♪ >> announcer: this is "nightly business report" with sue herera and bill griffeth. ♪ broad breakout. the dow closes ator a r powered by a handful of stocks about to hit new hi is. >> going pri ite. walgreen exploring the idea. and if it happens it would be the biggesteveraged buyout ever. >> zero-sum game as bro s ramblingssh fees there may be a downside to no cost evesting. thostories and much more tonight on "nightly business report" for tuesday, november5 th. good evening, everyone and welcome. the dow gains were small but enough, enoh to take the world's most recognizable stock market index to levels never se before. strong earnings promising

potential progress on trade between the u.s. and china liftednvestor sentiment. let's get to the closing numbers. . averagejones industrial was 30 points, to 27492. e nasdaq up 1 and the s&p fell 3. as we've been reporting a handful of stocks are responsible for much of the market gains. but as bob pisani reports that could be about to change. >> the on the record highs we've been riding a broader breakout that may be near. onlyth 10% o s&p at new highs right now. six of the seven biggest stocks s&p outperforming, apple, amaze be with google parent alphabet but that could be changesing. a handle handful of names are just below new highs close enou to get mor move up in the markets we could have significant expansion of new highs. big names on the list, pharmaceutical companies like glaks o and merck. discounters lie wal-mart. homempvement by home depot

and home kprochlt names names. the rally energy stocks in the last few days process. why energy? partly because the rally has been broadening. itn beaten up in year and makes sense. some of this may be due to tax loss selling selling at the end of october now abating. the dow transports are not at record high but just shy of the the mark as well. 1% a positive sign for those skurnging to dow there are are thp when h a newh is confirmed in new high in the transport that's bullish. putt together and means the market is rotating a bit. fade processing. store bucks and dennison and mcdonald's, ni, leaders but well off highs for the year and replaced by a new bunch of leers. banks, energy and small caps. classic value. pla for nightly business report, bobbis miss any at the new york and with major indexes at or near new highs we heard today from well-known investors and

ceos who gave us their take on the market and the economy. >> i don't think it's a breakout. and i don't think it's particularly overbought either. because what you have is the weight of money. there is a certain amount of money out there, lot of money, central banks bauste bought ss5 trillion ofssnd so on. we have a lot of money. and the question is where that money goes. >> there are a lot of valuable mpaniesreponderates are very low. it looks like the st. croix stock markets areorecasting a rosy outcome. and the bond market is hard to say whathe it's forecasting because a lot of bonds are bought by central banks. it's hard to mean what that means wren rates in low. >> i don't think today there looks like a recession in 20. i think there is enough strength in the economy to go past 2020. i can't prect further than th. but right now i don't think a recession likely in 10 will 0 until some event happens in the geopolitical world.

>> let turn to jack ablin to talk more about the new highs in the market today. p foundingtner and chief investment offers atet cr capital welcome back. >> thanks, sue. >> you say the next catalyst for the market has to be fiscal. what are you looking for specifically? >> sure, i mean weulled out all stops on monetary pms. three rate cuts this year. >> um-hum. >> we ha reasonable profit growth. nothingtastic. last year's profit expectations were negative. beating that number was pretty easy. analystxpect probably high single digit profit growth overt next four quarters likel to come down. what we need to get to the next level is something else, something other than monetary we need either a breakthrough on this trade clash with cha, we need some sort of resolution to brhat's better than the

no-deal brexit. we need a little c morerity there. we'd love to havee european t countries sta actually spend money and build infrastructure. and that's really what we need to get in market t move to the -- next leg up. >> i was i think thissing about that today, jack. isn't it interesting on a as we have the so-called bricks inhe wall of worry, brexit and the trade war, and fedolicy that was questionable for a long igme, we're sitting here at all-time today. if anything, isn't that enough to get you to think twice about wanting to invest in a market that's already as high as it's ever been? >> that'sit. i mean, you know, at the end of the day i've got to look at the numbers, look at valuation. and yeah, relative to bonds, stocks still appear to be reasonably priced. th you relative to themselves and relative to the -- to their own ahistory, stocks expensive. so the question is, you know,

assets are probably inflated because of the egregiously low interest rate we are seeing a pronderens o corporate debt could are which could spell trouble in the downturn. right now in and out an issue. but in a mart like its this it's difficult to jump in with both feet and expect to make a lo over the next few years. >> but according to your strategy you likengome thi master limited partnerships. why do you like that and what >> so master limited partnershiping withh energy infrastructure. bob just talked about energy being the worst performing sector in year making a comeback. think partially because it is cheap.they're trading on a valu basis in the bottom quartle of the historical range but also the fact that we heard earlier, we don't see a recession in sight. i'm n ringing my hands over

