Crop of report since the great depression. With the Interest Rates lows its to surprise the financials have been the worst performing sector this year. The unofficial start to earning season kicked off late today. The former component beat wall streets estimates earning 7 cent a chashare. Expectations were for 2 cents. That pressure shares in initial afterhours trading. The company, which was planning to split, is on track to meet its targets. If you look at this quarter, you see profits are up in all the the segments. Iconic is the name we have given to the value at company that we would soon launch. You also see on the commodity side the two segments holding up and are profitable inspite of the very strong market side with low prices. Susan lee has more on the quarter. Reporter the main take away from alcoas earnings was miss in revenue for the quarter which means when it comes to profit owes more to cost cutting than higher sales. Part of the cost cutting has been layoffs. Confirming that they reduced their work force by 600 in First Quarter and plan on further reduction of 400 and considering laying off another 1,000 in the year. When it comes to Global Demand they are revising down. Heavy truck production. Alcoas ceo confirming they will still split off into two companies in the second half of this year. Still not confirming a specific day for the split the shares have been down in 2016 but rebounding close to seven year lows in january. For nightly business report, im susan lee. Despite the expected profit pain, is it still possible for the recent market rally to continue . We take a look. Reporter as companies prepare a Third Straight quarter of profit decline, investors are g to figure out if stocks brace for the bad news. The s p 500 is down about 4 from the all time high in may 2010. This implies stocks havent fully priced t pain. Financials energy and basic materials have dropped. Some of the markets stronger performers lately such as Consumer Staples might have trouble shrugging off but exp t mediocre results. Market strategists point to a couple of ways they count weather a tough season. Corporate profit cycles could be bottoming now leading to a revival in the second half of the year. This is already baked into wall street estimates. The u. S. Dollar could drop more as the Federal Reserve proceeds cautiously on Interest Rates easing pressure. Before we find out if these trend take hold, hundreds of Big Companies will report the results and offer clues about whether this earnings recession might soon end. As we mentioned earlier, the Financial Sector is the worst performing group this year but could things in this earning season bring much needed relief to the bank and shareholders and jump start the stocks . Michael favre joins us. Hes president of a Money Management firm. Good to see you as always. Thank you. Great to be with you. Where do you think we are in the cycle for the big banks . Are we near the bottom. I think valuations are getting compelling. A lot of stock prices stayed the same were down 22, 23, 24 for a lot of companies. The bank stocks have a lot of head winds but the valuations are showing it. Its a bit like when i was on the program and you asked me about oil at 28 a barrel. I said i think you buy it when its low. These things are low. At 1. 3 times tangible booked for a lot of larger banks with a 2. 5, 2. 6 dividend, i think theres money to be made here. You point out the dividend yield but use it as portfolio insurance. It sounds interesting. If you think about portfolio insurance against inflation or higher rates, i think thats where they work. If Interest Rates go up, one of the Reasons Bank Stocks are down is because the fed moved from the four Interest Rate hike that they promised earlier and now looks like well just have two hikes. Higher Interest Rates and a steeper yield curve are good for the banks earnings. Its hard for them to earn money. If rates go up, therefore, banks ought to do better. A little more inflation might not be good for some other Asset Classes but could be good for the banks. If youre getting paid the dividends you could get paid while waiting. You gave us a few names, pnc and goldman. Why do you like pnc . I think the valuation is good. I dont think they are particularly exposed to the Mortgage Market that a lot of other big banks are. You can see the stock prices suffered. 2. 5 dividend relative to the treasure market is attractive. Jpmorgan. You like the diversification of its business but you point out management. You like management. I think jamie diamond is the best bank manager in the world. I think hes been much vilified. I think he was man handled by the government through 2008 and 2009. Ive talked with him about it. He think he was man handled too. I think the banks Balance Sheet is solid. To buy a bank like jpmorgan at this price with a 3 dividend. The tenyear treasury is paying 1. 7 something percent and i can own jpmorgan at a discount, thats compelling. All right. Wel leave it there. The third pick was goldman. Appreciate it. Good to see you. Thank you. On wall street today, stocks gave up gains on this unofficial start to earning season. Dow jones has been up as much as 154 points finished down. The nasdaq dropped 17. The s p 500 was off five and its now lower for the year. Oil prices climbed back above 40 a barrel for the first time in nearly three weeks as hopes rose between an agreement of producers that will produce global supply. The average cost to fill up your tank nation wide climbed 8 cents in the past three yeweeks. A gallon of regular grade costs 2. 