bloomberg market day. mark: the u.s. economy expanded at a faster rate in the second quarter, setting the stage for a also a possible rate hike in june. all eyes are on the next quarter. betty: and there could be a big cost to auto insurers. the owners of oracle are part of the revolutionary birth control program, one that has already made a big difference for unplanned pregnant. -- unplanned pregnancy. ♪ good afternoon from bloomberg world headquarters in new york. i'm mark crumpton here with betty liu. seeing you here. if i had time more. betty: i know, i feel like i should be on the other side of the screen. as we headarkets

toward the close, just a few hours away from the closing bell. we are mixed right now. digesting whatl the fed said yesterday, but also the gdp numbers that came out this morning, the second order gdp numbers. a bit of a disappointment there among economists in terms of the topline gdp growth. but we did see consumption of 2.9%, and that seemed to be a bright spot. also in the treasury markets, yes, you see the 10 year yield continues to come down. but the two-year note is rising. the gap continues to narrow and that is because we are expecting september rate hikes. in terms of the currency markets, we've been watching the dollar hover at the four-month high. the euro is trading higher again -- lower again given the dollar strength. bek: a lot of that seems to

because the consensus is there will be a fed rate hike in september. for the next two months, that data will be very significant. betty: mark: indeed. let's -- betty: indeed. mark: let's take a look at some of the other top stories. an object found on a french island will be analyzed. officials think it looks like a wing jet -- a wing from a jet. -- ofce of the training the plane has been found since malaysian flight mh 370 disappeared. of it's the first evidence the possibility that part of the aircraft may have been found. it's too early to make that judgment, but clearly we are treating this as a major lead and seeking to get assurance about what has been found and whether it is, indeed linked to the disappearance of nh 370.

mh 370. mark: they also found a suitcase with wheels. americans are increasingly worried about money. the bloomberg sumer -- consumer was at awed it five-month low, dropping to a at a 10owest levels month low. one economist explain his worries about growth on bloomberg surveillance. 2% -- ould say below tom: you are saying below 2%? >> yes, we had a very weak first quarter. was slightlyarter above 2%.

we will not be doing great. consumere bloomberg comfort index gauges attitudes about personal finance as well as the country's economy overall. for: applications employment benefits rose last week after eating a four decade low. -- after hitting a four-decade low. the overall total is still well under 300,000. strength in the labor market could convince the fed the economy could withstand a rate interest -- an interest rate increase. betty: the temporary resolution with federal prosecutors on civil content accusations tied to the illinois republican senator's campaign. in march.igned a grand jury has been hearing testimony.

mark: in the days of cheesesteaks are over at craft headquarters. according to the contents of a memo removed -- reviewed by bloomberg news, the company is aimed at expenses like travel, electricity, and office supplies. kraft foods had started to cut supplies and is even yanking snacks. those are your top stories. appears to bemy bouncing back at the latest gdp reports show growth clocked in at a 2.3% rate in the second quarter. betty: this is consistent with the picture painted by the fed yesterday and could help with a rate hike later this year. we are joined by lindsay, a chief economist. she doesn't see left off until next year. also, a portfolio manager at pimco. thank you, guys, for joining us. we know where lindsay stands on

interest rate. tony, are you with the consensus given the data today? tony: it looks like the bar is low for a rate hike in september. it looks like the fed is a -- is inching toward a rate hike. you can think of janet yellen as the fed has ever had. she has been numbing the pain. the yield curve is flattening trend display. as longer data bonds are rising, you'll is falling. but in short bonds, for example, the one-year treasury bill is at its highest in five years. this is evidence that janet yellen has been successful in guiding the markets to think about the long-term payoff and the ultimate destination on race , and also on the inflation story, which both go together. ok, but lindsay, as betty

alluded to, you're not convinced. why not? lizzie: i think we are still seeing weakness in the economy. : i think we are still seeing weakness in the economy. and i have a hard time plotting gdp gdp report for just 2% coupled with such a slow start out of the gate certainly there area provision, but you averaging 1.5% growth across the first six months of the year. to reassess the now twice lowered bar of expectations, we will have to see over the next six months. tony: look at revised data back to 2011. it shows that the economy has grown at a 2% rate, and yet despite that, job growth during the same time was well above growth and the labor force,

