ht this is "nigly business report" with bill griffith and sue herera. dark cloud, the semiconduc sr sector isck in the middle of a trade war and it may undo that damage. going shopping. americans opened their walls last month complicating policy decisions in the federal rtserve which mn just a few days. bring on the summer, that's what some homebuilders are saying after a fairly lackluster spring. thoseh stories and muc more tonight on "nightly business report" for this friday, june the 14. and we do bid you a good evening, everybody, and welcome. sue is off tonight. the market finished the week at an inflexion point ofts s today. investors did not appear too

eager to buy or sell stocks ahead of next week's feder reserve meeting, but they were eager to sell shares of gottenductors which hav themselves caught in the middle of the trade war with china. add to that the rising geopolitical tensions in the gulf of oman which lifted oil prices for the second straight day and when all was said and done, the dow wasn just 17 points and we're at 26,789. the nasdaq was down 40 and that was the technology stocks there and the s&p was down four and for the week all of the major averages were up only fractionally. mark thsantoli seems tha market is teetering. >> it's something of a crossroads. while the s&p 500 held the gains with the 5% rebound from the start of june. tradingdolume slond the indexes worked sideways ain investors re in suspense on a couple of crucial policy issues. the federal reserve meets next week as the bond market hasov in to price in high chances of a rate cut by july.

the slowdown in global growth and decline in the inflation rating as th market essentially lobbies for easier policy to ward off further economic deterioration as trade frictions worsen and on that trade front, worldeaders meet at the end of june which could be a forum for the u.s. and chinao move towards some agreement which has the chance to avertdent trump applying tariffs on $300 million on chinese imports. at this point the market is unwilling to assume any particular outcome and is unwilling to assume if the two country's leaders would o feed the economy and the u.s. economy continues to hold up okay and the stock market has proved resilient thanks to sectors such as utilities and consumer staples and it has recovered all of the fourth quarter collapse, and now sits 2% from its record high. the s&p at these levels is also merelybout where it's at in late january of 2018,eaning it

hassers effective -- andow much timnd energy is left in this decade long economic expansion. for "nightly business report" i'm mike santoli at the new york stock exchange. as we mentioned nductor stocks weighed down the market today and it all started with the weak earnings weort from broadcom that told you about last night. it was a company of the quarter of the coany's ceo called depressing. it dragged the other chip stocks down with it. it was anothereminder of the impact of the trade war with china. a country that the indusy relies a great deal on for business. josh lipton has more. >>s shipping invest got a first look at what an extended trade war could mean for semiconductors and it sn't pretty. broadcom ceo hock tan laid o the challenges. >> with respect to

semiconductors it is clear that the u.s.-china trade conflict including thei hua export ban is creating economic and political uncertainty and reducing visibilit for global oem customers. as a result, demand volatility has increased and our customers are actively reducing inventory levels to manage risk. >> he noted that the company had $900 million in revenue from huawei last year and it isn't just broadcom. micron's ceo just said publicly that the huawei ban hasug broht uncertainy and some turbulence, t his wor the semiconductor industry. semis sold off now down hard from their highs in april. these are issues that many chip compies could have to deal with in thert quas ahead and cause them to question whether there will be the second-half

snap back for these companies that many had predicted. on the other hand, analysts say the recent pullback couldlso create opportunities for investors. even broadcom, despite the generally poorly received results showed pockets of strength. >> one of the things we showed last night is strength exists in the networking business, and marvel has been active with them this year and that' the name we really like at current valuation levels to put capital to work. in fact, ellis says many of the chip companies nowre more attractively valued giving them another reason to own some of these stocks, for "itnightly business report," josh lipton, san francisco. >> chief investment officer at boca capital partners. e you.ood to welcome back. >> thank you. >> one wall street firm said this week that this trade war is doin long-term damage to the semiconductor industry. you're not so sure about that,

are you? >> no, not really. i think this is wall street being at the center of the universe and the real manufacturinand the real world is probably not where they are, so let's try to reconle those two worlds. >> in other words, what you're a deal s once we get with china, you think that the orders come back for t semiconductors, right? >> absolutely.nd semitors are the things by which we conduct most of our lives, sad to say. it's not just the phone. there's a whole lot more semiconductorshat surround us day in or day out and it's our estimation that that's only going to continue in things lik autonomous cars and it's not fully autonomous cars and tre will be systems that rely on semicondaftors to make us and just make our world work better. so it's just semiconductors are taver the world and i

think it's a little short sighted to think otherwise. >> one of the goals of the trump administration is more assem blaj back to the united states and isn't it possible to put more on that industry what would that do. >> i think that would make electronics really expensive in the short term. the practical matter is none of this global trade can be unwound very easily or quickly or cheaply. you have to build the plants and train the people and you have to re-route your supply chain and i think that the desire to bring a lot of that back on the shore will never j happen andt because of the practical matter because of how the world now and it's just cheaper and everyone is kind of used to how things work now. a little on the edges maybe, but practicely moving back all of that the manufacring that happens overseas is just

probably not practical. >> so does that mean you're buying therocoms and the other chip stocks that were hit so hard by this trade >> well, i like them and i like th more athis time of year than two months okay. >> i think they have come back and inveakors should a look at this, which is a minimum ofm line can is three to five years. >> alsoed if to see you. thanks are for joining us again. >> by the way, the chinese economy feeling the trade tensions and new reports pointing to softening of the key eas of the second largest economy. eunice yoon has more fro beijing. >> chinese sales dropped by the biggest amount since october 2017 and factory output hit a 17-year low. fixed as investmentls c retail sales were the bright

spot rising 8.6% cpared to april's 16-year low. analysts say the better figure is due to higher inflation andr gont incentive to boost n consumption. chinese officials say the economy is facing increasing external uncertainty. i spoke with ae former v finance minister who currently advises the government on trade anaid that china wants to talk, but that the u.s. needs to lift the tariffs it veryhe chinese make clear imports musthie reward. >> still hasn't confirmed that president xi zinn ping won't meet with president trump in the w bilateral tok out what many peoplebeelieve would worst-case scenario. i'm eunice yshg oon in beijing. >> the economi news wasn't all bad. industrial production rose the

most in the six months in may. according to the federal reserve the gain was helped by an increase in the production of pup trucks and cars and the output of consumer good, siness equipment and industrial supplies and that was also hire. retail sales were m solid in and april's numbers were revised higher making it three straight months of gains. t worries abo trade war and concerns over the health of our economy apparently did not stop americans from spending and while that's good newsor the economy, it could complicate things for the fed. >> steve liesman and on that story tonight. >> amid stories of the weakening consumer -- and he just revised it by another half a point. consumers showed up for health and personal care items and sporting goods and general merchandise stores and of course on the internet. it was then kind of discussio that consumers feel very comfortable about the outlook and what's in their pockets.

barclays wrote today's report paints a picture of strong momentum a consumer spending. this is consistent with an outlook for the second quarter when we expect consumer spending to hold thet. f there's still some slowing growth into the tax cut-induced spending spree. economists believe it will any down from 2%, down from last year, and it's a potential growth for the u.s. economy and better than the earlier estimates of just 1% or less. >> we still have slowing consumption compared to last year and the consumer has been theon bac of this recovery in this expansion and we expect that to be maintained. the strength in consumer spending actually complicates policy making for the federal reserve. concerns about slowing global growth and slowing capital spending and the negative impacts of trade wars and does it hold the line on rates that atter wag low unemployment would makumamerica co spending and ignoring the forecast and na they won't.

for "neatly business report, still liesman. >> there was more economic news. consumerentiment fell in the early part of june. much of that decline was due to tariff concerns and smaller gains in employment. at the time the survey was conducted there were possibilities of tariffs being levied i mexico. there are some early signs that the usually slow summerse housi on could start to heat up and for some homebuilders and some parts of the country, that would certainly be a welcome development after a so-so spring. diana olick has that story. >> spring is usually the hottest season for the nion's homebuilders, but that was not the case this year. there are, you ever, signs of summer strength. mortgage applications to purchase a newly built home jumped 20% annually in may according to the mortgage bankers association. that coincided with falling mortgage rates throughout the month and rates continue to fall in junend are now at the

lowest level in two years. these both signal strength ahead. but all real estate is local and some are will fare better than others. john burns' real estate break out t public builders which are poised to do best this summer. kaybee home's market conditions are because they're concentrated in the southwest, where the market is outperforming and it buis in the northeast because it's bouncing back a year ago. d.r. hortoces cration in texas and entry level product also puts it i a good position and lennar's footprint and it's heavy in florida and the southeast. on the other hand, tripoint and william lns home are slowing permits because a third of their exposure is in southn california. where demand is weak and costs to build are highest. >> the problem for all homebuilders continues to be shigh home pri and half the

public home price is thera a sale price above $400,000 and their recovery will continue in fits and starts. for nightly business report i'mk diana oli in washington. >> time to take a look at some of today's upgrades and downgrades. they were upgraded buy to hold at vertical research. the stock has fallen too faroo fast following the news of its proposed merger with raytheon. the price target now $145. that stock rose a fraction to $125.30. geral motors was downgraded to sell from hold at cfra. the analyst cited a belief that the automaker is likely to lower earnings guidance. he also noted a downbeat for auto sales overa and the company's operating margins and the pricet tarwn $32 and that stock fell 1% to 35.66. ill ahea why boeing has a lot at stake at the upcoming paris air show. ♪ ♪

some major drugmakers have filed a lawsuit to stop a newul rule that require them to disclose prices in tv ads. the suit was filed by amgen, rck and eli lilly. this new regulation is scheduled to go into effect next mon's. art of the government's efforts to bring down drug costs consumer in the lawsuit the drug companies say that list prices do not accurately reflect the final price paid by patients because it excludesat r and discounts. the world's biggest air shoi kicks o paris this weekend, but this time around it's going to be a little different. that's because boeing and rival

airbus, the two biggest commercial airplane makers in the wod, they're flying in two different directions. phil lebeau has more. >> paris loves a good air show, but it's not what's up above that will turn heads this weekend. >> it's what will be said on the ground. the big story, an expected drop ig demand for new planes, after soaringr the last two years, orders cou fall to their lowest level since 2016,a mainly becse boeing is unlikely to ring up sales for its beleaered37 max. >> it's hard to imagine that anyone will be ordering 737s where the aircraft is grounded. >> dennis mullenberg wil spend mitch of the show meeting with customers, reassuring themng boeias a plan to get the max back in the air. meanwhile, boeing's rival airbus is expected to launch awe new airplane. the latest in itsil f of narrow body jet, but this will

have greater range that connect cities fartherpart. theemand is there. in fact, a record number of people are flying thissier which is why air combus they're -- airlines that order new planes this weekend will likely not see them flying until well into the next decade. il lebeau, "nightly business report" chicago. it turns out chewy's bite is as good as its bark and that's where we begin tonight's mart focus, the online pet product retailer owned by petsmart soed in its wall street debut today and the company priced its ipo at $22 a share and that was above the expected price range and the company's ceo hoped to prove that the company was not like pets.com which came to symbolize what was wrong with the dotcom bubble of the '90s. >> the company was 20 years ago and loo at the way e-commerce

is changing andook at our sticky mess and the fact that we're servicing greater than the 95% of u.s. households and the fact that customers keep comin back to us. chewy shares were up more than 80% for aime today and they settled up60% at $34.99. barnes & nobleaid today it did not receive any other offers from prospectivee buyers bef hedge fund elliott management's imposed deadline next week. elliott offered $475 million to take the bookseller private and it built in an end of business thursday deadlin for barnes & noble to field other possible bids. with that deadline now past, and if the deal does not go through elliott will receive a $17.5 million break-up fee from barnes & noble. shares of the company 1ell more th% today to $6.74. facebook reportedly h enlisted more than a dozen companies

including visa, mastercard, paypal and u br tok a new currency. the wall street journal says eachre cy will invest $10 million in a consortium that will double the digital coin called libra. it expectsaunch that currency some time next year and facebook shares were up 2% to 181.33. abercrombi& fitch has authorized a new repurchase program for up to 5 million of its shares. it b allows back at its discretion while continuing to invest in growth opportunities and that brings the total buyback to more than 7.5 million shares and abercrombie's stock rose a fraction to 15.49 today. and the justice department is close to approving t-mobile's $26 billion merger with sprint, but only if the companies sell multiple assets to creat a new wireless competitor. "the new york times woet "says a ttlement could be reached in nd next week or so

complicating all of this is the judge who is goes to listen to the merger and that will open next week as well. it rose 3% to $7 and a penny while t-mobile shares were a fracon at $78.90 a fraction higher. time for the weekly market a monitornd it will hold up in an escalating trade war and andy capper is o director research at region atlantic. >> good to see you again. first on the list,anthem, an insurance company. it's been a steady riser for a few years andy it's been ver volatile this year and you think it holds up in the trade war, wh >> first, let's get the 900-pound gorilla out of the way. health insurance inarticular s been in the sights of the white house ofli cs, generally and there are a number of things thats anthem doing that will help them catch up with other peers in the insurance and in particular the leader is the health care out of

minnesota. shey run a pharmacy benefit manager themselnd this is the way to get additional discounts and rebates out of thl pharmaceutrade which is a big and growing cost for health em is able ich anths emis n build them out is match prices with their peers that will omlow them tote better in commercial spaces and it will roll out new medicare plans that are in the industry. >> lots of potential growth. they only do business here in america. >> that's a good point. >> royal dutch shell is the income one and why that one in particular? >> super majors in the oil industry is a good bet and that where you don't know the direction will take you and you expect it to be volatile and take just two days ago and two tankers damaged in the persian gulf. >> t right. y are sensitive to those events on the upsi and the down side and it is a european super major trade at its

american peer, common andn chev instead of having a solid business. >> finally, google, was there crosshairs and t stock suffered oodz a result. >> two reasons. i employ the regulatory angle is overied a it will be more safe as aic braup and there isn't a cohesive gro other than ad sales that can be split off from the business and think about the google does that and google maps, all of that is designed to steer eyeballs back to google for the advertising. there isn't really a good way to split it up. as long as you look past that, you have a mature company, highly profitable that really has a lot o capacity to continue to grow thus with the high profit margins with almost no debt and does so with almost no revenue from chi and it was kicked out of china almost ten years ago. >> we'll see what happens. andy cap earn with region

atlantic and if you t want read more head to our website at nbr.com. main street feels the pinch of escalating trade tensions. ♪ ♪ we have some new findings howmericans view china. more than half of those surveyed do not care how products are made in china and most don't view the country as an economic threat. of the 800 people polled just 32% said yes, china is an economic threat compared to the 49% who said yes in 2007 and when asked if made in china labels mattered, 34% said they are less likely to buy a product with that label down from 52%

when the question was last asked dmore than aade ago. and the trade war with china is turning into a big problem r some small business owners. kate rogers talked to one who is trying to navate the growing ♪ ♪ sandra payne said she held out for as long as possible before raising prices and the president of denver concrete vibrator whichqu makesment for infrastructure project had no choice. a price hike was necessary when tariffs hit her vendors making pr aes volatil increasing costs. >> we waited a long time to increase prices ande finally did and had a small increase recently andll that s won't cover what we expect in the coming months or years. >> sheo hasn't had cut any of her staff and hopes she never has to, but acknowledges mar bns wi squeezed. more than one-third of small

business owners have awarded significant impaxsa a result of change wes mexico or canada to resolve the ongoing trade dispute and they're hurting businesses and consumers alike. payne says she's bracing for moty price instabind a recent notice from one of her vendors says prices and availability of medals are set to change daily making it a challenge. >> in many cases it's increased by % or 12% and we've been warned by some of our vendors that it will beeeg 20 or 25% increases with our next order. >> for payne, the message is clear. tariffs are doing more harm than good for her small business. >> you know, for years i've been hearing that manufacturing is lost inamerica, and yet there are thousands of manufacturing companies just like this one out there in the country trying to make things for domestic or

export, so i think it's going to hurt us very badly. >> while the trade war continues on an option mean street will be watching. for "nightly business report i'm katege . not much of a movement and down semiconductors was down 40 and the s&p was down four for the week and m allor afrpges were fractionally higher. that is nightly business report for tonight. i'm bill griffith. have a good weekend. happy father's day. see you monday. ♪ ♪

woman: this "bbc world news america." is made possible by... the freeman foundation; by judy and peter blum-kovler foundation, pursuing solutions for america's neglected needs; and by contributions to this pbs station from viewers like you. k you. jane: this is "bbc world news america." reporting from washington, i'm jane o'brien.