u.s. stocks closing mixed after the fed leaves interest rates unchanged. joe: the question is "what'd you miss?" look ahead to whether the central bank will raise rates this year. we look at how instagram and video are driving sales on mobile for facebook. >> day three of the democratic national convention. will speakbama tonight about why hillary clinton should succeed him. stocks.ed a for u.s. it did exactly what was expected, nothing. from the dow jones industrial average. the nasdaq also moving ever so

slightly. i always thought the yellen fed had a way of not making waves in the market. despite the fact that apple had a giant leap .oday that is one stock to keep an i on. falling bank is concerns about whether the turnaround will deliver. they are still weathering cost but can they, generate enough income from their investment banking business to turn the ship around. board.lower across the they have whipsawed a little bit in the immediate aftermath. the grind lower continues. the yen is selling off. >> everyone's looking ahead to big central-bank meeting

friday. the boj is up next. , the economy grew faster than expected before the brexit made an impact on the real economy. economists are looking for gdp to fall this quarter and next. let's talk about oil. joe: it's starting to tumble. it was below $42 at one point today. ,t has been trailing off inventory piling up. that seems to be the story. they moved in the same direction. the story over the last month has been oil declining and the overall market not caring. shrugging it off perhaps.

>> let's take a deep dive into the bloomberg. rob world interest rate ability, let's see what the market is assigning. the simplest way to do that is to look at what the market sees. meeting, 45.2% chance of a hike. let's see what it was yesterday. at that same meeting, it was slightly higher. it took a little while for the market to interpret this, a slightly dovish interpretation with the decline in hike expectations. >> i want to look at the chinese yuan. copper has been more link to rices inopper p

white. in blue, inverted. they move together clearly. copper as a proxy for growth in china. on, it everything going is remarkable how consistently copper tracks china. credit defaultat swaps as a measure of risk. last year, the spreads were widening on emerging markets. not so this year. this year, the spreads are climbing in the developed world and falling in the emerging markets. that is presumably a bit of a rotation. me struck me as something interesting post-brexit. were talking about

political risk in emerging markets last year, turkey, brazil, malaysia. those have gone on the back burner this year and all the political risk seems to be in the u.s. and europe. >> political risk are driving the spreads wider. joe: it says it all. >> we are waiting on facebook's earnings. theme, we is the should say. -- had a great chart facebook members are out. second-quarter revenue $6.44 billion, beating estimates of just over $6 billion, a vast improvement over what was expected. share $.71. that appears to be a miss. i'm not sure that's the right comparable number to the adjusted earnings per share. , 1.13active users

billion, slightly higher than what analysts were looking for, 1.1 2 billion. the adjusted number for second-quarter eps $.97 was , analysts looking for $.82. in terms of monthly active users, one point seven one billion, the consensus was 1.6 9 billion. monthly active users in the first quarter was 1.6 5 billion, so a sequential gain for facebook. what are you looking at? >> i want to put some of these numbers in. substantial growth year over year in topline numbers, growth and profits. we see a company here making a lot of money, and plowing it back into the business. in mobile ad revenue, 84% of total

advertising revenue. get facebook was trying to its mobile game going, there was criticism it did not have a game plan, and it scaled up very quickly. a lot of people have questions about whether mobile ad revenue can move from one bucket to another. is that still a concern? ,> talking to facebook employs they think of themselves as a mobile first company. they think most of their users will never use a desktop computer. they would use it on the smartphone. facebook onave a work or at home -- >> i must be a dinosaur. i'm on pc. >> what we see from these numbers is they are having great success drawing advertisers to mobile and they are willing to

pay for ads on mobile. these guys are crushing it. >> year over year percentage changes, crushing it, there is no other description. a 63% jump in ad revenue year over year. total revenue of 59%. income from operations up 116%. doing 6.4 billion in revenues, big numbers. joe: the stock is up 8%. it was at a record high going into this earnings report, but you say crushing it, that is the only word that comes into my head right now. that is a big move. >> it is a big move for these guys. these guys don't typically move that much.

