from bloomberg's world headquarters in new york, good afternoon. i am david gura. here is what we are watching this hour. global bond yields touched all-time lows in the last month, and that is making bill gross nervous. the bond king sets record low bond yields are not the risk. mark bertolini will join us -- his company out with better than expected earnings, but a better with the doj over a merger with humana could cause problems down the road. plus, the cofounder of american securities tells us white american-based companies are so attractive to him right now. one hour from the close of trading, let's head to the markets desk julie hyman is standing by. julie: we have the selloff. it is updating a little bit. the selloff also happening on heavy volume, you see the three

major averages are lower. -- dipping dealing as low as a 1% decline, but all three still lower as we have concerns about central bank's effectiveness in fighting global slowdowns. not giving aspan much stimulus as had been anticipated. franko heard from the fed kaplan who questioned the effectiveness of monetary tools or the difficulty in using monetary tools. if you look at the three-mark -- ix, itmonth chart of the v shows it is the highest it has been going back to the period surrounding the u.k. vote to leave the european union. if you look at other assets, the is seeing an uptick or gold futures are rising for the sixth straight session, and crude oil

futures are trading lower. that is how this macro view is playing out. let's go back to stocks. transportation a huge drag. delta going down after unit valley value fell. royal caribbean lower after its earnings report, and forward, not technically in the transportation average, but it makes stuff that gets you place. they came out with july sales that missed estimates. we have been watching july shares. can we switch over and look at melon crop and some of the other -- excuse me, biogen. big one-daying a surge after the wall street journal reported they are getting take over interest from the likes of mark or allergan. shares are reacting to that. david: on the health care note,

i will talk to the ceo of aetna and about 10 minutes time. let's check the headlines with first word news. mark crumpton has more from the newsroom. mark: a new poll has hillary clinton leading donald trump i-8 points. the nbc news survey monkey paul 42%.linton leading 50% to four-away race that includes gary johnson and jill stein, clinton leads trump 42% to 30%, with johnson at 9%, and nine at 9%. encouragingama is republican leaders to withdraw support for donald trump a made the comments during a joint press conference with singapore's prime minister. president obama: the fact that he does not appear to have basic knowledge around critical issues

in europe, in the middle east, means that he is woefully unprepared to do this job. meanwhile, trump says the president and hillary clinton single-handedly destabilize the middle east. bratton has announced his register this recognition. he has twice to serve as new police commissioner and is the only person to serve in that capacity in new york and los angeles. james o'neill will succeed william bratton. the centers for disease control and prevention is making available $16 million in funding to fight zika. the agency says the money is to "establish, enhance, and maintain information gathering systems to rapidly detect microcephaly and other health problems caused by zika."

the cdc says the money is being diverted from other public health sources on till funding is provided by commerce. after hammering with strong rain, the typhoon is headed toward southern china, briefly halting down a city, trading for the day on hong kong's stock exchange. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. david, back to you. david: thank you. bill gross says the world's safest assets are getting too risky. is reiterating his call. lisa abramowicz joins us now. i always like to read from bill gross. he has a flair for language. he said sovereign bond yields are not worth the risk and not

of the top of my shopping list. it is too risky. what is bill gross saying? for: it has been a concern years that years have been -- yields have been too low and they are balanced for some kind of correction. basically, the lower yields go and a longer duration, the longer the maturities stretch out, and the more you can lose in even the strongest increase in yield. if benchmark yields were to go ,ack to the levels of 2011 investors would lose $3.8 trillion. that is a lot of money. given the stakes, he sees more downside than upside, and he could be right. the only problem is this has been the hardest that to get right for years. it is very difficult to know how to position around that perspective. what could cause rates to

rise -- when investors talk about the potential for rates to go up, what could cause that to happen? look at japan. there was an option of 10-year note there that was the least bi in five months. you see a demand for treasuries in the u.s. based on the currency differential. basically, they are having to pay too much to hedge against the dollar risk versus their currencies. it offsets any potential extra yield they would get by going into u.s. treasuries. if they don't come here, then you have to start looking at the fundamentals of the u.s. economy again, which don't seem to be quite as dire as the actual yields on treasuries right now are suggesting. david: when bill gross casts his eye around the world, looking at europe, looking at japan, is a toolbox that is essentially empty, there is not much left in it. how widely shared is that view?

like any investor, he gets some things right, something's wrong. looking at his record, how has he been doing? month he is inst the top 40 percentile, past year, 70th percentile. he is doing ok. he is not the top of the pack, but his view is shared by big and respective bond investors. jeff and unlock is among them. he came out with a dramatic statement he was quoted with the past few days. it is a rising level of concern -- how sustainable is this when profits are declining, when growth is slowing, when stimulus efforts are not working, running out of steam, how long can this last? at the same time, it is hard to see what can reverse it. the only thing, really, people point to is possibly inflation, or at some country decides not to pay back their debt, forgive it, or come up with some kind of engineering that creates a technical problem. david: coming up a chart on my

terminal -- for those that have a terminal, it is 225 four. looking at that declining yields, it is fairly dramatic. just looking at it it is dramatic. lisa: it is tremendously genetic, and that is the global sovereign yields index on the bloomberg, and is that right -- should the average yield be 0.5 percentage points? you have a place like spain that is struggling to get its government together, they can borrow at 1%. that is amazing. does it make sense logically? no, but it has not made sense for a long time and it kept going. david: great to talk to you. coming up next, i will talk to aetna ceo mark bertolini about the company's earnings beat, the impact of obamacare, and the impact of the u.s. department of on a mergerforts

with humana. this is bloomberg. ♪

this is bloomberg markets. i am david gura. insurance giant aetna is out with results and shares a higher after the company beat estimates for profits and revenue. they also announced they will sell assets to get u.s. regulators to approve their $36 billion merger. joining us from hartford, markcticut, is aetna ceo bertolini. congratulations on the results --i wanted to ask about the comment on obama care, the afford the character, and you said you will make a decision on how much you will participate in the affordable care act marketplace. walk us through the calculus and what you will be waiting the next couple of weeks.

mr. bertolini: sure, and thank you for having me on the show. what we saw was a $20 million loss in public exchanges. that set off alarm bells inside the company as we began to look at what was going on, and what we found was a high level of specialty pharmacy use and an attraction of people that need specialty pharmacy. let me first say all of these folks need this care and it is important that they get it. we are not diminishing the importance of people getting their drugs. what we found through this is that the mechanism of risk adjustment in the exchanges is not going to appropriately reflect that, therefore reflecting in these losses, and as we look forward to the rest of the year, we see a total loss for the year of $320 million in a year where we felt we would break even on the exchanges. so, we have stopped our expansion efforts, which were five markets we were going to add in 2017, and we now are evaluating all 15 of our current

markets to determine what markets we will stay in and what markets we will leave. david: as you start the -- stop the process toward expansion, are you waiting at all getting out of the marketplace entirely? is that on the table? mr. bertolini: we never make blanket decisions like are we going to get out of the whole thing -- we will look at this market by market. individual market is an important market, and we want to continue to interviewed, but we cannot put our balance sheet at risk by having this can explode on us next year. it is a commander percent in losses this year. up 300% in- it is losses this year. we cannot have that again next to. david: does the 17 to do about the merger you have proposed with hannah -- with humana? mr. bertolini: the transaction is not closed. we had certain things we were counting on, but that is a balance sheet discussion. this is about being able to sustain the business going

forward. david: that suit was announced last month and use it immediately afterwards you could settle this thing tomorrow. is that your attitude -- are you looking to settle this with the department of justice, or is this something you are prepared to fight in court and do you think you will be fighting it in court? mr. bertolini: we will be meeting with a judge shortly, so now this is in front of a court, and our two main themes to the discussion. advantages medicare compete with traditional medicare question mark in congress and the traditional record, congressman and senators talked about whether or not there was going to be a cannibalization of traditional medicare by medicare advantage. setour case, the doj has these are two, completely separate markets, and do not complete -- compete. if we were to put those rockets together, we would not require any. precious there's at all. -- die batches -- divestitures at all.

we have a complete remedy that we announced today for all the markets where there is overlap, plus some where we believe there are more markets needed to support the ongoing competitor that we would create in divesting these markets. the company ofin four other big insurers. is it advantageous to you, do you think, if your case is heard in concert with the anthem-cigna case -- does that offer any benefit if they are wait at the same time? mr. bertolini: i think the argument of five big insurers going to three is a specious argument, a populist argument. health care happens locally. that is where competition happens. our competitors are usually a blue cross/blue shield plan at the local market. not --is an argument is that does not hold any water. our deal is about the medicare market. they are completely different

argument. david: help us understand the populist argument -- you are talking about how this is going to be a merger that will play out at the local level -- this is about local health care, but the same time you're talking about the creation of a sizable company -- there might be consumers that have a hard time squaring that. when i think about health care at the local level, a bigger company will not make that work more easily. when we put our companies together, we will have 10% market share nationally. that means 90% of the people will choose some other product. so, we are not dominating anyone market. investorshad moody's saying there is a reasonable probability "-- their words -- that this will go through. i will not have you give the likelihood, but when you look at the timetable, when do you see this happening? mr. bertolini: we expect this will happen before the end of the year. david: we had the announcement that aetna humana has the

agreement to sell some assets and you think that is enough to appease the doj, offloading those assets? mr. bertolini: if you look at the doj complaint, there are further 64 markets they say are noncompetitive. we have added almost 104 markets to that to make sure whatever competitor results with molina, which is a good company, works in the medicare advantage space with 90,000 lives, that they are a sustainable competitor over the long run and become number six in the nation over -- as a result of this combination. david: how would you characterize the account bernanke -- conversations you have had of the federal government? have a government that is considerably less interested in mergers of a size like this. what is the quality, the robustness of the dialogue been? has it been a healthy dialogue? mr. bertolini: the u.s. government is not one thing. that is, by our constitution, a good thing, by the way. we have had good conversations with the administration about

how to fix the affordable care act, what we could do to promote the afford care act going forward, how many markets we can be competitive in. we have given them data to support that we workflow with cms on medicare and medicare advantage. it is this discussion with the department of justice that has been, how shall i say, less than open about what could happen, and how we could make it work versus this argument that five going to three is a bad thing for the nation. david: is it to your advantage for this to play out through the election -- here you have the obama just permit. next justice department will be. -- justice department. who knows what the next justice department will be. mr. bertolini: we are in front of the judicial branch. it is the judge's decision. the conversation with the doj, i must than judge sends us back, is pretty much done. they will present their case, will present hours, the judge will decide and will move forward from there. i like being in front of the judge. david: we talked to you at the

end of the first quarter, and you are optimistic with the affordable care act. has your town changed? mr. bertolini: a $200 million loss in the second quarter had a -- has a way of getting your attention. david: all right, mark, appreciate it. markets, on bloomberg amazon shares falling nearly 1% today but in the options inside segment, a bullish take on the online retailer. this is bloomberg. ♪

david: this is bloomberg markets. it is time for options inside with julie hyman. julie? julie: thank you, david, joining me is kevin kelly, chief investment officer at recon capital. he is here on a good day because we have seen a spike in via

tilly as we see the selloff in the market. i have a chart on the bloomberg of volatility, the day to day -- the intraday change in volatility. here you have it via the vix, of course, and this is 2451, i believe, on the bloomberg if folks or users want to look it up. basically, you are seeing the biggest jump in the vix that we had going back to the u.k. vote to leave the european union. something else that dave wilson of bloomberg news pointed out today is that the vix futures curve is at the highest -- we see the highest gap between futures and actual vix that we have seen in quite a long time. there is all this expectation of volatility coming back. mr. kelly: yeah, and one of the reason why it is coming back when you look at those dates and where volatility comes from is macro events and concerts. if we go back to thursday and friday, the leading economic indicator is durable goods. that disappointed. the gdp disappointed we are

starting to see auto sales not do very well. that is a leading indicator. that is one volatility starts to peek up and come back. we are headed into august. you know what that means -- last year, august, we have a huge china concerns. august is sometimes a temperamental month, but we know september is. people are looking out to that, especially when you see the election pick up into high give to there will be more rhetoric. that has significant implications on names like health care. the aetna was just -- ceo was just here. we have touched on this -- the of earnings came out last week. technology did very well. otherwise, it has been lackluster and tepid at best. julie: ok, we will see if this volatility increased continues. getting back to the earnings companies you were talking about, one of the company said reported last week was amazon and we saw amazon shares hit a record high following the earnings report, and even though earnings are behind us, you were looking at doing a trade on

amazon now. absolutely, and a lot of investors are mad they missed out on the amazon run, so it is still in the infancy of a bull market, we believe. it has one of the best long-term duration growth prospects we have seen in a long time. they are starting to scratch the surface in the cloud with amazon web services, and their margins are increasing, and that came out through earnings. it is dropping straight down to the bottom line. it helps them pay for future growth prospects, including prime and alexa. to october, let time be your friend, and sell the $720 put, and collect $14 for that. you will get a 2% yield if amazon does not do anything, or even goes to $721. you will make money off of that, even if the stock comes down. volatility is picking back up. we might see the share price the more volatile. the stock needs to go down five .5% before you need to buy it and you will only around $704.

meanwhile, you will never want to sell the stock. calls againsting it future out to this is a way to participate in that. julie: i am laughing because you are at a little bit of an amazon ball. i am picking it up. mr. kelly: think about it -- it m darlingsthose dotcop that has stand the test of time and they keep pivoting to better growth areas. julie: all right, we will see. kevin kelly, recon capital partners. david, back to you. david: we're almost 30 minutes away from the closing bell, and coming up we bring you the chart you cannot miss. this is bloomberg. ♪

e

scarlet fu: from bloomberg world

had corners, you're watching bloomberg markets. i am scarlet fu. joe weisenthal: i'm joe weisenthal. all of her wernick: i am oliver renick. leads trumplinton but trump question the results of recent surveys. mr. trump: i think we are going to do so great. i see great polls. los angelesom the times where we are ahead for five points. i see one from cnn where we are down. i think these polls -- there is something about these polls -- there is something phony. way race, four-ray -- clinton leads trump 42% to 30%. johnson gets 9%. stein is at 4%. a new york congressman says he will cross party lines and vote for hillary clinton. richard hanna is the first republican party ever to

announce support for mrs. clinton. in an op-ed published on syracuse.com, he says trump is unfit to lead the country. president obama and vice president joe biden are skipping the whitelympic's to house says secretary of state john kerry will leave the u.s. delegation to the highest level american official in attendance. the u.s. delegation will also spits, themmer mark winner of nine olympic gold medals, seven of them at the 1972 summer games in munich. charged inor the man the fatal shootings of nine black parishioners and a south carolina church are challenging the death penalty in a federal case. say thefor dylann roof law is unconstitutional. if it is taken off the table, he will plead guilty and spend the rest of his life and bars. at least seven wildfires continue to burn across western states. in parts of california, the

smoke is affecting air quality. officials have questioned -- cautioned those of respiratory issues to stay inside. more than one dozen homes were destroyed in montana, and evacuation underway in nevada, oregon, and wyoming. 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. thank you., markets close in under 30 minutes pat let's go to the nasdaq where we have abigail doolittle with more. abigail: the good news, we have the nasdaq off the lows. looking at a we're selloff for the nasdaq, the worst selloff since the end of june. it seemed to come out of nowhere, as is often the case following five days of gains. before those five days of gains, the nasdaq was alternating

between gains and losses every other day -- relatively small gains and losses, so a wishy-washy market has given way to the sellers. we have sin a bit of a reversal -- seen a bit of a reversal. this has everything to do with biotech. we see the index has been down for much of the day -- down 1.8% in the early afternoon, but indexaround 2:45 p.m. the spiked higher, driven largely by biogenic on a "wall street journal" report that allergan and merck might be interested in buying biogenic. appellee both of the companies have had private parliamentary talks with biogenic. part of this could be the big drop from the 2015 peak. you can say in some ways the company was on sale. our team speak with an analyst who said he and another bloomberg intelligence analyst

months ago put out a piece saying that a merger between gen would make a lot of sense. is havings, biogen its best day since march 20 this year. down 90the nasdaq is basis point could either stock sectors dragging the slower? cap/apple,e mega facebook, even intel. the biggest drag from a point perspective, apple. shares are lower. some of this could be consolidation after the june report and we also have a downgrade and an outperform from by. also is not impressed by the fact the company appears to be transitioning more toward content and services, away from hardware. she caught her estimates, but interestingly took her price target hire, to $117 a share. over the next 17 months, she

thinks apple is set to rise. when we look at a one-year chart of apple, something interesting does emerge. the stock is stuck in a range with uncertainty around the state of the iphone, but recently the stock started to break above resistance selling pressure. it remains above that resistance. we also have within their, and this is for the technical folks out there -- a bullish pattern called an island reversal. it is confirmed above 104, which ironically is where the two trendlines between support and the confirmation are. above 104, we could continue to see gains in apple. below that, the stock could drop back down into that range. oliver: abigail doolittle at the nasdaq, thanks so much as always. joe: stocks around the globe are in the red. indexes in asia and europe getting hit today. losses in the s&p 500 headed for its worst day since the selloff

sparked by the brexit vote. if you go to the terminal, i am looking at the world equity index function, and you can see a pool of red. the green down there -- one of those is hong kong, which did not treat today. pretty much everywhere you look is red. our next guest sees opportunities to capitalize on increased m&a. joining me is benjamin segal, portfolio manager of international equities at neuberger berman. is this a blitz -- the selloff we are seeing, or are we still headed higher? mr. segal: i think so. valuation is starting to a compelling, particular in europe. you mentioned brexit earlier. that is a significant opportunity. really, some companies will find challenges. in general, we are looking in finding opportunities. scarlet: in terms of these opportunities, for instance, softbank buying arms holdings -- are we talking about taking advantage of strong entities and buying up u.k. companies?

mr. segal: i am optimistic on the outlook in switzerland. i think the swiss franc stay strong so there is less of an urgency to spend my swiss franc because they might get more expensive. the yen, we have seen the strength back from 125-ish to 102. that is significant appreciation. i think a lot of people think it gets back to where it was. let's spend the expensive yen. companies in europe where currencies are weak, smaller cap copies, smaller sized acquisitions, companies with competitive advantages where you have to acquire them, you cannot outcompete them --i think they are in good shape. oliver: we pay attention to the japanese yen straightened. how does that affect the carry trade that was common, and where these people using that money to buy in the u.s.? what kind of assets do they buy? mr. segal: i do not think the carry trade is happening

anymore. it resulted from the fact the japanese interest rates are low and remain extremely low. essentially negative. you also have a weakness in the yen, so when you go to pay your money back, you're getting more yen for your dollar. with its strengthening, you might have borrowed $100, but might have to repay $106, or $110. that is a problem. i do not think they are using it as people buying -- borrowing and funding. people are looking at it, if i softbanken, if i am and have global ambitions, if i am nervous about the outlook in the domestic market, now is an opportune time to take advantage of low evaluations in europe in particular. joe: we cannot talk about weakness in equities without talking about banks. we have continued to see banks selloff. we see the stress test results that came out friday. there were some hopes that would

put a floor out under them. they have not. they were hit hard. italian banks in particular. are there other opportunities there -- is this overdone? mr. segal: i 100% think it is. the italian situation is specific to it we have a bank there that is in bed shake. -- bad shape. one of the larger banks there has challenges. we are steering well clear of italy. when you look in the u.k. with a weaker sterling, france, bnp, for example, trading at 65% of book, we think it can get back to its cost of equity. over a three-year view, that has to be a terrific value. oliver: what is the big ongoing fear -- why do you think investors cannot dump the stocks fast enough? mr. segal: profitability is constrained in a world of negative or low interest rates. making any money on your deposits is impossible. you have to make it all on the lending side. drive isf your profit

going away. on the lending side, there is no appetite for lending growth. there is no growth in europe. if you cannot grow your profitable business and are struggling with the unprofitable business, i think that is what is getting investors nervous, and there is no obvious end in sight. that is why we think there is an opportunity opening up now and we are incrementally investing there, and if companies get back to book, that is about 50% upside over three years, which we think is compelling. scarlet: so there might be reason to take a look, but this morning you had deutsche bank and credit suisse deleted from the stocks europe 50 index. for investors that track the index, that means they will get rid of those names as well. buying into european bank stocks would appear to be a value trap for a while at least. it is 100% value. it is an important point you mentioned -- not just owning the constituents being

opportunistic, smaller cap names, names of that the huge balance sheets. our strategy is all caps in nature, where as the large-cap companies are well-positioned, like in health care, for example. there are clearly opportunities. you are talking about that with a guest earlier. in software businesses, global business is benefiting from long-term, structural opportunities, absolutely, you want to be with larger caps. with financials in particular, money management companies without big balance sheets -- lots ofnks without leverage, that is where you want to be. if i was really courting the bottom and a real big risk taker, i might say deutsche bank might be interesting, but that one has some way to fall. stick with the quality banks for now. oliver: one last sector i want to touch on, tech. what is the bullet point for tech? mr. segal: high returns on

capital, companies always looking for productivity enhancement, and tech is a great way to do that. increasingly, tech companies, in the software business in particular, tying clients in with recurring, ongoing maintenance revenue, less one-time hits. as you move into the cloud, i think that trend accelerates, and we saw that earlier this week. i think it is a huge, secular opportunity for tech. the u.s. is the home for the most successful tech businesses, but companies like sap in germany -- that is a world leader. oracle had to do in acquisition last week to try to keep pace. in this environment, the strong companies get stronger. benjamin segal, portfolio manager of international equities at neuberger berman, thank you. mr. segal: thank you. the ceo and founder of

american securities breaks down his investing roadmap next. this is bloomberg. ♪

scarlet: mrs. bloomberg markets. i am scarlet fu. it is time for the bloomberg business flash. there may soon be another megadeal in the health care industry. drug companies including mark and allergan are reportedly considering a takeover of biogen according to a report journal."ll street shares surged after the report to the company also announced the ceo would step down. lexis products will be pushed as part of a u.s. initiative to push safety measures for unmanned flights.

meanwhile, the department of the interior plans to is more expanded use of drone flight. samsung is unveiling its newest smartphone -- the galaxy note 7 and an.3 inch screen, iris scanner for unlocking the phone on site. in their smartphone lead over apple in the second quarter thanks to strong sales of the galaxy s7. and it is shaping up to be the worst year for american college endowments since 2009. college endowments lost a .75%.g many were hurt in august when the s&p 500 had its worst month in more than three years. and that is your business flash update. largestwhile the private equity firms are facing challenges and closing deals, american security has closed four with one still pending. michael fisch joined the

go." this morning. mr. fisch: plan to be lucky. it helps to be american pair to be american pair we only by american headquartered company could we think america is a safe , great place to invest in we focus our energy here where we were born and raised. david: you are middle-market and u.s.-centric. how do you find the deals that make sense for you -- what is the place you can spot that other people are missing? it is a competitive market. i am a sure other people are missing anything, but we try to find a market leading company in a stable and growing demand industry or we are about supporting existing management and try to be good partners in a one plus one hopefully equals three situation for investors. morew has your business over the past three years -- what is been the big change in

your business? mr. fisch: private equity is no longer private. of -- which has every private equity firm required to value the private -- holdings as best they can, and the freedom of information act -- they report returns on the website. private knows how every equity firm is doing the last quarter and quarter before that in a fair market sense, and it is publicly available. we are all registered of any scale. david: how do you avoid overpaying? when credit is this readily available, interest rates are assetow, it tends to bid prices. how do you avoid overpaying? mr. fisch: it is always hard, but there is a subtlety -- the federal government has succeeded in limiting the lending available to private equity deals to about six times over

the last 12 to 18 months. if your regulator tells you what they want you to do, most regulated institutions are going to do it. entire prior cycles, you might've seen seven, eight times, even 10 times financing for cable businesses. private equity firms are forced to assess the risk and opportunities in companies and how much equity they are willing to put in above that notional six times leverage. david: you have some investors in credit -- investments in credit. i am not going to ask about specific funds, but you have had some struggles there. what have you learned? mr. fisch: i do not think we have struggles. we have a separate $2 billion distressed debt, previously issued debt business, and it is an interesting place to play in the risk return spectrum today. leverage loans of private companies, it is not unusual to

eight, 9, get six, 10, even 12% if you are buying debt issued at 100. it is a risk reward place to be and it is a good place for us. oliver: that was american securities founder and ceo michael fisch. scarlet: ford and gm miss estimates, but honda numbers show a bright spot. we have the bright spot on autos that you cannot miss. this is bloomberg. ♪

scarlet: this is bloomberg markets. i am scarlet fu. let's take a quick look at some charts that illustrate today's market stories. i want to start with aig because it will be reporting after the close today. -- the the backdrop bloomberg intelligence property and cash of the insurance here group returned all of 37 basis

points in july. that includes dividends. actually, 0.33%. members finish the year down led by hartford and child, and of the nine largest companies, aig was the only one that had a positive return and it was up 2.9%. according to jonathan adams, this may partly reflect its denver's vacation within life and retirement business lines -- diversification within life and retirement business lines. of course, for aig in particular, we are looking for a drop in profit of 32 percent after three straight quarterly losses. joe: i want to talk a little bit about auto sales today because they have been getting rolled out all day by the major automakers, and they have been, kind of, mediocre, and this is one area of the economy that has just been really strong. here is a five-year chart. less than five years ago they were below 13 million annualized

had late last year, they hit $18 million annualized. then they have been rolling over a little bit. never we had the ford earnings, last week, i believe it was, and they said they see the soft spot. it has been talk about increased incentive sales. both ford and gm july numbers came in weaker than expected. we're still waiting on the final come a seasonally adjusted, analyzed rate tabulation once they are all in and they apply the seasonal adjustment. on this oned of meh area that had been strong. scarlet: if you break down auto sales on cendant's versus light trucks you see a different picture pat light trucks, suvs continue to go straight up. oliver: i have another one. ferrari did well thanks to big chinese buyers. that is interesting about autos. different types of people by different autos. some of the really expensive cars are doing well because some of the really wealthy people -- scarlet: you could argue within

the u.s. if you are talking about low gas prices and low interest rates, it has done as much as it could possibly do at this point. oliver: sure. i do not know him and by looking at gas and go out and buy a new car. anyway, i'm looking at the trading range put together by team, --nal the stocks and turn on the stocks team, showing how tightly we have been trading on the s&p here we have not had a day closing with a .5% move within the time period. today, we are vacillating. this is interesting to four anyone that watches the stock market, and realize it is hard to make money when it is trading that tightly, and which we does it break when it does? in the past, as bailey found, it typically goes down one month later. scarlet: after moving in such a tight range? oliver: a tight range does not really happen. it happened august, 2014, and september 2013. joe: a sample size were to be low.

we are doomed. oliver: exactly. scarlet: what else we are watching -- aig earnings will be a big focal point and we will talk about european banks -- benjamin segal talk about how they could be a buying opportunity. he will talk about stress tests, joe and oliver, or what it means in how you value the companies. joe: absolutely. there have been a lot of questions about the stress tests and you can see it in the market -- they did not do anything to solve anybody's anxieties. oliver: do they test the right stresses. norlet: there is no brexit, negative interest rates. take a look at the major averages but less than four minutes ago before the close. the s&p down .6%. ♪

♪ we are moments away from the closing bell. i am scarlet fu. joe: i am joe weisenthal. "what'd you miss?" ♪

u.s. stocks closing lower. ow with the longest losing streak in a year. we breakdown earnings and minutes. slide, why shares didn't the stress test, calm investors? >> a rebound you do not want to miss. >> we begin with market minutes. the longest losing streak since 2015, the seventh straight session of losses. it is the worst day for u.s. stocks in almost a month. we seem to have broken down a little bit. >>