Transcript: Nightly Business Report- December 4, 2015

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

SUE HERERA, NIGHTLY BUSINESS REPORT ANCHOR: Stocks surge. A solid
jobs report and the potential for further stimulus from the European
Central Bank sent the major indices up more than 2 percent.

Speedy delivery. Amazon (NASDAQ:AMZN) is buying thousands of trucks,
taking on some of the biggest names in transportation, to get packages to
your doorstep fast.

Puppy love. Meet the entrepreneur who left Wall Street, had a bright
idea, and created a successful business pampering pets.

All that and more tonight on NIGHTLY BUSINESS REPORT for Friday,
December 4th.

Good evening, everyone, and welcome. I`m Sue Herera. Tyler Mathisen
is off tonight.

American businesses are hiring. The U.S. economy recorded another
month of strong job growth. Non-farm payrolls for November increased
211,000 while the unemployment rate remains steady at 5 percent.

Even wages are showing signs of picking up. Job growth numbers for
September and October were also revised upwards, increasing the monthly
average to 218,000 for the last three months.

And investors like what they saw. But they also liked what they
heard from ECB president Mario Draghi, who said the bank was open to
further stimulus. That sent the markets surging. The Dow Jones Industrial
Average up 369 points to 17,847. The NASDAQ gained 104. The S&P 500 rose
42, its biggest gain in three months.

Hampton Pearson has more on today`s solid jobs numbers.

(BEGIN VIDEOTAPE)

HAMPTON PEARSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: Led by big
gains at good-paying housing construction jobs, employers delivered another
solid month of hiring in November, more Americans looking for jobs and
finding them, even helped boost the labor force participation rate.

JEFF ROSENBERG: The strength of the participation rate and the
strength of the average over time at 218, I think was the number. That
means that in the future, wages are rising.

PEARSON: Eating and drinking places continue to be engines of job
growth, adding 32,000 new employees last month and more than 374,000 over
the year.

UNIDENTIFIED MALE: Does that make it worse?

PEARSON: Second only to healthcare.

In Arlington, Virginia, Texas Jack`s is part of the restaurant boom
in this upscale neighborhood just across the Potomac River from Washington,
D.C. The owner says there were hundreds of applicants for the 60 workers
he plans to hire. The real challenge was finding qualified workers.

STEVE ROBERTS, TEXAS JACKS` BARBECUE OWNER: Not enough qualified
people that had relevant experience, you know, for us. A lot of young, you
know, people looking for work but just really no experience that was
relevant to us.

PEARSON: Among the new hires, Clay Hollenkamp. What he`ll make here
as a manager will allow him to start juggling several part-time jobs.

CLAY HOLLENKAMP, TEXAS JACK`S BARBECUE NEW HIRE: This job at Texas
Jack`s definitely pays a little more than my last job. And it pays me
enough to where I can only — I can afford to have just one job as opposed
to having several jobs, which is what I had before, was several. So,
that`s nice.

PEARSON: Elsewhere, low oil prices and weak growth overseas
triggered job losses among oil drillers, the mining industry, and
manufacturing. News today of a widening trade deficit with exports at a
three-year low won`t help reverse those trends. Construction and
infrastructure jobs could get an even bigger boost now that Congress has
passed a new five-year $300 billion highway bill.

For NIGHTLY BUSINESS REPORT, I`m Hampton Pearson in Washington.

(END VIDEOTAPE)

HERERA: And so, will the labor market stay on track?

Josh Feinman joins us now with more analysis on the labor market and
what it will mean for the Fed. He is chief economist at Deutsche Asset and
Wealth Management.

Good to see you again, Josh.

JOSHUA FEINMAN, DEUTSCHE ASSET & WEALTH MANAGEMENT CHIEF ECONOMIST:
Good to be here, sue.

HERERA: The market seemed to like the report certainly. Did you
find any fault with it at all?

