kong. mark: hillary clinton is expected to speak. we will bring you her remarks here in new york at 1:30 p.m. betty: president obama visits kenya and ethiopia this weekend. what he hopes to accomplish. mark: amazon has been pushing regulators for permission to use delivery drones and now they are teaming up with google, verizon, and others to create a special air traffic control system for drones. betty: good afternoon. i am betty liu. mark: i am mark crumpton. thank you for joining us. let's begin with a look at the markets. stocks are falling for a fourth day in a row led by disappointing results from several companies and declines in biotech and raw materials.

we see shares of amazon rise after the e-commerce company reported a surprise surge and withis in talks to reunite visa europe, and is up. the indexes advanced is less than half of the s&p 500 through thursday's trading. as you see here -- the divergence here, the bloomberg terminal. the monday ibm earnings made an impact in the day after his when we got apple, microsoft, chipotle earnings. oil is in a bear market for the first time in three months. the strength of the u.s. dollar is weighing on the commodities market. brent is below $55. nymex crude is down nearly 1%, trading at $48.02 a barrel.

gold prices are at a five-year low. the precious metal is trading below $1100 an ounce. betty: a check on the treasury markets -- the same situation we have seen pretty much all week long. gapyield curve -- the between the shorter and the longer end of the curve is actually shrinking. right now you are seeing the two -year yield come down. it had been going up pretty much the entire week. the 10-year yield is also falling, has been the last two weeks, down over 5%. in the community -- currency markets -- district the u.s. dollar has hidden the commodities. the dollar spot index is hitting the highest level since last march, a four-month high for the u.s. dollar. some top stories this hour -- the federal government wants to know if airlines took advantage of the fatal aim track -- amtrak crash near philadelphia.

fivetigating whether airlines involved in price gauging -- price gouging. downtime is denying the claim and said it lowered the highest shuttle price by nearly half in the aftermath of the disaster. another investigation to tell you about -- the justice department is looking into mexico unit, all tied to a possible money-laundering operation. prosecutors want to know if customers illegally moved money through the bank known as banamex. hasblican-led senate panel reported to lift a decades-old ban on travel to europe and -- prohibiting a law banks and other institutions from financing sales to cuba.

just days ago, the u.s. and cuba formally ended half a century of estrangement by reestablishing the medic relations cut off by the cold war. mark: the u.s. justice department is being asked to open an investigation of hillary clinton's e-mail, but contrary to earlier reports, justice says it is not a criminal manner. ms. is clinton used a -- mrs. clinton used a personal e-mail while she was secretary of state. the state department has been reviewing the e-mails and then releasing them. secretary of state john kerry reacted to the development today. kerry: in the state department, we have a whole team working extremely hard to get all of the required e-mails out, public, as fast as possible, and i cannot wait until that happens. i'm sure hillary cannot either, and i'm sure it will be cleared up with the final release as we get that done.

has said sheinton did not e-mail any classified material. staying with politics, the u.s. senate's majority leader wants to links funds for the nations highways with a bid to kill the affordable care act. earlier today, consecutive public and mitch mcconnell announced the senate bill would fund the u.s. highways for three years. the house already passed a version, and the deadline looms. the federal highway trust fund runs out of money in seven days, but senator mcconnell says he will introduce an amendment that would fully repeal the president's health care law. a mcconnell spokesperson says he will call the session sunday to vote on the measure. it is a good day for jeff bezos -- the founder of amazon added more than $6 million to his -- $6 billion to his personal wealth today. according to the bloomberg index, mr. jeff bezos is now

worth about $50 billion. a big surprise today from the world of wrestling -- the wwe has cut ties with one of the country's biggest stars, hulk hogan. the move follows a report that hogan used a -- racial slurs. thrown out the pension overhaul calling for eliminating liabilities by cutting benefits and increasing traditions. the judge said the plan was unconstitutional and chicago has the worst pundit pension system of any major u.s. system. that is a look at the stories this hour. hillary will detail the finer points of wall street and tax priorities less than a half hour from now at a speech at nyu. she is expected to discuss her

