Drop in quarterly sales, and it lowered its Earnings Guidance for the year, something many investors dont want to see heading into the Holiday Season. And that sent shares lower, falling nearly 14 , its worst day since 2008. Courtney reagan has more on macys meltdown. Reporter for the second straight quarter, the magic was missing at macys. The Department Store beat profit expectations but reported disappointing sales and cut its fullyear earnings forecast. Ceo Terry Lundgren said many of the issues that plagued them during the year have gotten worse, including declining Tourist Spending at its highest volume and most profitable bigcity stores and unseasonably warm weather crimping sales of coldweather merchandise. The reality is, particularly in the northeast, it is much warmer this year than last. And so, we expect thats going to continue. Thats not going to those things are just not going to change dramatically, i dont believe. And at some point in time, you run out of days to sell through the inventory, because december 27th comes and volume just drops off precipitously. So, earnings is forecast down for Fourth Quarter because were going to take markdowns. I mean, great for consumers. Consumers are going to have a field day. Reporter macys also said sales of merchandise like handbags, jewelry and accessories also slowed. While macys stock posted its biggest loss in more than seven years, not every Analyst Thinks it spells trouble for the long term. Its still a very powerful place with great vendors, great brands, a very attractive online business, very steady Free Cash Flow generation. So, i think theres a place for macys in the long term, but just acknowledging the near term, there is some pressure, and the companys really trying to figure out the right strategies to insure that theyre relevant to customers for the near and long term. Reporter not every retailers still waiting to report results will be hurt to the same degree from warmer weather and lower Tourist Spending. Last quarter, when analysts asked nordstrom if declines in tourism was an issue, they said while they have tourists in their stores, its not a discussion point. Ahead of their full Earnings Report on friday, jcpenney reported stronger than expected samestore sales. It is a bet that t. J. Maxx, ross stores and burlington will be less affected by weather issues and retailers like lululemon and American Eagle that report later can point to better trends as the weather does get cooler, but theres still a full Holiday Season ahead. Anything can happen. For nightly Business Report, im Courtney Reagan in san francisco. And a bit later in the program, well find out just how much heat the broader Retail Sector will feel from this warmer weather. Its a done deal. Anheuserbusch inbev is acquiring rival sab miller. The deal would create a massive global beer company that will sell nearly one in three beers worldwide. As part of the deal, sab miller will sell its stake in miller coors to molson. On wall street, that merger deal wasnt enough to offset the decline in macys and the other retailers, which pressured the broader market. Investors also sold shares of Energy Companies on a 3 decline in oil prices. So, by the close, the Dow Jones Industrial average fell 56 points to 17,702. The nasdaq dropped 16 and the s p 500 was down six. Spending records were smashed in china. Ali baba reported blockbuster sales during its singles day Online Shopping event. We told you last night that sales started out strong, and tonight we can tell you that they finished that way as well. Totaling 14 billion, better than expected, and a 54 gain from last year. Eunice yoon reports from the event in beijing. Reporter Chinese People greeted each other on the singles day with the question, did you buy . The numbers were impressive. Ali baba clocked 14. 3 billion of sales on its site. Thats a record with over 460 million transactions. Singles day is a sort of an antivalentines day here. The allure is that University Students got together to buy each other presents, but ali baba turned the day into a monster Consumer Shopping extravaganza, and executive chairman jack moss said this shows that consumption here is on the rise, even though he does see trouble for the economy. I think the problem of china is we have to know that its not its impossible to keep on growth for 8 and 9 every year. This economy is transforming. So, what we will see is the next five to ten years china should pay much more attention to the quality instead of the quantity. Reporter some of the best sellers today, phones, cadillacs and nike shoes. Out of all the countries, u. S. Products saw the biggest overseas sales by chinese buyers. Ali baba hopes to make singles day global, possibly bringing it next to new york or to london. For nightly Business Report, im eunice yoon in beijing. They also addressed counterfeit products on ali babas site and said hes not concerned that the fakes will harm the companys global ambitions. We will continue to work. I think if we are not the best, we are the largest troop against and fighter against this counterfeit products. And i will continue to work. Give us some years. Give us three, five years. We will give the world a wonderful response. Jack may be chinas wealthiest man, but jeff bezos is climbing the list of the worlds richest, edging past mexicos carlos slim to take the number four spot on the list. By some estimates, bezos fortunate tops 58 billion. His net worth has more than doubled this year, helped by a more than 110 gain in shares of amazon. Daily Fantasy Sports companies are out of luck in new york. The attorney general has demanded that the two largest operators, draft kings and fanduel, stop taking bets in the state, because he considers them illegal gambling operations. Dominic chu has more on the latest setback for this fastgrowing industry. Reporter daily Fantasy Sports, is it or isnt it gambling . Well, the new York Attorney general says it is gambling and of the illegal variety and that their