Ges new chief executive is making a lot of changes. Hes giving an activist investor pushing for cost cuts a seat on the board. And late friday it was announced that several top executives are a new chief Financial Officer is on her way in. The stock closed at a twoyear low amid concerns about what the changes could mean for the companys upcoming earnings due out next week. So far this year, the stock has lost more than and thats not good news for a lot of investors who either own it outright, or in a mutual fund or retirement account. Morgan brennan fakes a look at the changes shares of General Electric tumbling today after the industrial giant announced sweeping leadership changes. Among the biggest, the departure of cfo sorenstein replaced by transportation head jamie miller. In march, the latest example yet of the strategy taking shape under new ceo john flannery. But the move stunned wall street. Especially since flannery had supported borenstein at least until recently. Analysts worry it could signal more bad news. Hes viewed as being able to roll up his sleeves with john flannery, the new ceo, to effect change. So i think theres a concern here that with him leaving, that maybe the underlying earnings of the company is a little worse than expected. But the changes are also overshadowing another development. Activist investor will finally join the board. Trian owned nearly 20 of the company when it invested 2. 5 billion. Trian has lost money. But today it said it continues to, quote, believe that ge represents an attractive longterm Investment Opportunity with signifi the stock has tumbled by 25 this flannery has begun cutting costs ahead of his first major meeting with investors next month, a meeting that hell outline his strategy and update the forecasts. What the investors are looking for from flannery is a realistic view of 2018 and beyond. Also, the view that 2018, again, we will see some sort of reset. But that will come along with, again, a more streamlined, more costconscious ge. And we could see growth off that reset. But ge isnt the only industrial behemoth facing investor pressure. Honeywell has also been reviewing its segment, including its biggest business aerospace. That company is reportedly poised to announce the spinoff of some assets as soon as this so lets turn now to mike bailey for more on the executive shakeup at ge, and what he thinks it coul he is director of research at fbb Capital Markets and owns ge shares. Welcome, pleasure to have you here, mike. Thanks for having me. Give me a grade, if you will, on what mr. Flannery has done in terms of shaking up the executive ranks, and also, theres an activist investor now on the board. What do you think . Yeah, so in terms of grades, we would give ge about a bminus in terms of the new management, some of the shakeup. You might say, why not a higher grade . Were trying to be fair. Flannery has done a fairly good job, showing nice moves early on. But hes an insider. We think ge really needs some sort of a major shakeup. We would have given them a higher grade if they had an expert from the outside. Having said that, what else has happened. We like the new cfo. We think she adds agenda diversity. In terms of an outsider, she spent nearly two decades at other companies. We think thats the attitude that can maybe shake things up more at ge. With trian coming in, we think theyve been involved in the last couple of years, we now think is a pretty good time, potentially hitting on all cylinders, with a new ceo, cfo, activist on the board. Lets talk about one of the reasons you said you were overweight the stock. Youre comfortable owning it because in part of the 4 dividend. Is the dividend safe . We think it is safe. If you look historically, ges done a pretty good job keeping their dividend and actually growing it. They cut the dividend during the great recession. You could argue a lot of companies did. At that time ge was very different. It was almost a bank. Many banks were in difficulties, so ge cut their dividends along with other Companies Like that. We think at this point a cut is fairly unlikely. Now, theres a couple of ways to look at that. Some folks have argued that one of the things ge might do is break up. So there could be a way you could see sort of a selfdividend cut. Lets say, for example, ge shaves off parts of the business that arent doing well. And that new business, perhaps they do tram, or dividend there, before the bulk of the company. We can get into some of the pieces that are doing pretty well. We t keep the dividend as is. In your view, is the company more valuable whole . Or more valuable broken up . We would break it up. So basically, there are three really nice pieces at ge. A health care business, aerospace, and power. Think of utilities. Thats about threefourths of the business. Thats doing pretty well. If you look at the stock this year, its off more than 25 . You could argue that the street is already basally giving up on the other piece of business thats struggling. We would look at the company, take a hard look at the financials and say, okay, youve got three nice businesses here, lets them, grow them nicely. The rest of the business, perhaps let someone else do a turnaround there. We think that would be one way of improving things for shareholders. Well keep an eye on that. Thank you so much, mike. Mike bailey with fbb capital partners. Slide in ge shares a drag on the broader mark the bond market was closed on this columbus day holiday. The Dow Jones Industrials fell to 22 points. Nasdaq off 10 and s p 500 dropped 4. Some markets say it was taking a markets were a bit muted today. But no shortage of catalysts for investors to watch in the week ahead. Earnings season will kick off this week with citigroup and jpmorgan reporting on thursday and bank of america and wells fargo rounding things out on friday. As usual, the big banks starting earnings season. Third quarter earnings are expected to rise about 4 over last year. Financials