tv Nightly Business Report PBS November 6, 2014 1:00am-1:31am PST
this is "nightly business report" with tyler mathisen and susie gharib. brought to you in part by the street.com, featuring stephanie link who shares her investment strategies, and market insights with action alerts plus, the multimillion dollar portfolio. you can learn more at the street.com/nbr. >> i'm eager to work with the new congress to make the next two years as productive as possible. >> we're going to go back to work and actually pass legislation. >> all parties strike a conciliatory tone as they dig in their heels and set agendas. what are the odds washington will get stuff done on issues important to business? >> to do list from the federal reserve to the job market. what does the new face of congress mean for the economy? >> and what to watch.
three sectors that may have the most to gain from a republican-controlled senate. all that and more tonight on "nightly business report." it's wednesday, november 5th. and good evening, everybody. i'm bill griffeth in tonight for tyler mathisen. >> i'm susie gharib. evening. stocks soared to new highs and as investors were emboldened by the republican sweep. republicans made promises to start working right away on important economic issues, including trade, corporate tax reform, u.s. energy exports overhauling the affordable care act and much more. on wall street, the s&p closed at a new record and dow anniversaries and dow utilities arn transport hit new highs. the blue chip dow stocks surged 100 points closing at 17,484, thenack slipped about three points and the sab up 11 points. hampton pearson has more on the
post election agenda for congress, the president and what, if anything, will get done. >> we did it. >> the day after the 2014 midterm elections gave republicans clear majorities in both the senate and the house incoming senate majority leader mitch mcconnell and president obama each made pledges to work together on behalf of the american people. >> there will be no government shutdowns and no default on the national debt. >> i'm looking forward to them putting forth a specific agenda in terms of what they would like to accomplish. let's compare notes in terms of what i'm looking at and what they're looking at. and let's get started. >> tax reform and trade seem to be at the top of the legislative short list while republicans and the president -- but immigration reform is a lightning rod for both. president obama said today he will take executive action before the end of the year. >> what i'm not going to do is just wait. i think it's fair to say that
i've shown a lot of patience and have tried to work on a bipartisan basis as much as possible. and i'm going to keep on doing so, but in the meantime, let's figure out what we can do lawfully through executive actions to improve the functioning of the existing system. >> i think the president choosing to do a lot of things unilaterally on immigration would be a big mistake. it's an issue that most of my members want to address. legislatively. and it's like waving a red flag in front of a bull to say if you guys don't do what i want, i'm going to do it on my own. >> congressional leaders and the president will get down to business at a white house meeting on friday. the agenda includes more money to fight ebola, additionalal funding for isis campaign and wrapping up the government budget for this year. for "nightly business report," i'm hampton pierson in
washington. >> last night's victories by republican lawmakers also raises a lot of questions for the u.s. economy and for the federal reserve. steve liesman has that part of the story. >> the new gop controlled congress could be trouble not just for the president but fed chair janet yell condition, as well. several bills including one to audit how the fed makes monetary policy which she opposed could pass both hoises now and end up on the president's desk. >> i think we ought to have an audit the fed bill that moves through. that makes common sense. nobody can tell you what the dped is. let's have the an audit and see what's there. the president shade he would it be the most transparent president ever. >> how much the gop focuses on the fed is one of the outstanding economics questions raised by the republicans' huge victory. the gop will quickly have critical decisions to make about things like the budget, banking and the minimum wage. a continuing resolution that
funds the government runs out december 11th and the rule to suspend it the debt ceiling expires in march. will the gop risk political fallout from another shutdown to enforce spending discipline? >> in months past we've seen everything go right down to a deadline or government shutdown or the 11th hour. i think republicanss in firm control of both houses of congress are going to get way out in front these issues and address national debt issues, budget issues. >> and voters in five states approved hiking the minimum wage yesterday. to $8.50 in arkansas all the way to $10ed in illinois. about the same level president obama has proposed for the entire nation. and which the gop has opposed. continued opposition could have a political price. finally, many in the gop have opposed all or part of the new dodd-frank banking regulatory reform act passed in the wake of the financial crisis. efforts to water it down could make the gop seem overly
friendly with wall street. good for public contributions but not necessarily good politics. the senate such an overfemming fashion was a tremendous feat. as the saying goes now comes the hard part for the gop, actually governing. i'm steve liesman. >> some encouraging news today about jobs. payroll firm adp reported private employers hired aid better than forecast 230,000 workers in october, that was the most notice four months. an encouraging sign ahead of friday's october employment report from the labor department. >> and, of course, jobsen an wages are a big issue at election time this time around, as well. and now with republicans in control, what does it mean for the labor market? let's turn to diane swan, chief economist at mesereau financial. good evening. >> good to see you. >> is there anything thatting this congress and then president can do to keep the momentum going? we now have unemployment below 6%. what can they do to create more
