this isghtly business report" withue herera and bill griffeth. ♪ streaming profits. netflix saw its earnings grow but subscriber growthbuissed expectations as the company gets ready to face more competition. taking a break. nsumers pull back on spending in september. andf investors wonder i the main pillar of growth is becoming shaky. house huers, be with the pickin slim for affordable homes. and some say the problem could get worse. those stories and much moret toni on "nightly business report" for wednesy, october 16th. > good evening abeveryone. and well. a critical quarter for netflix which f a very l lg time dominated the streaming video industry. ght netflix reported better revenuebout in line with

expectations but the company did bers as as many subsc this it thought it would. and in a few weeks it faces new competition from app and disney. but investors chose to focus on the company profits. julia boorstin starts us off tonight with more on netflix's quarter. netix shares soaring desp e lower than expected guidance for the fourth. quart investors appear reassured by better than expected earnings and international growth in the thirdquarter. also potentially reassured by frank compensatary by hayesings in the letter to shareholders about competition. thishead of disne plus and apple tv plus launching next nth. hayesings saying netflix has been preparing for the new wave of competition for a long time. saying, quote, the launch of the new services will be noisy, maybe modest hdwinds to near-term growth but we tried tt factorhat into guidance. in the long-term wee expect to grow niecely given strength of service and large market opportunities. now, the question is whether

netflix can indeed add the 7.6 million subscribers it forecasts it wl add in the coming quarter even with rivals launch.plus and apple tv plus for nightly business report, let's turn to amoeby to talk more aetutix on the streaming wars. tuna with cfrareern. good to see you welcome back. >> thank u, bill. good afternn. >> is netflix in your view ready for the added competition. >> you know i think they've been can to get ready for the they intensified mpetition. we have seen the ratchet up content spending and starting to skew those from license from license to regional and that wi continue. next year goingrom s.e. 15 billion cash conte up to $17 billion or more. you see tt pathway is rlly preparing them for quite some time. my sense and seeee they're goin

to obviously bone of the potential winners here. >> what about the subscriber growth which came in a bit short certainly, still healthy but short of what wall street was looking for. toes that concern you at all it's coming at this juncture right before the competition. >> i think that'smp antant observationn at this point in seeing kind of a bifurcation o growth where the u.s. on the ons hand iswing signs of maturity. ton the other hand i thire is still a lot of potential upside on the international market of which we think lroal languagection is going to be one of the catalysts for inrnational growth also markets like india where they are shifting towards mobile rst. so all in all i think there is really a lot to be said about the upside internationally. the u.s. i thinkt's inevitable when you look at definitelyng to be some kindis

ofeaking of that growth for y,tflix sooner than later. >> quic next month it's apple plus and disney plus early next year it's peacock which is owned by our company, comcast that own us and then hbo max. who providesat the gt competition do you think for netflix? >> you know, i'd have to sa you know, disney. >>yeah. >> for what i think are obvious heasons . i think the content pipeline that disney brings to the table with t disney plus frankly it's -- you know, it's ground know second to none. you throw in all the other companiesonou men everyone is pulling out all the stopts, ratcheting up spending. and doegt forget pulling out the most popular shows off of netflix, which again trying to give themselves a good head start in what's really becoming an intensifyinfy landscape. cfra research.

tuna, thank you for joining us. >> thank you bill. ibm alsoeported earnings late today. big blue's revenue disappointed but the profits were bert than expected thanks to growth in highargin cloudomputing busine. that busines haseen a focus for thefo ceo whoasried to lower ibm's dependens on its traditional hardware products. but it wasn't enough for investors. sent the stock lower in initial after hours trading. dea bosa has more. >> reporter: ibm still which is.ze its the computing gnt has made big bets inl artific intelligence and cloud computing. but the company c has seen more than fiv ostraight quarters being declining revenue this quarter the first since closing the deal with red hat,es the bi acquisition ever. ibm saw the choud revenue grow 14%, a significant improvement from earlier this year. the rate still trailing cloud players amazon and microsoft. cfo james kavanaugh telling cnbc

that they are driving growth in key value areas and is pleased far with the red hat deal. for "nightly business report," dedra boss an, san francisco. >> as for the market itself it was remartebly flat in s of all the economic reports and earnings news, the dow never strayeer far from the unchanged level as t all major averages still remais within striking distance of their all-time highs. at the cle, the industrl erage was down just 22 points, still above 27,000. the nasdaq lost 24. the s&p was down almost six. the president of the ccago fed said no more interest rate cuts are needed this year process charles evans thinks the economy and policy are both quote in a good pla now. the market, however is anticipating anoer rate cuter at its mting later this month. evans is a roeting membmb of the federal open market committee. two new economicmirowths makers could help policy decide whether another interest rate cut is needed.

