Transcript: Nightly Business Report – October 10, 2019

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

BILL GRIFFETH, NIGHTLY BUSINESS REPORT ANCHOR:  High hopes.  President Trump plans to meet now with China`s chief trade negotiator and investors take it as a potential sign of progress in the two-year-old trade war.  

Bed Bath and way Beyond.  The stock stages the biggest rally in 10 years as
investors bet the new CEO will lead a corporate turn around.  

And changing retirement.  The rules are different and savers are trying to
navigate the new normal.  

Those stores and more tonight on NIGHTLY BUSINESS REPORT for this Thursday, October 10th.  

And we do bid you good evening, everybody.  And welcome.  Sue is off

Another tweet.  Another rally.  President Trump took to Twitter today to
say he will meet with a key Chinese official on trade tomorrow.  And late
today, he said the talks between the negotiators have gone well so far.  

That was good enough for traders.  The Dow Jones Industrial Average was up 150 points today to 26,496.  Nasdaq was up 47.  The S&P added 18.  

Kayla Tausche starts us off tonight from Washington.  


KAYLA TAUSCHE, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Handshakes and smiles at the on set of highly anticipated trade talks Thursday.  After three days of media brawls and a threat to cut the visit short.  Liu He, China`s vice premier, greeted by Ambassador Robert Lighthizer and Treasury Secretary Steven Mnuchin, joined by a delegation of three dozen Chinese officials.  

Despite seven hours of high level talks behind closed doors, the biggest
news came on Twitter.  President Trump saying he`ll meet the vice premier at the White House tomorrow, tweeting, saying China wants to do a deal. But do I?  

Stock market investors are betting he does.  Since Liu He`s last three
visits were accompanied by positive news.  In January, announcing Beijing
would purchase 5 million metric tons of American soybeans.  

DONALD TRUMP, PRESIDENT OF THE UNITED STATES:  Hopefully, they`re going to buy lots of corn and lots of wheat and lots of everything else we have.  

TAUSCHE:  The February visit resulted in a tariff delay.  And an April
visit focused on the forthcoming meeting where Trump and President Xi would close the deal.  

TRUMP:  The deal is coming along really well.  We`ll probably know over the next four weeks.  

TAUSCHE:  Shortly after that, talks broke down, resulting in tariffs on
hundreds of billions of dollars in additional goods.  But that was then.  
Two former White House officials say the fact that the president is
announcing the meeting suggests that China has made a legitimate offer that he might be ready to accept.  

For NIGHTLY BUSINESS REPORT, I`m Kayla Tausche in Washington.  


GRIFFETH:  Yes, trade is very important to Wall Street right now.  But it
is just one of the issues investors are paying close attention to.  

Here is Bob Pisani at the New York Stock Exchange.  


BOB PISANI, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Stocks rallied at U.S. and Chinese officials met for high level talks in Washington.  The Dow spiked around 9:50 a.m. Eastern Time when President Donald Trump tweeted that he and the Chinese vice premier would be meeting the White House tomorrow.

Regardless, the bar is pretty low right now.  The market seems content with
any kind of mini deal or even just a truce for the moment that might
involve, say, buying agricultural products in exchange for no new tariffs
coming into effect next week.  

But the usual trade related sectors like China stocks, material and energy
and industrials, they all rose today.  

Now, beyond trade, U.K. Prime Minister Boris Johnson met with his Irish
counterpart and issued a joint statement saying the two sides are seeing a
path way to a possible deal on Brexit, where the Brexit exit from the E.U.  
Elsewhere, shares of PG&E plummeted 30 percent after a judge opened a door to a rival bankruptcy plan from activist Elliot Management and other
bondholders which would allowing them to seize control of the company at
what PG&E calls a substantial discount.  

This also comes after PG&E shut off power in northern California last
night, impacting roughly 750,000 customers.  The utility says it could take
five days or longer to restore power.  

