Transcript: Nightly Business Report – September 4, 2015

NBR-ThumANNOUNCER: This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and
Sue Herera.

SUE HERERA, NIGHTLY BUSINESS REPORT ANCHOR: Rate rage. The August
employment report intensifies an already heated debate over the Federal
Reserve interest rates and your money.

Where the jobs are — and aren`t. The industry`s expanding their
ranks, and the one that is shrinking.

And a win-win. Meet the entrepreneur who found success off the court
while coaching student athletes on the field.

All that, and more, tonight on NIGHTLY BUSINESS REPORT for Friday,
September 4th.

Good evening, everyone. I`m Sue Herera. Tyler Mathisen is off this
evening.

Just strong enough, that`s how the August employment report is being
characterized by some, and it was also just strong enough to punish stocks.
The Dow Jones Industrial Average plummeted 272 points to 16,102. In
reaction to that jobs number, it was off about 350 points midday. The
NASDAQ dropped 49, and the S&P 500 fell 29.

The concern in the markets is what it has always been, the timing of a
rate hike. And the stronger the number, the greater the possibility the
Fed could raise rates at its next meeting in just two weeks` time.

The economy created 173,000 new jobs last month, fewer than expected.
However, the unemployment rate at 5.1 percent was the lowest in more than
seven years.

But as Hampton Pearson tells us, what the Fed does next is anything
but definitive.

(BEGIN VIDEOTAPE)

HAMPTON PEARSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: In August,
headline unemployment fell to a seven-year low, but hiring was the slowest
in five months. However, job growth for the last three months has averaged
221,000, after the government revised job growth upward for June and July
by 44,000.

But wage growth at just over 2 percent over the last year is still
below normal for recovery. Lots of Americans remain on the sidelines. At
62.6 percent, the labor force participation rate remains at a 38-year low.
Enough ammunition leading economists, say, for monetary policy makers on
both sides of the debate for raising interest rates.

NEERA TANDEN, CENTER FOR AMERICAN PROGRESS: I still see reason for
anxiety when we get a lower than expected number like this.

KEVIN HASSETT: I`m pretty confident that this number is strong
enough, especially with the unemployment rate to get the Fed to move.

PEARSON: Health care leads the way for job growth, creating nearly
half a million new jobs so far this year.

DR. WILL KIMBROUGH, ONE MEDICAL GROUP: What we`re aiming to do is
create a comfortable high-quality, high-touch setting, so that patients
feel really comfortable, have easy access to their doctors and primary care
providers.

PEARSON: Dr. Will Kimbrough is on the front lines of the makeover of
the $125 billion primary care business. Running the Washington, D.C.
offices of One Medical Group, the fastest growing primary care network in
the country with 40 locations in seven metro areas. Patients can book
same-day appointments through the company`s online and mobile apps, as well
as use customized electronic medical records. The goal: to make the
doctor/patient relationship more efficient.

Among the more than 300 new workers hired nationwide this year is
Sarah McCormack, an experienced nurse, being given a chance to reinvent her
job.

SARAH MCCORMICK, NURSE: I`m used to seeing patients on the back end
of things when it`s — the problems have already created, you know, and
they`re in the hospital.

PEARSON: Heading into Labor Day, 8 million Americans have found jobs
in the last three years. And the unemployment rate is at its lowest level
since 2008.

But even top government officials agree wage growth has been the
missing piece in this recovery.

For NIGHTLY BUSINESS REPORT, I`m Hampton Pearson in Washington.

(END VIDEOTAPE)

HERERA: And as Hampton just reported, the health care industry is
indeed leading the way in job creation. But as Morgan Brennan tells us,
there`s one sector that is still suffering job losses, and that is energy.

(BEGIN VIDEOTAPE)

MORGAN BRENNAN, NIGHTLY BUSINESS REPORT CORRESPONDENT: The mining
sector which includes oil and gas shed another 9,000 jobs in August. The
Labor Department says that brings a total losses up to 90,000 since
December. We`ve seen declines every month this year, but the cuts seem to
once again be gaining momentum. Many in the sector have been keeping tabs
on announced layoffs.