first there was the fed's own hirvey of the economy called the beige book showed some softnessn some secto due to trade then there was a surprising cline in retail sales in september. stevev liesman ties it all together for us. >> theederal reserve beige book reported sloilt t modest grout toughout the kr country in septembernd early october adown grade from the prior survey the collection of the reports from the 12 district banks found trade tensions and slower global growth whegh. on u.s. economy. many businesses reduced outlook for growth in the next 6 to 12 fnths. the new yor said growth was subtwo asset and boston found soins o slowing widespread. kansas city and chicago reported only slight groh. kwhiel manufacturer lower head countsd a soft orders. gains were tempered were worker shortages in manyis places and. industri the report comes as fed officials weigh whether to cut interest ratesgain at the meeting later in the month.

markets price in a third quarter poinrate cut but fedfficials seem more divided. the two rate cuts some see economic news provided are providing for stimulus to the economy. they got that today in the september retail sales report sharply disapp to the downside. th 0.3% dlng in september compared with expectations for a 0.3% increase. auto furnish urn you and s departmentre sales declined sharply. apparel one of the of the sectors seeing gains. economists now believe thent reompleted third quarter grew at 1.5%. about half the pe of growt registered in the first quarter. the question is whether there will be additional slomng f here. for "nightly business report," steve liesman in washington. >> brett ryan joi us now to talk more about the retail sales report, maybe telling us ansut er spending. he is the senior u.s. economists at deutsche bank. welcome, nice to have you here, brett. >> great, thank you for having >> how do you int the report. yesterday the bank said the

is spending on credit cards.win, and today we get in report. is it an outliar orgn. >> i think bank earnings are backward earnings it's the previo three months of the year. and while 70% of the decline in retail sal t tsonth were auto -- ao related, exautos were also down. and the weaknes was a little bit broad based. and that would be less concerning, you know, we could say -- that was the first time since february, by the way. it would be less concerning if we had a clearca lyst. but this is alsoccurring a amid slowing j growth, slowing hours worked and wages beginning to move sideways. wage growth that's slowing. you know, in a -- in an that wouldtrong data be fine. with you we see other signs of weakness in the data and that's concerning abo this report.

>> i want not justanbout one report. you feel like there is tgi ing of a slowdown here for the consumer, which has been the main gwth engine for the economy, right. >> that's corrt.s we think the consumer is getting more ctious as -- as i noted hours worked have been slowing. the pace of hirin you're seeing more evidence of slowing there. firms, business sentiment has beeneclining since the beginning of the year and the risk is that business -- the slowing of business sentiment spills to consumer sentiment. d consumers becomore cautious. today is a possible sign that we are beginning to see that. more rate cuts by b the fed. is that -- is the fed goi to be ablo keep the economy from slowing down too much? or possibly even going into recession? >> well, it remains to seen how much monetary policy is needed to -- to sortf address

these downside risks. do we see the trade -- tde war resolution shortly and that boosts business sentiment and compmpies begin to invest for growth again? >> um-hum. >> or do companies remain cautious durgs during of election year in which there is domestic policy uncertainty in addition to trade policy uncertai ty. >> wellre will be a lot to talk about, thanks so much, brett. orett ryan. >> thank you having me. >> with deutsche bank. >> time to look at upgrades and downgrades a couple to tell but. johnsonance john upgraded to neutral from underweight at atlantic equities with the analyst citing the growth potential across t theee main business franchises,rice target on & $129 and separately there are reports tonight that j&j has offered to pay about $4 billion to settle lawsuits accusing the company of contributing to the crisis. stock was up more than 1.5% t

153.. ade was downgraded to neutral from buy at citit the analyst citing the potential for limited margin expansion in that business. pricene target, $313, shes fell more than 123% today to 272.70. still ah bd, the bet the casino industry is making on the future of the vegas strip. ♪ ♪ ♪ ♪ ♪

