Javers, John Harwood, Sharon Epperson, Susan Li, Phil LeBeau, Kate Rogers
ANNOUNCER: This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and Sue Herera.
SUE HERERA, NIGHTLY BUSINESS REPORT ANCHOR: Price spike. Oil surges to its highest level this year. But a meeting this weekend could determine whether the climb continues.
Top rated. The one pickup truck that earned high marks in a tough crash test and the other one that didn`t.
Tax survival guide. Still haven`t filed? We have some last minute tips to get your return in on time.
All that and more tonight on NIGHTLY BUSINESS REPORT for Tuesday, April 12th.
Good evening, everybody, and welcome. I`m Sue Herera. Tyler Mathisen is off tonight.
A rumor and a rally. Oil prices touch new 2016 highs on reports that Saudi Arabia and Russia reached a deal to freeze output. Neither the Russian nor the Saudi oil ministers confirmed the story but if true, it would be the first step in curbing production that has resulted in a glut of oil worldwide, created chaos in certain stock markets, hurt commodity dependent economies and triggered massive layoffs. The hopes of a deal sent prices up 4 1/2 percent to more than $42 a barrel.
And that rise in oil lifted stocks. The Dow Jones gained 164 points to 17,721. The NASDAQ added 38. The S&P 500 was up 19.
Jackie DeAngelis takes a closer look at the oil rally and whether those historic low prices may soon be a thing of the past.
JACKIE DEANGELIS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Today`s spike in oil prices based on optimism that ahead of the event in Doha on Sunday, produces will come to some accord about a production freeze. In fact, a Russian news agency out with some headlines today, saying that the Saudis and Russians agreed in principle on a freeze ahead of the event.
The data has been on the calendar for about a month, but the skeptics point out that Saudi Arabia said it won`t freeze without Iran joining in. And the Iranians have said they planned to ramp production to freeze sanction levels.
So, what happens next? Difficult to say but the excitement was enough to push crude to a key level that may point to even further gains.
JOHN WATSON, CHEVRON CHAIRMAN & CEO: The wild card is what will OPEC do and the producing nations, and will there be some collaboration by those nations to limit increases in supply or reduce supply? And that can affect prices. You`ll see speculation around that in the short run and ultimately in those meetings. But, ultimately, it`s going to come down to a supply and demand.
DEANGELIS: One camp says there won`t be a deal. This is clearly buy the rumor, then sale the fact. The other camp says there`s event risk head and we could see $50 oil.
For NIGHTLY BUSINESS REPORT, I`m Jackie DeAngelis.
HERERA: Low oil prices had been keeping inflation in check. And they were one of the reasons why the central banks inflation targets were not being met -- a major factor when deciding whether to raise rates.
Today, the president of the Dallas Fed says he doesn`t expect the Federal Reserve to increase interest rates this month, but June is a very real possibility.
(BEGIN VIDEO CLIP)
ROBERT KAPLAN, DALLAS FEDERAL RESERVE PRESIDENT & CEO: The move in December, I think, was the right move, but I think we`re going to have to be slow and patient. It doesn`t mean standing still. And I think we`ll make another move sometime in the not-too-distant future, if GDP recovers in the way I expect.
(END VIDEO CLIP)
HERERA: Rob Kaplan also said he`s not too concerned about the slow economic growth that we saw in the first quarter. He expects the economy to grow just under 2 percent for the year.
While some experts expect the U.S. economy to chug right along, the International Monetary Fund paints a dimmer picture. The IMF cut its growth forecast not only for the U.S. but also the world, and highlighted the potential disruption to the global economy if the U.K. votes to leave the European Union.
(BEGIN VIDEO CLIP)
MAURICE OBSTFELD, IMF CHIEF ECONOMIST: A lot of countries not only in the E.U. and U.K. but also globally have built up their business models based on the assumption that Britain is a member of the E.U. So, this would certainly be disruptive.
