is fit bit? says the initial offering is the best ipo he has seen in years. >> we're counting down the minutes until jenny o's news conference. >> y millenial men are avoiding formalwear. olivia: good morning. i am olivia sterns.

pimm: i am pimm fox. we are 90 minutes into the trading day. let's look at u.s. stocks. the dow jones industrial average's and the s&p 500 adds half a percent. everyone is waiting for the federal reserves meeting to conclude, and the results of those minutes. olivia: you are seeing a similar trend in the treasury market. you can see the yields are up. a little bit of a sell off the u.s. debt ahead of the statement and q&a coming up at 2:00 and 2:30. trading at 2.36% for the 10-year note. pimm: the federal reserve his concluding its two day meeting. we will get the latest policy statement from the central bank projections,nomic then comes janet yellen's news conference. peter cook will be in the room. what are the buzzwords we should listen for? we are listening for anything janet yellen could suggest liftoff or interest rates. is itw the expectation

will not happen at this june meeting. we are looking toward the fall. any indication that she gives for the timing of the first rate increase will be important. we will be looking at the new economic and interest-rate projections from the feds, they have been four times the year. we will get those today. they'll give us a better sense of when the interest rate increase will happen, and at the pace of normalization. will beessive or dovish fed be going forward? we will be listening for anything about wildcard issues. of them. one issue worried about a crease exit from the eurozone and what it could mean for the u.s. economy? about thehe says outside pressures the fed may be feeling to hold off on raising interest rates. we heard from the imf manager to

that effect earlier this morning. is that having any effect on the decision-making? pimm: thank you. joining us from washington. we will be listening with you. we have full coverage of the fed day starting at two :00 p.m., followed by the janet yellen news conference at 2:30. fedex is cutting its forecast for the u.s. economy. rise 2.3% inwill 2015, down from 3.1%. -- fedex shares are fallen have followed. they boosted a profit that missed analysts projections. shaking uprosoft to its management team. several names are leaving. the former ceo of is one. another is hillary clinton's chief strategist and her 2000

eight presidential campaign. several other executives will also depart. microsoft is warming a new team called the windows and devices group. a preliminary deal to extend economic sanctions against russia aimed at pressuring russia to bring peace to ukraine. they were going to come to an end next month, they will now be extended until january. russia is preparing to retaliate . they will extend their ban on eu food imports for six months. donald trump should not expect a campaign contribution from singer neil young. here is why. ♪ that is all we have. that is nearly young's classic song rocking in the free world. his manager says that use of the song was not authorized for the kickoff of trump's presidential campaign.

young is a canadian citizen who supports bernie sanders. that is ironic. donald trump came out in the first thing he said was how is a candidate that cannot operate an air conditioner at a campaign to defeat the islamic state? he got the rights to the song wrong. electronic entertainment expo was underway. we have the biggest players showing the best software and the virtual reality headsets. .ou have to mention oculus coming up, an interview with the executive as he talks about consumer ready virtual reality. before there is virtual reality for your head, how about for your feet? there is a lane for texting pedestrians. find out where your fingers can

do the walking, coming up. itbit is going to get financially more fit. they will do so at the high-end of the range. they will be valued at $4 billion. pimm: investors are eager for the shares. they are already raising the keep wants, but can fitbit up? joining us is rapid ratings chief executive. they provide data on companies soon to go public. also it is our own leslie picker. tell us about the increase in the demand. a profitableis company with almost a billion dollars in revenue. investors are excited. we areand that experiencing is unbinding demand. these indications of interest will be assessed.

to generatele enough demand at the high-end of the previous range to raise it. when this happens we will see pricing take lace at the higher end of the boosted range. that would indicate that fitbit is a $4 billion company. olivia: i get that they are in the black and growing fast. it is huge. they have 85% of the wearable fitness tracker market, which sounds huge. i question is about the growth forecast. how much longer can they grow at this rate, given the fact that right now the most powerful technology in companies in the world, apple and sa -- and samsung, are getting into the market to compete with them. it sounds like blackberry. they were experiencing new competition with the iphone, and for undergoing patent lawsuits

like fitbit. lessons that we can take away is needs to continue innovating to take on competitors like apple. pimm: on a scale of one to 10 is this a good or bad ipo? >> it is good, it is coming at a time when there have not been a lot of great ideas to compete. coming out with a company that is a technology ipo, and is profitable, puts it in camps like to go bro ipos of last year. .his is a strong company it is very high. out of 100 it is 87. what i like about fitbit, smalle being a company, is it has managed to grow in a short time. not only in revenue, but in

margins. able to grow without expending your cost exponential in, so you can continue to be profitable in early growth years, that is a sign of a efficient and profitable company. at 87. you rate them explain what the ratings are. comp forhe appropriate fitbit is gopro? james gellert: when you look at , apple,st go pro, sony there are distinguishing features. apple and sony are much bigger. doubled in revenue, but they have the same growth. olivia: why should we care about the ratings? james gellert: they are looking at over 73 different efficiency ratings. cost efficiency, leveraging, liquidity, earnings, quality,

profitability. the changes that go on in those ratio analyses every quarter, compared against 12 million company years of financial data, the profile of the company is very strong. leslie: it will price tonight after the close. pimm: 17, 19? 19.ie: there's a big day of trading to get done. let's say friday. show me an ipo where the stock doesn't go up. olivia: is this a good time to go public? could experience a little bit of retail demand. consumers use the product, and they have a little price sensitivity on the first day of trading when they are spiking. if they miss earnings estimates,

or have a pr debacle, they have more panic. sense. it makes andk you leslie picker james gellert. pimm: it is the gaming industry's biggest event of the year. e3's winners and losers, they are next. ♪

olivia: welcome back. i'm olivia sterns. pimm: i am pimm fox. let's go to julie hyman for the

winners and losers. julie: i'm just going to focus on the losers. let's look at fedex. they are having their worst today since january. they're down the most in the s&p 500, down by 3%. we don't see a lot of movement going into the fed press conference this afternoon. this is coming after fedex reported disappointing earnings and sales, compared to what analysts predicted. they're talking about surcharges and currency issues, particularly at fedex express. the director said they would push back a mandatory retirement age for directors, that in theory, would allow the chairman and ceo to remain longer at the company. he turns 71 in august. fertilizer stocks, there down

2.75%. both of the stocks are being downgraded to down perform. they do not look positive for nitrogen. value act is raising its stake from 5.7%. that is why that is not doing as poorly. speaking of recent ipos, they became public on june 4. after its first earnings report as a public company, shares were down 18% for the canada-based chain of tea stores. a disappointing earnings for this company. olivia: we're worried about this happening with fitbit. davidstea pop. they were very much in the black. big stories tomorrow. pimm: you can track your tea

consumption with your fitbit. the topok at some of stories. the united states cannot find .nough iraqi soldiers to train defense secretary ashton carter is telling congress the united states counted on training 24,000 members of the iraqi military by the fall. only 7000 have been trained. carter is hoping for greater commitment from the iraqi government. bowling has a much-needed commitment to which jumbo jet program at the paris air show. they announced 20 of the 74 seven jets were sold. demand has been falling for 4 engine aircraft like the 747. allergan already makes botox. it is now getting a treatment

for double chins. they have agreed to buy biopharmaceuticals for 2.1 billion dollars. they make the only nonsurgical treatment for double chins. they have an experimental product to treat male pattern baldness. those are your top stories. olivia: it is a growth market. pimm: i'm going with virtual reality instead. olivia: 50,000 video game lovers have gone to los angeles. the e3 conference has showcased a slew of reality bending games. between sony and microsoft. here for his highlights is the --sident of majid and pfize majid advisers joining us from los angeles. what are the highlights for you? is exciting to see the

next of people. ,ou probably have 30,000 geeks 50,000 old man, and to some really cool kids. this is mass entertainment you saw that yesterday and again today. pimm: could you tell us about with the's strategy xbox 360 being compatible with older games? mike: the backward compatibility is huge. people owned a lot of xbox three 60's and a lot of playstation threes. this is a huge reason to buy an xbox 1. all of my three 60 games will still play. you are seeing the microsoft polo blends. everyone, including those who parked worked in pr and or thought it was amazing.

the crowd went wild. on minecraftample of the hollow lens. i would like to see this on driver and shooter games. it is impressive. olivia: i cannot wait until that me to shoot someone in 3-d. clearly, i'm not the target audience. sony, microsoft. since 2003 sony has been crushing microsoft. what happens when they go head-to-head in virtual reality? mike: i have seen the oculus used in a variety of stages. i am impressed. consumers are impressed. i have seen the sony morpheus that was also very impressive. i saw gameplay. it takes gaming to a new high. you really do feel like you are in the room, grabbing for a gun, shooting people.

it really transcends the reality you are in and pitch you in a new place. -- and puts you in a new place. i have not seen a piece of virtual-reality software that i have not been impressed by. olivia: horseback riding? going to sporting events, learning to do heart surgery, they may even teach anchors in virtual reality. olivia: we could use a little help. pimm: what is the cost? compatibilityward is a big cost savings. i do not believe morpheus has said how much they will cost, and oculus doesn't know. the prices will come down. not the most expensive household items. an ipad is also expensive.

i anticipate that this will be good money. it will take a couple of years to take off, but there will be tipping point, that one amazing piece of software or like clash of titans did with the ipad, then everyone will be out buying one. there are low-end devices that are high quality. google has a cardboard version of a virtual-reality headset that is under $10. olivia: thank you so much. have fun out there at the e3 conference in los angeles. we will have more on virtual reality gaming, coming up. for example, we have an interview with the ceo of oculus. can't wait to see that. pimm: coming up, we have bike lanes first, then running lanes,

how about a lane if you would like to walk and text? we are not making this up. ♪

olivia: there are 1.7 billion smart phone users in the world today. you bumpdo you think into? have you bumped into someone while walking or texting? such a tech stores are big problem in london that the lamp posts have been padded. >> i hope people use these

lanes. you are often walking on the sidewalk. there are people who decide to text and have conversations and you run into them. antwerp have a small area that has been designated for texting lanes, .russels also has them in the previous summer, in washington dc, and experiment was tried to get people to follow the signs about texting and not standing where people were walking. people were still possessed with texting they ignored the signs so it never worked. olivia: half of the time you are looking at google maps. this is another example of how technology has modified people's behavior. here is the response. we have seen on youtube people texting and falling into water fountains, people texting and walking into lamp posts, which is why london has padded them. so that when you hit to the inanimate objects, they do not

fit back. teenagers are suffering from next strain because they look down so much. how do you know where to go in the texting lane? pimm: it follows the same pattern as the sidewalk. olivia: it is not to lanes. -- it is not 2 lanes? pimm: there is a type of peripheral vision that you develop when using toward smartphone. not for you? i'm done. thank you so much. pimm: coming up, we have the countdown to janet yellen's news conference. ♪

pimm: welcome back to "bloomberg market day." of us take a look at some the top stories of the hour. microsoft is streamlining its executive branch and some

big names are leaving the company. three executive vice presidents will leave, and so will mark pen. he believed to form a private equity firm. microsoft will focus on platforms and personal computing and equity. we are not hearing any sounds of copper mines in the greek debt crisis today. prime minister says of creditors demands or onyx of, his government is ready to say no. germany's finance minister says his government is prepared if there is no deal. office puts the focus on tomorrow's meeting of european union finance ministers. if greece cannot agree to a deal by june 30, it runs missing the risk of debt repayments.

chairman of the joint chiefs of staff told lawmakers that stability cannot be imposed by outside forces. do appreciate the opportunity to be here this morning to discuss the increasing disorder and the military component of our strategy in the middle east. the middle east is unprintable, unstable, and it recently, x, but our goals are quite straightforward. we seek a region as inhospitable to our enemies and that promotes and protects our core national interests. pimm: defense secretary ashton carter says the u.s. wants to train 24,000 iraqi soldiers, but it cannot find enough recruits. a new report says hundreds of ubar automobiles are being taken off of new york city streets. the new york post reports it is part of a larger crackdown on illegal activity. nearly 500 cars were seized in a six-week period.

they may not be held by writers on the streets -- hailed by riders on the streets. let us go to name a check each in london. >> no compromise in greece. the opposite in fact. the stock exchange down 3% at the moment, but it has dropped as much as 9% over the past two days. we have had all sorts of comments. one is ready to assume responsibility for rejecting an unfair deal with creditors. say no tol sta catastrophic policies. it the eu is saying creditor demands are far from crazy and greece cannot remain on the margins like a make-believe economy. ouch. we have a number of countries already saying they are bracing for a breakdown in talks. we have talks happening tomorrow in luxembourg.

greece has until the end of the month to reach a deal before its bailout runs out. this is europe's equity benchmark closing lower today as well. the interesting thing is that 100% of stock forecasters tracked by bloomberg are bullish about europe's equity benchmark. you might ask why. i was so you that citigroup sees this benchmark jumping 17% through the end of the year. the reason is earnings growth also the ecb easing. they see jitters about greece as temporary. want to show you the big picture of the european market close. it is red across the board. pimm: thanks very much. coming up on "bloomberg market day," the tuxedo is in trouble. a menswear trend is ripping the fabric of tuxedo rental companies. how retailers are making adjustments.

that is next. we will learn all about virtual reality from the oculus chief of staff. when consumers will start living in the new dimension. we will find out. stay with us for all they complete coverage of the federal reserve's 2:00 p.m. decision on interest rates. we will bring you the decision life as it happens along with market reaction and analysis. now let us stay on the federal reserve a moment and a preview of today's decision and news conference. earlier ricardo spoke today with olivia sterns at erik schatzker about the odds of a policy change today. >> no way. >> highly unlikely. >> so then what is going to change if anything? >> janet yellen statement will be the most interesting piece of news. the issue will be how much detail shoelace out for the fall. she has been talking about a rate increase in the fall.

will she get more specific? >> the rate increase will come so we are trying to figure out if it will come in september or not. what i'm exciting to learn today is how will she weigh in with the inflation integrations and employment considerations. erik: what about the market considerations? twomuch of a factor -- other issues which people think are weighing on the minds of the policymakers and one is the impact that the change in federal lessee will have on financial markets and the other is the impact on emerging markets. i thinke say first that the fed wants to make this the most protectable set of increases in the history of central banking so the rate increases are mostly priced in and no big surprise will happen on the date of the meeting. the focus of the fed will be on the u.s. economy and pulling the u.s. economy out of the financial crisis. not: stan fisher's concerns

responding? >> you. -- yeah. stephanie: are you confident this is an economy we can sign into? >> inflation has been running below target now. there is a gap between with the price level should have been and what it is now. given that, tightening too soon on the fear of an inflation that is not there can prove to be dangerous, especially if the growth news is not more robust. >> if we look at the data today, there are question marks. those that think there will be a rate hike are building in a forecast to what they think will likely happen. one area you do see signs of inflationary pressure is inducing way just starting to increase in commodity prices are starting to be bought up.

who arethe people arguing in favor of rate hikes are doing a based on forecasts and whether think the economy is headed. eric asked about a market impact. i wanted to say i believe we have some sound of someone that said hang on until 2016. >> we think there is a case for waiting to raise rates until there are more tangible signs of price inflation than are currently evident. words, we believe that a rates hike would be better off in early 2016. olivia: what do you think about that? the janet yellen have to listen? >> i don't think she has to listen. it is an opinion and well-founded, but they have been in many ways announcing that the rate hike will come before the end of 2015.

-- the our documents arguments coming and that it is going to be late in 2015. >> janet yellen has stressed that she will move cautiously, so she will stress that subsequent rate hikes will depend on how the data unfolds. if things don't go as well as planned, subsequent rate hikes would be delayed. erik: for we have seen transpire over the last six weeks in europe x me wonder what is the chance the fed loses control over market interest rates? if the market is right conclusions about the data that leave traders and investors to believe there is inflationary pressure building in the system so we begin to see rates back up on the long end or short and as well, what does that mean? >> presumably, we start to see this inflationary pressure in the u.s. because the u.s. economy is doing well and

getting healthy. in that respect, the rate hike will be justified. i agree and maybe ricardo will want to say more about this is the euro area is not a concern. the biggest question mark for the global economy is what is going on in the euro area. >> the situation in greece is very hard to anticipate. we are on a day-to-day forecast with tremendous amount of uncertainty. a potential greek exit which is not at all unlikely is a bit of a lehman moment for europe. we don't know what will happen. maybe very little will happen. maybe it will have locations for the entire globe. pimm: they were speaking with olivia sterns at erik schatzker. we will have complete coverage of the federal reserve day starting at 2:00 p.m. eastern. that will follow janet yellen's news conference at 2:30 p.m. eastern. still ahead, we will find out

why the rental tuxedo business is in trouble. ♪

pimm: welcome back to the "bloomberg market day." let's begin with the top stories crossing the terminal right now. itsit is expected to start initial public offering today and strong demand has led the maker of wearable fitness devices to boost the size of its offering. at the high end of the new range $19 a share, fitbit would be valued at about $3.9 billion. the company is currently profitable and had $100 million in net income last year.

fewer americans apply for mortgages last week. mortgage applications fell more than 5%. higher interest rates may be one of the reasons. he averaged fixed rate 30 year mortgage has climbed and is now 4.2%. american international group is looking for a chief investment officer to oversee $350 billion. aig has been expanding its allocation to commercial mortgage-backed securities and other structured debt. however get tired will replace an executive vice president who is nearing retirement. those are your top stories. the rental tuxedo has always been the awkward uniform of life's milestones. now, the business is in trouble. kyle stock has been looking into all of this. is this an issue having to do specifically with millenial men, or is there something more at work o? kyle: that is a bit of it.

the marriage rate is down almost one third in the past five years. last year, seven out of every 1000 people walked down the aisle, and that is low. pimm: seven out of every thousand. fewer weddings means fewer black ties and fewer tuxedos. kyle: they are getting more casual. 6% were on a farm. you are maybe wearing overalls, i don't know. pimm: what you are not wearing a tuxedo with leather shoes on a farm. you have a change in venue and marriage habits. what has been the response? the whole idea of being able to rent a tuxedo with something you kind of did as he got older. -- as you got older. kyle: men's wearhouse says the rental tuxedo business dropped last quarter and they don't expect it to come down very quickly.

it has also been a hugely lucrative business so the margin on this thing is 80% to 85%, which also means there is a lot of room for disruption, which is happening. the buy versus borrow equation is getting different. some consumer companies that are reaching these guys and saying this is an investment. you don't need to rent it and be uncomfortable and have it not fit well. pimm: they are targeting the same audience that would normally go and rent a tuxedo. these millenial men are going out and buying them because the price point is such that they can get it for something less than they could? kyle: they are no longer as confused and desperate about the transaction. they are renting them online and getting them made to be more custom fit. pimm: did you have a tuxedo in your closet? kyle: i invested a few years ago, and it is probably time to get something a little better. pimm: how many times have you worn it?

kyle: i have appreciated it. -- eight or times nine times. pimm: did you buy it? kyle: yes. halloween was rough on it. pimm: we will have to talk about that later on. thank you very much. , the golden state warriors are the nba champions. they defeated the cleveland cavaliers to win the title. will find out how golden state used management 101 to isolate and shutdown the cavs. that is next. ♪

pimm: the golden state warriors beat the cleveland cavaliers last night to take the nba title in six games. the warriors managed to subdue one of the game's most talented players, lebron james. bloombergs betty liu was watching the game. it did the warriors's and outplay the cleveland cavaliers? betty: it is a really good management lesson when you are watching how the warriors did outsmart lebron and the cavs. lebron played an amazing final, but he is only one man. he is a superstar, but he could not carry the entire team. it is a good management lesson because it tells you how you can have a superstar within your company, but if you don't have a deep tension around that person -- a deep bench around that person, the organization still fails. pimm: the cavaliers had injuries so some players were not able to compete. you have the issue of the double-teaming of lebron, which forced other players to have to step up. also there was an increasing

pace of the game. betty: exactly. a majority of the points were scored by lebron. he was carrying this team. he had a shallow bench behind him. the second thing i thought was interesting was how they were ears -- how the warriors ron would wear out eventually. recalllmost like i can't the book but there is a management book about how you wait out your enemies. the warriors waited out the enemy until he was too tired. then they went in. i am no basketball expert, but you can see how in the fourth quarter of the prior games, the cavs were losing steam because lebron was getting more and more weary. he was spent. pimm: about 35 points a game. you have to look at the players on the golden state warriors.

steph curry. great player. betty: exactly. all of them. these are good management lessons, but lebron is still a superstar. guess how much he is worth? $270 million. betty: most of that through endorsements. nba players do well financially. is if not an billionaire, close to that. michael jordan is a billionaire. on the women's side, tennis athletes do very well. maria sharapova the highest-paid -- pimm: total net worth. betty: exactly. she has a candy line. she is worth $110 million. pimm: compare that to lebron

james. betty: not exactly apples to apples. pimm: still a lot of money. betty: a good indication of how much they are earning. pimm: thank you very much. time for today's options insight. let us go to julie hyman. julie: let us take a look before we get to options of what is going on with the major averages at this hour leading up to the fed rate decision. we are seeing little change. not unusual on a fed day. we will see you more activity when the decision comes out. joining me for today's options nsight is jerod winte woodard. everyone is anticipating this meeting. how are they anticipating it in the options market? >> there is an interesting diversions i saw this morning. if you look at the cost of option protection comparing the meetingslly ahead of

you see a premium price in the market reflecting the higher odds that things will move. this morning, if you look at the days before the last four fed you have the s&p kind of in sync ahead of the news. it today, you had a big move in the premiums this week as investors priced in a little more risk and there is more demand for protection. you have not seen a corresponding shift higher in the term structure of as thank options.ns -- as spy not a downside in the s&p 500 or an uptick in volatility of the s&p 500. to think ofsed way that is if people are turning with options, unbalanced may be the more likely smart money. they have been positioning for

more of a move and the more broad-based audience and s&p options is not moved correspondingly. if you believe that kind of story that outlook sector is more potential for volatility ahead. everyone isurse saying there is more potential for volatility ahead. you are looking at buying a vicks call spread to set you up. >> the structure is to traded this in july. calls anding the 16 19.realistically on a big move over the next several sessions, i would look to make $.10 $.15 $.20 on this if things got moving. the main thing to keep in mind is the reason why. elevated foren so those far out of the money vix call strikes that they look relatively expensive. if it is not today or tomorrow -- the fed is ready to move, they will signal the key is in the ignition and they are ready to get going.

if you look at wages and retail sales, every important measure that matters is telling the same story now. if they don't signal in the or september,july that is the thing everyone will look for. there is no data that would give reason otherwise to suggest further delay. julie: by doing this, you are funding the buy of the caller. how does it work you are not worrying? >> the idea is that by selling the further upside call strikes, you are collecting a premium, that makes the cost of owning the near money strike at 16 and little bit lower so you are not so worried about every little tick and trying to recoup such a heavy premium. it gives you a more cost-effective exposure. julie: it is still amusing that we keep calling for an uptick in volatility. a lot of people have been talking about it. 16 is still not very high

volatility. 19 is still not historically. the uptick in volatility that everyone is talking about, it will still be relatively low by historical standards? >> this is not a crisis scenario or a return to the days of 2009 , but it is a scenario in which people are worried about to the effect that wage growth and expanding economy will have on companies that have structurally positioned themselves with the market for the last five years instead of for the economy of the next five years. it is a very different case that you have to position for. julie: we are all bracing ourselves. we appreciate it. don't go anywhere. ♪ ♪

(ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring (don't fear my darling...)

(the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. >> a good day. it is midnight in hong kong. >> welcome to the bloomberg market day. the fed is not expected to raise interest rate today, but the

markets will be listening close before hints of a possible for -- september with westoff. >> then we will have an interview about the future of virtual reality devices from the e3 contras in los angeles. >> for hank greenberg, vindication is not enough. he wants the money as well. he wants against the government. ♪ pimm: welcome. i am pimm fox. betty: i am betty liu. we are slightly higher but marginally. we are