♪ general motors and uawd confir the two sides reached a proposed ttative contract agreement that cld end the monthlong strike. leadership and rank and file till nee to et vote on the deal and theyy called a meeng for tomorrow. details of theeal not known yet. but workers had been asking for a bigger share of gm profits and for moreit job s among other things. 48,000 workers walked off on septemberth. it's estimated the strike cost the auto maker rough billion. share of qm rose 1% today. >> home builder confidence rose to its highest level in nearly two years. economists credit lower mortgage rates and steady job market. the industry expects sales and demand to grow. this report marks the fourth >> and the housing market has fall thanks to those lower s mortgage rates. but buys are coming up against b one of t barrierso entry, which could get even

worse in the coming monons. diana olick explains. >> i have a listing going live in two >> anyone out shopping for a home today already knows the pickings are slim they will likely get slilier. the supply of homes for sal hitting a record low two years ago but then mortgage rates orstarted to rise anduyers pulled back. it was s slowing this year. and that helped build the amount but then mortgage rates dropped the summer. and demand came bk in a big way. eating away at supplies again. >> it's going to be veryer frustrating f homeuyers ee right nowg the low mortgage interest rates but no easy available supply of >> national housing inventory fell 2.5% annually in seember, a sharper decline than in august, according to realtor.com. and its worse on the low end. the supply of homes priced below $200,000 is 10% smaller than a year ago demand also iurged the move up market.

the spli of homes for sale priced between,7 2,000 which makes make up 60% of the market flat lined in stember after 18 months of strong inventory growth. supply is now expected t and the nation's home builds are not helping much either. single family housing starts have been rising slowly and mostly in the move up and luxury due to higher costs for construction. >> we fac what has been cled a perfect storm of supplyside challenges. thers been anngoing labor shortage. we lack the necessary land and lots to build homes. we have had building material cost concerns. and tn probably the most important factor has been higher regulatory costs since t great rezbleegs low supply coupled with strong demand is recipe for higher he prices and prices are already pretty gh. if rates move higher thakecould ff the heat.

cot if they stay close to where they are now, wd be in for one of the tiest and most competitive string markets in story. for nightly business report, o dianalick in washington. bank of america posts solid results and that's where with he begin tonight's marketocus. the bank topped analyst expectations driven by strong consumer banking, which is b of a's biggest business and increase in investment banking helping to offset interest rates cuts. shares rose 1.5% to 30.17. bank of new york melon posted bert thanfi expected p by cutting costs to help offset oft softness innnvestm management unit and lower interest rates but the bank missed street revenue expectations the fifth te in the last 8 quarts. bank of new york was up a fraction to 44.44. fiat chrysler reportedly may be hit with about an $80 million civil penalty for not melting economy requirements in 2017.

routers says the ut maker received aivotice from government regulators and h two months to respond. they paid about $77 million for the same violation in the 2016 models. but shares rose today more than american eagle said today it plans to hire nearly 10,000 seasonal workers this year but less than half the number it hiredr.ast y the retailer though will be holding airing event this weekend at stos aroundhe country. shares rose a fraction today to $15 and penny. alexion is buying achilli pharma for $930 million. helping them expand the the pipeline of drugs to treat rare blood disorders. achillion shares s row rocketed to 6.27 while alexion fell 99.51. and csx beat profit expectations while revenue in line forecasts growth in railroad

merchandise segment helped offset decnes ind coal intermodal shipment units. shares rose in after hours trading but closed the regular session down a fractn as 69 even. mgm resorts is selling one of the signature o properties the las vegas strip. by blackstone, paying more than $4 billion for it. and the selling ofheand to raise cash is becomingne of the biggest trends in the casino industry. contessa brewer isn vegas for us tonight. >> the bellagio with its dancing fountens is one of theee must sights but it's about to have a new owner.ea blackstoneestate income trust or a reit. mgm resorts is sellingsi the resort and raising billions in cash. >> we're goingo reduce our financial levere. all the money we receive from blmkstone here at belgio will go to reduce our financial leverage. by the end o 2020 our balance

sheet will be vastly stronger than even >> mgm will continue to operate the bellagio and pay rent to blactone. visitors shouldn't see a fference. for the company, the difference versus a property company. >> the capital markets h he been very clear t over past five years, ten years that the sepation o real estate from is a capturing the highest value in stock pricings. and mhatsage has come across loud and clear. >> mgm deployed the strategy with morthan a dozen other properties. among them mandalay b and new rk, new york in las vegas. borgata in atlantic city.pa and other ces are increasing looking to entice investors, maximizing cash by selling the property under the casinos to reits. crease a ar did when it emerged from bankruptcy selling many properties to the reit viccip pern national cuy operates sre casinos nationwide tha any

