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tv   Nightly Business Report  PBS  January 23, 2017 4:58pm-5:29pm PST

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this is "nightly business report" with tyler mathisen and sue herera. >> we are going to be cutting taxes massively for both the middle class and for companies. >> setting the agenda. president trump's first official meeting with the country's most prominent ceos. >> trade deal trumped. the u.s. withdraws from a sweeping multilateral agreement. what happens next? >> and merger blocked. calling the takeover anti-competitive and comes as the industry faces an uncertain regulatory future. those stories and more now on
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"nightly business report" for monday, january 23rd. good evening. welcome. president trump got to work on his first formal day in the white house, the president welcomed the chief executives of some of the country's most well known companies. with business leaders around the tashlg he pledged to cut taxes, wipe out regulations, and fast track u.s. factories. he also threatened a border tax. tonight from the white house. >> reporter: president trump started his first workplace by delivering a carrot and stick message to the country's top ceos. it included tesla, lockheed martin and dow kept, among others. the new president net ceos, if they create jobs, they can expect considerably lower taxes. but they were also warned that moving factories out of the country. >> a company that wants to fire all of its people in the united
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states, and build factories someplace else and think that product will flow across the border into the united states, that won't happen. they'll have a border tax. a substantial border tax. >> president trump also pledged to cut regulations by 75% or more. >> we're going to be cutting regulations massively. we'll have regulations and it will be just as strong and just as good and just as protective of the people as the regulation we have right now. the problem with the regulation now is that you can't do anything. >> on a day when the president signed an order to full united states out of the transpacific partnership trade deal, the ceos looked past it and said they were optimistic about working with the new administration. >> he won't do anything to harm competitiveness. he will make us all more competitive, recognizing you can't get things done overnight.
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>> the ceos left with a homework assignment. they've been told to return to the white house in 30 days with a list of suggestions of how to improve manufacturing in the united states. for nightly business report. washington. >> if the administration ask congress follow through with a tax cut for both the middle class and corporations, i know what rolled back regulations, will that then stock market move higher? the head of the investment group joins to us discuss. charlie, i want to work back to tax cuts and regulatory reform and so forth. but i was struck by one of the things in the notes from you today. and that is that the underfocused story right now may well be the return of inflation. and you recommend that people have at least a portion of their portfolios positioned to take advantage and to protect from that. why and how? >> well, i think there are not
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as many reports on inflation as there should be. we have a tighter unemployment market, under 5%. we have big deficits that will get bigger. trump will be spending money on infrastructure. he doesn't seem to want to do much cutting of entitlements. he will have tax cuts. so those produce more. we were up 2.9% in the last jobs number. energy prices have been moving higher, rents are moving higher, health care costs are moving higher. i think after appeared of benign inflation, it is starting to come back. >> and to his second question, how would you protect or hedge against that? >> it is very interesting. commodities and stuff in the ground has been one of the worst performing asset qualities in the last four years. i think it will change. there are a lot of traditional hedges on inflation. i would spread your hedges out.
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things like farmland, oil, even gold and precious metals are good ways to hedge yourself. and what you shouldn't do is buy long term bonds. they do very badly in the inflationary environment. >> let's go back to the topic we began with. that is the possibility of regulatory reform and lower tax rates on the middle class and on corporations. all other things being equal, i assume you think that is good for investments and companies. >> it is. and what's important here is not what i think but what the stock market thinks. the stock market really does believe, they've lowered corporate taxes, less regulation and they'll all be good for the economy. and maybe those p.e. markets look high will end up not being so high in retrospect. >> does the market have too much priced in? are they anticipating too much? it is a very aggressive agenda by the new president. no one really believes he will get everything through but it
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seems the stock market thinks he will accomplish quite a bit. >> yeah. i think that's fair. if you and i were going to say how much will he cut taxes, we might not be sure. will he get all the way to 15% for a corporate sflat probably not. but he'll be able to make some cuts. and those cuts when do you the math can produce significant earnings, particularly for u.s. based companies. not so much for global companies. a company like even pall that has a lot of their operations outside the u.s., apple, won't benefit as much. >> and we'll save the whole question of the border tax for another conversation. charlie, thanks again. >> as eamon reported, president trump signed an executive order ending the country's participation in the transpacific partnership. and he said he's doing it to put a lot of people back to work.
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john harwood is covering that story tonight. good evening. what are the implications, not only for workers but also the economic position with asia? >> well, first of all, it had been widely assumed, sue, that the transpacific partnership would not be approved so there is a limited immediate impact. however, some former obama administration officials who very much wanted this to go through and some republican who's did think it is going to be a blow to american influence in asia and a gift on china which is trying to make its own regional trade pact. john mccain put out a statement saying this was a strategic mistake that will hurt the united states for years. nevertheless, trump signaled and it the question what steps in in place of the tpp that the administration might do and china might do. >> let's talk about nafta. anything said or done about that today? >> no.
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and i have to stay pro nafta analysts were more positive about renegotiation. that mean a more benign effect. the president of mexico, president trudeau, or prime minister trudeau of canada, that they are going to be able to make some sort of arrangement with president trump. and remember, part of the transpacific partnership was to renegotiate some part of nafta itself. so the obama administration was for that. we'll see what the negotiations produce. they break down. then the question, the trump administration outright withdraw. >> he was busy today. he also signed an executive order putting a freeze on federal employee hiring. what are the details of that? >> not many details. it is an pore exempts the military. just like the regulatory freeze
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which was signed on friday, exempts urgent situations that departments decide they have to do. in the past, hiring freezes have not actually produced much results beyond headlines. there was a gao study after both president carter and reagan instituted hiring freezes in early 1982 that said a lot of companies then hired part time workers and might have even incurred costs from disruption of the operations. so maybe one of those things that looks good when you say it but doesn't have a big impact on tax players. >> all right. thank you very much. >> any changes to trade agreements, especially nafta, will impact the auto industry. tomorrow president trump meets with the ceos of the big automakers. the president get car makers to build more vehicles in the u.s.? if it does happen, how much could it drive up the cost of cars and trucks here in the
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u.s.? >> in the roosevelt room of the white house, president trump told dozen of ceos, it is time to build more in the u.s. >> we want to make our products here. >> for the auto industry, building more cars and trucks in america would mean a dramatic change. last year, just 57% of the cars and trucks sold in the u.s. were built here. of those ill ported, most came from mexico, canada is that japan. where the big three have long struggled on sell cars due to japanese regulations. >> as an example. we sell a car to japan and they do things to us that make it impossible to sell cars in japan. and yet they sell cars to us and they come in by the hundreds of thousands of biggest ships i've ever seen. we have to talk about that. it's not fair. >> it's too soon to know if
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president trump will succeed in driving more auto production to the u.s. the ceo of ford whose company dropped plans for an assembly plant in mexico following harsh criticism from the president is encouraged by the discussion. >> very, very positive. and i think very positive meeting for the united states of america ask manufacturing in general. >> if the automakers import fewer vehicles and are forced to build more in the u.s. where labor costs are higher. analysts say prices for cars and trucks will likely go up. how much is unclear. and how willing are automakers to add assembly plans for small plants and crossovers. after bankruptcies rocked the auto industry, many automakers are cautious about adding costs. they realize the u.s. auto market is the most lucrative one in the world. and competing here could increasingly mean building here.
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"nightly business report," chicago. >> ford will take $2 billion charge because of the way pensions and retiree benefits. the automaker is counting them in the year they occurred. it used to account for them over a number of years and the change will be reflected in the 2016 net income. on wall street, stocks closed lower as investors looked for more details on the president's policies. stocks were dragged down by energy shares and a so-so quarter from mcdonald's. the dow jones dropped to 19,799. the nasdaq was off 2. the s&p 500 off 6. a federal judge today blocked the $37 billion merger with humana. they said it would affect competition. that sent shares lower and etna higher. it comes days after the
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president announced dismantling the affordable care act. >> the justice department hailed today's ruling blocking the acquisition of humana as a victory for seniors. a federal judge rejected the deal saying the proposed merger is likely to substantially lessen competition and medicare. it would more than kill it in 350 this counties nationwide despite plans to divest. they think it will be tough to save t 37 billion deal. >> etna has the option to appeal. but they have to have humana on board. and if there are others that pick up the value of the company. >> they believe anthem and cigna went to court to fight anti-trust charges will likely see a judge block their merger as well. setting the stage for a whole
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new round of health insurance deal making. 18 months ago, insurers were trying to get bigger to compete under the affordable care act. now the prospect of less regulation under the trump administration has them hoping for greater long term stability in the insurance market. president donald trump signed an executive order giving government agencies authority to release regulatory burdens, such as waving penalties for insurers. they don't see an immediate big impact for individuals or insurance but say it is a first big step toward repeal. >> i don't think it has changed what is likely to happen. i think the action will be in congress, starting with house the, in collaboration with the senate. >> for insurers and those covered under the aca now, the big question remains, just how the administration and the republican congress will go about with repeal plans to
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ensure a smooth transition. "nightly business report," new york. the new president also recently made it clear that he is not happy with how drug companies priced their medicines. even though he is applying pressure, prices are still rising. >> donald trump moving quickly to dispel any expectations he would go easy on the drug industry for its pricing practices, saying in his first press conference this month, the drug industry is getting away with murder. >> pharma. pharma has a lot of lobbyists, a lot of power. and there's very little bidding on drugs. we're the largest buyer of drugs in the world and yet we don't bid properly. we're going to start bidding and we'll save billions of dollars over a period of time. >> biotech stocks lost almost 5% of the value since those comments. as investor anxiety rose. >> we've seen a lot of tweets and one liners in terms of
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interviews. but not a lot of substance. >> though anxiety is up, drug price increases are still happening. this month, cellgene raised the price of a drug by 8%. there were almost identical increases for humira and enbrel. and the prices have risen significantly and in lock step for years. rising also last summer, last winter and the summer before. a pattern repeating time after time for almost ten years. >> has opened both companies up to scrutiny. and actually, quite surprising it hasn't happened already. >> senator bernie sanders has honed in on price increases taken by takers of insulin. they say no such practices take place. what can trump do? beyond tweets, he may end to give medicare the power to
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negotiate drug prices. that would require working with congress to pass legislation. the industry is responding. today, starting a new campaign to try to change public perception. >> we have a great story to tell and we'll do a better job telling it. >> a major push from the drug industry to show it is not the sole beneficiary of price increases. they said more than a third list prices go back to insurers or the government or to other entities such as pharmacy managers. this battle is not a new one. some companies responses are not new either. more than a dozen large drug makers promised to keep their drug increases in whine the consumer price index. that was in 1993. in response to president bill clinton's health plan. to many, it feels like the same old song. for "nightly business report." still ahead, more investors are putting their money in etfs
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and now the industry trying to figure out the best investments for a trump administration. consumer financial protection bureau fined citigroup more than $28 billion for giving mortgage borrowers the run around them allegedly withheld information about foreclosure. cities it is pleased. the company says that it now expects to close its deal with verizon in the second quarter and not the first as previously thought.
