ebay. betty: cuba reopens its embassy after i do that lasted for five decades. with validity future that we will look at the future relations between the two countries. whether therek at is a potential risk to the overall u.s. economy. ♪ betty: good afternoon. mark: thanks for joining us. let us begin with a look at the markets on this monday, july 20. wall street being sent higher today. the s&p 500 was above its may 21 closing record earlier. dow industrial and the nasdaq are also higher on this monday. the route in commodities

worsening. the prospect for higher interest rate sending gold to its lowest level in more than five years. miners posting the steepest losses and indexes around the world. goal right now is trading lower. oil dropping to a three-month low. the prospect of iranian shipments will increase the global supply. crude is now down to trading at barrel.a betty: this two-year yield is now at a three-week high for treasuries. in the currency market, what else is lower is the euro. it has been slightly higher trendingbut the euro lower to a two-month low against the dollar.

remember in europe, greece has finally reopened its banks. not to the top story crossing the terminal at this hour. greece finally getting some relief for the first time in weeks. greeks got more access to their on money as banks reopened today. this report from athens. >> a huge week for greece. banks reopened after being closed for three weeks. most capital control remains in place. greeks cannot take out 420 euros per week instead of 60 euros or day. that per day. they can access safety deposit boxes and checks. the other big news today, greece repaying the european central and 4.2 billion euros pegging back the central bank here in greece. these are not to be the things

that made tsipras sign that deal. foring ahead to a punch up new reforms that are preconditions to getting a third bailout. again as elliott from athens. earlier today, history was made in washington. the human flag was raised that the country -- raised as the country real but it's embassy for the first time in 54 years. the u.s. reopened its embassy in havana. john kerry will travel there this summer. deal --e arm o iran nuclear the counselor unanimously approved and now the spotlight shifts to congress. ian bremmer was a guest on bloomberg surveillance this morning. >> hillary clinton came out immediately in favor. she will drive a lot of the

democrats because they understand this deal have to get support. if the americans are the sole confident ends up not supporting the deal at everyone else has signed, whether or not is a bad deal, all that means is americans are not doing business with iran and everyone else is. that is a horrible situation for the u.s. to be in. mark: benjamin netanyahu has condemned the security council's approval. says he will make his case against the iran deal. shares of paypal are rising today in their market debut. it was spun off from ebay and has been up as much as 11%. paypal ceo spoke with emily chang. >> one of the things we have that no other player has is we are a truly agnostic platform. wentegrate for merchants -- integrate for merchants any form of payment, not just the paypal wallet. payill also integrate apple

or other forms of payment as well. mark: paypal open to trading with the market value almost 1.4 times that of ebay. thing with ebay, it is being downgraded by s&p which is cutting the online auction or's rating from triple b plus. the low marks reflect a downward revision of ebay's business risk profile as a result of the spinoff of paypal which accounts for half of ebay's total revenues. less roddick diversity without revenue provisions from the fast-growing paypal business. fitch is downgrading ebay down to triple b from a minus. betty: the financial times may be sold. a sale is being explored after receiving interest from potential buyers. the paper could bring in $1.6 billion. it has a circulation of 720,000. 70% of subscriptions are digital

now. for sepportable moment blatter. is as compass today was interrupted by a british shower -- whoe to rose to shower bladder with money. list that was nothing new for the comedian. last month, it tried to disrupt a performance by kanye west at a festival in britain. mark: a billionaire says he wants to find life beyond planet earth, and he is putting money where his mouth is. he is putting money to hunt for an alien civilization. 's breakthrough in this project would be the biggest sign to fit -- biggest scientific in years. he was an early investor in facebook and twitter. that is a look at the top stories we are following at this hour. betty: that is life imitating

art. remember contact? mark: yes. betty: i believe it was a russian billionaire funding this mission to find alien life. that you go. -- there you go. mark: you can mix that money together. since the financial crisis, wall street has been on the lookout for threats to the financial system from banks that remain too to fail to almost a trillion dollars in student loans. the problem is auto loans which ballooned to almost $900 billion in the first quarter of 2015? loans that now comprise 20% of all auto loans,, that number is the lowest in over 30 years. with us now is tom who really recently stepped down from one of the largest subprime auto lenders in the country. remains on the board.

