Transcript: Nightly Business Report – March 22, 2016

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

today`s terror attacks in Brussels threaten the European Union and the global economy.

government is doing to keep key transportation hub here safe.

MATHISEN:  And thanks anyway.  The FBI may have found a way into the iPhone
used by one of the San Bernardino terrorist, halting for now its months-
long fight with Apple (NASDAQ:AAPL).

All that and more tonight on NIGHTLY BUSINESS REPORT for Tuesday, March

HERERA:  Good evening, everyone, and welcome.

Brussels, Belgium, it`s the de facto capital of the European Union.  It is
where NATO is headquartered, it is where companies like Amazon
(NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) and Google`s parent company
Alphabet are increasing their presence.

And today, it`s where explosions hit.  The Islamic State claimed
responsibility for the bombings at the country`s main airport and a subway
station that killed more than 30 and resulted in scores of injuries.  This
is the fourth attack in Europe in four months.  Security had been
heightened across the continent.  Travels and transportation, a key pillar
of modern economies, disrupted.

And all of this comes as the European economy struggles to recover and
continues to feel the pressure caused by the migrant crisis.

Hadley Gamble joins us now from Brussels.

Good evening, Hadley.  What`s the latest?

So, right now, Brussels is a city that is subdued.  It`s a city that is
questioning the leadership not just in Brussels itself but also, of course,
Belgium and the European Union.

Basically, what we saw earlier today was some serious, coordinated attacks.
We understand that right now, Belgium police are searching for a man they
believe are connected with the attack.  It left as many as 30 people dead
and hundreds wounded.

Earlier today, of course, we understand that he was caught, his image was
caught on CCTV just moments before the first two explosions at Brussels
International Airport.  And the Belgium police are asking for anyone to
come forward with his whereabouts and possible identity.

And, of course, right now, behind me as you can see, we`re just steps away
from the Maalbeek metro station, the area where the third explosion took
place later in the morning and that area is still cordoned off.  It`s just
down the street from the center of European politics, the European
parliament and European council buildings, with the ministers go to
meetings every single day.  So, this is really striking at the very heart
of Europe.

MATHISEN:  Hadley, are raids ongoing so far as you can tell and I gather
there are some complications having to do with Belgium law about whether or
not raids can be prosecuted after certain hours of the day.

GAMBLE:  That`s right, Tyler.  As you can see behind me, this is a city
that`s almost asleep as well as being subdued.  You have to remember, of
course, that this is Europe.  This is a place where hours are strictly
adhered to and also jurisdictions as well.  So, these we know the raids are
ongoing.  Whether or not they prosecution will follow and it`s a bigger

Of course, the other question for the Belgian prime minister.  Many people
being critical asking what`s happening next.  He`s come out with some
strong statements.  He tweeted this country that`s going to defend its
values, that they`re not going to be subject to these barbaric attacks.

But at the same point, many people now are questioning whether or not the
leadership here at the heart of Europe is really ready to take this threat

HERERA:  Now, Hadley, I know that in the late afternoon, one of those raids
produced yet another explosive device and some chemicals, leading some to
speculate that perhaps other incidents were planned.  Do we have any
clarity on that yet?

GAMBLE:  There hasn`t been much clarity on that so far, Sue.  But we do
understand, of course, that this is not on something that was beyond the
pail.  Belgium officials even over the weekend, after they were able to
secure the third brother, they were involved in the Paris attacks.  They
said the Belgian prime minister himself saying that another attack was
probable.  I think that this just really does speak to the level of
insecurity services not just here in Belgium but also across Europe and the
United States that really don`t know what`s going to happen next.

MATHISEN:  Hadley, let me ask you a little bit about the fact that in
Brussels and in Belgium there`s lots of different jurisdictions and there
has been some criticism about how well or not well they communicate on
police operations and share intelligence.  What can you tell us?

