tv Nightly Business Report PBS September 16, 2019 5:00pm-5:31pm PDT
. >> this is "nightly business report" with bill griffeth and sue herera. oil shock. an attack on the heart of saudi arabian productions sends prices spiking and t effects are felt. >> on strike. gm workers walk offob the for the first time since the financial crisis and both sides have a lot at stake. what' in a name. a startup strikes a deal to put its name on the most expensive nfl stadium ever those stories and more tonight on "nightly business report" for monday, september 16th. and we do a bid y good evening, everybody. welcome. we usually begin this progr talking about stocks but tonight you probably will not be too surprised to hear that we're beginning with oil. those attacks over the weekend on saudi arabia's oil facilities
cutore than half of the kingdom's output and it sparked fears of a global supply crunch. th result was t biggest one-day gain for domestic crude prices in almost 11 years. they rose 15% after having been h as m 20%. and the shock rippled through reher markets as well. it sent s of exxon mobil and chevronigher making them two of the best performing stocks in the dow today. refiners took a hitecau many depend on saudi arabia's distinct heavyru and off shore oil drillers rose. oil stocks fell on concernsab t higher fuel costs. cruise lines came under pressure for fear that the price spike could become a drag on their earnings as well. so what happens next? that's the question many areas ng and one that sema mody sent out to answer. >> repter: the attacks on a saudi oil production facilities are unprecedented in the global oil industry. 5.7 million barrels of daily oil
production were knocked offline, roughly5% of the daily oil prodtion. >> this is theargest single day disruption of oil supply. this is the nerve center of the saudi arabian you out take. th fact that a group was successful over the weekend is terrifying. >> most experts say whether oil moves higher from here depends on how the saudis and opec respond. saudi arabia has been in talks with members of a opec non-opec nations like russia to asse what steps should be taken next to limit destruction and minimizee shock to energy market. >> the spare capacity thatom from opec producersdu largely rede in saudi arabia. when they can't tomorrow to the scue it leave 1 million barrels a das that's a nrow cushion. >> reporter: energy analysts are trying to figure out how much damage was inflicted on the
saudi oil plant targetedn saturday's attack. at this point they say it will take some time before saudi's oil production returns to full capacity. >> i think we're talkingtheeks to m before it's fully restored. >> reporter: experts say this could present an opportunity for u.s. energy producers and all of the u.s. supply that makes this oil shock different.n the ameri energy market has grown substantially in the last decade, phaps making this supply shock a little less painful. >> there's nothing that better illustrates the effects of u.s. supply buffering the effects ana the w demand environment in which we findh ourselves. h reporter: with tensionh in the middle east, analysts say it will likely remainor higher the foreseeable future. i'm seema mody. joining us to discuss the ramifications isohn killduff. welcome back. >> good evening. >> what are your thoughts? it was a large strike and it wmes at a timen in is off off and venezuela is al
line. >> and the fact that prices didn't go higher speaks volumes to the soft demand. the slowing economies, particularly in asia. there was some keyut data of china last night that further evidenced the slowing iustrial impact with the u.s./china trade war is having. the fact that we were able to sort of hang in there, only get wti crude or s. crude above $60 a barrel which is a reasonable level for it in normal circumstances speaks volume t the weakness out thers >> i'm seeing s today two estimates about what the impact will be on gasolin prices i this country. 0 cents, maybe 25 cents. what do youthink? and what can the u.s. industry do to try to mitigate some of that? >> there's no shortage for arters. neither for crude oil, nor gasoline nor any of the refined products. in storage, plenty made, plenty of crude stock iny invento continue to supply the country adequately. what will have to happen, bill, the tensions will have to calm down.
the oil market is rightly pricing in ari tc insecurity. there could be another attack. obviously saudi arabi is incredibly vulnerable to the drone strikes or cruz missile strikes. they couldn't protect their crown jewel. so those prices will come racing to the pump higher probablyy the end of th week you'll see that fulul 20 cents priced in. what happens next is the turning point here. does the u.s. respond?do he saudi's respond, do the hos houtrespond. do they recover or knock more oil offline. >> the language this from the white house was a little softer than it was earlier this morning, for lsk of a better word. do that give y an indication that maybe there will beore of a time difference between the time that we hear what the u.s. is gng to do or sad did iudi arr
>> there is nh to war, doesn't appear to be an appetite nt it. this was a signifi attack on saudi infrastructure. you have to believe there has to be some kind of response. these attacks smaller in scale have been going on for month and the saudis have done nothing other than to try to hit the houti's in yemen harder. the oil keeps flowing. the saudisave a terrific ability to restore most quickly and there a reports they'll be fully back onlinehe by end of the month. not necessarily a huge crisis for the market butertainly the bubbling cauldron of geopolitical risks persists. >> john kilduff, thank you vmuy . now to the stock market whichell on concerns of the rise in oil pricesould slo global economic growth even more than it already is. the result was a decline forighe dow after consecutive gains. the dow jones is down 27,736. nasdaq down 23. the s&p slid by and that spike
in oil prices is throwing yet another curveball atnv ctors just in time for this weekfe ral reserve meeting. mike santoli has more. >> reporter: after a bitter set back naugust, the stock market finds itself inel something of sweet spot. the question nowg is how l the market can stay there after an oil price spikend the crucial fed meeting just ahead. several key market variables fe to extremes last month. treasury yields fell to three-year lows. economic expectations sank in anticipation of a possible recession. investorme sen turned quite pessimistic, never fell more than 6% from a record high. in recent weeks though data on jobs and retail sales have caed recession worries and sparked a powful rise in treasury yield from the low of 1.44% to above 1.8% yet they were above% the last time the s&p 500 was dh close w to a recd in july. rates areot high enough yet to pinch economic activity or
undermine equity valuations. the economic readings are a comfort yet are not so hot as to jeopardize the expected quarter point fed rate cut later t week. with 6% rebound in recent weeks has brightened investor experience and prompted investor spirits but sentiment is far from turning o complacent orr optimistic just yet. even oil prices surng after attacks on saudi infrastructures are back to their springtime highs. the trade war simmers in the background and the past two short pull backs intocks also occurred with the s&p near a high in a fed meeting week back in mayju and . so for now the market backdrop has improved in mostpe rs without yet being too good to be true. for "nightly business report,li i'm mikean for the first time in a dozen years auto workers at general motors are on strike.
ough talks continued today, assemb lines across the country were shut wn. that sent shares of gm lower by more than 3%. at issue payraises, job security and a bringing new mods f plant phasing out production where wed phil lebeaut. in de >> reporter: after 40 years at gm, john blaze is on strike determined to hel the uaw get a better contract with general motors. >> we'll stay out here as long as we need to to get a good contract. >> reporter: from early morning picketers touto workers outside gm plant i arlington, texas, 46,000 uaw members have effectively shut down thecountry's largest automaker. >> i am not at all surprised that there is a strike. the issues were very tough. the stake were vy high for both sides. >> reporter: for gm the goal is containing costs, including benefits the company pays uaw
members $63 an hour, more than ford, fiatlerd chr or foreign automakers operating in the u.s. the uaw counters that gm has steadily increasedr the numf vehicles imported from mexico and believes some of them could have b beenlt in plants like the one in lordstown, ohio, which has been shuttered. it's all part of mary barra's plan to make gm lean and profitable. that has drawn the ire of president trump who wants gm to add more jobs in the u.s.e trike prompted him to tweet, here we go again withge ral motors and the united auto workers. deal.ogether and make a while it may take days or weeks for a deal to come together, general motors a the uaw still have a history of eventually hammering out agreements including a decade ago when the automaker was going through bankruptcy and everyone attached to it was forcedo make tou choices. >> we did what we had to do bacd in '09 to save o self and the company, and now we're asking
the companyo save our jobs. >> reporter: phil lebeau,ig ly business report," detroit. >> says, quote, we netiated in good faith and with a sense of urgency. our goal remains to build a strong future formp ouryees and business, end quote. joining us to assess the impact the strike will have on gm and the ever changing automotivedu ry, michelle krebs is with us. good to see you again. thanks foroining us. >> thanks for having me. >> you said this strike is very different from the one a decade ago. how so? o. there are a lot of different ingredients in this one. first of all, we are approaching a downturn. we had a little bit of a downturn in ao sales. we could be facing an economic downturn but we're alsos on t precipice of a massive transformation of the to electric cars, autonomous cars, new mobility. nobody knows when that will take place but it's startingo emerge.
