Good evening, sue. Good evening, bill. Im sue herera. Welcome, everybody. Records were set on wall street today. The dow, the s p 500 and the nasdaq all closed at levels theyve never closed at before. The investor came on the eve, as bill mentioned, of the employment report for may. Lets get to the numbers on this first trading day of june. The Dow Jones IndustrialsDow Jones Industrials advanced to 21,144. The nasdaq gained 48. And the s p 500 rose 18. And wall streets enthusiasm was due in part to the latest reports on the labor market. Private businesses added more than 250,000 jobs last month. That was well ahead of estimates. And Payroll Processor adp said the hiring primarily came with companies with fewer than 500 employees. It accounted for threequarters of the jobs that were added in may. And tomorrow, of course, the governments Monthly Employment report will be released. Expectations for nonforeign payrolls to be increased by 184,000 and for the Unemployment Rate to remain steady at its 4. 4 rate. However, General Motors will eliminate one of two shifts at a michigan transmission plant. The automaker wont say how many workers are affected. But there are reports it could be roughly 300 positions. And those job cuts come amid lackluster sales last month at most of the major automakers. In fact it was the slowest pace weve seen in more than two years. But amid the unimpressive numbers, there were signs that may give investors hope that the Auto Industry can stay highly profitable even as sales slow. Phil lebeau explains. Reporter there was mixed news in americas showrooms last month. Lets start with the not so good news. Sales were unimpressive. Only ford posted slightly positive results among the big four automakers. Once again, trucks and suvs are driving demand while car sales continue to slide. Even with some models carrying huge incentives. As a result, may was the Third Straight month with sales under 17 million vehicles, the slowest threemonth period since 2014. Its a cyclical business. Some coolingoff was inevitable. And guess what . Its happening. Reporter while automakers are wrestling with slower demand, they appear to be showing some discipline when it comes to incentives. Thats the good news from last month. The amount of money to close a deal, even when you factor in discounts when selling cars, was relatively flat for april. Meanwhile, automakers are expected to curb production as they head into summer to help ease bulging inventories. One other piece of good news for the Auto Industry is the Overall Health of the u. S. Economy. The combination of low unemployment along with High Consumer confidence should drive relatively strong sales as the industry heads into the summer. Phil lebeau, nightly Business Report, chicago. But one part of the Automotive Industry thats expected to see big growth is driverless cars. A new report today says it could be worth 7 trillion by the year 2050. That figure includes industries that will contribute to and be created by autonomous driving. The study adds that its too soon to predict which companies are poised to grab the biggest share of that market, bill. Elsewhere, sue, Construction Spending recorded its biggest decline in a year. Investment in both private and public projects fell in april. According to the commerce department, overall spending fell nearly 1. 5 in that time. The president will withdraw the United States from the paris climate accord. In a speech in the white house rose garden, President Trump said the agreement was harming the economy. The cost to the economy at this time would be close to 3 trillion in lost gdp and 6. 5 milli 6. 5 million industrial jobs. While households would have 7,000 less income and in many cases much worse than that. The decision, though, goes against the advice of a number of executives from americas biggest corporations. That withdrawal process could take up to four ye as you know, the white house recently released its proposed budget for the upcoming fiscal year. It includes sharp cuts in spending to our nations heartland. And one kansas farmer is growing concerned. Reporter derrick sawyers family has been farming in mcpherson county, kansas for four generations. They grow wheat, corn, and soybeans, they raise cattle, and they even have horses. All of that is possible, sawyer says, because of the federal Crop Insurance program. The Crop Insurance has always been a big part of what we do. More for the assurance that if we have a disaster, it will help cover the costs of production. Its definitely not a program that were going to get rich over. Reporter but President Trumps latest budget axes agriculture programs, 28 billion from Crop Insurance, nearly 6 billion from conservation efforts. 650 million from direct subsidies to farmers. The grand total, 38 billion. White house budget director Mick Mulvaney agrees that Crop Insurance is critical to farmers. But he says thats exactly why they dont need a big subsidy to get them to buy it. He also recently told lawmakers that the administration is helping small town america by rolling back regulations. Farmers are farmers. They want to grow stuff and they want to be productive. They dont want to be paper pushers who trying to figure how the federal government is going to punish them for doing something that thought was right. Reporter still, some republicans are crying foul. Senator pat roberts of kansas and represent Michael Conaway of texas oppose the cuts. Theyre the chairmen of the two agriculture committees in congress. They pledge to protect the farmers safety net. The president s budget is just the starting point for negotiations. Many farm states voted for trump. Sawyer said hes hopeful that means the white house will listen to people like him. We knew there wasnt a perfect candidate. And honestly, there never really is. But what i believe in is smaller federal government, more local control, and fiscal responsibility. And, you know, i feel that we can really work with the president through his new secretary of agriculture, sonny perdue. Reporter yet the administration has already disappointed some farmers on issues like trade and immigration. Theyre hoping that cutting Crop Insurance wont end up being the final straw. For nightly Business Report. By the way, on our website you can read more about farmers and the proposed budget. Log on to nbr. Com. Sue . Bill, as we told you, the major indexes sit at alltime highs. A recent report, though, suggests that you can increase returns and reduce risk with alternative strategies. Our guest is the chief investment strategist at raymond james. Jeff, good to see you as always, welcome. You bet, sue, thanks. You say one of the things youre looking at to diversify a portfolio are certain commodities. You say theyre in the bottoming formation. Yes, if you look at the crb index or the Goldman Sachs commodity index, it looks to us like theyre trying to form a bottom here. Its probably best represented by energy. Energy is out of favor. And some of the stocks are off, in fact some of the stocks are off 40, 45 from their recent highs. I like to buy things that are out of favor, because they tend to come back into favor. You also like mexico, jeff. In fact you like it more than china. Why . Well, whats happened in china, the wages over the past five years have gone up fivefold. Yet the Chinese Workers are still disgruntled. So the quality of some of the things they are producing has come down. I dont know if you saw this, bill, but foxconn, that was building the iphones for apple, is going to build a plant in the u. S. Mexico i think is going to be the new china. Their production standards are up to u. S. Quality standards. And the transportation costs are a lot less, even if we do build a wall. How would you do that, how would you play mexico or any other country that you like around t . I would use the exchange created funds to do it, or a mexican centric mutual fund. Active management, i prefer that over passive management. Active managers have been outperforming in the quarter, i think thats going to continue. Since the election, the s p is up about 13 . The dow is up 15 . The nasdaq up 16 . But you still think the u. S. Is cheap. Make your case there, and where would you put money to work right now . You have more high growth, high margin stocks in the s p than ever by definition. That means you should have higher valuations than historic. You have this changed from tangible assets in the 80s to intangible assets on balance sheets. By definition, that means valuation should be higher. If you take out the aberrational low pes in the 70s and 80s that occurred because of double digit inflation and Interest Rates and started in 1990 and look at the pe at the beginning of this year up until this year, you find the average pe is 23. 85. So were trading at about 18 times this years estimate, every onepoint drop in the Corporate Tax rate adds 1. 31 to that estimate. On that note, jeff, thank you as always. Always a pleasure, sue. Bill . Still ahead, assessing the damage. Why the skys the limit for property insurers. It is june 1. That means its the start of hurricane season. This year, the National Oceanic and Atmospheric Administration is predicting a 70 chance of 11 to 17 named storms in the atlantic. Morgan brennan is in windsor, connecticut with an inside look at how the Insurance Industry is maybe we have damage to this roof, maybe its hail, maybe its wind. Reporter at travelers claim university, 7500 adjusters come through each year. They learn how to assess Property Damage using two model homes inside the hartford area facility. Why did you choose these two model homes to use . Really to reflect the differences in complexity of properties that we see all around the country. Reporter the Senior Vice President of claims for travelers. This might be something typical of tree damage. Reporter but this year, theres something new to learn. Drones. The Company Began using the technology in an official capacity last year, deploying drones to help assess damage from hurricane matthew. It can take days off the process. Reporter meaning checks can be cut more quickly for repairs. Travelers has 150 faacertified Drone Operators and hopes to have 700 by next year. And theyre not alone. State farm and all state are working to expand their usage as well. Its not just drones either. During hurricane season, what does this room look like . If we have an event, this room is packed. Reporter the Catastrophe Response Center provides instant analysis as events unfold on the ground. Weve been able to recreate a tornado path just based on the images that people put out on social media. Reporter travelers and other Property Casualty insurers say they prepare for the worst all year long. Something the National Oceanic and Atmospheric Administration says is essential for everyone. There is a potential for a lot of atlantic storm activity this year. We cannot stop hundredrricanes. But again, we can prepare for them. Reporter im Morgan Brennan for nightly Business Report in windsor, connecticut. Communications equipment maker sienna tops expectations. Thats where we begin tonights market focus. The Company Reported profit and sales that rose, and called the quarter, quote, outstanding. Sienna sees this quarters revenue coming in slightly higher than estimates. As a result, shares popped more than 15 to 27. 19. But clothing retailer express missed revenue estimates despite seeing solid demand in its ecommerce business. The Company Reported a wider than expected loss and samestore sales that did not impress analysts. Despite downbeat guidance for the year, express says its confident its taking the right steps to improve the companys performance. Investors werent buying it. Shares plunged by 19 to 6. 27. A rise in customer spending saw revenue increase at Dollar General thanks to samestore sales. Profit was ahead of targets and the company says it has the right strategy in place to bring more shoppers into the store. Dollar general shares rose more than 6. 5 to 78. 19. Machinery maker deere says its buying a German Company for 5 billion. It said it will expand its current equipment construction portfolio and grow its footprint. Deere shares were up nearly 2 to 124. 70. Athletic Apparel Company lululemon reported a rise in earnings which topped forecasts. Samestore sales edged lower but the results were still better than what wall street were looking for. The company sees revenue for the Current Quarter above estimates. Shares initially shot up in afterhours trading and they ended the regular session up just a fraction to 48. 67. And Home Furnishings retailer rh, formerly known as restoration hardware, beat sales expectations while its earnings were in line. The Company Raised its Sales Guidance for the year but slashed its profit outlook, saying it remains cautious due to an uncertain environment and planned investments. Shares initially got crushed in afterhours trading, losing about a quarter of their value, and erasing an earlier 2 gain when the stock closed at 57. 25. Despite todays robust adp report we told you about earlier, and wall streets High Expectations for the big jobs report coming out tomorrow, there is still some concern and doubt about the lack of skilled workers in our country. Ben castleman is achieve Economics Writer for 538. Com. He says the socalled skills gap is a myth. But merriman berivesh believes its real. Hes chief economist at ihs market. Good to see you both. Thanks for having me. Ben, what do you mean, a myth . The theory is there are oftentimes not enough skilled workers to meet the supply thats out there for many of the companies out there. You disagree with that. Why . Yeah, i mean, look, i hear this from ceos and from executives all the time. I dont doubt that on an individual level, if youre a company, youre trying to hire somebody im trying to hire, its tough to find people, right . But in terms of sort of looking across the economy, is there a shortage of people that is somehow holding back the economy, that is making it hard for us to reach our potential . I dont see the evidence. And the best evidence i can point to there is look at wages. You just dont see the kind of wage growth you would think we would see if people couldnt find good workers. Merriman, you do think theres a skills gap, so take the other side of that argument. Well, lets look at soft data and lets look at some hard data. I mean, a lot of business surveys, ihs market or the institute for supply management or the National Federation of independent businesses, theyre all saying the skills shortages, the shortage of skilled workers, is one of the top two or three challenges. By most estimates, Something Like 40 of businesses are saying they cant find enough skilled workers. So i have to believe in those numbers. I cant just dismiss them and say well, you know, what are they talking about. This is pervasive. Lets look at some of the hard numbers. Ben raised the wage question. If you look at the atlanta Federal Reserve wage tracker, high educated wage earners are earning their wage increase is about 4 a year. Where is low educated workers, theyre wage increases are growing by 3 a year. That suggests theres a problem here in terms of just a growth in wages, forget the levels. So i think there is a skills shortage. And a lot of the hard data point to that, including the Unemployment Rate. Unemployment rates of people with a college education, 2. 4 . Unemployment rates of people without even a high school degree, 6. 5 . That tells you something. Ben . Yeah, although i mean, the gap in the Unemployment Rate has not been widening, if anything, its been narrowing. If anything, were seeing an economy thats starting to put people back to work. I think its important to distinguish here between a skills gap and an economy that is doing better or a labor market thats doing better. Is it harder for companies to hire now than it was when the Unemployment Rate was 8 , 9 , 10 . Absolutely. And we should be glad that its higher for them to hire because thats when you start to see wage growth. I drilled down on a few of the specific occupations that im always hearing are difficult to fill. Whether were talking about Software Engineers and developers or the Skilled Trades that i hear a lot about, elect