>> announcer: this is "nightly business report" with tyler mathisen and sue herera. funded in part by hss. >> our value principles are patient first. and we want to deliver the highest quality care. >> the goal of creating and sustaining value is all about putting the patient at the center of the equation. >> the purpose of this organization is to help people get back to what they need and love to do. creeping higher. if you're nervous over mortgage rates hitting levels not seen since 2014, there is a way to lower yours. going private? president-elect trump hints at

the idea of privatizing the va. the challenges facing that idea. and on second thought. the growing concern on using e-mail, on "nightly business report" for thursday, december 29th. and good evening, everyone, i'm contessa brewer in for sue herera. and this is i'm bill griffeth in for tyler mathisen. history is made, we're finally anchoring together. >> it's about time, they've kept us apart all these years. >> i agree. after the federal reserve raised interest rates a few weeks ago, there was no reason to believe that anything would change in that regard. now according to mortgage buyer freddie mac, a 30-year fixed rate mortgage has ticked up to 4.32%, the highest level since april of 2014. and considering that the archfor all of 2016 for the 30-year was 3.66%, that was the lowest since freddie mac began keeping records 45 years ago. that's quite a spike in just two short months.

if you're thinking of buying and you're nervous about high rates, diana olick tells us tonight that there is a way to get a lower number. >> reporter: mortgage rates took a bit jump after the presidential election and just kept on going. so if you were in the market to buy a home last summer but just couldn't pull the trigger, it's going to cost you more on the monthly payment for the same priced home. already we've seen the hit from rising rates. pending home sales dropped in november to the lowest level in almost a year and were lower than november of 2015. pending sales measure contracts signed, not closings. so people out shopping in november are factoring in those higher rates. the average rate on the 30-year fixed is now well over 4%. while it's been moving in a narrow range in the last few weeks, the expectation is that it will move higher next year as the economy strengthens. add even faster rising home prices to the mix, and you have something of a toxic situation

for housing for 2017. but you can buy down your mortgage rate. yes, you have to have more cash up front, but lenders will lower the rate if you pay a percentage of the loan in fees up front. it's called points. one point is 1% of your loan amount. if you were getting a 30-year fixed loan of $300,000, you might get a rate of 4.25%. but if you pay one point or $3,000, you might get a rate of 4%. lowering your rate by a quarter point lowers your payment by $44 a month and lowers your interest costs by about $62 a month. important, though -- this is only a savings if you stay in your house for at least seven years. that way you're saving more than you paid up front. for "nightly business report," i'm diana olick in washington. >> that's a real commitment to your home. let's turn to darren bloomquist to talk more about the u.s. housing market and what he's expecting in the new year. he's the vice president of

realty track. great to see you, darren. what do these rising mortgage rates tell you about the housing market? >> well, they tell us that it's time for the housing market to stand on its own two feet and not have kind of some of the artificial supports we've seen over the last few years that have helped the housing market recover, and recover more quickly, i think, than a lot of people anticipated. but the housing market is ready to not necessarily have those artificial supports. one of those is low interest rates. i think the house market is ready, the fundamentals are strong, to recover on its own without those record low interest rates. >> you know, one of the headwinds, i mean, low rates helped, but you had lending standards that were so stringent for the last several years that many people didn't qualify for a mortgage otherwise. has that relaxed enough to let people back into this market again? >> you know, i think it's slowly but surely relaxing. of course we don't want it to

relax too much because we'll repeat the mistakes we saw last time around. what we don't want to say is we need to give access to credit so much so that we loosen lending standards to the extent we saw ten years ago. i do think the rising interest rates will actually be a good thing, because we're seeing a growing number of markets hitting these affordability ceilings, and it's a concern that these markets are becoming overheated. and so rising interest rates will have a cooling effect and, you know, we referenced it the last time we saw this high of an interest rate, even though it's still only 4.32%, was back in april of 2014. we did see a chilling effect on the housing market back then when interest rates went up. i think we'll see that again. but i consider that actually a good thing to keep these markets from becoming too overheated. >> you mentioned markets that are hitting an affordability ceiling. can you be more specific? what cities are you looking at? >> yeah, it's the ones that i think a lot of people maybe

know. top of the list is kings county, new york, which is brooklyn, it's the least affordable in the country. many counties in the san francisco area, along with portland. some of the surprising areas that are becoming less affordable than their historical norms are places like denver as well as dallas and you saustin, texas. they didn't get hit by the housing boom last time around but they're seeing it this time around. >> darren boloomquist from realy track, thanks. the dow fell just 13 points, we're at 19,819 now. nasdaq fell by six. the s&p was off just a fraction today. let's talk oil. reuters reports shale driller are ready to spend on expansion for the first time in two years. refiners in louisiana and texas last week processed the most