GAMBLE:  That`s correct.  You have to remember, of course, this is a
country that as we say is at the heart of the European Union.  And as such,
this is a country that speak several different languages.  They`re speaking
English.  They`re speaking French.  They`re speaking Flemish.

And, of course, many of the folks that they`re trying to infiltrate their
cells, especially those that they believe have ties to the Islamic State.
They`re speaking Arabic.  So, not only do you have different jurisdictions
but you also have so many different languages, barriers to communication
and certainly to intelligence sharing as well.

HERERA:  All right.  Hadley, thank you so much.  Hadley Gamble for us live
in Brussels.


MATHISEN:  Today`s terror attacks reverberated across Europe and shook the
foundations of the European Union.  The assaults came just weeks ahead of a
vote in Britain on whether the U.K. will remain in the E.U.

Here to discuss the stakes and the global impacts of today`s violence is
David Malpass, president and founder of his own economic research firm
Encima Global.

David, always great to see you.

I want to make distinctions between the E.U. on the one hand, and the
currency, the common currency, the euro on the other.  Let`s talk about the
European Union.  Does this weaken or temporarily strengthen the European

think at first people pull together and try to make some sense out of it
and make some direction out of it.  But that overtime, the country are
being forced more and more to look out for themselves.  You know, they have
to act in their own self-interest.

So, I think this is part of the European Union`s decline.  Not necessarily
the euro`s but the European Union.  It`s a trade union where they`re
supposed to have open borders and allow investment and trade to flow among
them.  And that becomes very difficult in this kind of situation.

HERERA:  So, David, does it heighten the odd that the June vote in Britain
about whether to stay part of the union or not sides with those who want to
exit the E.U.?

MALPASS:  I think it makes it hard to win that vote to stay in the European
Union.  So, Britain is going to vote yes or no, and the problem is this
kind of attack focuses the British opinion on the risk of Brussels, the
expense of Brussels.  You know, the U.K. has been subsidizing to an extent
the European Union, and it also focuses on the bureaucratic nature of

That previous report discussed how hard it is for Europe to operate among
itself.  If you`re sitting in Britain, you say we`d be better off without
that.  I`m worried that that`s what`s going to happen.

MATHISEN:  Are these attacks as you sit and look at them, an attack on the
European Union per se?  In other words, the people who claim responsibility
for this say this attack was in retribution for Belgium`s support of and
participation in raids that targeted ISIS in the Middle East in Syria and
so forth.  France the same thing.  Attack us, we`re going to attack you.
Stay out, and we won`t bother you — as would be the case in countries that
have not participated in that.

MALPASS:  Well, I think that`s the hope of radical Islam.  That`s one of
the war techniques to scare the opponent into inaction, and so, certainly
they`re hope in Europe is the countries will freeze and respond that way.
You know, Europe is in a weak position for this because they haven`t had
much of a defense budget.  And they also don`t have unity on what to do
about the refugee inflow.

This is a giant human catastrophe of the flow of refugees that want to come
in to Europe and the expense of it.  So, Europe has got multiple problems
to deal with.  What`s the right thing to do and how do you pay for it?

HERERA:  And, quickly, David, what about doing business in Europe.  This is
the fourth attack in four months.  They were not small attacks, by any
means.  Does it deter U.S. companies or other companies from around the
world from doing business in Europe?  What`s the economic global impact?

MALPASS:  It does deter.  You know, world growth has been so weak that you
may not notice the deterioration.  So, the bigger issue is in the long run,
over the next 10, 20 years, there won`t be enough investment.  And I`m
worried at some point, the euro itself might come under attack, which would
be a catastrophe for the world if it began breaking up.

MATHISEN:  You just answered my last question, which is going to be quick
on the Europe.  So, you think it puts pressure on it.  Very quickly, do you
think it will ultimately survive or not?

MALPASS:  You know, it depends on leadership.  They`ve got to make a choice
of how to defend it.  The reason it`s so dangerous is debt is denominated
in euro.  If you begin to devalue, then the whole thing unravels.  I think
it they`re protected as long as they can, the euro.

