TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR: Next chapter. Verizon
(NYSE:VZ) buys Yahoo`s core Internet business for a fraction of what it was once worth, marking the end of an era of one of the Internet`s pioneers.
SUE HERERA, NIGHTLY BUSINESS REPORT ANCHOR: Chaotic kickoff. From
protests to heckling, it was a rocky start to the Democratic Party`s
national convention, as new polls show the race is tightening.
MATHISEN: Precious metal. Why the key to the electric car revolution can
be found in a remote part of the Nevada desert.
All those stories and more tonight NIGHTLY BUSINESS REPORT for Monday, July
HERERA: Good evening, everyone. Welcome.
It is the end of the line for one of the original Internet disrupters, and
the beginning of a new one for a telecom giant. Yahoo (NASDAQ:YHOO) has
agreed to sell its core business to Verizon (NYSE:VZ) for nearly $5
billion. For Yahoo (NASDAQ:YHOO), it not only ends a drawn out auction
process, but it also caps CEO Marissa Mayer`s four year turnaround effort,
one that many say failed to materialize.
For Verizon (NYSE:VZ), it extends the telecom company`s digital reach to
make it a bigger rival to both Google (NASDAQ:GOOG) and Facebook
(NASDAQ:FB). Shares of both Verizon (NYSE:VZ) and Yahoo (NASDAQ:YHOO)
finished the day lower.
Julia Boorstin has more on the deal and what`s likely to happen next.
JULIA BOORSTIN, NIGHTLY BUSINESS REPORT CORRESPONDENT: Telecom giant,
Verizon (NYSE:VZ), is buying Yahoo`s core as sets. Verizon (NYSE:VZ)
hoping to combine data from smart phones with AOL (NYSE:AOL) and Yahoo`s ad
systems to improve targeting and create an ad giant to rival Google
(NASDAQ:GOOG) and Facebook (NASDAQ:FB).
MARISSA MAYER, YAHOO CEO: They`ve completely modernized the product line
and we`ve gone mobile. We`ve invented new forms of advertising. We`ve
driven towards the programmatic, buying, the overall buying push that we
see happening from advertisers and our user base has grown by more than 50
BOORSTIN: Verizon (NYSE:VZ) with its AOL (NYSE:AOL) acquisition and Yahoo
(NASDAQ:YHOO) owned complimentary technology tools and they both bring
scale and users and data about them, which enables more accurate targeting
of a broader audience.
CRAIG MOFFETT, MOFFETTNATHANSON FOUNDER: You`ve got AOL (NYSE:AOL), which
is primarily for Verizon (NYSE:VZ) and ad tech platform. You`ve got Yahoo
(NASDAQ:YHOO) now, which is primarily a content platform, and you`ve got
Verizon (NYSE:VZ) itself, which I think in this context, you can think of
as customer data about wireless usage. What they`re hoping is that if you
combine those three things, you can actually significantly enhance the
value of Yahoo (NASDAQ:YHOO)!`s advertising inventory.
BOORSTIN: This deal is all about ad technology. Tools for marketers to
decide what types of ads to buy and to automatically distribute and target
those ads with tools to measure their impact. And this deal is about the
ability to use those ad tech at scale.
Yahoo`s web services draw about one billion monthly users while Verizon
(NYSE:VZ), the leading U.S. mobile carrier has 140 million wireless
TIM ARMSTRONG, AOL (NYSE:AOL) CEO: I think between the team at Verizon
(NYSE:VZ) and a team at AOL (NYSE:AOL) and team at Yahoo (NASDAQ:YHOO), we
will set the business up to compete in a completely different level, you
know, than any of our businesses have been able to do alone in the past.
BOORSTIN: Though these new assets allow Verizon (NYSE:VZ) to leapfrog
Microsoft (NASDAQ:MSFT), the acquisition will give Yahoo (NASDAQ:YHOO) just
5 percent total digital ad market share, according to E-marketer, a distant
third to Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB).
