Transcript: Nightly Business Report – June 23, 2016

NBR-ThumANNOUNCER:  This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and Sue
Herera.

TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR:  Decision day.  Stocks
close in on their 2016 highs as investors bet that voters in the United Kingdom will decide to remain                                                                       in the European Union.

SHARON EPPERSON, NIGHTLY BUSINESS REPORT ANCHOR:  Surprise diagnosis.
Health officials say AstraZeneca`s FluMist one regarded at the best way to
protect kids from the virus doesn`t work.

MATHISEN:  Troubling results.  One of the most popular small SUVs performed
the worst in the latest crash tests.

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

EPPERSON:  Good evening.  I`m Sharon Epperson in tonight for Sue Herera.

MATHISEN:  And I`m Tyler Mathisen, coming to you tonight from 30 Rock in
New York City.

Well, stocks rallied to near records, a sign perhaps that investors expect
the UK to vote to stay in the European Union, even though polls in recent
days have characterized the vote as a virtual coin toss and reports say
there are deep divisions throughout the country.

As we have been reporting, the market has been held captive by this vote,
moving higher with every poll that favors stay and twitching lower with
every one that favors leave.  Today, the Dow Jones Industrial Average
closed back above 18,000, gaining 230 points, the NASDAQ added 76 and the
S&P 500 rose 27.

EPPERSON:  A final outcome of the referendum won`t be known until early
tomorrow morning but a new poll out tonight and Wilfred Frost in London has
the details.

(BEGIN VIDEOTAPE)

WILFRED FROST, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Polls in the UK`s
historic vote on its membership in the European Union close 10:00 p.m.
local time.  The very first indications coming from polling firm YouGov, a
poll they carried out today of around 5,000 people have not an official
exit poll suggesting remain is just ahead, 52-48.  The same company`s last
poll was a reading of 51-49, suggesting a slight increase in recent days
towards the remain camp.

A reminder that this is not an official exit poll.  Early indications from
various reports that turnout is very high.  A factor that was expected to
benefit the remain camp.

For NIGHTLY BUSINESS REPORT, I`m Wilfred Frost in London.

(END VIDEOTAPE)

MATHISEN:  And in Great Britain, people are lining up to buy euros and
dollars, selling pounds.  Currency exchange shop owners say they`ve seen a
surge in demand for foreign cash ahead of results of the UK referendum.
The majority of transfers are from the pound sterling to euros.  Many
experts say the pound could fall as much as 20 percent if the UK does opt
to leave.

EPPERSON:  So what if Britain votes to leave the European Union?  What
impact will there be on the U.S. stock market, for both the long and short-
term?

Jim Paulsen, chief investment strategies at Wells Capital Management joins
us now.

Jim, even though markets today seem to indicate that they believe perhaps
that there will be a remain vote at the end of the day, and we did see this
200-point rally in the Dow Jones Industrial Average, it`s still a coin
toss.  We don`t know the final results.

What will be the impact and how far could we see a slide, perhaps, if the
vote goes the other way?

JAMES PAULSEN, CHIEF INVESTMENT STRATEGIST:  Well, certainly, Sharon, given
reaction of the markets now 20 move all the way back up close to record
highs in the United States, there`s developed some risk, if for the
disappointment, while there`s a lot of thought that it`s going to be a stay
vote.  If it is a leave vote now, you`ve probably got some risk in most
markets across the world.

You know, it would not be at all surprising to me if we get a leave vote
that the market falls, you know, a fair amount.  Three percent maybe in a
day and maybe, you know, 5 percent, or more percent over the next week here
in the United States, and probably even more so closer to double digits in
the U.K. itself.  You certainly will have big moves in currencies.

You`ll probably have big drops in sovereign bond yields that are still
considered safe havens.  You`ll probably have a pop in the U.S. dollar to
some extent as people are rushing to safe havens.  So, commodities will
probably go lower, emerging markets will get hit.  So, there could be a big
media knee-jerk reaction to a leave vote since it looks like it`s totally
unexpected.

But I really think longer term, investors will calm down, and over the
course of the next few weeks, even with a leave vote come to the
realization that that doesn`t even mean it`s final.  It has to still go
parliament.  It could still be backed out, even if parliament passes it,
could take another two years and anytime in there backed out.

And I really think that I would look if there is a leave vote, at the
carnage that comes here in the next few weeks more of a buying opportunity
for long-term investors, because ultimately, even with a leave, I think
there`s a good possibility down the road we still get a pretty good rally.

MATHISEN:  You know, just in the past few minutes, Jim, one of the leaders
of the leave movement, head of the Independent Party, said he was feeling
as though the remain vote was going to prevail.  If that happens, what`s
the outcome over the next weeks and months?  Do we just go back to
concentrating on the run of the mill ordinary worries?

PAULSEN:  I think that`s right.

And you know, Tyler, I guess what I like about this, if we get by Brexit
here, which I kind of think we will, I think there`s good things going on
here.  We`ve got a very broad-based rally since January, unlike the one we
had last August.  There`s broader participation, which tells me more good
results are going on in these companies than we`ve had for a while.

We also have no hurdle or offset with higher bond yields.  Normally when
stock market goes up, bond yields go up.  Here going down while stocky
rally.  So, there`s no check to this rally, economic surprise indices
turning up around the world of late.

And as you mentioned, we`re kind of back this year to finally climbing that
perpetual wall of worry.  The fear is back.  The thing that`s made this
bull market great.  I kind of thing if Brexit is over, then we`re going to
go to new record highs here over the next few months.

EPPERSON:  All right.  There we have it.  Jim Paulsen with Wells Capital
Management, thanks so much.

MATHISEN:  Good place to leave it.

PAULSEN:  Thanks.

MATHISEN:  All right.  So, while a leave vote could have wide-reaching
implications for the markets, as Jim just pointed that out, what might it
mean for you?

Well, for one it could affect mortgage rates.  If investors decide to look
for safety and plow money into government bonds, yields could fall further
and in turn, that might push down mortgage rates.  It could temporarily
make your retirement savings less value about.  About half of all of
America`s full-time workers participate in their company`s 401(k) programs
which are, of course, susceptible to any market swings.

And with predictions of a drop in the pound, if the Brits vote to leave, it
could make the cost of a vacation in Britain more appealing.

EPPERSON:  Meanwhile in our nation`s capital, the Supreme Court upheld the
affirmative action at University of Texas at Austin.  In a 4-3 ruling, the
justices said the university`s plan to take race into consideration has one
factor of admission was constitutional.  The court decision does leave room
for future challenges for racial policies at other schools.

MATHISEN:  The Supreme Court also ruled on a case closely watched by the
business community, immigration.  Many executives say immigration reform
would improve economic growth and boost productivity, employment and the
wages.

Today, a deadlocked Supreme Court dealt President Obama a major setback on
his controversial policy.  Hampton Pearson has the details.

(BEGIN VIDEOTAPE)

HAMPTON PEARSON, NIGHTLY BUSINESS REPORT CORRESPONDENT:  In just one
sentence, the Supreme Court let stand a lower court ruling that blocked
President Obama`s plan to spare roughly 4 million illegal immigrants from
deportation, especially those with children who are American citizens and
immigrants with no criminal record.  At the White House, the president
expressed his disappointment.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Today`s decision is
frustrating to those who seek to grow our economy and bring a rationality
to our immigration system, and to allow people to come out of the shadows
and lift this perpetual cloud on them.

PEARSON:  On Capitol Hill, Republican leaders said it was another win in
their campaign against the president`s immigration policy and what they
view as his excessive use of executive authority.

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE:  This is a win for the
constitution.  It`s a win for Congress, and it`s a win in our fight to
restore the separation of powers.

PEARSON:  Pro-immigration advocates point out blocking the administration
plan to prioritize who gets deported leaves not just workers in limbo
bought their employers as well.

ANGELA MARIA KELLEY, CENTER FOR AMERICAN PROGRESS:  Employers are similarly
caught in the crosshairs.  This is a dysfunction of our system, and the
court could have gone a long way today to help American businesses, to help
all American people, or taxpayers.  And they failed to do their job.

PEARSON:  On Monday, the high court will hand down the final three
decisions of this term, including a major ruling on abortion that could
impact millions of American women.

For NIGHTLY BUSINESS REPORT, I`m Hampton Pearson at the Supreme Court.

(END VIDEOTAPE)

MATHISEN:  Well, the ruling on immigration was also the talk of the
campaign trail on a day that saw a lot of news out of Washington.  And John
Harwood is tracking all of it for us.

John, what was the reaction today from Donald Trump and Hillary Clinton to
the immigration ruling?

JOHN HARWOOD, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Well, what you got
from Trump and Republicans was a statement that the court had vindicated
their complaints that President Obama was overreaching his executive
authority with that decision.  What you got from President Obama, Hillary
Clinton and Democrats was outrage at the fact that both the policy was
blocked, but also at Republicans for not confirming the Supreme Court
justice President Obama has nominated, Merrick Garland, who could have
broke than tie in the president`s favor.

And one of the things we know, when you lose on policy in a highly
emotional case like this, you tend to win on the politics, because the
people who get mobilized of the ones aggrieved by the decision.  So, this
may be a setback for President Obama but something that boosts Hillary
Clinton politically.

EPPERSON:  In another major development, a number of top business leaders
endorsed Clinton today, John.  Among them were Berkshire`s Warren Buffett,
Facebook`s Sheryl Sandberg, former DuPont CEO Ellen Kullman and Netflix
(NASDAQ:NFLX) CEO Reed Hastings.

Now, how influential are endorsements like this?  And what impact will this
have on the campaign?

HARWOOD:  Well, some of them were no surprise.  Warren Buffett has already
endorsed Hillary Clinton before that.  When you have a large number of
executives who are on a list who come out and endorse, that has some
impact.

I think the most significant, though, was Jim Ciccone, who is an executive
with AT&T (NYSE:T).  He was a senior aide in the first Bush White House.
He also worked in the Reagan White House.  He came out and said that
Hillary Clinton would do a fine job and that Donald Trump would take us
down a dark path.

When you have someone in the nominee`s own party come out and speak against
him, that has more impact.

MATHISEN:  John, it looked a bit chaotic on the House floor over the past
24 hours.  Democrats ended their gun control sit-in after about a day.  The
NRA very powerful, well-funded lobby group.

What happens next as the House goes on recess?

HARWOOD:  The House vows tail come back and talk about this July 5th when
they return.  Speaker Ryan came out today and called, again, this move by
the Democrats a publicity stunt, said they were raising campaign money off
of it.  He wants to keep substance in charge in the House of
Representative.

But the Democrats did get good news in the Senate when failed to kill a
potential compromise measure.  So, there are some narrow hopes of something
legislatively moving, not likely but it`s not impossible.

HARWOOD:  All right, John.  Thank you very much.  John Harwood reporting
tonight from Washington.

EPPERSON:  Both presidential candidates have been very outspoken on trade.
Donald Trump for his plan to build a wall on the Mexican border and slap
huge tariffs on Chinese goods, Hillary Clinton for her opposition to the
Trans-Pacific Partnership, and both policies could have an economic affect
on states across the country.

Scott Cohn reports from Oakland, California.

(BEGIN VIDEOTAPE)

SCOTT COHN, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Among the places
they`ll be watching this fall`s presidential election most closely is here
in Oakland, California.  This is home to the fifth largest U.S. port, a
port that`s been fueled by a 20-year trend towards liberalizing foreign
trade.

But that is almost certainly about to change no matter who`s elected this
fall.  Donald Trump, of course, has been calling for the wall with Mexico,
but also threatening stiff tariffs on Chinese goods.

DONALD TRUMP (R), PRESUMPTIVE PRESIDENTIAL NOMINEE:  We don`t have free
trade.  With China, with China, they dump their product all over the place.
They`re dumping steels and ruining our steel mills.  We need smart leaders
to make free trade work and we have leaders that are not smart.  In fact,
they`re rather stupid.

COHN:  Hillary Clinton has cooled to free trade as well, turning against
the Trans Pacific Trade Partnership that she once called the gold standard.

HILLARY CLINTON (D), PRESUMPTIVE PRESIDENTIAL CANDIDATE:  I just don`t
think that when you add it all up, it — you know, meets the standards that
I set, and I couldn`t, you know, look in the eyes of, you know a voter and
say, yes, I`m convinced this is going to raise your income, because I
wasn`t.

COHN:  If all of that results in reduced trade with China, or worse case, a
trade war, some states are going to be affected more than others.  These
are the top states for exports to China.  First, Washington state, where
Boeing (NYSE:BA) makes its planes, $19 billion worth of goods shipped last
year.  Close behind California, at $16 billion, and Texas at nearly $12
billion.

Opponents of the free trade pact say that canceling them or changing them
will bring jobs back to the U.S., but in the short term, they almost
certainly will have an economic affect in places like Oakland.

I`m Scott Cohn, NIGHTLY BUSINESS REPORT, Oakland, California.

(END VIDEOTAPE)

EPPERSON:  Still ahead, ever get the FluMist nasal spray vaccine?  Well,
guess what?  It doesn`t work.  What health officials are recommending you
do now?

(MUSIC)

EPPERSON:  The popular nasal spray version of the flu vaccine doesn`t
protect kids the way it was supposed to.  In a surprise decision, health
officials are advising doctors now to not use the mist vaccine this year, a
reversal from its previous stance.

Meg Tirrell has more on this change in diagnosis.

(BEGIN VIDEOTAPE)

MEG TIRRELL, NIGHTLY BUSINESS REPORT CORRESPONDENT:  It was the only option
for flu vaccine that doesn`t involve a needle.  The FluMist nasal spray is
made by UK drugmaker as AstraZeneca and accounts for about one-third of
vaccines given to kids in the U.S.

But according to the CDC, it provided only 3 percent of protection against
the flu last season.  That compares with 63 percent for the flu shot.

DR. CAMILLE SABELLA, CLEVELAND CLINIC CTR. FOR PEDIATRIC INFECTIOUS
DISEASE:  Over the last three years, we`ve been hearing that the
effectiveness of the nasal spray has been less than has been expected.  But
I think I was a little surprised that it was as low as the CDC says it is.

TIRRELL:  Manufacturer AstraZeneca claims FluMist provides 46 percent to 58
percent protection, according to its own studies and those of public health
authorities and other countries.  It says it`s working with the CDC to
better understand its data and to try to ensure Americans can receive the
nasal spray vaccine in future flu seasons.

SABELLA:  Once we find out why it doesn`t work, there can certainly be
changes made so that, that form of vaccine will hopefully show equivalent
efficacy again.

TIRRELL:  In the meantime, AstraZeneca says it expects very limited U.S.
demand this year due to the CDC recommendation FluMist not be used.
FluMist brings in more than $200 millions in annual U.S. sales for the
British drug maker, which now plans to write off 80 millions dollar in
inventory in the second quarter.

The company is not the largest provider of flu vaccines in the U.S.
Sanofi, GlaxoSmithKline and CSL all make more.  But AstraZeneca had planned
to supply as many as 14 million dosage, or about 8 percent of the total flu
vaccine in the U.S. this season.  The CDC says it will work with other
manufacturers through the summer to ensure there`s no vaccine shortage.

But parents and pediatricians will have to brace themselves for a change.
The CDC still recommends a flu shot for people age six months and up.

SABELLA:  Knowing that the shot works fairly well and that influenza is a
major cause of problems and deaths in this country means that it`s going to
be very, very important to really stress the point that everybody needs to
get an influenza vaccine.

TIRRELL:  In fact, I got my first flu last year as part of reporting for a
story.  I was surprised it didn`t hurt more.

That`s it?

For NIGHTLY BUSINESS REPORT, I`m Meg Tirrell.

(END VIDEOTAPE)

EPPERSON:  From health care to financial services and the big banks, they
aced the stress test.  The Federal Reserve gave passing grades to them and
deemed them strong enough to weather a severe economic catastrophe without
help from the government.  Under a hypothetical scenario, the central bank
calculated 33 of the largest banks would have loan losses of $385 billion,
meeting the Fed`s definition of good health during a severe recession.
Results signal that many banks will win approval next week to increase
their dividends.

MATHISEN:  Macy`s (NYSE:M) CEO Terry Lundgren plans to step down and that
is where we begin tonight`s “Market Focus”.

After 14 years as CEO, Lundgren said he would leave that role in the first
quarter of year to take on the position of executive chairman.  The
retailer`s current president will succeed Lundgren as CEO.  Shares of
Macy`s (NYSE:M) up more than 1.5 percent today to finish at $33.38.

Twillo made its stock market debut today.  The cloud communications company
offered 10 million shares at $15 apiece.  Those shares began trading at
$23.99.  A nearly 60 percent increase above the initial public offering.
Shares soared 92 percent on the day to $28.79.

Blackberry posted a sharp decline in revenue in the latest quarter with
results falling short of analysts estimates, despite the miss, the
smartphone maker beat profits targets and forecasted a smaller than
expected loss for the year.

The CEO John Chen spoke about the company`s next move.

(BEGIN VIDEO CLIP)

JOHN CHEN, BLACKBERRY CEO:  I`m looking to now open to license my software,
my handset software and interfaces to a lot of — maybe even competitors in
the making hardware business side of the equation.  So, thereby, I think
margin better, balance sheets will be more protected and growth will be
forthcoming.

(END VIDEO CLIP)

MATHISEN:  Shares of BlackBerry rose more than 3.5 percent to $7 even.

EPPERSON:  Meanwhile, automaker Fiat Chrysler is issuing more recalls.  The
company is recalling more than 13,000 vehicles in its Maserati division due
to the vehicle`s confusing gear shifter.  Fiat also said that software
upgrade fixes are available by the end of the month for Jeep models
recalled for the same issue.  Shares of Fiat up nearly 4 percent to $17.19.

Boeing (NYSE:BA) will ramps up its aircraft production as it expects demand
for passenger jets to rise in the coming years.  The aircraft maker said,
within 20 years, 38,000 new planes will be needed for the anticipated
growth in air transport demand.  And as a result, Boeing (NYSE:BA) plans to
make more than 900 planes in five years.  Shares were up a percent to
$133.55.

MATHISEN:  Volkswagen will reportedly pay about $10 billion to settle
claims from its emissions cheating scandal.  The money would compensate
nearly 500,000 owners of vehicles programmed to cheat on the emissions
test.  The company will pay diesel car owners about $5,000, in some cases
as much as 10 grand on top of a buy-back or repair.

EPPERSON:  New crash tests have produced some troubling results.  Vehicles
that protect drivers in certainly collisions may leave passengers at risk.

And as Phil LeBeau reports, the model getting the worse marks is one of the
most popular small SUVs.

(BEGIN VIDEOTAPE)

PHIL LEBEAU, NIGHTLY BUSINESS REPORT CORRESPONDENT:  It`s a deadly
collision that until now had never been replicated in crash tests.  It`s
the small overlap collision where the front passenger side hits another car
or object at 40 miles per hour.  The Insurance Institute for Highway Safety
tested seven small SUVs that have good ratings for that type of collision
on the driver`s side.

But on the passenger side, it was a different story, especially for three
models, the Nissan Rogue and Subaru Forester were rated as marginal.  While
Toyota`s RAV4 was given a rating of poor by the IIHS.

Toyota (NYSE:TM) says the test is severe, specialized and goes beyond the
federal vehicle safety requirements.  After the small overlap test was
first introduced in 2012, Toyota (NYSE:TM) took steps to improve the
performance of its vehicle in the test.  Rather than waiting to re-engineer
both the driver and passenger sides, we took immediate steps to enhance
performance on the driver`s side.

Focusing on driver protection during small overlap crashes, explains why
some SUVs did not do as well protecting passengers in a similar collision.
But even models with completely symmetrical front ends produced different
results — something engineers will focus on correcting.

BECKY MUELLER, IIHS:  This test is just unveiling that there`s something
new, something that can be made an improvement on in the future, but it
doesn`t necessarily mean that your vehicle that you`re currently riding in
is not safe.

LEBEAU:  In 2014, the most recent year with data, more than 1,600 people
here in the United States who were riding as passengers in the front seat
of a vehicle were killed in crashes.  The IIHS believes it can lower that
number by focusing new crash tests on one of the most common collisions out
on the road.

Phil LeBeau, NIGHTLY BUSINESS REPORT, Chicago.

(END VIDEOTAPE)

EPPERSON:  To read more about the crash tests, head to our website,
NBR.com.

MATHISEN:  And coming up, big money and the big online stars behind the
small screen.

(MUSIC)

EPPERSON:  The online video industry is growing and so is the annual
gathering of all people who create the videos we watch.  The meeting called
Vid Con, comes as social media companies aggressively compete for one thing
— ad dollars.

Julia Boorstin is in Anaheim.

(BEGIN VIDEOTAPE)

JULIA BOORSTIN, NIGHTLY BUSINESS REPORT CORRESPONDENT:  As many as 30,000
video digital fans will flock to Vid Con, paying $150 each to see their
favorite YouTube stars, and the business of digital video is exploding, the
amount of time U.S. adults spent digital video is growing 10.5 percent a
year, an hour and eight minutes a day according to e-marketer.

KEITH RICHMAN, DEFY MEDIA:  People are finally beginning to realize that
these audiences truly relate to the programs and to the talent that is in
them.  And as a result of that, advertisers are asking and coming
increasingly to say how do we take advantage of that?

BOORSTIN:  With YouTube, the leader in the space, projected to grow to $5.2
billion in advertising this year, it`s drawing competition from Facebook
(NASDAQ:FB), Snapchat and Twitter, all trying for a piece of the digital
video ad pie.

A broad range of brands are here at Vid Con, sponsors ranging from Kia and
Samsung to CoverGirl and Taco Bell with this booth here behind me.  These
brands hoping to collaborate with creators on branded contents and
providing companies here with plenty of opportunities for selfies.

GLOZELL GREEN, YOUTUBE PERSONALITY:  I do appreciate the brand deals and
they are coming, because not everyone is paying attention to the Internet.
Before, like what are they doing?  But when you have an audience and
influence — they come.  And as long as they`re good brands, I don`t have a
problem.  It`s working for me.

BOORSTIN:  And it`s working for digital media companies including
AwesomenessTV with star content creators who have a social reach of over
600 million people.

BRIAN ROBBINS, AWESOMENESSTV:  I think we are at a certain point.  I think
that — listen, television is not going away today, tomorrow or anytime
soon, but are people watching 30 second spots the way they used to?  People
are watching shows, doesn`t mean they`re getting the ads with them.  We
know that when we do a piece of content like rule crush, they`re just
getting views, but you`re getting super high engagement.

BOORSTIN:  Here at Vid Con, Facebook (NASDAQ:FB) unveiled more tools for
its Facebook (NASDAQ:FB) Live video platform, such as the ability to go
live with someone else or to schedule a broadcast.  This as Facebook
(NASDAQ:FB) looking to lure over content creators and the fans and ad
dollars they bring.

For NIGHTLY BUSINESS REPORT, I`m Julia Boorstin in Anaheim, California.

(END VIDEOTAPE)

MATHISEN:  I`m going with the green glitter lipstick tomorrow, folks.

(LAUGHTER)

MATHISEN:  Before we go, here`s another look at the day on Wall Street, the
day that Britons went to the polls.  The Dow closed back above 18,000
gaining 230 points, NASDAQ added 76, and S&P rose 27.

Sharon?

EPPERSON:  And that is NIGHTLY BUSINESS REPORT for tonight.  I`m Sharon
Epperson.  Thanks so much for watching.

MATHISEN:  And I`m Tyler Mathisen.  Have a great evening, everybody, and we
will see you back here tomorrow night.

END

Nightly Business Report transcripts and video are available on-line post
broadcast at http://nbr.com. 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) 2016 CNBC, Inc.

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