years. in yet another effort to combat the biggest economic slowdown in a generation. it is having ripple effect on markets around the world. erik: google shares soar after the company reorganizes its infrastructure. it will now be known as alpha that incorporate -- as alpha that incorporated. matt: can anything stop donald women,he has insulted ceo's. but he keeps rising in the polls. matt: good morning. i'm matt miller. erik: i'm erik schatzker, dropping things. matt: that is because you are excited about economic data. for that we would go to mike mckee in the newsroom. mike: unfortunately, for the

united states economy, wholesale inventory is up .9 percent during the month of june. the month of may was revised down. we are looking at a net gain of .7. in may.down you want sales higher than inventories, so you keep making stuff. we have seen a big inventory build over the past two quarters. this is second quarter data, june. it will all be incorporated into the revision to gdp we get for the second quarter. what we really want to know is what is the level of inventory going into the third quarter. our factories going to keep building stuff? are retailers going to have to discount? this suggests a lot of stuff is just sitting there. we have imported a lot of stuff, which is unusual given the fact

that the dollar has been strong. we will have to watch how that develops group the next couple of months. the update.you for i think it is fair to say that wholesale inventories data and other things are disappearing into the mall of china this morning. maw of china this morning. this evaluation is the biggest in two decades. matt: it is having a big move on treasuries. take a look at treasuries and see the 10-year and the two year note are being bought up, driving the yields down. as people speculate that the fed will delay its increase in rates due to this. the timing seems like it was timed, and we are going to talk about that. erik: here is what is making news on bloomberg this morning. the european union is a plotting china's decision to devalue the you want. the eu says economic fundamentals should set currency

values for business a step in that direction. isshows that the government -- china is mired in its deepest slowdown in a generation. -- the had its biggest yuan had its biggest one-day drop since 1994. they have a lot of balls in the air, and they are trying to do a large number of things all at once. they want to rebalance, restructure. they want to lead globally, they byt to shape and reshape international institutions and reform their capital markets. so there is always a risk that they just shoot -- that they --t chewed off those co-much off too much. erik: after boosting exports, that government had been propping up the you want to keep

capital from flowing out of the country. more on that dw wish and david wu in a moment. a feweek government says details need to be resolved. the agreement would give the greeks 86 billion euros that turns into $94 billion in exchange rates for today. the european central bank payment is due on august 20. matt: google wants to be the berkshire hathaway of the tech world. it is reorganizing into a holding company called alphabet. alphabet subsidiary will have its own ceo, and maybe its own letter, a structure similar to berkshire hathaway. larry page will be the ceo of alphabet. be headtime deputy will of the google search engine. he has only been working for 10

years. this guy's career has shot. he is young. he only came out of -- erik: there is no question because he is going to be running google inc.. not many outside the goal universe know much about send our pitch i -- about soon. p pichai.about sundar that was lower than the average economist estimate, but the first positive number in nearly one year. it is being called a new front in cybercrime. authorities have broken up and insider-trading ring that relied on computer hangers -- computer hackers. nine people have been identified in the conspiracy.

five have been arrested. intoials say they broke the servers of prnewswire, market wire, and business wire. the international space station, the iss crew will dine at a farmed table tonight, with the first vegetable grown in space. they grew for 33 days before being picked. that looks like awesome fun. those are among your top stories this morning from the bloomberg terminal. erik: let's return to the top story of them all. david wu's head of currencies, research, and global research. the chinese are saying it is one and done. do you believe them? david: there is no way this is one and done. this is just the beginning of something much bigger. for one thing, 1.5% evaluation

-- 1.5% d evaluation will not turn around china's exports. they want to ease monetary possibly -- they want to ease monetary policy more aggressively. there is the notion that no company can have a fixed exchange rate and have a capital account opened at the same time. china is no exception. it is no incidents this thing happened today. validatedcally -- expectations that the fed could be hiking rates in september. there is no way the chinese can lower interest rates at home or while the fed is trying to hike rates. is increasing the urgency for china to let the currency go, and they are telling you they will be easing monetary possibly -- monetary policy aggressively.

who saidre are people in the bloomberg story today this is the end of fixing as we know it. end of fixingthe as we understand fixing to be, but fixing as china has done it maybe is going to change. the ban is the real ban now. david: they are moving toward a more flexible rate of exchange. they can lower interest rates, and then as interest rates come down, obviously you will see more outflows from china. by doing it this way, they will tell the world that we are letting the currency going down, goodhis is not going to be only for china but for the world as well. in the medium-term it will be, but not by today or tomorrow and next month either. this is what you are seeing today. fears of competitive devaluations -- people are

saying china will devalue 1%. from japan, korea, mexico, to even europe will have to suffer the consequence because german exports to china is 3% of gdp. matt: can we continue to think about raising rates, or do we have to fire our own salvo in the global currency echo david: stan fischer said yesterday on tom keene's show, we are getting closer to full employment, but he is concerned about inflation. he is leaving the door open, saying that if china devalues, this brings in deflationary forces around the world and the u.s. will not do with this implication, and therefore that is something we need to take into account. there is no question in my mind that the chinese move today will cut short the fed tightening. i think you want -- erik: we see that with treasuries yielding back.

david: the market is very efficient. erik: i want to go back to the point you were making about the impossible trinity. most people are evaluating the chinese evaluation as a short-term effort to boost exports. -- you talking about it are freezing it as a structural capitulation. qe,d: when the u.s. did what happened yet go the rate went down, the dollar collapsed, and the stock market went down. when the ecb did it, the european stock market soared. in to say the japanese qe 2013. china is no exception. they are really approaching the chinese style qe, not to the extent that it will be driving that should also make you feel less negative on the chinese stock market. this is what it has been about. this is the start of chinese qe,

more aggressive. erik: you said at the outset that there is no way a 1.9% devaluation is enough. what is enough? david: china, which has a large economy, 19% of gdp, you need a big d valuation. clearly that is not what they are thinking about right now. can you imagine what is going to happen to oil prices if something like that were to happen? instead they will find a lower interest rate. the seven-day repo rate and china, the benchmark rate, today is higher than it was two months ago. they had nothing to lower interest rates because they had been trying to defend the currency. by letting the currency go, what has happened today is capitulation. there is no question, and i think this means more weakness. you should become less concerned

about downside risk in terms of growth. , thank you for joining us. the major take away for you as investors is that this will come if not change janet yellin plus schedule for liftoff, it will change the way she views the trajectory of interest rates. greece and its creditors have a deal to unlock bailout funds that the government so desperately needs. ♪

matt: good morning, i matt miller. erik: i am erik schatzker. matt: we are energized from that discussion. the stock market is taking this evaluation so welker let's check on the notable movers in today's session. take aco i am going to

look at the food stocks. first to craft times. right now it is up. it had been down earlier. this despite missing both its revenue and net sale estimates. 1.5%, nearlyp by $80 per share. second quarter revenue came in at $4.5 billion, less than the $4.7 billion estimated. one interesting addition, the company is now declining to give or update its earnings guidance. one thing that might be giving the stock a boost is bernstein, saying the company cost savings are likely to get faster in the third quarter. so it is raising estimates and keeping his outperform rating on the stock. moving to fast food -- we go byr to wendy's, shares down 2% nominally. there is a potential for re-franchising, international capex that cuts to

is a seven-month low., and the stock is on a five-day losing streak. revenue profit in same-store sales blew past expectations for shake shack, now up 3%. in a sense you bringing us the latest market movers. morning, focused this as an individual market mover, on google. i am having trouble understanding why the stock is trading. the stock is trading up 40 bucks on transparency. but googlesparency, is going to be the same company. it will report differently. the first thing i thought when i saw this news is that this will help them navigate the choppy waters of european

regulation more easily. buty be off base with that, that was my knee-jerk reaction, that they will be able to now --e fines, except penalties accept penalties. erik: there are a number of different ways to skin this cat. for more top stories this morning -- two of the world's biggest makers of cranes and construction machinery is joining company with a finnish company. of two have combined sales $20 million. there has been a global slowdown in demand for cranes are at a doctor -- for cranes. more than one quarter of a team of staffers felt you -- fell ill with stomach bugs. tests by the associated press

atnd a virus in the water many aquatic sports venues. if you have been to brazil, that should not surprise you. nbc will keep the rights to show english soccer in the united states for six more years. nbc is in the final year of a 250 mile -- of a $250 million deal. those are some top headlines. the government, has reached a deal with creditors to unlock a new round of bailout funds. about $94 billion. greek stocks are up 1% on the news. its fourth straight day of gains, which is pretty serious. hans nichols has been covering the greek debt crisis for years and is here in new york after spending a little time on the athens stock exchange. hans: a greek years it has been years. the stock exchange, the markets like this news. we have a technical agreement,

we do not have a political agreement. we will get that when the leaders meet in brussels. both sides appear to be giving some. creditors' side, they have a loosening in terms of the primary budget surpluses. they will come down a little bit. overall in three years, there is $20 billion they have given on. side, there are prior actions, things they have to vote on. remember, the did six prior actions before. you see some of them clamps down on early retirement, changes in taxes for shipping firms. every single one of these votes -- matt: a bunch of things have been demanded by the international audience. hans: that is why they will be difficult for syriza to vote. in september there will be the series a party can't -- the syriza party conference.

there will always be a crisis. thereyou will get thursday. great restaurants for you. sittingike a great time around brussels, waiting for -- hans: getting some color from -- is there the possibility of him moving to a different party? hans: he is. 40 he is governing without or 39 of his mp's who voted against the first one, 36 voting against the second one. technically, syriza has an outright majority. erik: it is an odd situation for people outside greece to understand, a prime minister sweeping into power on promises of ending austerity. those has had to reverse promises, still maintaining

popular support. hans co. -- hans: mr. tsipras is obviously leading the greece center. he is a pragmatist, maybe, more so than people thought perhaps. hans: when you look at what he got elected on, you can be an ideologue until the very end. --got elected on two things the austerity push and a pro-sovereignty push. the at everything he is doing. these are conditions demanded by creditors, 35 of them -- no sovereignty. and this is crippling austerity. the crippling austerity that he came hand against, and he will implement it. erik: in the median term, whether syriza abandons him or not, there is pressure to get all of these issues passed. machine1 is the sort of

-- is the sort of mushy center. day, at the end of the demanding that people do not retire at 53. erik: that is absolutely unreasonable. hans: you are wondering what greek island you can pick. matt: i need to check all of them out first. hans nichols there, our international correspondent who is normally stationed in brussels. erik: we love the fact that he is in new york. still ahead, auto sales plunge. prices.carmakers slash ♪

erik: another sign of the slowdown in china's economy -- auto sales dropped to a 17 month low after automakers slashed prices. it is bad news for ford, for

general motors, for bmw, toyota. you have been looking at this for two weeks, so i give you credit for being well ahead of the story and the curve. is it good for anybody? matt: it is good for local chinese automakers because they sell a lower-priced product. chinese consumers had switched to that to some extent, and you already had a couple of warning signs. but now automotive sales have fallen to a 17 month low. erik: we need to connect the dots here. value of the yuan, all of a sudden these imported vehicles become that much more expensive. matt: or the manufacturers make that much less money. keep in mind a lot of these manufacturers are not shipping these -- erik: they are over the line on the prices with the yuan. partnersy are minority

in most cases in a car sales company. general motors works with aic over there. they do not ship cars and sell them, they are manufacturing them there. they are engineering them there. they have a 49% share of this joint venture ship, so they will not be able to raise prices. they are just going to be bringing less money home. that is the bottom line for a lot of them. foothold inger china than four does, but ford is committed as well, billions of dollars of resources in china. apple,e can extrapolate other luxury goods makers. that is it for me. "market day" continues. ♪

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than dsl from the phone company. call 800-501-6000 to switch today. perks are nice. but the best thing you can give your business is comcast business. comcast business. built for business. matt: welcome back to the "bloomberg market day." i want to give you a look at this morning's 10 headlines. starting with jet push, he will step -- starting with jet push,

-- he will say the democratic front runner, hillary clinton, shares the mistakes that led to the rise of islamic's eight. mrs. clinton is making two stops today. she will make a town hall on her college affordability plan. and rick perry has stopped paying his campaign staff. he is behind in the polls and his fundraising has been sluggish. plans to pickpack up some of the slack for him. mcdonnell saysb he will appeal his corruption conviction to the u.s. supreme court. that is after a federal appeals court refused to review his case. last year mcdonnell and his wife were found guilty of doing political favors in exchange for gifts. asy are free from prison

they pursue appeals. a new etiquette della mefford diners. should you tip the waiter at mcdonald's? a server will not take your order. you have to ask for your food at a kiosk, and then the person brings it to you. maybe not the same as a waiter. a look at take markets and see what this chinese devaluation has done to u.s. stocks. they seem to be recovering somewhat. you saw 1% declines earlier, now less than that. percentage on the s&p 500. as far as currencies go, let's look there as well. the dollar index unchanged. the renminbi spot is up 1.9%. coming up on "bloomberg market day," growth stocks have been outperforming value stocks all year. why that trend might be

reversing soon. in the white house race, donald trump seems unstoppable. no matter what he says or does, he contends -- he continues to win at the polls. google's new holding company, alphabet, means big structural and leadership changes. page,ara works for larry and his -- and google's new ceo. google will become just one part of alphabet. the company created a new holding company called alphabet, and that will include all of google's businesses, the namesake search engine, and so on. investors seem to like it. shares were up as much as 6% today, a 5% gain. jeff jarvis is the author of "what would google do?"

an editor for bloomberg news is with me on set. a surprise, or did you expect some kind of move like this? jeff: i was surprised and how it happened, but in hindsight it is easy to see the brilliance of it. google was being typecast as a search engine company, and for a long time it has been much more than a search engine company. it is a personal services company, and to maximize that value, the other thing that larry page is doing, it is hard to find a connection there. to separate them off makes sense. matt: why do investors like the move today? >> the one word moving through all of the research is transparency. we will get more detail on how google is spending his money, where is the profit coming from, where are the sales coming from?

that is definitely a theme. the other thing you need to focus on is the idea that now you have a bunch of new businesses that are going to be easier to set apart and possibly , ipo, unlock sell the value of these businesses. if you are a google shareholder, you have not just court businesses, but other businesses. some will fail miserably, but some will do really well. that is an investment opportunity down the road. what things can see are worth and how things are doing, and if things are up for sale, how much you could get for it. my first thought was that this would help them deal with eu regulators. it has been a real pain in their butt recently, and they will be able to focus regulation demands on certain units, won't they?

the euron it comes to techno panic that is going on there, my fear is that they will announce a "oh, my god, they are taking over the world." about thean article world government of silicon valley. there was a lot of panic that goes on out there, but i hope that larry page can raise to the strategic -- now raised to the stratosphere, they can focus on solutions like saving lives on the road. ofwill trawl the attention regulators in europe, i am sorry to say. matt: they are just making the world a better place. they had this new division, and they had a reference to that in the letter. .om: they have a sense of humor but i share jeff's optimism, that i do not think that the google crackdown in europe -- i

do not think this will make it any harder or easier for google. do you share his pessimism? tom: i think the eu is looking at practices that the technology has moved on. the eu is looking at practices that have already become outmoded, and unless they fundamentally change google's practices, you will not see a big impact from what is going on in the eu? jeff, what does this do? i heard a silly rumor that this ars engineers to keep sund pichai. also, what does this do for ruth? thejust came over, had now whole world is shaken up. is she behind it? jeff: i would have to believe that she was an architect of this. , he has doneichai

a brilliant job with google as a whole and is mired in the company and outside the company. to havebles alphabet ceo's of multiple companies to recognize them and give them the rewards that enable them to take over their brand and grow. pichai has only been there for 10 years. i read some of brad stone's piece this morning. the -- will this unlock time to create an autonomous car? tom: that is the idea. you get to hand over the court businesses somebody who has demonstrated an expertise in that area. it lets the visionary cofounders build new businesses, cofound new businesses, gobi entrepreneurs within their own business but not lose the

oversight they demonstrated that they are able to do. matt: will it make it harder for you and the other journalists at bloomberg news to do their jobs? the shareholder structure was getting murky, and now they will make it more -- you can do a lot more magic now. tom: we talked a lot about transparency. that first day we get those earnings, it will be difficult for us business journalists to sort through. how transparent are they being? do we have insight into each pn sheet? the balance i would like to talk to some accountants to walk me through how cool needs to outline their numbers to really give investors what they need. -- how google needs to outline their numbers to really give investors what they really need. matt: tom giles, thank you for joining me. jeff jarvis, author of "what would google do," thank you for your time. still ahead, under armour

outperforms value stocks the most this year it -- this year than in the last six years. ♪

matt: welcome back. i'm matt miller. time to get you caught up on market action around the world. we start in asia. china is entering a new currency regime after devaluing the yuan by the most in two decades, while at the same time announcing it will strengthen the market possible -- the market's role, getting the imf to include the rim and be. sent to its was biggest one-day loss since china unified rates in 1994.

it is calling it a one-off adjustment, and they plan to keep the you want at a stable and reasonable level. do this now? july exports fell more than expected as the japanese yen had been depreciating. the yuan had been relatively stable, page pretty much to strengthen the u.s. dollar. stephen engle in hong kong. i want to get to mark barton in london for the latest on how this is affecting your. biggest -- china's biggest evaluation is casting a shadow on european stock markets. your shares are probably declining if you relied on china sales. look at the decliners in germany daimler, auto related shares falling by 15 billion

euro today. ners have also been hit hard. chinese importer, these are the big three global commodity producers. billiton, anglo american -- $9 billion of value has been wiped off those kinds of companies. greece -- we have a deal between greece and its creditors. interestingly, last wednesday when greek stocks hit a thee-year low, since then athens stock exchange has rebounded by 11%. that is the best-performing global stock market in that period. greek bonds are continuing to rise. yesterday, it dipped below 20%, down to 14.78%. today monday moving -- today,

money moving into the haven in light of the chinese surprise evaluation. greek yields, spanish yields, u.k. yields, italian yields, and german yields are all declining today. a lot attention has been on the dollar. the euro is the best-performing major currency against the dollar. it is up by .1 of 1%. it is all about those commodity currencies that are bearing the brunt of today's losses. matt: i will be talking about those commodities in a little bit. let's look at the major averages in new york. they are echoing the fall in starks -- ande's europe's stocks. the s&p 500 is down by .6 of 1%. the dow is down .8 of 1%. the dow is lower for the eighth time in the last five sessions.

sparking concerns across global markets that the second-largest economy is headed for a deeper slowdown here it let's dig deeper and dive into my terminal. we can see how each s&p sector is performing. utilities and telecoms are the only ones in the green. , the usualis lower suspects -- energy and materials, materials being the biggest loser, down by 1.7%. the energy sector is down 15% in 2015 alone. let's look at some specific stocks and some of the notable losers on the day are these three general motors, tiffany, apple, companies that rely heavily on exports to china. gm is down 2.9%. downny is down 1%, apple 2.5%. gm is having its worst day in a

month after auto sales out of china fell to a 17 month low. matt: devaluing the currency does not help. ramy inocencio, thank you for that. let's get a check on the latest headlines. second-quarter sales fell for heinzfinds -- for kraft major businesses. the computer security company symantec is selling its data storage unit to the carlyle group, the deal valued at $8 billion. inantec brought veritas 2005. america's healthy eating trend is not hurting bacon sales, even though two thirds of its calories are from fat. one analyst said it is because people are putting bacon on anything.

those are your top stories at this hour. whether it is netflix, amazon, or facebook, investors have flocked to growth stocks over the past two years. technology remains the hottest sector for investors. some predict we may see a turnaround. mike regan is here. the debate of growth versus value is an old one. why is it a hot topic echo mike: the outperformance of growth stocks has been so pronounced. this year growth stocks on the s&p 500 are up by 5%. value stocks are down 2%. stock, the local growth stock index is 30% higher than the value index. year,growth stocks, one up 134 -- mike: that has been a trend the last few years.

the ratio growth to value has been higher since the growth stock bubble. matt: i am just waiting to see svx, the growth stock index. mike: google again. matt: is it counted twice? mike: there are the two share classes, but ultimately it counts as one. will it reverse? .here are some it is a hot topic of debate among strategists that i read. one has a note out saying this outperformance is bound to reverse eventually, and it has happened in the past. he pointed out some examples. others say not so fast. one of the factors a lot of people think will make it reverse are higher interest rates.

he looked at growth stocks on days that interest rates rise, and they outperform. matt: but what happens if we get into a global currency war and try to competitively devalue currencies amid a global economic slowdown? mike: growth stocks are outperforming today, but it is obviously apple. apple is thesion, thing that sticks out. it could be will considered a value stock. you: i was going to ask what the biggest value stocks are. mike: exxon has gotten beaten down so much, it is the biggest value stock in the s&p value index. some of the other ones -- berkshire hathaway -- the question with exxon is, is it a value stock? so much depends on

china and that sort of thing. .t is an interesting debate whether or not this outperformance can continue depends on so many things, china being one of them. looking at china -- apple is looking at china as potentially the biggest market in the world. there are also curveballs that can be thrown at china. matt: we saw a pretty big curveball today, the deciding whether they want to raise prices or exchange fewer dollars. bloomberg's michael regan. still ahead, the unstoppable donald trump. no matter what he says, his poll numbers keep going up. ♪

back to thee

"bloomberg market day." donald trump is dominating the gop field of residential candidates still, even after the remarks he made about megyn kelly, remarks widely perceived as sexist. in a fresh bowl of republicans, trump is lashing the competition, followed by ted cruz, ben carson, marco rubio, and carly fiorina. iowa, scott walker and ben carson are tied for second. no matter what he says, trump is holding steady. our bloomberg politics reporter is joining us from washington this morning. is it possible that trump gains because of the remarks, not in spite of the remarks? that may be a large portion of republican voters applaud his anti-politically correct

statements? that is exactly right. i would call him the first post gas candidate we have had. post-gaffe candidate we have had. these are the kinds of things that would have sunk pretty much any under candidate -- any other candidate we could think of. the fact that he is leading in four polls after a lot of people were writing his obituary makes towonder what it will take put him away, and whether we could look at a candidate who will make it to the primaries and win a few states. matt: i noticed during the --ate that his weakest point i thought one of his strongest points was his reaction to megyn kelly's criticism of sexism. one of his weakest points was when he got political, when he was pandering to the base and saying he had evolved on his

road choice stance, now load longer being probed -- now no longer being pro-choice. if this continues, will that be a sore point for voters? >> it is possible. another weakness he has is the issue of religion and god. he has admitted he is not much of a religious man, and that is obviously important to the republican base. but a number of voters are drawn to the fact that he is actively politically incorrect, and he is playing on anger and resentment that exists within the base. so far nothing has put him away, but we will find out. it will amaze and surprise a lot of people if he does make it. out of the primaries and wins a few states. matt: i am sure a lot of democratic voters are sick of the pc insanity in media today. do you think other candidates

will replicate this? two other candidates have to get as out there as donald trump in order to get some love from the voters? >> the only candidate who is trying to be on a similar page and not attack donald trump is ted cruz. he is not a politically correct person. he rails against the media frequently. but other candidates, specifically jeb bush, rand paul, they are attacking him, criticizing him. they do not want to be associated with him. their brand does not jibe with his rant, and they want to make a separation from him. erik: thank -- matt: thank you so much. we will have a quick break and be back with more. ♪ matt: 11:00 here in new york,

8:00 in mountain view, 8:00 p.m. innd

beijing. google is learning its abcs. outputg its name to that, and the search business will be one of many divisions. a former colleague of circuit brim will tell us what this means. brimm.erge breaking up a scheme that stole the corporate press and out ahead of the release and traded on the nonpublic information. timebomb, graduates currently own nearly 1.3 trillion dollars, and candidate hillary clinton has a plan to make higher education more affordable. republican say won't make any difference. matt: good morning. i'm at miller. pimm: i am pimm fox. --