this is "nightly business report" with tyler mathisen and sue herera. low growth a leading international group warns the global economy risks falling into a trap and it's urging policy makers to act now. americans did not buy as many cars last month as they have been. storm surge threat, 7 million homes are in harm's way resulting in potential damage has hurricane season officially begins. those stories and more on "nightly business report" for wednesday june 1st. good evening. stocks made a big turn but we begin tonight with the global

economy which the organization for economic cooperation and development says is vulnerable to another deep down turn and warns that urgent government action is needed. those global growth concerns were evident in the latest data out of china, the world's second largest economy reported weakness in the manufacturing sector and here in the u.s. while things are better the economy isn't firing on all i l sillen ders. >> reporter: business malgrowth is set to continue this year and next unless governments stop relying on central banks and low interest rates and rely on themselves. that was the latest report today from a global group. in the latest forecast they said global growth will remain 3% this year or the same as 2015 and rise only to 3.3% in 2017. growth is seen weakening in the

u.s. and there was a little change for europe and japan. the oecb slashed its forecast for china to 6.5%. it calls it a low growth trap. >> the reason why we're in a trap is because there's insignificant demand. in other words business investment says i'm not going to invest and hire people because i don't see any demand and then of course since they don't hire and generate wages in fact there isn't. so it's a trap. >> reporter: they concluded that banks are not enough to break out of the trap. >> we have to bring in the second policy instrument which is fiscal policy and we know that countries now have the opportunity to borrow at very low interest rates so they should do and that and engage in the type of projects they've put on hold. >> reporter: those policies are controversial in countries where

there's concerns about deficits and paying interest on debt once rates rise and doubt about the effectiveness of borrow and spend policies to spark growth but some say they could break the trap. >> if we structured a plan that caused the economy to grow more in line with the historical record there is a case to be made that those debt figures would look a bit less because instead of growing 3% to 4% nominal we would grow 5 to 6% nominal. >> a key manufacturing index came in better than expected by wall street that would still suggest only modest growth. construction spending more than expected. the fed indicated modest growth across the country but some pick up in hiring and wage szs. markets are bracing for the friday's jobs report which could give a green light for a federal reserve hike later this month.

on wall street concerns about the global economy pressured stocks at the start but the afternoon the loss is gone and stocks closed out the first trading day of june with small gains. the dow jones rose two points. it had been down as much as 122 earlier in the day. the nasdaq added four points and the s&p added two. the auto industry hit a bit of a speed bump in may. sales at some of the world's biggest auto makers came in below expectations. gm sales were down 18% last month, ford dropped nearly 6% while chrysler sales rose 1%. the pace of sales remains healthy but as fill lebeau reports there's one type of vehicle that's no longer in demand. >> reporter: make no mistake america's appetite for new vehicles is shifting.

may auto sales slumped compared to the same month a year ago. cars are no longer in demand. low gas prices have hit hib rids but other cars are finding it hard to compete against crossovers, suvs and pickups which are red hot. chrysler sold three times as many jeeps as it did all of its cars combined. this has become a double-edged sword for out makers. they make more money selling trucks and suvs. while those models are more fuel efficient there's a concern about what happens if gas prices spike and americans move back to wanting cars. against this back drop the rate of auto sales remains relatively strong. though slightly below the record pace the industry set last year. for "nightly business report" i'm phil lebeau. ford is recalling vehicles

for a defective air bags. ford's move covers nearly 2 million vehicles in north americd fes on the passenger side air bags. some of the world's large egs oil exporters will meet tomorrow. there's renewed hope that opec will renew the production. the possibility helped companies shed most of their declines. investors are hoping the meeting brings answers to the many questions. >> reporter: heading into the first of its annual meetings. will the run back to $50 for oil be enough to satisfy the cash strapped members. on the way into his hotel

earlier today the oil minister suggested that $59 might be enough but $60 maybe. >> it's okay, but maybe $60 per barrel. >> reporter: the second big question is whether or not saudi arabia and iran can put aside political and religious differences and come to any kind of a deal on either limiting or cutting output. both have been engaged in a fierce market share around the world particularly in china and the saweddies will be sending a new representative to opec for the first time in 60 years. the third question is will opec survive as a cartel. many are saying that their inability to strike a deal over the last few years means that the cartel has been dramatically weakened. we'll see tomorrow if they can answer

because what happens will impact the price of oil and it will impact the price you pay at the gas pump. in a cnbc survey more than 0% of those polled say there's a view low chance of a production freeze at tomorrow's opec meeting but the analysts and traders and major energy funds who were surveyed say that no action from opec could have an adverse effect on the market. the gulf coast region home to the oil rigs are getting ready for hurricane season. it kicks off today. forecasters say it will be slightly more active than normal. the risk to coastal real estate is already high and according to a new report rising. diana olick explains why. >> reporter: the sun is out now but storms will be brewing over the next few months and nearly 7 million homes are standing in harm's way. the numbers are rising because builders keep building and buyers keep buying. these home represent the

collective $1.5 trillion in potential reconstruction costs. the risk to homes with that water view is highest in florida and louisiana and texas where the coast lines are longest. louisiana is particularly susceptible to flooding because of its low lying flat lands. the risk to cities relies on density and home values. 57% of the homes at risk are in 15 markets. they account to 68% of the costs to rebuild. those costs can vary depending where you are. take miami for example. the total cost of reconstruction comes in at $144 billion. new york city has fewer homes at risk but the cost of re is nearly twice that of miami because of the of the high density of where they are. it all begs the question why do we keep building houses that are in clear danger of destruction?

the answer is more it psychology than reality. hurricanes don't hit in the same place every year and people tend to get hurricane amnesia even a few years after a big storm. the jersey housing market is hotter than ever this summer. sandy was nearly four years ago. for "nightly business report" i'm diana olick in washington. under pressure, why the treasury department is cracking down and further cutting off one country from our banking system. a congressional committee

has laurchled an investigation into the federal reserve bank of new york. the panel wants to know more about how the new york fed handled the highest of more than $80 million for accounts it maintains. the committee also wants to know what oversight the fed has conducted of the swift system, a messaging system used by banks across the globe. north korea, the country that may have a link to that fed hack is being further cut off from the international financial system. the treasury department today declared north korea a primary money laundering concern and is further isolating that country from access to u.s. banks. we are following the story from washington. good to see you. so what are these new restrictions that the treasury department is using? >> reporter: this isn't finalized yet. if it is finalized it will mean that u.s. banks have to do additional due diligence on any

transaction that might interact with north korean finance. they say the reason they are doing this right now is because of a determination that north korea is involved potentially with international financial transactions that back up weapons of mass destruction. that's the concern that's being cited today but it comes amid this other discussion of who actually did this bank hack that hit the new york fed for $81 million. >> why now with respect to north korea. i think you answered that but do we know anything more about who was behind that hack into the bank? >> reporter: we don't. what we know right now is there is some investigators are circling around the idea of some kind of north korean involvement here. the reason being is they found particular software code inside the system they say was similar to software code that was used in the sonny hack and the u.s. government said it was north korea that did that one.

but and this is a big but here, all of this can be purchased out on the black market. there are cyber gangs for example that north korea could have hired to do the sonny hack and not done it directly themselves. so who exactly it is that got into the bank and stole that $81 million is still a big global who done it. >> i find it interesting they have access to the financial system at all. thank you so much. income at u.s. banks declined for the first time in two years. energy loans says low energy prices have led to sharp increases in noncurrent loans to oil and gas producers. he added the full impact of those loans remains to be seen. net income in the first quarter for banks fell to about $39 billion. a wave of innovation has turned the banking industry on its head. financial technology is changing the way people transfer, lend and borrow money not just here but around the globe.

a dark cloud is forming over parts of this fast growing business. >> reporter: protests like this one in beijing are increasingly common in china. enraged investors demanding compensation and justice after losing their saverinings in a company. these alternative investments which match investors and borrows online have exploded in china but so have the scams casting a shadow over industry players like this man who hope unconventional financing will be a glowing spot in the economy. he runs a company, a chinese technology firm. >> scandals have been seen since the secot year. they are scams. they happen to be happening in

this time. that did effect the confidence of the consumer and it did effect the attitude of the regulators. >> reporter: regulators here have been tightening rules on p to approximap lending. in china with funding out of reach for many economies this sector has ballooned into a multi billion dollar industry. he expects 2016 to bring uncertain times as regulators wearily eye this. >> regulators decided to come into play in this market but it takes some time for the players and regulators to come sort of harmony. the regulator it's very often that regulator didn't understand at the beginning when they understand all this -- think

they understand they will overregulate. so when they overregulate the industry or the growth will be slower. >> reporter: the former google employee believes no company will be immune. even the most famous brands like apple pay. >> i know that apple pay is coming to china is a huge apple fan space and i'm using apple pay but actually i don't know. anyone who wants to enter the financial -- the finance sector in china, the first thing i think they need to talk to the regulator first. it's very hard not only financial players but any internet or technology companies to try to operate in china, it's different rules. >> reporter: as for this man he's bracing for an industry shake out he hopes will bring stability to the independeustry some people may be scared or may be lost confidence at the beginning but they are coming

back. they are shifting from those shaky platform to a more representable more renowned platforms. it's better to face this problem earlier than later. >> reporter: as long as he can survive any potential surprises along the way. for "nightly business report" in beijing. strong demand for handbags and accessories helped lift michael mi kors. it raised its full year earnings forecast. it plans to focus on selling at full price and expanding in a a asia. shares rose. aggressive discounting and promotional offers at lands end reported a nearly $6 million loss and a steep decline in sales. the ceo called those results dispointing. shares fell to $15.81.

