question apple reports after the bell today but it will not the breaking out specific numbers for the timepieces. olivia: ibm selling off after another quarter of falling revenue, making it the 13th straight quarter of falling revenue for a company trying to remake itself. and lucky number 16? ohio governor john kasich officially jumps into the race for the republican nomination. what does he have that the other candidates don't? olivia: good morning, everyone. scarlet: let's get to the headlines this hour. greece is european creditors have agreed to ease repayment terms if the greek government

can deliver on the terms of the bailout package. that contradicts the position of german chancellor angela merkel. she said that relief is merely an option to be considered later. shares of united technologies are falling the most in four years, dragging the rest of the dow down with it. the company cut its profit forecast for the second time since june. united technologies says it's aircraft parts is this and otis elevator unit are doing worse than expected. yesterday, they agreed to sell their sikorsky helicopter unit to lockheed martin. scarlet: mixed results for verizon, adding more than a million customers in the second quarter thanks to tablet promotions. profits beat estimates but they cut their sales forecast for the year. they're having to compete with price cuts by rivals like t-mobile. a shakeup at toshiba over an accounting scandal. the company will have to restate earnings for six years.

julia: toshiba announced that his twoident and predecessors will resign over the company's flawed accounting practices in which top executives set unrealistic profit and the resignations are effective immediately. a number of other executives, including two vps will excite and the new management team will be announced in mid-august. pledged to correct its earnings by $1.2 billion. its share price rising 6%. scarlet: toshiba makes appliances and nuclear reactors. singer taylor swift is taking on china, teaming up with the second-biggest e-commerce company for a fashion line for chinese customers. swift is coming to shanghai for a concert in november. those are your top stories this morning.

aboutng news in new york a potential strike at the two major airports. sounds like the strike is no longer potential, it is planned. more than a thousand security officers, baggage handlers voted unanimously to authorize a strike that would begin wednesday night. these are all contract workers who plan to walk off the job at terminal seven in jfk. that is where rish airways, united airlines and cathay pacific are located. airways, united airlines and cathay pacific. this is according to a spokeswoman for the union who represents these workers. the workers say they have not been well treated. they were asking for $15 an hour in pay and they are nonunion.

most of the employees planning to strike work for delta, but others work for british airways and other airlines we are talking about. according to the union, aviation safeguards had made repeated .hreats to users the strike could begin tomorrow night at 10:00 at laguardia and jfk. olivia: thank you so much. still to come in the next hour of the bloomberg market day, ibm shares falling for a 13th quarter. and ohio governor. -- ohio governor john kasich is adding his name to the very long list of republican presidential hopefuls. we will bring you his announcement live.

apple earnings cannot after the closing bell. they estimate the company sold and 3.5lion iphones million watches. but we won't find out how many of the wearable gadgets apple sold because they will not break out unit sales for the watches, leaving many to wonder how successful the latest product really is. scarlet: joining us for a preview of what we can expect is and rbc capital markets -- rbc capital markets analyst in san francisco. olivia just mentioned apple will not break out unit sales and in april, we know tim cook said demand is outstripping supply. so we have not a lot of information to go on. whether therege is growth in this new category? in terms of the supply side, you have seen things improve a little bit.

supplies are ramping up a little more. look at supply chain checks and survey works, both of those point to a slow but steady start to apple watch. tim cook has said he doesn't want to give details because competitors are looking for it. is that why apple is not being so transparent? guest: if you step back, this is a high-quality product. for a company so large to move the needle on its sales, need to have a large market, a growing market, and a profitable market. with apple watch, there is a potential but the initial start to the category has not been pleasant. it may be comparable to the ipad -- scarlet: the ipad had a huge

launch. guest: and look at the ipad franchise now. olivia: ipad had a much bigger launch. have a goodif you launch, you have to have staying power. it is not easy for a company like apple to enter into a new category like that and hit the cover off the ball. olivia: and we know what of the big problems is people like to ditch their wearables. 60% of avenue -- of apple revenue comes from the iphone. are you worried they are too dependent on one product? if they keep getting market share the way they do, you have to guess they are going to reach the saturation point. i would guess it is pretty low bet has been to

