hi, everyone, welcome to on the money. the stock market reaches all time highs, bond yields keep tumbling and is the economy weaker than we think? what it all means. driverless cars, want to go for a ride? ageing in place. how the elderly can keep their homes, dignity and stay h their community. >> people love their homes. they love the way the space makes them feel. >> and what are the majors that pay off and was that 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. here's a look at what's making news. 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've seen lately on hopes of an improving economy. the dow finished near its record, but stocks were mixed on friday. the market shrugged off another look at the economy. it actually contracted by 1% and at least part of it is blamed on the harsh winter suffered by much of the country. many economists expect a bounce back in the second quarter. home prices continue ed to rise but slower than they had been. it was the same story with pending home sales. after being battered by the rough winter, they showed signs of stabilizing, increasing in april. and apple has finalized its deal to by beats for about $3 billion. beats makes headphones and has a music streaming service. apple stock jumped on the news.

the stock market continues the rise. bond yields continue to fall and by the way, the economy is shrinking, too. what does it all mean? joining us now, jim mccaughan, with about $317 billion in asset management. thanks for being here today. >> great to be here. >> so, the stock market, it seems that the goals have been kind of ridinging the day and runni running things up for a while. do you think that will continue? >> most likely, yes. i think most underestimate how well the u.s. private sector is doing. there's three drivers. one is relatively cheap in energy, a backlog in the housing market and productivity. the u.s. is the only country really which has got productivity, labor productivity, about three levels, but these remain pretty good for the u.s. private sector and for u.s. companies and given that momentum, i believe that

even after the recent rises between 16 and 17 times earnings, u.s. equities are not overvalueded. >> so, you're saying we should ignore the gdp numbers for the quarter. >> people say it all the time, but it was pretty bad and that did slow the economy. the other issue was that business inventories are at a high level at the end of last year and they were run down a little bit in the last quarter. if you look at the more current indicators like employment, they support the idea that in the second quarter, the economy's getting back on track. >> so, what the heck is the ten-year telling us with the yield below 2.5%. that's a tricky one to figure out. >> this is. nobody expected it to go down. year end, it was 3% and everyone thought it was going higher. that illustrates one of the behavioral paradoxes about the

market. if everybody's one way, you can't go there. so that's the key issue because demand for funds is higher, which means the rate, which is the price for funds, will tend to go up. so the rate will tend to go up. >> you've recently come back from the middle east and far east. you said that america is a little unique in this type of growth you're seeing in the private sector. what did you see in your travels? >> one is that the chinese, i spent some time in china a couple of weeks ago, the chinese situation is quite fragile. we've seen 7% growth, down from 10, but still very healthy. recently, the government spokes people have said growth needs to be around 7. >> probably tells you growth is under seven. >> i would not be surprised in the next two or three years to

see chinese growth settle back towa towards 5%, which at their stage of economic development, will disappoint them. i think this is a key to emerging markets and while i'm positive from here on u.s. equities, on emerging markets, i think that the next six to 12 months could be a little bumpy. although i think you should be accumulating emerging market equities if you have a five or ten-year time horizon. >> but you are positive on u.s. equities within that, what are you telling investors? what's the best place for your money besides just the broad market independeices. >> that tends to point toward small and mid caps. the other area would be manufacturing. including some of the lower rates of tech stocks. not the facebooks and twitters, but more the apples. the strong tech stocks and apple

has had a good run, but before that, it was weak for a while. that's an indicator of the kind of stocks that go far. u.s. manufacturing, the more established areas of technology, then anything that's really keyed into the u.s. domestic economy. >> what does that mean? are you talking energy? >> i'm not talking energy, no, because i think there is a structural oversupply of energy in the world. and i think we, actually, most people underestimate the effect of fracking and shale gas. we've had a, when i talked earlier about energy being relatively cheap in the u.s., a unit of natural gas here costs about 4.50. it was in qatar earlier this week. they sell natural gas to the chinese and japanese at a price of $16 off the dock, so it's not a small difference. it's a big multiple. that makes a big difference to u.s. competitiveness. >> thank you so much for coming in. it's great talking to you today.

up next, we are on the money. google's driven to change the way you get around. are driverless cars the future of transportation or is it just a pipe dream? and later, when the keyword is real isn't location, but mobility. more homeowners want to spend their golden years right 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. joining us with more is bob lutz and co-author of the second

machine age, erik brynjolfsson. erik, i want to start with you because you road in a google car in 2012. what was it like? >> well, it was amazing. actually, i went through 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 and i clutched the seat, hoping that the self-driving car would notice the stopped car. fortunately, it did, which i'm here to join you. within a few minutes, it was more like exhilaration. we were waving out the windows at the cars as we were driving by. we were very excited, but most of the ride, we went up to san francisco and back down to mountain view, i think my main feeling was kind of boredom, believe it or not. it was driving very steady at 55 miles per hour. didn't swerve and it was kind of uneventful. i think a lot of people have a similar kind of reaction. at=% first, may be fearful of

exhilarated, then becomeç very accepting of these tong technologies. >> bob, what do you think about giving up control when you get behind a so-called wheel? >> it's the wave of the future. with increasing traffic density, autonomous cars and standardized modules traveling at the same speed and sometimes, at very high speeds. i think it's the wave of the future. we cannot preserve individual transportation by just filling up the highways with conventional cars. having said that, i regret it. that's why i jokingly say you should keep at least one motorcycle and what could happen -- it will be hard to do an autonomous motorcycle, so what will happen with people like me who enjoy driving cars, it's the same thing that happeneded to the horse at the turn of the 20th century. the horse came off the streets and it was relegated to horse farms. what we're seeing with cars now is these automotive country

clubs springing up like monticello and autobonn near chicago, where people can have their interesting cars and race them on weekends. the self-driving autonomous car, gps controlled with all its other sensors, it's unstoppable. >> part of it makes me think, rise of the machines. there are some big benefits. are these even safer than us drivering around ourselves? >> absolutely. bob had a good point, they're going to be much 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 space to be safe, but self-driving cars can be more efficient. they are going to be a lot safer. so many built-in systems. both having to communicate with each other and even just their

ability to react and sense things more quickly than any human could. i think we'll see a big drop in fatalities. >> before these things are signed off on. >> i think this will, it's going to be an interactive, evolving process and there will be test fleets and test marketing and so forth, but you know, ultimately, at some point, 15 or 20 years out, it's, i think it's going to be regulated. you're not going to be allowed on the certain highways will or certain cities downtown areas, will be self-driving cars only. certain freeways. they'll gradually take over the whole country. as erik points out, less accidents with self-driving cars. yeah, probably, occasionally, there will be some sort of malfunction, but it will be a tiny fraction of the accidents and fatalities caused by human

error and let's not forget this. the electronic self-driving car doesn't drink and take drugs and it doesn't go to sleep at the wheel. >> but do either of you worry about the idea of a terminator rise of the machine situation? do you feel this really could be a safer situation? erik, why don't we start with you? >> well, there would be new risks. the cars could be hacked. i recently read about some people hacking one of the u.s. satellites and it will be a lot easier to hack some of these cars, so we'll have to put in safeguards in a way we didn't have to think about before, but instead of having 30,000 highway deaths, we may have a small fraction of that. >> what do you think this means for the future of detroit? >> well, what this means for detroit, detroit doesn't care whether they make conventional cars or self-driving cars. as long as it's automotive manufactured, it's all good. >> bob, erik, thank you both for

joining us. >> thank you. >> my pleasure. >> up next, we are on the money. you know what they say about ages. it sure beats the alternative. when it comes to your home, we've got some smart ways to make sure it's safe and comfortable at any age. and a mind is a terrible thing to waste. what about money?

welcome back, everybody. the number of households headed by those age 65 and older is on the upswing as baby boomers choose to stay where they are. what happens when your plan for ageing includes staying in your home? >> people love their homes. with some creative design techniques and simple thing, we can allow them to stay in their home. >> your turn. we both retired and moved to florida 18 years ago. they no longer can take care of themselves. the big thing was, was this house going to be suitable 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 get them a ramp close to the driveway and get them in the house as quickly as possible. >> it's important to have the handrail at the right height and that can be positioned specifically to the height of the person 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 too often, they're either too low or high, so we tried to position them within the reach ranges or the people we are trying to help. >> the shower stall is recessed, so there's in lip at the floor level. what it's really about the making people feel comfortable in their own homes as they age because you don't want your home becoming such an obstacle that you can't enjoy it anymore. >> with more on getting your home ready to age in place, kermit baker is the chief economist at the american institute of architects. so, we know more baby boomers are retiring and more are choosing to stay home. what sort of trends are you seeing when it comes to that group? >> well, when they decide to

stay and they need some work done on it to accommodate their evolving needs, we see a lot of home improvement activity really oriented towards this age in place phenomena. >> what does that include in wider doorways, first floor bedroom? >> the basics we look for in detining a home home would be a no step entry in the house. if it's a multiple floor house, it would be a full bathroom and bedroom on the entry level. >> it's got to be a little bit of a daunting prospect when you think about remodels, so maybe there are some easy ways to do this. some quick fixes. >> you want to start with the areas that could cause problems and maybe some quick fixes like handrails, better lighting. really kind of removing the obstacles that might exist. >> do you see differences regionally throughout the united states? are there places where this is a

more popular trend? >> 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 they really weren't designed for an ageing population. they tend to be more vertical, tend to have multiple floors, tend to have narrower doo s, thresholds, more small rooms and it just makes it difficult for an ageing population. >> one thing we've always heard about though is the idea of people picking up and moving to florida, moving to retirement communities. part is for the sun, but another is because of the taxes. >> you will see a lot of households that will move south, to florida, texas, arizona, hawaii, but some of the states are on it, but also on the top ten list are states like west virginia and maine and wyoming and montana. states that you wouldn't normally think of as having a high share of ageing pop lag.

>> i know it depends on the house and how extensive of a remodel you want to do, but what's the basic budget. >> for a few thousand bucks, the handrails, the lighting, removing obstacling. major structural things, a lot more. clearly makes sense early on to talk to someone that knows about this, an architect that focuses on ageing in place situations is helpful to kind of get a sense of what's the most effective way to spend money to fix up your home for your years ahead. >> kermit, thank you so much for joining us. up next on the money, a look at the news for the week ahead and college grads are now entering the workforce or are they? we'll take a look at the prospects and if those degrees will pay off in the long run.

go to our website and follow us on twitter. here are the stories coming up that may impact your money this week. we'll get an update on economic activity from the ism index. on tuesday, motor vehicle sales for may are due. wednesday, the federal reserve will be releasing its beige book that tracks regional economic conditions in the united states. on thursday, the european

central bank will consider whether to cut interest rates and friday is the big number of the week. we've got the jobs report coming out. also, friday, the 70th anniversary of d day 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 prospects of finding a job and having to pay all those big student loans is not a pleasant one. you now have debt average iing close to $30,000. some majors can pay off big time for grads. some, not so much. joining us now with which degrees are worth the cost is sharon epperson. you have millions of students graduating. they're getting out there, looking for the first job. the question is, where are those jobs? >> t good news is that there are job openings out there and there have been some studies, one that projected through 2020, we're going to see about 55 million job openings and about 31 million of those are from

bibby boomers getting out of the jobs. and retiring, exactly. and 24 million are actually newly created jobs, so there are opportunities out there, but yes, it is important to really try to look and see where the tuns are going b to be and to realize this is not going to be a job they are necessarily going to have for ten years. they'll probably go in there for a couple of years, then find something else. they've been improving. there are a number of places they need to be looking so they can really make the most of their money from that college degree. you talk eed about the $30,000 that a lot of students are going to have in debt. when they get out of school, they want to be making that or more and there are great opportunities to do that, particularly if you go into fields in the science, engineering, health sciences. >> so how much debt you can feel comfortable totally depends on the field you're going into. >> you really need to have an idea of the type of job you're

going to get when you get out of college. i always knew i wanted to be a journalist and some don't know and that's fine, but come up with a couple of different scenarios. find out what those jobs pay before you go in and realize you should not take out more debt than what you're going to make in your first year out of school. >> thank you. that does it for us today. i'm becky quick. thank you so much for joining me. my guest next week, the owner of the women's business networking site, 85 broad. have a great one and we'll see you next weekend.

i'm terry mcsweeney. >> and i'm diane dwyer. we're following a developing story. there's a nationwide manhunt for a bay area man suspected of possessing explosive materials. ryan chamberlain is wanted in connection with a raid on his apartment in russian hill. he should be considered armed and dangerous. agents in hazmat gear spent the whole day at the scene. according to agents, chamberlain was last scene on saturday driving a white nissan altima.

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