business violates the law. And this is the most Important Development in the debate over Fantasy Sports to date for one important reason. The state of new york is critical to both fanduel and draft kings. Not only is it 10 , approximately, of their overall business, but in addition to that, again, new york is the hub of finance in america, in the world reporter a central part of the raging debate over daily Fantasy Sports is whether or not its a game of skill or just wagering on an eventual outcome. Supporters of daily Fantasy Sports argue that there is research and strategy thats involved in creating portfolios, or lineups of players, to compete against others. Opponents say that these are shortterm exercises designed to cater to instant gratification of winning money and that theyre different than traditional Fantasy Sports that require hours of preparation and weeks of commitment. Now, regardless of the view, everyone is trying to figure out how to deal with emerging Product Companies like fanduel or draft kings. Draft kings board member hadi nada sees the challenges that lie ahead. Startups are disrupting the world, right . Youre seeing it with ali baba, with amazon. Startups are disrupting the world. And Many Companies are running into these issues, whether its airbnb or uber, have very similar issues that were dealing with. The traditional infrastructures illequipped to handle these startups, and i think this is one aspect of that. Reporter new york becomes the sixth state to demand a ban on daily fantasy wagers. So, how do new yorkers feel about the ban on these daily Fantasy Sports sites . Those guys are taking some leadership on this and kind of getting ahead of the curve and maybe try to save some people from getting into trouble. I honestly dont see anything wrong with it. I think its skills. Theres lots of data and analytics and statistics that go into that. Its not betting horses. Reporter the next chapter of this story involves what promises to be a lengthy legal battle between site operators, like fanduel and draft kings, against state governments. Should they be regulated like the lottery, horse racing or even casino gaming . Ultimately, though, it may come down to just money and whether the states ability to regulate and tax daily Fantasy Sports opens up the door for play to resume. For nightly Business Report, im dominic chu. Fanduels ceo says his company will use every avenue we can to stay open in new york and that a court would disagree with the new York Attorney generals decision. Comcast ventures and nbc Sports Ventures have stakes in fanduel. Comcast is the Parent Company of cnbc, which produces this program. From fantasy games to video games, Activision Blizzard says black ops made more than 500 million in worldwide sales in its first three days of release. The company says this is the biggest entertainment launch of the year, including theatrical box office, music and books, and that sent shares 2 higher in trading today. Still ahead, keeping tabs. A deal is reached to better track flights over the oceans, but theres one company thats already working on a new system. A new vaccine may be able to prevent high cholesterol. Researchers at the National Institutes of health and the university of new mexico say an earlystage study shows promise. The new vaccine has significantly reduced ldl cholesterol, or bad cholesterol, in both mice and monkeys. About 73 million American Adults have high levels of that bad cholesterol. World nations struck a landmark deal that would use satellites to track planes in the air. The agreement was reached at a United Nations conference and would dedicate part of the radio spectrum to a global flight tracking system. The move is an attempt to prevent a repeat of the disappearance of Malaysia Flight 370, and it updates the current radar system. Phil lebeau tells us about one company thats already working on satellite tracking technology. Reporter every day, more than 93,000 commercial flights are taking off and landing around the world. The vast majority are tracked almost constantly by groundbased radar, but what happens over large stretches of oceans or when flights cross the polar region . At Rockwell Collins in annapolis, maryland, a new system, called multilink, ensures planes can always be monitored. Any aircraft thats flying anywhere in the world, if it deviates from its course, the systems going to report that to the airline back office. Reporter heres how multilink works. Depending on the flight and its location, separate radar and satellite systems are sending and receiving signals from that plane, but those systems dont always communicate with each other. Multilink takes all of those signals to track where a particular plane is flying and if it is on its designated flight path. If its not, multilink alerts an airline that something has changed. A very important attribute of the system that we have is an aircraft monitoring function. So, in the event that aircraft were to go off course, off its intended path, we can immediately alert the airline that thats occurred, and they can contact the aircraft to try and understand whats happened. Reporter for nightly Business Report, im phil lebeau. We begin market focus tonight with an update from jcpenney on a classaction lawsuit its facing. The retailer says that it will make 50 million available to settle a suit that accuses the company of tricking customers into thinking that they were getting big discounts on some of its items. The company also said that despite the impact of that settlement, its still pleased with the results, which will be released soon. Shares fell nearly 2 to 8. 52. Kroger announcing it will purchase a smaller Supermarket Chain called roundys in a deal worth about 800 million. The ceo says theres an important strategy behind the move. We really view this as a perfect fit from a geography standpoint to kroger. A lot of synergies and a great group of stores. So, we cant wait for the associates to become part of the kroger family. We think this is a much more efficient way to go into a new market, and they really have a great market share. Shares were off a fraction to 37. 