this is "nightly business report" with bill griffith and sue herrera. >> cruise control. auto sales defy expectations ane in solid despite rising interest rates and an escalation in trade tensions. summer heat. home prices across the country are hding higher, except in the heart of the largest city in the country. risingisks. howaton rouge is battling extreme weather to keep its property protected. those stories and much more toniest on "nightly bs report" for tuesday, july 3rd. and we bid you good evening, everybody. there was no shortage of news on this shortened holiday trading session. we begin with auto sales for june. this key economic sector has proven to be resilient despiteo g storm clouds from those trade fights we've been telling you about.

ericans are stilluying cars and trucks at a strong pace, and that helped automakers close out the fst half of this year with another solid month in the showrooms. >> reporter: call it cruise control. auto dealers enjoyed steady demand in june, driven once again by consumers looking for pickups and crossover utility vehicles. that helped the largest automakers post positive sales last month. >> they look great, you know. even as car h salese kind of collapsed, truck and suv sales or it.ore than made up so the overall impact is still rrowth, and truthfully, growth in higrofit vehicles. so it's still great news for the autokers, at least today. >> reporter: for general motors, which reported second qrter sales, the last three months show the automaker is succeeding in pushing pskup tru and crossover utility vehicles. in the second quarter, gm has been able to push the average transaction price to a record high. the big question weighing on the

auto industry t what impact will president trump's push for higher tariffs on steel, aluminum, and potentially imported vehicles have on demand? for no germany's most popular brands are still seeing solid sales, but if u the. puts a 25% tariff on imported bmws, audis, or mercedes-benz, will buyers walaway instead of paying several thousand dollars more for a particular model? overall, auto tariffs would d c the biggest threat to one of the best runs of strong sales the auto industry has evereen. but t second half of this year could be a bumpy one for the auto instry, especially if new tariffs are put in place for imported vehicles, which could drive up prices in the showroom. phil lebeau, "nightly business report," chicago. > let's turn now to jeremy for more on the potential auto tariffs andhat it might mea for the auto industry and of course for you. he's an auto industry analyst at edmonds. good to see you, jeremy.

welcome back. >> hello. thank you so much. >> we certainly don't know whether or actually going to go into place, but for the sake of argument, let's assume they do. what net/net do you think the bottom line impact would be for automakers? >> you know, in all iterations of this, we've ran a forecast d it does look like it's going to be a severe blow to automakers if these tariffs do come to pass. we're looking at sales potentially in the millions jus because of how much that cost is going to be deferred to shoppers. jeremy, i an old chess player. i'm always trying to think ahead to the next move. what's the next move in this whole situation here? i mean, obviously the objective is to g more production here to the unid states. if there's enough pain, do you think automakers would do that? >> you know, i thi that's one of those casesf this maybe achieving the opposite of its intention. this policy aimed at increasing

american jobs actually could -- if you look at the cascading effects when you look at the reduction in sales and the hit to not only producti also the dealer networks. >> is there a number at which suu think the cr will pull back and say, no, i'm not going to buy that car? imean, is it $1,000, $5,000, or do we know? >> you know, shoppers right now are already operating at the very end of their budget. new vehicles in 2018 are costing shopperspwds of $35,000. so there's not a whole lot of wiggle room they have left. when you look at the potential impact of these tariffs, and we're talking thousands that'll be passedn to the shoppers, anywhere from two to eight, that's definitely going t dissuade shoppers from entering the market. so these wilbe significant, and it almost certainly will deter shoppers. >> does this hit the automotive industry overall equally, or are there certain automakers you could see being hur more than others?

>> you know, everybody's going to feel the brunt of this. even the domestic automakers will be impacted. they will be impacte though than some of their japanese and german counterparts. the german automaker do produce the most vehicles abroad comparat,ely. >> jere thank you so much. >> of course. well, on wall street, we had an early rally that fizzled by the close. technology shares clined, offsetting gains in energy. ngt surpri, trading volume was light during this shortened session ahead of tomorrow's fourth of july holiday, when, by the way, the markets will be closed. by the close of trade t 1:00 p.m. eastern time, the dow industrial average fell by 132 points to17 2 the nasdaq was down 65. and the s&p 500ropped by 13. as for the price of domestic crude, it topped 5 for the first time since 2014 and then fell sharplyn report that saudi arabia is ready to add more oil to the market to end

the day little changed. ftory ordersose in may, easily exceeding an expected decline. new orders for u.s. made goods increased 0.4%, pointing to ain strength of the manufacturing sector. the report also showed business spending on equipment is showing signs of potential slowing. > meantime, the rate of job growth and wage increases at small businesses dpped in june. this is according to a new study from payroll company paychecks. 65% of respondents said they were not planning on giving raises to their workers because profits were n high enough. and this comes at a time when main street is having a hard time finding wkers. >> we're seeing that these small businesses are struggling a little bit more to a bee to attract the employees that are out there in this tight m i do think it'll give, but we have not seen it yet. s it'sll below 2.5% wage increase, which is very interesting at ts point given

that market. >> the report did say that optimism is at elevated but it is just not yet translating into higher pay for workers. to housing now, where there to be no relief to the hotmm suer market. diana olick has the details of a new port. > reporter: as the mercury soars, so do already overheated home prices. the latest read shows values in may jumped over 7% compared to a ye ago, the biggest annual jumpn ur years according to core logic. >> i don't see us really slowing appreciably over the course of the next y lr. tle moderation in national home price but not much. we're forecasting a 5% rise in national home prices over the next 12 months. so a little moderation but not much at all. that'such better overall. >> reporter: the supply of homes for sale has been shrinking for three straight years, and it's not all the home builders' fault. they are increasing production, although slowly. part of the shortage is being caused by current

about a quarter of potential buyers w already own said they will not movif thenterest rate they get on their next mortgage is one percentage point higher thanhat they have now >> half of all homeowners with a mortgage today have a rate of 3% and 3.25% or lower. so when they're looking at 4.6% rate, they say, maybe i'll stay put in my home a bit longer. that's conraining some of the supply coming from the existing inventory. >> reporter: during the recession, the average rate on the popular 30-year fixed fell well below 4%, and it's now inching closer to 5%. millions of homeowners refinanced to those rock-bottom rates, and the idea of not just a higher rate but a competitive pricey house hunt ahead oesn't exactly give those owners a push out the door. and on top of th, those who should be heading out the door and downsizing, that is baby boomers, are not. they're taking their sizable stayequity and using it to put. >> boomers, on the other hand,

have been saying, look, we intend to age in place. we're going to remodel the house beuse we want the kids to come home and bring the grandkids. and they're doing that. the ratio of existing homes rfor saleative to our demographics is at 30-year lows. >> reporter: which means home prices really have nowhereo go but up. for "nightly business report requests," i'm diana olick in washvegton. >> ho the opposite is true for one of the country's bell weather rl estate markets. that would be manhattan island, in new york city. it just turned i its worst second quarter since the financial crisis. robert frank explains why. >> reporter: it was the third straight quartf decline for manhattan real estate. prices fell, sales declined, and inventory rose. the average apartment in new york city will now cost you a mereil 2.1lion. that's down from around 2.2 million last year. acrding to a n report. igw, the number of sales fell

17%. thh end is still the sp weakest,ially new condo buildings. sales for new developments plunged by 37%, and there's now1 a5-month supply of luxury units. now, there are thr main reasons. the growing pipeline of new condos coming on to the market, the new tax law, which makes buying aghome in a ax state a little less attractive, and fading foreign buyers. the share of apartments being purchased by foreigners has fallen by 40% since theeak in 2015. erseas economies are slowing, and governments are cracking down on using real estate for money laundering and offshoring. now, the most expensive sale of the quarter in manhattan was a penthouse of the new getty building on 24th street off the highline. private equity billionaire richard smh paid 59 million bucks for a 10,000-square-foot, two-story penthouse,e plus floor below. it has two masters suites, four

other bedrooms, seven baths, and two kitchens. for "nightly business report," i'm robert frank. me, u.s. retail vacancies are on the rise, and the reason is notur aise. brick and mortar stores are closing as more people shop online. but the trend iaking a toll. according to a real estate research firm, malls haven't been this empty since 22. that's creating headaches for the commercial real estate market, even as the economy strengthen t time te a look now at some of today's upgrades and downgrades. we begin wit pepsi, which was downgraded to hold from buy over at deutsch bank. the analysts there cited valuation, given the stock's 12% rise over the past two months. price target tow, $116. that fell a fraction to 108.80 today. a different analyst at deutsch bank downgraded a number of airline stocks, including m erican airlines, to hold f buy. the firm said the sector typically underperforms the marketuring periods of heightened geopolitical risk.

in this case, the trade. tensio price target now 43 on american. shares fell re than1.5% to 37.75. that analyst also downgraded shares of delta and united to hold for the same reason, and separately delta today did acknueledge that rising prices will impact its second-quarter earnings. roku was upgraded from oppenheimer. the analysts cite the pecreased time on its roku channel, just nine months after its launch. the price target is 50. the stockas up about 5% to 45.54. square's price target was raised to 74. the analyst cites good fundamental trends. the rating remains positive. the stock fell nonetheless by2% to 61.75. still ahead, should medicare allow some patients to buy into so-called concierge medicine? that's coming up on "nightly

business report." glen kocore has received a justice from the department. they're asking for documents related to corruption and potential money laundering. they mine commodities like copper andraoal ands those materials. shares in london were down sharply today. facebook is facing a broader rivestigation into its s of data with cambridge analytica. ocial media company has received questions from the s.e.c. as well as the fbi. the justice department and the ftc are already looking into how

cambridge analytica purchased data on 87 million facebook users without their consent. facebook says it is cooperating with officials. the stock fell more than 2% in today's session. amazon's next prime y is ing to run longer than ever. it kicks off july 16th at 3:00 m. eastern time and will go for 36 hours. last year amazon generated an estimated $1 billion in sales on prime day, which as you may know offers deep discounts on thousands of items to its prime subscribers. meantime, others are also offering deals. rivals like target and jcpenney ll early up their back to school sales. and ebaylans to offer thousands of exclusive deals on july 17th. ther second half of the y is a key time for the retail sector. so what can investors expect in the months ead? courtney reagan takes a look. >> reporter:or retail, it's all about the second half of the year and in 2018 a trade w threatens to curb a strong

consumer spending trend. re m the summer on is w you'll find the three biggest online shopping holidays. amazon's prime day in july, and black friday and cyber mondayn november. analysts predict prime day will play a big part in back-to-school sales for many parents, though some waite unti fall. no matter when the spending occurs, analysts predict the on prold school spending season will continue a strongai r cycle that began just after last year's back-to-school season ended. then once schs in session, it's time to deck the halls for retailers. but last year's holiday spending informati was tronger than expected, making the bar higher this year. plus, as president trump, china, and europe threaten tariffs, holiday sales could end uptr a gwar casualty. retail lobbyups say tariffs are a taxaid ultimately by consumers because it increases the price of goods. if americans do pay mode for s in the second half of the year, that could cut down on sales. so tariffs could be the grinch that steals christmas.

for "nightly business report," i'm courtne reagan. pfizer is raising drug prices for the second time this year, and that is where we begin tonight's marketoc. after hiking prices back in january, the pharmaceutical git is now saying it plans to 0aise costs nearly 10% on more than prescription medicines. pfizerat also noted handful of its treatments will see aut price as well. activist investor dan lobe is rortedly urging campbell's soup to consider selling itself because he believes that company is unrvalued. "the new york post" says lobe's hedge fund is in talks withve instors and family members of campbell's who hold a minority shares rose nearly 2%. and colgate is reportedly seeking the help of a on service company to sell its products. "the wall street journal" says the consumer products giant is nearing a deal to take a

majority stake in hubbell. thly would then joi offer a subscription service for colgate's oral products. shares re a fraction to 64.67. finally, unilever says it has completed the sale of its food spreads business to kkr. that deal, which was announced last year, is intended to help unilever focus on its stronger owth areas. shares were up more than 1% to 55.77. sue? bill, the lighting company acuity brand said strong demand for its infrastructure and utility products h spedes rise and top estimates. profits fell, but they still came in well ahead of expectations. the shares popped more than 12% to 132.05. micron technology says it has not yet received an injunction, halting sales in china. earlier today, bloomberg reported its rival, united micro electronics, said a

chinese court had temporarily banned micron from selling hard drives after a patent infringement lawsuit. shares fell 5.5%. we told you last night thato axium was to reaching a deal with ad companyntpublic group. now it's official. interpublic will pay nearly $2.5 billion for axium's marketing sotions business. they said them trim debt and add to the stock buyback program. shares jumped to 39.45. meanwhile, interpublic fell to 22.33. and tesla shares continue to all today after a report the carmaker eliminated a brake safety test during production of its model 3 vehicles. tesla said it felt the so-called brake and test was redundant as it already puts each car through a rigorous quality check. shares nonetheless were off 7% to 310.86.

last night we told you about concierge doctors. this is a growingrend in health care where physicians charge customers a fee upront forunlimited access to primary care. such a service has long beened consid luxury for the rich, but as btha coombs reports, the trump administration is considering whether medicare should allow me patients to buy into these kinds o practices. >> reporter: tim o'connor dedicates his time in retirement in tea english and keeping on top of his health. >> i don't have a great cardiac family history in my family.he >> reporter: w his doctor converted to a concierge practice with a $2100 annual fee per person, tim and his wife decided to buy in. >> is money a consideration? i don't want to say it's not a consideratio but you know, i do believe in preventive

medicine. f reporter: the fee gives them unlimited acces same-day appointments, longer visits, and a comprehensive annual physical. for their doctor, it means being able to provide moreal persed care to about 500 patients, about a quarter the size of his old practice. >> if somebody has three, four, five differentconditions, it's almost impossible to see them within a ten-minute period. so you have the time to sit down with them, direct them in the right direction, and i don't know how you can do that in the traditional model. >> reporter: conhaerge medicine been around for decades, but the membership model makes up less than 10% of physician practicesecause many patient can't afford it. but now the trump admdistration coive some of these fee-based practices a boost. health department secretary alex azar has osproposed pbly giving some medicareie patnts a stipend to help them gain access to fee-based practices with more personalized care. mecare has been looking for ways to pay doctors for better outcomes rather than for the

number of procedures they perform. e ceof mdvip, thenation's largest concierge medicine business with nearly 150,000 medicare patients, is the proposal closely. >> we save medicare hundreds of millions of dollars a year by avoiding things like e.r. visits, hospitalizions, readmissions to hospitals. so the elements of a more, you know, direct provider contracting model certainly works and works well. >> reporter: tim o'connor is convinced paying for prevention health. off in better >> we have saved more over the years if we were to sit down and try toe figt the economics of this by staying with him. >> reporter: it's not clear how the administration would structure a stipend program. some critics worry it could just drive up costs for primary care. right now the health department is just asking the industry for comm. in the months ahead, it will likely propose a pilot program to test the concept. for "nightly business report i'm bertha coombs in new york. coming up, rising riskso

real estate. how one city emerged from f devastatingods to lead the battlextgainstme and costly weather damage. two years ago this summer, a massive rainstorm stalled over baton rouge, louisiana. it flooded the areas and caused billions of t dollars in damag both residential and commercial real estate. ironically, baton rouge, which is on the edge of the mississippi river, is now fast becoming research hub for the study of rising water. diana ol' li diana olick is back with us for the next part of our series called rising risks. >> reporter: it was a freak storm, dumping over two feet of rainn the baton rouge area.

rivers swelled, flooding more 10 than 000 homes, nearly $4 billion of residential property damage alone according to louisiana economic development. >> what we're doing now is to be better prepared, using science to better prepare ourself for that next flood. >> reporter: ironically, as the rain came down in 2016, a $60 million project in downtown to baoo ban to roouj w baton rouge was going up, home to the just opened water institute of the gulf. >> there are ways to use the best available science to better prepare, to betteon re and to be able to get assets and people out of harm's way. >> and to better build. >> reporter: this a baton rouge is in the midst of a building boom. the number of construction permits nearly doubled in the last five years according to the downtown development distric john davies is a local developer and also ceo of baton rouge area

foundation, which is helping to fund the water campus. >> if we don't deal withe the isf water rise and the loss of land in south louisiana, there will be no south louisiana. >> reporter: davies claims the institute is already paying off, not just for baton rouge, but for communities, infrastructure, and economies upow and the mississippi river. >> what we r didn'tlize what would happen as a result of the floods is tt the water institute of the gulf developed a methodology to predict inland flooding. they have the sole model to do that in the country. >> rorter: and just nextdoor, another unique weapon in the battle with water. a giant mississippi river simulator, the size of two basketball courts. >> we harness the power of science to f out how can we build structures, how can we build new wetlands and new barrier islands that will help protect properties and infrastructure along the coast so that when thet storm comes, you've got buffer. >> reporter: jeff was the chief resilience officer in new

orleans before joini the water institute. >> the flooding that happened in batorouge happened in areas that are more newly developed and areas that were built on what's probably you would call the natch rural drainage systema community. >> reporter: it's a riskin repe itself in growing nyban centersere near water. >> i do think thate with hurricrvey in houston and all the destruction you saw in puerto rico and thehrts that florida faced and had near miss misses every time last summer, i think that really woke people up lot. you see more discussion about what can we do to prepare for what's happening today. >> reporter: in may, the campus hosted its first international conference on water, drawing more than 200 experts. >> with the sciensts in baton rouge, we're exporting it around the state, across the gulf of mexico, and all over the world. >> do you expect to see more of what we saw in baton rouge two years ago? >> we are preparing ourselves for the worst.

>> reporter: fightly business report," i'm diana olick in baton rouge. >> and to read more about the rising risk to real estate in batorouge, head to our website at nbr.com. and before we go, let's take shortenedok at this trading day on wall street. the dow fell 132 points. the nasdaq was down 65. id the s&p 500 dropped 13. and that will for "nightly business report" tonight. i'm sue herr raera. >> i'm bill griffith. oin us tomorrow for a special fourth of july edition of "nbr." good night.

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