Transcript: Nightly Business Report – May 22, 2019

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


SUE HERERA, NIGHTLY BUSINESS REPORT ANCHOR:  D.C. drama.  Infrastructure  talks break down and that has some wondering if a key deal on the debt  ceiling might be harder to reach.  


BILL GRIFFETH, NIGHTLY BUSINESS REPORT ANCHOR:  Bright spot.  Target  (NYSE:TGT) hits the bull`s-eye with its online sales even as rival  retailers flounder.  


HERERA:  Hollywood backlash.  Georgia has become a production powerhouse,  but now a loss of who`s who is threatening to boycott that state.  


Those stories and much more tonight on NIGHTLY BUSINESS REPORT for  Wednesday, May 22nd.  


GRIFFETH:  And we do bid you a good evening, everybody.  And welcome.  
Fixing our nation`s crumbling infrastructure was the one issue that  virtually everyone in Washington could agree on, but today, the latest  round of infrastructure talks crumbled.  A meeting at the White House  between President Trump and Democratic leaders ended before it began.  The  get together was supposed to be the second official sit-down on that issue.   First, as you recall, ended with an unofficial agreement to spend $2  trillion, but the president says that`s off the table.  
(BEGIN VIDEO CLIP)


DONALD TRUMP, PRESIDENT OF THE UNITED STATES:  I want to do infrastructure.   I want to do it more than you want to do it.  I`d be really good at that.   That`s what I do, but you know what?  You can`t do it under these  circumstances.  
(END VIDEO CLIP)


GRIFFETH:  The circumstances he`s referring to are the investigations being  led by the House Democrats.
Speaker Pelosi expressed her disappointment at today`s development.  
(BEGIN VIDEO CLIP)


REP. NANCY PELOSI (D-CA (NASDAQ:CA)):  For some reason, maybe it was lack  of confidence on his part that he really couldn`t match the greatness of  the challenge that we have.  He just took a pass.  
(END VIDEO CLIP)


GRIFFETH:  Eamon Javers is following the story for us from the White House  tonight.  


Eamon, one Wall Street trader said that investors want to see  infrastructure improvements get done.  In fact, many of those  infrastructure stocks fell on this development today.  
What are you hearing?  Any chance of this still happening?


EAMON JAVERS, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Well, those investors  are not going to see any infrastructure spending in Washington any time  soon after today`s meeting, Bill.  I`m told that what it was that set the  president off today is Nancy Pelosi going on television earlier before the  meeting, just about an hour or so before the meeting was set to happen and  accusing the president of engaging in a cover-up because he was refusing to  comply with subpoenas for information and documents that House Democrats  want.  That angered the president and that, aides tell me, is when the  president decided he simply couldn`t work with them and suggested in a  hastily called Rose Garden session that he wasn`t going to work with  Democrats on much of anything, including drug price legislation,  infrastructure and a number of other issues, saying you can either  investigate — you can either investigate me or you can legislate, and you  can`t do both at the same time.
So, the president saying ultimately, Washington is going to come to  something of a halt here.  


HERERA:  Eamon, you mentioned that investigate versus legislate.  What does  that mean in particular for the debt ceiling and the budget?  They`re  critical to the economy and also to Wall Street.  


JAVERS:  Well, we spent some time trying to figure that out because the  president didn`t specifically say which negotiations he`s walking away from  and which he`s going to continue.  A senior administration official texted  me late this afternoon and said that the president is not walking away from  negotiations around government spending and the debt ceiling.  That`s an  important one for Wall Street.  A senior administration official saying  those are must-pass items and not included in the president`s walking away  from negotiations here at the White House.
But the White House is not saying what is included.  They`re not saying  what exactly it is he walked away from today, but he very visibly and very  audibly walked away and we`ll see whether they can patch up this  relationship any time soon.  


HERERA:  Indeed.


GRIFFETH:  Eamon Javers at the White House for us again tonight — thanks,  Eamon.  


JAVERS:  You bet.  


HERERA:  Also in Washington, the Federal Reserve released the minutes of  its last meeting, and it shed some light on two critical issues for the  market, inflation and interest rates.  
Steve Liesman has the details.  
(BEGIN VIDEOTAPE)


STEVE LIESMAN, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Minutes of the Fed`s  April-May meeting show the Central Bank is ready to be patient with its  policy of patients when figuring out what to do next with interest rates.   The minutes say members of the Fed`s rate-setting Open Market Committee  believe a patient approach is appropriate, quote, for some time and it`s  the first time they characterize the time period around their patient`s  language.  


