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 in negative territory

for the s&p 500. thatasdaq is the only one is still in the green so far for the year. stocks have fallen for the second day in a row. china has devalued its currency for the second day in a row. major companies at stake, young yum alibaba thinks an early trade -- oil and wasodities, commodities taken down by the concern about chinese demand. the latest report showing a less than expected decline in crude supply. going to see this oversupply situation last until at least the fourth quarter of next year. pimm: so says the idea a.

-- ida. .6%.wo-year yield .04%. year yield, two day look at a 3% gain in the dollar versus the chinese currency. it has been causing shockwaves in global markets. the euro has gained in strength against the dollar. we will take a look at the japanese yen, also strengthening against the dollar. let's take a look inside the bloomberg terminal at the biggest losers when it comes to china's devaluation. it has to do with emerging markets. in particular the south korean

12%,falling more than almost 14% against the chinese currency. export, this is going to make it more expensive in china. let's take a look at some of the latest headlines. shares of alibaba are sharply lower today after it's quarterly revenue missed estimates. sales rose at the slowest pace in three years. this is the chinese e-commerce giant. alibaba's chief executive remains upbeat. foreople come here lifestyle. so we are confident for the long-term growth and we will continue to closely monitor the consumer behavior and the china economy as a whole. but we are confident.

alibaba plans to boost its shares by -- with a buyback. we are going to have more on alibaba in just a moment. greece is one step closer to a financial rescue. there is a technical agreement on the bailout. other euro countries must still approve it. the bailout is worth $94 billion. the food giant today announced 2000 500 jobsn of in north america, five percent of the combined workforce. year --er earlier this at&t is raising its guidance on revenue. they are expecting all three to

rise in 2015 and in the next three years. it involves their takeover of directv. they expect earnings per share to top previous estimates by as much as $.11. stormthe blinding dust tore through phoenix, take a look at this. gusts topped 40 miles per hour. drivers were urged to stay home because visibility was almost zero. betty: look at that, it really is orange. now we will just call it a dust storm. those are your latest headlines. betty: we are going to look at the controversy that has broken out in social media that involves the dating app, tender. and this story in vanity fair magazine was a meltdown. pimm: we will also find out

about hedge fund manager, john paulson. -- happened before the bubble in subprime burst. we will tell you how he is profiting from the rising price of u.s. land. returning to the top economic story of the day, china did it again. china has led to the biggest since 2008, and the ripple effect in emerging , some say the federal reserve will take notice. betty: joining us now is carmen reinhart. professor, it is good to have you on. , whatanswer the question we're seeing in china is a plunge in markets across the board, is this going to plunge

us here in the u.s. into a decline or recession? carmen: i don't think so. depreciation and devaluation in the yuan is a necessary step to maintaining , ashealth of china unwelcome as the timing may be. i don't think that this is the are likely to see more depreciation. by and large, this is a currency that has had -- has been quite strong for a. -- for a period of time. i don't think this is earth shattering for the u.s.. weatheredas

significant depreciation already. betty: what you think the chinese are aiming for? look, right now, it is whetherquestion as to this is a transition to greater exchange rate flexibility or a roughly one-shot adjustment. the bottom line is that which ever it is, you have to put it into context. emerging market currencies in the last two years have depreciated massively. the yuan had held steady. the moves that we have seen actually major, compared to what most emerging market currencies have seen. that is why i think there is more on the way. speak a little bit more

about dollar denominated debt and what the u.s. dollar against the emerging currencies is going to do to companies and governments who oh money in dollars. carmen: this has been a recurring theme of mine. thatware of external debt is denominated in dollars, because all of a sudden, there are low levels of external debt and it could turn quite ugly. this is what emerging markets and china have been facing for the past two years. take a look at brazil. they are depreciation is over 50%. africa,columbia, south all big depreciation's. all withstood it, but it adds to the overall weakness in emerging markets that i have

been stressing for quite some time now. alongside declining commodity prices and the prospect of rising u.s. rates. inty: that last point is now deep question. can the fed raise interest rates, given what we have seen developed in the last 48 hours? carmen: i'm not sure the last 48 hours are going to be pivotal for the decision by the fed to raise rates. i think a rate rise is on the way this year, whether in september or closer to the end of the year. i think it is something that is going to be in the cards. chinesethink that the -- is going to significantly alter the timing.

