unveiling the company's latest products. spencer on the integration of the former rival and the best and worst housing markets. mark: a corruption investigation has landed united ceo out of a job. will criminal charges come next? good day from bloomberg headquarters in new york. this is architected i mark crumpton, here with pimm fox. pimm: let's get a look to have markets are faring right now. taking a look at the dow jones industrial average come also lower by .6%. the nasdaq falling .3%.

a selloff in treasuries as well. the tenure and 30 year unchanged. -- 10 year and 30 year unchanged. down .2%.ock the drop was taking place just after one new york time when apple was unveiling the events. then, they started talking about price points and you saw the stock started to fall. let's take a look at the top stories we are following at this hour. in the european refugee crisis, one key leaders has there is a lack of union in the european union. the head of the european commission urging member nations to find a solution by next week. he says every eu country must take in some of the 160,000 refugees.

angela merkel agrees that quick action is needed. we need a binding agreement on a binding distribution it of refugees among all member states. it cannot stay the way it is right now. it would be a step forward if we could achieve what he is proposing today. mark: migrants are pouring into hungary, italy and greece. most of them fleeing the fighting in syria. the refugee crisis is europe's worst since world war ii. tryinghina's premieres to ease global concerns about the evaluation of the yuan. warants to avoid a currency and that his country's slowing economies operating in a reasonably range despite downward pressure. he made his remarks at the world economic forum's summer davos meeting in china. mark: the death toll in the ukraine conflict approaching

8000. guns and fighters from russia are blocking the path to peace. 18,000 people have been mooted since the conflict started in april of 2014. -- wounded. pimm: the apple event is underway in san francisco. it is a marketing extravaganza. we will talk about the ipad pro which is going to be bigger and with a stylus called the apple pencil. tim cook calls of the most powerful ipad. for more, let's go to cory johnson. thes standing outside auditorium in san francisco. cory: right behind me through those doors, we have phil shiller on the stage right now. talking about the new apple tv.

it was last upgraded in 2012. big upgrade as expected. the ability to use it syrian with your remote control to tell the tv what to do. siri.use you could say what funny tv shows are available and it would show up there. that is what they are trend to offer with apple tv device. the ability to use things like netflix. we've heard about apple negotiating with hollywood studios, talking mother own custom offerings. -- talking about their own custom offerings. pimm: thank you very much, cory johnson. yahoo!, the chief executive got slammed this morning.

her company was called an accidental hedge fund. it happened right here on bloomberg tv. tom keene was discussing yahoo! and marissa mayer with scott galloway. >> in my view, if she had not announced she was pregnant with twins, she would be out of the job in six months. i don't think any board in -- she wants to be seen got a reprieve from death row because she is pregnant with twins. i realize how awful that sounds, but she will go down as the most overpaid ceo in history. pimm: galloway said yahoo! should have been sold a long time ago. mark: lockheed martin cutting 500 jobs because of shipping government priorities. the jobs are in its information systems and global solutions unit.

cutbacks on the way at the nation's largest apartment store chain, macy's. they will close as many as 40 underperforming stores early next year. chief executive is extreme minting with lower price outlets and wants to improve the company's online sales performance. -- is experimenting. groupstate website zillow announced it has completed the lia.gration of tru the integration was slated to be completed by the end of the year. mark: the ceo joins us now with more on today's announcement and his take on housing. talk to us about this combination. spencer: it's a big deal for us. whether they be operators normal type family apartment buildings or real estate agents can buy media and is as will apply.

real estate agents have never been able to reach the size of the audience that they now can through zillow group. between 50 and 70% of all people shopping for homes are now on one of zillow's properties. based on your reach and the information you are receiving from the people that trulia, what is the best housing market in terms of rice appreciation and what is the worst market? spencer: it is a local market now. there is no national weather forecast. there is no national housing forecast. places like the bay area continue to be off the charts. san francisco values are still increasing 15% year-over-year. same with denver and san jose. please with strong local job growth. the rest of the country is not

as pretty. in july, the first down month over month home values nationwide. estate isd real generally slowing with a couple of talk it's a strength -- pockets of strength. mark: janet yellen has said that one of the things that keeps her up at night is the state of the u.s. housing market. how would you describe where we are and how will a rise in affect the u.s. housing market? spencer: i don't think janet yellen has to worry about rising interest rates on housing. there's lots of other things to worry about. footing,s on its own it's getting a little boring, which is good. that is stable, that is calm. it willnterest rates --

increase mortgage rates, which will not significantly impact housing. mortgage rates have been so low for so long, even after an uptick, they will still be so historically low that our data don't think it will have a significant impact. i'm not that worried about the impact. pimm: you pay $2.5 billion for trulia. when will that pay for itself? >> it is already paying for itself with our ad products. we issued a third of our shares to trulia. the combined audience of skill between the two brands now allows us to be very well position for these migrations of ad budgets onto the internet. the move to mobile as opposed to just desktop? >> absolutely. two thirds of our usage is now on the smart phones or tablets.

advertisers follow audience. whether it's on to youtube or instagram or facebook, eventually come and dollars moved to where the audience is and we have the audience. 2015 has been a peak year for mergers and acquisitions. are we any peak now? >> the volatility over the last couple of weeks and months doesn't scare executives. it scares ceos and boards. mark: does it scare you? >> a little bit. it causes us to really think about how much cash we want to have on hand, what might happen to the economy. that clenching up hurts m&a. the counter vale to this, tech companies have so much cash on the balance sheets that that is driving m&a. the reverberations from

china, from that evaluation of , is that a headwind that could affect the u.s. economy, specifically the housing market? >> i don't think the challenges and china will affect the u.s. housing market. buying $100,000 condos in cincinnati. the u.s. housing market will not be affected by the challenges in china. pimm: will you be in china soon? we have not gone there yet. we have a lot of work to do in the u.s. detailsill ahead, more out of apple's big developers conference. we are live in san francisco. ♪

