alix: u.s. stocks closing higher today after three days of losses. joe: the question is, what did formiss? a small day stunts. should we worry? our expert thinks otherwise. apple wobbles, we have two charts the company should fear. joe: times maybe tough for oil, but we talked to and asked -- and activist investor thinks that money can still be made. alix: you could call this up number wednesday. volume is flat, but all up 22% extra volume. i would not have expected that looking at a flat market. joe: i would not have expected that either. other big story, market implied in septembere hike

over 50%. big surge in the last two days. we got good economic data. we had comments from the atlanta fed president signaling september. this feels like it's on. alix: two days ago that chart was down to 38%, now it's up to 52%. that goodoning economic data, diving into the terminal, i wanted to mention the isn service report. on the chart it is the white line. this is a tenure chart. of the review can see the line has hit a 10 year high. the service industry in the u.s. is on fire. interesting to me when you manufacturingsm . thanks to the strong dollar we have exporters, manufacturers have been weakening, sliding. currencies are on a tear. alix: 70% of the economy as is?

shouldrvices theoretically be more important. alix: i want to take a deep live into my terminal to take a look at strong spanish data. you are looking at the service industry as well for spain, jumping to 59.7 in june. right round here, close to a six-year high. we did not even have to go back that far. pretty exciting. new orders and job creation, the fastest pace in eight years. these were two very positive signals. home sales this morning, housing transactions in spain are red hot. you know they have that election coming up. alix: does austerity actually work? is puts those parties on the sideline with the site -- spotlight more. prosperity people like to

point to this. alix: true. in a recent report it was said "narrow u.s. stock gains are hardly a signal that something prices ared share due to decline more broadly. thanks for joining us. >> i said that people presume that they are due to decline. alix: the data is not showing that they are due to decline. shark -- this chart shows it below the moving average. what does it tell you? to extreme get highs, the market tends to be hitting it slows. essentially too many stocks are way down already. lows.s essentially too many stocks are way down already. you can see a spike there. it just tells you that we are not in an environment -- and everyone keeps talking about the narrowness of the market, that

has actually been true for three or four years. you have had a lot of rotation in there. if you can go back in time, late 90's, mid-2000's it is housing related. today you would say that health care is one of the leading chargers. there has even been a little wrote -- a little bit of rotation towards financials. market is 2% off the all-time highs, yet if i look at the s&p 500 the constituents, probably 80% of them are higher, how is that possible? where is the market versus three weeks ago? toairing those constituents where they were a week ago, five weeks ago, 50 weeks ago. one of the charts i look , 52 week highs, standing around 101. what does this chart wind up telling you? tobias: when we look at it in

the past we had not seen much addictive power. that's the most important element to us. i am not interested in -- in observations of the markets. i am interested in observations of future trends. i have even heard many people say -- five out of five, this outcome occurred. statistically, thoroughly insignificant. anecdotally interesting, but over 50 or 60 periods is when you get probabilities of outcomes. joe: what data does have good predictor power? tobias: some of these things are more propriety -- more proprietary to our work. it's not about whether evil are excited or depressed. it is about the nine different factors combined with a single factor. joe: literally? tobias: i can tell you what is

in there. it won't necessarily help able. people don't know what is in the set -- the special sauce. we look at money market close. we look at survey work. investors intelligence. the american association of individual investors. put call ratios. how deep in your pocket are you willing to dig to actually buy that protection? we build all of this down together. 12 months from now, the norm or the average is 74% of the time the markets are higher. anytime someone comes in and says that based on our analysis there is a three quarters chance or a 75% probability that this will pay out? that's like a random shot, throwing at heart and hoping for the best. alix: interesting. in the commodities world, is it a supply driven issue or demand driven issue?

commodities in general are about supply. demand grows incrementally. supply cannot. if you have the of scale -- let's build a new mine. you might bring on 10% new capacity with only 3% in the first year. to that point, looking at global over the last 20 to 30 over -- global cap x the last 20 to 30 years. tobias: people call it the super cycle to support on the other signed the -- the other side the growth in the demand of markets. nothing wrong with that. the problem is that emerging market demand is not growing as quickly as people would have hoped. something that they have been , threeing for two years years. not a big shock to everybody. partially you get what i call the cascading effect.

