The dow jones down nearly a full percent, the nasdaq down. 75 . The s p 500 is rebounding from session lows but we are still in the red. 3 , and lets move on to Oil Commodities getting hammered. Brent crude is slipping below 50 a barrel for the First Time Since january. There is concern that iran will increase supplies and the slowdown in chinese growth. 13. 66 for the last month. Nymex crude is lower on this monday. A quick check of gold gold trading your a fiveyear low. Goldman sachs says prices could drop a low of thousand dollars an ounce. Ride down forlong oil and gold. Checking on how the treasury i want toe trading see yields moving in the same direction. The two year yield has been slowly going up that gap. Many investors and traders believe we are going to see this Interest Rate rise in september. In the currency markets, watch the Commodity Currencies hitting the worst year, hitting the aussie dollar and new zealand dollar. Usurping the also earnings power of companies as we have seen them report. A look at some of the top stories this hour president obama stepping up his fight against global warming, but his plan is sure to cause plenty of heat. Will proposeation a plan to reduce emissions from u. S. Power plants by nearly one third within 15 years. The u. S. Accounts for about 1 7 of the worlds admission and about half of that is from plants releasing carbon in the air. A fight in congress is expected. Allh mcconnell is telling 50 governors not to obey the new rules. You can watch the president s announcement live here at 2 15 eastern time. And it is a guilty verdict for the person for the first of breaking a benchmark Interest Rate. He was a ubs group trader. The panel the liberated a week and concluded hes came with other traders to fix libor. Mark a major reinsurer turns down one takeover bid and accepts another. A 6. 9e agreeing to billion deal with that italian company. That breaks up a merger plan they had reached with Access Capital holdings. The Investment Company is looking to diversify outside of manufacturing. Deep trouble the in the coal industry Alpha Natural Resources filing for bankruptcy. The company is being hurt i plunging coal prices and the increasing use of natural gas. It is the industrys worst slump in decades. U. S. Construction spending increased in june by the smallest amount in five months. Just. 1 and below estimates. Construction spending advanced to a seasonally adjusted annual rate just above a trillion dollars. Thats the best in seven years. American households kept spending in june. Purchasescrease in followed in advance of. 7 increase in may. Incomes climbed for a third month. Heinekenes are up at despite increased competition and pressures in the beer business. The thirdlargest rumor posted results that Beat Estimates with top 10sing two million. Another sales plunge for sears. The retailer run by Eddie Lampert says sales slumped of6 , its second doubledigit declines. The good news is sears expects its fourth loss of straight quarter of earnings improvement on that basis. Betty an 18yearold american is making a splash and could be an olympic star next year. She smashed her own record in the freestyle during a meet today in russia. For the are prepping 2016 summer games in brazil. Thats a look at our top stories this hour. Mark coming up, the founder of big Point Exchange is arrested , suspected of stealing at least a Million Dollars. Can bitcoin shake its underworld image . Betty and a massive selloff in greece as stocks open for the first time in five weeks. Most in decades, showing the crisis is far from over. And were midway through the earnings season with nearly 75 of results coming in above average. This week, we will hear from sprint, tesla and disney. Mark but there are strong headwinds facing the companies. To help us navigate the road ahead is a chief economist from Morgan Stanley. Welcome. One of those headwinds is rising Interest Rates. What is the terrain going to look like when the fed decides to move . Guest i dont know if it is a headwind for equity markets. Maybe the market could rally. That could clear the air on the overhang people have. The good for earnings, Financial Sector and other things. History dictates the market does pretty well and its only when you go multiple times that people fear a slowdown. I am pretty optimistic about equities here. Betty one analyst said this guest a 5. 3 unemployment rate. If they think we need zero rate policy, they are signaling the economy is more broken than we had then perhaps well think it is, and thats not a good and. I want to see the fed move in set timber and i think it will have to lift the market as they indicate a greater reason for optimism. Guest our view is that you have a slow growth environment and slow retrenchment from the fed. Thats probably a good crop for risktaking. E like u. S. Equities we have discussed the fact that earnings are coming up and the u. S. Economy will be better in the second half of the year than the first half. I sell if the economy is too low and sentiment is not optimistic . We like the u. S. Stock market and we would buy it right now. Mark are investors discovering the power of earnings . Guest i dont want to get carried away we could be about 4 off Earnings Growth and a 2 buy back. It is an 8 less or minus total return environment and that looks a lot better than other things, whether it is government bonds or riskier regions of the world. Energy, i like financials, i like discretionary. There are a lot of places where the estimates could be too low. Consumer discretionary stocks have been the secondbest performance this year behind health care. There was a great bloomberg story a few weeks ago saying that increasingly it looks like the market has gained when we see a rally and is concentrated in these two sectors. Mike that be a warning sign we are peaking in equities . Guest i dont think you can show thats a predictor of subsequent market return. I think health care is an area that is crowded. It was our biggest overweight for four years. We went to neutral and im concerned about some of the roll ups you saw, a big rotation out yellen madees when late cycle comments. Discretionary is a little different. You have so many different from different parts from auto parts to media, so it is harder to make a broad statement. U. S. Consumer has conditions that are improving and i want exposure to parts of the market where the numbers can come up. News one have breaking the eu. I want to get to julie hyman at the breaking news desk. Julie a revision to the outlook of the European Union Standard Poors revising the outlook to negative rum stable. Im trying to look through this statement. It looks like there is some discussion about race, but im going through true going through to try to figure out the exact rationale. The Macro Economic outlook for the european, middle east, and african regions continues to improve despite the turmoil and uncertainty sparked by the crisis in greece. Im going to continue to go through and figure out what is behind the revision of this outlook that the headline is the european outlook is being revised to negative from stable. Mark julie, thank you. The chief u. S. Strategist from Morgan Stanley is kind enough to stay with us through the breaking news. What is your reaction . Guest i dont think ratings agencies have painted themselves in glory for proactively making statements. The u. S. Equity market does not have the issues that you see in europe and should trade at a premium for that region. I dont think its anything surprising that there are concerns about the path in europe. I dont know why that is breaking news, to be honest. Betty are the markets becoming more susceptible to news overseas, in europe and china wereas maybe a few years ago were on such a strong momentum that if something came out of china, we would not he pushed them told by these headlines . Guest there are real risks. Earnings revenues come from around the world and the biggest risk to investing in the u. S. Stock market is a slowdown in the u. S. Economy. If we got a bad jobs report and a fed that active, that would be bearish. China is tricky to wrap your arms around. We have a huge presence in that country and there are people on both sides of the debate. Some people say the negative news is plateauing and others are more worried. I thinkicky to call and you see the cracks in u. S. Companies that have exposure to china in the industrial sector. You want to avoid industrials that have high china exposure. Hand, on the other people are more optimistic because you have this cocktail of the currency that should help , the quantitative easing and that are pretty low versus history. My view is the u. S. Trades at a premium to europe and that is in line with the longterm average. Right now, i would want to pay a higher premium than normal so i dont have to worry about what is happening in greece or whatever problems could exist. Aboutwe have to talk puerto rico because an agency there is scheduled to default today. Will any reverberations be felt here . Equities,ocus on u. S. So im going to say no to that. I think there are a lot of reverberations, but im focused on corporate earnings and will people pay a lower margin for corporate earnings, i dont think so. U. S. Strategist at Morgan Stanley. Thank you. Still ahead, a rough day for tech stops. Betty apple taking a hit and twitter has no signs of stopping. Their plunge is next. Betty welcome back to the bloomberg market day. Mark lets go straight to julie hyman with a look at the markets right now. We will be focusing just a bit on tech. Julie technology is one of the groups where we are seeing some pain today. Their near the lows of the session and we have a triple digit drop on the Dow Jones Industrial average. The s p and nasdaq have gone more deeply into the red. It appears to be sparked by accelerated selling and commodities which are dragging down the major averages. But we have some Important Technology movers to mention. Ne of them is twitter the stock has been sliding since it came out with its earnings last week, particularly a forecast that disappointed investors. Dorsey,rim ceo, jack saying its going to take time to gain some traction and new products have not been attracting users at a rate you would like. Declined have been accelerating with the stock down by 6. 5 . Take a look at twitter since its ipo. Not only do we see that six point 5 drop, its at its lowest since its ipo. Right now, its holding above the ipo price that it has been a rocky couple of years for twitter after the initial euphoria after the stock became public. Lets talk about apple while we are talking about tech that has been in the news. This stock also accelerating in terms of declines, down nearly 3 . What is notable is the technical level that it has breached the 200 day moving average. Apple still up about 7 on the year but it has traded sideways over the past several months and has gone below the 200 day moving average. No real news driving the selling, just a general ennui. Betty feels like a monday today. An august monday. Mark lets get a look at some of the stories crossing the terminal at this hour. The wing part found on a Remote Island is being tested in france. Investigators are trying to determine if it is from the Malaysian Airlines jet that vanished in 2014. They have proven that it is from a boeing triple seven and mh 370 is the only missing plane of that type. Fire officials in Northern California are calling for thousands of evacuations. Sides tripled and tripled in size over the weekend. More than 9000 firefighters are battling 21 major fires across the state. Wildfires are also burning in washington and oregon as the west coast indoors drought and summer heat. The latest installment of the Mission Impossible conquered the box office. It gained 56 million over the weekend for paramount, thats the second best opening for the. 0yearold series vacation stumbled out of the gate. The film cost warner bros. 30 million to make. Is the demise of those raunchy comedies. Aboutsay what you want tom cruise he has some staying power. Hes in his 50s. Betty he doesnt look a day over 25. Coming up on the bloomberg market day, he was one of the kingpins in the early days of the coin. Been arrested in japan accuse of a massive fraud. That story is next. Atty last year, bitcoin was egg investment area for silicon down over but it is 60 over the last few months. But an arrest in japan of a man accused of falsifying financial records to keep at least a Million Dollars in bitcoins for himself that is him and the white hat being led away. Betty what a character. Say nothingto has been put in stone on this man. That the company collapsed in february but this is the image you think of when you think of what has gone on in the bitcoin industry this sort of seedy underworld of fraudsters and scammers and shady people. He suggested the bitcoin was stolen by hacking. Lets bring in cory johnson who joins us from san francisco. What are we to make of what happened this weekend on the charges and counter charges that seem to be flying about in this case . Cory betty is right in that when we think of that coin, we think of these knuckleheads. We think of these guys who are trading fantasy Trading Cards and turning that into the giant exchange. 80 of all bitcoin exchanges happened on that platform until better platforms came along and more credible platforms came along. Then this disaster where 850,000 bitcoins disappeared overnight. Months later, they say they found 200,000 of them and now who are arrest of the man ran this platform, charges he stole a Million Dollars drum someone and transfer that money into his account. I think we will look back on that as the early days of coin and that this might be the moment where we look back and say these were the days of the knuckleheads and they and that in 2015. But nothing was bigger in Silicon Valley than investing in bitcoin technology. Betty it might be a bunch of knuckleheads, but a bunch of money went into these knucklehead exchanges. How much are the vcs going to hurt from this . Cory i think its just the opposite. I think the money that has gone in in the last years going into professional ideas and the companies that come out of that era are going to be businesses that will have a greater future because they will run like his misses, not like exchanges to trade fantasy card games. Going to start today. Mark thank you so much. Betty i am signing off on that note. Mark a bloodbath in athens today greek stocks got hammered as the exchange reopened. Details, next. 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. This is a great place to work. Not because they have yoga meetings and a juice bar. Because theyre getting comcast business internet. Comcast business offers convenient installation appointments that work around your schedule. And it takes done. About an hour. Get reliable internet thats up to five times faster than dsl from the phone company. Call 8005016000 to switch today. Perks are nice. But the best thing you can give your business is comcast business. Comcast business. Built for business. To theelcome back bloomberg market day. Im mark crumpton. Lets go straight to your top headlines at this hour. Secretary of state john kerry is meeting gulf foreign minister today trying to provide assurances the u. S. Commitment to the region is not wavering after last months landmark Nuclear Agreement with iran. Clear thekerry its nations agree the partnership we share is indispensable to the security of this region. Mark secretary kerry is in qatar after a trip to egypt after he restarted security talks after six years. Officials in iran are going on a shopping spree for airplanes. 300goal is to buy about airplanes to replace the countrys aging fleet. The nuclear deal with the west another power slips a ban preventing such purchases. The planes will be purchased in equal numbers from boeing and airbus. While president ial hopefuls are not opposed to 50 campaign contributions, they prefer those of the sevenfigure variety. According to the associated dress, a tiny group of millionaires and billionaires capable of such donations is asserting itself in campaign 2016. Nearly 60 donations of a Million Dollars more a count for about one third of the roughly 380 million raised so far in the campaign. Donors who gave at least 100,000 account for half of all donations so far to candidates president ial committees and the super pac that support them. Seeking as much selling 50lion by million shares come a targeting according 20 million to a regulatory filing that came out today. , the dutch maker of navigation devices is exploring options that could lead to a sale according to people familiar with the matter. While the dutch firm is speaking to possible advisors, there is no formal process underway. Tomtom may decide against pursuing a sale and a focus on investments. In the meantime, three german automakers are buying gnocchi upon digital map unit to get technology that could be the basis for self driving cars. Bmw, audi, and daimler will pay 3 billion and will each acquire an equal share of the unit. The deal is expected to close early next year. It supplies cars with in in dash maps. Colburn andome henry kravis in basis created a firm based on taking and controlling equity stakes in companies that crossroads. That he walked away from the firm following a that are struggle with his partners. Jerome died at his home in marthas vineyard. He was 90 years old. Stories. Your top coming up next half hour, auto sales are having one hot summer. , and chrysler posted big gains as lower gas prices get more people to the dealerships. President obama is set to unveil new proposals to fight Climate Change, calling them the biggest and most important steps ever taken to fight the issue. We will bring you his address coming up in 45 minutes. In greece, the stock market in athens open for the first time in five weeks and shares plunged the most in decades. Hans nichols is at the exchange and filed this report. at the close of the Athens Stock Exchange, after the stocks were down some 23 in aggregate, they creeped up a little, ending the day at 16 in negative territory. The banks losses led to negative declines. Looking to tuesday, the ceo of the Athens Exchange said we could see a single stock under into positive territory, if not tuesday, then later in the week. Still, there needs to be some restrictions as a good have distorted some information. Athensans nichols at the stock exchange. Lets get more now on the future of the greek economy. Join me is the former u. S. Ambassador to greece. Hes just act from the country. Thank you for your time today. The report hans nichols just told us about, the reopening of the Athens Stock Exchange and the beating stocks took, that was not unexpected, was it . Guest not at all. When you have the Exchange Closed for this many weeks, theres a lot of pent up eagerness to get money out of the market. I suspect once the markets are open at a regular basis, things will even out. Mark i mentioned that you recently returned from greece. You got back yesterday and spoke to a lot of people on the ground. What did they tell you about how their life is right now in greece . Guest it varies a lot. Those who are using plastic and credit cards and whose earnings are not linked to bank accounts, that is they are linked to credit cards, they are coping ok. People largely older more used to using cash. They are hurting because the credit controls are severely limiting the amount you can withdraw. Also Business People i have a close friend who imports a lot and hes hurting because there are controls on transfers of money overseas. Some people are surviving quite well, others are hurting. The Tourism Industry is holding up quite well. Mark the Prime Minister is having a tough time within his party. There is talk he may be forced to call new elections. Human sense of how his party has handled this and what is in giver them possibly us a sense of how his party has handled this. There could be new elections in october and he has use this against the dissidents in his party, saying if we go to new elections, you might not be on the ticket. In the polls, hes running very strong. In fact i think hes running stronger than the results of the last elections. Thats because a lot of greeks he went for agh referendum and reversed himself once the referendum passed, a lot of greeks feel he is standing up for the little guy and so he retains his popularity. More traditional parties are still struggling. There could be an election and you could have the party swept into power again according to polls and they might not have to have a coalition partner. It seems that things in greece have calm down significantly from where they were, but negotiators from the European Union and International Monetary fund want early cuts set off by the government and stricter conditions for the payment program. This debt crisis is far from over. Thats right. Negotiations have restarted and will be difficult and drawn out. The basic issues separating the anyonere still there and who expects this is going to go easy doesnt know what they are talking about. This is going to be a long, drawn out process and each side will be quite tenacious. What is interesting is the imf insists there be some movement on the tremendously large debt burden. Be remiss if i did not ask about the refugee crisis. Thousands of refugees from syria and other countries are flowing into greece. It is almost unfair because greece has to deal with a crisis of this magnitude. How is the government handling that . They are trying to handle it as best as they can but when you have refugees coming from the middle east, its overwhelming and the greeks are desperate for an eu policy that would give greater assistance, so they are coping as best they can but it is way too much for a small country like greece to deal with. The ceo of the irrational executive service corps. Its always a privilege. Thank you for your time. On the bloomberg market bay, california wants to change the u. S. Auto industry as we know it. We will explain how the golden state is having a big influence on reducing pollution and why some Car Companies are not happy about it. Mark welcome back to the bloomberg market day. Lets get straight to a check on the markets with julie hyman. Good afternoon. Neck we have had a celebration of selling with stocks pretty much near the lows of the session. A lot of commodity pain being and an the averages relatively ugly start to the month. Take a look at the various sectors on the move. Energy and materials are at the bottom of this list of poor performers. That is ready much what we saw for the month of july. These trends are continuing unabated. Both wti and brent traded here in london, brent falling below 50 of errol. At 45 45. 30 and extending their losses and remaining relatively poor. Supporting the prices, so we continue to see those declines. The declines are helping one group, and that is the airlines. We see Airline Stocks gaining in as we continue to see this selloff in oil prices. Elsewhere in commodities, we see copper lower and this is also an extension of decline. China is an important market for copper. Stock or back to the get, we see copper and metal producers pull back with aluminum pulling back. Commodities reducer commodities producers a big weight on the averages. Seen aetro china has surge in volatility in shanghai is the government says it is ready to prop up the stock market once again. We have this report from hong kong. Reporter how much money is china pouring into its markets . Take a look at petro china shares. They could care less about the 11 billionl it in oil reserves. Topped 95 of Companies Trading in the russell 2000 and the. Its another sign how state intervention is leading to price distortions in the mainland market. On stock moved at least 4 half the trading days in july, including a record 9. 6 plunge last monday. Mark california has a plan to end the Auto Industry as we know it. Boardate resources chairman says she wants all cars to be electric. The chairman of Fiat Chrysler says his company is losing money fiatery Battery Powered 500 east that he sells. He says he only produces the vehicle because state rules require it. Julie this is about mary nichols and has some authority behind her. Sergiofacing off against marchionne who says he loses money every time he sells a 500 e. He said he wasnt required to do it, he would not sell vehicles. He said he had to sell the government had to sell vehicles he would be there for a government handout. This were to become a pass, can we see this in court or is this a state regulation . Scarlet its a proposal and it is what she wants to do. The target is 100 electric vehicles, new vehicles to be sold in 2030 to be almost zero emissions. That is a pretty stringent goals. Even now its goals are pretty stringent in california. Going to be how each state deals with credits and a lot of automakers want more credits before they introduce more plugin hybrids. Is differentonne among automaker ceos in that he is complaining in public. Other ceos have not. Brownthe governor jerry said a target in 2030 of it 80 reduction in Greenhouse Gas emissions. The argument against that is its not just going to be cars producing these omissions. When you are talking about automakers, heads of auto , i believe they are going to fight tooth and nail on this because this is going to harm their business. Scarlet this is going to harm their business and they are going to have to make huge adjustments. Jerry brown is a democrat and has taken this position that california has an obligation to be a leader in this realm, not just because of it size and car culture, but because the voters are pushing the government to address Climate Change in a way that perhaps people in other states have not done. California has been in the vanguard, leading the way in many of these social issues facing the country. Speaking of Climate Change, the president of the United States will be speaking about 20 minutes. Scarlet were looking forward to that speech. Mark halperin will help us cover that. Well also speak with the ceo of an electric utility that relies on natural gas and hear what he has to say about the president proposal. Sok still ahead, we are picking with cars we are sticking with cars. Sales zoomed in for the big three automakers and Japanese Companies posted big gains as well. That story is next. Mark welcome back to the bloomberg market day. Whats get straight to headlines a guilty verdict and 14 year sentence for the first person tried on rigging a benchmark Interest Rate. A jury in london convicted tom hayes on eight counts of conspiracy. Ubs a former citigroup and group trader. A panel to liberated a week before deliberating the verdict, concluding hes with other traders to fix libor. Police in tennessee are searching for the suspect in a Fatal Shooting of a memphis officer. The 29yearold man is facing a murder charge in the death of 33yearold sean bolton. The officer was shot several times saturday night after approaching a car where a small time marijuana deal was in progress. Three memphis officers have been fatally shot in the last four years. A t is planning to introduce bundle of tv and phone services, its first appeal to customers since its acquisition of direct tv. The deal will be available week after today and will include mobile phone services with unlimited talk and texting and unlimited exabytes of data for four lines. A japanese automaker is giving a big boost from an american hedge fund. Shares of suzuki jumped in tokyo on word that heard point is taking a stake in the company. The firm is run by billionaire daniel loeb who says suzukis prices could rise. Thats a look at the top stories this hour. Staying on the automakers big three automakers in the u. S. Are revved up gm, ford and chrysler up at least 5 . All three blew past estimates. So did nissan and honda. Lets take a closer look at what is driving sales. Matt moore joins me now. Did this come as a surprise . Toyota, who is expected to post a decline in sales posted a gain. Company were seeing gains. Big gains across the board. The f1 50 was a positive surprise. Items s and luxury what happened to this notion that americans, because they are watching their dollars might be downsizing mark might be downsizing . That is silly. Americans like giant trucks. The company came out with a gain of 4. 9 in total vehicles, but if you break it down and look at the vehicles that were selling the most, the f1 50 had a 13 gain in retail sales. This is the first time we see with the new truck does over the old truck. Meanwhile, sales of all cars at ford dropped 3. 9 . Because of lower gas prices, because they are mu because ,hey are more fuelefficient americans are choosing those rather than small cars. Summer discounts are helping to some extent, but they all seem to be holding on to some strong pricing power. Be noted that margins, although we dont get profit information in this quarter, margins have an holding up. ,s far as we saw from earnings General Motors and ford, because the stronger dollar is helping them by things cheaper overseas, they are able to get stronger margins here and in north america. The increases we are seeing on wall street and the equity market, can we link that with what we see in the Auto Industry . Sure aboutot so that. I would have to look deeper into the data, but this is a broad consumer action. People are buying cars across the income spectrum and because of number one, they have jobs and unemployment is so low and number two, gas prices are cheap and vehicles are much more economical than they were 10 years ago and, number three and most importantly, the average age of the car on the roads just gets older and older. We are looking at 11. 4 years as the average age of the vehicle on the road. At some point, you have to pull the trigger and buy a new car, especially if you have an 11yearold truck getting 13 miles a gallon. For 26 thousand dollars, you get a new f1 50 and get 25 miles a gallon. We saw you on the road with that car last week the suv. Matt the new volvo. We have been waiting for that for a long time and i really liked it. Mark thank you so much. Coming up in the next hour of the bloomberg market day, president obama new regulations on Climate Change. That story is next. Straight to a look at the market. Stop kicking things off with losses. Trading volume lower than average. Slower than average. It is summer after all. The stock 600 rising the great day because of
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