Transcript: Nightly Business Report- November 24, 2015

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

SUE HERERA, NIGHTLY BUSINESS REPORT ANCHOR: Rising tensions. Oil
prices rise, bond yields inch lower after Turkey shot down a Russian
fighter plane, keeping investors on edge.

TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR: Border business. The
companies and states trying to cash in on the growing trade between Mexico
and the U.S.

HERERA: Best fit for you, the right questions to ask when selecting a
brokerage firm so you don`t get hit with hidden costs.

All of that and more tonight on NIGHTLY BUSINESS REPORT for Tuesday,
November 24th.

MATHISEN: Good evening, everyone. Welcome.

Tensions are running high across the globe tonight. Early today,
Turkish jets shot down a Russian warplane near the Syrian border. That put
Moscow in direct conflict with a NATO member. Sending tremors through
multiple markets most notably oil. Crude spiked nearly 3 percent, its
biggest one-day gain in three weeks.

The rise in oil sent the energy sector higher and the stock market and
that helped lift the broader stock market after some initial wobbles. The
Dow Jones industrial average gained 19 points to finish at 17,812, the
NASDAQ added a fraction of a point and the S&P 500 tacked on 2 1/2.

But the heightened concerns also drove money into safe haven assets
like U.S. treasuries, which saw prices climb and yields dip.

Michelle Caruso-Cabrera has more on the incident and the consequences.

(BEGIN VIDEOTAPE)

MEG TIRRELL, NIGHTLY BUSINESS REPORT CORRESPONDENT: Turkey confirmed
it shot down the warplane this morning near the region of Latakia, claiming
it violated Turkish air space and violated repeated warnings, 10 of them
within the space of five minutes.

Russia denies that the plane crossed the Syrian border into Turkish
skies. Video footage of the incident shows a warplane on fire before
crashing on a hill, two crew members parachuting out.

A press release from a Syrian group said one of the pilots was killed,
the other captured. Russia later confirmed that.

This isn`t the first issue when it comes to Russia and Turkish air
space. Last month, Turkish jets shot down a Russian drone that it said had
violated Turkey`s air pace. Russian President Vladimir Putin said the
shooting down of the plane was a stab in the back and warned of significant
consequences in relations between the two countries.

The situation spooked the markets because it raised concerns that the
fierce battle in Syria and northern Iraq would widen to a much wider
conflict between Russia and a member of NATO. But in an emergency meeting,
NATO commanders urged member Turkey to show restraint to avoid escalating
the conflict. And both Presidents Hollande and Obama in a news conference
today said repeatedly they wanted to ensure this did not escalate into
something bigger.

President Obama also emphasized he thought this happened because
Russia isn`t fighting the Islamic State in Syria but instead using their
air strikes to support Syrian dictator Bashar al Assad.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This points to a
ongoing problem with the Russian operations in the sense that they are
operating very close to a Turkish border and they are going after moderate
opposition that are supported by not only Turkey but a wide range of
countries. And if Russia is directing its energies towards Daish and ISIL,
some of those conflicts or potentials for mistakes or escalation are less
likely to occur.

CARUSO-CABRERA: President Hollande also said when he meets with
Vladimir Putin on Thursday in Moscow, he will encourage him to change his
strategy and instead dedicate his airstrikes solely to battling the Islamic
State.

For NIGHTLY BUSINESS REPORT, Michelle Caruso-Cabrera.

(END VIDEOTAPE)

HERERA: Travel stocks fell today after the State Department issued a
worldwide travel alert. The reason: increased terror threats.

That pressured shares of companies like Priceline, Expedia
(NASDAQ:EXPE) and TripAdvisor. Airline stocks fell with Delta declining
the most. And shares of hotels and cruise lines also lower.

Hampton Pearson with details on the warning which came just days
before the holiday weekend.

(BEGIN VIDEOTAPE)

HAMPTON PEARSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: The terror
warnings from Homeland Security and the State Department are going out
during the busiest travel week of the year, with millions of Americans
traveling by planes, trains and automobiles during the holiday period.

The FBI and Homeland Security officials warning more than 18,000 local
law enforcement agencies to be prepared for extremist who`s could seek to
replicate the effects of the Paris attacks using similar weapons and
tactics on a smaller scale. Most major cities have seen beefed up security
since the November 13th Paris attack.

Now, the focus security experts say will be on so-called soft targets
likely to attract large crowds and so-called active shooter scenarios.

BOB LISCOUSKI, IMPLANT SCIENCES: Law enforcement have to be vigilant.
They have to be able to quickly respond to an active shooter scenario and
respond in a way that could be most effective to them. And that`s what
they`re asking local law enforcement to do.

PEARSON: Homeland Security says there is no evidence of an attack
here in the U.S., but officials offer no such assurances for what might
happen overseas now that ISIS has shown it can attack in the heart of
Europe. So, the State Department is telling Americans traveling worldwide
for the next 90 days to be extra vigilant.

MICHAEL BALBONI, REDLAND STRATEGIES: If you`re going to be traveling,
just maybe take an extra step and try to decide what`s going on in the
country. You know, know where you`re going. Just plan a little bit
better. I think it`s very important to not let the bad guys win.

UNIDENTIFIED MALE: Right.

BALBONI: Not let somebody across the world tell us be afraid.

PEARSON: That State Department alert is the first in nearly a year.
After a month of deadly terrorist attacks on three continents that have
killed hundreds of people, government officials are aware — there is
indeed anxiety across the country.

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

(END VIDEOTAPE)

MATHISEN: Let`s turn now to our guest for more context on the rising
tensions around the globe and how it will impact your travel and why the
market`s reaction remains relatively muted.

David Malpass is president of Encima Global, and Shawn Henry is
president of CrowdStrike Services, a security firm.

Welcome to both of you.

Shawn, let me start with you. This weekend, would you let your mother
or your son travel to Europe?

SHAWN HENRY, CROWDSTRIKE SERVICES: I actually do have family members
traveling to Europe and they asked my advice. I agree with other people
that I`ve seen talk about this pretty adamantly about not being fearful,
that credible threats are being addressed, that there is extra security,
there`s a lot of effort that`s going in to identifying, using intelligence
to look for these types of attacks.

And I think that it`s really critical that we not slow our lives down
completely. We`ve got to be aware and we`ve got to be alert certainly. We
don`t want to be naive and reticent, however, and it`s really critical that
we continue to move forward in a productive way but also in a way that
allows us to be safe. We need to be vigilant.

HERERA: And yet, David, we also now have very much increased tensions
between Russia and Turkey putting kind of a different slant on the
situation and the fight against terrorism.

DAVID MALPASS, ENCIMA GLOBAL: That`s right. We`ve got oddly, and
it`s a new problem, Russia right in the middle of both the NATO/Assad
battle going on. You know, NATO wants Assad to be gone. And then
separately, in the Shiite versus Sunni conflict.

So, Russia`s backing Iran, and Assad in Syria. And that`s putting a
lot of tension on the Gulf States because oil prices are down.

So, I think this is truly a dangerous situation. Add to that the
refugees, which Europe really hasn`t resolved. So I think this is going to
go on for a while and it does create a lot of pressure and tension. It
comes on the top of, on the economic side, what`s basically a profits
recession and a commodity recession. We`ve got new profits data out today
down 25 percent year over year for undistributed corporate profits. That`s
the money that corporations have to invest down 25 percent.

MATHISEN: It sounds, David, like you think the equity markets most
particularly are being naive or not paying enough attention to all of these
threats, whether they are terroristic in nature or economic in nature. If
you feel that way, why do you think that is?

MALPASS: Well, I think we`ve gotten complacent. We`ve been in a
seven-year bull market and I`m not a permabear. I`m not exactly bearish.
I think we`ve got three things coming together right now that are
problematic. Equity markets should be paying more attention. Profits,
commodities and the huge tension right there in Syria that we saw this
morning.

HERERA: Shawn, let me turn back to you if I could because this
worldwide travel alert, that doesn`t get issued very often by the U.S.
government. It`s a relatively rare occurrence on a worldwide basis anyway.
So, that I think has people quite nervous about what`s going to happen over
this long holiday weekend.