03. Iac interactive has offered more than 500 million to purchase the customer reviews website angies list. Iac owns match. Com and other dating services and says that angies board was uninterested in the proposal. No word from angies list on the matter yet. Angies list saw its shares surge in initial afterhours trading. During the regular session, it was up 1 to 7. 92. Iac interactive was pretty much little changed. Paypal took a hit in todays session in a wall street journal report. According to the journal, apple will roll out a mobile persontoperson Payment System thats similar to paypals service venmo. Shares fell nearly 2 to 36. 33. More signs of softness in the art market that we reported on last night. A number of works at a christies auction went unsold or sold for below the guaranteed price. For instance, the andy warhol fetched 32 million, and it sounds like a lot of money, but christies agreed to pay the seller 40 million, meaning they have to pay the difference. While some pieces werent profitable, others didnt sell at all, like this one priced at 6. 5 million and this warhol, among others. As we reported earlier, the warm weather was one of the reasons why macys reported a weak quarter. When temperatures increase, consumers are less likely to buy winter clothing. Temperatures have been above normal, and according to the weather company, are expected to stay that way this month for much of the nation. Paul walsh joins us. Hes Vice President with weather analytics, analyzes weather impact on spending trends, and he joins us tonight. Good to see you again, paul. Welcome back. Hi, thank you. So, how much warmer is it in most parts of the nation than it normally is at this time of year . Well, across the entire eastern half of the country, its been, especially the northeast and midwest, which is really where it matters as it relates to national retailers, its been 10, 15, even 20 degrees warmer than normal, which is obviously very unusual for november and really bad news for Department Store retailers, as we are seeing. Yeah, we have seen Department Store retailers use weather as an excuse in the past, and i say excuse in quotes, but this time it sounds like perhaps there really is a legitimate reason why consumers arent buying. Yes. Will they, do you think, get off the couch, though, as we get closer to thanksgiving and closer to christmas . Yeah, they definitely will. And theres two things that are going on for this november. Number one, last november was one of the coldest on record. So, we saw really strong sales in november of last year. This year, the absolute opposite is happening, so people are just not getting off the couch, because when it feels like if its 60 degrees in new york in november, it doesnt feel like winter and people arent shopping. The good news, though, is that as we move into december, were going to be up against unusually warm weather last year, so whats going to happen is that demand curve is going to shift to the right, and i think were going to see these sales happen. Theyre going to happen very, very strongly, i believe, as we get into the Holiday Season. Unfortunately for a lot of the retailers, though, thats often too late. Right, and theyve already heavily discounted. Exactly. The other challenge that were going to have as we move into december is that we are experiencing this el nino sort of condition, which means that oftentimes with that you get a lot more rain and even snow. And thats really the biggest challenge for retailers as we move into december is precipitation on a weekend. Thats what keeps people home. Cold weather doesnt keep people home. We did some surveying last week. We found that it needs to be really, really cold before people dont go shopping. But if its raining or snowing, people will stay home, and those sales will be lost. Yeah, theres no fun walking through the parking lot when its raining and snowing. Paul, thank you. Paul walsh with weather analytics. Thank you. And coming up, how some veterans are going from the battlefield to the Business World and becoming their own bosses. But first, a look at how commodities and currencies fared today. The treasury market was closed for veterans day. Heres a look at what to watch for tomorrow. Dow component Cisco Systems will report earnings. Lots of fed speak, including a scheduled speech from fed chair janet yellen. Two reads on the health of the labor market with jobless claims and the job openings and Labor Turnover survey. And thats what to watch for on thursday. Years ago, managing your investment portfolio was easy, for the most part. You invested 60 in stocks and 40 in bonds. But in todays environment, our next guest says this traditional Asset Allocation may no longer work and could be putting your retirement nest egg at risk. He is scott puritz with rebalance i. R. A. Scott, welcome. Nice to have you here. Pleasure. So, what has changed . Why does the 60 40 formula, which so many people have relied on for so long, no longer apply . Well, there are really two major reasons why this classic rule no longer applies. First, Interest Rates are at historic lows. With u. S. Treasury trading around 2. 