Transcript: Nightly Business Report – February 23, 2017

ANNOUNCER:  This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and Sue

Funded in part by —



STEVEN MNUCHIN, TREASURY SECRETARY:  We are committed to pass tax reform.
It will be very significant.


lays out an aggressive time line to overall the tax code.  But do investors
think it`s realistic?

manufacture more goods in America means ports around country will be busier
than ever — and in need of investment.

BREWER:  Shortage of workers.  Half a million high-tech jobs cannot be
filled by Americans.  Is there a national fix for a problem plaguing

Those stories and more tonight on NIGHTLY BUSINESS REPORT for Thursday,
February 23rd.

And good evening, everyone.  I`m Contessa Brewer, in tonight for Sue

MATHISEN:  And I`m Tyler Mathisen.  Welcome, everyone.

Well, Treasury Secretary Steven Mnuchin gave a target date for tax reform,
August.  And that could be a key reason why he is predicting the U.S.
economy will see a growth boom, not immediately but down the road.  The
person many charge of overhauling the tax code and remaking the regulations
is, as you may well know, a former Goldman Sachs (NYSE:GS) banker.  He also
led OneWest Bank, former IndyMac, which he bought from the federal
government in 2009.

Beyond Wall Street, though, he has financed more than 100 Hollywood films.
But his current task at the Treasury Department is complex, more than any
film could be and could run into opposition from lawmakers.

In a wide-ranging interview today, Secretary Mnuchin told Becky Quick that
the White House and both chambers of Congress are all working together.
Becky began by asking him about the one issue that investors like you want
to know more about — tax reform.


MNUCHIN:  Our economic agenda, the number one issue is growth and the first
most important thing that will impact growth is a tax plan.  So we are
committed to pass tax reform.  It will be very significant.  It`s going to
be focused on middle income tax cuts, simplification and making the
business tax competitive with the rest of the world, which has been a big
problem, a lot of reason why companies are leaving and cash is sitting

So, that`s really our focus.  We want to get this done by the August
recess.  We have been working closely with the leadership in the House and
the Senate.  And we are working on a combined plan.

regulatory reform start.  Do you think we would see 3 percent plus GDP by
next year?

MNUCHIN:  I think it`s going to take time to get there.  So I think it
would be more towards the — see the growth towards the end of next year.
By the time we pass tax reform, you see the impact on the economy, you see
the impact of regulation.  It`s definitely going to take into next year to
see an engine of growth.

QUICK:  Do you agree with the border adjustment tax as something that you
think needs to be involved in tax reform?

MNUCHIN:  We`re looking closely at the issues on the border adjusted tax.
I`ve spoken extensively with Paul Ryan and with Chairman Brady (NYSE:BRC)
on this.  And we`re looking at it.  We think there are some interesting
aspects of it.  We think there are some concerns about it.

You know, we are all committed to do is make sure there is a combined plan
that is a plan that is the administration`s plan with the support of the
House and the Senate that we`re all working together on one plan that gets

QUICK:  Back in November, you said that even if wealthier people get a tax
break, it`s not going to be that they necessarily are paying less in taxes
because the deductions, the loopholes will be closed as a result.

Do you stand by that now that you are actually in the administration and in
your position as treasury secretary?

MNUCHIN:  There`s been a lot of comments on that and I actually think
there`s a rule.  I think during my confirmation, it got named the Mnuchin

We`re primarily focused on a middle income tax cut and simplification for
business.  Now, on high end, if there are tax cuts that they are offset
with reduction of deductions and other things.  So, it`s something we`re
going to carefully look at.

QUICK:  Fannie and Freddie, that`s been a huge issue that people have kind
of been squirreling around.  It`s hard to say exactly where the
administration stands on it.  But you have been committed to housing
finance reform.

Can you tell us how you come down on that and what sort of time frame we
should expect?

MNUCHIN:  I met with Mel Watt this week.  We had a very good conversation.
I met with Jeb Hensarling.  We have talked about various different issues.

So, again, I think as I`ve said before, I`m committed that under this
administration, we`re going to have housing reform, so that we don`t just
leave these entities the way they are.  They have been sitting there for
too long of a period of time.

And we need a solution.  We`re going to look at this.  I think this will be
one of the areas where hopefully we will have a bipartisan solution.  We
have a team internally that we`ve already assigned.

So, this is something we`re going to study carefully.  So, I don`t think
you are going to see something right away from us.  Whereas, tax reform is
a near-term issue.  But this is — this is definitely on the agenda.  You
know, we`ve got a lot of things to do here.