10 a gallon. Thats an increase from midfebruary. Far of the reason is u. S. Refiners are converting to summer gas. That costs more to make. If youre in tulsa, oklahoma you can find the cheapest gas. The highest is in los angeles. That broader decline in commodity price is what prompted the proposed merger between Canadian Pacific and norfolk southern. Today the deal ended abruptly. Canadian pacific said they will not pursue it. Late last week we reported that the u. S. Military had raised concerned that the deal could adversely affect the countrys national defense. In washington, jabnet yelle had a rear meeting scheduled with president obama. Progress being made on reform in wall street. Goldman sachs agreed to pay more than 5 billion dollar to federal charges of deceptive mortgage practices. Similar to other deals, no individual Bank Employee is being held responsible. This is the fifth agreement reached by a panel put together. Today he once again faced a grilling. Some people have asked if this trust was legitimate, why did you schedule shares in january 2010. Mr. Speaker, i saw all the shares in my portfolio that year because i didnt want any issues about conflicts of interest. I did not want anyone to suggest that as Prime Minister i had any other agendas or vested interest. Selling all my shares was the simplest way to do that. There are strict rules in this house. I followed them in full. Cameron has come under intense pressure since his father was identified as a client in the Panama Papers. Robert frank joins us to discuss what he has learned. Its good to see you. Good to see you. Theres one painting in particular that has come in focus. Which one is it and whats the history behind it . This is a 1918 painting. Its called seated man with a cane. It was owned by a perisian art dealer. It was stolen. The family is suing one of the royal families of the art world. They have galleries in london and new york. What is the history . They are very influential. I heard the name before. They are a multibillion dollar family. They own hundreds of the most important works. He was charged with a gambling ring a couple of years ago. We have learned from the Panama Papers they also owned an offshore Company CalledInternational Art center which it turns out is the owner of this. There were questions throughout this court case of who was the owner. It turns out they own the company that does own it. Okay. I think ive got that. Its complicated though. It is a little complicated. You have the family of the owner saying we have proof they own this picture. The attorney telling me, look, its irrelevant who owns it. What you have to prove is that your family owned it back in the 1930s and that it was stolen from you by the nazis. Thats hard to prove. Is that where this is going . Is this the tip of iceberg as we get more releases from the Panama Papers . Do you expect to see more of this . Absolutely. Its billions of dollars worth of art that was bought, sold, currently owned through these secret offshore companies. A lot more to come. Which means youre going to be really busy. Im going to be busy. Thank you. Appreciate it. Still ahead, pay cuts. Ceo compensation may have shrunk the most since the financial crisis, but theres a unions representing about 40,000 verizon employees say they are ready to strike this a new contract isnt reached by wednesday, theyll walk off the job. The employees, most of whom work on land line phones, have been without a contract since august. Verizon has trained nonunion employees to cover their jobs. In 2011, a strike lasted two weeks before a new contract was negotiated. A very public battle inside pulte homes is heating up. The hiring of the ceo was perhaps, quote, the biggest mistake of my career, end quote. Last week he said he would resign but in may of 2017. For the founding family, thats not enough. In a letter to the companys board of directors, pulte wrote to consider letting richard stay another year as lame duck ceo puts the personal interest of richard ahead of the interest of the company. The board is telling shareholders just how out of touch they are. John is the Portfolio Manager with point view wealth management. Its good to see you once again. Welcome. Thank you. Those were very costic reports. Sometimes it doesnt get this bad but its a good example of how bad things can get. What do you know if you hold that stock or its a widely held stock, it could be in your mutual fund. They say pulte. You have to ask yourself this one question. If i didnt own the stock now, would i buy it . Most people will not own pulte homes. Youll own a home builder with exposure to the Housing Market. You think Interest Rates are low or supply is strong, not because of the ceo. The board seems to be siding with mr. Dugas. Thats more than just the ceo. Does that change the dynamic a bit. Its true. Its a unique situation. Were in a world of activist investo investor yo people that are going into boards and shaking it up. Here you have the ordinary reason shaking up his own ceo. Its really unique situation. Were not owners of the pulte homes. Investors should look at whats the Business Model youre buying it. If you think the stock has upside before you owned it, its a time to add to your disposition. Its a very competitive market space that pulte homes occupies. Do you look at the competitors and see how those stocks are doing compared to pulte given the circumstances they find themselves in. Theres so many ways to play the Housing Market whether its on the supply side, a usg or a home builder like dr horton or toll brothers. You have to compare the valuation. What do you make of the fact that activists investing is gaining so much traction. Its one of the major stories for the last two years. As an investor who manages other peoples money, do you find it works as an advantage because in the stocks or is it a net negative . I think its a double edged sword. An active investor will keep the board on its toes. Once a board falls asleep at the wheel for too long, you know a someone like that can come knocking on the door and most boards dont want to deal with a headache like that. I can understand. Thank you so much. Good to see you. Thank you. All right. Hertz global lowers revenue guidance for the year. Thats where we begin. The Car Rental Company cut earnings and revenue forecast sliding slow demand and excess capacity. The ceo says pricing pressures late last year further intensified this year. Shares dropped more than 11 to 8. 