david: we are live from bloomberg's world headquarters in new york covering stories out of san francisco, london, and tokyo. the s&p hit a record earlier today but backed off its highs. gdp disappoints. we are looking at markets reacting and the economy. economists some top go off on the latest boj stimulus with a bare minimum. if the central bank is running out of options? acceptinglary clinton her nomination. what she and donald trump are honing in on. but the debates begin. in two minutes. let's go to ramy inocencio. ramy: right now looking at where the markets are, we are heading back to session highs. i have to say volume really has not been all that.

the survivors are seeing less than the 20 day moving average. this is where we stand. the dow is down by a hair. of course, we are seeing some impact from gdp data from the second quarter coming in less than expected. a bit more pressure on the fed. s&p stillsaid, the managed to hit an intraday record high, 27 point 09. in the past month, we are up 5% on the month. we are off by a couple of points with a few hours left in the trading session. this is five months in a row for the s&p. gold is also that, rising, up 1.5%. in terms of looking at what is happening with the gold miners,

those are rising. gold futures are up 1.3%. look at this, there and gold, all of them up percent. new point my main -- new point mining up as well. despite this slight positive in the gold it is still pushing to highs. david: what about stocks that are up on something else? ramy: non-earning. there are stocks moving because of other things in the news. first off, hewlett-packard, and they are seeing a bump of 5%. they are on track for a record close, speaking of news of a potential buyout from pnd firms, kr, and maybe suitors on that list. the deal could be worth over $40 billion. and trinity industries is jumping after a value disclosed at 8.6 percent.

this is the highest since this past january. carol: thank you. let's check in now on the bloomberg first word news. mark crumpton has more. mark: donald trump running mate says the republican presidential campaign might lift its ban on certain media outlets from campaign events. mike pence said they would evaluate its policy and they would be available to the media whether they are fair or unfair. his remarks came after a washington post reporter was searched and ejected from one of the events. hillary clinton and donald trump are in a virtual tie in missouri. one clinton leads mr. trump point in the mason-dixon polling and research survey. that could mean the state, which president obama lost in 2008 and 2012, may be in play. candidatearian party

gary johnson has 9%, green party candidate has 1%. michigan promised six more state employees face criminal charges in connection with the flint water crisis. charges include misconduct in office, willful neglect of duty and various conspiracy accounts. in april, regulators and a city employee were charged with official misconduct, evidence tampering and others. the united nations special envoy for syria is urging russia to leave the creation of any humanitarian corridors around the embattled syrian city of aleppo to the u.n. and its partners. this comes after russia set andes in open to military corridors outside of aleppo and offered a way out for fighters willing to surrender. news 24 hours a day card by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. back to you. vonnie: the bank of japan

announces it is keeping its monetary policy mostly unchanged. they held steady on interest purchase ofd expand etf by the equivalent of $26 billion a year. anlier we spoke with economist about this move. >> is there any hope of getting japan out of its growth and subpart inflation right, it is fiscal stimulus. >> fiscal to monetary. >> not to pretend to have tools that it really doesn't have. >> the next step has to be raising wages in japan and the central bank accommodating and encouraging that. >> we lost count of how many stimulus plans japan has had over the last 15 to 20 years. they really don't do much for the underlying economy. >> you have to keep it up. until the economy crash. how you do that, very difficult.

give your force run as a possible interest. -- firstborn as a possible interest. vonnie: we bring in the global executive director. there is more interest on the airways. etf me does expanding purchases do anything? >> it does not do a lot. we talked about how doing nothing would be a major shock. they did not quite to nothing. they did the bare minimum, and that is a disappointment the express. is this? uncertainty >> we need to look up this country hence of policy review with kuroda. this could be the dark horse in the entire mix. what exactly is this about, and what are we going to emerge from with? will he pause and say let the

government take the running, or will he double down and go for it and get that inflation target as soon as possible, which is a phrase he used today? he did not have to, but it is possible. vonnie: we broke down the cgi for this year, a 10th of 12%. the forecast next year is 1.7%. thehat has been close on basis of this forecast, hitting the target in 2018. this is not where kuroda wanted to be. when it first launched kuroda nymex for want -- kurodanomics for want of a better term, they close.rted to come but then came oil price decline and a bunch of other things. they have been drifting away. it is not deflating anymore, but they are getting further away from the target. so they have sat around the table at the boj and thought,

