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tv   Nightly Business Report  PBS  November 18, 2016 6:30pm-7:01pm PST

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♪ this is "nightly business report" with tyler mathisen and sue herera. reversing course. why ford decided to keep production of one of its models in kentucky. record week. the stock market is hitting new milestones, but did it come too far too fast. fifth avenue frenzy. with one week until black friday, this is not much cheer among one of the most prominent corridors in the country. good evening, everyone. welcome. i'm sue herera. tyler mathisen is off tonight. it was a week of records with the dow, nasdaq and small cap russell index reaching new all time highs. but we begin with ford, which is heavily criticized with
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president-elect donald trump on the campaign trail for its decision to move to mexico. now the automaker has decided to switch gears and keep production in kentucky. phil lebeau has more on ford's decision. >> reporter: it's not a huge selling model for ford, but the lincoln mkc has become a big deal for president-elect donald trump and his promise to protect american jobs. while running for president, donald trump repeatedly blasted ford for planning to move to mexico. ford said it would still build models where costs are lower. then came this tweet from donald trump. just got a call from bill ford, chairman of ford, who advised me he will be keeping the lincoln plant in kentucky. no mexico. so why did bill ford agree to keep mkc production in the u.s.? officially, ford said it's
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always reviewing production plants. but this move helps the company in two ways. it allows donald trump to take a victory lap for saving jobs while not having an impact on the automaker. the company billed last year and while ford was planning to move the model out of louisville by 2019 and would have likely shipped to mexico, keeping in kentucky doesn't change the company's overall production blueprint for the u.s., canada and mexico. >> you have to keep in mind, the production and supply chains are integrated and that integration supports american jobs. >> reporter: ford maintains, concern jobs will not be cut to move some production south of the border. the question is whether that promise, along with the commitment to keep the mkc in kentucky will finally convince trump to stop attacking ford.
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phil lebeau, "nightly business report," chicago. the decision by ford follows reports that apple is looking into possibly moving production of its iphone to the u.s., which we reported on yesterday. ford and apple were two corporations criticized. professor of management at stern school of business joins us to discuss. nice to have you here. do you think they're feeling outright pressure by the president-elect or are they just feeling uncomfortable with the rhetoric? >> i do think there is a certain amount of discomfort with the campaign trail and i think these overtures that apple and ford have made actually don't surprise me. they're trying to get out in front of whatever policy may emerge. >> how unprecedented is it for a president to put to use that kind of rhetoric to call a
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company, say, and influence business decisions? >> well, it would certainly be unprecedented for a president to call ceos and say you must do this or must not do that. but it isn't unprecedented for president to speak with ceos and industry leaders about the kinds of policies they have on -- that they are proposing. and to speak candidly and frankly about the kinds of things they would like to see. now, whether or not ceos follow those -- or whether they influence ceos is another thing. >> compare the trump administration to the more pro trade administrations of the last, say, quarter century. >> yeah, it's really interesting, because if you look at the regimes, they have certainly been pro trade. and on the campaign trail, trump's rhetoric has been protectionist and an try trade. so this say big change in regime
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and it will be interesting to see how companies respondent, because right now all we have is words. all we have is rhetoric. it will be interesting to see how policies emerge over time. and right now, there's a lot of uncertainty about what the policies will be moving forward. >> you have a couple recommendations for ceos or the heads of companies that may be feeling some, you know, uncomfortable feelings about what may lie ahead, because we don't know what the policies are going to be indeed administration. you see speak directly to policy makers. >> there are some things policies can and often do do. the first thing is to do what ford and apple did which is to try to remind the american people they create jobs here in the u.s. and they are good citizens here in the united states. another thing that companies often do is they will speak directly to policymakers to try and shape how they think about the kinds of problems and decisions they have to make. and so it doesn't surprise me to see bill ford pick up the phone
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and to try and speak with president-elect trump. another thing policies do is band together with other companies, industry associations and other companies facing slars situations to influence policy. and another avenue is through lobbying which companies often turn to. >> all right. on that note, professor, thank you very much. with new york stearns stool of business. volkswagen plans to eliminate 30,000 jobs in an effort to cut costs to improve its balance sheet. the company is still recovering from a scandal that hurt and cost billions of dollars. the trump rally took a breather. stocks dragged down. the dow jones industrial average fell t
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fell. the s&p 500 was down 5. and the small cap russell 2000 index continued its hot streak sitting a record with 11 straight days of gains of for the week, the major indexes were up continuing a trend we have seen since the election. some are . >> the major indexes could be a cause for concern. so three key factors. first, the kmee getting strong. all pretty good. gdp on pace to prove its stronger quarterly. second, an assumption more stimulus, and lower taxes. finally, the fed has been more upbeat with many insisting.
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normally, bad news. bullp but the talk of growth. okay. what could go wrong. first, the market ignoring the dark side. a trade war particularly can china could be damaged to the stock market. the biggest risk is trump will deliver. the stimulus will not be as big. and the regulatory reform will take much long than expected. the hoping hopes for higher growth. one analyst says it could be a head fake of historic proportions. i'm bob pisani. today the dollar climbed to its biggest level in 14 years. bond yields.
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and today bill dudley said the market moves are not altering the policy plan. >> financial conditions have changed. on fiscal policy. so the movement in markets seemed consistent with a change in how economic policy might evolve. i don't think what we're seeing in financial markets are to me concerning in terms of the implications for monetary policy. >> the fed takes financial conditions and employment in account when deciding whether to raise interest rates. a business owner's message when it comes to trade. ♪
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♪ the obama administration is blocking new oil and gas drilling in the arctic ocean. the decision hands a victory to environmentalists. the plan for drilling can be rewritten by president-elect trump but that can take months or years. alaska's officials support drilling in the arctic. donald trump has called on the transpacific partnership a trade killer. but a seattle man who has operations in five countries disagrees and he has a message for the president-elect. eunice yoon reports from china. ♪ >> reporter: far from american politics, seattle native has had to up end his investment plans. a major free trade pass
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initiated by president obama was expected to boost his business. but with the surprise election of donald trump, that deal looks all but dead. >> all bets are off. >> reporter: the tpp or transpaciftran transpartnership. the deal has come under attack. >> we will also immediatelyst sp the transtraffic partnership. >> reporter: he has his gloves made in five countries thinks the tpp would be great for america cutting tariffs for asia and back home. >> there are 18,000 products that come out of the united states in the tpp countries. and those are going to be more or less duty free and it's an enormous golden age of
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opportunity for american manufacturer to ship to asia because asia has rising incomes and they want to spend. >> reporter: all of these products made here in china are headed for north america. but if the tpp passes chances are more businesses will shift to countries that have signed on to the tpp. china is a part of the tpp in favor of malaysia and vietnam, which are with the tpp near death, he fears his hiring plans will also stall. >> we think the tpp in our particular company will generate numerous, high-paying jobs. most social media designs, sale and marketing. >> if you got a chance to sit down with donald trump what would you tell him about the tpp and asia? >> i would say asia is an very important place. the united states would be wise
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to sit down and say how can we engage china. because this is where things happen. >> reporter: for "nightly business report," i'm eunice yo yoon. well, it's being called the white house in midtown. trump tower in the middle of manhattan is creating a traffic and security nightmare and a headache for some of the most recognizab recognizable retailers in the world. the flagship stores are concerned as the busy holiday shopping season approaches. >> many top retailers are not feeling much cheer. the reason, security and crowds here at trump tower. new york city mayor bill de blasio announcing steps to alleviate the crowds.
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trump lives and works in the building located in one of the busiest intersections in the country. the security measures and protests around the president-elect have turned the entire area into a green zone, choking off businesses for many retailers. gucci is largely empty. tiffany was closed and still surrounded by blockades. analysts started trimming their own estimates with analysts saying, quote, there is no way to sugar quote this. other retailers include prada, abercrombie & fitch. many smaller retailers also suffering. >> it's been a mix of trepidation and exasperation and many come to us. and they have called us, can we
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come. >> rents are some of the highest in the country so any loss in business can have a dramatic effect on their profitability. saying, quote, traffic in retail stores has dropped dramatically. the mayor saying they may block off roads, close lanes and try to divert traffic and crowds. the measure may help, but it will take a miracle on 56th street to help retailers near trump tower have a merry christmas. guys, back to you. >> robert, i'll take it. thank you very much. robert frank in midtown. president-elect donald trump has agreed to settle lawsuits related to trump university. new york's attorney general says the fraud case will be settled for $25 million. former students claim they were falsely promised they would learn trump's real estate secretaries secrets. trump has denied any wrongdoing.
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same-store sales fall for the third straight quarter at amber come krom bee and fitch. sluggish traffic caused the decline. the company with results sharply missing estimates. shares fell to $14.60. foot locker saw its profit rise, topping expectations. revenue in line with the estimates same-store sales improved but not at the pace analysts were expecting. shares finished to $70.78 yum brands to its sure buyback. the new allocation expected to be used by the end of next year. shares rose to $62.26. well, you probably know this. you can pretty much order anything you want on amazon.
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but what about a car? soon, that will be possible. the zint giant has signed with chrysler. the service is expected to be available in italy. shares rose to $760.16. shares fell 4 cents. and according to a filing, facebook has approved a $6 billion share buyback that will begin early next year. shares finished the day down a fraction to $117.02. this weeks to president-elect donald trump's economic plan. the last time he was on, he recommended visa, price line and mckesson down 13%. he is kevin norris. welcome kevin. nice to have you back. >> thanks for having me back. >> i understand you soon own all
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three, correct? >> we do. i wish i didn't own mckesson any longer. but that sometimes happens. >> all right. let's get to your new picks. there are three very interesting ones. some based on expectations of what the president-elect's economic plan will be. the first is building products. >> right. so we're -- we really like masscow. they are in the home improvement and home construction industries. real solid company. pays a dividend of over 2%. and we think it's going to be a beneficiary of a continuation of the housing market recovery, and even on the renovation side. this year is expected to be the biggest year since the recession of renovation spending. and that was in 2007. so we think it's a great company and great position. >> does that renovation side of
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the story offset the rise in interest rates? >> it counter acts it. so if we get higher mortgage rates, for instance and the new housing market slows down. that was a move masscow made to get into the renovation business. it's a nice play with a little bit of down side protection. harris corporation is a tech company. tell us about it. >> so right. harris corporation is a tech company. a trump play. if we get increased defense spending, as president-elect has laid out, this should be a beneficiary of it. so they do technology systems for defense. civil government applications and in addition to commercial. it's a solid company with a solid balance sheet, high profit margins. again here a 2% dividend. and just well-positioned for the trump presidency, provided the details back up the headlines.
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>> up better than 20%. do you worry it's gone too far? >> well, our estimations, it's got another 20% in it next year if they execute and request growth prospects. >> and schlumberger last on the list. >> sure, this is a little bit of a trump play in that if we get some deregulation in the energy sector, slum letter jay will be a beneficiary. an oil field services company to the international oil and gas exploration and production industry. they really weathered the down turn very well early in the year. they're poised to benefit from some deregularration and if we get some kind of opec agreement, it will benefit schlumberger. and so you could pay to hold it. >> kevin, thank you very much. have a great weekend. kevin norris. coming up, why warner bros. has a lot riding on what it
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hopes will be a magical weekend at the theatre this weekend. ♪ ♪ here's a look at what to watch for during next week's holiday-shortened week. on monday, anthem's $53 billion acquisition of cigna scheduled to begin. tuesday, a fresh read on the housing market when existing home sales are released. wednesday, the last meeting and that is what to watch for next week. mcdonald's enting the next phase of its turn-around going digital. the foot food chain rolling out
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ordering and digital payments in an over the to attract millennial customers and increase foot traffic. some critics sake mcdonald's is playing catchup. the ceo saying that's okay. >> we have a very advanced stage of rollout in this in canada in the uk and france and australia. so therefore, they are almost like a live learning lapse and we can bring a more finely tuned kinks out. a much more home and business model and bring it to the u.s. if you want to scale it here, you want to scale it right. so you're right. we're not always going to get first movement advantage. but we have enough phenomenal scale advantage and that will differentiate us from anyone else. >> mcdonald's will also offer table service to customers. draft kings and fan dual are joining forces. the two largest daily fantasy sports companies have agreed to merge, ending months of speculation. the companies say the merger will help accelerate their
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profitability. draft kings and fan duel have faced legal challenges around whether their contests are games of skill or gambling. they have stakes in fan duel. comcast is the parent company of cnbc, which produces this program. it has been a rough ride for movie sequels reasonable recently, which have disappointed at the box office. this weekend, warner bros. has a lot riding on the spinoff. will the movie work its magic? jul julia boorstin has our story. >> warner bros.' hopes are high. based on jk rowling's best-selling harry potter spinoff. it's the first about a magical zoologist chasing his creatures through 1926 new york city. the film costs are around $180 billion to make. this projected to gross more than $200 million worldwide this weekend. bolstering warner bros. with a
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new fran choice. >> the general strategy is the economics of those franchises have proven to be superior to films that are not part of a franchise. we see that with the d.c. comics films and now with fantastic beasts. >> warner bros. hoping it will live up to harry potter. its eight films grossed nearly $8 billion at the global box office. >> we're very excited about "fantastic beasts," a new story based on the wizarding world of harry potter. >> and time warner is not the only company banking on "fantastic beasts" box office success. at&t in the process of acquiring the giant for more than $85 billion as it looks to diversify with the movies and tv shows its customers want to watch. >> we're moving to a world of global distribution of content using technology.
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and big franchises matter more in that world, because you can sort of use that content, use those franchises to support existing businesses, existing platforms like at&t wireless. >> and it's not just time warner and at&t that could benefit from a hit. the films could also drive even more interests in the attractions built around harry potter. the which is wizarding world in orlando and hollywood. and get some of the wizards magic. amazon enables u users to unlock content and android using google's voice assistant. so farther drawing crowds. it grossed nearly $9 million in north america thursday night, and it's already grossed $23.5 million overseas. for "nightly business report," i'm julia boorstin in los angeles. and finally tonight, your thanksgiving dinner will cost you a little bit less this year. according to the american farm
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bureau federations annual survey, a meal for ten people will cost just under $50. that's 24 cents less than last year. and that's because of the food deflation trend we have been reporting on. turkey prices, milk, pumpkin pie mix, carrots and celery all cost less today than they did a year ago. that is "nightly business report" for tonight. i'm sue herera. thanks for watching. have a great weekend, everybody. we will see you here monday. ♪
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♪ it's all right it's ok ♪ ♪ doesn't really matter if you're old and gray ♪ ♪ it's all right it's ok ♪ ♪ listen to what i say ♪ ♪ it's all right doing fine ♪ ♪ doesn't really matter if the sun don't shine ♪ ♪ it's all right. i say, it's ok ♪ ♪ we're gettin' to the end of the day ♪ color coordinated? impressive. i learned from the best, danny.


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