Wall streets biggest bank is giving new hope to bankrupt detroit. We have all that and more tonight on nightly Business Report for wednesday, may 21st. Good evening, everybody, im susie gharib. And im bill griffin, Tyler Mathisen is on assignment. Well hear from him later in the segment, but the bulls, the return on the major averages making all of tuesdays losses back and more getting a boost from the fed minutes, meaning they had most recently. They met to talk about the nations Central Banks and raising Interest Rates. But they gave no time table about when they might raise those rate itses. And with that, stocks edging into the green edged even higher. The dow up 158 points seeing its biggest oneday gain in five weeks. The nasdaq rose 34, the s p 15. While they offered no time frame on raising rates or further tapering, the stimulus plans, they did show a debate about the longterm unemployed. And one economists theory on the groups impact on the overall economy. Steve liesman has more. Reporter it is not every day that economists theories are seen as so important as to be discussed at the federal reserve. But the minutes of the april meeting released today showed that the interests of president obamas top economic adviser sparked a long and lively discussion at the fed and they were rejected. They argued the 3. 4 million americans unemployed longterm 27 weeks or longer are mostly not coming back to work. The evidence suggests that they exerted relatively little pressure on the labor market. Many of them sadly give up searching for a job and eventually withdraw from the labor force. As a result, the longterm employment rate doesnt keep the feds low, forcing the fed to raise rates higher and faster than markets now think. I any the longer people are i think the longer people are unemployed, the more challenges they face. Employers are less likely to have them come in for an interview, they get disengaged. They express skepticism about the work, citing both the longterm and shortterm unemployed. The fed believes that because the wages didnt fall out right during the recession, the fed doesnt think it will face this problem any time soon. But, when the employment rate does get back towards normal the fed is going to have to making the call on whether krueger has it right. Told they were responded to his ideas he said i guess that is better than being ignored. Chief economist at moodys. Mark, lets talk a little bit about the job market because in those minutes the fed officials said one of the growth risks to the Economic Growth is a slack in the job market, what is your take on the job market . How is it doing . It is improved, much improved. Were creating a couple of hundred jobs per month, translating to 2 and a half million jobs per year. In most cases it is considered pretty good. At this pace, unemployment continues to decline. But that is the rub, the Unemployment Rate is still very high. Well over 6 , there are still a lot of people out of the work force that probably would like to be working. A lot of underemployed. When you add it all up the job market is much improved but has a long way to go before anybody considers it healthy. Do you agree with alan will we have to revise higher than what we believe to be the full employment in this economy now. Yeah, i think so most economists already have. If you go back before the recession most economists would have said at the fed and the Congressional Budget Office that the full Unemployment Rate was 5 . Now the view is it is probably closer to five and a half percent, were still above that. It is much higher than it was. But there are still a lot of people out there underemployed. If you look at the number of people who work parttime but say they want a fulltime job that is still very elevated. And you have a lot of people not even looking for work, they say they would find a job that was consistent with their skills and pay a wage covering their commuting costs. So i think there is still a lot of slack in the market. So mark, a lot of people are trying to figure out whether youre an investment owner or business owner, what the fed is going to do regarding rates. What can you tell us on terms of your predictions, reading between the lines of when you think it is going to happen . You know, susie, the fed is actually pretty clear on this. They each provide a forecast on where they think the Interest Rates are heading. If you look at the middle of the distribution forecasts, the average, theyre pretty much telling us and have been saying it towards the end of last year, the process will end by this time next year. And may, june, july 2015 is when shortterm Interest Rates will start to rise. They have been about as clear about that as they are about anything. And so i think that is the script that theyre trying to stick to. You think the marketings are prepared for that . Lets recall what ben bernanke did last year when he talked about the possibility of the process, and the Interest Rates went up at that level. Are we ready now . And bill that is exactly why i think the fed became more clear and transparent with regard to where they believe that the Interest Rates were headed. It was a scare last year when the Interest Rates jumped. Since that time they have become much more transparent to where they believe that the Interest Rates are going to go. The market is fully on board with that. The Market Reaction today was what it was because the fed basically said in the minutes you know were sticking to the script. Nothing has changed. That was very reassuring to the market. Mark thank you. More trouble at target stores now following that massive christmastime data breach