But this deal isn`t just about ad tech. Verizon (NYSE:VZ) has been
investing in its Go 90 app to create a mobile video platform. It has a
long way to go to rival YouTube and Facebook (NASDAQ:FB). We`ll see if
Verizon (NYSE:VZ) can drive traffic from Yahoo`s users to create more
valuable ad inventory there as well.
For NIGHTLY BUSINESS REPORT, I`m Julia Boorstin in Los Angeles.
MATHISEN: On Wall Street, stocks fell from record levels, a decline in oil
prices weighed on energy shares as investors look ahead to a big week of
earnings reports and a two-day meeting of Federal Reserve policymakers.
The Dow Jones Industrial Average was down nearly 78 points to 18,493.06.
NASDAQ off 2.5. The S&P 500, which closed at a record on Friday, declined
As for oil prices, they were down more than 2 percent, hitting a three-
month low on growing concerns. We talked about it last week about a global
glut of crude.
HERERA: To politics now, where the Democratic National Convention is
getting underway in Philadelphia. The theme, “United Together”. After
today`s rocky start, unity appears a long way off.
John Harwood comes to us from the City of Brotherly Love.
John, it`s good to see you as always. The head of the DNC, Debbie
Wasserman Schultz resigned yesterday as the party`s chairwoman, effective
at the end of the convention. Today, she changed her mind about gaveling
the convention into session.
So, walk us through that process and what happened.
JOHN HARWOOD, NIGHTLY BUSINESS REPORT CORRESPONDENT: Well, what happened,
Sue, was some of that disunity that you just alluded, Debbie Wasserman
Schultz went to her home state`s delegation, Florida, and was booed.
Now, once that was demonstrated, nobody wanted to repeat the booing that
occurred on the floor of the Republican convention last week that caused
everything to conclude that they were not unified. Democrats don`t want
that. But it`s going to be a struggle to prevent that from happening again
and that`s why Debbie Wasserman Schultz took a step in that direction and
turned the gavel over to Stephanie Rawlings-Blake the mayor of Baltimore.
MATHISEN: You know, John, I heard some of the restiveness described by one
Sanders supporter this way. Bernie fed us a bunch of Mountain Dew and now
he wants us to go to sleep. It ain`t happening.
Well, Democrats be able to get past all of this restiveness?
HARWOOD: Well, we find out tonight because not only do we have Michelle
Obama speaking this evening, very popular first lady, but you`ve also got
Elizabeth Warren, the hero of the populist, and Bernie Sanders himself will
bat clean up and speak at the 11:00 hour. He`s been trying urgently all
afternoon through text messages and e-mails to calm his supporters, ask as
a personal favor to him that they not boo Hillary Clinton`s, the mention of
her name, and he`s going to mention her name in this speech. So, we`ll
find out tonight.
HERERA: You know, John, as the Democrats get started, is it possible to
measures of the Republican convention last week?
HARWOOD: Not with any great reliability, Sue. It`s always dangerous to
poll in the middle of events or immediately after big events. However, the
measurements that we do have suggest that Donald Trump has gotten a bump
from his convention. In fact, in the average of national polls by
RealClearPolitics.com, that website, Donald Trump has moved very slightly
HERERA: Wow. All right. It`s going to be an interesting evening and a
John, thank you so much. John Harwood of Philadelphia.
MATHISEN: Well, the heat wave in Philadelphia did not keep protesters
away. If anything, it just heated them up. The demonstrations at the
Democratic National Convention appeared bigger than those at the RNC last
week, in Cleveland. And today`s protests were mostly driven by Senator
Bernie Sanders` supporters representing a variety of diverse interests.
Eamon Javers was in middle of it all.
EAMON JAVERS, NIGHTLY BUSINESS REPORT CORRESPONDENT: A fairly significant
pro-Bernie Sanders protest here on Broad Street in Philadelphia. This
crowd walking south on Broad Street from city hall, all the way down to the
Wells Fargo (NYSE:WFC) Center, which is where the Democratic National
Convention is actually being held. As you can see from the signs behind
me, this group very much for Bernie. Bernie Sanders signs everywhere, “no
wall” or “Wall Street corruption” signs. “Hillary for prison” signs.
