tv Nightly Business Report PBS December 12, 2017 5:00pm-5:31pm PST
>> announcer: this is "nightly business with tyler mathis climbing higher. the dow and the s&p 500 extend further into record territory, as the tax bill advances and new details surface. check your paycheck, because there's a good chance it could look very different come the new year. changing fees. how you pay for the internet could change with this week's fcc vote on rules that govern the web. those stories and more tonight on "nightly business repor for tuesday, december 12th. good evening, everyone, welcome. thanks for joining us. the s&p 500 closed at, get this, its 60th record of the year. the dow also finished at a new high, thanks to two main
drivers, the tax bill and the federal reserve. we begin tonight with that tax bill. a final draft does appear to be taking shape in a house/senate conference committee. there are reports late tonight that an agreement has been reached on a few key issues. and ylan mui has the new details. >> repor republicans closing in on the final version of the tax bill. two sources briefed on the plan tell me that the corporate rate will be 21%. it's unclear right now when that would kick in, right away or not until 2019. but it is slightly higher than the 20% rate that was in previous versions of th bill. the top individual rate would fall to 37%. that's lower than the senate's original proposal for a 38.5% top rate. the deduction for mortgage interest would apply to loans up to $750,000. this would only apply to new loans, existing mortgages would still be grandfathered in. also the deduction for passthrough businesses would be at 20%. so not quite as generous as
republicans had been hoping for. a white house official confirmed all of these details and said they represent, quote, the current state of play. the caveat here is that nothing is final until everything's final. but republican members of the conference committee are slated to have luncp at the white hous wednesday before holding a public meeting in the afternoon. republicans want to get to a final bill by friday and send it to the president's desk early next week. ylan mui in washington. optimism helped drive the blue chip dow index and the s&p 500 higher. the dow went to 24,504, a record. the nasdaq fell 12. the s&p 500 was up four, also a new high. bob pisani has more from the new york stock exchange >> the dow and the s&p were lifted to record highs once
again. two main things powered today's very modest rally. expectations for a rate hike and continued hopes for tax reform. we saw a mild rotation from growth back to value stocks with technology taking a breather and bank stocks getting a boost from rising bond yields. this comes a day ahead of the federal reserve's rate decision, of course that's tomorrow, and many are expecting a rate hike this month. house speaker paul ryan elsewhere said house and senate lawmakers are close to the finish line, that's his words, on a tax reform deal. we've been waiting for this for a long time. kentucky senator rand paul raised some questions about whether he would vote for the tax bill after tweeting that he would not, quote, in good conscience vote for the proposed government spending bill to avert a shutdown. he said the bill would add to the nation's already massive debt. so he's a maybe. the s&p suffered a slight blip midday on this news but regained most of its lost ground to close
just off of the day's highs. now, finally, boeing powered the dow higher today. it was up more than 2% after the aerospace giant raised its quarterly dividends. boeing is already e dow's best performing stock in 2017, up almost 90% so far this year. for "nightly business repor" i'm bob pisani at the new york stock exchange. the policy reserve policy meeting started today and it ends tomorrow with what's widely expected to be an interest rate increase. what might happen after that? steve liesma >> reporter: last meeting of the year, and 98% of the respondents to the cnbc fed survey think the federal reserve will hike to end the year. after that, three rate hikes on average expected in 2018. that will bring the funds rate back up to 2%. that next rate hike next year, the first one happening in march. 67% see the rate hike happening
in march. this will be yellen's apparently last news conference, with jay powell, the nominee. we asked our correspondents to compare yellen and powell. they think yellen is strong in six of the eight categories we asked about, including economic expertise, economic forecasting. they think powell is stronger in regulatory expertise and knowledge. overall, not too bad for powell but he has work to do to catch up with the reputation of yellen, especially when it comes to the economy. with big changes coming to the fed, there's also big changes coming to your taxes. 72% of our 44 respondents say congress will pass the tax bill this month. 23% next month. who will benefit? just 5% say regular workers. 51% of respondents say shareholders and executives. 44% do say that both will benefit equally. there is a kick to gdp coming from this tax cut in the opinion
of the economists who answered our survey. about half a point in '18, another half p'19, and a half over the ten-year average. bad, something of a kick. you'll see that when you look at the overall gdp forecast, year over year for next year. 2.85% for 2018. you can see that's risen since june. also 2.85% for 2019 as well. for "nightly business r a special election for an alabama senate seat has added to the pressure to get the tax bill done. the republican candidate is mired in controversy. a democrat hasn't won a senate seat in that state in 25 years. john harwood is in birmingham for us tonight, john, good to see you as always. why is this vote so critical for the broader republican agenda? >> reporter: well, republicans, sue, have a 52-seat majority in the senate. that leaves a very narrow margin for error. if doug jones, the democrat,
wins tonight, that will shrink even further, to 51. if for some reason the tax debate were to be spend past the end of the year and doug jones wins the race and would be in office, that would mean the republicans could only lose the one vote they've already lost, bob corker's, and no other to pass that bill. the same is true on other elements of the agenda, whether it's nominations, judicial appointments, an infrastructure bill or entitlement reform. >> when would a new senator be seated in the chamber and what do the latest polls say, the last ones? >> reporter: we expect the new senator would be seated probably after thanksgiving but before the first of the year. there's some give in that. certainly republicans in the senate leadership would like to slow walk it and make sure tax reform is done before that happens if doug jones wins, maybe even if roy moore wins because he's somewhat unpredictable. the latest polls are all over the place, we have no idea how
this will turn out. a poll from fox news yesterday showed doug jones ten points ahead. another showed moore nine points ahead, a third showed them tied. it all depends on which component parts of the electorate turn out in high numbers. do african-americans show up for doug jones, who is not pa well-known and hasn't run in previous raises before. do evangelicals stay home because they're discouraged by the child molestation allegations against roy moore. and do republican suburbanites, especially around birmingham, in the suburbs here, do they defect and go with the democrat? >> so many things. after christmas, we'll see. thank you, john harwood in birmingham. homeowners are also watching the big tax bill. some are concerned it will wipe out deductions. but inve it as a boon to business.
diana olick explains. >> reporter: finley miller is an and a landlord in in southern atlanta. he rents his own place but owns two single family rentals. >> it's attractive relative to what i would guess the stock market and other asset classes would do. and i think that will continue to be the case in the foreseeable future. >> reporter: unlike owner occupants, who could see valuable tax deductions cut in the republican tax plan, landlords are taxed differently, as businesses. they can write off all the costs like the mortgage interest, the maintenance, the management, and the property taxes. the tax plan wouldn't touch them. they could instead see higher demand. >> if it's competition for businesses to locate in somewhere like atlanta or dallas versus somewhere like l.a. or new york, then, you know, maybe it's incrementally more attractive now in those lower cost areas than it was if this tax plan hadn't gone into
effect. >> reporte home prices are already high and rising across much of the nation. if the tax plan makes the cost of home ownership even higher, that could put more potential buyers on the sidelines. >> as people delay a transition into home ownership, as they wait to see what prices will do, we people, more households stay on the renter side of the equation, which could create even higher rents than are available today. >> reporter: he says his company, home union, which helps investors find and manage rentals, is seeing a surge in demand right now. part of that may be investors leery of an overheated stock market, looking to diversify. but some is likely the expectation that rental demand will increase. there is of course a risk. some in the housing industry argue that the tax plan could cause home prices to drop by as much as 10%. but that would likely be in higher cost areas, which is not where small investors tend to play. for "nightly business repor i'm diana olick in washington.
the potential changes to the tax code come as many americans are doing their year end tax planning. as we reported yesterday, the timing is creating some confusion. so tonight, we're going to focus on how it could affect your paycheck in the new year and how payroll departs are scrambling to prepare. david karp is here, welcome, david. >> thank you, sue, good to see you. >> tyler and i were just talking off camera about the fact that everybody is going to have to file a new w-4. but do you have to do that immediately? how soon will some of these changes, once they're finalized, kick in? >> the sooner the better. the sooner you can make adjustments to take advantage of whatever the tax law can afford you, the sooner it will reflect on your paycheck. there's changes in the company level, the new w-4 needs to be
produced. it's a tedious process for every employee and gets a paycheck. >> it will be very different, not only for payroll departments within companies or for the big payroll processors like adp, but for individuals who have grown accustomed to having these things called personal exemptions. as id it, those exemptions go away. a lot of people who may have itemized deductions may not under this bill. so it could really be hard work to get the right amount of tax withheld so you don't face a huge tax bill or a big overpayment at the en year. >> that is correct. i mean, exemptions are basically completely removed from the current tax bill. we are yet to see how, if you will, the itemized deductions are handled. we tend to believe that many of them will be taken off the table. and there's also allowances which the irs needs to opine on.