stance on capital gains, executive pay, and how and when companies report share purchases. in greenwichora is village. thank you for your time today. we know -- at least we have a sense of what mrs. clinton is going to discuss, but how is she going to sell this to a skeptical financial community? do she believe that she could have it both ways -- criticize them, but also get contributions at the same time? david: mark, you highlight an important point. secretary clinton a very effective, prolific fundraiser. she has raised $45 million so far, and a lot of that has come from people in new york who work in the financial sector. playss speech is one that it pretty safe. she is telling a fine line. there is populist rhetoric. you can expect populist rhetoric

about share buybacks, activism, capital gains tax, but what she is saying is mostly suggestions -- saying she will be in new york, making the case to wall street that they themselves -- reforms. informs a lot of red meat for the more progressive branch of the democratic party. betty: david, why is she doing it there at nyu? david: you know, this is the second speech on the economy she has given. we are told we can expect third that will take on wall street more directly, but this is the audience she is speaking to. the goal is to say this does not have to all come out of washington. coming on the home turf is a way of making that case more effectively. gora, thank you.

earlier today, activist investor greg paxson joined "market makers,," calling the premise that short-term investors do not care about a company's value dead wrong. gains approachal that she has discussed or her campaign has discussed and the attacks on activist in venice -- investors are ill-conceived policy and bad for economic growth overall. do ishe is attempting to put artificial impediments in the way of the free flow of capital and investment dollars, and that seems to be a bad idea for both growth in the economy and for capital allocations. matt: she wants a sliding scale on capital gains -- on the face, that makes sense. if you get in and out, you pay more capital gains, if you are a

long-term investor, you are rewarded by paying less capital gains tax. greg: you say it makes sense, but i have not heard the rationale. it sounds ipse dixit to me. stephanie: what did you say? dixit.pse it is greek. stephanie: rich guys. want the premise is they them to be longer-term. greg: i think she is dead wrong. you are conflating the length of time you hold the stock with your interest in whether or not the copy does well over the long term. a stock way to make price move in the short term, as we see with amazon, for example, is to demonstrate to shareholders you have a better business plan over the long-term that will produce even better profits.

sure, but do we give corporate ceos the opportunity to do that -- jeff bezos is an outlier. shareholders have said i pray at the altar of jeff bezos, he does not need to be profitable. other ceos have carl icahn and dan loeb banging down their doors saying you need to deliver to me yesterday, and after i banged on your door, i might sell the stock tomorrow like dan loeb, marissa mayer -- he has not been in yahoo! the last two and a half years. greg: that might be right that they sell the stock and that is great for capital allocations and capital markets, because they will move onto the next inefficient company and get them to make improvements. stephanie: why does it necessarily make improvements -- one can say marissa mayer has or has not done a fantastic job, but it worked out for dan loeb. greg: this could be great or not so great. the theory is if i could get a company from earning one dollar

a year every year for the next 10 years in the markets expectation to earning $1.20 a year every year for the next 10 or 15 years and show some growth, what happens is the stock price moves very rapidly to the upside and you can make a lot of money in the short term by getting the company on a better, long-term path. betty: again, that was activist taxin, clearly passionate about how he feels about hillary clinton and her policies. ising up, president obama's scheduled to arrive in kenya at this hour. mark: the african nation is turning into a major technology help with one of the most dynamic economies on the continent. there is also tight security. we will have a live report next. ♪

betty: as you can see, that is air force one, president obama arriving in kenya. right now he has not appeared out of the airplane yet, but he is arriving in nairobi there tonight, in kenya, for what is -- where weip that know very few details. a lot of that has been under wraps -- where he will be, but he will not be visiting his ancestral village while in kenya. mark: it is interesting because the united states has admittedly been slow to the party because other countries have made inroads in africa and the u.s. has not hear it again, the president on the ground -- -- has not. again, the president on the ground. on the groundrter and we will be speaking to her momentarily. betty: there he is. there is the president arriving.

