Uncertainties weve been telling you about, including great britains vote next week whether to leave the European Union and the federal reserves forecast of slow Economic Growth. The Dow Jones Industrial average capped this rocky week with a decline of 57 points finishing at 17,675. Nasdaq dropped 44. And the s p 500 fell 6. For the week, all of the major indexes lost more than 1 . And concerns over slow growth may not bode well for one of the most critical forces in investing, corporate profits. Forget the fed. Set aside the vote on britain leaving the European Union. In the long run, and probably the short run too, what matters most to stock prices is, yes corporate profits. The mothers milk of moneymaking. And the profit outlook, weak all year long, is getting worse. Fact set says u. S. Corporate profits will likely fall more than 5 this quarter. S p Global Market intelligence thinks theyll slide 4. 7 . If profits do decline this quarter, and theres only two weeks left to go, it will make for the fifth such quarterly decline in a row. That will be the worst such skid since 2009 in the midst of the great recession. Make no mistake, lots of companies are earning plenty. Just not as much as a year ago. Banks are one example. For them, profits are simply harder to come by in todays highly regulated, low Interest Rate world. Ditto energy companies, likely to show the biggest earnings declines from last year. Theres not much glitter in materials and mining either. Or for that matter in technology. Wums the driver of corporate profit growth, Tech Companies overall may make less this quarter than they did last yea one contributor to the slide, amazingly, is apple. Sure its making tons of money. Just not like it used to. So gate ready for a lumpy, bumpy run of corporate profit reports as summer heats up. John butters joins us to tell us what he expects when Companies Start reporting their Second QuarterEarnings Results a couple of weeks from now. Senior earnings analyst at fact said. Nice to have you here, john. Great, thank you for having me. So that is the question. Theyre pretty low comparisons for some of these companies certainly. We left off with a bumpy earnings season ahead, would you agree . Exactly. Its interesting, if you look at how analysts have revised their estimates, companies have been a little bit pessimistic than normal coming in. We are expecting the decline of 5 year over year for earnings Second Quarter and thats larger than the decline of 3 expected at the gibing of the quarter. However, 2 drop is actually a smaller drop than normal in terms of estimate cuts. Typically we see about a 3 cut. The reason for that is the Energy Sector which is a little bit surprising. In quarters past weve seen analysts slashing estimates across the board in the Energy Sector. This time around analysts have raised their expectations slightly, a 1 bump in expectations for earnings. Dids such as exxonmobil and chevron, both seeing numbers come up during the course of the quarter. Maybe not as bad as earlier in the quarter, in part because oil prices have gone up. Give me some good news here, john. Are we anywhere near sort of the bottom of this trough in corporatorings . In other words, might this be the worst and might it start to improve afterwards . Based on analyst expectations this will be the last quarter of year over year declinings and earnings. This quarter will be the fifth Straight Year of year over year declines. Ing next quarter in q 3, analysts are looking at 1 . Fourth quarter that jumps to 8 . Second half of 2017 were looking at for doubledigit growth. The Energy Sector, one, comparisons for earnings get as we move into the second half of this year and next year. Energy earnings have been week the last year. Absolutely, yeah. The comparisons get ashs. The second factor is analysts are expecting the price of oil to increase over the next year or so. And earnings estimates typically correlate with oil prices so analysts are calling for higher earnings. Again, highererings estimates, easier xafr son comparisons, and energy as the driver of the growth Going Forward this year into next year. Sectors that youre expecting to see the highest Earnings Growth for the sec quarter, telecom is one of them. And basically a couple of companies in there that have done dea . Exactly. So overall, just for the ten sectors, theyre expecting growth this quarter. The Telecom Service sector is expecting the highest growth at 8 . That sector, at t is driving growth and that company is benefitting from its acquisition of directv from last year. If we take at t out of the sector that 8 growth drops to a decline of 4 . You can see at t really the driver of growth in the Telecom Services sector. Can we go through the laggards . And i was going to asking, whats tripping technology . If question look at the sectors expecting the lowest growth, again, Energy Sector, weve talked about that. A significant decline of 75 . Although as i said the estimates have come up on a year over year basis, youre still looking at a significant decline. The sector expecting the secondhighest decline is materials, down 11 . Weakness in metals and mining there. The third is technology as you mentioned. Thats expected to be down 7 . A lot of the weakness there can be attributed to apple and the reason for that is lower iphone sales. As we know, iphone is one of the main drivers of Revenue Growth for apple. Iphone sales