pim stocks plunge in china withm. equities lower worldwide. the dollar falls. pimm: we talk about the friendly dealmaking in the pharmaceutical sector. for $40 is bought billion. betty: a big week for tech earnings. a preview of what to expect. ♪ pimm: good afternoon. i'm pimm fox. betty: i'm betty liu. look at the markets trading here at midday. stocks are paring back from the session lows. remember that they were really taken down overnight by the overnight slump we saw in chinese shares good stocks hitting their lowest level since

2007, down as you can see there 8.5% for the shanghai composite. everything else was pretty much read across the board. while prices are now in a bear slump. they are in a bear market. particular for brent crude, which is rebounding if you look at the six month chart. bathroom we offer a moment. pimm: what are we talking about? $40 a barrel for crude? commodities tend to follow. brent crude is $53. gold, while a little increased, that is not biting well for gold. thus boding well for gold. let us take a look at the bond market. a little bit of a change there . below that crucial 3%. take a look at the two week

trend of the u.s. 10-year. prices go higher. let us look at how the u.s. dollar is performing. 11115 against the euro. the pound sterling basically unchanged. we take a look the spot index and it is up 30% in the lack six months. that is the dollar strengthened let us take a look at the top stories at this hour. investors worldwide are wondering how far the damage could spread. chinese stocks suffering there were stay in eight years. the benchmark shanghai composite index falling more than 8%. there is investor concern that the three-week rally that was propped up by government intervention will not last. earlier this morning on "bloomberg surveillance," they describe the magnitude of the problem. >> where does this party get it legitimatacy?

they cannot figure it out if they don't work. they have a real problem on the hand. they don't know what to do good other times they're backing up, but this is a syria political problem. pimm: the chinese government has let more than 1400 companies suspend trading in their stocks and it has been suspending major shareholders from selling their states. present obama is focusing on human rights today during his historic into ethiopia. he is the first sitting president to visit ethiopia, africa second-most populous country. he met with the prime minister to discuss the country's fight against also bought militant in the civil war taking place in south sudan. ethiopia is the second stop on the president african tour following his visit to his father's birthplace in kenya. cuba and malaysia are no longer on the list of countries

that fail to combat modern-day slavery. john kerry announcing that both countries being removed from the u.s. human trafficking lackluster he says that there is much work to be done and adding that the job is not just for government. >> governments need to strengthen and enforce the laws of the have on the books and prosecutors must take pride in turning today's traffickers into tomorrow's prisoners. also needs toctor be a part of this effort. by blowing the whistle on companies that use labor that is underpaid, and under coalition -- coercion. betty: malaysia played a role in easing the crisis when thousands of religious refugees fled myanmar. worldwide, more than 20 million people are believed to be affected in the industry such as n, and, constructio domestic service.

switzerland's largest bank beat estimates thanks to lower cost in an increase in estimate trading. managed funds for the wealthy that more than doubled. pimm: orders for durable goods came in higher than expected last month. they rose 3.4%. the first time in three months in increased endurable good orders. for includes goods commercial air craft. best buy wants to take a bite out of apple success. they will stock apple watches in stores next week. as of now, they have only been available in apple stores. those are your top stories at the moment. at the moment -- investors looking at the stock market crash in china. we have been reporting shares in the benchmark shanghai composite index, ending the monday session down a .5%. this is the biggest one-day loss since 2007. betty: such a big loss. this is despite recent

government intervention in the market. earlier today, peter or zach waited in on the latest selloff. peter: it's not about how many people directly own stock. in fact, i was in beijing a few months before the declines. senior officials were almost showing off about the stock market. it was taken as a symbol and that is the issue. doesn't indict the chinese leadership? new where is lagarde's mediocre on this july summer morning? peter: we are not growing rapidly. the u.s. is taking up a bit, but it is not gaining much. it won't be. that's another point to come back to. i heard earlier talk about three or four or 5%. we will not grow at those rates historically because the

population growth rate is down so much. globally, growth is challenged right now. said the chinese government pointed to it with pride. it was a conscious government policy, right? peter: it was a signal of renewed strength and moving towards a market-based economy. nie: it would not be considered i a failure. an embarrassment, yes. but a failure, no. this is just a major experiment. peter: i agree with all that. it is only this and listen. it is not a complete an epic failure. tos only if people start lose confidence in the direction of the country is going because this was touted as one of the symbols of ongoing progress. we had investor richard haas telling us that they real problem is that chinese government is linked to several growth. do you see that authority at risk at all right now? peter: that is the whole point.

stepping back here, the chinese are undergoing and will continue to undergo a substantial transformation from seven point 5% growth to 8% growth. it was inevitable. the question is how well they manage it. that is the key point here. pimm: that was bloomberg view szag.nist peter or betty: can they manage it properly? pimm: if you are commodity producing nation like australia, you are feeling the pain of china. andou are a coal producer selling to the chinese market, you are also finding that growth is slowing and affecting prices. we saw this today when we looked at the oil price, below $80 a barrel. if you do not see this continuous demand from china for many of the commodities-- betty: we are in trouble.

it's hard to say that none of us have a skin in the game. many of us do because china does touch many parts of the economy. pimm: it has been interesting to balance the amount of coverage going on in greece which has a population of 11 million people to a very big -- well, the biggest populated country in the world in china. betty: much more ahead on "bloomberg market a." day." hack attack. this time coming to your car. we will talk about fiat's latest recall. ♪

pimm: a shot of lower manhattan

looking towards the empire state building all the way down to the freedom tower. welcome back. i'm pimm fox. betty: i'm betty liu. a gorgeous day. once upon a time, carjacking prompted headlines. today, it is car hacking installing fears among drivers. fiat recalling 1.4 million cars vulnerable to cyber hacking. this news comes after a magazine article highlighted how hackers were able to take over eight g cherokee as it was headed down the missouri highway. they are now offering a software patch fixed to this thread. i starts -- as cars become more technologically advanced, they become bigger targets for cyber criminals. our automakers taking these threats seriously? matt miller -- who would rather be on a motorcycle. t: i gave some calls to

people at ford and general motors that i know am taking this very seriously. they have different systems that there gotten place. motors, for example, uses a hardware firewall that separates the driving controls. it separates the driving controls from the software that entertainmentters system. there are certain controls in modern cars, especially in those that get new work and more autonomous that run things like steering, run things like accelerators by wired, that run things like brakes. a lot of people do not know that that can be my wire in a lot of new cars. new is the problem in these juice. yet chrysler is now taking this seriously as they recall 1.4 million cars. betty: they are giving you a usb? matt: there is a software fix and a usb drive that will add additional security. you just plug that in to the port on your car and it should

help a little bit. but let's face it. betty: that doesn't reassure me. matt: i feel like hackers and they really want to can get past anything, especially if it is just eight software cash. -- a software patch. the bigger story -- come has sergio marchionne out and said anything regarding this issue? matt: no, i'm not seen him in front of cameras. he is not given interviews good one of the reasons is not the hacking issue, but to deal with a big fine that has been slapped on him now. it is a bigger issue for fiat chrysler. it's not just that. .hey really came down hard pimm: but they haven't been helpful. matt: they they definitely haven't been helpful the last few years. they have been late to issue recalls. when they do issue recalls, they

have been slow to execute them. a lot of them do not finish up. the cost now for fiat is fourfold. a is the monetary cost. 105 million dollars penalty does not sound like much. is the biggest one imposed in a civil suit, but look, the cost or going to be much higher than that. they have promised to live back more than 400,000 faulty cars. that will cost $7.5 billion bid this is a company scraping together money where ever can. betty: one second that. record fine for not complying with recalls. matt: plus $7.5 billion. betty: and then they are giving a usb drive to fix my car. that is not made me want to buy a chrysler. i'm sorry. matt: that's the bottom line. it's the record fine. it's the hit to their autonomy because they happened -- they have to hire an independent watchdog to watch their company. they have to have a big merger.

they been talking to gm, but gm said no way. the most important thing -- as betty points out, this is a hit to their reputation. people may not want to buy a fiat chrysler automobile because of the fact that they do not do recalls. the fact that they dragged their feet when they do. the fact that your car can get hacked into and you can get taken off the road or stop is an 18 wheeler comes up on your behind. pimm: all very bad things. one question to you -- this was an attempt to specifically hack into this car system, correct? matt: correct. they did have a chance to look at this carpet -- car before they did it. pimm: understood. are there any reports of people actually hacking into automobiles that has resulted in any malfunctions or automobile accident? matt: no. i'm sure the reporters will spur that thing to happen. pimm: i understand. betty: now we know it can

happen. matt: this is the beginning. pimm: if you throw tax on the road, you're going to lose a tire. betty: i'm buying used cars from now on. matt: that's what you want. you want a completely analog car. let me tell you something, that he. the driving experience is going to be better anyway if you have actual hydraulics. betty: there we go. we got him on it. matt: steer yourself instead of using the auto box. pimm: there's another point.ting there are other models like porsche, i know this because you told me. they've no longer offer mechanical steering. matt: it's still in three different 9/11's, but they are trying to phase it out. they came out with no stick shift. is becoming my car talking guys, all right. we'll get you that usb port, all right.

matt: stock down 7% and it continues to get worse. this is bad. betty: especially after watching this report. matt miller, thank you. much more ahead in the half hour. square has filed for a confidential ipo. what it could mean in the market for tech offerings. pimm: u.s. equity gains being driven by the fewest number of stocks in 15 years. one of the longest running bull markets since world war ii. ♪

betty: this is "bloomberg market day. th" i'm betty liu with pimm fox. pimm: let's check in with julie hyman. julie: climbs have held pretty steady throughout the day. the strait of declines for the dow and s&p. the worst stretch that we have seen since about january. stocks continue to sell off. we are still 3% below the high for the s&p 500 that we reached on may 21. machinery stocks are feeling contained today. the whole sector was downgraded over goldman sachs on caution over what we were seeing in emerging markets, perfectly commodity producers.

there is going to be weak demand for these folks as we continue to see commodities under pressure. one of the stocks that was downgraded to a cell from a neutral is the maker of vengeance. you can see the stock has pared some of its declines. it is down 1.1%. we have seen some other downgraded stocks doing worse. the makers of cranes among other things. they were downgraded from cell to neutral. and analyst from goldman saying they are cautious on the multi-your outlook for spending by countries on cranes. both of the stocks feeling the pain from that. the companies already celebrated from goldman sachs did not see down rates are already selling with the exception of jacobs. joy global, the maker of mining equipment, down 2.5%. just broad weakness among the industrial. we have a talking about the commodities producers themselves. less about the companies that service them.

companiesing of the that do this, we have a company called roper technologies that after cuttingy a forecast. it services energy companies. in particular, it is seeing more difficult and market conditions in energy-related markets as you might expect it those shares down 5%. we cannot have this discussion without commodities and industrials without will talking about -- without talking about what is happening in china. take a look at my bloomberg terminal. this is using the economics workbench function on a terminal. your looking at the bloomberg commodities price index versus the gdp in china. we saw another tumble in chinese stocks overnight. china gdp is in green. bloomberg commodity index is in blue. they are tracking closer together. waiting on industrial today is the fact that we once again are seeing that selloff in china.

some speculation here that the measures that the chinese government have put in place worked a little bit, but not so much today. we are seeing chinese stocks dropped the most since 2007. the: very useful to see actual connection between the bloomberg commodity index and china's gdp. you can see those put together. julie: i should mention that goldman call was referring to emerging market countries that produce commodities. of course, china being a big consumer of commodities also has a big effect. pimm: thanks very much, julie hyman. let us take a look at some the top stories right now. after five weeks of summer, this year's wildfires are already farmers in all of 2014. 24 major fires are now burning in five states -- california the hardest hit with four. one of them is dangerously close to homes outside of sacramento. nearly 9000 square miles have been scorched and that is more

than three times last year's total. beicials say an autopsy will needed to determine because of the death of bobbi kristina brown. she died yesterday in an elena area hospice. the daughter of whitney houston and bobby brown was found unresponsive in her bathtub. diedodern -- her mother three years earlier under some circumstances. betty: one giant leap for armstrong and his spacesuit. a kickstart a campaign to preserve his moon suit raised $540,000. they hope to put it in the smithsonian for the 50th anniversary of his spacewalk in july. i think also -- it's also incredible to see the footage coming back from the new horizons spacecraft that just traveled out to pluto, sending back those images of the planet

-- or the dwarf planet, i guess. it show that there was water and many different kinds of topographical features that we do not know about. betty: now we have your e-mail illner spending hundreds of millions of dollars to find other life these days. it's a matter of if and not when we find life on another planet. on that note, we are going to spin you out. that is a look at some of our top stories is our. pimm fox is saying goodbye. we will be back with more on "bloomberg market day. " ♪

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getting a look at the top stories making headlines at this hour. donald trump still leading the republican presidential race. new survey show him ahead of jeb bush and scott walker. only 10 of the six team candidates will follow five for a televised debate august. election 26. until you decide. president obama focused on security and human rights during his historic trip to ethiopia. the first sitting president to visit ethiopia after the second most populous country. al-shabab is an even bigger threat. >> ethiopia faces serious threat. theyntrary fusion to this have reduced areas under al-shabaab control. as the prime minister are noticed, yesterday's bombing in mogadishu reminds us that

terrorist groups like this offer nothing but death and destruction and have to be stopped. betty: ethiopia is the second stop on the president trip after kenya, his father's birth place. attached to a huge highway bill. the house transportation bill does not back the export/import bank. there is a race to pass the highway bill out friday. are the rich getting richer? a new survey for you. top 400h of the world's billionaires rose by nearly $195 billion this year. bill gates still top of the list, even though he is dropped more than $2 billion in 25th. that is a look at the top stories at this hour. buying allergen generic drug group for $40

billion. they will have greater -- greater negotiating power. more insight on what is candidate drop in shares in china. what it means for investors and what the government can do about it. it ready for a social media frenzy as twitter and facebook report second-quarter earnings this week. both companies pouring money into new initiatives to learn more users and advertisers. will the investors in -- investments pay off? joining me is scott kearny. he is also the founder of about.com. great to see you. it has been a while. whatwitter and facebook, people will stare at first will be the monthly active users, because both have slowed down. >> they have, but facebook has -- therands still

facebook has room to grow. for facebook since it is a real moneymaker, really only second to google, i think investors should look at that, too. facebook is in full monetization mode. twitter is yet. facebook, if you go back to when everyone in advertising said social media is no place to advertising is you are surrounded a junk, but the reality is you are surrounded what people want to see. i think it will be one of the best median swissie in a long time. betty: it is a race between his book and google. i am interest to about what you said about instagram and whatsapp. instagram something like 3 million users. it is huge. how do they monetize the? >> instagram, they really turn it on.

--how do they monetize it? out how to get you to go over here. they have experimented with it. as in line with images to says they are doing on facebook. feed.in your you are not 100% sure it is an advertised. sponsored -- is they don't say this is answered. they really are nailing it on modernization. instagram is very similar to facebook as it is a unit, it is unit, it is, they will do very well with ads. i will have to see it to really judge. what about twitter? >> twitter is a tough one. social networks are a good place

to advertise, because whatever surrounding you is stuff you really want. at twitter following people we do not necessarily know. ,t is a new broadcast medium and they have work to do. this quarter they have been a touch distracted. adam baines a solid guide. running from ca -- ceo and the new guy that will maybe be ceo. tougher to recruit, tougher to retain. advertisers will not cut as long of a deal. if anything, it is in their interest to lower at dictation. they have a user issue. i think they spoke, because it in fairness it is to monetize. i think facebook continues to prove people use it. we were scared a year or two ago kids are leaving. people with dollars, older

people are using facebook. it is kind of like the telephone. if my mother uses the phone and i use it next -- betty: i think i read somewhere the fastest-growing segment is people over 50. >> they happen to have more money than kids who are 15. betty: square and ipo news that came out friday. the whole payments processing world. bring up this photograph. >> this is a great photograph from the weekend. i am aghast on. i don't even remember where it was, and those are the payment options. you will notice everyone from these last jacquard and a bunch you have never heard of. we don't yet have apple faith and google pay -- apple pay and google pay.

betty: were you near philadelphia? >> i must have been driving to the hamptons. and i needed gas. i was amazed at that's because i popped in whatever card i used. your point is getting into payments, it is a very low bar. compensated is so to the average person but not that complicated. they are fighting for retail share of voice. if i can get the consumer to use mine, i have the chance to pick fee as therchange money information -- the money information system. this is moving regular money around for candy bars and gasoline and just not rocket science. jack came upid is with the square reader, which a lot of companies adopted. then he moves from there from

blending to other financial quality. betty: every other day i keep hearing about a new company going into payments. i heard about this one over the weekend, flint, you can do it in the at. it seems like everybody in the mother. >> if you would like me to , we couldty pay probably do it. it is not nearly the barrier to entry as you think it is. you canhe backend stuff get from here. there is a fascinating conference. three years old. something like 7000 people will. i remember the local list was 250 strong. if you have a way to touch consumers whether it is new york giants these card where the wants get cut in, or you to create something from scratch, we have done that. when we started it is like i don't know the act or names.

.- acronyms but once you do and you realize it is a transaction that has to find its way back to the bank and a bunch of guys in this anything -- spaghetti thing taking off bases point, not so hard. betty: i don't know if anybody has loyalty to how payments are processed. when you think about it, we were talking about this in the meeting, we were all of the -- about apple pay, but is it really that big of a deal? apple, brilliant as they are, they are only dealing with the various all parts of the equation, the friend and peace with consumers. will, andts big, they they will be their own financial institution i believe as part of it. the other guys are moving the

dollar across, but there is loyalty. capital 12% cash back. american express with points and miles. betty: i am loyalty on price. >> or service. express next rest -- will give you back guarantee. there is a difference. facing.e consumer as soon as that leaves the consumer a goes into a commodity plumbing system. think bottom line, do you square will do well in this ipo to o? >> one of the question is it intended for an ipo in beings harder than we think he is, and we will see the likes of airbnb and uber go next year and there is only so much money.

the other one is he puts it up for ipo, which is half the time. a lot of time the company gets picked off. paypal or someone else picks it off. go run twitter. betty: smart move. i like that thinking. rate to see you. .com.er and ceo of keep health-care stocks propping up in the list -- stops this year. some analysts a a sign of weak. . we will its lane why ahead. -- explain why ahead. ♪

welcome back to the

bloomberg "market day." going straight to julie hyman for the big stories of the market day so far. it has been china we have been watching so far. julie: china sparking a sale in the u.s. after the chinese government, even with all of the stimulus measures they have tried to throw at the market, it fell sharply overnight. we did see the s&p 500 on software with 200 day moving average after touching that. we will see if it remains above that level or falls below it. the 5th street session of selling we have seen for the major averages. .- fifth straight utilities are up. gaining ground. basic materials, health care, oil and gas. something to do with what we have seen in the commodities group. this selloff we have seen. if you look at how the s&p has

done year to date, incredibly volatile in terms of the bouncing around we have seen. yeara half percent in the -- on the year. only to two groups. take a look at the bloomberg terminal. the group performance year to date. health care and discriminate -- consumer discretionary the best-performing groups by far. there is a story that talks about how these groups alone have really supported the s&p this year. that is raising concern about the breast that has been driving the rally or the lack of that. -- there is raising concern about the breath that has been driving rally. within consumer discretionary, there are some significant companies we talk

about that in the index. basic materials in the selling. underlying commodities. gold is seeing a rebound. oil prices are still lower. for the seventh day in a row. a six year low. the longest losing streak in 18 months. copper very tight to the origins -- fortunes of china. finally, a quick check on the u.s. dollar. dxy down. -- reversing the street get has been on. something else to throw into all of it if we have a meeting this week, not that rates are active to change. 0%ty: i would say near chance. you never want to discount it. people are even doubting this september rate hike now. julie hyman, senior markets correspondent. a look at the top stories. the disney ceo says espn will

eventually be sold straight to a cables without subscription. he was quick to add it would not have been any times in. it would mark a big change for espn. the sports channel has been a big moneymaker for disney. a big blow to boston. mayor marty walsh says he will not assign -- not sign any document that will make taxpayers liable for cost overruns. the u.s. olympic committee board will be later today to discuss the prospect for boston public -- were public support for the games has lagged. fox sports making a big bet on fantasy sports. draft king adding $300 million in new investments. half of that will come from fox an 11% stake. the nhl and major league soccer investing. major league baseball is increasing its investment. that is a look at some of the top sports stories.

u.s. stocks are under pressure today. consider this. has not experienced a 10% correction in nearly 1400 days, nearly four years. the third longest stretch of days without a 10% fall since world war ii. the longest stretch with a 10%. was way back 1897. -- 1997. that lasted for 25 days. the current bull run being driven by the fewest stocks in more than 15 years. those gains coming from health care and retail. flag for big red market investors? mark crumpton joining me with more. mark: you mentioned the world war ii parallel. since second-largest world war ii. benson roosevelt and time. just ---roosevelt was in the

office of the time. stocks keeping pace with the overall market. this device from our story had bloomberg.com and terminal has been pretty glaring. health care and retail, trading times actual22 earnings. 20% premium to everything else. how exposed our investors at this point? exactly. the last time before the dot com bust, the same thing was happening in the markets, where more and more of the gains were happening by fewer stocks. tech shares driving the gains. then you have this huge crash in the markets. now it has people wondering, and we are planting in people's heads, are we headed for another crash? taking apple and google

for instance. they were dominating the headlines. they are overwhelming the market. apple saying iphone sales rose 35% less order. that's a big night celeb in the s&p 500 index. week earlier google posted better-than-expected earnings, shares rising 16% lifting the s&p. 72% of other companies in the index falling. what does that say? these two preheat best -- believe this dominating the market. driving the's market. betty: no longer driven by what is going on in the world so much. wereed to be the markets inven by what was going on the macro factors. those will become less and less important as the focus more on

retail and health care. mark: speaking of internal focus. the hour we will speak to professor at cornell, used to be at the imf. we will talk about china. a lot of news out the china. -- there are geopolitical factors and for investors. that and much more coming up. betty: i will see you soon. m i will see you in a few minutes. betty: still ahead on the bloomberg "market day." we woke up with big m&a. allergan merging. those details. ♪

betty: starting the week off with another big health care deal. teva pharmaceuticals will buy

than $40for more billion. the total at $180 billion we're talking about. more on this is drew armstrong. this take that out of the picture. drew: this has been like a soap star. it was really ugly. the companies accusing the other of mud sullying and burning reputations. at some point we saw allergan come in and say we have something you want as well. over the weekend we broke the news friday they were thinking about spinning out the generic drug unit. monday morning all waking up to the statement seeing that deal will read down. teva dropping the bid and doing the deal for $40 billion with allergan. betty: what happens with mylan?

: there is more in the tangled web. they were trying to buy. go, which may have -- which would have made it to big. that makes it more likely. it will free mylan up. there are still issues like price and management. there was never a deal agreed to there. does make that the little closer to happening. betty: what does this do for drew: they will be unquestionably the biggest up maker in the world. they were already near the top. now we are talking about an unquestioned diane -- giant in the industry. it will give them more drugs where they can go to distributors and insurers and say we can offer this huge portfolio, buy from us. to scale.ve economies

probably a little bit less on the pricing power. generics is a commodity name more than anything else. it gets them the ability to compete on price more than anything else. also to say we have this portfolio. you can come to us and get everything in one place. thank you. drew armstrong. stock marketday's plunge in china causing concerns for international companies that get a good portion of their sales from overseas. we will get more insight from international trade professor. we will be back. ♪

>> and cisco, 1 p.m. in new york, 1:00 a.m. i in hong kong. chinese stocks get

hammered, suffering their worst single day drop since 2011 in betty: the republican presidential race is full of current, and former governors. we will take a look at their records. mark: vice president biden was referred to the 40 yeah word as a third world country. he will be back in queens to make a major announcement involving infrastructure. betty: good afternoon, i am betty liu. and i am mark crumpton. let's look at markets at this moment. sessionoming back from lows after the overnight it presents slump in