diversify the ecosystem and iphone is the core of that. but can i get you to do other things? to diversify the revenue base. we talked about this that apple is notorious for lowballing guidance and then beating its own lowered far. earnings-per-share beat in the last eight quarters and revenue beat in the last seven quarters. guest: i think people have caught up to that. scarlet: and every quarter they continue to beat. guest: i think one particular element of guidance people are looking for is specifically china drank. you will see momentum be very strong in china. we had some issues with china as you want to see if consumers, if the momentum continues. how important is the

china mobile partnership? guest: it is pretty significant. the big three in china will drive a significant amount of sales. they are a nascent market. scarlet: what part of apple's business is most vulnerable to the weaknesses you are seeing in china? growing 70a is percent year over year. ofy have accounted for 50% the incremental dollars apple has had. it is extremely important to them. you have headwinds from a macro perspective, but you have a islwind where 4g rollout growing rapidly in china. a -- it will be interesting to the 4gt will happen but installations will be far more important at a positive driver. olivia: you said that there's a lot of attentional for upside

surprise on margin. where would that come from? historically,look 250 pointshas about of gross margin. apple doesn't change the form think of the s cycle, i that's the bigger story for them next year. margin expansion. i need to ask you about the apple car. there was a report that someone from fiat chrysler was hired. how does an apple car fit into the apple ecosystems? guest: the car category is not growing that much. it's not particularly profitable. margin on a car is about 17%. scarlet: i'm not sure what your comp is -- is it ford or tesla? guest: single digits is good. profitable, unit growth

is in the single digits, but it is very large. of the three, so it take0,000 per car, give or don't knowcars, i how apple gauges how attractive it is relative to those three factors. we will wait and see. it will take a long time. scarlet: they have a lot of cash. olivia: they have room for a loss leader. i'm a lot more interested in an apple cars and an apple watch. thank you very much. olivia: still ahead, ibm revenue falling yet again. ♪

olivia: welcome back to the bloomberg market day. scarlet: let's go straight to julie hyman for a look at what's happening in the markets right now. big news concerning chesapeake and its use of cash. julie: we have gotten used to seeing chesapeake on the bottom of the s&p 500. --ay, it still on the bottom i'm getting confused with my second one. chesapeake down about 6% right now. it halted its quarterly dividend, the first time it has done that in 14 years. they last halted during a previous energy slump in 1998. it was a $.35 annual payout and halting it will save the company

$240 million a year. they will also be selling some of their oklahoma assets. to figure out why chesapeake is doing this, look at my bloomberg terminal. --e is chesapeake this year it is down 50%. the green line's natural gas and it has been down sharply. chesapeake has been trying to migrate and get more into the business of oil exploration, particularly internationally, but we know what has been happening with the oil market, so that has presented a challenge even as it has tried to make the switch. the other stock i was thinking hasconsult energy frequently been on the bottom of the s&p 500 and today is near the top. , a companyhareholder called fast eastern asset management raised its stake in

from 19.6% to 21% and called for the company to sell or spin off its natural gas operation. we looked at the natural gas chart with chesapeake and to compound their problem, it's other big product is coal which has been suffering enormously. separation of the business is something the market is needing here. one activist has been pushing for a breakup of qualcomm with "the wall street journal" saying qualcomm is considering this option. they are conducting a strategic review that could lead up to a breakup of the company and its chip unit and packet unit. another analyst says this would be a bad idea, that those companies actually need each other. scarlet: julie hyman, thank you so much. let's get you a look at the top