great to see you today. biggest issue on investors minds and consumers and regulatory agencies. are we starting to see some sort of bubble like we did with the mortgage bank securities market? >> i don't think so. it seems to be pretty stable right now. it is good for customers because the prices are low, with the returns are still in a place where there is enough margin to withstand some sort of economic -- betty: are they priced correctly to reflect the risk? thomas: i think so. i think the rating agencies i've done some. mark: when people hear the word subprime, they think of this economy spiraling out of control. how do you get rid of that statement? how to use a subprime has adjusted its up to the point now

where there are regulatory hurdles you have to meet, but it is not the stigma some people thought it was? thomas: in auto lending, no one lost money. the bonds were protected. shareholders were protected. betty: during the financial crisis? like maybe auto lending was painted a little bit by a brush that was not appropriate. i think now that the market has shaken out a bit when there is not too much competition but it is still effectively keeping the price online, there's not that much risk. that of part of the risk about a third of these loans are with people whose credit scores are below 500. does that give you pause? is that concerning to you? thomas: most of the dealers, there is not a lot of good business done for customers below 500. the average subprime loan at a

typical dealer that sells new vehicles will be in the 550-575. ande customers work hard make money and they should have reliable transportation i think. betty: things are going well in a lot of markets. the housing market, the job market. rates are so low that money seems cheap. the economy seems to be stable here. things could change in a few months when the fed begins raising interest rates. risk priced in a market like the subprime auto market? thomas: car loans are short duration. as long as you measure funding and you are not taking unnecessary risk, i don't think rising rates poses the same threat there as it would in other industries. it will make the cost of a vehicle more expensive. it could hurt car sales. mark: there is a lot more

exposure to auto loans this year than there was last year, correct? thomas: it is growing. that?how do you combat can't you come to the realization that there will be some people, even if these are small auto loans, that will not be able to pay this back or some people might walk away from them as what happened seven years ago. areas: the prices defaulted in. it is like an insurance product you have to have enough spread and margin see you can handle a certain amount of the default. it is when there is a big change in the default rates. sometimes companies are not prepared for that change and cannot handle the stress. that comes with rising delinquency and false. those companies tend to be in

trouble. betty: why did you step down and what are you doing next? thomas: i had been doing it for 20 years and it was just time. we had been together for a while in the world is moving in a different bit of a direction. there is a lot of opportunities. betty: is your next step the auto market? thomas: i have not decided. you find out after all this time doing the same thing would else is out there now. the last couple of weeks of an interesting. there is lots to do. betty: things for joining us. thomas: thank you. next halfng up in the hour, gold falls to the lowest level in five years. we look at the factors behind the decline in the precious metal. betty: john kerry is scheduled to speak this hour about the reopening of the cuban embassy in washington. don't miss that. we will be right back. ♪

welcome back. mark: time for a check of the markets. julie hyman joins us now. i was watching you about an hour ago and you were telling us about the s&p 500 and how it was nearing a record. julie: let's take a check and see where we are right now. we did surpass the closing record high for the s&p 500. looks like we are not quite there right now. we are just shy of that. doesn't look like we will make it unless we see a bigger surge in today's session. record because it

has been at the past two days. any game today would be another closing record for that index. dow not quite there but up about 2/10 of 1%. i want to get back to one of the big stories of the day and that is paypal and ebay in the spinoff of paypal. it rises 7% in the first day of trading as an independent company. people have had the opportunity to buy on an issued basis. just looking at a report that ebay is making its first acquisition as independent company. today.ocks are up-to-date bloomberg intelligence has this chart for us which shows volume growth of paypal up here versus the traditional payment companies. paypal has seen volume growth

28% of its last report. 12%,he other providers, 10%, 7%. you are getting growth in volume here. that is a good thing. on an absolute basis, paypal is still much smaller. $228 billion in payment volume. that figure for recent -- you flip the lines here. -- fiscalr physical 2 2014. it is still dwarfed by the other major payment providers, particularly visa. -- wanted toercard check on the stocks because both are trading at a record today. the price targets on both stocks were raised to $81 for visa and