FEINMAN: Not really. I think it`s a pretty solid report. Suggests
good momentum in the economy and the labor market, and the healing in the
labor market conditions has been going on for a number of years seems to be
continuing. Good broad-based hiring and good momentum.

HERERA: There also seemed to be a little wage growth which I`m sure
the Fed is watching very carefully because they`re looking for a little
inflation to creep in here.

FEINMAN: Absolutely. Yes. We`re starting to see some early signs
of that. It`s still pretty tentative, still small, but the arrow seems to
be pointing in the right direction. You`re absolutely right. That`s
certainly what the Fed is looking for because we`re going to need to see
wages pick up to a somewhat higher rate of growth and sustain that to get
inflation back up to the Fed`s target. I think the Fed feels that that
will happen as the labor market continues to heal and these early signs of
it are certainly encouraging.

HERERA: So, are you one that falls into the camp that with this
latest report, with that creep up in wages that we are looking in a couple
of weeks` time at the first move on interest rates by the Fed?

FEINMAN: Yes. I think we are. I think it`s been signaled pretty
clearly from the Fed. The data corroborate that.

And, you know, it`s — ironically, it will be almost the seventh
anniversary of the zero interest rate policy. But I think that there`s
enough positive signs in the economy to make the Fed feel that we can
finally lift up from zero. But I think they`ll also remind us that the
trajectory of rate increases beyond that, while obviously dependent on how
the economy performs, probably going to be pretty shallow.

HERERA: One of the issues has been in the past the participation
rate — the number of workers who were looking for jobs, participating in
the workforce. That seems to be healing a little bit, for lack of a better
word.

FEINMAN: A little bit. Keep in mind we have two trends here. We
have the demographic effect, the aging population, the retirement of the
baby boomers. That puts downward pressure on the participation rate.
That`s going to continue. But you also have the cyclical piece, which is
if job opportunities improve, it might lure some more people back in.

So, these two forces kind of moving in opposite directions at least
in the most recent month it looked like the latter force won out and
participation picked up a little bit.

HERERA: All right. Josh, thank you. Have a great weekend. Good to
see you again.

FEINMAN: You, too. Thanks.

HERERA: Josh Feinman with Deutsche Asset and Wealth Management.

The world`s largest oil producers decided to keep pumping at current
production levels despite the glut of crude worldwide. That sent the price
of oil nearly 3 percent lower to settle back below $40 a barrel.

Steve Sedgwick reports from the OPEC meeting in Vienna.

(BEGIN VIDEOTAPE)

STEVE SEDGWICK, NIGHTLY BUSINESS REPORT CORRESPONDENT: It`s been an
extraordinary day in Vienna at the OPEC meeting of oil ministers. I spoke
to a whole host of them and I`m not sure any of them are happy with the
outcome.

Before today, there was an official production level of 30 million
barrels a day with a de facto real level of 31.5 million barrels a day.
Now and in the OPEC communique, there is no mention of what the real level
is from now on. They say they will just continue the current policy, we
will produce what we are producing, we will monitor events and we hope for
more dialogue with non-OPEC members as well.

And that`s a metaphor for the fact that they`ve been unable to get a
deal with Russia and other non-OPEC producers to cut production and
stabilize price. Whether that means prices continue to fall in the overall
market remains to be seen, but it does mean somewhat of a free-for-all for
the OPEC members who can now pretty much produce what they like and not
have to stick to any form of quota.

The OPEC president did say to me that they`ve got a meeting in June
2016, but it was highly possible if prices fell that they would have to
have another meeting before then. But certainly an historic day here in
Vienna as OPEC just almost gives up the ghost on sticking to any form of
production level.

This is Steve Sedgwick for NIGHTLY BUSINESS REPORT in Vienna.

(END VIDEOTAPE)

HERERA: New developments in San Bernardino, California, where the
FBI is now investigating the shootings as an act of terror.

Jane Wells is there with the details for us. Good evening, Jane.

JANE WELLS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Hi, Sue.

