economists were expecting 2.5%. recent gdp was also lowered. you can see red across the board with the s&p followin falling .. the nasdaq down .8%. not only the gdp reports weighing on stocks, but you have social media dragging the market with twitter yesterday and facebook today. olivia: nobody likes how much money mark zuckerberg is spending. matt: his employees like it. olivia: probably. here's what's happening on the treasury market. the short end off the yield on the 2-year note up i two basis points. note, little bit of money flowing into that, so yields coming down. stronger off the back of 2.3% growth in the second quarter. the dollar index trading around a four-month high. top stories crossing the bloomberg terminal at this hour -- the u.s. economy picking up pace in the second quarter, gdp , slightly less than what economists were looking for. the commerce department revised the first-quarter figure upward. grew by out the economy .6% in the first three months of the year, but it cannot think. first-time claims for unemployment rose after hitting a quarter one year low -- 41 year low. the fed may decide the economy can withstand an interest rate hike if the number stays below 300,000 and hiring continues to pick up. sales that beat analyst estimates but investors are concerned about its expenses. spending rose by 82% in the second quarter. the company is still growing. alsoare spending and spending an average of 46 minutes per day on facebook. >> people are spending more time on their mobile devices. one out of every five minutes on smartphones in the u.s. and mobile usage is driving our growth globally as well. olivia: one out of every five minutes. mark zuckerberg wants wall street to give him some patients. -- patience. zuckerberg says the focus is now on expanding the new user base. growth first, make money later. ceo hasocter & gamble's been cutting costs and streamlining operations. p&g announced this week that he will step down in november. a new poll is showing donald trump ahead of the republican presidential field, still. but by and even wider margin. he was backed by 20% of the republican voters surveyed by -- trump alsosk when tops the no way list. 30% of republicans say they would never vote for him. the poll also says that hillary trump in auld be head-to-head contest. speaking of the republicans, they certainly cannot complain they don't have enough choices. a 17 candidate is now in the race. jim gilmore, no telling whether he will get into the next week's televised debates. fox needs to fill up the kids table. those are the top stories we are bringing new from the bloomberg terminal this morning. olivia: still to come, the senate votes today on a stopgap bill to keep money flowing to the nations aging highways and bridges for the next three months. when will congress get a longer-term funding solution in place? we will ask the head of the highway and transportation committee. will take an ekg on health m&a with sickness ceo -- cigna's ceo. will your premiums actually go up or down? it is a little-known aspect of warren buffett's family foundation. why he has so much interest in women's birth control. a great story on the cover of bloomberg businessweek on stands today. his facebook failing? stock is rebounding from last week. investors were more concerned about facebook's shopping spree. spending rose by 82% in the second order. matt: mark zuckerberg wants wall street to show patience. he says big things take time. for more, let's bring in paul anthony whovictor has a buy rating on facebook and raised his price target for the shares. thank you for joining us. drop.not a big facebook shares moving down a couple percentage points today considering the fact that spending rose 82%. was that a surprise? victor: the stock had a nice run the past couple months or so. the whisper numbers had lofty expectations, which facebook did not meet. matt: compared to analyst estimates, which facebook actually beat. >> that's why the stock is taking a breather. they beat revenues. you talk about the 46 minutes -- i'm still trying to decide whether that's good. good for mankind. olivia: you just raised your price target. it looks like a bit of a breather. facebook shares are still up 24% year-to-date. mark zuckerberg says he wants investors like you to give him patience. how much will you get him? multipleou still have catalysts in terms of instagram, video.p, you have messenger as well. need to makelysts their way into content is estimates. street estimates are low right now. there's a lot more upside for the stock. these are the things that he wants patience on. he is not yet making any headway forcedssenger which he us all to download as a separate app. instagram is fun for a little while. it is not a moneymaker. olivia: jack was joking when he said i would rather wait for my products to reach a million users and then perfect monetization model. matt: that is the model that facebook is perfect. compare facebook with 1.4 billion users, that seems to drive tremendous amounts of revenue growth. linkre that to twitter wishing around 300 million monthly users. around 300ing million monthly users. me build asays let platform and then we will monetize it going forward. have established a lot of goodwill with investors when they say give us patients. olivia: the number of facebook users who logged in daily rose to 968 million. a bit less than analysts had forecast. user engagement is stuck in a rut. >> i still think those are great numbers. matt: good for mankind? >> probably not good for mankind. matt: i wonder what mark zuckerberg things about that. he wants to do things that are good for humanity and that is not a good thing. a positive for humans to spend 45 minutes a day on one website. >> if you are interacting with your family members -- olivia: you've done it. olivia: how big of a threat is snapshot? >> a marginal threat right now. snapchat. why interns use snapchat. it could become a threat in the future. i'm watching that one closely. olivia: i am too old for snap chat. when this oculus start to pay off? >> this is the hail mary thing. the moonshot as 3-d is the natural progression of internet communications from text to image to video. now, virtual reality. they have put a nice bed down on the table with the purchase of oculus. et down on theb table. i suspect this is something that zuckerberg is pretty passionate about. the next stage of the social platform, interaction. olivia: thank you so much. shares off a little bit today, but still huge growth out of facebook. , just two days left until the highway trust fund runs out of money. for our highway trust fund. what does congress plan to do about it? ♪ olivia: good morning, everybody and welcome back to the bloomberg market day. matt: stocks are off to a weaker start today in part because of earnings. julie hyman has a look at the stocks getting hit by disappointing numbers. julie: we had the two-day rally that has been snapped as we got disappointing earnings numbers. the three major averages down about .5%. we have mixed earnings reports. --eing the old rfmd they started trading, sing their biggest decline since january. -- seeing their biggest decline since january. the company forecast is to blame. this makes chips that go into ltetphones, particularly smartphones. some weakening demand from china seems to be hurting the companies numbers today. drops, wholeig food shares down the most in a year and trading at a 3.5 year low, down by 12%. ,arnings missed estimates facing a lot of competition in the organic foods area. take a look at the top sales numbers. the worst since the fourth quarter of 2009 when they saw a bit of a drop in the depths of the recession. whole foods has been the consistent growth and comparable sales. we have seen that winning over the past year or so. -- waning over the past year or so. olivia: the scandal over pricing. matt: hopefully other supermarkets are not copying that strategy. thee: whole foods has been shoot the gap has been shrinking between it and other grocery stores. we want to look at the top stories. fiat chrysler reporting and 50% jump in second quarter profits. cheap suvs -- jeep suvs -- the company's ceo is spinning up the ferrari supercar. earnings missed for time warner cable. the second really company was hurt by higher marketing costs. it can merge with charter communications to create the country's second-largest cable and broadband provider. more fallout from rolling stone magazine's erroneous story about a fraternity gang rape at the university of virginia. downditor is stepping after investigation the magazine retracted the story. three members of the fraternity have filed a libel suit against rolling stone. this of the top stories we are following for you. olivia: it is crunch time in the senate. today, senators will vote on a billion-dollar stopgap to keep the nation's highways and mass transit networks funded for another three months. last night, the house passed the same measure as we await the bill juste -- this kicks the can down the road. when are we going to get a long-term funding bill? >> after this week, we are not going to see anything for at least until september. congress goes on their august recess for five weeks and then we pick up that can being kicked down the road this week. we are expecting the senate to vote on that long-term billy were talking about. --ough hundred $50 billion $350 billion. the senate will also vote on the house measure that was just passed last night. that is for three months and $8 billion. or seven read six stories about the senate could not get a clear take on what the house wanted and what the senate wanted. neither chamber is exactly on the same page. >> both houses of congress are led by republicans and they both say they want to come together and make sure the differences are gone. this is something that is they don't want to kiss off the american electorate. matt: it's been 20 years since the gas tax was increased. 18.4 cents a gallon now. wouldn't this be a great way to fund highways considering if you use those highways, you are the ones -- >> it has been talked about for such a long time. we are going into an election year. any talk about raising the gas tax would also make people very upset we are taking a look at this map that shows the gasoline taxes by state. arounding in gray is $.43. new york and pennsylvania are the most expensive. some states are thinking about raising their own state level gas taxes. the federal tax is probably not going to happen in the three-month legislation or through your legislation. states could still very well raise taxes on their own. south carolina could raise it by $.10. other states could follow suit. olivia: another source of funding is trying to reform the tax code and get some of these big u.s. multinationals -- >> there will be no tax code reform. olivia: bring their cash back on shore and then let us tax it. >> the idea is mired in the fact that there is $2 trillion that rests overseas. the federal government wants some of that, but there is a disagreement over whether it is mandatory or whether it is voluntary. there are three legislative possibilities out there. one that could go from 6.5% voluntary tax rate to 8.75% for mandatory come up to 14%. ge, microsoft, pfizer and apple. matt: has anyone with whom you spoken think it tax code reform is a possibility? >> can i laugh now? [laughter] matt: a lot of people are not sing until 2020. olivia: there is a lot to discuss here come including whether or not the export import bank will be renewed. , head ofavid shuster the transportation and infrastructure committee. bill shuster will be joining us at 11:00 a.m. matt: there's been talk about doing an infrastructure bank that would be fascinating. olivia: thank you so much. matt: a quick break. when we come back, what city do you think has the most cockroaches? i would automatically have thought it was right here in the big apple. apparently, that is not the case. olivia: we just have flying rats. pigeons. ♪ olivia: roaches, mice and rats. all vermin associated with big metropolitan cities like the big apple. matt: who was that? olivia: i will not throw anybody under the bus. --rican houses surveyed roaches like tampa, florida a whole lot. they also like houston, texas. more than 30% of occupied housing report evidence of the frightening and sex. -- insects. matt: we have mice. when i was a little kid decades and decades ago, we lived on the upper west side, which was not a terribly nice neighborhood at the time and there were always roaches. i came to expect them at a normal part of living in new york city. you do not see them anymore here. olivia: i've seen a few. it is not just cockroaches. there are rats. 45,000 people every year get bit by a red. -- grant. -- rat. it is still pretty crazy that 2% of housing units in new york austin is where you should not live if you want to avoid rats. let's show people where the mice have really invested housing units. philadelphia. the highest percentage of housing units with evidence of mice. i went to the university of pennsylvania in philadelphia. i assumed there were a lot of vermin around because it was college. we had a big issue with mice and squirrels. squirrels are not bad if you are a renter. olivia: it's illegal to try to set a squirrel trap. you have to have an exterminator set a trap. you have to call the exterminator in the middle of the night. there is a frantic squirrel. matt: bb gun. a 22. no? you have never squirrel hundred? -- hunted? adopt a pet. you eat the squirrel. i'm going away. olivia: we are speaking with the cigna ceo to talk about the merger with anthem. ♪ mom has always been one of those people who needs to keep busy. if she's not working in her garden, she's probably on one of her long walks with bailey. she was recently diagnosed with a heart condition. i know she's okay, but it concerned me she's alone so often. so i encouraged her to get a medical alert button. philips lifeline offers the best options to keep her doing the things she loves in the home she loves. if she ever falls, or needs help, i know we can get to her quickly, and with her condition that can be critical. and even though she doesn't typically go far from home, the button always goes with her. these days, she's still as busy as ever. just the way she likes it. innovation and you. philips lifeline. lifeline is america's #1 medical alert service. visit philipslifeline.com/caregiver today or call this number for your free brochure and ask about free activation. olivia: welcome back. now some stores crossing the bloomberg terminal at this hour. there are a few blue box -- roadblock standing in the way of raising interest rates. they are expressing satisfaction with progress but they want to see some additional gains before raising rates. randy cross nurse says there is a scenario where the fed may hold off for a while. >> inflation has been really quite low recently and has been either moving downward because of lower commodity prices and if you strip out the volatile food and energy sectors it is still been much below the fed's target of 2%. i think with china slowing and concerns about china going forward, commodity prices in general have been lower than they have been. this puts downward pressure on inflation. it might make the fed delay a little bit and not move in september. olivia: our key benchmark interest rates in u.s. have not risen in nine years. second-quarter profit more than tripled at deutsche bank. more than offset higher legal expenses. the new co-ceo is moving forward with plans to improve profits by cutting costs. he signaled he may shrink the trading operation. home rental prices keep rising faster than income. zillow says they were higher than a year ago. they were up by double digits in denver, and san jose california. but they have slowed in new york city, los angeles, and washington dc. there is no crying in baseball. but in real life emotions run high as we saw last night. as the trade deadline approaches the philadelphia phillies decided it is point was keep on the best pictures on this years team so they shipped call hamilton to the texas rangers. right after pitching a no-hitter. in new york, the young shortstop got a motion on the field after hearing he had been traded. he was pulled from the game after someone told the manager he was crying. after the game the deal fell through. those are your top stories at this hour. still to come, today is worn buffets -- is warren buffett a feminist icon? why he secretly funded birth control. you can pick it up on newsstands today. pennsylvania representative bill shuster, the chair of the house infrastructure committee bill, will join us here live at 11 a.m. -- 11:00 to discuss america's highways in today's vote on the highway funding bill. many people say this is not going to be enough. nyu economic professor joins bloomberg to talk central-bank policies and what they could mean for the global economy. a week after cigna agreed to be bought by anthem, they are reporting better-than-expected profits in the second quarter. the stock has slumped as investors wait for a net they trust decision on the deal. for a closer look, let's bring in the cigna ceo andrew armstrong. they both join me on set. congratulations on the numbers. we thought we would not go into them. we want to talk about the deal, particularly the stock price. it is off about 20% from the anthem offer price. what are investors telling you? why are you so confident you'll get the green light. guest: the stock is up a little bit over 40% year to date. secondly, it is trading at a large discount in terms of the offer price which presents further upside. largely it is the uncertainty to your point on the regulatory process. we know we have a long process ahead of an 18 month cycle together federal and state regulatory approval. we are confident it will be approved because of the diligence of the work done. the businesses are quite kabul metairie. over 50% of our revenue are in business that seniorss not in. our businesses. we have a large-scale medicaid business. the overhang is through the long time window but we are confident that through the regulatory process the transaction will be approved. >> do you see significant divestitures ahead? are you guys going to have to give up a lot of assets? guest: the analysis we did, we expected some but modest and manageable and factored into the deal accretion that was strong.d. anthem is cigarette is present -- cigna is yes,nt but not as large. there will always be some in some transactions of this size. modest and manageable. olivia: heavy started speaking with regulators it? guest: early compositions with state regulators but that is an ongoing process. olivia: are you worried there is not the appetite to do two big megadeals? guest: i think the key will be demonstrating with facts what the result will be in the marketplace. their is ample choice. when you look at the way the marketplace operates, there are new marketplaces. there are the public exchanges and private foranges that are growing both the commercial population and the retiree population. and new digital marketplaces. think he will be is if there is adequate choice and any combination. can't create better value for the consumer? can it work better for health care professionals to provide value/ >> there were a lot of questions about who is going to run the company and how it will be run. are you going to be ceo of the combined company after all this settles down? guest: what we announced was the way it is designed is my get anthem will be ceo and i will be president and ceoo. we feel like we arrived -- the day-to-day responsibility for running the businesses. joel will have responsibly for the governance of the company. and the two of us will partner with accountability towards the integration. the last question is up to the board of directors on the road. they key is to build the next age of the company. olivia: how do you feel about not being in the ceo spot? guest: my energy has always been in terms of building businesses. first and foremost there will be a 12 to 18 months cycle through the regulatory process. we are fully engaged in doing so and we are growing the business. transitioning into a new role, have responsibility for a global portfolio of businesses with $110 billion is quite exciting. and harnessing the value to work differently with health-care professionals and continue to evolve our global portfolio, that is what i'm excited about. >> we asked about a few concerns you had. he wrote a letter to the board in said they did not have a growth strategy. one of the massive hacks, the biggest and health-care care industries in questions about how they will resolve that. he said they had not taken the steps you thought they needed to resolve that. the rich concerns about the government. what changed between that letter in this deal getting announced that make you feel better that this company that you will be joining and helping to run has resolved a lot of the issues that you brought up and are now your problems? guest: as the public narrative unfolded the conversations have been taking place for some time. joe swedish and i started talking about the future of the marketplace sometime ago. secondly, in any deal of this size there will be issues and we highlighted very clearly several issues we had not seen and been able to get access to the necessary visibility to appease ourselves and our fiduciary response ability. we said we to ad to -- post that letter writing dynamic. we had access and visibility to the right information. we spent the time and were patient. we kept our eyes on the market. weaver able to appease ourselves that those risks are manageable and deadly combination we are able to configure actually is a win-win for the shareholders in the market. olivia: is the company going to be able to charge less to consumers? our cost savings going to be passed on? guest: i think that is an important point. when we think about our programs, whether health or productivity or peace of mind around the globe, one of the first things you are is affordability. the next is around choice in personalization. they key to the ongoing success is to improve affordability, improved choice and personalization. olivia: did you anticipate premiums will come down? guest: i dissipate it will be improved in more differentiated. and health care premiums are going up every year. as a society, and the u.s., we have become accustomed to that going up every year. we have many customers were premiums are flat today and that is exciting. we do that by engaging employees and individuals in their health prevention, wellness, chronic management, etc. we are working with health care professionals, incentives based on quality outcomes. partnering with nurses, health coaches come up professionals, when you harness that good things expire -- self-funded,are which means we act as a fiduciary. when you are able to improve medical cost by improving quality, the cost benefit goes to the employee or an individual. after the affordable care act of it threshold in terms of the medical loss ratio that is costs are below that and reimbursed back to individuals. the point is we are totally aligned to getting that right cost quality mix and success for any company, including the combined company, is to deliver that value. that is what we are focused on. >> your industry is highly regulated. after the deal it will be highly concentrated. what is the growth come from? new markets, sure. new obamacare customers, sure. where is it coming from? leave -- look through the current lens. cigna has posted 5 -- double-digit record growth they focusing on customers and focusing on clients and innovating in the markets. olivia: and a big tail wind from the four double care act. ourt: only $1 billion of $40 billion tied to the exchanges. we are one of the smallest players. back to the core of the business is innovating with clients and customers and position partners. to the important point, how you continue to grow? by understanding clients and evolving programs that work for them and health care professionals. how do you work with physicians? multi-practice physician groups and hospitals to helping to -- to help them deliver value? we are in 30 different countries. where one of the largest programs of providing expert adrian mobile solutions. there is growth in the u.s., the health service business, in the non-us business which is exciting as we go forward. olivia: thank you so much. ceo of cigna and thanks to drew armstrong. guest: good to be with you today. olivia: coming up, much more. the chinese markets have been on a wild ride and white bond investors are finally getting spooked. details up next. ♪ ♪ olivia: welcome back. we are one hour into the trading session. time to get you caught up on the market action around the world. high, hira. nira: the third day of gains for european stocks. heading for its biggest monthly gain since february. this is been about deal activity and corporate earnings. we had about 80 companies report on the stock 600 today. we may focus on banks and oil companies. deutsche bank, shares rising after second-quarter profits more than triple. that was in line with estimates. this was gaining s. after unexpectedly recording a profit for the second quarter. it was helped by sale of citizen financial. shares down now because after a meeting in london today executives said the restructuring of the investment bank in the second half of this year could have a bit of an impact on revenue. and finally shell announces thousands of dog -- job cuts over the next few years. that is how the earnings have been doing. i want to focus you. the pu -- pound for . it ispporting the pound strengthening against the euro because of the fed raises rates the bank of england is likely to be next. olivia: u.s. stocks are following today. people are talking about the fed and a lot about earnings. on that front it looks like the scales are tipped a little bit to the negative side today. we are coming up off the lows. about a third of 1%. one of the stocks weighing the most? they have to do with earnings. procter & gamble projecting sluggish growth this year. organic sales will be little changed or up in a low single biggest -- digit percentage. facebook, the outlook for growth which is responsible for the drop. and mckesson, all the earnings looked strong the company indicated that generic rise increases are moderating. then of course on the upside because we have a lot of earnings winners today. in terms of those lifting the s&p 500 the most, we mondelez.ately -- western digital saying eggs might be improving and air products and chemicals have never stronger than estimates. take a look at my bloomberg terminal. we have the ea function, earnings analysis. growth --en sales negative sales growth. sales of fallen 1% as earnings are up by about 18%. energy not a big surprise is the worst performing sector. olivia: not a big surprise. julie: it is been that way for a while. olivia: here is what happened in asia. the shanghai composite closing down about 2.2% out yesterday's rally. hang seng falling by 1% in korea stock 1%.ange down also by about samsung second-quarter profit misses after the smartphone strategy and leaving the ground in consumer products. samsung came in at $4.9 billion for the three month ending in june, falling below analyst estimates. its mobile unit was badly hit with operating profits slumping 37%. the disappointing figures for the result of both a strategy ms. consolation and market failing to produce enough screens for the popular as model. the traditional model struggled to challenge apple bigger iphone. samsung had to struggle with phone demanding china -- demand in china. now look. at some of our top stories consumer confidence fell less week by the most in americanss. of attitudes about their finances and the economy are getting worse. among those making more than $100,000 reached a 10 month biggestn the world's oil companies says it is preparing for a prolonged downturn and cutting back as a result. shell is the limiting 6500 jobs this year. they plan to reduce capital investment by another $7 billion. take note hockey fans. you can now own a piece of one of the most famous moments in u.s. olympic history. the goaltender who led the u.s. team to victory in the 1980 so-called miracle on ice is selling his memorabilia.'s gold-medal uniform is up for a lot of money at auction. $5.7 million. he says he wants his children and grandchildren to be financially secure. those are your top stories at this hour. chinese stocks have been on a wild ride. the shanghai composite index has risen to highs above 5000 only to lose one third of its value within a month. according to a new bank of america credit investor survey, china has become the main concern for high-yield investors. lisa abramowicz joins me now. what flipped the switch? >> i thought this was so notable. in may when bank of america surveyed credit investors, none of them put china and emerging markets slowdown. way, this was not on their list of concerns at all. it was nowhere. july, it is the top concern for 29% of investors who answered the survey. what happened? a pretty significant route in chinese stocks but that is only 5% of investments. limited contagion there. a real concern is what is going on in the commodities market and how this could reflect an even weaker chinese economy that people are expecting. and potentially not just in china, but what about other emerging markets? there is a feedback loop that when you have commodities that are dropping in ince and you have slowdowns big consuming economies and you have economies that are high commodity producers that are suffering, it creates a bad came today ubs analysts out with a report saying they are expecting within the high-yield debt universe that the route we have seen in some of the debt of metals and mining and coal and energy companies to start to become more of a contagion and increase default. olivia: that is what we are afraid of in the u.s.. this selloff in high yield energy was actually spilling over to broader high-yield markets. high-yield debt in the u.s. down more than 8% this month. companies like tea body -- olivia: thank you so much. don't go away. much more to come including warren buffett known for making big investments. what his biggest yet might be through his foundation. ♪ olivia: welcome back. warren buffett has amassed a net worth of more than $65 billion making investments. but his biggest investment maybe when you have not yet heard about. karen's details in this week's cover story of "business week." a fantastic story. thank you for joining us this morning. the big picture question is how much credit should warned buffett get of the increased prevalence family planning in the u.s.? which family foundation was named after his first wife has become by far the most dominant donor supporting expanding access and research into iud's. they began a big push right warns first wife, susan thompson buffet, passed away and left the majority for wealth. to the foundation at the time hee -- at the same left most of his wealth to the . all of adation sudden the foundation came into a huge amount money that it had to spend because the foundations have to spend 5% of their assets each year. they began aggressively funding iud research. they had become the largest force trying to reestablish iud's is a safe and desirable form of contraception. olivia: and in swing states through the choice -- tardy cut you short. read her story, it is the cover story of "bloomberg businessweek." how warren buffett's family foundation secretly funded a revolution of birth control here in the u.s. ♪ ♪ >> good morning. pimm: welcome to the bloomberg market day. senators getting behind the highway funding bill today. but is only a three month extension. wendell congress produce a long-term funding solution? bill shuster of pennsylvania, chair of the house transportation committee infrastructure committee joins us. olivia: plus you can say there is an exchange in the air. will ask about the shift from derivatives to futures. pimm: dump the pump. we will interview to -- introduce you to some saudi arabian investors. is the kingdoms dependence on fossil field coming to an end? ♪ olivia: welcome back to "bloomberg market day." pimm: we are 90 minutes into the

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