good friday morning, you are watching "market makers." matt: i am matt miller in for erik schatzker. ahead, another big deal in health care. amazon actually posted a profit is now the time for investors to jump in. stephanie: we were not sure if we were going to let him back in next week and he did it on live tv. wise move. hillary clinton wants to talk about the " tyranny" of today's earnings report. what that could mean for wall street and the economy, coming up in just a few. matt: top stories, it is a deal that may create the biggest health insurer in the u.s. anthem has agreed to buy signal for $48 billion in cash and stock or presenting a 22% premium. the deal caps on must a year of negotiations that frequently were unpleasant and since a

wave of consolidation in the health insurance industry. at&t is on the verge of winning regulatory approval for its $49 billion takeover bid of direct tv. bloomberg north -- the bloomberg report said many commissioners have voted to favor the deal. the justice department will not challenge the deal because it does not pose a risk to competition. stephanie: president obama will land in the country where his father was born, kenya. he left washington d.c. last night. he is on his way to nairobi and will attend a global entrepreneurship conference, and meet with kenya's president. he will become the first u.s. president to visit ethiopia on sunday. a gunman opened fire in lafayette, louisiana in a movie theater. he killed two people and wounded

nine others before killing himself. the shooter tried to escape but turned back when he saw police enter the theater. governor bobby jindal spoke at a news conference. >> when these kinds of acts of violence happen in a movie theater, when there is no real good reason why this kind of evil should intrude on the lives of families just out for a night of entertainment, a lot of us are horrified and shock. the greatest thing about america is when any of us suffers, we all suffer. this is a time for us to come together. stephanie: police described the shooter as a 58 ural man with a criminal history. matt: confirmation that video games are a big-time sport. the players will be drug tested. the electronic sports league will begin random drug testing at videogame tournament, after a gamer said that he and his team used the game at her used the drug adderall at a tournament.

who at a videogame tournament is not on adderall? stephanie: i would like to in sure they all get their hair cut, teeth brushed, and showered before they head out. we are going to get you started with the five things you need to know this morning. how are you going to face these markets without our top five? number one, big big, deal. anthem after a year of talks it agreed to buy cigna for a whopping $188 a share or $48 billion. and them sees the deal adding 10% to earnings within the first year. matt: we will see if that goes through. we have been talking about this deal for weeks and weeks. the price has gone up at least $10 in the past couple of weeks. stephanie: unclear if it will work for anthony r cigna but in the last week, it works for shareholders. matt: number two, earnings from american airlines.

it beat on airlines per share but is on revenue. maybe more importantly, passenger revenue was down almost 7% in the second quarter, definitely more importantly as you can see by the shares. the company said it would double a stock buyback program explaining on a plan and announced six months ago. the buybacks always boost the stock. in the long run, is that a good thing? we will hear from hillary clinton. stephanie: this is the argument we hear about how corporate america and ceos are behaving. they are under huge pressure from activist investors. is that the right long-term strategy? they are not thinking that way because they do not know whether they will be there in the long-term. matt: julie hyman has number three. julie: cannot miss amazon.

revenue not too shabby, up 20% thanks to new initiatives to attract customers investors, as you can see, loving this. i should also mention it looks like it will open at a record with that huge gain and shares and the stock is already up 55% for the year to date. just days of saying, you want to see me post a profit ok. that is something he has been doing periodically. i want to mention starbucks that looks like it is going to open at a record, posting profits that rose 22%. you can see the shares rising i nearly 4%. in the americas 8%. when you look at the steady growth that starbucks has seen in those caught sales, it is enviable in the restaurant sector. it also has its sales that it gets from its products in grocery stores.

matt: thank you very much. number four, the ugly week in commodities, copper trading near its lowest level in six years. precious metals and oil have been on a downward spiral. city and goldman divergent on its price forecasts. goldman is calling for a seven year bear market. the bloomberg commodities index is down to a 13 year low. china is absolutely killing hard assets. stephanie: i am going to stay on china for number five, a dataset in china signaling a slowdown in the world's second-largest economy. manufacturing unexpectedly fell to the lowest level in 15 months. the economy had seen signs of stabilization recently but this may reinforce the need for

further policy support. we were talking about this yesterday, we saw luminary investors turn the ship around and say, i am out of the chinese game. more investors have not changed their view but have simply said, the volatility we have seen in china, the uncertainty around the data, i'm just going to put my pencil down and get out of the game. matt: when the government basically closes the market and orders holders not to sell, i do not want to be involved in that. stephanie: and i make my decisions by what matt eller once involved in -- matt miller wants to be involved in. hillary clinton is set to unveil her big plan today to fix corporate america. that will happen ligety split. she will be speaking at the nyu school of business later this afternoon, focusing on how to encourage companies to favor long-term growth over what she calls, the tyranny of today's

earnings report. gentlemen welcome. can you set the stage for us? what are we getting from hillary clinton? >> we are getting a second major economic policy address. this one puts a little more meat on the bones. she is trying to -- i do not think there saying anything quite as grandiose as "fix corporate america." matt: that is not that grandiose. >> not quite as grandiose, but politically she is trying to hit the sweet spot between making democrats and those on the left happy and putting her in a place where she seems as though she is a progressive, without offending people in the business community were on wall street.

she has four basic ideas that she is putting forward. they are not at this point super detailed. we have some guidance on the areas she is going after, a capital gains overhaul. changing taxation on executive taxation, a proposal to deal with reigning in activist shareholders and disclosure on the stock buybacks. those are the four areas but we do not have a lot of detail and the time. stephanie: i would love to focus on number three because to my right is an activist investor. let's back it up. is your political affiliation? do you have one? greg: i am an independent that leads -- leans a little bit to the republican party. i think the capital gains approach that she has discussed and her attacks on activist investors are ill-conceived

policy and probably bad for the economy and economic growth overall. she is attempting to, i think, but some artificial impediments in the way of the free flow of capital and the free flow of investment dollars. that seems to me to be a bad idea for both growth in the economy and for capital allocation. matt: if she wants a sliding scale for capital gains, on the face of it, that makes sense. you pay more capital gains if you are a longer-term investor. your reward is by your faith in that company. paying less capital gains tax. greg: you say it makes sense but i have not heard the rationale for that. it sounds like an ipse dixit for me. stephanie: what were did you just sayy? greg: ipse dixit, because i say it it is true. matt: her premise is that you

want investors in american companies to be longer-term investors. greg: and i think she is dead wrong. stephanie: why? greg: one of the mistake she is making is conflating the amount of time you hold your stock versus the interest. the best way to make a stock price move in the short-term, as we are seeing today for amazon is to demonstrate to shareholders that you have a better business plan over the long-term that will produce even better profit. stephanie: do we even give corporate ceos the opportunity to do that question mark just bezos is an outlier -- just days oh's -- jeff bezos is an outlier while other ceos have carl icahn banging down there door. after i bang down your door and you fall at my feet, i may sell the stock, holiday inn rope.

-- greg: that is probably great for capital allocation in the capital market because they will get them to make improvements. stephanie: why does it necessarily make improvements? one could say marissa mayer has has not done a fantastic job but it worked out fine for dan loeb. greg: i think the theory here is , if i can get a company to go from earning a dollar a year for every year in the next 10 years to earning instead of dollar 20 -- $1.20, perhaps -- what happens is the stock price moves very rapidly to the upside. you can make a lot of money in the short term by getting the company on a better long-term path. matt: let's get away from this argument about investors for a moment and let me get to you about the kind of tight rope hillary clinton walked in new york. at the same time as i sure is

she is courting wall street donors for money campaign, she is also kind of in a way kind of attacking at least the ideals of most of them on these point. john: on a political matter, she has the cover of blair efron. the capital gains proposal basically brings together an idea that the center for american progress a think tank with blair efron as a private equity investor and also a guy who is going to be supportive of this proposal so there is not uniformity in the investment community about these issues. there are many people who take the position that these are damaging and will not be popular on the right. there will be some disquiet in the middle. some democratic hunch fun people, and straight walls -- hedge fund people, and straight

wall street bankers. blair efron is the guy -- she is going to point to the fact that not everyone in the investor class is against these ideas. it seems to me on the capital gains front it may be less controversial than the proposal of what to do with executive compensation. what the obama administration learned was that that was the sacred cow. there were a lot of people across the spectrum who got very upset at the notion that the government should have anything to do with having incentivized, changing the tax code or in any other way getting involved in the question of compensation. that seems like it could be a more politically explosive discussion than the capital gains discussion. stephanie: i agree with that. matt: you are trying to change behavior through the tax code gives you the store -- gives you unintended consequences.

greg: even if she gets the intended consequence, she will stand in the way of people moving their capital from a place that they do not think is a great opportunity for investment to a new investment. it would delay the development of the next uber or the next twitter because the people who would be pulling their money from aeropostale and taking those gains over losses, and moving their money to over to develop a new taxicab service, will instead pause and think, if i wait another six months -- stephanie: hold on. we want the next over, and that is really exciting. matt: stephanie loves uber. stephanie: but what she is also trying to approach his income inequality and would not want to argue the income inequality crisis that we are facing in this country of the rich getting

exponentially richer is possibly more important than the next uber popping up? >> i think the next uber popping up and economic growth in using capital to develop new businesses is probably the best antidote to income inequality and the best opportunity for people to be employed. matt: it is certainly raising people out of poverty. >> i am not going to advocate for hillary clinton's posture. one of the interesting things the thing that they heard over and over again from the investor class was that it almost does not matter what the rules are, as long as the rules are clear. one of the things that they would say about whether there was regulatory reform or some of the things that hillary clinton is proposing, the capital will find a way to fund innovation. whenever the rules are, if they are clear, the market will figure, will route around problems. stephanie: that is a great

point. john: and ultimately us -- sustained, it will all be ok. lack of clarity, lack of certainty. if you have clarity and certainty, the market will figure it out. she will want to argue that. matt: i want to ask one quick question. you mentioned it does not matter what the rules are. john: i do not mean that at the extreme. matt: two that extent, the ig's that called for a criminal investigation into hillary's e-mail, your take on that? john: new york times story this morning. the big story about the fact

that two inspectors general -- i'm using the proper grammar -- the state department inspector general and the inspector general of the intelligence agencies have requested a criminal investigation with relation to hillary clinton's e-mail practices. the big take away here is this issue is not going away for her. we still do not know whether she has actually broken the law but this is ratcheting up. for anybody that has said, this is all a sideshow, it will not have any long-term lasting medical effects, that seems to suggest that this issue will be with her in a significant way for months to come. stephanie: will she be able to stick to her message or is this e-mail situation, could that end up being the real headline? john: she is not, to my knowledge, planning to take questions. she is giving a speech, but there is no question in the media environment, this story could not be worst time to for her.

the hope for her to have this day to herself to talk about these economic proposals, that is now off the table because at a minimum, you have the effective split screen. e-mail problems and policy issues, and you guys know the media the scandal will get more attention. stephanie: she has the data herself, she just does not have the storyline. john: we will hear a lot about hillary today. matt: john, thank you so much. stephanie: good day. i know how to do that. matt: i got nothing over here. stephanie: i do not think hillary clinton -- she will be speaking this afternoon at 1:30 p.m. in nyc. you can watch it right here on bloomberg television. it is time to give you our top stories.