stories crossing the terminal right now -- posted a deal to sell its maps unit to a group of german automakers. an agreement could be reached as early as next week. daimler would be the buyer. they would reportedly pay no you about $7 billion. the possibility of a greek exit from the euro may be back on the table, but not until next year. almost three quarters of economists surveyed by bloomberg say greece could be forced out of the euro i 2016. almost half say the package negotiated will prove to be too small. nike has given the ceo a $30 million stock grant to get him to stay for five more years. he has been the ceo since 2006. shares of nike are up 46% over the past year. big blue is marking 13

straight quarterly revenue declines. shares are down today by about 5.5% after the company reported second-quarter sales that missed analyst estimates. alex byrne got covers the company. is the job in danger because she was put in place to do the turnaround but no turnaround has taken place. alex: after this result yesterday, analysts and investors are getting impatient, let's say. shares fall with that today, the last time they have been down this much was when she tossed out the five-year roadmap . 13 straight quarters of revenue declines, so we might see those questions start to come up sooner rather than later. 100-year-oldis a company that does not like to change management. there have been 15 ceos.

focusing ons been cloud and analytics, but when you pull back the covers and look at what is going on with the business, you have these egg negatives like the brick down and chinas down 40%. these are markets were ibm was saying this is the next big thing for us, so big concerns. scarlet: it might be the next big thing, but they are not capitalizing on the opportunity. services is what ibm does now. double digit percentage declines for the services sector. what is ibm's main driver of growth? alex: they would say they are these cloud initiatives. you did see a bit of the change in tone from the ceo -- from the cfo on the call yesterday, saying we are not as productive as we should be on our services.

they are pushing to automate some things to keep up with the indian outsourcing companies, so they are trying to do things thatr, trying to do things cater to clients and trying to push these cloud initiatives. but it is not growing fast enough to make up for some of these declines. division they are calling strategic initiatives which encompasses cloud. how far away are they from that tipping point where growth in the new business can offset declines? out howey did not break much that is. it is 27% of their sales. what that shows is because it's growing so quickly, it gives you a feel for how weekly the rest is declining. as they continue to try to shift, that encompasses some of their mainframe cloud services, hardware and make ends, so

that's a big pot they are putting any stuff into. but that will be the tipping point and that's growing fast enough and outpacing with the old stuff is declining. watson? what about is that ever going to be a revenue generator? alex: i ask them every time and they have not given an answer. they have some big partnerships with johnson & johnson, but that's the kind of big question ?- is this a moneymaker is this something that will sell? it is a cool technology, but from the corporate side, we don't know and that's a question that should be out there for investors to consider. if they are saying this is the future of ibm, where is the money? all great points. thank you so much. very interesting.

scarlet: coming up on the they are market day, selling debt at the fastest pace in more than 10 years. olivia sterns should know, her former alma mater is one of them. ♪

scarlet: the building boom is not just happening for colleges. private schools are selling debt of the fastest pace in more than a decade. olivia: my alma mater is the latest school to join the room, seeking $50 million of tax exempt bonds and a big expansion on the upper east side. a lot of private prep schools are doing this.

but something universities do regularly. it makes a lot of sense because they are tapping into a municipal bond or get that is at a five decade low level. scarlet: taking advantage of low interest rates, they've got booming endowments and the need to update their facilities to make sure future olivia sterns -- it is specifically on 83rd -- it was built for about 480 students and they now have about 700 students. they desperately need to expand. a look at that -- that's olivia sterns in her barely sweatshirt. on a landline. i think i like happy to see one of my dogs. highnk of calling to get sat scores. remember when you had to call to get your sat scores? thature no teenager does nowadays.

i can tell you honestly that nothing until i had to anchor a morning tv show was as difficult 12, 13,fe was as a bearley.ld at there is no social life. the school motto is by truth and toil. that tells you everything you need to know. it's now about $43,000 a year. you need to take off now. i will see you tomorrow. we have much more coming up. ohio governor john kasich about to become the 16th presidential candidate. ♪

scarlet: welcome back to the bloomberg market day. i'm scarlet fu. ohio governor john kasich is officially in -- he is

announcing his presidential run and will be the 16th republican candidate. let's listen to his speech. from the very tips of my toes to the top of my head , i just love my wife so much. such a great partner. and such a great lady. [applause] so, i want to tell you that it's this whole business of the ?merican dream, isn't it to make sure we can all work to make sure this next generation is in a position of greater strength than what we received. i get my inspiration from the people who came before me. and i want to tell you about a few of the ones that inspire me. i would like to start with my uncle steve. uncle steve was a tough guy, the son of a coal miner, rough and

gruff and tell it like it is. he found himself at iwo jima. he looked around during that title -- during that battle, and he saw a lot of people dying. uncle steve was not a churchgoing man, but in the middle of all the violence, and death, he and the said to god if you will take me off this island, i will go to church every day for the rest of my life. and he did. and uncle steve -- [applause] when uncle steve came home from the war, the brothers all slept in the same room. a didn't have a lot. uncle george told me he would have nightmares and would speak in japanese.

and he told his brothers never wake me, never wake me from that nightmare because i don't know what will happen. let me sleep and wake up on my own. , he is hereorge today, right over here. he is 89 years old. [applause] i so love my uncle george. he's the patriarch of our family. uncle george was in the infantry and he was scheduled to take a belgium, england to but the division he was in could not all fit in the boat. so they asked uncle george to wait until the next day. that boat left england on its submarinegium and a

launched torpedo and sunk that boat and everyone on it perished. the next day, uncle george took another boat and landed in france and fought with great honor and returned home and became a guidance counselor and guided young people for the next 38 years of his life. what a man. [applause] my father-in-law, we call him joined the marines at age 17. he wanted to serve his country. but most important, my mom and dad. mom was a visionary. did not get the education.

her mother could barely speak boy was she smart. and if you think i have opinions, you never met my mom. .nd my father he was the mailman. they call him john the mailman. when we laid my mother and father to rest, there are countless numbers of people who came and said john the mailman, he watched out for all of us. -- ihey gave up so much wish they would have spent more on themselves but no matter what you told them, they were not going to do it because it was all about the next generation. they are the ones that have inspired me. and all of you here today, you are the same way. you've got those people who did so much for you. they are your heroes. they don't have to be famous. they are people you love and admire. that american dream is future --

is pivotable for the future of our country. there are a lot of people in america today who are not sure that american dream is possible, that that american dream is alive. and i can understand their concerns. was a kid, you went out and got a job and worked at that job your entire lifetime. care, yourr health retirement, and everything was good. today, you can be a 51-year-old man and one day after serving and doing everything the right way, somebody walks into your office and says i'm sorry, but we don't need you anymore. can you imagine that conversation? can you imagine that bad or that mom when she is driving home? they lose confidence, they wonder what their future is.

can they get another job and support their family? will anybody be there to help them? how about moms and dads today? they send their kids to college. many of these young people bringing up massive amounts of debt trying to get an education and they are living in the attic . mom and dad are wondering will they get a job? will they pay their bills? what kind of the future are they going to have? or, at the same time, we can think about what all the spear greatly and that is the problems of bad health. can i afford those expensive drugs i need to survive mark what is it going to cost me to get treatment, not for myself, but one of the loved ones in my family? will i be bankrupted and lose everything i have and everything i have worked for? it is a real fear.

or the fear of the synonymy of drugs. -- the tsunami of drugs. it's everywhere. the kids who are here, and don't do drugs. don't put that thousand pound pack on your back and keep you from your god-given purpose. all moms and dads worry those drugs are going to wash away our own neighborhood and maybe wash away our children. and how about those that struggle to make ends meet? people who say just work harder or pull yourself up by your bootstraps. i believe in all of that. some people just don't have the fortune many of us have. and they struggle. they struggle for a whole lifetime and they worry that can they rise? can they pull the rest of their family members of the latter?

the promise of america, and they worry about it, or how about if you are a member of the minority community? an african-american. -- the system i think sometimes doesn't just work for me, but sometimes i feel like that system works against me. you think about the troubles many of our african-americans still face today in a world where we have worked to provide equal rights and opportunities. sometimes, they are not so sure, and i don't blame them. or, how about all of us? we pick up the paper, it's chattanooga, it's for good, it's isis -- are we safe? are we going to be safe to go to

the mall? are we safe to leave our homes? these are the worries many americans have. have two tell you, as serious as these are, and they are very serious, we have had a lot worse. much worse in this country. think about it. the civil war. you remember reading about it? it's not just neighbors fighting against neighbors, but it was even family members fighting against one another and killing one another on a battlefield right in america. how about the racial violence we experienced in this country? the early days of television, when they put the dogs and the gas and batons on people of another color. wars. world many in our families never came home. leaving widows and children without a dad.

or the depression. ask your grandfather, ask your mom and dad about the depression. he would used to say go down to the store and get some food for the family and the guy would say we will put it on your bill. there was no bill. what it took for america to get through the depression. and you all remember that crystal clear morning and the horror we felt on 9/11. but guess what? we've always got through it because testing is what makes you stronger. it is the challenges that make you better. ihave lived through them and have become stronger for them and america has become stronger for them, and here is how we

have done it -- by staying together. not i dividing each other, but by staying together with our eyes on the horizon, with our eyes on the horizon about future. [applause] have been listening to ohio governor john kasich jumping into the presidential race. you can continue watching live on bloomberg politics.com. we want to bring in michael bender who has been listening to the speech as well. what i found fascinating is doing research on john kasich, i did not know much about him before this, but he has legitimate credentials at the state level, federal level and private sector. run through those credentials for us. michael: john kasich is a real player in this. he was elected as a state senator when he was 26 years old

and served nine terms. he ran for president in 2000 and did some investment banking with lehman brothers. right now, he's a very popular governor in the critical state of ohio. last one of the act for put him at about 60%. no republican has won the white house without ohio. a critical's component, but when you look at the latest polls in terms of how recognizable a candidate he is, he doesn't appear in people's mind. if you look at how he pulls versus donald trump, donald trump getting 24% rating. this is the top five, so let's see where john kasich shows up. he's not in the top five, he's not a top 10 -- finally we get to him at 2%. does this reflect that he's just not a known quantity with voters outside of ohio?

michael: i think that's absolutely right and is part of the reason for his announcement today. the first republican debate is hisst 6 in cleveland, in backyard. only the top 10 candidates are going to make that debate. john kasich desperately wants to be one of those 10. so he has timed his announcement late. he's the 16th republican to join the race. we've seen a number of candidates get a bump in the polls following an announcement. in a new poll today, he is 11. number 10 is chris christie. scarlet: that is a crowded field. michael: yes, it is. i'm not sure many people can name all 16, but it is a crowded field. part of the reason you see trump out front is a lot of people know him. he's out front with only 24% of support from her publicans.

john kasich is described as a political pragmatist. he decided to take medicaid money that was part of obama when most republican governors decided not to and angered the nra when he chose to ban assault weapons. how far does the political pragmatism get him in a crowded field in the primaries? michael: that's a good question. we see a number of candidates in this mold -- jeb bush, lindsey graham in the u.s. senate is another. rand paul, to a certain degree. these are candidates who are trying to expand the appeal of the republican party by reaching out to nontraditional voters, minorities and young voters. the trick with john kasich is his sales job. you saw a little of it in his speech. he's a midwestern, folksy guy, he can tell a good story, he's

the son of a mailman and the nephew of a coal miner who fought in world war ii. coming risk with him is off closer to jon huntsman and chris christie and being almost combative when pushed on his views that don't 100% align with the decor of the party. scarlet: that is something all the candidates have to get through during the primaries. thank you for giving us your take on john kasich and his announcement to join the race for the presidential nomination. here in new york, mayor de blasio is taking on uber. who will come out on top? we will discuss that next on bloomberg market day. ♪

scarlet: welcome back to the bloomberg market day. let's get a look at some of the top stories crossing the terminal. shares of united technologies falling the most in four years after the company cut its profit forecast for the second time since june. they say that it's otis elevator unit is doing worse than expected. shares of harley davidson rising by as much as 4% today. they posted profits that beat analysts estimates and reaffirmed its forecast. in april, they had cut their sales outlook saying it did not want to match its competitors deep discounts. are down 17% before today. if you are flying in or out of new york city, brace yourself for a travel nightmare. more than a thousand security officers and baggage handlers have voted to go on strike tomorrow. employees ofre

aviation safeguard to have had talks about joining a union. we will stay with the transportation theme because uber is squaring off against new york city mayor, bill de blasio. the app is protesting legislation that could cap the number of uber cars on new york city streets. uber has come out with that slamming the mayor and created deoption on the app called blasio which offers no available uber and has excessive weight times. all took no time at strike back. betty: i don't know if you read the op-ed by bill de blasio saying 2000 cars are being added every month in new york city because of what he calls the ride sharing services like uber. i don't want to travel anywhere and next 48 hours between the withe and what's going on uber.

i'm going to bicycle wherever i go. knew that this was coming between uber and the taxi companies. we have a guest in the next hour who represents the credit unions to tax theent money owners and gotten their licenses. they have sued bill de blasio and the government because they according to new york city regulations, it is not legal for a ride sharing service to be -- similar to a taxi. the taxi has gone something from a million plus down to $700,000. we introduced you as an uber customer. you were noticing the fallout. betty: this is just a small and

it and i'm not saying it is exactly accurate, but here i am in my car -- it took me one hour and 45 minutes to get in from new jersey. i'm surrounded by taxicabs. four of which were empty. this is that 8:45 a.m. scarlet: that should not be happening. discussionn this with uber and taxicabs in the next hour of the bloomberg market day. ♪

julie: we have some breaking news on apple ahead of its earnings -- the company is confirming a problem with all of its store services online -- problems with the icloud services on its website. the company is investigating and will update the status as a discovers what is going on. these comments are on its

website. we are going into the earnings report and apple shares have been slightly lower throughout the day. the big earnings report is after the close of trading. let's take a quick check on what's going on overall with the markets. we have seen stocks trend a little lower and without getting hit as we had a trio of negative earnings reports pushing down the index. joining me for options inside is the chief investment officer for recon capital partners. vixcally we talk about the but i want to keep on apple here because it's such a big company and very heavily traded, both in the options market and cash market. what are you looking for and how are you positioning yourself going into earnings? guest: the focus is going to be on margins, especially the operating margins.

they are hoping to stay above 40%. real growth is going to be in asia, so we have to see what that overhang has to do when they close their markets. we need to see apple watch take some traction. they are trying to revamp some things -- they acquired beats by dre. -- beats by you could even sell a put and buy a risk reversal. in this earnings season, it's a great way to start making that's -- start making bets because the s&p is up about 3.4 percent this year. half of those returns have come from the health care sector. speaking of a risk reversal -- outt: they already came

with their guidance. 130 fiveo buy the 125, risk reversal and play with the rest of the biotech earnings. that should help julie: lift all ships. julie:what do you mean when you say risk reversal? put,: you want to sell a collects that premium and once you collect that premium, you can buy a call let's further up and participate on the upside. you actually have some buffer on the downside but if it does go up, it's a name you want to own anyway. we will find out how you did and how apple did after the close of trading today. great to see you as always. much more bloomberg market day coming up. ♪

betty: welcome to the bloomberg market day. apple, microsoft and yahoo!

report today. we will get a preview of what to expect on these scarlet: giants. and taxi medallion drivers are fighting uber in court. betty: we will look at the storm of controversy in denver over a new television commercial for pot. scarlet: good afternoon, everyone. betty: let's begin with a look at how the markets are trading. we are seeing a big selloff going on right now in stocks, drag down by earnings. you can see the dow is pretty much trading near its intraday low. the same for the snp. we see a slight -- same for the snp. one of the earnings that drag wn