market day. linkedin shares plunge over growths over slowing while facebook surges. sanctions being lifted -- we look at the potential with a hedge fund manager who just returned from tehran. mark: game on for a beijing. the chinese capital chosen as the host of the 2022 winter of choking spite pollution and little natural snow. scarlet: good afternoon. in scarlet fu. i am mark crumpton. thank you for joining us on this last friday in july 2015. action on wall

street. you see the s&p 500 and the nasdaq -- the nasdaq is up about a third of a percent, dow industrials unchanged, but still showing negative today. exxon mobil and chevron, the biggest u.s. energy producers, hunkering down for a prolonged stretch of week prices. they posted their worst quarterly performance in three years. the lowestting profit since 2009. chevron reported its lowest profit in more than 12 years. -- the marketcing route forcing $2.5 billion in write-downs and charges. 1.5%.-- brent crude down gold futures, they are up. beenet: they really have the driver year. looking at treasuries, you see buying there.

it is so much more sensitive to where interest rates are headed than on the longer end of the yield curve. that 10 point 2%. look at the 10-year yield over the past month. coming down -- we do not measure by percentages, but 15 basis points. 2.2%. at looking at currencies, the dollar takes a hit today. look at my bloomberg terminal. the eci, the employment cost the big legut at down, the wage growth the ,lowest on record for the month perhaps persuading people that the federal reserve will not be ready to move in september. wagees not see evidence of growth. maybe it is not the right time just yet. conversation.hat we were speaking to folks.

the concern from some is, our policy makers paying enough attention to inflation? you our top's give stories. hiring is improving, but pay is not. private sector's salaries unchanged. that is the weakest since they yearsd keeping track 35 ago. the latest finding from the university of michigan consumer -- the gaugedex held above 90, a relatively high level. the longest streak in more than a decade. democratic residential candidate hillary clinton calling on congress to end the u.s. trade embargo on cuba. speaking in miami, she endorsed

president obama's push for normalizing relations. clinton: i understand the skepticism toward engagement with cuba. as many of you know, i have been skeptical, too. but you have been promised progress for 50 years and we annot wait any longer for failed policy to bear fruit. we have to seize this moment. center: in a recent pew poll, -- sparked criticism of the bank and its president, as jordan. bank officials claim the swiss franc surging as the euro. the bank is not required to turn a profit, but it does need income to support switzerland's central and local governments. greek financial markets will reopen on monday with limitations on trading. they have been closed for five

weeks. in the meantime, prime minister hisis tsipras acknowledged government had secret contingency plans to leave the euro, but denied he was plotting a alternative currency. here is prime minister tsipras. thef course i ousted finance minister to work on a defense. -- i asked the finance minister to work on a defense. did that mean i was seeking an emergency? mark: for the first time since office, he has returned to athens. the price of oil added for its biggest monthly drop this year. likely to finish down nearly 20% and there is no sign the glut of oil will dry up soon. stockpiles are almost 100

million barrels above the five-year average. scarlet: and a substantial raise for seattle seahawks cornerback russell wilson. he played last year for a base salary of $262 million. 60 -- 260 $2000. now he has signed a contract that would pay $88 million. those are your top stories at this hour. it is friday. you may be getting ready to head out of town and you may have booked her trip on expedia. the company is taking off after profits that topped analyst estimates. travel site plans to look overseas to grow its footprint. bloomberg west anchor emily chang set down with the expedia ceo and she asked him about expansion plans.

>> we are focused on being everywhere. we are excited about our prospects in latin america. we announced our transaction with the number one player in this year.ca earlier it gives us access to leave latin american traveler. we are excited about our prospects in southeast asia. and of course, we see strength everywhere. the u.s. continues to be a source of strength for us. in a: use soldier stake chinese company back in may. why do that when every other company seems to be dying to get into china? >> we saw the opportunity to create significant shareholder value, for one. two, we broadened our exposure to the outbound chinese traveler. we continue to have access to the outbound chinese traveler from elong. we have another partnership. that is one of our primary aims.

