Business Matters Full Broadcast (July 16)

The Teamsters Union bucks its previous trend and speaks at the Republican National Convention for the first time in over a hundred years. We have more on that coming up today on Business Matters. Good afternoon and thank you so much for being here with me today. I'm your host Dan Ma. Of course, starting off with markets. Smiles down Wall Street today as all three major U.S. indexes scoring its biggest gain in over a year, closing just shy of 41,000. The other indexes notched gains too, but just not quite as big. For those watching the rally in small cap stocks, the Russell index jumped around 3.5% today, though Charles Schwab stocked down 10% on a weak earnings report. So high interest rates continue to plague the American consumer, it looks like, and financial institutions. So Bank of America has reported a drop in its second quarter profits and high interest rates have slowed down lending, resulting in a sluggish performance for its consumer bank side. So this was offset, though, by a resurgence of activity in its investment banking division. While B of A has reported loan growth and more return on assets, much of its interest income went to higher interest rate expenses. And this is because Bank of America typically keeps shorter term securities. So when the Federal Reserve raised rates, it had to finance at a higher rate more quickly than other banks. And President Biden is working to tackle the housing affordability issue. He's going to call on Congress to pass his plan to set a federal cap on rent increases. He's making an official announcement today in Nevada. That's a state that's seen one of the biggest increases in housing costs nationwide. So his plan would eliminate a tax benefit for landlords who increase their tenants' rent more than 5% a year. It would only impact landlords who own more than 50 units, though, which represents about half of all rental properties. It would not apply to units that haven't been built yet. Biden's plan will still need to be approved by Congress before going into effect. And high housing prices have been a key talking point this election season. Some economists say that it's an issue of supply and demand, blaming a shortage of homes on the market. They worry any attempts at rent control could discourage developers from building new construction, exacerbating the issue. And one of the largest trade unions in America says it is not beholden to any political party. The Teamsters have supported Democrats for decades, but its president gave a speech at the Republican National Convention last night, and the first Teamster to do so in 100 years. NTD's Dylan Morgan has more. Teamsters President Sean O'Brien says the union is not beholden to anyone or any party. At the end of the day, the Teamsters are not interested if you have a D, R, or an I next to your name. We want to know one thing. What are you doing to help American workers? The Teamsters endorsed President Biden in 2020, and Biden calls himself the most pro-union president in history. Mr. O'Brien said President Trump's invitation to have the Teamsters speak at the RNC caused political unrest on both sides. The Teamsters are doing something correct. If the extremes in both parties think I shouldn't be on this stage. He called out those that believe unions destroy American companies, saying unions give workers great wages and benefits when large corporations fail to. In a separate interview, Mr. O'Brien praised Senator J.D. Vance, former President Trump's newly announced running mate, as great on Teamster issues. Mr. O'Brien cited the 39-year-old lawmaker's work against outsourcing. Here's a clip of J.D. Vance at last year's United Auto Workers strike in Ohio. I've talked to some folks who are worried that every time they dare to speak up at their own place of business, the company threatens to move their job to Mexico. It's unclear whether the Teamsters will endorse any candidate for president this year. Dylan Morgan, NTD News. And the big economic data point out today is retail spending. And it has been holding mostly steady since the beginning of the year. And it followed that trend in June, according to data from the Commerce Department today. Consumer spending powers two thirds of the U.S. economy. Retail sales, which by the way, capture spending on goods and food services, make up a big chunk of that overall spending. So based on today's report, online sales and spending at home improvement stores jumped from May to June. Meanwhile, sales at gas stations and spending at car dealerships and on automotive parts declined. Important to note, though, this is seasonally adjusted numbers. And economist David Rosenberg says that if you look at the raw data here, it was the worst June for retail sales in a decade. All right, moving on. Shipping costs are soaring and approaching ten thousand dollars a container from Shanghai to New York. So how rising costs will affect everyone's wallet and how they could come down? The cost to transport a standard shipping container from China to the eastern U.S. is nearing ten thousand dollars, meaning the costs of importing overseas products are hitting extreme highs. This is a big deal. These are our near record rates in recent times for container shipping, carrying goods from