♪ this is "nightly business repo" with bill griffeth and herera. trade truce, that's what investors are hoping for when president trump and china presidenti meet, but stocks gains were kept in check. rally mode. the first six months of 2019 are in the books now and the s&p 500 logs its best first half in decades. bank bounce. the sector has been out of favor for months nout new dividend increases may be just what it needs to get investors excited again. those stories and much more tonight on "nightly business report" for this friday, and we do bid you a good evening, everybody, and welcome. sue is offonight. well, here we are at the end of the week, the month, the quarter and the first half of 2019.

what a fist half it was. we'll have more on that in just a moment, but we begin tonight with that meeting that investors have been all waiting for, president trump ane c president xi are in japan at the g20 summit ready to discuss trade. analysts say that this discsion could mark aurning point for the market which has been bouncing around for months now onll any and headlines of progress and stalemates between the w two largest economies. kayla towshe reports from osaka, japan. >> reporter: white house officials can't say with xacertaintyly what will transpire during president trump and president xi's 90-minute meeting, but a senior administration off tells me the working assumption is that it will result in an agreement to de-escalateon tensi and resume talks for a unspecified amount of time, that is unless president xi refuses to revisit e terms beijing balked at last

month. since then tensions haveig ened but there's still an opportunity according to the negotiator. >> i think presidentrump needs show in front of those hard liners to president xi tt this isn't about keeping china down, but this is just about making sure that china is u treatin. companies fairly. i think if president trump can signal that inf front xi and his hard liners, i think that will give the president ofhi some more flexibility to come back to the negotiating table in the way that we need him to. >> reporter: when asked by reporters in osaka, president trump said he still hadn't decided to suspend new tariffs. a we are going to have meeting with president xi of china tomorrow as you probably have heard. there sms to be rumor about that. we are indeed and we look forward to it. i think it will be productive and who knows? but i think it will be productive. at a minimum, it will be productive and what comes out of it. >> reporter: the meeting's outcome could remove or deepen uncertainty in the global trading system and the that have been the fly in the

ointlont of thebal economy, but there are other trade and geopolitical issues that are closely watched. european leaders want to figure out next steps on their trade front with president trump with table.riffs not off the japan was on defense as trump slwamed its pos defense treaty. russia and the u.s. were going to discuss a new arms framework after a previous treaty resolved and new sanctions could be in the works for turkey after purchasing russian military equipment. that fould come up on theal day of the g20 when president trump meets with predent dogan immediately following the shut down with president xi and immediately before a wide-ranging press conference. for "nightly business report" i'm kayla towshe in osaka japan. >> kevin nicholson, chiefarket take strategist. welcome back.

>> thank you. >> we were saying how well the market has done the first half of the year. do you think tre markets overly optimistic about the meeting coming up? what do you think? >> i think that t mkets are optimistic about the meeting. our base case is that they're going to agree to restart negotiations, and the greatest hope that we could have coming out of the meeting is that the u.s. says that they're not going to raise additional tariffs on the other $300 billion worth of goods coming out of china.ow >> you we speak of the market as a whole, but let's face it, therere certain sectors of our economy that are de e vulnerable to this t dispute, especially when it comes to the tariffs that you were just mentioning there. are ty the ones that you should be mindful of as we wait for theutcome of this particular meeting? in other words if they're moving higher as well, does that mean that the market is becoming overly optimistic here? hi>> yes, i so.

i think that the market has rallied over the last week or so based upon the negotiations and the idea that the two presidents were going to sit down and actually talk about trade, because, remember, a month ago there was escalation and, you know, there were -- they moved away from the table and there were no talks whatsoever. >> right. >> i think that the discussions had gone as far a they could with their representatives, and having the two presidents inhe same room i think is what is really giving the market hop w and a lot of the sectors that could be affected byhe trade agreement or trade war in is sense a indeed rallying. >> well, monday should be very interesting to see how the markets respond to what happens over the weekend. kevin nicholson with riverfront investment group. good to see you. thanks for jois tonight. >> thanks for having me. with companies looking to shift somepetions out of china amid the trade war, apple is reportedly ready to move

production of its i mac pro into chin it was apple's only device being assembled in the united states, reports the to company can save on shipping costs of mac pro components since many suppliersre in close proximity to shanghai. you can read more about that move on our website at nbr.com. meanwhile, on wall street stock rose ahead of the key meeting on trade, but the gains were muted. the dow industrial average rose 27 points, at 26,5999. the s&p added 16. check out these t numbers. fo month, the dow notched its best june since 1938. the s&p posted itses bt june since 1955, and for the first six month the s&p posted its best start to year since 1997. but if you looked at where the money flowed in the first half, that told a different story. bob pisani explains.

>> reporter: investors appear very divided over the global and superintendent economy in first half of the ayear,least if you follow fundlo f. many seem to be positioned for some kind of global slowdown, so it makes sense that bond funds were big winners in tirst half of the year. taxable bond flows, those are government and corporate bonds, they jumped 11% in the first half in thenmount of flow terms of the money going in, particularly in terms of bond flows. municipal bond flows also rose, up 9%, and then these again are flows. compare it to stock fund flows, a pleaselosmall 3% on the other side, many believe rates will be lower for longer and it is not necessarily telegraphing a slowdown in the global economy. for example, high yield etf like the hyg, they ebbed and

flowed in price all year but have still seen significant inflows. right nowes irs seem not too worried about the fact that the corporations with the junk bond ratings, they don't seem worried they will go under any time soon. that's par because these funds would be first to turn downf there was any consensus about a u.s. base downturn. as for the big gainers in the year, the surprise has been the huge success of the ipo market, a basket of the roughly last 60t large ipos ofhe year, up 35% this year, double the performance of the s&p 500. that success is guaranteeing that other ipo waiting in the wings, we elworks,on and potentially airbnb will be eager to find a way to public in the second half of the year. for "nightly business report", i'm bob pisani at the new york stock exchange. to the latest on thena economy, per income and spending both rose in may with householdses increasing purch of cars and they spent more at restaurants and hotels as well.

a separate report showed consumer sentiment declined slightly in early june, although it remains at elevated level but a measure of business conditions in the chicago region ll into contraction territory in june, the first time happened in 2.5 years. the survey cited the impact of tariffs on that region. as soon as the g20 wraps up in pan two big players, saudi arabia and russia, will be immediately heading to their next big meeting and oilat producersr in vienna. a question looms. given the heightened tensionra with and the collapse of venezuelan oil production, why have prices remained relatively stable instead of shooting higher. brian sullivan found answers for us. >> reporter: it is n thing that kept oil price it relatively stable but a few. first and foremost, record american oil p.sduction. the could be headed to 13 or p even 14 million barre day, and this oil, largely considered risk free, meaning it is not subject to the whims of

geopolitics. next, it is not just us. russian production remains aevated well. while russian output is down fracewonally from a months ago, they're still above 11 million barrels aay, likel frustrating opec who was hoping last year's cut would fm up prices. speaking of opec, another problem is that not everybody believes that deal to cut production is going to hold up. some traders are worri should the opec deal break, another million plus barrels a day will hit an already-over supplied finally, oil has been held down by growing fears of an economict slowdown aroun world. if the world's major economies demand for oil will fall leaving more excess barrels on the market. for "nightly business report", i'm brian sullivan. time to take a look at some of tod's upgrades and downgrades. we start with proctor & gamble shares, upgraded to buy from goldman and sax. th analyst cited the market

share and organic sales growth. the price market is $125. despite the upgrade the stock fell a fraction to 109.65. biogen was downgraded with the analyst citing headwinds facing two of the company's drugs. price target, $250, and that stock fell about 2.5% today to 233.87. live nationntertainment was downgraded to a sell from neutral at citi.na thest cited the stock's valuation following a 30% gain so far this year. price target, $63. that stock fell 1% $66.25. stil ahead, the democratic divide over the future of our health care system. ♪

♪ clearly the democrats are divided over health care, at least that's one of the takeaways from this week's first debate. a few candidates said that they would abolish private health ca coverage in favor of a government-run plan, but not i l ar favor of that idea and some analysts say that split could be a positive or health insurance stocks.wo john harod is in miami for us tonight. ♪ >> reporter: the first democratic presidential debates helped some candidatesike elizabeth warren, julian castro and kamala harris and hurtor ve esidt bi ee ik the de lmocratic front-runner, but placed a questionarkver a major american industry, private health insurance. for the likes of aetna, humana

and united health that uncertainty could play out through november 2020. setor warren long-favored a new universal medicare for all program, but d in herate on wednesday night warren broke new ground by m specifying thatnt she would get rid of the entire private health insurance industry. ook at the business model of an insurance company. it is to bring in as many sdollars they can in premiums and to pay out as few dollars as possible for your health care. that leaves families with rising premiums, risin co-pays, and fighting with insurance companies to try t g the health care that their doctors say that their children need. medicare for all solves that proble >> reporter: that draws a clear contrast with biden and other ho favoric moderates building on the current system rather than creating an entirely new one. less disruption also means less risk of alienating voters in a general election against presidt trump.

last night senator harris appeared to join warren and bernie sanders out on the political limb raising her hand to signal she would give up theate insurance too, but was a fresh plot twist after the debate. senator harris only meant she would give up her own private insurance, not take aw away everyone else's. the next democratic debate comes in late jerusalem and thuly and not going away any time soon. that sent many bk stocks higher today and we took notice of some of the dividend yields the banks are paying. jp morgan chase for example is above 3%, many others around 2.5% which is more than te averield of the s&p 500 stock. we are wondering, will this make this sector which has been floundering attractive again? joining us tonight is ed grosjean, a financial services

analyst. good to see ygain. welcome back. >> thank you. >> what do you think? people have clearly had high expectations for bank stocks as the fed ras raising rates, now they halted, now there's talk of fed rate cuts. what do you tnk the baits will do at this point? >> i think we're kind of in a stable spot. if anything, i would be slightly optimistic. you know,oa growth lass been in the low single digits. i think that will be the of any value growth and we haven't seen that yet. we had tax cuts. we had a strong economy. we had recapitalization of funds from overseas coming into the u.s. economy. we had rising rates butn the same assets, not new assets. i think higher dividend it will certainly add some value to it, t i thinkhe strong economy will have to produce for the banking sector, and at this point i like the fee income banks, the banks with capital market exposures, banks that have international exposure as to true regional lending banks.

>> the fees are wha made up the difference for those banks unable to make any money on e traditional way of borrowing and lending. who do you like best in this group? do you just pick from the group that has the highest yields or what do y do here? >> only picking from the highest yields if i'm a yield investor. i think he i want capital appreciation, so i'm going to focus on jp morgan, morgan stanley and goldman sachs. i think there's a lot of market activity out there. i tilnk we see capital markets both in investment and trading pick up, and those are the firms that will benefit from it the most. >> what about those regionals though? sometimes they can have a higher dividend yield. >> they have ah mgher dividend yield. many are approaching 4%. >> right. >> at the end of the day,sihe disc over the past few quarter was the positive, i.e. w much it is costing to attract deposits and it was going up. i don't think it is going away even thoughields are coming

down. i think they will experience imargin pressure and they don't have loan growth to offset, you get a nice dividend but whe does the capital different send come along with it. >> indeed. thank you for joining us today. >> thank you. have aood day. > investors raise a glass to constellation brands. that where we begin tonight's focus with pair topping revenu and sales growth in its beer and wine portfolios. the company raised its fiscal outlook, but due to ever changing consumer taste the alcoholic beverage company is looking at cannabis for growth. >> this is something that we need to be in. the consumer is interested, we see itme as ere in the next ten years of a $200 billion business. it will beig business, and we felt it would be important to be involved with that and be a part of that, and weho choose -- to make that investment through canopy. we're very excited about the long-term potential of that investment.

>> constellation brands rose more than 4.5% today to 196.94. elsewhere, deutsche bank is reportedly considering cutting up to 20,000 jobs or more than one in six full-time positioly glob at that company. "wall street journal" says that the lay-offs could tak a heavy toll on its u.s. operations and on the company as a whole. stock was up more than 1% though to 763 today. reel ree had a strong wall street debut after raising more than $ i0 million in ipo. the ceo of the online consignment retailer sees a profitable future for her company. >> we didli 711 m last year. the total opportunity in the billion.00 so we're going to continue to focus on growth, but not growth at any cost. we're hyperconscious about unit economics, we have a path to profitabilit w and wel execute against that path. >> yet another strong ipo today

with it up almt 45% at $28.90. shares ofa sera got a lift after safety concerns were raised in an early stage study for a rival gene therapy from pfizer that treat a rare muscle wasting disorder. they already rorted promising data from its own research last year. pfizer dropped a fraction today to 43.32 but serapta surged more than 17% on the news to 151.95. now to our weekly market monitor who likes stocks that are paying you a better income than bonds. we are back t income tonight. hank smith is with us. he is chief investmentfficer at haverford trust. good to see you. tonight. joining us >> good evening, bill. good to be with you. >> we start with a company we we just talking about a moment ago, jp morgan. is that your favorite bank because of its yield or why do you like it right now? favorite bank because it is the highest quality bank not only in the united states, in the world,

with the best in class management, a very reasonable luation, a 3% dividend yield that they just announced a 13% increase on top of last year's 42% increase. so in the past five years they've annualized that dividend increase at 15%, so you have doubled your income in years. not only are you getting a better than bond-like yield, you are getting growth of income. a very attractive situation. oh, by the way, the stock price has doubled over theiv last years. >> right. >> although as you noted earlier,t hasn't done much recently. >> exactly. to p.s.. i waslooking, they have a dividend of about 3.75% or something aroun that yield. i was looking at fedex, the main rival, they are only at 1.5%.yo get a better yield but does it mean more risk necessarily? >> well, look, u.p.s. has always

paid a heaidhier dd yield than its competitor fedex, and i don't think that's indicative of a riskier situation. usually you have to have stocks yielding north of 6%, 7%, 8% that indicates the market t doesn'st that yield. but, again, u.p.s. has been a consistentividend grower ever since they went public. they've increased their diffvidd at a 10% rate over the past five years, so you have grown your income, you know, practically 50% over the past five years. >> all right. >> i thinkhey're going to continue to do that. >> finally and rather quickly if we cou on pepsi, like that one better than coke necessarily? >> we do. it istl a l bit more diversified, and on the snack food, which is what is drivi the tremendous growth there, they're just hitting it o of the ballpark in snack foods.

again, payin nearly a 3% dividend yield with a 46-year record of annual dividend increases. so i think you canceave confidhat's going to continue. >> you would think so. hank smith with haverford trust. again, thanks for joining us, hank. have a good weekend. and read more about his picks. you can head to our website at nbr.com. cong up, the federal minimum wage h set record for not rising, but it is not the case in some states. ♪ ♪

here is what we've watching next week. don't forget it is 4th xt july week, but on monday members of opec meet to discuss whether to extendhe current oil production cuts. tuesday, some automakers report june ses figures. investors will be focusing on the pace of suv demand. on friday, government releases the always-important employment report, ts time for june. that's what we're watching for next week. elsewhere, farmers apparently planted more corn than expected this spring despite heavy rains and flooding in the midwest. o we should poi all of the water kept farmers out of their fields for much of the planting season making official estimates difficult to put together, but the department of agriculture said while corn acreage was up,r soybeange came in below forecast to the lowest level since 13. it has been ten years since the federal minimum wage was increased. bat's a record. while it may stuck at the federal level, states and some companies have been takingo matter their own hands.

kate rodgers has more. >> reporter: workers across the country are getting a raise as states and localities increase wagesm the pay increases come as the federal minimum wage remain stagnant at $7.25 for nearly a decade,es a new record,te cries from advocates to a hike as much as $15. new jersey will raise pay to 0 on july 1st. in washington, d.c., the minimum wage will reach $14 an hour. many of the heits are incremental steps on a path to a $15 an hour wage. morehan half of the states nationwide now have wage floors higher than the federal minimum wage. >> right now we have seven states and the district of columbia going to 15 andhat's ahird of the u.s. workforce. but that still leaves 100 million workers in stas that haven't at the time is floor at 15. 56 million of those workers are

in states where the federal mimum wage is $7.25. >> reporter: despite little movement from the federal government, major have been raising pay for workers. amazon hiked wages to $15 an hour and target is on a ph to $15 by 2020. mcdonald's has said it wouldo longer lobby against hiking the minimum wage. >> i think there's broad recognition among american people now that if somebody works they should be able to afford a place to live, you know, some means of transportion, enough food, and 7.25 doesn't pay for that. $10 doesn't payor that. $12 doesn't pay for that. in a lot of places but at least it is a place to start to do that for an adequate minimum standard of living. >> critics say a $15 blanket hour a wage doesn't make sense in every localit particularly in places where the cost of living is lower. house democrats are moving closer to vote on the issue that would raise the level to

$15 an hour, and those vying democratic pre dential candidates also have braced a $15 an hour wage. meanwhile, president trump has previously said he believes states should decid the minimum wage floor. for "nightly business report", i'm kate rodgers. and before we go, one final look at the day o wl street as we close out the first half of the year the dow is up 73 points. nasdaq, up 38. the s&p added 16. as we mentioned, the s&p posted its best start to a year since 1997. that is "nbr" for a friday night. i'm bill griffeth. thank you so much for watch gg. haveat weekend. see you monday. ♪ ♪

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