Transcript: Nightly Business Report – November 29, 2018

ANNOUNCER:  This is NIGHTLY BUSINESS REPORT with Sue Herera and Bill Griffeth.

BILL GRIFFETH, NIGHTLY BUSINESS REPORT ANCHOR:  High stakes summit.  World
leaders arrive at the G20 meeting.  And while trade is top of mind, oil
could throw investors a curve ball.

SUE HERERA, NIGHTLY BUSINESS REPORT ANCHOR:  Pay gap.  A new study shows
that the amount women earned compared to men is a lot lower than previously
thought.

GRIFFETH:  Say cheese.  Why Delta wants your face to be your passport when
boarding a flight.

Those stories and much more tonight on NIGHTLY BUSINESS REPORT for this
Thursday, November 29th.

HERERA:  And good evening, everybody.  And welcome.

The world`s leaders are gathering tonight in Buenos Aires for the G20
Summit.  The stakes are high, both economically and geopolitically.
President Trump and China`s President Xi Jinping are expected to meet to
discuss an issue that has contributed to big market swings and has left
investors hanging in the balance.  And that issue is trade.  Many want to
see tensions eased between the world`s two largest economies.

But as Eamon Javers reports, there`s a lot of uncertainty surrounding these
talks.

(BEGIN VIDEOTAPE)

EAMON JAVERS, NIGHTLY BUSINESS REPORT CORRESPONDENT:  As the city of Buenos
Aires prepared for its first ever G20 Economic Summit, President Donald
Trump and his top trade negotiator raised the prospect of new global
tariffs rather than scaling back the duties currently in place, as many
investors had hoped for.  President Trump tweeted about the prospects of
raising tariffs on European cars.  The president has great power on this
issue because of the GM event it`s studied now, the president wrote.

And his top trade negotiator issued a statement saying the United States
would consider new tariffs on China, too, saying the Chinese side has not
come to the table with meaningful concessions.  At the president`s
direction, I`ll examine all available tools to equalize the tariffs applied
to automobiles, wrote Robert Lighthizer.

To add to uncertainty, Trump told reporters he was still unsure about
pursuing a trade deal with the Chinese.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES:  I think we are very close to
doing something with China.  But I don`t know that I want to do it, because
what we have right now is billions and billions of dollars coming into the
United States in the form of tariffs or taxes.  So, I really don`t know.
But I will tell you that I think China wants to make a deal.  I`m open to
making a deal.  But frankly, I like the deal we have right now.

JAVERS:  All that came against a back drop of scandal back home as the
president`s former lawyer Michael Cohen pleaded guilty to lying to Congress
about his involvement in negotiations with the Russians over a possible
Trump real estate project in Moscow during the 2016 campaign.

The president responded angrily to that news as he departed for Argentina,
saying his former confidante was simply lying.

With all of that uncertainty in the air, many experts back in Washington
concluded the best possible outcome for this G20 Summit is simply a trade
truce in which both the United States and China agree to stop raising
tariffs on each other and hammer out all the details of a trade deal in the
coming months.

For NIGHTLY BUSINESS REPORT, I`m Eamon Javers in Buenos Aires, Argentina.

(END VIDEOTAPE)

GRIFFETH:  Now, while the world focuses on trade, oil policy is likely to
be discussed at the G20, since some of the most influential players in the
crude market will be in attendance.  And they have been faced with an oil
price collapse that has pushed U.S. crude down to $50 a barrel, which had
briefly below into today`s trading.

Joining us tonight is Helima Croft.  She`s global head of commodity
strategy at RBC Capital Markets.

Helima, always good to see you.  Thanks for joining us tonight.

HELIMA CROFT, RBC CAPITAL MARKETS GLOBAL HEAD OF COMMODITY STRATEGY:  Thank
you for having me.

GRIFFETH:  In the past, when prices go down as much as they have in the
last couple months, it`s simply a case of OPEC been cutting production to
try and shore prices.  But it won`t be that easy this time, will it?

CROFT:  Well, I mean, certainly, we are looking at an OPEC production cut
next week.  That is the expectation when the producer organization meets on
Thursday.  But there is concern that President Trump`s relationship with
Saudi Arabia and the fact that President Trump keeps calling on Saudis to
keep the taps open may mean at the last minute they decide to follow Trump
instead of pulling the barrels from the market.

So, we`re going to be watching very carefully to see what unfolds over the
next couple of days.  And we are likely to get signals from the G20 because
we are going to have Russia and Saudi meeting on the sidelines of the G20
and discussing the potential contours of a production cut deal.

HERERA:  And how do you think that works out?  Because it seems to me that
if you put the Trump administration`s relationship with Saudi Arabia aside
for a moment, it really comes down to, Russia and Saudi Arabia.

CROFT:  It absolutely comes down to these two countries.  I mean, they were
the two that decided in June to basically put a lot of additional barrels
on the market.  We have seen this resurgent supply from Saudi Arabia and
Russia since the June OPEC meeting.  This was done ahead of the Iran
sanctions.  There had been an expectation that President Trump was going to
be very, very tough on Iran.

And some are saying now that the Saudis in particular were surprised by the
fact that the Trump administration gave eight waivers to allow countries to
import Iranian crude.  But there is now a question of whether Saudi Arabia
essentially oversupplied the market at the request of Trump and now has to
roll that back.

GRIFFETH:  And, of course, this has an impact on U.S. oil producers as
well.  Even though the president would like to see prices go even lower,
right?

CROFT:  Yes, this is the interest contradiction of the Trump policy,
because on the one hand, he really does want prices to go lower.  He keeps
saying, like, Saudi Arabia, keep the taps open.  Push prices down.  He sees
in as a tax benefit, you know, a tax cut for U.S. consumers essentially.

But on the other hand, if prices fall below $50, that`s going to hurt the
U.S. shale industry.  And a number of U.S. shale producers are big
supporters of President Trump.  So, that`s the quandary.  How do you help
the consumer while at the same time supporting a very important industry in
the United States?

GRIFFETH:  Indeed, something we`ll watch very carefully as you said over
the next couple days.

Helima Croft with RBC Capital Markets, again, thanks for joining us
tonight.

CROFT:  Thank you.

HERERA:  On Wall Street, stocks took a breather after yesterday`s sharp
rally as investors watched and waited for the G20 summit to take place.
Now, they also digested the minutes of the last Fed meeting, which we`ll
have more on in a minute.  By the close, the Dow Jones industrial ample
fell 27 points to 25,338, snapping its three-day win streak.  The Nasdaq
was down 18, and the S&P 500 declined by nearly six.

GRIFFETH:  And a number of economic reports were out today, they gave
investors a better sense of how the economy is doing.  First consumer
spending came in better than expected.  Purchases rose by 0.6 percent in
October, giving the biggest part of the economy a solid start to the
quarter.

It was a different story, though, for pending home sales.  Contract
signings to purchase previously owned homes unexpectedly fell by about 2.5
percent to a 4-year low, providing more evidence that the housing market is
starting to struggle.

And on the labor front, first time unemployment claims rose by 10,000 last
week to a 6-month high.  That could raise concerns the labor market while
still historically tight may be starting to soften.

GRIFFETH:  And now those minutes from the Federal Reserve`s last policy
meeting, it gave investors more insight into the Central Bank`s thinking on
the economy and the path of interest rate increases.

Steve Liesman is in Washington tonight.

(BEGIN VIDEOTAPE)

STEVE LIESMAN, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Despite being
overshadowed by recent speeches from the Fed chairman and vice chairman,
the minutes to the Fed`s November meeting released Wednesday still provided
some clues about the direction of the Central Bank`s interest rate policy.
While Fed officials overall were upbeat on the state of the economy and the
outlook, the minutes show a lot more concern about downside risk that were
revealed when the statement came out back in November.

Officials worried, for example, about tighter financial conditions, that is
both a rise in interest rates and the decline in stock prices.  They also
worried about the slowdown in global economies and the slowdown in sectors
like housing and autos in the U.S. that are most sensitive to interest
rates.  While the minutes back up the idea that the Fed will likely race
rates by one more quarter point in December, they raise questions about how
much hiking they will do in 2019.

At least a couple members of the Fed`s Open Market Committee said the Fed
was at or into near neutral interest rates.  That would neither speed up
nor slow down the economy.  In fact, there appeared to be agreement that
future policy statements would drop the phrase, saying further gradual
increases in rates are needed.  Instead they emphasized the increases
depend on the economic data and on the outlook.

The significance of all this is to show that Fed Chairman Jerome Powell`s
more dovish outlook which sent stock surging has support in his committee.
What it means, practically, a rate hike is come in December but little is
certain after that.

For NIGHTLY BUSINESS REPORT, I`m Steve Liesman in Washington.

(END VIDEOTAPE)

GRIFFETH:  Time to take a look at some of today`s “Upgrades and
Downgrades”.

We begin tonight with McDonald`s, which was upgraded to overweight from
equal weight at Morgan Stanley.  The analyst cited the modernization
efforts and margin expansion.  Price target now $210.  The stock rose in
trading today to $189.26.

Fellow Dow component Boeing is Cowen`s number one aerospace pick for 2019.
The analyst says that the airplane maker is in a production sweet spot
right now.  Price target, $445.  The rating remains a buy.  The stock rose
more than 2.5 percent to $342.56.

HERERA:  American Express was downgraded to neutral from buy at Buckingham.
The analyst cites a, quote, blurry macro outlook, along with the stock`s
valuation.  The price target is $112.  Shares of the Dow component fell
more than 1 percent to $111.31.

Apple`s price target was cut at Canaccord Genuity to $225 from $250.  The
analyst cites smartphone demand soft and disappointing initial iPhone XR
sales.  The firm maintains its buy rating on the stock.  Shares fell in
trading today to $179.55.

GRIFFETH:  Still ahead, how DHL is speeding up delivery time with fewer
workers.

(MUSIC)

GRIFFETH:  German police raided Deutsche Bank offices in Frankfurt today as
part of a money laundering probe.  Two bank employees are suspected of
helping clients set up offshore business to launder money from criminal
acts.  The officials seized documents having to do with the so-called
Panama Papers, which was a leak of millions of files detailing offshore
accounts.  Shares of Deutsche Bank fell more than 4 percent today.

HERERA:  The German firm Bayer plans to cut 12,000 jobs as part of
corporate overhaul following its acquisition of Monsanto.  The company says
a significant number of cuts come from the German operations.  Bayer is
also considering selling some assets, including its sunscreen business
Coppertone, and its footwear brand Dr. Scholl`s.  Bayer has been dealing
with the financial fallout from a trial involving Monsanto`s Roundup weed
killer

GRIFFETH:  Meantime, another company back here at home cannot find enough
workers.  Where did we hear that before?  And because so many jobs were
going unfilled, shipping company DHL decided to invest in a facility that
needs fewer employees and it`s actually speeding up delivery times.

Frank Holland has the story for us from Avenel, New Jersey, tonight.

(BEGIN VIDEOTAPE)

FRANK HOLLAND, NIGHTLY BUSINESS REPORT CORRESPONDENT:  These parcels and
packages are part of the booming ecommerce market.  But just as the online
opportunities are growing, the labor force to process all these orders is
shrinking.  In response, DHL built this new $20 million automated facility
in northern New Jersey.

LEE PRATT, DHL E-COMMERCE CEO:  The expectations around ecommerce have
changed dramatically the last couple years.  It`s a much tighter labor
market that it was just a few years ago.  Wages are going up and we needed
to find a way to be able to adjust for that in the marketplace.

HOLLAND:  Lee Pratt, CEO of DHL Ecommerce, says this 190,000 square foot
site is one of three in the U.S. that can process 60 percent more than the
company`s non-automated sites.  DHL says the automation allows them to move
more packages in less time with less mistakes.

Every day, 40,000 packages like this get shipped out.  DHL says they
average about three pounds and the majority are from mid-size online only
retailers.

PRATT:  The benefit of our business in being somewhat of a niche player is
we are fast and flexible.

HOLLAND:  Speed is especially important as customers want what they bought
faster and faster.  DHL takes orders like these and ships directly to the
closest post office.  The local mailman handles the last mile of delivery.

Right now, the Post Office, UPS and FedEx control about 95 percent of the
ecommerce home delivery market.

PRATT:  We really don`t try and compete with them in their segments.  What
we are good at is providing a customized solution for that mid-tier
ecommerce merchant.

For NIGHTLY BUSINESS REPORT, Frank Holland, in Avenel, New Jersey.

(END VIDEOTAPE)

HERERA:  Abercrombie and Fitch forecasts a jolly holiday quarter, and
that`s where we begin tonight`s “Market Focus”.

The retailer reported profit that more than doubled in the most recent
quarter.  It also posted stronger than expected sales growth and reduced
the number of stores that planned to close.  The company says sales in the
current quarter will be better than expected.  That sent the stock up more
than 20 percent to $20.70.

Dollar Tree said tariffs will have a minimal impact on its operations this
year.  And that alleviated some concerns and overshadowed the surprise drop
in same store sales at the family dollar unit.  And the stock gained 6
percent to $88.43.

Express cut its profit and earnings guidance for the year.  That retail
cites heavy discounts and slower than expected foot traffic in stores.  The
company`s outlook is what investors focused on instead of its better than
expected earnings, and sent the stock lower by 5 percent to $6.80.

GRIFFETH:  In Yeti`s first earning report as a public company, it beat
profit estimates and provided an upbeat outlook.  However, investors did
not like its sales numbers which were a bit shy of expectations due to
weakness in its luxury coolers business.  And the stock cooled off today,
falling 16 percent to $16.10.

Meanwhile, Unilever CEO is retiring after a decade at the helm of that
company.  Paul Pullman angered shareholders earlier this year with a plan
to move its headquarters to the Netherlands.  He later abandoned that
proposal, though.  Pullman will be replaced by the head of Unilever`s
beauty unit.  The stock fell a fraction today to $54.52.

And Jack in the Box is reportedly exploring a sale of the company.
According to “Reuters”, the hamburger chain is looking at all options after
divesting its Cordova Mexican Restaurants brand earlier this year.
Potential buyers include private equity firms.  Shares rose about 6 percent
on that speculation today to $88.54.

And GameStop slashed its full year profit outlook despite strong sales
during Black Friday and Cyber Monday.  The company cited weakness in sales
of certain titles and less demand for pre-owned games.  Shares dropped
sharply in an initial afterhours trading tonight, extending the 2-1/2
percent decline that we saw during the regular session.

HERERA:  A new study from the Institute for Women`s Policy Research says
women earned just 49 cents for every dollar paid to a man over a 15-year
period, and a big difference from the commonly cited census data of 80
cents on the dollar.

Heidi Hartmann is co-author of that report and joins us to discuss her
findings.

Welcome, Heidi.  Nice to have you here.

HEIDI HARTMANN, INSTITUTE FOR WOMEN`S POLICY RESEARCH PRESIDENT:  Thank
you.

HERERA:  The difference seems to be in this metric, the Census Bureau has a
short term metric of one year, whereas your study took more of a career
long outlook and that dramatically change results.  Tell me about that.

HARTMANN:  That`s exactly right.  We feel that when you look at only one
year, that`s a measure for women and men who both work full-time year-
round.  And not very many women do that.  About a quarter of women do that
over a 15-year period, and only about three-quarters of men.  But still,
you get a lot more men in that equation if you are looking at full-time
year-round.

So looking at it at 15 years from the point of view of the woman, you`re
saying to yourself, gee, what am I earning, what am I taking out of the
labor market and bringing home to support myself and my family?  So, we
kind of call it in the report the bringing home the bacon wage gap.

GRIFFETH:  Right.  Now is this a gender discrimination problem or is it a
policy problem?  For example, you know, if I want to take time off, it will
seem a little unusual where it`s not for women, and when women come back,
they often make less money after they`ve been off for a while.  Maybe if I
felt like I can come back to the same salary, men might want to do the same
thing.

Is that part of the problem as well, do you think?

HARTMANN:  Yes, absolutely.  One of the things we have found is that both
men and women suffer if they take any time out of the labor market.  And in
this country, we have very few supports for men and women if they want to
spend time in education, financial supports, child care supports with elder
care supports if they want to spend time in education or doing family care,
taking time out of the labor market they don`t have a job to go back
always, and certainly not the same rate of pay.

Other countries that we`re competing with at our level of wealth, they are
providing families and workers with these supports.  So we do feel that`s a
lot of it.  One thing we could do is change the public policy, make it more
possible for men and women to take time out of the labor market, to provide
that family care, have a job to go back to and have some income while they
are out of the labor market.  That`s what our competitors do.

HERERA:  The results are so dramatically different than the Census Bureau
study that comes out.  Does it change the conversation do you think because
of the dramatic difference in wages earned over your long period of time
versus the census bureau?  Do you think it starts the conversation in a
different place?

HARTMANN:  I think it does.  It certainly is getting a lot of attention.
And that`s somewhat surprised me.  But 50 percent is a low number, you
know, to say that the wage gap is 51 percent and women only making 49
percent, that is a big number, and that does get people`s attention.

I think it points to what the feminist economists call provisioning.  What
is the purpose of the economy?  Is it to make a profit?  Not necessarily.
It`s to make sure that everyone survives, that they all have a way to
provide for themselves and families.

And if you look at it that way, then, yes, this is what men and women are
able to take out of the labor market to support themselves.  And why is
that?  It`s a structural problem.  Yes.  It`s a common problem.  But it`s
something that we can control through public policy.