which is to say strong enough to lower the jobless rate and give the fed the progress it once on employment. yes, it's not as strong as we are accustomed to from our older days. but we gotten accustomed to slower rate. it seems the economy can only grow around it and above it is pretty good. betty: but isn't that the mystery? and by the way, jobless claims showed a pretty significant drop in claims. that bodes well for the job market. but isn't it a mystery that we can grow at this rate and still create jobs? talking we should be about 300,000 or hundred thousand on a yearly basis. not only should we see more robust activity in the labor market, but we should be talking about 3% to 5% gdp, which is where we were in the previous cycles. again, 2% is ok, but it doesn't

give the fed enough to justify a rate increase. if anything, this bolsters our argument that the fed should wait on the sidelines much longer than the market anticipates. mark: we've been hearing from people in the past couple of days and the defense was when the fed does raise interest rate, it'll have to be in crude mental to not jolt the markets. incremental -- define incremental. in its: -- tony: projections, the second quarter projections, it suggested that every other fed meeting and there are eight per year, that is about a percentage point per year. in 2006, the fed moved nearly every six makes -- six weeks. it's a much different path that is set. in 2016 theprised fed decides after a few successive hike, if that

happens, to pause and show how data dependent it is and how it wants to be cautious, considering the many headwinds that janet yellen says the u.s. faces. betty: earlier we played a sound bite from roubini talking about the economy. we have another one here talking about the future, the outlook for the economy. let's play that. >> i was say that we are will probably be low 2% for -- we will probably be below 2%. basing it on 120% to 2%. we've had a very -- on 1.8% 2%. we've had a very weak first-quarter. we will not be doing great. betty: how do we lift up in the second half? lindsey: i think one of the things we need to see is business investment and develop it. small business development and syrups are on the low.

we continue to see the need for investment in infrastructure and employees. the 2% gdp actually came from the consumer sector. but that will have to be supported by something in the second half of the year. if we don't see business develop it, that will not transfer into further hiring gains and income gains to support for the spending. mark: tony will give you the last word. tony: we would agree with that because of the labor market. productivity has been less than 1.5%. that gives you the 2% growth potential. and investment in people stuff, you get better returns in the long-term. betty: thank you so much, tony. and thank you also as well to lindsay. we've got much more ahead, including rio waters are so dirty that 2016 olympians are risking more than just the gold competing in them. mark: we have the details.

they are not pleasant. ♪

-- welcomeme black back to the bloomberg market day. i'm mark crumpton here with betty liu. betty: let's go straight to the market and trading as we head toward the close. more earnings. >> that's right, i've got a look at the leaders as well as the laggards. bytern digital is trading up 9.6%. it's the biggest gainer on the s&p and this is its biggest jump since july, 2012. one of the things -- reasons is because of its earnings in july. another reason, out in china

western digital says it has made good progress in talks with the ministry of commerce to finally merge with hsg. the deal actually happen in 2012, but beijing hasn't let the -- hadhat could happen let the merge happen. that could happen by the end of the year. now,looking to win right up by 7.5%, the second-biggest gainer on the s&p. is going toays he set a date for the second casino in macau, march 25th of next year. the second quarter earnings were actually pretty horrible. they slumped 44%. wynn resorts gets 70% of its revenue from the cow. corvo is down by nearly 15% -- from macau.

