welcome to "on the money." the stock market reaches all-time highs. bond deals keep tumbling. is the economy weaker than we think? what it means for your money. google unveils driverless cars. aging in place. how the elderly can stay in their homes. >> people love their homes. and the newly minted graduates are hunting for jobs. what are the majors that pay off and was the hefty tuition worth it? "on the money" starts right now. this is america's number one financial news program, "on the money." now becky quick.

another day, another record for stocks. for the fourth time in five sessions the s&p 500 reached a new high on thursday continuing the slow melt up we have seen lately mostly on hopes of an improving economy. the dow finished near its record, as well. stocks were mixed on friday. the market shrugged off another look at the economy in the first quarter. a revised meeting showed it contracted by 1%. at least part of it is blamed on the harsh winter. many expect a bounce back. home prices continue to rise in the first quarter. the home price index showed an increase of 0.2%. after being battered by rough winter they showed signs of stabilizing in april. and apple has finalized its deal to buy beats for about $3

million. beats has a music streaming service. apple stock jumped on the news. the stock market continues to rise. bond yields continue to fall and the economy is shrinking, too. what does it mean to your money? joining us is principal global investor ceo with about $317 billion in assets under management. thanks for being here today. >> great to be here. >> the stock market feels like the bulls have been riding the day and running things up for quite a while now. do you think that trend will continue? >> most likely, yes. >> why? >> i think most pundits under estimate how well the u.s. private sector is doing. one driver is cheap energy, back log in the housing market and productivity. the u.s. is the only country really with labor productivity above precrisis levels.

with these drivers prices remain good for the u.s. sector. given that momentum i believe that even after the recent rises between 16 and 17 times earnings u.s. equities are not overvalued. >> you are saying we should ignore the gdp numbers for the first quarter? >> the first quarter was affected partly by the weather. people say it all the time but it really was pretty bad. and that did slow the economy. the other issue was that business inventories were a high level at the end of last year and were run down a bit in the first quarter. if you look at the more current indicators like employment they support the idea that in the second quarter the economy is getting back on track. >> what is the ten year telling us? with the yield below 2.5% is a tricky one to figure out. >> nobody expected it to go down. at the year end it was 3%. everybody thought it was going higher, literally 100%.

that illustrates one of the behavioral paradoxes about markets which is if everybody is one way the market can't go there. i think we are still in a bear market with rates likely to rise over the next year or two. that is the key issue. demands for funds is higher which means the rate will tend to go up. >> you have recently come back from the middle east and far east. you said that america is a little unique in the type of growth you are seeing in the private sector. what did you see on your travels? >> a couple of things i would mention. one is that the chinese -- i spent time in china a couple of weeks ago -- the chinese situation is quite fragile. we have seen seven percent growth in china, a little more, down from ten but still healthy. recently the chinese government spokes people have changed from saying growth should be at least seven to growth will be around

seven. >> that tells you growth is under seven. >> exactly. i would not be surprised in the next two or three years to see chinese growth settle back towards five percent which their stage of economic development will disappoint them. we have seen an extraordinary period of development in the chinese economy. while i'm positive from here on u.s. equities on emerging markets i think the next six to 12 months could be a little bumpy. although, i think you should be accumulating emerging market accounts if you have a five or ten year time horizon. >> what are you telling investors right now? what is the best place for your money? >> my argument was around the domestic economy. that tends to point towards smaller caps which have done well but it is not too late. the other area i would look at would be manufacturing including

lower rated tax stocks, not twitters and facebooks but more the apples. apple is at a good run. before that it was very weak for a while. that is the indicator of the kind of stocks i would go for. u.s. manufacturing, the more established areas of technology. anything that is really keyed into the u.s. domestic economy. >> what does that mean? key to the u.s. domestic economy? energy? >> i'm not talking energy. i think there is a structural oversupply of energy in the world. i think most people under estimate the effect of fracking and shale gas. when i talked earlier about energy being relatively cheap in the u.s., a unit of natural gas here costs about $4.50. i was in qatar earlier this week. they sell natural gas at a price of $16 off the dock.

it is not a small difference. it is a big multiple. that makes a big difference to u.s. competitiveness. >> it is great talking to you today. we are "on the money." google driven to change the way you get around. are driverless cars the future of transportation or is it just a pipe dream? and when the key word in real estate isn't location but mobility. the changing market as more homeowners want to spend their golden years at home. take a look at how the stock market ended the week.

google hopes to map a new direction for personal transportation. the company unveiled its self

driving vehicle prototype this week. it doesn't have a steering wheel. it doesn't have brakes. will one of these soon be driving to your front door? joining me is former gm chairman thank you both for being here this morning. eric, i want to start with you because you actually road into google car in 2012. what was it like? >> well, it was amazing. i went through i would say three phases. at first i was kind of fearful. the car in front of us came to a dead stop in the middle of route 101. i clutched the seat hoping the self-driving car would notice the stopped car. fortunately it did. within a few moments it was like exhilaration. andy and i were waving out the window. most of the ride up to san francisco and back down to mountain view, i think my main feeling was kind of boredom. it was driving very steadily at

55 miles per hour and didn't swerve. it was kind of uneventful. i think a lot of people have the same reaction at first being fearful and exhilarating and after a while people become accepting. >> what do you think about giving up control when you get behind a so-called wheel sth. >> i think it is the wave of the future. you know, with increasing traffic density, autonomous cars and standardized modules all driving at the same speed, i think it is the wave of the future. we cannot preserve individual transportation by just filling up the highways with conventional cars. having said that i obviously regret it. that is why i jokingly say you should always keep at least one motorcycle. what is going to happen, it will be hard to do an autonomous motorcycle. what will happen with people like me who enjoy driving cars,

it's the same thing that happened to the horse at the turn of the 20th century. the horse came off the streets and was relegated to horse farms. with cars you are seeing automotive country clubs showing up where people can have their interesting cars and raise them on weekends. but i think the self-driving autonomous car, gps controlled with all the other censors is unstoppable. >> part of it makes me think of rise of the machines. eric, i guess there are big benefits. are these cars potentially safer than us driving around ourselves? >> absolutely. i think bob pointed out they are more efficient in terms of using the roadway. even during a traffic jam up to 90% of the pavement is not being used because humans need that

much space to be safe. self driving cars can drive much more efficiently. they are ultimately going to be a lot safer. they are assuming built in systems both by having to communicate with each other and their ability to react and sense things. i think we will see a big drop in highway fatalities. >> what has to happen from the consumer's perspective and regulator's perspective before these things are signed off on? >> i think it will be an interactive evolving process. there will be test fleets and there will be test marketing and so forth. but, you know, ultimately at some point 15 or 20 years out i think it is going to be regulated. you are not going to be allowed on certain highways -- or certain cities, downtown areas will be self-driving cars, only certain freeways self-driving only. it will eventually take over the

whole country. will there be accidents with self-driving cars? probably occasionally there will be some sort of malfunction but it will be a tiny fraction of the accidents and fatalities that are caused by human error. let's not forget this. the electronic self-driving car doesn't drink and doesn't take drugs and doesn't go to sleep at the wheel. >> do either of you worry about the idea of a terminator rise of the machines situation sore do you feel this is a safer situation? >> there will be new risks that we haven't seen before. these self-driving cars can be hacked. i read about some people hacking one of the u.s. satellites. it will be easier to hack one of the cars if we are not careful. we will have to put in safe guards in a way that we didn't have to think about before. if we do it right instead of 30,000 highway deaths a year we may have a small fraction of that. >> what do you think this means for the future of detroit?

>> what this means for detroit? detroit doesn't care whether they make conventional cars or self-driving cars. as long as it is automotive it is all good. >> thank you both for joining us. >> thank you. we are "on the money." you know what they say about aging. it sure beats the alternative. when it comes to your home we have smart ways to make sure it is safe and comfortable at any age. later, a mind is a terrible thing to waste. what about money? what college degrees are worth the cost in today's job market. what does it mean to have an unlimited mileage warranty on a certified pre-owned mercedes-benz? what does it mean to drive as far as you want... for up to three years and be covered? it means your odometer... is there to record the memories. during the mercedes-benz certified pre-owned sales event now through june 2nd, you'll get complimentary pre-paid maintenance and may qualify for a two-month payment credit.

only at your authorized mercedes-benz dealer.

