the common humanity of all people and are willing to build institutions that promote that common humanity and those who do not. that who would suggest somebody is less than the because of their tribe or ethnicity or paid or color -- or faith or color. and those impulses exist in all our countries. impulses, when we do not speak out against them and build strong institutions to protect people from those impulses, they can take over. they can be unleashed. us have responsibilities. not just a few. to say that even as we are relentless against terrorists, it is also worthy that we recognize our nations

have worked together for the security and peace and human dignity around the world. i want to thank so many of your countries for the partnership's we have forged, in rescuing the global economy, in securing nuclear materials, in a comprehensive reform to a prevent iran from obtaining a nuclear weapon. in paris, the most ambitious agreements to fight climate change. a new sustainable development set of goals to end extreme poverty and promote health and education and equality for all people, including women. and through the efforts of many of you we have continued to try conflicts,ond supporting the transition to democracy in burma, forging a new partnership in vietnam, and

theat meaning -- evening new chapter with the cuban supporting colombia to end decades long conflict. that is what is possible in our nations when our people work together in the spirit of mutual interest and mutual respect. and what a contrast to the death and nihilism terrorists offer. what a reminder of the offer of progress and opportunity and hope we can advance when as people and nations and individuals we refuse to be our differences alone in her member we are all part of one human race. days likefficult this, that is what gives me hope, and that is what should give us all hope. on this planet of more than seven total -- of more than 7 billion people, the hatred and violence of a few is no match

andthe love and decency hard work and good will of people with compassion as long as we stand up for those values. so long as we answer against those who would undermine those values. i'm very proud of the work we have done. privilege i have the i will continue to stand alongside you. thank you very much. >> live from the white house where he was addressing a meeting of the diplomatic corps. the president giving his condolences to the people of france following the deadly attack that left over 80 people dead.

the president saying these types of attacks are an affront to all of humanity. they will not relent. are going to destroy isil, which he said was a vile terrorist organization. tosaid we are never going give up on diplomacy. and in the wake of last night's attacks, the president has said statements have been made, calling that all muslims should be under scrutiny. the president called such statements repugnant. and we cannot give in to fear. the president speaking just moments ago in the east room of the white house here on bloomberg television. we will continue to follow this story. more updates on the situation in nice. he president and france ois holland travelling to nice. on life support.

we will continue to cover the story, bring you the latest developments as soon as we get them. i mark crumpton in the newsroom. back to david. : it is's less than an hour to the close of u.s. trading. yahoo! sale saga entering its last chapter. yahoos board is said to make a decision afterward. emily chang joins us now from san francisco with more. what do we know about how different these bids are? the one by dan gilbert and warren buffett, the verizon one, the at&t one. emily: unfortunately this process has been incredibly opaque. dan gilbert, as you have mention. this debate ranges from $3 billion, depending on what is accounted for, what actions are accounted for in those bids. we assume that most of these folks are bidding for yahoos core assets, which would include search, e-mail, advertising.

but it is unclear what company for howng for what and much, what they plan to do with yahoo!, if indeed they are the winning bid. it has been discussed verizon would consider merging yahoo! with aol. newlymstrong may run that merged company. we don't know a lot about how this process will play out. we don't know, once the winner is chosen, when we will know who that company is. bank it is -- david: what are analysts expecting to see? emily: marissa mayer has assured investor she will continue on with -- continue on improving the business.

of it is priced into the stock. yahoo! shares are up 13% day-to-day optimism. if we are expecting display ad sales to drop once again. yahoo! marketer expects will account for 2% of display ads by the end of this year. we are expecting the mobile ad businesse mobile to increase. because facebook and google are growing so fast, yahoos share of the mobile ad business will continue to decrease. was once company that the most prominent search engine in the world. their business had gotten so bad that it is predicted their search business will account for 1.6% of the market by the end of this year. yahoo! gets a billion visitors every month. but the amount of time that people are spending on yahoo!, at this point it accounts for only a timely sliver of the amount of time everyone spends

on the internet. >> what is it and how might that way on bid's? emily: kind of a bombshell dropped at the end of june. yahoo! disclosed that whoever buys the company may be on the hook for $1 billion in payment to mozilla. a couple of years ago yahoo! and marissa mayer negotiated a deal which ended up being the default search engine, which turned out to be very favorable to mozilla, not very favorable to yahoo!. that is adding up. particular sales process and what the company will be accounted for. ctainly not what you want to hear.

david: you can catch emily later on bloomberg west. she will be discussing terrorism, media and tech at six p.m. eastern, 3 p.m. pacific time. stocks remain mixed. judy hyman has more. julie: we have the dow now gaining three points, any gain would mean a record close for the dow. the nasdaq also losing some ground. it is a summer friday. the s&put 16.5% for 500. we did have some mixed economic eta. economic data.

movers wef individual have seen some pressure on consumer discretionary, specifically media stocks. saying that the environment for tv advertisement is going to be to half in the second half of the year. stock is down 3%, you can see the discovery down 2.5%. we heard more from the big banks in terms of their earnings, citigroup, and wells fargo. citigroup started higher. they came in above estimates but there was some weakness in the areas like consumer banking. and wells fargo matching analyst estimates. david: what is next as the earnings season continues? it is good see you michael, it was solidly risk on yesterday. your outlook here?

michael: we have seen fresh highs. perhaps today another one. generally that old saying, you don't short a fresh high, it is very relevant. provided that the dollar can't rally too much more, and provided that the 10 year stays where it is, it is going to the goldilocks condition, which is incredibly constructive. when you get into the earnings season in terms of what it means for the overall market, you can't make a judgment about that really until you get through week three, week four, and a lot of the major companies. ,e have had a few banks come in but the banks are unique animals there and not necessarily reflective of the broader economy. we don't really know. what we do know is for the s&p to put in 6% growth this year,

we are going to have a really strong q3 and very strong q4. if the bar is not met, we could certainly see some consolidation here after this historic move. david: we had this attack last night, does that complicate it if further -- complicate it further? tohael: if you go back terrorist attacks in various forms, whether it is ira 80's or in the 70's and the united states, the markets have developed a pretty thick skin and trucked us off pretty quickly. even after the madrid train station bombings in 2004, travel stocks would be fresh high six months later.

as a't look at this deterrent. i much more concerned about political noises in europe and corporate confidence. david: on back to the ecb, how difficult is its job? michael: great question, i think for the for seeable future the political dynamics are not .ubstantively changed there is a lot of chatter about referendums and all that. it is not clear in that -- not clear my mind how that and directto power authority of the ecb. next 18 monthse a huge thing to be watching. the markets have been used to

this. withoutntral-bank worrying about the politics. it's going to compromise that flexibility. david: are you surprised at the flexibility? michael: not necessarily. if you look at the japanese gdp inflation, it begs the question what is next. fiscal stimulus would be great but japan has a very high sovereign debt level. there would be an overt monetization but it is effectively debt monetization as the doj continues to print money. ift is very interesting is you think about qe years ago, that is a radical policy that has gone mainstream. if this starts becoming used by think ittral banks, i is going to present a lot of interesting dynamics.

if we do get fiscal stimulus out of japan and japan can turn around that gdp slump, then i think it is going to validate that construct even more. us on set in new york. more on the markets coming up, this is bloomberg.

david: the nation's growth has been in steady decline but china proved doubters wrong in the last quarter print it stabilized its gdp at 6.7%. joining us is the executive director of global economics -- is the bloomberg director of global economics. does this mean china is out of the woods? , they live to fight another day per he at this number wasn't bad and we've had a number dish had

-- they other numbers live to fight another day. this number wasn't bad and we've had a ton of other numbers. big surge in lending there. they live to fight another day. the debt issue is going to have to be addressed. david: how is the pboc and interpreting this? will they remain steady? pboc is probably interpreting this with a sigh of relief. they're hoping the finance ministers and central banking meeting in the next several days, they don't want any thrills and spills. they can look back and say there were apocalyptic warnings last summer, and again in january and february. death played a huge role. debt played a huge role.

one of the trends we have noticed and discussed is china's economy is changing from a sort deal circa 1980 economy to a consumer economy. you would have noticed the starbucks was packed around the clock. chinese consumers have money to spend and they are not afraid to spend it. david: if you are to put that into a timeline, where are we in that process you -- in that process right now? daniel: service consumption accounts for 15% of gdp. having said that there are huge discrepancies between the coastal provinces where there are transition -- where the transition is more advanced than the inland areas. maybe it is 60% to two thirds complete.

northeast, it is tough times. david: good to talk to you. and options inside is coming up next.

-- it is is times for time for options insight with julie hyman. julie: joining me is alan men, --ef step just chief strategist. has obviously been an eventful week with all these records we have been seeing for the s&p and the dow, even though things are positive little bit for today. what kind of options activity do you see a attached to that, articulate as we go into next

week? is there any indication the optimism you're going to see will have a continued run? this week was interesting, as you said. up oneolding the gains, point 5% across-the-board. the nasdaq actually got to green for 2016. that is important psychologically. you look at the vicks, we are closing lower on the week once again. there is still a lot more downside. the lows in 2007 were below 10. lowsix is not making new as of yet. julie: that is a positive sign in your view? allen: i look at that as a positive. that gives the market room to go higher. and 2200 is the first technical target. .hen we looking at a 2400 julie: that would be quite a

recovery indeed. i want to return to your pick for this week and you're looking at alibaba. first of all, walk me through how that works. alan: heuer using in the money option, something that has that delta but gives you a solid payoff. what you want to do is buy enough time so that you can have enough time to be right and let the markets move up and down, but you have less risk because your maximum exposure is whatever you pay for that option. julie: in the case of alibaba, you are looking at an october 72-50 called. alan: alibaba has been trading between 72 and 82. .t has been as high as 120 it fell all the way to 60. this sideway ranged target nine d, as does the halfway target of

this overall move. china started to stabilize, and asis in the same space amazon. they have a lot of money to spend, and this could gain as the nasdaq comes back at smitty's undervalued overlooked stocks start the playbook. ?ulie: what is your risk i ask you that because yes china may be stabilized, but there are ,isks associated with china including regulatory risks. there is a new search task being employed by china, and that is one of the things that cost alibaba to underperform recently. alan: the option costs about $10. your maximum risk is what you paid. what i recommend is putting in a stop loss. mathematically the option loses half of its value, even as the market goes the other way or you run out of time. about $500. risk is

julie: thank you much, we keep -- we appreciate it, we will keep an eye on alibaba. david: coming up on monday, do not miss tom keene's exclusive interview, he will sit down with imf manager christine lagarde here in manhattan. monday 1:30 -- that is at 1:30 p.m. in new york, 6:30 a.m. inlondon, and 1:30 hong kong. ♪

matt: i am matt miller.

>> we have 30 minutes away from the closing bell. matt: let's check in with the headlines. here is mark crumpton. mark: president obama says the united states will stand with france following last night's terrorist attack in nice. public bank -- president obama: we come here with heavier hearts the normal. overnight we witnessed another ongic and appalling attack the freedom and the peace that we cherish. today our hearts are with the people of france and with all the innocent men and women, and so many children who are hurt or killed in this sickening attack. earlier today the president signed a proclamation honoring the victims in nice. it calls for flags in federal properties to be lowered to half

on july 19.sunset france from moreland says -- francois hollande says -- he 202 the number wounded at with 52 in critical condition. he says the investigation is at an early stage. he confirms police are questioning the ex-wife of the suspect. residential candidate donald trump and hillary clinton weighing in on the attack. they instruct different tones. mr. trump tells foxnews he would be willing to ask congress for a declaration of war against the islamic state. for greatercalled intelligence gathering to fight terror. she says this is a war against radical jihadist groups. mr. trump has selected indiana

governor mike pence as his running mate, the announcement that was supposed be held at a new york hotel today was released via twitter. as to trump saying i am pleased to announce that i have chosen governor mike pence as my vice presidential running mate. the selection process was postponed after the deadly attack in nice. the classified portion of the national inquiry conclude that saudi nationals may have aided some of the september 11 hijackers in the u.s. before they carried out the attacks. a newly declassified document names hijackers associated with -- beforey carry it they carried out the attacks. the saudi's deny the allegations. news 24 hours per day, powered by more than 2600 journalists and analysts and more than 100 20 countries.

this is bloomberg. back to you. close in under 30 minutes. let's go live to the nasdaq, we have abigail doolittle. abigail: the nasdaq going out with a bit of a whimper. down ever so slightly right now, but up the week nearly 1.5 percent. its third weekly gain in a row, the third longest weekly winning streak. all of this has put the nasdaq positive on the year. macro story is probably the growing divergence between the dow and the s&p 500, the more mature equity indexes, carving out new record highs while the nasdaq is about 4% from its record highs. about typical -- typical to have the nasdaq leg in another way. the biotech index remains sharply down on the year by 20%, very much in a fair market. the nasdaq itself slightly higher.

it seems that that sector could nasdaq told cause the not find new high similar to the dow invest he 500. we will watch all of this unfold. stories,e biggest sob american airline shares are up 20% on the week, having their best weeks since december 2013. a few factors are behind this. first a recovery from the brexit selloff. investors seem less concerned about the brexit on travel. factcan airlines did in say they expect a $1.55 billion boost from new credit cards. a $40 on upgrade to buy stock. it is important to remember american airlines is down 15% year to date. still he bit of a recovery to go. talk tech stocks, there

any big winners we need to know about? abigail: we have a new stand out a winner, of 20% on the week, having it test on the weeks since 2012. a big positive. they announced a bit of 6500ucturing, cutting jobs, even though the strings are a bit neutral. 65% of analysts are on the sidelines. this is another one, despite having a huge week this week down on the year by about 20%. oliver: thank you very much, abigail doolittle at the nasdaq. cpi report provided another piece of evidence u.s. wage pressures continue to feed into consumer prices. core inflation as the gap between goods and service priced trends continues to widen. we are currently pricing the trajectory and cpi inflation about 1.4% for the next couple of decades. joining us is the head of

inflation links bond and portfolios, and portfolio manager at the global chris -- global strategic fund at blackrock. about the fed's targets, where it wants to go and how close we are, because we do cc pi above 2% core cpi. martin: thank you for having me. it is important to understand the construction methodology behind each index and look at that relative to the fed inflation target. pc on a headline inflation basis. matt: not the core number? martin: not the core number, no. it is a good indication, removing the volatile and opponents -- volatile components. a smaller contribution from health care. that has historically resulted

in 40 basis points spread between the two measures. you could say a fed cpi equivalent target would probably of 2.3 andhe region 2.5%. matt: that is what we are seeing as we look at inflation numbers. we see that gap you are talking .bout how tricky does that make it for the fed? are there certain sectors where if there is a big jump this is what we want to see, even if the overall numbers are still lagging? martin: that is a good question. one of the concerns that inflation metrics are moving higher, particularly core, is being driven by shelter inflation. up,ter inflation going rent prices, which are an offshoot of housing prices. a drag onto be consumer spending because everybody has to live some way. it is a drag on disposable

income. when you look at today cpi reports, the services of inflation year-over-year, what we can see is that the wage growth is starting to take affect. he unemployment rate coming down is trying to tighten capacity and we are seeing inflation growing in other sectors other than shelter. you raise the subject of good inflation. that is obviously having a disinflation area impact on the goods component. we do expect that to reverse as they approach the end of 2016 as some of the dollar appreciation works out of the data. for the time being it is continuing to push good prices to the downside -- push goods prices to the downside.

matt: we see that 11, 12, 13, and 14 until the end, oil prices were pretty steady around $100 per barrel and then they crashed down. if you are looking at the headline number, you have to include oil. these prices have to have a pretty serious effect on the fed's target. martin: if you look at headline pce, it moved down rather significantly. what is more concerning is that should have an impact on inflation. an impact on pushing down inflation expectations in the future. we are pricing a run off inflation close to 1.4% or 1% on

a pce basis for the next 10 or 20 years. that is what is giving the fed a little bit of pause for authority. oliver: as we are looking for these numbers, there is nothing that sounds costly to the american investor. oil bounced up a little bit but it is still depressed from historical values we have seen in the past couple of years. we look at the goods numbers, we have a strong dollar, so the dollars cheaper. where is the money going so americans are taking it in and benefiting from it? ae retail number is justification of that? martin: i think the shelter disposables reducing income. health care premiums are going up as the impacts of the afford , or atre act take affect least the pricing of an insurance policy is on a state-by-state basis, increasing

fairly significantly in the last couple of years. i do think the aggregate data underestimates the strength of the consumer. if you look at the recent trajectory of retail sales, that has been relatively healthy. i do think consumers are concerned about the political landscape as it goes forward. that with thene impact of lower rates come in terms of the impact that is having on psychology and the aging demographic we are having, people are considering they need to save more at the current structure to provide for retirement. that marginal increases propensity. matt: how do you explain to people how this will protect against the instrument and the possibility of future inflation?

martin: investors have, they want a safe longer datastream of cash flows. they want to provide a balance to some of the higher volatility components they have treated where our tips are tremendous benefit is the one thing that can impacts nominal cash flows is headline inflation. particularly if we are in the new nominal interest rate environment. the inflation prints above, their clipping a negative coupon. you are actually buying inflation insurance on your fixed income portfolio. i think that it's become -- that is because it becomes more and more important as sponsoring driven by central banking policy. matt: low yields are sending a gloomy message about the future but the lowest the new high and

lousy news makes for a boom. we'll discuss what that means next.

oliver: this is bloomberg markets. matt: time for the bloomberg business flash, a look at the biggest business stories in the news. a fixed line network in the netherlands, according to people familiar with proposals filed this week. they say the british telecoms looking to win approval from the european commission for the merger of its dutch business with that of liberty global be at the deadline for the commission to approve the deal or extend a review of that is august 3. donley and sons, owner of the

edgar financial statement wire service dropped in trading on speculation that a deal to combine with the division of xerox will fall through. bloomberg news was the first to report the two companies were in discussions. the xerox board rejected are r donnelly's did, planning to split instead. oliver: according to people's knowledge with the matter, they say kkr and -- our wing investments backed by a billionaire. and evaluating a potential purchase and stake in electro steel. vote tots digest the leave the year he in union touch its lowest rage -- lowest rate since 1972. but those rates of skier was going on with a strong bull run. 10 year treasuries have jumped

7% in price. joining us is bloomberg's brian , it's called the bull market we haven't seen. we have been talking about bonds . what does that mean? at theyou have to look price, not the yield, which is somewhat difficult to you do -- to do. the total returns 18.5% this year. how much is the actual income return? 17% of that return is driven by ,rice, which is very atypical which you think of a bond as generating a yield and stocks generating price appreciation, but now it is almost reversed. stocks and dividends are actually paying more than that. oliver: do you think bonds as a conservative investment savers make and old retirees live off the coupon they get from that bond. is why some he stories and

summit of people have been saying they have such a tough time because there is no yield out there. i have been talking to retirees who are just dancing around their office and homes because they don't work anymore, because they have made so much money on the bonds they own. brian: that is a good capitalization. if you look at funds that depend on matching their liabilities with this income, they are finding it difficult to buy their treasuries. think of america floated it first, they may have to capitulate because after brexit yields are poised to be lower for longer and there is no end in sight. >> i hope when i'm a retiree i'm still dancing around. when you are talking about who's buying, i wonder if you have some insight on who and why and what the mindset is. i feel like we're trying to andre out what stuff is

what the bonds are safe. it is because they are chasing that momentum, try to get in on that price action. brian: i think you have to segment the different buyer basis. doing it at a 2% yield. a lot of people are potentially buying it. buying it as an insurance policy. in theory stocks and bonds move in opposite directions. >> we have been talking about this earlier in the week. , in theook historically very strong bull market -- this has been the chart pretty much the week.

this is what everybody has been talking about. and that kind of way we think about stocks and bonds. it is throwing people off from an investor standpoint. is that causing people to rethink their portfolio allocations? brian: i was at black rock and ask their chief strategist wise this happening. he says you really have to rethink and because that is not exactly how the assets work in this era of central-bank stimulus. it is obviously against the historical norm. >> if you're looking to make an investment, you are in a difficult position, it is not an easy time to invest.

brian: there is so little yield, but a high level yield react similar to equity. reaching for yield he is not necessarily having the same attributes that make them an attractive part of your portfolio. >> that is pretty much the story of the week. covering treasuries and the bond market. brian is there, of course it is not boring. matt: the battle of billionaires is not over after the ftc finds that herbalife is a pyramid scheme. showll have some charts to you, that story next. this is bloomberg.

matt: this is bloomberg markets. r: a major victory

to billionaire backer karo icon. icon -- backer carl icahn. here is ackman discussing the prospect of herbalife getting bought out. bill: assuming they can issue bonds to do it, and we were forced out of the trade. the positionced with credit default swaps and keep going. this is not a trade for me, we are going to the end of the earth. oliver: that is bill ackman talking about the moral aspect of his investment. he really has made this about two things, making money is his job and he has to do that for his investors. but he has made it a moral battle, because he believes herbalife is a pyramid scheme. the ftc did say herbalife has to change the way it operates

because it encourages people to recruit more than it does to actually sell the goods. it was kind of a route is is an honorable man speech where they were saying it but not coming out and saying it. here's what i find interesting, they find something that is going to resonate with the public. obviously they want to make money here. i'm not going to question his moral compass. they are going to companies and shorting.a same idea, you appeal to something that is going to resonate with a large swath of people and investors who can potentially get motivated. i want to dive into my terminal real quick to look at short interest on herbalife. pretty wildn a ride. i have other capabilities as a reporter here. is short interest as a percent of free flow.

you can see this thing has come down from a high level. up to 20%, about five times more than the average company in the s&p. there are people still betting it is going to go down. otherwise investors say it is pretty good about the resulting settlement. 200 million? matt: $200 million, which is less than half of what carl icahn made betting against bill ackman. i think the interesting story is it isn't yet over, even though it -- even though there is a massive move. and the markmiss close is next. ♪

♪ thee are moments away from closing bell. joe, alex, and scarlet are on

assignment. ♪ the s&p 500 slightly lower on this friday afternoon, falling for the first time in six days. >> but the question is "what'd you miss?" . sees profitgo falls. >> donald trump makes his vice president pick. we will discuss the difference. >> the latest on the terror attack in france. the nation mourns another incident that took the lives of more than 80 people. we kick it off with market minutes, looking at the stocks into the close. we are rooting for a little bit of a bid here. it would be great to see five