Cheaper with effect fed concluding its twoday meeting tomorrow at this time. Fromtle bit of unwind yesterdays trade. The dollar gaining versus the euro and the yen. There is less risk aversion at play. Where does that leave commodities . Energy and some metals are stabilizing. That is giving a lift to the index, which marked the only second gain in the session. Year to date, there is a dramatically different for a. Down 11 . You can see a series of lower lows here. Commended march, a recovery that he in may, and the bottom falling out over the last couple of days into the middle of july and the end of july. As we next this outcome is going back to 1991. Since 2000 two, a 13 year low. Us on the back of the stronger dollar. Demand, or signs of we demand from china as well. This is a story to will cover for the rest of the hour. Lets take a look at some of the top stories crossing the bloomberg terminal at this hour. Attorneys for convicted israeli spy jonathan pollards taking has been granted parole after 30 years in prison. Thelegal team insist decision was made unanimously by members of the Parole Commission and is not connected to recent middle east mls. Are no tides between his release of the nuclear deal with the wrong. , since 1985ison serving a life sentence for espionage. Scarlet skeptical members of congress are questioning secretary of state john kerry over the details over the iran deal. First up was chairman ed royce. We have been surprised by almost every Major Nuclear development in rons history. Iran has cheated on every agreement they have signed. Mr. Secretary, have they earned the right to be trusted . If they cheat on the agreement of the u. S. Will find out quickly and will respond with every option available. Ork iraq in turkey attribute the heat on islamic state. Iraqi warplanes are targeting militant positions in an bar province and the Defense Ministry says the bombing destroyed hideouts and ammunition stores. Iraqi troops recaptured a University Campus on sunday. Working with United States to push Islamic Forces out of the wide zone in syria. They joined the fight after killed holger. We sailed in solidarity with turkey. We strongly condemn the terrorist attacks. We asked us our condolences to the turkish government and the families, and other attacks against police and military officers. Mark representatives from natos 28 states are holding an emergency meeting in brussels to gauge the threat posed to turkey by islamic state. Drugmakerso big reported earnings today and they beat analyst estimates. Revenue and profits that need estimates. Meanwhile, their Second Quarter profit fell by more than a half than a year ago, and earnings were better than anticipated. They also agreed profit forecast for the whole year. Mark home prices rose at a slower case in may. The s p case schiller index rose 4. 9 in the previous year, less than what economists had projected. The slower rate of appreciation may make it easier for firsttime homebuyers. Scarlet americans were more pessimistic about the economy this month. Reports Confidence Index fell by the most in almost cointreau years. The greek crisis and the slowdown in the crisis overall are waiting on americans lines. The crisis in china, perhaps . No doubt. And a first for the National Football league, a feeble coach is joining the Arizona Cardinals staff to coach the linebackers during the preseason training camp. She played running back in the indoor football league, the first woman other than kickers to play in immensely. She is a masters degree in sports psychology. Halfhour,n the next delta is making the friendly skies a little more comfortable for its elite flyers, offering limited service of private jets for some of its existing routes. Device Alex Rodriguez statistics with its breadth a home run yesterday. , the best ine seven years. Restaurant kitchens are encouraged to cook up new innovation. They may not be appetizing to everyone. All of that and much more on the bloomberg market day. Takeovers story of and strong earnings reports, stocks are climbing for the first time in six days. While the rounded chinese stocks still weighs on investors minds it is not standing in the way of 1 wall st bull. He defended his bullish outlook on the equity market on bloomberg surveillance this morning. This cycle there has not been a single quarter, from the moment you start the earnings season two when you edit that there has not been a significant word revision in the number. The median is 3. 5 . The estimate is for a loss of 3. 1 , operating earnings. You should assume that the number is actually up a. 5 . What is so great about that number . The fundamental fact is that earnings are not that much better. Not been the entire cycle. Im trying to understand how we keep coming on every quarter that the earnings are terrible, the Revenue Growth is terrible, and it is going to be bad and we are up 300 . Are you here to reaffirm doubledigit performance 12 months out . I am six months out. I think were going to have a very robust fourth quarter. It is a very exciting environment. Where are you going to go now that credit looks like it is going to get worse . This story of the goldilocks economy and there is no alternatives has not changed. We do not change our view. Do we see a movement in the and makes ane day announcement, or is that christ in priced in . I think it is priced in. They did a chart that showed with the yield chart looks like in the right height cycles, and the market never expect the fed to do what it does. The idea that the market and occasions are different than the matrix is true every cycle. Human nature is never different. Ultimately, going back to earnings, the key is a market correlates to the direction of earnings. Does not relate to the rate of change of earnings. Revenue growth or any other metric. It is the direction that matters. If you tell me know how that direction is going to go negative when the data in the u. S. Is reading salary we accelerating, explain that. 2019 2010, the dollar is up 60 . The u. S. Economic activity accelerated on more open credit. It takes a well after a crisis. We had an credit crisis, it took for five years and credit started to expand. We are doing a replay here. The u. S. Economy accelerated from the 1990s. We know the market is getting the fed wrong, and there is no such thing as perfect communications. In the is interesting cycle and makes me so bullish is that if you look at the fed funds futures or the end of 2016, it fixing is at 45 basis points. January of 2017 it is at one point euro three. 1. 03. They are not telling you they are not going to raise, they are guiding you to a moderate pace. What is Thriving Market off is the fear that they are guiding the curve. . Expectations increased indefinitely . The fed is again behind the curve. You do have census of a pickup in labor inflation. There is a. 89 correlation to core inflation and the employment cost index which is beginning to lift up the low. That is actually a good thing because it offset some of the commodity price inflation. One about the banks . Are the banks attractive on their own behalf or are they attractive because of cost cutting . They are attractive because of both. The next stage of the market is very clear. Every time the market perceives the fed will raise interest rates, what sector outperformed . The banks. Youre looking at a flat relative performance for the last five years and now youre picking up as it becomes more apparent as theyre actually going to raise rates. Youre going to get increased load demand and better interest margins. Mark that was the chief market dutyegist at category to with the bloomberg Surveillance Team this morning. Scarlet he feels for the because if you look at the intraday charts, we are at session highs. Once 10 30 a. M. We have been a steady climb higher. We are at our best levels of the session. Stocks are higher for everyone who was down on the new york stock exchange. This is the s p 500 and its 200 day moving average. Youre seeing a sharp rebound off of that purple light which is the longterm trend line for the s p 500. It in earlybelow july, but we have successfully held onto that support line. Altered Industry Groups are higher today. Commodity related companies, energy, materials, and industrial, they were the worst performance within the five day selloff. The you would think that inverse was true because with oil prices continuing to fall you would think that maybe they would take a hit, but they still seem to have some steam. Im looking at my bloomberg weei functionhe and a front of the s p 500. That is a lot of green on the screen today. Remember the last time we saw all of the sectors like that . Scarlet and set it has not happened in the last six days. We will continue to monitor all of the developments in the market. Coming up later on this hour now on delta you can upgrade to your own private jet. We will have the details. Mark welcome back to bloomberg market day. Straight tos goes julie hyman with a look at the markets right now. We are talking about Healthy Breath here is so positive, but youre focused on the losers. Julie there are quite a number of losers to choose from, especially when we get into earnings season. Re are only companies that always companies that disappoint. Baidu for example. Trading at its lowest in more than a year. The companys forecast for estimatemissed sales s. Doing things like investing in a groupon style business, other related internet businesses that take you into real life rated that is not working of that will especially as chinas economy is flagging to some extent. We are also looking at ingersollrand. Buildings, airconditioning downces, the shares were 5. 7 . The earnings missed estimates, and the company says that its climate section did well, but the industrial was softer than they expected. The biggest oneday drop since 2011. Then there is macys. This is not have to do with earnings. The shares are down 1. 5 after gilbert security cut the stock to sell versus a buy. Tore is an opportunity profit at attractive prices, but quest forid the a positive golden real estate is a will there and. What is he talking about . Seras separated a bunch of its properties into a Real Estate Investment trust. There has been talk for a little while it macys would do the same. Take a look at my bloomberg terminal. The latest to make this commentary was starboard to jeff smith. Involveds noticeably with started and got it to spin off various businesses. They say that macys it could be worth 125 billion. Since then, they have come back down a bit. Trying to lete more air out of the blue and the saying that this real estate idea is not viable. 8 , butrts falling by we saw the Las Vegas June gambling proceeds down 16. 3 percent. We tend to look at these guys on the neck how gaming revenue macau gaming revenue, but it still comes from las vegas. Scarlet that is a sobering reminder. Thank you. Of theake a look at some top stories we are following at this hour. General motors is leaking at 5 billion that it can sell more chevys in emerging markets. They have agreed to work with chinese markets. That emerging markets will account for 55 of sales growth in the next 15 years. Out ingen has pulled front of the race to be the worlds best selling automaker. They edged out toyota in the First Six Months of the year. Both Companies Sold just over 5 million vehicles. Starboard madeom in europe that helped offset the slowdown in its biggest market, china. And the newest book from dr. Seuss hits bookstores today. What should i get is the first book from the beloved childrens author in 25 years. 1990 one. In the book is based on a manuscript his widow put in a box shortly after his death. In 2013. Covered it those are some of the top stories were following at this hour. We spoke with random house about that. If you open up a box and have something from one of the classic childrens authors of all time. Hislet i like that it is work and not just someone writing in his style. What is your favorite . Mark cat in the hat. Scarlet my is fox in socks. Mark delta were start offering private jet upgrade for its frequent fliers, charging that between 300 and 800 for the service. There are many caveats. We discussed the service earlier today with our colleague, betty liu. We operate a private jet fleet and theyre are going to try to use empty legs on those jets to make some money and get the ohio Valley Company the highvalue customers. Only the empty legs. What kind of equipment are they planning to use . A they have a lot of passenger, six passenger, medium sized. But they will keep it on the coast for now. Betty qualifies for this . They are looking for the customer who does a lot of business with tilt a yearly. If skymiles number from the person who is doing hundred thousand miles a year. It is an email invitation from us you cannot just say that sounds great. They are going to identify you first. You have an account at delta and you are using it frequently, this is a perk you can now offer to make sure that you eat that account . Dark,is definitely a nice but more than that it is a story. Flewmebody says look how i to new york this morning, all of your friends will be jealous, maybe they will try delta. Betty maybe. That is the reason why they are doing this . You do have the empty like problem. You need to make a little bit of money. Betty are they going to make money on the . Thet is not going to cover cost of the flight, but it does differentiate the product. You have no private jet fleets in america. Pimm any International Carriers going to offer the service . Delta says no. The most likely analog is when you have a businessclass jet. It is a little bit different, it is not a private jet and it is more scheduled. Betty why does delta have this business and the other u. S. Airlines do not . A nice sidet is business. It is not really material and finances, and they do not talk about it a lot. Betty you do not expect the others to policy follow suit . I do not think this will be a trend in the industry. Pimm wellness take business away from competitors . If youre spending a lot of money at delta, you can say i have something that my friends at american does not have. It could definitely make the program more valuable than it is. Coming up on the bloomberg market day, what a way for avon to celebrate his 40th are they with yet another home run. Resurgence. Mark new york yankees slugger Alex Rodriguez celebrated his 40th birthday yesterday by hitting the home run helping the yankees beat the texas rangers. It may him the fourth major to have homered both as a teenager and a 40yearold. Scarlet hes only playing half the games, he is a fulltime dh, so that is helping him preserve his aging body. He says he feels like he is 20 and age were playing into your 30s is a little more common. Generally, this does not include the pictures. Two during world war ii, the first circle, inspecting and in the early 1980s, and then again around five years ago. The second circle just before the league crackdown on steroids. Were thai called, rusty stop, and gary sheffield. See you tomorrow. Scarlet much more coming up on bloomberg market day. It was a recordbreaking quarter , with sales surging. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Scarlet welcome back to the bloomberg market day. Lets get you the top stories crossing the terminal at this hour. Production is starting on a new, faster memory chip. Bidderschange how access large data. 3d technology is the first mainstream chip to come to the market in 25 years. We view something that as a new class of memory because it is not just a little bit asked her, it is not a simple extensions when is a lot faster, it is a lot higher endurance. It is up to 1000 times faster. Scarlet they will send samples of the product later this year. Intel and micron have been collaborating since 2000 sites. David einhorns they that are golden looking for illadvised way the minute. The president has been bullish on capital for years, but the price of gold has full in more than 7. 5 since the end of 2014 under this head for delete Third Straight down here. In prison worker in new york has pleaded guilty to hoping to murderers escape last month. She admitted giving the inmates tools so they could break out appreciated agreed to be the getaway driver but then changed her mind. When the process was shot and killed three weeks after the escape, the other was recaptured. The satirical visa gold the book of mormon has finally landed in utah brady Tony Awardwinning play which mocks mormons started a twoweek soldout performance tonight. Those are your top stories. Hour, up in the next half the drop in oil and other Commodity Prices of the next couple of weeks having a disproportionate impact on the state economy. How big of a hit will it be for Energy Producers like texas and louisiana . Goldman sachs is becoming a big theyr in Silicon Valley as are acquiring star as well before they go public. And chinese stock market continues to fall to the lowest level on record. All of that coming up on the bloomberg market day. In the meantime it is a good day record mode or spirit data r ford automakers. With their cfoke o today. Not try1 50 itself did the results because we were still going through the launch in kansas city in the Second Quarter. We do expect in the third and fourth quarters that it will drive positive the bottom line. We are expecting it to be even at ther for the Company Second half of this year versus the first half. But customers love the product and we are so excited about what is ahead for us. Matt we always hear about what is being driven by the f1 50. If you are selling fewer of the f1 fifth seed this quarter than you were last order, how do we see 44 growth . Where is it coming from . This is a great quarter, which demonstrates there is more to ford in north america than the f1 50. F1 50 volume was lower. We were launching the major change for that product, and yet you deliver which record profit for the quarter. It shows how strong we are beyond the f1 50. Matt what about the Pricing Power of that truck . Bloomberg has put out a story saying that you discounted up to 10,000 on it. To otherd run counter information i have heard, the average selling price being 40 4100 44,100. Where are you on that . Let me give you the facts for the f1 50. We are at record transaction prices. It is up about 3600. Most of that is riven by the f1 50. Average incentives are about 3900 across the country. That is lower than a year ago. Lower than our competitors. One of them recently raised incentives to an even higher level. The 10,000 that was reported by bloomberg, that happened to be only in selected models on a , or aed vehicle derivative of the f1 50 which is not uncommon. Lowest incentives among our key competitors. We have a strong story, and the vehicle is turning twice as fast as the overall segment. It is a positive story all over overall. Matt you are turning these out in 30 days . We are doing 32 days. The average for the segment is 77 days. Move to europe. You broke even in europe. How do you see that Market SegmentGoing Forward . Are we going to see a continued balance along a break even, or are you going to see a strong recovery . You expect to see a rocket launch here in the united aids after the f1 50 comes to full production and inventory. What about europe . We are feeling quite positive about europe is for an average of actors. The industry is growing even faster. Overall delivered higher volume, we delivered positive pricing based on the back of new products. We can pretty good about where we are. In the second half of the year, which we said today is we expect the second half to be worse than the first half, and that is due to normal seasonal factors. That we are on a path towards profitability. There is a question about that. Took 2. 2 billion dollars out of your revenue figure. Do you had to get back, or i know you have factory plant rolled over there. Is that enough of a hedge . We had to get stars key operatings posers, not revenue. Had against our key operating exposures, not revenue. We have a strong dollar, if you had your going to have an adverse hedge effect which will smooth results when the dollar weakens. We do hedge, but it is more for volatility, not to make any type of profit. Some effect in the quarter, but just a normal part of our business. Scarlet that was the cfo of four to speaking with matt miller. A the biggest gain since march. Adam jonas is a analyst for Morgan Stanley and says that Profit Margins are approaching or even topping those of rivals daimler bmw which means that it is time to sell shares of ford. Meanwhile, breaking news tom brady, the winner of the super bowl new england patriots. The nfl, under commissioner Roger Goodell has upheld a four game suspension of tom brady for his role in deflation of the old used in the playoff games, the afc championship game in january. His four game suspension is upheld. He will be losing his appeal to reduce that suspension. Coming up on the bloomberg market day coming u. S. Workers are starting to question of at the cigarette industry shows no signs of slowing down. Scarlet welcome back to the bloomberg market day. It is a rare update for commodities. Lets get a check on how prices have settled in new york trading. We have to begin with oil prices because yesterdays crude entered a bear market but today is stabilized. Nothing has fundamentally changed. Bank of america talked about the doubledip today. Thirdquarters forecast to about 50 from 54. The reason, part of the reason you can find them holding up relatively well is because we have had reaction from some Oil Producers like chevron, andinating 1500 jobs cutting spending because these to oil prices are going occur back production, therefore we will have a sub my side response and prices will be up to stabilize. Of vaguewe get a lot explanations about how theres going to be demand from china, but that does not capture the nuance of it all. Anergy aspects had amazing note out about why we can see oil follow a cliff. Fall off a cliff. Diesel stocks are in asia. If the chinese gas demand is booming, even with the slow refiners are working really hard to keep up with that. The results of that is they are also making diesel product. What youre looking at here is diesel stocks in china. You can see that orange line of 2015. Those margins come down, and they stop working as hard, therefore they do not use as much crude. Just an asian phenomenon. We are also seeing these stocks build up in europe. There is a product mismatch happening in brazil. What they need is not with the refiners are making. This is a significant issue in the oil market. Scarlet soon to be in everyones faces. I was very interested today in a story about the longterm trend that there is an oversupply of eggs and pork as a result and we will see that in restaurants. Was we had a virus that killing a lot of pilots and we had a pork shortage. Now that is reversing itself. Wholesale prices are down. Youre looking at about 9 more take than were a year earlier. You have more supply, and restaurants are getting super creative. With ago is coming out pork belly corndog. I pulled pork mac cheese, which i 100 support. Send it over, lets try it out. Scarlet wendys gave the world ator, and now you have pizza hut with a cross made crust made of eggs an pigs in a blanket. They also added bacon fries. Alix beef prices are rising, so it will be cheaper for restaurants to imitate with pork and beef. Scarlet soft commodities and or commodities hard commodities. Whining, drilling, as well as agriculture, they are getting hit despite the sense that the economy is recovering from a week first half. Have thought texas because exposure to oil, and that is not the case. Wyoming is the number one state, 36 of its economy depends on agriculture were mining. Reduces the top producing coal mine in the United States. It is not a call that is getting wiped out fundamentally by , they are not wanting to own a call stocks coal stocks. Part of that has to be diversification. When texas got really crashed in the 1980s they really try to diversify their economy. If you look at houston they have a huge hospital. Hospital admin and all of that makes a large portion of their local economy. Scarlet they got smart in texas. Wyoming is number one and alaskas number two at 27 . Alix steel will be back in the top of the next hour. Revenues shares are having a good day. 4 . An fair percent we join tim fox and Olivia Sterns with their interview this morning. They began talking about Second Quarter results and the recent acquisition. . We did complete the acquisition of the tackle back oh company and the investiture and june 12 of the Second Quarter. The new Quarter Results did not materially impact fee estimate that grew by 14. 6 versus a year ago. When you look at our portfolio today, 92 of our brands are growing market share. We did see increases in volume this is really an anomaly in terms of adjusted inventories versus last year. And inventories were down in the second order by about 8 10 of a percent. Talk to us about your priorities for leveraging acquisition of lorillard. Weeks he added 6 to sales. That is incredible. Any plans for extending the product line, or raising prices . There is a couple of things to think about. Provide 800 million in synergy. We will get that energy between now and the end of 20 team. We also, if you think about newport brand adding to the portfolio, newport is very strong on the east and campbell is very strong on the west. The national complementarity of portfolio is very strong. We also have sales reps on the street and that compares to lorillard. Our ability to reach retail, to consumers, and to focus on opportunities is very clear. We are going john paul more strategies about exactly how we will handle the brand portfolio in the next four to six weeks. Do you anticipate will raise prices . The industry pricing has been very strong. We had net price realization in order of about the process. As i said to him earlier, volumes have been declining in this industry for a very long time. We are looking at this year volumes to decline at about 2 . Often that is made up by pricing. You expect more retailers such as cvs to stop selling cigarettes . Cbs made their choice, and i certainly respect that choice. I think what needs to be recognized is that consumers who choose to smoke, and there are still 42 million of them in the United States will shop at retail outlets that are convenient to them where they want to purchase their product. It really is a retailers choice. Respecting the Consumer Choice as well. Smoking istunately in a state of decline, but they see the opportunities abroad where smoking is on the rise. Why is Reynolds American not looking abroad . In our cigarette portfolio, the old reynolds brand, which is salem are and owned by Japan Tobacco overseas. As paul all is by British American tobacco overseas. We know natural american spirit overseas, but we do not have a broad infrastructure or international portfolio. Now for a look at some top stories crossing the bloomberg terminal. Microsofts latest operating system debuts tomorrow. Says it will be a Free Download for anyone who has a home or home version of windows of minority rate tech watchers say it will be more like Google Android or iowa system. And if you have an android device, hackers could disable it by sending a text. That discovery for research or the theft he found a big flaw in googles operating system. There is a patch to fix it. And tmobile says it is adding apple music to services that stream for free on the wireless carrier. That is according to a blog post by ceo john ledger. They are to have a list of more than two dozen streaming Services Customers can utilize for you there to church free of data charges. Goldman sachs has its eye on Silicon Valley. We will tell you how the big bank is acting more like a farm. Scarlet Goldman Sachs, one of the most powerful banks of the world is making a play to become the tech investing powerhouse of Silicon Valley. Participated it 100 32 fundraising rounds in private Tech Companies since 2009. 77 of those deals made in the past 2. 5 years alone. They wrote the story for the september issues of Bloomberg Markets magazine. Great story. I would like you to start with talking about Goldman Sachs approach to startups. What they offer that traditional firms dont . What is interesting is that entrepreneurs really call the shot. Money is not really what runs things. It is how do you help the start of school from zero these startups come from zero to uber. They have these International Reach him for startups it is amazing, from the getgo they think about what is my global strategy. They have to think about what is my global strategy mainly because if they do not their idea could get knocked off immediately from a company in india, china scarlet and weve seen that happen before. What else is goldman doing that competitors dont . Entrepreneurs,ed what they want is they want to speed and access to some of goldmans clients and global reach. It is incredibly valuable. If you are a new startup, to be able to get an introduction to the ceo of a Major Corporation thinking aboutre your global strategy, just partners who might be able to help you figure out where is the best place to start of my new location, or how to hire people, or how to that executives. It is incredibly valuable to have that depth that goldman has. Scarlet they are playing of the competitive advantages, but to what extent do they have to make some adjustments to how it has behaved in Silicon Valley . They cannot go about it the same way in the capital market. A couple of things were interesting to me. Showing up atn sxsw which is for the young and technologically have and here is Goldman Sachs. Another point that was interesting if they hosted a hackathon for one of their startups this winter. What was extraordinary with they invited this crew of hackers, to come engineers, to their Trading Floor and get a deep dive into the system. They were protecting the client information, but they really got to understand how this system worked. Scarlet sharing some of their secret sauce with potential clients. Thank you for joining us. Her article is an Bloomberg Markets magazine. Much more coming up on bloomberg market day. It is noon in san francisco. This is the bloomberg market day. Want to know what brown can do for you . Make money. Thanks to strong overseas business. We are going to hear from the companys ceo. All eyes on twitter with jack dorsey back at the helm. We will tell you what to look for. Scarlet good afternoon, everyone. I am scarlet fu here with alix steel. Ix stocks are leading the way and commodities are following. We do have the s p trading right around the