the headwinds of the strong dollar is something that the fed has been weighing in for the entire year. professor, speak about the future of oil prices, and as iea says we will end glut in 2016. neither new nor short-lived. this commodity price cycle has already been unwinding for years now. i think it is dangerous to extrapolate the weakness in commodity prices in the future. points based on supply considerations are very much in the cards with historic experience. i don't thinkes,

this is something that we can extrapolate from. pimm: can you talk about the cycle of the chinese lending money to emerging market and their economies. ? stretchingave been -- stressing that point. chinese lending to emerging markets increased romantically , especially to oil suppliers in venezuela and ecuador. need forntext of their commodities given their investment boom. the boom is softening rapidly. one of the areas for emerging markets where i have been cautious is whether there could be a significant unwinding of new financing.

it doesn't even have to be any kind of dramatic pullout. but the steady growth in financing that we have seen from china to emerging markets, i think, is, in all likelihood, coming to a slowdown. especially for the commodity exporters. before we go, we talked about whether we could be slipping into a recession. you say we are not, given what is going on in china. are we still suffering from the overhang of the 2008 crisis. ? have we not cleared all of that out yet before we hit a rate rise? carmen: there are many compelling reasons why we onuldn't be jumping the gun interest rate increases. if we do see a move by the fed in september, i hope that the

will be very gradual. in other words, i think that the and generallation lingering former abilities from the crisis do not warrant anything other than a gradual approach to formalization. pimm: i want to thank you very much. carmen reinhart is a professor at harvard. still ahead, alibaba's earnings are out this morning. betty: shares of the company are taking a big hit. lots of worries about the slowing growth in china, we will have that next. ♪

pimm: welcome back to the bloomberg market day. there is a live shot from the roof. betty: another beautiful day. pimm: we are looking south towards the statue of liberty. i am pimm fox and i am here with betty liu. betty: let's get a look at how the markets are trading with ramy inocencio. ramy: we are headed almost back to where those are, they are down for the second day running. china'sin reaction to currency devaluation. the dow has fallen to a six-month low, trading at 1.25%.

sinces the worst drop january. the s&p's rad seeing the worst drop since january. come with me into my bloomberg terminal. , want to show you how this is not just in the u.s., but in the world. this wednesday, look at this. all of our major markets are in the red. european markets got slammed the hardest. dax is down by 3.25%. the hand saying is down. alibaba, the e-commerce giant. it has fallen to an all point low. 4.5%.own by about four

sales growth for alibaba in the last quarter was the slowest for the last three years. 8%.grew 2 note for you, shares have not gone below the 68 -- the $68 price paid in september. with china's devaluation, let's take a look at some other stocks that have large exposure to china. brands, including kfc, they get about 50% of the revenue from china.

is accelerating losses by more than 5%. all of these are among the biggest losers in the s&p today. the chinois china is down. bad across the board. back to you. the headline. we should get him to do it in chinese. it would sound less punishing. betty: he speaks fluent chinese. ramy: i will do it next time. ahead, macy's newest earnings miss estimates. we will hear from terry lundgren . consumers are just focused on finding the lowest prices. ♪

with itsy's is out latest earnings report. the retail giant missed estimates. emily chang spoke with the ceo and asked why they had such a rough quarter. terry: consumers are not responding to promotions. we thought we would do more business before and after, we took it out and business went away. we are talking about how consumers are very promotional focused right now. something that is interesting is the international tourists. you are not seeing them shop in the u.s. today, the dollar is so strong. we contracted by location. at macy's in particular, but also bloomingdale's, we are a strong retailer for

international consumption. stephanie: how do you combat that? strong't help the dollar. terry: here is the good news. i am going to anniversary that number. i think the dollar will stay strong, that would be my guess. we are entering the off-price business. we are going to have macy's backstage a separate company, separate business, we will be buying off-price merchandise and taking merchandise from macy's stores and transferring it to these stores. we are opening up six this season. we will compete with the nordstrom rack with options like that. stephanie: my fear is that you are feeding the beast. no one wants to be the soccer. i just bought a great

company which is very high end, full price because metrics and ute products. it ranges in terms of what the consumer is doing. beenll, the consumer has tending to trade down. i look at the consumer and think they are buying, but not in our category. they are buying cars, they are buying houses and furniture, mattresses, home improvement businesses are doing well, but they are not buying apparel and accessories in the way that we had hoped that they would. do you think the consumer looks like today? we are trying to get a feel for .hat they are do they have money to spend? have they decided to become savers? terry: it is gradual, but yes. it went from negative to slightly up, but in the second quarter, a little bit better.

still, it is anemic. they are spending in categories like i mentioned. they are spending but there are savings rate is very high. that is a good thing long-term for the consumer. if history repeats itself, and i believe it will, we will see that. there will be a shift back to purchasing in those discretionary categories and when it happens, macy's will benefit. pimm: that was the chief executive of macy's, terry lundgren. i will see you later this afternoon. betty: we are going to talk about alibaba, that story is up next. ♪

♪ ♪ ♪ get excited for the 1989 world tour with exclusive behind the scenes footage, all of taylor swift's music videos, interviews, and more. xfinity is the destination for all things taylor swift. betty: a gorgeous day in san

francisco, but not so gorgeous for the stocks of alibaba. welcome back, i am that he threw. new polls show that bernie sanders's presidential campaign is gaining traction. it puts him in a tie with hillary clinton in new hampshire. him.crowds have greeted worried about the chinese economy rattling markets worldwide, it is the second day of falling shares since the devaluation of china's currency. the devaluation shows the chinese government is willing to ease its grip on the economy to provide it. the hong kong exchange says it is able to step right china. >> this is the beginning of a new era. bere will potentially

treated by allowing full market forces to get full rates. this is clearly the most important step in that direction. betty: china's economy is mired in its deepest slowdown in decades. -- forced a drug maker to shut down a plant. drugs,nt makes inhaled like asthma treatment. xl pipeline is taking five times longer than average, most reviews take a year and a half. it has been on the board for years. hurdle today for tom brady. he is meeting with the commissioner roger goodell at a

new york courthouse. a judge is telling them to work out their differences about the four game suspension. those are your top headlines. coming up in the next half hour of bloomberg market day, we will and howut the oil glut those prices could fall before the market stabilizes. and there is a new ceo at cisco. he will deliver his first earnings report after the close today. we will talk more about what it could mean. what will they announce? alibaba is getting caught in the freeze. 20% -- 28enue grew at %. year stockd a four buyback. emily chang spoke with the ceo, daniel zhang.

away, give us the big take that he gave you about the chinese economy and this recent move with the devaluation. emily: shares are slumping right now, there is a big concern that they missed estimates. 34%.e expected to grow this was a suspension of their online lottery business. they said that otherwise, they would have beat or at least met expectations. i asked how concerned he was about the devaluation, and he expressed confidence. daniel: people come here not only for shopping purpose, what for lifestyle. are confident in long-term growth. we will continue to mostly monitor consumer behavior and

the chinese economy as a whole. but we are confident in the growth. just do a bigd china, sothe us by of they're hoping to reach a lot of people who are not online at all . they are reaching out to people in rural china to diversify the business. the experts are pointing out to us that there is still so much room for potential. they are not concerned for alibaba specifically. what was interesting is that the chinese government is certainly, as we know, tightening regulations. they are focusing on internet companies. now we know that the chinese government is looking at putting police officers inside internet .ompanies like alibaba i asked daniel zhang about that. daniel: we have a huge consumer base and serve millions of

merchants, and we work closely followe government to the government policies and regulations. we will continue to do so and to make sure that we are in compliance with the law in china. if thethe translation, government says we have to have a police officer in the company, we will have a police officer. betty: they don't seem to have a choice there. this could in snare more victims. from new ventures movies, and in israel. these movesers view and do they worry about growth? joining me now is jon medved. good to see you. emily just filed this report she did with the ceo of alibaba, and

clearly there are concerns about china and the growth. how is that affecting the tech world? we see no signs of maintenance here. this is not a week or month-long phenomena. china is pulling vast sums of capital. in our office alone, we are seeing several chinese delegations week. a billione as much as dollars at work in is really ventures from china alone. we already have another record first half of the year. the firstn dollars in half. i think everybody should be concerned about what goes on in china. innovation and new technology, especially to get their growth going. they will find it in israel and the silicon valley. betty: what are they investing

in? jon: real technology. we are on the verge of a 10-30 year growth based on some absolute game changers. we are going from 5 billion billiond devices to 100 . that will not be trivial. it will change our lives for the better. , but is some fear about it it is a big deal. we are investing in a company that does missile technology. it basically powers the iron belt. israel's antimissile program. they know how to handle millions think of electrical grids, water networks, smart cities. that is the kind of stuff that

china wants. they want drones and robotics. they are looking for the hard stuff. betty: are they going to israel first? he for silicon valley? i think they are doing it at the same time. multinationalplus r&d centers. now, to have an israeli product in china is good. it is a positive brand and we hope that continues. betty: given some of the -- what is going on politically in israel between israel and the united states, we have the nuclear deal that is going through congress, is any thehat hanging over business relationship between the u.s. and israel? in israel we have had a

political crisis every year since year zero. it has never been called. that is part of our secret sauce. we know how to transcend risk. buildinghe risk of companies, figuring out how to shoot missiles out of the sky, and it turns out at the relationship has never been stronger. i reject the notion of this people magazine. of politics. if the leaders don't get along, somehow they are in great danger of degrading the ties. it is not true. investment is at an all-time high. ,uman relationships are great and what we are seeing is simply dozens of large american corporations who until now have not been active in israel. betty: like who? general electric, general motors, and i can't mention

others that we are talking to, over 300 r&d centers. they invested over $6 billion. cisco,and facebook and they are all there. we are seeing this growing and not slowing down. betty: speaking of google. a big restructuring just happened there. being that he left been in the long, what didso you think of this restructuring? jon: i think it is great. they will now be able to focus on these high risk, high potential activities, autonomous driving vehicles or biology or , and it google ventures is great. it is great for the world and it

is great for google. google bought an israeli company called waze. google has made a big commitment to israel. afteris trend of going big technology, not the stuff that gets done in a month, but the stuff that takes years of research, that is what google is good at. betty: do you think they will be more acquisitive? they have always done that well. they take risks. part of the business of being a venture capitalist is taking risks and being able to fail. this companythat says get out there and go for the moon shot, i think the restructuring is good. betty: good to see you. still ahead, speaking of tech,

tender is not feeling the love from vanity fair. it was a lover's quarrel on twitter. we will be right back. ♪

betty: welcome back to the bloomberg market day, i am betty liu. let's go straight to ramy inocencio. we have all caps our eyes on asia. ony: we have kept our eyes asia, and now to new york. markets are down for the second day in a row.

devaluationency twice over the last two days is ruining the market. it is off of its lows for the day, but it is still in the red. down .75%. the s&p is already seeing its worst two day drop since january. dive into my bloomberg terminal. the 10ook at how each of sectors are doing. eight of the 10 sectors are losing ground. that has led by the telecom sector and the financial sector. four of the 10 are down by more than 1%. well, on the flip side, energy is up.

let's look at some winners. they are hard to find. starting with -- let's change course. china's slowdown, let's take a look at yum. it is down 3.8%. wynn resorts is down by 2.8%. 50% to an exposure of china and basically, wynn 3.5%, year ton 2.5%.hey are down its 10th best for day since late june before coming down just a bit. investors are racing to safety as stocks selloff.

it is touching its lowest level in three months. vix stocks selloff the goes the other way. they are rallying for the second straight day. 8.7%.up are on track for the best today gain. back to you. betty: it is the fear factor. remy, thank you so much. der has started a firestorm. sales surveyed the hookup culture among the users of the app. scorned, theyer posted more of -- more than a 12 30 tweet rant.

they have now admitted they overreacted. >> you just have to get it off your chest. this was brutal. this was smacking each other back and forth. tinder tweeted, and this took on a life of its own. they say there, was a possibility that they overreacted. but the story is interesting because it explored dating and how dating is in the digital age. how you go about doing it and meeting people. matched andu get you swipe, swipe and swipe. oh, i like you, and -- betty: i read the article as well.

i thought the article was really more about how social media in general is creating sort of a disaffected nests among this new generation. >> that's what nancy jo sales said. she said it wasn't even about inder, it was about dating in the new age. we hear about this all the time, the etiquette that twentysomethings don't follow. nowadays, people text if they are upset or they take it out on social media. >> we sounds like our parents. more andt you do see more of these articles. about be right and wrong way to do things. we are trying to figure this out because social media has given us this new avenue. is teaching us if we are

really interacting in the most genuine way. >> it has given us a fast lane -- anonymous . think speed dating is better because at least you are sitting across from somebody. way, i am not sure if the the energy fair article was really saying anything surprising about tinder, that people don't already believe that it is a pick up at. we are talking oil and energy coming up. parry came out with some incredible findings today. it is going to be an interesting interview, he will be joining us on the phone. betty: something for the bulls

and the bears. we will be back, stay with us. ♪

betty: hedge fund manager john paul has made millions of dollars waging against subprime markets before the real estate burst. now he is starting to profit from land he scooped up in 2009. john gilson been working on this story. paulson decided to buy up all of this land? john: it was cheap. no one wanted to buy land in 2009. thanfelt even further housing prices, which we all knew felt quite a bit. good value.s a

what exactly did he buy? john: he bought lots in parts of florida, nevada, colorado, arizona and california. these were projects that had been broken because they couldn't be completed. master-planned communities with typically 1000-2000 lots and they were bought for a steel because the guys who owned them couldn't wait. betty: so they had to sell them. he was able to get them for pennies on the dollar. how much money is he looking to make from this? estate management wouldn't tell him -- wouldn't say how much they are getting on this, but they bought 875 acres , now, according

guides, land is selling to homebuilders in $450,000 an acre. all of those acres will be sold, but it is a pretty good markup. it was a good bet. it sounds that way. he has made some wrong bets, but this sounds like the one that will work out for him. the fact that he is selling, does that mean that he is calling a peak here in the property market? they are midcycle in the housing market. these are big projects that take years to liquidate. so you don't wait until the top of the market. with the say is that prices fell very far, and that is when they bought, and they have comeback

quite a ways, at least 57%. in some places, they are double. it is a good time to start selling, at least. betty: all right, that was john the news onringing john paulson selling his land. coming up on the bloomberg market day, we will talk to the ceo of fidelity services, on why his company is buying sun dark for $9 billion. keep it right here. ♪

betty: it is 10:00 a.m. and 10 for cisco, 1:00 p.m. in new york and 1:00 a.m. in hong kong. ofk: the ripple effects

china's currency moves are being felt. international -- it would take 16 months to clear the supply glut. what would that mean for crude prices in the interim? mark: cisco reports quarterly earnings without john chambers at the helm. what to look for as chuck robbins takes over the networking giant. betty: good afternoon, i'm betty liu. mark: i am mark crumpton. thank you for joining us on bloomberg market day. another day, more concerns globally, the ripple effects about china and what the country is doing to its currency, the evaluating -- d valley w