QUICK:  It is a long to-do list and one that the markets following very
closely.  Treasury Secretary Mnuchin says that he will be watching the
market`s reaction because he sees it as a score card, reflecting what the
public thinks about the administration`s efforts so far.

For NIGHTLY BUSINESS REPORT, I`m Becky Quick from Washington, D.C.


BREWER:  That interview with Secretary Mnuchin was the talk among
investors.  After all, it`s the expectation of tax reform and
infrastructure spending that has helped lift the stock market.

Well, today, the Dow Jones Industrial Average closed at its tenth straight
record, up 34 points, to 20,810.  The NASDAQ lost 25 and the S&P 500 was up
just about a point.

But stocks got off to a rocky start today as the market focused on just a
few of the comments made by the treasury secretary.

Bob Pisani explains.


several problems with Mr. Mnuchin`s comments.  The S&P opened at a new high
but quickly gave up all of its gains and moved into negative territory
early in the morning.

Most importantly, bank stocks were among the weakest sectors.  Traders
chose to focus on Mr. Mnuchin`s comment that he wanted tax reform to pass
by the August recess, which many doubt could happen.

There seems to be a sense that reforms will take longer than many had
anticipated.  With Mr. Mnuchin saying that growth would come towards the
end of next year, a time period likely further out than traders

There was also some concern that Mr. Mnuchin`s emphasis on middle income
tax cuts first meant that corporate tax cuts may not be as great as
anticipated.  Tech and industrial stocks, which would be a big beneficiary
of tax cuts, were mostly weaker on the day.

But traders really raised their eyebrows on Mr. Mnuchin`s acknowledgement
that the stock market rally has been a report card on the Trump
administration, implying that the market had given the president
essentially an A.  Now, this is an extraordinary claim for a treasury
secretary which had been historically neutral on markets, particularly
something as sensitive as stocks and the dollar.

It`s also a very dangerous game to be playing since if you live by the
stock market, you can die by the stock market.

For NIGHTLY BUSINESS REPORT, I`m Bob Pisani at the New York Stock Exchange.


MATHISEN:  Rising interest rates are apparently not slowing down home
prices.  A new report from the Federal Housing Finance Agency shows an
increase of more than 6 percent in the fourth quarter of last year from the
year prior.  Now, some of that increase is due to a lack of listings on the
market, which shows no signs of letting up.  The states with double digit
home price increases include Oregon, Colorado, Florida and Washington.

BREWER:  The strong job market is also contributing to the rise in home
prices.  Today, we learned that the number of Americans filing for
unemployment benefits rose 6,000 last week, slightly more than expected.
But despite the rise, the four-week average remains at its lowest level
since 1973.

MATHISEN:  The issue of jobs topped the agenda at the White House today, as
it has on so many days.  The president met with executives from some of the
country`s big corporations, to share ideas on how to bring more of those
jobs back to the U.S.

Eamon Javers reports tonight from the White House.


Please sit down.

welcomed two dozen of the country`s leading manufacturing executives to the
White House today to tackle everything from job creation to tax reform.
The president was clearly in his comfort zone.

TRUMP:  There`s nothing like what you do.  The Caterpillars are the best.
When we raise the dollar and we let other people manipulate their currency,
it`s the one thing that stops you dead, right?

UNIDENTIFIED MALE:  We will take them on.  Bring them on.

TRUMP:  Right.  Technology — no, but we have to give you a level playing

JAVERS:  Trump`s pro-business approach was lauded by many executives
including Dow Chemical (NYSE:DOW) CEO Andrew Liveris, who leads the
president`s manufacturing council.

working session today following a month ago when we first met with the
president.  Needless to say, we in the manufacturing sector, all the CEOs,
that were here today and then the last meeting are very encouraged by the
pro-business policies of President Trump and his cabinet.  Some of us have
said that this is probably the most pro-business administration since the
Founding Fathers.

JAVERS:  Before the sit-down with the president, the executives were broken
up into four working groups, hashing out ideas on taxes, trade, regulatory
reform, infrastructure and what the White House called “The Workforce of
the Future”.

The White House granted us behind the scenes access to these closed door
meetings as the president`s daughter Ivanka Trump sat in on that last
session, along with billionaire Wilbur Ross, the president`s pick for
commerce secretary.  Ivanka`s husband Jared Kushner worked the rooms with
Vice President Mike Pence who asked the CEOs for specific suggestions.

