Well, that big tax bill is all set now. Republicans releasing tonight their final signedoff draft of the most sweeping tax rewrite since 1987. And it appears tonight that some lastminute dealmaking flipped some no votes to yes, securing what is evidently enough gop support to turn you tell 503page overhaul into law. The holdout, marco rubio of florida, got on board when the childcare tax credit was expanded. Tennessees bob corker did the same, saying he believes the bill was a once in a Generation Opportunity to help the economy. Tax reform . Some say it isnt exactly that. But what it is for sure is a huge 1. 5 trillion tax cut with much of the benefit flowing to us corporations. And on that, the major stocks indexes rose to record highs. So whats whats out . Ylan mui knows it all, shes covering the story from capitol hill, where i think youve pitched a tent the past few days, ylan, good evening. Reporter its been some long days, and long nights as well, tyler. Republicans just filed that legislation. This is a major achievement for them, a major victory for that party. Rate is 21 . Of the top line it would take effect in 2018. For individuals, they would still have seven tax rates. The top rate would be lowered to 37 . It would affect individuals who make more than 500,000 or couples who make more than 600,000. Also the deduction for mortgage interest, if you own a home, that will be allowed for loans up to 750,000. And for pastthrough businesses, theyll be allowed to take a deduction of 20 . As you alluded to, there was some drama here on capitol hill. Senator marco rubio initially threatening to vote against the bill. But then republicans expanded the Child Tax Credit in order to get him on board. Also a surprising flip, senator bob corker of tennessee, who had been the lone republican in the senate to vote against a previous version of the bill. He said he now supports it. Now were hearing from Susan Collins of maine who says that she applauds the changes in the tax bill. A little short of saying she actually will vote for it but that she does seem supportive of the version of the bill that was just filed. Now, this looks like it will sail to passage. The house is going to vote on this legislation on tuesday. The senate will follow afterward. All indications are the president will be ready to sign it. Ylan, thank you very much, ylan mui, go get some rest, you have another week ahead, im sure. What will the final version of the tax bill mean for you and your investments . Andrew friedman is the principal at then update. He join us to discuss. It looks, andy, like the senate and the house have threaded a needle here to keep people happy, to come in under that 1. 5 trillion number that made them able to pass it with just simple majorities. Thats true. And youve really encapsulated what was going on here. Under the senate rules, this legislation couldnt lose more than 1. 5 trillion over ten years. The Corporate Tax cut, which is the centerpiece of this bill, dropping the tax rate from 35 to 21 , costs about 1. 5 trillion over ten years. So they got what they needed, which was to cut taxes on corporations, which the Trump Administration at le believes will expand the economy and help workers as well. Everything else in bill was a tradeoff. For every dollar of taxes cut, there had to be a dollar of taxes increased to stay within that number. So you point to, and i think most people agree with you, that this is mostly a big tax cut for businesses and large corporations. Yes. The individuals get some cuts as well, low and middle income, but those tax cuts sunset a few years from now. Thats right. In order to make this all work, and to keep it within the parameters, there wasnt a lot left over for individuals. So there is a small tax cut for up and down the income line for individuals. But those had to expire to make the numbers work. The key was to keep the Corporate Tax cut permanent. The administration said that was necessary because businesses have to plan many years in the future. Individuals, they said, well, when the time comes, we think congress will extend those cuts as well. But we have to leave those in the wind, if you will, in order to make it work now. One of the gnarlyist areas in those Corporate Tax cuts has to do with the International Side of the business. Number one, being able to bring back some of the profits that are held over seas, trillions of dollars there, and also going to a different kind of regime that the administration and the gop believe will cause more companies to stay domiciled in the u. S. Explain. And do you agree . Yes. Let me just talk for a second about whats going on there. Right now, as of today, before this new law, we have a very unusual tax system. If your u. S. Based company, you set up a subsidiary overseas to sell your product. So cocacola sets up a company in france to sell soda. The earnings of that subsidiary arent taxed in the u. S. , as long as they remain with the subsidiary overseas. But if that subsidy repatriates the earnings back to the u. S. Parent company, right now we impose a 35 tax. That means that companies are leaving their earnings overseas to avoid that tax. And thats presumably not as good for our economy. So what the tax bill does, it does two changes here. First, with respect to future earnings overseas, from the beginning of the year on, those can be brought