>> from bloomberg world headquarters in new york, the "bottom line." reports on whether kurdish forces have taken control of islamic largest dam him who attends. the system grade task that education department. we will look at the world's most advanced -- an >> to our viewers joining

from around the world, full coverage of the stocks and stories making headlines today. special cost on raising a child. examining the part-time employee challenge. we are fighting where -- we are where islamic fighting continues. do we know who is in control. the kurdish forces are completely in control of the dam. about two kilometers on the edge of the dam of lately filled with explosives and will be slowly clearing their way through that to make sure the entire area is safe. they say there are no militants there at the moment. lex how is this affecting the critics dan economy. he says he has the hardest job of anyone in government at the moment. so little money coming in and so

much money going out. not getting any of the share they normally get. they happen to have more than six months. having to pay a lot of money toward depeche mode military forces and 600,000 refugees in this part of iraq really sucking up resources. say they are desperately seeking cash. about the foreign companies operating. how are they reacting to this? have beenf the ones i speaking to over the past few days have been pulling nonessential personnel out of the region. three of the major oil companies i have spoken to have said this miss as usual for the most part. they are still refining and exporting as fast as they can. aq on average saw 3 million barrels going out through the door.

nervous.panies are leaveconcerned if they do , this will have a devastating impact on the local economy. the sense from the people there? what are you hearing? >> it is mostly business owners i have been speaking to. they're are very concerned about the uncertainty. beenact that the u.s. has involved with the heavy airstrikes to the west of here toward the dam in particular seems to have given people confidence that things could return to normal and the islamic military state will be kept for their way. raq.oining us live from io thank you so much. israeli and palestinian officials strode little movement from entrenched positions hours before a truce was set to expire. egyptian officials are reporting

a final day of talks in cairo in an effort to build on eight days of quiet. hours before the truce was set to expire, the outlook appeared moving. for thes allowed opening of the seaport an airfield in gaza. israeli officials say those can only be dealt with in a final peace agreement with the palestinians. coming up, the biggest auto supplier in north america. we will talk to the ceo of magna international about the soaring stock price -- stopped rice, m&a strategy in the plan to affect -- attract more businesses. stay with us. ♪

>> welcome back. line" onbottom bloomberg television. i am mark crumpton. magna international is the largest auto supplier in north

america. the company reported a .3 billion in revenue last year and has about 120 8000 employees globally with headquarters in ontario. donald walker joins me now from the toronto newsroom. welcome. thank you for your time today. >> thank you for having me on the show. >> your stock has risen more than 38% this year, more than in the s&p 500th index. do you think your stock is fairly valued? >> we have been doing pretty well on performance of the stock over the past two years for a number of reasons. we have been increasing earnings. we have been breaking even and more acceptable levels of return and a change in the past number of years in the structure of the company. cashwe're doing with the and balance sheet strategy. everyone has their own opinion.

we are about average where our peers would be right now. at a .8%. margins are the auto sectors margins as a whole are nearly 10%. how have you been able to show good margin expansion and are there other opportunities to boost margins at this point? always look at margins. we tend to look at internally the return on invested capital but we have been making headway in improving margins in europe in the past three years. we gave ourselves a five-year target over half of north america and are on that target. we also go through seasonality so it will go up and down per majorr but we have initiatives in getting world-class manufacturing and bringing a lot of new, innovative products to the customers. if we can continue to execute those major priorities in the company, as well as the balance

sheet to buy back a number of the shares, i believe we will continue to make headway in the margin. >> how is the market for mergers and acquisitions right now. go are there more strategic it goess out there? >> up and down. right now the stock market is near a high as you know. anybody's guess whether it continues to go up or not. i think the valuation expectations in the automotive sector are fairly reasonable. a foothold in a new product area or technology we launched or geographic footprint or entry to customer on a global basis. we continue to look at acquisitions. we will not overpay but think there are good opportunities out there. lex do you have a ceiling on price? >> we have a very strong almond

sheet. we are generating good, free cash. we have an opportunity to put this to work by making a good acquisition and have a lot of ability to put that in the market sheet and put that in the cash we have. >> i am speaking with donald walker, ceo of magna international, largest auto supplier in north america. are there parts of the portfolio that do not fit into the long-term planning and parts you would like to strengthen through acquisition? >> we have an internal product strategy that we do not really talk about two employees but about $35 billion in u.s. dollars per year. we have many different products. we are the most diversified in the industry. there is more we want to strengthen and add technologies to then get out of. we are always assessing where is the best value long-term. >> your tax rate is consistently below 20%.

