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tv   Nightly Business Report  PBS  December 26, 2018 5:00pm-5:31pm PST

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>> announcer: this istl "nigh business report" with bill griffeth and sue herera. better late thanev. scene finally shows up wall street in a big way. stocks had one of the best days in a decade. the question is, can investors breathe easy now? and money moves with volatility back, some expert advice on what you need to do with your portfolio as the new year approaches. all that and f more this nightly busines report tonight. it's wednesday, december the 26th. en and we do bid you good ening,everybody. and welcomes. that was interesting. following the worst christmas eve eve for the dow and the s&p 500 on monday,tocks staged a powerful rebound today. and made this the best day after
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christmas ever. in fact, an all-time recor day with the dow posting the biggest one-day point gain ever and the best days for stocks in nearly a decade. the final numbers, t dow surged by 1086 points or 5% closing at 22878. the nasdaq jumping nearly 6% for 361 points and the s&p 500 rose 116. 5% gain. one more stat. today's percentage gains were theest for the major indexes since march of 2009. bob pisani h more on the rally. >> stocks staged an impressive on the dayfter christmas. in fact the best post christmas rally for the dow and5&p in years. the dow surging more than 1,000 points closing right around the highs for the day. the best showing since march 2009. tech heavyhe nasdaq. ed by the fang names
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facebook apple, amazon and google parent company alphabet. apiece.6 to 9% the markets got an early lift om kevin hassette who told nbc new nas despitehe harsh criticism of federal reserve chairow jayl powell's job woss was 100% safe. macy he is and the other stores sharply in the green after the strong holiday shopping season. keep in mind the dow and s&p 500 are still on pace for the wor losses since the great depression. it signals more seller exhaustion than buying enthusiasm. regardless it might be tough to ball a market bottom yet but it a good srt. for "nightly business report" bob pisani at the new york stock exchange. o a big day in the oil pits where domestic crude had the best day in two years. the u.s. benchmark c wsed up nearly 9% above $46 are b
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helping to push energy stocks higher exxon chevron, marathon oil and hess led higher todaes butte the surge oil prices are still more than 40% below the most recent high back on october 3rd. and as bob pisani mentioned earlier, fed chairman jerome powell got a vote of confidence from the winte house a to the bullish sentiment on wall street. butev as liesman tells you now, the president's issue was the fed may go beyond the chairman. ident's top: the pr economic adviser affirming to reporters wednesday the president does not intend to fire federal reserve chairman jerome powell. >> is t cirman's job safe. >> 1090% yes. >> hundred one hers not in es on. >> yes. >> after numerous reports that president trump angry at the fed for raising rates have been asking dwirds if he has the
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power to fire jerome powell. the nominated powell to post in 2017. on christmas day the president continued his battle with the fed, though perhapsd softe his attacks up a bit. >> i have confidence but i think it will straighten. they raising rates becausehey think t economy is so good. ut i think that they will get it pretty soon. >> reporter: the president's criticism of powell and reports of the firing are among the foorks underpinning the recent market selloff. after that overall and the president's administration, a trade war, a government shutdown and nears o the fed that raises rates too much in the face of a weakening economy. one problem for president trump is is that his problem is technically not just with the fed chairman. of the five members of the board of governors four were nominated by president trump and all approved by the senate. all voted for theate hike in december. comments comments of kmarnd hassette the president's
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remarks aren't the beginning of the truce between president trump and the fed. if sew behind the fierce of selloff markets can cross one f the list. i'm steve lies i mean ofrmgtsven day f the partial government shutdown. the president is doubling down. he said today that he is readyai to it out and the shutdown could impact some of the teconomic datat wall street relies on. ylan mui looks at that part. >> the government shutdown could wlast all theay into the new year. president trump's spoke toak reportering a surprise visit to the troops in iraq where he doubled down on the comments he made cistmas day. he said no money for the border wall, no government spending bill. >> moug do you think the shutdown wl last, mr. president. >> whatever it takes. i mean we'll have aall. we'll have safety. we need safety for ou country. >> this is a partial shutdown. and affects about 2025% of the government. about 800,000 federal workers aren'tch getting a pk right now. and about half of them
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still have to show up for workanay. on when some of wall streetct favorite data points are released. new home sales and a report on internationa trade andretail won't be released this week. data on construction spending set to come out next week could be affected. hour the labor department is not part of the shutdown.ns that mea the job support is still on for january 4th. presumptive house speaker nancy pelosi says she will hold on a vote on the bill to reopen the government once any take control of the lower chamber next woke but theasenate has to it. and the president would have to sign it. so for nowhe impasse continues. for nightly business report, yulin mui in washington. >> certainly there has been no shortage of volatility in thes markhis month. i mean that's for sure. the question is, who or what is to blame for all of the dramatic market swings? humor machine? today, the "wall street journal" in this arm aid that
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computerized trade something a playing a growingole in volatility joining tusreg suck zuckerman and also kenney pulcari spendingore than 30 years on the floor of the exchange. he is at an asset management firm. greg tcertainly, volatility 85%eased by some estimates of all stock trade something now done by computers or you know i some variation like that. some people think that's a good thing. somee think it's a bad thing. what your article seems to suggest is it's just a thing, right? >> very good. too many people sort of misinterpreted our piece to be bashing the quantities. they trade frequently. give liquidity to the market. but also add a certain level of volatility. to me i aue that they -- there are trends in the market,
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fundamental trends and accentem they push things in one direction, coula be up in the few years and down as well. don't point the finger cessarily at the algos as they call them. but they are responsible for some of the volatility. >> kenny i read your twitter feed. you are one of the humans on the trading floor. you're not a fan o computerized trading why. >> they close the market up a thousand almost 1,100 points on the dow that wasn't just the humans buying. it was all driven by algoriths and h frequency. i get it technology is here to stay. computers.shing but it amplifies the moves. e algos jump on and they have to respond. as the market moves higher the algos get aggressive. the sell sightsees it happens. cancelling inline oers and moves the offers higher and forces the algo to reach.
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where the market is up 1,100 points on the dow. >> greg, i knowne thing kenny a point he made repeatedly on twittered and these need to be regulated is the s.e.c. up on the computerized trading. >> i don't think anyone is. i think things dramatically in the last few years over thee course of ast few years. i don't think anyone was calling for regulation of the markets ov the last five six years when thelgos became t kings of wall street. you no longer have the peter lynch whose wife comes home and like blands of hosiery which is what he did with legs and made a for the un. you have the algos pushing up the market and now pushing things tdown. t's the point. that's exactly the point and see you have the computers making the decisions based on a set of input data without understanding you know what the word means at the intonation means, the smart logic read sentences
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picking oiv pos or negative words and create action or buy or sell or and accents and amplifies moves. taking the dscommon the investor o after average retaeser retail ir saying how does this happen? giving enemy a sense of concern, right. they're concerned about how can the market do this? how can we have the markets moves? the last week down 1,500 points in three days. >> i would disagree there.he i don't think is that many investors doing that as you say seeing a word in trading on it. a lot of the programs these models are really doing what the old fashioned investors used to do to do by a low and selling high. there are all kientds ofgrnputs. >> i but do you think the market up 1,100 points or down 600 points the day before christmas or five hundred points the thursday market. is normal. the human pucks never moved the look t'm not saying it's
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wrong it's the amplification of the move whe market foes up everybody pats themselves on the back. when they go down they have a nervous breakdown. i'm in the business people ask me oh my god what do i do? you have to try to calm them down. >> last word greg. >> i don'tisree it amplifies things. but let's remember there have been panics since the buttonwood try. 87 was. >> i lived it. >> you can. >> iheived it. >> you go. we got crushed in things for no goodn in '87 with you can't look back to the goodld days when guys were on the floor. >> i got to go kenny i know you want to keep the conversation going. i'm out of time. i feelike i've been sitting around the christmas dinner table wonight. kennh butcher joseph. greg zuckerman withll the " street journal." >> great seeing you. >> bye. >>neiece of pricing data. home price flat in october.
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schiller ogic case index measuring home prices in major markets across the country rose 5.5% year over year in october. and that was unchanged from the september reading by th way. the slowdown in price growth is actually seen as a positive for home buyers. >> whave a follow-up now on a story we first reported on several years ago, the former chief executive of insys therapeutic it is is pleading guilty to a tick kickback scheme to bribe doctors taking their medication. michael bab itch resigng a the ceo drug maker ceo back in 2015 scheduled to go on trial next month but is pleading guilty to conspiracy a mail fraud charges. coming up, the next wave. it's the day after christmas. for a lot of shoppers that meann hi the mall. billions of dollars expected to be spent today on december 26th. it's expected to be one of the
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ten biggest shopping days of the year. spding gift cards, returning unwanted gifts. we're talking all about it when "nightly business report" returns. master card spending poll says that retail sales excludi autos topped 5% between november 1st and christmas eve.
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fedex and ups had already said they expected record volume this holiday season. and today weutound how the major shippers did. frank holland hasin the shi score card. >> the week before christmas is essentially the super bowl for the three major shippers. and today we had the holiday delivery report card, grades given based on on time delivery. the post office getting the highest marks at 99% with fedex anded behind just slightly behind. overall shippers saw the best oe ates since 2013. also a record amount of e commerce deliveries. 2.5 billion total. this year2 3 days between thanksgiving and christmas, the highest numbers of days possible. and during theead up to christmas, including thanksgiving week, black friday and cybermonday, ups had the best on time performance with a 98% success rate. including returns and exchanges from peopleng holiday shopping for themselves. ups andea fedex now up for
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the second wave that returns today and continue into the new year. fo "nightly business report" frk haaland. >> the next wave that frank mentioned. started today. eric chemy has been tracking that from wood bridge, new jersey. >>ter: while many people think the retail shopping season ends the night before christmas. smillions ofhoppers can't wait for the day after christmas to buy everything on their wh list. december 26th is so popular in fact that shopper track is projecting it to be the eighth biggest retail day of 2018. three of the biggest reaso for post christmas shopping with big discounts, spending gift cards and returning or exchanging unwanted presents. taking advantage of discounts after christmas is a textbook move for many savvy shoppers. clearance sales abound heret the booed bridge center mall. >> my daughter got a lot of money in gift certificates. we knowfthe day christmas is gate day for sales.
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>> i do shopping with my dad. every tay we come day after. he gives us money and we splurge. >> i had to returnnd coat i dread to do because i thought the lines were awful. but it's great. >> down here to spend give cards r the kids. >> for shoppers receiving gift cards in a great day to spend them off. but not everybody remembers to use them letting them disappear in a closet or drawer. ceb investment group estimatesl $1 bilon working of gift cards expire without being spent oop be even though the market as dived lately. just on wednesday master card said this holiday season is the ben it's bee in six years. for nightly business report, i'm eric chemy in wood bridge, new jersey. roku is crowned as a topic at needham where we begin the
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market folks. needham named a it topic for 2019 due to the revenue growth, margin expa pricing power and overall strength in a growing the reiterated the buy rating on the stock with pennsylvia $45 price target. roku shares popped 11% in today's rally to $30.35. last week we tol you the drug maker para government o was give and tax bill just shy of $2 billion app amount parago said it would appeal. the news shaved off 30% of the stock last week. some recovered today as the liiday. de for them to appeal the decision gets closer. shar rose 11.5% to $40.70. wedbush securities sayst pects demand for sfla's model 3 vehicle to continue to rev higher. and analysts at the financial firm said consumer interest surrounding the car will likely be strong next year and beyond. and that mns it's less likely the auto maker has to raise
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capital in the near term. and investors like that sending shares higher by 1 to 326.09. and blue apron and weight watchers partnerin now on meal kits for 2019. they say the partnership will mean stabilization and hopefully growing a subscriber base without spending on advertising promotions. blue apron shares jumped 79 cents. weight watchers meanwhile rose about t5.ay to 42.35. well for the first time in the 50-year history i max has pulled in a billion dollars worldwide at the box office. but the big screen theater chain owner also recently announced it's shutting down its virtual reality locations and writing off vr content investments. but it's still betting on iovirtual reality loc based entertainment centers to bring vr to the mainstream.
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and julia boorstin has more oxygen that. >> virtual reality didn't take off the way many had hoped. as consumers proved reluctant to n vest hundreds of dollars head sets. even i mocks is shutering seven uial reality centers around the world. but that's not stopping the push to make virtual reality or vr main stream. and end up in a mall near you. according t one estimate, the category expected to grow to the $12 billion within five years. dream skap is opening locations in five cities around the countr include thi in los angeles. ndr $20 visirs dawn a headset backpack and handeed centers to enter a virtual world for a to. minute experien >> we bleebl location based vr is the tip of the spear for the entire vr industry. gettg people exposed this unique medium and those of us creating it, we'reearning the capability as well. >> dream skap is backed by
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theater chains amc and i max. fox, warne woers and mgm. the studios aretregic partners looking to expand into new demands while theheater chains explore the virtual spoernss into lobbies ofcrineplex as they adapt to declining movie ticket sales. spaces backed by comcast launched a multisensory term fater sentation at one of the california big mall. disney invested through the incubator problem in the void which has 17 location based vv distinctions by year end. featuring a stwarps experience.r waarks behind franchising men in black coved s dreamp to take proposal yum hold content into a new format and adapting to changes in the industry. >> there are many reasons for people not to go to movies at theater. the ability to stream at home
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how extraordinary the television and sound is. so they're very anxiousot only to see vr succeed in and of itself but also toreate more energy around places like this that sort of support the communal aspect of film going. >> but the jury is still out on whether consumers will want to spend hundreds of head sets or even $20 for an immersive expernce at a mall. for nightly business, julia boorstin in los angel. up next, portfolio tips from a financial planner as you ring in the new year. so as another year winds down, now may be a good time to start considering changes to the
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portfolio in the new year. and joining us tonight for a rategy session is tony drake. ceo of wealth management firm drake a associates. tony thanks for joining us tonight. bill. t to be here, >> first of all can you blame anybody who may be a little hesitant to put money to work in a market like we see these days. >> boy, the volatility has been unbelievable. today we saw obviously incredible pop with the master card data comingout, maybe the best shopping season in six years. but it's scarey for the average folks at home investing and looking at 401(k) bances. >> let's start broadly first. next year, can we the -- stocks versus bonds. who do you think performs better necessarily? >> you know, we're definitely seeing a move to the bond sector aflt i think there are equity sectors that like well. the financial sectary we are a couple of interest rate rye rises. the potentialve steepening the yield curve could be attractive in particular, high dividend paying financial sector items. >> wha about -- on the
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bondside, especially if wealk abou treasurys shorter term, longer term bonds you th >> i like the shorter term duration bonds if you buym t individually there are attractive etf that are managed. the managers maintain the shorter duration that is can be a great alternateoef cash. >> on the equity side i noted you like utiliti for next year. if you like the financials because rates are going higher next year, that's not good for utilities, is it? >> no, there are certainly a couple of different moves there. but utilities, if the volatilit hibits at the level it had been, those perform really nice in thosee economies that ust struggling along. there are great utilities outer with great dividends. helping to offset theshort-term volatility on the equity side. >> real estate, we have a slowing of theousing market here. but yet real estate investment trusts have one wellstill.
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and see a good place for income still? what do you think for 2019? >> yeah the reits can be a great place if you don't need liquidity. paying off nice dividends. if you look for short-term investment in residential real estalo i think thatng we are seeing could turn to negative next year and cause sproblems. hore a great thing to buy if you buy erlong but short-hon term i'd say away from zrepgs real estate. >> cash plenty of money managers have been saying because of the volatility, the declines we have seen in the market maybe cash is whmore attractive investment vehicle. do with the cash where do you stash it in the meantime. >> it's about havg the plan and what stage you are in the investment planning, close to retirement i retirement. but we are seeing rising rates in mutual moneyt mutual funds. again the short--term duration bonds could be a great alternative. interestin we see some data out of economists with fixed indexed annuities as altnate toef cash long-term.
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there are a couple of option there is. but you always want to when y jump o and panic with this volatility i think it's easy to panic for folks. and you know imagine in the airplane you feel they volatil you don't hid for the exit. you need a plan. cash b mig part of the plan but make sure it's an overall picture. >> before we go, gold, do you likeit? i mean it's usually talked about as ani per percentage in a portfolio of some kind. but if inflation rises wu t do ink about gold? >> you know, gold is a tricky area. viously there is some volatility in the metals as well. i like it as alternative for a small portion of the portfolio. but i think there are better opportunities for cash in the portfolios nowia days. >> all right. and you think we see volatility continue in 2019. >> he asked naively. >> how could we not almost? i think the chances of 3% gdp. 25% earnings is tough to maintain. >> right.
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>> as that reduces the benefits from the tax cuts and you know the -- the fear over the tariffs. it's tough. companies need to know. 1025%? what test going to be. >> tony drake with drake and associates. thanks for joining us. >> thanks bill. >> a fal look at a record day on wall street. biggest one-day average gain. the s&p up 5%. that's it for "nightly business report" thanks for joining us, everybody. i'm bill griffeth. have a great evening. see you tomo.
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>> this is "bbc world news america." funding of this presentation is made possible by the freeman foundation, and kovler foundation, pursuing solutions for america's neglected needs. and now, "bbc world news." ben: hello. this is "bbc world news." i'm ben bland.