and the troubled expansion into canada. Profits at the retailer fell 6 last year and they lowered their projections for the quarter. Shares rose by a percentage point today. And as Courtney Reagan shows us the companys interim ceo is moving forward with new initiatives hoping to attract shoppers and investors likely. Reporter it has been a rough five months for the retailer target from the data breach to losses to the Canadian Stores and the firing of its ceo and many other management shifts. Today, the big company fell shy of expectations but did better than expected results for the First Quarter, i spoke to the current chief financial officer, john mulligan, about what target plans to do to improve sales and what it will cost. We want to bring great promotions to the guests but make sure they are impactful. The First Quarter we used a significant amount of promotions and our gross margin rate was down a percentage point. Well strike more of a balance as we go forward. While mulligan is sitting in as the decree for now he says he will be glad to go to the cfo role once target moves forward. Mulligan says that target is focused in three key areas. The three areas they are focused on as i think about the next individual is growing traffic sales in the u. S. , continuing to improve our performance in canada. And third getting us to lead a channel retailer. The third one, probably the most important. Target says surveyed shoppers have put the data breach behind them. Investors, however, have not been able to move on. Target says it is not able to estimate potential total costs of the data breach even though it may have a Material Impact on earnings. In the Second Quarter, the full year, and beyond. Unfortunately, were in the place as it relates to the data breach where we dont have visibility yet to the potential thirdparty liabilities and operating expenses they have incurred. The process is fairly well defined between us and the networks, they will come back to us when they have an estimate of what the incremental expenses might be. And the process, you know, we dont have visibility to that. But what weve seen in other cases it can take several months. Mulligan has acknowledged there is lots of work to be done. Target certainly hopes investors and shoppers will be patient. For nightly Business Report, im Courtney Reagan. A warning today from the folks at ebay, the ecommerce giant says that hackers stole addresses and personal information earlier this year. The company insists no Financial Data was breached but they urge client clients to change their account password. In fact, targets on Companies Like ebay and target are more common. And one Internet Security expert says if the attacks are discovered not only puts the company at risk but already the top executives. Josh lipton has more. Reporter trust weight, a Cyber Security firm investigated nearly 1300 hacks. Retailers made up 35 of the attacks, food and beverage ranked second, and hospitality, third. Theyre all similar, they have many locations. They have a lot of transactions from customers going to those locations. And they have a lot of different vendors that are used in those environments. Reporter hackers continue to try to steal credit cards but also increasingly going after information such as financial account credentials, internal communications and merchant id numbers, anything they can sell for financial gain. That is easy to turn a quick buck and to sell on the black market and to get quick funds. The other is usually used by nation states for obtaining secrets of nations. How they build things, blueprints, black mail, things like that. A breach doesnt just mean headaches for a ceo, it can also mean their jobs. A number of ceos stepped down after their companies experienced attacks. In addition to target, aols tech chief resigned after a breach, as did the ceo of sony and three korean financial firms. These companies were experiencing problems at the time so their resignations cant only be attributed to data thefts but no doubt it had something to do with it. Experts say no company is immune to hacker attacks which is why spending on Cyber Security continues to rise growing at nearly 15 annually, outpacing the growth overall at key budgets at just 2 , what is more the attacks are not always found out. Trust wave says that 71 of firms are not even detecting the breach on their own. And when they do the average time it takes to notice it, nearly three months, josh lipton, nightly Business Report. And still ahead, new hope for detroit. The bankrupt city just got a 100 million lifeline from one of wall streets biggest banks, is this the start of the motor citys comeback . That is next. The Obama Administration is changing some provisions in the Affordable Care act that critics say is nothing more than a bailout for Health Insurance companies. These new regulations allow the federal government to set aside money to compensate those insurers who may lose money because of the new Health Care Law as they try to keep enrollee premiums down. Jamie diamond says he sees opportunity in detroit and he is taking a bold step to prove it. The chairman of j. P. Morgan chase is investing more than 100 million in the struggling motor city, struggling with 18 billion in unfunded debt. Scott cohen has more. Reporter there is no question detroit needs the money, the largest u. S. City ever to declare bankruptcy, riddled with blight and even basic services. We want to see detroit do well, that is why were here. Reporter chase will invest 100 million over five years, removing blight, Funding Community development loans, Small Businesses and worker training, even helping