a big elephant deal for warren buffett. berkshire hathaway agrees to invest for over $37 billion. earnings reporting after the bell. can the catch up with ea? scarlet: good afternoon everyone, i am scarlet fu. rebounde have seen this around session highs as we had toward the close. can think some of that too warren buffett at his five.

-- and his big buy. energy stocks are getting a bounce back after recent weakness. trading down about 14% from the 10 day average. keep in mind this is sluggish volume. come inside the bloomberg terminal. there are some technical factors at work. this is the s&p 500 on an intraday basis. the purple line at the bottom is the 200 and moving average. it is the average price over the last 200 and trading days. what is noteworthy here is right around early july the s&p 500 dipped below the 200 moving day average and closed below it. and then it has been a line of support since then. it in july 27,

at august the seventh, but we have now held above it so far. keep watch for this level. we will see how much of that support level will hold. to treasuryver markets cause i know we will be talking about the fed and dr. greenspan's comments this morning. the yield continuing to move higher, especially on the longer end of the yield curve. that is exactly what janet yellen actually wants to happen. 4%, justear note, 2.2 under 3% on the 30 year. some shorter horizon inflation numbers have also firmed as well. pimm: commodities. reboundingis

which is held by what we saw in china. imports of oil have declined in record numbers. ? it is a bounce for the commodities overall. thetop headlines making news this hour. herlet: clinton unveiled college aid plan in a town called just over an hour ago. reducing the cost of a four-year public school education. she was to cut student loan interest rates. betty: warren buffett is making in one of his biggest gambles ever read he has agreed to buy precision castparts, which makes precision instruments for the aerospace industries. tot represents a 21% premium the closing price on friday. reserve the federal vice chairman says that low inflation will not persist with

the nation at near full-time employment. part of the inflation is temporary, has to do with the decline in the price of oil, and the rise of more materials these are things which will stabilize at some point. to be as low as we are now forever, and we need to be looking ahead as we go. scarlet: this afternoon we heard about the timing for lift off. hased chair, janet yellen, stated she expects conditions to gel, justifying a start to policy normalization sometime later this year. i agree. i think the point of lift off his close. scarlet: fed policymakers meet on 16th and 17th. most economists investors and raise rates for the first time in almost 10 years. won a longntina has

battle in that defaulted to do court battle. in 2001 virginia defaulted on a record $95 billion of sovereign debt. since then they have had fighting attempt by investors to recover what they are owed. scarlet: russia's economy shrank the most since 2009. the reduced life in commodity prices hammering the ruble, shaking a country that relies on oil and gas for about half of its hundred revenue. betty: in japan, the first nuclear reactor to pass new safety rules since the fukushima disaster will be restarted tomorrow. all of the reactors were gradually taken off-line the accident in 2011. and earthquake and tsunami caused a meltdown. he is fully recovered

from an ankle injury and is ready to compete in the pga tournament. mcilroy has won two of the past three. those are your top stories. betty: alan greenspan calls it one of the worst challenges facing our economy. askinge on surveillance, if it is something we should fear. >> i think it is the most that not onlym confronts the united states but the world at large. worrythe developed especially. the cause of that, if you work

investmentis capital has been an adequate to fund the amount of assets you need. just said weer need more investment in america. all of our viewers and listeners agree with us they met. can covered his need the catalyst to more investment that creates more jobs and allows for greater productivity? >> the only catalyst effect that should be useful is withdrawing, not moving forward. if you look underneath the data, what use is that darting essentially with 2009, following the crisis, gdp as a conventional measurement has divided it all into two significant sectors. for acids, which has a life expectancy of more than 20 years.

assets, which has a life expectancy of more than 20 years. remainder of the economy is not having significantly differently. >> you are worried about bubbles. easing inantitative europe and japan. of theaid should we be holes, and particularly within the bond market? >> particularly so. we have a pending removal. thee merely substitute structure of equity prices, the we have the price of bonds, and the status expected equity return we have affected interest rate return. is anrice earnings ratio

unstablenarily position. and what will ultimately determine where does is to reach back and ask ourselves where is the normal interest rate? one of the things that occurred to me as a consequence of the 2008 crisis, i knew something thegrowing, but i missed actual date, as did everybody else in something very fundamentally different was going on. i went back and look at what my premises were about the way the system worked. i found that there was very little significant problems that behavioral economics is really covering. this particular question is a behavioral issue. >> let's bring this morning. talk about the risk-free rate.

