germany says the ecb should not come to the rescue. the china markets open and stabilize and it believed the new york stock exchange will open for business this morning. pepsi is under pressure to perform. good morning, everyone, this is "bloomberg surveillance." i had some lay's potato chips the other day and they were very good. i had not had a bag and years. brendan: such things did not exist in the former universe. fat is back. tom: today is the first feeling of a normal day in ages. brendan: the news is slow this morning. it was said i usually quite like

the songs written by english musicians. tom: veidman being quoted. here are the top headlines. vonnie: the new york stock exchange at a computer glitch that knocked out trading for three hours and they're looking at a software update. they must verify the calls and reports to regulators. the president of the nyse said trading was suspended because he didn't trust the exchange system. >> we chose the least disruptive option for customers which was wrote out the problem and put up plan and place to fix it, fix it, and reopen and there was no work for customers to do to connect to the exchange. vonnie: trading was halted but shares still traded on other venues like nasdaq. greases under the gun today to come up with an economic reform plan to stay in the euro area. european leaders are giving

greece until midnight tonight to present his proposal. they want more spending cuts before agreeing to a new bailout. the imf chief christine lagarde says the fund is ready to help in greece might get special treatment. >> we remain fully engaged in order to help find a solution that will be most conducive to what i said is our mission which is to try to help with restoring stability, growth, and debt sustainability. there will be a eurozone summit sunday so leaders can decide how to respond. greece has extended capital controls for monday. in china, stocks lost about 1/3 of its value -- of their value. in the last two weeks chinese regulators have unveiled a number of measures aimed at restoring confidence in the market. apple is planning to make a record number of its new iphones. they are planning on an initial

production run of 85-90,000,000 handsets which is about 10 million more than the iphone 6. they go on sale later this year and will have fewer changes. for the second time in three days, the world biggest by grace looked more like bumper cars. 30 writers tumbled yesterday during stage five of the tour de france. they dusted themselves off and spent on -- and sped on. can you believe that? tom: does this happen every year? brendan: yes the pileup is not new. we just happened to have seen two and the last year but it's always been dangerous. tom: it is slow enough today were instead of looking at the data screen, i am using periscope. brendan: aren't we also broadcasting? tom: yeah but -- brendan: the potato chip thing

and then periscope. i apologize. tom: let's do a data check and move on to u.s. jobs. we are up 20 with risk on an yields are a little bit higher. the euro is stable which could move in a heartbeat for a headline. oil is churning. iron ore is absolutely crushed overnight and it down a solid 2.9 standard deviation over the last number of days. that is ugly. on to the next screen -- this shows some of the churn this morning. the greek yield is not a typo and that's a new high on the two-year -- 59.00 as germany greines lower. -- greines -- greines - grinds lower.

let's go back to the united states and economic data is coming up over the next 10 days. this is weekly data compared to our total employment. the goods manufacturing collapse of the 1970's, many claims and factories out of work and here is the cyclical move and we come way down to this absolute nirvana of next to the claims. brendan: usually when you run charts back to the 1960's, we are looking for a huge change in trends since 2000. what you see here is a return to trend. we have not said that in a long time. tom: it's very constructive and shows that tension between the fed in september versus yesterday. deutsche bank was adamant about the tendency of the fed not raising rates until next year. we need to be briefed on the moment by moment effort in

brussels. our attention is there and the fragile euro is spreading without question showing the continued tension. it is relatively quiet. hans nichols had a beverage of his choice last night in brussels. give me the backstory. i know they are not relaxed in brussels but what are they actually doing on this thursday? hans: it seems like the french are trying to help greece write a proposal in athens. here, everyone is waiting for this document to drop at midnight. i cannot believe you got through that speech. you must've had a slow morning. brendan: i got all the way to the end where he says the ecb should not continue its emergency liquidity assistance. they say it's a monetary body and not a political organization. will that have any bearing on the decisions? hans": that is the part of the

speech he cuts and pastes on every speech he does. to change the ela, you need 2/3 of the council and we suspect mr. veidman has been voting that way for a long time. vonnie: you said the french were helping with the details of the proposal. is this something that the greeks needed with someone to come in and take a fresh look at this? hans: may be but the french have always tried to figure out how they can get this across the finish line. if the german ministry were trying to draft a proposal, we would see the euro at $1.20. the french are optimistic about the prospects for a deal. they may help but what is mr. cypris going to come in with

numbers and are the institutions going to require him to redo all the calculations because the economy is in a freefall? we just had cbi out which is down and deflation is in greece and there's no way the economy will grow this year. the last we had for the imf is they had zero growth for 2015. if you have negative or zero growth how will you make these formulas work when the economy is falling so quickly? tom: thank you so much. we will have much more on the headlines. we have seen a contagion from greece and its measured indirectly so far. u.s. equity markets are aware about greece and it has filtered interest rates and still to come is equities. michael purvis will be with us who writes piercing notes on the linkage of volatility to the markets. is greece affecting our markets?