expected down 20 . Apple expecting to see a decline in earnings overall. We take apple out, thats 7 decline for tech improved to a decline of 2 . Energy, materials, and tech the weakest sectors. On that note, john, thank fact set. A fed official today made a significant shift in his outlook for the economy. St. Louis fed president James Bullard says low Economic Growth will likely remain in place through 2018. And he forecast just one Interest Rate hike between now and then. This is a reversal in thinking for bullard who previously said growth would pick up and rates would rise. He now says the long run outcome or outlook for the u. S. Economy remains uncertain. Weve been reporting on the risk of the uk referendum and what it poses for the market and the economy. In an interview today the head of the International Monetary fund said the outcome of the vote is a concern for the entire wo its going to cost, its going to be negative for income purposes, it is going to be reduced trade, most likely as a result of uncertainty. Those are blatant facts. Lagarde went on to say being a member of the European Union has enriched the united kingdoms economy. Which u. S. Companies have the most at stack should the uk vote to leave the European Union . Wilford frost has our report. Reporter theres already been a clear effect on u. S. Bonds, the yield on the 10year declining from over 1. 9 to below 1. 6 in the space of a couple of weeks. But while european equities have declined sharply the last 10 days, the dax down around 5 , u. S. Equities have been more resilient. The dow down just under 1 . What about u. S. Companies with high uk exposure . Some big names like ford, ebay, ppl corps. That will be affected by uk growth slowdowns as well as falls in sterling as they report earnings in dollars. However, most of this top ten, their sales are predominantly within the uk. So wed not really be affected by renegotiations of trade deals between the uk and the eu and thus not face a potential collapse in sales. What about a sector basis . Banks are likely to be the worst hit. As a whole the uk has a trade deficit with the rest of europe, making retaliation less likely. Within just financial services, it has a big surface, making it the area most likely to see tough and vindictive response in future trade negotiations. Of the top five u. S. Banks, Goldman Sachs has the highest exposure to emea at 27 . Bank of america the lowest at 7 . Of course the biggest impact on brexit on banks has already happened, delayed rate hikes and lowered yields. For nightly Business Report, im wilford frost. Still ahead, big changes coming to costco. And millions of shoppers will be af. The Justice Department has reportedly abandoned its against the former head of countrywide financial. As first reported by bloomberg, prosecutors decided not to pursue charges against angelo mazulo, a pioneer in the subprime mortgages at the center of the financial crisis. The decision draws to a close a twoyear quest to bring a civil suit against him. Patent regulators have ordered apple to stop selling its iphone 6 and 6plus saying the design violates patents held by a chinese company. The company says it will continue to sell those iphone model in the worlds secondlargest economy until the appeal makes its way through the system. A big switch about to take place for millions of credit card holders. If you plan to head to costco, check your wallet to make sure you have what you need. Kayla tausche explains. Reporter planning to use a credit card at costco . Starting monday youll need a new piece of plastic. For the first time in nearly two decades costcos 11 million credit card holders will be bearing a visa issued by citigroup replacing the American Express card that costco exclusively accepted before a bitter fallout. While customers arent shy about brand loyalty, most seem unfazed by the switch. I prefer American Express. I have multiple amex cards but benefits are becoming less and its better with other cards. Im looking more to using my visa card. I think more people carry the visa card. American express is a little pricey. I dont like it at all because i use American Express for everything. My son is happy about it because he only holds a visa or mastercard so hes happy about it. Because hed always go in with cash. I dont think it will affect spending one way or the other. Think its just a matter of probably costco having negotiated a better deal for their customers with visa. Thats exactly it. The new card gives customers much more cash back. Citi executive said costco executives were involved in everything down to the graphics. As we talked about how do you construct Something Like this, they were willing to go in and say, hey, were in this with you, we want to make this product the best. So you can imagine that can make negotiations and some of the financials perform a little bit different. Reporter s called those new terms uneconomical. The two companies cant decide who exactly broke up with whom, but breakups can be messy when theyre with your singlebiggest customer, in amexs case. Its trying to get costco shoppers to sign up for a new amex card and former customers still owe the company around 12 billion in costco card balances. All spending from monday forward goes to citigroup and visa, whose other visa credit cards will be accepted at costco too. That is a first. If youve been wanting to sign up instore for a new costco card, maybe wait until after next week once the dust settles. For nightly Business Report, Kayla Tausche in new york. Viacom lowers its earning guidance for the First Time Since 2008. Market focus. The Media Company expects earnings for the Current Quarter to falwell below wall street targets. This is due to the disappointing performance of the latest teenage mutant ninja turtle movie. The Media Company blamed the ongoing management dispute for a delay in completing an ondemand video agreement. Shares of viacom down more than 1 to 44. 