american airlines taking advantage of record profits and a sagging stock price. the world's largest airline will double a stock buyback program. shares are down almost 21% this year. american posted second-quarter earnings that the analyst estimates. the japanese media company that bought the financial times has pledged to respect its culture. the ceo of the nikkei said the purchase of the london-based taper fits in with his strategy of approving -- improving overseas coverage. nearly a century after they debuted chucks, chuck taylors are getting a redesign. converse introducing a new version of its iconic shoes. it uses a more durable kind of canvas and has more padding. they go on sale tuesday.

you probably know this about me, i am very loyal to my stan smith's made by adidas. i have had chucks my whole life. you cannot keep canvas sneakers clean. matt: they were a little bit too alternative rock. i was more into punk and hard-core and jordan's. it is friday, so that means we are also playing the yearbook game today. check out this pic. his career on wall street is about as thick as his glasses. stephanie: he is a door ball. matt: we will be revealing the winner. stephanie: he went to bayshore high school in bayshore long island, class of 1977. i am going to think of who this is. tweeted at us.

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♪ stephanie: you're watching market makers. my partner, erik schatzker on vacation, but matt miller is here. breaking news in the deal space anthem has finally acquired cigna for 48 alien dollars. -- $48 billion. at hammond of our bloomberg deals team is here to break it down. ed: yes. stephanie: we have been kind of waiting for this deal. what do they have to overcome to agree to this? ed: ego. stephanie: matt miller thinks

ceos should not have egos here it matt: i think they should work in the interest of their shareholders that they serve. stephanie: so should men, girlfriends, tv anchors. welcome to the world. matt: the price was higher than we expected. ed: they bumped it a little bit but from where we were about a month ago, it is a fairly small adjustment. what really changed was the social issue. when this came public, they had been talking for almost a year so they had a long time to look at each other, where they would overlap, and what a reasonable price to do the deal once. the since we have is that a sickly both sides are comfortable. the one thing they never felt comfortable with who would run the company. the cigna cheese -- chief executive wanted to be had and the anthem chief executive said something fairly similar.

now they seem to have come to some sort of happy medium where they both get two hats and the roles in the combined country -- company. matt: and they get paid. ed: and they get paid, and they have put a better health website up where they are shaking hands. stephanie: do we know anything golden parachute wise? if these boys cannot get along, what does one of them gets as his consolation prize? ed: it has not been outlined but i would have to believe it would be very substantial. matt: what about regulatory hurdles? the doj has been very active. ed: have already telegraphed the fact that they will be up on these guys. it is a certainty that this gets heavily scrutinized and it is probably going to drag on for a while. the doj will look at it and make a case. we have another deal in this

space going through at the same time, we have the humana-at net deal. these two deals will go through simultaneously in front of the doj, or try to, so i think it will be tough. matt: and the obama administration does not want to be known as obama care and all the health insurance companies joining together. ed: it is very easy to make case that you need to look at it very carefully because otherwise, consumers could end up being badly treated. i think it will go through regulatory loops and it will take a wild to get done. the interesting thing is how both advisers on the two deals will try to sell their deal as the one that is the best and least damaging for consumer interest. matt: thank you very much joining us is at hammond. ed: don't i get a fist,?

matt: the stock is up 20% in the premarket as the company posts a surprise profit, even though it was almost no money at all. for more on amazon's earnings michael packed her joins us. is $92 million on $23 billion in sales really worth a 20% pop in the premarket? michael: i think it is because i think it is a signal that management is going to be disciplined and will be labor process -- profits when people do not expected. i think the story of amazon is that they can only get to $20 a share if they generate profits consistently. they did not do that the middle part of last year, losing over one dollar a share. they make $.19 this quarter. i think you will see consensus go up to a positive number for

september, and it was a consensus lost of close to $.50. there is no question in anybody's mind that these guys will grow topline for the next five or 10 years. the question was, will they translate that into profitability? stephanie: is it any real threat to amazon when we see the likes of walmart trying to "go after them" or is amazon in a league of their own? michael: i am so the. at up. we looked everywhere and we went to three shoe stores and nobody has an amazon. -- but amazon. they are very popular. the point is, we all know that.

walmart caters to the middle class. i think the higher end are not likely to abandon amazon to switch to walmart. matt: did jeff bezos show us more than a 3/10 percent margin? if you can make $92 million can you make them hundred $20 million -- make 900 $920

million? >> absolutely. they made more than $20 billion in increase in profit. i think that is why the stock is up so much. i think people see the leverage in the model, especially in amazon web services. we did not even know what the revenues were present division until three months ago. you're seeing amazing traction, 40% sequential profit growth. 391 million dollars, a big number on a $1.8 billion pace. stephanie: of all the names you cover, is amazon your favorite? >> not even close to it is the

best customer experience ever, but i am in love with pandora, and i think people do not get it. the bears think that record labels have leverage over them, and they are wrong. if they think about it in the same way as netflix coming your looking at a $35 stock, not a $15 stock. stephanie: ima's bona fide person -- i am a spotify person. betty:matt: thank you for joining us. in lafayette, louisiana a gunman opened fire in a crowded movie theater last night. authorities just been to defend shooter as john russell. police say he killed two people

and wounded nine others before killing himself. they say the shooter tried to escape but turned back when he saw police under the theater. he was a 58-year-old man with a crucible his three -- criminal history. stephanie: the justice department has been asked to open a criminal investigation into the controversy over hillary clinton's e-mails. that is according to the new york times. the case has to do with whether sensitive information was mishandled. she used a personal e-mail account while she was secretary of state. inspector general said to that truth of e-mails contained classified information. secretary of state john kerry spoke today on nbc's today show. >> and the state department we have a whole team working extremely hard to get all of the required e-mails out to the

public as fast as possible. i cannot wait until that happens. i am sure it will be cleared up with the final release as we get this done. stephanie: hillary clinton has definitively said she did not e-mail any classified material. matt: there will be an encore for the dinosaurs of jurassic world. the movie has taken in one half really dollars worldwide. universal pictures plans to bring out a sequel in three years. costars chris pratt and bryce dallas howard will return and so will producer steven spielberg. i'm sure it will be an amazing epic. stephanie: i know loads of people will go see it. big pharma companies racing to get their cholesterol drugs to market.

what will these multibillion-dollar but wristers mean -- blockbusters mean for the industry and patients? ♪

matt: a big deal going on in health insurance today. and some of right now, cigna down after a $180 share offer. stephanie: the fda is set to approve a blockbuster cholesterol-lowering drug later today. the drug could be a game changer for these companies and the patience of genetic conditions or who take drugs like lipitor with no success rate the market has been betting. big.

we've written in true or -- we bring in drew armstrong. you say this could start a drug war on pricing? >> in , maybe sooner there could be a similar drug from amgen, pfizer has their own drug that is a couple of years out. they are enough like each other that insurers are going why are we going to have to pay such skyhigh prices, we will put you against each other and go with whatever the lowest ice we can get as they will do the same thing they just did and hepatitis the, with some of those super expensive medicines. matt: do any of them have drugs that make sense or will sell? lipitor and viagra are successful. >> pfizer does not have a brand

name just yet, but it is crazy names. fda approves all of these names and you did something that is going to be a global brand we do not want it be donkey in spanish or something like that. you cannot sound like something you would market with. you cannot say take hamburger away and eat as many sticks as you like. matt: one of the things that is the issue is the cost. these the kind of drugs that you take for the rest of your life. >> these are injections that you will take either every two or four weeks or something like that. they will cost thousands of dollars. analysts are saying around $7,000, $10,000 a year for a vision for the rest of your life producing of the noise of people who are on staten with drugs

like lipitor crestor purred -- lipitor or crestor. you are talking potentially, if these labels get approved and writing, about the same huge group of people eventually being on these drugs. matt: financial growth in cost. but it is much cheaper than having a heart attack or a stroke. >> it is, but at the race we're talking about for some of these drugs now, if you're talking $10,000 a year, or patient, to event a handful of heart attacks -- keep in mind when you are talking about reducing a red heart attack, it is a good thing to do, but it is a relatively small reduction risk. there has been a huge double velvet of it but not original person is going to have a heart attack and you're not going to stop every single one. stephanie: a way to avoid being on these and drugs would be to exercise, eat better, and get more sleep. >> these are marketed to those

who have a genetic condition. some of overproduced cholesterol, and it will help. stephanie: thank you for joining us this morning. matt: still ahead -- stephanie: i thought surfing was hard, but surfing while on fire, this is not even the most amazing sure route will have this when we return. ♪

stephanie: look at that roof cam from bloomberg world headquarters right here in the town, new york city. such a beautiful morning. i am thrilled that you are all with us.

let's talk about yesterday. yesterday marked one of the busiest days of the year for earnings. julie hyman joins us now with a look at the four stocks poised for moving in today's trading. julie: a lot of these reported after the close yesterday, and they are moving on it. take a look at pandora, starting off. of the stuff is up 11% this morning. a big again. earnings beat estimates. this report demonstrates that with all the competition out there, that pandora can hang on to listeners. spotify is a lot of work to me i want to put one song in there and have them shoes everything else for mee. revenue was up by 30% and they

are growing the number of listeners. starbucks is going to open at record today. the shares are up 5% right now. in particular, and america's, the same-store sales was set by 8% -- was up by 8%. they are pushing the digital sloot and loyalty site to their business and saw a big uptick in the people who were a part of their loyalty program. drugmakers in biotech and biogen. down 12%. basically it is waning demand for top-selling drugs that treat multiple sclerosis. very quickly, trip advisor coming in below estimates as well. pricing pressure in europe, in particular. that is leading people to take smaller, shorter trips, locally. stephanie: we're going to do

picture this i dime staring at my phone. i'm about to blow your mind. matt: in gene keady, -- in tahiti all-star surfer and read full partner to create an extent, setting themselves on fire before catching a wave. stephanie: erik schatzker is on vacation in canada right now. i am thrilled that he went out there and caught a big fish. that fish -- check out erik

schatzker flexing, that is not a normal post. matt: i cannot believe how good-looking he is. stephanie: look at this fish. we miss you eric. when we returned, maybe this is why he is so thick, it is bullet proof coffee. ♪

stephanie: picture is pretty make a hot product we develop a celebrity following, and your release to get to the next level. that is exactly the circumstance that all of proof coffee using right now. today they are announcing a $9 million cash infusion from trinity ventures.

their popularity continues to be helped by hollywood names like jimmy fallon and gwyneth paltrow, who are known to consume the butter infused to drink. this is big news for you, but $9 million is not actually that much money. why are we not a guided -- why are we that excited? >> it is a disruptive thing in the coffee industry. it is something new, it is not been done before. it is accelerating very quickly. we just show people how different they can feel. matt: i have been hearing about this from one of my producers. where are we going to see it? she is always looking for better to put in her coffee from the hotel. can we put gifted as a retailer? >> you will be able to get it in

retailers later this year. stephanie: what exactly is the value proposition in this coffee? i drink your other products, and i try not to eat or drink things labeled fat. these are not really things i in game four. -- game for. >> fat does not make you fat. we have been misled by that. the premise behind doing this is that when you have the right kinds of fat it actually tells europe body to burn fat for energy instead of sugar. matt: what are you thinking as far as more products go? you could take this beyond coffee and water and have a whole line of product that revolve around this idea. >>?

