Transcript: Nightly Business Report – September 11, 2017

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

closes at a record. The Dow regains 22,000, all because Hurricane Irma
could have been a lot, lot worse.

half of Florida is without power tonight and that could temporarily cool
the state`s hot economy.

HERERA: Giving back. Sports stars and celebrities are traders for a day
to raise money to honor those who lost their lives 16 years ago.

Those stories and more tonight on NIGHTLY BUSINESS REPORT for Monday,
September 11th.

Good evening, everyone, and welcome.

Stocks took off at the opening bell today and never turn back. Investors
were in a buying mood, sending the S&P 500 to its 31st closing record of
the year. All three major indexes rallied more than 1 percent, so why the
optimism? Well, in part because Hurricane Irma delivered a less forceful
than expected hit on Florida and concerns over North Korea eased as well,
at least for now.

Let`s get right to the numbers. The Dow Jones Industrial Average advanced
259 points to 22057, biggest one-day gain in six months. The NASDAQ added
and the S&P 500 gained 26.

Bob Pisani now with more on the rally from the floor of the NYSE.


rally mode today, and a number of factors contributed to that rally.
First, while the damage from Hurricane Irma was extensive, it wasn`t as
catastrophic as feared. Second, there will be money for rebuilding and
that may be the ultimate fallout from Harvey and Irma. It may shift the
focus in Washington away from taxes and towards hurricane relief, and more
fiscal spending.

Other factors also helped, particularly in absence of weapons tests in
North Korea over the weekend when the regime celebrated its 69th
anniversary. New sanctions against North Korea which are being voted on
tonight in the United Nations have also been watered down. That`s
contributing to a less tense environment between the U.S. and North Korea.

Finally, bond yields have begun rising again after two weeks of going
straight down, and that`s moved bank stocks up about 2 percent today. The
markets have been amazingly resilient, it barely dropped last week on the
hurricane fears and the North Korean fears, but it`s rallied hard today
when both concerns appeared to ease.

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


HERERA: Kristina Hooper joins us now to talk more about today`s rally and
whether or not it will last. She is global strategist at Invesco.

Good to see you, Kristina, as always.


HERERA: A pretty impressive move by the S&P and by the Dow Jones
Industrial average. But what kind of staying power or depth do you think
this rally really has?

HOOPER: Well, that`s a great question. I do think it could last for
several days keep in mind that there`s certainly a lot of relief over
hurricane Irma, not being as devastating as had it been expected.

But I also believe part of this rally is due to a rethinking on the part of
markets in terms of the deal struck by the Trump administration with
Democrats in Congress last week. It suggests that there is the opportunity
for bipartisanship and the potential for agenda items like tax reform to
get done. So, I do believe it has some staying power, but I also expect
that events later this month are likely to derail it.

MATHISEN: So, you think that the deal struck last week that included
hurricane funding, a raising of the debt ceiling or a suspension of it for
three month and a continuing resolution suggest that there may be more
opportunity for deals to get tax reform and other imperatives done.
Explain that to me.

HOOPER: Well, now, we have a lot of big concerns about Washington D.C.
dysfunction out of the way for September. That was a big concern heading
into last week. So, now, Congress actually does have a limited window of
time to tackle tax reform. It would have to be in a bipartisan way, but
after the healthcare failings that we saw earlier this year, it may be the
best approach for the administration to accomplish some kind of tax

HERERA: You also point out the fact that you are expecting the start of
balance sheet normalization. In other words, the Fed to make some moves to
shrink its balance sheet a little bit after all the money that they put in
after the financial crisis. What kind of volatility might that bring to
the market?

HOOPER: Well, we`re in uncharted territory. Keep in mind that balance
sheet increases have been really what caused the economy to recover out of
the Great Recession. And so, we have this bloated balance sheet that the
Fed has had for years. And now, we`re going to start talking about
normalizing it. Even though the Fed wants to be ever so deliberate and
careful and thoughtful, it still could be jarring to markets.

HERERA: All right. Kristina, we`ll leave it there. Thank you. Kristina
Hooper with Invesco.

HOOPER: Thank you.

MATHISEN: Well, now, to Hurricane Irma which packed a punch especially
over the Florida Keys. But for the rest of the state the hit wasn`t quite
as bad as many had feared. The strong winds and torrential rains did
however leave much of Florida in the dark. There are reports that 65
percent of the state is without power, making it hard for the nation`s
fourth largest economy to recover quickly.

And as Jackie DeAngelis reports from Riviera Beach, the situation is
improving slowly.


than six million people in Florida lost power after Irma. Almost every
part of the state impacted by the outages.