“Bern the system down” for Sanders.
This group very much opposed to Hillary Clinton. I saw one sign that said,
“indict the queen” and they`re chanting “shame on the DNC”.
So, this is going to be a tough week for Democratic Party unity here in
For NIGHTLY BUSINESS REPORT, I`m Eamon Javers in Philly.
HERERA: The election uncertainty is making some wealthy investors nervous.
According to a new survey, nearly half are considering selling some of
their stocks when the votes are tallied in November.
Robert Frank has the details.
ROBERT FRANK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Millionaire investors
say this election is the most important in recent history and many have
their finger on the sell button, depending on the results. Three quarters
of millionaire investors say this election is a, quote, “game changer” and
they`re nervous about the outcome. That`s according to a UBS survey of
investors with one million dollars or more in investible assets.
Millionaire anxiety could lead to large stock sales. Nearly half of the
investors planned to reduce their market exposure, and as a result of the
election, and a small percentage have already sold. But their investment
plans and fears depend largely on their politics, and millionaires are
sharply divided along party lines, roughly a third Democrats, a third
Republican and a third independent. Sixty-one percent said if their
preferred candidate win, it will be good for the market and two-thirds said
if the opposing candidate wins, it`s bad for the economy.
SAMEER AURORA, UBS WEALTH MANAGEMENT: Their political leanings, or
political affiliation, are directly impacting how they feel about the
investment outlook and the prospect of the stock market going forward.
FRANK: Millionaires say the country is on the wrong track, but they`re
divided on the solutions. GOP millionaires say the answer is tax cut, a
balanced budget, and strict immigration enforcement. Democrats say the
answer is higher taxes on the rich, a higher minimum wage, and clean
So rather than a, quote, “market reaction to the election”, investors will
react according to their politics, split sharply along party lines.
For NIGHTLY BUSINESS REPORT, I`m Robert Frank.
MATHISEN: Politics in the U.S. and abroad dominated the conversation over
the weekend at a meeting of the world`s major economies. So-called G-20
group said it was focused on a number of global uncertainties, and that
downside risks persist.
Eunice Yoon reports tonight from Beijing.
EUNICE YOON, NIGHTLY BUSINESS REPORT CORRESPONDENT: Over the weekend, G-20
finance ministers and central bank governors gathered in a Chinese
southwestern city of Chengdu, and the topic was Brexit, Brexit and more
Brexit. There was almost universal concern about the impact of Brexit on
European growth and therefore, on the global economy.
The G-20 leaders issued a communique where they said they would use every
tool available to them in order to try to prop up growth but because it was
a G-20, there weren`t a lot of specifics. Now, what they did agree upon is
that they hoped that Brexit would be negotiated quickly and in the least
disruptive way. Otherwise, as the IMF`s David Lipton told me, there could
be a slowdown investment as well as spending.
DAVID LIPTON, IMF`S FIRST DEPUTY MANAGING DIR.: There`s an amicable
approach. That they approach this with a sense of mutual gain and find a
way to agree on some new rules without creating a period of unnecessary
YOON: Since the meetings followed the Republican National Convention,
there was a lot of talk about Donald Trump and his economic policies.
There`s a big concern about G-20 leaders about rising protectionism in the
United States as well as elsewhere around the world. One of the targets of
Trump`s policies is Mexico.
I sat down with the deputy finance minister of Mexico and asked him about
the antitrade rhetoric and whether or not he`s concerned it could hurt
FERNANDO APORTELA, MEXICO`S DEPUTY FINANCE MINISTER: What we are working
on is to show positive things that happened with free trade, the
integration between our economies, and all this relationship that we have
that are more profound than the government relationships.
YOON: Another major concern among the G-20 leaders is the health of the
Italian banks. The European commission has been negotiating with the
Italian government over some sort of rescue plan, I talked with all of the
players in the European commission, the Italian Central Bank governor as
well as the Italian finance minister, and all of them had a similar
necessary and that is that they believe that the fears among investors were
exaggerated and they were working very closely in order to try to come up
with a solution sometime soon. The E.U. is going to be releasing its bank
stress test results on Friday.