Oil consultancy Graves and Company says, BP, Sandridge Energy
(NYSE:SD), and National Oilwell Varco are few of the companies that
announced stateside cuts in August. And with crude prices against sliding
below $50 a barrel, experts saying more cuts are coming.

JOHN KILDUFF, AGAIN CAPITAL: There`s no doubt that there`s going to
be scores of thousands of layoffs announced over the coming months as the
industry retrenches because of this low price environment.

BRENNAN: Earlier this week, oil and gas giant ConocoPhillips
(NYSE:COP) announced it would slash 10 percent of its work force. But it`s
no longer just energy companies laying off workers. The pain is rippling
out to other industries as well. Last month manufacturing shed 17,000
jobs, and a big chunk, 7,000, were in fabricated metal which has been
dented by a steep drop in demand for products used in drilling.

The sector is now basically flat in terms of jobs growth for the year.
Still, U.S. Deputy Labor Secretary Chris Lu said there could be a long-term
solution to some of these losses.

CHRIS LU, U.S. DEPUTY LABOR SECRETARY: Whether it`s manufacturing,
whether it`s construction, there`s clearly much more we should do. And we
have a solution, and that`s long-term infrastructure bill that produces the
kinds of jobs in both of those sectors. There`s a good metal-paying job to
get people back to work.

BRENNAN: But whether and how Congress chooses to tackle that subject
when work commences again next week is a big question mark. Meantime, with
commodity prices so low, the pain, as evidenced in today`s report, keeps
coming to the oil patch.

For NIGHTLY BUSINESS REPORT, I`m Morgan Brennan.

(END VIDEOTAPE)

HERERA: For more analysis now on the labor market and the Fed, let`s
turn to Millan Mulraine. He is chief deputy U.S. economist at TD
Securities.

Welcome. It`s nice to have you here, Millan.

MILLAN MULRAINE, TD SECURITIES: Thanks for having me.

HERERA: You say this is a broadly positive report. I mean, energy is
a special situation certainly. But you saw a lot of positives in this
report.

MULRAINE: Yes, absolutely. I think this reports strikes a number of
right cause (ph) for Fed, when it meets in a couple of weeks. I think they
will take a number of key boxes that they in the benchmark that they`ve set
for their decision on tightening policy.

I think we did see some disappointment on the headline number, but I
caution reading too much into that, because one of the things we`ve seen
over the past four years is the tendency for the August spread to come in
quite weak, only to be revised significantly higher. In fact, on average,
it has been revised higher by almost 100,000 over the past four years. In
effect, that`s essentially saying this report could mean that in a few
months` time, we`ll be looking back at August and thinking that we`ve
created close to 300,000 jobs.

So, for the Fed, I think this is exactly what they will be looking
for, to tighten policy in a normal environment. And that normal
environment no longer exists here.

HERERA: Right, it doesn`t. You`re one on the street who thinks that
they`re not going to go in September and raise rates. You`re all the way
up into March of 2016.

MULRAINE: Yes, absolutely. It`s no longer a matter of whether or not
the economy is sustaining a positive momentum of the past few months. The
labor market recovery remains on track. That is encouraging for the Fed.

I think the bigger question for the Fed is the outlook for growth and
more importantly for inflation. That must be seen in the context of what`s
going on globally and particularly in China. We did have some significant
market volatility and turbulence in the financial markets.

That`s not what`s going to cause the fed to be cautious. It`s the
implication of that, and the signal that it`s sending to domestic consumers
and domestic businesses. I think because of the uncertainty that that
entails for U.S. activity, whether it`s hiring activity, investment
activity on the business side, even consumer spending activity, the Fed is
essentially clouded the outlook for both growth and inflation for the Fed.

I think because of that, the Fed will take a pass in September, and
inflation to start drifting lower. I don`t think the Fed`s going to be in
a position to tighten policy again until sometime next year.

HERERA: All right. Millan, we`ll leave it there. Have a great long
weekend. Nice to see you.

MULRAINE: Thanks for having me.

HERERA: He`s with TD Securities.

Georgia is becoming a lead player in the television and film industry,
thanks to a generous tax incentive that is now seven years old. It has
helped Georgia earn the nicknamed Yaliwood. The growth is causing labor
pains as well, pains that the state hopes to ease with training programs
designed to give more of its residents supporting roles in TV and film.

Mary Thompson in Atlanta tells us where the jobs are.

(BEGIN VIDEOTAPE)

MARY THOMPSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: Georgia is
building a name for itself in movies. Thanks to a generous tax incentive,
the state is now third in TV and film production behind California and New
York. The state welcoming the industry`s rapid growth, and the estimated
$6 billion in economic impact it`s bringing this year, though not
everything is peachy.

LEE THOMAS: We`ve had a little bit of a growing pain, in just that
we`ve had a run-up so quickly.

THOMPSON: So, sometimes it`s hard to find in-state electricians,
artists and others needed to staff a movie or show. Something EUE Screen
Gem Studios Kris Bagwell said could cause industries to look for outside
Georgia.

KRIS BAGWELL, EUE: It`s a lot cheaper for production to hire local
talent than to bring folks from L.A. and New York and pay their housing and
per diem and everything else.

THOMPSON: Lee Thomas heads the state`s film and TV office. Along
with keeping the tax incentive in place, she said Georgia needs to train
workers to keep the shows and movies coming.

So, Georgia`s launching a film academy to train and certify entry
level workers and retrain others looking to polish their skills for film.

THOMAS: It will be something you can quickly put people through for
very specific types of jobs. And if they want to go further with it, these
certificates will be applicable to longer degrees.

THOMPSON: About 30,000 Georgians work for the TV and film industry,
which Motion Picture Association of America says pays an average salary of
$84,000 a year.

It`s one reason Rachael Crump, a widowed mother of four has gone back
to school to be a script supervisor.

RACHAEL CRUMP: It seemed to be where all of the focus was going in
Georgia.

THOMPSON: While for Rick Harris (NYSE:HRS), it jump-started the air
conditioning business he launched in 2007, cooling the set of the movie
“The Blindside.”

RICK HARRIS: Since we started in 2007, we basically doubled in size
and equipment and staff, everything for the past several years.

THOMPSON: He`s gone from two units to 130, two employees to 14, and
$1 million in revenue to several million, proving you can make money in
movies as a supporting player, a cast Georgia is looking to grow.

From Atlanta, I`m Mary Thompson for NIGHTLY BUSINESS REPORT.

(END VIDEOTAPE)

HERERA: Still ahead, will the cheap gas last? There`s one big wild
card that could send prices at the pump higher.

(MUSIC)

HERERA: Nissan is recalling nearly 300,000 vehicles, specifically its
Versa and Versa Note models to fix a console panel that could catch the
driver`s shoe and delay braking speeds. There`s been an accident related
to the issue according to Nissan, but no deaths have been tied to that
problem.

Gasoline is cheap. It`s expected to get even cheaper. And as we
reported last night, drivers will take notice when filling up this weekend.
But will the low prices last?

Jackie DeAngelis looks at the one big wild card that could potentially
reverse the trend.

(BEGIN VIDEOTAPE)

JACKIE DEANGELIS, NIGHTLY BUSINESS REPORT CORRESPONDENT: On the eve
of the holiday weekend, millions of Americans are preparing to hit the
road. They`ll be happy to see that average gas prices are the lowest since
Labor Day 2004. And $1 less than they were a year ago.

Why the cheaper gas? Well, summer driving season is coming to an end.
So, oil refinery maintaining season, as the cheaper winter blended gas
comes online, prices at the pump should fall. AAA says $2 by the end of
the year for the average.

ANTHONY GRISANTI, GRZ ENERGY: Gasoline prices and crude oil prices
trade in tandem with each other. So, if you see one drop, the other one
should follow. In the case of gasoline, it could probably drop a little
bit more because the market is very well-supplied going into the winter.

DEANGELIS: But not so fast. Crude oil is the wild card in this
equation, and it needs to cooperate.