it is all about things that increase human performance. we also sell the smart substances that make your brain work better. it is not just about how the coffee was grown, it is what the coffee does for you. precision engineering the foods for human health. stephanie: how g-v sure this does not end up as a fad? it seems like every year there is a new way to get hot physically. how do you make sure your business is not hot today, gone tomorrow. >> atkins is a 45-year-old diet going strong. i want to be that kind of fad. i think the internet has allowed the real science to come out about nutrition. stephanie: congratulations. ♪

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. stephanie: good morning. it is 9:00 a.m. even closer thano to the weekend. matt: i am matt miller, in for erik schatzker. he is fishing in canada. stephanie: check out instagram. look at him. he is flexing while he is fishing. matt: as a monster fish. stephanie: here's a look at your top stories for the morning. we have to get serious.

it is a deal that could reshape the health-insurance industry. in 7325 cigna four $8 million in cash and stock. that represents a 22 percent premium to the closing price yesterday. they could potentially create the largest health insurer in the united states. this comes three weeks after the big deal of aetna's agreement to buy humana. federal regulators are about to give the go-ahead to another deal. a majority of the ftc's committed servers -- commissioners have voted in favor of the at&t deal for directv. they say does not pose a risk to capo competition. matt: amazon reported surprise second-quarter profit.

the amazon cloud business has been booming and is taking new steps to attract customers. last week's prime day sales promotion could not have gone better. >> the results of prime day six surpassed all of our expectations. customers save millions people signed up and higher numbers than any other day. matt: they surpassed walmart in market cap, becoming the world's most viable retailer. an american airlines is taking advantage of record profits and a sagging stock price. they will double b buyback program to $4 billion. twothis morning they posted earnings that beat estimates but sales that mess. those are your top headlines.

they are seeing a drop as well as other airlines in passenger revenue for -- passenger revenue for available seat mile, they are seeing a drop in net of 7%. the problem is capacity is expanding and they do not have pricing power. the interesting thing about that is that the justice department is investigating the four top airlines because they think they may be colluding to restrain capacity and whose prices. i find it interesting. stephanie: without a doubt. we have more on the makeup merger in health insurers this

morning. anthem has agreed to buy signal. we have been covering it all morning. the two entities will now be the largest health insurer in the united states. jason mcgovern joins us now. what is your take on this deal? jason: is a great deal orient them. then become the largest health insurer in the united states, but the concern is you now have two insurers doing big deals of the same time, and and. whether the justice department will actually let go both go through is a concern. matt: the deal as cash and stock, you'll receive half a share of anthem as well as cash. jason: there is a concern

whether united health would come in and make a bed. id. there is no real president -- precedent for going from five to three insurers and there is a lot of overlap. the justice department will look at both deals at the same time and there is a lot of investors posit -- divestures. they are concerned because in the past these deals have led to higher premiums and this is even with the justice department inquiry investment -- requiring divestment. paul:matt: basically, there are

enough concerns holding those back room premarket. a 22% premium yesterday seems a little bit too significant to leave on the table. jason: you could have those concerns for those playing the albatross strategy whether or not these actually go through. there are a lot of concerns about that. you do know that this deal is definitive, where the last couple of weeks the bids have been rejected. there were concerns. there is some certainty, but the deals are not expected to close until late 26 team. there's a lot of regulatory uncertainty baked into these bids. stephanie: thank you for joining us. matt: complaints about aging

roads, bridges, and more problems with the u.s. infrastructure. is anyone doing anything about it? a company that has come up with a potentially very effective solution. ♪

matt: it may be summer but that will not stop us from checking report card. the most recent assessment of america's infrastructure showed we are not doing very well. railroads get a c plus, drinking water gets a d, energy gets a d+. these grades are from 2000 13 so what we are checking today is whether we improve or fell in the last two years. a global construction company that is working on some of the big projects that we desperately

need to get fixed. thank you for joining us. in all fairness, i did notice that the society of american civil engineers say that they look better than 2009. they do not get a passing grade in my mom spoke, but they are going forrom a d to a c. >> my answer is, it is we should not be happy with what it is right now. matt: fair enough. i do a lot of driving. i drive in a lot of other cities in other countries. the rose looks a lot better. when we doing wrong? >> i do not know why the politicians do not take this on. the reality is we need is funded. we have the capacity in the

industry to build roads, ridges, tunnels triggering facilities but it is mind-boggling that we do not take this seriously. from my first active, if we are going to compete in the world economy of each wheel to move people, data and products. if we don't, we will not compete. stephanie: the lobby for this type of funding is not strong enough to read when he think about how politicians get elected, how budgets get approved it is because voters demanded. others simply not paying attention to have a strong enough lobby? >> a very good point. that is probably true. but investing from the politician standpoint is the best thing we can do. the returns are fivefold. in my field, it makes all the sense of the world to be able to deliver the infrastructure. matt: and yet the house at the senate cannot get a decent highway trust fund bill passed.

three out of the next six years funded and they want to leave an open ended. all the politicians agree this is a good thing to spend money on and to do right, but none of them can get together and make that happen. >> think about what is on the table now. we're talking about funding a bill that looks is like bills we have had in the past in terms of size. $50 billion has brought us to hear. for us to improve, we have to spend more than that. c and d is not acceptable for us as a country. matt: we can count on contributions as well. we have a lot of these hybrid public partnerships -- private public partnerships. >> there no question that is a way to do that.

matt: how does it work? >> a company might develop a project, we would have two designers, builders, operate and maintain it and we would finance it. private funds get injected into the investment, and then we would sell bonds or a number of different ways to get financed. a couple things happened. our view of the project now is through its life, unlike like a conflict agency that looks at the cheapest capital cost, we look at the operating cost over its lifetime. we want a cheaper number over the life of the facility. it is a stopgap. there is tons of private money looking for a place to invest. matt: is this the future? you're doing a project on florida by 40. -- i-40.

is there more to come? will you fix look la guardia? >> we have been selected as the preferred bidder. we certainly hope we get there. we will deliver a new, world-class terminal. stephanie: i look forward to that. matt: it is new york city, you should have a pretty decent airport. thank you for joining us. stephanie: we will now play the yearbook game. check out those glasses. he is a wall street guy went to bayshore high school in strong island, and graduated in 1977. that jacket is smart. that is all our producers are telling us. help us out. tweet us your guesses.

be creative. not just his name, tells about him. matt: i once played in a ping-pong tournament against the guy. stephanie: commodities are set for a third weekly loss. what to the banks have to say? ♪

matt: let's check this morning's headlines for you. a developing story that we are following, officials in louisiana are now naming the man who killed two people and a lafayette theater. john russell hauser opened fire last night during a movie. police are searching a motel where does believe the suspects stayed.

defense secretary ashton carter is an northern rock today. he's getting an update on the fight against islamic state. it is the second stop in his unannounced trip. it is his first trip since taking office five months ago. firefighters in northern california aree finally getting the upper hand in a place that has scorched 11 miles . napa valley residents are getting ready to go back home. stephanie: the surprise drop in chinese manufacturer is dragging metals lower. an index measuring metals manufacturing fell to a 15 month low. commodities are on track for a third weekly loss, extending the decline to a 13 year low. alix steel joins us now.

what is this overarching theme driving commodities? alix: this is an enormous week for, these, i cannot stress that enough it was based. the real concern is this forecasting a weaker economy in the second half of the year? that yield is now below 3%, which lends a little credence to the overall concern. matt: what is the outlook? it is at a 13 year low, it cannot be overstated how crushed it is getting. but we do not see gold back to precrisis levels. i do not see a lot of street analyst calling for to drop below $400 announced -- an ounce. alix: this is a retracement from what we saw and this will lead

to two significantly lower prices. we are at a critical technical juncture. but you brought up however which is a fascinating topic. you are either bearish or bullish, banks are completely split. goldman sachs took them to the woodshed and downgraded their price target. on the flipside, citigroup has a 180 view. >> we have about a 180 a different view from the one you just portrayed. we think it is one of the bull markets that will emerge by the end of the year. matt: this is the guy who have the $20 oil target. alix: $6,000 at the time over by the end of the year. others have much less. it is split between we are yes we are in an oversupply market,

but the demand. is to china going to buy enough to support this wildcard? it is fascinating. at all hinges on what the government can do to prop up the chinese market. matt: when it is getting absolutely crushed commanding of this whole china problem, it is more interesting. stephanie: you can see alix steel login at 4:00 p.m. on what you miss. coming up, they hauser recovery back in full swing. where our homeowner rates falling? ♪

stephanie: welcome back. i'm here with my partner for the day, matt miller. we are a few minutes from the

opening bell here in the united states. our bloomberg market day executive editor has are three things to look at. tracy: let's bring up the chart of the dollar. you see those spikes? each of those have coincided with trouble in emerging markets. back in 1980's we had the latin american countries, in the 90's the asian crisis and now the feeling is combined with the huge commodities route. the two are intertwined. when you get a rising dollar you gain either a credit crunch or commodities crash. either of those things are pretty bad for emerging markets. stocks versus credit.

the difference between the vick's and the market pdx index. stephanie: the cx, the credit derivatives index that moves all of the on the run investment-grade corporate names. tracy: it allows them to predict their bond holdings. the difference between the two is reaching a multiyear high right now. credit investors are more e fearful that stock investors. stephanie: even though they are higher in the capital structure. tracy: a lot of high-yield issuers are energy companies and their suffering enormously. it is quite dramatic. the last time we saw a difference was the high back in 2013 right when people were worried about the fed ending its healing. -- its qe.

stephanie: this will be one of the times when alson professional investors record of to work for their money and one half of the street has one view the other half is the other, and we look at the vix compared to the ctx can and investors cannot just go along and strong and ride this out. it is going to be one of those years that separates the men from the boys. the wheat from thepeople say the wheat from the chaff. tracy: let's do a bit of an outlook for next week. we have not had a lot of u.s. economics lately. we get a whole bunch next week including your gdp numbers and revisions to gdp. normally the focus would be completely on gdp. this time we are looking at productivity because productivity has been one of the major mysteries in the u.s.

economy for the past three years. it has been stubbornly low and a lot of economists cannot figure out why, but that cannot figure out why. matt: after it was amazingly high. tracy: if we see it is revised significantly higher, then someone was worried about something that was a data issue. we had guys like goldman sachs saying the reason that productivity is so low is because the grand theft auto and the fact that we cannot measure improvement in things like video games as well as we can in semiconductors. matt: because people are playing? tracy: because grand theft auto is getting better but we have no way of measuring it. stephanie: the graphics of women getting clubbed and hit have gotten so detailed. where is the metric for that? matt: i play the game. stephanie: what do they do? matt: they do run over people

but it is gender-neutral. and to be honest, i don't think grand theft auto has improved that much. i have been playing the last few generations. call of duty, however, has gotten a heck of a lot better. and halo -- stephanie: we have to move on. when that was talking about how the day would go just so you know, that took us back a few. not that i am the decision-maker, but if i was -- tracy, i hope you are around next week. here is a woman that is with us every day. the julie hyman is looking at what stocks are moving here at the open. julie: unable to weigh in on video games. we are seeing stocks overall not much changed out of the gate but it looks like rebounding potentially from the three-day slump we have seen, all earnings driven. we have turned our attention

away from greece mostly away from china on a data overnight was disappointing. let's take a look at amazon. that is the big earnings report that we have been covering today. the stock is surging, trading at a new record today and building on the already impressive 55% it has risen this year. the company is up about 18% reported a surprising second-quarter profit. when you look at the expenses operating expenses grew slower than sales, up 17%, so essentially jeff bezos pushing that lever to get to that profit. starbucks looks to be another stock trading at a record at the open. $58.64, up 4%. sales in america on a couple basis of 8%, better than estimated. the company has been adding new loyalty customers, instituting

order ahead with its app, and other features. also impressive growth in china. up 11% on a comparable basis. there is the big deal we had been talking about for a while which is finally happening. and then buying -- anthem buying cigna. both companies shares are lower right now. the two had been engaged in discussions. anthem had made an earlier offer that was rejected. interesting that it is trading below the offering price. perhaps this could reflect concern about antitrust. matt: that is a hell of a lot of pessimism. you are leaving $40 on the table because you are worried about the regulators?

i understand, the doj has to look into this, the obama administration cannot reside over a big reduction in the competition to zero, but trading at less than $148? julie: i will come back later and see what could be accounting for that. stephanie: and she has time because she is not playing video games. matt: part of the offer is have cigna shares. so that number will get smaller and smaller, but not that small. also, i don't think those videogames is necessarily a waste of time. it improves my creativity and focus, but to mention hand eye coordination, and empathy -- stephanie: let's go. matt: new home sales numbers for the month of june.

what can we expect today and will it signify the recovery is in full swing? i continue to hear that from people. let's ask the senior executive vp at a commercial real estate brokerage firm. thanks for joining us. is the recovery in full swing are we doing incredibly well in housing now? >> great to be on the program. it is absolutely in full swing for residential and commercial for four major reasons. you have demand being spurred on by 3 million jobs a year demographics. secondly, very few limited supply across the sector. the third factor is the fact that the distress is getting wrung out of the marketplace, especially for residential. lastly, low interest rates. consumers on a housing side and investors on the commercial side are taking advantage of that.

matt: are we going to see millenial jump in here? there have been so much talk about not wanting to move out of mom and dad's house, renting instead of buying a place. the attitude is just different in terms of creating a home. as rents rise, buying a house and building equity becomes a more attractive option. >> that is absolutely the case if you look at the traditional way of looking at housing. the more up-to-date way of looking at housing, the way millenial's and aging baby boomers are choosing to rent for the flexibility that comes with renting, the urbanization of the housing market. there is so much preference now to be in urban areas near the accommodations of an urban lifestyle, and transportation is a major factor. people just do not want to drive. when you add that up, you see the reflection of that in the

kinds of products being built. 80% plus urban types of products, and concentrated in about 10 or 12 metros across the country. we are not seeing a major building boom. stephanie: from the residential real estate perspective, we have seen cities like miami, new york l.a., more people want to stay in the urban centers. what about cities that have a tougher road like chicago, detroit, baltimore? will be seeing being residential investment to attract people to live in those city centers? >> that is the best question. the trends that we talk about in urbanization, the answer is yes. it is happening slowly. the reason it is happening is jobs. we see the spread of job growth beyond the leading metros that tend to be the coastal markets, energy markets now going into a slowdown because of oil prices technology market, and now we are seeing the heartland that

shows, like columbus, ohio, indianapolis, adding 15,000 20,000 jobs a year. so the job growth is spreading to those markets and to suburban areas. that is really beginning to show up in the housing numbers and in the demand for existing homes. if you look at where we are headed, given the fact that that that that demand on housing, because of lack of new construction over the past five years, is coming into the market now pretty gradually, so it is not creating a bubble. because of those 3 million jobs confidence is going up and people are buying homes again. matt: thank you for joining us. again, watch at the top of the hour for numbers. columbus ohio -- columbus ohio incredibly well educated, very entrepreneur, and the home of the greatest college football team in the world. stephanie: i have been to columbus, ohio.

i went for a football game. it was absolutely awesome. matt: go bucks. stephanie: when we return, as fifa president sepp blatter prepares to give up his seat in february, we will speak to one man who plans to run for the job opening.

matt: sepp blatter's time at fifa is running out. he has until 2016 before his job is up for grabs. fifa has faced a tumultuous year after 14 officials were indicted with corruption charges. our next guest hope to change their culture, is elected president. the former chief of vice president for 17 years, now an honorary vice president and

candidate for sepp blatter's position. thank you for joining us. fifa is an organization that now, after the scandal, people automatically assume anyone connected is corrupt. how do they change that, how do they fixed that? >> what fifa needs at the moment is more transparency for no corruption, more development for transparency. the president of fee fifa should disclose how much salary and bonus he got every year. we need institutional reforms. we need checks and balances between the president, executive committee, and judicial bodies. stephanie: talk about the time when you were part of fifa.

for those of us not in a dzhokhar world -- soccer world, we were shocked, but those inside said that fifa was corrupt forever. when you were a part of it, was that evident? >> i would say president blatter has been running fifa for the last 40 years, as secretary and president. he was elected in 1998. at that time, his opponent was the president of the european association. if your hansen had gotten elected, fifa would not have been in this mess. stephanie: so the corruption is the fault of sepp blatter? >> it is those people who are corrupt. stephanie: meaning sepp and the people he put in place. >> his cronies. stephanie: so before there was no corruption. sepp is the root of corruption

and the cronies that he put around him. >> i can say fifa can be in much better shape if blatter had not been elected. stephanie:matt: why is he still running fifa then, why is he not thrown out and brought to justice? >> we can ask ourselves, what is fifa? they are an international sports ngo. fifa lost its identity under president blatter. stephanie: were you part of fifa while sepp blatter was president? >> yes. people say i was more or less, the only executive committee member who had been a persistent critic of mr. blatter. stephanie: did you openly

criticize sepp blatter or try to publicize the corruption while inside fifa? >> the executive committee members are elected by regional confederations. however, mr. blatter has exercised undue influence over those elections and blatter undermined the independence of the executive committee. matt: you did write a book exposing a lot of the things happening in fifa. sepp blatter would make ridiculous suggestions to the executive committee and even if they did not agree with them they did not always support his suggestions for the way fifa would work. >> the executive committee that is the reason why we failed to

oppose his proposals to choose to world cup venues in 2010 at such an early date. that was the beginning. matt: 2010 was the first time they chose to world cup destinations at once. they chose qatar, which does not make any sense. why would anyone want to play there? it is too hot and they have no history in soccer. and russia. it is like committee members were trading votes with each other in order to win favor with some lobbyists. >> fifa now claims both trading -- vote trading is against regulations, but it was president blatter who made people involved in that kind of thing.

matt: allowed those kinds of ethics. >> president blatter and his executives should step down immediately to have fair election for the next president and i want to pose a public debate among presidential candidates so that they can show the world to have faith in fifa. matt: thank you so much for joining us, chung mong-joon. a candidate for the presidential chair now. stephanie: good luck and thank you for joining us. we are near the end of the show, so we have got to reveal who the man in this week's yearbook game is. graduated from bayshore high school in 1997. i was not sure who it was. i was so smitten with the jacket and glasses. it is none other than the former ceo of the new york stock exchange duncan near our.

matt: i miss this guy. i would see him on an almost daily basis. i am told that we have been on the phone with us. stephanie: duncan, are you with us? matt: do we have you duncan? stephanie: we are going to go to break. you have to follow us on twitter. people thought it was david letterman duncan near our, my college roommate, hoping to get a good story. those glasses bring him back. ♪

stephanie: you know him, you love him, and now you have seen his yearbook picture. duncan niederauer graduated from bay shores high school in 1997. duncan is on the phone with us. wendy to stop wearing those glasses?

we know you had a college roommate named mike avie. was it like who said to you, if you want ladies, lose the specs? >> you are pretty close. i stopped wearing glasses early in college. you can see, it was not a look that was working for me or anyone else at the time. stephanie: you did have some good hair. >> always had good hair. matt: now. we hung up when you are running the new york stock exchange. i now see your name in combination with a lot of bitcoin ventures. still interested in that? >> it is the first chance in my career that i have had the opportunity to build a port olio, instead -- portfolio instead of doing one thing all the time. i continue to do a lot of the special needs and veterans work which is really important to me. in terms of other stuff, private equity stuff, angel investing which has got me involved with

the couple of blocks chain companies. the private company advisory work we do and battery, as well as a couple of boards. a pretty good portfolio. i'm enjoying it. stephanie: a couple weeks ago when you saw the shutdown at the nyse, were you thinking, glad i'm not there? >> a lot of people were trying to get me to come onto various media programs that day. matt knows me pretty well. that would never be my style, not my place to comment because it is not my job anymore. several of my friends took care of that for me by texting and e-mailing me saying, i bet you are glad you are not there today. the technology is very tough. things are moving faster and faster and i'm sure everyone is working really hard to prevent those but there is no easy answer for that stuff. matt: always takes the high road but i will go on record saying i think duncan and his organization would have taken care of the problem a lot faster

and better. stephanie: i will in the week on a high note. duncan, u.n. done a great job, they did a great job, but i love your high school look. we want you on the show in person with those glasses and bring back the jacket. kudos to you. you have had amazing hair from the start, and still do. >> that is what it is all about. stephanie: why do you have to say that when i am sitting here with matt? matt: ever go back to bayshore's and get a tie at salvador's? >> my mom and dad went to the same high school and they inducted me into their hall of fame, my compliments -- for my compliments since then. we went to a restaurant to get my mom's favorite sandwich. leggio's. stephanie: what is your favorite sandwich? >> hand, pepperoni lettuce,

mayo, hot peppers. mayonnaise and lettuce. stephanie: that sounds disgusting. matt: i am sure it is delicious. good luck thank you for joining us. we hope to talk to you soon. stephanie: thank you for being here. i will see you monday. it is not all about the hair, it is about the heart. have an awesome weekend, see you on monday. ♪

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>> good morning. it is 10:00 a.m. in new york city. >> welcome to the bloomberg market day. amazing amazon. the stock on a tear after reporting an unexpected tiny

pistol quarterly profit. -- tiny but still quarterly profit. >> filler clinton's plan to urge investors to focus on long-term growth. it may mean higher taxes on capital gains. >> want to own one of babe ruth's hats? it can be yours for the low price of $300,000. we will tell you about it. >> good morning, i am olivia sterns. >> i am matt miller. new home sales. >> this economy isn't so much fun. just only thought the housing industry was picking up and that was going to help drive the fed toward it interest-rate increase we get this, the biggest drop