tv Nightly Business Report PBS March 7, 2017 4:59pm-5:29pm PST
this is night"nightly busin repor report". >> all it takes is a spark. the courage to seek the unknown. to innovate, disrupt, to move us all forward. to explore a different perspective. at nasdaq, we connect the world. its ideas, its capital, its businesses, the people that drive global economy. the future isn't tomorrow. it's right now. all it takes is a spark. nasdaq. >> vital signs. which industries win and which lose. under the new gop health care plan. >> digging deep. why key players in the
multibillion equipment manufacturing industries are gambling on a better future. >> women on wall street. one of the biggest asset managers wants more women in the board room and it is using the iconic bull on wall street to get its point across. those stories and more on "nightly business report" for tuesday. >> good evening. welcome. washington, wall street and main street were all focused on health care following the release of the house republican plan to replace the affordable care act. as we reported last night, insurers will still cover people with pre existing conditions and allow children to stay on their parents' plans until the age of 26. the big change, tax credits under the new plan are based on age and get phased out with people with higher incomes. on obamacare, the cost of your insurance determines your tax credit. here's a look at the winners and losers. >> for many of the winners,
oweder, low income people, it would mean lower tax credits. while obamacare's losers, higher income people works gain a tax break as well as several taxes on high income earners to pay for obamacare. >> we need to equalize the tax treatment for the purpose of coverage. they get a benefit. those folks out there in the individual small group market no, tax benefit. that's what this plan would do. >> here's how it would work in a high cost market like mobile, alabama. a 60-year-old earning 20,000 a year now gets $13,200 in exchange subsidies. according to the kaiser family foundation. earning $40,000 gets you about $10,000 in six disat $60,000, nothing. under the gop plan, $20,000 and $40,000 earners would only get $4,000 in tax credits. or $60 to 70% less.
those earning up to 75,000 would now gain $4,000. but insurers would also be allowed to charge 60-year-olds five times higher rates than younger people. up from three times under obamacare. >> what happens when people can't afford insurance is the only people that tend to buy it are the sicker people. so this is not only going to cover fewer people but it won't be good for the others. >> the gop plan repeals the aca employer mandate to provide coverage. for companies like the one in north carolina, it is a mixed bag. the so-called cadillac tax is not repealed. just postponed to 2025. >> the cadillac tax has been a mythical creature that may or may not happen. i feel that we already made strides to reduce kind of the value of our plans.
>> for now, they're planning to offer more high deductible plans no matter what happens in congress. >> it the has not gotten any cheaper over the past 14 years. the reality is it goes up. >> until the congressional budget office releases its report, there are no official estimates on how many people could lose go coverage under the gop plan or how much it costs. night"nightly business report." >> let's turn to chris for the potential changes coming to the health care land scape and who might the winners and losers be? welcome. good to have you with us. those stark numbers that she just showed on the screen, comparing the it's six disunder the obamacare plan compared to this one. fewer people will be buying health insurance one way or another. is that going to hurt insurance
companies? and if so, which ones? >> i think if you look at it, the people over age 50 of 50 to 65, you're right. they're going to get less of their credit. they'll be charged more. it is a negative for them. for those under age 40, the tax credit for individuals may be enough to cover the entire preep-up. so their premium will be paid by the tax credit. as a result you could see people under age 40 entering the market and people over age 50 to 65, which tend to be higher utilized, exiting it. as a result, insure here's are involved in the individual market, united has a little exposure, aetna has some exposure, all of them could be benefited. it will get better as it gets younger. >> what about hospitals? obviously a lot needs to be discussed and it will change before the vote goes through. how do you view the hospitals and the critical care aspect of
this? >> sure. so in the house republican plan, if it becomes law. they remove the disproportional hospital share cuts that were part of affordable care act. additionally the medicaid expansion population over the next three years stays. additional states that haven't expanded like florida, like texas corks expand. additionally, they get an additional $10 billion for states in general to help with the safety net. as a result, you can see hospitals actually benefit over the next 18 months to two years in revenue. now, outside of that, when the medicaid expansion starts to wean off and move to the per capita model. that probably would put pressure on hos which would negatively imfact bottom line. >> i know tenet was one of the ones that took a big hit in the market today. a couple of other industries that i know you follow. one would be pharmaceutical and
biotech. this bill doesn't have much pertaining to that. the president tweeted today that he has a separate plan coming that will reduce the prices of drugs. does this bill have any effect that you can see on biotech or pharma? >> the bill does a couple things. number one, it repeals a tax that is $30 billion over ten years. that's bigger than medical device tax. additionally, it doesn't touch anything on drug pricing which is really the potential policy is to hold back handful of these stocks from when candidate hillary clinton tweeted about it. we feel really optimistic about where it will be. we also believe repatriation, if that happens as part of tax reform.