For NIGHTLY BUSINESS REPORT, I`m Eunice Yoon in Beijing.
HERERA: Still ahead, when an e-mail from your boss isn`t what it seems and
could cost your company big money.
HERERA: Surging demand for air travel will increase the need for more
pilots. According to a forecast by Boeing (NYSE:BA), global airlines will
need to hire nearly 1.5 million pilots and technicians by the year 2035.
The Asia Pacific region will account for about 40 percent of total new
hires mostly because of China`s growing travel market.
MATHISEN: Well, there`s not only growing demand for air travel, but also
for electric vehicles and that means there`s an increased need for lithium,
which is one of the key components in batteries for electric vehicles. And
that`s putting even more attention on a remote part of the American desert.
Phil LeBeau reports from Silver Peak, Nevada.
PHIL LEBEAU, NIGHTLY BUSINESS REPORT CORRESPONDENT: That`s not a mirage.
Those are lithium extraction pods outside Silver Peak, Nevada. The water
evaporates, which often takes more than a year, it eventually leaves behind
lithium, a primary component in the batteries used for cell phone and
electric vehicles as sales of those cars like Tesla`s Model S and the
Nissan Leaf, automakers are clamoring for more lithium.
PATRICK HIGHSMITH, PURE ENERGY MINERALS CEO: We`ve been driving lithium
demand up for a long time, with electronics, portable electronics. But
now, it`s electric vehicles, the larger batteries that electric vehicles
use demand a lot more lithium.
LEBEAU: Pure Energy Minerals is hoping to tap the supply of lithium in
water tables deep below Nevada`s desert. But unlike the current process of
having water evaporate overtime, Pure Energy wants to build a processing
plant to produce more lithium faster.
HIGHSMITH: Instead of taking 18 months or two years like larger ponds,
this is an industrial process that works in a matter of hours.
LEBEAU: For nearby Silver Peak, the push for more lithium could pump new
life into an old mining town that is so small it doesn`t even have a gas
But Silver Peak and the lithium deposits in this area are not far from a
new battery plant Tesla is building just outside of Reno, and as that plant
begins to supply to lithium ion batteries for electric vehicles and energy
companies, the people in this area could see their fortunes change.
Phil LeBeau, NIGHTLY BUSINESS REPORT, Silver Peak, Nevada.
HERERA: Gilead cuts its outlook for the year and that`s where we begin
tonight`s “Market Focus”.
The biotech company topped analyst`s profit and revenue expectations in the
latest quarter thanks in part to an increase in sales for its HIV drugs.
But the drug maker lowered its overall revenue guidance and also sees
product sales slowing. Shares of Gilead initially fell in afterhours but
finish the regular session up 2 percent to $88.55.
Profit and sales at Texas Instruments (NYSE:TXN) beat Wall Street
estimates, thanks to strong product demand from the automotive and
industrial markets. The chipmaker also said earnings guidance for the
quarter was better than expected. Following the news, shares popped in
extended hours after ending the regular session up a percent to $66.22.
Currency headwinds dragged down sales of Kimberly-Clark (NYSE:KMB). The
makers of Kleenex tissues still managed to beat expectations, and the CEO
said, quote, “The worst has passed for the company.”
Kimberly-Clark (NYSE:KMB) now expects organic sales for the year to come in
at the low end of its previously issued guidance. That sent shares down
more than 1 percent to $132.59.
And promotional offers led to more customers for Sprint, helping the
wireless carrier post better-than-expected revenue. But despite the
success with the steep discounting the company said it will likely raise
prices in the not-too-distant future. The company`s CEO said it`s all
about getting back to basics.
(BEGIN VIDEO CLIP)
MARCELO CLAURE, SPRINT CORP, PRESIDENT AND CEO: We`re going back to the
fundamentals of business, and that is bring a great product at a great
price and you start to see customers come in, 173,000 postpaid phone it
adds, which is what matter in this business, actually the highest in the
last night years. So, we`re happy with the result and the progress that
(END VIDEO CLIP)
HERERA: Shares of Sprint spiked 27 percent to $5.90.
MATHISEN: The telecom equipment-maker Ericsson said its CEO Hunts __ has
stepped down. The news comes after the company`s board of directors
unanimously voted to replace him, saying the time is right for a new
leader. The company`s current CFO will take over until a replacement is
found. Shares up 8 cents to $7.44.
LVMH will sell its Donna Karan brand to G-III Apparel for $650 million.
Under the deal, G-III will also get the DKNY clothing line. Shares of G-
III, though, fell on the news, off to 14 percent to $42.95.
AMC Entertainment sweetened its offer and is buying rival Carmike Cinemas
(NASDAQ:CKEC) for $1.2 billion. The merger creates the nation`s largest
theatre chain. Shares of AMC fell 2 percent to $29.92. Shares of Carmike
down 44 cents at $30.69.
Outerwall which owns the DVD rental business Redbox will be taken private
by the private equity firm Apollo Global Management for more than $1.5
billion. The deal expected to be finalized in the third quarter of this
year. Outerwall shares up 11 percent on the session to 52.19.
HERERA: When the big boss says jump, many employs asked how high, and
that`s exactly why a new e-mail scam known as CEO fraud is so effective at
fooling its victims. It counts on you doing exactly what your boss tells
you to do, and FBI says it`s on the rise.
Andrea Day talks to one CEO who became a target.
TOM KEMP, CENTRIFY CEO: The perfect storm for this fraud to happen.
ANDREA DAY, NIGHTLY BUSINESS REPORT CORRESPONDENT: It`s called business e-
mail compromise or CEO fraud. And the con is simple. Swindlers faking e-
mail from top managers at a company, requesting a wire transfer. If all
goes as planned, the money winds up the criminal`s bank account, according
to the FBI, netting billions and counting. The agency reporting a 270
percent increase in just the first four months of the year.
And something Tom Kemp says he`s lucky to have caught just in time.
KEMP: So, I came into the office one day and someone said, hey, we`re
working on that wire transfer you requested. And I gave them a funny look.
I`m like, what are you talking about? I didn`t request a wire transfer?
DAY: He says it was e-mail chain supposedly from him to the CFO, then
forward to accounting, asking for more than $357,000 to be transferred
KEMP: It just looked like a normal business communication. We stared at
the e-mail and we noticed that the “I” and the “F” were flipped around.
DAY: The swindlers had created a domain to look almost like Centrify.
Researched the company to find out who was in charge and who could initiate
a transfer and then set up an e-mail account in their name.
KEMP: It was completely crazy in terms of just the level of
DAY: And he says even after they discovered the scheme, the e-mails kept
KEMP: The crook was actually communicating with us in real-time, trying to
nudge us along to actually the initiate the wire transfer.
DAY: The CEOs of Snapchat and Seagate were once targeted. But in those
cases, the phony e-mail was sent to HR, requesting W2s for all employees,
not a wire transfer. In Kent`s case, he says he tried to track down the
criminals behind it, calling the company vistaprint where the domain was
KEMP: And they admitted that morning that 60 other lookalike domains were
created. These domain registration companies, they really don`t require
any information or any credit card information to set up a domain, at least
for the first 30 days.
DAY: Vistasprint tells us, quote, “Each domain registration goes through
various fraud and credit card checks to ensure payment is verified. The e-
mail address then used is also run through a variety of propriety checks to
flag potential fraud. This is unfortunately an issue that all domain
providers face. And every single complaint about the misuse of a domain is
KEMP: You really need to step up your game in terms of making sure that
you don`t have this occur to yourself and your company.
DAY: And he says the best way to make sure is to educate your accounting
and HR departments about the fraud, and make certain they know that if
something looks slightly off, just pick up the phone and call, even if it`s
calling the CEO.
I`m Andrea Day for NIGHTLY BUSINESS REPORT.
MATHISEN: Coming up, growing appetite. Fewer people have been hitting to
the mall, but there may be one thing that`s starting to pull them back in.
HERERA: Here`s a look at what to watch for tomorrow. Apple (NASDAQ:AAPL),
3M (NYSE:MMM), McDonald`s (NYSE:MCD) and Caterpillar (NYSE:CAT) are just a
few that will release quarterly results. The Federal Reserve kicks off its
two-day policy meeting and we`ll learn if the phase of newly built homes
pick up in June. And that`s what to watch for on Tuesday.
MATHISEN: A new study shows the highest paid CEO run some of the worst
performing companies. That`s according to analysis from the corporate
governance research firm MSCI (NYSE:MSCI). If you invested $100 in the
companies with a highest paid CEO, that invested would have grown to $265
over ten years, but if you invested the same in companies with the lowest
paid CEOs, you would have $367. The results call into question whether
equity incentive awards for chief executives help drive better results for
HERERA: Twitter is striking new live streaming deals. The social media
company will host live Major League Baseball and National Hockey League
games. Twitter says the package will include one out of market game once a
week. It`s not known how the games will be selected. Twitter is making a
big push into sports. The company now has deals with four major sports
leagues and the Pac 12 network for college sports.
MATHISEN: For the first time in nearly two decades, restaurant sales
overtook grocery store sales last year. That change now showing up in
retail real estate. So, forget the traditional food court. Retail
landlords betting on a new way to drive traffic to the malls.
Diana Olick explains.
DIANA OLICK, NIGHTLY BUSINESS REPORT CORRESPONDENT: On a sultry summer
afternoon in northwest D.C., workers are lining up for lunch at the food
truck. Trucks offering new fare in a new fashion, but parked right in
front of old fashioned shopping malls.
MELINA CORDERO, CBRE RETAIL RESEARCH : Food trucks are basically the pop
up of the restaurant business, right? They come in. They can set up, low
cost. And they`re constantly changing.
OLICK: Trucks don`t traditionally benefit the retail landlord because
they`re setting up outside. But some landlords are starting to incorporate
the food trucks into traditional retail spaces, creating outdoor food
GERRY STOCKER, FOOD TRUCK CUSTOMER: I think for urban locations, it`s
probably a good idea because definitely it`s going to create some more food
traffic to the fronts of the malls. It`s all part of a shift on how
landlords use food to drive traffic. This includes so-called grocer on,
which are a hybrid supermarket with wide variety of prepared foods and an
eating area, like you`re seeing now at Whole Foods.
Then, there are food halls in the mall, much more diverse than the old fast
food courts and celebrity chef restaurants. But most we spoke to said the
name wasn`t all that important.
SARA WISE, CONSUMER: It`s incredibly high profile celebrity chef like
Gordon Ramsay. For me, it`s not about a person as much as the food.
OLICK: While the strong credit of a Cheesecake Factory is a sure thing for
landlords, they`re also betting on a new concept in a new way.
CORDERO: What we`re seeing a move away from a traditional tenant landlord
partnership, and more towards financial partnerships where sometimes,
they`re seeing these new complexes as business opportunities for
OLICK: So, while e-commerce may be driving consumers away from shopping
centers, food is pulling them back in and landlords are willing to cater to
just about any taste in order to keep consumers hungry.
For NIGHTLY BUSINESS REPORT, I`m Diana Olick in Washington.
MATHISEN: To read more about how food is ruling retail real estate, head
to our website, NBR.com.
HERERA: Before we go, here`s another look at how the day fared on Wall
Street, a day that saw oil prices fall more than 2 percent to a three month
low. The Dow was down nearly 78 points, well off its worst levels of the
day. The NASDAQ was off 2 1/2 and S&P 500, which closed at a record on
Friday declined six points.
And that will do it for us on 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, and we`ll see you back here tomorrow night.
Nightly Business Report transcripts and video are available on-line post
broadcast at http://nbr.com. 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
on Nightly Business Report is not and should not be considered as
investment advice. (c) 2016 CNBC, Inc.