tv Nightly Business Report PBS June 22, 2017 5:00pm-5:31pm PDT
♪ this is "nightly business report" with tyler mathisen and sue herera. ♪ >> crunch time. the senate republicans unveil their health care plan, but the opposition mounts including within the gop. and with a self-imposed deadline approaching, can the bill get passed? >> unwanted offer. qatar airways wants a piece of american airlines but the u.s. carrier is not exactly thrilled. we'll tell you why and what might be behind the gulf airline strategy. and digital dollars. why big-name companies are fighting over the likes of youtube sensation. all of that and more for "nightly business report." it's thursday, june 22nd. >> good even, everyone. i'm contessa brewer in for sue herera. >> i'm bill griffeth here at the
new york stock exchange in tonight for tyler mathisen. the veil of secrecy was finally lifted today as senate republicans unveiled their version of the repeal and replace health care bill. the draft ends the obamacare individual mandate and takes aim at federal support for medicaid. naturally, not everyone is happy and the gop wants the bill passed by the 4th of july break. health care makes up about 16% of the overall economy, so any legislation will have a big impact, and it was felt today on wall street. the major insurers were higher, as you can see here, up fractions. but it was really felt among the hospital stocks which all got a strong bump today, especially attended health care and even the pharma stocks for the most par were higher today. kayla has more on what is in the senate bill. >> reporter: the senate health care bill met with vocal opposition from advocates for the disabled. >> no cuts to medicaid!
>> reporter: the sen at's version titled "the better care plan" includes deep cuts to medicaid. over time states would get less and less of the extra money provide willed by washington to insure more people. democratic senator elizabeth warren blasted those cuts. >> medicaid is the program in this country that provides health insurance to one in five americans, to 30 million kids, to nearly two out of every three people in a nursing home. these cuts are blood money. people will die. >> reporter: the opposition's not just from democrats, four conservative lawmakers, rand paul, todd johnson, and mike lee found fault with the draft, because it does not cut enough. >> we're keep the subsidies, we are boosting the subsidies for stabilization or risk pools and i think it looks a lot like obamacare actually. >> senate majority leader mitch mcconnell has a week to turn the
tide. for the bill to pass only two of the senate's 52 republicans can defect. in addition to the medicaid changes the bill differs from one pass by the house last month by offering tax credits based on income, not age, and up holding payments to insurers to offset the cost of those plans. mcconnell says the status quo is not an option. >> because obamacare is not working by nearly any measure. it has failed and no amount of 11th hour reality denying or buck passing by democrats is going to change the fact that more americans are going to get hurt unless we do something. >> reporter: one option, take the vote the floor without the public support. if it fails, lawmakers go back to the drawing board on a key campaign promise. for "nightly business report," i'm kayla touche, washington. >> as we mentioned health stocks have been on a tear. so should investors jump in or have you missed the boat? here to discuss it is the managing director and health care policy expert at capital street. it is great to see you today.
we saw a slew of doctors groups and medical groups come out against the senate version of this bill. so what is behind the momentum of the stock? >> well, biopharma has had a real rally and that started it all about a week ago with some great clinical data, and then there was a draft executive order from the white house that kind of alleviated investors' fears, then today you had the senate health care bill that not only didn't have anything on drug pricing that was negative for the manufacturers, but it was also a better bill in that it was more moderate than the house repeal and replace bill and had a lot of goodies for the insurers and for hospitals. you've got a medicaid expansion that lasts about three years longer than in the house bill. you've got 112 billion, with a "b" in stabilization dollars for the plans. also you have the industry taxes that go away. so there was a lot for the insurers and the hospitals to really like in this bill.
>> as you know, four different senators came public today with their concerns about this bill, one of them ted cruz. he wants lower premiums. another, rand paul, he wants fewer subsidies. you can't have both of those. they would be at odds with each other, and doesn't that point to the difficulty of passing this complex kind of legislation? >> it does. you point out something really important. there are the rand pauls of the world who want a one sentence repeal of obamacare, and then you've got other folks who want medicaid to actually last a little bit longer, some more dollars for opioid which is this public health epidemic in the united states. it will be a fine needle to thread. let me say this, i would not at all be surprised to see early next week a newer version of the bill. we'll get a cbo score prior to that on this version of the bill, and there could be some amendments and what not to really get to that 50 votes, 51 vote threshold by the end of the week. it is not the end of the world if they have to do it after the
july 4th recess. i think the real issue is if they can't get it done by the august recess, at that point i think they're just going to have to bail and move on to tax reform. but i think that the senate could get it done, send it back to the house, and hopefully -- i guess hopefully from the gop perspective ram it through. >> with capital street. great to you see. thank you so much for the insight. well, that strong gain in health care stocks did help cap any losses in the overall market today although the losses weren't much. to point out, the dow just fell by 12 points, closed at 21,397. the nas damage managed a nearly 3 point rise and the s&p was off just a point. oil prices, which have been sliding, they stabilized a bit today, gaining 21 cents. settled at $42.70 a barrel. >> it is not only oil prices that are low, gas prices are sitting at a 12-year low for this time of year, giving
consumers the opportunity to spend that money elsewhere. so what might those gas savings be spent on? patrick jahan, senior petroleum analyst at gas buddy is here to talk it through with us. aaa says this 4th of july holiday upcoming is going to be gangbusters. how much of the savings on gasoline will be spent on more travel? >> well, quite a bit of it. you think every penny the national average declines, it is a $4 million daily savings to the united states, and you are talking about gas prices that are even under last year. this is a shock. we did not project this. so a substantial savings, $15 million a day being pumped into other areas of the economy, mainly auto sales have been on a roll. now they're starting to cool off, but still the winner, as well as travel, airlines, seeing record amounts of travelers as well, and entertainment. all of those sectors really getting a boost from the extra money motorists are having in their wallets.
