♪ olivia: good morning and welcome back. pimm: we are 90 minutes into the trading day. let's take a look at how markets are trading right now. a rally going on in stocks. the s&p gains 1.5%. dow jones also adding more than 1.5%. the nasdaq up one and three quarters of a percent. also moved higher for monsanto. olivia: before we get to the broader markets, let's check in on monsanto and vi syngenta. men cento is walking away from its bid for syngenta. they were higher on news that bloomberg reported that they had upped its offer for syngenta and syngenta shares tanking.

trading below where they were when the offer first broke. we want to show you what is happening in the treasury market. yields on the 10-year note up. a little bit of a selloff. we did see the treasury comment -- turnaround on comments from dudley.-- bill he said we really hope we can raise rates this year. the current market volatility is not about us but market moves can affect u.s. growth. these are the things that traders are trying to sort out right now including currency traders. that is the dollar index. let's see what is happening on the right-hand side of the screen. pimm: let's take a look at some of the top headlines. we are following breaking news this morning from virginia.

the general manager of a television station in central virginia near roanoke says two employees, a reporter and photographer, were shot and killed while on air. they say the victims are allison parker and adam ward. the station says in tweets and on its website that the incident happened at a shopping mall as virginia governor terry mcauliffe says the shooter is believed to be a disgruntled employee of the television station. the governor says he is now being -- that the suspect is now being chased by police on interstate 64. the governor says his arrest should be imminent. , this year's moving higher after the company announces it is dropping its multibillion-dollar takeover offer for the swiss business

company syngenta. they indicated the offer did not meet its expectations. the company also rejected an earlier bid from an cento. monsanto says they will do a buyback program as soon as possible. olivia: the world's largest oil field services provider is getting even bigger. camerone agreed to buy international at almost $15 billion. is a 56% premium to the closing price yesterday. it provides greater one-stop shopping for oil drillers. u.s. royce -- roads are more clogged. americans are stuck in traffic about 5% more than they were in 2007. commuters in washington dc please 82 hours each year to rush-hour slowdowns. amazon isrst time

offering one hour delivery of wine, beer, and liquor in the u.s. it is limited to just seattle. for quick how call delivery in london. very hard to get anything delivered in london. pimm: amazon also does vacation and trips. amazon travel. those are your top stories at the moment. new york federal reserve chief william dudley says the recent selloff in markets has reduced the case for a rate hike in september. we're joined by carl. what you make of these comments by william dudley? >> he is known to be slightly to the dovish side of janet yellen. pimm: he would have lower interest rates than higher? >> he would prefer to move more slowly.

that has been his stance of a long. he did say do not overreact because the recent argan developments -- market develop its could be a temporary phenomenon. he is watching and waiting to see with the feedback data is. by the september meeting we might not have a clear definition. he really is in the watch and wait cap. -- he is certainly not adamantly opposed to moving in september but he doesn't have an itchy trigger finger. not a whole lot of new information here. he bobbed and weaved around recent developments. olivia: he is saying that the u.s. economy is performing quite well. that is what it looks like if you look at durable goods this morning. home sales. >> consumer confidence was a big one. and the labor components of that report basically posting their best levels, their best readings

since the end of the last recession. it shows the domestic economy not looking that bad. i will tie the 2 -- pimm: durable goods. >> durable goods they were quite remarkable. very solid orders data, order backlog, inventories starting to level out. this was a phenomenal report when we probably should've gotten a negative rating because there was this payback on the paris air show. pimm: what do you mean? >> surge in aircraft orders in june. we should have seen a pullback in july that did not materialize . the manufacturing sector is showing signs of life. certainly in encouraging signal

from a sector that it in the first half of this year. olivia: we've been watching the fed funds futures rate. wirp on your bloomberg terminal. even today on the back of these comments, the likelihood of a september move has gone from 20% to 24%. if the fed does wait until september, how do they justify given the economic strength? >> dudley said it seems like the prospect for moving in september had diminished. you saw the market react accordingly. he went on to say the second half of the sentence was however the prospects could further improve as we move closer to the september meeting. he was watching to see if there was prolonged impact from these develop its or just short-term volatility. i think december is awkward because year-end, a lot of folks have looks closed, less liquidity. .ou risk a big market reaction

a whiff of what we saw in late august when liquidity was also thin. you see that several times over. the summer is complicated. -- december is obligated. at the around this is september meeting we need to wait a little bit longer. now it is fair game for a rate increase. and since a compelling signal to the market that we want to go ahead with the rate increase. pimm: i was able to call up the wirp function. it shows the probability measured by various market participants, the 22% move up in the upper left-hand corner. i am going to try to do that. olivia: 22%? when i got on there it was 28%. pimm: like many stocks the other day. >> we get some solid data.

pimm: is it of it at all possible that the federal reserve raises rates 25 basis points? >> whenever they want. october a wednesday in or thursday in november that nobody has any plans. will it not be a surprise? a it will certainly not be on date that is not a fed meeting. is either the september fed meeting, october, december, what not. they can make emergency moves on an unscheduled basis. they are not going to raise rates. olivia: what is the number one thing you are listening for from jackson hole this week? >> the fisher speech on inflation on saturday. if he says we are a lot longer timeline away from getting our inflation target, that will be a compelling signal to the markets that the fed this not have the gumption to get off of the zero bound. pimm: just to mention that

kathleen hays is winding her way, and michael mckee is winding their way to jackson hole. we will have full coverage about the jackson hole meeting coming up. >> i will be here. pimm: interpreting. , carl.ou very much we will look at how commodities fared this summer. we will tell you what happened to copper when no one wants it. ♪

♪ olivia: this is "bloomberg

markets a." pimm: let's look at how stocks are performing. one sector in particular leading the rally. julie has more. julie: we had this overall rally today though we had some companies out with earnings in the retail sector. let's start with express. they are out with comparable sales that rose by 7%, more than twice what analysts indicated. it is also raising its forecast for the full year for comparable cop sales -- comp sales. the stock is trading at its highest since december 2013. abercrombie & fitch without a permanent ceo following the departure of mike jeffries in december. however, an unexpected gain and profit. $.12 per share. here to comp sales are better than estimated that they still

fell by 4%. bloomberg intelligence has a look at the price to earnings ratio for abercrombie. take a look at my bloomberg terminal. these guys are still pretty expensive. abercrombie is trading at a p abouturban outfitters at 17. even though we have seen these guys struggle, they are still trading at a premium to the s&p 500. a couple of other retailers. chico's beating as well. total sales of about .5%. place is upgraded to a positive. the analyst saying margins have been holding up well there. 1.4%.a gain of

you would think that some discretionary stocks -- i don't know. a look at some of the top stories at this hour. james holmes will finally be formally sentenced to life in prison for that mass murder at a movie theater. he was convicted of murdering 12 people in trying to kill 70 others in 2012. jurors could not agree on giving him the death penalty. job cuts are on the way at a finnish company that makes "angry birds." they plan to cut one third of their 700 workers. there have more than 2 billion downloads of the game but have yet to be able to duplicate its incredible success. production back to the united states. demand for trucks is booming here. the two models will be made at a factory in wayne, michigan. they currently make several car

models that may eventually be built in mexico. those are your top stories. pimm: in a week of high anxiety for investors news on commodities has been especially unsettling. on monday the bloombergs commodities index sank to its lowest levels since 1999. it's been a difficult summer for oil investors as well as those buying metals. we want to find out more from our commodities expert, alex steele. olivia: so much for a relaxed -- pimm: you would have missed a lot of market action. a look at whate oil has done in the last few months, it is been a tremendous ride down 33%. we sawere reversals after oil went up to $65 and then half of that within a few months.

it had a lot of repercussions on the industry. if you look at the forward curve for oil, back a memorial day -- pimm: this is what people will pay in the future? >> yes. at memorial day it was going to be $62 a barrel. now we are looking at $45 oil. the long-term expectation was $75 by 2023. there are some severe long-term repercussions for this. olivia: people want to hear about were analyst think the floor is. >> producers wanted hedging. so when there is a rally they sell oil to lock in better prices. then they're able to produce more oil despite lower prices, that means lower prices. they were talking about $32.80. cumberland advisors saying between $10 and $20 per barrel.