his fourth trip to africa since he took office back in 2008. that, by the way, because of his family ties, is the most of any sitting president that is that it -- visited africa, and also a sign of the growing close ties between african nations and the united states, and also the rise of economies in africa and have any to be better have to buy u.s. companies and others. mark: our correspondent margaret taub is traveling with the president. she joins us from nairobi on the phone. margaret, thank you for your time. what is the president's overall itinerary this weekend? margaret: hi, mark. he has two sorts of itinerary -- focused on growth in this entrepreneur summit and then he goes to the b theater when he will focus more on security, addressing the african union,

trying to nudge ethiopia to improve their human rights effort even as they try to embrace ethiopia from a human rights perspective. -- from a business perspective. right, it is difficult to discuss his arrival without talking about his family ties, his half-brother who is there in kenya, but getting back to the economic goals, what are his goals while he is in kenya? margaret: he was admittedly late to the game in terms of focusing on africa. so much of his first term was spent, you know, trying to deal ,ith asia, the asia pivot getting out of two wars, the islamic terrorism threat -- this

is a lot to do about living on initiatives that he began in a second term, whether his power , and tofood programs counter the notion that china has been investing heavily in terms of everything from textiles and natural resources, wanting jobs, and not the u.s. to fall, sort of, hopelessly behind on this, so trying to help with initiatives that might have a u.s.-focus from ge to boeing, trying to get in on the technology hub that kenya has represented. while the summit is in kenya, it africa-wide entrepreneurship summit, so it is the ability to waive the u.s. flag and connect to growing markets. margaret, the westgate mall's in kenya, the site of the 2013 terror attacks -- it just reopened last weekend. you got a chance to speak to

people about president obama visit. what do they feel about it question like margaret: the mall -- about it? margaret: the mall was just reopened last saturday, so walking back into the place brought back all kind of memories. visitm, president obama's symbolically is a sign from the u.s. that they are not turning their back on kenya, that they are prepared to help kenya fight terrorism, the what has happened over the last several years in terms of the spread, the changing nation of al-shabaab has kenyans very concerned, and they tended -- the folks that i talked to -- tended to be realistic about what a u.s. president can do. sure, he can send money, resources, symbolic gestures, but in the end, it is kenya's problem to live with every day. mark: bloomberg's margaret talev joining us live from kenya.

again, live shots of the president arriving in nairobi. betty: we will follow history throughout africa. we will have much more on the bloomberg market day. ♪

mark: welcome back to the bloomberg market day. i am mark crumpton with betty liu. let's go straight to julie hyman with a look at the markets on this friday. markets fall into the lows of the session again, and we have seen them trending lower throughout the day. if you look at the three major averages, down .7% across the board. earnings and commodities driven. oil and gold push lower and commodity producers push lower as well, we continue to see. amazon reported a surprise profit by keeping expenses in check last quarter. operating expenses growing

slower than sales, up 17%. the company keeping its spending on marketing and fulfillment centers unchanged as a percentage of sales versus a year earlier, so we see a big increase in how it is doing -- king of the jungle -- do you like that? amazon. after the last earnings report, the stock actually gain the same amount on a percentage basis. what this means, with again today, and amazon is at a record also -- its market cap is now larger than that of another rather large retailer. that is walmart. walmart is in yellow. it is a $230 billion company in terms of market cap. amazon has risen above it, 254 alien dollars. that is how much -- billion dollars. that is how much amazon is worth today. sales-wise, amazon is phil dwarfed by -- is still dwarfed by walmart.

on a quarterly basis, $23 billion. basis, $115uarterly billion -- walmart, on a quarterly basis, $115 billion. the market cap, the gain you see in the stock is due more to the growth issue, whereas walmart has not been growing as much. mark: julie hyman, thanks so much. betty: staying on amazon, the company has been flirting with joan deliveries for quite some time. mark: and now amazon is trying to create an air traffic control system for commercial drones, joining google and verizon. bloomberg editor john morgan joins us from washington. john, tell us how big a deal this is. john: big enough to attract names like amazon and google, certainly, and when those guys show up at the party, the

reality of a drone economy is underway. some people playing in this thinking a matter of years we could have more drones than we do commercial airlines and that means we need a way to keep track of them. betty: why wouldn't the government do this, jon? jon: they might. nasa hasbeen asking -- been asking universities, savanna sure if it is a government project, private, or a combination of the two. mark: some commercial companies have expressed interest in the project. where some of the names? you mentioned, google, amazon, verizon, and some smaller ones. we spent some time with a company called precision hawk. there are some small players who might have the technology needed to keep these things from bumping into one another. betty: it makes it sound like we

are surrounded by drones. what are we talking about in our airspace? jon: at nep time there are 12,000 airplanes flying over the country. -- at any peak time there could be 12,000 airplanes over the country, and people are thinking the could be 12,000 over a specific city. you will not have controllers operating each one. the devices will have to avoid hating one another with their own, on-board devices. it is a complicated -- compensated one, but there is a certain risk. if they fall out of the sky, it could be painful. betty: thank you. i have not seen any drones lately. i am heading off. mark: enjoy your weekend. hillary clinton speaking in new york. ♪

mark: welcome back to the way.

