. this is "nightly business report" with bill griffeth and sue herera. tde talks loom and investors aren't sureha to expeju.orher tariffs go into effect. baseball backlash. a single tweet has thrown the nba into a geopolitical crisis with china threatening billions of dollars in a critical mark. slowing down. why autonomous vehicles are not yet ready for primetime even as car companies increase their investments in that technology. those stories and more tonight on night"nightly business repor monday, october 7th. and we do bid you a good evening, everybody. welcome. stocks started this week

searching for direction. the latest round of trade talks between the u.s. and china are going to be hanging over o this market all week just days before higher tariffs are scheduled to take effect. investors are trying to gauge what if anything are going to come out of these talks and so far they'refa getting some mixe messages and that caused the push and pull that we saw today ending with the dow down 95 points to 26,478. the nasdaq was down 26. the s&p slid by 13. kayla tausche starts us off tonight from washington. >> reporter: roundnd3 of u.s.-china trade talks kicked off in washington today. lower level officials meeting to figure out a menu of items for cabinet-level negotiators and potentially president trump to take up later this week. with tariffs escalating in days, a potential meeting between trump and president xi in weeks and critical election primaries in months. here's president trump today. >> i think that we'll just have to see what happens. i would much prefer a big deal and i think that'shat we're

shooting for. can something happen? maybe. who knows. i think it's probablyro unlikel >> reporter: white house advisors are hedging their bets. larry kudlow, open minded. >> we are waiting for the chinese offer. we are open to almost anything. >> reporter: peter navarro said any deal will have to be t comprehensive with new laws to combat technology theft something chinese officials are signaling they're unwilling to offer. that's been a deal breaker for the white house in the past. u.s. officials want to avoid anymore self-inflicted economic wounds. the u.s. will have a hard time completely rolling back tariffs now. >> the predent is going to get much less out of this thanf was advertised originally and so he's going to have to say that he's going to keep some powder dry in case commitments are not made or in case we don't move forward. >> reporter: the next round of tariffs will hit consumer

electronics like isos and laptops. giving an advantage to foreign competitors like samsung who don't assembl products in chi and driving up prices for those that are. for "nightly business report," i'm kayla tausche in washington. so what is the market hoping to hear from the trade meetings at the end of the week? we're joint by david leboits from jpmorgan asset management. welcome back. >> thanks for having me. >> what does the market anticipate or want to hear at this juncture? >> so i think that the market is operating under an assumption that eventually at some point we do get some sort of deal. i think in terms what the markets wants to see with respect to this week and the next couple of months is the tariffs that are on the cusp of going into effect, seeing that can get kicked, seeinin no escalation in terms of where things currently stand. i don't think the market is expecting this to go away but maintaining the two steps forward, one step backypef

narrative that we've seen in play for the past 18 months is what the market is pricing in. >> there was a survey of the economists that make up the national association of business economics. a majority of them said they feel like the u.s. could dip into recessi next year largely because of the tariff situation, the trade war. so our question is what would keep us out of recession? prritize some of the issues that they are going to be negotiating this week. is it something to do with the consumer? manufacturing is already in recession at this point. is there something they could do to pull that out at this point? what do you think? >> i think mufacturing is in a a tough spot, and what happens with manufacturing activity, not just in the u.s. but around the worldoing forward, is going to be beholden to how trade talks develop. in terms of our view on where the u.s. economy is headed, it really all comes down to the consumer. manufacturing goes through many cycles every 18 to 24 months.

we've seen a couplpl of them through the course of this expansion. the consumer has been able to offset that weakness. they are actively offsetting that during the current episode. the question you need to ask yourself, we look at last week's job report. we see the pace of job growth slowing down. the consumer isn't headed off of a cliff but consumption is obviously a function of whatha goes on in the labor market and you're seeing companies begin to pull back a little bit. so that's something that we need to keep an eye on as we gauge the longevity of this expansion. >> very quickly, if these new tariffs go in, they are going to hit a lot of consumer electronic products. >> yes. >> which could have aampening effect. >> absolutely. that's why this final round of tariffs is so scary. up until this point people don't buy washing machines every year but they do buy phones every year so we need to think about, you know, what is in this set? it's morelltive to the way the consumer spends their money. >> thank you as always. >> thanks for having me.

as we've been reporting for months now, farmers here in the u.s. have been hit with a one-two punch, the trade wars weather. now that in turn is hitting demand for farm equipment. we sent frankolland to e moline, illinois, to see how that industry is fairing right now. >> reporter: farming is cyclical. a time to plant, aa time to harvest and a time to buy new equipment. >> i'm being very conservative about large equipment purchases. >> reporter: bill foreis a sixth generation farmer >> planted fairly early may so there's seed beans in those pods. >> reporter: he's one of many farmers who say they've been directly impacted this season by floods and rain in the midwest as well as the ongoing trade war reducing demand for soy beans. >> the farmer in the u.s. is obviously in a worse position than they were a few years back

to be buying combines and tractors. i'm trying to ttoe a wait and see attitude, maintain the old equipment and then if times improve we'll roll into some newer tractors or combines. >> we've backed off of any capital purchases of anything very high dollar. we'redo going to ptpone anything in the future for probably a full year, possibly two years out and just maintain the line that we now have. the income just isn't there to justify a new high dollar purchase. >> reporter: major manufacturers seeing the uncertainty of farmers hitting their bottom line. farming equipment shipments are down 18% year to date from a peak in 2014. john deere wil layoff 160 workers later this month and in november after reporting a 6% decline in salesor its agriculture division last quarter. agco reporting sales of tractors down 2%. combines down 3% in the first half of the year. john deere is the region's

largest employer and people who live hearsay they have a mixed outlook on downturns and layoffs. >> i believe the farming industry moves in cycles. i see that, you know, we have layoffs and shutdowns for a while but it seems like they always call people back. >> it hurts everybody. i mean, it's just like a downfall, you know? machinery costs go up, people se their jobs and it's really bad. >> reporter: with trade talks resuming on thursday, farmers say they're hoping for a new deal that will give them the confidence to buy new equipment. here in east moline, illinois, frank holland, "nightly businesi report." meanwhile, americans slowed theiei pace of borrowing slighty in august. according to the federal reserve, credit card debt actually fell but auto and student loans saw their biggest jump in three years. economists, of course, are watching the consumer for any signs that households may be

pulling back on that you aeir s. and the health of the consumer is key to the housing market. but a funny thing is happening. a new survey shows consumer confidence in housing is weakening just as homes are becoming more affordable. diana olick explains the disconnect. >> reporter: lower mortgage rates are making home buying more affordable, but concerns about personal financing are eating into overall confidence in housing. consumer sentiment in housing fell in september from its august high according to a monthly survey from fannie mae. why? well, because more americans said they are concerned about losing their jobs. that was the secondastraight month that componentf this rvey rose. this as mortgage rates now sit at the lowest level in over a month and are significantly lower than they were a year ago. the average rate on the 30 year fixed mortgage is around 3.64%. that means that about 21% of the national median income is required to make the monthly principle and interest payments

on the average price home. this is the second best affordability rate in nearly two years. it also adds about $46,000 in purchasing power. that's boosting home sales and mortgage refinances as current homeowners take advantage of potential savings. >> i'd say most of the folks out there today should think about getting a refinance because these rates a now at historic lows. and, in fact, we're actually seeing the purchase market pick up. september was a very, very strong month for us from a purchase perspective. i think interest rates help that as well. >> reporter: so far lower rates seem to be outweighing weaker confidence fueling the markets and values. if home prices overheat again and rates turn higher, the scale could easily tip in the other direction. for "nightly business report," i'm diana olick in washington. time to take a look at some of day's upgrades and downgrades. shares of uber were upgraded to buy from neutral at citi with the analyst saying the third

quarter results may help investor sentiment. the results will be released next month. price target, $45. the stock rose 2% today to 30.37. etrade was upgraded to buy from neutral at ubs. the analyst says etradeas the most value of anyny of the onli brokerages. price target, $41. that stock gained 2% to 37.22. wendy's was downgrad from market perform to over perform at cowan. the push into brek nast could be costly. the price target is $20. the stock finished just about at that level at $20.11. carnival cruise line was downgraded from hold to buy at hsbc. they cite the potential for alaker bookings in 2020. the price torgt $33. the stock fell to $40.91. still ahead, a foul has been called on the nba in china and now the league is in crisis mode.

general electric is freezing its pension plan for 20,000 employees. the decision is designed to reduce ge's pension deficit and shore up its balance sheet. about 100,000 former ge employees who haven't started receiving pension benefits will be offered a limited time lump su payment. no changes will be made for retired employees. the stock was down a fraction in today's trading session. general motors is temporarily laying off another 415 workers, this time in mexico, due to the strike here in the u.s. company had to halt production at a v-8 engine and transmission

plant in mexico because of a shortage of parts. today's layoffs are in addition to the 6,000 temporary layoffs announced last week. meantime, over the weekend united auto workers officials said the talks with the company had taken a turn for the worse. the striwo is now in its fourth week. many agree that the consumer is in good shape and that bodes well for restaurant stocks which begin reporting earnings in the coming days. but the consumer isn't the only thing driving business in tha industry. kate rogers takes a look at the sector and what to watch when earnings are released. >> reporter: is it time for vestors to dion restaurant stalks?? the next few weeks could hold the answer. it used to be that the strength of the consumer would make or break the quarter but not anymore. the industry has gone through a big transformation, including the growth of delivery services. americans spent some $10 billion on third party delivery last year alone. mention these companies by major restaurant playersaveeeee on

the rid in recent years. it's been a big boost for brands like chipotle and mcdonald's as they expand their reach. dominos admits it's being pressured. >> if you look at the trends over the last roughly 12 to 18 months or so, off premiseales have been the biggest driver any sales growth for the industry and a principle part of that is delivery. you know, dominos certainly has felt the surge in third party delivery providers. >> reporter: then there's the restaurant itself. upgrades and new technology, things like kiosks and mobile order and pay are attracting new customers. bothtarbucks and chipotle have continued to esize new offerings and have seen loyalty programs increase as a result. >> if you look at where the real success has been in sales growth related to technology, certainly mcdonald's is one of largest.es chipotle has been very, very successful. starbucks has been very successful. all of those companies are, i

think, you know, great examples within the industry where economies of size and scale and the ability to invest in the business is really making a differen in their sales trends versus a lot of the smaller operators. >> reporter: and finally analysts will be looking out to hear how value is playing among consumers as recession chatter continues and how new menu itemn like plant-based meat at places like burger king and dunkin' are performing. for "nightly business rort,"or i'm kate rogers. harley-davidson's ebike may be stuck in neutral and that's where we begin tonight's market focus. reuters says that the motorcycle company is seeing weak demand for its newew line of electric bikes that are called live wire duo a nearly $30,000 price tag and a lack of interest from younger and more environmentally friendly riders. harley shares fell about 3.5% on that news to $34.11. lavongo health has won a government contract allowing thcompany's diabetes management program to now be

offered to federal employees who either have type one or type two diabetes. lavongo says it will increase revenue up to $60 million and bring up to 45,000 new customers over the next few years. shares jumped big time to $20.50. conocophillips is hiking the dividend 40% to 42 cents per share. they announced a $3 billion shareuy back next year. conoco rose 2% to $54.60. dick's sporting goods is looking to hire up to 8,000 seasonal workers for the upcomi holiday season. next wee they wbe hosting the second annual national signing day. dick's hired ir5,000 employees that job event last year. shares were basically off more than 2% today to finish at $37.94. the nba finds itself in the middle of a political crisis.

one of the teams most popular with fans in china now finds itself in hot water all bause of one tweet. and as eric chemey reports, there are billions of dollars at stake for the league which has spent years growing a massive audience in that country. >> reporter: houston rockets generara manager tweeting on friday night an image saying fight for freedofrtand with hong kong. that led to an immense backlash from the chinese government and some of the nba's maj chinese partners. the nba releasing its own tweet calling the tweet regrettable while tillman fertitta disstatad himself. e fallout has put the relationship with chi on thin ice, a relationship that the league has been carefully nurturing for decades. the china division is worth more than $4 billion or $ $133 milli per team. while the league has allowed

players and coaches to be vocal on domestic political issues, it has taken a different issue with china. they have boasted about the 300 million basketball players in china and the 500 million people who tuned into an nba game last year. over 2 million people watched game 6 of the nba finals. the league's media deal with china's ten cent is over $1.5 billion. ten cent has already said it would not show rockets mes. that comes as a slew of other chinese sponsors have cut ties with the rockets. that is a twist because the rockets are perhaps the most popular nba team in china due to yaw ming who played for the ckets. yao is now the chairman of the chinese national basketball associati association. they will play in china this week as part of the preseason global tour. joe tsai is a co-founder of alibaba and issued a lengthy statementem connecting it to

foreign interference and the threats to its territorial integrity and sovereignty. at stake is a business thain ha been notching double digit growth in china since 2008 and internet viewership on ten cent just four years. for "nightly business report," i'm eric chemey. so with billions of dollars at stake for the nba in china, the league clearly is in damage control right now. joining us tonight with some thoughts on that, dean crutchfield is with us. good to see you. welcome back. >> thank you ver vmuch. >> commissioner adam silver is going to be in china as part of the exhibition games. he's gng to hold a news conference. what do you think he should say? >> i think he's got to be very direct about his message. you know, he's got to be, yes, apologetic to china for the upset it's caused them. he has to defend american principles. we have to show leadership. that's what makes america great. there's billions of dollars as we know at stake here so it's a very sensitive issue.

he's basically going to be skipping through the rain drops figuring out howo manage it ve delicately. what he does need to do is respond boldly. what can that mean? can mean dferent things. most importantly it has to be done in bold steps forward and done with the view that america is good. >> but it is a fine line, is it not, because the league is getting criticism from players and from politiciansut bowing down to china. how does he walk that fine line? how does the league and the player sz walk that line? >> what you need to do is look at what's the bestessage to put forward? marketing is a great way of unifying peopleo and what's needed in this crisis right now is going to be a lot of marketing coming out over the next days and weeks because that can unify. brands are meant to bring people together. sport has many unifying points of view. this is about a sport. they can use the sport as a platform, as a mantle to communicate a essage of how to unite people's points of vieww arnd celebrating sport.

so basically what he needs to do is defend the position they took. he needs to deny that there was anythingngbout sovereignty or any imposition towards china and he needs to deflect the respspsibility of the situation to darryl moray who made the statement and did the tweet. that's what they need to do. so defend what they said, delay the ultimate response, deflect the responsibility to moray and basically defend their position. absolutely critical. >> along those lines, should rockets owner tillman fertitta fire the general managhe who tweeted this? >> look, if this is another business he would be fired for this. this is a breach of conduct. this is a situation where you've made a statement you should have known shouldn't have been sent. you didn't seek permission. in a corporation this is a fireable offense. i think thehe ultimate thing th need to do is they have to get rid o o moray to show they mean business. >> going to be interesting to see what adam silver does say. >> dean utchfield with

crutchfield and partners. thank you for joining us. >> thank you. coming up, want to let your car do the driving? experts say, not so fast. about 1/4 of health care spending here in the u.s. can be classified as wasteful. at's according to a new study from humana plished in the journal of the american medical association. complex administrative structure accounted for most of the waste followll by things like failure of care delivery, failurere of

care coordination a overtreatment. the study estimates that roughly half of all wasteful health care spending could be avoided. well, elon musk and others are promising the arrival of self-driving cars within the next couple of years, there's a growing number of executives in the auto and tech industries who are pumpinghe brakes on thosehe expectations. they say it will likely be many years beforeou see driverless cars zipping around your city. phil lileau has momo. >> reporter: from autonomous mini vans in arizona to self-driving cars on the streets of san francisco, the auto and tech industries are getting close to putting driverless cars out on the road in large numbers, but experts say slow down. >> they're not ready for primetime yet. there's a lot of development that has to take place. >> reporter: dr. mark rosekind and the team at zooks are designing an autonomous vehicle. he and others admit t technology still has a ways to

go. >> we're still very much at the learn, put it out there, understand how people are going to use the technology and then build a business around that. >> reporter: his company, aurora, which develops autonomous vehicle technology says the potential benefits for freight companies, meal or package delivery firms, even ride share operators is enormous but still unproven. that's not stopping tesla ceo elon musk from phing his p company's auto pilot techn togy as the next step of letting the car do the driving but fender benders and close calls with driverless teslas have some wondering if e public is ready to accept this move. >> the public's going to have to trust these. if we don't have new safety metrics, transparency and experience with people, we're not going to see the widespread adoption that's going to make this truly transformative. >> reporter: which brings us back to chris ermson. as a leader of ogle's self-driving car project, he talked about the future oe

autonomous cars. >> our team's goal is thaty 12-year-old son won't have to get his driver's license because he can get places. >> he turned 16 about two weeks ago. and so he can get his driver's license. hens hasn't yet gone to go get so we are -- i think when we looked forward from five years ago about this technology, i thinkkerhaps we're a little bit more optimistic about how quickly we cover the ground. >> reporter: the bototm line, the technology driving autonomous vehicles is coming along quickly but most in the industry are now more realistic about predicting when we will see large numbers of self-driving vehicles out on the road. in fact, many believe that won't happen until well into the next decade. phil lebeau, "nightly businegh report," chicago. and finally tonight, the joker had the last laugh over the weekend. they had the biggest october opening of all time raking in $96 million at the domestic box

office. that figure beats the previous record held by the spider man spinoff "venomom for the warner brothers studios, it was its biggest debut in two years. before we go, here's a look at the day's final numbers on wall street. the dow fell 95 points. nasdaq was down 26. s&p 500 slid 13. that is "nightly busibuss reportss tonight. i'm sue herera. thanks forthoining us. >>'m bill griffeth. thanks for joining us. see you tomorrow.

woman: this is "bbc world news america." is made possible by... the freeman foundation; by judy and peter blumumovler foundation, pursuing s sutions for america's neglected needs; and by contronutions to this pbs station from viewers like you. thank you. laura: this is "bbc world news america."