And you have Black Friday and you have Thanksgiving parades and things
along those lines. How do you feel about the security forces here in the
United States and their ability to enforce and protect at those big events?

HENRY: Yes, I feel very comfortable with security here in the United
States. I spent 24 years in the FBI. So I`ve worked very, very closely
with the intelligence services. I`ve worked globally with law enforcement
and intelligence agencies and certainly domestically here with state and
local law enforcement and the FBI, the joint terrorism task forces.

These organizations while this is big in the news right now,
rightfully so, what happened in Paris was a tragedy, and it`s something we
need to be very concerned about, law enforcement has been dealing with
these threats for years and they continue to deal with these on a regular
basis. Even things that the general public doesn`t hear about, law
enforcement, the FBI are working on 24/7, 365 days a year.

So, I`m very —

HERERA: Shawn, if I — I don`t mean to interrupt, but is it different
this time though because you seem to have ISIS, you seem to have al Qaeda,
and you seem to have Boko Haram all competing for the headlines here?

HENRY: It is. It is, Sue. And it`s different because we`ve seen the
tactics and techniques of the adversaries change. We haven`t seen these
types of attacks like in Paris. Multiple attacks, simultaneous shooters,
very well-coordinated, tactical, long guns, suicide belts against soft
targets. It`s changed.

But what the law enforcement community is doing, the FBI and the
intelligence agencies, they are currently working collaboratively with
Western partners, they`re collecting intelligence. They are working to
disrupt ongoing planning. They`re working to disrupt people who they know
might be associated with the jihadi cause, not necessarily tied directly to
ISIS —

MATHISEN: Right.

HENRY: — but people who might be inspired, copycat.

MATHISEN: David, I want to get a quick answer from you, if I might.
What should I do with my money in the face of the triple threat of risks
that you see?

MALPASS: Hi, Tyler. Well, we`ve been in this, “there`s nothing else
but equities” phase. I think right now, caution meaning lightning up some
on equities, being a little heavier on bonds, waiting to see how this
shakes out in terms of the global slowdown that`s under way. I`m worried
about the refugee — I don`t think the previous speaker was taking full
enough account of the hundreds of thousands of refugees that are on the
move right now this winter.

MATHISEN: An extremely difficult problem to solve there.

David Malpass with Encima Global, and Shawn Henry, we appreciate your
time tonight, gentlemen.

HERERA: Still ahead on the program, one of the biggest growth
opportunities for the transportation sector may not be where you think.
That story coming up.

The economy grew more rapidly over the summer than previously thought.
Gross domestic product, the broadest measure of goods and services produced
expanded at a seasonally adjusted annual rate of 2.1 percent in the third
quarter. Better than the first estimate of 1 1/2 percent.

Business investment was stronger and stockpiles rose. But a key
measure of corporate profits within that report fell during that period.

MATHISEN: Well, despite that increase in growth, Americans have lost
confidence in the economy and it`s because of the job market. According to
the conference board`s latest survey, fewer people expect more jobs to be
created in the coming months. They also don`t expect their incomes to
rise.

The decline in confidence comes as a bit of a surprise since employees
did add more than 270,000 jobs in October.

HERERA: Home prices rose more than expected in September. The S&P
Case Shiller home price index reports a nearly 5 percent increase over last
year. In San Francisco, home prices rose at the fastest pace, up 11
percent, followed by Denver and Portland, Oregon.

Last night, we told you that existing home sales in October fell as
rising prices increasing mortgage rates and a lack of supply kept some
buyers out of the market.

MATHISEN: Trade, of course, is a critical part of the U.S. economy
and trade between the U.S. and Mexico is growing with about $1.5 billion
worth of goods moving across the border every single day. And that`s
creating some huge opportunities for companies that haul all those goods.

Morgan Brennan reports from Santa Teresa, New Mexico.

(BEGIN VIDEOTAPE)

MORGAN BRENNAN, NIGHTLY BUSINESS REPORT CORRESPONDENT: This is Union
Pacific`s $400 million Santa Teresa facility. A huge rail hub right near
the border, as the company looks to capitalize on increased trade with
Mexico.

SCOTT MOORE: The intermodal yard that we run, it won`t replace it.
It basically doubled the size of the yard, 200,000 lifts annually we can
do. And it can grow to 700,000.

