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 back down into the red as we

head toward the closing bell. the dow is down about 27 points. economic numbers set the tone including slow, abysmal growth in wages in the u.s. you see this reflected in treasury notes. there is some buying here. yield down 2% create we have seen rates go up. is getting a bit of strength intraday. at some point it has been going on the last couple of days, it looks like it has been all over the map. betty: it does. first of all, the dollar influence and that being affected by commodities and the second, it seems like every day we are getting more conflicting headlines out of europe.

mark: very much so. but still it at the other stories we're following. betty: hiring issecond, improvit pay is not. new figures from the labor department. the growth in wages and benefits this spring was the slowest in nearly three decades. salaries were nearly unchanged. that is the weakest showing since the government started tracking it 35 years ago. mark: consumer confidence fell two and eight year -- to an eight year low. that is the longest streak in more than a decade. betty: president obama is warning that apparent -- opponents of the iran nuclear deal are putting the squeeze on congress. he said the politics of supporting the deal will be tough for lawmakers and "i can tell when they start getting squishy." secretary spoke about the importance of the deal at the white house today. >> as long as there are minds, the -- open agreement is very powerful in its constraints on the iranian program and on its enhanced verification measures.

i think as long as we keep at it and keep explaining that and have others like secretary kerry, secretary carter, the president reinforce our regional security commitments more broadly, i think the steel will certainly go into effect. toty: aipac wants congress reject the deal. the roof is sponsoring trips to israel for some members of congress to press its case. isk: the swiss national bank hosting a six-month loss of $52 billion. officials lame the swiss franc's search against the euro. the bank is not required to turn a profit but it does need income to support switzerland's central and local governments. ofty: the prime minister greece responded today to a report saying his former finance minister had a plan for parallel cert -- currency.

he said he was ready if the situation got much worse. >> i issued personal instructions to the finance minister to create a team that would work unemployment -- work on a plan of defense. it would have been lyrically naive and irresponsible not to do so. does that mean that i was seeking an emergency? betty: for the first time since tsipras took office, the so-called troika has returned to greece. representatives are meeting in athens with the cabinet minister. they are negotiating the terms of the $94 billion bailout. host thejing will winter olympics in 2022, the decision announced by the international olympic committee this morning. they held a secret vote and the other finalist was kazakhstan. they used paper ballots after a glitch installed there electronic system.

they will be the first city to host the summer and winter games. it success was china's major sales pitch but critics pointed to china's pollution as a negative. kazakhstan was pressing to be the first central asian nation to host the games. unlike aging, his country could snow,mountains and real their president boasted. the booze will be sent to the international space station to see how time and gravity effects of waiver. the booze will stay there for a year. all in the name of science. --o not care if there is out life outside. i will want to know if my whiskey will stay the same -- taste the same. mark: kerley -- hillary clinton calls on the u.s. congress to

end the trade embargo as opposed -- imposed against cuba since 1962. betty: this comes to decades after her husband signed the embargo into federal statute. u.s.-cubaent of the trade and economic council is our guest. companies would be interested in seeing an open cuban market. you have noted before that there talklot of optimistic right now about normalizing relations between the two but not a lot of reality. what do you mean by that? john: there is worth exuberance and people looking for up virginity -- opportunity. there is not much there at the moment. that is primarily because of decisions of the cuban government has made. president obama has made a lot of initiatives but the cuban

government is -- has been silent with the exception of allowing more visitors into cuba. at present, the u.s. is this community is waiting to see what cuba will do. he -- didobama said what he said he would do which is move the decision football to havana. the white house contends the reality is this is something that has been in effect since 1962 when john f. kennedy was president. has this been successful, has what has been going on for half a century been successful? >> you can find a lot of people to argue components of u.s. policy and u.s. law have been successful and you will find others are against it.

