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tv   Nightly Business Report  PBS  October 31, 2018 5:00pm-5:30pm PDT

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>> announcer: this is nightly business report, with bill griffeth and sue herera. tricks and stocks s the final two days of the month. but october was still onewo of e t for stocks in recent memory. so where do we go fromhere? opportunity knocks. did october's free fallreate bargains for investors? we will lookt possibilities and room service, an exclusive look inside the country's most expensive hotel roomith a w-dropping price tag. those stories and muchore for this halloween edition of nightly business report, wednesday, october t 31st. and we do bid you good evening, everybody.nd welco sue has the night off. halloween. byost accounts origins trace a
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ancient celtic festival people warding off spirits. fast forward more than 2,000 years a you may find investors hoping to ward off ghosts of this october and p it t rest. but this bandit are month was not for faint of heart. . today the stocks ral idea for a day.nd the dow rising 240 points. the nasda climbs 2% or 144 points and the s&p added 29. and while the dowdded nearly 700 points the past two trading sessions itd softe the blow of the one of the worst months we have seen recently. in fact now mht be a good time to cover your eyes. because for all of the month of october, the dow fell 5% the orst month since january of 2016. the s&p 500 was off just about its biggest one month slide since september of 2011. and the nasdaq really took it on the owchin, more than 9%. its worst showing in decade.
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> all inall, the u.s. stock market lost around $2 tllion of val in month. even oil priss were not erspare. they done nearly 11%. the worst monthly los inwo years. and as bob pisani tells us though, many on the street want the calendar to just change. >> after the roller coaster stock market in october many traders are crying out get us into november and good news plenty of reason to believe that november will be a better month an october. we have witnessed dramatically oversold conditions in the market and already there has been a turn around. many sectors semi conductors home builders metals energy stocks way oversold and given the selloff in october. pension funl w rebound to pour more money back in in november. buybacks should give nova boost. november is the most active for byebacks and activity will pick up using the cash horde on hand to buy pack back stock at lower
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e. finally seasonal flow should be improved. the s&p 500 hand has been higher from the october lows until the ended of the year every time during a midterm election year going back to world war ii. that's aood number. and there are the hopeful outcomes, a even aodt decline in volatility get the vix below 20 dramatically lowering concerns and a hint of progress on trade will lift china stocks and global sentiment. but concere iks asking if it keeps the earning expectations still high at 1ng from b knocked down to zero or 5% growth. tcause that's what the market seems imply. that's something we still have to figure out. for nightly businessor r bob pisani at the new york stock exchange. ngtrong ear before the bell from general motors set the tone for this day. theakuto posted much stronger earnings than expectedd gm's tuarter profit was 62 cents better than the the estimates of on wall street.
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phil lebeau tell us what drove ene huge quarter. >>al motors latest earnings are a testament to the auto maker strength in the you two biggest markets, the u.s. and china. in both countries, profits a surging. take the u.s. where gm's new full size pickuping help it earn more money per ve because customers are paying higher prices. >> gm's product cyc is well timed now. they have the launch cost of the full size new generation pickup truck done that truck launched in august. then you can use the platform for the highly full size suvs, this is pricing power. >> in chinahere gm has been pushing the cadillac brand, the company earned nearly a half billion-dollar. >> we have had record cadillac sales in chicago up 20% year oh over year in a overall stron luxury market
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cadillac is doing well in chin >> it faces plenty much issues still. higher interest rates drive up monthly paymentsor auto loans. commodity prices for steel and aluminum are rising due to tariffs. and what happens if america'sap tite for new cars and trucks cools off? all of that is why ceo mary barra says gmeeds to remain as lean as possible. which is why the company is buyouts to about 18,000 salaried workers. if enough employees take the deal. gm says it will not have to resort to layoffs. >> phil lebeau, nightly business report, chicago. one company that wall street is laser focused on after the bell tomrow is apple. the tech giant has held up better than peers this month down a mere 3%. so what should investors expect? josh lipton takes a look. >> a key question for apple is what initial demand looks like for its latest and greatest smartphones.
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the iphone xs and xs max. bull hav high hopes that the two new devices willig beits with consumers. driving revenue and average selling provides highe investors will make a bee line for the company's revenue guidance. mp revenue guidance istant for the zoes quarter because it tells us the level of confidence that ale has in the xs and xs max which shipped at the end of september. the other thing it does it provides indication for how the x are are rin is perfo after launching october 26th. we think that's important given we expect the xr is the number one sellin iphone in the coming year. >> beyond apple anticipates hardware investors are also very focused on the fasterro gwing higher margin servicesi ss, including the app store. wall street thinks that business dwru 20% to more than $10 billion in the quarter. and giveng increas trade tensions, mainland chinaopill be a h topic. apple is in fifth p ice the
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smartphone market in that country. on apple's last conference call ceo tim cook said that the company's products had not been impacted by tariffs imped by the trump dplrgs. impactstheir subtle has cook seen any negative impact on consumer sentiment in china towds his company because of the escalating trade tension sns investors should i have a bettera tomorrow. for nightly business report, i'm josh lipton, san francisco. another strong reading on the labor market. private payroll company adp this morning said the $227,000 new created in the private sector in october far outpacing the 189,000 positions expected by most economists. the bulk of the gains came from the services industry. followed by construction and manufacturing. in addition, september's payroll account was revised downward to 218,000 from the previous report of 230,000. one of the big things the market has been concerned wh is slowing global growth.
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at the heart of that is naturally china. one of the big numbers out today was a reading on tha country's manufacturing sector. as eunice yunlsel y theou fierce of china slowing down. >> reporter: october is the first full month after the u.s andna imposed the latest round of tariffs and official data show factory growth at weakest pace in two years. slipping to 50.2 from 50.8 in he want aeptember. juair short of a contraction. a number lower than 50 indicas a contraction. new exportrdering gifting a sense of future business contracted at the fastest pace in a year. the subindex dropped to 46.89 from 48. factories hit reply slowing domestic demand and deteriorating trade tie with the u.s. reflecting the stress in the kmoe, the central ban said the yuan at the lowest level in a decade parking more debate petition policy makers will allow the yuan to weaken past the 7 mark. the stock market held up butar
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of top corporate wh groups hid in long c cong. thpany shares down in 40% in being threate tariffs. the owners of schmiegefield in u.s. says earnings in third quarter fell b 31% of a a year ago. and the tariffs p on u.k products. the average price of pork in thes u.s. dropped is it 12%. the news adding to growing concerns about the econo here. what's more analysts expecting beijing to ramp up measures to stabilize growth in the coming months. nightly business report, eunice yun in s ijing. head to the new month let's turn to the bull appear bear for opposing views on the market. our bull is david lefkoviz. our bear is barry mes, the president of james investment research. good to see you bothor thanks joining us tonight. barry i start with you. >> okay. >> you feel like the action we saw in october is a hallm
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topping action in this market. >> we do. i will say that there was a goodbying opportunity last week which we tried to take advantage of to some extent for the clients. one of the things we see t lookg market number one valuationless at a -- at a fair market bottom pechlt e then less than 10. price to book less than 1 and dividend yields sver. no where close. the other thing we have is htantitative ting not easing process easing was responsible for a lot ofarket run up. elicitly a mania going on through september companies with no earnings losing money were up 27%. while those with earnings were only up 8%. and that's been kind of a theme that we have seen a while a just few stocks running that's made it difficult. and then lastly, when we look at the markets today we have had a trillion dollars of buybacks and sprkt earnings, the mgoket has no where.
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next year we are not having either of those. orat would that mean the future of the market. >> david quite a laundry list of concerns b thatry has. why are you still you will bullish at this point. >> yeah, i mean i think what we have seen in thisse off is just a bit of an overreaction. for sure there are a coupl of cracks in the facade, the trade tensions between u.s. and china are ramping up. you have pockets of softness. we heard abo what's happening in china. and the market is coneding higher interest rates. but that being said, i still think g thebal expansion remains solidly on track. you have china ramping up the stimulus. we think that's going to gain traction in the months ahead. and the tariffs while a headwind are not going to rail the global expansion or the u.s. expansion. so i think we are in a ansition period. but i still think we see continued economic and corporat profit grow >> and having said that, though, david we have noticed this summer a transitn to use your term away from growth stocks to more defensive issues in this
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market. and they seem toke lead the m higher. have you done the same thing? >> yeah we have noticed that transition as well. and at th t point wenk value stocks look more interesting. i think we're going threw a bit of a growth scare right now. and as we come out of in growth scare it's gng to be the economically sensitive parts of the l market thatd us out of this. and that tends to be value stocks. on top of that value stocks look very cheap relative to growth stocks and that's another support for i think a nice outperformance in the months heyde. >> barry i assume you are not 1090% in cash you found bargains last week. invest right o to now when you're not that high on the whole market? >> well, in the -- in the shorter run as david was saying, it's an upward market. we have momentum and a good economy. so i -- i agree that probably areas, the cyclical areas, mbe
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thenergy areas, that have gotten beaten up prechl lately would offer some opportunities. but i agree wholeheartedl about the value side, completely ignored nobody wants it. the bests general m time to buy something. >> technology had been a huge leader. ou before ask both of we go here, fang stocks especially, barry, they started to show wear and tear the last couple of months here. do you like the as bargains? or wouldn't touch them what do you say about them. >> well there are some i like. like apple. the others i'mot too interested in. i had a client earlier this year soldrv our conive fund, bought one stock amazon and said bus it only goes up. we know that's not always true. so we think that they are cutting dangerous groundno righ and we would prefer to move back into the other types much stocks. maybe even an ibm or intel for that matter as opposed to the fang stocks. >> david, what about you on fang
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stocks. >>ve a similar position. we are neutral on technology and communications services. and that's the sectors where most of the fangs reside. that being said, i think what's most important is maybe distinguishing absolute between these -- these different stocks. some of them lookctually pretty interesting and pretty attractive at this point. bu overall, our preferred sectors are now energy and financials and tech is not - we're neutral on tech not one of the preferred sectors. >> gentlemen,d g to see you both. thank you for jning us. coming up where to find opportunity after the worst nth in nearly adecade. and then jane wells trash talking. >> reporter: i'm in anaheim calirnia where these folks are pulling stuff out that has no business being in the recycle business. like this. who knew? the recycling business model is broken. how to fix it?
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we talk trash, coming up. as we close the books on what was one of the worst octobers in nearly a decade for the mechanic. our next guest says this global off may have yielded mouth watering opportunities for investoring. joining us david deets, the president of welt vow point management welcome back. >> thank you bill. >> you're one of the great contrarien out there when most areullish you are not. but now after this month you are
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looking for opportunities. it's been a brutal month with bonds and stocks going down. when you look at the investment landscape that's the time to roll up sleeves and look for bargains. we are old fashioned. we like to pay the least for each dollar of earnings and sales. we like to get the best dividend yield. you know there are some great swaths of opportunity out there. >> let's put it in terms of change traded funds. etfs you like that have had a tough time. guard total international stock etf has had a tough yearo butre snitching around on this. >> i love people saying they want to index. but it's dependent where you index. if you index overseas from the januar n high you are down 20% in the low cost van guard endex. but when you h at 1.8% dividend. 3% over there. l one thirs in terms of price to earnings price to sales. i think to myself getting more income, same sgrowth, a lot l
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for the financial metrics go for it. >> same thing here with the van guard ftse, emerging markets have suffered you are look looing at them. >> absolutely. here people say don't forget about growth. you know but when it comes to growth, there emerging markets growing about one third to 50% faster than there you the greater dividend yoeld. 3.2 versus 1. at almost 60% more growth what am i missing, bill. >> as far as etfs go. i share has the s&p 500 value etf appear growth etf which -- i'm guessing you go for the value at this point. >> it seems like i'm echoing your former guest. but year to date the val is down 6 or 7% while growth is up. i'm using that as a way to just continue to go into the value steas. remember over the o oh years value stocks have outperformed. decade re about a stretch where value
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underperformed. people say how long can you hang intost the valueks. >> well if it's been down a decade perhaps you have a decade ofco outperformance ng. >> very quickly a lot of viewers like dividend paying stocks for income and so forth but in the rising interest rate period it's tough to boy dividenin p stocks isn't it. >> well, it is. but the only thing worse than a good dividend paying stock is a stock with no income paid out because that's going to be even less competitive to hher bond yields. the two we recommend, exxon and caterpillar a as the quintessential value stocks with minating markets. 3% for caterpillar. 4% forexen. >> david love talng with you david with point view wealth management jo joining us here. kellogg cut the full-ier recast and that's where we begin the market focus after a quarterl b sales miss cause weakness in several of the u.s. businesses, the snacking giant tempered wall street expect aches was a revised profitout look for 2018.
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kellogg said the new guidance reflected increased spending on saystising, a strategy it leads to better revenue growth. shares plunged though today by 9% almost tom 65.48. brands said the new menu items likeacho fries and pickle fried chicken drew for skmoers in into the kfc and chains. the company said the two restaurants experienced strong performance overseas. yum brands finishedpore than 4% to $90.41. estee lauder said strong dpnd for skincare a mack makeup hepsd sealed. the the cosmetics company which reported a royce i profrt said emerging markets and the asia region saw robust growth. shares rose 4% to 137.44. and after the bell tonight wearable device make fitbit report a surprise profit and stronger than expected sales.
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as it sold more products. the company also said results for the current period to spass analyst estimates. the shares initially rose in the egter hours and also finished thear session up 7% to $ .73. waste management company republic sfrpssaid that it has seen the stock rise nearly 65% the last three yea crediting its success to its trash services. but recycling has been weak. in fact so weak that republic says the country's whole eecycling modelds to be scrapped. jane wells explains from anaheim,alifornia for us tonight. >> reporter: the recycling business is getting trashed. >> well, recycling model right now in the u.s. is >>brok. on slayinger is ceo of republic services, a waste managemepa comny doing well with the regular garbage business, not so well with
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recycling. and they're not alone. for years, the garbage man has collected our recyclables curbside often at a loss because he made goodngoney reselli a lot ofia the mat overseas especially to china. but now china has an air pollution problem. it has stopped boying things like the old card brd boxes. and the value of the commoditie plummeted fr00 a ton to half that. at the same time, the values of the commodities are coming count more and more consumers are putting a wrong stuff in the recycle bin. these people pull out the bad stuff, t stuff that shouldn't be in there. for example plastic bottles are fine. plastic bags gum up the machine. and while clean card board is great, if you put in t greasy part of your pizza box you could contaminate the eire load. >> contamination levels are as much as %. so we are sending in separate trucks to the home to collectho whatd be clean recyclables
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and having to spend a lot of additional effort and money frankly cost in cleaning thatma rial up. >> reporter: republic services has invested in technimogy to ove sorting but it warning that if the resale value stays low collection rates at the curb will rise. thou they m rice slowly process people learn what goes in the blue bin andway doesn't. think loose paper clean kas and bottles because the company says here is theor ugly truth all the good intentions nearly a third of what comes in here these days end up in the landfill any how. eport janey business wells. coming up, the most expensive hotel room in the country. and wait until you see the bill!
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finally tonight it is the priceyest the hot room i america. and will you not pleef what you get for the provides. our robert frank got the first ever on camera tour.te >> rep straight through the mark hotel lobby and up 16 floors is the most expensive hotel room in america. >> welcome to the markland house. >> i wish i brought my bag. >> general manager olive anyis gifting the tour of the 7000 a dollar hotel suite. >> how big is this suite. >> 75,000 square feet.
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>> the which french designer whose portfolio of clients includes royalty and some of the biggest names in fashion. t >> this ishe main living room of t penthouse. the ceiling height is 26 feet. there are five bedrooms, including not oneut two master suites. and heads up in the mastere bat whater flows out of the ceiling. >> let me show you theouse upstairs. >> one flate up past the s lit lounge is a 2,500ooquare wrap around terrace. >> it's a great roof for the big party. >> perfect forzi amang party. >> you get midtown, central park. >> nothing like it in new york. >> what's include in this hotel room. >> absolutely nothing. except this wonderful space. >> $75,000 a night i would assume thatlu incs breakfast, if you. >> if you are a potential client it's not a question yousk a
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if you ask for it i'd be happy to include it. >> penthouse guests blow past $75,000 per night and spend more money on the hotel's over t top perks. >> we have a agreement that allows youically to get something if he time of the night and day we can takeou to several downtowns and have you served along the hudson for a few hours. >> what if i like hotdog. >> there is a hotdog outside the hotel sellinged createdou b chef. >> the chef has a two-stann mith restaurant has a hotdog cart dploo what's the longest stay you have had here. >> 16 months. >> you said months. >> months. >> not days. >> months. you heard me. >> that that's a big hotel bill >> it is but obviously they could afford it. >> for nightly business report, robert frank, new beyork. >> mus nice. the before we go let's take a final look at the day on w
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street. a few more people were able to afford that hotel room with the dow up 2451 points. at 25118 appear the nasdaq up the. the indexes had the worst decline in several years. the nasdaq with a % decline biggest in a decade. that's nightly business report for tonight. i'm bill griffeth. have a great evening s we'l you tomorrow.
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>> this is "bbc world news america." >> funding of this presentation is made possible by the freeman foundation, and kovler foundation, pursuingo tions for america's neglected needs. >> wow, that is unbelievable. ♪