Economic relationship with china, one of its most important trade partners . Modern medicine. Predicting the next epidemic is no easy task. But the medical community is working together and making advances like never before. Those stories and more tonight on nightly Business Report for thursday, december 22nd. Good evening, everyone, and welcome. The economy is feeling the holiday cheer. Economic growth defied forecasts for the third quarter, coming in stronger than previously thought. The Gross Domestic Product, the broadest measure of goods and services produced in the country, grew 3. 5 from july to september, the best quarter of growth in two years. But despite the strong report, the overall reading for 2016 is not expected to impress. In fact, the Federal Reserve sees the economy growing about 2 for years to come. And many wall street economists tend to agree. The president elect has a different view. Steve liesman takes a look at the diverging outlooks. Reporter what president elect donald trump introduced as had he economic plan included this were bringing gdp from 1 , which it is now, were bringing it up from 1 to 4 and i actually think you can go to 5 or 6 . Reporter wall street economists, having plugged those plans into their models, arent nearly so optimistic. They dont see 6, 5, or 4 growth. They dont even see 3. The average of 13 economists polled by cnbc sees Gross Domestic Product coming in at 1. 7 this year, rising to 2. 3 in 2017, then 2. 5 in 2018. There are some gains but not nearly as much as the president elect estimates, at least not in the first couple of years. Some economists say they dont have enough info to make a detailed forecast or that the programs wont have the size or the bang that trump expects. Tax and spending only. We had an add to basis points 20 per year. Even if you take the whole thing, in our opinion it doesnt it doesnt add up to a whole lot. We can revisit the number if the plans turn out differently than what were projected. Reporter virtually all economists point out there are positives and negatives or red light green light aspects to trumps policies. The positives include Infrastructure Spending, deregulation, and business tax cuts. But economists worry about higher inflation, higher did he have sideficits, even a stronge dollar. Tromp adviser Kellyanne Conway says dont sell trump short on his economic goals. Every time people bet against donald trump, theyre quickly and sorely disappointed. Economically thats true as well. Reporter but this is more than a contest between the president elect and economists. Its between the optimistic stock market and the less upbeat view of the economists. If economists have it right, then the market could be taking in more growth than trumps policies can deliver. For nightly Business Report, im steve liesman. Since the election, the dow has climbed 9 on expectation of regulation reduction and fiscal stimulus. Eamon javers is in washington. Eamon, is it possible wall street isnt understanding the incoming administration, if so how . Hi, tyler. I talked to someone earlier this week who is very familiar with the Trump Administration who says they dont necessarily think wall street understands what trump is doing. Theyre operating under the assumption this will be a lot like republican administrations that weve seen in the past. Thats not necessarily the case. This person is saying, bowing at the altar of free markets is out. Companies have done things like offshoring jobs, tax inversions and the like. That will not necessarily fly in a Trump Administration, this person said. This is not going to be a traditional republican government. And citing trumps ability to go after and tweet after specific individual ceos of specific individual companies. Tyler, i should tell you, we got another example of that just this evening from donald trump who tweeted out, based on the tremendous cost and overruns of the Lockheed Martin f35, i have asked boeing to price out a comparable f18 super hornet. You see donald trump pitting boeing and Lockheed Martin against each other in these yearslong defense projects, not something weve seen before in a president elect or president of the United States. It certainly isnt. Can we, from the statements we heard not only from the president elect but from the person you talked to earlier, is it possible to start figuring out who the corporate winners and losers might be in this new administration . Sure. This person said the big losers will be crony capitalists. He says if you go to sleep at night and think you might be a crony capitalist, you probably are, and you wont sleep well during the Trump Administration. Figure out what it means in Donald Trumps view and you might have a sense of who the winners and losers are. Eamon, thank you very much. The dow suffered its first backtoback loss in six weeks. The blue chip index dropped 23 points to 19, 18. Nasdaq was off 24. S p 500 full four. Beijing says it will monitor the policies of the incoming Trump Administration. It says as two major powers, cooperation is the only correct choice. The statement comes as donald trump appoints peter navarro, a long time china critic, to run a new trade policy office in the next white house. And in a recent interview on cnbc, navarro talked about trade with china. What donald trump has said is that we are going to use tariffs as a negotiating tool, not an end game, to force countries like china, half of our trade deficit, hes called them the biggest cheater, hes right, to force these trading partners to stop their