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


GRIFFETH:  In other news, the government said today the consumer price
index was flat in September.  Expectations were for a slight increase.  A
decline in energy and used car prices capped any inflationary pressures.  
And earlier this week, remember, another report showed an unexpected
decline in producer prices.  Economists say that those two reports show the
trade war so far is having a limited impact on inflation.  

And along those lines, a federal official at the Federal Reserve today said
that the central bank should continue to cut interest rates.  The president
of the Minneapolis Fed, Neel Kashkari, pointed to slowing global growth,
weakening businesses, investment and those inflation numbers that have been below the central bank`s target as reasons to keep cutting.  But Kashkari added that the while he is happy the Fed is lowering rates, he is not sure how many more reductions are going to be needed.  

Elsewhere, OPEC has trimmed its forecast for oil demand growth for the
third month in a row.  In a closely watched report, the cartel cited weaker
than expected economic data out of the Asia-Pacific region and also the
Americas.  The outlook could put pressure on some of the world`s most
powerful oil producing nations to impose a deeper round of production cuts when they meet in December.  Despite the soft outlook, the price of oil
rose in today`s session.  

Two stocks made big moves today, Bed Bath and Beyond and PG&E.  

Let`s starting with Bed Bath & Beyond (NASDAQ:BBBY).  We told you last
night the struggling retailer had finally hired a new CEO.  And today,
investors cheered that news, sending the stock up 21 percent.  

Courtney Reagan tells us why the market thinks Mark Tritton is the man to
turn the company around.  


COURTNEY REAGAN, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Target`s loss is Bed Bath & Beyond`s gain.  Target`s chief merchant is taking the top job at Bed Bath & Beyond (NASDAQ:BBBY) in November in an attempt to turn around the struggling home goods retailer.  

Bed Bad & Beyond`s market share has eroded with merchandise that failed to excite shoppers and a digital strategy that`s fallen behind competitors.  A
trio of activists bought shares of the home goods retailers and petitioned
the company for change which is now under way.  

Chris Kiper, one of the key activists at Legion Partners Asset Management
told me, quote, Mark Tritton is a superstar talent.  We are so excited that
he is joining Bed Bath and Beyond.  We believe Mark Tritton has the skills
to return Bed Bad and Beyond to greatness.  

During his three years at Target (NYSE:TGT), Tritton was a key part of the
leadership team that reinvigorated tired stores and upgraded merchandise
from the products, how they`re priced, and how merchandise is presented to shoppers.  He was part of the strategy to use stores as fulfillment centers
for online orders, which lowered cost and proved to increase convenience
for many shoppers.  Tritton helped develop new private label brands at
Target (NYSE:TGT) and reinvigorated tired ones, including a number of home goods lines.  

Because private label brands, by design, are exclusive to the retailer that
develops them, there is more pricing control and those high profitability
than national brands.  A third of Target (NYSE:TGT) sales are private label
goods, and only about 10 percent of Bed Bath and Beyond`s.  Improving
private label is a key part of the turnaround strategy at the home goods

Target (NYSE:TGT) was sputtering when Tritton joined from Nordstrom
(NYSE:JWN), but it wasn`t in as dire a scenario as Bed Bath and Beyond.  
Tritton hasn`t been a CEO before and it`s not clear how long it will take
for big changes to take effect.  But today, Bed Bath and Beyond investors
have hope for the future.  

For NIGHTLY BUSINESS REPORT, I`m Courtney Reagan at the New York Stock Exchange.  


GRIFFETH:  It was certainly a different story for PG&E.  As we reported
last night, and as Bob Pisani mentioned earlier in the program, a judge
opened the door to a rival bankruptcy plan.  That sent the stock down by
nearly 30 percent in today`s session.  Meanwhile, as you heard, hundreds of thousands of the utility customers remain without power today during the self-imposed blackout, affecting households, businesses and potentially the local economy.  

Josh Lipton is in Berkeley, California, for us tonight.  


JOSH LIPTON, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Gusts of wind as strong as 77-mile-per-hour hit parts of California today.  And that has PG&E nervous.  The worry is that those high winds could damage
infrastructure leading to devastating wildfires, like the catastrophes last
year in places like Paradise, California.  So, PG&E is shutting down power
to hundreds of thousands of California customers, roughly 10 percent of its

Thirty-four of 58 counties across the state have been impacted.  The
utility saying in a statement, this is not a decision that we take lightly.  
This is the measure that is needed as a last resort.  

