Stimulus. And the develop of apps, all that and more on nightly business report, april 30th. Good evening, everyone, wall street ended april with an important record, the dow, the blue chip index now at an alltime high, the first record close for 2014. The milestone came on a day when the Federal Reserve wrapped up its policy meeting deciding to keep its key Interest Rate unchanged at zero percent and despite mixed reports about the u. S. Economy. First lets get numbers on wall street, dow rose to 16,580, that is the new record, the dow is now higher for the month, nasdaq up 11 points, down 2 for april and the s p added five points and is also higher for the month. After that data, Economic Growth in the first three months of this year was much weaker than expected up just 1 tenth of one percent. Adp reported 220,000 private sector jobs added in april the most since november. Steve liesman has more on the numbers and the economic reports and tell us ab wa the state of the economy. Two reports ending in dp, adp and gdp and they could not be more different. Gdp was a real shocker at a just barely positive 0. 1 , Consumer Spending up 3 but a good portion of that was increased spending on health care as a result of the Affordable Care act. Housing down nearly 6 for the second lousy quarter in a row. Business equipment continues to disappoint. And Government Spending was down a half a point failing to bounce back from the depressed numbers resulting from the government shutdown. Economists at bmo said the American Economy virtually stalled earlier this year in the face of severe winter weather. One reason for the optimism ahead were numbers like adp, the Payroll Company whose data is used to forecast the jobs report this friday for just the private sector. Those numbers continue to show good job growth, seeing twenty cared to an estimate of 210,000, nonfarm payroll estimate for wall street, 210,000 for the government report on friday. Late in the day the fed seemed to take the data in stride, blaming the report at least in part on the weather and following wall streets expectation to drive down Interest Rates. The feds signalled more tapering ahead while at the same time promising to keep the shortterm Interest Rates low it looks like well into 2015. For nightly business report, im steve liesman. And chief economic adviser at allions. Mohammed, good to have you back with us. I want to get your reaction to a couple of things. You have the economy basically flat in the First Quarter. You have the fed pulling back on its stimulus, something that worried investors, and yet the dow sets an alltime high. Whats not computing, if anything. So tyler, think of it this way, the fed is on auto pilot. We know what they will do, reduce by 10 billion at every meeting, and they will keep the Interest Rates low and continue to encourage us that Interest Rates will stay low for a long time. So the fed is predictable. Markets like that. The markets also look at the economy and say yes, we had a weak gdp number, but as steve and susie said, we had a good barometer number. So put these two things together and what the markets see is basically a rangebound outlook. The lower volatile rangebound outlook. What it does is encourage the market to leverage and reach for yield and return and pushes both the bond market and the equity market higher. Mohammed, first of all nice to see you again, glad youre back on nightly business report. You have heard the new buzz word with policymakers is liftoff. Theyre talking about the time when they will raise Interest Rates. When do you think it will be . And when it does happen is that going to be good and bad for investors and for the economy . So nothing today suggests that we really are near liftoff. If you look at the poor gdp number, yes, business investment, weather impacting it was an issue. But also exports were an issue and the rest of the world is simply not as boinuoyant. So were not at liftoff or full speed. I dont expect you will see Interest Rates hike for a long time. Mohammed, is it a nonfactor for equities and asset prices . It is a factor but a factor whose impact will be felt later on. You know, at the end of the day in delivery returns, lots of people are very shortterm. So when valuations keep on going up, when your return objective stays the same and when you dont see the turn in valuations until much further down the road you are tempted to stretch a little bit more. You are tempted to do the extra bit of leverage. And that is what were going to see. And it is going to continue to do so. Hopefully, and this is really important. Hopefully, a better economy will validate these valuations. Right . The risk is that it doesnt. But this is difficult, technical behavior when you tell people youre in a rangebound world and you give them high return objectives. Right, right, lets look a little bit outside the United States. I would like to get your thoughts on all the headlines we have been seeing about new sanctions, ukraine, how much does it concern you especially if they get to be really serious sanctions. And also what is on your worry list . So if they get serious, and lets define that. It means from going from targeting individuals to targeting sectors. And if these sanctions hit finance and energy then you can expect two things to happen. You can expect the russian economy to start to suffer really negative growth. Which means it will trade less with europe. And you can expect counter section, you can expect them to take steps to limit the supply to europe. If that happens you tip it into recession, and then the markets look at something very different. Right now the markets are discounting this. Because it is in no ones interest to tip both russia and europe into recession. The problem is that every day the news out of ukraine suggests that everybody is losing control of developments on the ground. Mohammed, your leaving pimc was said by many as abrupt. Was it as abrupt as it seemed, and it seemed to be in the aftermath quite personal, i wonder if there was a connection how personal it became and the fact that pimco corporately has had a lot of outflow of capital in the past two years, so two things, was it was as abrupt as it seemed and why did it get so personal as it did . So i cant speak to how it was viewed. I can tell you what it is like from my end. I spent 14 wonderful years there, six years as ceo as one of the worlds best investors. It was time for me to do something more different, time for me to spend more time with my daughter and have a portfolio of activities as opposed to one fulltime drop. So the time is right. And what is wonderful, tyler, i leave behind a very strong firm full of talented people and full of Great Investors and that is what matters ultimately for clients. If you were still ceo how would you deal with this 50 billion of outflow what would you continue to do . So you continue to do what you did for years, which is continue to deliver longterm value for clients and continue to deliver leadership. And the best service. And that is what pimco does. We have to remember it took pimco 39 years to go from zero to a trillion. It took over three years to go to 30 trillion. You have to put the stock in perspective. Mohammed, good to see you, you look well and rested. We look forward to seeing you again. General electrics ceo was making the rounds today saying he is confident his deal to buy allstum will get done, offering 17 billion in cash for the Energy Division of this french engineering company. He met with the french president and said that the assets will fit right in at ge. I think it is an acquisition that is very consistent with our execution skills, our ability to drive synergies. It is in a market we understand. I think it has relatively low execution risks for investors. It is going to increase our Earnings Growth rate and it is going to increase the industrial mix up to 75 of our earnings by 2016. Now, despite that positive pitch, this is not a done deal just yet. Allstom gave siemens, the german industrial giant until the end of may to come up with a counter offer. Did you ever have a fender bender and find out the damage was a lot worse than first appeared . The new report showed the government lost much more than it thought after bailing out general motors. The treasury lost 11. 2 billion by rescuing the automaker, not the estimated 10. 3 billion loss when it sold its last remaining shares in the company. That was back in december. The revised loss includes more than 800 million of writeoffs just last month in its investment in the old gm. Two other companies bailed out by uncle sam could mean a lot more taxpayer money. After running through some stress tests, the federal Housing Finance agency which oversees government run mortgage giants fannie mae and freddie mac says that in a worst Case Scenario the Companies May need as much as 200 billion in federal aid if the economy and Housing Market suffer another di downturn. As expected, the push to raise the minimum wage to 10. 10 an hour failed. The vote fell shy of the numbers needed for democrats. They say it would be too spec s expensive for employers and would actually cost jobs. The u. S. May be the worlds leading economist for years, but that could all change, bun economist is calling it a wakeup call for investors and American Businesses. Un economist is calling it a wakeup call for investors and American Businesses. Oun economist is calling it a wakeup call for investors and American Businessenun economist is calling it a wakeup call for investors and American Businesseeun economist is calling it a wakeup call for investors and American Businessen economist is calling it a wakeup call for investors and American Businesse economist is calling it a wakeup call for investors and American Businesses. The International Monetary fund approves a 17 billion emergency package for ukraine, the aid designed to stop a collapse of that countrys economy. The loan was put together in a matter of weeks and was approved unanimously. Americans would like to see the u. S. Pull back from the world stage, the conclusion of a new survey. In a big change from years past, the new nbc news wall street journal poll shows that the u. S. Wants the u. S. To be less active in Global Affairs with only a fifth of the respond dents hoping for more u. S. Engagement. This comes after tough economic sanctions against russia. Quick, what is the worlds biggest economy . You said the u. S. , you are correct at least for now. A new report shows that the u. S. Could lose the distinction to china sometime over the next year. Scott cohn has more. Reporter chinas economy may become the Worlds Largest this year passing the United States earlier than most expected. According to a new report by 2011 chinas economy was already 87 the size of the u. S. , leading some experts to predict china will top the u. S. As the worlds biggest economy by tend of 2014. Dan greenhouse says we should not be surprised. With the number of people in china, there are about 1. 3 or 4 billion people, compared to 310 million in the United States. They should have a much larger economy. Even though chinas economy may soon outstrip is that of the United States, the average worker makes much less than the average American Worker who makes 12 times the number they make. China has been coming on quite strong for sometime, the world businesses are aware of that. I dont think even if we pass the particular benchmark that is a tipping point. That cant mean the u. S. Will maintain its full strength. And investors should remember that Economic Growth doesnt always translate into stock market returns. Even though theyre growing 7 or more and even though the economy is set to become the largest in tehe world, the stoc market has gone down. While the stock market may struggle, there is no question that china may be a growing force in the years to come. For nightly business report, im scott cohn. Here now to talk is barry bosworth, a former economic adviser in the carter and johnson administrations, and currently with the brookings institute. Let me ask you about this survey, do you believe this one measure that theyre looking at is legitimate, in your view, that china will overtake the u. S. By the end of this year . Yes, i think it does, but people should understand it is very complex on the calculation to make. There is a huge range of error in this but the basic message is that there is a total economy, china is beginning to approach the size of the United States is correct. Mr. Bosworth, 25 years ago Something Like 11 of the wealthiest corporations were japane japanese. We all thought we were going to end up working for japan. Is the fear with china overblown . Yes, i think so. Still, fundamentally, i think china is a much bigger economy in the sense that there is a lot of people. It has room for a lot of further growth because it comes per person, it is still far below those of the United States. I think it is inevitable as we look ahead. We can argue about the year in which it occurs but china will be a larger economy than the United States. Okay, so if that is the case what is the takeaway here for whether you run a business or whether youre an american investor. Why should you care . Because it is what we should realize, from our economys perspective this is a very big market now. We have to Pay Attention to the opportunities, both to invest in china and to sell, export things to china. And particularly in the area of exporting to china we just havent done very well at all. Were very good at importing for china but were very bad at exporting to china. And i think the big reason is we dont pay much attention to that market. Is that because were bad at it or because they protect their markets . I think the bigger problem is that were bad at it. That stands out as a u. S. For countries more than just china we dont have a very good export record. I think there is a good reason for it. For 30 years up until the financial crisis this was a fully employed economy. And if you were an American Business you would say the way to make money is to focus on the u. S. Economy. You didnt have to spend a lot of time trying to find export markets. And when we were fully employed already. But the world has changed since the financial recession. We need to export today. Right, and some would say and the chinese need to be better consumers. Do you see that changing . Yes, i think that is very important. I think china got a little off track after the wto agreement to bring them into the international system. And i think they feel they have been too much of a focus on exporting and not enough of a focus on developing their own domestic economy. The financial crisis revealed to them that they were very exposed. I mean, the shock of the collapse, the world trade was a big problem for china. And theyre still struggling with how to adjust to that. So i think yes, they want to develop their domestic economy. That is good for them. That would be great for american exporters if were prepared to take advantage of it. Well, lets hope it turns out good for both sides. Thank you so much, barry, appreciate you coming on the program. And we begin the factor with the 6. 8 billion power deal. Exelon will buy pepco, the combined businesses will have about 10 million customers and create the biggest atlantic gas and utility. Shares of pepco went to 26. 76, exelon fell to 3 to 35. 03. And energizer will split its company in two, planning to sell the household products like schick razors, the Company Expects the separation to help it focus and to better allocate resources, wall street liked the news, shares up 14 today to 111. 111. 69. Two Oil Companies raising their dividends, exxon mobil increasing to 69 cents a share, the move continues a 32year record of upping the annual payout to shareholders. Chevrons board raising the dividend by 7 to a buck seven a share and that, too, will be payable in june. Exxon mobil up to 141, chevron fell just a bit. Wellpoints First Quarter profits drop 1 because of an increase in membership. Why do profits drop . Because there were higher administrative costs tied to the customer growth. But earnings Beat Estimates and the insurer raised the outlook for the year, sending shares up 5 and a half percent to 100. 6. And shares of Weight Watchers surge, trumping wall street estimates on both the top and bottom line. Its guidance was also better than expected. Shares jumped initially after the close up nearly 20 , by contrast, shares fell three and a half percent to 19. 80 during the regular session. It was the opposite story for jds, after the market closed the fiber optics component maker closed below estimates, the company lowered the estimates for the Current Quarter citing a delay in carrier orders sending the shares down 8 in the regular session the stock falling 1 and a half percent. And peop