we are covering stories in chicago, new york, and istanbul. here are the top stories we are watching. stocks are edging higher thanks to some encouraging headlines, but can we expect more volatility the summer? >> then turkish president aired on -- turkish president aired a gone -- turkish president erdogan -- >> in the aftermath of that failed coup, christine lagarde tells tom keene the quick action -- allish central bank the highlights from that exclusive conversation. we are still hanging onto those

gains. which means another potential record close for the dow and s&p 500, even though if a volume onl gain it is a tight range. us in record territory. if you are the s&p over the course of the day you have a tight point range. one of the narrowest ranges we have seen thus far this year. the nasdaq is back in the technology happens to be one of the winning groups today. holdings of the chip designer from $32 billion.

other stops we have been watching and technology considerably higher today. elsewhere in terms of the individual stocks we have bank of america, which reported its earnings that fell. but still beat estimates. though shares have been benefiting from that. by 2018 they will fall even further. in the past few moments we have headlined on nonsense so that i want to mention. monsanto is said to be in talks with a buyer over a nondisclosure agreement that would allow buyer to do due diligence. $125 per share. now signing this nda to do due diligence.

taking below that price. be a good amount of skepticism getting this done. >> we're seeing some big upside. ?hat are some of the big losers >> some of the losers have to do with earning. hasbro, the toymaker, earning eating estimates, but it has slowed down in the toys for boys business. the trucking and logistics company, its numbers misting estimates and monster beverage getting a downgrade from wells fargo to neutral. the numbers are showing a potential showdown the will be reflected second quarter sales numbers. >> that is julie hyman at the markets desk. now let's check in with the first word news. mark barton is in the newsroom.

-- mark crumpton is in the newsroom. at the naacp convention in cincinnati, the likely democratic presidential nominee said this madness has to stop. killings threaten the ability to make progress. texas senator ted cruz is scheduled to speak wednesday at the republican national convention in cleveland. but he is not ready to endorse the nominee donald trump. senator cruz says there is a lot of despair. ted cruz is accusing the media of playing a role in chums ascension, saying he received $3 billion in free media. the associated press reports it has obtained a document showing that key restrictions on iran's nuclear program will ease in slightly more than a decade. text linksnly secret

to last year's agreement related to iran and six foreign powers. iran reportedly can replace is 5000 centrifuges. the eb says to do mets who provided the information requested anonymity because they weren't authorized to do so. josh earnest says president obama hasn't called turkish president erdogan since the failed coup attempt. the u.s. is cooperating with turkey to help identify accomplices. but it is urging the government to show restraint and uphold democratic principles. a foxnews is responding to magazine report that says roger ailes will be let go a ceo. foxx says the matter is resolved yet and the review has not been concluded. the magazine says cochair rupert murdoch and his sons agree that

he needs to be removed in the wake of sexual harassment accusations. global news 24 hours per day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg, back to you. vonnie: u.s. stocks edging higher today led by a rally in toh shares after -- agree buy arm holdings. joining us for more insight is kevin carranza -- is kevin caron. 180 billion dollars in assets. kevin, a lot has happened since the last time we spoke, which wasn't even that long ago. when you arrived this morning, was everything essentially different in the u.s.? kevin: not as a result of turkey. at the end of the day their world -- there wasn't much to

change. as far as the markets are concerned, what they have seized on has been a turnaround in risk appetites. we see a much better tone in the market overall and we are wondering whether that begins with feedbacks in the fundamental. vonnie: dominating the headlines this week, not just politics and turkey will be politics here the u.s.. we have the republican and democratic national convention. how market moving will these events be? kevin: probably not because this is and a place where you are going to see any significant change in expectation about what the policies that are going to be coming forward. you have two candidates that will be moving forward with their agendas. it is about getting elected at this point and the next several months we will hear a lot about politics. the race has been fairly close. vonnie: you say you are becoming more constructive and may play into fundamentals.

why shouldn't that -- why should it be that way? what makes you so convinced that markets will dictate how the economy goes? kevin: is a great question. if you think about it nothing much happens unless the capital markets are providing credit to the real economy. as investors pulled back their horns, they decide they want to take their capital and go home. the last two years or so has been challenging for the overall global economy. we have a strong dollar, oil prices, commodity prices. havell along the way you on deals and markets that have gone sideways. for the first time in several quarters we have seen a pickup in overall investor sentiment, spreads have come in, the oil prices have come off the bottom. think investors are feeling better.

