Transcript: Nightly Business Report – December 11, 2017

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

speeds ahead in Congress, creating a lot of unknowns as Americans make
their year-end tax plans.

What`s next? The Dow and the S&P 500 close at records, but could the Feds
be the biggest risk to the rally next year.

Rethinking medicine. An experimental, new way to treat blood disorders,
and new hope for those who have exhausted all other options.

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

Good evening, everyone, and welcome. I`m Sue Herrera. My partner, Tyler
Mathisen, is off tonight.

New highs for the Dow and S&P 500. We`ll have more on that in just a

But we begin tonight with the push for tax reform. The Treasury Department
today said the new tax bill will generate $1.8 trillion in new revenue over
10 years, thanks to increased economic growth. That`s more than
projections from the non-partisan Joint Committee on Taxation.

As the numbers get crunched, lawmakers are trying to get the final bill
across that finish line by resolving differences between the House and
Senate versions. Those differences include the number of tax brackets, the
limit on the mortgage interest deduction, and medical expense deductions,
among other things. The negotiations come just weeks before the end of the
year, a key time for tax planning, making it also a very confusing time for
many Americans, but there are some potentially money-saving strategies you
can employ.

Sharon Epperson joins us now with that tonight.

It`s always good to see you, Sharon.


HERERA: So, let`s start, first of all, with year-end tax planning. It`s
always important, but more so this year, right?

EPPERSON: More so this year. I mean, the tax-saving strategies that we`re
going to talk about are some of the best gifts that you can give yourself,
but especially now because some of the key things that you`ve been doing
may change significantly. And one of them is if you itemize your
deductions. The standard deduction is likely in both versions of the bill
to increase, nearly double to $12,000 for single payers, or single filers I
should say, and $24,000 for married couples filing jointly. That`s a big

And so, if you itemize some of the deductions that you mentioned, that`s
going to be a change you want to take a look at now.

HERERA: You`ve — I have a cheat sheet, so I know that she`s got some
really important tips here on what you can do. So, what should, as
taxpayers get to the end of the year, what should they be looking at? What
can they do to be proactive against what`s going to be for some cases,
anyway, an expensive change in their life?

EPPERSON: Yes, one of the key things that people itemize when they do
itemized deductions is they take a look at their property taxes and state
and local income taxes. There could be big changes there. So, one of the
things you may want to do is pay your property taxes now for next year, at
least pay some of them, and you may also want to consider paying some of
those state and local income taxes as well, if you can pay some of that.

Get a head start in prepaying that. That could, if there are changes, if
they do come down the pike, you`ve already paid some of that.

HERERA: And I see you say boost charitable deductions, because that
bracket is changing as well.

EPPERSON: Well, again, because you have to itemize in order to get that
charitable contribution deducted. And so, you want to be make sure that
you boost those now, do more of those. Another thing people often forget
about are miscellaneous expenses, job hunting expenses, unreimbursed work
expenses. Those could go away. So, if you can take more of those before
December 31st, do that, document it, and use it to write it off on your
2017 taxes.

HERERA: And obviously, they`re going to try and reconcile those two bills.
But regardless of that, you know, you`ve been with us in the past where
you`ve had some really tried and true things that you can do, regardless of
the tax changes, to really, you know, benefit yourself going into the year.
Tell us about that.

EPPERSON: Exactly. Well, look at your investment portfolio. Look at
taxable accounts. There you can do something called tax loss harvesting
which we`ve talked about, where you sell your loser investments and you
replace them after a short time with another investment, so you maintain
your asset allocation, but you can do that up to $3,000. And that`s a
really great way to kind of get, offset your capital gains by taking some
of these losses.

What you want to do with your tax-deferred accounts, and this is the
greatest gift you could give yourself, max out your 401k. So many people
do not do that, but you can do $18,000, up to $18,000 or $24,000 if you`re
50 or older. And if you are self-employed, this is one thing I want to
tell who are self-employed, freelancers, look at the solo 401(k), $54,000
you can put into a solo 401(k) as long as you set it up before December
31st. You don`t even have to put all of that money in by December 31st.
You just have to set it up. You have until the tax filing deadline in
April to put in the full contribution.