Here two days after the slaughter, the street is still closed off.
So is the building. People have not been able to come get their cars,
which have been parked there since Wednesday morning. A day of a whole lot
of news coming out as the FBI officially takes control of this
investigation for this reason.

(BEGIN VIDEO CLIP)

DAVID BOWDICH, FBI ASSISTANT DIRECTOR: We are now investigating
these horrific acts as an act of terrorism.

(END VIDEO CLIP)

WELLS: The two terrorists, Syed Farook and his wife, Tashfeen Malik,
had an arsenal of weapons and ammunition. And shortly before they murdered
14 people, police say and Facebook (NASDAQ:FB) confirms Malik posted on
Facebook (NASDAQ:FB) her allegiance to the leader of ISIS. But were they
directed by ISIS or merely inspired by it?

(BEGIN VIDEO CLIP)

JAMES COMEY, FBI DIRECTOR: So far, we have no indication that these
killers are part of an organized larger group or form part of a cell.
There`s no indication that they are part of a network.

(END VIDEO CLIP)

WELLS: Reporters like NBC`s Kerry Sanders got inside the couple`s
home today once it had been cleared by the FBI. But in the home
investigators say they found a veritable bomb-making factory and evidence
that the suspects tried to destroy including two crushed cell phones which
the FBI says it still hopes to be able to extract data from.

The government of Pakistan, where Tashfeen Malik was born and where
she was reportedly studying to be a pharmacist, has expressed its
condolences and it`s helping U.S. investigators.

And we now know now the names of all 14 who died, eight men, six
women. The oldest was 60. The youngest 26 years old.

Authorities say there are currently no more credible threats, no
gunmen, no more suspects under arrest, at least for now. And, Sue, right
now on this same day in another part of southern California they are having
a funeral for Nohemi Gonzalez, the Cal State Long Beach student who was
murdered in the Paris terror attack.

Back to you.

HERERA: It`s been a very tough couple of weeks, Jane. Jane, thank
you very much. Jane Wells in San Bernardino, California.

So still ahead, with the FBI now investigating the mass shootings as
an act of terror, why did stocks soar today? We`ll talk about that. But
first a look at the performance of the major indexes this week.

(MUSIC)

HERERA: 2015 is the biggest year for mergers ever. According to
Dialogic (NASDAQ:DLGC), a number of smaller takeovers announced this week
pushed global M&A volume to $4.3 trillion. The previous record occurred
back in 2007.

All right. Let`s turn to our market monitor tonight for more on
today`s stock market rally and the stocks that he`s recommending to
investors. This is his first time joining us on the program. His name is
Peter Tuz. He is president of the Chase Investment Counsel.

Welcome, Peter. Nice to have you here.

PETER TUZ, CHASE INVESTMENT COUNSEL PRESIDENT: Hi, Sue. How are
you?

HERERA: I`m good, thank you.

You know, it`s such a curious day because we`ve had so much
volatility in the stock market. Yet we had this link to terror in the San
Bernardino shootings this week and we had a very, very strong rally in
stocks. To a lot of people that doesn`t make sense.

What do you think?

TUZ: It doesn`t make sense. You`re right. You`ve got to remember,
though, today`s market pretty much offset the drop we had yesterday. And
while the shootings in San Bernardino are terrible and a tragic event and
our hearts go out to everybody affected, I think until there`s a pattern
it`s viewed as a one-off event and the market seems to look back — look
past it at what the economy`s going to do.

HERERA: Let`s talk about your investment strategy. You`re a growth
investor. So you`re looking for companies and stocks with earnings growth
and the ability to deploy cash. Martin Marietta Materials (NYSE:MLM) is on
the list. Why do you like that particular stock?

TUZ: Well, as your reporter mentioned a few minutes ago, Congress
just approved a massive infrastructure bill that will spend billions on
highway construction throughout the United States. Martin Marietta
Materials (NYSE:MLM) is one of the key beneficiaries of that highway
building. They should have 50 percent earnings growth between this year
and next year, and selling for 20 times earnings.

