Transcript: Thursday, November 20, 2014

NBR ThumANNOUNCER: This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and Susie Gharib, funded in part by —


SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: Getting down to business. What President Obama will say tonight in his address on immigration and what the business community wants to hear?


SEN. CARL LEVIN (D), MICHIGAN: If you like what Wall Street did for the housing market, you`ll love what Wall Street`s doing for commodities.


TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR: Senator Carl Levin goes after Goldman Sachs (NYSE:GS), accusing it of manipulating the price of aluminum, effectively driving up costs for everyone — from automakers to beverage companies to consumers.

GHARIB: Crash test dummies. Why new crash tests raise troubling questions about the safety of some minivans.

We have all that and more tonight on NIGHTLY BUSINESS REPORT for Thursday, November 20th.

MATHISEN: Good evening, everyone. And welcome.

It was another record-setting day on Wall Street, with all time closing highs for the Dow and S&P 500.

But we begin tonight in Washington. This evening, in a primetime address to the nation, President Obama will outline an executive order offering fresh protections from deportation for upwards of 5 million undocumented immigrants. It is a controversial move froth with political risks, and one bound to have profound impact on American businesses.

John Harwood was briefed about the plan at the White House today and joins us now from Washington.

John, what will the president tell the nation tonight? And who exactly will be covered by his executive order?

JOHN HARWOOD, NIGHTLY BUSINESS REPORT CORRESPONDENT: There are two main groups of people who will be covered, Tyler. The first are the parents and immediate family members of people who already have citizenship or green cards but some of their family members do not. That`s going to be about 4 million people. The second is an expansion of the category of so- called dreamers that the president gave legal status to two years ago by executive action. It would remove some date when you had to be in the United States by and some age restrictions there. That along with some other smaller changes will get up to around 5 million people granted legal status. And as you said, it`s extremely controversial.

GHARIB: Yes, John, it is extremely controversial. We`ve already been hearing from Republicans who are very opposed to the president going around Congress.

What is his legal authority, the president that is, to do this?

HARWOOD: Well, it`s interesting. Republicans, Susie, have taken to quoting the president`s own past statements over the last year or so in which he has said numerous times that he didn`t feel like he had the legal authority to take certain steps that immigration activists wanted. Aides at the White House today distinguished between those statements by the president as saying, essentially, he was saying he didn`t have the authority to do what the Senate passed bill that the House wouldn`t take up did, which is create a pathway to citizenship. What he`s doing tonight is not a pathway to citizenship. It`s much less than that. It`s temporary deferral of deportation.

So, the president is saying that more limited step, which something similar was done by President Reagan and President George H.W. Bush is within his legal power.

MATHISEN: You just answered the question I was going to ask about path to citizenship which this is apparently not in any way. What is the effect on business? Where do they come out on this?

HARWOOD: Well, there are a couple of affects on business. The administration is selling this on two grounds.

One, that it will improve border enforcement by taking resources away from people who don`t merit being rounded up and deported, to more serious criminals, felons, that sort of thing.

Secondly, they say that bringing this 5 million people out of the shadows, as they call it, they will become taxpayers, which will increase revenue, and they will also remove downward pressures on wages that`s exerted by the fact that people are at risk of deportation.

And, finally, there are provisions of this that would allow some high- skilled immigrants to stay in the country longer before they`ve formally gotten their papers allowing them to stay, and it would also create a category of entrepreneurs who if they can show that they have investors and would create a certain number of jobs in the United States could come under this proposal.

MATHISEN: Far reaching impact, John.

John Harwood, thank you very much, John, on the North Lawn tonight.

GHARIB: Well, as John just said, the president`s new immigration policies could have a huge impact on the business community, especially small businesses trying to attract and retain talented workers. We look at the challenges facing one Silicon Valley startup and its efforts to get a work visa for a top executive.

Dina Gusovsky has more.


TREVOR KLEIN, INVESTOR/ENTREPRENEUR: We cannot find the qualified candidates to help drive our businesses for it.

DINA GUSOVSKY, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): In the midst of the immigration debate, some in the business community are feeling disenfranchised, like the founder of TV Page, a technology that allows retailers to sell products with video like this. The viewer can buy the product in the clip with one simple click.

The company has attracted about $3 million in investment to date. One of the main investors: a guy who knows a thing or two about making money.
His sold his own company, to AutoZone (NYSE:AZO) for $150 million less than two years ago. And now, he`s betting on Lior Kuijer.

But there`s one major problem, he founded the technology and could very well be deported by the end of the month, having been turned down for an H-1B visa, Kuijer`s other visa, J1, is about to inspire.