It wasn`t all agreement behind the scenes.  At one point, two CEOs squared
off on the border adjustment tax.  One CEO suggesting it could create 2
million new jobs, but another one disagreeing, saying it could threaten 42
million jobs.

But an overall sentiment of optimism as council members departed the White

JEFF IMMELT, GE CHAIRMAN AND CEO:  It was a great meeting.  Lots of good

JAVERS:  Any specific takeaway, sir?

IMMELT:  Well, you know, we`ll let the president talk about that.  But lots
of talk on regulation, tax reform, trade, education.  It was really great.

JAVERS:  You can expect to hear more from this manufacturing council here
in Washington.  The president said he would like to hear back from them in
two months.

For NIGHTLY BUSINESS REPORT, I`m Eamon Javers at the White House.


BREWER:  Dow Chemical (NYSE:DOW) CEO Andrew Liveris also tackled that issue
of the future of the work force post-meeting with President Trump.  He said
there has to be a systemic fix to address the shortage of workers prepare
for jobs that require a background in science, technology, engineering and
math, known as STEM.


LIVERIS:  We have supply side issues today.  Half a million open STEM jobs
that we can`t fill.  We need to fill them with Americans and we need to do
that as a priority.  The next several years, 3 million to 5 million new
jobs, even without the pro-growth policies of President Trump.  There will
be more jobs to fill.


MATHISEN:  So, is there a national fix to address this issue, one that will
help employers fill those high-tech jobs in the years to come?

Martin Van Der Werf is associate director of Georgetown University`s Center
on Education and the Workforce.

Mr. Van Der Werf, welcome.  Good to have you with us.

A lot of people point to deficits in the American education system as one
of the explanations why there are jobs that cannot be filled with American
workers, high-tech jobs in STEM most especially.  Does the American
education system need to be disrupted?  If so, how and by whom?

WORKFORCE:  Well, you know, we have been thinking and talking about this
projects and problem for a long time.  There`s been a lot of emphasis on
trying to get more students into STEM.  And, actually, it`s been succeeding
a little bit.

The problem is that a lot of the students aren`t completing.  And so, the
overall increase in students who are graduating with degrees in STEM has
been pretty — not so meaningful.  It hasn`t really increased much at all
in the last few years.

MATHISEN:  Why aren`t they finishing?  Why aren`t they finishing?  Is it
too hard?

VAN DER WERF:  Big washout rates.  Less emphasis on really getting them
through.  Big emphasis on getting them in, but not as much emphasis on
getting them out.  That`s been a problem at a lot of universities for a
long time.

BREWER:  There are companies — and I`ve just spoken with some of them,
Martin, that say in order to fill their own skills gap, they have started
getting them earlier and earlier into apprenticeship programs.  They are
going to high schools and offering them paid apprenticeships along with
high school credit.  They say, we go to 16 high schools, we accept all
seven students who apply.

Why isn`t there more interest at a younger level in these jobs that are
great-paying and they`re great-paying often right out of high school if you
can get the technical education?

VAN DER WERF:  You know, the growth in the apprenticeship programs in the
United States has been very limited.  I was reading some data today that
it`s grown over the last few years from about 375,000 to 505,000 students
in apprenticeship programs.

Half a million people in apprenticeship programs in a country with a
workforce of over 140 million — that`s not very meaningful.  It`s not a
very big advance so far.  It is something that we need to emphasize and do
more of.

The other thing I think we need to do more of is not emphasize so much
graduate degrees and bachelor degrees in STEM fields but more certification
and licenses in fields related to technology and science.  We haven`t done
enough of that yet in this country either.

MATHISEN:  What`s the best thing we could do to play catch up?

VAN DER WERF:  Probably the best thing that we could do right off the top
is to emphasize that exactly what you were saying a few minutes ago, which
is a lot of these — a lot of these jobs don`t require a lot of education
beyond high school.  And a lot of people simply don`t believe it.

We have not done a good job of advertising these programs.  We have not a
good job of really recruiting students to these programs and making them
understand that you can get out of high school, work for a couple of years
as an apprentice and get into these fields.  But it`s — that would be a
great thing.  But, frankly, it`s going to take a while to build up the
infrastructure around that.

MATHISEN:  Martin, thank you for the conversation.  Very helpful.

VAN DER WERF:  Thanks for having me.

MATHISEN:  Martin Van Der Werf — you bet — with Georgetown University
Center on Education and the Workforce.

BREWER:  Still ahead, as President Trump pushes for more companies to make
more goods in America, and send them overseas, that creates the need for
investment, expansion and opportunities at our nation`s ports.  We`ll take
you to the port of Charleston where the issue is a hot topic.