BRENNAN: That`s quite a number.

MOORE: Yes, hopefully, the business grows like that.

BRENNAN: Trade between the U.S. and Mexico totals $530 billion a
year. A 550 percent over the past two decades since NAFTA was signed. And
with costs rising in Asia, Mexico has become a manufacturing destination of
choice for makers of autos, aero space, appliances, even computers.

FRANCISCO URANGA: That operation is primarily dedicated for the BTO
model, built to order model for computers, for Dell (NASDAQ:DELL) and HP.
It is the largest of its kind in the world of any company.

BRENNAN: That means more freight moving across the border and
transportation companies like Union Pacific (NYSE:UNP) are cashing in.

BERNARDO AYALA, UNION PACIFIC: From a Union Pacific (NYSE:UNP)
standpoint it represents 10 percent of the company`s total revenue. So,
it`s big, it`s growing. Good growth opportunities.

BRENNAN: It`s a two-fold opportunity for transports as raw materials
and products come into Mexico from the U.S. and Asia are assembled and
shipped back north even this locomotive.

And it will only get bigger as consumers spend more and new
initiatives including the U.S. exportation of oil to Mexico come online. A
number of companies see dollar signs. Kansas City Southern (NYSE:SO)
(NYSE:KSU) and Berkshire Hathaway`s BNSF Railway has been expanding their
operations tied to the border. And Ryder System (NYSE:R), XPO Logistics
and Werner Enterprises (NASDAQ:WERN) all say cross border business
continues to be one of their fastest growing segments.

DEREK LEATHERS, WERNER ENTERPRISES: It`s a big part of our business.
Mexico is 20 percent of revenue as it relates to our one-way trucking
operations. It`s 14 percent of total revenues. It`s something we see
getting bigger and bigger over time. We`re bullish on it.

BRENNAN: And it isn`t just companies doubling down. States have
become more aggressive about capturing trade through their border
crossings, as well. Until now, New Mexico has largely neighbors with the
most and biggest crossings in Texas followed by California and Arizona.

But the state has taken dramatic steps to change that and Santa Teresa
is now the 9th busiest freight border crossing in the country.

JON BARELA, NEW MEXICO`S SECRETARY OF ECONOMIC DEVELOPMENT: Governor
Martinez`s vision and certainly the vision of our department is to make New
Mexico the gateway of trade for the Americas.

BRENNAN: And it`s just part one, as a fast track customs program for
freight is in the process of rolling out and the state and its Mexican
counterpart Chihuahua are working to develop a bi-national city that would
share resources and potentially dissolve the border all together.

For NIGHTLY BUSINESS REPORT, I`m Morgan Brennan in Santa Teresa, New
Mexico.

(END VIDEOTAPE)

HERERA: Hewlett-Packard`s last report as one public firm disappoints.
And that`s where we begin tonight`s “Market Focus”.

The company which recently split into the two missed the street`s
earnings and revenue estimates. Lower PC sales and a slump in demand from
businesses weighed on the firm`s quarterlies. After the close, shares of
HP initially slipped. The shares of HP Enterprises were initially higher.

Tiffany`s saw its sales slip in the third quarter which it blamed on
the strong dollar and lower tourist spending. The retailer gave a full
year profit forecast below the street`s consensus. Despite that, shares up
more than 3.5 percent to $79.36.

And Hormel reported mixed quarterlies. They gave a bright outlook for
the next year as profits rose helped by Spam, of course, and Muscle Milk
brands among others.

The chief operating officer says acquisitions helped the company`s
results.

(BEGIN VIDEO CLIP)

JIM SNEE, HORMEL COO: We have to continue to grow the brands that we
have, and we`ll certainly continue to be on the lookout for companies and
brands that meet our strategic fit for us. Those are the things that are
really going to allow us to have record quarters.

(END VIDEO CLIP)

HERERA: Shares were almost 3 percent higher to $71.28.

Dollar Tree`s third quarter profit missed estimates as the company was
hurt by expenses related to its acquisition of family dollar. Still, the
company`s top line results beat estimates and same store sales increased.
Shares rose more than 6.5 percent to $74.16.