>> certainly it is a bit. over the last couple of weeks, we have seen a transition from greece to the china news. i don't think -- at no point has this in a tragic exploitation of risk loss into our markets. we are off our highs about 4%. tom: we are trying to be different this morning. do you maintain your outlier bullish call? >> i do with a couple of caveats. we are halfway through the year and we are at 2250 four the year. the elephant in the room is earnings and getting back to not a great earnings trajectory but a steady and decent mid-single digit trajectory. i am sensitive to this recent oil selloff.

if we see continued weakness and oil that will affect the energy sector earnings. tom: what does it do to the rest of the market? there will be massive deflation if oil joins the party. >> it's good for parts of the world and europe is a net beneficiary of oil more than the u.s. is because they don't have the mp sector that has ramped up so successfully like ours has. energy companies are significant contributors to overall earnings for the u.s. stock market. i was hopeful that if oil could stay 60+ or so for the balance of the year that these companies would handily be good in the second half. if we continue to see weakness in oil that may be an emerging bear argument for u.s. equities . brendan: oil through this party

and everything else joined in. which is the bigger story, greece or china? when you look at commodities, prices of the last 48 hours, even though equities have recovered in china, it's argued that china may have consequences. >> for the u.s. equities -- it's always risky to manage but china has had a retail engineered stock boom and like clockwork it has rolled over like a mid-cap stock that got overly built up on retail sentiment. i am not too worried about that. i'm not sure is the biggest indictment of the chinese economy either. the global growth profile, you have to look at the fact that investors in china are losing money, tom: we have chris crist anti-

coming up in the next hour. we are getting to the advent of earnings physician -- earnings season. >> part of my call has been not to expect great earnings this year. we had 6-7% over the last three years over low rates. the second quarter should be set for decent beats. conservative gains will be on fx and also on lower oil. those are easy beats. the forecast this season will be very telling. tom: coke or pepsi? >> pepsi. tom: i don't have a choice, i don't care. that's the issue. >> yes.

tom: it's true. brendan: coming up, we will take the pepsi challenge right here. the challenge is to figure out whether cap's he is still relevant as they get ready to report results. also, let us take a look at the twitter question of the day -- yesterday the big board was down for over three hours and the world continued to turn on its axis. does the new york stock exchange even matter? we are still here for the next two hours. let us know. tom: did you come up with that question? brendan: yes. everything is worthwhile on this show ♪

tom: futures are up 19 and dow futures are up 131. vonnie: there was an historic vote in south carolina early this morning. the house of representatives joined the senate and agreed to remove the can render it flag from the capitol grounds. this came after more than 13 hours of debate. the movement picked up momentum when i'm black church members were killed in charleston and one was a south carolina state senator. the largest u.s. aluminum producer, alcoa, posted second-quarter earnings that missed estimates. it's thanks in part to a rise in exports from china. they also cut its forecast for sales in aerospace and the chinese market. you can now have taco bell ring your bell as they start home deliveries. it is using a delivery company called door dash which costs

$3.99 plus tips. tom: let's look forward to what we've got or us this morning and in this hour, we will look at pepsi earnings. we will do that in a bit and of course looking at stock prices over the last couple of years which is share buybacks. this is a raging buyback including the idea that the government would limit the number of buybacks the companies could do. michael purvis will join us and we will look at market volatility and the challenges seen in a quiet vix. brendan: pepsi reports in about 15 minutes. that companies having an identity crisis. in april, the ceo says we have not seen the consumer as confused as we have. our beverages reporter joins us

from princeton. who is can use? is it the consumer or pepsi? >> good morning, it seems the consumer is a little confused. they read a report one day about low-fat and the next day it's low-sodium. the packaged food companies have to stay on trend in cap's doing a good job in doing that. it's just that some of the trends tend to be conflicting. vonnie: does it matter how much healthier pepsi makes itself? is the consumer moving away from subjects anyway? >> that's exactly the case and it's been happening for a while. more interestingly, consumers are moving away from artificial sweeteners. pepsi said it wants to take a look at aspartame and maybe take that out. it's another in a series of trying to be in step with the consumer. carbonated soft drinks still account for half of the pepsi

beverage sales of they are relevant but it's a falling percentage. i know the trend is juices and flavored waters and energy drinks. they know that's where the growth is. brendan: pepsi is also a food manufacturer. is the story of pepsi the story of frito-lay? >> it is right now. it's a powerhouse. the packaged food group in the u.s. is basically flat, there is virtually no organic growth across all pricing. frito-lay was putting up3% which is what we are expecting. it is standing out from the crowd. tom: it is a single digit company. that's unacceptable. is the ceo under board pressure and how do she create high single digit gdp revenue? >> it will be a challenge. you have very mature brands in

very mature categories in the company is doing as well as can be expected among a spirit groups to grow. i agree, even the pepsi target of 7% for a long-term's earning growth -- tom: what do the activists want? what is the to do list? >> the activists mainly trion was trying to break up the company. then each division could pursue a different path. pepsi stock prices performed well. it is performing fundamentally better than their peers in the stock price has reflected that. for now, the focus is on continuing to innovate on the cut line and cut costs. the company has ambitious cost cuts come $1 billion per year. tom: thank you so much.

we will have the earnings coming up. it's nice to speak to anyone on investments particularly someone with a recent killer track record. in our next hour, christopher cressotti has having the year of years with his capital management. up any we will see what rabid he is pulling out of the hat and the next hour. stay with us. ♪

tom: good morning, everyone. the new york stock exchange may open for business today. we have a morning must read -- this is from matt levine.

what i saw yesterday was one more nail in the museum's coffin. vonnie: it affected only 14% of the volume. tom: 86% of the volume was done by other people. tom: it shows the volume kept going. it was no big deal. brendan: from what we understand, it was a software upgrade and they are trying to keep up with high-frequency trading. i saw the redhead and brand back to the eternal -- and rent back to the terminal. tom: we are living in another time where we run back to the terminal and team coverage of the new york stock exchange. it's not news. vonnie: all of the stocks traded

practically with almost 100%. tom: what i recommend is read matt levine. he has footnotes in his essay out at bloomberg view. it's accurate on what did and did not happen yesterday with the and we i say -- with the nyse. with certitude, they will open for business at 9:30 a.m. we will have pepsi earnings next. ♪

tom: good morning everyone," bloomberg surveillance." there is a set of headlines in greece and the eu message is we need a plan. brendan: yeah, france is working

on it right now with greece. we are just waiting. it will get exciting tomorrow. tom: or even later today, i would suggest as news leaks out. we are waiting for pepsi earnings which is the beginning of the earnings season. the bank earnings will be coming up and that will give you the best coverage. my major message on pepsi is i don't see any at home. vonnie: second quarter core earnings per share is $1.32. the estimate was for $1.24 and that's higher than the top end of the range of estimates. this is for the second quarter, 2015 and it's keeping its full-year earnings outlook. pepsi says net revenue is down 6% in the quarter. tom: we look at this with the general electric. it grew at a nominal 5.1% which is not bad.