pay for a new light rail line. Detroit may be bankrupt but for the first time in decades there may be cause for optimism. Slowly but surely, officials have put together what is being called a grand bargain, more than 800 million from private foundations, individual contributions and the state of michigan to shore up the citys plan and art investment. J. P. Morgan is on top of that. 100 milli 100 million is a tiny that brought in billions last year, it is roughly equivalent to jamie diamonds pay but that is not to say that the bank is not taking a risk. Because the grand bargain is not a done deal. While some of the citys unions and retirees are signing on, others are bitterly opposed to cuts in their pension and bond deals. Even the u. S. Government has filed an objection in court. Then there is the state legislator which has balked at its part of the deal, 195 million. The stateappointed emergency manager is appealing to lawmakers to get on board. Without this settlement, make no mistake about it. Well have to go back to the drawing board. Reporter j. P. Morgan says it will invest in detroit grand bargain or not. But if the deal falls apart it could be years before the bank gets anything back. For nightly Business Report, im scott cohen. Yet another auto recall from general motors, the 30th one so far this year. The newest involves 218,000 chevys made during the years 2004 through 2008. This time for a possible fire hazard in the vehicles daytime running lights. Shares surge after the retailer reported sparkling First Quarter earnings, tiffany beat analysts estimates as the world sales jumped double digits with the sales jumping in the u. S. Looking at the stock it popped 9 to 96. 30. Lowes says the rough Winter Weather weighed on the First Quarter results but the Home Improvement retailer raised the earning forecasts saying business has already started to turn around. Still earnings missed estimates and shares fell slightly to 40. 41. American eagles First Quarter profits plunge as the retailer was hit by weaker sales and margins. Investors were disappointed at the news that the plants wanted to close 150 stores in america, and the Second Quarter earnings fell to 10. 60. Elsewhere, Williams Sonoma seeing samestore sales rise more than forecast, the outlook for the company for the Second Quarter came in a little bit little, but investors didnt seem to mind, during the regular session the stock rose slightly to 63. 70. And rentals america is reportedly in active talks to buy lorillard. That proposed deal would combine the second and Third LargestTobacco Companies in the united states. The merger buzz sent the numbers to 62. 63. Reynolds america was up to 67. 70. Tyler sat down with bill mcnabb, chairman and ceo of vanguard, and asked him what investors are doing right and not doing right with their money. If you look at investors broadly, you know, one of the really promising trends weve seen is more investors are beginning to look toward what i will call a total solutions approach to their investment needs. And you know the best evidence of that is the the take off in targetday funds, so today, the vanguard administrators, 55 of participants now use targetday funds. And as you know those are verbaled funds that are continually rebalanced, and they expose the investor. That is a positive trend, now it is not everywhere. There are still investors on the market who pay too much attention to shortterm performance. And you will see that in the data. So when a sector does well you will see money move into it or move out. That, to me, is still troubling. Probably the most troubling thing is there is a fairly big push towards higher yield. And again, understandable Interest Rates are so low. They want some interest to come into it. And the question is, do people understand the risks theyre taking . Because as you go to get more yield obviously you take on more risk. Do you worry at all with specific reference to target day funds that supposedly deliver the best results for your retirement age that people are relying on them too much . And what if they dont deliver the way people examine . You know, and again, i cant speak for everybodys target day funds. But we have a high degree of confidence. We use index funds as the underlying component, so theyre very low costs. And as long as we keep the rebalancing on a consistent basis were very confident theyre going to the achieve the kind of results that people need. The Fund Industry has grown immensely. There are 1500 or so funds, etfs. But 45 of total assets are controlled by baby boomers. They are starting to retire. Does that mean that the total assets are going to come down as they start to withdraw . So unlikely, actually, because what you will find is most baby boomers as they get closer to retirement the longevity expectations are much more than they were 15 or 20 years ago. Today you know if you have a couple coming up on retirement there are better than 50 odds that one of them will live to 90. So you now have to think about not investing two retirements but investing beyond the retirement, if you will. That means people will have to have equity exposure. You may end up living longer in retirement than you work. You know, it is possible. And what it will mean is the drawdown will be pretty measured. You know, again if you think about what is a good drawdown rate for portfolio, typically about 4 . So if you think about your 45 , lets just say everybody drew down at 4 , well, that would be roughly you know, by the time you do the dollars involved 4 of that, 45 is a much smaller number. All right, very quick question on a topical subject. You testified on the hill yesterda