this is nightly biness port with sue herera, and bill griffith. >> rolling along, the dow soars more than 300 poi ts close back above 25,000 just asom say they see turbulence on the horizon. >> hang on tight, home prices could rise at twice the speed of inflation and pay. some say that is not sustain able. >> companies cannot find the right rkers, but a program in louisville kentucky may have found a solutionign h schools. >> those stories and much more tonight on night business report for this wednesday, june 6th. >> good evening, everyone and welcome. a mid week surprise onall street. stocks surged thanks to a rally in the banking sector.

interest rates rose and the eld on the 10-year treasury inched all that much kbloeser to 3%. also helping the dow, boeing which closed at a record. stocks took off. the dow jones industrial average soared 343 points to 25,146, it's highest close since march. the nasdaq gained one. >> and despite the continued rise of equity w pricesre seeing, one long time market watcher says he has started selling stocks during rallies we saw like today. >> i'm sympathetic to thede that sometime in the 24 months there will be inflation rates that catch up to the market as

we normalize. >> next year could be aen turb one for the stock market as the federal reserve raises interest rates. that is similar to what the orld's largest hedge nund is saying right now. etidgewater associates said 2019 isng up to be a dangerous period for the economy. as the fiscal r stimulusls off. the impact of the feds tightening will be peaking. >> what could test the market in the coming months, and what b should investoe watching for many. >> wall street has been contending with a spade ofco erns. the markets seem to have made their peace with these issues. tech s share new records and market volatility sett.s for the ye as the sometimes jumpy summer trading season gets underway. for one, what if goldilocks goes

missing. the past two months has been strong but not too strong, which has allowed treasury yields to pull back a back. evidence has started to build that worker shortages are raising costs for businesses. which could threaten the not too hot, into the too cold backdrop that usually allows stocks to thrive. might the federalen reserve s the message that three more rate hikes this year are very much on the table. >> last ngweek's turbulence co out of europe. traders reduced their bets one for sure next week, and another in coming months. stock and bond prices are probably not positioned for a moreggressive fed than that. investors are on f alert a globals mishap central banks tighten financial conditions. focus is landing on stress and dollar borrowing at a time when u.s. government deficits and the

fedledding its bond holdings, meaning dollars are being pulled back home in large numbers, raising their costs abroad. there have been some hints of this kf dress which bare monitoring much. there's always a chance that stocks can aorb them. it's only when the news is obvious, that the next scare may come. >> with respect to the investors starting to issue market warnings, should investors start playing defense. >> joining us tonight chief thvestment officer at boston private we >> thanks for joining us tonight. >> you're not all that concerned about 2019, unlike bridgewater associates or lee cooperman, right? fair.hink that's what we've been focused on is

ehe u.s. economy. i think where asad a pull back in tech prices, in the earl2000s, and then we had the housing crisis in 2008, we're looking for this next recession to be a more typical on and we're not seeing u.s. economic data indicating there's a deterioration ahead of reus. anly not much for 2019 unless something changes dramatically over the next several months. >> would that a change be more aggressive fed perhaps? or not. >> that is one of the bigger threats. e of the things we're thinking about is, as you mentioned, there are two hikes expected this year. if we get another hike, making it f four this year, the markets will have trouble digesting that. even in the face of continued inflation and wage growth, we're less concerned the fed would raise interest rates.

that is probably the one thing th could potentially lead us to a quicker recession than in the 2020 time frame. >> if we are telling people they should startnk tg defense. what do you think would be a good defense? >> if wehink abouthe traditional value stocks. those remain sort of under pressure right now.ld dividend y are not as attractive as they typically were from aen d better spektdive. you think about quality and tirnings. those are very important to traditional investors, technology right now, although it's experienced some great some veryre's still quality companies in the technology sector that make sense as more of a defensive nature. we are also in the late cycle, cyclicals, there are undervalued cyclicals that could make sense for clients in the next 12 to 18

months. >> whet about headline risk, we certainly saw it earlier last week with italy andf somee turmoil in europe. also, we still have not resolded numerous tssues that are out there. i think as long as we're continuing to see trade policy focused on small parts of the economy, areas of the economy that are not particularly added to gdp. it's a fairly limited scope. if we srt to see a significant ramp up from our trading partners as that are as tariffs nd we start to expect there to be a lasting economic impacr from the policy, i think that's something that could accelera the recession in a would change our view for late 2019. >> shannon, thanks again for joining us tonight. >> thank you. t the economy now, where the trade deficit narrowed to the lowest level since

