refinance. mcdonald's wants to increase the number of franchises. about 3500 stores. that would take a percentage of mcdonald's stores that are actually franchisees from 81% to 90%. a lot of things going on with mcdonald's right now. let me see if i can find some of the global numbers for you right now. globally, we were expecting to see comp sales fall by 4/10 of 1%. to be honest, i cannot find it right now. matt: you obviously don't ever be a donald. -- eat at mcdonald's. olivia: i do. they are down by 7/10 of 1% versus estimates that they would fall by 0.4%. the same-store sales overall is

worse but the profit and sales -- matt: continue to do through that report. olivia: they will finally sell -- matt: they will finally sell breakfast all day which is a no-brainer. stephanie: let us give you some top stories right now. we have so much news for you this morning. we are talking about matt's breakfast later because they are serving all day. matt: in greece, lawmakers approved another round of creditor demand. the european commission says talks should begin quickly. tsipras warned the rest of the process will not be easy. >> it is hard negotiation process. it does not end here. after the approval of this package we are obliged to negotiate again with the same persistence and passion in order to agree on the terms of the loan.

matt: he said he will diplomat the austerity program demanded by creditors even though he thinks it is wrong. secretary of state john kerry goes to capitol hill today to make his case for the iran nuclear deal. he and other ministers and officials will testify before the senate committee. congress has 60 days to review the deal. if lawmakers reject the approval , obama will veto the resolution. stephanie: it is an advanced talks to sell. there is no guarantee talk to lead to a sale. bloomberg news reporting pearson began exploring a sale of the ft after being approached by potential buyers. it is a deal that would create the largest health insurance in the u.s. bloomberg news reports that anthem is near an agreement to buy cigna.

the price about $48 billion. yasmin can come that the announcement could come later this week. aetna agreed to by humana. lebron james is going from hardwood to hollywood, but he will not be giving up his day job. he is teaming up with warner bros. to collaborate on projects in movies. as entertainment company is already in the game producing comedies for cable and the web. i have an upcoming game show on nbc. clearly he enjoyed shaquille o'neal's shazam. matt: turning to motors. g.m. posted second-quarter earnings that topped estimates. for more check stevens joins us now from detroit. the easiest number -- the etf number is surprising everyone.

we were expecting $1.08 and we got $1.29. how would you do that in a situation where everyone is expecting china to slow down and south america all the emerging markets are coming to a whole halt? >> as you mentioned, eps is up 122%. our results are very much on plant in the second quarter. we expect to see even a better second half in the first half. matt: results ahead of plan. that was not supposed to happen until the end of the year. you expect a slowdown? is this a case of china having its final good quarter and then grinding to a halt after the market problems we have seen? chuck: if you look at our performance in china over the

first half, clearly more challenging market or industry and pricing perspectives. despite that, we are able to post $1 billion of equity in the first half of the year and 500 million in the second quarter with greater than 10% margins. we were able to do that because of proactive actions we have been taking. we would expect to sustain that in the second half of the year. we will continue to be very proactive and address what is becoming a more challenging market. matt: adjusted earnings $5 billion in the first half. you say you will do better than that in the next cap. we are looking at more than $10 billion full-year for gm. is that all driven by u.s. truck sales? is that the key? chuck: clearly in the first half of the year, our performance has been driven by strength in north

america and strong performance in china. we expect to see that continue in the second half of the year. that is fundamentally our expectation of the second half of the year being better than the first half. stephanie: what is the biggest challenge you are facing right now? chuck: from a global perspective, south america continues to be challenging. despite a much more difficult environment, the results of the second quarter relatively flat versus last year because of actions the team in south america to to offset some of those headwinds. that is clearly an area that is challenging. and china. we will have to continue to react to a moderating industry, a more competitive dynamic, and some volatility. we are confident based on our performance in the first half of the year that we will continue to do that. matt: what about the currency challenges you face and the stronger dollar specifically?

revenue is expected over $40 billion and it was just over $38 million and a huge chunk of that was due to currency issues. chuck: that is correct. year-over-year, the currency impact was more than 2 billion. if you exclude the impact revenue was up about billion dollars. we were able to offset the fx impact through cost action efficiency and pricing in those markets that we can price for exchange. although exchange has been a headland when you look at it from an overall perspective, we have been able to offset that. matt: are you going to be able to continue your pricing power here in the u.s.? ford is offering rebates of over $10,000 now on the big pickup trucks. without bring your prices down as well? chuck: we will be competitive in the market. our truck sales have been doing exceptionally well so far this year. not only our full-size pickups but our midsize pickups.

we will continue to compete. when i look at it, overall retail pricing has been relatively benign for the year . we expect to see that continue for the rest of the year. stephanie: why? chuck: because of the strength of our market and the strength of the products we are offering. the silverado and sierra shares up 3% on a year-to-year basis. we are confident in our product lineup and the lunches we will be seeing later in the year with the new cruise. matt: with the currency headwinds you are facing, is the idea of interest rates being raised a headache for you? chuck: we are in a global economy. the interest rate environment in the u.s. and expectation of rising interest rates is something we have been expecting and planning around. at the end of the day, you have to manage volatility in a global market.

part of that is to make sure you build what you sell and you are bound to your currency. matt: thanks for your time this morning. we appreciate it. stephanie: now we have got to get you the five things you need to know this morning. i have number one for you. bank of america ceo brian monahan led to big changes. the bank announced paul will replace chris thompson as the company's cfo. thompson was once considered a potential successor for monahan. >> i think the oversight issues at bank of america are the worst they have been at a big bank citigroup. tom: was this action today initiated by the board or do you believe this was mr. moynihan acting alone? >> i am not sure but there are

many chefs in the kitchen when it comes to the problems. remember last year, they had a $4 billion regulatory capital miststatement. the board needs to be held more accountable. stephanie: the activist and a list as he likes to call himself. matt: that was a harsh statement. stephanie: he says oversight of bank of america is worse than any bank at citigroup. which is extraordinary. if you think about how big bank of america is at this point, i don't want to look back at that specific interview clip a year from now as the remember the warning signs? i would just hope he is maybe a little but wrong. matt: number two is a good quarter for a bank and that was credit swede. they beat overall estimates. the newly appointed ceo spoke

about the results earlier on bloomberg. >> performance of the private bank is extremely strong. we were driven by asia-pacific. they were pleased with the way things went in the second quarter. matt: shrinking the business there and focusing on the units making the most money. stephanie: makes a lot of sense. number three. >> $48 billion for cigna would create the largest health insurer in the u.s.. we have been telegraphing this a most a year of talks have been underway. $187 a share according to our reporting. that announcement could come tomorrow or perhaps next week.