Committee members believe the most likely outcome is a continued economic  expansion, strong labor markets and inflation rising back towards its 2  percent target.  Inflation running below that target and the question is  whether officials are concerned enough to cut rates.  The answer in the  minutes: not yet, but maybe soon.  


Some officials say the downside risk has increased and several said they`re  worried that if inflation doesn`t head back up in coming quarters they`re  worried that average Americans will start to doubt the Fed really means it  when it said it wants 2 percent inflation.  


The implication: if inflation doesn`t rise 2 percent in the coming  quarters, the Fed could well be thinking about a rate cut perhaps around  the end of the year.  All that said, there`s a small wing of the committee  that worries about the other side.  They said if the economy evolves as  they expect, they can see hiking rates.  


On the economy, the general view is that growth would slow this year from  the 3 percent pace of 2018, but a better first quarter meant that it  wouldn`t slow as much as originally thought.  


The meeting took place before President Trump imposed new tariffs on China,  so it won`t be until the next meeting in June before markets will get a  full view of how the tariffs will change the committee`s outlook on growth,  inflation and rates.  


For NIGHTLY BUSINESS REPORT, I`m Steve Liesman in Washington.  
(END VIDEOTAPE)


GRIFFETH:  And on Wall Street, a decline in tech stocks and the  semiconductor sector in particular once again weighed on the broader  market.  The Dow Industrial Average dropped a hundred points to 25,776.   The Nasdaq was down 34.  The S&P lost eight.  
Now, the semiconductor maker Qualcomm (NASDAQ:QCOM) was down more than 10  percent today after a judge ruled that it violated antitrust laws, and that  is what put that group at the center of today`s tech decline.  
Deirdre Bosa has more for us tonight from Toronto.  
(BEGIN VIDEOTAPE)


DEIRDRE BOSA, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Qualcomm  (NASDAQ:QCOM) is a titan of the mobile industry.  Its chips powered many of  the world`s smartphones, from Samsung to Apple (NASDAQ:AAPL), while its  extensive patent portfolio covers many of the technologies used in those  devices.  


But now, its entire business model is being challenged and a federal judge  ruling that it has abused its position to harm competition and inflate  licensing fees for cell phone makers.  It`s a decision that could also  shake up the smartphone industry.  


PATRICK MOORHEAD, MOOR INSIGHTS FOUNDER:  What that`s going to do is that`s  going to benefit only the larger handset makers.  So, the smaller handset  makers are going to have a lot harder time.  This actually is going to  lower competition for decreased competition for the handset makers because  it makes their life a lot more difficult. 

 
BOSA:  Meanwhile, some industry experts say the government is sending mixed  signals challenging Qualcomm`s market power while at the same time trying  to ensure that the U.S. is at the forefront of the next generation of  technologies, from 5G to artificial intelligence.  


JAMES PETHOKOUKIS, AMERICAN ENTERPRISE INSTITUTE:  The administration has  sort of figured out what it wants to do.  They`re sort of this perception  that we`re behind.
Certainly, at the core of this is the belief that U.S. companies should be  taking the lead and that companies like Qualcomm (NASDAQ:QCOM) really  should be, you know, spearheading our effort.  


BOSA:  Qualcomm (NASDAQ:QCOM) disagreed with the judge`s conclusion.  It  argues that the cellular market is healthy and competitive and says it will  seek an expedited appeal.  
For NIGHTLY BUSINESS REPORT, I`m Deirdre Bosa, Toronto, Canada.  
(END VIDEOTAPE)


GRIFFETH:  Meanwhile, some investors are asking what might happen to  Qualcomm`s recent legal settlement with Apple (NASDAQ:AAPL) that saw Apple  (NASDAQ:AAPL) pay Qualcomm (NASDAQ:QCOM) about $4.5 billion.  Well, one  expert says the answer is still unclear because that deal is independent,  but he does describe the deal as rock solid.  


HERERA:  And now to those simmering trade tensions with China which also  weighed on the broader market.  Today`s concern stems from a report on the  “South China Morning Post” which said China may rethink its entire economic  relationship from the U.S. and is considering dropping natural gas  purposes.  