59. Tesla is recalling the model x suv after finding the third row backseats could fail in a car crash. A test revealed the defective latch that may cause the seats to fall forward. They were built before march 26th. Shares fell a fraction to 249. 92. The Parent Company of british newspaper the interested in making an offer for the tech giant. Verizon communications is expected to submit a bid for yahoo by the april 18th deadline. Shares rose a percent to 36. 48. In an effort to deal with low commodity prices, National Oil Well kwut cut its quarterly dividends. The Oil Field Services provider expects the revenue for the First Quarter to fall about 20 . Shares fell 6 to 27. 32. Shares of underarmor took a beating after golf star suffered a blistering defeat at the masters tournament. Morgan stanley cut price target on the stock to 32 from 64. Shares of under arm are down more than 5 to 41. 15. A widely cited report shows americas top ceos saw their pay shrink by the most since the financial crisis. As Mary Thompson reports, theres a lot more to it than that. Reporter paper top executives fell 4 in 2015 in 2014. This according to a review. The annual report of companies by the wall street journal. Before anyone thinks this reflects the performance, keep this mind much of the pull back and ceo pay is linked to a drop in the value of their pensions. The pensions saw gains in 2014 because of adjustments for longer life spans. This is why median pay fell to 10. 8 million last year. Why the decline is the largest, ceo pay at this level is still the second highest since 2007. Ceos did get a nice boost in the stock incentive. Their short term or cash rose 2 . Small gain reflecting 2015 performance. Over 290 times that of the average hourly worker. Who earned the most . Ceos new to the job are excluded here. There were some familiar names at the top of the list. The top three earning more than 53 million each. Viacom saw an increase this pay as the term total shareholr declined. His pay cut by 2 million despite a good performance by the house of mouse. Who got the least . Whole foods took home a buck. For nightly business report, im Mary Thompson. Coming up, think small. Very, very small. Why the u. S. Finds itself in the throws of a big boom in tiny houses. The first vaccine candidate for the zika should be available in september. The impact of the impact of the zika virus is wider and funding is needed. Were going full blast by drawing money from other areas. Thats how we started. The money thats been transported from ebola accounts will help bring us further but still not what we want. We needed 1. 9 billion. Officials say the type of mosquito in which the virus is carried is present in more states than first thought. United health care will not offer any health plans on georgias state Health Exchange next year. Its the only insurer thats notified the state of the the plan not to participate. You might recall last month we told you about a report that concluded patients on the exchanges were sicker than others and questioned whether insurers would be part of the Affordable Care act long term. Mortgage investor is buying hattarus financial for about 1. 5 billion. Both companies are structured as Real Estate Investment trusts. Shares soared better than 10 , close to 11. This next story takes the concept of downsizing to a whole new level. Some homeowners arent just going smaller, theyre going ti tiny. Its part of a new movement in housing thats gaining in popularity in parts of the country where home prices arent that steep. Diane has the story. Reporter even when kwloyou talking tiny, size matters. The very design are all their own. Ryan mitchell owns a tiny house in charlotte, North Carolina and touted tiny living at a conference he organized recently. People are very skeptical. When you step into somebodys house like we have here at the conference, things just kind of click. I have lived here for four years. I built it myself. Reporter alisha built her 24 scare fo square foot home for 200. Theres no room for a fridge so she uses a clay pot to school her food. Inside i have some yogurt and cheese now. Reporter she saved her earnings to pay off Student Loans but the inspiration behind the house was growing up with hoarders. That made her think small. Stuff doesnt necessarily make your life happen. For me, happiness is the freedom to be able to go where i want and do what i want and be able to help people because im not attached. Reporter if thats too tiny nor for you, 200 square foot bus might seem homier. They converted it into their home for about 17,000. Its oneeighth the size of their last home. The effort and time it took to maintain a large house and we had it filled with a lot of things that we didnt necessarily need. Reporter as for the mcmansions of tiny, they measure in about 340 square feet. This will soon house a family of three. Mike and jasmine designed their space for home and office. A tiny headquarters for their fitness business. After paying off the not so tiny 70,000 price tag, theyll save hundreds of dollars a month in rent. You can take that rent money, put it into something thats custom for you and if you really put the thought into it, it can be something that will really pay off. Reporter home, office, it even triples as a gym. Living tiny can mean living large. For nightly business report, im diana in washington. To read more about the attraction of tiny homes head to our website. That does it for us tonight. Im sue herera. Thanks for joining us. Well see you here tomorrow. Announcer imagemakers is made possible by the members of kqed. [ indistinct news announcing ]