the economy is revised to show growth rather than contraction. we will show you what that means for the fed's interest-rate decision. pimm: and keeping the money flowing to the nation's highways and bridges -- why a longer-term solution could be a long way down the road. at how the will look u.s. postal service is transforming itself into a delivery service for amazon. the e-commerce era, delivering fewer letters at more packages. -- and more packages. pimm: good afternoon. i'm pimm fox. scarlet: i'm scarlet fu. stocks little changed at the moment. failing to build on the today gain. the nasdaq off for a third day but not really up by much.

economic earnings sent the indexes lower, facebook dropping 4% after it second quarter spending increase. facebook really opening lower over the last two days. whole foods is another loser after reducing its sales forecast. let's move on to commodities. nymex crude and brent moving a little higher. brent a little bit more. they are still down again for as we have seen increased volume. pimm: look at this chart -- this is the biggest monthly chart. that is amazing. it is ugly and has changed a lot since the fed's -- lastting for top

meeting. the 2-year note reaching the highest in six weeks on that gdp report. that raises the probability of a hike in september. the gap between the 30 year yield narrowing. finally, let's take a look at the currency market. the dollar strengthening against the euro. taking a look at the yen -- the dollar strengthening their. matrix the currency which i use on a regular basis. is colorful and easy for me to read with my poor eyes right. but there, you get to see what's going on against the various currencies. let's take a look at the canadian dollar. you see the dollar gaining and strength, all the way back to

july of 2004. let's get right to the top stories at this hour. the u.s. senate will vote on the highway bill in less and 90 minutes. then they are going to take off for vacation. the house has a version of the measure yesterday and the bickering -- it is only a three month extension and if it doesn't pass, the highway trust fund will actually run out of money at midnight tomorrow. aalaysia's mayor says metal sheet found on an island will be sent to france for a test. the object might be from the missing malaysia airlines jet. officials think it looks like a wing flat from a boeing 777. beenace of the plane has found since.

australia officials are encouraged by the discovery. is the first real evidence that there is a possibility that part of the aircraft might have been found. it is too early to make that judgment, but clearly, we are treating it as a major leap and seeking to get assurance about what has been found and whether it is indeed linked to the disappearance of flight 370. scarlet: the part was flat out -- was found by someone cleaning the beach. the u.s. economy picked up the pace in the second quarter. gdp rose at an annual rate of 2.3%. slightly less than economists anticipated but they also revised the first order figure higher. also today, freddie mac reporting average mortgage rates are below 4%.

it is the second weekly decline for homes. pimm: first time unemployment -- if the number stays below 300000 and hiring increases, the federal reserve may decide the u.s. economy can withstand an interest-rate increase. a new reading by bloomberg indicates americans are increasingly worried about money. the consumer comfort index dropping to the second lowest level since november. sentiment among those individuals making more than 100 -- 100,000lars are lesser year confidence. estimating fed is

the basement is 1.8 percent to 2%. we have had a very weak first-quarter and the second quarter is on that flight of 2%. pimm: the bloomberg consumer comfort index gauges attitudes about personal finances as well as the country's economy overall. amazon is putting jeremy clarkson in the driver seat once again. the former host of "top gear" will do they show for amazon. cohosts james may and richard hammond will be along for the right. show after he was abusive to a producer. pimm: most barriers to interest rates are twiddling. thelatest gdp results show u.s. economy picked up at a faster pace of growth in the second or. with janetat agrees

yellen's view that gains were transitory. create clarityta for janet yellen? guest: what they were concerned about is whether the growth rebound was sustainable and creation will continue. it looks like most of the news was ready good. pimm: give us an update on inflation. mike: the core is up 1.8%, running hotter than the fed had expected. it does show some nascent price pressure, though it has been picking up a little steam. the fed is looking for 2%. is it wages or something else? mike: they are looking at 2% for a different indicator. we are seeing growth and wages move up a little bit and that's starting to push some inflation pressure higher.

companies are starting to raise prices -- not for commodities or energy, but in other energies -- other industries. pimm: what does the personal income number tell us? the: we are seeing some of gasoline price dividend -- we've got some extra money in our pocket so we can go and spend. consumer was the brightest part of this report. the bad news was business spending -- another cut back. a lot of it had to do with cutbacks in the oil patch is in the oil drillers cut. that is not good news for the economy overall. also a big rise in inventory. if we have that much stuff sitting around that we are not going to be selling, that does not bode well for manufacturing production. right now, traders are pricing in a higher probability

that the fed will move in september. you can see if you go further in for october, 54% december, 76%. yesterday, that december rate hike was at 74%. given that, we have a long way to go before september 17 and the fed has said it is data dependent. what will you be looking at the most? is it the jobs report? in a fewwe get one weeks for the month of july and then we get one in august. if it stays the same or goes down a little bit, they are on course to move. they have pretty much made up her mind that if the numbers are on track, if they stay on the same course, septembers going to be the day. it would take a reversal for

them to change that. michael mckee with his latest on the gdp report. his call yesterday, mark zuckerberg asked his investors for a rare commodity -- patients. asked when they might rake in money from instagram or whatsapp, zuckerberg said we would ask for some patience on this to do it correctly. scarlet: if this sounds familiar, perhaps it should. just a this has also asked for time to be for profit margins and they have obliged. will facebook investors be as generous? our guest joins us this morning. we compare facebook with amazon -- certainly jeff bezos knows how to manage investor expectation, but 1 -- to what

extent has the condition them so that people who invest in social media companies can take that and that that expectation into how they are pricing of the ?tock market yesterday -- or member of the management has repeatedly said this would be a year of heavy investment. in the long term, these investments are bound to pay off. just given facebook's track record. amazon had a similar investment infile, investing heavily infrastructure, in prime and in the cloud. this quarter was a real surprise for investors. they delivered a huge profit which was a complete surprise for investors and their cloud unit is really taking off.

great% gain there and writing margins. finallyinvestors are believing in the long-term investment story. if you come inside the bloomberg terminal, you can see research and development climbing on a quarterly basis. facebook spent $1.17 billion on research and development. what's the distinction there versus say amazon? facebook is really investing in ad technology and virtual reality products. amazon has been investing on their film and centers and investing in prime. their video streaming product, they spent 1.3 billion dollars just for content. but that is all paying off. they don't disclose prime

subscriptions, but the numbers are around three 5 million to 50 million. that is huge. similarly, the cloud has been a big positive for them. i wonder if you can talk about facebook cause geographic reach and breakdown of revenues for where they come from. i think it is a 50/50. the average user in the united states and canada is far more profitable. when we look at the money, the revenue per user is far higher, about 3.5 times that of an average facebook user. they are going to keep growing users across the world, but where it translates to revenue, the u.s. is the most profitable market.

keep introducing more and more video ads, those are more profitable in terms of unit costs, so that's going to lead to an increase in their revenues. pimm: thank you for spending some time with us. scarlet: i like how she said when it comes to spending, it's still going to be the u.s.. are you on facebook? pimm: yes. scarlet: but they haven't made money on you? pimm: not to my knowledge. couldt: coming up, what be the deal let creates the largest health insurer in history. and nouriel roubini gives his view on the state of the u.s. economy and when the federal reserve might increase interest rates, next. ♪

pimm: welcome back to the bloomberg market day. i'm pimm fox. scarlet: i'm scarlet fu. let's get a look at the markets with julie hyman. sector, which is better than it was when all three averages were down. it is a very earnings driven market. in terms of what is pushing and pulling, it seems to largely the earnings, so i want to start with one going higher since we are seeing a little recovery in stocks. a win is an interesting story because earnings were not strong. company possible macau business continues to drag on

it. steve when, the chairman of the company says he feels confident enough to send an opening date -- to set an opening date for his casino in macau. the chinese government there has crackdown on corruption, which has had a chilling effect. is macau gaming revenue and you can see it pete king 2014 and has been going down ever since, having monthly drops ever since that point in time, so that has had a negative of that on win. wynn. we are also watching a chipmaker doing very poorly. corvo -- down 16%. this is a maker of chips that s.es into smartphone they are having their biggest drop since they did come

together and started trading in january. the company expressing questions about weakness in china and that is weighing heavily on shares. whole foods -- you saw those shares trading at a three and a half year low. earnings missing estimates and the comp sales growth the slowest since the fourth quarter of 2009. if you look at the comp sales on the bloomberg terminal, whole food is a consistent performer, but new competition has entered the market. you have organic groceries at walmart and competitors are undercutting on prices. we have seen that waning growth in recent quarters. scarlet: all of those reports that whole foods was that wasing top julie:

specific to the new york area and the pricing gap has been shrinking. let's take a look at some of the top stories this hour. pushing its forecast as it plans to overtake sprint. has used free music streaming, phone of financing, low prices and data giveaways to take customers from its larger rivals. braxton carter will be on bloomberg market day coming up at 1:30 today. wants herane birkin name taken off a popular hermes handbag. the animal rights group, peta, has accused the group of using cool practices. that's a look at the top stories this hour.

do you know the most expensive handbag ever auctioned? $220,000 sold at christie's in hong kong. does it come with money in the bag? scarlet: they build a room around it. leftg up, just two days for the highway trust fund. where will the highway meet the road? ♪

scarlet: this is the bloomberg market day. i'm scarlet fu here with pimm fox. pimm: today, the u.s. senate is expected to pass and $8 billion stop to make sure the roads state-funded. scarlet: wednesday evening, the house passed the measure, but this eating congress, it's only

a temporary measure. white of they just pass a long-term funding bill instead of a stopgap? than three years of funding. we want a truly long-term bill and keeping the reforms we put in place. the senate bill takes some of those out that we pass to an half years ago. we want to continue to build on those to make sure the states can move faster and bill these projects quicker. when you do it faster, you save money and that's good for the investment in infrastructure. scarlet: of course we are still waiting for senate action but let's look at him of the possible winners and losers. who would benefit the most from a long-term highway funding plan when it happens? guest: we are looking to a time frame after the august recess that could be in the form of a $350 billion measure.

looking to potential winners, it makes sense that construction and materials would be some of the companies there. --ec, caterpillar and dear caterpillar has been down here today at about the team .5%, so if more federal money goes into road repair, they are going to need take equipment as well as some of the materials that go into it -- granite construction and vulcan materials could all be a pop. the other thing is trucking and transport -- the things that use the highways. we are looking at swift transportation, fedex and ups. swift is down 17% and ups is down 9%. things like knight transport and warner -- this comes off the fact that there is less congestion and less wear and get -- if the potholes

filled, there's less repair that needs to happen. one interesting thing is the american trucking association ind it supports an increase the federal fuel tax because they made a calculation that the cost to repair is greater than the cost of the fuel tax they would have to pay. but they are the largest trade group in the country. thank you so much for all of that. pam, you are off. i'm back with you tomorrow. mm, you are off. we have much more coming up, including a conversation with the cigna ceo. ♪

♪ ♪ ♪

get excited for the 1989 world tour with exclusive behind the scenes footage, all of taylor swift's music videos, interviews, and more. xfinity is the destination for all things taylor swift. scarlet: welcome back to the

bloomberg market day. i'm scarlet fu. let's get a look at the stories making headlines this hour. a university of cincinnati police officer pleaded not guilty today in the shooting of a black motorist. he's charged with murder and involuntary manslaughter. he is being held on a $1 million bond. he stopped a man at the university of cincinnati 12 days ago over a missing front license plate. officers body camera captured video of the moments before the shooting. said he thought he would be dragged in a car and feared for his life. donald trump's lead over his rivals is widening. trump according to one full with scott walker coming in second. 30% of those surveyed said they would never vote for trump and polls show hillary clinton would beat him had to head 48-36. republicans certainly can't say they don't have enough presidential choices, but a 17th

candidate is in the race. we are talking about former virginia governor jim gilmore. no telling whether he will get into next week's televised debate. home rental prices keep climbing faster than incomes. rents in june were more than 4% higher than a year ago. signs rent hikes have in places like new york and washington. of aou can own a piece historic u.s. victory. the goaltender who led the miracle on ice is selling his memorabilia. -- greg is auctioning his jim craig is auctioning his memorabilia. he says he wants his children and grandchildren to be financially secure. he is a motivational speaker now. that's a look at the top stories this hour. turning to one of our other top stories -- a healthy order for

cigna. visited emergency rooms and doctors offices. company agreed to be taken over by anthem for more than 48 alien dollars. since that deal was announced, the stock has been slumping. investors are not convinced it is a done deal. the cigna ceo spoke to bloomberg television earlier. olivia sterns asked how confident he was the deal would get approved by regulators. guest: the stock is up a little over 40% to date. it is trading at a large discount in terms of the offer price. largely, it is the uncertainty, so we know we have a long process ahead of us. we are confident it will be approved because through the diligence of the work that was done, the businesses are quite complementary. revenue are in

businesses that anthem is not in. seniors businesses have a large scale and leading medicaid business and we are not in that work folio of businesses. longverhang is through a time window but through the regulatory process, the transaction will be approved. >> are you guys going to have to give up a lot of assets? david: we expected there would be some and they are modest and mad -- and manageable. many of the markets where anthem is strong, cigna is present but not as large. and where we are strong, they are not in, so there will always be some of the transaction, but modest. olivia: have you started speaking with regulators yet? david: early conversations, but

that's an ongoing process. olivia: are you worried that is not the appetite for two big deals? david: i think the key is demonstrating with ask what the results will be in the marketplace. tomorrow and -- today and tomorrow, there will be ample choice. there are some new marketplaces -- the public exchange in the private exchange growing for the commercial population and retiree population and there are new digital marketplaces. the key is is there adequate choice? can it create better value for the consumer and work to get the health care professionals providing value? >> as this deal was closing, there's a lot of questions about .ho is running the company are you going to be the ceo after this all filled out?

david: the way it is designed, my partner will be chair and ceo and i will be resident and coo. the key is to make sure we have the right governance and leadership structure to move forward and we feel like we have arrived at. jill will have responsibility for the evidence of the corporation and importantly, the two of us partner with accountability towards the integration. the last question is a to the board of directors. the key is to build the next stage of the company. olivia: how do you feel about not being in the ceo spot? david: there is going to be a 12 to 18 month transitional cycle, so we have a great is this that needs to be led and run and we are only engaged in doing so. role,tioning into a new

having responsibility for a global portfolio of businesses is very exciting and harnessing that value to work differently with health care professionals and continue to involve -- continue to evolve our portfolio. >> you wrote a letter to anthem's board and said they don't have a growth strategy. they suffered a massive hack, the biggest in health care history. you said they had not really taken the steps you felt they .eeded to you raise some concerns about the government's. what changed about that? this company that you are going to be joining has resulted in a lot of issues. as the public narrative began to unfold, there were the conversations that have been taken place -- had been taking place.

joe and i were talking about that. in any deal this size, there are going to be some issues and we highlight that very clearly to your point. been able toen or get access to the visibility to appease ourselves to our fiduciary responsibility. we need to complete that body of work, so post that letter writing dynamic, we got access and visibility to the right information. we spent the time and we are patient. we are able to appease ourselves that those risks are manageable and the combination we are able to configure is a win-win for shareholders in the market over -- over thel top long haul. goingt: coming up, we are to look at how more and more amazon is relying on the u.s. postal service to gets packages delivered seven days a week.

you may have seen them out delivering your package on a sunday morning. shares of t-mobile are out today. we will shoot -- we will be hearing from the chief financial officer. no word on whether he's got his pink t-shirt on. ♪

scarlet: good afternoon from bloomberg world headquarters in new york. i'm scarlet fu and this is the bloomberg market day. a hot and muggy day in downtown manhattan. let's get to julie hyman -- fairly quiet in terms of the actual indexes. about theant to talk fixed income market and the 2-year note in particular. we are seeing the yield the highest in six weeks.

that's on the back of the fed statement yesterday and the gdp report. aresentiment seems to be we -- we are on a trajectory for the rates to be higher. incidentally, the last time it was at this weeks week i was june 17. that is when we heard from the fed the last time and it signaled we were likely to get one or two rate rises this year. take a look at my bloomberg terminal and you can look at the execution price into the fed funds teacher for a rate increase in september. obviously, we're seeing a move atard and is being priced in a 39% chance before we heard from the fed yesterday. in terms of when the second rise may come, that is tricky. there's talk we might not see it weil sometime next year, so probably will not get consecutive increases.

the dollar today, we are seeing it trade at its highest in about four months. this is the dollar index, off about three quarters of 1% on these estimates that we will be seeing a rate increase. where it is really hurting is in emerging market currencies. take a look at my bloomberg market terminal. this is an index of 20 emerging market currencies. we have already seen a huge pullback in these currencies on the expectations that the fed would be raising rates and now that we are getting closer to it , it's definitely not helping these currencies. we see this particular index at a record low. the perception is as borrowing costs go higher, what affect is that going to have ripple around the world? i don't know if it was you who pointed out that a lot of these nations are commodity producers so the currencies have not

been doing well. scarlet: i was just thinking the brazilian rial was one of the currencies leading the way there. let's head to asia in terms of what has been happening there because samsung came out with second-quarter numbers and its profits miss estimates after misfiring on it smartphone strategy. samsung shares closed down 3.8% overnight. >> samsung's net income came in at $4.9 billion, falling below analyst estimates. its mobile unit was badly hit with operating profit slumping 37%. were aappointing figures result of strategy miscalculation and a loss of market share. the manned for the smartphone lineup, failing to produce enough of the popular

edge model while their popular models struggled to challenge the iphone. they also had to struggle with slowing demand in china will -- in china. now for a look at the top stories this afternoon -- time warner cable posting second-quarter profits that missed analyst estimates. earnings are share fell 26% short of estimates but sales gained 3.5%. time warner cable is waiting for regulars ok the merger with charter communications and the chief says that is driving his strategy. >> we plan to use it to further strengthen operations. in the interest of maintaining stability, we put the brakes on some measures that don't make sense in light of the merger. otherwise, we're going to stick to our game plan. scarlet: the company says it was

hurt by rising costs but if it does go through, that would create the second-biggest cable and broadband provider. procter & gamble shares falling the most in almost two years after the company forecast sluggish sales and profit growth. this did come in higher than estimates. they have been cutting costs and selling divisions like beep food and cosmetics business. the company has announced that you will be stepping down in november. he was supposed to be an interim ceo. fiat chrysler reporting a jump in second-quarter profit. adjusted its forecast. the ferrari supercar division is being spun off to finance the jeep, alfa romeo and maserati brands. living in the san francisco bay area is not cheap. it's the most expensive housing

market in the u.s., but some people would do almost anything to live there, including living in a shipping container. that is what one wharton graduate is doing and hopefully making a business out of. mark crumpton joins me. would you live in a shipping container area to live in the bay area? mark: there is a colleague in the bloomberg terminal about this. -- his namen's name is luke and he's figured out how to afford the san francisco bay area. he lives in a shipping container. scarlet: and there are pictures of the shipping containers he has fashioned. this say more about the lack of affordable housing or is there a lot of wealth eating created in that area of the united states of america and some people, like this joan r dean priced out? scarlet: i think it is a little bit of both.

he's capitalizing on the attraction to the bay area for top you have a lot of immigrants heading to the bay area trying to make their fortune and they needed they still live until they strike it big. : a chief market analyst for paragon real estate says thanks to the tech boom, 10 jobs are added for every new resident and the pressure is reaching crisis proportion and for some, it's creating opportunity. you imagine they might want to go into the bay area and's cap up these rentals. look at the housing market. the median rent, $4452. the median sales price, 1.1 4 million. that's a staggering amount of money. what i found interesting was it not legal.

they are skirting around the laws little bit and he's just waiting for people to catch up, but overall, this is fairly common. mark: we also talked to a planner who said it might be a stretch, but across the region, zoning restrictions are unnecessarily tight and do not reflect the way people live. that is probably an understatement. that is because somebody posted something on airbnb to come and live and a -- come live in a tent. and sanle housing francisco -- that is an oxymoron. mark: the saudis are apparently

trying to diversify their economy. they are always mentioned as the oil-rich saudi kingdom, and that is true, but they are looking at other ways to guard growth and gain some momentum in that economy. we will talk to someone who is there on the ground and see what the saudi's were up to. mark crumpton will be back at the top of the next hour. in the meantime, from the latest issue of his this week -- you are not seeing things. to get him there. we will look at that collaboration with the u.s. mail, next. ♪

scarlet: good afternoon. it is actually raining in midtown manhattan. it's a hot and muggy mess. we are due for some violent thundershowers that haven't started, so if you are going out side, get ready. in this issue of bloomberg business magazine, will a partnership that gets everything youreggs delivered to door. the u.s. postal service wants to invigorate service, so that means sunday delivery and retailers like amazon. not long ago, there was a debate about whether the postal service should suspend saturday deliveries and now they are delivering packages on sundays. --y have been doing it guest: they have been doing it

since november of 2011. much of this is new spending versus taking advantage of what they have? the interesting thing is amazon has created sorting centers and say they are going to build more -- they are doing their own sorting and putting packages and setting the right to post offices. that doesn't cost the postal service any money and they have been able to put these new employees -- they are paying half of what they were playing the old employees under the new union contract. it's not costing them a lot of money. so the u.s. postal service is like uber drivers for amazon? guest: kind of. but that is true in a lot of ways.

scarlet: flexible workforce and all of that. we know how much the postal service gets paid compared to fedex. how much is that? guest: two dollars. scarlet: that doesn't sound like a lot. guest: they are saving the postal service money by sorting it for them. otherwise they would have to pay twice as much. dewey have any idea about health fedex and ups is responding? guest: not well. they are questioning whether it is anti-competitive, but the postal regulatory commission has approved what they are doing. it's going to be interesting to watch how this unfolds. scarlet: the new postmaster general started off as a letter

carrier. is she making any more headway than her press esters in getting support to fix the agency? the problems are all the same problems. she was saying the sky is falling and we have to cut. she's thing we have to grow the business -- she wants to cut but she's pushing the growth more and the economy has turned around she came in, so things are right as bad as they used to be. the larger problems -- nothing has changed. more recently, they have been saying standard mail -- they don't like junk mail. year, so thatst is not growth. senator elizabeth

warren has proposed getting them into banking services. that was a surprise. u.s. postal services did provide banking services for a long time -- small deposits -- that goes back to the 1890's. pushing that is the american postal workers union and they represent people working in post offices, so they like to do that. i don't think congress has an appetite for it. postmaster the general, and i don't know where that is going. so much.thank you great story. we will have much more coming up, including t-mobile's cfo on bloomberg market day. ♪

>> it is 10:00 in san francisco. mark: u.s. economic growth picks up at the fastest paced in the

second quarter. will it be enough to convince the fed to raise interest rates? bill gross things it is. plunging onceices again, saudi arabia is desperate to find new areas of growth. a look at the world's biggest oil producer and how it is trying to diversify. --k: another successful t-mobile hurray we will hear from the company'cfo about the plan to in the wireless wars. ♪ -- win the wireless wars. ♪ scarlet: good afternoon, everyone. mark: thank you for staying with us. let's look at the markets on this thursday here in new york. stocks paring back losses