$105 per mastercard. some of ar reasons, currency headwinds have abated for the payment processors even the retail trends might still be relatively weak . mark: julie hyman, thank you so much. betty: a look at some of the top stories of this hour. george h.w. bush has been released from the hospital. last week, he fell at a summer home in maine and broke a bone in his neck. doctors say he will fully recover and if you must. is 91 years old. major job cuts appear to be on the way. barclays says it may eliminate one out of every four jobs. a cumbersome --

a controversial post. this comes days after a site ran and removed a controversial item about the personal life of a cfo. out orsers were pulling putting campaigns on hold because of the item. that is a look at the top stories of this hour. in sports -- mark: jordan spieth is in a three-way tie for the british open lead, currently at home number 17. this is a young man who is here on bloomberg and couple of months ago giving stephanie ruhle i golf lessons. this is a young man who is going for history, looking to win the grand slam of golf. this is one of those moments where the folks who have been following him, and i have been watching some of the tv coverage, he is not shaken by this at all. he is rising to the occasion.

betty: good to be young and have no fear and no package. we are not even going there. baggage is baggage. betty: i am thinking tiger woods. it's the lowest level in five years. mark: a look at what is behind the drop coming up on the "bloomberg market day." ♪

mark: welcome back to the bloomberg market day. fell tohe price of gold its lowest level in more than five years today. mark: analysts say there are a number of factors at work in the u.s. and abroad. earlier we spoke with the james

steele, to commodities analyst for hsbc securities. >> we are still looking for the market to recover back over and stay over 1100. dip below -- any there to be temporary. mark: i said what are you doing bringing family up here? what is going on? >> let's take a moment and look at how momentous that slide was around 9:30 p.m. last night. within 15 minutes he saw the biggest intraday drop for gold in more than two years. is putike a lot of blame on margin calls. if you have to raise cash, that is an easier thing to sell. orre was some large trader some bank liquidation that got in there and jumped to move the price lower. betty: gold was on a slide down, so this was an acceleration of that. alix: there was no fundamental

change on sunday night i made this happen. within get some data on friday that the 57% more gold over the last six years, about 600 tons. that was less than many expected to there was disappointment there. we have singled not do anything this year. it was very unloved. ubs came out and said how much more is this going to get because are you going to short gold here? who has the stomach to jump in and buy? mark: it has been under pressure because of the stronger dollar. alix: absolutely. you have into submission of the for the firsttes time in years and what that would do to the balance sheet and negative rights. that is the overarching reason, which is partly why you have not seen a safe haven bid you would .ave expected greece

betty: this point is there any bottom? alix: when you have to watch is the marginal cash cost for producers. if it stays around 1100, you can see some marginal production. said they see tiger supply in 2015 because supply has topped out. mineu were going to see supplies top out -- you always need demand. mark: why did the gold reserves turn out to be lower in china than some forecasters were expecting? alix: i don't know. 1.6 percent tot 1.8% of its foreign exchange reserves. that is significantly below developed nations.

the idea is they needed to buy. if they did not line up, with the need to buy even more? they wille saying have to buy more. mark: we will see you a little later starting at 3:00. alix: i will be on at 3:00. mark: you are on all afternoon. i will see you later. betty: i am leaving now, ok? in case you don't remember. i am being abandoned. mark: we are staying on china. will find out if months of cutting rates in easing restrictions has stabilized the market. ♪

it was a big corner from morgan stanley. the bank also reported record profit. shares have doubled in the last 2.5 years. john mccain is saying donald trump owes an apology with veterans. trump isn't apologizing for anyone or you do saying senator mccain is not a war hero, even though many on both sides of the political aisle say he should. >> he owes every american veteran and john mccain an apology. >> there is nothing funny about the hate he is spewing.

meantime stanford economics, the chief economic advisor to president george w. bush tells bloomberg he doesn't think trumps remark was an accident. them of it many qualified people. even an established candidate can this -- can make mistakes. mark: he sees no clear republican front-runner and doesn't expect the hopefuls to take many hard and policy stands. harpercollins says it sold more than 1.1 million copies. it is the fastest selling book in the company's history. it was never published. those are your top stories at

this hour. coming up in the next half hour of the bloomberg market day, cuba reopens its embassy in washington after a diplomatic freeze that lasted five decades. we will look at the future of relations between the two nations. company'sok at the impact on the movement of money around the world. -- joins us from london. >> the 4.2 billion euros to the european central bank, also repaid other creditors. the deadline was one it couldn't afford to miss. ecb cut have seen the off funding to greek banks. that could have led to a default and grexit. we have seen this optimism today in european markets. you can see gains pretty much across the board.

the after stock exchange still closed today. we hear it will stay closed through wednesday. banks have reopened and angela merkel has held up the prospect of a limited debt relief for greece. the picture is looking pretty hopeful for europe's country. a ninth a.r that is the longest winning streak since april 2014. where we have seen declines is with commodity producers. this is knows the prize, given the stronger dollar has been weighing on commodities. the three biggest losers on the stoxx 600 today here in europe. is a surprise given that oil at its lowest in three weeks and gold dropped to a five-year low. back to you.

mark: signs of recovery in the market. >> easing policy, losing meaning -- loosening up restrictions. you look at the gains and price of home spring apples. majority.g at a it is also worth noting that data shows the pickup has largely been restricted to prices. mark: julie hyman joins me now with a check of the markets. julie: we are on record watch for the s&p 500. it looks like on a closing basis we are there right now. looks at we are above that level

at the moment. the nasdaq trading at a record. up one third of 1%. you can get an idea of the sectors helping move things much higher. tech is can to beating the most. drag really coming from energy and materials. slump has been affecting the markets today. let's talk about the tech side. paypal and ebay have been on the rise. paypal trading for the first day as an independent company. ebay gaining 3.5%. we also have some notable records within tech and some of the big cap's doing well. apple is rising 2%. amazon and facebook are trading at records. facebook to 117.

it is at 9790 today. saying by 2017 amazon could be the largest seller of apparel in the united states. interesting goal they are for amazon. on the plus side we have technology and on the downside energy stocks feeling some pain today. williams companies are all lower along with oil prices. as those gold prices tumble, gold miners are doing very poorly. mining down nearly 12%. losing streak it has been on right along with gold prices. down 4.5%. still ahead in the next half hour, cuba's flag raised for the first time in over five decades on american soil. we literally what that means for

business.

mark: oil is known below $50 a barrel for the first time since april. >> the basket is at its lowest in 12 years. oil looks to be down for the fourth straight session.

declines have been taking it below $50 per barrel. it has rebounded in the early part of the year and had that decline since the spring. it has gone back down to levels we haven't seen since that point in time. we have been talking about other commodities today. given what traders are saying right now, it doesn't seem as though there is any near-term catalyst that is going to snap it back. optimism there's any when it comes to these oil prices. mark: for the first time in 50

years the cuban flag has been raised in washington dc. the two countries resumed diplomatic relations after severing ties in 1961. in just a few minutes we will be hearing from cuba's foreign minister and the u.s. secretary of state john kerry. they will be speaking at a press conference. discuss the latest, willem marx. what does this mean on a willem: behind? me was the swiss embassies and was transformed into a full embassy. the same thing happening down in havana. the red blue and white starred flags here in d.c.. going to have to wait until mid august. what that means in practical terms is they are free to travel

in their host country. the u.s. diplomatic cables can cover the entire island. they can talk to cubans without fear that the cubans will face was that face reprisal. -- will face reprisal. mark: not without some sort points, the cuban foreign minister made remarks inside the embassy. he paid to review to america's values, but he also warned of excess craving for domination. sore points going to continue near-term? willem: if they are asking to lift that embargo, there are some outstanding obstacles. that is one of the sticking points. agreements like law

enforcement and immigration. there are some soft spots. another one is the u.s. propaganda broadcast. tv and radio coming over to cuba, the cubans demanding that is part of the process of normalization. mark: thank you so much. let's continue on with this story. caitlin webber joins us from our washington bureau. thank you so much for your time. it has been over 50 years of years of bad 50 blood between the united states and cuba. what does this mean on a >> we are going to see more freedom of movement. diplomats in growth -- in both countries will have more access

to government officials in both countries. for the most part it is largely symbolic. it could certainly be a source of confidence for the few american industries and countries that are able to expand trade. mostly symbolic. businessestypes of are going to benefit from this? >> as cultural exporters you have been able to sell before president obama has announced this. in practice it has been very difficult. it is difficult to be paid because of limitations on offering credits to the cuban government.