You know, the idea that employers do kind of downgrade people who have
taken time off, consider them maybe disloyal.  And even during the Great
Recession when we had so much unemployment, we realized that firms were
using these automated resume screening devices.

HERERA:  Yes.

HARTMANN:  That threw out anyone that had unemployment.  Well, that kind of
unemployment when it`s so high, that`s not disloyalty.  When you`re taking
time off to be with your baby, your parent to go to school, that`s not
disloyalty.  You are a productive worker.

HERERA:  Indeed.

HARTMANN:  And you need some help staying productive and keeping yourself
in the labor market.

HERERA:  We will keep track of the conversation, Heidi.  Thank you very
much.  Heidi Hartmann with the Institute for Women`s Policy Research.

HARTMANN:  Thank you.

HERERA:  Coming up: now boarding.  Why all you need to get on plane is your
face.

(MUSIC)

GRIFFETH:  Now that the CVS Aetna merger has closed, the CVS CEO plans to
change some stores devoting more space to health care service like
nutrition counseling and blood draws.  The idea is to offer more clinical
services at a lower price.  He explained his vision during an interview
with our Bertha Coombs.

(BEGIN VIDEO CLIP)

LARRY MERLO, CVS HEALTH PRESIDENT & CEO:  You look at what is resident in
the Aetna business.  They have tremendous information that they can
identify what is the next best action for the members that they serve to
help them on their path to better health.  Where the system breaks down is
how do they activate it, how do they engage, you know, with those, you
know, healthcare consumers in —

BERTHA COOMBS, NIGHTLY BUSINESS REPORT CORRESPONDENT:  So, now, the CVS
store and Minute Clinics are going to be the place where that happens?

MERLO:  Exactly.

(END VIDEO CLIP)

GRIFFETH:  Shares of CVS fell a fraction today in the trade.

HERERA:  Well, imagine going through an airport on never having to take out
your ID or worry about carrying your boarding pass.  That is now a reality
for some passengers flying out of Atlanta`s Hartsfield Jackson Airport.

Phil LeBeau has more on Delta`s new biometric terminal.

(BEGIN VIDEOTAPE)

PHIL LEBEAU, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Smile, your face is
now your ticket on some of Delta`s international flights out of Atlanta.
That means from baggage check in through security and onto a Delta flight,
many passengers will never take out an ID or look for a boarding pass.

ED BASTIAN, DELTA AIR LINES CEO:  This is going to be an entirely biometric
concourse where customers through facial recognition will not need paper
anymore starting in December, to travel, as well as on the return back
internationally.

LEBEAU:  How does it work?  If you`re flying internationally you need a
passport, which means your photo is in the U.S. Customs database.  But
instead of showing your passport when you check backs, or go through
security, as flyers have done for years, Delta`s biometric system will
already know you`re scheduled for a specific flight.

So, when you stand in front of the camera, facial recognition software will
quickly verify your identity, which means going through an airport should
be easier and faster for travelers.  You will no longer have to spend time
looking for and showing their paperwork to ticket and security agents.

HENRY HARTEVELDT, ATMOSPHERE RESEARCH:  If you can save a little bit of
time up front and get people into that queue faster, then hopefully this is
making the airport screening process that much more efficient.  People
spend a little bit less time waiting, it`s a little bit less stressful.
There is a little bit less frustration on the part of travelers.

LEBEAU:  Other airlines are also testing facial recognition system for
boarding passengers.  And the private firm Clear uses biometrics to
identify travelers at many airports.  So, it may not be long before showing
your ID and boarding pass will be a thing of the past.

UNIDENTIFIED FEMALE:  We love it.  Sign us up.  We`ll be first in line.

UNIDENTIFIED MALE:  I like being quicker.  There is always the invasion of
privacy sort of thing that you think about, but safe and quick.

LEBEAU:  Adding biometric screening for domestic flights may take a little
longer since there`s not a national database as there with international
flights in the U.S. Customs and Border Patrol.  But make no mistake,
biometric screening and boarding flights through biometrics is rapidly
changing the way we travel.

Phil LeBeau, NIGHTLY BUSINESS REPORT, Chicago.

(END VIDEOTAPE)

HERERA:  And that`s it for us tonight.  I`m Sue Herera.  Thanks for joining
us.

And we want to remind you that this is the time of year your public
television station seeks your support.

GRIFFETH:  I`m Bill Griffeth.  We do thank you very much for that support.
Have a great evening.  See you tomorrow.

END

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