In addition, they have a massive share repurchase plan to take their
own internally generated capital and buyback roughly 20 percent of their
outstanding shares.

HERERA: Next, it`s to the home front, home builders in particular.
NVR (NYSE:NVR) Incorporated. Why do you like it?

TUZ: Yes, NVR (NYSE:NVR) is a company based in Reston, Virginia,
does probably 50 percent of its business in northern Virginia and the
Maryland area. And you know, housing is in a sweet spot of a cycle, we
think, for the next two or three years. Even with a small rate hike in the
next couple of weeks.

The company delivered about 3,700 homes in the past quarter, has a
backlog of 7,000, 8,000 homes to deliver over the next six months or so.
So, we think you`re going to get, again, very good earnings growth for the
company. And it`s selling for a reasonable price.

HERERA: All right. Very quickly, Blackhawk Network Holdings.

TUZ: Yes. Gift cards, go into your grocery store and look at the
rack of iTunes cards, Amazon (NASDAQ:AMZN) cards, Home Depot (NYSE:HD)
cards —

HERERA: I did that today.

TUZ: And that`s Blackhawk for you. And I think they`re the
Christmas gift of choice for many people these days.

HERERA: All right. Peter, nice to have you with us. We`ll have you
back very soon.

TUZ: Thank you, Sue.

HERERA: Peter Tuz with Chase Investment Counsel.

Some more bad E. coli news for Chipotle, and that is where we begin
tonight`s “Market Focus”.

The chain said the recent outbreak will cut deeply into its sales and
earnings for the current quarter. This as the Centers for Disease Control
and Prevention says the outbreak has expanded to nine states with a total
of 52 reported illnesses. The shares plunged initially after the close.
During the regular session, shares fell just a fraction to $561.20.

Norfolk Southern (NYSE:SO) rejected an unsolicited $28 billion
takeover offer by Canadian Pacific. Norfolk says that the bid undervalues
its firm. And the chances of achieving regulatory approval is too low.
Norfolk Southern (NYSE:SO) fell 1 percent to $92.05. Canadian Pacific fell
4 1/2 percent to $134.49.

An update now on that Avon report we told you about last night. The
cosmetics company responded to the activist Barrington Capital after that
firm launched a public campaign against Avon to turn its business around.
Avon pointed to actions that it has taken to drive growth. The shares were
nearly 6 percent higher to $4.22.

Amgen (NASDAQ:AMGN) and Merck (NYSE:MRK) are teaming up to conduct
two clinical trials. The tests will evaluate a class of drugs that uses
the body`s immune system to fight cancer. Amgen (NASDAQ:AMGN) rose more
than 4 percent to $161.43. Merck (NYSE:MRK) was 2 percent higher to
$53.64.

Well, forget drones, for now anyway. Amazon (NASDAQ:AMZN) wants to
deliver your packages the old-fashioned way, by truck. But they won`t be
using any old trucking company to get your packages where they need to go.

Morgan Brennan takes a look at the company`s new venture into the
delivery game.

(BEGIN VIDEOTAPE)

MORGAN BRENNAN, NIGHTLY BUSINESS REPORT CORRESPONDENT: Amazon
(NASDAQ:AMZN) is going the extra mile, unveiling its new trucking fleet at
an event in Chicago earlier today, a fleet of thousands of branded semi
trucks that will be used to haul goods between the e-commerce giant`s
warehouses, fulfillment centers and sorting hubs. The trailers or
containers attached to the vehicles will be owned by Amazon (NASDAQ:AMZN)
and transported by third-party operators that own their own tractors.

The trucks will deliver orders around the country, and Amazon
(NASDAQ:AMZN) says it`s doing this to help fulfill demand since package
volumes are, quote, “increasing dramatically.” It`s the latest step in
Amazon`s quest to control its supply chain and build out its own
transportation network. A strategy meant to help rein in costs, which grew
31 percent last year and outpaced revenue. Analysts say this is especially
true during the peak holiday season.

