♪ this is "nightly business report" with bill griffeth and sue herera. ♪ record run. the nasdaq closes at an allime high as the tech sector tries for its best yearn a decade. needing improvement. home depot's quarter weaker than its outlook not much better. but are the challenges temporary or something more? >> and breaking ground. permits for new home construction hit theost recession high but still might not be enough. those stories more tonight on "nightlness report" for this tuesday, november 19th. and we do bid you good evening, everybody.el andme. sue is off tonight. everyone's favorit secretary ner the stock rket.

and lately it's proving which. we're talking about technology ocks. thesi nasdaq com dominated by tech closed at yet another record high today, now on track for the best year in a decade as a matter of fact. theector as reflected by in etf is up more than 40% so fa this year. and it's been helped by a 50% gain in sem conductor stocks and a double-digit rise it in social media shares. as it happenings the nasdaq was the only of three major indexes to finish higher. lthe dow f 102 points. back below 28,000. the s&p fell by 1 point. bob pisani looks closer at tech's big run. >> the markets clearly overbaulgt butot much worry not yet. the major averages chewing in which and eit highsry day. the s&p up 10 off 3 trading day this is month. the marketic tecns don't seem crn the market is

getting too far ahead of it's . there is the fear offis ming out calling it f. omo. he is that is forefactor the s technology store the big leaders in particular. the top ten having big gains above the s&p 500. look. the s&p up 3% in november. 7 of the largest tech stocks doing better. apple up 7%. microsoft up 5%. only one tech name in the top ten, sisk co, down on the month you'd thing think with the big tapsh move so mhere is tepp tracing. overbaugt but nobody seems rket worried. some experts speck to see profit taking eventually particularly the big cap indexes push into record territoryhile the smaller cap indexes lag a bit. but momentum doesn't appear ra be fading especially not where the optimism is persisng and some believe global growth is bottoming now.

but the world isn't dwelling on this there is a chance it could go on. craig johnson from piper jaffrey, a technician there. he views the overbought conditions as aign of breakout not breakdown. he expects we'll see that for some time before a correction takes hold. for "nightly business report," bob missfy at the new york stock exchange. elsewhere new data show techdom names hedge and mutual funds. according to citigroup. microsoft was the most widely held in mutual funds followedy alphabet and facebook by the end of the third quarter. within the 50 largest hedge funds, amazon was the most commonly ownro name mft was tied for second. so how much longeran the technology jug are naught run? joining susks paul m portfolio managerith independent solutions wealth management. thanks for joining us tonight. >> my pleasure. >> and you're actually a little aren't you? tech right now,

>> yeah i troob honest, bill with everybody and the way i look at it with the nmega ref had in these names now every stock but the bulk particularly in the indices the market cap weighted meaning the largest companies get the most weight and dris indices. they've recently had some big runs. and the way i look at it is folks should have a tech portfolio that's no mor weighted or -- sorry equity t portfolit's no more weighted to tech nan the overall market. if you look at the portfolio and it's morn a third dominated by thes names you should consider taking profits. >> are you talking about the big guy sns technology i a large umbrella. there are a number oof sectors within that area. but you imagine you focus on the high profile names tnet have so well here.

is that the idea in. >> that's a very good point,bi . first of all, you have the tech sector. and then about a year ago the s&p spun off communications services. >> right. >> which has other social median typees then you even have a couple of stocks like amazon, for example, it's not in either of the sectors. it's in consumer discretionary. so you are absolutely right, over time the innovators have broadened and the definition of tech is broad are than we first spoke 20 years ago. >> thanks for the reminder. are thereroups withi technology, though, right now where you see trends where there is real growth? and yop ion't want to give you -- i don't want to lead the witness here. righte you seeing trend now that you would invest in technologywise. >> it' aooduestion. overall i'm a bit hesitant given the valuations. ett at the ou in the introyou talked about semi conductors. even though semi conductors have performed well -- they came from a very low base because the semi

conductor industry has bee in a funk f a couple of years, i think the semi conductor technologythin the sector is going to be the best performer going forward. and so, yes, i see some values there. >> all right. paul meeks, who doesn't see to ag in the last 20 years with independent solutions wealthna ment thanks for joining us den tonight paul. >> see you. >>as while techeen one pillar of the market. retail has been another. but today it had a rough day. let's start with home depot, the world's largest home improvement retailer cut tt sales forec appear said it expects same store sales to be lower than pected this yearending the stock lower by 5%. and it was largely for the dow's decline tod as a matter of fact. then there is kohlso's, the big box retailer third quarter earnings and sales missed analyst estimates. and the company trimmed profit tlooks. sending shares of kohl's down 19%. any time there is the retail