the analyst did not change their numbers a lot going into this number. so many companies just barely beat. numbersyst brought the up at the end of last quarter and cap them where they are. >> mark zuckerberg talks about how they are pleased with the progress and video -- in video. there are no details offered on video or instagram. muchou measure how facebook can monetize off the video? >> the only numbers you can get is looking at the revenue per ad and recognize that more of the ads are mobile and video. we don't have hard numbers on that right here. to revealdon't like what their ad rates are. we can calculate revenue per and strip out the 4% of

their business that is data. >> remember mark zuckerberg said we are not doing mobile, and they had attended. they managed to go from nowhere to killing it in mobile in record time. to me, this is somebody that knows how to get into a new space and put their energy behind it. >> this is the leadership from the ceo. he is writing the shareholder letter on his mobile phone. think about the fact that most users are not in the u.s. we see that in these numbers to. they are growing in places where companies are just trying to get their feet wet. joe: we talked about the ratio of daily unique users and monthly unique users, now 60% based on 1.1 3 billion daily users, 1.7 one billion monthly users. to this as a key engagement

measure and it keeps going the right way. >> what that shows you is more people come if you are on facebook, the likelihood is you are on it every day, two thirds now on it every single day. hin and the bloomberg, revenues and fees of declined? what does that encompass? >> a lot of that was people buying extra stuff in zinga. joe: what is something you want to get some detail on? >> more details from a more metrics, but i would love to know about ad rates and how it

differs for mobile and desktop. >> thank you so much. tune in later this hour for sheryl sandberg to it she will speak on the company's earnings. a beat from facebook on the bottom line and topline. democratic heavyweights are addressed the dnc tonight. live from philadelphia, next. this is bloomberg. ♪

>> groupon shares climbing. the company boosted full-year and ebida outlook.

of 24% in after-hours trade. let's get to first word news. tell president obama will the nation why hillary clinton should succeed him. his primetime address in philadelphia will seek to convince skeptical voters, including some democrats that mrs. clinton is trustworthy, prepared, and ready to leave. it is a far cry from eight years ago when their campaigns for the democratic nomination were at times bitter. also scheduled to speak, vice president biden and tim kaine. a warning from fbi director james comey, hundreds of terrorists will seek to infiltrate western europe and the united states to carry out state iss islamic defeated in syria. speaking in new york, the director said he expects an "terrorist diaspora" out of syria and it has emerged in

brussels and paris. he says those attacks will be carried out on a wider scale. in france, one of the islamic state supporters who killed a priest reportedly was on a terror watch list. the associated press says he was forced to wear an electronic tag that let police track his movements. police commander shot and killed the two attackers. prosecutors's have dropped the remaining charges against baltimore police officers in the death of freddie gray, black man critically injured in the back of a police van in april 2015. the decision comes after a judge had already acquitted three of the six officers charged in the case, including the van driver and another officer who was the highest ranking of the group. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. back to you. scarlet: "what'd you miss?"

president obama to headline the dnc lineup tonight, including vice president biden and senator tim kaine of virginia. with the latest headline grabbing comments from donald trump, speakers are sure to make him a target of the conversation. the president the biggest speaker tonight. the first lady gave a very stirring, well received, highly praised beach earlier this week. do we have any idea what the president will focus on? >> absolutely. he will make the case for why he believes that hillary clinton is the best person to carry on his legacy, but this is probably going to be a speech focused more on her than him. implicit in his argument will be that the people in the room and a majority of americans inc. that he has done a good job, so he will make the case that she is the right person to continue his legacy.

this does bring his story. go. it was a years ago that the clintons put aside their egos and disappointment and got behind him to help make him president, and tonight, president obama joining his wife's comments from the other night will begin to actively make the case for nominee hillary clinton to be the next president. >> i don't know whether this was a plan to talk about donald trump on the floor today. that trump'sitable comments about russia hacking the e-mails will be on the agenda here. is that your expectation? there will be more of an attack tone? when you look at the speakers list, some with military-national security the lated, it will be night phone call kind of night. trumps impaired his make it.