are set to suffer the lowest growth rate of any sector, actually earnings could be down 6 for the financials. Its large by because of the impact of hurricanes harvey and maria on the insurers and reinsurers. Oil and gas, Equipment Services companies, and exploration names again, apache, all of which are rising. On the economic front, well get minutes from the federal reserves latest meeting and data on retail sales and consumer sentiment. A lot of people watching the in. The drama in washington is heating up, gauging what the feud between the president and senator co it increases everybodys reservation. I think it does make it some. But we never have a weekend without a surprise out of washington. Keep an eye on the solar stocks. The Trump Administration is set to sign a rule of withdraw from the clean plant power tomorrow, obamas centerpiece bill to fight climate change. Bob pisani at the new york stock exchange. With tax reform on the line, investors are watching that discord in d. C. That bob just mentioned. Ayman javers reports from washington. President tru began the day extending an olive branch of sorts, a trip to his golf coue for lindsey graham. President trump has called graham a nutjob and a disgrace in the past. On this columbus day, the two men spent several hours together. All that comes after a weekend in which the president engaged hi a twitter feud with senator on twitter, the president wrote, senator bob corker begged me to endorse him for reelection in tennessee. I said no. And he dropped out. Said he could not win without my endorsement. He also wanted to be secretary of state. I said no thanks. Hes also largely responsible for the horrendous iran deal. The senator fired back writing, its a shame the white house has become an adult day care center. Someone obviously missed their shift this morning. Later senator corker gave an interview to the New York Times in which he said the president is running the white house like a Reality Tv Show and said he could be putting the nation on a path to world war iii. All of this coming at a time when the president will need republican votes on the hill for the ambitious tax package and controversial Immigration Reform proposal. If attacking members of your own part in the vicious way, its a strategy ive never seen work. I dont see it working today in washington. There are always distractions. Ordinarily when youre in the white house and youre working on your daytoday issues, the distractions are coming from the outside rather than from the inside. Th. But officials here at the white house say the administration hasnt really lost any votes on the tax agenda, or the immigration plan, because corker and the other senators that the president has insulted this year will vote the right way for their constituents, whether or not theyve been in a feud with the president. For nightly business report, ayman javers at the white house. Expectations on wall street were high that the Trump Administration would be able to get a number of its priorities through congress. But so far, that hasnt exactly played out. And the president frustrated by Congressional Republicans inability to move on health care, said over the weekend that hes open to cutting a one or twoyear deal on that topic with democratic rivals as a way to kickstart reform much the nations system. In response, senator Chuck Schumer said he was willing to improve the existing Health Care Delivery system, but not repeal and replace ob on immigration, another major part of the president s agenda, the white house is playing hard ball, making a number of demands in exchange for any deals to protect young undocumented immigrants commonly known as dreamers. According to the New York Times, the president is insisting on a border wall. Hiring more border agents, tougher laws for those seeking asylum, and denial of federal grants to sanctuary cities. The democrats were quick to reject this. So how will all of the discord in washington from hard ball on immigration to no Health Care Deal to insulting tweets impact tax reform and the stock market. Jeff bush is a partner at the Washington Update and now here to discuss. What do you make of this, jeff . It is, as tony said, unusual to see the distractions coming from within, not from without. Youre absolutely right. The gop has had this problem throughout 2017. Tax reform is a little bit unique compared to the Affordable Care act for repeal and replace effort. I think youll see more togetherness on the tax reform issue compared to the other issues theyve dealt with thus far. What about health care then . Health care was a different issue. When you have health care, you have republican senators in states that expanded medicaid, republican governors in the same states, all of which were saying we have citizenry who will lose coverage if we change the expansion of medicaid. So is it taking away of a benefit. Whereas tax reform if properly positioned from a marketing perspective should be a broadbased benefit to the middle class and across our country. What do you make of what ayman javers suggested is the sort of internal view in washington, namely, that the gop members who may squabble with the president personally, whether its mitch mcconnell, or lindsey graham, or now bob corker, when push comes to shove, they will go along with tax reform because they see it as good for their constituents. Generally i agree with that. That was the same philosophy that the republicans thought they had with the Affordable Care act repeal and replace. However, it got caught up in e thor issues. Its a complex animal, but theres more of a cohesive thought around the broad benefits of a tax reform. Even within some moderate democrats as well. How much do you think, though, all of this squabbling in washington is delaying the agenda . I mean, have you put an analysis together at all, jeff, about, like when we might expect some progress . Because it keeps getting derailed and pushed back. It does. Thats a great point. We were quite surprised that the republicans having had eight years to talk about the repeal and replace effort didnt have the replace effort on the table ready for republican president to sign. I think that was a missed opportunity. If they could have gotten out of the gates a little faster with that issue, wed be much further down the road as it relates to tax reform. Right now, our best estimate, based on everything were looking at, is that were a lot likely to get tax reform done in 2017. But its slightly more likely than not that well see moderate tax cuts this year, and then revisit the reform issue in 2018. Is the market thinking everything is all aok, or is it being maybe a little naive . Senator corker said we may be leading the way on a path to world war iii. That would mess up your portfolio, jeff. It would surely mess up everyones portfolio, without a doubt. But i think going back one step, the reality is our country has been on this path for some time. The republicans have drawn this process out. Thats not unusual in the president s first year as they get their footing and so forth. But i think the market initially, there w from an idea of a republican president. But i think that played out pretty much by may and the market is based more on fundamentals right now. I think its a little bit fragile, looking for opportunities to make tweak here and there. But i think overall, its still on a fundamental trajectory from now on. Thank you, jeff bush, with the Washington Update. Thank you. California signs into law a bill that the drug industry is wildfires are ripping through wine country. The governor of california has declared a state of emergency in napa, sonoma, and yerba counties. Firefighters try to stop the advance driven by strong winds. And californias governor jerry brown approved a measure today that will give the States Residents more information on whats driving Prescription Drug prices. As meg terrill reports, that bill was surrounded by controversy. R the price of Prescription Drugs is a Major Campaign issue during theyre getting away with murder. Pharma has a lot of lobbyists, a lot of power. Reporter since then, its been states enacting laws around the cost of drugs. The latest is california whose governor jerry brown today signed a drug pricing bill into law. Californians have a right to know why their medical. Especially when the pharmaceutical profits are soaring. Reporte the law doesnt control the price of drugs. It requires Drug Companies to provide notification, 60 days before increasing the price of their medicine. The requirement applies to more than 16 over a twoyear period of hikes. And justification for the hikes. And mandates that Health Insurers report information about drug spending. Transparency will provide information, but the hope is that by providing that information, making it public, the companies will be less likely to raise the prices in the ways that they have. Reporter price increases of more than 16 in two years are not uncommon, according to the university of pittsburghs professor. We just saw one drug today for spsoriasis had a 30 increae over the past two years, and 12 this year. Its happening more and more. Reporter the law focuses on the drugs list price. Thats one reason the pharmaceutical industry railed against it. With Industry Groups pharma saying, quote, theres no evidence that sb17 will lower drug costs for patients, because it does not shed light on the large rebates and discounts Insurance Companies and benefits managers are receiving that are not being passed on to patients. Its californias second major attempt to address the price of medicine. Last year, a valid initiative, proposition 61 sought to tie the drugs in california tied to the department of veterans affairs. After a strong lobbying effort, prop 61 failed to pass. A similar version of that bill is expected to be voted on in ohio this fall. Legislation has also been passed recently in vermont, maryland, new york. It contributes to a recent rally in biotech stocks. For nightly business report, im meg terrell. Amazon is reportedly getting serious about taking on youtube, and that is where we begin tonights market focus. Amazon is working toward creating more advertising friendly initiatives to compete against youtube. One program could potentially give advertisers more data on what viewers are watching and doing online. Amazon is up today. And walmart wants to make online returns easier. The retail giant said customers will be able to use the walmart app to speed up the process, cutting down return time to 30 seconds. Shares of walmart up about 2 on the session to 80. 53. Honeywell reportedly will spin off the noncore asset and create at lieb two new publicly traded reuters said the company will resist calls by one of the influentia investors to spin off the space unit. The subprime lender one main is reportedly in talks to sell itself in a deal that could be worth about 4 billion. The wall street journal said one main is said to be in advance talks with a number of interested parties, although there is no guarantee of the deal. One main shares jumped 10 to 31. 82. Bank of america reiterated its buy for apple. Analysts said the company will surge under president trumps tax plan, which would make it less expensive for apple to bring money back to the u. S. From overseas, thanks to a lower repatriation tax rate. Apple shares were up nearly half a to 155. 84. Alphabet received an experimental license from the fcc to create a network of balloons that would help restore Wireless Phone services in puerto rico after hurricane ma pri a wiped out much of the service on the island. Alphabet shares down a fraction to 992. 31. Coming up, televisions may be getting bigger, even viewing on small phones is on the rise. First, how commodities and currencies fared today. The bond market closed for heres a look at what to watch tomorrow. The largest price ever, Procter Gamble shareholders will vote whether