shery: we are seeing industrial production turning positive after plunging into the red. you can see after that downturn in 2008 and the financial crisis, we are seeing a hit of an uptick. how important is proven to cash important is improvement in this sector? -- how important is improvement in this sector? saw month after month of deterioration in the united states, much more so overseas. what we are pointing out is the fact that the downtrend has been arrested. and that is a very positive thing. if you remove some of the risk of a potential recession happening in the next 18 months, it is good to see.

vonnie: where do you think the leadership will come from in the second half? kevin: i think ultimately it is going to have to come from things like industrials. you are going to have to see some things in the cyclical side of the story. as far as growth and value is concerned we think technology provides a leadership goal. we think the consumer has been very strong. as far as the geographic leadership, we think the united states, which has been relatively strong, continues to demonstrate that leadership in the second half. shery: how much of a risk does this pose? we can see people flocking away. kevin: you can see some rotations. there is a bid for stability.

those companies have very good balance sheets and consistent cash flows. that consistency is going to demand a premium for time to come. i think that some of the areas that have gotten beaten up, there may be some better value ideas that may be there. and i throw these in the pot along with those. funny thing our thanks to kevin caron. and coming up on bloomberg our thanks vonnie: to kevin caron. and coming up on bloomberg markets -- we'll talk with a former member of the turkish parliament. ♪

vonnie: this is bloomberg markets. shery: time for the bloomberg's news flash and a look at some of the biggest stories in the news right now. berkshire hathaway has agreed to buy new york-based medical liability insurance company in a one point $8 billion acquisition that highlights warren buffett's leadership role in protecting doctors from lawsuits. the largest underwriter of medical professional liability insurance in new york will converge from a policy owned business to a stock business. the deal is expected to close next year. i downturn as analysts may have been triggered by uncertainty a bid for armed holdings. -- becausepeculate of a planned acquisition. softbank plans to fund the

purchase. reducing their ability to fight funding directly from sprint. >> one company is witnessing a reach of the nation and stock peter shares of dove -- of dove and holding -- and stock. which has been vilified by president erdogan as are presenting old turkey. border connected it to with erdogan via face time when his whereabouts and status were still unknown. flashat is your business update. >> the latest on turkey, stocks plunging after the way -- after this weekend's failed coup attempt. the index losing 9%. dollar giving back some some ofr getting back

its gains. at joining us from washington is ancan add a mere -- is ayken erdemir. theident erdogan called coup a failed gift from god. i can bank -- arrested 6000 soldiers but his purges not limited to the military. i was thousand judges and prosecutors have been relieved of duty and arrested.

this is the short-term affect. the midterm effect could be that it will probably produce -- -- hely boost erdogan's will use the opportunity to push for a constitutional change and judiciary and the slate of powers. -- and legislative powers. >> what happens to his popularity ratings? half the population seem to be supportive of him as president. will that change? in general throughout turkish history when politicians, when elected politicians are victimized by the military, their support tens to go up. expect that today he enjoys the sympathies of turkeys

-- of turkey's anti-military crowd. we have to keep in mind the opposition support threatened by the coup was not necessarily support for erdogan's personality or erdogan as president. but more support for turkey's parliamentary democracy. we have to keep in mind all parts him and -- all parliament ppositions in turkey -- i would like to argue that the big coalition against the coup is not necessarily support or erdogan.- support for has promised a new turkey after this failed to. how much will overseas markets cooperate in this vision given that we have already seen investor confidence being pretty fragile on turkey? erdogan has been talking

about a new turkey but i think the coup attempt finally gave him carte blanche to redesign the judiciary police miller terrie and system. -- police military and system. the less the markets will cooperate. fear of already capital flight from turkey. --re is fear of range rain of brain drain as the population feels there is no future for them in turkey. minorities are becoming increasingly worried about the reprisals and vigilante attacks. he might further push the economy down. >> our thanks to icon editor can -- our thanks

to aykan erdemir. -- we will talk about how to traded in our options insight. this is bloomberg. ♪

vonnie: this is bloomberg markets. shery: time for options insight with julie hyman. thank you. at joining me for today's -- we'rensight is seeing a drop off in volume. during i were talking the break, volatility is not doing much of anything. >> and it hasn't for a while.

decline in the vicks over the last couple of weeks, the largest ever, and the other interesting data point is the the 11 largest have all happened since 2011. change in structural place over the last few years that have suppressed volatility. it is late july. a lot of people are away. julie: to get to that bigger issue, why has there been a structural change if that is indeed what happened in volatility? something about the nature of trading in the market changed? it is the stuff of conspiracy theories as we talk to clients. qe, it is an open question. at some point in the future people will look back and say

what exactly happened? he was volatility over the last several years? i don't have the answer. julie: it is earning season. a lot of people may -- a lot of people may not be around to trade it. you guys are relatively positive going into these numbers, right? jim: tomorrow there will be a shareholder vote on the acquisition of the emc. really we are looking at that transaction. it is widely expected we get shareholder approval. the chinese regulatory bodies, the actual closing of the transaction could beat the late a little bit. at earnings.g

it is very unlikely to see much volatility. there are 60 volatility points spread. betweenvolatility terms the weekly option and looking out to september. you always have implied volatility lift into earnings. in this particular case, you combine that term structure set up with the fact that we expect a pretty benign report. they will buy back 1.2 billion and stocks. it will also free a lot of capital that could come back into bmw.

this is what we do. we look at this week's july 22 expiration. we want to sell 57 strike put spread a low l-type i.e.. about $.75. then we turn around and in september we buy 70 strike calls. 80, 90 depending on how you measure it. those july 22 puts were -- julie: thank you so much. back to you. >> the close in just over 30 minutes, this is -- ♪

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vonnie: from bloomberg world headquarters in downtown manhattan you are watching bloomberg markets. shery: mark crumpton is in the newsroom. the long-awaited republican draft platform is expected to be on this. the document, which reportedly was finalized either republican committee calls for, among other things, more accountability and transparency at the federal reserve. expectedorm is also that no major trade decisions be duck session lame after the november elections. the strained relationship between donald trump and john kasich is on full display at -- full display as the convention gets underway. trump campaign manager calls kasich petulant. ohio is a must win state in the race for the white house. a week before their convention

in philadelphia, democrats are trust to channel the busting populace of teddy roosevelt. , theraged by key figures party's platform committee has added a pledge to go after dominant companies seen as abusing market power. that is something that hasn't happened since 1988. seeking outs officers who were then assassinated. that the shooter identified as an african american male, who was a former u.s. marine, was in the city looking for locations to specifically target a law enforcement. three other officers were wounded yesterday. u.s. secretary of state john kerry is expressing concern with turkey's response to friday's failed to attempt. secretary kerry said a turkey, must uphold amaga c and human

rights as it pursues those behind the plot. >> we also caution against a reach that goes well beyond that. mark: turkey's government is rounding up about 6000 people since the coup attempt, including hundreds of judges and prosecutors. dayal news 24 hours per powered by more than 2600 journalists and analysts and more than 120 countries. this is bloomberg, back to you. shery: markets close in under 30 minutes. let's go live to the nasdaq with abigail doolittle. : really outperform in the dow and s&p 500. behind that outperformance, technology. hugely strong, up 1% with a lot of big names participating. this includes apple, alpha but

-- alpha, facebook. a greed to be has bought by softbank. today isss well monster beverage. shares are lower, having their worst hastens february 29. then -- saysays the near-term potential -- sears of monster beverage are up about 4% year to date. perhaps she will be correct, thinking the near-term potential is limited. >> how will this set the tone for tomorrow? abigail: great question. of course we will know soon.

investors are looking at nine cents per share on $1.2 billion. we have lots of messy quarters out of netflix this year. one analyst who has been dead on is corey at m science. he carries consensus numbers in the quarter. now he did e-mail our team earlier, saying he's very cautious in tonight's report. his concerns on the third quarter guide, he thinks there which a price hike continues to hit. he thinks domestic subscriber growth can be flat to the second quarter. end of the day corey says he thinks it's going to be an interesting and exciting report. chart ofk at a bloomberg data, netflix could swing by 11% up or down.

so it could be time to fasten our seatbelts. scarlet: corporate earnings spring optimism that earnings will be sturdy enough to help sustain these equities near record levels. while the pressure is on for high-yield stocks in the s&p, the next guest says it could justify higher prices for equities. joining us is gina martin adams, wells fargo market strategist. we are talking about the dividend payers being sought-after. we see the 10 year yield, approaching that level after approaching 1.3 6% per you door closing at that level earlier this month. does that mean less demand for dividend payers? gina: not necessarily. the spread between the dividend yields and the 10 year treasury yield is so high that we would

have to see the 10 year go all the way to 2.6% to get it back to average. so there still is this underlying fundamental yield. stocks are also expensive. tois getting more difficult find those opportunities on the index. i think they exist, particularly when we look at the bond market. shery: do you still jump into the rally? gina: we screened the s&p 500 and found there were 28 stocks that had a dividend yield of more than 150 basis points above the treasury. you have a little cushion there. and they still have an earnings deal. the opportunities are still there.

i think the yield is -- i can't tell you the name of the stocks. but there are 28 stocks and they span across a different sectors on the index. scholar bank list of the earnings season. we have a couple of big tech names reporting after the closing today. what have we learned about the health of economies from bank so far? gina: the banks story is they are still surviving. in a world which rates are extremely low, the banks are still producing some degree of topline growth. large bankng in earnings declining year on year. we are still seeing a generally improving economy.

we knew that coming in. scrubbing -- scarlet: what you make of the flat yield curve? gina: it still tells you the recession is not imminent. it is typical at this stage in the cycle. what is unusual is all rates are extremely low. it is just incredibly difficult to do. otherwise the yield curve normally flattens at this stage in the cycle. it would normally be flatter. that is just the difference between short rates and long rates. continues to flatten until it inverts.

-- do profitfit transitions make a difference? difficult, particularly because we have had this experience. i think you are at a standstill where valuations have reached some sort of heat level -- some and expectingevel to improve over the next four quarters. it is part of why valuations have risen over the last couple of weeks. i think what you need to see in order to justify current level valuation and see valuation levels go higher is you have to see earnings growth accelerate. we live in an environment where for eight executive -- eight consecutive quarters we have had decelerating. see global central banks remain to be externally, that's extremely, dative. pushe fed continues to back that an inevitable rate to

rise, valuations can probably go a bit higher. scarlet: in terms of the deceleration, have we see the trough or is this quarter or next quarter likely to be at? gina: the next quarter should have been the trough. looks like we will print better numbers this quarter than we did the next quarter. that is the consensus expectation, where we are supposed to see this big hockey stick growth. it will be tough to meet those now wetions in 2017, but are in a turn in the learning cycle. think -- >> thank you so much for that. coming up, an exclusive interview with imf managing director christine lagarde. what she thinks of the brexit vote, politics, and money. that is up next on bloomberg. ♪

the shery: time now for the

bloomberg business flash, a look at the biggest business stories and the news right now. 400 shell employees are planning a july 26 strike that could jeopardize production at some of the company's oil fields in the north sea. the union representing the disgruntled workers who voted overwhelmingly for a walk out says the 24 hour strike will be followed by a series of other stoppages over the coming weeks. the strike is the first in the u k north sea in a decade.

groupon shares were up as much as 11% today after analysts upgraded its recommendation for the online market. it is the highest surge in three months for groupon, since it struggled going public in 2011. company's narrow focus and marketing spending as -- not --aker martin is in is not sold yet on -- he needs to see more evidence of uk's vote to the leave the eu. he says central bank may ease monetary policy. british citizens cut spending in anticipation of any long-term hit to the economy after breakfast -- economy after brags it. london the homebound could fall more than 30% because of the

british decision to leave the eu. companies will certainly have to relocate parts of the accessusiness to retain to the eu's single market. that is your business flash update. >> in the lead up to that, imf managing director christine lagarde share some of her thoughts in an exclusive interview with tom keene. from the federal reserve building in fed -- building in northern manhattan, she discuss what path thees imf is taking after the brexit vote. my recommendation would be reduce the level of uncertainty, identify clearly what the goals are, identify the that it, and understand will take time. requireill

understanding of both sides to eliminate the trait of certainty, the regulatory uncertainty, the passport uncertainty. whole range of issues which needs to be addressed, which has rocked the european countries together and from which clearly the united kingdom has indicated its intention to with draw. identification of the goal and the timelines would be very helpful. tom: you pleased with what you have seen from european leaders so far? the unitedsed on kingdom, are you pleased with the message of chancellor merkel and others in europe. christine: they have not deliberately so decided to lay out the terms and the space and

the maneuvering that they all want to offer or expect from their partner. and i understand that because there has to be certainty about the timeline. -- it will open a limited period of time, and i can see why they wouldn't want to put their cards on the table yet. but if on the other side the you the united kingdom then forward with -- certainly the europeans should respond. european leaders will find the strength and determination to actually bring structuralof those reforms, changes that will to liver volume to the europeans that will demonstrate it is worth being together. and it is the future.

tom: you have been exceptionally over and your comments on this presidential campaign. what do you fear and a comments about the international economy and their political economics. christine: any candidate , i feel in the world this with trawl -- this thisrawal behind borders, focus on market issues exclusively, this turning their back to globalization and global issues. problems are of a global nature. we are in this together. disease, climate change, threats, have no barriers, have

no borders. we can do away with trade, i think we could do away with globalization, think it is an illusion. tom: i think of -- he had been trying to move the debate forward. then inical question is henry kissinger's failing system of nations, is the washington consensus debt? christine: they all launch powerful authorities that need to have a seat at the table. i think from the imf perspective. the largely kerning -- the large emerging market economies, they have a legitimate space around the circle of nations.

certainly a needed response to the global challenges we are facing. it cannot be a zero sum game. much broader. olivier -- stunned me the other day by calling helicopter money a scam. are we exhausted by our creative policy? you have been the adult in the room on same many of the strategies won't work. moneyou hear helicopter how do you react? what do you do? christine: he is a fantastic counselor so i will turn to him. notion, whicham is provocative as it can be in some occasions, is to say this is fiscal stimulus to the

extreme. at this point in time i think you would agree with us. some countries have some fiscal space. they would recalibrate and redesign their fiscal policies. soon people can actually find meaning, get a job and have a decent income. scarlet: fellas an interview with christine lagarde. tomorrow we will speak with chief economist -- on the world economic report, which the imf releases and 9:00 a.m.. coming up next, three big tech copies reporting today after the bell. you have netflix come yahoo!, and ibm. the charts showing you the

potential good, bad, and ugly.

scarlet: this is bloomberg markets. they: let's take a look at chart that illustrates today's market moves. focus on global subscription gains as well as competition in the u.s.. what are we expecting? scarlet: what is interesting is people gaining out what the share price reaction is going to be before we know what the results are going to be because nothing's has this history of having big moves. this is what options show right now. swing 11% posted earnings. one direction or another, that would be the most out of any company in the s&p 500. chipola was the second most actively traded stock.

trip advisor would follow suit. let me pull this up. if you come inside bloomberg here, this is a pretty good illustration of why. three months ago when netflix reported earnings, the stock tumbled 13%. to october back 2014. netflix shares have go -- have to go by double-digit share percentages. it is not necessarily an up move or a down move to -- down move. scarlet: and other stock we could see big moves for yahoo!. this could be the last earnings call for marissa mayer. yahoo! is a -- you was projected to report -- take a look at their sales for employee and u.s. dollars, they are trailing and

lagging behind other major , including potential suitors like at&t and verizon. saying they are need at least 1000 more job costs -- job cuts. scarlet: a can be any number of metrics and yahoo! always seems to be trailing the other big players. kinds of ways you can slice it or dice it and yahoo! tends to be on the tail end. that does it for bloomberg markets. d you miss and the market closes next. -- market close is next. ♪

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scarlet: we are moments away from the closing bell.

[closing bell ringing] u.s. stocks closing higher with dowu.s. -- what the s&p and reaching higher. tech earnings kick into high gear. we break down the results in just minutes. turkey'su.s. warns on place in nato. we will talk about what it means for the country. oliver: and we have a live report from cleveland to what to expect at the republican national convention. scarlet: we begin with our market minutes with u.s. stocks closing with modest gains in a the dowading range with and s&p at record highs. the nasdaq at its best level since december. seven out of 10 major groups rose with tech and materials the best performers. consumer staples were the laggards here.