42. Government regulators have closed their investigation into Lumber Liquidators chinesemade lamb mat flooring. The Consumer ProductsSafety Commission said no unsafe formaldehyde levels were found in tests conducted in thousands of homes. In addition the company has agreed to not sell any remaining inventory of that product. Shares surged 19 to 15. 78. Satellite tv provider dish network has dropped two channels owned by the National Football league. O com failed to reach a new distribution agreement. The nfl network said this is the first time a Service Provider has blacked out the network to subscribers. Shares of dish little changed ending the day down a tick at 53 even. Synaptics which makes touch screen parts for apples iphones plans to lay off 9 of its workforce and shut down some of its offices. In addition the companys ceo requested a temporary reduction in his base later of 20 . Also when the last time you heard that . Shares plunged nearly 11 to 53. 85. This weeks market monitor likes Strong Growth Companies he says can do well in any Macro Economic environment. This is his first time joining us on the program. Joe dennison, Portfolio Manager at zettenberg capital investments. Nice to have you here. Great to be here. You mimgsed that you want founderled companycentric business models, correct . Yes, thats correct. We move Strong Growth Companies, customerobsessed, founderled. Founders have a much longerterm vision and over the longterm revenue and earnings gleth drives stock prices. Start with netflix. We think its clear all tv is moving toward ondemand streaming. Millennials like myself are not going to schedule our lives around primetime viewing windows. Netflix is the clear global leader. Theyve got the largest, mostcompelling content library and a differentiated economic model that doesnt rely on advertising. U. S. Business proves the model can work profitably, launched in 130 countries this year, we think subscribers and material profits will follow. Founderled kind of confines your next pick, tesla. To put it mildly. Youve owned it since the ipo . Thats correct. Weve owned tesla since the ipo in 2010. Skeptics at the time didnt think they could build a single car from the ground up and here we are today. Theyre a Clear Technology leader in electric vehicles in a market where we havent seen a competitor bring a compelling product to market yet. Just this year the Company Launched their model 3 mass market vehicle and saw preorders vastly outpace any expectations. The 17 billion in revenue potential from that is more than double the best iphone release weekend in history. So it comes down to execution. And we continue to put our faith in a Management Team thats hit all our targets so far. You can go ahead and not schedule your life around television, except for nightly Business Report. Thats right. There you go. Just do that. Its on the dvr. Your third is xpo logistics. Not a company i know much about. Strong Management Team applying technology to an old industry. A thirdparty logistics provider, consolidating a very fragmented market. Layering their technology to rapidly take market share. Ceo brad jacobs has proven success with a similar business plan. United waste, united rentals. Key driver for the company is the shift of shopping online as more and more goods are sold online, the shipping complexity and demand has risen significantly. Weve got to go, thank you so much for joining us. Great to have you on the program. Joe dennison with zettenberg capital investments. Coming up, its no fish tale. Meet the entrepreneur who started with nothing and built a sushi empire. Its tonights how i made my millions. Oregon wants to ban trains from carrying oil through its state. Though there were no injuries in this Union PacificTrain Derailment last month which was transporting north dakota crude oil, it did spill into the Columbia River and people had to evacuate their homes. Oregons department of transportation has asked the federal Railroad Administration for a moratorium. Oregon is the first state to ask for such a ban. Philadelphia became the second American City to suit institute a tax on soda, passing a 1. 5 cents per mountains tax on sugaradded and artificiallysweetened soft drinks. That adds 18 cents to the cost of a can of soda. The new tax will go into effect january 1 and it is expected to raise 91 million a year in revenue. In pittsburgh you might expect to find steel companies. But instead there are startups, a growing number of them. And as kate rogers reports, businesses large and small are helping to reinvent the rust belt. Im charging with every step that i take right now. Reporter while devices from tablets to cell phones improve constantly, the thing cant be for their battery life, something 25yearold Anna Alexander and soul power are looking to change. Charging cell phones, radios, gps while you walk. Reporter soul power h