welcome to "bloomberg markets." ♪ david: we are live from bloomberg world headquarters in new york. here is what we are -- the s&p 500 has gone back for its fourth weekly gain. what about the bond market? treasuries could snap back from the record-setting rallies. vonnie: a bloomberg news scoop -- an announcement should be coming in the next few days over the acquiring of yahoo! david: and eight $2 billion second-quarter loss. we are covering the results in today's commodity close. vonnie: markets close in two hours. bloomberg said julie hyman been keeping an eye on markets all day. julie: i have. we have seen little changed

early on in the day. dowver, not enough for the and the s&p to reach new records here. investors are going through earnings news once again, a lot of corporate news, and they are weighing against valuations for the s&p 500. take a look at bloomberg here. $22.08. s&p has gained more this year, so there are some about the possibility of companies in the u.s., being enough to sustain those valuations. that is something investors will be waiting on a macro basis as we go through this earnings season. one of the top corporate stories today does not have to do with earnings -- it has to do with m&a. we are watching verizon and yahoo! on this news that vonnie and david mentioned that verizon and yahoo! are in one-on-one talks, a $5 billion acquisition.

it is not clear if they will indeed get them, but it looks like it could, and it could happen early next week. at&t also announced earnings today, trailing analysts' estimates, but the shares are moving higher. perhaps not the winning bidder. mobile subscriber growth beat estimates. getting back to earnings news that we have been watching among the earnings-related winners today, american airlines benefiting from fuel prices that propelled its profits to beat estimates. southwestern energy, second-quarter production raising its forecast for production for the full year. black & decker raising its forecast as well and getting a new ceo. that is the plus side in the negative side of the column. ic beatingectr estimates, but its orders last quarter falling by 2%. withwell also coming out its numbers, and by some measures, missing estimates as well. actually beating

estimates, coming to an agreement with be sent a long-standing disagreements -- away fromtook credit cards. some analysts say this will weigh on paypal in the short term in terms of operating margins. it is interesting because we have focused some much on equities, but oil prices have been lowered today. you can see down by more than 2%. that seems to have coincided with an increase in the u.s. dollar. if you look at the bloomberg dollar index, you saw a midmorning uptick in that index. traders were reportedly scratching their heads over what exactly was going on. we have seen some pressure on the pound today. that could have been converting to the uptick of the dollar. vonnie: all right, julie, thank you. david: let's check on the ws.omberg first word ne mark crumpton have that

including breaking news from germany. : police in germany are investigating a pair of shooting some a one in a shopping mall, the other near a train station. you are looking at live pictures from unit, germany. it appears that was the work of more than one gunman. at least three people are dead with several others wounded. munich police also reporting there are thought to be at least three shooters. it is the second attack in germany in less than a week. , a 17-year-old ax-wielding man attacked people on a train. he was shot and killed by police. president obama and mexican president enrique opinion yet so -- president obama invited mexican president in riga opinion he had to -- enrique pena nieto to the white house. they held a joint press conference. pres. obama: although i am disappointed in the supreme

court of the failure in coming to a conclusion on executive action, it is my belief in the interest of the united rates, especially our economic interests, to pursue comprehensive immigration reform. president also stressed the importance of the u.s. relationship with mexico. donald trump said he would not accept ted cruz's endorsements, even if the texas senator offers it. he says cruz should have endorsed him the other night, and he may set up a super grip -- a super pac to shoot down cruz if he runs again in the future. 45 more athletes, including 23 medalists from the who thousand eight beijing games, have been caught for doping after retesting samples from the last two olympics, that is according to the international olympic committee, the ioc. that brings to 98, the total number of athletes who failed from in the reanalysis

stored samples in beijing. no names were given. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. david, back to you. david: thank you, mark. , the ten-year-year note is on pace to end the week. i want to bring in kathleen gaffney. youre ask you about forecast here, back to where we work. what is your forecast over the next two months? , i think four rates that eventually they are going higher, although there is definitely a ceiling on them being german by the fact that u.s. treasuries are the high-yielder in the developed world government bond market. we have the u.s. 10-year than theich is higher

gilts, and the german 10-year, you can see, is in negative territory right now. yieldhe german 10-year and others drag down the u.s.? kathleen: they are pulling the u.s., and there is greater demand for picking up yields wherever you can find it. the markets are really in a mode where they are reaching for yield, and it is not just treasuries. we are seeing it in corporate bonds, investment-rated high yields, and emerging markets as well. very strong record flows. david: give us some sense of what you are doing right now. are you sitting on cash? kathleen: i am actually building cash. the reach for yield, there is less value in the market. i have a multisector find, so i have a lot of ability to invest

in a lot of different areas. i think it is a good time to own a little bit of everything. you have to be very, very selective. so much value has come out of the market. dry powder right now is very important. vonnie: you say credit risk as opposed to interest rate risk. how does that portend for the month ahead? kathleen: fundamentals are definitely ok. not great. it is a good time to be taking credit risks. the overallis that yields have come down so far that most corporate bonds have a lot more interest-rate risks than actual credit risks. it is hard to get paid for taking the credit risks unless you are in some of the areas with uncertainty. those are the types of bonds in cyclical, commodity-related areas where i do think there is more value. david: we had a lot of central-bank news this week. weekomc meeting is next

and washington, d.c. let me ask you first about your reaction to what the ecb said yesterday with mario draghi, saying he will see what happens. he has the ability to move if need be. what is your read on what happened yesterday? kathleen: uh, i think mario draghi is saying the right things because there is so much uncertainty in global markets about the strengths of the economies. europe has a lot of work to do. we have some issues with the italian banks, although we have seen some very positive progress with comments coming out not only from merkel but also draghi as well, pre-much telling us the italian banks are going to be about to bail out the banks themselves without investors taking any kind of haircut. so that is a positive. but we really need to see economic growth, and that is what is lacking.

what is happening is there is a lack of growth we are seeing. politics are taking on a much bigger role in the markets. vonnie: and in fact, you brought up the u.s. election as something we have an watching closely. what would happen to interest rates in either scenario, kathleen? kathleen: well, i really think it is not matter who ends up in the white house because what we are hearing -- and it is grabbing everyone's attention -- is it is a very different election from what we have seen really in my entire life. but there is a lot of anger and our country. so what that means, i believe, is that the politicians, whoever wins, are going to have a mandate to start spending. we will see fiscal spending take up in a bigger way, and it is not just here in the u.s. canada is doing it. the imf and oecd are behind it.

-20 meeting coming up, and there is a good chance all the global leaders will be talking about -- how do we get growth going yet so they will get it does mean higher interest rates. there is not a lot of value there. vonnie: kathleen gaffney, eaton president, thanks very coming up next, bloomberg news reporting that verizon has beat out other debtors -- bi dders for the purchase of yahoo! for $5 billion. analyst upgrades papa john's was an interesting theory on why more americans will be dining on pizza in the coming year. we will talk with christopher o'cull just ahead. vonnie: the time in new york is 2:11. let's check the u.s. markets. major averages floating, but not too much. the s&p up more than .3%. the nasdaq up .5% for a 26-point

again. this is bloomberg. ♪

david: this is "bloomberg markets." i am david gura. vonnie: i'm vonnie quinn. is time for the bloomberg business flash. are close to an acquisition according to barclays. the company faces an uphill battle in the court case against the doj. cigna's and block anthem's plans to purchase humana.

david: first hawaiian planned ipo somewhere in the acidity of $3 billion to $4 billion according to people familiar with the matter. the largest bank in hawaii as owned by bnp paribas. a $100spectus has million placeholder. they expect to sell shares in the next week. vonnie: a majority stake in chemical industries. -- that ise company according to be able with knowledge of the bank has failed to bring in more than a billion dollars. a owns about 70% of waco. yahoo! and verizon, both shares are up. verizon is said to be the lead bidder to purchase yahoo! for $5

billion. we have insight on what is in it for both parties. >> the only thing we do not know at this point is the real estate, but verizon is not going to buy the ip. there is no deal formally done during that will happen over the course of the day, maybe the weekend, but we hear the price tag is closer to $5 billion, $4 billion, it is in the upper $4 billion range most likely. the ip will be acquired by some other party, and the real estate may or may not be a part of that. verizon was previously offered only between $3.75 billion and $4 billion, so this is why a dramatic escalation from what their previous round big was -- bid was. vonnie: what will an aol-yahoo! combination due to be better than yahoo! was able to do on its own? it has been falling, losing market share. what will a will add? alex: aol will add a very good

ad technology. aol has a very good programmatic platform that verizon thinks it can sort of hair with yahoo!'s in order to really get ahead in the world of digital advertising, but this transaction is as much about taking it out of yahoo! as it is pairing it with a well there are a lot of synergies, and that means operational synergy, job cuts. expect verizon to go through yahoo! and cut the fat, in essence. that is part of what this transition is all about. vonnie: marissa mayer, as we all know, has been coming under a lot of pressure from shareholders. is this going to be a real highlight for her than? alex: well, you know, she is going to get $55 million if she does not come along with verizon. there will be a lot written on marissa mayer in the next

several weeks about her legacy at yahoo! she came into a situation that was very difficult. yahoo! was not a winning company when she came in a. she had a sort of turnaround and, she bought tumblr, others. nothing really worked. yahoo! was not able to get the focus it needed to have a true identity under her watch, so she has come under a but of heat from shareholders, from activist shareholders feared i think that in the end, selling to verizon for close to $5 billion will be seen as likely the best outcome she could have done. look, there were talks that yahoo! may not be able to sell the company at all, that a sale would break down. an activist investor came in, pushed her sale. this has been ongoing for many months. it has been a long sale process. it has been a dysfunctional sale process from almost everyone i have spoken to. they're definitely has been some

contentious points between morris a meyer and the board. marissa mayer wanted to stay on with yahoo! she investigated the routes with that. in the end, it looks like verizon will acquire this. verizon will most likely acquire the entire line, and marissa mayer will not be coming along, and tim armstrong, the former aol ceo am a will run a combined yahoo!-aol. david: bloomberg colleague alex sherman. gene munster is overweight on yahoo! sales. gene: time is of the essence here because the real value is unlocking yahoo! japan, alibaba, in a cache-free transaction. he really need to get that done before the election. i think this is a good outcome, and obviously some of this a few have been reporting on, their alignment with verizon would make a ton of sense. seniorpiper jaffray's

research analyst in munster with a target on yahoo!. one analyst will draw the connections between pizza and the presidential election coming up. this is bloomberg. ♪

david: welcome back to "bloomberg markets." -- mark: welcome back to "bloomberg markets." i am mark crumpton. we want to get back to news out of germany. a shooting, one at a shopping mall, the other near a train station. news outlets are reporting there are thought to be three shooters. three people are dead with several others wounded. it is the second attack in germany in less than a weaker it on monday, a 17-year-old ax wielding man attacked several people on a train. he was shot and killed by police. a manhunt underway for a shooter or shooters who opened fire at a

shopping mall, killing or wounding several people. latest reports say at least three dead. several others wounded. we will bring you developments as soon as we get them. david and vonnie, back to you. vonnie: mark, thank you. could civil unrest in the u.s. help the bottom line of pizza companies? christopher o'cull thinks so. he has upgraded the stock. he is on the phone from nashville, tennessee. chris, what made you make this call? christopher: well, a couple of things. one, it was clear -- let me be clear, we do not believe that are afraid to dine out. we were talking about the fact that a number of folks have been watching a dozen or so i marry debates, townhall meetings, it looks like you was pretty high this week for the convention. -- i assume it will behind next week. when youew is that

look at the amount of a viewership on cable news as some of these events, a lot of these folks are saying home, watching these thinks, and ordering pizza. it is funny, i watch this and wonder how anomalous something like this might be. there are big sporting events, one would assume the same thing. about thethis say political season we are in? there have been no shortage of republican debates. christopher: i think it does disrupt the normal course of consumers' day-to-day lives. i think that -- you are right. it is similar to the nba finals or the olympics that are coming up here shortly. if you look at the ratings and the viewership from some of the cable stations the past three months, it has been very high. when you look at the full service restaurants, reporting weaker traffic the past few months, and that culminated in june where they had one of the weakest traffic months in the

past several years, i think it speaks to the fact that some folks are looking for more convenient options like take-out or delivery. vonnie: have you upgraded any other stocks, chris? christopher: we have not. the two pizza names that we cover our papa john's and dominoes, and we are constructive on both in that sector. those are the ones that i think are benefiting. you are seeing, though, some healthy take-out business from some of the casual diners, if you look at the garden brands, which owns all of garden, they have been very focus on driving their take-out business or off-premise sales. last quarter, if you look at,s, it was 2.4%. it was 2.4%. david: looking at domino's for the year, up 30%. what is that company doing right in your estimation? christopher: so domino's -- i

would argue it is one of the best-managed companies in our industry. the company has done a great job consumers -- they have the ability to order their pizza through different digital platforms. in doing so, they have collected a lot of great information about the consumer, and they have been able to focus their marketing strategies and their message to those individuals at the right time and with the right message, and that has driven frequency. what is impressive about domino's is their same-store sales growth, high digits, is coming through same sales transactions. david: still ahead, the commodity quote coming up. this is bloomberg. ♪

>> and david era. .> i'm vonnie quinn a check of the headlines at the

bloomberg first word news, including the breaking news out of germany. mark: in germany police say at least two shooters are at large and myrna and they are -- people are being urged to avoid public spaces as authorities conduct large-scale operations. the associated press reports 6 people are dead, many others wounded at a shopping center. public transportation is halted as police search for the suspects. to be police are said asking residents to stay indoors. earlier reports of a second deemedg have been unfounded. elizabeth, what more can you tell us? >> you summed it up pretty well. i guess what i could add is, the city in lock down. a sense of fear as police are still hunting for these shooters.

even from the office window where i'm at right now, i can see several police vans, police patrolling. it is really sense of control of the situation being quite under control. mark: given the fact that we recently had that attack by that thean teenage immigrants on train where passengers were wounded when he was wielding and can you give us a sense of how the german authorities have, if at all, stepped up their operations in the wake of that attack and what happened today? elisabeth: if you go back a little bit further to the attack in nice by what was thought to be somebody acting more or less by themselves, i think they would have stepped up control .nd vigilance even then

we see the attack happening earlier this week on the train. following that, police found evidence in the flat of the afghan refugee that he had been radicalized by i.s. and videos as well. i think they would have been on a heightened alert. mark: have we heard anything thus far from chancellor angela merkel or any of the other high german officials? elisabeth: no. we've heard some comments from the bavarian interior ministry but that was more about confirming some deaths, but there's not in a response from the federal government. mark: elizabeth -- elizabeth behrmann elisabeth joining us on the phone. it has been attack -- an attack at a mall in germany. six people have been killed, and unnamed number wounded.

we will bring you more developments as soon as we get them. i am mark crumpton. david, vonnie, back to you. vonnie: commodity markets closing in new york. let's look at today's biggest movers. risk continuing to fuel gold's moving streak. oil slow down, settling at $44 a barrel. the u.s. heading towards the end of its summer driving season. stockpiles fluctuated between 44 and 52. in thetwo big layers market, halliburton, schlumberger reported second-quarter results and gave a bold assessment of where the market is headed trades they declared the worst may be over in the market crash. an energy report covering

oilfield services for bloomberg news. of 2.1 6ffs, losses billion in the second quarter. but that into context for us. we've had a lot of layoffs the last few quarters. >> for schlumberger, that is the case. this turned out to be their worst quarter in a decade. even stripping out the $2 billion charge, 8000 job cuts, $.23 a share, worst in more than a decade. certainly with schlumberger saying we have hit the bottom of the cycle, the earnings bear that out as well. to update you on where the job cuts are for schlumberger, that brings it to a total of 50,000 cuts. now 2 years in the making -- but even with all that, they are still at 100,000 head count. still pretty large. vonnie: what does it say about

capital spending for the next 2 quarters? just in general, the companies that would use their services. the callberger said on this morning that we will end up with an oil supply shortage because we have been pulling back so much. it's time for the emp's to start spending again. the problem is in the early get-go, much of that investment by this will get soap wave of oil service costs increases. going, there will be cost inflation that the explorers will have to deal with. david: both these companies have called the bottom, when they talk during the conference calls and we saw the earning reports -- what does the timetable look like? >> definitely if they are urging slow and steady and predicting that as well.

nothing is looking too fast this year. maybe next year is sounding from them like it could he a better year.- be a better from halliburton standpoint they are predicting north america, their largest region, they could cut their losses and break even by first quarter of next year. schlumberger is not willing to go that far. they say that because of the serviceoilfield companies in america, international will be a better place for them to grow earnings than in north america. vonnie: what are you hearing in houston about the next round of refinancing and other outfits that finance oil companies? you have a lot of companies looking to go to the credit markets again. termsstill happening in of companies trying to exchange shares for some of their debt, to get on top of things. but there's not a lot available right now, and that is the

problem. they need oil prices to come up, just to give them some breathing room so they can get the debt down and get back to the banks. david: david, thank you very much. coming up in the next 20 minutes, full steam ahead for the presidential race. the rnc wrapped up in cleveland. we will examine trump's strategy going forward, and the guessing game continues. pandora's earnings reported flat. up 2/10 ofee the dow 1%. %.e s&p up about 1/3 of 1 the nasdaq up 1/2 of 1%. ♪

>> yes. by all accounts, we talked to democratic insiders, talking to republicans at the republican convention. what you think is going to happen. the most far and away often named pick and no one in the clinton campaign waving off of that. of course the danger in these situations -- you could be almost right and not be right.

in the last couple of days, new jersey senator cory booker torged as someone so close the clintons is said, don't forget about him so soon. he has been serious up until the end. was presidentaine obama's almost choice for running mate he's become a lot more seasoned since then and he offered some important attributes to secretary clinton. all of that is probably under consideration. we expect we will know in the next couple of hours. vonnie: what will she lose by not choosing some of the others? >> let's run through the list. at one point senator elizabeth warren was under consideration. they did an electrifying joint appearance. she would appeal to the progressive base, the bernie sanders supporters who can't quite get their heads or hearts around secretary clinton at this

point. there were a couple of prominent hispanic candidates for this position, tom perez. we have heard from a local news affiliate in castro's home state of texas that they believe he's now out of the running. if it was important to have a hispanic face on the ticket, you may not get that with tim kaine, but tim kaine did catholic missionary work in honduras and is fluent in spanish. what you lose by not going with an african-american, hispanic, woman, part of that core democratic race, you may gain in terms of appealing to independents, even potentially republicans who are not comfortable with the trump ticket. david: we heard donald trump's speech last night. four days in which you had a lot of people mentioning hillary clinton in a negative light. what in terms of a reaction to

what we've seen over the last week are we expecting from the clinton camp this weekend? calibratee trying to the defense to reaction to secretary of state and -- policies. we don't get too much on the defensive. this is their week coming up. they want to do their message. they want it to be a largely positive message. trump, interestingly, this morning as cleveland wrapped up seem to be suggesting that pickon's timing on her vp was politicizing things, wanting to stop his momentum. that's definitely partly true. this is precisely when you would expect to see the running mate announced. vonnie: that announcement in the

next couple of hours most likely. thanks. well now, let's turn to breaking news out of munich. mark crumpton has details from the newsroom. mark: police say at least two shooters at large in munich. people are being urged to avoid public spaces and stay inside as authorities conduct large-scale operations. the associated press reports 6 people are dead, many others wounded at a public shopping center. police continue their manhunt. we will continue to update the story and give you more information as soon as we get it right i'm mark crumpton. this is bloomberg. ♪

vonnie: this is "bloomberg markets." thed: it's time for

bloomberg business flash, the biggest stories in the news right now. european central bank policy makers currently see no arjun need to adjust or expand their bond buying program in september according to euro area officials. the governing council believes its current quantitative easing plan is effective. the council met yesterday in frankfurt. vonnie: lori all is -- l'oreal cosmetics--i.t. consumer partners will become part of the -- division of l'oreal. l'oreal will continue to operate out of his jersey city headquarters. jeff bezos sneaking past warren buffett to become the third richest person on earth. his net worth surpassed $65 billion today. bezos' wealth increased by $4.5 billion this year, marking a

resurgence. that is your business flash update. vonnie: pandora said to have lost more than one million active listeners. hadomberg west" emily chang an exclusive interview. she joins us from san francisco with more. good news and bad news. what did tim and up with? emily: the use those words, good news and bad news. he is still excited about the good news. this means the product they have, people are more engaged with it and they can target even more advertising to those listeners. listen to what he said specific he about how do we make sense of this fact that for the first time ever, active listeners have dropped. listener hours still ticked up 7%. >> we have been signaling that

we expected to be flat for a while. we are surrounded by a glut of these free on-demand services that we can't directly compete with yet. we are building new products that will address that. i think the growing engagement is a positive signal for us. our core listener base listens to more and more. we just crossed the 24 month threshold. emily: they are thinking of adding new products. one, and on-demand streaming product that will compete with spot of why and the on-demand streaming services -- spotify and the on-demand streaming services out there. the music ticketing service will take a little bit longer but he's expecting over the long-term to quadruple revenue to $4 billion by 2020. advertising at the same time ads listeners have seen increase 50%.

-- 15%. up until last year i was living in washington, d.c. and i can't tell you how excited people were about the prospect of doing political advertising with pandora and other businesses. emily: this is an exciting part of their business. that pandora can tell if you're a democrat or republican just paste on what you listen to and your zip code. bloomberg has reported that the presidential campaigns super pac i've really been putting a lot of those digital ad dollars towards pandora because they can target younger users, and hillary clinton advertisers have specifically been trying to target latino users. i asked him specifically, how do you know if i'm a democrat or republican? code you combine your zip with the style of music you are listening to, we can predict

your political affiliation with 90% accuracy. we see spending on pandora from local county supervisor races all the way through presidential. we have a very strong political foundation, kind of the right product for it. emily: really interesting there, especially because the national ad market for radio has been fairly spotty. the political advertising aspect of this particular season has actually helped pandora. been through the first week of earning season, here is second-quarter earnings season. what are you looking forward to seeing her? emily: many of those are tech copampanies. of course, apple is going to be one of the top once we are following. analysts are not too optimistic about this quarter. apple has guided to

substantially lower revenue from the third quarter a year ago. analysts believe that could be due to the popularity of the iphone se, the cheaper iphone has been doing quite well and it has gotten good reviews. that may have brought the average price of the iphone down. they are optimistic about next 7.r and post iphone seven -- thank you very much. that's emily chang, anchor of "bloomberg west." airlinep, southwest stocks tumbled this week after canceling more than 1000 flights due to a system outage. we are covering the ins and outs of the industry here. this is bloomberg. ♪

david: i'm david gura. vonnie: i'm vonnie quinn. welcome to "bloomberg markets." ♪

vonnie: we are alive from bloomberg world headquarters in new york, covering stories out of san francisco and washington. forunich a manhunt underway at least two shooters who opened fire at a shopping mall in munich, killing 6 people at least and wounding others. david: stocks on track for a fourth week of gains, pushing towards all-time highs. why investors are pushing political uncertainty to the back burner. wall street still not pleased with the airline industry. david: we are one hour from the close of trading. julie hyman has a look at the latest here. julie: i'm checng