GRISANTI: If we get a spike in crude oil prices, say $50, $55 a
barrel, you won`t see $2 at the pump for gasoline prices. They will rise
definitely along with the crude oil. But it is a well-supplied market, so
I wouldn`t say that the rise would be the same percentage as crude oil. It
will lag, but we won`t see $2.

DEANGELIS: The recent price range for crude futures has been $42 to
$48. Many traders expecting that range to hold barring a black swan event.
If there`s a breakout, it`s likely to the down side. Having said that, the
volatility in crude has been unprecedented, in the last two weeks we saw
prices jump more than 20 percent only to fall another 10 percent. For this
week, up a little more than 2 percent.

So, hit the road and relax this weekend. But buckle up for next week.

For NIGHTLY BUSINESS REPORT, I`m Jackie DeAngelis.

(END VIDEOTAPE)

HERERA: A nearly half a billion dollar purchases by BlackBerry is
where we begin tonight`s “Market Focus”.

The company will buy rival mobile software provider Good Technology.

More than half of the devices running on Good`s system are Apple
(NASDAQ:AAPL) products. So, the move could help Blackberry win over more
business customers. The stock closed nearly 2.5 percent lower to $7.28.

Amazon (NASDAQ:AMZN) is also bulking up. The company`s cloud
computing unit purchased a video processing startup called Elemental. Some
reports estimate the price tag of the deal was half a billion dollars.
Elemental helps smooth out streaming of shows, films and other media
content. Amazon (NASDAQ:AMZN) shares fell about 1 percent to $499.

Netflix (NASDAQ:NFLX), this year`s best performing stock, posted its
sixth straight day of losses. This is the video-streaming company`s
longest losing streak since March. Shares were off more than 2 percent
today to $98.79.

And a downgrade for Caterpillar (NYSE:CAT). R.W. Baird reduced its
rating on the mining and farming equipment maker to neutral. This as
volatility in China could continue to weigh on the company`s shares. The
stock fell nearly 2 percent to $73.10.

Our market monitor tonight is a classic stock picker who likes
companies he said are misunderstood by the market. He is David Marcus
(NYSE:MCS), chief investment officer and CEO at Evermore Global Advisers.
It`s his first time joining on the program.

It`s good to see you, David.

DAVID MARCUS, EVERMORE GLOBAL ADVISERS: Thanks.

HERERA: Thanks so much for coming in, especially on a long holiday
weekend. We appreciate it.

You say that you are buying crisis. You never sell crisis. So, tell
me why.

MARCUS: Well, I think that when there`s a crisis, investors generally
go into panic mode. They don`t care what price they get, they just want to
get out. That`s when you get your best opportunities.

So my view is, when they`re dumping them, I want to be buying them.
That doesn`t mean I`m backing up the truck and buying everything in sight.
You still have to be smart about it, do your homework, understand what
you`re buying. But the key is, we really like to think of this as what I
would call a nibbler market.

HERERA: I was just going to say, that`s how you described it, a
nibbler`s market.

MARCUS: You nibble, take a small bite. For example, a day like
today, the bad day out there. You take a small bite, you still have
resources to come back on another bad day. If we gobble, we might use up
all of our resources. So, the key is to take small bites, but take
advantage of the bad days, and not freak out, not panic. Just relax.

The headlines are much worse than the reality.

HERERA: Yes. Stick with your plan.

MARCUS: That`s right.

HERERA: Hopefully you have a plan.

MARCUS: Absolutely.

HERERA: I know you have a plan.

MARCUS: We do.

HERERA: So you say that have been buying. Let`s look at some of your
picks for us.

Voya Financial, retirement and annuities. What do you like about
Voya?

MARCUS: So, Voya was spun out of ING Bank, the big Dutch bank, a few
years ago, when they were going through their crisis. So, Voya, 70 percent
of it is retirement accounts. The other 30 percent is annuities and mutual
funds. It`s just sort of a mispriced company, extremely well-run. It`s
only been a public company for two years.

So, I think investors are getting to know it. It`s what we would call
an annuity-like business, because these 401(k)s stay there forever. It
cranks out cash flow over and over. So, it`s a cheap stock, excellent
management running it. I think investors are just learning about this
company now.

HERERA: Kind of an undiscovered gem in your portfolio.

MARCUS: It really is.

HERERA: WP Glimcher? Did I say that correctly?

MARCUS: That`s right.

HERERA: This is a REIT.

MARCUS: That`s right. This is a company that owns 121 retail
shopping centers in the United States. Over half of them are in closed
malls. The rest are strip malls and open-air malls.

But this is a company that is below the radar. It`s $2.5 billion
market cap. And it was — part of it was spun out of Simon Properties
about a year ago, which is the biggest mall operator in the United States.
And then that company, Washington Prime, acquired Glimcher.

So, it`s now called WP Glimcher. Investors just don`t understand it.
When it first merged, or the acquisition, the stock was $20. Today, it`s
11 1/2. You`re getting just under a 9 percent dividend yield. It`s
extremely undervalued.

HERERA: Let`s go on to your last one, quickly, which is ING, which
spun off Voya. So, you still like ING?

MARCUS: Yes, we like it a lot. So, this was bailed out by the Dutch
government a few years ago. Everybody hated it. The goal is to go back to
the roots in traditional banking.

Well, the news flash is traditional banking can be highly profitable.
So as they sold noncore assets going back to their roots, profits grew.
They were selling things like Voya and some other businesses, and slowly
investors are waking up to the value.

And it pays a tiny dividend today. But that`s going to grow as the
business continues to improve. It will also participate in the growth of
Europe, where we spend a lot of our time as well.

HERERA: That`s right. You like Europe a lot.

David, we have to leave it there. Thank you so much. You had a very
good year, so good luck. Appreciate it.

MARCUS: Thank you.

HERERA: David Marcus (NYSE:MCS) with Evermore Global Advisors.

Well, a select group of the world`s most influential CEOs and
politicians are meeting to discuss the outlook for the global economy, and
some of the key risks that have been dominating the headlines in the last
few weeks.

Julia Chatterly has more from the invitation-only event in Lake Cuomo,
Italy.

(BEGIN VIDEOTAPE)

JULIA CHATTERLY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Here on the
shores of Lake Cuomo in Italy, top of the agenda very much was China. The
risks around an economic slowdown we`re seeing in the country, but also the
policy makers` ability to contain some of the spillover effects, like the
volatility that we`ve seen in the equity market recently.

I spoke to one of the key advisers to the German Chancellor Angela
Merkel, and asked just how concerned he was about the spillover effect.

LARS FELO: I think it`s a much more important problem for the
Eurozone, because when you see this transformation off the Chinese economy,
liberalization is they`ll respect, to the extent that liberalization is
taking place, the Chinese government is losing control of the economy, and
then it`s going to be much more difficult to counteract the developments of
its economy.

CHATTERLY: The weakness in China also feeding into the commodity
prices globally, and having a further downward impact on oil prices. That
is having a detrimental impact on one of the biggest oil producers in the
world, Russia.

I caught up with the deputy prime minister of Russia and asked him
whether there was any possibility of Russia working with Saudi Arabia to
cut oil supplies and try and raise prices.

UNIDENTIFIED MALE: Russia, if oil prices are low enough for a long
period of time, supplies go down natural way, I think this is most
efficient stabilizer of the market.

CHATTERLY: For anyone hoping that the world`s two largest oil
producers, Saudi Arabia and Russia, may be able to come together,
coordinate on cutting supply in order to lift prices, look at this stage to
be sorely disappointed, at least for now.

We`ve also got the burgeoning migrant refugee crisis. The crucial
question is, can European leaders come together and form some type of
unified response to address this crisis. At least for now, the talks on a
solution will continue.

For NIGHTLY BUSINESS REPORT, I`m Julia Chatterly in Italy.

(END VIDEOTAPE)

HERERA: Coming up, reaching the next level. Meet the entrepreneur
who`s connecting aspiring athletes with coaches, and creating a successful
business in the process. It`s tonight`s “Bright Idea.”

(MUSIC)

HERERA: Here`s what to watch next week. The bond and stock markets
closed Monday for Labor Day. The producer price index is due out, a key
gauge of inflation. Apple (NASDAQ:AAPL) is expected to unveil new products
in an event on Wednesday. And that`s what`s up next week.

Some 40 million Americans under the age of 18 play some kind of
organized sport. And for many of them, their coaches will be among the
most influential people they`ll ever meet. And that`s why coaches love
coaching. But the business of coaching often involves a lot of extra work.
At least it did, until one young man from the Boston area got the bright
idea to simplify it.

(BEGIN VIDEOTAPE)

HERERA: Football is a team sport. But Shalik Billups (ph) is working
one on one with Coach (NYSE:COH) Kevon Watkins. It`s the kind of attention
Watkins says he never got when he played in high school, and while he was
in the U.S. Marine Corps.

UNIDENTIFIED MALE: Nothing like this was ever even thought of.

HERERA: Individual coaching is nothing new. Watkins has been doing
it for about ten years. But now he says finding customers, collecting
reviews, and maintaining his business is much simpler.

Thanks to a website, Coach (NYSE:COH) Up, the site vets and ranks
15,000 coaches in individual and team sports across the country.

Jordan Fliegel came up with the idea for the site back in 2011.

JORDAN FLIEGEL, COACH UP: If you want a tutor, if you want to improve
your SAT score, you get a tutor. In sports, they learn how to play the
sport, how to really learn it. We don`t do that in academics. We don`t do
it in anything else, why do we think it would work in sports?

HERERA: Fliegel`s sport was basketball. He never heard of working on
a team sport with an individual coach before he tried it during his high
school years.

FLIEGEL: It was at best mediocre high school player.

HERERA: Mediocre that is until a camp counselor Greg Christoph (ph)
helped Fliegel develop into a high school and small college star. He
played professionally in Israel for two years. But he said the coaching he
received didn`t just change his game, it changed his life.

FLIEGEL: That led to direct improvement for me academically. You
know, if I really applied myself, I can figure out anything. I can figure
out how to become a better athlete, I can figure out how to become a better
student. And I can learn to really write a paper. I can learn how to
build a startup.

HERERA: Fliegel began to do some coaching himself while he was in
college. Later, after a broken foot and business school ended his playing
days, he kept on coaching easing the transition into the next stage of his
life.

FLIEGEL: I created my own Web site. I paid a Web site designer to do
that, every time I wanted to update it I had to pay that designer to do it.
I wanted to collect reviews. I just wanted to work with kids and I wanted
the rest to care itself.

HERERA: Fliegel says Coach (NYSE:COH) Up provides a platform to deal
with the business of coaching, so coaches can focus on what they do best.

FLIEGEL: We provide insurance, we provide payment processing, we
provide customer support. I mean, for our coaches, we`re they`re marketing
department, their technology department, their personal assistant, web site
host, there`s no great solution from this. So, I decided to build it.

HERERA: Most of those services are outsourced from Coach (NYSE:COH)
Up`s Boston office, home to 30 full-time employees. The model has
attracted investment money from world champion athletes. Like Julian
Etleman of the NFL`s New England Patriots, and Steph Curry of the NBA`s
Golden State Warriors. Each has benefited from working with individual
coaches.

UNIDENTIFIED MALE: Bring it back, bring it back. There you go.

HERERA: For most players, though, the next level isn`t a world
championship. Billups is just hoping to make his high school team. But
with a little help from Coach (NYSE:COH) Watkins, he may have a better
chance to bring his “A” game to wherever he decides to go.

UNIDENTIFIED MALE: Push, push.

KEVON WATKINS, COACH: Everything we found on the football field can
apply to everyday life. The biggest thing for me is hard work. You know,
you have to work hard in order to make yourself better.

(END VIDEOTAPE)

HERERA: Fliegel says more than 200,000 young and old athletes have
found coaches on his site in the 3 1/2 years that it`s been up.

And that is NIGHTLY BUSINESS REPORT for tonight. I`m Sue Herera.
Thanks for watching. And be sure to join us Monday for a special Labor Day
edition of the program.

END

Nightly Business Report transcripts and video are available on-line post
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the views of Nightly Business Report, or CNBC, Inc. Information presented
on Nightly Business Report is not and should not be considered as
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