the issue was encapsulated by goldman sachs and their 3-d scenario they came out this summer. divergence deflation and deleveraging. divergence means the u.s. is pretty good, better than other countries. deflation means that is global currencies fall, it's easier to reduce gas and oil and other countries. therefore why not keep producing? in the last is deleveraging which means countries like china are changing their economy and they need less stuff. pimm: i'm glad you mentioned china. tell us about copper. >> a very similar story. it looks like we're going to hit in january per pound 2016. the forward curve is pricing it much more down to go. china eats up about half of the world copper demand. no one seems to really know how

much copper is being used there and for what. aboutweaver looking good $2.30. $2.34 per pound. >> the other chart we were looking at is the premium you would pay to get copper in shanghai versus london. the premium in shanghai is only risen 71% since the end of may. that implies strong demand. in london it is actually falling 18%. that would imply we have seen some underlying demand in china versus the rest of the world. where is it all going? pimm: what about all the australian producers? we've been following freeport. they have copper. why don't the chinese despite their? -- buy from them? >> part of it is a supply think

in china. production has fallen 10% cement -- so they might need to buy to pay up for their own disruptions. if you can't sell stocks in china, you might shorten sell copper. what that means is sometimes just import copper in order to fulfill a trade in china. up, if we take a look at copper imports, they have been rising. but no one knows if it is an end user play. those charged show there is money to be made in the arbitrage. and what about gold? you would've thought a lot of money would been flowing into what we considered the safest asset. >> a few weeks ago we were talking $850 gold, under $1000 an ounce.

it has been a very difficult time for gold, especially hurt in terms of china because their interest rates are still positive because deflation is more prominent than inflation. that has affected physical demand in the country as well. it will all be about monetary policy in the u.s. we saw the dollar index pair some of its early gains. not the move you might expect in the gold market. pimm: and you have gold miners. large capital tends to take years to come online. once it comes online at a price below would you thought gold was going to be. >> that is the commodity cycle. that is why it is a hard industry to plan. thank you for having me on. pimm: bloombergs alix steel. come, u.s.ll to

lobbyists are spending lots of money on tv ads on iran and unexcited places. we will tell you i. ♪

♪ this is "bloomberg market day." olivia: lobbying groups are spending heavily to influence public opinion on the nuclear agreement with iran. tim is tracking an explosion of iran-related tv spots. he joins us from the washington bureau. which side is spending more money? >> at this point the groups that are against our spending a lot of money. it is interesting where they are spending it. some places you would expect, big cities but in places like north dakota. one of the top markets to receive ads for and against the

deal. pimm: why is north dakota being highlighted? >> it's the math behind how the iran deal could either be approved or disapproved here in washington. if congress blocks the deal in september, the president could and toat decision override his veto both the house and senate would need two thirds majority to do so. he gets into the math. some democrats in the senate would have to go against the president. there are a handful of not yet said where they stand. one of them is from north dakota. olivia: why is richmond, virginia the number one spot? >> if you look at the list of places where they are spending, it is a list of lawmakers who have in the past month or two not been clear on how they will vote. pimm: who is the biggest spender? >> the biggest group is a group backed by apac, the american

israel group here in d.c. they are behind a group called citizens against a nuclear iran. they have spent more than $9 million on tv ads according to the data we looked at and they promise to spend $20 million on the national tv campaign. pimm: thank you very much. interesting. pac.million being spent by a olivia: that does it for me. thank you for having me. pimm: we will have much more coming up. ♪

♪ this is "bloomberg market day." some of the top stories at this hour. breaking news from virginia.

police near roanoke are chasing a man suspected of killing two alevision station employees, reporter and photographer shot while they were on air. j says the victims are allison parker and adam ward. the station says and tweets and in a story on its website that the incident happened at a shopping center. terryia governer mcauliffe says it is believed to be a disgruntled employee of the television station. the suspect is being chased by police on interstate 64. the governor says his arrest should be imminent. monsanto has abandoned the takeover offers for syngenta. had previously indicated the offer did not meet its expectations. they also rejected an earlier bid. monsanto says it will now resume a share buyback program as soon as possible.

we have heard from new york federal reserve president william dudley earlier today saying international financial developments may have an impact on if the fed decides to raise interest rates next month. >> at this moment the decision to be in the normalization process at the september meeting seems less compelling to me then it was a few weeks ago. normalization could become more compelling of the time of the meeting. fed funds futures are now pricing in at 22% chance of a september rate increase. it was 28% before he spoke. the draft joe biden movement is picking up steam. says itweek a super pac will have a presence in all 50 states. the organization called draft of says moreraft biden

than 250,000 people have signed on for the effort. markets are closing in europe. let's go to hans nichols in berlin. hans: we see the equity markets turning red. it is a light red. it is clearly in the red territory. we're having some doubt about the stocks 600. if you look at the ftse 100, that is down 1.25%. -- also -- and then it would negative again. the biggest gainer, the mover what is happened in paddy power. you saw both of them really jump. paddy power jumped 18%. 20%.ir increase to

that with a 14.8 billion euro deal. we saw some jumps on aker. going up 6%.rofeck on up agerman 10 year little bit. the yield down about two basis points. yield the greek 10 year all the way down 23 basis points to about 8.8%. still pretty substantial. points. down for basis italy pretty much flat, down about one basis point. back to you. pimm: thank you very much. black monday, tough tuesday, wobbly wednesday. that is how this week is playing out in the chinese stock markets. they extended deepest five-day drop since 1996 as lower interest rates failed to hold a

$5 trillion route. is it time to take a deep breath and sell or are we raising false alarms in china? nicholas lardy is from the peterson institute. he joins his from washington dc. characterize what is going on in china right now for all of our listeners. >> i think it is a substantial correction. we had an enormous run-up in the year two early june -- to early june. massive increases in price earnings. i think a correction was inevitable and we're seeing it play out. pimm: will it continue? close, whichat the is a big component of the market, the price earnings was still at 37 which is still pretty lofty.

they could be more to come. i cannot predict but there could be more to come, even on a rational basis. we are getting more momentum selling now. the psychological effect of a correcting market. an overshoot is a strong possibility. pimm: will the performance of the chinese stock market continued to drag on the performance of stocks and other countries? >> there certainly has been a knockdown effect. i'm not sure i would collect causation, it looks more like correlation to me. i think the fundamentals is that the chinese economy is continuing to perform reasonably well. wages are going up, employment generation a strong, disposable income is growing strongly. consumption is growing strongly. abel have gotten a little over fixated on industrial growth which has been weakening. that is due to a property correction which should be

welcomed. china has been over investing in property. is there any historical perspective few can offer us as to what the effects of this downturn, 1/5 of the value wiped out. what this would tell us about the future health of the chinese economy in 3-5 years from now? thing tok the safest say is that there have historically been no correlation, no connection between what is happening in the equity market and what is happening in the real economy. 2007,he peak in october prices declined 70%. exhaustive done investigations tried to figure out if that had any subsequent effect on the economic growth and concluded it was irrelevant. that is no guarantee that this time it could not be different. hypothesis isng

that the effect on the real economy would likely be for a small. pimm: with that indicate there is value to be had in real enterprises doing real business in china? certainly there are a lot of sectors in china that are remarkably strong. profitability is still reasonably high, return on sales is reasonably high. most of these are now many consumption area. entertainment is booming. tourism, domestic tourism. every thing that feeds into private consumption is very strong. in particular services. china's per capita incomes are on a level that when incomes continue to rise, people spend a disproportionate extra amount on services. people already have pretty good food and clothing and the basics. they are looking for

improvements in the quality of their lives in the areas of health care, education. are there particular challenges that investors should pay attention to when trying to find these specific companies? what is the best way to go about investing in china's future? >> i think it is a big, big challenge for foreign investors to take advantage of the kind of trends that i talked about because there are so many restrictions entering into the market. collectively have about 3% of the market cap. that is a next-door nearly low number -- an extraordinarily low number and they go through all kinds of restrictions. i think it is a very tough to first anticipate

where the growth and opportunities are in and take advantage of them. pimm: do you think the stock market sell a full have any political repercussions in china? time more thans the 2007 correction i mentioned. the government made a big mistake this time of cheerleading on the way up and then intervening in the market for some period of time on the way down. they have tied their fate a bit to what happens in the market. i think it is fairly clear in the last three days they have given up on intervention. -- the route has continued in stocks are going down. i think that is a good sign their leading markets take their course without a heavy-handed government. pimm: thank you very much for spending time with us. senior fellow at the peterson institute for international economics. still ahead, wings, beer,

sports. we will hear how the buffalo wild wings chief executive is taking this philosophy around the world. ♪

♪ pimm: this is "bloomberg market day." some of the top stories crossing the bloomberg right now. there is a sign that corporate spending is increasing. orders for capital goods rose in july by more than a year. nonmilitary equipment other than aircraft rose 2.2%. orders for all goods expect to do last until at least three years expect -- exceeded all forecasts of economists surveyed by bloomberg.

the world's largest oil field services provider is getting bigger. the deal valued at almost $15 billion. that represents a 56% premium to cameron's closing price yesterday. they make palms and the blowout preventer oil wells. it provides greater one-stop shopping for oil exploration and production companies. this years of the team really -- retailer abercrombie and fitch arising today. they posted a surprise profit in the second quarter. sales were also better than estimated. they have been retooling their business since longtime chief executive mike jeffries left the company in december. those are your top stories at the moment. buffalo wild wings is in the midst of a massive expansion. 90-100 newng restaurants this year, including stores in mexico, the philippines, and dubai. but with that comes that.

sally smith explains the money side of the wing business to our own erik schatzker. >> for the first time we got into our line of credit with the purchase of restaurants. our cash flow is very strong and the debt will be paid off quickly. a question the private equity confronts all the time. optimal capital structure for a company like yours? >> that is what we're looking at right now. because we generate significant ifunts of cash we know that we can invest in ourselves and continued to add restaurants, bump of our remodel schedule, and acquire where he can, that is our number one thing. the second is to take a look at how we return cash to shareholders. in the form of stock repurchase, a dividend policy. we are talking to shareholders

to find what they would like. they with a combination of both. erik: how much debt with a want you to have? >> basic you can leverage your balance sheet to the industry average. we can take on some debt. after.ou know what i'm what the you feel is an appropriate amount of debt relative to the size of your enterprise? >> we would look at the industry average and have a similar amount of debt on a balance sheet. eri: there is a talk of returning some capital to shareholders. >> that would be the next thing after the ability to grow. how do you return capital to shareholders? share purchase or dividends? we are talking with our board right now. i am sure that in the next six to nine months we will have some sort of an announcement talking

about what we are going to do with the cash we generate. erik: explain to me some of the calculus the goes on in the boardroom and in your own head. what is the value of a dividend versus a share repurchase? >> as we talk with shareholders, the majority would prefer share repurchase. the connotation of a dead event -- dividend implies your growth is slowing down and it is a long-term commitment. you may start with a share repurchase and then introduce a dividend. i don't think the board thinks that having a small dividend indicates you have reached a peak. the industry generates a terminus amount of cash. i think we can do both. pimm: that was buffalo wild wings chief exec of sally smith. find the full interview on bloomberg.com. the army is rolling out a new

and improved tom the. humvee.-- we will give you a sneak preview.

♪ let's take a look at how stocks are fearing right now. we have a rally underway on wall street. the dow jones up 1.25%. s&p 500 moving higher, up by 1.25%. a lot of the moves coming from cameron international following the announcement of the acquisition of cameron by -- apple shares moving the market higher. let's look at the bond market and a little bit of a selloff. the yield goes up to 2.13 percent. a little bit of a selling in the treasury market. let's look at crude oil.

down about 6/10 of a percent. it continues its decline. let's look at precious metals. gold down more than 1.25%. gold.for an ounce of commodities continue the slump. copper losing value today and we see that the dollar ins of strengthening today as a result. the u.s. army has awarded a new $30ract for an additional billion of the vehicles that will replace the humbee. the winner was oshkosh. it beat out lockheed martin and a in general. they currently make the humvee. the new contract is valued at

almost $7 billion. this is for an initial run of about 17,000 vehicles. reacting, up more than 6%. let's bring in our own matt miller to tell us more about it. we were talking about this earlier. matt: i been waiting to hear who is going to win this contract for a long time. it's even more exciting than oshkosh because they are like the 90th biggest defense contract supplier in america. lockheed martin who went -- who they went up against is the number one. it was a david and goliath story. for sure you will see lawsuits from lockheed martin, from general dynamics, from all the other companies that were participating in this contest. it is not that the contract will be awarded right now. it's very interesting that

oshkosh is the winner. it is huge for them. , i believeehicle there were 22 prototypes offered as part of the selection process. this one in particular has a combination of features. sprinty durability of an off-road vehicle but all the blast resistant technology that the troops in iraq have learned is very important. matt: that they have been missing. the humvee is really old and outdated. they desperately need a replacement for it, especially if we ramp up the ground for against isis. we really need this. it will be a couple of years before he can -- pimm: we did the math. an initial run of 17,000 is about $400,000 per vehicle. you can either get a rolls. matt: the original hummer spohn

a number of commercial businesses. it will be interesting to see what this spawns. pimm: thank you very much. it is now time for today's options insights. julie? julie: let's take a quick look at where the major averages are. we are seeing them higher across the board. the s&p has cut in half his earlier gain, harkening back to what we saw yesterday at the end of session. we will see of these gains can be sustained. joining me is joe teague, joining us from out in chicago. investments is the name of his firm. joe, given what happened yesterday is there any way to predict using options are what you are seeing in the vix if we will and higher or lower today. >> i was noticing earlier before

we started, the october future was relatively very strong. it said to me that futures traders are predicting it will be rising. not only volatility, but future volatility will remain high going forward. even after the deadly statement failed to ignite the market i feel there has been a lot of weight on the front. there is still more trouble ahead. since i've been down here in the i have seen a lot of volatilitypi. course as i started we were at 250. a lot of aggressive moves going on down here. julie: interesting that people are not expecting it to go up from here.

we are seeing a stock rebound today. a lot of buying up momentum names, stocks that had not been supporting gains through the year. one is google. that is a stock that you are playing, you are bullish on that. whybsolutely. i am not sure it would be having such a hard time given the reason for the sell. of being taken down because of the rest the market is down. if the market can stabilize, i do feel that google can step back and go closer towards the high of the year. julie: your trade is on goog as opposed to googl. >> that is just and options liquidity. i would much rather on the a shr ares. the options liquidity for the c

shares has a longer history and it is easier to get in and out on a short-term basis for an options trader. julie: what exactly is your trade? >> i'm looking at the september --0-6 if the call spread. 640-650 call spread. that gives me close to a 41 payout ratio if google does go up to 650 by expiration. julie: bowl on google here. much.you so google rallying with the broad gains we are seeing today, particularly in internet stocks. we will have more as -- more coming right up. ♪

♪ pimm: good afternoon. matt: welcome to the bloomberg market day. rallyey hold on to the

and avoid the afternoon swoon that we saw yesterday? pimm: the shanghai composite falls again. the government's policy actions failed to stop the selling. we will look into whether china's change in stock market behavior will also change the decision of the federal reserve to raise interest rates. matt: ford may start making new editions of the bronco and the --ger. is the root on the room on the road in the credit market? ♪ pimm: good afternoon. matt: we want to begin with a look at the markets at the moment. take a look at the equities and they are up across the board. danes of more