UNIDENTIFIED MALE: We lost power over there since Friday, before the
hurricane was even nearby.

DEANGELIS: Crews of 50,000 to 60,000 people will be working to restore
resources as quickly as possible with some help from neighboring states.
Officials pleading that people stay patient.

GOV. RICK SCOTT (R), FLORIDA: Having daily calls with the utilities to get
the power back on, they`re going to do everything what can. I`ve been
talking to nursing homes all morning. I`ve been talking to assisted
living. Everybody needs the power back on.

DEANGELIS: The major shipping channels in Florida also saw closures.
Ports in Tampa, Fort Lauderdale, Jacksonville and West Palm beach on hold
until the coast guard makes sure it`s safe for vessels to pass through.

serious critical port in relation to providing relief supplies to the
Caribbean islands. Those islands we`re hit five days ago. Some of them
devastated. And a lot of the relief supplies that go to them come out of
the — come out of our port.

DEANGELIS: Gasoline will also come through the ports, but only after the
coast guard gives the nod and power is restored to the terminals. West
Palm Beach, Miami and Tampa seen gas station closures of more than 50
percent each.

(on camera): So, while the damage from Hurricane Irma might be less than
expected, it`s still gonna be a while before this state and its economy are
back up and running.

For NIGHTLY BUSINESS REPORT, I`m Jackie DeAngelis, Riviera Beach, Florida.


HERERA: The full impact of the hurricanes on Florida`s citrus industry is
not yet known, but it is believed that growers dodged the worst of it.
Citrus is a major part of Florida`s economy, producing almost 60 percent of
the oranges in the U.S.

MATHISEN: And tourism, of course, is another huge part of the Sunshine
State`s economy. Florida attracted almost a 113 million tourists last year
and tourism supports nearly 1.5 million jobs. Two of Florida`s biggest
attractions, the Universal (NYSE:UVV) and Disney (NYSE:DIS) theme parks in
Orlando, are set to reopen tomorrow.

Cruise industry shares were hired today on the belief that the disruptions
to that business would be temporary, despite major damage to such prime
destinations as the U.S. Virgin Islands and Saint Maarten. The Caribbean
is the cruise industry`s largest market.

HERERA: With the focus now on recovery, some local officials are looking
to small business owners not just the big ones to play a leading role.

Contessa Brewer is in Miami tonight.


uprooted massive trees and scattered smaller ones across roadways, toppling
others onto cars. Its furious winds piled sand from Hollywood beach onto
the broad walk, against boarded up businesses. By daylight, some
Floridians toured the damage, taking stock.

Armand Messina, a Florida Keys resident and small business owner, was
trying to get back.

underwater, 100 percent loss.

BREWER: Today, he got an urgent request from his city manager in Marathon.

MESSINA: Same as how that one electrical contractor and a shuttle
contractor, to start working on the infrastructure, would try to get them
back up on line.

BREWER: But transportation is a big headache. Gasoline is in short supply
and contractors are begging the governor to help.

we`re going to stop by. He`s got some cans of fuel for me.

BREWER: The power`s out throughout much of South Florida. So, when the
lights are on, business is booming.

Nine-one-one Foods in Dania Beach never even closed during Irma.

TELI DEGLARIS, 911 FOODS: We`ve been here almost 40 years. We — if we
can open, we`ll open.

BREWER: In downtown Miami, two cranes collapsed during the storm and
construction debris flew from high-rise towers. Today, the glass litters
the ground, downed trees block streets in the Brickell Avenue neighborhood
known as Wall Street South. The city`s financial capital saw feet of
flooding from Irma storm surge.

(on camera): Some of the biggest names in banking are assessing the damage
in Miami today. Wells Fargo (NYSE:WFC), Morgan Stanley (NYSE:MS),
Deloitte, all out trying to figure out among many others when they can get
back up and running.

JOSE JOUVIN, CONVERGIA: I`m just checking, you know, how the building,
just tell my co-workers we got to come back tomorrow.

BREWER (voice-over): Jose Jouvin works for Convergia, a communications
provider. One of his biggest clients is Uber in Latin America, and he is
chomping at the bit to get back inside his building.

Armand Messina is chomping at the bit to get back to life as he knows it.

MESSINA: I`m hoping by the time we get down there, the roads would be
clear and we can hopefully get down there. I don`t know what`s going to
happen when we get the Florida City.



MATHISEN: Insurance stocks — you guessed it — rose today after a brutal
week last week. The popular insurance ETF ticker KIE finished the day 2
percent higher and one smaller Florida home insurers which was set to lose
a bundle skyrocketed, but the sector isn`t out of the woods just yet.