2 , that is at historic low, and 97 lower than any time in american history, other than after world war ii. And second, americans are living dramatically longer. So, the combination means that the old rules are not only out of sorts but downright dangerous. So, you advocate that people in their 50s and 60s who by the old rule might be moving more into fixed income or more conservative investments, conservative in quotes, should have, actually, more exposure to equities. Lets take a look at what youre recommending here. So, if youre in your 20s and 30s, 100 , 40s 90 to 100 . Correct. But when we get into the 50s, 60s and even 70s, thats a fairly sizable allocation to equities. Its about balancing risk between the risk of volatility in stocks and outliving your money, if investors go too early into bonds and fixed income with historically low Interest Rates. You know, do you have to stay domestically for this kind of equity allocation . I mean, now the world is also much bigger in terms of investment opportunities. So, if, perhaps, you think our stock market has run its course with a bull market at some point in time, would you recommend looking for equity exposure in markets outside of the u. S. . Yes. We recommend that Retirement Investors be globally diversified, and the best way to have equity exposure is through lowcost index funds. All right. On that note, scott, thank you very much. With rebalance i. R. A. Well, opening a business isnt easy, whether youre a wellknown entrepreneur or someone just starting out. Kate rogers is back tonight at the iconic entrepreneurial conference in our Nations Capital with some of the challenges facing business owners, big and small. Reporter o matter how successful they are, entrepreneurs still struggle with their own daytoday challenges. At the cnbc and inc. Magazine iconic tour in washington, d. C. , kenneth cole told the crowd hes still proving himself to customers three decades into the game with his namesake brand. Every day youve got to look around and figure out, am i still relevant . And if not, why, and what do i need. And the universe today is so everybody who exists everywhere is an alternative. And ive been doing this for 30 years. So, i believe after 30 years, ive earned the right to be considered, but every day i have to earn the right to be chosen. Reporter and burt jacobs admits retail is still a challenge. Despite growing his tshirt business into a 100 million brand. Its a tough market, and i think that too many retailers are talking about how to engage and create community but are still just hanging things in the window and hoping they have the right brands. So, we really need to make changes and were trying ourselves in that area as well. Reporter entrepreneurs here on the ground found inspiration in hearing from these seasoned vets and also shared some of their own growing pains. The main challenge is to continuously innovate and tell about yourself through the community. One of the other things that the growth challenge is finding great team members who are going to be able to support the business as it grows, who are going to being to take over parts of the things that im really not supposed to be doing. Our biggest challenge as an entrepreneur is probably access to capital. We have a lot of good ideas. Weve been fortunate enough to succeed in where we are today. Once you get over that few million, 5 million sort of threshold, there are some big ideas and its going to take capital to get us there. Reporter but despite the ups and downs of running a business, for many its worth the ride. For nightly Business Report in washington, d. C. , im kate rogers. And on this veterans day, there are more than 3 million veteranowned Small Businesses across the country. Thats according to the Small Business administration. For some, opening a business allowed them to continue using their leadership skills learned in the service. For others, its a way to turn their lives around. Dina gusoffski reports. Reporter from the front lines of war to battling the Business World, americas veterans are taking an interest in owning their own businesses, especially franchises. Its scary. You know, i was in the military for 20 years, and youre always told what to do, where to be, how, and you know, theres an anxiety of, you know, that safety net isnt going to be there anymore. Reporter Diana Walters served in the marines for 20 years, and just six months ago started her own franchise by buying into housemaster. Were a Home Inspection business. I mean, we come in when someone wants to purchase a home or sell a home. We will come in and we will go through the house and we will look at safety issues, and were going to give them a report. Reporter the business made it into the top five of franchise business reviews list of the top 100 franchises for veterans. Pinos palate, a paint and sit franchise was at the top of the list. Rankings are based on feedback from franchise owners, including data on how much the owners enjoy operating the business, whether they feel valued and if they trust their franchiser, among other things. These are a couple canvases i brought in. Reporter Scott Drummond opened his first studio in brooklyn, new york, just a few months ago. I was in desert storm. I was exchanging enemy gunfire, i had rounds land next to me. I would say many veterans would do the same. I would encourage you to look at many franchises out there, see what fits for you, see what makes you feel happy and just go for it. Reporter many veterans have had a tough time transitioning back to civilian life, and the help in pushing that adjustment has increasingly gone from creating any Employment Opportunities to ones where veterans can become their own bosses. And finally tonight on this veterans day, if you are a veteran, a number of restaurants are offering discounts to show their support for the men and women of the military. They include applebees, buffalo wild wings, california pizza kitchen, olive garden and starbucks, among many others. And that is nightly Business Report for tonight. Im sue herera. Thanks for watching. Have a great evening, everybody. And well see you right back here tomorrow evening. Narrator tonight on quest, discover the earths critical zone, where rock meets life, and learn why climate researchers are so interested in revealing the secret life of a raindrop. And what do particle accelerators, also known as atom smashers, actually do . Quest explores the Important Role that bay area scientists had in designing the machines that reveal the most essential mysteries of the universe. And get a crabseye view of life in a pacific tide pool. Announcer support for quest is provided by
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