tv Nightly Business Report PBS August 24, 2017 5:00pm-5:31pm PDT
this is "nightly business report". with tyler mathisen an >> refiners are shutting down. gas prices are rising as it looks like the first hurricane since 2008 will strike texas. pressing agenda. central bankers meet as the world's major economies expand, but there's considerable uncertainty for the glob >> sticker shock. health care costs if retirement are rising and are expect ed to go higher. those st good evening and welcome. i'm sue herera. tyler is off. hurricane harvey is head straight towards the center of
the u.s. energy center. its track while still unpredictable could threat p one-third of u.s. refining capacity. and some refiners began to shudder their operations, which on hurricaneof a nu harvey and its potential impact on the energy market. >> tropical storm harvey is gaining steam and is expected to land in corpus christi tomorrow. there's some speculation it could become a category 2, which would mean the chance frs heavy wind, flooding and damage are high. we haven't seen a storm like this in that region for almost a decade, but these event tend to spike crude, gas and natural gas prices. a bad storm could shut down refineries and cut off imports and exports in the wra area. there are six main regio
esz it little less than half the category 1 hits a refinery, it takes about a week to get back up. category 2, more like two weeks. the energy markets are not in panic mode, but traders who recall past storms say prices will move quickly if this storm packs a bad punch. >> shutting down a refiner is a complicaims gas prices. getting one back online after a big storm is even more complex. sharon explains. >> getting a refinery back online due to a hurricane or major storm can be a lengthy operation. the first step returning evacuated personnel to the refinery could take a few days depending on conditions in surrounding areas. once on location, the crew evalm d floolding or downed powerlines. if power is out, the refinery has the to wait for local utility to restore it. once team restart the refining unit.
this is done in the sequence of the actually process. at a large facility, tlktd be be do machine might require a day or two to start up. but in order forrefineries to get back to business, it needs crude oil to process. however, storm d trapping the oil tankers and therefore, simply could be stuck offshore. all told, it could take up to two weeks to get a refinery up and running again and even a small facility could require as long as seven to ten days. >> so, what does this mean for gas prices? could we see a spike? let's turn now to patrick for some answers and he is the senior petroleum analyst at gas buddy. welcome. nice to have you here. >> thanks. >> we know right now of the storm, how big of an impact do you think it might have on gas price is and the refineries? >> first of all, this is a pretty dramatic turn of what
happened this morning for this storm to go from a category 1 o saying get toup a 3 or 4. so if this storm is a 3 or 4, kkd mean refineries are down for one to two weeks and longer and it's kind of a rise we can expect in gas prices. right there's a low to medium risk of rices going up, but that could change as this hurricane continues to gain stre. >> what are you going to be watching for in this storm? i've heard various different predictions. one, you just mentioned, the category of the particular lingers over land. which might really affect the refineries more than if it just moves through quickly. >> that's right. i think that's the biggest
potential of this storm sits and surges and drops rain all over the area. i think the primary concern i would look at is flooding. stor of course, power outages. how long the power may be out could greatly impact things as well. ut right now, i think the rainfall, not in inches, but feet. that could be a big problem for there certain parts of the united states that might see the spike in gas prices or at the very at least, an increase in gas prices rather than other part of the u.s.? >> almost certainly the gulf area. that's the primary market these refineries serve. the south, southeast, maybe the mid-atlantic. because of the massive colonial pipeline, which runs up new jersey, does pick up simply from gulf coast refineries and starts to head up the east coast. so, primarily, those two or
three areas, s northeast, but k, there is a sympathy factor here. that refineries in other areas of the country mainly and the midwest, excuse me, the great lakes and the mit, s actually sending gasoline down to the gulf, bring prices up in the great lakes as well. >> all right. on that note, we'll keep your from gas buddy. on wall street, stocks b wo of a speech by janet yellen tomorrow at a gathering of central bankers. we'll have more on that in moment. the dow jones industrial average fell 28 points to 21,783. the nasdaq was off sempb and s&p 500 was down five. paul ryan is pushing the republican plan to cuts and sim returns. today, he discussed the need for reform with a group of boeing employees at its plant in
everett, washington, and his di ho after president trump blamed congressional republican leadership for what he called the mess awaiting them this fall as they seek to raise the debt ceiling. elon traveled to washing. >> house speaker paul ryan taking the case for tax reform on the road. he was here in everett, a boeing facility and talk with employees as well as the compa yuleberg. but pump through a wrench in the speaker ryan and senate majority lead mitch mcconnell for not having raised the debt ceiling yet. i sat down with speaker ryan and here's his response to president trump. >> i don't really take it as going after me. look, an option we were looking at, but the va deadline came up and we wereno that then. i'm really not that worried
about this. we have plenty options. we will pay our debt and hit the increase before this is penetrated. mean we wi increase. plenty of options in front of us. that wasn't available for us. >> do those options include a cline hike? >> there was bunch of different options, not going to negotiate tht worri about get thg done because i know we'll get it republican's signature issue. paul ryan wants to simplify the tax code and rewrite it, but that could mean taking on popular deductions like the for mortgage interest. >> we ackno and believe you need to maintain the mortgage interest deduction. whether it can be improved and how it works, that's a discussion we have and they have all their hearings in process for. the point being we're going to maintain those things because we think they're important. home ownership, charitable
giving, these are things everybody needs to do, conjunct dramatically simplified tax code. >> ryan acknowledged in our interview that tax reform is going to involve hard trade offs and that every household and business is going to have to be willing to give up some goodies to lower rates across the board. >> mortgage rates are now t a their lowest levels of the year. according to freddie mac, the average 30-year fixed rate fell. it's dropped three straight weeks yields on the ten-year treasury have fallen as inv investored put more mo bonds. mortgage rates track the neeld yooeld on the enten-year note. another weak sales report out today. existing home sales fell last month. yesterday, you might recall, we told you sales of newly constructed homes also dropped. diana oleic explains why buyers
are hold iing back. >> sales of exis lowest level in almost a year. well below exp realtors put the squarely on simply. >> the investors have gobbled up many of the properties and then the market was down and therefore, there's very little available for home buyers for owner occupancy at the lower price point. >> that is where most of the demand from younger, first time buyers is. builders aren't helping much either. still focusing on move up product, even though their sales slumped in july as well. the inventory of homes for sale has been dropping for three straight years and pushing home prices to new highs. july's median sale price hit a new record. part of that is just because more high-end homes are selling. at the start of 2013 when home prices were beginning to bounce off the bottom of the housing crash, the share of homes sold above $1 million was just 9% of
sales. 40% of the market was homes priced below $100,000. today, that high-end share is more than 14%.th some are calling it an invenn crisis with no turn around in sight. not even in the dog days of summer when demand usually wanes and ply is able to rebuild again. i'm diana oleic many washington. >> housing is a key part of the economy, but overall economic growth has been muddling along. just one of the issues that will be discussed by janet yellen and other bankers at the annual gathering of policymakers in jackson hole, wyoming. that's whe steve lease is gh >> gathered a decade ago, they g global finan crisis. circumstances are different and somewhat better this year for the annual kansas city fed symposium, but issues are still pressing. for the first time in decade, a world's major economies are
growing. instead of being on the verge of buying assets of cutting interest rates to battle recession, the fed is hiking and perhaps soon as september. >> you saw the men minutes of the last meeting. markg any time now looking at september that is always a fupgs of what issues are going on when we meet k is set up the there. describing how that would had t committee would take. >> there's still considerable uncertainty. it's a potential government shutodown next month that can ed happens. prump hasn't yet decided who he'll pick to head the central bank, so this could be janet yellen's last meeting as fed chair unless she's reappointed. also unclear is whether congress and the president can exceed a fiscal stimulus. and the fed is debating why it continues to miss its inflation target and whether it should hold off raising rates again
until it gets chose to its 2% target. >> the issue is about inflation and i think really try iing to factors, which should be creating more inflation y enable disruption that are muting pricing power of businesses. i'm not saying we won't act by the end of the year, i think we have the ability to be pat and and see how these forces unu fold >> mario draghi as markets speculate whether he'll announce reduce stimulus next year. so it' same majestic mo exiting policy new set of rather than launching it and new leadership on the way at the federal reserve. i'm steve liesman in jackson still ahead, amazon is coming out swinging and that means cheaper items at whole
foods starting monday. shares of retailers that sell groceries fell after amazon said its acquisition of whole foods will close monday. and starting monday, customer is will see immediate -- like avocado, organic salmon and baby tuss. amazon said it will continue to lower prices and will eventually offer special discounts on prime members. the move could start a broader price war. shares of kroger, supervalue, costco and walmart fell
dramatically. on a day that saw grocery stocks fall, some traditional retailers saw their stocks trading higher. it's not often that share of guess, perry ellis see double digit gain, but that's what we e saw today and bob pisani tells us if there's a glimmer of hope in the retail malaise. >> it's been a generally dismal retail earnings season, but in the last few days, several retailers have reported earnings better than expect ed. they beat guidance. affirmed guidance. some glimmers of hope. why? because there's some indication that after a lock and uhly be happening. many reported a sequential improvement from the first quarter to second of this year. after two quarters where overall earnings declined -- no one
believes that the disruption from amazon or other online competitors is over yet. no one knows if the retail s e in the next 12 to real months. there's two dozen companies that have gone bankrupt including limit limited, gymboree chlts, but hope springs eternal. investors has been cheered by hope. we've seen this movie before. remember investors were hopingr retailers who reported earlier. they braought up the prices goig into earnings season off. for "nightly business report", i'm bob pisani at the new york stock exchange. >> weak coffee sales hurt results at smuckers and that's
where we begin tonight's market jiffy peanut butter sate it negatively impacted deman and contributed to the lower than expected revenue. earnin missed the mark. shares fell more than 9%. hormel slashed its forecast for 2017 saying higher raw materials cost would eat into profits. the meat producer reported disappointing earnings and revenue as lower sales result. hormel shares were off 5% to $32.09. beacon roofing supply is buying crh's distribution business for more tha billion. it will allow it to enter more markets and help growth in key product categories. shares to 43.54. crh shares rose more than 3% to
it is up 6%, but it's up a lot more than from when you first started doing this survey. 2002. >> health care stretrend is one the the economy. >> why is it so expensive? is it because our health care system isn't efficient? because we're not as healthy? maybe a combination of all? >> i was told we had three minutes, so yes, the it's a e costs.ion of many things so, people have to understand that as wonderful as medicare is they still have a tremendous amount financially they are obligated to. >> when you talk to fidelity clients and others, are they at all aware of or have they planned for how much this may cost them? >> our clients estimate every ye hold a call to educate
themselves to the obligation they face. the understanding is int intermittent at best. >> what are employer doing to employ, to prepare for this type of eck pence? >> there's a different things. benefits they offer their employees. allow them to avail themselves of all the different tax features that we hav whr it's a 401(k) plan, roth, a lot of different things and beyond that, they need to educate people so they understand what again their obligations are. they need to find a way to speak to them that's not this complexity of health care, but in a way they can relate to. >> i think most people who retire think medicare is going to be there are for them. now, there's this push towards medicare supplementary insurance. difficult for people to think they're going to need that much they're not going to be in the best of health.
that they're not prepared. >> this number is daunting and no two ways around it. we hope people start to prepare the best they can. i think the onset and definition a is going to change. >> sobering, but at least you put the clarity and call out and maybe people can start saving sooner rather than later. un, why temperatures g abo the in miami beach and weather. we're talk iing about the
obamacare plans will be sold agreeded to of the u.s sell plaps in a small ohio county which had been left without coverage when anthem pulled out. while every county in the country will have an insurer, more than 1400 could have only one. state regulators have been negotiating to sell plans in counties where many of the big insurers have exited. apple plans to build its next u.s. data center in iowa. more than $200 million were apra appro approved. apple plans to spend more than build two state-of-the-art data centers on 2,000 acres. the projec create 50 jobs which pay a minimum of about $29 per hour. the number of americans filing for unemployment benefits rose less than expect ed last
week. initial un benefits increased 2,000 to 234,000. the data suggests a further tightening of labor market claims have been below 300,000 for 129 consecutive weeks. that's the longest stretch since 1970. e job market remains strong, wages have barely budged. and there's been a big push to raise the minimum wage. that's a big focus for small business owners in miami, which is the top city for start up activity. kate rogers has our stor >> at panther coffee in miami beach, florida, no worker makes less than $10 an hour. with tips, most entry level workers take home an average hourly pay of $15. husband and wife team say generous pay is essential to their business success. >> we can't have a business
without a team fand pe appreciated, or respected, i find minimum wage disrespectful. >> but a battle is brewing in miami beach over raising the local minimum wage. city officials voted to increase it to more than $13 an hour by 2021. nearly $5 above the state's current mit earlier this year, ruled against that wage hike th appeals court this fall. the battle come as the natios g. >> more than half of states nationwide now have wage floors above the federal minimum of 7.25 and hour. advocate groups like the florida retail federation say a wage hike would damage growth and negatively impact workers. >> you're talking about shops that have a fine amount of money. >> he said any wage above $13 an hour would cause him to make ough choices at his sma y at $10 an hour.
>> we might run into some problems where we would have to decrease the amount of hours minimum wage empo might have tou price, which could affect customers, which would affect the overall business as a whole. >> but the mayor told us living on 8 isn't doable. >> how do you live? the government's going to help funding you with welfare, social programs, so basically, the taxpayers are subsidizing the cost of businesses. >> one thing sure, colleagues will be watching this case as they make stigss about hiring and expanding here in the city. and to read more about the minimum wage debate happening in miami, you can head to our website. and finally tonight, the winning power ball ticket was sold to a hospital worker in massachusetts. she claimed the biggest undivided jackpot in history.
more than $750 million. she chose to take a lump sum payment of 480 million or $336 million after taxes. today, she said it's all still sinking in. >> i just want to sit back and relax. and i had a pipe dream and it has finally come true. it came early. >> she said before the news conference, she called her employer and said she would not be coming back. can't blame her. that's "nightly business report." i'm sue herera. thanks for joining us. have a great inky and we'll see
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