pimm: and welcome to the bloomberg market day. the irs is tripling the number of accounts hurt by online breaches. how much good this and that hurting everybody's favorite agency. pimm: sometimes even the smart money gets earned. ceqa is going through cash. we will find out details about the maker of aerospace part and metal coatings, next. olivia: welcome back to a quiet august tuesday. pimm: we are 90 minutes into the trading day in new york. what's look at how markets are faring. 500much action -- the s&p

up a quarter of a point. the dow jones industrial average adds about 14 points. the nasdaq down about eight points. olivia: one stock that is moving his sprint with news that softbank has increased its state -- its stake. that is in addition to the ceo of sprint coming out saying they will use 100% of their u.s. network for upgraded services. sprint is still a player even though it is losing money. let's take a look at some of the top headlines at this hour. housing starts hit a level that has not been seen since 2007. housing department says starts are at an eight year high while builders broke ground at a rate of 1.20 one million units, up about .2%.

june cross housing starts were also revised higher to a 1.2 million unit rate. walmart, the world's largest retailer, cut its outlook as profits dropped. cheap -- chief executive spoke on the company's conference call. i'm encouraged by the improvement and recognize our bottom-line results should have been better. we have margin pressure from pharmacy reimbursement and higher shrink than we expected during the quarter. this impacted eps. meanwhile, walmart's second-quarter sales were higher than estimates. they announced they would raise the starting wage of its employees to nine dollars and hour this year. of tjx are rising today. a posted second-quarter profits

that beat analysts estimates. i also raise their sales forecast for the entire year saying the third quarter is off to a solid start. home depot is cashing in on the increase in housing activity. the largest home improvement retailer says profits grew 9% and they razor profit forecast for the full year, the second time they have done that this year. home prices have risen for 40 straight once, encouraging americans to spend more to fix up their homes. they are on baby panda watch at the national zoo in washington, d c. disease adult female panda is entering the final stages of pregnancy. female panda adult is entering the final stages of pregnancy. it is exciting stuff down there today.

that's a sign of a tuesday in august story -- baby pandas. pimm: baby pandas in the zoo that are yet to be born. those are your top stories at the moment. coming up in the next top out -- coming up in the bloomberg market day, getting from a to b with online software is a battlefield for automakers versus tech giants in silicon valley. we will talk about rogue map wars. the irs announcing this morning the hack was worse than they initially announced. three out of four taxpayers may have had their social security numbers and home addresses stolen. the broad commodities selloff continues as oil continues at its six-year low. what's next for supplies and opec esther mark these stories and more coming up over the next hour. pimm: let's dive a little deeper into walmart's second-quarter

results. our guest has a neutral rating on walmart and has had that neutral rating for two years. what is your take away from this morning's results? there are two powerful forces working against walmart -- what is large numbers. how do you grow the revenue? and second is an improving economy. that's a negative for walmart. when the economy gets better, the current that's the ones who buy the most discretionary products at walmart tend to go upmarket to other stores like jcpenney's or macy's. macy's has taken a lot of customers from walmart. olivia: i was on the conference call this morning and he said a were seeing a big macro tailwind because gasoline is cheaper and that's helping the walmart customer. if the positive economy

is a factor, they are seeing an increase in people visiting the store. however, when the economy -- when the economy improves, people tend to go upmarket and walmart loses the incremental purchase, more discretionary things like toys and sporting goods, everything but stable goods like food and clothing. pimm: what would it take for you to be bullish on the shares of walmart? guest: we don't look at earnings per share multiples. we look at economic profit and that has been flat on walmart for some time. they would have to contract their balance sheet if they were going to subtract that and break up their other businesses. this is really the law of large numbers working against them. pimm: you want some kind of big strategic move? guest: yes.

their goal is to add stores, .lobally grow same-store sales it's just very hard to grow fast. pimm: i understand that, but the stock is down 20%. at some point is walmart a value play? theory, it would have to trade at a major discount to its economic profit value, which would put it somewhere in the $50 range. let me ask about the fx hit. one reason they downgraded the forecast is that the fx hit will be worse than anticipated. were upthout the fx hit but it basically was wiped away by foreign currency sales. how much is the stronger dollar a problem? againstis the world

importer and cheaper goods from china might help. guest: most companies are now using this as an excuse. sometimes the exchange rate is with you, sometimes it is against you. it's expensive to hedge, so no one can hedge it. walmart sells products in the u.s. that are made outside the u.s., so the strong dollar should have helped. the fact they are saying it is negative, you would have thought it would be positive. what i want to go back to you said about macy's. we got the report from macy's earlier in the week. they talked about having to do a promotion because of congestion at west coast ports and lowered their guidance for the year. is macy's a high compared to -- is macy's a by compared to walmart? guest: absolutely. we have had a buy on macy's for quite some time.

auto sales were up significantly and if you are buying cars, you are taking money -- rate the $16 million automobile business -- guest: we had a record month in august sales and it seems to be continuing. auto sales are where the consumer is focused, but that will correct itself and people will go back to buying. i think macy's will have a strong holiday season. olivia: back to walmart -- management says spending a billion dollars to raise wages and improving the front of the store experience, they say that it is already paying off and is why, sales are up 1.5%. do you agree? guest: yes, but they need to. shoppingthe walmart experience does not rate high. the need to improve the stores, improve their merchandising --

pimm: who should they be looking to to emulate? this worldd there's of online shopping and walmart is trying to get that right compared to amazon. macy's also gets online for film and with in-store purchases. if they don't have a specific item, they will say we can ship it to you and it can be a your house the next day. in-storeas to combine sales with online for film and, yet they do not have the staff for that. terry lundgren fan. i think he's done a great job. still ahead on the bloomberg market day, the future of your automobile is not going to be built around its engine, but the maps used to navigate. who is ahead in this game? we will give you the details. ♪

olivia: welcome back to the bloomberg market day. i'm olivia sterns. pimm: and i'm pimm fox. olivia: makers of memory chips are sliding today. julie hyman has the details. micron is affected by the downgraded its the worst performer on the s&p 500 today. downgradingica is the group, saying they are spending too much money on capital expenditures and that they lack discipline on. this is amidst a tough environment for these chipmakers. this chart comes to us from bloomberg intelligence. this is the price to sales ratio of some of the memory makers

versus the semi conductor index, say broader measure of the chipmaker. lagged. it has really so you have micron in the blue and pink. held up well and then has fallen as the semi conductor index continues to go higher. memory chipmakers have been hit hard because they are more exposed to personal computers. we all know what has been happening in the market for personal computers. some are also very exposed to asia. company -- the solar initially the stock was higher after it formed an investment deal with goldman sachs to tap a billion dollars in cash and loans, but the stock turned lower. it might have to do with convertible stocks. it's unclear exactly what is hitting it. a quick check on patterson

companies, the seller of dental equipment and veterinary supply. the company may be willing to take itself private or put itself up for sale and that's spurring a 3.5% gain. olivia: thank you so much. julie: hopefully that wasn't too muddy. olivia: we will let it slide. pimm: let's look at some of the top stories crossing the bloomberg right now. the largest automobile retailer in the country is getting larger. eyes inion has read of dealerships representing more than $16 million in annual sales. the dealers are located in georgia, alabama, tennessee and maryland and each of the last five years, autonation's operating income has risen by double digits. has plan topentagon

increase its use of drones by 50% over the next several years. the air force has been asked to cut down the number of drone missions it is running to reduce stress on the personnel who control them. and you remember this fad from last year -- people dumping ice water all over their heads to raise money for a great cause -- that stunt wrought in $115 million. some of that money will go to biogen and columbia university will use it to map genes in clinical traits of 1500 people with als. those are your top stories at this hour. softbank just announced increase -- an increase in their shares of sprint will stop there's a battle for the future of the american highway between technology copies like uber,

apple and google. even the chinese search giant i do. they are trying to acquire the the roadiled maps on as our own cory johnson reports. there is a car race underway here -- pitting traditional carmakers against silicon valley, getting self driving cars on the road first. and maps are the tool in this race. >> it's really about getting from a to be. maps are transitioning to being something embedded inside the car. it's going to become a component in a car that will go from a to b and help the car drive. cory: it's also knowing everything in real time. so why would the m w, daimler and audi team up to spend $3.1 billion to acquire gnocchi a's map division? because the car makers are afraid of ceding control to the

likes of apple and google. >> there are not that many map data sets in the world. maps,apple with its google and its maps, tom-tom and gnocchi a -- no kia. so the automakers may have landed a sweet deal. pimm: cory johnson in new york. i took a wrong turn. my map was not working. pimm: everybody has been watching what may happen to tom-tom. cory: the big take away i have from this map thing is understand that the consumer wants to get in the car, put your phone down and have it work away you like to. you want to throw your iphone down and you want to see that on the screen of your car.

the problem is the carmakers do not trust google and they do not trust apple and i don't want to give up their dashboard to an outside company. olivia: i don't necessarily want to use nokia maps. bmw and mercedes are going to think you want to use this maps. they do not want to see that to those other companies. the self driving car, what is going on right now with the , is a distrust of those companies because they want to control not just what happens in the car you're driving, but future revenue streams where you might see maps do something like a yelp service. makes a great mapping technology? between --difference traffic,l-time data on

things that google map does. is way that the forefront of this? olivia: it is the biggest platform. it has a network dynamic -- the more people using ways -- whether it's an iphone or galaxy phone or android phone, every single phone that has it is sending data to the cloud, providing real-time data for other users. so the more people use wave -- pimm: owned by google and an israeli company. israeli founders based in silicon valley. who buys tom-tom? cory: that's an open question. there's an open source player that will let the carmakers do what they want.

carmakers could use it and customize it as they choose. i did a story on them and london and london is a lot harder to get around. much.you so interesting insight on map technology. cory: i'm here to help. i don't care what they say. olivia: still to come, the irs, the hack turns out it's a lot bigger than they initially said it was. that tori is next. -- that story is next. ♪

olivia: good morning and welcome back to the bloomberg market day. several times a day i find a story that gets me work up and i go to pimm fox and say can you believe it? this is bananas. this man is unflappable.

it's an possible to ruffle his feathers, but today, we found a story that has him worked up and irss about the irs stop the says the recent hack was bigger than they reported it was. why should i be upset? because you don't have a choice. it doesn't matter how secure you make your computer or how secure your own personal environment, if you are filing your taxes with the iris electronically, it's not only under the purview of the irs, but always hackers. this hack is not only by stealing your name and these security number, hackers can use this information to file a false return. out 5.8 billion worth of tax refund to hackers in 2013. this information can lose the

u.s. government a lot of money. but also this information is used by mortgage lenders. want to take out a mortgage on the house, that information is available publicly. imagine thing able to publicly use this information and get a mortgage for a nonexistent house for a nonexistent person. the irs does not have the capability to know how bad the attack is. they admit this is a problem. they have been trying to work with state governments to put together a formula that would prevent this from being a bigger issue, but trying to do anything coordinated between the states and federal government is fraught with complexity and i think this is an interesting story. olivia: this is the most worked up you get. pimm: think about what was the alternative for you filed electronically. it filed with paper because

-- you worried about it was inefficient and could be misused. at this point, you've spent the 5.8 ilion dollars that may be saved by going electronic, but you have no way to control this information once it is out. so, identity theft, particularly when it relates to paying your taxes, i think that's worrisome. you have sold me. it's outrageous and i am terrified. pimm: you don't have to be terrified. olivia: it is serious and i'm going to talk to my credit agent. much more on have the bloomberg market day coming up. a look at shell drilling in the arctic. ♪

pimm: welcome back to the bloomberg market day. i'm pimm fox. let's look at the top story this

hour -- shares of walmart are falling today. the world's largest retailer has cut its annual earnings forecast. it down more than 3%. walmart says it has been hit by currency fluctuations and high pay relief for employees. cops or sales came in higher than estimated. wants to upgrade its ability to track russian submarines. it's planning to deploy sophisticated devices made by lockheed martin. the device is already being used in the pacific theater. the navy wants to use it in the atlantic to counter increased patrols by russian submarines. nbc universal is looking for the secret to attracting younger audiences. nbc confirmed it is investing $200 million in buzz feed -- a digital the oh site aimed at mainly millenials. nbc says the companies will explore partnerships.

recently, they invested another site called box media. and the force will be with you on japan's largest airlines this fall. all the pond airways will fly 787 dreamliner's painted with the image of the famous robot drum star wars, r2-d2. two other planes will also be decorated in a star wars motif as part of the hype surrounding new star wars the films scheduled for release in december. those are your top stories at the moment. europe,are closing in so for the latest, let's go to elliott gotkine in london. elliott: a selloff in the wake of the chinese yuan devaluation. you can see gains in spain, gains in austria and the benelux countries. the clients france, germany and the u.k..

expect prices to be stagnant. the pound making gains today. a sick materials one of the big decliners. still suffering along with oil prices. there are some companies bucking the trend. glencore is out with earnings tomorrow. harris associates upping its stake in glencore. at thiseen trading lowest level since its ipo. is one of the big gainers as well. wire card, the biggest gainer on the stoxx 600. that processesny payments. a good set of results today. downve commodity companies 2%. a big copper miner down as well and the greek banks, the

national rank of greece down 7%. greece is waiting for five european parliaments to approve its third bailout before it can get its hands on that money. pimm: thank you very much. coming up on the bloomberg market day. has burnedup's sequa through half its cash in just months. we will try to explain what happened. new jobs numbers showed getting a college education still pays, but is it worth the cost to mark the fda will vote on a drug being called the female viagra. we will look at why it has been causing so much controversy. the selloff in commodities continued under concern of global growth with oil trading near its lowest level in six years before west texas intermediate futures reversed its outlook. they say opec can do very little

to stop the outlook on its own. analyst joins us now from london. rate to have you with me. let's start out talking about the price decline. is it going to continue? near term, we do have downward pressure on prices. refiners actually stop buying as they head into maintenance. i do think there's further downward pressure. tell us about the supply of oil. will it continue to increase? --st: i think we see sims some response from non-opec right now. i think the big wild car is iraq and saudi arabia are producing at record levels, but iranian levels concert coming into the marketplace as sanctions he's. increasewe see a small

and we see declines moving into the second quarter of next year. pimm: you just mentioned mexican prices responding. can you talk about that? guest: the count has fallen by 60% since the price began. supporting u.s. oil production, so i lack of drilling will result in the decline starting to kick in and u.s. production moving from what has been a steep incline into a declining situation. we are seeing the eia is reporting they expect production from shale plays to be down about 90 euros a day. does the strength of the u.s. dollar have a role to play in what's going on in the oil markets? to a certains extent. we generally expect a negative correlation but it doesn't always have to hold true.

particularly in a situation where the dollar is strong, you see a devaluation in the chinese currency. it does have significant implications on the band. -- on demand. pimm: i want to get your thoughts on china. we seen strong growth out of china despite what has been mixed economic data. i think it is something that there's watching. part of the demand has been for the restocking of their strategic petroleum reserve which could start to slow. the underlying demand for products that has been so strong so far, we need to see that continue for oil prices to recover. your own oilhad tanker, which you let it float somewhere in the ocean until --ces increased mark increased? guest: i think the problem is

right now that it's not enough for me to pay to charter the tanker. i think we will see an incline them prices over the next several months. seasonally weak in the near term but oil is at an unsustainably low level at this point. pimm: i want to get your comments on shell being approved to drill in the arctic. is this the right time to be doing it? short timee are only windows when this can occur and shall had mobilized the flotilla that needs to go into the sea in order to be able to drill. wheree a two-month window shell will try to drill one or two wells and then they have to move out again. a matter of taking advantage of the window of opportunity. how about taking advantage of lower gasoline prices in the united states.

will gasoline prices move lower or will refiners people to keep keep then mark -- margin? guest: pump prices are going to go lower and it's a lag of fact. expect if that happens -- margins have been very strong but we are coming to the end of the peak hassling demand season, a compression see in refiner margins and that is good for the consumer. pimm: thank you very much for joining me. still ahead on the bloomberg market day, we are going to take a look at what's coming up in the rest of the economic reports this week. ♪

pimm: welcome back to the bloomberg market day. i'm pimm fox. i want to go to julie hyman in the newsroom for some news about target and a visa and a settlement. julie: remember target at the massive data reach and has reached a settlement with visa over the data breach. in a phone interview earlier, the wall street journal reported they agreed to play card issuers up to $67 million for costs related to that reach back in the winter of 2013. the journal said people familiar with the situation -- target has confirmed it reached a settlement and the company says the cost of the settlement will

reflect in its results from 2013 and 2014. provision for those costs at that point in time. we will bring you more details as we get them. target just announcing management changes yesterday with its cfo moving into a newly created role and it hired a new cfo. target shares are up about 2% in today's session. looks like there was not a lot of stock reaction, but we will update you when we get more information. pimm: thank you very much. shares of target up about 2%. let's take a look at some of the top stories crossing the bloomberg right now. germany's chancellor, angela lawmakers tobbying vote for the greek bailout program. her coalition has consistently backed the greek a lot better number of lawmakers in her caucus are expected to vote

against this one. in the last hour, spain's parliament approved the bailout. one of the hostages the french terror attack is suing some television and radio stations. the man was hiding in a cupboard when at least three tv and radio stations revealed his possible presence. he was eventually released unharmed, but 17 people died in those attacks along with three gunmen. russian president vladimir putin is at it again. he has taken a small submersible blackto the bottom of the sea to sea and a jet off the coast of crimea. he went scuba diving and brought up in ancient greek pottery and it was later discovered that the items were planted for him to find. those are your top stories at the moment. sometimes, even the smart money

gets burned. hasyle group toss sequa been burning through half of its cash in three months according to people with knowledge with the company's performance. after exposing its cash position, the price of their debt plunged from around $.98 in march 2 $.86 currently. distressler is the that reporter for bloomberg news and joins me for more. it'sme about sequa and relationship with carlisle. guest: they are one of carlisle's portfolio companies. they do not report their figures publicly. it is in the industrial space, so they have contracts with u.s. airports and northrup grumman to do refueling of jet engines and things like that. they also have contracts with commercial airlines. pimm: they make things to repair

the blades on the turbines and various other aerospace equipment. they have that metal wire coating business. chrome alloy is one division. guest: and that's where the problems are. pimm: what are the problems? guest: the problem is with these companies that are what they call aftermarket companies, they are not the original manufacturers. ge and we mentioned a couple of others in the story, they are getting into that space and they we are the manufacturers and we should make those components in the new cars. so for companies like that, this has been happening for a little while. but when you have a quarter when you burn half of your cash, that is a big deal for investors. havea: have you -- pimm: you been able to talk to anybody

involved with the company? guest: it is something we are interested in because this is a as getty and that has been a hot topic in distressed markets right now. alloyas far as the chrome business and the aerospace business, are they going to compete against ge and other companies like goodrich? guest: exactly. they are trying to buy a company in the u k that actually makes the components and they are trying to get further into that business where they partner with some of the original component manufacturers. but they had a lot of problems with that acquisition and that's part of the reason or cash burn was so bad. is there any potential they will not make payments on the bonds? can always have a

private equity firm come in and say here's some additional capital. pimm: a cash infusion if they needed. but this is a good thing if people are going to do their , maybek, these bonds this is a good investment now that it has fallen? guest: exactly. secure term limit. you don't usually see loans at that price unless it is a distressed investment. pimm: what is the market like for distressed debt right now? is it hot? guest: i think it's getting there. there have been the same names around for the last year and a half, so they are interested to have a company like this that they knew her name for them. pimm: and is not an energy company. so they are curious about it and there's an

investment opportunity there. maybe they could send you an e-mail and can follow up from there. still ahead, getting an education still pays, at least when it comes to trying to get a job. we will explain the details, next. ♪

pimm: welcome back to the bloomberg market day. i'm pimm fox. a shot from our roof camera looking south to manhattan. facebookpanies like and google are hiring without college degrees, a recent study shows of the 6.6 million jobs during the recovery, 90% of the high earning positions went to those that have at least a bachelor's degree. with me now to discuss it is my coat -- is my cohost for the next half hour, betty liu.

they: so if you are in the peter thiel school of thought, whitey to go to school, this is why you do. of all the jobs we have created -2008 recession, 97% of them, 2.8 million jobs have gone to people with a bachelors degree, at least a bachelors degree. what do we mean by good jobs? any job that pays above the $3000 a year. might not sound like much, but this is average in the country. good jobs are increasing. it kind of debunks the whole myth that after the recession we job growth andge in fact that's not true. million low-wage jobs have been created and that's defined as any job that

pays $28,000 and under. remind people that our earnings trajectory, if you have a bachelors degree, it will continue to go up, up, and up. it peaks right about your 40's. that is where you are earning the most. i'm not looking at you that's they, but life trajectory of a person's earning career. [laughter] pimm: very good. we will see you in just a little bit. now it's time for today's options inside. let's go right to our senior markets correspondent, julie hyman. look at what's going on in stocks in terms of where the major averages are

trading. they've been down for the session and remains so for this russian. data in terms of housing and consumer discretionary is up that energy is leading things down as oil prices continue to be volatile. joining me for today's options inside is the chief investment officer at recon capital partners. we were talking with an analyst yesterday about this outlook for volatility. it versusoking at different indices as well. yesterday was an interesting day in the options market. usually we see some institutional hedging and people come in and are cash settled. that's where you see a lot of people position themselves. were positioning themselves

between zero and 20 delta, meaning at the money strike. when we look at the etf that saw 2.4he s&p 500, you times the amount seeing put versus call. that was going further out so we have not seen that. julie: what explains that? guest: the market is going into the fall -- volatility drops off but then picks up and in -- institutional investors are doing it right now. market makers and retail investors are going out into the future, going further out as well, but we have been in this band which is why we are seeing institutional investors really keep it tight. so they are not expecting volatility in the short term? guest: they are not expecting it

to spike short-term. your looking at apple because there has been some bearish sentiment recently. what is your outlook for this? guest: the outlook is to take a nice conservative way and turned a dividend paying strategy so you can go further out to january and sell a 110 strike put. you are going to take it at about five dollars for that and it has downside protection. the stock will go down and you receive the indicative options yield. but if it goes further down, you are capitalizing now on apple where the implied volatility has moved up. capitaltaking in more

and it's a good strategy to do. was looking at those yields on apple, so if it is successful, you are collecting more than they dividend yield on the stock. guest: you will be collecting more than that. it the same thing as doing a covered call, where you are selling the call against it, but this is a smoother way to do it. you are getting a decent yield on a name you like. if you're happy owning apple and getting the dividend going in the future, q2 is seasonally weak. we think is going to run up into the fall, so you will be able to take advantage of that. julie: good to talk to you as always. much more bloomberg market day coming up.

pimm: good day. it is 9 a.m. in san francisco and it is midnight in hong kong. betty: welcome to the bloomberg market day.

cuts its annual earnings forecast as the world's biggest retailer feels the effect of current see fluctuations, but it is a different story for home depot, benefiting from the rise in home prices. pimm: hillary clinton makes a new effort to reach voters in iowa and shrug off criticism she's been to distant and unrelated ball in order to win the election. but will this strategy work? betty: and we will find out why oil companies are taking aim at tom stier -- the billionaire hedge fund starter turned climate change ambassador. pimm: good afternoon. i'm pimm fox. betty: i'm betty liu. let's look at how markets are trading. we are losing some steam with stocks fluctuating in the morning and now pretty much