talking about how this is national security, beyond the realm of politics. the question for president obama is how will he balance his original plan to make an affirmative case for hillary clinton versus his desire to swat away donald trump. inserttrump wants to himself in the conversation and make it about himself. obama democrats need to balance her much they want to address them versus how much they want to ignore him tonight. to wait closers to the general direction and trot donald trump's remarks out later on. talkingyou think is the point is that folks like obama want to hit tonight? hit on trump,t to hammer away as soon as possible before the summer is over. in terms of hillary clinton, they want to make the case that

she has the temperament, experience, and that they like her. likability factor has been one of the biggest challenges for her. it is hard for her to talk in rhetoric about why someone a should like her, but they can talk about their own experiences. hoping their own popularity will carry over. president obama has high favorability ratings among democrats and some of the swing voters in hillary clinton is hoping to persuade. aswill probably not be personal as bill clinton's speech, but he will talk about how their relationship has changed over the last eight years, how he knows are better now, and why she's the right person to carry on his legacy. >> tim kaine has a height likability factor. that is part of the reason why hillary clinton picked him as her running mate. others say it is because of his ability to help govern. what can tim kaine say to move the undecided voter into the hillary clinton camp? >> it will be his introduction

to a lot of voters. there is some thought by the clinton campaign that he can help specifically with catholic voters, people for whom spanish is their first language, and with gun control advocates, but again a lot about it is about personality. we saw him speak in the virginia delegation this morning. he teared up, got very emotional talking about the path ahead, the death of one of his close advisers. he reminded us of joe biden the little bit wearing his heart on his sleeve. joe: thank you very much. next, where can global investors find higher yield? where the opportunities are. this is bloomberg. ♪

joe: "what'd you miss?" bond marketsate have outperform equity markets this year. that may leave a investors wondering if bond still offer value. in anything yield products is the story of the year. are there still opportunities? >> that is a great question. isividuals, institutions, it a question that always comes up, where can i find yield? it is not an easy question. going back to the beginning of the year, we have had a large rally in credit and durations. compared to that time, things are a lot richer. joe: you say it is not yield driving this rally, but duration. what is going on? >> the level of interest rates in general, specifically the

intermediate part of the curve for the long part of the curve, interest rates have fallen so much. if you look at total returns, bond portfolios or bond funds, the ones that have outperformed are driven by durations. if you have held 1-3 your bonds instead of 10 year bonds, you have liked in the market. sayg forward, you can never never, durations can still make an impact, but with rates falling and a flattening curve, the opportunities for return are in fixed income are less now. people have to go off the beaten path a little. joe: what are some of the aries people are not thinking about? areas people are not thinking about? somethingthink about like legacy nonagency mortgages, mortgages originated before the crisis that are still around

that have not defaulted. you can buy them under par and you have the tailwind hopefully of a consumer in proving their balance sheet and a critical but he that has tailwinds behind it and not potential credit concerns ahead of it. joe: another area with growing interest is reits. take a look at the vanguard re-indexing where they are getting their own category, are there opportunities there? >> i think there were. it has been such a gigantic rally. the way people are looking at this is that they are saying they have to pay out income, a i will look atd, it as an underlying fixed income instrument. malls, office properties, other that of retails, mortgages

by mortgages, repo the bonds, buy more, and leverage up to earn a spread. on: i want to get your take banks, some high dividend payers, some others net interest margins. on any part of the capital structures with bangs, do you see any opportunity? >> i'm not very optimistic on bank equity. the debt in financials has lagged, so there's a lot of .alue in investing grade one other area is in the preferred space. as long as you are comfortable that long-term rates will stay where they are at, you can earn pretty good spreads right now. joe: thank you very much. >> coming up, what to expect from the bank of japan on friday. we have a preview, next. this is bloomberg. ♪

e

the first word news. donald trump says he has "never met russian president vladimir putin." he was not convinced that russia was responsible for the democratic national committee hack. in unusual appeal from a major party's presidential nominee, mr. trump called on russia to hack into clinton's e-mails. >> russia, if you are listening, i hope you are able to find the 30,000 e-mails that are missing. i think he will probably be rewarded mightily by our press. >> mrs. clinton's advisers said

mr. trump's remarks were unprecedented and had "gone from being a matter of curiosity and a matter of politics to being a matter of national security." the daughter of president ronald reagan is criticizing a judge's decision to grant freedom to john dingell e junior, the man who shot the president and three others 35 years ago. patty davis says she will "forever be haunted by the day her father nearly died and that her "heart" is sickened by the decision." willhe is released, he live with his mother in williamsburg, virginia. british lawmakers are warning the brexit vote could lead to a spike in immigration. that is from a report by a house of commons panel that says previous attempts to tighten immigration rules have but to a surgeon immigrants. the u.k. vote to be the european union has raised the prospects

of limits on eu nationals wanting to move there. apan's prime minister plans $265 billion stimulus program to prop up the economy. it is unclear how much of the package will be new spending. the ruling coalition won a big victory and upper house elections earlier this month. hisr that, he ordered government to come up with the stimulus plan. this is bloomberg. ♪ global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. i am mark crumpton. back to you. scarlet: a recap of today's action. , littlending mixed changed. treasuries rose, the dollar fail. holding to their intention to tighten rates gradually. after-hours trade of facebook, beating on the top and bottom line, monthly active users, daily active users, all topping. percent. up 6.5

sheryl sandberg saying the company is not focused on hatsapp andwatts ap messenger yet. we will get details later on. jumping off ack smaller base, 24% increase. only are they beating a smaller than expected loss per share, revenue beating. the big news for this one is projectiondida -- edida projections. >> a sizable gain. "what'd you miss?" waiting for key central bank meetings this week and next, specifically boj are friday and the boe next thursday. boe expected to cut interest

rates to cope with brexit. here with inside is the vice chairman of global fixed income and economic research for credit suisse. i want to get your thoughts on the fed. what did they communicate and adding the line that near-term risks to the outlook had diminished. >> that is one of the convenient things, the way you print out the statements, you highlight what the change has been. i suppose that is a reference to --xit, which was a learning looming event the last time we met, came and went. risk has not materialized yet. i suspect there will be more of that story down the road, but so far, so good. joe: let's turn to the boj. the markets seem to agree that this is really the story.

i have a chart of one week implied dollar-yen volatility, the highest level since 2008. one of my colleagues joked that if the boj does anything short of curing cancer that people might be disappointed. what is it about this meeting that has caused people to focus on it so much? >> part of it is that the government has sent signals through his announcements about fiscal efforts that suggest that we are at the threshold at least of seeing more coordinated fiscal and monetary policy. a lot of economists and central bankers have been of the view that monetary policy has done most, if not all, what it can. it needs fiscal effort to go with it. >> the boj getting more creative because it's options are more limited. saying we are in uncharted territory.

we know there are market distortions and do not know what the outcome will bp. japan has a long history with failed experiments on monetary policy. how worried are you when they buy etf's and other instruments? >> japan is in a different circumstance than the u.s.. japan is a high savings country. the distortions manifest themselves in different ways than how we would see them. i'm not certain it is as distorted as it might seem at first blush. when they went to negative rates bondfirst thought was does math still work with negative rates. it turns out it does, which is remarkable. supposing the boj announced that they have an inflation target of 3% or 4%, but they have not been able to hit 2%. aey have already bought

significant fraction of all the government that, so the notion of helicopter money does not mean much. is there really an expectation that the boj will someday insist that the treasury pay it back? this is helicopter money in everything but name. i think it's not very helpful. if they go into a deeper effort to buy private issued securities , then you get into the issue of what part of the government is supposed to influence the allocation of capital? which we traditionally don't think of as the central bank, but rather a legislative or executive branch function. i think that has to be the next big step for all of them. >> you could argue that the japanese president has a greater mandate after the july 10 election. theyere a limit to what

can do to achieve their targets. is there -- are there limits? much japan's case, not so on the cyclical horizon, but how they fixed the long-term problem. the long-term problem in japan thatat fertility is so low the population of japan is smaller this year than it was , and we have every reason to expect there will be small next year and so on. throughy like that will the loss of demographics age. what kind of dynamism do you get from that question to me, the is toolution for japan re-create an environment in which the young men and women decide that having the next generation of young men and young women is a desirable activity. i imagine that is a little

bit outside the purview of the boj. >> it is. pro-natalhave tried policies. you can give tax breaks to people with larger families. give all sorts of incentives. sometimes they work, sometimes they don't. raising the wages of younger workers i think is in a sense the most direct and effective way to do this. you encourage family formation when people say, i am making good money. i'm making a good living. let's start a family and get together here. said helicopter money is a distracting term. no one expects the boj to force the government to pay it back. bloomberg news wrote a column this week saying one thing -- one thing the boj could do would

be to explicate that they would never unwind the balance sheet. if i read it, i would say why didn't you tell me something i did not know and believe. we have never in modern times been able to run a large mortgage market in the u.s. without the government in some form owning a lot of the mortgage. that was fannie mae and freddie mac. now they keep saying we will eventually think about unwinding this, but i am not so sure. that prepayment option is the sort of thing that gave rise to the need for the government's involvement in the first place. more broadly, do we think any of exit fromal banks can these policies until these economies are functioning way better than they have been doing and way better than is reasonable to expect over the next couple of visible horizons

anyway. joe: fascinating conversation, thank you very much. >> coming up, we will hear from sheryl sandberg on that company's earnings. this is bloomberg. ♪

scarlet: it is time for the bloomberg business flash. soaring, aroup on second-quarter loss, but boosting outlook. to $3.1 billion estimated. go pro reporting second-quarter earnings that beat estimates. the company got a boost from

renewed demand for its small cameras ahead of a new model later this year. adjusted lost 52 since a share, seven cents better than projections. it maintains its full revenue forecast. rise, of facebook on the second-quarter revenue topping estimates, lifted by sales of video and instagram ads. than climbed 59% to more $6.4 billion. $.97 a share, better than consensus estimates. from 1.6 5 users billion in the previous quarter. that is the bloomberg business flash. just gottenng has off the phone with sheryl sandberg. she joins us now from san francisco with the details. a strong quarter from facebook across the board. was success across all

verticals, all regions that drove this. we talked about the topic of facebook live, given the early momentum we are seeing there, what are the monetization opportunities? is anotheris opportunity to increase engagement over all across facebook live can drive over all advertising revenue. take a listen to what she had to say. isthe explosion of video great for consumers and great for our business. if you think about all the new formats, live, but also recorded video. all of these formats are engaging and think they are concluding to our metric. facebook live is driving what they believe is time spent. i did ask about instagram.

they are not breaking out revenue for instagram yet. instagramt estimates contributed $550 million of revenue. he said they continued to be excited about the possibilities on instagram, and that it is driving meaningful revenue. she did hand at monetization opportunities for whatsapp and messenger and talked about the amount of messages they are seeing shared between businesses and consumers organically. they are focused on building out that consumer experience. they know the opportunities there are so huge. what's at could contribute $10 billion to facebook revenue by 2020. take a listen to what sheryl sandberg had to say about the early stages of opportunities around messaging. earlyare doing fairly testing to see how we can

monetize and drive those engagements between businesses and consumers, but right now it is the organic activity we are looking for. we ask for more color on what kind of life content they are looking for. mediaok is paying companies and public figures to post life content on facebook. we also know there is a plan to allow some of these content creators to have a part of the cut of the revenue, but in particular, are they going to be looking at content deals like games,, to stream nfl the republican and democratic national conventions, take a listen to what she had to say. >> we are in the early stages of working with publishers and content producers to create content for our platform. interested inre short-term content because it fits with the way people are using facebook now. we are not pursuing those longer deals. we want not see those

twitter-like deals with facebook anytime soon. we will be covering this and death on "bloomberg west." months,the last several there has been more and more talk about facebook and predators, snapchat, all the time spent on pokemon go and that taking attention away from the company. are they anxious at all about these rising competitors for from time and attention? >> whenever we have asked about competition, they don't seem that worried about it. analysts we have spoken to have said that whatever engagement snapchat is seeing is meaningfully away from what you are seeing on facebook. if you look across all these metrics, revenue, profit, monthly or daily active users or mobile monthly users or global daily users, facebook continues thenock everyone out of

park quarter after quarter. i believe that in every single quarter since the quarter they went public in may 2012, they have beaten estimates. they continue to show great have a lot of potential revenue opportunities between the messenger app, instagram, and oculus. facebook is in their really good spot right now. joe: emily chang, fantastic stuff. >> the yen falling by the most in two weeks after the japanese prime minister surprise investors with a fiscal stimulus package exceeding $265 billion. we will discuss common next. this is bloomberg. ♪

scarlet: "what'd you miss?" a busy day for yen traders. plan fiscalent that stimulus will be more than $265 billion. the yen and the climbing in value and japanese stocks gaining on the news, but details limited beyond that first number. that was all left up in the air. way it was presented to the market was strange. this was not an official announcement. it was kind of off-the-cuff. there was a leak about what the stimulus would be, and that was disappointing, so this has been an interesting road to clarity on what japan plans to do. >> here to bring up clarity is bloomberg's betty liu. bunch ofel like a

trial balloons were being released? >> exactly. you are right. it was odd the way he revealed , 900 milestokyo away, and it seemed off-the-cuff. he did not announce the actual number and tell well into his speech. theas discombobulated for markets, which you saw in the yen decline, then shot back up and declined again. it is very clear why he did it. perhaps it was done quicker than he would have liked. the boj is going to begin there to date meeting tonight. a giving out at least headline number, 28 trillion yen, almost near the top of where forecasts were for the stimulus package, it puts it squarely in the boj hands and what they are going to do next. he has the package out of the

way. you don't know the number. we don't know the details, so now it is up to governor kuroda and their team. of: i have a one-month chart dollar-yen. it started to go up right after that election. it gave the government a reinvigorated opportunity to pursue stimulus. we talk about the boj a lot, but how important is the fiscal side, the third arrow, what ever it is, the government's part? this fiscal clear stimulus of addresses the third arrow, which is about labor reform. joe: i may have confuse my arrows. >> there could be a fourth one and fifth one at some point. is make a great point, which that increasingly this is more and more important. well whend not react

they went into negative rates territory, so how much more can markets stomach out of the boj? fiscal stennis package, how much net new money is this really? let mepull one of these, repackage what we are ready and asked and make it sound big and have aly the markets blind eye to all of this. i think that is yet to be seen. there are not any details yet. beingch more new money is pumped into the economy. that is the question. >> do you expect to see a market reaction once we get details both on fiscal and monetary? think so. you have seen the market reaction so far on the fiscal side. we will see how much net new money there really is, but i markets are bracing for a surprise out of the boj, so it is unclear how they will react. >> you go back to that dollar

whatrade as a proxy for japanese fiscal stimulus might look like. joe: we have to run apparently. >> never mind. joe: betty liu, thank you for joining us. on can catch betty liu "daybreak asia." what you need to know to cure up for tomorrow's trading day. that is next. this is bloomberg. ♪

>> don't miss this, german unemployment tomorrow at 3:55 a.m. eastern time u.s.i will be looking at initial jobless claims. >> after the bell, amazon

tomorrow. forhat does it

donald trump asked russia to hack into hillary clinton's e-mails. gentlemen, i can assure you that our grand scale plans will be delivered. ♪ >> happy dems con day three, comrades. convention is bringing out the big guns in philadelphia, bigger than the past two nights.