Im David Shuster in for ali velshi. And this is real money. This is israreal money, anu are the most important part of the show. So tell us what is on your mind. We all get a sharp shocking reminder today that while americas economy is looking strong, the picture beyond our shores is anything but clear, and it may end up posing risks to the u. S. Recovery. The reminder came in the form of a Portuguese Bank many of us have never heard of, but whos financial problems sent stocks in europe plunging. Portugueses stock the biggest plunge. Followed by shane, italy, germany, france, and while some analysts say the problems are limited to one bank, the episode is bringing back very unpleasant memories of the european debt crisis. The dow opened 180 points, but made up a lot of the ground finishing about 70 points down or less than half of 1 . But lets go beyond todays Market Reaction to the more important issue of europes economic health. The health of some of americas biggest trading partners. The data shows the big picture. European demand is growing for American Goods and services. Europe exports rose to about 4 in may over april to 23. 4 billion, that helped shrink the trade deficit by nearly 6 . But there may be reason to worry about whether europe is really on solid economic ground. 1. 8 in germany, 1. 7 in france. 1. 2 in italy, and 0. 7 in great britain. And all of thisment comes on top of persistent worries about very low inflation and investment in the euro zone. The european recovery is not as strong as it should be. We also got incite into the financial strength of another major u. S. Trading partner, china. That countrys exports rose, and while that is the best pace in five months it was well below what was for cast. Chinese imports also grew less than expectations, and that is adding to concerns that china may not meet its a growth p targets. Its just another area to consider in a global market. Lets tap into what all of this means for the economic recovery, both in the United States and abroad. Joining us from boston is chief global economist at decision economics. Alan has been covering the worlds economies for more than four decades. Alan what happened in europe today, is this an isolated incident or suggest a wrote broader problem. Its not isolated in the sense that were going to have incidents like that. But i dont think it fundamental. Earnings reports well get in the next few weeks are fundamental, well see how they do. The World Economy is in a different place than it was two or three years ago when Something Like this would set off nervousness and a big consolidation of the stock market. Europe is not doing as well as it should, thats correct. But it is doing a lot better. They are not doing austerity anymore. The countries like portugal and spain are doing a little bit better. When markets hit highs, people get nervous, talk about bubbles, and almost everything and we had several bits of news can set off a selloff. Is it your view that the American Economy is essentially fundamentally sound right now, but investors are looking for any sort of reason to have a selloff . That they think the market is a little bit too inflated . I think thats right. Its standard operating procedure. Markets hit highs, people feel optimistic, and then something happens. Traders sell, investors get scared. Theres a lot of pizazz about it, and the world goes on, and after a time stock markets go back up. Half of all americans have money in the stock market, as they see these signs of nervousness, and a lot of people were celebrating, and then over the past couple of days there was some nervousness. What could ordinary investoring be doing . They should not panic or sell. They might be a little cautious about putting new money in. Because the prices may get better ahead, but should continue to systematically invest in stocks, even if we have and some day we will i dont think we will this time have a fullfledged correction, i still think stocks are a place to put money into. Well see how the earnings season goes. And down the road the Federal Reserve will start to raise Interest Rates, and that when that really comes into view, that could create a a regular correction. But the equity bull market in my view is going to go on and on and on for a long time. Were going to talk about the fed later in the show, but do you have any concerns or expectations, fears, about corporate earnings that are coming . We want to see a pickup in growth of earnings, better revenues, to justify the levels of the stock market were at now. And there are only about 30 companies that have reported. A couple from dow jones, so its too early. The uncertainty of how earnings will go and whether well see the renewed growth in earnings, which we need to justify valuations, that uncertainty is a reason why some investors will take profits, sell, get some cash, and be ready to buy again if the when the uncertainty is clear. Allan, thanks for being on the program. Thank you. Youre welcome. Coming up improving diversity in technology. You come to work here every morning. This is a tech area of brooklyn, how many people of color do you see on your way to work every morning . I see maybe one out of every ten. We will show you how some investors are helping entrepreneurs of color turn their dreams into realities. Plus american and china admit an international spying drama. That story and more as real money continues. Tech giants including google, facebook and apple recently released internal Employment Data showing most of their employees are white or asian. To combat this problem, a small but growing number of business incubators and accelerators are helping people of color strengthen their companies. Reporter sue sawny fits right in the downtown work scene. Stylish in that hip, nerdy sort of way, but unlike most people in his professional life, he is african american. The typical ceo doesnt look like me. Reporter you come to work here every morning, this is a tech area of brooklyn, how many people of color do you see on your way to work every morning . I would say one out of every ten. Dream invention is a growing number of incubators developing to change that. A third of the companies, that will have in our program are sponsored by comcast and are part of our program which we call dream and access. Reporter the general partner says the best axccelerators for minore are the same access regardless of race. In exchange for handing over a 6 equity stake, each company gets 25,000, office space for three months, mentorship, and legal and accounting services. His company is called we did it. It helps nonprofits better understand donor behavior, and through an app offers a way to turn donations into credit card readers. Usually within seconds the card is scanned and the donation takes place. Reporter the potential reach of we did it is vast. Is there are more than 1. 6 million nonprofits in the usa, yet attracting investors hasnt been easy. We have had some difficulty raising funds for our business, even though we are we have been cash flow positive for over a year. Reporter according to a center, less than all firms seeking income in 2013 got it. But the situation is even more bleak for people of color. Only 13 of nonwhite applicants got any angel funding, compared to an overall average of 22 . Social connections are part of the problem. Black and brown entrepreneurs may not have all of the professional contacts to get in front of key investors. This is where incubators and accelerators say they add the most value. They get to pitch their business to several hundred accredited investors. Its time that black entrepreneurs reach out to the world. This professor says the market that present to people of color present a unique opportunity. It seems like the only thing that the Global Community wants to purchase from africanamericans are aspects of our culture associated with the super athletes and entertainment. Reporter at 1. 3 trillion, the u. S. Hispanic market is bigger than the economies of all but the top 15 countries. But the biggest drivers of investor eyes on communities of color and their entrepreneurs is that these groups are younger, and therefore what is hot in u. S. Markets of color is likely to have global appeal. University of Georgia Research shows africanamericans spend disproportionately more in electronics than most americans. Apple announced a 3 billion acquisition of beat. Owned by dr. Dre. The head phones were marketed to young audiences. They are banking on Companies Like perkle, and on line community. And focussed on ceos like sue. Towards the end of the year were definitely going to be past perhaps our thousandth client. Lets get more on Technology Investing and diversity with denmark west, a partner at k1 investment management, and microsoft, viacom, and mtv executive who now advises startup companies. And is an Angel Investor himself. An Angel Investment round is either a seed round or presince tugsal round which is before the venture capitols or the professionals come to invest. Its High Net Worth individuals, qualified investors that make usually more than 200,000 a year, usually have some significant sum in assets, and what they are trying to do is invest in entrepreneurs, so they can determine product and market fit. So that means do you have a business or a product or service that not only the market wants, but they are willing to pay for and or use. So its a little bit more of a risk, but there can also be more of a reward for the Angel Investor. What is the key for a business trying to attract an Angel Investor. You have to have a clear value proposition. And people have to feel that you can have a large enough business to grow the investment. People think about this early stage investment very similar to gambling, because so many startups fail. So if you are going to be at the riskiest part, you need to feel like there will be a big payoff to make it work. A lot of Angel Investors, they have a good sense about this person and their commitment to this particular project or venture to see it through. Thats a good point. One of the things i think is important is theres an issue of comfort and competence. Its great if you know what you are doing. Its better if people feel good about you, and theres three major drivers that i have seen. One is do you have a similar education background . The second is do you have annum employment background or a work history or an entrepreneur history that says that you are actually doing something, or you have been in a place that i recognize and value in terms of their process and product. And the third is do you actually know people, are you associated with people that i know, that i trust, that i think they are not only great people themselves but have great judge of character and they are saying this is something i should look into. Is that why minorities and women may be at an disadvantage, because its not so much the Old Boys Club . The connections are different . Yes, and i can make an argument that minorities of both genders and women particularly have a little bit of a challenge when it comes to that familiarity and comfort issue. The fact that it is not a zero issue its not a binary issue means there are people that can crack the nut in more ways. What are the trends you are seeing right now in terms of Angel Investments worldwide. There are a few trends. If you look at the evolution of the market, there are three primary changes that i think have impacted angel investing in general and an ininvesting as a whole. The cost of starting up as dropped dramatically over the last 15 to 20 years. And thats a combination of three factors. One is Opensource Software has made getting products off of the ground much easier, two is the revolution in real estate has made it easier for people to get space and get started. Three is cloud severa severals services have made the process you need from a infrastructure perspective much more incremental as opposed to having to buy racks of servers. The second thing that has happened is you have actually seen that the nature of the competitiveness of the industry has has changed in part. So as a rounds become more competitive, the Angel Investors themselves have now become the place where venture capitalists have started to either act like Angel Investors or part for with them, to get into what used to be referred to as preinstitutional rounds, so they can have a seat at the table. And the final piece is around crowd funding. And thats the great democr democratizer. And the entrepreneur side. On the enenside. You have your powerpoint, your business plan, what is the one most important thing to get that Angel Investor so say okay. Im in. Relatablety. You have to understand what makes this person pull the trigger to make a decision. At the end of the day, you are selling your business. Denmark west is a startup advisor and Angel Investor himself. Thank you for being on the program. Thank you for having me. Coming up, why some american businesses are worried about the relationship between the United States and china. U. S. Secretary of state john kerry, and jack lew went to china this morning to listen to their counterparts. The meetings are part of this years u. S. Chinas strategic and economic dialogue, and in the past year, dialogue between the two countries has hit new lows. Thats because china is locking horns with two u. S. Allies in asia over maritime disputes. Meanwhile the spat own Cyber Security breaches targeting american firms sours relations even more. This is what kerry had to say about that today in beijing. The loss of International Property through cyber has a Chilling Effect on innovation and investment. Incidents of cyber theft have harmed our businesses and threatened our nations competitiveness. And we had a Frank Exchange on cyber issues in our dialogue, and we both agree it is important to continue discussions in this area. Add to that the usual economic disputes over trade imbalances and Currency Exchange rates and you can see why nobody expected a big break through in beijing this week, but the uschina relationship is an important one. China is the worlds second largest economy and forecast to overtake the United States for the number one slot in the next ten years. Well, the dialogue itself is important. But then in the outcourse is very important. You have these two very large economies, the two biggest in the world. Two very strong strategic powers, and the more they talk to one another, the more they understand one another, and the scope for misunderstanding is reduced. So hopefully the dialogue produces results. Both sides want Different Things from these discussions, but just the mere fact of them talking, and hopefully theyll do it on a regular basis, means better understanding, and less scope of problems. Why has the relationship between these two global superpowers been deteriorating in recent years . Certainly recently china has become much more assertive in asia, and in particular has has taken a somewhat aggressive attitude towards some of its neighbors, and that has created tensions within asia, but since the u. S. Also is the guarantor of some of those countries especially the philippines and japan, it has brought the u. S. Into sort of a tense relationship with with china. So the hope is that these discussions will lower the the temperature, if you will in the region, lower the risks in the region, because while anned a advertant war is not likely, you could have perhaps two ships collide or Something Like that. I gather that intellectual property certains are great for your clients. Explain about that. The u. S. Takes intellectual property very seriously, whereas the treatment of ip, intellectual property, by chinese, Chinese Government is much more shall we say casual. And that creates a big conflict. Especially for sectors where this is important like hightech. Pharma another big one, biotech. Very important, so a lot of u. S. Companies are increasingly reluctant to do business in china because the respect for intellectual property in china is not as high as it is in the u. S. Beyond the issue of intellectual property, what are some of the other big concerns that American Companies have about dealing with china . Well, the other big worry that u. S. Companies have is the potential that china could have a hard landing, in other words have a recession. Although recession in china means 3 growth, which a lot of countries would love to have. But 3 is a recession for china, and the worry is that this big debt bubble that they have had recently which has gone to finance things like speculative real estate and adding a lot of excess capacity in Industries Like automotive and chemicals and steel, that kind of bubble cant last. Sooner or later it is going to burst. In the next three to five years there is probably a one in three chance of some kind of bad scenario for china. Thats what a lot of our customers are increasingly concerned about. What do the chinese want to hear from the United States and from your customers to improve the relationship from their perspective. I think the chinese are feeling they are a rising power, especially in asia, and they want the respect that comes with that. And i think at some level they feel they are not getting it. Certainly not from the americans. So i think thats what they are looking for, an acknowledgment, a change in the rules if you will. A change in the way things are viewed in asia, visavis china