MATHISEN: Campbell`s Soup reported earnings that topped estimates and
hiked its full year profit forecast. Cost cutting measures have helped the
food company deliver some chunky results. Shares rose 3 percent to — I
couldn`t resist — $51.33.

Cracker Barrel, my wife`s favorite restaurant, also benefitted from a
decrease in expenses. Love those rocking chairs. Earnings were better
than expected, but sales were disappointing, which the company blamed on a
challenged consumer. The appetite for sausage biscuits just not bottom
less as they thought. Shares down more than 6 percent to $129.93.

And the Centers for Disease Control says nearly 20 people have been
infected with E. coli after eating chicken salad from Costco (NASDAQ:COST).
Five people have been hospitalized, too, have developed a type of kidney
failure, but there have been no deaths reported yet. Most of the
infections reported from the western United States. Costco (NASDAQ:COST)
off slightly today, $162.19 the close.

HERERA: More than four in ten U.S. investors cite low fees and
commissions as the primary reason for selecting a brokerage firm. That`s
according to a new Fidelity survey. But is that the right way to vet a
brokerage firm?

Sharon Epperson is back with us for more on that.

So, Sharon, what should investors be looking out for?

SHARON EPPERSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: Well, of
course, everyone looks at the account minimum, can I meet that? Are the
commissions the lowest out there?

But, really, they need to be looking at the fees that are charged for
trading stocks and bonds and there may be some fees particularly you don`t
think about bond pricing necessarily when you`re looking at brokerage
firms. A lot of people looking at how they can do the best stock trades
and there maybe a markup with some brokers. So, you want to see if there
is a markup fee. It could be as much as $13 per bond.

So, this is what the Fidelity survey found. So, you want to make sure
you know if they have one and how much that might be.

MATHISEN: I would assume you would want to look at the kind of
investor you are. How much do I trade, what do I trade and what are the
charges on the kinds of transactions that I do?

EPPERSON: That`s absolutely right. That`s particularly important
also when you`re looking at stock trades, as well and looking at price
improvement which is basically when you place an order button, you want to
make sure that the price you`re getting is actually an improvement perhaps
than what you`re seeing there and many of these brokers will tell you how
much they can give you in terms of price improvement. That can also save
you money down the road.

HERERA: So, you mentioned some of the components. There`s also how
much hand holding do you need.

EPPERSON: Exactly.

HERERA: I would assume education seminars, things that you can
attend.

EPPERSON: When you`re trying to evaluate a broker, one of the things
you really want to look for, something Tyler mentioned at the beginning, is
how do you want to use that broker and what type of investment professional
and firm is that? And look at FINRA for some research and some guidance
there, finra.org, because do the broker check and check them out?

But you also want to find out not only about commission and fees, not
only about price improvement but what kind of education and research do
they offer and all kind of asset plans. This is your money. You want to
be able to make informed decisions yourself.

And then how can you reach out to these folks? Can you call them?
Can you e-mail them? Can you go in person to get your questions answered?
Because the way you like to interact with your broker is also very
important in helping you to make the right decision.

HERERA: Absolutely.

MATHISEN: Give me a human being every time. I want to talk to a
human —

EPPERSON: Yes, I have a lot of questions.

MATHISEN: I don`t want an FAQ.

EPPERSON: And, you know, it`s interesting because we do this. We
should know. We want to talk to a human being. So, it`s up to you, guys.
That`s what we say, right?

MATHISEN: Sharon, thanks.

HERERA: Thanks, Sharon.

MATHISEN: Coming up, the power shift taking place in retail and the
companies that are trying to capitalize on it.

(MUSIC)

HERERA: Here`s what to watch for tomorrow. Loads of data including
reports on durable goods orders, personal income and spending is out. And
a read on housing with new home sales. And that is what to watch for on
Wednesday.

MATHISEN: Investigation into Wal-Mart`s operations in Brazil finds
possible misconduct including potential foreign bribery. “The Wall Street
Journal” reports that federal authorities are looking into $500,000 in
payments to an individual hired to obtain government permits.
Investigators also want to know whether senior Wal-Mart (NYSE:WMT)
employees approved those payments. Shares were little changed in initial
after-hours trading on that report.

