Transcripts For BLOOMBERG Market Makers 20240622

What am i talking about . As you might expect, not a great deal of Market Reaction. This came out as expected across the board. The only big surprise was in manufacturing, 15,000 manufacturing jobs which is three times what was expected. It is a rounding error. The 215 even though thousand number was lower than what economists expected, the previous number was revise higher. It was a net increase of 14,000. Those looking for an Interest Rate increase in september probably got what they wanted. Erik the action has been in twoyear treasuries. Now,73 basis points right in excess thats where people are pricing in the september rate hike. The fed funds future shows a probability of about 60 that we will see a rate moved by the fed in september which is next month. They have their meeting on the 1516th. Probabilityied based on fed funds futures was almost zero in the middle of july. Scarlet so it depends on how much it moves. Erik its more or less as expected but healthy job growth helping to change the picture. Scarlet there is another jobs report before that next meeting so it might shift again. Erik and the Kansas City Fed meeting is in jackson hole. Scarlet lets move on. Erik lets look at whats making news the cbs chief executive les moonves lost 4. 5 million from his compensation. Ceos took a hit and the pay index shows they were among the 40 highestpaid executives last year. Apple is often blamed for killing the music business. It might be doing the same thing to the watch industry. I am skeptical but scarlet thats because you are wearing a watch. Erik june was the u. S. Worst month for watch sales partially because of the smart watch. Sales of traditional timepieces were 11 lower than last year. Saysnventor of the swatch the apple watch could bring on an ice age in the industry. The apple watch will be on sale in best buy today. Scarlet i am wearing a watch. Carl icahn is reporting an 8. 2 activist stake in shaneer energy. He wants to talk with the management and maybe ask for seats on the board. Channiere has lost about 8 this year. The first republican president ial debate revealed the party is a house divided. The top 10 candidates skirmish last night on fox tv. The host revealed a fault line. Whos there anyone on stage is unwilling tonight to pledge your support to the eventual nominee of the Republican Party and pledge to not run an independent campaign against a that person . We are looking for you to raise your hand now. Thats if you wont make that pledge tonight. Mr. Trump scarlet this was the first of 12 president ial the bates by the Republican National committee and cnn will air the next battle september 16 at the Reagan Library in california. Facebook says 7. 5 Million People engaged on their site. 5. 6 million interacted during the state of the union address. Those were the top stories. Erik coming up in the next may have their plans hindered to perform bankruptcy. And apple watch features an engraving of Vladimir Putins signature. Scarlet anyone who tuned into the debate last night new that it was the trump show and then everyone else. That isxhibition ending his exhibition is an helping jeb bush . That is coming up. Erik as we were saying, and 215,000 jobs were added. What does this mean for the fed plans to raise rates this year . Joining us now is brian westbury. Fairly boring jobs report. What economists were looking for. Is there anything to derail liftoff in september . The jobs numbers themselves were right in line with consensus. Its about the same thing we have seen over the past five or six years. Its what we call a plow horse economy. Its not a race horse. Its not a desperate. It is not a dead horse but it is slowly building. The Unemployment Rate is down to 5. 3 and has stay there for two months and is going to 5 . The number inside the report is the hours worked. The total number of hours that people work is up 2. 7 from one year ago. Pay is up 2. 1 . That means people have 4. 8 more wages and salary income right now than they did a year ago. That is a sign of a growing economy. Also a sign of more spending power for the consumer. If this economy is going to recover, it will be led i the consumer . Sure, we are already in a recovery. Recordsales are at a high and consumption and gdp is at a record high and jobs are at a record high. Its this steady growth and if the fed does not get ahead of it, they will eventually have an inflation problem. We cannot justify zero percentage Interest Rate credits. I think raising rates will cause the economy to accelerate a little bit. People will want to buy that car or buy that house before rates go higher. Us in theuld help Economic Growth department. Scarlet im looking at the u. S. Dollar which is getting a hit of a problem on the jobs report. If the dollar or the pound strengthens too much on an expected rate increase, does that derail growth and limit the central bank ability to raise Interest Rates . When i look back at the history of the United States and look when we had a strong currency, the 1990s for example, we grew very strongly. A strong currency in and of itself shows that our economy is doing well relative to others. It is not oneforone. Lots of times, strong growth and a strong currency go together. I think it shows more of the weakness we have an europe and other places around the world than it does a problem here in the United States. I want to show everyone what we were talking about earlier the likelihood of an Interest Rate increase. According to fed funds futures and investors are voting on a 58 possibility of increase in september. England said in a year would be the time. What does mark connie see that janet yellen doesnt . They are two different economies in two different places. I would not say they are looking at the exact same thing. They have different economies yellen must move slowly to normalize rates. You mentioned the twoyear isasury yield at. 73 which half a percent for one year and 1 for the second year. Put those together and you earn 1. 5 and divided by two and you. 075 but rates will go up slowly. 50 basis points in the next year, 100 basis points a year after that. These are slow rate increases. I would argue that anybody that thinks that apple is not going to bring out the iphone seven if Interest Rates are 1 is not looking at the real world. It will not change the course of the economy if we go from zero to 1 . That business the kind of rate that will slow this economy down now. Erik one of the reasons could happen is apple brings out new products but they are priced the same way, just that much more powerful with each successive generation. If we are going to see inflationary pressures build, where will we see them . Thats a good question we are sitting in the 1. 52 range of inflation. I have expected inflation to pick up not a lot. I am not a hyperinflation person. Maybe 4 inflation. I have been looking at that the last couple of years. It has not happened. I keep taking that it will. We cannot print of this amount of money and have loans growing and have thear unimportant rate at 5. 3 without prices picking up a little bit. The newright, technology is keeping inflation down. Its an amazing economy we have today. You think about the apple iphone that we get for 99. In 1991, if you bought all the components, it would have cost you 3000. In some cases, 50,000 to buy the technology. That keeps inflation down. Productivity work. Scarlet thank you so much. Up, arch coal is under pressure and lenders are threatening to abort plans to cut costs and avoid the fate of industry peers. They may face bankruptcy. Scarlet good morning and welcome back to the bloomberg market day. Erik we saw the jobs number earlier at 200 15,000 in the Unemployment Rate at 5. 3 but it is not moving markets much. Individual stocks are moving though. Tomi let me take you coracon. Cover 2 3 of 1 . By it is getting its rating raise. Piper jaffray is going the opposite way. Its downgrading the stock two underweight from neutral with a 12 month target of 38. Yesterday, michael coors revealed it had good growth overseas in its International Markets as well as japan and in sixd to its best day months. Year to date, this stock has been down by about 42 . Coach has a new rating to talk about. Ubs raised its rating from neutral to a buy. Its 4. 5 which could have written influence by this. The 12 month target is 42 so we are 11 off of that. They did release earnings august 4 and it was better than analysts expected. . 31 per share versus . 29. Netflix also has a new rating. Pivotal raise the stock price to a record high of 175. We are not we are seeing a little bit of a negative, down 2 . This is its worst day in a while. Maybe the issue is it being too fast and too soon. These are Analyst Recommendations analysts say the highest number of sales should be happening now and especially in the past 10 months. Scarlet thank you so much. Lets get a look at some of our top stories a french search plane lifted off for a birds eye view of reunion island. Theyre looking for anymore do believe malaysian flight 370. French authorities have leased have launched a oneweek operation to scour the indian ocean have launched a oneweek operation to scour the Indian Ocean Island where a wing fragment was discovered nine days ago. It came from the missing boeing777 but other investigators are more cautious. More fallout from the killing of cecil the lion. Some african countries are criticizing a decision by delta a lot airlines and other carriers to ban the transport of trophies. They are disappointed delta and others will no longer accept these trophies. The media says the ban will hurt the economy and conservation relies on revenue from hunters. Do you have the correct time . Lots of things are controversial in north korea. They are getting their own time zone a week from tomorrow. The clocks will be moved back one half hour. This difference the company from its regional rivals, japan and south korea. Those are your top stories. Erik coal prices have been under pressure since 2008. Is 5 billion in debt and is hanging on by a thread. Scarlet lenders are hindering their plans to avoid bankruptcy. We have been following the story. What specifically are lenders objections . They are not objecting to the company reducing debt. They would like that. They say this is a plan that hurts us because you are bringing creditors into line with us. Junior creditors scarlet you allow them to move to the front of the line . The vendors say this is not allowed by the rules. These Coal Companies are trying to look for value. When you have different creditors jumping to the front, it upsets the whole structure. Erik if this falls apart, whos to blame . The lenders. The lenders have a case. They loaned money to arch coal and they want to be paid back in full and if arch coal finds itself in more favorable circumstances, that would be good for everybody. The lenders believe they stand to lose . Im wondering whether it is the advisors who came up with a plan that was overly aggressive. It might be a little shaky. Their Legal Advisor said we believe this is right and we can do this. Maybe it is sketchier on the documents but that will be the argument when it comes down to a judge. Is there a precedent for doing this . I think there are some. You have to go back to their nfmment of what they call provisions. Erik the bank caught in the middle is bank of america who is the agent and they threw off their hands and said they are out of here . They quit . Because they have liability on both sides. The company says you are the agent and we pay you and the anders say your our agent you have to represent us erik and we dont want you to. How much precedent is there for that . Most of the time, the agents go in and can sign off on things. When they get into these situations, many agents dont prefer to be involved. I dont want the liability so you have ones that will generally do this. Scarlet the goal for arch coal is to avoid bankruptcy. Does the Debt Exchange help them get away from that . Moot point. They try to restructure before bankruptcy and other companies and it did not work. I dont think everyone believes this will be the saving grace now or for a couple of months but eventually, you may have to see arch file to buy some time. Erik when we talk about the lenders, we are not talking about banks. We are talking about those investors. Oak tree is involved here. Istress guys see value in dont know what their play is. Maybe they are looking for equity or they think the company can survive. Its one time to be looking at coal if you are a distressed investor. Or equity investors. Scarlet thank you so much. Erik stock markets may be near record highs and credit spreads and may be near record lows but there. Scarlet some . Still just ahead, we know that video killed the radio star and apple killed the music business or critics say that. Another industry is blaming the tech company for its demise and we will explain when we come back. Scarlet u. S. Watch sales declined the most in seven years in june which is one of the first signs that the apple watch is eroding demand for traditional watches. You have watches but you are not wearing any. Erik my most recent watch was a swatch and the band broke and i have been lazy and i have not gone down to Grand Central station to get a replacement. Scarlet of all things, thats intriguing. There a good reason why i have not bought the watch is because its expensive. Scarlet you need to save up for it. Erik it has to be a reward if i buy it for myself and i havent done anything noteworthy to command that reward. Skeptical that this one months worth of data in watch sales is being blamed on the apple watch. There were people 11 apple watch but there is a reason the data has not been shared. The sales are probably not that great. The apple watch is not the iphone. Scarletiphone killed the blackb. I dont think the apple watch will kill the swatch. Impact on then lower mid tier of swiss watches. Scarlet i agree. Russia is doing what it can to jump start the apple watch that they have come up with the best use of modern technology and unnecessary opulence. Watcha limited edition were they pay tribute to vladimir putin. Erik that is his signature. Scarlet its hilarious. That could be an option for you. Erik probably not where im going. I will say goodbye. Scarlet we will be back. Lets get to this mornings top headlines. This used with the west turning into a food fight. The russian president ordered many foods destroyed. A leading democratic senator will not vote for the iran nuclear deal. Chuck schumer does not believe iran will keep its promise not to build atomic bombs. He revealed his decision on the internet. Eager to take a break from washington. He is leaving a day early. Plans call for an extended pursuit of the president s favorite leisure activity, golf. A daily show alumni showed up last night to help jon stewart say his goodbyes. Many people of so whose lives you have changed, thank you. Weeve your line is will be right back. We will be right back. A big bear hug there. Scarlet former colleagues paid a tribute to his 16 years of satire. He promised viewers he would not fade away. Stocks fear the reaper. Investors grow weary of cord cutting. Dres first album in six years is dropping today. You can only get it on apple music. Bill gross gives bloomberg his reaction to fridays jobs data. That and more coming up. The republican president ial debate. Donald trump lived up to his name. The problem this country has is being politically correct. By so been challenged many people. I do not have time for total political correctness. This country does not have time, either. Scarlet lets bring in mike bender who joins us from cleveland. Also, matt robbins. Let me start with you. There was the trump show and then there was everyone else. Combativeness effective . Melanie kelly matador. Towatch the candidates react his demeanor. It does not look like jeb bush reacted at all. Inwas kind of missing action. He was slow out of the gate. It took a while for him to catch his stride. By the time he started to hit his stride, it was late in the day. Republicans are talking about trump and what it means. There is a lot of talk about senator marco rubio. Positiven is getting reviews. Scott walker, who a lot of people thought got caught in the shuffle, particularly after hillary clinton. Tell us whether the format benefited him or hurt him. Teis statu nded on over the others. It did not work. There is so much diversity and chaos. It does notw serve him well to play the elder statesman. Scarlet mike bender, what would cleveland need to do to get back in peoples minds . Not Bush Campaign is this was not the biggest moment in this campaign. Raised 120m has million. Hey want to slog it out there are nine of these that these candidates have to survive. People do not think he has heard himself after the performance last night. There is a theory that trump helps bush. While we are talking about trump, we are not focusing on the rivalry between jeb bush and marco rubio, or what happened to ted cruz, or what scott walkers hairstyle look like last night. It is donald trump, planned parenthood, in the meantime, it gives other republicans time to organize and prepare for the next debate. I am glad you looked forward to the next debate. Broadly,ch spoke beyond a republican audience. I admire governor kasich. He is going to have a difficult time shoehorning himself into that mold. Scarlet is that why he would emphasize the past . Talking about his father as a mailman rather than giving a vision of the future . He wants to be the every man. It is going to be hard for him to go forward. Carly knocked it out of the park. It took second fiddle. What did the democrats learn . They are feeling good today. They have plenty of clips to use. He is becoming more conservative about abortion. Scarlet thank you for joining us today. Still ahead, a rough week for media stocks and the hedge funds the hedge funds that own them. Scarlet it is time to get you action around the world. The second day of losses for european stocks. Stocks down 5 of a percent. Was slightly off the estimate. It was Strong Enough that a rate rise from the fed is eminent. It has been Media Companies that have been the biggest downward drag. Moving lower in europe after we got a twoday selloff. Having an impact today. Benchmarks,t the losses across the board, particularly on the dax in germany. Athens Stock Exchange gaining, up. European stocks overall, heading for a weekly gain. This is just the first week it has been open since a fiveweek hiatus. Go, we want to show you the euro. You can see the impact. The drop has gone a little bit flat. That was the effect of the jobs data. I want to take you to the major averages. They are down now. They are down for the third day in a row. Right now, the s p 500 down a third of a percent. The nasdaq down by 4 10 of a percent. Lets go to our bloomberg terminal. Sectors in the red. In thed been higher green. Health care is down the most at 1 . Firms. Because biotech jobs report has turned into the negative. Numbersreading from the seems to have been good enough. Want to talk to you about a media come back the past few days. Viacom, time warner, and 21st century fox all up right now. Analysts are increasing their ratings. Scarlet the bank of japan maintained record stimulus measurements. One big story out of the region was the first major listing. Juliette saly was on the floor of the Stock Exchange at the open. The chairman and cfo at the company ringing the gong to start trading. Shares were often at that price. Raisingllion shares, the company and giving it market cap of 65. 1 billion hong kong dollars. Scarlet that was Juliette Saly reporting. Top stories this morning. Posting two videos suggesting he might be able to return to the pga championship next week. The number one player has not been on the links since he finished fourth in the u. S. Open. He ruptured ligaments while playing soccer with friends the first weekend of july. It forced tim to miss title defenses. You can call him professor buzz. The school announced aldrin will be a research professor. For some people in maine, every day is lobster day. Eptember 25 the resolution was introduced by maine senators. The new england conspiracy. Those are your top stories at this hour. As remy mentioned earlier, stocks are rebounding. Disappointing earnings from disney and viacom led to a selloff that left the gains this year. That is little changed. Joining us is michael regan. You have found media stocks were momentum driven. If you break the s p 500 into 24 groups, they were the best performing group. It is about a 33 annualized gain. This is a classic cell the winners market. He may have seen that begin with apple a few weeks ago. The biotech index down 4 . That was a brush fire brewing in the markets. On itew a lot of gasoline for those stocks. Disney coming out and saying the strong dollar is hurting their theme park. A shocking number. Espn subscribers down 4 . People are cutting the cord on cable and turning to the tv. Rnet for that started things off. Viacom and cbs came in. Scarlet the prospect of takeovers have been driving investors. Do we see the prospect of takeovers fading . Michael the big targets were cable companies. That is what helps laura hedge funds into this space. A lot of hedge funds getting hit hard because of that. It is hard to say whether how were buyers back of their own stock. Have these earnings been artificially pumped up by buybacks . Scarlet everyone just accepted it for so long. Easedoes it mean for the of sharing and buying shares . Michael it depends on how badly they want to hump them how bad they want to dump them. Have loaded up. Besthave been the performing group. Whether or not they rebound, it is a great question. Scarlet michael regan, thank you. He covers equity markets. Still ahead, dr. Dre releasing his word out about in three decades. Industry hasop changed. Welcome back. Dr. Dres firstout mum will be an apple exclusion first out bum in years will be an apple exclusive. Considered one of the richest hiphop artists, he has come a long way. Joining me now is 10 ortiz. Great to have you with us. Give us perspective. Fit into the genres history . Father is not usually a word we use to describe dr. Dre. We talk about geographic specificity with hiphop. The west coast, could be a founding father of west coast hiphop. Realize that drake got his start in about 1984 that dre got his start in about 1984. It was a style of hiphop one of the fathers of hiphop. Has been influential throughout the whole history of hiphop, especially the history of hiphop in the recording industry. Seen as royalty. Royalty means one of the figureheads, one of the people at the forefront. We are talking about his new outcome on itunes exclusively. Scarlet i want to pick up on that. Musice digitization of hurt or helped hiphop . Has helpedk it hiphop. There is music coming out in the mainstream. Sometimes that music feel it is not of high quality. It is possible to have a wider range of hiphop accessible to me. Whate a clearer picture of it can be. I do not think it has reached its potential as a music form. I challenge everyone to look the songs on the mainstream channels. Scarlet how about history . Dr. Dre was a Founding Member of nwa. You did some consulting work for the film. Largesthave the worlds archives documenting hiphop culture. I receive requests from film people, people making films, to do research for them. Someone contacted me about a year and a half ago to look for a photo to look for photographs which would help them design the sets. I was locating things in our archives for them. That was cool to be involved with the film. I am excited to see the film. Scarlet been ortiz ben ortiz joining us. Bill gross on todays jobs report. Scarlet it is 11 00 a. M. In new york and 8 00 a. M. In san francisco. Good dnight and john in pyongyang di. Pimm bill gross says a rate increases nearly a given good insight from the Janus Capital fund manager. Scarlet secrets in sin city. One of the hottest topics how to hack a car. Pimm it is a crude crude summer. The energy guru Stephen Short on the shot the oil market. Shock to the oil market. Scarlet good morning. Im scarlet fu. Pimm im pimm fox. We are 90 minutes into the trading day in new york. Let us look at how the markets are faring right now. Let us look at the u. S. Stocks. Stocks are falling down for tenths of a percent. Pointp 500 lowered by a there. The Dow Jones Industrial average down about a. 5 . 15,000 workers added to payroll. Scarlet a little bit of a wash in the and. We should mention that media stocks have recovered from their weeklong selloff, too. Looking out the dollar, the dollar grinning gaining ground the cause of the likelihood of a fed rate increase in september. It certainly looks like it has been reinforced following the latest jobs report and that people are working more hours as well. Pimm i want to look at the pound sterling versus the dollar. Pence. G a full scarlet the dollar gaining against the pending. It has been the strongest currency in europe. A sevenyear high against the euro. Scarlet yesterday, they threw some water on that. No change in the benchmark rate from the bank of england. I wanted to do this and just do a shout out to bloomberg currency and bloomberg launchpad Terminal Team because they were showing me this. It was a bloomberg brief. Let me see if we can pull this up. This is the intraday, but the fact of the matter is go ahead. It doesnt matter. This isn currency the cave may be an currency expressed in canadian currency. This goes up and the dollar is getting stronger. I would said they predicted this. There was a bloomberg brief predicting this happening, not only because of what is going on in the Energy Complex and canada, but also because of the labor report today. It is volatile, but a string of good news. Maybe a little selloff in the canadian dollar. Scarlet go shopping and canada. Everythings 30 off. Whats get to the top stories. The jobs report could put the fed on an Interest Rate path as soon as next month. The u. S. Report added 215,000 jobs in the month of july. The Unemployment Rate held steady at 5. 3 . The gains followed in advance of 231,000 in june. Princeton University Economist alan krueger admits that the recovery from the financial crisis was painfully slow. He says that america is outpacing the world. It takes much longer to recover from financial crises. There is not much surprise here. If you compare to other recoveries that we identified after the financial crisis, we are doing much better than other countries. Scarlet the jobs data will be must read material for policymakers to see if they can withstand a rate increase. There is one weakness. Matrix were slower than expected. Carl icahn is revealing a new a. 2s present state in the natural gas company. The wellknown activists investor believes that the top news shares are undervalued. He may also seek some more board seats. Shares of energy were down about 8 this year. Pimm a new discount website is reportedly getting a Cold Shoulder from retailers feared macys, amazon. Com, home depot, and others are complaining about jet. Com. Retailers say that jet is using links to their sites without permission. Companies are withdrawing their products and this is all according to the wall street journal. Apple, often blamed for killing the music business, might be doing the same for the watch business. Watch sales down. Apple be partly due to watches. Traditional timepieces are 11 lower in the same month than a year ago. The inventor of the swatch says that apples watches could bring an ice age to the 400yearold swiss timepiece injury. Industry. The apple watch will go on sale today at 100 best buy stores around the country. Those are your top headlines. Scarlet much more coming up in the next hour. Hackers dissent on las vegas for the annual devcon conference. Where they will have a chance to show off their skills hacking into everything from Kitchen Appliances to cars. Oil prices plunging to on track to close lower for a six consecutive week. When will consumers and drivers actually see savings from Lower Energy Prices . Scarlet a tough week for media stocks in a highly paid ceos. Find out how much les moonves and bob iger from disney lost this week. On paper. It does not happen until you actually make the trade. Scarlet all that and much more coming up on bloomberg market day. Pimm we turn to the Federal Reserve and bill gross. He told tom keene that a september rate increase is almost for sure. They are committed to the yearend. Whether it is 25 aces points, it is 25 ihope it hope. Thats the majority opinion at the moment. To theat will happen markets if they acted. Its the great industry mystery of it great economist like bread the long there is a Knowledge Base that you can work off of. Our audience cannot do that. What will be the Market Reaction when janet yellen and Stanley Fischer finally raise rates . Bill there has been some language. T the forward kurt assumes kurt assumes and im looking at the bloomberg page. Tom i like that. Bill it gives the active forward kurt for all countries. Fed ratears, the should be a 1. 5 to if we get there in 2017, there should be no Market Reaction. The forward into curve. I know that is a little bit complicated, but all it says is that a sickly investors expect funds to be at 1. 5 two years from now. Anything less is positive for the market. And more is negative. Totalre you managing for return or fighting for principle to grab the coupons you can get . How is bill gross managing daytoday given the backandforth that we see . . Bill at the moment, i am managing risk off. That is the dominant flavor of what im doing. Centuryfor over half a that investors have been used to finance base capital, which has always provided a near guarantee return. Bank bailing them out or simply through the Dynamic Movement of the capitalism. Now with Interest Rates so low, i think we have to question whether a positive carry produces positive returns going forward. Sense a deflationary world, around much of the globe in terms of Commodity Prices and currencies, the dramatic decline in emergingmarket currencies, or basically a Deflationary Force for the United States. If you sense that, it is a rather certainly not a positive for equities. Tom in the minutes that we have here and we will have you back for further perspective, the idea of the crashing of brazilian riau or what we see in mexico or what we see in deflation in europe has to filter over to Janet Yellens decision, doesnt it . Bill i hope so. They say it is number one, but hopefully its number four on the list. I hope it is a consideration because markets move dramatically and they have emerging markets and they have in developing markets 15 to 12 over years per date to time. That is a dramatic move and almost a bottle bubble in reverse and it has significant reactions in the u. S. You can call deflation if you will, but we are moving closer to that point. Pimm that was bill gross on bloomberg surveillance radio today. Scarlet still ahead, we are going to vegas where hackers are demonstrating just how vulnerable are cyber defenses are, especially if you are on the road these days. Welcome back. Im scarlet fu. Pimm and i am pimm fox. Scarlet let us go straight to are looking at winners in the market even though broad averages are down. Ramy there are some winners. Nvidia is rallying 10 . This is the biggest maker of Computer Graphics chips. It says that sales this quarter could exceed demand. The estimate is 1. 18 billion for them. The average analyst say it could be about 1. 1 billion. That is according to data compiled by bloomberg. Right now, stocks are at their highest level in the past three months. Also winning, lions gate films. They are up by 5 . The company is known by the divergent series happening over the past few years. Past the earnings for earnings,12 but came out . 30 per share. It is possible that m a and buybacks and it has been talking with amazon for potential future collaborations. I want to to go to zynga. It is up 3. 3 . Enue rose three point sent 3 and beat analysts expectation of 1. 6 million there. Benchmark is raising its price toget from what is now 2. 93 2. 53. It is also raising stock from a hold to a buy. Is not the only analyst that is doing that. Quicklyo take you very to my bloomberg terminal and you can see that in the past year this is the green. The green is actually the number of buys. It is the highest in the past year by nearly 24 . Very good news for the stock. Scarlet thank you so much. Pimm well done. Thes take a look at some of top headlines crossing bloomberg right now. Instead of helping to solve the malaysia airliner mystery, discovery of the plane part is actually adding to the confusion. Malaysia says that more debris from mh 370 has floated to the reunion island in the indian ocean where the wind section was originally found. But french officials dispute this. Tests have still not prove that the wing flap is from that jail jet liner, which vanished last year. Vladimir putins feud with the west has turned into a food fight. The russian president ordered tons of cheese and produce destroyed. Fromnned many food imports the United States and europe last year after russia was sanctioned for seizing crimea. And it is a little r r time for president obama and his family. They will of on Marthas Vineyard by this evening. They are planning 17 days in the sun and sand. For the president , lots of golf. It is the first families six visit to the vineyard since 2009. And those are your top headlines. And cyberackers Security Experts dissenting on las vegas this week for death con. A is an annual event and chance for hackers to show off how they have been able to detect and exploit security weaknesses from everything to Kitchen Appliances to security satellites. Emily chang is that the conference. Given all the hoopla around the hacking of a car, there is a lot of talk about car hacking, isnt there . Cary lots of talk about hacking. A Jeep Cherokee i couple of weeks ago was hacked remotely. Andcould put it in reverse cut the engine. It was a huge headache for chrysler. It had to recall 1. 4 million usb and sent an update by a stick. Also, tesla one of the most anticipated presentations today. Two researchers worked for two years to find all the vulnerabilities that they could in a tesla model s. They managed to break and if they connected a laptop to the car, they could put a trojan on the network and then remotely cut the engine of that tesla. They found six different vulnerabilities. Tesla has already released a patch for those vulnerabilities. The bottom line is here that this is the biggest conference of hackers in the world. Tens of thousands of hackers all in one place. Its exciting, but its also a little unsettling. On the more paranoid end of the spectrum, we have people who wont even use mobile phones. They are using burner phones or talking facetoface because they do not want to put personal data at risk. You have people using cash instead of credit cards and pen and paper. This is where they talk about the latest and greatest in Security Technology and vulnerability in that technology. It is a hugely important issue for businesses around the world, for governments around the world. Nower following right pentagon email systems was reportedly hacked in just the last couple of weeks. Russian spies supposedly behind that hack attack. They just keep coming, scarlet, and they do not seem to be slowing down. Pimm what about the actual business of Cyber Security . How big a business is there . How much money is at stake . Emily its an enormous business. According toknow, print coat, 1 billion has been invested in Security Companies just in the First Quarter of this year. Seven security unicorns that they call them. Companies that have valuations higher than a billion dollars. As far as car hacking technologies, we talked to a top security expert at cisco and they are very on top of this and something they are watching very closely. Take a listen to what he had to say. This is very much on ciscos radar. Once again, we are running a Research Group at cisco. It is something that we are looking at. Says something that i would we look at it from both sides , but obama brett side where we are analyzing systems out there as well on the partnering and manufacturing side, where we are talking to manufacturers on what they plan on doing. Emily Security Technology is so hot right now. This is an area where experts are saying we may see a lot of mna. We are talking to the seas scouting investments. There are questions on whether valuations are getting out of control. We spoke to the president of fire i who had this to say. Companies that are better funded in the past. A couple things will come out of that. You do see a little bit of a bubble in my opinion, both in the private sector, definitely in the private sector anyway. Emily a Cyber Security bubble. Could there be one . Thats something we will explore throughout the day. Scarlet emily chang, thank you so much. Looking forward to more from devcon in las vegas. Pimm how will all to Palo Alto Networks is one of them. Scarlet 15. 7 over the past month. Citrus up 9. 8 . How loud phone networks has been a big high flyer for a lot of these momentum driven traders. Pimm Cyber Security always in the news when there is alleged hacking that goes on and stealing of peoples identities. Scarlet coming up on bloomberg market day, why the hermit kingdom will be 30 minutes behind starting next week. We will discuss next. Aboutt right now, its 12 20 a. M. On saturday in north korea, just after midnight. That is about to change. Koreaon august 15, north will set its clocks back 30 minutes. The move signals a break from the japanese at the end of world war ii. This is all according to north koreas media. They were in the same time zone. Scarlet they do not want to be in the same time zone as to or south korea for that matter. Pimm south korea will still maintain the same time zone that exists in japan. I think this is highlights the capricious nature of what you can say, what time it is . Time zones were originally set in 24 segments because of the 24 hours with the line running from the north pole to the south pole. Scarlet not meant to be political. Pimm the idea being it was to help people understand where the trains were going to arrive. The idea was that multiple chime groans time zones made it difficult to show up for your trip. In this case as you just described, it is political. 30 minutes rather behind the clock in sale. Soul. Eoul. Scarlet its not just kim jongun. Did he goresident shop listed this because he wanted to put a different state on it. Pimm if you are anyone in i. T. Or in the land of computers in venezuela at that time, that was period. Difficult peior you had to the clock quickly. There are a lot of other areas of the world that have that 30 minute time zone. New delhi, the reason there is that it actually sits between two time zones. As a result scarlet the country is so big and covers the vast 1. 5 hours if you were to cut it up. They want to be one time zone. Pimm i think there are two time zones that take place in india, but they use one time for the whole country. China, we were just talking about china also is a time zones. Eight second meridian that they use. One time zone. Scarlet it kind of sucks if you are trying to reach someone in the shanghai province. Pimm yes, im sure everyone knows exactly what time it is. But it would be as if the time in new york is the same as the time in san francisco. Scarlet one reason i was reading that there was one time zone in india was because local railway system. In one to make sure everything was uniform to catch a train. Other countries with places of half hour times sri lanka, iran, afghanistan, parts of australia, and here in north america newfoundland. Didnt realize that. Newfoundland. This thing about the time zone is that theyre going to have to figure out how to coordinate all the clocks with south korea because there is a shared industrial zone. Scarlet off, yes. The pragmatic needs to be factored in as well. Pimm they have to figure out that and it all takes place august 15. If youre looking at your watch and wondering what time it is in north korea pimm the only person this affects is dennis robin, because he makes Dennis Rodman because he makes normal trips to north korea. Ramy i wonder what will happen happen toat will the airline schedules. Scarlet im going to take off. Im going to be in my own time zone. You have a lot coming up the next half hour. Pimm coming up, we will talk with Stephen Short and figure out when the price of oil will stabilize. That is next. Pimm welcome back to the bloomberg market day. Lets take a look at some of the latest headlines. The next leader of the Senate Democrats say he will not vote for the iran nuclear deal. Senator Chuck Schumer of new york is breaking with president obama on the issue. He does not rank iran will keep its promise not to build a nuclear weapon. He posted his decision on the web during the republican president ial debate. Is not saying how it will cope with 17 candidates during the next republican president ial debate. Fox news used the polls to select the candidates. That seven others into an earlier forum. Night revealed a fault line in the Republican Party. Is there anyone on stage can i see hands who was unwilling tonight to pledge your support to the eventual nominee of the Republican Party and pledge to not run an independent campaign against that person . Where looking for you to raise your hand now. Raise your hand if you wont make that pledge tonight . Mr. Tom. Next cnn is airing the debate on september 16 at the Reagan Library in california. There will be 10 more republican president ial debates following that. Bank of america is planning to sell 1. 2 billion of mostly delinquent home loans. The bank is selling five pools of nonperforming debt. These are loans that have been modified and some that have not defaulted. The move would extend a series of sales by lenders looking to cut their holdings and meet investor divans for a bad mortgages toshiba is being booted from the stock index is showcases the best japanese is backed by the government. There were two videos posted Rory Gallagher could return to the next tournament. He ruptured ligaments and his left ankle while he was playing soccer with friends in Northern Ireland during the first weekend of july. That forced him to miss title defenses at the british open and this week at the bridgestone invitational. Those are your top headlines. Markets are closing in europe so for the latest, lets go to london. Another day of decline stocks. Pean investors here have been very focused on the u. S. Jobs number feeling thats that a rate rise from the fed is imminent. Let me show you what has been the biggest drag on european stocks. It is Media Companies. This comes after that to date route in u. S. Media stocks that saw the biggest slump since 2008. European broadcasters are following suit. There are concerns that viewers could be turning more to online programming and that could affect advertising revenues. Happyadcasts down 10 but that is down today. Ton abbey. O had two of the biggest inclines kleins on the stoxx 600 today. This is the picture for the week. The stoxx 600 has been down today but it is up slightly on the week which is a very different picture to the athens Stock Exchange that has been gaining but its down about 15 this week. Its the first week back to trading after the fiveweek hiatus. The restrictions that have been put in place has made it easier on local traders to sell rather than buy stocks making a rebound difficult on the athens Stock Exchange. The stoxx is 600 this week has been routed by better them has been boosted by betterthanexpected earnings. This shows you that greek markets are getting more isolated than the rest of europe. Pimm thanks very much. Coming up on the bloomberg market day, a new luxury Norwegian Cruise Line is reeling in 1 vacation packages at the 100,000 price range. They sold out in one day and we will have details. Guild group eyes chairman also has another big job running the aol venture fund which aims to invest in women led digital startups. She will tell us which companies she is investing in now. Some good news for new parents at netflix and microsoft they are announcing generous parental leave policies this week. Find out if other companies will follow suit. Those stories and more coming up. First, lets talk about oil. Oil prices are on track for the sixth consecutive weekly drop. Wax tested west texas intermediate is holding and brent is trading below 50 per barrel which is the lowest since january. How low will oil prices go . Is joining mey now. If you happen to be short on oil right now, should you cover your shorts and take your profits . It depends on where you shorted. No, i think if youre short oil now, roll the dice. You will be paid off because i think we are headed lower even with oil below 45 per barrel. Perspective, its august 7 and we only have four more weeks left of summer driving. Than the peak gasoline season is over. Then we go into the fall where the fall turnaround, the maintenance season for refineries begins and they will scale back in their crude oil purchases. We are at the peak of the demand right now. Only going to fall the now and the end of the year. On the supply side, we are still producing. Regardless of what the oil bulls will tell you about the pullback and protection in production, we have not seen it and we will not see a significant pullback i believe through the end of this year. You put those two facts together, fall in demand and strong production, i think oil prices are headed below 40 per barrel in the latter half of this year. Pimm if oil prices are below 40 per barrel by the end of this year, give us the names of some winners and losers like refineries or integrated Oil Companies. The ones who will benefit and have been benefiting are the integrated Oil Companies that have significant downstream assets. They have refineries so your downstream mlts are excellent buys because even at 30 per low, the e ps will perform poorly and have been. We have not seen a pullback in prices of the margins are tremendous. We are looking at margins at six year highs. Refineries are literally have a license to print money. Integrated mlp or oil refinery is where you want to be on that side of the market. Pimm you mentioned margins and that leads me to gasoline prices. The american family, they spend 15,000 220,000 per year on gas. The National Average price of a gallon of gas is about 2. 5. What is the likelihood we will see much lower prices at the pump . In one months time, we are looking at at least a . 20 decrease in gasoline prices. Thats one we have our seasonal rollover from summer grade two winter grade gasoline. Gasoline has a higher vapor pressure and is easier to blend and its cheaper to blend and therefore gasoline prices are cheaper. Regardless even if i am incorrect in oil prices have , the consumer is looking at a good . 15 decline in Glass Ceiling prices by the end of september in gasoline prices by the end of september. I think we can ultimately end up in 30, we are looking at a significant decrease in price. The general rule of thumb is you get about two cents decrease in price for every one dollar decline in the price of a barrel of oil. Decrease another 10 into the mid30s, were looking at another . 25 on top of the . 20 we are already looking at because of the seasonal rollover. Potentially, we looking at a . 50 decrease in gas prices for the end of september going into october. Pimm lets say that gasoline and that being around two dollars per gallon by the end of the year the actor money that people are not spending on gasoline, will it go summer else . Yes, it will go to Big Government health care. I am saving 100 per week at the and 10025 per week per month but my Health Care Premium went up 160 per month so might for my family. Thats the big misnomer. People think this pullback at the pump is somehow good. Game becausesum those dollars are being spent elsewhere but they are not additional dollars. We just moving the pieces around on the chessboard. We are not creating Economic Growth. Concern is that we keep thinking that Lower Energy Prices are somehow good for the economy. That cannot be because energy rises before Commodity Prices in general dont drive Economic Growth. Economic growth drives Commodity Prices. We have the route in oil prices and the route in copper prices and aluminum. We look at the Industrial Metals and that is now trading at lowes not seen since the recession. We are looking at l weathers like caterpillar and industrial production, that stock is trading at a post Great Recession low. There are many telltales out there that this drop in oil prices and industrial metal prices is not good. Somethings not right in the global economy. That is a concern for all of us. Pimm thank you very much. Still ahead on the bloomberg of cbs isles moonves one of several moguls taking a hit from the media stock meltdown. Pimm welcome back. Lets take a look at the headlines people in taiwan are seeking shelter as a monster storm heads their way. The island is already being hit by heavy winds and the full force of a typhoon is still to come. The wind gusts are topping 120 miles per hour. Says seven point 5 million americans made 20 million interactions on its network during the first republican president ial debate last night. The number of people engaged in the social network was nearly 2 million more than during the state of the union speech in january. Facebook council posts, shares, and comments as interactions. Comedian jon stewart is not saying anything specific about his plans now that he is leaving the daily show. During his hourlong farewell last night, he promised viewers he would not fade away. He has built a loyal following of viewers who wanted news with a comedy spin during his 16 years as host. Those are your top headlines. Some top chief executives are taking a pay cut at least on paper. Falling equity values and bonuses tied to bad earnings are cutting millions of some of the Top Executive pay packages. For a look at who is getting hit lets take a look at this. Lets go through the list. We can start with les moonves of cbs. The stock and viacom are getting hit this week. His pay at the end of his coming fiscal here was worth over 50 million and thats down 4. 3 million this year. Includen greater if you all the gains through the year. The guy who is getting hit the is the ceo of discovery who has lost more than 15 million from his pay package. Also bob eiger . Year is still up on the because disney had a tremendous rally from the fiscal yearend in september before this big hit. He is still up about 5 million since year end even though its down dramatically. Pimm is there anybody else . What about viacom . Thats less than a 5 million cut. These executives get so much of their pay in cash specifically cash bonuses. Which will against the stocks. Brendan pimm anyone else we need to know about pimm . Reed hastings is the big winner. He does not rank on the bloomberg pay index and got paid about 7 million last year. A lot of that was in options and those have tripled in value. s package is now worth more than 23 million as netflix is the big winner in this media stock route. Olivia netflix stock rose higher and read hastings makes more money in the stock of cbs and viacom and discovery fall. They lose money. Thats all on paper . Correct, they still have options andrsus and they can go up of the stock goes up again. That is restricted stock units. Pimm this goes in the proxy units . Yes, they are shares they will get if certain performance conditions are met or if they stay in the job long enough to get them. Pimm does the value of their holdings affect their daily lives . I guess only if he use it as collateral. If you have it in stock in the stock falls and you borrow against that, youve got to make that up. Sump companies will disclose if their executives are opening lines of credit against their shares. Has aellison at oracle 10 billion line of credit against a share. There is no other disclosures. Pimm i want to get your thoughts about the new securities and Exchange Commission rule that says that Companies Need to publish a pay ratio so you can see with the chief executive makes versus what the average employee makes. What is your thought about this . It took them five years to put this rule together. They put a lot of thought into it. Get people are excited to Company Specific data. We have had to aggregate it before. Interesting toe see the ratios. Isy people say the fcc stepping out of bounds on this is a political move and may not be helpful. Pimm but it will be one more piece of information that investors can use perhaps to make investment decisions. Maybe they want to invest in companies or would prefer to invest in companies where the ratio is one thing versus another. Argument to be made that perhaps companies that have the wealth opportunities distributed through the organization incentivize their workers to perform better. Pimm have you heard from donald trump . Time i spoke to you you spoke about his wealth and he came out swinging. I have not gotten a call from him and obviously he is very busy now. Pimm thank you very much. Still just ahead, the cruise around the world for 100,000. The Norwegian Cruise Lines new crew sold out in a single day in the Company Stock is up 88 in the last 12 months. We will find out what they are doing right. The mishaps on various commercial is lines we have seen in recent years, Norwegian Cruise Lines has a new luxury cruise and it is sold out in a single day. The ship is called the regent and it sets sail in 2017. The ideas that they sell longterm vacations costing about 100,000 to go around the world. You stay on the ship and its your home. Betty that junk boat is not what you will be on. Pimm i was looking at that picture and that is not the cruise ship. Betty lets show the actual picture of the ship. They said earlier this year we are going to sail around the world for 128 days and it costs a little over 50,000 per person. You are on a beautiful fivestar ship. You will go to 60 ports around the world. It is sold out. This happened in one day in this comes at a time when the cruise industry has gotten a bad rap. Because ofme cases the italian cruise line mishap. Betty that sank but there was also the poop cruise with various viruses that have struck. These ships are very careful about any foodborne illness and have done various tests that show the kitchens on board the ships are better than any restaurant you would go to in terms of cleanliness. Betty like around the corner here. Pimm we will not go there. Betty when i was talking with like atthe ceos carnival cruise, compared to the number of ships we have an operation, the few that have gotten incidents is very small. Give us credit for actually running an operation that works on most days. The bottom line is that is not the only problem. Continue to be the older people. The cruise line say they need to get more young people on board. Maybe it does is one way to get the one person on board but carnival has other methods to get the 20yearold to cruise. Pimm its about 781 per day for two people to do the 128 day cruise. Betty there you go. Pimm its time for todays options inside. Ramy we are approaching the top of the hour so lets take a look at how the major averages are performing. They are all down at the moment. The dow has been down for seven days in a row and is now a sixmonth low. The s p 500 and nasdaq are also down. Those have been down for the past two days. Joining me for the options inside is scott hour, the Senior Market strategist at trading advantage. He joins me from the cboe. Great to speak with you. Great to be here. Palo let me ask you about Alto Networks that provide security like firewalls and security scans and is up 41 your today but down 7 since yesterday. What about this stock . If you take a shortterm look, like three months, when we see a pullback of up to 8 , it has been a buying opportunity. Its been an immediate. Over the last two days, this sharp pullback did breach the 50 Day Moving Average was it which is important. We have really pullback so i will dip my toes back in the water because this stock has taken off in the Security Industry and is one of those fundamentally sound as stocks in the sector. Ramy what is your trade for this . 177. 5 call spread. Im going out to august 28. I can do that for about two dollars on a 7. 5 spread. Market, thens standard deviation, if you look at that, its about 1012 dollars. Which puts it at 1. 85 and i can get in at two dollars with lots of upside. Ramy dont go anywhere, more to,. Pimm it is 9 a. M. In san francisco, noon in hong kong. Betty welcome to the bloomberg market day. 215,000 jobs were added in july and the on implement rate holds a sevenyear high. Could that mean a rate hike . Pimm donald trump said he had a good time at the first president ial debate. Will his blunt answers taken a wind out of his sales . Betty Cyber Security is the rage in vegas this weekend. We will take you to sin city were thousands of computer hackers are gathered for the deaf con conference. Pimm good afternoon. Betty lets begin with a look at the markets. As you can see, the dow is taking a bit of a dip, down 100 points right now after the jobs numbers came out. It is the longest slide since 2011