the future of the u.s. economy. i think we're in good shape. e consumer in fantastic shape. i think that given that bdrk low interest rates and a reasonable economy energy infrastructure and what we lake are the c. corp. not justt the master limited partnershiping themselves -- are an interesting deal right now that pay a prettt active yield too. >> all right, jack we'll leave it there. thank you so much. jack ablin with cresset kbal. >> speaking of trade investors grew hopeful for rolling back tariffs for a paial trade deal with china. but as wit most reports on trade these days days it' not always straightforward. >> u.s. and chinese officials have been discussing trade at the ean summit in thailand these days working out who to hash houtad a deal a of the signing in coming weeks. it the focus is on what happens he tariffs. china has been pushing for u.s. to roll them becomom but at leat

to roll back the tariffs in slated for decembeth.the tariffs i'm told u.s. officials are open to that as long as theyinet some in return. and then there is the question of where in deal gets signed. president trump on friday said iowasfop mind. i'm told the white house is also considerinro north na, a tech heavy swing state that china meanwhile has floated hawaii and alaska as potential and i'm told alaska is china's preference because it's an energy rich state that at a is a little easr onhe jet lag and optics. we'll see what the white house decides and when the sning take uses playbooks. for "nightly business report," kayla tausche in patrick washington. >> the tra t defense narrowed on decline in comports and exports. the deficit in goodsds appear services shrank 7.6% in septembe i want the latest sign the trade downturn is softening and it's

spilling over into the u. >> as the u.s. and china continue to negotiate. president xi wants theorld to know that his company is open for business. eunice yuan in shanghai for us t.night. ♪ >> reporter: the forum? shanghai has been organized by the cheyenneovernment as a which to cnce the increasingly skeptical international community that the mcis open to the world. he delivered keynoddressey attempting to make the point, saying china's doorenould only ore highlighting that they would launch the foreign investment law on januaryst, further lower tariffs and sign high standard free trade greements wh more countries, saying about trade barriers we should break the o wall instead building one. familiar promi attention thatt people say haven't translated into action. as an indication of the souring attide you can look at thert paipation of the forum.

nearly 200 american companies are here, boeing, p&g appear microsoft and facebook but the u.s. d sn'td a hh level delegation nor did most western nati as. the chine aware of the credibility gap. address promise fatigue saying china keeps its promiseshat we see counts. the number of job openings the u.s. hit an 18-month low. according to the labor department totalacancy fell to 7 million in september. vacate siptill outnumbered knows look for work by a ltle over 1 million pointing to a tight labor mket. e quit rate which measures how many people voluntary left jobs edged lower to 2.3%. time to look now at some of th upgrades and downgrades. we begin with shares of under armour downgraded to neutral from outperform at bared

krielting the investn into the company's accounting which we told you about yesterday. price target now $20. but despite that downgrade, the stock rose 4% to 17.90 bouncing back from the decline. y sharp u.s. steel downgred to hold from buy at argue us. theg analyst cite third quarter results and fiedens. the firm noted the who lily competitive industry for steel right now. shares falling%oresthan to 13.10. amgen graded to overweight from neutral at canter fitzgerald. sitinghe drug pipeline into 00. the price target is $255. the stock rose a fraction to0. 21 onmeat upgraded to outperform om market perform at bernstein. the analyst citing the valuation, following a more than 50% drop in the stock price over the past few months. the price target $106. the stock gained 2% to 81.45. you don't often hear about

do components considering a buyout but that's exactly what into.een's is apparently lookino and if it happens it would be bigger than anyep other. thet sent that stock higher in day's session. we asked bertha coombs to take a closer look. >> walgreen's is weighing a eatential to be ainquired by private equity firms in what could be a massive leveraged buyout. a source familr with it tells cnbc process the drug story giant was approached by investorbout deal taking the company private. as part of the review, the brd subsequently approached b investmek ever core to explore sales. the drug story cin stwrugled to grow profits asromz to pharmacies come under reimbursement pressure on prescription drug sales and face active competion in front of the stores from online merchants like amazon. while rival cvs bought insurer aetna an effo to lefrpg the health cnic. walgreen's bid toright aid was

