picture. scarlet: apple posted biggest third profit ever -- third-quarter profit ever. apple investors want to know what is next and they are punishing the stock this morning. matt: las vegas could be on the verge of winning its first major pro sports team. they apply for an nhl expansion franchise. matt: good morning. let's get straight to our breaking news -- june existing home sales are out and julie hyman has the numbers. julie: sales of previously owned homes are rising to an eight year high in june, five point 49 million on an annual basis. that is a 3.2% increase month

over month from the revision which was a little bit down of that. this number is for the month of june. closings, 4.9 million annualized rate with estimates at five point zero million. it looks like stocks are climbing to the highs of the session as we get these figures. we have seen the housing numbers improving and pending home sales have been improving so existing a lagwhich have a bit of have been catching up with the pending home sales numbers but the numbers are strong. matt: that's an eight year high. scarlet: this is the biggest part of the housing market compared to new home sales. matt: it's the part you care about. if you are a homeowner in america -- scarlet: people are saying yes. matt: let's get straight to a

market check and see if that expect this -- if that affects the indexes. we continue to see red arrows in the marketplace but only slightly. you would really call this unchanged. the nasdaq is the big loser. substantial considering what is going on with apple. if you want to look for pain, it can be found in commodities. the index is at a 13 year low in his dropping 1% this morning. gold is continuing to sink. nymex crude is trading below $50 per barrel. we are up to our eyeballs in oil. matt: i am on the demand side of it. scarlet: because you drive a gas guzzling vehicle.

let's get you some top stories. know whethert to the hits can keep coming for apple. shares of the company are down 5% in early trading after they reported iphone sales climbed 35% of that missed analyst estimates. a forecast given up short. sales of their new apple watch were less than what analystss expected but tim cook says the company is pleased. >> sales of the watch it did exceed our expectations and they trailingspite supply demand at the end of the quarter. insight,ou additional through the end of the quarter, the apple watch sales figure was higher than the comparable launch time of the original iphone or the original ipad. scarlet: he says one bullish sign is 73% of old iphone users have not upgraded yet and sales in china doubled.

the country's biggest home-improvement chain is getting bigger. home depot is buying interline brands. maintenance and repair products. five people are being charged in connection with that damaging cyber attack against j.p. morgan last year. investigators say the hackers were not detected for two months and information of 76 million households were stolen and suspects were arrested in florida and israel but one is still at large. big that is making a on a drug for alzheimer's disease and we will learn more today at an industry conference. it could be the first market treatment to keep alzheimer's from getting worse. its estimate of the drugmaker is spending hundreds of millions of dollars to develop this. those are some of the top stories. scarlet: we want to get back to housing wallowing breaking news and how the sect to her's

recovery fits in with the narrative of the broader economy. on this chart, job growth is in orange and housing starts in purple since the 1970's. two used to move in lockstep but it has now widened extensively. matt: for more, let's bring in michelle meyer, deputy head of equities. i would think we are due for a big jump in housing starts. is that the way you would read it? >> it's a pretty bullish chart for housing which shows that the economy is actually recovering at a pace that is faster than housing. you can look at that with the labor market. job growth is picking up and we start to see signs that wage inflation and income creation could be picking up. it means housing has lagged and

there is a further upside ahead. it is a gradual recovery but there is further upside. scarlet: what does this chart suggest about the cyclical nature of housing? >> i think it clearly points to the overbuilding or excess we had seen during the bubble warehousing rose despite the fact that the economy was in a recession. continued to reach levels that were high relative to the state of the economy. that has reversed so you had to have that for some time but we made up for that overshoot and we are at a point where you can see more normal housing market whatever that means. matt: maybe it means people who are bearish will say that millennials will not buy houses. they said that about automobiles but it turns out to be the opposite. is it a delayed response and houses? >> one of the big distinctions between auto sales and home sales is credit.

if you look at a

with a strike. attendance will walk off of their jobs at jfk and the guardia. the union representing them say -- the unionir representing them says they want their pay raise. amazon is expanding home services program to 15 cities. it is a challenger to user review sites like yelp and angie's list. customers can use it to find people to paint their homes, sell home theaters, or get guitar lessons. --march, they opened in chicago and atlanta are being added. alibaba sells chinese shoppers everything from books to medicine, but this is a first -- an unusual promotion, sperm

banks. they were offering to pay man up to $800 for donations. more than 22,000 signed up. chinese media reports the country has more than 50 million infertile couples so they need the help. those are the top stories with no comment from me. rare, matt that is miller. julie hyman with the stories on earnings. reported results and 26 of them are not apple. math. very good thank you. linear technology, a chipmaker, earnings and sales missing estimates. the company also saying sales will decline sequentially this current quarter due in part to weakness, not just in pcs, which , and this expected

combined with apple is creating concerns broadly for technology earnings. i also want to look at a company technologies, and oil services company that is trading at its lowest in five years. the company says earnings fell 15% quarter over quarter because of a continued decline in the north american land drilling market. we are also looking on the plus side at chipotle this morning. the stock fell sharply in after hours after same-store sales missed analyst estimates. it has turned higher. the company has said things are trending higher this quarter and announced a share buyback. if you look at the bloomberg terminal, you see the trend we have seen in cop will sales. -- comparable sales. falling thisgains

quarter. we have seen a slowdown in the rapid growth. and we willnk you, be discussing chipotle later in the hour. you would think record profits and sales would drive a butany's stocks higher, rules are different when it comes to apple because forecast trailed investments -- analyst estimates. for a look at where the company .s headed, we'll bring in dan let me start with you, simply beating estimates is not enough. is that enough -- is that fair? dan: they are held to a different number -- standard. whisper numbers were 49. they came in at 47.5. guidance was softer than expected and you will see a bipolar view on the street. --na with 100% plus growth

does that continue, there's will say you are getting into the softer period, and that could catalyze growth. -- is becoming a divisive issue. was reassuring investors, saying wait for the update. i know a lot of kids who have a 5s and they are waiting to buy the 6s, and why not, it is only a few months. that is typical with apple. china,re concerns that where the margin growth should be, is a space to watch. >> china is the greenfield opportunity for apple. in the u.s. and western europe, we're well penetrated from a smartphone perspective. the concern is twofold. the second part is we heard

different metrics on the quarterly calls relative to the previous ones, talking about shares of people switching from android. we were talking extensively prior to the last two quarters with the greenfield opportunity is, we do not care about our share and now the tone has changed, saying look how many people we have switched from mandrake to iphone. those factors combined seem to be suggesting maybe the market is not accelerating by any stretch and you combine that with the china macro issues, the numbers not look so great. it is surely not the apple watch that has investors concerned. you see this with the iphone, the first iteration -- consumers are smart enough to know you have to wait until the second

generation unless you are an early adopter. i agree -- there is analysis paralysis. of the distribution issues settled, i think you will see that ramp in the next few quarters. at this point, china is a high-octane fuel. i think it is seeing forests through the trees. we have seen this. we go through product cycles, and the nietzsche -- knee-jerk reaction -- there is a massive buying opportunity. havef iphone customers upgraded to 6 or 6 plus. this is a huge opportunity. i view this as a buying opportunity because it is a poker game at this point and i think you'll see a strong few quarters ahead. scarlet: if it is a buying opportunity, a lot but getting in because of the cash they are getting back from the company. anand srinivasan how has the investor base evolves? anand srinivasan --anand: there

is a significant portion of investors who wanted the dividend component, the stewardship of capital, particularly with apple where cash and free cash flow generation is a big portion for them. historically, from a buyback perspective, empirical evidence suggests that in tech land, companies are not great at buying back stocks. scarlet: whether it is timing or anything else? timing, how much they are committing -- historically, there has been mixed evidence. it is great that companies are buying back stocks. there is capital return in place, but the empirical results on the return is pretty mixed. scarlet: google posted blockbuster earnings this last week, but otherwise results we have seen this week have been lackluster. are we at an inflection point when it comes to tech earnings

and the growth they can function --they can generate? dan: you see growth split, non-enterprise, consumer and social, but even with enterprising consumers, you saw microsoft, big data, sever security, cloud -- those are traditional companies where it is a mount-everest like climbed to show growth. &a andk it will spur m investors are trying to figure out which of the names you bet on because growth is few and far between. i think apple is a golden opportunity if you believe in the cycle. scarlet: dan ives, thank you so much. and our very own anand srinivasan of bloomberg and television. matt: still ahead, if you think only computers can be hacked, think again. why your car might be next. scarlet: a gigantic smartphone

with wheels. matt: that is what it is turning into. scarlet: we will be back. ♪

developersoftware prove they can remotely seize control of a car. they were able to disable the accelerator and breaks even though they were 10 miles away. less important, they turned on the radio, blasted the air-conditioning. they posted their picture on the control unit -- the display unit. scarlet: to freak out the driver as well. matt: who is their buddy, a writer or editor at "wired." it shows you what is possible. with a lot of modern cars, you can take over the steering. unfortunate, a lot of it has gone to computerized steering.

scarlet: is there any way to turn that off -- your responder, transponder, whatever? matt: not without turning off the car. it is something that needs to be dealt with and it will need to get worse with economist driving. scarlet: driverless cars -- it will make me think again about putting my kids in driverless cars. att: that is my i want to buy fully analog car. scarlet: what is the last one out there? matt: they're difficult to find, even without an electronic fuel injection, no abs, no traction control. scarlet: we have more coming up as matt continues to look for the analog car. here is the man behind the dodd frank law. ♪

matt: welcome back to "bloomberg market day." i matt miller. scarlet: i am scarlet fu. new: julie hyman is in the

sewer with headlines. julie: we have about 15 seconds until the numbers come out but i can sell you that oil is falling below $50 a barrel and we are seeing ample supply in the market. we will see if the crude oil inventories do bear that out. looks like we are getting them here. crude oil inventories up nearly 2.5 million barrels, 2.47 million barrels to be exact. 35,000 barrels. looks like gasoline inventories fell about 1.7 million barrels. numbers we are getting. oil build in crude inventory is larger than analysts had estimated. they have been looking for about 1.5 million barrels and instead we are getting one million more than that. i am looking at oil on the screen behind me and it despite that build in inventory, we are seeing a spike although it looks like they have come back down from the spike. we are seeing oil prices still trending ready sharply lower,

of 1% and looks below $50 a barrel. below $50 ading barrel. let's get a check on the rest of the market with u.s. equities. falling right now but not by a lot. nasdaq feeling that the most down .6 of 1% because of apple and microsoft. matt: i love your terminal screen. how do you get those lines? can you bring up scarlet's terminal? they can bring up your terminal -- scarlet: no, they cannot do that. i want to show you gold. it is down for a 10th straight day, the longest losing streak since 1996. goldman sachs protecting further decline and check very same that gold may dip below $1000 for the first time since 2009. no love out there for gold right now. matt: if you show me or give me lessons, read the top stories. scarlet: let me do that.

we will start with housing market, picking up speed last month. sales rose to an eight-year high and increased more than 3% to an annual level of 5.5 billion homes. the median price, $236,000 up 6.5% from one year ago. take earnings reports this morning. andddition to apple microsoft, boeing's cash flow surge during the second quarter thanks to increase the liberties of the 787. earnings beat estimates and the loweredloyalty -- profit forecast for the up. coca-cola beat estimates, the world's biggest beverage company increased prices and reduced expenses. they set -- they have helped cope offset falling sales in u.s. and stagnant sales overseas. matt: consumers may be gawking .t chipotles prices they post a second quarter that barely missed estimates. they raised prices last year to offset the higher cost of these. in april, they said prices may

have to be raised again. investors do not see more he do. the shares are soaring. company also announced a share buyback and expressed optimism about the current quarter. those are some of the stories off of your bloomberg terminal. coming up, and ice hockey team in las vegas. we will tell you why the nhl might expand its reach to sin city, which does not have any major pro sports team or ice. raiseles may have to prices again to offset food costs, but investors are not gawking. we showed you shares surging earlier in trading because of that buyback. we will talk about the story. saudi arabia trying to fix the housing shortage. he will take you inside the construction sites building homes for the poor citizens. scarlet: before we get to the next story, i want to pull up the bloomberg terminal because jarrett says we now can and we can show everybody what we are talking about with regards to major indexes. the yellow line is the s&p 500

