this is "nightly business report" with tyler mathisen and susie gharib brought to you by -- >> sailing through the historic cities and landscapes on a river you get close to iconic landmarks, to local life, to cultural treasures, viking river cruises, exploring the world in comfort. global hot spots, from cairo to istanbul turmoil in the streets. in china, japan and europe. economies under stress. what does all this instability mean for your money? >> high octane. why car buyers and truck buyers are picking them up. >> and green power, if your neighbors consume less energy than you, would you cut back? one company is begging you will and has to do with the way you think. that and more on "nightly

business report" for tuesday, july 2nd. good evening everyone, the world is watching egypt tonight. hundreds of thousands of protesters back in the square for a third day. they are calling for the resignation of the leader over the handling of the economy. the army gave him a deadline to strike a deal by tomorrow or be pushed aside but the president reportedly asked the army to withdrawal the decision. stocks dipped in the afternoon as oil prices rose. from cairo now, we have the latest. >> reporter: protesters are in the streets of cairo and across the country for a third night of demonstration calling on the president to step down after one year in power. you can hear the atmosphere behind me. it's a very tense atmosphere. people are saying arabic for leave.

it's not the opponents of the rally tonight, also supporters are hitting the streets, and that's the key concern, there will be clashes and might be an escalation. as a result, the military is on high alert. tanks, helicopters, you can hear one passing by. we're running against the deadline of the army that expires on wednesday. politicians need to figure it out then. if not, the army would put together a clean, not clear what it looks like, but we'll have to see how it works out. >> well, scenes on the ground in egypt are changing rapidly and not just egypt the world is watching, but also the protests in brazil, the civil war in syria, the economies of china, japan and political resignations in port gill. does this pose a risk to the global economy and your money?

we have the jp market strategiest worse case scenario, if president of egypt does step down and his government collapses, what does this mean for the global economy and what does this mean for american investors? >> i think for the global economy, the biggest concern both the global economy and u.s. investor, is what that means for oil prices. oil prices might in the short term spike based on what happens in egypt. we have to remember, egypt provides less than 1% of global supply. so from that prospective, you might see a spike but there are other players like saudi arabia that will open taps. this will create volatility in the oil market and equity market in the united states. >> when you get this instability in major e common es, and brazil is a major economy and istanbul

and turkey and egypt, does that change the attitude of investors globally to take on risk? >> i think all this is the outcome of a global economy, especially an emerging market that isn't growing as fast as it used to be. especially in brazil, a lot of complaints about corruption but guess what? co corporation has been around a long time. the good news is in places like brazil, the fact that people are bringing these issues to the forefront does help in the longer term for them to actually have to address it as ol' pi politicians. >> investors have been told emerging markets is where the growth is and you see the scary headlines on what is going on in the broad array of countries. what are you telling your clients, what strategic changes, if any, should investors do with portfolios and on the flip side,

are there any opportunities out of the crisis? >> great question, susie and i think you framed it perfectly. i don't think this is a time to make strategic changes. the key is to stick to the plan. my biggest concern is investors will go to cash, which i think by the way is the most risky thing you can do because that's a sure way of not meeting your goals in the long way to retirement. you can't get there with 1.7% analyzed return which is what you have on cash. you have to stay invested and stay the course. >> look at the second and third largest economies in the world and get your perspectives on china and what is going thereon and then japan. >> sure, it's the inverse for both. for china, right now, they will have short-term pain that's self-inflicted as they try to address credit concerns and growth they have had over the last couple years. that's actually going to help them as an economy not have to address bigger issues down the road.

if you look at japan, i'm concerned in the long-term considering they have a significant amount of leverage at the government level and are trying to generate inflation. don't know if they will get it, which means in the short-term they are benefits from efforts but in the longer term, i'm concerned they might not meet the target. >> fascinating information. thank you so much, as always. he's global market strateike t stocks mark early gains with auto sales, home prices and pop went the rally as traders focused on egypt's turmoil and prepared for a shortened trading session tomorrow ahead of the holiday and that big friday jobs report. the dow today off by 42 points and the nasdaq and s&p each ended about one point lower. and that worsening political crisis in egypt, which is not a big oil exporter at all still managed to send krut to close at a 14-month high below the $100

mark. as tyler just said, there was more good news about housing in may. home prices posted their biggest increase in seven years. they rose more than 12% according to real estate data provider core logic and they expect that trend to continue. while the housing market seen gains nationally, the real estate market in manhattan came to life this spring, but there is an increasing divide who types of homes are selling and who is doing the buying. >> reporter: manhattan may be an island but not to itself when it comes to issues plaguing the u.s. sales market. >> a big part of the housing equation is inventory. >> reporter: the biggest spring since 2007 with sales up 19% from a year ago, but inventory the lowest for the quarter in 13 years. why? same story as the rest of the country, negative and near

negative equity. many new yorkers owe more on mortgages than their homes are worth and are stuck in place unable to sell. >> they may have refinanced, taken out a second mortgage when they bought the home they may have been able to figure out a way to put a small amount down, smaller than they knew about. >> reporter: with so little supply, prices moved higher but only for condos which are high demand. condo prices up 14% from a year ago but flat for co-op. the med yin sell 1.25 million for a co-op $60,000. condos are rising, literally but since the cost of construction is so high, developers are targeting the high-end, the $3 million buyer and up. >> the manhattan buyer loves condos and more qualify than a

co-op that has rigged rules of how you can buy and the qualifications personally and financially. >> reporter: manhattan real estate benefits from an influx of international cash. they are fueling the condo market paying all cash and buying in some cases, multiple properties. >> the high-end buyer is looking for everything on the checklist. if you deliver it, they buy it. >> reporter: thousands of new condo units will hit the market in the next few years, but that will coincide with rising mortgage rates. that could temper general price gains but high-end manhattan apeea appears to have no limits. >> for more on the manhattan real estate market, log on to our website nbr.com. it's not just the housing market seeing big gains this year. auto sales are also in high gear, and show no sign of letting up. they are on pace for sales of nearly 16 million units. this is the most since the year

2007. detroit's big three each reported strong gains in sales last month led by smaller fuel efficient carps, pickup trucks, and crossover utility vehicles. chrysler sales rose 8%. a chevy dealership we've been tracking. we hear so much about demand that's driving sales. everyone says because the average car on the road is so old. but really, how much more demand is left out there? >> quite a bit, susie. i talked to economists looking at numbers. the average age for a vehicle on the road for the united states is under 11 years, and not dropping any time soon there are a lot of people driving old vehicles and think about this, susie, 20%, 20% of the vehicles in the united states are at least 16 years old. so that demand is out there.

>> mortgage rates are rising, what about auto rates? are they going up and what will happen to sales if they do? >> they are kicking up slightly. at this point it's not an issue. what you see from the auto loans are a couple things, one expanding at the bottom so more subprime loans going out, people with lower credit records. it's not the concern at this point. it's the healthy expansion we tend to see as auto sales increase and another thing is the increase of number of leases being offered. at the end of the day what the auto makers are trying to do is keep the monthly payment under $500 for most buyers and under $400 or $300, they will get those cars. interest rates aren't picking up. >> what people are up on is too much enthusiasm. are they getting too frothy? could they make some of the same

mistakes from prerecession? >> i don't think so. sales matching demand and as a result, this is a pretty healthy industry. >> all right. phil, thank you very much. reporting from chicago for us tonight. in the meantime, hyundai sells hit a high but a recall. more than 5000 sedans are being called back to fix a faulty air bag sensor located in the passenger seat. the sensor could make the bag fail to deploy. general motors and honda will develop cars that run on hydro again cells hoping to cut costs by sharing design and supplies while speeding up development as they rush to meet stricter e megs rumission rules regional banks hit new highs in the stock market, so which is

safer investments but first, a look at how the international market closed today. some big changes ahead for the nation's biggest banks. the federal reserve approved today a new set of rules requiring banks to increase the amount of capital they keep in reserve. this is to help prevent another financial crisis and any future taxpayer billouts. the new rules would require banks to raise the minimum capital requirement by $4.5 million. most banks are in compliance and about 100 other banks need to compile but have until 2019. the rules are expected to be approved next week by the federal deposit and the office controller. joining us to talk more

about this, a banking analyst at credit sweis. i want to talk about the big banks, specifically, as the fed and fdic seem to be targeting the large quote significant banks with these new rules and potentially stop new tougher leverage ratios down the road. as these banks get safer, i presume, will they get necessarily smaller and will they still be able to generate profit growth? >> so, i think the answer to that is they probably won't get materially smaller, but it has been a constraint on their ability to grow. in terms of profit growth, we're optimistic they will be able to generate reasonably good profits and returns. to some degree, it does depend on where that leverage ratio goes. the higher, the more difficult it will be. >> the one thing most americans worry about is how safe are these banks. you talk about the rules limit

their ability to grow. are these banks, because of these new rules, much safer today? >> susie, absolutely that are significantly safer because they have reduced the risk inside the loan part follortfolios and liq levels are higher. >> among the class of large banks that you follow, which ones do you think are best positioned to take advantage, number one, of a new tougher regulatory environment and number two, of the economic environment that you see? >> sure, so, you know, i think that the way i would think about this is that jp morgan has been really able to kind of manage through this and generate a 14 or 15% return on capital during this entire process. even last year when it had difficult problems. i think they have been in a pretty good position. i think the second name that i would mention is citi group because it derives the bulk of it's profits from outside the

u.s., and therefore, i think over time has got better growth opportunities. >> i know you the cover the big money center banks and don't really focus on regionals, and i don't want to put you on the spot, but we've been seeing a lot of these smaller banks hitting 52-week highs in the stock market. what is going on there? what you can tell us generally? >> because long-term interest rates have risen, there is a feeling that's good for banks. the difference between short-term and long-term rate social security lars is large, that's good for banks. you have to wait for the fed to increase and in the interim it could be a negative for banks. so i would be cautious about the ones who had some of the big runs. >> how important to the health of some of these larger banks is the health of the housing market in the u.s.? >> the housing market is critical. it's the largest financial

market in the country and banks finance it, and it's important to every single one of the banks in slightly different ways, even citi group, you know, which, as i said, derives the bulk of the profits from outside the u.s. has big exposures in u.s. housing and will benefit as housing does get better. >> half a minute, earning season is coming, what can we expect from big banks? >> big banks, second quarter is little weaker than first quarter. the first part of that was pretty good so i think we hope it won't be too difficult but it's a grinded out kind of situation where it's blocking and tackling. getting costs down and controlling them because it's low-growth environment. >> thank you very much. banking analyst with credit suisse. we look to a bank buyout for tonight. capital one will buy back a

million dollars worth of common stock as it closes the best buy label credit card business. the federal reserve okayed that. shares touched a new high before closing at $64.24, up 1%. lynn energy and oil and gas based sharply that the securities and exchange commission is investigating the recent acquisition. at issue here, how linn was financing the deal and accounting practices. the share lost more than $6, plunging almost 19% on heavy volume. davita healthcare was downgraded from out performed by raymond james after cutting pro vielder payments more than 9% next year. jp morgan notes says investors may mouse while the dialysis providers lobby to moderate. the shares were off 6% in the five times. they closed at $114 on the nose.

shares of creed the led lighting company touched a high as they touched $65 a share. just in time to see the shock go past that point at the open. cree did give back during the day but closed above at $66.64. that's the nearly 4% gain and one-year move there. a third day in it's existence as publicly traded, noodles jumped again as the colorado based casual dining chain sets a source and investors lined up for seconds, thirds. noodles up 35%, just since friday. up more than 22% today to close at 4$46.20. a set back for dennis today. a new york court rejected a request for a new hearing for

the former ceo of tyco. he's accused of orchestrating a 100 million dollar fraud. he's best known for throwing a $2 billion birthday party for his wife and furnishing his apartment with a $6,000 shower curtain and a $15,000 umbrella stand paid for with company money. coming up in the program, would you pay more for a bike than your first car? wait until you see the price tag attached with luxury two wheelers but first let's take a look at how stocks, bonds and commodities faired today. here is a case of keeping up with the jones and making money in the process. if you found occupant your neighbor was using less energy than you, would you make

changes? would you useless? well, one company is betting you you will. steve gives us a lesson in behavioral economics. >> reporter: dave chapman lives 35 miles out of chicago and has an unusual morning routine. >> when i get up, i make coffee and when i'm done with the coffee pot it comes out and unplunged and i walk around the house and make sure everything is unplugged. >> reporter: i want wasn't always that way. >> well, i really was not aware of my energy use at all. >> reporter: what changes is he began getting electric bills by o-power that charged up the president of the united states. >> this is a model of what we want to be seeing across the country. >> reporter: the utility bills show users not only how much power they suck but the neighbors are using. the company was founded by two. >> it comes down to basic behavioral evolution and

psychology. we are heard animals. we do what other people are doing. my neighbors seem comfortable in their houses and yet, i'm using 35% more electricity. >> reporter: half the homes of the america energy comes pouring in and analyzed down to the kilowatt but how does this play out in the real world? this graph shows what happens when o power's bills are introduced. >> as soon as we launch the program, the savings creep up, 2 and 3% savings from the group receiving this information. >> to date, we generated more than two terra watt hours, enough to power the city of st. louis and salt lake city combined for a year. >> reporter: certainly enough for david chapman that recalls the effect of realizing he was the neighborhood's energy hog.

>> this is my energy efficient neighbor and all of my neighbors and that's power in my hands. well, one other behavior you can count on, getting exercise and saving on gas money by riding a bike. but if you haven't bought a buy psyc -- by cycle in awhile, it may take some salary to get one of those on the market and marry thompson looks at the brisk market for high-end bikes. >> reporter: for cyclists willing to spend, it is about the bike. mountain bikers want bigger reels, racers want lighter frames and all want gears to be start of the art. >> they want the best of the best. >> reporter: he mornings bike habitat in new york city. he doesn't carry the $32,000 lambo bike. there is demand for this s works

tarmac built by specialized, retails for $12,000. >> we'll do probably roughly a halo bike a month in the on season, and during -- even during the off season, we take orders. >> reporter: designing high-end bikes like the tarmac helps the line high and low. >> high end affects low end. so you know the performance will trickle through regardless of the price level. >> reporter: performance in the technology behind it, key to driving new sales in the u.s. 6 million dollar bike industry where an average bike owner will spend $420 on a bike but an enthusiasts will spent over $1100. >> people with money and time on their hand that have an ethic towards exercise and fitness and the baby boom generation still drives a lot of sales in our industry. >> reporter: the data bares this out, the nation's 4100 independent dealers like bike habitat sell more expensive bikes and account for 15% of the unit sales but 52% of the dollar

total. so what's next in bikes? like this one, $5900, the electric motor gives more power to the peddle and they hope this will get more people off the couch, out of their cars and on the bikes. for "nightly business report," i'm marry thompson in new york city. the obama administration announced it will delay by one year the affordable care act employ eer mandate. it won't begin until 2015. after discusses with business groups, the treasury department said it's doing so to prepare business leaders with more time to prepare for the transition and adapt to the new reporting systems, but administration is asking employers with more than 50 employees to still consider providing insurance for them beginning next year. and that's "nightly business

report" for tonight. i'm susie gharib, thanks so much for watch. >> i'm tyler mathisen, thanks from me, as well, and we'll see you back here tomorrow night. "nightly business report" has been brought to you by -- >> sailing through the historic cities and landscapes on a river you get close to iconic landmarks to local life, to cultural treasures, viking river cruises, exploring the world in comfort.

>> announcer: the following kqed production was produced in high definition. >> narrator: this time on "spark" -- >> reporting live from inside hillary clinton's left tear duct. >> narrator: political cartoonist mark fiore trades his pen for a mouse. >> an animation has to come out of my brain 52 weeks a year. >> what's this? >> narrator: then a.c.t. mounts a radical play set in 1960s apartheid south africa. >> do you still want the farm? >> shut up! >> narrator: and painter hung liu's memories of the chinese cultural revolution haunt her heroic portraits. next on "spark." >> narrator: major support for spark is provided by -- the james irvine foundation, expanding opportunity for the people of california, the william and gretchen kimball fund, diane b. wilsey,