cofounder of jet.com. doddnd we will hear from b about his namesake bill. is taking a gamble with an online class in poker theory. we will tell you about it. welcome to "bloomberg market day ." i'm mark crumpton. talk about m.i.t. online gambling. first we want to get you a look at the markets right now. the s&p 500 posting the first back-to-back decline into a half weeks. the nasdaq is clearly the worst performer. tech stocks have been leaving the broader market up.

look at where you see the pain. gold at a five year low. it has been a huge weight on the index, falling to a 13 year low. goldman sachs says it could fall below a thousandollars for the first time since 2009. we will keep an eye on that one as we get closer to the 1086 level. have betters, we than expected existing home sales today supporting the case for the fed to raise interest rates. that is dollar positive. what is getting punished? commodity currencies. you can see the u.s. dollar versus the major currencies and of course the worst performer is the brazilian rail. the norwegianes, krone, the australian dollar, also getting hit.

the stronger dollar and the continued slump in commodity prices. mark: taking a look at some of the top stories. takeover of baker hughes has run into a roadblock. u.s. justice department antitrust lawyers are concerns of deal would lead to less competition in the oilfield services industry. there has been no decision whether to stop the takeover. halliburton has proposed selling off assets to other companies. inventories rose last week. forecastedd stockpiles would decline. its recovery has slowed down here as there have been signs the glut will persist. the strong u.s. dollar putting pressure on oil and other commodities. years, the housing market was a big part of the problem as america try to bounce

back from the recession. new figures show it is part of the solution. sales of u.s. homes climbed in june to an eight-year high. the national association of realtors says closings increased by an annualized rate of 5.5 million. that is the best pace since 2007. hiring and pay increases are sparking the recovery. mortgage rates are helping those shopping for homes, they face a problem, supply. sales are up by 10%, but listings have risen by 4/10 of a percent. home depot is getting bigger. it is buying another brand. interline does operations products. among the owners, goldman sachs. mark: the greek debt crisis is a cloud on europe's horizon, but

one portfolio manager thinks the future looks bright. about it earlier today on bloomberg. >> this is a really good time to be looking at european financials given where we are in the earnings cycle. another positive sign, the central bank is stepping up his support for the country's banks, raising its liquidity assistance by billion dollars. new yorkworkers at city airports have decided not to go on strike. this just breaking. they have reached a settlement starting tonight at 10:00 p.m., including a thousand baggage handlers, and wheelchair attendants at jfk and laguardia. warren buffett says he did not buy his own greek island. they boughtports

the island of st. thomas. the real estate agency indicated the report may be premature and claims it will sell an island to him sooner or later. scarlet: wishful thinking. with all of the criticism of dodd-frank, what do its founding fathers have to say about the reality of the new bank rules? chris dodd sounds off. mark: m.i.t. wants to teach his students how to earn more money in poker. a new online course. banking on european financials. one manager says european stocks are attractive. all that and much more coming up on "bloomberg market day." mark: jet.com has officially launched. site,mbers only shopping a crossover between costco and amazon, has not had trouble attracting investors.

200 $20 million before it had a single customer. scarlet: attracting business to turn a profit could be more difficult. lori isder and ceo mark live with emily chang right now. we are going to send it over to you. you just launched yesterday. can you give me specifics on how it is going? >> it has been a wild ride. asterday we had almost million visitors to the website, well beyond what we were planning. people are running around today. emily: how many bought something? : well over 10,000 people. are the brainchild behind diapers.com. i'm a new mom. i get my diapers from amazon. if you get a six month

membership, we will prove to you of will save hundreds dollars relative to prices you will find anywhere. emily: how do you do that? marc: we don't make any profit on the transaction. it is a third-party marketplace. we get a commission from merchants and we give them back to the consumer. we make all of our profit from the membership fee. thatilt this technology pulls shipping costs out of the system by changing place in real time on certain items that are smarter to buy than others based on the marginal cost of getting those products to you. it is this dynamic pricing engine. you're shopping for a third thing, the prices are much better than others because the cost, our ability to get those to you is chipper. -- is cheaper. you guys are being