Pacific Asia to the Atlantic economies into the United States. This will increase inflation in the United States. Maritime professor Rockford White says largely to blame are the Houthis in Yemen. This terrorist group launches drones and missiles at container ships in the Red Sea. They claim they're doing this to aid Gaza. This forces many ships to go around Africa. Going around the tip of Africa versus through the Suez Canal, which everybody would normally do, adds about one third to the to the portion. And so you do the simple math that has the immediate effect of sucking up about eight percent of the capacity of worldwide container vessels. Maritime expert John McCown says this is causing shipping chaos, reducing the supply of container ships, thus jacking up prices. You started to see, particularly in Singapore and even more so in Shanghai, have congestion in the tunnels. And that has the effect of their throughput reducing. White suggests one possible solution would be to target the Houthis by building a coalition of navies. So far, it's only been the United States Navy and the Royal Navy of the U.K. have been willing to actually fire missiles into the land positions of the Houthis in Yemen. But maybe you could get the French or other European, the Dutch, Germans, others, the Greeks to do that as well. White says another solution would be for the Panama Canal to increase its capacity to handle shipping traffic. Also, container ships could simply accept the risk of traveling the Red Sea. And here's what else you need to know today. Google is close to making a really large bet on cybersecurity. So the tech giant is nearing its largest acquisition ever. It's a potential 23 billion dollar deal for cybersecurity startup Wiz. Wiz makes cybersecurity software for cloud computing. Google's last major purchase was nearly a decade ago. 12.5 billion dollars for Motorola. So this potential deal has not been finalized and it can still fall apart. So we'll have to keep an eye out on that. Meanwhile, a major Russian cybersecurity company is calling it quits on the U.S. Yesterday, Kaspersky Lab announced that it's winding down U.S. operations after nearly two decades. The move comes a month after the Commerce Department banned U.S. sales of the company's software and products, of course, citing national security issues. So the shutdown is expected to start July 20th, along with layoffs for U.S.-based employees. Kaspersky Lab started in Moscow in 1997. It grew into one of the world's most successful antivirus software companies, alongside U.S. rivals like McAfee and Symantec. Now, more Gen Z, it looks like, are choosing to go to trade school instead of college. There's a number of reasons why, for example, including a better paycheck. Now, according to statistics compiled by GetHUX, 43 percent of trade school graduates earn more than those who graduate from traditional colleges. NTD's Shaw Marshall now takes a look at the challenges presented by both sides. Gen Z is choosing more traditional jobs like carpentry, welding and plumbing, compared to five years ago. Vocational trade learning grew 16 percent between 2018 and 2023, according to National Student Clearinghouse data tracking. Construction trade studies grew 23 percent in 2023, compared to the year before. You know, if you want to like, you know, mess around or almost like, you know, be a loser, then go do a trade program, which was like really horrible advice that I think students were given. They see it as more of a straight shot to earning six figures than going the degree route. It can be hard to know how you will like your chosen path until years later. Some regret going for a degree in the wrong field with the results of trouble finding a job or no longer being interested in their career. And just because you study a trade doesn't mean you're limited to that field. We've hired many people over the years, and some people are just, you know, not, you know, like a corporate path, an office path or a medical or accounting or finance field is not for them. And they're just better with their hands, you know, or, you know, their brain works in a different way. But the physical demands of a trade can take its toll. I am a strong advocate for understanding the risk going into those roles, not just physically, but also mentally. If you're going into a role that you know will take a strong impact on you mentally, I highly encourage you that you seek therapy. Therapy is a great resource that many people don't often realize is something that they have access to. Male construction workers are 75% more likely to commit suicide than men in the general population. This can be due to unforeseen challenges of physical abuse on the body, combined with a path to pain reliever abuse. An individual, you got to really ask yourself, like, what, you know, what am I really good at? What do I like? What gets me up out of bed? And then make those decisions based on which path you should go down. Ultimately, the outcome of a career direction can vary from person to person. The choice is always there to learn new things in your free time if you wish to course correct. Sean Marshall, NTD News. All right, let's take a break now. Coming up afterwards, China's new home prices falling at the fastest pace in nine years. We have