Transcript: Nightly Business Report – June 9, 2016

NBR-ThumANNOUNCER:  This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and Sue
Herera.

TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR:  Out on a limb.  Well-known
investors are making big calls on the market.  But should investors frustrated with lackluster returns                                                                         follow their lead?

SUE HERERA, NIGHTLY BUSINESS REPORT ANCHOR:  A sea change.  How the Panama
Canal plans to transform the global economy once again.

MATHISEN:  Sky high.  Why it`s getting a lot harder to not just buy a house
but also to rent one.

All that and more tonight on NIGHTLY BUSINESS REPORT for Thursday, June
9th.

HERERA:  Good evening, everyone, and welcome.

Bold market calls.  Hedge fund billionaire George Soros is worried about
the global economy.  So much so he decided to do something about it.  After
a long hiatus, he`s trading again.  This time he sold stocks on the
assumption they`ll go down because of a slowdown in China and issues in
Europe.  And he bought gold — an asset that`s viewed as a safe haven
during times of economic turmoil.

Another billionaire investor, Carl Icahn in an interview today said he
agrees with Soros.

(BEGIN VIDEO CLIP)

CARL ICAHN, BILLIONAIRE INVESTOR:  I can`t help but think he has a couple
of real good points.  You know, I think there`s — you know, I`ve been
saying it.  I think that you have a — sort of a false market buoyed by
zero interest rates and you have to be cognizant of it.

(END VIDEO CLIP)

HERERA:  Not everyone agrees.  One market strategist is calling for stocks
to go higher, as much as 20 percent higher in the next six to 12 months.

Canaccord Genuity`s Tony Dwyer believes that a U.S. recession is years
away.  He sees a rebound in economy because of rising oil prices and
expects corporate earnings to grow.

MATHISEN:  So, how do bold market calls in a stock market that is
essentially flat over the last year impact investor psychology and
investors` investment decisions?

Joining us to discuss is Frank Murtha.  He`s a doctor of psychology and
cofounder of marketpsych.com.

You know, there are a lot of cross currents always in the market.  You`ve
got billionaires.  You can easily dismiss them as a couple of old cranky
billionaires or you can say, hey, they know what they`re talking about.
And you obviously have this tension.

So, how is an invest tore make sense of calls that are really at polar
opposites?

FRANK MURTHA, PH.D., MARKETPSYCH.COM CO-FOUNDER:  Well, I think it helps to
recognize that this agreement isn`t just normal in the market, it`s
essential for a market.  For every buyer who wants to let go of a position,
there needs to be — pardon me, seller who wants to let go of a position,
there needs to be a buyer who sees it from the opposite side.  So,
disagreement is healthy and disagreement is fine.  In a way, we`re talking
about peer pressure, and some members of our investing peer group have more
influence than on the records.  You just named a couple of them.

HERERA:  Very true.  Very true.

MURTHA:  And I think the way that investors overcome peer pressure is the
way teenagers overcome peer pressure.  You develop a stronger sense of who
you are what your values, what your goals are, what you`re good at, what
you`re not good at, and it gives you the confidence to proceed and not
worry to much about what other people say.

HERERA:  It sounds like what you`re saying is kind of the tried and true,
have a plan, stick with the plan and don`t let emotions influence?

MURTHA:  Easier said that done —

HERERA:  Absolutely.

MURTHA:  Certainly, but yes.  To that end, something that people can do
when they find themselves ambivalent and being pulled in more than one
direction, is to help achieve a sense of emotional balance and get out of
the trap of thinking in a binary mode — market good, market bad.  I have
to be in, or I have to be out.

Make what we call a stabilizing trade.  A smaller trade.  The purpose of
which is not financial gain or anything like that.  It`s really to help
reset your psychology, smooth out the waves, and make for an easier ride.

MATHISEN:  You know, I can well imagine that investors from time to time,
individuals I`m thinking of, can get impatient.  You know, the market is
flat.  I haven`t been making money the last year.  Or, if I`m in bonds, I
can`t make money in my CDs or my fixed-income securities, so I`ve got to do
something else.

Is that dangerous?

MURTHA:  Well, unfortunately, it`s natural.  And it can be dangerous,
certainly.  You know, we like to think we`re investing for financial
reasons.  Financial means.  But we have these emotional needs and they need
to be met.  We see other people having gains or we feel like we`re not
making the progress we need to be making.

It creates emotional need to do something about it.

MATHISEN:  Sometimes the best thing is to do nothing.

MURTHA:  Oh, absolutely.

MATHISEN:  Don`t just do something, stand there.

MURTHA:  You`re exactly right.  I think that certainly when investors feel
this pull, they get a little bit restless, they may be tempted to make more
emotionally impulsive, poorly thought out moves.

MATHISEN:  Guard against that up pulse?

MURTHA:  Absolutely.  One of the ways is help mitigate that, to do
something small and saves are a bigger problem down the road.

MATHISEN:  Frank, thank you very much.

MURTHA:  You bet.

MATHISEN:  Dr. Frank Murtha with marketpsych.com, we appreciate it.

MURTHA:  My pleasure.

HERERA:  Well, on Wall Street today, the Dow and S&P 500 snapped their
three-day win streak, as oil prices pulled back from an 11-month high and
the bond yields fell.  The Dow Jones Industrial Average finished the day
down 19 point to 17,985.  The NASDAQ fell 16.  And the S&P 500 was off
three.

MATHISEN:  One of the reasons why George Soros is negative on the market is
because of the possible exit by the U.K. from the European Union.  The vote
is just two weeks away and Wilfred Frost tells us what`s at stake if the
country votes to leave.

(BEGIN VIDEOTAPE)

WILFRED FROST, NIGHTLY BUSINESS REPORT CORRESPONDENT:  The first thing to
know is nothing actually happens on the 24th of June.  The referendum is
not a binding law, it would just signal the wish of the British people and
spark negotiations to begin, setting the terms for separations.

If the U.K. government invokes Article 50 of the Lisbon Treaty, then a two-
year period begins before they leave.  But it`s possible they`ll begin
negotiations in a more relaxed and amicable fashion without that two-year
restriction.

Now, here are the main issues that the divorce lawyers will be arguing
over: Free movement of people.  Will Britain be able to stem the flow of
immigrants whilst minimizing rights it loses for its own citizens on the
European continent?

Second up, free trade.  Will Britain get to maintain the status quo it
enjoys at the moment of free trade, or will E.U. punish them for leaving?

And, finally, will U.K. be able to continue to passport financial services,
which allows E.U. members to offer financial services in the other E.U.
countries based on domestic regulation?  Switzerland manages that at the
moment.  But will the likes of Frankfurt and Paris be hungry to steal
market share and block it for the U.K. moving forward?

So, whilst the 24th of June would see no immediate legal action, the
intermittent period of uncertainty could be very damaging.

Now, one final thing to watch, would Prime Minister David Cameron have to
resign?  He maintains at the moment he wouldn`t, but there would be huge
pressure on him to do so in the event of an exit vote.  This could lead to
other candidates stepping forward.  It would likely delay Brexit
negotiations until a new government is formed.

Lots at stake just two weeks to go.

For NIGHTLY BUSINESS REPORT, I`m Wilfred Frost.

(END VIDEOTAPE)

HERERA:  In Washington, President Obama endorsed Hillary Clinton for
president saying, “I`m with her.”  Just before making the announcement, the
president met with Senator Bernie Sanders at the White House who said he
was not dropping out of the race but would work with Clinton to beat Donald
Trump.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (I-VT), DEMOCRATIC PRESIDENTIAL CANDIDATE:  I am going
to do everything in my power, and I will work as hard as I can, to make
sure that Donald Trump does not become president of the United States.

(END VIDEO CLIP)

HERERA:  John Harwood joins us now from the White House.

John, It wasn`t necessarily a surprise that the president formally endorsed
Ms. Clinton but what conclusions can we draw from the statement that Bernie
Sanders made right outside the White House after meeting with the
president?

JOHN HARWOOD, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Well, Sue, the only
surprise was the choreography.  We knew that President Obama had talked to
Bernie Sanders on Sunday.  Now, we know that he informed Bernie Sanders
that he was going to endorse Hillary Clinton.  Bernie Sanders asked him to
wait until they had a meeting today, which he did.

The video of President Obama endorsing Hillary Clinton was made on Tuesday.
So this was all planned.

Now, in terms of Bernie Sanders` statement, it was as much as Hillary
Clinton could have hoped for and you could see it in the clip that you just
played.  It was the fact that he said he was going to devote all his
energies to defeating Donald Trump, didn`t criticize her at all.  It`s a
little early for him to come out and just say, I`m getting out of the race.
That`s going to be a process.  But I wouldn`t expect that process to take
too much longer.

MATHISEN:  Speaking of Donald Trump, the great tweeter was in New York
today trying to fire up his fund-raising operation.  How`s that going,
John?

HARWOOD:  Well, not so great.

Here`s the challenge: when you`re Donald Trump and you have largely self-
financed your campaign which you ran very cheaply because of your power on
social media and broadcast media, you then have to, if you haven`t had a
lifetime in politics, and the whole financial apparatus, you`ve got to
create one quickly.

Hillary Clinton`s been creating one for a very long time.  She has the
capacity instantly to turn to general election fund-raising.  He`s got to
develop that capacity.  He`s said he would raise $1 billion for the
campaign, but it`s not clear he`s going to be able to achieve that.  One of
his aides said today, well, we may not need that much.

We`ll see.

HERERA:  John Harwood at the White House — thank you, John.

MATHISEN:  And still ahead, 100 years ago, the Panama Canal changed the
global economy.  Now it`s changing things again.

(BEGIN VIDEO CLIP)

MARY THOMPSON, NIGHTLY BUSINESS REPORT CORRESPONDENT:  I`m Mary Thompson at
the Panama Canal where we tell you about the dawn of a new day in global
shipping.  That`s coming up on NIGHLTLY BUSINESS REPORT.

(END VIDEO CLIP)

(MUSIC)

HERERA:  In Panama, a new era in global shipping launched today.  A third
lane nine years in the making and able to handle some of the biggest cargo
ships in the world passed a critical test ahead of its official opening at
the end of the month.

As Mary Thompson explains, it could reshape trade and the world economy.

(BEGIN VIDEOTAPE)

MARY THOMPSON, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Under a blistering
sun, workers gathered along the banks of the Panama Canal`s new lane,
costing $5.25 billion, it faced a crucial test — the passage of the first
ship through its Atlantic locks.

UNIDENTIFIED MALE:  It defines a moment.

THOMPSON:  The moment Thursday a success according to Giuseppe Quarta, CEO
of the project.

GIUSEPPE QUARTA, SALINI IMPREGILO:  Today has been extremely smooth.
Exceptionally smooth.  The gates operated very well.  So, all the
parameters have worked exceptionally well.

THOMPSON:  The test making way for the lane`s official opening at the end
of June and a new era in global shipping.

ILYA DE MAROTTA, PANAMA CANAL EXPANSION PROGRAM:  It means a shorter route.
It means a reduction of CO2 emissions.  So that`s good for the world.  It
means better prices for the people that are shipping merchandise because
they`re going to get economies of scale.

THOMPSON:  A third larger than the canal`s old lanes, bigger ships that
carry over 45 percent of the world`s cargo can now access this 50-mile
shortcut between the Atlantic and Pacific Oceans for the first time ever.
Here`s the canal`s Ilya de Marotta.

MAROTTA:  The bigger vessel that can come through the existing locks can
carry between 4,400 to 5,000 containers.  In the new locks, we`ll be able
to put ships that carry up to 14,000 containers.

THOMPSON:  Boston Consulting Group estimates this could cut the cost of
shipping goods from Asia to the East Coast by 30 percent, as long as the
ports and railroads are ready.

And they`re spending billions to get there.  Before this lane, most big
ships went to the West Coast because they couldn`t sail through the canal.
Now, East Coast ports are dredging, updating, and expanding their
facilities to accommodate the big ships and move cargo railroads will take
as far west as Detroit.

One hundred and two years old, the canal considered a wonder of the modern
world.  It`s new addition with gates ten stories high and lanes that cut
crossing time by two hours, a major feat as well.

QUARTA:  This is obviously the result of 110 million man hours of work, and
almost six years, 30,000 people have worked on this project.

THOMPSON:  The project for the ages ushering in a new age of shipping.

At the Panama Canal, I`m Mary Thompson for NIGHTLY BUSINESS REPORT.

(END VIDEOTAPE)

MATHISEN:  Coffee gave sales a jolt at JM Smuckers, and that`s where we
begin tonight`s “Market Focus.”

Demand for the company`s Folger`s and Dunkin` Donuts branded coffee, as
well as pet food profits, helped lift profit and revenue higher.  Nothing,
of course, beats dunking your milk bone in a cup of Joe.

Smuckers also gave a full year outlook well above expectations.  Shares up
just about 8 percent to $143.23.

European Union has given the green light to the proposed merger between
U.S. food distributor Sysco (NYSE:SYY) and its European counterpart Breaks
Group, saying the acquisition does not raise competition concerns.  The
more than $3 billion deal expected to be completed come July.  Sysco
(NYSE:SYY) shares up a fraction to $49 even.

HERERA:  Vail Resorts (NYSE:MTN) reported better than expected profits in
the latest quarter, thanks in part to a rise in sales for season passes.
The ski resort operator also saw revenue climb, although those results were
a bit shy of targets.  The company also raises yearly guidance.  Shares of
Vail Resorts (NYSE:MTN) rose nearly 3 percent to $139.20.

The National Highway Traffic Safety Administration will be looking into
reports of potential suspension problems found in Tesla`s Model S.  The
agency`s review will determine whether a recall might be necessary.  Tesla
also announced it was yet again making a lower-cost version of its Model S
vehicle.  Shares of Tesla down more than 2 percent to $229.34.

A regulatory filing showed same-store sales at Urban Outfitters
(NASDAQ:URBN) current quarter are falling in the mid-single digits.  Shares
of the clothing retailer plunged after hours following the news on top of
the 1 percent plus loss during the regular season.  They close at $27.93.

MATHISEN:  Mortgage rates fell for the first time in four weeks.  The drop
followed a surprisingly weak employment report last week that increased
concerns about the health of the economy.  Freddie Mac says the average 30-
year fixed rate mortgage fell to 3.6 percent from 3.66 the week prior.

HERERA:  Well, mortgage rates may be near record lows, but rental and home
buying prices are sky high.  According to Trulia, prices in many of the
nation`s largest markets are soaring, even outlying areas just beyond the
big urban areas are seeing higher rents.  So, what`s behind the increase
and what does it mean for the housing market?

David Weidner joins, managing director at Trulia Research.

And it`s good to have you back, David.  We always love having you on the
show.

DAVID WEIDNER, TRULIA RESEARCH MANAGING EDITOR:  Hey, Sue.  Good to see
you.

HERERA:  Let`s start, first of all, with why you think rates, not — you
know, rental rates, as well as home prices, are moving in tandem at sharp
rates to the upside?

WEIDNER:  Well, Sue, our report looking at the top 25 rental markets in the
country, this is the second time in the last year we`ve done this report.
So, we knew prices were high.

What we really found this time was that there are just not enough listings
available.  There aren`t enough rentals available.  So, there`s this sharp,
sharp drop in supply.  And, of course, we have this tremendous amount of
people looking to rent.

And, of course, this was caused by a couple of things.  First of all,
people are migrating to cities, to the job centers, to find employment.
And they`re not able to buy for a couple of reasons.  First of all, they`ve
been displaced by the housing crisis.  And secondly, they`re pushed into
the rental market because there`s no inventory of homes for sale.

So, we`ve got this kind of double-edged sword where people can`t buy
because there`s no inventory and then they`re all rushing to the rental
market, so there`s not enough rentals on the market as well.

MATHISEN:  You know, we toss around the word “affordability” a lot, David.
And I have sort of two questions, what does affordability measure
specifically?  And then where is affordability the worst in the country?

WEIDNER:  Right.  So the way that we measure affordability is we take a
look, you figure a perspective of somebody looking for a home is going to
spend around 30 percent to 40 percent of their income on housing, max.  So
when we go around and we take a look at median household incomes in these
markets, and then we look at the median rents for one bedroom, two bedroom,
three bedroom, so on, we can determine where not only how many units are
available but with those prices, how many are affordable.

And you know, we`re finding surprise places where rents and the lack of
affordable rentals is actually exceeding what we`re seeing in San
Francisco, which everybody knows about.  So we`ve got places like Portland,
like Phoenix, Seattle, parts of Dallas.  We`re seeing places where just
people who want to actually rent a place can`t find a place.

HERERA:  Very quickly, David, I`ve only got 30 seconds.  How does this
resolve itself?

WEIDNER:  Well, that`s a great question.  You know, basically, in many
markets around the country, we have a housing shortage.  San Francisco,
Seattle, Washington, D.C. and what has to happen there, there`s a lot of
safety valves.  One is you can build more housing.  Well, that`s a tough
row to hoe.

Another is people can just pick up and leave.  They can go to places where
they can afford housing and that means further away from jobs.  And
ultimately, businesses may find it better, lower cost of living places to
move to.

HERERA:  To move to.

All right, on that note, David, thank you so much for joining us.  David
Weidner with Trulia Research.

And coming up, will Disney`s dreams come true in China?  We have a first
look inside its big investment in Shanghai.

(MUSIC)

MATHISEN:  More than five years and $5.5 billion later, Disney (NYSE:DIS)
opens its biggest and most expensive international resort in China.  And
Disney (NYSE:DIS) knows not only are the risks high, but so are the
rewards.

(BEGIN VIDEO CLIP)

BOB IGER, DISNEY CHAIRMAN & CEO:  This is I think a great market for Disney
(NYSE:DIS).  And a growth market as well.  Obviously, the size of the
market, the number of people, is another reason.

But — and this is an extremely important step, the biggest step actually
we`ve ever taken anywhere to grow in a market.

(END VIDEO CLIP)

MATHISEN:  Eunice Yoon takes us inside the gates of Shanghai Disney
(NYSE:DIS), and it won`t cost you a dollar or a yuan.

(BEGIN VIDEOTAPE)

EUNICE YOON, NIGHTLY BUSINESS REPORT CORRESPONDENT:  This is the largest
Disney (NYSE:DIS) castle for the world`s largest population.  With the
opening of its $5.5 billion theme park in Shanghai next week, the U.S.
entertainment giant hopes to dazzle China`s consumers.

But Shanghai Disneyland isn`t the Disneyland Americans may be familiar
with.  Lead designer or imagineer as Disney (NYSE:DIS) calls her, Chang Xu,
told me the company had to re-imagine the whole market.  First, taking into
account in China, three generations often live under one roof.

CHANG XU, WALT DISNEY IMAGINEER:  Our research tells that Chinese people
want to bring grandma, grandma, and little kids all together come to the
park.  So, we`ve designed this area that you have a lot green area and a
lot of benches.  Grandma and grandpa can just sit there and enjoy the view,
take photos for the family, and just take a break.

YOON:  Eighty percent of the attractions here are unique to China.  Disney
(NYSE:DIS) takes on Chinese tradition, adding new rides and remaking old
classics.

XU:  We realized the franchise “Pirates of the Caribbean” was really well-
received in China, people loved Jack Sparrow.  That`s why, we for the first
time we have this pirates theme in treasure cove with our Chinese guests.

YOON:  Some things would be recognizable in the U.S., though they`re even a
bigger cloud pleaser here.  This is one of the most popular spots in the
park.

This is one of the most popular spots in the park.  Every time you come by
here, there are lines that are weaving all the way around.  And it`s all
for a turkey leg.

How long did you wait for this turkey leg?

UNIDENTIFIED FEMALE:  About two hours.

YOON:  You waited two hours for that turkey leg?

UNIDENTIFIED FEMALE:  Yes.

YOON:  Disney (NYSE:DIS) may have reinvented the park but what the people
here like and don`t like doesn`t seem all that different from elsewhere in
the world.

UNIDENTIFIED FEMALE (through translator):  We loved the pirates of the
Caribbean.

UNIDENTIFIED MALE (through translator):  The lines are way too long.  I
have been waiting three hours for a ride.

YOON:  A sign the middle kingdom may be ready to embrace the Magic Kingdom.

For NIGHTLY BUSINESS REPORT, I`m Eunice Yoon in Shanghai.

(END VIDEOTAPE)

HERERA:  Turkey legs are the best.

Google (NASDAQ:GOOG) co-founder Larry Page is reportedly secretly building
flying cars, and it`s taking place in the building that houses his personal
aviation startup called Z Arrow.  As first reported by Bloomberg, Page has
financed this project with over $100 million of his own money.

MATHISEN:  While Larry page is healthy enough to fund it, those getting off
the ground have to look for investors to help turn their ideas into
reality.  One company who wants to make that process a little easier.

Kate Rogers (NYSE:ROG) reports tonight from Los Angeles.

(BEGIN VIDEOTAPE)

KATE ROGERS, NIGHTLY BUSINESS REPORT CORRESPONDENT:  Look no further than
Mark Zuckerberg for proof that great ideas can advance well beyond the four
walls of a college dorm.

This week, college startups from around the country are hoping to duplicate
that success at the Recess Pitch finals in Los Angeles.  A March Madness-
style competition for coeds who want to become the next big thing.  They`re
up for a full scholarship to venture capitalist Tim Draper`s Draper
University in Silicon Valley and a shot at $250,000.

The festival has been to 18 campuses and six regions to narrow down the 10
finalists.

CHRISTINE FANCHIANG, THE SPACE EXPLORATION COMPANY:  We`re excited to be in
Los Angeles to show off our company and what we`ve done so far.

STEPHEN KUHL, PENN & HUNT:  Just get practice pitching and, then also, what
the money and yeah, seems like a cool experience.

ROGERS:  Recess has come full circle, having been hatched by Indiana
University seniors Jack Shannon and Deuce Thevenow in 2010 as a music
festival.  By 2013, it expanded into a pitch competition and mentorship
event, followed by a concert.  It`s in the vein of South by Southwest at
college campuses to help students gain access to resources and connections
to launch businesses.

Shannon blind-e-mailed Mark Cuban post-graduation and he became the
company`s first and primary investor.

JACK SHANNON, RECESS CO-FOUNDER:  We infused, you know, the idea of
entrepreneurship and startups into our music festival with the mission of
finding and identifying young entrepreneurs like that us building a
business in a dorm room, to give them the opportunity that we had to turn
that into a real business.

ROGERS:  Since 2013, Recess has received 1,000 pitches and startups that
have gone on to the program have gone to raise $12 million in funding from
big investors, including Cuban, Draper, and Salesforce CEO Marc Benioff.

That opportunity is the reason recess launch in the first place, to expose
startups to mentors and investors they might not meet on campus.

FANCHIANG:  At college, that`s where you get a lot of exciting ideas
amongst your colleagues and you`re coming up with really cool, innovative
solutions.  But part of it, we don`t always have the best training once you
get out into the workforce about how to even start a company.

ROGERS:  And after tonight, Recess will make it a little easier for the
next potential Mark Zuckerberg.

In Los Angeles, for NIGHTLY BUSINESS REPORT, I`m Kate Rogers (NYSE:ROG).

(END VIDEOTAPE)

HERERA:  And that does it for NIGHTLY BUSINESS REPORT tonight.  I`m Sue
Herera.  We like to remind you that this is the time of year your public
television station seeks your support.

MATHISEN:  I`m Tyler Mathisen.  Thank you for your support and have a great
evening, everybody.  See you back here tomorrow.

END

Nightly Business Report transcripts and video are available on-line post
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our guests and commentators are their own and do not necessarily represent
the views of Nightly Business Report, or CNBC, Inc. Information presented
on Nightly Business Report is not and should not be considered as
investment advice. (c) 2016 CNBC, Inc.

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