>> yeah, the last time we had lower gas prices like this, pallet rick, restaurants, we saw a direct correlation as the amount being saved was going toward restaurants. people decided to eat out more, didn't they? >> yeah, that's exactly it. i think this time around since gas prices are still relatively low, motorists may actually end up getting to their destination for under what they budget, so you may not see the budget fast food prices, the low price fast food be winning out on this. it could be the fast casual or even the casual dining that sees more of a win. anyway you slice it, motorists walking away with a handful of money on the nation's busiest driving holiday. >> patrick when we saw gas prices kei rocketing up past $4 a gallon, we saw the sales of fuel conserving vehicles growing as well. are we seeing something opposite now because gas prices are so low? >> very much so. in fact, back when the era of low gas prices started back in late 2014, it only took really a
month or two for americans to start ditching that attitude of fuel efficiency and going back to bigger cars, and they've been doing that for the last two years. in fact, crossovers have been very hot, and we're seeing that according to university of michigan numbers on a monthly basis. the fuel efficiency of newly-purchased vehicles is till below where it was in 2014 when gas prices were very high. so clearly reflective of american's at tulds of continuing the buy new vehicles that are perhaps bigger. >> it is nice when you go to the pump to spend half of what you spent just a couple of years ago. patrick jahon with gas buddy. thank you. >> well, in the first of its two-part annual task, the federal reserve said that all 34 of the nation's largest banks made it through their so-called stress tests, meaning that the banks met the fed's threshold to survive a severe economic downturn like the 2008 financial crisis, and next week's second part is the one that wall street is really keen on, that is whether the fed allows the banks
plans to declare different denieds or announce share buy backs. that will be next week. tech week continues at the white house with another summit of industry leaders including ceos from companies like verizon, at&t and general electric. the leaders were eager to talk drones with the president. eamon javers was at the white house. >> reporter: as technology week rolls on here at the trump white house, the president hosted another large group of ceos today, this time a group of ceos from the drone industry, from the internet industry and venture capitalists who finance new business. the president very much in his element surrounded by those ceos. >> jeff, congratulations on a great career, a great career. i was sad to hear it in one way, and in another way i said, boy, what a good job. >> steve, it is great to have you here by the way. really good. you have done a great job. i always say you have a hell of a lot of money for that sale. i don't think you have been given enough. i don't think you were ever
given enough credit for the deal you did for your shareholders. >> i have to say about randall, the job you have done at at&t, because it is like two companies you started and then it was made very different by government, and now here you are again. really a top job, and i want to congratulate you. that's not easy to do. >> reporter: each of the ceos had an opportunity to present the president with ideas on everything from drone technology and regulation to rolling out 5g broadband across the country. some had very specific ideas. >> what's really important for us is that in the prior administration this type of meeting didn't happen until the end, after -- until after the rules were already decided. this administration and their leadership is taking a different approach. they say we want to hear from you before we get this wrong. we want to make sure we have the rules set right, so i'm encouraged by that. >> reporter: the president had the opportunity to tout the successes of his administration, particularly on rolling back harmful regulations to business and also on touting the stock market's success under his leadership. he also got the opportunity to see a mini city demonstrating 5g
roll out and even to play with an industrial drone. for "nightly business report," i'm eamon javers at the white house. and as the white house works with leaders on developing emerging technologies, one of the linchpins of the president's campaign is re-emerging. workers at a carrier furnace plant in indianapolis are preparing for a first round of lay-offs in less than a month, despite assurances from president trump that most of their jobs were safe. the agreement to keep the plant open, which was announced three weeks after the election, was supposed to be a signal that mr. trump was changing the economic development game plan. but as scott cohn reports from indianapolis for us tonight, it hasn't quite worked out that way. >> reporter: a new president and a new day. >> they're going to have a great christmas. >> reporter: 1400 factory workers had been told their jobs were going to mexico. now the president-elect said 1,100 jobs would be saved at
least. >> so the 1,100 will be a minimum number. >> well, i knew we were going. >> reporter: just an hour earlier union leaders including robert james had gotten a different story from the company. only 730 jobs, a little more than half the factory workforce, would be saved. >> the other 400 along would the engineering building which was something that we knew from the beginning that was staying and was not leaving. >> i felt like it was political. it was just, you know, he wanted to claim it as this big victory. >> reporter: what happened? technically mr. trump was telling the truth. there was a deal to save nearly 1,100 jobs, it just didn't specify manufacturing jobs. less clear is what happened to his broader message, that this would change the way companies decide where to do business. >> and they can leave from state to state and they can negotiate good deals with the different states and all of that, but leaving the country is going to be very, very difficult. >> reporter: but the ceo of carrier's parent company says nothing is really changed.
>> unless there's a compelling business reason, you know, moving from one state to another doesn't make a heck of a lot of sense. >> reporter: even workers are under no illusions. >> they can go down from $20 to $3 in another foreign nation, that's what nary going to do. so you're not going to do it from going to indiana to michigan or indiana to tennessee. >> reporter: proof critics say that the trump strategy is flawed. >> it is not like a throw-away line at carrier in which the main message was about saving jobs from flight to mexico is going to cause companies to do something irrational. >> reporter: state officials here defend the $7 million in subsidies they're paying carrier to stay. >> having those jobs here, high wage jobs is helpful to our economy. >> reporter: but even they admit they prefer to pay companies to come to indiana, not pay them to stay. for "nightly business report," i'm scott cohn in indianapolis. up next, why american airlines isn't really happy with a possible big investment in the company. ♪
♪ american airlines says that qatar airways has expressed interest in taking a 10% stake in the u.s. carrier. the possible investment comes against the backdrop of u.s. airlines expressing opposition to what they claim are unfair subsidies provided to those gulf carriers by their governments. still, the news lifted many of the major airlines today with united being the exception. phil lebeau has more on what maybe behind the move and if it could change how american airlines is run. >> reporter: this one is a head scratcher. qatar airways wants to buy up to 10% of american airlines, even though the persian gulf carrier
is regularly blasted by american ceo doug parker for getting millions in subsidies from qatar's government. parker has said for years those subsidies are unfair because they pay for qatar to expand into the u.s., hurting american airlines and threatening the jobs of workers. in a statement to american employees, parker said while anyone can purchase our shares in the open market, we aren't particularly excited about qatar's outreach and we find it puzzling given our extremely public stance on the illegal subsidies. airline veterans are equally baffled. >> i'm not so sure that ultimately it wouldn't be seen as a positive for american stock and a vote of confidence for mr. parker. >> reporter: the middle east airline says qatar airways believes in american airlines fundamentals and intends to build a passive position in the company with no involvement in management, operations or governance. what is qatar ceo akbar al bakr
up to? some are hoping he's hoping it could convince regulators in washington to soften views. while qatar airways making a stake in mern airlines, don't expect it to change how american views the foreign carrier. in fact, doug parker plans to keep fighting qatar's expansion in the u.s. phil lebeau, "nightly business report," chicago. staples may be going private and that's where we begin tonight's market focus. according to reuters, the retailer is in advance talks with sycamore partners regarding pa potential takeover that could be worth more than $6 billion. shares of staples rode to $9.20. consulting firm ak sen sure beat revenue expectations as the company saw solid demand for digital and cloud services. accenture raised earnings outlook for the year citing a
smalling than expected impact from the dollar. swiss drugmaker novarta said its heart treatment reduce the risk of cardiovascular problems in people who previously experienced a heart attack. the drug is already approved to treat rare autoimmune diseases. the company says it plans to begin discussions with regulators to begin the approval process. novartis rose 4.5% to 8634. cost cuts helped barnes and noble post a narrower than expected loss. revenue fell at the bookstore chain, but the results were still ahead of estimates. the company says it expects same store sales for the year to fall in the low single digits. barnes and noble rose more than 7% to $7 even today. cruise operator carnival reported earnings that beat estimates even as fuel costs rose. the company also saw sales grow and said it was lifting its
earnings guidance for the year due to a strong number of bookings. shares fell though by 1% to $65.69. >> and bed, bath & beyond posted earnings that missed estimates as the home goods retailer faced higher costs and saw same store sales that fell. revenue was plat and that was below analysts expectations as well. shares initially fell sharply in after hours trade tonight but did end the regular session up a fraction at $33.74. small business is very eager for tax reform, consistently at or near the top of small business owners' concerns, the industry is eagerly awaiting a real plan from the white house. well, north carolina is one state that has given small business owners a bit of a break, and some say that reform could be a good model for a federal plan. in her latest installment of small business matters, kate rogers has more from charlotte, north carolina. ♪ >> reporter: in charlotte, north
carolina, small businesses like melt in your mouth cupcakes are hoping for federal tax reform under the new administration. mother/son business owners julie and michael chambers said they pay some 35 cents in taxes on every dollar they make, and it is one of the things that weighs most heavily on their minds as they make decisions about when to hire and expand. >> we're in the process of trying to open up two new stores, and just paying the taxes on this one is taking a lot of capital away that we could be spending, using on something else. it is very important for us to get the tax burden off of our backs. >> reporter: their company is structured as an llc, meaning they pay taxes at the individual level. >> thank you so much. have a great day. >> reporter: the chambers aren't alone in their desire for change. in fact, a recent cnbc survey monkey small business poll found taxes ranked the top concern for 25% of small businesses as a whole. north carolina revamped its tax code in 2013, lowering both corporate and individual tax
rates and giving somewhat of a break to companies like melt in your mouth. president trump's blueprint for tax reform includes parity or equality between large corporations and small businesses that file at the individual level with a flat rate of 15%. earlier this week house speaker paul ryan reiterated the importance of having an even playing field between large and small business else. right now the top rate for corporations is 35% while the top individual tax bracket is 39.6%, which doesn't include additional taxes on some businesses like the medicare payroll tax. >> here in america eight out of ten businesses file their taxes as individuals. in fact, most of our jobs come from these new and these small businesses, and under our crazy system successful small businesses pay a top marginal tax rate of 44.6%. it is crazy. >> reporter: jeremy wannamaker, ceo of charlotte's way point solutions group, hopes trump and
congress can work together to lower rates across the board, saying he would like to use his capital to grow his business. >> if the tax rate was reduced i could take that money, reinvest it in the business, and reinvesting in the business means hiring more people, buying equipment, doing something that impacts the economy as a hole. >> while both charlotte-based businesses are hoping for tax reform, neither is convinced it is coming any time soon. >> they're pushing health care hard right now and i don't see if they manage to get it pass i don't see them having anything left to get any sort of meaningful tax reform pushed through. >> reporter: for "nightly business report," i'm kate rogers, charlotte, north carolina. and coming up, the big business battles over youtube stars. ♪
the federal communications commission is proposing what it calls an unprecedented fine of $120 million against a miami man for making nearly 100 million fake robo calls last year. those calls offered phoney vacation deals and used fake photo id and tricked consumers into thinking the calls were coming in locally. time for your daily amazon story. amazon is reported looking to charge advertisers nearly $3 million for ad packages that are set to run during the thursday nfl games it will be streaming on its amazon prime service during the coming season. reuters says those packages will include 30 second spots that will run during those ten games. amazon paid $50 million to stream those games. and finally tonight, speaking of streaming, the eighth annual bid con is under way in anaheim, california. it is where tens of thousands of fans gather to meet their
favorite content creators. julia boorstin is there to look at the battle ground it has become for digital platforms and the ad dollars they're fighting for. ♪ >> reporter: bid con is ground zero for hundreds of youtube stars and the fans that love them, which means it has become a key place for brands like disney and nickel odeon to set up starts. >> it is unavoidable for advertisers to work on youtube. >> reporter: channel factory software helps content creators and advertisers on youtube by pairing grand with content from some 5,000 creators representing about 3 billion video views to assure their ads are shown in the right context. context and brand safety are more important than ever to the companies and stars here at bid con. earlier this year a number of big-name advertisers boycotted youtube after an expose revealed ads placed next to offensive content. youtube made changes and many
brands have returned, but one analyst estimates the boycott could cost youtube as much as $750 million and some creators are feeling the pain. >> since three months ago we've seen creators decrease in revenue as much as 80, 90%. so it is a significant, you know, piece of their revenue. >> i wanted to make a video -- >> reporter: but stars particularly say content like this youtube channel which has 8.5 million subscribers are seeing business booming. >> i have not seen any decline. my content from the very beginning, because it is baking videos and tutorials, are very family-friendly. >> reporter: and internet stars here are starting to spend more time creating for facebook and its instagram, both ramping up presence here with speakers and this instagram installation. facebook is still not driving ad revenue for creator the way youtube is. >> i wouldn't say montization has been a big thing on there just yet. i'm hoping it catches up to what youtube is, but for the meantime
it is probably going to be sponsorship. >> reporter: facebook and instagram aren't the only one ramping their presence, so are at&t and verizon. mobile carriers are increasingly looking to it to make their services appeal to this valuable demographic. i'm julia boorstin in california. that's "nightly business report" for to night. i'm contessa brewer . thanks for watching. nice to see you, bill. >> yes, good night fellow content creator. i'm bill griffeth. have a great evening, everybody. we will see you again tomorrow ♪