>> announcer: this is "nightly business report" with tyler mathisen and sue herer triple-header. all three major indexes closed at new highs. and the investor optimism comes on the eve of the jobs report. one of the most important gauges of the u.s. economy. budget pain. why the white house' proposed budget has some in the heartland growing concerned. sky high. insurers want to assess hurricane damage and cut checks more quickly. and they're going to new heights to do that. those stories and more tonight on "nightly business report" for this thursday. it's already june 1. good evening, everybody. i'm bill griffeth in tonight for tyler mathisen, coming to you this evening from the new york stock exchange.

good evening, sue. >> good evening, bill. i'm sue herera. welcome, everybody. records were set on wall street today. the dow, the s&p 500 and the nasdaq all closed at levels they've never closed at before. the investor came on the eve, as bill mentioned, of the employment report for may. let's get to the numbers on this first trading day of june. the dow jones industrials dow jones industrials advanced to 21,144. the nasdaq gained 48. and the s&p 500 rose 18. and wall street's enthusiasm was due in part to the latest reports on the labor market. private businesses added more than 250,000 jobs last month. that was well ahead of estimates. and payroll processor adp said the hiring primarily came with companies with fewer than 500 employees. it accounted for three-quarters of the jobs that were added in may. and tomorrow, of course, the government's monthly employment report will be released. expectations for non-foreign

payrolls to be increased by 184,000 and for the unemployment rate to remain steady at its 4.4% rate. however, general motors will eliminate one of two shifts at a michigan transmission plant. the automaker won't say how many workers are affected. but there are reports it could be roughly 300 positions. and those job cuts come amid lackluster sales last month at most of the major automakers. in fact it was the slowest pace we've seen in more than two years. but amid the unimpressive numbers, there were signs that may give investors hope that the auto industry can stay highly profitable even as sales slow. phil lebeau explains. >> reporter: there was mixed news in america's showrooms last month. let's start with the not so good news. sales were unimpressive. only ford posted slightly positive results among the big four automakers. once again, trucks and suvs are

driving demand while car sales continue to slide. even with some models carrying huge incentives. as a result, may was the third straight month with sales under 17 million vehicles, the slowest three-month period since 2014. >> it's a cyclical business. some cooling-off was inevitable. and guess what? it's happening. >> reporter: while automakers are wrestling with slower demand, they appear to be showing some discipline when it comes to incentives. that's the good news from last month. the amount of money to close a deal, even when you factor in discounts when selling cars, was relatively flat for april. meanwhile, automakers are expected to curb production as they head into summer to help ease bulging inventories. one other piece of good news for the auto industry is the overall health of the u.s. economy. the combination of low unemployment along with high consumer confidence should drive

relatively strong sales as the industry heads into the summer. phil lebeau, "nightly business report," chicago. but one part of the automotive industry that's expected to see big growth is driverless cars. a new report today says it could be worth $7 trillion by the year 2050. that figure includes industries that will contribute to and be created by autonomous driving. the study adds that it's too soon to predict which companies are poised to grab the biggest share of that market, bill. elsewhere, sue, construction spending recorded its biggest decline in a year. investment in both private and public projects fell in april. according to the commerce department, overall spending fell nearly 1.5% in that time. the president will withdraw the united states from the paris climate accord. in a speech in the white house rose garden, president trump said the agreement was harming the economy. >> the cost to the economy at this time would be close to $3

trillion in lost gdp and $6.5 milli -- 6.5 million industrial jobs. while households would have $7,000 less income and in many cases much worse than that. >> the decision, though, goes against the advice of a number of executives from america's biggest corporations. that withdrawal process could take up to four ye as you know, the white house recently released its proposed budget for the upcoming fiscal year. it includes sharp cuts in spending to our nation's heartland. and one kansas farmer is growing concerned. >> reporter: derrick sawyer's family has been farming in mcpherson county, kansas for four generations. they grow wheat, corn, and soybeans, they raise cattle, and they even have horses. all of that is possible, sawyer says, because of the federal

crop insurance program. >> the crop insurance has always been a big part of what we do. more for the assurance that if we have a disaster, it will help cover the costs of production. it's definitely not a program that we're going to get rich over. >> reporter: but president trump's latest budget axes agriculture programs, $28 billion from crop insurance, nearly $6 billion from conservation efforts. $650 million from direct subsidies to farmers. the grand total, $38 billion. white house budget director mick mulvaney agrees that crop insurance is critical to farmers. but he says that's exactly why they don't need a big subsidy to get them to buy it. he also recently told lawmakers that the administration is helping small town america by rolling back regulations. >> farmers are farmers. they want to grow stuff and they want to be productive. they don't want to be paper pushers who trying to figure how the federal government is going

to punish them for doing something that thought was right. >> reporter: still, some republicans are crying foul. senator pat roberts of kansas and represent michael conaway of texas oppose the cuts. they're the chairmen of the two agriculture committees in congress. they pledge to protect the farmers' safety net. the president's budget is just the starting point for negotiations. many farm states voted for trump. sawyer said he's hopeful that means the white house will listen to people like him. >> we knew there wasn't a perfect candidate. and honestly, there never really is. but what i believe in is smaller federal government, more local control, and fiscal responsibility. and, you know, i feel that we can really work with the president through his new secretary of agriculture, sonny perdue. >> reporter: yet the administration has already disappointed some farmers on issues like trade and immigration. they're hoping that cutting crop insurance won't end up being the final straw.

for "nightly business report." >> by the way, on our website you can read more about farmers and the proposed budget. log on to nbr.com. sue? bill, as we told you, the major indexes sit at all-time highs. a recent report, though, suggests that you can increase returns and reduce risk with alternative strategies. our guest is the chief investment strategist at raymond james. jeff, good to see you as always, welcome. >> you bet, sue, thanks. >> you say one of the things you're looking at to diversify a portfolio are certain commodities. you say they're in the bottoming formation. >> yes, if you look at the crb index or the goldman sachs commodity index, it looks to us like they're trying to form a bottom here. it's probably best represented

by energy. energy is out of favor. and some of the stocks are off, in fact some of the stocks are off 40, 45% from their recent highs. i like to buy things that are out of favor, because they tend to come back into favor. >> you also like mexico, jeff. in fact you like it more than china. why? >> well, what's happened in china, the wages over the past five years have gone up five-fold. yet the chinese workers are still disgruntled. so the quality of some of the things they are producing has come down. i don't know if you saw this, bill, but foxconn, that was building the iphones for apple, is going to build a plant in the u.s. mexico i think is going to be the new china. their production standards are up to u.s. quality standards. and the transportation costs are a lot less, even if we do build a wall. >> how would you do that, how would you play mexico or any other country that you like around t? >> i would use the exchange created funds to do it, or a

mexican centric mutual fund. active management, i prefer that over passive management. active managers have been outperforming in the quarter, i think that's going to continue. >> since the election, the s&p is up about 13%. the dow is up 15%. the nasdaq up 16%. but you still think the u.s. is cheap. make your case there, and where would you put money to work right now? >> you have more high growth, high margin stocks in the s&p than ever by definition. that means you should have higher valuations than historic. you have this changed from tangible assets in the '80s to intangible assets on balance sheets. by definition, that means valuation should be higher. if you take out the aberrational low pe's in the '70s and '80s that occurred because of double digit inflation and interest rates and started in 1990 and look at the pe at the beginning of this year up until this year, you find the average pe is

23.85. so we're trading at about 18 times this year's estimate, every one-point drop in the corporate tax rate adds $1.31 to that estimate. >> on that note, jeff, thank you as always. >> always a pleasure, sue. >> bill? still ahead, assessing the damage. why the sky's the limit for property insurers. it is june 1. that means it's the start of hurricane season. this year, the national oceanic and atmospheric administration is predicting a 70% chance of 11 to 17 named storms in the

atlantic. morgan brennan is in windsor, connecticut with an inside look at how the insurance industry is >> maybe we have damage to this roof, maybe it's hail, maybe it's wind. >> reporter: at travelers claim university, 7500 adjusters come through each year. they learn how to assess property damage using two model homes inside the hartford area facility. why did you choose these two model homes to use? >> really to reflect the differences in complexity of properties that we see all around the country. >> reporter: the senior vice president of claims for travelers. >> this might be something typical of tree damage. >> reporter: but this year, there's something new to learn. drones. the company began using the technology in an official capacity last year, deploying drones to help assess damage from hurricane matthew. >> it can take days off the process. >> reporter: meaning checks can be cut more quickly for repairs.

travelers has 150 faa-certified drone operators and hopes to have 700 by next year. and they're not alone. state farm and all state are working to expand their usage as well. it's not just drones either. during hurricane season, what does this room look like? >> if we have an event, this room is packed. >> reporter: the catastrophe response center provides instant analysis as events unfold on the ground. >> we've been able to recreate a tornado path just based on the images that people put out on social media. >> reporter: travelers and other property/casualty insurers say they prepare for the worst all year long. something the national oceanic and atmospheric administration says is essential for everyone. >> there is a potential for a lot of atlantic storm activity this year. we cannot stop hundredrricanes. but again, we can prepare for

them. >> reporter: i'm morgan brennan for "nightly business report" in windsor, connecticut. communications equipment maker sienna tops expectations. that's where we begin tonight's market focus. the company reported profit and sales that rose, and called the quarter, quote, outstanding. sienna sees this quarter's revenue coming in slightly higher than estimates. as a result, shares popped more than 15% to $27.19. but clothing retailer express missed revenue estimates despite seeing solid demand in its e-commerce business. the company reported a wider than expected loss and same-store sales that did not impress analysts. despite downbeat guidance for the year, express says it's confident it's taking the right steps to improve the company's performance. investors weren't buying it. shares plunged by 19% to $6.27. a rise in customer spending

saw revenue increase at dollar general thanks to same-store sales. profit was ahead of targets and the company says it has the right strategy in place to bring more shoppers into the store. dollar general shares rose more than 6.5% to $78.19. machinery maker deere says it's buying a german company for $5 billion. it said it will expand its current equipment construction portfolio and grow its footprint. deere shares were up nearly 2% to $124.70. athletic apparel company lululemon reported a rise in earnings which topped forecasts. same-store sales edged lower but the results were still better than what wall street were looking for. the company sees revenue for the current quarter above estimates. shares initially shot up in afterhours trading and they ended the regular session up just a fraction to $48.67. and home furnishings retailer rh, formerly known as

restoration hardware, beat sales expectations while its earnings were in line. the company raised its sales guidance for the year but slashed its profit outlook, saying it remains cautious due to an uncertain environment and planned investments. shares initially got crushed in afterhours trading, losing about a quarter of their value, and erasing an earlier 2% gain when the stock closed at $57.25. despite today's robust adp report we told you about earlier, and wall street's high expectations for the big jobs report coming out tomorrow, there is still some concern and doubt about the lack of skilled workers in our country. ben castleman is achieve economics writer for 538.com. he says the so-called skills gap is a myth. but merriman berivesh believes it's real. he's chief economist at ihs market. good to see you both. >> thanks for having me. >> ben, what do you mean, a

myth? the theory is there are oftentimes not enough skilled workers to meet the supply that's out there for many of the companies out there. you disagree with that. why? >> yeah, i mean, look, i hear this from ceos and from executives all the time. i don't doubt that on an individual level, if you're a company, you're trying to hire somebody i'm trying to hire, it's tough to find people, right? but in terms of sort of looking across the economy, is there a shortage of people that is somehow holding back the economy, that is making it hard for us to reach our potential? i don't see the evidence. and the best evidence i can point to there is look at wages. you just don't see the kind of wage growth you would think we would see if people couldn't find good workers. >> merriman, you do think there's a skills gap, so take the other side of that argument. >> well, let's look at soft data and let's look at some hard data. i mean, a lot of business surveys, ihs market or the institute for supply management or the national federation of independent businesses, they're

all saying the skills shortages, the shortage of skilled workers, is one of the top two or three challenges. by most estimates, something like 40% of businesses are saying they can't find enough skilled workers. so i have to believe in those numbers. i can't just dismiss them and say well, you know, what are they talking about. this is pervasive. let's look at some of the hard numbers. ben raised the wage question. if you look at the atlanta federal reserve wage tracker, high educated wage earners are earning -- their wage increase is about 4% a year. where is low educated workers, they're wage increases are growing by 3% a year. that suggests there's a problem here in terms of just a growth in wages, forget the levels. so i think there is a skills shortage. and a lot of the hard data point to that, including the unemployment rate. unemployment rates of people with a college education, 2.4%. unemployment rates of people without even a high school

degree, 6.5%. that tells you something. >> ben? >> yeah, although i mean, the gap in the unemployment rate has not been widening, if anything, it's been narrowing. if anything, we're seeing an economy that's starting to put people back to work. i think it's important to distinguish here between a skills gap and an economy that is doing better or a labor market that's doing better. is it harder for companies to hire now than it was when the unemployment rate was 8%, 9%, 10%? absolutely. and we should be glad that it's higher for them to hire because that's when you start to see wage growth. i drilled down on a few of the specific occupations that i'm always hearing are difficult to fill. whether we're talking about software engineers and developers or the skilled trades that i hear a lot about, electricians and welders. none of those show the kind of really strong, aggressive wage growth that you would expect to see if companies were really struggling to fill positions. >> merriman, i think you would point to the competition to get

the h1-b visas as an indication that highly skilled workers are being sought after and they're not being filled here in the united states necessarily. >> absolutely. and i know there's a lot of controversy around the program, it's been abused. i won't deny any of that. but nevertheless, the fact that these visas get snapped up basically within a day suggests that in fact companies are desperate, maybe that's too strong a word, but really need high skilled, especially the high tech workers. now, in terms of conversations i have with ceos of companies, they don't complain they don't have enough landscapers. they do complain they don't have enough engineers. again, that's anecdotal information, but it's there, and so we hear it all the time. >> i mean, look, i'm going to go after this and watch the nba finals, right? i wish lebron james were on my team, i think everybody wishes that. that doesn't mean there's a shortage of 6'8" forwards, right?

it means he's a singular talent. people with particular skills, there's a demand for them and they'll always get paid accordingly. a shortage is, we can't get enough nba players to put a good product on the court, we can't grow the league. that's what i don't think we're seeing, the kind of shortages that are holding back the economy in any meaningful way. >> tell that to my los angeles lakers. that's for another discussion. ben castleman, thank you. merriman, always good to see you. thank you for joining us tonight. >> thank you. speaking of the nba, coming up, it's game time. the newest silicon valley players are on the court and in the boardroom.

two well-known retailers are closing more stores. payless will shut about 800 locations in total as its bankruptcy reorganization moves forward. separately, radio shack has closed more than 1,000 stores just since memorial day weekend. back in march, its parent company proposed closing just 200. at its peak the electronics retailer had more than 7,000 storefronts and claimed it had a location within three miles of 95% of all american households. and uber lost more than $700 million in the first quarter. that's a lot of money but it's actually narrower than the loss it claimed for the final three months of last year. the ride hailing company also reported a rise in revenue. and the company says it is on the path to profitability. but it wasn't all positive. uber's head of finance is leaving, becoming just the latest in an enough highly

profile executive departures there. as bill knows very well, this is one of the most intense rivalries in basketball. for the third straight season, the golden state warriors will take on the cleveland cavaliers in the nba finals. and for the warriors, it's their work off the court that is really paying off. josh lipton is at the oracle arena. >> reporter: the golden state warriors are one of the best teams in basketball. and the team is different from any other in sports. it holds a distinct advantage. some of the stars are dedicated tech investors with a direct line to the most influential people in silicon valley. newcomer kevin duran invests in things like an app to help low income americans manage their benefits, to food delivery startups. andre igwadala holds stakes in

health and wellness companies. he not only invests, he tries to educate other players on the value of investing. >> we're doing a crash course in the tech industry and nba players were directly involved with the tech world, whether we know it or not. >> reporter: and steph curry invests in an app which connects athletes with a network of local coaches. he co-founded a small company that sells marketing software called slice, whose ceo says curry is an invaluable recruiting tool in silicon valley. >> the fact that steph comes to our office space once in a while or that we go to a game and talk to him afterwards is not something that any other startup is able to do. roc >> reporter: the benefits can be mutual. players create portfolios of investments that could generate returns long after they retire. startups get help from superstars to promote their brands. the warriors' roots run deep in

silicon valley. the owner of the warriors who bought it in 2010 is a venture capitalist. he partnered with an entertainment mogul, peter gruber, and formed an investor group. the warriors' draymond green says that's who he looks to for investment advice. >> one of my mentors on the investor side is tomas. all of a sudden you can kind of see trends and, you know, which companies are doing well, which companies aren't doing so well. >> reporter: professional athletes have long invested their millions in areas like real estate, to build their savings for life after basketball. but industry experts say today's younger players tend to be more sophisticated and personally involved with their investments. in addition to money and prestige, famous players bring

some pretty attractive perks to young startups. for example, brian barr of slice will be at the game here tonight along with his parents, courtesy of his friend and co-founder, steph curry. for "nightly business report," i'm josh lipton, oakland, california. >> love that story. that's right up your alley, bill. >> absolutely. should be a great series. looking forward to it very much. that does it for us tonight. i'm sue herera. thanks for joining us. >> i'm bill griffeth. have a great evening. we'll see you >> this is "bbc world news

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