GRIFFETH:  Add to that, comments today from Treasury Secretary Steve  Mnuchin who said he has not yet scheduled a trip to Beijing for further  trade negotiations.  During congressional hearing today, Mnuchin was also  asked about the impact of tariffs on the prices that consumers pay for  things like baby products.  
(BEGIN VIDEO CLIP)


STEVEN MNUCHIN, TREASURY SECRETARY:  I can tell you I am monitoring the  situation very carefully.  I was on the phone with the CFO of Walmart,  which is obviously one of the biggest sellers of the items that you`ve  described, to specifically understand from Walmart what things they can  source from other areas and what items they can`t.  You know, I would say  we haven`t made any decisions yet but we will be especially sensitive to  the consumer items.  
(END VIDEO CLIP)


GRIFFETH:  Other retailers are figuring out how to get around those 25  percent tariffs.  Home Depot (NYSE:HD), for example, says it`s opening a  new sourcing office in Vietnam, Urban Outfitters (NASDAQ:URBN) is looking  to cut its exposure to China, and Target (NYSE:TGT) says it is working to  mitigate the impact of those tariffs.  


HERERA:  And in fact, the tariffs had no impact on Target`s bottom line.   The company easily beat Wall Street sales and profit expectations, thanks  to more modern stores and a revamped digital strategy, and that gives the  stock a pop, making Target (NYSE:TGT) a bright spot in an industry that`s  struggling.  
Rahel Solomon has more.  
(BEGIN VIDEOTAPE)


RAHEL SOLOMON, NIGHTLY BUSINESS REPORT CORRESPONDENT:  For Target  (NYSE:TGT), investing its stores and providing customers more delivery  options is paying off in a big way, including a 42 percent increase in  online growth?  


CHARLIE O`SHEA, MOODY`S INVESTORS SERVICE:  You will leverage stores with  your online business.  It`s a tough model to compete with.  And, you know,  for Target (NYSE:TGT), this is a bull`s-eye quarter.  I mean, this  validates everything that the company said it was going do a couple of  years ago.  


SOLOMON:  Target (NYSE:TGT) executives say more than half of its digital  growth was driven by same-day delivery options like in-store or curbside  pickup and also their program Shipt which offers same-day delivery for a  fee of $99 per year.  


BRIAN CORNELL, CHAIRMAN & CEO, TARGET:  Our ability to offer the same-day  services which is the high-level sanction is a result of the strategy to  put stores at the center of fulfillment.  In fact, our stores handled more  than 80 percent of the first quarter digital volume, including all of our  same-day options combined with the digital ownership directly from stores  to those homes.  


SOLOMON:  Using stores at fulfillment centers might not be new to Target  (NYSE:TGT).  The shipping wars have ramped up.  In the last month, the  world`s biggest retailer Walmart and e-commerce giant Amazon (NASDAQ:AMZN)  have announced plans to offer next-day delivery.  Though the competition is  fierce, these companies and the rest of the retailers share one common  worry.  


CORNELL:  We`re concerned about tariffs because they lead to high prices on  every day products for American families.  


SIMEON GUTMAN, MORGAN STANLEY RETAIL ANALYST:  First 10 percent, I would  say pendulum swung in the favor of the retailer.  They were able to push  back on suppliers.  They were able to maybe modestly make some tweaks to  their portfolio of product approach.  The next 25 percent, the consumer is  going to have to feel that in some way or another.  I don`t think there`s  enough in a supply chain to absorb that hit without it going to the  consumer.  


SOLOMON:  Despite the uncertainty of trade talks, the retailer maintains  its outlook for the full year, expecting profits to be right on target.  
For NIGHTLY BUSINESS REPORT, I`m Rahel Solomon.
(END VIDEOTAPE)


GRIFETH: And sticking with retailers, Amazon (NASDAQ:AMZN) hosted its  annual shareholder meeting today, and it tried to head off a rebellion over  how it uses facial recognition software.
Aditi Roy is in Seattle.  
(BEGIN VIDEOTAPE)


ADITI ROY, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Outside Amazon  (NASDAQ:AMZN) shareholder meeting in Seattle, groups of protesters are  speaking out on everything from the tech giant`s impact on homelessness to  its carbon footprint.  


EMILY CUNNINGHAM, AMAZON EMPLOYEE/SHAREHOLDER:  We`re using our Amazon  (NASDAQ:AMZN) Web Services on technologies to help fossil fuel companies  expand and extract oil more quickly and that is obviously very much at odds  with being a climate leader.  


ROY:  Inside the meeting where cameras weren`t allowed, CEO Jeff Bezos  answered questions from shareholders on issues including climate change.   Among the most closely watched issues debated, Amazon`s view is the facial  recognition technology.  Shareholders voted against both proposals on the  company`s recognition program.  One would have prohibited the company from  selling its software to government agencies, and another would have led to  an independent review of the program.  Shareholders we spoke to were split.  


MAURICE BP-WEEKS, A.C.R.E. CO-EXECUTIVE DIRECTOR:  We certainly support the  folks who are pushing forward the two proposals on the recognition system.   It`s a huge concern and it`s a company that has so much reach and so much  data and being able to surveil in that way. 

 
JIM COCHRANE, RETIRED CPA/AMAZON SHAREHOLDER:  I need to know more about  it, but I`m not adamantly opposed or adamantly —   
ROY:  Amazon (NASDAQ:AMZN) has faced increasing criticism over facial  recognition from civil liberties groups like the ACLU.  


ELIZA PAN, FORMER AMAZON EMPLOYEE/CURRENT SHAREHOLDER:  I think there does  seem to be a recognition that the tech companies need to be held to a  better standard because they haven`t been.  


ROY:  Amazon (NASDAQ:AMZN) says its facial recognition technology is,  quote, a powerful tool for business purposes, but just as importantly for  law enforcement and government agencies, adding new technology should not  be banned or condemned because of its potential misuse.  But it`s not just  Amazon (NASDAQ:AMZN).  Other tech companies including Facebook (NASDAQ:FB),  Twitter and Alphabet also face shareholder proposals on issues like  privacy.  


Industry watchers say the trend marks an inflexion point for all companies.  


VALERIE GRANT, ALLIANCEBERNSTEIN:  Responsible investing has become so  prevalent that I think you`re going to see it across companies of all  market capitalizations, small, mid and large.  


ROY:  Lawmakers are taking notice, as well.  The House just held a hearing  on facial recognition technology and just last week, San Francisco banned  the use of facial recognition technology at city agencies.  
For NIGHTLY BUSINESS REPORT, I`m Aditi Roy, Seattle, Washington.  
(END VIDEOTAPE)


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


Anheuser-Busch was added to the new “best idea” list at Guggenheim  Securities.  The analyst cites its growth outlook and the strong product  pipeline.  The price target $103.  The stock rose 2 percent to $82.62.  
Expedia (NASDAQ:EXPE) was downgraded to hold from buy at Argus.  The  analyst cites slow booking growth at its VRBO unit.  The firm also warns of  increased spending on marketing and technology upgrades.  Shares fell a  fraction to $116.71.


Activision Blizzard (NASDAQ:ATVI) was downgraded to equal from overweight  at Stephens.  The analyst sees near-term risk amid reports of development  issues with its popular “Call of Duty” franchise.  The price target is $52.   The stock was down more than 1 percent to $42.91.  
GRIFFETH:  Still ahead, the so-called Hollywood of the South has a growing  headache.  
(MUSIC)


GRIFFETH:  The European Union has launched an investigation into Google`s  privacy practices.  The watchdog wants to determine whether Google`s  collection of online advertising data breaches that bloc`s rules.  This  comes as many tech companies face heightened regulatory scrutiny around the  world.  


HERERA:  Georgia has become a Hollywood production powerhouse, thanks to  generous tax incentives.  But now, many in the entertainment industry are  threatening to leave because of a new controversial law.  
Here`s Julia Boorstin.  
(BEGIN VIDEOTAPE)


JULIA BOORSTIN, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Georgia has become  one of the biggest production hubs in the country.
(PROTESTERS CHANTING)


BOORSTIN:  But now, its new law banning abortion after a heartbeat is  detected is sparking boycotts from Hollywood that could put that massive  business at risk.  The state`s up to 30 percent tax credit drew over 450  film and TV projects last year, driving over $4.5 billion in wages at a  $9.5 billion economic impact, according to the Georgia governor`s office.  
Recent projects include AMC`s “The Walking Dead,” Netflix`s “Ozarks”, plus  Disney`s “Black Panther” and “Infinity War”.  


GREG BLUESTEIN, ATLANTA JOURNAL-CONSTITUTION:  The direct economic impact  is well into the billions in the state, and it doesn`t just help Metro  Atlanta`s economy, but you also think about the smaller cities all over  Georgia that are home to rural settings and farmland and other areas that  film producers love to use to shoot.  So, it`s sort of diffused impact  throughout the state.  


BOORSTIN:  But now, a number of Hollywood producers and stars say they  won`t work in Georgia with a new law, pressuring the state to repeal it.   Just this week, a new Amazon (NASDAQ:AMZN) show, as well as a Lionsgate  movie starring Kristen Wiig canceled shoots set to start in Georgia.  


Alyssa Milano is leading a petition to boycott the state, drawing support  from a range of Hollywood names including Ben Stiller, Don Cheadle and Alec  Baldwin.  


But it`s complicated.  The Motion Pictures Association of America  representing the studios and some filmmakers argue that taking work from  locals doesn`t effectively fight the state`s laws and just hurts workers.  
Jordan Peal and J.J. Abrams among others pledging to donate fees from  Georgia productions to fight the anti-abortion bill in court.  


BLUESTEIN:  There are studios built and sound stages and editing bays, all  the infrastructure built over the last year or so, they`re saying don`t  abandon Georgia.  Stay and fight.  Donate to abortion rights causes, donate  to political campaigns, but don`t just leave the state.  Stay and fight.  


BOORSTIN:  Now, a California lawmaker is offering tax breaks to productions  relocated with states with restrictive abortion bans, looking to use  Georgia`s controversial law to lure production back to Hollywood`s home  state.  


For NIGHTLY BUSINESS REPORT, I`m Julia Boorstin in Los Angeles.  
(END VIDEOTAPE)


GRIFFETH:  Lowe`s slashes its forecast, and that`s where we begin with  tonight`s “Market Focus”, with the home improvement retailer reporting  earnings below estimates, and it cuts its full-year forecast amid profit  margin pressures.  But same-store sales were above analyst expectations  and, in fact, it outpaced rival Home Depot (NYSE:HD).  Shares of Lowe`s  fell nearly 12 percent today to $97.94.  


VF Corp posted better than expected earnings and revenue due to strong  demand for its North Face clothing line and its Vans footwear.  But the  apparel maker company issued full-year guidance that was below expectations  and that stock was down just about 2 percent as a result to $90.33.  


Advance Auto Parts (NYSE:AAP) beat expectations with its latest results as  same-store sales rose.  The automotive parts retailer also reaffirmed its  full-year guidance.  Shares rose about 3 percent to $166.29.  


HERERA:  Brazilian cosmetics maker Natura Cosmeticos which owns the Body  Shop is now buying Avon, in an all-stock merger valued at more than $1.5  billion and creates the world`s fourth largest cosmetics company.  It also  ends Avon`s run of more than 130 years as an independent company.  Avon  spiked after hours following the news and rose 9 percent in the regular  session, in anticipation of the deal, closing at $3.49.  


Semiconductor maker Analog Devices (NYSE:ADI) beat earnings and revenue  estimates, with the company issued guidance below expectations because of  government restrictions on what it called, quote, a large communications  company, end quote.  Despite the forecast, analog devices rose 1.5 percent  to $101.44.  


Ambarella which makes chips for processing images and video took a hit  today because of trade tensions between the United States and China.  A  Morgan Stanley (NYSE:MS) analyst put out a note saying the company`s  clients that are Chinese video surveillance technology firms may be  blacklisted and banned from buying American products.  Ambarella dropped  more than 11 percent to $39.20.  


We often talk here about the private sector`s space race that`s going on in  the U.S. led by companies like SpaceX and Blue Origin.  But a number of  start-ups are also going on in China.  
Eunice Yoon is in Beijing for us tonight.  
(BEGIN VIDEOTAPE)


EUNICE YOON, NIGHTLY BUSINESS REPORT CORRESPONDENT:  The U.S.-China tech  war isn`t only limited in planet Earth.  China wants to become a leader in  the final frontier, too.  It was only a couple of years ago, when Beijing  unveiled its Made in China 2025 tech development program, the government  introduced a new policy to encourage more private investment in space  activities, a realm that is largely dominated by the military.  


That sparked a wave of space start-ups like the one I`m at now.  This is  LinkSpace.  The company`s founders say they`re creating a link to space and  their focus is building a reusable rocket that can travel to space multiple  times to bring the cost of space flight down.  


So far, they`ve carried out two tests for a sub-orbital rocket which they  believe will be commercially available as early as next year.  They also  hoped to unveil a rocket that can reach orbit, pitting them against  established players like SpaceX.  
This is what the CEO told me.


CHU LONGFEI, LINKSPACE CEO:  Our two recent tests filled a void for us and  for China.  As everyone knows, only a few U.S. firms including SpaceX and  Blue Origin are working on reusable rockets.  But we think the potential is  huge.  


