Show you how it had transpired throughout the day. We know the plunge in shanghai overnight cap it all over global equities. But mainline stocks are not included. You dont see the big drop in hours. 2 ocks 600 film and fell more than 2 . The index is currently down by 7 10 of 1 . Moreker market means demand for treasuries and higher prices means a lower yield. Remember, the fomc begins a twoday meeting tomorrow. The concern is the fed wont be able to consider to signal on wednesday that they are confident of a rate hike even though business is so far recovering from we miss in the first half. And taking a look at the dollar we instead, the u. S. Currency falling. A lot of analysts say the dollar could be weakening because of lowercost oddity lower commodity prices. Mark lets take a look at some of the top stories we are following at this hour, investors worldwide are wondering how are the damage could right after chinese stocks suffered their worst day in eight years. It the shanghai composite index though more than 6 . There is concern that a rally propped up by Government Intervention cannot laugh. Earlier this morning cannot last. Earlier this morning, richard ross described the magnitude of the problem. The question is, where does this party get it legitimacy . They cannot quite figure it out if the markets cannot work. They have a real problem on their hands and dont know quite what to do. That is why you see massive intervention and other times backing off. This is a serious political problem. Mark the Chinese Government let 1400 companies quit trading and band major shareholders from selling their stakes. Russian present Vladimir Putin will address the assembly of the u. N. Chinesethe list is president as well as the iranian president ronnie. It was two years ago when a phone call between president obama and rouhani prompted speculation between of rapprochement between the two countries. Mark yvonne will be taken off secretary kerry satellite links to be dan, and not just by governments. Secretary kerry prosecutors must take pride in taking todays traffickers and turning them into tomorrows prisoners. The private sector needs to be part of this effort. By blowing the whistle on companies that use labor that is underage, underpaid, and under version. Mark malaysia was taken off the list after helping thousands of religious refugees from myanmar. Has moved forward in normalizing relations with the u. S. More than 20,000 people around the world are considered modernday slaves, mostly in mining, construction, and rades. Rate sex t months weve seen a raise in durable good orders. Tok mcgrawhill has agreed by snl financial. The price, 2. 2 billion in cash. Snl financial is owned by new Mountain Capital and members of management. Those are your top stories. Scarlet coming up in the next half hour, what is behind the big drop in investment in china . Investors are wondering how far it could spread despite the efforts of the government. Mark and a new Study Reveals that the music you like says about how you think. Eris and Keane Anderson will create one of the worlds biggest companies. Mark it is negative merger monday in the Health Care Industry. Shares of pharmaceuticals jumped after agreeing to buy the business hour again alle rgan first stocks. Scarlet to share what this all means is at hand are. Hamander. Woke us through this. It is hard to get your head around. Ed it caught the media and the Investor Community by surprise. Teva had put in a bid a while ago and it was very hostile. Scarlet they were not making any headway. Ed they had indicated they were going to buy the company through hostile means. They then 1. 1 lead dollars in shares in mylan. 1. 1 billion in shares in mylan. At the same time, they were working behind to get this rgen deal done. What about this wave of mergers that we have seen in the Health Care Industry . How do you explain this . D there is so much confidence in the industry. And the other thing that is happening, as one big deal happens, other companies look, particularly in the same subset. We have seen this in biopharmaceuticals and recently in health insurance. Mark does that translate to the overall u. S. Economy . Ed i think it does, and the other thing you have that is slightly different in mergers from the rest of the economy is issue withp dealmaking. People did not want to do them because they thought it was historically cheap debt, but not necessarily what investors wanted. Deal coming to the surface. Scarlet and just to quantify the kind of deals we are seeing, within the pharma space here in the u. S. , we had yearoveryear a 14 increase over the same time last year. Its not an insignificant amount. Talk about the macro environment. You mentioned a low rate, so debt is cheap. But low tax rate is another macro factor. Neither of these factors are permanent. Inversion factor is always massive in pharmaceuticals. You had a lot of Pharma Companies that did relocate. Before the government came out and said it was going to try to stop this, those companies were coming out mylan and alle of those some companies. You have this bifurcation in the industries in the industry. U. S. Companies cannot compete. I think you will see more of them. Mark what will be the impact on the average consumer . Genericargument the Companies Make is that if you look at it, through scale they are able to get the distribution. They have the Distribution Channels already and their argument is that it is good for the consumer because they can pass the cost cutting on to the consumer. I would be wary to think that we would see any of it. Mark it seems like in these deals, as with everything, comes down to timing. Said tev is said to be near a deal to buya mylans all ergan business. Elliott, investors are wondering how far this damage could spread. Welcome back. Im Mark Crumpton with scarlet fu. Scarlet lets head over to julie hyman with a look at the markets. We are looking at triple digit losses in the dow and if it straight day of losses in all three indices. Julie we have been talking about a losing streak in commodities, but also in talks. They could he go handinhand, since a lot of the commodity producers and those who service them have seen declines. Following through all of it significant averages, the 50 day, the 100 a, the 200 day. If you look at the five day performance in the s p 500, we are down nearly 3 in the past week. Two points 2. 8 to be exact. It was not down all five consecutive days in june, but in terms of magnitude, about the same amount. Towe see stocks continue sell off from their highs, we have a lot of folks weighing in on the tea leaves and why they will continue to see declines. After all, there has not been an interruption in a very long time. What we are looking at is the performance in two groups that are responsible for all of the gains that we have seen year to date. Health care and and simmer discretionary stocks. Health care and Consumer Discretionary stocks. Energy, utilities, materials, and industrials are all significantly lower. That includes big tech stocks that arelix and amazon helping to support the index. The trouble that goes with the thinking is when you have just a few names that are helping to support gains, and not everyone is participating. Gina from wells fargo point this out today and shes looking at high beta stocks. They tend to be a bit more volatile. You are seeing that reflected here in white. The s p 500 is in green. She said you are seeing this to virgins here because typically the beta index moves with a nearly onetoone correlation, a. 89 correlation with the s p 500, but that is not happening. 11 from its down highs of the year and the s p is only down about 3 from its highs of the year. She said in the past where we have seen this to virgins, the s p has tumbled to catch up with those high beta names. Scarlet in the First Quarter they were pretty much in lockstep. Julie hyman, thank you so much. At theets take a look top stories this hour. Disneys ceo says espn will eventually be sold straight to consumers without a cable subscription. In iger said in an interviews that it will not happen anytime soon. The sports channel has been a big moneymaker for disney. A big move for bostons bid to host the 2021 summer olympics, he says he will not sign any document that refers to cost overruns. He is talking about the host city contract that is crucial to the date. Sports is making a bid on fantasy sports. A 3 million and, half of which will come from fox sports. The nhl and Major League Soccer also investing. Majorgue greek League Baseball is increasing its investment. Scarlet china falling more than 8 in trading, the biggest tumble since february, 2007. Simon male was on Market Makers this morning and he puts selloff in context. Simon china cannot have it both ways at the moment. You cannot have a market and economy that you are trying to liberalize and open up to Foreign Investment and at the same time intervene when the results of the liberalization do not fit your agenda. The agenda has been the encouragement of a stock rally stop stockmarket rally. A stock market rally designed to secure capital and allow securitization of debt. Dont forget that really the only thing supporting the market at the moment has been the belief of the public that the government will support the market. Matt which they have been doing, right . Absolutely. Matt the government has been buying into Big Companies and have since ended trading of shares of most of the Smaller Companies and have ordered have suspended trading of shares of most of the Smaller Companies shareholders to stop selling. How can they hold the ball like that . Simon they cannot do it indefinitely. When the market there was going up, one of the things i heard is that the greater fall is when you are selling. The government is setting itself up as the fool. They dont want to make this market a one way that. If you do that, then you risk reigniting a bubble that could have even worse consequences later. Stephanie and what options does the Chinese Government have at the moment . Havent they made their bed . This the Real Movement of stock market is not going to be that seriously that seriously if you look at the effect on the man on the street, it will not be that great. Matt that would be my main concern as the party leader. Stephanie i think that would make a great party leader in china. Matt after buying yachts and things, my main concern would be the average people. Right, and the concern is social stability. 75 of Household Wealth in china is in property. The remaining 25 , 10 of that is in it stock market. Will who itct will effect is the man on the street and the property owner. Matt the stock market is still of 71 including the drop. Simon that is another point. Matt this year it is a 15 year to date. Last year it was up 52 . It is still doing incredibly well. Simon and a lot of people who bought higher at our leveraged as well. There could be some serious implications on the wealthy people who borrowed. We are looking at the overall economy and im going to say the effects will be relatively limited. If you go back to the 7 growth we saw last month, half of that was the result of the frenzy of Economic Activity in the stock market rally. Willwill go away and we see weakness. But if you look beyond that, we will see rates coming down and we will start to see the civilization of the economy as a whole. Matt at 6. 5 growth. Simon at 6. 5 or 7 . Its not bad from a global standpoint. Some docs around the world are starting to discount that consumer affect. You are starting to see a big fella because of china sentiment. Stephanie what does that mean for the 1400 Companies Whose stock you cannot trade . Many of these companies have actually pledged their own stock as collateral for margin growth. Theyre hoping by the any their own shares from trading their share value will not go down, there for margin will not be called. It is clearly not a great situation because everyone is hoping they are the only ones who will do it, but that is not the case. Matt especially if you are the creditor there. Simon and most of those are the banks. The financeing that companies will be exposed. By our calculation, the impact on profit in the collapse of the market will be about 2 this year. It is entirely manageable. Is actually value appearing in the problem is that many of the shares that have been the subject of most atculation are still trading 40 to 60 times earnings, and no one really knows in china what those earnings are. In the u. S. , we have a deep securities industry and a lot of analysts there. Earnings are more of a concept. It is not a deep securities industry there. Can you really trust the earnings as well . L. Arlet that was simon mai 50as just checking the Mainland Chinese Companies listed in thing more in singapore. They are only down by 2 . Perhaps this selloff is going to moderate and perhaps even stop. Early indications are that the decline has less. You will find, information here and from our colleagues overseas covering this as well. Coming up on the market day, what music do you listen to and what does it say about your brain . Are you extremely logical, or more of an empathetic soul . Your taste in music says a lot about how your brain works according to a Cambridge University that he. That howrs there found yourbrain things preference and music is linked to your cognitive style. Depending on your answer, categories fell into two. Advertisers have pretty selfexplanatory. Emand the pfizers pathizers, pretty selfexplanatory. Lets take a listen. Way down on the suwanee river mark that is the great paul robison. Scarlet now this song. Mark that is a rachmaninoff piano concerto. Scarlet which one do you prefer . Because innot choose like them both. Im a big classical fan. Goes, i listen to parliament, i listen to paramore. Scarlet which when struck you . Mark rachmaninoff. Scarlet you are less of the sympathizer, more logical. Break apart a car engine for us . Mark im let matt miller do that. Scarlet it says a lot about you. Mark we will see you tomorrow. Scarlet we will be back. The only way to get better is to challenge yourself, and thats what were doing at xfinity. We are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Scarlet welcome back. Im scarlet fu. Lets get you to the top stories crossing the bloomberg terminal at this hour. Donald trump is still leading the republican president ial pack will stop new surveys show he is ahead of jeb bush and scott walker. Only 10 of the 16 candidates will qualify for a televised debate on august 6 and fox will use the polls to choose. Electiondays until 2016. 13 u. S. Corporations will invest at least 140 billion to reduce our carbon footprint. The companies include apple, berkshire hathaway, and others. Three Public WorkersPension Funds are suing new jersey for billions in damages. They say the State Government breached contracts when it contributed less than planned. It is following a nearly yearlong dispute over pension contributions. It stems from governor Chris Christies decision last year aid a budget shortfall from budget he signed into law in 2020 in 2010. Display at the smithsonian for the 50th anniversary of the historic spacewalk. Coming up, argentina has its own version of angry birds, but its a propaganda. We will find out whether it is popular or not. A prices are at record highs and you can blame the avian flu outbreak. And we look at the list of airports in the world and laguardia, itfor is likely on it. There is a new powerhouse in town. Everything is met and came. Arketing are joining forces it will rank among the biggest pe firms. It will be called ares kane management. I think a lot of people say sizes the enemy of performance, but in our market we are seeing a pretty big consolidation trend. Lps are shrinking the number of relationships around the world and they are doing it because they want broader platforms and better investment solutions. The ability and opportunity to scale up is pretty exciting. When you look at pe and wanted to get involved in deals, you said, there is zero chance i can get involved because blackstone in carlisle, etc. And lead everything up . Michael no, when you look at not private equity centric, but credit centric. 90 billion of our standalone a u. N. Is in direct trading and commendable credit. We dont really see ourselves competing headtohead with some of the folks you just named. Why now . What is so great about this merger is we are taking 20 billion of predominantly Energy Infrastructure space and setting up next to our existing businesses. It almost drops as the perfect vertical. Kayne whoow people at invest a lot in real estate, that kind of thing. Michael yes, they are investors housing,state, student medical offices. Its a very niche business. Kayne anderson is about as good in at market. They get diversification of energy that is not tied to the markets. Stephanie how long were you talking to Kane Anderson question mark those who made investments in march, april, may of this year got killed. Michael the littleknown secret aynes office is right next to ours in los angeles. A really long any relationship fit in terms of benefit. Weve been talking for six months, but the roots of the two firms go back a long ways. Stephanie but there is no doubt that energy has had a rough time in the last few months. Matt it things like a bad thing to be involved in right now. Thats me im saying the timing. Stephanie im saying the timing. Michael when you look at the s0 billion of keynes kayne energy exposure, the only 3 billion is in that segment. Thing i mentioned, as a private equity manager, we have to think about the longterm trend and the longterm trend in the shale revolution is undeniable. 650 billion in Energy Infrastructure over the next several years in this country. Matt you are not concerned about the drop that weve seen in Energy Prices does it is only eighthth a n of the field. Morning or the the warning that frack is l whack. Michael our view is that the structure is right and we have more upside volatility than down. Say youve been nextdoor to each other in los angeles for a long time, but im sure you in competitive in some way. Stephanie every day in the parking lot in l. A. They highfive and say, oh, my god, we are doing this in l. A. And every chunk is in new york city. They have that in common. Michael cultural fit is everything. You talk about mergers all the time and the discussion is usually around who will manage what assets and how will it work. It fits hand in glove. The reality the ability to integrate them we think will be pretty easy. Scarlet coming up on the bloomberg market day, paying up for your omelette. Surging egg prices brought on by the avian flu could cost you as billion could cost the industry is majestic billion dollars. The industry as much as 3 billion. Scarlet welcome back. Im scarlet fu. Argentina has its own version of angry birds. In this case, it is a Government Commission videogame in which to vultures refer international bondholders, and you cannot lose. Joining us now is the Bloomberg News reporter who wrote the story via skype. Wrote the story. She joins svs cut. How does this she joins us via skype. How does this work . Slung fromy is being the slingshot . When the kids go into the tonomy ministries building play the game, the game has birdslike words flying over buildings like hospitals and schools. From theyou shoots slingshots are supposed to represent the argentine government subsidy program. You dont actually shoot at the birds. You shoot at the boulders that are blocking these buildings. And when the boulders break, the birds are scared away. And when you succeed in scaring all the birds, on the screen it says, mission accomplished. We gained our economic sovereignty together. There is nothing subtle about this. And as you mention in your story, everyone wins. If everyone plays until the very end, then what happened . Camila then the kids have are sent to a separate room and it is a very surreal experience. Walls by your side there are near. It plays a seven minute video. Nd its all very psychedelic you have the former president and the economic minister who has been demonized by this running around with dollar bills. And again, the vultures are vilified. They are kind of robotic birds, shooting fire from their mouth. Like you said, nothing subtle about it. Muchet thank you so ,camila, from brenda starr is. From buenos aires. Guide to reading alice steele, our commodities queen to talk us through the basic commodities. First, the but story you were most excited about this morning was multiweek. Supplye are looking at a issue here in the u. S. That has to do with winter wheat. So much rain has actually turned the week moldy and wheat moldy. It will affect cattle food. Basically, too much rain. Scarlet that should be one of the bloomberg stories on the terminal. Lets look at copper. There is an oversupply of the metal. Alix citigroup actually reducing its shortterm price target from zero to two. Ity is the most bullish they have a contrarian view on copper. They still see about 1015 the next 12 months. And they do the overall demand. Will havelook, you this weekend this weakness and government will come in and supported and that will support demand for copper. And we have to mission high flows, the inventory the shanghai flows, the inventory being reduced in china. There is movement when you look at the mentoring picture. Forlet gold is only higher the second time in 13 sessions. It is not a big move. What are Institutional Investors saying . Alix they downgraded it to about 1000. That puts it in alignment with other shops like Goldman Sachs and jenny jenny montgomery. There is one that estimate 800. Is that the lowest of the low . Goldman said it would actually be 750 per ounce and if you adjust for inflation it should be even lower. That is definitely the lowest ive heard so far. All our bearish. Hsbc said, we can get you maybe 1000. But today they had a note that me,l believes excuse 1205 by the end of the year. Scarlet from 750 up to 1205. Alix that is a 500 range. Scarlet we will be back at the top of the next hour to take you through the market close. Poultry farmers have been hit for dr this year. This is another one have been hit pretty hard this year. This is another one of alixs favorite stories this year. The costbusiness to businesses could be as high as 3 billion. One of the largest in the industry, eglins best. Ands best. Eggl they asked how long it will take to get back to production. Asrlie some say as long next year, some say faster. They are working as diligent ly as they can to have more birds. Is this a regional issue . Charles it is regionallybased, price you look at overall, they are the cheapest source of protein. Pimm what is a, 2. 60 for a dozen . The egg pricing california much higher. Why . Charles there are launching california over how many birds there are laws in california over how many birds you can fit in his eighth. Maybe they have gone overboard. It is costing the producers in california a lot more to produce it. Who is paying . The consumers. Outlook . Hat is your when do you think prices will come back down for moore will come back down . When do you think the market will stabilize . Have gonehe prices down and then in the past week or two have gone back up. When you get into december, january, baking season, prices may go up again. Depending on how fast they can repopulate, it might be after easter. Most people are predicting around an 18 month cycle. Olivia you do not have any in iowa. How was your business impacted . Charles in order to get the eggs, our prices have gone up. But we are a premium brand and taste better nutritionally. The difference between atlantas egglands best and from twoou can go dollars 99 2. 99 of two 4. 99. Thingshat about the cost like food manufacturers, and other industries that use a products . Egg charles they will go up also. Theye birds that died, would have produced more as that would into ingredients. Just like supply and demand, those eggs travel. Pimm will some of the prize be put on breakfast offerings . Invia or will some of it be products like mayonnaise . Charles some will have that. Olivia do you expect the flu to come back this fall . Charles we hope not. We just dont know. It is a crapshoot. There are fly zones. There is the mississippi fly zone and the atlantic fly zone where these waterfowl go. We hope it doesnt. All security measures have been taken. There is a vaccine that they are working on that theyve had positive results with. We hope this positive results, if anything happens, that we can stop it quickly. And you just do your best. And they are, from the bio security, vaccine come and every other standpoint. Do your best and keep on going. Scarlet that was charlie langtry, chief executive of eg glands best. Apple best buy will start selling the apple watch. It is the first chain to offer the device outside of apple itself. It will begin selling the watch a week from friday. The owner of burger king posted secondquarter earnings that analyst estimates. It is mostly due to sandwiches and bringing back the classic and fries. The old saying is true, the rich just getting richer. New numbers from bloomberg indicate that is the case. 400 legionnaires rose by most 195 billion this year. By moreonaires rose than 195 billion this year. Bill gates still tops the list. Those are your top stories. Coming up, laguardia will be getting a multianother renovation a multibillion dollar renovation. Will it be enough to relieve congestion . Waitlist, crowded terminals, horrendous traffic, laguardia ranks pretty high on the list. It ranked number one in the airport frustration index. Vice President Joe Biden did not mince words about what he taught about the airport. if idsident biden like. And took them at 2 00 a. M. To the airport if i blindfolded a person and took them to the airport in hong kong at 2 a. M. They would say, this must be the u. S. Because its fancy. I took them to look party a, they would think they were in a third world country. Making a major announcement on Laguardia Airport right now. Governor cuomo has just begun in. Lets head over to laguardias airport. What have we learned so far . Right now, they have been speaking for about the past 15 minutes. Andrew cuomo has been making a film a few remarks. On vicetill waiting President Biden for someone of the things he said in the past few minutes is that he compares laguardia with newark international, saying why are so many going to Newark Liberty going to newark. It is an new york. Rying to it is unnew york he is trying to bring people back to new york. Building aoking at brandnew central terminal. Right here is the central terminal. A lot of people are getting ready for afternoon flight. S is the low silting ceiling in a building that has been here for the past 50 years. It is old. They want to raise the roof and make it more like a great hall. In addition, transport links. One of those is an air train directly from them and to laguardia. There are also plans for a high need fairy coming rum and a highspeed fairy a highspeed from new jersey. Thats pretty ambitious. Transportation options, i know you highlighted a couple they want to improve on. How did you get out there . Without driving there, you pretty much cannot get there through a train. You have to take a bus. Ramy thats right. There are a couple of options. This morning, our crew went by over. Uber. One is to take the train and either take a taxi or a bus. Or take your own transport. That is an issue for those who dont want to end money on cabs, or dont have their own transport. The air train could alleviate that and push a lot more people through laguardia when that happens. Amy is live as authority and will have more on the announcements from governor cuomo. Ourhead, joining us next guest will be joining us to give us his take on what the fomc does next. 3 p. M. In new york, 3 00 a. M. In hong kong. Stock market plunges, sending investors for safe havens. Areill talk about where we seeing best opportunities in the bond market. A fiveyearing at low, speculators hold short positions on the first time ever. And bugs bunny turns 75 today and there is no sign he is ready to retire. We will tell you who warner bros. Has recently signed. Scarlet good afternoon everyone. We want to get to straight to the market. You are seeing a selloff in markets. I