pitched as the startup that can kill amazon. how do you respond to that? what is the number one advantage that would make that possible? we don't see amazon as a direct competitor. we see a $300 billion market in the u.s. we think there is plenty of space for multiple players. 600 million dollar valuation before you have a customer. investigators -- investors think you have a potential. our things to euphoric in the technology industry right now? in terms of the valuation, i think it was fair. a tremendous is upside potential and the risk investors are taking war that upside. buyingmily: when you are

some of these items from retailers, how do you offset those costs? is going to bet hundreds of millions of dollars to bridge to scale. that is part of the game with e-commerce. it is a scale game. that is why there is no number two player. amazon is 10 times the size of the second largest competitor in walmart. scale game and a requires a lot of capital and investors to believe in the team and the idea. explain how shipping works. all we want is immediacy. sure. you're probably not the customer. $50 a year and you're going to save hundreds of dollars. we will get you your everyday essentials like your diapers, toilet paper. overnight or in two days.

get that fast. the other products 2-5 days. the type of person that wants to pay a premium for getting faster delivery, that is not jet. it is about spending money. emily: who are your main suppliers and shipping partners? marc: we stock some items in our warehouses. the majority of the millions of products we sell come from third-party partners. merchants like barnes & noble, egg, lenovo.w it takes a long time to scale and that is why amazon is the only player that is that big. amazon does not turn a profit. what is your view on profit going to be and how long before

jet.com turns a profit? marc: definitely a long-term game. and so -- emily: like 20 years? marc: our plan is five years. $20 billion by 2020 and breakeven. emily: all right. it out.g to check i'm going to compare prices on diapers and get back to you. mark: thank you. scarlet: emily chang has to do her research. mark: she does. maybe right now. behind: he is the dodd dodd-frank. talking about his bill five years after it became law. ♪

mark: welcome back. i'm mark crumpton. here is scarlet fu. scarlet: you're going to start us off with the big movers. we've got to begin with the behemoth, apple. olivia: actually a disappointment. not in terms of profit and sales. the disappointment was with iphone sales specifically. up 35%. 48lysts were looking for million iphones. instead they only got 47 and a half million. also disappointment around the revenue forecast for the current

period. those indicators sending the stock a little bit lower. at one point, the stock fell the in over twole years. if that makes sense. year to date, apple doing very well, up about 13%. cookhing interesting, tim talking about the rate at which ching from swit android to apple. every once in a while they are aware of become petition. let's move it on to chipotle. u.s. areores in the not stocked with that delicious pork taco filling. customers aren't happy. topping estimates in large part because they are raising their prices. up about 6% for the quarter. same-store sales were

disappointment and they were lower than they were a year ago. that was shy of 5.8% estimated. the stock is up 8%. i want to look at caterpillar. thispillar, we think of global bellwether. it is not looking good. shares off light 3.5%. the equipment sales slowing by about 5%. the global number down 14%. a lot of weak demand and not a lot of driving the needle and upally, home depot, shares 7/10 of 1%. this on news home depot made an acquisition, buying a company for about $1.6 billion. the move is trying to get home depot into the professional

contractor market so they can sell supplies to customers in building and maintenance. home depot looking for new avenues of growth, trying to do more online because they are selling less in the big-box stores. shares are up year to date. back to you. scarlet: thanks so much. mark: we know what she does not like from chipotle. scarlet: she is a vegetarian. stories atof the top this hour, the minnesota vikings deal with radisson is ending 10 months after the company suspended its association with the team. that came after adrian peterson was indicted for hitting his four-year-old son with a switch. the latest decision follows the vikings decision to restructure his contract. he was the nfl most valuable player in 2012. of government's pursuit barry bonds appears to be over.

they are dropping the last piece ,f its long case against bonds convicted of obstructing justice in connection with a case on performance-enhancing drugs. the u.s. says it will not ask for a review. the record crowd at the rose bowl in pasadena, california, and not for a football game. the massive turnout was actually for soccer. barcelona 2-1 victory over the los angeles galaxy was seen by more than 93,000 fans. the biggest crowd for a club soccer game involving an mls team in u.s. history. barcelona is preparing to defend its champions league title. those are your top stories at this hour. scarlet: yesterday was the five-year anniversary of president obama signing the dodd-frank bill into law. are waiting toes

go into effect. republicans are eager to pull back many of its provisions. chris dodd spoke about his legacy this morning. longerd: it has taken than we would have liked. a lot of frustrations. lending institutions, financial institutions, they love certainty. when you have as long as it has taken for the role making to get into place, that has been frustrating. i think most would agree it makes more sense to try to get it right then quick. the frustration is tempered by goodact they are doing a job and taking their time to do it. if i could wish anything, they move quickly. >> you and your father represented bankers for years. frenemy? dimon your are you on conversational terms? mr. dodd: absolutely.

they've had frustrations with this. cost with implementation. i'm not going to tell you which of the major banks call the sin -- called us in. said they had better capital, more liquid assets, lending is up 30%. now 64 months of generating jobs. this is working. not to say it is perfect. when you have a job of that magnitude, there will be time down the road where we may be over reacted. i have people on the so-called left to say we did not do enough. the people on the right say we went to far. there is greater stability today. greater transparency. the consumer protection bureau is doing a good job and too big to fail is over with. we believe that to be the case

with the stress test, so we think we have done a good job with this and time will tell, obviously, whether corrections are needed. it is not just in the execution of the regulation, but the oversight over time. is elizabeth warren the right standardbearer? mr. dodd: one of the problems we have, most members of congress think they can be secretary of state or president. very few think they could be secretary of the treasury. we talk about improving the learning curve on this, and the education in terms of financial a great dealbrings of knowledge to the subject matter and clearly i would have self funding. we have self funding for although the regulators of commercial banks. investment banking, we don't.

that is a mistake. you can starve these agencies. elizabeth is a good person. scarlet: former senator chris dodd this morning. isk: coming up, m.i.t. taking a gamble with a new online class in poker theory. that story is next. ♪

m.i.t. is rolling the dice on a new online course that teaches students how to be better poker players.

the

this applied very common knowledge of data is key to whether or not -- lose your shirt. i don't know if that is a poker phrase. you are looking at the numbers and the numbers don't lie. scarlet: mark is out, we will be back with more of the bloomberg market day. ♪

scarlet: welcome back to the bloomberg market day. let's get straight to our top stories.

an african-american officer from arizona is now the new top cop in ferguson, missouri. on draper anderson -- andre anderson takes over the police department. foundral investigation systemic racism in the city's police force and courts. startt says it will closing some of its 24-hour supercenters for a few hours each night. the retailer wants to use time to better stocked shelves and organize doors for the peak shopping rush. effect about 40 stores. about two dozen of its 24-hour locations already had hours reduced this spring, and more stores will go through the process. american drivers put a record number of miles on their cars in may. this means there could be another record set the summer. credit goes to an improving economy and cheaper gasoline. more than 4 million people have gotten jobs since last year which means more daily commutes. 007 is back.

>> why should i trust you? >> right now, on your best chance of staying alive. scarlet: daniel craig returns for "spectre." the full-length trailer released today. there are some spectacular chase scenes. the movie comes out november 6. coming up in the next half hour, oil is trading right around $50 a barrel. we will look at how much further it could decline as we check on commodity prices. and a look at saudi arabia's massive affordable housing project, how it stacks up and who benefits. big bet on an experiment on drug for alzheimer's disease. so far, trials are not offering clear answers for investors.

we are in a thicker earnings season and credit suisse will be reporting tomorrow. the stock is up 12% so far this year. it is the top pick for one analyst at harris and associates. >> this is the beauty of value investing. patient to be extremely and identify quality at a low price. we think credit suisse fits that. they are a quality business with two very good legs to stand on, their private bank and investment bank, selling at extremely low valuation, new leadership coming in that will put better focus on deploying capital where there are higher returns within the organization, and when you combine all these factors, we think credit suisse has a long way to go yet. olivia: what was the problem before, brady dougan? >> he did a good job navigating the bank through the financial

crisis. this is one of the banks and did not have a huge hole in the balance sheet. they learn their lesson from 2001, short of their balance sheet, but the problem has been that the capital levels, the leverage levels, the rules from the swiss regulators cap changing, bringing upon uncertainty to credits wiese and how much capital they needed or how much they did not need. basically when you look at the core business, it is doing pretty well. olivia: banksbasically when youe core overall as a sector are your biggest capital allocation, 60% of your polio. make the case for financial more broadly. you have holdings in bnp paribas , and a few other banks. >> what has happened inyou havee when this crisis erupted was

people took it out on the financial sector believing that if greece defaulted, the balance sheets would be quite hard. a lot has happened in five years. basically all the greek debt, that was on name ballots sheets, has migrated to somewhere else. basically the european central bank, imf, etc.. when you see is a fairly cleansed european financial system, but the market does not understand that. the market seems to think every time greece is in the headlines, the knee-jerk reaction is to hit european financials. is up: the euro stoxx year to date, so maybe not the right time to buy in. look at valuations, more importantly, price to earnings, dividend yields, which is companies are trading at, they are extremely attractive, especially as we start to enter

an economic recovery cycle in europe. this is a really good time to be looking at european financials, given low valuations and where we are in earning cycle. ok, maybe these european banks are not complete the susceptible to greece so we don't have to worry about that, but only from greece, where is the great opportunities, where is the great recovery that will then pay off or these banks >? a roaring not be recovery but the european economy is not projected to grow maybe 2% over the next year and a half. when you start having this economic growth and get more credit expansion and you get lower loan-loss, which means better earnings growth. at the same time, banks are focusing on cost, taking out ranches, going more to digital, etc. you are starting to get in front of what i would call a virtuous cycle or some of these european banks. more credit expansion and loan

the -- less loan losses, better profit earnings. was davidthat whe herro. up, massive affordable housing projects in saudi arabia. why the kingdom is looking to help some of its not so well-off citizens. ♪

scarlet: welcome back to the bloomberg market day. let's take a look at how commodity prices have settled in new york trading. for that, let's bring in alix steel. oil prices are around $50.

the slump in commodities prices has prompted some big miners to make changes to what they are producing. oversupply has been the theme and bhp is responding. alix: the question is when miners and drillers will stop turning a product and tighten the market. bhp billiton is doing its part, announcing there will be a fall in petroleum output by 7% over the next year. copper will fall 12%. part of that is due to declining copper grades. the less good cover you have, the less production you get. they will close some minds. up 6%.re, output will be dow the point is, when you see the commodity index at 13-year lows, you are seeing the big guns take action. scarlet: maybe we will see the price respond.

wti, $49.20 a barrel. brent oil falling 1.7% as well. earlier today, the global head of commodity research at macquarie group says that brent could fall to $50 a barrel, from 56 right now. >> there in mind, we are still and we are still talking about a surplus of 2 million there is a day. we are still building inventory and will continue to for the next nine months. alix: that is a pretty bold call, $50 brent. we have new data here in the u.s. about what is happening in the inventory market, inventory build up 2.5 million barrel build. distillate continues to build. we have been seeing this for weeks. this doesn't and crude imports are higher. record high refinery utilization. they are working hard but it is not making a difference.

there is still a glut in crude and now distillate, and that is a dangerous place for the crude market to be. scarlet: goldman sachs came up with a bearish call on crude oil and so did morgan's hanley. what did they say? alix: they say the downturn could be worse than 1986. they are looking for four things to prop up the market. production growth has to moderate. demand growth has to pick up. cost and cap access to be down enough, and valuations have to be low. most of that criteria have been met except for production. we keep seeing production all over the world, and they highlighted opec. the oversupply we're seeing right now, 800,000 barrels a day, is due to opec. scarlet: that stubborn saudi arabia. alix: this is the first time i heard this stat. the industry has cut 1100 rigs capex. billion in

this year alone. they made the point that capex outside the u.s. is still growing, which is fascinating to me. to see if thatg non-opec supply falls. scarlet: all about protecting market share. alix steel will be back for the market close. let's go to our top stories. videoreleased dash cam showing the arrest of a black woman in a controversial texas case. sandra the land was pulled over outside of houston because she did not use her blinker when changing lanes. the trooper used a stun gun on her when she refused to get out of her car. she was arrested and was found dead a few days later. officials say she hanged herself, but family members dispute that. sands casino is in court over

plans to restructure $20 billion in debt. caesars still does not have support from the creditors it needs to go ahead with the plan. golfer jordan spieth will not let a little superstition stand in his way of a good time. take a look at this picture from facebook. traveling back to the u.s. with zach johnson. spieth is the one drinking from the claret jug. many golfers will not touch these championship trophies if they have not won it because they do not want to jinx themselves in the future. the height of the so-called arab spring, saudi arabia leaders announced millions would be spent on affordable housing for the country's rapidly growing population. while the generosity may benefit the country's poorest citizens, it's been profiting the businessmen as well. breaking ground on a new housing development outside of saudi arabia's capital --

he knows his country's construction industry means big business. this is among dozens of developments cropping up in the desert here, forming part of a multibillion-dollar state effort to build half a million new homes. >> it is for the people who cannot own or by, or get a house without the help of the government. limitless oily revenues have let the saudi kingdom's expanding population with limited housing stocks. 2011, political violence wracked neighbors like egypt, but saudi leaders grew concerned that overcrowding and low homeownership rates may ignite similar instability here. >> people without a house have nothing to worry about, but if you have a house and your children and family are there -- >> you will be a better citizen.

low-cost suburbs may solve the immediate problem but some say a cookie-cutter approach to home building may not create long-term cohesive communities. around is more and more construction. not really architecture. >> this architects home draws from traditional building methods, which are increasingly rare in saudi arabia's rush to modernity. >> we are repeating the mistakes of others. >> places like dubai? >> they are a very good example of what not to do. extremelyorhood is important and it is not taken into consideration in many of the projects. developers may skimp on construction, public agencies are paying huge premiums for land that was once given away for free. >> land was given away to some people as gifts.

this is a big problem that we have to find a solution for. >> how do you encourage people to own land, to develop that land for housing? >> it depends if they really , or to make 100% profit , or want to be a they want to be a participant in the development of the country. >> he says he is participating by building homes for his fellow saudi citizens, but with the government his largest client, he may also be building himself a small fortune. scarlet: when you went over to saudi arabia, what are you most surprised by as you are reporting? >> thescarlet: scale of the ambn behind these projects. a country of 30 million people and they are looking to build half a million new homes in five years. in 2011, when it was announced, there were 2 million people lacking homes, according to a

study done. they are only building a quarter of that. you have a lot of very young people. there is a huge bowl jinnah demographics. a lot of those people want to get out of their families and a kind of expect the state to give them these homes. that is something that is quite surprising. i would love the state to give me a home. scarlet: is it working well? amounte has been a huge of bureaucratic infighting between different ministries within saudi arabia, have allggled to access develop -- developable cities, near the cities. the development that we saw was about 50 minutes outside of the city center. they do not have transportation hubs that allow them to get in around the region. that is one of the problems in the story. you build these communities out nowhere ande of

will not be part of the larger cities, something that may prevent people from living there. scarlet: how many of these are foreign owned versus local companies? >> there are sensitivities in some cities ewing -- using foreign companies, but there are opportunities there. the guy that we interviewed had a contract for 140 homes, looking to build maybe 10,000. that is the key thing, who you know in saudi arabia. groups building a huge proportion of these homes and making a lot of money. scarlet: there is a political component as well. we started with the arab spring. a sense that the state wants to make sure that people are not feeling any unrest, are taken care of. social andalk to apologists, they will say people who own a home have a lot more to lose than those who don't. 60% of the population is currently renting. maybe this was a way to build identityss, national

this, national identity -- cohesiveness, national identity. scarlet: we were just talking about saudi arabia pumping oil, which they want to keep going. they have a lot of expenses as well running the different wars. how much is at play when it comes to building? saying that these larger infrastructure products may take longer or may not fill their original potential because challengeending they will face over the next two years. scarlet: i'm afraid there is no official answer. thank you so much. coming up on the bloomberg market day. eli lilly's big bet on alzheimer's. will patients get the cure they are looking for? ♪

eli lilly and by a general least high-end -- highly anticipated data from their alzheimer's drug trials. you would've thought the stock whatever is in but they are mixed. investors were clearly hoping for more. is with me now to discuss. earlier data gave people a lot of room to think that there was going to be a breakthrough, but the second round of trials is disputing that. >> eli lilly and by a general least for starters, then a lot of anticipation, even that there is data alone. investors have been excited that there is something coming. in biogen's case, they were

showing data on a dose similar to something they had seen before. investors were looking for a clear improvement in cognitive results for the patient with fewer side effects. what they got was a mixed result on the cognitive front. one measure looked a lot better, the other not so much. what people will tell you is this is a small study still, not that many patients. about 30. very small. what investors look for is directional, is this directional, is this directionally lining up? it was not a home run in that regard, and that is why biogen was hurt so much. scarlet: alzheimer's is potentially a huge profitable market or the drugmakers. it is kind of surprising that anyone has taken this long to come up with encouraging results. particularly because this population is covered by medicare.

presumably, these drugs will be covered and they will be expensive drugs, so some plus forsay $5 billion the drugs when they get to the market because they will be the first one that will potentially slow the course of the disease, so there will be significant demand an uptick if they were, but there are still a couple of years of trials to prove that. scarlet: you said some thing that was interesting, slowing the disease versus showing improvement. that is a big distinction between what these drugs can do. most that anyone is hoping for is to slow the progression, not that it will turn anything around. but some of the data have shown that some improvements could be really meaningful in the early stages of the disease and perhaps hold off the really detrimental effects of the disease for a few years. that is important for families, caregivers, and the entire medical system. even though they do not turn the disease around, it is very meaningful from the perspective of what they can do for the community. scarlet: are there any other companies that we should be on the watch for, companies that

may come up with a breakthrough treatment? merck is developing a base inhibitor, a pill. the drugs that we are talking about our infusions. very expensive to produce and gift. if merck is successful with a pill form, perhaps in combination with these drugs, or given on its own, there can be more excitement about that in the market in terms of people wanting to get it. was encouraging data from a girl who was hiv-positive, stop taking drugs, and then improved. hopefully, we will get some good news on this front as well. >> we will see in the next year or so, a lot will play out. we will know more about how this will develop. scarlet: thank you so much. trial results in but not a lot of clarity. cynthia kunz, thank you.

still ahead, apple investors sending the stock down today, dragging the nasdaq lower, as the company has been asking the old question, what is the next big hit? currently down 4%. ♪

in san: it is noon francisco, 3:00 in new york and 3:00 in hong kong. alix: this is the bloomberg market day. scarlet: apple disappointing

investors and facing the old question, what is next? alix: american express reports earnings after the bell. we will take a look at their turnaround plans. scarlet: new york city takes on uber. a look at the vote tomorrow that could put the brakes on the ridesharing service. good afternoon, everyone. i'm scarlet fu. you are looking at an snp pretty much flat on the day. 110ders are looking for the 2 level. he will see if we can stay above that level. jpmorgan said in their morning note that the s&p may soon lead its month-long range behind and