corvo is down by nearly 15%. the reason is because the second quarter revenue, the guidance expectations by an estimated $740 million. another reason, also looking to china. in itss seeing weakness handsets in china as well. and finally, whole foods is down 12.6%. -- 12.3%. the reason is, actual earnings was $.44 a share versus an estimated $.45 per share. another reason is because it's cutting is sales forecast. whole foods is saying it will grow by the low single digits versus the mid-single digits it predicted earlier. whole foods, at least here in new york from what my friends

as wholeit is known paycheck. betty: that is how they are known and i know i'm sure they hate it. thank you so much. mark: the auto insurance industry having its napster merriment -- moment. and others arerm grappling with innovations that could put a huge dent in their revenue. with: that is right, driverless cars, accidents are likely to plunge and car owners will need less coverage and insurance premiums will go down. joining us from seattle to discuss this is bloombergs noah with the big story this week. if there are fewer accidents, supposedly, insurance companies -- you know, why would you need so much insurance? how are insurance companies dealing with this?

an interesting question. a lot of what is going on is insurance companies are studying the problem and trying to do some forecasting. in my story i quoted the ceo of allstate, tom wilson. the worst-case scenario he calls the jetsons. it does not really involved flying cars, but he's talking about a world where accidents, the number pledges significantly and people use some car sharing services, ride sharing services like uber and you really start to see auto premiums go down. what companies are doing right ,ow is studying this phenomenon because it looks like there could be a world in the not-too-distant future where there will be less risk and less need to ensure -- insure. mark: what are insurance companies doing to prepare?

is the question and no one is really talking about it in concrete terms about how the business model will shift from this. it depends on a particular carrier. some of them get credit of revenue from homeowners insurance, for instance. others sell commercial insurance, or interest to businesses. that might present an opportunity. the big point is we are talking about an enormous source of revenue for the insurance company -- industry and companies need to start thinking about what they are going to do if the risk changes. betty: warren, who you and i have talked about a lot about and you have covered extensively , noah, he owns geico. they are one of the biggest auto out there. we have a quote from what he said earlier this year. he said, open if you could come up with anything involved -- "if you could come up with anything --olved in lowering driving

anything involved in driving the cuts accidents by 30% to 50%, that is good news. but we would not be holding a party at our insurance company." noah: his quote is great, because on the one hand, the insurance companies do not want to stall the adoption of this technology. and in some cases they have been behind the adoption of this figure technology in cars. but are they going to be able to last? or will they need to just get smaller?-- get there are some innovative people in the insurance industry who will figure out a way to make money off of this changing technological landscape. i was going to ask, one of

the other opportunities that could be available, selling insurance at this point to carmakers that are developing this technology. noah: yeah, that is a real opportunity. look at what already happened this month. fiat chrysler recalls something like 1.4 million vehicles after there were reports that came out that a system in a jeep had been hacked remotely. be otherthere will kinds of commercial insurance because there will be other risks that come into play at the technologies get rolled out. seattle,ning us from noah, thank you so much. the bloomberg businessweek article, "who needs driverless cars?"

it's a fascinating read. still ahead, the 2016 summer olympians are risking more than just the gold when competing in rio. betty: we will have the details next. ♪

2016 summer olympians have more to worry about than just winning the gold. betty: according to an associated press investigation, athlete in rio de janeiro will be slimming and boating in boating- swimming and in waters with dangerously high levels of bacteria. some training have already fallen ill with fevers, vomiting, and diarrhea. is a very disturbing story. according to the associated press, they did viral testing.

it will continue up until the games in 2016. the testing found not one water venue safe for slimming or boating -- swimming or boating, according to global experts. betty: these athletes are already under a lot of pressure. how will they survive in these waters? mark: look at this graphic. the assessment found infection risk 99% for athletes. legal coliform count is at least 5% of olympic make samples. human adenoviruses can last for years and water. betty: and it's too late to treat them. teaspoon of water, 99% chance of being infected. if it is too late for them to really clean up these waters? -- clean up these waters, what do you do? might you have to live there for a while before the games to get used to this? mark: might you seriously consider boycotting? betty: you've worked years to

get the olympics. how question mark mark: -- how? mark: i worked years to train for the limbic, but i didn't -- for the olympics, but i didn't train in raw sewage. betty: i'm sure the olympic board will be calling us up. mark: this was not meant to embarrass anybody. what else is coming up? betty: global headwinds taking commodities down. stay with us. i will give you were beneath for outlook. 's full outlook. ♪

betty: welcome back to the bloomberg market day. i'm betty liu. let's get straight to the stories making news this hour.

a campus police officer pleaded not guilty today in the connection to a fatal shooting of a black motorist. he is being held on a $1 million bond. nsing, who is white, stopped william to those over a missing ubose over a missing front license plate. he said he feared he would be dragged into the car -- under the car. walker's second in the polls behind donald trump, and jeb bush is third with 10%. however 30% of those surveyed said they would never vote for trumpet and the polls show hillary clinton would be him 48-36. head

a 17th republican candidate is now in the race. former virginia governor jim gilmore. no word on whether he will be in next week's televised debates. his name has only been listed in one national polls so far. and now you can own a piece of one of the most famous moments olympic history. the goaltender who led the u.s. to victory is selling some memorabilia. tag, $5.7 million. he says he wants his children and grandchildren to be financially secure. this are the top stories hour. coming up in the next half hour the russian central bank has placed a ill-timed investments in the gold and euro. a slide in the ruble is only compounding problems for the country. and an online education for the masses all for creek -- for free. we have an exclusive interview.

and tesla has a new plan to create new customers, capitalizing on its current one, and is being met with a have to level of criticism. all that and more coming up in the next half-hour. the commodities route is deepening and is set for the worst month in years. at the commodities index, down 10% for july, down after a 13 week low. texas intermediate is headed for its biggest monthly fall and copper is set for its worst month since january. how much worse can things get? this morning, and why -- nyu professor roubini explained how it's different from other routes we have seen thus far. massive increase in supply coming. that is part of the story, but

there is also a significant fall in demand, for example, coming from the slowdown of china. and there is also the fact that when the fed hikes its rates that weakens the dollar and leads to a higher price of commodities. together andwork now are becoming headwinds. tom: you live on airplanes. you just got back from convict zhakstan.a within that is the idea of technological progress. production is not going to slow down. when does the price clear if we have this overlay of technological progress? my answer is that we don't know.

think it wille only be 2% or 3% a year. some people think it will be 5% to 7%. five years is more than 35%. it means that even if prices are going to be significantly lower, production will not fall. tom: do you agree with gary shilling that we have to go below $20 per barrel? >> i don't think so. in the next two or three years it can be between 55 to 70. there will be less capacity in the future. every oil producer around the world are cutting by 25% of 30%. supply will increase more slowly and demand will accelerate and we will see a bottoming out of will prices that will go slightly higher over time.

brendan: we are talking about spending and technological advance in as just a normal commodity. have we seen the breakdown of pricing in oil? breakdown because there are a significant number of new producers from latin america to north america, and a significant amount from north america. brendan: opec can never get its pricing powerback? they wanted to cut supply and make sure everyone else commits to cutting supply, they could have some power, but not as much. their power has been reduced over time, but there is still a significant amount of power that saudi arabia has. if they decided to cut production, the oil price would not collapse as much as it did. just not only for putting its enemies like iran or russia, but for economic

reasons. overdecided lower prices time means you will get rid of the high-cost producers. it's a rational decision when you are trying to reduce prices, weeding out the high-cost producers. they're still talking about cutting costs even though there is this massive write-down. do we could that changing as the fed begins to hike rates? what does that do? >> china is slowing down and commodity prices are falling him and like any value in currency, commodity prices are slowing down. the response running slow down in growth of inflation is to boost the economy. even though the fed is going to -- is not, they will

hiking rates, they will continue to lower rates like canada. they are doing the right thing, actually. betty: that was nouriel roubini speaking on "bloomberg surveillance" this morning. coming up, copper is poised for its worst month since january. gold teeth dropping. we will look at how the commodities market is closing today. -- gold keeps dropping. we will look at how the commodities market closing today. ♪

betty: welcome back. i'm betty liu. we have breaking news on the ipo front. it's not a tech company. it's soul cycle, just filing for