certain u.s.o's industries, including telecommunications, internet, u.s. building materials. been given a wider degree of ability to invest in cuba. mark: most cubans live on $20 per month. is this really going to change their lives at all? the government controls everything that goes into the economy there. for most americans, companies, and industries, they are welcoming this news.

the commercial impact will be limited until we say a lifting of the copy hence of embargo. >> we are awaiting the news conference between secretary of state john kerry and -- when that happens we will bring you developments of sin as we get them. stay with us. market today continues in just a moment.

mark: the u.s. federal reserve is close to sending extra cash .o the nations top ranks jpmorgan and chases facing the biggest shortfall at $12.5 billion. the fed a child -- the fed assigned capital charges. the goal, to keep the banks from threatening the financial system. lockheed martin agreed to buy the biggest maker of oteri helicopters. they will now focus on making jet engines and air conditioners.

a group calling itself the manages the database of over 37 million members. the group says it will publish the data online unless ashley madison agrees to shut down. the grand slam bid ends at the british open. he missed a birdie on the 17th win his is not going to third major. shares of paypal are rising today in their markets debut. fromusiness was spun off ebay and has been up as much as 11%. the company's long facilitated .ayments across borders the international growth is increasingly important. emily chang takes a look at paypal's expansion into the digital remittance industry and its impact on the movement of

money around the world. >> if you want to send money to a loved one overseas, you stand in line, you give cash, there is a large percentage of that cash taken to send money overseas. line to get cash in a high crime area. we think that technology can fundamentally change that equation. mark: had a bit of a technical difficulty. but none with emily. she is here right now. what is the thinking of this going forward? we talked about paypal

being an acquisition target. google may wanted, apple, facebook. to him and john donahoe, the former ebay ceo is now the chairman. bey think this is going to an independent company going forward. there are just not a lot of copies that can do that beale -- do that deal. there hasn't been a lot of innovation moving forward. this mean fors the brick-and-mortar retailers? emily: he thinks the biggest room for innovation is at the point of sale. could separate. they really are trying hard to revolutionize and be a part of that in-store experience. mark: according to bloomberg data, market cap at about 46.4 billion darrelle is -- $44.6

billion. ebay shrinks to roughly 34 billion. emily: they are happy ebay isn't dragging it down so to speak. a lot of people think ebay is more attractive as an acquisition target. a big headline. ebay's future darkens as paypal's spinoff happens. ebay has a lot of tough challenges ahead. look at amazon and even brick and mortar retailers like walmart stepping up their online game. it will be a difficult road ahead. of setbacksd a lot

when google changed its algorithm. a lot of results were displayed less prominently. mark: talk to me about last fall and talk to me about the pressure carl icahn was putting on this company to change. emily: i pushed the new ceo today come have you talked to carl icahn? he said no, he hasn't. carl icahn has made a reported $180 million on this spinoff. our sources is telling us ebay saw this slip. every time they made a decision that the companies were better -- were better together until just recently. that is where they decided paypal's future is brighter and ebay's future is brighter if they are separate companies.

mark: why was now the time? emily: it is difficult to get a real answer to that question. they felt they needed each other. paypal also needed ebay. company 13ought this years ago, all of ebay's transactions were through paypal. so happens over time over the last 13 years paypal has exceeded most expectations. they are 168 million customers. think about the billions of people around the world. opportunity huge they haven't been able to execute up until this point. -- thinkpeople thinks paypal's future is brighter. >> when you are talking about the growth, which has been

explosive, is he shocked? >> a lot of people talk about 0.2 billion dollars spent on e-commerce every day. he thinks it is all commerce that is paypal's opportunity. pay has a lot of credit card information on a lot of users. google trying to make it. square, you have companies wanting to get into this market simply because there is so much progress to be made. -- at an at it inflection point, who will take it vantage of that? mark: emily chang joining us in new york. the bloomberg market day. banks reopen their doors in greece. that story is next. ♪

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restrictions remain in place. betty: we will take a look at funding the nation's highways, just as they take a long vacation. and precious metals hit a five-year low, and when it, it will rise again realbloomberg headquarters, i am mark crumpton, here with scarlet. scarlet: the real story is in commodities. this dipped below in asian trading, and right now about oil. we are currently above $50 a barrel, but the wti did tip below 54 the first time