MATHISEN:  That kind of unraveling will be a real mess, as you point out.

David Malpass with Encima Global, thanks.

MALPASS:  Thank you both.

HERERA:  President Obama condemned the bombings in Brussels.  Speaking in
Cuba, the president urged international unity in the fight against terror.


of the American people are with the people of Belgium, we stand in
solidarity with them in condemning these outrageous attacks against
innocent people.

We will do whatever is necessary to support our friend and ally Belgium in
bringing to justice those who are responsible.


HERERA:  President Obama called the Belgium prime minister to offer his
condolences and support, saying the U.S. would stand alongside the E.U. and
NATO in defeating terrorism.

MATHISEN:  On Wall Street, the trading action today was muted, shaking off
somewhat the news out of Brussels.  Stocks opened slightly lower and
climbed to break even midday.  And they ended mix.

At the close, the Dow Jones Industrials fell 41 to 17,582, snapping its
seven day advance.  The NASDAQ was up 12.  The S&P 500 down nearly two.

Investors did buy up safe haven assets such as gold, which saw prices rise
in the wake of those terror attacks.  And today, one group of stocks
garnered particular interest.

Bob Pisani reports from the floor of the New York Stock Exchange.


have again focused attention on airlines and travel stock.  Airlines stocks
in Europe and U.S. were down roughly 2 percent as were cruise lines like
Royal Caribbean and travel sites like Priceline.

But the truth is that so far, terror attacks have had only a limited short
term effect on the global equity markets.  Stocks tend to dip and rise a
few days later.  Some stocks like the company that runs the Paris airport
took a bit longer to recover, but overall, even airline stocks quickly went
back to performing roughly inline with the overall market.

Now, airline and travel stocks did underperform in January and February but
they underperformed because of concerns about a recession slowing down
travel, not on terrorist concerns.

For NIGHTLY BUSINESS REPORT, I`m Bob Pisani, at the New York Stock


HERERA:  A flight from Brussels that took off just minutes before the
attack inside the airport landed safely in Orlando.  According to local
news reports, there was no announcement on the flight about the attacks and
the passengers did not have Wi-Fi.  They were told of the bombing when a
caravan of law enforcement officials met them on the tarmac.

The Orlando airport wasn`t the only one to increase security measures.
Airports across the country were on heightened alert.

Mary Thompson reports tonight from Newark International Airport in Newark,
New Jersey.


familiar pattern, terror strikes abroad and in U.S. cities like New York,
officials prep for the worst.

MAYOR BILL DE BLASIO (D), NEW YORK:  Expect to see extraordinary NYPD
presence out over the coming days as a sign of our readiness to protect
people at all times.

THOMPSON:  At Newark Liberty Airport, stepped up security very visible
following the attacks in Brussels.  The travelers showed little concern
about a similar attack at home.

UNIDENTIFIED MALE:  I thought there might be more delays in security, but I
feel pretty safe.

UNIDENTIFIED FEMALE:  I`m a seasoned traveler.  So, you have to do what you
have to do, yes.  So, I`ll be OK.

THOMPSON:  United Airlines and Delta rerouting flights to Belgium, where
FlightAware says 400 of them in and out of the Brussels airport were
cancelled Tuesday.  Travelers saying while the attacks won`t impact their
domestic travel plan, they would if they were traveling abroad.

UNIDENTIFIED FEMALE:  I wouldn`t want to put myself in that position too

UNIDENTIFIED MALE:  I wouldn`t go to countries that are apparently having

THOMPSON:  For travelers in trouble, American Airlines offering refunds if
their planes were impacted.  Meanwhile, hotel operator Marriott offering to
waive cancellation fees for their four properties in Brussels.

Businesses and travelers becoming too familiar with making quick
adjustments to terrible circumstances.

At Newark Liberty Airport in Newark, New Jersey, I`m Mary Thompson for


MATHISEN:  Following today`s attacks, a number of U.S. wireless carriers
waived their fees for calls and texts to and from Belgium.  AT&T (NYSE:T),
Verizon (NYSE:VZ), T-Mobile, Sprint all offering free service for those
trying to communicate with friends and family in that country.  Separately,
Facebook (NASDAQ:FB) activated the safety check for users located in
Brussels.  The safety check automatically sends your status to friends in
the form of a notification that you are safe.

HERERA:  A court hearing between apple and FBI wads cancel today after the
government revealed that a third party hacker may be unable to unlock the
encrypted iPhone used by one of the terrorists in the San Bernardino terror
attack, which could also ultimately eliminate Apple (NASDAQ:AAPL) from
creating a backdoor entry.

Are we relieved or not that the government has found another way?

Joining us to talk about that and get his take is Paul Viollis, CEO of his
own security firm, Viollis International.

Paul, welcome.  Nice to have you here.


HERERA:  If this is indeed the case, if there`s a third party, what`s your
reaction to that development?

VIOLLIS:  Well, I have to tell you, Sue, if in fact this is correct, and
they have found someone that can help them unlock the key to get
intelligence out of that phone, then, you know, I`m delighted about that.
I think that`s fantastic.


VIOLLIS:  Well, because we need the information, Tyler.  At the end of the
day, this is not — this is why this is such a unique situation, because
this is not an example of the FBI looking to have an intelligence gathering
exercise.  This is part of a criminal investigation post a terrorist attack
with 14 people killed on American soil.

So, in order for us to get information from this phone, if it`s a third
party, whoever it is, it`s critical for us to have that information so we
know who was involved in the attack and also if other attacks were being

HERERA:  Does the incident today in Brussels and the arrest on Friday of
one of the terror suspects in Paris, who reportedly used encrypted messages
to communicate with a cell, does it strengthen the argument that Silicon
Valley needs to cooperate more with law enforcement authorities?

VIOLLIS:  It really does.  But also, I think we have to be prudent here,
you know?  This isn`t a full court press against Apple (NASDAQ:AAPL) or
against, you know, corporate America, because we live in a capitalistic
society, we expect people to be able to be able to do well and to profit.
But there has to a level of measurement and balance.

And part of the problem here, when we talk about encryption is, yes, we
want people to feel that their communications are safe and private.  But by
the same token, we have to lay that line in the sand, Sue, so that we
clearly understand that in cases like this, levels of encryption are fine
on the privacy side, but nothing will ever supersede us keeping people at
home, end of story.

MATHISEN:  Let`s say, Paul, that the Justice Department succeeds breaking
into this phone or developing some sort of key that enables it to get into
other similarly encrypted phones, aren`t we going to sooner or later find
ourselves back in exactly this situation because isn`t Apple (NASDAQ:AAPL)
then going to respond by a new and more difficult to break form of

VIOLLIS:  Absolutely, Tyler.  You`re 100 percent on point.

Let`s look at this, right?  Apple (NASDAQ:AAPL) has some of the most
brilliant minds in the world.  They have over 100,000 employees.  So, if,
in fact, this comes to fruition and the FBI has a source that can get into
this particular phone, and you can bet that Apple (NASDAQ:AAPL) will find a
way to add different encryption and different key going forward.  There`s
no question about that.

HERERA:  Paul, thank you very much for your perspective.  We appreciate it.

VIOLLIS:  Always a pleasure.  Thank you.

HERERA:  Paul Viollis with Viollis International.


MATHISEN:  And shares ahead — still ahead, shares of Nike (NYSE:NKE) have
been on a long run.  So what tripped them up in the most recent quarter?
We`ll take a look after this.


HERERA:  A revenue miss for Dow component Nike (NYSE:NKE).  The world`s
largest active wear maker said a strong dollar hurt sales in Europe and
emerging markets like Brazil and Mexico.  The company reported earnings of
55 cents per share.  That was better than the estimate of 48 cents.
Revenue of a little bit of more than $8 billion was weaker than expected,
but 7 percent better than a year ago.  Investors weren`t all that happy
with that revenue number pressuring shares initially after the report.

Sara Eisen takes a closer look at Nike`s quarterly result.


for Nike (NYSE:NKE).  Profit came in much better than expected, but it was
the overall sales number that came in light.

Two weak spots: China coming in a bit less than analysts were expecting and
Western Europe as well.  And the common theme could be the stronger U.S.
dollar chipping away at Nike (NYSE:NKE) sales.

Nike (NYSE:NKE) says sales grew 8 percent from a year ago but that number
would have been 14 percent higher if you take out how much the sales were
dinged by the stronger U.S. dollar.

As far as the outlook ahead, Nike`s particularly bullish about its
prospects in China.  Nike (NYSE:NKE) gave future orders to investors a look
forward a few months for the lead-in to the suffer Olympics.  It says that
in China, those orders are set to grow 36 percent.

Keep in mind, Nike (NYSE:NKE) has been a high flying stock outperforming
the S&P 500 this year and over the last 12 months.  So, it was priced for a
good quarter.  That miss on sales could have an impact on the stock.



MATHISEN:  A warm winter drags down sales for G3 apparel, and that is where
we begin tonight`s “Market Focus”.

The seller of brands such as Calvin Klein and Levi`s saw its shares tumble
after it reported quarterly profit and revenue analyst targets.  The CEO
said lower sales in outer wear drove those weak results.  Now, the company
plans to reduce its outer wear offerings next year.  G3 also issued
guidance for the year.  It came in below expectations and, as you might
expect, shares of G3 fell sharply, more than 19 percent to $44.52.

Shares of Acorn surged today after the drug maker posted its 2015 results
and 2016 guidance.  Last year, the company said it would restate its 2014
financials after it identified accounting errors.  The company plans to
file the report with Securities and Exchange Commission by May.  Shares
surged more than 40 percent to $26.32.

And the securities software company Symantec (NASDAQ:SYMC) initiated its $1
billion accelerated share buyback program.  The program part of the
company`s $5.5 billion capital return plan.  Symantec (NASDAQ:SYMC),
though, down fractionally to $18.82.

And Lumber Liquidators paid the California Air Resources Board $2.5 million
in an agreement to settle allegations that the flooring company`s products
contained formaldehyde above permitted levels.  Under the agreement, the
company will also practice certain compliance procedures to ensure its
products meet the regulators` requirements.  Shares soared 16 percent to

HERERA:  General Electric (NYSE:GE) is exploring potential business
opportunities in Cuba.  The company has signed memorandums of understanding
with the Cuban government, expressing interest in one day selling aviation,
medical and power products in that country.  Shares of General Electric
(NYSE:GE) fell fractionally to $31.06.

Beginning in May, Carnival (NYSE:CCL) will offer cruises from the U.S. to
Cuba, making it the first U.S. cruise company to provide travel between the
two companies.  The Carnival (NYSE:CCL) CEO said there`s huge demand for
U.S. travelers to see the Caribbean country, and the company will offer
cruises every other week.  Shares fell 2 percent to $48.75.

Discount chain Five Below topped both earnings and sales estimate for its
latest quarter and saw a more than 3 percent rise in comparable store
sales.  However, the company issued weaker than expected outlook for the
year.  Shares initially fell in afterhours trading.  The stocks ending the
regular session down more than 1 percent to $38.89.

MATHISEN:  The Supreme Court today sided with thousands of workers at Tyson
Food, as we reported earlier.  The employees sought to recover overtime
pay.  Tyson Foods (NYSE:TSN) challenged the nearly $6 million class action
judgment.  But in a 6-2 vote, the 2014 decision was upheld.

HERERA:  The FDA says it is requiring new, stronger warnings about the risk
of addiction, abuse and overdose for short acting opioid pain medications.
That decision is seen as a step toward addressing and curbing the epidemic
of narcotic use in the U.S.  The FDA commissioner called opioid addiction
one of the most devastating crises facing our nation today.

Coming up, Tax Day is just a few weeks away, I`m sorry to say.  Tonight,
some tips on how to avoid the one thing no one wants, an audit.


MATHISEN:  Silicon Valley has lost an icon.  Former Intel (NASDAQ:INTC) CEO
Andy Grove passed away at 79, considered a central figure in the era of
modern computing.  He was instrumental in building Intel (NASDAQ:INTC) into
the world`s largest chip company.  Grove was CEO of Intel (NASDAQ:INTC)
from 1987 to 1998.  He served as chairman until 2005 and was “Time`s” Man
of the Year in 1997.

HERERA:  A sobering study on retirement.  Only about 20 percent of the
Americans are very confident in their financial future.  According to the
latest annual survey conducted by the employee benefit research institute,
that percentage of workers hasn`t changed much in 26 years.  In this
survey, roughly four in 10 workers said they and their spouses have less
than $10,000 in savings and investments.

MATHISEN:  And speaking of investments, it`s time to get out those income
statements because tax filing season is here.  Every Tuesday from now
through April 18th, the deadline day, we will tackle a different topic to
help you navigate this annual task.

Sharon Epperson is here to help.

Sharon, let`s start with what taxpayers worry most about, maybe a little
more than they need to.  How can I avoid getting audited, besides not

everyone talks about it, how do I about an audit?

But the reality is, less than 1 percent of Americans are being audited.
And it really impacts you if you make a lot of money actually.  If you make
over $200,000 a year, you`re going to have a 3 percent chance.  Make over a
million dollars, more than a 9 percent chance of being audited.  So, you
make a lot of money, you have a chance of being audited.

Also, if you`re self-employed, not that they think you are hiding anything,
but your tax return is just a lot complicated.  And so, that often can
raise a red flag.  And then, also, if you make large charitable donations,
make sure you just document everything because if you don`t, that`s another
red flag.

HERERA:  Right.  And if you fall into that 9 percent or something lower
than that but a high risk group or if you`ve been audited before, what can
you do to lower your chances of being audited once again?

MATHISEN:  I hope Donald Trump is listening to this because he says his tax
returns getting audited every year.

EPPERSON:  One of the things you want to do is make sure that you report
all your income.  So, all the W2s, all the 1099s, know that the IRS is
getting copy of those papers as well.

MATHISEN:  And they can cross reference.

EPPERSON:  And they`re going to cross reference and match all those
numbers.  Some people inadvertently say, I`m just going to lump all my
dividend income together, all my investment income together.

No.  Each account, they want to see how much you have and make sure you
break it down in that way.  And just be accurate with the numbers.  That`s
the best thing you can do and often when you do, you`re filing online,
there`s a lot of things that can help you.

MATHISEN:  Are my chances of being audited higher if I file early or higher
if I file later, or no different?

EPPERSON:  It`s much higher if you miss that deadline.  The deadline is
critical, because a lot of folks, if they miss it, then they also don`t pay
what they owe if they owe money.  So, that`s another red flag.

So, even if you file for an extension, make sure that you pay what you owe,
because that could be another red flag.

MATHISEN:  Oh I see.  So, even if I get that 4868, the form that gets me
the automatic extension.  I know that stuff.

EPPERSON:  I love it that he knows the number.

MATHISEN:  But you`ve got to pay.

EPPERSON:  April 18th is just going to fly by you.  If you do owe money, if
you do owe money, just know you have to pay that, even if you file for the

MATHISEN:  All right.  Sharon, great to see you.  Thank you very much.


HERERA:  Thank you.

MATHISEN:  All righty.  Thanks.

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

MATHISEN:  And I`m Tyler Mathisen.  Have a great evening, everybody.  We`ll
see you back here tomorrow night.


Nightly Business Report transcripts and video are available on-line post
broadcast at The program is transcribed by CQRC
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
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