BREWER:  Nissan`s Carlos Ghosn will step down from his role as CEO.  He
will remain chairman of the Japanese auto company and will focus on the
alliance between Nissan with Renault and Mitsubishi Motors.  Ghosn has led
Nissan for nearly two decades and rescued the automaker from near collapse.

MATHISEN:  Well, as President Trump pushes for America to manufacture and
export more goods, ports around the country are preparing to become busier.
In South Carolina, that means a major investment to handle the growing
number of companies shipping out of the Southeast.

Phil LeBeau has more now from the Port-of-Charleston.


cargo is loaded and unloaded at the Port-of-Charleston, and you see why
it`s become the tenth busiest port of the country.  But as manufacturers
like Boeing (NYSE:BA) expand and build even more product in South Carolina,
the port needs to grow.

JIM NEWSOME, SOUTH CAROLINA PORTS CEO:  Most of the foreign direct
investment in manufacturing we believe will be in the Southeast.  So, we
have to invest in existing facilities and new facilities and our harbor
depth so that we can handle big ships that will carry that traffic.

LEBEAU:  Right now, the Port-of-Charleston is in the midst of a $2.3
billion expansion.  Why?  Because it`s busier than ever.

Looking down from this crane as they unload a cargo ship here with 6,700
containers, you can see how quickly they are moving.  This container, by
the way, weighs about 44 tons.

Even as container traffic grows, Charleston has become even busier shipping
out SUVs.  These are from BMW.  The company exported more than a quarter
million from the U.S. last year.  All built three hours north of Charleston
in Spartanburg, South Carolina.  The plant is already BMW`s largest in the

But as Donald Trump pushes to have companies build more in the U.S., the
German automaker is investing a billion dollars in the plant to make it
more efficient.  Meanwhile, the Port-of-Charleston will soon be adding more
vehicles it will export, as Volvo opens a plant in South Carolina.

HAKAN SAMUELSSON, VOLVO CARS CEO:  Logistics, availability of skilled
labor, we need a port close by.  And I think also very positive business
orientation from that administration.

LEBEAU:  A rising tide of exports in a harbor focused on the growth of made
in the USA products.

Phil LeBeau, NIGHTLY BUSINESS REPORT, Charleston, South Carolina.


BREWER:  Lending Tree tops estimates.  And that`s where we begin tonight`s
“Market Focus”.

The company which provides an online marketplace for loans also topped its
own expectations and said results were helped by an increase in loan
requests and strong demand for company`s non-mortgage products.  Lending
Tree said it also sees this quarter`s revenue above expectations.  Shares
rose 9 percent to $122.25.

Hormel Foods (NYSE:HRL) says persistently low turkey prices pressured
results in the latest quarter, saying that`s expected to hinder future
performance.  The maker of Spam and Muscle Milk cut its full year earnings
outlook after reporting worse than expected profits.  But revenue did come
in slightly above target.  Shares fell 5 percent to $35.29.

Medical device maker Boston Scientific (NYSE:BSX) said it was recalling its
Lotus heart valve after reports of a manufacturing issue.  The company said
it plans to return the product to its European markets in the fourth
quarter.  It`s not approved for use in the United States.  Shares fell
almost 3 percent to $24.48.

MATHISEN:  The online home furnishing retailer Wayfair reported a loss, but
it was still better than expected as the company benefitted from an
increase in active customers and deliveries.  Revenue also topped
estimates, but the company did issue a soft sales outlook for the current
quarter.  And that sent shares lower by 6.5 percent.  They finished at

Kohl`s (NYSE:KSS), meantime, reported better than expected profit and hiked
its dividend 10 percent to 55 cents a share.  The retailer also posted
revenue in line with expectations but said it sees same store sales for the
year coming in a little bit below estimates.  Kohl`s shares off 2 percent
to $40.91.

Gap (NYSE:GPS) said strength in its Old Navy Brand helped its quarterly
results.  Profit in line with estimates.  One of the apparel retailer`s
revenue topped expectations.  Shares initially rose in after-hours trading
but ended the regular session down more than 3 percent to $23.97.

And Hewlett-Packard (NYSE:HPQ) Enterprises said weak sales in its
Enterprise group caused overall revenue to fall.  Profit did beat Wall
Street`s targets.  But the tech company slashed its earnings outlook for
the full year, citing pressure from exchange rates, higher commodities
pricing and near-term execution issues.  Shares initially fell in extended
hours and also ended the regular trading day down a fraction at $24.66.

BREWER:  Well, as we have been reporting, a major theme of the Trump
administration is jobs.  And today that was a key discussion point between
the president and a number of CEOs, both when it comes to bringing jobs
back home, there`s one country in the crosshairs — China.

Eunice Yoon talked to some Chinese workers in the factory town of Jiaxing.


Trump and his supporters have been critical of China for supposedly
stealing American jobs.  Well, in the factory town of Jiaxing, Chinese
workers see things very differently.

UNIDENTIFIED MALE (through translator):  I don`t think Trump is correct.
American companies come to invest here.  They reap rewards and we do, too.
It`s a win/win.

UNIDENTIFIED MALE (through translator):  Many business people open
factories here and they are thriving.  If Trump demand that the factories
go back, that could hurt them.

YOON:  For the Chinese, a lot of jobs that have shifted from the U.S. have
lifted people here out of poverty, the reason why this country has gained

But to some, that doesn`t mean Americans have lost out.

UNIDENTIFIED MALE (through translator):  Chinese people work very hard.
What we do at the factories takes long hours and other people despise doing
it.  So, I don`t think we are stealing anyone`s jobs.

YOON:  If anything, they worry jobs will move to other low cost countries.
And so, they are brushing up on their skills.

UNIDENTIFIED MALE (through translator):  Doing business is essentially all
about competition.

YOON:  A message they hope will be heard in the White House.

For NIGHTLY BUSINESS REPORT, I`m Eunice Yoon, in Jiaxing, China.


MATHISEN:  The robot revolution.  Will the workplace as we know it soon be
a thing of the past?


BREWER:  The future of the workplace also includes robots.  As some tasks
become more automated, that has many employees concerned that they will one
day be replaced by machines.  I have seen them, robot news anchors.

But a few startups —

MATHISEN:  Sitting next to one.

BREWER:  Oh, you`re a robot?

A few startups really have something else in mind.  They want workers and
robots just to get along.  They are known as cobots, at least for now.

Julia Boorstin has our story.


collaborative robotics is expected to reach $12 billion by 2025, according
to Barclays.  We`ll see cobots across industries.  Not just manufacturing,
people will increasingly be working with robots in hospitals where they are
doing tasks such as dispensing medicine.

Rethink Robotics uses human workers to show a robot what it needs to do for
everything from building cars to teaching in classrooms.  A range of robots
are tackling automated checkouts and customer service.

Hardware store Lowe`s LoweBots speaks multiple languages and knows where
everything is on shelves.

J.P. GOWNDER, FORRESTER ANALYST:  What people can expect is that they will
increasingly be working side by side with robots who may be giving them
directions in some cases, who may be in many other cases taking the most
sort of repetitive and repeatable activities that they do off their plates.

BOORSTIN:  So far, Lowe`s hasn`t used these robots to eliminate jobs, but
rather, the LoweBot eliminates simple tasks, while employees focus on more
complex ones, like designing kitchens.  And a range of tech companies are
looking to cash in on this trend.

Startups include Universal (NYSE:UVV) Robotics and Rethink Robotics, as
well as Boston Dynamics which Google (NASDAQ:GOOG) owns.  And Piaggio which
created the Vespa has this robot to carry people stuff.

But it`s not all about working hand in hand with machines.  These
advancements in robotics will eliminate jobs.  About 7 percent net job loss
a year over a decade, according to Forrester`s Gownder.  And that includes
the gains in robotics jobs.

But some jobs will still require human minds.

GOWNDER:  Creative jobs actually over the next ten years will be resilient
because human imagination is very hard to automate.

BOORSTIN:  We`ll see if that changes and whether more jobs are threatened
as robot technology improves.

For NIGHTLY BUSINESS REPORT, I`m Julia Boorstin in Los Angeles.


MATHISEN:  I robot.

All right.  And finally tonight, not only does the new treasury secretary
want to overall the tax code, but he recently overhauled his signature.
Because his signed name will appear on all U.S. currency going forward, he
didn`t like the way it was looking.  Now, here it is, the one on the left
is his former signature, totally illegible.  In it the interview with Becky
Quick today, he revealed the new and improved version which you can see
right there on the right — Steven T. Mnuchin.

BREWER:  Right.  You can read the one on the right.  Mine has gone the
opposite direction.

That`s NIGHTLY BUSINESS REPORT for tonight.  I`m Contessa Brewer.

MATHISEN:  I`m Tyler Mathisen.  Have a great evening.  We`ll see you


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