jobs? >> well, i do think they're already on their way to do it before the election was done. we saw ironically republicans talking about loosening the purse strings in washington, with regard to defense the budget particularly and infrastructure spending. now that they have control, we'll see more of that going forward. being less of a headwind for the u.s. economy coming out of washington will help in terms of employment gains in the u.s. economy. and it's an important help at a time when we're looking at a stronger dollar and increased competition from abroad. that's now the weakness we're seeing in europe is a risk we face as we move into 2015. >> let's pick up on that. with headwinds like a stronger dollar and weaker economies overseas, does that mane theaters going to hurt job growth even if you have a republican-controlled congress that is supposedly business friendly? >> well, i think what we'll see congress is not going to make or break the economic environment. they've done more to break in recent years. they'll stand more out of the way it now. the proof is in the pudding that
they'll move forward on a lot of legislation i don't see. but at the end day they're not moving their direction. we already expected some of this result but also we expected the shifts we had already been seeing to occur on the margins that congress wouldn't be as much in the way in doing things like disruptive like shutting down congress. that is less likely now because we have republican control of congress they wouldn't shut down themselves. that's important going forward. in general, you're talking about the washington can only have a marginal effect at this stage of the game. you're not talking about a big stimulus package or cut in government spending. we're not talking about the big policies. i don't think we'll get corporate tax reform or the big positions that would change the equation. >> i was going to ask you about tax reform. that was discussed by the president and leader mcconnell today during their news conferences. both expressed an interest in rewriting the tax code or at the very least coming up with some
form of tax reform. what could they do that again, going back to the jobs question, would create jobs? >> well, i think what they're going to be doing is spending more money without offsets and without paying for it with higher taxes or cut elsewhere. spending more money on instruct on the highway budget, bridges and things we need to spend more money on. it's on the margin. we're not talking about a big package here but they'll be spending money they vchbt been in recent years and not holding to the cuts in the sequester that had been in place. they're also going to be spending more money on defense generating jobs, a lot of good jobs. it doesn't generate a lot of productivity because you're an building things to destroy things. but isis is out there, a tail wind for spending on the pentagon. they'll get just about anything they want. >> diane, i wanted to talking about minimum wage increaseses. five states voted in favor of minimum wages. we know a lot of republicans are not in favor of that, but do you see a sweep of more states
having higher minimum -- raising the minimum wage and what will that mean for more jobs? >> actually, we are seeing a major sweep across states. it's happening at the state and lel level. did doesn't matter at the federal level. the state and local level has taken it over. cost of living is very different depending where are you live. i think what we'll see a major sweep across states we've already seen a large sweep across states where they start raising the minimum wage. that said, it have a major impact on economic growth than on jobs? i don't think so because at this stage we've got momentum. it could curb some job growth but i think we'll start to see a little bit of wage acceleration regardless of what happens in washington. >> diane, mecir row financial, thank you. >> thank you, about il. >> one with issue talked up today after the republican win, the future of the keystone oil pipeline. one lawmaker is planning speedy legislation to approve completion of the long delayed
and controversial pipeline. republican senator john holden from the oil rich state of north dakota says a bill to finish the $8 billion pipeline which will bring crude from the oil sands of canada all the way to refineries along the gulf of mexico will be one of the first bills his party will put up for a vote in the new congress. >> and energy is just one of the industries that the new senate could have a big impact on. dominick chew takes a look at which sectors may benefit from the new makeup in the senate. >> many analysts and other experts on wall street are out which igure groups would benefit most now that republicans control congress. one group poised to reap big rewards from the gop led congress is energy. it's no secret energy pos has been a central piece of the republican story for quite some time. and now, they're in a position to push forward legislation on a number of energy related fronts. >> you have energy policyou thi increases likelihood something
like ski stone excel passes which would push down energy prices. >> the project is just one part of the story. there could also be fewer restrictions on drilling activities and exports its of oil and gas products. another industry that may see brighter days ahead is banking. because of a possible easing of restrictions on laws like dodd-frank. >> within financials probably some of the best places to look would be the relaxation of the strategically important financial institution the guidelines that suggest that firms such as metlife might not be required to meet the same level of capital cushions or you might see jpmorgan or citigroup or bank of america not necessarily face quite the same regulatory burdens going forward. >> and yet, another hot spot for possible republican attention is health care. lawmakers could look to help boost medicare payment rates to insurers and change tax policy targeted at other parts of the health care business.
>> one of the targets that the republicans have talked about is eliminating the medical device taxation. that has been onerous it has impacted those companies and certainly cause them to be moirls in a fetal tuck position in terms of their sending and their outlook. i think there's probably some effort on that basis. >> those are just a handful of the places some investors are placing bets. and many are hoping stocks can continue their record-breaking run no matter which party is in power. for "nightly business report," i'm dominick chu. >> still ahead, china was supposed to hold the key to qualcomm's future. but are the risks related to do business in that country outweighing the rewards. the answer coming up.
>> one big oil producer is looking to be the first to break a dangds long ban and export u.s. oil without getting explicit permission from washington. bhp billy tan, thing and grow australian mining and energy giant says it will sell 24650,000 barrels of texd crude in a deal worth about $50 million. a strict ban on u.s. energy exports has been in place since the arab oil em bar grow of the '70s. >> earnings after the bell from chipmaker qualcomm but the news wasn't good. it took in $1.26 a share in the fort quarter but it missed estimates by a nickel a share. revenues also missed estimates even those shipments of chips rose by 24% year over year. that was still shy of forecast.
shares were initially lower in after hours id traing bug a missed earnings forecasting is not the only challenge facing qualcomm right now. it's having big troubles doing business in china. josh lipton has more. >> for qualcomm, china offers great potential and also significant risks. the company stands to make a lot of money because of growing depend in china for smartphones that rely on its technology. but qualcomm also has said that china presents significant challenges. so what exactly is going on? for one, chinese hand set makers that rely on qualcomm technology sign a license agreement and pay royalties. analysts at fbr estimate that if a chinese company else is a $200 smartphone using qualcomm technology, then it could be on the hook to pay qualcomm about $8 per phone. here's the problem. qualcomm says unnamed chinese companies are either not paying
the royalties or underreporting the number of phones they're selling. that's potentially a big problem for qualcomm. its licensing business as a whole represents about 30% of overall revenue. it's a problem. we're still trying to quantify it, but it's a substantial problem for these guys. we think it's probably affecting revenues as much as call it $500 million. so it is a sizable amount. >> separately, qualcomm also disclosed that the chinese government is investigating the company under the country's ain't monopoly law. analysts at rbc say it could be another 12 months before there's a resolution to that dispute. qualcomm isn't alone in facing challenges in china. the chinese state media says beijing should punish what it calls the pawns of the u.s. government pointing to cisco, microsoft and google. >> it's very clear that the chinese government really wants to do things internally and
anything with a decent margin coming from abroad will be scrutinized. >> despite these headwinds in china, qualcomm bulls point to the company's chip business which they say is enjoying strong moment tum. its chips are used, for example in apple's new iphone 6. they say the stock is cheap and the company is committed to capital return. still, china now represents about 208% of qualcomm's total revenue and investors want to see more clarity about where its business in china is headed. for "nightly business report," i'm josh lipton in silicon valley. >> record rd quart lit deliver deliveries drove tesla earnings beat. that's where we begin the focus. the carmaker posted a profit. analysts expected tesla to report a loss. the trimmed its sales forecast for the year but since the company was able to deliver more of its model s cars than before did, envesters an cheered the results. >> an during the trading day the
stock closed at $230.97. whole foods reported quarterly earnings at estimates and its revenue met forecast. its higher than expected is results came as the grocer gained market share and launched new products. the stock traded much higher before the closing bell, shares were up just slightly at $39.99. cvs beat wall street's estimates by a penny. earnings were higher on a gain from its spinoff of cvs outdoor. sales where is also above estimates helped by higher distribution revenue from licensing its television shows. shares were up right after the report during the regular session, shares were just a little bit higher at $52.50. also out after the bell, a news corp posted better than expected results. this is a publisher of the "wall street journal" reported a rise in quarterly revenue helped by higher sales at its book publishing and online real estate services business. that sent shares up initially after the bell before the close
shares rose just a fraction to $15.30. >> and there was more time warner lifted its full year profit outlook saying is both its turner and hbo units had strong subscription revenue. company also said that hbo is well positioned to grow its cable subscriptions and add as many as 5 million subscribers who don't pay for cable tv instead using their new streaming video service. shares collided to $77.99. mon da la said third quarter earnings fell as it was hit by weaker revenue about the snackmaker's profit was still stronger than expected and it raised earnings outlook for the rest of the year sending shares to $37.15. toyota also increased its outlook. the automaker now expecting record profits in its current fiscal year driven by the declining value of the yen. the company is also citing cost cutting efforts and strong sales over all, the stock was up