other company. but many ofie the prope themselves belong to the reit gaming andeisure properties. in the volate casino industry, carbon hand is s aety net worth having. >> are you anticipating another recession? >> i'm anticipating that we're late in an economic cycle. and i want to t prepare for thee unforeen. and i want i want to be stronger asach incremental day goes by. >> mgmll is seg circus serkz outright a famous destination on the strip for more than0 years. treasuresland owner phil rough million dollars.and the says itl sell the mgm brand. it's aong-term high stakes bet er rentings owning.g. in las vegas, contessa brewer, "night business report." >> and coming up, volvo rolls an all electric car but are buyers ready for a plug-in suv?

♪ ♪ the is yet another front in the trade war with china. one that is t not often talked about. it's rare earth. meta which china produces a lot of. and which american business needs a lot of. here is brian sullivan. >> rar earth, 17 minerals mau barely remember from high school chemistry oreoloy. funny sounding names. le ty look like litite more than sand but perhaps the most strategically important minerals in the world right now. if you want a cell phone computer screen ob electric car or rechargeable batrywith, you need the mirms. they're also critical to the productionf mag nets. necessary for building renewable now the united st used to be a world leader.

but 20 years chiur f out how important rare earth would be and boosted supply. prices crashed. soon,on it was no lr profitable to operate mines in the united statete the last marilyn rare earth company in north america, molly corp. filed for bankruptcy four ars ago. now rely on china for more than 90% off rare earth production or processing. creating a big probl process. and not just a problem for consumer technology but for national security. many of these elements are critical components in defense systems. so criticaln fact theru administration put out a report highlighting their importance saying, quote, the assured supply much the critical minerals and the resilience of splay chains are essential to the suns economic security anda nati defense. the long-term concern, is that mcwill control so mu rare earth mining and refining that it will be able to dictate price and availabity around the world. for "nightly business report"

brian sullivan. controversial and inappropriate comments made by ken fisher of fisher invtments flechld's board of engss terminated the business rnltwi fish he were amounting $million following a similar decision by michiganga retireme system pulling 10 million. fidelity is revieieng relationship is the money manager as is the florida state board of administration. and the boston mayor has asked that city's retirement board to end its relationship with fisher investments. the comments were made at a recent financial conference in a memo to employees obtainedy routers fisher apologized. >> volvo is the latest auto maker to roll outan all electric vehicle allt of the wave of plug in mod ms the stre plans to put on the road in the next five yeart s there enough demand for vehicles powered by electricity in a world with relatively low

gasoline price sns phil lol bow has the story. >> reporter: this is the latest model in a slough of electric vehicle that is could dramatically changehat we buy and drive in the future. the xc 40 volvo's first all electric model going on sale ne year. >> an electric car is not just environmental friendly. it has some other big advantages. it has a superresponse. it's quiet. and i think one of the most important things is you can fuel it at home. >>olvo says that buy by 2025 it hopes for evs to makef up h of the global sales. and ambitious gl since electric vehicles make up just 2% of all the models sold inhe world. and an even lowe plocente in the u.s. still, auto makers are rolling out more and more evs. so how tough will it be for volvo to convince buyers to buy a plug-in suv? >> i think volvo will be facing a lot of the same challenge that

is every auto makers faces in the ev marketace. l there is not oferemand there. and there is concern about things like range andane. pric and btery condition opinion. and how long those last. >> the other issueng slowi down ev sales,ap c gas. in fact, prices have been so low for so long there is little pain at the pump. as a result, most car buyers rarely think twice about buying a gas powered vehle. but volvo ceo is undeterred. >> ourse the fuel price is always a certain headwind but it goes up and down. i think you hav to act of course long-term. but you should also remember the other advantages with the car. an electric car. quiet, a really good response and that you can fuel it a i home. >> while electric power trains are comingo every type of vehicle, including pickup trucks, the reality is it may be several years untilplug-in models take off in large numbers. d even then aut makers like

make sureheir ev stands out to from thefrthers expected to be? show rooms. phil lebeau, nightly business repopo, chicago. and before w go, here is a anototr look at the day's final numbersm wall street. the dow down 22 points. stilst just above the 27,000 level. the nasdaq lost 24 and the s&p was down almost 6. and that is "nightly business report" tonight. i'm sue herera thank you f joining us. >> i'm bill griffeth. have a great evening. see you tomorrow. ♪ ♪ ♪ ♪ ♪

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