wreck this one of the concerns is consumer pending slow which is a concern for the economy slowing especially ahead of the holiday season. we asked courtney reagan to dig deeper >> both home depot and kohl's reported lower sales and full year forecast. i spoke to the home dough poe c o saying we are not seeing softness with the consumer and the housing environment is healthy and stable. he said the lower guidance is only a reflection that it's taking ouro time roll out new initiatives. he said home depot is getting half a point of comparable sales increase as a result of some of those ini tatives like new website for pro customers. but it's had to rol out that site's features more slowly than previously pnned. in the meantime kohl's comparable sales grew slightly of the year.g in the first half but gross margin fell. ceo told me on the phone that

i'm quoteon absolutelyct we will returnhe business to profitable growth. though kohl's annett officially laid out 2020 guidance. they cut prices in the quarter because of warm temperares hurting sales of cold weather goods and a competive environmt that intensified. goff said that they stand for value s they needed to lower guidance to give room for necessary improvements for the holiday season to increase current customer loyalty and capture new shoppers. for "nightly busine report," kourtney reagan. now different story for tjx, the off price retailer beat and earnings revenan estimates praised the profit forecast. the company said steep discounts brought in more shoppers, making the sto more expensive. it was rising more than 1.5% i today's session. so what are the mixed retail earnings results telling us abouthe consumer right now? joining ust this moment joel binds cohead of the retail practice at alex partners.

good to see you thanks for joining us tonight. >> thanks for having me, bill. >> the consumer has been so strong, the job market so strong that we ring ourt handsny sign of a slowdown at some point. are you seeing that at all at is point? >> i think what's important is to separate expectations from consumer behavior. and so what happened today was expectation realignmen if you lk at home depot and even kohl's, the sales they just didn't increase by as much as the street hoped for. so from the pspective of the question is the consumer healthy and shoing? e answer is definitively yes. from the question of, did we have appropriate expectations for how much business was going to go to an individual retailer versus another retailer? maybe we were off a bit on that. appear that's what you see in the stock prices today. >> you know it's interesting i heard terrie lund green,he former ceo of macy's speak and

he said it was hisf bel that there are too many retailers out there that we might have 20% more retail capacity thap we need in this country right now. andou need to see that come back to achieve some so sort of balance in in industry. what do you think? >> it's an interestingdea of how you would put a number to how much overcapacity there is. i guess the best way to think about the ercapacity in the retail business now is t flow of goods from, for example, a full-priced department store, down to an off-pre value play. and there is sufficient merchandise in that supply chain department store environment into the off-price environment that would lead you telieve that there is overcapacity. i think it's a little tricky to >> right. t. >> and then i think the other element is whether you are talking about off-line capacity, i-e-stores, that we drive to and make purchases in, or whether

you are talking about online capacity, which is in some way alst limitless, because there isn't any real estate involved. so it depends and how you want to come at the question. >> before you let you go where do you see opportunity in retail right now? what do you like. >> consumers alway like a deal. so there is definitely opportunity in thealue sector for sure. the other thing we are looking at is the rental sector, not a lot of public plays i that market right now but that's a place i'd be looking. >> laparotomy. joel binds with alex partnering. thanks for joining us tonight. >> thanks, bill. t time look at some of the upgrades and downgrades. we begin with a couple of sells. at downgraded to sellt m chlt offat nathanson questioning the optimisti three-year guidance and wondering how it can be achieve. the price tget is $30. the stock fell 4% to $38 even. msg networks wngraded to sell from neutral at guggenheim curities. the analyst ced upcoming key

contract renewal was price target $15 the stock falling 15% to 17.93. broadcom gradedweo equal ht at morgan stanley citing increasing confidence in the ftware strategy. the price target now $367. the stock rose 2% t 317.70. still ahead, healthy prognosis. after lagging the mechanic health care is making a comeback. and the outlook could be just what long-term investors are looking for. ♪ ♪ ♪ ♪ ♪

the president of the new york fed said toda monitoring the ris to the economy. john williams cited several challenges including slower global growth, trade uncertainties and muted inflation pressures. he said the factors together are slowing g.swth in the but he added that the fed's three interest rateuts since july have helped sustain economic growth in our country. and of course those lower interest ratesd have pus mortgage rates down, helping the housing market. a new s reports both home building and permits for future me construction surged last month. about but as diana olick reports that's not solving all of the housing market issues. home builders are bulli this fal starting more single and multifamily homes a pushing construction activity to the highest level in over a decade. unfortunately, is still not enough. >> single familyousing starts have improved over the course of 2019.

