they may say about the future of interest rates. pimm: ken facebook face up to wall street's expectations? whether the social network and sustain the rapid growth. betty: tom brady bows to fight his suspension in the deflate gate scandal saying he did nothing wrong. pimm: i'm pimm fox. betty: i'm betty liu. seeing strong gains across the board. we are near the intraday highs

for the s&p and the dow. the s&p is up about half a percent. the best equity gain yesterday in two weeks. we are building upon that as we gains across the board. we are near the intraday highs for the s&p and thehead to the'. there is technology shares that are tumbling, twitter and yelp. twitter came out with disappointing numbers today. m easily 2 million -- a measly 2 million active users. yelp down a record 28%. part of that has to do with their cutting their sales forecast but also cutting back on their national branding campaign. lots of analyst cutting their forecast on the stock, rating on the stock. a different story in commodities, inventories in the u.s. dropped by over 4 million barrels. were actually a gain which is why you're seeing nymex crude higher than 2%. giving a dropon in oil prices has gone down. also looking at industrial

stocks and commodity stocks. oh's are higher today. let's take a check on -- those are higher today. we can see selling in the 10 year. 3% for the 30 year. withng this gap can see these orange and blue lines. all waiting on the fed statement which will be released at 2:00 p.m. eastern today. the dollar, gaining strength against the euro. the yen versus the dollar, unchanged. starling gaining against the dollar. sterling has been strong all week. let's take a look at the bloomberg commodity index. 13 year low for becom. fromis down, continuing

2011 down to 2015. commodities taking a beating. you see what is going on with the canadian dollar and the australian dollar, both related to commodities. betty: we will be talking about gold later. pimm: let's take a look at some of the top stories crossing the terminal. if not now, when? the question hanging over the federal reserve about interest rate. policy makers concluding two days of meetings today and they will issue a statement. rates have not been increased as 2006. economists say there is a 50-50 chance it will happen in september. the federal reserve statement is expected this afternoon at 2:00 p.m. eastern. we will have it for you here on bloomberg. we may hear hints about when the federal reserve will raise interest rates.

in increased is expected sooner than later. first he lagardere is saying -- christine lagarde is saying the u.s. is showing signs. lagarde: we have a strong performer with the united states of america which is well into its recovery process. we should expect a variation of monetary policy in the future. pimm: lagardere says it is a different story for much of the world calling global economic growth tepid. the irane review of nuclear deal entered a new phase today. senators are hearing from ash carter and jacob lew. the armed services committee is looking at how the deal could affect iran's neighbors and military bounds. there are also questions about what happens to frozen assets without a deal. >> if this agreement were to be rejected, the question is, what

do those other banks do? i don't think they will feel bound to hold that money the way they have held it in escrow, with from iran. without a nuclear agreement, some of that money will start going back to iran if there is no agreement. quizzed house panel secretary of state john kerry about a plan. the house and senate are close to passing an extension that will keep transportation money flowing to states for three months. lawmakers could not agree on a long-term plan and are racing toward their august vacations. highway trust fund runs out of money at night on friday. pimm: the next round of job cuts in the oil industry may hit oil producers. chevron says it will eliminate 15 million jobs. -- 1500 jobs.

service providers and drillers have been the hardest hit. expectedricans than signed contracts to buy homes last month. home sales fell 1.8% in june. economists forecasted sales would rise. housing market is showing slow growth. dynamics hasl raised its full-year forecast. the company makes the m1 abrams tank. profit.ded quarterly it is selling more business jets. those are some of your top stories at this hour. pimm: about those two hours from now the federal reserve's open market committee will have their announcement on interest rates as well as the u.s. economy. investors will be looking for

any details that give a hint as to when increases might again. -- might begin. betty: what data really matters in between? josh wright joins us now. if you listened to christine lagarde. might we see something earlier? josh: earlier than september? i don't think so. today is about expectations of what is going to happen in september. there probably won't be a lot of big changes to the statement. a lot of the description of the current economic conditions will pretty much hold. a lot of the focus has been on this particular phrase about what the assessment of risks are in the economy. for a long time the statement has said it was nearly balanced. if it's which is to fully balanced, that indicates the fed thinks the market is ready for it to proceed with rate hikes. there are upside risk counterbalancing the downside

risks. pimm: i like that we are balanced on fully or nearly. and adverbial federal reserve. 12 months from now, what investments have done well? , we are you take a look going to be above 1% by that time. pimm: 1% fed fund rates 12 months from now. josh: it depends on how well the that has broadcast moves. if you think the fed has communicated clearly, it could be a sign of confidence. if there is less liquidity in the market we could be doing pretty well. it is a game not just of adverbs but inches. betty: the most telegraphed rate hike we have had in a long time. talk to anybody and they have a forecast for this. aboutblankfein talked

what the reaction would be once we hit september. i want you to hear what he said. blankfein: i think it will be jarring when we see an interest rate hike because we have not had one for some time. i think people will get out the smelling salts, take a sniff and recover. ,hen we have that first hike the fed has suggested it will be conservative at the trajectory of future hikes. betty: do you agree with that scenario? josh: i think the fed has done a lot to prepare the market for this. i'm not sure there will be a big market reaction. no one knows. the fed has been working hard to avoid that because they are afraid of getting another tantrum. they are trying to address this aside from taking so long and putting steps in the process. they have been talking about how the initial rate hike is not the most important part. he will hear more talk about that. the fed will be saying it is not about the first hike, it is

about the past of interest rate afterwards. vice chairman of the fat, stanley fischer -- of the fed, stanley fischer said we will be going from an ultra accommodative policy to an extremely accommodative policy. when you are down at the zero lower balance with a large balance sheet you are maintaining, that is an emergency setting. when you look at the numbers, job growth, gdp growth, it does not look like we are in an emergency situation anymore. pimm: adjectives and adverbs all over again. if we get to 1% 12 months from now, what happens the u.s. dollar? josh: i think a lot of that has been priced in. it depends on external markets response. i think the fact that we have strength in the u.s. economy is understood. pimm: josh wright, u.s. economist. betty: let's stay on the economy and gold.

the near zero rate stance coupled with slow economic growth has sent investors fleeing yo-yo -- low yield investments. the price of gold has made a round-trip back to levels we last saw in 2010. making it less worthwhile to dig the stuff out of the ground. the mcintyre, an analyst at tocqueville gold fund. betty: have you had to take out the smelling salts? ryan: we think we are one of the few people that are sober in such an environment today. pimm: let's start with the bear case and the bull case for gold. ryan: as we talk about the federal reserve, gold does not

generate any yield. to the extent the federal reserve flips rates, it will create a higher opportunity cost for those who hold gold. the second thing, the movement of financial assets and markets in general. if you look at u.s. equities debt increased over the last -- they had increased. we think that creates an opportunity. we think people are mispricing the risk. betty: people have been saying there is an opportunity every time we have seen this drop in gold. is there at some point, is it $1000 an ounce where you say, let's reassess? ryan: i think it's impossible to tell where markets are going to end. the cost of gold production is around $1000 per ounce on a mine basis. if you start adding an interest, it starts getting well beyond

$1200 an ounce. it is tough for minors to add additional supply -- four miners to add supply. we invest approximately 15% in gold bullion and the rest in gold miners. the gold miners have been impacted. we think they have levers to improve profitability. those of the companies we are focused on. betty: there was a report back claude erb, predicting the plunge of gold prices in 2012. recently interviewed and they said they see gold at $350 per ounce. -- that is not unrealistic that that is not unrealistic. longer than may be

an investor's investment lifespan. ryan: we would say you should take a long-term view on commodity prices. typically more volatile than financial assets. i think it depends. when we started the fund in 1998, we had the same commentary about gold and gold equities. you actually had an equity bubble at the time. we think it is a similar circumstance today. people are dismissing risks involved and abandoning what we considered to save assets. pimm: how much of your own portfolio will you put into gold? ryan: we recommend about 5%. we think it is a nice diverse of ifier. it can provide some protection in a downdraft. pimm: thanks very much. ryan mcintyre.

much more coming up on the bloomberg "market day." ♪

pimm: welcome back. betty: let's get a quick check on how the markets are trading. julie hyman is keeping tabs on herbalife. julie: some headlines came out regarding a court case, a lawsuit against the company that claimed herbalife was a pyramid scheme. this is an allegation that has been out for quite some time. most notably put forward by bill ackman. you can see it turned around today. a court throwing out that lawsuit that had been filed by the oklahoma firefighters

pension and retirement system. that is causing a spike in that stock. going decidedly in the other direction, twitter shares after the company came out with earnings. the commentary on the conference call. take a look at my terminal. we see the trajectory over the past couple of days. this is the after hours yesterday, just after 4:00. twitter jumped to 41 post earnings. the conference call started about an hour later. jack dorsey said new products are not helping user growth. right after that, we heard from the cfo who said when we see meaningful pickup and monthly it will reach the mass market area those comments coming close on top of each other in prepared remarks on the call. we started to see the stock take

a decided turn downward after that event. that decline continues into today's session. another stock i've been watching, the best former in the s&p 500, a cloud it will compana provider of work at home in other cloud-based applications. elliott management. citrix agreed to add that company's chief agitator if you will to its board. it will begin a search for a new ceo as well. ceo mark templeton was requiring -- was retiring from the company. elliott has called for more cost cuts and a more focused portfolio. betty: thank you so much. coming up in the next half hour, saying he did nothing

wrong in the deflate gate scandal. explaining why he broke his phone which contained thousands of text messages. pimm: we will find out why paul allen wants to turn the city of seattle into the capital of art. ♪

betty: i did not know that. 46 -- 46,000 plus miles long. pimm: funding for the nation's highways is the focus today. the senate and house are voting on different versions of a highway funding bill. they have different timelines

and money is running out. betty: for the house, only a three month extension to the tune of $8 billion. the bulk of that for highways. we did not want this to happen which is another short-term extension but it looks like that is likely going to be the case. ramy: both the house and the senate are going to be voting on this either today or throughout the week. right now, things are developing quickly and strangely for congress. the senate is on the verge of adopting its own bill called hr-22. this is known as the drive act. bigger and more long-term to the tune of about $350 billion. by a vote of 65-35, the senate voted to end debate. a are expected to take up this final vote tomorrow and that is expected to pass.

the caveat is congress is going on there august recess for about five weeks so the house needs to vote on this. they are not expected to do that until september. does that mean this will go on until they come back from the beach? they will be doing this three month extension. this vote will be happening this afternoon or is expected to do that. that is called hr-3236. the bill's authority would expire october 29. pimm: this is not the first time they've done this three month extension. ramy: in the mid-1930's or so. pimm: they keep doing short-term funding measures. isn't the house controlled by republicans? and the senate? why can't they get together to make a deal that will do more than just three months? betty: it's congress.

things has tohe do with something called the x m . bank. the senate is ok with having this in their but the house wants to have a voice and they are not in favor of that happening. betty: beyond the machinations in congress, we really need to fix roads. what are the worst roads in the united states? ramy: according to a nonprofit based in washington dc, they just came out with something this month on the top 10, 20 or so worst roads. the number one city that has the worst roads is the san francisco/oakland. that is 74% poor according to trip. the percentage of poor roads of

city with 500,000 people or more. los angeles comes up number two. out of the top 10, four of the top 10 cities are in california. ark.york and new w betty: i have to service my car every two months when i drive. ramy: tell congress. they have to fund the roads so you do not have to do that as much. pimm: only until september. ramy: they will visit this again. betty: thank you. we say goodbye to pimm. we will be back with much more. ♪

betty: welcome back to the bloomberg "market day." let's take a look at top stories.

the first republican presidential debate. fox is easing the rules so candidates with low poll numbers qualify. not one but two debates on august 6 in cleveland. one for the top 10 candidates and a second for the other six. lindsey graham, carly fiorina and george pataki would not qualify under the old rules. the afghan government has confirmed the leader of the taliban in afghanistan is dead. mullah omar died nearly three years ago. reports say he died of tuberculosis. the cleric founded the guerrilla movement after the soviets left afghanistan. migrants are storming a tunnel linking written and france and its operator is pleading for help. the company says there were more than 3500 raked in tries in the last two nights. immigrants are desperate to

reach britain. about 37,000 migrants have been caught at the euro tunnel this year. a former navy analyst who served 30 years behind bars for spying will be freed. jonathan pollard got a life sentence for selling classified documents to israel. the obama administration says the administration is not an attempt to smooth relations with israel. "look bubbly." robert schiller admitted the housing market can be irrational. schiller: the best you can do is not invest. you can't profit from the knowledge they are going to fall. that kind of knowledge does not get into the market play. betty: the case schiller index shows the increase in housing prices slowed down to a little

below 5% in the last year. for the new york yankees, the hits keep coming. the yankees fell behind the texas rangers last night in the first inning and scored 21 runs in a row including 11 in the second. rangers, 5. new york has won 16 of its 21 games this month. coming up in the next half hour, we will get a preview of facebook earnings which are due after the close today. find out wide revenue growth may have slowed down. lloyd blankfein joining michael bloomberg for a discussion about revitalizing the economy. we will bring you that interview, coming up. the new england patriots are lashing out after commissioner roger caddell upheld tom brady's suspension over deflated footballs. robert kraft called the decision

unfathomable and said he regretted not appealing the leak penalties against team. evidence,he facts, and laws of science that underscore the situation, it is completely encumbrance of old me that the league continue to take steps to disparage one of its all-time great players and a man for whom i have the most respect. betty: kraft went on to say the revelation that brady destroyed his cell phone was designed to destroy the integrity of the team. rating went on facebook to insist he did nothing wrong -- brady went on facebook to insist he did nothing wrong. >> the cover-up has become the crime. the must suspect tom brady did

something or at least knew that was happening. now with the nfl changing its discipline, the fact that he threw out his cell phone. that is the cover-up coming the crime itself. etty: we don't know on the details. it sounds suspicious. >> the nfl does not have a high burden of proof they need probable cause. it does bring up broader questions about whether an employer is compelled to ask you to give up your private cell phone in these kinds of cases. the nfl does not have subpoena power but roger goodell also has widespread power to rule as he likes. betty: there was no legal case for him to be able to say hand over your cell phone or try to subpoena the records. kavitha: pat well -- ted wells who was conducting the investigation had no subpoena power. tom brady was not compelled

legally to hand over his cell phone. it looked suspicious that he did not and that he disposed of his cell phone. that goes beyond questions of legality. betty: this is getting into a legal case. the nfl players association called this ruling outrageous. you heard robert kraft say this is unfathomable. this will continue in the courts. kavitha: the nfl preempted the union possibly go action by filing a motion. is they were trying to get in front of this to say the jurisdiction for this case will be in new york and not minnesota where the u.s. are strict judge happens to rule in favor of the players and union. this will become located and dragged out -- this will become located and dragged out. you'll see links from either side -- leaks from either side in order to make this go on for

as long as possible. betty: goodell has a good relationship with the owners. during the scandal with ray rice you saw owners, including robert kraft, come out in support of goodell and his decision. is this the break that might jeopardize the dell -- goodell. kavitha: you can see the disciplinary process in the nfl is haphazard. very arbitrary. roger goodell as unchecked power. it is a farce that he is his own arbitrator. on the other hand, this is what owners agreed to. a little tone deaf for robert kraft to come out and say he regrets putting faith in the league as he has been against neutral arbitration. input himself in a situation that sense. it is interesting to see someone as ingrained as robert kraft start to break from that.

betty: he is fine with it as long as it does not come down on him. what about for brady himself? kavitha: i think brady is trying to maintain his marketability and his legacy. there was a report saying the nfl considered having his games total if he came out and publicly apologized . there is a report saying he refused to do that. betty: that would be more damaging for his image. kavitha: much more long-term damage to his brand. he has adamantly denied this. maintaining his insistence -- his innocence. he did not want to set a precedent for other players that he would have to give up his private indications. -- private communications. betty: thank you so much, can be the -- to be the davidson. we are still talking about nfl

owners. paul allen of the seattle seahawks. how he wants to turn seattle into one of the world's from your art destinations. ♪

betty: welcome back. i'm betty liu. let's get to julie hyman for the big stories on the market today as we are waiting for the fed's statements. julie: we will see if there are fireworks from it. we have risen to the highs of this session. a lot of what we are seeing is earnings driven.

we haveinteresting is accelerated gains throughout the day and broadened gains. utilities is the only group that is lower right now. consumer services, materials, long list of groups leading the game. there is also oil and gas which is up about or tenths of 1%. -- 4/10 of 1%. the inventories number showed a drawdown in inventories. that shrinking of supply we saw a movement upward in the price. if you look at some of the movers within that industry, anadarko petroleum posted earnings as rising today. pioneer natural, some of these names that have been beat up, particularly offshore drillers are recovering today. the fed statement, we want to look at what is going on in the

currency market and the bond market. ae 10 year, we are not seeing lot of change but movement upward in yield. when you saw utilities at the down group, this is having an effect on that 2.29% as utilities tend to be more sensitive to increases in interest rates. interesting we are seeing a movement upward in rates ahead of the fed meeting because we are expecting no change in rates. we will see what the commentary says. let's look at the u.s. dollar by the same token. the dollar will see movement if we do get meaningful news out of the statement. right now, not moving much at all. we have this treading water affect on fed days when people wait for what the fed is going to say. betty: they don't want to become offguard, on the wrong side of the trade.

julie hyman, senior markets corresponded. plunging.yelp down a record 28%. the consumer review website has cut its revenue forecast. yelp also says it will stop selling national brand advertising. the company says local advertising will drive growth. amazon is proposing rules of the road for the air. the company wants the government to declare a drone zone so it can go ahead with airborne package deliveries. officials floated the idea is to conference sponsors by nasa. linkedin, cutting back on e-mails. instead of getting an e-mail for every invitation, users who are overwhelmed with invitations will only receive one weekly digest e-mail. users who belong to group organizations will get digest of the group's updates. no more minute by minute e-mails.

changes will cut e-mails by 40%. windows 10 was released at midnight. in the past, a release of windows -- of new windows sparked a surge of consumer by -- a computer buying. that has not been the case. >> this is a significant launch for anybody who uses pcs and wants to get things done with technology. we have had big launches that things likeed enabling the internet to happen. we will reignite excitement around pcs. take that advice people used to get work and creativity done and rejuvenate it. betty: microsoft is offering windows 10 as an upgrade for existing pcs. for removes one reason people to rush out and buy a new computer. patent about microsoft, what happens when your city is doing well due to technology and a

booming housing market? you get an art show. at is what paul allen is bringing to seattle and the pacific northwest. alan's investment company is producing the first ever seattle art fair. an estimated $250 million of contemporary art is for sale. allen is an avid art collector. mark crumpton, who is never sent me a linkedin invitation is joining me now. mark: during the commercial break, our floor director said: now children. mr. allen said flying art -- buying art turned out to be a good investment. you are talking about one of the wealthiest men in america and now he is able to put on his own art show.

we are talking about the pacific northwest, an area close to silicon valley, tech entrepreneurs. we are talking about massive wealth. buyers and sellers. people who can really get into this. this is good for that region. betty: it is and it is not unlike other wealthy billionaires who happen been able to bring culture into their town. isaac about the waltons -- i think about the waltons opening up a controversial museum in their roots in arkansas and others. think about detroit. up culture that was sprung when you have people like dan gilbert and others. this is part of that. paul allen is worth $17 billion. all the wealth in the world and all the time on his hands. mark: he owns the seattle seahawks. betty: he is diving for sunken treasure. producing documentaries.

mark: this story on bloomberg.com, it is excellent. it says in 2014, mr. allen sold one of his bronco paintings at auction -- his rothko paintings at auction for $250 million. the price he paid, $34.2 million. talk about a nice return on investment. it is fed day. betty: we're not getting much return on our savings investment. mark: no one expects anything to happen today but folks will be looking for clues. it seems that everybody is convinced lift off for rate hike will be in september. coming up next hour i will be speaking with kevin logan, chief u.s. economist at hsbc. we will get a preview of what the fed might do, try to read between the lines and look at the tea leaves, whichever

metaphor you want to use. betty: mark, see you at the top of the hour. coming up, much more ahead including monthly active users. a statistic that continues to plague twitter. we will discuss it after the break. ♪

betty: welcome back. what a beautiful shot of the san francisco bay bridge. twitter, not so beautiful. a clear message for investors, we have a lot of work to do. jack dorsey did not spend much time dwelling on the revenue beat or any of the past successes. he talked about twitter's shortcomings, especially on products. >> i have not had -- have not

had full impact on our audience. we are not happy about it. over the past few weeks, i have had a chance to get a deeper understanding of where i need to focus our team. betty: dorsey's tone sent this dock -- sent the stock plummeting. twitter's user growth remains slow. feeding concerns whether it can ever become a mass-market service like facebook or google. we are joined by elliott wheeler of gray cross partners eerie at everyone gives him a big thumbs up for being honest, which he can because he did not create those problems. it is true what he is saying. elliott: he is being very straightforward. i think they have consistently had trouble positioning the company and telling the story to wall street. betty: position in the company

million newnly 2 users. paltry in an area where we are used to seeing 50% such growth. ellie: that is a problem. paltry in an area where we are used tothe traditional pn how do you appeal to mass-market users. not the people who are on their everyday. how do you make it an easier process? it is something they have been talking about for years. users. betty: how do they make it more appealing to the mass-market? ellie: i think it's product and positioning. they are looking for a cmo. part of it is a marketing problem. making it easier for the layperson to get started. that is the biggest problem. they have opportunities around live events and you will see them -- i think they discussed

project lightning, more about the live event. that is not necessarily an everyday use case. it will be interesting to see how they marry the live event focus with every day. betty: it can't be big moments. it has to be sticking to a person's life every day. "the bottom line for twitter is that after nine years of existence, my mother still does not understand what it means to # something but she does understand what it means to like something." ellie: it is interesting to think about the history. the hashtag was created by a community and twitter institutionalized it. now we have to broaden beyond that. betty: do they? there is talk now about, does twitter need to go after new

users? maybe this have to make their experience better for existing users and forget about getting his mom. maybe she does not need to go on. ellie: i think making it better for existing users, i do not think it is either or. it has to be sustainable over time. it will be better for existing users but hopefully that makes it better for new users so they can on board in a better manner. twitter.eeds to be there is opportunity for them to be what they are. they need to tell the story of what they are going to be more clearly. betty: facebook, i think it's to tell the story better about how they will monetize some of their properties. twitter --ink facebook has done a nice job. -- they hadago managed to reorient.

i'm not sure if you can fault them. i think you're starting to see it on instagram. they are rolling out additional tools. it will be interesting to hear how they are thinking about mobile video and monetizing products around that. users.ve 4 billion -- views. betty: their revenue growth is slowing down. ellie: i think there is a lot of room to run. i think people will find things to worry about but i think there is plenty of potential within the core products. you see that with their move to mobile. i think mobile video will be interesting. betty: i believe been schatzker's mom is on facebook. ellie: maybe on instagram. wheeler, thank you for joining us. lloyd blankfein joining our boss, mike bloomberg, for a

conversation on jobs creation, the markets and more. here is a sample as you had to break. bloomberg: the banking system is the leverage. yet the blessing of low energy prices. in forin: i think we are market.sh, positive ♪

10:00 a.m. in san francisco, 1:00 p.m. in new york and 1:00 a.m. in hong kong. mark: what will janet yellen and the fed to say about raising interest rates?

toot september 2 soon? -- soon? discussionde-ranging on the u.s. economy. mark: stephen harper discusses the slowing economy and what he plans to do could spark growth. betty: good afternoon, i'm betty liu. mark: i mark crumpton. thank you percent with us. -- for staying with us. the dow jones industrial average is near its session high. up .5%. the dow jones industrial previous