automakers are plowing a lot of investment into those future technologies. e you think that area that we're in right now, this transition might make iter haor the two sides to come to a deal. >> it does because general is trying to ring out every penny of profit it can that it can sustain itself today but also so it can make investments in th future. and gm's been very aggressive on t'saying going to into an all electric future. >> let's face it, they don't know what kind of jobs they're going to t need asy go into the future, and that goes for the whole industry, too, by the way. >> that's absolutely right. if you go into an electric car plant, it a doesn't have many assembly workers. yes, there are people that have to put together the battery packs, but nobody knows exactly how many jobs will be needed and we don't know how well those vehicles will sell yet. it's going to take g someime before companies -- those proliferate and companies make profits on electric vehicles and autonomous havehicles. >>are your thoughts on the
lengthr possible lengths to an impasse? they are still talking. workers aren't working. workers are out on the picket lines. what is your sense to how long this might last? optimisticm being and hopeful. i'm hoping it will be days, not weeks.ot we'll see. it had ard to know. >> when does it start to cut into gm phil lebeau was pointing out the inventory they have on hand att. this po >> well, it's immediately financial impact because whe n you' producing cars, you're not selling them to your dealers and you're not bringing in revenue.e' but th plenty of inventory on the ground for c csumers and at dealerships. so we won't see any impact there for a while. they've g -- gm has like a 77-daycl supply of most ve so they're good for now. >> michelle yebs coxautomotive. thanks for joining us. >> thank you. it is time to take a looko t some of today's upgrades and downgrades. uber and lyft were both upgraded
to buy fromol at hsbc. they say regulatory concerns are priced the price target on ur is 44, lyft 62. shar of both uber and lyft rose more than 3.5% today. lowe's was upgraded from outperform toal neu at web bush securities. theyite theceo's ability to be a more productive and profitable company. the stock fell a t fraction $112.63. jpmorn was down from knew the taneutral. he called the bank a great company and best in class. price target $122. that stock was down a fraction to $119.1 today. dick's sporting goods was wn aded to market perform at wells fargo. the analyst cited the retailer's margins that remained under
pressure. price target, $39. shares fell 1% to $38.5. pharmall ahead, purdue filed for bankruptcy but legal battles lia head. a regulator for the united arab emi said he is not optimistic that the boeing 737 max will return to operation this year. the comments come as head of the faa said he plans to test the changes boeing made in a simulator this week. i'm anxious to get out to seattle later this week and look into this myself and see where
we are with a certification process. as a pilot myself, i can tell you thali will not allowhis airplane to fly unless i would fly itf and put my own family on it and that' my commitmeme. shares of boeing fell slightly in trading today. now to an update on the w storyre following for years. that would be the opioid epidemic purdue pharma who makes oxycontin has filed for bankruptcy. the story is not over yet. meg tirreye has the story. >> reporter: it's just the beginning of a new one. puinue's bankruptcy filg was part of an arranged process to try to settle the thousands of cases filed fwens it from cities, tacounties,s and others claiming purdue helped cause the crisis of opioid addiction that's claimed 400,000 lives over two decades. the bankruptcy w planch would turn purdue over to plaintiffs $10 deal it values at billion comes with the agreement of 20 states but with the
opposition of at least 10 others. we have 24 already agreed to this. there are some states that have been vocal in their objection thinking thee may be m money. i don't know what their objections in total may be, i remain hopeful that we will get to a solution that they can all buyinto. >> reporter: the final resotions for bankruptcy has to be voted on by creditors according to attorney joe rice. he's one of the several attorneys. they're suppo'rive of the agreement with purdue but several states, including new york, oppose it and are focusing their focus onhe billionaire stackler family. ed a billion dollars in wire transfers including threw swiss bank accots. the family said, quote, there's nothing newsworthy about the
decades oldrs transfe which were perfectly legal. th litigation continues for several other defendants from johnson & johnson to teva and others. rice said they've filed a motion todi over. they hope other companies may step forward to try to resolve the case on a global basis. for "nightly business report," i'm meg tirrell. a warning from thengco try's largest steel maker. that's where we begin tonight's market focus. nucor said the third quarter profit is well below expectations. the comeany citedess in raw materials atia its steel mi businesses. this comes ami lower steel prices. shares are down a fraction from $53.16. a danish company iguy alder pharmaceuticals. they make an experimentalre migrainement that is currently under fda review. alder stocks skyrocketed almost
% to $18.50. win know bag gee industry is acquiring numar for $345 million using a combination of cash and stock. the dea d expands winnebago's lio brands which is a grand design and criscraft boats. it rose to $37.66n gentleblackstone is buying dream global for more than $4.5 billion. dream global owns office space and warehouse properties in more than 0 cits in europe. blackstone shares dropped fraction to $53.52. late f todayex said it would increase shipping rates by an average of 4.9% for domestic export and import services startingry 26th. stock didn't douch in the after tours session buty closed the regular session slightly lower at $173.57. the nfl's most expensive
stadium has a new name, but it might not be ahousehold one. kate rudy tells us about the major deal struck by a startup. >> reporter: silicon valley sofi is joining the big leagues. the company signed a 20-yor deal have its name on the new home of the los angeles rams and the chargers. having launched in 2011 with illennial student loan refinancing, they're known in thehe technology space. ceo anthony nodo, a formerfl executive, hopes it will turn out by turning them into aol hous name. >> we want to bring our brand to life and the national telecasts that will drive our brand awareness. >> reporter: there million sqoot arena is set to open next summer as part of stan kronke's entertainment complex. with a massive price tag, eported 600 million, nodo said
there are plenty other suitors. >> anything that the nfl iss doingomething my other companies would love to do. one of the things i learned having had a front row seat. it's not always about the dollars but it's about the spirit of partnehip. >> it costs companies hundreds millions of dollars to put their name on an nfl stadium and it's typically reserved for established names like jpmorgan or bank of america. sofi is the outlier here. it'sy the o venture capital backed startup with their name onn nfl stadium. >> not only is it important strategically. plentyitically, we have of capital to do this. >> reporter: the new sofi stadium is theos expensive nfl stadium in history costing an $ estimated billion to build. it's having a huge impact on la'sec omy. >> this will become one of the economic hubs. we hope it will double the tax base of the city. g think you can see tremendous improvements com for a neighborhood well on itshb way
. ck to recovery. >> reporter: it won't just be football games pumping back into the economy. they have already booked high profile events. the super bowl in 2022, the college football championship the following y ar and 2028 olympics. for "nightly business report," i'm kate rooney, englewood, california. s > and coming up, from expensive stadi pricey apartments. what' t it like live on the 131st floor of the manhattan? d how much would it cost? we'll take you inside the tallest residential tower in the world. sky high prices and views coming up on "nightly business report."
here'st a look what t watch tomorrow. fedex reports its earnings. s results are considered a bellwether for the global economy. they begin their two-da meeting with a decision on interest rate'lon tuesday. see if the drop in mortgage rates improve sentiment among the home builders. that is what to watch for on tuesday. finally tonight, a b skyscraperlding boom has been reshaping the manhattan skyline andeshe n residential tower which opens tomorrow will also be the city's tallest building but its sky high views face some sky hh challenges. robert frank,s you saw, is in maattan for us tonight. >> reporter:omorrow morning this will officially become the tallest residential tower in the world and o also onethe most expensive with $4 billion worth of condos to sell in a real
estate market that is struggling with an ove supply, lack of foreign buyers and new tax ewanges that have hurt high tax states likeyork. central park tower will be 1550 feet tall or 131 floors. there will be me179 apas in total ranging in price from 6.9 million to over 63 million for a five-bedroom. the first apartments won't close untilhe building is finished probably in late 2020. xtel, thehe developer, built 15 the buiing just down the street, which launcd the super tower craze here on 57th street, now known as billionaire's row, andhey've all transformed the manhattan skyline. there is a forest ofss giant gla condos in mid town and prices are falling b. one in four new condos blt in manhattan sce 2013 remain unsold today. by some estimates there will be a nine-year supply of new condos
at the end of this year, but central pa's tower owner is confident this building will sell, mainly because of the extraordinairy views and floor plan. >> overall we're cautiously optimistic that we're going to continue to sell and sell enough and get through the downturn. it's not really demand. very often the cycle is, you know, demand slows down, the economy s down and going through a recession and so you get hit with slowdown in demand and that's hard to gh here we're really economy is becoming, new york city i here. a lot of people can afford to buy. there's an over supply. >> nordstrom is building a store on the first seven floors of the building totaling ot360,000 sque feet with six restaurants. the building will also have a private club for owners with a swimng pool, fitness and spa and restaurant. >> now to g up all these floors the building developed a special high speed elevator that
goes 2,000 feet p minute. for "nightly business report," i'm robert frank in manhattan. >> above manhattan. before we go, here a look at the day on wall street. theow fell 2 pointso 27,076. the nasdaq was down 23. the s&p slid 9. that is "nightly business report" tonight. i'm sue hereks. than for joining us. >> i'm. th bill grif have a great evening. we'll see you tomorrow.
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