Will head to the polls next week to decide whether the United Kingdom should exit the european union. The markets have largely shrugged off that threat but that is starting to change. Over the past few days volatility has risen and stocks have come under pressure as poll after poll show grow support for the leave campaign. And that is why stocks were lower again today. The Dow Jones Industrial average average fell 57 points to 17,674. The nasdaq down almost 5. The s p 500 was off 3. As investors flee stocks, money is pouring into relatively safe investments. So much so that the yield on germanys 10year Government Debt fell into negative territory. The yield on the 10year u. S. Treasury hit levels not seen since 2012. Lets turn to our two guests who have opposing views on how the u. S. Economy will be impacted should the United Kingdom exit the european union. Paul christopher is head of Global Market strategists at Wells Fargo Investment Institute and he says it will be negative for the economy and equities. While the chief economist at ihs Global Insight thinks that the impact will not be all that big. Gentlemen, welcome, thanks for joining us tonight. Let me start with you, if i could, paul. Why do you think it will have a negative impact either on the markets or the economy or both . I think its going to be a complicated divorce. One in which it will first of all push the uk into recession as investment there falls. It will also create uncertainties and falling confidence on the continent itself. That could undercut some of the progress weve seen in the economy there. I think it will at least slow europe and that will slow exports from the u. S. As well as revenues back to the u. S. From Companies Already operating there. You are not all that convinced this will be a negative event, why . Lets be clear. I think it will be negative for the uk. I dont know that it will push them into recession but it will reduce growth quite substantially. Maybe only 1 growth next year from 2. 5 . Same thing for europe, it will cut their growth. The good news for the u. S. Is we dont export that much to. Theyre a fairly small export market for us. But there will be a big offset in the sense that global Interest Rates including our Interest Rate will there will be a flight to safety in the sense of u. S. Bonds, even possibly u. S. Stocks, after the initial shock. I think there are negatives that will offset this export shock, if you want to call it that, which will be tiny i think in th polls can alw we saw that in the Scottish Independence vote as well. Thats a caveat to this discussion. Paul, if indeed we do see an exit vote, a leave vote, carry, theres growing concern that other members of the eu who have been under pressure greece comes to mind might decide to follow suit. Is that a real threat . Its always been a threat, sue. But i think if greece is not going to go and greece hasnt been pushed out yet, thats maybe the more important way to think about it, then its unlikely anyone else is going to leave any time soon. Especially if you try to leave the european monetary union, thats a little bit different story, thats a more tightly knit group. If you have to change your currency in order to leave the group that makes it more complicated to leave. Does this complicate the already complicated election cycle . At this point, there are those who say that it would be a damaging situation for ms. Clinton if indeed she prevailed in the electio i think you have to kind of separate it out a little bit. Again, i dont think that the brexit as its been called, britain leaving the european union, has that big effect on the economy or the u. S. Electorate. I mean, frankly, i think the u. S. Electorate isnt paying that much attention to this si i think it does have ramifications for the federal reserve. I think if they decide to leave, i think this will put the fed on hold a lot longer than it otherwise might have been. So it will mean Interest Rates will stay lower longer for the u. S. Which is not necessarily a bad thing for the economy. Right. Paul, would you agree with that aspect of it . Yes, we would agree. Were only looking for one rate hike this year as it is even in the best of circumstances. We think if the britons vote to leave it could complicate matters further for the fed and we could see that pushed out a bit. Do you think the market is overreacting to this . Markets hate uncertainty and this is a huge uncertain event. So overreaction is perhaps too valueladen a word. They clearly are unhappy about this and dont fully understand all the ramifications. So im not surprised theres a fair amount of market volatility around this. Once its decided one way or another, i think the markets will settle down. Finally, id like both of you to cast your vote, paul, would you whats your handicap, are they going to stay or le i think theyll stay. Okay. Ill agree with that. Okay, on that note, gentlemen, great to have you with us. Thank you. Thank you both, gentlemen. The uk referendum along with concerns Global Central Bank policy is becoming ineffective is causing investors to hoard more cash. The latest bank of America Merrill lynch Global Fund Managers survey shows cash levels are at 15year highs. Despite all the concerns in the market consumers are still spending. Retail sales, a key gauge of consumer spending, posted a solid gain last month. Commerce department reported a. 5 rise which was above expectations. Households have benefited from steady job growth, reduced debt, and rising home prices. And prices for imported goods rose at their fastest pace in more than four years last month. Thats the third monthly rise in a row. Most of the gains came from oilrelated products whose prices have been climbing over the past few months. Federal reserve policymakers today began their twoday meeting on Interest Rates. Just a few weeks ago many thought a rate hike might be likely but a weak jobs report and increasing concerns overseas seem to have changed all that. Steve liesman tells us what the nations top economists, market strategists and Money Managers reporter the cnbc fed survey shows wall street expects a more dovish fed pushing later the expectation for that next rate hike from august to september. Lets also look at the outlook for Interest Rates from our 41 panelists from the street. 0. 7 is the expectation for the funds rate in 2016. 1. 5 for 2017. 2. 2 in 2018. The long run they think the fed will settle at 2. 6 for the long run. Notice each one of these points is below where the average member of the fed is, well get new numbers from them at the announcement at 2 00 tomorrow. How about the s p, expectation is that we will recover, we have recovered the optimism we had before the market swoon in january and february. Looking for 3. 4 up by the end of 2016 to 2149 on the s p. Up about 8 to 2244 by the end of 2017 from the current rate of 2079. 28 say its Global Economic weakness and tax and regulatory policies here in the u. S. Rising Interest Rates 25 . Protectionist trade policies 13 . First time weve had that on the radar. Terror attack in the u. S. , this was done before the events in orlando. Register zero, and they have never registered high even after the terrible attacks in san bernardino. Look for the fed to hold Interest Rates steady at the meeting when the announcement comes at 2 00. For nightly Business Report, im stevliesman. Concerns over the impact of a socalled brexit on the u. S. Economy continue to push u. S. Bond yields lower. Yields which Mortgage Rates loosely follow. With rates near lows that lenders are now more focused on credit availability, which has been tight since the financial crisis. The nations largest lender convened a panel of experts to voice concerns and potential solutions in washington today and diana olick was there. Reporter a growing number of americans say they are considering buying a home. In fact, 40 of millennials say they probably or definitely will in the next two years. Thats according to a new survey by wells fargo. The trouble, says the nations largest mortgage lender, that is these potential buyers are misinformed about mortgages. We see three myths. One is that you have to have a 20 down payment, which we know is not true. There are programs which are less down payments. Number two that you have to have perfect or nearperfect credit. And number three that you have to have high income. Reporter wells fargo launched a 3 target loan backed by fannie mae targeting firsttime home buyers. Its designed to be cheaper and simpler than the governmentbacked fha loan. He says in just a few weeks wells has seen Strong Demand and expects more. We think the next few years are going to be a period of high growth for new homeowners coming into the marketplace. Reporter because according to housing experts gathered in washington tuesday, since the recession, lending has been far too tight. If lending were back to the preboom standards of 2001 there would have been 1. 2 million additional loans in 2014. Clarl, 5. 2 million additional loans from 2009 to 2014, with a more reasonable set of credit standards. This is something that we can do something about. Reporter but former fdic chairman sheila behr argued the 3 down wells fargo product is deja vu all over again. You have that really, really low down payment, even from a borrowers perspective, youre exposing yourself to risk if home prices dip. Wells home product may help some but the trend toward easing credit standards appears to be tape early off according to a new report from fannie mae. 90 of lenders surveyed said they were keeping credit standards about the same. For nightly Business Report, diana olick washington. Still ahead, hitting the road. As americans drive more, they may be in for some unexpected sticker shock. The Obama Administration was handed a major victory in its effort to increase oversight of broadband services. A federal Appeals Court ruled that the federal Communications CommissionsNet Neutrality rules will remain in effect. That means phone and Cable Companies must treat all of the traffic on their networks equally. No blocking or slowing their competitors and no fast lanes for companies that can pay more. Opponents of the rules plan to take their challenge to the su Congress Approved a 28 million shift in funding for the transportation security administration. The approval allows tsa to allocate more money to where its needed most like daytoday operations at airports, which includes converting more than 2,700 officers from parttime to fulltim the additional workers will theoretically open up more Airport Security lanes and in theory ease wait times. The computer syste the Democratic National committee were breached. According to reports a group of hackers linked to the russian government are believed to be behind that attack, the same groups that successfully penetrated the Unclassified Networks at the white house and the state department. The hackers gained access to the entire database of the Opposition Research on donald trump. It is one of the largest known breaches of an american political organization. Defense stocks moved higher after the u. S. Senate voted to pass a 602 billion Defense Authorization bill. This despite the president s threat to veto that measure. That sent shares of Defense Companies higher, including lockheed martin, northrop grumman, and boeing. John harwood is following the story from washington. Whats in the defense bill that the Senate Passed today . Reporter most importantly is that 602 billion that you mentioned. But there are also policy provisions that are controversial in some quarters. One would require women to register for the draft if we return to a draft, limiting the long prohibition or limitation on the draft to only men. It would prohibit president obama from closing guantanamo. It would reorganize some aspects bureaucratically at pentagon. It would limit the size of the National SecurityCouncil Staff. Those are some of the reasons the president has threatened to veto the bill. What happens now . What happens now is the house has passed a different version of the bill and the real negotiating is going to start on just what the final shape of this is going to be. Well have to see how hard the white house hangs out with that veto threat and what is their bottom line . Is it about guantanamo . Is it other provisions like the limits on the National SecurityCouncil Staff . All of that over the next few weeks is going to unfold between house and senate negotiators. Speaking of National Security, the president met today with his National Security team and spoke about security threats following the horrific orlando terrorist attacks. What, generally speaking, was his message . Well, this was extraordinary, sue. In addition to giving updates on the fight against isis and the investigation into the orlando terrorist attack over the weekend, president obama fiercely went after Donald Trumps suggestions that muslims be barred temporarily from the United States and suggestions that as a Group Muslims need to be watched more closely. The president called those ideas unamerican, dangerous, counterproductive, they would enhance the recruiting of extremists around the world who would threaten the United States. You rarely see as much passion as you saw today from president obama in going after the ideas being spread by donald trump, whose name he did not mention. Yes, indeed. Very true. John, thank u very much. John harwood in washington tonight. Synchrony financial warns of steeper than expected loan losses sending a shiver through the credit card industry. Thats where we begin market focus. The largest Retail Store Credit Card issuer said it sees higher than expected loan defaults by consumers this year. The company sees chargeoffs or the amount of debt that its not likely to collect higher than originally thought. The news sent shares of synchrony to its biggest oneday loss since going public two years ago. Shares fell 13 to 26. 45. Other credit card issuers like capital one, discover, and American Express all suffered big losses today as well. Citigroup is bullish on vonage. The bank raised its rating on the Digital Phone Service provider to buy from neutral and it raised its price target on the stock to 8 up from 4. 75. Citi analysts cited a favorable risk reward scenario with a Revenue Growth opportunity for the upgrade. That sent shares up more than 12 to 5. 34. Ali bab bab sees a big jump in sales this the year expecting revenue to rise 48 as it anticipates benefiting from recent acquisitions and stock buybacks. Analysts were expecting a 40 increase. Shares rose 3 to 77. 77. And xerox has named a new ceo of its Business Process Outsourcing Division who will take over after that unit is spun off later this year. Murray has been the ceo of i. T. Services provider igate until october. Shares of xerox fell more than 1 to 9. 73. Low gasoline prices and an improving economy are expected to fuel a Record Number of drivers on the road this summer. But they may want to keep the money that they save at the pump to start paying for riding insurance rates. Mary thompson reports. Reporter u. S. Drivers seen hitting the roads in Record Numbers this year. That means theyll be hitting their brakes and each other too. People are driving more miles and theyre getting into more accidents. Reporter more accidents mean more claims and that means insurers need to pass on the costs through higher rates. Data from the Insurance Information institute shows spending on Auto Insurance is up 18. 5 from 2009 to 2015. And if youre expecting a break this year, dont. Aprils Consumer Price index shows spending on Auto Insurance roseanne unadjusted and hefty 6 . A downside, says the insurance institutes james lynch, to an improving economy. When people lost their jobs in the great recession, obviously they stopped driving, their cars sat in the garage where they werent exposed to accidents. And so there werent as many accidents. Reporter other contributors to these higher rates are bad roads which damage cars, a higher number of which are new and more expensive to repair. The cost of treating anyone hurt in an accident on the rise as well. As for insurers, some are raising rates more than others. The increase reflecting the number and dollar amount of claims filed by clients. Allstate push including a bigger rate hike following an unusual uptick in loss trends last year. Historically their loss trend has been 2 to 3 . Last year it was over 9 . Reporter citi analyst says higher rates should benefit allstate in the long run. The rival progressive is being seen being hurt for foregoing larger than average rate hikes in hopes of attracting more clients. Their business is skewing toward low profitability new business. So the reason for the sell there is i think margins will be pressured in the near term. Reporter rate hikes driving profitability for some while keeping the brakes on higher prices helping other insurers bring more clients along for t. For nightly Business Report, im mary thompson. Coming up, the fastgrowing gaming industry is undergoing a massive shift and theres more competition than heres a look at what to watch for tomorrow. As we reported, fed chair janet yellen holds a News Conference after releasing the Central Banks statement on Interest Rates. Well get a fresh read on inflation when the government releases its Producer Price index for may and Weekly Mortgage applications are due out. Thats what to watch for on wedn the video Game Industry is at a turning point. Mobile gaming is more popular than ever and Virtual Reality is starting to go mainstream. Nowhere is that more evident than at the annual video game trade show in los angeles. And thats right where we find julia boorstin. Reporter the video Game Industry is in the midst of massive change. Virtual reality and competitive gaming or esports is on the rise. As this year mobile gaming revenue is poised to overtake pc gaming for the first time. And new consoles are in the spotlight. Microsoft announcing a slimmeddown console, the xbox 1f. A nextgeneration 4k console, project scorpio, which will support vr and launch in 2017. We feel great about this console generation. Its moving faster than the previous generation. We feel great about console gaming. I think hats off to sony and their progress. Were thrilled with our progress. Xbox is selling more units than ever before. Reporter xbox is also facing more competition than ever from sony whose playstation consistently takes the lead in console sales. Sony unveiling longawaited details for playstation vr. It will cost 399 and will launch in october with 50 Virtual Reality games available by the end of the year. While consolemakers compete for customers by showcasing exclusive video game content, this year the video gamemakers have pulled out of e3 with no presence on the Convention Center floor. Instead tavis and Electronic Arts are investing in direct digital relationship with consumers with the likes of video game competitions, otherwise known as esports. Electronic arts announcing its putting 1 million in prize money toward anesports for everyone initiative. Three different tournament levels from professionals down to communities organizing their own faceoffs. Were not focusing just on the elite levels of esports but competitive gaming overall for the entire community. I think well see engagement and increased profitability overall, almost immediately. Reporter the more esports events like these connect players to gamemakers, the more they can sell digital addons and content. The more the lines of ea and tavis can make sure theyre in demand, no matter which consoles gamers buy. The nations largest banks collected more Overdraft Fees from customers in the First Quarter than they did a year ago. The Washington Post citing new government data, reports that wells fargo saw the biggest jump up 16 . Bank of america and jpmorgan, the countrys largest bank, saw a 6 increase. The total amount collected by more than 600 banks during the first three months of the year rose to more than 2. 5 billion. Microsofts 26 billion purchase of linkedin which we told you about yesterday has created a multibillion dollar payday for linkedins chairman reid hoffman. Given hoffmans Stock Ownership his take from the allcash deal could be nearly 3 billion. But with that windfall comes a big tax bill. Hoffman would presumably be subject to both california and federal taxes. California taxes Capital Gains at a rate of 13. 3 . Combine that with a federal Capital Gains tax rate of 23. 8 and its tax bill could be mor than 1 billion. Its unclear which if any measures hoffman will take to reduce the amount he may owe. In the wake of the terror attack in Orlando Disney is donated 1 million to assist those affected by the shooting. Donations will be matched dollar for dollar. Speaking of donations, americans were more charitable last year than ever before. And it wasnt just the wealthy that donated. Robert frank takes a look at america the charit. Reporter americans opened up their wallets for charity last year, setting an alltime record for giving. Charitable giving hit 373 billion in 2015, according to the giving usa report, up 4 from the year ago. So where did all that money come prese from . Individus gav the most, 265 billion, the rest coming from foundations, estates and companies. And believe it or not, much of the giving in america is still in the form of 10 or 20 gifts from everyday americans. Americans are incredibly generous. They care deeply about those causes that they want to support. And they want to make a difference with their giving, whether its locally, nationally, or internationally with their giving. Reporter wheres all that money going . Religious groups dominate accounting for about onethird of the total. Education ranks second. Followed by Human Services which includes donations of food, clothing and shelter for the poor. Giving to the environment and the arts also saw strong growth. But the fastest growth in giving is still in International Affairs which includes overseas disaster relief, human rights, and medicine. The flow of dollars shows that todays donors see their Charitable Giving more as investments in solving social problems rather than just handouts. Theres an opportunity for them as they think about their giving, theyre really to some degree investing in impact. They want to make sure that their gifts are making a difference. Reporter americans arent just donating cash. With prices for fine art and other collectibles soaring in recent years, gifts of artwork and other socalled appreciated assets also saw strong growth. For nightly Business Report, im robert frank. And that is nightly Business Report for tonight. Im sue herera. Thanks for watching. Have a great evening, everybody. Well see you right back here tomorrow. Is brought to you by. For those who cook with heart and soul, we present a kitchen made with passion. Introducing the completely reimagined suite of appliances from kitchenaid. You can see more at kitchenaid. Com. Oxo good grips thoughtfully yours. 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