september. exports were lifted by an increase of shipments in industrial materials and soybeans. the trade numbers point to strong economic growth. as we've been reporting, the economists warn that those rising trade tensions could pose t threat to t outlook. >> american workers were not as producti in the first quarter as originally thought. the labor department said the increase in productivity, was only roughly half what was first reported, that's because unit labor costs or how much it costs to mak each productose a bit more than expected. >> when productivity rises and workers increase how much they produce per hour, companies make bigger profits and in theory they give larger pay raises. >> to the labor market itself where ups workers voted t overwhelming cause a strike. which could be the biggest one the country has seen in decades. they have the option toalk out

if current contract talks fail. at issue is how upsxp willd to offer deliveries seven days a week. both sides not theote does not mean a strike is imminent. >> as we reported riyesterday, t now there are more job openings than there arelorkers to f them, part of the problem is that not enough workers he the skills that employers need right now. an innovative program in louisville kentucky ismp atting to close that skills gap. it starts in high school. >> here in louisville, kentucky, a lot of the service pays are empty, not because tre are not enough cars to hefix, t aren't enough mechanics to do the fixing. >> they are no longer change the oil, change they belts, te hooked up to a diagnostic machine, you have to know how to read the codes. sometimes you have to know how

to write codes. >> the government reports a record $6.7 million job openings. they can't find the skilled worker to do the jobs. >> it's a high class problem to have. our econo is little hotter than our workforce's ability to keep up with it >> that has sparked a national debate about education. should kids learn trades i school or go on to get a college degree? >> not every student is a tllege student. we've been tryin create the opportunities and let them understand, this is a great field for l you tok into. >> the city of louisville is addressing the question between the academies. the public school system and city governmentadstablishes schools in the high school system. >> with traditional education, you're going to be sitting in the desk a lot. i'll be graduating with my certification and knowore about health care than people i

will be going to college with. >> they can choose from 140 career paths, ranging from weing and manufacturing to health sciences. 18-year-oldio senis learning a trade now but plans to go on to get a college degree. >> this is my favorit thing. also, after i finished my career in here, i'm going to be studying for airplane engineering. >> all too often in school, the curriculum hasn't changed in a century. we know our world has changed in a century, we have to provide kids with engagingti opportunies in school that are going to make them successful in today's world oncehey get out, they have to be successful in college and our career. it's our responsibility to mee those needs of our students. >> for nightly business report, i'm steve liesman. >> great story. time to take a look at some of today's yun grades andown

grades. cigna was upgraded by neutral, cigna is positioned to continue to irease market share gains in the commercial risk market. the price target is $212. val yans raiding was upgreated from erweight to equal weight. va valian stabilized to 25 pngt 41. >> the analysts say the manufacturer is positioned for growth right now, raise the price target to 33, shares soared by 15% as a result today, to 27.45. shares of floor and de co holdings were upgraded. the analysts ss growthhead even as interest rates continue to rise. price target $58.

they gained 7 1/2% to52.48. still ahead, what happens to the housing market if home pric rise twice as fast as wages? we'll ask an expert next. the recent din in mortgage rates n has gone unnoticed. mortgage applications rose 4% last week. that was lower than a year ago. >> and while mortgage applications are higher. a new reuters pole found that home prices are rising at twice the rate of inflation and wages.

so when will we see conditions in the houng market normalize? we're joined tonight by lawrenc yun. he took part in that poll. welcome, it's nice tohe have yo . >> thanks for having me often . when will we see a more normal housing market. it's been tight for so very lodge. >> we need more inventory, the only way to do that is to have more construction. it could be possible if some of the rl estatenvestors begin to unload. there are no signs of that, we are left with new home construction as the only game in town to increase in it's a sluggish pace, rising but not back to historical normal. i anticipate maybe toward the end of the wyear, may begin to see stoppage and decline in inventory. that does not mean we're back to

normal, it means that inventory will no longer fall. it will still be a tight market. >> why have builders not been building enough to keep u with the pace of demand? i mean, you have supplies guess. the rise in prices therno noth land. the fear we could have another financial crisis, they have yet to recover from. what's going on here, do you think? >> the fear of nancial crisis is misplaced. banks are in a much healthier condition many the mortgage underwriting standards are very tight. going to high credit score individual and the default rates are historically low. the condition as to why the builders are slow in recovering is partly due to the prior segment. there's not enough skilled construction workers. everything from wood framers, carpentry, welding, that is holding back some of the covery potential. the other is that the material cost that goes into

construction, recentlyas bee rising much faster than other price component. lumber for example has risen 60% over the past t years, partly from global economic recovery, t also the tariffs adding to the costs. small buiers are n in the game because they have had a hard time getting the construction loans from the community banks. > is that increasing costs ross the board why you think that home prices will move at -- to the upside at twice the pace of pay and >>wages? ight now we're in a housing shortage, based on the momentum factor, how much the builders can bring additional homes online over the next two years. it looks like we may continue to see the shortage conditions. maybe not the acurt se of today's condition, but we have to remember past fiv years, home prices have risen roughly 40%, while people wages have

only risen by 12%. almost 4o 1 ratio. that trend can simply not continue, it's unsustainable, the only way to moderate homero priceh is to have more construction fp. >> we will see, thank you so much. appreciate it. >> thank yo >> lawrence yun, with the national association of realtors >> quarterly results shine. and that is where we begin s tonigharket focus. the owner of scales and jared supported a price profit in the businessce same store sales were flat, that was a lot better than a blysts hadeen estimating, and it marked a big improvement from a year ago. shares popped. meanwhilea health is stepping down from his role following recentns allegat of inappropriate behavior, company also named former ge ceo as executive chairman and says it's considering selling itself,ow

fog pressure from an activist investor hedge fund. shares of athenaealth climbed by 4% today to 157.44. delta said rising fuel costs would cause profits to come in lower than expected in the quarter. shares were off by 1% a a result today. sue? >> bill, united health group raises its dividend 20%. the heah insurer said it plans to buy back 100 million shares.f shares united health group rose nearly 2% to 48.65. jack daniels maker brown foreman warned that rising prices would be pressured on rising freight and raw materials costs. brown foreman said it wasic dit to accurately predict future results. a portion of brown foreman's

total sales comes from europe, mexico andanada. >> and after the bell, the discount retailer five below reported a rise inof sales and s, and thats street estimates, as well as its own expectations. the companyave upbeat guidance for the quarter and the full yeo. they plan open more than 1,000 more stores across the country. >> the shas were initially higher in after hours, they also finishished the regular season to 81.28. the push to get moreen w the road map to power in silicon valley.

there are reports tonight that fidelity investment is ptshi pushing toward c according to business insiders, such ald move w represent one of the biggest moves by a wall street firm into the market for digital assets. fidelity is best known as being a provider of 401(k) and other retirement products. >> women are carrying the biggest share of the country's outstanding student loan debt. according to an education efficacy group, women owe nearly $900 billion in studentloans, nearly 2/3 of the total. it will takeonger foromen than men to repay their loans. potentially racking up more interest and falling deeper into debt. women comprised less than 1/3 of silicon valle employees. even fewer are founders of companies with fancial backing from venture capitalists and a

small lymber established e stakes in start-ups. a group of investors is trying to close that gap, and they say it all starts with a legal docume document. >> coo of chat party, started the company when she was pregnant with her second child. >> the single young male who's dedicating their entire life to build an empire, and lfortunately, that didn'k like me. >> she was convinced by angel inveor to leave an executive job at tumblr to co found house party. a big risk in exchange for potentially big upside. a chunk of shares on the company's cap table. the legal document who records who's going to make money. e cap table is more fan a legal document, though. it is the road map to power in

silicon valley. the wealth funds next generations of start-ups. >> the investing collective is focused on gettingta-ups to allocate more shares to women. >> the angels have invested in more than 60 companies in the last flee years. to explain the upside they'll have, if they offer more shares to female hires. >> the angels host dozens of events to discuss the cap table event. >> when you are neg eesh yating for eqty,here's no real road map to understand how you can value the equity, how much growth a company is going to have. it's been harder for women and underrepresented minorities to negotiate as well. >> the angels help place womenio n senr rolls at early stage start-ups. they partner with vin tour capital investors including sequoia and kleiner perkins. >> fin barnes hasra collad

with the angels on an investing boot example and a number of deals. >> their networks tended to be the majority female. and equally amazing to any other twork we could t into. >> it helped us bring the diversityf their networks into our community. >> the next step for the angels, pushing start-ups to disclose diversity. >> understanding what percentage of the cap table are women is goin to be a watershed moment in the industry. just as getting the initial diversity reports were many >> in themeantime, the angels are working to change silicon valley's power balance. by helping executives make sure employees their fair share. >> the early women who were here helpedefine our culture and our product and our organization. but they'll also be part of the wealth creation one die should we exit. >> i'm julia borstyn in los

angeles. before we go, here's another look at the day on wall street, the dow soared 346 points takin it back above 25,000. the nasdaq gained 51 about and the s&p 500 added 23. that will do it tonig for nightly business report. we want to remind you, this is the time of year, your public television station seeks your support. >> we thank you for that support. hareat evening, sue and i will see you again tomorrow.

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