it would add to the wave of consolidation over the industry. at now ataetna bought humana earlier. matt: i will go with number four. ferrari files for its ipo. fiat chrysler announced plans to spin off the supercar unit to raise more money and its valuation. harare will file with the new york stock exchange to go public. here is a fun fact for investors. if you agree to hold shares for three years or more, you get double the voting rights. i think this is one ipo people will be excited to buy for almost a stock certificate. i don't know if you can still get an actual piece of paper. stephanie: you can do it is a royal pain. matt: the all-wheel for super re

that is my favorite of the bunch is being squashed. stephanie: the answer is that my thing down, québec, and reverses. another strong quarter -- you like that? another strong quarter for under armour. this artist come up above consensus at seven cents a share. it is driving his push into footwear and other products helping sales. the stock is already up 32% this year. i would say it is not that they are putting into other categories. think about the athletes they have. tom brady, jordan spieth, and steph curry. we saw a huge push in their shoe business. matt: if you have the best players out there who are on camera the most, that is how you win buyers.

the british open was all under armour at the start. looks like under armour won the british open. stephanie: misty copeland a year ago when i launch their women's campaign, people said a ballerina? this space to the dialogue of it is not about hard-core athletes or what is a hard-core athletes. since the have gone public, the apparel business has had 30% growth quarter over quarter. i look at these tech companies who talk about growth and not profitability. that is one thing this company has had from the get-go. we do not hear that. matt: misty copeland is beautiful and lovely and graceful as she is i am the son of a ballerina who chairs the dance department at the

university by the think ballet has as much of a rich compared to other athletes like tom brady and jordan spieth. as great as it is, the reach outside of midtown and tribeca -- stephanie: you are wrong. the misty copeland at had more youtube hits than anything under armour has ever done. you can take that, put that in your pipe, and smoke it. it is not that she is a ballerina. it is who she represents, and underdog. matt: i will put it in my height and smoke it. our expert tells us the real reason behind the cfo switch coming up. ♪

stephanie: you are watching "market makers." erik schatzker is out. matt miller is here. we are talking banks. stephanie: bank of america

getting a new cfo. bruce thompson will be replaced. michael moore wearing an exceptional tie today. he says this change is about two things, the relationship with moynahan and the stress test. if i had my eyes closed and i said who in the bank is a threat to buying moynahan, i would have guessed tom montag, not the cfo. michael: bruce thompson is younger so that is a dynamic. we reported about some friction there in terms of strategy and difference of opinion and how to pursue revenue growth which the bank definitely needs. there is the issues with the stress test. two of the last three years they have had issues there. is stress test because the capital return is controlled by the fed has become perhaps the biggest event of the year for the banks. that ultimately cfo.

matt: is there a big ego situation at play here? i would think as an agent to shareholder, you should not be worried about someone on your team being a threat to your position. stephanie: think about any giant organization. if you are the ceo, you are thinking of the castle and spending a huge amount of time reading about who is threatening your position. without a doubt, there are other people gunning. matt: you have to think about how to best serve shareholders. stephanie: last time i saw, none of us lived in utopia, especially in banks. matt: i would not want to own those shares. are rather own shares of a bank where the executives were working together as a team to serve my interest. stephanie: i hope you don't own shares of anything ever. i was a waitress and everyone wanted better shifts and they were elbowing people out.

welcome to america. michael: you want the strongest team possible. the power struggles are constantly a thing. for bank of america's progress in the last three years, they are not in such a stable spot in terms of the profitability. there is some anxiety there in terms of trying to right the ship. stephanie: what do we know about the new cfo? michael: he was in the navy for several years. had been a health care banker for a while. he moved up the ranks. earlier this year, he was put into a finance role. has a little bit of experience but not a ton of experience in that world. stephanie: and brian likes him. matt: cool. as long as he doesn't overstep his boundaries. stephanie: at least not yet. michael: stay in your lane. matt: when we come back -- are you still planning your summer vacation because southwest is offering fares as low as $97

one-way. we will talk about the ceo and how he makes money like that. ♪

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visit philipslifeline.com/caregiver today or call this number for your free brochure and ask about free activation. matt: it is a beautiful morning here in new york. and little bit of fog over the atlantic. it is pretty smoggy. stephanie: i think it is the east river. matt: we are looking towards one of the most the corporate airports in the western world, laguardia. the biggest investment to new york after the horrible roadsd system. southwest airlines just release earnings reporting record profits for the second quarter. gary kelly joins us now. thanks so much. appreciate your time this morning.

we talking about a $97 offer. it has always been -- how does a company like yours make money when offering one must be unprofitable deals? gary: obviously we make money. i am delighted with the second quarter results. even better, it looks like the third quarter will show some improvement and hopefully that continues for the rest of the year. we are excited. we are a low-cost producer. service is very important. southwest has been famous for having that right balance of service and cost. you keep fares low. do not nickel and on your customers. you will fill of the airplanes and make a decent profit and take care of your shareholders. stephanie: you think low fuel prices helped but your peers say they do not because they are already hatched and their prices are locked in. are you in a different situation? gary: no, we had also, probably

more than everybody. we are unwinding our hedging positions before prices fell so low. we will have to manage that ourselves over the next couple of years. all-in we are still paying significantly less even with some hedging costs. our fuel bill was down $419 million in the quarter we just completed. even with some hedging it is still a very significant year-over-year savings. stephanie: where do you stand on your international plans today. gary: we are continuing. we launched international at southwest july 1, 2014. we are opening up a five gate terminal in houston in october. we will launch flights there. we are adding two new international destinations along with that, one to belize and the other one to costa rica.