does alan greenspan, or stanley fischer, or warren buffett spending $37 billion. how can you make a transaction if he does not know the rate? determinesself, what interest rates, fundamentally? that is the extent to which we discount future values. >> what is the character of this commodity collapse? down,see oil and copper the easiest answer is china. i do not either. why do we see a commodities implode? >> oil has to be differentiated from the rest of commodities. fundamentally, it has had a production..s. we have had a million barrels a day since the last three years or so. solutionf our fracking

, we have no sign of lymphatic despite the issue of much lower oil prices. is inhat is telling you the cost down lower and lower, have declined. much more ahead on the bloomberg market day. nolary clinton said that student should have to borrow to pay for tuition for college and how is she going to do this?

scarlet: welcome back to the bloomberg market day. to thelet's get straight markets. the dow is trying for this 200 point game. are we going to close up? i am feeling pretty good about this. let's take a look at the board. the s&p is the by a quarter percent. the nasdaq is up by 1.2%. the dow and the sabr both seeing their best day since may 8 you -- and the dow is on it track to break their losing streak. let me take you into my bloomberg terminal. i will show you the leaders and laggards right now. for most of the data has been the energy sector. 2.8%,ergy sector is up by

utilities has been in, all the .ntire day and to the commodities, the first being oil. t is up by 2% to $44.77 a barrel. china came to the rescue this time. inorts climbed to a record july. looking at another commodity, copper and that is also snapping a three-day lizzie street. it is because of the weather. there are torrential rains happening in central america and chile, and chile has some of the biggest my. that halted production is causing this half in copper's future rate in addition to the left look at some commodities

ask that are also authorized to it got an upgrade from underperform to a hold. freeportees a pop in wantan made they say they to sell up to $1 billion in shares and repay their loans. a pretty good performance across the board. scarlet: thank you. the world's biggest benefit companies trying to change the debate over obesity. according to the new york times coca-cola is funding scientists that argue americans should get more exercise and worry less about cutting calories. betty: no accident.

aspartame hits stores this week in response to customer feedback. without aspartame hits stores this week in response to customer feedback. scarlet: water is the best. founder of money has made a major splash in the want of younger. he is turning his focus to copy. new york times says he is taken his take in the lookup across .he roasters no word on the size of his estate in the company says it has 3000 wholesale customers and has thrown 40% over the last year and.

bernie sanders is drawing large crowds on his campaign trail. 28,000 people in portland according to the staff at the venue. compare that to the hillary --nton how much to the numbers really matter? looks a crowd size. we pay a lot of attention to it is hard to tell what it means and terms of the bears -- in terms of votes. they reflect organic enthusiasm when people are really headed about it edited at one thing that can killing campaign has had and continues to have is a sense that there is the not that much enthusiasm. the kind of fervent excitement that you bernie sanders is generating. he is not the first time he's

-- there is something going on here. this making people rethink the whole idea that hillary clinton is the presumptive nominee on the democratic ticket? still think --y on the other hand, you can win with white liberals alone in new hampshire and iowa. if he were to challenge and when those contests, if you did that, it would throw the democratic party and to total disarray and might open the door to some of you getting in the race. scarlet: it looks like he has just picked up his major labor endorsement as well. sanderssenator bernie

digging up endorsement from the yet national nurses united union . it looks like his demographic is getting a little bit bigger. he is in much more plausible candidate than most will not. -- most has thought. au're starting to give him fresh look. scarlet: thank you. tune in tonight for all to respect the 5:00 p.m. with john and mark halperin. take two interactive. of 50% over the past year. betty: still trying to catch up with electronic arts. that is next. ♪

scarlet: shares of the video company -- videogame company behind grand theft auto is up 30% in the last few months. electronic arts doing even better. betty: cory johnson is here with more. two,ver we talk about take if you're not a big videogame are you know that they make theft auto. is it all about that franchise? betty: historically that has been the story. cory: it has been grand theft auto, and maybe something else. if you look at the sales, the trailing sales of the big three ,n the videogame business electronic arts, activision and

take to reconsider grand -- you can see the grand theft auto effect. the question is, what is take two without grand theft auto? what will its benefits be? the report earnings now and next hour or so i think we will get a big sign of what the future of this company holds when it is not a grand theft auto release and it is not the year after. the hangover is now behind us. what is the growth of this company, and into a much larger console market? the market may double this year more than last year. i am just looking at the sales projections for take two interactive. 42015, it is falling 31%. for 2016, down 15 percent.

