Transcript: Nightly Business Report – December 26, 2019

ANNOUNCER:  This is NIGHTLY BUSINESS REPORT with Bill Griffeth and Sue  Herera.  


BILL GRIFFETH, NIGHTLY BUSINESS REPORT ANCHOR:  Market milestone.  The  Nasdaq hits 9,000 for the first time ever.  And the Dow and S&P close at  all-time highs.  


`Tis the season for gift returns.  And in a twist, that could actually be a  gift for retailer sales.  


Losing its shine.  People are leaving the Golden State in droves.  And it  could leave a lasting mark on the world`s fifth largest economy.  
Those stories and much more tonight on NIGHTLY BUSINESS REPORT for  Thursday, December 26th.  


And we do bid you good evening, everybody and welcome.  Sue is off tonight.  


The rise in stocks just won`t quit.  Wall Street`s three major averages  closed at record highs once again today.  In fact, the Nasdaq broke through  9,000 the first time ever.  It`s now risen for 11 straight sessions, making  it the index`s longest win streak since July of 2009.  


And it`s been quit a trip to that 9,000 level.  The index was at 325 back  in 1990 before the dotcom boom and bubble pushed it to 5,000 for the first  time by the end of the decade.  


Then came the huge decline leading to the 2002 recession.  In fact, it  didn`t get back to 5,000 until 2008.  Only to be hit once again by the  great recession.  It hit 8,000 last year.  And today, its first close above  9,000.  
Here are the closing numbers for today with the Dow up 105 points now at  28,621.  The Nasdaq rose 69 today and S&P added 16.  
Frank Holland starts us off tonight on the Nasdaq`s record run.  
(BEGIN VIDEOTAPE)


FRANK HOLLAND, NIGHTLY BUSINESS REPORT CORRESPONDENT:  The road of the  Nasdaq crossing the 9,000 mark was paved with computer chips, yoga pants  and lattes.  It`s not surprising that chips are a major factor for the  tech-heavy index.  AMD gaining 85 percent, seeing the biggest improvement  since the Nasdaq crossed the 8,000 mark back in August of 2018.  


Lam Research (NASDAQ:LRCX) and Broadcom (NASDAQ:BRCM) also gaining more  than 50 percent.  Consumer stocks also pushing the Nasdaq higher.  Yoga  pant maker Lululemon rising 67 percent since the 8,000 mark, Starbucks  (NASDAQ:SBUX) gaining 66 percent.  Charter Communications (NASDAQ:CHTR) one  of the biggest cable providers in the nation gaining more than 59 percent.  


The so-called FANG names, Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN),  Netflix (NASDAQ:NFLX) and Google (NASDAQ:GOOG), as well as Microsoft  (NASDAQ:MSFT), had the biggest impact on the index.  But they were mixed on  the road to 9,000.  Stocks, they typically get a boost this time of year.   The so-called Santa Claus rally over at the Nasdaq closing at yet another  record.  Some experts believe these against could be more than just  seasonal.
For NIGHTLY BUSINESS REPORT, Frank Holland.
(END VIDEOTAPE)


GRIFFETH:  Also helping propel the Nasdaq this year has been Apple  (NASDAQ:AAPL).  It`s also been the best-performing stock in the Dow this  year, rising about 83 percent.  That gain has put apple on track for the  best year in a decade.  


So, where do apple and the rest of the tech stocks in the Nasdaq go in  2020?
Chris Retzler joins us now.  He`s portfolio manager with the Needham Growth  Fund.
Chris, good to see you.  Thanks for joining us tonight.  


CHRIS RETZLER, NEEDHAM GROWTH FUND PORTFOLIO MANAGER:  Hey, Bill.  How are  you?


GRIFFETH:  Far and away, most money managers we talked to on this program,  when I ask your favorite sector, it`s usually technology.  What about for  2020?  Does the momentum continue, do you think?  


RETZLER:  Well, we are planning for a bit of a correction here in the New  Year.  We think a lot of gains where people don`t want to take those  taxable gains in 2019 might be pushing that out to 2020.  However, longer  term, we are still very bullish on technology.  When we like about it is  it`s defendable on a global basis, where they can defend that technology.   It`s much of what we`re fighting for against China, IP protection.  


GRIFFETH:  Right.  
RETZLER:  So we remain bullish and technology going into the next year.   But we think that there could be some pullback in the early months.  


GRIFFETH:  As Frank Holland mentioned, the chip stocks — I mean, they had  suffered a few years.  But suddenly, a resurgence this year.  Are — is  that one of the groups you are looking at for potential pullback next year?  


RETZLER:  It would be an area.  But semiconductors are great leading  indicators for economic acceleration.  So what we`ve been seeing since  September is a real nice run in semi cap equipment, semiconductors which  gives us some confidence that next year is still going to be a good year  economically and probably an acceleration in global economic activity.  


GRIFFETH:  5G, that`s to be a big — I would think catalyst for next year  of growth for a lot of companies.  That`s the next generation wireless  technology.  


Do you agree with that?  Or are we getting hopes too high at this point?  


RETZLER:  I agree with that.  However, I would break it down between two  pieces.  One is the actual infrastructure to make the devices which also  need 5G.  So as you think about mobile phones, we would expect to see 5G  built into devices.  However, the infrastructure to make them work we think  could take a little bit more time.  And that`s probably over multiple  years.  


So, 5G really has a long tail to its investment.  And it`s much of what we  are seeing in the semi conduct are land right now and we think that  continues multiple years.  


GRIFFETH:  Chris Retzler with the Needham Growth Funds — Chris, again,  thanks for joining us tonight.  
RETZLER:  Thank you.  


GRIFFETH:  And as we close on the end of the year and decade, there is a  belief on Wall Street that the stocks and sectors that outperform one year  often underperform the following, and vice versa.  
But is the same true over longer periods of time?  
Bob Pisani takes a look.  
(BEGIN VIDEOTAPE)


BOB PISANI, NIGHTLY BUSINESS REPORT CORRESPONDENT:  What a decade it has  been.  It started out with fear.  It`s ending with historic highs.  


Investors have been absorbed with a search for growth.  That`s why  technology, the ultimate growth stocks, have so dramatically outperformed  everything this decade, up over 300 percent as a group.  


The bottom sectors have a notable standout, energy.  Oil stocks have had no  gains the last decade.  So, what`s next?  If history is any guide,  investors should avoid the fallacy that the future is going to look exactly  like the past.  


We`ve often noted that stocks in sectors that outperform one year often  under-perform the falling year.  It`s called mean reversion.  It`s the  tendency for most investments to revert to long-term average and it happens  over long periods of time as well.  

So, look at 2000 and 2009.  The top three sectors — energy, consumer  staples, materials — tended to underperform in the next decade up only 80  percent.  The bottom three sectors –communications services, technology,  financials — they tended to outperform, up 184 percent.  


This phenomenon also happened from 1990 to 2000.  Technology was the best  performer and it was the worst performers in the next decade.  


So, why does mean reversion seem to work as an investment strategy?  For  the stock market, there`s two explanations.  First, in a capitalist system,  underperforming sectors tend to be ruthlessly restructured until they`re  efficient.  Then there is the old future fallacy — humans tend to buy  things that keep going up in value, creating bubbles that eventually burst.  
For NIGHTLY BUSINESS REPORT, I`m Bob Pisani at the New York Stock Exchange.  
(END VIDEOTAPE)


GRIFFETH:  Now, Bob just mentioned the energy sector`s lost decade.  And in  the year ahead, the industry faces a number of challenges still.  
Brian Sullivan has our 2020 playbook.  
(BEGIN VIDEOTAPE)


BRIAN SULLIVAN, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Stagnant oil  prices, heavy corporate dead loads, and environmentally conscious investors  selling oil and gas absolutely slammed the energy industry in 2019.  All  this, the U.S. reached a major milestone.  Becoming a net exporter of crowd  and petroleum processed for a full month the first time in 70 years.  All  this as the race for another kind of development, so-called rare earth  minerals just began to heat up.


Here`s what to watch for in energy in 2020.  
First, a wave of bankruptcies.  Unless oil prices rise, the industry and  investors may have to endure a number of reorganizations.  Many companies  are struggling with huge amount of debts., built up when oil prices were on  the rise.  And unless oil jumps in price, Wall Street is unlikely to let  companies refinance or extend their obligations. 

 
Second, international resources shift.  Venezuela likely loses control of  Citgo.  After years of courtroom battles between a hedge fund and the  government of Venezuela, the final battle likely comes in 2020 and it`s  possible the courts ultimately rule against Venezuela, allowing Citgo to be  seized, auctioned off and bought by an American company or companies.  
And third, the race for rare earth minerals full throttle.  


If you want to build of an environmentally sensitive project, like an  electric car, or wind turbine, you need rare earth elements.  These are  obscure but incredibly minerals like lithium, neodymium and yttrium.  China  controls most of the world supplies for these critical elements, but there  are many projects in the works to help the U.S. catch up.  This will be the  battleground to watch in 2020.  
For NIGHTLY BUSINESS REPORT, I`m Brian Sullivan.  
(END VIDEOTAPE)


GRIFFETH:  Rob Thummel joins us now to talk more about what lies ahead for  the oil market in 2020.  He is a portfolio manager at Tortoise Advisers.  
Good to see you.  Thanks for joining us tonight.  


ROB THUMMEL, TORTOISE ADVISORS PORTFOLIO MANAGER:  Thanks, Bill.  


GRIFFETH:  And, actually, you think that in 2020 will mark a return for the  U.S. energy sector.  
What do you mean?  


THUMMEL:  Well, as Brian and others talked about, you know, 20 — the last  decade was a bad one for the energy sector.  But going forward, we see a  lot of opportunities and catalyst for the energy sectors.  The biggest what  Brian highlighted, the U.S. is now a net energy exporter.
GRIFFETH:  Uh-huh.


THUMMEL:  So, going forward in the next decade, 2020 and beyond, there is a  significant opportunity for investors to capitalize on the opportunity in  the U.S. as the U.S. becomes a large supplier of all energy commodities to  the rest of the world.  


GRIFFETH:  Do you see prices going higher and who will set those prices?   Is that still OPEC with the power to do that or does the U.S. industry have  the power now?  


THUMMEL:  Well, going forward, oil will still remain relevant, and somewhat  important.  But natural gas and renewables actually will be the opportunity  going forward.  But specifically to your question from an oil price  perspective, we have got plenty of supply.  OPEC is still important.  But  the U.S. will also play a critical role there as well.  


But for the energy sector to be successful, this is the most important part  of it.  We just need stable oil prices.  Stable energy prices.  And we  think the setup is pretty strong for the next decade to have stable,  consistent energy prices, which still allow the companies and cash flow  they are generating to grow and that`s what investors will reward going  forward.  


GRIFFETH:  Your three winners, the stocks you like for next year.  Why  those three in particular?  
THUMMEL:  Yes, so energy infrastructure is a place here at tortoise we love  for a lot of reasons.  


First of all, energy is essential.  And if you are going to transport  energy, if the U.S. is going to export more energy, we need more energy  infrastructure.  We need existing infrastructure to facilitate the export  growth going forward that`s going to happen in 2020 and beyond.  


So, companies like enterprise products that pays a dividend yield of almost  6.5 percent.  Owns critical energy infrastructure.  Have raised dividend  for over a decade every single year.  Other companies, like Williams  Company, once again another 6.57 percent dividend yielder.  Magellan  midstream, another 6.5 percent dividend yielder.  


Investors, really, from our perspective, Bill, are starving for yield.  You  know, the S&P 500 yields 1.9 percent.  The 10-year treasury yield is 1.8  percent.  You need dividend yields as investor.  And we think energy  infrastructure is a great place to find some of those dividend yields.  


GRIFFETH:  By the way, quickly you mentioned natural gas, prices have  floundered for a number of years because of oversupply.  Do you see that  ending at some point?  


THUMMEL:  Well, first of all, natural gas is one of the most critical  commodities going forward.  We need to lower carbon emissions basically  globally, right?  And the playbook in the U.S. and not a lot of people know  this, but carbon emissions in the U.S. have declined in the last 10 years.   One of the reasons for that is because of the increased use of natural gas  in the electricity sector to generate electricity.  


So that needs to be applied globally.  And it will be in the next decade.   And if we apply the same formula in the U.S. globally and the next decade,  and eliminate coal and increase natural gas and renewables, we`ll end up  reducing carbon emissions globally.  


And so, we think natural gas plays a really critical role.  The price —  the price can stay low and that will actually boost demand going forward. 

 
GRIFFETH:  Very good.  
Rob Thummel with Tortoise Advisers — again, thanks for joining us tonight,  Rob.  
THUMMEL:  Thank you, Bill.  
GRIFFETH:  You bet.  


Time to look at some of today`s “Upgrades and Downgrades”.
We begin with shares of Tesla.  Their price target was raised to $370 from  $270 at Wedbush.  The analyst cited demand for the automaker`s Model 3 here  in the U.S. and in Europe, which should help profitability.  But the firm  is recommending a wait-and-see approach to the stock itself.  It`s  maintaining its neutral rating right now.  Stock rose more than 1 percent  today to $430.94.


Qiagen (NASDAQ:QGEN) was re-instated with an underperform rating at Bank of  America (NYSE:BAC).  The analyst there cited the Dutch company decision to  remain independent after ending takeover talks with various potential  suitors, all of which was announced late Tuesday.  Price target now $28.   Qiagen (NASDAQ:QGEN) lost 20 percent of its value today to close at $32.91.  


Spectrum Pharmaceuticals (NASDAQ:SPPI) was downgraded to neutral from  overweight at Cantor Fitzgerald.  The analyst cited the failure of the  company`s experimental lung cancer treatment in a mid-stage trial.  Price  target $4.  And shares of that small cap dropped by 60 percent on that news  today to $3.50.  


Still ahead, slow and steady stocks were a slow and steady recovery.  Our  market monitor has names to consider.  
And a reminder that many in international markets were closed for boxing  day today.  
(MUSIC)


GRIFFETH:  To the economy now and a couple of reports on jobs and housing.  


First, the number of Americans filing for unemployment benefits fell by  13,000 last week to 222,000.  Jobless claims are usually volatile around  the holiday season and at the end of the year.  


Elsewhere, there was a 3.5 percent pullback in mortgage applications last  week.  Mortgage rates themselves moved a tiny bit higher over the period,  almost a 4 percent on average now.  


And now that Christmas is over, `tis the season for returns.  And there are  more of them thanks to the rise of e-commerce.  
Frank Holland is back with that story.  
(BEGIN VIDEOTAPE)


HOLLAND:  A record $95 billion in holiday returns is projected for this  holiday season with nearly half coming from e-commerce.  The most returned  items are expected to be women`s clothing, appliances and toys.  
Moody`s retail analyst Charlie O`Shea says the growing return culture can  be a boost to retailers post-holiday sales.  


CHARLIE O`SHEA, MOODY`S:  It`s a win for retailer if they get you in the  store to return something because they get a bite at the apple.  So, we  think retailers need to leverage that opportunity.  


HOLLAND:  According to a new survey from XPO Logistics, 9 percent of brick  and mortar purchases are return, compared to 30 percent of online sales.   And 83 percent f those online shoppers considered the return policy before  they buy.  Amazon (NASDAQ:AMZN) announced free returns on millions of items  this holiday season.  The tech giant gets more than a third of all online  sales.  


UPS says it expects its peak day for online returns to be January 2nd, when  1.9 million packages will be sent back.  A 26 percent increase over last  year.  


Those returns, they also have a growing cost for retailers.  CBRE estimate  retailers lose $50 billion per year because of inefficient logistics  handling returns.  The return culture it`s a key part of the evolving e- commerce landscape that Oppenheimer analyst Brian Nagel says is shifting to  actually attracting customers to brick and mortar stores.  


BRIAN NAGEL, OPPENHEIMER & CO.:  Most retailers talk about buy online, pick  up in store representing 50 percent upwards of 70 percent of the online  sales.  The consumer going online purchasing the product but then  subsequently going to the store and picking it up.  


HOLLAND:  Estimates have online returns increasing by 50 percent or more  next year while brick and mortar returns expected to increase low single  digits.  Companies like UPS and FedEx (NYSE:FDX) have handled many of those  returns are expected to see a big boost in their volumes and their  revenues.  
For NIGHTLY BUSINESS REPORT, Frank Holland.  
(END VIDEOTAPE)


GRIFFETH:  Amazon (NASDAQ:AMZN) said today it had a record breaking holiday  season and its shares have seen solid gains so far this year.  But the  stock is also doing something it hasn`t done in years.  
Deirdre Bosa takes a look at what`s next for one of 2019`s most talked  about companies.  
(BEGIN VIDEOTAPE)


DEIRDRE BOSA, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Amazon (NASDAQ:AMZN)  has been one of the best performing stocks of the last decade.  But it  could end the streak on a more lackluster note.  This year, Amazon  (NASDAQ:AMZN) is on track to underperform the benchmark S&P 500 for the  first time since 2014.  


Back then, the company was under pressure for its lack of profit and  falling operating margin.  This time around, Wall Street is more forgiving  of Amazon`s so-called investment year.  Shares have returned nearly 20  percent so far.  And many are predicting the ground work has been laid for  a bigger breakout next year.  


STEPHANIE LINK, NUVEEN HEAD OF GLOBAL EQUITIES:  Because it`s an investment  year for Amazon (NASDAQ:AMZN), and the stock never outperforms when they`re  in investment year.  But it does tend to outperform the year after in  investment year because that`s when you see the benefits.  


BOSA:  Except this time could be different.  Amazon (NASDAQ:AMZN) is facing  new risks and the cracks are starting to show as it heads to 2020.  They  include declining dominance in e-commerce and cloud, rising competition,  antitrust concerns and an uncertain regulatory environment in an election year.  


There is also growing concerns about the safety and quality of its  marketplace.  Amazon (NASDAQ:AMZN) has been one of the past decades most  rewarding bets.  It`s far from guaranteed that it can do it again over the  next 10 years.  
NIGHTLY BUSINESS REPORT, Deirdre Bosa, San Francisco.  
(END VIDEOTAPE)


GRIFFETH:  PayPal will look for takeover targets next year.  That`s where  we begin tonight`s “Market Focus”.  


The company`s chief financial officer tells the “Wall Street Journal” there  are many acquisition opportunities in the payment sector.  They`ll be  targeting future deals in the 1 billion to $3 billion range.  Shares rose a  fraction today to $109.75.  


Tiffany (NYSE:TIF) said that overall holiday sales for the holiday period  increased, rising 1 percent to 3 percent globally from early November  through Christmas Eve.  The stock rose 3 cents to $133.6.  


Private equity firm KKR (NYSE:KKR) is buying overdrive.  That is a digital  platform that helps libraries and schools deliver digital content to users.   The value of the deal was not disclosed.  The stock was up a fraction,  though, to $29.28 today.  


And the FDA has accepted Immunomedics (NASDAQ:IMMU) application for fast  approval of its breast cancer treatment.  The medicine is for the treatment  of an advanced form of that disease.  Shares gained more than 5.5 percent  today to $21.67.  


All this week, we are getting you ready for the New Year bringing back  familiar market monitors.  And tonight`s guest has some all-weather stocks  that he says will protect your portfolio during a slow, steady economy.  
Last time he was on as a market monitor was in July of `18.  He recommended  Anthem, which is up 23 percent over that time.  Apple (NASDAQ:AAPL) was up  51 percent.  And Google (NASDAQ:GOOG) parent Alphabet is up 14 percent  since he recommended them.
Andy Kapyrin is back with us.  He`s director of research of Regent  Atlantic.
Good to see you again.  Welcome back.  


ANDY KAPYRIN, REGENT ATLANTIC CO-HEAD OF INVESTMENTS:  Good to be here,  Bill.  


GRIFFETH:  Vanguard REIT ETF.  You`re going t for slow and steady there,  aren`t you?  


KAPYRIN:  So, Bill, I`m calling this the Rolling Stone recovery, because  just when you think they are finally out, they`re not going to turn  anymore, they go in and they announce another — another farewell tour, if  you will.  In that kind of recovery, even the Stones are slowing down,  they`re not hitting as many cities as they used to. 
GRIFFETH:  Right.


KAPYRIN:  What that means is growth is going to be there.  But it`s going  to be slower.  And what I`ve identified are three investment ideas that I  think are doing well in that slow but steady growth environment.  


GRIFFETH:  And you feel real estate does well in the latter stages of a  recovery.  
KAPYRIN:  Exactly.  
GRIFFETH:  So, that`s why you like this one.  
KAPYRIN:  Because when the economy gets mature things slow down, you care a  lot more about underlying cash flows and the stability of those cash flows.   That`s where the real estate matters.  


It`s basically the ultimate subscription model.  You`re leased.  You`re  locked in for at least a year.  If it`s like a commercial lease, you of ten  locked in for ten years.  
So, a lot of predictability, a lot of stability, and it tends to be a  sector that does best when the economy is mature and going more slowly.  


GRIFFETH:  I guess it`s no surprise then if you go for stability, you like  a utility.  And you have chosen Exelon (NYSE:EXC) on in this particular  case.  Pretty good dividend.  Why else do you like it?  


KAPYRIN:  So, I like Exelon (NYSE:EXC) because their geography focuses on  the upper Northeast.  It`s a relatively well-established and stable  business model.  They`re also a relatively low carbon emitter, which is  becoming more important as people focus more on environmental, social and  governance principles as they identify investments for the portfolio.  


GRIFFETH:  Finally, I`m not sure I would think of AT&T (NYSE:T) these days  when I think stability.  Yes, back in the day, yes.  But now, they are  transforming themselves into the media company with a lot of challenges  right now.  


KAPYRIN:  So, it is precisely because of that transformation that I think  they are a good bet but for a stable but slow economy.  So, what they have  done over the past few years.  They`re gone from being a stodgy old telecom  with a wireless unit that was big but that was all they really had to  horizontally integrated media company.  


GRIFFETH:  Yes.  
KAPYRIN:  So, they own HBO and Time Warner (NYSE:TWX).  They own the actual  pipes that get to that the destination, to the customer.  They can really  build on this.  


One, they can consolidate pay off some of the debt that they used to  acquire Time Warner (NYSE:TWX).  Number two, they can go into a  subscription model like Netflix (NASDAQ:NFLX).  That`s already what they`re  doing with HBO Max and HBO Go.  It`s a really good opportunity for them to  stabilize their business model and be more diversified and be a good bet  for a slow but steady economy.  


GRIFFETH:  Very good.  Andy Kapyrin with Regent Atlantic, good to see you.
KAPYRIN:  Thank you, Bill.
GRIFFETH:  Thank you.  Happy New Year.  
And coming up, leaving paradise why California is losing a generation of  wage earners.   
(MUSIC)


GRIFFETH:  The federal government is taking another step to try and  integrate the use of commercial drones into national aerospace.  The FAA is  proposing a rule that would require most drones operating in the U.S. to be  equipped with remote tracking technology.  The regulator says it expects  all drones to be in compliance within three years of finalizing that rule.  
Finally tonight, California as you may know is the world`s fifth largest  economy.  But a growing number of its residents are packing up and moving  out.  
Jane Wells tells us why the Golden State seems to be losing its shine.  
(BEGIN VIDEOTAPE)


JANE WELLS, NIGHTLY BUSINESS REPORT CORRESPONDENT:  California used to be  the place where everyone dreamed of going.  Now, people dream of leaving.  


SYDNEY MULKEY, EDUCATOR:  My economic situation there was not great.  
WELLS:  Sydney Mulkey is a 30-year-old educator from Oakland who was living  with her grandmother to make ends meet.  


MULKEY:  At one point, I was working three jobs.  And I was just really  tired.  So that was kind of the last straw.  


WELLS:  So, she moved to Portland, Oregon, where she got the same job for  more pay and was able to buy a brand-new townhouse.  
Danielle and Scott Fortier are Los Angeles natives who picked up and moved  their family and small business to Nashville.


SCOTT FORTIER, SMALL BUSINESS OWNER:  We`ve been here six months.  In the  six months, we`ve already had six friends of ours, six couples relocate to  the same area also.  


WELLS:  These are not isolated examples.  The U.S. Census Bureau says  California had a net loss of 190,000 people last year.  That`s still a  relatively small number.  But it`s a growing trend.  


JOEL KOTKIN, CHAPMAN UNIVERSITY PRESIDENT FELLOW:  People have this image  of all the old people who are frustrated leaving.  But actually the ones  who are leaving are family age people, people 30 to 54, that group.  That`s  the group that`s leaving.  


WELLS:   For the Fortiers, moving to Nashville has allowed them to save for  retirement.


Scott no longer has to work 80-hour weeks.  They traded in this 3,100  square foot house on a small lot in L.A. for a larger house on 7 acres in  Tennessee, which even includes a building for their business.  


S. FORTIER:  Property taxes in California were $7,200 a year.  And our  property taxes here are $2,800 a year.  


WELLS:  Migration out of California could have national implications.  The  state`s unique culture of innovation took decades to build and benefited  the entire country, attracting the best and brightest from around the  world.  That is not easily recreated somewhere else.  


KOTKIN:  There is no substitute for California.  When somebody moves from  California to Dallas, they may live a better life.  Will they have the same  impact they would have had had they been in California?  I`m not sure.  


WELLS:  But do these millennials miss California?  


DANIELLE FORTIER, SMALL BUSINESS OWNER:  I think leaving our family was the  hardest part.  
MULKEY:  Yes, I do.  Especially on days like today when it`s rainy and  gloomy and very dark at 7:30 in the morning.  
WELLS:  But California`s great weather may no longer be enough.  
For NIGHTLY BUSINESS REPORT, Jane Wells, Los Angeles.  
(END VIDEOTAPE)


GRIFFETH:  And before we go, a final look at the record closes and Wall  Street today, the Dow up 105.  Nasdaq above 9,000 the first time ever.  And  the S&P rose by 16.


That is NIGHTLY BUSINESS REPORT for tonight, I`m Bill Griffeth.  Thanks for  watching.  Have a great evening.  See you tomorrow.  


END
Nightly Business Report transcripts and video are available on-line post  broadcast at http://nbr.com. The program is transcribed by ASC Services II  Media, 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) 2019 CNBC, Inc.


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