HERERA: That is a great tip.


HERERA: I`m sure a lot of people don`t know that.


HERERA: Sharon, as always, you`re the best.


HERERA: Thank you so much.

EPPERSON: Thanks so much.

HERERA: Sharon Epperson.

A new survey from the National Association of Manufacturers says that
optimism is at a 20-year high and that the recent pickup in confidence has
to do with the legislative in Washington.


that government right now is focused on reducing the cost of doing business
in the United States so that we can invest more, we can hire more, and we
can provide better pay and benefits for our workers. That`s good news for
manufacturers, and they are very excited about the possibilities ahead.
Tax reform is right front and center of that optimism.


HERERA: The manufacturing industry is also warning that failure to pass
tax reform could jeopardize economic growth.

Energy investors and executives in that industry are looking closely at the
tax bill to see if there will be winners and losers within the sector.

So, Jackie DeAngelis has that story for us.


isn`t finished yet, but it looks like it will be mostly good news for the
energy industry.

First off, the drillers are going to see support. The bill keeps drilling
cost deductions for corporations. That helps them recover investments.
So, President Trump`s support for big oil and gas will continue to be a
theme next year. Nuclear energy will see benefits, too. The $6 billion
nuclear production tax credit would be extended, helping companies that are
already building nuclear facilities.

And the electric car provision? Industry insiders think when all is said
and done, it will stay. It`s been a vital part of getting those businesses
off the ground and will continue to draw investors and consumers.

The impact on clean energy, however, is a little uncertain. The House
version of the bill would partially or completely roll back credits for
wind and solar projects. The Senate version doesn`t do that, but it does
add a separate new tax that would discourage multinationals from moving
profits and jobs offshore.

Because of the way that many energy companies are set up, it`s believed
that could cancel out the benefit of the renewable credit.

renewal sector versus natural gas. I think we had the House bill, which
effectively cut back the wind production tax credit, even though the phase-
down was already agreed to, but then we have the Senate bill which
preserves the tax credits but actually doesn`t allow tax equity to receive
the same benefits, and it`s not as attractive for tax equity. So in both
cases, we have wind and solar being hurt.

DEANGELIS: It`s still too early to tell exactly how the finished bill will
look and if it will pass, but tax reform won`t be the only thing that will
influence the energy sector in 2018. Volatility in oil prices already have
the S&P energy sector down more than 7 percent this year, underperforming
the broader market.



HERERA: A rise in energy shares helped to lift the markets to start the
week. Washington, a talk of tax reform and a Fed policy meeting later this
week were also on investors` radar. The Dow Jones Industrial Average added
56 points to 24,386. The NASDAQ was up 35 and the S&P 500 rose eight.

So, let`s turn now to Michael Farr to talk more about what potential tax
reform and rising rates might mean for the stock market. He is the
president of the management firm Farr, Miller, and Washington.

Good to see you, Michael. Welcome back.

good to be here with you.

HERERA: All right. We`re starting a new week. It looks like tax reform
is getting closer, but we also have the Fed meeting this week. What are
your expectations?

FARR: Well, I think that we will certainly see this quarter of a point
hike out of the Fed this week. They`ve been broadcasting and I think
they`re going to be very consistent with that.

You know, I think one thing, Sue, that people seem to be missing in the
broader view of things is that the Fed really has reversed course. I mean,
nobody really seems to be too bothered by it because everybody is very
optimistic, you know? So, the Fed is on a tightening course. I think it`s
a big deal.

HERERA: What about the market itself? You say this is a week or month
where we`re starting to see growth move to value.

