one strategist tell us why that is a mistake. doug millon speaks out about the controversy surrounding the confederate flag. he says the retail giant is seeking ways to make a difference. scarlet: hillary clinton taking a stand on race issues. she says the removal of the confederate flag is long overdue. we want to start with breaking news for you. going right to julie hyman in the newsroom. julie: the latest with the telecom cycle -- saga. the board has rejected offer to acquire the company according to people familiar with the situation. the value would have been $11 billion. of the company has been

trying to consolidate in the french telecom industry. this is the telecom unit. now the board is rejecting. specifically the offer was made altice.t of they had battled it out for the unit just last year. drop the one the bidding war. did drop the bidding war. these mention as well french companies do not have significant trading here in the u.s. in terms of adr or anything. at this point we cannot track stop reaction, but certainly there will be some in the french session tomorrow. thelet: julie hyman with latest on breaking news. in the meantime, a check of the markets. stocks have gone up, we're gone down.

one big mess when it comes down to it. the dow and s&p did almost touch the intraday highs in the pullback. government how will -- governor will did talk. that had a calm over the market. the rate sensitive stocks like utilities all aware in the s&p. what helped with the headlines a new home sales rising to most since may. giving investors a boost, the idea economy is still trucking along. interestingly saw a decline today. in the green but pretty much flat line. you have to wonder if it is a rate sensitive sector. the fed will raise rates. does that wind up for -- hurting the home-building sector? looking at the moves in

airline stocks as well. tracking the airline index little changed at the moment. morgan stanley coming out with a note. at double-digit earnings growth. 10% free cash flow yield. pointing to airline stocks rallying in general. the dow transportation index really lacks but picking up a little bit of team. morgan stanley saying they're obviously issues involved. scarlet: one thing definitely moving is the euro. moving the most in three months. down by 1%. it is all about the greek discussion, or maybe not. alix: is it about housing gekko as -- a great note out saying it is about housing, not about greece. i thought it was really fascinating.

>> greece has been the factor for the past five years. at what point to you make it a bigger issue? chanting take it down, take it down, hundreds gathered in sweltering heat outside the carolinas it has demanding the remover -- removal of the that'll flag. inside house of representatives met to vote on a budget but decided they will hold debates to possibly have the confederate flag removed from the statehouse grounds. the virginia governor called for the confederate flag to be banished from state license plates. this pays homage to the sons of confederate veterans. will no longerit sell confederate flags in its stores or online. last week's massacre and south carolina renew the debate over the flag. earlier we talked about it with the walmart ceo. we really do not want to sell

anything that offends people. we carry some of these items through the marketplace come a third-party sellers online. over 7 million items. we decided to discontinue it. will banzon and ebay the image, saying it has become a symbol of divisiveness and racism. scarlet: we're getting word from the greek government that the greek prime minister will meet tomorrow to discuss the crisis. this after a german parliament officials said lawmakers could vote next week on the agreement bigawmakers vote away the measure over the weekend. this shows the country's getting serious about a deal. now he has to ensure his own government will back any agreement. we spoke earlier with george papandreou, the former prime minister of greece. >> there will be a very widespread consensus beyond the

confines of the government party. separates himself will have to put his full weight behind the party where his own there is opposition, but i think he can do that. >> the plan calls for pension plan reforms and higher taxes. they found they would not back more austerity measures. alix: the housing industry picking up steam. rising to the highest level in more than seven years. gain was revised upward to 8.1%. we did have median sales price take down slightly from a year ago to $283,000. that seems cheap. i live in new york. scarlet: that governor jerome powell says the chances are about 50-d the u.s. economy will improve enough for the federal reserve to raise interest rates. he said his forecasts assume stronger growth that growth in the labor market and greater

basis of confidence and inflation returning to 2%. alix: a victory for president obama in the trade agenda. the senate voting 60-37 to begin full-blown debate for fast track authority. previous presidents have enjoyed fast track authority. congress can reject or ratified but not change. that is a look at the top stories for this tuesday. scarlet: coming up, one tiny park eating bug causing huge problems out weston up ending the lumber industry. -- out west. for -- recipeory for success. all of garden unlocking shareholder value. -- olive garden. scarlet: blackberry undergoing their own transformation. the ceo shows his lands for turnaround could just he working out.

all that and more coming up. prime minister turned to shoring up support at home for his plan to end a five-month standoff with creditors that has brought his nation to the end of default. david kelly things greases meanly -- merely a distraction and should be looking at the good news coming out of europe. he spoke earlier with matt miller and olivia sterns. >> i think the big issue is people have been missing the york -- economic expansion while everyone has been watching greece. the index is the highest since 2011. we see they're benefiting from cheap oil, benefiting from the euro that is way too low frankly. they are stringing greece along. tt: they are stringing greece along. that is the key.

that is like b.n.p. paribas is off the hook. a couple of things. why do you say the euro is undervalued yucca we went over a new note saying we will see parity by the year and. -- end. >> united states runs a significant surplus. the surplus and deficit were based on where the euro was the year ago. it takes a while for some of .hese two feet through you could say a year ago the dollar was too high in euro too low. that is definitely the case right now. fundamentally mario draghi is still printing money and janet yellen is starting to tighten. >> i realize they will start to leave money were they the high -- where they have the highest interest rate. gaps in short-term interest rate have not done a very good job predicting where the euro dollar exchange rate will go. as an economist you want to think trade deficit you have to sell dollars to do that.

the fundamentals in the long run will push the dollar down against the euro. >> or do you think we will see the euro go gekko do you think it is an ok short-term outlook? when i think about this from a long-term investment perspective, investing in europe, i would like to go through the european fund unhedged. over the course of three or four or five years as european corporate profits grow, not only will we see good earnings growth , but i think the euro is going to recover with a recovering economy. >> last week we did hear from janet yellen in the fomc meeting. what stood out? pleased tomed very say the members of the committee hikes with four meetings. for rate hikes with eight meetings and five rate hikes 2017 with eight meetings. basically they will skip a meeting all the way up.

she has been talking about -- [indiscernible] to me, that is super slow. >> i find it hard to believe they will really find the kind of data they are looking for to dry them to two increases. she seems to be giving the explicit method here data dependent. -- message they are data dependent. how about the home sale numbers yesterday? very strong. to issue is if you think about somewhat geriatric economy in terms of the ability to grow do 2.5% growth, we will see wage growth -- we are already seeing wage growth and unemployment rate. we are at zero, we're not a neutral. the promise has been three years out. neutral.y approaching

it seems to me that is very late to get going. >> are they looking at different data? we would look at the economy and say there is very different data. >> i do not think they recognize there is a structural problem that is slowly growth down. retirement.s >> demographics. there are other things. a huge growth in the number of americans with lenny convictions. that has exploded. think about what this team. instant background checks, these people get locked out of the labor market, and they don't come back. we have a real problem with labor. productivity growth has slowed. we're not seeing capital spending. business is not encouraged to invest in equipment and technology that would make workers more productive. i do not think it is a supply-side problem or lack of supply in the u.s. economy. kellyt: that was david

speaking with matt miller and olivia sterns. making herry clinton way to st. louis, missouri, to talk about the sensitive topic of racism. ♪

scarlet: welcome back to the bloomberg market day. alix: going straight to julie hyman with a look at the biggest movers of the day. kind of lumpy day. i will look at one of the groups taking lumps. we have not talked about momentum stock lately. biotech also into the category. we are seeing the group pull back. tracks theetf that

biotech stocks. it touched a record today before falling. we are seeing individual movers as the biggest declines. if you look at over the longer term, we have seen this particular etf rise for six sessions in a row before the decline today. if you look at the bloomberg terminal, we have momentum indicators we can look at. this is the stock price of the i/o tech etf. the yellow line the 200 day moving average. we have not seen that. this can sometimes be a sign the mentone will stop. i want to take a look at the relative strength indicator. this is a momentum index for the biotech etf. something you can look at to try to figure out if something is overbought or oversold. a signal it should push to fall or gain. it has gone above the red line,

which tends to indicate something is overbought. something technicians tend to look at. could be assigned we will see a pullback. also speaking of momentum, have to talk about tech and of the gains we are seeing. they are trading at a record today. the market cap surpassing that of walmart, which is incredible. tesla, shares of 2.8%, the highest since september 2014 and the best individual day in nearly two months. amazon trading at a record on a closing basis. the latest news amazon we got is it is indeed pulling confederate flag related merchandise from merchandise -- pulling confederate flag merchandise. scarlet: i love the title. thank you. getting your look at the top stories crossing the terminal

right now. talk to any hope the officials say the death toll from the heat wave in the southern profit and as reach 622. the number of fatalities and affected to climb even further with temperatures reaching 113 degrees fahrenheit. power outages have hit the city leaving fans and air conditioners useless. alix: dozens of striking port worker stormed the tracks causing fires. it was a day of chaos in the port city. truckers who diverted to the euro tunnel straight line got snarled in traffic and migrants hoping to reach vehicles swarmed vehicle trying to sneak on board . they are protesting potential job cuts. scarlet: searchers are scouring woods in newh of york. this is 20 miles west of the prison where the two inmates escaped june 6. police are looking at evidence

found in a hunting cabin and asking people to report any suspicious activity. i am obsessed with the story because my voice will be in western new york in two weeks. thinking what happens them? -- what happens then? alix: hillary clinton says removing the confederate flag is important but not the solution. a former aide said urges a renewed conversation about the racial divide that persists in america. race at the forefront of clinton's campaign after nine people were shot at a historic lack church in charleston, s.c.. joining us is a bloomberg politics managing editor. what do you make of the positioning on this very sensitive issue? >> it is a sensitive issue, and we all recognize there are all -- there are politics here. this is an issue she has worked on for a long time. on it. a strong voice

she spoke at the conference of mayors meeting in california in a very poignant speech. she is speaking again today on this. you are seeing the best of hillary clinton as the candidate in dealing with the best taking so expansively and moving. at the same time, the cost and she did it not being willing to put out a statement. thank you for the perspective. definitely want to tune in tonight to watch with all due respect. the utah attorney general sean reyes will be joining mark harper and -- mike helprin. don't miss it. scarlet: the beatles the string more than 700 million pine trees in british, columbia -- british columbia. there is the beetle. now it is smaller.

looks pretty vague. -- pretty vague. ♪

scarlet: as the u.s. housing market continues to heat backup, basic construction euros like timber are once again in demand. alix: a small bar eating beetle has been wreaking havoc, consequence of the infestation of the industry proving dramatic. in the canadian province of alberta, he is preparing for battle. he was the forest health officer. recently he is been spending more and more unhealthy trees. more and mored -- unhealthy trees. >> planning going into it looks a lot like that'll field planning. >> his enemy is tiny. of grain beetles that arose into the bark of certain in the first

trees. they arerge numbers able to take out or kill a mountainside of pine within several years. air, they appear as red and orange click -- flakes. timber is big business in alberta. in colombia it is the major industry. severalouraged by unusually warm winters has so far killed 60% of the harvested pine trees. >> one of the greatest natural disasters that has ever been seen, certainly in british columbia. >> ahead of investor relations for one of three giant timber firms rooted in british columbia where lumber is the biggest single export. >> there has been more trees cut through the past 10 years than otherwise would have been. it has been a race to get the economic benefit from the tree.

>> in the timber town, that traced to harvest threaten trees help the company expand into one of the world's largest. local lumber production has fallen more than a quarter in the past decade as the supply of mature trees hurts to run out. >> it takes 60-80 years in british, columbia for a treat to be planted and large enough to be used. >> giant: -- giant commodity markets will not wait. they canadian companies like west fraser has been heading south of the border to buy up dozens of u.s. operations. >> our dependency on west fraser is very high. >> he spent years working in fraser and now mayor. they pay 95% of the industrial tax rate. the largest employer in town by far. if they start to shut the millstone, it will end a shiver

through the community like we have not experienced in the past. >> is there any unhappiness about companies moving down south? >> absolutely. there is people that feel like money made in british columbia, money made off of the public resource all ended up being invested in the united states. back in alberta, for street officials hope the effort will stop the march and spare the timber industry from a similar fate. >> an amazing piece. scarlet: i am out of here. you as always.ss much for coming ahead, the walmart ceo weighing in on wages. ♪

♪ ♪ ♪ get excited for the 1989 world tour with exclusive behind the scenes footage, all of taylor swift's music videos, interviews, and more. xfinity is the destination for all things taylor swift. alix: welcome back to the bloomberg market day. a look at the top headlines this afternoon. cruise line operator carnival reported second order profit

that beat estimates. the 2015ny raised earnings forecast. carnival says bookings are running well ahead of last year. carnival and other cruise lines have shifted ships to the mediterranean in recent years to counterbalance weakness and european economies. a a while chief executive tim armstrong says verizon will turbocharge the a wall content business. here is marty walden, president of innovation business at verizon speaking earlier today with betty liu. is the fact of the matter assets and platform and content marketh more powerful in share. connecting with verizon will turbocharge this. i would be surprised if we don't end up seeing in the top three market share -- market holders. arianna huffington has

signed a four-year contract to remain editor in chief of the huffington post. this ends the uncertainty surrounding her future after the website was surround -- acquired by verizon. jordan spieth a gay history pretty much all over the place. the youngest u.s. open winner since 1993. because of his when sunday a chamber's. only the six call for in the modern era to win the first two majors of the year, the masters and u.s. open. ,e joined us from dallas, texas to talk about his unusual victory. lost theught i had tournament. hole, i wasast the glad that i had a chance to go to the playoffs in the day. when the next one missed, it was a little bit delayed from the crowd reaction. on 17 i did the same thing but i had another whole to make up for it. he just ran out. tournament is big

-- open in element two weeks. the company filing for an ipo. the largest operator of fitness centers in the u.s. with almost 1000 locations and more than 7 million members. that is a look at the top stories at this hour. coming up in the bloomberg market day, offering something new on its menu to investors. the restaurant companies focusing on real estate. blackberry shares falling on the disappointing earnings reports even as the company reported strong growth in software sales. other parts of the business not doing that well. bond market volatility having an effect on corporate bond sales as investors wait to see what will happen with borrowing rates. that and much more coming up. last like it will remove confederate flag merchandise from stores and websites. this followed last week shooting

in south carolina that led to protest over the symbol. the walmart ceo asked waned the decision and other social circumstances -- stances it has taken. >> we don't want to sell anything that offends people. we carry some of these items through the marketplace, third-party sellers online. we have over 7 million items. the move does appear to be part of a growing trend of walmart really sticking its neck out on social issues trying to do the right thing. i am thinking about what happened earlier this year with the governor of arkansas. a lot of people credit you personally for going to him and criticizing the free -- religious freedom law, getting him to amend it. why is walmart tried to do the right thing and is it good or business? >> we are a merchant and that is our business. we don't look -- do look for places to make a positive impact on the business -- on the world.

whether it is the wage increase or environmental sustainability or energy that is more renewable, all those things are aimed at running a better business and doing good things for the world. >> you have a fabulous personal story with the company. you have been there over 20 years. you are arguably the most prepared person for this job since sam walton, the founder ran the company himself. you have now been at the top job for 16 months. you you look back, anything think you are not prepared these socialome of decisions. walmart has become of the company. we try to keep it simple and run it like it is all. it seems like every day there is some sort of surprised and judgment comes into play. i do not do it by myself. we have a great team. we are sincere about using the company's platform to do good. the core mission is to save money so we can do better.

we think that is an important business to have in life. we want to use the policies of the company to create a more sustainable supply chain. two point 2 million people. third largest employer in the world. perhaps what made the biggest news under the tenure is your decision to raise the minimum wage for employees going to nine dollars per hour $10 next year. how did you arrive at that decision >> echo >> it is not just the starting rate weight but the system where trying to put together, the environment we want to create. we did it to nine dollars this year, $10 next year. rates orup other wage department managers and others who work in the company because we want to create this opportunity. promotional opportunities, training, how we approach scheduling so people can do what

they need to do with their life. all of these things are intended to create opportunity for people. to see thestarting investment in customers pay off gekko >? we are. our associates are more engaged and a happy. you aboutwant to ask health care. i believe you have 17 in-store clinics in the work. >> -- in the works. health and wellness is a big business. we have been in it for a long time. it is growing. very important to the mix going forward. the four dollars generic program continuing to evil. generichave five prescriptions that are free of charge, as long as you are a member. we will continue to change and innovate because we want to serve customers in new ways, including clinic. pharmacy important, optical

important. we have some tests going on with hearing. solution is about a for customers. we need to continue to invest and learn at the health care space changes. you have spent 22 years with walmart doing everything from working in a warehouse in u.s. stores to running walmart international to running sam's. surely you have got in a lot of calls from headhunters out there. why have you decided to cite -- stay at walmart? >> i have loved walmart from the beginning. the retail space is challenging and changes all the time and very competitive. i think it is attractive to me and many other people. when you are going to school sometimes you do not realize just how fun and challenging retail is. doug the walmart ceo macmillan speaking to olivia sterns. now we focus on food. garden restaurant planning to

split off many of its companies in a deal. it will help lower the debt load. proceeds, we intend to pay down $1 billion of debt. we expect this will rain tame the investment-grade credit profile. we believe this will result in a favorable outcome for all of the stakeholders by strength think the balance sheet while positioning to great companies to succeed in the future. this comes after they lost the proxy fight with star board value last year and operating under me new -- under new management. earlier today we spoke with matt miller about the proxy contest the drug today's announcement. next there was a 300 page powerpoint presentation about the breadsticks. here we are trying to squeeze value out of the real estate this company owns. >> how much real estate do they about 500 places they

owned the building and the land. the ones they own. those are spinning off into the reits. 70 five they released. with the proceeds they can pay back one billion in debt. 75 going back to the reit. there will be some returns on that. they are saying this will help them. up until avoided rent this point. it seems like so far investors sharing the decision. >> how is the business doing otherwise? we talk about the water and doing something with the breadstick. they are constantly trying to redesign the restaurant, making it a more palatable experience. had fallen onen hard times. graden had fallen on

hard times. the numbers starting to creep up. idea is they will turn it around. but is that the lion share of the revenue? we see red lobster, capital grille. >> they are out of red lobster at this point. it is the biggest chain. longhorn steakhouse. the home of breeze. garden.one is olive alix: coming up, the blackberry ceo jack chen has seen the company's market share value falling. ♪

alix: welcome back to the bloomberg market day. i am alex deal. the closingefore bell. we want to go to julie hyman. he did the the dow and s&p with a different kind of rally. we could tell you we were having an exciting end of the session, but that is that what is happening. take a look at the major averages as we head into the closed. staging a rally. the dow and nasdaq up a 10th of a percent. s&p up even less than that. looking at where the action is. and coppercquarie and gold. we are seeing it rally by almost 4%. the copper part of the name most important because copper having

the biggest one-day gain in seven-week. that is after manufacturing data out of china. it did show some improvement in manufacturing. china the biggest consumer of copper up by about 1.7% today. have adt.er end we that company falling. we have had negative in this commentary in recent days but does not seem to be a catalyst for recent decline. , that stocktal falling after it was downgraded to neutral from overweight at j.p. morgan. the analyst saying hard disk drive unit shipments will be done 10.2% year over year. as wer two .3% next or continue to see waning demand for personal computers. europe, pmiper, surprise to the upside as well. very cool. thank you julie hyman. a look at the top stories making

headlines at this hour. google adding a free ad supported tear to the streaming music service. hoping to capture the millions of people who click on the app every month. and then go elsewhere when they are asked to pay. google pay streaming music service costs $10 per month. has died.atten he appeared on broadway as a child, starred in tv in his infancy and in middle age found lasting name as the father on enough." he died in california at the age of 86 years old. donald featherstone invented the the pink lawn flamingo. he was a sculptor with a classical art background. he created the flaming goat 1957 for plastic company modeling after birdies on national geographic.

millions have been sold. that is a look at the top stories at this hour. lack very posting a wider than .t orderly lost handheld shipments to the lowest since 2007 this comes despite releasing the classic phone. i'm joined by emily chang in the san francisco -- in san francisco. you spoke to the ceo earlier today. what did he say about the strategy? it is going to be about the software. >> he did say blackberry would continue to make phones. i pushed him that phones are not exactly profitable. we also talked about acquisition. he said we have a lot of cash on the balance sheet. i asked him specifically where and how difficult it has been to find the right fit for blackberry. take a listen. fit will be at

little bit more narrow. we are investing primarily this year in this phase of the turnaround in two major areas. one is the global security and privacy. the other one is iot, a certain market of the iot whether it is connected cars or applications based of the cars or tracking and so forth. narrow.tle more because of that it makes it more difficult to find the right target. emily: you did reiterate your commitment to devices today. that said, you saw another drop in device sales. isn't it clear to you that devices are not going to be profitable? clear to me device is not going to be profitable. i think in the past order we have done a couple of things.

we have reduced investment in device. in doing so, we have boost the investment in software. gotten a lot better traction with the carriers. we have done two very good contracts in addition to the one we had done first. we have to manufacturing contracts. those allow us to more efficiently not only build and design devices, but also manufacturing and logistics side . that takes a lot of liability away from us. there are multiple things one has to do. it is not one thing that is a magic thing. i think over time with a good set of designs, which we said we were going to do at the end of the year, i think all of those things will add up. to me a politically --

cumulatively we will get the device back on track. more: certainly a lot optimistic than a lot of the analyst we have been speaking to. you can catch this on bloomberg" "west." alix: you can catch the entire interview coming up at 4:30 eastern. heinz and pg capital plan to issue 15 billion in debt to back the takeover of kraft foods. they are making this move during what we're calling the bond blues. we will explain coming up next. ♪

alix: this is the bloomberg market day. companies are catching -- companies are catching the case of the bond blues. bond volatility making it tougher to raise cash. putting in on pace for the december.nth since investors are reluctant to the company bonds that have lost more than 1% since the end of may. joining me if a bond investor. abramowicz. is lisa how long does this bond volatility last? how long does it take companies like this? >> this is really from treasury. the 10 year treasury yield beginning this month was 2.1%. 2.40 beat here today about percent. field have increased 28 basis points approximately. that result in a loss of principal on a bond or bond

fund. alix: 2.4% right now. life this is one of the biggest since a lot of people i to have. at one point will hire benchmark yield lead to wider corporate rights or the extra yield investors demand over benchmark rate gekko so far it has not gapped that much. it has held steady as treasury yields rise. waitingd, people are for what happened in the taper tantrum. the investment will cycle back into treasuries, higher rated of going with junk bonds or investment grade corporate bonds. this could lead to a widening of .orrowing costs that could make a problem for these companies borrowing. alix: we have seen a lot of companies borrowing due in part to m&a.

you have to respond in order to fund m&a. does that have a ripple effect in the market >>? >? have gone up. some companies are very sensitive. they took advantage of it really low rate. look at the yield they are paying. that is pretax. after-tax 70%. it is really cheap capital they are borrowing. heinz doing at approximately size bond of 10 billion dollars. if investors shy away as we see volatility in the market, andwindup going up eventually certain companies will not be able to go to the debt market? >> spreads have widened around 70 basis points this month. the high-yield market about double that. a combination of treasury yields

going up in very small spread widening. >> we were talking about before coming on here that so far investments are still clamoring for this. 50 billion. it is still allocated right now is significant. at the same time, there could be time in the future when you have corporate credit worthiness deteriorating. you are seeing an increase in default. it was the most for a month since 2009. there is some concern about credit holiday at this point that are creeping in. you could see that trickle into higher borrowing costs that are more substantial. pull we've seen investors investment junk rated bonds. if noncredit where the company cannot raise cash, do they go bankrupt? >> most of the defaults were in

the energy sector. there were companies really struggling. very low price zones. alix: fascinating. very interesting topic. how does it play out from here gekko really appreciate it. cliff, sticking with me through the close. thank you for joining us as well. coming up, we will bring you the closing bell. looking at the dow up slightly by about 25 point. i will also speak to the ceo christopher aleman. we will talk about garden. ♪

. .

alix: we are moments away from the closing bell. welcome to the bloomberg market day.

[closing bell ringing] alix: we are looking at stocks finishing higher for a second straight day. here 1358 dayswn since we've seen a 10% correction and yet again, we have the nasdaq and russell 2000 closing at another record high. to routeave the s&p up session, but it kind of stalled out. you have fed governor powell saying a rate hike in 2015 is still possible. that pushed up the dollar and pushed up sectors like financials. joe weisenthal is here to help me break it all down. i wish i could be more pumped about it. joe: everyone has been expect inc. higher volatility, b