Above 17,000 for a second day and the s p did remain a day or twos rally from the 2,000 mark, this summer day on wall street was one for reflection and maybe taking chips off the board t. Dow lost 34 points to finish at 17,024 t. Nasdaq was down 34, its biggest oneday drop in a month and the s p 500 slid 7 or about. 4 of a percent. Some consider whether the average is too high and tthe da modest decline can be what bearish market watchers are expecting. They expregs pressed discomfort with current sky high stock, rather. These very strong stockmarket prices are in a sense a victim of the weak economy, not a sense we are about to have a strong recovery to our real economy. He pointed to the nations growing income inequality as another reason for a weak economic recovery. Byron weeks sees things differently. He says all the commission around the world are doing well. Thats why he is very bullish on stocks right now. He is chairman. Its so nice to have you on the program again, its been a while sense we talked to you. So, you know, so many people came back to work today with second thoughts ability investing in stocks. But you are very bullish. You also say stocks are very cheap right now. Tell us your thinking. Well, i dont think i said theyre cheap. I said theyre fairly valued and can go higher. The market is a selling at a reasonable multiple. A little above the longterm median and earnings estimates are 115 of the s p 500, which is the index i watch. They i think earnings co go to 20 times the multiple can go to 20. That would put the market at 2,300. So i think we could reach that sometime this year early next year. The first half has been pleasant, not blockbuster. You think the second half will be better . I do. The first half wasnt bad. For all, for a negative 23. 9 First Quarter to have the first half up 37 on the s p 3500. I think we can do better than that. That would be 15 percent on the year. That would be terrific after 16 year and a 29 year. So, byron, i found that your asset allocations very intrigueing. You said that 45 . We will go through this quickly. 45 of long equities in the u. S. And fawn u. S. , 30 in alternatives like hedge funds, private equities, things like that. You have some ifled go, some if agriculture commodities. No treasury, no traditional corporate bonds, which you are in very high yield debt. Tell us quickly what you are thinking. I think the equity market is reasonably priced and can go higher. I think the band market is overpriced, especially quality bonds and treasuries. So i think yields are probably going to rise there. And that would cause a loss in whatever assets you have in quality fixed income and i think that valuations arise for equities. I think you can make money in equities and lose money in bonds and thats why i have a virtually all equity portfolio. You are a fearless predictor, most of the time seven or ache of ten predictions come true. What would cause you now to change your rather rosey view of the stockmarket . Okay. Well, first of all, tyler, you give me more credit than i deserve. Theres usually five or six of them that work out. They are surprises, not predictions. They are events i think that have a probability of happening but theyre not a sure thing. I think what wouldnsettle me is if the geopolitical framework we are operating in really heated up. I think iraq is going to be divided into three parts. I think iran is going to move away from its Nuclear DevelopmentWeapons Development program. I dont think china is going to go to war in the south china sea. I think putin is going to be patient in ukraine and so, you know, thats a pretty thing when viewed of the four major geopolitical events take place around the world. If i were dead wrong about that and one of them interrupted into a major conflagration, then id have to think about my view. Its very reassuring to hear those global hot spots, are you not so worried about them. What about them here in the u. S. . A lot of people are skeptical about the u. S. Economy, we get good data, bad data, disappointing data, what is your view on the economy here . I this i the economy is doing well. You know, almost every parameterer alook at i listen to the comments, you know, your bank roll is up. You have over 2 twl worth of deals announced. Both of those indicate Business Confidence the purchasing manager indexs are headed higher, Consumer Confidence is improving, vehicle sales are strong. I think Capital Expenditures are going to improve. So i think a whole panoply of Economic Indicators that suggest to me that were going to be headed towards a 3 growth. I dont think thats what were going to have. I do agree with joe that the inequality problem is a problem, is serious. I also think that median Family Income hasnt risen, but i thil think the u. S. Economy is going to do much better in the second half hasnt in the first. Well, fascinating insights. Thank you so much, byron, always a pleasure to have you with us. Thank you for having me. Byron dean, with blockstone partners. Where can you find value with the market near record highs . Heres what we found. Reporter hunting for discounts in the stockmarket for many investors comes down to one important measure. Pricetoearnings for p. E. Ratio. Simply put, it tells you how much you pay in stock price for every dollar of earnings that a company jen rates. Some sectors are getting more attention and value plays if you look at pricetoearnings ratio. First of all, you look at the financial sectors of the market. Thats probably got the lowest pricings earnings multiple. Quite frankly, if earnings turn out to be as good as analysts are expecting, thats probably the cheapest. They are a big part of the s p 3500. But is p. E. The best way to value a stock . In simple terms, is there a better way if no, the p. Ism multiple is the best way. You always have to factor if growth. Reporter among the top picks are Gulf Port Energy and bank corps south. So you cant just look at a pricetoearnings ratio and mable i make any kind of a judgment. You have to put that number no context to see if investors are willing to pay higher prices for stocks. Clearly, if the prospects for the growth rate of earnings for a company are very, very bright, it justifies a high price earnings multiple. When prospects for earnings are not particularly priced the multiple is very low. Earnings season kicks off this week and corporate profits and growth rates will be a huge focus for investors. That could help determine whether the market goes higher from here or takes a bit of a pause. For nightly business report, im domenic chu. Some economists are debating whether job growth or Economic Growth is a more important number to keep an eye on. Steve least liesman explains. 1. 23 million americans found jobs in 2014 one of the best six month period since the recession ended. What has economists scratching their heads is the economy didnt grow at all. We know shrank in the First Quarter. Net growth zero. How could so many jobs be created if there was no growth . The Severe Weather remains a prime suspect. Under this theory of the case, even though business was hurt by the heavy snows and cold weather, employers were confident enough in future business to add new staff. Another suspect, weak global economy. In the First Quarter, a decline in exports was responsible for half of the economys extraction. Some could have been weatherrelated too. Several economists on wall street with the upbeat jobs number is the more believable witness for the economy. They point to americans buying nearly 17 million cars if june. The most since twoikts. Manufacturing and services have been strong and the Housing Market show clear signs of a bounce back, all evidence in favor of the jobs report. In fact, the strong jobs have some thinking it can hike southeastern than the current consensus, which is next year. The jobs or the growth data could be revised in the future, that might whittle away the gap or the mystery remains unsolved, which wont trouble anyone too much as long as the case is decided in favor of strong job growth and not the shrinking economy. For nightly business report, im steve liesman. Goldman sacks has revised within they think Interest Rates will rise. They expect the feds to make the third fed hike in the Third Quarter of 2016, fully six months sooner than his earlier forecast for the First Quarter of 2016. The reason for the change . The recent good news in the job market as steve talked about as well as improving inflation or financial conditions. Not everyone is a big fan of e federal reserve. Now some law makers are looking to reform the central bank, which is celebrating its 1300 year anniversary. The republican run House Financial Services committee will hold a hearing this thursday on reforming the fed. But did not disclose any specific legislation on the agenda. And things may be getting a little tougher for banks. Regulators from the Swiss Banking supervisors are considering new measures to make it harder for lenders to understate the rickness of their assets, including government bonds and may require them to increase the capital on hand by billions more dollars. Still ahead, target beat funds, theyre very popular, low maintenance and easy to understand. But well tell you about some hidden risks that retirement savers, you need to know. Thats next. There is nothing hindering the sale of Recreational Marijuana in the state of washington. State regulators issued 24 licenses to retail shops throughout the statement today, allowing them to begin legally selling pot for the First Time Ever on tuesday morning. From high times in Washington State to hard times in new jersey, where an oversaturation of casinos in Atlantic City and surrounding states has led to a dire outlook for the resort town. Morgan brennan halls more. Reporter once the east coast schemeing mecca, Atlantic City has fallen on hard times. Its a scene of a lot of changes. I have seen a lot less people come down here. Reporter by the end of summer, the seaside city could have 25 fewer casinos than it started the year with. As the showboat gets ready to close next month and the rebel heads to auction, in bankruptcy for the second time in two years. Five years ago that monopoly ended. We didnt act quick enough to realize we needed to invent ourselves. There 23450edz to be a transition period and having a lot more venue itself and activities to give people reason to come to Atlantic City. Reporter Atlantic Citys main source ofincome, gaming revenue, has tumbled 45 since 2006 as states that once provided Atlantic Citys gambleers now compete for them. Pennsylvania now claims the most casinos in the region and new projects are slated or opening in others like new york and maryland. Experts say this is a part of a larger industry trend, casino saturation. In 1988, only two u. S. States actually allowed gambling. Today 39, local governments seek out new sources of ref few. Thats created a glut of casinos, especially in traditional gauge communities where impacts have weighed on state coiffeurs. They say casino close years in Atlantic City may not be a bad thing. Its a legacy market that has too much supply relative to demand. Some of the other markets that are newer are still ramping up and there is at least some for sight as to not oversupplying the market. So i think the brunt of the closures will be felt in Atlantic City. As Atlantic City struggles to reinvent itself, some businesses are already thriving. Like the borgato hotel casino. Revenues here have been increasing this year, despite the overall industrys decline. As more competitors close, casinos like this only stand to gain. For nightly business report, im Morgan Brennan in Atlantic City, new jersey. Archer daniels midland announces its biggest acquisition ever. The green giant is paying for wire flavors the swiss food investor. They will protect itself from vol time crop prices and to benefit from the consumer appetite for natural foods. The deal needs the okay from regulators. It is expected to close by the end of the year. Shares rose 1. 35 . Expedia is buying an Online Travel company. Its a largest travel agencies in australia. It will help expedia expand its presence in the asiapacific region. Despite that, though, expedia shares lost more than 1. 35 from 80 to 85. Shares have a lift after good fuse about a treatment a. New drug to treat severe pain performed well in late stage trials, taking it one step closer to market approval. So that resulted in another 10 million milestone pavement from Endo International which has a Licensing Agreement for developing that drug. Shares popped almost 39 to 13 and change. Apple has nabbed the Vice President of sales for the luxury watch brand tag hoyer. This comes as many expect the tech company to launch an iwatch, Wearable Technology device this fall. Shares higher by 23 to 95. 97 for apple. A Train Derailment in montana damaged boeing aircraft components, specifically fuselage. Beaus production depends on a complex supply chain that delivers many parts just in time for assembly. It hasnt been determined if the incident will impact plane production from falling. Shares were up slightly to 13. 309. Not that its good news for united. Continental, american, delta, they were down today continuing a selloff from last week. The Transportation Security Administration announced new security measures that would Impact International flights coming into the united states. The new procedures include the requirement that some passengers power on their Electronic Devices before they board the plane to prove that they arent exposed to devices. Shares of delta were off almost 34. 5 cents. American airlines dropped. 40. 130 was the close there. You nieltd down 3 . It looks like Cloud Storage startup of box inc. Is waiting for the time for its initial public stock offering. It announced putting off the ipo when investors lost interest. Now they have raised 150 million in funding that was to help from a private equity firm and a hedge fund. They expect to go public, not until after the summer when trading usually picks up. Target date funds have become all the rage for retirement savers. They like mutual funds. They make investments that get more conservative as they get closer to the socalled target day of an investors retirement. Still there are risks of having your money in a target date fund. Here to talk about it, we talk about target datebook. Hes a personal finance director. Tim, its good to have you back. My concern is target date funds are two things. Theyre very different. Some are more conservatively run than others. The other is i think there is an implicit promise in there. When that fund says i am a target 2030 fuvenltd you want to retire, your money will be here. Thats not true, is it . There is no question that is one of the biggest problems. There certainly is an implicit promise of sorts that seems to imply that that money will be there and as much money as you hope will be there, when you need it, tyler, we saw this in 2008 when across the board funds of all varieties suffered significant losses, especially in the equity side, even on the fixed income side. That was the first glimpse that we got into how target date funds can fail investors. This is the type of investments that appears to be extremely simplistic but there are complexities to it that are important to understand. You said that there are some other risks, three in particular. Lets go down the list for our viewers sake. The first is about the performance and kind of a secure hardtoknow since these are fundtofunds, exactly how well they perform. Talk to us about. Sure. A talk date fund picture it as a wrapper around a basket of mutual funds that has a prescribed allocation. So its really a good deal of complexity that is under the cover of the target date fund and if you havent had the opportunity to rip that cover off and see whats inside, you might not know exactly what you are dealing with. Some Fund Families that have target date funds are offered target date fun funds, for example, might be good large cap managers. They might suffer in the large cap the international to fixed income space. You might not know exactly how each slice of that pie is performing. What about the fees in these funds, tim, that something i need to be concerned about when i buy fundtofund, am i not only paying for the underlying fees the constituents of it or what . Im concerned about it, tyler, especially considering that fees, expenses and costs are one of the few factors we can control in dealing with market dynamics. It is true that many target date fund have above average expense ratios and it makes perfect sense. Again, because theyre fundtofunds, there are different layers of expense ratios on top of one another that key factor is very important. So both of these first two risks that we have discussed can be reduced pretty substantially if you are working with a more passively oriented target date fund setup. For example, vanguard is obviously the most notable monster in the rings here. They do focus on having extremely low expense ratios and a more predictable index space strategy. So both of these risks, these first two we have discussed can be reviewed. The third one, you say people should by a ware of is the investment risk. Some of these funds are a little more volatile and if you dont have the appetite for that, you might not know about that. What are the things to watch for there . I think this is the biggest risk of the three. We are talking about individual risk tolerance here a. Target date fund presumes the only factor that makes any difference in someones tolerance for risk is the time horizon. Of course, we know there is a lot more than that. Tyler alluded to it in the intro. I personally think an investors willingness to accept risks is the number one factor not taken into account. Its very possible that target date set in the future might actually create a prescription or a pumped of funds that is either too aggressive or too conservative based on the individuals unique characteristics. Tim, always great to see you, you relocated from baltimore to south carolina. Charleston, kout carolina. Coming up, box office bust. Why fewer people are going to the movies . Could it have anything to do with the movies . And what could turn a financial horror show in the right way to hype . The worlds sending largest economy keeps getting stronger. Economic growth picks up in the just completed Second Quarter to around 7. 35 according to chinas premier. He also said the economy still faces downward pressure so beijing plans on increasing stimulus measures to boost growth. Now to drones the faa is working on new rulings to govern their commercial use. Right now, its technically ill local to use drones for commercial purposes, but the small remote controlled aircraft are being used more frequently now by real estate agents, filmmakers, journalists. The faa is looking to ease regulation. Tyler, you didnt need odrone to see people are lined up outside a theater for the completed 4th of july weekend some what happened around what are people do figure theyre not going to the movies . Reporter while summer sizzles, the july 4th box office fizzled. Down 44 from a year ago weekend. With no megahits on last year os block busters and the fact the fireworks landed on a friday didnt help. Transformers age of extinction topped the box office for the second consecutive week. The doctor 36 million growth declined substantially from the prior weekend. The movies in the marketplace have to be profounding compelling to get people to move away from their on demand the internet, all the Different Services that allow people and potential moviegoers to get filmed entertainment on their devices at home and other places. So the bar has been raised incredibly high. This summers box office is down almost 20 compared to last year and total u. S. Box office this year is down nearly 4 . Hollywood is struggling to get audiences to drive to theaters and pay higher ticket prices with the world cup on tv and limitless content Available Online and on demand. Fact the average adult spends record time on entertainment other than going to the movies. Over five hours watching live tv around three hours listening to the radio according to nielsen. I am seeing more moifls on demand, less movies in the theater. I have netflix and amazon prime. That pretty much covers everything. I spend 75 each time i go to the movies. Its ridiculous. There is hope for this weekends dawn of the planet of the apes and marvels the galaxy oversea, hollywood is on fire. The International Backs office is the savior. No matter what films do in north america. If you look at the bottom line for a film like edge of tomorrow, request itself the tom cruise movie, it didnt open that big if americaf overseas, it was a massive hit. This is a global marketplace. So far, transformers 34 grossed 35 million more in china than in the u. S. Any good movies lately . I saw the chef over the weekend. I still like going to movies. Its grit to have you. Its nice to be back, two weeks of vacation in italy. It was beautiful. It looks like from your tan, too, are you relaxed. At least for now. Welcome back. We missed you. Thats the nightly business report. Im Tyler Mathieson back from vacation. Have a great evening. See you tomorrow, if i come back. 03 this is bbc world news america. Funding of this presentation is made possible by the freeman foundation, newmans own foundation, giving all profits to charity and pursuing the common good for over 30 years, kovler foundation, charles schwab, and union bank. Years, we believe a commercial bank owes its clients strength, stability, security. So we believe in keeping lending standards high. Capital ratios high. Credit ratings high. Companies expected it then, Companies Expect it now. , its just good business. Union bank