i am mark crumpton in new york. thank you for staying with us. and look at some of the top stories crossing the bloomberg terminal this hour. it is a deal that could create the nation's biggest health insurer. anthem is buying cigna. it is a 22% premium over the closing price yesterday. ceotom's ceo -- anthem's tells bloomberg the merger will bring huge savings. we remain confident after the closing of the transaction. if the transaction were to close at the end of 2016, the targeted , adjusted earnings per share for 2018 rises by over 20%. nearlyhe agreement ends one year of contentious negotiations and a wave of consolidation in the health

insurance history. the japanese media company buying the financial times is pledging to respect its culture. the ceo of nikkei says the purchase fits in with its strategy of improving overseas coverage. ft ton agreed to sell the nikkei. american airlines is taking advantage of rice -- record profits, doubling a stock buyback plan. more than 20wn percent this year. earlier today, american post second-quarter earnings that beat estimates. a surprise drop in new home sales. they fell in june to a seven-month low. economists had predicted they would rise. two days ago the national association of realtors said existing home sales rose to the highest level in more than 80 years. nearly a century after they are getting as

redesign. converse is interesting a new version of the iconic sneakers -- using a more durable canvas and has more padding. they go on sale tuesday. those are the top stories this hour. we are standing by for the start of hillary clinton's second major economic address of her 2016 presidential run. mrs. clinton has to thread a needle, pleasing mainstream democrats do not mind higher taxes for the wealthy investor class, while not angering her wall street donors. gora, whoned by david is on location at the event. david, let me start with you. what have people been tell you about mrs. clinton's speech, what they expect? david: campaign aides have said we can expect the bulk of the focus to be on the campaign -- capital gains rate, and this

complicated because capital gains with something her husband adjusted when he was president, and what she is proposing is something that is described to me as a progressive system, and a redefinition of what long-term investment is. now we think of it as longer than a year. it we have people that held onto securities longer paying a smaller rate. that is one facet of we expect to hear. we also expect to hear her talk about executive compensation, shareholder buybacks, and also about shareholder activism as well. that is what we can expect. mark: jennifer, i remember a few years ago i went to lower manhattan along with former covering peter cook, president obama's speech, and it cover the same topics, but she will have to thread a needle. she has been part of the class, the bernie sanders class, that has railed against wall street and big time pay, but she needs

them for donations, she needs their money. jennifer: she has tried to hit what some of her aides have called a sweet spot between appealing to the progressive, liberal group of democrats while not angering wall street donors and people that she had long-standing relationships with, the same people that hate for her to deliver 200, threatened dollar speeches just a year ago. she is in the dynamic of trying to do things that she thinks will spur long-term growth, while at the same time not trying to upset wall street too much. mark: jennifer, do they feel the heat from bernie sanders -- is he controlling the narrative, some of the narrative from mrs. clinton? jennifer: they see her as being able to hold her own. she has civic proposals whereas bernie sanders is a more general terms. she is going at it, saying i am

proposing practical solutions. she is not actively attacking bernie sanders the way she is actively attacking republicans, but she is certainly giving a hand that she will do something that will actually happen, and not just a liberal, pie in the sky idea. david, one of the issues mrs. clinton will be speaking about is executive pay. does that resonate with a lot of people down there? david: given how much money executives make and the way pay packages are structured -- the point we expect them to make is the packages should be constructed in such a way that pay benefits are based on the performance of the company, again, over the long-term. that is what hillary clinton will be stressing, that the focus should be on the long-term. thatld stress to people this is kind of land stuff, -- bland stuff, not going to upset