DONALD BROUGHTON, AVONDALE PARTNERS: By having its own fleet, you
can make the trucks go from where you want them to where you want them,
paying just the cost of the truck and the driver and not necessarily having
to pay a market premium to have availability of trucks around the holidays
especially.

BRENNAN: The company has been experimenting with everything from its
own same-day deliveries to drones, a lot of focus on the so-called “Last
Mile”. But analysts say this initiative addresses another piece of the
process, similar to those branded big rigs you see on the highway for
retailers like Walmart.

BROUGHTON: If you look at what their annual sales are, they`re
purchasing $110 billion this year. Walmart`s $550 billion. Walmart has
6,000 trucks. At times it`s had more than that. Large retailers tend to
build out their own distribution infrastructure, at least part of it.

BRENNAN: This could impact major trucking fleets like Warner
Enterprises, Covenant Transportation, Swift Transportation, and J.B. Hunt.

But what it will not change is how individual packages ultimately end
up on doorsteps. That will continue to be done, at least for now, by UPS,
FedEx (NYSE:FDX), and the U.S. Postal Service, which actually handles about
70 percent of those volumes.

For NIGHTLY BUSINESS REPORT, I`m Morgan Brennan.

(END VIDEOTAPE)

HERERA: From Amazon (NASDAQ:AMZN) to the number one seller of
Christmas trees in the country, Home Depot (NYSE:HD). And this weekend is
typically a big one for sales.

Courtney Reagan reports from one of the retailer`s partner farms in
Jefferson, North Carolina.

(BEGIN VIDEOTAPE)

COURTNEY REAGAN, NIGHTLY BUSINESS REPORT CORRESPONDENT: Christmas is
a year-round business for the four generations of the Sexton family. More
than 1.5 million Christmas trees are grown on their 2,000-acre North
Carolina farm.

GREG SEXTON, SEXTON FARMS PRESIDENT: We have to shear the trees
every year, and we have to clip the tops one by one. No machines or
anything. It`s all by hand.

REAGAN: Sexton Farms is one of the roughly two dozen family-owned
American farms supplying Christmas trees to Home Depot (NYSE:HD), a 20-
plus-year business relationship.

According to the National Christmas Tree Association, Americans
bought more than 26 million live trees last year, twice the number of
artificial ones. And more are bought at chain retailers like Home Depot
(NYSE:HD) and Lowe`s than anywhere else.

FREDDY LANG, HOME DEPOT LIVE GOODS MERCHANT: We`re the number one
seller of Christmas trees in the country. Last year, we sold about 2.8
million trees, which is a lot of trees. And we expect to surpass 3 million
trees this year.

REAGAN: It takes just two days or less between the time that the
trees are harvested here at Sexton farms in the Blue Ridge Mountains before
they`re for sale in Home Depot (NYSE:HD) stores between North Carolina and
South Florida.

And live Christmas trees are just part of Home Depot`s quest to
capitalize on all things festive. In the past decade, its holiday
merchandise assortment has grown fivefold to more than 4,500 products. And
while Home Depot`s big season is the spring, holiday merchandise is
critical to success in the fourth quarter.

KELIE CHARLES, HOME DEPOT HOLIDAY MERCHANT: In 2014, for example, we
outpaced the company`s fourth quarter comps. We can move the needle for
the entire company.

REAGAN: A holiday wish Home Depot (NYSE:HD) is pining for this
season too.

For NIGHTLY BUSINESS REPORT, I`m Courtney Reagan in Jefferson, North
Carolina.

(END VIDEOTAPE)

HERERA: Coming up, meet the former power attorney who took her love
of pets and found a successful second career. It`s this month`s “Bright
Idea”, next.

(MUSIC)

HERERA: Here`s a look at what to watch for next week — a read of
inflation with the producer price index. We`ll have the retail sales
report from November and also on the data front, the consumer sentiment
report is out. And that is what to watch for next week.

The American Pet Products Association projects overall spending in
the industry to top $60 billion this year. And the fastest-growing segment
within the industry is pet services like boarding and grooming.

But as Tyler Mathisen tells us, it was more out of a love for dogs
than money that one former lawyer got the bright idea to buy a doggie
daycare center that was getting a little rough around the edges.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Who`s happy to go to work? You are.

TYLER MATHISEN, NIGHTLY BUSINESS REPORT: It`s not unusual to find a
dog at the office these days. But Tania Isenstein`s story is hardly the
norm.

A lifelong dog lover and career lawyer, Isenstein gave up a high-
paying job at Goldman Sachs (NYSE:GS) well into six figures to buy Camp
Canine, a doggie daycare center, back in 2012. Sounds crazy, right?

TANIA ISENSTEIN, CAMP CANINE “TOP DOG”: All my friends looked at me
and said that. My parents looked at me and said that. Everybody I knew
thought I was pretty nuts for doing this.

MATHISEN: Before Isenstein bought it, the business had become, well,
dog-eared. It was in a steep decline.

ISENSTEIN: I`ll admit I didn`t read the yelp reviews of this place
before I took it over. And when I read them afterwards, I was horrified.

MATHISEN: To fix it she aimed to offer the best possible customer
service. But training and retaining the kind of employees who can learn
things like how to recognize when a dog needs help, well, it`s no easy
task.

UNIDENTIFIED FEMALE: She played all day long.

MATHISEN: The one thing Isenstein changed is the starting pay, now a
couple of bucks above the minimum wage.

ISENSTEIN: This is not a minimum wage job. You`re caring for living
beings, right? If you care about your employees, I find that they care
back and they will care more about your business as well.

MATHISEN: Eisenstein says it`s a small price to pay for the kind of
love her staff is. From food prep to high-end grooming, even one-on-one
walks in central park, sometimes ending with a hot dog snack. And the
business has turned around, going from about 40 dogs a day to 100. The
staff has grown from 8 to 35. And revenues have doubled in three years to
well over a million dollars a year. The dogs get room to run inside a
generous for Manhattan 5,000-square-foot rental space. She`s put about a
quarter of a million dollars into renovations when she took over.

ISENSTEIN: The floor alone was approximately $75,000.

MATHISEN: Companies like camp Bow Wow and Dogtopia have built
multimillion-dollar businesses with hundreds of franchises. But Isenstein
says that`s not for her.

ISENSTEIN: Franchising to me, it takes the love out of it. You
know, I spent a long time in a career that I did not love. And this means
a lot to me, and I don`t want to sell it.

MATHISEN: Being on Manhattan`s affluent dog-rich upper west side
hasn`t hurt either. Eisenstein counts entertainer Bernadette Peters among
her all-star clientele. There was even a guest spot on TV doing makeovers
for rescue dogs, a pet project of sorts. One of Isenstein`s dogs, Nacho,
is a rescue.

So far, about 75 rescue animals have made a foster home stop at Camp
Canine before being adopted.

ISENSTEIN: This is Roper. He`s available for adoption now.

MATHISEN: It`s a passion play, paying off in more ways than one.

ISENSTEIN: When, you take a foster, you free up a spot in a shelter.
And so, you`re saving a dog`s life. And people come back here with those
dogs. So, I just tried to do a good thing, and it turned out to be good
for business.

(END VIDEOTAPE)

HERERA: And Camp Canine recently added cat care to its roster of
services, looking to differentiate itself from the crowd that has become a
very competitive field.

And that does it for NIGHTLY BUSINESS REPORT for tonight. I`m Sue
Herera. And we want to remind you, this is the time of year your public
television station seeks your support.

And we thank you for that support. Have a great weekend, everybody.

See you Monday.

END

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) 2015 CNBC, Inc.

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