. this is report" with bill griffeth and sue herera. trade hits tech. tensions are simmeri and today the heat was on one of the most influential sectors in the market. drowning in debt. millennials are hitting mid life and newws analysis s they're in worse financial shape than other generations and may never recover. pomp and circumstance. a billionaire's graduation gift. ose stories and much more on "nightly business report" for monday, may 20th. and we do bid you a good evening, everyone. ttis was a p tough day for tech. semiconductor stocks werewo squeezed on fronts. there are the trade concerns which we'll get to in a moment but then latehe today was a

report that the federal trade commiseson is igating broadcom, a dominant player. they're widening the antitrust probhe looking at tactics used by broadcom to sell the processors. that sent the stock down about 6% today. broadcom was already trading lower on concern that they will no longer be able t sell products to china's telecom giant huawei. the trump administration recently added huawei to a u.s. trade black list effectively barring firms from doing business with it without special approval. american companies have moved swiftly to comply. google has cut access to some of the android services on smart phones. huawei's reach into the tech industry is broad which is why some say the latest move has pushed the trade war into a new phase. kayla tausche takes a look at where we epstand. >>orter: in the weeks after the u.s. and china talked tradee

face to face, rift has widened. president trump doubling down blaming china for reneging. >> we had a very strong deal. we had a good deal and at the end they changed . i said, that's okay. we're going to tariff their products and we p a 25% tariff on their products. >> reporter: china's foreignai ministry that deal never existed. the u.s. has extravagant expectations. the trade now threate geopolitical issues. a u.s. warship sailing near chinese areas. korean war ng the era films echoed the current era. r an's foreign minis suggesting to china the countries could team up against washingtonphod the 2015 nuclear deal. cretary of state mike pompeo and huang ye spoke over the

weekend. they said won warned the u.s. not to go too far in harming interests. google suspended android f servicm new had a way devices after the u.s. put them on a black list. congress can ban any use by huawei to disrupt rural networks. u.s. companies impacted by the trade war are cutting costs first and then head count according to morgan stanley. if the re-escalation doesn't get resolv soon, analyst says a recession is increasingly likelyi' kayla tausche in washington. kayla t mentionedhe airing of anti-american movie in china. as eunice eunrt repos, that switch was sudden den. >> if you had a movie night over we weekend in china, you might have thought ye living in the 1950s. the state broadcaster changed

its programming lineup to include three anti-american movies featuring china's triumph w r america over the korean war. the communist times global newspaper said the china/u. w trad reminds us of the war in korea when our persistence and continuousin victoryly forced the americans to bow down at the negotiating table. wi notiations still at a stnemate, it's see as a way to prepare the chinese public for a protracted trade war. sources told cnbc late last week that the latest round werefln and today the foreign ministry said the only hope for a break through would be if negotiations progressed with mutual respect. and the chinese business community there's growing pessimism that the two sides will get a trade deal and people here are telling me that if there isn't a trade deal by june prepare for the fight to get worse. i'm eunice yoon in beijing. the trade war with china

uld be a double whammy with apple if it lasts for a while. according tone wall street analyst ongoing problems could cause themo buy smart phones from chinese companies instead of apple. even if chinese companies were still inclined to buy apple, a new wave of tariffs might reduce demand. that was the worstg perform dow component falling more than 3%. apple not only weighed on the dow but the broader market. the nasdaq g hit the hardest. the dow jones industrial fell 84 points to 25,679. the nasdaq was down 113. the s&p 5 was off 19. but despite today's pull back, it is good toem rr that the market isn't all that far off of its all-time high. mike santoli has more. >> reporter: the marketwes its resilience towards a rush towards safer stocks and bonds as investors migrate away towards risk. the s&p 500 has managed to hold

within about 3% of the recent record high thanks in part to treasury yields falling to 2019 dws. which has much t with the lows and the interest rates being cut to support a vulnerable economy. shares of stocks that act like bonds have been clear leaders. utilities have vastly outperformed industrial and small cap stocks. groups more reliant on a better economy. thisas led some economists to argue that they're sending a less up beat message than would otherwise be a market up some 14% less than five months into the year. investor sentiment similarly ses more subdued than usual after such a strong market recovery. aisurveys of r and professional investors show a sharp drop in optimism and cash has continued to o flow of stock funds at a pretty heavy pace, a sign of further investor caution. low bond yields cndtious investors already braced for bad news could continue to help support stock as a market

of a trade ails standoff. c at would require the econo data to hold up well enough to counter recession fears. but if the economy doesn't faulter enough for the fed to cut rates that the bond market seems to want, can the same safe ngstocks keep holp the market? could a shift in leadership to riskiecks happen without an all clear on the trade front? these are the questions facing an apprehensive wall street heading towards summer. for "nightly business report," i'm mike santoli. dozens of shoe retailers are now askg the white house not to raise tariffs on footwear. ni,adidas, under armour among others have asked the president to remove theirdu ps from the proposed tariffs list on goods imported from china. they sayhe 25% thas proposed would be catastrophic for consumers and the american economy as a whole. the head of the atl ex pressed confidence in the american economy but said he move inure if the next interest rates would be a hike

or a cut. rafael bostick says there are risk in thet that speak to both scenarios. >> there are risks out there in the marketplace that would suggest the economy mayrm per worse than we'd expect. and in that case there -- there are other risks that suggest the economy might dobe er. suppose the trade negotiations end up in a way beneficial for the u.s. economy. we might see a lot of the uncertainty being vies going away which could trigger a lot of investment and heat up the economy quite quickly. >> the market is pricing in just under a 50% chance of a rate cut in september and a more than 70% chance of a move lower before the end of the year. time to take a look at some of today's upgrades and downgrades. we begin with target. upgraded at morgan stanley from equal weight to under weight. the retailer ist showing can survive in an increasingly competitive sector. price target, $67.

target grows more than 1.5% to $72.08. morgan stanley upgraded american airlines from over weight toua weight. they cited the loyalty program. price target, $110, that stock was up a fraction to $81.74. general dynamics was upgraded tm buy f neutral. the cash flow and the stock's valuation. i the stock pri $204. the stock was up more than 1.5 to $169.29. bristol-myers squibb was downgraded to hold from buy. the analyst cites concerns over the merg with lgene and the drug pipeline. they say bristol'oss of excludes sift for the loss of a number of drugs over the next few s. shares fell 1% to 46$.31. tesla's price target was cut. the analyst cites concerns over

the company's 2019 delivery target. the rating remains neutral. shares fell more than 2.5% and finished down below that target at $205.36. still ahead, what happens when supplyhains are soaked? i'm contessa brewer on the mississippi river between illinois and spring is a crucial time for the nation's farmers and here we are, there a no barges passing through these locks. i'll explain why coming up. fannie mae and freddie mac have to raise capital before they c privatized so said their head regulator at a

conference today who also noted there are a lot of options on the table. >> treasury has 80% of the stock so we're going to lookwh a treasury is going to do. we're going to look what we can do to build equity. one option on the table is give a public offering. we don't know. that's one of the options t build large capital. as we reported, the trump administration wan to release the two from federal control which they went into during the financial crisis. oil prices rose today after opec hinted at an extension of its cuts. meer companiesecided to explore options that will be ultimately decided at the june summit coming up in. vien they moved to cut output by more than 1 million barrels per day. domestic crude settled at $63 a barrel, just under 40% s far this year. ford is cutting 7,000 jobs. at's about 10% of its global white collar work force. the job cuts, which include

voluntary buyouts, are expected to save the company about $600 million annually and they are part of the automaker's broader restructuring plan. most of thelayoffs are over seas with about 2300 coming from the u.s. this round will not impact ford's hourly factory workers. shipping has ground to a halt on the mississippi river because ori his spring flooding. it's a double hit for farmers. they've already been caught in a trade war and now they ar sitting on soy beans without a way to get them down river. contes brewer as you saw is in rock island. >> reporter: it's quiet on the mississippi. no barges moving at the locks so this is aim crucial for shipping for the nation's farmers. >> one reason why farmers located in the middle of the country like davenport, iowa, are interna onal entrepreneu is because they have ae ater way to mickly. >> reporter: not so this spring. the winter stormno massive

melt and rain have inundated the farm fields, overflowed levies and had record breaking flood. >> normally the water would not be quite so far up on these gates. we are inin flo condition right now. >> reporter: earlier this month the locks flooded. high water has shut down multiple locks for months and there are no detour around a closed lock. so though a barge may move short diances on the mississippi, it can't run the length of the river. >> we wouldxp haveted in a normal year all of the fertilizer for all of the farm fields in wisconsin, minnesota, iowa, illinois, missouri should be up here by now and actually on the fields. >> reporter: the mississippi river is an important route for ping grain, steel, petroleum and other commoditieshuttling nearly $2 billion worth every year but with logistics, the bargesre empty, more at the ehouse is and the w bare. >> it's impacting the whole

supply chken. you have to do different things. the goods still have to move. >> reporter: but shipping options is expensive. it would require 62 semis to ansport one barge load of soy beans. that can quadruple the costs. for farmers already slammed by tariffs, the flooding and river closures add insult to injury. >> having an impact on farmer profitability, our ability to get product to market. >> reporter: barge operators hoped it would te flowing on mississippi river instead with more rain in the forecast and davenport the sandbagging continues, it looks like the lockn will rem shut down for several weeks to come. in rock island, illinois, ntessa brewer, "nightly business report." sprint and t-mobile get mixed messages. that's where we begin tonight's market focus. earlier in the day the fcc chairman said he planned to recommend the agencyve app the merger between the telecoms but

then hours later birhess companies received a different signal as the depictment of ju is now leaning against the proposed merger. sources tell cnbc the fcc conditions on the merger may not resolve the doj's antitrust concerns. sprint shares rose more than 18% to 734 while t mobile stock was up nearly 4% to $78.29. dish network agreed to buy another chunk of echostar service satellite assets valued at $8ll n. dish will acquire nine direct broadcast satellites andes real te properties in exchange for nearly 23 million shares of dish stock but dish shares slipped today almost 6% to $33.24. after an 18-month battle air w zealand reportedly picked boeing over its rifle airbus. reuters reports the airline deded to buyide bodied planes from boeing in a deal reportedly worth more than $2

billion. boeing shares fell a fraction to $352.79. international game technology missed revenue estimates but t maker of slot machines and other gambling productsid manage to return to profitability after reporting a loss last year. theee industry isg good demand for the physical gaming machines and online gambling services. the stock today w down nearly 2% to $13.83. xl ergy plans to shut down its two remaining coal plants in minnesota a decade earlier than scheduled essentially putting the company on pace to become coal free in the upper midwest region by 2030. the utility holding company said it's going to keep its nuclear power plant running until least 2040 with the goal of delivering full carbon free ectricity by the year 2050. shares were up a fraction to $58.39. millennials are approaching middle age in worse financial

shape than every living generation ahead of them. according to "the wall street journal" americans born between 1981 and 1996 have less wealth, own less property, have lower marriage rates and are havingr fe children than any generation since the great depression. ining us now to discuss what that might mean for the broader economy and future generations is scott brown, chief enomist at raymond james. scott, welcome back. nice to have you here. >> nice >> some of this is simply the time at which they were bosh and grew up, right? we weren't necessarily bn a depressi we were in a downturn in the economy. that makes it tougher for everybody. >> two key issues here. even before the recession there s a trend where there was a squeeze going on at the middle class. a lot of the bargainingower has shifted from employees to employers. you had a greater concentration of larm firms. h youe a lower union membership and so on. oe great recession really made

a l those trends a lot worse. we know from studying past recessions that it tends to take a very, very long time. inct, even after the recession we had in the early '80s, those wages were typically lowerhan people that graduated a couple years later or earlier orven 10 or 20 years later. it tends to have long lasting efthcts. obviousl was a major, major recession. >> social security and fewer workers to pay into social security when more of us, baby boomers start to withdraw money fromt?ocial security, ri >> well, one of se bigries we have is slower population growth i slower labor growth. n ch slower gdp growth previous decades when the baby boomers why coming in, female

participation. we're looking at labor growth. we're going the wrong way there. other countries facing similar kinds of w issueh the aging populations, how are they going to payorpeople's retirements and health care. >> so for the broader economy as we go rward, obviously we had the great recession. we've come out of that now and the m stockket is doing pretty well and the economy is doing pretty well. how long before we see those ripple effects in those younger ople coming up into the work force now? >> it willake quite a while. my hope is the federal reserve doesn' try to curtail the expansion too much. if you get an increase ins, general wa then that forces firms to reallocate labor. inu do get people m up to higher positions. that paves the way for younger workers to come in and get work thatience and, you know would all be very helpful. we're crossing our fingers, i think, that things going to continue to improve but think

i don't want for the fed to cut rates in the month ahe to help keep this expansion going. >> scott, thank you. scott brown with raymond james. certainly many millennials may be saddled with student debt but 400 students from morehead college hit the lottery. >> billionaire robert smith surprised 396 graduates of morehead college yesterday of wh could be the greatest graduation gift ever. >> my family is making a grant to eliminate their student loans. >> now the exact amount of paying off all those loans is still being netiated, but morehouse says it could be in the tens of millions of dollars. many ask, who is robert smith? well, he is the richest african-american in the country with a net worth of about 4.5 to $5 billion. his fortune comes from prite equity.

he's the founder of vista equity partners which focuses on enterprise software and data companies. now smith once said that of his nearly 300 buyout deals at vista, he has never lost money. now smi grew up in denver where his parents were teachers. he went to cornell and then to columbia for his mba. he started out as a chemical engineer at kraft and goodyear and went on to do goldman sachs in san francisco before founding vista in 2000. he has used his wealth for biggest tious. het the most expensive home sold in downtown manhattan last year, the $59 million pent house of the new getty building. he owns homes in malibu. he was the first african-american to sign the warren buffet/bill gatespledge. he gave $50 million to cornell, donated the former hom of martin luther king to the national park service and has

given generously to the smitonian and carnegie hall. manyf morehouse students said they plan to honor smith's request to pay it forward. one student who had $25,000 in loans said, quote, this gives me a newtart on life. for "nightly business report," i'm robert frank. still ahead, do you know more about enomics than high schooler? well, we'll soon find out. t irs audit rate dropped again. according to new figures, agency audited about .6% of urns last tax r

year. that's the seventh consecutive annual decline. audits of wealthy households dropped to their lowest levels since the irs beganeporting e data in 2008. the agency, which has been hit by budget cuts, is in the process of askin congress for a funding increase. the best and brightest high school student are putting their economic knowledge to test. teams tod competed in the national economic challenge in new york, and this year andrew ross sorkinod mated the event and crowned the next potential yellen powell or janet >> reporter: at the 19th annual economic challenge, students a quizzed on principles in economics. >> land is a factor of oduction. what are the other three factors? >> capital, entrepreneurship, and labo t >> reportet is correct. and put to the test to apply these principles to the real world.

assume a consumer is maximizing utility in the consumption of bread and cheeseum further a that these are the only two goods being consumed wham consumed. appen to the marginal utility of bread if the price of cheese decreases? >> it increases. >> that is corct. >> reporter: these are the brightest economic students in the nation who competed in a field of 11,000 teens toeach the championships here in new york city. >> what is the most likely cau of an inverted yield you acurveg >> an impen recession and the yield on longer term bonds being lower than the yield on shorter term bonds. >> reporter: this year mount he on high school won the david ricardo division and adam smith divisi a first in competition history to take home both trophies. >> how did youet into

economics? >> it's fun to learn and not something you do for a competition. so that would be my moment. >>us we're not nerding out here is the point. >> reporter: nan morrison value of this competition. >> their learning goes far beyond a recitation of facts. they really understand how this stuff works and it's incred bib gli rewarding to watch them. >> what is a good that is a a rival nonexcludable. >> common resource. >> common good. >> you are both correct. >> reporter: for the third year in a row the u.s. face off against china and china was victorious in both rounds. for "nightly businesseport," i' andrew ross sorkin. and finally tonight, "the me" of thrones series finale set a rort for hbo. he show drew 13.6 milli viewers in the original airing last night. if you add in replays and early streaming, that figure climbs to more than 19 million.

>> no spoilers here before we go, let's take a final look at the day on wall street. the dow was down 84 points to 24,679. the nasdaqot hit the hardest with semiconductor stocks leading the ay down113 points and the s&p was down 19. and that is "nighory business r for tonight. i'm sue herera. thanks for joining us. >> i'm bill griffeth. have a great evening. we'll see you tomorrow.

>> this is "bbc world news perica." >> funding of thsentation is made possible by the freeman foundation, and judy and peter blum-kovler fodation, pursuing solutio for america's neglected needs. >> wow, that is unbelievable. ♪ >> i'm flying! ♪