it will continue next year. we are moving at a measured pace. international is about a percentage and a half of our total capacity so it is very small. right now we have 10 destinations. we will continue to expand and add destinations in the future. very exciting. stephanie: give us an idea of what you think of the u.s. economy, the health of the economy given the amount of flow you are seeing. you are a low-cost airline provider, so it would be great for you to tell us what america can psych. gary: takes for that question. we are low cost and the largest airline in the u.s. in terms of the number of customers we serve. we have a pretty good sense of the poles of the economy. i would say what we have been seeing for the past 90 days is been very consistent with the headlines read which is a little bit of inconsistency and choppiness.

and feels like consumers are beginning to spend a little bit more. a lot of the weakness over the past 90 days has been the oil and gas sector and cutbacks in business travel. factoring all of that in i think the economy is salad. it feels like it will pick up more from here. there has been a little bit of a soft patch. we had record low factors and we grew our traffic by 5.6% so i am very pleased with the current results despite the softness. matt: the results were better than the street had estimated. so beating the analysts forecasts. over the last 12 months, you are up 20% year-to-date you are down . given the doj -- are you giving the doj everything you can and how long do you ask the investigation to go? gary: i think shares are down

for a couple of reasons. one is the revenue environment is a little bit softer as we were just discussing than what people thought perhaps at the beginning of the year. just a little bit. not a lot. secondly, investors have expressed concerns about the capacity growth of the industry which is what the doj is investigating. we are fully compliant with antitrust laws and federal securities laws. we still want to be transparent with our shareholders. we are cooperating with the doj in the investigation. that is all i can report at this point. we are growing. we grew 7% in the second quarter. would plant to grow at about that rate for the full year. we will grow again next year. we have great opportunities to grow. we are hitting record levels of earnings and revenue levels of returns on capital. stephanie: they call in business

class for a reasonable corporate america is cutting expenses. do you have business travelers on southwest? gary: of course we do. we are the largest airline in america about anywhere from 35% to 40% of our customers are traveling on business. we probably carry more business customers than any other airline. stephanie: how about you? when you go anywhere -- gary: i fly southwest. stephanie: and you don't know what you will get. gary: there are no second-class seats on southwest. i always get a great seat. i bored with everyone else and look forward to the experience. stephanie: i hope i get to sit next to you one day. gary: i hope to see you on board. stephanie: thanks for joining us. that would be pretty awesome sitting next to him and say hey do you want these wings? matt: initial jobless claims have come out and i want to get the breaking news from vonnie quinn at the breaking news desk.

vonnie: 255,000 people filed claims last week. the fewest since november of 1973. this will be a big part of the proposal the fed will be speaking about next week. 255,000 the consensus estimate was for 278,000 people so that is a big difference. over to the previous week we saw the drop. 20 weeks now below 300,000 filings. continuing claims is coming in at 2.20 7 million. that is also better than the forecast and consensus estimates. stephanie: it is time now to give you our top stories of the hour. trucks are driving profits at general motors. second quarter earnings beat estimates thanks to strength in the u.s. and china. if you minutes ago we spoke to the ceo.

>> great results with performance where it counts. our performance in the second quarter is very much on plan. the results are what we expected. we expect to see a better second half in the first half. stephanie: it is only a matter of time before i have a minivan. g.m. broke even in europe. a year ago it lost $300 million. shares of caterpillar are lower in premarket trading. they posted a 29% decline in second quarter profit. it also cut its forecast for the year. the committee hasn't hurt by falling commodity markets which have let customers to less heavy equipment. matt: they are the cities that would appear to be popular destinations for americans. it turns out people are leaving the city's in droves -- cities in droves. new york ranked second among cities that lost a greater share

of local people to other parts of the country. honolulu, which i find more surprising, right fourth. los angeles also. the city that lost the most you people on a percentage basis is el paso, texas. i don't get it. i feel like el paso would be awesome. honolulu obviously would be amazing. all you do is drive up and down the fdr. i can understand why you want to leave new york. stephanie: it is very expensive to live in honolulu. it is locals much like you are seeing in new york city. people who come here are being driven out by the isis being so i die -- by the prices being so high. matt: russian oligarchs on the run driving prices up and moving in.

we will take a quick break. trial troubles for a new alzheimer's drug. we will talk about the companies involved in the shares moving next. ♪

matt: a deal that would create the largest health insurer in the u.s. is coming closer to where you reality -- those are two reality. shares of both companies flying high after the news. $187 a share for cigna. the close on wednesday at $151. we expect a final announcement sometime this week. stephanie: the alzheimer's drugs are having trial troubles. both companies failed to report definitive answers on whether the experimental drugs will work. bloomberg intelligence senior analyst who covers biotech joins us now for more.

matt: his first name is the easy one. stephanie: i was sitting here saying the name. >> hello, stephanie. stephanie: walk us through this. how much of a step back is this? >> over the last couple of days we had bio jim come up with negative results for a particular dose of a new alzheimer's drug. you have to take the data with a lot of caveats and that seems to be the overall theme and alzheimer's, a lot of caveats with the data because we have been so unsuccessful in developing a drug so far. matt: what is the bottom line? outside of the business story, people would love to see a cure or some help for authorizations alzheimer's patients. asthika: i think both drugs have potential. i am cautiously optimistic

because this is the first time we are seeing evidence of drugs having attentional disease modifying effects. the last drug to be approved for alzheimer's was in 2003. those were drugs that just hit the symptoms. with these drugs we are seeing what might be signs of it altering the course of the disease. not just giving patients a little bump up and then deteriorating. stephanie: one thing that the data was presented at the conference, could we say it was a positive? asthika: overall the lilly drug was positive with caveats. earlier trial issues was not a power position for benefit.

it has some right signals and heiints. we were hoping the lower dose would actually work. with them stay focused on what the main issue is. the has been strong data reported for the same drug but it was a dose that was much higher that had more side effects. the idea here is to lower the dose and come up with a little bit of side effect file profile. to have to figure out what the right dose is. stephanie: thank you. did you hear that? matt: nice job. that is all you need. a little bit of practice and you get it right. you have probably been getting new credit cards in the mail. the new ones have a new state-of-the-art chip embedded in them. they mean big changes in store

for companies and you. details from the company behind the technology after this short break. ♪

matt: let's talk about credit cards. more than 12 million people have their identities stolen this year. if you are a victim, the charges were told little over $5,000 on average. the the lot is her credit card companies which typically cover the cos. of total was $26 billion in 2014 those were the cost. they had to eat. there is new technology far more secure. martin for his he joins us now to talk about a looming october deadline. the railroad here is those costs

borne by berdych credit card companies will be passed on to retailers. >> that is correct. stephanie: why? >> the liability on fraud will move to whoever has moved to the new technology. this has happened all over the world. the fraud is on the issuers your financial institution, the bank. matt: the need to check and be responsible and make sure you are who used you are. chip in pin really helps. stephanie: can we step back and walk through how this works and what is done in europe for those who do not know? martin: the chip migration has occurred all over the world. initially it was over 10 years ago in europe. and moved to russia and latin america. two years ago moved to china.

this year, it is moving to the u.s.. matt: you put your card into an actual reader and you enter your pin on the pad as you would with a debit card. martin: we will have two steps as most countries have like the u.k. and australia. the initial step will be you put your card inside a point-of-sale terminal. you will initially be asked for a pin or signature. the use of the chip in the card will provide a high degree of confidence that your card cannot be counterfeited. stephanie: why would this not have been adopted sooner? why would england and australia be on board and not the u.s.? martin: i would say the main reason was the initial ip did not originate from the u.s. it was not born in the u.s.. the other reason perhaps more technical is that the quality of our communications in the u.s. is far better than many other countries certainly 10 years ago.

today through online systems, you can develop very good security systems. matt: the interesting thing is by october the liability passes to retailers because they are supposed to buy that have installed the children in -- the chip in pin point of sale hardware. a lot of them haven't and won't by then. martin: i would say a lot of them are furiously moving to it. certainly large bath retailers will complete the migration by october 1. matt: this has to be helping with your sales tremendously. you make the chips and cards. martin: we make the cards and personalize the cards. the envelope you get at home with the card and carrier is done in our facilities. business is particularly good. stephanie: what is the challenge? martin: the biggest challenge is

to meet the demand. matt: that is a real challenge. martin: however, we are very well-positioned to do that. six months ago we had difficulties producing the cards but today it is the personalization step that makes us work on every public holiday and every weekend until the liability shifts. but we are well-positioned. matt: hopefully next summer you can take august off. martin: let's hope so. matt: thanks for joining us. martin: thank you. matt: the cards that will work for chip and pin systems. stephanie: uber's persistence pays off. how the app managed to make the de blasio -- bill de blasio back down in a big way. stick with us. ♪

stephanie: look at that shot. matt: sunrise over st. paul.

stephanie: a bit of a gloomy day in london. also gloomy in new york city if you are uber. new york city mayor bill de blasio has officially backed down on plans to cap uber cars in our city. is this a win for the car service? we are joined now by david. uber put up a fierce battle against the mayor. before we get into who won and who lost, back it up for us. matt: what this means for freedom and capitalism. stephanie: sorry, yes. walk us through what happened here. david: what has been proposed was a temporary cap. i just want to show you a chart looking at how quickly uber has grown. it has only been here since may 2011. there are 26,000 drivers now in

the city. when you look at that compared to medallion yellow cabs 13,000 of those. stephanie: 26,000 uber drivers. david: they are loading these cars from medallion. look at the price of these medallions and how much they have gone down. $1.1 million a couple of years ago and now they are going for 700,000. matt: is still very expensive. david: for medallion to drive a yellow cab around, the average driver is leasing one of these cars. for $150,000 a day. matt: they are not taking home very much money at all and riding in one of those calves is a horrible experience. stephanie: not universally. matt: compared to

riding an uber car. i cannot believe there are more caps on they cost so much to operate. david: what you will hear from taxi drivers is that is a career, a full-time job for somebody. you cannot live entirely off of driving uber. the market has been totally saturated by the ridesharing. stephanie: what are people doing less of? riding the bus? taking the subway? david: has been said is this is changing how public transportation is working in the city. this is a step forward because this will become an integral part of transportation in new york city and other cities going toward. we will use taxis less and write sharing more. -- ridesharing more. matt: he will jump in a car on

some corner and there is someone else in their and then -- david: you can meet friends. matt: it is a social thing. stephanie: you had a little tinder to that and -- matt: that is exactly how the kids do it. stephanie: let's talk about what this means for the mayor and the tech industry. when we sawtek tech win over hollywood when the tech industry went from young hipsters to true players. what does this mean for uber? david: we have seen a lot of people from washington moving to silicon valley. uber as their only tailored its strategy to new york l.a., and that is the next hurdle for them. matt: we don't have time to talk about what this means for bill de blasio. thank you so much for joining

us. we will be back. ♪

>> live from bloomberg headquarters in new york this is "market makers" with erik schatzker and stephanie ruhle. stephanie: good morning. it is thursday. this is "market makers." erik schatzker isn't here. our commercial breaks are so special. matt: i am matt miller helping enjoy those commercial breaks. we will talk about under armour coming up, which will be special as well. stephanie: how about some top stories? in one hour, john kerry will be on capitol hill to make his case to the iran nuclear deal.

he and other officials will testify before the senate foreign relations committee. congress has 60 days to review the agreement. president obama says of lawmakers reject the approval, he will veto the resolution. the fewest americans in more than 40 years filed for unemployment benefits last week. jobless claims plunged. they had been rising due to major auto shutdowns and school vacations. matt: gm as you have not seen anything yet. second-quarter earnings beat analyst estimates. sales were stronger in china as well. the ceo told us all of this does is set the stage for the next six months. >> our performance has been driven by strength in north america and strong performance in china. we expect to see that continue in the second half of the year. that is fundamentally underpinning our expectations of

the second half of the year being the better than the first. matt: shares of qualcomm are lower in pre-market sharing. it will cut 15% of its workforce, reduce executive pay, and shake up the board. it will review strategic alternatives including a possible breakup. those are some of the top headlines we are following for you at this hour. stephanie: under armour's winning lineup of athlete endorsers looks to be paying off. the company's revenue is up 29% from last year. they also raised 2015 outlook. footwear being a standout. revenue rising by 40%. the founder is saying steph curry may be the big reason shares are up 5% in early trading. here now is spven from

bloomberg intelligence. talk about under armour. first let us break down with the numbers look like. >> they obviously beat estimates by a lot. margins were a little weaker than what people expected but it is due to some temporary factors such as the u.s. dollar and investments toward tech. beyond that, really good results. >> a blowout quarter. the have a pattern where they set the expectations somewhat low and they blow things out of the water and then raised the guidance. we have seen this three or four years in a row now. same old story with under armour. 30% growth. for business is taking off. not much to complain about. matt: i am a golf fan watching the open and i was blown away by how many of the big stars at the

beginning were sporting under armour. they are moving into segments when you do not expect to see them. >> it is startling to see them. now you see a lot of under armour. it is part of their strategy to get to these other sports they are not known or. overseas they are doing some things with soccer. when they did with steph curry was truly amazing. they bet on him to a three years ago and now he is a superstar. stephanie: m.v.p. this year. can you turn his shoe into an air jordan? 10 months ago kevin durant's contract was up and without under armour would take on a $300 million contract. and do they have the dough to do it? now no one is talking kevin durant. what can they do to steph curry. this time after i did not know who he was.

matt: the will be a steph curry one and two. getting to the level of jordan is a reach. stephanie: i am just talking about marketability around a shoe, a product. michael wasn't at the launching of the air jordan 30 last year. >> they will take them to china and asia were basketball is big. they will leverage that market. they will raise the profile for the brand and try to battle nike which is strong in china the moment. matt: one of the interesting things to do is to take the athletes young, before they are hot. new jordan spieth would kill it at the masters and continue to do so well in meters majors? who knew steph curry would be so great or mystic opened was going to get so many youtube views? stephanie: 6 million people saw

it but matt did not. matt: 6 million on youtube is like 50 viewers for us. that is not a lot. stephanie: i will not entertain this. was misty copeland a winning strategy for under armour or losing strategy? >> definitely a winning strategy. they did a big play for women and they are trying to do this outside of the core of clinics instead of going with the obvious. they do these alternative athletes. stephanie: whether or not under armour is a big threat to nike more and more people are wearing athletic apparel so the pilot is getting bigger. >> you see at around offices and it is worn at leisure. there is a big cycle with athletic wear right now. >> i have to chime in.

part of my work i go to malls a lot and you look at the stores that have a lot of traffic in them and it is the adidas store and the nike store and digcck's sporting goods. it is real. stephanie: i am from new jersey. what do you think about under armour's tech strategy? >> is in the early days. they acquired three apps. it will not be focused on the advertising of the premium subscribers. it will be focused more on selling shirts. stephanie: how long before we evaluate it? >> would have to give it at least 12 months if not more. >> expensive. matt: are you part of the challenge? stephanie: would you like to be?

>> i am not. i don't really know what the apps do at this point. matt: we are actively using one a lot. >> i don't know if it is good for sales. stephanie: it is about winning the fitness challenge. i know you were critical about the changes the company proposed. kevin plank wanting to maintain control of the company despite selling of shares. will they get respect? there has not been that much pushback that will there be -- will there be pushed back? there has not been much pushback. >> kevin plank backs up his talk. he talks the talk and walk the walk or however you say it. there is not much to complain here. look at your returns. the stock is up the past year more than 40% or something like that. >> you can use it in the future

as currency to get more athletes and make more investments and acquire more companies. i will take it. stephanie: that you go. thanks, guys. matt: coming up, bondholders for puerto rico's junk rated power utility have proposed a new land to keep it from defaulting but it says it will not work. we will talk to one of the bondholders tom weidner next. -- tom wagner next. ♪

stephanie: welcome back to "market makers." bondholders of puerto rico's junk rated power utility known as preppa have proposed a new

plan that would allow the agency to delay payments for several years and give it a $2.5 billion to upgrade the system's. but they released a statement saying this plan is not workable and not supported by other creditors. what happens now? we have one of the bondholders here with us. tom wagner has been directly involved in these negotiations for months. walk us through this. what is your position and what is happening here besides puerto rico being in big trouble? tom: what we are trying to do is hope result one of the financial difficulties they face with respect to the public utility. we have been working constructively with the island's professionals have hired to try to craft a plan to put prepa in a better position. in our most recent proposal we selected to pursue a new type of

financing for the island's utility that will reduce the borrowing costs. in addition to doing all the things the advisors suggest the need to be done with respect to modernization and improving reliability we are also proposing that we swap the bonds out to new securitization bonds which brings the coupon down and provides a much longer moratorium period. you get a $2.5 billion savings that help pay for that. patriots interest rate borrowing for the island's utility. stephanie: why would they not want this? tom: i think part of the reason is it is a new structure and they have not yet done it on the island. it worked successfully when implement it in smaller packages like for long island power and elsewhere in the u.s. there is a resistance to doing something new. there is not a lot of familiarity with it on the island. what our goal is to further educate not only the professionals but those

responsible for making the decisions, the politicians and other appointed officials. matt: this is not from prepa as a negotiating tactic? tom: before you complete a negotiation, every statement is ultimately part of the negotiation. i suspect there is an element of wanting to do more. what i find interesting is that we have been able to come up with a plan that actually reduces the borrowing costs more than their last request of us. stephanie: this island is in real trouble. how much of this is political posturing? tom: there is no posturing with respect to the difficulties the island faces being shut out of the capital markets. that is just the reality they face. as it relates to how they are approaching resolving that, i think it is really political. i do not think that may spur a rico and a different than any of the municipality state or sovereign that faces a similar crisis.

what we need to do is work constructively with them to find solutions. the one thing that certain people in puerto rico estimated is the creativity and willingness of bondholders across the spectrum in puerto rico to negotiate and find compromise and workable solutions. i think the similarity with greece is that they are both shut out of the markets and a largely and their -- end there. matt: the largest debts are nothing compared to what we see in greece. tom: that's right. people focus on the aggregate of debt outstanding as opposed to the cost of servicing the debt. one of the things you heard a lot from the imf as it relates to greece is they want to drive the cost from debt service down so you create more headroom to pay the debt. it makes it easier for the entity to re-access the public markets. stephanie: what was your take last week when a friend said we

could take puerto rico to the eurozone if the u.s. were willing to take greece into the dollar union? tom: with all due respect the finance of those comments largely in just, but i think it is an enormous disrespect to the people of greece and puerto rico. i think you are making light of a situation in both cases that are causing real harm to the people in those two places. the average person in puerto rico or greece did not make the decisions that resulted in these large debt burdens. they did not run the budget. matt: i am not so sure about that. the average person in greece is maybe doing all that he can to avoid paying taxes. may be collecting attention on a job that he didn't work very hard in and is retiring much earlier than anyone else in europe. especially in greece, the average person bears a lot of the burden of what is happening there.

i am not sure about the case of puerto rico. we did see this coming for a long long, long time in puerto rico. we knew this would happen almost a decade ago. tom: as it relates to people having a responsibility i guess to help pull the country or principalities municipality, that is a fair statement. ultimately the average person -- it is hard for them to understand the ramifications. there are serious matters that need to be taken seriously.when you will find it but is there is a willingness to do what is needed if they are shown the right. that's the right path -- the right path. matt: when citi had this meeting last week and creditors were trying to figure out what was going on there were a bunch of protesters with signs that said

banks get away, puerto ricans pay. you have to share some of the responsibility when you sign on the dotted line. you know you are supposed to pay it back according to the terms of the agreement. stephanie: is involving the whole term borrowing. tom: as someone who invests in debt, and agree with you. there are not many situations absent a few immediately preceding a financial crisis where you say the lender has the responsibility for things going wrong. if they don't price for that correctly, they suffer a loss and that is the way the markets work but i think marketers to say we borrowed too much so we shouldn't have to repay is a mistake. with the conversation should be about is we borrowed too much and we cannot repay so we need to restructure and find a solution that works that is separate and apart i want to walk away. matt: just to outline the

differences between greece and puerto rico, there is a sentiment in europe that the creditors are predatory almost. that is not the case in puerto rico. tom: i think that is a concept you are hearing people talk about. what you are seeing in europe is a desire on the part of a number of participants in the greek situation and the other institutions involved. they want some type of debt restructuring to allow greece the ability to move out of the situation where they can access the markets. in puerto rico, there is a view that there was too much lending that occurred to the island. ultimately what is happening now is creditors are bearing the responsibility for the solution. stephanie: what is your position on greece now? tom: i don't think i can talk about our positions there. ultimately, we are a very constructive -- we are very

constructive on the greece situation. it is not to say that instantaneously things will be better, but if you look at what they have been able to achieve over the last 12 to 18 months and the opportunities they will have going forward our produce ordinary. the bar is reasonably low for greece right now to achieve some of the needed reforms. once they begin to achieve those reforms, you will see high probability that they will be included in qualitative easing and they will get some kind of debt restructuring. the conversation this fall will change completely in greece. stephanie: beyond greece in puerto rico, let's talk about volatility in the high-yield and distressed markets. we have seen a huge spike. what is liquidity look like for you right now? we have seen investors a few months ago trading in the 60's and 70's that are now trading in the low 20's. is this a moment to panic? tom: if you are along the wrong

things you are probably seeing some of that panic reflect in price action. there is never a ton of liquidity in any name in the universe or the sovereign universe when investors become concerned about the ability or willingness of the borrower to repay. you always see a lack of liquidity around those times and you are seeing that exacerbated right now. as it relates to the broader market, in addition to certain sectors under distress from you see a general lack of liquidity. i was reading it a bloomberg article that said you are losing money as an investment bank when you provide liquidity to a corporate or customer they a legal -- illegal under dodd-frank. that will have a significant cost at some point in the future. stephanie: are their buyers right now? banks could serve as a christian

in the past but they cannot today -- as a cushion in the past but they cannot today. tom: that creates a mismatch with respect to the liquidity providers which are typically hedge funds and many times distress investor hedge funds. they can be the liquidity provider. stephanie: are you concerned about how big etf has gotten? tom: no i think it will create a big opportunity for us down the road. i am concerned only if the exit in mass. stephanie: he is sticking around. i was so interested in what he was saying. we will be back. ♪

stephanie: welcome back to "market makers." we are a few minutes with from the opening bell. tom lightner is still with us --

tom wagner is still with us. the three things moving markets this morning with tracy. >> we start with chinese stocks. china stocks are up today, a sixth day of rallying.they are up 20% from the crash . we are back to enable market almost -- back in able market almost -- in a bull market. matt: can you call it that when half of the stocks are suspended and the biggest are not allowed to sell? >> there is a report in the wall street journal today the bridgewater which has been one of the big china bulls is now saying they do not feel comfortable investing in china. that is on top of a bunch of other comments from people saying china looks worse than the u.s. did in 2007. and a lot of nervousness on chinese stocks even as they somehow managed to come back.

number two, let's talk about intel. they financed the acquisition of a;terltera. companies are going to bondholders to fund big m&a deals or do share buybacks or dividend increases. there are a lot of people who think we will see more of that activity as people try to issue debt ahead of the fed raising interest rates. stephanie: are those companies knocking on your door? tom: not our door. we see a lot of companies showing new capital raises to find a host of things not just with respect to share buybacks. see increased levels of leverage and you know a day of reckoning will company will create opportunities for those who are seeking to buy in a stress situation. stephanie: when you say it is a good thing, it is a good thing that things are going to get bad.

tom: they could create a good opportunity for those willing to be patient and wait for them. i think intel represents one of those opportunities but when you see large companies like intel -- you know there are a lot of other companies doing it as well. stephanie: for your visit find that the article is expanding? tom: it is a sign that things could beginning to inflate. that represents the beginning of the end. tracy: this is late cycle credit market stuff we're seeing now. whether it is a bubble or not is tricky. matt: it's as wall street heart. this is how we write. tracy: speaking of late cycle stuff, wall street is in love with peer-to-peer lending because they get higher-yielding loans from doing that. the latest example of wall street being in love with peer-to-peer is citigroup with

400 million worth loans of a big peer-to-peer lender. this is a big turnaround for the peer-to-peer industry. stephanie: is this if you cannot beat them, join them? tom: the reason the banks got out of middle-market lending is because it is expended expensive to holy balance sheet. -- to hold the balance sheet. they are stepping away from things they have been historically. some of that has good and probably not great long-term. matt: banks led to take loans and securitize.that is their job but that doesn't mean lenders are in bed with banks. stephanie: if this is a business based were getting out of and now they are securitizing these businesses, on wednesday the banks are getting on board. tracy: they got a single a

rating which is the highest rating we have seen for consumer peer-to-peer loan deals but still a lot of risks involved. there is a line that says there is no way to determine how much or whether prosper verify the information. stephanie: that doesn't make you nervous or think that three years from now we will have this conversation and pull this tape saying what did we miss? this smells like subprime. tom: down the road in my present a good opportunity. stephanie: that copy at caveat feels like in the subprime space this person will apply for mortgage did not but with the income was. peer-to-peer lending? tom: i think you create a real opportunity when you see the way that things work and how the markets are actually going about funding different types of lending and borrowing. this is another good example.

not to say you will see a host of these borrowers defaulted on their payment on the peer-to-peer side. what it does speak to is that perhaps the risks are not being appropriately measured on the deal is originally done. that is the beginning of all we talk about when we say you are seeing too much froth in the credit markets. stephanie: thank you for giving us the top three. matt: taking a look at three stocks on the move of the open here. we kicked off with mcdonald's. >> mcdonald's investors are loving the news from what they are hearing. shares are now reacting up about 1.2%. the burger chain posted earnings of $1.26 a share. that beat the street estimates of $1.23. q2 comparable store sales did

miss. the ceo did add that the company will return to growth in the second half of the year so we will keep an eye on that. moving also is caterpillar. it is falling down 2%. this is the maker of construction machines around the world. is cut forecasts by $1 billion for the full year $249 billion. it reported a 29% fall. -- it cut forecasts are $1 billion for the full year two $49 billion. some good news for bristol-myers. the stock is down by half a percent but it was up earlier in the pre-markets. its estimates for second quarter was up $.53 a share versus an estimate of 36 is a share --

$.36 a share. its it that is cancer drugs will help. >> i don't know where you are going with that. matt: withhip it good. gm shares of 7.5%. the biggest gain in gm since 2012. stephanie: it is a rare day that everyone on set is old enough that they know what the musical references are. >> we are not talking about the european operatic group discovered by simon cowell. we are talking about stephanie: a 90 -- stephanie: we are talking about

a 1980's redhead. >> bank of america chief financial officer bruce thompson leaving the firm as part of a management shakeup. mike mayo says while it is no surprise, the problems do not just lie with thompson. >> look at the issues that bank of america has had. they have had issues with the stress level. they have had inconsistent financial metrics. there is lack of connection from compensation to metrics. that falls on the cfo. it falls on the cfo but it also follows to the ceo and board. it seems like one more person is being shot while those above are being protected. matt: tom wagner still with us. will not ask you about specific people or banks involvement you interface with banks every day. what do you make of this shakeup? we were talking about the fact that he goes sometimes play a part. tom: that never happens.

you see it in every corporation, change in leadership. in the financial world, it happens for a variety of reasons perhaps more frequently than in other industries. we work with a lot of very hard-working professionals on the sales and trading side that are faced with this every day. i don't notice any significant changes that cause me concern for bank of america or anywhere else. we have a phenomenal set of professionals we are faced with regularly. they are disconnected from these issues you may see in the c-suite level. we see people working very hard to service clients and i can't member the last time we had an issue with dealing with any bank. stephanie: is that because of dodd-frank? before that, when you interface with them, the street was much more of a competitor as a liquidity provider. fast forward and as a client

committee of think wall street is operating better now that we have the rules in place? tom: when i was on that side of the business, and we worked together, we took a lot of risk. i am not sure it is a good thing by having banks not take that risk anymore. while the broker-dealers were competing with the -- it at a liquidity to the market s. i think it is easier to provide liquidity when you can take with because you spend more time researching and you understand the risk you are taking. i think that creates a level of liquidity that is missing from the market now. you also create disincentives for good people to stay at the firms because it is not an ability to generate the same level of profits. there are a lot of negatives that have happened as a result of the removal of risk from the balance sheet.

stephanie: dodd-frank is not going to get repealed, but if there was something that could be changed in it today that you think would make the markets move more efficiently, what would be done? tom: i think you would probably be allowing the banks to think some risk on the balance sheets. that i is a damper for the market and that would be good for the markets. to be clear, the lack of that does create better opportunities for firms like ours that specialize in buying things when they are under great pressure. while i do not know that it is very the market but it is a good thing for us. matt: they might as well take more risk because chris dodd yesterday told tom king that too big to fail is over with. any risk that a bank takes is its own risk from now on. the government will never again bailout a big bank. stephanie: chris. also says that a ceo of a bank told him they are better off without dodd-frank.

tom: i don't think that there are many fans of dodd-frank on the side of a business that is a lot of securities trading. there may be those with different opinions but i think he notion that we have never again going to bailout a large financial is probably a bit naive. the government will do to protect the financial markets in their entirety. stephanie: david einhorn and howard marks would say the mistake to that sentence is never say never. we have to leave. they would says he would rather work in my golf than a bank -- work at mcdonald's than a bank. matt: as ceo maybe. tom: i do understand his general sentiment that i am never ever

going to review him on tv for sure. stephanie: probably not in private either. thanks for joining us. matt: coming up, internet casinos. a bet on online gambling in connecticut. sounds like it should pay off. we will have the details coming up next. ♪

matt: the owner of connecticut top casino is stepping up its wager outside the state. its online gaming site went live this week. the president joins us now.takes for coming on the program -- thanks for coming on the

program. >> 120 million here in the u.s. i think delivered to upside early, we are excited about it. matt: is sort of puritanical american politician always wants to make this against the law until they get paid enough. robert: i will say this, right now there is a lot of momentum. it is state-by-state in authorizing online gaming. matt: it is legal in new jersey and you are doing it there. robert: correct. stephanie: one of the concerns is you're going to be taking people from going to the physical casinos and they will begin doing at home. you are in a situation in connecticut where you have competition but now you have massachusetts and new york. now you at online and how will you get the bodies in casinos? robert: it is a concern we hear

often but i think it is more complementry than cannibalization. we view it as entertainment. when you look at mature markets like the u.k. on australia in the early entrance in new jersey, they found it has been complementry. there has not been a reduction in trips at the bricks and mortar properties but an increase in overall value. matt: is not so much great for bobby before the mohegan tribe. the ultimate owners of this company is a tribe of indians that were given a license to do this. robert: it benefits mohegan tr ibe. we are growing and building more properties and this is an opportunity to grow in another segment of the indus industr. stephanie: you are growing but your revenue is shrinking and you have $1.7 billion in debt.

revenue is shrinking. to say you are growing, you have to put it in context. will you have to restructure? robert: we are in pretty good financial strength right now. over the last five years, the industry including our organization has seen the impact of the economy and competition. this year has been very strong. we have seen stabilization. we have seen growth in gaining revenue. we have a lot of exciting projects.we are building a casino in washington state. we have seen opportunity and online gaming. we are building a new hotel on property. we feel pretty good about the prospects of the future. matt: you are going overseas to korea. stephanie: you are still subject to government approval in washington state, yes? robert: just this past year, the land was taken into trust which allows us to move forward. our goal is to close in the

next two months. we hope to have a shovel in the ground in the next six months. matt: then you go to korea. you are growing fast geographically. too fast? robert: with feel confident. our organization is very methodical and cautious and conservative but we are ready to test the international opportunities. we have looked in turn down many opportunities. the korean opportunity is incredible. 700 million northern chinese closer to seoul more than any other city in the world. stephanie: what do you look at that you turn down? robert: with have to make sure the investment makes sense, the returns make sense, and our capital allocation strategyrobert: is in alignment with the particular opportunity. i do not want to go in the specifics of particular locations but some in north america, some asia, and europe. stephanie: what is your take on

the u.s. economy? how does the consumer feel? robert: i don't think we are at a level pre-2008. i think consumer confidence is a lot better than it was in the last five years, especially 2009 and 2010. our volumes are very strong. and i not spending as much on average per person as they did in 2007 but a lot more than in 2009 in 2010. we are more optimistic it will continue. matt: getting back to precrisis levels. things for joining us -- thanks for joining us. stephanie: people are hitting the slots in connecticut. here is a look at the top stories.is morning president obama's leading washington to head to africa, first in his father's birthplace of kenya. he will become the first sitting president to visit ethiopia. at the white house, he signed a bill that lets some african countries sell goods in the u.s.

duty-free. as carter is on an unannounced trip to iraq. he later this morning in fact back ghdad. he will also want a progress report on the government's effort to settle sectarian conflict. say it ain't so. dunkin' donuts says it's prices could rise when minimum wage increases our past. and-- increases are passed. matt: i would be in a certain sense for a donut if i knew the worker was getting $15 an hour. stephanie: there you go. and this dude likes donuts. matt: we will take a quick break but we will be right back to

look at the movers in the session 20 minutes into trading. ♪

matt: that is get to some of the big movers. >> i want to take you to hertz. they are falling down 3.3% right now because morgan stanley downloaded to underrate. price increases are unlikely. moving to the insurers. and thumb is near an agreement to buy cigna for $40 billion. cigna is up by 4% here. inthe deal could make for the largest health insurer in the u.s.. qualcomm shares are moving lower, down nearly 2.5% right now. deposit is worst fall in sales since 2009. stephanie: thank you. in just a few minutes, three cap

endeavors will testify before the senate foreign relations committee in an attempt to get congress -- with the iran nuclear deal. i have one more esteemed name for you bloomberg's own phil mattingly. he is all over this story. talk us through it. phil: the sales job against today for the administration and they are not targeting republicans who are unified in their dislike. it is all about democrats. you need to watch ben cardin. very skeptical of this deal. you need to keep an eye on tim kaine, a virginia lawmaker and a democrat. why democrats only matter? the president needs to keep all but 12 of them in line to keep

and sustain a veto over anything congress does.this deal stays alive if any fewer than 12 democrats support the president on this. the other thing to watch out for is the politics of it. marco rubio and rand paul off the campaign trail will be questioning the administration. both oppose this deal so a lot of theatrics to keep an eye on as well as the hearing moves forward. matt: we are taking a live look at the room here. for the journalists getting in position to get the cameras on john kerry when he walks in the room and cover this breaking news. it starts in five minutes. stephanie: what do we think here? what does he need to drive home? phil: i thinking as to drive home to the democrats that this deal is real and the inspections are real. the inspections regime is what caught a lot of flack over the last week. there but questions about how rigid it is.

a lot of u.s. allies are very concerned about the inspections regime. that is the component today. stephanie: there you go. matt: very easy to inspect an entire country. stephanie: no problem. phil will be on hand to report on this all-day. our baby faced assassin. that will wrap me up from "market makers" today. i will see you tomorrow. matt: i will be here. i will be right back. ♪

scarlet: good morning it is 10:00 here in new york city. matt: welcome to the bloomberg "market day."

scarlet: anthem is on the verge of buying sigma. matt: and other quarter, and other slow down for mcdonald's. the new ceo has a lot of work to do. olivia: and it is one of america pass oldest and most iconic companies. levi's. i am olivia sterns. matt: i am matt miller. we are half an hour into the trading day. we saw a mixed picture at the open. the s&p is