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the "wall street journal" reports the securities that and change that commission is investigating whether yahoo!'s two disclosed breaches failed on report in a timely manner. yahoo!'s shares followed the earnings news. they finished up 35 cents at 42.20. mcdonald's said domestic same store sales fell in its latest quarter but the results were still good enough to beat estimates and profit and revenue at the fast food chain also came in above expectations. shares though off just a bit at 121.38. halliburton posted earnings as the second largest oil field services company was held by an increase in drilling in the u.s. the revenue fell 20% and halliburton warned of weakness outside north america. shares down 3% to 54.80. sprint said it would take one-third stake in the streaming
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company called title. several reports said they paid $200 million for that stake. under the deal, the 45 million customers will have access to titles offerings and sprint ceo will join the board of directors. sprint rose to finish at $9.18. and amazon is reportedly making a move into the do it yourself auto parts business. the new york post says the ecommerce giant recently signed contracts with several auto parts manufacturers to grab a piece of that $50 billion industry. amazon shares up 1%. while the auto parts retailers were all down 2% or more. the etf industry is approaching 3 trillion in assets under management. it is growing fast. as dmanlds demand for this type of investment tool hits a record. and as the largest trade fund conference, industry growth
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wasn't the only hot topic. >> it's the biggest etf gathering yet with close to 2,500 participant spread out over four days of meetings. this one hot topic on everyone's minds. trump, etf. the company came up at a panel i moderated. you can't just buy an etf that consists of stocks that might been it from a trump presidency, at least you can't yet. there's plenty of discussion. here's one. the aerospace, pkb, the building and construction, it would benefit from more infrastructure spending. if you believe a trump presidency will see higher volatility, higher inflation, maybe more debt. the gold etf. there's a hot of disagreement about whether trump will be bullish or bearish for the
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dollar. some have been floating contrarian plays. the most popular is europe. short on the glar. and based on four years of underperformance in europe, it may be very tricky. that's why some are gearing up for trump headline investing by using narrower sector, like the oil and gas exploration. or the defense aerospace. or the pharmaceutical. pjp. the most unusual idea i've heard here is that twitter should sell co-location services to high frequency traders so they can be as close as possible to twitter services so they'll get them sooner than anyone else. coming up, one high profile
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entrepreneur has a few things to say about the new president's unusual style. kroger is add go its nail to the list of company creating u.s. jobs. the that sue market giant plans to higher across the chain. ralph's, dillon's and others. main street businesses want to increase hiring and many are looking to washington and policy changes from the new president to help them expand. one high profile entrepreneur has his own take on our new government and its potential
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impact on business. kate rogers spoke to daymond john. >> prumpl esident trump is on a mission to start american job growth. fellow businessman turned reality star daymond john thinks the new president may be on to something. >> what's your take on it? >> love it. you know why? i'm sitting here with you because i will be here every day myself, and not give to it an assistant. and no more hiding behind anything. that's what people do. >> the shark tank investor behind the empire says he is keeping an open mind about trump and his administration which is already put in a regulatory freeze and vowed to eliminate hurdle that's stand in the way of american growth. >> i'm an american and my fellow americans elected mr. trump. and i think that he is a
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brilliant business person no matter what we may think about him. his name is around the globe. that means he knows how to work people. >> while trump's focus as of late has been focused on keeping manufacturing jobs in america, that's not enough. >> i want to see education. i want to see all of our fellow americans who are suffering from unemployment and things of that nature, i don't necessarily know if i want to see more factories. they're good but it is a give a man a fish instead of teaching him to fish. if you teach education and teach everybody what to do, then somebody has to program them. somebody has to build them in different ways. so i think education is key. as long as our government is trying to educate people, then we don't have to outsource to china and india and all these other countries. >> having served as a presidential ambassador under the obama administration, john said he is also more than willing to pick up where he left off for president trump if asked. >> i never thought about it like
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that. i'm just waiting for cuba to run. then i'll be able to sleep in the white house one day. so far no word yet on whether or not mark cuban plans to throw his hat into the ring. to see more, head to our website. nbr.com. >> thanks for joining us. >> thanks for me as well. have a great evening, everybody. we'll see you back here tomorrow night.
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♪ >> this is "bbc world news." funding of this presentation is made possible by the freeman foundation. newman's own foundation, giving all profits from newman's own to charity and pursuing the common good. kovler foundation, pursuing solutions for america's neglected needs. and aruba tourism authority. >> planning a vacation escape that is relaxing, inviting and exciting is a lot easier than you think. you can find it here, in aruba. families, couples and friends can all find their escape on the

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