Mike pence reaches out to republicans. President obama reaches out to democrats as the overall fight gets underway. Racing ahead. Auto sales reach a record as more americans drive off with new cars. Is this as good as it gets for the industry . And making the most of your mutual funds this year. Passive or active . Bonds or stocks . The trends that could shape your year ahead. Those stories and more on nightly Business Report for wednesday, january 4th. Good evening. Welcome. Its underway. The battle over health care has begun and it is happening in pretty dramatic fashion. President obama was on capitol hill this morning to rally his party in an effort to protect the signature law of his administration. At the same time, in the same place, Vice President elect mike pence worked with republicans to work on a strategy to repeal and replace it. Though few details were given, the lines were clearly drawn. Whatever decisions were made, the impact will be far and beyond the 20 Million People who get their Health Insurance through exchanges. More on the showdown over obamacare. President obama made one of his last visits to capitol hill to rally democrats to make a last ditch attempt to save his Signature Health care program. Emerging from the meeting with the president , democrats had a sign that said make america sick again and argued that repealing obamacare could have disastrous consequences. Almost half of medicaid is about Long Term Health care. You want grandma living in the guest room . You repeal the Affordable Care act. But mike pence was on the hill to do rallying of his own. The first order of business is to repeal and replace obamacare. That was our message today and it will be our message on capitol hill. And it needs to be done. The man whose election sparked this political upheefl was back in trump tower tweeting out a take on obamacare that didnt exactly square the gop rhetoric on the hill. Republicans must be careful in that the dems tone failed obamacare disaster with its poor coverage. Like the 116 like in arizona. Also deductibles are so high that it is practically useless. Dont let the schumer clowns out of this web. Dre demes are to blame for this mess. It seems to suggest that republicans should not move quickly on obamacare despite the eveningerness on capitol hill. I spoke to one person who said he is frustrated that trump seems to toggle back ask forth and they have a hard time getting a read on his thinking. Capitol hill. The road map to repealing and replacing the Affordable Care act is obviously not entirely clear. Health insurance of more than 20 million americans is of course at stake as the gop and not the credit stand to get the credit or the blame. As this huge transition unfolds. The Trump Administration and republicans face a tough balancing act. They have to make sure they dont upend the Affordable Care act too fast. But they cant delay a replacement plan for too long. Insurers have only a matter of weeks before they have to file rates and plans for participation in 2018. Analysts say next month, a repeal vote needs to lay out how long the six diswill remain in place so insurers will have a road map for next year. Ahead of the may deadline for the 2018 plan rates. Then the administration and Congress Need to make progress on a replacement plan by the time the Trump Administration finds the final 2018 race in august. Insurers could still pull back in september, weeks ahead of 2018 open enrollment. They have to sign on the dotted line, a contract that says were going to stay in for 2018. Some of them might be reluctant to do that if they dont know what the rules of the road long term. A lot of them have been losing moan but have been willing, theyve been losing money but have hopes that the profitability will come down the line. Analysts say it is key the enact a replacement plan by years end to keep insurers in the individual market. By the end of 2017, there is some kind of a consensus plan that could be passed through congress and will be signed by the new president. So 2018 we have a new law of the land from health care. It will be at least two years to implementation which will take you closer to 2020. It may take even longer for markets to stabilize after the experience with the aca. Insure letters likely take a wait and see approach to the new plan. Nightly Business Report. Swoe the expensive changes coming to the health care system, who will be the winners and losers . Now to discuss that, nice to have you back with us. Welcome. Lets start first of all with the fact that you were on the record last time we spoke with you as saying that it might be several years before this all gets sorted out and replaced. Does the rhetoric that you heard on capitol hill today lengthen that timetable or change it in any way . Well, the meetings today, obama was there to do a pep rally of sorts. It would have been nice if he included all of congress, democrats and republicans, to talk about the aca. I think it is a couple years. You want to get through midterm elections. The repeal will happen quickly through budget process in the first 100 days. But then details will probably come out later this year. Wuth 2019 ask regulations and so forth, it could be 2020. No one thought this time around would dare utter the phrase, if you like your insurance, youll be able to keep it. I dont think anybody is ready to make that kind of promise this time. Did i hear Vice President elect pence say that whatever replaces the current plan will unleash the power of the free market. And that competition will cause prices to come down. I thought that was what the original plan was supposed to do as well. Unleash competition. It didnt seem to work. Will this . Youre right. There was a lot of competition at the beginning. But coops failed, insurers had to pull out. Now were seeing these massive premium rate increases. This time around with what well see next, it will be a combination, tax credits. Across state lines. There are a number of similarities but what i think it will be is a thinner benefit. More of a catastrophic benefit. You might have 10 or 15 covered. We dont know the replacement plan but in general who would you put on the winning list . I would put most medicare providers on the winning list. Medicare advantage, those are plans offered by humana, by etna, united health. There are certainly others. I would put biopharmaceuticals. Yes, there is pricing overhang over high drug prices. I would put those two as winners. And losers would be Hospital Companies . I think eventually they are potential losers. There is going to be this extended transition of one or two or three more years. I would say theyre not losers yet with you hospitals to be at the losing end. And facing new criticism. First reported by the are website, the intercept. This Steve Mnuchin is being investigated for widespread misconduct over the banks foreclosure practices. John harwood is following the story for us from the trump tower. What do we know about these claims and how damaging it might be ahead of his confirmation hearing . Reporter well, tyler, it stems from Steve Mnuchins acquisition of one west and the decision they you need push foreclosures in a forward leaning way. They back dated certain documents on get around time requirements for deliquent homeowners. And this was something investigated by california regulators. They ultimately decided not to bring a case. So while i think this is going to provide fodder for the democrats to go after Steve Mnuchin, i would not expect this to peel off the significant number of moderate republicans and threaten his confirmation. Mr. Trump nominating a wall street lawyer to they had s. E. C. Tell us about jay clayton. What do we know about him . Jay clayton is a classic wall street lawyer, mergers and acquisitions. That will come up in confirmation hearings because donald trump in the campaign talked about going after the corrupt establishment, specifically signaled out goldman sachs. And hes had several people, including mnuchin, several people with ties to goldman sachs. Gary cohen. But jay this clayton is clearly prepared for the job. He is somebody who doesnt have the same prosecutorial that there was now. So maybe less of an emphasis on enforcement, given anderson option. Dru donald trump has two seats to fill. An update on the tweet from mr. Trump, regarding the intelligence community. Tyler, this is a potentially dangerous rift between president elect and the u. S. Intelligence community which is coming up here friday on brief him on the Russian Election hack. In the tweet last night, he mocked the intelligence that they had collected. Suggested that they push the briefing until friday to get their stories straight. And this morning, he tweeted out statements from julian assange, a fugitive from justice, being called a hightech terrorist. This is something that will affect autumn directors coming up to broef him. Rex tillerson met ahead of his confirmation hearing. According to reports, republicans are positive on the selection while democrats want more information on his record and his relationship with moss couch he has cut his ties with common exxonmobil. The president elect has also taken Auto Industry to task as we told you yesterday. But today, they reported another banner record year for sales here in the u. S. Decembers results were Even Stronger than expected, and helped push 2016 sales to an all time high of just over 17. 5 million vehicles. That in turn lifted shares of the automakers, as you see there. But is this as good as it gets . Or could sales rise again this year . Phil reports from sunnyvale, california. For the First Time Since the early 1920s, auto sale in the u. S. Were up for a seventh straight year. 2016 sales came in just above the total we saw in 2015. Basically at 17. 5 million vehicles. Thats due to stronger than expected sales last month. Holiday and year end promotions, special when i the luxury brand, typically make december one of the busiest months at dealerships and last month was no exception. Almost every major automaker did better than expected in december. Leading the pack, General Motors up 10 . Gm like other automakers focused on keeping inventory lean which is helping sell them at higher prices, including the latest models by cadillac. This is unprecedented in the history. With prices up, so are monthly loan payments and that has some wonder figure auto sales will pull back in 2017. Keep in mind one of the more factors driving auto sales, strong consumer confidence. Right now, it is close to a record high. Good news for automakers and auto dealers as they serve the new 84. Stocks logged their second straight day of gains. It remained elevated after the release of the fed numbers. The Dow Jones Industrial average rose. The nasdaq was up 47. The s p 500 gained 12. The gains today might have been slight but they add to a big rally that weve seen over the past couple of months. And some investors might be getting a little nervous. It was another day in the markets. With the s p 500 up 6 cynic the election, theres plenty of traders who believe the markets are getting ahead of themselves. They point out correct reply stocks are trading at very high multiples under the expectations that it will rise dramatically despite having no hard date to go on. For the moment, the markets voted. They lead to tax cuts and less regulation. Saying that the congress may not be able to deliver the full package or that the fed may h e have, you can see the bullishness in the first two days. Sfuf did poorly last year. Retailers are doing well in the first few days. But banks and oil, theyre also doing well. The whole market is floating upward. They want to rally but not so they can get out. They want the market to drop down 5 or more so they can buy at a lower price. Thats why there are so few sellers. They believe the margaret wont drop much and that selling wont be worth it. At the new york stock exchange. Still ahead, policy makers at the Federal Reserve will be watching one thing very closely in the year ahead. 12346789 when the Federal Reserve interest rate, they were grappling with the growing uncertainty they say hoops over the economy. Steve has more on the minutes of the feds december meeting. The Federal Reserve in its last meeting of the year in which it raised rates by a quarter point for the only rate mike year was talking quite a bit about the possibilities of major fiscal policies coming as a result of the election. Minutes from that december meeting were released so that the fed is warning of the possibility of higher rates. Some members cite growth, employment on the fiscal policies but was very uncertain about the economic effects they could have. The Federal Reserve was also quite cautious over how the market reacted to the new policies, including a surge in stocks and a surge in interest rates. There were other policy concerns from the fed, including the possibility of trade barriers, the idea the dollar could appreciate quite substantially, and a give and take between higher inflation on the one hand. Concern that it could fall short of market expectations. The fed was also concerned the Unemployment Rate could fall too far. So two sources talking about fiscal policies expected coming from the Trump Administration. For nightly Business Report. Macys posted disappointing sales in the Holiday Season and thats where we begin the market focus. The retailers said same store sales growth came in at the low end saying Customer Behavior and ongoing weakness in hand bags and accessories hurt its results. Macys said it will eliminate with 10,000 jobs as part of the previously announced store closings. Shares fell nearly 10 ners after hours trading following the news. They ended the regular session of almost 2 . 3584. After the bell, kohls reported a drop in same store sales saying purchases during that period were volatile. Shares were hit hard after the release, wiping out a 4 gain during the regular session where they closed at 51. 88. Affiliates of the hedge fund have provided sweers a 500 million secured loan backed by mortgages on the properties. Sears had exercised its right the terminate leases on 19 of its stores. Shares of sears popped 6. 5 to 10. 36. Oprah winfrey said she has shed more than 42 pounds while on Weight Watchers diet program. The billionaire who has a nearly 10 stake in the company is part of new advertising campaign. Shares surging nearly 21 today. The Subscription Video Service hulu will begin offering this new services. It will let some subscribers access cbs, cbs sports ask the Networks Entertainment channel pop. The Live Streaming platform expected to launch sometime this year. Cbs shares were up 2 at 65. 74. And apple added the fund which is expected to launch this year will sfeed development of technology thats may be edge strategically important. Apple shares off a fraction. 116. 02. How much of your money is tied up in mutual funds . The trends that could shape the new year. Americans are putting money into domestic stock mutual funds again and it all began with the election. Here to discuss how investor behavior has changed. Brian, happy new year. Good to have you with us. Thank you. Why have investors found their taste for equity funds and where is the money flowing from . So i think part of the reason for the demand for domestic equity funds is basically because of expectations about improving economy. Either from greater government spending, tax cuts, higher profit. We saw the surge for equity funds in the u. S. It doesnt look like it is coming from bond funds. Some of that seem to be coming in from there. Probably most of this is coming from cash or other investments. We are entering into a new year when many expect changes. One of which may be tax reform. How do you factor that in . I think there are a couple things to look at. Number one, look how theyll treat muni bonds income. If they removie or reduce it. If you cut tacks, it will make it better. How do they treat your retirement taxes in your iras or 401 k . One of the points you made with our producers, a lot of people have put money into passive or index funds. That doesnt necessarily mean their money is not being actively managed. In other words, what may be happening is that their Investment Adviser may be assembling a portfolio of passive index funds but managing those funds in an inactive way. What do you need to be from your Investment Adviser in. That moved from a, what they are going to do is put together an investment portfolio for and you theyll have some time of bench mark. The conversation you should be having with you are why adviser, what is the bench mark . What is the expected rate of return that you can achieve and have something to compare your rate of return on your overall portfolio . Each fund will track the index. You want to know what your adviser is going to charge you informing doing that active management. And how much more do you think this market may have to run and how as a long Term Investor you should approach it . Well, the market is pretty much being driven by, at theeft stock market, by expectations of corporate profits. So as long as corporate profits ten to increase and expectations are that they wi. All right. We have to leave 30th. Happy new year. With the ici. Thats it for us. Thanks for joining us. And thanks for me as well. Have a great evening. Well see you back here. Nightly Business Report has been funded in part by hss. It is patients first. We want to deliver the highest quality care. Goal of creating and sustaining value is all about putting the patient at the center of the equation. The purpose is to get back to what they need to do. Narrator tonight on quest, giant sequoias can live for a thousand years and grow taller than a 30story building. But the drought is taking a toll on these iconic california trees. Now scientists are scrambling to figure out how to save them. And the hayward fault may be the most dangerous earthquake fault in america. Is the bay area ready for the next really big one . And find out how chefs are using chemistry to expand the world of flavor. Announcer support for quest is provided by