Morgan Brennan explains.


Hurricane Irma will pressure the insurance industry but the impact will not
be as great as feared.

ELYSE GREENSPAN, WELLS FARGO SECURITIES: You went from an expectation that
the insurance industry could have saw about a hundred and $25 billion of
losses just from this event, to now today, we`re looking at around $40
billion of losses. So, the fact that the storm veered towards the west
coast of Florida really cut the level of losses on, you know, by about a

BRENNAN: Insurance and reinsurance stocks like Travelers, Chubb (NYSE:CB),
and XL Group rallied today as the worst case scenario did not play out with
Hurricane Irma, a scenario that had originally called for a direct hit on

Risk modeling firm AIR Worldwide now estimates insured losses could be $20
billion to $40 billion. That includes damages from wind and storm surge,
but excludes Irma`s impact on the broader economy and the losses sure to
come for the federal government`s flood insurance program.

It`s a staggering sum, two times the estimate for Hurricane Harvey,
according to Wells Fargo (NYSE:WFC). But with the industry sitting on a
mountain of capital still small enough that insurers like assurance to
manage it.

least of our retention which is $127 million, but we don`t think we`ll come
near the top of our reinsurance and exposure of $1.1 billion. So, it`s
still really early to have definitive answers, but we`ve modeled it. We`ve
looked at the wind speeds. We`ve looked at flooding and storm surge and we
do feel it`s you know in the bounds of what we would have expected now.

Near-term earnings will feel the effects but analysts expect only a handful
of yet to be identified reinsurers to take the biggest losses, still while
it won`t be as bad as feared, at least not for the broader sector, both
Irma and Harvey will make history, joining Superstorm Sandy, Hurricane
Andrew and even Hurricane Katrina as two of the costliest hurricanes on

(on camera): The hope now that the worst is finally over especially since
a third threat, Hurricane Jose, remains on the horizon.



HERERA: And it`s not just the cost of Hurricane Irma that`s being tallied,
but also Hurricane Harvey. And the one-two punch of these massive storms
could ding the broader U.S. economy for billions of dollars.

Steve Liesman has that part of the story.


estimates of the potential cost of these two monstrous storms being pegged
at $150 billion to $200 billion. Moody`s (NYSE:MCO) Analytics put the cost
of Harvey at $86 billion to $108 billion, and the very preliminary cost of
Hurricane Irma were pegged at $64 billion to $92 billion, but there could
be more damage to count.

It was unclear, for example, if Moody`s (NYSE:MCO) had figured in the late
day flooding in cities like Jacksonville, Florida, or Charleston, South

In those totals are some $20 billion to $30 billion of lost economic output
from idle hotels, people who can`t get to work, and power outages that shut
down commerce. Moody shaved its third quarter GDP forecast for the entire
nation by half a point to 2-1/2 percent. But expects a reconstruction
rebound in the fourth quarter.

And that depends on the timing of insurance payments and government
assistance and even the ability to find enough construction workers to
rebuild the state.

ELLEN ZENTNER, MORGAN STANLEY: That`s a lot of homes that have to be
rebuilt. It`s a lot of cars that have to be replaced. On the home front
so to speak, that`s more lagged, though.

I can go out tomorrow soon as the storm passes and practically get an
insurance payment and buy a car. That process happens very quickly. On
homes, especially, if you don`t have insurance and you`ve got to wait for
the government insurance, that can take months before you start to rebuild.

LIESMAN: Florida ranks fourth among states and economic output, generating
nearly a trillion dollars of GDP annually. But it`s 27th and per capita
income with many wealthy retirees but also seniors on modest pensions,
along with many poor and working-class families.

The top industries in Florida, trade and transportation, followed by
professional and business services, education and health, along with
leisure and hospitality, which are all those theme parks and hotels. These
storms can leave enduring impacts on lives, but don`t generally have
lasting national impacts on the economy.

In the case of Harvey, a lot depends on how quickly those refineries can
get up and running. For Irma, it`s a matter of getting the lights back on,
the streets cleared and airports and especially the theme parks up and
running up and down and across the nation`s fourth largest state.



MATHISEN: Still ahead, Apple`s new iPhone could come with an eye-popping
price tag. Is the smartphone entering a new era?


MATHISEN: Two senators asked Equifax (NYSE:EFX) to answer detailed
questions about the breach we told you about last week. Lawmakers also
want to know when three executives who sold stock in the company in August
were first notified of the cyberattack. Up to 143 million Americans had
their personal information compromised.

HERERA: Mixed signals on solar power use in the U.S. According to an
industry report, installations rose 8 percent in the second quarter,
despite a sharp pullback in residential rooftop systems. But it`s that
decline in residential use that experts say is putting the industry on
track for its first annual decline.

MATHISEN: China is considering a move that would ban the production and
sale of vehicles powered by fossil fuels. Chinese regulators have not
decided when the ban would take effect or whether it will, but there are
reports that carmakers are being called upon to adjust their strategies to
the changing situation. China is the world`s largest auto market.

HERERA: Gas prices rising fast, a direct result of the refinery closures
following Hurricane Harvey. According to Trilby Lundberg, the average
price of regular gasoline was up 30 cents to $2.69, the biggest two-week
price hikes since 2011. The most expensive gas can be found in San
Francisco, at an average price of $3.21 a gallon. The cheapest, $2.31 a
gallon can be found in Baton Rouge, Louisiana.

MATHISEN: Shares of the struggling drug maker Teva soar and that`s where
we begin tonight`s “Market Focus”.

After months of speculation, the world`s biggest seller of generic drugs
named a new CEO. He will be tasked with reviving sales and reducing the
company`s debt. Teva also recently shuffled its board and shed assets and
investors like the move. The stock of 19 percent on the session to $18.50.

Bristol-Myers Squibb (NYSE:BMY) reported positive results for an
experimental cancer drug showing an already widely used medication can be
used sooner in treatment. The drug is part of a new class of treatments
known as immunotherapy. Shares of Bristol-Myers Squibb (NYSE:BMY) rose
slightly to $62.72.

And Health Insurance Innovations is expected to face fraud penalties in
excess of $100 million. The company develops and administers health
insurance plans, including short-term medical complaints — short-term
medical, I should say. Complaints alleged that the company did not cover
what its plans claimed it did. The company is facing fraud investigations
in 42 states and has lost accreditation in his home state of Florida.
Health Insurance Innovations appealing the decision, but the stock fell
nearly 22 percent to $23.35.

HERERA: Tahoe Resources received a favorable court ruling. The mining
company`s license for a silver mine in Guatemala was reinstated by the
country`s Supreme Court. However, there is an ongoing roadblock preventing
Tahoe from immediately restarting its operations there. Tahoe resources
stock was up 33 percent to $6.27.

The chicken processor Pilgrims Pride struck a deal to buy a poultry
supplier for $1 billion. The deal is with JBS, the world`s largest meat
packer for their British subsidiary Moy Park. Despite the news, the stock
fell 3 percent to $28.17.

And Citigroup (NYSE:C) said its third-quarter market`s revenue will be
lower by about 15 percent compared to last year. The news was announced
today at an investor conference. Citigroup`s revenue was boosted last year
by the U.S. elections and the Brexit vote in the U.K. Despite the forecast
though, the stock was up 2 percent to $67.71.

MATHISEN: Apple (NASDAQ:AAPL) will get plenty of investor attention
tomorrow, that`s because the king of Cupertino is likely to unveil some
fresh products and do it at its brand-new billion-dollar headquarters
there. And the headliner product is rumored to be a new suite of iPhones
with one device possibly selling for close to a thousand dollars.

Daniel Flax, senior technology analyst at Neuberger Berman is here now to

Dan, welcome. Good to have you with us.


MATHISEN: How much smarter can smartphones get? And what are you
expecting to see from Apple (NASDAQ:AAPL) tomorrow?

FLAX: I think, Tyler, what`s important is that the phones are taking on
more and more of the capabilities from other areas. So, for example,
payments with Apple (NASDAQ:AAPL) Pay, and what this speaks to is that the
ecosystem for Apple (NASDAQ:AAPL) is moving into newer areas.

So, for example, there`s augmented reality kit and that has the potential
to unleash a whole new wave of a new experience in the computing arena.

HERERA: Apple (NASDAQ:AAPL) is facing a lot of competition though from the
likes of Samsung, even though Samsung had its issues with some of its
phones and its tablets and the like. Can they out-innovate those other

FLAX: I think what`s important with Apple (NASDAQ:AAPL) is that they`ve
been able to integrate hardware software and services and that is what
helped build — helps to build this differentiated user experience. And
so, what users have been able to do, whether they have a watch or an iPad
or a phone is move seamlessly between the devices, and that`s very powerful
and I think it`s difficult for others to replicate.