The outages have resulted in runs on supplies like batteries, coolers and
flashlights.  And at gas stations and grocery stores, too.  The utility
says it could take five days or longer to restore power, which could result
in 2.5 billion in economic damages.  

Companies are responding as well.  Tesla apparently told its California
customers to make sure to power up their vehicles.  Many might be
frustrated with PG&E, though some California residents say they understand the utility`s decision.  

GIL FERRY, BERKELEY RESIDENT:  I`ve spent two days, yesterday up in Napa preparing for it, and I`d much rather have them be overly precautious and be able to say after they turn back on the power, perhaps we helped prevent a fire.  That`s a positive attitude to take.  That`s a responsible attitude to take.  

LIPTON:  All this comes at a critical time for PG&E, which sought
bankruptcy protection earlier this year, citing liability costs related to
fires over the past couple of years.  

A judge has now opened the door to a rival bankruptcy plan, sending the
stock sharply lower in today`s trading.  It`s now on track for its worst
year on record.  

For NIGHTLY BUSINESS REPORT, I`m Josh Lipton, Berkeley, California.  


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

We begin with shares of Apple (NASDAQ:AAPL) tonight.  They were upgraded to buy from neutral at Long Bow Research, with the analyst citing recent reports of more demand for iPhones than originally thought.  New price target is $260.  The stock rose 1 percent today to $230.09.  

Morgan Stanley (NYSE:MS) was upgraded to buy from hold at Sandler O`Neill.  The analyst cited the stock price, saying it`s trading at what he called an unwarranted discount.  Price target $48.  The stock gained 1.5 percent today to $41.05.  

UnitedHealthcare was downgraded to hold from buy at Jeffrey`s.  The analyst cited the political overhang affecting the managed care sector right now.  Price target, $235.  Despite the downgrade, though, the stock was up a
fraction to $223.73.  

And Cisco (NASDAQ:CSCO) was downgraded to neutral from buy at Goldman Sachs (NYSE:GS).  The analyst says trade uncertainty is causing business to cut their spending in technology.  Price target, $48.  That stock fell more than 1 percent today to $46.15.  

Still ahead, a new normal, the way people save for retirement is changing
and it may be time to adjust your strategy as well.  


GRIFFETH:  Delta Air Lines reported better than expected earnings today,
helped by strong demand, which prompted the airline actually to hire more pilots, flight attendants and airport workers.  But the carrier`s revenue came up a bit short of estimates.  Costs have also been on the rise and the CEO said today that Delta`s international business is also facing


ED BASTIAN, DELTA AIR LINES CEO:  International is choppy.  I mean, on the U.S. side is — which is our bread and butter, about two thirds of what we
fly is domestic.  We were up 8 percent in the quarter.  Internationally,
there`s been pockets of weakness, particularly in Asia.  Certainly, the
tariff issues on some of our automotive and heavy manufacturing customers cut back travel to Asia.  Europe was a bit weaker.


GRIFFETH:  Shares of Delta fell 1.5 percent today in today`s trading

Now, we all know that Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB)
dominate the online ad business but things are starting to change the
digital media industry.  And some surprising winners are emerging.  

Julia Boorstin explains.  


JULIA BOORSTIN, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Three digital media mergers in just two weeks.  Discovery backed Group Nine bought PopSugar for $300 million.  Vice brought Refinery29 for $400 million.  And “Vox” bought “New York Magazine” for $105 million.  All three in all stock deals.  

These companies are consolidating in part to better compete with Facebook
(NASDAQ:FB) and Google (NASDAQ:GOOG) for ad dollars.  Facebook (NASDAQ:FB) and Google (NASDAQ:GOOG) together dominate 60 percent of all digital advertising revenue in the U.S., according to E-marketer.  And while these giants helped digital publishers grow, they`ve also been criticized for changing their algorithms to keep that traffic, stealing ad dollars into eyeballs.  

NICOLE PERRIN, EMARKETER:  Facebook (NASDAQ:FB) and Google (NASDAQ:GOOG) contributed to the rise of these publishers by allowing them to spread their stories to much larger groups of people.  Google (NASDAQ:GOOG) in terms of search, in terms of Google (NASDAQ:GOOG) news.  Facebook (NASDAQ:FB) in terms of viral social content.  But they`ve also caused lots of problems by, you know, swallowing greater and greater shares of digital ad revenues as that`s where people continue to spend their time.  

BOORSTIN:  Those digital behemoths have also hurt traditional publishers,
such as “The New York Times (NYSE:NYT)”, News Corp (NASDAQ:NWS) and Gannett (NYSE:GCI), which had suffered with declining ads and subscriptions.  But now, their stocks are turning around, as their newer digital businesses kick in.  

Year to date, “New York Times (NYSE:NYT)” shares up 27 percent.  Gannett
(NYSE:GCI) shares up 23 percent, and News Corp (NASDAQ:NWS) shares are up approximately 15 percent.  

PERRIN:  Many companies that are successful are pursuing subscription
revenues, event revenues, perhaps commerce type partnerships as well.  So, it`s really about diversification, relying less on advertising, because it
doesn`t necessarily look like they will be able to pull back large amount
of spending that have been going to Facebook (NASDAQ:FB) and Google

BOORSTIN:  And now, Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB) are taking steps to help the publishers.  Google`s new algorithm highlights
original reporting and search results, focusing more on the most reputable
publications to drive clicks to original stories rather than to aggregators
that repurpose other`s reporting.  And Facebook (NASDAQ:FB) is in the
process of negotiating to pay publishers to include their content in its
coming news tab.  

Now, we`re watching to see what kind of deals Facebook (NASDAQ:FB) strikes and what kind of licensing fees or subscription revenue it drives.  

For NIGHTLY BUSINESS REPORT, I`m Julia Boorstin, in Los Angeles.  


GRIFFETH:  General Motors (NYSE:GM) sees a fifth consecutive quarterly
sales decline in China.  That`s where we begin tonight`s “Market Focus”,
with the auto maker reporting a 17.5 percent decline in China vehicle sales
due to the ongoing trade war, a slower economy there and increased
competition in its important mid-priced SUV unit.  

Separately, GM CEO Mary Barra today met with the United Auto Workers
president about the ongoing strike here in the U.S. that is now in its
fourth week.  Shares rose about 1.5 percent today to $34.66.  

Mississippi is dropping its legal challenge against T-Mobile and Sprint`s
proposed $26 billion merger.  The state`s attorney general says the
combined wireless company has now agreed to bring its high speed 5G network to Mississippi`s rural areas.  T-Mobile`s shares were up a fraction today to $78.30, while Sprint shares were up more than 2 percent to $6.27.  

Chemical maker Kraton expects its full year profit outlook now to be 15
percent below the low end of its previous forecast.  The company cited weak demand in Asia due to the trade war, as well as slowing profits in North America and in Europe.  And that stock plummeted about 32 percent today to $20.42.  

And then after the bell, Walmart announced that John Furner is gong to
become the new president and CEO of the retailer`s U.S. division starting
next month.  Furner replaces Greg Foran who has now taken the job as Air
New Zealand`s new CEO.  Walmart shares were volatile in afterhours trading tonight.  After the close of the regular session, it was up a fraction to

Fidelity now is the latest brokerage to eliminate trading commissions, in
this case from $4.95 per online trade to zero.  Fidelity and its rivals are
working very hard these days to lure more customers with lower cost
products and services.  And Fidelity also recently unveiled plans to offer
higher yields in money market funds for its 21 million accounts.  

In the meantime, the $68 million Americans who receive Social Security
benefits are going to get a 1.6 percent increase in their monthly checks
next year.  That`s equal to about $23 a month for someone who receives the average monthly benefit of $1,460.  The percentage increase is more than the average over the past decade but it`s also the lowest raise that
they`ve gotten in the past three years.  The cost of living adjustment is
determined by the consumer price index.  

Last night, we talked about General Electric (NYSE:GE) freezing pension
benefits for 20,000 of its salaried workers and then offering buyouts to
100,000 former employees who haven`t started drawing their pension.  There is no question that planning for retirement is a lot trickier than it used to be with the gradual demise of pension plans, record low interest rates and higher stock market volatility.  

Joining us tonight to talk about the changing nature of retirement
planning, we welcome back, Liz Weston, a certified financial planner and
personal financial expert at NerdWallet.  

Good to see you again, Liz.  How have you been?  

LIZ WESTON, NERDWALLET FINANCIAL PLANNER:  Good to see you, too, Bill.  Thanks.  

GRIFFETH:  I think the biggest change we see for retirement planning these
days, the word “guarantee” is long gone, right?

WESTON:  Oh, absolutely.  We don`t have guarantees anymore except for
Social Security.  You get a guaranteed return when you put off claiming.  
So that`s something you can look forward to.  

GRIFFETH:  That assumes though — that assumes, though, that Social
Security will be there when you`re ready to retire.  

WESTON:  Yes, it will be there.  It`s too popular a program to go away.  I
think if you are close to retirement, you can pretty much count on Social
Security giving what it`s promising you.  I think younger people need to be
aware of the fact that if they don`t pay attention, it could be reduced or
eliminated.  I don`t think it will be eliminated but it could be reduced.  
They could pay the price if they`re not paying attention.  

GRIFFETH:  All right.  We`ll hold you to that.  


GRIFFETH:  The record low interest rates that we see these days forces
people to go to the stock market even more now for retirement savings,

WESTON:  Absolutely.  I mean, you can`t get a safe return and high return
in the same investment.  When you go the safe route, you`re going to get a
return that doesn`t keep up with inflation.  That`s always true.  

But I think when the low return environments we have now, the low safe
returns, it`s really becoming obvious.  The good news is that stocks are
the one asset class that outperforms inflation over time.  So, when you`re
working, that`s where the bulk of your money should be.  

But even in retirement, you`re probably going to live a few decades.  So,
you need to have at least some of your money in the stock market, so you
could keep up with the rising cost of living.  

GRIFFETH:  Is there still a role for bonds in retirement?  I mean, I guess
certainly higher yielding corporate bonds but they can be risky sometimes.  
But what about overall debt instruments?

WESTON:  Yes, I would have — obviously diversification is important on
both sides of the ledger, whether you`re doing stocks or bonds, you don`t
want to have everything in one basket.  So, corporate bonds stay away from
junk bonds if you`re a retiree unless you have a real taste for risk.  

So, corporate bonds and a few treasuries, you know, just to keep things
balanced out.  Really important.  Maybe a little bit in cash.  That
diversification is what`s important.  

If you`re going to go all the way or another, you`re going to either take
too much risks, you`re going to wind up not overcoming inflation, and your buying is eroded over time.  

GRIFFETH:  Some good meat and potatoes advice from Liz Weston with

Good to see you, again.  Liz, thanks.  

WESTON:  Thank you.  

GRIFFETH:  And coming up, a whole new meaning to the term “backseat


CONTESSA BREWER, NIGHTLY BUSINESS REPORT CORRESPONDENT:  You want to talk about the future of your ride?  Think beyond Uber and Lyft.  Think beyond autonomous vehicles, to what you`re doing in the backseat of your car.  And coming up, I`m going to show you what I`m seeing.  



GRIFFETH:  While U.S. and Chinese trade negotiators hold their talks in
Washington, the NBA is hoping for a truce a world away in China, and all
because of that one tweet that we told you about earlier in the week when
the general manager of the Houston Rockets made a pro Hong Kong protest

Eunice Yoon has the view from Beijing for us tonight.  


EUNICE YOON, NIGHTLY BUSINESS REPORT CORRESPONDENT:  The trade talks are starting at a time when the level of drama in the U.S.-China business relationship is especially high.  The standoff between the NBA and Chinese critics continue into today.  Houston Rockets Nike (NYSE:NKE) products were pulled from store shelves, and today, NBA chief Adam Silver was expected to make a statement before the exhibition game between the Lakers and Nets in Shanghai, but that briefing was cancelled.  

The Chinese critics of the NBA claim that 1.4 billion Chinese were hurt by
the pro Hong Kong protester tweet of Houston Rockets general manager.  

But the stands at the game were packed, which based on the turnout shows
that the NBA is keeping at least part of its Chinese fan base.  

For NIGHTLY BUSINESS REPORT, I`m Eunice Yoon in Beijing.  


GRIFFETH:  Finally, tonight, the ride-hailing industry provides some 50
million trips every day.  And most of those riders have some time on their
hands while they`re riding in the back seat.  Well, now, a start-up
software company is launching a product to keep the riders engaged and

Contessa Brewer is in Los Angeles with what may be the future of the back


NILS WOLLNY, HOLORIDE CEO:  So, let`s put on the headset.  

BREWER:  It`s like a theme park in the back seat.  

Is there any danger of the driver getting hit in the back of the head.  

An immersive virtual reality experience incorporating real-time data from
the car`s computer on braking, speed and turning.  

So, the car is stopping.  

WOLLNY:  Uh-huh.  

BREWER:  And the game is stopping too.  

WOLLNY:  So, it`s synchronized in real time.  So, when the car accelerates,
your virtual experience accelerates.  So, it`s way more immersive and it
reduces motion sickness as well.  

BREWER:  Holoride CEO Nils Wollny is in a proof of concept phase,
partnering with Ford and Universal (NYSE:UVV) Pictures for a Halloween
experience this month at Universal (NYSE:UVV) Hollywood.  Wollny hopes to have his software installed in vehicles by 2021, incorporating gaming,
entertainment, even education.  

WOLLNY:  A lot of people want to work while they`re in on the go.  But if
they get motion sick, they simply can`t.  And spatial computing will be the
next big computing platform.  And if it`s motion synchronized, you can even be more productive.  

BREWER:  Holoride is not the only one looking at a potential upside here.  
Think about the manufacturers of these head sets or the content creators,
Discovery, Disney (NYSE:DIS), Universal (NYSE:UVV).  Ford is particularly
interested in what customers have to say after experiencing the Holoride
for Halloween here at Universal (NYSE:UVV).  

ALBERT CHOI, FORD:  As we`re getting to more connectivity in the vehicle,
we`re interested in learning about the types of experiences that our
customers are interested in.  

BREWER:  Holoride will incentivize carmakers to make the software standard in their vehicles and share revenue with them.  Porsche is exploring the options, as are Mercedes and Daimler and Audi, which launched Holoride and still owns a 10 percent stake in the company.

In a statement, Audi tells us: In-car entertainment and gaming harbor
enormous potential for transforming a routine trip from A to B into a
digital experience.  

And those experiences are likely to be more realistic, more complex and
more mobile.  

GREG REED, UNIVERSAL PICTURES:  VR is typically location based experiences at home experiences.  This is a type of opportunity you have to take the content we`ve been building and put it in place where consumers are.  

BREWER:  And increasingly, the consumers are passengers.  With the
driverless cars of the future, those commuters may find themselves free to
take on other challenges.  

I`m having a very hard time interviewing you and shooting demons at the
same time, I have to admit.  


BREWER:  Perhaps it`s also what multitasking in the future looks like.  

In Los Angeles, Contessa Brewer, NIGHTLY BUSINESS REPORT.


GRIFFETH:  Before we go, let`s take a final look at the day on Wall Street.  
Another rally today.  The Dow up another 150 points to 26,496.  The Nasdaq
was up 47.  And the S&P added 18.  

And we have more trade talks tomorrow.  Stay tuned.  

That is NIGHTLY BUSINESS REPORT for tonight.  I`m Bill Griffeth.  Thanks so much for watching.  Have a great evening.  See you tomorrow.  


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