u.s. equities climbing after one of the worst days of the year yesterday. investors have a close eye on athens and shanghai. its citationsting for growth. we will hear from the chief economist, olivier blanchard. sales have doubled in america. we will ask the ceo what is next,. . scarlet: did morning. matt: a big drop yesterday and a lot of news.

a little bit of balance on fewer headlines. , 2069. up 1% the dow jones, 17 719. getting most of what we lost back. scarlet: nine out of 10 industry energy, one ofby the biggest losers. take a look at what is happening in europe. we know there is a new deadline for greece. it is friday and then monday. investors are getting their feet back into the water and buying equities. up 2.37%. we will keep an eye on all of the developments for u.s. the day continues, but right now the euro is also losing a little bit of ground. matt: actually, holding pretty

strong. scarlet: resilient. parity, for sure, the question is where it goes. scarlet: and where it -- and when it gets there. we begin with the ecb president mario draghi suggesting the greek crisis is getting increasingly too hard to fix. i told reporters in rome, don't know, this time it is really difficult. refused to expand its emergency lending to greek banks to guess there is no evidence of a viable bailout plan. imf chief economist says that the crisis in greece is educational. it shows that any contagion is likely to be contained. test has reassured us and made us think that if things go badly in greece, which we do not want to happen, but if

they did, the rest of the world would probably survive. scarlet: in less than half an hour, we will speak with olivier blanchard at 10:30 a.m. on bloomberg television. imf has downgraded, speaking of its forecast for -- globalowth economic growth. much of the downgrade is driven by the u.s. china were and highlighted as potential trouble spots. in china today, speaking of troubled spots, stocks bounced back after losing more than a third of their value in less than a month. had its composite index biggest gain since 2009. chinese regulators unveiled a number of measures aimed at restoring confidence in the market and they made it very

difficult for investors to sell stock by telling them, hey, you are not allowed to sell stock for six months. you will be confident. we order you to be confident, or else. scarlet: the market hitting a americans as more filed for unemployment benefits. the data can be volatile this time of year because of the fourth of july holiday and seasonal auto plant shutdowns. a big transaction in the beauty business. procter & gamble accepting an billion.2.5 t-mobile u.s. has gains to put one million customers last quarter. it now has 58.9 million users, are anew phone users number closely watched. t-mobile shares have gained nearly 50% this year and we will ceo at with the t-mobile

12:00 p.m. eastern time. scarlet: we have plenty to tell you about in the next hour of bloomberg market day. shares of pepsi on the rise. cost cuts and rising snack sales. is here and herd cut his forecast. we will try to get him to reconcile everything. and she is one of the most american important -- most important american authors, harper lee. her second book comes out monday. we take a look at how it came to be. matt: first, time to crunch the numbers. alexis tsipras has until midnight to submit any plan for another bailout. if creditors accept this, the

greg's it could come as soon as this weekend. scarlet: but markets do not seem to disturbed. calmly is one of the bulls out lee is one of the bulls out there. what is your read ? we are going to be in a. of volatility. if it is just worry, we are going to gain all the losses back pretty quickly. scarlet: are we priced in right now gekko tom: by some measures, yes. china seems to be a point that you could worry about a lot. they are telling investors not to sell anything for six months,

which leads me to think that they will turn around and sell everything they possibly can. tom: you cannot tell people not to act, because it actually creates more panic. i think the risk of this becoming a global crisis is a lot more limited than investors appreciate, because you could see a financial market like cds react. the way that you measure fear is simple. look at the term structure of the six and then invert it. the other is retail sentiment. scarlet: the latest sentiment survey from investors, the lowest since that tober of 2014. the bears -- those expecting a correction,

39. 6%. tom: there is a lot of uncertainty. the markets have been trend lists -- trendless. i think it is a misinterpretation. what you see in the second half is a quality rally. we will put money where there is visibility and where there has been good fundamental performance and that is the u.s.. there is little change today, half a percent. does your forecast for a 12% gain by year and include a fed rate hike? or do you think that it remains as dovish as everyone expects? we don't forecast the fed, but i would have a hard time imagining the fed been confident , weeks from now, basically tying to raise rates. i'm in the camp where it is probably next year.