analysis on what this means for the world's second largest economy. And we take a look at why couples should consider staggered retirements. That and more after this short break. Don't go away. The biggest Republican event of the year. Four nights, thousands under one roof, officially nominating their candidate for president. America's comeback starts right now. Watch NTD's live special coverage with Steve Lance and Tiffany Meyer on The Nation Decides 2024. Republican National Convention, 6 p.m. Eastern from July 15th through the 18th on NTD News. Hi, I'm Susan Lucci. I never thought about heart disease until I had my own heart event. I had heard many times that heart disease is the number one killer. It went in one ear and out the other, frankly. I never had a health issue. I felt this slight pressure on my chest, just slight. 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Their research helped save my life. Put yourself on your to-do list. It could be the most important thing you ever do. Please listen to your heart. The only reason I'm here today is because I did. So please call the number on your screen or go to helpheart.org now. Join me as a monthly donor today and help save even more lives. Thank you. You'll save big at Mathis Home and get store-wide 12-month no interest financing during the monumental savings event. Get huge markdowns on hundreds of sofas starting at just $399. Check out our incredible selection of patio and outdoor furniture and save big. Plus, we're the only place with top name recliners starting at just $195. Shop online and find over 180,000 items perfect for every room in your house. Come save at the monumental savings event at Mathis Home. And welcome back. We've got some big China news for you. The country's economy saw much weaker expansion than anticipated in the second quarter. And this is as a prolonged property downturn and as well as job insecurity hindered fragile recovery. Here's more information on that. China's economy grew much slower than expected in the second quarter. Dragged down by a prolonged property crisis and job insecurity, it's led to expectations that Beijing may need to unleash even more stimulus. Official data showed the world's second largest economy grew the slowest since the first quarter of 2023 and missing a 5.1% forecast. The years-long property downturn deepened in June as new home prices fell at the fastest pace in nine years. Particular worry surrounds growth in retail. Businesses were forced to slash prices on everything from clothes to cars under deflationary pressure. Analysts say to expect cutting debt and boosting confidence to be the main focus at this week's third-party plenum, a key economic meeting that happens every five years. The government has been aiming for economic growth of 5% in 2024, a target that many think is too ambitious. To counteract weak domestic demand and property problems, China has already increased infrastructure investment and is focusing on high-tech manufacturing. And it appears maybe cracks are turning into craters in China's battered housing market. Property sales and investments slumped last month, plus new home prices fell at the fastest pace, I'll say this again, in nearly a decade. Prices dropped month to month, and based on calculations, price slipped 4.5% from a year earlier, and this is putting pressure on policymakers for more stimulus to prop up the once-thriving sector. China's property market took a steep downturn in 2021 and is now a major drag on the economy. And a flurry of supportive measures have been unveiled, but experts say that these are dwarfed by the scale of the problem. As well, the sluggish domestic demand is continuing to weigh on China's patchy economic recovery. Industrial output slowed last month in the world's second-largest economy, and retail sales, for example, are used as a gauge for consumption. In June, it slowed significantly from May and came in below analysts' expectations. Retail sales officially rose 2% last month. This is the slowest pace in 18 months, but even then, China is known for inflating its data. And for further analysis on the Chinese economy, I spoke to Daniel Lacaille. He's the chief economist for TRESS's hedge fund and a professor of global economy at IE Business School in Madrid. Daniel, thank you very much for your time again. Always welcome you coming back on the show. So we're talking about China today. Let's start with China's new home prices in June, actually falling in the fastest pace about nine years. So, I mean, do you think China's property sector is on a fixed trajectory down? Because all we've seen lately is bad news. Well, it's very difficult for the real estate sector to recover fast because the size of the challenge of the real estate sector in unsold properties, in half-empty buildings, etc., is very large. So right now, the only thing that the Chinese economy can do is to sort of cover itself from the blow. There is very little that the property sector can do because the level of excessive building and the level of excess capacity is so huge that we will probably see a few quarters more of slump, considering that property prices have not touched the bottom and that at the same time the Chinese economy is slowing down. So it's a very, very large challenge and very