The indexes lower this morning. Industrial average right now is unchanged at 17,751. The s p 500 is down fractionally at 2108. Facebook shares are falling after Second Quarter spending jumped. Facebooks today chart shows a decline of about. 8 . Whole foods also tumbled today after cutting sales forecast. Showing whole food shares down 12 . Decline, also its in back from the biggest monthly loss of 2015. Oil with the oneyear chart, look at that there. Moment very ugly at this in time. A check of the bond markets today as well. After Second Quarter gdp came in lighter than expected, the revisions indicated the First Quarter show growth. You have a reaction in the treasury market paired on the short end, it is selling. Longhere is buying at the end of the yield curve. The yield on the 10 year going down. You do have talk about the probability of a fed rate increase in december gathering momentum here. We are seeing the gap between fiveyear and 30yearold 30 year yields. What you have here is a stronger dollar. The dollar index is higher for a Third Straight day. The dollar fares against 15 of the major currencies. It is stronger versus all 16 major currencies. Thelosses down 1. 6 versus dollar. The brazilian row all the way up to swedish, little changed but notably still will still weaker against the dollar. It is something we are continuing to keep an eye on. In interestrate increase by perhaps september. The u. S. Economy picked up the pace in the Second Quarter with gdp rising at an annual rate of 2. 3 . Slightly less than what economists had anticipated. The Commerce Department revised the figure higher. The economy actually grew. 6 in the first three months of the year. Applications for Unemployment Benefits actually rose last week after hitting a four decade low. Labor Department Reports increase of 12,000 jobless claims. Well below total is 300,000. Strengthen the u. S. Labor market could commence the fed the economy could withstand an Interest Rate increase. Planning to sell the riskiest type of bank debt, britains biggest taxpayer owned with lender said it will mark it as they . 1 billion of additional bonds this year. Unexpectedn on profit in the Second Quarter, boosting shares of as the u. K. Government prepares to sell its stake. And metal sheet found on a Remote Island will be sent to france for tests. The three foot by nine foot object might be from the missing Malaysia Airlines jet here officials think it looks like a wing lapse, boeing seven and evan. Of jet thattype vanished over the indian ocean in march of 2014. No trace of the plane has been found. Australian officials who helped in the search are encouraged by this discovery. It is the first real evidence there is a possibility that a part of the aircraft may have been found. It is too early to make that judgment, but clearly, we are treating this as a major lead. We are seeking to get assurance about what is being found and whether it is indeed linked to the disappearance. The part was found by a crew cleaning a beach on a french own island. They also found a suitcase with wheels in the same area. To china, 239 people aboard. A new survey shows donald trump ahead of the republican president ial field and by a wide margin. By 20 ofwas backed the republican voters, surveyed by scott walker was second with 13 . Jeb bush with 10 . No way list. Ps the 30 of republicans say they would not vote for him. It also says Hillary Clinton would be trump in a head to head contest. Mark scarlet speaking of republicans, they do not have enough they cannot complain they do not have enough choices. Candidate is in the race. The former virginia governor, no telling he will get into next weeks televised debate. Only listed in one national poll. Universal is set to invest 250 million into buzz feed. That would boost buzz feeds value. The company had revenues of more than 100 million last year. It is the start of a spending spree. It is also negotiating to invest in talks video. Those are your top stories. The Federal Reserve is navigating uncharted waters, more than six years of virtual interestrate. The team asked an economist of we are anywhere close to Central Banks getting back to policy. Beginning to see modulation sometime this fall. If you look around the world, Central Banks, zero policy rates, quantitative easing, you name it. Workole in your original dovetails. How can the bank work in a vacuum . Know canada and mexico just to start the conversation. Whatobal factors affected the bank is doing in the last couple of months. Downside is coming from greece. The china slowdown and then the stock market follows. The chinese are intervening china to backstop the Financial System and so on. Domestic factors, at this point, if youre looking at the economy growth and unemployment, we are close to the point at which this will occur. Looking at that one, i would say i would not be reasonably confident about that point pair the dollar is strengthening, prices are falling. Commodity prices are falling. Wages are not accelerating. There are large profit margins, even if there were acceleration. Wages to prices may be slower than others. Gdp this year and next . Tom youre saying below 2 . Thirdbase line is 1. 