this is "nightly business report." with tyler mathisen and sue herera. >> tail spin. oil prices enter a bear market, trading 20% below their most d deepen. >> fashion forward. amazon has already changed the way we shop and now, it's sending a chill through the retail sector again. >> pricey packages. why your holiday shopping just got more expensive. those stories and more tonight on "nightly business report" for tuesday, june 20th. and good evening. i'm contessa brewer for sue herera. >> i'm bill griffith in for tyler mathisen. oil prices have fallen into bear

market territory. that means they are more than 20% below their most recent peak, which was reached in january, marking the lowest settlement price for oil this year. domestic crude fell by 2% today closed around $43 a barrel. the reason for the decline is a familiar one. there's simply too crude on the market and not enough demand. the world's biggest oil producers tried to fix the problem, but as jackie d the fg cracks. >> crude oil lower again on concerns about oversupply, which is not what is supposed to be happening now. opec is committed to cutting output this year, but some member countries like libya and nigeria, are cheating. >> i think there's a couple of different reasons for oil decline and they can't all cull min nate in the perfect storm. first, is that opec didn't have the control they once did, so when b they agreed to production

cuts, they declined. then i think the market believes opec members would become frustrated with the situation and that exacerbated the move lower. we've talk about for year, , t. everybody is talking about the bearish reasons for crude to go lower. i'm starting to worry about this now because it seems like it's on one side of the boat. >> adding to the prrk, demand is not rising and it should be this time of year. over is 00 degree temperatures on parts of the west coast combined with continued rain on the east coast, keeping travelers at home. finally, north american production, the u.s. and canada, both forecast it to rise significantly. the u.s. could produce 10 million barrels a day by next year. and ihs market says canada could ramp up to 3 million r barrels a day in the next two years. the question now, how low can we

xwo. >> i think the 3 a possibility median term. before that happen, we're due for a bounce. i think people are positioned short quite a bit and i think we can get a bounce from the 42.5 area up towards 48 at this point many time, i think we resume the trend lower and that leg lower gets us into the 30s for sure, 38, 37. >> fourth of july is the peak of the summer driving season, now two weeks away. without the seasonal boost for crude price, some say it could be a while before we see 50 again. >> and joining us now to talk more about oil, john kill da, the founding partner of again capital. we just heard the trader there talking about mid 30s ch what's your take? >> i think that's right. although i don't necessarily agree with this trip back up to $48 a barrel. the chickens have really come home to roost here for opec and russia, who did come together is as mention nd november to try to

fix this market. fact of the matter is is, they've done too little in not enough amount of time and the problem they're having now is if they didn't have a count on two big countries coming back online nigeria and libya, who are now dumping about 2 million barrels of oil on the market, that was not plaped for. >> and john, what ruole do u.s. t f month, we've this? seen more and more come back online again. that's even more supply. >> that's even more and there's a wave of that oil yet to come. the biggest uptick in production so far this year, really most of it has come from long planned projects in the gulf of mexico. even though the shale producers get all the glory like a wide receiver on a b football team, the heavy lifting and tackling is with golf. we have yoet to cash in on it, if you will, the super high-rise in the u.s. rate count that's going to bring us more oil.

i think we get to ten million barrels p per day before the end of the year. uphooefl in the middle east. there's been this diplomat b you disturbances in syria. how do you factor those issues into what happens with oil? z >> i have to say that is a emotion potential booby trap for lack of a better word. this is a powerful bear market we're able to shake off, the seeming troubs that are there. the rhetoric is as hot as i've seen it in my career. you have saudi arabia and iran really at each other's throats ipg like never before and what you're hearing about the swa real ion in syria and qatar opport to blow wide open. we had iran and china doing naval exercises in the straight of hormuz where how% 40% of the world's oil transits through just this weekend.

there is definite concern about that situation. so gre of you tn us. thanks. >> thank you, contessa. >> meanwhile, the decline in oil prices may with one of the rein relatively low now. today, the president of the chicago federal reserve said he is concerned about the soft inflation data. and that it may be best if the central bank waits until year end to decide whether to raise interest rates yet again. >> i have voted with the committee on the rate increases so far. that's in part because i think that the fundamentals for the economy are good. i think that the unemployment rate falling4.3 is good. i think it's likely that we will see more inflationary pressures, but i' our current stance in policy, even though we've increased the points by 100 basis points, i think up to this point, i think we can still expect that inflation will go up to 2%. >> as he suggested, mr. evans is

a voting member of the fed's policy committee right now and he added that some of the challenges in getting flags inf to that 2% tt is global competition and new technology. >> the falling oil prices dr stocks lower including two dow components. exxon mobil and chevron. that weighed on the broader market with the dow and s&p 500 retreating from all time highs. the dow jones industrial average fell 61 points to 21,467. the nasdaq was off 50 and the s&p 500 dropped 16. >> and the retail sector was weak today. this after amazon took yet another swing at the industry that it's been reshaping. the online company is now launching a new clothing delivery service. the concern for retailers is this new competitor will lead the lower prices and narrower margins. something the industry is alrewith bob b pisani has more for us

tonight. >> today, it was retail stocks that took a dive as the amazon juggernaut rolled on. they rolled out amazon wardrobe where they tackle some of the biggest problems with buying clothes. the time it takes to shop and hassle for finding the right size and returning stuff you don't want. big retail names like nordstrom, j.c. penny's and discounters all down 3 to 8% or more. that's a lot. the it's a simple idea. try before you buy. pay for what you keep. pick out three items or more, get shipping for free and you have seven days to try the stuff on and decide what to keep. trz simple idea. real genius is the return policy. you get 10% off if you keep three or four items. 20% off if you keep five or more. the more wryou keep, the more y save. don't ooefb even need to be home

when they come by to pick it up. in theory, this is not a retail apocalypse. they will support brands outsidn and others. that may be true, but the market didn't act that way. every large shoe maker was down 2 to 3% including deckers and sketchers and steve madden. tough day. i'm bob pisani at the new york stock exchange. >> so, from shoes to food, amazon certainly is reshaping how the retail industry works and it may be about to do the same for the economy as a whole. as some economists now believe this deal with whole foods could push down food prices and therefore, inflation. jack mcintyre is fixed income portfolio strategist at bran ty wine global. competition is is good, it keeps prices lower. technology's bringing prices lower.

what about this? the impact it will have on the food business? zbh so, i agree. you're marrying it and you've alluded to it. competition and technology. those two things are already disinflationary. the fact you're bripging them close together to me, it's just plain to see we are in secular disinflationary pressures. that's great if you're a bond investor. >> how much of this, jack, really has to do with amazon getting into the wardrobe business in ways they're not already? >> yeah, so, i think again, i kind of alluded to, you think about the competitive nature of introducing a ing. behemoth into different sectors. again, we don't know ten years from now, how this is going to play out, but anytime you introduce you know, a major competitor that's backed by technological advances, it is going to ultimately lead to greater competition and that's

going to see lower prices or better equal tquality. in this case, i think you'll see both of those. >> you're the fixed income guy. there's a problem in the fixed income market right now. yields near year lows even as the economy fwroes. is it because you thin the markets sense this lower inflation? >> yeah, i agree. if you look at the yield curve, it's been flattening. that tells you the market is not worried about inflationary pressures. i think we're in a sweet spot right now because there is decent economic growth. it's just that that growth i in. so, it's an environment where i think equities can do well. certainly bonds can continue to do well. because inflation is going to be contained and this whole idea of amazon buying whole foods reenforces that. is there a risk of deflation that comes along if you're gaming it out and looking say ten years in the future?

>> no, i don't. because again, i think the mod amazon is taking reminds me of what china is trying to do. they go in, focus on get market share. worry less about profits and then eventually, when they sort of you know, they'll see a lot of their competition go away, they'll be in a position to start raising prices. focus on increasing the profit emergenmargin and that should inflatio, b that's prob not until ten years down the road. >> very, very interesting. jack mcintyre, good to see you. >> thank you. >>, there one place where prices soon will rise and though it's only june, holiday shoppers should pay some close attention.

one of the word's biggest index providers will add chinese equities to its benchmark beginning next year. we told you yesterday it was being considered. their decision to add shares to the widely tracked index could move hundreds of billions of dollars of funds from asset managers and pension funds to mainland china's equity markets over the next decade. >> well, a record quarter for fed ek. the package delivery company reported higher than expected profit and higher sales in its ground and freight delivery business units today. fedex has been spending billions of dollars to upgrade its networks to handle the rise in ak percentage delivery volumes and investors may feel it's paid off. it send the stock higher today. >> and if you do a lot of shop ing online, it may cost you

more. deliverereel >> online shopping could become more expensive. for the first time ever, ups is adding an extra charge to packages shipped during the busiest weeks of the holiday season. a 27 cent fee will be levied on ground deliveries destined for rez dsidential doorsteps. and charges will also apply to some next day air and oversize ed shipments. the move comes at ups, fedex and l service had to scramble to keep pace with e commerce growth. growth that pushed up cost and made it harder to make money, especially during the season when more planes, trucks and up with demand. ups' ceo discussed the challenges in an interview just last month. >> it's just making sure they have time to hear when customers give us a lot more packages. if it drys our cost, we want to

be compensated. >> ups said it may charge some customers for missed forecast. meaning packages they expected to ship, but never did. it all translates to higher shipping costs for companies trying to capitalize on e commerce. even amazon. >> costs are going up and people are paying for it. you're going to find marketplace participants and i would point out that last year, ups did what i would call a shadow increase and that they started, they announced in december ta in order to get two day service, you had a shadow surcharge last year. this year, there's been more transparent about it and i would expect fedex to toll whfollow. >> the move will force retai wa to keep those costs or raise shipping prices for consumers. the move seen as risky in the age of amazon prime. >> as we reach these capacity maximums, the post office raise rate, ups implement a peek

surcharge. i think it says do we want to decide if we want to pick that package up at a lois or pay for the luxury of having it delivered to our doorstep. >> another al teternative, anot shipping fir for "nightly business report," i'm morgan brennan. >> boeing raises its long-term dlooifry forecast. that's where we begin tonight's market focus. the aircraft maker said it expects to see heightened demand from the aerospace industry over the next 20 years and plans to deliver about 41,000 planes tr. boeing shares fell fraction alley today to $198.33. homebuilder le nar is seeing new increases in sales and said quarterly orders hit a ten-year

high. earnings took a hit from charges related to a recent acquisition, but overall, profit and sales were better than expected and said its medication for treating vision loss was just as -- they said the trial showed patients didn't need to receive as many injections as they would with the other drug, but novartis doesn't plan to file for regulatory approval until next year. as a result, regeneron shares rose to 495.33 while novartis was up a fraction to 81.60. red hat raised its earnings and sales outlook for the year. after reporting earnings and e ahead of estimates. the company cited robust global demand and increased commitment from its largest mecustomers. shares took off in after hour, but ended the regular session

down marginally. for the first time now, uber is is going to allow drivers to collect tips through the company's smart phone app. the decision is part of a broader effopr the company's relationship with its drivers. drivers have long argued that tips would help compensate for decreased wages. the feature will be available by the end of july. >> a lot of grumbling around here when that came through. the the operator is calling for voluntary electricity conservative vegas in the afternoon and evening. this is first su. officials say consumers shouldn't use manl appliances during those hours and turn off unnecessary lights. in fien iphoenix, american airl canceled some shorter flights. coming up u, is the tax code too long and too old for the modern era?

the thinspeaker of the house th so and he's outlining his plans to change it. the speaker of the house is optimistic that tax reform can get done this year. investor paying close attention hope lg it would mean robust growth. brian sullivan talked to paul ryan today at a conference in washin. >> he used the manufacturing executives in washington, d.c. to outline his call for broad-based tax reform. in a speech in washington, he laid out why the u.s. tax code is too long and too old and i to tell you, we are going to get this done in 2017.

we have to get this done in 2017. we cannot let this once in a generation moment slip by. >> this comes at a crucial time for him and the gop. as house republicans work to push through their legislative agenda, racing against a clock of the recess an of course, trying to get it all done in the shadow of the russia probe. ryan remains optimistic that all the attention andcuttle their p. >> the ways and means committee writes tax reform. they're not involved in this. they're busy working on tax reform, so going to go do their vest ggags. meanwhile, the ways and means committee, finance committee and house and senate, they're doing tax reform. just like the commerce committee is working on energy reform. just like judiciary committee is working on immigration reform. >> ryan's plan is similar to the president's in that it proposes the number of tax brackets from

seven to three. he also wanted to eliminate itemized reductions. which ryan says means any federal deductions for state and let's stop masking profligate governments. stop disguising the inefficiencies of some of these state governments. >> that deduction largely taken by those living in high income high tax states like new york and california. states that overwhelmingly vote democrat. for "nightly business report" in washington, d.c., i'm brian sullivan. >> meanwhile, republican senators are raising against the clock on their own on health care and today, they promised to release their bill on thursday. the goal is to produce and vote on a health care bill before congress leaves for its traditional july 4th re. >> seth:. kayla has the progress and sticking points.

>> after weeks of deal making, mitch mcconnell e the wraps off health care. >> we're going to lay out a discussion draft thursday morning. you'll be able to take a look at it. i think you heard from some of my colleagues the highlight of it and i wouldn't want to compare it to the house bill. it will speak for itself. >> the privacy negotiations providing fuel for democrats. >> i don't know what's in the bill. our colleagues who are working in secret right now seem to have a disturbing lack of interest in transparency. >> republicans can only lose two votes. even lawmakers involved in the talks like senator ted cruz say there's still a lot of work to do. the party's priorities vary widely. some like cruz inslo yums. others worry about excluding americans with preexisting conditions. lawmakers from medicate want to make sure cut to that program

won't cause a number of uninsured to skyrocket. the plan proposes cuts to medicaid, but defers the end of the expansion to 2025. governors like colorado's john higuain looper has been pressing senators to consider their views. >> in the end, the governors are the ones tha s and certainly, t house bill almost every governor thought it was a terrible idea. >> the president previously praised that bill. >> this is a great plan. >> but has since said privately the senate's version needs to be more generous. white house press secretary sean spicer said the president has been involved in this negotiations with this senate leadership, but didn't know whether he had seen any portions of the bill just yet. >> health care and tax reform are both central to the broader white house agenda and today, the special congressional election in georgia is being viewed as a referendum on that agenda. it's gaining national attention.

john harwood is in atlanta tonight. this is the most expensive race, house race in history. why is there so much money an attention? >> $51 million so far, contessa. the reason is is we've had some special elections this year, but this is the first one where democrats have a legitimate shot to win. in fact, this is the kind of district they need to win in they're going to win the house back in 2018. it's very republican, but a lot of college educated republicans, that is donald trump's weakest republican constituency, so money, attention, volunteers have poured this here, democrats are trying to win with the young inexperienced candidate. republicans have karen handle. turnout has been high today, although we have a lot of rain this afternoon. >> i keep hearing how rig there, but yonlt hear the issues. what are those issues that could decide the outcome on this? >> well, really, the backdrop

for this race is donald trump. the candidates, handle doesn't like to talk about trump and john isn't talking about him that much either because he doesn't want to inflame republicans who are disproportionately represented in this district, but what is pushing the money in and what's g the enthusiasm and turnout are feelings about donald trump. his approval rating is 35%. in this district. 26% of republicans disapprove of his performance so far. that's higher than the national average. that would be a good sign for democrats, except there's so many republicans in this district. hold overall has been close up to the end. >> really, this is one race if the republicans do lose this one district, does it really affect the overall republican agenda? >> well, it could. and that turns on whether or not if he win, if republicansed and all of our seats are in danger

year. we've got to run away from donald trump. if handle could hold this seat, they might be calmed down and be able to say, okay, steady as she goes. >> john harwood in atlanta. thank you. and that's "nightly business report" for tonight. i'm contessa brewer. thank you for watching. >> good night, contessa. have a great evening, everybody. we'll see you back here again tomorr.

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