difficult to solve. And it's not going to recover anytime soon and even less so with credit measures. So, of course, the property sector is not the complete picture of the Chinese economy. It's a big chunk of it. But there's also other factors, for example, domestic demand. And we're getting data on that as well. Retail sales growth is at an 18-month low with deflationary pressures forcing businesses to slash prices on everything, for example, cars, food, clothing. Where is this all going? Well, I think that it's very difficult for the Chinese economy to go from an export-led construction-heavy economy to a technology services sector consumption-led economy. Unlike Japan, when the real estate bubble burst, the level of earnings and the level of real wages of the Chinese average citizen are much lower than in the case of other economies. Therefore, it's difficult to go from a construction-led and real estate-led plus export-led economy to a consumption economy because there's not that much of an ability of the average Chinese citizen to, let's say, start spending just to recover the economy. So, it's not going to be easy to change the model that was driven by enormous levels of debt, high consumption from the government and high levels of exposure to the real estate sector. Remember that the real estate sector has a big implication on the economy, not just directly, but indirectly. Restaurants, shops, etc. There's tremendous levels of, let's say, added impacts of that negative slump. Do you think it is possible for the Chinese Communist Party to keep its ideals, to maintain itself as it is currently and have a good economy at the same time? You know, the best that the Chinese economy can do right now is to open to the rest of the world. It's impossible to develop an economy as large as China without the rest of the world and without an open, thriving private property, economic growth and economic freedom. So, I think that they basically need to understand that central planning is not the solution, that an open economy, that an open economy with open institutions, with independent institutions, with freedom of capital and movement of capital is the solution that would take care of all these challenges. All right, Daniel, thank you very much for your analysis today. Thank you very much. Always a pleasure. Now, as we reported before, AT&T call and text logs were exposed last week following a massive data breach. The company says the hack includes phone numbers of nearly all of its users and affects information between May 1st, 2022 and October 31st, 2022. Experts say the hack is a good reminder to all cell phone users to keep their information safe. Today, we take a look at ways that you can protect your personal data. Take a look. We use our smartphones for almost everything, phone calls, emails, pictures, music and even banking. So, it's important to ensure our information is safe. Everybody should be concerned about everything they do that's connected to the internet. You're creating a footprint of who you are. Colin Walke, a cyber security partner at Hollis Stills Law Firm, says the recent hack of AT&T call and text logs shows how vulnerable all cell phone users are to their data being exposed. We have gotten far too lax, I think maybe this hack might have woken people up. Walke says you should limit the amount of apps on your phone. Every single app you download, you should seriously consider not downloading because every one that you download, you're increasing the threat surface, the number of opportunities that an individual has to hack you. Other tips include be cautious about what you're texting, don't have embarrassing or sensitive photos on your phone, don't store passwords for other accounts on your phone, make sure the microphone feature is turned off on all apps and don't allow applications to track your location. And finally, here's something interesting for you. An elderly thrill seeker is defying gravity taking to the air for some skydiving and he's doing it for the love of his life. Take a look at this. You would think at 90 years old, you'd want to slow down a skosh, but not bill rogers. Are you ready to go skydiving again? Let's do it. Yes, sir. This new hampshire nonagenarian is still seeking thrills taking to the skies recently with skydive pepper l in massachusetts for his sixth tandem jump out of a plane. Rogers clearly loves the rush, but this particular jump was particularly special. It went down literally on the wedding anniversary of rogers and his late wife. The veteran says he wanted to keep her memory alive by continuing to make memories. If jumping out of a perfectly good plane isn't memorable, I don't know what is rogers was strapped to his tandem instructor keith who enjoyed the velocity and the view with the gregarious great grandfather before they safely touched down on solid earth once again. With his memory making mission accomplished, one word seemed more than enough for rogers official reaction. Beautiful. Looks fun, right? Well, that's all the stories we have for you today. Thank you very much for watching. And if you have any feedback for the episode, just let me know. You can email me at business at ntd.com or simply leave a comment online. I do read them and thanks again. We'll see you back here tomorrow.