china devalues the currency for a second day. will this launch a worldwide currency war? the student debt timebomb is ticking. graduates currently on three -- $1.3 trillion. republicans say will drive the prices up. pimm: where are the world's luxury travelers headed the summary? we will hear from the ways to share luxury residences. ♪ ♪ good morning. i'm matt miller. pimm: i am pimm fox. a look at how stock markets are faring right now.

beginning with u.s. stocks, a tumble, sl up. 3%.dow jones loses point a lot of that related to the announcement overnight buys the chinese central bank that they are lowering the value of the yuan, currency, and that is something it's a lot been many docs, particularly those in andng, body -- commodity mining good sector. we conceal what is owing on in germany. the dow at 17,175. lostast two days it has 450 points, a little more. the dax is at 10,924. the dax, a smaller total number but has lost a hell of a lot more in the past two days, about seven points. european stocks are getting crushed while we are down significantly. volkswagen,ercedes,

all of the companies that rely on china for sales related to luxury vehicles. so they have to rethink all of that. also, when you look at luxury h sharingers like lvm in the downturn because there is concerned there will not be as much economic growth in china. matt: are they growing 7% when vfw and general motors are growing shares their? that is a question we will get later on in the program. top headlines at this hour. rushing to the exit. shares of alibaba down as much as 7%. the chinese e-commerce company posting sales that rose up the slope was a in at least years. slowest paceat the in at least three years. earlier alibaba's chief executive says the company is poised for growth. revenue exceeded

pc revenue. i think it is a good transition to mobile, and we made a big investment and the largest consumer retail chain. i think all of these signal only enjoy a healthy growth, and we provide more value to our customers. alibaba are down 35% since they hit a record last november. macy's reporting lower the next record sales and profits and cut the guidance for the remainder of the year. resultsf executive said were hurt because of a drop interest pending and troubles and congestion at west coast ports but rex improvements in the second half of the year. they relied on inventory to clear seasonal inventory. matt: no real surprise the

combination of kraft and times big.txt,ing in eliminating 2500 jobs in north america, 5% of the combined work or's. it was driven by berkshire hathaway and 3g capital of for costoth known cuts. shares of thinking technology company fidelity national are of the most in more than three years. the company has agreed to buy software maker sungard. the deal is valued at more than $9 billion if you include debt. somewhere makes software for financial institutions and owner by seven private witty firms. -- sungard. here in new york the latest deflategate hearing should be getting under well. roger goodell and tom brady arrived a little while ago. the judge to talk about settling the case. brady has appealed the suspension in the matter he

allegedly asked people to help him deflate football in order to win the super bowl. that will be exciting to follow, but i love the story. pimm: gina smith getting punched. matt: unbelievable. he will have surgery on a broken jar. punched in the face by a linebacker. over a $600 just it. linebacker fired in smith is out. they have to hire someone who went to harvard as a order back. pimm: maybe he will throw the ball against the patriots. you never know. ofing up in the next hour the bloomberg market day. real estate developer and miami dolphins owner stephen ross betting big on drums. we will explain the new million-dollar project. student loan debt is far outpacing credit card debt in the united states. hillary clinton has a plan she says will make college more

affordable. what is the price tag? still plenty of time to go on a summer travel vacation. we will take a look at the hottest luxury destinations to find out what it will cost to get her taste of real local flavor of the high-end. we will hear from the president coming up on the bloomberg --rket day." matt: sign china's central bank devalues the currency for a second day in a row, this time had to intervene to hold it back a little bit. european and equity markets also lower for a second consecutive trading session. joining us is kevin karen, the market strategist at people nicolas. explain, will this is some left we will talk about for the next month or so or very short-lived. >> i think it will be with us for a month or so, which in my

view is very short-lived. what we saw a year ago is when we looked at the broad range of economic indicators, we saw a slowing in the global economy, equity allocations throughout the year. s move confirmed that economy still weaker than what had been next acted so the below 7% growth number is becoming more realistic as a number for thea, and what it means is expectations for returns this year would be that her. indeed what we see are at the markets basic reflect on the year. you, you talked to a lot of economists and forecasters, do people believe china's gdp grew at 7% the past quarter or have you heard anyone say it is even shrinking? i think the standard line as it relates to china is very

closed when it comes to china, theof the arguments about basket. it is a closed economy and that it then not only to capital to data. six tens in order to get a sense of what is going on in the economy, most do not have the same data coming out of china from other countries around the world, and it is problematic. 5% or 7%, and needs to be taken with a grain of salt. move suggestst the economy does look fairly weak. you said you have recently spoken to investors and recommended them to be more cautious on their money. what are you recommending they do with it yet though >> we have looked for license we can move up the quality spectrum. from mid-2012 the higher volatility and equity issues

have led the market. this tends to move in cycles. we think the tortoise will now leave the rabbit to some extent. for the past six months or so we are collected more companies steadyve those characteristics. as far as asset allocation portfolios are concerned, underweight it is since last year. shorter on the duration in terms of the bonsai. matt: what do you expect from janet yellen now? the federal funds forecast has been drastically reduced. now 42% chance we see in interest-rate increase in september. >> that is true. they have a couple of different things. when you look at the , no one knowsate where the natural rate of unemployment is. let's say it is 5%, we are getting close to that.

some other measures are moving along as well. when you look at inflation, and nation at rotations have been falling recently. that would give the fed the suggestion they might back away. i would expect to see a rate increase. probably a flatter chitra three up from here. -- flatter trajectory from here. pimm: are you still recommending to buy shorter u.s. treasuries? we are shorter in our duration portfolio then our benchmark for. . the we look at growth in united states, growth piercings to be pretty good. we think ultimately the longer turn -- longer-term yields would gravitate higher overtime. therefore, the call has been to move to a shorter than benchmark duration of the asset portfolio.

what do you think about the situation going forward in china? will it do any good? at the end of the day, all of the sets china is taking to stabilize the equity market in their economy. >> i think this will go on for a while. if you look at china, they have a lot of work to do. they are rebalancing the economy toward a services economy. they have a lot of work to do there. when you look at where the property markets are, we still think you will see stress there. the devaluation does is it provides a little bit of a boost to the economy. a little bit of a euro versus the dollar earlier this year giving the europeans a little bit more competitiveness in terms of their currency, basically the same thing with the chinese. the real question, what does the rest of the world do in response to that gecko based on that, it

will determine how effective it has been for the chinese. matt: appreciate your time. i know you're busy amoco thank you very much. pimm: for the first time in 20 years cisco will report earnings without john chambers at the home. a preview of the results next on the bloomberg "market day." ♪ ♪

matt: welcome back to the bloomberg "market day." i am matt miller. i am pimm fox.

a look at what is happening in markets right now. major indexes are down for the second day running, and they are all as session lows following asian and european shares. taking a look at the numbers. the s&p 500 down 1.2 5%. the nasdaq the biggest loser down by one point or percent. a reactionlarge part to china's currency devaluation over the past two days. the dow has fallen to a six-month low. it is on track for the worst today drops in late january. the s&p seeing the worst today drops in january. the nasdaq down to a fresh one-month low. dive into my bloomberg terminal. at how each of the s&p sectors are performing. nine of the 10 sectors are losing ground. seven of the 10 are down by more than 1%.

this is led by the banks as well as telecommunication sector. turns out for everyone, eight are trading lower. biting at winners, a little lower to find. wayfarer of. wayfarer is an online home retailer for furniture. reported earnings narrower than it did. wayfarer x acting a lot -- a loss of $.27. turned out to be a loss of $.15. hitting an all-time high and looking at the best intraday game this year. that is all i have time for. matt: thank you for that. a lot of red. looking at the top stories crossing the bloomberg terminal. wildfires charging through several states in the west. moving higher as burned at least 22 square miles and only 5%

contained. the second time in two weeks residence in the lower leg area have had to leave their home. hillary clinton has agreed to turn over the private e-mail server she used while secretary of state. the democratic front rudder has told aides to get the e-mails to the justice department. last month. and agreed to by the financial times newspaper and now getting completely out of the business of publishing. 50%eing to buy -- sell a stake in the economist magazine for $731 million. the buyer, exor, the investment company of the company that controls fiat chrysler. those are your top stories. ofm: after two decades cisco's chief executive, john reinsrs turning over the to john roberts.

investors of course looking for the company's outlook for the rest of the year. now, we get a preview from bloomberg's editor at large, cory johnson, and san francisco. what can we expect to hear from cisco today? >> this could be an interesting earnings report for cisco today. not just because we have a different person at the helm, but when big tech companies sometimes we see germanic changes at the company. i look to ibm as an ample where the tenure tends to be 10 years. the end of tends to be celebration and lots of really good orders, and the new ceo comes in, and sometimes within , they will spoil the party and point out problems and change some goals, and the company will save that -- at least that company typically has problems when it changes ceos.

ibm, you seerd of different stories. you see cisco doing a lot better . hp and ibm not doing what is well. turnaround thea past few quarters but we went from negative sales growth shrinkage to actual sales growth. that is a positive thing for the company going into the quarter. maybe that was just a way for john chambers to ride off into the sunset and a happy manner. today's quarter could be interesting not just what we hear about the quarter ended in june, and also, the end of the all year, but what they will say about the coming quarter and what they will say about competition. doesn't really matter whether there is a new chief executive, or is this a company mainly run by its customers to go in other words, big move and customer orders. does not matter who is at the helm of cisco. a couple of dramatic factors

affecting the business. things that cisco has never seen before. most specifically, companies like apple, face, google and amazon building their own routers, their own tech knowledge ease that are specific focus for exactly what they want to do. cisco making the argument they can do the same kind of thing. the other thing they have got is a really rough for -- rapid growth in the censorship of things. sensors everywhere. whether it is your apple where or whatever, the sensors on wind turbines, all the sensors and ours. this is led to a dramatic increase in internet traffic, and the kind of traffic in measured is very different. cisco with the new opportunity is facing a whole new slew of competitors. private companies, companies back i venture capital have paid this -- play this before but a continual challenge. the way they have paid -- played in the past is big acquisitions,

using cisco stop to pay for the acquisition and. whether that is the story of the future, we might find out tonight. matt: john chambers has been there since like 500 a.d. and we all love to listen to them in the business community really respects him. what will be his legacy at cisco beyond the internet of things, etc.? character and culture, what is his legacy? i think if you look at what the competitors were, at any stage of this company's life, they are all gone. cisco has dusted all of them. we don't talk about 3com anymore. we don't look at juniper having grown to be what cisco was, although that was the prediction 10 years ago. this company has managed through growth, acquisition and time with management to remain at the center of technology. technology has grown

tremendously. all you have to do is look at the competitors left in the dust to see what john chambers did. pimm: cory johnson at the center of our technology world and san francisco. ross expanding his repertoire getting into joan racing. we will show you what that is. -- drone racing. ♪ ♪

matt: real estate developer stephen ross is known for its miamirofile project and dolphins but now adding drone racing to the list. providing $1 million to the first round of funding to the drone racing league. my co-acre for the next hour -- for the last half hour index two minutes, pimm fox is here to

tell us. pimm: you thought it was going to be a point to point race. matt: i thought it would be like to read full played races in london. pimm: olivia: this will be like motocross racing. the idea is not only to be able to participate, but also to watch it and control it remotely. you know the success these mass had, you sites have fill madison square garden with thousands of people watching literally other people play video games. here is an opportunity to do this, but with a live drone. it looks incredibly cool. hopefully there will be stands. in a building like this, not a

lot of people can watch. pimm: you put cameras on the drones, the you can do it in a variety of locations and do it with the cameras. now you can be anywhere you want and watch this, and maybe even control it from your mobile device and participate. matt: you definitely want to see the nerves controlling these devices. hopefully they get some sort of electric shock when the rash or some sort of real, physical risk i think should be included. these drums are very expensive so that would be scary. thank you very much. still ahead, we will talk about hillary clinton and her plan for education. ♪ ♪

pimm: welcome back to the bloomberg "market day." im pimm fox.

taking look at the top stories of the moment. m fox.m pim concern about china causing the global selloff and stocks. the currency lock -- lost cut in half during the final 15 minutes of trading. this comes after the bank intervened to prop up the currency. meanwhile, asian currencies though, as did noble equity market. the journey to greece, one step closer to getting a new 94 billion dollar bailout. the european commission says a technical agreement has been concluded and the greek parliament, as well as lawmakers and other euro area countries still have to approve the deal. willarea finance ministers meet in brussels friday to discuss the terms of the bailout according to two people familiar with the ongoing negotiations. the's is going to look for discount shopper. they will open a series of stores called macy's backstage. earlier, chief executive terry

lundgren explained the idea. >> a separate company, a separate business. we will be flying off price merchandise and taking them and transferring them to different stores. opening up six this fall season. we will compete with tjx, nordstrom racks. pimm: meanwhile, macy's reported sales and profit lower than analysts estimates and offer discounts to move out merchandise. arrival delayed because of congestion at west coast port. here is something you don't see every day. 96 million black plastic balls .oming -- covering a reservoir they were put there in order to keep the water from of operating and causing the chlorine to react with the sunlight to create domain. 30 six cents and the

flex ultraviolet rays. these are designed to 300 million gallons of water evaporating peach year. turns out they are much less expensive than putting a tarp over an entire reservoir. those are your top stories at the moment. at the moment markets are closing in europe. for the latest, we go to mark arden. mark barton. mark: the biggest drop of 2015. billionates to 470 euros. these companies are the companies affected by the chinese devaluation. they derive a sizable portion of the revenue from china. bmw autos, the biggest two-day drop since november 2011. 30 billion euros have been wiped from this in today's.

it has fallen by 11%, 10 billion of value disappearing. glencore, one of the worlds biggest minor seeking 5%. as a group, the two-day drop in two years, 16 billion euros of value has disappeared from the european mining industry in the past couple of days. it is not just about china today. three other big movers across europe, henkel lowered today. they reported second-quarter earnings that missed estimates. 8% lower today. fearing they will need to raise more funds from shareholders. soap? goldmang sachs recommend they sell shares of unilever. -- dove soap.

because of china, all 19 industry groups on the stoxx 600 finished the session level or. that is the story. back to you. pimm: thank you very much. coming up here on bloomberg "market day." the international energy agency says global oil glut will last through 2016, at which point it will reach a 17 year high. the dating app called tender creating a social media fire. suggesting it has caused a dating apocalypse. we will give you details. we will talk about the shakeup in the financial technology business. fidelity will buy software maker sungard. deal ends plans by the private equity owners to take the company public. all that and more coming up on the bloomberg "market day." hillary clinton wants to make

college more affordable for americans. she announced her new college compact this week. the plan aims to make for your public schools more affordable and two-year community college is free by increasing federal ending. the plan would allow people currently repaying loans to refinance at lower rates. joining me now to discuss the merits of her plan is a senior vice president and publisher of advisors mays -- based in las vegas. i have wondering if you could describe your reaction to hillary clinton's plans for a fairlyucation? >> complicated plant with lots of details and hard to describe in just one sentence. significantide a influx of money to make college more affordable.

pimm: talk about the plan to reduce the debt burden. specifically how you can refinance outstanding loans. >> about one third of the money will go to allowing existing borrowers to refinance student loans at current rates. borrowere the typical between $10 and $20 per month. over the life of the loan about $2000. it does provide some form of financial relief. it i would much rather see it going toward making college more affordable. the problem is the amount of debt, not the cost of debt. if you have more money going toward grant, you are reducing the amount more stored in -- more students borrow. a look at that compared to credit card debt. $1.2 trillion problem when it comes to the student debt market. is this something that can be spent away? borrowers graduate with

a reasonable amount of debt. it is a small number whose debt exceeds the annual income. for those borrowers we have every payments as safety nets that reduce the monthly payment on the affordable level. then't think we are yet in crisis. maybe one or two decades we could be in a crisis, but not right now. average debt per graduating student somewhere around $35,000. you mentioned cap and the amount of debt repayment, a certain percentage. i know the clinton lan is about 10% of income, correct? -- clinton plan. correct.s it is 10% of discretionary and income. pimm: as far as hillary clinton's proposal goes, are there certain amendments or changes you would make in

addition to what you have already described as offering more grants as opposed to more loans? all of the plans to make tuition free or nearly free cell suffer from of fatal problem, they have funds. none of the plans will be voted on and abruptly-controlled congress none of them will be voted on, let alone an active. there are plans -- ways to make the plans more palatable. there is a lot in the plans that is attractive. they have risksharing and improvements in accreditation. they don't reach them, as soon as they reach to pay for mechanism, they stop reading further. pimm: that has to do with capping itemized productions, right? >> limits itemized reductions

and then -- deductions and set --an artificial cloud artificial deductions. they are playing politics as opposed to the policy. you: if there was one thing could have accomplished by the end of the year as regards to paying higher education, what would it be? the averageriple held grant. it has lost a lot of grant since it was started in the 1970's. --i would triple the average pell grant. the number of students graduating college. pimm: senior vice president and publisher of " advisors." still ahead, would you like to go to italy, mexico, colorado, or maybe stay in your own luxury home? one company offering deluxe sharing for deluxe

travelers. that is next. ♪ ♪

pimm: welcome back to the bloomberg "market day." i am pimm fox. nike and yum! brands are among the companies feeling the pain today because of their exposure to china. both stocks trading lower, as you can see. the company gets about 50% of its revenue from china's business. sales from11% of its china. also, the obama administration does not plan to invite cuban dissidents to the historic flag raising event at the u.s.

embassy in havana friday. in that, officials tell bits associated press john kerry will need more quietly with activists. the united states and cuba has restored diplomatic relations after more than a 50 year hiatus. a rocket carrying student experiment has been lost -- launch from fred genia eastern shore. virginia's eastern shore. it does send parachuting into the atlantic ocean after writing to an altitude of about 97 miles. those are your top stories at the moment. luxury travel is changing. according to the high end a case in class, the hottest luxury tuscany,ons include italy, mexico and hawaii. here to discuss how the services the president,

david callery. thank you for being here. tell people, what is i nspirtao? >> we are a high-end luxury travel income between. these are the companies -- places you want to go to. they are unfairly -- unbelievable. beachfront in the beach locations. , shutre unbelievable great kitchens, swimming pools in the backyard. you will definitely want to go to one of them. having said that, the idea of renting a home for vacation is not brand-new. this has been around for a while, whether it is the timeshare industry or company such as airbnb, so what business?your

there are three things. the first is the level of certainty. you could not but a home into the portfolio without us looking at every aspect of the home. pimm: so david callery actually goes out or a person of your team? person who looks at every single home. we have a very high standard. usually when we pick a home, we add additional $50,000 of upgrades to the home that brings it to the standards our client six act. services number one. the great homes are unbelievable, but we wrap it with our service. personal vacation advisors that know everything about you. where you like to travel and how you like to travel. what your kids like to do. they get to know you on a very personal level. we have teams of people in the dust nation that service you once you are there for your trip. service is the second big differentiator. the third is value. we are doing long-term leases with long-term real estate

passes. we are able to pass these on to the members. definitely certainty, service and value are the three differences on a lot of the companies out there. pimm: we started talking about the areas most popular. for example tuscany any, italy, mexico and hawaii. cost of goingthe to tuscany if you wanted to rent one of the portfolio homes for a week? >> it really depends what type of yearly -- time of year you go. in the summer anywhere from seven hundred $50 per night. off-season as little as $300 per night for a home that might be a 4000 square foot home in the tuscan pimm: area. pimm:any limit to the number of states? -- styas? club membership

model. try was much or as little as you want and only pay for the night you use. it is very different from some of the older models where you buy for either days or fractions. wi-fi wereguessing being connected is things that some of the customers actually want and not available, it is a game stopper. single home has wi-fi because members want to stay connected as you say. food andt about the other extras? can they be brought in as well go >> heart of the service portfolio is our people building out the list of groceries. when you get to the home, it is fully stocked. we can hire a private chef come up many of the members do. pimm: is there one house, one location that you love? >> my favorite location is probably call both.

i love the weather. homes are unbelievable, and my kids always have a great time. pimm: well done. gives us something to look forward to. still ahead, the oil glut set to continue next or until it reaches a 17 year high. what is the evidence behind this assessment? we will find out next. ♪\ ♪

pimm: according to the agency theal energy oil glut will last through 2016, even with the strongest demand growth in five years. record inventories will it be and further and got kyle's not diminish until the fourth quarter next year. this all coming from the iea. my co-thinker is betty liu and here with more. what about the analysis? think people are missing a couple parts of the anticipatede highly

ia isof what the ie going to put out. if you are an oil bear you could look at this and say $30 per barrel oil is here to come, maybe even $20 oil. you do have a record amount. i think what they are predicting is 1.4 million barrel supply per day. pimm: we know the saudi's are increasing output. you have what is going on in the united states with fracking. >> absolutely, that will continue. if you are a bowl, you might say might we hit a peak in supplies? re a bull.a because part of the

report people have not been talking about is consumption of oil is growing at the fastest pace in five years. it makes sense. you have lower prices that will generate more and more demand for oil. in 2015 we are on track to double the consumption of oil in some part. so we are seeing this stronger and stronger price. find 2015 be the year you see the oil bottom out? that is what we will try to figure out when we talk to the senior analyst. it looked as if 2015 we will see demand grow to 1.6 million barrels per day, which is up from the projection of 200,000 barrels per day that we have in the park. that is a huge growth in consumption of oil. into thatill look coming up. time for today's options insight. we go to remy in the sincere. -- ramy. average is down for the

second day running and a little obsession lows following asian and european shares. this is in large part a reaction to china's devaluation of the past few days. the dow has fallen to a six-month low. the s&p seeing the worst two-day drop since january. joining me for today's options insight senior equity derivatives strategist at bgc partners. thank you for being here. want to talk about volatility. justix trading by 13% today. how are you feeling about this looking ahead with the china it hasitting the fan? >> been one of the tightest years for s&p. with the very muted price action, a little surprising to see such a bit for volatility, especially this week. theooks a bit rich, given

second quarter earnings that were fine. a good outlook for wage growth is job market booming. these are not the type of things that get the fix too high. -- the vix too high. matt: i know you have a little bit of a thing about the world -- word devaluation. in your note is that maybe that is not the word we should be using. >> i think it is a little bit premature. if china pursues trading into this range, and they continue to see moves of this magnitude on an ongoing basis, at some point appropriate. so far, i think it is an overreaction. it is an adjustment of the policy come is something a lot of people have been calling for four i sometime. not completely a shock. matt: where do you think the actual band should be looking at the u.s. dollar? >> i am not the currency expert,

but the imf said it had moved to decent range. this move seems like more of an adjustment, rather than bold move. the reaction has been incredibly extreme on wall street over the past week and has gotten a little bit overdone. >> you are looking at the ishares and south korea. don't often talk about that focus. why are you choosing that right now? >> south korea is a major trading partner with china. they are a competitor in international markets and lot of different industries. i think the move will put more pressure on emerging markets, especially east asia. this move makes an already bad growth picture for china look even worse. the trade idea is september. looking at finding the put spread. that will give you downside

exposure. you can put that on this morning for a net dividend of $.56. these options are not inexpensive by any means. the reason we are doing this, it is cheap enough cost position. very likelynk it is to get hit. in order to collect credits to offset the cost of the puts. volatilityou think will be ahead? >> flat to lower in the u.s. down your session lows. we will see if we can pull back up on those. the dow down 1.4%. that fact out what .5%. thank you very much, gerard woodward. we will be right back. ♪ ♪

is a 9:00 iny, it san francisco and midnight in hong kong,. betty: welcome to bloomberg

market day. equities in asia and the u.s. are down. the biggest two-day slide in asian currency since 2008. pimm: we will take a look at the shares of alibaba. at the lowest sales growth in at least three years. mrs. estimates in macy's missg -- estimates. pimm: good afternoon, i am pimm fox. liu.: i am betty it is another down day. stocks are in the negative territory. if you close right now, you would be