where are we going here with this? we want to continue pursuing what we are doing? do we continue the framework, or do we just absolutely and completely go for it? more: indicating there is to do, more tools that basel? -- his disposal? >> we are waiting for the policy review before we get to that. people have speculated on a number of things. they could start buying municipal bonds. for could give banks money negative interest rates or say something about their balance sheet and how long they will hold all of the stuff they have acquired. vonnie: again went straight to 102.26. now it is a stronger yen again. do they see themselves in the push? >> that reflected disappointment. we got etf extension with no

small dollar lending program. vonnie: and monetary review. >> thanks, vonnie. expecting additional bond purchases, a further step in the negative territory on the benchmark interest rate. we did not get that. with benackground bernanke and all of this helicopter money, what came out was a far cry from that. vonnie: what are companies in japan doing, thinking? toyota, for example? >> many are making vehicles outside of japan, and they are reselling them into japan. market is a declining market. the demographics are running against them. the population is shrinking. david: let me ask you about data from the u.s.. up 1.2%, seems alarming. >> feels like we need comprehensive gdp. >> forecasts have been coming

down in the list 24 hours, mostly because of wider trade is it. we have so much worse than that. if you are a bull, you can cancel yourself by saying that is in the rearview mirror. yourself --ancel console yourself. inventories were a big part of that. you might have to rebuild in the second half. how much is there? will it take the election to finish before certain and companies do rebuild? >> the numbers have been getting better lately. this is a setback. david: the fed had that same perception. >> and the data proved it. same meeting is

the comprehensive policy review, september 20 to center 21 -- september 21. we will have to see. david: thank you very much. executive editor of global economics hero bloomberg news. vonnie: straight ahead, hillary clinton gets her big acceptance speech in philadelphia. we have reaction to the big night and a look at what is next. ♪

♪ david: this is "bloomberg markets." vonnie: time for the business

flash, looking at the biggest stories in the news right now. , apollo and carlyle group are considering a buyout of hewlett-packard enterprise. that is according to the information. they had talked with representatives of the firms. this deal could be worth more than $40 billion. david: the biggest deal ever involving beer makers is closer to completion. offnbev improves the take for sabmiller. from were complaints sabmiller's biggest shareholders. vonnie: the smallest profit since 1999, when fires have ravaged the oil trans region of western canada as well as aging well. announced a loss. today as much as $3.6 billion for papua new guinea will enter

oil. that is your business flash update. hillary clinton and tim kaine hit the road today, starting a bus trip through two battleground states, pennsylvania and ohio. it is hours after clinton formally accepted her party's nomination for president in philadelphia. hillary clinton: let's be stronger together, i fellow americans. -- my fellow americans. let's look to the future with courage and confidence. vonnie: for more on the speech, i will bring in megan murphy, back in new york after a week in philadelphia and cleveland. what a trip. megan, what does hillary have to do to keep momentum going now? off of lastming night, the biggest night of the convention. it was not the speech of the ages, but it was a good well in written speech. she gathered confidence and steam as he went along. she was specific about targeting

people and what it was about, getting voters in swing states like pennsylvania, ohio, florida , north carolina, this positive vision for america's future on national security, but mostly is the economy. how do i get wages up, boosting job growth, giving your family a secure future, women more flexibility. she is trying to push the needle through with independence, people that don't like either of these candidates. she will try to take the positive message to put on last night and say i am the better choice to lead this nation forward. all week we were talking about the speech and what it might accomplish. i thought going into it, all she had set out to do, the introduction or reintroduction, she had to rebut what donald trump had said. she did a clearly. had to present herself as strong on national security.