$1.97. >> well, toyota got a lot of help from a weaker japanese yen at the same time, the u.s. dollar continues to get stronger. and with the euro zone economy still struggling and the european central bank meeting tomorrow, the likelihood of a global currency war may just can be heating up. sara eisen has on what the president decides could mean for the global economy and your investments. >> the war is the raging. countries desperately searching for economic growth announcing new policies aimed at weakening their currencies. everybody wants a weaker currency. it makes exports a lot more competitive. take japan, announcing its super charging its monetary stimulus on friday, sending the yen to a seven-year low against the dollar. now the pressure is on for other struggling economies to fight back as their currencies strengthen like europe, dealing with weak growth and falling inflation. that's why investors are raising
expectations that the ecb may announce new easing policies and start planting the seed as soon as tomorrow. >> there are a lot of people that are going to give dragi a hard time tomorrow. i think you'll get real fireworks. no question he had this game plan. he's been implementing it now for a year or maybe actually two years. he's got the germans in a corner and whether it's going to qe with sovereignence or qe with corporates, we're definitely going to get additional qe well beyond what's already been announced. >> what is the tit-for-tat current sit spat mean for your portfolio in the dollar is the losing right now with the strongest currency around. that's why investors are pouring into.cans that do most of their business here at moem and aren't exposed to the stronger dollar. for the overall market in the near term, currency wars are proving to be bullish for stocks because the policies, lower interest rates, quantitative easing that weaken the
currencies are propping up stock prices. investors love easy money. in the longer term, it's more dangerous because currency wars could turn out to be nasty, morph into trade wars and also prove ineffective, creating doubts about central bank policy. but pros say those worries are for the long run. for now though, the more central banks act, the more the free money party goes on. pros say watch china, korea and europe to fire the next shot. for "nightly business report," i'm sara eisen. >> coming up, sotheby's has its biggest auction ever. what's behind the soaring prices as the fall auction season gets under way.
>> well, the fall art auction season kicked off last night in sotheby's in new york city and the prices paid were eye popping. robert frank has more including a looking into who is doing all of this buying. >> last chance. and selling for $90 million. >> it was a night of big prices and small sculptures as sotheby's kicked off the fall auction megasales in new york. the impressionist and modern sale raked in more than $420 million, the highest total ever for a sotheby's auction. the star of the night was a sculpture titled chariot that sold for $90 million or $101
million including commission. just shy of the all-time record for a sculpture. >> chariot is considered jaco metty's masterpiece and one of only six made with only two remaining in private hands. >> the sculpture of a goddess head went for almost $71 million, way above the $45 million estimate. soaring prices in the art market are being driven largely by newly rich collectors from overseas and they were out in force last night. one chinese buyer paid $62 million for this van gogh still life that was well above the $50 million high estimate. sotheby's saying buyers from 44 countries participated in last night's auction either by phone or in person. the market gets another test tonight as christies holds its impressionist sale. this manet cos fetch up to $35 million. and la jair's construction workers with tree could go for over $20 million. the big auction houses expect to
sell close to $2 billion worth of art over the next week. the focus will be on the blockbuster post-war and contemporary sales next tuesday and wednesday. we'll see if these surreal prices are brief abstractions or the new reality. for "nightly business report," i'm robert frank. >> and finally tonight, forbes magazine is out with its ranking of the most powerful people in the world. in third place is the general secretary of the communist chinese communist party she the jinping. in second place our own president and commander in chief barack obama and topping the list for the second year in a row russian president vladimir putin who flexed his muscles this past year by an nexing crimea and staininging a war with ukraine. there were other notables from the business world of fed chair janet yellen, also bill and melinda gates number seven and the google founders larry page and sarah ninth place. >> 72 in all, nine of them were women. there needs to be more women on
that list. don't you think the? >> yes, of course. it's nice to have janet yellen the most powerful woman in the world right now. that's "nightly business report" for tonight. thanks so much for watching. >> have a great evening everybody. we'll see you tomorrow. >> "nightly business report" has been brought to you in part by the street.com, featuring stephanie limping who shares her investment strategy, stocks o stock mix and market insights. plus the portfolio she manages with jim cramer. learn more at the street.com/nbr.
narrator: today, americans are spending hundreds of millions of dollars on wearable devices and smartphone apps to track their fitness and health. smarr: this amazing explosion of wireless health devices is giving us the kind of feedback we've never had until now. narrator: this isn't just the latest health fad. from the number of steps walked to the genes in our bodies, we can now generate our own health data. but who has access to this information, and can regulation keep up with innovation? coming up, how new technologies are helping drive a digital health revolution to hack, track, and quantify our lives. [ heart beating ]