the cloud kputing company will buy demandware. the merger expected to increase the yearly revenue by up to $120 million. the ceo spoke about the opportunities the deal presents. >> our customers are trying to connect with their customers in a new way. you know that. in sales and service, now they also want to be able to create their own stores as well. online stores and physical stores, the commerce crowd. it's going to be amazing. >> sales of shares off a fraction. demandware sored 57%. concerns over increased competition and a slow down in retailer spending caused morgan

stanley to down grade niki's stock. they were off about .5%. it was a good cracker at cracker barrel as the restaurant chain posted better than expected quarterly results. the company is raising its full year earnings forecast and if that wasn't enough cracker barrel is raising the quartly dividend to 4.5% and issuing a one time dividend. the stock was up more than 8%. lu lu lemons is calling for a board shakeup at the athletic apparel company. there was an open letter to shareholders stating disfafgs with the company's performance. >> they're rolling out stores but they're not going into anything new and they're --

they're not -- they say they've got technology. they say they're doing innovation but i might be the number one person in the world to understand that and i don't see it anywhere. >> shares none the less rose more than 1.5% to $66.17. they're visionaries and today top tech executives are talking about the future and the growing role digital technology will play in our day-to-day lives. jew . >> rep cutting edge technology driving conversations about the challenges and opportunities in the next generation of tech. sheryl sandberg weighing in. >> we're proud of that. we also know we need to execute. we need to continue to work hard and build production over a three, five and ten year time frame.

we need to keep our audience and the people engaged. >> reporter: artificial intelligence is a huge topic here. facebook's ceo talking about the big role that ai will play in facebook's future and they're at the beginning of building out the power of artificial intelligence. >> in some ways our vision is thinking of building the individual google with. we want this to be user sent rick. i think building a system over time is being able to understand users and be a friend for them and i think it's going to take us time to figure this out. >> reporter: with more than 1,000 employees work og the amzon echo dwevice. he says this is the beginning of how they will invest in content and licensed shows as part of a bigger retail strategy.

>> from a business point much view for us we get to mon ties that content in a very unusual way because when we win a golden globe it helps us sell more shoes. >> reporter: amzon is using artificial intelligence to sale for shoes. as technology plays an every larger role in consumers lives. for "nightly business report" california. even though whether i've been nautty or nice. the ultimate man cave where ferraris are included and they're on a t

let's look ahead. here's what to watch for tomorrow. as we reported opec will make its decision on whether to freeze oil production. the european central bank is meeting to discuss monetary policy and jobless claims and adp's report on private payrolls are due out and those are the last labor market reports ahead of friday's key employment report. that's what to watch for for thursday. finally tonight the man cave most or at least many men weant one, a place all their own where they can relax. we go to one in orange county, california that's like none we've ever seen before. >> reporter: in this super rich neighborhood in orange county, california, when the guys get together for poker night bragging rights are on the line.

but they've figured out a way to up the ante. >> there's a competition among the home oernz here to build the most amazing space for the poker game. >> reporter: the owner of this mega mansion went all in and built a massive one of a kind man cave. stacking the deck with all the essentials like a full bar, wine cellar and pool table and more than a million dollars in electrics. he made sure this high price equipment works like aces. >> the automation system we have installed in this home is the same system that's installed in every disney theme park in the world. >> reporter: what raises the stakes in this luxury fantasy land are the homeowners ride, lots of them. >> right now we're spinning around in the car cave. >> reporter: what a garage it is. this is the ultimate full house. two aston martins, a 1927 car

and a 1930 austin and six super rare pre-1970s ferraris, each worth millions, all 4,000 square feet of the car cave is covered in kobl stone, the walls and ceilings are made of limestone and when the owner wants to show off the collection, he can set the mood in an instant. >> the lights are the perfect museum setting. the music is usually playing '60s classic rock. >> reporter: the music is di but the star of the show is spinning on the turn table, a 1958 ferraris. this one has a european racing history which jacks the value up to nearly $10 million and the entire jackpot is worth more

than $20 million. which means for this homeowner, there really are no limits. for "nightly business report" i'm robert frank. >> boys and their toys. >> i'm speechless. >> that was astonishing. >> would you take it out? i would be afraid to take it out. >> no. >> that's the problem. >> we will never have that problem. >> we don't have to worry about it. that does it for us tonight. thanks for joining us. i'm sue herera. i'm tyler mathisen. have a good evening everybody. we'll see you back here on the turn table. "the crimson field" was made possible in part

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