the allowances also affect your net take home paycheck. there are a lot of moving parts that are yet to be determined and frankly they need to be ironed out before you fill out a new w-4. >> should you sit down with your financial planner, should you consult somebody like you, a tax guy that really knows what the implications could be? because it could be very intimidating and confusing and you don't want to make mistakes. >> absolutely. it's going to be a whole new form. it's still going to be a w-4 but there will be new fields, there will be fields that are removed. frankly i think people will need help filling it out. the best action is to go to your tax adviser or at a minimum ask for your human resources department, because you're not going to be the only one that has the question. >> all right. we'll leave it there, thanks so much for joining us, we appreciate it. >> thank you. >> ty? then there is the issue of a government funding bill. it's all about washington these days. we reported early in the program that senator rand paul says he's
going to vote no on the spending bill. but this afternoon, senate majority leader mitch mcconnell said a deal would be reached to prevent a shutdown. he said democrats will oppose any deal to hold down domestic priorities. ahead, traffic lanes. why the upcoming fcc vote on the internet could change how you use it and america's small businesses are feeling good. according to the latest survey from the national federation of
independent business, optimism is at its highest level since the early 1980s. that optimism could translate into more hiring as a growing number of businesses say they have plans to expand. southern california wildfires continue to rage. the fires are climbing up mountainsides. coastal communities covered in smoke. the thomas fire, the biggest, has been the difficult one to contain. all of them are difficult, of course. recent updates put containment at 20%. it is estimated to have caused more than $48 bill damages. and that number is likely to grow. the chairman of the fcc has a warning for investors looking into bitcoin. jay clayton says be careful. in a statement on the agency's website, he cautioned investors to be wary of frau and market manipulation in the cryptocurrency markets. bitcoin hit it another record high today.
facebook will change the way it pays taxes on it's not international operations. that's where we begin tonight's market focus. the social media company said next year it will start paying taxes in the country where the profits are made. the company currently funnels sales through its subsidiary in ireland, a country that has an attractive corporate income tax rate. facebook is making the move at a time when policymakers are urging tech companies to be more transparent about where they pay corporate taxes. shares finished down 1% at $176.96. pepsi has reportedly placed a large order for tesla's new electric semi trucks. reuters says the beverage giant has reserved a hundred of the new vehicles, making at it largest known order to date. the move is intended to cut fuel costs and reduce fleet emissions. pepsi joins a growing list of companies that h placed orders. shares of pepsi up a penny.
tesla's shares rose to $341.03. after the dell, data pace provider amomongo db said stron demand for its services helped sales edge past expectations. they also reported a narrower than expected loss and gave upbeat guidance for the quarter. shares volatile in the extended session, not mongo-like, but they ended the day up at $29 even. after the bell, verifone said it plans to launch a $100 million share buyback program. but verifone is forgetting disappg earnings for the quarter and the year. that sent shares lower in after hours. they ended the regular session up 1.5% to $18.47. biotech amgen after the bell said it was raising its quarterly dividend by 125% to
$1.32 a share. shares were flat in after hours but ended the day down a fraction to $176.26. the federal communications commissi will vote on new internet rules this thursday, changing rules put in place in 2015 that presented internet service providers from blocking, say, access to your favorite sites like google or slowing down netflix so your favorite shows become basically unwatchable. many believe the outcome of the vote is a foregone conclusion, and if that is the case, what could the changes mean for your mobile and wireless bills? laura moy is deputy director for the center at privacy and technology at georgetown law school. >> thanks so much for having me. >> we're delighted to have you with us. what will it mean if we go away from net neutrality, which basically said all sites have to be treated the same by internet service providers like telecom companies and so forth?
>> right. so the short of it is that consumers are likely to end up paying more, either in their monthly service fees to internet providers, or in the monthly fees they pay to subscription services. and, you know, in the long run, we could actually even end up seeing tiers of internet service based on what consumers like to see and do online, sort of similar to the way that cable a now. >> so more of an a la carte approach. >> right, it is possible. >> what do you do as a consumer? i assume you have to be careful, read the fine print closely and make sure the package you have now would be what you want after these changes presumably go into effect. >> that's right. because, you know, if these rules do in fact go away, then consumers could actually see a slowdown in some of the services that they are currently used to doing online. right now, consumers are used to
maybe signing up for a basic internet package and they assume they'll be able to view the streaming videos online that they want to view and play the games they want to play online. but if these rules go away, we could see fast and slow lanes on the internet and consumers will have to get quite careful about reading the fine print in their internet packages to make sure what they sign up for -- >> i'm going to use a loaded word, laura, i don't mean it in a derogatory way, but it sounds like the reason prices will go up, you think, for consumers is that the internet service providers will differentiate and discriminate between people who use very data-heavy streams and those who don't, and you'll have to pay more if you are one of those heavy data customers. >> i think that's right. you know, and really, the internet companies are going to want companies that provide content to pay more too.
so the netflixs of the world. this is why consumers may end up seeing -- >> is there anything wrong with that? if you're a heavy user, shouldn't you pay more, if you're one of the companies like a netflix or a hulu, shouldn't you maybe be charged a little more? quick answer, please. >> i think in a way it's double dipping. consumers are already paying for their internet connection, so are these companies. now internet providers want to charge more for both. coming up, discounts found in a galaxy this is the time of year that a lot of people spend a lot of money. but if you thought that was purely an american phenomenon,
think again. china creating its own special shopping days. and today, 12/12, is one of them. eunice yoon report. >> reporter: china's double 12 is like a slimmed-down version of double 11. but it's growing and it's growing fast. and this year, double 12 is making a big international push. alibaba says 100,000 overseas stores will be taking part. 16 countries will be represented. including the u.s., canada, germany, and japan. the bestselling american brands for alibaba on double 12 are p&g, yum brands kfc, as well as burger king. double 12 is a little different to focus on offline events. so discounts at stores. today in china we saw long lines and from a major supermarket
chains such as walmart as people were looking for major discounts on staples like vegetable oil as well as salt. another big difference is that double 12 tends to focus on smaller vendors and smaller brands. so all day today, some of the smaller vendors were live streaming themselves eating noodles, for example, that they like to sell, or showing off some of their popular clothing that they made, especially in women's fashion. it's part of this big international push. alibaba is expanding the using of its payment system, alipay, by leveraging off relationships in india, thailand and the philippines. it's also focusing on the chinese overseas community as well as chinese outbound travelers by offer major discounts at restaurants, hotels, and sites at chinatowns across the world. for "nightly business repor" eunice yoon in beijing. "star wars" fans are rejoicing and so are retailers.
not only is the latest installment about to hit theaters, but "star wars" themed products are filling up the store shelves. it may put a lucrative twist on disney's well-known empire. julia boorstin has more. >> reporter: "star wars" has sold more toys than any other movie franchise in the history of the toy business. it's been the number one property for the toy industry over the past year. this year, an estimated $1.4 billion worth of "star wars" toys are expected to sell, according to the toy expert jim silver of ttpm. >> the big winners are generally the retailers, because it draws to stores, and t hasbro, because they have 70% of the toys, and of course disney. >> reporter: including other categories such as videogames, apps, and clothing, ttpm projects there will be $3 billion worth of "star wars" retail sales this year. disney doesn't say what percentage it takes from left hand "star wars" retail sales but it's likely in the hundreds
of millions of dollars. this year's lineup of toys around "the last jedi" aims to expand "star wars'" appeal. there are more tech toys than ever, including battle drones that look like aircraft from the film and a $200 len oovo augmend reality headset. disney is partnering with rag and bone for a special edition line, most of whic out, includi. "star wars" is partnering with gap, kohl's, macy's, gap and others. >> "star wars" appeals to so many different age and gender demographics, to both male and female. it will appeal to 3 and 4-year-olds, especially with a new character like the porg. you have 60-year-old collectors. you have a wide age demographic which really doesn't exist on both brands. >> reporter: you'll see
unexpected products including dole pineapple. dole is licensing characterso put on its products and for a game on its dole. all of these products aren't just generating revenue for disney. they're arguably also marketing the film. for "nightly business repor" julia boorstin in los angeles. that does it for "nightly business" m sue herera. thanks for joining us. >> i'm tyler mathisen. thanks from me as well. have a great evening, everybody, .
>> this is "bbc world news america." funding of this presentation is made possible by the freeman foundation, and kovler foundation, pursuing solutions for america's neglected needs. >> 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 island with warm, sunny days, cooling trade winds, and the crystal blue caribbean sea.