YOON:  The ultimate plan would be to launch shoe-box sized satellites the  way SpaceX and other American rivals can, creating constellation of  satellites to boost communications on Earth for the Internet of Things.   And with the government support, China now has more than 100 startups in  this field.  They get access to state labs, use of launch pads for a fee,  and can swap research with the military.  


Despite the government policies, LinkSpace says that it doesn`t get funding  directly from the government.  It does get some government projects, but  says that most of its money is from private V.C.s.
For NIGHTLY BUSINESS REPORT, I`m Eunice Yoon in Beijing.  
(END VIDEOTAPE)


HERERA:  Coming up, a mega mansion with a major price tag and a look  inside.  
(MUSIC)


GRIFFETH:  Here`s what we`re watching for tomorrow.  We`re going to find  out how many new homes were sold in April.  The FAA will convene a summit  of global aviation regulators to discuss the status of the Boeing (NYSE:BA)  737 MAX, and we`ll get more retail earnings.  Best Buy (NYSE:BBY) and  B.J.`s Wholesale are on tap for tomorrow.  


HERERA:  Ford is ready to deploy robots.  The automaker, along with its  partner Agility Robotics, aims to put a robot in self-driving vans to  deliver mail.  These robots could arrive at your doorstep as early as next  year.  But Ford says that a firm timetable won`t be established until more  research is done.  


GRIFFETH:  Bel Air, California, of course, is known for its pricey real  estate.  But one prominent doctor has taken the mega mansions trend to a  whole new level and some say it`s turning a building boom into a bubble.  
Robert Frank takes us inside.
(BEGIN VIDEOTAPE)


ROBERT FRANK, NIGHTLY BUSINESS REPORT CORRESPONDENT:  As a plastic surgeon  to the stars, Dr. Raj Kanodia has worked on everyone from Kim Kardashian to  Jennifer Aniston.  But his latest project, a 34,000 square foot mansion in  Bel Air, has an uncertain future.  


Kanodia built the home in hopes of flipping it for a big profit.  
DR. RAJ KANODIA, PLASTIC SURGEON:  The beauty of architecture is like the  beauty of the face or a human being.  And so, using that desire to create,  that`s what started me to want to create a house.  


FRANK:   But as it grew in size and cost, Kanodia struggled to find lenders  and investors.  His real estate friends told him he`d made a big mistake.  


KANODIA:  They said, you are way out of your league.  It became more and  more challenging and for me, if I have a vision, I want to fulfill that.  


FRANK:  When it was finished, Kanodia listed it for $180 million.  But like  many high-end communities today, Bel Air has an oversupply of mansions,  many built on specs or speculations to sell.  Prices and sales are falling  and the modern white mansions have become the empty white elephants of the  housing market.  


There are over a dozen homes for sale in L.A. for over $100 million.  The  spec home built right next to Kanodia`s was asking $250 million and just  got a $100 million price cut.


ERNIE CARSWELL, DOUGLAS ELLIMAN:  The ones that has had to drop prices by  dozens of millions or even $100 million, that`s already a disappointment.   But perhaps, it was originally overreaching.  This market we`re entering is  going to shake all of that out.  


KANODIA:  Really beautiful.


FRANK:  Kanodia beams like a proud father as he toured the home`s exotic  gardens, three kitchens, eight bedrooms, state of the art gym and spa, and  infinity pool overlooking the best views in L.A.  


It`s still for sale.  Kanodia says he would consider offers of over $120  million and he will rent it for $1.5 million a month.  If all that fails,  he hopes to live there himself if he can afford it.  


KANODIA:  In Las Vegas term, it`s called all in, like all in times million.   Sometimes you learn as you go along, and yes, it could be a mistake, but in  my heart and in my soul, I think it will all work out.  


FRANK:  For NIGHTLY BUSINESS REPORT, I`m Robert Frank in Bel Air, Los  Angeles.  
(END VIDEOTAPE)


HERERA:  Before we go, let`s take a look at the final — day`s numbers on  Wall Street.  The Dow Jones Industrial Average dropped to 100 points to  25,776.  The Nasdaq fell 34 points and the S&P 500 lost eight.


And that is NIGHTLY BUSINESS REPORT for tonight.  I`m Sue Herera.  Thanks  for joining us.


GRIFFETH:  I`m Bill Griffeth.  Have a great evening.  We`ll see you  tomorrow.  

END
Nightly Business Report transcripts and video are available on-line post  broadcast at http://nbr.com. The program is transcribed by ASC Services II  Media, 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) 2019 CNBC, Inc.


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