(END VIDEO CLIP)
HERERA: The organization also warned of persistently slow growth and developing economies.
Boeing (NYSE:BA) has open talks to sell airplanes to Iran. If an agreement is reached, it would be one of the highest profile deals between an American company and the country since the sanctions were lifted.
Michelle Caruso-Cabrera has more on this untapped aviation market and the challenges that remain.
MICHELLE CARUSO-CABRERA, NIGHTLY BUSINESS REPORT CORRESPONDENT: Iran`s fleet of commercial jets is one of the world`s oldest. After decades of economic sanctions, many are more than 25 years old. So, modernizing that fleet is a priority for Iran, which has a population of 80 million and pent up demand for travel after years of isolation.
Iranian officials have said they expect to buy 400 or more new planes in the coming years, making Iran one of the world`s few untapped markets for jet makers. In January, Iran announced a deal with Boeing`s top competitor, France`s Airbus, to buy 12 jets. The list price, $27 billion.
U.S. companies have been slower than some of their European counterparts to do deals in Iran. But now, Boeing (NYSE:BA) joining GE, which sends the head of its oil and gas business to Iran last month, Boeing (NYSE:BA) still faces at least two major hurdles. It`s still difficult for Iranian companies to get loans for Western banks, and also, any deal needs final approval from the U.S. government and it may not include the technology needed to make parts locally. That`s something that could touch raw political nerves here at home as well.
For NIGHTLY BUSINESS REPORT, I`m Michelle Caruso-Cabrera.
HERERA: What does one of the most famous financial whistle blowers think of the Panama Papers leak?
Eamon Javers spoke to him to find out and it`s probably not what you think.
EAMON JAVERS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Bradley Birkenfeld is the most significant financial whistleblower of all time. So, you might think he`d be cheering on the disclosures in the new Panama Papers leaks. But today, Birkenfeld is raising questions about the source of the information that is shaking political regimes around the world.
Birkenfeld, a U.S. citizen, spent years working as a banker in Switzerland and turned over an enormous volume of information to U.S. authorities. For his trouble, he earned himself two years in the U.S. prison and $104 million reward from the IRS.
In an exclusive interview today from Munich, Germany, Birkenfeld called in to question the unknown source of the leak of the Panama Papers.
BRAD BIRKENFELD, SWISS BANK WHISTLEBLOWER: The very fact that we see all these names surface that are the direct, quote/unquote, "enemies of the United States". Russia, China, Pakistan, Argentina and we don`t see one U.S. name. Why is that? Quite frankly, my feeling is that this is certainly an intelligence agency operation. The CIA, I`m sure is behind this, in my opinion.
JAVERS: Birkenfeld has no proof of his allegations and the fact is, there are some American who is have been swept up in the controversy although know names as prominent as we have seen elsewhere around the world.
And, of course, David Cameron, an important U.S. ally, has been embarrassed in all this as well. Still, Birkenfeld says this is case of selective disclosure of offshore data.
BIRKENFELD: If you`ve got NSA and CIA spying on foreign governments, they can certainly get into a law firm like this. But they selectively bring the information to the public domain that doesn`t hurt the U.S. in any shape or form. That`s wrong. And there`s something seriously sinister here behind this.
JAVERS: For NIGHTLY BUSINESS REPORT, I`m Eamon Javers in Washington.
HERERA: To read more about the UBS whistleblower and to revisit the series that Eamon did for us last year, head to our website, NBR.com.
Tax reform is the talk of Wall Street and Washington. And it`s a big issue on the campaign trail.
John Harwood spoke exclusively to Congressman Kevin Brady (NYSE:BRC), the man in charge of the writing the nation`s tax code, who said reform needs to happen, but it won`t be easy.
JOHN HARWOOD, NIGHTLY BUSINESS REPORT CORRESPONDENT: Do you agree, by the way, that tax reform can only be down with buy in for both parties?
REP. KEVIN BRADY (R), TEXAS: I think the end of the day it will be bipartisan, maybe not at every step in the process, as we lay this out. But at the end of the day, the major changes in American government almost always require buy in for both parties.
HARWOOD: Could you envision a tax reform that you could go along with that had many elements that you like that did not decrease the top rate?
BRADY: That would be difficult to accept because I think that holds back investment, both by business, small businesses and by families.
HARWOOD: Because there are some conservatives who are arguing that in the environment that we`re in now, that conservative tax reform ought to focus on things other than the top rate.
BRADY: I`d have to disagree and here`s why, besides businesses investing. I mean, individuals, after they make that dollar, they have three choices. They can spend it. They can save it, which is good as well. But they can reinvest it back to the economy.
And earners, not just -- not just high earners, all along the scale, do that. I want to encourage families and individuals to do more of that. And so, on that side of the ledger, let`s look at those pro-growth ideas.
HERERA: John Harwood joins us now from Washington.
Always good to see you, John.
The congressman said that he wants tax reform, but what kind of reform, specifically is he talking about?
HARWOOD: Well, Sue, there`s several layers of it. There`s the international tax reform. What`s needed to prevent those corporate inversions that both parties have criticized so much? That`s a more limited goal they have been talking about doing something about this year, but it looks difficult.
More broadly than just international tax reform, there`s corporate tax reform itself, trying to get the 35 percent rate down to where it`s more competitive with countries around the world resolve our worldwide tax system as of -- compared to, say, a territorial tax system. But then, there`s finally individual tax reform and Brady (NYSE:BRC) says he wants to do all of those. It`s just very tough.
The bigger your ambition, the tougher it is to achieve it.
HERERA: Yes. That is quite an aggressive agenda. So, what does history tell us about perhaps his chances of succeeding?
HARWOOD: Well, as Kevin Brady (NYSE:BRC) reminded me, we haven`t had a tax reform for 30 years. So, it happened once in a generation. He`s saying he will think big and look at things like consumption tax in addition to the current income base system, a shift in that direction. Again, we have seen predecessors like Dave Camp, who was the chairman in 2014 brought forth an ambitious plan, it went nowhere.
Kevin Brady (NYSE:BRC) says Paul Ryan is going to be more receptive than John Boehner, the speaker in 2014, was.
HERERA: I know you`ll keep us posted, John. Thank you so much.
John Harwood in Washington.
Well, from tax policy to filing your tax return. The deadline is fast approaching, but the good news is, this year, you`ll get a few extra days until April 18th because of a court and scheduling. And if you haven`t started yet, there`s still hope.
Sharon Epperson is here to hold our hand and help you.
If you`re literally starting today, Sharon, what should you do?
SHARON EPPERSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: Or if you literally started yesterday like some people sitting across from you.
EPPERSON: This is what you should do. What you should do is start gathering as much information as you can. All the documents you can, your W2s, all the income that`s come in. Your 1099 forms if you`re self- employed, and then look at also the income statements that you`re getting from brokerage firms and banks in terms of interest in dividends income. Don`t forget all of those. Very important to collect those for income adjustment.
And then you want to find any receipts for credit and deductions and a lot of us are doing stuff online.
EPPERSON: So that means you print out those credit card statement, those year end summaries from your bank or your credit card company to make sure you have the receipts. And then, if you have already paid taxes, if you paid estimated taxes along the way, then you want to have documents that show that you`ve paid those taxes already.
HERERA: All right. If you are ready, do you file electronically or by snail mail? What --
EPPERSON: Always. If you can, you try to file electronically because the IRS says it`s the best way to make sure that you don`t have as many errors. But importantly, if you`re owed a refund, you`re probably going to get it faster if you file electronically and request direct deposit.
So, there are many ways that you can do it. If your income allows you, you can do IRS free file. There are also free fillable forms -- I can`t believe I said that right -- on IRS.gov website. Of course, you can get tax prep software, TurboTax, H&R Block (NYSE:HRB), different types of tax prep software.
And then there are also e-filing companies that have coordinated with the IRS. You can find out about them on IRS.gov once gain, and then they can transmit those returns for you electronically.
HERERA: All right. Say you`re a little overwhelmed as many people are, because it`s very complicated. How do you file an extension? What do you have to send to the IRS or what do you have to notify them about?
EPPERSON: You have to file paper work, and that`s form 4868. You have to file that by the April 18th deadline. And that will give you six extra months to file your return until October 15th. Now, if you get it ready by May 15th, you can send it in then. But your deadline, if you have filed for the extension, will be October 15th.
The key thing to remember, though, and many people don`t realize this, is if you owe tax, you still have to pay that tax as best you can by the April 18th deadline.
HERERA: Yes, you don`t want to incur penalties.
EPPERSON: Exactly and they start to accrue every month. So, failing to file is really bad. You don`t want to do that. And failing to pay is also going to make you have to pay some penalties.
HERERA: Thanks, Sharon, as always for holding our hand --
EPPERSON: Sure, absolutely.
HERERA: -- On Tax Day.
All right. Still ahead, the one pickup truck that aced a key crash test and the other one that didn`t.
HERERA: The slump in coal and overall lower freight volumes hurt CSX`s results and continues an industry-wide trend. The country`s third largest railroads reported earnings that were in line with estimates but net income dropped nearly 20 percent from last year. Revenue fell nearly 14 percent to $2.6 billion, slightly below expectations.
And the CEO says the decline this coal won`t go away any time soon.
(BEGIN VIDEO CLIP)
MICHAEL WARD, CSX (NYSE:CSX) CHAIRMAN & CEO: Coal is very challenging. As you saw, we were down 31 percent in this quarter. And we expect similar reduction as well in the second quarter of this year. And if you`re thinking about the strength of the dollar and the low commodity price is it`s impacting a lot of our markets.
(END VIDEO CLIP)
HERERA: As for the stock, it was volatile initially in afterhours trading.
Susan Li has more on CSX`s quarter.
SUSAN LI, NIGHTLY BUSINESS REPORT CORRESPONDENT: This was always going to be a tough quarter for railroad operator CSX (NYSE:CSX) given the tough comparison to last year and also following commodity prices. Profit dropped to 18 percent which was pretty much in line with estimates. But then revenue fell more than expected, down 14 percent, and freight volumes were down 5 percent in the quarter.
Also, pricing, what CSX (NYSE:CSX) can charge for carrying cargo declined twice as much in the first three months of the year than what the market had anticipated. And that really highlights the demand weakness in the markets and what CSX (NYSE:CSX) is facing. CSX (NYSE:CSX) has also been hurt by falling coal demand as it gets more of its revenue from carrying coal than any other railroad.
A strong dollar and weakening global trade also impacting the bottom line. But analysts have been encouraged by the railroad operator`s improvements when it comes to productivity with cost and expenses following 12 percent in the quarter. CSX`s stock has rebounded now off the three-year lows, which were hit back in January, but still a third down from November 2014 records.
For NIGHTLY BUSINESS REPORT, I`m Susan Li.
HERERA: And from the rails to trucks, a new series of crash tests are raising questions about the safety of pickup trucks. In particular, the popular Ram trucks.
Phil LeBeau has more on the collisions being put under the spotlight.
PHIL LEBEAU, NIGHTLY BUSINESS REPORT CORRESPONDENT: It is one of the most common and deadliest crashes. So, the Insurance Institute for Highway Safety checked to see which of America`s popular pickups does the best or worst job at protecting passengers when the front corner of their truck hits another vehicle or poll while traveling at 40 miles per hour. Just one truck, the Ford F-Series, earned good ratings across the board. By comparison, the Ram pickups were rated as marginal, with testers calling the truck`s structure poor.
RAUL ARBELAEZ: So, we have more intrusion than we`d like to see. And that led to elevated injuries measures on the dummy`s lower extremities.
LEBEAU: A spokesperson for Ram points out the truck meets all federal safety standards, adding, "Our vehicles are designed for real world performance and no single test determines overall real world vehicle safety."
These tests also debunk the suggestion made by Ford competitors that the new F-series made with lightweight aluminum panels is not as safe as other pickups made with steel panels.
ARBELAEZ: What I would tell any consumer going out there looking for a new pickup truck is, I would clearly go out and look at that Ford F-150.
LEBEAU: As revealing as the crash tests may be, they are unlikely to have a huge impact on which pickup truck people by. That`s because pickup truck owners are among the most loyal in the auto industry, typically sticking with their truck through thick and thin.
Phil LeBeau, NIGHTLY BUSINESS REPORT, Chicago.
HEREERA: Marathon Oil (NYSE:MRO) saw its shares surge and that`s where we begin tonight`s "Market Focus".
The oil producer sold $950 million worth of its non-core assets. The company`s CEO said since August of 2015, the company has seen sales reach about $1.3 billion. And that exceeds Marathon`s initial target. That sent shares 12 percent higher to $13.12.
A class action lawsuit against Pfizer (NYSE:PFE) has been revived. The case alleges that the drugmaker costs shareholders to lose tens of billions of dollars by misleading about the safety of two pain drugs, Celebrex and Bextra. The judge said the case never should have been dismissed. Shares finished the day off fractionally to $31.96.
Shares of Chesapeake Energy (NYSE:CHK) saw their biggest one-day gain since going public in 1993. The stock was ungraded to hold from sell at an investment bank following approval yesterday of a $4 billion credit line. Shares soared more than 34 percent to $6.05.
After a five-year investigation, the Justice Department, the U.S. Justice Department, specifically, is asking the hedge fund firm Och-Ziff Capital Management (NYSE:OZM) Group to plead guilty to bribing Libyan government officials. According to "The Wall Street Journal", U.S. regulators are seeking up to $400 million in fines. It was reported that a settlement could be reached within the next three months. Shares of Och-Ziff down over 12 percent to $3.32.
Well, it seems consumers are shunning personal computers. Global shipments of PCs fell for the sixth consecutive quarter to the lowest level since 2007. According to research firm Gartner (NYSE:IT), PC shipments fell below 65 million units and that`s worldwide.
Well, more than one billion people worldwide are active on Facebook (NASDAQ:FB) and its Messenger app, which you can use to send messages to people, is growing exponentially. Today at Facebook`s annual developer`s conference, the company said it doesn`t want you to leave Messenger ever and it`s creating a new tool to make it a one stop shop for just about everything you do on your phone.
Julia Boorstin takes a look at the rise of the so-called Box.
JULIA BOORSTIN, NIGHTLY BUSINESS REPORT CORRESPONDENT: Mark Zuckerberg took the stage at F8 to talk to the 2,600 developers here about his five and ten-year vision for Facebook`s family of apps.
His vision for connecting billions more people to the Internet and he also unveiled new tools available right now, including the ability for more people to watch and share live video.
MARK ZUCKERBERG, FACEBOOK CEO: We`re opening up our live API. So, now, you can build the ability to build Facebook (NASDAQ:FB) video right into any device. Like for example, this drone flying in from the back of the room. Come here.
BOORSTIN: Also in focus here is Facebook`s messaging power.
Mark Zuckerberg announcing that between his two messaging apps, Messenger and WhatsApp, people are sending about 60 billion messages each day. That`s about three times the number of messages that are sent via SMS. Now, Facebook (NASDAQ:FB) is looking to grow that number and also enabled businesses to interact with customers on Messenger, which was the fastest growing app in the U.S. last year.
Facebook`s Messenger chief David Marcus (NYSE:MCS) unveiling tools for partners to develop chatbot, artificial intelligence software that can provide automated subscription content like weather and traffic updates, to customized communications, including receipts and shipping notifications, designed to keep consumers and Facebook`s family of apps as long as possible, and to allow companies to engage with them without asking people to download new apps to their already crowded smart phones.
DAVID MARCUS, FACEBOOK VP OF MESSAGIGN PRODUCTS: What we believe is that the future is going to be an amazing future where you`re going to be able to have much simplified interactions with all of the brands and services you care about in your life.
BOORSTIN: Facebook (NASDAQ:FB) announcing a range of partners from Bank of America (NYSE:BAC) to Expedia (NASDAQ:EXPE), to customer service messaging software company Zendesk. Facebook (NASDAQ:FB) is already showing how it will make money from Messenger, showcasing how partners can buy Facebook (NASDAQ:FB) newsfeed ads that will take users directly to company`s chatbots.
For NIGHTLY BUSINESS REPORT, I`m Julia Boorstin in San Francisco.
HERERA: Coming up, the immigrant-turned-entrepreneur who sometimes has longer lines at his shop than Chipotle.
HERERA: Here`s a look at what to watch for tomorrow. JPMorgan (NYSE:JPM) Chase is the first of the big banks to report earnings. Retail sales for March and the producer price index will be released, and the Federal Reserve releases its Beige Book, an anecdotal look at current economic conditions across the country. And that`s what to watch for, for Wednesday.
Farmers are in line to get more government aid than at any time in the past decade. According to the Department of Agriculture, federal payouts will total roughly $14 billion. Farmers are earning less than half what they did just three years ago. Corn and soybean prices have fallen so low that farmers are expecting to lose money on every acre they plant this season.
North Carolina is seeing further economic fallout from its controversial law that curbs LGBT protections. Deutsch Bank has decided to hold its plans to add 250 jobs outside of Raleigh. The move follows a decision by PayPal last week to scrap a new operation center in the state. This afternoon, the governor of North Carolina signed an executive order amending the measure slightly. The order adds anti-discrimination protections based on sexual orientation for state employees.
The confidence of small business owners has fallen to a two-year low. The National Federation of Independent Businesses cited concerns about sales and profit. The soft reading fits in with recent economic data on customer and business spending. But that decline in confidence isn`t stopping one entrepreneur from achieving his dreams that started with his mother`s recipes.
Kate Rogers (NYSE:ROG) has the story of one man`s personal struggle and triumph from Rosslyn, Virginia.
KATE ROGERS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Some 15 years ago, Osiris Hoil came to Colorado from Yucatan, working his way through restaurant kitchens and eventually into construction. He got married and started his family relocating to Virginia.
He was making it, that is until 2008 when the housing bubble burst.
OSIRIS HOIL, DISTRICT TACO CO-FOUNDER: I was never going to forget that day. I begged for my job. I told him, look, you can pay me minimum wage if you want. I can be -- I can sweep.
ROGERS: Osiris tried to get work. He looked to construction jobs, even jobs back in the kitchen but nothing panned out.
HOIL: I couldn`t find anything.
ROGERS: To keep up his spirits, on the weekend, he`d invite friends and neighbors over for traditional Mexican food -- the kind he learned growing up with his mother.
HOIL: If I bring up, you know, a tomato that looks bad, I would go back again and picked up that looks good because she didn`t like the vegetables to look bad.
ROGERS: Osiris cooked what he enjoyed eating, taking for granted how delicious those were to others. But a neighbor and tech entrepreneur Mark Wallace blown away by his food saw something he didn`t.
HOIL: I eat my food and I love it. I never thought it can be something big someday.
ROGERS: Wallace encouraged Hoil to look into a food truck which turned out to be too pricey so they settled on a cart. Wallace got investors to pool together $30,000 for the venture. The cart took off thanks to savvy marketing on Twitter and changing up the menu daily. And in 2010, they opened their first physical location. Now they have seven around the D.C. metro, with several more on the way.