>> we are moments away from the closing bell. this is the bloomberg market day. i am alix steel. it is read across everyone's screen. is red across everyone's screen. the dow around its session mows. we are kind of in the same.

most stocks are finishing lower and all of the sectors in the s&p are finishing lower. red day.ugly, gross, eye isck that caught my joy global. they were saying below into of earnings for the end of the year, but they did not say any bad news. no more bad news out there. our commodities going to turn around? >> it was a red day. i was excited by the initial claims number. it is so consistent. it is not the end-all and be-all. i never get too worried when i see it surprised to the downside. alix: we have the jobs data

tomorrow. i was fascinated by the grease eeadlines -- the greec headlines. they are the first country to do that and the only other country that has done that is the zambia. ae: there was always possibility that this could happen, but now it is official. the other surprise story had to do with the ims. the imf told the fed what to do. let's hear what christine lagarde had to say. forstine: there is a case waiting to raise rates until there is more of a tangible sign of inflation. hike would beate

better off in early 2016. joe: everybody was surprised by this. i cannot believe the imf is telling the fed what to do. the fed -- they have advised the bank of japan. -- i think americans think, i cannot believe they are telling us what to do, but they should get over it. yellen isthink janet going to consider what christine lagarde said at all. i do not think it will have any impact on policy. but i did not find it to be that ridiculous. alix: we did see reaction in the bond market. -- we had the 10 -- year yield at its highest

level since october. the yield continuing to grind lower. joe: we had this crazy three-day move and then it faded. imf -r point about the -when i first saw the news, i was really stunned, but i switched over to the other side. the argument from a pure data perspective. it would be risky for the fed to tighten too soon and if they will be data dependent, wait a few more months. they are kind of right. the fed has missed its inflation target for a long time. no indication that inflation is about to overshoot. i kind of think they are right. what is the rush? why hike in september? alix: we have some breaking

news. gap same-store sales. julie: sales up about 5%. the company's earnings per share ahead of analysts estimates. the ceo saying the second quarter was important, they rolled out some new products. clients are taking notice of that. third-quarter earnings and sales, both are falling short of estimates. that appears to be driving down those shares of verifone. the gap has been experiencing sales declines. those due continued, but they are smaller than estimated. the estimate was for a decline of 2.5%. old navy continues to be the standout. old navy up about 6%. banana republic sounds -- sales down. joe: julie hyman. let's bring in the chief u.s.

economist at bloomberg intelligence. also where this is adam parker. jobs day is tomorrow. officially the best day of the month. what is going to happen? >> i think we will get a trend like job day. firmness,ttle bit of we could see something closer to 240. is ang as the first number 2, you can ignore it and move on. the other thing is the unemployment rate. a good chance the unemployment 5.3%.ould inch down to that is not the consensus view right now. that continues to make the case for janet yellen. theirisn't there range --

5 to 5.25? carl: we will probably blow through their target. the labor market moving in the right direction. i do not think there is a huge gap in the view of the world from janet yellen versus christine lagarde. for them to be that specific was taking a step over the line. the stocksu think are pricing and something optimistic or pessimistic? adam: it does not matter. the fed will move data .ndependent that has been clear for the last couple of months since they changed the language. me.oes not really matter to if i give you a list of statistics about the u.s. economy and i asked you what the interest rate should be, it it would not be zero.

they will change it ultimately because they need some conventional policy. -- i do notlly know really care that much. as long as you leave earnings can grow, it is ok. grow, ite earnings can is ok. should investors care about what happens with the job report? adam: of course, not. but they will. one thing that has bothered me about the jobs data, we do a census every 10 years. we cannot even get it right. tomorrow, there will be all kinds of spasming. i do not think it matters at all . the economy is likely to be better in the second half of the year. there are some key variables. 210, 220, is 200,

could care less. >> how is the economy going to perform from now until september or december? not just focusing on the payroll change or the unemployment rate, we watch aggregate income growth. hours timesme hourly earnings, and you get aggregate income growth. that tells you consumer spending will pick up and the economy is going to do just fine and janet yellen's hopes of a 2015 lift off will come to fruition. i do not want to rain on your parade. jobless claims measure lay off. .ayrolls measure hiring normally there is a strong inverse correlation between the two. mid to late cycle, that relationship tends to break down.

it is a classic example of why late in the cycle, turn down the dial on jobless claims. it matters. no doubt it matters. that thehat i know was fed is going to act this year and what i am supposed to do is buy u.s. financials. they cannot even measure at that accurately anyway. why am i focusing on something -- focus on the bigger picture. let's buy the stocks that will participate personally. -- proportionally. alix: i want to bring in an interesting chart, the spreads between a high-yield versus investment-grade. we are seeing this divergence. the high yield spread is tightening. the orange line is going lower.

at the same time, you are looking at not so great cpi, not so great gdp. it is still a risk on trade, baby. >> it should be. the u.s. economy is going to improve. estimates are too low. u.s. stock markets lad. the probability of a recession is pretty low. >> very low. early to mid-stage of the economic cycle. we do not have inflation and we do not have labor costs. do not look at the calendar and say, the cycle is six years old. look at the fundamentals. alix: much more about stocks as &a.l as m dealmaking is back.

did it ever really go away? ♪

alix: welcome back to the bloomberg market day. greece is the first country to defer payment to the imf since the 1980's, since zambia. it would delay a payment and submit a request to bundle payments totaling $1.7 billion due one lump sum payment june 30. >> as indicated, including as late as last night, payment had been honored and would be

honored. his words were, do not worry. confident that will continue to be the case. alix: greece has rejected the latest proposal from its international creditors. there is a conference call tonight with francois hollande aunt angela merkel. we have the result of a three-year landmark study on the impact of fracking. it has contaminated some drinking wells, but the impact is not widespread. the controversial drilling technique could affect drinking water if safeguards are not maintained. fracking is when chemicals are shot into underwater shale formations. southwest airlines knows how to draw the crowd. so much demand for air fares as website wasthe

overwhelmed and many people could not but the trip. to end atas supposed midnight, but the airlines is extending it to friday. iscks falling extending it to friday. stocks falling to lowest levels in almost a month. adam parker is not worried. it is m&a, an enormous part of this market. we are looking at $2.2 trillion this year.a so far adam: it will continue. it is hard to bet against roll up's and health care. health care.n the way to play it is small caps. play the brokerage firms. it is a positive for the market overall.

i do not think it is a sign of access. excess. julie: the fda has been considering once again approving a female libido drug. this film -- this drug was rejected in 2010. it is made by a privately held company. the panel took up the issue again and voted 18-6 that this drug should indeed be approved. there were trials of the drug that did show some success, but it was rejected in past reviews. this would be the first such drug on the market. when be significant if and it does get approved by the full fda. when you have these advisory panels approve something, it typically does get approved by the full fda. adam, when you take a look

at the space, is there one sector that does not have as much m&a that will in the future? adam: the financial sector way below average due to government regulation. that could slowly change. that has lagged for obvious reasons. you see the most deals in health care. we track the fraction of companies receiving tender offers. it is starting to get above-average in a lot of places. unless rates backup to the point where the deals -- i think it is a positive at this point in the market. given how much the stocks doing the acquiring are going up. alix: that is a good point. are you worried that -- they cannot find any organic growth,

so they have to go buy it? adam: the mega cap companies doing big -- the market is telling those companies, the benefits are not as good as my fears about your long-term growth rate. they look around and say, how can we grow? they will look to see if it is m&a. i do not understand how the do not want to own a portfolio of companies that have high cap backs to sales. it is very unusual. i do not think the company see a lot of demand drivers out there. i think they are being prudent. i do not think they will do either. talk on ays good to day like this.

adam parker, strategist at morgan stanley. much more, stay with us. back in a few minutes. ♪

alix: the international monetary fund tells the fed what to do. christine lagarde moved markets when she urged the world's most powerful central bank to delay its rate hike to 2016. she explained herself in a news conference this morning. christine: we agree with the president of the fed in that the interest rate hike must be data dependent and based on sound and detailed and granular data and

analysis as is possible, which is clearly the line that has been articulated by chairman yellen. we totally agree with that. ,hat we are seeing in the data the team is analyzing, the inflation rate is not progressing at a rate that would risk -- i canut that in a second -- a rate hike in the next few months. to make the point, we are saying the economy would be better off 2016the rate hike in early win the inflation -- when the inflation data and numbers would have consolidated. slight is to a risk of a over inflation relative to the

2% rate which is mandated. we believe the trade-off between starting to early -- starting to early and risking deep inflation and having to return to a lower rate is higher than the risk of slightly above 2% inflation going forward. alix: bill gross is watching the big reaction in treasuries. commands ank lagarde presence and she speaks from a global standpoint to the extent we just talked about, the dollar should be constrained in terms of its appreciation. lessons.ellen good for lagarde. i am with her as far as her

lower gdp estimates. alix: his former colleague was surprised by the move. he explained that to pimm fox. >> it is unusual for the imf to be so specific and explicit about a policy action. and it was today. it told us that it should wait until 2016 even though the data remains very fluid. this speaks to market volatility. fed officials have been going out of their way to tell the markets, stop obsessing about the date of the first rate hike. this will be the loosest tightening in history. comments,with the imf the question of the date is back front and center and that imparts additional volatility to financial markets.

mm: what do you believe the effect would have been if christine lagarde had not come out with the specific date? >> i would have expected the imf to say something along the line that the fed should because this about the timing of its first rate hike because the u.s. economy remains fragile. there is no inflation on the horizon and the international situation is far from stable. by going much further and specifying a date, you saw the movement. the 10 year in the united states moved 17 basis points in an hour this morning. that is a huge move for a benchmark that determines pricing and so many other markets. alix: most believe the fed will raise rates in september.

watching on this volatile day. . am alix steel have a wonderful rest of the day, everyone. ♪

announcer: from our studios in new york city, this is charlie rose. charlie: elizabeth holmes is here, she is the founder and ceo of theranos. it is a blood analytics company that has developed a new approach to blood testing. these tests detect a number of conditions. her goal is to transform health care through prevention and early detection. she started the company in 2003 when she was 19. it is now valued at $9 billion. she is the youngest self-made female billionaire in the world. "time" magazine named her one of the most influential peoin