MATHISEN: Let`s get to the question of the stock, which either people own
individually or they own it in their 401ks and mutual funds or an index

The history says that the stock runs up rather dramatically before rumored
big product announcements. That`s what the stock has done over the past
year and over the past couple of months, and then it starts to level off a
little bit. There`s also the argument that says, well, but this stock has
been is undervalued.

Where are you on where this stock may go next?

FLAX: We think that with a to month horizon, the shares remain attractive
and part of that is because the company has been able to build on what
they`ve done by attracting developers. So, we touched on augmented
reality. That is a new area for —

MATHISEN: What is augmented reality? Because for me, reality is fine just
the way it is. It doesn`t need to be augmented.

FLAX: Well, if you think about the physical world and the digital world.
And so, if you were to have a device, if you were shopping for a new sofa
and it would be a show an image of the sofa here, that could help.

If you were repairing jet engines and you had a device that was able to
show you a model of how things might need to look, that could help. So,
there all sorts of use cases many we can cite, but many more that we can`t.
And that is what`s going to be interesting.

MATHISEN: I like to augment my reality and lose 20 pounds so I could see
that, right? Now, look, so basically, you like the stock 12 to 18 months?

FLAX: I like the stock and I think while the shares are likely to remain
volatile, for those with the longer term horizon, it remains attractive.

MATHISEN: Daniel Flax with Neuberger Berman, thanks. Appreciate it.

FLAX: Thank you.

HERERA: Coming up, Wall Street remembers and gives back.


HERERA: It was a day of remembrance as the nation marked the 16th
anniversary of the attacks on the World Trade Center and the Pentagon. In
Washington, President Trump and the first lady observed a moment of
silence. In New York, the New York Stock Exchange and the NASDAQ observed
a one-minute moment of silence to honor the victims of that day.

MATHISEN: Cantor Fitzgerald lost more than 650 employees on September
11th, and since then, the firm has used the anniversary of the attacks to
raise money for charity. So far, the company has distributed hundreds of
millions of dollars.

Michael Santoli spent the day on Cantor`s New York City trading floor.


charity day at Cantor Fitzgerald. The Wall Street firm is donating all
trading revenues to charities that support communities in need with the
help of celebrity entertainers and athletes. Today, President Bill
Clinton, actor Robert De Niro, and football great Joe Theismann handled
trades that added to the $137 million in funds raised by Cantor`s charity
day event since 2002.

Actor Steve Buscemi, a former firefighter himself, set the tone of

STEVE BUSCEMI, ACTOR: It`s all about supporting each other because that
feeling never goes away. I mean, you know, they say time heals and in some
ways it does, but in other ways, that`s just — it`s 16 years that you
haven`t been with your loved one.

SANTOLI: This year, as the country commemorates the catastrophe of 9/11,
the toll of present day disasters was also on the minds of all involved.

Cantor is sending help for residents of Texas and Florida suffering after
the natural disasters of Hurricanes Harvey and Irma.

of a hundred charities, we`re going to fly down 250 volunteers, and we`re
going to adopt hopefully between 5,000 and 10,000 families, depending on
how much money we can raise. The partners and I have committed $5 million.
We hope to raise another $5 million. We`re going to give each family with
small children elementary schools $1,000 each.

SANTOLI: The celebrity traders surprised clients by handling huge orders
for bonds, with several getting into the competitive spirit on the trading
floor. The celebrity guests were also trading too support a charitable
cause of their own.

UZO ADUBA, ACTRESS: You know, this is a day that we have in hold and
remembrance, but I love that Cantor Fitzgerald is doing such a wonderful
thing in making this a day positivity and giving back and putting something
more beautiful into the world so we can remember this day with something a
little bit extra.

KRISTIN DAVIS, ACTRESS: I`d love to be in the city for 9/11 because we all
went through it together and to be able to remember it, but also feel like
we`re still here, we`re strong, we`re going to do something in the memory
of the people that we lost that day. I think that`s incredibly important.

SANTOLI (on camera): Also worth noting, Cantor`s own traders gave up a
day`s pay today, all is part of the firm`s commitment to raise as much
money as possible for communities in need.

For NIGHTY BUSINESS REPORT, I`m Mike Santoli, New York.


MATHISEN: A wonderful commitment that they`ve made and done it every year.

HERERA: Absolutely, every single year.

That does it for NIGHTLY BUSINESS REPORT for tonight. I`m Sue Herera.
Thanks for joining us.

MATHISEN: I`m Tyler Mathisen. Thanks for me as well. Have a great
evening, everybody, and we`ll see you right back here tomorrow night.


Nightly Business Report transcripts and video are available on-line post
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Business Report is not and should not be considered as investment advice.
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