8 to 2 . We have had a very weak firstquarter. The Second Quarter, above 2 . We will not be doing great. He may not be confident about a rate increase, there is one fund manager who is. Case bill gross makes his for a september rate hike. Onre joined now for more bill grosss new thinking. He is in the majority. Everybody else seems to think it will be in september. Been saying this for a while now. He had a note that said it had the opposite of the intended effect and there is a feedback loop where chief debt and chief equity only spurred by backs and things like that. Saying this is breaking down. In january, he was saying we were nearing the end of capitalism. This isnt at love that where he is saying this feedback loop is not working. Pension funds and Insurance Company models, something has to give. He thinks the fed is watching the same thing and saying, we need to do something so that we do not lose the plot of capitalism here. Is not a new argument could what has changed this around this time around . One thing that troubled him was a paradigm of low returns for the next couple of years. He is looking for the environment where we are trending narrower and narrower returns every year or for someone who pride himself on generating yield and returns for investors for clients, it makes his job all the more difficult. I think he feels kind of bad about that. If there is hope we could make progress in an economy. Mark he believes the market has gotten used to cheat money so if the fed does move in september as mostly, this as most economists believe i sit does not seem away. He would view it as a relief it is to if it is done in orderly way. He said the fed would be gradual in the way it rages will raises wages. They do not want to cause a shock and they are well aware of all of that. Scarlet give us contest. You read ill grosss monthly newsletters every month. He had trouble getting use when he was managing the pimco total return fund. They are so big. He cannot do something about unsettling the markets. Now that he is managing a smaller fund, how are his returns question mark returns . They have been volatile. In may, the top percentile and then he slipped back when some of the volatility trades did not work for him. He has been up and down a lot. It has been a roller coaster ride. Some strategies that anchored it , they are three months away, six months away from maturing. You pick up that thread and that would not have moved the needle at all. He is just 1. 5 billion and that does generate reliable for him. Mark you move from pimco and then to janice. Thinking evolved when youre so linked to one firm for so long a time and then all of a sudden, a baby you helped create, you are no longer there . It has been crazy for him. His office with janice is just down the road. It is identical. Kind of confusing mentally i am sure. It looks all the same and yet it is so different. He said publicly he is excited about being in a smaller font. There is a big difference when you used to have a fleet of evil giving you ideas and saying hey, the mortgage security is really a goodbye and youre like, i have never heard of that but ok. There is a feedback missing. Scarlet all right, our resident expert on bill gross and pimco. Mark coming up, tmobile is getting closer and closer to sprint in the race to become the nations Third Largest wireless carrier. We will hear from tmobiles chief Financial Officer about the companys Second Quarter results. On the more perspective fed on the likelihood of a september rate increase. Tony of pimco will be joining us at 2 00 p. M. New york time. Mark julie, good afternoon. Major averages flirting with the unchanged level. We are now seeing the dow peaked head above the zero line. The s p did that very briefly as well. All they long, we have been gyrating around that based on earnings reports with not a lot of movement when all is said and done. Lets run through a few of them. They Company Going through a Management Change as he who had returned to the company is now departing it having slammed it down considerably. The question is, how is the slimmeddown business going to do . Organic cells sales of that core business will rise in a single digit range. That raises concerns about the existing remaining businesses and how they will do. A drag on the s p 500 today. Were are also talking a lot about facebook. The decline the s p 500 today, p g is dragging more on the s p than is facebook or facebookss numbers look good. Revenues rose more than analysts estimated. It is really the spending giving investors pause. Take a look at my bloomberg terminal. I grabbed this from scarlet earlier. I liked her chart so much. This is r d spending on facebook. Quarter over quarter. Yearoveryear, i could i should say. Putting much doubling in the r d spending. Mark zuckerberg, as someone pointed out earlier, pulling a jeff bezos and saying, have nations with me as we invest in the business. Finally, one of these on the upside today, up 5 . The maker of oreos and triscuits is shrugging off to some extent the effects of a higher dollar. It gets 80 of its business outside in north america. Scarlet hercules, noted professor. Just started a trend, pulling a bezos. I like that. Thank you so much. Mortgage rates fell for slippingstraight week, below 4 p or freddie mac says the average rate on a 30 year fixedrate mortgage declined to 3. 98 this week, from point 4. 04 a week earlier. The rate on a 15 year fixedrate mortgages is 3. 17 from 3. 21 . Mark no crying in baseball, or so the movie line goes. But the emotions run high in the big leagues as we saw wednesday night. As the trade deadline approached, the Philadelphia Phillies decided it is pointless to keep one of the rest pictures on this years worst teams. To the texas rangers. He got ahe first motion on the field after hearing yet been traded. Pulled from the game after someone told the teamss manager he was crying. Deal fellgame, the through. He has been with the mets since he was a teenager. He did not want to leave. I know, but there is no crying in baseball. You do not cry in baseball. Mark yes, you do. Scarlet our director is calling him names now. Mark i am real glad you are staying with the mets. Scarlet coming up, saudi arabia from oil exports. We will tell you about plans coming up. We have been crying for the last couple of years. [laughter] mark monitoring welcome back to oil prices have been falling and its dependenceng on oil revenue. In saudi arabia, this report was filed. Saudi arabia positive on an have build expensive shopping malls. The euro of Oil Dependence will eventually come to an end. Some citizens are racing to develop alternative economic drivers. Cliff it is very important. China to create an entirely new Business Model by financing the construction of the whole city by scratch. Being built by countries but not by the private sector are the first 100 billion city. Imagine here in a promotional video, he to profit by leasing lands to properties and the industry. Business professionals may oneday populate these homes spirit for now, construction workers building with new cities represent most of its regiment. Oilrich company were government handouts support many citizens, it is sometimes difficult to encourage saudis into the active workforce. Now studying the case carefully to hide a good policy to start solo. Runs research for saudis is only manufacturing and says the desert climate here is ideal for harnessing the suns energy. Promises ofrnment industry expansion, today, his production line is still making test panels. Allows government policy a solar to grow here, how much do you think it will grow . I expect a dramatic increase. Saudi oil revenues topped 900 billion. In the past three decades, just 70 million has been spent on solar. It was developed as a caravan. Another could be tech home for several months. It is easy to attract investors. Interest is in the experience. You the access to capital does not guarantee economic success. We are joined here in studio. The city that you visited, it is still being built. King up dell economic city. That is a long name. Tok how is it helping benefit the overall economy of the kingdom . Collects they have a huge domestic economy and consumer demand. One thing theyre hoping to do is develop a poor there that will serve as a major help for the region. Theyre trying to attract foreign business there but there is a huge challenge there. They had 3000 permanent residents,. 50,000 will still only be a quarter built then. Experts say are the longterm prospects for the economy . It is still heavily dependent on oil. Willem one of the big concerns is not supply, but pete demand that they worry, and we talked about this before, when the people will high, look for alternatives. By driving the price down and increasing production, they have been able to hold onto their market share and push off that moment when they will run out of oil. Mark what is the frustration level . That is just in the testing stages. Why is it taking so long . Talking to people there, they are frustrated. They will not sit public ramik camera because it is government issued. They would like to see some money and save the government in particular. Mark thank you so much. I am signing off but you have got the next hour. What will you cover . Mark two tmobile. Tmobile. 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. Mark he he he they want to see welcome back. There is a scenario in which the fed may hold off for a while. Inflation has been low recently. Moving downward or even if you and energyhe food sectors, it has been much below the feds target of 2 . I think with china slowing and concerns about china going for it, Commodity Prices in general have been lower than they have been, and that puts downward pressure on inflation. The key rate has not been raised in nine years. Secondquarter profit more than tripled at deutsche bank. The junk in the jump in trading revenue the bankss signaled he may shrink the trading operations. Home rental prices here in the United States keep climbing faster than incomes. So says rents in june more than 4 higher than a year ago. Up by double digits in denver, san francisco, and san jose, california. Rent hikes have slowed down and washington, d. C. It turns out he does air executives with violet licenses and not pull fulltime pilots were behind the controls of the flight that almost ran out of fuel last week. The executors were flying the plane to north dakota when it made an Emergency Landing in the Fargo Airport with 144 passengers on board. The pilots were also unaware that the Fargo Airport was closed at the time. The blue Angels Flight team could practice. It is not uncommon for members of its Operations Team to flight planes to fly planes to maintain its pilot status to more fallout from Rolling Stones magazines erroneous story about a gang in virginia. The editor is stepping down. The magazine retracted this story after an investigation and there was an apology. Three members of the fraternity named in the story have filed a libel suit against rolling stone. Those are some of your top stories at this hour. Tmobile shares are rising after the Wireless Company reported stronger user growth in the Second Quarter and boosted its subscriber forecast for the year. The socalled uncarrier reported sales gains a 14 and turned a profit of 361 million despite aggressive pricing. Emily chang is in san francisco. She is standing by with tmobiles chief officer. Emily the cfo is tmobile is joining me. For being here. A Strong Quarter for you guys. How long do you expect pay phone growth to continue and where do you rank most subscribers are coming to you from . It is a pleasure to be here. The quarter we just put down showed the revolution is continuing. Shipe grabbing most of our share from at t and verizon. 292 million. To with that coverage, very innovative marketing. For jp powersone Customer Service this morning. Emily i am not surprised that you do have a lot of these new giveaways and a lot of new deals attracting subscribers to you. You are the guy who has to mind the bottom line. How do you describe these with profitability . An important piece of giving us the ability to continue the massive investment we are making in our network. When you look cool or over quarter, a 14 increase of total revenues, we added 2. 1 million subscribers, 4 million this year, 12 million in the last 18 months, and with that highgrowth, we just delivered a significant beat on eps. Up 25 yearoveryear, so the is taking a here growth platform, turning that into doubledigit revenue increases, translating to very strong growth and cash flows and profitability. Emily you had a lot of promotions running for the samsung lcx s6. How are these phones actually selling and how are samsung phones selling versus apple phones heading into what will be a heavy device season this fall . When you look at our overall flow of new customers coming in, they gravitate about 5050 to the iphone and to the samsung alex. When you look at our embedded base, because we were last to the iphone of all national carriers, we are at a lower percentage, a significant opportunity for tmobile. Come, we haveshes the lowest percentage of base that could potentially switch and we could benefit from all the other carriers. Did you see what we did with our latest amp up of apple . Apple music ind all of our streaming offerings, forwe have a no risk offer people interested in moving to apple. You can go between now and labor day, get an apple six or six bus and we per month, guarantee when the next generation comes out, you can swap that phone in for no get theal cost and latest generation of apple. We are happy about that visioning in the market. I will be curious how many customers will be dry and buy that in particular. The ceo believes you guys already have more subscribers thans rent. Sprint is not report earnings until next week. You are at 58. 9 million total right now. Sprint will update the number. Do you think tmobile is already bigger than sprint . Sure when the for official numbers come out but yes. We thought we were actually bigger than sprint. Every other metric, revenues, profitability, market cap, we have been larger than sprint for a significant time. With the subscriber number, we are very conservative in the way we rip ward wholesale subscribers. We disconnect them out of our numbers after 90 days. Sprint has a much more liberal policy. They are carrying a lot of. Even with that description discrepancy, we think we are bigger. John sends his regards. He would have loved to have been here today. With a number one win in Customer Service, he is now with all of our Customer Service employees celebrating and talking and categorizing about improvements. Emily it is nice to be speaking with you for a change of pace. Andhave said you need size scale to compete in the industry. Verizon and at t are at 100 million plus subscribers. Now that the dish deal is on ice, how do you address tmobiles needs to get bigger . We are in an excellent position there. If you look at the formation of tmobile u. S. , 2. 5 years ago with the merger, we have 34 million subscribers. We are now at 59 million subscribers. We are organically scaling very rapidly. You can he what that is doing to our Financial Results of our profitability, our cash flows. We are very comfortable with the path we are on a with that being said, we are always looking at innovators in the industry, how we can enhance shareholder value and look at things from a strategic lens. I know john has articulated that with you many times. Makesnly, we will do what sense for our shareholders, our customers, and our employees. Emily the Communications Industry is consolidating right now. At t, directv, charters deals with time warner cable. What is your view on m a in the industry and what do you look for as a cfo . First and foremost, we are in the enviable position of being a party that runs toward and can embrace strategic opportunities in the future. Will be, who do we partner with in the future and what has the best trajectory for us to create substantial additional shareholder value . We have a very good track record on that and the world is our oyster. The ball. Belle of at t and verizon are too big to do anything. Is having their difficulties. He we are uniquely positioned to partner with innovators and other industries, jason sees that will develop weird it will be a fascinating journey for us. Your competitors are getting into video streaming. Do you have a plan to . Iswhat is really interesting the majority of our data usage, and we have more data usage per customer than any other carrier in the u. S. , and that is because we have the fastest 4g lte network, but the majority of our data already is video. Our is interesting, customers are choosing what type of video content they want to be itoff the internet, your show, be it youtube, be it whatever. So yes, we are already very heavily involved. A carrier aggregating content and putting the forward, which is probably where verizon is going with their latest announced offering, with what at t will potentially do, that is unproven. We can ask absolutely partner with anybody to get into that realm, but right now, we are offering customers full choice of what type of video streaming they would like to have. Emily we will be watching out for that. Tmobile cfo, braxton carter. Thank you so much for joining us. Mark all right. Thank you so much for it we have breaking news. Out for Natural Resources preparing to file for bankruptcy as soon as monday. Julie hyman is at the breaking news desk with the details. File foranning to bankruptcy protection in virginia as soon as monday according to three people with direct knowledge of the matter. Maker ofhe largest coal in the United States pair that is coal used in steelmaking. Cold forrovides heating and for power plants. We have really seen the coal industry just added. This is the latest accuracy within the industry. According to our story, the companys senior letters lenders plan to provide a loan throughthe company bankruptcy. We have seen the coal miners really that are an very volatile. The bankruptcy filing is planned to be coming in a tough time for the industry. Mark thank you so much. Alix steel alex steele joins me in studio. Walter energy and then patriot call . Alix i want to thank our intelligence guy on this, great resource. They get there and they have to clean up. The way off the winds up funding it is through self bonding. They basically go, hey, we will not put this on our balance sheets. We will fund this ourselves. Trust us. We have got enough cash and we are in a good spot to wyoming earlier this year came out and said, we will not let you do that anymore. That means also had 90 days to go out into the Public Market and get hundreds of millions of dollars to go clean up some of their coal areas. Beencomes it could have one of the issues plaguing out for two sort of force them into bankruptcy. Mark what do their metals look like . Alix julie was touching on this point. Overall, down 10 in the Second Quarter. They are getting hit by week prices, used as an input into steel because china is not making as much steel. Number two is weak pricing. Number three, they have very high cost. Number cointreau, we have seen power plants in the u. S. Closing. That means they are using less coal to make electricity. That means another loss of demand for their fundamental coal. That is the issue plaguing the entire coal industry. Also specific into issues when it came to their funding in terms of cleaning up the socalled self bonding. Just mentioned briefly about the prolonged coal slump that we have seen. Does any of this come as a surprise . These producers got hit really hard. Alix not really in some sense. Tradingabout their debt . 15 on the dollar. When you look at Something Like that, how long could a company sustain those levels. The issue winds up being there are very few areas in the u. S. Here that are actually profitable for the companys. Those areas. Ne of if they went to off and pulled back on their support for the debt funding, that they normally supported, that leaves off the without a resource. That is kind of ironic. What happens if that is closed . How do they make any kind of money . Month, theer this first week of july, now for let 200 people know that this was a possibility. Now, they will be out of work for all intents and purposes. Alix coal is even at a harder plate because it is so unloved. The bigger backdrop here is we have seen sovereign wealth funds and other funds across the board saying we will not own coal stocks. The latest one to do that, that also puts pressure on the equities side as well. It is like a threepronged approach. You have got the debt and equity and fundamentals. Thanks be a we will continue to follow this story on our resources coming up throughout the day here on bloomberg television. After in reports earnings the close today. My colleague betty liu will join me to discuss the professional networks growing influence. Mark welcome back. Julie hyman is standing by. Julie the slump in commodities has taken on that company as a prepares for a banquet see following filing. It has been a broadbased selloff that we see. Of 22erg Commodity IndexRaw Materials is down just about. 5 on the day. What is remarkable is the move we have seen this month. Take a look at my bloomberg terminal at the index this past month and we have seen it declined by nearly 10 , its worst onemonth performance sits in since september of 2011. We have seen a price collapse across a broad swath of commodities as we have seen the dollar increase and signs of ample supply and not so great demand. Just to take an example, if you look at oil prices, the Third Straight monthly decline we have seen oil lower. We are also looking at the biggest monthly drop for a year. Heres what we see oil do today. It is down about. 1 . Mark all right, julie, thanks. Betty liu is here. Betty on the other side. You took umbrage with the fact i had not sent you a linkedin invite. Low and behold, linked in people started saying, poor betty, i guess we will send you a linkedin invite. That is armor last time they missed analyst estimates and the stock got hit, will we will see what happens this time around for it on a lighter note, that is right. People felt sorry for me because you never asked me into your linked in network. Since mark never send unification come i figured i would here and i would like to add you to my professional networker mark said he were trying to expand your linkedin network. You both were quite humorous onair today. Make a Mark Crumpton good team. Very enjoyable to listen to daily. Lets just run away together. [laughter] my name wasu notice mentioned a lot . How does that make you feel . Betty not good. Not. I would imagine but we will be watching for that very closely. Having the same problem like facebook. The user growth is slowing down. Stay with us. Bloomberg market day continues in just a moment. Mark welcome back. How his Lingerie Company was seek to dominance in the market. Grown revenues from one million to over 16 million in just three years. A new brand of womens underwear. They are competing with victorias secret. I came to the u. S. To study at first. I did not have much money but i had a girlfriend and i wanted to buy her some lingerie. Nothing came close to the range of my budget. I decided i would start a theany that would make products in lingerie finally affordable. Pitch. Ed to 30 years in andre. There are things we could actually do better. Our own design, it is very colorful. We cut the middlemen. We do not have any store. With the associated penny is our secret. In 2012,irst started we had about 100 and the website. Years later, we had 1000 come about 10 times more. The biggest challenge was definitely the supply chain combined with marketing. Leadtimes were very high. Were talking nine months between order and delivery. 25 sizes for a broad. It is not easy to know in advance what you will need of which product. You take a financial risk, and inventor risk, and altogether, you need to sell it all the sudden, which means also, a marketing risk. In the first time, we would market everything online. We now diversified by doing it at the same time online and other channels such as television. We are very fulfilled. About 800,000 and it is really a strong way to communicate with our customers. To wee yoga wear coming want to be approachable for everyone, whatever your taste, size, or genre is. At some point, a large Merger Acquisition ipo. Adore me founder if self driving cars ever became mainstream, what happens to the Car Insurance industry and what does it mean for Companies Like geico and state farm . We will try to answer the question coming up. Mark 11 a. M. In san francisco, 2 p. M. In new york, and 2 00 a. M. In hong kong. Betty you are with the bloomberg market day. Mark the u. S. Economy expanded at a faster rate in the Second Quarter, setting the stage for a also a possible rate hike in june. All eyes are on the next quarter. Betty and there could be a big cost to auto insurers. The owners of oracle are part of the revolutionary Birth Control program, one that has already made a big difference for unplanned pregnant. Unplanned pregnancy. Good afternoon from bloomberg World Headquarters in new york. Im Mark Crumpton here with betty liu. Seeing you here. If i had time more. Betty i know, i feel like i should be on the other side of the screen. The stock markets