HERERA: German prosecutors have launched an investigation into
suspected tax evasion at Volkswagen. It`s related to the automaker`s
emissions cheating scandal and it centers on the fact the 800,000 cars
understated carbon dioxide emissions leading to lower vehicle tax rates.
Prosecutor`s office says it is investigating five employees.

MATHISEN: Everybody loves a bargain. That`s why many traditional
department stores are opening up off price chains where designer goods are
sold at a discount. And with the overall retail sector struggling, it is
one area that many companies hope to find growth.

Courtney Reagan has our story tonight.

(BEGIN VIDEOTAPE)

COURTNEY REAGAN, NIGHTLY BUSINESS REPORT CORRESPONDENT: It`s no
secret that some retailers are struggling. But there is one area where
sales continue to grow. At off price stores like T.J.Maxx and Ross Stores
(NASDAQ:ROST) and at outlets. At this type of retailers, promotions are
already built into prices and the merchandise is either overstock from a
traditional store or it`s made by the same designers but specifically for
the off-price or outlet store. And shoppers love the thrill of those
deals.

UNIDENTIFIED FEMALE: Department store may be overpriced. Smaller
stores definitely better deal.

UNIDENTIFIED FEMALE: Do you like to get the best deal for the best
item.

UNIDENTIFIED FEMALE: Things go out of style so quickly. Then you
spend a lot of money perhaps on something and you don`t wear it next year
or you don`t like the way it looks.

REAGAN: Higher end department stores are building up their own off
price offerings as fast as possible to capture share. Saks (NYSE:SKS) has
doubled the off print it had several years ago with plans to open two
Manhattan locations by 2017.

Bloomingdale`s just opened its first urban outlet in the Manhattan,
its 14th outlet store. Nordstrom (NYSE:JWN) plans to nearly double its
rack store locations by the year 2020. A much faster growth rate than its
plans for expanding the traditional store footprint.

Lord & Taylor is getting in the off-price game, too. This is fine at
Lord & Taylor, the first of a total of six stores that will hope by the end
of 2016.

And mid-tier department stores are getting in, too. Kohl`s is
piloting its own off price concept.

While sales at Macy`s traditional stores have been disappointing the
last two quarters, the retailer is quickly expanding its new off stage
backstage store expansion. The first four opened this fall with 53 more
scheduled to open over the next two years.

OLIVER CHEN: I think it will benefit Macy`s (NYSE:M) in the long run
because as they look at their data and as we look across the landscape of
retail, it`s a really important sector. Off price remains very attractive
to consumers. So, we expect it to be a growing sector.

REAGAN: While the off price and outlet phase is a big growth sector
now, some question if there`s enough demand to go around for the new
players looking to capitalize and whether or not it will cannibalize sales
at the retailer traditional stores.

For NIGHTLY BUSINESS REPORT, I`m Courtney Reagan in Paramus, New
Jersey.

(END VIDEOTAPE)

HERERA: Blue Origin, the private space company that is backed by
Amazon (NASDAQ:AMZN) CEO Jeff Bezos made space history. The company says
it successfully landed a reusable rocket back on to earth after an unmanned
flight to the edge of space. The firm`s New Shepard space vehicle flew a
suborbital test mission to more than 300,000 feet, reaching nearly four
times the speed of sound. Bezos says commercial suborbital flights
carrying paying passengers could be less than two years away.

Not me.

MATHISEN: Not me.

HERERA: Not me.

We`ll be reporting on that.

MATHISEN: Yes.

HERERA: That does it for us. For NIGHTLY BUSINESS REPORT, I`m Sue
Herera. Thanks for joining us.

MATHISEN: And thanks from me, as well. I`m Tyler Mathisen. Have a
great evening, everybody. We`ll see you tomorrow on Thanksgiving Eve.

END

Nightly Business Report transcripts and video are available on-line post
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Transcriptions, LLC. Updates may be posted at a later date. The views of
our guests and commentators are their own and do not necessarily represent
the views of Nightly Business Report, or CNBC, Inc. Information presented
on Nightly Business Report is not and should not be considered as
investment advice. (c) 2015 CNBC, Inc.

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