currency manipulation and illegal subsidies, to stop the intellectual property theft that takes 300 billion out of our economy. As we reported yesterday, donald trump also named billionaire investor carl icahn a special adviser. In an interview today, icahn highlighted a trade war with china as a potential risk to the market. Obviously if you get into a trade war with china, sooner or later, i think were going to have to come to grips with that. Maybe its better to do it sooner. But thats not my decision at all. Donald trump has threatened to impose a tax on chinese goods and label beijing a currency manipulator. Our next guest says a trade war with china and perhaps more is coming in a phrase, he says, buckle up. Scott kennedy is director of the project on Chinese Business and political economy at the center for strategic and International Studies in washington. Mr. Kennedy, welcome, good to have you here. When you say a trade war with china and perhaps more is coming, what does the perhaps more refer to . Were certainly seeing, since the election, donald trump being willing to push chinas buttons on a whole variety of issues, not just on trade issues, that were the topic of the campaign. Weve seen him push on taiwan, on the south china sea, hes talked about north korea. There are certainly other areas which he could push. And he certainly is allowing economic and Security Issues to mingle in a way that we havent before. So it doesnt look like were just gearing up for a traditional tete a tete on Security Issues but a broader conflict. Its a hard line team. Mr. Navarre o has had some very strong words about china. Its not just the president elect but those within his cabinet and advising him. Sure. Sure. I think if you, you know, have a chance, any professor would love folks to go out and buy their books, and now theres a good reason to buy what hes written. For navarro, china is not a problem. Its the problem that the United States and the Global Economy faces and needs to be tackled front and center. I think everybody has been frustrated with china the last several years. And thinks that more action is required. It just looks like donald trump is amassing not only the team, which includes navarro, but the weapons to push china on many fronts all at the same time. Is mr. Trump right . Do the chinese cheat . If they do cheat, why shouldnt we push back . Sure. Its definitely true, as you look at subsidies, other types of Chinese Industrial policies, lack of market access, yes, theres ways the chinese are not meeting their commitments they made to the u. S. And the wto. The question is whats the best response. Certainly strategic patience, which the Obama Administration has applied, hasnt worked quickly enough. But do you go to the other extreme which trump seems to be suggesting, sort of an allout trade war, all or nothing . Or do you try and be more careful, prioritize what you want to achieve, and aim for some middle ground . Scott, we have to leave it there. Im sure its going to be an ongoing conversation. We hope youll join us again, Scott Kennedy with the center for strategic and International Studies. In a tweet this morning, donald trump called for more nuclear weapons. He said, quote, the United States must greatly strengthen and expand its Nuclear Capability until such time as the world comes to its senses regarding nukes, end quote. Upgrading the countrys Nuclear Arsenal would be a costly proposal, involving more spending on defense. And thats a sector, as you probably know, he has paid particular attention to recently. As Morgan Brennan reports, for investors, nukes carry a lot of not so obvious risks. Reporter whats the best defense against twitter . Thats what investors are trying to sort out, when it comes to defense. Take Lockheed Martin, which has fallen 2 since president elect trump tweeted about the f35 joint Strike Fighter programs, quote, out of control costs. On the heels of meeting with trump yesterday, the ceo said the two discussed lockheeds progress to already bring the price tag down with, quote, continued commitment to delivering an affordable aircraft for u. S. Military and allies. Its a similar story for boeing, which also met with trump about the costs of replacing air force one after it was the subject of a tweet. Boeings stock has fared better than lockheeds. But experts say these events could signal a shift in how the new administration plans to do business. Lockheed and boeing have many, many, many defense contracts. Some of them are coming in the future. And that gives a president or someone of his ability the ability to negotiate things. You want some changes here, youre going to have to give us something going forward. Theres always negotiating room. Reporter future defense business will be key. Defense spending is expected to increase both here and abroad. Trump has vowed to rebuild the u. S. Military, but analysts say its also cyclical, since it trends in 20year cycles. Thats helped propel defense stocks, with the s p air and space industry soaring since the election. Even factoring in the 140character risk, many analysts insist the sector is still a buy. Peter armen has outperformed on many of his stocks. And richard saffron likes lockheed and raytheon, which could also benefit from international spending. Another area in focus, americas Nuclear Arsenal. As trump tweets about the need to, quote, strengthen and expand the countrys capability, which the pentagon is already moving to modernize. That could benefit general dynamics, northrop grumman, raytheon and many more. Im Morgan Brennan for nightly Business Report. Ahead, why you have to be even more selective when looking for stocks that pay you back. Young brands is declaring a Quarterly Dividend of 30 cents a share, its first dividend since yum split off its China Business last month. That represents a 1. 9 yield. Shares of yum are up 20 so far this year. Dividend stocks have rallied this year thanks to low interest rates. They were more attractive than bonds, certainly. But with the fed expected to raise rates next year, and Donald Trumps massive Infrastructure Spending plan, does it mean you need to be more selective with dividend stocks . Hugh johnson who owns Hugh Johnson Advisers joins us to talk about that, good to see you, hugh, happy holidays. Nice to be with you, happy holidays, sue, tyler. You say there are dividend stocks and then there are dividend stocks, and you have to be selective and aware of the components of those particular stocks. Tell us a little bit more about that. Yes. What im saying is, you know, theres stocks in certain sectors of the market that pay very high, and attractive dividends, including consumer utilities, staples, those sectors of the mark. Those dividends will work and those sectors will work if were headed towards an economic recession accompanied by a bear market. But thats not what were in. Were headed towards lets call it a positive economic environment, which means you might want, instead of choosing companies that offer high dividends, to get companies that offer lower dividends but will grow those dividends. That comes from different sectors. Right now, with trump coming on board, that might include the financials, the industrials, and the technology companies, which will benefit from the plans that trump has. So high dividends dont work in this environment. Lower dividends, where dividends will be increased, work. And thats where you should focus your attention. You mentioned jpmorgan, general electric, united technologies, even microsoft in these categories. These can be growth plays as well as dividend plays. Thats exactly what im saying, tyler. Im saying companies those are all companies that are going to benefit from lets call it the trump bump or the trump plan, which means if you take financials, for example, and start to dismantle dodd frank, or you have rising inflation rates, a steepening yield curve, thats going to help banks make a lot more money from their commercial lending portfolios. Theyll benefit from trump. General electric, united technologies, aerospace, thats infrastructure. When you look at microsoft, cisco, even apple, theyre going to benefit in different ways from an unexpanding economic environment. Not only will they pay attractive dividends, theyll increase those dividends over time. Thats what you want in this kind of an environment. All right. To turn you now to the overall market, weve had quite a rally, postelection rally, hugh. How does the market look to you at this juncture . Yeah, weve had a big move, sue, on the upside. And you know that, and your common sense alone, as well as my number crunching, says we moved to a level thats overvalued, were about 3. 5 overvalued, as i do the numbers. That means its not particular attractive, the upside potential is not particular attractive. Its not that enticing, when i look at where were going through 2017. Okay. So under those conditions, dividends will count. But again, the kind of dividends you pick, the kind of companies that pay the right kind of dividends, lower dividends, is where you want to be. Thanks, hugh, appreciate it. Hugh johnson with Hugh Johnson Advisers. Fewer customer discounts translated to fewer sales at conagra brands. Thats where we begin right with our market focus. The maker of slim jim snacks missed revenue estimates but posted better than expected profit. The Company Plans now to invest in new ingredients for its products. Dont change those slim jims and advertising for some older brands. Shares rose to 39. 29. Rite aid saw profits rise and fall, with headwinds facing its pharmacy unit as well as a difficult environment pending merger with walgreens. Rite aid shares off fractionally. Weight watchers plans to launch a new ad campaign highlighting Oprah Winfreys 40pound weight loss while on the companys diet plan. Winfrey has a stake in the company and sits on the board. Shares were up 5 to 11. 08. The u. S. Government put alibaba on its blacklist of marketplaces for counterfeit goods. The company rejects the allegations. Alibaba is chinas largest ecommerce company. Shares fell. From zika to ebola. Predicting the next epidemic can be like finding a needle in a haystack. The medical community is making advances at a faster pace than ever before. Meg terrell has tonights modern medicine report. Reporter new outbreaks of major Infectious Diseases have dominated headlines in recent years, for good reason. If you look from 2013, which is only three years from 13 to 16, weve had chicken gunya in the caribbean, ebola in west africa, and now we have zika in the americas. Weve seen emerging Infectious Diseases forever. We have them now, we always will have them. But to have a cluster like that is a big unusual. Reporter in the last decade in half, the world has copied with sars, h1n1 flu, ebola, now zika. Public Health Researchers say its a certainty there will be another. As much as we were unprepared that ebola was going to explode as it did, that zika was going to come along so suddenly, presumably the next pathogen could be something we havent anticipated. Reporter how can we be better prepared . Its a question Global Health authorities have been asking since ebola ultimately killed more than 11,000 people. We coordinated a lot during the ebola epidemic. We had a joint experience of really the tragedy that occurred in west africa. And our frustration that we couldnt do more to intervene. Reporter at the same time, pharmaceutical companies, governments, and nonprofits were working together to produce experimental vaccines and thera therapeutics. We were able to go to phase iii trials in thousands of individuals in library i cant. Normally that takes between five and ten years. Reporter trials for zika vaccine are moving at a fast clip. In both cases, the work emerged after the virus did. We now have the potential to fight outbreak agents like ebola. It will happen at some moment. Lets make vaccines against them during a peacetime, if you wish. Reporter its a problem no single company, foundation, or Government Agency can solve alone. There are simply too many potential threats and too few resources in one place. So sepi was formed, the coalition for epidemic innovation and preparedness. Its a Novel Partnership between public and private sector entities, focused on preparing for potential future epidemic threats, and doing it in a way that really is fundamentally different from previous opportunities where the mode has been far more reactive rather than proactive. Reporter it has two main goals. Start work now on identified future potential threats and develop new vaccine technologies to be able to respond quickly to unknown threats. What we would like to see in about five years is that we would have two or three of the key pathogens from the World Held Organization list of serious threats, where we have now a vaccine which can be stockpiled. We would have two new platforms that they are produced on. Reporter the National Institute of allergy and Infectious Diseases says these kind of efforts are vital to protect the world from whatever comes next. We will continue to see outbreaks as the years go by. Theyre unpredictable in their frequency. We dont know if its going to happen next month, next year, or a few years from now. Inevitably it will happen. Thats the reason we need to be better prepared. Reporter for nightly Business Report, im meg terrell. Coming up, its getting late. A procrastinatoprocrastinatorst minute shopping. This will sound familiar. Its december 22nd. Youre still short a few holiday gifts. Panic starts to set in. Did you write this for me, sue . Its a familiar feeling. But increased shipping speeds mean for some it may not be too late to have those presents delivered after all. Courtney reagan with the happy news. Reporter while many retailers are working on getting you online orders faster, same day service isnt much of a reality yet, even though many are using modern day couriers for that last Mile Delivery for online orders. We decided to see how it works. Were going to use some same day delivery options in new york city. Were looking at cookware, womens socks, diapers, tools. Shouldnt be that hard, right . We started with traditional retailers, macys, target. While same day pickup was available, we couldnt get it delivered the same day. We turned to amazon. Amazons Program Offers twohour deliver for 25,000 items. That is if youre willing to pay the 99 annual prime membership fee and live in one of the 30 cities where its available like here in new york city. The selection is more limited than the full site. But i was able to get almost everything, from cookware to tools. I needed two bottles of mens cologne but was only able to get one. I placed the order just before 2 00 p. M. And waited with a camera to catch the order being fulfilled at the facility, which happened in eight minutes. The earliest delivery window was between 4 to 6 00 p. M. While i wrapped other gifts, the delivery person left the facility at 2 45 p. M. And got to me around 3 10 p. M. 50 minutes earlier than the window and just about 90 minutes after i ordered. He scanned the items and off he went. Analyst John Blackledge estimates there are 5 million prime members using prime now three times a month on average. With 30 prime now cities covering 50 of u. S. Gdp. Blackledge estimates each delivery costs amazon about 9. Its worth it, he says, because amazon is the only major retailer to have figured it out so far. It may just be saving christmas for many too. For nightly Business Report, im Courtney Reagan in new york city. Theres hope. Theres hope, thats pretty good. It is pretty good. Wow. That will do it for us tonight. Im sue herera. Thanks for joining us. And im tyler mathisen. Thank you from me as well. Have a great evening, well see you back here tomorrow. Announcer nightly Business Report has been funded in part by hss. Our value principles are patient first. And we want to deliver the highest quality care. The goal of creating and sustaining value is all about putting the patient at the center of the equation. The purpose of this organization is to help people get back to what they need and love to do. Announcer a kqed television production. Its sort of like old fishermans wharf. It reminds me of old san francisco. And youd be a little bit like jean valjean, with the teeth, whatever. And worth the calories, the cholesterol, and the heart attack you might have. Its like an adventure, you know you gotta put on your miners helmet. It reminds me of oatmeal with a touch of wet dog. I did. Inhaled it. People when they say sommelier or something. You say it, sommelier, somlyay