♪ this is "nightly business report" with bill griffith and sue herera. ♪ still going. the s&p closes at a record for the second straight day as the economic expansion becomes the longest can the growth continue? speed bump. corporate buy backs have been a tail wind for the marketsut they slowed in first quarter. the ramifications for investors. and watchful high. insurance companies are riding along withs,driv virtually tracking their behavior on the road. good for customers or too big brother? all of that and more on "nightly business report" to night for tuesday, july 2nd. ♪ and we do bid you a good evening, everybody, and welcome. it wasn't exciting, wasn't spectacular, but i the end it

was another record for the s&p 500, but the gains were a capped bit as yesterday's enthusiasm over a trade truce between the u.s. and china was replaced by a scepticism today after the u.s. threatened more tariffs on $4 billion worth of european union goods. just another chapter in that long-running despite over aircraft subsidies. in the end, stock did hang on with the dow rising 69 points, the nasdaq a climbed justut 18, and the s&p scratched out a gain of eight for that record close. and as for the china trade issue, administration officials met to discuss what to do about the chinese telecom company huaw. as part o the detente the u.s.x re restrictions against the company but it isn't exactly clear what that means, but white house trade advisor peter navarro gave his take >> we a going to work closely with our allies around the world to make sure huawei 5g is not in those countries, but in the meantime a small aunt of

low-level chips are going to be sold to keep systems going, and that's not a bad thing when it gets us back to the bargaining table with china and with china committing to immediate and significant purchases of agricultural goods. let's see if they deliver on that. >> navarro did say trade talks v wereing in the right direction. eunice yoon takes a look at what is next. ♪ >> reporter: the expectation is that over the course of the week the trump administratio will clarify what can be sold and not sold to chinese tech giant huawei. the uncertainty has become a dark cloud over the trade t tal. presidump says the two sides restarted negotiations, but the huawei issue will likely complicate them since the chinese now expect restrictions onbe huawei t lifted asart of a deal. president trump is already facing resistance to eing up on the company, which members of congress, the nation at security

commity and hawks within his own administration have argued is a security threat. the talk now is of a partial ban. white house economic advisor larryudlow says approved products would mass market and not impact national security. that suggests that core 5g networking equipment would be limits. a source following the trade talks on the chinese side told me that tou chinese cld go for that though it is still unclear how national security would be fined. the chinese caught on to the contradiction in u.s. policy, reinforcing the view here that the u.s.'sampaign targeting huawei is not about protecting national security but mor about undermining china's tech ambitions. separately, wall street will be able to expand businesses in china faster than they probably expected. the premiere said today thatch a would move up the timeline thatould allow foreign financial firms to wholly own an entity herey 2020. up until now firms have been applying for 51% w ownershh

an eye on full ownership by 2021. thepanies that are i process or have gotten approvals recently are jp morgan, morgan stanley and ubs. in theory, as of next year certain fund management companies like fidelity, vanguard, black rocki invesco cn sell to investors. the move was seen as a message to the u.s. and beyond that china is serious aboutts acceleratingconomic reforms. people in the financial industry here tell me that the move is significant, but that the reality of getting things done in china like licensing means that t pcess of expanding will be slow. for "nightly business repor i'm eunice yoon in beijing. the trade war with china is hitting u.s. real estate. as diana olick tells us it is not just about higher construction cost but lower demand from chinese buyers. >> reporter: wes yuwn one

home in southern california and one in new jersey, but he is now pulling back from buying more. >> translator: the trade war makes everyone, because we're immigrants, we are hesitant, a little scared to invest more political the situation. >> reporter: for several years the chinese have been the largest international buyers of u.s. real estate, but their numbers are now shrinking due to th tradear. in the first quarter of this year chinese buyer inquiries for u.s. properties on a chinese real estate site were down 27.5% from a year ago while they were up for propeies in canada, the uk and australia. inquiries have been down in four of the last five quarters. the ceo calls it the trump effect, a combination of se anti-chiolitical rhetoric, a clamp down on visa processing and tariffs. it is also hurting demand from chinese students and their falies, especially in california. >> students come to america, they very -- they -- to ameri

spirit, america lifestyle. but after the trade war they acve to go back. they have to go to china, to go back to their country. so they stop to invest in property. eporter: it is also now getting harder for chinese citizens to get their money out of the country. as a result of the trade war, the chinese government is now cracking down on the $50,000 limit on foreign currency exchange. >> translator: >> china/u.s. trade war has an impact on investors. >> reporter: she says 75% of her business used to be chinese buyers but now it is les than half. >> before the trump administration, most of the chinese use a o lot underground banks and they use -- say, for example, 20 people, each wire $50,000 to their bank account over here in u.s., but now they are not evellowed to do that. >> reporter: so with the funding cut off and some offi the

nancial and ed indicatiucationa incentives less appealing, chinese buyers are simply taking their business elsewhere.y for "nighsiness report", i'm diana olick in washington. to the economy now where the latest read on auto sales shows americans still have a healthy app ti appetite for a new vehicle, especially when it comes to pickup trucks. phil lebeau has more on what is lling on the lot. >> reporter: there was a time when ram trucks were considered a distant third in the big three pickup sales race. not anymore for the second straight quarter, ram pickups outsold the chevy silverado, gma top-selling vehicle, with ram sales surging 15% last month. one messagected with buyers and will help feeate chrysler's bottom line since pickup trucks have some o the largest profit margins, especially higher-end versions. for the second quarter, fca sales fell only fractionally

while gm and toyota were down slightly more. overall, the strong economy, low unemployment and low interest rates are convincing americans to buy new vehicles, especially higher-priced models. the average price paid is now close to $35,000. for the year, auto sales are not far from the record pace seen over the last four years. while june and second quarter sales are proof there's still enty of demand for new vehicles, investors remain skittish about auto stocks, which has struggled to kick into a higher gear like the rest of the market. ightly business port", chicago. the u.s. economy is now in its longest economic expansion in history without a this month marks the 121st nsecutive month of growth 2008 financial crisis and that beats the previous record of 120 months between the years 91 and 2001. joining us tonight to talk about

it all, odettaushi, deputy chief economist at american first financial. thanks for joining us. >> absolutely. >> it hasn't been the strongest growth we have seen ovest the decade or so, but it has been steady without a recession. what happened? y has it been this way do you think. >> so this is t lgest expansion we have had in the record and we're also facing record low unemploymenan rates you know, consecutive growth in job gains. however, it has been extremely slow. compared to previous recoveries we had aut a 2.3% year over year gain on average gdp growth and inas the we had about 3.5%. the reason for that has been sln gish gainse labor force. as more people are retiring and younger people haveeen pushing their educations longer and longer. >> slow and steady though wins the race, at least that's the adage. does this continue at a slow and steady pace or does the second half look even slower?

>> well, we're starting to see some economic indicators really slow down in the second buarter, the labor market remains extremely healthy. you know,two-thirds of gdp growth of consumer spending, soe as long as teople have their jobs and they're able to go out and spend, then it is looking pretty healthy for 2019. >> but those looking for a cut by the federal reserve in their interest rates argue in part it is not justco about ourmy but it is the global economy, that we're seeing a slowdown ooverall in part becau the trade tariffs we are seeing here. what do you think? >> so that's sometng that could work to slow down the economy. co confidence, business confidence, manufacturing are all a product of, you know, the global economy, especially wnufacturing. re really going to be watching what happens with these trade wars and tariffs, and tha could have an impact on this expansion. >> you know, depending on where you look, weust had a report on the housing market. the housing market has been and inning to the economy, but that even with lower interest stes in sometors of the

country is starting to slow. is that significant? >> so theke housing m has made some significant gains, especially in house prices, but the issue really has been a lack of inventory.re peopleot moving from their homes and it is really tough to buy what is not for sale. so we haven't seen home sales we have been expecting, but that's largely been a product of a lack of supply. certainly not a lack of demand. the demand tre is very strong. >> so if you had to guess, how much longer does this last do you think without a recession of some kind? >> we're seeing a healthy 2019. the crystal ball gets a little muddier after that, but definitely atrong year, especially as we continue with the record low unemployment rates and the healthy labor market. >> that does help, that's for sure. with first american financial, odetta cushi. thank you foroining us. >> thanks very much. you might recall yesterday we told you that opec agreed to extend prices for nine months to keep oil prices from falling too far. today its non-owe pipec partner

it is a good idea and it did not stop oil from falling 5% on fears of slowing dand. brian sullivan has more from vienna. >> reporter: the morning of day two here at the opec meeting wad dominay russian and their extension of the 1.2 millionel ba day cut aligned with opec bringing the nation closer to the cartel. but the news came later on in the aftnoon a well when cnbc landed an interview with the oil minister of saudi arabia, and we diverted from the opec topics to go on to broader information. specifically, i asked him about the expectations inke the m that global economies were at risk of slowing down and, thus, oil prices may fall. he disagreed with that and thought the stimulus the fed and central banks are providi should help boost economies in the second half of the year. >> i see it the other way. i e the stimulus steps being

done by monetary authorities are precautionary in nature, but they're certainly going to have a positive effectem inrature of fuelling economic growth. i think the fact that we've had soft prices for oil and energy in general is also another stimulant for global energy demand. >> reporter: the other big topic that has been facing oil and gas investors in the united states, of course, has been the idea of debt, that many of the biggest oil and gas companies, specifically those in the permean basin of texas have too much debt to continue on long term. roit has been a gwing theme in the market as of late which is why oil and gas stocks have not performed well. i asked him, what does heab thi t debt levels in the permian and he did express some concern. >> definitely they have not been generating enough cash flowo thei investors. i know that impacting the appetite for investors to continue with putting money into unconventional resources.

so the combination of infrastructure, which has constrained, the combination of servicustry constraints, financial constraints, as well as the unown constraints of geology will ultimately bring us back to reality that there has to be a plateau andat ult decline. >> reporter: those words may not be too comforting to u.s. oil and gas investorsr the companies themselves. so while we leave here, the opec meing in vienna, austria, the focus will be on the group's longer term future, itsup ti with russia and maybe some concerning comment about debt levels among oil and gas kp companies in the united states. for "nightly business report", from vienna,'m austria, brian sullivan. by the way, european leaders today nominated christine lagarde to become the head of th central bank when current president drahgi's term es october 31st. lagarde has led the international monetarync fund 2011 and if elected would become the first woman to lead the ecb.

coming up, does the drop in corporate buy back signal a warning for stock investors? ♪ ♪ spinning off its asian business,ki l to raise nearly $10 billion by listing shares in hong kong, it would be the world's largest initial publicffering so far this year. shares of ab inved itself rose mo than 2% in today's trade. frank holland takes a look at this strategy. >> reporter: they sell beer in , and corona the region. sales are up 8% and up only 1% in the u.s. it is expected to increase the

company's standing with investors. in the long-term, this gives ab imbed a strongest presencen the biggest beer market in the world. last year chinese consumers drank twice as much beer than americans according to data. an analyst says the market was previously dominated by low end brands and the created the premium and super premium segment in this region. ceo carlos brilgttle elling the financial climbs this ipo could be participate of a strategy to grow by acquiring them in asia. he said the number one reason to do it is to have a platform in the region that is closer to the market. it is atr segy that jeffrey's analyst jefey munday agrees with, adding local players may prefer local. already the largest brewer in asia, ab imbed is hoping this

listing will help it keep growing. for n"nightly business report," frank 408 land. the irish data protectionhi commission is europe's main regulator of apple has ened a third priva investigation into the iphone maker in the past few weeks. the regulator is looking into whether apple users have d sufficiea access rights. apple shares rose a fraction today to 202.73. july 4ththling its themed sneaker featuring an early american flag with 13 stars in a circle, non-as tknow betss flag. the "wall street journal" says former nfl quarterback colin kaepernick who is one of nike's sdorsers told the company it should not sell taker because the flag links to a period of slavery. nike told cnbc it did not

release the shoe because it represented an old version of the flag. > raising its guidance thanks to strong revenue and demand heading into the busy travel season. the airline carried aonly record of 19 million customers in june. the stock was up more than 1% today to 58.54. cnbc is reporting t-mobile and dish network agreed to a divest tour deal to help t-mobile come closer togeaining m approval with sprint. however, the reports say that department is still concerned that the deal is not sufficient to make dish a competive wireless network once the t-mobile/sprint merger is t-mobile shares are up nearly 2% today to 75.48. dish was up aut a fraction to 39.17 and sprint shares up more than 4.5% to 688. after the bell t teslaped expectations by announcing more than 95,000 vehicle deliveries. the company also beat production estimates with a record 87,000

carsdu pd. shares rose initially in the after hours trading tonight but did close t regular session down more than 1% to 224.55. > could a slowdown in share buy backs be hurdles for the stock market? according to the "wall street journal" share rurchases by companies recently contracted for the first time in seven quarters,em potentiallying a pillar of support from the market. mike bailey is director of research at fbr --bb capital partners and joins us to discuss exactly what it could mean for investors. mike, welcome. nice to have you here. >> great. thanks to be back. >> are you worried about this? why the pull back? >> we're not too worried about it. we would sort of put the buy back changes in perspective with other changes going on in therk . so if you look over the last couple of years, you've seen buy acks move up down. we really haven't seen our tight sort of pattern with a big move up or down in buy back and, frankly, a move in the stocks, which is really what i aestors worrut. you could go back to, for

example, 2017. we saw ay amount of buy backs and stocks went up. the flip sideas 2018. you saw companies buying back hares and the stock market was dead. so we sort of put cold water there in terms of thinking there's a really tight impact. >> but if there's not a correlation in the stock market movement, you have to admit though there has been a good tail wind for the markets over the last decade shall hasn't it? absolutely. it certainly has helped. some folks tried to quantify. some people said if earnings are generally growing, high single digit -- let's call it 8% earnings growth, maybe one to two percentage points came from buy backs. it is definitely helping. it is not the majority of growth but it is meaningful, so any big swing in buy backs, you want to pay attention to ie but you h to keep in mind the other factors out there driving total earnings growth. >> could it also be when interest rates were low and we were toming out of recession, companies were able to do the buy backs perhaps a little more cheaply and a it re easily than they are now? >> it is possible. you know, i mean you could argue, you know, if interest

rates are low people can, you know, borrow money and the debt markets take that and buy back stock, that certainly helps out the stock price. maybe there's a little less right now. f but tp side is interest rates are coming back down again and you could starto see the cycle kick in again. the first quarter was a bit of a dip, things couldbilize or come back in the back half of the year. >> what do you think happens now? do we see a meaningful pull back of some kind at some point? i realize you are makingsehe hat the buy backs haven't been as much of a tail wind as others might expect, but if they starto pull back in a meaningful way, what do you think happens to the stock market? >> so, yeah, it depends on the size. if there's a meaningful pull back andou start to see headlines, big blue chip companies cutti buy back programs and it filters down across the market, yeah, you could argue it is going to have an mpact onsentiment, it is going to slowdown overall earnings gwth and it will have an impact. if earnings are generally growing, you know, let's say 8% and now theye growing p% or 6%

it is not as gend. but pally a better return than you could get in the bond market. it is relative b we are watching for any major changes in buy backs. >> all right. mike bailey with f capital partners. mike, thanks so much. >> great. thank you. and comin up, when your insurance company becomes a back seat driver. >> it is a big, new trend in uto insurance, tracking driver behavior. the bet is big brother will mean a bigheoost to bottom line of insurers, but how much privacy are you willing to exchange for a discount on your auto insurance? i'm contessa brewer . that's coming up on "nightly business report". ♪ ♪ on

finally tonight, insurance cotaanies areing to use apps and other devices to monitor driver behav ir real-time, but does instant feedback like that make you a better driver or are you the one taking the risk? as you saw, contessa brewer is behind the wheel tonight taking a look. ♪ i'll never forget you >> reporter: as a backup singer with the allman brothers and other well-known rock bands, keith shares his voice with the world but he doesn't want to share how he drives. >> it is kind of a personal thing, driving, where you're going, how fast youregoing. >> reporter: the vocalist downloaded the app from his car insurae,e company, all st to pay his bill more conveniently. he didn't realize theas app also capable of monitoring his driving. >> i had no idea it had the tracking app within the app. noidea. it gives you an option of, yeah

sure, go ahead and track me or no thanks. so then it is like i you click no thanks they're like, what are you hiding. >> reporter: it is called ubi, used based insurance. they track and report driving behavior, how fast you go, how hard youbrake, how much time you spend behind the wheel, even the time of day you drive. auto insurers nationwide are offering discounts for drivers to download and use these apps. just keep it running in the background, then drive safely like you do already. you can watch and see why you're saving. >> easy, easy. >> but you're in labor. >> don't mess with my discount! >> reporter: the ads highlight the savings and that appeals tov some s. >> that would do it because i'm a really safe driver. >> everybody knows what we do anyway. if it can save me a discount, i'm for it. >> reporter: but the flip sidev bad d could see their premiums go up. this data-dependent system is designed to benefit >> there will be some savings in premium but they will see more on the back endron thet side because these pay out fewer

claims and lessen claim or they ase an inc in premium because people who have abor drivings have an -- and enjoy a higher rate. >> reporter: but the tracking actually changes driving behavior. researchuss foundmers whose driving was monitored for 26 weeks decreased hardki b by an average of 21%, and youngerhe drivers improved overall score the most out of all age groups. as the trend growco there's ncern about whether the monitoring becomes mandatory and the privacy concerns loom large. >> it is just the idea of being tracked. it feels a little big brotherish. >> reporter: still, if it sounds a sour note with some -- it is a seismic shift in the way insurers assess risk, how your .rive rathan your history of drivi ♪ >> reporter: for "nightly business report", contessa brewer . and before we , here's a final look at the day on wall

street. the 6ow rose points. the nasdaq climbed just about 18. the s&p 500 scratched out 8 for a record close. and that is the "nightly business rort" for tonight. i'm bill griffith. thanks for watching. >> i'm sue herera. have a great evening and we will see you right back here tomorrow. ♪ ♪

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