with profitable businesses.

and then holding prices down and productivitydown, two key ingredients the fed would like to see high sfw thank you, jack, very much. jack ablin with credit capital bill. we heard from federal reserve officials this week after the split decision to cutt short-termest rates by a quarter percentup the vase chad rich clarida said the conser is in excellent shapehe ing the economy along but he said risks remain. >> we clearly have a swelling global economy, the oecd marked do global outlook. iviously the u.s.-chi relationship isortant but there is a broader slowdown. a slowdown in global capital spending andanacturing appear also disinflanary force. >> now names bullard, the the president of the st. louis fed says the manufacturing sector appears to be in recession part of the reason why he w wted a

deeper half percent cut at th meeting. >> but the call that caught our attention is not one usually heard from a fed official. in warning had to do with coworking spaces companies like wework and the risk they pose to the economy. steve liesman explains. >> boston fed president eric rosengren explaining his ecision to vgainst the rate cut this week. said the big concern is interest rates too low too rung canoo le to financial instability and bubbles in asset prices created by those low rates. and rosengren signalled out a business model used wy wek as a possible source of future losses and the boston fed president said low rates can encourage excessive risk taking, create too much leverage or debt in the system and causeto inv to reach for yield, one example he said, the real estate model known as coworking space used by we work which rosengren didid n specifically name. >> very aggressive monetary

policy has b bst some of the issues we have in the cycle with respec to stores i like we work. the question we need t ask ourselves is wework the tip of the iceberg. >> does it call into the value of the other unicorns does it have a ffflo-ont into the real kmm investment, spending and growth that then coule lead to s kind of unrachlg of this cycle. >> under the coworking space model wework rents vastom space landlords and become as major leaser in important real estate marts like new york and los angeles and even boston. it then subleases that space to tenants. so what's rosengren's problem withhiswi he said the coworking model involves short-terms lea to smallest mature companies the first to go under in recession.n landlords and potential are at risk because the don't have recourse in the agreements ck for the parent company of we work.

cities also with a lot of coworking firms in it can face more defaults because of the concentration. sengren doesn't believe that wework model with will create a downturn. what i says is it could make it worse once it happens. for nightly busines report i'm steve liesman rmts the in other news the white house imposed sanctions on iran'ssa central bk in retaliation for thettack on saudi arabia oil facilities. the trump administration beli es iran was responsib for the attacks. the iranian government defied it. treasury secretary steve mnuin said t new sanctions are designed to cut off the last remaining srce of funds for iran as we reported those weekend attacks, knocked out half of the country's oil supply. today hedley gamble got a lookk at the fields where the repair work is now under way. >> nearly a week after the worst hasor attack saudi aramco seen an assessment of the damage.

as you can see behind me significant damage to o of four stabilizers, one of four locations thater under attack around 3:40 a.m. in the morning over the weekend. aramco telling us they were able to put out the fires within three to for four hours of the attack but tha didn't stop at least 1 the.2 million barrels ber day from knocked outf production. this is one of two massive facilities under repair with the government hoping to ge back to full production as soon as possibs. and crews working around t t clock get the company back on track. earlier this week saudi defense officials showed evidence of what they say was iran's direct involvement. >> so aording to saudi defense officials 18 uavd were launc at the oil field. behind me is one of ace 11 hit in the attack this is a plate from one you can see how massive the damag that was done. 18 uavs fired ats t filt and seven cruise mitchells fired supposedly according to saudi

defense facilities at bothci ties. known as the mothership. this is the largest oil and g stabilizeners the world and days following the attack, the facility already back to 2 million barrels per day and oil minister says they return to full production by the end of th month. but the gaping holes punched through steel casing serb as a grim repipelineder of what using oil as aean can look like. i'm hedley gamble in saudi arabia. and in the newsni t, the dachgs caused by tropicaltorm imimelda. it has dropped 40 inches of raif in southeast texas makes it one of the wet wettest storms in u.s. history. compared t the devastation caused by hurricaneharvey. process officials are still trying to assess the full damage. it is time to look at some of the upgrades and downgrades. etsy upgraded to outperform from

sector perform at ebc capital markets. citing recent initiatives with a positive impact o the company's performance. re price target is $68. the stocke 2% to 60.41. coverage o rok was initiated with a sell rating at pivotal the analyst cites increasing competition in the streaming device siness, which he says could drive the cost of such devices down to zero. the price target is $60. the shares fell $19% to finish at 108.05 still ahead a high tech prognosis. > i'm bertha coombs in bosme. p on nightly business report, humana tlnl hub feels like a tech start upand that's the point as the medicare gnt makes a big push into digital health

♪ ♪ ♪ califalnia and 22 other states are sui the trump administration. the states are challenging the white house decision to a revoke rule allowing california to set rugher car emission standards. something weorted on earlier this week. california has been able to set its own rule since the 1970s because it has the most cars rn thd of any state. and it struggles to meet air quality standards. >> health insurers are alwaysg lookor ways to make health care costs more m effective. and humana thinks the ansr may ie i boston, which has become a hot bed for health tech

start-ups. here is bertha coombs. >> humanubigital health in boston has the look and feel of a tech start-up. >> it's personalizing to the members to use historical information. >> for the ceo that's the point. >> we're trying to bring different disciplines together to wrap around the whole idea of thisajill developopnt. and the ability to have conmer design individuals, the analytics capability data scientist zploos the company hired 75 tvelopers in new unit over the last few months and already the team has helped build out one of the insurer's first digital projects. the virtu primary care service with telemedicine provider doctor on demand hathe lau in january. >> we give you the tools that you can utilize through the phone, through the ip, where e're monster monitoring you health. and a signal is created we can bring that back to the doctors. >> it's a big investment for mana but the medicare giant

hopes the new hub will help it better compete with rivals like cvs betting on the retail healt clinics to improve care and upstarts by haven. amazon ven with your boston based in with the start-up community, the medicare giant presents a chance to develop services that can g national quickly. >> humana is doing some cool things with the digital health and analytics group to be able to integrate the entrepreneurs earlier in the prress. you are s tighter collaboration, which should ultimately compress the timeta kes tta bring atart-up company to market and scale. >> for humana speedingp the time to take develop technologies leveraging better care and lower costs for members is the key to holding onto them for the long haul. in what is increasingly a very competitiv medicare advantage

etrket. for nightly business report, bertha coombs in boston. there is a driving force behind many of this year's big ipos called strap. stripe handles all of the technology tha allows company to accept online and mobile payments and as dedra bosa tells us it has wide reach and growing fast. >> you can't see stripe-on it.ably haven't heard of >> of what. >> thewh app stripe? no. >> app, striem. >> no what is that. >> drive app. >> no. >> no, i haven't. >> the stripe app? no. >> but it is right in your pocket and behind some of the a biggests on the smartphone. the san francisco start-up processes hundreds of billions ofof dollars in payments annual for some of the biggest companies in the world. it was founded in010py irish brothers patrick and john calsen moving to u.s. for college

creating stripe which payment the payment infrandructure be a generationf powerhouses from lyfto ins at a cart to door dash less than a decade i later counts amazon google and target as customers. viep is now one o the highesthe valu private tech companies in the world known as unicorns having just announce add round of finances from some of silicon valley's most prestigious venture capital. for the next phase they may be taking on more risk. use be the fresh fund to expand to new international markets and into new businesses like lending putting it in competition witha other eshed companies like square and paypal for nightly business report, dedra bosa in san francisco. mcdonald's hikes the dividend and that's where we begin theke m focus w wh the fast food chain raising the dividend 8% t%$1.25 a share. e company ceo said the hike reflects the company's continued

focus d onving longest value for all stake hoerlds. shares fell a fraction with the rest of the market to 209.39. netflix took a hit after notes from analysts at everwoer said international growth could slow which it has been since july. this comes at netflix faces stiff competition this fall as sthe likes of disney p apple launch their own streaming services. netflix shares fell 5.5% to 270.75. the fda approved the expansionf two of merck's hiv treatments for adults viral areally suppressed the expanded label gives certain hiv one patients the choice to switch current the rpies. merce 1.5% to 85.16. wal-mart will s stopling e-cigarettes due to the growing global health concerns of vapingta the giant plans to continue to sell the current batch of nte-cigarettes the inventory runs out.

theut news did not impact altri which own as to li 20% stake in juul as shares were up 2% while wal-mart dropped a shack unthe shun. time tor the wtkly mar monitor three picks this week that he says can thread the needle between risk awareness and steady growth. joining us this week mike bailef director research at fbb capital markets. thanks for joining us. >> greatba to be . >> you've got two defensive plays and then a growth play. first defensive play very much a household name. color ox. why that one? >> so color ox some of the picks in week are relative compared do something. so for color ox one thing we like we like the space if you you want to be consumer staple great place to be. do you want the to own thety highest qua name or maybe something a little bit cheaper? for us color ox actuallyas c asttenaper relative to some others. for example procter & game a ce company been around a long time that one has gotten expensive. we think in the space you want

to own ahigh-quality company at a discount. color ox interestingly is a lot e.all they benefit from sort of the law of small numbers meaning ey can grow nicely a number of years. color ox versus a big competitor you want something more attraraive in terms of valuation. ext onis the is eli lilly a defensive play in your book but also offers growth at a reasonable valuation. >> that's right. so again on the theme of sort of relative, eli lilly interestingly is turning the corner from a boerpg slow growth drug company actually speeding up. they've got interests diabetes drugs and cancererugs. in s ways the new lily is like the old biotech. in the goodwill old ddws five ten years ago biotech companies were growing 5, 20% a year and big expensive valuations. lily isng tur into that. it's a big company, will be growing quickly and we think the valuation is pretty reasonable. in fact you are paying the same price as you would for the whole

market for a company like lily with a nice dividend a growing faster compelling. >> the growth playro is salesforce.com and pioneer in customers managemen does that coan if the economy slees down so does this any. >> it could if it's high growth now if you say lay off and things across the board in company will feel the heat. going back to the theme of o thinking from relative basis proces if you ownome defensive slower great gross growth names you want to jazz u it and add growth this is a higher growth company. you're right if we hit recession in the near term a big growth company like salesforce slows down. some of that skepticism may b overblown. they sell software into governments, non-profits into questionnaire areas we think even iou recession see spending. additionally if you are looking to save costs,ef you a big bank or something if you cut off the salesforce business that'ss what dri new customers.

it seems that's something you want tori stick with even the rezbleegs in the 30 seconds we have left, mike, do youeel as though we're headed for a recession self? or do you think the economy is doing pretty well. >> i think we're in i pretty go shape for what its worth as anecdote i passed t apple store on the way. there is a line out the door. the new app c phonesing through. if you think about the consumer near in good shape. the are other riskfactors. you have to balance it out. we're in good shape for a few more quarters until you see the slowdown. >> mo mike bailey wleh t fbb capital partners thank you for joining us. >> thankinyou. c up the profits made in preowned luxury goods. ♪ ♪ ♪

♪ here a look at what's to watch for watch more next weeks tuesday nike reports earnings find uting out in tariffsac i its business. there's been a lot of focus on the housing market. on wednesday new home sales f august will be released. and also on wednesday, a house panel holds a hearing on the o recent surge in vaping related illnesses. 's what to watch next week. finally tonight, though the market for used luxury cars usually referred to as certified prwned has become a big business. and now there is a big market for other preowned luxury goods like high-end watches. robert franke has our story. >> the luxury watch industry is under pressure. fromh slowing gro and trouble in hong kong, the world'sss largest swi watch market. but one segment is becoming.

online sales of preowned or used watches. analysts say preowned sales are growing twice as fast asew sales and will soo top the $20 billion a year in swiss watch exports. so wat makers, well they're fighting back. adam rp gate one of the most ite appear profitable brands is lawmakering a program to buy and sell preowned watches in the retail stores. buying back from a client who may trade up, refurbish and repair and offer it for with a warranty like certified pr owned cars. like cars new jewelry and certai wates can fall 20% or more in value once they leave the store. now they are starting small given ct and time of restoring watches buthe company says the move is it less about added profits and more about better serving clients, cracking dn counterfeit and managing resale provides for watches that figures

>> they only took care of their he secondld and nefrp one. so basically we, the whole watch companies, left the secondary, the preown business to outsiders. and i think it's about time that we are bringing these back home. >> watch maker nbnf bringing home the $70,000 on thehouse. the noerp owning cartier acquired watch finder for over $100. milli giving reach month a plarmt to sell its own preownednd b lex which drives much of the preowned market decliend to comm on plans. but others are likely to follow as younger buyers are changing the pace of watch buying. >> 20 years ago you could have bought a watch for your life that was oneatch, one watch for your life today people trade every three mths six months. >> for "nightly business report"

i'm robert franke. and before he go another look at the final day's f the numberm wall street. the dwou fell 159 points. the nasdaq down 65 and the s&p 500 slid 14. with the selloff the major averages snapped the three-week win week streak. and nightly business report tonight. >> i'm bill griffeth. have a great weekend. see you monday. ♪ ♪ ♪ ♪

woman: this is "bbc world news america." is made possible by... the freeman foundation; by judy and peteti blum-kovr foun, pursuing solutions for america's neglected needs; and by contribution to this pbs stat from viewers like you. thank you. nada: this is "bbc world news america." reporting from washington, i am nada tawfik.