crude in nearly a quarter century as strong demand from mexico and the caribbean grew. today crude closed at $54 a barrel. more crude could hit the market when sales of the strategic petroleum reserve could begin. jackie deangelis has more. >> reporter: when it comes to crude oil, it's all about supply and demand. with the recent u.s. shale boom, that balance has been off, causing big swings in the price per barrel. it's found some footing now, near $50. with increased production at home, the federal government doesn't need to hold on to as much oil in its strategy petroleum reserve. congress approved selling some of the reserves in its most recent budget resolution. the sales could start as early as january. the spr has been in place since the late '70s in the wake of the arab oil embargo. the goal, to keep enough crude on hand to supply the u.s. in the case of a major emergency

like hurricane katrina or the arab spring. but the world has changed. >> the spr isn't as important to the u.s. as it was, say, even 15 years ago. and the reason being, number one being the shale plate. with shale production of crude oil, you're able to get the crude oil a lot more easily than you were before. number two is we're actually moving away from crude oil as far as using it to power our world. there's a lot more alternatives out in the world. >> reporter: the spr is 700 barrels, about a month of u.s. demand. only a third of that would be sold potentially over the next decade. it wouldn't be a total abandonment but a slow drawdown. still, it could impact crude prices. >> the u.s. plans on selling i believe 200 million barrels of crude oil from the spr. while that sounds like a lot, when you look at the global supply and what trades in crude oil per day, it's not really that much. in fact if they do it over a

period of time, the crude oil market won't even realize it, it won't even be a blip on the radar. >> reporter: the other big variable in the new year, opec. will it follow through with the 1.8 million barrel production cut that it promised in january? and then there's president-elect donald trump. will his energy department go through with the sale? for "nightly business report," i'm jackie deangelis. elsewhere, following yesterday's news that sprint will hire 5,000 u.s. workers, president-elect trump posted this on instagram today. he said, "my administration will follow two simple rules. buy american and hire american." and another company in yesterday's announcement said it will create 3,000 jobs. that company is called one web. and that left many people saying, who? josh lipton tells us. >> reporter: there are still billions of people all around the world that do not have access to the internet. a startup aims to change that. one web is a company based in

arlington, virginia that wants to build a massive network of 900 satellites. from 750 miles above the earth, they will deliver high speed internet service in rural and emerging markets. greg wiler, the founder of one web, talked this morning about his company's mission. >> we're building an incredibly new and ambitious system to provide internet access initially to almost 10 million residential households. we'll be doing enterprise, providing internet access to aircraft and ships all around the would. this is a fairly complex system. but we've found a great knowledge base here in the u.s., and we do a lot of work also in other countries. but the u.s. has been fantastic. >> reporter: wiler will now be hiring 3,000 more people over the next four years, tripling the size of his current workforce. he says the first prototypes should launch next year and the service will formally launch in

2019. one web's dream of connecting the world is actually an old one. 20 years ago, for example, bill gates was among those backing a $9 billion plan to connect the world with satellites. that company was called teledesic. it boasted a grand goal, satellites circling the earth. ultimately just one satellite actually launched and the venture failed. wiler says this time is different, that the technology is now both powerful and affordable enough to make this dream into a reality. he's certainly attracted a lot of support. one web has raised $1.7 billion from investors. for "nightly business report," i'm josh lipton, san francisco. donald trump is also reportedly thinking about privatizing the department of veterans affairs. we've reported extensively on the va. why the push to privatize it in the first place? what's the point? >> a lot of parts of the

department of veterans affairs, and this is something officials have said and our reporting has indicated, are overwhelmed. there are a number of reasons for that. the department is now tasked with taking care of america's vietnam veterans who are now of course getting much older and much sicker, as well as the servicemen and women who are coming back from iraq and afghanistan. that's one. the other major issue, the sort of rampant bureaucracy that is a part of the department of veterans affairs where it is very difficult to fire an employee no matter how much investigations they've been under or how much wrongdoing they've done. it is just very difficult to fire them. so you did hear the president-elect on the campaign trail and even now speaking about giving more power to the secretary of the va to be able to fire these employees. but it is much easier said than done. there are processes already in place, appeals and other things, that make it extremely difficult. most of the time they're shuffled to different hospitals in different states but in the same position. >> what about the issue of private care, what are the challenges there?

>> i want to put the va in context. this is the second largest federal agency in terms of funding. the president has asked for $182 billion in 2017. there are thousands of outpatient facilities across the country, hundreds of hospitals. this whole issue, it's a lot easier said than done. in 2014 there was a major scandal where employees were charged with changing patient wait times, making it seem like patients weren't waiting as long as they were. congress passed an act which said if you're a veteran who can't get an appointment in 30 days or who lives 40 miles away or more than 40 miles away from the closest facility, you can get private care. the difference with president-elect trump's plan, there are no stipulations there, it just says we want veterans to be able to get the private care but it doesn't have those riders attached to it. >> no doubt that if this proposal were to become a solid and concrete avenue, you would have a lot of pushback from

people who look at the privatization of prisons, the privatization of the war effort, and say, look, it hasn't been without major problems in the past. that being said, whoever is in charge of the va would have a big hand in it. who might that be? >> you're absolutely right. i want to bounce back on that point. a lot of veteran service organizations are against privatization and they're encouraging the president-elect to stay with the current secretary of veterans affairs, bob mcdonald. on the short list is jeff miller, he helped craft trump's ten-point plan, it will be interesting to see who gets the job. >> very good, thanks. coming up, our market monitor has three companies that he thinks could thrive under a trump administration. we'll tell you what they are, coming up.

honda is recalling 650,000 honda odyssey mini advance because the second row of seats are not locked and could shift during a crash. so far, no related injuries have been reported. the fda turns down a pneumonia drug. that's where we begin tonight's market focus. the agency directed the antibiotic for community acquired bacterial pneumonia, citing a lack of sufficient data supporting the treatment's safety. the pharmaceutical plans to meet with the fda to address the concerns. their shares plunged to $2.60. as we told you earlier this

week, a medical device maker said it was placing a hold on the shipments of one of its devices due to a manufacturing problem. today the company said it was resuming those shipments of some of the systems following the news. their shares surged up to $5.92. series is reportedly borrowing another $200 million from its chief executive. the retailer will receive the funds through a loan provided by affiliates of the ceo's hedge fund and with consent from the lenders, series could extend that amount. shares of sears rose 10%. intelligent map making company "here" will combine realtime road and location software with mobileye, whose shares rose to $38.44.

our next guest has stock picks that he says could do well under the trump administration. he is ross gerber, president and ceo of gerber can kawasaki. you like the banks in part, but you're not picking a lot of the money centers. you like first republic, for example. why that one? >> that one in particular is a particularly well-run bank. it's in a great part of the nation, in the silicon valley area. they have almost zero loan losses. really well run. decent wealth management division as well. it's all about personalized service and providing multiple services to your customers. that's what first republic does very well. but the bottom line is we think the big banks have all kinds of business practice issues like

wells fargo. we don't want to get involved with that. we don't know what those risks are at bank of america and citigroup. we know they're doing the same practices as wells fargo. it's just a matter of time. by sticking with the regional banks you take out what i call business risk. >> so you don't like big banks. how do you feel about big media companies like, i don't know, disney? >> i love disney. i think media in a massive disruption change right now. in the end content players will come out on top. disney has the best content in sports and the best content for kids and the best content in movies. when you look at that and you say what's the true value and look at the overall multiple of the company versus of the market, i think disney is a very unique opportunity. >> what about espn, is that a drag? >> not at all. as we go into the bowl games this weekend, espn is an asset like no other. i think people's fears about espn are way overblown. sports content is more sought after, more desirable by

advertisers than ever before. >> you like mgm and the casino plays there. ideas that necessarily do well under a trump administration necessarily? >> well, first of all, trump has a lot of incentive to see vegas do well because he has a large asset there. we see trump being very good for things like regulation. we think that we'll see an end to a ban on sports betting, for example, which would be a boon for the casinos. we also see more dollars in people's pockets because of tax cuts and other economic things he's doing to spur the economy which will then ultimately go to las vegas. and we also see corporate tax cuts really helping domestic-based companies like mgm which basically just puts money in their bottom line. we see them winning in many ways. >> three picks for 2017 from ross gerber of gerber kawasaki. coming up, why more business leaders are thinking twice before hitting the "send" button.

the okay. administration issued new sanctions against russia in part over allegations the country hacked democratic officials and tried to interfere with the presidential election in the united states. and now the u.s. has expelled 35 russian diplomats and shut down two russian compounds used for what the administration called intelligence-related purposes. russia says it will consider retaliatory measures. and with all the talk of hacking these days and our reliance on e-mail, many americans, including business leaders, are becoming more and more wary about using the online communication. andrea day takes a look for us tonight. >> i was getting 2 to 400 e-mails a day.

it just became a huge distraction. >> reporter: he's the ceo of tommy john, the underwear company on pace to exceed $100 million in annual sales by 2018. but if you need to reach tom paterson, don't send him an e-mail. >> i no longer check e-mails between 9:00 a.m. and 5:00 p.m. if you need to get ahold of me during that time send me a text message or stand up and walk over to me. >> reporter: his strategy started long before wikileaks started dripping out secret information. it was his first job out of college that made him rethink e-mail forever. >> a girl i worked with starting scream, oh, my good, oh, my god she sent an e-mail with something she regretted. i thought i never want to have that feeling. >> reporter: according to experts, he had it right from the get-go. the book "unsubscribe" is about the benefits of cutting back on e-mail. >> i think we've had this feeling of safety and security with e-mail for a really long time and now that bubble is

really being burst. >> reporter: burst, she says, after wikileaks released batches of hacked e-mails from inside hillary clinton's campaign, infecting some americans with e-mail anxiety. >> it made me feel as a citizen that perhaps we're more vulnerable. >> i'm thinking about looking at that software that encrypts your e-mail. >> i've always been very concerned about where my e-mails might end up. >> reporter: like paterson, many well-known business leaders use e-mail sparingly if at all. jp morgan chase's ceo reportedly keeps his e-mail replies short, sometimes one word. warren buffett relies on an assistant to sent his messages. >> everything can be exposed. >> reporter: beyond security, paterson says he's already seen an impact. >> it really empowers the peopling, the to me to be more direct. i was able to delegate

responsibilities. >> reporter: if you have any doubt at all, don't send out the e-mail. come back to it either and then decide. better yet, have a face-to-face conversation, especially if it's something confidential. for "nightly news," i'm andrea day. it's a good bet that cyber security companies will try to line up money to go public as the drumbeat for secure cyber space grows louder. what other tech companies are heading the list for offerings in 2017? deirdre bosa takes a look. >> reporter: 2016 was a very slow year for tech companies to go public. many go to private markets for funding. but there were just 14 initial public offerings, continuing a recent trend. the 14 ipos were half the number in 2015 and just a fraction from 2014. some of the reasons, uncertainty around the presidential election and an emphasis on profitability over growth likely put a lid on companies wanting to go public. but venture capitalist kate

mitchell says next year's market conditions will bode well for the tech ipo pipeline. >> public companies, private companies ready to go. there will be a question of whether or not that's at or above their last private valuation. in terms of public market demand, it should be strong. >> reporter: they're also anticipating a busier 2017 for tech ipos. a mosaic rating system came up with the five strongest ipo candidates next year. they include mail delivery startup blue apron, enterprise software company vora, and education technology platform plura site. airbnb and pinterest could be looking at to tap the public market soon. the co-founder of uber, the world's most highly valued startup, has previously said he wanted to wait as long as

possible to go public. but mitchell says, don't be surprised if that happens sooner than some think. >> mark zuckerberg said he didn't know why he waited so long, it actually allowed him to do a lot more with his currency post-ipo than he was even able to do pre-ipo. i hear that and don't quite get that. >> reporter: the hottest startup to watch is snap, parent of mobile messaging app snapchat. it's reportedly filed paperwork to go public and raised $4 billion in a deal that would value the company at 20 to $25 billion. it could be the big debut that snaps the ipo market out of its doldrums. or it could disappoint hopes for a revival. i'm deirdre bosa, vancouver, canada, for "nightly business report." >> if only us oldsters could figure it out. >> i don't get snapchat. >> i'm contessa brewer. thank you for watching. >> what do you say let's do this

together. >> let's do it. >> i'm bill griffeth. we'll see you again here tomorrow night. >> announcer: "nightly business report" has been funded in part by -- >> our value principles are patient first and we want to deliver the highest quality care. >> the goal of creating and sustaining value is all about putting the patient at the center of the equation. >> the purpose of this organization is to help people get back to what they need and love to do.

man: it's like holy mother of comfort food.ion. woman: throw it down. it's noodle crack. patel: you have to be ready for the heart attack on a platter. crowell: okay, i'm the bacon guy. man: oh, i just did a jig every time i dipped into it. man #2: it just completely blew my mind. woman: it felt like i had a mouthful of raw vegetables and dry dough. sbrocco: oh, please. i want the dessert first! [ laughs ] i told him he had to wait.