we are in las vegas. we are talking about how did we get more chinese travelers to come to vegas. this transaction represents an expansion of those opportunities , and for that reason, we are pretty excited about it. emily: let's talk about the z deal. why are there not regulatory issues given that you are both such big players in this market? we do not have a ton of information to share at this point. we continue to believe this is a transaction that should be approved, should close on the back half of this year. we continue to work closely with the department of justice and respect their process. really it goes down to the facts. this is an absolutely massive industry. travel is a 1.3 trillion dollar industry. expedia did about $50 billion in gross bookings last year, so we

are well under 5%. it is fiercely competitive. it is hard to pick up a paper without hearing about what google, tripadvisor, big hotel marketing companies are doing. it is highly dynamic and competitive and we think this will put both of our travel suppliers as well as consumers in a better spot to benefit from the benefits we bring. mark: that was our colleague emily chang with the cfo of expedia. investors are leaning out of linkedin shares after second-quarter results that disappointed. mark: sales fell faster than in the first quarter. here to break down what happened, bloomberg news editor at large cory johnson. he joins us from san francisco. what are the most worrisome things about those linkedin numbers? numbers are interesting, i think in fusing to investors as the press

release came out. some of the numbers looked good. -- i think confusing to investors as the press release came out. some of the numbers look good. they had 380 million users for the quarter that ended june. that is a pretty big number. the number they were reporting only a year ago of 313 million. the rate of users has been slowing, but continues to slow for this company. had single-digit user growth, but you had some of the slowest user growth you have seen from this company in many years. 4.4% on a year-over-year basis. an anemic level of growth for this company. going to bitere the bullet, to do things they are not comfortable with, but doing them anyway. you would at least expect them to see a greater turn to profitability, getting more,

squeezing the lemon a little bit more to get more out of these users. slowing right, the growth seems to be the biggest concern for the social networks. linkedin made a significant purchase. $1.5 million for linda.com. has significant is that acquisition when it comes to linkedin's growth prospects? you focusedo glad on that. that was the most important thing that came out. call,h the conference linkedin and amended numbers after the call and should be commended for doing so. without getting too deep into the weeds of accounting, the acquisition created a benefit, and operate --t, and ebitda benefit, and operating benefit. as a result, they got this great benefit from the acquisition of

lynda.com. however, they raised guidance by lessening the amount added by the acquisition. in other words, were it not for this acquisition, the guidance for the core business would have been down, suggesting the growth in the core business of linkedin is actually facing more difficulty than even these numbers would suggest because the blended result of old linkedin and new linkedin with things lookke better and maybe show the wisdom of the acquisition. i think that is the reason for the concern around the stock today. mark: speaking of trepidation, tter atk and twi estimates, but they are getting hammered. what does this tell us about social media? cory: i think it tells us more about sentiment than social media. we saw the results we had seen before. if you have done the work on twitter and done your models and

looked at u.s. growth falling less than a single percentage point, you should not have been surprised when it was flat. the company is not doing anything substantially different. the numbers were not substantially different. facebook's numbers, i thought were fantastically strong. tremendous spending for the future. yet, lots of free cash flow for this business. right now where we are in the market, sometimes investors are resultsat this, act they used to cheer, differently. the market, a very different reaction than in the past. scarlet: cory johnson, editor at large from san francisco. energyoming up, the secretary speaking of the white house right now. he is in the briefing room talking about that iran deal. the u.s. poised to profit? the greylock ceo hans humes was there recently.

he will give us his thoughts when the bloomberg market day continues in a moment. ♪

>> wednesday at the senate hearing -- shot from is a live the briefing room. that is the energy secretary, defending the iran deal. the deal between iran and world powers. , hee were heading to break said the administration from mantra that this deal is not based on trust, but verification -- if there are any other headlines that come out of this briefing, we will of course bring them to you and get them on the air as soon as possible. let's go to julie hyman

with a look at the markets. looking at some of the biggest movers in today's session, starting with cruise line world caribbean. caribbean is trading at a record after it reported earnings and raised its forecast full-year earnings per share. current seas brought beneficial effects, something we have not heard much of these days. the shares are up better than a .5%, royal caribbean also citing better business in the caribbean and china. other cruiseelping line operators. norwegian cruise lines are higher. norwegian reports next week. carnival we heard from. both of those stocks up. carnival at a nine-year high. norwegian also at a record today. let's look at the money transfer companies. and money graham

especially having a big day. named a new ceo, alexander homes, and shares rallying on that. western union also raised its full-year earnings forecast. the cfo saying there were good trends in the first half of the year. up -- and they have been recovering. they are executing a turnaround with annual losses, but the current ceo said the company had eight a lot of missteps before he took over in 2011. take a look at my bloomberg terminal at the ebitda. on a quarterly basis.

if you look at the sales, it is also quite dramatic. basically it have to its sales and now.early 2000 similarly with the ebitda. it has gradually been coming back with these ebitda numbers. all right, julie hyman, ank you so much. top stories right now -- zimbabwe once the u.s. to extradite the dentist to killed the african lion. lordsay that he illegally the lion out of its habitat. palmer says he thought his hunt was legal. u.s. authorities are also investigating. the wing from the mission malaysian airlines flight 370 does not make it easier to find the plane itself. it is undergoing tests to see if the doomedto airliner. it vanished in march of last year with 239 people aboard.

winning a victory in court. a federal appeals court has blocked a ruling that would have required its member schools to pay student athletes. the students were due to receive $5,000 a year under the plan which was to take effect tomorrow. they are appealing the ruling. those are your top stories. does not so much in beijing, but that did not stop the city from winning the 2022 olympics. chosen: why beijing was and how much the names could cost, next. ♪

mark: welcome back to the bloomberg market day. i am mark crumpton, here with scarlet fu. beijing has been

selected to host the 2022 winter games. it was voted over its closest competitor posix time. mark: this will be beijing the -- this will make beijing the diversity to host both the summer and winter games. this was a closer both in a lot expected. technical problems, too. >> i think some members just did not go to the vote. they were faced with two unlikely options. widened in apool way, but reduced to having those two choices, a very different thing. looking on paper, you would think all mahdi would be $1.5 beijing, $1.6 billion. scarlet: it does not make sense given how much the cost of the winter olympics typically are.

sochi, last year. david: there are caused overruns and -- cost overruns every year. that is why the boston mayor said not here. he did not want the taxpayers to pay. david: it's interesting. there was a push from a certain quarter of boston to have the games there and then realism snuck in. and then they said, we do not want to do that. scarlet: you talk about how some parts of the business segment were pushing for the olympics. what is the incentive for hosting the olympics when the cost are so high and we discussed the overruns being borne by taxpayers being a real issue? mahdi,you look at all that is a city that would like to be on the world -- you look that is a city that

would like to on the world stage. scarlet: they do not just want to be known for oborat. beid: they would like not to known for that. this is an opportunity to change. but fundamentally, it is but years of on the map, get a lot of eyes on you. he saidone-piece, -- we know it is the same choice. china will deliver on its promises. david: you have a lot of infrastructure in place very of the summer olympics were there. these buildings can be repurposed. compare these two bids. posix son was going to have to kazakhstan was going to have to rely on private business. and you are not at the whim of everyone else going on. let's move ahead to boston. boston dropped out of the 2024 summer games. do we haven't any indication what u.s. city will be in the running? david: los angeles -- it is not official yet.

david: it is not official. the city mayor is really out onng the city coming the world stage. they would like to host them again. scarlet: all right, thanks so much. olympicsa covering the bid. i am signing off. i'm off to enjoy my weekend. what have you got going on? it ron --ill watch the energy secretary defending the iran deal andy brady press briefing room. is the world ready for a rainy and bonds? we talked tonds? one investor who says yes. ♪

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than dsl from the phone company. call 800-501-6000 to switch today. perks are nice. but the best thing you can give your business is comcast business. comcast business. built for business. mark: welcome back to the bloomberg market day. thank you for staying with us. let's look at some of the tops tories --

biggesthe world's energy companies have been rocked by the worldwide oil glut. posted its worst loss with net income falling by half that may force x on to do more cost-cutting. lower energy prices prompted chevron to write down the value of its oil and gas fields. shares of linked in our falling on this friday. that'sorecasting revenue better than estimates but that's because of its acquisition of the education website lynda.com. that is causing concern that their core business is falling and full-year sales will be about $2.9 billion. here is the facebook plan for connecting rural areas to the internet. use balloons to lift drones up to 90,000 feet and have them transmit information using lasers.

has given out details of some of the technical challenges it faces. the drone will have the wingspan of a 737 and weigh about 1/3 as much as a toyota previous. mark zuckerberg explains. >> there are many people who don't within -- live within range of a network and drones and satellites and laser can indication is one way to do it. microwaved medication is another. please will be some of the solutions for providing more cost-effective connectivity to people where there are no existing cell phone towers. or infrastructure mark: getting more people online could help facebook add users. mark zuckerberg told the company's board that the project will lose money for several years. major league baseball is using replay technology this season in an effort to cut down on errant calls. could the technology soon be calling balls and strikes? it did earlier this week in a minor-league game in san rafael, california.

the computerized video system handle the calls which then relayed to the 900 fans in the audience by the announcer. the system is not new. it is used to help tv viewers seaward pitch ends up relative to the strike zone but this marks the first time it was used to empl make actual calls. s. coming up in the next half hour, tourists are hitting the beach this weekend in paris go, the government will try to pay back 58 million. dollars in loans can they find the cash? ipooul cycle goes toward an , we will speak to the ceo of a competitor. puerto rico is facing a big financial test this week. bond payments are coming due and it's a far from clear whether the government can pay for it. laura keller joins me now.

is perrigo going to this money? laura: it doesn't sound like it. you have to look at where the bond price is. they trade between $.10 and $.15 and a market does not believe it will be paid. you a different government officials say they don't have the money to pay but they have not actually said they are not going to. mark: what are the consequences for puerto rico? would this be technically a default they don't pay? understand that the rico, some of the parisian journalists have said -- some of the reagan -- eureka and journalists have said it would not technically be a default. there is usually language what they call an event of default which is a legal definition. in these bonds, they don't have that investor protection. they are really viewed as bonds

that are low hanging fruit and that's why people think puerto rico will default on these rather than others. nok: so if there is technical default, there should be a ripple effect? laura: that will the impact to the larger market. some people expect puerto rico two to date down on the thought that this is the first default. there will probably be some others. earlier this week, we saw default for an influential hedge fund group. they say there's 18 if different issues and put a some of them on the restructuring and some of them will default. betweeny parallels puerto rico and what the city of new york went through in 1975 when it went through its financial crisis and the creation of what they called big mac, the municipal assistance corporation? been calls inas puerto rico to have an entity like that to go through and say

we've got these payments to make. i think there is some similarity but there are different structures as well. mark: some hedge funds are not too happy. they want to get paid. laura: in this specific bond issue, the public eye nantz corporation, we don't expect there are a lot of hedge funds involve their. it's mostly probably individual investors who probably will not organize but the hedge funds will get more as different a false start to happen. mark: you have followed this from the beginning. take us back and tell us how to rico got into the situation the first place. laura: it's a simple matter of over borrowing. economy down there for 10 years has been terrifying. year, when you don't have enough money in the government between what you spend and collect, you have a shortage.

you tend to borrow and hopefully next year have some surplus to repay those borrowings. in the case of puerto rico, they kept borrowing and borrowing. they had nothing in the economy to get to zero. mark: does you to any protections at this point? -- does put a ricoh have any protections at this point? in the bond documents, it says if they don't appropriate money, there is no legal remedy for bondholders. on that and make that their defense. mark: tomorrow is august 1. it's a weekend. what are things going to look like on monday, august 3? they have to have the payment by the end of the day monday. due though the bond is

august 1, to rico has until august 3 to play it. bondholders will start asking their trustees if they received the payment. by the end of the day, if it's not there, you have the default. mark: thank you so much. secretary is speaking at the white house today defending the iranian nuclear deal with world powers. said he isoniz confident the deal will go into effect and says he has not yet heard of a credible alternative to this deal. he cautioned there would be negative consequences if the deal is rejected. stay with us. bonds, is nownian a good time to invest in iran?

welcome back to the bloomberg market day in let's check on the markets. julie hyman joins me now. it's the last trading day of -- did i say february? i have my water here. i will drink my water. seeing a mixedow picture so coming back from where we were earlier in the session but not a lot of action overall. you have to dig deeper. let's take a look at the different sectors on my terminal and seaward things are trading. let's take a look at the sectors. there it is.

we are seeing a mixed picture reflected in this. oil and gas starks are trading lower and financials are taking a hit and utilities and health care are helping balance that out. on the downside, when i mention oil and gas, we are seeing negative results from exxon and chevron. there was a downgrade from murphy oil. that's why we see the oil and gas group down the most. oil prices are also lower today capping off the worst month we have seen this year. we have been talking about the selloff in commodities on a regular basis. the currencyout and bond markets. 2.20% seeing a yield of which is the lowest in three weeks after get wage data this morning, the employment cost index, showing a smaller gain than has been estimated last month in wages overall. the dollar was down the most since june 8 earlier following that data has since recovered to some extent.

now we see it down just half of 1%. mark: thank you. as officials hammered out details of the nuclear deal with iran, investors started making some assessments of their own. a largehat they see -- country with low debt and lots of oil and plenty of room to grow. is the world ready to do business with iran? humes went to tehran to get some answers. what are you hearing? you investors have an appetite for this? >> it seems like it. it's a country with very low levels of debt and is about 11% of gdp which is low, one of the lowest in the world. and iave a lot of oil have a very educated population. they have more people in university than in switzerland

according to education statistics. it's a country that has a lot of promise especially when you look around the developing world with places in turmoil. it seems like when investors can start to get in there, they would have appetite for it. they have promised but a lot of the international committee sees iran is international pariah. what you see when you were there? >> i saw the part of the country that people see as a national pariah but a vast majority of the country is incredibly well educated, eager to reengage with frankly, the part of the country that is the international pariah, the hardliners are the ones pushing the hardest within the country not to have the accord signed. is a well educated population, they speak english well and are eager to reintegrate with the west and eager to do business with the united states.

mark: is this something that seems to get lost in the political back and forth -- maybe between what the government says and does and what the people of iran want? >> that sounds like it. it seems like what you hear in the u.s. and what filters through versus the people there and the fact that they speak english and they would probably have a love for things you are mentioning like franchises and things like that -- sure, it sounds like it. impressive is i went there as a way to kick the tires and i had the opportunity. i went there with my son and travel agent. amazing the level of english ability on the streets and people are self taught in english. they had never been to the

united states but learned in school and watch movies so they spoke english fluently. these were college students. there were no international people there and picked up frisbie. they were either studying to beat her guides or physicists and they were playing a coed that did notuntry allow it but it's doing it willingly and reaching out and welcoming foreigners. mark: what is the bulk of their outstanding debt from? >> they probably have left over bank loans before the sanctions. >> they also have a lot of bilateral debt from other countries in asia. they have commercial debt from banks within iran and they have never defaulted on a commercial bond ever. ofk: do we have any sense what the bond market appetite will be for iran? hashis is a country that been off of the radar screen for a long time. i don't think people appreciate

how accessible it is culturally for the west. they will feel comfortable if they go there. and very under levered sophisticated industries. they will borrow at attractive rates on a first come to the market. these things will be cheap when they first come out. they have a lot of ability to issue and they will issue cheap to attract buyers. they will not default. it will be a very good investment when it comes to the market. idea of thehave any experience that investors have with iranian debt? bonds since the theian revolution in 1970's. their issue for one billion euros and i both matured and they paid them on tom and these two traits they frequently. i spoke with a traitor who treated them in london and he said he traced them every day. -- he trades them every day.

it seems they have experience doing it. mark: what are some of the challenges that iran faces right now as it tries to reengage and reenter the global economy? >> the tensions that have are the competing factions of power running the country. within the reformists are the industrialists who were there before the revolution. there is a jostling for power and the hardliners realized that if they reintegrate, they will start losing power. when they reintegrate, they will have a problem in that the people who manage the financial institutions are incredibly smart. these guys are well educated but they are pretty naive in terms of finance. they will probably have to consolidate the commercial banking sector. they will probably have to work off nonperforming loans and integrate with a payment system internationally will take some work. mark: any timetable when these

things may start happening? >> i don't know if we have any idea. it could be december when they start. >> there's going to be a step. as far as the u.s. sanctions, they will be lifted after the rest of the international community. one would hope you would start seeing changes in six-month but it will take at least three years to transition. >> they can always snap back and that is a risk. rules, have broken the they can snap back in any other --ntries that signed this, if you have a situation or the bonds are already trading, what does that mean? >> i think they have to reintegrate completely before they start issuing. word that the great financial markets will reopen august 3. what is your reaction? if you interpret where the

financial banks are going to trade, they will double they be 30% down from other companies but i don't know. it will be a bit shaky. there is not a lot of clarity how this is working out. mark: thank you both very much for being with us. millionaires and billionaires are donating huge sums to presidential super packs. are they gaining too much influence over the presidential candidate? i think i just answered my own question. we will explore that next. ♪

mark: let's take a look at some of the top stories we are following. mark zuckerberg has announced that he and his wife are expecting their first child, a

baby girl. he says the couple have been trying for a couple of years and have experienced three miscarriages along the way. alreadys that the baby gave him a thumbs up in the ultrasound. three former utility executives in japan are facing criminal nuclear disaster. there were meltdowns and three reactors after an earthquake answer nami in 2011. that cause radiation leaks and forced tens of thousands of people to evacuate. is european commission opening an investigation into the fedex proposed takeover of such company tnt express. that x has agreed to pay four $4 billion. regulators blocked ups from buying tnt two years ago. those are your top stories at this hour. super packs affiliated with provincial candidates are

required to file a financial statement for the first half of the year by midnight tonight. apparently, all the presidential candidate needs is one or two wealthy friends. republican presidential candidate rick perry -- we have learned that 11 of the $13.8 million raised by his super pack has come from just two dallas supporters. is a pipeline executive and an affiliated computer services founder. rick perry is not alone. 36 of the $51 million raised by a super pack affiliated with texas senator ted cruz has come from three families. will these donors have too much influence? me now.u joins i think we just answered our own question. betty: we did indeed. you influence and power? yes. does it by you the election? not necessarily. ask sheldon adelson or ask tom sier or the koch brothers

with the exception oftier, neither sheldon adelson who backed newt gingrich or the koch brothers who had backed mitt romney were able to seal the deal. you can have a lot of money but it does not mean you will win. it does help and it's interesting on the republican side with ted cruz among several are backed by one or two wealthy billionaires. there is quite a few to go around many of whom have not yet said they will support. we don't know yet who sheldon adelson will come out for or who the coat others will support or steve ross in new york or any of the others. to thehis all goes back detractors of money and politics say that this goes back to the supreme court's citizens united case. it just opens the door for unlimited sums of money to be thrown at presidential candidates.

they're probably comes certain expectations. in my heartes but , jeb bushatic soul for instance has raised over $100 million but not one individual has given him more than $3 million. he is not backed by a big wealthy billionaire. hillary clinton as well is also limiting the amount each person gives her. won both barack obama elections with a grassroots campaign. that still works. or you could be the donald trump and not take anybody's money and say whatever you want. hillary clinton was speaking today and talking about cuba and that's coming up in our next hour. we will talk with the

president of the u.s.-cuba trade counsel with us and he is quite critical. he thinks there is a lack of reality when it comes to understanding what it means to lift the embargo on cuba. there is a lot of sweet talk right now but it has to be followed with action and he says there is not a lot of reality around us. mark: i will see you in a few minutes. thank you so much. coming up, p americanharoah returns to the race track for the first time since winning the triple crown and how much of a boost will the horse give the racing industry? that story and more when bloomberg market day continues in a moment. ♪

mark: it is 2 p.m. in the east coast area and hillary clinton speaks out in support of

expanding business ties with cuba. how big of an opportunity could this be for american businesses? matt miller kicks the tires on a new model and gives us his review. is looking tole peddle its shares on the open market. investors how it can sell to a broader market. from bloomberg world headquarters in new york, welcome to "market day." i am here with betty liu. betty: let's get a look at how the markets are trading as we are heading toward the closing bell. the s&p is down once again. it is coming off of those highs. we were in positive territory for a while but we have slip