Transcripts For BLOOMBERG Whatd You Miss 20171026 : comparem

Indicated by the supreme court, let us move on. In nairobi tossed Water Cannons and fired tear gas at stonethrowing protesters today. They are protesting todays rerun, saying it is not credible. Many polling stations in opposition areas did not open today because of security concerns. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. Abigail live from bloomberg , were 30dquarters minutes from the close of trade and stocks are declining as the dow is learning with a new record high. The question is, whatd you miss . , microsoft and intel all report. President trump speaking last hour at the white house about the Opioid Epidemic in america. He called it a National Public Health Emergency. We look at the impact its having on the labor market. Ingles be to nigel travis about his companys results in where his thoughts are on wages as we look ahead to next weeks jobs report. Scarlet opioid abuse is now a Public Health emergency. On top of the human cost, opioid abuse is taking an increasingly meaningful impact on the economy, in particular the labor force. Whos bring in Jeff Korzenik joins us from chicago. Youve done some incredible work on this, tallying up the cost, the economic cost. Youve tabulated it at 80 billion a year as the price tag in the United States for opioid addiction, whether lost productivity, health care, or incarceration costs. Midwest. Sed in the to start with, theres a smaller pool of workers to draw from, isnt there . Jeff absolutely. Many of the job openings in critically needed jobs require drug testing and this knocks people out of the pool as well. Its causing bottlenecks in production, its causing firms to grow more slowly than they might, and all this is adding up to greater and greater cost as we move through the economic cycle. Scarlet how do you see Companies Respond to that . Are they requiring more than drug tests . What is the evolution here . Jeff drug testing is often required for insurance purposes, but it really boils down to worker safety. Speaking to one owner of a Manufacturing Company in western michigan who told me he until hisug tested employees came to him and felt they were in danger from a few bad apples within the workforce and asked him to start drug testing. So there is no easy way out of the drug testing hurdle. Joe one of the big themes in the economy over the last decade is the relentless decline in the Labor Force Participation rate. Economists dating debating how much of it is structural or cyclical. Im looking at a chart my terminal showing participation of both men and women. Weve seen a big comeback for female labor force for dissipation rates. For men, its come back a little bit, but not as much. Opioid crisis,e how much would you save his has contributed to this number that has vexed so many economists . Men, its anme age overwhelming influence. Weve noticed noted the work saying 1. 8eger, million prime age males are out of the labor force and thats consistent with the other data would looked at. Longterm fact that unemployment developed because of the weak recovery and finally the incarceration and recidivism cycle in the u. S. Is unlike anything weve experienced in prior cycles. That adds up to a major structural problem in the american workforce. Scarlet lets bring in what dr. Krueger had to say when he spoke with us recently. We need to tackled the Opioid Crisis. A fight, if you can. If you look at the decline in participation, how much of his how much of it is attributable to demographics and how much to the Opioid Crisis . Over halfright the percentage point, around. 6 percent i estimate is due to the spread of opioid medication. Scarlet so that is some sobering numbers we are dealing with. The president taking action today, jeff. What you think is the best way for the government to address the issue . Jeff i think the start was today. We are raising the issue, the president is using the bully pulpit of the presidency as well as the National Public Health Emergency designation just to raise the visibility. As i travel around the midwest and the southeast, im shocked by how many people not only dont realize that this is such a bad problem, but i am truly amazed by the number of people who come up to me after i speak and tell me about just within the past year, their son or daughter having a sports injury and getting a 60 opioid restriction with an automatic refill. There are still doctors overprescribing. Trump alsoesident set this is going to be the generation that instant Opioid Epidemic. Is that possible, and with his target of percent growth, the current influence on the labor market, is that crimping that possibility, and could that really be an influence to achieving that sort of Economic Growth . Itf i absolutely believe is. Its not the only issue, its longterm unemployment, its incarceration and recidivism, but these are intertwined. Longterm unemployment correlates with drug to drug use, which correlates with crime and imprisonment. So they are all caught up together, and we are wasting american productivity through these social ills. I think it can be solved, or we can make a big debt and it, but we have a make a big dent in it, but we have a lot of work to do, given the number people who are abusing opioid. Joe you mention theres a lot of surprise on the part of people about the widespread problem, do you think it is changing as a demographic of the people who are . Addicted . I know that more and more young people are dying of opioid related overdoses versus 2005. As more and more people, as it stops being about a specific demographic, is that awareness being raised . Jeff its absolutely true. Weve been sounding the alarm at fifth third for well over a year. Even in that time, i recognize growing awareness not just through news and other sources, but through personal experience. Some of this is that the stigma once associated with Overdose Deaths that cause those debts to be kept hidden has been reduced, which is a very good thing. So people are becoming more and more aware. What they often lack is the language to speak to their children, to communicate the severity of this. This is not the same as talking about pot or other drugs that are now being legalized. This is really bad news, and its out there and its prevalent. Im not sure that young people yet fully recognize how dangerous these substances are. Thank you for joining us from chicago, Jeff Korzenik. Donuts stillin debating whether it should drop the second half of its name. Will discuss thirdquarter results with nigel travis, next. From new york, this is bloomberg. Scarlet whatd you miss . Duncan is considering dropping nothnuts from its name but of travis says they will always make doughnuts. Revenue topped estimates while adjusted a gift came in short of expectations. Were joined by nigel travis. Good to speak with you again. When it comes to dropping the doughnuts part of your name, is that linked to the fact that doughnuts are not seen perhaps as Healthy Breakfast snacks . Nigel the first thing i would say is that we are testing the twoname into stores in stores. Its a small change. I think it reflects how popular Dunkin Donuts as a brand is. We wont make a decision for a long time. We are certainly not looking to drop doughnuts, as you said. Whole pile ofs a halloween doughnuts in front of me. We are trying to modernize our stores. Dave hoffman who runs Dunkin Donuts u. S. Has got full franchise support. Ourjor part of it is making restaurants more streamlined, making them more efficient, making them easier to operate, improving Employee Satisfaction and as a result of that, guest satisfaction. I have to sam really optimistic about the system in the u. S. , and dont forget, i have to say im really optimistic. We can double in the next 25 years. We have the footprint to grow. That doesnt mean euro see the name donuts disappearing anytime soon. One of the big macro themes a lot of companies are talking the effect ofw is margins on a tighter labor market. What can you tell us from the perspective of your stores with whats happening in the labor market and with wages . Nigel without doubt, the number one problem for our ranch ics beyond anything else is the lack of labor. If you take this part of the country, massachusetts, maine, new hampshire, the average unemployment is 3 . We need to tackle that. We are doing a lot ourselves, streamlining the menu, work and our franchisees to create a better culture. Inare trying to be creative finding employees. Some of our franchisees here in massachusetts have been employing people from puerto rico. But there is a lack of labor out there, and its a big issue. It is something that our franchisees are very concerned about. In fact, we were in washington three weeks ago and our franchisees basically tell the administration they could only find thing like 60 70 of the employees they need, so its a big issue that needs to be tackled. Abigail nigel, and terms of that lack of labor, to what extent is the Opioid Epidemic influencing the lack of labor, and what about immigration . What is the influence their . A couple of things i would say, the Opioid Crisis is clearly a major concern for the country. Weve seen incidences of people overdosing in our stores, so that clearly concerns us. Listening tosting your prior interview about the impact of people not getting back into the labor force. That was very educational for me. Thats something i learned from that. So i think it has some effect, but the Biggest Issue is, there doesnt seem to be enough people. So on the second point, its clear, we talk to the administration that we need some kind of security. Of oureverify in all stores and we were one of the first to use it. We need to find a way to increase the pool of labor and clearly some the things like opioid and immigration could play a part. We need a discussion to decide how to create a labor force so that we can continue to grow and our franchisees can continue to grow. I must say we had a very positive session down in washington when i took franchisees down there. Scarlet what are your thoughts when it comes to the dreamers . Is immigration paying a role in reducing labor force and the availability of labor out there . Any thoughts on how congress tackles the reamers the lemma the dreamers dilemma . Nigel if you ask our franchisees, the first thing we need is some kind of tax reform. We want to continue to stimulate middle income america. We think thats good. We would like to see a reduction in tax rates for our Small Business people. Dunkin donuts and baskinrobbins or about Small Business people. Down to corporate rate 20 is very important, but clearly, the pool has to be tackled. Whether its the dreamers or more broader immigration reform, something that was talked about in a bipartisan fashion a couple of years ago i think needs to be on the agenda starting next year. Forlet thank you so much joining us this afternoon, nigel travis. Abigail as President Trump declares the Opioid Crisis of Public Health emergency, one company and former ceo is being accused of helping to fuel it. Shares of infosys down 18 , as the founder was arrested. Julie hyman is here with the story. Julie he has been arrested today in arizona. He was basically accused of helping to fuel the Opioid Epidemic. Hes accused of doing that by prescribe thes to drug that this company makes. It is a fentanyl based spray designed to combat cancer pain. Ers the allegations have to do essentially with the Company Using different levers, allegedly bribes, to convince them to convince it to be prescribed for more generalized pain indications. Joe its not every day you see billionaires being arrested. Its sort of clear theres a backlash coming, more regulators very concerned about it. Might expect to see fines or Something Like that, but it actual arrest of a 74yearold billionaire is pretty rare. Julie this appears to be the highest ranking person. This does seem to signal the aggressiveness with which officials are going to be prosecuting these kinds of cases and going after what they say are the various parties that have helped fuel the Opioid Crisis here. 34 ,tock is already down even before today. You can see the plunge we are seeing if you include todays action. There are investigations into other companies as well. The u. S. Attorney in connecticut is conducting a criminal probe of produce marketing up oxycontin, one of the name brands associated with the Opioid Crisis. Janssen pharmaceuticals have been sued by various cities and states. So there have been various legal actions, but as you say, joe, this is the one that is associated the most specifically with a person and a high profile person at that. Again, its interesting here that this is a company that relies on this drug alone. Joe you mentioned the stock was already doing badly. There was an 80 stock now below seven dollars. Investor sentiment toward a lot of companies in this space has turned dramatically. Julie specially pharmaceuticals have been rocked by the Valeant Pharmaceuticals situation. Theres been an enormous amount because of talk about drug pricing and whether the administration will come down on that, even though there has not been action on that yet. There has been a lot of discussion on it. As a side note, kapoor is involved in another company, acorn, which has been acquired by a German Company for 4. 3 billion. We had seen the shares dip a little bit today and then come back once there was that reassurance to investors. Interesting divergence. Julie hyman, thank you so much. More coming up, including the three charts that you cannot miss. This is bloomberg. Scarlet breaking news, cbs reportedly in line to buy at. Were just looking at the shares, but theyres spiked have since resumed trading and have spiked on the news. They are is a pop up almost 11 on the date areacvs has been moving through the afternoon. If you pull it up, you will see that it had taken a deep dive in the afternoon on headlines at amazon is getting licenses on pharmaceuticals and that prompted cvs to fall to a session low. It was reportedly in talks to buy aetna. This possible merger, companies trying to join up and become bigger. The reason this is so interesting as well is, when you look at cvs and the tumble it had on the report that there were these distribution licenses, cvs got more than half its revenue last year from its Pharmacy Benefit Management business. If amazon is getting into that business, that would be a source of concern. Recall that at that and umana were supposed to aetna and humana were supposed to have a merger but they did not get approval. Cvs not in the same business exactly, its in the Pharmacy Benefit Management business, so maybe we have a higher shot of getting approval. Also consider that and some anthem last week said it was starting up Pharmacy Benefit Management. You have these businesses that psybeen somewhat individual load, and in some cases they are coming back together they had d. En siloe joe to put in perspective what a mammoth deal this would be, huge and cvs both companies. Julie i think it would be called the vertically integrated company. You so much,k julie hyman. The market closes next. The dowlosing high for jones industrial average. Julie was telling us about that earlier. We have our due out any minute now from amazon, alphabet, microsoft, and intel. Abigail from new york, this is bloomberg. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Abigail u. S. Stocks closing mixed with nine of the 11 major sectors higher, materials leading the way. Im abigail doolittle. Julia is off today. Onpretending in light twitter, i want to welcome you to our closing bell coverage every week day. Scarlet lets begin with the market close as we await the highly anticipated close up amazon, alphabet, microsoft, and intel will be reporting a little later. A nice round number for you, joe. Recordsupposed to be a closing high but im not sure we will get there once it settles. But it is a recovery from yesterdays decline. Some important context going into this flurry of numbers is that a lot of these big tech names have been a little on the weak side lately, not dramatic, but even with these new record highs weve seen them rolling over just a touch, a little bit of anxiety in the likes of amazon and so forth. Something to keep in mind in terms of scarlet we just got the numbers. Third quarter eps, . 52. I need to check that, im not sure we are comparing like with like. Net sales for amazon, 43. 7 billion. ,t does look like the estimate the gap estimate for amazon was for four cents and amazon is . 52 eps. Revenue 43. 7 billion in the estimate was for 42. 1 billion. 56 billionill be dollars, the estimate was for 58. 70 5 billion. Fourthquarter operating incomes outlook, and this is the profit outlook for this quarter, the midpoint does miss the consensus estimate. Itn it comes to amazon, is really the profitability number that anyone f