LIOR KUIJER, TV PAGE CO-FOUNDER: I came from the Netherlands. I have a masters degree in artificial intelligence. A lot of uncertainty in a startup company and just introduces another element.

The company depends on me and I have to physically be here in the United States.

GUSOVSKY: And Lior is not alone. Last year, hundreds of thousands of people applied for H-1B visas. And only about 30 percent were accepted.
It`s potentially a major hit for American businesses that could end up costing the United States billions.

One of the only groups of people who stand to benefit are immigration attorneys like Jacob Sapochnik.

JACOB SAPOCHNIK, IMMIGRATION ATTORNEY: I`m trying to give them solutions but I really can`t work with the system where they deny those visas.

GUSOVSKY: And every time a visa is denied, groups that invest in companies run by immigrants can be left holding the bag.

KLEIN: Frankly, we`re looking for the creme de la creme that are going to add significant benefit to the American economy. If we stop allowing immigrants to come into this country that are extremely well- versed in technology and finance, I think we`re going to limit the growth of America and it`s not going to become the land of milk and honey.



MATHISEN: Our guest tonight is a small business owner who supports immigration reform and says she will be listening closely to what the president has to say tonight. She`s Makini Howell, executive chef and owner of Plum Restaurants in Seattle.

Ms. Howell, welcome. Nice to have you with us tonight.

Thanks for having me.

MATHISEN: We`re delighted to have you here.

From what you know of what the president plans to announce tonight, with respect to allowing or deferring prosecution or deportation of people who are here in an undocumented way, how do you think this will affect your business? Will it be helpful, will it be unhelpful or no difference?

HOWELL: Well, I think it would be very helpful. I think what the president is planning on announcing is one of the most sweeping humanitarian acts that any leader could write into law. And I think we have to remember that we`re all immigrants to this country.

And with the industry that I work in, I need workers that are willing to commit their time and their resources, 10, 15 years, to helping me to build my small business into a medium sized business. And I think that we all talk about, you know, pathways to the middle class and how do we get there, but we`ve forgotten how to work our way there. And we need skilled workers that are willing to commit their time in order to get there.

GHARIB: Makini, you make a very good case. But, you know, it`s interesting, whenever they run polls and there`s a recent NBC News poll, and “Wall Street Journal”, saying that most Americans are oppose to this kind of immigration reform.

What would you say to your fellow Americans about what they`re missing in this whole argument?

HOWELL: That we`re all immigrants to this country, number one.

I don`t know how accurate — there are a lot of polls out there, because one that I read said that 52 percent of Americans are for immigration reform. I think that we have a lot of people that are living in this country in the shadows. I think that larger companies are — and predatory employers are taking advantage of these humans that live here.
You know, there are a lot of women that are being forced into poverty, there a lot of children that are not taken care of.

And I think that we really need to understand that going back to the Irish, the way that they were treated. I mean, going back to a lot of the Ethiopian immigrants who we took into our country, we have to look at immigration reform on a humanitarian level, and we have to understand that we just can`t flat out oppose because this is a nation, it`s a melting pot.
This is a nation of immigrants.

MATHISEN: Makini, how hard is it for you as a small business owner in the hospitality industry, where something like 18 percent of undocumented workers or immigrant workers work, how hard is it for you today to work within the system to find the workers you need and make sure that they are here legally, as I am told you do.

HOWELL: It`s very hard, because, you know, if you have an applicant that doesn`t have papers, you don`t hire them. And I think that we have to create some way for people — you`re passing on skilled labor often times.

I think that the immigrant mentality is one of coming and staying and growing, which is something that I appreciate as I try to grow my family business into a medium-sized business. And there are a lot of people that I have to pass on because they don`t have papers to stay in this country.

GHARIB: You know, one comment that we`ve made in the package just before our interview with you was that if you don`t give visas to — you don`t give visas to these immigrants, that you`re limiting the growth of the U.S. and this is going to hinder innovation. You`re an entrepreneur.
How do you feel about that statement?

HOWELL: I think it`s very true. And I think that we are not recognizing is that it broadens the middle class, it strengthens small businesses. It creates more jobs and that helps the engine of — everybody knows the small businesses are the engines of the economy. That helps to strengthen the economy. That puts more money back into our economy.

We have to become a nation of workers again. And we have to understand that it takes people on every level to help to build the economy. We can`t just toss people out, especially people that are already here and working and contributing to our economy.

MATHISEN: Makini Howell of Plum Restaurants, thanks for being — what kind of restaurant is Plum Restaurant? Quickly.