an initial public offering. the breaking news desk has more. is filing forle initialsaying its registration is going to be $100 million and also set to take for its move. this is how one and rbc capital as well as our room layer. for everyone who does not know what soul cycle is, this is here in new york city as will as d.c., connecticut, massachusetts, new jersey, and a few states as far away as california. aswas founded in 2006 and you can see there, it's all about a full body indoor cycling workout and does command a hefty fan following. it, filing for an ipo. back to you. the founder, the real estate developer here in new york and miami dolphins owner, he is one of the biggest holders

here in soul cycle. i'm looking at the numbers here from the revenue. $34.8 million in the march .uarter for soul cycle it looks like a pretty big business here, getting the full body workout on site. ok, switching complete years here, the bank of russia picked the wrong time to load up on gold and the euro. the country's reserves are down hundred million dollars after it spent about $10 billion on foreign currency since mid-may. -- down about $200 million after it spent about $10 billion on foreign currency since mid-may. terrible timing. speaking of gold, i want to bring in alix steel, our commodities expert. thata made this terrible on the euro and gold. what will they do? at how banksu look manage their reserve fund, they do it with a longer-term outlook

over the next 20 years. we want to diversify our amount with the currencies like gold or the euro. for the longer term, that is unfortunate. but it's not like they will turn it around tomorrow and sell it. they just announced they will for theirg currencies fx reserves. but they will not be selling it. they are not a traitor. -- trader. they are not an investor. but no doubt this comes on the heels of another black eye for russia as it deals with falling oil prices as well. betty: that's right, commodities, or oil prices, we seen this the decline. but in the last two days they have rebounded a bit given the inventory situation. alix: sure, but nothing really changed that much fundamentally. we did see some drawdown, but we did also see the shell ceo say

that they are prepping for a downturn as well. they could come out with $40 per barrel in the winter. inflows this quarter july.out 25,000 less than that is not nothing. if there is some kind of unwinding or if investors flee for the exit, that will tolerate pressure for the downside. that is not fundamental. right, this is all sentiment here. what about gold and silver and other metals? alix: silver is not as bad. fms says gold and silver will grow by 5% this year. overall, we are looking at a potential supply deficit for tons.ear of about 1788

it's a very different picture than the gold picture. the prices is typically move with gold and could move on this cap of fundamental, literally supply and demand. it's a different situation than gold. betty: and sugar? lower than the, day, but higher on the fundamentals. the premium of white sugar , ands raw sugar is higher that tells you there is end-user demand for the juicy stuff. from firstame to us commerzbank. we are looking at the first deficit supply in six years and that could push prices higher. you have a drought in thailand and it's the most -- the second most important sugar exporter. and you have el niño and other things creeping around that could affected as well. betty: and copper? alix: it is looking at it biggest drop since january, but

analysts said it should drop another 24% before companies say i'm closing up shop and cannot afford to do this. that is a lot. betty: that is a lot. thank you so much, alix steel, on commodities. now taking a look at top stories of this hour, average long-term mortgage rates in the u.s. time.d for the second the average rate on a 30 year fixed rate mortgage declined to 3.90% from 4.04% a week earlier. fixed rate mortgages moves from o 3.2%.rcent to 2 -- thr signs that rent hikes have slowed down in new york, l a, and washington. and the lawsuit filed by the nfl

players union over the tom brady case has been moved from minnesota to new york. the union is suing the league to get brady's four-game suspension overturned. they have filed in federal court to make the suspension stand. those are some of the top stories of this hour. millions of online tutorials are offered to students around the world. this week on studio 1.0, emily chang sat down with con academy ulkhan academy founder, salk khan. saul is a huge responsibility. in: managing a kid in a slum in calcutta who gets access to a phone or tablet device. for every einstein we found, think of how many we didn't

find. how many got squandered because they did not need or get an education, etc. imagine we could increase by order of magnitude if factor of 10 the number of albert einstein's in the world, the number of people who could do cancer research, who could think about alternative energy? this could be a force multiplier. emily: do you think it could replace learning in a classroom? videos in some ways can do that because it is more bite-size and on-demand. able to move up the value chain. if they are able to get information at their own time and pace and feedback at their own time and pace, then the physical classroom can be used for real interaction. i'm the last person to force videos on anyone. i will be the first to say they are the least a part -- least