since president obama's announcement in december we had eight months and in those eight months u.s. businesses have not gotten a lot. continuedts to cuba to decline. cuba has gotten a lot. they were taken off the sanctions list. the embassies have been reestablished and the u.s. has bait.ight -- in u.s. wants to come back small areas, the u.s. is back so you better get in. cuba has benefited at the u.s. business community remains optimistic. have mrs.ting to clinton on board. it is somewhat bittersweet and ironic that her husband is responsible for the three primary laws that restrict what u.s. companies can do. mark: is this a generational thing that we're saying, is mrs. linton seizing a moment because the older cubans, given to might

be in their 70's or 80's, they were much younger at the time of the embargo but now we are talking about young people, millenials in their 20's and 30's. they see opportunity where their parents and ran parents did not. john: you are correct. there is a generational disconnection that is taking place because people that had property taken, had relatives that were killed, who went into exile, they have a visceral reaction to fidel castro, raul -- and the current government. where is there children and great ran children in some cases do not have that serial connection. m business -- there is an old bearded guy running the place. we would like to go back and see the beaches, smoke cigars, and m and have a good

time. they are respectful of their parents and grandparents. it has not been a complete disconnection but it is getting there. not exactly is courageous. she did raised two important points, that the business community will want carefully. she wanted to see more people in cuba. that helps u.s. embassies because there are more people to sell to. she talked about joint ventures children in case and. under president obama's initiative, they are oval -- they are able to export equipment. that would be interesting to see. betty: we do not have a lot of did mention hillary clinton. we have a moment in her speech today where she addressed some of the critics. let's play that for you guys. the clinton: i understand skepticism about any policy of engagement toward cuba.

as many of you know, i have been skeptical, too. but you have been promised progress for 50 years and we cannot wait any longer for a failed policy to bear fruit. we have to seize this moment. himselfhe president says the longer we keep the embargo in place, the -- it becomes easy for cuba to use the embargo as a scapegoat for their own lack of progress. john: the president is absolutely right. mrs. clinton made some interesting remarks. it is going to be seen what she does amount to know how she is going to support the certified claimants. we would like to know if she going to push well she is a candidate for changes in u.s. law? slog will be a tough because this congress is not likely to embrace any changes with cuba leading into a

presidential election year. us.y: thank you for joining the president of the u.s.-cuban trade and economic council joining us from buffalo. mark: he is in on the pratt -- politics of this. crownahead, the triple winner has my state of new jersey a buzz. we will tell you why next.

mark: welcome back to the

bloomberg market day. atty: julie hyman has a look the markets as we had to the close. some of the big losers today. julie: we have seen the deterioration in the markets we have this push and pull primarily from earnings reports and individual movers. take a look at linkedin which is declining almost 10% even after the company raised its forecast. analysts are saying a lot of that increase had to do with a company called linda, and education website and excluding that, the rate of growth is slowing and it core hiring solutions is this. business. ishares taking a hit on that. we are looking at the fire ride company. an interesting situation because it has, with numbers that the estimates and raised its forecast. the chief financial officer is leaving and it looks like wall street is saying that as a bad sign. the ceo of the company in an

interview said this is part of the normal maturing of a company. couple became public a of years ago. we are looking at oil stocks today. exxon mobil as well as chevron coming up, conoco phillips following along with them. chevron feeling the pinch of oil prices being lower. this is a company that has returned cash for shareholders. that is one of the things that is weighing on the shares in addition to the general results that were worse than estimated. a little bit of a switch. western digital which is an a expressedsiness confidence we would see recovery. seagate can met with results that -- came out with results that missed estimates.

seagate is either up or down. let's take a look at the top stories we are following this hour. the next generation apple tv will be unveiled in september. buzz field news -- buzz feed news said it will have more storage and a touch and an operating system that will allow voice control. the first danger change in the apple tv box since 2012. 10 jumped out of the starting gate. it is on 14 million computers two days after the release. they are setting a lofty goal. one billion devices running windows 10 in three years. a free update for those who are updating. an aprilthought it was fools' day but it is real and it is here. for four dollars and $.99, users buttons thatdash

allow users to order more with a push of a button. including tied an easy mac -- are and easymac participating. american pharoah is making his first apparent since winning the triple crown at the jersey shore. he is racing in this weekend's haskell imitation in oceanport, new jersey. betty: the track is bracing for a record crowd. in excess of 60,000 with a purse of $1.75 million, the richest rate -- race in the state's history. rumors that bruce springsteen might show up. one of our producers is going to be there. we did not get our invite. mark: it has been lost in the mail. this is good for south jersey

and good for her -- worse raising. american pharoah has rejuvenated horseracing in this country since jimmy carter was president that there was a triple crown winner. everyone wants to see this champion that will go down in history. betty: if you talk to some of the racing experts we have in-house who calls this house a -- horse a freak of nature, partially why he was able to be the one to when the triple crown, it almost doesn't matter. you want him to win but it almost does not matter if he wins or loses. he is the big draw already. he has cemented his place in history so it doesn't matter. they will put the horse out to pasture, out to stud. are going from horses

to driving. horseracing to driving. a bold new design, but will it be a game changer? mark: we have a look at the vol vo xc 90. will have that story next. ♪

bought in 2010. the automaker is introducing a car that promises to give the competition run for money -- the money.

matt: i am here with hannah elliott. people have been dying to get their hands on this car, to get a ride in it. we will be some of the first people who actually do that. here we go. is obviously incredibly important. they have not redesigned it in over a decade. people were forced to go elsewhere if they wanted a new suv. audi, mercedes, bmw have option so why would they go to volvo? this was started the gate. is ins the way that volvo the luxury ethics -- suv segment. at under $50,000.

seems like it has as much luxury. the first thing i notice is the real would paneling. -- wood paneling. now that they are owned by a chinese company they want to hone in on the message that we are still making swedish product in sweden. they put their tags on some of interior the [inaudible] whiche pilot assist drives a car for you including steering and raking and acceleration. long as is a taunus as you're doing under 30 and not

off the highway. the vantage point is very high. if you like you have a great survey of the land. visibility is amazing. the panorama sunroof makes you feel like you are in a spacious interior. the lighting is great. you have almost no blind spots to speak of. that is -- and forfeit guys, you will have money of room, no problem. i did notice some lag in the acceleration. have torque in the lower ranges to i do not think people will care about it. you notice when you go from driving a turbocharged vehicle. matt: it is pretty impressive, luxurious large,

vehicle. it feels luxurious inside, great job so far. mark: what did betty liu say to me? miller is not driving. that is a gorgeous looking automobile. betty: it is in diameter surprised it is under $50,000. that might be my next family car. mark: there you go. have a good weekend. i am out. betty: we will miss you. have a great weekend. much more ahead on the bloomberg market day. ♪

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i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. welcome back to the bloomberg market day. let's get straight to the top stories making news at this hour.

three part utilities executives in japan will face criminal charges in the fukushima nuclear disaster. there were meltdowns and three reactors after an earthquake in 2011. that caused radiation leaks, forcing tens of thousands of people to evacuate. thend for u.s. notes shortest since january. $90 billion in treasury debt was auctioned in the last three days. the surge comes even though an interest rate hike is likely this year. much of wall street expects the fed to raise rates in september. one prominent economist says the amount of the hike is more crucial than the timing. >> not really that much hinges unless you were a bond trader on whether the first rate hike is in september or december. a lot hinges on what rates will do between now and the end of 2016. 200?asis points, 50, that matters a lot.

whether the starting point is september or december is a minor importance. betty: the fed has held its benchmark rate near zero and's december of 2008. -- since december of 2000 and ebs buying coyote logi logistics. -- ups buying coyote logistics. . mark zuckerberg and his wife are expecting a baby girl. he says the couple has been trying for a couple of years and has experienced three miscarriages along the way. he writes that the baby already gave him a thumbs up in the ultrasound. adorable. congratulations. those are your top stories at this hour. as we've been talking about, wall street is on a health kick

with soul cycle filing for an ipo. the chain has taken spending to a whole new level and is setting its sights outside the studio into your homes. serious competition for one smaller startup. john foley is the founder and ceo. he joins us with more great to see appeared john: thank you for having me. betty: what did you think we saw the news? john: i'm excited for the category, for them. they have a special brand. health and wellness is here to stay. we are rooting for soul cycle. the more people to discover this fantastic category, high-energy indoor cycling content is better than trying to motivate herself. -- yourself. we are excited to see them succeed. betty: are you worried?

they want to hit the at home market. john: i saw that, yes. what we do is very hard. hard-core technology company. we built the best bike ever built and the best tablet computer ever built. we compete with apple, in a sense. we have our own tablet. chip toterproof, has a pick up your heart rate. very hard-core hardware and software. we have a full python services in the cloud. we feel like we are more akin to facebook or apple then soul cycle. we sell a high design, high-technology interconnected consumer product like a nest product or apple product. that's what we are selling to the home. soul cycle is a studio experience. we have one studio in new york

city. that doubles as a television streaming studio. that content is streamed around the world. two people in their homes -- we have bikes in 50 states and 22 countries. what is stopping soul cycle from doing the same thing? dna, they are not a software development shop. we started as a software company. that's my background. betty: you must be battle tested. john: we are consumer internet folks. that's our background. betty: you were at barnstable as well. john: where we saw what amazon is doing in the tablet category. -- you were at barnes & noble as well. the name of their game is digital content. similar business model at loton.on -- pe

$39 a month, you and your spouse can take unlimited classes from the convenience of your own home with the best instructors in the world like a salt cycle experience, but at home. betty: don't you have two parts of your business? you sell the hardware and software and build the content and have to build a network of studios. john: we do not build a network of studios. we have the one studio in new york city. that's it. we are building a network of retail stores akin to a tesla. a lot of our high-end retail stores are in high-end malls adjacent to tesla stores. showroom accessing these pockets of wealth -- we do the same thing. we just opened in dallas, opening in san francisco, opening los angeles.

these are retail stores where people can go in and experience the bike, see the class streaming live from our studio in new york city and say this is more motivating than anything else. betty: would you be more open to soul cycle buying you? john: we have considered -- i have some aggressive capital partners. we considered doing the opposite, significant disrupt their ipo -- it was met with not a lot of excitement. i do think in the context of us and soul cycle, one plus one equals three. we would be adjusted in the discussion. -- interested in the discussion. betty: it's a very targeted market, mostly women, more affluent women in urban areas who are fanatic about this. what about the rest of the country?

hamptons, these women you speak of spent $40 per class. in a different market, the price point might not be $40, maybe $25. maybe it is $20. the great thing for their model is the rent in those markets is less. the talent cost will be less. --y could roll out there they could potentially preserve their margins and have a lower price point for people who are less affluent. betty: how do you keep that tribal experience? that is part of the appeal of the brand. john: i don't think that is locked to the $40, it is locked to the great instructors. they have done a great job catching lightning in a bottle with their brand. parker -- their

brand transcends their category. soul cycle is one of those special brands. they will be able to maintain --t same zealots lolling following if it is run well. betty: they are stepping back. what you make of that? john: they were the brand, they did a great job. experience,n has she is very well respected over there. betty: the cfo. john: she was the coo. betty: who will now be the ceo. john: we will have to wait and see. i'm rooting for them. it will be an exciting ipo. whatever they do, they will leave some money on the table because it will be one of those fun ipos for everybody. betty: you better be fit.

you have to go on any roadshow. thank you very much. bargain,, talk about a why this coal mine in australia sold for one dollar. ♪

betty: welcome back to the bloomberg market day. a slump in the price of coking coal has been underscored by the sale of a mine in australia. at $630 million

three years ago. yesterday, it sold for just one dollar. coal's demise is part of a broader slump in commodity prices. with me now is alix steel to talk about -- you've been all over this slump in commodity prices. a mine going for one dollar? aboutthe buyer will spend $32 million in rehabilitation costs. they are putting in the money. they have been trying to do much their cost cutting entering of the assets that doesn't work. that has been part of this story. betty: is it just the fact that prices have slump so much? alix: it's part of an issue with a cold world in general, china. australia exports a lot of cold to china. they are up on the year, 7 million tons. china is using less overall.

imports are down globally by 36% and there are a lot of warnings. net coal is used to make steel and thermal coal is used to make electricity. you have lower pmi for china, power demand growth remaining week and that is not bode well for the thermal coal world. deutsche bank lowering its expectations of china imports this year to about 106 2 million tons. -- 162million tons million tons. making situations like this all the more difficult. betty: minors in general -- we were speaking with lisa abramowicz about the junk debt being sold by these mining companies.

how those yields are going through the roof right now. wreaking havoc in the debt market. alix: city had a good note about the inflection point. investors start to care about the underlying commodity price -- there seems to have been an inflection point and then it's like, what are you going to do. betty: that is crazy. commodities crude oil. john: below $47 a barrel. . horrible month the worst since november of 2008. capping off a bad -- we got that rig count. five oil rigs were added last month. -- there is ases lag of three to five months.

you are seeing oil rigs being added. that is doubling the pressure -- betty says it is a mistake. betty: they know something we don't. alix: we saw that rally just a few weeks ago. that lack time of 3-5 weeks, shale players are saying great, we can turn on the spigot quickly. that does forecast higher production down the road. saudi arabia is starting to deal with a tertiary production. they are finding new ways to get more out of the oil that is in the wells they already have. what you trying to do to increase productivity. they are using carbon dioxide to do that. that will create even more oil. it speaks to the oil in the market. betty: how is all of this affecting the gasoline market? john: lower prices at the pump, overall. gasoline is the best member of the bloomberg commodity index this year.

at lower prices, people like it, they drive more. biggest demand in the u.s. since 2007. price at the pump is 24% less than year ago. betty: i did not know that. he doesn't feel that way. -- it doesn't feel that way. it is lower. alix: maybe this light has happened over the last year, you don't feel it as much over a week. betty: ira member the days of $.99 gas. alix: you date yourself. betty: the strong gasoline demand is why we saw exxon downstream revenue come in double that of last year. is so high, margins are killing it and that is helping a market wheren production units are struggling. betty: saudi oil production? alix: that is the tertiary --

they are like the kingdom, the big producer, 1.5 million barrels a day oversupplied. betty: thank you. i will see you in the next hour. alix steel. the top stories at this hour, the european commission is investigating the proposed takeover of a dutch company by fedex. fedex agreed to pay $4.8 billion -- the deal may lead to higher prices or to regulators blocked ups from buying tnt two years ago. investors to an american express for losing its contract with cosco. express failedn to inform investors of the importance of the relationship. the cobranding deal would account for 8% of american express's revenue last year. inmates could get free college courses thanks to a new pilot program. the education apartment is offering prisoners access to pell grants -- those are typically for low income

students and do not have to be repaid. around that ban because still in trial. -- it is only a trial. shares of expedia surging to a new high. reporting better than estimated second quarter results yesterday. the company is on track to close its acquisition of orbits this year. mark chang sat down with come expedia's cfo for exclusive interview. she asked him about where expedia is closing internationally. >> we are focused on being everywhere come excited about our prospects in latin america. we announced a transaction with the number one player in latin america called -- it gives us access to the latin american traveler. we are excited about our prospects in southeast asia. we think europe continues to be a huge opportunity. we are seeing strength everywhere.

the u.s. continues to be a strong opportunity for us. let's talk about orbits, $1.6 billion deal. what is the timeline for this deal to close? why aren't there regulatory issues surrounding this deal given you are such big players in this market? >> we don't have a ton of information to share at this point. we continue to believe this is a transaction that should be approved, it should close in the back cap of the year. we continue to work closely with the department of justice and respect their process. for us, it goes down to the facts. this is an absolutely massive industry. travel is a $1.3 trillion industry. expedia did $50 billion in gross bookings last year. we are well under 5%. it is hard to pick up the newspaper or trade press without hearing about what google is doing, what trip advisor is doing.

it is highly dynamic and highly competitive. we think this transaction is something that will both of our travel suppliers and consumers in a better spot to benefit from the benefits we bring. betty: that was expedia's cfo speaking with emily chang. when more ahead on the bloomberg market. cadillac facing a serious sales slump. we will explain why that is. ♪

betty: despite the boom in the luxury car market, sales for cadillac drop in the first half of the year. dealers are demanding rebates and keep releases in order to boost sales. refusing,resident saying we have to do what's right for the brand. what exactly is good for the

brand? joining us is david welch. why is he refusing to offer any deal at all? david: he is trying to elevate to prestige of cadillac where it was 20 years ago. he doesn't think you can do that by constantly selling the deal. the step gm used for the last 20 years to move cars off the lot. he wants to make this a true luxury brand where you are paying high prices for a car that he believes is just as good as a bmw or mercedes on the other side from the dealers want to move the metal. you're asking for discounts, to bringr support lease payments down and that is business as usual for the old gm and he doesn't want to go there. betty: the dealers are asking him to.

what exactly is going on with cadillac that they are struggling like this? david: they have a bunch of problems. this is a brand in transition right now. it have some good cars on the lot. , the ctsad motor trend sedan and ats smaller three-car are seen just as good as their german competitors. buyers of bmws and mercedes and audis don't see it that way. some of them are not even looking at catholic because they don't think they make the cars they want. others don't think it is prestigious enough for them to spend their money. when cadillac has to do is keep making cars like this and marketing that and wait until the time when people take notice. they see them as competitive cars with the german brands. betty: i can see dealers saying that is not a strategy here. david: they just don't want to wait. betty: in the meantime, is he offering them anything at all? david: they had cut prices

earlier this year on what car, the cts. the have not done anything since then and he doesn't want to. is a good car -- it is $500 a month. dealers are trying to get them into the ats and they don't want to pay more for the same car they have -- that's where the dealers get frustrated. they cannot sell these people looking to get into a cadillac. betty: how much time does he have to keep his stance like this? david: there are some dealers who believe in this. cadillac sales are down but are not cratering. geared down 1.5% for the first half of the year. the dealers are doing ok. the escalade is selling well.

they are just not getting in on the luxury end. he has the patience of some of the dealers. he has the patience of gm management. --as a whole is going back pulling back on rebates as much as they can. with cadillac, they are trying to hold the line on pricing. they are trying to keep pricing and get more product per car rather than just discount in mass volume. betty: thank you so much. david welch on cadillac. much more ahead on the bloomberg market day, including the energy companies and their earnings this morning. ♪

. . .

betty: it is noon in san francisco, 3:00 p.m. in new york, and 3:00 a.m. in hong kong. alix: this is "bloomberg market day."

betty: and how long do they expect prices to stay the slow with oil? alix: they didn't win again. the olympic winter games. betty: and we take a look at business could post in iran. ♪ betty: good afternoon, i am betty lou here with alix steel. alix: let's go right to the markets right now. you're seeing a little bit of a deterioration in the stocks. the nasdaq is up. betty: we are off the highs. alix: yeah, we are off the highs. this is the last day of july, so you could see some rebounding going on, and that totally caught me off guard in that respect. betty: