>> we have a strategist expects things to move higher, but it could be a bumpy ride. "minions"u can thank for cheaper delivery. pimm: a startup called chill cvs and companies like walgreens are watching it very closely. ♪ olivia: good morning. i'm olivia sterns. pimm: i'm pimm fox. you are 90 minutes into the trading day so let's take a look at how markets are trading right now. bitks moving a little higher. they were low for most of the morning session. dow jones higher now by 16 points. the game ofx with just one point. people focused on retail sales

report this week and the speculation on wednesday federal reserve will raise interest rates. olivia: let us show you what is happening to treasury yields right now. treasury yields rise interest of prices. the 10 year yield is at its highest level and has been this year. .ast time i checked, 2.45% pimm: now let's take a look at some of the top stories is our. general electric taking another step to retreat from ranking. -- banking. it has agreed to sell its private equity business to a canadian pricing board. the price is $12 billion. this is the first sale of a major business since ge said in april it would unload $200 billion worth of ge capital assets. saysargest bank in europe it is going to cut thousands of jobs. the action designed to increase

profits. in the next two years, hsbc plans to eliminate as many as 25,000 jobs. 10% of itsut workforce. the chief executive is trying to cut costs by about $5 billion a year and the bank will also sell its businesses in turkey and in brazil. >> turkey had limited value to the franchise and that is why we made the announcement that we have. wereill also see that 40% in an overturned market. we will address it separately on following praises. -- pages. i think it also proves the fact that there are no sacred cows. no sacred cows. hece golda has taken over, th has announced 87,000 job cuts. he has also reduced the amount of countries in which hsbc operates. forecast rose in april.

this is up to 5.4 million. this is the highs level in 14 years. rates of hiring and firing decreased while the number of americans quitting their jobs remained unchanged. that is a sign of confidence on the part of workers and could lead to wage growth. shares of american and delta airlines are following this morning. american joint the delta in cutting its revenue forecast. they said revenue will fall from 6% to 8% and this quarter. amid concerns of the domestic air marker is getting we could. saudi is firing the latest shot in the battle of german automakers. audi ceo is pledging to safeguard driver data rather than profit from it. google chairman eric schmidt was at the conference and audi said they wanted to not have their data set to

marketing. revamped mercedes e class sedan will have a self driving system that can go up to 80 miles an hour. drivers will still need to have their hands on the steering will. ableystem will not be i to handle sharp turns by itself it those are some of the top stories is monitored -- this morning. pimm: coming up in the next hour, amazon thinks outside the box am a literally. giants thinks a the animated movie "minions." and his voicemail even necessary anymore? and bloomberg business talks to tampa bay lightning owner jeff minnick about hockey. that and more coming up on bloomberg market day. olivia: we are looking at equities been european stocks are down for the six day. 's benchmark in frankfurt

is often percent from its recent high. the dow gave up its games from the recent highs. our next guest says that they will continue to move sideways, but the bull market still has room to run this year. pimm: julian manual is here with us right now. give us your prognosis for what happens to stocks the rest of this year without an increase in interest rates. >> without an increase in therest rates -- well if is no increase in interest rates, what we get is an economy that is perhaps lower than what everyone expects, but you still have cheap oil. interest said, low rates. and that kind of environment, if people are prepared to look through earnings into 2016 as has been the case for most of this year, we think multiples can expand and you can still move higher. olivia: your year and target is

20 to 25. that is pretty much in the median, dead in the middle of a bloomberg survey. and yet your call is for the fed to in fact raise rates this year. in thewe get a 7% bond s&p 500 when it is no earnings growth? julian: the backdrop of where the fed is coming from the oil is still cheap and interest rates are still low on an absolute basis, which is why i think you have seen so much volatility in the fixed income market not translate into the equity margaret -- market because you are in that 2% from the 10 year yield. to the fed, you still have room for multiple expansion in an environment like that. pimm: explain the connection between recession and stop mark movement. -- spot market movement. work shows that over the course of 50 years or more, you do not have bull market finish without either a recession or the fed capitalizing a reception --

recession. pimm: only recessions kill the ball? he bull? julian: exactly. the said is cognizant of raising rates so that growth will not be threatened. fact, our work shows that once you get the first said rate for subsequently two years and on average go 33% higher. olivia: there was research put out this morning that says in the quarter after the last 12 tightening cycles began, price-to-earnings ratios actually contracted by an average of 7.2%. that would suggest that equities cannot withstand higher rates. julian: in the very near term. would expect a similar reaction because it is typical of volatility to increase in and

around the time that that the fed does get active. in a lot of ways, this year has been a bit of a treat for investors not having been as volatile as one might normally expect. ofwould expect a little bit pause and hesitation. pimm: i like this combination. going on between the strength of the u.s. dollar and energy prices and why investors need to pay attention. julian: sure. the u.s. dollar has in one of the things that the fed has really focused on in terms of showing restraint. it really doesn't want the type of depreciation we have seen over the last nine months to continue, simply because it is affecting earnings negatively. again, the energy price decline has done the same. perhaps, even to a greater extent than we would have figured because the consumer has not spent to offset the gasoline price reduction. we do expect that as the year goes on that the consumer will begin to get a bit more confident and spend a bit more.

but it is definitely a concern that we are going to have in mind. dovia: what other sectors you like in this environment of raising rates? the lastf you look at six years or so, the one area that has been punished has been cash. you have no return on cash. we are now anticipating that there is about to be a return on cash. companieske are the throwing off lots and lots of cash. you see that and health care, technology, financials tend to do well and rising rate environment as well. but these companies had better earnings profiles and can take their cash and use it for mna and buybacks, which as we all know has been part of the power and bull market these past years. olivia: some might say the key driver. ,ulian: given the fund flows that is a point that cannot be disputed the coast flows are anemic in u.s. equities. and buybacks have supported prices. pimm: i want to thank you very much.

fromn a manual joining us ubs. i appreciate it. still ahead, why amazon is placing ads on its packages. details ahead. ♪

olivia: welcome back. i'm olivia sterns. pimm: i am pimm fox. let us go to julie hyman with a look at what is happening in the market right now. you are looking at possible warning signs for the bull market. you were talking about the rising rates turning to volatility. what are warning signs? stocks word declining today until a few months ago --

moments ago. let us look at the dow year today. briefly today as it has been in the few weeks periodically dipping into the red, it looks like it is still down there. it is a racing any games that we had seen for the year. one of the things that we happen credit to callie vos on the print side. you can read her story on bloomberg.com. she is looking at the percentage of stocks on the s&p 500 who are trading above or below their 200 day moving averages. that number has been going down. and other words, is a measure of breath in the market. while overall it might be higher, how many individual stocks are gaining momentum? this is a percentage of stocks moving about that 200 day trading average. ,f you look at the year to date the numbers have been going down. right now, it is about 59%. it is trading at an eight month low.

we have beene that highlighting periodically is the dow jones industrial this is the dow jones transportation average. to doware subscriber is declining in transportation, that is not a good sign. here are the industrials and yellow. we have seen an underperformance there. i also wanted to point out something that may be weightcant in terms of for the s&p 500 and the doubt. that is apple. the movement that we have seen an apple has had its fourth straight down day. that is the worst performance in terms of that streak that we have seen since january. so maybe a warning sign. olivia: interesting. julie hyman, thank you so much. our senior markets corresponded. pimm: let us look at the top stories crossing the terminal right now. the trader blamed for helping costly 2010 flash crash faces and asked her to your --

extradition hearing. held in prison since his arrest in april. and united states wants to extradite him and put in on trial for market manipulation as well as wired fraud. feelingpackard is still the aftershocks of that ill-fated takeover of software maker autonomy. hewlett-packard will pay $100 million to settle a lawsuit by shareholders who say they lost money on the deal. hewlett-packard ended up writing off almost all of the $10 billion purchase price after claiming that autonomy misrepresented its value. netflixcan call it style noshing. bloomberg news is reporting that catalog is looking to -- kellogg's is looking to start a subscription snack service. they have assembled a team in the direct to consumer food business. just last week, general mills and in its subscription snack offering after a year and a half. and those are your top stories.

thinkingmazon is outside the box with some help from "minions." they are placing ads from the universal picture on amazon prime boxes until its release on july 10. pimm: it is the first time amazon has placed ads on its packaging. the revenue will help offset the cost of one and two day deliveries that across -- promises to customers. logistics now is a consultant. he joins us from pittsburgh. just outlined the business case for why amazon would put minions advertising on its packaging. tim, this is a brilliant move for amazon. when you realize that the number of packages that amazon is shipping every day is more than five competitors it has in the e-commerce space, and that includes sears and walmart and staples and macy's.

this gives them about $20 million a day for putting those ads on. we have estimated that they are going to spend about five cents per box. with that ad, they will get about $.30 per box. that is a lot of money they're going to generate. keep in mind that they spent $8 million a year in transportation. they collect about 4 billion from the prime members and others. that is still a net difference of $4 billion. these kinds of initiating that they are pursuing, others cannot do that. and i'm really impressed with this move. at a timefirst one that a company has done it. what you are saying is that amazon prime will be

subsidized by the branding on the boxes, but it will not recoup the cost. amazon is not going to recoup the money that it is still offering everybody for two day deliveries. satish: the gap is quite a bit larger than what is wins a help, but this is one of the ways that they are finding a way to create a competitive advantage against others who have to offer free shipping. they don't have this kind of revenue source to offset it. at details. looking 40 million amazon prime members. shipments perime day. they spend more than regular amazon customers. are we going to see more deals like this? satish: absolutely. there will be others that will see the kind of advantage that we get advertising through this rather than television. this is as direct as you can be. when you consider that amazon is shipping 3.5 million as he mentioned and fedex as a company , which is in the delivery

business, delivers 7 million packages a day, and ups delivers 12 million a day or 13, they are fast approaching the volumes of fedex and ups. they are able to leverage this to a greater extent and that will only increase with time. olivia: we know that amazon does not care about being in the black. what do you think they're going to do with the savings? are they going to pad the bottom line or are they going to pass on the customers, which leads to discounts for consumers? don't know if it leads to discounts, but this means they continue to offer free shipping and building the scale that they are doing at 20% a year. the things that they can attract when they are delivering 5 million, 6 million, 7 million packages, the opportunities are infinite. pimm: last point to you, there is a campaign on social media #minium boxes. you post a photograph of

yourself with the minion box from amazon and it enters you enter a $1000 amazon giveaway sweepstakes. is that also important and you see that being replicated? satish: absolutely. this is a series of things that they are doing so hot the customers into the amazon business model. is more ofre something like this to be coming forward. pimm: are you going to see the movie by the way? satish: i have to now. i like "despicable me." i'm looking forward to it. pimm: such east jingle is the president of sj consulting. olivia: still to come on the bloomberg market day, her voicemail be going the way of the voter a phone -- rotary phone? i hope so. we will discuss it next. ♪

you have voicemail messages that have gone unchecked for days or weeks or months? you're not alone. olivia: fewer people are using it in some companies are getting rid of it to reduce costs. now we look at who stands to lose and why. telegraph, the pager, the typewriter -- no one really uses them anymore. and this -- >> you have reached the voicemail of remy innocent seal. was another sliding into the history books, to good the early days yet, but pushing the downturn are companies like this. says itple, jpmorgan will drop service for about 136,000 consumer bank employees. that is 56% of all staff. 3.2 millione about dollars. coca-cola also said the same thing. they are dropping voicemail at its atlanta headquarters to the

tune of about a few thousand. 100,000 dollars. citigroup and bank of america are reportedly thinking of dropping voicemail as well. while it is saving money for these companies, voicemail service providers like all these stand to lose. you might have heard this before leaving a message. take a listen. >> your call is being answered by onyx. owned by of i.f.k. cisco, microsoft, mitel, as well as an easy are other major providers that should be watching the voicemail slide. while voicemail use has declined, texting has rocketed. it is faster and people are simply more mobile and with more mobile phones. in 2000 for example, u.s. mobile phone since about 12 million text each month according to a march 2015 nielsen ctia study. but that is nothing compared to 2014 when 561 billion text were month.ch and every

that boils down to nearly 500 text the month. compare the rise of the text and the fall of voicemail they are intertwined. olivia: that was bloomberg news. i hate voicemail. pimm: you hate voicemail. you hate rotary telephone. olivia: only by lovely mother who is probably washing. she probably doesn't understand why i don't return them quickly enough. i loved listening to voice no. i'd rather someone send me a text saying, hey, what is going on. pimm: what about the record? olivia: the text is the record. pimm: you can do things to attacks. sometimes, you don't necessarily call someone's telephone mistakingly, but there have been situations when people mistakenly tax. do you want to text things in

the open like that? i guess you don't use a rotary phone either. olivia: i guess you have a typewriter could pimm. pimm: how to write letters? olivia: i don't. thank you for having me. it is a pleasure. i will see some rfid -- you tomorrow. owner ofll ahead, the the tampa bay lightning sisi is not just hoping for a stanley cup win. he's telling you what also will be happening in tampa. that is coming up next. ♪

back to "bloomberg market day." i'm pimm fox. let us look at the top stories of the hour.

the general motors board is telling fiat chrysler that it will pass on merger talks. made thef executive offer and in the e-mail in which gm directors refuse. pressing fors been compression, but gm's chief executive says the company has decided its own plans for efficiency growth can generate more value than a merger. there was some tough talk about greece today from germany's finance minister. wolfgang says that the ball is in greece's court in the country must decide if it wants to carry a difficult load. greece has just omitted a new proposal to try to unlock some of that bailout money, but one national official told bloomberg it is just a rehash of older plants. and former house speaker dennis astor is set to appear in federal court in chicago. he is accused of breaking banking laws and lying to

investigators. the indictment says he paid someone $3.5 million to cover up past misconduct. as he prosecuted charles manson and wrote a book about it that became the basis or two television movies. " authorskelter, quot has died. it was the story of how charles manson followers killed actress sharon tate and six others in los angeles in 1969. it was one of the biggest selling crime books ever. and those are your top stories. the markets are now closing in europe. for the very latest, we want to go to bloombergs mark barton in london. ark: the index falling to its lowest since february. the longest run of decline since december. it is focusing on chinese inflation data, pointing to tepid demand of that home and abroad. yesterday, i was telling about the index entering correction

and continuing its downward slide. it has lost 150 billion euros in value since its april record high. some risk by the aac in athens today. the greek benchmark rising 6/10 of 1%. the officials within greece submitting fresh proposals to its creditors to unlock fresh bailout funds. but one international official says the revised plan is "a vague rehash of earlier proposals and isn't considered credible." if you wanted evidence of the breath of decline across the european markets today, this is a subsectors of the stoxx 600. every single one of them declining on this tuesday session. this is the big corporate story of the day. hsbc is cutting 25,000 jobs. operations inoff brazil and turkey. that will reduce the headcount by another 25,000. they want to achieve cost savings of 5 billion by 2017.

shares down by 1% earlier. 1.5 billionwn pounds in market value. withquickly, little change stoxx 600 banks index. it is up by 13%. hsbc underperforming your today. back to you and your -- in new york. pimm: that was mark barton reporting in london. coming up, lots of money lining up behind a company that sorts, organizes, and ships your pills to you. we're going to introduce you to pill pack. it is one of project runway mentors favorite websites. we are talking . lane's with one kings cofounder. and a new startup called c taylor's. they're going to start talking with george p the stories and more coming up on bloomberg market day.

the tampa bay lightning took the lead and a hockey stanley cup finals last night. the lightning beat the chicago blackhawks. now they are up to-one in the best-of-seven series. erik schatzker and stephanie ruhle spoke this morning to the team's owner jeffrey bennett. he says he has big plans for his hockey franchise. my formula for success is roughly breaking even or having a great team every year and being able to compete for the stanley cup and making a big impact on the way, we make no apologies are being down in tampa bay. the sport of hockey is the greatest sport there is. great athletes, fast-paced, close games. and hockey can thrive anywhere. and tampa bay -- we have talked about that we would love to be the green bay packers of the nhl. no reason that we can't a couple's that. it is the world's best sport. it is going to succeed in tampa bay and other places. stephanie: the floridians like octave? -- do floridians like hockey? jeffrey: of course.

who doesn't like hockey? as they go to games and learn about the sport and our players, they love hockey. our tv ratings down in our area are triple what they have ever been before. people are learning the sport and figuring it out. the same could be true in south florida and phoenix and st. louis and nashville and dallas. it just takes time. erik: you don't have to persuade me to like hockey. i love hockey. don't you have to work that much harder in a place like tampa bay to make a success of your team and bring the fans and? in? let us take in the toronto maple leafs. they have been among the losing his clubs in the league. it is a constant source of hard it. and yet the value of the club has risen to $1.3 billion on back of nothing. they never make the playoffs and they didn't again this year.

numbers -- you can't always believe those numbers. more portly, i do think that it is fair that we have to work inder and we have to be big the community and we have to give our fans a great experience and do everything to really outstanding levels. but still, the sport is terrific and the athletes are terrific. a can succeed in all climates. erik: here is a question for you. you are a public markets guide. you ran magellan, the biggest mutual fund in the world at fidelity. you then read a hedge fund. now you are in tampa bay. you are the owning of the lightning. owner of the lightning and a part owner of the boston red sox. and all of a sudden, you are about real estate did how do you make that transition and why tampa bay real estate? jeffrey: i'm a lucky guy because i've gotten to reinvent myself and do interesting things with interesting people. whether important thing

you are in the money-management business or in the sport business or in the real estate business -- it really comes down to having great people. maybe i am an expert on hedge funds and running money, but in the hockey, i'm not an expert. in real estate, i'm not an expert. but when i try to do is surround myself with the best people and hire the best advisers. we think we have a very exciting opportunity for us and temper. -- intensive. 40 acres of land downtown surrounded by water on three sides. for to much surface parking lot. we have a blank canvas unlike anywhere else in this country. and we think it is when to be a great location for corporations to move into, for retail, for residents. it could get up to 2000 units of residential. stephanie: could one make the argument that you have a blank canvas for a reason? if it was valuable, when someone have done it already? jeffrey: i don't think so. at the great opportunity. what happened in downtown tampa

was that the arena was put your 20 years ago. the history center and the convention center are other great anchors and the aquarium. they were put here with the idea of developing all this downtown real estate and was never any one owner for all the land amid the downturn of the mid to thousands. i think those two factors made it difficult to develop. now we have such a supportive legislature with the governor and the state. andmayor and the governor the county legislators, etc.. ,ne owner of all this land myself with cascade investments, that sets us up for the ability to create a great billion dollars live, work, play 20 47 environment. i know that's a cliche, but it is really true with what we have tried to create. pimm: that was erik schatzker and stephanie ruhle speaking with the tampa bay lightning owner. still ahead on "bloomberg market day," an online pharmacy startup with more than $50 billion in

venture backing is taking on cbs and walgreens. you are going to meet pill pack coming up next. ♪

pimm: welcome back. i am pimm fox. we want to look at some of the top stories crossing the terminal right now. new jersey governor chris christie has scored a victory of the state unions. the court ruled that kristi does not have a fund a $1.6 billion pension budget gap. the new jersey supreme court that it is up to the state -- ruled that it is up to the state legislature to solve the problem. that could free up a political issue should christie decide to run for president. mcdonald's reaching back to the

early days of obama's administration for a new head of human occasions. mcdonald's named robert gibbs to lead its global to medications division. he was obama's first white house press secretary and a strategist on both of his presidential campaigns. he will report to chief executive steve easterbrook, who took over as chief executive in march. it is time to pull mcdonald out of a prolonged slump. in colorado, a camp opening next month calls it the first marijuana for friendly resort. -- marijuana friendly resort. it will not provide guests with marijuana, but they will have to supply their own. they will be offered a number of activities including marijuana cultivation. in 2012, colorado authorized the recreational use of the drug. and those are your top stories f. lou a green is now worth about $2 billion. they have ingredients and recipes for you to cut yourself.

it is a huge success in new york and expanding across the country. today, it announced that it raised $155 million led by fidelity investments. erik schatzker in stephanie ruhle spoke with the chief executive about taking waste out of the supply change. -- supply chain. matt: we are working with pharmacies across the country. and we are working to take waste out of the supply chain. on the consumer side, we are portioning food into exactly the right quantities so you're not throwing out food. side, since we have subscriptions, we are planning our demand really well. we do not take inventory up perishable food like a grocery store at us. on our supplier side, we are hundredso closely with of farms and different families and businesses. we're working with them to plan the production, too. pimm: that was erik schatzker as stephanie ruhle speaking with blue aprons chief executive,

matt salisbury. online since christian truck company tell pak wants to be your pharmacy of the future today. founded in 2014, tell pak offers oftomers packages personalized shipments of prescription drugs every two weeks. with an additional $50 million in funding to help it grow, pill pack wants to remake of traditional pharmacy model. the chief executive and founder tj parker joins us now from boston. extra being with us. describe how the fact is different from using other online pharmacies. t.j.: the goal is to make the end and experience really simple. we presort and packager medications into individual dose packs based on when you take them over the course of the day. you get one for 8 a.m. or 12:00 a.m., whenever you take your meds. mobile tool.ble we have pharmacist available 47 ther sale the -- 20

online or chat. i want to speak to just a general trend of americans taking more prescription drugs. the countryy 10% of is taking five more prescription medications every single month. that is about 30 million folks that are dealing with this problem. i think there is a real opportunity to make this a much better experience rather than something they are managing themselves. the goal of tell pak as to court may all that for them, to manage their refills so they don't have to stay on top of that. to correlate with their insurance companies to manage all that for them. there is quite a few folks who are dealing with this problem every single day. pimm: how are prescriptions currently filled? what is the breakdown of the marketplace? 85% of prescriptions are filled up brick and mortar pharmacies. 50% are filled at no order facilities. we really view our competition as brick-and-mortar stores group that is of fast majority of volume today.

customers who want to have interaction and a certain amount of immediacy are going to the stores. and traditional mail order model is not delivering that type of expense. we think there's an opportunity to do what is being done at brick-and-mortar but a lot better. pimm: i want you to explain a little bit about the goals of toll pack, where you are located, and what you plan to do with that money. located ineam is boston. the facility we distribute from is in new hampshire. we have what we believe is the future to build a retail pharmacy. we will build facilities that would reach the vast majority of americans, so places like new york and be able to deliver as well as though that infrastructure to scale and business. a log of the b raised is about increasing awareness of the brand and getting more co-packs into the hands of more folks. pimm: tell us about your background of pharmacy. t.j.: i am actually a pharmacist familyroaned up in a

who owned a mom-and-pop pharmacy. as a kid who work behind the counter and deliver medications to people homes. that is where i understood how big of a problem this was good there is a different color for each time of the day. excelne has this spreadsheet with their medications crossed out highlight. they were trying to manage this. i went off to pharmacy school thinking there was a better way to do this. i've separately got interested in design and technology. tell pak was a great way to combine those things to fix what is a currently broken experience with something we think is simple and delightful and much easier. pimm: what about insurance companies? have a sign on? -- how they signed on? t.j.: we have. all you have the pay is your co-pays so doesn't cost you anything additional. there are no shipping charges are packaging fees. roughly takes five minutes to sign up on tell pak.com. we are excited to service more

customers and this will allow us to do that. pimm: thank you very much. that is tj parker joining us from boston. still ahead on "bloomberg market day," i'm speaking to the one kings lane cofactor and why the future of furniture sopping -- shopping is look at on your phone. details ahead. ♪

the: it is the start of summer season, which for many people means it is time to rent or buy a summer home. with new homes comes new furniture. in flashland offers sales. it is trying to push you to buy furniture using your smartphone. bloombergs betty liu had a chance to speak with a cofounder susan kings lane, feldman, out in a chilly montauk. betty: it was chilly. i thought it was warm here. it was at the great cost partners annual event.

it was the montauk yacht club. beautiful scenery. a great place to talk about all that is new and innovative in the tech world. so one kingsland is one of the most successful online retailers. they developed and also helped amplify this whole flash sale trends. pimm: what is a flash sale trends? betty: it is a set number of items for sale for a certain amount of time. pimm: this is the going, going, gone of electronics? betty: it is the fear of missing out. i better get it. pimm: i better get it before someone else gets it first. limited quantity. betty: they expanded on that. they did flash sales may have 40 items in their inventory. now, they have 80,000 items in their warehouse. furniture --icey $5,000 dining tables and things like that, which are easy to buy

good not easy to buy, but you buy that on your desktop. it is harder to do that on your mobile phone. susan feldman who is one of the founders and chief merchandising officer of one kingsland to geted the challenge people to buy on mobile. susan: we are not their 100%. we are getting there. it is to create a different kind of experience on the mobile device then we do on the desktop. so you have to look at things differently and have to be able to shop things differently. , whichd to be inspired we are tried to integrate that content back into the mobile experience. betty: she is not alone. about 70% of people who find something on their mobile phones and dubbed on to the desktop to actually transact and buy the item. how do you flip that around? that is the quick dash key cap should -- that is the key question for retailers like her. time for today's

option insight and now it is time for julie hyman. let us take a look at how the major averages are performing. he had a choppy session. stock started in the red. now the dow is green. it is still negative on the year. let us talk options now with today's option insight. kevin kelly is the chief investment officer at recon capital partners. we were talking different the the break.ring it seems conventional wisdom that volatility is going to go up. but there is interesting trait that you highlighted in your notes to us today that happened on friday. talk me through how that works. on friday, there was a big options trade and it was done in a couple legs. it specifically had to do with the fix. it was pegging vicks to be between 20 and 30 in september 5 the fed -- are they

going to raise are not going to raise? they bought a call spread, but they also sold to finance at the level. they do not see it being lower than 15 and september. the last time the fed spoke, the vix went up. they are focusing on this that. they are very comfortable with it not being below 15. julie: is this something you would do or are you trying to anticipate the volatility already? kevin: it is a smart bet because it didn't cost much. you had to buy the long side, but they sure did the short side to finance it. it is a smart play. it is a great way to play portfolio insurance. if it doesn't go anywhere, they are none the worse. julie: there is another area where we have seen quite a bit of volatility. that is within bio techs. your trade today has to do with the biotech etf ibd. sector that tends to

be volatile. you get a study on one drug in the stocks go up. you can a study on another and the stocks go down. what are you looking at? kevin: i like to get into the top tier biotech names. if you look of the names, the top 10 holders, you can see regeneron and biogen. it is the blue-chip names. these are multi-billion-dollar names that are growing 20% year-over-year. they have great fundamentals. the pe on this etf is 25 times. since janetr 50% yellen said the biotech center is overheated the play is to buy a call spread. if you want to go out and spend $10 and sell the 390 against this, you get that out to september. it is like the play that the vix traded it. if the markets don't go anywhere, biotech does tend to is a great way to play the market and it's not that expensive. julie: the reason that yellen

called out biotech is that she was calling out momentum stocks. those can be considered momentum. those at risk -- are those at risk? kevin: everything is at risk here. stablelly on those names, because their cost of capital goes up, when it comes to these bio techs, they are generating a lot of cash. everyone knows they are volatile. they are trading at 25 times earnings. you look at stable trading at 19 times earnings -- i'd rather go for the growth. julie: thank you some much. don't go anywhere. "bloomberg market day" is continuing next. ♪

pimm: good afternoon. it is not a caught in san francisco. it is noon in new york and midnight in hong kong. bloomberglcome to " market they could a major

shakeup at hsbc. europe's largest bank plans to eliminate 25,000 jobs and sell operations in turkey and brazil. we will look at what is behind all the action. disrupt theple music industry again with its new streaming service that takes aim at competitors such as spotify and pandora? george them are, the former chairman of men's wearhouse who is ousted two years ago, tells us about a new startup that will send a taylor straight to your home or office. ♪ pimm: good afternoon. i am pimm fox. betty: i and betty liu. let us begin with a check of how markets are trading at midday here. equities are slightly mixed at this point. nasdaq really being pulled down by the loss and