FARR: We`ve seen that, right at the beginning, first past couple of weeks.
We`ve seen the FANG stocks gave back. We`ve seen the Russell 1000 and the
growth stocks and the NASDAQ kind of come lower and the Dow surge much
higher as a lot of the consumer staple stocks and more defensive stocks
sort of started to advance, particularly the banking stocks did very well

So, there seems to be a risk-off kind of a trade. The past couple of days
risk has been back on. It certainly was today. But I think that probably
this trend, as things get a little dicier here, a little more uncertain as
we see whether the government gets past its second shutdown date here
towards the end of the month, I think you could continue to see that trade
continue to be established as people look for more solid balance sheets,
rather than just the momentum.

HERERA: And you mentioned the Fed. How much of this rotation is due to
the expectation of higher interest rates?

FARR: That is a great question, and we`re going to have to see if the Fed
really delivers on it. But there seems to be — I get worried when I see
the spread between the two-year and the ten-year treasury now at 56 basis
points. This yield curve is very flat, and a flat yield curve, or even
when short rates go higher than long rates, that always is connected with

So I`m nervous that the Fed might repeat what it did in the 1930s, go a
little bit too strong-handed and put us back in recession. I don`t — I
worry a lot about these things, particularly when you report in the
previous segment that optimism is at an all-time high.

HERERA: Exactly.

FARR: Which tells me investors aren`t worried enough for me, Sue.

HERERA: Well, you do the worrying for us, Michael, then you can come back
and tell us how you`re feeling. We`ll talk to you —

FARR: I`d love to be wrong.

HERERA: I know, right? Michael, thank you, as always.

FARR: Thank you, Sue.

HERERA: Michael Farr with Farr, Miller, and Washington.

Well, it may be a new era for investors who could now easily speculate on
whether bitcoin`s price will go up or down. Bitcoin futures contracts
began trading on the CBOE (NASDAQ:CBOE), marking the first traditional
trading platform serving the currency.

Bob Pisani has more.


anticipation, bitcoin futures finally began trading and not surprisingly,
the price went up. Bitcoin futures on the CBOE (NASDAQ:CBOE) exchange were
trading north of $18,000, up about 20 percent.

Now, volume was on the light side, only about 4,000 contracts had traded by
the end of the first full day of trading. That`s a value of maybe $60
million, $70 million. Pretty small potatoes, but it was orderly, and that
will certainly increase.

So, what`s next? More participation, more volume in the futures contract
will go a long way toward making bitcoin a little more respectable.
Volumes are light because many brokers either don`t allow trading of
bitcoin futures or greatly restrict trading.

That`s because a lot of brokers and investors want to see how this thing
trades for a while before jumping in. But if trading remains relatively
orderly, I`m sure more will soon. Now, that`s good news. More
participation will likely tamp down some of this volatility, and will also
introduce an element we haven`t seen yet, short sellers.

There are a lot of people who think bitcoin is either an outright fraud or
wildly overvalued, but it`s been hard for them to bet against it, but these
bitcoin futures are priced and settled in dollars, so it`s relatively easy
to short. You don`t red bitcoin, you just need cash.

With prices rising fast, shorts will be cautious, but I anticipate they
will appear in the near future.

Also helping, the CME will also begin trading futures next week. NASDAQ
early next year.

The bottom line, it`s still early yet, and while bitcoin itself is still
unregulated, the appearance of a futures market may go a long way toward at
least making this crypto-currency a little more transparent.

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


HERERA: Still ahead, new breakthrough for blood diseases and new hope for
those who need treatment.


HERERA: A number of biotech stocks made big moves today on new
breakthroughs in blood disorders and blood cancers. Executives and
researchers are presenting their findings at a key conference in Atlanta,
and Meg Tirrell is there talking to them.


for certain cancers and blood diseases change the way we think about
medicine. Instead of being taken every day, week or month, many of these
therapies are designed to be administered just once. That new research was
on display today and over the weekend at the American Society of Hematology

It draws attendees from the worlds of both medicine and Wall Street and
sent some biotech stocks flying. One was bluebird bio with presented
results on its experimental treatments for blood diseases and the cancer
multiple myeloma. That`s a one-time treatment that uses the patient`s own
immune cells to fight cancer, and the results, though, early offer hope to
those that have exhausted all other options.

NICK LESCHLY, BLUEBIRD BIO CEO: It`s really exciting in the sense that in
myeloma, we`re seeing something that hasn`t been seen before,
transformative ability to help patients that are really considering
hospice, and what`s sort of how to get their affairs in order. And then
they get this one-time treatment here that is really fundamentally changing
the potential of their lives.

TIRRELL: Bluebird and its partner Celgene (NASDAQ:CELG) are now starting a
larger trial that they hope will support regulatory approval of the
therapy. The conference also brought updates in the treatment of
hemophilia, where companies are now testing gene therapy that aims to fix
the underlying cause of the disease in just one treatment.

Biotech company BioMarin soared on this update at the conference, while
Spark Therapeutics sank. Its update disappointed investors, though the
results were in just four patients.

JEFF MARRAZZO, SPARK THERAPEUTICS CEO: Keep in mind, these are patients
that today have to take infusions on a regular basis chronically for the
rest of their life, and I think gene therapy has tremendous potential to
potentially give patients a single dose and not only eliminate those
excessive bleeds that they suffer from, but also eliminate the need for
those chronic infusions.

TIRELL: Industry leaders also addressed political issues like drug
pricing, a key question for these treatments that are administered just one
time. They may carry higher price tags but offer the potential to avoid
longer-term treatment and cost. Also on business leaders` minds, tax
reform. Many said it would provide a boost to their business.

JOHN COX, BIOVERATIVE CEO: We`re happy to pay taxes in the United States,
but we`re paying a very high rate relative to other companies. So, seeing
the tax rate come down to 20 percent or 22 percent is — that`s meaningful
for us because we can then put even more money into R&D.

MARK ALLES, CELGENE CEO: I hope it gets done. I think it does get done.
For Celgene (NASDAQ:CELG), it will actually put us in a position to use a
lot of our offshore cash that right now, like a lot of multinational
companies, is a little parked overseas and we don`t have the flexibility we
otherwise might.

So, it`s good thing for America and it`s great for Celgene (NASDAQ:CELG).

TIRRELL: Against an uncertain political backdrop, 2018 will bring more
updates on these new approaches to how we think about treating disease.

For NIGHTLY BUSINESS REPORT, I`m Meg Tirrell in Atlanta.


HERERA: Two major hospital systems are reportedly in merger talks.
According to “The Wall Street Journal”, Ascension and Providence St. Joseph
Health are discussing the possibility of combining. Together, they would
create the largest U.S. owner of hospitals, with 191 hospitals in 27 states
and more than $44 billion in annual revenue.

This report follows CVS`s agreement to buy Aetna (NYSE:AET) and
UnitedHealth recently adding to its group of urgent care clinics and out-
patient surgery centers.

Is it likely that we`ll see more consolidation in the health care industry?

Brian Tanquilut joins us now to discuss that. He is the health care
services analyst at Jefferies.

Brian, welcome. It`s nice to have you here.

evening, Sue. Thank you.

HERERA: Why are we seeing this type of consolidation and these types of
deals being inked right now?

TANQUILUT: Yes, I think what`s happening is that the health care system in
the U.S. is evolving. We`ve seen some mergers, for example, in the non-
profit hospital space prior to today`s speculation on the Ascension deal.
And I think players are getting bigger as the landscape changes, and
frankly, as we start seeing a slowing down of utilization trends for health
care services.

HERERA: You also make the point that a number of these hospitals are
highly levered. They have a lot of debt.

TANQUILUT: That`s right. So if you look in the public company space, and
you`ve got community health care, you`ve got Tenants Health, these are
fairly levered companies. And so, what we`ve seen is they`ve been selling
hospitals, and we`ve seen companies that are also public, such as HCA and
Universal (NYSE:UVV) Health look for deals and take advantage of these
emerging opportunities. So, yes, these companies have to pay down debt,
and that they`re doing that by selling some hospitals.

HERERA: But is it strategic? I mean, I would assume that they would take
a look at different markets and make a strategic deal, rather than perhaps
go outside of their established markets.

TANQUILUT: Yes, that`s a really interesting point, sue. I still believe
that health care is a local business, you know. So hospitals try to gain
leverage and market power by being deep and wide in specific cities. And
so, as we look at HCA, for example, they`re big in cities like Nashville,
Denver, Houston. That`s how you gain leverage with insurance companies.

So, a lot of these publicly traded hospitals, the way they look at strategy
is they`re trying to broaden their scope of services in specific cities.
So, that`s how deals are getting done nowadays.

HERERA: Do you anticipate any regulatory or government scrutiny of these
deals as you get major players? I mean, we just mentioned this is going to
be one of the largest owners of hospitals in the country.

TANQUILUT: Yes, it`s a very good question. So, in the past, we`ve seen
the FCC get really strict when it comes to local hospital mergers. So,
perfect example, in Louisville, Kentucky, a few years back, we saw them
block a deal where three hospitals were trying to merge.

And I think that going back to my point earlier, deals are going to get
scrutinized on a local basis, so you know, obviously, they don`t want one
hospital having 30 percent or 40 percent or 50 percent share of beds,
right? So, I think that these deals will get through.

Now, in the Ascension/St. Joseph`s deal, if this happens, you know, this is
a national deal. I don`t think that there`s much geographic overlap
between Ascension and St. Joe`s. So, I think this is a deal that probably
will get approved by the FTC.

HERERA: All right, Brian. So interesting to talk with you. Thanks for
joining us tonight.

TANQUILUT: Thanks, Sue.

HERERA: Brian Tanquilut with Jefferies.

Boeing (NYSE:BA) launches an $18 billion share buyback, and that`s where we
begin tonight`s “Market Focus.”

After the bell, the aerospace giant said it would launch a new $18 billion
program which will replace its existing one. The company also raised its
quarterly dividend by 20 percent to $1.71 a share. Shares were initially
higher in after-hours trading but finished the regular day down almost 1
percent to $283.16.

The billionaire investor Carl Icahn is nominating four directors to Xerox`s
board. A regulatory filing revealed a current Icahn-appointed director
resigned, a move that now allows Icahn to submit new nominations. Icahn
said major changes need to be made at that company to stay competitive.
Xerox (NYSE:XRX) said it would consider the recommendations. Shares closed
unchanged at $29.59.

HERERA: Morgan Stanley`s investment management arm reported an 11 percent
stake in Shares of overstock have soared this year on its
investment in businesses focused on bitcoin`s Blockchain technology. The
stock soared again, up 22 percent, $55 even.

And Comcast (NASDAQ:CMCSA) (NYSE:CCS) is dropping its bid for 21st Century
Fox`s entertainment assets. Disney (NYSE:DIS) is still said to be
negotiating an offer with Fox. Comcast (NASDAQ:CMCSA) (NYSE:CCS), the
parent company of CNBC, which produces this program, saw its shares
initially rise in after hours. They also ended the regular day up 1
percent to $38.44. Meanwhile, shares of 21st Century Fox were little
changed in after hours and ended the regular day up a percent to $33.66.

The southern California wildfires are relentless, causing billions of
dollars in damages. Firefighters are struggling to contain them, and new
evacuations are being ordered.

Jane Wells reports tonight from Carpinteria.


it was safe to breathe again, the Santa Anas kicked up ferociously on
Sunday, injecting new life into what is now the fifth largest fire in
modern California history. Over 230 acres across Ventura and Santa Barbara
counties have burned in what`s called the Thomas Fire. That`s more than
350 square miles, larger than all of New York City. One death has been
attributed to the fire, and it`s the first time in recent memory that a
wildfire is still destroying homes and forcing new evacuations one week


WELLS: Mario Cardona was forced to leave his home in the beach town of
Carpinteria. The fire has so far destroyed around 800 structures and
18,000 homes remain threatened.

ROBERTA LETHINEN, CARPINTERIA RESIDENT: We started to kind of pack the
China a little bit, a little bit of some of our water and favorite coffee
mugs. So, you know, it`s interesting to see the different layers of
frustration you go through or panic, that type of thing.

WELLS: The fire moved into the wealthy enclave of Montecito, home to
multimillion-dollar estates. Celebrity residents like Oprah Winfrey, Ellen
DeGeneres, and Rob Lowe tweeted out concerns or updates.

Sixty-four hundred personnel from 12 states have come out to fight this
fire. Many of them have staged here at Carpinteria High School, underneath
the hill s where the flames have been slowly making their way down. Also,
there are 27 helicopters up today.

On Sunday, there were 29 helicopters. Each helicopter`s only allowed to
fly seven hours. All 29 flew seven hours.

Kelsey Bleeker watched the fire trucks line up in front of her house this

KELSEY BLEEKER, CARPINTERIA RESIDENT: It`s been pretty scary, raining ash
and, you know, the flame is threatening all night.

WELLS: There has been no significant rain here for 250 days, but at some
point, the rain will come, the winds will end, the rebuilding will begin,
and perhaps investigators will learn the cause of one of the biggest fires
California has ever seen.

For NIGHTLY BUSINESS REPORT, Jane Wells, Carpinteria, California.


HERERA: Coming up, ratings may be in decline, but the value of the
sporting industry continues to score a touchdown.


HERERA: Verizon (NYSE:VZ) is paying billions of dollars to stream
professional football games on mobile devices. The largest U.S. wireless
carrier gains premium content, but it`s also giving something up, making
this deal look a lot different from the last one.

Julia Boorstin has the story.


continues to grow. Despite ratings declines, Verizon (NYSE:VZ) is doubling
down on football, paying over $2 billion to the NFL over the next five
years. That`s about double what it paid in its last deal. This deal
expands streaming from phones to any mobile device, but perhaps most
notably, now subscribers to any mobile carrier, not just Verizon (NYSE:VZ),
can access games on Verizon`s platforms, including Yahoo (NASDAQ:YHOO)!
Sports and AOL (NYSE:AOL).

Verizon (NYSE:VZ) giving up the exclusive mobile access it had in its last
deal to chase mobile ad dollars.

LOWELL MCADAM, VERIZON CHAIRMAN & CEO: We`ve been moving very heavily into
digital through our oath properties, Yahoo (NASDAQ:YHOO) and AOL
(NYSE:AOL), and to go to Yahoo (NASDAQ:YHOO) Sports now via your mobile
device and to be able to watch any game, pre-season, regular season,
playoffs, Super Bowl, it`s something nobody else offers.

BOORSTIN: And for the NFL, which has been struggling with declining
television ratings for the second straight season, this deal with Verizon
(NYSE:VZ) helps the league reach a broader audience.

ROGER GOODELL, NFL COMMISSIONER: We want to make sure that whatever we do
is complementary with our network partners. We think this is reaching
consumers that aren`t actually watching on television. They`re looking to
watch on other devices, and we want to sure that we`re there. That`s part
of the changing television landscape and the media landscape that we need
to be in those places.

BOORSTIN: The NFL`s growing value to Verizon (NYSE:VZ) is part of a larger
trend as traditional media platforms and Internet giants, including Amazon
(NASDAQ:AMZN) and Facebook (NASDAQ:FB), look to secure rare content that
fans want to watch in real-time.

A new PWC report projects the North American sports industry will grow over
3 percent annually to nearly $79 billion by 2021. Media rights are the
fastest growing part of the business by far, far surpassing ticket sales
and merchandise. And a number of sports deals are coming up for
negotiation. Twenty-five regional sports deals are expiring in the next
five years, and in 2021, ESPN`s contract with the NFL expires.

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


HERERA: And that is NIGHTLY BUSINESS REPORT for tonight. I`m Sue Herera.
Thanks for joining us. Have a great evening. We`ll see you tomorrow.


Nightly Business Report transcripts and video are available on-line post
broadcast at 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) 2017 CNBC, Inc.


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