mark: welcome back to the bloomberg market day. pimm: let's go straight to bloomberg's julie hyman. dow jones industrial average at one point today of 172 points. was not a specific catalyst that drove stocks lower. we've had this return in volatility. the second best day of the year could not sustain itself. as the tension ships to apple attention shifts to apple now, that is taking attention away from stocks. it looks to be unchanged to slightly negative. down about three cents right

now. we've seen a lot of gyrations here. this bike when tim cook talked about a new ipad pro. to other news announcements, we saw the stock go down a little bit. byproduct.le revenue -- by product over the last 10 years. the orange is the iphone. this shows you the importance of the iphone within the apple product universe. the ipad in green, macintosh and yellow and ipod in purple. we have not heard about the iphone yet. we have not yet got that news on the company's single most important product. as we look at this apple

presentation, we have to look at the ripple effect. the supply chain of apple, which is enormous. these are the customers, the outlets where you see phones sold in different devices sold. these are the suppliers ranked in terms of their importance to these companies revenue. percentage of revenue that comes from apple. they are ranked in terms of their projected sales versus apple. intel, computer sciences, some u.s. companies that went supplier list. all three of them are trading lower today. about the ripple effect to day. a couple companies whose products will be incorporated into apple products includes netflix where we will see a new interface.apple tv

the choice to look at netflix or hbo. netflix shares have been higher throughout the day. they are moving a little upward as we had that announcement. facebook messenger will be .vailable on the apple watch we have seen facebook shares also gaining some traction as we got that announcement. the stock has been up throughout the day. interesting action and go pro as well. go pro 2 will have some new app connectivity with various apple devices. the stock is down pretty sharply. this is the leg up when it got the mention at the presentation today. ons shows the apple impact the various companies that partner with it. even if, in this case, that affect this pleading. -- fleeting. the brief departure --

abrupt departure could be a critical point in the probe. mark: prosecutors are looking at whether united's decision to launch twice-weekly flights between newark and columbia south carolina report authority chairman owned a weekend home was a bribe or a shakedown. united was seeking millions in investments from the port authority. pimm: joining us now is george ferguson, airline analyst at bloomberg intelligence. what does it mean for investors? >> it is early days for us to figure it out. we cannot see any financial impact. united did not disclose any financial impact yesterday in their briefing. we will continue to watch to see that has an effect on their financial statements. clearly, losing the head of the airline is not going to help the

company as it manages some of its challenges like i.t. issues. that may slow down some of the change of the company. perhaps getting an outside person to run the company could help integrate the company a little bit better. >> what about the unions? does this affect any ongoing talks between the airline and its union members? >> i definitely think it will affect those talks. i don't know if it will be to the negative. it may slow it down a little bit. we are bringing in someone from the railroad who has experience working with union labor. that dynamic inside the company where you have either a continental or former united executive. you have someone coming from the outside. that might help those discussions. pimm: is the resignation of the chief executive, is that part of

an overall probe? what exactly is the contention? is it illegal to put together a slight route that is making money? how don't think we know hard this probe is going to go. it's deftly ongoing. -- definitely ongoing. relief him with a bunch of his pay. i'm not privy to his employment contract. right now, it looks like he was close enough to something to happen that united's board was not comfortable letting him retain the ceo and board seat. but not so much that it was criminal that they decided they would strip him of any of his perks. mark: we have 30 seconds left. you mentioned oscar, the president of cfx.

he is coming in to run the airline. what do we know about him? >> he has a number of challenges. united is the most exposed airline to overseas markets. he will bring something to the table with union discussions and such. pimm: thank you, george ferguson. up, more details out of apple's big developers conference. ♪

mark: san francisco that the big event in san francisco san francisco. apple just released a lineup of new products. cory johnson it has the

latest. cory: a significant change in the way apple tv works. it's been in the market for eight years or so. the most recent edition issued in 2012. , they've had to rely on apple partnerships to add new content and apps. apple opening up the apple tv device saying any app developer can write to us. ipadame way the iphone and allows for people to write apps. havethat means, you could many more ideas coming to this device. games. least of which, game developers can now approach this device, right games that can be played on the iphone or ipad. they want to get into those games, they want to play them on the big tv.

mark: has it finally caught up with roku or amazon fire tv? cory: sort of. the ultimate dream for these devices is to be the controller for your cable box or satellite box you can flip from channel to channel on the apple device. the xbox has built into it capability to be used as a cable tuner. there on the xbox but the cable companies don't like that. it would mean people will move away from the cable operators. comcast doesn't want you to use other streaming services. you can use amazon or netflix. you can buy a tivo box. comcast would prefer that you use comcast video-on-demand.

there is a battle between the over-the-top companies with apple to watch what you want when you want to watch it and .he comcast's of the world mark: tim cook talking about the iphone right now. pimm: stocks at session lows. the new selloff. apple down .5%. thank you very much. coming up, what gives with netflix stock? what is behind the stock's move. ♪

pimm: this is the bloomberg market day. let's get straight to the stories making news at this hour. citigroup pro-dex there is more than a better chance of a global

recession. the bank's chief economist says it's lighting demand from china and other emerging markets is the big problem. the announcement put the odds of a worldwide recession that 55%. kkr adding to its ownership of outside money managers as it expands beyond leveraged buyouts. they are taking a 25% stake in london-based hedge fund marshall ce.t no total price was disclosed but kkr says it will pay stock valued at $144 million in cash. -- and cash. the california surf wear chain quicksilver and quick stand. the company plans to turn control over to oaktree capital

pretty quicksilver has been losing customers to fast fashion retailers such as h&m. queenr milestone for elizabeth ii. she is now the longest reigning monarch in britain's history. the queen spent her day like she has so many others, doing her job. the 89-year-old monarch and her husband open a railway station. she briefly addressed the crowd. 6about 23,0022 days. this surpasses the record by queen victoria. at the moment, netflix trying to make a comeback. the stock ends a seven-day losing streak that sent it to a two-month low. as the decline about increased competition? clearly, i'm in the minority.

i have a sell on it. most of the street loves it. it's a really good company. the share price has gotten way ahead of itself. it is trading on ether. a couple hundred thousand subscribers about what we expected, adding less than 50 million in revenue. it was $12 billion higher than it is now. the stockion revenue, was trading at 250 times that revenue boost. that is crazy talk. visual are starting to realize the valuation is stretched. a lot of people rushed into the stock because they were benchmarked against it. netflix kept going on and their bonuses depend upon keeping up with netflix and they added the driving itum guys back down to 95. it is in the right range right now. >> netflix is one of those highflying momentum stocks.

the rating that have been earlier this year after netflix said its international goals would be met earlier than anticipated, that led to a lot of optimism from investors. seem tot that investors value international subscriber growth the same as domestic subscriber growth? disregardrs seem to that each country is a separate negotiation with separate content and different culture, different taste. isng into south korea, that completely different than going into canada or australia. they have to negotiate separate content. you have more bidders. investors are crazy to give them -- they have leverage on the domestic line. it's beginning to get towards saturation. they are not even close to

saturating internationally. they can add three or 400 million international subscribers and they will make 10 times what they make and the u.s. that is not true. they will get to 100 million international subscribers. tough.eally there is competition, costs are not fixed. they are going up everywhere. bringing it back home, if cable unbundling israel and over-the-top is real, is that one to raise or reduce the cost of acquiring exclusive content? ecosystem actually gets hurt by unbundling and by going over the top. the content creators are better off if i pay every month for 200 channels even if i watch 10 or 20.

once they unbundle come i will not paper 200 channels i don't watch. a little less. that is not good for the guys who create and sell content. there will be a scrambled and thathe cable bill incremental $50 a month of advertising revenue will flow somewhere. they will try to chase the eyeballs over the top. there will be more bidders and the content guys will have to raise price because fewer people will watch their content. topwill see deals like the your deal with amazon for $30 million. -- for $250 million. the top gear deal. prices will end up being about the same. we will get less and pay more money for less. that was the managing director of equity research at wedbush securities.

coming up, is mcdonald's latest move to reinvent itself? they are switching to cage free chicken. ♪

pimm: this is the bloomberg market day. as mcdonald's has based declining same-store sales, the company is moving towards a more animal friendly approach. the fast food chain says it is switching to cage free chicken. eggs that comfrey cage free chicken's print this comes week after the company severed ties with tyson food over animal abuse issues. alix steel joins me now with more on egg changing.

a new way to source eggs. : or eggtastrophe. will there be enough eggs to go around? pimm: is it 13 million? x: 13 million cage free x each year in the u.s. in 2011. they will buy that many more. they buy 2 billion egg's per year in the u.s. and one earned 20 million for its canadian branches. that's 120 million ports canadian branches. retail prices are already at a record because we have the avian flu outbreak. end up in tight pants and getting sick. pens and up getting sick. mcdonald's will have to pay 10%

more for those eggs. who will wind up paying for that? pimm: the customer. as far as the change in the way mcdonald's will source the eggs, mentioned tyson's food has animal abuse issues. le newhis mean a who supply chain? alix: you would have to take a while to sort that. mcdonald's changed the apple industry when they started using apple's. the biggest user of apples in the entire country. if they go with a full day breakfast and have to buy a particular type of bag, you would think the trickle down to the industry as a whole would be quite significant. because they are so big, they can buy. i'm glad you mentioned this concept of trickle-down.

i'm wondering if we can talk about trickle-down when it comes to the credit markets and the oil markets. if there is some kind of connection driving prices here. i want to bring in lisa abramowicz, our bond guru. what is this connection between the price of oil and the price of money? lisa: the price of money for a subset of companies that have tapped this credit market at an unprecedented pace since 2008. writing on the back of this easy money wave from central banks, these energy companies have sold -- have increased their debt load. they've tripled their debt load to more than $200 billion. we have all these dead investors -- debt investors who explore for oil that was not generating the cash they needed to justify

debt. investors have been plugging a whole inner balance sheets and are now saying the price of oil is coming down, we will not do that anymore. lix: city talking about how capital markets will be the transformative factor when it comes to the oil supply. was -$37 flow in 2014 billion. operators are not covering their costs, leaving them completely reliant on the capital markets. pimm: and the cost of capital is rising. if you get a 25 basis point increase, it will rise even more. lisa: it is not the federal reserve dictating the rise. these companies may not exist or deserve to exist. you have actual investors saying that. you have deals on energy related junk bonds above 12% versus 7%

for the rest of high-yield universe. citi sees a doubling of the cost of capital for the players.ayers -- shale that can increase to break even. you are looking at the high-yield index. investors areld demanding to loan to interest companies. shale playersason have been able to stay in business is because their costs have come down so much. if the cost of capital goes up, that negates the benefit of that cost curve. therefore, what do they do? citi sees potential of 500,000 barrels a day of oil coming up line as this trickles into the u.s. energy market. lisa: which can end up being a

positive thing. which of these companies will survive? which deserve to survive? which have assets that could be liquidated to return back the amount of money we will pay for their bonds? we do have certain investment , going inck rock there and selectively trying to pick out these energy producers they do like. -- next toaw the $55 a girl.arrels -- $54 a barrel. this tells the story. pimm: it is sort of like predicting the weather next year. nobody knows what the price of oil is going to be.

people do know if these companies do not have the cash flow in order to continue paying their bonds, we will see some defaults in these high-yield issues. lisa: we already have. eight bankruptcies this year. there will be a significant amount of additional ones in the upcoming months. the investors i speak to talk about the stability of the price of oil. you see that huge line down in the price of crude. .t has conceded to go down -- continue to go down. likes what it would look over the past year. pimm: last summer, you would see a huge decline. lisa: it's continuing to fall from there. people are not finding that stability which will give them the ability to value these companies. pimm: thank you very much.

let's take a look at the top stories at this hour. solar holdings close to a deal sharel itself for $54 a . haveegic companies may submitted a bid. the price would value the company at $3.6 billion. could ber solera announced as early as this week. costco owes tiffany some money. finallyesale retailer did trademark laws when it sold engagement rings labeled tiffany . but they were not made by the luxury jeweler. .ostco must pay the jeweler

zuckerbergrom mark on how the $2 billion deal with oculus almost did not happen. it's been posted in this edition of vanity fair. he was less than impressed after initial discussions with oculus chief executive brendan about the oculus ripped 3-d viewer. he lost interest after hearing the heads would be the gaming community but he eventually came around to the deal because he did not want to miss out on the next a computing platform. -- next big computing platform. those are your top stories at the moment. coming up, puerto rico's huge cash crunch. billion of funding shortfall. we've got more, next. ♪

pimm: this is the bloomberg market day. i am pimm fox. a big event underway in san francisco where apple finally announced its newest iphones. cory johnson has the latest. the helicopters disappeared. the announcement lingers large. cory: i feel like ray leona. you would love this. right now, phil shiller is talking about a new kind of lens for these new cameras that has a way of isolating different pixels so the colors don't bleed . deep trench isolation. when a picture is taken and the color comes in, it doesn't get separated at the bottom. they've developed a new lens with deep trench isolation.

almost like a peace sign. a minor improvement. it's these kinds of difficult technological problems that come out of minor upgrades to the iphone. they were talking about a new haptic engine where you touch a something and at you will get a physical response from the screen. these are the things that the new iphones will offer. now.is happening right talk of the new iphone and the improvements over the past iphones. --t be, better touch haptics and deep trench isolation. 4k resolution and videos.

another example of what apple ads as an add-on and everybody else in the industry has to follow. cory: the industry wants this to happen. they want you to suck down more video, deeper videos with a lot more information. they want you to use their networks a lot more. they want to charge you for those data plans. npple is working it concert to get this four k video happening on the phones. something the rest of the industry will have to catch up. pimm: thank you very much, cory johnson outside the civic auditorium in san francisco, the site of today's apple product announcements. let's turn our attention to puerto rico. the governor released his long-awaited fiscal and economic growth plan today.

a $13mmonwealth faces billion debt gap over the next five years. after taking into account proposed spending cuts and revenue enhancement measures. michelle joins me now with more. thank you for being here. based on today's information , isased by the governor this a negotiating tactic or as he spelling out some real problems that are not solvable? michelle: what puerto rico wanted to do today was lay out the numbers, lay out the problem as they see it. over the next two weeks competitors will dig into these documents that have been released today. officials will put together, hammer out a debt restructuring proposal that talks about that's getting into the nitty-gritty. will we ask for specific

haircuts? that will be released in a couple weeks. pimm: there are many different types of municipal bonds that have been issued in the commonwealth of puerto rico. some have been tied to the powergenerating facilities, some type to general obligations. give us and i get the range of fields and those that are most troubled. michelle: the general obligation debt are the safest on the island because the commonwealth constitution promises that debt gets paid before all other expenses. you have these in tax bonds backed by dedicated revenue stream. youers of that debt say cannot use these revenues for other things. they must be used to repay debt that you os. -- that you os. -- owe us.

you mentioned the electric power utility. they are negotiating with their creditors. there debt has been hit at as well. puerto rico securities have been training for these stress levels for two years. pimm: any range that you know of? the puerto rico general obligation trading at about $.73 on the dollar. that is a yield of 11%. pimm: this is triple tax-free. who are the investors primarily in puerto rican debt? michelle: now, a lot of hedge funds and distressed debt buyers come alternative that buyers. best alternative debt buyers. oppenheimer franklin bought in a long time ago and they are still

around. pimm: is there any chance the u.s. congress will right to the rescue? michelle: puerto rico would like that. we have not heard of them moving forward with any kind of plan to allow puerto rico entities to declare a critique -- declare bankruptcy. pimm: thank you very much. we will have to follow this story. ahead, more from apple's event in san francisco. new iphones, new ipads and a new apple tv. ♪

pimm: it is noon in san francisco, 3:00 p.m. in new york, and 3:00 a.m. in hong kong. >> this is the bloomberg market day.

pimm: good afternoon. i'm pimm fox. alix: here with alix steel. pimm: let's take a look at stocks. after a move higher in the early session, stocks are trading lower. dow jones industrial average shedding about .75 percent, lower by 125 points. the nasdaq down about .5% today. alix: not only do we have volume off a little bit below the 10-day moving average, but you also have deutsche bank coming out and saying the fed is likely to wait past september for a rate hike. pimm: you think they are just listening to the international monetary on? alix: and the world bank?

it's possible. intraday, the story was really apple. you can really see why if you look at the terminal. apple in the s&p really moved -- not really in relationship to each other. right around 1:00, 1:30 when the announcement started to trickle out, you see a pretty stark correlation. the s&p followed apple all the way down to the lows of the session when tim cook was talking about the iphone and has moved up since then. versus theis apple s&p 500. let's look at currencies, want to see how the dollar is doing against the euro and pound sterling. alix: i don't think we have a chart, but i do have a dollar index for you if you want to look in my bloomberg terminal. we are pretty much flatlining. overall, what you have seen is the unwinding of some of those carry trades.

you buy those and then you sell .hem you borrow them at low yield and by the high-yield. pimm: right, because your cost of carrying the asset is lower. alix: right. pimm: i like you are doing this unwinding thing. i cannot do that. you are going to show us some media stocks. tim cook was talking about apple and apple tv, you really some media stocks take a hit. they have since recovered, but they were at session lows. if we are into some big competition with the apple tv, especially in a gaming sense, the upgrades, the first thing we in a while. pimm: hopefully, that makes it more affordable to people. cord.i already cut the i only had apple tv.

republican presidential candidate donald trump headline partyy organized by tea leaders. trump was invited by fellow gop candidate ted cruz. the rally protested the international agreement designed to prevent iran from acquiring a nuclear weapon. republicans and israel say iran cannot be trusted. president obama has enough votes to sustain a veto if opponents pass a resolution. pimm: hillary clinton has joined those who support the nuclear agreement with iran. as congress debates the measure, the democratic presidential front runner wade in a speech in washington. clinton: now there's a comprehensive agreement on iran's nuclear program. is it perfect? .f course not no agreement like this ever is. but is it a strong agreement? is, and we absolutely should not turn it down. pimm: clinton has also

apologized for the controversy over her private e-mail server. alix: secretary of state john kerry says the u.s. will increase the number of refugees it is willing to take in as america's allies in europe struggle to accommodate the thousands who are fleeing violence in the middle east and africa. he also said president obama has made it clear he wants the u.s. to assume a leadership role on humanitarian issues. pimm: the federal bureau of investigation has announced an arrest in the multibillion-dollar fraud scheme committed against the new york mets chief operating officer. they have arrested the owner of a manhattan office equipment supplied business for various rods including forging signatures on a document -- for various frauds. russia says it is willing to consider measures to fight insurgents in war-torn syria but

only if the conflict worsens after criticism from the u.s. for suspected deployment of russian military personnel and aircraft in syria which the u.s. is could trigger an escalation of the conflict. russia has been holding talks with saudi arabia and the u.s. who support rebels seeking regime change as well as iran, which backs president assad. a mexican billionaire is betting on his new women's fashion line being able to hold its own against world-class retailers. his companies have announced that philosophy junior studio will extend into a standalone retail chain. beginning this month, philosophy clothing will be offered at boutiques in two shopping malls in mexico and will have a 22 million dollar investment on the books. the plan is to have one million standalone philosophy stores in two years. those are your top stories at the moment. on apple eyes are today as it unveils a

of products in san francisco including iphone 6 and 6s. let's bring in david kirkpatrick, founder and chief executive of techonomy media. what do you make of today's announcements? david: the apple tv new versions are quite significant. i think that is one of their most dramatic announcements today, but the thing about apple is for years, people have when asking what the next iphone is. nothing has been a bigger hit than that in business, really. the idea being could they do it again? they made a big push on apple tv, upgraded the watch today, but at the same time is the iphone continues to do so well and they continue to do such a good job upgrading that that the iphone still remains the main story. they have really impressive new teachers. the tv stuff might be important. the watch thing continues to

struggle, but this is still an iphone company. alix: why did we see the stock fall to lows on the iphone talk? what do you see that in ordinary investor did not see? the most highly valued company. people look at it under a microscope. there's tons of trading action for all kinds of reasons. i hesitate to even opine why that happened. apple continues to be beautifully well-positioned with the iphone because it is still by far the most popular, highest-quality phone on the planet. it's a growing like crazy, and what they did today in their announcement will keep it at a cutting edge. samsung did a huge launch in barcelona in january or whatever it was -- february -- trying to come up with something better than the iphone. it did not take off like it needed to, and now the iphone has leapfrogged that. there really is not competition for the iphone at the top of the line of smartphones globally,

and people all over the world know that. they have a global market and still tons of people to sell to. this idea that apple wants to dominate not just the business, but they want your eyeballs, your ears with beats, your voice with siri. they want at all, don't they gapper alix: they want your heart because health. just an iphone -- it's a camera, a voice recorder, a music player -- all these other gadget that are being incorporated into this one device -- all these other gadgets. david: they do integrate quite well. gameu are playing a walking in your house, you will automatically switch on your apple tv and continue playing, which is just the kind of thing they think through extremely well. alix: is that enough to move traditional gamers from playstation consoles to apple

tv, or is it more for people like me you are ford: i think it is more people like us. hard-core gamers are going to stay with playstation and xbox primarily, but to broaden the potential community of gaming and bring it into the home for ordinary people, ordinary families -- a lot of families orient their lives around the tv -- gaming could be a big part of what happens next. on the other hand, i do not think apple tv will ever be a product that the scale of the iphone. but as i said before, it's amazing how well they keep the iphone good and better than everything else, so it just continues powering forward. pimm: what about the price gapper eing announced no one gets a subsidized phone anymore. is that in apple's favor? don't think it will

determine success either way. many carriers will offer plans as they have in the past. these are high in products for people who have more money than -- these are for people who do thing. cheapest steve jobs talked about being the bmw of computing, and they still more or less occupy the high ground when it comes to technology product. i do not think that is going to change. i don't think it needs to change. aspirational he, more and more people want the best product, and that is why they continue to lead the world. does china pose a risk now? we have seen the united nations the valued intentionally even -- we have seen potentiallyalued even more. david: they are going to do what they can domestically to keep

people buying stuff. a lot of people by iphones in china -- a lot of people buy iphones in china. it's not the biggest smartphone there. i think it is number three. it has a huge business there, and i do not think that is in jeopardy. pimm: wind you think apple will make it compatible to send an im essage to an android phone -- when do you think gapper david: they act like the world is not exist, unfortunately. doesey act like the world not exist, unfortunately. alix: coming up, when it comes any rebound is likely to be short-lived. we will tell you why. ♪

pimm: this is the "bloomberg market day." alix: we want to go straight to julie with a look at the markets. it has been quite a reversal throughout the day. julie: it has. you could argue as apple goes, so goes the market perhaps, but even before the apple event again, we were seeing sort of a the markets. stocks opened up about 1% or more across the board, and we saw this sort of choppy and then slow decline throughout the session after we had the second-best day of the year yesterday. there did not seem to be this catalyst for declines that we are now seeing. oil is declining, but oil was declining earlier and energy stocks were holding a well, so

go figure. let's talk about the stock reaction with regards to apple because that is the big story of the day. you were just talking about it. the stock is now down about .9%. as we saw the trajectory, the stock was trending not much changed, and then the event began. tim cook began talking about ipad pro, and that is when the stock reached highs of the session. then the discussion of pricing began and we heard the features of apple tv, the remote features, stop falling to lows , recovering to some degree but still lower on the day, and this is not entirely unusual, right? it has been a rare in recent years when the company has come out these product upgrades to see a big positive reaction in the stock. the bottom line for apple's to keep the stock engine humming. we've got the number of units sold for each of the various .roducts

cory johnson has been emphasizing throughout the day that the iphone is the big product. we looked at various products by revenue. last year, the company sold 159 around theones globe. ipad was only about 68 million. 100 million fewer ipads sold. ipad sales have been pretty steady. not seeing a lot of growth. iphone sales have still been growing to some degree, so that is what we have in watching. been looking at not just apple itself but the apple universe and what effect it is having on other stocks. we have been watching other phone carriers, and that is because, among other things apple said it would offer was its own upgrade program. $32 a month, and you can get a new iphone every year. we are seeing t-mobile trade

lower, and it has been trading lower along with the market but also with apple shares throughout the day. this is pretty much true of all the carriers -- verizon, t-mobile, sprint to a larger we havebut that is what been seeing here in terms of one aspect of the ripple effect from apple. let's take a look at some of the top stories crossing the bloomberg terminal. a huge cash crunch after a new economic growth plan shows a $13 billion funding shortfall for debt payments. this takes into account spending cuts and revenue enhancements. alix: fewer than 30 pieces of steel remain from the debris recovered at the terrorist attack on the 20 hours. 14 years after the attack, applications are still pending for pieces of metal being stored .n a hangar at jfk

some of the pieces of steel were cut up to make a total of 2200 separate items. report authority for stores and distributes the artifacts. pimm: former officials have defended the methods used in extracting information from al qaeda prisoners. the book is titled rebuttal and takes aim at the recent senate report that exposed details of the once secret cia program. published by the u.s. naval institute, it argues that the senate report significantly distorted reality, and polls show that most americans believe the cia used torture but also that a majority believes it was justified. those are your top stories at the hour. presidential hopeful jeb bush rolled out his tax plan today in north carolina. incorporatesposal some of the populism of donald trump and some of the pro-family ideas embraced by marco rubio.

john, what did you make of it? john: i made of it exactly what your script says you should make of it. you have the core republican doctrine, a lot of things that mitt romney and a lot of other republicans are for, which is trying to broaden the base, eliminate deductions, cut rates, cut individual rates, but also a couple of nods to trumpian populism, like ending the loophole for carried interest and taxing at the same rate ordinary income gets taxed and supply-side stuff in terms of letting companies right there expenses off immediately. very are some pro-business, supply-side stuff and also some pro-populist -- pimm: i like that you said trumpian lead he kind of took the among republican presidential candidates being the first one to come out saying that he

wanted to do that and say it so strongly. pimm: we even heard from warren 'sffett yesterday about trump tax policies. john: i was really interesting yesterday. news broken on this network. interestingly, there is a longer conversation about some economic policies. he may very well find himself in agreement with trump on a lot of things related to taxes but maybe not so much to a lot of other global economic policies. alix: did you see jeb bush on stephen colbert last night? what did you think? john: i saw him. i thought that he emerged unscathed, but i would not say he was -- itm: how really did you like

cap john: stephen colbert is very smart and has these survey did did --- these survey these serrated edges. jeb bush not always the most captivating, but he got out alive. i would not say he shined. alix: stayed on his talking points. that is something, i guess. john: he did all right. ahead, one investment guru says any rebound in the price of oil is likely to be short-lived. he will explain it all next. ♪

48.5 the manager of the billion dollar double line total return bond fund says any jump in the price of oil is likely to be short-lived. isx: joining us with more

bloomberg investing news reporter mary childs. mary: he basically sees a disconnect between supply and demand -- it's that simple. he says as we come into the fault in america with travel season over, it's time for people to start hunkering down. pimm: heating oil. we produce less gasoline. refineries produce heating oil. mary: exactly. and we have this huge supply. in grass grows the wrong way both directions. for something to be more sustained, you need to see at least one change. he is saying $55 a barrel. after that, don't bet on it. big investing community, there are clear black and white lines. andy hall has been bullish or ever, but he is totally able on oil. he says it's going to get higher because demand is going to get that her. thesenteresting to see

big investors who have done really well have these opposing views. a one-year chart looking at nymex crude, and you have not done well if you bought last summer and are still holding your position. what is his track record when it comes to looking at commodities? mary: they do have a commodities fund which is mortgage oriented. in the past year, they have beaten 90% of peers, which is not bad. again, this is with a pretty solid mortgage bent to the investing. that is where he made his star power, betting against the subprime mortgage -- mary: exactly. their core fixed income offering has done well. he does have some credibility. when he has these webcasts, there are hundreds of questions in the queue. people really right and wanted to know how he feels about

tesla. alix: what part of it is global demand. mary: his big concern with china is when you look at the head choice, he thinks the fed is backed into a corner and cannot do anything in september. he thinks they really, really should not. i do not know if he is talking to them or saying what he thinks will happen, but he says if there is no rate hike this month, everyone will take their cue from china and look to china 's slowing demand, so you could see more shocks from that. alix: good stuff. thank you very much. pimm: and we can read more about it on bloomberg.com. alix: lots more coming up. ♪

alix: welcome back to the "bloomberg market day." let's look at some of the top headlines this afternoon. -- solera

holding steady to sell itself for about $53 a share. that would value the company and $3.6 billion in a deal to be announced this week. california surf wear chain quicksilver has filed for bankruptcy protection. the company plans to turn over controls to lender oaktree capital. toy have in losing share retailers like h&m. mastercard was down today is the second largest payment network in the u.s. slow cap -- forecast slower growth. the company said growth would be in the mid teens through 2018. and citigroup warns the next global recession may be made in china. analysis, they said there's a 55% chance of some -- worldwide right

recession caused by falling demand from emerging markets, especially china. another dire warning from citigroup, a squeeze in funding could cut u.s. oil output by i thousand barrels a day. citigroup says the reduction in output could come by the end of the year. the number of oil rigs has shrunk 60% since reaching a record high in last october. people are blasting air-conditioners to fight what may be the hottest september and's 2005. yesterday felt like july. the cost of power in the new york market soared almost 150%. there has been a shakeup in united airlines. the ceo and other senior officials are out. it has to do with investigations into the airline's ties of the in new jersey.

those are some of your top stories. theing now to apple, company held its iphone announcement in downtown san francisco today. tim cook unveiled updates to more than just the iphone. "bloomberg west" anchor emily andg attended the event joins us now. the apple tv saws first update in three years. i have one and have kind of been waiting for this. what's the change? emily: you are right. the first update in three years. probably the biggest change is voice-activated search on the remote control, so in integration with siri. if you have an apple tv, you are saying hank goodness. the search is incredibly difficult. with this new voice control, you can look for the best tv shows for kids, the most popular tv shows.

you can tell it to skip ahead seven minutes. you can say what did she just say, and it will get back 15 seconds. it is an incredibly and powerfully different experience. it certainly seems a little bit like siri has grown up. it'll will also let you search across different apps. one of the things tim cook says was we are in the golden age of television, but the tv experience really has not evolved that much. apple thinks the future of tv is apps. we will certainly have to see. i got out of the them over him just now, so i got to see the new phones in the new ipad pro and the new band for the apple watch. alix: obviously, apple's bread and butter is the iphone. what were some of the other highlights? this is still in iphone company, and if you look at the phone, this is the most advanced

iphone ever. one of the big things they are isting with this new update .-d touch this is an entirely new way of interacting with your iphone. if you think about it, you probably touch your iphone more than you touch anything else all day long. this is pretty important. you can still touch like normal to open an e-mail, but if you press more deeply, it brings you to a set of shortcuts. it is a different and interesting experience. i think we are all going to have to get used to it. the new feature i am most excited about is the camera with upgrades to both the front and back facing camera. as ascreen will now serve flat, so if you are obsessed with taking selfies, you'll get that are quality, but the number one thing standing up to me is .his feature called live photos

think harry potter. you know how those photos move a little bit in the movie, that is what apple is trying to accomplish. the photo captures a second and a half before and after the photo. so it will move a little bit, of aou can hear the sound waterfall and see it rushing down. you could see your child blowing bubbles and making a cute noise. a lot of people when i tweeted out that i was excited about storage,d what about it will take up so much space. yes, of course, the storage parameters on the new phone are the same, but again, this is something we will have to see how it works in practice. i'm excited about it. especially with kids. it's brilliant. you think you have been standing up, and they fall right down. you are going to love it. i can see you. alix: thank you for joining us. coming up on the "bloomberg are watching the

markets that deteriorated as apple's announcement got under way. we will be right back. ♪

alix: welcome back to the "bloomberg market day." before theinutes closing bell. we are deteriorating here into the close. the stocks are right around lows of the session. julie: we have stocks pulling back once again. some gyrations have happened during the day, but we have had muchlong, slow theme for of the afternoon, and stocks are down now as much as they were up at the open. to be verynot seem much of a catalyst. volume has been lower over the

past couple of days than it was during the fast and furious selloff, so that is something to the as we look throughout session. i'm going to steal a chart from apple versus the s&p 500 on my bloomberg terminal. what we have seen here is that the s&p has tracked fairly closely with apple throughout the session here. not really at the beginning of the session. them track more or less, and as we see the s&p fall to the lows of the session, apple, too, is at the lows of the session. we will look at how we have seen this activity year to date. we have seen roughly the same .ind of activity apple, very heavily weighted within the s&p 500. something else i want to look at of the s&p 500.

when we kicked off trading, everything was green. then we started getting more mixed as the day progressed. as you can see, all the groups in the s&p are in the red. energy is leading declines right now. consumer staple health care has been a consistent eight on the major averages throughout the day. all of them are lending to the declines right now. i also want to talk about what is going on in the treasury market. there, too, we have in a reversal. we can see the 10-year note going down in healed as we saw demand coming in for those treasury notes, so price going up and yield going down as the day went on. the commodity market, gold is having its worst single day since july 20, down a little more than 1%. a lot of the movements have been coming later.

oil is down for the third straight session. it is falling sharply as well. when you look at the energy shares during the west in the s&p 500, that happening as lawsuits began to accelerate when it came to oil prices, and i'm sure you know this, but just to let our viewers know i'm a typically, you get typical data for oil. the forecast is for supplies to build once again. alix: that outweighing any kind of declines in production that the eia gave today. good stuff. thank you. we do have breaking news for you concerning first data. the company is sadistic about 2.5 billion dollars. that could be this year's biggest ipo. first data is basically a

company that offers services like security, marketing, card acceptance, online banking. it is run by a group of investors led by kkr. it is preparing to seek at least 2.5 billion dollars, the biggest u.s. initial public offering this year. again, that's a group of investors led by kkr. although, of course, price and timing are subject to change based on any kind of market volatility that we have seen. the top look at some of stories making headlines at this hour. netflix is expanding in asia. the company will offer streaming video in hong kong, taiwan, singapore, and south korea early next year. netflix began service in japan and plans to complete a global expansion by 2016. this is not going to sit well with "star wars" fans in the u.s., but europe will get to see

"the force awakens" before we do. the movie opens onto cymer 17 in the u k and a day earlier in france. according to imdb, the first nation to see a new star wars movie and more than a decade will be the uae. u.s. theaters will not show the film until the 18th. bookies predict it will be this year's highest grossing film. clearly, i just have to go to the uae. an update from facebook ceo mark zuckerberg on how the deal with oculus almost did not go down is posted in "vanity fair." he said he was less than impressed after an initial the company'sh ceo and also lost interest after hearing that the primary market would be the gaming community. the pervert eventually came around because he did not want the next bign computing platform. the virtual reality industry is worth an estimated $7 billion.

those are some of your top stories. one energy stock we are watching is still falling after jim chanos said he is betting against the company, locking horns with carl icahn, the company's biggest shareholder. guest disagrees with china's -- with chanos. what are the two cases? larger short thesis is the gnosis that -- the notion e is in trouble because there will be an oversupply in the global market and that some contract renegotiations are happening. alix: i should point out that it is creating terminals to export to the rest of the world. byy should be up and running

december. will: correct. counter piece to that is right now in terms of the overall amount of supply coming on in of taste ont's kind demand that had grown during a time when the price had been $11 or $12. demand began leveling off because there was no glut. it was actually a shortage because of the fukushima incident. even more impetus to try to build more capacity. however, at that price, demand began to level off because people began to shy away from a very high price. eight dollars is per unit, so i think that will probably stimulate demand over the long-term. alix: nevertheless, i do not relatively insulated for any kind of commodity move? you are an exporter, you have to

pay them even if you do not use their terminal. it kind of does not matter what the price is or what china is going to buy. will: precisely right. , you arenor of qatar selling and you have to take it. you had to on the commodity risks with it. toy are offering an option take it, so they are selling hedging instruments, allowing companies to buy or not depending on the price. that is kind of a different product, and attractive product. alix: they have one terminal that should be up and running in december. how much of that total capacity is already being rented out napa i am basically thinking of it like a really juicy dividend. will: they have already financed seven trains.

trains righten now. of that capacity, that comes up to something on the order of 30 capacity, and utilization will be roughly 80% to 82%, and they will be getting payday lending average of around two dollars 70 five cents, so that will be throwing off something on the order of the low side of about 1.8 dollars in cash flow to the parent company. which means they do not have to do anything. they do not have to market or sell. they are getting the rights for someone us to sell. why would they bet against that? will: one thing that was brought up because we have seen in australia was renegotiations in .rice and contract the contracts they have are different from the ones in australia because those contracts, like i said before, are based on having to take the gas. take thee obligated to

commodity risk, you will want to negotiate. the other part is a lot of the chinese offtake is to have contracted and are trying to renegotiate are also equity investors in the same project in australia, so they are negotiating against themselves, deciding if they are going to contribute more money to a joint venture they do not own all of or get a price rebate and get more cash to their own balance sheet back home. could make thei case that are exposed as they have a portion of their next terminal where they are keeping it for themselves. if they want to buy natural gas and liquefy at themselves, they are taking on that commodity risk. how much of that is a reality. will: if they decide they cannot sell in the marketplace, they had several months to decide if they want to sell it in the marketplace, and if they do not, they do not have to buy the gas. it basically means that their capacity utilization is 80%, 82%. but they do not have to take risk that they do not want to, their cost ofe --

liquefaction is not the three dollars or $3.50, it is actually about a dollar because they own it. all that cash flow flows back to them. the net cost is only about a dollar. it is truly a fascinating company with a fascinating story. now you have these two big guys going at it. thank you so much. still ahead, stocks are well into the red, having given up all of their gains today. the dow off i 246 points just in the last hour, truly deteriorating. we will be right back. ♪

alix: we are moments away from the close, and volatility has returned to the market. citigroup is predicting some form of worldwide recession in

the next couple of years. i want to bring in the chief market strategist at america price financial for his take. he joins us now from boston. first off, what happened today? david: good question. i think you have probably been right on in terms of what you are talking about with apple kind of rolling over a little bit in the middle of their presentation. even before that, you had energy prices starting to move lower, and that seemed to drag the market down. apple seemed to underwhelm investors. think the weakness today was a little surprising given the strength overseas, but clearly, u.s. markets were not as impressed as overseas markets were with some of the fiscal stimulus announcements overnight. i think we are right back to one day closer to watching what the fed does. alix: do you agree that perhaps we are looking at a 55% chance

of a global recession? david: i think that is high. i would put it less than that, but clearly, if there is a hard landing in china, there is a chance that you could get a mild in the global economy in the next maybe 18 months or so, but i think the chances of that are a little bit remote. part of the reason for that is that the u.s. is doing pretty well. i think we are growing somewhere between 2.5% and 3%. we are not that directly related to the strength or weakness in china. even europe now is starting to do a little bit redder. i think those odds are little bit on the high side in my view. nevertheless, this volatility is difficult to keep up with. what then line is expected volatility was supposed to be. just a month ago. now, this orange line is what

the expectation of volatility is currently. in the next few months, you are looking at volatility staying above that 20 level where it did not even reach that just a month ago. that is unbelievable change. and i think it goes back to the surprised evaluation of the yuan. i think everyone was skeptical about the growth rate in china, but all of a sudden, when we had the surprise devaluation, that brought home the reality that may now, too, china is admitting skepticaloo, was about and maybe behind the curve in terms of its attempts to stimulate, and i think that is really what has got investors unnerved in the last 30 days or so. we will have to watch data coming out of china. i think sunday, we will see industrial production and retail sales. those will be the next data points that will become important. bloombergde my

terminal, i'm looking at the yield on the barclays index, and we have seen a big climb up recently. do you think that this fear we've seen in the high-end market will trickle down into stocks? think it already has. if you look at the path of yield and the spread over government notes, it has been trending higher sense roughly the middle of the summer. it started to show up there before it did in equities, and i think the equity market finally caught up with some of that. at the same time, a lot of that is attributable to week this and if yourelated that, and back that out, we think the market offers some value here because we think the economy is relatively strong, but i do think it's time around, as often happens, the bond market led the stock market in terms of identifying weakness. your what else is on shopping list?

we have liked equities all along, the recent weakness notwithstanding, but with a targeted approach, we have liked that has not but worked out very well in the last few months. valuations are pretty compelling in our view right now, .specially after the selloff eurozone equities in u.s. equities in the domestic market. much fornk you so joining us. we really appreciate it. much more ahead. we are breaking down the market at the lows of the session. ♪

.

alix: i am alix steel. joe: i'm joe weisenthal.

alix: another crazy day, u.s. stocks closing lower. apple slumped after unveiling new products. joe: the question is -- "what'd you miss?" it is all about apple. new ways of products. investors are not impressed. can the biggest company lead again? alix: citigroup makes a bold call. we will dig in the report for you joe: the lowest commodities slumped. how did this rout of fact copper? alix: we begin with the markets. good to have you back. getting back together. take a look at this extreme decline.