from the closing bell. i'm alix steel. joe: and i'm joe weisenthal. ♪ alix: optimism overseas, crisis has eased, the dollar fell after wounding the fed, keeping interest rates on hold. thequestion -- joe: question is, what did you miss? we spoke to the cfo of the biggest home lender about his business and economy. iran, the nation is back in the game of global commerce. joe: we dig into the hughley -- usually asymmetric risk on the fence. is a december rate hike a lose lose proposition? take a look here at the s&p and the moving average continuing the bounceback that we saw yes day.

year, looking at its best four-day gain and about five. kind of a mellow feel. joe: kind of mellow. alix: orderly. it was widespread, nine out of 10 sectors in the green. the only one that was down was to be expected, because they are so defensive. for several days in a row we saw the fix collapsing. now it's back. alix: the fed did not raise rates, but so you go. it continues. i want to take a deep type right now at a story that i was watching all day, the iranian nuclear deal. this is a function from noon go, basically looking at all of the anchors around iran. i will do my best to vanna white imitation at the board. you can see that there are 10

and as of noon today there were three that were registered to iran with its storage capacity of about 60 million barrels. conversationly the today when it came to iran. not what they can produce, but what they can offload in floating storage right now. anywhere from 20 million barrels the 40 million barrels that could be offloaded in a moment. yes, they had of -- they have a lot of oil that they can eventually produce. alix: but the real question is, what is in these tankers? estimates are that 90% of the condensate,ored is that is not hot of a commodity. day is deep dive for the not nearly as exciting and traumatic, we have got a lot of bad economic data this morning. a really ugly retail sales report this morning.

everyone saw that big disappointment and we had one of our favorite measures, the optimism index. usually there is a lot of whining about obama care and stuff like that, but what they say each month is interesting and ugly. you see a big decline in recent months. they don't look surprised. still elevated, still higher than it was a couple of years ago. but you have got to watch that steady decline. alix: all the dots are adding up. breaking news, the greek prime minister has been speaking on greece and we want to show you the headlines we have been watching. the prime minister saying that they will gradually lift capital restraint -- capital controls and restore the greek banking system. he thinks that the final agreement will be ratified in about one month. he also says that greek deposits

are safeguarded. the question is, what kind of credibility does he have? joe: lifting capital controls is tough. everyone remembers that even if they do it, you have to do it slowly so that people don't just take the money out again. alix: didn't take two years for cyprus to regain capital control? joe: once you make that decision, it's not an easy one to undo. alix: they did support greece, again it was the scene of a german between berlin and paris. joe: austria being more sympathetic than you might expect. alix: turning back to bank earnings, we want to talk about what's going on in the trenches of the u.s. economy. from california to new york. john shrews barry is the ceo of wells fargo and joins us now. welcome to what you missed. wells fargo saw flat sales

growth in the second order. what was your one word to describe the u.s. economy will -- right now? >> the one word would be mixed. we are still in a choppy gdp growth rate environment with a horrible first quarter. the second quarter was a lot better. it still reflects a lot of uncertainty in people's minds, but as you alluded to, there is small business optimism. the good news is that we continue to grow loans and there are few activities in terms of taking shares and deposits, people have been hanging on to more cash and have managed to grow assets meaningfully over the course of the last year and the quarter. but there isn't an overwhelming sense of optimism out there, it is that slow grind back. have a you nation? what continues to hold the economy back? having these false starts where

we are off to the races but it doesn't work out. >> well, we didn't have a housing recovery, like you would have expected from prior recoveries. we have had slower population growth than we used to. a big driver of overall production. people have memories of what they just went through, whether it was in housing or elsewhere when credit was suddenly harder to come by and people were hanging on to bigger cash balances, those things are pretty fresh. asicy response has not been supportive as it could have been. take a look at your loan to deposit ratio, we did see some work between the first and second quarter. take for analysts to put that deposit money to work? john: loan to deposit ratio does

not mean what it used to because of the structural change in bank balance sheets. we hold onto a lot more cash and investments your these than they did in the past just a has of the regulatory changes, which were very constructive over the last few years. we did grow our loans to a record high of $880 billion, we never had one quite that big. what is going to cause it to grow at wells fargo and elsewhere are people whose businesses, mainly, are more funded use credit lines to build other plans, to buy another business, to expand in a way that requires more from the consumer side. most mortgages get sold into the secondary market. we all keep jumbo loans on the book. but it is hard to grow at the same rate as a shorter-term loan. auto loans turnover relatively quickly. even though business has been robust it does not change the

balance that much from their first credit card loan that grew nicely at wells fargo and elsewhere. you described the economy is mixed. are there certain industries or regions where you say that these areas are doing particularly well? energy, as you just discussed, has been down on the industrial side for the last few orders, which has put a real dent in gdp. commercial real estate has been doing really well. housing is doing a bit at. autos are doing very well. new car sales this year will be a high tick for the industry, probably. regionally i was a that the the westchnology on coast is very strong. commercial real estate, financial services where you are , in the new york area they have propped up government spending in the d.c. area, very strong. florida in particular has come back in a big way over the last

few years. coastal, more affluent communities, more technology oriented activities. they have been doing very well. on the call you mentioned the wells fargo boosted your portfolio from the investment side, but you don't expect long-term rates rising that much anytime soon. why? we shifted $16 billion out , not that big of a move in a year, but do feel like growing for longer at the longer term and of the yield curve. policy rates will probably go up before the end of the year, certainly shortly after that. with what is going on in the thed, the pace of rove, attractiveness of the dollar as a reserve currency and the fact that people keep flooding in whenever u.s. rates tick up over a certain threshold.

it feels like longer for us. as you travel the world and talk to investors and customers, etc. , i'm holding that view. for a while long-term rates to begin to move up and we will do better as a result of that and in terms of our earnings profile , continually adding new investments. joe: all right, john shrews barry, thank you very much for joining us. alix: still ahead, a storage deal that could open the countries stock markets early in 2016. imagine the influx of cash. one investment bank has put up a price tag on it. that number, after the ♪

alix: i'm alex steele. -- alix steel. irantoric deal is helping reenter global commerce. total $1 billion in the first year. .hat's of the -- that's a b joe: that will be fun, looking at how that moves. investors feels confident that these will be lifted rather than get presidential waivers. i'm looking for the crazed gambler iran etf. i'm excited about that. alix: what does the oil-rich nations reentry really mean for gas prices? stanley's chief u.s. economist joins us now. such a pleasure. we did not really see oil come

off any on the iran deal, but the estimate is anywhere between five dollars to $10 per barrel, if we see a lot of oil. what does that mean at home? >> all markets are forward-looking, including oil markets. we cannot extract what is going on with concerns over greece and some, but i imagine that of the decline in oil prices was in reaction to anticipation, but anticipation of a deal being announced in iran. , in people saw this coming other words? >> i think that people saw it coming, investors would have been betting on what it means for oil if there was more supply coming from iran. prices have declined, but for consumers it is always a good means you don't pay as much when you go to gas up at the pump. at the very least it makes consumers feel better. alix: what is the lag time for

that? >> about two weeks. pretty soon you see it immediately going into wholesale gasoline prices and in about two weeks you see it flow through into lower prices at the pump, what you and i pay. what joe would pay if he drives a car. but he's been in manhattan a long time. right, let's shift to the u.s. economy. two pieces of bad economic data this morning. i mentioned them earlier. the optimism survey, a surprise drop from last month that was not good news. the other thing that many more people paid attention to and went into gdp calculations, really weak retail sales numbers. we had hoped to see a recovery from the early part of the year. last month was revised down. what is going on with the economy?

>> our own survey bobbled with what is going on in china, the uncertainty was higher in the economy. you will see that in the sentiment of the survey. there, signs of weakness let's get into july. let's get into an area where the dust has settled. on the retail sales number, we had a big jump in may. retail sales data tends to revert. a big jump in one month means a decline in the next month. i am heartened that it was as small as it was given such a large increase in may. ultimately economists want to siege bribery reports that we would consider clean. we don't know how much those sales were boosted by during the memorial day holiday. we should all be watching the july report? >> it is a lot of focus on that, but i am

heartened either fact that the payback was less than what it could have been in the june retail sales. we have real consumer spending tracking 2.9% growth in the second quarter compared to 2.1% in the second order. that is a higher rate of spending and anything near 3% like that means that your entire economy is going to grow somewhere near 3%. +++ spending was actually down.

you are going to go there first to spend extra money. you definitely buy something from amazon. what was your take on that? >> i tell you what, that was probably the most important retail line item. throughout the entire winter months never want -- never once did we stop drinking or eating out? the kids are all right when that happens. it is the first thing we do when we go -- when we feel good, go out to eat. i am concerned that we had a tick down in the june retail sales data. a verys the first in long string of a strong month for that category. it does bear watching. households feeling anxious about financing, that's category spending. there is nothing i can point my fingers at to say -- household should be worried. you are sticking with us to the next segment? alix: because coming up we have a rundown. joe: and how to spot a fake? we will tell you the real story before -- about this chart. ♪

alix: i'm alix steel. joe: and i'm joe weisenthal. alix: the third bogus report claim of a takeover offer. joe: that would be huge of we reported it, but we didn't do it. a site calling itself bloomberg. market did, it was an amazing hoax and quickly discovered and the sec is looking into it. alix: i should point out that cory johnson said that the volume went crazy. amazing. i was impressed. alix: to get to our other top headlines at this hour, a record-setting quarter for css, for the first time electric,er-share was

topping estimates that earnings were $553 million, up on the second order of 2014. the company did miss on the revenue side, all about transporting oil rather than coal. joe: yum! brands is out with their earnings. stockre seeing their trade lower after missing on overall revenue. after sales in india and china [no audio] alix: uber must play -- must pay a driver thousands and expenses. those are your top headlines. morgan stanley is here to help as break what you might have missed today. here are the three terms that explain why janet yellen is not raising rates until december. talk us through your first one,

alan. labor market conditions, we seem to think that labor markets are not doing too poorly. what does this chart tell you? ellen: it wraps up the broad number of labor market indicators that she always site she needs to see improvement in. it is about the share of part-time workers that which they can work full-time but cannot. discouraged workers. the gambit. up into one neat index. weakenwe can -- it did in the later spring months. in the mining sector lower oil prices lead to layoffs there and the manufacturing sector had a bit of difficulty because of the rapid rise of the dollar. we had to digest that in the labor market index. it has moved back into positive territory and is growing, but growing more slowly. it means the labor market is improving more slowly. this is critical for the fed.

the entire way that they have framed monetary policy and their desire to lift rate is based on continued improvement in the labor market. we have followed the monthly conditions index closely to see that it pays in positive territory and at least shows that even if it's slow improvement continues. that thementioned dollar was one factor. talk more about that area why is that something you are paying close attention to? ellen: i think we cannot harp enough on the dollar as a wildcard for the fed. not only on when they will lift rates, but as a determinant on the pace of rate hikes after they do start raising rates. it causes a lot of indigestion to central bankers when their currencies have a rapid appreciation or decrease -- appreciation or depreciation. what we saw was anunbelievably rapid descent of the u.s. dollar. that trade was the biggest

spread on growth as a result. if the dollar continues to rise rapidly, i cannot have enough confidence in my outlook for growth to raise rates today. many policymakers have said that they hope that the adjustment has been complete. so that the bulk of it was markets suggesting a lead up to the rate hike. but we will see. tamed, thear remains dollar takes off and it leaves too much uncertainty. consumers, stashing their cash without spending, talk to us about this. ellen: so, starting with the april meeting of the federal market committee, they spent a great deal of time talking about why the consumer is not spending. what we found is that the -- .here is a lag time

they have to be convinced that gas prices have not only fallen, they have to be convinced that they will stay low. we are in that time and we think that consumers have started to pick this up. we have seen huge spending tracking in the first quarter. we think that consumers are's ending more. the fed will need to more data, the july retail sales report that we will all be watching closely. july, july, july, telling us of tumors will continue to bring the personal savings rate down and spend more. alix: ellen, great to have you on. joe: we will be right back.

alix: i'm alix steel.

joe: i'm joe weisenthal. what you miss? alix: do not miss janet yellen tomorrow, giving her report to congress on day one. joe: don't forget that there is a big

>> the u.s. and iran making history, but will the deal lead to increased cyber spying? ♪ emily: i'm emily chang. this is "bloomberg west." we will look at how nasa got incredible images of the dwarf planet and talk to some experts in space exploration. to the tune is i'd of $23 billion.