Five points. Not much action in the indexes, personalction in the indexes, particularly with energy stocks. Betty exxon and chevron posted dismal earnings. We have seen the plunge and oil price. Primm there you have it. Down another one point. Betty 47 a barrel now. Futures are up. There near the level of a bottom. 1000. Primm lets look at some of the top stories on the bloomberg terminal. To the Worlds Energy giants have then hurt by the worldwide glut of crude oil. Exxon mobil has its worst quarterly performance in six years, and the income fell by more than half. That could force exxon to cut costs more than previously planned. Promptedrgy prices chevron to write it down write down the price of its oil fields. The benchmark west texas oil will finish july down 20 . There is no sign that the glut of oil will end. U. S. Stock fire rolls are 100 Million Barrels above the fiveyear average. Production set a record this month in southern iraq. Fedex has agreed to pay 4. 8 billion for at t. Regulators say the deal may move to higher prices. Ups was blocked from buying teensy. Alexis tsipras said he never had plans to lead the country out of the euro. Minister had a plan b involving a parallel currency. Alexis tsipras said he was ready for the situation if it got worse. Alexis tsipras i issued instructions to the finance minister to work on a plan in case of an emergency. It would have been naive and irresponsible not to do so. Does that mean i was seeking an emergency . Etty the troika has returned representatives are meeting in athens with the cabinet minister to negotiate terms of the 94 billion bailout. Quarterback Russell Wilson played for 62 hundred thousand dollars in base salary. He has a fouryear deal with the seahawks that will pay him 88 million. Russell wilson took the seahawks to the super bowl for the last two years. Primm one stock that is moving higher, we will talk about things doing well, shares of expedia are going to a new high. They had better than estimated secondquarter results. Betty they are on track to close their acquisition of orbit. Emily chang joins us with the cfo for an exclusive interview. So much for you joining us. You added 27,000 Additional Properties last quarter, meaning you added more in the first half of this year, compared to all of last year. Do you expect that to continue, or do you think that you will pause . Great evidence of how well the machine has been built to add that Many Properties in one quarter. There are probably a Million Properties around the world. We have a lot of runway ahead of us. Hotwire, travelocity, these are all under the expedia umbrella. What are your International Priorities . Bigger markets . Smaller markets . Where . Mark we have a global focus. We are excited about our prospects in latin america. That gives us access to the latin american traveler. We are excited about our prospects in southeast asia. We think europe continues to be an exciting opportunity. The u. S. Continues to be an exciting opportunity. Sold your stake in a Chinese Travel Company in may. Why do that when every other seems to be dying to get into china . Broadened our exposure to the outbound chinese traveler. We have access to the outbound chinese traveler. We will offer a number of our ctrip. S to seetrip hotel years are talking about how to get more chinese travelers into las vegas. This represents an expansion of those opportunities. For that reason, we are pretty excited. About thes talk orbits deal. What is the timeline for it to close . What other regulatory issues surrounding the deal given that you are both such big players in the market . Have a ton of information to share. We believe this is a transaction that should be approved and closed in the back half of the year. We want to respect the process. It goes down to the facts. This is a massive industry. Billion in. Did 50 booking. We are under 5 . It is competitive. It is hard to pick up the newspaper without hearing about google, trip advisor, or big Hotel Marketing companies. It is dynamic and competitive. We think this will put our travel suppliers and consumers and a better spot to benefit from the benefits that we bring. An opponent of the google ipo event. How much traffic are you seeing them take away from your business . How is it impacting expedia . Is a great example of how competitive the industry is. We came out with a position that we would not anticipate in the instant book product. We are going to take a test and learn approach. One thing we have seen from the they areoduct, is that incredibly transparent about where the booking is happening. This could be an interesting Customer Acquisition channel. We could acquire customers and turn them into loyal and repeat hotel customers. Emily how much traffic is google taking from expedia . How much a business deal believed that google is taking from you . Antitrust part of the complaint. How much is it hurting your business . i would say that our story with google is twofold. On one side they are a huge player. They are dominant player in the search industry. We want to make sure we have a fair shake in advertising placement and having our brand show up. Hashe other side, google been a great Customer Acquisition tool. It can be a great source of new customers, and in that extent, we have a great relationship. Emily how about airbnb . Could you see a partnership, and how much competition do you see from airbnb worldwide . Mark we are openminded. We have taken an approach to Vacation Rentals that is consistent with our approach. We test things. We are testing home away with 200,000 properties on the site. We are expanding into european properties. We are testing to answer the question, and to our consumers value that product . Encouraging signs, and you will see us move further into the Vacation Rental industry, whether it is with home away, and we are also open to other partnerships. As with airbnb and competition, right now, we are not seeing a huge impact. We are looking at this as an and an opportunity. Right now, we think we have a lot of runway in our core business. Emily would you ever partner with a company like uber . Mark we are open to partnerships across the board. Up weartnership came would test it and see if it resonated with our consumers. The cfo of okerstrom expedia. Thank you for joining us. Betty she was just talking to mark okerstrom. Any bowlerafrican crisis appears to run its course. May have found a vaccine to prevent another outbreak. Betty welcome back to the bloomberg market day. I am betty liu. Primm i am pimm fox. Julie hyman will tell us about linkedin. stock markets are a little changed. Linkedin is having a big drop. The last reported earning saw shares tumbling. The Company Raised its forecast, however, analysts are attributing a lot of the increase to the effect of the aucation website which was recent acquisition by a linkedin. There is a concern over its core business, though they saw a revenue of 38 . Expectations were relatively high going into the report. Going down by almost 10 . The company cut its revenue forecast. Rt seems like the innerwea business is not growing much. We have a brief segment of hanes business. This is active wear, and this is international. Theres not a lot of change in the innerwear business. Even as there have been uneven growth. Activewear, and history wide, has been performing well. We are not seeing a lot of growth in innerwear. Amgen. D to talk about theyre coming out with forecasts ahead of what analysts anticipated. Theyre increasing their margin and cutting down operating expenses, and increasing sales of the Rheumatoid Arthritis drug , their biggest selling drug. Pimm and i are having fun with innerwear. Lets go over some of the top stories that are crossing bloomberg. Looking for a pay increase . Good luck. Pay increases came to a halt in the second quarter. They rose at the slowest pace on record, and that goes back to 1982. Of a percent. 10 Consumer Confidence fell to an eight month low in july according to the new university of michigan index. 90 for has held above eight consecutive months of. This is the longest streak for the Consumer Confidence index are more than an index. Whiskey thatking will be out of this world. It will be sent to the International Space station next month to see how time in zero gravity affects the flavor. It will stay there for at least a year. Suntory is known for its single malt whiskey and the kentucky bourbon, jim beam. Betty did you hear the question from our producer . You are whiskey drinker . Have we done every test on it . Primm i dont know if it will hope the quality of the whiskey. What will they send it up in . Etty something well padded it has been a while since we talked about ebola. It is finallyt contained. Only seven new cases were reported this week. Primm merck may have found an effective vaccine. Drew armstrong has details. Do they have a partner . Drew there are town of partners. The world health organization, health bodies. L this is an International Effort that has been involved in testing one of the biggest trials in africa. Primm this is the stock moving. Newlink genetics moving up. Not intend to make money in africa. They intend to make money and other places. They are saying they are treating it as a public good in one of the least developed parts of the world. It is a fascinating way that they did this. When you think about ginny, liberia, and sierra leone, there is very Little Health infrastructure. Most of the time people who get this virus are cared for by family members. The folks giving them care are the most vulnerable to catching the disease. That is how it spreads. In avaccinated anyone close circle of context when they found a case. Did they found when they an immediate vaccinations was they had 100 vaccinations. This is your thousand people at the midpoint in the analysis. Pretty fantastic and initial results. It is a remarkable achievement for all of the groups involved. About thet do you say way that Public Health officials are able to come together and come up with a solution to the problem . Drew this has been a very fast move. Typically, the way we do it is we wait for it to kill so many people cannot transmit anymore. Verydesigned this trial quickly. They used it and if aided design. They said, how can we get the most people protected and get scientific results . Betty does this mean we do not have to worry about it anymore . Drew we will still worry about it. You still have to vaccinate people. The virus can change, so we will have to continue to monitor that. Mark a remarkable breakthrough, potentially. Newlink is doing this for a public good, i imagine that mark is doing this summer is similar . Drew the world health organization, anyone governments were sending Health Care Workers over to contain. This outbreak took billions of dollars out of the economy of these countries. 5 of their gdp during the outbreak. Rubber production and other materials were shut down. There is a real economic incentive or Health Organizations and Global International political bodies to step in and get folks taken care of. You. thank a startling development. Clearly a welcome development. Drew armstrong of bloomberg news. Primm coming up, facebook is looking to get the internet all over the world. A plan that involves drones, lasers, and solar panels. How the scifi idea is now reality. Betty one of facebooks missions is to connect rural areas to the internet. All potential of facebook users. They are using balloons to take drones to an altitude of 90,000 feet. Primm this is an interesting milestone for this product. They have unveiled a solar power. Ing it is not have any landing gear. The wingspan of a 737, but it only weighs one third of a toyota previous. It is relatively light weight completely solar panel covered with four propeller engines. It is lifted using below and technology to a height between , and as a 90,000 feet result, that will connect space stations. I believe this is in the u. K. , where they are developing this, and the idea is that this will connect to base stations that will act like a hubs and routers and you can offer internet service. Betty lets run the soundbite of Mark Zuckerberg talking about doing this. throw a lot of people who do not live within range of a network. Drones, satellites, laser satellite and microwave communication are ways to do that. It will be a solution to provide costeffective communication to people where there are no cell phone towers or anything like that. Betty it is a noble idea, but it also makes business sense. They can be anywhere. Thatis also interesting is they stay up for 90 days. Betty it has to keep moving in a circle to stay aloft. Note, i will see you later. Primm we have more coming up on the bloomberg market day. Pimm welcome back to the bloomberg market day. Lets take a look at the top stories at this hour. The European Commission is telling fedex not so fast. Regulators have opened the investigation into fedexs proposed takeover of the dutch Logistics Company tnt express. Fedex has agreed to pay 4. 8 million to acquire tnt. The European Commission says the deal may lead to higher prices for customers for two years ago, regulators blocked ups from buying tnt. Ups has agreed to buy coyote logistics. The price 1. 8 billion. Designed to help ease congestion at the delivery times. Ups is buying coyote from warburg pincus. In japan, three former utility executives will Face Criminal Charges in the Fukushima Nuclear disaster. Meltdowns after an earthquake and tsunami hit in 2011. That led it to radiation leaks that forced tens of people to evacuate. Beijing has something to celebrate. Chinas capital was selected to host the 2022 winter look picks this Winter Olympics. Most of the outdoor competition will take place 40 miles away in the city. The only other city to bid for the games was almonte in context and. Kazakhstan. Forget full cycle, and other fitness trend is climbing in popularity. Indoor rock climbing. The cofounder of a new yorkbased club. Oil is on track for the worst month so far this year. The drop in prices taking a toll in energy producers. Disappointing results from exxon mobil and chevron. We will tell you about sushinomics. What the price of a sushi roll tells us about the state of the u. S. Economy. The markets are closing in europe. For the latest, lets go to hans nichols in berlin. Ans the markets ended mostly green. Husband territory. Not by a whole lot. Positive territory. The dax and up slightly in the positive range. Germany, first financials were down. Deutsche bank was down quite a bit. Ending up in positive territory. Allianz down almost 2 . Italy, high debt demand, high demand pushing the old stone on the 10 year down to 1. 769 . Pushing yields down you can debt had some Strong Demand as investors brace for that flood of data we will get next week. Yields down eight basis points. Greece also calmer. Unchanged basically on the 10 year. Not a whole lot of action there. Thank you very much, hans nichols. Oil prices have fallen back into a bear market, pulling 20 in the month of july. The bloomberg commodities index dropped to a 13 year low this month. Matt miller and scarlet fu spoke with Michael Cohen at barclays. We will see continued high production from saudi arabia in august. What they are dealing with right now is a high amount of crude you did for domestic power. Needed for domestic power. They will not need that much they have actually ratcheted back their output a little bit. As we are looking towards the winter, they will run into a loading problem. Very high output. The geopolitical risk in the north in turkey. This week, we saw 600,000 barrel a day pipeline bombed. All of these risks could raise the price of oil over the course of the next weve been talking a lot about commodities that are produced still at cheaper levels then they are falling copper is one, gold is another. Weve heard that saudis can produce oil for 10 a barrel. Is that the case . The production cost for a lot of these countries in the middle east is very low. What we need to Pay Attention to is over the course of the next three years is new drilling going to occur at these price levels. In a piece we put out this morning, we said there are a lot of projects that have not yet received a final Investment Decision that are in limbo right now because these Major Companies dont necessarily want to approve them during this volatility in the market. Thats what the saudis and opec countries are aiming to do. Add this intentionally they have ended this element of volatility, making it difficult for Companies Like the majors and others to sanction new projects. Matt they are adding capacity so that competitors cannot add new wells. Michael yes. They are keeping their output high in order to ensure that they can reclaim the market share they have lost. Scarlet where do you see the price target now . Michael it has remained the same. In thek given the move curve right now, we are bullish versus where the curve is. The reason we think that is is the market is essentially has this impression that we think the market is extremely overweight. Over the course of the next couple of weeks, the market will be waking up to a market picture that is vastly tighter than where we are right now. The difference is supply and demand. Constructive picture in terms of demand. We are currently of the view that on a yearoveryear basis, demand is being underestimated. The half a million to 7000 barrels a day higher than currently. 700,000 barrels a day higher than currently. We have this edition of shale producers reacting on a quicker basis. Matt does a drop in oil reflect the Global Economic situation . Or are the supply and demand characteristics of oil divorced from they are definitely integrated. Over the course of the last couple months, the dollar has moved as the macro sentiment has changed with relation to whats happening in greece, was happening in the chinese equity market, we have seen all of that filter into this sentiment. Pimm matt miller and scarlet fu speaking with Michael Cohen, the head of Energy Commodities research at park place. Barclays. Still had. I had. , china will host the 2022 Winter Olympics. Beijing will be the first city to host th both winter and summer games. Pimm welcome back to the bloomberg market day. Lets give you a look at the top stories crossing the bloomberg terminal right now. The marine corps has approved the most expensive weapons system ever for limited combat operations. They have given the goahead to the f 35 fighter. The plant has a number of shortcomings including its software and delays involving the weight, propulsion system and reliability. That wing part that washed ashore on a French Island in the indian ocean is on its way to france. Investigators will try to determine if its from the Malaysian Air flights that disappeared in march of 2014. From a boeinges 777, the same type of plane that vanished. California ordered a mandatory cut back in water usage last month and people there did better than expected. Water use in california fell 27 in june, beating the statewide. 5 reduction ordered by jerry brown 25 reduction ordered by jerry brown. Those are your top stories. It is official, the 2022 Winter Olympics will be held in beijing. China beat out kazakhstan to host the games. For other countries have been in the running but they all dropped out ahead of todays vote. The prestige of hosting the olympics, is it fading . No one wants to host the olympics . Hes all three countries dropping off for economic reasons. This is something that is constantly plagued 100 of best modernames Olympic Games have gone over budget. This becomes something that is not as appetizing as pimm hence the winning bid from china because they dont give people a say as to how their money will be spent. It was fascinating to look at the two proposals. Takenblic Opinion Survey in china and cause extent. Well over 90 of the population saying they were in favor of the games. It was a pretty close call. The budget that each country proposed, neck and neck pretty much. What the story does mattel is how that does not tell is how much these countries will invest. Pimm you noted earlier that boston and the mayor of boston said im not approving anything if its going to mean we are on the hook for more money. I was mentioning this Public Opinion polls. When they were taken in boston, they would never get over 40 . There is now this sense that its going to be something that will be a huge cash taxpayers will be on the hook for this. Especially democratic countries, that is less and less appealing. Pimm the political differences are real as opposed to just being superficial in this case. Tell us about what it takes to put these games on. Why do they cost so much . It will cost 30 million to put a bid together. Each country is required to propose how they will build these hotel rooms. 25,000 hotel rooms. Pimm wasnt that one of the reasons why the Committee Said they did not choose kazakhstan because they had never held something this big before . Exactly. Beijing, they hosted the summer games 2008. That required them to meet these levels before. Compare the two countries cause extent was going to require a lot more private investment this context on kazakhstan was going to require a lot more private investment. If you were to calculate the private investment, it would be well over 51 billion. They said to me yesterday, to make up that kind of money, you would have to well over its not something you will make back pretty easily. Pimm this is not done as a commercial enterprise. This is to enhance the reputation of whichever country ends upholding the Olympic Games. The most successful one in recent memory is barcelona, a city that incorporated the olympics into the general plan to revitalize the waterfront there, improved infrastructure in the city. The olympics became a platform for them to advertise to the world. It doesnt work as an advertising platform simply. Pimm this is 2022. 2024 is the summer games. Looks as though los angeles will be the city the mayor is very prohaving deal of picks. Olympics. The thank you very much. Still ahead, Kentucky Fried Chicken is celebrating its 60th anniversary. To commemorate the event, a bucket of chicken that can take photographs. Details ahead. Pimm is the bloomberg market day. Kentucky Fried Chicken has been selling chicken for 60 years. To mark six decades of Fried Chicken, the company is rolling out a memories bucket. Not only to hold your delicious chicken, but it doubles as a bluetooth photo printer that connect to your phone to wirelessly print photographs. Kinsey says it will beginning a few of these buckets away. Kentucky Fried Chicken says it will be giving a few of these buckets away. Scarlet im struck by the gimmick of it. I cant member the last time i ordered a bucket of kfc chicken. Pimm this is why they want you to do this. Go for the bucket of chicken so you get the printer. Scarlet social media has minutes of that we all take pictures of what we you constantly. Maybe there are not enough pictures of people eating kfc. This is one way to make sure people post their pictures. Pimm it also speaks to the low cost of technology that you are able to give this away and incorporate it into a disposable product. Scarlett you wonder how many photos it will print before it falls apart. Pimm as long as it holds the chicken, most wont worry about it. , this willpizza hut be interesting to see whether they are able to use this and other types of promotions. Whether it comes in a pizza box or any other kind of container. This particular imagine the ability to use this to promote the brand online. Scarlett absolutely. What they are printing out his physical photographs. Pimm im a little oldfashioned. , they have not disclosed how many they will make. Scarlett it is a limited edition, limited release. There have been previous tech giveaways in the past by kfc. Chickenn raffled off a themed keyboard. Pimm they substituted a keyboard theret they put it in , yeah. The marketing people clearly have some time on their hands and have been thinking outside the box. Pimm or outside the bucket. I cannot resist. The initial thing that set kfc apart was the fryer. Result, its interesting that the technology here is also cutting edge. Scarlet not really. This year, they launched a new kfc app with a live colonel sanders. Darrell hammond. You know a lot of those details. Well done. Its time for todays options insight. Its good to julie hyman. Julie lets take a quick look at how the major averages are performing right now. At the highs of the session such as they are with the nasdaq the best performer of the day in terms of major averages. People looking at the employment cost index showing anemic wage growth. The earnings reports joining me is kevin kelly, chief Investment Officer at recon capital partners. Earlier in the week, there was an interesting story on buy rate. Com about the Options Strategy coming back into vote. Vogue. Kevin you own a stock or an index and then sell it, call against it. You buy the stock and write an option on top of it. Time thead a tough last couple of years. It has gone up significantly. The market had that 30 plus years julie less stock differentiation with everything going up together. Now, u. S. And divergence come back into the market. You see divergence coming back into the market. Kevin the market has begun to normalize. Energy is not doing so well. You may want to write on top of that. The article focused on the s p 500 index. Etf withthe pbp an option on top of the s p 500. 100 thatalso a nasdaq overlays the call option on top of that. If you want to beat tech and health care, the ticker is qylv. You happen to be talking to the Portfolio Manager of that. Julie no wonder. S p one is up kevin that is a price return, not a total return. If you look at the distribution between 15 and . 17 every month, these are Cost Effective measures to do in options of late. Options overlay. They write index options, which expire monthly, but they are european. Whato what exactly does it do for you . Kevin generates income and lowers volatility. It reduces volatility by a third of the index. The outperform in flat and slightly bearish markets and slightly bullish markets. More volatile markets. When there is a stock divergence, these are great. Pbp is up 4 for the year. The s p is flat. You can generate income and stabilize. Julie lets get to one specific stock. Tesla is coming out after the close next wednesday. What is your strategy echo kevin weve seen a lot of these look atyer names facebook, amazon, wild moves and people have been caught sideways. Options can be used to Risk Management or yield enhancement. Want to protect yourself on this in case there is a big move. You can use weekly option to protect your portfolio. Put and sell the 245 below it. It will cost you 6. 65. It will have a three to one payoff. That will help you out and that can buffer you during earnings. That is the good part about options. You can risk manager your portfolio. Headlinesa lot of going into facebooks earnings and they disappointed people. This is a way to do Something Like that. Julie what if the stock goes up . Kevin you will lose your 6. 65. You own the stock. A you dont want to short it. Its expensive tomorrow and just buy a put. This is a spread, it lowers your cost. You are bearish, you can put this trade on and its less expensive than borrowing the stock. Julie we have some breaking news. Thank you so much, kevin kelly. This is news on greece. The greek Financial Markets will be reopening on monday. That is what the Stock Exchange operator in athens is telling us. The greek Financial Markets will be reopening this coming monday. More details when we come back. Pi pimm the day. Scarlet welcome to the bloomberg market day. Pimm soul cycle starts peddling to an initial public offering. Carlet Mission Impossible rocha nation hitting theaters today. We will find out if tom cruise still has star power 20 years after first hitting this green screen in the first Mission Impossible. Good afternoon. Im pimm fox. Im scarlet fu. Lets get a look at the markets on the final trading day of july. You have gains across the three major indexes. We had some mixed Economic Data this morning. Notably,