look at the net revenue declining 6% with a huge 10 percentage point fx. vonnie: and they were looking for an 11 percentage point difference. so they did better on that. tom: we will have much more on pepsi. let's switch gears. vonnie: things are expected to be back to normal at the start of trading as software upgrades may have led the nyse to hold trading for more than three hours. the nyse will have to verify what really happened and then submit a report to regulators. it's the most serious outage since nasdaq suspended trading two years ago. >> the most important thing is a little bit of hippocratic oath -- do no harm for the stocks.

my first concern was do no harm during the day. those stocks continue to trade elsewhere and get the problem fixed and get it back up and running for the close. vonnie: it did not appear there was a cyber attack on the exchange. the great prime ministers deciding how far he want to go to keep his country in the euro area. he has until midnight tonight to come up with a package of economic reforms in exchange for a new bail out. european leaders want spending cuts and some are spending that he will come through. christine lagarde says there should be two parts to any great proposal. >> one leg is about significant reforms and fiscal consolidation as we have advised in the case of ireland, portugal, cyprus and outside the eurozone, latvia and iceland and it has worked. the other leg is debt

restructuring. vonnie: greece is already promised to introduce pension and tax reforms next week. president obama told senate democrats that there is less than a 50/50 chance of a deal with iran's nuclear program. it has been delayed until tomorrow on the country is preparing for a post-sanctions era. the u.s. and other global powers say they will ease sanctions if iran and brees to easing nuclear development. yahoo! now offers betting on fantasy sports. betting on sports is a legal outside las vegas. they get a pass because fantasy sports are considered a game of skill. one trade groups is 51 million people in america play these fantasy leagues. brendan: vladimir putin is speaking now at the bric summit

in russia. he says they are capable of keeping the ruble within -- under their own control. he said he would like to start practicing yoga. how important is this forum, the annual bric meeting? how important is it to china? >> if you go back to 2006, there was a huge amount of excitement about these rapidly growing emerging economies. in 2015 the prospects have faded and some of the excitement has come out. i suspect that there will be problems with china closer to home. there is the slump we have seen

in the equity markets in the last.three weeks tom: i look at the claim the economist in asia quoted this morning on iron ore -- bring up the commodity charge. -- chart. it is a massive deflation in inflation-adjusted commodities. commodities are rolling over and that has to kill thebrics? >> yeah, a lot of those problems start in china. it was the chinese real estate boom in the structure boom in all of the demands that generated for i am door that was one of the main drivers of the commodity super cycle -- for the iron or sector that was one of the main drivers of the commodity super cycle. the government is trying to shift away from investments and the consequences are playing out in overcapacity. tom: we've got greece and the chinese equity markets and the elephant in the room is a rollover in commodities led by iron ore.

brendan: of course that has huge consequences for china and australia and brazil. let's go to mumbai. you don't have to talk about yoga. instead, india is a thriving democracy with an independent central bank. what are they getting out of the in this club? >> the bric has been led largely by india. it's been in existence for the last nine years yet the irony is they don't do too much business between themselves. the lobby accounts for 17% of world trade. the india exports is nearly $25 billion. they are trying to expand business size between the prime nations and see if they can get some capital investments in infrastructure that india needs. the bric bank has an indian

leader. brendan: who is the most important potential trading partner for india? is it russia or china? >> actually both. india needs russia for uranium but it does not have enough sources of uranium. there have been long-standing relationships between china and india. india needs chinese help for infrastructure and needs the chinese for invest months in the road and power and port sectors in terms of capital but also capacity. india and china have been warming up to each other despite any issues. tom: it's great imagery and every thing looks great but should u.s. investors focus on brics or whatever the next one will be? >> we were talking about how much correlation on multiple

levels exist to train these 4 countries. they are all important parts of the global economy but they are moving to very different rhythms amongst each other. india has much less of an export story and more of a closed economy. brazil is a huge exporter of iron or. russia has its own specific issues going on being a country run by vladimir putin. i wonder whether the brics acronym is relevant anymore. they are all big countries but so is indonesia. brendan: jim o'neill has wandered this out loud. we have tom orlick with us still. the slide in equity markets in china has taken a pause, problem solved? >> the government seems to have

managed to calm down the market. the bigger question is with such massive government intervention and so many shares suspended and so many investors instructed not to sell what has been the cost of stabilizing the market? have they stabilize the market but killed market mechanism in the process? brendan: thank you very much. coming up, we see by -- why share buybacks could run into roadblocks. this is "bloomberg surveillance," and we are asking the twitter question of the day -- does the new york stock exchange matter? not really anymore. let us know. ♪

tom: good morning, everyone, crisis over, quiet in greece this morning but also the headlines of pepsi-cola doing better than good. it's a single digit world but they are managing through cost control? vonnie: absolutely in fact $5 billion worth of product to the gains beating on the top line.

tom: let's break out a bottle of water this morning in celebration. brendan: i will break out a gatorade. tom: let's do the single best chart right now. brendan: what to do with your extra cash is easy -- buybacks are the subject of the single best chart. since the current bull market began 2009, the gauge comprised of 100 companies that repurchase the most stocks rose about 350%. the s&p 500 alone rose about 200%. not hard to figure out why that is going on. this is what may change -- i'm looking at a note from hs ec that says this cannot go on forever. at some point, congress will end this party and make it more difficult to do this. tom: it's not new, it's a look

act to what used to be? brendan: yes. tom: i think it's a huge debate. mario gabelli likes the share buybacks. for the government to restrict this would be a whole new regime. brendan: that's an interesting take. you think the markets would determine whether buybacks would continue. >> we look at how much is the credit quality of these companies getting degraded by these share buybacks. tom: the emphasis is not. >> we in -- within the s&p 500 over the last three years, they have in pretty flat. within the nasdaq, you have seen some but there was a lot to gain back. vonnie: what happened when interest rates go up? >> it's the cost of equity and the cost of risk rates and where your bond is trading. that drives us.

i don't understand the political calculus but i think it's the market. tom: this seems to be uninformed minority opinion. never say never. do we have photos today? vonnie: yes, we went through a whole bunch of them and we picked three. number three is traders standing on an empty trading or at the new york stock exchange after trading was halted due to a technical glitch. brendan: this is a party venue you can rent out downtown manhattan. tom: i have heard speeches they're in their boardroom in another time and place and it's great and i love it. i talked to the former head of

this force -- it is an iconic place. vonnie: 223 years old. brendan: under a buttonwood tree. tom: do they have one in london? vonnie: a stock exchange? tom: do they have this in tokyo? no, it's all electronic. vonnie: we will move on to our second top photo -- this gives shoppers hot deals on items tied to the weather. the hotter the temperature, the hotter the deals. at 85 degrees, shoppers get 85% off. amazon also has a treasure truck moving the streets of seattle filled with limited quantity roddick's on sale for that day only. tom: so the box of light all die got from amazon which don't fit, can i take them back to the truck? vonnie: maybe just handed to them. brendan: i like the discount

tied to the temperature. the only indicator that changes in my life is my dog sits closer to the air-conditioning unit. tom: this has been life-changing for everyone out there. does retail continue to struggle? >> online shopping is still not that they compared to big box shopping. you walk into these stores and they are glorified vending machines. vonnie: they say they will concentrate on -- the number one top photo is espn -- it does not feature tom keene. it features the best bodies in the world. it's intended to rival the sports illustrated swimsuit issue.

the washington nationals out the other price harper made the cover. tom: this does really well? you have the sport illustrated silliness and this is more -- vonnie: it's pretty amazing. brendan: it's a classy swimsuit issue. vonnie: yeah, that's all we will say about that one. somebody knew the sports illustrated issue comes out in february. brendan: this says you need to get in shape. this will not happen for me and tom. vonnie: you could be a nine or 10. tom: there it is, the espn issue. let's move on. coming up, we will talk volatility.

we will talk on some of the nuances of volatility. a good response to our twitter question so far as to the uproar yesterday. does the new york change -- does the new york stock exchange matter? stay with us worldwide, coast to coast, this is "bloomberg surveillance ♪

tom: good morning everyone. vonnie: commuting is chaotic in london. workers on the city's underground or in a 24-hour strike and that's forcing riders to check bus schedules or walk. general motors is recalling 200 housing cars because there is a danger of fire. a part of the hummer heating system could cause a fire. at least two of them were destroyed and there were three minor injuries. in pro football, there is a report that the new york giants player lost a finger because of

a fireworks accident. he had his right index finger amputated yesterday. he is not under contract with the giants because he has not signed a one-year offer yet. if it's true -- brendan: he was in negotiations for a $60 million contract which is no longer on the table. tom: at 12 years old, i held an m-80 that went off in my finger tingled and it went away. i am the card-carrying example. brendan: is that why you are not an nfl receiver? tom: yes but i am the poster child for irresponsible fireworks. we go further into the pepsi revenue and earnings season. it's time to note that the volatility out there'd --

michael purvis is an optimist and global strategist. is there something new about the study of volatility ors adjust markets are great so volatility is low? >> you have to step back and look at the context of the central bank would also the global markets and the collective table they have set for volatility in equity markets or other risk assets. that has been contained. tom: do you have a theoretical confidence that they can and wind -- unwind the great qe? >> i was highly skeptical and have gotten less skeptical. over the last few months, you have seen -- i have seen suggestions by the fed that they are more willing to take the upside risk of an inflation breakout. i think they think they can

manage the inflation breakout very quickly and effectively. tom: this is timely with olivia blanche arden who has led the charge to have more inflation. brendan: he has changed the way the imf does their modeling. one chart i would like to see his frequency the word it like -- liquidity is used. >> i think that's an ongoing problem. if the fed went into aggressive motocross the world, it would be interesting to see how the liquidity profile improved. during the taper, the fed was a dominant elephant in the room 65% of 10 year gross issuance during that time. liquidity problem was not resolved.

blaming central banking as the primary reason for liquidity is only one facet. there are other issues. that will be an enduring problem. vonnie: are you looking at other pockets of the world for value? >> sure china certainly has not been one of them. within certain markets, you can look at things and think we will keep a close eye on brazil and see whether that macro picture comes through. it's very stock specific. tom: thank you so much for being with us. he is the outlier bull on the street. on the forex report,, the euro is the story which is that are then two days ago. dollar-yen is surprising.

it's a stronger yen over the last few days. coming up we talked to someone minting money in the equity markets, stay with us. ♪

tom: greece will turn into a

pumpkin at midnight unless they accomplish deadly profiling. the markets don't buy it. veidman of germany says they should not come to the rescue. market stabilize and it's believed the new york stock exchange will open for business this morning. netflix and hbo the media meet and greet in sun valley. good morning, everyone, this is "bloomberg surveillance." we go to the front and the back of the store. vonnie: walgreen has named a new ceo. that is one of the headlines and noticing this morning. they a reporting better earnings in the third quarter. they say third-quarter sales are

up 48.4%. this includes the alliance booth but they are upping their forecast for the next quarter. one dollar to is the adjusted earnings per share for the third quarter and they are boosting its dividend. brendan: walgreens is going through the same transition as cvs. as the market for held care grows in the u.s., they repositioning themselves as a health care company, not a drugstore. tom: we see that in new york city. walgreen bought duane reade. vonnie: the ceo was once a shareholder. tom: we will have more and walgreen had a dividend boost that keeps markets moving ever higher. futures are up 21. we need the top headlines. vonnie: with a 6.7% boots in the

dividend. a software up date shut down the new york stock exchange. it closed trading for more than three hours and the nyse must report to regulators. the president of the exchange said he stopped trading because he did not trust the system. >> we chose the least disruptive option for customers which was rude out the problem, put a plan in place to fix it, fix it reopen, and there was no work for customers to do to connect to the exchange. vonnie: despite the problem trading continued on the nasdaq and other exchanges. greece must come up with an economic reform plan today to stay in the euro area. leaders are giving the prime minister of greece until midnight. they want more spending cuts before agreeing to a new bailout. imf says greece will get help

but not for freight. >> we are fully engaged to help find a solution that will be most conducive to what i said is our mission which is to try to help with restoring stability, growth, and sustainability. vonnie: there will be a summit about the crisis on sunday so leaders ken's that he the greek proposal and thanks will stay closed until monday. china bounced back after losing 1/3 of their value on their stock exchange in a month. they had the best one-day gain yesterday. chinese regulators have tried several steps to restore confidence in the markets. apple reportedly wants to make its new iphone in record numbers. apple is planning a larger initial production run of 85-90,000,000 handsets which is 10 million more than when the 6 came out. the new ones go on sale later this year. for the second time in three days, the world just bicycle

race looks like bumper cars. there was another crash at the tour de france but they went on. the race is 16 days and 50 miles from the finish line -- an 1800 miles to go. brendan: what is amazing is how much -- they are fiercely competitive but there is honor in that pack and people help each other. . everyoneknows that if you fall once, it can end your career. when they talk about what it's like to be in that pack of riders, those are amazing stories. tom: for those in radio, they are 3or 4 inches apart. brendan: if you're going down a mountain at 60 miles per hour someone will reach out and steady you if you wobble. tom: i had a schwinn with a big basket on the side. brendan: did you put in a

baseball card to make it rattle? tom: let me do a data check to keep is going. equities are nicely up 20 and the euro is a bit stronger. the greek spread still widens this morning with a modest flight to quality in germany as well. that's a nice way to get to our european coverage. there is a fragile euro with the spread indicating greater fear. hans nichols is in brussel. s. in the bond market, i don't see that much change. what is new this morning? >> nothing new at all if you look at spreads. in germany, around 150 basis points on the tenure which is double since march or april but they were predict illicitly tight anyway. they were trading 550 paces points previously.

the consensus is that it will be contained. tom: i know you will take the month of august off. what is the positioning right now on the street? is there a mass of the short euro bet? >> not like it was a couple of months ago. in the volatility space is where there has been big action. tom: thank you so much. the veidman speech this morning was news. brendan: he cut and pastes the same thing on the end of every speech which is no more emergency liquidity for grace. i will say something that has not been set on television -- i saw an amazing barnburner of a

speech yesterday in the european parliament. help me understand why this resonated with the people of greece? >> you are not the only one. everyone listening to the speech , there were all but cheers even from journalist. he made the case for a strong european union and lambaste mr. cypris. it's an interesting speech. who knew the eu parliament could be so much fun? it was thrilling and exciting and if you believe in the european project, it was a good thing. brendan: he took the prime minister of greece to task. he is the former elgin prime minister but he talked about them hailing to live up to proposals. i had not heard his deep frustration before.

he said the promised or failed to do any structural reforms. >> he has passed a few laws in athens like reopening the public broadcaster. for five months, we had stasis. what has the effect of the last five months been on the greek economy and will they have to reconfigure all the formulas when they try to hit these primary budget targets? tom: i don't hear much going on but keep us abreast today in europe. >> there is something going on in brussels. john claude junger is meeting with opposition parties in greece which is creating intrigue. are they preparing for snap elections and will there be another election in athens? tom: what's critical is mr. samaris stepped down? >> yeah, there is new leadership

here. tom: let's leave it there and thank you so much. it is our first quiet day in greece in ages. greece is still fun -- front and center but earnings season is upon us. christopher grisanti is with us. i want to talk about your great track record. you have done well recently. how do you fold greece and the interest rate structures we have seen into owning equities? >> i think equities here are incredibly attractive. this is the first volatility we have had since evil a scare last october. we thrive -- since the a bola -- a bola -- ebola scare last october. we are looking for opportunities

and we think we are finding a few here and there. . tom: do you need the new york stock exchange? >> i don't think so. even the head of the exchange said we let our guys down. did anyone miss it yesterday? the trading volume was about the same. tom: that is a big debate. christopher grisanti has done phenomenal in the markets in the last 12 months and we will talk about what to do and one not to do. look at our twitter question -- we have had heated responses in defense of the nyse. does it matter? it is "bloomberg surveillance." ♪

tom: we need to get a morning must read -- brendan: this is what happens in interesting times -- economists say they don't get controlled experiments.

the implication isthese numbers she offers and looks back at argentina, the capital flight was 2.9% of gdp. it was converted during the year at 6.0 and the next year, 12.0. you cannot say we will lose the peg, problem solved. tom: where economists differ is waiting on private debt. this is not a vacuum of greece and the garbage owned by the other governments. it's a greater story that professor reinhardt and someone like dr. ruskin talk about. vonnie: she is looking at latin american countries right now. how did the breakup of czechoslovakia go? tom: they are not an island like

cyprus. there is something different going on here. brendan: when you look back at the history of capital control is that they are easy to put in place but they are difficult to get rid of. all my terry policy is based on trust so in that goes away, it's really hard to get the capital controls out and hope the currency remains stable. >> they did not have to change its currency. tom: the amount of euros floating under mattresses -- the big distinction is all those euros floating around greece in their accounts across the border. >> not only that what you will switch to a currency that has been deep aimed. -- the famed -- defamed? who wants a drachman.

brendan: people are buying appliances because they think it will hold its value. tom: there we are again on greece. u.s. futures are up 22 right now. our twitter question of the day -- what a response -- does the new york stock exchange matter? stay with us, "bloomberg surveillance." ♪

tom: good morning, everyone people like the silence out of brussels this morning. let's get to our top headlines -- vonnie: the confederate battle flag will soon be removed from the capitol grounds in south carolina. the state house decided it should be taken down. they debated 13 hours with strong emotions on both side. >> i cannot believe that we do

not have the heart in this body to do something meaningful such as take a symbol of hate off these grounds on friday. vonnie: the governor backs the move which calls for the removal of the flag 24 hours after the bill is signed. nine black worshipers were killed in a charleston church sparking the debate. the pepsi second quarter is better than for asked and they are raising their outlook. they estimated eight cents that are than estimates. they are projecting a growth of 8% this year. has the time for the apple smart watch come and gone? sales are down 90% since they were introduced in april and most of those sold were lower profit styles. . apple has not released any

numbers tom: i walked into the new apple store on madison avenue. nobody was standing around the apple watches. vonnie: was it as busy as the other stores? tom: it was noisy and packed. brendan: the question has been you wait until the second iteration. is the watch of flawed idea nor do they need to get it right? tom: i totally agree. i completely missed the ipod. much more of this is apple migrates to there were earnings report. in this hour, we will look at the employee in america. this is a big deal with claim doing better than good. the new york stock exchange what will they do? michael reagan pulled an all nighter and we will look at media consolidation. olivia sterns survived the

pioneer grill in sun valley last night. she had an 18 ounce steak or something. we will talk to her and i don't think she went to bed. i think she was pounding along the beers. brendan: there is a lot going on. tom: she will join us in a bit. he is up 11% and everyone is up 3% and christopher grisanti is the smartest man on the planet right now. it's not what he owns, it's what he does not own. let's start with that. >>you hated oil and you nailed it but is oil of value now with the way the stocks have gone down? >> what's happened is we have hated oil for about 10 years. i talked about it on this show a lot and we like refiners that made money from the cheap price of oil but finally, with the count of rigs down, we are

picking names. tom: give me a name. >> we are sticking with the same names. tom: blue-chip oil. >> if we are wrong and we are wrong sometimes like everyone, you could lose a lot of money or everything with companies on the edge like chesapeake or oasis or waiting. tom: you like industrials not brings us to what my father said -- if i owned one, i could not come home which is harley davidson. >> that's right. tom: what's new there? >> the headline is that it's a sexy bike. tom: you can get girls. >> except you now have to be 70 years old. tom: you cannot get girls. vonnie: i'm going to take a

field trip to texas out -- to check this out. . >> their competitors, harley davidson has a 20% -- their competitors are reducing their prices by 20%. harley davidson is not. they got their share back with it 18 months last time and it was a terrific play. we are betting on management and history repeating itself which is a good way to make money in our business. tom: it's a currency play. >> basically, and you have to believe this iconic brand will remain strong. vonnie: demographics, america's getting older. >> and richard. -- and richer. brendan: share buybacks have been the story. they say this could change.

is the market going to fix this on its own? >> i think it's a math issue. you've got a ton of cash on the balance sheet and limited opportunities for growth in a deflationary environment. give the cash back to shareholders. tom: when you read annual reports, do you see a new management regime? you look at barclays this week i would suggest the ceo would not have been pushed out. >> i think there is limited patience and you cannot overestimate this low inflationary environment. those were number on -- those are wonderful numbers from pepsi. they have had real revenue growth a mess the first one i've seen a long time in the retail area. brendan: coming up, the nyse hopes for a normal day, one day

on from yesterday's three-hour outage and we will find out what caused the glitch. it's also time for our twitter question of the day -- does the new york stock exchange matter? let us know. >> ♪

tom: good morning everyone. here are the headlines. vonnie: normal trading is expected to resume at the new york stock exchange after a glitch yesterday caused a 3.5 hour shutdown.

the nyse must tell regulators what happened. the president of the exchange tells what that's how he reacted. >> do no harm for nyse listed stock so my first concern was do no harm during the day the stocks continue to trade elsewhere, get the problem fixed him and get it back up and running for the close. vonnie: the sbi says there was no evidence of a cyber attack. the prime minister of greece is facing a decisive day. he has until midnight to come up with economic reforms that creditors are demanding in exchange for rescue money. the head of the international monetary fund says greece must do two things -- >> one leg is about significant reforms and fiscal consolidation as we have advised in the case

of ireland, portugal, cyprus and outside the eurozone, latvia and iceland and it has worked. the other leg is that restructuring. vonnie: greece is already promising to do tax reforms and pension reforms next week. president obama says there is less than a 50/50 chance that a deal will be reached with iran on their nuclear reforms. the deadline is tomorrow and the iranian president says the country is preparing for a post sanctions era and the u.s. and other powers say they will ease sanctions if iran agrees not to build atomic weapons. a new yahoo! feature is bringing betting into the mainstream. it offers that in on fantasy sports and yahoo! is hosting daily in one week games for money. betting is illegal outside las vegas but fantasy sports get a pass because prolix call the wagering a game of skill.

it could be a major new revenue source for rep -- four yahoo!. 57 million people in north korea by fantasy sports -- in north america play fantasy sports. steve ballmer managed to re-sign a player for his los angeles clippers. tom: he gave him options in no kia. there it is. the bloomberg professional service claims compared to employment -- this is the horror of the 1970's -- goods produced in america falling. this is the cyclical move in this is a miracle how low jobless claims have become. brendan: this is one of the things we are trying to figure out as real as -- as well as the fed. what is the rate of

unemployment? how low does it have to go? tom: it's a major mystery as to where potential gdp is versus the optimists. chris chris on to use with us -- christopher grisanti is with us. are you investing with an optimism about animal spirits rather than real gdp? >> i think we are. we have terrific underlying fundamentals and headed in the right direction with unemployment. you got lower unemployment and rates that are low and perhaps they will go up some. tom: what is the best and janet yellin for you? >> i don't care. it would be nice to get the volatility over sooner so we can have a post first hike market which we have not had in seven years. vonnie: what is the next level

of volatility? >> i don't think -- i think greases the sideshow but china is the main event. the economies are so much larger plus the chinese have been uncharacteristically ham-handed in handling the stock crisis. they have old world ways of trying to limit the downturn. tom: wendy you step in? >> i have been very tempted but we have never bought those stocks when we were not in a recession. it scares me to buy them now because even though they are down, they could fall by half or more. look at alcoa. tom: that's a u.s. benchmark. let's do a data check right now. futures are up 21. risk on is clearly the tone.

the euro is very important. that is a better euro than what we have seen over the last two days. we are still looking at the greek spreads marginally wider this morning as compared to germany. brendan: this is "bloomberg surveillance." yesterday the new york stock exchange had a terrible no good bad day as the exchange was closed for three hours. michael reagan is with us now. what happened? >> obviously, the new york stock exchange is in the process of upgrading its technology. that was one of the priorities when they took over the company. we still have not gotten the full autopsy of what happened. it is clear there is a connection issue with one of the computers. the best option was to just stop trading for 3.5 hours.

brendan: what is the bigger story? are they trying to keep up with high-speed trading? >> absolutely, all the exchanges have moved and after action and they are trying to catch up with their big competitors. tom: i urge everyone to read that great essay by matt levine. when a major financial utility or hairline -- or airline shutdown -- i thought of you guys in the fallout shelter. does any of this matter? >> in this specific case, as tom farley said, his aim was to do no harm and it looks like there, was that.

i look to the heyday of the computer glitches in 2012 when the nasdaq could not yet trading going. knight capital blew up. those were cases where there were cleaved victims -- there were clear victims. .it's not clear that anyone lost money i compare it to going to the mall and into the food court and there are 12 restaurants on the all serve the same thing and one of them happens to be closed. tom: where is the new york stock exchange in five years? where is this museum in five years? >> it is hobson's choice. if no one lost money, it means they don't matter. tom: what did you learn yesterday about this museum? >> the floor is a museum but they are still one of the major players. the market shares are fragmented at 13%.

. spread among 11 exchanges, that is still a leadership role they are still important what we think of as the big board. the guys on the floor are less important. vonnie: it's not exactly a commodity. did this materially impact the exchange in terms of earnings? >> that's a good question. it's a tiny bit, the four hours of trading. did they incur a lot of cost? and their reputation. >> forget about the half-day profit, think about the headline being the new york stock exchange is down for half a day and it did not matter. tom: you could have been down there but look at the photos. you had those photos of the nyse and it was empty. brendan: we were looking for the photos of traders with her head in their hands.

and we did not get them. we got the traders not there. vonnie: it's progress. >> the customer loyalty is taken out of the equation. .you trade with the best execution will be . an order from a broker get sent to an exchange but they have to send it to whatever exchange has the best offer on the books. that's the nature of trading these days. it was just a matter of taking the nyse out of that equation. vonnie: are the exchanges outside of new york city taking more shares? >> it is fragmented and bats has been the big upstart. they are the biggest growing force. tom: how much do they do compared to be 13% of the nyse? >> they are all jockeying for leadership. tom: did you go to the bloomberg

official equity fallout shelter yesterday? michael reagan, thank you so much. the new york stock exchange will open this morning. here is our twitter question --

tom: what a response to our

twitter question -- we need you are informed responses. does the new york stock exchange matter? a huge question after what we saw yesterday. brendan: it's thursday with a new edition of business week -- "bloomberg businessweek." that is the cover about the selling of the new harper lee novel. if you look at the features section, you get a look at subway and how miserably it has been doing. you will figure out why subway has felt to keep up. scarlett: we will do a two-hour taste test. tom: we now go into a full surveillance investigative report. do let your -- do you let your kids eat at subway? stephanie: it's not that i would not let them but they would not like it. my children dream of going to

mcdonald's. unfortunately, they don't get to go often. subway is a victim of its own success. it was considered the healthier option. we saw them pop up all over the place but now, if given the option, chip oatley and shake shack and others. brendan: they don't have the secular problem where people are moving away from what they make. they over franchised and have competing stores across the street. stephanie: and they did not focus on the actual product to keep people wanting to go into their stores. they are in a conundrum. we will speak to an analyst who covers the food industry to find out about this. in a gluten free society we are living in, subway sandwiches -- brendan: you look at this sect or so what trend do you see? >> i see mcdonald's which has constantly reinvent the self.

you can have a salad or breakfast but subway is still stuck in the 1980's. .they stephanie: same sweaty ham. vonnie: it worked for starbucks for a while having to stores across the street from each other. stephanie: you can do 16 starbucks in a day but will you really do two hoagies? brendan: you call it a hoagie? where are you from? tom: can mcdonald's turnaround? it has gone nowhere in two years. >> it comes down to valuation. it is still trading too high. tom: she does not want to send her offspring to mcdonald's. stephanie: since shake shack has gotten so big and it's

everywhere, the price point is an issue but if you live in an urban center and you have it choice, shake back -- shake shack versus mcdonald's, that's where you will go. it's delicious. >> but it costs $20 per meal. brendan: coming up, "market makers" this is "bloomberg surveillance." ♪

tom: good morning, everyone," bloomberg surveillance." media stocks are leading the way. right now our top headlines -- vonnie: the baltimore mayor says a surge in crime forced her to fire the city's top cop. he had been police commissioner for three years. amana police custody died in that sparked days of rioting. t mobile may gain on its competitors as the company reported today its u.s. customer base grew in the second quarter by 2.1 million. it is trying to overtake sprint is the nation's third-largest wireless carrier. it will post their full quarterly results july 30. a problem -- a pro football star

reportedly lost a finger because of a firework accident. the network says the defensive line man can play next season but he has not re-signed with the new york giants yet. how important is your right index finger for this kind of thing? tom: i don't know the answer. i just don't know. vonnie: can he play with a prostatic? tom: it's not like a quarterback or a wide receiver. i honestly don't know. it's sad. so much about safety and fireworks across america. let's go to sun valley idaho. the elites are there but olivia sterns is there. she will be dining peruvian at tonight. thank you for getting up early.

what are you learning? olivia: it's pretty beautiful here. i don't eat meat but my producers said he had an eight ounce prime cut. it looked like a giant hunk of plato --plydoh. all the big shots are here like elon musk and tim and sheryl sandberg and warren buffett. i saw tim cook running yesterday. everybody here is talking about big media and telecom and consolidation deals but they are keeping an i on the financial markets. bill miller is here from legg mason. he told me he is keeping one eye on what's happening in greece. >> from the german standpoint greece is not an issue.

from germany plus standpoint, if greece is able to extract concessions from a radical government, that means they will be an incentive in spain and italy to elect a radical government and that's what germany wants to avoid. the odds would be tilted in favor of a managed greek exit with humanitarian aid. olivia: the fed minutes cannot yesterday and shows the fed is keeping and i and everything happening abroad. i asked him if the thought if greece leaves the eurozone, will that delay a september rate hike and he said no. tom: greatly appreciate it. she will also speak with sir martin sorrell and tim armstrong. look for that later this morning. let me get your attention --

disney is up over 30% the past year and then there is net. lex there are winners and losers in sun valley. paul sweeney was not invited, the director of north american research with bloomberg intelligence. if you are on this junket, what would be your first question to the assembled? >> we have seen the trim and this amount of consolidation on distribution of media and comcast trying to get time warner cable -- what about the content players? tom: we saw that and then it fell apart. >> i have no idea how it came apart. a lot of these content layers need to think about getting bigger and stronger relative to the distribution part of it. how do they play in the digital world? that is the number one issue. tom: this goes back to goodwill and bad will, if every headline

says this deal is created immediately -- in your world can they say that if they are playing with hugely valued stocks and they need a ton of cash. >> if you look back to the early 2000, that was not the case. companies destroyed value and one reason media have been strong out of the financial crisis is there have not been many deals. they have buyback -- they have bought back stocks and the pressure is on in the companies and investors are concerned about bad deals. tom: christopher grisanti wants value but cannot own anything in your universe. >> it depends how you define value. the media has had a great run over the past few years but the values are not the highest. the cheapest things are the

businesses that are at risk in the digital world like the print media. newspaper stocks dramatically are underperforming. >> what you think about viacom. would you go there or pay up or disney or warner? >> investors are concerned about viacom because their cable networks are not performing well. the cable network is this is a great business that they have serious rating problems. tom: what does sumner redstone do with his legacy? >> it's hard to get used to not being able to pull the lever and have the cash come out. .they did that for the 90's until five or 10 years ago >> the cable network businesses such a good as ms. for the media moguls because advertising has been good and affiliate fees go up 10% every year. viacom is having issues because some of their copies are not as strong as they would like. tom: olivia sterns went out to

sun valley for the idaho trout. does anything get done of these confabs? >> deals get done here but they don't get announced. vonnie: what is the one begging to get done this week? >> i don't know, maybe we will see the smaller cable companies maybe see some of those start talking to each other. how do they stack up in the new consolidated media world? tom: thank you so much. did we get a response to our twitter question? vonnie: just a little one. tom: global wall street chimed in. vonnie: does the new york stock exchange matter? >> would you agree with dark

pools? >> they are like short-sellers. they are the excuse for everything. nobody really knows because they are dark. there are so many routes to a trade. it's a real tough case to make. vonnie: this is the second answer -- our third answer -- tom: they have to have a huge response to this. let's get to our agenda. i've got to come off radio in two hours and get smart on the legacy of olivia blanchard at the imf. i can tell you that he hit the ball out of the park. our research is the imf is best at all central bank forecasts

and we will have a conversation at 10:30 a.m. vonnie: now you have to go to radio. brendan: my agenda is greece but i would not let us be -- i would not relax. i think we are in the eye of the hurricane. i think we will see some news tomorrow and through the weekend and i think we will see some serious consequences on the basic national economy of greece. vonnie: hanh's neck goals is reminding us that junger is meeting with the opposition party. >> i think we are in the middle of this. vonnie: i will be watching for initial jobless claims at 8:30 a.m. we had fed minutes yesterday and there was a more dovish sentiment. brendan: we will look at earnings coming up and thank you

christopher grisanti. "bloomberg surveillance" continues on radio. " market makers" will take a look at subway next. ♪

>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. erik: china rebalance today.

another greek deadline. is it a real one? computer malfunction, you probably know about that right now. all of that as we play -- pay close attention. stephanie: economists carmen reinhart on greece and china from sun valley. and steve rattner. martin sorrell and tim armstrong. what is happened is almost listed -- almost the theme of a wall street movie. erik: take a moment and go on bloomberg.com and read this piece by carmen reinhart. stephanie: it is really illustrative. erik: i am doing my best, folks. stephanie: