noon in new york, and midnight in hong kong. >> welcome to bloomberg markets. ♪ >> from bloomberg world headquarters in new york, good afternoon. we are covering stories from san francisco and new york to beijing this hour. here's what we're watching. fluctuation your all-time highs today include a selloff after its worst month and a year as investors digest corporate earnings. >> in today's deals republican elon musk's buyout of his company solar city. mergerk to mark on this monday. >> uber sells out in china,

they're merging the china operations with its biggest local competitor. we look at how this move could bring over closer to an pio. ♪ -- an ipo. >> lets it over to the market desk. we are holding it is record going the earnings driven on a little bit it just like. >> it is slowing down. a memosto this is analysts, goldman sachs today downgrading u.s. stocks to an underweight, it is a tactical call here. not necessarily a long-term but a tactical shorter-term call looking at what we have seen in earnings and valuations. detach a record before pulling back. we are seeing a lot of movement here. we're this long streak of the s&p 500 not moving more than 1% up or down by the close most of

the nasdaq is gaining more ground today. if you look at the groups on the move, on the bloomberg you can look at the imap, it is a tug of war. energy shares are down, on the upside it is tech and health care both are gaining. that is one of the recent the nasdaq is outperforming today. some of those involved are on the move. those companies are privately traded. we can talk to more about that later. shares are higher if you look at the biotech industry. by biogenic one of its partners, that is when it announced a drug to treat it in the muscle disorder met its main goal. the pharmaceuticals, you can see analyst at this

drug could reach an estimated $1 billion in sales. >> that rising biotech is offsetting lower oil. way to somethat extent. energy prices are falling. is offsetting the s&p 500. crude oil heading lower again today. it is approaching $40 a barrel now. if you look at short interest, these are the oil prices. is the biggest and we have seen on a weekly basis. definitely the bearishness continues in terms of the sentiment on the oil prices. , she'll doery much that without mystery stock of the day. >> let's check in with the bloomberg first world news. mark has more from our newsroom. ofk: democratic president nominee hillary clinton will

appear with another billionaire , she will today campaign in omaha, nebraska with warren buffett. over the weekend, she was in pennsylvania by billionaire mark cuban. arizona senator john mccain's joining a growing chorus of voices criticizing donald trump. for's comments about the appearance of a muslim army captain killed in a rock. he cannot emphasize how deeply he disagrees trump's sentiments. while our party has bestowed upon him the nomination, it is not accompanied by unfettered license to defame those were the best among us. said the today, he soldiers families, it is about in his words radical islamic terrorism and the u.s.. we're learning more details about the pilot of the hot air balloon that crashed in texas

killing 16 people. the pilot identified by friends was arrested in missouri in 2000 for driving while intoxicated. the better business bureau warned consumers about doing business with the balloon touring company he used to operate in that state first of them are no survivors in the texas accident. newisraeli army has a security threat, pokemon go. there have been security concerns. soldiers and officers were warned that the game activate cell phone cameras and locations could lead to leaking of sensitive information. global news 24 hours of a powered by the 400 journalists in 150 countries. this is bloomberg. it is time now for the bloomberg markets deals report every monday we zone in on the

m&a business with analysis. today, we're talking first about tesla's plan to buy solar city. is bloomberg's m&a reporter. when the first it was first proposed six weeks ago, there was some pushback from shareholders. and has been revised a little bit this time around. what kind of pushback specifically did elon musk and get? this the main problem with was pushback in essence from both shareholders of both companies. back, the clock six weeks tesla put out an offer to buy solar city. both of these companies are controlled by elon musk. today, the company's reach a 0 a share.25.3 it was proposed under the guise of here is an offer to solar city, now you guys decide if this is a fair price.

which atwo companies deal lower than the offer price. so, i am using a cynical view of this. let's think about that, the solar city board decided that the price was too high? that couldn't be it. the pushback from shareholders lowered the bid. that is what the new agreement came in lower. but if theoretically the solar city board decided that even this lower price was still acceptable, that is wise in the solar city shares down 5% or 6% today. they are disappointed with this priceless of the tesla shareholders view this the entire time as a bailout to solar city. probably disappointed in a deal is happening at all. that said, i think this deal may go through. shareholders may accept it tesla shareholders will probably see this as a bet on elon musk. shareholder tesla

to begin with that is probably your main thesis. scarlet: that is your guy. >> this company could be a major player in the future. not necessarily right now. on the other side, if you think solar city is a struggling company maybe 25 of 37 a share is better than any offer you going to get. that is what we will find out in the next 30 days. also wiffs of conflict of interest. alex: cynically speaking coming to take you on buying out his cousin. with elon musk on the board of both companies you do question just how independent is everyone involved in the decision-making here? point, if youur look at each for security ownership, elon musk is the biggest shareholder of solar with a standing stake. he is thek at tesla,

chairman of the board of solar city. people they have recused themselves from this completely, right? alex: correct. this was all done among people that you can tell the optics of something like this really looks a little iffy when you offer a and than the price and the being lower. all of a sudden you to realize that it looks like the tesla shareholders decided on this not the theoretical solar city independent company that was supposed to decide whether this range was ok. becomeue is that it can a full scale fourth of the ideas that want elon musk wants tesla end maker ofto clean technology for some you bring in the batteries and oversight you can do different things and have synergies thereby making new cars.

from the solicitor standpoint their business has been struggling and they were relying on the rental of solar panels. certainly, you can change that solar city business and they become a part of a larger and two and cleanup of stop>> the government vertical integration. stick around, more deals report is coming up because we talking the what is next for gawker. he is worthy bankers who is advising that company. ♪

>> we're back with a deals

report. mark is here, the cohead of technology media and telecommunications group. mark, thanks for joining us here. anyone who has been following the gawker sale process probably knows that you were involved at this point. you are gawker's banker on this deal. gawker has been on the news a lot went to the hulk hogan lawsuit now to the bankruptcy/sales. givers the latest on where exactly the sales profit is? i know final bids are due august 15, correct? >> it has been a long, interesting process for stop at the end of the day, the company is being treated as it should be in terms of the buyers we're looking at. it is a good business. the interesting part of the process has been people have gone past what they read or heard. profitablequality,

company which there aren't many on the internet now. i think gawker is being recognized for that appropriately so. >> how many interested parties at this point? >> between a dozen and two dozen. >> final bids due the 15th. what has your role in this been and continues to be? >> cleared -- we have done everything for managing the sale process, in this case most important identifying the right buyer set for the company and introducing the business if they don't know it already, going to diligence process setting a management meetings, doing some negotiations which we did initially. that was the most important piece to start the process. on the death the auction will manage it that day. >> is there a role for the founder of the gawker? time, it is his

vision, his voice but his editorial decision that led to gawker's legal problems. >> anyone buying this business should take his role seriously. they may not ultimately keep him but he is a quality person, first of all. he is a journalist at heart, a true journalist must've even what happened with hulk hogan was a byproduct of him learning to do his craft on the internet. understanding to communicate information to people and an effective way is really important for stub i think some of the buyers will think of him as a critical component, some won't. nick has other companies in mind. he will be ok. forhis was a big -- bid $90 million. ice assume this will be one of the players moving forward, explain to us little bit about how the actual day of back of

the process works. it is a bit insane and old-fashioned, no? >> it is almost like horse trading post on we all gather in the conference room of the seller's attorney. they submit bids and over bids. room, and theye have a chance to continually up their offer as well. the maybe 20 parties making bids, maybe none. it looks like it will be some in between that. by the end of the process could be noon or 2:00 the morning there will be a locked in buyer and a backup. that backup will be in place in case over the next 20 days the deal is in close. >> in your view, or the top people? >> that is a good question and one that i cannot answer.

up.e have them pmc, ice, univision, would any of these -- >> i don't know where you got them for the they are not accurate. that is from the early reporting. ok, this is a quality business. it is a very profitable business. it communicates to a lot of people across seven different sites, seven different constituencies. jezebel's benefit -- different gawker, itpin or crazy broad set of buyers. scale matters more than ever in this business. there aren't many things you can buy that are profitable at that scale. gawker has both. >> do you feel like gawker needs to stay gawker to the buyer? is the brand as it is known --

is that essential to a deal? >> i just had a conversation with one of the parties bidding about the relative merits of keeping the gawker.com business and brand. each party will have their own point of view. pass and it will will stand firm as a quality brand. others don't want to go anywhere near it. >> for those of our viewers that may not be as familiar with gawker, characterize what that brand is. what is the value proposition of the gawker brand? it has a very snarky voice, for instance. means you're reading one particular journal is over and over again. it has a lot of voices. i think that editorial process creates the gawker brand. it is journalism. i think it is quality journalism. argument should be made for it to be compared to any other additional -- traditional or

journalistic endeavor. r has changed tremendously since the hulk hogan event. >> how so? >> the bar has been higher on stories. how different is people magazine the national enquirer? the national enquirer won pulitzer prizes, people doesn't post up summit he once told me that an american media the publication is most correct is the national enquirer. >> you sound like donald trump. [laughter] let's talk about the business more generally. you see large media companies today investing a lot of money in them. is that where digital media is going to be? legacy companies invest in them, or is one of these companies -- we have seen vice to this. none of these guys have reached terminal philosophy -- velocity

yet stop>> i am not sure there are many examples of what you're saying. have spoken to all the key people. they believe they paid a fair price. >> vox has gotten investment money. a businessill value based on traffic and revenue and profitability, you have to say what is most important to you. gh valuation by venture capitalists. we will see what the time comes when they try to go public. i don't know what the value of the business is. it is hard, that is no different than 20 years ago when the only evaluation tool is someone's purchase price. >> we will leave it there, we will hang on to mark and continue this conversation about -- changing to digital landscape of the day

with us come a lot more to talk about including the broader tech and media environment. ♪

>> we're sticking with the deals report. mark has advised that a wide range of traditional media and other entertainment companies and airbnb gawker and viacom. mark, we are talking but the overall tech and media landscape. porter -- twitter had a not g reat earnings report, people are wondering if it could be a buyout candidate. what would be the value proposition there? mark: twitter is by far the most unique company of the last 10 years. i don't get it. i still the know for sure whether it belongs or doesn't belong. think itin a feeble does. it continually stays in the vernacular.

somebody should buy the company. i don't think it is a stand-alone business. it is ever proven they can make enough money to be a standalone business. verizon would make sense. also, maybe an international company could step up and buy the company. somebody out of the box he said this is our big play. that might be good angle. twitter is trying to figure it out. they are bringing in live sports events and broadcasting nfl games. are they trying to change their dna? think the answer is yes. it is also a byproduct of having change management multiple times. i don't know how many cfos and leadership changes that had there. throwingt is a lot of -- against the wall and seeing if it sticks. that worries me.

it also, there is live sports there are businesses connected to this. then dual -- fanduel and draft gains hav -- draft kings have been in merger talks. >> consumers want twitter. there is no question but that draftlso want fanduel and kings. areagram and twitter getting closer and closer together in some ways. news on instagram or on twitter or bloomberg.com or television. it is about branding post a brands are important. >> twitter is not popular outside the united states. their footprint is not as good as even instagram. haven't hadhy they that they could user growth. >> do you think the end of merging? >> i think so for some you don't

hear them on the air anymore. they had a truce in terms of the amount of money they were spending. they were looking at ways of growing the company, we brought in google and nbc and cbs and the nba thinking here's a chance to do this great things. at the end of the day that money gets spent mostly on fox and football broadcasts last fall. it makes sense to bring them together. coheadk you so much, the of technology media and telecommunications group. >> coming up, the new cbs poll shows voters across the united states -- this is bloomberg. ♪

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>> live from bloomberg world headquarters in new york. is bloomberg

markets. must begin with the headlines. mark crumpton has more from the newsroom. mark c.: hillary clinton appears to have gotten a postconvention bounce. a cbs poll that came out today has mrs. clinton leading mr. 46-39%. meanwhile, she campaigns with another billionaire today. she will be introduced at a rally in omaha, nebraska by warren buffett. city, just outside of baltimore, is facing a massive rebuilding effort after weekend flooding. in syria, all five people on board of russian transport helicopter were killed when it was shot down during a humanitarian mission.

it was the deadliest incident involving military personnel in the syrian civil war. so far there has been no one claiming responsibility for the attacks. a majority of americans want college to be free, but they don't want to pay more in taxes. that comes from a poll done by krate.great -- ban hillary clinton has proposed free college for students whose parents make under a certain amount. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton. this is bloomberg. back to you. scarlet: thank you so much. we have some breaking news on crude oil. it is falling below $40 per barrel for the first time since april. there is the chart on angie's computer. last month it had its biggest

monthly decline in the year because producers are not increasing drilling once again. this is been a supply driven story. angie: absolutely. it is a supply and demand story. talking to a lot of investors in , they aredubai talking about how saudi arabia diversify the economy, offset some of the lower prices, and raise some cash as well. scarlet: much needed cash. just three month to go until the u.s. election. according to a cbs poll, after the democratic national isvention, hillary clinton leading donald trump by seven points. one thing seems certain. s&p 500 will move higher this year. why? matt winkler has a theory. it is an expression of .onfidence

matt joins us now with more. great to see you. when you say does not matter whether a republican or democrat wins the election, there is a distinction between the games that you see from a republican versus a democratic winner. talk us through the distinction. been 13ere have in 11 of those, the republican winner had a better year than the democrats. however, if you voted for the democrat and you were patient -- more of the buy-and-hold mentality -- you had bigger gains over the ensuing three years. it is a bit of both. were appreciative and

higher. angie: isn't this a little bit of in a historic year in that it has become more about establishment versus antiestablishment instead of democrat versus republican. matt: the data that we look at shows us two main parties. third-partyeen candidates many times. werenly real exceptions 2001 we have the.com bubble bursting and the election itself was disputed. that was 2000. in 2008, we have the worst recession since the great depression. those were the only down years. it is hard to imagine this year .ifferent from those two it is different politically but

it is certainly not different from those years when the winner won. scarlet: i wonder, as he put together the data, did you consider giving 2000 or 2008 more weight because they happened recently? 50 years anded at said, ok, there is a pattern exceptions are two and they do have something in common. they were clearly outliers because they were exceptional in their performance. angie: in the li na to november, if you did not switch or positions in january, are you done? matt: that is not for me to say. in january, there was

overwhelming bearish sentiment. if you were sitting where i'm january,t this time in most of the time the discussion was about how horrible the stock market was. there was in fact a lot of talk about recession, about the .conomy faltering here we are. it is now august 1. now, the housing market is resilient, to say the least. unemployment is still falling. jobs are being created. the consumer is actually doing fairly well. scarlet: that is the macro backdrop. what tends to happen after those conventions? is there a little more calm restored? matt: august is a good month -- if that is your question -- august is generally a good month in the election year.

in every single election your instance, the august where we , ita presidential election was benign at the stock market. scarlet: the thing is, politics is at play. we have tpp on the table. donald trump says, watch out, i'm coming for you. take tpplinton might off the table. this will affect investors. matt: i think if you look at the convention, clinton, in contrast to trump, his america was one of the seats by violence -- she really did not spend a lot of time on the downside. what she talked about was things are actually going to get better

under democrat. it was very sunny, almost reaganesque, presentation of where things lie. scarlet: finally, i love the way you in the column, talking about warren buffett and how his investments may serve as a good proxy for investments. it in perspective, in 2009, in the first few months, he was busy buying railroads in america. that was about the most bullish bet that you could make. the stock market was at its worst. scarlet: march 2009. matt: exactly. warren buffett was buying general motors back in 2009. he has not stopped buying general motors. he has something like 50 million general motors shares. he owns ibm. earlier this year he picked up

some apple shares. he is bullish on america, reflected in his stock market holdings. he always invests for the long-term. he is a value investor. if you have been paying attention lately, he has a favorite candidate. in fact, i think he is even out on the campaign trail with her, hillary clinton. angie: he already thinks america is great. scarlet: thank you so much, matt winkler. over: coming up, r's chineseube operations merge with that of didi. ♪

vonnie you are watching bloomberg. mark b.: this is your global business report. vonnie: shares of european banks mostly cell after stress test. in our quick take today, angela merkel is one of the country's most popular politicians. her political future is being tested by the refugee crisis, greece, and the brexit float. vonnie: we begin with a new report saying that britain's decision to leave the european union may have a stronger impact than expected.

most inx fell by the more than three years. new york fed president will not draw out an interest rate increase in the u.s. this year. in remarks prepared for a speech said that it is underestimated how many rate hikes there will be between this year and next. theeptember is very much on table. one of the things i have learned as a central banker is you have to be patient. we have time to make a judgment between now and september.

i want to get the benefit of information before commenting. mark b.: he also says that he thinks the brexit float will only have a marginal impact on the united states. banca monte jump after stress tests. reported sales that missed expectations. the world's third biggest beer maker said that revenues fell in key areas such as africa and the middle east. vonnie: time now for the bloomberg quick take where we provide context and information -- background on issues of

interest. merkel's recent actions have put her at unprecedented political risks. she faces new challenges after threats of attack at home. bloomeder of refugees in 2016. she insisted on europe's moral and legal obligation to shelter immigrants. here is the background. she had a previous career as a laboratory physicist but that

was swept up in the 1980's. at the age of 35 she wound up aligned with the democratic union. merkel was voted off as chancellor in 2005 by a small margin. her 20 victory was the biggest for any party since reunification in 1990. here is argument. fans say that her push to recast europe's imagema will pay off in the long run. andrefugee crisis, greece, to a lesser extent, ukraine are challenging her balancing act. that is the global business

report. had to bloomberg.com for more stories. ♪

angie: this is bloomberg markets. scarlet: let's get you a quick check on u.s. stock markets right now. the s&p 500 pulling back from a fresh record. you have energy shares falling off. the dow industrial moving -- let's call it a quarter of 1% -- the nasdaq however it is the outlier. let's head over now to abigail doolittle, live at the nasdaq with more. what is going on? mentioned, the nasdaq is the outlier. nasdaq did break the long-term trend of bearish

highs. as for the highest high, that would be the in today high on july 20 of last year. on this trading action, it does not appear that we will be taking that out today, but something to keep our eye on. as for the s&p 500, it is all about tech and bio tech. apple is higher on a few favorable court rulings. plus, it is announced that its didi, has agreed to buy uber. finally, i own is onismaceuticals -- i

pharmaceuticals on track for its best day. angie: any moves on m&a? abigail: there is. we have the announcement that solar city has agreed to be bought by tesla. the stock is down, reflecting the fact that this is less than the initial offer price that was out there, floating around. also, below friday's close. what this means for the future is, if it goes through, it will be the largest solar powered deal and it requires the movers. of as for the fundamentals, it is said that from a positive standpoint there is strong vertical and the gratian. from a negative standpoint we are still waiting to see overall what the adoption is of solar as a source of energy. ladies? scarlet: thank you so much.

it is time for the bloomberg business flash. qatar airwayss -- has raised its share in british airways. the airline says it does not plan to add to the stakes. microsoft is planning its first trip to the bond market this year. the software company, one of two companies with a top aaa credit rating. therson familiar with matter says the longest portion of the debt may be a 40 year bond. scarlet: for rising communication -- verizon communication is buying cleat fleetmatics.

the deal is expected to close in the fourth quarter. that is your business flash update. as we look ahead to what is , mattto happen in august winkler was just on telling us that stocks to pretty well in august. you cannot help but remember last august was a brutal month. angie: i was based in hong kong we watched the chinese yuan to take a dive. global stocks fell off we last august. look at where we are now. really back to level. it has been quite a year. as you recall, this is when the pboc -- as you remember, the yuan was pretty much along

that. most people have that. when it started devaluing, you saw capital flight, people taking money out of the equity market. rethink people had to how they would position their portfolio. of course, last august, the macro backdrop was very different. even a debate on whether they would move ahead of the said thierry now, the central bank is going to cut interest rates from a record low .5%. come inside the bloomberg here. work function. we are looking at the u.k. right now. what you will notice is the probability of a cut for the next meetings. almost 100% of a cut.

this is what mark had indicated. day before thee last meeting, people were looking for a pretty good chance for a cut then and mark carney declined to change then. we will take you to back before the brexit float. no one was looking for a cut -- actually, let's go back a little further. people were looking most likely for a hike than a cut. sentiment fromin what people were expecting. right now, speculators on hedge funds are most bearish on the pound. angie: the real sentiment is whether or not mark carney will economists do as expected.

he said he is going to take a look at hard data. it is hard to factor in brexit when the negotiations in article 50 have not been implemented yet. scarlet: exactly. driven.all sentiment we've much more coming up on bloomberg markets. robert kaplan, president of the dallas federal reserve, will be speaking. why he thinks september is still on the table. this is bloomberg. ♪

>> is 1:00 p.m. in new york. welcome to bloomberg market.

♪ >> from bloomberg world headquarters in new york, good afternoon. scarlet: good afternoon. here is what we are watching. u.s. stocks heading to record highs despite energy shares getting slammed. fresh concerns the fed will not hit. >> we will hear directly from -- he says it could still be on the table if data supports it. more highlights coming up. scarlet: we are watching china. economy watchers scratching their head after many entering in july. we're looking at the tale of tea does emi's. halfway into the trading day, the markets desk

where julie hyman has the latest on crude oil and wti falling on crude oil. >> even crossing below threshold briefly. declinesee the decelerating as the day has gone on. the moment. it definitely test below briefly earlier in the session. last week as well as the rate count from last week. what does that mean for stocks. 500.oks at the s&p we have seen a big diversions between the two. correlation the down to some extent recently.

here are the other two instances . after we saw the s&p decline. we have the s&p 500 continue to go up as oil goes down. can that last? is not lasting today necessarily. accelerated andks have deteriorated. we are seizing -- seeing sizable declines here. heavily weighted in the s&p 500. , the s&p 500, look at the major averages and it has kicked more deeply into the red. the nasdaq has cut its gains just about an half. >> none of them are rising. there is also news in alternative energy. scarlet: tesla buying for a

lower price than originally talked about. and being acquired by chinese company here, one $.1 billion is the place on that. about 11:60 per share. this is having a ripple effect among the other solar stocks. lower price than originally the solar city and tesla is kind of its own case. you look at other china-based solar companies, you see a rally there based around the solar acquisition and what is going to happen now. scarlet: this will be the first time. scared. >> i will think about it. first word news this afternoon. mark crumpton, lies in our newsroom.

mark: tenuous infections of the -- 10 u.s. infections of the zika virus. week.fied last florida health officials say they believe active transmissions of zika are occurring only in that area. the owners of pulse nightclub in florida say it will reopen according to the foundation website. on june 12rlando here at 53 others were injured. the shooter was killed by police. president obama is said to address in atlanta this hour. he will announce overall veterans homelessness has been cut in half. point building massive database. in libya, a new and more

persistent front against the militant group and comes of the request of the u.s. backed government. the warplane hit a tank and several vehicles along the mediterranean sea. attack was an example of what he calls precision strikes by the u.s. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 company -- countries. this is bloomberg. back to you. last week's u.s. gdp report, take a look, marking the weakest economic start for years since 2011. sitting down with tom mackenzie in beijing. it was due to demand or uncertainty.

>> uncertainty rising from a couple of sources for short. downward, most business leaders i talked to, not spectacular growth for the business, that is one aspect. the second aspect is the rate of disruption in industries. meaning you go industry by industry and there is a new entrance or competitive threat or disruptive threat that at a minimum reduces differences and hurts margins. in some cases, it may actually change the model. those uncertainties together are causing business leaders to -- capital spending and expansion plans. those are probably the two big affecting capital spending. i do not think those drivers are going away. a prolongede

situation for capital spending. the capital spending is muted. energy prices and commodity prices generally have been lower. that has created a dampening effect. classy talked about the environment of lower inflation, policymakersd for ,- the need for immigration policies put in place to lift us from the low growth area. are there any in particular that you think are the most easy to enact in the most important? >> let me explain that further. there are secular drivers that

are affecting gdp growth. one of them is demographics, aging demographics. populations are aging and most advanced economies. levels of disruption are high. a higher level of debt to gdp. a key rolelicy has to play. needur point, there is a for structural reforms and other actions that might express issues.nt aging populations a big challenge, we need to have a discussion about how to grow the workforce, including immigration reform. highcularly if there are levels of immigration. vocation training to help people

make the transition if they lose their jobs to find other employment. those are structural changes that need to be looked at. my job as a central bank or is to stay away from the politics of it. out there are persistent trends and monetary policy has limited effect in addressing those and we need other policies if we are to have higher levels of growth. another one is infrastructure spending. we probably understand in the united states and there are great opportunities for infrastructure spending. those are things that need to be looked at. >> we have heard from central bank and other policymakers here that say there needs to be itater coordination when comes to monetary policy. is that something you agree with? is,wo comments on that, one

as a central banker, i will speak for myself, that we certainly in our job as central bankers need to be sensitive to the currency impact of what we do, the strength of the dollar and the ripple effect that can have on other countries. in terms of the coordinating is probably more appropriate for janet yellen or other policymakers tuesday to moreand that is a subject appropriate for others to comment on and not as appropriate for me to comment on. >> you comment on potentially a need for the widening scope, more widely at the international environment. that has an increasing play. >> i do believe strongly to be a central banker of the united states today, you have got to think globally. it is not optional. what happens today, for example i'm here which is why

visiting, to transmit only to the underlying economy the very quickly to financial markets, as we saw in january of every rate, when turmoil here trance that it into the global tightening of financial conditions. policy diversions and also we have got to be aware of what is going along -- what is going on in the world. affect the united states much more quickly. that has got to be a key part of -- jobs though we understand scarlet: coming up, wti falling below $40 per barrel for the first time since april. alix steel will be back to help explain the drop. this is bloomberg. ♪

lau: you are watching bloomberg markets. scarlet: let's get some perspective from our very own alix steel. away. over to you right give us the charts we need to know. this has started to roll over oil prices. basically, how much money taking crude and processing it. it was rising and that is all good, but it has started to roll over and the concern is if the refiners are not making enough for their products, they will back up crude and they could be

in an inventory crunch problem like we saw in the first order. the chart really speaks to that roulette, gasoline inventory. the blue line is current global gasoline inventories, and the green line is the average from 2011 until 2015. are well above average and this has been what has caused global refining margins to shrink. all of that weighing on oil .rices the third factor is really u.s. . the third factor is really u.s. the spirit it has to do with rising u.s. rig. the flight line here at the bigger he's oil rig index, no matter how many rates are operational here in the u.s., and the blue line is u.s. oil production. u.s. production has been rolling over but as it rose to 50, we have seen comebacks online.

the question is, will we see them continue higher and will u.s. russian wind up moving higher as well? a lot of uncompleted wells here in the u.s. onlineil could come back . that is the picture of where we are and why we see oil has fallen from 60 until 39 now. that is what people are waiting for. it starts to happen right as the rig count except. i will ask you what everyone is wondering and there is probably eight answers on it. what is and where is the bottom? at bondsy are looking in high 30's. we cleared some inventory and there is room. oil supply the crude

, goldman sachs's range bound between 45 and 50. same, a glut in the market. we are still ok. how has the demand picture changed? whether it is signs of china'transition to a consumer economy being slower than anticipated. >> relative demand here is pretty much ok. not asgood as maybe some have thought about, but the -- asia is where the difficulty is. backing up a lot of crude demand. we have heard about the economic

run cuts. saying we are not making money, i am out. it is range bound between 40 and 50 p are now we are below 40. alix: a lot of experts are looking at rebalancing in the third quarter. now i am kind of hearing more in the first half 2017. we will need higher oil prices to incentivize people to work. but the oil companies are now saying, they will have to do it. good to see you. >> a lot more coming up. stay with us. ♪

has agreed toon

buy a gps tracking company for $3.4 billion. cory johnson is discussing what this signals. i will send it over to you. cory: thank you very much. patrick, we have seen this amazing time right now in enterprise software, where i feel like this is coming left and right defying evaluation almost. >> this is the most tech m&a we have seen since 2000. eight companies but this year. cory: i'm not saying you are old but you have covered it for a long time. what is driving this? private equity buyers, what is going on?

capital is cheap. buy and ier to definitely think we are seeing the fear of missing out technology and. you start seeing assets disappear, particularly strategic. you start to see things disappearing and we better buy it now. cory: is there a particular type being bought here? >> some companies but for the most part, it has been set. if you remember, in february, we a dinningwhere both

company and linked in missed on the same day. remember that? a whole sector. evaluations got cut in half. cory: i interviewed a lot of that to lincoln's conference call. a conference call, yes, we do not know what happened, it did not work, it seems i execution issues with one company in particular. company and linked in missed on the same day. remember that? >> evaluation got cut in half. have private equity guys 30 or 40 companies of their own and they are looking at their own and they are like, there is nothing wrong there. all this money, we will go shopping. then in april and may -- >> they got involved because they had distances of their own that could not scale and they thought it weaken stick something on top of this come it would go faster? to take one company and use that as a platform to buy more things and added on. the other thing going on his

they knew the spending environment was fine because they see exactly what is going on with the companies they own but the public companies were cut in half. these are great deals, we will go by them. they were really worried at that time about profitability and operating margins and all of that. these guys do not care. they will combine that anyway. getting thearted fear of missing out and it accelerated onto itself. we have seen in the last 15 or 20 years, the biggest companies, sit back and wait for a a blowoff and then come in and grab these things. week, now as with last saying we will pay for netsuite. >> i think that was different. if you look at the linkedin it, we sawthey got this battle and there were great prices. than 20.s

let's talk about linkedin very quickly. see microsoft and linkedin together being a competitor two years down the line? >> i think that is why they did five times to get it. he really stressed. it will be more of a challenge to his core business because all of the data in linkedin will make microsoft software better. cory: does microsoft have that software? >> yes here it if you take all the data on linkedin, who knows the person you're trying to reach you put that in. cory: you want to find out the potential customers, that information is on linkedin in a that -- data friendly way tells you hear are all of your potential customers and so on. >> here who -- here is who you know who knows the person you're trying to reach, and here is who you know who knows someone has taught.

it easier.ill make a forest fire now. the wind blowing through there is the capital. as long as interest rates stay low, you will stay clear of it. as usual, thank you. cory johnson there. scarlet: up next, early indications with july's show china companies -- preventing further deterioration. we will explore that next. this is bloomberg. ♪

angie: i am angie lau. p'slet: i am scarlet fu

blumberg markets. mark crumpton has more from the newsroom. findsa new gallup poll voters are more likely to support hillary clinton after the democratic convention than donald trump after the republican convention. likely to support donald trump after the convention, compared with 61% less likely. 65% say they are more likely to support mrs. clinton postconvention and 41% say they are less like a to support her now. some clues about what happened to the hot air balloon crash in texas over the weekend. all 16 people on board were killed when the balloon hit high tension power lines. authorities looked at cell phones ipads and three cameras that were recovered from the wreckage. there has been no claim of responsibility for the downing of a russian transport helicopter in syria. all five people on board were killed. it is the deadliest single

incident for the russian military since it involvement in their civil war of the helicopter was returning to a russian airbase after delivering humanitarian goods to the city. the iran supreme leader said that average iranians had not seen any benefit from the nuclear deal with world powers. final say on all state matters, he said the deal was meant to remove oppressive sanctions that has not happened. meanwhile, a senior iranian the automatic official accused the u.s. of failing to uphold its end of the nuclear agreement. global news 24 hours a day powered by more than 26 hundred journalists and analysts in more than 120 countries. this is bloomberg and i am mark crumpton. back to you. oute: the federal reserve of the way, we turn your attention to the bank of england. thursday, many are anticipating

a rate cut to head off the risk of her death recession following the come -- the kendrys vote to the european union. earlier, bloomberg spoke with elizabeth, vice chair of investors, on the yield curve and how it would invert on a session. >> that is a loaded question. it is a key question. a bit of a nice edge in terms of what will happen. it is a tough decision for the bank and the bank of england committee. alreadyne hand, we have got sterling under pressure, on the other hand, we might trigger that. vonnie: yes, i mean, markets show the function at the moment which shows exactly how few traders think -- to a certain extent, maybe that will be the wrong thing to do. any thoughts in that direction would alsoinvestors

side with the traders, on balance, less like the there will be a rate cut immediately, though we might see stimulus such as funding for lending tree for example. there is virtually nowhere else to go and we know the bank and are disinclined in negative rates. it is a huge decision and it might only be a order of 1% at a very big decision. we are feeling a little bit like maybe it will not happen this time and that leaves some runway for autumn. there is no hard data yet. as in today'sa purchasing of manufacturers, it was pretty gloomy. >> yes. we are looking at individual points and it is hard to predict. one of the biggest questions is what long-term inflation numbers will be. but you are right, on the one it really going to

stimulate the economy? on the other hand, we need to see sterling at a reasonable level and we do not want to trigger anything that might further devalue sterling. otherwise, we will probably hear more about the bank of japan stimulus, detail, that that was always in the details. the onus is put back on the government, which is probably how they would like it because all the onus has been on him for a long time. i said it surprised the markets. it is now really for the government. you've seen the monetary and fiscal policy. what are they going to do? a bitimportant there was of a wake-up call, that the boj could not continue to support these markets. they will do more buybacks which would help but it was a fairly limited response, as you say. >> coming up, you have been telling me about it all day. today's is history stock, all

hail. hole.tal ace in the you will spend the next two minutes guessing. ♪

scarlet: i am scarlet fu. angie: i'm angie lau. let's get to the markets desk where julie hyman has the hand. all hail today's mystery stock, whose winning hand included a digital -- do you want to guess? you do the honors.

all hail. >> is this a ridesharing? >> it is not that kind of hail. this kind. hail caesar. caesar entertainment is the company we are talking about. , youline gaming company can see here over the last year, these are thewns, complicated corporate structure. parents have a filed for bankruptcy and it has other corporate entities. that accounts for some of the choppiness we see in the stock. is heading higher after selling, $4.4 billion. led by shanghai giant network technologies agreed to buy it for that price. this is a sale that had and talked about. the fact that it is actually helping -- happening is helping shares today. best of all, it will continuing to be based in israel. a gamble for a chip that is not

exchangeable for money. other interesting thing is chinese investors buying this online gaming company, even though gambling is only legal in a couple of casinos, this is more of a longer-term that for some of these investors. if you look at other casino stocks, we see them pull back even though gaming revenue overall last month fell by a smaller margin than expected. analysts were looking for down about five point 5%. nonetheless, seeing small declines here for the casinos. is not, currently. its operations are here in the united states. >> thanks for that. time now for a look at some of the biggest business stories in the news right now. gawker media founder filed for

personal -- personal bankruptcy protections today. the $140 million verdict won by hulk hogan in an invasion of privacy lawsuit. slowed inin the u.s. june. factories reduced employment, which suggests they are focused on cost-cutting while the economy gains speed. mcdonald's pushes for healthier food options. removing artificial preservatives from chicken mcnuggets, it's most popular menu item. also plans to cut high fructose corn syrup out of its buns and remove preservatives from foods like soft drinks and aches. that is the bloomberg business flash. coming up, the former japanese finance minister mr. yen, says face toward could 150. -- this month.

we hear from him himself next. this is bloomberg. ♪

angie: this is bloomberg market. set to government is reveal the details of latest stimulus package tomorrow. the 26th of stimulus since markets crash in 1990 and it follows last week's thatal addition disappointed many in the markets. the former japanese finance minister said the prime minister abbe fiscal stimulus package is

not likely to halt the rally that has taken the end toward 100 dollars. then incorporated in the markets so that when the place, i do takes not think it will have a major impact on any of the market. i think the yen dollar rate -- $100.bably slow >> do you expect us to go to 100 this week? >> it will probably hit 100 may be in the next month or two. it may be one dollar or 100. >> if the current stimulus is trying guess -- going into the market, we are also seeing the bank of japan saying they will review the impact of stimulus so far.

, therefore, we are at no more negative rates? what do you think of a review might produce? why have they gone into this rather than more stimulus? >> i think bank of japan may take more drastic measures in wasember, but the easing much smaller than the market had expected, so the market japan, therek of was disappointment. >> can you give us your thoughts on helicopter money? define it however you like, but do you expect to see japan helicopter money or japan doing helicopter money already? >> i do not like the word

helicopter money. quantitative easing and monetary policy, it is probably what they're aiming at at the moment. i think the bank of japan has eased monetary policy continuously for the last two years i think the easing of the monetary policy, or the effectiveness of the monetary policy, it has weakened somewhat. take in terms of fiscal stimulus, what is the right combination to really move japan back toward 2% inflation target? back to of all, moving the inflation target is extremely difficult. i think richard 1% is probably what is wanted at this moment.

he is -- satisfied with the kind ofdoes not have any sense crisis in terms of the japanese economy. >> joining us now is joe weisenthal. we will stay on the topic of currencies because we are all on this market. we're in the big though that to the meeting on thursday. the bank of england client to cut interest rates about three weeks ago. the positioning this time around is incredible. most bearishre the on sterling going although it backed 25 years. short positions out rate long positions by 80,000 contracts, more than 80,000 contracts last week. that is the most since bloomberg began tracking the data. >> it is remarkable given how much has arty happened here you

would not necessarily think at this point with a greater than 10% decline post brexit, that you would still see this much of a speculative buildup. maybe it is one leg of a multiple trade, people are short pound and long ftse 250 stocks or something, but that is dramatic. come inside the bloomberg care, here is the function and we are look at it in terms of town. you are right that every single currency has declined versus the pound during that time. goodthat would have been a trade, short pound. want to mention that mark chandler, global head of currencies, will be joining us later today at 4:00 p.m.. i see talk about the pressure on the pboc whether or not to maintain that which communicated the markets.

take a look at our chart now. we have got the china monthly money supply upward. take a look at the ratio. this shows the velocity of money flowing through the chinese company. it is really a reflection of what is happening here. you can see an uptick but as we know, we are also seeing a lot of credit driven growth. that is helping provide more liquidity. joe: i have seen it argued that the search in m on without a corresponding surgeon m2 might reflect some sort of failure on the part, pumping all the money in the economy but not getting that joel, diminishing marginal returns of the credit. i have seen more more people talk about that divergence. china here.tay on the early indicators for july present a mixed picture. you have manufacturing data outperforming official data.

joining us to discuss the latest economic data is an associate professor, christopher. how unusual is it to have private data showing something more bearish than the official data? >> it is unusual but what is interesting is you look at the output numbers we see across a range of industries, it is clear the chinese economy is continuing to decline or contract somewhat. industrial revenues are-over-year through june only up about 1%. it gets to the issue you're talking about about pushing credit to the economy but when you see the economic activity and revenue growth we are seeing, it is really much slower, indicative of that flat growth. really is point, it the reflection of the broader slowing in the chinese economy. a look at theng

smaller to medium to private companies, where the official data has a broader swath. >> yes. another thing is there are different types of firms being sampled here. even if you look at real economic output, we are seeing pretty flat growth in economic output across a range of industrials, much more indicative of that flat and weaker economy we are seeing with the official data. >> global markets do not seem particularly concerned about any of this. be market, they seem to doing fine. coming up on the one-year anniversary of that devaluation, the u.n. has been weakening lately. are we going to start caring again? will markets suddenly wake up down the road and say, things are not that good and there are ramifications outside of china? >> one of the biggest issues is how it flowed in a year and two years ago in the commodity markets. a are excepting now that the new lower normal for oil, iron or, and all of these types of input,

really driving that, and the other thing is there is an of a gradual decline rather than the big surprise everyone was thrown august 11. >> an interesting chart, we talked about this on the show, if you look at oil prices versus oil-yield energy, say, prices have resumed their tumble and that market was so jittery a , associated with commodities really getting slammed and this time around, it does not aim to be spilling through, suggesting that some days markets associated with commodities have sort of just accepted the new reality a little bit and prepared for them. >> yes. it is interesting to see the high-yield especially independent oil and gas producers, especially since there has been emerging default in the markets, you had not seen the panic associated as you did a year and two years ago when there was arguably greater pricing. >> what is the move in beijing? and associated -- associate

nearlyor, we are anniversary of china developing currency. there has been a valuation in the past couple of months. is there a sense of another big move out of beijing anytime soon? >> i do not think there will be a move because they have seen what happens when they do big an unexpected moves. they have learned their lessons. they were surprised to markets would react so violently after august 11 so now they are trying to essentially land an airplane on the aircraft carrier, letting it go live -- glide in. >> the g-20 will be very important for china on the global stage. they really set up a lot of expectation as to the dominance of china in the world economy. do you think we will see policy shift and announcements before that just to set it up? is not likely and the primary reason is a lot of the countries right now have

very different interest. people are making arguments about the u.s. economy but i do not think anyone is say we need a stimulus though to push u.s. it stimulus and drive investment. in china, you are seeing up to 15% shadow budget deficit, which is enormous. provinces in china running budget deficits. these astounding numbers, i think there is not a lot of agreement as to some type of coordinated action because a lot of these countries have economically.rest >> in terms of putting a public face on what possessed to the world, you have the republican presidential nominee, donald trump candidate, speaking hawkish we about what he will do when it comes to the china and u.s. trade. does that have any effect whatsoever on how china positions itself? ttp, a big issue with both candidates saying they

are against it. hoping it goesf away so they can give china the ability to influence a regional trade box or push their own plan. china's hoping that falls by the wayside. joe: i want to go back to what you said about the fiscal deficit. that was contrary for a lot of people, people say china is the one country that has fiscal firepower. everyone is thinking about it wrong? >> yes, i think it is accurate. in the united states, 50% is done in the federal government. in china, only 50% is done by the central government. we see budgetary numbers associated with central government, running a moderate 85% ofgh deficit of gdp, that spending is done at a provincial level incurring large fiscal deficits, and there are problems with running fiscal deficit at 20% of gdp.

prudent aret running deficits of four to 5% of gdp. thatan sachs was one estimated the entire fiscal deficit is about 15%. >> and very quickly, the disconnect, despite them saying it wants to be consumer driven, it is falling back on the same policy handbook of credit driven growth. >> that is exactly it. have an investment in china has fallen off and the all -- all of the investments you are seeing is airports and things like that. .> all right, christopher thank you for joining us today. for more commentary, check us out on the bloomberg. joe weisenthal of what did you miss. thank you for joining us and later, we will focus on changes in the chinese economy and financial history. ♪

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11 a.m. in san francisco and 2 p.m. in new york. i am david gura.

vonnie: and i'm vonnie quinn. welcome to bloomberg markets. bloombergare live in world headquarters, covering stories out of washington, philadelphia, and beijing. president says that a rate hike is possible. he is optimistic even after a report shows second quarter growth was weaker than expected. vonnie: oil plunges, plunging global a barrel on new glut concerns. how low will he go and why? david: we have an exclusive interview with the uber board member bill gurley. let's go to the markets desk where julie hyman has the latest. julie? julie: