estimates. cord cutting is eating into cable. erik: wall street bets on your workout. planet fitness is going public. the company could be worth more than 1.6 billion dollars. olivia: a crackdown on corruption hitting luxury spending. we talked to the executive in charge of some of the best champagne and cognac brands in the world. good morning. i am olivia sterns. erik: i am erik schatzker. breaking news. just released nonmanufacturing index. julie hyman is in the newsroom. julie: disappointing manufacturing data lately. service is doing well, 60.3 was the reading in july.

higher than the 56.2 analysts were anticipating. we see the expansion in july, the strongest pace in a decade. along with the trade balance number showing signs of faster growth here. the jump was 4.3 points, the best reading since august 2015 -- that is not right. it is august 2015. presumably since august 2005, since we are saying a decade. not only was it above the average forecast by economists surveyed, it was better than the highest forecast. all major components of this gauge, including orders and employment, did advance. a strong read on the economy. offsetting the adp report that showed that private employment expanded at a smaller amount than had been anticipated. all of this leading to the big

economic data point of the week, friday's jobs report. olivia: two different signals, hot and cold on the economy ahead of the september fed meeting. erik: let's see where markets stand. an update for stocks, snapping a trend. apple has just turned positive. it's worth pointing out that both the dow and s&p 500 are in positive territory because of the big decline from disney. these is dragging down indices, they would be performing better. not for disney. something we will be talking about. olivia: with porter bibb. a look at the treasury markets. backs are coming up on the of the disappointing adp report julie mentioned. yields on the 10 year up by about six basis points. the key, treasuries and the jobs report. erik: it has been flattening as

of late. everyone is beginning to anticipate a fed rate hike in september. inflation -- olivia: nowhere to be seen. we heard yesterday that the fed should be prepared to move in september. let's look at what is making news this morning. as julie said, companies in the u.s. added 180 5000 workers to payrolls and july. the latest figure from the adp research institute. the reading was revised lower for june from 227,000 to 229,000. report friday, looking for an increase with the jobless rate holding steady at 5.3%> a a lot of people say that is full employment. erik: president obama taking his case for the iran nuclear deal to the american people. he will make a speech at american university in washington. his address follows meetings with jewish leaders.

they are afraid of the deal could threaten israeli security. earlier, sir martin sorrell talked about the future. sir martin: highly educated. >> a bigger middle-class. sir martin: the deal with iran, the basis is what is going to 10.en over the next to 15 years whether the middle class will demand more reform from the regime. that is the bet politicians are making. erik: the white house chose american university for the speech because jfk spoke there for an arms deal with the soviet. see the address on bloomberg at 11:20 eastern time. of openness to roman catholics who have divorced and then remarried. pope francis, what a reformer. places the church has a

for these people. they have not been excommunicated and should not be treated as such. his remarks point to a possible change in the church's stance. currently they are banned from receiving communion. is getting ations $1 billion investment from the private equity firm silver lake. the equipment maker, motorola, says money will be used to step up growth in public safety products. motorola said it would buy back as much as $2 billion of stock in a price not yet determined. we will be speaking with the ceo greg brown here on bloomberg's "market day." deliveringceline second-quarter earnings that topped estimates driven by higher bookings. total bookings, the value of all services purchased through its websites, rose by 11%. priceline sites include booking.com and kayak. it has struck partnerships to fend off competition from google

and expedia. neiman marcus has filed for an initial public offering. the chain filed with a 100 million dollar placeholder, an amount used to calculate registration fees. no word on an underwriter. proceedsans to use the to repay debt. the company posted revenues of $4.8 billion last year. erik: does wear your top headlines. a bunch more coming this hour. earth, nott place on so happy today. disney shares are down big in premarket trading -- excuse me, early trading. 8.6%. part of the reason why, sales fell short of estimates. more importantly, the company's cable networks appear to be floundering. olivia: time warner beat estimates thanks in part to its cable networks and movie studios. shares are trading lower as investors worry about the future of the industry. --will hear from fox and cvs

cbs this afternoon. porter bed is the managing partner at media tech capital partners. let's start with disney. the best-performing stock in the dow is getting clobbered. why? porter: it's because this is a trader's market. the forex hit on revenue is china and europe. theme parks were down because of the currency trade and the economies and does two areas. over therofit, 11% same period last year. erik: you are not losing confidence. porter: not at all. it is a trader's market. if you look at the shorts, hedgies came in yesterday and put huge shorts on disney. olivia: how can you short disney

ahead of the release of "star wars"? porter: it is going to blow everything away -- movies, merchandise, theme parks. can't even said, i estimate how big this is going to be. olivia: what does he do with espn? dan: he -- hiser: he cannot until contracts are over. he will go over the top. he cannot give up the cash flow. mso contracts do not expire at the same time. that creates a problem. if you are allow, going to go over the top, you have to allow them all to expire. porter: if you are a sports nut, you will see that iger will dri bble out espn.

you'll see more and more of it streaming. he's covered his bets. he cannot give up the cable cash flow. the other thing the traders are not paying attention to, the sports right prices have become untenable. have nbc, fox and cbs -- everybody is bidding for sports events. espn is not stepping up. erik: if you look at a major television and entertainment properties out there, it could be disney, it could be fox, cbs, time warner, which company is best-run? on top ofb iger is his game and running the best business in the media industry, bar none. companies you should look for, these are the ones that have the potential.owth jamie murdoch is underestimated as the new ceo of fox. fox is way down for a lot of different reasons. viacom, pe against

which is 26 pe,. he has tremendous space to grow. he did a hell of a job with bskyb, turning it into a monolith. a european dominant television distributor. olivia: what do you want to hear this afternoon? 21st century fox out with results. the first time james murdoch will be leaving the earnings call. revising thell be movies side. watch for the global reach fox has. bigger than anybody else in the media business except disney in this country. i am looking at what jamie is going to do for the next couple of quarters. the last quarter, he has only been officially ceo for a couple weeks. olivia: does he take another run

at time warner? porter: it is possible. the companies would make a strong news business and entertainment company. i do not think he's going to do it. he wants to build fox with selected acquisitions here and abroad. erik: talking about consolidation, is anything going to happen between cbs and viacom? porter: you've got to ask sherry redstone. erik: she wears the pants. porter: she runs the future in both companies. ves,ou listen to les moon they are not going to be brought back together. who is going to run the company? viacom, les isun doing a great job with cbs. cbs is probably a target going forward. erik: for whom? porter: a lot of people could

benefit with content. starting with apple. olivia: interesting. porter: looking at yahoo!. do not discount alibaba. even the jack ma has said he's not focused on the u.s. he's all over entertainment. erik: what about amazon? porter: you bet. you are going to see amazon head-to-head against netflix in the next six months. they're on a roll. i like alibaba. the owner ofnt movie theaters in this company, olivia: porter bibb. porter: always a pleasure. erik: coming up on bloomberg "markets day," pumping up your portfolio. planet fitness pricing an ipo today. is it a good buy? ♪

olivia: good morning and welcome back to bloomberg "markets day." i am olivia sterns. erik: i am erik schatzker. olivia: julie hyman it is here. we've been watching apple in recent days. it appears to be losing its losing streak. julie: stopping its losing streak for the moment. looking at apple versus netflix. an interesting tale of two tech giants, one is more giant than the other. it was down for six straight days. since then, it has rebounded. netflix has been on a winning streak as well.

rebound,spite the downgraded to neutral over bank ,f america-merrill lynch concern about slowing iphone sales and the effect on revenue. as for netflix, it seems to be higher today after some comments from disney ceo bob iger on the conference call last night. mr. iger: we look at netflix as more a friend than foe. they've become an aggressive customer of ours. i also think that products like netflix are attractive because effective wayser for people to watch television. julie: he repeated the comments in an interview this morning. that seems to be helping netflix. this prompted me to look at apple versus netflix year to date. apple up around 2% or 3%.

netflix, the line goes up, up, up more than 150% year to date and trading at a record. different trajectories for the two big companies. they are at different points in their life cycle. i thought it was interesting after apple is on a losing streak and netflix has been -- olivia: unstoppable. one thing we were going to talk to porter bibb about, if time off hbo, could it have evaluation like netflix? erik: let's have a look at top stories. fragment say if a wing found in the western indian ocean turns out to be a missing there areight 370, probably other pieces that floated away rather than sinking. the discovery of the fragment last week on reunion island is leading experts to conclude the missing 777 broke up when it hit

the water almost 17 months ago. crew is pouring into california to help fight the wildfire north of san francisco. the fire destroyed buildings and charred 100 square miles. it forced people to flee homes. almost two dozen fires are still burning elsewhere in the state. it will be months before republican voters start to pick their presidential nominee, but the field of candidates is already being split between the leaders and the also ran's. the first date is tomorrow night in cleveland on fox. the latest survey was used to pick the top 10 of 17 candidates. paul leader donald trump will be front and center. 7 other candidates are getting second-tier status, being relegated to a predebate forum. among them, bobby jindal, rick perry, and former ceo of hewlett-packard carly fiorina.

trump warmed up for the debate with a call to "with all due respect." he slammed the fund-raising tactics of jeb bush. when bush raises 100-some odd million dollars and weights because you are not allowed to talk to the pac, then he puts his best friend in charge. then they never talk. if anybody believes they never talk, it's a joke. erik: this morning on "good morning america," trump said he does not plan to attack rivals at the debate. he said he wants to focus on the issues. those are your top stories. olivia: wall street tapping into the health craze. it is taking over bloomberg --evision soul cycle announced plans to go public. chaintomorrow, gym planet fitness goes public with

a valuation that could top one points explain dollars. $1.6 billion. top planet fitness. soul cycle is not going to price for several weeks. how much of a wrench does this throw? increases the awareness of the health and wellness market and gets people talking about it. erik: how many investors want to own both? to own as much of one when there's a second to choose from? carter: planet fitness looks like a better opportunity to meet. erik: why? carter: bigger market opportunity. a more known brand. it appeals to a wider audience. olivia: more people will pay $10 a month than $40 a class. carter: $10 a month is the base

rate for planet fitness. a thousand stores across the country and growing revenues over 30%. olivia: do you think it is worth $1.6 billion? carter: looks pretty attractive. i think it is going to be well received in the market. olivia: feels like it is a market that consumer facing brands go public in theory -- in very well. what does that tell you about the market? carter: companies that are addressing big market opportunities. the health and wellness craze, you site with fitbit.. 125% with the ipo. amplified snack brands priced over the range. that is another one promoting healthy food. erik: amplify has not started trading, it will soon. carter: you can probably expect

it is going to open pretty well. olivia: neiman marcus is filing for an ipo. we don't know what it is going to value itself at. is this a good market for neiman to go public in? carter: looks like it. private equity backed deals -- planet fitness is private equity backed -- has been doing very well. neiman marcus has a well-known brand. erik: what do you think, to olivia's point, might be ares and canada pension plan investment board to take it public? market is doing quite well. butipo market is down performance has been terrific.

18% average performance one day after pricing for ipos this year. much better than last year. we've got a well performing ipo market. erik: is it not something of a red flag to the investor when i to market say rushes private equity firm brings it to market that quickly? carter: investors take a longer look at private equity backed deals. they know the firm is exiting. olivia: ares is getting out, it makes people scratch their heads. don't go away. much more on bloomberg "markets day." erik and i will be back. ♪

erik: the security and exchange commission meeting to debate the newest rule on executive

compensation. it would force companies to compare ceo pay to median pay of workers. the big question mark is what do you throw into the median? foreign workers, for example. contract employees. olivia: unions are in favor of this ratio. a a lot of people say it is meaningless. tok: they think it is going bring shame upon companies where the ratio is large. is it going to be in silicon valley? the ceos make obscene amounts of money. the engineered as well, too. olivia: that does it for you. see you tomorrow. much more to come on bloomberg "markets day." ♪

olivia: welcome back to the bloomberg "markets day." i am olivia sterns. a look at the markets, u.s. stocks trading higher. sentiment improved after we got

numbers shelling nonmanufacturing growth grew by the most, the fastest pace in a decade. ism number coming in at 60.3. a positive sign out of the u.s. economy after adp, the private report on unemployment came up a little short. breaking news out of the oil market, weekly inventories out. i want to go to julie hyman. julie: a larger than estimated drawdown in the number, 4.4 million barrels with the decline inventories, crude oil inventories last week. that was larger than the 1.4 million barrels estimated. looking at gasoline inventories 0 barrels.,00 not necessarily good news. does that mean gasoline demand is falling? one thing analysts will be looking for. i do not see -- there we go.

distillate numbers, east coast distillates down. its advance,ending taking another leg up after a larger than estimated drawdown. olivia: a leg up to $46.54 a barrel. half where it was a month ago. let's get to the top headlines. american service providers expanded in july at the strongest pace in a decade. the institute for supply management's nonmanufacturing index jumped by 4 points to 60.3. the best reading since august 2005. components include orders and employment events. wendy's posted earnings that fell short of estimates saying adjusted earnings per share were a penny short of expectations.

the company beat on revenue with $489.5 million. shares are up 14% since the start of the year and 27% over the last 12 months. kellogg's is going natural. the company says it will stop using artificial colors and flavors in cereals and snack bars within three years. kellogg's is following an industry trend. breakfast sales -- breakfast cereal shares are slumping as consumers shy away from processed food. the 20 16th olympics are coming to rio de janeiro. expecting record advertising sales to exceed $1 billion with from sponsors

including nike, procter and gamble, catalog and coca-cola. on pace to top of the london games. television ratings should benefit from rio's timezone, one hour ahead of eastern time in the u.s. the national hockey league taking a page from major league a spot when it comes to digital operations. the nhl has signed a six-year agreement with them tech -- with bamtech to operate streaming services and nhl network. nhl commissioner gary thabetman called the agreement transformational. coming up on bloomberg "markets -rated corporate bonds performing badly. is the weakness in the debt market a sign of more to come? china was supposed to be a place , our consumerss still spending? one hour from obama's speech on his iran deal. he will defend it from critics who charge it will lead to an

arms race. shares of motorola solutions up after silver lake invested $1 billion. plans to use the cash to grow public safety products and diversify away from radios and pagers. the company reported second-quarter earnings of $1.4 billion in sales and a plan to buy back to billion dollars in stock. the ceo joins us from the company's headquarters. are youdetails, what going to do with the $1 billion from silver lake? thank you for having me. we have three announcements this morning. a good q2 print, revenue ahead ahead ofations, eps expectations, margin expansion and a record backlog, which speaks well to the momentum of the core business. in addition, we announced our $2ention to tender up to billion of shares, a demonstration of our confidence.

lastly, one billion dollars from silver lake. the silver lake investment is a strategic partnership. we have talked about extending our core business into software and services. and specifically, smart public safety software and services. it is around extension and doubling down in those areas. olivia: part of the news this morning involves the $2 billion .uyback is there a chance that motorola solutions, have you been thinking about going private? mr. brown: i don't think we are about going private. we have bought back $8.7 billion of shares to date. in the last four years, we have contracted our share base 40%. if you take the $8.7 billion share repurchase, plus $1.1 billion of dividend return, one

of the best investments we have is investing in our own company. both organically in r&d and in share repurchase because of the record vision of long-term value we think could be generated. olivia: tell me about your plans to build out the services business. how are you focusing on setting up networks to help the, companies and emergency services? plusrown: we have 12,000 public safety systems around the globe. have hardware maintenance, some have software maintenance. there are some where we manage that effort on behalf of the customer, the state of illinois, the state of south carolina. there are large networks in australia. these networks are mission-critical. they are secure, encrypted, and growing in complexity. they are growing in software and i.t. content. expands, weexity can extend from a hardware provider or infrastructure solutions provider to manage

more of the networks on behalf of our customers. we think that is a significant that weity for us, one will explore accelerating with silver lake. onvia: can you share details what segments of the business are growing and slowing and by how much? theradio business sale -- radio business fell 2%. how confident are you that you are able to replace that with services growth? mr. brown: core business in q2 normalized. constant currency grew 2%. returning to some measured growth. we think over long time, core business grows. we look at software and services as additive to the growth. we do not have a growth problem in the core, it is returning. highlights our north america, which has grown for the third consecutive quarter. q2, normalized for

foreign exchange. it grew 6%. the middle east has been robust double-digit growth as the heightened sense of security and the need for mission-critical public safety communications, secure communications, is as high as ever in the middle east. there is continuing demand in the u.s. things like baltimore, ferguson, new york only serve to emphasize the criticality of secure, reliable public safety communications. more and more countries need secure border control, countrywide systems, encrypted security.there is high demand . olivia: the first thing you said in response to the question was normalized for foreign exchange. how are you coping with multinational companies coping with the stronger dollar? mr. brown: we do certain hedges in different geographies around the globe. we are still investing in the business.

up capex spending in q2 is slightly as we invest in i.t. platforms. this is a great time to invest and be poised as the economy recovers in the u.s. europe is a that tempered. asia represent a growth opportunity. we stay focused, we execute and we invest surgically so we capitalize on the opportunities in front of us. brown, thank you. ceo of motorola solutions. congratulations on the beat this morning and the new investment with silver lake. the corporate bond market showing signs of weakness. leave tell usa about the state of the u.s. economy? lisa abramowicz will join us next to explain. ♪

olivia: welcome back to the bloomberg "markets day." 1 hour into the trading session. time to get you caught up around the world. let's start in london. rebound, seeing a stocks gaining for a six day out of seven. the stoxx 600 leading the gains. basic materials and oil and gas companies. miners doing particularly well. see what is happening with national equity benchmarks, for the most part they are gaining. ftse in italy the best performer out of western european markets. one outlier is the athens stock exchange, dropping for its third day of trading since the five-week hiatus. banks are leaving the losses. pireas thanked down almost 30%.

a gauge of great banks has dropped to a record. that's how the equity markets are doing. rallying pound, against the dollar. it has been strengthening against most other major currencies. this comes ahead of super thursday tomorrow. this is wendy the bank of england is going to release a slew of data in one go, more bank.ny other central it is going to include the rate decision, inflation report. it's also going to be the minutes from the meeting happening today. sterling strengthening as traders have been getting more bullish on the timing of a rate increase from the bank of england. as recently as july 10, they were banking on august 2016, that has come forward to may. olivia: erik: -- olivia: thanks. we had the ism report just about 45 minutes ago.

that feeds into the rate expectations in the u.s. seems as though the odds are increasing for rate increases in september. you see the three major averages higher, particularly the nasdaq. look at the sectors in my bloomberg terminal. a broad-based rally. all groups are higher except consumer discretionary. is leading the game, as our materials and energy. we will get to commodities in a moment. the best performer in the s&p tech index is first solar. a renewable tech company. the biggest u.s. solar manufacturer. the company recovering from a loss last order. sales up 65% because of a newly formed joint venture with sun power, a so-called yield co.

that holds energy generating assets of the companies. freeport mcmoran leaving gains on the materials front. deferring oil and gas investments. doing a big structural review given the collapse in commodity prices. oil remaining higher after the inventories report a little while ago. olivia: above $46. consumer discretionary is in the red, the reason is disney. julie: looks that way. olivia: here are some top stories at this hour. the nfl players association has receipt released -- has released brady'sript of tom testimony in the controversy known as deflategate. brady denies knowing or telling anyone to tamper with footballs in the afc championship game. the testimony occurred before roger goodell. last week, goodell upheld the

suspension. a federal judge has ordered brady ended out -- and goodell to appear before him. staying with sports, floyd mayweather jr. has announced his next and final bout will be ininst andre berto september. expect to be nearly as lucrative as the fight with manny pacquiao. the last in a 6 bout deal the boxer has with showtime. said he will retire when the deal is finished. a year-long trip to mars without leaving hawaii. to make aists tapped simulated flight. they will live in an isolated habitat on hawaii's big island to learn how to repair a flight

crew for the three year round trip to mars. the mission begins on august 28. doesn't your top stories. that sounds mildly claustrophobic. the corporate bond market losing steam after observing trillions offerings.of debt historically one of the most popular corners of the debt market. these days, not so much. bloomberg's bonds reporter lisa abramowicz joins us. why has investment grade debt been doing so poorly # lisa: last month in july, companies sold $135 billion of corporate debt. this is a sleepy time, it is summer. last year there was less than half of this in july. investors have pretty much seemed insatiable, this is debt lisa abramowicz -- is debt that pays more than

government debt. the government is still stimulating the economy through its easy money policies. why are people moving away now? it is not just that the fed is thinking of hiking rates. people are concerned about lower commodity prices. there are oil and coal and other companies that are affected by the plunge in commodities. people are concerned about that. people are showing there are limits to how much they will buy. acquisitionsrs and we have seen, a lot of them have been funded through the debt markets. companies are saying we want to buy that company. charter wants to buy time warner, they are going to go to the debt market. olivia: after several years of raising debt, you wonder why companies continue to do it. give us some scale of the selloff? lisa: your today is the worst

when we saw the taper tantrum and everybody freaking would stope fed buying bonds on a monthly basis, which they did. it ended up having the opposite effect. people are getting more concerned. if you look at the amount of extra yield they are demanding over benchmarkt government rates, it is about the most in 2 years. which is significant. it is especially significant if the government bond yields rise as well. unless these spreads come in, these companies could end up having to pay more. olivia: what does this mean for investors or for the broader economy? lisa: two sides, whoever out there is buying corporate bonds because they want extra yield -- people think of this debt. as safe people think of this as a

reliable source of income. if you see yields rise and you see the extra yields rise as well, what could end up happening is the price of this debt goes down. sell holdingst to of mutual funds or other funds not investigating freshmen grade -- investigate investment grade debt will get money back. it might be a money-losing proposition. the cheap borrowing costs and record amounts of debt issuance supported the economy and have given a lot of fuel to the growth. the m&a boom and all the activity we've been seeing. if rates start to rise -- olivia: and share buybacks. lisa: all the stuff keeping the stock market up. if that stops, what then? does that add to a weakening of the economy? does that slow down growth? does it mean the fed is going to keep rates lower for longer. olivia: something to watch.

lisa abramowicz, check out her story on bloomberg.com about the souring of sentiment on u.s. corporate debt. still ahead on bloomberg "markets day," how the slowdown in china is taking a bite out of global luxury liquor sales. ♪

olivia: welcome back to the bloomberg "markets day," i am olivia sterns. hota is supposed to be the market for luxury goods like champagne and fashion. the stock market plunge and government crackdown on corruption are challenging companies that depend on consumer spending my next guest is the vice president of spirits lvmh.nnessy, owned by

what are you seeing on the ground in china? are you seeing conspicuous construction -- conspicuous consumption fall out of fashion? rodney: last year, china was down versus the prior year. things seem to have begun to right himself. nicene, china posted growth against a low comp of 43%. 11%ives 6 months of growth. we are seeing a negative price mix with consumers trading down. olivia: how is the market for high end booze? rodney: people like to drink in good times and bad times. the question is what will they drink? the brown spirits category is

enjoying a resurgence in asia and the u.s. that is really supporting the higher tiers. pimm: can you give us some statistics, what is the biggest seller? cognac, we remain the leader in china. we're neck and neck with martel in terms of the two .leading businesses pimm: any plans to introduce lower priced products? lvmh is looking to get into the catering business. rodney: the opportunity is to go after millenials. hennessycertainly moet has done that. youia: what are the brands

feel are most targeted to millenials? rodney: right now in the u.s., millenials are skipping the entry stages and going after some of the higher tier -- olivia: going straight to the top. ney: this year, hennessy is turning 250 years old. we have a blend that has been a hit with millenials. olivia: i believe that. half of the younger producers said i have had hennessy. pimm and i had no idea. rodney: you are hiring well. olivia: pimm fox will be with us for the next hour of the bloomberg "markets day." more to come, including live coverage of president obama's speech defending the iran deal. ♪

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olivia: good morning. it is 11 a.m. in new york city and 7:30 p.m. in tehran. pimm: welcome to the bloomberg

market day. we are standing by to hear from president obama. -- can heestion convince on the lawmakers not to block it? olivia: good morning and welcome back to the bloomberg market day. pimm: let's check markets -- we are 90 minutes into the trading day here in new york. let's look at how stocks are faring right now. the dow jones industrial average adds .5%. today,moving higher perhaps in anticipation of friday's job report. olivia: also on the back of that much