Transcript: Nightly Business Report- November 13, 2015

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

TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR: Terror in Paris.
Multiple attacks leave more than three dozen dead in the French capital.
We`ll have a report and discuss these new destabilizing events.

Equities have their worst week since the summer. And oil falls toward
$40 a barrel. We`ll look at the week just passed and look ahead in light
of tonight`s development.

And search for a treatment. The fate of two drugs and one mother`s
hope for her two sons.

All that and more tonight on NIGHTLY BUSINESS REPORT for Friday,
November 13th.

Good evening, everyone.

Paris is a city under siege tonight. Multiple attacks involving
gunfire and explosions across the French capital have left more than three
dozen dead. The situation is still developing and is extremely fluid. The
attacks took place at a Paris restaurant outside the Stade de France soccer
stadium where a France-Germany soccer match was taking place, and at a
theater. There are reports of an ongoing hostage situation at that
location.

This is the second time this year that Paris has been hit by terror
and tonight`s events mark a new dangerous chapter in the war against
terror. It is a chapter with major destabilizing potential for economies
and markets. And those markets are already reacting around the globe.

Joining us now to discuss tonight`s attacks in Paris is John Canally.
He`s an investment strategist and economist for LPL Financial.

John, welcome. Good to have you with us.

JOHN CANALLY, LPL FINANCIAL INVESTMENT STRATEGIST & ECONOMIST: Good
to be here.

MATHISEN: There`s more that we don`t know than we do know at this
hour. And these events are developing. But the one thing we can certainly
say is that this is a new and dangerous turn in the war on terror, one that
can really influence economies and markets not just next week, for months
and years.

CANALLY: Yes, we`ve had a difficult week already in financial
markets. But, of course, this — the scale of this type of event goes far
beyond just financial markets. And what markets want to see is certainty.

And certainly this kind of event really introduces a lot of
uncertainty, and markets are going to be asking, is this just the first of
many of these attacks or are they going to spread to other cities? And, of
course, markets don`t like that uncertainty. So I think for now it`s a
wait and see. But if we go through the next days and weeks and months and
there`s more of these and they`re larger, that can really have a big impact
on both markets and economies.

MATHISEN: This is a lesson yet again and a lesson we have learned at
the attacks at “Charlie Hebdo” earlier this year, in Boston and elsewhere.
This is a lesson that risk takes many, many different forms. Obviously,
there are the more prosaic forms. An earnings miss or whatever. An
economic number that can cause the market to go down. But these kinds of
things which we live with every day can take markets in violent turns very
quickly, can`t they, John?

CANALLY: They definitely can. History will show you that there can
be extremely sharp and swift downward movements in equity markets and all
risk assets when these type of events occur. But history will also show
you, as long as the events are not widespread and impact economic data or
economic activity offer over a wide area, over a long period of time,
markets can and do recover.

So, right now, we just don`t know about to say whether or not this is
just isolated to Paris or it`s European-wide or it`s global. Once markets
can wrap their heads around that, then I think we can understand that this
is just a one or two-day event or it`s a three or four-week event.

MATHISEN: One certainly remembers Boston and the response to that,
the bombing a couple of years ago. Earlier this year, the “Charlie Hebdo”
attacks that left I believe it was 17 dead in Paris. And markets certainly
have to digest this kind of information.

Take us through some of the history of how markets react when
something like this happens. It generally means that people move away from
riskier assets and into more secure assets. Isn`t that true, John?

CANALLY: That`s true over the very short term. If this were to have
happened during the trading day, what you would have seen was a swift move
away from risk assets like equities and within equities to safer havens
like utilities and telecom, and then certainly overall a move from stocks
into bonds. So that`s typically what you see during these type of events.

As events unfold and more news comes in, suggesting that the attack is
a more localized thing, that can reverse. But in this case that might take
a couple days or weeks or months town fold. Typically that`s the pattern
but we just don`t know enough sitting here Friday night to understand
what`s —

MATHISEN: That`s exactly the point on which to close. There is much
more that we don`t know than we do at this hour.

John Canally with LPL Financial — thank you very much.

CANALLY: Thank you.

MATHISEN: Well, as John mentioned, stocks did close out a very rough
week and they ended it on the downside. That, of course, before tonight`s
tragic events in Paris.

Concerns over the economy, the health of the consumer and a slide in
oil prices pressured equities, just as the Federal Reserve sets the table
for a possible interest raise next month. The Dow Jones Industrial Average
fell 202 points to 17,245, NASDAQ off 77, and the S&P 500 was down 22. For
the week, all of the major indexes fell more than 3 percent as you see
right there with the NASDAQ off more than 4 1/4 percent. The blue chip Dow
lost more than 660 points in the past five trading sessions.

Well, oil — that`s another one to watch. It is melting down again.
Domestic crude settled near $40 a barrel, falling more than 8 percent this
week, its biggest weekly loss in more than eight months.

Jackie DeAngelis tells us why oil is sliding, why it`s impacting the
market and what it could mean for your budget.

(BEGIN VIDEOTAPE)

JACKIE DEANGELIS, NIGHTLY BUSINESS REPORT CORRESPONDENT: The
International Energy Agency today declared a world oil glut. A record 3
billion barrels in storage and demand for all that crude will tick down
this year. Earlier this week, the agency said we won`t see $80 oil until
2020. OPEC adding to the chatter, saying its outlook is essentially
unchanged, we`re only three weeks away from the next big meeting in Vienna.

Further pressure coming from a stronger dollar, supported by the
possibility of a Fed rate hike in December and a weak euro. The perfect
storm to send prices under $40 quickly.

KYLE COOPER, IAF ADVISORS: The technicals after an early November
spike have really just kind of plummeted. IEA came out today saying their
inventories that they look at were close to 3 billion barrels and here in
the U.S. when they include the SBR, they jumped back over 2 billion barrels
this week. So, there`s just a lot of supply out there.

DEANGELIS: While lower crude prices take a toll on the equity markets
because the big producers are weighted heavily on the averages, it`s
actually very good for consumers. The national average for a gallon of
regular gas, $2.19, down 25 percent from this time last year, according to
AAA. And $2 is still in sight by the end of the year. Low crude prices
also take heating oil prices down, 40 percent since this time last year.

But traders caution there is some support in the market, in the high
30s. And there are always unforeseen events that could turn this trend
around.

COOPER: If you`re looking at the 37.75 low at the end of August. On
that one meltdown day when just everything was coming unglued. That`s
certainly your next technical stop and the next point that I think a lot of
people will be looking at from a chart perspective.

DEANGELIS: So, absent any catalyst, crude oil prices will have a
rough time rebounding as some thought they would this year.

For NIGHTLY BUSINESS REPORT, I`m Jackie DeAngelis.

(END VIDEOTAPE)

MATHISEN: All right. Let`s turn now to John Kilduff to talk more
about the oil market. He`s the founding founder of Again Capital and a
good friend of NIGHTLY BUSINESS REPORT.

John, always good to see you.

JOHN KILDUFF, AGAIN CAPITAL: My pleasure.

MATHISEN: I wish it took place on a night unlike tonight where there
are still ongoing developments over in Paris. When events like this one,
multiple attacks in Paris, multiple locations with at least three dozen
dead now, how do these kind kinds of events play out in the oil markets in
the ensuing days and weeks historically?

KILDUFF: Well, you have to look at — it depends on the region where
the trouble is, Tyler. So, in this one, it should be a depressing factor
for oil prices because the response by the governments around the world
will likely be one where security is greatly increased, where people may
hunker down. So, economic activity arguably in the West will slow down for
a time as people sort out, is there more danger ahead? Do I need to sort
of shelter in place to a degree, and not go out, not spend money —

MATHISEN: So, the economics chilling effect that often accompanies
these types of events. People go to their home and they don`t go out as
much. Maybe they don`t spend as much. Lower economic —

KILDUFF: They don`t drive as much — they don`t travel —

MATHISEN: They don`t travel as much.

All other things being equal, that would slow the demand for oil.

KILDUFF: That`s correct. And that`s because western targets are
being hit.

Now, the counter to that, or what ensues later, though, Tyler, is what
is the response going to be in the region? If this does end up being
linked to either al Qaeda in the Arabian Peninsula like we`ve seen before
or it is an ISIS-linked attack, if the response is to go into the region in
a much heavier way, into Iraq, into Turkey, if oil assets are going to come
into play, into harm`s way, then obviously that would be a security
premium, inflation factor for oil prices and they would go on a rip higher.

MATHISEN: Is there a strategic asset — you follow a lot of asset
categories. Is there a strategic asset that is more prone to being
affected by terror or geopolitical risk than oil?

KILDUFF: No. I would say absolutely not. Obviously, the
international equity markets will have to sort this out for the factors we
just talked about. But oil can come into the crosshairs. And I`ve been
worried about — not worried but I guess worried that the bombing of the
Russian airplane will get linked to ISIS and that their response will be
very robust again in the region and you have again potentially the kind of
war situations we get in that — in response to these things. And that oil
becomes in the crosshairs as is gets more and more desperate.

MATHISEN: Let`s talk very quickly about what happened this week in
the oil markets. It was a major sell-off, a slide, 8 percent. I`m not
saying it came out of nowhere. But it certainly came. Why?

KILDUFF: Four-letter word, glut. Finally the realization hit this
market, that there`s over 2 billion barrels of all kinds of petroleum
products in the United States and another billion around the world. We`ve
never had this much oil in products, gasoline, in storage before. And so –
– and there`s more coming at us every day, there`s no end to the
overproduction. This market is out of balance and it is not coming close
to being back in balance.

MATHISEN: Supply and demand, the demand is still there reasonably
speaking but the supply has —

KILDUFF: Overwhelming, Tyler.

MATHISEN: John, thank you very much.

KILDUFF: Thank you.

MATHISEN: John Kilduff with Again Capital.

Well, the decline in oil is one of the reasons why price increases
across the economy have been so muted lately. The producer price index,
which measures the prices companies receive for goods and services at the
wholesale level, fell 0.4 percent in October. That`s the second straight
month of declines. Excluding food and energy, so-called core prices also
fell.

Well, consumers spent less than expected in October. Retail sales
rose 0.1 percent last month. And that follows slow spending over the
summer and raises concerns about the upcoming holiday shopping season.
Consumer spending accounts for more than 2/3 of economic output.

But as Bob Pisani tells us, money is being spent, just not necessarily
at the usual places.

(BEGIN VIDEOTAPE)

BOB PISANI, NIGHTLY BUSINESS REPORT CORRESPONDENT: New 52-week lows
everywhere in retailers today, but don`t miss the key story. Consumers are
buying. They`re just not buying at department stores and some apparel
places.

You can see this in the October retail sales report, online sales up
over 7 percent, auto dealers up almost 7 percent as well. Furniture sales
up 5 percent and people were drinking and eating up more. Those sales were
up over 5 percent. And sales at home improvement centers were up over 4
percent.

And department store sales, just a measly 0.5 percent. See, they`re
not shopping at department stores.

And by the way, some customers are buying apparel. Younger consumers
are flocking to fashion stores like H&M, Forever 21, Zara, and Uniqlo, but
none of them are publicly traded in the United States.

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

(END VIDEOTAPE)

MATHISEN: And today, JCPenney disappointed investors, despite
reporting sales growth that beat expectations. Sales fell sharply for
Penney`s but that was nothing compared with some retailers several of whom
expressed doubts about the holiday shopping season in recent days. Take
Nordstrom (NYSE:JWN), its shares cratered nearly 15 percent today, after it
cut its profit and sales forecast, something we told you about last night.

Still ahead, how to invest in this uncertain market. Our market
monitor has some ideas.

(MUSIC)

MATHISEN: Shares of Volkswagen brand cars fell more than 5 percent in
October. That`s the first full month following revelations the automaker
cheated on emissions tests. The automaker`s head of sales said the company
is not only feeling the impact of the scandal but also weakness in some
markets. Sales in Russia fell 26 percent and dropped 50 percent in Brazil.

Well, the fight over fantasy sports is escalating. FanDuel and
DraftKings, the two largest companies in this fast-growing industry, are
filing lawsuits of their own in an effort to keep their operations running
in the state of New York.

Eric Chemi reports from New York, where fantasy sports supporters
staged a rally today.

(BEGIN VIDEOTAPE)

(CHANTING)

ERIC CHEMI, NIGHTLY BUSINESS REPORT CORRESPONDENT: Fantasy sports are
fighting back in real-life court. Today, daily fantasy leaders FanDuel and
DraftKings filed separate lawsuits against New York Attorney General Eric
Schneiderman hoping to keep their games running in the state despite the
office`s cease and desist order.

Meanwhile, FanDuel organizers rallied in front of Schneiderman`s
office to make sure their voices were heard.

PROTESTER: I just don`t think it should be a priority of Schneiderman
when there are so many other issues in the city and the state.

CHEMI: They`re fighting over a central question of whether this game
is gambling. FanDuel claims it`s a game of skill.

TOM GRIFFITHS, FANDUEL CO-FOUNDER: Hundreds of thousands of people
love to play every week. It`s a harmless pastime that people love, as you
can see from the hundreds of people out here. So we don`t want it to be
shut down. We`re going to champion our cause.

CHEMI: But regulators like Schneiderman are focused on the fact that
this is sports betting, skill or not, and gambling law in the state must be
respected.

ERIC SCHNEIDERMAN, NEW YORK ATTORNEY GENERAL: Our state constitution
is pretty clear. It talks about bookmaking and the lotteries and all other
forms of gambling are prohibited unless you have a specific exemption. And
there simply is no exemption for daily online sports gambling.

CHEMI: Both might be right. It can be a game of skill and the
gambling. And that question may not matter until the courts decide.

In the meantime, FanDuel and DraftKings will keep accepting bets from
New Yorkers forcing the courts to act.

One thing to watch for: some payment processors have already announced
they will not accept New York payments during this murky legal situation.
If others like PayPal bailed too, that might mean more damage than any
court action.

For NIGHTLY BUSINESS REPORT, I`m Eric Chemi in New York.

(END VIDEOTAPE)

MATHISEN: And late today, FanDuel said it will start the process of
limiting access to users in New York state. Comcast (NASDAQ:CMCSA)
(NYSE:CCS) Ventures and NBC sports ventures have stakes in FanDuel.
Comcast (NASDAQ:CMCSA) (NYSE:CCS) is the parent of CNBC, which produces
this program.

Well, a strong dollar overshadows Tyco`s profit report and that is
where we begin tonight`s “Market Focus”.

The company saw its revenue fall because of that negative foreign
currency impact. The maker of fire protection and security systems says it
still sees pockets of strength globally. Shares slipped more than 3
percent to $35.31.

Perrigo (NASDAQ:PRGO) shareholders rejected Mylan`s hostile $26
billion takeover bid. The failed deal ends a months-long back and forth
between those generic drugmakers. Mylan (NASDAQ:MYL) up 13 percent today
to $48.78. Perrigo (NASDAQ:PRGO) off 6 percent to $146.90.

Springleaf Holdings, a personal and auto loan company, says it has
reached a settlement with the Department of Justice that will let it go
ahead with an acquisition of one main financial. The Justice Department
says Springleaf will have to divest more than 120 branches so that it can
proceed with the purchase. Shares there up more than 11 percent on this
otherwise down day. They finished at $49.23.

Staples (NASDAQ:SPLS) and Office Depot (NYSE:ODP) are transferring —
offering to transfer $600 million in corporate contracts to a wholesaler.
This is according to Dow Jones. The move is an effort by the firms to
persuade the Federal Trade Commission to grant the two companies antitrust
approval so they can merge.

Shares of Office Depot (NYSE:ODP) rose a fraction to $7.52. Staples
(NASDAQ:SPLS) down more than 1 percent to $12.61.

So, what should investors know when it comes to today`s uncertain
marketplace?

Our market monitor guest has some ideas. Erin Gibbs joins us. She`s
equity chief investment officer at S&P capital IQ.

Erin, nice to have you here in person.

ERIN GIBBS, S&P CAPITAL IQ EQUITY CHIEF INVESTMENT OFFICER: Thank
you.

MATHISEN: I don`t know that we`ve ever sat in person. I`ve met you
over the television but not here.

Let`s begin tonight with the unfolding developments in Paris.

GIBBS: Yes.

MATHISEN: We don`t — what we know is much smaller than what we don`t
know about the origin, who will claim responsibility for this, indeed the
death toll. We do know that more than three dozen have perished so far.

How does this change your investing thesis, if it does, over the next
six months?

GIBBS: Well, as you said, it`s very early, but right now, typically
these types of very scary types of threats often don`t have that much of a
long-term impact on the stock market and our investing. It does seem to be
very focused. So, I don`t see any really immediate impact.

We can certainly see more volatility in the markets over the next
coming weeks just because the fear gauge is a little higher. People might
be a little quicker to move out. But from an economic standpoint, it
really doesn`t have a big impact overall.

MATHISEN: John Kilduff, who was just here in our prior segment, said
that he sees it a different way. He thinks that in the wake of events like
this, people tend to do less. They stay home more. They travel less.
They may feel a little more protective of their assets and take a more
defensive posture.

Do you see it that way? I guess not.

GIBBS: It tends to flesh out very quickly. We tend to have — for me
at least, we tend to have fairly short-term memories. Particularly when
it`s something that`s so far off as in Paris versus if it was much more
localized within the U.S. Like I said, you could see more volatility and
you could see people scaling back, but particularly if this tends to be one
isolated incident, we don`t see more incidents going forward, it just all
happens tonight, I could certainly see this being flushed out within a
couple of weeks.

And you see that with wars too. It tends to just take a few weeks and
people tend to go back to their normal pattern.

MATHISEN: Let`s take a look at quickly three of the stocks that you
like right now. These are very consumer-facing companies, leading with
Apple (NASDAQ:AAPL), which has had a rough week.

GIBBS: It has. And so I recommend it as a really good value, high-
quality stock. Right now, we`re expecting about 7 percent earnings growth
over the next year. So, if the price just stays on track of where its
earnings growth is, you could see that 7 percent appreciation. On top of
the fact that it`s actually trading at a pretty big discount to where we`ve
been seeing it over the past three years. So, between the discount and
good decent earnings growth, I could see this stock easily going up another
10 percent to 15 percent.

MATHISEN: Quick thought on Walt Disney (NYSE:DIS). Who doesn`t like
Disney (NYSE:DIS)?

GIBBS: Who doesn`t like Disney (NYSE:DIS)? Disney (NYSE:DIS) is one
of these great growth stories. One, again, another high-quality long-term
type of holding. But one of the things that we`re really seeing potential
growth for is they`ve acquired “Star Wars” as well as Marvel`s Avengers.

And it`s not just the revenues from those films per se but the
products relating to the films, the toys, the clothes. We saw a huge —

MATHISEN: The merch.

GIBBS: The merchandise. So, we saw just an enormous amount of
revenue attached to their “Frozen” franchise, and we see the potential,
particularly with the “Star Wars,” going forward.

MATHISEN: Erin, we have to leave it there on this very busy night. I
should point out that your third pick is Footlocker (NYSE:FL), and you say
it`s not just men`s athletic shoes anymore.

GIBBS: That`s right.

MATHISEN: Thank you very much.

GIBBS: Thank you.

MATHISEN: Appreciate you being with us this evening.

Coming up, a critical few weeks lie ahead for possible treatment of a
devastating disease. One family`s inspiring story when we come back.

(MUSIC)

MATHISEN: In the next couple of weeks two drugs that combat a rare
and fatal form of muscular dystrophy will come before the Food and Drug
Administration for review.

Meg Tirrell reports on what could be a watershed moment for patients,
families, and the biotech industry.

(BEGIN VIDEOTAPE)

MEG TIRRELL, NIGHTLY BUSINESS REPORT CORRESPONDENT: It`s been 13
years since Jenn McNary`s oldest son, Austin, was diagnosed with a fatal
disease that had no cure.

JENN MCNARY, AUSTIN LECLAIRE`S MOTHER: It was a pretty hopeless
feeling. I remember thinking one of the first questions was do they need
some sort of infusion, do they need some sort of transfusion, do they need
some chemotherapy? Like trying to they`ve pediatric diseases, what do we
do?

And I was really jealous of all the families at Hitchcock that were
receiving chemotherapy that day. We had to walk by the chemo clinic. And
I remember thinking like, you know, that was a really lucky diagnosis of
cancer because at least there`s something you can do.

TIRRELL: Austin has Duchenne muscular dystrophy, a rare genetic
condition that causes the muscles to decline over time. Kids usually lose
the ability to walk by their teens and often don`t live to their 30th
birthdays.

Austin, now 16, gets around in a power wheelchair. His younger
brother Max was diagnosed with Duchenne as well. At 13, Max is still
walking, a fact Jenn credits to an experimental drug called Eteplirsen.

MCNARY: Max was the first guy in this trial. You know, he`s sort of
a little medical miracle, and he might be the first of this generation to
beat the disease.

TIRRELL: Eteplirsen is made by Boston are biotech company Sarepta.
It was initially tested in just 12 patients. A similar drug called
Drisapersen from BioMarin has been tested and more. But after promising
early results, it`s failed to show improvement in a large late stage study.

Both are now approaching review by advisers to the FDA, BioMarin later
this month and Sarepta later this next year, after a long road filled with
setbacks that threatened to derail both programs.

BRIAN SKORNEY, ROBERT W. BAIRD SENIOR RESEARCH ANALYST: The slow
process is the FDA wanting to do right by the patient advocates and
providing a drug that has the promise of a clinical benefit with minimal
safety risks. But, you know, I think they`re very much keeping in mind at
the same point, they are the gatekeepers of drugs. They are not meant to
just approve snake oil. So, they want to make sure they`re an proving
drugs that clearly don`t have an effect or have a very high chance of
failing in a confirmatory study.

TIRRELL: The drugs work in a very similar way using a technology
called “exon-skipping”. It`s a way of circumventing the genetic blip that
causes the body not to produce a crucial protein called dystrophin.

And in a disease as severe as Duchenne, with no effective treatments
available, you might wonder why there`s any doubt these drugs get approved.

Robert W. Baird analyst Brian Skorney says it comes down to evidence.

SKORNEY: In contrast to what we`re used to seeing in an approved
drug, they`re pretty thin numbers.

TIRRELL: As for Jenn McNary`s older son Austin, he since started
taking Eteplirsen as well, as part of a larger set of studies conducted by
Sarepta.

And Jenn said she started to see improvements in his abilities but
accepts there are still unknowns about the drugs.

MCNARY: We`re going to have answers inside of ten years, whether it`s
really effective or whether it`s just sort of effective, whether it`s
effective in only ten kids or whether it`s effective in the whole
population, you know? So the answers will happen. I think the risk is not
approving it and having kids decline and finding out five years from now
that the drug was as good as we thought it was and kids died while they
were waiting for it.

AUSTIN LECLAIRE: Thank you.

TIRELL: For NIGHTLY BUSINESS REPORT, I`m Meg Tirrell.

(END VIDEOTAPE)

MATHISEN: And to recap our top and still developing story, Paris came
under siege tonight. There were multiple attacks involving gunfire and
explosions, with dozens reported dead and scores injured. France`s
military is being deployed throughout the city, and the French president
says the country`s borders will be closed.

The equity futures market coming under pressure because of the events,
pointing to a potentially volatile day when the markets reopen on Monday.

And that is a very busy NIGHTLY BUSINESS REPORT for tonight. I`m
Tyler Mathisen. Thanks for watching. We`ll see you Monday.

END

Nightly Business Report transcripts and video are available on-line post
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on Nightly Business Report is not and should not be considered as
investment advice. (c) 2015 CNBC, Inc.

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