matt: the reason i ask, it would strengthen the dollar too much and it would not be fantastic for exporters. but you think about the risk of it getting stronger gekko tom: there is an earning story but also a valuation story. lost allexporters have of their premium. i think dollar strength that is all -- is already baked in. , if i hade main thing to hang my head on something and said what happened in the first six months that matters, housing strengthened. those are really bullish second-half drivers. it mean there is more upside for small caps which are more focused on the u.s. economy and less susceptible to ? biggerh from overseas is not always better when it comes to revenue growth, the small caps post better growth then large-cap.

tom: investors should like growth in small cap. that is where you see companies with high market shares, you can generate better returns. kind ofere is the tit-for-tat of the strong dollar, we see the same thing with the prices in asia because it provides us with cheap materials, although we see , bounce back in crude today oil prices are relatively low. is this a big wind at our tale? tom: to an extent. but in that of the day, the u.s. is a net importer of commodities and oil. the first half of that the year, we saw a negative effects from energy earnings getting clobbered. the second half would get the margin story. energy6, there is

growth. energy will post a nearly 40% drop in sales. that is different from three months ago when people were still looking for growth in an industrial sector. tom: it is the python using the watermelon. we're going to the hump. a 12% gain from the end of the year. tom: starting january 1. pepsit: coming up, posted better than expected profits. how much of that is cost-cutting? ♪

scarlet: good morning and welcome back. matt: let's go straight to julie hyman for a look at the markets. 45 minutes into the trading day. scarlet: we're looking at energy in particular. want to focus on oil services in particular. up oil service index is nearly 2%. we also had a positive goal for morgan stanley ahead of earnings for these companies which will come in coming weeks. oil services have a very attractive risk to reward for the next six months. therecovery will be led by onshore oil services companies. in particular, he likes schlumberger.

it is up 9/10 of 1%. patterson ands helmer can and pain. look at my bloomberg terminal. this is a chart that bloomberg intelligence were looking at. it has to do with the number of rigs. on the top, you see the oil rig ural gas.the nat maybe we have seen a bottom in the rig count. that is the orange line. 80 we will see it rise, which will be good news for the oil services company because if their clients are drilling, they will need their services. i also wanted to take a look at where we have seen the oil services index this year. the timing has been a little bit off on this call. as is the index for the full year appeared april 14, there

was a call for bottom and oil services. we are down 9%. may 4, they said that we were set for a multiyear rally. declined since then. it is challenging to time these kind of thing started the optimism for morgan stanley has been there for a couple of months. scarlet: thank you. we do have green across the screen right now. of our topome stories, we begin with president obama telling senate democrats there is less than a 50-50 chance that there will be a deal on iran's nuclear program. the's president says country is caring for a post-sanctions era. this morning, the south carolina house joined the senate in agreeing to remove the

confederate flag from the capitol grounds. the vote came after 13 hours of debate. it picked up momentum when i'm black church numbers were killed in trenton. the flag will come down 24 hours signsgovernor nikki haley the bill. workers in london are on a 24 hour strike. 4 million people use the london subway on weekdays. pepsi reported second-quarter profits that boosted its forecast for the year. sales of snacks in north america specifically turned it upward in the second quarter. shay.s can share a -- ken it is interesting, pepsi is doing better than analysts had anticipated in an area that i would imagine is a declining

revenue area because people are so health-conscious. ken: it is somewhat of a relief rally. analysts were looking at a drop on lower sales. even though they were on a -- price across the board increases. beverages and frito-lay. it reinforces the powers of the brands in tough times. they can bail them out. scarlet: for now, but how much pricing power does the company have? it cannot do that every quarter. ken: you are right. throughico has been tough times before. take a look at its track record. they have pricing power, they are benefiting from the mini cans in the u.s., based on their

pledge to fight obesity and so on. it is exley benefiting that because higher unit prices is contributing to the margins as well. matt: what are the brands doing best? i have been hearing a lot .bout the new doritos apparently they only make them for canadians. scarlet loves potato chips. -- the doritos, they stick one intensely tip in the bag and you do not know which one. which brand is doing best? ken: mountain dew is a great franchise, they are innovating more. frito-lay is doing well. the roulette product that you are speaking of is another on trend how un--

they are. it is like entertainment and food wrapped together. matt: are they targeting unhealthy and sugary food to kids? scarlet: it has worked in the past. i want to show that the visio division between snacks and soda. stocks have done better. has all the talks about splitting the company into a snacks business and spinning it off from the beverage business died down? it looks like they made their peace. : the company for the credit is doing a good job. it is committed to $1 billion over the next five years, they are on pace. pelz has been satisfied

by having one of his confidants on the board, will. it is like an ace in the sleeve. they can always split up. the company makes a compelling case. interesting stuff, thank you for joining us. companyabout the pepsi beating analyst estimates. scarlet: what is your favorite? starvingitos, if i was and there was nothing else. i want a bag of these roulette doritos. you can only buy them on ebay in the u.s.. scarlet: two of the most important people in silicon valley and then exclusive interview, coming up. ♪

scarlet: great launch partners is the venture capital firm behind some of the tech industry's biggest names. facebook,lk but airbnb. it started as a boston-based firm but now it has hit out of

valley --locum silicon valley. guest: i think we are being asked to take on a lot of risk. there is a lot of money and optimism causing pricing to be higher, causing expectations to be higher. i think they are asking to take higher risks. i believe mobile is a fundamental shift, only in the 30 inning right now still -- third inning right now, still. businesses aren't able to buy mobile in ways that were not possible before. scarlet: you can watch the entire interview tonight. sadly, this is it for you.

scarlet: i'm going to join you for ducati. matt: it is the best day for tom and i. guys is only once you can do high-fives because you are tall enough. matt: the greek deadline is now set for tonight, midnight. ducati is something i will personally be following. we look forward to that. stay with us for those important interviews. ♪

matt: welcome back to bloomberg market day. let's get straight to the mornings headlines.

americans were less confident group in the economy last week. the comfort index fell after hitting a nine week high, afflicting subdued views of the economy and climate. americansamong earning six figures fell the most since last may. there are concerns the company is artificially raising card payment fees. last year, visa europe settled with the eu to reduce charges by 40-60%. is recallings hummer's. more than three dozen fires have been reported. at least two were destroyed and there were three minor injuries. honda is recalling 4.5 million more cars so he can replace

their airbags. any of the vehicles, the fit, compact, and crv crossovers are in japan and there are no new recalls in the u.s. or canada. those are your top stories this hour. there is a lot going on. let's take a look at the markets. the top story of the day is the rebound we are watching across the globe. here in the u.s., it comes back a little bit, we are still seeing gains on the s&p 500. session lows right now because we were up more than 200 points and are now up a hundred 47 661 -- up 14700 points at 17661. let's look at treasuries, a little bit of selling as the mood lightens.

10 year yields coming up to 2.26%. .-year note, 0.57% greece and china's problems maybe a problem for the entire world. the imf cutting it global forecasts for 2015 from three point 5% to 3.3%. it blames financial market turbulence in europe and china. much of the downgrade was driven by the u.s.. the imf cut its forecast year to two and half percent -- 2.5%. it described the headwinds as temporary. that, tom keene is standing by with imf chief economist, olivier blanchard. tookwhen olivier blanchard the job, he left the quiet confines of m.i.t. he will lead a respected

institution that provides leadership. we saw it any number of ways in recent weeks. there has been a suggested that imf forecasting has been superior than any and all central banks. releases hishard final economic report this morning. us.lled to have you with i want to go to the bloomberg survey, which shows us the imf is leading the pack. our central banks political institutions that change their forecasting so the imf does not have to worry about the policy like janet yellen has to worry about it. i do notlanchard: think it is politics when it comes to central bank forecast. that wehis advantage can think about the interactions between countries in a very systematic way. it is our job, it is what we are

good to do. i'm very happy. -- ifason is that we did something happens in china, what is it going to do to latin america? if you are just in china or latin america, you may not make that connection. i want to get to greece in the moment. but first, as we look at the economic outlook that you have, yes, the u.s. makes headlines, yes, a flat china estimate. that much more important is the commodity background. we see ugly commodities, iron ore leads the way right now, but this is a structural change. how does the collapse in commodities change your economic outlook? olivier blanchard: commodity prices are important. what strikes me as we did this latin was i looked at

year growth ish down, relative to the year before. it is having an effect. i looked at latin america, but there are other community produces. early 2000, committee prices were also going up. financial conditions were loose. they were probably able to achieve higher growth. now, they have the charge of how do they adjust to commodity prices? it is true of others as well. go across latin america, some of them are able to handle it well. it is a big challenge. professor, ken mcgrath serving before you, speaking of

them floating exchange rate. what will the dollar do in your cancellations? could we see a return of the rubin strength, the strong dollar strength of the late 1990's? olivier blanchard: we are not in the business of predicting exchange rates. we let other people do it and lose money while doing it. [laughter] it is clear that the fundamentals are such that the u.s. is in a cyclical position. interest rates will increase earlier in the u.s. and elsewhere. we tend to think that the expands thethis strength of the dollar in the last year or so. but sometimes the markets are a bit slow to adjust. -- it does not strike me as impossible. tom: let me move on.

here is an important quote. we are changing our view and now believe grexit, greece's exit from the eurozone, is the most likely outcome. --g's that risk will remain grexit risk will remain. givebailouts will they greece as they tried to come out of their -- olivier blanchard: we are working on an agreement between greece and the european creditors. played an important role. ask less ofle to the greeks then was in the original program. we understand there was democratic action and a

referendum. this has to be taken into account, which means that the greeks should probably be asked to do less than originally intended. they probably have to provide debt relief. both sides have to take serious side says,d if one you do it, we don't, it is not going to happen. and hopein that help, is the critical moment, what is the difference in this price versus the ones we have seen previously with sand fisher in 1998 and other crises throughout our modern history. what is distinctive about this european crisis of the moment? are twoblanchard: there things. there are many more players at the table, not just a country and the imf.

a country, the eurozone, the europeans, the imf. a comic things in many ways. the other is the other side of the coin. we had to have an adjustment program on the fixed exchange rate. it makes the adjustment much harder. tom: thank you so much. noticed about all of this economic reporting is the resiliency of the american economy. matt: we gained all that we lost yesterday, but really flat for the year.

i am referencing the markets which are just one part of the economy. ahead, ducati's on fire in north america. hill's reached an historic high last month. can i keep its speed? ♪

matt: welcome back. it is time to get you caught up on all the action around the world. let's start with europe. mark: elitist deadline approaches, greece has until tonight -- the latest deadline approaches, greek has until tonight. there is the new summit on sunday to decide the response to

greece's proposal. there is the feeling that any file out from the greek debt crisis can be contained. i want to focus on the u.k. bond market. the make of england kept interest rates unchanged at a record low. picture.ixed economic economist in the bloomberg survey forecast to the rate hike in the first quarter of next year. rate expectations are bringing the pound down to the lowest level in the month against the dollar yesterday. it is rising. this will change for the euro against the dollar today. it is on track for its third weekly pick line.

julie: we are seeing a rally in the u.s., green in the major averages. there we go. major averages higher, comparing .heir major gains but still up now let's take look at the imap. rallyte as broad a . i want to focus on materials for just a moment. 3.7%, even though earnings missed estimates. alcoa has been victim to falling aluminum prices but shares are doing ok today. other material stocks on the rise. commodities bounce back after five down days.

copper rebounding for the second straight day. matt: thank you very much for that. in asia, chinese stock stabilized after the government ordereded and shareholders not to sell for six months. the shanghai composite jumped, racing a loss of 3.8%. seng is in the green. enthusiasts splashed out last month, sending ducati sales in north america up by at 106%. new models in the first half of .015 an ducati's ceo, claudio domenicali. which of the three new

models has been the most successful? claudio domenicali: it was fantastic starting off the year. , the the three products completely new reinterpretation wean old product that launched in 1962 and we interpreted in a new manner. , it was very successful, only on the market two months now. it is doing very great. a nice evolution of the model introduced in 1980. 2012 is also doing well. matt: full disclosure, i have one of each of those. i am a huge fan.

the 1289 is an amazing bike that maybe should not be street legal but fortunately for us it is. the scrambler is one i do not have. i think you are reaching for a different demographic. i saw a woman driving one to work today. are you getting different ?emographics claudio domenicali: absolutely. low seeds, simple engine, something fun, it is attracting a lot of people that may not want the technology and speed and power, but when something fun on a daily basis. the other part of the story is that it is completely customizable. you can do your own scrambler.

seeing a we are completely new type of people. many women loved it. it exceeds expectation. it is very nimble. it is a very accessible motorcycle. ducati is actually owned by lamborghini, which is owned by audi. how much of a help has that been in making new models? claudio domenicali: from a design and production point of view, not much, but on the other side of the business, as an example, in a few months, we started to work with volkswagen and we are financing services that are very attractive for

consumers. it is very helpful for us. matt: we are watching some racing now. ducati has done incredibly well in moto gt this year with the new bikes. how much of a help our wins for sales? claudio domenicali: it is always complicated. it used to be you win on sunday and sell on monday. they'rehe world, interested in things related to racing activities and having these fantastic results from the beginning of the year is helpful for us, but it is more on the long-term basis. here,f we have difficulty we rebound and come back to

fight in this very difficult environment. the moto gt is a very high technology and difficult environment. matt: claudio domenicali, famed race winner in his own right. still ahead, on bloomberg market mockingbird.a markin herer lee is set to release second book. why did it take 55 years to publish? ♪

years inis a book 50 the making. properly releases her second leek on monday -- harper releases her second book on $40y and could rake in

million for the publisher. why did it take half a century to publish? shouldn't have even come out? it is a very interesting topic. i wanted to explain what the background is for this book and what is harper lee's condition? >> she published to kill a mockingbird in 1960 and never published again. for years and years, she said that she did not want to do it and stopped giving interviews in 1964. now she is 89 years old and in a nursing home, she had a stroke verys largely deaf and has bad eyesight. her manuscript for this book that she wrote before to kill a mockingbird that featured a lot of the same characters was found

by her lawyer and she decided to have it published. when you say that she decided to have it published, it not inlike harper lee is a state to make decisions like that, especially since her entire healthy life, she did not want it published. how can we say now that she is releasing this book as a 90-year-old woman who is not and control? claire: they are about to make $40 million, her lawyer says that she is fine, her friends say she is fine and a number of people who have known her for alabama sayile, that over the past few years, her short-term memory has gone and she is not the same and they are very concerned. when i went down there to find out what happened, i heard both

sides. people said that i met with her, i talked with her, she is sharp and witty. does people said that she not recognize me immediately. ,he has agreed to publish this she released a statement, harpercollins met with her. when you have someone who for so long in her life said that she did not want to publish again, is now releasing a book that is --tually not a finished novel matt: it was rejected? andre: she put it aside worked on to kill a mockingbird, a separate book but similar. is still in it and so is his daughter scout. she did not edit it. you have a book that has been likely copy edited to fix typos and that is it.

pimm: many people remember gregory peck in the movie "to kill a mockingbird." it is a whole industry. claire: it is huge. harpercollins is about to make a time of money for it. -- monroeville, they have survived on this industry of mockingbird tourism. matt: really interesting stuff. thank you. pimm is going to stay with me. we will be right back. ♪

welcome to the bloomberg market day. the world runs on oil. it has been a wild ride.

five consecutive sessions of declines. what drives the price swings? greece is too distressed. what does this mean for the cash-strapped country? we will continue to talk about greece. clicks the new york stock exchange computer malfunction prompts --. democratic lawmakers respond. matt: good morning. pimm: let's look at stocks. s&p 500 index adds