important part of your educational experience. when you need information, it's great to be able to look it up. but the real learning will be when you engage in exercises, and then when you go into a physical classroom, having dialogue and doing projects. getting feedback from your peers . the teacher can be the human in the child's life and sit next to them and really get to know them better. just for thet content gaps are, but what the emotional needs are and what is going on at home will stop -- at home. and when you realize your brain is trainable and you push yourself out of your comfort zone, you can make yourself smarter, so to eat. betty: that was emily chang .peaking with sal khan the full interview is right here on studio 1.0. buffett come, is warren also a feminist icon? why he is secretly funding birth control. ♪

betty: warren buffett has amassed the net worth of $64 million -- $364 million. his latest investment is one you may not have heard of. it is contraceptives. is warren buffett the new feminist icon? karen joins us from seattle. exactly how this is. this is through the susan thompson buffett foundation? karin: exactly. it was a foundation founded by

warren's first wife, susan thompson buffet. they started it when they were a young couple and it has grown a lot in the last decade. when susan passed away, the estate went to the foundation and a lot went to the gates foundation. but a sizable lead to the foundation as well. funder ofhe leading reproductive rights work in the u.s., and in particular have in the past six or so years, trying to build the research and policy framework for supporting broader use of the devices. betty: these are intrauterine devices, right? karen: exactly. betty: what has changed through the use of their money? were very popular decades ago and then there was a

particularly bad device that cause all kinds of problems with infertility, ectopic pregnancies, and terrible things. for almost two decades no one seen as's and they were unsafe and dangerous. they included a lot of medical research and policy research into some large studies to show that iud's are safe and extremely effective, more than 99%. and they have also funded a generic iud that is extremely low cost for health clinics to buy and have on hand and give two women who want it that they instead of asking for them to come back. they found that 40% do not come back if they do not get it inserted on that first visit. betty: they are funding these new versions of this device. how are they growing that market through the foundation? they put $74 million into a nonprofit organization that funded this generic iud through

a huge clinical study that hit -- and that product hit the market in april, this device. policyy have funded interventions in colorado and iowa. they have put $150 million into each of those states to show that if you give women access to their -- thatd there is a decline in teenage birth rates and abortion rates as well. in a study out of st. louis show that women choose this when they have good counseling and it is offered for free. some iud's last for up to a decade. betty: are these being better regulated question mark karen: yes, exactly -- being better regulated? karen: yes, exactly. the fda now has oversight over this and the full medical trials

that you have seen come out of the new england general of medicine and other peer-reviewed journals, this is a whole new era of greater regulation and understanding that these devices can be saved. they are not perfect for everybody, but a broader swath of women can use them now. why is this so important for the foundation? why is birth control an issue for them? is very interesting. war and, as you probably know, does not talk about his support -- war and, as you know -- warren, as you know, he doesn't talk about his support of reproductive rights. issue. is an economic he says if women don't have the right to control their reproductive rights, we are losing half the brain power in the country. the foundation does it all

anonymously. attention.want they never say why, but they also support abortion related work. some of the recipients of their funding have hypothesized that could be why, even though iud's are less controversial than abortion. it is only through tax disclosures or through disclosures of the medical journal that there is this source of funding. betty: thank you so much for that story. warren buffett funding behind one of the big revolutions in birth control. still ahead, teslas elon musk is looking to boost sales with a little help from his friends. ♪

>> who is watching in hong kong at 3:00 a.m. >> i'd in a know, but you are.

you are watching. betty: good morning. alix: overall, you cannot really call a market when the dallas for points on the day. the s&p trading, a little bit above the moving average. all in all, pretty much average flat. gdp, something for the hawks and something for the doves. take a look for a second. at per line is a 200 day moving average. was able to go above it by about 11:30 and then tweaking its way little bit higher. a technical level. it has been -- hard theseas been so last few weeks. really struggling with record levels. alix: