>> i'm erik schatzker. matt: i am matt miller. china central bank easing concerns. erik: this happens me a big day for retail skirt july sales come out in 30 minutes time pair will talk to a couple of top ceo's ceo's. matt: earnings up only 25%. erik: in greece, the parliament is preparing to vote on the new bailout package. the bill includes spending cuts and tax hikes or the rest of the euro zone has to improve the deal before greece can unlock more than $90 billion of aid. finance ministers may not endorse this right away. >> two options. support a program

today and then formally next week. the other is that we go for some kind of bridge financing. these two options a this year i think both options entail that a payment will be made at the end of the day. unforeseen be an crisis. i just do not see that right now. responses economy grew an unexpected quarter. president jimmy carter will undergo cancer treatment. the former president said cancer was discovered during liver surgery and is in multiple locations. he will release more information as soon as next week. his father and three siblings all died of pancreatic cancer. china has been rocked by a series of explosions. the blast began in a warehouse

for hazardous materials. at least 44 people have been killed and hundreds more were injured. managers of the company that owned the warehouse have an detained. in golf, jordan spieth is the favorite. the pga championship has begun. he has already won the masters in the self in this year, a victory this weekend would make him the first player on the pga tour ever. a millionre than dollars on a first money in one feet -- the first one season. those are some of the top headlines we are following for you this morning. erik: we will begin with china. the panic that seemed to rain for a couple of days was decided after china'central-bank east concerns china was headed for a disorderly evaluation.

stocks them to the biggest two-day slide so far this year. are flatlinings but showing stabilization science. deteriorated.ets the fed wills raise rates in september. this is a great snapshot of what happens when the frenzy subsides. part of it is a great story julie sent around. the buyback desk. the unit that executes for big corporations had its busiest day since 2011. what that tells you is companies saw their stocks being undervalued. matt: that is right.

the 43-year-old boutique investment bank raised in its initial public offering. andbank sold fewer shares offered prices below the marketed range. the stock listed on the new york stock exchange will begin trading. started out as a boutique investment bank, mainly working on expertise. it is trying to expand including through a number of acquisitions to become a full-service firm or that puts them in direct competition with the big guys and the business like jpmorgan and goldman sachs. are other small boutiques fighting for a share of that pie. a competitive business. he knows what he is

talking about. number three? julie: i will be bringing you economists are looking at a rise of .6%. calls missedard estimates p or nordstrom will come out after the bell. nordstrom like macy's exposed to some extent to thrift here -- -- thriftier choppers. a big amazon sales say the month of july or we will see what kind .f effect that had matt: when you could get a role of toyota before 70% off. a dog hairbrush.

i did not buy a lot of stuff. erik: we have got to move on. tesla is filing to sell 2.1 million shares in secondary offering. the carmaker would raise about $500 million suit celery growth in the u.s. and internationally. up.news is moving the stock erik: not that tesla is selling stock. in the greater scheme of things, it is not that much. how often do you see a stock sale drive sales higher? matt: many people are happy it is only half $1 billion. will buy a $20 million worth of shares pared eyelet that the bloomberg billionaires index.

$12.3 billion. that is about .1% of his wealth. if he saved up a million dollars for retirement, it is like you buying $1000 worth of their stock. erik: bloomberg crunched the numbers and took a look at companies that may report the widest pay gap between ceo's's and workers. pay.is the median worker companies will have to release it under these requirements to we had to whittle down the list of 11 companies. mcdonald's and two service firms. top.an see services at the wall street ceo's is made the list. i'm going to take issue with this. most mcdonald's stores if not all our franchise operations. erik: there are still mcdonald's owns stores.

matt: for the most part, don thompson is not your boss. you have a local boss that owns the store. think that is reflected there. that is probably only company-owned stores. matt: all right. interesting stuff. a lot of earnings coming out. we have a retail ceo. range bound in a market. investors are hungry for growth as they always are. when they find it, they are happy to pay up. take thursday. the shares shot higher, more than 25% yesterday after companies earnings showed rapid sales growth. it is still losing money. $19 million. let's check in with the ceo of growthr with us, a conference in boston.

clearly, your company has a lot of momentum behind it. whatever one wants to know is how long will it take for your profitable? >> that is a great question and that is what folks are asking. the beauty of the way we are performing is that i think it is obvious to folks where we're headed. we are will buy the estimate that are prof -- we will be profitable by 2016. growth reflected up 81%. we have got almost 281 points of advertising leverage. how focused are you on becoming profitable? it is not an amazon's tory where you are just focused on growth and occasionally one quarter or another, you make a little money to assuage investors question mark -- investors? $250 billion retail market in the united states. and growings 8%

pretty fast online p or we think they will be a big winner and we are positioning ourselves and our growth is showing we are trying very hard and we are having success at being the winner. what i would say is for the first nine years of the business, we were profitable. in 2013, we were back to free flow -- free cash positive. we will lean and when we see those. matt: do you compete with amazon or are your competitors more the brick and mortar stores like restoration hardware, like ethan allen, who are, by the way, all profitable? they do not show nearly the same revenue growth. cases, the revenue growth is quite good. they are established businesses. niraj: anyone in fiscal goods

e-commerce competes with amazon so absolutely. you actually do not want to own the same items as someone else. a unique so far, unique set of pillows, unique mirror. the share is fragmented. our items allow us to be the best destination online. this is why we take shares away from these folks. absolute fact about the growth is we're taking share of the market. way towell on our profitability. i know we can grow fast and still moved to profitability. i get the point about having an exclusive line of goods. if you are to carry the same inventory amazon does, how can competitiverd to be on price? just before the show started, i was throwing around on your website and amazon plus's not ae, and this is

scientific sampling, but i took a look at a showerhead partly because you are advertising speakman stuff on the front page are $80ebsite, and you for a showerhead amazon is selling for $70 there choices pretty clear there from a consumer point of view. i will get that shipping for free. on the weight watchers scale, you want $50 for selling their selling for $33. explain. if you did a full sample size, i do not think you would find us more extensive than amazon to be honest. but we are moving more and more to a large assortment of items amazon does not offer third when you look at furniture him of these items are not granted. some of our top brands are how spence we created, merchandised, and photographed. it is a category similar to apparel. people want unique items.

unlike apparel, it is not granted. combination gives you a lot of room to create something special. absolutely are competitors. if we did a basket of 200 items across categories or whatever you picked for the sample size, i think you would find that we are competitive. how are you spending on marketing, on advertising? a lot of people say, it is the biggest furniture website you never heard of. i think it is safe to say, your growth is amazing from 2 million customers to 4 million customers per year, but still, it is only 4 million. niraj: absolutely. it is a huge opportunity. we think there are 60 million customers in the u.s. to 62%.eness is up it was only 6% when we started television advertising. only september 2012. we are only coming up at three years for that we were at 36% at the end of 2013 1055% at the end

of 2014. our awareness is growing well but to be honest him a we are on the at 62%. as we get to 95%, you can see the growth and what it looks like there with only 4 million customers, you can see what kind of growth is ahead. we move see how quickly toward profitability, you can see how well we are doing, and how much room we have ahead of us. got is a combination that investors pretty excited yesterday. the cofounder, cochairman, and ceo of wayfair, niraj shah. matt: why the most bullish strategist on wall street says china passes current move could mean good news for the u.s.. ♪

matt: global stock markets are up today. joining us now is michael purves . the close this year is 203,050. that is the highest surveyed here at bloomberg. thank you for joining us. why are you so bullish? i feel like everything is that. >> there have been a lot of bad things this year and yet the market is still basically flat. one of the things happening is been playing great defense. miserable office but very strong defense. continued,own with a the drawdowns of the market are pretty mild. despite all these horrible dollar,a very strong various geopolitical situations

in europe, and this week in china, of course. matt: china collapsed, commodities collapsed. greece is mired in problems for the rest of its existence. through all of that, they've continue to go higher. seen, it is we have more taking a timeout, if you will. erik: can we talk about valuations? there has in tremendous margin expansion. on my screen, i have a five-year chart of estimated price to earnings. this trend is mirrored by actual price to earnings. that is a five-year chart. if i go to a year today chart, you can see it is beginning to flatline. is that beginning of the end of the bull market when you see margin expansion? all we have left is economic growth and bottom line growth. that is a great chart

and it is one of the things i have the noticing. certainly a reason, you get a lot more conservative on the actual price levels. matt: you could do that on live television right now. 2350 is certainly high. that is a big step, no question here. before.seen it happen these are consolidating and you are seeing that. i just wanted to address a couple of points. the highest year-over-year earnings we have seen in this market was under 6%. you do not need incredible earnings growth. a combinationis of decent earnings growth and nominal gdp growth to get that. and then you need continued

support to be there. i think the support for the equity >> will continue. how much earnings growth we will get in the next couple of quarters is really a key question. the wildcard is really oil. earningsing -- related is hitting the overall profile. the earnings growth for the market to meet your target and we will have a multiple expansion return. we will have to see multiple expansion pick up. erik: the tide has gone out and the emperor. be wary no clothes. youis that good? michael: slightly overstated my argument, which was simply, you step back and look at china. a massive economy but also an emerging market. giant dealing with a economy going through its awkward adolescence.

the silver lining is probably a better way to characterize what alice trying to articulate. erik: i've got to cut you off. ♪

matt: welcome back. michael purves was going to tell us why the collapse in china or china iseginning of >> good for the u.s. michael: it is not a silver celebrationthe deke of china, the issues china has been struggling with, it is not exactly new news. of one, it is always a little unsettling -- unsettling. the silver lining for more global risk is he does push the

fed. on an enduring basis. most every major central bank now is joining this collective -- currency were is probably an overstatement, but there is cannotoing on and you really be left out. the u.s. cannot afford to be a strong currency. have aellen does not mandate, but she does have inflation on employment. they're obviously watching that even if they do not say it. michael: they are. stimulus, good for stocks. japanese stimulus is good for stocks. michael: you're talking about

u.s. stocks. i think ultimately, yes, but we're talking about a giant economy and its capital markets are still -- u.s. stimulus is good for the stock market. what they have in china is completely different. i'm just saying, what is it in china when you freeze every stock and you order that they cannot sell and only by. thank you so much for joining us, michael purves, chief global strategist for wheaton and company. erik: it is time for some of our top stories at the hour. a key step suspect in that insider trading scheme. freed on a 100,000 dollars bond. a federal judge in new york city blocked a bail order granted by u.s. magistrate.

shares of tesla are rising the premarket. the carmaker filed to raise $500 million in a secondary share sale. elon musk plans to buy $20 million of the shares himself. tesla was up 7% for the year. in a rare occurrence, it will drive the stocks higher. take the title of world's's longest airline route away from qantas. amorous will fly nonstop from to distance of a a thousand 590 miles. it is about 10 miles longer than the current route through sydney and dallas. the flight is scheduled to take 17 hours and 35 minutes. luxuriousxtremely airline, luckily. erik: the on that, also talking a hub for transport. that is why they are flying

there in the first place with this flight. that is interesting. i just saw van helen this week. erik: if you think about the transformation of to buy, what that might mean for panama, which does not have a whole lot going for it right now. matt: i was going to say i have not been to panama and i do not know much about it. interesting stuff. i feel it is a little far-fetched. i do not know there is necessarily room in this toticular development intensify the dispute between american carriers, delta, theican, and united, versus era carriers. but that is certainly in the backdrop. matt: of course.

they have the money because they are investors. the states that back them can put up billions, whereas the investors in the united states airlines just want money back. we are about to get retail sales. the economists we surveyed are looking for a month over month increase of .6%, and we get it right in line. let's take you out to julie hyman, who has more on the breaking news. .6%, including the effect of higher auto sales during the month. if you exclude autos, you get an increase in line with estimates. the month earlier, which all showed negative readings initially, we are now seeing positive readings. june and autosr is now going to a gain. autos in gas going to a gain. this is definitely good news on

the retail front. i was look for a note at bloomberg is halogen's saying this is really an important number for the second half of the year for the church rectory of the fed because of what it about consumer spending and the health of the consumer. i want to look in here and see what we got on the non-store retail number that we talked about earlier since we did have that prime day from amazon. it looks like we got an increase of 1.5% in non-store retail. in other words, e-commerce, essentially. it also includes catalogs. a really strong reading there. it looks like it was the strongest since february. gains of 1.5%. payooks like prime day did off. i'm looking at general merchandise as well. that includes companies like walmart. walmart also did some sales efforts to try to compete with amazon. it looks like we still saw a decrease of .1% -- .5%.

a lot is coming from prime day and other online shopping. erik: thank you, julie. i want to point out the equity index futures did not really economic data. technology, they'll have to assume the liability for fraudulent transaction, it is called the liability shift. it is important. back, -- are pushing with us now from a french company that makes credit card swipe machines. welcome. let's talk about retailers. the have been following liability shift from more than a year. close into october, all the

sudden retailers are screaming bloody murder. we have not been given enough time. they had at least three years. is that not enough time? have had three years. that is interesting giving the of theat 80% to 90% retailers will be ready. most are ready now. names are the natch -- national merchants consumers recognize. we have been working for these folks for two or three years and we know they are ready to accept today. >> they do not want to step up and spend $500, $1000. rod: is considerably less than that. most of them purchase a turn keypad from their service provider p or we are now beginning to roll out the systems, they are being provided financial packages per we

think the merchants will come along. that -- fornada and that matter. years sincebeen 20 we have rolled it out. canada, it was rolled out in 2010. what you find is consumers will ultimately expect their merchants to use the latest in care technology. does the package consist of? it is not just buying terminals as far as i understand it. they have to have secure systems. what else does a small margin have to do? rod: there really is not much else. with theself-contained software. already certified to their they contain the appropriate card reading mechanism. it is technology that has been proven and rolled out worldwide.

aik: are you just not doing good job persuading the merchants that it is ultimately cheaper to buy a terminal than it is a broad? are doing a very good job. this is a typical pattern followed in all the markets. the small merchants, first of all, tends to think they'll not be affected. they have not seen a fraudulent transaction before. they believe they know their customers and they have fewer transactions. istheir mind, the risk relatively low. the message to small merchants when the largel, merchants have secured their systems, they will not pack up their bags and say, that is the end of that year they will migrate toward a small merchants. devastating to a small business owner. erik: fair point. rod hometh. matt: friday night united states

is stepping up its investigation. ♪

erik: the first major conviction in this area has yet to be overturned. jesse is with us from washington. this is something obviously investigators are keen to discuss publicly. what do we know? jesse: these investigations have been on the back burner as investigators and regulators sort of waited to see what'll happen with the key legal appeal. they now decided wrongdoing is wrongdoing, bond traders were behaving badly. let's go after them. erik: for what exactly? what is it they believe the bond traders have done?

jesse: we are really talking about market makers on wall see all theng to transactions. they are not very transparent markets, things like complex mortgage changes. they see the transactions and buy bonds at one price and they may even mislead or lie to clients about how much they can pay for them so they can charge them and sell them. if this underpins a lot of this. confident thisty is granted that behavior and it seems like there is a lot of it. matt: it seems like they're finally getting regulators going after individuals or at least it --ls like that

there is a perception of the public very few people are punished. was appealing it was sentenced to two years in prison. >> formally a traitor for jeffries. jesse: correct. he spent two years in prison. how many people got a prison sentence in the financial crisis? i cannot think of too many. if the justice department can send more people to prison, it sort of makes the argument crumbles that they are not sending people to prison on wall street. thank you for spending your time with us this morning.

still to come, why does tom look like a character in tales from the crypt? it is all part of this morning's best picture's coming up. ♪

erik: coming up, we will talk with the ceo of vox media. jim bankoff. matt: if you moments ago, we got retail sales numbers. sales rose slightly better than estimated. here now with reaction and insight into the strength, the vp of e-commerce finance licensing for a company of lingerie, home betting, thanks for joining us. when julie was breaking the tobers down, she was trying

suss out what was going on as far as rick and mortar sales, general sales, it looks like the -- it is aoliday holiday when they have 11:11. singles day. anyway, they're trying to do their own singles day with time day, i think is kind of the idea. well that that as everything is shifting toward online events rather than brick-and-mortar sales or just regular online sales? say the rate of change is much greater and much more important to brands like us and retailers. terms of how consumers are spending. ken: there is more moving online. peopleand other brands,

going into stores, the foot traffic at department stores continues to be very weak. yesterday and this morning. a lot of these stores have been able to deliver growth. that has really been through strength and not their core business. all the stores, the core business is having stores come in and buy. are we looking at a chart of sales? matt: stock prices, yes. it does not really tell the sales story that you say they are keeping their heads above water. ken: they are. the court business once again his people going into stores and buying. that continues to not be --growth by off-price, cost

control, certainly passing on more expenses to suppliers. other growth strategies like international. what you do not hear other guys saying is the full price business is strong. we will open full price stores. this seems to be one of them. do you have a preference for whether sales are online or in-store? ken: we have a preference for knowing what the customer is doing. that is changing a lot p retailers are trying to figure out and get ahead of what the customers are doing. it really is a challenge. you mentioned amazon prime. we are seeing a ton of growth. one interesting development we have been trying to get in front of is a lot more discount the online. brands are trying to get ahead of that.

the degree to which -- exactly. have, and high-end retailers do not have, the ability to build consistently. does the shift to online purchasing change the way you advertise products? ken: we have moved our advertising budget digitally. we do about half print half online. every brand has to invest. it is social media, digital advertising campaigns. a lot of stores want to to fund campaigns.rtising the world is changing rapidly and we are just trying to get ahead of it. matt: i appreciate your time today. thanks for your insight. meantime, tesla is selling half $1 billion of stock.

more when we come back. ♪

matt: it has been a tough week for shares of shake shack. stocks have fallen roughly 9% in the session and this morning, premarket trading is indicating even sharper declines. julie hyman joins us now with that and more. our investors finally coming around to the idea that shake shack's in -- valuation -- we have seen us -- it come down to a lofty level. do microsoft after this. tesla, offering shares as you pointed out, is higher.

shake shack is offering shares and is lower, what you would expect because it dilutes the value of the shares. $60 each is what we're looking at. raiseshares are trying to half a billion dollars through the sale of 2.1 million shares. one thing that may be mitigating declines in tesla is that elon musk said he might buy around 84,000 shares for $20 million total. the fact that he is doing some buying here is maybe helping to support it. i want to try to figure this out through a couple of charts. let's take a look at how the stocks have done for the year to date, though shake shack had been trading in late january. shares are up about 200 percent. tesla is up about 7% and we have seen shake shack do better. this is normalized to adjust for percentage. our people starting to realize the valuation is a little wacky? sure. something else i wanted to look

interesttum stocks, is for the two companies. it is something you have to take you're lookingen at moves in the stocks are shake shack is higher at 43 sent. down,passes have come although still elevated 25%. both of these stocks are heavily shorted. if we have time now, let's mention microsoft and then come back to tesla and shake shack in a second. microsoft being upgraded to buy it i love the title -- no alphabet soup here. just good old-fashioned execution. call,s what is behind the the idea the company is executing and even though some of its initiatives are not necessarily bearing fruit now, yours like ramping up as cloud offering, that they will

start to bear fruit and expand margins going in the next few years. erik: tesla is selling shares to fund growth. shake shack is selling shares so investors can check -- cash out. a notable difference between the two. julie: in the case of tesla, the biggest shareholder is actually stepping up. had $1 million, you would buy $1000 worth? just does not really matter. $20 million does not matter much. but a moneyears ago dollar car. a 32nd richest man in america. the 87th richest man in the world. i am a big fan. we will be talking to the ceo of vox media. putting millions

into startups. stick around. ♪

>> live from bloomberg headquarters in new york, this is "market makers." good morning once again, this is the second hal hour of "market makers." was growing demand for everything from clothes to cars last month. retail sales rose .6% in july, matching the median forecast. revisedumber was upwards. auto dealers and online merchants were up. initial jobless claims hovering near the lowest level in four

decades. first-time claims rose by 4000 -- 5000 last week. they have not been above 500,000 since february. erik: china trying to restore alm, signaling support for the yuan. the central bank held a rare news conference and says there is no basis of the currency depreciation to persist. intel says it is hiring minorities at a faster rate than it had hoped for. 4 percentre than -- 40% have been women or minorities. elon musk is betting big on the electric future.

the company announced it is offering 2.1 million shares of the company, raising half $1 billion. must consult has says he intends to purchase $20 million in stock. jamie butters joins us now from detroit. it's interesting, a fascinating story. if you look at a $30 billion market cap, to raise $500 million, don't you feel like they could have raised more? jamie: maybe they could. it's about the cash needs for the investment. the cfo indicated maybe they did not need to. the billion and change the have on their books might be enough. extra half billion in cushion without having to tap the credit line seems prudent. they are taking some money while they can. i thought it might have been a billion or two, but half-billion will be helpful.

they are investing. they have to wash the model x this quarter. they are trying to build this massive battery factory near reno. they have to develop a more mass market like car to compete with the three series and get some scale. huge investments coming ahead for this company. an extra half-billion to get them through until the model x starts generating cash seems like a wise move. erik: investors are not always happy when companies dilute them by selling new equity. it investors feel reasonably good about the timing of this tale? the bad news is out the door. that's timing of this sale. >> maybe. it would have been better to get to ada share. the shares were up early this morning. -- 280 share. there is a sense that it is a

good move to get them extra cushion. even though it's diluting the value of their shares, they think they're better off because there's less of a chance of a downside. less of a chance of running short on cash and having to get money when it's released its of. matt: people talk about range anxiety is the biggest problem for the biggest challenge for tesla. erik: that means what? matt: people are worried they will run out of charge and not find any place to develop. one of the reasons, a lot of people think there are not enough places to fill up. -- not find any place to fill up. they are putting in a lot more charging stations in manhattan. >> tesla has been investing really heavily in their supercharger network, a really high-powered, fast charger they put along highways for

long-distance road trips so you can drive a model s or model x across the country. they are now adding these stations throughout manhattan where you can pay to get a , not asly fast charge fast as the supercharger, but faster than plugging into a wall outlet. they have these destination chargers and nice hotels and restaurants. yosemite park, you can go and , bute up in between pace they are free because the company wants you to come visit them in charge of your model s and stay for dinner. the money will need to expand in china. the chinese have not come up with a standardized charging system yet. when they do, they will convert all their cars there. china is a very big country. they need to put more supercharger destination charger stations there. less of a road trip culture

than the u.s. or europe. ,esla has so many ambitions globally, 70 challenges. this is a company of the possible things and they have done eight. they have to expand in europe and china and build the supercharger network. -- globally, so many challenges. they are being in state fought ines could -- state legislatures. next are couple billion is going to help them. -- an extra couple billion is going to help them. matt: i love talking about tesla. 20 impossible things, they have done eight. people have real issues with the company but i think it is amazing to see the products they create. erik: when we come back, china's central bank stems currency

concerns for the moment. stay with us. ♪

julie: breaking news on the turkish lyra. the euro combination has dropped to an all-time low, this happening after meeting between turkey's two biggest political parties trying to agree on coalition terms but it ended in less than two hours. they have not come to an agreement. the acting prime minister of turkey is due to speak at 4:30 p.m. we will get more details on that. emergingbeen watching currencies around the world, the turkish lira falling to a record low. has a dilemma. the government wants to use the

evaluation to stoke the economy and wants the u.s. to become one of the world spew -- valuation to stoke the economy become a the yuan to reserve currency. sayingtral bank jawboned the currency has no real reason to depreciate further. beyond that, it will step in to moderate big swings. what does that tell you about the future of the yuan? >> they would say that, wouldn't they? when i say that, i'm not trying .o be churlish i don't think in contrast to a lot of commentary that has come out this week, i don't think the chinese are angling to do a mega devaluation or spread global panic and deflation and currency

wars. that is something of an exaggeration. i do think china has crossed the rubicon in terms of its foreign exchange management. some of this is about the liberalization program that receives a lot of airplay, particularly because of their desire to join the imf board meeting. a lot of it has to do policy easing because of what's going on in domestic economy. the chinese authorities will downnue to guide the yuan over the course of this year against the universally strong, robust u.s. dollar. matt: do you think they have a firm plan and that they will execute on that plan? mode this a case of panic and we are going to throw a bunch of things at the wall and see what sticks? >> i will be somewhere in

between those two. the people'sat bank of china or the state council has a coherent plan about what it wants to do in pitchof where it wants to the currency and cannot cope with all the unexpected volatility in markets, the answer is nobody has that kind of plan. on the other hand, there is a kind of -- panic may be a strong word. if you think about what china has done this year, they have cut reserve requirements about three or four times. they cut interest rate four times since december of 2014. banks -- development they have given development banks the authority to issue one bonds toyuan of new infrastructure providers.

they lifted restraints on financing vehicles. there is a lot going on to try to forestall a weakening economy. this is the fourth year running in which a weak economy has elicited stemless measures from the government -- stimulus measures from the government. i think the currency move was certainly in part driven by financial policy narratives which are being dictated by the domestic economy. -- i hate toseen say inept -- handling of the stock market situation, how much confidence should people have in policy makers possibility to --trol financial markets policymakers's ability to control financial markets. whatever the chinese

authorities and say about we want to injuries market forces into the workings of the chinese economy, they don't really trust what markets do. if you ask the question of how much trust or confidence can we have that the people's bank of china or the authorities get a handle or control over for exchange management with the answer is -- management, the answer is quite dubious. the new policy of fixing the currency every day on the basis of last night's close potentially can invite a cycle of depreciation which may not be welcome. intervention,e chinese banks being instructed to buy dollars to try to smooth what's going on. they cannot afford to keep fixing the currency day by day.

the markets will watch this very closely. other currency authorities in asia and the emerging world will watch them closely to see to what extent china is good for its word about keeping the currency in a stable pattern and what extent this is a disguised policy of guided depreciation. erik: great to have you on the show this morning. trucks powered by natural gas are clean and cost far less than diesel. why haven't more companies converted? waste management has converted a lot of its fleet, the biggest in going veryd it's well. the ceo joins us next to talk about it. ♪

matt: the death toll is now at least 50. an explosion that rocked a chinese port, 12 of those killed were firefighters, more than 500 people were hurt. the warehouse for hazardous materials burnt into a fireball and managers are that warehouse company are being held for questioning. donald trump leading by a wide margin in the state where voters will go to the polls first. he is backed by 22% in iowa. 14%, scott walker faded into third at 9%. demarest will soon be the

long-distance airline champ, planning a dubai to panama flight. that will be 10 miles longer than the current record holder, a flight between sydney and dallas. it will take over 17.5 hours to get to panama. maybe it will be a new hub for the airline. erik: when is the last time you heard anybody say something positive about the greek economy? i will about to tell you something surprising. the second order, greece's economy grew by 0.8%. greece subsequently interest capital controls -- interest capital controls. -- introduced capital controls. after they were elected, the greek government -- everybody thought the economy was -- >> the shutting of the banks,

all that happened in the third quarter. this may not capture -- a surprising number, one thing that could be driving this, an increase in household spending leading up to it. greeks wanting to park assets in hard things like autos and new washing machines because they were bracing for capital controls. how trustworthy these numbers are. we look at the chinese economy, take everything with a shaker full of salt. the greek economy has a shadow economy of 30% of gdp. >> no one is questioning the credibility of the numbers. the numbers are pretty solid. we could get a revision. erik: directionally, it tells you something. >> the economy is primed for growth. if you look at what happened in the third quarter, they have a lot more room to grow. we have important figures out -- matt: 10% growth in 2014.

>> an annualized rate. noise. statistical they had serious concerns about greece's debt sustainability. scenario, 201% debt to gdp ratio in 2016. that doesn't even factor in the imf. erik: 200%. >> that is a best case scenario that the imf might not even agree to the math on this. thank you for joining us. a quick break on "market makers ." ♪

matt: we are just a few minutes away from the opening bell on the new york stock exchange. tracy alloway is here with the three things you need to be looking at today.

as the fixedus income strategist at j.p. morgan asset management. welcome to the program, ladies. kick it off with number one. >> let's look at high-yield, which is finally starting to live up to its name. we've had years and years of really low trans on junk rated bonds. yields are up to 5.5%. the highest since 2012 according .o the b of a index as we get higher spreads and higher yields for investors, whether we see value people start to come in and possibly wish those spreads down a little bit. push those spreads down a little bit. people are demanding more compensation to buy junk rated corporate bonds. >> we've had all that pain in

, which emerging markets are a big component of u.s. high yields. >> this is not the widest we have seen. it is starting to move away from no yield territory to start to offer some yield. this is the most read we have seen going into a fed hiking cycle. even though it might not look incredibly juicy, there is much more value than we've seen for months. in the midpoint of 2014 when the spread was half of where it is today, you saw tremendous inflows into the asset class. now, everyone seems to be unning it.t -- sh erik: how do you think they will perform -- we've never seen how high-yield performs in a bond bear arc it.

-- market. we have seen how it has higher rate hiking cycle is the early 1990's and early 2000's. it is offering the most since both of those -- if you asked me about pushing year ago, it probably does not have enough cushion to protect you. currently, it does come even if you take the energy in the mining sector out of the picture, you are still getting a spread of 500 basis points and the fundamentals continue to be constructive. overall are in the subtree percent area if you remove the metals mining from defaulting high --lds stand that

erik: will juicy high-yield begin to lower investors? i wonder if there might be a rotation out of high-yield because as high-yield spreads widen, so do investment-grade spreads and maybe they become high enough to tempt the people out of titles who previously wandered off the reservation. >> the spreads are not wide enough to protect you from the rising cycle. you are seeing this move out of high-yield, some of it -- pricing in dire scenarios across three things. acceleration of the default cycle brought on by continued weakness in commodities, lack of liquidity which we've talked ad nauseam about in this market in the hiking rate cycle. if anyone of those comes in less dire, you will see a pretty furious snapback. even though it may feel like you have to hold your nose and jump in right now, it may pay to do that in a disciplined way.

number two, no commodity is safe, not even corn. take a look at corn futures. erik: tons of booze. yesterday, we had a surprise saying the corn harvest would be much better than people had expected. we had a big decline in corn futures. and drop to something like a seven-week low, it has been on a pretty big downtrend all this year. more pain in that complex. it seems to be an overarching theme at the moment. too much capacity. oft: the worst result falling corn prices is we will never see an end to these ridiculous ethanol subsidies. >> i thought you were going to say something about your

favorite corn flavored products. matt: i like cornbread. how many corn flavored products are there? cornflakes. ethanol in our gasoline in this country, which is horrible for your engine. as a way to subsidize the corn industry, which is just bad news. out,at i what a to point the same supply demand, which is what is -- dovetailing with my comets regarding high-yield, buyers can come in unexpectedly. topic that doesn't get that have attention is depletion rates. they are moving faster than investors may realize. world's oilthe comes from oil fields established prior to 1970. these are 45 years old.

it is not evident all the time. if you factor in a years worth of knowing that because oil prices were low, you could get a wake-up call from that part of the market and all of a sudden come oil prices start to stabilize and that feeds into what's happening with the credit -- matt: farmers could all of a sudden decide to plant soy or whatever else. erik: we have hit bonds and commodities. currencies. >> speaking of depletion, another story about fx reserves in oil. -- the the saudi arabia biggest single day surged since 2011 after we got the announcement from china that it was evaluating the -- ev

devaluating the yuan. pegged to the dollar for a long time, but that country is suffering from a lower oil price, running through fx reserves. we will have to wait and see. >> surprising that we are hearing about that ahead of us hong kong doing something with its currency. , we will seeterm some impact on currencies from the china move and longer-term, that does mean more volatility for currencies in general. --are not stuck >> it's all about the surprises now. imagine if you get a surprise announcement from saudi arabia erik: thank you very much. -- thank you. matt: shares of cisco getting a

nice boost following its earnings report. dowe hyman has more on the 's best performer this morning. the company goes through this transition to its new ceo, some analysts are suggesting that it was very cautious in terms of its guidance and tried to meet smooth the transition. shares up 4.5% right now. company sales up nearly 4% and profit beating estimates. in line with cisco's forecast for the quarter as it does make that decision -- transition to chuck robbins as new ceo. let's take a look at sprint which is already up 15% this week. -- another $87h as theyinto sprint

continue to try to emphasize the support of the company. the stake since -- stands at 79.4%. 85% is the tipping point at which sprint is the listed. kohl's reflective of the retail landscape. overall, the retail sales matched estimates. we saw a revisions for june higher, but kohl's following macy's and reporting earnings that missed estimates. come sales up .1%. revenue missing estimates, earnings missing estimates. the department store numbers within the overall retail sales report were not very strong. matt: thank you very much for that. erik: cisco beat earnings estimates for the 41st street quarter. matt: i have to question how

hard analysts are trying. i honestly do. do you get a bonus if you underestimate earnings? why don't they just add 10 or 20% to whatever their best guess is? if you are wrong every time for 10 years, you might need to look for a new position. unless there is some incentive for analysts to lowball earnings , which i can only draw that conclusion from the evidence. there must be some incentive -- erik: juncker paper with the chief financial officer. juncker -- you incur favor with the chief financial officer. the ceo making green from going green. waste management chief coming up. ♪

matt: just released data from the government shows july 2015 was warmer than average and unusually hot and part of the nation -- the warmest year on on record since 1880. more than five degrees above average. extremes,temperature we decided to profile people and companies playing a role in the fight against climate change. changing climate, changing business. we want to welcome david steiner . his company is at the forefront of reducing greenhouse gas by offering 4200 trucks powered by natural gas. thank you for joining us. that reduces your carbon

footprint by 22 metric tons per truck. david: absolutely. what brought you to make this decision? .n the lead as fo david: 25% of our fleet runs on natural gas. 90% of what we buy right now runs a natural gas. for us, it is too full. what do our customers want? a greener solution. -- it is twofold. business?od for the with the difference between diesel and natural gas, it makes financial sense. when you can do something that makes financial sense for the company and makes good sense for the environment, that's what we like to do. matt: m i right that you sit on the board of fedex? i don't believe fedex has made this shift. david: i am on the board. it has made the shift. , they use lng.

when you look at the whole natural gas use in heavy-duty vehicles, the biggest concern is the infrastructure. when you look at the over the road trucks, you have to stop and get gas along the interstate highway system and they don't have the infrastructure. as we can build out the infrastructure coming up we can get incentives, we can get help from governments, you can see everyone turned natural gas because from a heavy duty fleet point of view, it makes great economic sense. price per barrel of oil does this begin to make economic sense for waste management? perhaps it is a no-brainer at $100 a barrel or higher. does it still work at this level? david: it sure does. the gap has narrowed at $40 a barrel. using natural gas come down also. -- you see natural gas coming

down also. d waslly the payback perio two years. it extended it a little bit. still about a $.50 per gallon difference. erik: why not electric? david: for us, electric cannot run heavy-duty. the electric engine does not have enough torque. when you look at the transportation sector, what you for overng at is lng the road and electric for passenger vehicles and light-duty trucks. do you operate to biggest network of natural gas infrastructure? do you talk to partners to help them build that out? david: we absolutely do. we get local or state governments giving us incentives to build public fueling stations. in seattle, the taxicabs run a natural gas. we have a fueling station that

we have right out by the airport so every time a taxicab goes to the airport to drop off and pick up a passenger, they have the ability to stop by our station and fill up with natural gas. you are doing your part to reduce the volume of the missions that waste management trucks pump into the atmosphere. others say there are not enough incentives. are you in favor of a cap and trade system for carbon? you are trying to make drastic change, the best way to do it is to have all parties interested. having the customers interested. we know our customers are interested. having business being interested. incentives would help business be interested. having government play a role. we have not taken a position on what is the global solution. as far as infrastructure goes for a natural gas fueling system throughout the united states, we

absolutely think there should be a government subsidy. when you look at it, it works. there is no new technology that has to be developed. it is not like solar power where it is still not economic and still needs benefits in order to get it to be economic. will economic, companies do it if we can build up infrastructure. getting that incentive to build the infrastructure is where we are focused. matt: let me ask you about recycling. you've had a couple of quarters where you lose money on recycling. a lot of other companies are losing money on recycling. for oil andices copper, prices for cardboard and paper have also plummeted. andle are throwing things recycling bins that should not be there and that clogs up your system. david: that is absolutely right. we've been hit by a double way me. when you're processing costs go up and the amount you can recycle the material or goes down, profitability goes down. in the height of the commodity

$200ts, we were investing million a year in recycling assets. that investment has stopped with commodity prices about 70% lower than they were three years ago. with processing costs about 20% higher. for us, we need to figure out how we can educate our customers so they can give us less contaminated material. markets towait for come back and to see commodity prices come back. that's another area where we can talk to local governments come out of to state governments and federal government to say during times like this when commodity prices drive recycling rates , if we as a country decide we think recycling is good and i think anyone would agree it is, we need to do something to make sure that the infrastructure continues to be built out. we want to have that discussion. there's a lot of ways you can solve this issue. to talk about all those

alternatives and do what is right for our customers, do what is right for our government. matt: thank you so much. fascinating discussion. david steiner talking about natural gas and recycling. erik: old media meets new media. we will be talking to the ceo of vox media, jim bankoff. ♪

erik: old media and new media come together. comcast come nbc universal announced a two or million dollars investment in vox media. here with us is the ceo and .hairman, jim bankoff what are you going to do with the money? are some of your early venture

investors getting cash? jim: there will be a secondary component. we are raising the money first of all in the context of a broader strategic partnership. nbc universal will have some big business,s -- in this you don't know what's going to happen. we operate in a fluid industry and we want to be prepared to invest to seize opportunity, to focus on her key initiatives of building the great new media brand of a new generation. we are in eight of them today and we will invest in those to build them up. we will invest in our technology and advertising capabilities so we can grow a great independent company. matt: nbc universal knows what is going to happen -- invest $200 million. tdo they think they will get joint programming with you? jim: absolutely. we are excited to collaborate on

programming. they have a huge expertise and video. we look forward to exposing one another's programming to one another's audience. our brands and categories tend to align very well. we have a big brand called espy nation. whether it is that were recode x.com, great or vo alignment with cnbc, nbc news, lifestyle brands like bravo and sci-fi. there is great opportunity to expose one another's programming. there is opportunity on the advertising front as well. looking for skill, but premium audiences and premium advertising. both companies are able to provide that and by joining forces, we can increase the scale and increase the platforms. matt: can you give us 18 specific example -- one specific

example? jim: we have not nailed the details. the ink is still drying, but that is the kind of thing we are certainly talking about. whether it is segments or shows or corporate actions -- coproductions. erik: can you give us a sense of vox media's scale at this point? jim: we are a private company, we don't release that -- we are profitable. our revenue is doubling in the past fears. -- few years. experiencing tremendous growth. we are doing it in a way that is not taking any shortcuts. we are producing premium content, premium advertising and premium media brands seeking to be authoritative. adulteal to younger audiences, they tend to be affluent audiences across the

millionhat her 70 unique visitors -- 170 million unique visitors. we are about crating media brands and this partnership will help us extend. bewant our programming to wherever relevant -- facebook, apple, twitter, etc. erik: how was this deal hatched? who called who, when did it start? jim: we have great relationships across the board at nbc universal and comcast. that have been built over the years through our professional relationship. investment,s comcast ventures, a different arm of the comcast family -- they operate as an independent entity. us andpany got to know

we build those relationships, built that trust. they were impressed with what we were doing and we were eager to work and find more to do together. tvt: any chance for a vox station? jim: stay tuned. we will see. no plans to announce right now. erik: thank you very much. vox media ceo jim bankoff. matt: that is it for the program. we leave you with some pictures of a 20 foot shark. ♪ .

it is 10:00 a.m.. >> welcome. >> global stocks recovering after a volatile few days. panic subsiding after currency devaluation in china.

>> the american consumer is back. demand grew last month for everything from cars to clothing , boding well for economic growth in the second half of the year. >> thinks it is found a way to payingnder diversity nannies on business trips. scarlet: good morning. let's get straight to the markets. we will take a look at equities, u.s. stocks posting some modest losses. clearly, indexes are failing to build on yesterday's late recovery in which the dow raised the drop of a believe 277 points will stop if you look at europe