rate hold steady. we will hear from a chief economist. matt: thousands of computer hackers are gathered in las vegas for the annual devcon conference. mark: we're looking at how technology has changed hip-hop over the last 30 years. good day, from bloomberg world headquarters in new york i am here with matt miller . matt: take a look at the indexes, down across the board. even though we got a job number that should have pleased the

market because it seems to push most economists in favor of a rate hike in september. by right now we have the s&p 500 down of almost 1%. the nasdaq is off 9/10 of a percent at 5000 11. take a look at treasuries. some buying here pushing yields down. about four basis points on the 10-year note. that jobs number came in a little shy of the estimate in but if you look at all of the component pieces of the job report, it actually looks fairly strong. you have growth in wages, a strong number of hours i more americans working, earning more money. mark: we will get some context in a moment. list to get a look at the top

stories we are following this hour. value are capital management now has a $1 billion stake in american express and the activist fund is said to be considering shareholder and lead changes at the nation's biggest credit card insurer. people familiar with the deal say the stake is less than 5% of amex right they've a market value of about $74 billion. matt: carl icahn is revealing and 8.2% stake in cheniere energy. they had a big pop today and are still trading at 5.5%. matt: american airlines may be the latest victim of hackers. they are investigating whether hackers breached their computers and meanwhile, saver, which processes reservations for hundreds of airlines and

thousands of hotels say their system was hacked. the spirit be the same group that stole danny from the u.s. intelligence agencies. matt: bank of america is looking to sell $1.2 billion of delinquent home loans. they are selling five pools of nonperforming debt. those that have been modified and resumed payment, and some that have not defaulted yet. things have offered about $18 billion of defaulted homelands so far this year. matt:? toshiba is getting booted from a stock index that showcases japan's best companies. his removal from the index follows a $1.2 billion accounting scandal were managers were found to have overstated rothman the index seeks to showcase japan's best companies and shapes exploited firms into boosting profit and shareholder returns. matt: the first presidential

debate shows that the republican party is a house divided they scrimmage last night for a television audience on fox. >> is there anyone on stage who is unwilling tonight to pledge your support to the eventual nominee of the republican party and life to not ron and independent campaign? raise your hands now if you will not make the pledge tonight. mr. trump. matt: only one person refused his pledge. the rest agreed. this is the first of 12 presidential debates planned by the republican national committee. cnn will air the next battle to be a helld at the reagan national

library. 7.5 million people engaged on facebook about this compared to the 6.5 that engaged during the state of the union address. coming up with the next half-hour, president obama is facing increasing had one getting deal with iran approved. key democratic senator chuck schumer says he will oppose the agreement. mark: hundreds of wall street employees will take to the street of manhattan tonight in the name of helping kids and what is the called midnight madness. matt: apple's watch is taking a bite out of the traditional watch market, sending normal watch sales down 11 percent for every year -- year-over-year. mark: as we have been telling you, the u.s. jobs market holding steady, keep the fed on track to raise interest rates. matt: tony is now is someone calling for a september left

off, although he says it may be a close call. the chief economist at j.p. morgan i know that the eci number through some people and causes the doubt earlier this week, last week. but in today's numbers, did they not visit to you? >> they were decent. the average work week suggests that the growth in the third quarter is building upon that rebound we saw. the momentum remains solid. i think this is consistent with a september lift off which is our goal. matt: we had 2.1% year-over-year growth in average hourly earnings. people are earning more money. >> it is not accelerating it is remaining pretty slow, but we do think that september is still the best case. it is not a slamdunk yet. if we get some disappointments in the next round of data that

could make september more of a close call. having report like this in august means is we feel pretty confident. mark: what will they be keeping their eye on? >> we will have the next jobs report a month from now. i think it will also be nice if we see financial conditions remain consistent with growth. in other words, would not like to see the dollar really accelerate from here into the september meeting. matt: we are looking at the turn of the dollar. it has been a strong currency of 20% since september. does that janet yellen say that they do not pay attention, or they do not bases kinds of decisions on currency fluctuations? >> they are not trying to

manipulate the currency, but it is an influence on the way we all look the rise in the currency certainly does will have one factor, and i think we are on track for september. i just do not think that we can go homes weekend and said that is the -- >> the fed maintains the view that planning energy prices is done for the u.s. economy, even after we saw that we saw the capitals ending this year. it will impress consumer price inflation. a lot of economists argued that it is better having cheaper gas

prices, even though you have to deal with a loss of jobs in energy and investment. >> it is a net positive for the u.s. economy. we look at the latest data with the revisions we have had, it was like consumer spending is actually up over 3%. i think that is were you would expect to see most of the support for the economy. i think this is -- the big question is why is this telling us something ominous about the global economy. mark: you and matt talked about this is beginning of the interview, that one disappointment in the did -- in the report was the worker pay. worker's wages are stagnant. we are talking about people who may be trying to go at least gain entrance to the middle class, but they are docked in this non-virtuous cycle. >> that is what we saw this

morning, that is what we saw last friday. these are increases, but we're not seeing acceleration. mark: what is it going to take? >> we just need to have these kind of job is continue. his will take time. matt: you do not think it is a structural issue? >> i think there are structural issues and cyclical issues printing we're getting close enough to full employment that we really should see that change in the next six to 12 months. one thing to keep in mind, you said this was a not -- not a precondition for growth. but it would give her more confidence. i do not see this as a hurdle for september. it would have given us more confidence if we saw strong wage growth. mark: good to see you. thank you. matt: we will take a quick

break. stay with us. ♪

mark: welcome back to the bloomberg market day. matt: american express valued -- and we will take a look at what is going on. >> let's get straight to those. i wish i could tell you we are going to see some green going up

on the screen. but with a couple of hours to go until the market close. it is not going to happen. the s&p 500 is down 6/10 of a percent. nasdaq is down biggest loser. the dow was down for the seventh straight day. it is the longest losing streak since august of 2011. mastec and are down for two days running. one interesting thing is in my bloomberg terminal. i want to show you the 200 day moving average the reason i talk to you about this is because we are so close to the 200. we are a 2071 and we are at 2070, one point away. last two times it had the stock rise -- it had the index price, we have seen a bounce act for the s&p. it will be interesting to see if and when this happens we are keeping an eye on this over the next few hours to let me go into

a couple individual stocks for you to one of the nation your energy, a gas producer. they are up by 5.23%. this is because carl icahn earlier today revealed he has an 8.18% activist staake in the company. he may seek board seems as well -- seats as well. he thinks this could be the first last gasp reducer and exporter coming on shale -- first mass gas exporter coming out of shale. ubs has raise them from neutral to buy, and the target price is $42, coming off of a 30 or dollar initial -- 34 initial dollar rating.

noodles and company not doing well at all. hitting an all-time low. it is down by 14%. it'd make its second-quarter forecast that it has missed its second-quarter forecast. it also missed revenue by about $2 million. piper jaffray downgraded the stock to neutral and lower the price target to $12. matt: is this because we did not all go to the hog-tied dinner last night? >> noodles and company, i do not think they have hotbot. -- hot pot. mark: thank you. that story that you were hinting about as we started to break -- this could be interesting. matt: an activist investor to

about one $1 billion taken i stay in it. mark: reportedly worth about $1 billion, and that is no less than five percent of american express we will continue to follow this story and bring you more developments as we get them. let's take a look at some of thee other top stories we are following this hour. a french search plane lifted off for a birds eye view of reunion island. they have launched a one-week long operation with boats and aircraft scouring the indian ocean island that is where a wing fragment was discovered nine days ago. lesion officials say cam from the missing boeing 777. investigators from other countries are being more cautious. that plane went missing in march of 2014.

matt: that is the only missing 777 in the world. all of the other ones are accounted for. french investigators confirmed that this is a piece of a 777. mark: test are working out of an abundance of caution. matt: a lawsuit centerpiece off of one that they have people are seeking shelter in taiwan is a monster storm had their way. the full force of the super typhoon is still to come. the storms gas are tapping 120 miles per hour. mark: moore followed from the killing of cecil the line. they are banning the transport of hunting trophies. the a south african government says it is disappointed that delta and others will no longer sell accept trophies.

it will hurt the economy and conservation numbers that rely on revenue. matt: buffalo seems normal. i would not want to ever kill a giraffe or a lion, but i feel a buffalo is -- you can eat that. no? senator chuck schumer will oppose the iraq deal and that is a setback to the administration. what will president obama have to do to make sure it survives the scrutiny of lawmakers? joining us now is the editor for government and regulation. mark: thank you for your time. this will be a tough call for the administration. did he make that just that much more top difficult? >> he picked the middle of the republican debate to

announce this news. he said that he will vote to disapprove the iran nuclear deal that president obama and the other p5 countries negotiated with around. -- iran. he is an important leader in the jewish community, he is very active with wall street interests, and he would take enormous pressure from some who think this is a bad deal and to stand up to president obama, and that is what he has done. what is striking is that he put out a very long statement explaining his vote and many of the arguments he uses are the same thing people like john mccain and lindsey graham are saying to justify their this is going to be very comfortable for barack obama -- uncomfortable for barack obama. mark: the republicans are lining up against the deal.

last night every single candidate voice their negative opinion of these negotiations and what about the democrats? how much of the rest of the party president count on? >> there are about a dozen summit -- senate democrats, including senator feinstein from california. bill nelson of california, a fairly large jewish population in support of this deal. the president did get a nice buildup of momentum this week. they have really put to that with the announcement last night. i think with senator schumer does is anyone who was to go to know for this deal can say that this is the not good enough for

chuck schumer, a very active leader in the jewish community and a hawkish democrat, not good enough for him, not good enough for me. that would carry a lot of water in this town. mark: i have to ask, the israeli prime minister or how does he play into all of this? how does the administration change the narrative of this in washington? >> there are 22 house democrats 36 house republicans. they will be meeting with benjamin netanyahu to hear why israel exists is a bad deal. it is the next essential threat to the survival of israel. and is a threat to american lawmakers. mr. netanyahu has a very strong voice in this town. he is up against obama on it it is very much touch and go for the president. mark: coming up on the bloomberg

market day, banks will be safe tonight but contrary to popular opinion, this is not a pub crawl. ♪

mark: if you haoppen to be roaming the streets of new york tonight, you may see bankers and lawyers running around in a midnight scavenger hunt called midnight madness, in the name of charity there are 21 teams participating. this has been going strong since 2002. matt: last midnight madness was put on by goldman sachs, and the event raised money for children's charities. it can cost about $350,000 to produce.

hopefully this year they will raise even more. i think it is an event that will take a lot of new yorkers by surprise. mark: that it is such a good od cause. it was put on by goldman sachs the last time. i think people have picked up that mantle and said let's do something good and this is a good idea. if you see bankers -- matt: it is a scavenger hunt that involves athletic events, video games. it will be fun, and not involved drinking officially. have a good weekend. ♪

matt: welcome back to the bloomberg market day. i matt miller.

-- i am matt miller. signs of progress in the u.s. labor market. it could keep the fed on the road to raise rates. employers added 215,000 jobs in july with the unemployment rate holding at a seven-year low of 5.3%. it follows an advance of 231,000 in june, bigger than previously estimated. a lot of the numbers were better or the same as the month before. as summer comes to a close many parents are focusing on back to school shopping. it's also a crucial time for retailers. this year, jcpenney is looking to reinvent itself again, along with your kids wardrobe. stephanie ruhle spoke to the merchandise manager about how it is planning to top last year's sales. >> we have lots of strategies. last year, our back-to-school sales were terrific but then tailed off. this year, we have lots of plans

to win in early back-to-school states as well as later back-to-school states. a new initiative in shoes expanding the women's shoes floor moved men's into an open sales environment. we have some great national and private brands with the kids like nike, arizona. all of those will be in stock when you come into shop. matt: starting today, at least 12 states are offering sales tax -free holidays. shoppers can save up to 10% on back-to-school sales. a pretty cool discovery by european space observatory telescope in chile. this planetary nebula called the southern owl nebula is actually a gas cloud from a dying star. it has a diameter of almost four light-years. you can call him professor buzz.

former astronaut buzz aldrin will be teaching classes at the florida institute of technology. he will be a research professor of aeronautics. he was the second person to walk on the moon. those are just some of the top stories we are following or you this hour. coming up in the next half hour, investors in silicon valley are beginning to pack their portfolios with cannabis startups and software companies embedding the drug will be legalized for recreational use in california and could be the next big goldrush. it time running out for traditional watchmakers? sales and got 11% this past year. many are blaming apple. we will talk about a new technology, and speaking of apple, the company's new music service is burned dr. dre is releasing his new -- where dr.

dre is releasing his new album. def con is the largest running and largest underground hacking conference now in its 23rd year. emily chang is there standing by with a software developer and hacker known for creating one of the fastest spreading viruses of all time, a myspace worm in 2005. emily: he is one of the most well-known hackers in the world. the sammy, thank you for coming. you have been here since you are 14 -- sammy, thank you for coming. you have been coming here since you were 14. you're giving a talk about hacking and stealing cars. how does this work? >> [inaudible]

we can lock and unlock our vehicle. those are all codes over radio frequency. emily: so if you have a wireless car remote, you are vulnerable. >> pretty much. it has been known for years [inaudible] emily: what kind of cars are we talking about and what have the car companies said to you? >> [inaudible] fortunately, there is a solution. emily: so no manufacturers have it at all? >> i have not seen it yet.

[inaudible] emily: as i understand, the same thing applies to garage door openers. >> they have the exact same problem. that code can be used later on. emily: how serious is this vulnerability? >> i have been using it the past few years. [inaudible] some people have different devices that we see. [inaudible] emily: you have been focused on a particular vulnerability on the gm onstar system. >> it can do a lot of things like remotely start your vehicle, it can track where your vehicle is at any time. there are vulnerabilities within the app.

if you ever open the app new york car, and i have my device on your car, i can [inaudible] emily: it is the most basic computerization of cars, and on the other end you have tesla, which has also been hacked. [inaudible] >> we are trying to connect everything. all of them have vulnerabilities. emily: what do you have to say to the samsungs of the world and all of these companies trying to make the home more connected? >> i like the features that have been put into my tv or car but many to pay attention to

security. [inaudible] the manufacturers should be doing the research themselves as well. emily: definitely very scary. thank you for joining us and warning us about these vulnerabilities. matt: thank you, emily chang. now back to one of the big stories. valueact capital management has acquired a billion dollars stake in american express. they are pursuing shareholder friendly changes. beth jinks joins us now from san francisco. what are shareholder friendly changes? >> we don't have any details yet. we know that a billion dollars stake in a company is a sizable

position for valueact. they will be looking at whether they will push for changes behind the scenes. matt: amex recently lost cosco, was sued for not informing its investors how important costco was to its revenue. i believe it also lost a suit that would have allowed it to continue to charge higher rates. can you walk us through those issues? >> both of those issues caused the stock to go down quite substantially. i have spoken to a number of hedge funds in addition to activist funds who look at this as a short-term low. many saw this as a buying opportunity. since we published it today, investors have reached out and said they do both of those and overreaction is a buying

opportunity. they see it as good, long-term growth potential. matt: valueact says that it may sell the stake, if it is too much of an uphill climb to achieve what it wants at amex? >> valueact has a very distinct strategy, in that they buy -- often, a farm position, which is less than a 5% stake, while they are doing their research and talking to people in the industry, getting to know the space before they decide to increase investment and then perhaps do a campaign. the usually seek a board seat. in this case, there is no indication they will do a full activist campaign. but they certainly have a sizable farm position. matt: they try to keep that on

the down low, below 5%? >> the scoop today is not something that most activist funds would want out there. matt: in that case congratulations, beth jinks. coming up apple, often blamed for killing the music is this might be doing the same thing to watch is. -- watches. ♪

matt: welcome back to the bloomberg market day. next year, the state of california will vote on a referendum to approve recreational marijuana.

2016 may seem like a ways away, but not for investors and entrepreneurs. they are already creating and investing in apps startups, and software built for the cannabis industry. "the financial times" profiles a company that provides a monthly delivery experience for weed. alix steel is here. this may be the biggest commodity you cover on your program next year. >> it is possible, actually. i have to do some research to be an expert in artups are pourg in and the way they are presenting themselves, one is calling itself the uber of cannabis. it delivers marijuana across 60 cities in california. matt: even though it is not legal for recreational use, a

ton of people in california smoke because of medical licenses. >> they do not sell it they hook up with a dispenser, and that is their job. there are some companies that want to show who grew it, how they grew it, where they are sourcing it. it reminds me of the organic craze. you know where it comes from, the same farm to table idea. matt: for decades really, there has been talk about dealers spraying marijuana with certain chemicals that get you higher but also leave you physically addicted to the cannabis and that is not what the average user wants. >> you want to be able to appeal to the mass market, not just those who are going to smoke to begin with. you wanted to be more mainstream, and this is the way to do it to expand the demand days to make it more legit at the end of the day. what i need is some investment banks to start covering

cannabis, so i can steal their charts. matt: or you can go there and do live, on the spot research. let's talk about commodities that actually trade on wall street. on or near wall street. >> the story of the day is oil. $44 a barrel. the news today, oil rigs in the u.s. grew. this is pretty ugly. matt: very low count. >> it is more than we saw, but the increases are significant. matt: investors were looking for a drop. this means more supply. >> right. i want to point out a great chart that came to us from credit squeeze talking about the forward prices of brent, what it

would be worth in three years. about $63 a barrel, and that is $14 above the current spot price , meaning commodities have not yet hit their bottom. credit squeeze says they do not start to rise until one third of the production has been underwater, because cash costs go down, too. you can afford to keep running production at these levels. is it all fundamental or is there fast money in the market being shaken out and that is why we are seeing brent go under $50 a barrel. some say yes. oil was seen as the anti-currency, all commodities really, and as that is starting to unwind you are getting this shakeout. the way that commodities are shaping up, you should be looking at a global recession, so there is a lot of money moving that is not fundamental. matt: i look forward to hearing about it. you will also be joining me in

about 10 minutes. i will give you a quick news summary while she chills. do you have the correct time? in north korea, the state is getting its own time zone one week from tomorrow. clocks will be moved back by one half hour. pyongyang time differentiates the country from its regional rivals japan and south korea although they share an industrial zone, so it will be weird. the apple watch is making its retail debut today at 100 best buy stores. you can already buy it at apple stores but now you can get it at best buy available at 200 stores more later. best buy is the first national retailer to carry the watch. it is also being blamed, the watch for the demise of the traditional watch industry. often blamed for killing the music industry. is this true in watches?

as well -- watches as well? sales of traditional watches were 11% lower compared to the same time last year. swatch also says that it could bring in the ice age to the traditional swiss time making industry. stephen pulvirent is with us. i have been reading your watch review since you have joined us, usually about great, vintage timepieces with automatic movement. but now the apple watch -- i'm not sure it is all the rage, but it is something that everyone what's to talk about. >> as we have seen with a sales reports, it's taking a big bite out of the industry. analysts are right that the apple watch has disrupted sales, but it is useful to keep this in perspective. the apple watch is not being on

watches that are selling for $4000, it is beating out those watches that are selling in the $100 to $500 price range. matt: what i find interesting, we fault apple for not selling enough watches, but the watch industry says it is hurting them. what happens when it really wraps up and gets to a second or third generation and people actually want to buy? >> brands selling in the psalm $1000 price category have to be worried. especially those that had technology to their watches. they have to worry. selling a swiss watch with a touch screen in it versus an apple watch that is a tougher sell now. matt: do the more of scale manufacturers have to worry? a buddy of mine was asking, does breitling sell a watch with a stopwatch or an alarm? >> i don't think we will see

some thing like this from a company like rolex but breitling does have a smart phone app where you can control some of the features of the watch. iwc is releasing something. mont blanc is releasing something. brands are trying to figure out where they can have the impact without diluting what makes them so special. matt: one thing i noticed about the apple watch, it does not always tell you the time. you have to agitate it or move it to your face. >> it's a great notification device and a really good way to access certain apps, but it is not a really great watch, which is something that apple needs to address. matt: you need to be able to tell time all the time. stephen pulvirent, our watch expert. coming up, rapper dr. dre is dropping his third album in three decades, this time with twist.

that story is next. ♪

matt: dr. dre's first album in 15 years will be an apple exclusive. he will be donating the proceeds from the album to a charity to help his hometown of compton. he has come a long way since he started out in l.a. earlier this year, the curator of hip-hop at cornell university spoke to scarlet fu. >> dr. dre got his start in about 1984 with a group called the world-class wrecking crew which was more of an electric style of hip-hop. dre has been extremely influential throughout the history of hip-hop, especially

in the recording industry. he is seen as royalty, as you said. that means, one of the figureheads, one of the people at the bleeding edge. of course, we are talking about his album on itunes exclusively, which is a modern concept. >> the digitization of music changes in how music is distributed, has that hurt or helped hip-hop? >> i think it has helped. it's important to understand there is music coming out in the mainstream, the top 40, the things with a lot of marketing dollars behind them. sometimes that music, for people of my generation, feel it is not of high quality. but i will say, there is a democratization of hip-hop when it comes to my ability to go to an app like sound cloud or

another and follow somebody's page on facebook or social media and have a wider range of hip-hop accessible to me. so i have a clearer picture of what hip-hop can be. i do not think it has reached its fullest potential as a music form, as a culture. it is growing. i do challenge everyone to look beyond just the top 10 songs in heavy rotation in the mainstream channels. scarlet: dr. dre was a founding member of nwa and the straight outta compton album made it to the mainstream and there is a movie of the same title. i understand you did some consulting for the film? >> we have the world's largest archives documenting hip-hop culture here at cornell. i'm the assistant curator, so i receive requests from film people, people working on other projects to do research for

them. someone involved with the film contacted me about the year-and-a-half ago to look for photographs which would help them design the sets accurately. i was locating some things in our archives for them, and that was pretty cool to be involved with the film and see it coming out now. i am very excited to see the film. everyone is. matt: ben ortiz from cornell. still ahead, congressman ryan is a democrat that sits on the house appropriations and budget committee. we will get his reaction to the job support and the debate on iran. ♪

♪ ♪ (ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring (don't fear my darling...)

(the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. >> it is noon in san diego, 3:00 in new york 3:00 a.m. in hong

kong. is american manufacturing alive and well? we hear from one congressman. alix: carl icahn is doubling down on energy even after losing hundreds of millions this year. matt: berkshire hathaway is set to report earnings. is it good enough to pull the stock out of its slump? good afternoon, i am matt miller with alix steel. alix: you are seeing a dow that is having its longest slide since 2011. in some ways, it came out of nowhere.