back now without any tax whatsoever. Big benefit for multinational companies, bring back future earnings. With respect to existing earnings, those will be brought back at a lower tax rate, say around 14 or so. That brings in a little revenue for the government that they werent going to t anyway, and it also brings the money back here. Andy, thank you very much, appreciate the explanations. Andrew friedman with the washington update. Thanks, tyler. On wall street, the dow reached its 69th record close of the year, the most since 1995. The nasdaq and the s p 5 closed at alltime highs as well. The final numbers, the dow jones indust gained 143 points to 24,651. Nasdaq added 80. S p 500 rose 23. The dow and the s p 500 now have logged four straight weeks of gains. And all of the indexes were up this week. Investors do like the idea that companies will get to keep more of their profits under the gop tax bill. And as Andrew Friedman was just saying, multinationals will get to bring back earnings stored overseas at extremely favorable rates. That begs the question, which sectors d benefit the most from the change in the Corporate Tax code . Dominic chu did some digging for us. Reporter if youre wondering what kinds of Companies Might benefit the most from potential tax reform legislation that cuts Corporate Taxes, check out these industries. The folks at Goldman Sachs take a look at e s p 500 and the sectors within it and looked at who pays the most in taxes effectively. So lets take the number ten into the spectrum here, the ones that pay the most in taxes. Possibly beneficiaries if taxes get cut. The bigger beneficiaries. The highest taxes are paid by the energy sector, 35 effective rates. Telecom, 33 . Industrials, 32 . Utilities, 31 . Consumer discretionary, 30 . These are fiveyear median average effective tax rates. Take a look batch. Consumer staples, 30 . Number four, financials, 28. Number three, materials, 27. Number two, health care at 26 . And then the sector in the s p that pays the least in terms of taxes overall on average, the technology sector, at only 24 . So if youre looking for the outsize beneficiaries of possible tax cuts, its the ones that already pay a lot of taxes right now, thats energy, telecom, utilities and industrials, that side of things. As for some of the stocks that could benefit, goldman has a basket of 49 names they call their high tax basket, the ones that pay the most in terms of effective tax rates. Among the names on that list, phillips. Jb hunt, 38. Zions bank corp. , 35. Thats a sampling of the kinds of stocks were talking about. As investors look towards tax reform and how to play it, some of the beneficiaries, if taxes get lowered, could be the ones that are on these lists here, guys. For nightly business rep im dominic chu. And still ahead, if youre in a rush to find a rental, maybe a Td Ameritrade will start offering Bitcoin Futures on monday, just one week after they debuted on the cboe. To trade you must have a minimum balance of 25,000. Thats more than what the cme requires. Td ameritrade has the largest activity of any online brokerage. The president of the chicago fed is concerned about the low level of inflation in the u. S. Charles evans says thats why he voted against raising Interest Rates at the most recent fed policy meeting. Inflation has been below the Central Banks 2 target for much of the economic expansion. Evans and the president of the minneapolis fed were the two dissenters at that last meeting. In an unusual move, the vice chair of supervision for the Federal Reserve wil recuse himself from matters related to wells fargo. Randy quarles says he has repaid a business line of credit with the bank and sold Company Stock he owned. Quarles wants to avoid a potential conflict of interest and adds that his decision is voluntary, not legally required. Today is the last day you can sign up for Health Insurance under the Affordable Care act. A shorter Enrollment Period and a reduced Marketing Campaign will likely result in fewer enrollment this year. The final numbers for the federal exchange wont be known until next week at the earliest. Figures from the states that run their own marketplaces could come even later. If you are a parent, you probab worry about the time your kids spend playing videogames. But as an emerging area of now, it is looking at whether the effects in some cases can be used to treat certain conditions. Eg terrell has our latest story reporter these arent your typical drug developers. Instead of petri dishes and bre this team is programming videogames as potential medicine. My prefrontal cortex feels very exercised. We want this to be on the proverbial shelf next to pharmaceuticals. Reporter they hope the games can be prescribed to treat conditions from adhd to depression. The Company Reported results last week from a Clinical Trial in adhd. The study showed that the game improved kids attention and inhibitory control. The results showed us that pretty clearly we can have a Significant Impact on attention function. Repor dr. Adam gosali has been working on the idea for a decade at his lab at the university of california, San Francisco. The original hypothesis was if you could challenge your brain at this high level that activates the prefrontal cortex and its network with the rest of the brain, you could have improvement in other aspects of cognition like how we give attention. Reporter currently Treatment Options for adhd include behavioral therapy and drugs, a market that generates about 4 billion a year. Experts say new options would be welcomed, as long as theyre validated. The idea of a child sitting down and playing a game is remarkable and would very much kind of change the landscape. But i would want us to kind of look at it from a skeptical lens. Reporter the Company Plans to file for fda approval early next year. Working in its favor, fewer serious side effects than traditional drug treatment. The main issues reported in this study were headache and frustration. Game which couldnt be shown in detail as the studies are ongoing, arent easy, as i learned when i tried out some demos. For nightly business rep im meg terrell. Shares of csx got derailed s. Companys ceo takes a medical leave. Thats where we begin tonights market focus. The Railroad Company announced its ceo, hunter harrison, will take medical leave because of complications from a recent illness. The coo, jim foote, will serve as the acting chief in the interim. Shares fell 7. 5 on the news to finish the day at 52. 93. Starting next year, sirius xm radio will pay more for the music it plays. The copyright royalty board raised the satellite radios rates to 15. 5 of gross revenues for the next five years, up from 11 percent now. Investors in sirius xm tuned out. Shares dropped 5 to 5. 37. Adobe reported record revenue. The Software Maker posted revenue of 2 billion, thats up 25 year over year. The ceo attributed the growth to continued strength of its Digital Media business which people are now really focused on ensuring that the engagement that they have with customers, whether that be through the internet of devices, whether that be through Digital Screens and retail stores, whether that be through autonomous cars, is a personalizing for age and experience. Weve identified that as one of the big Growth Opportunities for us. Shares of adobe rose 1. 5 to 177. 51. After the bell tonight, activist investor Elliott Management disclosed a stake in Cloud Services provider akamai. Shares spiked following the news adding on to a nearly 2 gain at 57. 76. Our market monitor has names that he says could benefit from any potential tax cut. It is his first time as a market monitor. Hes eric irvin, president and ceo of reality shares. Mr. Irvin, great to have you with us. Dont be nervous, its just your first time, were friendly, we dont bite. What do you think about this tax cut and how its going to help corporations . Just broadly speaking. Just generally, its more cash to the company, which means more cash to the shareholders in one way or another, whether it comes in the form of dividends or whether it comes in the form of reinvestment back into the business. So its a great thing for shareholders for sure. If you think about it in general, you know, whether we get it from the repatriation where we have a trillion dollars overseas in repatriated potential dollars, or in just overall growth rates of these companies growing, you know, because right now the market is a little stretched. So we need to look for growth right now. Lets get to your picks, shall we, leading off with mastercard. Me why you like it. Were a dividend shop, we like to focus on companies that can grow those dividends significantly. Mastercard is an excellent grower in that category. They grew their dividend almost 53 per year for the last five years, and their return on equity is off the charts, its 73 roe. They have almost 5 of free cash for every dividend they pay out. We feel like thats the kind of company that can grow their dividends quite a bit. Theyre really getting involved in this Blockchain Technology and really, that could be a massive wave of innovation for them as well. Were excited about that. Lets move to your second choice in the tech area, would be texas instruments. Also a strong company, good, high Free Cash Flow dividend to ratio, almost two dollars of cash flow to every dollar of dividend, 25 Dividend Growth year over year. Texas instrument is a one of these sleepy Tech Companies that we dont think about too much. But really, its a strong, strong stock thats innovating in a number of different categories. Also kind of in that blockchain arena as well. Were just keeping an eye on that technology. A lot of people love nvidia and youre one of them. Yeah, and nvidia has been in our portfolios for now a little over a year. And it made it into the cut this year. Every year we rebalance our portfolios. Nvidia is one of those stocks that as you buy it, you wonder, am i paying too high a price. When you dig down and look at the numbers, these growth rates are just off the charts. 81 Earnings Growth last year, averaging 50 Dividend Growth, return on equity 44 , 4 of free cash for every dividend that they pay. Its not only a growth stock, its a growth stock thats a high quality earner. If youre going to pay up in a multiple, do it with a company that can grow its earnings. Nvidia is one of those. Youre in san diego. Its 27 and snowing in new york. I envy you. Eric is with reality shares. Appreciate your time today. Thank you, you bet. If you need to see a rental t ready to show it to you. Y be a a california rental Management Company is offering home tours at a moments notice. Dont expect anybody to be there when you get there. Diana olick explains. Repor sharehold woman is a millenial. Shes used to doing everything on an app. But this was a first. Nice to meet you. Reporter she took a rental home tour with a robot. A robot with a rental yep, even in the bathroom. Its the latest high tech offem zheen place, a San Francisco based rental Management Company. What our robots really do is reduce the musing period and cut down vacancy times for owners and make it an easier process for tenants who can go from literally seeing a place that they like to renting it out in a manner of minutes. Reporter they developed the app for the robot. There is a human agent on the other side. But the robot can also provide the customer with Realtime Data on the neighborhood, amenities, and rental trends. It also has an application built in to apply on the spot. It was fun. It was definitely weird. Reporter weird, perhaps. But efficient. Ive gone to be more used to having to do everything through apps and technology. Its kind of nice to make it convenient, i didnt have to wait on anybody else, i was able to do it on my own time frame. Reporter the Technology Allows people who might just be driving by a home to see it immediately. Of coue it only works for rentals because theyre usually empty, that is, nothing to steal. But it does raise the question of safety for the potential renter, walking into a home alone. We ask you to quickly take a picture of your i. D. , and then we instantly verify who you are and check your background. If it all comes clear, we send you a unique code that you can then enter into our smartlock. It didnt even feel like there wasnt somebod there, because she was in the room with me. Reporter zen place currently offers the robot rental service in california but will soon put it in rental homes in five other states, including new york and florida. If it catches on, it could open the door to more robots in real estate. For nightly business rep im diana oli to read more about robot driven home tours, head to our website, nbr. Com. Coming up, feeling the force. The big money behind and in front of the latest box offi heres a look at what to watch next week. Housing will be in focus with the release of existing and new homes sales as well as housing start numbers. Fedex reports on thursday. Friday is the deadline for lawmakers to pass a funding bill to prevent a government shutdown. That, folks, is what to watch next week. Spacex successfully launched a refurbished rocket. The companys previously flown falcon 9 along with a used cargo cab seoul are headed to the International Space station, the first time its been allowed by the government. Reusing space hardware is the crux of spacexs business model. Its at the center of the new space race, since of course it helps lower co spacexs founder is elon musk, also the ceo of tesla. The last jedi stormed into the box office today. And the Company Behind one of the most successful movie franchises ever could see an enormous payday. Julia boorstin fe. Reporter disneys star wars th grossed 45 million in north american theaters in thursday night previews. Thats the second biggest thursday Night Opening ever, after only star wars the fork awakens two years ago. The box office benefitted from 1300 fan and marathon events last night and today the movie is expanding to three times that number of theaters in north america. This puts the last jedi on track to bring in over 200 million in north america this weekend, which would make it one of the biggest opening weekends ever. Bolstered by rave reviews including a 93 positive critics rating on rotten tomato. It will definitely stay on top of the box office into january. Thats what weve seen previously with star wars movies like rogue one and especially the force awakens. I think what it says for disney is, you know what, this star wars brand is very strong and you can continue investing in it year after year. Reporter reporter it should be even more valuable to disney once its acquisition of fox, announced yesterday, goes through. Fox owns the rights to the original Star Wars Trilogy plus the prequel trilogy. Disney ceo bob iger says the company is looking forward to reuniting the star wars movies. Disney could mine characters from those first six films. Star wars is the biggest toy brand ever with 3 billion in total license Merchandise Sales projected this year. Further growing the brands appeal to multiple generations of fans. All of those adults that are taking their kids are the adults that grew up with this franchise, with the original trilogy. And that is what these new films are harkening back to. So those adults have kids, theyre taking their kids, getting their kids excited about it. It just continues the life cycle of star wars. Reporte plus the original six films could be valuable to the two star wars lands opening in 2019, disney investing over 1 billion in each of them. Plus having all the star wars movies will boost the appeal of the disney branded streaming app launching in fall of 2018. For nightly business rep im Julia Boorstin in los angeles. I wonder if the last jedi will really be the last jedi . Whatever. Thats nightly business rep fo tonight, everybody. Thanks for joinius. Im tyler mathisen. Have a great weekend, everybody, and we will see 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 tradwi
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