-- sorry, the dow industrial, down .3 of 1% and the white is the s&p 500, lower in the last seconds and the nasdaq, under the most pressure all day, is down by two thirds of 1%. greati think it is a screen. what i like, and it may be too wonky for the average beer, but i like the lines are thicker. you can give me a little lesson. scarlet: let's move on, matt. president obama signed the dodd frank bill into law, and it changes the way banks do business even though many roles are waiting to come into effect. republicans are eager to roll back many of the provisions. former senator chris dodd co-authored the law and spoke about the legacy this morning. it is taking longer than we would have liked. it is complicated and i know a lot of frustrations with financial institutions and if there is one thing they love

more, it is certainty. when you have as long as it is taking for the will making to get into place, that has been frustrating and i appreciate the frustration, but i think most would agree that it makes more sense to try get it right then to try and get it pick. the frustration is tempered by the fact that i think they're doing a good job and taking their time. if i could wish anything, i was sick and move along quickly. tom: you and your father represented the bank of greenwich, connecticut, for years. is he your frenemy? are you want conversational terms? >> absolutely. i run into them on a number of occasions and they have had frustrations with costs associated with implementation. i'm not going to tell you which of the major banks it was the call the ceo and said i thought it would never make the call, but i want -- but i'm a better bank today because of your law. i have lower leverage, better capital, more liquid assets, and landing is up 30%.

months of generating jobs, this is working. not to say it is perfect, obviously, to have a job of that magnitude would clearly be time going down the road and we have overreacted to or under reacted too. maybe it is an unfair way to characterize this, but have people on the so-called left same we do not do enough and people on the right thing too far. if we get those complex, i expect we got it about right. transparency, the consumer protection bureau is doing a very good job and too big to fail over with. we believe that to be the case with the funeral plans, the stress test, and authority. we think we have done a pretty good job and time will tell, obviously, whether or not corrections are needed. in that it is not just secretion of writing the regulations, but the oversight over time, 10, 15 years down the line. can you hold onto that? >> she cares about this and is

very knowledgeable. one of the problems we have, and i say this respectively, most members of commerce could easily beat secretary of defense, president, but very few think they can be secretary of the treasury. we talk about improving the learning curve on this and education in terms of financial matters. she actually brings a great deal of knowledge to the subject matter. clearly, i would have preferred self funding at the fcc. we have self funding for the regulators and commercial banks, but when it comes to investment banking and so forth, we do not. i think that is a mistake because you can starve agencies. you have seen in the federal trade but i think elizabeth is a good person. brendan: obvious to come with execution of the law that bears her name, the biggest challenge is what they call the blob in bc -- the financial lobby. how do you work against the power of that that is constantly working to ship that legislation moving forward? are great question and you

exactly right. i was involved in the health-care bill but the health care bill has financial insurance and pharmaceutical industries. they like affordable care act. i do not have anybody on the other side of frank -- besides frank on the financial sector who loves the bill. i think people are respecting it and doing things should be doing, so it is difficult. when you get into conversations, this is rally -- this is rather archaic subject matter. i say this speculate, it is not very high when it comes to members of congress. they do not come out of that world. there are lawyers, other people from various industries and very few run for congress to come out of the financial area. understanding this is, kitty, so we have a significant job and that is why elizabeth warren is important. other people like her or do not like her is not the issue. they could -- she could not care less if you like her or don't like her but she is knowledgeable about the subject

that and i would hope the rhetoric would, down. they are wonderful people who work in the sector. they do not need to be maligned in my view but we need to protect this law. former: that was democratic senator chris dodd speaking on the dodd-frank law. matt: now that we have dodd-frank, the end of big to decisions. we will never have to bail out the big bank again. still ahead on the "bloomberg market day," health care stock used to be investment safety in a storm, but the affordable care act changed all of that. details, coming up. ♪

matt: welcome back. we are more than one hour into the market day. scarlet: we will get you caught

up on the action in the world and we will set up in europe and london. second way ofng a declines for european stocks. if you look at the stock i could -- at the equity benchmark for the region, every industry group the commodity and producers and technology companies that have been meeting the losses. why? it is about those falling commodity prices impacting minors and in terms of tech, apple, having an impact on companies in europe. that supplies the world's most viable company like arm holdings for example. that take a look at the map. a little bit of a mixed picture across the region but the 100 leading to the crime because of the minors and arm holdings dragging down that benchmark. the academics stock exchange still closed today. you have greek lawmakers voting on a package of measures that

need to be passed in order for greece to get the next bailout. that stock exchange not going to open at least until the vote happens and due to happen at midnight often's time later today. time later today. major currencies, a lot for pound bombs to be happy about in the bank of england. julie? julie: thank you. if you look at stocks in the united states, declines across the board, largely on the back of earnings reports. if you take a look at the i map, you get an idea of what is going on, mostly because technology is down, 1.9%. the big drag from big tech reporting their earnings. we are seeing again in the utilities, state health care and financials also higher but it is that big take -- tech weight dragging things down. apple knocking four points in itself off the s&p 500 today because of that take weight in

that index, down 5% after those apple iphone shipments missed estimates. microsoft down, in particular, sales to corporations of the window products not as strong as it had been estimated. idec a big drag on the s&p 500 after the company's alzheimer's treatment did not show as positive results as analysts and investors have been looking for. i also want to talk about old once again today. that is because it is lower. gold0th straight day that is lower. the longest losing streak since 1996. jeff curry over at goldman sachs the head of commodities research says we could see a drop below $1000 for the first time since 2009 and he is not alone. a lot of bearish sentiment right now. if you look at my terminal, holdings in gold backed exchange traded product down for a fourth straight day. you can see the decline here and we have seen them fall almost every quarter since their peak

back in december 2012. i mean, just incredible to me, day after day the same story we are telling with regard to this terrible sentiment on gold. matt: it is a trend, right? it is over $1000 an ounce, let's keep that in mind because when i moved to london 10 years ago, it was like 300. scarlet: steph curry saying it will go below one thousand. julie hyman, thank you so much. over in asia, the shanghai composite added .2 of 1% and japanese stocks fell because of a stronger yen on the heels of yesterday's earnings report. one big story out of the region is china's slow down and the recent tremor in the markets which has reverberated their earnings around the world. let's check in in hong kong. >> the aftershocks in china could be felt for the next few weeks with the bulk of the

world's biggest bread center to report earnings. china has been among the fastest-growing markets in the past decade for cars, luxury goods and raw materials. many of the companies have taken a hit. french distiller yum! brands burberry and iron ore are around the figures in china. companies and investors are betting for a rebound. fueled by china's demographics and market from the policies. let's get you a look at top stories. , a takeoverh at&t directv and it has cleared. scarlet: tom wheeler is urging fellow commissioners to approve the 48 billion dollar deal. at the same time, we'll is demanding that the company do more to spread bond then. they could vote on the deal this week. goldman sachs says the worst as if to come for gold. as we just mentioned, the head of the commodities research team says prices could fall below $1000 an ounce for the first time since 2009.

old declined to the lowest level in five years and there is a more positive outlook on the dollar which means less demand for gold. a pair of lame ducks got together on "the daily show." jon stewart and president obama. the president obama ordered -- joked he would order an executive order to keep him on the show and he commented on donald trump's white house bid. president obama: i'm sure that republicans are enjoying resident trump -- jon stewart: anything that makes them look less crazy. scarlet: it was the president seventh appearance in the 16 year brent and john stuart and his run in two weeks. i was stuck in traffic yesterday because of the president's motorcade. matt: ky, obama. right? speaking of thank you, obama, health care loss of always been considered -- health care stock has always been considered a state sector until now. they are among the best

performing stocks in the current bull market. you can thank the affordable care act. mike regan has written all about this, so we think because we are such current in the 24 hours news cycle, we think of health care as rose's stocks but has not been that way. mike: that is the transition going on but if you look at historically at the share of health care stocks in the s&p 500 as market cap, -- scarlet: let's pull that up ago on. the: we are at about 50% of s&p 500 that outperform for about five years now. the s&p 500 that outperformed for about five years now. if you fall back on the traditional playbook, they are up -- matt: they're up 25% this year. that is right, the one your, 12 month chart. mike: 12% for the one year date, it does know that old playbook into the trash for the moment -- thatthat level

proportion of 15% of the market s&p 500 -- matt: if we could bring up ok -- we don't have time. about to appear, 50% of the market in health care stocks, the only time it has been that high in the past is in the nasty bear markets in 2008. scarlet: we are not in the bear markets right now. matt: what should say it might be an indicator of their markets. one health care stocks are large portion of the s&p 500, it is an indicator that you are in the bear market. arenot now, -- because they different kind of investment. mike: they look at the -- now they look like the best place to fight -- to find growth. it is one of the only groups with double-digit percentages growth forecast coming through. scarlet: because of that it is pricier. mike: about 24 times earnings which is the highest since the days. -- dotcom

the question is, has a gone too far? if we do have turbulence in the eliminated this as a place to hide out now? some of the people i have spoken to pointed out obamacare and said there is still a lot of fun way for growth or help stocks. the demographic plays a role, boomers,y -- baby taking more drugs -- legal drugs this time. matt: they could be taking both. if are adults. they do what they like, right? mike: right. there are reasons to be bullish about them. scarlet: what about one way for m&a? humana, and then, cigna, there is speculation on probably every biotech stock being either a suitor a partner. that is obviously part of the last leg. scarlet: mike regan, thank you so much on how health stocks

have gone from defensive to momentum. matt: very interesting. to think, they must stay defensive because even in time support economy, you still need your drugs. scarlet: absolutely. coming up on "bloomberg market day," the nhl has 30 teams and looking to add two more. is really getting too big? can they afford it? ♪

sin city is one step closer to landing one professional sports franchise. the nhl received applications from las vegas and quebec city for an expansion before the 2017-2018 season. joining the league comes at a big price, they have a $10 million application fee and overall expansion p.m. $500 million according to "the seattle times." us expand,king to

what is different this time? >> the nhl expanded in the southern reason in the 1990's. they put teams in phoenix and atlanta. scarlet: that did not work out. >> that did not work out so up. when you think of hockey fans, you think of the northern united states and canada. gary wanted to make this an entire country league and he did that and some of the teams did not do very well. quebec,k it team from winnebago, and the team they put in atlanta moved back to canada. if you look at the lowest teams in terms of attendance, caroline is right there, florida is right there, phoenix went bankrupt a couple years ago. then 1990's expansion was not a success but they seem to be doing things better. matt: is it possible that people grow up surfing and playing in the sand do not play ice hockey very much? eben: i wonder why that happens. matt: people do not care in general about ice hockey. scarlet: whoa!! matt: how many people watch the

stanley cup? like seven? it is really little. eben: that stanley cup does not get the attention the world series does. matt: and the regular season. growing its face. there are sports fans watching the nhl playoffs, especially, asks garlic can attest -- mlb has seen a drop off from younger generations. smarter. is doing it las vegas is an interesting experiment. scarlet: quebec city makes sense but las vegas is in the middle of a desert during a drought. matt: and no other pro sports teams. iowa was an interesting experiment. hesitant to put teams in las vegas. it is cautiously -- it is partially a concern about

bedding and not be around faces. he would just get people in visiting and you would not have season-ticket holders. nhl is the first to make that step and say, you know what? let's give it a shot. the owner of the team, if application is approved, he already has 13,000 season ticket application commitments already. it could be a major success. scarlet: this is all about the legacy as well. thank you so much. our residents bloomberg news sports reporter. look atming up, we will white investors are so bullish on support way, even after an earnings miss. stay with us on "bloomberg market day." ♪ -- why investors are so bullish on chipotle.

matt: 11:00 a.m. here in new york. scarlet: investors are hungry for chipotle. shares rise the most in a year today.

matt: the small bank that deals with big money. a virginia community bank has become the goto lender for hundreds of millions of dollars in campaign cash waiting for candidates to spend. scarlet: furniture economy surging. is there a carryover effect? we was big with a ceo of one of the biggest online richard wei e places. matt: good morning. i matt miller. scarlet: i am scarlet fu. matt: let us take a look at the markets right now. we see losses continue across the board. there is a brief recovery in gains. now we are back down 30% or 60 point in the dow