with this factor into the m&a strategy and on a related note, what is your reaction to the debate in washington over possibly preventing american companies from reincorporating overseas to prevent paying u.s. taxes? >> we are pretty transparent what we do from a tax standpoint. when we look at acquisitions we look at technology, customers and how it aligns. he will take everything into consideration that will not let the tax strategy drive the acquisition. to the extent we improve operations that have losing divisions, obviously that falls on the bottle minds are really depends where we are making the money under pretty transparent for what we do. thaty thoughts about that has been raging in washington? >> i am not up to date on it. >> fair enough. your shareholders are all

marched -- almost all canadian. what are you doing to introduce to retail and -- two larger investors? >> we have been talking to investors down in the state. it has conduct -- up and down over the years that have been talking to a lot of shareholders that are interested in the stock because we have done everything we need to do from a corporate governance standpoint. we have one class of shares and the global company. we are seeing a sick ethic and amount of interest from the american investor and think that will continue. >> donald walker, the ceo of magna international. joining us from toronto. thank you were your time. it has been a pleasure. -- thank you for your time. daycare, those bundles of joy will cost you a bundle of cash. the cost of raising children when we continue in a moment. ♪

>> grading u.s. colleges is testing the u.s. department of education. president obama asked the department to create a system to rate more than 5000 campuses that the department has delayed unveiling the draft until fall, months later than planned. janet lawrence has been tracking the story and joins us with more. why did the president called for a system to grade the colleges? >> he is concerned about a couple of issues, namely access and affordability and outcome. he wants parents and students to get a better understanding if you go to the college will cost you this much and this is the percent chance you will finish it. are they being graded

on? >> we do not know exactly what. they will not unveil a draft until later this fall. he said about a year ago it was mostly -- he was mostly interested in issues of affordability, outcome, such as average student debt when you graduate, and also, the percent students that colleges are taking. >> talk about challenges in the making him -- in the making of putting together this system. i mentioned it is behind schedule. thehe department once complaints they have gotten. colleges say they are concerned about metrics such as salary. how do you measure that? take women's colleges where you may have women leaving the work wars or working part time 10 years after graduation. how do you factor that in? very complicated and do not want

to penalize schools for taking lots of low income students who are maybe not as well prepared. some colleges like this. some colleges are not ruled. what is the breakdown? >> a lot of private colleges are concerned more so they and public. they have to show information to state legislatures or states to get money for appropriations. so they are more used to it. have a colleges have never really been evaluated in this way before. this will be a little bit different. this would give students and parents apples to apples metrics to compare them. >> the president of weaver college says it does not do enough. >> why? >> a public college in utah. he said the public should be held responsible. he thinks the rating system will

not do any harm at the way it is structured, colleges should be held accountable. >> to be continued. janet lauren, thank you so much. >> according to a government study, and middle income families cost to raise a child in the united states is on the rights. for a child born last year to age 18 estimated to run you a quarter of a million dollars. here to discuss this, alan bjerga. they are married and expecting their first child. congratulations to you both. what does this year's reports say and were there any surprises? >> it depends how you look at it. raising a child will never be cheap. $245,000 for the first 18 years of a child's life. expenses inst raising a child, what are they? secondarily, talk to us about

variants by situation. the biggest expense and has been since 1960 is housing. 30% of the expense rate their. you get variation. you have seen the cost of daycare and childcare go up a lot, along -- especially with more affluent families. for lower income families you have a rising dependent on food increases. you have seen increases on food inflation. since more of those families have someone working at home, childcare not as much. health care has been a big expense. eight percent now. we have seen that moderate a little bit with the flow costs to health care in general. mentioned, you are expecting your first child this fall. since you are going to be a new mom, talk about the cost you find most daunting? >> i think

the biggest challenge for us goodto be able to find daycare that is a reasonable price and good quality. education. me -- we may want our child to speak chinese or spanish. >> right now our life is dedicated to looking for a stroller. that is enough of a start. >> 245,000 is the national average but i would think it could very a lot by situation. what sort of cost range can parents expect? secondarily, as soon as the interview was over, are you asking for a raise? >> that is between myself and employer which we all share. it really does matter what part of the country you are in. if you are in overall area tends to be less expensive. according tore region. the most expensive as northeast. if you adjust for inflation, adjust for high income ratios, you may find up to half a

million ways to say you love your child. the 245,000 mark, were you surprised to hear that as i was? >> depends on the region you are in. some areas can be less than that. also, looking at a two child family. the first trial tends to be more expensive. matter which way you slice it, the chunk of money. are we mostly talking childcare? what kind of chunk does that take out of a couple's earnings? it all depends frankly on how much the couple is making to begin with and where they live. they have their decisions to make. there is no really average family. ametimes they may spend for nanny and while others would send to childcare.

the cost will vary between chicago and new york or d.c. the cost may be very different. in theother surprises report? >> talking to the usda economist who wrote the report him he was noting what they are family spend a lot more because they have more disposable income. he talks about the difference between summer camp or sports team or says going out and playing in the yard. there is a lot of variation in terms of what you can spend on your child. everyone has the same aspirations. it is just the different approaches and sometimes sacrifices from a career or vacation or what sort of home you are in. the usda does not really factor in the cost that relatives may add. does not go into university education. maybe because that would be too depressing and what hurt the

birth rate. it is a very complex situation. what this does is gives you an overall picture of what does this look like in terms of the cost of raising a child. generally used to cut to a child-support payments. this is where people can see where the temperature is now. do couples think about this before hand? isn't one of the situations where we are going to have a cost and this will fortune between now and when this child turns 18 years old? >> i think they really look into it before they make the decisions. this is the reason why the fertility rate in the u.s. has not been too high recently. it has really went down during the economic crisis. i think this was the reason. for a while they were holding off. ,s the economy is improving

while the costs rise they do not rise as fast as before. maybe it will make them more optimistic. reportingrg news joining us from washington. thank you and congratulations again. 26 minutes past our. bloomberg television is on the markets. olivia sterns standing by with the details. >> stocks are trading higher so continuing to make extended gains after last week's rally. the dow up one percent. by about one percent. this comes as tensions ease over global concerns as the iraqi kurds appeared to be taking control of the most old vamp. one stock we are watching is family dollar. -- iraqi kurds appeared to be taking control of the mosul dam. offer forllar tree

family dollar for excepted would have created a new market leader. family dollar said the consideration of the new bid has not changed but the recommendation to support a merger. that is one we will be sure to be watching but helping sentiment overall.

>> welcome back to the second line" on of "bottom bloomberg television. i am mark crumpton. the latest from ferguson, missouri. the family of the pathologist hired i at the data leak shotgun put his handshave up but we do not know. an independent autopsy showed 18-year-old michael brown was shot at least six times, including twice in the head. this comes as jay nixon at announced he will not enforce a

curfew tonight after ordering the national guard into the st. louis suburb that has been the scene of protests over the shooting. the order came after a night in which police used tear gas to clear protesters off the street well ahead of a midnight curfew. protesters have taken to the streets for more than a week. wall street pros say the fed gathering in jackson hole, wyoming, is the event of the week and maybe the event of default. echo mckee says that depends on fed chair janet yellen. mckee says that depends on the fed chair janet yellen. research papers explained and discussed largely interesting on the margin. that changed after qe does for three years in a row ben bernanke used to keynote address to lay out their policy plans so it became a big deal. last year on his way out he became the first chair not to speak at the gathering. janet yellen was there but did not make speeches. we do not know which direction

she will take, academic outline or policy prescription. >> what is most likely? >> people are expecting a policy talk. speech title is labor's market. market.r i know kansas city fed people would like to get back to the old days when the focus was on the symposium, not the speech. also not clear what she would say. >> what would she say if she didn't? is lockedicy changes in. onking to the first moves interest rates. if she wants to i suppose she could given up a on the labor market -- had. put that in the context of the papers deliver there. she spoke a lot on part-time employment and how it is elevated. good story at bloomberg.com for that. it is coming down. the percentage of workers who ,an only find part-time workers

still much higher than in the decade before the recession. also talking a lot about long-term unemployed, people who have been happier or more without having to find a new job. big focus for yellen and others, wages rising at just the level of consumer price inflation. so no one is getting a raise. i talked to bob mccullough earlier who said maybe she will leave rates lower rather than longer because we can tolerate more wage inflation, give everyone a chance to participate in the recovery. go mckee, thank you. he will be headed to wyoming as we bring you exclusive live coverage of the jackson hole economic symposium thursday and friday. back to school shopping season in the united states is already in full swing with over one third of consumers having begun their shopping up from 29% who started at this time last year.

the president and chief executive of the international council of shopping centers joins me here in judeo. i'll come back. the to see you. back-to-school shopping survey found more consumers did start shopping earlier this year . why? >> the season starts in july and really kicks off in august. 60% surveyed said they will do back to school shopping and what has been the traditional back-to-school shopping month of august and still expect that to be happening. >> 90% said they would do traditional shopping in brick-and-mortar. rooming would do web with a research online and going back to the physical store. it in sumer for deals online, saidot shop online? >> 90% they would do shopping in-store. they are doing the

researching online, why not shop online? >> with older kids, the last opportunity for them to go on a shopping trip with her parents credit card. the web grooming i think is helping drive sales. doing the research before you buy, and then you go to the store and make acquisition. that is driving up productivity. feelingonsumers comfortable enough with the current economic environment in their own job situation at this point that we can expect an increase incomes -- discretionary spending for the remainder of the back-to-school surveys season? >> the have indicated the consumer feels much more confident than this time last year. when you look at the purchases, somewhere around $700 per back-to-school trip, about half

of that is electronics but the other is apparel. big increase in apparel and discretionary items. by the second pair of jeans or second outfit you were not going to get. a very positive sign the consumer is coming back. >> the indicators in the survey show optimism in the retail industry. why has the industry been so upbeat and are there tailwinds that can reverse things? >> it has been upbeat because the consumer is coming back. upbeat had a string of numbers. i think we we went -- we went through a long time where the consumer and i themselves indulgences. i think with job security and jobs back, they are spending more. that is a positive thing. this is one of the first years we are going in looking strong. july numbers that just came out looked very strong for back to school.

we expect august to be even stronger than last year on a year-over-year basis. >> speaking to the chief executive officer of the international council of shopping center. that caught me by surprise, shopping center occupancy rates at 92%. we have not seen levels like this since before the recession. mall occupancy rates are even higher. what is leading the turnaround and is it translating to more hiring? hiring at a job that gives people a living wage? >> there is very little new industry.on in the only one mall is open. so you do not have new addition to supply in retail supply. retailers continue to look for space. they are driven by consumption growth and want to open more

stores. it is having a very positive impact on the incomes generated. >> is there a regional breakdown to this? are we seeing that more in the west that opposed to the northeast? >> we are seeing it across the country. northeast where they want to open more stores and also california where there is a shortage of supply and retailers want to open. across the board a very open thing. clearly the opportunity or retailers to open new stores is helping the employment situation. we are not all the way back to pre-recession numbers but are getting close. that is a positive thing. >> a little less than a minute left. shopping centers and malls, what are they doing to innovate at this point and what are they tong to bring the experience

more than just a shopping spree? >> when people consume, they can either purchase online, television or any way they want. our experience shows people physical shop in stores. they are creating the experience. more food, fresh food, family food. you cannot get your hair cut online or you can do that and a shopping center. pretty tough to order ice cream online. chief executive officer of the international council shopping centers joining me in studio. good to see you again. next, the latin america report. julian assange may be on the move. the latest when we return in just a moment. ♪

>> welcome back. time now for the commodities report. my colleague joins me with the details. >> a down day for oil and gold as global tensions ease in the middle east where the latest military action pushed back insurgents in iraq. is another metal shining, polizzi him. looking at oil, brent and imax. brent crude falling to the lowest level in almost 14

months. advances made to reclaim control of the largest dam together with an increase in the oil production are putting rusher on price for strategic energy and veteran air trader. the risk premium is declining. he said people are pulling out of the market. despite the lower prices for gettingures are gasoline. that is a boost. hedge funds have raised bullish positions by 13% in the past week. butl others markets, despite the pickup and buyers gasoline futures have dropped 10% since memorial day, giving car owners a break at the pump. is average regular price $3.45, the lowest since february. the big question is whether we will see it come up a bit going ato labor day. >> palladium

a all-time high. >> while it gave back earlier gains at the close, coming off the longest run of gains in more than a month. it is used in catalytic converters in cars. right alongside with platinum. it is up 25% this year as auto companies are using more and supply was cut either the mining strike in south africa that ended in june. according to a commodity strategist, concern about palladium demand continues to drive trading. it continues to be a star performer for the year. you can continue to see the strong rise. that said, it offers as much as one percent earlier. barclays out with a note about gold, saying it is struggling to attract wider investments but they see it going higher. >> to keenan with the commodities report. time for today's latin america

report. tw telecom et al. yet preparing and offer valued as a much as 700 billion euros to out bid in the race to buy the broadband according to people familiar with knowledge of the plan. -- the broadband unit gvt. they would get a stake in the entity that combines the units. telefonicaon -- offered 6.7 billion euros, mostly in cash for gvt on august 5. or the last -- for the last two years julian assange has been embassy in ecuadorian in london. includingcables communications about foreign governments in the wars in iraq and afghanistan. he sought asylum in the

ecuadorian asylum. that is sure latin america report for this monday. nasa designed a heat shield to protect astronauts returning to mars. running through the atmosphere 20,000 miles per hour. taking a look at the futuristic design that makes it possible when bottom line returns in just a moment. ♪

>> the world's most nb&t sheet will protect mars caps on its first test flight later this year. the main function is to keep the cap so cool as it screens back from deep space through the earth atmosphere at 20,000 miles per hour. it also has to be strong enough to cradle the capsule when it slams into the pacific ocean.

♪

>> "street smart" comes in at the top of the hour. matt miller in for trish regan. on, ihave so much going do not know what to focus on for you. we have the ambassador of bahrain, extremely import and one step away from iraq. --ave the deputy secretarial the pd secretary to the you when and the leader of the largest not only teachers union but .argest union in the nation in i hope you will stick around and watch. >> i will be here.

thank you so much. stay with us. another check of the market movers on the other side of the break. "bottom line" continues in just a moment. ♪

>> get the latest headlines at the top of the hour on bloomberg radio and streaming on your tablet. that does it for this edition of "bottom line." i am mark crumpton reporting from new york. on the markets is next. i will see you tomorrow. >> it is 56 past hour, which means bloomberg television is on the markets. i am olivia sterns. inning you caught up on where stocks are trading. stocks are higher across the board. the s&p and dow both within one percent of the all-time record highs as tensions appear to ease over the tensions in iraq as the kurds moved to retake the

mosul dam./ ukraine easing. overall equity markets higher. not just equity markets higher. this morning we got a report that confidence among homebuilders is that the highest level in seven months. joining me on what this means joins us fromho princeton. the numbers show the industry is making headway after weakness earlier this year. should we stick this is a time -- take this as a sign of a turnaround? >> this is a group looking for anything positive to drive them. you have to remember that confidence index measures builder sentiment. we are looking at a time now versus a couple of months ago when it was really well. i think the gains the past couple of months were driven by improved the for market. confidence is improving. still patchy recovery and

housing increased did increase in the midwest and northeast while it was weaker in the south and west. how does this match up with what you are seeing from homebuilders ? >> we did see declines that account for 80% of industry sales. if you look over a three month moving average, we are up across all regions. builders are seeing strength in in the sun belt, texas, florida and texas in particular driven by strong local economies and job growth. that market shows us the housing grow provided strong economic support. >> builder confidence has had historically a strong relationship with single-family housing starts. what do you make of the trend between the indices and the current cycle? been aink there has little bit of over exuberance from the cycle but i also think it shows how the cycle has

trended. typically it begins with volume sales at the lower level and would show up in housing starts. this cycle is driven in that it is driven by pricing. isyou compare pricing, it different. in order to sustain the level of confidence, we will have to see improved sales. tohow important is it driving a broader recovery and now the u.s. has added over 200,000 jobs each of the past six months. is that enough to drive a housing market? >> i would argue the labor market is the single most important factor needed. we finally recruit -- recoup the jobs we lost during the recession. that being said, a lot of the jobs were driven out low-wage industries. over the past couple of months we have seen positive indications there is a handoff to higher wage industries and provide that we continue to see higher growth, that should help to drive household formations. >> thank you.

through reading joining us from the offices in princeton. -- drew redding. we will be on the markets again in 30 minutes. ♪ >> stocks rallying more than a week. yellen.althy dose of i am matt miller in for trish regan. "street smart" starts now. welcome to what is truly the most important hour of the session, 60 minutes left until the closing bell, and missouri is deploying its national guard in ferguson as violence over ineal