What a fist half it was. Well 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 cant say with xacertaintyly what will transpire during President Trump and president xis 90minute meeting, but a Senior Administration off tells me the working assumption is that it will result in an agreement to deescalateon 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 theres still an opportunity according to the negotiator. I think president rump needs show in front of those hard liners to president xi tt this isnt 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 hadnt 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 meetings 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 wideranging press conference. For nightly Business Report im 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 theyre 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 theyre 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 lets 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 theyre 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 president s 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 president s 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 apples 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 dont seem worried they will go under any time soon. Thats 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, im 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, theyre still above 11 Million Barrels aay, likel frustrating opec who was hoping last years 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 alreadyover supplied finally, oil has been held down by growing fears of an economict slowdown aroun world. If the worlds Major Economies demand for oil will fall leaving more excess barrels on the market. For nightly Business Report, im brian sullivan. Time to take a look at some of tods 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 companys 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 stocks 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 thats one of the takeaways from this weeks first debate. A few candidates said that they would abolish private health ca coverage in favor of a governmentrun 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 president ial debates helped some candidatesike elizabeth warren, Julian Castro and Kamala Harris and hurtor ve esidt bi ee ik the de lmocratic frontrunner, 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 longfavored 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 copays, 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 elses. 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 theres talk of fed rate cuts. What do you tnk the baits will do at this point . I think were 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 havent 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 im a yield investor. I think he i want capital appreciation, so im going to focus on jp morgan, Morgan Stanley and goldman sachs. I think theres 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 dont think it is going away even thoughields are coming down. I think they will experience imargin pressure and they dont 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 tonights 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. Were very excited about the longterm 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 fulltime positioly glob at that company. Wall street journal says that the layoffs 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 were going to continue to focus on growth, but not growth at any cost. Were 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 years 42 increase. So in the past five years theyve annualized that Dividend Increase at 15 , so you have doubled your income in years. Not only are you getting a better than bondlike 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 hasnt 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 dont think thats indicative of a riskier situation. Usually you have to have stocks yielding north of 6 , 7 , 8 that