but it's important to keep in mind we're building about 900,000 single family homes a year. and we need about 1 to 1.1 million based on population growth. >> the market doesn't just need more houses. it needs more inexpensive arter homes. builders are slowly moving that direction but still face heavy headwinds. >> the higher regulatory costs continue to be ala barrier. prices are higher. and we need to build with more density. >>town homes with the answero the density problem. there has been some improvement over the last few years. but recentlitown home construction has flattened and sits at about 13% of the new-home market. multifamily construction continues to boom and contributed most to the jump in overall housi starts and peits in october. but the bulk of that constructions still on the higher end of the market. builders arelsooreeing of the product swept up by investors as single family rental demands and rent provides rise with it and for "nightly

business report" i'm diana in washington. also in washington, as expected the house today passed at- sherm spending bill averting a government shutdown on friday. thol continuing rion would keep the government running through december 20th. it headso the senate where 's also expected to pass. president trump t threatened higher tariffs on chinese goods if no trade dealea ised any time soon. comments came during a meeting with the president's cabinet. >> i have a good relationship with china we'll see what happens. but i'm very happy right now. if we don't make a deal with china i'll just raise the tariffs higher. . thank you very much. >> now sincehe u.s. and china agreed in principle to phase one of a dea beijing and washington have been sending mixed signals about what comes next. now to hong kong where the protests there are still going strong. there was a new development today that has the business community concerned thatld hong kong lose its position as al an internation financial hub.

eunice yuan has the story tonight from beijing. >> reporter: the move is zri as the potential death knell to hong kong's rule of law as part of the uk deal to hand over hong kong back to maintainland china, china agreed to maintain the city's independent legal system for 50 years. but today china's legislate, the national people's congress at the time tlen threatened to overturn a ruling by the high court and saying ultimate say over the city's laws. the high court declared a face mask ban that had been used to control thetests unconstitutional. the move is a big step tard underundermining the separate status from china. companies and he said more businesses are reducing hong kong footprint and i if new ones are going in. he also said more peoplere leaving hong kong for other business associations have also voiced concerns about damage to th rule of law and expect

companies to reassess plans. the next date to watch is november 24th when hong kong holds the locallections. people are watching for any signs of beijing interference. for "nightly business report" i'm eunice yuan in beijing. boeing may need to redesign 7,000 jets and tha where we begin the market focus. that recommendation byto regu has nothing to do with the 737 max. instead from the investigation from a fan blade breaking off killing a passenger an southwest flight last year. boeing says it plans to revamp parts of t 737 ng jet as a result pch. the stock76 to even. california utility pg&e is reportly nearing a settlement with state regulators over the maintenance failure of equipment involved in the 2017 wildfires there. according to bloomberg the deal is a valued a littlever $1.7 billion. and shas of the bankrupt

utility fell about 3.5% to i84. >> abel reportedly stopped orders from the investors forco ary offering in hong kong earlier than expected. routs reports that the number of shares investors are asking for far exceeds what the e-commerce joint can offer. the current stock rose a frederic shun to 185.25. and the medicines company attracted interests from novartis. according to bloomberg novartis s conducting due dilgz for a purchase to help grow the matter medicine unit. the report helped the medicineh companys spike almost 20% to 70.21. and merck nounlzed raising the quarterly dividend by nearl1 for nextier's first quarter. based on the current stock price, the yielded would bet grre thanhat of the s&p fiefd. that sto up a fraction to

now to another market sector a pillar of our economy. healthare. the gro is up about 13% so far this year. but has underperformed the s&p overall feigning roughly 25%. in the the past month health care stocks have been outperforming the broader market. damion conover at analyst at morning sr joining us to talk about this pillar of the economy. i think abouthe jobs report where you see health care near the top of hiring. it's bonn astent performer overall, hasn't it? >> yeah, it has bee when we think about health care it's really a sector that tends to perform wel regardless of how the economy is doing. but in the back drop of the health care the economy can kipt to do well and even though it has relatroelycts that people when the economy is doing poorly or doing well, when you do have a strong economy that sector. helps the health care >> b you d divide it into sort of two categories, drugs

and therapies and things, and medical devices as well, right? goodah, i think that's a point. when looking athe health care sector going forward, you know will the recent performance we have seen continue? i think it differs by different parts of the health care secretary are. there is two buckets. you have the drugnd biotech bucket and then you have the de cce and toolpany bucket. what we are seeing at morning star is the firms in the drug and biotech bucket look undervalued because of kerbs around u.s. policy reform that might put pressure on drug prices. but we don't think that's warranted to the level of what the stocks are tding at. we think there is upside for the stocks. >> what about the other bucket, how do you see them going. >> the other bucket is wehink bit overvalued. we think what's happened is the market has gotten i think conservative in allocation to health care around drug and

biotech stocks. and wanti to still have exposure to health care there has been anas inc allocation to devices and tool companies. even though the fundamentals of device tools are god in the sector. the allocation there, sort of hiding from the biotech secretary are has left the other pa as of health ca bit overvalued. we think investors should be morend concerned cautious around those subindustries. >> very good. damion conover with morning star, thank you for joiningn.s >> thanks for having me. >> you bet. and coming up, an easy way for the government to collect $1 trillion more in tax revenue. ♪ ♪

♪ here is what we're watching for tomorrow earnings from retailers, targe reports in the morning as investors get more insig the retail secretary are and the consumer. the federal reserve releases the minutes of the most recent meeting when polic mers lowered interest rates again. and president trump is going to tour an apple facility in austin, texasith ceo tim cook. that's what we're watching for wednesda in the meantime, thousands of disney plus accounts have been already hacked. owners were locked out of user ngcounts analog in credentials were c. in some cases are sold online for as3. little as disney plus made the debut just last week. and sigd up more than 10 million cusmers in the first 24 hours alone. the company assuredatveryone t takes the privacy and security of user data very seriously. workeportedly is being investigated by the new york state attory general. according to routersia off

are concerned whether the cofunder indulged in self-dealing. he was reportedly thought to nihave bought com and leased that many them back to the company. wework is expected to cooperate and expectsed to announce lay office later in the week opinion. the new york attorney general has sights set on jl. suing them for allegedti dec marketg tactics targeting some la tissue aiframes says contributed to the rising vaping crisis. >> there is flo doubt that juul, the largest e-cigarette company has caused this addiction. in fact, they hold 70% of the market. and that's why today we are taking action by aouncing comprehensive lawsuit against juul labs incorporated. >> finally tonight more on the great tax debate. there's been a lot of talk about increasing taxes on the to raise revenue for social

programs. but some say there is a simpler way just collect what's already owed. robert franke looks at the closin the so-called tax gap. less than what it's say collects theoretically owed a difference known as the tax gap. s data showed the tax gap at b $400on a year, or about 15% of the nation's total tax revenue. larry somers, the treasury secretary opposeding the wealth tax says the best which to reform the tax system is to start with basic collection. in a new paper op-ed with natasha sarin. they probabilities the gap will grow to over $7.5 trillion over the next decade. at least 70% of the uncollecd taxes come from underpayment byt the 1% which he says contributes to legitimate concns that the tax system unfairly advantages the elite.

audits of wealthy have fallenen more than half over the past decade as the irs cuts staff. in 2011 more than 12% of those maki more than $1 million a year were audited. somers said investing $100 billion in stronger enforcement, better technology and improved third part reporting would yield over $1 trillion in revenue. generating $11 for every single taxr dol spent. politicians on both sides say they agreee that mor enforcement would be better. but coness has yet to allocate what many say is adequate funding. >> the socds the united states has one of the most progressive tax codes in the world when it como collection from the rich. we're collecting from the rich just not enforcing all the collection we could be doing. agains in a resources problem. cigarettes needs to get its act tooth together and put money there. >> the treasury departme saying to cnbc saying the administration agrees that the

reducing the tax gap is an important goa it wants congress to approve measures in the next budget improving enforcement and oversight. for "nightly business report," i'm and before we go one final look at the day on wall street. the dow dbon 100 points. blame hoe depot. nasdaq up 20. a record. s&p was down just 1. "nightly business report" for tonight. i'm bill griffeth. thanks for watching, everybody.e have a grening. see you tomorrow. ♪ ♪ ♪

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