HOWELL: It is an organic restaurant in Seattle, Washington. We have
six locations and we have a food truck and can be —


MATHISEN: All right. Good luck to you, Makini. Thank you.

HOWELL: Thank you. Bye.

GHARIB: Turning now to Wall Street and the markets, new record closing highs for the Dow and S&P 500 today. Investors got into the buying mood, thanks to new reports showing strong data about the U.S. economy, offsetting worries about slowing growth in China and Europe.

Among that data, consumer prices were flat last month. The Philly Fed`s business index surged in November to its highest reading in more than
20 years. Jobless claims fell again last week to a 14-year low and existing home sales unexpectedly rose 1.5 percent in October, reaching the fastest sales pace of the year.

So, here`s how the major indexes looked by the close. The Dow rose 33 points, the NASDAQ up 26 and the S&P added four points.

MATHISEN: More now on potentially unsafe autos. New crash tests raising troubling questions about the safety of minivans, in fact. One popular minivan did so poorly. The safety firm co conducting the test is warning Americans not to buy it.

Phil LeBeau has more.


PHIL LEBEAU, NIGHTLY BUSINESS REPORT CORRESPONDENT: The insurance Institute for Highway Safety calls these crash tests an eye opener. They measure how well drivers are protected if a minivan`s front corner hits another car or pole at 40 miles per hour. It`s a common accident. The Honda Odyssey was the only model to get a good rating from the IIHS, while Toyota`s Sienna was rated acceptable. But three other models, Chrysler Town and Country, the Dodge Caravan and Nissan Quest all received poor ratings.

DAVID ZUBY, INSURANCE INSTITUTE FOR HIGHWAY SAFETY: I think these test results are a very strong reason not to go out and buy one of these vehicles, especially since the Honda Odyssey and the Toyota (NYSE:TM) Sienna offer much better protection in this crash test.

LEBEAU: Dave Zuby calls this collision of the Nissan Quest one of the worst crash tests he`s ever seen. The driver`s door and instrument panel were driven two feet into the driver compartment, pinning the dummy.

ZUBY: I think there is some chance that some people could have been killed in this crash test. Certainly, nobody would have walked away.

LEBEAU: In fact, the insurance institute had to cut the dummy out of the wreckage, even using a crowbar to pry the dummy`s foot loose.

ZUBY: The structure that is supposed to stay intact and protect your family completely collapsed in this test.

LEBEAU: Nissan says it will continue to review these and other results from IIHS testing as we seek opportunities for improvement. And both Nissan and Chrysler pointed out that their minivans received good ratings from the Insurance Institute when it conducted other types of crash tests.

For parents like Katherine Fuller and others who drive minivans, these tests are a reason for concern.

KATHERINE FULLER, MINIVAN OWNER: We`ll be a little more cautious when driving. It just makes me a little nervous.

LEBEAU (on camera): Minivans are not as popular as they used to be.
Still, over a half million will be sold in the U.S. this year. And for those who buy a minivan and automatically believe it is safer than another type of vehicle, these crash tests are a reason to think twice.



MATHISEN: An update now on the exploding airbag crisis involving 14 million cars, which have been linked to at least five deaths worldwide. At a Senate hearing today, lawmakers went after automakers and a senior executive at Takata. This is the Japanese maker of those defective airbags.

The Takata executive says he does not believe a nationwide recall of the airbags is necessary, which is what safety regulators have called for.
He also apologized and said the part supplier accepts responsibility for three deaths but said that two others were still under investigation.

MATHISEN: Also on Capitol Hill, some of the nation`s biggest investments banks coming under fire today after a combative panel at a Senate hearing slammed them for manipulating storage systems and driving up the cost of commodities, like aluminum and other metals. The focus for much of the day, Goldman Sachs (NYSE:GS).

Kate Kelly has more.


KATE KELLY, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): Ever think about the price you pay for a can of soda? Probably not. But you can be sure that beverage companies like Coca-Cola (NYSE:KO) and Pepsi do.
Even though the price of aluminum on the official exchange has been falling, the prices for physically obtaining for manufacturing in the U.S.
have risen sharply in recent years, jacking up costs on the 90 billion cans consumed here every year.

According to an influential U.S. Senate panel, the costs have a surprising culprit — Goldman Sachs (NYSE:GS).

SEN. JOHN MCCAIN (R), ARIZONA: I don`t see how you can draw any other conclusion.

KELLY: Through a convoluted series of incentive payments and processes at a Detroit subsidiary, the panel argues, Goldman effectively manipulated the price of aluminum in the U.S., raising prices on beverage companies, aluminum foil makers and even at automakers like Ford, whose new
F-150 pickup is the first aluminum bodied vehicle of its kind.

And today in Washington, the panel`s chairman, the Michigan Democrat Carl Levin grilled Goldman executives over their business practices.

LEVIN: Goldman has the ability to manipulate the LME price by manipulating the Midwest premium and then to make trades taking advantage of that manipulation.

Goldman`s ability to influence any portion of the price for a key component of the industrial economy is simply unacceptable.

KELLY: Goldman defended its practices saying the way it handled metal in its Detroit business was legitimate and client driven. But Senator Levin and his colleagues on the panel, John McCain, were having none of it.

(on camera): And there are likely to be more fireworks tomorrow when they take up these issues with a prominent Federal Reserve Governor Daniel Tarullo.

For NIGHTLY BUSINESS REPORT, I`m Kate Kelly, in Washington.


GHARIB: In a separate Goldman Sachs (NYSE:GS) story, two bankers at the firm were fired after one of them, a former employee at the Federal Reserve Bank of New York, passed along confidential information from the Fed to his boss. The supervisor, also a former government official at the FDIC, was fired after failing to take action.

Now, in recent weeks, Goldman Sachs (NYSE:GS) and the New York Fed have faced questions about their relationship, some calling it too cozy.
And tomorrow, the president of the New York Fed will testify on the matter.

MATHISEN: And ahead of that hearing tomorrow, the Federal Reserve announced a sweeping review of its own practices for examining and supervising the nation`s biggest banks, and addressing criticisms that Fed examiners are too close to Wall Streeters. The Fed and Central Bank`s inspector general team will both look into whether Fed staff member get ahold of enough information when they make decisions involving large financial firms and whether dissenting views are even heard by Fed decision makers.

MATHISEN: Still ahead: Best Buy (NYSE:BBY) reports a strong quarter ahead of the holiday season, but will it be able to keep the momentum going? The answer after this.


GHARIB: It looks like Best Buy (NYSE:BBY) is back, after profits nearly doubled at the chain last quarter, investors dove in today and shares surged 7 percent higher.

Courtney Reagan has more on the retailer`s unexpectedly strong earnings last quarter and the challenges it`s still facing ahead of the holiday shopping season.


“Don`t count us out yet” is the message Best Buy`s latest financial data is sending to the market. Not so long ago, many were betting the consumer electronics retailer wouldn`t be around much longer, let alone beating Wall Street`s expectations for earnings, sales and margins by a decent amount.
But the retailer and analysts aren`t necessarily wagering a win for the holiday season.

But despite the strength in the third quarter, Best Buy`s CEO Hubert Joly isn`t so bullish for the holiday quarter, a week out from Black Friday, telling me, quote, “We are excited about many categories and improved shipping for the holidays.” And then he continued to say, “The holiday season is hard to forecast, it`s a very competitive environment, a lot of mass merchants have promotions on consumer electronics, a category that has been volatile.”

A category where retailers are more aggressive than ever with their offers, leading some analysts to bet that Best Buy (NYSE:BBY) won`t win.

MICHAEL PACHTER, WEDBUSH SECURITIES SENIOR ANALYST: Target (NYSE:TGT) is loaded for bear. They`re going to compete. Amazon (NASDAQ:AMZN) is going to compete. Walmart is going to compete.

Best Buy (NYSE:BBY) is the guy who is going to lose share to all of those guys. Amazon (NASDAQ:AMZN) is the guy who`s going to take the most share. I think Best Buy (NYSE:BBY) is toast.

REAGAN (on camera): Stronger than expected third quarter sales are a good thing, but it could cause issues for Best Buy (NYSE:BBY) in coming months. If there is a disruption at West Coast ports because of labor disputes, the retailer may not be able to get more inventory quickly.

(voice-over): Joly told me, quote, “We brought some inventory forward and because we had a stronger quarter, we sold some of that merchandise.
So, our inventory was lower than we told investors it would be. The issue will be with replenishments.”

If strong sales outpace available inventory, Best Buy (NYSE:BBY) could be dealing with empty shelves.



MATHISEN: And we begin tonight`s “Market Focus” with Gap (NYSE:GPS) cutting its earning guidance ahead of the crucial holiday shopping season.

This comes as the retailer posted profit that topped estimates in its most recent quarter. But sales slipped. They`re a little below expectations and the retailer announced a management overhaul at its Banana Republic and Gap (NYSE:GPS) Brands.

After the bell shares tumbled. Before the close, the stock was 1 1/2 percent higher. It finished at $40.14.