blocked by regulators.th drug store train chain tried to kulgts whittleown costs and debt with a $17 billion. with a market valuation of $5 a and acquisition by privaui firms amount to a major leveraged buyout. any deal with hinge on ceo's approval. he is wahl green's largest shareholder with a 16% stake. declined to comment on the ns report. for ghtly business report bertha coombs. >> still heyde, boeing ceo's vote of confidence. ♪ ♪ ♪

opec today lowered the forecast for oil demand with the cartel citing sufficient market conditions andtr signs ofs in the world economy. as a result the group said its own production of crude is excted to decline over the next five years. and longer term itees its share of the world oil market shrinking in part because much rising climate activism and the growing use ofltnative fuels. price of crude settled at $57 a barrely.to boeing's new chairman sis the company's ceo has his support. dave calhoun also eased the minds of investors who think tht 737 max crisis is one the company can't control. that ma may be one of the reason why shares rose 2% in today's trading. phil lebeaug. hes more. >> ls than a week after muilenburg was blastedhi on capitol . >> if you had an ounce of integrity you would know the right thingo do is to step

down. >> boeing chairman dave calhoun was emphatic, the board still backsmu enburg. >> from the vantage point of our board, denis has don everything right. from the beginning. >> for more thanr a yea as investigators zeroed in on the cause of the 737 max crashes, and fixing the plane's defective flight control system, muilenburg has been on the hot seat. critics say he oversees a company where the push to roll out thmax came at the expense of ensuring the planes are safe. an allegat calhoun denies. >> that question of culture and anybody's willingness to trade safetyin against any else, never seen it neverev touched i. lln't believe it. >> s muilenburg is stinging from congressman questioning his $23 million pay package last year. >>s anybody at boein taking a cut or working for free to try to rectify this oblem. >> dennis called me saturday

morning, 10:00. with a purpose of suggesting that he not take anyen cotion for 2019 in the form of bonuses, which is of course most of your compensation. >> almost 90% of dennis eamuilenburg's pay last came in the form of a bonus and stock awards. notnly is he waiving those for 2019 but fors long as it takes for boeing to catchat up on 737 max deliveries which mnt not happen early 2021. phil lebeau nightly business report. >> kate spade drags on t evidentiary where we begin the market focus with a company formally known ascheating earnings expectations but they did fall slightly below revenues forecast tha in part to global same store sales at kate spade which fell 16% but seeing the full year outlook above esmate. the shares rose to 26.9537

regeneron topped analyst estimates because of the stropping staled of dupe iksant and the drug ily. the stocks rose 7% to 332.60. and malmalkin kroft saw higsar ssarocess that lid to a quarterly miss on sales but earnings beat and the company raised earnings guidance dn th road but shares fell 13.5% to 333. an last night, peloton posted a bigger than expected quarterly loss in the first earnings re since going public. but the fitness bicycle maker beat revenue forecasts thanks to stronger skrurk growth. and the company looking to make >> for us profitability is a managed outcome. we could pul back on growth and be profitable tomorrow. the core u.s. bike business is profitable. so the investments we're making

in international andal in new ds products and content they're all smartdnvestments e are excited about them. >> surprisingly shares of peloton dropped more than 7.5% to 22.74. >> chesapeake energy rumts missedxpectations b bause sharp drop i production and lower natural gas prices. making it the third straight quarter of disappointing results. also chesapeake sees next year's capital expenditures down 30%. shares were off abo 18%. will beter than wall street ofit is expecting. the grocery chain says ite expects to more benefits from investments in store modernizizatio and deliveries shares surged more than 11%o 27.83. adobe raised earnings guidance driven by strong demand r the photo shop brand and stronger sales of cloud software products. they are looking to increase presce on the digital platform. when you are consuming any piece of a content on screen we want to play a role in makin

that happen. so whether in the cloud you driving, the airport, in the car you driver, whether in a checking in a terminal certainly all the video you consume. retail stores. in lags when yout look digital displays everything is a piece of content digital needs to personalized, needs to be engaged. >> adobe was up more than 4% to 289.29. the f.c.c. officially approved t-mobile and sprin $26.5 billion-dollar merger after more than a carrier of review. the new company will be the second largest wireless carrier. sprint shares down a fraction t1 4 while t-mobile up a fraction to 781.47. coming up is zero cost ♪nvesting too good to be true? ♪ ♪

♪ ♪ various mayorsor in cala are now joining the campaign to buy out bankrupt utility pg&e. the idea was first floated last month by the mayor of san jose. and the group now includes nt oakland, sra and more than a dozen other california cities. and together they represent -- represent about a third of the population serve by pg&e. the coalitioners asking gr newsom and state regulators to consider their offer before the company's bankruptcy on reorganiza plan is approved. discount brokerage charles schwab withlient assets topping $3.7 trillion has made a major shift in its strategy. l noger chargingommissions for all u.s. stocks, etfs and options trades. and it's not the only disruptive

move that company is making. senior personal finance correspondent sharon epperson reports from the company's finance impact conference in san diego. adviss and other attendees at the impact conference are buzzing with aut the impact of zero commission trading on the industry on investor. >> announcer: what ioing to do is not only provide more to purely focus on investment decision making without being concernederbout the cost. >> charles schwab kicked off a flurry of other brokers, including td amerd trade and e-trad in eliminating commissions on buying and selling stocks and exchange f tradedds. it's a game changer reporter for money manags and those developing products. >> now what's amaze something we're all the same. all right. every etf can be bought just on the merit how is s,beha what the investment philosophy not whether it's commission free or not or whether it trades a lot orot but realistically what is

the adviser looking for and the end inve'sor. >> schw president and ceo said the investor was the focus in making the move thatn had b long considered. >> there is a history here of dhwab consistentlyrupting the marketplace on behalf of the consumer. it's led to growth and success. >> look for more skupgs aresr ditions to come. schwab will soon allow clients to buy a fraction of a costly stock or etf instead of the swoir share. frtional share trade something in another move aimed at competitivehe advantage as well as flexibility for investors. >> often times newer younger smaller investors struggle to in tst in some of the companies they want to invest in if they have to buy a whole share. fractional shares is along the line consistent with the strategy opening up investing to as many people as we possibly can. >> bettinger says schwab will beginning theering early next year. for nightly business report, i'i sharon eppersosan diego. and in fact most high profile brokers nowo offer

feed trail trading good for investors but is there a downside to i after all there are no freelu hing. joel with his thoughts is knowle around archer at state street advisers thank you very much. >> thank you very muli. >> we're c it ha downside but if a company offers a-free service or product they're hoing e to make it up somewhere el. what's the strategy here? what sdder investors know about where they pay for it elsewhere? >> hisure, ihat's the way to look at it. different obvio but when or is they have a brokerage account they have a lot of choices which is great to invest in stocks etfs, even options for some clients at zoo commissions. that puts a lot of choice on the plate. that's wonderful. d the investor has to see the full suite of services ors fees charged in the account. they might have noss comns. thaet great great and if they trade four times aear that

means saving $20 if the fees g up for the account by $30 a year maybe that's not agency got a tradeoff. as with everything it's the total cost of the experiencehe that investor needs to evaluate to understand are they coming out ahead?ne ral or a little bit behind in any kind of these deals? >> and some people have suggested you need to look at the costt structure your particular brokerage because you may be charged say for advise depending on how much money you have in the account. almost like a premium service versus a standard service. >> yeah, i think in all the situations that's -- it really does come down to the individual instor and theirxperience. and so if you are charged for advise, if that a is helping you reach your end goals and it's done in a reasonable level and you're taking trading costs out of the eation that's that's something the investor could end up ahead. there is talk in some of the

accoun what are you ghating what kind of interest are you maybe making on the cash levels in the brokerage account? is it equivalenthat you might get outside b othekerage experience if it's half a% less but making up more than that in savingsn the trading then again you probably have come out for the year. and that's a good outcome. we're just seeing s a lot ofle coming to the market atsz place. aba lot of ourst ins, the advisers and the clients they work with are getting the benefits of that economy of scale. but they have to do homework. >> before we let you go, the answer may seem obvious but i'm asking it anyway. who do you think no fee investing benefits the most? who is the typhaal investor that makes is it most attractive for? >> yeah, actually i think in cuts acrs the spectrum. it's one of the interesting, you know, shifts in the market whenvironment. her you are adviser, end investor, you know, tonvucceed inting you have to control what you can control. and costs are one of those thin that you can control. but you can't really do much

about what the market does in o day in day outbasis that's what allocation folks are focuses on. >> right. >> about y if you control costs and take the which is the frictional cost of trading that benefits everybody from the biggest institutions to the smallest investors. >> report. knowle afternoon we areta street global advisers thank you for joining us tonight. >> tha>>s very much. nd that's nightly business report for tonight i'm sue t herenks for joining us. >> i'm bill griffeth. have asereat evening. you tomorrow ♪ ♪ ♪

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