david: from bloomberg world headquarters in new york, good afternoon. vonnie: one hour left in the trading day in the u.s., shares fluctuating at all-time highs. can more records be set? we all of the action. david: china used to be a profit center for young brands, but not anymore. we will find out how that is dragging down the rest of it. vonnie: lots of new members of the u.k. government being announced in the last hour including philip hammond and boris johnson, the new u.k. foreign secretary. we will be live in london. david: let's head to the markets desk for the latest. we are swinging between gains and losses. we are seeing the s&p 500

slightly in positive territory, expanding three days of gains. dow jones little bit higher, gaining .1%, also a fourth day of climbs. the nasdaq, though, in negative territory, down .2%, and reversing four days of gains. morning, it this as 2120 six,slow but it clawed back most of those losses and is currently unchanged. we are seeing these industries known as defensive are the best gainers. financials and banks currently unchanged, but if this does turn negative, it would in sixe first decline days, which would be the longest winning streak in three months. we are also seeing energy shares

declining. of course, we have crude oil reversing gains. some of the biggest decliners, mostave chesapeake energy folding 6%. we also want to take a look at crude before we go. that is huge right now, falling 4%. ,ake a look at that tumble industry data showing fuel inventories unexpectedly grew adding to concerns of oversupply. -- crude is now hanging around $45 a barrel. david: thank you very much. appreciate it. minister. new prime

the prime minister wrote to 10 downing street and gave her first remarks as prime minister of the u.k. and is wasting no time forming a cabinet. ryan chilcote is outside 10 downing street. in the last 30 minutes since we spoke, a lot has happened. get us up to speed. ryan: that's right. six people have gone in the building. four of them have got jobs. notably, you mentioned philip hammond, who will be the new .hancellor of the exchequer all of the uncertainty with toxit has led companies threaten to pull jobs out of the country. he was a record -- a member of the remain campaign, and he was, as i said foreign secretary, so when it comes to u.k. negotiations with the european union over the next several years, assuming he stays in the job that long, that experience,

those skills should come in very handy, because one of the things , even if heto need , is he is brexit czar going to want to maintain access to europe past single access. that will be what he is most focused on. >> and guess who goes into foreign secretary role -- doris johnson. how did that happen? ryan: what a surprise. obviously a very popular mayor of london when he was in that post. he was one of the most vocal proponents for brexit. it is an open secret in this country he has wanted to be prime minister for a number of years. there was a leadership contest, as you know. he wanted to leave the conservative party and become

prime minister, and yet, he was betrayed by his prime minister who instead launched a leadership bid. a few days ago, if you had asked what boris johnson is going to do now, everybody here outside of 10 downing street would have been scratching their heads, almost as if he had been wiped out of the political landscape, and yet, he is now foreign secretary. very interesting to see in this cabinet that theresa may is putting together, you have both allitiers and remainders, will have to work together to leave this country, one that she is intent to lead out of the european union. david: how about amber rudd, named home secretary? ryan: she was energy secretary. home secretary is very important. theresa may had it herself. she held that job longer than anybody else. in almost a century.

it is generally the kind of job get kicked out of office, but she is a passionate remainder. she was one of the most vocal remaining in the european union, so again, if you go back to the fact that boris johnson campaigned to exit the european union, and you have amber rudd who in the debate with johnson said boris johnson may be the life and blood of a party -- something to this effect -- but he's not the guy you would want driving home after the party. she is now at 10 downing street, and they will have to work .ogether david: thanks very much for that. mark: donald trump seeking $10 million in damages from a former senior campaign consultant alleging the consultant breached a nondisclosure agreement.

trump accuses sam numbered in a lawsuit of leaking controversial information to reporters. in a court filing obtained by the associated press, he accuses trump of science -- of trying to silence him in a misguided attempt to cover up media coverage of an apparent affair between senior campaign staffers. hillary clinton discussed the importance of uniting the country. in springfield, illinois, she called on everyone including herself to do a better job of fuelingg rather than divisions after a series of high-profile shootings. clinton: as someone in the middle of a hotly fought political campaign, i cannot stand here and claim that my have not actions sometimes fueled the partisanship that often stands , so i way of progress recognize i have to do better to.

mark: mrs. clinton spoke were president lincoln delivered his speech about the perils of slavery before he stepped into office. the olympic games come during brazil's winter months when mosquitoes are less prevalent. a judge says a minnesota law firm may have what it calls potentially relevant information for determining who should prince's estate. the nature of the investigation is unclear. the law firm once represented prince who died of a drug overdose in april. global news 24 hours a day powered by more than 2600 journalists.

vonnie: the s&p 500 little changed today. the chief investment officer of concentrated u.s. growth at 80 james joins us. do you and dissipated anything out of the bank of england? >> i think all the same bs from the central banks has not done that much, so i'm not sure it matters that much. i think some fiscal stimulus would be important, but even more important is what individual companies are doing, and that is what we are august on. >> we are here at the start of an earnings season. the last time you were on with us, i think it was back in march, you were interested in financials. is your tune different now? >> tune is not different.

stocks have been beaten up. it really does depend on what the interest rate curve doesn't where we go from here, and if we stay at these low rates for a long time, it will be tougher for financials, but i'm not sure we stay this low for a long time. at a time when the u.s. is barely growing and still growing more than many countries around the world, where do you look in terms of the next catalyst for growth. >> when you look at the whole market, it's tough to find the whole market growing, so if you i think concentrated, that is a great advantage. health care care is a great to look at the p/e of health care this year. right now, it's about 15 times. to are at a big discount where it has been historically,

and much of that is because of the election. there has been a lot of rhetoric about what the candidates would do to the health care sector. we have lived through these fears in the past and i think we will live through them again. it comes down to finding great companies, and if you can find asse, you will do very well an investor. david: how risky is the rift? >> if we get a more benign outcome, whatever that might be -- and to me, split government would be a more benign outcome -- i think there's a chance for the health-care sector overall and specific names to really rally. vonnie: looking at the health are you saying there is further to go? >> much further to go. if you look at a sector that is somewhat defensive, has real growth because of demographics

and is cheaper than it has been in a long time, to me, those are the ingredients of a pretty contractor sector. david: let me ask you about another sector, and that his utilities. is it too late to get in now with utilities? >> i think so. utilities is the mirror opposite of health care. right now, it is at a 19 p/d, so you look at that dispersion between health care and utilities, everybody has run to the safety of utilities and run away from health care. i think going the other way right now makes a lot of sense. a headline --ot liam fox is going to head of the new international trade department. i guess this is the brexit czar. with all of this uncertainty in the world, are you confident the is a good place to be? >> at think the u.s. is a great place to be, but incredibly important is what happens to earnings and earnings are starting this week in earnest, and we need to see decent goodrs and good gardens or

forecast for the second half of the year, or the really strong rally we have had could hit somewhat of a wall. david: jim, always great to talk to you. appreciate it. yum brands reports earnings after the bell. ♪

latest time for our bloomberg business flash, a look at some of the biggest business stories in the news. exxonmobil looking to make a

takeover with a proposal that tops the competing bid. enter oil owns natural gas discoveries in papua new guinea. david: government hackers were likely behind security breaches in 2010, 2011, and 2013 according to reuters. the inspector general reported two years ago that cyber criminals hacked nearly 100 computers. beatingshares take a after investors decided to shore up the pharmaceutical company again. reports thelso former ceo unloaded some 5 million shares of valiant. the stock is down 90% since last number. david: tum -- yum brands is set

to report earnings after the bell today. >> ceo greg creed gave a little in june. update update us they will on that if it's on track and moving in the right direction, if a have found any investors yet to buy a stake in the unit they are planning to spin off, so hopefully, we will hear a little bit about that kind of stuff. vonnie: what about how the company has been faring? it did have a couple of scandals. a gotten over all that? >> yes, that's right. in china, that's the real problem we are dealing with. come back a little bit

since the food safety scandals, which actually were a couple of years ago now, but pizza hut has continued to struggle. other things are hurting it like more local competition and the macro economy, which is keeping some chinese consumers at home. pizza hut is a little more expensive than fast food. context forhat into us. the chinese market is different than the rest of the world. what is the difference? it is a little more expensive, seen as a casual dining chain. they sell stake. they sell for he does. they sell breakfast items. what is next for investors? how many quarters do we have to nd's stocke yum bra get a nice lift? >> a kind of remains to be seen. i think we have a couple more quarters still before we can really see how everything will

play out. like i said before, hopefully, we will get an update on the timing to see if that will still happen at the end of october or not. mentioned all that pizza hut's into in china including selling breakfast items. we have seen mcdonald's have wild success with revamping its menu, offering breakfast all day here in the states. when you compare that to is happening here, what do you glean from that? great point. in the u.s., it could definitely be hurt by a resurgent mcdonald's. pizza hut, taco bell, kfc -- they all compete for that same customer who is looking for a deal and looking for good food fast, and mcdonald's has been doing well with both of those things. find oute are going to this afternoon how some of those other chains have been faring. david: appreciate that. leslie, thanks for joining us.

we continue to get more information about theresa may's new cabinet in the u.k.. vonnie: a report from sky says reportedis has been brexit minister, the new super ministry created to take care of trade negotiations. let's tick through what we knows so far -- philip hammond named finance minister. george osborne resigning from the governor. later, we learned boris johnson, the foreign secretary in the u.k., and as we are learning now, david davis, brexit minister. we will have much more on this as the afternoon progresses. vonnie: we will see how markets open tomorrow. ♪

vonnie: welcome back to "bloomberg markets."

updating news on the new u.k. government, bloomberg has confirmed ava davis has been named the new u.k. brexit minister, the chief minister for brexit, this is the brexit czar we had been waiting for. experience inf this regard. boris johnson also with a cabinet post. he is foreign secretary, and chancellor of the exchequer as well, philip hammond. time for an update with shery anh. horowitz joins me from the cboe in chicago. thank you so much for joining us. u.s. stocks swinging between gains and losses after reaching those all-time highs. what is driving markets now? todd: i think the uncertainty is still driving markets.

you still have a lot of margin money flowing in. even as sellers committee, you continue to see margin money flowing in. markets that are quiet will always default to the upside because they are predisposed to going higher with money flowing in from bonds and death like that. shery: does that mean we are near the top of the markets and could see a breather from the rally? todd: i think we are near the top and have been for a wild. it's no prize i still think we are at the top. i do not think the underlying support of the market -- although the headline number was great, the rest of the numbers were not very good. this will be the sixth earnings quarter in a row that will not be very good. forre rewarding companies beating less than expected earnings. to me, the overall picture is

not very good. i think we are definitely going to see a selloff. the only question is when. shery: you mentioned earnings that we may not expect to be too great in the quarter. what are you trading in this environment? todd: i'm looking at netflix right now. they are expecting an 11% move next week when they report on earnings. i happen to think it is -- they have priced in pretty much the bad news. bullish to put in a trade without exposing myself to a lot of risk, so i'm going to actually sell some 96 calls and by five of the 9850 calls, they're bigger than expected. if we get a big move to the stock. i'm long the if the market goes way down, i make money on the credit i collected the only problem is if it stays in the middle of 96 to 98, and then that becomes a losing trade, but then there's

so many opportunities to make a good trade. shery: it was great talking to you. keep an eye on netflix. thank you so much. back to you guys. david: thank you. still ahead, the latest news on the u.k. govnment announcement. the focus continues at 10 downing street, who is going in and who is going out. philip hammond is the new chancellor of the exchequer. we will continue to follow this story on bloomberg. ♪

♪ from bloomberg world headquarters in midtown manhattan, you are watching bloomberg.

mark crumpton is in the newsroom with first word news. mark: the british prime minister is assembling her new government, pointing philip hammond as treasury chief area the former foreign secretary, he replaces george osborne, who held the job for six years. osborne has resigned from the government. as also found boris johnson secretary, as they negotiate the british exit from the eu. she also appointed amber rudd as secretary. scotland's first minister is challenging her over her assertion that the new british government must prepare to leave the eu. he says that brexit means brexit doesn't apply to scotland. they will be seeking talks with may. all scottish districts voted to stay in the lock.

-- block. the african-american man killed by a police officer during a traffic stop in minnesota had a it ispermit area gun erie girlfriend said that he was shot after telling police that castil e was shot while reaching for his identification. hillary clinton has a three-point point lead over donald trump in a head-to-head matchup according to the latest mcclatchy survey. the poll was taken from july 5 to the ninth. this was after james comey recommended that mrs. clinton not face prosecution over improper e-mail use during her tenure as secretary of state. global news, 24 hours per day. powered by over 2400 journalists in 120 countries. back to you, oliver.

oliver: it's close in under 30 minutes. nasdaq, live to the where abigail doolittle is standing by. abigail: after a big rally that left the nasdaq higher on the year, that magic line in the sand is 5007. slightly higher than that right the nasdaq has been slightly hope -- higher. small gains and losses on the day, slightly lower right now. it appears that behind the flip from the red to green, some of the big tech movers, like amazon, facebook, and apple, it's not really clear what's behind it. but there was a cryptic and somewhat bearish tweet put out knownby andrew left, the short seller of citroen research. perhaps that's weighing on the shares of facebook, amazon, and

apple. but it's worth noting that they are actually the biggest rights that are down today. but on the year these are two of the top names for the nasdaq. oliver: something that continued to stand out was the divergence between the dow and the s&p. the nasdaq, still 4% below record. his or anything new to add to the discussion? abigail: the biotech sector is lagging thee a bit, overall markets. you have to wonder if that stop -- strong dall trend, if there has been a signal from a positive standpoint to carve out a new high from a mayor bearish signal. that the nasdaq might follow the biotech sector considering the 14% weighting. but it's hard to see it making new highs unless the nasdaq gets

on board and there is a big wrong downtrend there with a bear market. >> the big story today, theresa may has become the new british prime minister after meeting queen elizabeth. new posts have been developed for boris johnson and doris hansen. we are joined now by ryan from 10 downing street. a huge day in the root -- and the u.k.. many of the headlines are about boris johnson, the david davis .amed the brexit administer seems like a crucial role. what should we know about him during this critical time for the country? ryan: well, he's known as being a hard negotiator and of exit shearer-- and a brexit -- cheerer.

arguably the most important job in the u.k. government now, leading those negotiations with the european union as to how the u.k. exits and what kind of relationship it will have with them going forward. a brand-new ministry that they will be heading up. they don't even have a building yet. the post has never existed before. he's also going to be surrounded by a few other people who clearly have a role in it comes to negotiations. philip hammond will be the champion of the exchequer, the british finance minister now. is to makemost job sure that in those negotiations they do everything they can to maintain access to the single markets in europe. that's very important for this country. surprise,son, a huge the foreign secretary who will have a role in origin that new position in the world. matt: obviously the remaining 27

members of the eu want written to hurry up with article 50 and get the process going for exiting. it is britain's best interest, clearly, i think, to put the process off for as long as possible, letting the anger down the little bit before they try to get something else out of it. this is all happening very quickly. do you get a sense that they are going to be waiting, still, until christmas or even next year to trigger article 50? i think of that is exactly what they are going to do. i got to tell you, there's a process down the road on 10 downing street area they are saying, we want brexit now. the pressure not just going from those remaining 27 countries. it will be coming from within the u.k.. it's been a few weeks since the 23rd of june.

the government has been very clear. theresa may, since she became the era parent, that it isn't in the country's best interests to hurry up and invoke article 50. she made it clear that she will lead us out of the european union because once she does that, the u.k. loses a lot of leverage. they have two years in which they have to conclude the negotiation with the eu and their exit. that time constraint puts the , into theyou will hands of the eu. she has said she wants in formal negotiations with angela merkel and she wants to try to get on the same page to understand where the red lines are. you're talking about hundreds of negotiators to try to achieve the best deal that they can

outside the eu. hammond, david davis, how many more roles are there to be filled? who else can we expect to see as these come into play? there are more than a dozen and five of them have been filled this evening. amber road was another one. she's going to be home secretary. she's in charge of the police. she charge of immigration. she's got the job that theresa may used to have. she will have a seat at the table within the cabinet. but also, her job in this country will be crucial. michael fallon has been reappointed as the fence secretary. i don't think there's going to be any big changes at how u.k. exit your than if they might see them getting a little

bit closer to the united states. liam fox is still in there. he was the brexit campaigner who wanted them to leave. he is still in the building, it will be interesting to see what job he gets. there are rumors that he may be be -- that he may be in charge of trade relations where he will be basically tasked with forming the new u.k. trade relations with other countries. crucially as they exit that you, they get to cut their own deal with other countries. that's another important job that we will have to hear about. i don't know, about half of a dozen of them appointed today. another six and more tomorrow and in -- another six and more in the week and in tomorrow -- in the weekend tomorrow she has prime minister's questions, she will want her team life. all right, ryan, thank

you very much, coming to us from 10 downing street. >> jpmorgan set to release earnings before tomorrow's opening bell. next, the numbers you can't miss. this is bloomberg. ♪

♪ matt: this is "bloomberg markets." time for the bloomberg is this flash. a lack of new models and global economy concerns are being blamed for limited plane orders this year at the air show in the u.k. airbus announced commitments for

just -- for jets at $50 billion a half value of last year's paris x though. they both one deals for 412 jets -- paris expo. they both one deals for 412 jets. mohammed ebert team is making , joining asianlt counterparts from indonesia to taiwan, easing policy because of increasing global concerns. the decision to lower the overnight policy rate to 3% came as a surprise to all at one of 18 economist surveyed. amazon, touting the success of its second annual prime day promotion. tuesday's sales bonanza was the biggest they ever for sales of amazon devices globally, including the fire tv stick,

which displays content on your tablet -- and your tv and alexa enabled gadgets. a luxuryll be building hotel next to disneyland with tax breaks. they will the returning 70% of the lodging over 20 years. busy says it's a good deal and estimates the hotel will generate $750 million in new revenue to the city over the next four decades. and that is your business flash update. oliver? the jpmorgan ceo, jamie dimon, announcing that the bank will be raising wages for employees, most of them on the low end of the pay scale. high-end earners on the other hand will be fighting for their illnesses. let's see why the numbers don't lie. estimated aveyed combined income of the six 15%est banks in the u.s. at

this quarter. jpmorgan is no exception, with often expected to fall to 5.2 billion or a 9% drop from two years ago. analysts predict a combined earnings will drop percent of jpmorgan falling 9%, or 20 billion. as expected for these lenders, low interest rates are in part responsible for the dismal outlook. the net reported never -- revenue has been stagnating as those 10 year yields continue to plunge also every day. speaking of brexit, you may have seen jamie dimon campaigning for .he u.k. to stay in the eu he's got eight ilion reasons why as jpmorgan puts out $8 million in britain. biggest is the contributor across the board, contributing $27 billion in

yearly income to the largest investment banks. analysts will be eager to hear what they have to say about the vote. you might have heard about jpmorgan talking about trading rebounding in the last order, representing a drop in fixed income and equities from the prior year. teensere expecting amid percentage increase in the second quarter. if you are looking for impact on -- impact on these incredibly low rates, keep an eye out for earnings and the rest of the financial sector when they are released for thursday's opening bell. act to you, john. quite here with us is allison williams. forson, thank you very much joining us. what is the big thing, in your view, to watch for? allison: it's all about the fixed incomet?

trading has been a dismal story several quarters and was finally doing better. exit the u.k. voted to eu, really a lot of things changed. the biggest things for the u.s. banks are that changed outlooks and lower expectations. >> how, how, how much does that impact jpmorgan earnings. it's a little bit off the $1.44 that we saw from the same quarter last year. loss of againat is brexit? the second, for quarter there might actually be a small market impacts because of the pickup that we saw towards the end of the quarter, but it really is going to be about the expectations for the market going forward. what peoplein about

might call quarter to quarter with a positive thing for the investment banks, the story over the last year and a half had been getting the monetary policy divergent. higher rates with a pick up and volatility and the rates system, the biggest portion of the investment taking revenue school . now those bets are off. the bank of england and other monetary authorities talking about more easing. we have been waiting for a cyclical pick and thought we were already getting one. the other side of the coin is -- lower u.s. long-term interest rates are positive for some businesses. there will be questions around that. that we hadue being this huge pop a few years ago. there's probably a little bit of

what most people would call refinance are now. you will get some less, but maybe not as much as before. we may continue to see support .o fixed income flow we saw a lot of strength in the investment-grade market. the other side of that is the issuance. we started to see some stabilization there this quarter. y positive forl debt fees. the hopes are the that that could continue going forward. and then the big? is really going to be m&a. obviously after brexit it introduces a lot of uncertainty, but there has been a lot of talk about the reduced expectations for it in the region, but could lower he thought -- could lowering the borrowing costs help? quite interesting. there is a lot of tough still out there. great conversation, bloomberg's

allison williams. thanks for joining. allison: thanks. matt: a reminder, you can catch all reports ross all the terminals if you type in b i go to enter that world. our defensive stocks still the darlings of the market? we have some charts showing why analysts are the least bullish on some of the biggest defensive sectors ever. this is bloomberg. ♪

oliver: this is "bloomberg markets." u.s. stocks are at all-time highs. the two groups leading the rally as we head into earnings season are defensive companies and energy stocks. to take a look at the chart, starting there we will see some big gains. looking at low beta stocks, companies that are the least

volatile in the market, made up in large part by those defensive companies. the question is now -- will the gains hold up as corporate profits role in? joining us for this chart chat is kevin kelly. kevin, you built that chart. tell us how we can use the terminal to do that and what it shows us about that sector of the market right now. abigail: we used -- kevin: we use of the equity screamed market on the terminal and essentially to these low beta names and once we had them, we plugged them into another function that allowed you to plug in your own index. do withwere able to that was track it over time compared to the market. that there's not an index you just took, you actually made it yourself? kevin: yep. using criteria. oliver: you can throw out these low volume tips, that's what they try to do, mimicking those performances.

exactly, criteria was a low beta name, as you said. one of the interesting things about these low beta countries, -- companies, like utilities, analysts haven't caught wrongfooted. what's interesting about that is that that is one of the sectors that has outrun its target. that's also interesting. people have this flight to safety dividend yield. matt: we have that chart. usually it's higher than where it is, otherwise you wouldn't be drawn in. but health care stock, for example, are still 9% low where people think they are headed. it to your point they are already above average targets and consumer staples are all's

as well. is this because analysts have bearish price targets or analyst have piled into these things looking for safety and yield? kevin: i really think it is more the latter point. looking at these companies, utilities specifically, etc. highest years. making you believe that they have piled in. oliver: one particular sector doing well is energy. what are kevin: we at their? have a great function that you can use for on-the-fly analysis, ea go. this chart has the s&p 500 stock price. we have oil prices and in the blue we have estimates for the next four quarters these energy

companies. i put the purple line there so oil has know where started to fall. you see this lag in terms of earnings provisions, right? decreasing price targets and earnings expectations. as of recent what we have seen is that over the last couple of orders when things were rebounding and doing well, analysts have not revised upwards yet. wave, another catalyst for these companies moving upgrading of these companies could lead to price appreciation. matt: thank you so much, kevin. i love that function. i cannot recommend it enough into earnings. the markets close is next. this is bloomberg. ♪

joe: we are moments away from the closing bell. matt: i'm matt miller. oliver: and i'm all of her. scarlet fu is on assignment. over -- oliver.

scarlet fu is on assignment. ♪ [closing bell] matt: the dow and the s&p extending their all-time high. joe: the question is, "what'd you miss"? matt: for wall street bond strategist, there's wrong and less wrong. we will look at the revisions from this year. carney'sig into mark strategy. r millennials in need of a housing bubble? our guest says so. brand-new all-time records for the s&p and the dow jones industrial average. i guess i don't have to say all time, right? a record is a record. the nasdaq retreating just a bit.