light of the cfo shakeup. mike mayo after all. an aspect ceo has plenty to think about in the aftermath of the new york stock exchange outage. we will hear from him just ahead. seattle it is all about at the close. amazon and starbucks to report quarterly earnings. everything you need to know ahead of the results. scarlet: good afternoon, everyone. i am scarlet fu. alix: overall it seems like we're seeing a decline, that really feels like it is the micro leading the way. off half a percent in the s&p. seems like the nitty-gritty making in cap and. to put it into perspective, this is a three-game losing right.

all 10 industry groups are down. the s&p 500 is stuck in a rat. alix: interesting you say that. take a look in the terminal. basically talking about the s&p not able to old a record. 47 times as sheer s&p got to a record territory during the intraday trading and failed to hold through the close. scarlet: 47% of the time. alix: versus other years where it was less. scarlet: lots of fun for people. you can really see it in terms of the micro. caterpillar showing the full-year forecast for the year. the dollar's strength but and user industry just being very weak. scarlet: the mining companies companies are not demanding new equipment because they do not need to dig for any other material. that is released the.

not what they want to see. the bloomberg commodity index all of this. a 13 year low. not pretty. no change insights because the u.s. dollar continues to remain in favor. caterpillar sells 56% of the revenue that came from .nergy transportation, mining when you have the index not doing well, is companies are also not going to do well. all of a sudden you have the wealth effect or lack thereof of commodities. oil in a bear market again. can he go into a bear market if it is already into a bear market? -- -- an that happen? double bear? alix: now to a look at the top stories. secretary of state john kerry challenging critics of the iran nuclear deal. a senate foreign relations

committee he rejected accusations the u.s. failed to hold out for a better market and insisted the point of the deal is to limit the new -- limit the nuclear capability. >> this is not a question of giving them what they want but how to will them back. how do you dismantle their weapons program? what was really on the table here. we set out to dismantle the ability to build a nuclear weapon. a senate foreign relations chairman bob corker said he disagreed. one of the best-known names in financial journalism getting a new name. one of the: best-known names in financial journalism getting a new name. pearson will sell to maknikkei. toling will allow pearson focus on slowdown in the education unit. alix: encouraging news for the

u.s. economy. fewer americans file for an employment benefits for -- for any other week in 50 years. it has been rising due to make your auto factory shutdowns and will vacation. scarlet: the mcdonald's ceo protecting the burger chain will start growing again in the next month. for now the company singing the blue after yet another lackluster quarter. straightd quarterly drop. shares of under armour are on the rise today. posting second-quarter profit that beat analysts estimate. under armour pushing into shoes boosted sales. home toany has been guys like this. jordan spieth recording victory at the masters and u.s. open tournament. postedouthwest airlines record profit in the second quarter. southwest line more passengers

and paying a lot less fuel. shares are trading higher this afternoon. before today, southwest talk with down 19% this year. stock down 17% this year. by $15 pere papers hour for the state workers. the governor back to the plan. alix: former congressman who resigned after he was caught x-ratedt -- sending text messages has a new job at a pr firm. his wife is one of clinton's top advisers. personal experience some crisis pr. alix: learn from your mistakes. top stories. nextet: coming up in the half hour, how the worst commodity fund in 13 years is making life pretty difficult for some distress that investors.

alix: think you can guess the top three countries with a high interest?hest born that story and why. scarlet: all caps to the nasdaq ceo about the exchange's new agreement with the next trading. -- we will speak to the nasdaq ceo. alix: bank of america second in command ceo bruce thompson out of a job following a management shakeup. he will be replaced by paul than donofrio. paul think analyst mike mayo said the shakeup is no surprise but the problems at the bank do not lie only with thompson. i think the oversight issues at bank of america are the worst

they have been at a big banks in citigroup. tom: was this action initiated by the board or was this mr. moynahan acting alone? >> i am not sure, but there are many chefs in the kitchen at bank of america when it comes to their problems. they have had issues with the stress test to of the past three years. a $4 billion regulatory capital misstatement. in the one to five pages of the proxy this year. the board meets to be held more accountable. has enthusiasmdy about bank of america has a value that could become more like diamonds. do you agree with your colleague? >> i disagree against i do not believe they have proper oversight at the board level and the top of the firm. there is not the right tone set at the top. inconsistent financial metric.

not one forward-looking financial target. we need something to hold management accountable to. there is not enough financial metrics that we can say this is what they are trying to achieve under this pacific timeframe. >> this move, was it about confidence or different in strategy? >> we don't know for sure. the press release] was written by someone at the kremlin. they usually do. >> a lot of shared responsibility. someone charged with strategy. look at the issues bank of america has had. the capital's statement. they had the inconsistent financial message. lack of connection from financial compensation. that falls on the ceo. it falls on the ceo, but it also falls to thefinancial ceo and t. it seems like one more person is being shot while those above are being protected.

we perceive jp morgan is having a past. wells fargo. bank of america is a blending of three or four past. moynihan and the people from fleetboston. the carolinas. you can stand at the join ginormous tower and speak of the history. is this a turf war between this album nation that can lewis started and mr. moynahan had to pick up? >> they are still working through the decade of integrating the culture. this move certainly consolidates more power in the hands of the boston power elite. om: going up to being a vice-chairman for starters. >> she is from fleet. brokerage from fleet. two directors from fleet. brian moynihan from fleet.

this is boston running bank of america more than in the past. >> this is amazing to hear when we talk about financials, coulter really matters. lture really matters. drinkingou talk about up banks. you have bernie sanders now, and this will be a topic in the presidential election, i think back to bank of america, because merrill lynch should be set free. i think the brokers would be as happy under that scenario. again, this by our estimates will be the fourth side of the brokerage business. they are still trying to find the right formula. you are a radical. you will go to the streets with a sign that says that meryl streep. free.eryl

tom: what is the methodology to get the bank to be more like fortress diamond or fortress stone? >> consist in seo of strategy. look at the annual report of wells fargo from two decades ago. it looks the same. look at the method from jamie dimon and jp morgan from a decade ago. very similar. i want to cut the slack for moynihan. if he's picking up the pieces? let's get over that. that is the excuse wall street wants to give him. yes he inherited a tough and. with the next stage. bank of america evolution. i am not sure the changes yesterday are enough. tom: how does this new ceo work with moynahan? >> carefully. alix: always count on him to

tell it to you straight. scarlet: totally. he goes to the annual shareholder meetings and rile himself. he asks the tough questions. he puts their feet to the fire. alix: coming up, a delight to forget were holders of distressed debt. you can blame it all on the plunge and commodities. scarlet: back with more. ♪

scarlet: welcome back to the bloomberg "market day." alix: going straight to a look at the market. looking at a trio of stocks set to report after the closing bell. one of the busiest earnings days

of the season. 69 companies reporting. drill down to three of them. this is one of the busiest days. we start with pandora, the online music streaming service. right now pandora by only a third of a percent. estimates expected to cents per share on revenue 283 million. analysts are mixed on this one. for example, a binding opportunity. debut ofd that the apple music to hang over later this year. amazon.orting down 2%. it did hit a record high. shares currently trading down. for earnings at dictation, second-quarter eps expected at a loss of $.14 on 22.4 billion in revenue. expected to be the top apparel retailer in less than two years. rpc, piper jaffray and: have an

outperform were overweight rating as we go into the valve. on a five-day losing streak. two-month low. down by 1%. were expectations at least 64 cents per share on revenue of $33 billion. saying it hold rating has likely struggle to grow in the second quarter with fewer net at and a loss. n with an outperform -- cohe with a buy on the stop. looking at individual stocks, caterpillar stand the worst day of the year since january. 3.67%. sales the full-year forecast from 50 billion down by $1 billion to 49 billion. selling fewer machines because

of the fall in prices for copper, cold and iron ore. ending on good news or casino stopped. results came in better than expected. shares are up by 1%. it is interesting what the difference of one penny will do. analysts asked that the loss of $.61 per share. by full raising the price target to $65. $55.61. scarlet: thank you. 3000 william blair says mining machine carpark and then use right now. typically 1500. there in lies the problem with caterpillar business. scarlet: how can you raise your gdp forecast, more bullish outlook on the global economy with that is the case?

now for a look at top stories. it would create the biggest health insurance in the u.s. the price would be $48 billion. the announcement could come later this week. earlier another big takeover in the health insurance industry with aetna agreeing to buy humana. alix: big changes underway out qualcomm come just posting the biggest sales declined since 2009. it will cut 15% of its work horse, reduce executive pay and shake up the board. it will also review stretches -- strategic initiatives including a breakup. scarlet: one of the best-known names in supercar is now going public. ferrari being spun off. the automaker says it sees ferrari being valued at more than $11 million. -- $11 billion. those are your top stories. the worst commodity fund

in 13 years freaking havoc or just dressed investors. coal prices are slightly, bringing this year's loss to 12%. bloomberg distressed debt reporter joins us now with more. what commodities distressed debt is feeling the most pain right now? >> there are only three we're looking at. ore, andoil, iron coal. those are the three really making a lot of pain for a lot of distressed investors. reporter:owns them all hedge funds. you also have mutual funds members. a lot that they own and they do have distressed investment. you have a little bit or than just a does this hedge fund involved here. king obviously the

right environment but some say it is the time to go in because it is so hated. they make a difference between polity distressed debt and actual distress debt. go and when this situation is back, so you are already almost a contrarian anyways. it is sort of like when you have a distress investment and you're looking at the map, is it good enough for you get something returnable, or will you get zero? in terms of quality, they are talking about how safe is this? will i get the money back or doing something on the map that is not right? alix: my question is, why get involved in the first face when we have seen commodities roll over and nothing fundamentally has changed? reporter: i think people thought the price would write -- rise. walter energy is a great example. people thought whole is at 110.

105 able to bear. every quarter falling lower and lower. people thought that some point it will at least rise. now it is down 95, will that come back? they just made the wrong bets on the numbers. scarlet: give us a snapshot of the default rate. how does that pay with the average? reporter: kerry low historically. moody's predicting 3% in march. low. now it is still very even 3% still historically very low. investors have said we would like to pick up because it is better for investors. not thing that happened quickly enough for them to look at the larger situation where they can put money to work. alix: what are investors doing ? it was fascinating to me

investors were willing to throw money at this. reporter: to some extent that is still happening. i think you are seeing some of that. distracting, if you don't have something you like, you go outside. we are seeing that is not even working for investors. where distressed investors make a lot of the money. they understand where other investors do not. have decisions that have hurt them recently. washington mutual and nortel. these are places people that they could make a lot of money. setup this is a distressed investment and have not been able to make money here . opportunities are little bit lack right here. alix: i love talking about this. thank you. still ahead, the top three countries with the highest amount of foreign-born

immigrants. america is not on the list, someone tell donald trump. ♪

scarlet: immigration has been a controversial topic in the united states that america nowhere near the top being the highest form foreign nationals. alix: here are the top three countries where the immigrant population is the highest. vatican city 100%. united arab emirates and qatar. it makes a lot of sense. no one is born there. a small state within wrong. you have to go there in live there. that was fascinating. scarlet: these gulf states foreignntirely on labor. you think about the world cup and the people building the

facilities for the event all imported essentially from bangladesh, india, sri lanka. enemy -- amethe are immigrants. those have drawn the iron of human water rights groups to say you are not improving conditions for workers. scarlet: the flipside to this. which countries have the fewest number of foreign-born citizens or people living there right now? guesses? be on the listot obviously. number one china. number two cuba and number three indonesia. i love all the good information. stay with us. ♪

♪ ♪ ♪ get excited for the 1989 world tour

with exclusive behind the scenes footage, all of taylor swift's music videos, interviews, and more. xfinity is the destination for all things taylor swift. alix: welcome back to the topmberg "market day." stories crossing the bloomberg terminal at this hour. the obama administration sales pitch for the around your deal

turning into a showdown on capitol hill. john kerry appearing before the senate relations committee joined by treasury secretary secretary.nd energy lawmakers on both sides of the political aisle told them it is a tough sell. years took you two negotiate this agreement. it took you two men -- two months in vienna to get to the final details. we are on day four of the review of 60 days. i have not reached a conclusion. from my perspective, mr. secretary, i am sorry. thatnlike a hotel guest leaves only with a hotel bathrobe on its back, i believe you have been fleeced. the u.s. and five other world powers struck the deal. it would ease tensions for around promise not to build the air weapon. congress will vote on the plan in september.

president obama living -- leaving tonight for a african trip. he will head first two his father's birthplace, kenya. the president signed a bill that led some african countries l good in the u.s. duty-free. the fence secretary ashton carter on an unannounced trip to iraq. fense took over islamic state forces in may. he wants the report to settle secretary and conflict. it is his first visit since taking office in february. those are your top stories. an nasdaq has announced important agreement with the new york stock exchange to back each other's closing auctions, even if they are interrupted by a technical glitch. you will remember, earlier this month the new york stock exchange forced to suspend

trading due to technical issues. earlier we spoke with betty liu -- earlierumpton betty liu and mark crumpton spoke to the ceo. >> we're launching an exchange to compete directly with them. but this is a place where we wanted to walk rate. cooperate because our customers wanted us to. the whole financial system no -- wants to know the closing price, even though we both have great backups. this voluntary? >> i don't want to speak for in favory are probably of it, but this was a bilateral discussion that has been going on for quite a bit of time. betty: when that happened, a few weeks ago i was with several ceos at an event, and western was was this a cyber attack? was

is always a>> tie concern. ist we are concerned with contagion. -- that is always a concern. the order was found that things went along. k: when that happened, there seemed to be enough safeguards in place. was that the idea yet though the idea because of the financial crisis, because of the -- crash that enough firewalls all -- are in place now that you can still continue to do business in will ive?be that disrupte >> i think so. we sell the benefits of the competitive market. 10 years ago the floor went out of the market would have to stop. we and others were able to continue to trade. an approved market structure.

back each other up brings for the resiliency to the market. investors should be encouraged by that. betty: the last time i saw you you were in order and have launched new products. -- move further than that. i want to talk about energy futures. i know that is what you want to talk about. you are entering this new market and competing with 16 others. fcm's. hundreds of others. how do you compete with the more established players in the market? >> we've launched tomorrow. we want to get the system operational. the customers are saying to us that you have a monopolistic doo-wop listed set up in the trading of gas and oil. be price per contract could

8-10 times what we would charge in the equity options world. the result of having not enough competition and a vertical silo. we are responding to customer needs. they are partnering with us in this effort. i would have to say the interest has gone viral. please hearted with a small people. we have seen an inbound call. the naturals joining us in addition to the market makers and the global investment bank. bety: price that you are betty: it isth -- pricing your competing with? >> probably have. we will clear in a horizontal manner. the customer has better control over the open interest in the future. k: you just talked about decline in the industry. anything nasdaq and the rest of the industry can do to turn that around? >> equity a strong quarter. equity option is not so much.

i think options have been in a group phase. we are seeing it go through a little bit of it down a goal but the trend line overall is very strong. betty: i have to ask you about china. you were watching -- you are watching as the rest of the world what is going on in china and the regulators came up with the akoni and measures. limits on trade. got did you think you exchange ceo, what did you make of those? feeling, thel chinese market indices have gone up. if you look at the past three months, you should not have panicked, and i think that is what happened. anytime you put the controls in place, even though they might have a short-term benefit, you pay of long-term price. you and me as investors or anyone else coming into the to thinkarket have

twice. you can trade, get out of your position, you will be quite reluctant to do it. the penalty phase happened over a long amount of time. alix: the ceo of the nasdaq speaking with mark crumpton and betty liu. coming up, no room for rest. youtube cofounder chad hurley looks back on his deal to sell the site to google. ♪

alix: welcome back to the bloomberg "market day." look at the a markets. 15 minutes before the closing bell. looking at a dallas is looking at the worst day in four months. but that is right. not just the dow but read it the

board. the markets of their lows of the day. this is the worst or the dow in terms of the three-day losing streak. the s&p 500 down five point 6%. the dow down .7%. nasdaq down by about half of the percent. naked data clearly outweigh the positives. consumer confidence did hit a five week though while jobless claims fell to the lowest in four decades. going to the bloomberg terminal, -- we can see no sector is being spared from the red. utilities the biggest lacquer. materials down 1.5%. energy falling into red. it has been positive earlier today. gas and electricity companies are the main reason for the life. we are seeing a positive the rally today. trading lower by half a percent here. $97, slow since

range. the lowest level since july 14. the second time in seven sessions it has been lower. over to oil. and theirfficial, now market territory. the threshold was $49.14 per barrel. now trading below that. 20%has now fallen more than since june 10. this year the lowest level since march 31. other commodities, gold on track for an 11 straight day of losses. the longest losing streak since 1996. down about .4%. 1000 $86.80 per pound. it is false or two more sessions, that will be the office on the effort. this is the lowest we're looking at in february 2010. investors looking ahead to a credit rise, a failure rates

rise. if that happens, it will decrease appetite or goal. morgan stanley does say it may to maybe $800her per ounce. copper hitting the lows of the day. twot now copper down by point 25%. part of the reason chinese demand expected to grow at this lowest paid in two decades. teamowest since july 6 2009. software fifth straight day. the longest losing streak in 10 months. alix: good stuff. thank you. a look at the top stories. presidentialblican candidates now have the rules for the first debate but they will not all need them. only 10 white house hopeful will be on stage august 6 in cleveland.

late entrance like bobby jindal could be left out. it will make selections by offering the five latest national polls. americans are growing more downbeat about the economy. the bloomberg consumer company -- comfort index fell to a week with -- five week low. sentiment making among those making $100,000 the lowest in six weeks. those are your top stories. i want to point out another new york city institution falls victim to skyrocketing rent. this time paulson heifers, the meat hacking barth the basis for the film coyote ugly. the lease expired last year. the proposed rent jumped from 14,000 to $60,000 per month. way too much for watering hole that sells cans of pvr for three dollars. for three dollars.

those are now all of your top stories. these days youtube is ubiquitous . there once was a time when the internet channel success was far from guaranteed. emily chang sat down with the cofounder chad hurley on studio 1.0 and told her why he believes you to have died if he did not sell the company to google 2006. take a listen. emily: talking about -- continue to be this journey where we will only -- where we were holding onto her life. even after we became part of google. things accelerated from there. at the time we sold we only have 67 people in the company. we had two or three engineer, i.t. guys that would run around the country. at the time we did not have the

luxury of plugging into amazon web services or something. we had to go out and build our own machines. beyond that we were threatening basically both sides of the industry, the internet industry, google, yahoo! and microsoft. one to continue to retain their control. you also had the media world, traditional media world, studios and labels wanting to control distribution. they were attacking us to not do the right things around copyright, when in reality we are building all of the tools, more than any of our competitors and more policy than anyone else to deal with the problems and eventually create solutions where they could monetize this. with all of these people looking at us and for us to struggle because they keep things up and

running, we had no choice at the end of the day to be acquired by someone. for us, we were lucky enough to be acquired by google who in my mind took a chance on us. probably would not be here today were what it is today without their support. sell? you felt you had to i have no doubt if we had to go alone we would have eventually been crushed by lawsuits or not being able to scale. emily chang joins us now. what was your biggest take away from the interview? emily: i thought it was interesting he said they felt they would of been crushed without selling. it's on like he felt compelled to sell the company if google was compelled to buy it. one thing he talked about is the way you to operate today. how does you to maximize

potential revenue? he thinks they should pay content creators more and get them more power to distribute the content and to charge for video on demand. he was saying potentially upwards of 50% that you to check it creators of port of 60% cut. current ceo of youtube. he is met with susan on multiple occasions. they e-mail frequently. there are things he is given as well. was interesting, especially of facebook and twitter and all of these company are pushing so strongly into video. the most interesting and we talked about, kim kardashian and kanye west are suing chad hurley for videotaping their engagement at at&t park here in san francisco and putting it online. we did talk to them about the lawsuit. you will hear more about that on bloomberg "west." not know that.

you can watch her full interview ath the cofounder tonight 7:30 eastern. the big earnings after the bell. amazon, starbucks. we will tell you everything you need to know. the one number to focus on after the break. ♪

alix: amazon will report second-quarter earnings today after the closing bell. shares down 1% before the release. managing editor of north america business news here and joins me now with a preview. tom, what is the numbers you are a pain to? profit, andd is that has been elusive for amazon in recent quarters.

bezos will show something he is not shown a lot of, and that is disciplined. he has developed a reputation for spending, spending, ending. softting in facilities and -- software. a if we see profit become more of a focus, does that become an inflection point ? tom: i think what you are seeing if they are starting to see a payoff from the investment they have been making. that's quarter they started breaking out revenue from the web services division. they have put a lot of money and over the years. what you are seeing with startups is turning to amazon web services to do the computing. they are outsourcing to amazon web services. takening bezos has seriously and investing in. now you are seeing it trickled down to the bottom line. that is something investors have

wanted to see from amazon for a long time. are: not so much they paring back on the growth but investments for the past few years are starting to bear fruit? tom: that is part of it. also what they are investing in. less hardware and more services. delivery services. really quick turnaround. prime selling memberships. putting more entertainment into the bundle that you get as a member. the idea is to invest more in the software and services, that is less capital-intensive than capital, hardware. these are much more expensive. nevertheless, web services make up 7% of the overall revenue. they still make the majority of the revenue from the core business, which is selling stuff. the growth rate 20%, but slowed significantly from a few years ago. absolutely.

you are seeing a lot of competition come in. in the news. there are all of these areas where you are starting to see people come in and offer alternatives to what you get at tozon, so they have continually invest in what is the value proposition? how can i get another person to sign up for prime membership? value oft is the prime. they do not break up the numbers, so how do we know how to on a five that tackle -quantify- that? is loyal customers. people coming back to amazon day after day. are not going to grocery stores. they are not going to retailers. amazon wants you to come right to them. alix: guilty right here. thank you, tom giles. -- potentiallyng could pose the first earnings beat in a year. shares have been trending lower

today. jennifer joins us from bloomberg intelligent. what are you going to be looking at? what is the number ? >> what we're looking at the same sales and whether they are bringing stores -- getting traffic. alix: doesn't matter where they are getting the traffic? -- does it matter? >> we want to see their growing in times other than the breakfast segment. the mobile rollout will be a big question on today's call. people will want to know how far it has been rolled out, the results, and what they anticipate where the rollout for the rest of the country. all of those things are bundled together in terms of the overall strategy. prices?at about coffee know they look and well ahead. coffee prices are down on the year. they lock in prices,

there will not be in the media again. there is somewhere in there they can take advantage of the lower price. for the most part, they are locked in. could that be of use for them in the future gekko 2016 earning? >> they could next year, absolutely. alix: what is your expectation for the average check? >> we want to see the average check grow. they've put a lot of effort into putting food on the menu, promoting that. getting people to add on to just the coffee. we went to see the check rising. they did implement a price increase this quarter. you want to see there are additional items being added, in addition to the price rise that would cause the check to go up over time anyway. alix: talking mostly about the u.s., but what might be here --

we hear about the overseas plans? >> i think we will hear about china. it will be interesting to get their take on the consumer in china and whether they are seeing the growth they were anticipating. alix: we are very excited. good stuff. joining us with a starbucks preview. much more ahead. you want to keep it here. you are looking at the dow on case for the worst three-day drop in about four months and we will get a slew of earnings right after the bell. they with us. ♪

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alix: we are moments away from the closing bell. i am alix steel. joe: and i'm joe weisenthal.

[bellringing] u.s. stocks alix: falling. joe: but the question is -- "what'd you miss?" earnings fever. as slew of reporting in a moment. alix: when do we get lower gas prices? joe: and it is all about finland. yes, finland. why finland really matters to all of us. the s&pu are looking at closing at its 50 day moving average. you're also seeing the dow turn negative on the year, joe. joe: the benchmark oil in the u.s. officially going into a bearrk