wall street that much. these are things people can get around, understand. here she is in new york making suggestions that wall street is changing its ways, not coming out that forcefully against the people she is talking about. mark: to have any idea how mrs. clinton picked this focus on long-term growth? david: it is up and she has returned to time and time again, talking about cretin more jobs, opportunities for the middle class. she and her aides have said this is not about creating more revenue as it is about growth. some the refrain she has time and time again. it is a second speech he is given on the economy here in new york. she will give a third in the coming weeks that might take a more critical tone toward wall street. that is where things stand now. mark: jennifer, are the plans she is posing controversial, especially in an era when we hear talk of income inequality,

the discussion of minimum wage -- we just had the story this week about raising the minimum wage from $10.10 to $15. jennifer epstein her aides --jennifer: her aides have indicated she will endorse $15 in new york city, but hesitant nationwide. she said in two press availabilities that going that i might not make sense in some -- that high might not make sense in some regions of the country. as a diplomatic approach. tonie sanders says raise it $15, maybe more in some places, and she says it will not be practical everywhere. that is her approach to everything, look at it through a practical, but left-leaning lens. mark: i would not mind being a fly on the wall when mrs. clinton and her husband have a conversation, because the capital gains problem -- that is

a thing -- i believe, do they have opposing views on this? david: i do not know if they continue to have opposing views, but if you look to history, he lowered the rate as president. those close to her say the economic circumstances now are different than they were back then, so perhaps that is an indication that his views may have changed as well. this is something that is contrary to what he did when he was president back in the 1990's. mark: jennifer, the focus on the economy, that comes at a time when i would assume more of the platform is going to be coming out in the next weeks and months. this strategy here from the campaign to focus on the economy right now -- was that a timing issue, because as you remember, when mr. clinton and al gore ran for president -- jennifer: "it is the economy, stupid." mark: it is the economy, stupid.

is this the plan? jennifer: she and her aides talk to experts and people in business over the last six months to a year, even before she announced her candidacy, all focused the -- focusing on this, the economy, what middle-class americans are feeling in their own pocket, and that republicans are going to try to outmaneuver her on foreign policy, but they feel confident that given that she spent four years as secretary of state, she is on strong footing looking like a commander-in-chief, and it is the economy issue where she can make a difference, and get people out to the polls. in 20 seconds, how does the campaign get away from the perception of mrs. clinton being another tax and spend liberal democrat? jennifer: that will be a focus in a she talks about growth and

things that will benefit a business in the long term, at these are things while you might not have the short-term payoff 25% pay 10%, you have a off in two years, or whatever, so the idea is thinking longer-term and it could end up being better for business. mark: bloomberg's jennifer epstein, a bloomberg politics, covering the clinton campaign, and david gora, in lower manhattan. coming up in the last half hour -- next half-hour, a we are standing by for mrs. clinton's speech. we'll bring you live coverage. later this afternoon, more insight on the iranian nuclear deal -- the former u.s. ambassador to saudi arabia, james smith, will join us. that is coming up at 2:30 p.m. new york time. stay with us. bloomberg market day continues in just a moment. ♪

mark: you are looking at a live picture from nyu's stern school of business in lower manhattan. the democratic presidential contender hillary clinton is expected to lay out some of her economic goals in that speech at nyu. our reporter david goudreau is covering that story. we'll bring it to you live. welcome back to the bloomberg markets day. i am mark crumpton in new york. julie hyman is standing by. right now we're at the lows of the session. stocks pulle seeing back for the fourth day in a row and the declines today have been accelerating as the day goes on. the s&p, the dow, the nasdaq now down at least .8% each.

we had the earnings reports to deal with, and now it looks like a moneys are weighing more heavily on the averages as well. look at the bloomberg terminal. basic materials falling the most .ere among the various groups we see oil and gas, health care, industrials, technology, all trending lower today, so that is weighing heavily on the major averages. i mentioned health care as one of the groups that is declining. that has more to do with earnings and deal flow. if you look at biogen, those sick -- shares -- speaking of accelerated declines, this keeps getting worse and worse as the day goes on, now down 20%, the biggest one-day drop since at least 2008. i will have to check in now that it is down 20%. the company cut its forecast and its multiple sclerosis drug sales missed estimate as it sees more competition from a competing drug from novartis. byna agreed to be bought

anthem, but there are antitrust concerns, and abbve disappointed itsales, particularly arthritis medication, emeritus. -- human era. amazon has been paring gains affidavit of -- purported -- reported a surprise profit. the stock is trading at a record. shares of starbucks are also at a record after it reported sales in the americas on a comparable basis, up 8%, better than estimated. i mentioned what is going on with commodities and the continued declines there are incredible. oil is down for a fourth straight week. this is a weekly decline of the most 6%. for gold, it is the fifth straight weekly drop for gold prices. we see a drop by about 4% on the

week. that continuing decline in commodities is also weighing on the stock market, and the makers, the producers of those various commodities dropping as well. mark: julie hyman, thank you so much. let's take a look at the top stories we are following. president obama is in kenya, the first stop in his two-nation africa trip. air force one landing in the kenyan capital of nairobi within the past half hour. security is extremely tight there. kenya is the birthplace of the president's father. security house says and economic issues are on the agenda. after his trip in kenya, president obama will become the first sitting president to visit ethiopia. fiat-chrysler is voluntarily recalling 1.4 million vehicles because it wants to operate -- upgrade the software to defend against possible hacking. they say no defect has been

discovered and it is conducting the recall out of an abundance of caution. jeepfects 2015 and 2014 grand cherokee and cherokee suvs as well as dodge durango suvs. let's go to nyu's stern school of business. democratic presidential contender hillary clinton has taken the stage. you are watching live on bloomberg television. [applause] mrs. clinton: thank you all very much. thank you. thank you. [applause] mrs. clinton: [laughter] thank you very, very much. i want to tell you it is wonderful being back here at nyu and i thank you all for joining me today, and especially my good friend and former colleague, congresswoman carolyn maloney. thank you so much, carolyn, for coming. i am grateful for this opportunity to share some of my

further thoughts about the economy and the work that our country needs to do in the years ahead. first, i want to say a word about what is in the news today and it is because there have been a lot of inaccuracies as constant comings made clear this morning -- cummings made clear this morning, maybe the heat is getting to everybody. toall have a responsibility get this right. i have released 55,000 pages of e-mails. i have said repeatedly that i will answer questions before the house committee. we are all accountable to the american people to get the facts right, and i will do my part, but i am also going to stay focused on the issues,

particularly the big issues that really matter to american families. you know, over the past few pleasure have had the of meeting young people all over our country. many came of age in the wake of the 2008 financial crisis and the deep recession that it caused. the fallout from that crash has tempered their expectations for the future and left them clear-i'd about the challenges ahead, the challenges they face that america faces, yet like generations of americans before edem, there is also undimm optimism. today's young people are preparing to enter an economy that they know will be competitive, not just at home, but globally. they are thinking about how they will find a good job after graduation that can help them get ahead and stay ahead. the risk of a setback or potentially another crisis is never far from their mind, but

what inspires me is that they are undaunted by these challenges. they are seeking real opportunities and real rewards for the work that they put in and they are hopeful that tomorrow will, indeed, the better than tomorrow -- today. so, i hear these stories everywhere i go -- the hard work, the great, the sacrifices of people across our country that are brought us back and driven our recovery. so, yes, now we are standing again, but we are not yet running the way america should. no country is better positioned to thrive in today's global economy than we are. we have the most innovative, enterprising private sector, and most talented workers anywhere in the world, yet while corporate profits are near record highs, paychecks for most people have barely budged in real terms and out-of-pocket

costs of everything from health care to prescription drugs to childcare, to college and caring for aging parents are all writing a lot faster than wages. -- are all rising a lot faster than wages. that is put pressure on our mission. my mission from first day as president until the last will be to raise the income of hard-working americans so they can, once again, afford a middle-class life here it we need to -- -- middle-class life. we need to -- [applause] the clinton: we need to end wage stagnation that is holding back our families and holding back our country. this is a defining economic challenge, not only of this election, but at our time. it gets to the core of who we

are as a nation -- the basic bargain of america, if you work hard and do your part, you should be able to stay ahead and get ahead -- get ahead and stay ahead, and when you get ahead, or country gets ahead, too. last week i laid out a broad economic agenda to raise income for everyone, not just those at the top. it is an agenda for strong growth, fair grove, and long-term growth. in the days ahead i will continue outlining plans and all of these areas, from setting ambitious goals for new infrastructure and clean energy investments to reining in excessive risks on wall street. today i want to focus in particular on long-term growth. -- a surveys fact of corporate executives found that more than half would hold off making a successful, long-term investment, it if it

meant -- if it meant missing a target in the next quarterly earnings report. in another recent survey, more than 60% said the pressure to provide short-term returns had increased over the previous five years. we also know that publicly held companies facing pressure from shareholders are less likely to invest in growth opportunities than their privately held counterparts. large public companies now return eight or nine out of every $10 they are directly back to shareholders, either in the form of dividends or stock buybacks, which can, temporarily, boost share prices. last year, the total reached a record $900 billion. that does not leave much money to build a new factory or a research lab, where to train workers, or to give them a raise

-- or to train workers, or to give them a raise. orting to "the wall street 20 03 to 2013, companies doubled dividends and buybacks, but cut capital expenditures on things like new plants and equipment. as a founder of the investment management company vanguard put it, "a culture of short-term speculation has run rampant." one other concerned business leader calls it "quarterly capitalism." i understand most ceo's are simply responding to very real pressures from shareholders and the market to turn in good orderly numbers and investors are always looking for strong, reliable returns, but it is

clear that the system is out of balance. the deck is stacked into many ways -- in too many ways and powerful incentives are pushing it even further out of balance. "quarterly capitalism" as developed over recent decades is neither legally required, nor economically sound. it is bad for business, bad for wages, and bad for our economy, and fixing it will be good for everyone. and increasing number of business leaders, investors, and economics are mobilizing -- academics are mobilizing to change the culture of board rooms, classrooms, and trading floors, and to better align incentives for long-term growth. for the sake of our economy and our country we need to stand with them. innovators like google and spacex are investing in research

that does little for today's bottom line, but may yield transformational benefits down the line. venture capitalists are patiently nurturing the next disruptive innovator. the big three automakers, gm, ford, and chrysler, are putting the memory of the crisis behind them and making new investments in factories and technologies of the future, including advanced batteries. companies like trader joe's and quick trip, that have prime -- prospered by investing in workers, increasing wages, and improving training are becoming models, and larger employers like target and starbucks have recently raised wages for entry-level workers and thanks to pressure from workers, the trend has even extended to mcdonald's and walmart. heard that ihave am a fan of chipotle. [laughter] mrs. clinton: and it is not just

because of their burrito bowl. last month, the company announced it would provide paid sick days, paid vacation time, and tuition reimbursement to its part-time employees. [applause] all clinton: these are smart, long-term investments that will and do pale for companies, workers, and our society. they point to an important question to the future of our economy. how do we define shareholder value in the 21st century? is it maximizing immediate returns for delivering long-term growth. of course, we want to do both. today, too often, the former comes at the expense of the latter. lasting value.

we all know that in our own lives. i learned that watching my father's went over the printing fabric shop small in chicago. it was not good enough to be secure for today. what mattered was tomorrow. what is true in life is also true in business. real value comes from long-term growth. -- short-term process profits. it comes from building companies, not stripping them, creating good jobs, not eliminating them, from seeing workers as assets to cultivate, not costs to be cut. breakan business needs to free from the tyranny of today's earning report so that they can do what they do best, innovate,

invest. it is time to start measuring orue in terms of years decades, not just the next quarter. ,hat is one way to raise income deliver real value for shareholders. there is no single cause of quarterly capitalism and therefore no single solution, but there are smart, specific reforms that can be made by both the private and public sectors that would better align market incentives for long-term growth. reforms that many forward-thinking business leaders themselves have been calling for. i will mention five areas of focus today, but this list should be the beginning of the .iscussion, not the end first time proposing a limit on

profits from capital gains to promote and reward farsighted investments. the current definition of a justterm holding period, one year, is woefully inadequate. that may count as long-term for my baby granddaughter, but not for the american economy. it is no way to run a tax system . as president, i would move to a six-year sliding scale that provides real incentives for long-term investments. the topayers in bracket, families earning more than $465,000 a year, any gains from selling stocks in the first two years would be taxed just then, the rate would decrease each year until it returns to the current rate. from the moment investors buy into a company, they will be more focused on a future growth strategy than its immediate profits