Making are still dancing in investors heads, following yesterdays disney approached 21st century fox about buying most of its assets. We also told you that broadcomm made an unsolicited massive 105 billion bid for qualcomm, the chip maker. And who could forget recent reports that cvs health may look to do a deal with aetna . The deal talk was enough to send the dow to an alltime high, up eight points at 23,557, and et cetera sixth straight day of gain nasdaq went the other way, down 18 2 3. But what could all of this merger talean for the Broader Market rally . Dominic which did y takes a loo. Reporter it seems theres a new mega merger possibility being talked about every day. The are hosts of reasons why companies are looking towards bigger acquisitions given current market conditions. Companies are seeking greater industry penetration, new geographic markets. Theyre a bit under pressure by shareholders and activists, also the relative ease of financing. Companies have access to credit lines from banks. They have high cash levels on their balance sheets, in aggregate of over 2 trillion among s p companies. Also their stock prices as a buyer are at very high levels. Reporter when companies are already that big, growing their business and their profits gets harder and harder. Thats why buying someone elses business is often seen as a preferable option for using a companys capital. What you really have is Companies Buying growth. They add it on, and that sets a new base for their business, and then as growth slowly comes back, their earnings can really explode. So theres a lot of opportunities. But you have to do your homework. Not every deal is a good deal. Reporter so are there really that many Companies Looking to do these big transactions on a massive scale . According to peterson, theres only been ten announced mergers of 20 billion in size so far today, that compares to 17 last and 22 in 2015. Were also seeing whats on pace to be an overall decline in dollar volume of merger activity. That could mean potential upside for the stock market. We have five or six occurrences where m a declined in one year, the following year prices improved. Reporter predicting the markets is a fools errand. But many experts feel as though even with all the merger activity that were seeing, it doesnt necessarily mean were at a market top. For nightly business report, im dinic chu. So lets turn now to mark luccini to talk about what all that deal activity means for the stock market. He is the chief investment strategist at Janney Montgomery scott. Nice to see you again. Welcome back. Thank you, sue. Is the market overheating . I think suggest its somewhere in between, some companies will be desperate to find growth by way of acquisition. As was mention income the previous segment, the cost of capital is exceedingly low right now. To fund the acquisition instead of using up cash through the credit markets is an option thats available to them. I think more so its indicative of two things. Weve seen an increase in ceo confidence levels thats helping us to embark on a Capital Expenditure up cycle that i think has some legs to last it. I think thats going to be a nice boost for Economic Activity overall. But theres confidence in the sturdiness and the durability of this economic expansion were experiencing at the moment. Ink secondly, its also a function of the fact that were in that Regulatory Environment where we may not see necessarily massive roll back of regulation, just not new regulation imposing on businesses. As a consequence of that, i think the Business Community is finding this opportunity ripe to make bold acquisitions. Election day was one year ago tonight, mark. How far we have come. Are you surprised that the market has taken off the way it has . Well, clearly, weve seen one of the best advances in the first year term of a president in history. So not necessarily because its all attributed to donald trump and his administration. I think a lot of it has to do with the improving economic fundamentals, not only domestically but on a global front. The advances have come a long way in 12 months and valuations are pretty demanding. Its going to take not only continued economic improvement but also i think an administration thats going to be careful about policies as it relates to their activities, helping to understand what it will take to not only continue to foster an environment thats good for the Business Community but maybe even accelerate growth by way of Something Like the Corporate Tax reform package were expecting to see here over the coming months or even weeks. You said the valuations are somewhat demanding. Does that mean that you would not be surprised to se sue, i mean, if you look at most indicators, the market is overbought at this juncture. We may see a correction in time as opposed to in price. But either way, should we see the market go more sideways than up or pull back a little bit because we dont have a fresh catalyst to move stocks in a measured level higher from here, that would not shock me nor derail me from my otherwise bullish position in my belief that were going to see equities continue to advance not only the remainder of this year but well into 2018 as well. On that note,mark, thanks so much, as always, mark luccini with Janney Montgomery scott. There are more than 6 million job openings in the country right w. According to the labor department, thats close to a Record Number and those that underlying demand for workers remains healthy. The report also shows that americans are quitting jobs at a healthy pace, something that could help lift wages. In his first Public Comments as a Federal Reserve official, governor Randall Quarles said the central ban should take a fresh look at regulations, including stress tests, capital holdings, and living wills. Quarles is serving as chair of bank supervision, a position created under dodd frank. In his remarks today he said he would like to see the fed become more transparent especially when it comes to the annual bank stress tests. President trump spent the day in south korea, the first state visit of a u. S. President to that country in 20 years. As Kayla Tausche reports, the presiden reporter it was a day of pomp and circumstance, with serious issues at the forefront, as president moon received President Trump at the blue house, the leader calling on other nations to join them in pressuring north korea to halt its nuclear aggression. Even as President Trump suggests diplomatic efforts are working. I think were making a lot of progress. I think were showing great strength. I think they understand we have unparalleled strength. Reporter President Trumps first stop in seoul, camp humphrey, a military base jointly funded by the two nations, home to 26,000 soldiers an. In the city center, heavy Police Presence to keep demonstrators at bay. Supporters waving american flags. And praising trumps tough talk. Opponents criticizing him for provoking a war with north korea and ramping up military capabilities. We have the greatest military equipment in the world. And south korea will be ordering billions of dollars of that equipment, which frankly for them makes a lot o sense and for us it means jobs, it means reducing your trade deficit with south korea. R says the new sales agreed to by the countries will reduce the trade deficit. That deficit the reason trump is revisiting a fiveyearold free trade deal with south korea. One industry in particular, some y, needs an adjustment. Our biggest problem, quite frankly, with the deficit is the automobile. The koreans are sending more automobiles to the United States than we are sending to korea. This market here is very small. The market in the u. S. Is very big. Reporter after addressing koreas national mbly, trumps next stop is beijing, where hell again home in on trade deficits, the u. S. s largest, and ask china to keep exerting pressure on north korea. Kayla tausche for nightly business rep seoul, south korea. The president makes his way tomorrow to beijing, as kayla mentioned, for a high stakes meeting where hell be discussing trade, market access, and investment with the worlds economy. Yoon is in beijing. Reporter the Chinese Government is promoting President Trumps trip as a state visit plus. The Foreign Ministry said today that the president would enjoy the same lavish dinners, welcoming ceremony, and bilateral meetings as for any state visit, but that the authorities here would add a few onal touches, cozy and casual events so that the two state leaders could continue to get to kno each other personally. The Ministry Says this is res i rey for president is trip to maralago. The expectation is that the two will announce concrete deliverables. Based on the delegation traveling with the president , the deals with center on energy, agricultural products, planes and other equipment. Goldman sach ceo is also traveling with the president and is expected to announce coinvestment of 5 billi in american manufacturing. Many in americas Business Community worry the emphasis on the trade deficit could distract from larger issues they feel are important, like market access, tech transfers and competition in the industries of the future. For nightly business report, im eunice yoon in beijing. Still ahead, a business thats skyrocketing. Reporter im Morgan Brennan in huntsville, alabama. Behind me, defense missiles built by raytheon and ready to be deployed to help counter the growing threat of north korea. Were bringing you unprecedented access into americas Missile Defense system, comi on his trip to asia, President Trump is urging our nations allies to spend billions on American Military gear, including Missile Defense systems. Morgan brennan traveled to multiple cities for unprecedented access to raytheons operations. She went to huntsville,alabama, tucson, arizona, and m reporter tucked behind security gates in the arizona desert, raytheon is Building Three new facilities, to better handle business thats skyrocketing. Raytheon makes missiles, radars, and sensors. Key technology that contributes to americas Missile Defenses. Basically this is all spacecraft that once its released, it has to maneuver going over 10,000 miles an hour to get to the target and hit in a ver specific place to take out a Nuclear Warhead thats coming in. Reporter that little spacecraft sits inside a rocket buried underground in an alaska or california. Its a crucial piece of the homeland missile defen by boein place to counter an intercontinental balste attack. The grong threat of such an attack is fueling demand for Missile Defense, benefiting Companies Like lockheed martin, boeing, and raytheon. Were definitely seeing a very Strong Demand signal for increases in Missile Defense just because of the threat situation in the world today. Reporter there are four different types of missiles defense. Boeings homeland system, raytheons patriot, lockheed martins terminal High Altitude dependence or thaad. Raytheon is storing its missiles here before theyre sent off to u. S. And japanese warships in the pacifi to help defend against a potential north korea attack. These structures are filling up and more orders are likely to come. Experts say demand is broad based acrs all systems. Issu ushering in a missile renaissance. Missiles defenses are ramping up in terms of the interest for them, with the United States, our partners and allies and among our adversary. Theres a lot of air defenses, a lot of Missile Defenses out there. You see a lot of really big buys, not measured in millions but in billions of dollars. Reporter u. S. Lawmakers are looking to boost the Missile Defense budget. President trump requested even more funding this week. Allies are buying these big ticket systems as well, including saudi arabia, poland, japan, and now sweden. As Government Spending increases and the technology continues to evolve, its driving growth for those in the business of keeping america and its for nightly business report, im Morgan Brennan in huntsville the drug maker valian says strength helped shares pop 17 to 14. 10. Mallinckrodt is warning that its sales of its top selling drug are declining. The Pharmaceutical Company reported weaker sales of its costly multiple sclerosis treatment d said pressures from payers resulted in unfilled prescriptions. In the latest quarter the companys revenue disappointed. Shares fell 35. 5 to 20. 11. Despite hurricane disruptions, Royal Caribbean grew profits at a more robust pace than the street was expecting. Sales were higher than excted. The cruise operator said it is seeing Strong Demand for 2018 bookings. Royal caribbean shares made waves. Get it . Tapestry, the Company Formerly known as coach, reported revenue in staple sore steals that fell short of estimates, blaming the miss on hurricanes. It did note it has returned to growth so far this quarter. Earnings topped expectations and the company said it is on track to meet its full year outlook. Shares of tapestry up a percent at 41. 93 bars. After the bell, the Online Real Estate Company zillow reported results ahead of street estimates. The company said it saw a rise in the in your name of users. Shares initially higher in the extended session but they finished the regular day down 2 to 39. 97. Snap recorded after the bill. Its results struck a different tone entirely. The Parent Company of snapchat saw sales for the quarter fall well below estimates and said daily active users, a key measure, grew at slower than expeed rates. Narrowly beat expectations. Shares were pressured in after hours, they ended the regular session up 2 at 15. 12. The activist investor bill ackman lost his proxy battle with adp, the 50 billion Payroll Processing term. Ackman failed to gain any b seats after shareholders voted to reelect all of its directors. But despite todays loss, ackman says he wants to see the company be successful. Were rooting for them. We hope theyre successful. If they are successful, the stock price is going up a lot. If they disappoint, well get in there and be able to make the necessary changes to make this a much more profitable business. That the business of shareholder activism. We have won and lost proxy c conte. One of the tools we use to influence a company. Ackman had called adps management inefficient and blamed them for the companys poor performance. But after todays results, the ceo of adp says its time to move on. I think its the largest margin of victory of any large cap proxy contest ever. And so i think that would hopefully be the message to bill that its time to move on. I think that the Pension Plans and other investors that put money into this fund and charge him and pay the exorbitant fees he charges and give up 30 of the upside will be well served to deliver a message to him that he should move on and focus on something else. Shares of adp rose today and are up about 9 so far this year. Apple has denied accusations it moved its operation from ireland to an offshore tax haven to avoid taxes. The denial follows the release of the called Paradise Papers which we told you about yesterday. Those leaked documents reportedly show that the company shifted key parts of its business to the isle of jersey as an offshore tax haven. According to a statement, apple is the largest taxpayer in the world, paying 45 billion in Corporate Income taxes over the past three years. Coming up, own a car . Why some say that may very quickly become toyota apparently hitting some roadblocks in its biggest market. Japans largest automaker said sales in north america dropped to threeyear low. The company struggling to sell cars. As a result its increasing incentives. Its also dealing with a shortage of its popular rav 4 crossovers. But good news, toyota upgraded its profit forecasts on expectations of a weaker yen. Are you ready to hail a ride in a selfdriving minivan . Theres new Service Starting up that will give people rides in advance where there is no one in the front seat. Phil leb. Reporter get ready for Driverless Cars that take you around town. Or at least around the phoenix area. Waymo, formerly known as googles selfdriving car project, will soon start offering rides to the public in selfdriving advance where there is nobody in the front seat. A lot of studies, if you put them all together in one metaanalysis, about 50 of folks, it seems, are ready to experience a true driverless ride. We think thats a great show of confidence in the technology. We think getting people in our cars will help increase that confidence. Reporter waymos Ride Sharing Service will directly compete with uber and lyft who pioneered the market. In fact that he dominate it, with uber giving an estimated 70 of the rides in the u. S. , while lyft driver provide 25 . Others have the remainder of the market, including bmws reach now service. Meanwhile, gms Cruise Automation is developing selfdriving vehicles, as automakers and Tech Companies rethink how we get around. Even a former executive for General Motors believes it may not be long until most of us give up buying or driving a car. It is absolutely inevitable. Humandriven vehicles are on their way out, except at automotive country clubs and offroad dude ranches. Reporter after testing its selfdriving vehicles over 3 million miles on public roads, and millions more in simulation, waymo says its mini advance are t vans are not only safe but ready for paying stomers. Youll see this over the next several months beginning that same sort of service in other parts of the u. S. Reporter at least initial, waymos selfdriving mini vans will have a waymo representative sitting in the third row to answer any questions or in case theres a problem. But over time it will eventually be either the passenger or passengers sitting all alone with no one behind the steering wheel. Phil lebeau, nightly and phil says he would happy ride in onef those Driverless Cars. In his report you heard the former gm executive bob lutz say human driven vehicles are on their way out, essentially ending the Auto Industry as we know it. Is bob lutz right, rebecca . Hes right in that i think eventually we will get there. His timeline is very, very aggressive, though, for seeing no cars on the road, because y in the next ten to 15 years, and then that gives five years for people to get rid of their cars, to scrap their cars, and that leaves 20 years. I think its right in that we are definitely heading in that direction. But actually getting there, i think is a very aggressive timeline. So where are you on the timeline in terms of what the progression will be . Well, you know, sue, were already starting to see more vehicles with Autonomous Vehicles or selfdriving featur, automated Driver Assist systems, lane keep assist. Youll be driving down the road and the car will actually move you back into your lane if you start drifting. So were already thats called level 2 in Autonomous Vehicle lingo. And so were already start to see more and more vehicles moving into that direction. But getting to level 5, which is what bob is talking about, where no steering wheel, no brakes, youre basically in just a pod, i equate that to getting to, you know, the top base camp at everest and not actually getting to the very top of everest. Its reay going to be difficult moving past and get full autonomous podlike structures. Ive got a lot of questions but let me start with a couple of them. My sense is that people actually ke to drive. Absolutely, tyler. I started out my morning in a 2 million bugatti. Name dropper. I know, right . Thats a not so humble brag. That was a spectacular experience, im not going to lie. So its absolutely a joy to drive. I lived for two years in saudi arabia and i wasnt allowed to drive. So there is this element of enjoyment, the freedom that you get from driving. Now, people will say, thats because youre old, and young people dont want to drive. But were actually still were continuing to see an evolution in terms of younger people. My second question is, i have some of those autonomous features on my car, lane assist. But i know better than those things. I know that i can get over, and theyre beeping at me, and it gets me frustrated, rebecca. Absolutely. I was on a test track, and they actually had to turn them off because the steepness of the hill as we were driving up, the car would stop just as we were coming out of the straightaway, because the hill was so steep. So theres actually theres a ton of stuff still to work out. Rebecca, thank you very much. Ill keep you posted. Rebecca lynnland. United airlines is bidding farewell to the boeing 747. The double decker plane is widely credited with making air travel more affordable for millions of people. Uniteds final 747 flight took off from san francise toen. Honolulu, complete with cabin crew dressed in uniforms from that decade. Deltas final flight is scheduled for next month. The passing of an era. It definitely is. That does it for us tonight, im sue herera. Thanks for joining us. Im tyler mathisen. Have a g this is bbc world news america. Funding of this presentation is made possible by the freeman foundation, and kovler foundation, pursuing solutions for americas neglected needs. Planning a vacation escape that is relaxing, inviting, and exciting is a lot easier than you think. You can find it here in aruba. Families, couples, and friends can all find their escape on the island with warm, sunny days, cooling trade winds, and the
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