mining relating -- mining related emerging economies. they are now suffering from the declines of the commodities price. there is that secondary practice outside china. the factorends to be that drives commodity prices. it has been for a while. have historically been tied to u.s. industrial activity. that has broken down over the past 10 years. it is much more tied to chinese industrial activity. that is one of the big differences today. it is still growing, but there are large numbers and the bigger that they get the harder it is to generate 15%, 20% growth. we ask aestion that lot of people, what keeps you up at night? tobias: last night it was a particular sandwich that i ate, but we won't get into that. [laughter] in terms of things that i worry about the most, credit has been a historic driver for funding

costs in business. if you look back at 2007, 2008, what you really saw was the subprime credit problems leaking into -- leaching into capital jumps for everybody. the costinvestment is of capital. cost of capital goes up, they invest less than before. joe: thank you for coming by. are justbit earnings out. we want to get to julie with more. julie: blowing away estimates, coming in with $.21 per share, eight cents is what analyst had been anticipating. this is the first report from fit it -- fit bit as a public company. revenue also coming in ahead of estimates at $400 million. $319 million is what was estimated. james park said in a statement that this is the highest quarterly revenue in the eight-year history of fit bit.

that there were new features and services introduced and expanded brand awareness. probably not hurt by the company's ipo. the stock has more than doubled since that ipo. i also want to talk about the outlook, which is quite notable here. the company is protecting billion to $1.7 billion. analysts were looking for $1.4 billion. fit bit is outperforming here. member, when they had their ipo they reported an eye-popping market share of 85% of the fitness tracking market. we will see if that number goes up even more. much, alix:ou very julie hyman on the breaking news desk. thankoming up, -- joe: you very much, julie hyman on the breaking news desk. alix: coming up, more on china after the break. ♪

alix: i'm alix steel. joe: what'd you miss? " alix: what is asia's worst performing currency? .oe: the malaysian ringgit alix: this is surprising to me. joe: i want to add a personal note. i visited malaysia, i lived there for a year. if you are thinking about taking a trip, it's phenomenal. with the currency this low, it's a no-brainer. before investors have been selling stocks, clearly foreigners are dicey. joe: but people should not necessarily take travel cues from what foreign investors are doing. alix: [laughter]

true. the biggest the klein in four years. cbs and 21st entry fox, how are they faring in their earnings? julie: i don't know how many people are going to malaysia, but an awful lot of people watch tv and consume media. pfeiffer century fox, people were waiting for news on their stock i back. the company setting the buyback authorization at $5 billion with earnings beating estimates, revenue missing estimates for 21st century fox. also the stock, i should mention, cells at 27%. shares are higher in the after-hours session. fell during the regular session, closer to about 5%. here we are seeing the company eating in terms of what analyst had anticipated for earnings. i thought the commentary in the statement was quite interesting and ironic. sumner redstone said that cbs

was at the center of the action during and it greenly exciting time in media. was not exciting today, was it? in terms of the stock performance. the fall schedule is creating a lot of does and the company achieved solid pricing increases and the highest rates in the advertising up once. -- up fronts. someone who has gotten a lot of media attention is herbal life. that company has been targeted by bill ackman, who targeted a pyramid scheme about estimates and raising a forecast for the full year as well. those shares are up in the after-hours by 6%. alix: good stuff. thank you so much, julie hyman. joe: what'd you miss? .pple, perhaps looking at the terminal here, we have been talking about this a lot. this line is clearly sliced many

the. what is interesting to me is something that happened yesterday. you can see a break in the line yesterday. there was a burst of trading activity yesterday after it sliced through the moving average. volume yesterday in the shift into stock was higher than it was. clearly, that level has flatness. had a downgrade that was brutal on the stock, taking it from a neutral to a by in the short term with just one of the biggest factors really being about china. china makes up 25% of their iphone sales and they really inc. that they are topping out we have a chart showing how many iphones are being sold in china. down to 12%. they are basically losing market share to other players. bank of america saying that this

only grows if there are new -- new users. china has been one of the huge bull stories for the stock and they say that even in that market they have not been making improvements. i find it funny that these downgrades always come after the stock is diving. alix: always. always. joe: i'm not going to say anything, but i'm just saying. alix: the longer term implications is that it will impact apple revenue. they see revenue growth decelerating a lot in 2016 to 4% as opposed to 28% in 2015. take a look at this. iphone revenue bouncing around 0%, flirting with negative territory in 26 in. they are basically saying that the up great cycle is over. that chart looks -- upgrade cycle looks scary -- upgrade cycle is over. that looks like a scary chart. are forever?

or are they an industry in's -- in crisis? when we come back. alix: diamonds are forever, did you just say that? joe: that is what i said. ♪

alix: i'm alix steel. joe: i'm joe weisenthal. "what'd you miss?? " according to diamond exports in the rapaport group, prices are falling sharply as market sentiment slumps to a level not seen since 2008. the big reason is sluggish demand from china. it always comes back to china. gems, we are putting the spotlight on an investor who

knows how to dig up a deep value. david, partg us is of liver -- livermore partners. thank you for joining us, david. david: thank you for having me. alix: looking at the world of energy, what is your criteria? of things.s a number anytime we look for a company, it's really easy to say that companies are cheap, right? one will swing things based metrics. we will look at metrics and then we will try to look deeper. find situations in which we see the metrics make sense and then we try to find the reason behind that. for example, we own a company called bolt. it looksreen it, cheap. let's say that you invest in it. what is the plan? what is the goal? will you wait for the market? or is there a way to proactively push that forward? joe: you mention that you have

this company, volt, you are into power petroleum -- what are you specifically saying? be on to the cheapness, what is it about these companies that you like? -- beyond the cheapness, what is it about these companies that we sawe? david: companies that had $1 billion in revenue, yet the company's equity was flatlining for a long time to come. the more that we looked, the more that we saw that the company was being wasteful with its capital. they were not returning capital to shareholders. at the same time, it seemed like the operating earnings of the company should be much higher. in that particular circumstance with a hedge fund we took a large position in the company. it with the board. we were getting a lot of pushback that company. we had an entrenched board,

entrenched management team. people who don't like to be told what to do. essentially. unfortunately in this case we sent three letters to the board and got some attention there. and then livermore, along with , began andge fund activist process where we looked to replace the board. we actually did that. themonths ago we replace board. we had a brand-new board in place. we have a new cfo and ceo now. thesis andt of our why we thought there was tremendous value here. at this point we think that the company is well positioned. operating margins can get to a normalized level. with that cash flow it should increase mightily. that with the companies you are active in, what part of that thesis is the m&a takeout target? david: we don't buy companies

thinking -- this can get off, let's buy it, but you always have to have an exit plan. you always have to have a plan in place and say -- what is my exit? staying here for 10 years? there is nothing wrong with owning a company for a long time, seeing it generate cash and have equity price appreciation. realistically if you are looking at more of a five to seven year horizon, you want to have a view of how we are going to exit this investment. in this particular case i would say that there is tremendous opportunity from the numbers at large. they are definitely looking at the u.s. footprint. at the same time someone paying avolt normalized multiple will be seen under better operating conditions with a much higher

valuation. we own about 3% of the company today. we continue -- continue to add to it when possible. alix: thank you. david, fascinating. you are the founding and a managing director of livermore partners. joe: let's go back to julie hyman. more on fit bit. julie: the numbers looked pretty good, we have had a reversal, though. it seems as though there was a fly in the point, the gross margin at the company. 47% as opposed to an estimate of 48%. like disney, for example, which has done so well, fit bit with its 180% gain since it's launch, if there is itching in the earnings armor, people are going to find it and right now they are selling off the stock as a result. alix: brutal. thank you so much, julie hyman. joe: we will be right back. ♪

alix: i'm alix steel. joe: i'm joe weisenthal. "what'd you miss?" alix: let's get to julie wiesenthal -- julie hyman at the news dekes -- news desk. julie: delivered in the second quarter, tesla has its most important number. the model x suv remains on track for third quarter start and they expect to produce over 12,000 vehicles in the third quarter, meaning that they are going to have to have a block luster fourth order to reach of 55,000. it really puts the pressure on the company. in the meantime, shares coming in at $.19. again, the number was really just the deliveries number. it is a little bit smaller than it had been asked me to, guys.

back to you. again,hank you so much julie. putting the onus on the back half of the year. joe: that is all for "what'd you miss?"

emily: tesla just out with a quarterly earnings report. what is the company hoping to do to wrap up by the end of the year? ♪ i'm emily chang. this is "bloomberg west." it's a justing like fit. not allwngrades, but investors are listening as apple shares break a front -- five-day losing streak. china