prices on the shanghai exchanges cannot find a bottom but some companies believe they have a solution. freeze trading. ♪ scarlet: good morning, everyone. are 90 minutes into the trading day here. let's see how they are trading right now there let's look at the stocks right now. the dow jones industrial average down .9%. the s&p 500 lower by 17 points right now right under that moving average. the nasdaq also down more than one and a quarter percent. scarlet: looking at the s&p 500, we have got material the most.

reporting earnings tomorrow after the market close. earnings are supposed to recover a bit, but we will not see that much more. pimm: take a look at all the oilodity producers today, or commodities such as copper and gold all falling today. scarlet: let's take a look at crude oil. you mentioned down 10% over the last few days. $.84 per barrel. it was a technical level with the moving average. we still have over 20% more gasoline and stockpiles then we had if we take a look at the five-year average. we are up to our eyeballs in gasoline. in the meantime, let's get to the top headlines in the past hour. we need to start with greece. the finance ministers in brussels meeting has ended.

time thethe first greek prime minister will meet with his counterparts since the weekend referendum. hans nichols is in brussels. give us the latest right now. hans: the meeting has ended ended ended without a formal request from the greeks for a new bailout program. all there was was talk. not many specifics. , whether thatr flouts the clear directive angela merkel gave, wanted to see precise from the greek side. no chance ofually opening before then or even this week. the leaders will meet later this evening. there was a report up there that has merkel meeting before the leaders gather to a readout of what happened it seems like there was a great deal of disappointment mess with frustration on the greek side.

they were supposed to come year with specifics and it did not do that. they say the last offer was the one they submitted before the referendum. they wanted to come here and room -- verye latest provision after the referendum and then do something formal. theyes seem to be like missed yet again another deadline and it is harder to see how finance ministers can own funds.eir scarlet: everyone is waiting for a formal request pimm:. what are they talking about if not specifics? diplomats have extended iranian talks until friday. john kerry will remain in vienna or the discussion. the u.s." -- other global powers want to remain in the u.s. and in return, they would ease economic section. the u.s. trade:

deficit got bigger inmate p or $42 billion. exports fell by the most in three months and the biggest declines came in commercial industriald equipment. businesses are having problems selling to overseas customers. shares of the chipmaker are collapsing today. in second-quarter sales, they fell more than originally forecast. the reason is weak consumer demand. andy said revenue dropped about 8% from the first quarter. to havana.ahead carnival is set to be the first u.s. cruise ship line to call on a u.s. court in more than half century. the u.s. treasury and justice department's had given their ok. it is now up to the cuban government. --y plan to offer seven-day to cuba, focused on cultural exchanges. those are your top stories of the morning.

uprlet: much more is coming on the next hour of the bloomberg market day p selling faster than ever before. supply and demand or his technology changing the game? pimm: two new york and -- new york yankees but a rod is not one of them. scarlet: and get excited. congress is back in session with a host of issues to tackle before august. we have got the full roster of what they will attempt to a comp us before they go way again. all that and more on "bloomberg market day." frantically trying to prop up the market but regulators and houston makers cannot stop the bleeding. foreign investors are selling shares listed in shanghai at a record pace. since reaching a seven-year high in mid-june, mark more than a quarter of its value, raising more than three jillion dollars. -- $3 trillion. pimm: the founding and portfolio manager joins us from boston and also with us with a more bearish

perspective is the author of the collapse of china, gordon chang. he joins us via skype from hong kong. i'm wondering if you could describe for us, what has the chinese government already taken steps to extend the losses? me on the show. the chinese government has tried to decline with measures including support by brokers. they set up a $19 billion fund purchase equities, government agencies have been intervening in the market directly. clearly, it has been overwhelmed by the volume and leverage in the market specifically. mentioned, the market has declined about 25%. though stabilizing a little bit, there continues to be pressure on that market and it is not spilling over into hong kong and

the united states as well. scarlet: gordon, i know you are bearish on china. a lot of criticism so far, but i wonder as china looks to introduce its next measure to support the market, what about the potential for a china devaluation of the current he? credibility held it steady. is it time to perhaps let it weaken? >> they probably need to do that. i think the currency is overvalued dow. if you stop looking at all the money that has come out of china out of the last half of the first year in the first quarter of this year, and also all of the money they have been spending to defend, especially in february and march, i think that essentially you have gotten overvalued currency. they will have to recognize that, especially when you look at weak trade numbers. it is a reflection of how bad things are. gabriel, do you agree with

gordon that it is overvalued? >> there has been outflows but i do not agree with the currency valuation argument. it would not necessarily be a solution for china. i would like to point out this correction in the market is more related to overvalue equities and leverage in the market, and not necessarily an indicator of future growth for the economy. the economy has slowed. and it would be very interesting to see how the countries are performing in the second quarter. banks have been very defensive in the market. is theirn for that balance sheets are actually better today five years after the crisis of 2008 and 2009. , interest rates are coming down clearly and dramatically and quickly. let me point out another issue, we are in the middle of a credit crisis globally.

you can see that with sovereigns , but youce coming back can also see it at the corporate level in the high yield market across emerging markets, whether it is an energy market in brazil or property companies in china, which have overextended themselves over the last couple of years. globallye rates rise were easing such as qb end, that will become more difficult for companies that need to refinance. scarlet: the safe haven move is one factor as well. reserve ratio requirement reduction as well, that is the first time it is happened final -- simultaneously. a risk environment around the world, or is it specific to china that it needs to do what it can to prop up the economy? >> this is really china specific haired what is interesting, four reductions in the benchmark it just right since november. three reductions in the reserve

or arm and ratios since february and this has had very little effect. monetary stimulus right now in china really has, they can reduce interest rates all they want, but the real problem is there is a fundamental lack of demand. when we load up this bubble, the bubble was created by the central government are talking it up, and they have been doing this now for about nine months. own what is basically a stock market crash. this is extremely serious. in have basically got people china now starting to blame the communist party for what is going on. pimm: can you speak a little bit about the credibility of chinese leaders? is this a political issue now? >> this has become extremely political. of the rescuent package saturday is clearly directed -- it is supposed to help people in beijing. what you have got now our individual investors around the country saying, what about me, why are you rest going --

rescuing the small caps that i'm invested in? the conversation in hong kong where i am is that the chinese are panicking, they are terribly bumbling this rescue package, and essentially they have lost all credibility. where evenituation if they try to do something now, i think they will have problems because especially today when you had across-the-board falls in major industries, it is an indication that people no longer trust. we will probably see some changes in the political system. gabriel, as someone in the markets and a foreign investor, you have got to look at the measures being introduced on what seems like a daily basis. you have companies taking matters into their own hands by suspending trading. 700 companies have halted trading in shares. most of these are by shenzhen listed companies. this is not confidence inspiring

for a foreign investor. >> you are absolutely right. the overvaluation of the markets, whether shenzhen or shanghai, was clearly a problem which, when the lake was introduced, we assumed the arbitrage would take place between hong kong and the shanghai shares that had a premium. , as onealternatives hong kong share rises, shanghai and shares rise. that is what has occurred. i think it is more of a natural situation for shares to reduce their premium. this is not necessarily related to fundamentals. having said that, you are right. the measures are not going to work in my opinion. they are too little to support the market. i do not think they should be implemented, whether it is share buybacks or, as i mentioned, the intervention by brokers in the market. it is not the role the

government. the opening of the capital account, the opening of the link suggests authorities in china and useincrease flows market alternatives rather than intervening in the market. has ahink that market list traded as a premium and we expect the premium to decline as the link is utilized. you so much,k gabriel, joining us from boston. us viardon chang joining skype from hong kong. in san francisco, home prices are literally through the roof and it is more to it than a growing local economy. we have got details. ♪

scarlet: welcome back. pimm: you're looking at a live shot at the brussels and european union finance minister's meetings. on july merkel as well as the head of the european union was also attending and listening to prime minister alexis tsipras. scarlet: they are about to hold their finance ministers meeting. on july merkel threw them at reporters before she headed into her meeting. on greece.hinges it is not a matter of weeks but a few days. not yet there for talks with greece. pimm: the belgian finance mr. reported to said the greek presentation was good but that they need to hear more details from the greek prime minister.

the gray solution depends on mr. tsipras and i believe alexis tsipras will be addressing this tomorrow. scarlet: he will also meet with on july merkel and his other peers and european leaders and everyone is waiting for greece to take the swing. the ball is in their court, to do something and present something. we wait. pimm: and the banks wait. let's wait no longer and go to julie hyman right now for a look at what is happening in the markets. comment onve got to the picture you just showed from brussels. is it a finance mr.'s meeting? they have got red carpet, barriers holding back paparazzi. julie: it is a little in congress, we could say. out stocks.olling

the superlatives we talked about a few moments ago down for a in aboutaight day dow a month. the s&p lowest since the 11th. a2-month low as we have seen, fairlyating and then deeply in the red and all the elements we have been talking about are still out there in today'session. about the average you just heard mike talking about in the s&p 500. here is the price and here is the moving average and yellow. a momentum indicator and some traders pay attention and we have fallen below it. something worth noting. i wanted to bring back up another stock we heard mentioned

a few moments ago. advanced micro devices deeply falling today are down 15%, the biggest drop in nearly a year. the lowest level since november of 2012 after the company said sales will fall more than previously estimated down 8% instead of the prior 3% decline. this all has to do with weakening pc demand. the trend has been going on for quite some time now. this has infected other semiconductor stocks as well. some of the biggest declines in the smp are these various stocks. no longer in the s&p, but sky works, they are all declining today. i noticed a movement lower in yahoo! and yahoo! as well. yahoo! by extension. to alibaba'se shares.

i will want to take a look. alibaba after began trading in september last year, 75%. since then, it has pulled back by 35%. we have been talking about momentum stocks. this was one of them. it has fallen out of the category. scarlet: julie hyman, thank you so much for the latest. real estate a technology? whatever it is, dramatic changes homes sold at the fastest pace in more than two years in the usa up 6% year-over-year. scarlet: san francisco is one of the hottest markets. cory johnson joins us now with more.

about thest strengthening economy? jobs numbers are getting better. a hotbed of hiring. you cannot hire fast enough. the perception of a economy, employment numbers, we debate about those on a regular basis and what good fun that is. especially here in the san francisco bay area, you have so much wealth created from recent ipo's, twitter and faced took over the past few years, they really found themselves going straight into the housing market. toy 5% year-over-year gain in jobing prices, it is dropping to read about let alone experience in the bay area and the heart of technology. one of the most interesting things found in their work is the pace at which homes are selling. goesast from the time it to the market, there is a great seasonality.

sellwait 50 days or so to it. typically, the fastest month of the year is june. yet, in may, it was found the homes are selling on average in 28 days, the fastest they have seen in three years and faster than any other mate. the pace of sales, not just the price, is happening at a breakneck speed and that is turning into a lot of action in the housing markets. pimm: any idea how much of the sales are for all cash? cory: we know more and more are for the most attractive office. it is almost a necessity. all cash certainly helps buyers being asked to do things like write letters, make videos, and prevent -- present themselves. i think one of the other things we really see here is that this is driven by the proliferation of information in the market and that homeowners in a hurry to

get the new house and buy them quickly at whatever price. it is tempting to credit technology for a lot of this. how much of this is supply and demand? cory: nationwide, what you see it is different. you see more supply coming on. other places like fort lauderdale, you see rising prices and falling supply. a city by city change. technology is changing the rules of price is covered. the people are able to see quick changes and imagine what their values might be. thank you very much cory johnson joining us from san francisco. we will introduce -- interview the chief executive at one p.m. eastern right here. scarlet: moore is coming up. we will be right back. ♪

scarlet: breaking news headlines on greece. the prime minister of greece presented the greek proposal to president obama in a phone call. he held a phone call with the president according to a greek official. we're not sure when this took place, but presumably today. he spoke withy jack lew, the treasury secretary. this is all on greece in a statement. greece'situation is much more difficult after the vote. pimm: i will say goodbye to you and see little bit later in the afternoon. we will be back with more. ♪

♪ ♪ ♪ 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. pimm: welcome back. let's take a look at u.s. stocks falling today. the dow jones industrial average falling .9%.

the s&p 500 falling more than 21 points. also falling more , a lot of that related to amd, shares falling more than 12% after the company said that it missed analyst estimates. let's look at oil prices. they are also tumbling today. a lot of sellers and oil, down more than 2.5% right now. and $.20 for a barrel of nymex crude. we are seeing that decline throughout the energy complex in natural gas. let's take a look at top stories in the hour. euro zone leaders made it clear it is up to greece to explain how it will pull itself out of the crisis. the greek prime minister is attending the summit today. it is seen as another last ditch attempt to stay in the eurozone. hans nichols is there.

we seem to be learning a little bit more about the tone of the meetings today. what do you take away from the headlines? about what confusing was actually expected heading into the meeting. there were a lot of conversations where greece needed to present specifics. they did not. they presented general views and nothing in writing. they are scrambling to put ,omething together in writing an official application to the european stability mechanism for a third bailout. president,ogroup here is what he had to say coming out of the meeting. greece doblems in need credible reforms to deal with those problems. the greek we need government, whether they have such reforms in mind, whether they are politically prepared to do that, that is what we will hear. right now, angela merkel

-- suppress -- mr. suppress mr. suppress0 him him -- he's prepared to give specifics. it was announced he would give a speech to the european department and that is where we are now. no official request for additional money from the greek side, which is what everyone was expecting. a amount of disappointment. the commissioner came out saying he was still optimistic. his was really the only optimistic note that i heard coming out of that meeting. out more and report back when we get that information. is he trying to wear down on july merkel?

>> only he knows that. from other people who have been strategy hashis been confusing. he sends mixed signals. at one moment, he has a five hour conversation and people think there is progress, and then he gives a speech in athens. last week, two weeks ago, talks were progressing on a monday. it seemed like we had a good suddenly theyhen went south and wednesday, he referendum and then goes back and campaigns with fiery and hot language, critical of the creditors he will now once again ask for more money. pimm: thank you very much, hans nichols, reporting from brussels. -- more news headlines come a surprise in the labor market. job openings unexpectedly rose million.ore than 5.3

it was the second month that openings exceeded hiring. that may lead to wages rising. the south carolina senate has given a final approval to remove the confederate fried -- confederate flag from the state p. lawmakers largely ignored calls to remove the rebel flag until the killing of nine african-americans at a church in charleston. areshares of shake shack falling this morning down more than 9%. morgan stanley downgraded the stock, causing it to drop by 30%. shake shack is rolling out a new chicken sandwich and some of its locations today. shares are expensive, no matter how you stack it. and those are your top stories of the morning. markets are closing right now in europe. let's go to mark barton in london. four days of decline in

the european stock market. the stoxx 600 lower since february. investors turned their attention to brussels. once again. the deja vu is there. france and spain, it all happened on monday. no trading in greece on monday or on tuesday or on wednesday. we know that for sure. these are the biggest movers across europe. at the markets on tuesday. a french company down 8% today. europe us his biggest service provider announcing as to cut 6000 jobs and reduce its fleet to oil ships to cope with the slumping crude prices. 2.3% today, the german newspaper publisher is in talks to comply with a broadcaster to strengthen their push into digital media according to people familiar with the matter. ,olls-royce, the engine maker

it is falling another 5% today. jpmorgan today cut the stock to underrate from neutral. target,month price could be more downsized their and jpmorgan is right, i will leave you with the spirit all the sectors are declining on these stocks 600. that tells you everything you need to know about sentiments here. back to you in new york. pimm: the u.s. congress is back in session and lawmakers have a lot to do before their next vacation in a month from now. is with us now from washington. tell us what is at the top of congress's agenda? >> 16 is the number of working days before they take the next five weeks vacation in august. the top of the agenda is a highway transportation bill. as unexciting as that sounds, there is an $11 billion

shortfall lawmakers are facing right now that basically dictates infrastructure projects and how highway works in all sorts of issues that are very important. they need to figure out how to pass that going forward. they have been doing this over the last couple years and there has been some hope of doing a longer-term bill. it costs about $90 million. it is the last part that is the problem. lawmakers want no part of try to finance a $90 billion deal. committees are trying to figure out a way to plug the gap. it is a primary issue. import thing, the export expired at the end of june and it has become a huge fight between conservatives on capitol hill and the business. is a feeling that's a highway bill, as it starts to move forward before the deadline, will become a vehicle to try and reauthorize the x or import. that is another thing to keep an ion. love government

shutdown spirit nothing like countdown clocks and things of that nature that we will all have to pay attention to. this month is very important on this because you have to keep an eye on how that process is working going forward. this month will dictate how democrats and republicans dictate themselves going into that battle after the recess. can you tell us where republican and democrat leader's stand on the highway transportation bill and the export import bank? >> on the highway transportation bill, there is agreement that something has to be done and they cannot allow them to go over the cliff. it is just a mechanism on how to pay for it. if you talk to tax writers on the republican and democratic side, they agree that there is a way forward. it is more a matter of how long-term the past will be than whether or not it will get done. it is a very interesting thing. of 100 have voted to support that in the past. the house is the problem.

speaker boehner have to -- will have to deal with a lot of conservatives concerned about that built. likely a part of that highway measure. pimm: how does the presidential aspirations of many u.s. senators play into all of this? they are on the campaign trail as well as in the senate here it classy does not make it easy because they're willing to cause problems on the senate floor. we have seen it with rand paul and ted cruz. it is a matter if they want to make it an issue and cause problems for mitch mcconnell. it is always something to keep a close eye on. they like to use the senate floor as part of their mega form -- megaphone and platform and they will be doing that this month and you can guarantee it. thank you very much. still ahead, an inside look at saudi arabia's multibillion-dollar military. it is a very messy war with yemen. ♪

pimm: it is another blow to puerto rico's attempt to get out of its fiscal crisis. the federal euros court has affirmed its decision to throw out a restructuring law. conflicts with the u.s. bankruptcy loan. officials wanted to use the local law to help deal with $72 billion worth of debt. the court says puerto rico should ask congress for help. the number two house democrat said moments ago he supports a bill that would allow some sort .f bankruptcy filing

this is an online polling company. widow, sheryl sandberg, will join surveymonkey's's board and she wants to help realize her late husband's vision of building a lasting company. you can now live like a wall street mogul. the lieberman brothers chief executive will auction off his idaho a estate next month. you will get three residential buildings with a total of 11 bedrooms, 10 backs. plus, there is land right on the river. it will not come cheap. pay as much as $50 million. those are your top stories. more than 3000 people, half of them civilians, have been killed

in fighting in saudi arabia and yemen. saudi seven arsenal of sophisticated weaponry. the firepower does not guarantee success against rebels. >> in saudi arabia's's largest cities, displays of religious wealth, andrivaled rapid development are everywhere. burger joints and shopping malls, there is little indication this is a nation at war. for that, you must look south, where the brunt of a four months saudi air bombardment has them warned by yemen civilians. saudi side of the borders, local residents say they see little changed in their daily lives. by but it doese not affect us at all. we do not feel there is a war nearby.

>> the tribal militia provides a second line of defense. in the remote region where government generosity has generated strong saudi nationalism. >> most people here depend on the state to all of our jobs are from the government. >> how important is the saudi army in this region? tribes serve in the army. >> while citizen militia members may feel safe on the frontier, real military forces face a serious threat. >> it is very dangerous but this is their job and this is what they are trained to do to protect the border and look after the border. says theous spokesman border is secured. likeepeating the attacks this one will not frighten saudi forces. >> very well trained and well equipped. need.ave everything they

>> they have been surprised by the extent to which the -- they have proved themselves quite resilient and have managed to carry the fight back to the saudi on the border. not just the fact that they have taken casualties, but the fact that those engagements are even happening at all. aree says the saudi's poorly prepared for extended ground campaign. cannot match saudi firepower, saudi money, saudi facilities, or even saudi formal training. but the saudi's cannot match their flexibility, mobility, knowledge of the terrain, ability to hunker down in the mountains, they are fighting two different wars. along, recent ride regular reports of incoming rockets. technical training seemed in short supply with much of the

equipment in disrepair. despite the billions of dollars spent on american weaponry that is made his military arguably the best arms in the region, here on this southern border, the country is protected by a rusty metal fence and a few pickup trucks. while saudi airborne aggression -- the rifle toting rebels have remained resilient. allowing this bloody stalemate to continue. i'm joined now. thank you for that. but give us the latest to what is the update on the conflict? >> there was a serious about strikes overnight across five different provinces. in yemen, more than 120 have been killed. meanwhile, the un's special envoy is in the region trying to negotiate without much success so far. the: i'm glad you mentioned

united nations. what has been the reaction from international agencies with the conflict? almost unanimously, there are cease-fires. needs to pull back on some of the airstrikes. pimm: we keep hearing the rebels are in some way connected with iran. is that something you experience --found out question mark out? >> no one has been able to confirm that. and very fewen people in the region are saying there is any evidence for it. pimm: what are they worried about? there seems to be a lot of fighting in yemen. >> on the border, there is a huge amount of video out there showing these successful revels without much retaliation in the

region. not very welle prepared for this conflict. pimm: you mentioned in the report they spent billions of dollars on sophisticated weaponry, aircraft, and so on. will they have to rethink what the military mission really is? >> you talk about people who deal with this sphere and the united states went through that in the last 30 years. this kind of conflict seen around the neighbors continues, it is something they may want to consider him a yes. pimm: any kind of reaction from other states in the region to the saudi's's military incursion? are allies,, there egypt involved in the blockade at yemen. there are some people siding with saudi in the conflict. pimm: thank you very much. coming up on the bloomberg market day, more details on the global stockmarket selloff. ♪

julie: we have been seeing sharp the kleins off the board. still a selloff here sending the dow to about a five-month low and the s&p to its lowest since mid-march. the nasdaq at a two-month low as well. it seems as though there is not atot of optimism on greece this moment. there is also concern about a lack of stimulus, or stimulus not having the desired effect in china. commodities,g on then pulling down commodities related stocks. we are seeing the bloomberg

commodity index trading lower by almost 2%. crew took a sharp light lower earlier by falling as much as recovering. it fell 7% yesterday and copper futures down 5%. copper very reliant on china, falling for a third straight day , pretty much at the six year low for the copper prices, as i mentioned. that make and produce various commodities are also down sharply. let's figure out how the options market is making all of this. chicago, the vicks today, as you might expect with all the selling pressure in the volatility index it is ticking up here. of the just a function more volatile in environment that we see playing out in

stocks today? $1.2.are up 19.5. vic straight up it is almost like we come out of trading. with the news of the day is. there was so much intense pressure coming on. we have seen that back off a little bit. things have settled in. the news that recently came out, that there is not news coming out of greece today, a proposal probably tomorrow may have eased things a little bit here but you're right, the vicks is up quite a bit today. julie: what kind of options are you seeing with the s&p and

other vehicles attracting a broad market? what our options traders anticipating in the coming days in terms of activity? >> early today, there was not much volume. once that 200 a moving average was broken, a major support area in the last week or so, we really saw intense buying down below that. that 5.5 handle we were looking at for the supporter, once that keptreached, the buyers coming in. they were all near, going out a week or two rather than august, september, and further down options. a lot of that pressure is because of what is coming out of greece, perhaps the supposedly a coming out of iran. it is all near-term pressure. julie: we only have less than a minute left. specificallyg at the tracks transport, what is

your strategy here? >> i love the transport area. it has been beaten up so badly but it is really hard to pick a stock. out to september, option markets are quite a move, a 12 to $15 move. i can sell the 155 call. $1.20, ihat for around have major of site knowing what my downside is. i like the transport index, beaten up so badly. it is very difficult to pick an individual equity. , scottthank you so much bauer, coming to us from chicago. more is next. ♪

it is 9 a.m. and san francisco in 6 p.m. in brussels. betty: welcome to the bloomberg market day. leaders are meeting in brussels in 30 minutes and francois

hollande says greece must present reforms and angela merkel says time is running out. there are only days left and we will head to brussels for the latest. pimm: the heads of edna and umana will join us to tell about their merger. betty: elon musk will speak rocket thatacex exploded. pimm: welcome to the bloomberg market day. betty: let's see how the markets are trading and it is an ugly day and equities.