you could see a lot of cash flowing back this. it is one of our most optimistic area. >> all right. thank you. we appreciate your clarity tonight. with tdr. >> drug stocks had a down day after president trump took twitter promising to cut the price of medicines. he said he is work on a new system. pricing will come way down. the president offered no specific buzz it was enough to extend shares of the biotech ticker symbol ibb by more than 1.5% the president has plenged to invest in infrastructure and to renegotiate trade disease and changes to either one could ripple through equipment building industry. this is the report from las vegas. >> the equipment manufacturing
industry a $160 billion business in the u.s. but is this pretty lackluster? construction hasn't been strong enough to require a lot of new machinery. oil and gas hasn't been strong and on the farm, farmers say they're not making any money. but con expo held every three years. everyone is talking about an infrastructure bill of. >> it could be a trillion dollars investment. >> critical things first. it has to pass and then it has to be funded. in the past a lot of times they have passed but not funded it. >> even as they are every smarter, they have a three-day printer. it is being offset by a border tax and maybe a trade war. >> 35% of our business depends on foreign trade. >> it would be devastating.
these are large, and porting companies that rely on the rest of the world for their satisfies. >> for example, most of our competitors, caterpillar, deer. >> bobcat is owned by korea based company, and he says his bosses are a little confused by washington of. >> when i talked on our korean executives, they said can we help build the wall? i said it isn't quite that simple. >> he said he would say yes on attaches and regulation but be careful about trade. >> the don't put barriers up and cause them to retaliate. >> even the most of the satisfies are domestic, many are farm here's export crops to china, canada and mexico. and if the trade war hurts farmers, it hurts deer. and the feeling at this convention, it could hurt everybody. >> on wall street, stocks saw
the first back to back declines since january. investors were not only analyzing the new health care blue print but also tighter monetary policy. the dow industrial average fell. the nasdaq was off 15 ask the s&p 500 dropped 6. oil prices held steady today at $via barrel despite the expectation that u.s. production could increase. that expectation for a rise in production was partially offset by comments from saudi arabia oil minister who said the fundamentals of the crude market are improving. brian spoke to him in houston. >> the heaviest hitters are here in texas. also the chairman of saudi. he spoke exclusively with cnbc. the heaviest topic was about
opec's agreement. and i began by asking him whether he thought that would continue past the dead may. >> it is pre mature to ask. >> one week into the agreement, it has been good overall. if you look at the numbers in total. and the countries are heating up. so with some optimism that the deal will be continued. we asked if he thinks the worst has been seen in oil. >> i think they're coming back into line. i think the demand is picking up. and the investment flows have slowed down significantly which may be an overshoot. certainly they're not going to cause this. >> so there you have it. some optimism that maybe the worst has passed in the oil
world because opec will be able to do something it has struggled to do in the past. an agreement between drois cut production. but there is more optimism this year than last year when oil was above 3 a barrel. >> still ahead, an airline that no longer wants to fly under the radar. >> hawaiian airs set to grow nately. that story is coming up next. after years of watching airlines in the united states merge to become bigger and even more profitable, had a wind airs
is flying in a different direction. growing while remaining independent but expanding from hawaii to around the world is a challenge. >> hawaiian airlines is the niche carrier trying to break the mold for flights in and around the islands of hawaii. >> we're about six to seven times larger and that's been organic growth. we've done it by going to asia with our fleet of new wide body aircraft. and plenty of more people here in the community and bringing the aloha spirit around the pacific rim. >> hawaii's passenger growth has been impressive. fueled in part by its continued dominance of the short flights between islands of hawaii and to
the pacific coast. but as it targets expansion to the u.s., or in huge markets like beige, analysts are skeptical that it can avoid the tu turn, the turbulence. >> if you have a thin cash level, if you have only an okay the cash flow, things can go wrong very quickly. >> they can become larger and stronger which raises the question, can hawaiian stay independent and become a truly international airline? >> we think we can continueo grow. we want to run the best we can. >> growing beyond the south pacific, the global ambitions to spread the hawaiian brand.
dick's sporting goods issued a disappointing outlook. the athletic retail posted he their profits and revenue. the company followed with weaker than expected, cutting 20% of its lower volume vendors. sales were off more than 8%. next monday satellite tv provider dish network will be added to the index, replacing linear technology which is being bought. the shares rose 4% to $64 even. >> a high schoolest packard enterprise. for more than a billion. the deal is expected to provide with a larger a ray for its customers. hewlett-packard shares off 1%.
nimble storage, really nimble today. surging 86% to $12.58. h & r block sent a lower number of identifies caused the copy's revenue to drop. they reported a wider loss but the results were better than wall street expectation. shares up 8% but the end of the regular day down a fraction. >> global advisers is making a new for more companies to add more females. it is a statue of a young girl leaning toward the bronze bull as part of a push for we will directors. if they fail to take steps to increase the numbers on the boards who are women. state street global adviser deputy chief investment adviser joins to us talk about her company's push. and we should note that they
have three board member who's are female on their board of directors. welcome. a pleasure to have you with us. >> thanks for having me. >> you carry a lot of clout. you'll give them time to make changes but you'll also be watching them very closely. >> we are. we believe it is our duty to improve the outcome for shareholders. one of the way we do that is by engaging aggressively around those issues that we think will drive performance and diversity we believe will do it. >> this isn't just because you like girls. it is because studies have indicated that companies that are more diverse in terms of representation of women and others perform better.
>> that's right. the studies, one in particular, found companies with more diversity in their senior leadership performed better than those without that diversity by more than 36%. we've seen studies that suggest these companies take zero risks. that they don't have as many for headline news items that would bother them from a governance perspective. >> you've been on wall street for a long time. i've covered wall street for a long time of are you surprised there the hand been more diversity in the board room? and two, what do you think the reaction will be when these letters go out to these companies? >> so, personally, i'm very surprised. i've said this for more years than i can share. these issues we've been talking about for a long time. i think the challenge is that we need to tackle the root causes. some of the issues around advocacy and sponsorship are
holding leaders accountable of there's a real business case here. if the bottom line is that they'll be better served, and senior membership as well, that's better for investors. and i think people the haven't responded the way they need to. >> 30 seconds. what will you do if a company that you approach doesn't comply with your request? where's your hammer? >> so first and foremost, we want those companies to hear us and to make those steps to broaden diversity on the board. in the end, if we can't get them to do that, we will vote against the committees. >> thank you for joining us tonight. >> and coming up, high-tech takeout. why the fast food industry is getting caught up in the digital drain.
ordering fast food on your phone seems like a simple enough idea. it has worked well for some companies as they've tried gain back the business of millennials. recently mcdonald's tried it out. is it too little too late? >> burgers, pizzas, burritos and coffee. the battle for your fast food dollars is going high-tech. the world's largest restaurant company mcdonald's is joining the digital craze. adding digital ordering to 20,000 restaurants. it joins starbucks and others catering to the changing habits of consumers. >> businesses have to work
harder around the experience the entice customers. technology is making it easier for people to stay home. if you want to see a movie, you can use netflix. we need people out and about. that's where we prosper. >> according to the group, digital food ordering grew 18% last year. now accounts for almost 2 billion food service. it accounts for half of the disease and orders. and it plays an important part. people are twice as likely to use it when there is a coupon or discount with mobile ordering. they hope it will help their stock surge. >> pizza guys have a head start. they should be able to add to their food type that's work abelong the pizza. but also, mexican works well. there is no reason why chipotle can't benefit from digital
delivery down road. panera food travels well of the will. >> so is mcdonald's too late for the game? >> we have fully integrated. it isn't just the consumer technology. it is more engaging and useful. it goes all the way through. >> there's not to say there aren't challenges of going mobile make it easier to go forward. >> the orders overwhelm the kitchen staff. there were long lines and frustrated customers. something mcdonald's doesn't want to repeat. i'm sues an lee for "nightly business report." >> we want to remind you, this is the time of year your public television station seeks your support. >> and we're grateful for it. thanks for your support. have a great evening, everybody. we'll see you tomorrow night.
>> "nightly business report" has been fund in the part by -- >> all it takes is a spark. one idea to take flight. the courage to seek the unknown. to innovate, disrupt, to move us all forward, to explore a different perspective. at nasdaq, we connect the world, its ideas, its capital. the businesses and the people that drive global economy. the future is not tomorrow. it's right now. all it takes is a spark. nasdaq.