it has this up-and-down quality to it. newnd grand theft auto and releases, what is take to doing to change of its business model and make it more predictable? cory: one thing that is really important is the other games that do so well for them. the nba franchises the best selling one out there. basketballest franchise in all videogames. that has been very successful in some markets for the first person shooters will not be sold in china ever. , andmay be sold in china make it a following as well. it is by all reports a fantastic game. redemption,ead another successful game for this company. in terms of what is next, what is happening after? unlimited change their business model? i will answer the question of

what is next? one of the things on the call will be the date of the new releases. their games have been so good rated by those have been really good. that could be good for them depending on the gates of that release into the bigger console market. the other thing is that interdigital. take two has yet to move to digital in the way electronic arts and activision half. you can look at it as glass half-full, either a mistake or an opportunity. scarlet: thank you. betty: we will talk about warren buffett, next.

betty: welcome back to the bloomberg market day. to a look ataight the top headlines this afternoon.

new tension today between the two koreas. the south says the north planted vines and 50 military zone -- planted mines in the demilitarized zone. if our left turkish group says an attack on an american consulate. the turkish news agencies say one of them was caught after a shootout with police. the attack comes a day after six u.s. warplanes arrived in u.s. turkey. they will fly airstrikes against islamic state targets. site said there was no way to secure any nuclear deal with iran without sanctions that made it harder for people. ideologicale any business doing

with the wrong. there may be's guesse -- with iran. .here may be skepticism that is an honest argument. if you just want to say that you do not want to deal with iran. then that has a logic to it. betty: the u.s. senate will begin debate on the iran nuclear deal in nine days. donald trump has resolved any issues with fox news. he is under fire, saying he s chief.th the new s described the way he was

questioned as inappropriate. warren buffett's berkshire hathaway has made one of the biggest deals over. precisionn for castparts, the maker of aerospace equipment. earlier today pimm fox in matt miller sat down with our deal reporters. they own almost $1.5 billion worth of sure shares. -- berkshire hathaway shares. deal, a huge even by warren buffett standards. this is the elephant he has been searching for. mixed reaction this morning. that is interesting. usually investors are very excited when buffett has a large deal. i saw precision castparts stock is up 20%. the problem is, we are in an

environment where m&a has become very expensive. we are at record high valuation this year for u.s. takeovers. buffettoncern is warren , is even overpaying for deals. a little bit higher than usual. but our analysis shows that it might be worth it in hand. matt: pcp stock price was down to so is 20% premium to the whole over the last year to date. people thought he overpaid for the railroads as well. >> a great point. he bought burlington, and the from 100 85dropped on the back of the troubling industrial production news and the fear of implications of the rail. he only paid up over that reduced space and in june of

275 year pcp shares were at he is not even near where they were. classica perfect berkshire hathaway acquisition. there is no competitor. try to go about filling the orders for boeing -- dreamliner is7 inth about $1.5 million revenue to precision castparts prefinished airfoils, things were jet engines about turbines, and the oil and gas industry. >> there is no across the street preview you are the head of the airline visibly came along and said would you like the best second-besthe product? you cannot take the lower-pric.d matt: he dollars of 20% of the last year.

of the revenue overseas. it is getting more expensive to produce those to hear -- those things here. the dollar gets stronger. >> one of the reasons this is such a classic trackway transaction is the ceo could say this is a perfect acquisition for the firm because our employees will be able to continue doing what they do so well. unlike the other types of acquisitions we have the around the marketplace. even those which warren buffett has participated in, those were transactions were there was a sharp consolidation. pimm: warren buffett has in a sense change the way he manages berkshire hathaway. he is not interested in running a mutual fund anymore. said, this is a

perfect fit for him because it will bring in a lot of cash flow. it will be more cash for him to go with, or his successor to go out with and do more deals. pimm: another industrial company. ? i think the trick with the cash flow is how steady it should be. they have an order backlog that for 15n map out years. the dollar makes a difference, but when you are placing orders for some airline, they will double the end of going to boeing. the certainty that it is the best in the industry. pimm: they could have hedges and a long-term he does not sell these companies. >> he has no plans to break them up or anything. it is what it is . matt: what about his cash pile? >> it is a little more complicated, but he has a lot less sure if you be generating more every quarter. but now this or any really big

acquisitions on hold at the moment. there is the sense among some investors that this is not what they were expecting. >> i think it is a terrific business. it is a fair price. it is about 15d, times earnings. pimm: market cap right now of , he is paying $37 billion. a little bit more. >> free cash flow going forward. the other solid investment he made over the last six months was a car dealership. that is an industry consolidation. he may have got 4% of the industry, but they will not stop them. in this case, this is a discrete investment. it is the very secure franchise.

matt: i love the industry this guy and us in. cars, airplanes, it is like a little kid. >> if you start out and you do not have the shares, at least from our perspective, it is a good core moment. it is true. he has played trains, and automobiles. planes, trains, and automobiles. coming up on the bloomberg market day, shares reached new lows, social media considers a shakeup in the board of directors. ♪

betty: welcome back to the bloomberg market day. let's bring in remy. we are 15 minutes before the closing bell. ramey: i am feeling pretty good, everything is here. the s&p 500 is up by one point 52%. the dow is up the most and has for most of the day. the nasdaq is up by 1%. we have a couple of superlatives to drill home. the dow and the s&p, we are seeing the best day for both of them since may 8. the dow is on track in the next 15 minutes to snap its 70 losing streak. one thing that is interesting about the s&p 500 to show you, is gpo.

we had talkeding about on friday. something that check missions and chart watchers will love. this is a one year graph of the s&p, and its 200 day moving average, represented by the yellow line. it's time that the 200 moving average came close to the index it popped back up. just in the past month we have seen it happen three times, especially today. friday, and passed as president, and it continues. the gpo function for the s&p 200 daily moving average. the energy sector right now is rallying. it is the leader on the 10 sectors. etf is up by 3%. the spp energy at dekes is a 5% as well. this is the highest since july 31. crude oil futures are up as

well. also looking at some other commodities. worst we will take a look at copper. copper futures are up about 2.5%. best days since april 30. it is snapping its three-day losing streak. the reason for this is very interesting. it is because of the weather in chile. chile has some of the biggest copper mines in the world, and they halted reduction and that is causing this pop. biggest copper producers, freeport-mcmoran is up by 10%. let's end with the 10 year treasury. it is seeing its worst day in a month, but the yield, as often the case is rising right now. since july 9.mp atlantaoff the back of

president saying that the point of liftoff is close. he is referencing the potential rate rise that might have been september and that everyone is on pins and needles expecting, potentially to happen. expectation, 90% -- nowtion, not a 50-50 to 50-50. now to the top stories making headlines at this hour. cbs health is settling allegations that several rhode island pharmacy locations sold invalid knowledge prescriptions for painkillers. the company will hey the u.s. government 450,000 dollars to resolve the two-year investigation. the ceo has denied any wrongdoing. target will remove gender itsls from most of toy department. not have gender labels, neither will the betting section. the gender labels will remain in the kids clothing section

because of sizing and fit differences. images of mars, giving us a unique look at the red planet. the images are different than we have seen before. unlike the close-ups are used to seeing, the shots were taken from a just, showing the planet in full orbit. those are your top stories at this hour. are up todays after news that jack dorsey has bought stock in the company. and with news that the have signed with the nfl. but this bright spot does not overcome the rough year that they have had. they are slow to attract more users, and investors have been punishing the shares which have or near record lows. the social media giant now considering a shakeup in its board of directors. the shuffle might involve the ouster of a former ceo, dick costolo, from the board. chang in san emily francisco. tells what is going on. what might this board sheet of look like?

is unclear if this would be an ouster or dick costolo stepping down because he wants to it is not surprising that he would like to leave love potentially after they get a new permanent ceo on board. he's that i am done, i want to move on. at the same time, another thing that we are hearing is that twitter is thinking about adding more diversity to its board, bringing in new people with different perspectives. one of the big criticisms of twitter is that you have a lot of insiders who are still running the place. they have not had a lot of new blood. interimsey is the ceo. and then you have a huge twitter investor saying i want jack to be the permanent euro, and evan williams should be executive chairman. all insiders. saying the critics are that twitter has had these problems over the years, why would you not inject new blood

to save you can shake some things up? it seems thatt for now, investors are getting a little bit of a boost from one ceo jack dorsey buying shares. what is behind that? $875,000 worth of shares. peter fenton and peter currie, but people who are on the board buying shares. it is interesting to note that evan williams, under the twitter cofounder is also selling shares. much difficult to read too into this. jackie tweet that he is investing in twitter to show support for its future. do happen forles many reasons. one thing that i have been looking at is that jack has been tweeting up a storm the last few this newtaking over

job. he seems to be a one-man band, trying to prove to people why you should be using twitter. he is tweeting emoticons, share sales, to celebrities. if you look at the tweet about sharesng it has 200 free -- retweets. it is illuminating about the value proposition between twitter and facebook. facebook has so many more users. and if the argument is that you should come and lesser content here, it is not a strong argument because the users are not there. betty: thank you. do not forget to tune into the request at 4:30 p.m. eastern. another stock that we are watching today is shake shack. thats of the burger chain shares of the burger chain

reporting after the close. michael hill and joins us now from princeton new jersey with more. we are just basically going to report sales numbers are they continuingthat pace? we will be looking at the performance of some of the newer stores. we will see how the restaurants tend to do the first three to six months in duration. sales will be the key to this report. ofty: do we have any sense how the newer stores in doing so far from our own gathering? >> not in particular from our own gathering, but management has a long-term guidance for average store sales. it seems like they're coming in . little and higher

betty: why is this a stock so volatile? >> it is about the limited amount of shares available as a percentage of them are short and he will see volatility in the stock and you will see it continue. betty: the stalk, as we just assured your committee down ahead of these results. can you read anything into that? >> it is tough to say. employment may just be concerned about the valuation. concern that there are very high expectations right now. people may not want -- they may just want to take some risk off the table. polishing is shake shot going to satisfy people's expectations? the stock is at a pretty high premium. since its ipo. how does it meet those expectations? >> it is going to be difficult.

the stock is trading at 400 times forward earnings versus 60 lower.or other a have a tough road. betty: thank you. shake shack reporting after the close. watch, we wills see if results will satisfy investors.

betty: another stock that we are watching as we head into the closest craft times. the recently merged company expected to report after the bell. they officially joined forces last months things to warren buffett.

we want to bring in the bloomberg intelligence senior analyst who covers craft times. he joins us from princeton, new jersey. what will we look for in this newly merged company? >> investor eyes are going to be on sales growth. as you said, it is the first report from the new entity. having said that, the merger happened july 2, so he watching craft as it was a standalone organization. sales will be the key thing. it is a tough quarter. the early easter this year, a lot of the sales for second quarter will be posted in the first. the second thing is, have they instituted any cost-cutting initiatives of their own going into this merger. betty: what about this cost-cutting? wasn't that part of the reason they got together? >> the us is. that is the key investment case.

craft was an organization that was not growing very fast rate the margins were mediocre for the group. heinz, with the benefit of their capabilities and cutting costs have become more or less the poster child for a great margin improvement. the sites have been set to raise margin significantly. but i think investors over the long-term or saying that is great, but how do you grow this company? it is way to talk about prosperity, what is going on with product innovation and what will drive sales growth in these mature categories? betty: catch up, macaroni and cheese, jell-o, you do not see a lot of exponential growth there. what are the new categories where heinz and craft, where they can make some headway? -- guidance given so far is to do for extensions. the craft mustard was a pretty hit.

they have added extra spices to the catch of lines to address the growing ethnicity in the u.s. and the millenial. a goodond that, it is question in terms of one of the bold ideas for innovation? they require acquisitions, or can they create new categories with what they have? betty: thank you so much. much more ahead on bloomberg television. what you miss is next. -- what did you miss is next. ♪

(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. joe: we are moments away from the closing bell. i am joe weisenthal. scarlett: and i'm scarlet fu, in

for alix steel. [bell rings] u.s. stocks rising the most in almost three weeks. joe: the question is "what'd you miss?". the $37 billion deal. warren buffett pursues berkshire's biggest deal. does his big bet makes sense? scarlett: our neighbor to the north has never meant more when it comes to global markets. joe: and stocks take a backseat t. we have the charts to prove it. move.tt: we have a steady , almost a broad advance erasing last week's decline.