it was a lot to fit into a 30 or 45 minute speech. >> it came out at 42. this was not an obama speech. this is a woman who was very clear about who she is, what her strengths are and what she is bring to the table. she is a walking policy per se. -- person. to see personality, they will have to keep looking. you will hear people talk about how they are attending to humanize her. we have to move on. she is who she is. you can tell as many stories about her reading to notdchildren, they are going to have a wholesale reevaluation of what they think about hillary clinton. that is a step too far. there better going forward and saying she is saying, confident waysne, confident, she has she can improve your life. your life as a latino,

mom of-american, the three children, older aging factory worker. that is her game. let's put away this, we'll repeat this stuff. of the comments was the pessimism of the first week versus the optimism of the second week. what does donald trump due to respond to this optimism? >> that is an easy narrative, and is being repeated time and time again. when he gave that speech, when donald trump dave that speech, it sold very well. he got a large response. so quick polls of that speech said people that thought on tv or in the home said it was more optimistic. simplistic. if both campaigns fall into this binary black and white, they will struggle to improve key issues, which is a to get their favorable up. donald trump needs people to vote for him because of his message, so he needs to key into that. so he will basically go back to

the candidate he was. he had one moment of proctor donald, and now she is saying things he is known for. impossible for us as journalists and voters respond to, that is where he got to, that is how he won the primaries, being off the top, speak his mind, can't believe you just said that, whether it is russia acting into e-mails -- that is how he got into this. don't expect hillary change. name-calling, crooked hillary, store corrupt tim kaine. he will talk about that. david: in trump fashion. we are looking at september, the first debate. what happens between now and then? >> the campaign will slow down. people will watch the olympics. these campaigns will keep out. donald trump was clear about saying -- she is giving her big

speech. i am campaigning. this is unusual. the polls will be tight. she will get a convincing balance. it was -- they had hollywood, katy perry, fans, emotional moments. it was an amazing convention. the polls will tighten. it will stay close. ,e will get to this debate which will be a debate for the ages watched by more people than ever. we will see what takes place, played her strengths or whether he can come back. vonnie: looks like the trump campaign is discussing a media access ban. >> i hope we keep our access. david: get some rest this weekend. washington bureau chief for bloomberg. still ahead, a group of trump executives in cuba. the embargo is in place. ♪

vonnie: this is "bloomberg markets." david: the u.s. may be easing restrictions on travel to cuba, but executives from trump organization may have been impatient and went before it was legal. we ask if they violated the cuban embargo. the reporter who wrote that joins us now. a bit of background, what has donald trump said about his desire to open up business in cuba? >> he was asked a few times about this.

he has basically said he's interested in doing stuff down there, but not yet. in his telling, he would have to take a minority interest to comply with cuban law, and he is not interested in doing that. vonnie: talk about what you can do down there, $78 for a round of golf? >> until january of 2015, if you wantedu.s. business and to go look into perspective investment, you were out of luck with a few inspections -- expections of medical supplies or food. it was difficult to do business in cuba. that changed quite a bit in january 2015 when the obama treasurer department loosened up regulations. now american citizens can go down there to do research and look into perspective opportunities. they still need a license to actually consummate a deal, but they can prospect businesses. there are for businesses. a few big problems

with the way the trump organization has approached this. they had thing is representatives going down there for several years prior to the obama administration losing regulations. it appears people traveled into the environmental nonprofits. that havere issues been acquired in 2015. the tribes since then have been -- trips since then have been problematic because they were interested in golf development. the big issue with that is it is promoting tourism, and that is against the law. there is nothing the obama administration can do about that without an act of congress. david: what are the consequences? executives have been photographed down there. what can they face as a result? >> it is unclear. halliburton agreed to pay a fine a few months ago. but otherwise i can't really speculate. vonnie: what may change if trump

is elected with u.s.-cuba relations? >> have to ask him. vonnie: we will come to our own conclusion. vonnie:you can read his story in the latest bloomberg businessweek and hear more from the reporters on the most talked about stories every saturday and sunday on bloomberg television. rebounding from the precipice of a bear market. commodities up. ♪

>> oil had been on track for a bear market>>. we have seen the dollar fall. nymex crude has been rising. -- it is stillup up i about 1%. now above $41 a barrel. as low as 40 bucks, $.50. if this closes up it will be breaking the sixth day of a losing streak. over the past 30 days it is a different story, down by 17% here. the biggest monthly fall since this time last year, since july 2015. that is when oil fell by about 21% in that period.

let's take a look at what has been happening with the oil majors. a couple winds pushing the stock here. you can see it's at about session highs earlier today it was pretty much opening at session lows right here and that's because it had been saying it missed profits as well as production estimates, assisting third straight quarterly loss. let's look at what is happening with exxon. exxon at its lowest share price in a month, still in the negative, down by 1.7%. second-quarter profit came in at $7 billion. that was its worst profit since the first quarter of 1999. refining margins also fell by 30% in that period. let's look at what's happening in terms of the active. -- -- active rig count. in the past five weeks it has wen rising every single week

saw a rise of just three rigs in the past week but still rising for the -- for the past five weeks. now we are at active rigs at the 374 mark. over that time period, a rise of 44 rigs. >> thanks for that update. turning to financials, ubs a busy week for european banks earnings. quarter profits slipped 14% as well as wealth management and investment banking, generated less revenue. earlier today the ubs ceo spoke with bloomberg about the challenges that lie ahead for his bank. is very little visibility about the near future . geopolitical by client risk aversion.

we can measure it in terms of cash holdings, the average cash holdings of our clients outside in the. is 28% rate u.s., declared cash holdings is highest%, which is the level we have been seeing for a while. it is a challenging environment. >> what is holding declines back? when you talk to the client advisors and head of wealth management, what is really holding them back? >> you just say that in your question. all these issues are holding back investors. our job is to stay close and try to find the right risk profile and risk return for those clients. many of them was to be extremely conservative and not re-pursuing a strategy of wishing clients to take on risk they don't want to take. >> talk to me about the

investment bank. how did that perform versus the equity business? >> the equity business clearly had a very tough year on year conversion. last year we had fantastic first half of the year and the second quarter in asia, particularly in china. we were very pleased with our performance in the u.s.. on the other side as a counter effect, we got very solid results in effects for the quarter. good level of activity, but particularly before and after the brexit vote. >> will fx be the driver in the back half? the real driver is back half. in terms ofeased capital deployments and profitability in those areas. >> let's talk about brexit.

do you think there's a possibility or opportunity with brexit? is there an opportunity from brexit? >> there's always opportunities, but we need more clarity about brexitnd of form this vote will take and people will be able to evaluate where there are opportunities. there are also a lot of challenges. not only from the u.k., but the entire european system. >> the key thing for you as head of the bank is transporting rates. is that the only key risk you focus on? >> yes, this is by far. we have high degree of flexibility. we have strong local presences in europe, in frankfurt, in

luxembourg, other cities in europe. we will be able to adopt and redeploy resources should be necessary. the outcome could be that the u.k. retains this access to europe. ubs speaking earlier today on bloomberg. our colleagues in new york caught up with the berkeley ceo, jeff staley. how important passport and rights into the eu. are investment banking franchise across europe is important to us and it's part of our core vision and strategy and we will continue to prosecute that vision and strategy. following the brexit vote we did one of the first euro bond issues was actually for a railroad company in germany. we did the first take ipo coming , privatization in italy. berkeley's presence in europe is

important for berkeley but also for europe. i would add in this exit discussion, as recently as last month we had to completely reengineer the legal constitution of our business in the united states. had to execute our banking business in the u.s.. we're currently in the process of completely reengineering our banking presence in the united kingdom in order -- in order to meet the rules, we have to create an entirely new bank called barclays u.k.. isusting our legal construct something we are getting pretty practiced at. wrecks it will be another issue that requires to adjust how we do our business in europe but i'm very confident, because of the value we bring to europe, that we will find a way to gather with the british government so barclays can remain an important presence across europe. >> certainly a business dealing

with a lot of changes at the moment. let's talk about the interest rate environment. what kind of headache is that giving you? are you going to have to close branches as a result of this? >> let's see what happens. would interpret comments made by governor carney. i think the central banks around the world are beginning to question the trade-off of 0 to n egative interest rates in terms of generating economic growth versus the dangers it poses for the financial system. we have 50 basis points, base rates. we have a long way to go. let's see how the bank of england reacts to what's coming in the economic numbers down the road. right now we have a great margin, 350 basis points. we will be fine if there is an

initial pullback. obviously negative interest rates are a major challenge to the financial system. in the u.k. in particular we are a long way away from that. , thether thing i would add united states is still the largest economy in the world. the economy appears to be accelerated. there the conversations, will be fed raise rates this year. don't underestimate the impact of rates rising in the u.s. versus what we are seeing in places like japan and continental europe. would you prefer if the bank of england did not cut rates next week? going to comment on what the policy of the bank of england should be. i think they have done a very good job of trying to ensure the that they stay a safe, liquid functioning financial system in the u.k..

a bank like barclays, rather than being part of the crisis in 2008, now we are seeing it as a place of stability. we are open for business. we want to work in cooperation with the bank of england to minimize the economic impact of wrecks it and be on the side of our customers and clients in great britain. >> it seems american investment banks are doing well at a time that european investment banks are not doing so well. how does that look to you at barclays? analysts toall the look at our second quarter. our corporate and investment rank in the second quarter return ona 9.5% tangible equity. that is one of the strongest in the investment banking industry, whether you are in new york or london. i like the performance of our corporate investment bank in the second quarter. i think the investment bank is a critical part of our vision and

strategy and i think we performed well in the last three months. >> jeff staley, ceo of our police speaking on bloomberg. >> mark crumpton has more from the newsroom. mark: hours after hillary clinton formally accepted the democratic residential nomination, she and tim kaine are on the campaign trail. they spoke at the first campaign rally at temple university in philadelphia before beginning a bus trip through the battleground states of pennsylvania and ohio. mrs. clinton took another shot at donald trump. mrs. clinton: i find it highly amusing that donald trump about make america great again. he doesn't make a thing in america except bankruptcy. mr. trump earlier responded to mrs. clinton's speech last night at the democratic national convention. in a series of tweets he attacked her for being soft on terror and refusing to say the words "radical islam." if integral -- a federal appeals

court ruled that an id law was enacted quote, with discriminatory intent. the 2013 rewrite of voting laws required photona identification to cast in person ballots. today's opinion reverses a lower court's ruling. in minnesota, a special prosecutor is joining the legal team, investigating the fatal shooting of a black motorist by a police officer during a traffic stop. they will decide if the officer will face charges in the death of philando castile. the immediate aftermath of castile's death was streamed live on facebook, sparking outrage. syriarnity hospital in has been bombed with two people reportedly killed. the syrian observatory for human airstrikes hit a hospital as well as a center for first responders in a rural village. in 2014 andpened

has an on-call pediatrician and six incubators for premature babies. turkey is escalating its crackdown following that attempted to earlier this month. president or the ones government -- erdogan's government has canceled 50,000 passports. 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. back to you. david: coming up, and harvard recapture its investment magic? the university's latest endowment shakeup, next. ♪

vonnie: this is "bloomberg markets." david: the investing chief of harvard's $37.6 billion endowment eight months ago resigned this week. the departure the latest setback. is our us from boston reporter. i want to pull up something on the terminal. this is the endowment function on the terminal. you see the list of the largest endowments. harvard remains at the top of that. 36.4 billion dollars. if i narrowed that down by ivy league and look at the one-year return, is the performance much more poorly than it has for some time to read -- time. this is an endowment that has such a storied history. for such a long time, jack meyer ran for a decade trade what has strange -- what has changed as far as his strategy?

>> here we are, it's 18 months into the tenure of the new ceo brought in to reinvigorate his fund to turn things around. he resigned this week. may,nt on medical leave in resigned this week for personal reasons. my colleague and i pull back the cover and show it was a difficult year for them, they had launched a new strategy, try to create what essentially was a hedge fund within the endowment to trade stocks. the volatility in the markets, something went awry with that. here we are with this mess. vonnie: is it partially to do with trying to re-create past glories? david swenson at yeah and outperform or. his harvard trying too much to repeat the glories of the past? >> they want to be able to match the -- their rivals.

they have been trailing gail, trailing princeton, trailing the now, top schools for years essentially since jack meyer left. they've never really been able to recapture the magic and this was part of that long-term strategy to try to reinvigorate the trading environment within harvard, to try to rejuvenate the returns and to get back and be able to at least match the returns at yale and other schools. those returns,at harvard second lowest only to cornell. my alma mater -- it's ok. vonnie: those returns are not terrible. even if you take cornell, you're still looking at potential return there. many managers said they would give one of their arms for that kind of returns in this environment. >> really this is an arms race. the schools are competing to be the top schools in the world and

if you are trailing by 300 to 50 0 basis points your chief rivals, talking about the power of compound interest, we are talking about billions of dollars and forgone returns. it makes it so much harder for them to compete. harvard is by far the leader when it comes to the size of the endowment. over time if you look at it, gail and these others are slowly -- yale and these others are slowly making up a bit of ground. we are doing a better job investing these funds. david: stephen blithe is out. is the company saying that is the reason why he's exiting? now that he's gone, who will replace him? he left for personal reasons and they won't say why he went on medical leave and what the personal reasons were. that is one of the mysteries. thishey pulled the plug on internal hedge fund, we don't know why they pulled the plug.

know what exactly happened there and in terms of replacing stephen, they say they will fill the chair by september. that's not a lot of time. vonnie: mike mcdonald of bloomberg news, thank you. great story. david: coming up, the irs takes facebook to court. ♪

david: this is "bloomberg markets." i'm david gura. vonnie: i'm vonnie quinn. facebook says it may have to pay $5 billion to the irs. joining us now from san francisco with more is our reporter. what is the tax notice over? in 2010 facebook decided to

move its global operations to dublin, ireland. that is everything that doesn't include the u.s. and canada. transfer,valued the they added -- to help them set the price. irs hadears later the taken notice and said the valuation was too low, off by a few billion dollars. this is what we think the valuation is and the total tax liability. david: what are the next steps here? i understand facebook has been called to the tax court. what is the company's next move? >> they have a few options and they said they will challenge the notice. and go to federal tax court say, we have our experts. they told us this is our valuation and the irs will probably come up with their own experts, which is the price tag we believe you should be paying and probably they will end up

settling between $3 billion and $5 billion. it depends on what the irs comes back with and how much they are willing to play on an issue that has become a much broader theme than just facebook and the tax liability. vonnie: i want to read a comment that facebook made on the defensive tax liability in a filing thursday. the assessed tax, interest, penalties, if any could have an adverse impact on our operation and cash flows. it's a hefty chunk of money, even for facebook. is.t $5 billion is nothing to sneeze at trade there are other companies that have faced similar tax liabilities. they are fighting hard. over the last two months the irs has summoned them to court and said, give us your book and tell us how you have got to this number which you paid to

transfer your assets to dublin. facebook has declined. they are going to fight this tooth and nail. $5 billion is not a small sum. david: you mentioned ernst & young who worked with facebook on this deal. does that firm stand any culpability here? >> it doesn't seem so. they had been mentioned aside from being a firm that set the pricing. this is not an issue of anyone's wrongdoing, it seems. it's more an issue of who do you want to believe. it is somewhat subjective. accessrd to say how much could be valued, especially when they are sort of intangible. air. sort of up in the vonnie: has anyone done the math on what facebook has saved by had quartering in ireland? >> it's a good question. i was speaking with a tax lawyer who said if $3 billion to $5

billion is what the irs says is tax liability, total valuation may have been north of $9 billion to $14 billion. vonnie: perhaps worth it to stay there. david: thank you very much. catch more on all things tech ater on "bloomberg west," six a car p.m. eastern time, six a clockcific -- eastern time, 3:00 p.m. pacific. the s&p poised for gains for the month. we will ask the chief investment strategist in boston. he will join us in the next hour. ♪

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

we are live at bloomberg world headquarters in new york. over the next hour, stories out of dallas, london, and beijing. the s&p 500 hit an all-time high. markets are poised before the close. what is driving them higher? the best earning season since 2008 read amazon on pace to close at an all-time high. chief: cities global economist and what he has to say about the state of the u.s. economy. david: let's head to the markets desk, where ramy inocencio is standing by. amy: pushing the markets up little bit higher. it has been pretty volatile and still trading in a fairly