A big miss for GameStop. Not only did the chain report earnings and sales that were way off, it also disappointed with a fourth quarter and full-year profit outlook that trailed consensus. That sent shares down right after the announcement. During regular trading, shares were up a fraction, $43.87 was a close.

Dollar Tree (NASDAQ:DLTR) best sales growth since 2011, sending shares of the discount retailer higher. The chain beat earnings estimates, hiked its outlook for profit and revenue for the year. This as the company has agreed to buy Family Dollar for $8.5 billion. Shares climbed 5 percent to $65.87.

GHARIB: Hertz is getting a new Carl Icahn approved CEO. The car rental company named an airline industry vet, John Tague as its new chief.
He replaces Mark Frissora who stepped down amid pressure from investors like Icahn over accounting errors. Shares were volatile after the news.
Ahead of that, shares were up 2.5 percent to $22.75.

Alibaba has reportedly tapped into the U.S. bond market. The Chinese internet giant is launching an $8 billion debut bond deal, but it could open up the offering to about $10 billion because of strong demand. Shares rose by $1, closing at $109.82.

Investors had a strong appetite for shares of Habit Restaurants. The burger chain made its trading debut on the NASDAQ today, pricing 5 million shares at $18 a piece. That values the company at nearly $1 billion.
Shares more than doubled, closing at $39.54.

MATHISEN: Coming up, Santa`s secret indicator. A new way to forecast how much consumers may spend this holiday season.


MATHISEN: What will you be doing a week from now aside from eating turkey and maybe watching some football?

Well, the National Retail Federation says that 140 million Americans are expected to go shopping on Black Friday, Small Business Saturday, and over the Thanksgiving weekend. Maybe you`ll be among them.

Some will brave the crowds in stores, many others plan on doing their shopping online.

The NRF says about a third of respondents said they will wait and see if the deals are worth it before they head to the stores.

GHARIB: Well, with all those stores opening for business, retailers need workers to stock shelves, advise customers and ring up sales. So, what`s the forecast for holiday hiring and what can it tell us about holiday spending?

Steve Liesman has our story.


Call it Santa`s indicator, a piece of economic data that provides a clue to how much Americans will spend this holiday season.

It`s the October jobs report. And inside it, you can find how many employees retails have taken on for the holiday season. Santa`s secret indicator isn`t whispering. It`s screaming that it`s going to be a very green Christmas.

Hiring in the eight sectors that see the most holiday jobs rose to a record 172,000 with each of the eight categories registering gains.

Department stores, clothing stores and Internet retailers have all brought on more help this year than they did last in anticipation of robust business at the register. But just how good are the retailers at predicting future sales?

JAN KNIFFEN, J. ROGERS WORLDWIDE ENTERPRISE CEO: Retailers are really good forecasters and close, because they have their finger in the air every day checking the direction of the wind.

Every retailer I talked to is trying to hire more people than they`re going to get, which is as good as it gets. So, they believe they`re going to see the strongest back half in the last five years as well.

LIESMAN: Turns out October hiring has done a very good job of forecasting holiday sales over the past dozen years. And the current levels suggest that some of the rosy predictions may even be a little light.

TORSTEN SLOK, DEUTSCHE BANK: There is a saying in markets that never bet against the U.S. consumer. I think the U.S. consumer is going to deliver. The U.S. consumer for the last few years has been very cautious, has slowly been building up savings. But as we have seen job growth accelerate, as we`ve seen wealth continues to go up, as we`ve seen oil prices go down, that is all a great combination boding for a strong seasonal spending here in the coming months.

LIESMAN (on camera): The indicator isn`t perfect. Retailers can still reduce their hiring in November or cut back on hours worked if sales don`t materialize. But the early indications are that they`re optimistic about Christmas sales. And that optimism does a pretty good job of predicting just how much work Santa will have on Christmas Day.



MATHISEN: Put that together with falling oil prices and I think you`ve got a recipe for a pretty good spending holiday.

GHARIB: So much pressure on us to spend. So, go out there.

MATHISEN: I`ll be doing my part.

GHARIB: I`ll do mine, too.

That`s NIGHTLY BUSINESS REPORT for tonight. Thanks so much for joining us. I`m Susie Gharib.

MATHISEN: And I`m Tyler Mathisen. Thanks from me as well. We`re going to take attendance. We`ll see you here tomorrow.


Nightly Business Report transcripts and video are available on-line post broadcast at The program is transcribed by CQRC Transcriptions, LLC. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Nightly Business Report, or CNBC, Inc. Information presented on Nightly Business Report is not and should not be considered as investment advice. (c) 2014 CNBC, Inc.

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