welcome back. the number of households headed by those age 65 and older is on an upswing as more baby boomers approach retirement years and choose to stay right where they are. what happens when your plan for aging includes staying in your home? >> people love their homes. with some creative design techniques and simple things we can allow them to stay in their home. >> turn the top card over. your turn. >> they both retired and moved to florida 18 years ago. the big thing was is the house suitable enough for them? >> this home was relatively small. we enclosed the front porch and made it part of the interior space because we wanted a single level living situation. >> we decided to put the ramp closest to the drive way and get

them to the house as quickly as possible. >> important to have hand railing at the right height. that can be positioned specifically to the height of the person that it is serving. >> nice thing about them moving back home to new jersey it has brought our family closer together. my mother loves cooking, loves being in the kitchen. >> the issue with appliances very often is they are either too low or too high. we try to position appliances within the reach ranges of the person or the people we are trying to help. the shower stall is recessed so there is no lip at the floor level. what it is really about is making people feel comfortable in their own home as they age because you don't want your home becoming such an obstacle that you can't enjoy it anymore. >> we have more on getting your home ready to age in place. kermit baker is the chief economist at the american

architects. we know more baby boomers are retiring and choosing to stay at home. what trends are you seeing when it comes to that group? >> when they decide to stay in their home they often need work done to accommodate evolving needs. we see home improvement activity towards aging in place phenomenon. >> widing door ways? first floor bedroom? >> the basics in finding a home that can accommodate would be no step entry into the house, a multiple floor house. it would be a full bathroom and bedroom on the entry level. >> it's got to be a bit of a daunting prospect when you think about remodeling. i guess there are some easy ways to do this, some quick fixes? >> you want to start with the areas that could cause problems and maybe quick fixes like hand rails, some better lighting.

you really are kind of removing the obstacles that might exist. >> do you see differences regionally throughout the united states. in the package we just saw we were following a family in new jersey. >> it's a popular trend all over. i think the difference is that up here in the northeast and midwest most of the homes are older and weren't really designed for an aging population. they tend to be more vertical and have multiple floors and have narrower door ways. tend to have more rooms, more small rooms and makes it difficult for an aging population. >> one thing that we have always heard about is the idea of people moving to florida, moving to retirement communities, part for the sun and another part for the taxes. >> you see a lot of households that will move south when they retire to florida, texas, arizona, california, hawaii. when we look at states with the highest share of 65 plus

population some of the states are on it but also west virginia and maine and wyoming and montana. states that you wouldn't normally think of as having a high share of aging population. >> i know it depends on the house and how extensive of a remodel you want to do. what is a basic budget? >> i think generally for a few thousand dollars you can take care of the easy stuff, the hand rails, the lighting, removing obstacles. if you are talking major structural things you are talking about a lot more. clearly makes sense early on to talk to someone who knows about this and dealt with the area, an architect that has dealt with aging in place situations. it is helpful to get a sense of what is the most effective way to spend money to fix up your home for your years ahead. >> thank you for joining us. >> glad to be here. up next "on the money" a look at the news for the week ahead. college grads are entering the

workforce, or are they? we take a look at their job prospects post graduation and if the degrees will pay off in the long run. with millions of reviews, tripadvisor makes any destination better. for more on our show and on

our guests you can go to our websi website. here are the stories that may impact your money. we will get an update on economic activity from the ism index. on tuesday motor vehicle sales

for the month of may are due. wednesday the beige book. on thursday the european central bank will consider whether to cut interest rates. friday is the big number of the week, the jobs report coming up. friday the 70th anniversary of d day, the allied invasion of normandy that led to the end of world war ii. graduation is usually a time for celebration but you can throw some anxiety in there, as well. the prospect of finding a job and having to pay all of those big student loans you now have have debt averaging close to $30,000. some majors can pay off big time, some not so much. joining us now is personal finance reporting sharon epperson. we have about millions of millions of students graduating. they are getting out there and looking for the first job. the question is where are those jobs? >> the good news is there are job openings out there.

there have been some studies that projed through 2020 we see about 50 million job openings. about 30 million of those are from baby boomers and another retiring and 24 million are actually newly created jobs. there are opportunities out there. it is important to really try to look and see where the best opportunities are going to be and realize this is not going to be the job they are going to necessarily have for ten years. they are going to go in there and find something else. >> things probably much better than they have been for the past five years. >> they have been improving. there are a number of places they need to be looking so they can make the most of their money from their college degree. you talked about the $30,000 that a lot of students have in debt. when they get out of school they want to be making at least that or more. there are great opportunities if you go into fields particularly in the sciences, science, technology.

engineer, math. >> going into the field you are going into. >> you need to have an idea for the type of job you are going to get. i always knew i wanted to be a journalist. >> some people don't know. come up with a couple of different scenarios. find out what the jobs pay before you go in and realize that you should not take out more debt than what you are going to make in your first year out of school. >> that does it for us today. i'm becky quick. thank you for joining me. my guest next week the owner of the networking site. you can keep it here each week. we are "on the money." have a great one. we'll see you next weekend.

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