ons is "bloomberg markets," bloomberg television. ♪ vonnie: we want to take you from new york to london to san francisco and the next hour. into the trading day in new york and u.s. stocks are fluctuating with a flood of earnings reports. little to clarify the strength of the economy. in europe, stocks dropped from a one-month high. democratic national convention in philadelphia, president obama makes his most or so case to hillary clinton's presidential bid. we are offering a blistering critique of her opponent, donald trump. vonnie: facebook shares are rising as the company beat estimates in every metric with sales rising 59% on mobile ad demand. theielet's head straight to

markets desk where julie hyman has been keeping an eye on things. julie: we have a mixed picture once again. this is the 14th straight day we are not see a one percentage point to move on the s&p 500. something tomaybe medical happen by the close. this is the 14th straight session. all the major averages once again are not much changed with the nasdaq doing the best because of facebook. if you look at the two week chart of the s&p 500, you will see here the tight range have had in that terrible of time as it has risen 2/10 of 1%. this is the record we reach last week, and since then, things have been going down. session,ack to today's facebook shares are up by nearly 3.5% and trading at a record.

the company has now reached 1.7 billion active users. some other earnings-related movers include the health care company that makes artificial joints and other types of medical devices. the company raising its 2016 after second quarter numbers beat. l3 raising its forecast. those are some of the gains. on the flipside, ford presenting a drag the s&p 500. after that company said net income fell below what analysts anticipated. they are cautioning that it may seeing a contraction in auto sales.

borgwarner, numbers looking relatively strong. in the bond market, we do have an auction today. a seven day -- a seven-year note. selling in the treasury market, 1.53%. in bond news if you are looking to buy treasury or corporate bonds, apple is trying to tap the bond market. it may sell notes in as many as five parts today and proceeds of the sales will be used for working capital, acquisitions, and debt repayment. mark, interesting if you are looking at extend come, you have mark, youetween -- have a choice. mark: down for the first day come a busy earnings day. companies on the stoxx 600

reports went down by 6/10 of 1%. credit suisse returning to profit last quarter. all of its operating units contributed to profits thanks to job cuts and cost cuts as well. the best surprise according to analysts, was the increase in common equities ratios, which rose 40 basis points to 1120% 40 basis points to 11.8% since march. ubs down by 31%. check out credit suisse, 13% lower this year. let's get to france's biggest bank, posting second-quarter numbers that beat estimates. bank that fared better than many of its peers in europe

in 2016, and took additional steps to raise capital, sparing it from the deep for structuring we have seen from the deutsche banks of this world and barclays. l's finish out with lloyds. it is going to cut above -- it is going to cut 3000 jobs. this is why it has outperformed barclays. the bank says brexit will reduce the amounts it will generate this year and could her future earnings. share said lloyd down 5.2%. let's check in on bloomberg first word news. president obama made his most forceful case for hillary clinton. offered a stirring endorsement last night at the democratic convention in philadelphia. mr. obama: that is why i can say

with confidence there has never been a man or a woman, not me, not bill, nobody more qualified than hillary clinton to serve as president of united states of america. >> clinton joined the president on stage after the speech and the two left to loud applause. french officials have identified a second man who attacked a normandy church, taking hostages, killing a priest. he was a 19-year-old spotted last month in turkey as he supposedly headed to syria, but return to france instead. a warning was sent that he could be planning an attack. saysny chancellor refugee that have committed acts of terrorist mock the country's hospitality. left 13ake of violence people dead this month.

three of the four attacks were committed by refugees seeking asylum. in japan, there are still plenty of questions about prime minister -- about the prime minister's stimulus plan. one fourth includes actual spending, according to a person familiar with the matter. another part will be -- abe has failed to offer a breakdown of the plan. global news 24 hours a day, powered by 2400 journalists, in more than 150 news bureaus across the world. mrs. bloomberg. vonnie: thanks. a big day for the double banking news as a slew of firms least the latest results. 2016 has not been easy for financials. in europe, they have been hit hard. it is no easier for the u.s. retail. joining us to tackle the

questions is alla midnight, chief investment officer of wealth management and regions bank. alan, thank you for joining us. had you compete with the likes of morgan stanley and the brokerages and banks concentrating on wealth management, because it is one of the few areas of profitability? willr real focus is how we deliver the service and ensure we are able to meet the goals for our clients. we think we are able to differentiate because of our location and the team we have in place. and most of all, our ability to deliver goals from a investment perspective. we think it will continue to in the long-term. vonnie: that is one part of the story. the other part of the story keeping shareholders happy. i just want to show our viewers a chart. unfortunately, and difficult

times, and it is difficult for banks, how do you fend off someone trying to acquire regents? >> the key for us is taking what we do best and understanding who our clients are and how we deliver. and in a spread environment with a 10 year bond at 150, it is not an easy task. when you look across our history , we think in our core markets, everywhere from florida to georgia, texas, alabama, tennessee -- it is really the opportunity overtime in those growth areas that will allow us to grow. allen, the likes of morgan stanley, the likes of ubs, they are generating consistent revenue from their wealth management model. how do you compete with the big wall street players in this area? >> again, the opportunity is based on the region we are in and our ability to deliver the

highest quality customer service, and meeting the goals from an asset management perspective. a wealth with assessment and understanding from a financial plant perspective with how we work with our clients. and then delivering investment returns on a risk-adjusted basis overtime. the more you are able to attribute to that in showcase that over, the greater brand awareness you have and the more clients want to business to you, and want to be a part of an organization solely focused on them, and not just taking the lady more assets. mark: let's talk about returns. how are you best at delivering that in this low interest rate environment? >> it is a challenging time. our view has been lower for longer. we think in at these, returns will be at best 7% over the next seven to 10 years in stocks. 3% in bonds. if you look at the historical president, which is 10% equities and 5% for bonds, it is a

challenging environment to deliver or clients -- to deliver for clients. one, investing in large-cap domestic stopped, which italy those with high income particularly those with high income components. companies have high income balance sheet. when you look at that betweential investment-grade corporate bonds in treasuries, you can pick up a guilt without taking on undue risk. that is where we want to be with our clients. we want to make a long-term investment needs. vonnie: do some of the mid regionals go away in the next 12 months? >> great question. there is no need right now in the broader context of the banking universe for that to occur, but as you look at the spread environment we are in and the opportunity set within the various areas, it is going to be

a challenging spread environment for banks. there will be a lot of discussions, but nothing we fear for forecasting in that regard. vonnie: we have a soundbite from bill gross who appears on the show yesterday. janet, get off of this fixation of lower interest rates providing a push for economic ind because the evidence is terms of apple and corporate profit, the evidence is nominal 3.3%, andly grown will growth is below 2%. something must be wrong. vonnie: does an exit 25 basis point increase help? >> is certainly helps, but such a small increase is not going to have a significant impact on major institutions. when you look at the long-term, 1982 10 year bond was at 82%. the reality is a little bit is

not going to make a major impact, but over time, we needed to normalize. we are in a low 2% type of growth for gdp. we do need to see benefit. when you compare it to japan, which has been fighting this battle for -- fighting this battle since 1991, that is not where we want to go. similar to the ecb as well, not a place you want to be continuing to throw money at a problem that does not see success. mark: how worried are your clients about brexit? >> there are certainly great concern and i was flying back from new york the evening of brexit. when i got on the plane, it was a 50/50 shot. when i exited the plane, it was being announced. -- we saw a 3.5% downturn in the market, and we did taste ready -- and we did a

study. the major returns after a major selloff or better on day 3, 6, 12 month basis after a run-up of 3.5%. as much as people want to get involved in the noise and concern, it is a different environment. we still have two years. short-term, aa midterm, and a lg-term option on this. we are of the believe that they will sort through it. we don't see other major countries cueing up in line to join the british. mark: alan mcknight, chief investment officer of wealth management at regions bank. coming up, a look at the stocks moving in the early u.s. session, and eating whole foods. itsfood chain reporting sales. this is "bloomberg." ♪

♪ london and new york, i'm mark barton. vonnie: and i'm funny quinn. you are watching "bloomberg markets." it is time for our latest business flash. jobs bys it will cut scaling back. the bank is also ending equities research coverage. bb&t did not disclose the number of job cuts. oracle had an offer to buy netsuite. software,ich sells has been trying to shift more sales to cloud-based products.

a fast food chain says it will add 5000 jobs by the end of next year. $2.6 millioninvest to make respiratory and biologic medicine. they're the biggest, british drugmaker. let's head to the markets desk were julie hyman has the latest. julie: i am looking at a lot of mood-related movers. with chipotle. -- we willy 2.6% start with whole foods. they fell by 2.6%. speaking of more competition, we are watching kroger.

not moving on earnings, rather it is a downgrade. walmart's testy a price reduction has spread to additional markets, and that the pressure kroger. though shares down by 2.4%. me a significant gains to point out in food. grub hub up 23%. that is the rest of the gain in two years. the company raising its 2016 revenue above forecasts, after second quarter sales. hershey coming out with earnings 9%.share a hershey representatives say they will not be commenting further on the offer -- 3:19 in london.

10:19 in new york. next, hillary clinton is center stage after for the obama passes her the baton. we are live as the democratic national can it and gets underway. this is "bloomberg." ♪

♪ mark: you are watching "bloomberg markets." i'm mark barton in london. vonnie: from new york, i'm vonnie quinn. last night, at the democratic national convention, presidential -- president obama implored the nation to a letter in november. obama: democracy is not a spectator scored. democracy is not about, yes we will. it is about, yes we can. and we will carry hillary.

to victory this fall. vonnie: tonight, she takes the stage as a democrat wrap up their convention. margaret joins us from philadelphia, the site of this week's. dnc. is it a unified party? was --thenoser than it was at the beginning of the week. things have changed a medically sense michelle obama spoken president obama spoke. you did see it coming together, but this is hillary clinton's night. she needs to make the case herself. vonnie: what about voters outside of the dnc? message -- will the message get through to them? "itou remember the book

takes a village?" she attempts to reach across the aisle talking to republicans and independents as well and introduced in the lead up by national security and aides and advisers from years past. an effort to get across the idea that she is looking to reach across the aisle and wants to consolidate democrats, and we got to republicans who don't feel comfortable with donald trump. mark: a lot has been said about the real hillary clinton, particularly by her husband, the former president, who will he tried to humanize her. will be seen here the real hillary clinton later? >> this has been one of the dividing questions. you never know which hillary clinton you will see.

often, she is very guarded onstage. every now and then, she will let her hair down and you will get a very humanizing experience, or moments on what she wants to do tonight. this is something she still struggles with. i was going to ask, how much of a bump should hillary get? for donaldee a bump trump of a few points within a couple of days out of the convention. i expect by early next week, we will have a pretty good handle on president obama and the other speakers, and hillary clinton herself are able to get coming out of this convention. she will leave this convention placesdirectly into a and try to make the most of whatever bump she gets paired mark.

the -- howuch about close is the putin/trump bond? [laughter] >> i think the democrats will certainly try to make the case that it is too close. here is part of the problem for hillary clinton -- the e-mail issue does remain a real concern to the extent they could keep the focus on trump and raise those questions. that is what the democrats want to do. mark: margaret, thank you for joining us. you're watching bloomberg television. still ahead, the economy will be a major issue in the presidential campaign. tom keene talks to --

♪ vonnie: live from bloomberg world headquarters from new york and london, i'm vonnie quinn. mark: and i'm mark barton.

let check in with bloomberg first word news. for northng today korea -- from north korea's top diplomat telling the associated press that washington crossed the red line by putting kim jong-il on a list of sanctioned individuals. they said recent u.s. actions have put the situation on the korean mental on a war footing. president tayyip erdogan has stepped up -- july the government dismissed him of 1700 people of the armed forces including generals and admirals. they shut down 31 media organizations. -- ad british prime minister theresa may is looking for allies for her brexit negotiations. she travels to slovakia and poland, both countries are skeptical about aspects of

american/union. president venezuela's march through the streets of caracas demanding the recall process go forward. the pro-government elections board missed its own deadline to certify signatures on a recall petition. the socialist government is trying to hold onto power in the midst of an economic collapse. pope francis tripped and fell during a mass in poland. he braced his fall with his left hand and several priests helped him back to his feet. the pontiff is making his first ever visit to eastern europe with a five day trip to poland for world youth day, a global gathering of young catholics. global news 24 hours a day, powered by 2400 journalists, in more than 150 news bureaus across the world. this is bloomberg. vonnie: thank you. we will return to democrats

helping to make any quality a big issue. advisor -- tom keene is here. good time to speak to him. he is the liberal from gary indiana. unlike other liberals, joe 's -- tz great to speak to you. can hillary clinton craft an economic policy that will be enjoyed by liberals and independents combined? yes, i think she can. our country faces three big issues -- slow growth, growing

inequality and the two together have meant that the vast majority of our citizens have had a stagnant income for a third of a century. 2008, we express a really serious financial crisis. i don't think we really immunized us adequately against another financial crisis. the problem is, first the diagnosis. how did we get here? it has been largely because over the last third of a century, you wrote the rules of the market -- ote the rules of the market economy. increasing inequality was somewhat intentional. what led totood this, we can find recipes, prescriptions, and that is what

she has been doing. that is what i have been talking about. recipes are prescriptions that will simultaneously increase economic growth and reduce inequality. and reduce attentive for instability. that is the agenda where progressives can support in those in the middle can support. your colleague has written a beautiful textbook that includes a lot on the incentives to get policy to work. all of our viewers worldwide and across the station know that washington is broken. there is massive gridlock between any president and the senate, in particular, the house. the secretaryist to develop a cohesive policy that can have a chance of getting through the legislative branches? you have really hit the now on the head. that is going to be part of the big challenge here. formulating policies, what you

need to do is one thing, and that is the kind of thing an academic like me does best. figuring out how you are going to get that through is an even harder challenge. think, these policies, i for which there are broad support. let me give you two examples. we have a decaying infrastructure. everybody knows that. we can borrow at negative real interest rates. when you can borrow and very low interest rates to make investments that are so obviously needed, i think we can .et a broad analysis tom: let me give you one policy instance. apple the other day reported earnings, and they have a cash buildup abroad the size of a third world economy.

you can't tell me that joe staley and elizabeth warren -- joe stiglitz and elizabeth warren cannot develop a policy that we can all agree on to bring that cash home. why can't that happen? if we have enough of a majority of the senate, in the house, we can do it. this is a no-brainer. enough there can be pressure from the american people to get a large fraction of republicans to support it. our current tax system encourages corporations to keep their money abroad, opens up a vast loophole through what is called transfer pricing system, that allows them not only to keep their money abroad, but to effectively escape taxation. not to pay their fair share. here we have the largest corporation, not only in america, but in the world.

bigger than when gm was at its peak. and claiming that most of its profits originate from about a few 100 people working in ireland. is obviouslyt deficient and encourages american firms to keep jobs abroad, is wrong. get a consensus in america to get that changed. tom: you and i have talked one million times whether it is a fanciness of davos, or the grittiness of your work. you and paul samuelson did not grow up on third base. you started in gary, indiana. mr. trump has made an effort to appeal to the rest belt democrats that are upset they did not get their fair share. how does your candidate defend rust belt?inst the

in did she get the vote gary, indiana and outside the suburbs of cincinnati? joe: let's put it in perspective. what happened? we had a massive change in the structure of the demand. and the demand for the good produced in those areas, the demand for the services of the people living in those areas, went down. abouthad been thoughtful what was going on, we would have had policies to create new jobs that would help them go from the old jobs to the new. peopleere too many thinking the market would do it automatically. it did not do it. described where

we are trying to promote growth of the entire economy, where we are trying to have a policy of inclusion, a policy that disrupts inequality, can actually affect the lives of these people. you can reach to all americans. one of the things she has done is to come out against the new tpp. it is symbolic of what is happened in the past. but the democratic platform has gone through it -- tom: joe, you are not going to tell me that joe stiglitz and paul krugman are against free trade? that is one of the common things a post-world war ii economics. how can president clinton, or for that matter, president trump, how can they jumpstart intelligent, fair trade policy? all, someone has to recognize that even if one

strongly believes that these trade agreements are going to lead to more growth, you also have to recognize that there are winners and losers. and that the losers are not going to be automatically compensated by the market. government has to come in. the democrats have been consistent about this and said we need job assistance and you have to help them move from the sectors that are getting weaker to the sectors that are going to get stronger. countries that have managed openness well, like the scandinavian economies, have that kind of assistance program for those who are the losers. this, to me, is a critical part. the interesting thing is the new trade agreements like tpp, don't promote significant amount of growth. they are really corporate deals. the corporate deals increase the deals of big pharma and discourage regulation.

we have to look at these new trade agreements, tpp and a totally different light. they are not about trade and that is the fact. itc did thathat said, there is a little growth. more independent studies said it will actually negative. what all of these studies have made clear, it is not about growth. it is about something else. that is where i would distinguish between the new trade agreements, and some of the older, which are really trying to expand the scope of the market. tom: help me here. i am an undergraduate and honored to be in class with you. we have heard that donald trump's economic policy is not a conservative policy. it is not a policy from another time and place. thejoe stiglitz described economic policy of the opposition as we go to november? joe: no.

there is no policy. there is no consistent framework. say can say -- what one can is it is neither consistent with democratic republican principles. demagoguerymash of and special interests. demagogue,hand, as a he is appealing to policies to close off america, break our trade agreements. the craziest things was a proposal to renegotiate our debts. and effectively say, we are not going to honor our debt in the same way he did not honor his debt. borrowing tens of ,illions of dollars every year and announcing you are not going

to honor your debt is not a good way to lend to you. lend toare going to you, they will demand a high interest rate to compensate them and that will run up our deficit. that is a kind of incoherent policy no responsible person would propose. tom: do you have any one sentence and the speech tonight? when was the last time you spoke to secretary clinton? are you going to review her economic policy? is joe stiglitz and the speech tonight? some of the ideas will be reflected in the speech, but she will be very busy today preparing her speech, engaged in political activities. you know, she has the most comprehensive team looking at policy that i have seen in any candidate in my long life. it is truly impressive.

and so, she does not do policy on the fly. she really thinks about it very carefully. fromhat i will expect today, tonight, will be a reflection of some of that discussion that has gone on for an extended time. i don't know what particular aim she will emphasize. political speech, not an economic speech. the fact that so many of our corporations are focused on the next quarter return. tom: we got to go. joe stiglitz, a liberal from gary, indiana. good luck to your candidate. joe stiglitz is fired up. [laughter] vonnie: thanks, tom. that was a great interview with joe stiglitz. lower.ow, stocks are

straight to facebook because we had a guest with us. investors liking the results. analyst is in chicago one has a hold on the stock. ari, thanks for joining us. the stock is right about with the fair value price is. does that mean the stock is priced to perfection? ar pretty muchi: -- priced toy much perfection. user growth was very impressive. what impressed me most was user engagement, which basically attracts a lot of the advertisers and indicates they could get higher ads and are willing to pay more. at the same time though, the over 60% topline growth and we managementctually

stated the same thing, is celebrateding to be in the second half of this year and next year. they have to basically, no longer increase the ad load. they need to create a balance between content and ads. they are coming across these things. i am confident in management. they will approach these appropriately, but again, it is a strong company generating a lot of cash. but it is priced to perfection in our opinion. vonnie: if they have not started monetizing things like live, what's up, and messenger, what makes you think there will be a chance where they will lose money on not build revenues? confident that topline is going to continue to grow as strong double-digit rates. still -- we have

applied somewhat of a discount to assumptions we have made. if they want to further monetize their messenger, there were questions regarding how the users will react to having chat box or native add some he appear within their conversations with their friends and so forth. those are some of the questions that take more time to be answered. but we have taken those into account. mark: i just want to talk about twitter. i have a lovely chart here that you will not be able to see it. it turns facebook versus twitter. facebook is up 300%. twitter is down by 25%. you got a buy rating on twitter and a hold rating on facebook. many still are asking the question when it comes to twitter, what is twitter? they doubt it direction and its ability to capitalize on new products. iswer me that question, what

twitter and when will the shares rise? >> i apologize, but i will have to correct you on that. we don't have the buy rating on twitter. we think the shares are pretty close to being fairly valued they stunned the risk that we think is involved with that stock. we gave it a very high uncertainty risk. basically, and morningstar terms, it is trading around three star territory, which we think will basically required stock to go down before you can get into twitter. but to answer your question, the main difference between twitter and facebook is that twitter is trying to address a broader audience. at the same time, while facebook is trying to grow its user base, twitter is going with a strategy that, hey, if we bring in additional content, then that will drive growth and the user base.

that will take a little time for twitter. they have signed agreements with --or ships with various content providers. they are making some headway. mark: thank you for joining us today. more "bloomberg markets," ahead. this is "bloomberg."

♪

♪ vonnie: plans for the four seasons feint power lunch. tables -- of its james tommy joins us with more. how much did you buy? >> i did not buy anything, but i

cannot afford to buy anything because is were insane prices. vonnie: give us an example. give us an example of what a chair when four. james: two chairs went for $10,000. for $4000.ys went $450,000 -- for $50,000, you have to add on a buyers premium. agent coffeefor an machine -- for an ancient coffee machine. james: it was unclear and the notes whether the candy machine even worked. it probably did, they were selling it from their kitchen where it was in there -- where it was operational.

but it was decades old at the very least. nobody was buying it because he needed it. mark: how did it indoor personal law, james? -- the farasons at season started in 1959, almost as old as me. why did it last along? james: it was the food, occasionally. but much more important was the space, the pool room, the grill room, these were absolutely gorgeous then use to dine by. kind of quiet, hushed, and had enough space in between tables. it was a really lovely space to meet -- to eat and to meet people. and it was extreme expensive, meaning it was a select group of people. mark: what is the plan next, the next location? james: just a few blocks away, the proprietors are moving, and in the space where the four

seasons has been for the last 57 summers, there will be a new restaurant from the owners. mark: james, thanks a lot. it you can always read about luxury. dining,watches, travel, go on the bloomberg. coming up next hour, it is the "european close." one of the biggest deals in the beverage business. take a look at european equities, we are 34 minutes away from the end of the first day session. stocks are falling. " is next.ean close this is ?c+sv

mark: it is 11:00 in new york, 4:00 in london. a few minutes left in the trading day. you are watching the european close on bloomberg markets.

♪ mark: we are going to take you from new york to london and cover stories out of berlin and detroit in the next hour. here is what we are watching today. governments,tween sabmiller and amb about appears to be on ice for now. will play hardball. and then travel for shell, the biggest company reports a 72% drop in profits, the lowest orderly earnings in 11 years. it gets hit by lower crude prices and weaker refining margins. and the different story in european banks. credit suisse beat estimates with unexpected returns profit. bnc para bob and lloyd's expansion group